Monaker Group, Inc. 8-K
Exhibit 10.1
CONVERTIBLE
NOTE
THIS
NOTE AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED,
PLEDGED OR HYPOTHECATED EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT OR AN EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO THE ISSUER THAT SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION OTHERWISE COMPLIES WITH THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
MONAKER
GROUP, INC.
CONVERTIBLE
PROMISSORY NOTE
$9,000,000.00
March
16, 2021
FOR
VALUE RECEIVED, MONAKER GROUP, INC., a Nevada corporation (the “Company”) promises to pay to HOTPLAY
ENTERPRISE LIMITED, or its registered assigns (“Investor”), in lawful money of
the United States of America the principal sum of Nine Million Dollars ($9,000,000.00),
or such lesser amount as shall equal the then outstanding principal amount hereof, together with simple interest from the date
of this Convertible Promissory Note (this “Note”) on the then outstanding principal balance at a rate equal
to ONE PERCENT (1%) per annum, computed on the basis of the actual number of days elapsed and a year of 365 days. All then outstanding
principal, together with any then unpaid and accrued interest and other amounts payable hereunder, shall be converted or forgiven
as set forth herein. This Note may be prepaid in whole or in part, at any time and from time to time, without premium or
penalty.
| 1. | Definitions.
As used in this Note, the following capitalized terms have the following meanings: |
| (a) | “Charter”
shall mean the Company’s articles of incorporation as may be amended or restated
from time to time. |
| (b) | “Common
Stock” shall mean common stock of the Company. |
| (c) | “Conversion
Price” shall mean a conversion price equal to $2.00 per share of Common
Stock. |
| (d) | “Lien”
shall mean, with respect to any property, any security interest, mortgage, pledge,
lien, claim, charge or other encumbrance. |
| (e) | “Obligations”
shall mean and include all loans, advances, debts, liabilities and obligations, howsoever
arising, owed by the Company to Investor of every kind and description, now existing
or hereafter arising under or pursuant to
the terms of this Note, including all interest, fees, charges, expenses, attorneys’
fees and costs and accountants’ fees and costs chargeable to and payable by the
Company hereunder and thereunder, in each case, whether direct or indirect, absolute
or contingent, due or to become due, and whether or not arising after the commencement
of a proceeding under Title 11 of the United
States Code (11 U. S. C.
Section 101 et seq.), as amended from time to time (including post-petition interest)
and whether or not allowed or allowable
as a claim in any such proceeding. |
| (f) | “Person”
shall mean and include an individual, a partnership, a corporation (including a business
trust), a joint stock company, a limited liability company, an unincorporated association,
a joint venture or other entity or a governmental authority. |
| (g) | “Share
Exchange Agreement” shall mean that certain Share Exchange Agreement entered
into by and among the Company, the Investor and various stockholders of the Investor,
as may be amended from time to time. |
| (a) | Interest.
Accrued interest on this Note shall be converted or forgiven as set forth herein. |
| (b) | Automatic
Forgiveness in Certain Circumstances. In the event the Share Exchange Agreement is
terminated pursuant to Section 10.1(a) of the
Share Exchange Agreement; by Investor and Principal Stockholder (as such term
is defined in the Share Exchange Agreement), pursuant to Section 10.1(b) of
the Share Exchange Agreement; or by the Company pursuant to Sections 10.1(c),
10.1(e)(solely in the event that the Company terminates the Share Exchange pursuant to
Section 10.1(e) because Investor (x)
is not able to obtain audited and interim financial statements in the form required by
the Securities and Exchange Commission, or (y) does not supply all of the information
required in order for the Company to file its initial Proxy Statement, by the date which
falls 75 days after the date the Share Exchange Agreement was entered into), 10.1(g),
or 10.1(i), then outstanding principal amount of this Note, plus all accrued and unpaid
interest, shall be forgiven in full and the Company shall have no further obligation
to the Investor hereunder. |
| 3. | Events
of Default. The occurrence of any of the following shall constitute an “Event
of Default” under this Note: |
| (a) | Failure
to Convert. The Company shall fail to convert when due any principal or
interest hereunder into shares of Common Stock of the Company within five (5)
business days after the date required hereunder; |
| (b) | Voluntary
Bankruptcy or Insolvency Proceedings. The Company shall (i) apply for or consent
to the appointment of a receiver, trustee, liquidator or custodian of itself or of all
