U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10
GENERAL FORM FOR REGISTRATION OF SECURITIES
Pursuant to Section 12(b) or (g) of The Securities Exchange Act of 1934
GLOBAL EQUITY INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Nevada 27-3986073
(State of Incorporation) (I.R.S. Employer Identification No.)
23 Frond "K" Palm Jumeirah, Dubai, UAE N/A
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: +971 (7) 204 7593
Copies to:
Pino Baldassarre
Corporate Secretary
907 South Riverside Drive
Indiatlantic, Florida 32903
Telephone: (321) 549-0628
Copies to:
David E. Wise, Esq.
Law Offices of David E. Wise, P.C.
9901 IH-10 West, Suite 800
San Antonio, Texas 78230
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Telephone: (210) 558-2858/Facsimile: (210) 579-1775
Email: wiselaw@verizon.net
Securities to be registered under Section 12(b) of the Act: None
Name of Exchange on which each class is to be registered: Not applicable
Securities to be registered under Section 12(g) of the Exchange Act:
Common Stock, $.001
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
EXPLANATORY NOTE
We are filing this General Form for Registration of Securities on Form 10 to register our common stock, pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended ("Exchange Act")
Once this registration statement is deemed effective, we will be subject to the requirements of Regulation 13A under the Exchange Act, which will require us to file annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and we will be required to comply with all other obligations of the Exchange Act applicable to issuers filing statements pursuant to Section 12(g) of the Exchange Act.
FORWARD LOOKING STATEMENTS
There are statements in this Registration Statment that are not historical facts. These "forward-looking statements" can be identified by use of terminology such as "believe," "hope," "may," "anticipate," "should," "intend," "plan," "will," "expect," "estimate," "project," "positioned," "strategy" and similar expressions. You should be aware that these forward-looking statements are subject to risks and uncertainties that are beyond our control. For a discussion of these risks, you should carefully read this entire Registration Statement, especially the risks discussed under "Risk Factors." Although management believes that the assumptions underlying the forward looking statements included in this Registration Statement are reasonable, they do not guarantee our future performance, and actual results could differ from contemplated by these forward looking statements. The assumptions used for purposes of the forward-looking statements specified in the following information represent estimates of future events and are subject to uncertainty as to possible changes in economic, legislative, industry, and other circumstances. As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives require the exercise of judgment. To the extent that the assumed events do not occur, the outcome may vary substantially from anticipated or projected results, and, accordingly, no opinion is expressed on the achievability of those forward-looking statements. In the light of these risks and uncertainties, there can be no assurance that the results and events contemplated by the forward-looking statements contained in this Registration Statement will in fact transpire. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. We do not undertake any obligation to update or revise any forward-looking statements.
TABLE OF CONTENTS
Item Number
and Caption Page
----------- ----
ITEM 1. BUSINESS........................................................... 1
ITEM 1A. RISK FACTORS....................................................... 6
ITEM 2. FINANCIAL INFORMATION.............................................. 8
ITEM 3. PROPERTIES......................................................... 10
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT..... 11
ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS................................... 12
ITEM 6. EXECUTIVE COMPENSATION............................................. 15
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE....................................................... 18
ITEM 8. LEGAL PROCEEDINGS.................................................. 19
ITEM 9. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS.................................... 19
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES............................ 20
ITEM 11. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED............ 22
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS.......................... 24
ITEM 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA........................ 25
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE........................................... 26
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS.................................. 26
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ITEM 1. BUSINESS
BACKGROUND
Global Equity International, Inc. ("Company") was incorporated on October 1, 2010, as a Nevada corporation, for the express purpose of acquiring Global Equity Partners PLC, a corporation formed under the laws of the Republic of Seychelles ("GEP") on September 2, 2009.
GEP is a Dubai based private equity firm that provides investment and consulting services, such as corporate restructuring, advice on management buy outs, management recruitment, website design and development for corporate marketing, investor and public relations, regulatory compliance and introductions to financiers, to companies desiring to be listed on stock exchanges in various parts of the world.
Our authorized capital consists of 70,000,000 shares of common stock, $.001 par value, and 5,000,000 shares of preferred stock, $.001 par value.
On November 15, 2010, we entered into a Plan and Agreement of Reorganization ("Plan of Reorganization") with GEP and its sole shareholder, Peter J. Smith, pursuant to which we would acquire 100% of the common stock of GEP. We consummated the Plan of Reorganization effective December 31, 2010, by issuing 20,000,000 shares of our common stock to Peter J. Smith, at which time GEP became our wholly-owned subsidiary and Peter J. Smith was appointed as our President, Chief Executive Officer and Director.
As a result of our acquisition of GEP, we provide investment services and advice to companies desiring to have their shares listed on stock exchanges or quoted on quotation bureaus in various parts of the world. We have offices in the United States, Dubai, London and Marbella (Spain). We have affiliations with firms located in some of the world's leading financial centers such as London, New York, Frankfurt and Dubai.
Peter Smith founded Global equity partners Plc to assist small to medium size businesses with management restructuring and corporate restructuring, in general, and also to obtain, if requested by its clients, access to capital markets via equity and debt financings.
We also look for promising small to medium size companies ($2,000,000 to $10,000,000 in assets) and introduce them to private and institutional investors in our network ("rol-a-dex") of over 179 financial introducers around the world.
Presently, GEP is our only operating business. Global Equity International's present operations are limited to insuring compliance with regional, state and national securities regulatory agencies and organizations. In addition, GEI is charged with (i) handling our periodic obligations under the Securities Exchange Act of 1934; (ii) managing our investor relations; and (iii) raising debt and equity capital necessary to fund our operations and enhance and grow our business.
We currently offer the following services to our clients:
* Corporate restructuring
* Management buy outs
* Management recruitment
* Website design, development and marketing advice
* Investor and public relations
* Regulatory compliance
* Introductions to financiers
CORPORATE RESTRUCTURING SERVICES
We advise and assist our clients in determining the corporate structure that is most suitable to their business models. We recommend management changes where necessary. We also offer them corporate governance models customized to their specific organizations and desired exchange listings. We also review and analyze their balance sheets and capital structures and make recommendations on debt consolidations, equity exchanges for debt, proper capital structures and viability and timing of equity and debt offerings.
MANAGEMENT BUY OUTS
We assist our clients in every aspect of management buy outs from corporate restructuring to debt financing and also introduce buyers and sellers to financiers for private equity placements.
MANAGEMENT RECRUITING
We assist our clients with the recruitment of management and board members through our various contacts around the world. Management recruitment and retention is also an important part of our Corporate Restructuring Services and these services often overlap.
WEBSITE DESIGN AND DEVELOPMENT
We recognize that in these times, successful business must have comprehensive and professional internet profiles, interactive websites and excellent feedback mechanisms. We will assist our clients in this area by recommending third party consultants and organizations to design, develop and manage their websites and social networking capabilities.
INVESTOR AND PUBLIC RELATIONS
Since our clients and future clients will likely desire to have their shares listed or continue to be listed on a stock exchange or quoted on one of the quotation bureaus, we will advise our clients on the necessary requirements for communicating with their equity holders and stake holders, their customers and potential customers. We will assist our clients in this area by recommending third party financial professionals and investor relations and public relations organizations to provide them with such services.
REGULATORY COMPLIANCE
We are organizing a cadre of third party securities attorneys and accountants to assist our clients with their compliance with the many reporting and other requirements of stock exchanges, quotation bureaus and securities regulatory agencies and organizations in the states and countries where their shares will be or are listed.
INTRODUCTIONS TO FINANCIERS
After reviewing the business plans, prospects and problems that are unique to each of clients, we will use our best efforts to introduce our clients to various third party financial resources around the world who may be able to assist them with their capital funding requirements.
As used throughout this Form 10 registration statement, references to "Global Equity International," "GEI," "Company," "we," "our," "ours," and "us" refer to Global Equity International, Inc. and our subsidiaries, unless the context otherwise requires. In addition, references to "financial statements" are to our consolidated financial statements contained herein, except as the context otherwise requires. References to "fiscal year" are to our fiscal year which ends on December 31 of each calendar year. Unless otherwise indicated, the terms "Common Stock," "common stock" and "shares" refer to our shares of $.001 par value, common stock.
HISTORICAL BUSINESS TRANSACTED
2010 TRANSACTIONS
GEP completed two transactions in 2010. The first transaction involved M1 Luxembourg AG a Swiss company, that we helped get listed on the Frankfurt Open Market, a German stock exchange.
M1 Luxembourg AG, through its subsidiaries, offers financial advisory services. The firm's subsidiaries include Cannon Regus, Sumner Holdings, ISIS financial Associates Ltd, Britannia Overseas Property, and M1 Lux (Cyprus) Ltd. It provides mortgage, private banking, company formation, real estate management and trust formation advisory services. Additionally, the firm offers property documentation, education fees planning, retirement planning, healthcare insurance policies and private wealth management advisory services. M1 Luxembourg AG is headquartered in Hunenberg, Switzerland.
Our contract with M1 Luxembourg AG originally called for us to receive a cash fee of $200,000. However, we renegotiated our fee to take 2,000,000 shares of the client's common stock, valued at $1,086,160.
The second transaction in 2010 involved consulting with Monkey Rock Group, Inc. (MKRO.OB), a United States company operated by two British nationals. Monkey Rock initially focused on organizing motorbike events, such as Sturgis, South Dakota, which is one of the largest gatherings of bikers in the world with an average of 400,000 bikers participating. GEP was engaged by Monkey Rock to assist it in expanding in Europe and to assist with branding and marketing. GEP introduced Monkey Rock to Brand Union, a division of WPP, one of the largest advertising firms in the world.
In 2010, GEP received compensation from Monkey Rock of $15,000 in cash and 1,500,000 shares of common stock, valued at $975,000 at the time of issuance.
NEW BUSINESS TRANSACTED IN 2011
We currently have contracts with three companies: (1) RFC K.K., a Japan
based company; (2) Black Swan Data Limited, a United Kingdom based company; and
(3) Arrow Cars SL, a company that is currently based in Spain and is a national
rent a car business.
RFC K.K. has been in business for a little over three years and they are in the online race simulation business. RFC K.K. has engaged us to assist them in their expansion into the Middle Eastern and Asian markets. We have arranged meetings between RFC K.K. a few high profile, potential Dubai based
partners/investors. As of this time, RFC K.K. has not entered into any agreements with these potential Dubai partners/investors, but has entered into a preliminary verbal agreements with the Shanghai local government and Ferrari to set up a Race Fight Club in Shanghai, Peoples Republic of China.
RFC K.K. has agreed to pay us a total of $240,000 over the intial 12 months of our contract and then pay us $6,000 per month for the subsequent 12 months. In addition, we have received a 10% equity stake in RFC K.K.
Black Swan Data Limited is a United Kingdom based company ("Black Swan") that has developed algorithm based artificial intelligence that audits and merges internal and external date feeds from various sources, such as sales and transactional data, web and mobile statistics, consumer services data, social network analysis and customer relationship management databases. Black Swan engaged us to (i) assist it with recruiting and structuring its management with very specific skill sets and job experience; and (ii) prepare a short list of acquisition targets in the United Kingdom.
Black Swan Data Limited has agreed to pay us an initial fee of $40,000 and then a subsequent fee six months later of $140,000; and then a $7,500 per month consulting fee for the next 24 months. In addition, we have received a 10% equity stake in Black Swan data Limited.
Arrow Cars SL is currently based in southern Spain and has been in business since 2008. Arrow Cars SL is a national rent a car business operating only in Spain. Arrow Cars Sl has engaged us to consult with them and to design a three year strategy to expand their business model into other high density tourist areas of Spain, Portugal and southern France, with the objective of opening a similar business in the United States, primarily in Florida.
Arrow Cars SL has agreed to pay us an initial fee of $20,000 and then a subsequent aggregate fee of $115,000 over the subsequent twelve months. In addition, we have received a 10% equity stake in Arrow Cars SL.
We have three distinct divisions (none of which will be treated as a segment for financial reporting purposes):
1. Introducers Network. We have developed and continue to develop a number of finance professionals, accountants, attorneys and financial advisers who will introduce us to their clients. We will review businesses introduced to us be these introducers and we will compensate them on some "to be determined" basis in the event that we are engaged by to assist the companies they introduce to us.
2. Project Review. Our management team and advisors will carefully review and vet each business plan and opportunity submitted to us. Our management team and advisors will determine which services we can offer these clients and assess the potential propositions to best assist our clients in achieving their goals.
3. Placing. Working with our business associates in Frankfurt, London, Miami, New York and Toronto, we will use our best efforts to assist our clients with listings on stock exchanges in these cities in order to maximize their exposure to capital markets and to access funding via debt and equity offerings.
FUTURE PLANS
We hope to sign up four new clients per year, assuming we have the financial resources to do so. Based on our current cash position and deal flow, we believe we have sufficient funds to operate for the next 24 months and to take care of our three existing clients and possibly three more.
EMPLOYEES; IDENTIFICATION OF A SIGNIFICANT EMPLOYEE
We currently have three employees, other than our three officers and directors. Peter J. Smith, our President, and Enzo Taddei, our Chief Financial Officer, each have employment agreements with the Company. See "MANAGEMENT." We intend to hire additional employees when they are needed.
COMPETITION
We face intense competition in every aspect of our business, and particularly from other firms which offer management, compliance and other consulting services to private and public companies. We would prefer to accept a relatively low cash component as our fee for management consulting and regulatory compliance services and take a greater portion of our fee in the form of restricted shares of our private clients' common stock. We also face competition from a large number of consulting firms, investment banks, venture capitalists, merchant banks, financial advisors and other management consulting and regulatory compliance services firms similar to ours. Many of our competitors have greater financial and management resources and some have greater market recognition than we do.
REGULATORY REQUIREMENTS
We are not required to obtain any special licenses, nor meet any special regulatory requirements before establishing our business, other than a simple business license. If new government regulations, laws, or licensing requirements are passed that would restrict or eliminate delivery of any of our intended products, then our business may suffer. Presently, to the best of our knowledge, no such regulations, laws, or licensing requirements exist or are likely to be implemented in the near future that would reasonably be expected to have a material impact on or sales, revenues, or income from our business operations.
We are not a broker-dealer or investment advisor.
VOLUNTARY FILING
We are voluntarily filing this Registration Statement with the U.S. Securities and Exchange Commission and we are under no obligation to do so under the Securities Exchange Act of 1934.
REPORTS TO SECURITY HOLDERS
1. We will be subject to the informational requirements of the Exchange Act. Accordingly, we will file annual, quarterly and periodic reports, proxy statements, information statements and other information with the SEC.
2. The public may read and copy any materials the Company files with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Room 1580, Washington, D.C. 20549. The public may call the SEC at 1-800-SEC-0330 for further information on the Public Reference Room. Our SEC filings will also be available to the public at the SEC's web site at http://www.sec.gov.
ITEM 1A. RISK FACTORS
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. IF ANY OF THE FOLLOWING RISKS ACTUALLY MATERIALIZES, OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS WOULD SUFFER AND OUR SHAREHOLDERS COULD LOSE ALL OR PART OF THEIR INVESTMENT IN OUR SHARES.
RISKS ASSOCIATED WITH OUR COMPANY
WHILE WE HAVE TWO YEARS OF OPERATING HISTORY AND HAVE ACCUMULATED PROFITS, THERE IS NO ASSURANCE THAT OUR FUTURE OPERATIONS WILL RESULT IN PROFITABLE REVENUES. IF WE CANNOT GENERATE SUFFICIENT REVENUES TO OPERATE PROFITABLY, WE WILL CEASE OPERATIONS AND YOU WILL LOSE YOUR INVESTMENT.
We were incorporated in Nevada on October 1, 2010, and our wholly-owned subsidiary, GE Partners Plc, was formed on September 2, 2009. We have been profitable in the past; however, there is no assurance that our future operations will result in profitable revenues. If we cannot generate sufficient revenues to operate profitably, we will cease operations and you will lose your investment in our Company. Our ability to achieve and maintain profitability and positive cash flow is dependent, among other things, upon:
* our ability to attract clients who will buy our services from us; and
* our ability to generate revenues through the sale of our services.
AS A RESULT OF OUR INTENSELY COMPETITIVE INDUSTRY, WE MAY NOT GAIN ENOUGH
MARKET SHARE TO BE PROFITABLE.
The corporate consulting business is intensely competitive and due to our small size and limited resources, we may be at a competitive disadvantage, especially as a public company. There are several firms offering similar services. Many of our competitors have proven track records and substantial human and financial resources, as opposed to our Company who has limited human resources and little cash. Also, the financial burden of being a public company, which will cost us approximately $40,000 per year in auditing fees and legal fees to comply with our reporting obligations under the Securities Exchange Act of 1934 and compliance with the Sarbanes-Oxley Act of 2002, will strain our finances and stretch our human resources to the extent that we may have to price our social networking services and advertising fees higher than our non-publicly held competitors just to cover the costs of being a public company.
WE ARE VULNERABLE TO THE CURRENT ECONOMIC CRISIS WHICH MAY NEGATIVELY
AFFECT OUR PROFITABILITY AND ABILITY TO CARRY OUT OUR BUSINESS PLAN.
We are currently in a severe worldwide economic recession. Runaway deficit spending by the United States government and other countries further exacerbates the United States and worldwide economic climate and may delay or possibly deepen the current recession. Currently, a lot of economic indicators such as rising gasoline and commodity prices, suggest higher inflation, dwindling consumer confidence and substantially higher taxes. Demand for the services we offer tends to decline during recessionary periods when disposable revenue is lower and may impact sales of our services. In addition, sudden disruptions in business conditions as a result of a terrorist attack similar to the events of September 11, 2001, including further attacks, retaliation and the threat of further attacks or retaliation, war, civil unrest in the Middle East, adverse weather conditions or other natural disasters, such as Hurricane Katrina, pandemic situations or large scale power outages can have a short term or, sometimes, long term impact on spending. The worldwide recession is placing
severe constraints on the ability of all companies, particularly smaller ones, to raise capital, borrow money, operate effectively and profitably and to plan for the future.
BECAUSE SOME OF OUR OFFICERS AND DIRECTORS WILL ONLY BE DEVOTING LIMITED TIME TO OUR OPERATIONS, OUR OPERATIONS MAY BE SPORADIC WHICH MAY RESULT IN PERIODIC INTERRUPTIONS OR SUSPENSIONS OF OPERATIONS. THIS ACTIVITY COULD PREVENT US FROM ATTRACTING CUSTOMERS AND RESULT IN A LACK OF REVENUES THAT MAY CAUSE US TO SUSPEND OR CEASE OPERATIONS.
Some of our officers and directors will only be devoting limited time to our operations. Because they will only be devoting limited time to our operations, our operations may be sporadic and occur at times which are convenient to them. As a result, operations may be periodically interrupted or suspended, which could result in a lack of revenues and a possible cessation of operations.
BECAUSE PETER J. SMITH, OUR PRESIDENT, OWNS 62.54% OF OUR TOTAL OUTSTANDING COMMON STOCK AND 5,000,000 (100%) SHARES OF OUR TOTAL OUTSTANDING PREFERRED STOCK, MR. SMITH WILL RETAIN CONTROL OF US AND WILL BE ABLE TO DECIDE WHO WILL BE DIRECTORS AND YOU MAY NOT BE ABLE TO ELECT ANY DIRECTORS WHICH COULD DECREASE THE PRICE AND MARKETABILITY OF OUR SHARES.
Peter J. Smith, our President, owns 62.54% of our total outstanding common stock and 100% of our total outstanding preferred stock. As a result, Peter J. Smith will own the vast majority of the shares of our Common Stock, all shares of our preferred stock and super-voting rights attributable to his preferred stock, which allow him to cast two (2) votes per share of preferred stock and he will be able to elect all of our directors and control our operations, which could decrease the price and marketability of our shares.
OUR SHAREHOLDERS MAY BE DILUTED SIGNIFICANTLY THROUGH OUR EFFORTS TO OBTAIN FINANCING, FUND OUR OPERATIONS AND SATISFY OUR OBLIGATIONS THROUGH ISSUANCE OF ADDITIONAL SHARES OF OUR COMMON STOCK.
We have no committed source of financing. We will likely have to issue additional shares of our Common Stock to fund our operations and to implement our plan of operation. Wherever possible, our board of directors will attempt to use non-cash consideration to satisfy obligations. In many instances, we believe that the non-cash consideration will consist of restricted shares of our common stock. Our board of directors has authority, without action or vote of the shareholders, to issue all or part of the 41,219,300 authorized, but unissued, shares of our common stock. Future issuances of shares of our common stock will result in dilution of the ownership interests of existing shareholders, may further dilute common stock book value and that dilution may be material.
BECAUSE THERE IS NO PUBLIC TRADING MARKET FOR OUR COMMON STOCK, YOU MAY NOT
BE ABLE TO RESELL YOUR STOCK.
Our Common Stock is not presently quoted on the Over-the-Counter Bulletin Board or traded in any market. Therefore, you may not be able to resell your stock.
Because the SEC imposes additional sales practice requirements on brokers who deal in our shares that are penny stocks, some brokers may be unwilling to trade them. This means that you may have difficulty reselling your shares and this may cause the price of our shares to decline.
Our shares would be classified as penny stocks and are covered by Section 15(g) of the Securities Exchange Act of 1934 and the rules promulgated thereunder, which impose additional sales practice requirements on brokers/dealers who sell our securities in this offering or in the aftermarket. For sales of our securities, the broker/dealer must make a special suitability
determination and receive from you a written agreement prior to making a sale for you. Because of the imposition of the foregoing additional sales practices, it is possible that brokers will not want to make a market in our shares. This could prevent you from reselling your shares and may cause the price of our shares to decline.
FINRA SALES PRACTICE REQUIREMENTS MAY LIMIT A STOCKHOLDER'S ABILITY TO BUY
AND SELL OUR STOCK.
The FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may have the effect of reducing the level of trading activity and liquidity of our common stock. Further, many brokers charge higher transactional fees for penny stock transactions. As a result, fewer broker-dealers may be willing to make a market in our common stock, which may limit your ability to buy and sell our stock.
OUR ARTICLES OF INCORPORATION AUTHORIZES THE ISSUANCE OF PREFERRED STOCK.
Our Articles of Incorporation authorizes the issuance of up to 5,000,000 shares of preferred stock with designations, rights and preferences determined from time to time by its Board of Directors. Accordingly, our Board of Directors is empowered, without stockholder approval, to issue preferred stock with dividend, liquidation, conversion, voting, or other rights which could adversely affect the voting power or other rights of the holders of the common stock. In the event of issuance, the preferred stock could be utilized, under certain circumstances, as a method of discouraging, delaying or preventing a change in control of the Company.
THIS REGISTRATION STATEMENT CONTAINS FORWARD-LOOKING STATEMENTS AND
INFORMATION RELATING TO US, OUR INDUSTRY AND TO OTHER BUSINESSES.
These forward-looking statements in this registration statement are based on the beliefs of our management, as well as assumptions made by and information currently available to our management. When used in this registration statement, the words "estimate," "project," "believe," "anticipate," "intend," "expect" and similar expressions are intended to identify forward-looking statements. These statements reflect our current views with respect to future events and are subject to risks and uncertainties that may cause our actual results to differ materially from those contemplated in our forward-looking statements. We caution you not to place undue reliance on these forward-looking statements, which speak only as of the date of this registration statement. We do not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this registration statement or to reflect the occurrence of unanticipated events.
ITEM 2. FINANCIAL INFORMATION
The following discussion is intended to provide an analysis of our financial condition and should be read in conjunction with our financial statements and the notes thereto.
RECENT ACCOUNTING PRONOUNCEMENTS
In May 2011, the FASB issued ASU 2011-04, "Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS (International Financial Reporting Standard)." ASU 2011-04 attempts to improve the comparability of fair value measurements disclosed in financial statements prepared in accordance with U.S. GAAP and IFRS. Amendments in ASU 2011-04 clarify the intent of the application of existing fair value measurement and disclosure requirements, as well as change certain measurement requirements and disclosures. ASU 2011-04 is effective for the Company beginning January 1, 2012 and will be applied on a prospective basis. We do not believe that the adoption of ASU 2011-04 will have material effect on our consolidated financial statements.
BUSINESS DEVELOPMENT
RESULTS FOR THE YEAR ENDED DECEMBER 31 2010:
The Company had revenues totaling $2,061,160 and the general and administration costs amounted to a total of $291,913.
The net profit was $1,769,247 and the unrealized gain on the available for sale marketable securities owned by the Company amounted to $166,076, hence the comprehensive income amounted to $1,935,323.
The Company did not pay any interest as interest was not due within the fiscal year.
Based on 21,092,405 weighted average shares outstanding for the year ended December 31 2010, the profit per share was $0.08.
RESULTS FOR THE NINE MONTHS ENDED SEPTEMBER 30 2011:
The Company had revenues amounting to $96,542 for the nine months ended September 2011 and the general and administration costs amounted to a total of $222,692.
The net loss for the nine months ended September 30, 2011 was $(126,150) and the unrealized loss on the available for sale marketable securities owned by the Company amounted to $(1,308,459), hence the comprehensive loss amounted to $(1,434,609).
The Company did not pay any interest as interest was not due within the fiscal year.
Based on 28,720,833 weighted average shares outstanding, for the nine months ended September 30, 2011, the loss per share was $(0.00).
LIQUIDITY AND CAPITAL RESERVES:
Through the nine months ended September 30, 2011 we have relied on advances of $127,223 from loans from shareholders, third party non-affiliates and also proceeds from stock issued for cash. As of September 30, 2011, the Company had cash of $2,700 and a working capital deficit of $89,331.
It is the Company's intention to seek additional debt which we plan to use to use for working capital to implement a marketing program to increase awareness of our business model and also to expand our operations via the acquisition companies that are in a similar space and industry as ours.
Depending upon market conditions, the Company may not be successful in raising sufficient additional capital for it to achieve its business objectives. In such event, the business, prospects, financial condition, and results of operations could be materially adversely affected.
The Company's executive offices are based Dubai and our satellite offices are in London and Marbella (Spain).
Our auditors have not seen the need to include a "Going Concern" note in our 2010 year end audit report. Instead, a liquidity note was included stating that the Company's cash balance was minimal and that the Company expects to meet all of its obligations either by selling its marketable securities or by way of debt and/or equity financing that could be available to the Company.
We have recently signed contracts with three new clients that are valued at $767,000 in fees over the next 24 months and a further 10% equity that has an undetermined value as of today.
We are also in negotiations with two other companies that would like to retain our services. We hope to sign these new clients before December 31, 2011.
This section of the registration statement includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this prospectus. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.
ITEM 3. PROPERTIES
The Company does not own any property. Our executive offices are located at 23 Frond "K" Palm Jumeirah, Dubai, UAE where we are utilizing approximately 600 square feet of Peter Smith's personal offices in Dubai and pay no rent for such privilege. We also have a satellite office located at 1 Berkeley Street, London W1J 8DJ, United Kingdom, which is a service office for which we pay 350 British Pounds per month on a renewable one year lease. Our Business Development Director, Adrian Scarrott, uses our London office on a daily basis and we use the office when our other management members are in London. We have another satellite office located at Avenida Marques del Duero 67, Edificio Bahia 2A, 29670 San Pedro de Alcantara, Marbella, Spain where we are utilizing approximately 1,100 square feet of Enzo Taddei's personal offices in Marbella and pay no rent for such privilege. We have another satellite office at 907
South Riverside Drive, Indiatlantic, Florida 32903 where we are utilizing approximately 200 square feet of Pino Baldassarre's personal offices and pay no rent. Peter J. Smith, our President and Chief Executive Office, is based in Dubai, Enzo Taddei, our Chief Financial Officer, is based in Marbella, Adrian Scarrott, our Business Development Director is based in London and Pino Baldassarre, our Corporate Secretary, is based in Florida.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tables set forth the ownership of our common stock by each person known by us to be the beneficial owner of more than 5% of our outstanding common stock, our directors, and our executive officers and directors as a group. To the best of our knowledge, the persons named have sole voting and investment power with respect to such shares, except as otherwise noted. There are not any pending arrangements that may cause a change in control.
The information presented below regarding beneficial ownership of our voting securities has been presented in accordance with the rules of the U.S. Securities and Exchange Commission and is not necessarily indicative of ownership for any other purpose. Under these rules, a person is deemed to be a "beneficial owner" of a security if that person has or shares the power to vote or direct the voting of the security or the power to dispose or direct the disposition of the security. A person is deemed to own beneficially any security as to which such person has the right to acquire sole or shared voting or investment power within 60 days through the conversion or exercise of any convertible security, warrant, option or other right. More than one person may be deemed to be a beneficial owner of the same securities. The percentage of beneficial ownership by any person as of a particular date is calculated by dividing the number of shares beneficially owned by such person, which includes the number of shares as to which such person has the right to acquire voting or investment power within 60 days, by the sum of the number of shares outstanding as of such date plus the number of shares as to which such person has the right to acquire voting or investment power within 60 days. Consequently, the denominator used for calculating such percentage may be different for each beneficial owner. Except as otherwise indicated below, we believe that the beneficial owners of our common stock listed below have sole voting and investment power with respect to the shares shown.
Number of Percentage of
Name and Address Shares Ownership
---------------- ------ ---------
Peter J. Smith 18,000,000 62.54%
23 Frond "K" Palm Jumeirah
Dubai, UAE
Enzo Taddei 5,000,000 17.37%
Avenida Marques del Duero 67
Edificio Bahia 2A
29670 San Pedro de Alcantara
Marbella, Spain
Pino G. Baldassarre 0 0%
907 South Riverside Drive
Indiatlantic, FL 32903
All officers and directors
as a group (3 persons) 23,000,000 79.91%
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ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS
OFFICERS AND DIRECTORS
Our two directors will serve until their two successors are elected and qualified. Our officers are elected by the board of directors to a term of one year and serve until their successor is duly elected and qualified, or until they are removed from office. Our board of directors has no nominating, auditing or compensation committees.
The names, addresses, ages and positions of our officers, directors and key employees are set forth below:
First Year
Name Age as Director Position
---- --- ----------- --------
Peter James Smith 43 2010 President, Chief Executive Officer
and Director
Enzo Taddei 39 2011 Chief Financial Officer and Director
Pino G. Baldassarre 52 -- Corporate Secretary
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The persons named above were elected to hold their offices until the next annual meeting of our stockholders.
PETER JAMES SMITH - PRESIDENT, CHIEF EXECUTIVE OFFICER AND DIRECTOR
Mr. Smith has an excellent pedigree and track record in building companies before floating them on a recognized stock market. He first qualified as a stockbroker in London in 1986 with Rensburg and Co where he became both a registered equity trader and registered representative of the firm who are a UK registered full service Stockbroker trading Equities, Options, Warrants, Gilts and bonds. He also spent 12 months within the firm covering the back office facilities of a brokerage house including sales, purchase, rights, dividends and new issues. He then moved onto the London Traded Options Market where he passed his LTOM open outcry examinations to become an Options trader for a subsidiary of ABN Amro bank called International Clearing Services (ICS). As an Options trader his remit was to trade options on behalf of all the firms clients and to hedge the positions of the market makers the firm cleared for into the equity market. As the sole dual qualified broker for ICS he was constantly trading in either equities or options either by open outcry or screen dealing on the London Stock Exchange Floor in Threadneedle Street. In 1993 he moved away from the stock market to create an International Financial Services company in the Middle East and Asia. Between 1993 and 2005 he built the business to 23 global offices, 5 country licenses and in 2005 he floated the company for $40m on the American market having built the organization to $2.2bn under management with a staff of approximately 300 people.
ENZO TADDEI - CHIEF FINANCIAL OFFICER AND DIRECTOR
Mr. Taddei was appointed as our Chief Financial Officer and a member of our Board of Directors on September 1, 2011. From November 2010 to the present date, Mr. Taddei has been a member of the Board of Directors and part-time Chief
Financial Officer of Networking Partners, Inc. From May 2009 until the present date, Mr. Taddei has served as Chief Executive Officer and Chief Financial Officer of E3B Consulting Network SL (a firm engaged in accounting). From March 2007 until May 2009, Mr. Taddei served as Chief Financial Officer of Dolphin Digital Media (a company engaged in social networking). From August 2006 until March 2007, Mr. Taddei served as Chief Financial Officer of Plays on the Net PLC (an E Commerce firm). From July 1999 until August 2006, Mr. Taddei served as Chief Executive Officer and Chief Financial Officer of Adesso Res Asesores (an accounting firm). In addition to being an accountant and tax consultant by profession, Mr. Taddei is proficient in three languages: English, Spanish and Italian. He obtained a Degree in Economics from the University of Malaga (Spain) in 1998 and also a Bachelor in Business Administration (BBA) from the University of Wales in 1996. He also holds a Masters Degree in Spanish and International Taxation granted to him by EADE University in Malaga (Spain) in 2000.
PINO G. BALDASSARRE - CORPORATE SECRETARY
Mr. Baldassarre has been our Corporate Secretary since September 1, 2011. From November 2, 2010, until November 14, 2011, Mr. Baldassarre served as the Chief Executive Officer and a member of the Board of Directors of Networking Partners, Inc. Since June 30, 2011, Mr. Baldassarre has served as the Chief Executive Officer of Ecodata Systems Plc (a pharmaceutical recycling company based in the United Kingdom). Mr. Baldassarre served as Chief Executive Officer of Anne's Diary, Inc. (a website design company) on a interim basis from March 1, 2010, to July 29, 2010, for the primary purpose of representing Anne's Diary, Inc. at the United Nations Interregional Crime and Justice Research Institute ("UNICRI"). He has not held any position with Anne's Diary, Inc. since July 29, 2010. Prior to his appointment as interim CEO of Anne's Diary, Inc., Mr. Baldassarre provided advice and consultation to Anne's Diary, Inc. on issues related to Internet Safety.
Mr. Baldassarre has held senior management and director positions of new business start-ups and established multinational organizations and has over 25 years experience in the Security and Communications Industries. With leadership skills in management of international operations, shareholder exit strategies, and overall business development, he has utilized a wide range of strategic programs to maximize organic growth into specific industry segments through OEM, alliances, and direct multi-level distribution channels.
From 2009 until October 2010, Mr. Baldassarre was responsible for the International Development of the Aico anti-counterfeiting program for the prevention of counterfeit prescription drugs. From 2007 until 2009, Mr. Baldassarre was the Managing Director and Chief Executive Officer of Dolphin Digital Media, Inc., a publicly held company that specialized in the field of social networks, Internet security and overall e-commerce. From 2005 until 2007, he acted as Director Business Development of 1231D, a software development firm specializing in biometric solutions. He was acting President of BPT Technologies from 2003 until 2005, we he was responsible for the set up and implementation of a North America division for a European multinational company. Mr. Baldassarre was responsible for Business Development of 123ID, a software development corporation specializing in biometric solutions, and acting President and CEO of BPT Technologies, responsible for the set up and implementation of a North American division for a European multinational company. Over the years he has held many senior positions such as the Managing Director of The Logica Group, a division of The Mackenzie Group, NY, responsible for total corporate infrastructure development, from Intellikey Corporation Florida, as Vice President, and Pacific Entrance Systems in Vancouver, as President and CEO.
Pino is a recognized expert in the field Security(s) and Information Technologies and he is regularly called on to speak at conferences in both Canada and the United States on issues surrounding National Security and
emerging technologies and is a current member of the UNICRI committee regarding IT security issues. His career began in 1980 to 1983, when he was an Analyst and Information Support Specialist in United States - NSA, Level E4 and stationed in Agnano, Italy.
Pino holds a BA in Mathematics with a minor in economics from York University, Toronto and an MBA from INSEAD from Fountainbleau, France.
