PARKERVISION, INC. Convertible Promissory Note due January 8, 2025
Exhibit 10.2
NEITHER THIS NOTE NOR THE SECURITIES ISSUABLE UPON CONVERSION OF
THIS NOTE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY
A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
THIS NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE
MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
SECURED BY SUCH SECURITIES.
PARKERVISION, INC.
Convertible
Promissory
Note due January 8, 2025
Note
No. PV-2020-[▪] $[▪]
Dated: January 8, 2020
For
value received, PARKERVISION, INC., a Florida corporation (the
“
Maker” or the
“Company”), hereby
promises to pay to the order of [▪] (the “Holder”), in accordance
with the terms hereinafter provided, the principal amount of
$[▪].
All
payments under or pursuant to this Convertible Promissory Note
(this “Note”) shall be made in
United States Dollars in immediately available funds to the Holder
at the address of the Holder set forth in the Purchase Agreement
(as hereinafter defined) or at such other place as the Holder may
designate from time to time in writing to the Maker or by wire
transfer of funds to the Holder’s account, instructions for
which are attached hereto as Exhibit A. The aggregate
unconverted and outstanding principal balance of this Note (the
“Outstanding
Principal Amount”) plus all accrued interest thereon
(if any) shall be due and payable on January 8, 2025 (the “Maturity Date”) or at
such other time as provided herein.
ARTICLE 1
1.1 Purchase Agreement. This Note
has been executed and delivered pursuant to the Securities Purchase
Agreement, dated as of January 8,
2020 (as the same may be amended from time to time, the
“Purchase
Agreement”), by and among the Maker and the Holder.
Capitalized terms used and not otherwise defined herein shall have
the meanings set forth for such terms in the Purchase Agreement.
This Note is one of a series of notes issued or to be issued by the
Maker pursuant to the Purchase Agreement (collectively, the
“Purchase Agreement
Notes”).
1.2 Payment of
Interest.
(a) The Maker shall pay
interest to the Holder on the Outstanding Principal Amount at the
rate of eight percent (8.0%) per annum. Interest shall be payable
quarterly on the 15th of April, July,
October and January of each year (each an “Interest Payment
Date”) during the term of the Note; however the first
interest payment shall not commence until the first quarterly
payment date following the effectiveness of the Registration
Statement (as defined in the Purchase Agreement). In addition,
Xxxxxx has the option to request deferral of each interest payment
for a period of six (6) months provided that Holder notifies Maker
one (1) trading day in advance of the scheduled interest payment
date. Interest payments shall be made, at the Maker’s option,
and subject to the Equity Conditions, in (i) cash, (ii) shares of
Common Stock (the “Repayment Shares”), or
(iii) a combination of cash and Repayment Shares. Interest shall
cease to accrue with respect to any principal amount
converted.
(b) The number of
Repayment Shares shall be determined by dividing the payment amount
by the closing price of the Common Stock on the trading day prior
to the Interest Payment Date. The Maker may only issue Repayment
Shares if (i) no Event of Default has occurred or is occurring;
(ii) the Holder has not been issued greater than 14.99% of the
Company’s outstanding shares, inclusive of the Repayment
Shares being issued, unless expressly waived by the Company’s
Board of Directors, (iii) the Repayment Shares are registered on an
effective Registration Statement or otherwise subject to an
exemption therefrom; (iv) the aggregate number of Repayment Shares,
together with any Conversion Shares, will not exceed the shares
reserved in accordance with Section 4.9 of the Securities Purchase
Agreement and (v) the Company’s shares are listed or quoted
on a Trading Market as defined in the Purchase Agreement
(collectively, the “Equity
Conditions”)
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1.3 Payment of
Principal.
(a) The Outstanding
Principal Amount of the Note is payable in cash on the Maturity
Date unless otherwise extended in accordance with Section
1.3(b).
(b) The Maturity Date
of the Note shall be automatically extended by up to ten (10) one
(1) year increments, for an aggregate of ten (10) additional years,
provided that (i)
the Holder does not provide written notice to Maker revoking the
automatic extension option at least ten (10) trading days prior to
the Maturity Date, and, if applicable, each subsequent annual
maturity date and (ii) the interest rate following the Maturity
Date shall be reduced to two percent (2%) per annum on the
Outstanding Principal Amount and such interest shall be payable
annually on the new extended maturity date.
1.4 Transfer. This Note may be
transferred or sold, subject to the provisions of Section 5.8 of
this Note, or pledged, hypothecated or otherwise granted as
security by the Holder.
