Document:

allies_ex10-5.htm

OPERATING AGREEMENT

OF

ALLIES - ARIZONA, LLC

A NEBRASKA LIMITED LIABILITY COMPANY

THIS OPERATING AGREEMENT made and entered into as of the 1st day of March, 2010, by and among ALLIES LIMITED, INC., a Nevada Corporation, ("Allies"), and S&A OPERATIONS, Inc., a Nebraska corporation, ("S&A") (collectively Steier and Read are referred to as "Members").

WITNESETH:

WHEREAS, the Articles of Organization of the limited liability company, ALLIES - ARIZONA, LLC were filed with the Office of the Nebraska Secretary of State, effective February ___, 2010, under the laws of the State of Nebraska;

WHEREAS, the Articles of Organization contained only the information necessary to meet the filing requirements of the State of Nebraska, and was not intended to control the operation of the limited liability company;

WHEREAS, the parties hereto desire the limited liability company formed under the laws of the State of Nebraska to be operated by and upon the terms and conditions hereinafter set forth;

NOW, THEREFORE, in consideration of the mutual covenants hereinafter contained, it is agreed by and among the parties hereto as follows:

Article I

BASIC STRUCTURE

§ 1.1 Name

The business of the limited liability company shall be conducted under the name of Allies - Arizona, LLC.

§ 1.2 Place of Business

The principal place of business and office of Allies - Arizona, LLC shall be located at 1015 No. 98th St., Suite 100 Omaha, NE 68114, or such other place as the Managing Member may from time to time designate.

  

  

  

§ 1.3 Term

Allies - Arizona, LLC shall become effective on the date of registration with the Secretary of State of Nebraska and shall continue perpetually unless earlier terminated pursuant to the terms of this agreement.

§ 1.4 Purpose

The purpose for which Allies - Arizona, LLC was organized is to own, hold, and manage an interest in Gilbert Business Park Properties, LLC, an Arizona limited liability company, and any ancillary activities.

Article II

DEFINITIONS

In this agreement, unless the context otherwise requires;

	
  

	
(a)

	
"Articles of Organization" means documents filed under §6 of the Act for the purpose of forming Allies - Arizona, LLC and includes amended and restated articles of organization, and articles of merger.

	
  

	
(b)

	
"Bankruptcy" means with respect to any person, being the subject of an order for relief under Title 11 of the United States Code.

	
  

	
(c)

	
"Capital" means all property owned by Allies - Arizona, LLC other than property of a kind which would be included in the inventory of Allies Arizona, LLC or which is held for resale in the ordinary course of business.

	
  

	
(d)

	
"Capital Contribution" means any cash, tangible or intangible property, or services rendered, or a promissory note or other binding obligation to contribute cash or property or to perform services, which a Member contributes to Allies - Arizona, LLC in the capacity of a Member.

	
  

	
(e)

	
"Distribution" means a direct or indirect transfer of money or other property, or evidence of indebtedness by Allies - Arizona, LLC to or for the benefit of its Members in respect of their Interest.

	
  

	
(f)

	
"limited liability company" means an entity that is an unincorporated association having two or more Members, and that is organized under or subject to the Act.

	
  

	
(g)

	
"Managing Member" or "Managing Members" means a person or persons designated by the Members of Allies - Arizona, LLC to manage Allies Arizona, LLC as provided in this Operating Agreement.

  

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(h) "Member" means a person with a Membership Interest In Allies Arizona, LLC.

	
  

	
(i) "Membership Interest" or "Interest" means a Member's share of the profits and the losses of Allies - Arizona, LLC and the right to receive Distributions of Allies - Arizona, LLC's assets, and a right to vote or participate in management.

	
  

	
(j) "Net Operating Profit" means, for any accounting period, the gross receipts of Allies - Arizona, LLC for such period less the sum of all cash expenses of operation of Allies - Arizona, LLC, and such sums as may be necessary to establish a reserve for operating expenses.

	
  

	
(k) "Operating Agreement" means this document and any amendment thereto pertaining to the affairs of Allies - Arizona, LLC and the conduct of its business.

	
  

	
(l) "Tax Matters Member" means the person responsible for the duties set forth in §6.5 herein and by Internal Revenue Code §§622I-6232.

Article III

FINANCIAL ARRANGEMENTS

§ 3.1 Initial Contributions of Members

Each original Member has contributed to the initial Capital of Allies - Arizona, LLC, property in the amount and form indicated on Schedule "A" attached hereto and made a part hereof. Capital Contributions to Allies - Arizona, LLC shall not bear interest. Individual capital accounts ("Capital Accounts") shall be maintained for each Member.

§ 3.2 Additional Capital Contributions

If at any time during the existence of Allies - Arizona, LLC, it shall become necessary to increase the Capital with which Allies - Arizona, LLC is doing business, then on the vote of the Managing Members each Member shall contribute to the Capital of Allies - Arizona, LLC (within thirty days of receipt of written request for the same) an amount according to his then percentage share of Capital as called for by the Managing Members.

§ 3.3 Rights of the Members Upon Default of a Member

If a Member shall not contribute such amount, the other Members shall have the right to contribute, in proportion to their then percentage share of Capital, the amount

  

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which the noncontributing Member was to contribute and such Capital Accounts and percentage of Capital shall be adjusted accordingly. If not all contributing Members elect to contribute their proportionate share of the amount which the noncontributing Member was to contribute, any electing Member shall have a further right, but no obligation, to contribute an amount equal to the remaining amount not contributed by the noncontributing or non-electing members.

§ 3.4 Capital Accounts

Any gains, losses, deductions, amortization and depreciation associated with the Capital shall be added to or subtracted from the Members' Capital Accounts (using the initial Capital Accounts as a base). All other ("operating" profits) (or losses) of Allies-Arizona, LLC shall be (if income) deemed to be income of the Members according to their share of the profits and losses. If losses, these shall be deducted from the Members' Capital Accounts according to their share of profits and losses. Undistributed profits shall be added to the relevant Members' Capital Accounts. Amounts distributed in excess of current profits shall be deducted from the relevant Members' Capital Accounts. Upon dissolution, any Member having a negative Capital Account balance shall be required to make up such balance.

