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EXHIBIT 10.4
AMENDMENT TO INCENTIVE STOCK OPTION AGREEMENTS
This Amendment to Incentive Stock Option Agreements dated February 11, 2000 is
between AirNet Communications Corporation ("AirNet" or the "Company") and R. Xxx
Xxxxxxxx, Xx. (the "Employee").
RECITALS:
A. The Employee is an at-will employee of the Company.
B. Employee serves in the capacities of President and Chief Executive Officer
at the behest of and at the discretion of the Board of Directors.
C. The Company recognizes that the possibility of a Change in Control of the
Company may exist which, if preceded or followed by termination of the
employment of Employee, would cause the Employee to lose the opportunity to
exercise unvested stock options, and that such possibility, and the uncertainty
and questions which it may raise, may result in the distraction of the Employee
to the detriment of the Company.
D. In order to encourage the Employee to maintain his/her continued attention
and dedication to his/her duties and responsibilities, the Company desires to
enter into this Amendment with the Employee setting forth additional terms and
conditions as to the Employee's stock options in connection with a Change in
Control of the Company.
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements herein contained, the parties agree as follows:
SECTION 1.DEFINITIONS.
The following Capitalized terms shall have the following meanings:
"Business" means the business of AirNet as conducted immediately prior to
any Change in Control.
"Cause" means the Employee's intentional bad faith act or omission, felony
conviction, or gross dereliction of duty, which is materially harmful or
damaging to the Company, or intentional material breach of any of Employee's
obligations under the Proprietary Information and Inventions Agreement executed
by Company and the Employee.
"Change in Control" shall mean:
(i) the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange act) of 50% or more of either (i) then outstanding shares of common
stock of the Company (the "Outstanding
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Company Common Stock") or (ii) the combined voting power of then outstanding
voting securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities") or;
(ii) the cessation for any reason of individuals who, as of the date
hereof, constitute the Board (the "Incumbent Board") to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board; or
(iii) the approval by the shareholders of the Company and the closing of
a reorganization, merger or consolidation, in each case, unless, following such
reorganization, merger or consolidation, more than 50% of, respectively, then
outstanding shares of common stock of the corporation resulting from such
reorganization, merger or consolidation and the combined voting power of then
outstanding voting securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly or indirectly, by
all or substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such reorganization, merger or
consolidation in substantially the same proportions as their ownership,
immediately prior to such reorganization, merger or consolidation, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities, as
the case may be; or
(iv) the approval by the shareholders of the Company and the closing of
(i) a complete liquidation or dissolution of the Company or (ii) the sale or
other disposition of all or substantially all of the assets of the Company.
"Company" means AirNet Communications Corporation or, in the event of a
Change in Control, the successor(s) in interest to AirNet Communications
Corporation.
"Person" means an individual, partnership, corporation, association,
trust, joint venture, unincorporated organization and any government,
governmental department or agency or political subdivision thereof.
SECTION 2. TERMINATION EVENTS.
2.1 This Agreement does not constitute an employment agreement. The
Company retains its right to terminate Employee's employment with or without
Cause.
2.2 Either of the following events which occur (i) at any time
following execution of a letter of intent or definitive agreement for a Change
in Control transaction and on or before
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consummation of such transaction, or (ii) within 135 days prior to any
consummated Change in Control, or (iii) within 12 months following a Change of
Control, shall be a "Termination Event:"
(a) The termination without Cause of the Employee; or
(b) The resignation of Employee upon no less than two weeks' written
notice to the Company under circumstances constituting Good Reason (as defined
in Section 2.3) to resign.
