Hey guys, thank you very much for your help!  :-)
I have given 1280M to magnolia in the setenv.sh file and it seems to work fine 
now.

Thanks,
Dmitry

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Context is everything: 
http://forum.magnolia-cms.com/forum/thread.html?threadId=5e7ecfd2-fa7f-4a2d-ae4b-903bbe791a53


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