ADRIAN SCARROTT - BUSINESS DEVELOPMENT DIRECTOR
Adrian Scarrott is an experienced new business development and marketing professional with more than 20-years of experience working with blue chip companies and global brands. Mr. Scarrott ran a very successful marketing/communications consultancy for two years prior to joining the Company's wholly-owned subsidiary, Global Equity Partners PLC, in 2009. From 2006 to 2008, Mr. Scarrott was responsible for developing new business and creating opportunities for the new media offerings for Stageone, a multimedia marketing firm in London and Europe. From 2001 to 2006, Mr. Scarrott served as Sales Director for Seven Soho, another London-based marketing firm. Mr. Scarrott's blue chip client base at Seven Soho included Sony, Proctor & Gamble, Apple Mac and United Airlines. Mr. Scarrott began his career in 1991 at Tapestry, a London-based corporate identity firm, where he served as Sales Director and was responsible for the full management and development of a portfolio of accounts covering all areas of advertising and design, press, outdoor, direct marketing, point of sale marketing, corporate identity, literature and packaging.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS.
No officer, director, or persons nominated for such positions, promoter or significant employee has been involved in the last ten years in any of the following:
* Any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
* Any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
* Being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; and
* Being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.
DIRECTOR QUALIFICATIONS
We do not have a formal policy regarding director qualifications. In the opinion of Peter J. Smith, our President and majority shareholder, both Mr. Taddei and he have sufficient business experience and integrity to carry out the Company's plan of operations. Both Mr. Smith and Mr. Taddei recognize that the Company will have to rely on professional advisors, such as attorneys and accountants with public company experience to assist with compliance with Exchange Act reporting and corporate governance matters.
ABSENCE OF INDEPENDENT DIRECTORS
We do not have any independent directors and are unlikely to be able to recruit and retain any independent directors due to our small size and limited financial resources.
DIRECTORSHIPS
Enzo Taddei is a director of Networking Partners, Inc., a company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934.
AUDIT COMMITTEE FINANCIAL EXPERT
We have not established an Audit Committee. The functions of the Audit Committee are currently being carried out by our Board of Directors.
CONFLICTS OF INTEREST
One of our officers and directors, Enzo Taddei, devotes approximately 20 hours per week to our Company. The only conflict that exists is that Enzo Taddei devotes time to other projects or business interests, none of which conflict with our business activities.
The term of office of each director expires at our annual meeting of stockholders or until their successors are duly elected and qualified.
FAMILY RELATIONSHIPS.
There are no family relationships between or among or officers and directors.
CODE OF ETHICS
We adopted a Code of Business Conduct and Ethics on September 2, 2011.
AUDIT COMMITTEE
The Board of Directors acts as the Audit Committee and the Board has no separate committees. The Company has no qualified financial expert at this time because it has not been able to hire a qualified candidate. Further, the Company believes that it has inadequate financial resources at this time to hire such an expert. The Company intends to continue to search for a qualified individual for hire.
ITEM 6. EXECUTIVE COMPENSATION
The following table sets forth the aggregate compensation paid by the Company and/or its subsidiary, GE Partners PLC, to our executive officers and directors of the Company for services rendered during the periods indicated (from inception of GE Partners PLC on September 2, 2009, through December 31, 2010.
SUMMARY COMPENSATION TABLE
Name and Stock All Other
Principal Position Year (1) Salary ($) Bonus ($) Awards ($) Compensation ($) Total($)
------------------ -------- ---------- --------- ---------- ---------------- --------
Peter J. Smith 2010 $ 34,658 $ 0 $ 0 $ 0 $ 34,658
President, Chief 2009 $100,000 (1) $ 0 $ 0 $ 0 $100,000 (1)
Executive Officer and
Director
Enzo Taddei 2010 $ 0 $ 0 $ 0 $ 0 $ 0
Chief Financial 2009 $ 0 $ 0 $ 0 $ 0 $ 0
Officer and Director
Pino G. Baldassarre 2010 $ 0 $ 0 $ 0 $ 0 $ 0
Secretary 2009 $ 0 $ 0 $ 0 $ 0 $ 0
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EMPLOYMENT AGREEMENTS SUMMARY
PETER JAMES SMITH:
Mr. Smith's employment agreement with the Company was executed on September 1, 2011, and the basic terms were as follows:
1. DUTIES - ASSIGNMENT: Chief Executive Officer (CEO) and Director on Board of Directors
2. COMPENSATION: $240,000 per annum, subject to annual review and adjustment of no less than a 5% percentage increase. The salary will be paid on a monthly basis.
3. EMPLOYMENT: The contract commenced on the first day of September, 2011.
(a) Employment will continue for 36 MONTHS.
(b) The Company and employee agreed to accrue the monthly from September 2011 onwards. Payment of the accrued amounts shall commence no later than January 2nd 2012 and payment of the ongoing monthly salary shall commence on the last working day of January 2012.
4. SEVERANCE PAYMENTS
(a) If Employer terminates this Agreement for any reason other than Disability, Death, Employee shall be entitled to receive, and Employer shall make, the following severance payments:
(i) continue to pay a sum equivalent to SIX MONTHS' SALARY.
(b) If Employer terminates this Agreement by reason of the Disability of Employee or if this Agreement is automatically terminated upon the Death of Employee pursuant to Section 3(b), Employee or his estate shall be entitled to receive, and Employer shall make, the following severance payments:
(i) continue to pay a sum equivalent to FIVE YEARS ANNUAL SALARY via the life assurance scheme to be put in place January 2012
ENZO TADDEI:
Mr. Taddei's employment agreement with the Company was executed on September 1, 2011, and the basic terms were as follows:
1. DUTIES - ASSIGNMENT: Chief Financial Officer (CFO) and Director on Board of Directors
2. COMPENSATION: $120,000 per annum, subject to annual review and adjustment of no less than a 5% percentage increase. The salary will be paid on a monthly basis.
3. EMPLOYMENT: The contract commenced on the first day of September, 2011.
(a) Employment will continue for 36 MONTHS.
(b) The Company and employee agreed to accrue the monthly from September 2011 onwards. Payment of the accrued amounts shall commence no later than January 2nd 2012 and payment of the ongoing monthly salary shall commence on the last working day of January 2012.
4. SEVERANCE PAYMENTS
(a) If Employer terminates this Agreement for any reason other than Disability, Death, Employee shall be entitled to receive, and Employer shall make, the following severance payments:
(i) continue to pay a sum equivalent to SIX MONTHS' SALARY.
(b) If Employer terminates this Agreement by reason of the Disability of Employee or if this Agreement is automatically terminated upon the Death of Employee pursuant to Section 3(b), Employee or his estate shall be entitled to receive, and Employer shall make, the following severance payments:
(i) continue to pay a sum equivalent to FIVE YEARS ANNUAL SALARY via the life assurance scheme to be put in place January 2012.
ADRIAN SCAROTT:
Mr. Scarott's employment agreement with the Company was executed on September 1, 2011, and the basic terms were as follows:
1. DUTIES - ASSIGNMENT: New business coordinator.
2. COMPENSATION: $40,000 per annum. The salary will be paid on a monthly basis.
3. EMPLOYMENT: The contract commenced on the first day of September, 2011.
(a) Employment will continue for 12 months.
(b) The Company and employee agreed to accrue the monthly from September 2011 onwards. Payment of the accrued amounts shall commence no later than January 2nd 2012 and payment of the ongoing monthly salary shall commence on the last working day of January 2012.
4. SEVERANCE PAYMENTS
(a) If Employer terminates this Agreement for any reason other than Disability, Death, Employee shall be entitled to receive, and Employer shall make, the following severance payments:
i. continue to pay a sum equivalent to two months' salary.
(b) If Employer terminates this Agreement by reason of the Disability of Employee or if this Agreement is automatically terminated upon the Death of Employee pursuant to Section 3(b), Employee or his estate shall be entitled to receive, and Employer shall make, the following severance payments:
i. continue to pay a sum equivalent to three years annual salary via the life assurance scheme to be put in place January 2012
STOCK OPTION AND OTHER COMPENSATION PLANS
The Company currently does not have a stock option or any other compensation plan and we do not have any plans to adopt one in the near future.
COMPENSATION OF DIRECTORS
Our two directors do not receive any compensation for serving as a member of our board of directors as they are compensated pursuant to their employment agreements as officers of the Company.
No retirement, pension, profit sharing, stock option or insurance programs or other similar programs have been adopted by the Company for the benefit of its employees.
There are no understandings or agreements regarding compensation our management will receive after a business combination that is required to be included in this table, or otherwise.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
AND DIRECTOR INDEPENDENCE
Although we have not adopted formal procedures for the review, approval or ratification of transactions with related persons, we adhere to a general policy that such transactions should only be entered into if they are on terms that, on the whole, are no more favorable, or no less favorable, than those available
from unaffiliated third parties and their approval is in accordance with applicable law. Such transactions require the approval of our board of directors.
On November 30, 2011, the Company issued 5,000,000 shares of Series A Preferred Stock to Peter J. Smith, its President, as consideration $480,000 as a compensatory bonus.
ABSENCE OF INDEPENDENT DIRECTORS
We do not have any independent directors and are unlikely to be able to recruit and retain any independent directors due to our small size and limited financial resources.
Except as otherwise indicated herein, there have been no related party transactions, or any other transactions or relationships required to be disclosed pursuant to Item 404 of Regulation S-K.
ITEM 8. LEGAL PROCEEDINGS
Presently, there are not any material pending legal proceedings to which the Company is a party or as to which any of its property is subject and the Company does not know nor is it aware of any legal proceedings threatened or contemplated against it.
ITEM 9. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
(a) Market Information. The Company's Common Stock is not trading on any stock exchange. The Company is not aware of any market activity in its stock since its inception and through the date of this filing. There is no assurance that a trading market will ever develop or, if such a market does develop, that it will continue.
The Securities and Exchange Commission has adopted Rule 15g-9 which
establishes the definition of a "penny stock," for purposes relevant to us, as
any equity security that has a market price of less than $5.00 per share or with
an exercise price of less than $5.00 per share, subject to certain exceptions.
For any transaction involving a penny stock, unless exempt, the rules require:
(i) that a broker or dealer approve a person's account for transactions in penny
stocks and (ii) the broker or dealer receive from the investor a written
agreement to the transaction, setting forth the identity and quantity of the
penny stock to be purchased. In order to approve a person's account for
transactions in penny stocks, the broker or dealer must (i) obtain financial
information and investment experience and objectives of the person; and (ii)
make a reasonable determination that the transactions in penny stocks are
suitable for that person and that person has sufficient knowledge and experience
in financial matters to be capable of evaluating the risks of transactions in
penny stocks. The broker or dealer must also deliver, prior to any transaction
in a penny stock, a disclosure schedule prepared by the Commission relating to
the penny stock market, which, in highlight form, (i) sets forth the basis on
which the broker or dealer made the suitability determination and (ii) that the
broker or dealer received a signed, written agreement from the investor prior to
the transaction. Disclosure also has to be made about the risks of investing in
penny stocks in both public offerings and in secondary trading, and about
commissions payable to both the broker-dealer and the registered representative,
current quotations for the securities and the rights and remedies available to
an investor in cases of fraud in penny stock transactions. Finally, monthly
statements have to be sent disclosing recent price information for the penny
stock held in the account and information on the limited market in penny stocks.
(b) Holders. As of the date of this filing, there were 79 record holders of the 28,780,700 shares of the Company's issued and outstanding Common Stock. The issued and outstanding shares of the Company's common stock were issued in accordance with the exemptions from registration afforded by Section 4(2) and/or Regulation S of the Securities Act of 1933, as amended.
(c) Dividends. The Company has not paid any cash dividends to date and does not anticipate or contemplate paying dividends in the foreseeable future. It is the present intention of management to utilize all available funds for the development of the Company's business.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES
The Company originally issued to one person (a United States citizen) a total of 2,000,000 shares of common stock on October 28, 2010 at $.001 per share (par value).
The Company issued 20,000,000 shares of common stock to Peter Smith (non-citizen, non-resident of the United States) pursuant to a Plan and Agreement of Reorganization dated November 15, 2010, when the Company acquired 100% of the common stock of Global Equity Partners PLC in a private transaction, resulting in Global Equity Partners PLC becoming a wholly-owned subsidiary of the Company. Following the closing of this transaction, Peter Smith became our President and Chief Executive Officer and a member of our board of directors.
Effective December 31, 2010, the Company issued 668,000 shares of common stock to seven debt holders (non-citizens, non-residents of the United States) in satisfaction of $263,533.64 in debt owed by the Company.
Effective November 1, 2010, the Company issued 5,000,000 shares of common stock to Enzo Taddei (non-citizen, non-resident of the United States) for services rendered to the Company valued at $5,000. Mr. Taddei became the Chief Financial Officer and a Director of the Company in September 2011.
Effective December 31, 2010, the Company issued 1,000,000 shares of common stock to an individual (non-citizen, non-resident of the United States) in exchange for services rendered to the Company valued at $50,000.
On September 23, 2011, the Company issued 9,600 shares of common stock to an individual (non-citizen, non-resident of the United States) in exchange for services rendered to the Company valued at $4,800.
Between May 2, 2011, and June 15, 2011, the Company issued a total of 103,100 shares of common stock in a private offering to a total of 27 persons (non-citizens, non-residents of the United States) at $.50 per share for an aggregate consideration of $51,550.
The above shares were issued in reliance of the exemption from registration requirements of the 33 Act provided by Section 4(2) or Regulation S of the 33 Act, as the issuance of the stock did not involve a public offering of securities based on the following:
* each investor represented to us that he was acquiring the securities for his own account for investment and not for the account of any other person and not with a view to or for distribution, assignment or resale in connection with any distribution within the meaning of the 33 Act;
* we provided each investor with written disclosure prior to sale or transfer that the securities have not been registered under the 33 Act and, therefore, cannot be resold unless they are registered under the 33 Act or unless an exemption from registration is available;
* each investor agreed not to sell or otherwise transfer the purchased securities unless they are registered under the 33 Act and any applicable state laws, or an exemption or exemptions from such registration are available;
* each investor had knowledge and experience in financial and other business matters such that he was capable of evaluating the merits and risks of an investment in us;
* such investor was given information and access to all of our documents, records, books, officers and directors, our executive offices pertaining to the investment and was provided the opportunity to ask questions and receive answers regarding the terms and conditions of the offering and to obtain any additional information that we possesses or were able to acquire without unreasonable effort and expense;
* each investor had no need for liquidity in their investment in us and could afford the complete loss of their investment in us;
* we did not employ any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio;
* we did not conduct, hold or participate in any seminar or meeting whose attendees had been invited by any general solicitation or general advertising;
* we placed a legend on each certificate or other document that evidences the securities stating that the securities have not been registered under the 33 Act and setting forth or referring to the restrictions on transferability and sale of the securities;
* with respect to the securities issued pursuant to Section 4(2) of the 33 Act, we added the following legend to the certificates:
"The shares represented by this certificate have been issued to the registered owner in reliance upon written representations that these shares have been taken for investment. These shares have not been registered under the Securities Act of 1933, as amended ("Act"), and may not be sold, transferred or assigned unless an opinion of counsel satisfactory to the company has been received by the company to the effect that such sale, transfer or assignment will not be in violation of the Act and the rules and regulations promulgated thereunder or applicable state securities laws."
* with respect to the securities issued pursuant to Regulation S, we added the following legend to the certificates:
"The shares represented by this certificate have not been issued to the registered owner in reliance upon written representations that these shares have not been registered under the Securities Act of 1933 ("Act") and are "restricted securities," as defined under Regulation S, and cannot be sold, transferred, assigned or traded in the United States for a period of 12 months from the date of issue and require written release from either the issuing company or their attorney prior to legend removal."
* we placed stop transfer instructions in our stock transfer records;
* no underwriter was involved in the offering; and
* we made independent determinations that such person was a sophisticated or accredited investor and that he was capable of analyzing the merits and risks of their investment in us, that he understood the speculative nature of their investment in us and that he could lose their entire investment in us.
ITEM 11. DESCRIPTION OF SECURITIES
Our authorized capital stock consists of 70,000,000 shares of Common Stock and 5,000,000 shares of Preferred Stock.
COMMON STOCK
Our authorized capital stock includes 70,000,000 shares of common stock, par value $0.001 per share. The holders of our Common Stock:
* have equal ratable rights to dividends from funds legally available if and when declared by our board of directors;
* are entitled to share ratably in all of our assets available for distribution to holders of common stock upon liquidation, dissolution or winding up of our affairs;
* do not have preemptive, subscription or conversion rights and there are no redemption or sinking fund provisions or rights; and
* are entitled to one non-cumulative vote per share on all matters on which stockholders may vote.
PREFERRED STOCK
We are authorized to issue 5,000,000 shares of preferred stock.
Our Board of Directors is authorized to provide for the issuance of shares of preferred stock in series and, by filing a certificate pursuant to the applicable law of Nevada, to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations or restrictions thereof without any further vote or action by the shareholders. Any shares of preferred stock so issued would have priority over the common stock with respect to dividend or liquidation rights. Any future issuance of preferred stock may have the effect of delaying, deferring or preventing a change in control of our Company without further action by the shareholders and may adversely affect the voting and other rights of the holders of common stock. At present, we have no plans to neither issue any preferred stock nor adopt any series, preferences or other classification of preferred stock.
The issuance of shares of preferred stock, or the issuance of rights to purchase such shares, could be used to discourage an unsolicited acquisition proposal. For instance, the issuance of a series of preferred stock might impede a business combination by including class voting rights that would enable the holder to block such a transaction, or facilitate a business combination by including voting rights that would provide a required percentage vote of the stockholders. In addition, under certain circumstances, the issuance of preferred stock could adversely affect the voting power of the holders of the common stock. Although the Board of Directors is required to make any
determination to issue such stock based on its judgment as to the best interests of our stockholders, the Board of Directors could act in a manner that would discourage an acquisition attempt or other transaction that some, or a majority, of the stockholders might believe to be in their best interests or in which stockholders might receive a premium for their stock over the then market price of such stock. The Board of Directors does not at present intend to seek stockholder approval prior to any issuance of currently authorized stock, unless otherwise required by law or stock exchange rules. We have no present plans to issue any preferred stock.
On November 30, 2011, our Board of Directors approved the creation of Series A Preferred Stock ("Series A Preferred"), and filed an Amended Certificate of Designation with the Secretary of State of Nevada on November 30, 2011. By virtue of the Certificate of Designation, the Series A Preferred has the following rights and preferences:
Number of Shares: 5,000,000
Voting Rights: Each share has two (2) votes
Conversion Rights: Each share will be convertible into two (2) shares
of Common Stock beginning December 1, 2013
Dividend Rights: None
Liquidation Rights: None
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On November 30, 2011, we issued 5,000,000 shares of Series A Preferred Stock ("Series A Preferred") to Peter J. Smith, our President, for an aggregate consideration of $480,000 as a bonus package equal to 24 months of salary.
This description of certain matters relating to the securities of the Company is a summary and is qualified in its entirety by the provisions of the Company's Articles of Incorporation, Certificate of Designation and By-Laws, and any amendments thereto, copies of which have been filed as exhibits to this Form 10.
DIVIDENDS
Dividends, if any, will be contingent upon the Company's revenues and earnings, if any, capital requirements and financial conditions. The payment of dividends, if any, will be within the discretion of the Company's Board of Directors. The Company presently intends to retain all earnings, if any, for use in its business operations and accordingly, the Board of Directors does not anticipate declaring any dividends prior to a business combination.
WARRANTS AND OPTIONS
We have no outstanding warrants or options to acquire our stock,
TRADING OF SECURITIES IN SECONDARY MARKET
The Company presently has 28,780,700 shares of common stock issued and outstanding, all of which are "restricted securities," as that term is defined under Rule 144 promulgated under the Securities Act, in that such shares were issued in private transactions not involving a public offering.
ANTI-TAKEOVER PROVISIONS
There are no Nevada anti-takeover provisions that our Board of Directors has adopted which may have the affect of delaying or preventing a change in control.
STOCK TRANSFER AGENT
Our stock transfer agent is ClearTrust, LLC, 16450 Pointe Village Drive, Suite 201, Lutz, Florida 33558.
REGISTRATION RIGHTS
We have not granted registration rights to any person.
REPORTS TO SHAREHOLDERS
We intend to furnish our shareholders with annual reports that will describe the nature and scope of our business and operations for the prior year and will contain a copy of our audited financial statements for our most recent fiscal year.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article VII, Section 7 of the Company's Bylaws provide that the Company shall indemnify its officers, directors, employees and agents to the fullest extent permitted by the laws of Nevada.
The Nevada Revised Statutes allow us to indemnify our officers, directors, employees, and agents from any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative, except under certain circumstances. Indemnification may only occur if a determination has been made that the officer, director, employee, or agent acted in good faith and in a manner, which such person believed to be in the best interests of the corporation. A determination may be made by the shareholders; by a majority of the directors who were not parties to the action, suit, or proceeding confirmed by opinion of independent legal counsel; or by opinion of independent legal counsel in the event a quorum of directors who were not a party to such action, suit, or proceeding does not exist.
The expenses of officers and directors incurred in defending a civil or criminal action, suit or proceeding must be paid by us as they are incurred and in advance of the final disposition of the action, suit or proceeding, if and only if the officer or director undertakes to repay said expenses to us if it is ultimately determined by a court of competent jurisdiction that he is not entitled to be indemnified by us.
The indemnification and advancement of expenses may not be made to or on behalf of any officer or director if a final adjudication establishes that the officer's or director's acts or omission involved intentional misconduct, fraud or a knowing violation of the law and was material to the cause of action.
The Nevada Revised Statutes allow a company to indemnify our officers, directors, employees, and agents from any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative, except under certain circumstances. Indemnification may only occur if a determination has been made that the officer, director, employee, or agent acted in good faith and in a manner, which such person believed to be in the best interests of the corporation. A determination may be made by the stockholders; by a majority of the directors who were not parties to the action, suit, or proceeding confirmed by opinion of independent legal counsel; or by opinion of independent legal counsel in the event a quorum of directors who were not a party to such action, suit, or proceeding does not exist.
SECURITIES AND EXCHANGE COMMISSION POSITION ON INDEMNIFICATION
Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to directors, officers and controlling persons of the company, we have been advised by our special securities counsel that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy and is, therefore, unenforceable.
AUTHORIZED BUT UNISSUED CAPITAL STOCK
Nevada law does not require shareholder approval for any issuance of authorized shares. However, the marketplace rules of the NASDAQ, which would apply only if our common stock were ever listed on the NASDAQ, which is unlikely for the foreseeable future, require shareholders approval of certain issuances of common stock equal to or exceeding 20% of the then outstanding voting power or then outstanding number of shares of common stock, including in connection with a change of control of the Company, the acquisition of the stock or assets of another company or the sale or issuance of common stock below the book or market value price of such stock. These additional shares may be used for a variety of corporate purposes, including future public offerings to raise additional capital or to facilitate corporate acquisitions.
One of the effects of the existence of unissued and unreserved common stock may be to enable our board of directors to issue shares to persons friendly to current management, which issuance could render more difficult or discourage an attempt to obtain control of our board by means of a merger, tender offer, proxy contest or otherwise, and thereby protect the continuity and entrenchment of our management and possibly deprive the shareholders of opportunities to sell their shares of our common stock at prices higher then prevailing market prices.
SHAREHOLDER MATTERS
As an issuer of "penny stock," the protection provided by the federal securities laws relating to forward-looking statements does not apply to us if our shares are considered to be penny stocks. Although the federal securities laws provide a safe harbor for forward-looking statements made by a public company that files reports under the federal securities laws, this safe harbor is not available to issuers of penny stocks. As a result, we will not have the benefit of this safe harbor protection in the event of any claim that the material provided by us, including this prospectus, contained a material misstatement of fact or was misleading in any material respect because of our failure to include any statements necessary to make the statements not misleading.
ITEM 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The audited financial statements of Global Equity International, Inc. for the years ended December 31, 2010 (consolidated) and 2009 appear beginning at page F-1, and the unaudited financial statements of Global Equity International, Inc. for the nine months ended September 30, 2011 (consolidated) and 2010, appear beginning at F-19.
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
There are not and have not been any disagreements between the Registrant and its accountants on any matter of accounting principles, practices or financial statement disclosure.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
(b) Exhibits
The following Exhibits are filed as part of this Registration Statement:
Exhibit No. Document Description
----------- --------------------
2 Plan and Agreement of Reorganization dated November 15, 2010,
among Global Equity International, Inc., Global Equity Partners
PLC and Stockholders of Global Equity Partners LLC
3.1 Articles of Incorporation
3.2 Bylaws
4.1 Specimen Stock Certificate
4.2 Certificate of Amendment to Certificate of Designation of Series A
Convertible Preferred Stock
10.1 Employment Agreement dated September 1, 2011, with Peter J. Smith
10.2 Employment Agreement dated September 1, 2011, with Enzo Taddei
10.3 Employment Agreement dated September 1, 2011, with Adrian Scarrott
10.4 Consulting Agreement between Global Equity Partners PLC and Black
Swan Data Ltd. dated July 29, 2011
10.5 Consulting Agreement between Global Equity Partners PLC and Arrow
Cars SL dated January 14, 2011
10.6 Consulting Agreement between Global Equity Partners PLC and RFC
K.K. dated October 19, 2011
10.7 Consulting Agreement between Global Equity Partners PLC and M1
Luxembourg AG dated December 20, 2010
10.8 Consulting Agreement between Global Equity Partners PLC and Monkey
Rock Group, Inc. dated November 26, 2009
14 Code of Business Conduct and Ethics adopted on September 2, 2011
21 Subsidiaries
|
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this Form 10 registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.
Global Equity International, Inc.
Date: December 1, 2011 By: /s/ Peter J. Smith
----------------------------------------
Name: Peter J. Smith
Title: President, Chief Executive Officer
and Director
|
Global Equity International, Inc.
Date: December 1, 2011 By: /s/ Enzo Taddei
----------------------------------------
Name: Enzo Taddei
Title: Chief Executive Officer and Director
|
Global Equity International, Inc. and Subsidiary Financial Statements December 31, 2010 and 2009
CONTENTS
Page(s)
-------
Report of Independent Registered Public Accounting Firm F-3
Balance Sheets -December 31, 2010 (Consolidated) and 2009 F-4
Statements of Operations and Comprehensive Income (Loss)
Periods Ended December 31, 2010 (Consolidated) and 2009 F-5
Statement of Stockholders' Equity
Periods Ended December 31, 2010 (Consolidated) and 2009 F-6
Statements of Cash Flows
Periods Ended December 31, 2010 (Consolidated) and 2009 F-7
|
Notes to Financial Statements
Periods Ended December 31, 2010 (Consolidated) and 2009 F-8 through F-18
[LETTERHEAD OF BERMAN & COMPANY, P.A.]
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of:
Global Equity International, Inc.
We have audited the accompanying balance sheets of Global Equity International, Inc. and Subsidiary, as of December 31, 2010 (consolidated) and 2009, and the related statements of operations and comprehensive income (loss), stockholders' equity and cash flows for the periods ended December 31, 2010 (consolidated) and 2009. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included considerations of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Global Equity International, Inc. and Subsidiary as of December 31, 2010 (consolidated) and 2009, and the results of its operations and comprehensive income (loss), and its cash flows for the periods then ended, in conformity with accounting principles generally accepted in the United States of America.
/s/ Berman & Company, P.A. ----------------------------------- Boca Raton, Florida October 13, 2011, except for Note 9 as to which the date is November 30, 2011 |
Global Equity International, Inc. and Subsidiary Balance Sheets
December 31, 2010 December 31, 2009
----------------- -----------------
(Consolidated)
ASSETS
CURRENT ASSETS
Cash $ 3,275 $ 3,380
Prepaids 551 7,225
---------- ----------
TOTAL CURRENT ASSETS 3,826 10,605
Marketable securities 2,227,236 --
---------- ----------
TOTAL ASSETS $2,231,062 $ 10,605
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 23,357 $ 3,757
---------- ----------
TOTAL CURRENT LIABILITIES 23,357 3,757
---------- ----------
STOCKHOLDERS' EQUITY:
Preferred stock: 5,000,000 shares authorized and 0 shares
authorized and outstanding, $0.001 par value -- --
Common stock: 70,000,000 shares authorized and 28,668,000 and
20,000,000 shares issued and outstanding, $0.001 par value 28,668 20,000
Additional paid in capital 336,866 80,000
Retained earnings (accumulated deficit) 1,676,095 (93,152)
Accumulated other comprehensive income 166,076 --
---------- ----------
TOTAL STOCKHOLDERS' EQUITY 2,207,705 6,848
---------- ----------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $2,231,062 $ 10,605
========== ==========
|
See accompanying notes to financial statements
Global Equity International, Inc. and Subsidiary Statements of Operations and Comprehensive Income (Loss)
Years Ended December 31,
2010 2009
------------ ------------
(Consolidated)
Revenue $ 2,061,160 $ 15,000
General and administrative expenses 291,913 108,152
------------ ------------
NET INCOME (LOSS) $ 1,769,247 $ (93,152)
============ ============
Net income (loss) per share - basic and diluted $ 0.08 $ (0.00)
============ ============
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED 21,092,405 20,000,000
============ ============
COMPREHENSIVE INCOME (LOSS):
Net income (loss) $ 1,769,247 $ (93,152)
Unrealized gain on available for sale marketable securities 166,076 --
------------ ------------
COMPREHENSIVE INCOME (LOSS) $ 1,935,323 $ (93,152)
============ ============
|
See accompanying notes to financial statements
Global Equity International, Inc. and Subsidiary Statement of Stockholders' Equity Years ended December 31 2010 (Consolidated) and 2009
Retained Accumulated
Common Stock Additional Earnings Other Total
------------------ Paid-in (Accumulated Comprehensive Stockholders'
Shares Amount Capital Deficit) Income Equity
------ ------ ------- -------- ------ ------
Stock issued for services -
related party ($0.005/share) 20,000,000 $20,000 $ 80,000 $ -- $ -- $ 100,000
Net loss - 2009 -- -- -- (93,152) -- (93,152)
---------- ------- -------- ---------- -------- ----------
Balance - December 31, 2009 20,000,000 20,000 80,000 (93,152) -- 6,848
Stock issued in connection with debt
conversion ($0.40/share) 668,000 668 264,866 -- -- 265,534
Recapitalization 8,000,000 8,000 (8,000) -- -- --
Net income - 2010 -- -- -- 1,769,247 -- 1,769,247
Unrealized gain on available for sale
marketable securities -- -- -- -- 166,076 166,076
---------- ------- -------- ---------- -------- ----------
BALANCE - DECEMBER 31, 2010 28,668,000 $28,668 $336,866 $1,676,095 $166,076 $2,207,705
========== ======= ======== ========== ======== ==========
|
See accompanying notes to financial statements
Global Equity International, Inc. and Subsidiary Statements of Cash Flows
Years Ended December 31,
2010 2009
------------ ------------
(Consolidated)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Profit (Loss) $ 1,769,247 $ (93,152)
Adjustments to reconcile net income (loss) to
cash used in operating activities:
Stock issued for services - related party -- 100,000
Stock issued for services -- --
Marketable securities received as revenue (2,061,160) --
Changes in operating assets and operating liabilities:
Prepaid expenses 6,674 (7,225)
Accounts Payable 19,600 3,757
------------ ------------
NET CASH USED IN OPERATING ACTIVITIES (265,639) 3,380
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from convertible debt 265,534 --
------------ ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 265,534 --
------------ ------------
NET INCREASE (DECREASE) IN CASH (105) 3,380
CASH - BEGINNING OF PERIOD 3,380 --
------------ ------------
CASH - END OF PERIOD $ 3,275 $ 3,380
============ ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid $ -- $ --
============ ============
Income taxes $ -- $ --
============ ============
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Stock issued in connection with debt conversion $ 265,534 $ --
============ ============
|
See accompanying notes to financial statements
Global Equity International Inc. and Subsidiary Notes to Financial Statements December 31, 2010 (Consolidated) and 2009
NOTE 1 NATURE OF OPERATIONS
Global Equity Partners, PLC ("GEP"), a private company, was organized under the laws of the Republic of Seychelles on September 2, 2009. Global Equity International Inc. (the "Company" or "GEI"), a private company, was organized under the laws of the state of Nevada on October 1, 2010. On November 15, 2010, GEP executed a reverse recapitalization with GEI. See Note 3.
Revenue is generated from business consulting services, introduction fees, and equity participation.
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
All significant inter-company accounts and transactions have been eliminated in consolidation.
USE OF ESTIMATES
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of financial statements and the reported amounts of revenue and expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future non confirming events. Accordingly, the actual results could differ from those estimates.
RISKS AND UNCERTAINTIES
The Company's operations are subject to significant risk and uncertainties including financial, operational, competition and potential risk of business failure. The risk of social and governmental factors is also a concern since the Company is headquartered in Dubai.
CASH
The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. At December 31, 2010 and 2009, respectively, the Company had no cash equivalents.
Global Equity International Inc. and Subsidiary Notes to Financial Statements December 31, 2010 (Consolidated) and 2009
MARKETABLE SECURITIES
(A) CLASSIFICATION OF SECURITIES
At the time of acquisition a security is designated as held-to-maturity, available-for-sale or trading, which depends on ability and intent to hold such security to maturity. Securities classified as trading and available-for-sale are reported at fair value, while securities classified as held-to-maturity are reported at amortized cost.
Any unrealized gains and losses are reported as other comprehensive income
(loss). Realized gains (losses) are computed on a specific identification basis
and are recorded in net capital gains (losses) on investments in the combined
consolidated statements of operations
All securities held at December 31, 2010 are designated as available for sale.
(B) OTHER THAN TEMPORARY IMPAIRMENT
The Company reviews its equity investment portfolio for any unrealized losses that would be deemed other-than-temporary and require the recognition of an impairment loss in income. If the cost of an investment exceeds its fair value, the Company evaluates, among other factors, general market conditions, the duration and extent to which the fair value is less than cost, and the Company's intent and ability to hold the investments. Management also considers the type of security, related-industry and sector performance, as well as published investment ratings and analyst reports, to evaluate its portfolio. Once a decline in fair value is determined to be other than temporary, an impairment charge is recorded and a new cost basis in the investment is established. If market, industry, and/or investee conditions deteriorate, the Company may incur future impairments. The Company has not recorded any impairment losses for the year ended December 31, 2010.
REVENUE RECOGNITION
Revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed, and collectability of the related fee is reasonably assured. The Company's services do not include a provision for cancellation, termination, or refunds.
In 2010, the Company received marketable securities as consideration for services rendered. In 2009, revenues were generated from consulting services for cash.
Global Equity International Inc. and Subsidiary Notes to Financial Statements December 31, 2010 (Consolidated) and 2009
During 2010 and 2009, the Company had the following concentrations of revenues with customers:
Customer 2010 2009 -------- ---- ---- A 53% --% B 47% 100% |
SHARE-BASED PAYMENTS
Generally, all forms of share-based payments, including stock option grants, warrants, restricted stock grants and stock appreciation rights are measured at their fair value on the awards' grant date, based on estimated number of awards that are ultimately expected to vest. Share-based compensation awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable.
INCOME TAXES
Income taxes are accounted for under the asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating loss carryforwards. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided to reduce the carrying amount of deferred income tax assets if it is considered more likely than not that some portion, or all, of the deferred income tax assets will not be realized.
At December 31, 2009, the Company was not subject to federal and state income taxes; accordingly, no provision had been made. The financial statements reflect GEP's transactions without adjustment, if any, required for income tax purposes for the year ended December 31, 2009 and through November 15, 2010, the date of the reverse recapitalization.
The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.
Global Equity International Inc. and Subsidiary Notes to Financial Statements December 31, 2010 (Consolidated) and 2009
The Company will record interest and penalties related to unrecognized tax benefits in income tax expense. There were none for the years ended December 31, 2010 and 2009.
The Company may be subject to examination by the Internal Revenue Service ("IRS") and state taxing authorities for all open tax years.