2.3 "Good Reason" shall mean, without the Employee's written consent,
the occurrence of any of the following circumstances prior to a Change in
Control, in connection with a Change in Control, in anticipation of a Change in
Control, at a time when discussions relating to a Change in Control are taking
place, or within 12 months following a Change in Control:
(a) The Employee is assigned a new position, which entails a
reduction in the nature of Employee's authority with respect to
the operation of the Company's business compared to Employee's
position as in effect on the date of this Agreement or immediately
prior to a Change in Control or Termination Event, whichever
position is greater or more senior;
(b) A reduction in the Employee's annual base salary as in
effect on the date of this Agreement or immediately prior to a
Change in Control or Termination Event, whichever is greater, or
an adverse change in benefits or perquisites other than a change
that is generally applicable to all executive employees;
(c) The Company's requirement that the Employee's site of
principal employment be more than twenty-five miles from the
offices at which the Employee was principally employed on the date
of this Agreement; or
(d) The Employee is assigned duties inconsistent with the
status of the position that the Employee held on the date of this
Agreement or immediately prior to a Change in Control or
Termination Event, whichever is greater, or an adverse alteration
in the nature or status of the Employee's responsibilities or in
the quality or amount of office accommodations or assistance
provided to the Employee from those in effect on the date of this
Agreement, which shall constitute a constructive demotion.
SECTION 3. AMENDMENT OF OPTION AGREEMENTS.
3.1 This Amendment amends each Incentive Stock Option Agreement (the
"Option Agreement or Agreements") listed below covering the grant to Employee of
stock options for the purchase of the number of shares of common stock of the
Company and at the exercise price per share specified below (as granted and in
effect prior to the Company's recent one for 66.38 reverse stock split):
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Date of Grant Under Incentive Number of Shares Underlying Exercise Price Per Share
Stock Option Agreement Option Grant (pre-split) (pre-split)
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See Attached Schedule
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The options ("Options") granted to Employee under the Option Agreements were
granted under the Company's stock option plan as amended, now the 1999 Equity
Incentive Plan (the "Plan").
Each of the Options shall vest and become exercisable as specified in Section 3
of each Option Agreement, as hereby amended.
Employee and the Company each acknowledge that the number of shares underlying
the Options and the applicable exercise price per share are pre-split numbers
and the actual numbers have been adjusted to reflect the Company's recent one
for 66.38 reverse stock split.
3.2 Section 3 of each Option Agreement is amended to provide for
accelerated vesting of some or all of the Options upon the occurrence of a
"Change in Control" or a Termination Event as provided in this Section 3.
3.3 No Termination Event Prior to a Change in Control.
(a) Two Year Accelerated Options With Closing. If there is no
Termination Event prior to an anticipated Change in Control and a Change in
Control is consummated, unvested Options (the "Two Year Accelerated Options With
Closing") (i) which would have vested through the closing of the Change in
Control and (ii) which would have vested during the two years following the
closing of the Change in Control (in each case assuming and calculated as if all
Options would otherwise have vested on a pro rata daily basis) shall accelerate
and become immediately exercisable commencing 15 days prior to a scheduled
closing of a Change in Control; provided, however, that such acceleration (and
any exercise of Options not otherwise vested and exercisable) shall be
conditioned on the closing of the Change in Control.
(b) Options Maintained or Matched; Third Year Accelerated Options. If
there is no Termination Event prior to an anticipated Change in Control and a
Change in Control is consummated and as of the closing either:
(i) AirNet is the surviving company to the Change in Control
transaction, the Business is to be continued and AirNet maintains the Employee's
then outstanding stock options or,
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(ii) AirNet is not the surviving company to the Change in Control
transaction, and
(A) the Business is to be continued by the buyer or
successor; and
(B) the buyer or successor grants options to the Employee
for the purchase of the buyer's or successor's stock with a proportionate number
of shares and exercise price per share and the same vesting schedule as with the
Options; and
(C) the buyer or successor specifically assumes the
potential obligation to accelerate the vesting of options under this Section
3.3(b);
then the following provisions in this Section 3.3(b) apply.
