EXHIBIT 9(b)
ADMINISTRATION AND ACCOUNTING SERVICES AGREEMENT
THIS AGREEMENT is made as of February 2, 1998 by and between PFPC INC., a
Delaware corporation ("PFPC"), which is an indirect wholly owned subsidiary of
PNC Bank Corp. and THE XXXXXX SQUARE STRATEGIC FIXED INCOME FUND, a
Massachusetts business trust (the "Fund").
W I T N E S S E T H:
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Fund wishes to retain PFPC to provide administration and
accounting services to its investment portfolios listed on Exhibit A attached
hereto and made a part hereof, as such Exhibit A may be amended from time to
time (each a "Portfolio") and PFPC wishes to furnish such services.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, and intending to be legally bound hereby the parties hereto
agree as follows:
1. DEFINITIONS. AS USED IN THIS AGREEMENT:
(a) "1933 ACT" means the Securities Act of 1933, as amended.
(b) "1934 ACT" means the Securities Exchange Act of 1934, as
amended.
(c) "AUTHORIZED PERSON" means any officer of the Fund and any other
person duly authorized by the Fund's Board of Trustees to give Oral Instructions
and Written Instructions on behalf of the Fund and listed on the Authorized
Persons Appendix attached hereto and made a part hereof or any amendment thereto
as may be received by PFPC. An Authorized Person's scope of authority may be
limited by the Fund by setting forth such limitation in the Authorized Persons
Appendix.
(d) "CEA" means the Commodities Exchange Act, as amended.
(e) "ORAL INSTRUCTIONS" mean oral instructions received by PFPC from
an Authorized Person or from a person reasonably believed by PFPC to be an
Authorized Person.
(f) "SEC" means the Securities and Exchange Commission.
(g) "SECURITIES LAWS" means the 1933 Act, the 1934 Act, the 1940
Act and the CEA.
(h) "SHARES" mean the shares of beneficial interest of any series
or class of the Fund.
(i) "WRITTEN INSTRUCTIONS" mean written instructions signed by an
Authorized Person and received by PFPC. The instructions may be delivered by
hand, mail, tested telegram, cable, telex or facsimile sending device.
2. APPOINTMENT. The Fund hereby appoints PFPC to provide administration
and accounting services to the each of the Portfolios, in accordance with the
terms set forth in this Agreement. PFPC accepts such appointment and agrees to
furnish such services.
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3. DELIVERY OF DOCUMENTS. The Fund has provided or, where
applicable, will provide PFPC with the following:
(a) certified or authenticated copies of the resolutions of the
Fund's Board of Trustees, approving the appointment of PFPC or
its affiliates to provide services to each Portfolio and
approving this Agreement;
(b) a copy of Fund's most recent effective registration statement;
(c) a copy of each Portfolio's advisory agreement or agreements;
(d) a copy of the distribution agreement with respect to each
class of Shares representing an interest in a Portfolio;
(e) a copy of any additional administration agreement with respect
to a Portfolio;
(f) a copy of any shareholder servicing agreement made in respect
of the Fund or a Portfolio; and
(g) copies (certified or authenticated, where applicable) of
any and all amendments or supplements to the foregoing.
4. COMPLIANCE WITH RULES AND REGULATIONS. PFPC undertakes to comply with
all applicable requirements of the Securities Laws, and any laws, rules and
regulations of governmental authorities having jurisdiction with respect to the
duties to be performed by PFPC hereunder. Except as specifically set forth
herein, PFPC assumes no responsibility for such compliance by the Fund or any
Portfolio.
5. INSTRUCTIONS.
(a) Unless otherwise provided in this Agreement, PFPC shall act only
upon Oral Instructions and Written Instructions.
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(b) PFPC shall be entitled to rely upon any Oral Instructions and
Written Instructions it receives from an Authorized Person (or from a person
reasonably believed by PFPC to be an Authorized Person) pursuant to this
Agreement. PFPC may assume that any Oral Instruction or Written Instruction
received hereunder is not in any way inconsistent with the provisions of
organizational documents or this Agreement or of any vote, resolution or
proceeding of the Fund's Board of Trustees or of the Fund's shareholders, unless
and until PFPC receives Written Instructions to the contrary.
(c) The Fund agrees to forward to PFPC Written Instructions
confirming Oral Instructions (except where such Oral Instructions are given by
PFPC or its affiliates) so that PFPC receives the Written Instructions by the
close of business on the same day that such Oral Instructions are received. The
fact that such confirming Written Instructions are not received by PFPC shall in
no way invalidate the transactions or enforceability of the transactions
authorized by the Oral Instructions. Where Oral Instructions or Written
Instructions reasonably appear to have been received from an Authorized Person,
PFPC shall incur no liability to the Fund in acting upon such Oral Instructions
or Written Instructions provided that PFPC's actions comply with the other
provisions of this Agreement.