§ 3.5 Percentage Share of Capital

The percentage share of Capital of each initial Member shall be (unless otherwise modified by the terms of this agreement) as follows:

	
Names

	
Initial Percentage Share of Capital

	  	  
	
Allies Limited, Inc.

	
95.00 %

	  	  
	
S&A Operations, Inc.

	
5.00%

§ 3.6 Members Share of the Profits and Losses

The individual Members shall share in the profits and losses of Allies - Arizona, LLC according to their then percentage share of Capital.

§ 3.7 Adjustments

Nothing herein to the contrary withstanding, the rules of Internal Revenue Code §704(b) and of regulation § 1.704-1 shall be followed in determining the Members' Capital Accounts.

  

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§ 3.8 Interest

No interest shall be paid on any Contribution to the Capital of Allies - Arizona, LLC.

§ 3.9 Return of Capital Contributions

No Member shall have the right to demand the return of his Capital Contributions except as herein provided.

§ 3.10 Rights of Priority

Except as herein provided the individual Members shall have no right to any priority over each other as to the return of Capital Contributions.

§ 3.11 Distributions

Distributions to the Members of Net Operating Profits of Allies - Arizona, LLC shall be made at such times as the Members shall reasonably agree. Distributions shall be made to the Members simultaneously and in proportion to their ownership in the limited liability company.

In determining Net Operating Profits, deductions for depreciation, amortization, or other similar charges not requiring actual current expenditures of cash shall not be taken into account.

§ 3.12 Compensation

The Managing Members will not receive compensation for their management of the affairs of the limited liability company. The foregoing notwithstanding, a Managing Member may receive reasonable compensation for services rendered as an employee of the limited liability company.

Article IV

MANAGEMENT

§ 4.1 Managing Members

	
  

	
(a) The initial Managing Member shall be M. David Steier, in his capacity as President of S&A Operations.

	
  

	
(b) The Tax Matters Member shall be M. David Steier

§ 4.2 Voting

  

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Each Managing Member shall have one vote in which to cast on any matter concerning management and conduct of the business of Allies - Arizona, LLC Abstentions and refusals to act on upon any measure shall be considered as a vote in favor of the proposed measure.

§ 4.3 Rights, Powers and Restrictions of Payments

No Member without the consent of all the other Members shall:

	
  

	
(a) Do any act in contravention of this agreement;

	
  

	
(b) Do any act which would make it impossible to carryon the ordinary business of Allies - Arizona, LLC;

	
  

	
(c) Confess judgment against Allies - Arizona, LLC;

	
  

	
(d) Possess Allies - Arizona, LLC. property, or assign his Interest or rights to specific Allies - Arizona, LLC property for other than Allies - Arizona, LLC purposes.

§ 4.4 Powers

Managing Member(s) shall have the authority to exercise the powers reasonably necessary in order to pursue Allies - Arizona, LLC's purposes; provided however, that a Managing Member shall not perform the following matters without first obtaining the vote of Members owning not less than 100.00% of the Capital:

	
  

	
(a) The dissolution and winding up of Allies - Arizona, LLC.

	
  

	
(b) The sale, exchange, lease, mortgage, pledge, or other transfer of all or substantially all of the assets of Allies - Arizona, LLC.

	
  

	
(c) Merger of Allies - Arizona, LLC with another entity.

	
  

	
(d) An amendment to the Articles of Organization or this Operating Agreement.

§ 4.5 Liability

No Managing Member shall incur any liability for any mistakes or errors in judgment made in good faith and with the care an ordinary prudent person in a similar position would exercise under similar circumstances, and in a manner that the manager believes to be in the best interest of Allies - Arizona, LLC.

§ 4.6 Removal

  

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Any or all of the Managing Members and the Tax Matters Member may be removed as Managing Members or Tax Matters Member by the Members, with or without cause. For such removal to occur, a thirty (30) day notice must be given to Managing Member or Members or Tax Matters Member to be removed spelling out those acts, if any, which have caused such removal.

§ 4.7 Process

	
  

	
(a) The moving members, shall in writing, submit to all of the Members the basis upon which the removal of the Managing Member(s) and the name of another person or corporation as the proposed successor Managing Member of Allies - Arizona, LLC. If within ten (10) days after the submission of the allegation and proposal of substitution to all of the Members, the Members owning an aggregate of not less than 100.00% of the Capital approve such removal and proposed Managing Member substitution in writing, the person(s) so proposed shall be admitted as a Managing Member.

	
  

	
(b) The moving members, shall in writing, submit to all of the Members the basis upon which the removal of the Tax Matter Member and the name of another person or corporation as the proposed successor Tax Matters Member of Allies - Arizona, LLC. If within ten (10) days after the submission of the allegation and proposal of substitution to all of the Members, the Members owning an aggregate of not less than 100.00% of the Capital approve such removal and proposed Tax Matters Member substitution in writing, the person so proposed shall be admitted as the Tax Matters Member.

Article V

MEETINGS OF MEMBERS

§ 5.1 Meetings of Members

The annual meeting of Members shall be held on such date and time as shall be designated from time to time by the Members as stated in the Notice of Meeting at which they shall transact such other business as may properly be brought before the meeting. At such annual meeting the Members shall elect the Managing Members of Allies - Arizona, LLC. The Members shall nominate from their number candidates for Managing Members. Each Member shall be allowed votes equivalent to their percent of Capital at that time multiplied by the number of Managing Members being elected.

Election of a Managing Member not currently in office shall require a unanimous vote of all members. Should no unanimous vote be possible, the Managing Member then in office shall continue as Managing Member and call a special meeting within three months to elect a new Managing Member.

  

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Written notice of the annual meeting stating place, date and hour of the meeting shall be given to each Member entitled to vote at such meeting not less than ten (10) nor more than ninety (90) days before the date of the meeting.