In the event of (i) a Termination Event within 12 months following the Change in
Control; or (ii) in the event the Employee completes 12 months of employment
with the Company or its successor following the Change in Control, then unvested
Options or the equivalent unvested buyer or successor options ("Third Year
Accelerated Options") which would have vested during the third year following
the closing of the Change in Control, (assuming and calculated as if all Options
or the equivalent unvested buyer or successor options would otherwise have
vested on a pro rata daily basis) shall vest and become immediately exercisable
for as long as Employee continues to be employed by the Company or such
successor and for a period of 90 days thereafter.
(c) Options Not Maintained or Matched; Escrow in Lieu of Third Year
Accelerated Options. If there is no Termination Event prior to an anticipated
Change in Control and a Change in Control is consummated and as of the closing
either:
(i) AirNet is the surviving company to the Change in Control
transaction and AirNet does not maintain the Employee's then outstanding stock
options or the Business is to be discontinued; or
(ii) AirNet is not the surviving company to the Change in Control
transaction, and
(A) the Business is to be discontinued; or
(B) the buyer or successor does not grant to Employee
options for the purchase of the buyer's or successor's stock with a
proportionate number of shares and exercise price per share and the same vesting
schedule as with the Options; or
(C) the buyer or successor does not specifically assume the
potential obligation to accelerate the vesting of the Third Year Accelerated
Options under Section 3.3(b) above;
then the following provisions in this Section 3.3(c) apply:
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(1) The Company will place in escrow with a third party
Escrow Agent an amount ("Escrow Amount") of sale proceeds from the
Change in Control transaction equal to the gain the Employee could
have realized if the Third Year Accelerated Options had been
exercised and sold in connection with the Change in Control
transaction.
(2) In the event (A) a Termination Event occurs within
12 months following the Change in Control; or (B) in the event the
Employee completes 12 months of employment with the Company, its
successor or the buyer following the Change in Control, then the
Escrow Amount will be released and paid to the Employee.
(3) In the event the Employee resigns or is terminated
with Cause within 12 months following the Change in Control, the
Escrow Amount will be released and distributed pro rata in the
manner other sale proceeds were distributed in connection with the
Change in Control transaction.
3.4 Termination Event On or Before a Change in Control; Closing
Within 135 Days.
If there is a Termination Event on or before a Change in Control and a Change in
Control is consummated within 135 days of the Termination Event (a) unvested
Options ("Two Year Accelerated Options") (i) which would have vested through the
closing of the Change in Control and (ii) which would have vested during the two
years following the closing of the Change in Control (in each case assuming and
calculated as if all Options would otherwise have vested on a pro rata daily
basis) shall accelerate and become immediately exercisable through the date of
the closing of the Change in Control; and (b) unvested Options (the "Third Year
Accelerated Options With Closing") which would have vested during the third year
following the closing of the Change in Control (assuming and calculated as if
all Options would otherwise have vested on a pro rata daily basis) shall vest
and become immediately exercisable through the date of the closing of the Change
in Control.
3.5 Termination Event Prior to a Change in Control; No Closing
Within 135 Days.
If there is a Termination Event prior to an anticipated Change in Control, but
the anticipated Change in Control is not closed within 135 days following the
Termination Event:
(a) unvested Options (the "Two Year Accelerated Options
Without Closing") (i) which would have vested through a date 135
days after the Termination Event and (ii) which would have vested
during the two years following such 135th day (in each case
assuming and calculated as if all Options would otherwise have
vested on a pro rata daily basis) shall vest and become
immediately exercisable for a period of up to one year, but no
later than the closing of the Change in Control; and
(b) unvested Options (the "Third Year Accelerated
Options Without Closing") which would have vested during the third
year following such 135th day after the Termination Event (in each
case assuming and calculated as if all Options would otherwise
have vested on a pro rata daily basis) shall vest and become
immediately
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exercisable for a period of up to one year, but no later than the
closing of the Change in Control.
