Attached files
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| 8-K - GLOBAL DYNAMICS CORP | v174842_8k.htm |
Exhibit
99.1
Global
Dynamics, Corp.
43
Hakablan Street
Jerusalem,
Israel 93874
February
11, 2010
Mr.
Darren A. Krantz,
President
& CEO
Consumer
Products Services, LLC
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Re:
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Proposed
Acquisition by Global Dynamics, Corp. (“GLOBAL”) of one hundred percent
(100%) of the outstanding membership interests of Consumer Product
Services LLC (“CPS”)
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Dear Mr.
Krantz:
This letter will confirm the recent
discussions we have had with you and your representatives relative to the
proposed acquisition by GLOBAL of all of the issued and outstanding membership
interests of CPS. The objective of our discussions has been the
execution and consummation, as soon as feasible, of a formal agreement between
GLOBAL and CPS (the “Agreement”), which among other things, would provide for
the various matters set forth below:
1. GLOBAL
will acquire all of the issued and outstanding membership interests of CPS from
the members of CPS in exchange 60% of the total issued and outstanding shares of
Global Common Stock, which will be delivered upon the closing of this
transaction (the “Closing Date”). This exchange is intended to
qualify as a tax-free reorganization under Section 368 of the Internal Revenue
Code of 1986, as amended, and the shares of GLOBAL received by CPS members will
be received on a tax-free basis. The shares to be issued by GLOBAL
will be “restricted securities” as defined in Rule 144 under the Securities Act
of 1933, and an appropriate legend will be placed on the certificates
representing such shares. It is agreed by the parties that a
set-aside (Escrow) of 25% of the issued and outstanding shares of common stock
common stock shall be held by Escrow Agent to be issued for the investment of
the funds in paragraph 2, below. The shares shall be distributed to
the investors in paragraph 2. 10% of the issued shares of common
stock common stock shall be issued to the Keystone Capital Resources LLC
group. An additional 5% shall be issued upon the completion of the
capital raise. In the event of a shortfall in the raise of capital,
the 5% will be delivered pro rata to the capital raise, with the balance to the
new management of the Company.
2. GLOBAL
will raise up to a total of three million ($3,000,000) dollars in a Rule 506
offering to accredited investors by selling shares of GLOBAL common stock at
$0.50 per share (this price is after the 20 for 1 reverse split referred to in
paragraph 4 below), basing the total valuation of the closed transaction at a
value of twelve million ($12,000,000) dollars.
3. The
actual number of shares to be issued for all of the outstanding membership
interests of CPS will be such amount that will equal 60% of the shares issued
and outstanding after the completion of this transaction assuming all $3,000,000
is raised.
Darren A.
Krantz, President
Consumer
Product Services, LLC
February
11, 2010
Page
2
4. At
the closing of the transaction, GLOBAL shall effectuate a reverse split of its
common shares at a ratio of 20 to 1, which shall result in a total of twenty
five million (25,000,000) shares of GLOBAL Common Stock being issued and
outstanding at the conclusion of the transaction. In addition, GLOBAL
shall amend its Certificate of Incorporation to amend the name to reflect the
acquisition of CPS, and shall amend its Certificate of Incorporation to
authorize up to ten million (10,000,000) shares of preferred stock of
GLOBAL.
5. Subject
to verification during the audit of CPS, the amount of monies due to Darren A.
Krantz, expected to be approximately one million ($1,000,000) dollars, shall be
converted into a preferred series of stock of GLOBAL. Said preferred
stock, shall be designated and issued by the Board of Directors at the closing
of the transaction to be redeemable and pay an interest rate of
5%. This preferred stock shall be redeemable at the option of the
successor corporation at 25% per year for cash, including interest, or
convertible into shares of common stock of Global. The preferred
shares shall also carry a super-voting right of 100 to 1 per share of the Global
Common Stock.
6. At
or prior to the closing, the current shareholders of GLOBAL who own 425,000,000
shares, which represents 85% of the total issued and outstanding shares of
common stock Global will be tendered for cancellation as consideration for the
transfer to them of all rights to the patent and related technology owned by
GLOBAL. This will be completed as part of the acquisition of the
ownership interest of CPS.
7.
The parties will use their best efforts to close this transaction on or about
February 28, 2010.
8. At
the Closing, the present GLOBAL officers and directors shall deliver their
respective letters of resignation, along with minutes of the GLOBAL Board of
Directors accepting such resignations and appointing (Need new names for board)
to the GLOBAL Board of Directors. New Executive Officers will also be
appointed.