6. RIGHT TO RECEIVE ADVICE.
(a) ADVICE OF THE FUND. If PFPC is in doubt as to any action it
should or should not take, PFPC may request directions or advice, including Oral
Instructions or Written Instructions, from the Fund.
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(b) ADVICE OF COUNSEL. If PFPC shall be in doubt as to any question
of law pertaining to any action it should or should not take, PFPC may request
advice at its own cost from such counsel of its own choosing (who may be counsel
for the Fund, the Fund's investment adviser or PFPC, at the option of PFPC).
(c) CONFLICTING ADVICE. In the event of a conflict between
directions, advice or Oral Instructions or Written Instructions PFPC receives
from the Fund and the advice PFPC receives from counsel, PFPC may rely upon and
follow the advice of counsel. In the event PFPC so relies on the advice of
counsel, PFPC remains liable for any action or omission on the part of PFPC
which constitutes willful misfeasance, bad faith, gross negligence or reckless
disregard by PFPC of any duties, obligations or responsibilities set forth in
this Agreement.
(d) PROTECTION OF PFPC. PFPC shall be protected in any action it
takes or does not take in reliance upon directions, advice or Oral Instructions
or Written Instructions it receives from the Fund or from counsel and which PFPC
believes, in good faith, to be consistent with those directions, advice and Oral
Instructions or Written Instructions. Nothing in this section shall be construed
so as to impose an obligation upon PFPC (i) to seek such directions, advice or
Oral Instructions or Written Instructions, or (ii) to act in accordance with
such directions, advice or Oral Instructions or Written Instructions unless,
under the terms of other provisions of this Agreement, the same is a condition
of PFPC's properly taking or not taking such action. Nothing in this subsection
shall excuse PFPC when an action or omission on the part of PFPC constitutes
willful misfeasance, bad faith, gross negligence or reckless disregard by PFPC
of any duties, obligations or responsibilities set forth in this Agreement.
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7. RECORDS; VISITS.
(a) The books and records pertaining to the Fund and the Portfolios
which are in the possession or under the control of PFPC shall be the property
of the Fund. Such books and records shall be prepared and maintained as required
by the 1940 Act and other applicable securities laws, rules and regulations. The
Fund, Authorized Persons and any regulatory agency having authority over the
Fund shall have access to such books and records at all times during PFPC's
normal business hours for reasonable audit and inspection. Upon the reasonable
request of the Fund, copies of any such books and records shall be provided by
PFPC to the Fund or to an Authorized Person, at the Fund's request and expense.
(b) PFPC shall create, maintain and preserve the following
records:
(i) all books and records with respect to each Portfolio's
books of account;
(ii) records of each Portfolio's securities transactions; and
(iii) all other books and records as PFPC is required to
maintain pursuant to Rule 31a-1 of the 1940 Act in
connection with the services provided hereunder.
8. CONFIDENTIALITY. PFPC agrees to keep confidential all records of the
Fund and information relating to the Fund and its shareholders, unless the
release of such records or information is otherwise consented to, in writing, by
the Fund. The Fund agrees that such consent shall not be unreasonably withheld
and may not be withheld where PFPC may be exposed to civil or criminal contempt
proceedings or when required to divulge such information or records to duly
constituted authorities.
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9. LIAISON WITH ACCOUNTANTS. PFPC shall act as liaison with the Fund's
independent public accountants and shall provide account analyses, fiscal year
summaries, and other audit-related schedules with respect to each Portfolio.
PFPC shall take all reasonable action in the performance of its duties under
this Agreement to assure that the necessary information is made available to
such accountants for the expression of their opinion, as required by the Fund.
10. DISASTER RECOVERY. PFPC shall enter into and shall maintain in effect
with appropriate parties one or more agreements making reasonable provisions for
emergency use of electronic data processing equipment to the extent appropriate
equipment is available. In the event of equipment failures, PFPC shall, at no
additional expense to the Fund, take reasonable steps to minimize service
interruptions. PFPC shall have no liability with respect to the loss of data or
service interruptions caused by equipment failure, provided such loss or
interruption is not caused by PFPC's own willful misfeasance, bad faith, gross
negligence or reckless disregard of its duties or obligations under this
Agreement.