§ 5.2 Special Meetings

Special meetings of Members, for any purpose or purposes, may be held by waiver of notice or consent or may be called by a Managing Member and shall be called by a Managing Member at the request in writing of a Member owning not less than fifty percent (50%) of the entire Capital Interest of Allies - Arizona, LLC. Such request shall state the purpose or purposes of the proposed meeting.

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) nor more than sixty (60) days before the date of the Special Meeting, to each Member entitled to vote at such meeting. The business transacted at a Special Meeting of Members shall be limited to the purposes stated in the Notice unless all of said Members agree to vote otherwise.

§ 5.3 Voting

Except as otherwise required by §4.4 and §4.7, whenever the vote of Members at a meeting thereof is required or permitted to be taken or in connection with any action, a majority of the Capital shall control and the meeting and vote of the Members may be dispensed with if the written consent of such action is obtained from Members having not less than the minimum percentage of the vote required for such action.

Article VI

MANAGING MEMBERS

§ 6.1 Vacancies

Managing Member vacancies shall be filled by a majority of the Managing Member(s) then in office (or by the remaining Members if there are no Managing Member(s) in office).

§ 6.2 Consent to Actions

A Managing Member who is either present at a meeting of the Managing Members at which action on any matter is taken, or who is absent but has notice of such action by certified mail, shall be presumed to have consented to the action taken unless his dissent shall be entered in the minutes of the meeting or unless he shall file his written dissent to such action with the person acting as the secretary of the meeting before the adjournment thereof or shall forward such dissent by a certified mail to the other

  

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Managing Members immediately after the adjournment of the meeting or within seven (7) days after written notification of such action by certified mail. The objection shall be deemed made when mailed by certified mail. Such right to dissent shall not apply to a Managing Member who voted in favor of such action.

§ 6.3 Managing Member Meetings

The Managing Members may hold meetings, both Regular Meetings and Special Meetings, either within or without the State of Nebraska. Regular Meetings of the Managing Members may be held without notice at such time and at such place as shall from time to time be determined by the Managing Members.

Special Meetings of the Managing Members may be called by any Managing Member on one (I) day's notice to each Managing Member, either personally or by mail, or by telegram; Special Meetings shall be called by the secretary in like manner and on like notice on the written request by two (2) of the Managing Members.

At all meetings of the Managing Members, a majority of the Managing Members shall constitute a quorum for the transaction of business and the act of a majority of the Managing Members present at any meeting at which there is a quorum shall be the act of the Managing Members. If a quorum shall not be present at any meeting, the Managing Members there at may adjourn the meeting from time to time, without notice other than announcement at the meeting until a quorum shall be present. Any action required or permitted to be taken at any meeting of the Managing Members thereof may be taken without a meeting, if the Managing Members who have the necessary votes to take such action consent in writing.

Managing Members may participate in a meeting by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other and participation in a meeting pursuant to this section shall constitute presence in person at such meeting.

The Managing Member(s) each year, may elect from their number a president. The term of office shall be one year or until the respective successor is chosen, but the president may be removed from office, with or without cause. The president shall execute all authorized conveyances, contracts, or other obligations in the name of ALLIES - ARIZONA, LLC.

§ 6.4 Tax Matters Member

The original Tax Matters Member shall be succeeded upon death or unwillingness or inability to act and shall be determined by the Managing Members.

The Tax Matters Member shall have the following rights and duties:

  

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(1)

	
To provide to the Internal Revenue Service any or all information which is within the knowledge of the Tax Matters Member as to the organization, operation and/or liquidation of Allies - Arizona, LLC.

	
  

	
(2)

	
To adjust, arbitrate, negotiate, compromise, sue or defend, abandon, or otherwise deal with and settle any and all claims in favor of or against Members and Allies - Arizona, LLC as the Tax Matters Member shall deem proper which shall directly relate to the organization, operation and/or liquidation of Allies - Arizona, LLC.

	
  

	
(3)

	
Do all other things which may be granted to the Tax Matters Member by Internal Revenue Code §§ 6221-6232, as they may be now or hereinafter amended and supplemented.

Article VII

RIGHT TO ASSIGN INTEREST

§ 7.1 Members Right of Assigmnent of Profits and Losses

Except as herein provided, a Member's Interest in Allies - Arizona, LLC shall not be assigned, sold, pledged or otherwise transferred or encumbered in any manner or by any means whatever to any non-member.

The Members shall not sell, assign, pledge or otherwise transfer or encumber in any manner or by any means whatever, except to a living trust or revocable trust, any share in all or any part of the Interest of Allies - Arizona, LLC now owned or hereafter acquired by them without having first obtained the unanimous consent of the other Members in accordance with the terms and conditions of this agreement. Such assignment without unanimous consent does not entitle the assignee to participate in the management and affairs of Allies - Arizona, LLC or to become or to exercise any rights of a Member. Such assignment without unanimous consent entitles the assignee to receive, to the extent assigned, only the Distribution to which the assignor would be entitled.

§ 7.2 Substitution of Additional Members

Nothing herein to the contrary withstanding, the assignee of the whole or any part of the Membership Interest shall not be substituted as a Member without prior written unanimous consent of the Members. In no event shall the consent of the Members be given unless such assignee, as a condition precedent to such consent has:

	
  

	
(a) Accepted and assumed in a form satisfactory to the Managing Members, all terms and provisions of this Agreement;

  

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(b) And if the assignee is a corporation, provide a certified copy of a resolution of the board of directors to the Managing Members;

	
  

	
(c) And executes such other documents or instruments as may be required in order to effectuate its admission as a Member; provided an opinion of counsel in form and substance satisfactory to counsel for Allies - Arizona, LLC that neither the offering nor the assignment of Membership Interest violates any provisions of the federal or state securities law and executed a statement that he is acquiring his Interest in Allies - Arizona, LLC for his own account for investment, not with a view to sale or distribution thereof;

	
  

	
(d) And executed such other documents or instruments as the Managing Members may reasonably require in order to effectuate the admission of such assignee as a Member.

§ 7.3 New Members

There shall be no right to admit new Members, except by unanimous consent of all of the Members.