9. Upon
Closing, the Board of Directors shall adopt a Performance Bonus Compensation
Plan (“Bonus Plan”) for the new Management of GLOBAL. The Bonus Plan
shall provide as follows:
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a)
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After
the first four (4) fiscal quarters after the closing and funding of
GLOBAL, if the gross revenue reaches a level of a minimum of fifteen
million ($15,000,000) and with an EBITDA of eight (8%) percent, the new
Management shall be issued additional shares of common stock equal to ten
(10%) percent of the total issued and outstanding GLOBAL Common Stock at
the date of award;
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b)
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After
the next four (4) fiscal quarters (or eight fiscal quarters) after the
closing and funding of GLOBAL, if the gross revenue reaches a level of a
minimum of twenty-two million ($22,000,000) dollars, and with an EBITDA of
eight (8%) percent, the new Management shall be issued additional shares
of common stock equal to ten (10%) percent (thus, totaling twenty (20%)
percent) of the total issued and outstanding GLOBAL Common Stock at the
date of award;
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Darren A.
Krantz, President
Consumer
Product Services, LLC
February
11, 2010
Page
3
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c)
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After
the next four (4) fiscal quarters (or twelve fiscal quarters) after the
closing and funding of GLOBAL, if the gross revenue reaches a level of a
minimum of thirty million ($30,000,000) dollars, and with an EBITDA of
eight (8%) percent, the management shall be issued additional shares of
common stock equal to ten (10%) percent (thus, totaling thirty (30%)
percent) of the total issued and outstanding GLOBAL Common Stock at the
date of award;
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For the
purposes of the Bonus Plan, the gross revenue used above shall have a margin of
error of twenty (20%) percent of the stated amount to qualify for the Bonus
Plan. In addition, an increase of the percentage of EBITDA can be
used to offset a lower gross revenue at 1% per $500,000 of revenue.
10. Employment
Agreements for all new Management of CPS shall be negotiated and approved at the
time of closing.
11. CPS
represents that it was formed in 2002, and that it can prepare the necessary
financial statements that will be required by the SEC rules when the Form 8-K is
filed to report this transaction.
12. On
the date of this Letter of Intent, the common stock of GLOBAL is registered with
the Securities and Exchange Commission pursuant to Section 15(d) of the
Securities Exchange Act of 1934, as amended, (the “Act”), and GLOBAL has filed
all reports required to be filed by Section 15(d) of the Act during the past 12
months. These reports were, when filed, accurate, not misleading and
complete in all material respects.
13. The
common stock of GLOBAL is currently listed for trading on the OTC Bulletin Board
under the symbol GLDY.
14. GLOBAL
and CPS will take all necessary steps to call meetings of their respective
directors as soon as possible to approve the terms of this Letter of
Intent.
15. Upon
the signing of this Letter of Intent, GLOBAL and CPS will provide to each other
full access to their books and records and will furnish financials and operating
data and such other information with respect to their business and assets as may
reasonably be requested from time to time. If the proposed
transaction is not consummated, all parties shall keep confidential any
information (unless ascertainable from public filings or published information)
obtained concerning the other's operations, assets and
business.
Darren A.
Krantz, President
Consumer
Product Services, LLC
February
11, 2010
Page
4
16. This
Letter of Intent may be executed in two or more counterparts, each of which
shall be deemed an original but all of which together shall constitute one and
the same instrument.
17. Each
party will pay its legal and accounting expenses incurred in connection with
this transaction whether or not the transaction is consummated.
18. Upon
the execution by you and return to us of this Letter of Intent, counsel for CPS
and GLOBAL will prepare a definitive Agreement which shall contain provisions in
accordance with this Letter together with such further appropriate terms and
conditions as legal counsel and the parties may mutually
determine. The Agreement shall be subject, in all respects, to the
approval of the respective Boards of Directors of GLOBAL and CPS.
19. It
is understood that the terms set forth in this Letter of Intent may not
constitute all of the major terms which will be included in the Agreement, that
the terms set forth herein are subject to further discussion and negotiation,
and that this Letter is an expression of intent only and is not to create or
result in any legally binding obligation upon the parties hereto except with
respect to paragraphs 15 and 17.
If the foregoing accurately reflects
our discussions, please execute and return to the undersigned one copy of this
Letter.
GLOBAL
DYNAMICS, CORP.
By:_______________________________
Margalit
Yosef,
President
CONSUMER
PRODUCT SERVICES LLC
By:_______________________________
Darren
A. Krantz, President