Free Commercial Rental Agreement

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Commercial Rental Agreement

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COMMERCIAL RENTAL AGREEMENT

THIS LEASE (this "Lease") dated this ________ day of ________________, ________

BETWEEN:

______________________ of _________________________________
Telephone: ______________________   Fax: ______________________
(the "Landlord")

OF THE FIRST PART


- AND -

______________________ of _________________________________
Telephone: ______________________
(the "Tenant")

OF THE SECOND PART

IN CONSIDERATION OF the Landlord leasing certain premises to the Tenant, the Tenant leasing those premises from the Landlord and the mutual benefits and obligations set forth in this Lease, the receipt and sufficiency of which consideration is hereby acknowledged, the parties to this Lease (the "Parties") agree as follows:

  1. Definitions
  2. When used in this Lease, the following expressions will have the meanings indicated:
    1. "Additional Rent" means all amounts payable by the Tenant under this Lease except Base Rent, whether or not specifically designated as Additional Rent elsewhere in this Lease;
    2. "Building" means all buildings, improvements, equipment, fixtures, property and facilities from time to time located at __________, as from time to time altered, expanded or reduced by the Landlord in its sole discretion;
    3. "Common Areas and Facilities" mean:
      1. those portions of the Building areas, buildings, improvements, facilities, utilities, equipment and installations in or forming part of the Building which from time to time are not designated or intended by the Landlord to be let to tenants of the Building including, without limitation, exterior weather walls, roofs, entrances and exits, parking areas, driveways, loading docks and area, storage, mechanical and electrical rooms, areas above and below leasable premises and not included within leasable premises, security and alarm equipment, grassed and landscaped areas, retaining walls and maintenance, cleaning and operating equipment serving the Building; and
      2. those lands, areas, buildings, improvements, facilities, utilities, equipment and installations which serve or are for the useful benefit of the Building, the tenants of the Building or the Landlord and those having business with them, whether or not located within, adjacent to or near the Building and which are designated from time to time by the Landlord as part of the Common Areas and Facilities;
    4. "Leasable Area" means with respect to any rentable premises, the area expressed in square metres of all floor space including floor space of mezzanines, if any, determined, calculated and certified by the Landlord and measured from the exterior face of all exterior walls, doors and windows, including walls, doors and windows separating the rentable premises from enclosed Common Areas and Facilities, if any, and from the centre line of all interior walls separating the rentable premises from adjoining rentable premises. There will be no deduction or exclusion for any space occupied by or used for columns, ducts or other structural elements;
    5. "Premises" means the office space at __________.
    6. "Rent" means the total of Base Rent and Additional Rent.
  3. Intent of Lease
  4. It is the intent of this Lease and agreed to by the Parties to this Lease that rent for this Lease will be on a gross rent basis meaning the Tenant will pay the Base Rent and any Additional Rent and the Landlord will be responsible for all other service charges related to the Premises and the operation of the Building save as specifically provided in this Lease to the contrary.
  5. Leased Premises
  6. The Landlord agrees to rent to the Tenant the office space municipally described as __________, (the "Premises").
    The Premises will be used for only the following permitted use (the "Permitted Use"):
    ______________________________________________________________________
                   ______________________________________________________________________

