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iesy Repository GmbH - Irish Stock Exchange

iesy Repository GmbH - Irish Stock Exchange

eflect what its

eflect what its financial results and condition may be in the future following their acquisition and integration in our business. Furthermore, ish’s audited annual financial statements for the period ended December 31, 2003 include only eleven months of operations of its operating subsidiaries. We have also not included in this Prospectus quarterly financial information relating to ish, other than as of and for the three months ended March 31, 2004 and 2005. You should not rely on ish’s quarterly financial information for three months ended March 31, 2004 and 2005 as indicative of its past performance and should note that there may be significant differences among the accounting policies of iesy and ish that may make a comparison of such quarterly financial information with the quarterly financial information of iesy unreliable. Unaudited pro forma information for the Refinancing, the ish Acquisition and the related Financing. We have included quarterly and annual unaudited pro forma financial information that takes into account the Refinancing, the consummation of the ish Acquisition and the related Financing. This unaudited pro forma information has not been prepared in accordance with German GAAP, U.S. GAAP, SEC requirements or any other accounting standards, and may not reflect what our financial position, results of operations or financial condition would have been had we effected these transactions during the relevant periods. Post-closing purchase price adjustments. The purchase price related to the ish Acquisition depends on various postclosing purchase price adjustments. Our estimates of such adjustments may vary from actual adjustments. For the purpose of the unaudited pro forma financial statements, we have used the purchase price paid at the closing of the ish Acquisition, which is still subject to potential post closing purchase price adjustments. We are planning to allocate the purchase price to net assets acquired. The results of the purchase price allocation are not expected to be complete before the date of issue of the Notes. As a result, the allocation of the purchase price used in preparing the unaudited pro forma financial statements is based on preliminary estimates and may change significantly as a result of the final purchase price allocation. Information on ish. The information on ish contained herein has been derived from various sources and includes material provided to us by ish prior to the ish Acquisition. As we have only controlled ish since June 24, 2005, we have not been able to verify this material as independently or as completely as we would with more time to review such materials. We have a history of losses and expect to continue to have losses for the foreseeable future, which may adversely affect our business and our ability to engage in financings in the future. iesy and ish have generated substantial losses. A portion of these losses consists of depreciation and amortization expenses that do not directly impact our cash flow or are extraordinary items. We expect to incur losses in the future. In particular, iesy expects increased amortization and interest expense and the fees and expenses relating to the Refinancing, the Financing and the ish Acquisition to affect its results adversely. For the year ended December 31, 2004, on a pro forma basis, we would have incurred a consolidated net loss of €173.3 million and for the three months ended March 31, 2005, on a pro forma basis, we would have incurred a consolidated net loss of €31.5 million. Continued losses may adversely affect our business and limit our ability to engage in financings in the future. For more information, see “Operating and Financial Review and Prospects of iesy—Factors Affecting Our Results of Operations—Losses” and “Operating and Financial Review and Prospects of ish—Factors Affecting ish’s Results of Operations—Losses.” We depend on key personnel and may not be able to retain these key employees or recruit additional qualified personnel. Our continued success depends, in part, on the services provided by our management, executive officers and other key employees. Our management may change following the ish Acquisition. The loss of key personnel or our failure to recruit and retain key personnel and qualified employees could have a material adverse effect on our business, financial condition or results of operations. Approximately 43% of iesy’s workforce has the right to cease working for iesy and return to work for DTAG and its affiliates. Eighteen percent of iesy’s workforce must in principle decide whether to exercise this right by the end of 2005, while 25% may exercise this right at any time. Since this right was granted in connection with DTAG’s divestiture of its cable television business, approximately 55 iesy employees have exercised this right as of March 31, 2005. Approximately 30% of ish’s workforce has the right to cease working for ish and return to work for DTAG and its affiliates. Three percent of ish’s workforce must in principle decide whether to exercise this right by the end of 2005, but under certain circumstances and subject to negotiations the return right may be extended to June 2007 or to a later date. If further employees chose to exercise this right of return, we may need to hire new employees, and there can be no assurance that we would be able to employ personnel with adequate qualifications or that we would be able to replace key employees. 46

