**EXHIBIT 10.2**

 

ConfidentialTreatment has been requested for portions of this Exhibit. The confidentialportions have been redacted and are denoted by ***. The Confidential portionshave been separately filed with the Securities and Exchange Commission.

 

ABC TV Network

 

John L RouseSenior Vice PresidentAffiliate Relations

 

September 26,2005

 

Ms DebMcDermottPresidentYoung Broadcasting, Inc.441 Murfreesboro RoadNashville, TN 37210

 

Dear Deb,

 

All terms willbecome binding upon execution and the parties will negotiate in good faithtowards the execution of a long form agreement that incorporates them.

 

**Stations**

** **
| WKRN |   | Nashville |
|------|--------|-----------|
| WTEN |   | Albany    |
| WRIC |   | Richmond  |
| WATE |   | Knoxville |
| WBAY |   | Green Bay |

** **

**Term**

** **

10/1/04 –12/31/09

 

**Compensation**

** **

In accordancewith the clearance obligations outlined below, Young will receive the followingtotal annual compensation for these Stations.

 
| **Year**         | ** ** | **Gross Compensation** | ** ** |
|------------------|------------|------------------------|------------|
| 10/1/04-12/31/04 |       | $                      | ***        |   |
| 2005             |       | $                      | ***        |   |
| 2006             |       | $                      | ***        |   |
| 2007             |       | $                      | ***        |   |
| 2008             |       | $                      | ***        |   |
| 2009             |       | $                      | ***        |   |

 

We are inagreement that each station shall receive $*** annually in co-op funds through12/31/09 to be spent in accordance with ABC’s standard guidelines.

 

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*** Subject to request forconfidential treatment; separately filed with the Commission.

 

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**Clearance**

** **

Subject onlyto the exceptions and limitations outlined below and set forth in the FCC Rules (“rightto reject”), there will be full, in-pattern clearance of all ABC programs inall time periods currently cleared by the Stations.  Stations agree to negotiate in good faithwith ABC over the clearance of any programs in new time periods WKRN may delay “Nightline”(or replacement programming) to 11:35PM CT (no more than one hour delay) untilupgrading to clearance of 11:05PM CT (no more than % hour delay) starting September 1,2007 and then again upgrading to live time period of 10:35PM CT starting September 1,2008 Station will receive the standard “Nightline” incentive inventory when theprogram is cleared at its live time period.

 

WBAY may delay“Nightline” (or replacement programming) to 11:05PM CT (no more than 1⁄2 hourdelay) until upgrading t o five time period of 10:35PM C T starting September 1, 2009 Station will receive the standard “Nightline” incentive inventory whenthe program in cleared at its live time period WBAY agrees to clear “Nightline”in pattern if “Sex in the City” is moved from that time period prior to 9/1/09,or if the Station obtains the contractual right to move it to a different timeperiod prior to that deadline and WBAY agrees to make good faith efforts toobtain that right.

 

WKRN may delay“Jimmy Kimmel Live” (or replacement programming) to 12:05AM CT (no more thanone hour delay) until upgrading to clearance of 11:35PM CT (no more than 1⁄2 hourdelay) starting September 1, 2007 and then again upgrading to live timeperiod of 11:05PM CT starting September 1, 2009 The Station will receivethe standard Kimmel incentive inventory when program is cleared at its livetime period.

 

WBAY may delay“Jimmy Kimmel Live” (or replacement programming) to 12:05AM CT (no more thanone hour delay) until upgrading to clearance of 11:35PM CT (no more than 1⁄2 hourdelay) starting September 1, 2006 and then again upgrading to live timeperiod of 11:05PM CT starting September 1, 2009 Station will receive thestandard Kimmel incentive inventory when program is cleared at its live timeperiod.  Moreover, starting September 1,2006.  WBAY will move Jimmy Kimmel Liveinto the 11:05PM time period in the event that “Nightline” is removed from thenetwork schedule or is cancelled by the Station as outlined in theparagraph below.