  7. Term
  8. The term of the Lease commences at 12:00 noon on 25 October 2021 and ends at 12:00 noon on 25 October 2021 (the "Term").
  9. Should the Tenant remain in possession of the Premises with the consent of the Landlord after the natural expiration of this Lease, a new tenancy from month to month will be created between the Landlord and the Tenant which will be subject to all the terms and conditions of this Lease but will be terminable upon either party giving one month's notice to the other party.
  10. Rent
  11. Subject to the provisions of this Lease, the Tenant will pay a base rent of ₹__________, payable per month, for the Premises (the "Base Rent"), without setoff, abatement or deduction. In addition to the Base Rent, the Tenant will pay for any fees or taxes arising from the Tenant's business.
  12. The Tenant will pay the Base Rent on or before the __________ of each and every month of the Term to the Landlord.
  13. The Tenant will pay the cost of any applicable stamp duty. If the Tenant defaults in payment of the stamp duty, the Landlord may pay the stamp duty on the Tenant's behalf. Upon notification from the Landlord, the Tenant will pay to the Landlord the cost of any such stamp duty payment plus any associated fees or penalities levied by an authority or this Lease.
  14. No acceptance by the Landlord of any amount less than the full amount owed will be taken to operate as a waiver by the Landlord for the full amount or in any way to defeat or affect the rights and remedies of the Landlord to pursue the full amount.
  15. Use and Occupation
  16. The Tenant will open the whole of the Premises for business to the public fully fixtured, stocked and staffed on the date of commencement of the Term and throughout the Term, and will continuously occupy and utilise the entire Premises in the active conduct of its business in a reputable manner on such days and during such hours of business as may be determined from time to time by the Landlord.
  17. The Tenant covenants that the Tenant will carry on and conduct its business from time to time carried on upon the Premises in such manner as to comply with all statutes, bylaws, rules and regulations of any union, state, local or other competent authority and will not do anything on or in the Premises in contravention of any of them.
  18. Quiet Enjoyment
  19. The Landlord covenants that on paying the Rent and performing the covenants contained in this Lease, the Tenant will peacefully and quietly have, hold, and enjoy the Premises for the agreed term.
  20. Distress
  21. If and whenever the Tenant is in default in payment of any money, whether hereby expressly reserved or deemed as rent, or any part of the rent, the Landlord may, without notice or any form of legal process, enter upon the Premises and seise, remove and sell the Tenant's goods, chattels and equipment from the Premises or seise, remove and sell any goods, chattels and equipment at any place to which the Tenant or any other person may have removed them, in the same manner as if they had remained and been distrained upon the Premises, all notwithstanding any rule of law or equity to the contrary, and the Tenant hereby waives and renounces the benefit of any present or future statute or law limiting or eliminating the Landlord's right of distress.
  22. Overholding
  23. If the Tenant continues to occupy the Premises without the written consent of the Landlord after the expiration or other termination of the Term, then, without any further written agreement, the Tenant will be a month-to-month tenant at a minimum monthly rental equal to twice the Base Rent and subject always to all of the other provisions of this Lease insofar as the same are applicable to a month-to-month tenancy and a tenancy from year to year will not be created by implication of law.
  24. Additional Rights on Reentry
  25. If the Landlord reenters the Premises or terminates this Lease, then:
    1. notwithstanding any such termination or the Term thereby becoming forfeited and void, the provisions of this Lease relating to the consequences of termination will survive;
    2. the Landlord may use such reasonable force as it may deem necessary for the purpose of gaining admittance to and retaking possession of the Premises and the Tenant hereby releases the Landlord from all actions, proceedings, claims and demands whatsoever for and in respect of any such forcible entry or any loss or damage in connection therewith or consequential thereupon;
    3. the Landlord may expel and remove, forcibly, if necessary, the Tenant, those claiming under the Tenant and their effects, as allowed by law, without being taken or deemed to be guilty of any manner of trespass;
    4. in the event that the Landlord has removed the property of the Tenant, the Landlord may store such property in a public warehouse or at a place selected by the Landlord, at the expense of the Tenant. If the Landlord feels that it is not worth storing such property given its value and the cost to store it, then the Landlord may dispose of such property in its sole discretion and use such funds, if any, towards any indebtedness of the Tenant to the Landlord. The Landlord will not be responsible to the Tenant for the disposal of such property other than to provide any balance of the proceeds to the Tenant after paying any storage costs and any amounts owed by the Tenant to the Landlord;
    5. the Landlord may relet the Premises or any part of the Premises for a term or terms which may be less or greater than the balance of the Term remaining and may grant reasonable concessions in connection with such reletting including any alterations and improvements to the Premises;
    6. after reentry, the Landlord may procure the appointment of a receiver to take possession and collect rents and profits of the business of the Tenant, and, if necessary to collect the rents and profits the receiver may carry on the business of the Tenant and take possession of the personal property used in the business of the Tenant, including inventory, trade fixtures, and furnishings, and use them in the business without compensating the Tenant;
    7. after reentry, the Landlord may terminate the Lease on giving 5 days' written notice of termination to the Tenant. Without this notice, reentry of the Premises by the Landlord or its agents will not terminate this Lease;
    8. the Tenant will pay to the Landlord on demand:
      1. all rent, Additional Rent and other amounts payable under this Lease up to the time of reentry or termination, whichever is later;
      2. reasonable expenses as the Landlord incurs or has incurred in connection with the reentering, terminating, reletting, collecting sums due or payable by the Tenant, realising upon assets seised; including without limitation, brokerage, fees and expenses and legal fees and disbursements and the expenses of keeping the Premises in good order, repairing the same and preparing them for reletting; and
      3. as liquidated damages for the loss of rent and other income of the Landlord expected to be derived from this Lease during the period which would have constituted the unexpired portion of the Term had it not been terminated, at the option of the Landlord, either:
        1. an amount determined by reducing to present worth at an assumed interest rate of twelve percent (12%) per annum all Base Rent and estimated Additional Rent to become payable during the period which would have constituted the unexpired portion of the Term, such determination to be made by the Landlord, who may make reasonable estimates of when any such other amounts would have become payable and may make such other assumptions of the facts as may be reasonable in the circumstances; or
        2. an amount equal to the Base Rent and estimated Additional Rent for a period of six (6) months.
  26. Tenant Improvements
  27. The Tenant will obtain written permission from the Landlord before doing any of the following:
    1. painting, wallpapering, redecorating or in any way significantly altering the appearance of the Premises;
    2. removing or adding walls, or performing any structural alterations;
    3. changing the amount of heat or power normally used on the Premises as well as installing additional electrical wiring or heating units;
    4. subject to this Lease, placing or exposing or allowing to be placed or exposed anywhere inside or outside the Premises any placard, notice or sign for advertising or any other purpose;
    5. affixing to or erecting upon or near the Premises any radio or TV antenna or tower, or satellite dish; or
    6. installing or affixing upon or near the Premises any plant, equipment, machinery or apparatus without the Landlord's prior consent.
  28. Utilities and Other Costs
  29. The Landlord is responsible for the payment of the following utilities and other charges in relation to the Premises: electricity, water, sewer, telephone, internet and cable.
  30. Insurance
  31. The Tenant is hereby advised and understands that the personal property of the Tenant is not insured by the Landlord for either damage or loss, and the Landlord assumes no liability for any such loss. The Tenant is advised that, if insurance coverage is desired by the Tenant, the Tenant should inquire of Tenant's insurance agent regarding a Tenant's policy of insurance.
  32. Abandonment
  33. If at any time during the Term, the Tenant abandons the Premises or any part of the Premises, the Landlord may, at its option, enter the Premises by any means without being liable for any prosecution for such entering, and without becoming liable to the Tenant for damages or for any payment of any kind whatever, and may, at the Landlord's discretion, as agent for the Tenant, relet the Premises, or any part of the Premises, for the whole or any part of the then unexpired Term, and may receive and collect all rent payable by virtue of such reletting, and, at the Landlord's option, hold the Tenant liable for any difference between the Rent that would have been payable under this Lease during the balance of the unexpired Term, if this Lease had continued in force, and the net rent for such period realised by the Landlord by means of the reletting. If the Landlord's right of reentry is exercised following abandonment of the premises by the Tenant, then the Landlord may consider any personal property belonging to the Tenant and left on the Premises to also have been abandoned, in which case the Landlord may dispose of all such personal property in any manner the Landlord will deem proper and is relieved of all liability for doing so.
  34. Governing Law
  35. This Lease will be construed in accordance with, and exclusively governed by, the laws of .
  36. Severability
  37. If there is a conflict between any provision of this Lease and the applicable legislation of  (the "Act"), the Act will prevail and such provisions of the Lease will be amended or deleted as necessary in order to comply with the Act. Further, any provisions that are required by the Act are incorporated into this Lease.
  38. The invalidity or unenforceability of any provisions of this Lease will not affect the validity or enforceability of any other provision of this Lease. Such other provisions remain in full force and effect.
  39. Assignment and Subletting
  40. The Tenant will not assign this Lease, or sublet or grant any concession or license to use the Premises or any part of the Premises. An assignment, subletting, concession, or license, whether by operation of law or otherwise, will be void and will, at Landlord's option, terminate this Lease.
  41. Bulk Sale
  42. No bulk sale of goods and assets of the Tenant may take place without first obtaining the written consent of the Landlord, which consent will not be unreasonably withheld so long as the Tenant and the purchaser are able to provide the Landlord with assurances, in a form satisfactory to the Landlord, that the Tenant’s obligations in this Lease will continue to be performed and respected, in the manner satisfactory to the Landlord, after completion of the said bulk sale.
  43. Care and Use of Premises
  44. The Tenant will promptly notify the Landlord of any damage, or of any situation that may significantly interfere with the normal use of the Premises.
  45. The Tenant will not make (or allow to be made) any noise or nuisance which, in the reasonable opinion of the Landlord, disturbs the comfort or convenience of other tenants.
  46. The Tenant will not engage in any illegal trade or activity on or about the Premises.
  47. The Landlord and Tenant will comply with standards of health, sanitation, fire, housing and safety as required by law.
  48. Surrender of Premises
  49. At the expiration of the lease term, the Tenant will quit and surrender the Premises in as good a state and condition as they were at the commencement of this Lease, reasonable use and wear and damages by the elements excepted.
  50. Hazardous Materials
  51. The Tenant will not keep or have on the Premises any article or thing of a dangerous, flammable, or explosive character that might unreasonably increase the danger of fire on the Premises or that might be considered hazardous by any responsible insurance company.
  52. Rules and Regulations
  53. The Tenant will obey all rules and regulations posted by the Landlord regarding the use and care of the Building, parking lot and other common facilities that are provided for the use of the Tenant in and around the Building on the Premises.
  54. General Provisions
  55. Any waiver by the Landlord of any failure by the Tenant to perform or observe the provisions of this Lease will not operate as a waiver of the Landlord's rights under this Lease in respect of any subsequent defaults, breaches or nonperformance and will not defeat or affect in any way the Landlord's rights in respect of any subsequent default or breach.
  56. This Lease will extend to and be binding upon and inure to the benefit of the respective heirs, executors, administrators, successors and assigns, as the case may be, of each party to this Lease. All covenants are to be construed as conditions of this Lease.
  57. All sums payable by the Tenant to the Landlord pursuant to any provision of this Lease will be deemed to be Additional Rent and will be recoverable by the Landlord as rental arrears.
  58. Where there is more than one Tenant executing this Lease, all Tenants are jointly and severally liable for each other's acts, omissions and liabilities pursuant to this Lease.
  59. Time is of the essence in this Lease.
  60. This Lease will constitute the entire agreement between the Landlord and the Tenant. Any prior understanding or representation of any kind preceding the date of this Lease will not be binding on either party to this Lease except to the extent incorporated in this Lease. In particular, no warranties of the Landlord not expressed in this Lease are to be implied.