The Company should not be subject to income tax in the Seychelles Islands. A company is subject to Seychelles income tax if it does business in Seychelles. A company that is incorporated in Seychelles, but that does not do business in Seychelles, is not subject to income tax there. The Company did not do business in Seychelles for the year ended December 31, 2010, and the Company does not intend to do business in Seychelles in the future. All business activities were performed in Dubai for the year ended December 31, 2010. Dubai does not have an income tax.
EARNINGS PER SHARE
Basic earnings (loss) per share is computed by dividing net income (loss) by
weighted average number of shares of common stock outstanding during each
period. Diluted earnings (loss) per share is computed by dividing net income
(loss) by the weighted average number of shares of common stock, common stock
equivalents and potentially dilutive securities outstanding during the period.
The Company has no common stock equivalents, which, if exercisable, would be anti-dilutive. A separate computation of diluted earnings (loss) per share is not presented.
COMPREHENSIVE INCOME (LOSS)
Consists of the change in unrealized gain (loss) on available-for-sale marketable securities.
Global Equity International Inc. and Subsidiary Notes to Financial Statements December 31, 2010 (Consolidated) and 2009
FAIR VALUE FOR FINANCIAL ASSETS AND LIABILITIES
The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. The following are the hierarchical levels of inputs to measure fair value:
* Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
* Level 2: Inputs reflect: quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted arices that are observable for the assets or liabilities; or inputs that are derived principally from or porroborated by observable market data by correlation or other means.
* Level 3: Unobservable inputs reflecting the Company's assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available.
The carrying amounts reported in the balance sheet for cash, marketable securities and accounts payable approximate fair value based on the short-term nature of these instruments.
The Company has assets measured at fair market value on a recurring basis. Consequently, the Company had gains and losses reported in the statement of comprehensive income (loss), that were attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date for the year ended December 31, 2010.
Global Equity International Inc. and Subsidiary Notes to Financial Statements December 31, 2010 (Consolidated) and 2009
The following is the Company's asset measured at fair value on a nonrecurring basis at December 31, 2010 and 2009, using quoted prices in active markets for identical assets (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3):
December 31, 2010 December 31, 2009
----------------- -----------------
Level 1 $ -- $ --
Level 2
Marketable Securities 2,227,236 --
Level 3 -- --
---------- ----------
Total $2,227,236 $ --
========== ==========
|
RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS
In June 2011, the FASB issued ASU No. 2011-05, Comprehensive Income (Topic 220):
Presentation of Comprehensive Income. The guidance in ASU 2011-05 applies to
both annual and interim financial statements and eliminates the option for
reporting entities to present the components of other comprehensive income as
part of the statement of changes in stockholders' equity. This ASU also requires
consecutive presentation of the statement of net income and other comprehensive
income. Finally, this ASU requires an entity to present reclassification
adjustments on the face of the financial statements from other comprehensive
income to net income. The amendments in this ASU should be applied
retrospectively and are effective for fiscal year, and interim periods within
those years, beginning after December 15, 2011. The Company has early adopted
this guidance in these financial statements.
RECENT ACCOUNTING PRONOUNCEMENTS
In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. The guidance in ASU 2011-04 changes the wording used to describe the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements, including clarification of the FASB's intent about the application of existing fair value and disclosure requirements and changing a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. The amendments in this ASU should be applied prospectively and are effective for interim and annual periods beginning after December 15, 2011. Early adoption by public entities is not permitted. The adoption of this guidance is not expected to have a material impact on the Company's financial position or results of operations.
Global Equity International Inc. and Subsidiary Notes to Financial Statements December 31, 2010 (Consolidated) and 2009
NOTE 3 REVERSE RECAPITALIZATION
On November 15, 2010, the Company merged with GEP, a private corporation, and GEP became the surviving corporation, in a transaction treated as a reverse recapitalization. GEI did not have any material operations and majority-voting control was transferred to GEP.
In the recapitalization, GEI issued 20,000,000 shares of common stock in exchange for all of GEP's 100,000 issued and outstanding shares of commons stock. For financial statement reporting purposes, the 100,000 shares have been recasted to 20,000,000 shares in accordance with an exchange ratio of 200 for 1. The balance of the common shares issued and outstanding in GEI prior to the recapitalization were 8,000,000 common shares, and these common shares represent the common shares issued and outstanding in GEI prior to the recapitalization that were not contemplated in the share exchange. The transaction resulted in GEP's shareholders acquiring approximately 72% control.
The transaction also required a recapitalization of GEP. Since GEP acquired a controlling voting interest, it was deemed the accounting acquirer, while GEI was deemed the legal acquirer. The historical financial statements of the Company are those of GEP and of the consolidated entities from the date of recapitalization and subsequent.
Since the transaction is considered a reverse recapitalization, the presentation of pro-forma financial information was not required. All share and per share amounts have been retroactively restated to the earliest periods presented to reflect the transaction.
NOTE 4 MARKETABLE SECURITIES AND FAIR VALUE
The following table represents the Company's available for sale marketable securities holdings as of December 31, 2010:
Equity securities - receipt date $ 2,061,160
Unrealized gains - 2010 210,000
Unrealized losses - 2010 (43,924)
-----------
Equity securities at fair value $ 2,227,236
===========
|
All securities acquired from customer "A" are unrestricted. All securities acquired from customer "B" became unrestricted in 2011.
Global Equity International Inc. and Subsidiary Notes to Financial Statements December 31, 2010 (Consolidated) and 2009
NOTE 5 DEBT
During 2010, the Company issued convertible notes for $265,534 to third parties. In connection with the recapitalization, these notes were converted into 668,000 shares of common stock, representing a conversion price of $0.40/share. There was no gain or loss on conversion.
NOTE 6 INCOME TAXES
The provision for income taxes results in an effective rate as follows at December 31, 2010:
Statutory federal income tax 34.0%
Florida income tax 5.5%
----------
Total effective blended rate 37.63%
==========
|
The Company's provision (benefit) for income taxes was as follows at December 31, 2010:
Current:
Federal $ --
State --
----------
Total --
----------
Deferred:
Federal --
State --
----------
Total --
----------
Continuing operations $ --
==========
|
The income tax provision differs from the amount of tax determined by applying the federal statutory rate as follows at December 31, 2010:
Income tax provision at statutory rate $ 582,844
Increase (decrease) in income tax due to:
Non-taxable foreign earnings (601,544)
State taxes (2,000)
Change in valuation allowance 20,700
----------
Total $ --
==========
|
Global Equity International Inc. and Subsidiary Notes to Financial Statements December 31, 2010 (Consolidated) and 2009
Net deferred tax assets and liabilities were comprised of the following at December 31, 2010:
Deferred tax assets (liabilities), non-current:
Net operating loss $ 20,700
Valuation allowance (20,700)
----------
Net deferred tax asset (liability) $ --
==========
|
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income taxes.
During the year ended December 31, 2010, the Company generated a net operating loss of $55,000 for federal and Florida income tax purposes. This loss can be carried forward and used to offset taxable income in future years and expires on December 31, 2030.
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. As of December 31, 2010, based upon the levels of historical taxable income and the limited experience of the Company, the Company believes that it is more likely than not that it will not be able to realize the benefits of some of these deductible differences. Accordingly, a valuation allowance of $20,700 has been provided in the accompanying financial statements as of December 31, 2010.
The Company's net operating loss available to offset Florida income taxes in future years is $55,000. For state purposes, net operating losses can only be carried forward. The Company has recorded a full valuation allowance against the net operating loss since the loss may never be utilized.
From November 15, 2010 to December 31, 2010, GEP incurred a loss of $19,698; therefore, it had negative earnings and profits and does not have any foreign earnings and profits to be distributed. Since the GEP does not have any undistributed earnings, the Company has not recorded a deferred tax liability associated with the foreign earnings.
GEP is not subject to any foreign income taxes for the year ended December 31, 2010.
NOTE 7 STOCKHOLDERS' EQUITY
In 2009, the Company issued 20,000,000 shares of common stock, having a fair value of $100,000 ($0.005/share), to the Company's Chief Executive Officer, in connection with pre-incorporation services rendered. Fair value was based on the value of services provided, as this reflected the best evidence of fair value for an entity that is not publicly traded.
NOTE 8 LIQUIDITY
At December 31, 2010, and through the date of the accompanying report, the Company's cash balance is minimal, however, the Company expects that it can meet all of its current obligations if necessary by selling its marketable securities to generate cash flows. The Company also believes that related party debt and/or equity financing could be available if needed under favorable terms.
NOTE 9 SUBSEQUENT EVENTS
The Company has evaluated for subsequent events between the balance sheet date of December 31, 2010 and October 13, 2011, the date the financial statements were available to be issued, and concluded that events or transactions occurring during that period requiring recognition or disclosure are as follows:
(A) STOCK ISSUANCES
COMMON STOCK
In May and June 2011, the Company issued 103,100 shares of common stock for $51,550 ($0.50/share).
On September 23, 2011, the Company issued 9,600 shares of common stock for services rendered, having a fair value of $4,800 ($0.50/share), based upon recent third party cash offerings.
PREFERRED STOCK
On November 30 2011, the Company designated Series A Preferred Stock, with the following rights:
* Voting rights - each share has two votes.
* Conversion - each share is convertible into two shares of common stock
beginning on December 1, 2012
* Number of shares - 5,000,000
The Company issued 5,000,000 Series A convertible preferred shares of stock, as a bonus to its Chief Executive Officer for services rendered, having a fair value of $480,000 ($0.096/share), based upon the fair value of the services rendered, which represents the best evidence of fair value.
(B) DEBT
On July 5, 2011, the Company received an advance of $35,500 from a third party. The advance was non-interest bearing, unsecured and due on demand. The loan was repaid in September 2011.
Global Equity International Inc. and Subsidiary Notes to Financial Statements December 31, 2010 (Consolidated) and 2009
(C) EMPLOYMENT AGREEMENTS
Effective September 1, 2011, the Company executed an employment agreement with its Chief Executive Officer and Chief Financial Officer, under the following terms:
* Salary - $120,000 - 240,000 per year,
* Stock options - amount yet to be determined; and
* Term - 3 years
Global Equity International, Inc. and Subsidiary Financial Statements September 30, 2011
(Unaudited)
CONTENTS
Page(s)
-------
Consolidated Balance Sheets - September 30, 2011 (unaudited)
and December 31, 2010 (Consolidated) F-21
Statements of Operations and Comprehensive Income (Loss) F-22
Nine Months Ended September 30, 2011 (consolidated)
and September 30, 2010 (unaudited)
Statement of Stockholders' Equity F-23
Nine Months Ended September 30, 2011 (consolidated) (unaudited)
Statements of Cash Flows F-24
Nine Months Ended September 30, 2011 (consolidated)
and September 30, 2010 (Unaudited)
|
Notes to Financial Statements (unaudited) F-25 through F-32
Global Equity International, Inc. and Subsidiary Consolidated Balance Sheets
September 30, 2011 December 31, 2010
------------------ -----------------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash $ 2,700 $ 3,275
Prepaids 551 551
----------- -----------
TOTAL CURRENT ASSETS 3,251 3,826
MARKETABLE SECURITIES 752,701 2,227,236
----------- -----------
TOTAL ASSETS $ 755,952 $ 2,231,062
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 52,409 $ 23,357
Loans payable - shareholders 40,173 --
----------- -----------
TOTAL CURRENT LIABILITIES 92,582 23,357
----------- -----------
STOCKHOLDERS' EQUITY:
Preferred Stock: 5,000,000 shares authorized and no shares
issued and outstanding, $0.001 par value -- --
Common Stock: 70,000,000 shares authorized and 28,780,700
and 28,668,000 shares issued and outstanding 28,781 28,668
Additional Paid In Capital 393,103 336,866
Retained Earnings 1,549,945 1,676,095
Accumulated Other Comprehensive Income (Loss) (1,308,459) 166,076
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 663,370 2,207,705
----------- -----------
Total Liabilities & Stockholders' Equity $ 755,952 $ 2,231,062
=========== ===========
|
See accompanying notes to financial statements
Global Equity International, Inc. and Subsidiary Statements of Operations and Comprehensive Income (Loss)
Nine Months Ended September 30,
2011 2010
------------ ------------
(Consolidated)
(Unaudited) (Unaudited)
Revenue $ 96,542 $ 2,061,160
General and administrative expenses 222,692 81,818
------------ ------------
NET INCOME (LOSS) $ (126,150) $ 1,979,342
============ ============
NET INCOME (LOSS) PER SHARE - BASIC AND DILUTED $ (0.00) $ 0.10
============ ============
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING -
BASIC AND DILUTED 28,720,833 20,000,000
============ ============
COMPREHENSIVE INCOME (LOSS):
Net income (loss) $ (126,150) $ 1,979,342
Unrealized loss on available for sale
marketable securities (1,308,459) (1,277,600)
------------ ------------
COMPREHENSIVE INCOME (LOSS) $ (1,434,609) $ 701,742
============ ============
|
See accompanying notes to financial statements
Global Equity International, Inc. and Subsidiary Consolidated Statement of Stockholders' Equity For the period ended September 30, 2011
(Unaudited)
Retained Accumulated
Common Stock Additional Earnings Other Total
------------------ Paid-in (Accumulated Comprehensive Stockholders'
Shares Amount Capital Deficit) Income Equity
------ ------ ------- -------- ------ ------
Balance - December 31, 2009 20,000,000 $20,000 $ 80,000 $ (93,152) $ -- $ 6,848
Stock issued in connection with debt
conversion ($0.40/share) 668,000 668 264,866 -- -- 265,534
Recapitalization 8,000,000 8,000 (8,000) -- -- --
Net income - 2010 -- -- -- 1,769,247 -- 1,769,247
Unrealized gain on available for sale
marketable securities -- -- -- -- 166,076 166,076
---------- ------- -------- ---------- ----------- -----------
BALANCE - DECEMBER 31, 2010 28,668,000 28,668 336,866 1,676,095 166,076 2,207,705
Stock issued for services
($0.50/share) 103,100 103 51,447 -- -- 51,550
Stock issued for services
($0.50/share) 9,600 10 4,790 -- -- 4,800
Net loss - 2011 -- -- -- (126,150) -- (126,150)
Unrealized loss on available for sale
marketable securities -- -- -- -- (1,474,535) (1,474,535)
---------- ------- -------- ---------- ----------- -----------
BALANCE - SEPTEMBER 30, 2011 28,780,700 $28,781 $393,103 $1,549,945 $(1,308,459) $ 663,370
========== ======= ======== ========== =========== ===========
|
See accompanying notes to financial statements
Global Equity International, Inc. and Subsidiary Statements of Cash Flows
Nine Months Ended September 30,
2011 2010
------------ ------------
(Consolidated)
(Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (126,150) $ 1,979,342
Adjustments to reconcile net loss to net
cash used in by operating activities:
Stock issued for services 4,800 --
Marketable securities received as revenue -- (2,061,160)
Changes in operating assets and operating liabilities:
Prepaid expenses -- 6,674
Accounts payable 29,052 22,445
------------ ------------
NET CASH USED IN OPERATING ACTIVITIES (92,298) (52,699)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from loans payable - shareholders 40,173 3,757
Proceeds from loans payable 35,500 --
Repayments from loans payable (35,500) --
Proceeds from convertible debt -- 236,581
Proceeds from stock issued for cash 51,550 --
------------ ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 91,723 240,338
------------ ------------
NET INCREASE (DECREASE) IN CASH $ (575) $ 187,639
============ ============
CASH - BEGINNING OF PERIOD 3,275 3,380
------------ ------------
CASH - END OF PERIOD $ 2,700 $ 191,019
============ ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid $ -- $ --
============ ============
Income taxes $ -- $ --
============ ============
|
See accompanying notes to financial statements
Global Equity International Inc. and Subsidiary Notes to Consolidated Financial Statements September 30, 2011
(Unaudited)
NOTE 1 BASIS OF PRESENTATION
The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim financial information. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. It is management's opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation.
The unaudited interim consolidated financial statements should be read in conjunction with the Company's Annual Report on Form S-1, which contains the audited financial statements and notes thereto, together with the Management's Discussion and Analysis, for the periods ended December 31, 2010 and 2009. The interim results for the period ended September 30, 2011 are not necessarily indicative of results for the full fiscal year.
NOTE 2 NATURE OF OPERATIONS
Global Equity Partners, PLC ("GEP"), a private company, was organized under the laws of the Republic of Seychelles on September 2, 2009. Global Equity International Inc. (the "Company" or "GEI"), a private company, was organized under the laws of the state of Nevada on October 1, 2010. On November 15, 2010, GEP executed a reverse recapitalization with GEI. See Note 3.
Revenue is generated from business consulting services, introduction fees, and equity participation.
NOTE 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
All significant inter-company accounts and transactions have been eliminated in consolidation.
USE OF ESTIMATES
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of financial statements and the reported amounts of revenue and expenses during the reporting period.
Global Equity International Inc. and Subsidiary Notes to Consolidated Financial Statements September 30, 2011
(Unaudited)
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future non confirming events. Accordingly, the actual results could differ from those estimates.
RISKS AND UNCERTAINTIES
The Company's operations are subject to significant risk and uncertainties including financial, operational, competition and potential risk of business failure. The risk of social and governmental factors is also a concern since the Company is headquartered in Dubai.
MARKETABLE SECURITIES
(A) CLASSIFICATION OF SECURITIES
At the time of acquisition, a security is designated as held-to-maturity, available-for-sale or trading, which depends on ability and intent to hold such security to maturity. Securities classified as trading and available-for-sale are reported at fair value, while securities classified as held-to-maturity are reported at amortized cost.
Any unrealized gains and losses are reported as other comprehensive income
(loss). Realized gains (losses) are computed on a specific identification basis
and are recorded in net capital gains (losses) on investments in the combined
consolidated statements of operations
All securities held at September 30, 2011 are designated as available for sale.
(B) OTHER THAN TEMPORARY IMPAIRMENT
The Company reviews its equity investment portfolio for any unrealized losses that would be deemed other-than-temporary and require the recognition of an impairment loss in income. If the cost of an investment exceeds its fair value, the Company evaluates, among other factors, general market conditions, the duration and extent to which the fair value is less than cost, and the Company's intent and ability to hold the investments. Management also considers the type of security, related-industry and sector performance, as well as published investment ratings and analyst reports, to evaluate its portfolio. Once a decline in fair value is determined to be other than temporary, an impairment charge is recorded and a new cost basis in the investment is established. If market, industry, and/or investee conditions deteriorate, the Company may incur future impairments. The Company has not recorded any impairment losses for the periods ended September 30, 2011 and 2010.
Global Equity International Inc. and Subsidiary Notes to Consolidated Financial Statements September 30, 2011
(Unaudited)
REVENUE RECOGNITION
Revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed, and collectability of the related fee is reasonably assured. The Company's services do not include a provision for cancellation, termination, or refunds.
In 2010, the Company received marketable securities as consideration for services rendered. In 2011, revenues were generated from consulting services for cash.
During the nine months ended September 30, 2011 and 2010, the Company had the following concentrations of revenues with customers:
Customer 2011 2010 -------- ---- ---- A --% 53% B --% 47% C 59% --% D 41% --% |
SHARE-BASED PAYMENTS
Generally, all forms of share-based payments, including stock option grants, warrants, restricted stock grants and stock appreciation rights are measured at their fair value on the awards' grant date, based on estimated number of awards that are ultimately expected to vest. Share-based compensation awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable.
EARNINGS PER SHARE
Basic earnings (loss) per share is computed by dividing net income (loss) by
weighted average number of shares of common stock outstanding during each
period. Diluted earnings (loss) per share is computed by dividing net income
(loss) by the weighted average number of shares of common stock, common stock
equivalents and potentially dilutive securities outstanding during the period.
The Company has no common stock equivalents, which, if exercisable, would be anti-dilutive. A separate computation of diluted earnings (loss) per share is not presented.
COMPREHENSIVE INCOME (LOSS)
The comprehensive income or loss consists of the change in unrealized gain
(loss) on available-for-sale marketable securities.
Global Equity International Inc. and Subsidiary Notes to Consolidated Financial Statements September 30, 2011
(Unaudited)
FAIR VALUE FOR FINANCIAL ASSETS AND LIABILITIES
The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. The following are the hierarchical levels of inputs to measure fair value:
* Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
* Level 2: Inputs reflect: quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted arices that are observable for the assets or liabilities; or inputs that are derived principally from or porroborated by observable market data by correlation or other means.
* Level 3: Unobservable inputs reflecting the Company's assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available.
The carrying amounts reported in the balance sheet for cash, prepaids, marketable securities, accounts payable and loans payable - shareholders, approximate fair value based on the short-term nature of these instruments.
The Company has assets measured at fair market value on a recurring basis. Consequently, the Company had gains and losses reported in the statement of comprehensive income (loss), that were attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date for the periods ended September 30, 2011 and December 31, 2010.
Global Equity International Inc. and Subsidiary Notes to Consolidated Financial Statements September 30, 2011
(Unaudited)
The following is the Company's asset measured at fair value on a nonrecurring basis at September 30, 2011 and December 31, 2010, using quoted prices in active markets for identical assets (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3):
September 30, 2011 December 31, 2010
------------------ -----------------
Level 1 $ -- $ --
Level 2
Marketable Securities 752,701 2,227,236
Level 3 -- --
---------- ----------
Total $ 752,701 $2,227,236
========== ==========
|
RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS
In June 2011, the FASB issued ASU No. 2011-05, Comprehensive Income (Topic 220):
Presentation of Comprehensive Income. The guidance in ASU 2011-05 applies to
both annual and interim financial statements and eliminates the option for
reporting entities to present the components of other comprehensive income as
part of the statement of changes in stockholders' equity. This ASU also requires
consecutive presentation of the statement of net income and other comprehensive
income. Finally, this ASU requires an entity to present reclassification
adjustments on the face of the financial statements from other comprehensive
income to net income. The amendments in this ASU should be applied
retrospectively and are effective for fiscal year, and interim periods within
those years, beginning after December 15, 2011. The Company has early adopted
this guidance in these financial statements.
RECENT ACCOUNTING PRONOUNCEMENTS
In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. The guidance in ASU 2011-04 changes the wording used to describe the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements, including clarification of the FASB's intent about the application of existing fair value and disclosure requirements and changing a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. The amendments in this ASU should be applied prospectively and are effective for interim and annual periods beginning after December 15, 2011. Early adoption by public entities is not permitted. The adoption of this guidance is not expected to have a material impact on the Company's financial position or results of operations.
Global Equity International Inc. and Subsidiary Notes to Consolidated Financial Statements September 30, 2011
(Unaudited)
NOTE 4 REVERSE RECAPITALIZATION
On November 15, 2010, the Company merged with GEP, a private corporation, and GEP became the surviving corporation, in a transaction treated as a reverse recapitalization. GEI did not have any material operations and majority-voting control was transferred to GEP.
In the recapitalization, GEI issued 20,000,000 shares of common stock in exchange for all of GEP's 100,000 issued and outstanding shares of commons stock. For financial statement reporting purposes, the 100,000 shares have been recasted to 20,000,000 shares in accordance with an exchange ratio of 200 for 1. The balance of the common shares issued and outstanding in GEI prior to the recapitalization were 8,000,000 common shares, and these common shares represent the common shares issued and outstanding in GEI prior to the recapitalization that were not contemplated in the share exchange. The transaction resulted in GEP acquiring approximately 72% control.
The transaction also required a recapitalization of GEP. Since GEP acquired a controlling voting interest, it was deemed the accounting acquirer, while GEI was deemed the legal acquirer. The historical financial statements of the Company are those of GEP and of the consolidated entities from the date of recapitalization and subsequent.
Since the transaction is considered a reverse recapitalization, the presentation of pro-forma financial information was not required. All share and per share amounts have been retroactively restated to the earliest periods presented to reflect the transaction.
NOTE 5 MARKETABLE SECURITIES AND FAIR VALUE
The following table represents the Company's available for sale marketable securities holdings as of September 30, 2011:
Balance - December 31, 2010 $ 2,227,236
Unrealized losses - 2011 (1,308,459)
-----------
Equity securities at fair value - September 30, 2011 $ 752,701
===========
|
Global Equity International Inc. and Subsidiary Notes to Consolidated Financial Statements September 30, 2011
(Unaudited)
NOTE 6 DEBT
(A) RELATED PARTY
The Company received advances of $40,173 from related parties. The advances are non-interest bearing, unsecured and due on demand.
(B) OTHER
On July 5, 2011, the Company received an advance of $35,500 from a third party. The advance was non-interest bearing, unsecured and due on demand. The loan was repaid in September 2011.
NOTE 7 STOCKHOLDERS' EQUITY
In May and June 2011, the Company issued 103,100 shares of common stock for $51,550 ($0.50/share).
On September 23, 2011, the Company issued 9,600 shares of common stock for services rendered, having a fair value of $4,800 ($0.50/share), based upon recent third party cash offerings.
NOTE 8 COMMITMENTS
Effective September 1, 2011, the Company executed an employment agreement with its Chief Executive Officer and Chief Financial Officer, under the following terms:
* Salary - $120,000 - 240,000 per year,
* Stock options - amount yet to be determined; and
* Term - 3 years
NOTE 9 LIQUIDITY
At September 30, 2011, and through the date these financial statements were available to be issued, the Company's cash balance is minimal. The Company expects that it can meet all of its current obligations if necessary by selling its marketable securities to generate cash flows. The Company also believes that related party debt and/or equity financing is available if needed under favorable terms.
Global Equity International Inc. and Subsidiary Notes to Consolidated Financial Statements September 30, 2011
(Unaudited)
NOTE 10 SUBSEQUENT EVENTS
The Company has evaluated for subsequent events between the balance sheet date of September 30, 2011 and November 30, 2011, the date the financial statements were available to be issued, and concluded that the following events or transactions occurred during that period requiring recognition or disclosure.
On November 30 2011, the Company designated Series A Preferred Stock, with the following rights:
* Voting rights - each share has two votes.
* Conversion - each share is convertible into two shares of common stock
beginning on December 1, 2012
* Number of shares - 5,000,000
The Company issued 5,000,000 Series A convertible preferred shares of stock, as a bonus to its Chief Executive Officer for services rendered, having a fair value of $480,000 ($0.096/share), based upon the fair value of the services rendered, which represents the best evidence of fair value.
Exhibit 2
PLAN AND AGREEMENT OF REORGANIZATION
AMONG
GLOBAL EQUITY INTERNATIONAL, INC.
AND
GLOBAL EQUITY PARTNERS PLC
AND
CERTAIN STOCKHOLDERS OF
GLOBAL EQUITY PARTNERS PLC
DATED NOVEMBER 15, 2010
TABLE OF CONTENTS
Plan and Agreement of Reorganization......................................... 3
Plan of Reorganization....................................................... 3
Agreement................................................................. 3
Section 1 - Transfer of Shares........................................... 3
Section 2 - Issuance of Exchange Stock to GEP Stockholders............... 4
Section 3 - Closing...................................................... 5
Section 4 - Representations and Warranties by GEP and Certain
Stockholders................................................. 6
Section 5 - Representations and Warranties by GEII....................... 10
Section 6 - Access and Information....................................... 13
Section 7 - Covenants of GEP and Certain Stockholders................... 14
Section 8 - Covenants of GEP............................................. 15
Section 9 - Additional Covenants of the Parties.......................... 17
Section 10 - Non-Survival of Representations, Warranties and Covenants... 17
Section 11 - Conditions Precedent to Obligations of Parties.............. 18
Section 12 - Termination, Amendment, Waiver.............................. 19
Section 13 - Miscellaneous............................................... 22
Exhibit List................................................................. 24
Schedule List................................................................ 24
|
PLAN AND AGREEMENT OF REORGANIZATION
This Plan and Agreement of Reorganization ("Agreement") is entered into on this 15 day of November 2010 by and between GLOBAL EQUITY INTERNATIONA, INC., a Nevada corporation ("GEII"), and GLOBAL EQUITY PARTNERS PLC, a Republic of Seychelles corporation ("GEP"), and Peter Smith, the sole stockholder of GEP ("Stockholder") as of the date this Agreement is executed.
PLAN OF REORGANIZATION
The transaction contemplated by this Agreement is intended to be a qualified Type "B" reorganization pursuant to Internal Revenue Code Section ss.368, and conforming to Nevada and the Republic of Seychelles provisions. GEII will acquire up to 100% of GEP's issued and outstanding registered shares in exchange for 20,000,000 shares of GEII's common stock, $.001 par value (the "Exchange Stock"). Upon the consummation of the exchange transaction and the issuance and transfer of the Exchange Stock as set forth in Section 2 herein below, GEP's Stockholder would hold approximately seventy-two percent (72%) of the then outstanding common stock of GEII representing a controlling interest in GEII. The Exchange Transaction will result in GEP becoming a wholly-owned subsidiary of GEII.
AGREEMENT
SECTION 1
TRANSFER OF SHARES
1.1 All Stockholders of GEP (the "Stockholder" or the "GEP Stockholders"), as of the date of Closing as such term is defined in Section 3 herein (the "Closing" or the "Closing Date"), shall transfer, assign, convey and deliver to GEII on the Closing Date, certificates representing one hundred percent (100%) of the issued and outstanding GEP registered shares or such lesser percentage as shall be acceptable to GEII, but in no event less than Seventy-Two percent (72%) of the issued and outstanding GEP registered shares. The transfer of the GEP Stockholder registered shares shall be made free and clear of all liens, mortgages, pledges, encumbrances or charges, whether disclosed or undisclosed, except as the GEP Stockholder and GEII shall have otherwise agreed in writing.
SECTION 2
ISSUANCE OF EXCHANGE STOCK TO GEP STOCKHOLDER
2.1 As consideration for the transfer, assignment, conveyance and delivery of the GEP Stockholder registered shares hereunder, GEII shall, at the Closing issue to the GEP Stockholder, certificates representing 20,000,000 shares of GEII common stock. The parties intend that the Exchange Shares being issued will be used to acquire all outstanding GEP registered shares on the basis of two hundred (200) shares of GEII common stock in exchange for each one (1) share of GEP registered share.
2.2 The issuance of the Exchange Stock shall be made free and clear of all liens, mortgages, pledges, encumbrances or charges, whether disclosed or undisclosed, except as the GEP Stockholder and GEII shall have otherwise agreed in writing. As provided herein, and immediately prior to the Closing, GEII shall have issued and outstanding: (i) not more than 8,000,000 shares of common stock; and (ii) shall have no preferred stock or other securities issued and outstanding.
2.3 None of the Exchange Stock issued to the GEP Stockholder, nor any of the GEP registered shares transferred to GEII hereunder shall, at the time of Closing, be registered under federal securities laws but, rather, shall be issued pursuant to an exemption therefrom and be considered "restricted stock" within the meaning of Rule 144 promulgated under the Securities Act of 1933, as amended (the "Act"). All of such shares shall bear a legend worded substantially as follows:
"The shares represented by this certificate have not been registered under the Securities Act of 1933 (the "Act") and are `restricted securities' as that term is defined in Rule 144 under the Act. The shares may not be offered for sale, sold or otherwise transferred except pursuant to an exemption from registration under the Act, the availability of which is to be established to the satisfaction of the Company."
The respective transfer agents of GEII and GEP Stockholder shall annotate their records to reflect the restrictions on transfer embodied in the legend set forth above. There shall be no requirement that GEII register the Exchange Stock under the Act, nor shall GEP or the Stockholder be required to register any GEP registered shares under the Act.
SECTION 3
CLOSING
3.1 Closing of Transaction. Subject to the fulfillment or waiver of the conditions precedent set forth in Section 11 hereof, the Closing shall take place on the Closing Date at the Law Offices of William B. Barnett, 21550 Oxnard Street., Suite 200, Woodland Hills, California 91367, at 10:00 A.M., local time, or at such other time on the Closing Date as GEP and GEII may mutually agree in writing.
3.2 Closing Date. The Closing Date of the Exchange shall take place on or before December 31, 2010, or such later date upon which GEP and GEII may mutually agree in writing, or as extended pursuant to subsection 12.1(b) herein below.
3.3 Deliveries at Closing.
(a) GEP shall deliver or cause to be delivered to GEII at Closing:
(1) Certificates representing all shares, or an amount of shares acceptable to GEII, of the GEP Stockholder's registered shares as described in Section 1, each endorsed in blank by the registered owner;
(2) An agreement from the Stockholder surrendering his shares agreeing to a restriction on the transfer of the Exchange Stock as described in Section 2 hereof;
(3) A copy of a consent of GEP's board of directors authorizing GEP to take the necessary steps toward Closing the transaction described by this Agreement in the form set forth in Exhibit A;
(4) A copy of a Certificate of Good Standing for GEP issued not more than thirty (10) days prior to Closing by the Republic of Seychelles Registrar of International Business Companies;
(5) Articles of Incorporation and Bylaws of GEP certified as of the Closing Date by the President and Secretary of GEP; and
(6) Such other documents, instruments or certificates as shall be reasonably requested by GEII or its counsel.
(b) GEII shall deliver or cause to be delivered to GEP at Closing:
(1) A copy of a consent of GEII'S board of directors authorizing GEII to take the necessary steps toward Closing the transaction described by this Agreement in the form set forth in Exhibit B;
(2) A copy of a Certificate of Good Standing for GEII issued not more than ten (10) days prior to Closing by the Secretary of State of Nevada;
(3) Stock certificate(s) or a computer listing from GEII's transfer agent representing the Exchange Stock to be newly issued by GEII under this Agreement, which certificates shall be in the name of the GEP Stockholder, in the amount of 20,000,000 shares;
(4) Articles of Incorporation and Bylaws of GEII certified as of the Closing Date by the President and Secretary of GEII;
(5) Such other documents, instruments or certificates as shall be reasonably requested by GEP or its counsel.
3.4 Filings; Cooperation.
(a) Prior to the Closing, the parties shall proceed with due diligence and in good faith to make such filings and take such other actions as may be necessary to satisfy the conditions precedent set forth in Section 11 below.
(b) On and after the Closing Date, GEII, GEP and the Stockholder shall, on request and without further consideration, cooperate with one another by furnishing or using their best efforts to cause others to furnish any additional information and/or executing and delivering or using their best efforts to cause others to execute and deliver any additional documents and/or instruments, and doing or using their best efforts to cause others to do any and all such other things as may be reasonably required by the parties or their counsel to consummate or otherwise implement the transactions contemplated by this Agreement.
SECTION 4
REPRESENTATIONS AND WARRANTIES BY
GEP AND CERTAIN STOCKHOLDERS
4.1 Subject to the schedule of exceptions, attached hereto and incorporated herein by this reference, (which schedules shall be acceptable to GEII), GEP and those Stockholders listed on Exhibit "A" represent and warrant to GEII as follows:
(a) Organization and Good Standing of GEP. The Certificate of Incorporation of GEP and all Amendments thereto as presently in effect, and the Memorandum of Association of GEP as presently in effect, both of which shall be certified by the President and Secretary of GEP, have been delivered to GEII and are complete and correct and since the date of such delivery, there has been no amendment, modification or other change thereto.
(b) Capitalization. GEP's authorized capital consists of 100,000 shares of registered shares, par value $1.00 per share, of which 100,000 registered shares are issued and outstanding prior to the Closing Date, (defined as "GEP Shares"), and held of record by one (1) stockholder, who is currently a resident of the United Kingdom. All such outstanding registered shares are validly issued, paid and non-assessable. There are no other outstanding securities including options and warrants outstanding. All securities issued by GEP as of the date of this Agreement have been issued in compliance with all applicable laws of the Republic of Seychelles and the United Kingdom. Except as set forth in Schedule 4.1(b), no other equity securities or debt obligations of GEP are authorized, issued or outstanding.
(c) Subsidiaries. Except as set forth in Schedule 4.1 (c), GEP has no subsidiaries or other investments, directly or indirectly, or other financial interest in any other corporation or business organization, joint venture or partnership of any kind.