1.5 Use of Proceeds. The Maker
shall use the proceeds of this Note as set forth in the Purchase
Agreement.
1.6 Senior Status of Note. The
obligations of the Maker under the Purchase Agreement Notes shall
be senior to all equity of the Company. Upon any Liquidation Event
(as hereinafter defined), the Holder will be entitled to receive,
before any distribution or payment is made upon, or set apart with
respect to, any class of capital stock of the Maker, an amount
equal to the Outstanding Principal Amount plus all accrued interest
thereon (if any). For purposes of this Note, “Liquidation Event” means
a liquidation pursuant to a filing of a petition for bankruptcy
under applicable law or any other insolvency or debtor’s
relief, an assignment for the benefit of creditors, or a voluntary
or involuntary liquidation, dissolution or winding up of the
affairs of the Maker.
ARTICLE 2
2.1 Events of Default. The
occurrence of any of the following events shall be an
“Event of
Default” under this Note:
(a) any default in the
payment of (1) the principal amount or accrued interest (if any)
hereunder or under any other Purchase Agreement Note when due; or
(2) liquidated damages in respect of, this Note or any other
Purchase Agreement Note, as and when the same shall become due and
payable (whether on a Payment Date, the Maturity Date or by
acceleration or otherwise);
(b) the Maker shall
fail to observe or perform any other covenant, condition or
agreement contained in this Note, any other Purchase Agreement Note
or any Transaction Document which failure is not cured, if possible
to cure, within three (3) Business Days after notice of such
default sent by the Holder;
(c) any of the
representations or warranties made by the Maker or any of its
agents, officers, directors, employees or representatives in any
Transaction Document or public filing being inaccurate, false or
misleading in any material respect, as of the date as of which it
is made or deemed to be made, or any certificate or financial or
other written statements furnished by or on behalf of the Maker to
the Holder or any of its representatives, is inaccurate, false or
misleading, in any material respect, as of the date as of which it
is made or deemed to be made, or on the Issuance Date;
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(d) the Maker or any of
its Subsidiaries shall: (i) apply for or consent to the appointment
of, or the taking of possession by, a receiver, custodian, trustee
or liquidator of itself or of all or a substantial part of its
property or assets; (ii) make a general assignment for the benefit
of its creditors; (iii) commence a voluntary case under the United
States Bankruptcy Code (as now or hereafter in effect) or under the
comparable laws of any jurisdiction (foreign or domestic); (iv)
file a petition seeking to take advantage of any bankruptcy,
insolvency, moratorium, reorganization or other similar law
affecting the enforcement of creditors’ rights generally; (v)
acquiesce in writing to any petition filed against it in an
involuntary case under United States Bankruptcy Code (as now or
hereafter in effect) or under the comparable laws of any
jurisdiction (foreign or domestic); (vi) issue a notice of
bankruptcy or winding down of its operations or issue a press
release regarding same; or (vii) take any action under the laws of
any jurisdiction (foreign or domestic) analogous to any of the
foregoing;
(e) a proceeding or
case shall be commenced in respect of the Maker or any of its
Subsidiaries, without its application or consent, in any court of
competent jurisdiction, seeking: (i) the liquidation,
reorganization, moratorium, dissolution, winding up, or composition
or readjustment of its debts; (ii) the appointment of a trustee,
receiver, custodian, liquidator or the like of it or of all or any
substantial part of its assets in connection with the liquidation
or dissolution of the Maker or any of its Subsidiaries; or (iii)
similar relief in respect of it under any law providing for the
relief of debtors, and such proceeding or case described in clause
(i), (ii) or (iii) shall continue undismissed, or unstayed and in
effect, for a period of thirty (30) days or any order for relief
shall be entered in an involuntary case under United States
Bankruptcy Code (as now or hereafter in effect) or under the
comparable laws of any jurisdiction (foreign or domestic) against
the Maker or any of its Subsidiaries or action under the laws of
any jurisdiction (foreign or domestic) analogous to any of the
foregoing shall be taken with respect to the Maker or any of its
Subsidiaries and shall continue undismissed, or unstayed and in
effect for a period of thirty (30) days;
(f) the Maker shall, or
shall announce an intention to pursue or consummate a Change of
Control (as defined in the Purchase Agreement), or a Change of
Control shall be consummated, or the Maker shall negotiate, propose
or enter into any agreement, understanding or arrangement with
respect to any Change of Control.
2.2 Remedies Upon an Event of
Default.
(a) Upon the occurrence
and during the continuation of any Event of Default, the Maker
shall pay interest on the Outstanding Principal Amount hereunder at
an interest rate per annum at all times equal to twelve percent
(12%) to the fullest extent permitted by applicable Law.
