STOCK PURCHASE AGREEMENT
EXECUTION
COPY
This STOCK PURCHASE AGREEMENT
(this “Agreement”) by and
between LIVEDEAL, INC.,
a Nevada corporation (the “Company”), and the investors listed on
Schedule
I attached to this
Agreement (each a “Purchaser” and together the “Purchasers”) is entered into as of
November 29, 2010.
The
Company and Purchasers are entering into this agreement to memorialize the terms
and conditions upon which Purchasers commit to purchase and acquire shares of
the Company’s common stock, $0.001 par value per share (the “Common
Stock”).
NOW THEREFORE, in
consideration of the premises and the mutual covenants hereinafter set forth,
the parties hereby agree as follows:
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I.
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STOCK
PURCHASE COMMITMENT; REPRESENTATIONS BY EACH
PURCHASER
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1.1
Subject to the terms and conditions hereinafter
set forth, the Purchasers hereby agree to purchase from the Company (at the
Company’s sole and exclusive option) shares of Common Stock (the “Shares”) in multiple
investment tranches (each a “Tranche”) in
accordance with the schedule set forth below. The aggregate dollar
amount that each Purchaser is obligated to invest in the Company in exchange for
the Shares is set forth opposite each Purchaser’s name on Schedule I attached
hereto. The purchase price (“Purchase Price”) for
each Share that the Purchasers are obligated to purchase in each Tranche shall
be the sum obtained by adding (i) US$0.50 and (ii) the average closing price for
the Common Stock as reported by the NASDAQ Capital Market for the 90-day period
immediately preceding (but not including) the Closing Date (as defined in Section 1.3 below)
for such Tranche. No fractional Shares shall be issued to any
Purchaser; to the extent that any calculation would otherwise result in the
issuance of a fractional Share, the result of such calculation shall be rounded
down to the nearest whole Share. Each Purchaser agrees that it will
be obligated to purchase its respective Shares in accordance with the following
schedule:
(i) US$50,000
shall be wired to the Company’s designated account on or before December 3,
2010. For the sake of an illustration, the Purchase Price payable in
connection with such Tranche shall be $6.25 per Share, and up to an aggregate of
8,000 Shares may be issued in such Tranche (subject to rounding down to the
nearest whole share for any individual Purchaser(s) as provided
above).
(ii) An
additional US$50,000 shall be wired to the Company’s designated account on or
before December 25, 2010.
(iii) An
additional US$50,000 shall be wired to the Company’s designated account on or
before January 25, 2011.
(iv) An
additional US$50,000 shall be wired to the Company’s designated account on or
before February 25, 2011.
1.2
The failure of a Purchaser to make the required Tranche
payment as set forth above (following written notice of such failure and a five
business day opportunity to cure) shall result in the Company having the right
to repurchase any and all Shares previously issued to the Purchaser for an
amount equal to the applicable Purchase Price of such Shares less US$0.50 per
each Share.
1.3 The
closing of each respective investment Tranche shall be a “Closing” and the date
of each Closing shall be a “Closing
Date.” At each Closing or as promptly thereafter as possible,
the Company shall cause to be delivered to each Purchaser a certificate,
registered in the name of the Purchaser, representing the Shares actually
purchased by Purchaser at such Closing against payment of the Purchase Price
therefore by wire transfer to a bank account designated by the
Company.
1.4 Each
Purchaser recognizes that the purchase of the Shares entails elements of risk in
that (i) it may not be able to readily liquidate its investment; (ii)
transferability is restricted as set forth in Section 4.1; and (iii) in the
event of a disposition, it could sustain the loss of its entire
investment.
1.5 Each
Purchaser acknowledges that it has prior investment experience such that it is
able to evaluate the merits and risks of an investment in the Company; that it
recognizes the speculative nature of this investment; and that it is able to
bear the economic risk it hereby assumes. All reports, schedules,
forms, statements, and other documents required to be filed by the Company with
the United States Securities and Exchange Commission (“SEC”) under the
Securities Act of 1933, as amended (the “Securities Act”), the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), and
the rules and regulations promulgated under each, including pursuant to Section
13(a) or 15(d) thereof, as well as all amendments to such filings and reports
and all exhibits and documents incorporated by reference therein or attached
thereto, that have been filed as of the date of a respective Closing are
collectively referred to as the “Disclosure
Reports.” Each Purchaser acknowledges that it or its
representative(s) have read the Disclosure Reports available as of each
respective Closing. Each Purchaser also acknowledges that it and its
representative(s) have been afforded the opportunity to make, and has made, all
inquiries as it and its representatives deemed appropriate with respect to the
Company’s affairs and prospects.