Strikes or other industrial actions as well as the negotiation of a new collective bargaining agreement could disrupt our operations or make it more costly to operate our facilities. We are exposed to the risk of strikes and other industrial actions. Approximately 34% of iesy’s employees and 31% of ish’s employees are members of a labor union, and we may experience lengthy consultations with the labor unions and the works councils or even strikes, work stoppages or other industrial actions in the future. iesy entered into a collective bargaining agreement with the labor union in 2002, which applies to 86% of iesy’s employees and provides for annual salary increases. iesy gave notice to terminate this agreement and is currently renegotiating the agreement. ish is also renegotiating its collective bargaining agreement which covers approximately 83% of ish’s employees. Such renegotiations may result in further salary increases and changes in working practices at both iesy and ish. Strikes or other industrial actions as well as the negotiation of the new collective bargaining agreement could disrupt our operations and make it more costly to operate our facilities. We have unfunded liabilities with respect to our pension plans and other post retirement benefits. iesy and ish maintain a number of pension plans to cover persons whom they employed prior to January 1, 2001 and July 14, 2000 respectively. These plans provide for the payment of retirement benefits and certain disability and survivor benefits. After meeting certain qualifications, an employee gets a vested right to future benefits. In most cases, the benefits payable are determined on the basis of an employee’s length of service, earnings and position. As of March 31, 2005 on a pro forma basis, our total provisions for pensions amounted to €4.8 million. These provisions do not reflect future salary increases and are based on certain assumptions imposed by law and it is, therefore, likely that the effective amount of the future pension obligations will be higher than provided for in the provisions. All of iesy’s and ish’s pension plans are unfunded and we may not have sufficient assets to satisfy the liabilities related to those plans when they become due. These pension liabilities are structurally senior to the Notes. Uncertainties as to copyright laws may adversely affect our ability to conduct our business. The cable television industry has reached various agreements with the public broadcasters and collecting societies that represent holders of copyrights and related rights, including Gesellschaft zur Verwertung der Urheber- und Leistungsschutzrechte von Medienunternehmen mbH (“VG Media”), representing certain private broadcasters, and Gesellschaft für musikalische Aufführungs- und mechanische Vervielfältigungsrechte (“GEMA”), representing, in particular, certain public broadcasters. The contract concluded with GEMA is scheduled to terminate on December 31, 2006. The agreement with VG Media runs until December 31, 2005 and it will be automatically renewed for further terms of 1 year if none of the parties terminates the agreement. We cannot assure you that we will be able to renew these agreements on satisfactory terms, if at all. Some collecting societies represented by ARGE Kabel have claimed additional royalty payments from iesy and ish. If ARGE Kabel prevails with its claims, our royalty payments would increase significantly. As we buy programs for our digital programs from third-party program providers, we may be exposed to claims brought by German collecting societies or other holders of copyrights and related rights, and in some cases, we may be unable to get indemnification from the program providers. Moreover, the transmission of programs by us may be forbidden in the absence of an agreement with rights holders. See “Business—Business of iesy—Intellectual Property,” “Business— Business of ish—Intellectual Property,” “Business—Business of iesy—Legal Proceedings” and “Business—Business of ish—Legal Proceedings.” Changes in German tax law may mean that we may not be able to deduct fully interest on our debt instruments. On January 1, 2004, the Federal Republic of Germany introduced new rules under the Corporate Tax Act (Körperschaftsteuergesetz) relating to “thin capitalization” which apply to the shareholder funding of corporations and, under certain conditions, of partnerships with corporate partners. Shareholder funding in this respect is not restricted to direct financing. It also includes financing through affiliates or third parties with recourse to the shareholder or its affiliates as parties providing guarantees or security. The application of the new rules may adversely affect our ability to deduct fully our interest payments made on our debt instruments for the purpose of corporate tax. It may also have an adverse effect on our ability to deduct these interest payments for trade tax (Gewerbesteuer) purposes. In addition, such interest payments may be characterized as constructive dividends that are subject to dividend withholding tax and, at the tier of the recipient, to corporate tax. We believe that the new rules should not apply in a way that materially adversely affects us with respect to the Subsidiary Guarantees given and the Security granted by us in favor of the Notes. However, there is very little formal 47