(d) Financial Statements. GEP will deliver to GEII, prior to Closing, a copy of GEP's unaudited, financial statements for the year ended December 31, 2009 and and financial statements for the nine (9) months ended September 30, 2010, if required, which will be true and complete and will have been prepared in conformity with generally accepted accounting principles. Other than changes in the usual and ordinary conduct of the business since September 30, 2010, there have not been and, at the Closing Date, there will be no material adverse changes in such financial statements.
(e) Absence of Undisclosed Liabilities. GEP has no liabilities which are not adequately reflected or reserved against in the GEP Financial Statements or otherwise reflected in this Agreement and GEP shall not have as of the Closing Date, any liabilities (secured or unsecured and whether accrued, absolute, direct, indirect or otherwise) which were incurred after September 30, 2010, and would be individually or in the aggregate, material to the results of operations or financial condition of GEP as of the Closing Date.
(f) Litigation. Except as disclosed in Schedule 4.1(f), there are no outstanding orders, judgments, injunctions, awards or decrees of any court, governmental or regulatory body or arbitration tribunal against GEP or its properties. Except as disclosed in Schedule 4.1(f), there are no actions, suits or proceedings pending, or, to the knowledge of GEP, threatened against or affecting GEP or its affiliated companies, any of its officers or directors relating to their positions as such, or any of its properties, at law or in equity, or before or by any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, in connection with the business, operations or affairs of GEP or its affiliated company which might result in any material adverse change in the operations or financial condition of GEP, or which might prevent or materially impede the consummation of the transactions under this Agreement.
(g) Compliance with Laws. To the best of its knowledge, the operations and affairs of GEP do not violate any law, ordinance, rule or regulation currently in effect, or any order, writ, injunction or decree of any court or governmental agency, the violation of which would substantially and adversely affect the business, financial conditions or operations of GEP.
(h) Absence of Certain Changes. Except as set forth in Schedule 4.1(h), or otherwise disclosed in writing to GEII, since September 30, 2010,
(i) GEP has not entered into any material transactions;
(ii) There has been no change in financial or other condition, business, property, prospects, assets or liabilities of GEP as shown on the GEP Financial Statement, other than changes that both individually and in the aggregate do not have a consequence
that is materially adverse to such condition, business, property, prospects, assets or liabilities;
(iii)There has been no damage to, destruction of or loss of any of the properties or assets of GEP (whether or not covered by insurance) materially and adversely affecting the financial or other condition, business, property, prospects, assets or liabilities of GEP;
(iv) GEP has not declared, or paid any dividend or made any distribution on its capital stock, redeemed, purchased or otherwise acquired any of its capital stock, granted any options to purchase shares of its stock, or issued any shares of its capital stock;
(v) There has been no material change, except in the ordinary course of business, in the contingent obligations of GEP by way of guaranty, endorsement, indemnity, warranty or otherwise;
(vi) There have been no loans made by GEP to its employees, officers or directors;
(viii) There has been no extraordinary increase in the compensation of any of GEP's employees;
(ix) There has been no agreement or commitment by GEP to do or perform any of the acts described in this Section 4.1(h); and
(x) There has been no other event or condition of any character, which might reasonably be expected either to result in a material and adverse change in the condition (financial or otherwise), business, property, prospects, assets or liabilities of GEP or to impair materially the ability of GEP to conduct the business now being conducted.
(i) Employees. There are, except as disclosed in Schedule 4.1(i), no collective bargaining, bonus, profit sharing, compensation, or other plans, agreements or arrangements between GEP and any of its directors, officers or employees and there is no employment, consulting, severance or indemnification arrangements, agreements or understandings between GEP on the one hand, and any current or former directors, officers or employees of GEP on the other hand.
(j) Assets. All of the assets reflected on the September 30, 2010, GEP Financial Statements or acquired and held as of the Closing Date, will be owned by GEP on the Closing Date. Except as set forth in Schedule 4.1(j), GEP owns outright and has good and marketable title, or holds valid and enforceable leases, to all of such assets. None of GEP's equipment used by GEP in connection with its business has any material defects and all of them are in all material respects in good operating
condition and repair, and are adequate for the uses to which they are being put; none of GEP's equipment is in need of maintenance or repairs, except for ordinary, routine maintenance and repair. GEP represents that, except to the extent disclosed in Schedule 4.1(j) to this Agreement or reserved against on its balance sheet as of September 30, 2010, it is not aware of any accounts and contracts receivable existing that in its judgment would be uncollectible.
(k) Tax Matters. All federal, foreign, state and local tax returns, reports and information statements required to be filed by or with respect to the activities of GEP have been timely filed. Since September 30, 2010, GEP has not incurred any liability with respect to any federal, foreign, state or local taxes except in the ordinary and regular course of business. Such returns, reports and information statements are true and correct in all material respects insofar as they relate to the activities of GEP. On the date of this Agreement, GEP is not delinquent in the payment of any such tax or assessment, and no deficiencies for any amount of such tax have been proposed or assessed.
(l) Operating Authorities. To the best knowledge of GEP, GEP has all material operating authorities, governmental certificates and licenses, permits, authorizations and approvals ("Permits") required to conduct its business as presently conducted. Such Permits are set forth on Schedule 4.1(l). Since GEP's inception, there has not been any notice or adverse development regarding such Permits; such Permits are in full force and effect; no material violations are or have been recorded in respect of any permit; and no proceeding is pending or threatened to revoke or limit any Permit.
(m) Continuation of Key Management. To the best knowledge of GEP, all key management personnel of GEP intend to continue their employment with GEP after the Closing. For purposes of this subsection 4.1(m), "key management personnel" shall include Mr. Peter Smith.
(n) Books and Records. The books and records of GEP are complete and correct, are maintained in accordance with good business practice and accurately present and reflect, in all material respects, all of the transactions therein described, and there have been no transactions involving GEP which properly should have been set forth therein and which have not been accurately so set forth.
(o) Authority to Execute Agreement. The Board of Directors of GEP, pursuant to the power and authority legally vested in it, has duly authorized the execution and delivery by GEP of this Agreement, and has duly authorized each of the transactions hereby contemplated. GEP has the power and authority to execute and deliver this Agreement, to consummate the transactions hereby contemplated and to take all other actions required to be taken by it pursuant to the provisions hereof. GEP has taken all actions required by law, its Certificate of Incorporation, as amended, or otherwise to authorize the execution and delivery of this Agreement. This Agreement is valid and binding upon GEP and the stockholder in accordance with its terms. Neither the
execution nor delivery of this Agreement nor the consummation of the transactions contemplated hereby will constitute a violation or breach of the Articles of Incorporation, as amended, or the Bylaws, as amended, of GEP, or any agreement, stipulation, order, writ, injunction, decree, law, rule or regulation applicable to GEP.
(p) Finder's Fees. GEP is not, and on the Closing Date will not be liable or obligated to pay any finder's, agent's or broker's fee arising out of or in connection with this Agreement or the transactions contemplated by this Agreement.
4.2 Disclosure. At the date of this Agreement, GEP and the Stockholder have, and at the Closing Date they will have, disclosed all events, conditions and facts materially affecting the business and prospects of GEP. GEP and the Stockholder have not now and will not have at the Closing Date, withheld knowledge of any such events, conditions or facts which they know, or have reasonable grounds to know, may materially affect GEP's business and prospects. Neither this Agreement nor any certificate, exhibit, schedule or other written document or statement, furnished to GEII by GEP and/or by the Stockholder in connection with the transactions contemplated by this Agreement contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact necessary to be stated in order to make the statements contained herein or therein not misleading.
SECTION 5
REPRESENTATIONS AND WARRANTIES BY GEII
5.1 Subject to the schedule of exceptions, attached hereto and incorporated herein by this reference, (which schedules shall be acceptable to GEP), GEII represents and warrants to GEP and the Stockholder as follows:
(a) Organization and Good Standing. GEII is currently a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada and has full corporate power and authority to own or lease its properties and to carry on its business as now being conducted and as proposed to be conducted. GEII is qualified to conduct business as a foreign corporation in no other jurisdiction, and the failure to so qualify in any other jurisdiction does not materially, adversely affect the ability of GEII to carry on its business as most recently conducted. The Articles of Incorporation of GEII and all amendments thereto as presently in effect, and the Bylaws of GEII as presently in effect, both of which shall be certified by the President and Secretary of GEII, have been delivered to GEP and are complete and correct and since the date of such delivery, there has been no amendment, modification or other change thereto.
(b) Capitalization. GEII's authorized capital stock is 75,000,000 shares consisting of (i) 70,000,000 shares of $.001 par value common stock, defined above as "GEII Common Stock", of which not more than
2,000,000, will be issued and outstanding, prior to Closing Date and held of record by approximately 4 shareholders and (ii) 5,000,000 shares of $.001 par value Preferred stock, of which no such shares are outstanding. Except as set forth in Schedule 5.1(b), no other equity securities or debt obligations of GEII are authorized, issued or outstanding and as of the Closing, there will be no other outstanding options, warrants, agreements, contracts, calls, commitments or demands of any character, preemptive or otherwise, other than this Agreement, relating to any of the GEII Common Stock, and there will be no outstanding security of any kind convertible into GEII Common Stock. The shares of GEII Common Stock are free and clear of all liens, charges, claims, pledges, restrictions and encumbrances whatsoever of any kind or nature that would inhibit, prevent or otherwise interfere with the transactions contemplated hereby. All of the outstanding GEII Common Stock is validly issued, fully paid and non-assessable and there are no voting trust agreements or other contracts, agreements or arrangements restricting or affecting voting or dividend rights or transferability with respect to the outstanding shares of GEII Common Stock.
(c) Issuance of Exchange Stock. All of the GEII Common Stock to be issued to or transferred to GEP Stockholder pursuant to this Agreement, when issued, transferred and delivered as provided herein, will be duly authorized, validly issued, fully paid and non-assessable, and will be free and clear of all liens, charges, claims, pledges, restrictions and encumbrances whatsoever of any kind or nature, except those restrictions imposed by State or Federal corporate and securities regulations.
(d) No Violation. Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby nor compliance by GEII with any of the provisions hereof will:
(1) Violate or conflict with, or result in a breach of any provisions of, or constitute a default ( or an event which, with notice or lapse of time or both, would constitute a default) under, any of the terms, conditions or provisions of the Articles of Incorporation or Bylaws of GEII or any note, bond, mortgage, indenture, deed of trust, license, agreement or other instrument to which GEII is a party, or by which it or its properties or assets may be bound or affected; or
(2) Violate any order, writ, injunction or decree, or any statute, rule, permit, or regulation applicable to GEII or any of its properties or assets.
(e) Subsidiaries. GEII has no subsidiaries and no investments, directly or indirectly, or other financial interest in any other corporation or business organization, joint venture or partnership of any kind whatsoever.
(f) Absence of Undisclosed Liabilities. Except as disclosed in GEII's Financial Statements, GEII did not have, as of the Closing Date, any
liabilities (secured or unsecured and whether accrued, absolute, direct, indirect or otherwise) which were incurred since inception, October 1, 2010 and would be individually or in the aggregate, material to the results of operation or financial condition of GEII.
(g) Litigation. There are no outstanding orders, judgments, injunctions, awards or decrees of any court, governmental or regulatory body or arbitration tribunal against GEII or its properties. There are no actions, suits or proceedings pending, or, to the knowledge of GEII, threatened against or relating to GEII. GEII is not, and on the Closing Date will not be, in default under or with respect to any judgment, order, writ, injunction or decree of any court or of any federal, state, municipal or other governmental authority, department, commission, board, agency or other instrumentality; and GEII has, and on the Closing Date will have, complied in all material respects with all laws, rules, regulations and orders applicable to it, if any.
(h) Contracts. GEII is not a party to any written or oral commitment for capital expenditures except as contemplated by this Agreement. GEII is not a party to, nor is its property bound by any written or oral, express or implied, agreement, contract or other contractual obligation including, without limitation, any real or personal property leases, any employment agreements, any consulting agreements any personal services agreements or any other agreements that require GEII to pay any money or deliver any assets or services. GEII has in all material respects performed all obligations required to be performed by it to date and is not in default in any material respect under any agreements or other documents to which it was a party.
(i) Authority to Execute Agreement. The Board of Directors of GEII, pursuant to the power and authority legally vested in it, has duly authorized the execution and delivery by GEII of this Agreement and the Exchange Stock, and has duly authorized each of the transactions hereby contemplated. GEII has the power and authority to execute and deliver this Agreement, to consummate the transactions hereby contemplated and to take all other actions required to be taken by it pursuant to the provisions hereof. GEII has taken all the actions required by law, its Articles of Incorporation, as amended, its Bylaws, as amended, applicable state law or otherwise to authorize the execution and delivery of the Exchange Stock pursuant to the provisions hereof. This Agreement is valid and binding upon GEII in accordance with its terms.
(j) Finder's Fees. GEII is not, and on the Closing Date, will not be liable or obligated to pay any finder's, agent's or broker's fee arising out of or in connection with this Agreement or the transactions contemplated by this Agreement.
(k) Books and Records. The books and records of GEII are complete and correct, are maintained in accordance with good business practice and accurately present and reflect in all material respects, all of the transactions therein described and there have been no transactions
involving GEII which properly should have been set forth therein and which have not been accurately so set forth.
5.2 Disclosure. GEII has and at the Closing Date it will have, disclosed all events, conditions and facts materially affecting the business and prospects of GEII. GEII has not now and will not have at the Closing Date, withheld knowledge of any such events, conditions and facts which it knows, or has reasonable grounds to know, may materially affect GEII's business and prospects. Neither this Agreement, nor any certificate, exhibit, schedule or other written document or statement, furnished to GEP or the GEP Stockholder by GEII in connection with the transactions contemplated by this Agreement contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact necessary to be stated in order to make the statements contained herein or therein not misleading.
SECTION 6
ACCESS AND INFORMATION
6.1 As to GEP. Subject to the protections provided by subsection 9.4 herein, GEP shall give to GEII and to GEII's counsel, accountants and other representatives full access during normal business hours throughout the period prior to the Closing, to all of GEP's properties, books, contracts, commitments, and records, including information concerning products and customer base, and patents held by, or assigned to, GEP, and furnish GEII during such period with all such information concerning GEP's affairs as GEII reasonably may request.
6.2 As to GEII. Subject to the protections provided by subsection 9.4 herein, GEII shall give to GEP, the GEP Stockholder and their counsel, accountants and other representatives, full access, during normal business hours throughout the period prior to the Closing, to all of GEII's properties, books, contracts, commitments, and records, if any, and shall furnish GEP and the GEP Stockholder during such period with all such information concerning GEII's affairs as GEP and the GEP Stockholder reasonably may request.
SECTION 7
COVENANTS OF GEP AND STOCKHOLDER
7.1 No Solicitation. For a period of forty-five (45) days from the date of this Agreement, GEP and the Stockholder, to the extent within the Stockholder's control, will use their best efforts to cause its officers, employees, agents and representatives not, directly or indirectly, to solicit, encourage, or initiate any discussions with, or indirectly to solicit, encourage, or initiate any discussions with, to, any person or entity other than GEII and its officers, employees, and agents, concerning any merger, sale of substantial assets, or similar transaction involving GEP, or any sale of any of its common stock or of the common stock held by the Stockholder in excess of fifty percent (50%) of such Stockholder's current
stock holdings except as otherwise disclosed in this Agreement. GEP will notify GEII immediately upon receipt of an inquiry, offer, or proposal relating to any of the foregoing. None of the foregoing shall prohibit providing information to others in a manner in keeping with the ordinary conduct of GEP business, or providing information to government authorities.
7.2 Conduct of Business Pending the Transaction. GEP and the Stockholder, covenant and agree with GEII that, prior to the consummation of the transaction called for by this Agreement, and Closing, or the termination of this Agreement pursuant to its terms, unless GEII shall otherwise consent in writing, and except as otherwise contemplated by this Agreement, GEP and the Stockholder, will comply with each of the following:
(a) Its business shall be conducted only in the ordinary and usual course. GEP shall use reasonable efforts to keep intact its business organization and good will, keep available the services of its respective officers and employees, and maintain good relations with suppliers, creditors, employees, customers, and others having business or financial relationships with it, and it shall immediately notify GEII of any event or occurrence which is material to, and not in the ordinary and usual course of business of GEP.
(b) It shall not (i) amend its Certificate of Incorporation or Memorandum of Association or (ii) split, combine, or reclassify any of its outstanding securities, or declare, set aside, or pay any dividend or other distribution on, or make or agree or commit to make any exchange for or redemption of any such securities payable in cash, stock or property.
(c) It shall not (i) issue or agree to issue any additional securities or rights of any kind to acquire any securities, or (ii) enter into any contract, agreement, commitment, or arrangement with respect to any of the foregoing, except as set forth in this Agreement.
(d) It shall not create, incur, or assume any long-term or short-term indebtedness for money borrowed or make any capital expenditures or commitment for capital expenditures, except in the ordinary course of business and consistent with past practice.
(e) It shall not enter into any agreement, commitment, or understanding, whether in writing or otherwise, with respect to any of the matters referred to in subparagraphs (a) through (d) above.
(f) It will continue properly and promptly to file when due all federal, state, local, foreign, and other tax returns, reports, and declarations required to be filed by it, and will pay, or make full and adequate provision for the payment of, all taxes and governmental charges due from or payable by it.
(g) It will comply with all laws and regulations applicable to it and its operations.
SECTION 8 COVENANTS OF GEII
8.1 No Solicitation. For a period of forty-five (45) days from the date of this Agreement, GEII will not discuss or negotiate with any other corporation, firm or other person or entertain or consider any inquiries or proposals relating to the possible disposition of its shares of capital stock, or its assets, and will conduct business only in the ordinary course. Notwithstanding the foregoing, GEII shall be free to engage in activities mentioned in the preceding sentence, which are designed to further the mutual interests of the parties to this Agreement.
8.2 Conduct of GEII Pending Closing. GEII covenants and agrees with GEP that, prior to the consummation of the transactions called for by this Agreement, and Closing, or the termination of this Agreement pursuant to its terms, unless GEP shall otherwise consent in writing, and except as otherwise contemplated by this Agreement, GEII will comply with each of the following.
(a) No change will be made in GEII's Articles of Incorporation or Bylaws, except for a name change, or in GEII's authorized or issued shares of stock, except as contemplated in this Agreement or as may be first approved in writing by GEP.
(b) No dividends shall be declared, no stock options granted and no employment agreements shall be entered into with officers or directors in GEII, except as may be first approved in writing by GEP.
(c) It shall not (i) issue or agree to issue any additional shares of, or rights of any kind to acquire any shares of its capital stock of any class, or (ii) enter into any contract, agreement, commitment, or arrangement with respect to any of the foregoing, except as set forth in this Agreement.
(d) It shall not create, incur, or assume any long-term or short-term indebtedness for money borrowed or make any capital expenditures or commitment for capital expenditures, except in the ordinary course of business and consistent with past practice.
(e) It shall not (i) adopt, enter into, or amend any bonus, profit sharing, compensation, stock option, warrant, pension, retirement, deferred compensation, employment, severance, termination or other employee benefit plan, agreement, trust fund, or arrangement for the benefit or welfare of any officer, director, or employee, or (ii) agree to any material (in relation to historical compensation) increase in the compensation payable or to become payable to, or any increase in the contractual term of employment of, any officer, director or employee except, with respect to employees who are not officers or directors, in the ordinary course of business in accordance with past practice, or with the written approval of GEII.
(f) It shall not sell lease, mortgage, encumber, or otherwise dispose of
or grant any interest in any of its assets or properties except for:
(i) sales, encumbrances, and other dispositions or grants in the
ordinary course of business and consistent with past practice; (ii)
liens for taxes not yet due; (iii) liens or encumbrances that are not
material in amount or effect and do not impair the use of the
property, or (iv) as specifically provided for or permitted in this
Agreement.
(g) It shall not enter into any agreement, commitment, or understanding, whether in writing or otherwise, with respect to any of the matters referred to in subparagraphs (a) through (f) above.
(h) It will continue properly and promptly to file when due all federal, state, local, foreign, and other tax returns, reports, and declarations required to be filed by it, and will pay, or make full and adequate provision for the payment of, all taxes and governmental charges due from or payable by it.
(i) It will comply with all laws and regulations applicable to it and its operations.
SECTION 9
ADDITIONAL COVENANTS OF THE PARTIES
9.1 Cooperation. Both GEP and GEII will cooperate with each other and their respective counsel, accountants and agents in carrying out the transaction contemplated by this Agreement, and in delivering all documents and instruments deemed reasonably necessary or useful by the other party. Furthermore, both GEP and GEII shall collaborate on the preparation and dissemination of an offer, which the Board of Directors of GEP shall approve and recommend, to the GEP Stockholder, to exchange his outstanding common stock of GEP for shares of GEII Common Stock.
9.2 Expenses. Each of the parties hereto shall pay all of its respective costs and expenses (including attorneys' and accountants' fees, costs and expenses) incurred in connection with this Agreement and the consummation of the transactions contemplated herein.
9.3 Publicity. Prior to the Closing, any written news releases or public disclosure by either party pertaining to this Agreement shall be submitted to the other party for its review and approval prior to such release or disclosure, provided, however, that (a) such approval shall not be unreasonably withheld, and (b) such review and approval shall not be required of disclosures required to comply, in the judgment of counsel, with federal or state securities or corporate laws or policies.
9.4 Confidentiality. While each party is obligated to provide access to and furnish information in accordance with Section 6 herein, it is understood and agreed that such disclosure and information subsequently obtained as a result of such disclosures are proprietary and confidential in nature. Each party agrees to hold such information in confidence and not to reveal any such information to any person who is not a party to this Agreement, or an
officer, director or key employee thereof, and not to use the information obtained for any purpose other than assisting in its due diligence inquiry in conjunction with the transaction contemplated by this Agreement. Upon request of any party, a confidentiality agreement, acceptable to the disclosing party, will be executed by any person selected to receive such proprietary information, prior to receipt of such information.
SECTION 10
NON-SURVIVAL OF REPRESENTATIONS,
WARRANTIES AND COVENANTS
10.1 None of the representations, warranties, covenants and other agreements in this Agreement or in any instrument delivered pursuant to this Agreement, including any rights arising out of any breach of such representations, warranties, covenants, agreements and other provisions, shall survive after six (6) months from the Effective Time, except for those covenants, agreements and other provisions contained herein that by their terms apply or are to be performed in whole or in part after the Effective Time and this Section 10.
SECTION 11
CONDITIONS PRECEDENT TO OBLIGATIONS OF PARTIES
11.1 Conditions to Obligations of the Parties. The obligations of GEII, GEP and the Stockholder shall be subject to the fulfillment, on or prior to the Closing, of all conditions elsewhere herein set forth, including, but not limited to, receipt by the appropriate party of all deliveries required by Sections 4 and 5 herein, and fulfillment, prior to Closing, of each of the following conditions:
(a) All representations and warranties made by the GEP Stockholder and GEII in this Agreement shall be true and correct in all material respects on and as of the Closing Date with the same effect as if such representations and warranties had been made on and as of the Closing Date.
(b) GEP Stockholder and GEII shall have performed or complied with all covenants, agreements and conditions contained in this Agreement on their part required to be performed or complied with at or prior to the Closing.
(c) All material authorizations, consents or approvals of any and all governmental regulatory authorities necessary in connection with the consummation of the transactions contemplated by this Agreement shall have been obtained and be in full force and effect.
(d) The Closing shall not violate any permit or order, decree or judgment of any court or governmental body having competent jurisdiction and there shall not have been instituted any legal or administrative
action or proceeding to enjoin the transaction contemplated hereby or seeking damages from any party with respect thereto.
11.2 Conditions to Obligations of GEII. The obligations of GEII to consummate the transactions contemplated herein are subject to satisfaction (or waiver by it) of the following conditions:
(a) The GEP Stockholder acquiring Exchange Stock will be required, at Closing, to submit an agreement confirming that all the Exchange Stock received will be acquired for investment and not with a view to, or for sale in connection with, any distribution thereof, and agreeing not to transfer any of the Exchange Stock for a period of one year from the date of the Closing, except for those transfers falling within the exemption from registration under the Securities Act of 1933 and any applicable state securities laws, which transfers do not constitute a public distribution of securities, and in which the transferees execute an investment letter in form and substance satisfactory to counsel for GEII. The foregoing provision shall not prohibit the registration of those shares at any time following the Closing. The GEP Stockholder acquiring Exchange Stock will be required to transfer to GEII at the Closing his GEP Stock Certificate(s), free and clear of all liens, mortgages, pledges, encumbrances or changes, whether disclosed or undisclosed.
(b) All schedules, prepared by GEP shall be current or updated as necessary as of the Closing Date.
(c) Each party shall have satisfied itself that since the date of this Agreement the business of the other party has been conducted in the ordinary course. In addition, each party shall have satisfied itself that no withdrawals of cash or other assets have been made and no indebtedness has been incurred since the date of this Agreement, except in the ordinary course of business or with respect to services rendered or expenses incurred in connection with the Closing of this Agreement, unless said withdrawals or indebtedness were either authorized by the terms of this Agreement or subsequently consented to in writing by the parties.
(d) Each party covenants that, to the best of its knowledge, it has complied or will comply in all material respects with all applicable laws, orders and regulations of federal, state, municipal and/or other governments and/or any instrumentality thereof, domestic or foreign, applicable to their assets, to the business conducted by them and to the transactions contemplated by this Agreement.
11.3 Conditions to Obligation of GEP and the GEP Stockholder. The obligations of GEP and the GEP Stockholder to consummate the transactions contemplated herein are subject to satisfaction (or waiver by them) of the following conditions:
(a) Each party shall have granted to the other party (acting through its management personnel, counsel, accountants or other representatives designated by it) full opportunity to examine its books and records,
properties, plants and equipment, proprietary rights and other instruments, rights and papers of all kinds in accordance with Sections 4 and 5 hereof, and each party shall be satisfied to proceed with the transactions contemplated by this Agreement upon completion of such examination and investigation.
(b) GEII and GEP shall agree to indemnify each other party against any liability to any broker or finder to which that party may become obligated.
(c) The Exchange shall be approved by the Board of Directors of both GEP and GEII. Furthermore, the Exchange shall be approved by the stockholders of GEP and shareholders of GEII, if deemed necessary or appropriate by counsel for the same, within thirty (30) days following execution of this Agreement. If such a meeting is deemed necessary, the management of GEP and GEII agree to recommend approval to the Shareholder and to solicit proxies in support of the same.
(d) GEII and GEP and their respective legal counsel shall have received copies of all such certificates, opinions and other documents and instruments as each party or its legal counsel may reasonably request pursuant to this Agreement or otherwise in connection with the consummation of the transactions contemplated hereby, and all such certificates, opinions and other documents and instruments received by each party shall be reasonably satisfactory, in form and substance, to each party and its legal counsel.
(e) Both GEP and GEII shall have the right to waive any or all of the conditions precedent to its obligations hereunder not otherwise legally required; provided, however, that no waiver by a party of any condition precedent to its obligations hereunder shall constitute a waiver by such party of any other condition.
SECTION 12
TERMINATION, AMENDMENT, WAIVER
12.1 This Agreement may be terminated at any time prior to the Closing, and the contemplated transactions abandoned, without liability to either party, except with respect to the obligations of GEII, GEP and the GEP Stockholder under Section 9.4 hereof:
(a) By mutual agreement of GEII and GEP;
(b) If the Closing (as defined in Section 3) has not have taken place on or prior to December 31, 2010, this Agreement can be terminated upon written notice given by GEII or GEP which is not in material default;
(c) By GEII, if in its reasonable believe there has been a material misrepresentation or breach of warranty on the part of the Stockholder in the representations and warranties set forth in the Agreement.
(d) By GEP or the Stockholder if, in the reasonable belief of GEP or any the Stockholder, there has been a material misrepresentation or breach of warranty on the part of GEII in the representations and warranties set forth in the Agreement;
(e) By GEII if, in its opinion or that of its counsel, the Exchange does not qualify for exemption from registration under applicable federal and state securities laws, or qualification, if obtainable, cannot be accomplished in GEII's opinion or that of its counsel, without unreasonable expense or effort;
(f) By GEII or by the Stockholder, if either party shall determine in its sole discretion that the Exchange has become inadvisable or impracticable by reason of the institution or threat by state, local or federal governmental authorities or by any other person of material litigation or proceedings against any party [it being understood and agreed that a written request by a governmental authority for information with respect to the Exchange, which information could be used in connection with such litigation or proceedings, may be deemed to be a threat of material litigation or proceedings regardless of whether such request is received before or after the signing of this Agreement];
(g) By GEII if the business or assets or financial condition of GEP, taken as a whole, have been materially and adversely affected, whether by the institution of litigation or by reason of changes or developments or in operations in the ordinary course of business or otherwise; or, by the Stockholder if the business or assets or financial condition of GEII, taken as a whole, have been materially and adversely affected, whether by the institution of litigation or by reason of changes or developments or in operations in the ordinary course of business or otherwise;
(h) By GEII or GEP if, in the opinion of GEII's independent accountants, it should appear that the combined entity will not be auditable to SEC accounting standards;
(i) By GEP if GEII fails to perform material conditions set forth in Sub-Section 11.1 and 11.3 herein;
(j) By GEP if examination of GEII's books and records pursuant to Section 5 herein uncovers a material deficiency;
(k) By GEII if GEP fails to perform material conditions set forth in Sub-Section 11.1 and 11.2 herein; and
(l) By GEII if examination of GEP's books and records pursuant to Section 4 herein uncovers a material deficiency.
12.2 No modification or amendment of any provision of this Agreement shall be effective unless specifically made in writing and duly signed by the party to be bound.
12.3 In the event of termination of this Agreement by either GEII or GEP as provided in Section 12.1, this Agreement shall forthwith become void and there shall be no liability or obligation on the part of any of the parties or their respective officers or directors except with respect to Section 9, which provisions shall survive such termination, and except that, notwithstanding anything to the contrary contained in this Agreement, neither GEII nor GEP shall be relieved or released from any liabilities or damages arising out of its willful and material breach of this Agreement.
SECTION 13
MISCELLANEOUS
13.1 Entire Agreement. This Agreement (including the Exhibits and Schedules hereto) contains the entire agreement between the parties with respect to the transactions contemplated hereby, and supersedes all negotiations, representations, warranties, commitments, offers, contracts, and writings prior to the date hereof. No waiver and no modification or amendment of any provision of this Agreement shall be effective unless specifically made in writing and duly signed by the party to be bound thereby.
13.2 Binding Agreement.
(a) This Agreement shall become binding upon the parties when, but only when, it shall have been signed on behalf of all parties.
(b) Subject to the condition stated in subsection (a), above, this Agreement shall be binding upon, and inure to the benefit of, the respective parties and their legal representatives, successors and assigns. This Agreement, in all of its particulars, shall be enforceable by the means set forth in subsection 13.9 for the recovery of damages or by way of specific performance and the terms and conditions of this Agreement shall remain in full force and effect subsequent to Closing and shall not be deemed to be merged into any documents conveyed and delivered at the time of Closing. In the event that subsection 13.9 is found to be unenforceable as to any party for any reason or is not invoked by any party, and any person is required to initiate any action at law or in equity for the enforcement of this Agreement, the prevailing party in such litigation shall be entitled to recover from the party determined to be in default, all of its reasonable costs incurred in said litigation, including attorneys' fees.
13.3 Counterparts. This Agreement may be executed in one or more counterparts, each of which may be deemed an original, but all of which together, shall constitute one and the same instrument.
13.4 Severability. If any provisions hereof are to be held invalid or unenforceable by any court of competent jurisdiction or as a result of future legislative action, such holding or action shall be strictly construed and shall not affect the validity or effect or any other provision hereof.
13.5 Assignability. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto; provided that neither this Agreement nor any right hereunder shall be assignable by GEP or GEII without prior written consent of the other party.
13.6 Captions. The captions of the various Sections of this Agreement have been inserted only for convenience of reference and shall not be deemed to modify, explain, enlarge or restrict any of the provisions of this Agreement.
13.7 Governing Law. The validity, interpretation and effect of this Agreement shall be governed exclusively by the laws of the State of California.
13.8 Jurisdiction and Venue. Each party hereto irrevocably consents to the jurisdiction and venue of the state or federal courts located in Orange County, State of California, in connection with any action, suit, proceeding or claim to enforce the provisions of this Agreement, to recover damages for breach of or default under this Agreement, or otherwise arising under or by reason of this Agreement. The prevailing party may recover costs and reasonable attorney's fees.
13.9 Notices. All notices, requests, demands and other communications under this Agreement shall be in writing and delivered in person or sent by certified mail, postage prepaid and properly addressed as follows:
To GEP and GEP Stockholder:
Peter Smith, President
GLOBAL EQUITY PARTNERS PLC
1 Berkeley Street
London W1J 8DJ, United Kingdom
Fax 011 207 016 9100
To GEII:
Neeraj Iyer, President
GLOBAL EQUITY INTERNATIONAL, INC.
20 Truman, Suite 208
Irvine, CA 92620
Fax (949) 222-5014
With a Copy to:
William B. Barnett, Esq.
Law Offices of William B. Barnett
21550 Oxnard, Suite 200
Woodland Hills, CA 91467
Fax (818) 949-2269
Any party may from time to time change its address for the purpose of notices to that party by a similar notice specifying a new address, but no such change shall be deemed to have been given until it is actually received by the respective party hereto.
All notices and other communications required or permitted under this Agreement which are addressed as provided in this Section 13.9 if delivered personally, shall be effective upon delivery; and, if delivered by mail, shall be effective three days following deposit in the United States mail, postage prepaid.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
GLOBAL EQUITY INTERNATIONAL, INC.
By: /s/ Neeraj Iver --------------------------------------- Neeraj Iyer, President |
GLOBAL EQUITY PARTNERS PLC
By: /s/ Peter Smith --------------------------------------- Peter Smith, President |
EXHIBIT LIST
Exhibit "A": Consent of Board of Directors of GEP
Exhibit "B": Consent of Board of Directors of GEII
SCHEDULE LIST
Schedule 4.1(b): GEP- Capitalization
Schedule 4.1(c): GEP- Subsidiaries
Schedule 4.1(f): GEP-Litigation
Schedule 4.1(h): GEP-Absence of Certain Changes
Schedule 4.1(i): GEP- Employees
Schedule 4.1(j): GEP-Assets
Schedule 4.1(l): GEP-Operating Authorities
Schedule 5.1(b): GEII-CAPITALIZATION
Schedule 5.1(f): GEII- Subsidiaries
|
EXHIBIT "A"
CONSENT OF DIRECTORS
OF
GLOBAL EQUITY PARTNERS PLC
A special meeting of the Directors of Global Equity Partners PLC (the "Company"), a Republic of Seychelles Corporation, was held by consent and without an actual meeting. The undersigned, being all of the Directors, do hereby waive notice of the time, place and purpose of this meeting of the Directors of the Company and, in lieu thereof, hereby agree and consent to the adoption of the following corporate actions.
WHEREAS, the Company intends to exchange all of the issued and outstanding registered shares of the Company for 20,000,000 shares of GLOBAL EQUITY INTERNATIONAL, INC. ("GEII") common stock;
WHEREAS, the Company's legal counsel has reviewed a formal agreement consistent with the terms of the negotiations, which "Plan and Agreement of Reorganization" is attached hereto;
WHEREAS, it is in the Company's best interests to approve the terms and execution of the Plan and Agreement of Reorganization on behalf of the Company;
NOW, THEREFORE, BE IT RESOLVED, that the terms and conditions of the exchange as set forth in the Plan and Agreement of Reorganization be, and the same hereby are, ratified and confirmed, and the President and Secretary of the Company are authorized to execute the same on behalf of the Company.