or a substantial part of its property, (ii) make a general assignment for the benefit
of its or any of its creditors, (iii) be dissolved or liquidated, (iv) commence a voluntary
case or other proceeding seeking liquidation, reorganization or other relief with respect
to itself or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or consent to
any such relief or to the appointment of or taking possession of its property by any
official in an involuntary case or other
proceeding commenced against it, or (v) take any action for the purpose of effecting
any of the foregoing. |
| (c) | Involuntary
Bankruptcy or Insolvency Proceedings. Proceedings for the appointment of a receiver,
trustee, liquidator or custodian of the Company, or of all or a substantial part of the
property thereof, or an involuntary case or other proceedings seeking liquidation, reorganization
or other relief with respect to the Company, if any, or the debts thereof under any bankruptcy,
insolvency or other similar law now or hereafter in effect shall be commenced and 0an
0order for relief entered or such
proceeding shall not be dismissed or discharged within 60 days of commencement. |
| 4. | Rights
of Investor upon Default. Upon the occurrence of any Event of
Default (other than an Event of Default described in Sections 3(b) or
3(c)) and at any time thereafter during the continuance of such Event of Default,
Investor may, by written notice to the Company, declare all outstanding Obligations payable
by the Company hereunder to be immediately due and payable without presentment, demand,
protest or any other notice of any kind, all of which are hereby expressly waived, anything
contained herein to the contrary notwithstanding. Upon the occurrence of any Event of
Default described in Sections 3(b) or 3(c),
immediately and without notice, all outstanding Obligations payable by the Company hereunder
shall automatically become immediately due and payable, without presentment, demand,
protest or any other notice of any kind,
all of which are hereby expressly waived, anything contained herein to the contrary notwithstanding.
In addition to the foregoing remedies, upon the occurrence and during the continuance
of any Event of Default, Investor may, with
the written consent of the Investor, exercise any other right, power or remedy granted
to it by this Note or otherwise permitted to it by law, either by suit in equity or by
action at law, or both. Additionally, upon the occurrence of any Event of Default, the
outstanding principal balance of this Note shall bear interest (“Default Interest”)
while such default exists at the lesser of: (a) eighteen percent (18%) per annum and
(b) the maximum legally permissible rate (the “Default Rate”). |
| (a) | Automatic
Conversion in Certain Circumstances. If
the Share Exchange Agreement is terminated by Investor and/or Principal Stockholder (as
applicable) pursuant to Sections 10.1(d), 10.1(e), 10.1(f), or 10.1(h) of the Share Exchange
Agreement or by the Company pursuant to Sections 10.1(d), or 10.1(e)(except as otherwise
provided in Section 2(b) above, in which case Section 2(b) above shall apply) of the
Share Exchange Agreement, then the then outstanding principal amount of
this Note together with all accrued and unpaid interest under this Note shall
automatically convert into fully paid and nonassessable shares of Common Stock at a price
per share equal to the Conversion Price. The Company shall cause to be
delivered stock certificates to or as
directed by Investor as set forth in this Section 5. |
| (i) | Conversion
Pursuant to Section 5(a). If this Note is to
be automatically converted pursuant to Section 5(a), written notice shall 0be
0delivered to Investor at the address last shown on the records of the Company
for Investor or given by Investor to the Company for the purpose of notice, notifying
Investor 0of 0the general terms of the conversion
to be effected, specifying the Conversion Price, the principal amount of the Note to
be converted, together with all accrued and unpaid interest and the date on which such
conversion is expected to occur and calling upon Investor to surrender to the Company,
in the manner and at the place designated, this Note. The Company shall, as soon as practicable
thereafter, issue and deliver to Investor a certificate or certificates for the number
of 0shares to which Investor shall be entitled
upon such conversion, or shall otherwise issue such shares in book-entry form and provide
Investor confirmation thereof. |
| (ii) | Fractional
Shares; Interest; Effect of Conversion.
No fractional shares shall be issued upon conversion of this Note. In lieu 0of
0the Company issuing any fractional shares to Investor upon the conversion of this
Note, the Company shall round up any fractional share of
0Common Stock which would otherwise be due to the Investor upon conversion hereof.