  • Page 1 and 2: PROSPECTUS iesy Repository GmbH €
  • Page 3 and 4: the market price of the Notes at a
  • Page 5 and 6: which the issue or the offer of sec
  • Page 7 and 8: “combined entity”, and “we”
  • Page 9 and 10: “Tele Columbus” refers to the c
  • Page 11 and 12: Revenue generating units, or “RGU
  • Page 13 and 14: CURRENCY PRESENTATION AND EXCHANGE
  • Page 15 and 16: end of 2005. Our subscribers can al
  • Page 17 and 18: populations, with approximately 2.7
  • Page 19 and 20: In April/May 2005, iesy entered int
  • Page 21 and 22: Our Corporate and Financing Structu
  • Page 23 and 24: THE OFFERING The summary below desc
  • Page 25 and 26: Optional Redemption We may redeem a
  • Page 27 and 28: SUMMARY FINANCIAL AND OPERATING INF
  • Page 29 and 30: iesy Other Financial Data (unaudite
  • Page 31 and 32: iesy Operational Data (unaudited) R
  • Page 33 and 34: ish Income Statement Data Audited y
  • Page 35 and 36: 35 Three months ended Year ended De
  • Page 37 and 38: 37 As of December 31, As of March 3
  • Page 39 and 40: RISK FACTORS You should carefully c
  • Page 41 and 42: acquiring content, purchasing servi
  • Page 43 and 44: agreements—MSG”). We cannot ass
  • Page 45: In addition, most of our cable netw
  • Page 49 and 50: acquisitions. In addition, any addi
  • Page 51 and 52: provision and may not be abusive. S
  • Page 53 and 54: €1,050.0 million would have been
  • Page 55 and 56: We depend on payments from our subs
  • Page 57 and 58: • Claims against the Issuer and s
  • Page 59 and 60: Senior Credit Facilities before the
  • Page 61 and 62: court rulings did not address the p
  • Page 63 and 64: THE ISH ACQUISITION The description
  • Page 65 and 66: In addition to the warranties, spec
  • Page 67 and 68: CAPITALIZATION The following table
  • Page 69 and 70: Unaudited Pro Forma Condensed Conso
  • Page 71 and 72: NOTES TO THE UNAUDITED PRO FORMA CO
  • Page 73 and 74: (€m, except percentages) Pro form
  • Page 75 and 76: Income Statement Data 75 Audited Ye
  • Page 77 and 78: (7) Number of subscribers at the en
  • Page 79 and 80: • iesy’s premium cable televisi
  • Page 81 and 82: egulated pricing model. Fees are pa
  • Page 83 and 84: Risks Relating to Our Indebtedness
  • Page 85 and 86: Legal, Consulting and Management Fe
  • Page 87 and 88: Subscribers iesy classifies its cus
  • Page 89 and 90: 2003 to €8.20 per subscriber in t
  • Page 91 and 92: • the senior credit facilities we
  • Page 93 and 94: average installation fees from July
  • Page 95 and 96: Cash flow from investing activities
  • Page 97 and 98:

    In the three months ended March 31,

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    eview and optimization of services

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    Cash Flow from Operating Activities

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    oadcasters in television and radio.

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    educed or increased by a material a

  • Page 107 and 108:

    Income Statement Data Audited year

  • Page 109 and 110:

    109 As of December 31, As of March

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    • ish’s premium cable televisio

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    In addition, ish markets pay-per-vi

  • Page 115 and 116:

    Cost of Materials and Services Cost

  • Page 117 and 118:

    For accounting purposes, ish treats

  • Page 119 and 120:

    Subscribers ish classifies its cust

  • Page 121 and 122:

    Competition ish faces significant c

  • Page 123 and 124:

    This decrease was primarily due to

  • Page 125 and 126:

    Net Loss Net loss was €17.9 milli

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    Pension Obligations As of March 31,

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    Term Sheets with DTAG, BRN-ish agre

  • Page 131 and 132:

    estructuring liabilities, while 200

  • Page 133 and 134:

    accrual for pending losses. The exp

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    International Financial Reporting S

  • Page 137 and 138:

    Content Providers Basic Television

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    Digital Home” and PrimaCom offers

  • Page 141 and 142:

    [GRAPHIC] [GRAPHIC] Level 4 is the

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    shared access basis. In this case,

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    The following table shows several k

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    In the domestic market, the German

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    BUSINESS Unless otherwise indicated

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    Germany, with approximately 30.2 mi

  • Page 153 and 154:

    Prudently deploying capital. Our de

  • Page 155 and 156:

    iesy’s Current Basic Cable Televi

  • Page 157 and 158:

    amounted to €8.0 million or 5.9%

  • Page 159 and 160:

    within iesy’s upgraded areas and

  • Page 161 and 162:

    Supply The following chart shows th

  • Page 163 and 164:

    Term Sheet Service Duration Offer o

  • Page 165 and 166:

    y the new fiber system. See “Oper

  • Page 167 and 168:

    part of settling arbitration procee

  • Page 169 and 170:

    Business of ish Products and Servic

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    ish’s Current Basic Cable Televis

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    In addition to the monthly subscrip

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    Customers who subscribe to Premiere

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    Sales ish’s sales team is divided

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    The following chart illustrates ish

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    Term Sheet Service Duration Co-use

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    Lease of space for broadband cable

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    Other Significant Supply Agreements

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    ights themselves. As an exception,

  • Page 189 and 190:

    Competition The cable television an

  • Page 191 and 192:

    Introduction REGULATION German law

  • Page 193 and 194:

    We assume that we will be deemed to

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    The Amendment provides that provisi

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    • Providers who had a dominant po

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    in the Munich office of Apax Partne

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    Marketing for Germany and Austria,

  • Page 203 and 204:

    Gerard Tyler is ish’s Treasurer.

  • Page 205 and 206:

    CERTAIN RELATIONSHIPS AND RELATED P

  • Page 207 and 208:

    Beneficial Ownership The following

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    DESCRIPTION OF OTHER INDEBTEDNESS T

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    period (unless the interest period

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    Subordinated Bridge Facility In con

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    • the ability of the Obligors (ot

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    owed by the Insolvent Obligor will

  • Page 219 and 220:

    DESCRIPTION OF THE NOTES The Issuer

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    in London, the Bank of New York, Ne

  • Page 223 and 224:

    Issuer have agreed that iesy Hessen

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    Subsidiary Guarantor outstanding wh

  • Page 227 and 228:

    the amount of their secured claim.

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    provisions described under “—De

  • Page 231 and 232:

    In addition, the Intercreditor Agre

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    Euro Note to and including February

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    circumstances referred to above exi

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    that it has unconditionally exercis

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    time outstanding not exceeding (i)

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    description of this covenant and no

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    Date of any Indebtedness that has b

  • Page 245 and 246:

    (13) Investments in an aggregate am

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    supplement or other modification) t

  • Page 249 and 250:

    (1) the assumption by the transfere

  • Page 251 and 252:

    Reports Whether or not required by

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    of the European Union on January 1,

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    contemporaneously with any such act

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    25% in principal amount of the outs

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    (2) provide for the assumption by a

  • Page 261 and 262:

    (6) an Officer’s Certificate stat

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    calculated based on the relevant cu

  • Page 265 and 266:

    “Bank Indebtedness” means any a

  • Page 267 and 268:

    Consolidated Net Income (excluding

  • Page 269 and 270:

    (9) the impact of capitalized inter

  • Page 271 and 272:

    “Exchange Act” means the U.S. S

  • Page 273 and 274:

    (iii) for the avoidance of doubt, a

  • Page 275 and 276:

    “Nationally Recognized Statistica

  • Page 277 and 278:

    (2) Investments in another Person i

  • Page 279 and 280:

    (15) Permitted Collateral Liens; (1

  • Page 281 and 282:

    (5) in the case of Apollo and Golde

  • Page 283 and 284:

    service level agreement as replaced

  • Page 285 and 286:

    “Unrestricted Subsidiary” means

  • Page 287 and 288:

    The Issuer and the Trustee and thei

  • Page 289 and 290:

    Secondary Market Trading The Book-E

  • Page 291 and 292:

    to trade tax. The taxable gain from

  • Page 293 and 294:

    date). A U.S. Holder’s adjusted t

  • Page 295 and 296:

    (c) for so long as the Notes are el

  • Page 297 and 298:

    PLAN OF DISTRIBUTION We, the Subsid

  • Page 299 and 300:

    LEGAL MATTERS Certain legal matters

  • Page 301 and 302:

    WHERE YOU CAN FIND OTHER INFORMATIO

  • Page 303 and 304:

    Listing LISTING AND GENERAL INFORMA

  • Page 305 and 306:

    INDEX TO FINANCIAL STATEMENTS iesy

  • Page 307 and 308:

    Assets iesy Hessen GmbH & Co. KG, W

  • Page 309 and 310:

    I. Application of Legal Provisions

  • Page 311 and 312:

    III. Explanation of Balance Sheet a

  • Page 313 and 314:

    Last year’s extraordinary expense

  • Page 315 and 316:

    INDEPENDENT AUDITORS’ REPORT We h

  • Page 317 and 318:

    iesy Repository GmbH, Hamburg AMEND

  • Page 319 and 320:

    and remaining useful life for the i

  • Page 321 and 322:

    The movements in consolidated equit

  • Page 323 and 324:

    iesy Repository GmbH, Hamburg AMEND

  • Page 325 and 326:

    Assets iesy Repository GmbH, Hambur

  • Page 327 and 328:

    I. Basis of Presentation The consol

  • Page 329 and 330:

    V. Explanations to Material Items o

  • Page 331 and 332:

    Network infrastructure, rental, lea

  • Page 333 and 334:

    iesy Repository GmbH, Hamburg UNAUD

  • Page 335 and 336:

    1. Basis of Presentation iesy Repos

  • Page 337 and 338:

    5. Explanations to Material Items o

  • Page 339 and 340:

    Shareholdings of iesy Repository Gm

  • Page 341 and 342:

    iesy Hessen GmbH & Co. KG, Weiterst

  • Page 343 and 344:

    COURTESY TRANSLATION FROM THE GERMA

  • Page 345 and 346:

    COURTESY TRANSLATION FROM THE GERMA

  • Page 347 and 348:

    (1) General COURTESY TRANSLATION FR

  • Page 349 and 350:

    (3) Accounting and Valuation Princi

  • Page 351 and 352:

    COURTESY TRANSLATION FROM THE GERMA

  • Page 353 and 354:

    COURTESY TRANSLATION FROM THE GERMA

  • Page 355 and 356:

    COURTESY TRANSLATION FROM THE GERMA

  • Page 357 and 358:

    The following auditors’ report (B

  • Page 359 and 360:

    COURTESY TRANSLATION FROM THE GERMA

  • Page 361 and 362:

    COURTESY TRANSLATION FROM THE GERMA

  • Page 363 and 364:

    COURTESY TRANSLATION FROM THE GERMA

  • Page 365 and 366:

    Inventories COURTESY TRANSLATION FR

  • Page 367 and 368:

    Goodwill COURTESY TRANSLATION FROM

  • Page 369 and 370:

    COURTESY TRANSLATION FROM THE GERMA

  • Page 371 and 372:

    Depreciation and Amortization COURT

  • Page 373 and 374:

    COURTESY TRANSLATION FROM THE GERMA

  • Page 375 and 376:

    COURTESY TRANSLATION FROM THE GERMA

  • Page 377 and 378:

    COURTESY TRANSLATION FROM THE GERMA

  • Page 379 and 380:

    (1) General COURTESY TRANSLATION FR

  • Page 381 and 382:

    COURTESY TRANSLATION FROM THE GERMA

  • Page 383 and 384:

    COURTESY TRANSLATION FROM THE GERMA

  • Page 385 and 386:

    COURTESY TRANSLATION FROM THE GERMA

  • Page 387 and 388:

    Cost of materials COURTESY TRANSLAT

  • Page 389 and 390:

    [THIS PAGE INTENTIONALLY LEFT BLANK

  • Page 391 and 392:

    Goodwill. Under German GAAP, the di

  • Page 393 and 394:

    Under U.S. GAAP, loan origination f

  • Page 395 and 396:

    IFRS requires a purchase price allo

  • Page 397 and 398:

    financial liability incurred result

  • Page 399 and 400:

    €235,000,000 10 1 /8% Senior Note

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