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Madrid presented an ultimatum to defender Pepe - either he has to sign the new contract proposed to him or he will be sold.
The Spanish club is willing to pay the Portuguese player twice as much salary as before - 3.5 million euros per season - but Pepe wants even more.
According to "Marca", "Real" is tired of the long negotiations, so if the offer is rejected, Pepe will be sold at the end of this season.
The current defender's contract is valid until the summer of 2012.