Upon conversion of this Note in full and the payment of the amounts specified in this
paragraph, the Company shall be forever released from all its Obligations and liabilities
under this Note and this Note shall be deemed of no further force or effect, whether
or not the original of this Note has been delivered to the Company for cancellation. |
| (c) | Cap
on Shares of Common Stock. Notwithstanding anything herein to the contrary, the maximum
number of shares of Common Stock to be issued
in connection with the conversion of this Note (and upon conversion or exercise of any
other securities required to be aggregated with the conversion of this Note pursuant
to the applicable rules and requirements of the NASDAQ Capital Market), or otherwise
as provided herein, shall not (i) exceed 19.9% of the outstanding shares of Common Stock
on the date of this Note, (ii) exceed 19.9% of
the combined voting power of the then outstanding voting securities of the Company
on the date of this Note, in each of subsections
(i) and (ii) before the issuance of the Common Stock hereunder in connection with any
conversion, or (iii) otherwise exceed such number of shares of Common Stock that would
violate applicable listing rules of the
NASDAQ Capital Market in the event the Company’s stockholders do not approve the
issuance of the Common Stock issuable in connection with a conversion of this Note (and
upon conversion or exercise of any other securities required to be aggregated with the
conversion of this Note pursuant to the applicable rules and requirements of the NASDAQ
Capital Market), or otherwise as provided
herein. |
| 6. | Representations
and Warranties of the Company. The Company represents and warrants to
the Investor that: |
| (a) | Due
Incorporation, Qualification, etc. The Company (i) is a corporation duly organized,
validly existing and in good standing under the laws of the State of Nevada (ii)
has the power and authority to own, lease and operate its properties and carry on itsbusiness
as now conducted; and (iii) is duly qualified, licensed to do business and in good standing as a foreign corporation in each jurisdiction
where the failure to be so qualified or licensed could reasonably be expected to have a material adverse effect on the Company.
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| (b) | Authority.
The execution, delivery and performance by the Company of the Note and the consummation
of the transactions contemplated thereby (i) are within the power of the Company and
(ii) have been duly authorized by all necessary
actions on the part of the Company. |
| (c) | Enforceability.
The Note has been, or will be, duly
executed and delivered by the Company and constitutes, or will constitute, a legal, valid
and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as limited by bankruptcy, insolvency
or other laws of general application relating to or affecting the enforcement of creditors’
rights generally and general principles of equity. |
| (d) | Non-Contravention.
The execution and delivery by the Company of the Note and the performance and consummation
of the transactions contemplated hereby do not and will not (i) violate the Charter or
bylaws of the Company, or any material judgment, order, writ, decree, statute,
rule or regulation applicable to the Company;
or (ii) result in the creation or
imposition of any Lien upon any property, asset or revenue of the Company or the
suspension, revocation, impairment, forfeiture, or
nonrenewal of any material permit, license, authorization or
approval applicable to the Company, its business or operations, or any of its
assets or properties. |
| (e) | Approvals.
No consent, approval, order or authorization
of, or registration, declaration or filing
with, any governmental authority or other
Person (including, without limitation, the shareholders of any Person) is required in
connection with the execution and delivery of the
Notes by the Company and the performance and consummation of
the transactions contemplated thereby, other than such as have been obtained and
remain in full force and effect and other than such qualifications or filings under applicable
securities laws as may be required in connection
with the transactions contemplated by this Note. |
| 7. | Representations
and Warranties of Investor. Investor represents and warrants to the Company
upon the acquisition of the Note as follows: |
| (a) | Binding
Obligation. Investor has full legal capacity, power and authority to execute and
deliver this Note and to perform its obligations hereunder. This Note constitutes valid
and binding obligations of Investor, enforceable in accordance with its terms, except
as limited by bankruptcy, insolvency or other laws of general application relating to
or affecting the enforcement of
creditors’ rights generally and general principles of equity. |
| (b) | Securities
Law Compliance. Investor has been advised that the Note and the underlying
securities have not been registered under the Act and any applicable state securities
laws and, therefore, cannot be resold unless it or they are registered under the Act
and applicable state securities laws or unless an exemption from such registration requirements
is available. Investor is aware that the Company is under no obligation to affect any
such registration with respect to the Note or the underlying securities or to file
for or comply with any exemption from registration. Investor has not been formed solely for the purpose of making this investment
and is purchasing the Note for its own account for investment, not as a nominee or agent, and not with a view to, or for resale
in connection with, the distribution thereof, and Investor has no present intention of selling,
granting any participation in, or otherwise distributing the same. Investor has such knowledge and experience in financial and
business matters that Investor is capable of evaluating the merits and risks of such investment, is able to incur a complete loss
of such investment without impairing Investor’s financial condition and is able to bear the economic risk of such investment
for an indefinite period of time. Investor is an “accredited investor” as such term is defined in Rule 501 of Regulation
D under the Act and shall submit to the Company such further assurances of such status as may be reasonably requested by the Company.