4. OPTION AGREEMENTS IN FULL FORCE AND EFFECT.
4.1 Except for the acceleration of the vesting of the Options
upon a Change in Control or upon a Termination Event, as provided for in this
Amendment, all of the terms of the Option Agreements remain in full force and
effect.
5. SEPARATE NONCOMPETE AGREEMENT.
5.1 The parties acknowledge the Employee Noncompete and
Post-Termination Benefits Agreement (the "Noncompete Agreement") dated October
26, 1999 between AirNet and Employee. The provisions of Paragraph 9(a) of the
Noncompete Agreement and the applicable provisions of this Amendment relating to
acceleration of the vesting of options shall be read and interpreted together as
follows in this Section 5.
5.2 Any acceleration of Options, or acceleration of equivalent
options of a buyer or successor, or payment of an Escrow Amount under this
Amendment shall not cause a reduction in the amount of any severance pay payable
to Employee under Paragraph 9(a) of the Noncompete Agreement.
5.3 In the event Employee is entitled to accelerated vesting of
options under the Noncompete Agreement and under this Agreement, Employee will
be entitled to the benefits under each agreement with any inconsistency
interpreted in Employee's favor. For example, if the vesting of options for the
purchase of 10,000 shares is accelerated under the Noncompete Agreement with an
exercise period of 18 months and those same options are vested under Section 3.5
of this Amendment with an exercise period of up to one year but no later than
the closing of an applicable Change in Control, then the exercise period shall
be for a period of up to 18 months, but no later than the closing of the
applicable Change in Control.
5.4 The last sentence of Paragraph 9(d) providing for the
forfeiture of options not vested and exercisable after giving effect to the
provisions of Paragraph 9(d), shall not apply to any such options which could
otherwise be accelerated and become exercisable under the terms of this
Amendment.
6. MISCELLANEOUS.
6.1 This Amendment may be signed and executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one agreement,
6.2 This Agreement is binding on the successors and assigns of
AirNet. AirNet agrees to require any Person who purchases substantially all of
AirNet's assets or is a successor in interest to AirNet in connection with a
Change in Control transaction to assume its obligations under this Agreement.
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IN WITNESS, the Company has caused this Amendment to be executed by its
authorized officer and the Employee has executed this Amendment as of the above
date.
Employee: /s/ R. Xxx Xxxxxxxx, Xx. AirNet Communications Corporation
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Name: R. Xxx Xxxxxxxx, Xx. By: /s/ Xxxxx X. Xxxxx
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Title: Chairman
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R. XXX XXXXXXXX - PRE-SPLIT STOCK OPTIONS
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IMMEDIDATE VESTING FIRST YEAR VESTING
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OPTIONS
DATE GRANTE GRANTED PRICE # OF SHARES PRICE DATE # OF SHARES PRICE DATE
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29-Jul-96 886,250.00 $0.001 886,250.00 $886.25 02/03/97
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29-Jul-96 125,000.00 $0.020 125,000.00 $2,500.00 02/03/97
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29-Jul-96 886,250.00 $0.020 886,250.00 $17,725.00 02/03/97
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29-Jul-96 125,000.00 $0.050 125,000.00 $6,250.00 02/03/97
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29-Jul-96 61,376.70 $0.020 61,376.70 $1,227.53 02/03/97
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29-Jul-96 8,656.80 $0.020 8,656.80 $173.14 02/03/97
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29-Jul-96 61,376.70 $0.020 61,376.70 $1,227.53 05/31/97
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29-Jul-96 8,656.80 $0.020 8,656.80 $173.14 05/31/97
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16-Apr-97 221,250.00 $0.020 55,312.50 $1,106.25 05/31/97 55,312.50 $1,106.25 04/16/98