11. COMPENSATION. As compensation for services rendered by PFPC
during the term of this Agreement, the Fund, on behalf of each Portfolio,
will pay to PFPC a fee or fees as may be agreed to in writing by the Fund and
PFPC.
12. INDEMNIFICATION.
(a) The Fund, on behalf of each Portfolio, agrees to indemnify and
hold harmless PFPC and its affiliates from all taxes, charges, expenses,
assessments, claims and liabilities (including, without limitation, liabilities
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arising under the Securities Laws and any state or foreign securities and blue
sky laws, and amendments thereto), and expenses, including (without limitation)
attorneys' fees and disbursements arising directly or indirectly from any action
or omission to act which PFPC takes (i) at the request or on the direction of or
in reliance on the advice of the Fund or (ii) upon Oral Instructions or Written
Instructions. Neither PFPC, nor any of its affiliates, shall be indemnified
against any liability (or any expenses incident to such liability) arising out
of PFPC's or its affiliates' own willful misfeasance, bad faith, gross
negligence or reckless disregard of its duties and obligations under this
Agreement. Any amounts payable by the Fund hereunder shall be satisfied only
against the relevant Portfolio's assets and not against the assets of any other
investment portfolio of the Fund.
(b) PFPC agrees to indemnify and hold harmless the Fund from all
taxes, charges, expenses, assessments, claims and liabilities arising from
PFPC's obligations pursuant to this Agreement (including, without limitation,
liabilities arising under the Securities Laws, and any state and foreign
securities and blue sky laws, and amendments thereto) and expenses, including
(without limitation) reasonable attorneys' fees and disbursements arising
directly or indirectly out of PFPC's or its nominees' own willful misfeasance,
bad faith, gross negligence or reckless disregard of its duties and obligations
under this Agreement.
(c) In order that the indemnification provisions contained in this
Section shall apply, upon the assertion of a claim for which either party may be
required to indemnify the other, the party seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claim. The party
who may be required to indemnify shall have the option to participate with the
party seeking indemnification in the defense of such claim. The party seeking
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indemnification shall in no case confess any claim or make any compromise in any
case in which the other party may be required to indemnify it except with the
other party's prior written consent.
13. RESPONSIBILITY OF PFPC.
(a) PFPC shall be under no duty to take any action on behalf of the
Fund or any Portfolio except as specifically set forth herein or as may be
specifically agreed to by PFPC in writing. PFPC shall be obligated to exercise
care and diligence in the performance of its duties hereunder, to act in good
faith and to use its best efforts, within reasonable limits, in performing
services provided for under this Agreement. PFPC shall be liable for any damages
arising out of PFPC's failure to perform its duties under this Agreement to the
extent such damages arise out of PFPC's willful misfeasance, bad faith, gross
negligence or reckless disregard of such duties.
(b) Without limiting the generality of the foregoing or of any other
provision of this Agreement, (i) PFPC shall not be liable for losses beyond its
control, provided that PFPC has acted in accordance with the standard of care
set forth above; and (ii) PFPC shall not be liable for (A) the validity or
invalidity or authority or lack thereof of any Oral Instruction or Written
Instruction, notice or other instrument which conforms to the applicable
requirements of this Agreement, and which PFPC reasonably believes to be
genuine, or (B) subject to Section 10, delays or errors or loss of data
occurring by reason of circumstances beyond PFPC's control, including acts of
civil or military authority, national emergencies, labor difficulties, fire,
flood, catastrophe, acts of God, insurrection, war, riots or failure of the
mails, transportation, communication or power supply.
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(c) Notwithstanding anything else in this Agreement to the contrary
and except to the limited extent set forth in paragraph 13(d) below, PFPC shall
not be liable to the Fund for any consequential or special losses or damages
("Special Damages") which the Fund may incur as a consequence of PFPC's
performance of the services provided hereunder.
(d) PFPC shall be liable for Special Damages incurred by the Fund
only to the extent that Special Damages arise out of PFPC's or its affiliates'
willful misfeasance, bad faith or gross negligence in performing, or reckless
disregard of, their duties under this Agreement; provided, however, the
liability of PFPC with respect to all such Special Damages arising during the
term of this Agreement and thereafter shall be limited to One Hundred Thousand
Dollars ($100,000) per transaction or series of directly related transactions;
related transactions may be related as to parties, timing or subject matter.