Accrued and unpaid interest (including interest on past due
interest) shall be due and payable upon demand.
(b) If an Event of
Default shall have occurred and shall be continuing, Holders
representing greater than fifty percent (50%) of the outstanding
principal balance of the Notes (the “Holder Majority”)
may at any time at its option declare the entire Outstanding
Principal Amount plus all accrued interest thereon (if any) due and
payable, and thereupon, the same shall be accelerated and so due
and payable, without presentment, demand, protest, or notice, all
of which are hereby expressly unconditionally and irrevocably
waived by the Maker. No course of delay on the part of the Holder
Majority shall operate as a waiver thereof or otherwise prejudice
the rights of the Holder Majority. No remedy conferred hereby shall
be exclusive of any other remedy referred to herein or now or
hereafter available at law, in equity, by statute or
otherwise.
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ARTICLE 3
3.1 Conversion.
(a) Voluntary Conversion. At any
time and from time to time, subject to Section 3.3 herein and
Section 4.9 of the Securities Purchase Agreement, this Note shall
be convertible (in whole or in part), at the option of the Holder,
into such number of fully paid and non-assessable shares of Common
Stock as is determined by dividing (x) that portion of the
Outstanding Principal plus any accrued interest thereon by (y) the
Conversion Price then in effect on the date on which the Holder
delivers a notice of conversion (the “Conversion Notice”) in
accordance with Section 5.1 to the Maker. The Holder shall deliver
this Note to the Maker at the address designated in the Purchase
Agreement at such time that this Note is fully converted. With
respect to partial conversions of this Note, the Maker shall keep
written records of the amount of this Note converted as of the date
of such conversion (each, a “Conversion
Date”).
(b) Conversion Price. The
“Conversion
Price” means $0.13, and shall be subject to adjustment
as provided herein.
3.2 Delivery of Conversion Shares.
As soon as practicable after any conversion in accordance with this
Note and in any event within two (2) Trading Days thereafter (such
date, the “Share
Delivery Date”), the Maker shall, at its expense,
cause to be issued in the name of and delivered to the Holder, or
as the Holder may direct, a certificate or certificates evidencing
the number of fully paid and nonassessable shares of Common Stock
to which the Holder shall be entitled on such conversion (the
“Conversion
Shares”), in such denominations as may be requested by
the Holder, which certificate or certificates shall be free of
restrictive and trading legends (except for any such legends as may
be required under the Securities Act). In lieu of delivering
physical certificates for the shares of Common Stock issuable upon
any conversion of this Note, provided the Company’s transfer
agent is participating in the Depository Trust Company
(“DTC”)
Fast Automated Securities Transfer program or a similar program,
upon request of the Holder, the Company shall cause its transfer
agent to electronically transmit such shares of Common Stock
issuable upon conversion of this Note to the Holder (or its
designee), by crediting the account of the Holder’s (or such
designee’s) broker with DTC through its Deposit Withdrawal
Agent Commission system (provided that the same time periods herein
as for stock certificates shall apply) as instructed by the Holder
(or its designee).
3.3 Ownership Cap. Notwithstanding
anything to the contrary contained herein, the Holder shall not be
entitled to receive shares of Common Stock or other securities
(together with Common Stock, “Equity Interests”) upon
conversion of this Note to the extent (but only to the extent) that
such exercise or receipt would cause the Holder Group (as defined
below) to become, directly or indirectly, a “beneficial
owner” (within the meaning of Section 13(d) of the 1934 Act
and the rules and regulations promulgated thereunder) of a number
of Equity Interests of a class that is registered under the 1934
Act which exceeds the Maximum Percentage (as defined below) of the
Equity Interests of such class that are outstanding at such time.
To the extent limitations contained in this Section 3.3 apply, the
determination of whether this Note is convertible and of which
portion of this Note is convertible shall be the sole
responsibility and in the sole determination of the Holder, and the
submission of a notice of conversion shall be deemed to constitute
the Holder’s determination that the issuance of the full
number of Conversion Shares requested in the notice of conversion
is permitted hereunder, and the Company shall not have any
obligation to verify or confirm the accuracy of such determination.