In no event shall the consent of the Members be given unless such new Member, as a condition precedent to such consent has:

	
  

	
(a) Accepted and assumed in a form satisfactory to the Managing Members, all terms and provisions of this agreement;

	
  

	
(b) And if the new Member is a corporation, provide a certified copy of a resolution of the board of directors to the Managing Members;

	
  

	
(c) And executes such other documents or instruments as may be required in order to effectuate its admission as a Member; provided an opinion of counsel in form and substance satisfactory to counsel for Allies - Arizona, LLC that neither the offering nor the assignment of Membership Interest violates any provisions of the federal or state securities law and executed a statement that he is acquiring his Interest in Allies - Arizona, LLC for his own account for investment, not with a view to sale or distribution thereof;

	
  

	
(d) And executed such other documents or instruments as the Managing Members may reasonably require in order to effectuate the admission of such assignee as a Member and;

  

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§ 7.4 Sale of Membership Interests

No Member shall be permitted to sell, assign, or transfer any Membership Interest without the unanimous consent of all other Members. Allies - Arizona, LLC shall not recognize any sale, transfer, or assignment whether by voluntary act or by operation law. Should any such transfer be approved by the members, Allies-Arizona, LLC shall, operating as a right of first refusal, have the right to redeem the ownership of the selling member at a price equal to the lesser of an independent appraisal or the negotiated purchase price with a third party for said interest.

Article VIII

LIQUIDATION OF ALLIES - ARIZONA, LLC AND

MEMBERS' INTEREST

§ 8.1 Dissolution

Allies - Arizona, LLC shall be dissolved and its affairs shall be wound up by the then Managing Members upon the happening of the first of the following events:

	
  

	
(1) The unanimous written consent of the Members; or

	
  

	
(2) The death, retirement, resignation, expulsion, Bankruptcy, or dissolution of a Member or occurrence of any other event, except assignment of a Membership Interest voluntarily or by operation of law, that terminates the continued membership of a Member in Allies - Arizona, LLC unless the business of Allies - Arizona, LLC is continued by the unanimous consent of the remaining Members of which there are at least two (2);

In the event that Allies - Arizona, LLC shall hereafter be dissolved for a reason set forth herein or any other reason whatsoever, the then Managing Members shall deliver a statement of intent to dissolve with the Office of the Nebraska Secretary of State and take such other action as is required by the Act to dissolve and wind up the affairs of Allies - Arizona, LLC.

§ 8.2 Articles of Dissolution

Upon completion of the winding up of Allies - Arizona, LLC articles of dissolution shall be delivered to the Secretary of State. The winding up of Allies Arizona, LLC shall be completed when all debts, liabilities and obligations of Allies Arizona, LLC have been paid and discharged or reasonably adequate provision has been made, and all the remaining property and assets of Allies - Arizona, LLC has been distributed to the Members in proportion to the Member's ownership interest. The articles of dissolution shall contain such information as required by the Act.

  

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Article IX

MISCELLANEOUS SUBSTANTIVE PROVISIONS

§ 9.1 Purpose

Allies - Arizona, LLC's business and purpose shall consist solely of the acquisition, ownership, operation and maintenance of a membership interest in Gilbert Business Park Properties, LLC, an Arizona Limited Liability Company and activities incidental thereto.

§ 9.2 Emergency Acquisition

The Members specifically agree that should the properties owned by Gilbert Business Park Properties, LLC as described generally in Section 10.11 of this Agreement be foreclosed upon, S&A Operations shall have the option to purchase the entirety of Allies Limited, Inc's interest in the Company for a purchase price of one hundred thousand dollars ($100,000.00).

The Members specifically agree that in the event that any bank financing the properties owned by Gilbert Business Park Properties, LLC as described generally in Section 10.11 of this Agreement attempt to collect on any personal guarantees made as a part of Gilbert Business Park Properties LLC's acquisition of the aforementioned properties, S&A Operations shall have the option to purchase the entirety of Allies Limited, Inc's interest in the Company for a purchase price of one hundred-thousand dollars ($100,000.00).

The Members specifically agree that in the event S&A Operations and/or its president, M. David Steier is removed from office as Manager of ALLIES - ARIZONA, LLC, S&A Operations shall have the option to purchase the entirety of Allies Limited, Inc's interest in the Company for a purchase price of one hundred-thousand dollars ($100,000.00).

§ 9.3 Powers and Duties

Notwithstanding any other provisions of these Articles, the Manager and Members shall have no authority on behalf of Allies - Arizona, LLC to:

	
  

	
(i) incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation), without unanimous consent of the members;

	
  

	
(ii) seek the dissolution or winding up, in whole or in part, of Allies - Arizona, LLC;

	
  

	
(iii) merge into or consolidate with any person or entity or dissolve, terminate or liquidate, in whole or in part, transfer or otherwise dispose of all or substantially all of its assets or change its legal structure; or

  

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(iv) without the unanimous consent of Allies - Arizona, LLC's Members tile a voluntary petition or otherwise initiate proceedings to have Allies Arizona, LLC adjudicated bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against Allies Arizona, LLC, or file a petition seeking or consenting to reorganization or relief of Allies - Arizona, LLC as debtor under any applicable federal or state law relating to bankruptcy, insolvency, or other relief for debtors with respect to Allies - Arizona, LLC; or seek or consent to the appointment of any trustee, receiver, conservator, assignee, sequestrator, custodian, liquidator (or other similar official) of Allies - Arizona, LLC or of all or any substantial part of the properties and assets of Allies - Arizona, LLC, or make any general assignment for the benefit of creditors of Allies Arizona, LLC, or admit in writing the inability of Allies - Arizona, LLC to pay its debts generally as they become due or declare or effect a moratorium on Allies - Arizona, LLC debt or take any action in furtherance of any such action.

§ 9.3 Checks

All checks or demands for money and notes of Allies - Arizona, LLC shall be signed by the Managing Member(s) or by those designated from time to time.

§ 9.4 Conflicts of Interest

Members may engage in or possess interest in other business ventures of every kind and description for their own accounts. Neither Allies - Arizona, LLC, nor any of the Members, shall have any rights by virtue of this agreement in such independent business ventures, or to the income or profits derived there from.

