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EXHIBIT 6.03
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BROOKE CORPORATION
K7507 - 5-1-98
AGENCY - COMPANY
AGREEMENT
EMC
EMC INSURANCE COMPANIES
EMPLOYERS MUTUAL CASUALTY COMPANY
EMPLOYERS MODERN LIFE COMPANY / EMCASCO INSURANCE COMPANY
Des Moines
ILLINOIS EMCASCO INSURANCE COMPANY
Oak Brook
UNION INSURANCE COMPANY OF PROVIDENCE
Providence
DAKOTA FIRE INSURANCE COMPANY
Bismarck
AMERICAN LIBERTY INSURANCE COMPANY
Birmingham
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AGENCY - COMPANY AGREEMENT
<TABLE>
<CAPTION>
This agreement, made and entered into by and between: Account No.
<S> <C>
/ / EMPLOYERS MUTUAL CASUALTY COMPANY OF DES MOINES, IOWA AK-7507-1
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/ / EMCASCO INSURANCE COMPANY OF DES MOINES, IOWA BK-7507-4
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/ / UNION INSURANCE COMPANY OF PROVIDENCE, RHODE ISLAND DK-7507-0
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/ / DAKOTA FIRE INSURANCE COMPANY OF BISMARCK, NORTH DAKOTA ---------
/ / ILLINOIS EMCASCO INSURANCE COMPANY, OAK BROOK, ILLINOIS ---------
/ / AMERICAN LIBERTY INSURANCE COMPANY, BIRMINGHAM, ALABAMA ---------
</TABLE>
Hereinafter severally called the Company and
Agent BROOKE CORPORATION
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/ / Individual / / co-partnership /X/ corporation
Location 7800 COLLEGE BLVD. - SUITE 203 - OVERLAND PARK, KS 66210
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hereinafter called the "Agent", mutually agree to the following:
I. AUTHORITY OF AGENT
A. The Agent is an independent contractor, not an employee of the
Company and, subject to requirements of and prohibitions imposed by
law, the terms of this Agreement, and the underwriting rules and
regulations of the Company, is authorized to:
1. Solicit, receive and transmit to the Company proposals for
insurance contracts, including fidelity and surety bonds, which
the agent is authorized to write.
2. Bind and execute insurance contracts as provided in the then
Current Instructions to Agents.
3. Provide all usual and customary services of an insurance agent
on all insurance contracts placed by the Agent with the Company.
4. Collect and receipt for premiums, except as to direct bill
business or premium finance payments, and to retain commissions
as full compensation out of premiums so collected as specified
in the commission schedule. The Agent agrees to refund return
commissions on policy cancellations or reductions, in each case
at the same rate at which such commissions were originally
retained.
5. Exercise his authority personally or through his authorized
employees.
6. Represent other companies.
7. Exercise exclusive and independent control of his time and the
conduct of his agency.
II. DUTIES OF AGENT
The Agent agrees to:
A. Comply with the underwriting rules and regulations of the Company.
B. Forward copies of all binders, policies, certificates and
endorsements issued by the Agent, or otherwise notify the Company of
all liability accepted, not later than the third succeeding business
day following the inception date of coverage.
C. Comply with accounting procedures as hereinafter set forth.
III. PREMIUM ACCOUNTING
The Agent and the Company shall comply with the following accounting
procedures on insurance written in the Company by the Agent:
A. Itemized statements of money due shall be prepared monthly by the
Company.
B. The balance shown in the statement due the Company, or due the Agent
shall be payable as follows:
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1. Items designated as Agency Billed on monthly accounting
statements shall be paid within 45 days after the end of the
account month for which such statement was prepared.
2. Items designated as Direct Billed on monthly accounting
statements shall be paid within 30 days after the end of the
account month for which such statement was prepared.
C. The omission of any item(s) from a monthly statement shall not affect
the responsibility of either party to account for and pay all amounts
due the other, nor shall it prejudice the rights of either party to
collect all such amounts due from the other.
D. Any credit extended for payment of premiums on business arising from
the Agency created by this Agreement shall be the sole risk of the
Agent.
E. If any interim or final additional premiums developed by audit or
under reporting form policies or non-cancellable bonds, cannot be
collected by the Agent, the Company shall undertake direct collection
and the Agent shall not be responsible for such premiums provided:
1. The Agent has made a reasonable effort to collect such premiums.
2. The Agent notifies the Company within 30 days in writing of the
Company's initial date of billing the Agent for such premiums.
3. No commission shall be paid to the Agent on such premiums
collected by the Company.
