SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of June 1st ,
2006, by and among Xxxxxx Xxxx and Xxxxx Xxxxxxx (the "Sellers") and the
individuals and entities listed on Exhibit A hereto as Purchasers (the
"Purchasers"). In consideration of the mutual promises and covenants contained
in this Agreement, the parties hereto agree as follows:
1. Sale of Shares.
1.1 Sale of Shares. Subject to the terms and conditions of this Agreement, at
the Closing (as defined in Section 2.1) the Sellers will sell to each of the
Purchasers, and each of the Purchasers will purchase, the number of Arch
Management Services inc. (the "Company") shares of common stock (the "Common
Stock"), set forth opposite such Purchaser's name on Exhibit A, for the purchase
price per share indicated on such Exhibit A (the "Purchase Price"). The shares
of Common Stock sold under this Agreement are referred to as the "Shares."
2. Closing.
2.1 The Closing. The closing (the "Closing") of the sale and purchase of the
Shares under this Agreement shall take place at the offices of the Company or
via electronic exchange of documents and faxed signatures which shall be deemed
to be effective as of the date of this Agreement (the "Closing Date"). At the
Closing:
(i) The Company shall order and cause to be delivered to each of the
Purchasers a certificate for the number of Shares set forth opposite such
Purchaser's name on Exhibit A, registered in the name of such Purchaser; and
(ii) Each Purchaser shall pay by wire transfer of immediately
available funds or other method acceptable to the Sellers, the aggregate
Purchase Price for the number of Shares such purchaser is purchasing hereunder.
3. Representations and Warranties of the Sellers. The Sellers hereby represents
and warrants to each Purchaser that the statements contained in this Section 3
are complete and accurate as of the date of this Agreement and at Closing.
3.1 Organization and Standing. The Company is a corporation duly organized,
validly existing and in good standing under the laws of Nevada and has full
corporate power and authority to conduct its business as presently conducted and
as proposed to be conducted by it and to enter into and perform this Agreement
and to carry out the transactions contemplated by this Agreement. The Company
has at all times complied with all provisions of its Certificate of
Incorporation and By-laws and is not in default under, or in violation of, any
such provision.
Securities Purchase Agreement
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3.2 Authority for Agreement; No Conflict. The execution, delivery and
performance by the Sellers of this Agreement, and the consummation by the
Sellers of the transactions contemplated hereby, have been duly authorized by
all necessary corporate action. This Agreement has been duly executed and
delivered by the Sellers and constitutes valid and binding obligations of the
Sellers enforceable in accordance with its terms, subject as to enforcement of
remedies to applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting generally the enforcement of creditors' rights and
subject to a court's discretionary authority with respect to the granting of a
decree ordering specific performance or other equitable remedies. The execution
and delivery of this Agreement, the consummation of the transactions
contemplated hereby and the compliance with its provisions will not (a) conflict
with or violate any provision of the Certificate of Incorporation or By-laws of
the Company, (b) require any filing with, or any permit, order, authorization,
consent or approval of, any United States court, arbitrational tribunal,
administrative agency or commission or other United States governmental or
regulatory authority or agency (each of the foregoing is hereafter referred to
as a "Governmental Entity").
3.3 Governmental Consents. Based in part on the representations and warranties
of the Purchasers set forth in Section 4 of this Agreement, no consent,
approval, order or authorization of, or registration, qualification,
designation, declaration or filing with, any Governmental Entity is required on
the part of the Company in connection with the offer, issuance, sale and
delivery of the Shares or the other transactions contemplated by this Agreement
(other than filings required under the Exchange Act). In reliance on the
representations and warranties made by each of the Purchasers in Section 4 of
this Agreement, the offer and sale of the Shares to each of the Purchasers will
be in compliance with applicable United States federal and state securities
laws.
4. Representations and Warranties of the Purchasers. Each Purchaser hereby
represents and warrants to the Company that the statements contained in this
Section 4 are complete and accurate as of the date of this Agreement and at
Closing.
4.1 Authorization; Enforceability.
Such Purchaser has the full power and authority to enter into this Agreement and
to perform his, her or its obligations thereunder. If such Purchaser is an
entity, such Purchaser has taken all corporate, partnership, limited liability,
trust or similar action necessary to authorize its execution and delivery of
this Agreement. This Agreement have been duly executed and delivered by such
Purchaser and, assuming the due authorization, execution, and delivery by the
Company and the other Purchasers, constitutes his, her or its valid and binding
obligation, enforceable in accordance with the terms of this Agreement, subject
to applicable bankruptcy, reorganization, insolvency, and similar laws affecting
creditors' rights generally and to general principles of equity.
