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Compulsory Third-party Liability Insurance for Motor Vehicles

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					INSURANCE POLICY
Compulsory Third-party Liability Insurance for Motor Vehicles



• Compulsory Third-party Liability Insurance for Motor Vehicles
• Accident Insurance for Driver and Owner as Passengers
• Windshield Insurance


The Insurance Contract
This insurance is subject to the terms and conditions stipulated in the following documents:
•    the Insurance Policy
•    the Insurance Terms, i.e.:

          - any Special Terms that might be stated in the Insurance Policy
          - these Present Terms
•    the Act on Insurance Contracts No. 30 of 2004.

The Insurance Policy contains further details of the Insurance Contract, which are not referred to in these Present Terms.
The provisions of the Insurance Policy shall supersede any permissive legal clauses. The Insurance Policy Special
Terms shall expand, restrict or modify the scope of this Insurance Contract beyond what is directly stated in these
Present Terms. Above and beyond what may be stated in the Insurance Policy Special Terms, the provisions of these
Present Terms shall apply to the Insurance Contract.
If there is any inconsistency between different provisions concerning the same subject matter, the provisions of the
Insurance Policy shall supersede the Insurance Terms, and the Special Terms shall supersede any general provisions,
provided, however, that specific rules shall at all times supersede general rules.




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INSURANCE POLICY
Compulsory Third-party Liability Insurance for Motor Vehicles



Index


The Insurance Contract 1
Compulsory Third-party Liability Insurance for Motor Vehicles 4
1.       Who is Insured ....................................................................................................................................................... 4
2.       Scope of Coverage................................................................................................................................................. 4
3.       Damage to One’s Own Vehicle .............................................................................................................................. 4
4.        Obligatory Payments by the Company .................................................................................................................. 4
5.       Driving in Other Countries: The Geographical Scope of Coverage ........................................................................ 4
6.       Effective Date, Coverage Period, and Termination ................................................................................................ 4
7.       Premium, Due Date, and the Consequences of Default ......................................................................................... 4
8.       Sale of the Vehicle ................................................................................................................................................. 5
9.       Refund of the Premium When the Policy Lapses or if the Vehicle is Not Used ...................................................... 5
10.      The Policyholder’s Obligations in the Event of Damage, and Measures Taken as a Result of Damage ................ 6
11.      Claims Settlement and Associated Costs............................................................................................................... 6
12.      The Right to Compensate the Injured Party and Settle the Claim .......................................................................... 6
13.      Policyholder’s Liability ............................................................................................................................................ 6
14.      The Company’s Recovery Claim ............................................................................................................................ 6
15       Change of Risk Factor............................................................................................................................................ 7
16.      Warranty................................................................................................................................................................. 7
17.      The Company’s Authorization to Terminate the Insurance Contract ...................................................................... 7
18.      Disputes ................................................................................................................................................................. 7
19.      Venue ..................................................................................................................................................................... 8
20.      Safeguarding of Personal Information .................................................................................................................... 8
21       Breach of Duty to Inform – Fraud and Wrongful Information .................................................................................. 8

Personal Accident Policy for the Driver and the Owner as a Passenger                                                                                              9
1.       Who is Insured ....................................................................................................................................................... 9
2.       Scope of Coverage................................................................................................................................................. 9
3.       Maximum Compensation........................................................................................................................................ 9
4.       Determination of Compensation — Dispute ........................................................................................................... 9
5.       Deductions ............................................................................................................................................................. 9
6.       Breach of precautionary rules ................................................................................................................................ 9
7.       Forfeiture of right to compensation ......................................................................................................................... 9
8.       Policyholder Obligations to the Company............................................................................................................... 9
9.       Driving in Other Countries: Geographical Scope of Coverage ............................................................................ 10
10.      Exempted Risks ................................................................................................................................................... 10
11.      Determination of premium – Premium surcharge ................................................................................................. 10
12.      Discount ............................................................................................................................................................... 10
13.      Other Terms ......................................................................................................................................................... 10


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Compulsory Third-party Liability Insurance for Motor Vehicles