IN WITNESS WHEREOF the Parties to this Lease have duly affixed their signatures under hand and seal, or by a duly authorised officer under seal, on this ________ day of ________________, ________




______________________________
(Witness)

______________________ (Landlord)

Per:______________________(SEAL)




______________________________
(Witness)

______________________ (Tenant)

Per:______________________(SEAL)

What is a Commercial Rental Agreement?

A Commercial Rental Agreement is a contract you use to rent business property to or from another individual or company. This document outlines the terms and conditions of the tenancy, including the rights and obligations of the landlord and tenant.

Generally, a standard commercial lease includes information about the landlord, tenant, guarantor, rent, lease term, and any additional information that constitutes a term or condition of the lease.

A comprehensive commercial lease is more inclusive and allows for precise specifications of the lease terms. A standard lease is more general and only includes necessary clauses.

A Commercial Rental is also known as a/an:

  • Commercial property lease
  • Commercial lease agreement
  • Business lease
  • Industrial lease
  • Commercial real estate lease
  • Office space lease

If you’re looking to create a lease for a residential property, use LawDepot's Residential Rental Agreement.

How do I write a Commercial Rental Agreement in India?

You can easily create a Commercial Rental Agreement by completing LawDepot’s questionnaire. Using our template ensures you complete the following necessary steps.

1. State the type of commercial property

Start your Commercial Rental Agreement by selecting the type of property. The options include:

  • Building
  • Industrial
  • Office
  • Restaurant
  • Retail store
  • Warehouse

2. Select the type of lease

Choose between a standard or comprehensive agreement.

The standard version of the commercial lease contains all the essential terms for creating a legally binding contract but doesn’t allow you to revise the standard clauses. Most people only require a standard Commerical Lease Agreement.