For purposes of this Section 3.3, (i) the term “Maximum Percentage” shall
mean 4.99% through April 1, 2020 and shall increase to 9.99% after
April 1, 2020 ; provided, that, at the request of the Holder, the
Maker may permit the Holder to increase the Maximum Percentage to
14.99% subject to the Maker’s analysis of its
“ownership change” as defined by Section 382 of the
Internal Revenue Code of 1986, as amended; it being agreed and
understood that any such increase in the Maximum Percentage shall
not take effect until 61 days following the date the Maker grants
such request and (ii) the term “Holder Group” shall mean
the Holder plus any other Person with which the Holder is
considered to be part of a group under Section 13 of the 1934 Act
or with which the Holder otherwise files reports under Sections 13
and/or 16 of the 1934 Act. In determining the number of Equity
Interests of a particular class outstanding at any point in time,
the Holder may rely on the number of outstanding Equity Interests
of such class as reflected in (x) the Company’s most recent
Annual Report on Form 10-K or Quarterly Report on Form 10-Q filed
with the Securities and Exchange Commission, as the case may be,
(y) a more recent public announcement by the Company or (z) a more
recent notice by the Company or its transfer agent to the Holder
setting forth the number of Equity Interests of such class then
outstanding. The provisions of this Section 3.3 shall be construed,
corrected and implemented in a manner so as to effectuate the
intended beneficial ownership limitation herein
contained.
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3.4 Adjustment of Conversion
Price.
(a) Until the Note has
been paid in full or converted in full, the Conversion Price shall
be subject to adjustment from time to time as follows (but shall
not be increased, other than pursuant to Section 3.4(a)(i)
hereof):
(i) Adjustments for Stock Splits and
Combinations. If the Maker shall at any time or from time to
time after the Closing Date (but whether before or after the
Issuance Date) effect a split of the outstanding Common Stock, the
applicable Conversion Price in effect immediately prior to the
stock split shall be proportionately decreased. If the Maker shall
at any time or from time to time after the Closing Date (but
whether before or after the Issuance Date), combine the outstanding
shares of Common Stock, the applicable Conversion Price in effect
immediately prior to the combination shall be proportionately
increased. Any adjustments under this Section 3.4(a)(i) shall be
effective at the close of business on the date the stock split or
combination occurs.
(b) Certificates as to Adjustments.
Upon occurrence of each adjustment or readjustment of the
Conversion Price or number of shares of Common Stock issuable upon
conversion of this Note pursuant to this Section 3.4, the Maker at
its expense shall promptly compute such adjustment or readjustment
in accordance with the terms hereof and furnish to the Holder a
certificate setting forth such adjustment and readjustment, showing
in detail the facts upon which such adjustment or readjustment is
based. The Maker shall, upon written request of the Holder, at any
time, furnish or cause to be furnished to the Holder a like
certificate setting forth such adjustments and readjustments, the
applicable Conversion Price in effect at the time, and the number
of shares of Common Stock and the amount, if any, of other
securities or property which at the time would be received upon the
conversion of this Note. Notwithstanding the foregoing, the Maker
shall not be obligated to deliver a certificate unless such
certificate would reflect an increase or decrease of at least one
percent (1%) of such adjusted amount.
3.5 Issue Taxes. The Maker shall
pay any and all issue and other taxes, excluding federal, state or
local income taxes, that may be payable in respect of any issue or
delivery of shares of Common Stock on conversion of this Note
pursuant thereto; provided,
however, that the Maker shall not be obligated to pay any
transfer taxes resulting from any transfer requested by the Holder
in connection with any such conversion.
3.6 Fractional Shares. No
fractional shares of Common Stock shall be issued upon conversion
of this Note. In lieu of any fractional shares to which the Holder
would otherwise be entitled, the Maker shall pay cash equal such
fractional shares multiplied by the Conversion Price then in
effect.
3.7 Reservation of Common Stock.
The Maker shall reserve and keep available out of its authorized
but unissued Common Stock, such number of shares of Common Stock
equal to the Required Minimum as defined in the Purchase
Agreement.
3.8 Effect of Events Prior to the Issuance
Date. If the Issuance Date of this Note is after the Closing
Date, then, if the Conversion Price or any other right of the
Holder of this Note would have been adjusted or modified by
operation of any provision of this Note had this Note been issued
on the Closing Date, such adjustment or modification shall be
deemed to apply to this Note as of the Issuance Date as if this
Note had been issued on the Closing Date.
3.9 Inability to Fully Convert. If,
upon the Maker’s receipt of a Conversion Notice or as
otherwise required under this Note, the Maker cannot issue shares
of Common Stock for any reason, including, without limitation,
because the Maker does not have a sufficient number of shares of
Common Stock authorized and available then the Maker shall issue as
many shares of Common Stock as it is able to issue and, with
respect to the unconverted portion of this Note or with respect to
any shares of Common Stock not timely issued in accordance with
this Note, the Holder, solely at Holder’s option, can elect
to void its Conversion Notice and retain or have returned, as the
case may be, this Note that was to be converted pursuant to the
Conversion Notice (provided that the Holder’s voiding its
Conversion Notice shall not affect the Maker’s obligations to
make any payments which have accrued prior to the date of such
notice).