GENERAL AUTHORIZATION
BE IT RESOLVED that the President and Secretary of the Company be, and they hereby are, authorized, directed and empowered to prepare or cause to be prepared, execute and deliver all such documents and instruments and to undertake all such actions as they deem necessary or advisable in order to carry out and perform any or all of the matters contemplated by the Plan and Agreement of Reorganization and as authorized in the foregoing resolution.
IN WITNESS WHEREOF, the undersigned has executed this written consent, which shall be effective as of November 15, 2010.
/s/ Peter Smith ---------------------------------- Peter Smith, Director |
EXHIBIT B
CONSENT OF DIRECTORS
OF
GLOBAL EQUITY INTERNATIONAL, INC.
A special meeting of the Directors of Global Equity International, Inc. (the "Corporation"), a Nevada corporation, was held by consent and without an actual meeting. The undersigned, being all of the Directors, do hereby waive notice of the time, place and purpose of this meeting of the Directors of the Corporation and, in lieu thereof, hereby agree and consent to the adoption of the following corporate actions.
WHEREAS, the Corporation intends to purchase all the issued and outstanding registered shares of Global Equity Partners PLC ("GEP") in exchange for approximately 20,000,000 shares of the Corporation's common stock;
WHEREAS, the Corporation's legal counsel has prepared a formal agreement consistent with the terms of the letter of intent, which "Plan and Agreement of Reorganization" is attached hereto as Exhibit "A";
WHEREAS, it is in the Corporation's best interests to approve the terms and execution of the Plan and Agreement of Reorganization on behalf of the Corporation;
NOW, THEREFORE, BE IT RESOLVED that the terms and conditions of the exchange as set forth in the Plan and Agreement of Reorganization be, and the same hereby are, ratified and confirmed, and the President of the Corporation is authorized to execute the same on behalf of the Corporation.
GENERAL AUTHORIZATION
BE IT RESOLVED that the President and Secretary of the Corporation be, and they hereby are, authorized, directed and empowered to prepare or cause to be prepared, execute and deliver all such documents and instruments and to undertake all such actions as they deem necessary or advisable in order to carry out and perform any or all of the matters contemplated by the Plan and Agreement of Reorganization and is authorized in the foregoing resolution.
IN WITNESS WHEREOF, the undersigned has executed this written consent, which shall be effective as of November 15, 2010.
/s/ Neeraj Iver ---------------------------------- Neeraj Iyer, Director |
No schedules were attached to this Agreement at closing for the reason that all schedules referred to in the Agreement were due diligence files reviewed by the parties prior to the closing.
Exhibit 3.1
ROSS MILLER
Secretary of State Document Number
206 North Carson Street 20100750087-50
Carson City, Nevada 89701-4298 Filing Date and Time
(775) 684-5708 10/01/2010 11:30 AM
Website: www.nvsos.gov Entity Number
E0487332010-2
Filed in the office of
ARTICLES OF INCORPORATION /s/ Ross Miller
(PURSUANT TO NRS 78) Ross Miller
Secretary of State
State of Nevada
|
ABOVE SPACE IS FOR OFFICE USE ONLY
1. Name of
Corporation: GLOBAL EQUITY INTERNATIONAL, INC
2. Registered Agent [X] Commercial Registered Agent Paracorp Incorporated
for Service of Name
Process [ ] Noncommercial Registered Agent OR [ ] Office or Position with Entity
(check only one box) (name and address below) (name and address below)
Nevada
Address City Zip Code
Nevada
Mailing Address City Zip Code
(if different from street address)
3. Shares:
(number of shares Number of shares 70,000,000 Common 5,000,000 Preferred Number of shares
corporation with par value: $.001 Par value: $.001 without par value: 0
authorized
to issue)
4. Names & Addresses, 1. Peter Smith
of Board of Name
Directors/Trustees: 1 Berkeley London UK W1J8DJ
(attach additional page Street Address City State Zip Code
if there is more than 3
directors/trustees 2.
Name
Street Address City State Zip Code
5. Purpose: (optional- The purpose of this Corporation shall be:
see instructions)
6. Names, Address Stephanie Cadena /s/ Stephanie Cadena
and Signature of Name Signature
Incorporator.
(attach additional page 21550 Oxnard Street #200 Woodland CA 91367
if there is more than 1 Address City State Zip Code
incorporator).
7. Certificate of I hereby accept appointment as Resident Agent for the above named corporation.
Acceptance of
Appointment of /s/ Nancy Gaches for Paracorp 10/01/10
Resident Agent: Authorized Signature of R. A. or On Behalf of R. A. Company Date
|
Exhibit 3.2
GLOBAL EQUITY INTERNATIONAL, INC.
* * *
BY-LAWS
* * *
ARTICLE I
OFFICES
Section 1. The registered office shall be in Carson City, Nevada.
Section 2. The corporation may also have offices at such other places both within and without the State of Nevada as the board of directors may from time to time determine or the business of the corporation may require.
ARTICLE II
MEETING OF SHAREHOLDERS
Section 1. All meetings of the shareholders for the election of directors shall be held at such place as may be fixed from time to time by the board of directors, or at such other place either within or without the State of Nevada as shall be designated from time to time by the board of directors and stated in the notice of the meeting. Meetings of shareholders for any other purpose may be held at such time and place, within or without the State of Nevada, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof.
Section 2. Annual meetings of shareholders, commencing with the year 2012, shall be held on the second Tuesday of May, if not a legal holiday, and if a legal holiday, then on the next secular day following, at 9 a.m., or at such other date and time as shall be designated from time to time by the board of directors and stated in the notice of the meeting, at which they shall elect by a plurality vote a board of directors, and transact such other business as may properly be brought before the meeting.
Section 3. Written notice of the annual meeting stating the place, date and hour of the meeting shall be given to each shareholder entitled to vote at such meeting not less than twenty (20) days nor more than thirty (30) days before the date of the meeting.
Section 4. The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten (10) days before every meeting of shareholders, a complete list of the shareholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each shareholder and the number of shares registered in the name of each shareholder. Such list shall be open to the examination of any shareholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any shareholder who is present.
Section 5. Special meetings of the shareholders, for any purpose or purposes, unless otherwise prescribed by statute or by the certificate of incorporation, may be called by the president and shall be called by the president or secretary at the request in writing of a majority of the board of directors, or at the request in writing of shareholders owning a majority in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote. Such request shall state the purpose or purposes of the proposed meeting.
Section 6. Written notice of a special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called, shall be given not less than three (3) days nor more than ten (10) days before the date of the meeting, to each shareholder entitled to vote at such meeting.
Section 7. Business transacted at any special meeting of shareholders shall be limited to the purposes stated in the notice.
Section 8. The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the shareholders for the transaction of business except as otherwise provided by statute or by the certificate of incorporation. If, however, such quorum shall not be present or represented at any meeting of the shareholders, the shareholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented any business may be transacted which might have been transacted at the meeting as originally notified. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each shareholder of record entitled to vote at the meeting.
Section 9. When a quorum is present at any meeting, the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of the statutes or of the certificate of incorporation, a different vote is required in which case such express provision shall govern and control the decision of such question.
Section 10. Unless otherwise provided in the articles of incorporation, each shareholder shall at every meeting of the shareholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such shareholder, but no proxy shall be voted on after years from its date, unless the proxy provides for a longer period.
Section 11. Unless otherwise provided in the articles of incorporation, any action required to be taken at any annual or special meeting of shareholders of the corporation, or any action which may be taken at any annual or special meeting of such shareholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those shareholders who have not consented in writing.
ARTICLE III
DIRECTORS
Section 1. The number of directors which shall constitute the whole board shall be not less than two (2) nor more than seven (7). The first board shall consist of one (1) director. Thereafter, within the limits above specified, the number of directors shall be determined by resolution of the board of directors or by the shareholders at the annual meeting. The directors shall be elected at the annual meeting of the shareholders, except as provided in Section 2 of this Article, and each director elected shall hold office until his successor is elected and qualified. Directors need not be shareholders.
Section 2. Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and shall qualify, unless sooner displaced. If there are no directors in office, then an election of directors may be held in the manner provided by statute.
Section 3. The business of the corporation shall be managed by or under the direction of its board of directors which may exercise all such powers of the corporation and do all such lawful acts and things as are not by statute or by the certificate of incorporation or by these by-laws directed or required to be exercised or done by the shareholders.
MEETINGS OF THE BOARD OF DIRECTORS
Section 4. The board of directors of the corporation may hold meetings, both regular and special, either within or without the State of Nevada.
Section 5. The first meeting of each newly elected board of directors shall be held at such time and place as shall be fixed by the vote of the shareholders at the annual meeting and no notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting, provided a quorum shall be present. In the event of the failure of the shareholders to fix the time or place of such first meeting of the newly elected board of directors, or in the event such meeting is not held at the time and place so fixed by the shareholders, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the board of directors, or as shall be specified in a written waiver signed by all of the directors.
Section 6. Regular meetings of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by the board.
Section 7. Special meetings of the board may be called by the president on one (1) days' notice to each director, either personally or by mail or by facsimile communication; special meetings shall be called by the president or secretary in like manner and on like notice on the written request of two directors unless the board consists of only one director; in which case special meetings shall be called by the president or secretary in like manner and on like notice on the written request of the sole director.
Section 8. At all meetings of the board, a majority of directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act
of the board of directors, except as may be otherwise specifically provided by statute or by the certificate of incorporation. If a quorum shall not be present at any meeting of the board of directors the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.
Section 9. Unless otherwise restricted by the certificate of incorporation or these by-laws, any action required or permitted to be taken at any meeting of the board of directors or of any committee thereof may be taken without a meeting, if all members of the board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee.
Section 10. Unless otherwise restricted by the certificate of incorporation or these by-laws, members of the board of directors, or any committee designated by the board of directors, may participate in a meeting of the board of directors, or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.
COMMITTEES OF DIRECTORS
Section 1. The board of directors may designate one or more committees, each committee to consist of one or more of the directors of the corporation. The board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee.
In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of any such absent or disqualified member.
Any such committee, to the extent provided in the resolution of the board of directors, shall have and may exercise all the powers and authority of the board of directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to the following matters: (I) approving or adopting, or recommending to the shareholders, any action or matter expressly required by the corporation laws of Nevada to be submitted to shareholders for approval or (ii) adopting, amending or repealing any by-law of the corporation. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopt4ed by the board of directors.
Section 2. Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required.
Section 3. Unless otherwise restricted by the certificate of incorporation or these by-laws, the board of directors shall have the authority to fix the compensation of directors. The directors may be paid their expenses, if any, of attendance at each meeting of the board of directors and may be paid a fixed sum for attendance at each meeting of the board of directors or a stated salary as director. No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings.
REMOVAL OF DIRECTORS
Section 1. Unless otherwise restricted by the articles of incorporation or by law, any director or the entire board of directors may be removed, with or without cause, by the holders of a majority of the shares entitled to vote at an election of directors.
ARTICLE IV
NOTICES
Section 1. Whenever, under the provisions of the statutes or of the articles of incorporation or of these by-laws, notice is required to be given to any director or shareholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such director or shareholder, at his address as it appears on the records of the corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States Mail. Notice to directors may also be given by facsimile telecommunication.
Section 2. Whenever any notice is required to be given under the provisions of the statutes or of the articles of incorporation or of these by-laws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto.
ARTICLE V
OFFICERS
Section 1. The officers of the corporation shall be chosen by the board of directors and shall be a president, one or more vice presidents, a secretary and a treasurer. The board of directors may also choose additional vice presidents, and one or more assistant secretaries and assistant treasurers. Any number of offices may be held by the same person, unless the certificate of incorporation or these by-laws otherwise provide.
Section 2. The board of directors at its first meeting after each annual meeting of shareholders shall choose a president, one or more vice presidents, a secretary and a treasurer. Any number of offices may be held by the same person, unless the certificate of incorporation or these by-laws otherwise provide.
Section 3. The board of directors may appoint such other officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the board.
Section 4. The salaries of all officers and agents of the corporation shall be fixed by the board of directors.
Section 5. The officers of the corporation shall hold office until their successors are chosen and qualify. Any officer elected or appointed by the board of directors may be removed at any time by the affirmative vote of a majority of the board of directors. Any vacancy occurring in any office of the corporation shall be filled by the board of directors.
THE PRESIDENT
Section 6. Unless otherwise provided, the president shall be the chief executive officer of the corporation, shall preside at all meetings of the shareholders and the board of directors, shall have general and active management of the business of the corporation and shall see that all orders and resolutions of the board of directors are carried into effect.
Section 7. He shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the board of directors to some other officer or agent of the corporation.
THE VICE PRESIDENTS
Section 8. In the absence of the president or in the event of his inability or refusal to act, the vice president (or in the event there be more than one vice president, the vice presidents in the order designated by the directors, or in the absence of any designation, then in the order of their election) shall perform the duties of the president, and when so acting, shall have all the powers of and be subject to all the restrictions upon the president. The vice presidents shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.
THE SECRETARY AND ASSISTANT SECRETARY
Section 9. The secretary shall attend all meetings of the board of directors and all meetings of the shareholders and record all the proceedings of the meetings of the corporation and of the board of directors in a book to be kept for that purpose and shall perform like duties for the standing committees when required. He shall give, or cause to be given, notice of all meetings of the shareholders and special meetings of the board of directors, and shall perform such other duties as may be prescribed by the board of directors or president, under whose supervision he shall be. He shall have custody of the corporate seal of the corporation and he, or an assistant secretary, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by his signature or by the signature of such assistant secretary. The board of directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by his signature.
Section 10. The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the board of directors (or if there be no such determination, then in the order of their election) shall, in the absence of the secretary or in the event of his inability or refusal to act, perform the duti3es and exercise the powers of the secretary and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.
THE TREASURER AND ASSISTANT TREASURERS
Section 11. The treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the board of directors.
Section 12. He shall disburse the funds of the corporation as may be ordered by the board of directors, taking proper vouchers for such disbursements, and shall render to the president and the board of directors, at its regular meetings, or when the board of directors so requires, an account of all his transactions as treasurer and of the financial condition of the corporation.
Section 13. If required by the board of directors, he shall give the corporation a bond (which shall be renewed every six years) in such sum and with such surety or sureties as shall be satisfactory to the board of directors for the faithful performance of the duties of his office and for the restoration to the corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the corporation.
Section 14. The assistant treasurer, or if there shall be more than one, the assistant treasurers in the order determined by the board of directors (or if there be no such determination, then in the order of their election) shall, in the absence of the treasurer or in the event of his inability of refusal to act, perform the duties and exercise the powers of the treasurer and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.
ARTICLE VI
CERTIFICATES FOR SHARES
Section 1. The shares of the corporation shall be represented by a certificate or shall be uncertificated, certificates shall be signed by, or in the name of the corporation by, the chairman or vice chairman of the board of directors, or the president or a vice president, and by the treasurer or an assistant treasurer, or the secretary or an assistant secretary of the corporation.
If the corporation shall be authorized to issue more than one class of stock or more than one series of any class, the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, provided that, except as otherwise provided in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, a statement that the corporation will furnish without charge to each shareholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.
Within a reasonable time after the issuance or transfer or uncertificated stock, the corporation shall send to the registered owner thereof a written notice containing the information required to be set forth or stated on certificates pursuant to laws of Nevada or a statement that the corporation will furnish without charge to each shareholder who so requests the powers, designations, preferences and relative participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.
Section 2. Any of or all the signatures on a certificate may be facsimile In case nay officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue.
LOST CERTIFICATES
Section 3. The board of directors may direct a new certificate or certificates or uncertificated shares to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates or uncertificated shares, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen or destroyed.
TRANSFER OF STOCK
Section 4. Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. Upon receipt of proper transfer instructions from the registered owner of uncertificated shares such uncertificated shares shall be cancelled and issuance of new equivalent uncertificated shares or certificated shares shall be made to the person entitled thereto and the transaction shall be recorded upon the books of the corporation.
FIXING RECORD DATE
Section 5. In order that the corporation may determine the shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled top receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the board of directors may fix, in advance, a record date, which shall not be more than sixty nor less than ten days before the date of such meeting nor more than sixty days prior to any other action. A determination of shareholders of record entitled to notice of or to vote at a meeting of shareholders shall apply to any adjournment of the meeting: provided, however, that the board of directors may fix a new record date for the adjourned meeting.
REGISTERED SHAREHOLDERS
Section 6. The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Nevada.
ARTICLE VII
GENERAL PROVISIONS
DIVIDENDS
Section 1. Dividends upon the capital stock of the corporation, subject to the provisions of the certificate of incorporation, if any, may be declared by the board of directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the articles of incorporation.
Section 2. Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the directors shall think conducive to the interest of the corporation, and the directors may modify or abolish any such reserve in the manner in which it was created.
ANNUAL STATEMENT
Section 3. The board of directors shall present at each annual meeting, and at any special meeting of the shareholders when called for by vote of the shareholders, a full and clear statement of the business and condition of the corporation.
CHECKS
Section 4. All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the board of directors may from time to time designate.
FISCAL YEAR
Section 5. The fiscal year of the corporation shall be fixed by resolution of the board of directors.
SEAL
Section 6. The corporate seal shall have inscribed thereon the name of the corporation, the year of its organization and the words "Corporate Seal, Nevada". The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise; however, it will not be necessary to affix the corporate seal to contracts or other documents to make them legally binding on this corporation.
INDEMNIFICATION
Section 7. The corporation shall indemnify its officers, directors, employees and agents to the fullest extent permitted by the laws of Nevada.
ARTICLE VIII
AMENDMENTS
Section 1. These by-laws may be altered, amended or repealed or new by-laws may be adopted by the shareholders or by the board of directors, when such power is conferred upon the board of directors by the articles of incorporation at any regular meeting of the shareholders or of the board of directors or at any special meeting of the shareholders or of the board of directors if notice of such alteration, amendment, repeal or adoption of new by-laws be contained in the notice of such special meeting. If the power to adopt, amend or repeal by-laws is conferred upon the board of directors by the articles of incorporation it shall not divest or limit the power of the shareholders to adopt, amend or repeal by-laws.
***END***
The above Bylaws were duly adopted by the board of directors of Global Equity International, Inc. effective on October 7, 2011.
/s/ Enzo Taddei ------------------------------------ Chief Financial Officer and Director |
EXHIBIT 4.1 - SPECIMEN STOCK CERTIFICATE
NOT VALID UNLESS COUNTERSIGNED BY TRANSFER AGENT
INCORPORATED UNDER THE LAWS OF THE STATE OF NEVADA
CUSIP NO. ________
NUMBER
SHARES
AUTHORIZED COMMON STOCK: 70,000,000 SHARES
COMMON STOCK PAR VALUE: $.001 EACH
THIS CERTIFIES THAT __________________________________________________________ IS THE RECORD HOLDER OF _______________________________________ Shares of the above named Corporation transferable only on the books of the Corporation in person or by duly authorized attorney, upon surrender of this Certificate properly endorsed. This Certificate is not valid unless countersigned by the Transfer Agent and registered by the Registrar.
IN WITNESS WHEREOF, the said Corporation has caused this Certificate to be signed by its duly authorized officers and its Corporate Seal to be hereunto affixed this ___ day of ________, _______
GLOBAL EQUITY INTERNATIONAL, INC.
Corporate
Seal
Nevada
2010
*****
NOT VALID UNLESS COUNTERSIGNED BY TRANSFER AGENT
Countersigned Registered:
ClearTrust, LLC____________
By__________________________
Authorized Signature
[Reverse Side}
NOTICE: Signature must be guaranteed by a firm, which is a member of a registered national stock exchange, or by a bank (other than a saving bank), or a trust company.
The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations.
TEN COM - as tenants in common UNIF GIFT MIN ACT Custodian
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right under the Uniform Gifts to Minors
of survivorship and not as Act____________
tenants in common (State)
|
Additional abbreviations may also be used though not in the above list.
For value
received,_______________________________________________________________ hereby
sell, assign and transfer unto ______________________________________________
_____Shares represented by the within Certificate and do hereby irrevocably
constitute and appoint ___________________________________ Attorney to transfer
the said Shares on the books of the within named Corporation with full power of
substitution in the premises.
Dated _________________________
In presence of _____________________
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING ZIP CODE OF ASSIGNEE)
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT, OR ANY CHANGE WHATEVER, THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION.
SIGNATURE GUARANTEED:
Exhibit 4.2
ROSS MILLER Document Number
Secretary of State 20110844310-84
204 North Carson Street, Ste 1 Filing Date and Time
Carson City, Nevada 89701-4299 11/30/2011 11:45 AM
(775) 684 5708 Entity#
Website: www.nvsos.gov E0487332010-2
Filed in the office of
/s/ Ross Miller
CERTIFICATE OF DESIGNATION Ross Miller
Before Issuance of Class or Series Secretary of State
(Pursuant to NRS 78.1955) State of Nevada
|
ABOVE SPACE IS FOR OFFICE USE ONLY
CERTIFICATE OF AMENDMENT TO CERTIFICATE OF DESIGNATION FOR
NEVADA PROFIT CORPORATION
(PURSUANT TO NRS 78.1955)
1. Name of Corporation:
Global Equity International, Inc.
2. By Resolution of the Board of Directors the Original Class or Series is Amended as Follows:
To read in its entirety as follows:
Number of Shares: 5,000,000
Designation: Series A Preferred Stock
Voting Rights: Each share has tow (2) votes.
Conversion Rights: Each share will be convertible into two (2) shares of
Common Stock one day after the second anniversary
of issuance.
Dividend Rights: None. Liquidation Rights: None.
|
4. Signature (Required)
/s/ Enzo Taddei ------------------------------ Enzo Taddei Signature of Officer |
Filing Fee: $ 175.00
Stock shall be insufficient to permit in full payment of the Liquidation Preference, then all such assets of the corporation shall be distributed ratably among the holders of the Series A Preferred Stock. Neither the consolidation or merger of the corporation nor the sale, lease or transfer by the corporation of all or part of its assets shall be deemed a liquidation, dissolution or winding up of the corporation for purposes of this Section (c).
(A) DIVIDENDS. The Series A Preferred Stock shall not be entitled to receive any dividends.
(B) VOTING RIGHTS. At any given time, the aggregate number of Series A Preferred Stock outstanding shall have the right to vote that number of shares (when added to holder's 3,200,000 shares of common stock) necessary to provide the holder of the Series A Preferred Stock with the right to vote 51% of the total votes necessary for the election of directors and for any acquisition or merger transaction.
(C) REDEMPTION RIGHTS. The corporation shall have the right at any time to redeem shares of Series A Preferred Stock by paying the holder of same $1.00 per share redeemed. Such redemption may occur any time the corporation has money legally available for such redemption and when the Board of Directors approves such redemption.
Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is executed on the dates set forth below the signatures hereon but effective as of SEPTEMBER 1, 2011, and is by and between GLOBAL EQUITY INTERNATIONAL INC, a Nevada Corporation ("Employer"), and Mr. PETER SMITH a resident of Dubai, UAE ("Employee").
1. DUTIES; ASSIGNMENT
During the term of employment hereunder, Employee shall initially perform the duties of CHIEF EXECUTIVE OFFICER (CEO) of Employer, or such other duties as assigned by and at the location determined by the Board of Directors of Employer. Employee shall oversee the running and development of the company to the best of his ability.
2. COMPENSATION
In consideration of the services rendered by Employee to Employer hereunder, Employer shall pay to Employee an annual salary of no less than $240,000, subject to annual review and adjustment of no less than a 5% PERCENTAGE INCREASE, if any, in the U.S. Consumer Price Index during such year ("Base Salary"). This Salary shall be paid on a monthly basis to the employee or a Company owned by the Employee at the option of the Employee.
3. EMPLOYMENT
Employer hereby employs Employee and Employee hereby accepts employment on the terms set forth herein COMMENCING ON THE FIRST DAY OF SEPTEMBER, 2011.
(a) Employment will continue for 36 MONTHS and until terminated as hereafter set forth.
(b) The Company agrees to ACCRUE THE MONTHLY FROM SEPTEMBER 2011 onwards. PAYMENT OF THE ACCRUED AMOUNTS shall commence no later than JANUARY 2ND 2012 and payment of the ONGOING MONTHLY salary shall commence on the last working day of JANUARY 2012.
(c) Employer shall have the right to terminate this Agreement and all of Employee's rights shall thereupon terminate upon the disability (for 180 or more days, whether or not consecutive, in any 360 day period) of Employee ("Disability") and the Employer giving written notice thereof, and this Agreement shall automatically terminate upon the death of Employee ("Death").
(d) Employer shall have the right to terminate Employee's employment (1)
for any reason or no reason with either (i) 60 days prior written
notice of termination or (ii) immediate notice of termination with an
undertaking to continue payment of Employee's compensation under this
Agreement for 90 days, (2) at any time during the thirty six month
period following the execution of this agreement and with 30 days
prior written notice or (3) for Cause (as defined below), upon
Employee's receipt of notice thereof. . As used herein, "Cause" means
(i) willful or serious misconduct or dishonesty in the performance of,
Employee's duties hereunder or (ii) the indictment or conviction of
Employee for a felony under state or federal criminal laws. Upon the
effective date of termination specified in such notice, this Agreement
shall terminate except for the provisions, which expressly survive
termination, and Employee shall vacate the offices of Employer.
(e) Employee shall have the right to terminate employment hereunder by providing 30 days written notice. Thereafter, this Agreement shall terminate except for the provisions, which expressly survive termination.
4. SEVERANCE PAYMENTS
(a) If Employer terminates this Agreement for any reason other than Disability, Death, Employee shall be entitled to receive, and Employer shall make, the following severance payments:
(i) continue to pay a sum equivalent to SIX MONTHS' SALARY.
(b) If Employer terminates this Agreement by reason of the Disability of Employee or if this Agreement is automatically terminated upon the Death of Employee pursuant to Section 3(b), Employee or his estate shall be entitled to receive, and Employer shall make, the following severance payments:
(i) continue to pay a sum equivalent to FIVE YEARS ANNUAL SALARY via the life assurance scheme to be put in place January 2012
5. EXPENSES
Employer shall reimburse Employee's expenses reasonably incurred in carrying out his duties hereunder within 30 days of submittal of an itemized account of such expenses together with such receipts and forms as are required by Employer's normal policies and practices. In the event of cash advances such reimbursements will be credited against the advanced account.
6. BENEFITS
Employer shall provide and Employee shall be entitled to participate in an all benefit plans and programs generally available to employees of Employer on the same terms as other employees except as follows:
(a) Vacation: Employee shall be entitled to four weeks paid vacation per year scheduled at times mutually convenient to Employee and Employer. Employee shall be entitled to carry over unused vacation days into the next year in accordance with Employer's policy, as modified from time to time. Employee shall be entitled to all holidays as allowed to other employees of the Employer with similar responsibilities.
(b) Life Insurance: The employee shall be entitled a life insurance coverage equivalent five years of gross salary.
(c) Medical: The employee and his family shall be entitled to full health insurance coverage by a reputable insurance company of the employee's choice.
(d) Stock Options: The employee shall be entitled to stock options to be agreed before September 30, 2011.
7. CONFIDENTIALITY; NON-DISCLOSURE
(a) For the purpose of this Agreement, "Confidential Information" is defined to include any information, designs, software, processes, practices, plans, proposals, markets, pricing, personnel or financial or business information relating to Employer, its affiliates (including the Subsidiary), and their respective businesses, customers, suppliers, products or services, whether in written, oral or other form. Confidential Information shall not include information, which at the time of disclosure is in the public domain by publication or otherwise through no fault of Employee, or information furnished by a third party which was not received directly from Employer or otherwise under an obligation of secrecy.
(b) At all times after the date hereof, including after termination of this Agreement, Employee shall not, except with the expressed prior written consent of Employer, directly or indirectly communicate, disclose or divulge any of the Confidential Information or use any of the Confidential Information for any purpose other than performance of his duties hereunder.
(c) Employee agrees that Employer will own all work products of any type and in any form or media produced or created by Employee in the course of his employment. Employee hereby acknowledges that all such work products are specially ordered or commissioned by Employer and shall be considered works made for hire as such terms is defined in the United States Copyright Act of 1976, 17 U.S.C.
8. AGREEMENT NOT TO COMPETE
For so long as Employee is entitled to receive severance payments under Sections
4(a), 4(b) or 4(c), or (ii) for a period of one year from the effective date of
termination if Employee voluntarily terminates his employment hereunder or if
Employee is terminated by Employer for Cause, Employee agrees that he will not,
directly or indirectly, (1) be employed by, serve as a consultant or advisor to,
or have a material ownership interest in any corporation or other entity whose
business is competitive (as reasonably determined by the Board of Directors of
Employer) with the business of Employer, the Subsidiary or any of their
affiliates; provided, however that this clause (1) shall not prohibit any such
employment or other relationship with an entity which itself is not, but has a
separate corporate affiliate which is, engaged in such competitive business so
long as Employee does not provide services to, assist or advise such competitive
affiliate in any way, or (2) induce or solicit any other person who was employed
by Employer, Subsidiary or any of their affiliates at any time during Employee's
employment by Employer to engage in any line of business competitive with that
of Employer, Subsidiary or their affiliates.
9. NO CONFLICTING AGREEMENTS
Employee represents and warrants that he is not a party to or bound by any agreement or subject to any restriction arising out of any current or prior employment or relationship which would be violated by his entering into and performing his obligations under this Agreement, including, without limitation, restrictions relating to non-competition or the protection of confidential information.
10. NOTICES
All notices and other communication which are required or permitted hereunder shall be given in writing and either delivered by hand or overnight courier service or mailed by certified mail, return receipt requested, postage prepaid, to the following addresses:
GLOBAL EQUITY INTERNATIONAL INC.
1 Berkeley Street,
London, W1 8DJ,
United Kingdom.
PETER SMITH
Villa K23
Palm Jumeriah
Dubai UAE
11. MISCELLANEOUS
(a) This Agreement shall be binding upon, inure to the benefit of, and enforceable by the successors and assigns of the Employer and the heirs, estate, personal representatives and beneficiaries of Employee. The rights, obligations and duties of the Employee hereunder shall be personal and are not assignable or delegable in any manner whatsoever; provided, however, that this Agreement shall be assigned to and assumed by the Subsidiary if and when required by Section 1.
(b) The obligations of the parties in Sections 4, 7, 8 and 11 shall survive any termination of this Agreement.
(c) This Agreement constitutes the entire understanding of the parties with respect to subject matter hereof, and shall not be modified, terminated or any provisions waived orally, including this clause. Any such modification, termination or waiver must be in writing and signed by each of the parties hereto.
(d) No failure to exercise or delay in exercising any right, power or remedy hereunder shall preclude any other or further exercise of the same or any other right, power or remedy.
(e) This Agreement shall be construed and enforced in accordance with the laws of the State of Nevada applicable to contracts made and to be performed solely therein, and each party consents to the exclusive jurisdiction of and venue in the State and Federal courts of Nevada to resolve any disputes between the parties.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date indicated below intending to be legally bound hereby.
GLOBAL EQUITY INTERNATIONAL INC. EMPLOYEE /s/ Enzo Taddei /s/ Peter Smith -------------------------------- -------------------------------- Enzo Taddei Peter Smith CFO Dated: September 1, 2011 Dated: September 1, 2011 |
Exhibit 10.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is executed on the dates set forth below the signatures hereon but effective as of SEPTEMBER 1, 2011, and is by and between GLOBAL EQUITY INTERNATIONAL INC, a Nevada Corporation ("Employer"), and Mr. ENZO TADDEI a resident of Malaga, Spain ("Employee").
1. DUTIES; ASSIGNMENT
During the term of employment hereunder, Employee shall initially perform the duties of CHIEF FINANCIAL OFFICER (CFO) of Employer, or such other duties as assigned by and at the location determined by the Board of Directors of Employer. Employee shall oversee the financial affairs of the Employer to the best of his ability.
2. COMPENSATION
In consideration of the services rendered by Employee to Employer hereunder, Employer shall pay to Employee an annual salary of no less than $120,000, subject to annual review and adjustment of no less than a 5% PERCENTAGE INCREASE, if any, in the U.S. Consumer Price Index during such year ("Base Salary"). This Salary shall be paid on a monthly basis to the employee or a Company owned by the Employee at the option of the Employee.
3. EMPLOYMENT
Employer hereby employs Employee and Employee hereby accepts employment on the terms set forth herein COMMENCING ON THE FIRST DAY OF SEPTEMBER, 2011.
(a) Employment will continue for 36 MONTHS and until terminated as hereafter set forth.
(b) The Company agrees to ACCRUE THE MONTHLY SALARY FROM SEPTEMBER 2011 onwards. PAYMENT OF THE ACCRUED AMOUNTS shall commence no later than JANUARY 2ND 2012 and payment of the ONGOING MONTHLY SALARY shall commence on the last working day of JANUARY 2012.
(c) Employer shall have the right to terminate this Agreement and all of Employee's rights shall thereupon terminate upon the disability (for 180 or more days, whether or not consecutive, in any 360 day period) of Employee ("Disability") and the Employer giving written notice thereof, and this Agreement shall automatically terminate upon the death of Employee ("Death").
(d) Employer shall have the right to terminate Employee's employment (1)
for any reason or no reason with either (i) 60 days prior written
notice of termination or (ii) immediate notice of termination with an
undertaking to continue payment of Employee's compensation under this
Agreement for 90 days, (2) at any time during the thirty six month
period following the execution of this agreement and with 30 days
prior written notice or (3) for Cause (as defined below), upon
Employee's receipt of notice thereof. . As used herein, "Cause" means
(i) willful or serious misconduct or dishonesty in the performance of,
Employee's duties hereunder or (ii) the indictment or conviction of
Employee for a felony under state or federal criminal laws. Upon the
effective date of termination specified in such notice, this Agreement
shall terminate except for the provisions, which expressly survive
termination, and Employee shall vacate the offices of Employer.
(e) Employee shall have the right to terminate employment hereunder by providing 30 days written notice. Thereafter, this Agreement shall terminate except for the provisions, which expressly survive termination.
4. SEVERANCE PAYMENTS
(a) If Employer terminates this Agreement for any reason other than Disability, Death, Employee shall be entitled to receive, and Employer shall make, the following severance payments:
(i) continue to pay a sum equivalent to SIX MONTHS' SALARY.
(b) If Employer terminates this Agreement by reason of the Disability of Employee or if this Agreement is automatically terminated upon the Death of Employee pursuant to Section 3(b), Employee or his estate shall be entitled to receive, and Employer shall make, the following severance payments:
(i) continue to pay a sum equivalent to FIVE YEARS ANNUAL SALARY via the life assurance scheme to be put in place January 2012
5. EXPENSES
Employer shall reimburse Employee's expenses reasonably incurred in carrying out his duties hereunder within 30 days of submittal of an itemized account of such expenses together with such receipts and forms as are required by Employer's normal policies and practices. In the event of cash advances such reimbursements will be credited against the advanced account.
6. BENEFITS
Employer shall provide and Employee shall be entitled to participate in an all benefit plans and programs generally available to employees of Employer on the same terms as other employees except as follows:
(a) Vacation: Employee shall be entitled to four weeks paid vacation per year scheduled at times mutually convenient to Employee and Employer. Employee shall be entitled to carry over unused vacation days into the next year in accordance with Employer's policy, as modified from time to time. Employee shall be entitled to all holidays as allowed to other employees of the Employer with similar responsibilities.
(b) Life Insurance: The employee shall be entitled a life insurance coverage equivalent five years of gross salary.
(c) Medical: The employee and his family shall be entitled to full health insurance coverage by a reputable insurance company of the employee's choice.
(d) Stock Options: The employee shall be entitled to stock options to be agreed before September 30, 2011.
7. CONFIDENTIALITY; NON-DISCLOSURE
(a) For the purpose of this Agreement, "Confidential Information" is defined to include any information, designs, software, processes, practices, plans, proposals, markets, pricing, personnel or financial or business information relating to Employer, its affiliates (including the Subsidiary), and their respective businesses, customers, suppliers, products or services, whether in written, oral or other form. Confidential Information shall not include information, which at the time of disclosure is in the public domain by publication or otherwise through no fault of Employee, or information furnished by a third party which was not received directly from Employer or otherwise under an obligation of secrecy.