4.2 No Conflict.
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The execution and delivery of this Agreement by such Purchaser and the
performance of his, her or its obligations thereunder will not (i) if such
Purchaser is an entity, violate or conflict with any provision of its
organizational documents, (ii) violate, conflict with, or give rise to any right
of termination, cancellation, or acceleration under any material agreement or
instrument to which such Purchaser is a party, or by which he, it, or any of
his, her or its assets is bound, (iii) result in the imposition of any lien on
any Shares held by such Purchaser, (iv) violate or conflict with any applicable
laws, or (v) require any consent, approval or other action of, notice to, or
filing with any entity or person (governmental or private) other than the filing
of a Form 3 or a Schedule 13D if necessary in accordance with the Rules and
Regulations promulgated under the Exchange Act.
4.3 Investment Representations and Warranties. Each Purchaser hereby represents
and warrants to the Company the following:
(a) Such Purchaser will acquire the Shares to be purchased by him, her or
it for his, her or its own account, for investment and not with a view to the
distribution thereof, nor with any present intention of distributing the same.
(b) Such Purchaser understands that the Shares to be purchased by him, her
or it: (i) will not be registered under the Securities Act or the securities
laws of any state, by reason of their issuance in a transaction exempt from the
registration or qualification requirements of the Securities Act (defined below)
or such securities laws, the availability of which depends upon, among other
things, the bona fide nature of the investment intent and the accuracy of such
Purchaser's representations as expressed herein, and (ii) must be held
indefinitely unless a subsequent disposition thereof is registered under the
Securities Act or is exempt from registration.
(c) The Purchaser is an "accredited investor," as defined in Rule 501 (the
provisions of which are known to such Purchaser) promulgated under the United
States Securities Act of 1933, as amended (the "Securities Act").
(d) The Purchaser understands the Company has made no assurance that a
public market for the Shares or any other class or series of Company capital
stock will exist in the future.
(e) Based on such Purchaser's knowledge, experience and skill in
evaluating and investing in securities derived from actual participation in
financial, investment and business matters, such Purchaser is capable of
evaluating the merits and risks of an investment in the Shares and the
suitability of the Shares as an investment for such Purchaser.
(f) The Purchaser has had an opportunity to discuss the business,
management and financial affairs of the Company and the terms and conditions of
an investment in the Shares with, and has had access to, the management of the
Company.
(g) The Purchaser is aware that no guarantees have been or can be made
respecting the future value, if any, of the Shares or the profitability or
success of the business of the Company.
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4.4 Brokers and Finders. No person or entity acting on behalf or under the
authority of such Purchaser is or will be entitled to any broker's, finder's, or
similar fee or commission in connection with the transactions contemplated
hereby.
4.5 Regulation S Representations.
(a) The Purchaser acknowledges and agrees that the Company shall, and
shall instruct its transfer agent to, refuse to register any transfer of the
Common Stock issued hereunder not made in accordance with the provisions of
Regulation S, pursuant to registration under Securities Act or pursuant to an
available exemption from registration.
(b) The Purchaser understands and acknowledges that the Shares have not
been registered under the Securities Act and are being offered in reliance upon
the exemptions provided in Regulation S of the Securities Act and the Rules and
Regulations adopted thereunder. Accordingly, the Shares may not be offered or
sold in the U.S. or to U.S. persons (as such term is used in Regulation S)
unless the securities are registered under the Securities Act, or an exemption
for the regulation requirements is available. Furthermore, hedging transactions
involving the Shares may not be conducted unless in compliance with the
Securities Act. The Purchaser makes the following representations and warranties
to the Company with the intent that the same may be relied upon in determining
the suitability of the Purchaser as a purchaser of securities:
(c) The Purchaser did not receive the offer for the Shares (the "Offer"),
nor was he, she or it solicited to purchase the Shares, in the United States;
that this Agreement has not been executed or delivered by the Purchaser in the
United States, and neither the Purchaser nor any person acting on behalf of the
Purchaser has engaged, directly or indirectly, in any negotiations with respect
to the Offer or this Agreement in the United States;
(d) The Purchaser is not a U.S. person (i.e., (i) not an individual
resident in the U.S.; (ii) a partnership or corporation organized or
incorporated in the United States; (iii) an estate of which any executor or
administrator is a U.S. person; (iv) a trust of which any trustee is a U.S.