 

Stations agreeto clear “Nightline” or any replacement program so long as the programcontinues to have a news / current affairs format.  If the replacement program does not have anews / current affair format then stations agree to a 26 week test Stations maythen choose to cancel the program if, at the end of the test period, theprogram fails to deliver at least 85% of its adult 25-54 audience share amongABC, NBC and CBS in the time period (“3 network share”) in Station’s market asNightline achieved during the prior year. This calculation will be determined by comparing an average 3 networkshare from major rating periods during the test period (i e November, February,May and July) versus the same ratings period the prior year.

 

Stations agreeto clear on a 13 week test basis any replacement program of “Jimmy Kimmel Live”so long as the format remains substantially similar to the current programairing in the 2004/2005 season.  The programmay then be cancelled by the Stations and the time period returned to theStations.

 

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Stations willcontinue to have first call rights with respect to all ABC Television Networkanalog and digital programs against all TV broadcast stations in theirrespective communities of license.  Thesubstantial majority of the Network’s programming offered to Stations will be “firstrun,” (i.e. not previously broadcast on another domestic television network ordomestic cable or satellite channel) However, this restriction will not applyto theatrical movies, re-runs of network programs previously offered toStations, or Kids programming and will not apply during a force majeure event(e g, a labor dispute).  Stations, afternotice to ABC and an opportunity to cure, will not be required to clear Networkprograms for which the Network does not provide the first call or first runprotection as provided above.  Stationwill clear the program(s) once those protections are provided or restored Theprogram exclusivity provisions of N/AP III Sections III, IV and V shall be ineffect through 12/31/09.

 

Subject toparagraph B in the Digital Program Delivery section below, clearance of anetwork program includes unaltered carriage and pass through of all contentdesigned to attract and maintain viewership (including viewership ofadvertisements), contained in the network feed that ABC reasonably associateswith a network program or commercial that is intended to be transmitted withinNetwork time periods and is designed to attract or maintain televisionviewership This includes all enhanced content and enhanced advertisements(including associated URLs and triggering devices) as well as (i) closedcaptioning information, (ii) program id codes, (iii) broadcast flagsand watermarks, (iv) rating information and data, and (v) SAP feeds (“ProgramRelated Material”).

 

ABCacknowledges that specific preemptions per Schedule B will continue butcompensation will not be earned for the preempted programs.  If a Station’s commitments to these programslisted in Schedule B are reduced, then the number of those preemptionswill be reduced accordingly Stations shall each have an additional twenty (20)one-time-only (OTO) half-hour preemptions per calendar year (“the basket”) Forany non-right to reject preemptions that exceed Schedule B or thebasket.  Station will reimburse ABC forpreempted program(s) according to its Hourly Network Reimbursement Ratemultiplied by the appropriate Reimbursement Matrix percentage (see Schedule A).  All preemptions including failures to clearprograms which are a part of your clearance commitment, as well asone-time-only preemptions of previously accepted programs will be countedagainst the basket However, the specific preemptions in Schedule B andpreemptions pursuant to the FCC’s right to reject rule will not be countedagainst the basket and will not be subject to the reimbursement rates below,although compensation will not be earned for those or any other preemptions.

 

Hourly Network Reimbursement Rate:

 

| Nashville |   | $ | 8,761 |   |
|-----------|--------|---|-------|--------|
| Albany    |   | $ | 5,255 |   |
| Richmond  |   | $ | 4,992 |   |
| Knoxville |   | $ | 4,985 |   |
| Green Bay |   | $ | 4,139 |   |

 

Any loss ofcompensation associated with the non right to reject preemptions that exceed Schedule Bor the basket will be deducted from the amount to be reimbursed.  Payment of the reimbursement amount will bethe exclusive remedy for exceeding Schedule B or the basket; however,multiple preemptions of a particular program that constitute a failure to clearthat

 

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program willstill be subject to remedies as outlined in the current affiliationagreement.  Moreover, exceeding thebasket by more than 20% with non right to reject preemptions and Schedule Bpreemptions in any one calendar year will be a material breach of theaffiliation agreement.