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16-Apr-97 221,250.00 $0.050 55,312.50 $2,765.63 05/31/97 55,312.50 $2,765.63 04/16/98
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16-Apr-97 1,568,663.00 $0.001 392,165.75 $392.17 05/31/97 392,165.75 $392.17 04/16/98
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16-Apr-97 1,568,663.00 $0.020 392,165.75 $7,843.32 05/31/97 392,165.75 $7,843.32 04/16/98
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16-Apr-97 15,322.53 $0.020 3,830.63 $76.61 05/31/97 3,830.63 $76.61 04/16/98
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16-Apr-97 108,636.80 $0.020 27,159.20 $543.18 05/31/97 27,159.20 $543.18 04/16/98
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16-Apr-97 108,636.80 $0.020 27,159.20 $543.18 05/31/97 27,159.20 $543.18 04/16/98
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16-Apr-97 15,322.53 $0.020 3,830.63 $76.61 05/31/97 3,830.63 $76.61 04/16/98
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7/2/1997* 153,750.00 $0.020 76,875.00 $1,537.50 05/31/97 76,875.00 $1,537.50 07/02/98
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2-Jul-97 153,750.00 $0.050 76,875.00 $3,843.75 05/31/97 76,875.00 $3,843.75 07/02/98
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2-Jul-97 1,090,088.00 $0.001 545,044.00 $545.04 05/31/97 545,044.00 $545.04 07/02/98
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2-Jul-97 1,090,088.00 $0.020 545,044.00 $10,900.88 05/31/97 545,044.00 $10,900.88 07/02/98
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2-Jul-97 10,647.86 $0.020 5,323.93 $106.48 05/31/97 5,323.93 $106.48 07/02/98
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2-Jul-97 75,493.31 $0.020 37,746.66 $754.93 05/31/97 37,746.66 $754.93 07/02/98
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2-Jul-97 10,647.86 $0.020 5,323.93 $106.48 05/31/97 5,323.93 $106.48 07/02/98
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2-Jul-97 75,493.31 $0.020 37,746.66 $754.93 05/31/97 37,746.66 $754.93 07/02/98
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19-Feb-98 1,300,000.00 $0.020 325,000.00 $6,500.00 02/19/99
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19-Jan-99 21,000,000.00 $0.036 5,250,000.00 $189,000.000 01/19/00
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1-Sep-99 2,000,000 $0.130 500,000.00 $65,000.000 09/01/00
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32,950,270.00 4,449,482.34 $62,059.54 8,361,915.34 $292,396.95
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R. XXX XXXXXXXX - PRE-SPLIT STOCK OPTIONS
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SECOND YEAR VESTING THIRD YEAR VESTING FOURTH YEAR VESTING
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# OF SHARES PRICE DATE # OF SHARES PRICE DATE # OF SHARES PRICE DATE
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55,312.50 $1,106.25 04/16/99 55,312.50 $1,106.25 04/16/00
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55,312.50 $2,765.63 04/16/99 55,312.50 $2,765.63 04/16/00
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392,165.75 $392.17 04/16/99 392,165.75 $392.17 04/16/00
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392,165.75 $7,843.32 04/16/99 392,165.75 $7,843.32 04/16/00
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3,830.63 $76.61 04/16/99 3,830.63 $76.61 04/16/00
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27,159.20 $543.18 04/16/99 27,159.20 $543.18 04/16/00
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27,159.20 $543.18 04/16/99 27,159.20 $543.18 04/16/00
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3,830.63 $76.61 04/16/99 3,830.63 $76.61 04/16/00
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325,000.00 $6,500.00 02/19/00 325,000.00 $6,500.00 02/19/01 325,000.00 $6,500.00 02/19/02
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5,250,000.00 $189,000.00 01/19/01 5,250,000.00 $189,000.00 01/19/02 5,250,000.00 $189,000.00 01/19/03
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500,000.00 $65,000.00 09/01/01 500,000.00 $65,000.00 09/01/02 500,000.00 $65,000.00 09/01/03
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7,031,936.17 $273,846.95 7,031,936.17 $273,846.95 6,075,000.00 $260,500.00
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