person; (v) a dealer holding an account for a customer; (vi) an agency or branch
of a foreign entity located in the U.S.; or (vii) a partnership or corporation
(A) organized or incorporated under the laws of any foreign jurisdiction and (B)
formed by a U.S. person principally for the purpose of investing in securities
not registered under the Securities Act and is not acquiring the Shares for the
account or benefit of a U.S. person;
(e) The Purchaser is not purchasing the Shares as a result of or
subsequent to (i) any advertisement, article, notice or other communication
published in any newspaper, magazine or other publication or broadcast over
television or radio in the U.S.; (ii) any promotional seminar or meeting in the
U.S., or (iii) any solicitation by a person not previously known to him or it in
connection with investments in securities generally; and
(f) The Shares have not been registered under the Securities Act or under
any state securities laws and that the Purchaser agrees to transfer his, her or
its Shares in the U.S. or to, or for the account or benefit of, U.S. persons
only if (i) the Shares are duly registered under the Securities Act and all
applicable state securities laws; or (ii) there is an exemption from
registration under the Securities Act, including any exemption from the
registration requirements of the Securities Act which may be available pursuant
to Rule 903 or Rule 904 under Regulation S, and all applicable state securities
laws; that prior to any such transfer the Company may require, as a condition
affecting a transfer of the Shares, an opinion of counsel in form and substance
satisfactory to the Company as to the registration or exemption therefrom under
the Securities Act and applicable state securities laws; that the Company is
under no obligation to register the Shares under the Securities Act or any
applicable state securities laws on its or his or her behalf or to assist it or
him or her in complying with any exemption from such registration;
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(g) Except as distributed by Purchaser in accordance with the requirements
and provisions of Rule 903 of Regulation S (i.e., the Shares may be allocated
and distributed to Purchaser's managed accounts so long as such distribution is
made by Purchaser in the manner specified by Rule 903), the Shares will be
acquired solely for the account of the Purchaser, for investment purposes only,
and not with a view to, or for sale in connection with, any distribution thereof
and with no present intention of distributing or reselling any part of the
Shares.
(h) The Purchaser agrees not to sell, pledge, transfer, dispose of, or
otherwise deal with or engage in hedging transactions involving, his or her
Shares or any portion thereof except as otherwise permitted herein, unless and
until counsel for the Company shall have determined that the intended
disposition or action is permissible and does not violate the Securities Act or
any applicable state securities laws, or the rules and regulations thereunder.
(i) The Purchasers jurisdiction of residence as set forth on the signature
page hereto is true and correct.
(j) The Purchaser hereby states that he/she is acquainted with the
requirements of Section 13(d) of the Securities Exchange Act of 1934 and the
rules and regulations issued thereunder. The Purchaser understands that, as a
result of its acquisition of Shares, and in order to comply with Section 13(d)
and the rules and regulations issued thereunder, Purchaser may be required to
file a Schedule 13D and hereby agrees to make such filing if so required.
5. Transfer of Shares.
5.1 Restricted Shares. "Restricted Shares" means (a) the Shares and (b) any
other shares of capital stock of the Company issued in respect of such shares
(as a result of stock splits, stock dividends, reclassifications,
recapitalizations or similar events); provided, however, that shares of Common
Stock which are Restricted Shares shall cease to be Restricted Shares (x) upon
any sale pursuant to a registration statement under the Securities Act, Section
4(1) of the Securities Act or Rule 144 under the Securities Act or (y) at such
time as they become eligible for sale under Rule 144(k) under the Securities
Act.
5.2 Transfers. Restricted Shares shall not be sold or transferred unless either
(i) they first shall have been registered under the Securities Act, or (ii) such
sale or transfer is exempt from the registration requirements of the Securities
Act.
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Securities Purchase Agreement
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5.3 Legend. Each certificate representing Restricted Shares shall bear a legend
substantially in the following form:
THE SECURITY OR SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD TO ANY
PERSON EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. THE HOLDER HEREOF
AGREES THAT: (1) IT WILL NOT RESELL OR OTHERWISE TRANSFER THE SHARES
EVIDENCED HEREBY EXCEPT (A) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE
903 OR RULE 904 OF REGULATION S OR (B) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE)
OR ANOTHER THEN AVAILABLE EXEMPTION UNDER THE SECURITIES ACT AND STATE
SECURITIES LAWS OR, (C) IN A TRANSACTION THAT DOES NOT REQUIRE
REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE LAWS, OR (D)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME
OF SUCH TRANSFER); (2) PRIOR TO ANY SUCH TRANSFER, IT WILL FURNISH TO ARCH
MANAGEMENT SERVICES INC. THE TRANSFER AGENT FOR THE COMMON STOCK SUCH
CERTIFICATIONS, LEGAL OPINIONS, OR OTHER INFORMATION AS ARCH MANAGEMENT
SERVICES INC. OR SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM
THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT OR STATE SECURITIES LAWS; AND (3) IT WILL DELIVER TO EACH
PERSON TO WHOM THE COMMON STOCK EVIDENCED HEREBY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. FURTHERMORE, HEDGING
TRANSACTIONS INVOLVING THE SECURITIES EVIDENCED HEREBY MAY NOT BE
CONDUCTED UNLESS IN COMPLIANCE WITH THE ACT.