1.6 Each
Purchaser hereby acknowledges that (i) the sale and issuance of the Shares have
not been approved by the NASDAQ or registered with the SEC by reason of the
Company’s intention that the offer and sale of the Shares be a transaction
exempt from the registration and prospectus delivery requirements of the
Securities Act pursuant to Section 4(2) thereof; (ii) the issuance of the Shares
has not been qualified under any state securities laws on the grounds that the
sale of the Shares contemplated hereby are exempt therefrom; and (iii) the
foregoing exemptions are predicated on the Purchaser’s representations set forth
herein. Each Purchaser represents that the Shares are being purchased
for its own account, for investment and not with a view to, or for resale in
connection with, any distribution or public offering thereof, within the meaning
of the Securities Act or applicable state securities laws. Each
Purchaser understands that the Shares, upon their transfer, will not be
registered under the Securities Act and may be required to be held indefinitely
unless they are subsequently registered under the Securities Act, or an
exemption from such registration is available.
1.7 Each
Purchaser represents that it is an “accredited investor” as that term is defined
in Rule 501 of Regulation D promulgated under the Securities Act.
1.8 Unless
the resale of the Shares is subsequently registered with the SEC, each Purchaser
acknowledges that the certificate representing the Shares shall bear a legend in
substantially the following form:
“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY APPLICABLE STATE
SECURITIES LAWS AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT (I) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND COMPLIANCE WITH SUCH
STATE SECURITIES LAWS, (II) IN COMPLIANCE WITH RULE 144 UNDER THE ACT AND
APPLICABLE STATE SECURITIES LAWS, OR (III) UPON THE DELIVERY TO LIVEDEAL,
INC. (THE “COMPANY”) OF AN OPINION OF COUNSEL OR OTHER EVIDENCE SATISFACTORY TO
THE COMPANY THAT SUCH REGISTRATION AND/ OR COMPLIANCE IS NOT
REQUIRED.”
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1.9 Each
Purchaser represents that it has the full right, power and authority to enter
into and perform the Purchaser’s obligations hereunder, and this Agreement
constitutes a valid and binding obligation of the Purchaser enforceable in
accordance with its terms, except that (i) any enforcement may be subject
to bankruptcy, insolvency, reorganization, moratorium or similar laws from time
to time in effect and affecting the rights of creditors generally and
(ii) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceedings therefore may be brought.
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II.
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REPRESENTATION
AND WARRANTIES BY THE COMPANY
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Except as
set forth in the Disclosure Reports, the Company represents and warrants to each
Purchaser as follows:
2.1 The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Nevada. The Company has the corporate
power and authority to own, lease and operate its properties and to conduct the
business as described in the Disclosure Reports. The Company is duly
qualified as a foreign corporation to transact business and is in good standing
in each jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a material
adverse effect on the Company.
2.2 The
Company’s subsidiaries are set forth in the Disclosure Reports or on the
Company’s website (the “Subsidiaries”). Unless
the context requires otherwise, all references to the Company include the
Subsidiaries. Each Subsidiary is a corporation or a limited liability
company (as applicable) duly organized, validly existing and in good standing
under the laws of its state of incorporation or organization as set forth in the
Disclosure Reports or on the Company’s website, with full power and authority,
corporate and other, to own or lease, as the case may be, and operate its
properties, whether tangible or intangible, and to conduct its business as
currently conducted. Each Subsidiary is duly qualified as a foreign
corporation or limited liability company to transact business and is in good
standing in each jurisdiction in which the conduct of its business or the
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not have
a material adverse effect on the Company and the Subsidiaries taken as a
whole. Unless specified to the contrary in the Disclosure Reports,
the Company owns all of the issued and outstanding shares of capital stock (or
other equity or ownership interests) of each Subsidiary, such ownership is free
and clear of any security interests, liens, encumbrances, claims and charges,
and all of such shares have been duly authorized and validly issued, and are
fully paid and nonassessable. The Company does not presently own,
directly or indirectly, an interest in any corporation, association, or other
business entity, and is not a party to any joint venture, partnership, or
similar arrangement, other than the Subsidiaries.