§ 9.5 Use of Name

The name" Allies - Arizona, LLC" shall belong to and may be used by Allies Arizona, LLC and shall not be sold or disposed of so long as Allies - Arizona, LLC shall continue in existence. In the event of the death, retirement, or withdrawal of any of the Members during the term of Allies - Arizona, LLC, the deceased, retiring or withdrawing Member shall have no interest in the firm name and shall have no right to receive any payment therefore.

  

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Article X

MISCELLANEOUS

§ 10.1 Execution and Counterpart

This Operating Agreement may be executed in any number of counterparts, each of which shall be taken to be an original. Valid execution shall be deemed to have occurred when an Operating Agreement signature page is executed by the Member in question and countersigned by a Managing Member.

§ 10.2 Indemnification

Allies - Arizona, LLC shall indemnify any person who has made, or threatened to be made, a party to any action, suit or proceeding (whether civil, criminal, administrative or investigative, including but not limited to any tax matters) by reason of the fact that he, his testator or intestator, is or was a manager, employee or agent of Allies - Arizona, LLC or who serves or served any other enterprise at the request of Allies - Arizona, LLC to the extent to which such Member was not acting with gross negligence or willful or wanton disregard of either this Operating Agreement or of the criminal statutes. Provided, however, that any indemnity under this section shall be provided out of and to the extent of Allies - Arizona, LLC assets only, and no Member shall have any personal liability with regard to said indemnity.

§ 10.3 Notice

Any and all notices provided for herein shall be given in writing by registered or certified mail, return receipt requested, which shall be addressed to the last address known to the sender or delivered to the recipient in person.

§ 10.4 Amendments

No amendment of this Agreement shall be valid unless such amendment is in writing and signed by all then current Members. This Agreement may be altered at any time by the decision of Members holding not less than one hundred percent (100%) of the then Capital of Allies - Arizona, LLC confirmed by an instrument in writing, which instruments the Members hereby agree to execute.

§ 10.5 Additional Instruments

This Agreement shall be binding upon the parties hereto and upon their heirs, executors, administrators, successors or assigns and the parties hereto agree for themselves and their heirs, executors, administrators, successors and assigns to execute and any instruments in writing which are or may become necessary and proper to carry out the purpose and intent of this Agreement.

  

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§ 10.6 Titles and Subtitles

Titles of the paragraphs and subparagraphs are placed herein for convenient reference only and shall not to any extent have the effect of modifying, amending or changing the express terms and provisions of this Operating Agreement.

§ 10.7 Words and Gender or Number

Words and gender or number as listed herein, unless the context clearly indicates the contrary, the singular number shall include the plural, the plural the singular, and the use of any gender shall be applicable to all genders.

§ 10.8 Severability

In the event any parts of this Agreement are found to be void, the remaining provisions of this Agreement shall nevertheless be binding with the same effect as though the void parts were deleted.

§ 10.9 Waiver

No waiver of any provisions of this Agreement shall be valid unless in writing and signed by the person or party against whom charged.

§ 10.10 Applicable Law

This Agreement shall be subject to and governed by the laws of the State of Nebraska.

§ 10.11 Appointment of Special Officer

The Members do hereby appoint either M. David Steier for the special purpose of executing on behalf of the Members and Managers of Allies - Arizona, LLC all documents required or necessary for obtaining an interest in Gilbert Business Park Properties, LLC, an Arizona limited liability company. M. David Steier in his capacity as President of S&A Operations, Manager of ALLIES - ARIZONA, LLC, shall have the authority to bind the Company as a member of Gilbert Business Park Properties, LLC, and that M. David Steier shall be held harmless for any liability arising from the execution of the necessary documents and/or any transfer of required monies to Gilbert Business Park Properties, LLC as a capital contribution to that limited liability company.

It is understood by all parties, Gilbert Business Park Properties, LLC fonned under the law of Arizona primarily to obtain, hold, and manage an interest in the following described properties:

963 North Gilbert Road (approx. 7,769 sq ft)

City of Gilbert, State of Arizona

  

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971 North Gilbert Road (approx. 62,775 sq ft)

City of Gilbert, State of Arizona

979 North Gilbert Road (approx. 7,769 sq It)

City of Gilbert, State of Arizona

IN WITNESS WHEREOF, the parties executed this Agreement on the date first above written.

	  	
MEMBERS

	  	  
	  	
S&A OPERATIONS, INC.

	  	  
	  	
/s/ M. David Steier

	  	
M. David Steier, President

	  	  
	  	
ALLIES LIMITED, INC.

	  	  
	  	
/s/ Kenneth J. Hager

	  	
Kenneth J. Hager, President

  

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ALLIES - ARIZONA, L.L.C.

SCHEDULE "A"

	
Name

	
Property

	
Value

	
S&A Operations, Inc.

	
Services

	
$ 5,263

	
Allies Limited, Inc.

	
Cash

	
$ 100,000

 

 

 

  

18allies_ex10-6.htm

ALLIES LIMITED

BUSINESS PLAN

2010

  

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ALLIES LTD

	
FRESH IDEAS & SOUND INVESTMENTS

TABLE OF CONTENTS

	  	
PAGE

	
COMPANY OVERVIEW

	
3

	
   Company Registration

	
3

	
Business Concept

	
3

	
Management Profiles

	
4

	
Core Competencies

	
4

	
Current Status of Company

	
5

	
SERVICE OVERVIEW

	
6

	
Service Description

	
6

	
Company Advantages

	
6

	
INDUSTRY OVERVIEW

	
8

	
Key Players

	
9

	
Transaction of Business

	
9

	
Competition

	
9

	
Size and Growth of Industry

	
9

	
Barriers to Entry

	
9

	
Government Regulation

	
9

	
Risk Factors

	
11

	
THE ORGANIZATION

	
10

	
Organizational Overview

	
 10

	
Management

	
10

	
Site and Facility

	
10

	
Start-up and Regulatory Requirements

	
12

	
MARKETING

	
12

	
Goals/ Objectives/ Strategies

	
13

	
Target Business Segments

	
13

	
Market Size/ Market Share/ Market Potential

	
14

	
Competitor Overview

	
15

	
S.W.O.T. Overview

	
16

	
OPERATIONS

	
16

	
Site & Facility

	
16

	
Training and Development

	
16

	
Vendor Relationship Management

	
16

	
Customer/Client Service

	
16

	
Research and Development

	
16

	
Compliance

	
16

	
Disaster Recovery

	
16

	
Document Management

	
16

	
FINANCIAL STATEMENTS

	
18

	
EXIT STRATEGY

	
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1.0

	
COMPANY OVERVIEW

 