 

The ratesabove shall be applied to preemptions in calendar 2005 Beginning in 2006, theserates shall be adjusted on an annual basis, by multiplying the prior year’srate by the percentage change in total network sales revenue, as published bythe Broadcast Cable Financial Management Association (BCFM) (or some othermutually agreed, similar industry standard in the event that BCFM ceases suchpublication).

 

Makegoods forpreempted programming (i.e., clearance at another time) will beconsidered.  If the makegood is approvedby ABC, the preemption reimbursement payment to ABC will be reduced by thevalue of the makegood as determined by ABC.

 

**Inventory**

** **

The Stations willhave a Guaranteed Primetime Inventory Level Subject to adjustment as describedbelow, Guaranteed Primetime Inventory Level shall be defined as an average of50 minutes and 15 seconds per week and when Monday Night Football is telecast,the average commercial time shall be 51 minutes per week The GuaranteedPrimetime Inventory will be offered for the Term at substantially the sametimes and durations as in the 2004-2005 season Local inventory in otherdayparts will be offered at substantially the same times and duration, and insubstantially the same amount, as was offered to affiliates generally duringthe 2003/2004 season Stations will also continue to receive all additionallocal incentive inventory currently received by Stations by reason of continuedin-pattern clearance of Nightline The View and Jimmy Kimmel Live for so long asthose clearances continue These inventory levels are based on: (a) fullclearance of the Network schedule, (b) the amount of Network Primetime andother daypart programming scheduled as of the date of this Agreement; and (c) thelive clearance of Nightline.  The numberof units comprising the local Inventory Level shall be subject to adjustmentfor (a) the number of local units in Network programming that is notcleared by the Stations; (b) the number of local units that are lost as aresult of sustaining programming, or special event programming, run by theNetwork in lieu of Network programming that would otherwise bear a moretraditional commercial load (although any reduction in local inventory must bein proportion to the reduction in Network inventory for any special eventprograms that exceed past practices or the number of such programs offered inprior years; unless Stations are otherwise made whole); (c) the number oflocal units lost as result of a reduction in the amount of Network programmingthat formed the basis for the inventory calculation above; and (d) failureto clear or the cancellation of Nightline (decrease of four thirty-secondprimetime incentive units per week).  Inthe event that ABC does not offer the Stations their Guaranteed inventoryLevel, ABC shall, make the Stations whole for the then economic value to thestations of any shortfall by, at its option (a) providing other localcommercial availabilities of such value, or (b) adjusting the station’scompensation by that amount, or (c) a combination of (a) and (b) thatwould make the stations whole.  Stationswill receive eight children’s spots upon expiration of NAP III or an economicequivalent as approved by stations.

 

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**Promotion**

** **

Stations willjoin the Baseline Promotion Plan (below) Stations will provide 11 spots per day(positions and lengths illustrated below) for promotion of ABC Networkprogramming.  ABC shall designate the useof such spots.  An illustrative initialdesignation of Network priorities is included below:

 
| ABC Baseline  Promotion Schedule (for Central/Mountain markets): |
|-----------------------------------------------------------------------|
|                                                                  |   |   |
| Monday-Friday                                                         |
|                                                                  |   |   |
| 5-7am:                                                                |   | 2x (:15)  supporting GMA |
|                                                                  |   | 1x (:15)  supporting Prime |
|                                                                  |   |   |
| 9am-4pm:                                                              |   | 1x (:15)  supporting The View |
|                                                                  |   | 2x (:15)  supporting Prime |
|                                                                  |   |   |
| 4-6pm:                                                                |   | 1x (:15)  supporting WNT |
|                                                                  |   | 1x (:15)  supporting Prime |
|                                                                  |   |   |
| 6-7pm:                                                                |   | 1x (:30)  supporting Prime |
|                                                                  |   |   |
| 10pm:                                                                 |   | 1x (:15)  supporting Latenight |
|                                                                  |   |   |
| 10pm-12am:                                                            |   | 1x (:15)  supporting Prime |
|                                                                  |   |   |
| Saturday/Sunday                                                       |   |   |
|                                                                  |   |   |
| 9am-6pm:  (9am-5pm-Sun)                                               |   | 3x (:15)  supporting Prime  1x (:15) supporting WNT |
|                                                                  |   |   |
| 6-7 pm:  (5-6 pm-Sun)                                                 |   | 1x (:30)  supporting Prime |
|                                                                  |   |   |
| ABC Baseline  Promotion Schedule (for Eastern/Pacific markets).  |
|                                                                  |   |   |
| Monday-Friday                                                         |
|                                                                  |   |   |
| 5-7am:                                                                |   | 2x (:15)  supporting GMA |
|                                                                  |   | 1x (:15)  supporting Prime |
|                                                                  |   |   |
| 9am-4pm:                                                              |   | 1x (:15)  supporting The View |
|                                                                  |   | 2x (:15)  supporting Prime |