Windshield (Windscreen) Policy                                                11
1.       Scope of Coverage............................................................................................................................................... 11
2.       Claim Payment ..................................................................................................................................................... 11
3.       Exempted Risks ................................................................................................................................................... 11
4.       Policyholder’s Liability .......................................................................................................................................... 11
5.       Refund of the Premium ........................................................................................................................................ 11
6.       Discount ............................................................................................................................................................... 11
7.       Other Terms ......................................................................................................................................................... 11




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INSURANCE POLICY
Compulsory Third-party Liability Insurance for Motor Vehicles




Insurance Terms
          This policy is covered by the Insurance Contracts Act No. 30 of 2004 unless otherwise specified in these terms
          or other provisions of the insurance contract.

Compulsory Third-party Liability Insurance for Motor Vehicles
1.          Who is Insured
            The policyholder and any person who uses or drives the vehicle with the consent of the policyholder is
            covered by the policy. If the vehicle is sold, the new owner is insured for 14 days after the change of
            ownership, providing s/he has not purchased another policy for the vehicle.

2.          Scope of Coverage
            The insurance policy covers every indemnity claim for damage caused by the use of a vehicle against which
            the policyholder is required to insure him/herself according to current Icelandic traffic law.

3.          Damage to One’s Own Vehicle
            The policy does not cover damage to the vehicle of the policyholder or other property belonging to the
            policyholder. However, the policy does cover damage to the policyholder’s own vehicle that was caused by
            another vehicle owned by the same policyholder.

4.          Obligatory Payments by the Company
            Obligatory payments by the Company for each insurance claim are limited to the amount of insurance stated
            in the insurance policy or statutory amount of insurance, whichever is higher.

5.          Driving in Other Countries: The Geographical Scope of Coverage
            The insurance policy covers the use of the vehicle in Iceland and in other member states of the European
            Economic Area (EEA). It is also valid in Switzerland. The policyholder must obtain an international insurance
            card for the vehicle (a “green card”) to drive in a foreign country, provided that the country is party to an
            agreement regarding the use of such an insurance card.

6.          Effective Date, Coverage Period, and Termination
            The policy goes into effect on the date specified in the policy, in accordance with the insurance application. If
            the policy has not been issued, the policy goes into effect when the Company or its agent receives the
            insurance application, unless otherwise agreed.
            Unless otherwise stipulated, the policy remains in force until 00.00 hours on the premium’s next annual
            renewal date.
            The policy can be renewed yearly if it has not been terminated in writing by the policyholder at least one
            month before the annual renewal date.
            However, such termination only takes effect if an insurance contract has been signed with another insurance
            company by this due date.
            If the Company makes changes to the insurance terms and/or premium base other than those stated in Article
            7.1 of these terms, the Company shall be obliged to inform the policyholder specifically of such changes.
            Otherwise, the notice of termination shall not apply.
            The termination of the insurance contract must otherwise comply with the provisions of Articles 7, 9 and 17.

7.          Premium, Due Date, and the Consequences of Default
            7.1    Determination and Renewal of Premium

                   The premium for this policy will be calculated in accordance with the Company’s tariff. The Company
                   reserves the right to determine a renewal premium in accordance with a new tariff regarding a general




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                   change in risk, price changes and other causes that disrupt the compensation base. Such changes do
                   not authorize the policyholder or the Company to terminate the insurance contract.
                   It is the insurers duty to inform the company if the address of the insurer changes.
            7.2    Premium surcharge
                   Sjóvá Insurance Company reserves the right to determine a renewal premium in accordance with a
                   new tariff with regard to general modifications of the risks involved, price changes and other due to a
                   traffic accident suffered by the driver when conducting the vehicle, cf. Article 92 of the Traffic Law No.
                   50/1987.
                   Should Sjóvá Insurance Company pay compensation for the vehicle covered by the insurance
                   contract, a special in accordance with a new tariff with regard to general modifications of the risks
                   involved, price changes and other causes which disrupt the compensation base. Such changes shall
                   not constitute an authorization for either the policyholder or Sjóvá Insurance Company to terminate the
                   insurance contract.
                   Should Sjóvá Insurance Company have a very bad damage experience of the insured vehicle, the
                   company may determine the premium on an individual basis according to the premium rates.
            7.3    Information about Claim History