2.3 This
Agreement has been duly authorized, executed and delivered by, and is a valid
and binding agreement of, the Company enforceable in accordance with its terms,
subject to applicable bankruptcy, reorganization, insolvency, moratorium and
similar laws affecting creditors’ rights generally (including, without
limitation, statutory or other laws regarding fraudulent preferential transfers)
and equitable principles of general applicability.
2.4 The
execution and delivery of this Agreement by the Company, and the performance by
the Company of its obligations under this Agreement, will not conflict with or
contravene in any material respect, cause a breach or violation of or default
under, any provision of applicable law or the Articles of Incorporation or
by-laws of the Company or any agreement or other instrument binding upon the
Company that is material to the Company, or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company, and no
consent, approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the Company of
its obligations under this Agreement, except as may be required by the
securities or Blue Sky laws of the various states in connection with the offer
and sale of the Shares and by Federal and state securities laws with respect to
the obligations of the Company under this Agreement or the listing of the Shares
with NASDAQ as may be required, which have been or will be obtained, or as would
not have a material adverse effect on the Company and the Subsidiaries taken as
a whole.
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2.5 The
authorized capital stock of the Company conforms in all material respects to the
description thereof contained in the Disclosure Reports and such description
conforms in all material respects to the rights in the instruments defining the
same. The issued and outstanding capital stock of the Company is as
set forth in the Disclosure Reports. The shares of Common Stock of
the Company outstanding prior to the issuance of the Shares have been duly
authorized and are validly issued, fully paid and nonassessable.
2.6 The
Shares have been duly and validly authorized and, when issued, sold and paid for
by the Purchaser in accordance with the terms of this Agreement, will be duly
authorized, validly issued, fully paid and nonassessable, and the Purchaser will
not be subject to personal liability solely by reason of being such a holder and
will not be subject to the preemptive or similar rights of any holders of any
security of the Company. The issuance of the Shares will not result
in the right of any holder of securities of the Company to adjust the exercise,
conversion or exchange price of such securities or otherwise reset the price
paid for its securities. No authorization, approval or consent of any
court, governmental authority or agency is necessary in connection with the
issuance by the Company of the Shares.
2.7 The
Disclosure Reports, as of their respective filing dates, complied in all
material respects with the requirements of the Exchange Act and the applicable
rules and regulations of the SEC thereunder.
2.8 Neither
the Company nor any Subsidiary is in violation of its charter or by-laws or in
default in the performance of any obligation, agreement, covenant or condition
contained in any indenture, loan agreement, mortgage, lease or other agreement
or instrument that is material to the Company and the Subsidiaries taken as a
whole to which the Company or any Subsidiary is a party or by which the Company,
any Subsidiary or any of their properties is bound, except for such defaults
that would not, individually or in the aggregate, have a material adverse effect
on the Company and the Subsidiaries taken as a whole or as otherwise set forth
in the Disclosure Reports.
2.9 There
are no legal or governmental proceedings, orders, judgments, writs, injunctions,
decrees or demands pending or, to the Company’s knowledge, threatened to which
the Company or any Subsidiary is a party or to which any of the properties of
the Company or any Subsidiary is subject other than (a) proceedings, orders,
judgments, writs, injunctions, decrees or demands described in the Disclosure
Reports, or (b) proceedings, orders, judgments, writs, injunctions, decrees or
demands that would not be reasonably expected to have a material adverse effect
(i) on the Company and the Subsidiaries taken as a whole or (ii) on the power or
ability of the Company to perform its obligations under this Agreement or to
consummate the transactions contemplated by this Agreement.
2.10 The
Company is in compliance with applicable provisions of (a) the Employee
Retirement Income Security Act of 1974, as amended, and the rules and
regulations promulgated thereunder and (b) the Foreign Corrupt Practices Act of
1977, as amended, and the rules and regulations promulgated thereunder, in both
cases except where any incidence of noncompliance would not, individually or in
the aggregate, have a material adverse effect on the Company and the
Subsidiaries taken as a whole.
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2.11 Other
than the transactions contemplated by this Agreement, neither the Company nor
any of its affiliates (as defined in Rule 501(b) of Regulation D, each an “Affiliate”) has
directly, or through any agent, (a) sold, offered for sale, solicited offers to
buy or otherwise negotiated in respect of, any security (as defined in the
Securities Act) which is or will be integrated with the sale of the Shares in a
manner that would require the registration under the Securities Act of the
Shares or (b) offered, solicited offers to buy or sold the Shares by any form of
general solicitation or general advertising (as those terms are used in
Regulation D) or in any manner involving a public offering within the meaning of
Section 4(2) of the Securities Act. No registration under the
Securities Act of the Shares is required for the sale of the Shares to the
Purchaser under this Agreement, assuming the accuracy of the Purchaser’s
representations and warranties contained in this Agreement.
