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UnrealEngine3 is not responding.

That sounds like you may be missing a file. As a first step, R-click on the title of the game in the Steam library and select Properties. Go to the tab called Local Files and click on Verify Integrity of Local Files. Let Steam check the local files. If it finds nothing, but the problem continues, you may need to uninstall and reinstall the game, to make it copy over fresh versions of all the engine files.
 
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