                   When it determines a premium, the Company is entitled to receive information from other insurance
                   companies about the policyholder’s past claims experience.
            7.4    Date of Payment

                   The first premium is due at the start of the Company’s period of responsibility. (See Article 6.)
                   Subsequent premiums shall be due on the first day of each renewal period. The invoice for the
                   premium’s payment shall be sent to the policyholder at the address s/he has given to the Company.
                   The posting of a notice or a giro payment order shall constitute a demand for payment.

            7.5    Default
                   Should a policyholder default on the premium payment, the Company can terminate the insurance
                   policy according to the Statutory Vehicle Insurance provisions of Regulation No. 392 of 2003 and
                   report the default to the Icelandic Road Traffic Directorate. The Chief of Police is then obliged by this
                   regulation to ensure that the vehicle’s license plates are immediately removed from the vehicle.
                   The Company is obliged to notify in writing the party concerned if it intends to exercise this right and to
                   inform him/her of the legal consequences of such a notice. (See also Article l7 of these terms.)
                   Premiums are subject to distress warrant, according to traffic law provisions.

8.          Sale of the Vehicle
            The policyholder must inform the Company without delay if the vehicle has been removed from the register of
            motor vehicles or sold. The policy only covers a new owner for 14 days after the change of ownership. (See
            Article 1.)

9.          Refund of the Premium When the Policy Lapses or if the Vehicle is Not Used
            If the vehicle has been sold or removed from the register of motor vehicles, the Company will refund the
            premium for the remaining part of the coverage period, provided that a new policy has been purchased for the
            vehicle at the time of the change of ownership.
            If the policyholder files a claim for a refund of premium following a change of ownership, as per Article 14,
            paragraph 1 d), as well as Article 8, the Company will refund to the seller the portion of the premium that
            would have covered the policyholder from the date of the change of ownership through the end of the policy
            term.




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            If the vehicle has not been in use and its license plates have been in the custody of either the Icelandic Road
            Traffic Directorate or police authorities for at least 30 consecutive days, the Company will refund the premium
            for the period of disuse. This, however, does not apply to insurance of tractors, multi-passenger snow
            vehicles, snowmobiles, light motorcycles, off-road vehicles/all-terrain vehicles [ATVs], vintage vehicles and
            mobile homes, provided that these terms are taken into account when the premium is determined.

10.         The Policyholder’s Obligations in the Event of Damage, and Measures Taken
            as a Result of Damage
            As soon as the policyholder becomes aware — or suspects — that a claim for compensation will be made,
            and if s/he can assume that it will be covered by the policy, s/he must inform the Company in writing.

            The policyholder may not admit liability or enter into any agreement regarding a liability claim without the
            Company’s consent, with the exception of the provisions of Article 94 of Insurance Contracts Act No. 30 of
            2004. When an accident takes place or there is direct risk that damage may occur, the policyholder must do
            his/her utmost to prevent or reduce the damage. Any negligence by the insured regarding these obligations
            may result in the reduction or forfeiture of the insurance coverage, in accordance with the Insurance Contracts
            Act.

11.         Claims Settlement and Associated Costs
            When a compensation claim is filed against the policy, the Company has the right to handle both the
            settlement and the claim’s defence before a court of law, if necessary.
            The Company will pay the resulting costs, but not an amount exceeding the proportion of the insurance sum of
            the principal of the compensation.

12.         The Right to Compensate the Injured Party and Settle the Claim
            The Company has the right to pay compensation directly to a third party (the injured party). If a claim for
            compensation is made, the Company may, at any stage, meet its obligations and free itself of further
            payments by paying the insurance sum as well as accrued interest and costs consistent with the insurance
            sum.

13.         Policyholder’s Liability
            The policyholder must bear personal liability for all incidents of damage if specified in the insurance policy or
            premium receipt. The Company’s claim for the payment of the policyholder’s own liability becomes due
            immediately when the Company delivers a preliminary or full payment for the loss.