 

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| 4-7pm:          |   | 1x (:15)  supporting WNT               |
|-----------------|--------|----------------------------------------|
|            |   | 2x (:15)  supporting Prime             |
|            |   |                                   |
| 7-8pm.          |   | 1x (30)  supporting Prime              |
|            |   |                                   |
| 11pm:           |   | 1x (15)  supporting Latenight          |
|            |   |                                   |
| Saturday/Sunday |   |                                   |
|            |   |                                   |
| 9am-7pm:        |   | 3x (A5)  supporting Prime              |
|            |   | (9am-6pm-Sun)  1x (:15) supporting WNT |
|            |   |                                   |
| 7-8pm:          |   | 1x (30)  supporting Prime              |
|            |   | (6-7pm –Sun)                      |

 

In return,stations will have access to 4 additional 30-second primetime spots/wk. as wellas the Network’s authorization to convert 7 thirty-second local newsbriefopportunities in primetime to local sale. These spots are currently associated with a station’s commitment to theAffiliate Promotion Swap (APS) plan.

 

**Local News**

** **

Stations agreeto program at least one half hour of locally produced news adjacent to ABC’smorning news program and World News Tonight as well as late night newsprogramming as presently scheduled, subject to Stations’ obligations under FCCrules.

 

**N/AP III**

** **

Network andStations continue to operate in accordance with N/AP III and the parties willnegotiate in good faith their participation in successor plans once formallyoffered by the Network.

 

**Branding**

** **

Stations agreeto discuss with Network in good faith over ways in which they will co-brandwith ABC in order to closely link the stations with the network’s identityCo-branding encompasses.  but is notlimited to the inclusion of the ABC corporate logo in the stations’ localidentification, and encompasses all on-air (graphics, voice over) and off-air(website, print, cable, radio, outdoor, etc) promotion.  Usage of the ABC corporate logo and stationlogo must be consistent with network and station creative guidelines andspecifications.  Stations and Networkwill work in good faith to explore and implement branding opportunities ofmutual benefit.

 

**NewsOne**

** **

Stations willfully participate in ABC NewsOne and NNS or any successor affiliate newsgatheringservice, for the term of this affiliation agreement, subject to negotiationsand

 

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agreement onnew NewsOne and NNS agreements Annual payments will be based on 1/1/05 levels (Schedule C).  Annual fee increases for the basic NewsOneservice will be limited to 3% each year or CPI, whichever is less Oncecompensation is no longer paid to the Station, then the monthly fees for thebasic NewsOne service will be waived provided that Station is otherwise in fullcompliance with the Affiliation Agreements.

 

**Retransmission**

** **

Your Stationswill be authorized to grant retransmission consent to cable systems (and otherMVPD’s) located within the stations’ DMA and to systems located outside thestations’ DMA if the station is “significantly viewed” (as defined by FCCrules) in the MVPD community In the event that Network and Stations opt to pooltheir retransmission rights for the purposes of coordinated retransmissionnegotiations to secure negotiating efficiencies, Stations shall discuss sharingwith Network any incremental fees or other incremental value received forStation’s retransmission consent above what Stations received prior to poolingretransmission rights with the Network.