[1.1]           COMPANY REGISTRATION

Name of Company: Allies Limited

State or Jurisdiction of Incorporation:  Nevada

Date of Incorporation:  July 23rd, 2009

Type of Corporation: C

Primary Industrial Classification Code #:  6798

Headquarters Location:  12020 Shamrock Plaza/ Suite 220/ Omaha Ne. 68154

Primary Contact Phone #:   402.778.4844

Website:   www.allieslimited.com

Brand Names/ Trade Names/ Subsidiaries:  Na

[1.2]           BUSINESS CONCEPT

[1.2.1]           Vision

Allies Limited hopes to sponsor and manage a variety of investments, worldwide, in private equity and potential debt transactions on behalf of third-party investors and our own firm.

 Allies Limited hopes to be a global firm with private equity experience, in-depth industry knowledge, sophisticated processes for growing and improving businesses, and to develop a strong culture committed to teamwork and sharing information across offices in the U.S., Europe, Asia, and Australia

Allies Limited hopes to sponsor and manage funds and accounts that make investments in fixed income and other strategies.  We also look to engage in capital markets transactions and other activities that capitalize on the experience and knowledge that we have accumulated throughout our management’s past history.

[1.2.2]           Mission

Allies Limited’s mission as a preeminent private equity and venture capital firm is to create exceptional returns for its shareholders and portfolio companies.

[1.2.3]           Business Model

Allies Limited will earn revenues in a variety of ways including earning ongoing management fees for providing networking, management, consultation, and other services to our holding companies management, as well as transaction, monitoring and other potential fees in connection with our private equity and other investments.  We will selectively pursue opportunities to develop new investment structures and products that we believe will help us increase the amount of managed capital that we are able to commit to individual transactions, grow our assets under management and capture additional income streams and value for shareholders.  Allies Limited may partner with VC and Private Equity firms to participate and co-fund early stage companies which, over time, will add significant value to Allies Limited shareholders.

  

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[1.4]           MANAGEMENT PROFILES

The management team has a vast expertise in a variety of industries including emerging technology, commercial real estate, the securities industry and corporate finance.

Real Estate Portfolio Manager and President, Allies Limited

Dr. Kenneth Hagen has over 30 years of extensive experience in early-stage company formation and capitalization.  Dr. Hagen founded a dental practice in 1978 that quickly developed into a multi-doctor, multi-location dental group; Family Dental Associates, Summit Dental Associates PC and Umbrella Real Estate LLC.  After divesting of these, he co-founded Price/Hagen Investments, a registered investment advisory firm in Omaha Ne., became licensed and co-hosted a top regional financial talk show associated with the firm.  Since 2001, he has continued to participate in real estate investments and development with Maple Valley LLC.

 

New Media and Investment Strategies Portfolio Manager, Vice President, Allies Limited

Ted Price (Pysh) brings over 4 decades of business development, sales and marketing expertise to Allies Limited.  Mr. Price manages the corporate sales and marketing of Allies Ltd.  Mr. Price’s experience in these areas began over 25 years ago when he founded and managed (1984-1996) a highly successful Marketing and Consulting firm called Price Marketing Group.  The company provided marketing and advertising consultation and solutions to a variety of businesses on a local, regional, and national level.  Mr. Price then co-founded Price/Hagen Investments and served with Dr. Hagen until 1999 when he assumed the position of President of an early-stage securities firm; R.J. Thompson Securities (a.k.a rjt.com).

Mr. Price successfully facilitated the capitalization of rjt.com with $15 million through the initial series A & B investment rounds.  As President of the firm, Mr. Price was responsible for all of the strategic sales and marketing of the firm including managing advertising and marketing relationships with CNBC, MSNBC, Barron’s, industry analysts and other public relations and media.

Additionally, Mr. Price helped orchestrate the successful sale of rjt.com to TD Waterhouse in 2001 for $93 million.

Mr. Price is on the Board of Directors and CEO for a weight loss chain.  As with rjt.com, he was responsible for its initial capitalization and led corporate growth with strategies including the development and implementation of a franchise program leading to franchise locations in several states including Nebraska, Florida, Iowa, Illinois, California, and Michigan.

[1.5]           CORE COMPETENCIES

Allies Limited core competencies include but are not limited to:

	
  

	
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Extensive experience and background in real estate development

Allies Limited management has many years in real estate development and is exceptionally competent in recognizing development opportunities with the potential for significant and near-term appreciation.

  

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Ø

	
Extensive experience and background in early-stage company formation and capitalization

Allies Limited personnel includes individuals who are experienced and adept in the discovery and due-diligence of ‘start-up’ and ‘second-stage’ (primarily new technology) firms with the potential to have exponential growth and viral expansion over relatively short time spans.  Management of Allies Limited has a 20 year history of raising multiple funds and has received approximately $50 million of capital from investors for management and investment in past fund ventures not affiliated with Allies Ltd.

	
  

	
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Marketing and strategic partnering

Allies Limited is strategically networked with investors, business leaders, the media and other venture capital groups.  These connections will facilitate the promotion of Allies holdings.

	
  

	
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Sound investment generation strategies

Out internal investment strategies and our constantly growing network of business relationships, provide us with an important source of proprietary investments and give us an advantage in sourcing investments in a variety of leading and growing companies.