14.         The Company’s Recovery Claim
            14.1    Recovery Claim due to Prior Consumption of Alcohol, Use of Other Drugs, Driving without a License,
                    Intent, Gross Negligence, Change of Ownership or Default

                    The Company can claim recovery from the policyholder and/or the driver if the Company has, because
                    of traffic laws or regulations, paid compensation for damage for which the policyholder did not have
                    insurance when:
                a. The policyholder, due to consumption of alcohol or the use of other drugs, is deemed unable to drive
                   the vehicle safely, or is otherwise unfit to do so according to Traffic Act No. 50 of 1987;
                b. If the policyholder does not have the right to drive the vehicle in question or has lost his/her license to
                   do so;
                c. If the damage was caused by intent or by gross negligence;
                d. If 14 days have elapsed from the date of change of ownership, (See Article 8.), the policy has either
                   lapsed due to non payment of the premium or the policy has been terminated.
            14.2    Vehicle Rental
                    When a vehicle is rented without a driver in accordance with Car Rental Act, No. 64 of 2000, the
                    insurance policy is valid, and the Company cannot exercise the right to recovery against the



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                   policyholder (the renter) even if the renter violates the terms of the insurance policy. The terms remain
                   unchanged in respect to the conduct of the policyholder or a person for whom s/he is responsible.
                   The Company has a right to recovery from the policyholder for damage caused by his/her renting the
                   vehicle without a driver in a way that is not in compliance with Car Rental Act No 64 of 2000. However,
                   if the policyholder can prove that damage was not caused by his/her violation of this Act, the Company
                   does not have the right to claim recovery.

            14.3   Use of the Vehicle Other Than Specified.
                   The Company has the right to recovery from the policyholder and/or driver when the vehicle is used in
                   a way not specified in the policy.

            14.4   Governing Laws
                   The provisions of these insurance terms do not in any way reduce the Company’s entitlement to
                   recovery or limit its pursuit of recovery rights under general rules of law, Traffic Act No. 50 of 1987, or
                   Insurance Contracts Act No. 30 of 2004.

15          Change of Risk Factor
            15.1   Change of Address, Modifications to the Vehicle and Increased Risk

                   The policyholder must inform the Company immediately of a change of domicile. The policyholder
                   must give notice of any modifications to the vehicle or its use that may result in increased risk of
                   damage. Examples would be the use of special equipment or participation in a motor race.
                   If the policyholder neglects to give such notice, the Company is free of all responsibility, under the
                   provisions of the Insurance Contracts Act No. 30 of 2004.

            15.2   Racing
                   The Company serves notice that it is authorized to demand an additional premium if a policyholder is
                   involved in a motor race or practice runs for such a race.

16.         Warranty
            The policyholder is obliged to ensure that the vehicle is in a condition prescribed by law—in particular, that its
            safety equipment is in working order. Negligence in this matter may result in the reduction or forfeiture of
            insurance coverage, per the Insurance Contracts Act.

17.         The Company’s Authorization to Terminate the Insurance Contract
            The Company is authorized to terminate the policy if the policyholder has repeatedly and grossly neglected
            his/her obligations to the Company. If the Company terminates the insurance contract because of this
            provision, it is obliged to give the policyholder notice thereof in a verifiable manner and make him/her aware of
            the implications of such termination.
            The Company must also inform the Icelandic Road Traffic Directorate of its decision. (See the Statutory
            Vehicle Insurance rules in Chapter III of Regulation No. 392 of 2003.) The Chief of Police is then obliged, in
            accordance with the aforementioned regulation, to ensure that the license plates are immediately removed.
            Furthermore, the Company is liable to a third-party for damage that may occur during the four-week period
            after the policy’s termination, unless another sufficient policy is purchased.
            Should the insurance be terminated in this manner, the Company will refund the premium for the remainder of
            the coverage period.

18.         Disputes
            Should a dispute arise regarding the insurance, the dispute shall be brought before an Icelandic court and
            governed by Icelandic law, unless otherwise stipulated in an international agreement to which the Republic of
            Iceland adheres.