The comprehensive version is a highly detailed and customisable lease agreement designed for those who need more control over the contract’s wording.

3. Provide the parties’ information

Provide the names and phone numbers of all the parties involved in the Commercial Rental Agreement:

  • Landlord: The person or entity who owns the property and allows the use of the space in exchange for rent.
  • Tenant: The person or business who signs the commercial lease and is responsible for paying rent.
  • Guarantor (if applicable): The person liable to the landlord for any breach of the agreement by the tenant. They can’t be a tenant.
  • Property manager (if applicable): The person who deals with the tenant and manages the property on behalf of the landlord, typically in return for a fee.

4. Outline details about the property

Provide as many details as you have available in your commercial lease. Generally, it’s not necessary to describe the property using more than the property address. However, providing additional details can prevent disputes by further clarifying the property’s boundaries.

Additional details can include:

  • A diagram of the property
  • The property’s area in square feet or metres
  • A legal description of the property
  • Any other details about the property
  • 5. Permitted use

    Describing the permitted use of the property in the commercial lease helps prevent disputes and confusion over what is considered acceptable use of the property.

    Determine and outline whether the tenant will have exclusive use and protection from direct competition on the property. A direct competitor is someone who operates a similar business on the same property as the tenant.

    6. Outline the tenant’s parking privileges

    Describe the parking area at the property location in the Commercial Rental Agreement. It’s common for commercial buildings to have designated parking spots for the businesses inside them.

    7. Set the length of the agreement

    Generally, leases outline fixed-term or periodic tenancies.

    Fixed-term

    A Commercial Rental Agreement with a fixed-term will end on a set date. It can benefit both the landlord and tenant because the terms and conditions stay the same for the lease’s duration.

    The landlord doesn't have to worry about the tenant breaking the lease early without breaching the agreement because the tenant is responsible for paying rent for the entire length of the agreement. On the other hand, the tenant doesn't have to worry about the rent increasing in price unless the lease includes terms that allow rent increases.

    If the tenant remains past the specified date, the landlord can either:

    • Create and sign a new lease with the tenant
    • Start eviction proceedings against the tenant
    • Continue the tenancy as month-to-month with the same terms as the expired fixed end date lease

    Periodic

    A periodic tenancy continues until the landlord or tenant terminates the lease. In our template, the terms to choose from are:

    • Weekly
    • Monthly
    • Yearly

    Under periodic tenancies, landlords and tenants must give notice of their intention to terminate as specified by local laws. At the end of the notice period, the tenant must move out, or the landlord can start eviction proceedings against the tenant.

    A landlord can usually raise the rent or change the lease terms in periodic agreements by providing proper notice as required by law.

    Early possession

    Some landlords may allow tenants to take possession of a rental property early. In this case, state the date the tenant is allowed to enter the property if it differs from the date the lease begins. There are occasions where the landlord grants early possession to the tenant to make any necessary changes to the property.

    8. Decide on a method for rent payments

    State the type, cost, date, and how often the tenant will pay rent. If the landlord intends to charge for late payments, include the interest rate that will apply as a penalty.

    Choose from the three types of rent:

    • Gross rent: Gross rent is where the total rent is a fixed base rent without any additional costs charged to the tenant.
    • Net lease: Net lease is where the tenant is responsible for the fixed base rent plus some additional costs. These costs can include certain operating costs or a portion of all the landlord’s outgoings for the building and common areas.
    • Gross rent plus all operating costs: This is where the tenant pays a fixed base rent plus the outgoings.

    Outgoings are the routine costs of renting business space, such as utilities, maintenance, insurance, and cleaning.

    9. Outline who will pay for services and amenities

    Decide which utilities and services the landlord and tenant will each pay. There’s also the option of the tenant paying the landlord, who then pays the service provider. The cost of utilities is usually separate from the price of rent unless specified otherwise in the lease agreement.

    Utilities and services generally refer to:

    • Electricity
    • Water
    • Sewer
    • Telephone
    • Internet
    • Cable TV

    10. Decide who is responsible for maintenance

    Maintenance of a commercial property may include upkeep of grass and gardens, pavement and driveways, and light fixtures. Decide and state if the tenant or landlord will be responsible for maintaining the property.