2.12 The
Company and each Subsidiary owns or possesses, or has the right to use, all
material patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks and
trade names currently employed or required by it in connection with the business
currently conducted by it as described in the Disclosure Reports, except such as
the failure to so own or possess or have the right to use would not have,
individually or in the aggregate, a material adverse effect on the Company and
the Subsidiaries taken as a whole. To the Company’s knowledge, there
are no valid and enforceable United States patents that are infringed by the
business currently conducted by the Company or any Subsidiary, or as currently
proposed to be conducted by the Company or any Subsidiary, as described in the
Disclosure Reports and which infringement would have a material adverse effect
on the Company and the Subsidiaries taken as a whole. The Company is
not aware of any basis for a finding that the Company or ay Subsidiary does not
have valid title or license rights to the patents and patent applications
referenced in the Disclosure Reports as owned or licensed by the Company or any
Subsidiary, and, to the Company’s knowledge, neither the Company nor any
Subsidiary is subject to any judgment, order, writ, injunction or decree of any
court or any Federal, state, local, foreign or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, or
any arbitrator, nor has it entered into or is it a party to any contract, which
restricts or impairs the use of any of the foregoing which would have a material
adverse effect on the Company and the Subsidiaries taken as a
whole. Neither the Company nor any Subsidiary has received any
written notice of infringement of or conflict with asserted rights of any third
party with respect to the business currently conducted by it as described in the
Disclosure Reports and which, if determined adversely to the Company or any
Subsidiary, would have a material adverse effect on the Company and the
Subsidiaries taken as a whole and the Company has no knowledge of any facts or
circumstances that would serve as a reasonable basis for any such
claims.
2.13 There
are no outstanding rights, warrants, options, convertible securities or
commitments to sell granted or issued by the Company entitling any person to
purchase or otherwise acquire any shares of the capital stock of the Company,
except as otherwise disclosed in the Disclosure Reports and except for
securities granted to directors and employees of the Company in the ordinary
course of business.
2.14 The
financial statements included or incorporated by reference in the Disclosure
Reports as the same may have been amended prior to the date of the Disclosure
Reports, together with related schedules and notes, present fairly in all
material respects the financial position, results of operations and changes in
financial position of the Company and its consolidated subsidiaries on the basis
stated therein at the respective dates or for the respective periods to which
they apply; such statements and related schedules and notes have been prepared
in accordance with generally accepted accounting principles consistently applied
throughout the periods involved, except as disclosed therein.
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2.15 There
are no existing or, to the Company’s knowledge, threatened labor disputes with
the employees of the Company that would have a material adverse effect on the
Company and the Subsidiaries taken as a whole.
2.16 The
Company has filed all Federal, state, local and foreign tax returns which are
required to be filed through the date hereof (except where the failure to so
file would not have a material adverse effect on the Company), which returns are
true and correct in all material respects, or have received extensions thereof,
and have paid all taxes shown on such returns and all assessments received by
them to the extent that the same are material and have become due. All tax
liabilities are adequately provided for on the books of the
Company. To the Company’s knowledge, there are no tax audits or
investigations pending, which if adversely determined, would have a material
adverse effect on the Company taken as a whole.
2.17 The
Company is insured against such losses and risks and in such amounts as are
customary in the businesses in which it is engaged, including but not limited
to, insurance covering product liability and real or personal property owned or
leased against theft, damage, destruction, act of vandalism and all other risks
customarily insured against. All policies of insurance and fidelity
or surety bonds insuring the Company or the Company's businesses, assets,
employees, officers and directors are in full force and effect. The
Company is in compliance with the terms of such policies and instruments in all
material respects. The Company has no reason to believe that it will
not be able to renew their existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary
to continue its business.
2.18 Any
real property and buildings held under lease by the Company is held by it under
valid, subsisting and enforceable leases with such exceptions as are not
material and do not materially interfere with the use made and proposed to be
made of such property and buildings by the Company.
2.19 There
is and there has been no failure on the part of the Company or, to the Company's
knowledge, any of the officers or directors of the Company in their capacities
as such, to comply in all material respects with the Xxxxxxxx-Xxxxx Act of 2002
and the rules and regulations promulgated in connection therewith that are
applicable to the Company and its officers and directors.