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            An appeal regarding a liability dispute may be brought to the insurance companies' Loss Commission. The
            Commission’s decision may then be appealed to the Decision Commission on Losses. Further information on
            these commissions and rules governing their activity may be obtained from the Company.

19.         Venue
            Disputes arising from this policy shall be referred to the Reykjavik District Court.

20.         Safeguarding of Personal Information
            According to Law no. 77/2000 on Protection of Privacy the registered party has the right to know in what way
            his personal information has been handled as well as the right to have the Company make correction of
            wrong, misleading or incomplete information.
            The Company will only utilize acquired personal information in appraising the application for insurance,
            appraising the need of insurance protection and to advise on selection of coverage, claims processing,
            submission of information to the policyholder on insurance matters or any other normal scope of activities
            within the Company.
            The Company emphasizes the importance of safety and trust in using personal information. Information on
            Company’s clients is not available to third party except by special permission, law or judicial decree.

21          Breach of Duty to Inform – Fraud and Wrongful Information
            Information regarding the risk

            If the policyholder or the Insured have fraudulently neglected their duty to inform the Company on matters of
            importance in evaluating the risk and a loss has occurred the liability of the Company is forfeited. refer Para 1
            in Art 83 of Law no. 30/2004.

            If the policyholder or the Insured have in another manner neglected their duty to inform the Company to such
            a degree as not being deemed to be of inconsequence, the liability of the Company is forfeited in part or fully,
            refer Para 2 in Art 83 of Law no. 30/2004.
            Information regarding settlement of loss

            If the Insured intentionally submits wrongful or incomplete information regarding a loss all his rights are
            forfeited under this or other insurance covers as regards the loss in question, refer Para 2 in Art 120 of Law
            no. 30/2004. In such circumstances the Company is at liberty to cancel all insurance covers with the Insured
            by one weeks’ notice.


                                                st                                                  st
      These terms became valid as of July 1 2007 and replace terms valid as of February 1 2006.




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INSURANCE POLICY
Compulsory Third-party Liability Insurance for Motor Vehicles




Personal Accident Policy for the Driver and the Owner as a Passenger
1.          Who is Insured
            The policyholder as well as anyone who drives the vehicle with his/her consent is insured.

            Should the vehicle be sold, the new owner is insured for a period of 14 days after the change of ownership,
            provided that s/he has not purchased a new insurance policy for the vehicle.

2.          Scope of Coverage
            2.1     Injury Suffered by the Driver
                   The Company compensates the driver for injury suffered in a traffic accident. (See Article 92 of Traffic
                   Act No. 50 of 1987.)
            2.2    Injury Suffered by the Policyholder
                   The Company also indemnifies the policyholder for injury suffered in a traffic accident in his/her own
                   vehicle or by his/her own vehicle. (See Article 92 of Traffic Act No. 50 of 1987.)

3.          Maximum Compensation
            According to Traffic Act No. 50 of 1987, the Minister of Justice determines the maximum compensation to be
            paid for each incident. This maximum insurance sum is reviewed annually.

4.          Determination of Compensation — Dispute
            Decisions regarding compensation are made in accordance with Icelandic Tort Law.

            Should a dispute arise regarding the insurance, an Icelandic court will make its ruling in accordance with
            Icelandic law.

5.          Deductions
            Compensation paid by this Accident Policy is deducted from the compensation to which the injured party may
            be entitled under Traffic Act No. 50 of 1987 or other compensation regulations.

6.          Breach of precautionary rules
            Abiding by the precautionary rules of these conditions is obligatory. If the precautionary rules are not followed,
            the company’s liability may become void in full or in part, cf. Article 26 of Act no. 30/2004 on Insurance
            Contracts.

7.          Forfeiture of right to compensation
            The right to insurance damages may terminate according to the Act on Insurance Contracts if the policyholder
            or the insured neglects his obligations vis-à-vis the company, for example, if he causes damages by driving
            without a driver's license or causes damages intentionally or by gross negligence, such as if he drives under
            the influence of alcohol or narcotic substances.