    11. Outline deposit details

    State if the tenant will pay any deposits before gaining possession of the property.

    Prepaid rent

    Prepaid rent is a rent payment made to the landlord at the outset of the lease, which the landlord holds as security for the applicable rent payments.

    Security deposit

    A security deposit is a payment made to the landlord at the beginning of the lease. The landlord holds the deposit for damages. It’s a refundable sum of money the tenant pays to the landlord to guarantee they will fulfil their lease obligations.

    The landlord may use the deposit to cover damage caused by the tenant or failure to pay rent. However, the deposit doesn’t cover normal wear and tear.

    Inspection report

    An effective way to determine whether a tenant will receive their security deposit is by completing an inspection report. An inspection report is a written record of the property's condition when the tenant takes possession. A second inspection is done at the end of the lease to compare the property's current state to when the tenant initially gained possession.

    12. Sort out insurance details

    Use a standard agreement to have the standard insurance clauses. It allows you to state who is responsible for insuring the property and its contents between the landlord and tenant.

    If you wish to modify some terms, use a comprehensive agreement to change the wording of the standard clauses. You can then edit the paragraph in the text box to change the terms to suit your needs.

    13. State who pays the stamp duty

    Decide which party will be responsible for paying the stamp duty on the property.

    Stamp duty is a tax on single property purchases or documents. The amount of the stamp duty is based on a percentage of the property value and varies among India’s states and territories.

    Laws related to stamp duty are governed by The Indian Stamp Act, 1899.

    14. State who is responsible for property improvements

    Landlord improvements

    A landlord improvement is an improvement to a property completed by the landlord. They are any expense that contributes to the permanent improvement of the leased property.

    Tenant improvements

    Tenant improvements are permanent improvements made by the tenant to the property.

    15. List the moveable property (chattel) details

    List the moveable property that each party will provide.

    Moveable property is any personal items that aren’t significantly attached to the property, such as curtains, microwaves, lamps, desks, and personal computers.

    16. Signing incentives

    A signing incentive is any incentive given to the tenant in exchange for entering the lease agreement. A typical example is a period of free rent, such as one month free.

    17. Customise standard clauses

    Customising standard clauses is an option in the comprehensive version of a Commercial Rental Agreement.

    Revising a standard clause is optional and should be done if you have a specific need or requirement that the standard clauses don’t address.

    18. State the required notice for evicting a tenant

    A landlord can provide the tenant with a written notice to inform them of any significant changes to the lease terms, such as an eviction notice or increase in rent. You must state how many days notice the landlord needs to give the tenant before eviction for failing to pay rent or breaching the lease in any other way.

    A written notice has specific legal requirements for the manner and time it's given to the recipient. Usually, written notice must be delivered in person, by registered post, or affixed to the door of the premises. The period within which you need to provide the notice before pursuing an eviction will depend on the laws in your state. Consult your local laws before delivering written notice to ensure you meet all requirements.

    State how many days notice the landlord needs to give the tenant before eviction for failing to pay rent or breaching the lease in any other way.

    19. Outline renewal options upon expiry (for fixed-term leases)

    A Commercial Rental Agreement has the following renewal options for the landlord and tenant to choose from:

    • No option specified
    • Same terms
    • Same terms except rent renews at market rates
    • Revise the standard clause

    When the lease term is for a fixed period, the lease will automatically close at the end of that period. The tenant must then leave the property. However, renewing the lease is an available option if the landlord and tenant wish to continue the rental relationship.

    20. Outline miscellaneous details

    The landlord and tenant can add additional terms and details as needed. These details may outline rights and obligations regarding:

    • Subletting the property
    • Legal costs of resolving disputes
    • Pets on the property
    • Carpet cleaning
    • Damages and liabilities

    21. Provide the signing details

    Provide the date the landlord and tenant will sign the Commercial Rental Agreement.

    Your commercial lease may be required to be printed on stamp paper. Check with your local authority to confirm.

    Can a Commercial Rental Agreement be terminated early?

    Yes, a Commercial Rental Agreement may be terminated early in certain circumstances.

    The landlord can break the lease if the tenant breaches the terms and conditions of the commercial lease. While it’s usually preferable that the two parties come together to negotiate a solution to the problem, the landlord has no obligation to do so. A lease can also end if both parties agree to terminate the agreement.

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