F. The Company shall have access at all reasonable times to the Agent's
books and records for the purpose of determining any fact relating to
money due the Company on business placed with the Company by the
Agent.
IV. CHANGES IN AGREEMENT
A. This Agreement may be revised at any time by mutual agreement in
writing of the Agent and the Company.
B. This Agreement may be revised by the Company only after it gives the
Agent at least 90 days advance notice which sets forth the proposed
revision and its effective date.
C. No change in any rate of commission as specified on the commission
schedule may be made until the Company has had such rate of
commission in effect for a period of not less than one year, except
during the first twelve months of this agreement.
V. COMMISSIONS
It is agreed that:
A. The Agent will accept and the Company will pay as full compensation
for all services rendered under this Agreement the percentages of
commissions as specified in the commission schedule.
B. The commissions specified in the schedule shall not apply to the
renewal of an insurance contract which the Company is required to
renew by law, unless the Company failed to comply with a
requirement(s) which would have permitted nonrenewal of the contract.
C. The terms of this Agreement shall not prohibit the negotiation of
special commission rates on individual policies by mutual agreement
of the Agent and the Company.
VI. DIRECT BILLED POLICIES
The following provisions apply to business placed by the Agent with the
Company and designated by the Company as Direct Billed:
A. The completed application or two daily reports of the original policy
shall be submitted to the Company in accordance with the provisions
of the Company's Direct Billed Program.
B. The Company shall be responsible for billing and collecting renewal
premiums unless otherwise mutually agreed upon by the Agent and the
Company.
C. The Company shall clearly and prominently identify the Agent by name
when transmitting policies, endorsements, premium notices,
cancellation notices and other communications to policyholders. The
Company shall promptly provide the Agent with a copy of all such
items sent to policyholders.
D. Unless authorized by the Agent, the Company shall not use, or permit
the use of, its records of business placed by the Agent with the
Company to solicit individual policyholders for the sale of other
lines
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of insurance or other products or services. When the Agent grants
such authorization, he shall be allowed the applicable commission or
fee on such sales resulting from the use of such records.
VII. TERMINATION OR SUSPENSION
A. This Agreement shall terminate:
1. Automatically if any public authority cancels or declines to
renew the Agent's license or certificate of authority.
2. Automatically on the effective date of the sale or transfer of
the Agent's business, or its consolidation with a successor
firm, unless this Agreement is assigned as provided in Section
IX C.
3. Upon either party giving at least 90 days advance written notice
to the other.
4. Immediately upon either party giving written notice to the other
in the event of abandonment, fraud, insolvency, failure to pay
the company the balance due pursuant to the terms of Section III
hereof or any other sums due the company, or gross and willful
misconduct on the part of such other party.
B. If this Agreement is terminated pursuant to clause A 3 of this
section, the Company shall:
1. Authorize the Agent to service unexpired insurance policies, and
also arrange for appropriate underwriting, claims, inspection,
premium audit, and other necessary Company services on such
policies; or
2. At the Agent's request, authorize on terms acceptable to all
parties of interest the reinsurance of all existing policies
with another insurance carrier selected by the Agent and
approved by the Company, which approval shall not be
unreasonably withheld. The reinsurance shall be effective as of
the termination date of this Agreement and the Company agrees to
prepare promptly, and deliver to the assuming carrier, a
bordereau of the business reinsured; and
3. In either event, and at the Agent's request, provide the Agent
with a complete list of existing Direct Billed policies placed
by the Agent with the Company, including expiration dates,
together with other information on such policies contained in
the Company's records as may reasonably be provided.
C. If the Agent fails to pay the company the balance due pursuant to the
terms of Section III hereof, the Company may by written notice to the
Agent suspend the Agent's authority under items 1, 2, 3 and 4 of
Authority of Agent, to whatever extent the Company may elect, during
the period the Agent remains delinquent in such payment. Routine
differences in account which are minor in amount will not constitute
delinquency in payment under this provision.
D. In the event of the termination of this Agreement:
1. The Agent's records, use and control of expirations, including
Direct Billed business and continuous term policies, shall
remain the property of the Agent and left in his undisputed
possession, provided the Agent on the effective date of the
termination has then rendered and continues to render timely
accounts and payments of all amounts due the Company, or
provides security therefor acceptable to the Company. Otherwise,
the records, use and control of all expirations of business
placed with the Company shall become vested in it and the Agent
shall immediately surrender the same to the Company which shall
have the right to sell, assign or transfer the same to satisfy
the Agents' obligation to the Company.
