Ohio
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0-4604
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31-0746871
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(State or other jurisdiction
of incorporation) |
(Commission
File Number) |
(I.R.S. Employer
Identification No.) |
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6200 S. Gilmore Road
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Fairfield,
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Ohio
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45014‑5141
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common stock
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CINF
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Nasdaq Global Select Market
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☐
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
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•
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Unusually high levels of catastrophe losses due to risk concentrations, changes in weather patterns, environmental events, terrorism incidents or other causes
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•
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Increased frequency and/or severity of claims or development of claims that are unforeseen at the time of policy issuance
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Inadequate estimates, assumptions or reliance on third-party data used for critical accounting estimates
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Declines in overall stock market values negatively affecting the company’s equity portfolio and book value
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Prolonged low interest rate environment or other factors that limit the company’s ability to generate growth in investment income or interest rate fluctuations that result in declining values of fixed-maturity investments, including declines in accounts in which we hold bank-owned life insurance contract assets
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•
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Domestic and global events resulting in capital market or credit market uncertainty, followed by prolonged periods of economic instability or recession, that lead to:
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Significant or prolonged decline in the fair value of a particular security or group of securities and impairment of the asset(s)
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Significant decline in investment income due to reduced or eliminated dividend payouts from a particular security or group of securities
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Significant rise in losses from surety and director and officer policies written for financial institutions or other insured entities
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•
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Our inability to integrate Cincinnati Global and its subsidiaries into our on-going operations, or disruptions to our on-going operations due to such integration
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•
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Recession or other economic conditions resulting in lower demand for insurance products or increased payment delinquencies
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•
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Difficulties with technology or data security breaches, including cyberattacks, that could negatively affect our ability to conduct business; disrupt our relationships with agents, policyholders and others; cause reputational damage, mitigation expenses and data loss and expose us to liability under federal and state laws
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Disruption of the insurance market caused by technology innovations such as driverless cars that could decrease consumer demand for insurance products
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Delays, inadequate data developed internally or from third parties, or performance inadequacies from ongoing development and implementation of underwriting and pricing methods, including telematics and other usage-based insurance methods, or technology projects and enhancements expected to increase our pricing accuracy, underwriting profit and competitiveness
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•
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Increased competition that could result in a significant reduction in the company’s premium volume
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Changing consumer insurance-buying habits and consolidation of independent insurance agencies that could alter our competitive advantages
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Inability to obtain adequate ceded reinsurance on acceptable terms, amount of reinsurance coverage purchased, financial strength of reinsurers and the potential for nonpayment or delay in payment by reinsurers
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Inability to defer policy acquisition costs for any business segment if pricing and loss trends would lead management to conclude that segment could not achieve sustainable profitability
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Inability of our subsidiaries to pay dividends consistent with current or past levels
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Events or conditions that could weaken or harm the company’s relationships with its independent agencies and hamper opportunities to add new agencies, resulting in limitations on the company’s opportunities for growth, such as:
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Downgrades of the company’s financial strength ratings
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Concerns that doing business with the company is too difficult
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Perceptions that the company’s level of service, particularly claims service, is no longer a distinguishing characteristic in the marketplace
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Inability or unwillingness to nimbly develop and introduce coverage product updates and innovations that our competitors offer and consumers expect to find in the marketplace
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•
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Actions of insurance departments, state attorneys general or other regulatory agencies, including a change to a federal system of regulation from a state-based system, that:
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Impose new obligations on us that increase our expenses or change the assumptions underlying our critical accounting estimates
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Place the insurance industry under greater regulatory scrutiny or result in new statutes, rules and regulations
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Restrict our ability to exit or reduce writings of unprofitable coverages or lines of business
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Add assessments for guaranty funds, other insurance‑related assessments or mandatory reinsurance arrangements; or that impair our ability to recover such assessments through future surcharges or other rate changes
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Increase our provision for federal income taxes due to changes in tax law
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Increase our other expenses
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Limit our ability to set fair, adequate and reasonable rates
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Place us at a disadvantage in the marketplace
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Restrict our ability to execute our business model, including the way we compensate agents
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•
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Adverse outcomes from litigation or administrative proceedings
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Events or actions, including unauthorized intentional circumvention of controls, that reduce the company’s future ability to maintain effective internal control over financial reporting under the Sarbanes-Oxley Act of 2002
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Unforeseen departure of certain executive officers or other key employees due to retirement, health or other causes that could interrupt progress toward important strategic goals or diminish the effectiveness of certain longstanding relationships with insurance agents and others
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Events, such as an epidemic, natural catastrophe or terrorism, that could hamper our ability to assemble our workforce at our headquarters location
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Exhibit 10.1 -
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Exhibit 10.2 -
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Exhibit 104 –
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The cover page from this Current Report on Form 8-K, formatted as Inline XBRL
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CINCINNATI FINANCIAL CORPORATION
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Date: November 5, 2019
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/S/ Michael J. Sewell
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Michael J. Sewell, CPA
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Chief Financial Officer, Senior Vice President and Treasurer
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(Principal Accounting Officer)
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1.
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We refer to the Facility Agreement. Capitalized terms used but not defined herein shall have the meanings given to them in the Facility Agreement.
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2.
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With effect from the Effective Date:
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(a)
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The cover page of the Facility Agreement shall be amended such that the reference to "$238,445,927.35" thereon shall be deleted.
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(b)
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The second WHEREAS clause in the recitals of the Facility Agreement shall be amended such that the reference therein to "2019" shall be deleted and replaced with reference to "2020".