14. DESCRIPTION OF ACCOUNTING SERVICES ON A CONTINUOUS BASIS. PFPC
will perform the following accounting services with respect to each Portfolio:
(i) Journalize investment, capital share and income and
expense activities;
(ii) Verify investment buy/sell trade tickets when received
from the investment adviser for a Portfolio (the
"Adviser") and transmit trades to the Fund's custodian
(the "Custodian") for proper settlement;
(iii) Maintain individual ledgers for investment securities;
(iv) Maintain historical tax lots for each security;
(v) Reconcile cash and investment balances of the Fund with
the Custodian, and provide the Adviser with the
beginning cash balance available for investment
purposes;
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(vi) Update the cash availability throughout the day as
required by the Adviser;
(vii) Post to and prepare the Statement of Assets and
Liabilities and the Statement of Operations;
(viii)Calculate various contractual expenses (e.g., advisory
and custody fees);
(ix) Monitor the expense accruals and notify an officer of
the Fund of any proposed adjustments;
(x) Control all disbursements and authorize such
disbursements upon Written Instructions;
(xi) Calculate capital gains and losses;
(xii) Determine the net income of each Portfolio;
(xiii)Obtain security market quotes from independent pricing
services approved by the Adviser, or if such quotes are
unavailable, then obtain such prices from the Adviser,
at the Fund's expense and in either case calculate the
market value of each Portfolio's Investments;
(xiv) Transmit or mail a copy of the daily portfolio valuation
to the Adviser;
(xv) Compute the net asset value of each Portfolio;
(xvi) As appropriate, compute yields, total return, expense
ratios, portfolio turnover rate, and, if required,
portfolio average dollar-weighted maturity; and
(xvii)Prepare a monthly financial statement, which will
include the following items:
Schedule of Investments
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
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Cash Statement
Schedule of Capital Gains and Losses.
15. DESCRIPTION OF ADMINISTRATION SERVICES ON A CONTINUOUS BASIS.
PFPC will perform the following administration services with respect to each
Portfolio:
(i) Prepare quarterly broker security transactions
summaries;
(ii) Prepare monthly security transaction listings;
(iii) Supply various normal and customary Portfolio and Fund
statistical data as requested on an ongoing basis;
(iv) Prepare and file the Fund's Federal and state tax
returns;
(v) Prepare and file the Fund's Semi-Annual Reports with the
SEC on Form N-SAR;
(vi) Prepare and file, if necessary, with the SEC the Fund's
annual, semi-annual, and quarterly shareholder reports;
(vii) Prepare and file, if necessary, reports with Blue Sky
Authorities;
(viii)Assist in the preparation of registration statements
and other filings relating to the registration of
Shares;
(ix) Monitor sales of the Fund's shares and assure that the
Fund has properly registered such shares with the SEC
and applicable state authorities;
(x) Assist the investment adviser to monitor the Fund's
compliance with the investment restrictions and
limitations imposed by the 1940 Act, the state Blue Sky
laws and applicable regulations thereunder, the
fundamental and non-fundamental investment policies and
limitations set forth in the Prospectus and SAI, and the
investment restrictions and limitations necessary for
each Portfolio of the Fund to qualify as a regulated
investment company under Sub-chapter M of the Internal
Revenue Code of 1986, as amended (the "Code"), or any
successor statute;
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(xi) Subject to the direction and control of the Fund,
coordinate contractual relationships and communications
between the Fund and its contractual service providers;
(xii) Prepare and monitor an expense budget for each
Portfolio, including setting and revising accruals for
each category of expenses;
(xiii)Determine the amount of dividends and other
distributions payable to shareholders as necessary to
maintain the qualification as a regulated investment
company of each Portfolio of the Fund under the Code;
(xiv) Prepare and distribute to appropriate parties notices
announcing the declaration of dividends and other
distributions to shareholders;
(xv) Provide information regarding material developments in
state securities regulation; and
(xvi) Provide personnel to serve as officers of the Fund if so
elected by the Trustees.
16. DURATION AND TERMINATION. This Agreement shall be effective on the
date first written above and shall continue for a period of five (5) years (the
"Initial Term"). Upon the expiration of the Initial Term, this Agreement shall
automatically renew for successive terms of one (1) year ("Renewal Terms") each
provided that it may be terminated by either party without penalty during a
Renewal Term upon written notice given at least sixty (60) days prior to
termination. During either the Initial Term or the Renewal Terms, this Agreement
may also be terminated on an earlier date by either party for cause.