 

**Network Non-Duplication**

** **

ABC willprovide Stations network non-duplication protection on its analog and digitalchannels for programs that are cleared in-pattern, consistent with FCC rules,against the importation by cable (and other MVPD’s) of a duplicatingout-of-market ABC Network program from another ABC affiliated station Networknon-duplication protection shall begin 48 hours prior to the live time perioddesigned by us for the broadcast of that Network Television Program by yourstation, and shall end at 12:00 Midnight on the seventh day following thatdesignated time period.

 

**Digital Program Delivery**

** **

**A.            First Call.**

** **

Inconsideration for the benefits of this Agreement, Stations agree to become ABC’sprimary affiliate with respect to the programming that ABC distributes in adigital format as a television network on a national basis This obligation willinclude the simulcast feed of the analog service, or its equivalent in theevent that the station is required to relinquish its analog spectrum (the “PrimaryDigital Feed”) In addition, Stations will have the first call to theover-the-air broadcast of any additional channels of television programmingcontained in the Network’s digital feed that are offered to otheraffiliates.  In the event that Stationdeclines or is unable to accept the first call offer for an additional channelfor any reason, then ABC shall be free to distribute that channel in Station’scommunity of license by any means without being limited by the terms of this orany other agreement.

 

**B.            Broadcast Standards & MBPSUsage.**

** **

1.(a)        Subject to its clearance obligations,each Station agrees to transmit on its Primary DTV channel the Primary DigitalFeed of all Network programs, including HDTV programs and Program RelatedMaterial, in a technical format consistent with display formats specifiedwithin the ATSC standard, and, without alteration, modification, insertion ordown conversion of the native display rate, to the extent the transmission doesnot require more bandwidth than is required for 720p transmissions (“BroadcastStandards”), provided, however, that:

 

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(i)            Each Station will not devote morethan 2 mbps on its DTV channel as needed for the broadcast of Program RelatedMaterial;

 

(ii)           Each Station shall reserve for itsown use at all times no less than 5 mbps of digital bandwidth (“Local Set-Aside”);and

 

(iii)          Stations may utilize provencompression technology to allow them to reduce the number of mbps needed tobroadcast the Primary Network Feed and Program Related Material while otherwisemaintaining the Broadcast Standards, without noticeable degradation in audio orpicture quality detectable to viewers utilizing home digital televisionreceivers and while maintaining the functionality of any Program RelatedMaterial.  Stations will control the useof any additional capacity made available by the compression technology and allbandwidth unless some portion of it is needed to maintain HDTV at BroadcastStandards with up to 2 mbps of Program Related Material.

 

(b)           The Network will offer to eachStation its standard reimbursement agreement as offered to affiliates generally(as attached hereto) for acquisition of reception equipment that is necessaryto receive the Primary Network Feed, any additional channel(s) of digitalprogramming that Station may agree to clear and all elements of Program RelatedMaterial and decoding equipment for each such service within the Network’s DTVfeed.  The Stations may re-encode Networkprogramming utilizing compression technology, permitted within ATSCspecifications and FCC rules in effect at the time, and may allocate thebit rates for services carried consistent with ATSC standards so long as theBroadcast Standards and the functionality of Program Related Material as setforth in paragraph 1(a) above are maintained.

 

2.             In the event that the broadcast ofall elements of the Program Related Material and the Primary Digital Feed inaccordance with the Broadcast Standards impinges on the 5 mbps local set-aside,then Network will designate which elements of the Program Related Material thatStation may delete if necessary to maintain the 5 mbps local set-aside Stationswill cooperate with Network to identify, and negotiate with Network in goodfaith (but with no obligation to reach an agreement) regarding the utilizationof, any commercially reasonable alternative means of delivering to viewers anydeleted elements of the Program Related Material that otherwise fall within the2 mbps ceiling.  Stations will consider,in good faith, any request by ABC that Program Related Material for aparticular program be allowed to occupy more than 2 mbps or that Stationsdevote more than 14.39 mbps to the broadcast of the Primary Feed with allProgram Related Material.  To the extentthat Station is not utilizing all of its 5 mbps local set-aside, then Station’sconsent to this request will not be unreasonably withheld.