[1.6]           LOCATION(S)

Allies Limited has offices at 12020 Shamrock Plaza/ Suite 200/ Omaha, Ne. 68154

[1.7]           CURRENT STATUS OF COMPANY

[1.7.1]           Development

We are selectively pursuing opportunities to develop new investment structures and products that we believe will help us increase the amount of managed capital that we are able to commit to individual transactions, grow our assets under management and capture additional income streams and value for shareholders.

 [1.7.2]                      Financial

We are a start-up stage company that is actively soliciting new investments via sales presentations to accredited individuals.  In addition, an S-1 has been filed with the SEC in anticipation of a direct public offering of Allies Limited common stock.  The shares are targeted to be traded on the OTC Bulletin Board.  Allies Limited does not have any debt at this time.

[1.7.3]           Personnel

Currently there is one full-time employee.  There are no employment agreements in effect.

[1.8]           PATENTS, TRADESMARKS, COPYRIGHTS

The company does not currently have any registered patents or trademarks

  

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2.0

	
SERVICES OVERVIEW

[2.1]           SERVICE DESCRIPTION

Allies Limited is a VC private equity firm acquiring interests in commercial real-estate and industry-leading companies.  We partner with entrepreneurs who have the energy, vision, experience and passion to build great companies and help to grow them into thriving, sustainable and profitable enterprises through hands-on advice and support.

[2.2]           ALLIES LIMITED ADVANTAGES

Our internal investment generation strategies and our constantly growing network of business  relationships, provide us with an important source of proprietary investments and give us an advantage in sourcing investments in a variety of leading and growing companies.

Sourcing Advantages

	
  

	
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Industry team focus

	
  

	
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Direct contacts with business leaders

	
  

	
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Strong relationships with financial institutions, the media, investors, and other VC firms

Value Creation Advantages

	
  

	
Ø

	
Operationally focused investment professionals

	
  

	
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Current and future Allies Ltd. Portfolio companies

	
  

	
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Focused value-creation process with detailed 100-day planning

3.0           INDUSTRY OVERVIEW

[3.1]           INDUSTRY BACKGROUND

The history of private equity and venture capital and the development of these asset classes have occurred through a series of boom and bust cycles since the middle of the 20th century. Within the broader private equity industry, two distinct sub-industries, leveraged buyouts and venture capital experienced growth along parallel, although inter-related tracks.  The industry that is today described as private equity was conceived by a number of corporate financiers, most notably Jerome Kohlberg, Jr. and later his protégé, Henry Kravis. Working for Bear Stearns at the time, Kohlberg and Kravis along with Kravis' cousin George Roberts began a series of what they described as "bootstrap" investments targeting family-owned businesses, many of which had been founded in the years following World War II.

Private equity firms began to emerge out of the investment banking industry around 1982.  Since that time, literally hundreds of private equity firms have been instituted in the U.S. alone.  More than $551 billion dollars of capital has been raised and re-invested by these firms since 2002.

The largest of these is the Carlyle Group with $86.1 billion of assets under management committed to 64 funds as of June 30, 2009 and Kohlberg Kravis Roberts (KKR) with $58 billion.  It is a rapidly maturing industry and mega acquisitions are made almost every business day by these firms.

  

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Private equity plays a major role in our economy and is key to the expansion of businesses and the creation of new goods and services alike. Companies seek private equity funding for multiple reasons. Not only do private equity investors provide cash to a company, but they provide much needed guidance, experience, industry expertise, and placement of top executives, financial engineering, and other skill sets to help companies advance through their growing pains.

 [3.2]           KEY PARTICIPANTS Overview

               SHAREHOLDERS

 

    Revenue

[3.3]           THE TRANSACTION OF BUSINESS

Among the most common investment strategies in private equity includes leveraged buyouts (LBO), venture capital, growth capital, distressed investments and mezzanine capital.  Many times investments are short in nature.

Leveraged buyouts involve a financial sponsor agreeing to an acquisition without itself committing all the capital required for the acquisition.  To do this, the financial sponsor will raise acquisition debt which ultimately looks to the cash flows of the acquisition target to make interest and principal payments.  Acquisition debt in an LBO is often non-recourse to the financial sponsor and has no claim on other investment managed by the financial sponsor.  Therefore, an LBO transaction’s financial structure is particularly attractive to a fund’s limited partners, allowing them the benefits of leverage but greatly limiting the degree of recourse of that leverage.   This kind of financing structure benefits an LBO’s financial sponsor in two ways: (1) The investor itself only needs to provide a fraction of the capital for the acquisition, and (2) the returns to the investor will be enhanced (as long as the return on assets exceeds the cost of the debt).

  

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[3.4]           COMPETITORS

The competition in the industry comes from being the first to find and secure the capital necessary to make attractive acquisitions in either commercial real estate or, in the specific business plan of Allies Limited, ‘start-up’ high technology firms with the potential of significant returns on investment in relatively short time cycles.

Other private equity firms, especially the more mature, will initially have significantly more capital and more extensive resources to find and acquire promising opportunities than Allies Ltd.  However, the supply of promising companies with defensible business plans and commercial real estate buying opportunities are numerous throughout the economy.  Initially, Allies has and will focus on smallish acquisitions ($10 million or less) in order to buff up its asset portfolio and avoid fierce competition from more mature organizations.

As we grow in acquisitions and capital, Allies will then be better prepared to compete in the Fortune 500 market.

As mentioned, two of the largest private equity groups include the Carlyle Group and Kohlberg Kravis Roberts (KKR).  The Carlyle Group is a global private equity firm with $86.1 billion of assets under management committed to 64 funds as of June 30, 2009. Carlyle invests in buyouts, growth capital, real estate and leveraged finance in Africa, Asia, Australia, Europe, North America and South America focusing on aerospace & defense, automotive & transportation, consumer & retail, energy & power, financial services, healthcare, industrial, infrastructure, technology & business services and telecommunications & media. Since 1987, the firm has invested $56.3 billion of equity in 920 transactions for a total purchase price of approximately $229.1 billion. The Carlyle Group employs more than 875 people in 20 countries. In the aggregate, Carlyle portfolio companies have more than $109 billion in revenue and employ more than 415,000 people around the world.