The foregoing legend shall be removed from the certificates representing any
Restricted Shares, at the request of the holder thereof, at such time as they
become eligible for resale pursuant to Rule 144(k) under the Securities Act.
6. Miscellaneous.
6.1 Exchange Act Filings. As soon as practicable after the Closing, the Company
will make all finings with the U.S. Securities and Exchange Commission as
required under the Exchange Act in connection with the transactions contemplated
by this Agreement and the Purchasers hereby consent to all disclosures required
thereunder in respect of such filings as determined by the Company in its sole
discretion.
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Securities Purchase Agreement
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6.2 Successors and Assigns. This Agreement, and the rights and obligations of
each Purchaser hereunder, may be assigned by such Purchaser to (a) any person or
entity to which Shares are transferred by such Purchaser, or (b) to any to any
affiliate, partner, member, stockholder or subsidiary of such Purchaser, and, in
each case, such transferee shall be deemed a "Purchaser" for purposes of this
Agreement; provided that each such assignment of rights shall be contingent upon
the transferee providing a written instrument to the Company notifying the
Company of such transfer and assignment and agreeing in writing to be bound by
the terms of this Agreement. The Company may not assign its rights under this
Agreement.
6.3 Severability; Survival. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement. The representations and warranties of the Company
and the Purchasers shall survive the execution and delivery hereof and the
Closing.
6.4 Specific Performance. In addition to any and all other remedies that may be
available at law in the event of any breach of this Agreement, each Purchaser
shall be entitled to specific performance of the agreements and obligations of
the Company hereunder and to such other injunctive or other equitable relief as
may be granted by a court of competent jurisdiction.
6.5 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York (without regard to conflicts
of laws provisions).
6.6 Notices. All notices, requests, consents and other communications under this
Agreement shall be in writing and shall be deemed delivered (a) three business
days after being sent by registered or certified mail, return receipt requested,
postage prepaid or (b) one business day after being sent via a reputable
nationwide overnight courier service guaranteeing next business day delivery, in
each case to the intended recipient as set forth below:
If to the Company, at the address of record as on file with the U.S.
Securities and Exchange Commission or at such other address as may have
been furnished in writing by the Company to the other parties hereto; or
If to a Purchaser, at the address set forth below or at such other address
as may have been furnished in writing by such Purchaser to the other
parties hereto.
Any party may give any notice, request, consent or other communication under
this Agreement using any other means (including, without limitation, personal
delivery, messenger service, telecopy, first class mail or electronic mail), but
no such notice, request, consent or other communication shall be deemed to have
been duly given unless and until it is actually received by the party for whom
it is intended. Any party may change the address to which notices, requests,
consents or other communications hereunder are to be delivered by giving the
other parties notice in the manner set forth in this Section.
6.7 Complete Agreement. This Agreement (including its Exhibits) constitutes the
entire agreement and understanding of the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements and understandings
relating to such subject matter.
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Securities Purchase Agreement
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6.8 Third Party Beneficiaries. This Agreement is intended for the benefit of the
parties hereto and their respective permitted successors and assigns and is not
for the benefit of, nor may any provision hereof be enforced by, any other
person.
6.9 Amendments and Waivers. This Agreement may be amended or terminated and the
observance of any term of this Agreement may be waived with respect to all
parties to this Agreement (either generally or in a particular instance and
either retroactively or prospectively), with the written consent of the Company
and the holders of a majority of the Shares then held by all Purchasers. The
Company shall give prompt written notice of any amendment or termination hereof
or waiver hereunder to any party hereto that did not consent in writing to such
amendment, termination or waiver. Any amendment, termination or waiver effected
in accordance with this Section 6.9 shall be binding on all parties hereto, even
if they do not execute such consent; provided, that any amendment, termination
or waiver of any provision of this Agreement that does not affect all Purchasers
in the same way shall require the prior written consent of all Purchasers who
would be subject to such disparate treatment. No waivers of or exceptions to any
term, condition or provision of this Agreement, in any one or more instances,
shall be deemed to be, or construed as, a further or continuing waiver of any
such term, condition or provision.