(b) At all times after the date hereof, including after termination of this Agreement, Employee shall not, except with the expressed prior written consent of Employer, directly or indirectly communicate, disclose or divulge any of the Confidential Information or use any of the Confidential Information for any purpose other than performance of his duties hereunder.
(c) Employee agrees that Employer will own all work products of any type and in any form or media produced or created by Employee in the course of his employment. Employee hereby acknowledges that all such work products are specially ordered or commissioned by Employer and shall be considered works made for hire as such terms is defined in the United States Copyright Act of 1976, 17 U.S.C.
8. AGREEMENT NOT TO COMPETE
For so long as Employee is entitled to receive severance payments under Sections
4(a), 4(b) or 4(c), or (ii) for a period of one year from the effective date of
termination if Employee voluntarily terminates his employment hereunder or if
Employee is terminated by Employer for Cause, Employee agrees that he will not,
directly or indirectly, (1) be employed by, serve as a consultant or advisor to,
or have a material ownership interest in any corporation or other entity whose
business is competitive (as reasonably determined by the Board of Directors of
Employer) with the business of Employer, the Subsidiary or any of their
affiliates; provided, however that this clause (1) shall not prohibit any such
employment or other relationship with an entity which itself is not, but has a
separate corporate affiliate which is, engaged in such competitive business so
long as Employee does not provide services to, assist or advise such competitive
affiliate in any way, or (2) induce or solicit any other person who was employed
by Employer, Subsidiary or any of their affiliates at any time during Employee's
employment by Employer to engage in any line of business competitive with that
of Employer, Subsidiary or their affiliates.
9. NO CONFLICTING AGREEMENTS
Employee represents and warrants that he is not a party to or bound by any agreement or subject to any restriction arising out of any current or prior employment or relationship which would be violated by his entering into and performing his obligations under this Agreement, including, without limitation, restrictions relating to non-competition or the protection of confidential information.
10. NOTICES
All notices and other communication which are required or permitted hereunder shall be given in writing and either delivered by hand or overnight courier service or mailed by certified mail, return receipt requested, postage prepaid, to the following addresses:
GLOBAL EQUITY INTERNATIONAL INC.
1 Berkeley Street,
London, W1 8DJ,
United Kingdom.
ENZO TADDEI
Avenida Marques del Duero 67,
Edificio Bahia 2-A,
29670 San Pedro de Alcantara,
Malaga (Spain)
11. MISCELLANEOUS
(a) This Agreement shall be binding upon, inure to the benefit of, and enforceable by the successors and assigns of the Employer and the heirs, estate, personal representatives and beneficiaries of Employee. The rights, obligations and duties of the Employee hereunder shall be personal and are not assignable or delegable in any manner whatsoever; provided, however, that this Agreement shall be assigned to and assumed by the Subsidiary if and when required by Section 1.
(b) The obligations of the parties in Sections 4, 7, 8 and 11 shall survive any termination of this Agreement.
(c) This Agreement constitutes the entire understanding of the parties with respect to subject matter hereof, and shall not be modified, terminated or any provisions waived orally, including this clause. Any such modification, termination or waiver must be in writing and signed by each of the parties hereto.
(d) No failure to exercise or delay in exercising any right, power or remedy hereunder shall preclude any other or further exercise of the same or any other right, power or remedy.
(e) This Agreement shall be construed and enforced in accordance with the laws of the State of Nevada applicable to contracts made and to be performed solely therein, and each party consents to the exclusive jurisdiction of and venue in the State and Federal courts of Nevada to resolve any disputes between the parties.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date indicated below intending to be legally bound hereby.
GLOBAL EQUITY INTERNATIONAL INC. EMPLOYEE /s/ Peter Smith /s/ Enzo Taddei -------------------------------- -------------------------------- Peter Smith Enzo Taddei CEO Dated: September 1, 2011 Dated: September 1, 2011 |
Exhibit 10.3
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is executed on the dates set forth below the signatures hereon but effective as of SEPTEMBER 1, 2011, and is by and between GLOBAL EQUITY INTERNATIONAL INC, a Nevada Corporation ("Employer"), and Mr. ADRIAN SCARROTT a resident of London, UK ("Employee").
1. DUTIES; ASSIGNMENT
During the term of employment hereunder, Employee shall initially perform the duties of NEW BUSINESS DIRECTOR of Employer, or such other duties as assigned by and at the location determined by the Board of Directors of Employer. Employee shall introduce the company to new potential opportunities and introducers, in addition the employee will be responsible for shareholders communication, public relations and website management to the best of his ability.
2. COMPENSATION
In consideration of the services rendered by Employee to Employer hereunder, Employer shall pay to Employee an annual salary of no less than $40,000, subject to annual review and adjustment of no less than a 5% PERCENTAGE INCREASE, if any, in the U.S. Consumer Price Index during such year ("Base Salary"). This Salary shall be paid on a monthly basis to the employee or a Company owned by the Employee at the option of the Employee.
3. EMPLOYMENT
Employer hereby employs Employee and Employee hereby accepts employment on the terms set forth herein COMMENCING ON THE FIRST DAY OF SEPTEMBER, 2011.
(a) Employment will continue for 12 MONTHS and until terminated as hereafter set forth.
(b) The Company agrees to ACCRUE THE MONTHLY FROM SEPTEMBER 2011 onwards. PAYMENT OF THE ACCRUED AMOUNTS shall commence no later than JANUARY 2ND 2012 and payment of the ONGOING MONTHLY salary shall commence on the last working day of JANUARY 2012.
(c) Employer shall have the right to terminate this Agreement and all of Employee's rights shall thereupon terminate upon the disability (for 180 or more days, whether or not consecutive, in any 360 day period) of Employee ("Disability") and the Employer giving written notice thereof, and this Agreement shall automatically terminate upon the death of Employee ("Death").
(d) Employer shall have the right to terminate Employee's employment (1)
for any reason or no reason with either (i) 60 days prior written
notice of termination or (ii) immediate notice of termination with an
undertaking to continue payment of Employee's compensation under this
Agreement for 90 days, (2) at any time during the thirty six month
period following the execution of this agreement and with 30 days
prior written notice or (3) for Cause (as defined below), upon
Employee's receipt of notice thereof. . As used herein, "Cause" means
(i) willful or serious misconduct or dishonesty in the performance of,
Employee's duties hereunder or (ii) the indictment or conviction of
Employee for a felony under state or federal criminal laws. Upon the
effective date of termination specified in such notice, this Agreement
shall terminate except for the provisions, which expressly survive
termination, and Employee shall vacate the offices of Employer.
(e) Employee shall have the right to terminate employment hereunder by providing 30 days written notice. Thereafter, this Agreement shall terminate except for the provisions, which expressly survive termination.
4. SEVERANCE PAYMENTS
(a) If Employer terminates this Agreement for any reason other than Disability, Death, Employee shall be entitled to receive, and Employer shall make, the following severance payments:
(i) continue to pay a sum equivalent to TWO MONTHS' SALARY.
(b) If Employer terminates this Agreement by reason of the Disability of Employee or if this Agreement is automatically terminated upon the Death of Employee pursuant to Section 3(b), Employee or his estate shall be entitled to receive, and Employer shall make, the following severance payments:
(i) continue to pay a sum equivalent to THREE YEARS ANNUAL SALARY via the life assurance scheme to be put in place January 2012
5. EXPENSES
Employer shall reimburse Employee's expenses reasonably incurred in carrying out his duties hereunder within 30 days of submittal of an itemized account of such expenses together with such receipts and forms as are required by Employer's normal policies and practices. In the event of cash advances such reimbursements will be credited against the advanced account.
6. BENEFITS
Employer shall provide and Employee shall be entitled to participate in an all benefit plans and programs generally available to employees of Employer on the same terms as other employees except as follows:
(a) Vacation: Employee shall be entitled to four weeks paid vacation per year scheduled at times mutually convenient to Employee and Employer. Employee shall be entitled to carry over unused vacation days into the next year in accordance with Employer's policy, as modified from time to time. Employee shall be entitled to all holidays as allowed to other employees of the Employer with similar responsibilities.
(b) Life Insurance: The employee shall be entitled a life insurance coverage equivalent 3 years of gross salary.
7. CONFIDENTIALITY; NON-DISCLOSURE
(a) For the purpose of this Agreement, "Confidential Information" is defined to include any information, designs, software, processes, practices, plans, proposals, markets, pricing, personnel or financial or business information relating to Employer, its affiliates (including the Subsidiary), and their respective businesses, customers, suppliers, products or services, whether in written, oral or other form. Confidential Information shall not include information, which at the time of disclosure is in the public domain by publication or otherwise through no fault of Employee, or information furnished by a third party which was not received directly from Employer or otherwise under an obligation of secrecy.
(b) At all times after the date hereof, including after termination of this Agreement, Employee shall not, except with the expressed prior written consent of Employer, directly or indirectly communicate, disclose or divulge any of the Confidential Information or use any of the Confidential Information for any purpose other than performance of his duties hereunder.
(c) Employee agrees that Employer will own all work products of any type and in any form or media produced or created by Employee in the course of his employment. Employee hereby acknowledges that all such work products are specially ordered or commissioned by Employer and shall be considered works made for hire as such terms is defined in the United States Copyright Act of 1976, 17 U.S.C.
8. AGREEMENT NOT TO COMPETE
For so long as Employee is entitled to receive severance payments under Sections
4(a), 4(b) or 4(c), or (ii) for a period of one year from the effective date of
termination if Employee voluntarily terminates his employment hereunder or if
Employee is terminated by Employer for Cause, Employee agrees that he will not,
directly or indirectly, (1) be employed by, serve as a consultant or advisor to,
or have a material ownership interest in any corporation or other entity whose
business is competitive (as reasonably determined by the Board of Directors of
Employer) with the business of Employer, the Subsidiary or any of their
affiliates; provided, however that this clause (1) shall not prohibit any such
employment or other relationship with an entity which itself is not, but has a
separate corporate affiliate which is, engaged in such competitive business so
long as Employee does not provide services to, assist or advise such competitive
affiliate in any way, or (2) induce or solicit any other person who was employed
by Employer, Subsidiary or any of their affiliates at any time during Employee's
employment by Employer to engage in any line of business competitive with that
of Employer, Subsidiary or their affiliates.
9. NO CONFLICTING AGREEMENTS
Employee represents and warrants that he is not a party to or bound by any agreement or subject to any restriction arising out of any current or prior employment or relationship which would be violated by his entering into and performing his obligations under this Agreement, including, without limitation, restrictions relating to non-competition or the protection of confidential information.
10. NOTICES
All notices and other communication which are required or permitted hereunder shall be given in writing and either delivered by hand or overnight courier service or mailed by certified mail, return receipt requested, postage prepaid, to the following addresses:
GLOBAL EQUITY INTERNATIONAL INC.
1 Berkeley Street,
London, W1 8DJ,
United Kingdom.
ADRIAN SCARROTT
9 Crown Lane
Chiselhurst
Kent UK
11. MISCELLANEOUS
(a) This Agreement shall be binding upon, inure to the benefit of, and enforceable by the successors and assigns of the Employer and the heirs, estate, personal representatives and beneficiaries of Employee. The rights, obligations and duties of the Employee hereunder shall be personal and are not assignable or delegable in any manner whatsoever; provided, however, that this Agreement shall be assigned to and assumed by the Subsidiary if and when required by Section 1.
(b) The obligations of the parties in Sections 4, 7, 8 and 11 shall survive any termination of this Agreement.
(c) This Agreement constitutes the entire understanding of the parties with respect to subject matter hereof, and shall not be modified, terminated or any provisions waived orally, including this clause. Any such modification, termination or waiver must be in writing and signed by each of the parties hereto.
(d) No failure to exercise or delay in exercising any right, power or remedy hereunder shall preclude any other or further exercise of the same or any other right, power or remedy.
(e) This Agreement shall be construed and enforced in accordance with the laws of the State of Nevada applicable to contracts made and to be performed solely therein, and each party consents to the exclusive jurisdiction of and venue in the State and Federal courts of Nevada to resolve any disputes between the parties.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date indicated below intending to be legally bound hereby.
GLOBAL EQUITY INTERNATIONAL INC. EMPLOYEE /s/ Peter Smith /s/ Adrian Scarrott -------------------------------- -------------------------------- Peter Smith Adrian Scarrott CEO Dated: September 1, 2011 Dated: September 1, 2011 |
Exhibit 10.4
[LETTERHEAD OF GE PARTNERS PLC]
1 PARTIES TO THE AGREEMENT
1.1 GE Partners PLC ("GEP") domiciled in 306 Victoria House, Victoria, Mahe, Republic of Seychelles and 1 Berkeley Street, London W1J 8DJ, United Kingdom WIJ 8DJ.
1.2 Black Swan Data Ltd. Of 59 Lafone Street, London, UK SC1 2LX
APPOINTMENT
1.3 GEP is hereby engaged by the Company as its corporate finance adviser in relation to the Acquisition and the Company accordingly agrees itself not to appoint and not to instruct any other person on its behalf to appoint any other person as arranger/ advisor for such purpose at any time during the Engagement Period (as defined in paragraph 5) without GEP's specific consent, such consent not to be unreasonably withheld. Further, during the Engagement Period the Company itself shall ensure that no other person on its behalf instructs any other agents, intermediaries or advisors in relation to the Acquisition without GEP's prior written approval.
1.4 The Company shall promptly inform GEP of all information, inquiries and proposals it has received before or receives at any time during the Engagement Period with respect to the Acquisition.
1.5 GEP shall inform the Company on a regular basis of any information that may come to its attention regarding the Acquisition during the Engagement Period.
SERVICES TO BE PROVIDED BY GEP
1.6 GEP will act as corporate finance adviser to the Company in connection with the transaction. As such, GEP will use all reasonable endeavours to provide the following advice, assistance and services:
1.7 GEP shall advise the Company on structuring and arranging the Acquisition. Additionally, as arranger, GEP shall assist in the preparation and authorisation of documentation, as required.
1.8 GEP shall use reasonable efforts through its marketing and public relations contacts to support and market the Acquisition including; (i) where appropriate, arrange meetings and assist in presentations; (ii) assist the Company, the Directors and their advisors in negotiating definitive documentation and (iii) take such other actions as are reasonably necessary to give effect to the foregoing. The Company will give GEP reasonable and
prompt co-operation and assistance to support GEP in the provision of its services hereunder and keep GEP informed of all developments relevant to the Acquisition ("the Services").
1.9 The Company acknowledges that this engagement letter does not constitute any understanding or commitment whatsoever by GEP, or any of its respective affiliates, to participate financially in any way in the Acquisition.
1.10 At the Company's option, GEP agrees to introduce to the Company professional advisers to include but not be limited to reporting accountants, auditors, lawyers and registrars, it being understood that all fees in connection with such professional advice will be borne by the Company.
1.11 At the Company's option, GEP agrees to provide assistance in the marketing of the Company's product, any such assistance to be governed by a separate agreement.
3.7 GEP shall on a best efforts basis seek to provide or make relevant introductions to provide:
* Any finance required for the listing and additional finance as agreed
with the company for
* Ongoing development pre listing. Post listing finance is by separate
negotiation.
FEES AND EXPENSES
1.12 In consideration of GEP providing the Services, the Company will pay GEP the following fees, together with any applicable VAT thereon:
(a) 10% of the Target Company's issued share capital.
(b) $180,000 Fully Inclusive on the following terms.
i) $40,000 upon signing of this contract.
ii) $80,000 from the first $100,000 raised via the PPM.
iii) $60,000 from the second $100,000 raised from the PPM.
(c) Upon successful quotation on the stock market GEP will be appointed consultant to the company at a rate of $7500 per month for a period of 24 months to drive the company towards a full listing on NASDAQ USA or an alternatively suitable high profile American stock market. Should the process of driving the company to NASDAQ take longer than 2 years no further consultancy fees will be due unless that time delay is due to failure to follow recommended tasks by the company.
In addition Black Swan Data Ltd. will pay the relevant fees due as they become due to the accountants and auditors.
In addition, the Company shall reimburse GEP on demand for all out-of-pocket expenses incurred by GEP in providing the Services, including but not limited to travel, accommodation and professional advisors fees, subject to the presentation of invoices to the Company, together with any taxes thereon. All such expenses in excess of (euro)1,000 (One Thousand Euros) will be subject to the prior written consent of the Company, such consent not to be unreasonably withheld.
1.13 In the event that GEP provides the Services hereunder and such Acquisition thereafter does not proceed owing to a material or adverse change in the structure of the Company or to any failure on the part of the Company to close on such Acquisition, the Company shall be required to pay to GEP a cancellation fee of $100,000 (One Hundred Thousand Dollars).
1.14 All fees as referred to in this paragraph 4 shall be paid in USD$ or an alternative currency using the days prevailing interbank exchange rate. All out of pocket expenses to be reimbursed to GEP shall be reimbursed in the currency in which they were incurred.
ENGAGEMENT PERIOD AND TERMINATION
1.15 GEP's engagement hereunder shall become effective on the date the Company executes and delivers this engagement letter to GEP and shall remain in effect until termination in accordance with the following provisions of this paragraph 5 ("the Engagement Period").
(a) Termination of this agreement shall occur on the following events/circumstances:
GEP shall be entitled to terminate:
i) in the event there has been a material breach of the terms of the
engagement letter by the Company;
ii) otherwise, subject to the minimum term established in clause 4.1
(c), above, at any time as GEP so wishes on giving 30 (thirty)
days written notice to the Company.
(b) The Company shall be entitled to terminate:
iii) in the event there has been a material breach of the terms of the
engagement letter by the Company;
iv) otherwise, subject to the minimum term established in clause 4.1
(c), above, and to giving 30 (thirty) days written notice to GEP,
in the event that the Company in its discretion no longer wishes
to proceed with the Acquisition, in which event the cancellation
fee specified in clause 4.2 hereof will become immediately
payable.
(c) At any time but without prejudice to the foregoing as specifically agreed between the parties in writing.
1.16 Upon termination of this engagement letter, neither party shall have any continuing liability or obligation to the other.
INFORMATION AND CO-OPERATION
1.17 In connection with GEP's engagement hereunder, the Company shall provide GEP with such information and documents as GEP may consider necessary or desirable in order to enable it to provide the Services and to carry out its duties and responsibilities hereunder. In particular, and without prejudice to the generality of the foregoing, the Company will promptly furnish GEP with such information as GEP may request in order to permit GEP to assist the Company in preparing any material required for the Acquisition (collectively, the "Acquisition Documents").
1.18 The Company will be solely responsible for the contents of any Acquisition Documents and the Company represents and warrants to GEP that the Acquisition Documents will, as of the date of any marketing, distribution of the Acquisition Documents or completion, or preparation of the Acquisition, be true and accurate in all material respects, not omit any material fact and not be misleading in any respect and, with respect to any financial projections, the Company represents that they have been, or will be, prepared in good faith on the basis of reasonable assumptions. The Company agrees to advise GEP promptly of the occurrence of any event or any other change known to the Company which results in any of the Acquisition Documents containing any untrue statement of a material fact or omitting to state a material fact the omission of which would render any statements contained therein, in light of the circumstances under which they were made, misleading and in such event the Company shall provide corrective information to GEP suitable for inclusion in a supplemental information statement. For purposes of this paragraph notification by the Company must
be made directly to GEP and GEP shall not be deemed notified solely as a result of action, notice or the constructive knowledge of any of its Related Parties.
1.19 The Company acknowledges that GEP (i) will use and rely upon the information provided by the Company or on its behalf which will comprise the Acquisition Documents absolutely and without GEP itself independently verifying any of the same, (ii) does not itself assume any responsibility for the accuracy of completeness of the Acquisition Documents.
1.20 The Company hereby authorises GEP to provide the Acquisition Documents on its behalf to those concerned with the Acquisition. GEP shall each have the right to review and be required to approve all Acquisition Documents and every form of letter, circular, notice, memorandum or other written communication from the Company or any person acting on its behalf in connection with the Acquisition and the persons to whom any of the foregoing are to be directed, such approval not to be unreasonably withheld.
1.21 The Company shall at all times use its efforts to assist GEP in providing the Services and in carrying out its duties, functions and responsibilities hereunder and shall co-operate and use all reasonable efforts to assist GEP in complying with the applicable laws of any jurisdiction in which GEP operating.
CONFIDENTIALITY
1.22 GEP acknowledges that, in performing its duties from time to time hereunder, it shall receive from the Company certain information relating to the Company, the Acquisition and otherwise to the transactions contemplated by this engagement letter. For purposes of this paragraph, all such information, except for information which (i) is comprised in Acquisition Documents as approved by the Company (ii) GEP is otherwise authorised by the Company to disclose to third parties otherwise than on a confidential basis, (iii) is or becomes generally available to the public other than as a result of a disclosure by GEP where such disclosure is not permitted, or (iv) is or becomes available to GEP on a non-confidential basis from a person or entity other than the Company, is hereinafter referred to as "Confidential Information".
1.23 GEP shall keep the Confidential Information confidential and not without the Company's prior consent, except as required by law, legal process, or regulatory authority, (i) disclose or reveal any Confidential Information to any person, firm or entity other than those employees, agents or advisors of GEP who are actively and directly participating in the transactions contemplated by this engagement letter or who otherwise need to know the Confidential Information for the purpose of evaluating,
structuring or reviewing any portion of the Acquisition or GEP's role with respect thereto, or (ii) use Confidential Information for any purpose other than in connection with the transactions contemplated by this engagement letter.
1.24 If GEP's engagement is terminated at any time, GEP shall continue to maintain the Confidential Information in confidence in accordance with the terms of this engagement letter and, upon the written request of the Company, such Confidential Information and all copies thereof as are held by GEP, will be returned to the Company, or destroyed by GEP, provided, however, that GEP may retain one copy of the Confidential Information in the files of its general counsel for compliance purposes or for the purpose of defending or maintaining any litigation relating to this engagement letter.
1.25 If GEP should decide that any such Confidential Information should be included in the Acquisition Documents, and the Company withholds its consent to such disclosure or refrains from co-operating fully in such disclosure, GEP may immediately terminate the Services and the Company shall immediately reimburse all GEP's fees and expenses due under clause 4 herein., as provided in paragraph 4.3 together with all fees, if any, due under paragraph 4.2.
1.26 The Company agrees that this engagement letter (including the fact of its existence and its terms and conditions), and the services it describes, together with any related information or documents, constitute confidential and propriety information of GEP. The Company further agrees that its written and verbal reports to the Company and all writings prepared by or on behalf of GEP and furnished to the Company in connection with GEP's engagement hereunder (collectively the "GEP Information") shall be kept confidential and the Company shall not without GEP's prior written consent, except as required by law, legal process or a regulatory authority, (i) disclose or reveal any GEP Information to any person, firm or entity other than those employees, agents or advisors of the Company who are actively and directly participating in the transactions contemplated by this engagement letter or otherwise needed to know the GEP Information for the purpose of evaluating, structuring or reviewing any portion of the Acquisition or the Company's participation with respect thereto, or (ii) use the GEP Information for any purpose other than in connection with the transactions contemplated by this engagement letter.
RELATED PARTIES
GEP acknowledges that it will take all reasonable steps to ensure that, pursuant to paragraph 7 above, any Confidential Information obtained from the Company shall not be disclosed to the Related Parties, except as permitted under paragraph 7.
INDEMNIFICATION
1.27 The Company agrees to indemnify and hold harmless GEP, each of its Related Parties and each of its or their directors, officers, employees, agents and affiliates (each an "Indemnitee") in respect of any and all actions, claims losses, liabilities, damages, costs, charges and expenses whatsoever which any Indemnitee may suffer or incur or which may be made against any Indemnitee relating to or arising from GEP's engagement, the provision of the Services, the Acquisition or otherwise from the arrangements contemplated by this engagement letter or any acts or omissions of any Indemnitee otherwise requested by the Company or any of the Company's affiliates pursuant to or in connection therewith, provided that the Company shall not be liable under this indemnity to the extent any such action, claims, losses, liabilities, damages, costs, charges, or expenses are attributable to the gross negligence or wilful misconduct of such Indemnitee. The indemnity in this paragraph 9 is given to GEP in its own right and as trustee for each other Indemnitee.
DUE DILIGENCE AND INFORMATION
The Company shall not be responsible for any due diligence in relation to the transaction and the Company acknowledges that any advice given by GEP on the structuring of the Acquisition shall be based on information provided by the Company.
CONFLICTS
The Company acknowledges that, in addition to GEP acting as arranger under this engagement letter, other members of the GEP group of companies may have other roles in relation to the Acquisition or provide other services to the Company or its affiliates or to other persons who may have a role or participation in the Acquisition or otherwise, and the Company hereby on its own behalf and on behalf of its affiliates waives any claim against GEP in undertaking any such other roles.
LIMITED GEP ROLE
It is expressly agreed and understood that GEP is not providing nor is the Company relying on GEP for legal, accounting, tax or other advice and that the Company will rely on the advice of its own professionals and advisors as it considers appropriate for such matters and will make an independent analysis and decision regarding the Acquisition in relation to such matters based on such advice. The determination whether to accept any proposals, presentation or recommendations arising out of GEP's services under this engagement letter shall be made by the Company in its sole discretion, and the Company shall have the option, at its sole discretion, to accept, reject or modify any such proposals, presentations or recommendations rendered to it by GEP. Nothing in this engagement letter shall give rise to any liability or responsibility on the part of GEP for the success or otherwise of the Acquisition.
GEP AFFILIATES
The Company hereby acknowledges and agrees that GEP may perform the services, contemplated to be rendered by it, under this engagement letter through selected affiliates within the host country of listing. In connection therewith but at all times subject to the confidentiality obligations set out herein, GEP may share any information on matters relating to the Company with such affiliates.
MODIFICATION OF AGREEMENT
This engagement letter may be modified, amended or superseded only in writing signed by both the parties hereto and expressly referring to this engagement letter.
BROKERS
The Company represents and warrants that there have been no other brokers or agents engaged by it or by any other person on its behalf in connection with the transactions contemplated by this engagement letter, other than those specifically advised. The Company shall indemnify and hold GEP for itself and on trust for each of its Related Parties (each an "Indemnitee") harmless against the claim of any broker or agent claiming to have acted on behalf of the Company or any of its affiliates in connection with the Acquisition, and against the claim of any other party (other than a party expressly engaged by GEP) claiming to be entitled to any fees or expenses in connection with the Acquisition and against all costs, charges and expenses incurred by each Indemnitee in relation thereto.
AUTHORITY
The Company represents and warrants to GEP that its entry into and delivery of this engagement letter has been duly authorized. GEP represents and
warrants to the Company that GEP's entry into and delivery of this engagement letter has been duly authorized.
NO AGENCY
Notwithstanding the identification of GEP as arranger for the Acquisition, GEP will act under this engagement letter solely as an independent contractor. The execution of this engagement letter shall not authorize any party to act as or hold themselves to act as an agent or fiduciary, and GEP shall not be or be deemed to be an agent or fiduciary of the Company.
TAXES: PAYMENTS FREE AND CLEAR
All payments by the Company under this engagement letter shall not be subject to any counter-claim or set-off for, or be otherwise affected by, any claim or dispute relating to any matter and will be made free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges over holdings, and all liabilities with respect thereto (together "Taxes"). If the Company shall be required by law to deduct any Taxes from or in respect of any sum payable to GEP hereunder, the sum payable shall be increased as may be necessary so that after making all required deductions, GEP receives an amount equal to the sum it would have received had no such deductions been made. In addition, the Company agrees to pay any present or future stamp or sales taxes or any other excise taxes, charges or similar levies that arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to this engagement letter at the same time as payment or reimbursement of any fees, costs and expenses payable hereunder. The Company shall pay for any VAT or other form of duty or sales tax which is required to be levied thereon.
DISPUTES
Any disputes or complaints (with all relevant details) must be in writing and should be referred in the first instance to the Compliance Officer of GEP. Should the Company be dissatisfied with the handling of the dispute, the Company has the right to refer the matter to the Directors of GEP. As the Company is classified as either an Intermediate Customer or Private Expert Client and thereby an Intermediate Customer the Company waives the right to the services of any Financial Ombudsman Service (FOS) and compensation under the any regulatory regime.
ASSIGNMENT
This engagement letter shall be binding upon and inure to the benefit of the parties hereto and may not be assigned by either party, without the prior written consent of the other party.
ENTIRE AGREEMENT
This agreement supersedes any and all discussions, written or oral, between the parties hereto and sets out the entire agreement of the parties relating to the subject matter of this engagement letter.
COUNTERPARTS
This agreement may be executed in counterparts, each of which shall be deemed an original and all of which counterparts shall constitute one and the same document.
APPLICABLE LAW
The laws of the United Kingdom apply to this agreement
Please indicate the Company's acceptance of the provisions of this engagement letter by signing as indicated and in accordance with the provisions set out below:
This engagement letter is hereby executed and delivered by the parties as a Deed on the date and year of acceptance of the terms of this letter by the Company as indicated by the date of its signature below:
EXECUTED AND DELIVERED AS A DEED
By Black swan Data Ltd.
/s/ George Cadbury --------------------------------- ....................................................................... Director George Cadbury |
Date 28/7/2011
/s/ Steve King --------------------------------- ........................................................................Director Steve King |
EXECUTED AND DELIVERED AS A DEED
by Global Equity Partners
/s/ Peter Smith --------------------------------- ........................................................................Director PETER SMITH Date 29/7/2011. |
Exhibit 10.5
[LETTERHEAD OF GE PARTNERS PLC]
1 PARTIES TO THE AGREEMENT
GE Partners PLC ("GEP") domiciled in 306 Victoria House, Victoria, Mahe, Republic of Seychelles and 1 Berkeley Street, London W1J 8DJ, United Kingdom WIJ 8DJ.
Arrow Cars SL ("Company") domiciled in Malaga (Spain), Carretera de Coin, No. 39, Nava 3, Churriana
2 APPOINTMENT
2.1 GEP is hereby engaged by the Company as its corporate finance adviser in relation to the Acquisition and the Company accordingly agrees itself not to appoint and not to instruct any other person on its behalf to appoint any other person as arranger/ advisor for such purpose at any time during the Engagement Period (as defined in paragraph 5) without GEP's specific consent, such consent not to be unreasonably withheld. Further, during the Engagement Period the Company itself shall ensure that no other person on its behalf instructs any other agents, intermediaries or advisors in relation to the Acquisition without GEP's prior written approval.
2.2 The Company shall promptly inform GEP of all information, inquiries and proposals it has received before or receives at any time during the Engagement Period with respect to the Acquisition.
2.3 GEP shall inform the Company on a regular basis of any information that may come to its attention regarding the Acquisition during the Engagement Period.
3 SERVICES TO BE PROVIDED BY GEP
3.1 GEP will act as corporate finance adviser to the Company in connection with the transaction. As such, GEP will use all reasonable endeavours to provide the following advice, assistance and services:
3.2 GEP shall advise the Company on structuring and arranging the Acquisition. Additionally, as arranger, GEP shall assist in the preparation and authorisation of documentation, as required.
3.3 GEP shall use reasonable efforts through its marketing and public relations contacts to support and market the Acquisition including; (i) where appropriate, arrange meetings and assist in presentations; (ii) assist the Company, the Directors and their advisors in negotiating definitive documentation and (iii) take such other actions as are reasonably necessary to give effect to the foregoing. The Company will give GEP reasonable and
prompt co-operation and assistance to support GEP in the provision of its services hereunder and keep GEP informed of all developments relevant to the Acquisition ("the Services").
3.4 The Company acknowledges that this engagement letter does not constitute any understanding or commitment whatsoever by GEP, or any of its respective affiliates, to participate financially in any way in the Acquisition.
3.5 At the Company's option, GEP agrees to introduce to the Company professional advisers to include but not be limited to reporting accountants, auditors, lawyers and registrars, it being understood that all fees in connection with such professional advice will be borne by the Company.
3.6 At the Company's option, GEP agrees to provide assistance in the marketing of the Company's product, any such assistance to be governed by a separate agreement.
3.7 GEP shall on a best efforts basis seek to provide or make relevant introductions to provide any finance required for the listing and additional finance as agreed with the company for ongoing development pre listing. Post listing finance is by separate negotiation.
4 FEES AND EXPENSES
4.1 In consideration of GEP providing the Services, the Company will pay GEP the following fees, together with any applicable VAT thereon:
(a) 10% of the Target Company's issued share capital.
(b) $135,000 Fully Inclusive on the following terms.
$20,000 upon signing of this contract
$25,000 payable 4 weeks after signing this contract
$50,000 payable 6 weeks later
$40,000 payable 4 weeks later
In addition Arrow Cars SL will pay the relevant fees due as they become due to the appointed auditors for final conclusion of the transaction and any investor relations teams appointed after the process has been completed..
In addition, the Company shall reimburse GEP on demand for all out-of-pocket expenses incurred by GEP in providing the Services, including but not limited to travel, accommodation and professional advisors fees, subject to the presentation of invoices to the Company, together with any
taxes thereon. All such expenses in excess of (euro)1,000 (One Thousand Euros) will be subject to the prior written consent of the Company, such consent not to be unreasonably withheld. A representative will travel to the USA during the course of the contract on behalf of Arrow Cars SL. Any additional trips as requested by Arrow Cars SL is expected to cost 5,000 Euros fully inclusive, That cost is to be reimbursed by the company should that situation arise.
4.2 In the event that GEP provides the Services hereunder and such Acquisition thereafter does not proceed owing to a material or adverse change in the structure of the Company or to any failure on the part of the Company to close on such Acquisition, the Company shall be required to pay to GEP a cancellation fee of $50,000 (Fifty Thousand Dollars).
4.3 All fees as referred to in this paragraph 4 shall be paid in USD$ or an alternative currency using the days prevailing interbank exchange rate. All out of pocket expenses to be reimbursed to GEP shall be reimbursed in the currency in which they were incurred.
5 ENGAGEMENT PERIOD AND TERMINATION
5.1 GEP's engagement hereunder shall become effective on the date the Company executes and delivers this engagement letter to GEP and shall remain in effect until termination in accordance with the following provisions of this paragraph 5 ("the Engagement Period").
(a) Termination of this agreement shall occur on the following events/circumstances:
GEP shall be entitled to terminate:
i) in the event there has been a material breach of the terms of the
engagement letter by the Company;
ii) otherwise, subject to the minimum term established in clause 4.1
(c), above, at any time as GEP so wishes on giving 30 (thirty)
days written notice to the Company.
(b) The Company shall be entitled to terminate:
i) in the event there has been a material breach of the terms of the
engagement letter by the Company;
ii) otherwise, subject to the minimum term established in clause 5.1
(a), above, and to giving 30 (thirty) days written notice to GEP,
in the event that the Company in its discretion no longer wishes
to proceed with the Acquisition, in which event the cancellation
fee specified in clause 4.3 hereof will become immediately
payable.
(c) At any time but without prejudice to the foregoing as specifically agreed between the parties in writing.
5.2 Upon termination of this engagement letter, neither party shall have any continuing liability or obligation to the other.
6 INFORMATION AND CO-OPERATION
6.1 In connection with GEP's engagement hereunder, the Company shall provide GEP with such information and documents as GEP may consider necessary or desirable in order to enable it to provide the Services and to carry out its duties and responsibilities hereunder. In particular, and without prejudice to the generality of the foregoing, the Company will promptly furnish GEP with such information as GEP may request in order to permit GEP to assist the Company in preparing any material required for the Acquisition (collectively, the "Acquisition Documents").