The residency of Investor (or, in the case of a partnership or corporation, such entity’s principal place of business) is
correctly set forth beneath Investor’s name on the signature page hereto. |
| (c) | Access
to Information. Investor acknowledges that the Company has given Investor access
to the corporate records and accounts of the Company and to all information in its possession
relating to the Company, has made its officers and representatives available for interview
by Investor, and has furnished Investor with all documents and other information required
for Investor to make an informed decision
with respect to the purchase of the Note. |
| (d) | Tax
Advisors. Investor has reviewed with its own tax advisors the U.S. federal, state
and local and non-U.S. tax consequences of this investment and the transactions contemplated
by this Note. With respect to such matters, Investor relies solely on any such advisors
and not on any statements or representations of the Company or any of its agents, written
or oral. Investor understands that it (and not the Company) shall be responsible for
its own tax liability that may arise as a result of this investment and the transactions
contemplated by this Note. |
| (e) | Purchase
Price. Investor shall have delivered to the Company the principal sum of One
Million Dollars ($1,000,000.00). |
| (f) | No
“Bad Actor” Disqualification Events. Neither (i) the Investor,
(ii) any of its directors, executive officers, general partners or managing members,
nor (iii) any beneficial owner of any of the Company’s voting equity securities
(in accordance with Rule 506(d) of the Act)
held by the Investor if such beneficial owner is deemed to own 20% or more of
the Company’s outstanding voting securities (calculated on the basis of
voting power) is subject to any disqualifications described in Rule 506(d)(1)(i) through (viii)
of the Act (“Disqualification Events”), except for Disqualification
Events covered by Rule 506(d)(2)(ii) or (iii) or (d)(3) under the Act and disclosed
reasonably in advance of the date hereof in writing in reasonable detail to the Company. |
| (a) | Waivers
and Amendments. Any provision of this Note may be amended, waived or modified
only with the written consent of the Company and of the Investor. |
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(b) | Governing
Law. This Note and all actions arising out of or in connection herewith or therewith
shall be governed by and construed in accordance with the laws of the State of Florida without regard to the conflicts of law
provisions of the State of Florida or of any other state. |
| (c) | Survival.
The representations, warranties, covenants and agreements made herein shall survive
the execution and delivery of this Note. |
| (d) | Jurisdiction
and Venue. Investor and the Company irrevocably consent to the exclusive jurisdiction
of, and venue in, the state courts in Broward County in the State of Florida, in connection
with any matter based upon or arising out of this
Note or the matters contemplated herein
or therein, and agree that process may be served upon them in any manner authorized by
the laws of the State of Florida for such Persons. |
| (e) | Waiver
of Jury Trial; Judicial Reference. Investor hereby agrees and the Company hereby
agrees to waive their respective rights to a jury trial of any claim or cause of action
based upon or arising out of this Note. |
| (f) | Successors
and Assigns. Subject to the restrictions on transfer set forth herein, the rights
and obligations of the Company and Investor
under this Note shall be binding upon and benefit the successors, assigns, heirs, administrators
and transferees of the parties. |
| (g) | Transfer
and Replacement of this Note. The Company
will keep, at its principal executive office, books for the recordation of
the Investors and recordation of transfer of this Note. Prior to presentation
of this Note for transfer, the Company shall treat the Person in whose name this Note
is recorded as the owner and holder of this Note for all purposes whatsoever, whether
or not this Note shall be overdue, and the Company shall not be affected by notice to
the contrary. Subject to any restrictions
on or conditions to transfer set forth in this Note, the holder of
this Note, at its option, may in person or
by duly authorized attorney surrender the same for exchange at the Company’s
chief executive office, and promptly thereafter and at the Company’s expense, except
as provided below, receive in exchange therefor this Note in the principal requested
by such holder, dated the date to which interest shall have been paid on this Note or,
if no interest shall have yet been so paid,
dated the date of this Note and recorded in the name of such Person or Persons as shall
have been designated in writing by such holder or its attorney for the same principal
amount as the then unpaid principal amount of this Note. Upon receipt by the Company
of evidence reasonably satisfactory to it
of the ownership of and the loss, theft, destruction or mutilation of this Note and (a)
in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it; or (b) in
the case of mutilation, upon surrender thereof, the Company, at its expense, will execute
and deliver in lieu thereof a new Note executed in the same manner as this Note, in the
same principal amount as the unpaid principal amount of this Note and dated the date
to which interest shall have been paid on this Note or, if no interest shall have yet
been so paid, dated the date of this Note. |
| (h) | Transfer
of this Note or Securities Issuable on Conversion Thereof. Subject to the proviso
in the following sentence, neither this Note nor the securities issued upon conversion
hereof may be transferred by Investor without the prior written consent of the Company.