With respect to the Fund, cause shall mean PFPC's material breach of this
Agreement causing it to fail to substantially perform its duties under this
Agreement. In order for such material breach to constitute "cause" under this
Paragraph, PFPC must receive written notice from the Fund specifying the
material breach and PFPC shall not have corrected such breach within a 30-day
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period. With respect to PFPC, cause includes, but is not limited to, the failure
of the Fund to pay the compensation set forth in writing pursuant to Paragraph
11 of this Agreement after it has received written notice from PFPC specifying
the amount due and the Fund shall not have paid that amount within a 30-day
period. A constructive termination of this Agreement will result where a
substantial percentage of the Fund's assets are transferred, merged or are
otherwise removed from the Fund to another fund(s) that is not serviced by PFPC.
Any notice of termination for cause shall be effective sixty (60) days
from the date of any such notice. Upon the termination hereof, the Fund shall
pay to PFPC such compensation as may be due for the period prior to the date of
such termination. Any termination effected shall not affect the rights and
obligations of the parties under Paragraphs 12 and 13 hereof.
17. NOTICES. All notices and other communications, including Written
Instructions, shall be in writing or by confirming telegram, cable, telex or
facsimile sending device. If notice is sent by confirming telegram, cable, telex
or facsimile sending device, it shall be deemed to have been given immediately.
If notice is sent by first-class mail, it shall be deemed to have been given
three days after it has been mailed. If notice is sent by messenger, it shall be
deemed to have been given on the day it is delivered. Notices shall be addressed
(a) if to PFPC, at 000 Xxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 Attn:
President; or (b) if to the Fund, c/o of Wilmington Trust Company, 0000 X.
Xxxxxx Xx., Xxxxxxxxxx, XX 00000 Attn: Xxxxxx Xxxxxxxxx; or (c) if to neither of
the foregoing, at such other address as shall have been provided by like notice
to the sender of any such notice or other communication by the other party.
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18. AMENDMENTS. This Agreement, or any term thereof, may be changed or
waived only by written amendment, signed by the party against whom enforcement
of such change or waiver is sought.
19. SHAREHOLDER LIABILITY. PFPC is hereby expressly put on notice of the
limitation of shareholder liability as set forth in the Declaration of Trust of
the Fund and agrees that obligations assumed by the Fund pursuant to this
Agreement shall be limited in all cases to the Fund and its assets, and if the
liability relates to one or more Portfolios, the obligations hereunder shall be
limited to the respective assets of such Portfolios. PFPC agrees that it shall
not seek satisfaction of any such obligation from the shareholders or any
individual shareholder of the Fund, nor from the Trustees or any individual
Trustee of the Fund.
20. DELEGATION; ASSIGNMENT. PFPC may assign its rights and delegate its
duties hereunder to any wholly-owned direct or indirect subsidiary of PNC Bank,
National Association or PNC Bank Corp., provided that (i) PFPC gives the Fund
thirty (30) days' prior written notice; (ii) the delegate (or assignee) agrees
with PFPC and the Fund to comply with all relevant provisions of the 1940 Act;
and (iii) PFPC and such delegate (or assignee) promptly provide such information
as the Fund may request, and respond to such questions as the Fund may ask,
relative to the delegation (or assignment), including (without limitation) the
capabilities of the delegate (or assignee).
21. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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22. FURTHER ACTIONS. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof.
23. MISCELLANEOUS.
(a) ENTIRE AGREEMENT. This Agreement embodies the entire agreement
and understanding between the parties and supersedes all prior agreements and
understandings relating to the subject matter hereof, provided that the parties
may embody in one or more separate documents their agreement, if any, with
respect to delegated duties and Oral Instructions.
(b) CAPTIONS. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
(c) GOVERNING LAW. This Agreement shall be deemed to be a contract
made in Delaware and governed by Delaware law, without regard to principles of
conflicts of law.
(d) PARTIAL INVALIDITY. If any provision of this Agreement shall be
held or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
(e) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
(f) FACSIMILE SIGNATURES. The facsimile signature of any party to
this Agreement shall constitute the valid and binding execution hereof by such
party.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
PFPC INC.
By: /s/ J. Xxxxxxx Xxxxxxx
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Title: CHAIRMAN
THE XXXXXX SQUARE STRATEGIC FIXED
INCOME FUND
By: /s/ Xxxxxx X. Xxxxxxxxx
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Title: PRESIDENT
EXHIBIT A
THIS EXHIBIT A, dated as of February 2, 1998, is Exhibit A to that certain
Administration and Accounting Services Agreement dated as of February 2, 1998
between PFPC Inc. and The Xxxxxx Square Strategic Fixed Income Fund.
PORTFOLIOS
The Xxxxxx Square Diversified Income Portfolio
The Xxxxxx Square Municipal Income Portfolio
AUTHORIZED PERSONS APPENDIX
NAME (TYPE) SIGNATURE
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