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(c)
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Section 1.01 of the Facility Agreement shall be further amended by deleting the following definitions in their entirety and replacing them with the following:
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(i)
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"Corporate Member shall mean Cincinnati Global Dedicated No 2 Limited (formerly known as Beaufort Dedicated No 2 Limited), a corporation incorporated under the laws of England & Wales, which is a Member."
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(ii)
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"Expiration Date shall mean February 28, 2024".
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(iii)
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"Managed Syndicate shall mean Cincinnati Global Syndicate 318; provided that the Managed Syndicate shall at all times be managed by the Managing Agent."
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(iv)
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"Managing Agent shall mean Cincinnati Global Underwriting Agency Ltd, (formerly known as Beaufort Underwriting Agency Ltd)."
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(d)
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Section 1.01 of the Facility Agreement shall be further amended by inserting the following definitions in proper alphabetical order:
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(i)
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"Amendment No.1 shall mean that certain amendment letter No. 1 (letter of credit facility agreement) dated as of November 4, 2019 between the Borrower and the Bank, which amends this Agreement."
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(ii)
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"Amendment No.1 Effective Date shall mean the Effective Date as defined in Amendment No. 1."
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(e)
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Section 2.1 of the Facility Agreement shall be amended by inserting "or in such other form as the Borrower and the Bank may otherwise agree" immediately after the reference to "Exhibit 4" therein.
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(f)
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Section 2.3.1 shall be amended such that each reference therein to "2019" shall be deleted and replaced with references to "2020".
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(g)
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Section 6.2.14 of the Facility Agreement shall be deleted in its entirely and replaced with the following:
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1
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356045660
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(i)
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"6.2.14 Own FAL. The Borrower shall not permit the Own FAL of the Corporate Member to be less than (i) on the Amendment No.1 Effective Date, 30% of Total FAL, and (ii) thereafter, the applicable requirements of Lloyd's from time to time."
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(h)
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Part I of Schedule 1.1(B) to the Facility Agreement shall be amended by replacing the reference to $238,445,927.35 therein with "$130,924,545.13".
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(i)
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Part I of Schedule 1.1(B) to the Facility Agreement shall be amended by replacing the reference to "Ashurst LLP Time Square Tower, 7 Times Square, New York, NY 10036" therein with "Ashurst LLP 55 Hudson Yards, 18th Floor, New York, NY 10001".
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3.
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This amendment letter shall take effect on the date (the "Effective Date") on which the Bank confirms to the Borrower that it has received in form and substance satisfactory to it:
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(a)
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a duly executed copy of this amendment letter signed by the Bank and an Authorized Officer of the Borrower;
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(b)
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resolutions of the board of directors of the Borrower approving this amendment letter and the Amended Facility Agreement and authorizing specified persons to execute this amendment letter on the Borrower's behalf;
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(c)
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officer's certificates signed by the Borrower and dated as of the Amendment No. 1 Effective Date substantially in the forms delivered to the Bank on the Closing Date pursuant to Section 5.1.1(i) and (ii) of the Facility Agreement;
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(d)
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certified copies of the business plan for the 2020 year of account prepared in relation to the Managed Syndicate and (if separate) the Realistic Disaster Scenario relating thereto;
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(e)
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satisfactory evidence that, as of October 30, 2019 the Own FAL of the Corporate Member is not less than 30% of Total FAL;
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(f)
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a letter from the Borrower to the Bank requesting that the Letter of Credit issued under the Facility Agreement be amended to give effect to the amendments contemplated under this amendment letter and that any notice of non-extension issued with respect to the Letter of Credit be revoked; and
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(g)
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such other documents as the Bank may reasonably request.
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4.
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The Borrower (a) repeats and restates its representations and warranties contained in Section 4 of the Facility Agreement as of the date of this amendment letter and as of the Effective Date, except to the extent such representations and warranties relate to an earlier date and (b) confirms that with effect from (and including) the Effective Date, its liabilities and obligations arising under the Amended Facility Agreement form part of (but do not limit) the obligations which are secured by the FAL LC Documents and that all of its obligations and the liens granted thereunder shall be valid and enforceable and shall not be impaired or limited by the execution or effectiveness of this amendment letter.
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5.
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Promptly after the Effective Date, the Borrower shall deliver to the Bank a Letter of Comfort signed on behalf of Lloyd's.
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6.
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Promptly after the Effective date, the Borrower shall deliver to the Bank a certified copy of the reinsurance resume of the Managed Syndicate for the 2020 year of account and each year of account then open.
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7.
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Except as varied by the terms of this amendment letter, the Facility Agreement and the other FAL LC Documents will remain in full force and effect and each party hereto confirms all of its obligations under the Amended Facility Agreement and under the other FAL LC Documents.
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8.
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This amendment letter constitutes a FAL LC Document for the purposes of Amended Facility Agreement.
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2
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356045660
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9.
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This amendment letter may be executed in any number of counterparts and all of those counterparts taken together will be deemed to constitute one and the same instrument. Delivery of an executed signature page of this amendment letter by facsimile or other electronic transmission shall be effective as delivery of a manually executed counterpart hereof.
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10.
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This amendment letter and any non-contractual obligations arising out of or in connection with it are governed by, and construed in accordance with, the laws of the State of New York.
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3
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356045660
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[Signature Page to Amendment Letter]
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[Signature Page to Amendment Letter]
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