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III.
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CONDITIONS
TO PURCHASERS’ OBLIGATIONS AT
CLOSINGS.
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3.1 Conditions to the
Purchaser’s Obligations at Each Closing. The obligations of
each Purchaser to purchase Shares at any Closing are subject to the fulfillment,
on or before such Closing, of each of the following conditions, unless otherwise
waived by that number of Purchasers representing a majority of the amount to be
invested in such Tranche:
(i) Representations and
Warranties. The representations and warranties of the Company
contained in Article II shall be true and correct in all material respects as of
the date of such respective Closing.
(ii) Performance. The
Company shall have performed and complied with all covenants, agreements,
obligations and conditions contained in this Agreement that are required to be
performed or complied with by it on or before such Closing.
(iii) Current Disclosure
Reports. The Company shall have filed all Disclosure Reports
that are required to be filed as of the date of such Closing.
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IV.
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MISCELLANEOUS
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4.1 Each
Purchaser hereby covenants and agrees that, during the period beginning on each
Closing Date and ending six months after such Closing Date, such Purchaser will
not, directly or indirectly, (a) offer, sell, offer to sell, contract to sell,
hedge, pledge, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase or sell (or
announce any offer, sale, offer of sale, contract of sale, hedge, pledge, sale
of any option or contract to purchase, purchase of any option or contract of
sale, grant of any option, right or warrant to purchase or other sale or
disposition), or otherwise transfer or dispose of (or enter into any transaction
or device that is designed to, or could be expected to, result in the
disposition by any person at any time in the future), the Shares purchased by
such Purchaser in such Tranche, or (b) enter into any swap or other agreement or
any transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of any Shares, whether any such swap or
transaction described in clause (a) or (b) above is to be settled by delivery of
any Share.
4.2 Any
notice, request, advice, consent or other communication given hereunder shall be
given in writing and sent by overnight delivery service or registered or
certified mail, return receipt requested, and addressed as follows: if to the
Company, to it at 0000 X. Xxxxxx Xx., Xxxxx #000, Xxx Xxxxx, XX 00000, Xxxxxx
Xxxxxx of America, Attention: President; and if to the Purchasers, to it at the
address on the records of the Company. Notices so given shall be
deemed to have been given on the earlier to occur of actual receipt or three
business days after the date of such mailing, except for notices of change of
address, which shall be deemed to have been given when received.
4.3 This
Agreement shall not be changed, modified or amended except by a writing signed
by the parties hereto.
4.4 This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and to their respective heirs, legal representatives, successors and
assigns. This Agreement sets forth the entire agreement and
understanding between the parties as to the subject matter thereof and merges
and supersedes all prior discussions, agreements and understandings of any and
every nature among them.
4.5 References
herein to a person or entity in either gender include the other gender or no
gender, as appropriate.
4.6 This
Agreement and its validity, construction and performance shall be governed in
all respects by the laws of the State of Nevada.
4.7 After
negotiations between the parties, this Agreement was prepared by Xxxxx
& Xxxxxx L.L.P, as legal counsel to the Company. Xxxxx &
Xxxxxx L.L.P. has not acted as legal counsel to any of the Purchasers,
individually or collectively, in connection with the negotiation of or the
transactions contemplated by this Agreement. Each Purchaser hereby
acknowledges that it has had the opportunity to review this Agreement with
its own legal counsel.
4.8 This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument. This Agreement may also be executed and delivered by
facsimile or electronic (.pdf) signature and in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
[Signature
Page Follows]
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IN WITNESS WHEREOF, the
parties have executed this Agreement as of the day and year set forth
below.
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COMPANY:
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LiveDeal,
Inc.
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/s/ Xxxxx Xxxx
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Name:
Xxxxx Xxxx
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Title:
President
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PURCHASER:
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Joint
Corporation FeelTech Investment Unit 1
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/s/ Masao Nirasawa
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Name:
Masao Nirasawa
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Title:
Representative
Director
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SCHEDULE
I
SCHEDULE
OF PURCHASERS
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Name and Address
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Number of Shares
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Investor
1:
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Joint
Corporation FeelTech Investment Unit 1
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Tranche
1:
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3-1-30
Roppongi Minato-ku
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8,000
/ $50,000.00
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Xxxxx
000-0000 Xxxxx
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Tel:
+ 000-0000-0000
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Representative
Director: Masao Nirasawa
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