6.10 Fees and Expenses. Each party shall pay the fees and expenses of its
advisors, counsel, accountants and other experts, if any, and all other
expenses, incurred by such party incident to the negotiation, preparation,
execution, delivery and performance of this Agreement.
6.11 Validity of Representations. The Company offer and sale of the Shares has
been conditioned on exemptions from registration based upon the validity of the
representations, warranties and covenants of each Purchaser. Each Purchaser
severally but not jointly agrees to indemnify and hold harmless the Company and
its directors, officers, affiliates, agents, successors and assigns from and
against any and all losses, liabilities, deficiencies, costs, damages and
expenses (including, without limitation, reasonable attorneys' fees, charges and
disbursements) incurred by the Company as result of any inaccuracy in or breach
of the representations, warranties or covenants made by such Purchaser herein.
The agreement hereby with each Purchaser is deemed to be a separate agreement,
and the sale of Shares to each such Purchaser is a separate sale.
6.12 Section Headings and References; Construction. The section headings are for
the convenience of the parties and in no way alter, modify, amend, limit or
restrict the contractual obligations of the parties. Any reference in this
agreement to a particular section or subsection shall refer to a section or
subsection of this Agreement, unless specified otherwise. Whenever the context
may require, any pronouns used in this Agreement shall include the corresponding
masculine, feminine or neuter forms, and the singular form of nouns and pronouns
shall include the plural, and vice versa.
6.13 Counterparts; Facsimile Signatures. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, and all
of which shall constitute one and the same document. This Agreement may be
executed by facsimile signatures.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized representative of the date first above
written.
SELLERS:
By: /s/ Xxxxx Xxxxxxx By: /s/ Xxxxxx Xxxx
----------------------------------- -------------------------------
Xxxxx Xxxxxxx Xxxxxx Xxxx
PURCHASERS:
CAPEX INVESTMENTS LIMITED FIDUCIE XXXXXXXXX
By: /s/ Xxxxxx Xxxxxx By: /s/ Xxx Xxxxxxxxx
----------------------------------- -------------------------------
Xxxxxx Xxxxxx, President Xxx Xxxxxxxxx, Trustee
SUN RICH INVESTMENTS LIMITED
By: /s/ Xxxxx Xxx Xxxxx Xxxx
-----------------------------------
Xxxxx Xxx Xxxxx Xxxx, President
By: /s/ Xxxxxx Xxxxxxx
-----------------------------------
Xxxxxx Xxxxxxx
By: /s/ Lai Xxxx Xxxxxx
-----------------------------------
Lai Xxxx Xxxxxx
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EXHIBIT A
Price Per Share: 0.01667
------------------------------ ------------------------- ------------------------ --------------------------------------
BUYER SHARES PAID ADDRESS
------------------------------ ------------------------- ------------------------ --------------------------------------
Fiducie Xxxxxxxxx 600,000 10,002.00 USD 000 Xxxx
Xxxxx-Xxxxxxx, Xxxxxx
Xxxxxx
X0X 0X0
------------------------------ ------------------------- ------------------------ --------------------------------------
40 Saturn
Xxxxxx Xxxxxxx 300,000 5,001.00 USD Xxxxxxx-Xxx-Xxxxxxx, Xxxxxx, Xxxxxx
X0X 0X0
------------------------------ ------------------------- ------------------------ --------------------------------------
40 Saturn
Lai Xxx Xxxxxx 150,000 2,500.50 USD Xxxxxxx-Xxx-Xxxxxxx, Xxxxxx, Xxxxxx
X0X 0X0
------------------------------ ------------------------- ------------------------ --------------------------------------
00 Xxx Xxxxx Xxxxxx
Xxxxx Investments Limited 1,500,000 25,005.00 USD Xxxxx 0X, Xxxx Xx Xxxxx, Xxxxxxx,
Xxxx Xxxx
------------------------------ ------------------------- ------------------------ --------------------------------------
Xxxx 0X, Xxxxx 0, Xxxxx 00
Xxxx Poa Garden
Sun Rich International Limited 450,000 7,501.50 USD Xxxx Xxx, Kowloon
Hong Kong
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XXXX PAID 50,010.50 USD
------------------------------ ------------------------- ------------------------ --------------------------------------
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