3.10 No
Rights as Stockholder. Nothing contained in this Note shall
be construed as conferring upon the Holder, prior to the conversion
of this Note, the right to vote or to receive dividends or to
consent or to receive notice as a stockholder in respect of any
meeting of stockholders for the election of directors of the Maker
or of any other matter, or any other rights as a stockholder of the
Maker.
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ARTICLE 4
4.1 Covenants. For so long as any
Note is outstanding, without the prior written consent of the
Holder:
(a) Compliance with Transaction
Documents. The Maker shall, and shall cause its Subsidiaries
to, comply with its obligations under this Note and the other
Transaction Documents.
(b) Corporate Existence. The Maker
shall, and shall cause each of its Subsidiaries to, maintain in
full force and effect its corporate existence, rights and
franchises and all licenses and other rights to use property owned
or possessed by it and reasonably deemed to be
ARTICLE 5
5.1 Notices. Any and all notices or
other communications or deliveries required or permitted to be
provided hereunder shall be in writing and shall be deemed given
and effective on the earliest of (a) the date of transmission, if
such notice or communication is delivered via email at the email
address specified in this Section prior to 5:00 p.m. (New York
time) on a Business Day, (b) the next Business Day after the date
of transmission, if such notice or communication is delivered via
email at the email address specified in this Section on a day that
is not a Business Day or later than 5:00 p.m. (New York time) on
any date and earlier than 11:59 p.m. (New York time) on such date,
(c) the Business Day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service, or (d) upon actual
receipt by the party to whom such notice is required to be given.
The addresses for notice shall be as set forth in the Purchase
Agreement.
5.2 Governing Law. This Agreement
shall be governed by and construed in accordance with the Laws of
the State of New York, without reference to principles of conflict
of laws or choice of laws. This Note shall not be interpreted or
construed with any presumption against the party causing this Note
to be drafted.
5.3 Headings. Article and section
headings in this Note are included herein for purposes of
convenience of reference only and shall not constitute a part of
this Note for any other purpose.
5.4 Binding Effect. The obligations
of the Maker and the Holder set forth herein shall be binding upon
the successors and assigns of each such party, whether or not such
successors or assigns are permitted by the terms
herein.
5.5 Amendments; Waivers. No
provision of this Note may be waived or amended except in a written
instrument signed by the Company and the Holder Majority No waiver
of any default with respect to any provision, condition or
requirement of this Note shall be deemed to be a continuing waiver
in the future or a waiver of any subsequent default or a waiver of
any other provision, condition or requirement hereof, nor shall any
delay or omission of either party to exercise any right hereunder
in any manner impair the exercise of any such right.
5.6 Compliance with Securities
Laws. The Holder of this Note acknowledges that this Note is
being acquired solely for the Holder’s own account and not as
a nominee for any other party, and for investment, and that the
Holder shall not offer, sell or otherwise dispose of this Note in
violation of securities laws. This Note and any Note issued in
substitution or replacement therefor shall be stamped or imprinted
with a legend in substantially the following form:
“NEITHER THIS
NOTE NOR THE SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED
OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF
COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH
SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.”
5.7 Jurisdiction; Venue. Any
action, proceeding or claim arising out of, or relating in any way
to this Agreement shall be brought and enforced in the New York
Supreme Court, County of New York, or in the United States District
Court for the Southern District of New York. The Company and the
Holder irrevocably submit to the jurisdiction of such courts, which
jurisdiction shall be exclusive, and hereby waive any objection to
such exclusive jurisdiction or that such courts represent an
inconvenient forum. The prevailing party in any such action shall
be entitled to recover its reasonable and documented
attorneys’ fees and out-of-pocket expenses relating to such
action or proceeding.
5.8 Parties in Interest. This Note
shall be binding upon, inure to the benefit of and be enforceable
by the Maker, the Holder and their respective successors and
permitted assigns.
[Signature
Pages Follow]
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IN
WITNESS WHEREOF, the Maker has caused this Note to be duly executed
by its duly authorized officer as of the date first above
indicated.
PARKERVISION,
INC.
By:
Name:
Xxxxxxx Xxxxxxxx
Title:
Chief Financial Officer
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