8.          Policyholder Obligations to the Company
            8.1    Loss of Right to Compensation
                   According to the Insurance Contracts Act, the right to compensation for damage may be denied if the
                   policyholder or the insured neglects his/her obligations to the Company, for instance if s/he drives
                   without a valid driver’s license, causes damage because of gross negligence, or is under the influence
                   of alcohol or other drugs.
            8.2    Sale of Vehicle and Deregistration
                   The policyholder must notify the Company immediately if the vehicle is deregistered or sold. The
                   insurance covers a new owner for a maximum of 14 days after the transfer of ownership, unless a new
                   policy for the vehicle has been purchased.


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9.          Driving in Other Countries: Geographical Scope of Coverage
            The policy covers the use of the vehicle in Iceland, other member states of the European Economic Area and
            Switzerland.
            Icelandic law applies to decisions regarding compensation for traffic accidents that occur outside Iceland. (See
            Article 4 of these terms.)

10.         Exempted Risks
            The Company is not obliged to compensate for loss that may be connected to a war, riots, any other civil
            commotion, strikes or other comparable events. The same applies to damage as a result of nuclear power,
            radiation or radioactive materials, as well as loss for damage caused by volcanic eruptions, earthquakes,
            landslides, avalanches or other natural disasters.

11.         Determination of premium – Premium surcharge
            The premium for this insurance (policy) is calculated in accordance with the premium rates of Sjóvá Insurance
            Company.

            Sjóvá Insurance Company reserves the right to determine a renewal premium in accordance with a new tariff
            with regard to general modifications of the risks involved, price changes and other due to a traffic accident
            suffered by the driver when conducting the vehicle, cf. Article 92 of the Traffic Law No. 50/1987.

            Should Sjóvá Insurance Company pay compensation for the vehicle covered by the insurance contract, a
            special in accordance with a new tariff with regard to general modifications of the risks involved, price changes
            and other causes which disrupt the compensation base. Such changes shall not constitute an authorization for
            either the policyholder or Sjóvá Insurance Company to terminate the insurance contract.
            Should Sjóvá Insurance Company have a very bad damage experience of the insured vehicle, the company
            may determine the premium on an individual basis according to the premium rates.

12.         Discount
            The provision for a discount on the Third-party Compulsory Motor Vehicle Policy does not apply to this policy.

13.         Other Terms
            Reference is otherwise made to the Company’s terms for the Third-party Compulsory Motor Vehicle Policy, as
            applicable.


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     These terms became valid as of July 1 2007 and replace terms valid as of February 1 2006.




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INSURANCE POLICY
Compulsory Third-party Liability Insurance for Motor Vehicles




Windshield (Windscreen) Policy
1.          Scope of Coverage
            The policy covers breakage of the vehicle’s windshield (windscreen), including installation cost, unless the
            policyholder has caused the damage intentionally or through gross negligence. Chips or scratches on the
            windshield do not constitute breakage.

2.          Claim Payment
            The policy covers the breakage of the front windshield. Compensation is based on the cost of a windshield of
            comparable quality to the damaged one. Choice of workshop is subject to a prior consent of the Company.
            The Company does not have an obligation to pay damages for a repair that has been done without a prior
            consent of the Company.

3.          Exempted Risks
            A windshield that breaks upon removal or installation is not covered. Inability to use the vehicle because of
            windshield damage is not covered.

4.          Policyholder’s Liability
            The policyholder bears as a deductible which is given in the insurance policy and/or receipt for premium paid.
            If it is possible to repair a windshield without replacing it, the policyholder pays nothing.

5.          Refund of the Premium
            The premium of this policy is not refunded even if the vehicle’s license plates are temporarily placed in the
            custody of the Icelandic Road Traffic Directorate or the police.

6.          Discount
            The provision for a discount on the Third-party Compulsory Motor Vehicle Policy does not apply to this policy.

7.          Other Terms
            Reference is otherwise made to the Company’s terms for the Third-party Compulsory Motor Vehicle Policy, as
            applicable.


                                               st                                                   st
     These terms became valid as of July 1 2007 and replace terms valid as of February 1 2006.



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