6.2 The Company will be solely responsible for the contents of any Acquisition Documents and the Company represents and warrants to GEP that the Acquisition Documents will, as of the date of any marketing, distribution of the Acquisition Documents or completion, or preparation of the Acquisition, be true and accurate in all material respects, not omit any material fact and not be misleading in any respect and, with respect to any financial projections, the Company represents that they have been, or will be, prepared in good faith on the basis of reasonable assumptions. The Company agrees to advise GEP promptly of the occurrence of any event or any other change known to the Company which results in any of the Acquisition Documents containing any untrue statement of a material fact or omitting to state a material fact the omission of which would render any statements contained therein, in light of the circumstances under which they were made, misleading and in such event the Company shall provide corrective information to GEP suitable for inclusion in a supplemental information statement. For purposes of this paragraph notification by the Company must be made directly to GEP and GEP shall not be deemed notified solely as a result of action, notice or the constructive knowledge of any of its Related Parties.
6.3 The Company acknowledges that GEP (i) will use and rely upon the information provided by the Company or on its behalf which will comprise the Acquisition Documents absolutely and without GEP itself independently verifying any of the same, (ii) does not itself assume any responsibility for the accuracy of completeness of the Acquisition Documents.
6.4 The Company hereby authorises GEP to provide the Acquisition Documents on its behalf to those concerned with the Acquisition. GEP shall each have the right to review and be required to approve all Acquisition Documents and every form of letter, circular, notice, memorandum or other written communication from the Company or any person acting on its behalf in connection with the Acquisition and the persons to whom any of the foregoing are to be directed, such approval not to be unreasonably withheld.
6.5 The Company shall at all times use its efforts to assist GEP in providing the Services and in carrying out its duties, functions and responsibilities hereunder and shall co-operate and use all reasonable efforts to assist GEP in complying with the applicable laws of any jurisdiction in which GEP operating.
7 CONFIDENTIALITY
7.1 GEP acknowledges that, in performing its duties from time to time hereunder, it shall receive from the Company certain information relating to the Company, the Acquisition and otherwise to the transactions contemplated by this engagement letter. For purposes of this paragraph, all such information, except for information which (i) is comprised in Acquisition Documents as approved by the Company (ii) GEP is otherwise authorised by the Company to disclose to third parties otherwise than on a confidential basis, (iii) is or becomes generally available to the public other than as a result of a disclosure by GEP where such disclosure is not permitted, or (iv) is or becomes available to GEP on a non-confidential basis from a person or entity other than the Company, is hereinafter referred to as "Confidential Information".
7.2 GEP shall keep the Confidential Information confidential and not without the Company's prior consent, except as required by law, legal process, or regulatory authority, (i) disclose or reveal any Confidential Information to any person, firm or entity other than those employees, agents or advisors of GEP who are actively and directly participating in the transactions contemplated by this engagement letter or who otherwise need to know the Confidential Information for the purpose of evaluating, structuring or reviewing any portion of the Acquisition or GEP's role with respect thereto, or (ii) use Confidential Information for any purpose other than in connection with the transactions contemplated by this engagement letter.
7.3 If GEP's engagement is terminated at any time, GEP shall continue to maintain the Confidential Information in confidence in accordance with the terms of this engagement letter and, upon the written request of the Company, such Confidential Information and all copies thereof as are held by GEP, will be returned to the Company, or destroyed by GEP, provided, however, that GEP may retain one copy of the Confidential Information in the files of its general counsel for compliance purposes or for the purpose of defending or maintaining any litigation relating to this engagement letter.
7.4 If GEP should decide that any such Confidential Information should be included in the Acquisition Documents, and the Company withholds its consent to such disclosure or refrains from co-operating fully in such disclosure, GEP may immediately terminate the Services and the Company shall immediately reimburse all GEP's fees and expenses due under clause 4 herein., as provided in paragraph 4.3 together with all fees, if any, due under paragraph 4.2.
7.5 The Company agrees that this engagement letter (including the fact of its existence and its terms and conditions), and the services it describes, together with any related information or documents, constitute confidential and propriety information of GEP. The Company further agrees that its written and verbal reports to the Company and all writings prepared by or on behalf of GEP and furnished to the Company in connection with GEP's engagement hereunder (collectively the "GEP Information") shall be kept confidential and the Company shall not without GEP's prior written consent, except as required by law, legal process or a regulatory authority, (i) disclose or reveal any GEP Information to any person, firm or entity other than those employees, agents or advisors of the Company who are actively and directly participating in the transactions contemplated by this engagement letter or otherwise needed to know the GEP Information for the purpose of evaluating, structuring or reviewing any portion of the Acquisition or the Company's participation with respect thereto, or (ii) use the GEP Information for any purpose other than in connection with the transactions contemplated by this engagement letter.
8 RELATED PARTIES
GEP acknowledges that it will take all reasonable steps to ensure that, pursuant to paragraph 7 above, any Confidential Information obtained from the Company shall not be disclosed to the Related Parties, except as permitted under paragraph 7.
9 INDEMNIFICATION
9.1 The Company agrees to indemnify and hold harmless GEP, each of its Related Parties and each of its or their directors, officers, employees, agents and affiliates (each an "Indemnitee") in respect of any and all actions, claims
losses, liabilities, damages, costs, charges and expenses whatsoever which any Indemnitee may suffer or incur or which may be made against any Indemnitee relating to or arising from GEP's engagement, the provision of the Services, the Acquisition or otherwise from the arrangements contemplated by this engagement letter or any acts or omissions of any Indemnitee otherwise requested by the Company or any of the Company's affiliates pursuant to or in connection therewith, provided that the Company shall not be liable under this indemnity to the extent any such action, claims, losses, liabilities, damages, costs, charges, or expenses are attributable to the gross negligence or wilful misconduct of such Indemnitee. The indemnity in this paragraph 9 is given to GEP in its own right and as trustee for each other Indemnitee.
10 DUE DILIGENCE AND INFORMATION
The Company shall not be responsible for any due diligence in relation to the transaction and the Company acknowledges that any advice given by GEP on the structuring of the Acquisition shall be based on information provided by the Company.
11 CONFLICTS
The Company acknowledges that, in addition to GEP acting as arranger under this engagement letter, other members of the GEP group of companies may have other roles in relation to the Acquisition or provide other services to the Company or its affiliates or to other persons who may have a role or participation in the Acquisition or otherwise, and the Company hereby on its own behalf and on behalf of its affiliates waives any claim against GEP in undertaking any such other roles.
12 LIMITED GEP ROLE
It is expressly agreed and understood that GEP is not providing nor is the Company relying on GEP for legal, accounting, tax or other advice and that the Company will rely on the advice of its own professionals and advisors as it considers appropriate for such matters and will make an independent analysis and decision regarding the Acquisition in relation to such matters based on such advice. The determination whether to accept any proposals, presentation or recommendations arising out of GEP's services under this engagement letter shall be made by the Company in its sole discretion, and the Company shall have the option, at its sole discretion, to accept, reject or modify any such proposals, presentations or recommendations rendered to it by GEP. Nothing in this engagement letter shall give rise to any liability or responsibility on the part of GEP for the success or otherwise of the Acquisition.
13 GEP AFFILIATES
The Company hereby acknowledges and agrees that GEP may perform the services, contemplated to be rendered by it, under this engagement letter through selected affiliates within the host country of listing. In connection therewith but at all times subject to the confidentiality obligations set out herein, GEP may share any information on matters relating to the Company with such affiliates.
14 MODIFICATION OF AGREEMENT
This engagement letter may be modified, amended or superseded only in writing signed by both the parties hereto and expressly referring to this engagement letter.
15 BROKERS
The Company represents and warrants that there have been no other brokers or agents engaged by it or by any other person on its behalf in connection with the transactions contemplated by this engagement letter, other than those specifically advised. The Company shall indemnify and hold GEP for itself and on trust for each of its Related Parties (each an "Indemnitee") harmless against the claim of any broker or agent claiming to have acted on behalf of the Company or any of its affiliates in connection with the Acquisition, and against the claim of any other party (other than a party expressly engaged by GEP) claiming to be entitled to any fees or expenses in connection with the Acquisition and against all costs, charges and expenses incurred by each Indemnitee in relation thereto.
16 AUTHORITY
The Company represents and warrants to GEP that its entry into and delivery of this engagement letter has been duly authorized. GEP represents and warrants to the Company that GEP's entry into and delivery of this engagement letter has been duly authorized.
17 NO AGENCY
Notwithstanding the identification of GEP as arranger for the Acquisition, GEP will act under this engagement letter solely as an independent contractor. The execution of this engagement letter shall not authorize any party to act as or hold themselves to act as an agent or fiduciary, and GEP shall not be or be deemed to be an agent or fiduciary of the Company.
18 TAXES: PAYMENTS FREE AND CLEAR
All payments by the Company under this engagement letter shall not be subject to any counter-claim or set-off for, or be otherwise affected by, any claim or dispute relating to any matter and will be made free and clear
of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges over holdings, and all liabilities with respect thereto (together "Taxes"). If the Company shall be required by law to deduct any Taxes from or in respect of any sum payable to GEP hereunder, the sum payable shall be increased as may be necessary so that after making all required deductions, GEP receives an amount equal to the sum it would have received had no such deductions been made. In addition, the Company agrees to pay any present or future stamp or sales taxes or any other excise taxes, charges or similar levies that arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to this engagement letter at the same time as payment or reimbursement of any fees, costs and expenses payable hereunder. The Company shall pay for any VAT or other form of duty or sales tax which is required to be levied thereon.
19 DISPUTES
Any disputes or complaints (with all relevant details) must be in writing and should be referred in the first instance to the Compliance Officer of GEP. Should the Company be dissatisfied with the handling of the dispute, the Company has the right to refer the matter to the Directors of GEP. As the Company is classified as either an Intermediate Customer or Private Expert Client and thereby an Intermediate Customer the Company waives the right to the services of any Financial Ombudsman Service (FOS) and compensation under the any regulatory regime.
20 ASSIGNMENT
This engagement letter shall be binding upon and inure to the benefit of the parties hereto and may not be assigned by either party, without the prior written consent of the other party.
21 ENTIRE AGREEMENT
This agreement supersedes any and all discussions, written or oral, between the parties hereto and sets out the entire agreement of the parties relating to the subject matter of this engagement letter.
22 COUNTERPARTS
This agreement may be executed in counterparts, each of which shall be deemed an original and all of which counterparts shall constitute one and the same document.
23 APPLICABLE LAW
The laws of Nevada and the Republic of the Seychelles apply to this agreement.
Please indicate the Company's acceptance of the provisions of this engagement letter by signing as indicated and in accordance with the provisions set out below:
This engagement letter is hereby executed and delivered by the parties as a Deed on the date and year of acceptance of the terms of this letter by the Company as indicated by the date of its signature below:
EXECUTED AND DELIVERED AS A DEED
By Arrow Cars SL
/s/ Jeremy Dean Harris --------------------------------- ....................................................................... Director |
Date 14/01/2011
EXECUTED AND DELIVERED AS A DEED
by Global Equity Partners
/s/ Peter Smith --------------------------------- ....................................................................... Director PETER SMITH Date 14/01/2011. |
Exhibit 10.6
[LETTERHEAD OF GE PARTNERS PLC]
Exhibit 10.6
1 Parties to the Agreement
1.1 GE Partners PLC ("GEP") domiciled in 306 Victoria House, Victoria, Mahe, Republic of Seychelles and 1 Berkeley Street, London W1J 8DJ, United Kingdom WIJ 8DJ.
1.2 RFC K.K. ("Company") 7ty Floor, AsHeitz Building, Tomigaya, 1-10-2, Shibuya-ku, Tokyo, Japan 151-0063
2. Appointment
2.1 GEP is hereby engaged by the Company as its corporate finance adviser in relation to the acquisition of the Company on a matched share basis by an American Corporation resulting in a reverse merger ("Acquisition") and the Company accordingly agrees itself not to appoint and not to instruct any other person on its behalf to appoint any other person as arranger/ advisor for such purpose at any time during the Engagement Period (as defined in paragraph 5) without GEP's specific consent, such consent not to be unreasonably withheld. Further, during the Engagement Period the Company itself shall ensure that no other person on its behalf instructs any other agents, intermediaries or advisors in relation to the Acquisition without GEP's prior written approval.
2.2 The Company shall promptly inform GEP of all information, inquiries and proposals it has received before or receives at any time during the Engagement Period with respect to the Acquisition.
2.3 GEP shall inform the Company on a regular basis of any information that may come to its attention regarding the Acquisition during the Engagement Period.
3. Services to be provided by GEP
3.1 GEP will act as corporate finance adviser to the Company in connection with the transaction. As such, GEP will use all reasonable endeavours to provide the following advice, assistance and services:
3.2 GEP shall advise the Company on structuring and arranging the Acquisition. Additionally, as arranger, GEP shall assist in the preparation and authorisation of documentation, as required.
3.3 GEP shall use reasonable efforts through its marketing and public relations contacts to support and market the Acquisition including; (i) where appropriate, arrange meetings and assist in presentations; (ii) assist the Company, the
Directors and their advisors in negotiating definitive documentation and (iii) take such other actions as are reasonably necessary to give effect to the foregoing. The Company will give GEP reasonable and prompt co-operation and assistance to support GEP in the provision of its services hereunder and keep GEP informed of all developments relevant to the Acquisition ("the Services").
3.4 The Company acknowledges that this engagement letter does not constitute any understanding or commitment whatsoever by GEP, or any of its respective affiliates, to participate financially in any way in the Acquisition.
3.5 At the Company's option, GEP agrees to introduce to the Company professional advisers to include but not be limited to reporting accountants, auditors, lawyers and registrars, it being understood that all fees in connection with such professional advice will be borne by the Company.
3.6 At the Company's option, GEP agrees to provide assistance in the marketing of the Company's product, any such assistance to be governed by a separate agreement.
3.7 GEP shall on a best efforts basis seek to provide or make relevant introductions to provide:
* Any finance required for the listing and additional finance as agreed
with the company for
* Ongoing development pre listing. Post listing finance is by separate
negotiation.
4. Fees and Expenses
4.1 In consideration of GEP providing the Services, the Company will pay GEP the following fees, together with any applicable VAT thereon:
(a) 10% of the Target Company's issued share capital.
(b) $20,000 per month for 12 months (fully inclusive)
(c) $6,000 per month consultancy contract for months 13 to 24 inclusive.
In addition RFC K.K. will pay the relevant fees due as they become due to the accountants and auditors.
In addition, the Company shall reimburse GEP on demand for all out-of-pocket expenses incurred by GEP in providing the Services, including but not limited to travel, accommodation and professional advisors fees, subject to the presentation of invoices to the Company, together with any
taxes thereon. All such expenses in excess of (euro)1,000 (One Thousand Euros) will be subject to the prior written consent of the Company, such consent not to be unreasonably withheld.
4.2 In the event that GEP provides the Services hereunder and such Acquisition thereafter does not proceed owing to a material or adverse change in the structure of the Company or to any failure on the part of the Company to close on such Acquisition, the Company shall be required to pay to GEP a cancellation fee of $50,000 (One Hundred Thousand Dollars).
4.3 All fees as referred to in this paragraph 4 shall be paid in USD$ or an alternative currency using the days prevailing interbank exchange rate. All out of pocket expenses to be reimbursed to GEP shall be reimbursed in the currency in which they were incurred.
5. Engagement Period and Termination
5.1 GEP's engagement hereunder shall become effective on the date the Company
executes and delivers this engagement letter to GEP and shall remain in effect
until termination in accordance with the following provisions of this paragraph
5 ("the Engagement Period").
(a) Termination of this agreement shall occur on the following events/circumstances:
On the date 30 (thirty) days following execution by the Parties of the present agreement, provided at least 30 (thirty) days prior to such date, at least one of the Parties has served notice in writing on the other that it wishes the engagement to terminate on such date. Where no such notice is served by either party as aforesaid, the engagement shall remain in effect for another 30 days from such date, under the same terms and conditions as set out in this engagement letter;
GEP shall be entitled to terminate:
i) in the event there has been a material breach of the terms of the
engagement letter by the Company;
ii) otherwise, subject to the minimum term established in clause 5.1 (a),
above, at any time as GEP so wishes on giving 30 (thirty) days written
notice to the Company.
(b) The Company shall be entitled to terminate:
iii) in the event there has been a material breach of the terms of the
engagement letter by the Company;
iv) otherwise, subject to the minimum term established in clause 5.1 (a),
above, and to giving 30 (thirty) days written notice to GEP, in the
event that the Company in its discretion no longer wishes to proceed
with the Acquisition, in which event the cancellation fee specified in
clause 4.2 hereof will become immediately payable.
(b) At any time but without prejudice to the foregoing as specifically agreed between the parties in writing.
5.2 Upon termination of this engagement letter, neither party shall have any continuing liability or obligation to the other.
6. Information and Co-operation
6.1 In connection with GEP's engagement hereunder, the Company shall provide GEP with such information and documents as GEP may consider necessary or desirable in order to enable it to provide the Services and to carry out its duties and responsibilities hereunder. In particular, and without prejudice to the generality of the foregoing, the Company will promptly furnish GEP with such information as GEP may request in order to permit GEP to assist the Company in preparing any material required for the Acquisition (collectively, the "Acquisition Documents").
6.2 The Company will be solely responsible for the contents of any Acquisition Documents and the Company represents and warrants to GEP that the Acquisition Documents will, as of the date of any marketing, distribution of the Acquisition Documents or completion, or preparation of the Acquisition, be true and accurate in all material respects, not omit any material fact and not be misleading in any respect and, with respect to any financial projections, the Company represents that they have been, or will be, prepared in good faith on the basis of reasonable assumptions. The Company agrees to advise GEP promptly of the occurrence of any event or any other change known to the Company which results in any of the Acquisition Documents containing any untrue statement of a material fact or omitting to state a material fact the omission of which would render any statements contained therein, in light of the circumstances under which they were made, misleading and in such event the Company shall provide corrective information to GEP suitable for inclusion in a supplemental information statement. For purposes of this paragraph notification by the Company must be made directly to GEP and GEP shall not be deemed notified solely as a result of action, notice or the constructive knowledge of any of its Related Parties.
6.3 The Company acknowledges that GEP (i) will use and rely upon the information provided by the Company or on its behalf which will comprise the Acquisition Documents absolutely and without GEP itself independently verifying any of the same, (ii) does not itself assume any responsibility for the accuracy of completeness of the Acquisition Documents.
6.4 The Company hereby authorises GEP to provide the Acquisition Documents on its behalf to those concerned with the Acquisition. GEP shall each have the right to review and be required to approve all Acquisition Documents and every form of letter, circular, notice, memorandum or other written communication from the Company or any person acting on its behalf in connection with the Acquisition and the persons to whom any of the foregoing are to be directed, such approval not to be unreasonably withheld.
6.5 The Company shall at all times use its efforts to assist GEP in providing the Services and in carrying out its duties, functions and responsibilities hereunder and shall co-operate and use all reasonable efforts to assist GEP in complying with the applicable laws of any jurisdiction in which GEP operating.
7. Confidentiality
7.1 GEP acknowledges that, in performing its duties from time to time hereunder, it shall receive from the Company certain information relating to the Company, the Acquisition and otherwise to the transactions contemplated by this engagement letter. For purposes of this paragraph, all such information, except for information which (i) is comprised in Acquisition Documents as approved by the Company (ii) GEP is otherwise authorised by the Company to disclose to third parties otherwise than on a confidential basis, (iii) is or becomes generally available to the public other than as a result of a disclosure by GEP where such disclosure is not permitted, or (iv) is or becomes available to GEP on a non-confidential basis from a person or entity other than the Company, is hereinafter referred to as "Confidential Information".
7.2 GEP shall keep the Confidential Information confidential and not without the Company's prior consent, except as required by law, legal process, or regulatory authority, (i) disclose or reveal any Confidential Information to any person, firm or entity other than those employees, agents or advisors of GEP who are actively and directly participating in the transactions contemplated by this engagement letter or who otherwise need to know the Confidential Information for the purpose of evaluating, structuring or reviewing any portion of the Acquisition or GEP's role with respect thereto, or (ii) use Confidential Information for any purpose other than in connection with the transactions contemplated by this engagement letter.
7.3 If GEP's engagement is terminated at any time, GEP shall continue to maintain the Confidential Information in confidence in accordance with the terms of this engagement letter and, upon the written request of the Company, such Confidential Information and all copies thereof as are held by GEP, will be returned to the Company, or destroyed by GEP, provided, however, that GEP may retain one copy of the Confidential Information in the files of its general counsel for compliance purposes or for the purpose of defending or maintaining any litigation relating to this engagement letter.
7.4 If GEP should decide that any such Confidential Information should be included in the Acquisition Documents, and the Company withholds its consent to such disclosure or refrains from co-operating fully in such disclosure, GEP may immediately terminate the Services and the Company shall immediately reimburse all GEP's fees and expenses due under clause 4 herein., as provided in paragraph 4.3 together with all fees, if any, due under paragraph 4.2.
7.5 The Company agrees that this engagement letter (including the fact of its existence and its terms and conditions), and the services it describes, together with any related information or documents, constitute confidential and propriety information of GEP. The Company further agrees that its written and verbal reports to the Company and all writings prepared by or on behalf of GEP and furnished to the Company in connection with GEP's engagement hereunder (collectively the "GEP Information") shall be kept confidential and the Company shall not without GEP's prior written consent, except as required by law, legal process or a regulatory authority, (i) disclose or reveal any GEP Information to any person, firm or entity other than those employees, agents or advisors of the Company who are actively and directly participating in the transactions contemplated by this engagement letter or otherwise needed to know the GEP Information for the purpose of evaluating, structuring or reviewing any portion of the Acquisition or the Company's participation with respect thereto, or (ii) use the GEP Information for any purpose other than in connection with the transactions contemplated by this engagement letter.
8. Related Parties
GEP acknowledges that it will take all reasonable steps to ensure that, pursuant to paragraph 7 above, any Confidential Information obtained from the Company shall not be disclosed to the Related Parties, except as permitted under paragraph 7.
9. Indemnification
9.1 The Company agrees to indemnify and hold harmless GEP, each of its Related Parties and each of its or their directors, officers, employees, agents and affiliates (each an "Indemnitee") in respect of any and all actions, claims losses, liabilities, damages, costs, charges and expenses whatsoever which any
Indemnitee may suffer or incur or which may be made against any Indemnitee relating to or arising from GEP's engagement, the provision of the Services, the Acquisition or otherwise from the arrangements contemplated by this engagement letter or any acts or omissions of any Indemnitee otherwise requested by the Company or any of the Company's affiliates pursuant to or in connection therewith, provided that the Company shall not be liable under this indemnity to the extent any such action, claims, losses, liabilities, damages, costs, charges, or expenses are attributable to the gross negligence or wilful misconduct of such Indemnitee. The indemnity in this paragraph 9 is given to GEP in its own right and as trustee for each other Indemnitee.
10. Due Diligence and Information
The Company shall not be responsible for any due diligence in relation to the transaction and the Company acknowledges that any advice given by GEP on the structuring of the Acquisition shall be based on information provided by the Company.
11. Limited GEP Role
It is expressly agreed and understood that GEP is not providing nor is the Company relying on GEP for legal, accounting, tax or other advice and that the Company will rely on the advice of its own professionals and advisors as it considers appropriate for such matters and will make an independent analysis and decision regarding the Acquisition in relation to such matters based on such advice. The determination whether to accept any proposals, presentation or recommendations arising out of GEP's services under this engagement letter shall be made by the Company in its sole discretion, and the Company shall have the option, at its sole discretion, to accept, reject or modify any such proposals, presentations or recommendations rendered to it by GEP. Nothing in this engagement letter shall give rise to any liability or responsibility on the part of GEP for the success or otherwise of the Acquisition.
12. GEP Affiliates
The Company hereby acknowledges and agrees that GEP may perform the services, contemplated to be rendered by it, under this engagement letter through selected affiliates within the host country of listing. In connection therewith but at all times subject to the confidentiality obligations set out herein, GEP may share any information on matters relating to the Company with such affiliates.
13. Modification of Agreement
This engagement letter may be modified, amended or superseded only in writing signed by both the parties hereto and expressly referring to this engagement letter.
14. Authority
The Company represents and warrants to GEP that its entry into and delivery of this engagement letter has been duly authorized. GEP represents and warrants to the Company that GEP's entry into and delivery of this engagement letter has been duly authorized.
15. No Agency
Notwithstanding the identification of GEP as arranger for the Acquisition, GEP will act under this engagement letter solely as an independent contractor. The execution of this engagement letter shall not authorize any party to act as or hold themselves to act as an agent or fiduciary, and GEP shall not be or be deemed to be an agent or fiduciary of the Company.
16. Disputes
Any disputes or complaints (with all relevant details) must be in writing and should be referred in the first instance to the Compliance Officer of GEP. Should the Company be dissatisfied with the handling of the dispute, the Company has the right to refer the matter to the Directors of GEP. As the Company is classified as either an Intermediate Customer or Private Expert Client and thereby an Intermediate Customer the Company waives the right to the services of any Financial Ombudsman Service (FOS) and compensation under the any regulatory regime.
17. Assignment
This engagement letter shall be binding upon and inure to the benefit of the parties hereto and may not be assigned by either party, without the prior written consent of the other party.
18. Entire Agreement
This agreement supersedes any and all discussions, written or oral, between the parties hereto and sets out the entire agreement of the parties relating to the subject matter of this engagement letter.
19. Counterparts
This agreement may be executed in counterparts, each of which shall be deemed an original and all of which counterparts shall constitute one and the same document.
20. Applicable Law
The laws of the United Kingdom apply to this agreement
Please indicate the Company's acceptance of the provisions of this engagement letter by signing as indicated and in accordance with the provisions set out below:
This engagement letter is hereby executed and delivered by the parties as a Deed on the date and year of acceptance of the terms of this letter by the Company as indicated by the date of its signature below:
EXECUTED AND DELIVERED AS A DEED
By RFC K.K.
/s/ James Fiorillo ---------------------------------- Director |
James Fiorillo
Print Name
Date 19/10/2011
EXECUTED AND DELIVERED AS A DEED
by Global Equity Partners
/s/ Peter Smith ---------------------------------- Director PETER SMITH |
Date 19/10/2011.
Exhibit 10.7
[LETTERHEAD OF GE PARTNERS PLC]
1 PARTIES TO THE AGREEMENT
1.1 GE Partners Plc ("GEP") domiciled in 306 Victoria House, Victoria, Mahe, Republic of Seychelles and 1 Berkeley Street, London W1J 8DJ, United Kingdom.
1.2 M1 Luxembourg AG ("the Company") domiciled at Chamerstrasse 44, 6331 Hunenberg, Switzerland.
2 APPOINTMENT
2.1 GEP is hereby engaged by the Company as its corporate finance adviser in relation to the Acquisition and the Company accordingly agrees itself not to appoint and not to instruct any other person on its behalf to appoint any other person as arranger/ advisor for such purpose at any time during the Engagement Period (as defined in paragraph 5) without GEP's specific consent, such consent not to be unreasonably withheld. Further, during the Engagement Period the Company itself shall ensure that no other person on its behalf instructs any other agents, intermediaries or advisors in relation to the Acquisition without GEP's prior written approval.
2.2 The Company shall promptly inform GEP of all information, inquiries and proposals it has received before or receives at any time during the Engagement Period with respect to the Acquisition.
2.3 GEP shall inform the Company on a regular basis of any information that may come to its attention regarding the Acquisition during the Engagement Period.
3 SERVICES TO BE PROVIDED BY GEP
3.1 GEP will act as corporate finance adviser to the Company in connection with the transaction. As such, GEP will use all reasonable endeavours to provide the following advice, assistance and services:
3.2 GEP shall advise the Company on structuring and arranging the Acquisition. Additionally, as arranger, GEP shall assist in the preparation and authorisation of documentation, as required.
3.3 GEP shall use reasonable efforts through its marketing and public relations contacts to support and market the Acquisition including; (i) where appropriate, arrange meetings and assist in presentations; (ii) assist the Company, the Directors and their advisors in negotiating definitive documentation and (iii) take such other actions as are reasonably necessary to give effect to the foregoing. The Company will give GEP reasonable and prompt co-operation and assistance to support GEP in the provision of its
services hereunder and keep GEP informed of all developments relevant to the Acquisition ("the Services").
3.4 The Company acknowledges that this engagement letter does not constitute any understanding or commitment whatsoever by GEP, or any of its respective affiliates, to participate financially in any way in the Acquisition.
3.5 At the Company's option, GEP agrees to introduce to the Company professional advisers to include but not be limited to reporting accountants, auditors, lawyers and registrars, it being understood that all fees in connection with such professional advice will be borne by the Company.
3.6 At the Company's option, GEP agrees to provide assistance in the marketing of the Company's product, any such assistance to be governed by a separate agreement.
3.7 GEP shall on a best efforts basis seek to provide or make relevant introductions to provide:
* Any finance required for the listing and additional finance as agreed
with the company for
* Ongoing development pre listing. Post listing finance is by separate
negotiation.
4 FEES AND EXPENSES
4.1 In consideration of GEP providing the Services, the Company will pay GEP the following fees, together with any applicable VAT thereon:
(a) 10% of the Target Company's issued share capital.
(b) $200,000 consultancy fee.
In addition M1 Luxembourg AG will pay the relevant fees due as they become due to the accountants and auditors.
In addition, the Company shall reimburse GEP on demand for all out-of-pocket expenses incurred by GEP in providing the Services, including but not limited to travel, accommodation and professional advisors fees, subject to the presentation of invoices to the Company, together with any taxes thereon. All such expenses in excess of (euro)1,000 (One Thousand Euros) will be subject to the prior written consent of the Company, such consent not to be unreasonably withheld. A representative will travel to
the USA no more than twice during the course of the contract on behalf of M1 Luxembourg AG. Each trip is expected to cost $5000. That cost is to be reimbursed by the company.
4.2 In the event that GEP provides the Services hereunder and such Acquisition thereafter does not proceed owing to a material or adverse change in the structure of the Company or to any failure on the part of the Company to close on such Acquisition, the Company shall be required to pay to GEP a cancellation fee of $50,000 (Fifty Thousand Dollars).
4.3 All fees as referred to in this paragraph 4 shall be paid in USD$ or an alternative currency using the days prevailing interbank exchange rate. All out of pocket expenses to be reimbursed to GEP shall be reimbursed in the currency in which they were incurred.
5 ENGAGEMENT PERIOD AND TERMINATION
5.1 GEP's engagement hereunder shall become effective on the date the Company executes and delivers this engagement letter to GEP and shall remain in effect until termination in accordance with the following provisions of this paragraph 5 ("the Engagement Period").
(a) Termination of this agreement shall occur on the following
events/circumstances:
on the date 90 (ninety) days following execution by the parties of the
present agreement, provided at least 30 (thirty) days prior to such
date, at least one of the parties has served notice in writing on the
other that it wishes the engagement to terminate on such date. Where
no such notice is served by either party as aforesaid, the engagement
shall remain in effect for another 90 days from such date, under the
same terms and conditions as set out in this engagement letter;
GEP shall be entitled to terminate:
i) In the event there has been a material breach of the terms of the
engagement letter by the Company;
ii) Otherwise, subject to the minimum term established in clause 5.1
(a), above, at any time as GEP so wishes on giving 30 (thirty)
days written notice to the Company.
The Company shall be entitled to terminate:
iii) in the event there has been a material breach of the terms of the
engagement letter by the Company;
iv) otherwise, subject to the minimum term established in clause 5.1
(a), above, and to giving 30 (thirty) days written notice to GEP,
in the event that the Company in its discretion no longer wishes
to proceed with the Acquisition, in which event the cancellation
fee specified in clause 4.3 hereof will become immediately
payable.
(b) At any time but without prejudice to the foregoing as specifically agreed between the parties in writing.
5.2 Upon termination of this engagement letter, neither party shall have any continuing liability or obligation to the other.
6 INFORMATION AND CO-OPERATION
6.1 In connection with GEP's engagement hereunder, the Company shall provide GEP with such information and documents as GEP may consider necessary or desirable in order to enable it to provide the Services and to carry out its duties and responsibilities hereunder. In particular, and without prejudice to the generality of the foregoing, the Company will promptly furnish GEP with such information as GEP may request in order to permit GEP to assist the Company in preparing any material required for the Acquisition (collectively, the "Acquisition Documents").
6.2 The Company will be solely responsible for the contents of any Acquisition Documents and the Company represents and warrants to GEP that the Acquisition Documents will, as of the date of any marketing, distribution of the Acquisition Documents or completion, or preparation of the Acquisition, be true and accurate in all material respects, not omit any material fact and not be misleading in any respect and, with respect to any financial projections, the Company represents that they have been, or will be, prepared in good faith on the basis of reasonable assumptions. The Company agrees to advise GEP promptly of the occurrence of any event or any other change known to the Company which results in any of the Acquisition Documents containing any untrue statement of a material fact or omitting to state a material fact the omission of which would render any statements contained therein, in light of the circumstances under which they were made, misleading and in such event the Company shall provide corrective information to GEP suitable for inclusion in a supplemental information
statement. For purposes of this paragraph notification by the Company must be made directly to GEP and GEP shall not be deemed notified solely as a result of action, notice or the constructive knowledge of any of its Related Parties.
6.3 The Company acknowledges that GEP (i) will use and rely upon the information provided by the Company or on its behalf which will comprise the Acquisition Documents absolutely and without GEP itself independently verifying any of the same, (ii) does not itself assume any responsibility for the accuracy of completeness of the Acquisition Documents.
6.4 The Company hereby authorises GEP to provide the Acquisition Documents on its behalf to those concerned with the Acquisition. GEP shall each have the right to review and be required to approve all Acquisition Documents and every form of letter, circular, notice, memorandum or other written communication from the Company or any person acting on its behalf in connection with the Acquisition and the persons to whom any of the foregoing are to be directed, such approval not to be unreasonably withheld.
6.5 The Company shall at all times use its efforts to assist GEP in providing the Services and in carrying out its duties, functions and responsibilities hereunder and shall co-operate and use all reasonable efforts to assist GEP in complying with the applicable laws of any jurisdiction in which GEP operating.
7 CONFIDENTIALITY
7.1 GEP acknowledges that, in performing its duties from time to time hereunder, it shall receive from the Company certain information relating to the Company, the Acquisition and otherwise to the transactions contemplated by this engagement letter. For purposes of this paragraph, all such information, except for information which (i) is comprised in Acquisition Documents as approved by the Company (ii) GEP is otherwise authorised by the Company to disclose to third parties otherwise than on a confidential basis, (iii) is or becomes generally available to the public other than as a result of a disclosure by GEP where such disclosure is not permitted, or (iv) is or becomes available to GEP on a non-confidential basis from a person or entity other than the Company, is hereinafter referred to as "Confidential Information".
7.2 GEP shall keep the Confidential Information confidential and not without the Company's prior consent, except as required by law, legal process, or regulatory authority, (i) disclose or reveal any Confidential Information to any person, firm or entity other than those employees, agents or advisors of GEP who are actively and directly participating in the transactions contemplated by this engagement letter or who otherwise need
to know the Confidential Information for the purpose of evaluating, structuring or reviewing any portion of the Acquisition or GEP's role with respect thereto, or (ii) use Confidential Information for any purpose other than in connection with the transactions contemplated by this engagement letter.
7.3 If GEP's engagement is terminated at any time, GEP shall continue to maintain the Confidential Information in confidence in accordance with the terms of this engagement letter and, upon the written request of the Company, such Confidential Information and all copies thereof as are held by GEP, will be returned to the Company, or destroyed by GEP, provided, however, that GEP may retain one copy of the Confidential Information in the files of its general counsel for compliance purposes or for the purpose of defending or maintaining any litigation relating to this engagement letter.
7.4 If GEP should decide that any such Confidential Information should be included in the Acquisition Documents, and the Company withholds its consent to such disclosure or refrains from co-operating fully in such disclosure, GEP may immediately terminate the Services and the Company shall immediately reimburse all GEP's fees and expenses due under clause 4 herein., as provided in paragraph 4.3 together with all fees, if any, due under paragraph 4.2.