2. If in disposing of such records and expirations the Company does
not realize sufficient money to discharge in full the Agent's
indebtedness to the Company, the Agent shall remain liable for
the balance of such indebtedness. Any amount realized in excess
of indebtedness, less expense of disposing of such records and
expirations, shall be returned to the Agent.
VIII. INDEMNIFICATION OF AGENT
A. The Company shall indemnify and hold the Agent harmless from
liability or damages arising out of Company error or omission in the
preparation or handling of any insurance contract or billing
statement to which this Agreement applies, except to the extent that
the Agent has caused, contributed to or compounded the error or
omission.
B. The Agent shall promptly notify the Company of any claim for damages
as outlined above, and the
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Company, at its option, will have the right to assume or associate in
the defense thereof.
C. The Agent shall not, except at his own expense, voluntarily make
payment, assume any liability, or incur any expense related to such
claim without the consent of the Company.
D. Providing the Agent has complied with the above provisions, the
Company agrees to pay all expenses including legal fees reasonably
incurred by the Agent in connection with the investigation or defense
of any such claim.
E. The Company shall indemnify and hold the Agent harmless against
actual pecuniary damages which the Agent becomes obligated to pay,
including costs of defense, due solely to the failure of the Company
to comply with the requirements of Public Law 91-508 (The Fair Credit
Reporting Act) in the procurement or use of consumer reports ordered
by the Company, except to the extent that such damages are caused or
contributed to by any act or omission of the Agent. The Agent shall
immediately notify the Company of any claim or action relating to the
Fair Credit Reporting Act, and the Company shall be entitled to
defend such action with counsel of its choice.
IX. CONDITIONS
A. This Agreement supersedes all previous agency agreements, including
any amendments, whether written or oral, between the Company and the
Agent.
B. All sums paid by policyholders to the Agent or his representatives
less any Commission due the agent, shall be held in trust for the
Company by the Agent and shall not be used to pay any expense or
other obligations. The making of payments or rendering of accounts
pursuant to this Agreement do not convert the relationship to debtor
and creditor as to such sums.
C. This contract shall not be assigned, transferred or sold without
prior written consent of the Company.
In Witness Whereof the Agent and the Company have caused this Agreement to be
executed this 1st day of MAY, 1998.
FOR THE AGENT BY: FOR THE COMPANY BY:
/s/ Dennis C. Johannsen
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(Title)
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********** EMC
KANSAS EMC INSURANCE COMPANIES
********** SCHEDULE OF COMMISSIONS
<TABLE>
<CAPTION>
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EMPLOYERS UNION ILLINOIS AMERICAN
MUTUAL EMCASCO INSURANCE DAKOTA FIRE EMCASCO LIBERTY
EFFECTIVE DATE OF COMMISSIONS: 05-01-98 CASUALTY INSURANCE COMPANY OF INSURANCE INSURANCE INSURANCE
----------------------- COMPANY COMPANY PROVIDENCE COMPANY COMPANY COMPANY
% % % % % %
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BONDS
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<S> <C> <C> <C> <C> <C> <C>
Fidelity & Surety 30
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Blanket Fidelity Bonds 15
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Form A 15
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Forgery (Form B) 15
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PRE-EXECUTED LICENSE & PERMITS 35
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SPECIAL LINES
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Umbrella
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Personal 15
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Commercial 15
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Linebacker 10
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Directors & Officers 10
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PERSONAL AUTOMOBILE ---------------------------- ---------------------------------------------------------------------------
(except as specified below)
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CLASS CODES
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8021 - 8295, 8461 - 8465 15 15 15
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8821 - 8879 15 15 15
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8311 - 8415, 8511 - 8815 10 10 10
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8911 - 8912 10 10 10
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HOMEOWNERS 15 15 15
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DWELLING AND Dwelling 15
PERSONAL LIABILITY -------------------- ---------------------------------------------------------------------------
Personal Liability 15
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MOTORCYCLE 15
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PERSONAL 20
INLAND MARINE ---------------------------- ---------------------------------------------------------------------------
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OTHER LINES Risk Re-insured By NEGOTIATED
(as specified) ---------------------------- --------------------------------------------------
Company through-IRM
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FARM 15
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COMMISSIONS FOR SPECIFIC RISKS MAY BE INDIVIDUALLY NEGOTIATED
</TABLE>
Form 0020.2 (Rev. 8-93) FST
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********** EMC
KANSAS EMC INSURANCE COMPANIES
********** SCHEDULE OF COMMISSIONS
<TABLE>