Investor shall have no further restrictions on transferability of
the underlying securities following the earlier of: (a) consummation of the Share
Exchange Agreement and (b) the date that is six months from the date of
this Note, provided that all
transfers of this note and/or any securities underlying this Note shall comply with applicable
law. |
| (i) | Assignment
by the Company. The rights, interests or obligations of the Company hereunder may
not be assigned, by operation of law or
otherwise, in whole or in part, by the Company without the prior written consent of the
Investor. |
| (j) | Entire
Agreement. This Note constitutes and contains the entire agreement among the Company
and Investor and supersedes any and all prior agreements, negotiations, correspondence,
understandings and communications among the parties, whether written or oral, respecting
the subject matter hereof. |
| (k) | Notices.
All notices, requests, demands, consents, instructions or other communications required
or permitted hereunder shall be in writing and faxed, mailed, emailed or delivered to
each party as follows: (i) if to Investor, at Investor’s address, facsimile number
or electronic mail address set forth beneath Investor’s name on the signature page
hereto, or at such other address, facsimile number or electronic mail address as Investor
shall have furnished the Company in writing, or (ii) if to the Company, at the Company’s
address, facsimile number or electronic mail address set forth beneath the Company’s
name on the signature page hereto, or at such other address, facsimile number or electronic
mail address as the Company shall have furnished to Investor in writing. All such notices
and communications will be deemed effectively given the earlier of (i) when received,
(ii) when delivered personally, (iii) one business day after being deposited with an
overnight courier service of recognized standing, (iv) four days after being deposited
in the U.S. mail, first class with postage prepaid, (v) if sent via facsimile, upon confirmation
of facsimile transfer or (vi) if sent via electronic mail, when directed to the relevant
electronic mail address, if sent during normal business hours of the recipient, or if
not sent during normal business hours of the recipient, then on the recipient’s
next business day. |
| (l) | Expenses.
The Company and Investor shall be responsible for their own legal fees and other
expenses incurred in connection with the negotiation, drafting and execution of this
Note. |
| (m) | Severability
of this Note. If any provision of this Note shall be judicially determined to be
invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby. |
| (n) | Usury.
If any interest is paid on this Note that is deemed to be in excess of the then legal
maximum rate, then that portion of the interest
payment representing an amount in excess of the then legal maximum rate shall be deemed
a payment of principal and applied against the principal of this Note. |
| (o) | Waivers.
The Company hereby waives notice of default, presentment or demand for payment, protest
or notice of nonpayment or dishonor and all other notices or demands relative to this
instrument. |
| (p) | Review
and Knowledge. Each party herein expressly represents and warrants to all other parties
hereto that (a) before executing this Note, said party has fully informed itself of the
terms, contents, conditions and effects of this Note; (b) said party has relied solely
and completely upon its own judgment in executing this Note; (c) said party has had
the opportunity to seek and has obtained the advice of its own legal, tax and business advisors before executing this Note; (d)
said party has acted voluntarily and of its own free will in executing this Note; and (e) this Note is the result of arm’s
length negotiations conducted by and among the parties and their respective counsel. |
| (q) | Counterparts.
This Note and any signed agreement or instrument entered into in connection with
this Note, may be executed in one or more counterparts, all of which shall constitute
one and the same instrument. Any such counterpart, to the extent delivered by means of
a facsimile machine or by .pdf, .tif, .gif, .jpeg or similar attachment to electronic
mail (any such delivery, an “Electronic Delivery”) shall be treated
in all manner and respects as an original executed counterpart and shall be considered
to have the same binding legal effect as if it were the original signed version thereof
delivered in person. No party shall raise the use of Electronic Delivery to deliver a
signature or the fact that any signature or agreement or
instrument was transmitted or communicated through the use of
Electronic Delivery as a defense to the formation of a contract, and each such
party forever waives any such defense, except to the extent such defense relates to lack
of authenticity. |
(Signature
Page Follows)
The
parties have caused this Note to be duly executed and delivered as of the date first written above.
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COMPANY:
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MONAKER GROUP, INC.
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a
Nevada corporation |
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By: |
/s/ Xxxx Xxxxx |
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Name: |
Xxxx Xxxxx |
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Title: |
CEO |
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Address: |
000 Xxxxxxxxx Xxxx Xxxxx, #000 |
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Weston,
Florida 33331 |
The
parties have caused this Note to be duly executed and delivered as of the date first written above.
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Investor: |
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HOTPLAY
ENTERPRISE LIMITED
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By: |
/s/ Xxxxxxxx Xxxxxxxxxxxxxxxxxx & Xxxxx Xxxxxxxxxxxx |
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(Signature)
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Name: |
Xxxxxxxx Xxxxxxxxxxxxxxxxxx & Xxxxx Xxxxxxxxxxxx |
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(Print name of Investor) |
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Title: |
Authorized Directors |
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(If signing on behalf of an entity) |
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Address: |
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