7.5 The Company agrees that this engagement letter (including the fact of its existence and its terms and conditions), and the services it describes, together with any related information or documents, constitute confidential and propriety information of GEP. The Company further agrees that its written and verbal reports to the Company and all writings prepared by or on behalf of GEP and furnished to the Company in connection with GEP's engagement hereunder (collectively the "GEP Information") shall be kept confidential and the Company shall not without GEP's prior written consent, except as required by law, legal process or a regulatory authority, (i) disclose or reveal any GEP Information to any person, firm or entity other than those employees, agents or advisors of the Company who are actively and directly participating in the transactions contemplated by this engagement letter or otherwise needed to know the GEP Information for the purpose of evaluating, structuring or reviewing any portion of the Acquisition or the Company's participation with respect thereto, or (ii) use the GEP Information for any purpose other than in connection with the transactions contemplated by this engagement letter.
8 RELATED PARTIES
GEP acknowledges that it will take all reasonable steps to ensure that, pursuant to paragraph 7 above, any Confidential Information obtained from the Company shall not be disclosed to the Related Parties, except as permitted under paragraph 7.
9 INDEMNIFICATION
9.1 The Company agrees to indemnify and hold harmless GEP, each of its Related Parties and each of its or their directors, officers, employees, agents and affiliates (each an "Indemnitee") in respect of any and all actions, claims losses, liabilities, damages, costs, charges and expenses whatsoever which any Indemnitee may suffer or incur or which may be made against any Indemnitee relating to or arising from GEP's engagement, the provision of the Services, the Acquisition or otherwise from the arrangements contemplated by this engagement letter or any acts or omissions of any Indemnitee otherwise requested by the Company or any of the Company's affiliates pursuant to or in connection therewith, provided that the Company shall not be liable under this indemnity to the extent any such action, claims, losses, liabilities, damages, costs, charges, or expenses are attributable to the gross negligence or wilful misconduct of such Indemnitee. The indemnity in this paragraph 9 is given to GEP in its own right and as trustee for each other Indemnitee.
10 DUE DILIGENCE AND INFORMATION
The Company shall not be responsible for any due diligence in relation to the transaction and the Company acknowledges that any advice given by GEP on the structuring of the Acquisition shall be based on information provided by the Company.
11 CONFLICTS
The Company acknowledges that, in addition to GEP acting as arranger under this engagement letter, other members of the GEP group of companies may have other roles in relation to the Acquisition or provide other services to the Company or its affiliates or to other persons who may have a role or participation in the Acquisition or otherwise, and the Company hereby on its own behalf and on behalf of its affiliates waives any claim against GEP in undertaking any such other roles.
12 LIMITED GEP ROLE
It is expressly agreed and understood that GEP is not providing nor is the Company relying on GEP for legal, accounting, tax or other advice and that the Company will rely on the advice of its own professionals and advisors as it considers appropriate for such matters and will make an independent analysis and decision regarding the Acquisition in relation to such matters based on such advice. The determination whether to accept any proposals, presentation or recommendations arising out of GEP's services under this engagement letter shall be made by the Company in its sole discretion, and the Company shall have the option, at its sole discretion, to accept, reject or modify any such proposals, presentations or recommendations rendered to it by GEP. Nothing in this engagement letter shall give rise to any liability or responsibility on the part of GEP for the success or otherwise of the Acquisition.
13 GEP AFFILIATES
The Company hereby acknowledges and agrees that GEP may perform the services, contemplated to be rendered by it, under this engagement letter through selected affiliates within the host country of listing. In connection therewith but at all times subject to the confidentiality obligations set out herein, GEP may share any information on matters relating to the Company with such affiliates.
14 MODIFICATION OF AGREEMENT
This engagement letter may be modified, amended or superseded only in writing signed by both the parties hereto and expressly referring to this engagement letter.
15 BROKERS
The Company represents and warrants that there have been no other brokers or agents engaged by it or by any other person on its behalf in connection with the transactions contemplated by this engagement letter, other than those specifically advised. The Company shall indemnify and hold GEP for itself and on trust for each of its Related Parties (each an "Indemnitee") harmless against the claim of any broker or agent claiming to have acted on behalf of the Company or any of its affiliates in connection with the Acquisition, and against the claim of any other party (other than a party expressly engaged by GEP) claiming to be entitled to any fees or expenses in connection with the Acquisition and against all costs, charges and expenses incurred by each Indemnitee in relation thereto.
16 AUTHORITY
The Company represents and warrants to GEP that its entry into and delivery of this engagement letter has been duly authorized. GEP represents and
warrants to the Company that GEP's entry into and delivery of this engagement letter has been duly authorized.
17 NO AGENCY
Notwithstanding the identification of GEP as arranger for the Acquisition, GEP will act under this engagement letter solely as an independent contractor. The execution of this engagement letter shall not authorize any party to act as or hold themselves to act as an agent or fiduciary, and GEP shall not be or be deemed to be an agent or fiduciary of the Company.
18 TAXES: PAYMENTS FREE AND CLEAR
All payments by the Company under this engagement letter shall not be subject to any counter-claim or set-off for, or be otherwise affected by, any claim or dispute relating to any matter and will be made free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges over holdings, and all liabilities with respect thereto (together "Taxes"). If the Company shall be required by law to deduct any Taxes from or in respect of any sum payable to GEP hereunder, the sum payable shall be increased as may be necessary so that after making all required deductions, GEP receives an amount equal to the sum it would have received had no such deductions been made. In addition, the Company agrees to pay any present or future stamp or sales taxes or any other excise taxes, charges or similar levies that arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to this engagement letter at the same time as payment or reimbursement of any fees, costs and expenses payable hereunder. The Company shall pay for any VAT or other form of duty or sales tax which is required to be levied thereon.
19 DISPUTES
Any disputes or complaints (with all relevant details) must be in writing and should be referred in the first instance to the Compliance Officer of GEP. Should the Company be dissatisfied with the handling of the dispute, the Company has the right to refer the matter to the Directors of GEP. As the Company is classified as either an Intermediate Customer or Private Expert Client and thereby an Intermediate Customer the Company waives the right to the services of any Financial Ombudsman Service (FOS) and compensation under the any regulatory regime.
20 ASSIGNMENT
This engagement letter shall be binding upon and inure to the benefit of the parties hereto and may not be assigned by either party, without the prior written consent of the other party.
21 ENTIRE AGREEMENT
This agreement supersedes any and all discussions, written or oral, between the parties hereto and sets out the entire agreement of the parties relating to the subject matter of this engagement letter.
22 COUNTERPARTS
This agreement may be executed in counterparts, each of which shall be deemed an original and all of which counterparts shall constitute one and the same document.
23 APPLICABLE LAW
The laws of the United Kingdom apply to this agreement
Please indicate the Company's acceptance of the provisions of this engagement letter by signing as indicated and in accordance with the provisions set out below:
This engagement letter is hereby executed and delivered by the parties as a Deed on the date and year of acceptance of the terms of this letter by the Company as indicated by the date of its signature below:
EXECUTED AND DELIVERED AS A DEED
By M1 Luxembourg AG
By: /s/ Gary Potter ----------------------------------- Gary Potter |
Date 20 December 2009
EXECUTED AND DELIVERED AS A DEED
by Global Equity Partners Plc
By: /s/ Peter James Smith ----------------------------------- Peter James Smith |
Date 20 December 2009
Exhibit 10.8
[LETTERHEAD OF GE PARTNERS PLC]
1 PARTIES TO THE AGREEMENT
1.1 GE Partners Plc ("GEP") domiciled in 306 Victoria House, Victoria, Mahe, Republic of Seychelles and 1 Berkeley Street, London W1J 8DJ, United Kingdom.
1.2 Monkey Rock Inc ("the Company") domiciled at PO Box 1030, Sturgis, South Dakota 57785, USA.
2 APPOINTMENT
2.1 GEP is hereby engaged by the Company as its corporate finance adviser in relation to the Acquisition and the Company accordingly agrees itself not to appoint and not to instruct any other person on its behalf to appoint any other person as arranger/ advisor for such purpose at any time during the Engagement Period (as defined in paragraph 5) without GEP's specific consent, such consent not to be unreasonably withheld. Further, during the Engagement Period the Company itself shall ensure that no other person on its behalf instructs any other agents, intermediaries or advisors in relation to the Acquisition without GEP's prior written approval.
2.2 The Company shall promptly inform GEP of all information, inquiries and proposals it has received before or receives at any time during the Engagement Period with respect to the Acquisition.
2.3 GEP shall inform the Company on a regular basis of any information that may come to its attention regarding the Acquisition during the Engagement Period.
3 SERVICES TO BE PROVIDED BY GEP
3.1 GEP will act as corporate finance adviser to the Company in connection with the transaction. As such, GEP will use all reasonable endeavours to provide the following advice, assistance and services:
3.2 GEP shall advise the Company on structuring and arranging the Acquisition. Additionally, as arranger, GEP shall assist in the preparation and authorisation of documentation, as required.
3.3 GEP shall use reasonable efforts through its marketing and public relations contacts to support and market the Acquisition including; (i) where appropriate, arrange meetings and assist in presentations; (ii) assist the Company, the Directors and their advisors in negotiating definitive documentation and (iii) take such other actions as are reasonably necessary to give effect to the foregoing. The Company will give GEP reasonable and prompt co-operation and assistance to support GEP in the provision of its
services hereunder and keep GEP informed of all developments relevant to the Acquisition ("the Services").
3.4 The Company acknowledges that this engagement letter does not constitute any understanding or commitment whatsoever by GEP, or any of its respective affiliates, to participate financially in any way in the Acquisition.
3.5 At the Company's option, GEP agrees to introduce to the Company professional advisers to include but not be limited to reporting accountants, auditors, lawyers and registrars, it being understood that all fees in connection with such professional advice will be borne by the Company.
3.6 At the Company's option, GEP agrees to provide assistance in the marketing of the Company's product, any such assistance to be governed by a separate agreement.
3.7 GEP shall on a best efforts basis seek to provide or make relevant introductions to provide:
* Any finance required for the listing and additional finance as agreed
with the company for
* Ongoing development pre listing. Post listing finance is by separate
negotiation.
4 FEES AND EXPENSES
4.1 In consideration of GEP providing the Services, the Company will pay GEP the following fees, together with any applicable VAT thereon:
(a) 10% of the Target Company's issued share capital.
(b) $15.000 consultancy fee payable upon signing this contract.
In addition Monkey Rock Inc will pay the relevant fees due as they become due to the accountants and auditors.
In addition, the Company shall reimburse GEP on demand for all out-of-pocket expenses incurred by GEP in providing the Services, including but not limited to travel, accommodation and professional advisors fees, subject to the presentation of invoices to the Company, together with any taxes thereon. All such expenses in excess of (euro)1,000 (One Thousand Euros) will be subject to the prior written consent of the Company, such consent not to be unreasonably withheld. A representative will travel to
the USA no more than twice during the course of the contract on behalf of Monkey Rock Inc. Each trip is expected to cost $5000. That cost is to be reimbursed by the company.
4.2 In the event that GEP provides the Services hereunder and such Acquisition thereafter does not proceed owing to a material or adverse change in the structure of the Company or to any failure on the part of the Company to close on such Acquisition, the Company shall be required to pay to GEP a cancellation fee of $50,000 (Fifty Thousand Dollars).
4.3 All fees as referred to in this paragraph 4 shall be paid in USD$ or an alternative currency using the days prevailing interbank exchange rate. All out of pocket expenses to be reimbursed to GEP shall be reimbursed in the currency in which they were incurred.
5 ENGAGEMENT PERIOD AND TERMINATION
5.1 GEP's engagement hereunder shall become effective on the date the Company executes and delivers this engagement letter to GEP and shall remain in effect until termination in accordance with the following provisions of this paragraph 5 ("the Engagement Period").
(a) Termination of this agreement shall occur on the following
events/circumstances:
on the date 90 (ninety) days following execution by the parties of the
present agreement, provided at least 30 (thirty) days prior to such
date, at least one of the parties has served notice in writing on the
other that it wishes the engagement to terminate on such date. Where
no such notice is served by either party as aforesaid, the engagement
shall remain in effect for another 90 days from such date, under the
same terms and conditions as set out in this engagement letter;
GEP shall be entitled to terminate:
i) In the event there has been a material breach of the terms of the
engagement letter by the Company;
ii) Otherwise, subject to the minimum term established in clause 5.1
(a), above, at any time as GEP so wishes on giving 30 (thirty)
days written notice to the Company.
The Company shall be entitled to terminate:
iii) in the event there has been a material breach of the terms of the
engagement letter by the Company;
iv) otherwise, subject to the minimum term established in clause 5.1
(a), above, and to giving 30 (thirty) days written notice to GEP,
in the event that the Company in its discretion no longer wishes
to proceed with the Acquisition, in which event the cancellation
fee specified in clause 4.3 hereof will become immediately
payable.
(b) At any time but without prejudice to the foregoing as specifically agreed between the parties in writing.
5.2 Upon termination of this engagement letter, neither party shall have any continuing liability or obligation to the other.
6 INFORMATION AND CO-OPERATION
6.1 In connection with GEP's engagement hereunder, the Company shall provide GEP with such information and documents as GEP may consider necessary or desirable in order to enable it to provide the Services and to carry out its duties and responsibilities hereunder. In particular, and without prejudice to the generality of the foregoing, the Company will promptly furnish GEP with such information as GEP may request in order to permit GEP to assist the Company in preparing any material required for the Acquisition (collectively, the "Acquisition Documents").
6.2 The Company will be solely responsible for the contents of any Acquisition Documents and the Company represents and warrants to GEP that the Acquisition Documents will, as of the date of any marketing, distribution of the Acquisition Documents or completion, or preparation of the Acquisition, be true and accurate in all material respects, not omit any material fact and not be misleading in any respect and, with respect to any financial projections, the Company represents that they have been, or will be, prepared in good faith on the basis of reasonable assumptions. The Company agrees to advise GEP promptly of the occurrence of any event or any other change known to the Company which results in any of the Acquisition Documents containing any untrue statement of a material fact or omitting to state a material fact the omission of which would render any statements contained therein, in light of the circumstances under which they were made, misleading and in such event the Company shall provide corrective information to GEP suitable for inclusion in a supplemental information
statement. For purposes of this paragraph notification by the Company must be made directly to GEP and GEP shall not be deemed notified solely as a result of action, notice or the constructive knowledge of any of its Related Parties.
6.3 The Company acknowledges that GEP (i) will use and rely upon the information provided by the Company or on its behalf which will comprise the Acquisition Documents absolutely and without GEP itself independently verifying any of the same, (ii) does not itself assume any responsibility for the accuracy of completeness of the Acquisition Documents.
6.4 The Company hereby authorises GEP to provide the Acquisition Documents on its behalf to those concerned with the Acquisition. GEP shall each have the right to review and be required to approve all Acquisition Documents and every form of letter, circular, notice, memorandum or other written communication from the Company or any person acting on its behalf in connection with the Acquisition and the persons to whom any of the foregoing are to be directed, such approval not to be unreasonably withheld.
6.5 The Company shall at all times use its efforts to assist GEP in providing the Services and in carrying out its duties, functions and responsibilities hereunder and shall co-operate and use all reasonable efforts to assist GEP in complying with the applicable laws of any jurisdiction in which GEP operating.
7 CONFIDENTIALITY
7.1 GEP acknowledges that, in performing its duties from time to time hereunder, it shall receive from the Company certain information relating to the Company, the Acquisition and otherwise to the transactions contemplated by this engagement letter. For purposes of this paragraph, all such information, except for information which (i) is comprised in Acquisition Documents as approved by the Company (ii) GEP is otherwise authorised by the Company to disclose to third parties otherwise than on a confidential basis, (iii) is or becomes generally available to the public other than as a result of a disclosure by GEP where such disclosure is not permitted, or (iv) is or becomes available to GEP on a non-confidential basis from a person or entity other than the Company, is hereinafter referred to as "Confidential Information".
7.2 GEP shall keep the Confidential Information confidential and not without the Company's prior consent, except as required by law, legal process, or regulatory authority, (i) disclose or reveal any Confidential Information to any person, firm or entity other than those employees, agents or advisors of GEP who are actively and directly participating in the transactions contemplated by this engagement letter or who otherwise need
to know the Confidential Information for the purpose of evaluating, structuring or reviewing any portion of the Acquisition or GEP's role with respect thereto, or (ii) use Confidential Information for any purpose other than in connection with the transactions contemplated by this engagement letter.
7.3 If GEP's engagement is terminated at any time, GEP shall continue to maintain the Confidential Information in confidence in accordance with the terms of this engagement letter and, upon the written request of the Company, such Confidential Information and all copies thereof as are held by GEP, will be returned to the Company, or destroyed by GEP, provided, however, that GEP may retain one copy of the Confidential Information in the files of its general counsel for compliance purposes or for the purpose of defending or maintaining any litigation relating to this engagement letter.
7.4 If GEP should decide that any such Confidential Information should be included in the Acquisition Documents, and the Company withholds its consent to such disclosure or refrains from co-operating fully in such disclosure, GEP may immediately terminate the Services and the Company shall immediately reimburse all GEP's fees and expenses due under clause 4 herein., as provided in paragraph 4.3 together with all fees, if any, due under paragraph 4.2.
7.5 The Company agrees that this engagement letter (including the fact of its existence and its terms and conditions), and the services it describes, together with any related information or documents, constitute confidential and propriety information of GEP. The Company further agrees that its written and verbal reports to the Company and all writings prepared by or on behalf of GEP and furnished to the Company in connection with GEP's engagement hereunder (collectively the "GEP Information") shall be kept confidential and the Company shall not without GEP's prior written consent, except as required by law, legal process or a regulatory authority, (i) disclose or reveal any GEP Information to any person, firm or entity other than those employees, agents or advisors of the Company who are actively and directly participating in the transactions contemplated by this engagement letter or otherwise needed to know the GEP Information for the purpose of evaluating, structuring or reviewing any portion of the Acquisition or the Company's participation with respect thereto, or (ii) use the GEP Information for any purpose other than in connection with the transactions contemplated by this engagement letter.
8 RELATED PARTIES
GEP acknowledges that it will take all reasonable steps to ensure that, pursuant to paragraph 7 above, any Confidential Information obtained from the Company shall not be disclosed to the Related Parties, except as permitted under paragraph 7.
9 INDEMNIFICATION
9.1 The Company agrees to indemnify and hold harmless GEP, each of its Related Parties and each of its or their directors, officers, employees, agents and affiliates (each an "Indemnitee") in respect of any and all actions, claims losses, liabilities, damages, costs, charges and expenses whatsoever which any Indemnitee may suffer or incur or which may be made against any Indemnitee relating to or arising from GEP's engagement, the provision of the Services, the Acquisition or otherwise from the arrangements contemplated by this engagement letter or any acts or omissions of any Indemnitee otherwise requested by the Company or any of the Company's affiliates pursuant to or in connection therewith, provided that the Company shall not be liable under this indemnity to the extent any such action, claims, losses, liabilities, damages, costs, charges, or expenses are attributable to the gross negligence or wilful misconduct of such Indemnitee. The indemnity in this paragraph 9 is given to GEP in its own right and as trustee for each other Indemnitee.
10 DUE DILIGENCE AND INFORMATION
The Company shall not be responsible for any due diligence in relation to the transaction and the Company acknowledges that any advice given by GEP on the structuring of the Acquisition shall be based on information provided by the Company.
11 CONFLICTS
The Company acknowledges that, in addition to GEP acting as arranger under this engagement letter, other members of the GEP group of companies may have other roles in relation to the Acquisition or provide other services to the Company or its affiliates or to other persons who may have a role or participation in the Acquisition or otherwise, and the Company hereby on its own behalf and on behalf of its affiliates waives any claim against GEP in undertaking any such other roles.
12 LIMITED GEP ROLE
It is expressly agreed and understood that GEP is not providing nor is the Company relying on GEP for legal, accounting, tax or other advice and that the Company will rely on the advice of its own professionals and advisors as it considers appropriate for such matters and will make an independent analysis and decision regarding the Acquisition in relation to such matters based on such advice. The determination whether to accept any proposals, presentation or recommendations arising out of GEP's services under this engagement letter shall be made by the Company in its sole discretion, and the Company shall have the option, at its sole discretion, to accept, reject or modify any such proposals, presentations or recommendations rendered to it by GEP. Nothing in this engagement letter shall give rise to any liability or responsibility on the part of GEP for the success or otherwise of the Acquisition.
13 GEP AFFILIATES
The Company hereby acknowledges and agrees that GEP may perform the services, contemplated to be rendered by it, under this engagement letter through selected affiliates within the host country of listing. In connection therewith but at all times subject to the confidentiality obligations set out herein, GEP may share any information on matters relating to the Company with such affiliates.
14 MODIFICATION OF AGREEMENT
This engagement letter may be modified, amended or superseded only in writing signed by both the parties hereto and expressly referring to this engagement letter.
15 BROKERS
The Company represents and warrants that there have been no other brokers or agents engaged by it or by any other person on its behalf in connection with the transactions contemplated by this engagement letter, other than those specifically advised. The Company shall indemnify and hold GEP for itself and on trust for each of its Related Parties (each an "Indemnitee") harmless against the claim of any broker or agent claiming to have acted on behalf of the Company or any of its affiliates in connection with the Acquisition, and against the claim of any other party (other than a party expressly engaged by GEP) claiming to be entitled to any fees or expenses in connection with the Acquisition and against all costs, charges and expenses incurred by each Indemnitee in relation thereto.
16 AUTHORITY
The Company represents and warrants to GEP that its entry into and delivery of this engagement letter has been duly authorized. GEP represents and
warrants to the Company that GEP's entry into and delivery of this engagement letter has been duly authorized.
17 NO AGENCY
Notwithstanding the identification of GEP as arranger for the Acquisition, GEP will act under this engagement letter solely as an independent contractor. The execution of this engagement letter shall not authorize any party to act as or hold themselves to act as an agent or fiduciary, and GEP shall not be or be deemed to be an agent or fiduciary of the Company.
18 TAXES: PAYMENTS FREE AND CLEAR
All payments by the Company under this engagement letter shall not be subject to any counter-claim or set-off for, or be otherwise affected by, any claim or dispute relating to any matter and will be made free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges over holdings, and all liabilities with respect thereto (together "Taxes"). If the Company shall be required by law to deduct any Taxes from or in respect of any sum payable to GEP hereunder, the sum payable shall be increased as may be necessary so that after making all required deductions, GEP receives an amount equal to the sum it would have received had no such deductions been made. In addition, the Company agrees to pay any present or future stamp or sales taxes or any other excise taxes, charges or similar levies that arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to this engagement letter at the same time as payment or reimbursement of any fees, costs and expenses payable hereunder. The Company shall pay for any VAT or other form of duty or sales tax which is required to be levied thereon. 19 DISPUTES
Any disputes or complaints (with all relevant details) must be in writing and should be referred in the first instance to the Compliance Officer of GEP. Should the Company be dissatisfied with the handling of the dispute, the Company has the right to refer the matter to the Directors of GEP. As the Company is classified as either an Intermediate Customer or Private Expert Client and thereby an Intermediate Customer the Company waives the right to the services of any Financial Ombudsman Service (FOS) and compensation under the any regulatory regime.
20 ASSIGNMENT
This engagement letter shall be binding upon and inure to the benefit of the parties hereto and may not be assigned by either party, without the prior written consent of the other party.
21 ENTIRE AGREEMENT
This agreement supersedes any and all discussions, written or oral, between the parties hereto and sets out the entire agreement of the parties relating to the subject matter of this engagement letter.
22 COUNTERPARTS
This agreement may be executed in counterparts, each of which shall be deemed an original and all of which counterparts shall constitute one and the same document.
23 APPLICABLE LAW
The laws of the United Kingdom apply to this agreement
Please indicate the Company's acceptance of the provisions of this engagement letter by signing as indicated and in accordance with the provisions set out below:
This engagement letter is hereby executed and delivered by the parties as a Deed on the date and year of acceptance of the terms of this letter by the Company as indicated by the date of its signature below:
EXECUTED AND DELIVERED AS A DEED
By Monkey Rock Inc
By: /s/ Dexter Aspacio ------------------------------------- Dexter Aspacio |
Date 26 November 2009
EXECUTED AND DELIVERED AS A DEED
by Global Equity Partners Plc
By: /s/ Peter James Smith ------------------------------------- Peter James Smith |
Date 26 November 2009
Exhibit 14
GLOBAL EQUITY INTERNATIONAL, INC.
CODE OF BUSINESS CONDUCT AND ETHICS
INTRODUCTION.............................................................. 1
1. Compliance with Code.................................................. 1 2. Reporting Violations of the Code...................................... 1 3. Compliance with Laws, Rules and Regulations........................... 2 4. Conflicts of Interest................................................. 2 5. Inside Information and Securities Trading............................. 2 6. Corporate Opportunity................................................. 3 7. Confidentiality....................................................... 3 8. Fair Dealing.......................................................... 4 9. Protection And Proper Use Of Company Assets........................... 4 10. Accuracy of Business Records.......................................... 5 11. Accounting............................................................ 5 12. Competitive Information............................................... 6 13. Amendment............................................................. 6 |
CODE OF BUSINESS CONDUCT AND ETHICS
INTRODUCTION
Global Equity International, Inc. ("Company") is committed to maintaining the highest standards of ethical conduct, promoting integrity, deterring wrongdoing and complying with applicable laws, rules and regulations. In furtherance of this commitment, the Board of Directors ("Board") has adopted this Code of Business Conduct and Ethics ("Code") for all directors, officers and employees of the Company ("Company Individuals"). The principles set forth in this document describe how Company Individuals should conduct themselves. All Company Individuals are expected to comply with the letter and spirit of this Code.
This Code does not address every expectation or condition regarding proper and ethical business conduct. Accordingly, this Code is intended to serve as a source of guiding principles for Company Individuals. Company Individuals are encouraged to discuss issues about particular circumstances that may be relevant to one or more of the provisions of this Code with the Chairman of the Board ("Chairman"), who may consult with inside or outside legal counsel as appropriate.
The Board encourages the reporting of any behaviour by Company Individuals which violates the Code and the Board will not tolerate retaliation against any person who in good faith reports such violations to the Board or the Chairman.
1. Compliance with Code
The Code applies to all Company Individuals and all Company Individuals are accountable for compliance with the Code. The Board is responsible for updating the Code and monitoring compliance with the Code. Waivers from the Code may only be granted by the Board, with any director involved in the transgression abstaining from voting on any decision made in respect of such waiver.
2. Reporting Violations of the Code
Company Individuals must promptly advise either a supervisor or the Chairman if a Company Individual believes that he or she has observed a violation of the Code by any Company Individual or by anyone purporting to be acting on the Company's behalf. Any such reports may be made anonymously. Confidentiality shall be maintained to the extent permitted by law. If a Company Individual is not comfortable reporting such behaviour to a supervisor or the Chairman of the Board, the individual may report to the Company's external legal counsel.
THE COMPANY SHALL NOT TAKE OR ALLOW ANY REPRISAL AGAINST ANY COMPANY INDIVIDUAL WHO, IN GOOD FAITH, REPORTS A SUSPECTED VIOLATION OF THIS CODE. ANY REPRISAL WILL IN ITSELF BE A VERY SERIOUS BREACH OF THE CODE AND SUBJECT TO DISCIPLINARY ACTION.
3. Compliance with Laws, Rules and Regulations
The Company requires strict compliance from all its Company Individuals with applicable laws, rules and regulations. These include all provincial, federal and other laws, including securities and insider trading laws, and the Company's insider trading compliance policies. Company Individuals must comply with and ensure compliance with all of the laws, rules and regulations of countries wherever the Company conducts business. This Code is not a summary of law and the obligation is on each Company Individual to ensure that the applicable laws are known to him/her. The Company will provide Company Individuals with guidelines and materials that the Company or its lawyers have prepared on specific laws, rules and regulations as are necessary to maintain compliance. Any case of non-compliance with an applicable law may subject a Company Individual to disciplinary action. The fact that in some countries certain standards of conduct are legally prohibited but are not enforced in practice, or their violation is not subject to public criticism or censure, will not excuse an illegal action by a Company Individual.
4. Conflicts of Interest
Shareholders of the Company expect business decisions to made in the best interest of the Company. Any situation that creates or appears to create a material conflict of interest must be avoided by a Company Individual. A conflict of interest occurs when a Company Individual's private interest interferes in any way with the interests of the Company or any of its subsidiaries and affiliated Companies. If a material conflict of interest arises, the Company Individual involved must disclose the conflict to the Board and outside legal counsel and take prompt action to remedy it. The following are examples of conflicts of interest:
(a) receiving personal loans or guarantees of obligations as a result of one's position as a Company Individual;
(b) engaging in conduct or activity or entering into any transaction or agreement that competes with the Company's existing or prospective business or takes advantage of an opportunity which should be offered to the Company first;
(c) accepting bribes, kickbacks or any other improper payments for services relating to the conduct of the business of the Company; and
(d) accepting gifts, favours, entertainment, or services, other than such minor gifts, etc.(under U.S. $100.00) as are the practice in the industry.
5. Inside Information and Securities Trading
Confidential Company information may not be used for personal benefit. It is prohibited to trade securities or to inform or tip others to trade securities of the Company or affiliated companies on the basis of material information obtained as a Company Individual before it is made publicly available to the public through appropriate media. Such information includes news about acquisitions, investments, new business relationships, financial results,
important management changes and other information that has the potential to affect the stock price of the Company or another company.
If doubt exists about whether the information is material or has been released to the public, a Company Individual shall not trade before consulting with the Chairman or the Company's legal counsel. No Company Individual may engage in "short sales" or trade in puts, calls or other options on Company stock.
Company Individuals may, at any time, purchase Company securities and exercise options granted to them in accordance with the applicable arrangements, as long as those purchases are not decisions based on inside information.
Company Individuals shall be required to read, sign and date a copy of the Company's Insider's Trading Compliance Policy (a separate and distinct document from this Code) as a condition to such Company Individual's initial and continued employment by the Company
6. Corporate Opportunity
Except as may be approved by the Board or the Chairman, Company Individuals are prohibited from:
(a) taking any opportunity that belongs to the Company;
(b) taking any opportunity that are discovered through the use of Company corporate property, information or from the position as Director;
(c) using corporate property, information or position; or
(d) competing with the Company,
that will benefit themselves personally, or benefit their family, or be to the benefit of persons or entities outside the Company, whether or not it has a material impact on the Company's financial performance.
7. Confidentiality
All Company Individuals must maintain the confidentiality of confidential non-public information entrusted to them by the Company in their capacity as a Company Individual, except when the Company authorizes disclosure or when required by laws, regulations or legal proceedings. "Confidential Information" is all non-public information entrusted to or obtained by a Company Individual by reason of his or her position as a Company Individual. It includes, but is not limited to, non-public information that might be of use to competitors or stock traders or harmful to the Company, its shareholders or its customers if disclosed, such as:
(a) Non-public information about the Company's financial condition, detailed sales and profit figures, new product or marketing prospects or plans, its marketing and sales programs and research and development information, manufacturing processes, salary data, employee lists as well as information
relating to mergers and acquisitions, stock splits and divestitures or material contracts being negotiated or entered into by the Company or material contracts being terminated by the Company or a party to any such contract;
(b) non-public information concerning possible transactions with other companies or information about the Company's customers, suppliers or joint venture partners, which the Company is under an obligation to maintain as confidential; and
(c) non-public information about discussions and deliberations relating to business issues and decisions between and among Company Individuals.
Company Individuals must keep Confidential Information strictly confidential, limiting access to those who have a need to know, avoiding discussion of confidential information in public areas such as aeroplanes, elevators, restaurants and rest rooms and on cellular phones and avoiding inadvertent disclosure of Confidential Information through the use of laptop computers or other similar electronic devices in public places.
Whenever feasible, Company Individuals should consult an appropriate supervisor if they believe they have a legal obligation to disclose confidential information.
Generally, no Company Individual shall:
(a) Use Confidential Information for his or her own personal benefit or to benefit persons or entities outside the Company; or
(b) disclose Confidential Information outside the Company, either during or after his or her service as a Company Individual of the Company, except as required to conduct the Company's business or as may be otherwise required by law.
8. Fair Dealing
All Company Individuals must treat the Company's customers, suppliers, competitors, creditors, directors, officers and employees fairly and with respect. No Company Individual may take unfair advantage of anyone dealing or involved with the Company through manipulation, concealment, abuse of privileged information, misrepresentation of material facts or any other unfair dealing practice. All Company Individuals have the right to pursue their careers at the Company free from harassment and free from discrimination based on any ground prohibited by law, including race, color, ancestry, place of origin, political belief, religion, marital status, family status, physical or mental disability, sex, sexual orientation or age.
9. Protection And Proper Use Of Company Assets
All Company Individuals must perform their duties in a manner that protects the Company's assets and resources and ensures their efficient use. Company assets may only be used for legitimate Company business purposes and not for personal benefit or gain. "Assets" include cash, bank accounts, equipment, inventory, supplies and intellectual property, and any other personal property
that may be considered to be an "asset" by accountants, attorneys, law enforcement officials and other government personnel.
Examples of prohibited personal use of company assets are:
(a) removal of Company property for personal use;
(b) unauthorized use of Company vehicles or residences;
(c) use of company-paid contractors to perform work at a Company Individual's home; and
(d) unauthorized copying of software, tapes, books and other legally protected work.
All Company Individuals must comply with security procedures in place to protect Company assets.
10. Accuracy of Business Records
Honest and accurate recording and reporting of information is extremely important. Investors rely on the Company to provide accurate information about it and its affiliates and to make responsible business decisions based on reliable records. All books, records and accounts must accurately reflect transactions and events and all financial records must conform both to generally accepted accounting principles, Section 404 of the Sarbanes-Oxley Act of 2002, as amended, all other Securities and Exchange Commission rules and regulations, and to the Company's internal control systems. Undisclosed or unrecorded funds or assets are not allowed. All off balance sheet transactions and accounts shall be reported to the Board, outside legal counsel and the Company's independent accounting firms. No entry may be made that intentionally hides or disguises the true nature of any transaction.
11. Accounting
The Audit Committee of the Board is responsible for establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters. Company Individuals who have concerns or complaints regarding such matters must promptly submit those concerns or complaints to the Chairman of the Audit Committee or the Company's outside legal counsel. In the event that the Company has not constituted an Audit Committee, then the Board is responsible for establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters. Company Individuals who have concerns or complaints regarding such matters must promptly submit those concerns or complaints to the Board and outside legal counsel.
12. Competitive Information
Information about competitors, customers and suppliers is a valuable asset in the competitive markets in which the Company operates or will operate. The Company will obtain this information legally. Theft of proprietary information, inducing disclosures by a competitor's past or present employees and any actions that could create an appearance of an improper agreement in respect of competitors is prohibited. Any Company Individual who is authorized to retain a consultant to gather competitive information must take steps to ensure that the consultant adheres to these policies. When in doubt about the propriety of any information-gathering technique or about whether a competitor, supplier, or other external contact has provided confidential information, a Company Individual should contact an appropriate supervisor or the Chairman of the Board. All persons dealing with the Company in any material capacity must sign the Company's then current confidentiality and non-disclosure agreement.
13. Amendment
This Code may be amended by the Company's Board, subject to the disclosure and other provisions of applicable corporate securities law and policy.
14. Adoption.
This Code has been approved and adopted by the Company's Board on this the 2nd day of September, 2011, and shall be included in the minutes or written consent of the Board.
Attested by:
/s/ Enzo Taddei ------------------------------ Enzo Taddei Director |
Exhibit 21
Subsidiaries
Global Equity Partners PLC*
(incorporated under the
Republic of Seychelles International Business Companies Act, 1994)
* 100% owned subsidiary.