<CAPTION>
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EFFECTIVE DATE OF COMMISSIONS: 05-01-98
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ACCOUNT NUMBER: K-7507 EMPLOYERS UNION ILLINOIS AMERICAN
-------------------------------------- MUTUAL EMCASCO INSURANCE DAKOTA FIRE EMCASCO LIBERTY
AGENCY NAME: BROOKE CORPORATION CASUALTY INSURANCE COMPANY OF INSURANCE INSURANCE INSURANCE
----------------------------------------- COMPANY COMPANY PROVIDENCE COMPANY COMPANY COMPANY
----------------------------------------- % % % % % %
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<S> <C> <C> <C> <C> <C> <C> <C>
WORKERS COMPENSATION FIRST $1,000 10 10 10
AND EMPLOYERS LIABILITY ----------------------------
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NEXT $4,000 05 05 05
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REMAINDER 025 025 025
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COMMERCIAL AUTOMOBILE AND GARAGE 15
(except as specified below)---------------------------- --------------------------------------------------------------------------
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BOILER & MACHINERY 20
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CRIME COVERAGE FORM C-Q 15
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FIRE AND ALLIED LINES COMMERCIAL PROPERTY 20
(except as specified below)---------------------------- --------------------------------------------------------------------------
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ACCOMMODATION LINES: 15
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SUCH AS: BOWLING ALLEYS 15
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BARS-TAVERNS 15
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RESTAURANTS 15
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SUPERMARKETS 15
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LUMBERYARDS 15
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CLUBS 15
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GENERAL LIABILITY 15
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COMMERCIAL INLAND MARINE 20
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BUSINESSOWNERS 20
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COMMISSIONS FOR SPECIFIC RISKS MAY BE INDIVIDUALLY NEGOTIATED
</TABLE>
Form 0020.2 (Rev. 8-93) FST
<PAGE>
EMC
EMC INSURANCE COMPANIES
EMPLOYERS MUTUAL CASUALTY COMPANY DAKOTA FIRE INSURANCE COMPANY
EMCASCO INSURANCE COMPANY ILLINOIS EMCASCO INSURANCE COMPANY
UNION INSURANCE COMPANY OF PROVIDENCE AMERICAN LIBERTY INSURANCE COMPANY
EMPLOYERS MODERN LIFE COMPANY
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CORPORATE AGENCY SUPPLEMENT
To be executed in the case of incorporated agencies, making the equity owners
thereof liable for sums not accounted for by the corporation:
In consideration of the appointment of:
Legal Name of Incorporated Agency: BROOKE CORPORATION
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Doing Business As:
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City: OVERLAND PARK, State: KANSAS Agent Number: K-7507
------------------------- -------------- -----------
by one or more of the above EMC Insurance Companies (as they appear on the
Agency-Company Agreement) as Agent, and as inducement to them to do so, we, the
undersigned, do hereby guarantee on behalf of ourselves, heirs, successors and
assigns, the faithful performance
of the obligations of said Agent to the Company and firmly bind ourselves,
jointly and severally, effective 05-01-98, to pay any sum for which said Agent
may become liable to pay the Company by virtue of the Agency created under the
foregoing Agreement and which said Agent shall fail or refuse to pay.
INDIVIDUAL(S) AS GUARANTOR(S), EXECUTE BELOW
<TABLE>
<S> <C>
1. Guarantor's Signature: Printed or Typed Name:
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Date: Witness:
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2. Guarantor's Signature: Printed or Typed Name:
-------------------------- ------------------------------------
Date: Witness:
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3. Guarantor's Signature: Printed or Typed Name:
-------------------------- ------------------------------------
Date: Witness:
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</TABLE>
CORPORATION AS GUARANTOR, EXECUTE ON REVERSE SIDE
<PAGE>
CORPORATION AS GUARANTOR, EXECUTE BELOW
Name of Guarantor Corporation:
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Officer Signing for Guarantor Corporation:
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Title of Officer Signing for Guarantor Corporation:
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Date:
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Witness:
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THE FOLLOWING MUST ALSO BE COMPLETED BY A CORPORATE GUARANTOR:
Be it resolved by the Board of Directors of
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(Guarantor Corporation)
meeting in regular session on the _______ day of _________________, 19______,
that the duly elected officers of said Company are hereby authorized to execute
a Corporate Agency Supplement guaranteeing the faithful performance of
obligations of
as Agent of
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(Incorporated Agency)
the one or more EMC Insurance Companies (as they appear on the Agency-Company
Agreement), and we hereby ratify any Acts of said Officers in executing such
Corporate Agency Supplement if done prior to the date of this resolution.
I hereby certify that the above is a correct copy of a duly adopted resolution
of the Board of Directors of
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(Guarantor Corporation)
Corporate Secretary:
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Date:
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Witness:
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