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Compensation of distributed delays in MIMO, LTI systems is achieved using Artstein's reduction method. In this technical note, we construct a Lyapunov functional for the resulting closed-loop system and establish exponential stability. The key element in our work is the introduction of an infinite-dimensional forwarding-backstepping transformation of the infinite-dimensional actuator states. We illustrate the construction of the Lyapunov functional with a detailed example of a single-input system, in which the input is entering through two individual channels with different delays. Finally, we develop an observer equivalent to the predictor feedback design, for the case of distributed sensor delays and prove exponential convergence of the estimation error.