 

3.             Each Station will, within six (6) monthsfollowing its commencement of broadcasting digital multicast channels, acquireand utilize any commercially reasonable methods (including statisticalmultiplexing equipment, or other similar equipment with the same or greaterperformance characteristics), available now or in the future, that will allowthem to broadcast the complete Primary Network Feed, including all elements ofProgram Related Material (still subject to the 2 mbps ceiling) in a mannerconsistent with Broadcast Standards while otherwise maintaining the 5 mbpslocal set-aside.

 

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**C.            Residual Digital Spectrum.**

** **

Stations agreenot to make any use of its digital spectrum that would interfere with itsobligations under the Affiliation Agreement With respect to any digitalbroadcast spectrum that is not needed for that purpose (“Residual DigitalSpectrum”) Stations shall provide Network reasonable prior notice of anyintended use of the Residual Digital Spectrum provided that ABC agrees to honorany confidentiality requirements to which Stations may be subject.  Stations and Network agree to negotiate ingood faith with respect to acceptance and clearance by Station of anyalternative uses for the Residual Digital Spectrum that Network may then offerto Stations.  This is not intended tocreate an option on the residual spectrum, a right of first refusal or a rightof last negotiation.

 

**D.            *****

 

**Cross Promotion**

 

The CrossPromotion provision incorporated into N/AP II will be extended for the fullterm of the agreement.

 

**Assignment**

 

The assignmentprovision incorporated into NAP III will be extended for the full term of theagreement.

 

**Miscellaneous**

 

ABC agrees tothe following: (1) continue to pay music license fees in Network programs,(2) pay at the new 2005 station rate levels for cut-ins and tagannouncements throughout the new term, and (3) offer continuedindemnification as provided in existing agreements for Network program content.

 

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*** Subject to request forconfidential treatment; separately filed with the Commission.

 

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Deb, I lookforward to the continuation of our affiliation with Young.  Please indicate your approval of these termsby signing in the space provided below.

 
| Sincerely,                                          |
|-----------------------------------------------------|
|                                                |
| /s/ John L  Rouse                                   |   |
| John L Rouse                                        |
|                                                |
| Agreed and  Accepted: Young Broadcasting, Inc. |
|                                                |
| By:                                                 | /s/ Deborah  McDermott |   |
|                                                |   |   |
| Title:                                              |   |   |
|                                                |   |   |
| Date:                                               |   |   |
|                                                     |  |  |  |

 

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**Schedule A**

 

**Pre-emption Reimbursement Matrix(hourly)**

 

| Prime                 |   | 100 | % |
|-----------------------|--------|-----|---|
| Daytime               |   | 20  | % |
| News-GMA/Nightline    |   | 25  | % |
| News-WNT              |   | 60  | % |
| Latenight  (non-news) |   | 15  | % |
| Kids                  |   | 10  | % |
| Weekend  Sports       |   | 40  | % |

 

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**Schedule B**

 

**Annual 1/2 HourPreemptions**

 

| ** ** | ** ** | **Half-Hours** |
|------------|------------|----------------|
| **WKRN**   | ** ** | ** **     |
| ***        |       | ***            |
|       |       |           |
| **WBAY**   | ** ** | ** **     |
| ***        |       | ***            |
|       |       |           |
| **WATE**   | ** ** | ** **     |
| ***        |       | ***            |
|       |       |           |
| **WTEN**   | ** ** | ** **     |
| ***        |       | ***            |
|       |       |           |
| **WRIC**   | ** ** | ** **     |
| ***        |       | ***            |

 

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*** Subject to request forconfidential treatment; separately filed with the Commission.

 

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**Schedule C**

 

**NewsOne Annual Amounts (2005)**

 

| WKRN |   | $ | 100,000 |   |
|------|--------|---|---------|--------|
| WTEN |   | $ | 75,000  |   |
| WRIC |   | $ | 75,000  |   |
| WATE |   | $ | 75,000  |   |
| WBAY |   | $ | 75,000  |   |

 

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