Kohlberg Kravis Roberts & Co. (commonly referred to as KKR) is a New York City based private equity firm that sponsors and manages investment funds, focusing primarily on leveraged buyouts of mature businesses. Since inception, the firm has completed over $400 billion of private equity transactions and was one of the pioneers of the leveraged buyout industry.  KKR invests primarily through leveraged buyouts as well as growth capital investments (including "PIPE" investments in public companies). It specializes in private equity investments with a focus on specific industry sectors where the firm has created nine dedicated investment groups.  As of the end of 2008, KKR had completed fund-raising for approximately 14 traditional investment funds in the US, Europe and Asia with total committed capital of approximately $58 billion.

[3.5]           SIZE AND GROWTH FACTORS OF THE INDUSTRY

 Venture capital, as an industry, originated in the United States and American firms have traditionally been the largest participants in venture deals and the bulk of venture capital has been deployed in American companies. However, increasingly, non-US venture investment is growing and the number and size of non-US venture capitalists have been expanding.

  

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In the year of 2008, while the Venture Capital fundings were still majorly dominated by U.S. (USD 28.8 B invested in over 2550 deals in 2008), compared to International fund investments (USD 13.4 B invested in everywhere else), there have been an average 5% growth in the Venture capital deals outside of the U.S- mainly in China, Europe and Israel.  Geographical differences can be significant. For instance, in the U.K., 4% of British investment goes to venture capital, compared to about 33% in the U.S

 

[3.6]           BARRIERS TO ENTRY

The Private Equity industry is actually very dynamic, with low barriers to entry.  Anyone with decent contacts and a few thousand dollars for legal and regulatory fees can set up his own hedge fund or private equity fund and begin trading.  However, the key to success lies in finding and executing an opportunity, attracting large amounts of capital from investors and posting strong investment returns.   It’s often difficult for new or small funds to be successful in both producing strong investment returns and attracting institutional capital to reach critical mass.  Because the competition for finding deals is so fierce, it means that winning the deal in the first place may be difficult.

Despite the low barriers to entry, it’s often difficult for new participants to stay alive. The private equity or alternative investment business is very competitive and investors demand strong returns that are not correlated to traditional equity markets.  Private equity investments are more illiquid than traditional investments.

 

 [3.7]           GOVERNMENT AND INDUSTRY REGULATION

 

 

None at this time

 

 

[3.8]           RISK FACTORS

Some of the risks that may exist include those associated with start-up companies.

 [3.9]           FINANCIAL NORMS AND PATTERNS

As a percentage of the purchase price for a leverage buyout target, the amount of debt used to finance a transaction varies according to the financial condition and history of the acquisition target, market conditions, the willingness of lenders to extend credit (both to the LBOs financial sponsors and the company to be acquired) as well as the interest costs and the ability of the company to cover those costs.  Historically the debt portion of an LBO will range from 60-90% of the purchase price, although during certain periods the debt ratio can be higher or lower than the historical averages.  From 2000-2005, debt averaged between 59.4% and 67.9% of total purchase price for LBOs in the US.

  

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4.0           THE ORGANIZATION

	
[4.1]     ORGANIZATIONAL INFRASTRUCTURE

 

Executive Committee

Executive VP Secretary - Ted Price (Holding Co.Marketing & Sales Division) & (New Media & Technology Division)

Managing Director Private Equity - David Steiers        

CEO/President/Treasurer - Dr. Kenneth Hagen (Operations) & (Commercial Real  Estate Division)

 

[4.2]           MANAGEMENT

[4.2.1]           Directors, Advisory Board, Executive Officers

Number of Directors:   [2]   (Elected annually)

Number of Outside Directors:  [none]

Executive Officers:

Name: Kenneth James Hagen Jr. DDS

Address: Omaha Ne.

Title(s): Director of Allies Limited/ CEO/ President/ Treasurer

Name: Ted Price

Address: Omaha Ne.

Title(s) Director of Allies Limited/ EVP/ Secretary

[4.2.2]           Key Positions and Responsibilities

Real Estate Portfolio Manager

Primary responsibilities include the ongoing monitoring/management of the existing portfolio in addition to due-diligence in the evaluation of new candidate properties.

  

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New Media and Investment Strategies Portfolio Manager

These individuals utilize their network of institutional investors, high net-worth investors, financial institutions and other VC groups to market the company’s  ‘holding companies’ and real estate to increase valuation and to raise venture capital to fund current and future investments.  This group is synergistically connected with other networked individuals that will facilitate the promotion of Allies Holdings

Start-up Consultation

This division includes individuals who are experienced and adept at providing support, assistance and advice to ‘start-up’ and ‘second-stage’ firms

[4.3]           CORPORATE GOVERNANCE

Allies Limited’s corporate governance principles includes key elements of honesty, trust and integrity, openness, performance orientation, responsibility and accountability, mutual respect, and commitment to the organization.  That said, Allies’ internal system of structuring, operating and controlling a company with a view to achieve long-term strategic goals, encompasses policies, processes and people, which serve the needs of shareholders and other stakeholders, by directing and controlling management activities with good business savvy, objectivity, accountability and integrity.

Allies Limited’s principles of corporate governance include:

	
  

	
Ø

	
The rights and equitable treatment of shareholders

	
  

	
Ø

	
Interests of other stakeholders

	
  

	
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A Board of Directors with a skill-set and understanding to be able to deal with various business issues

	
  

	
Ø

	
Integrity and ethical behavior

	
  

	
Ø

	
Disclosure and transparency

Issues that our corporate governance policies will be addressing include:

	
  

	
Ø

	
Internal controls, internal auditors and quality of audits

	
  

	
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Oversight and management of risk

	
  

	
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Oversight of the preparation of the entity’s financial statements

	
  

	
Ø

	
Resources made available to directors in order to carry out their business

	
  

	
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Dividend policy

[4.4]           COMPENSATION/ INCENTIVES/ BENEFITS/ AGREEMENTS

Compensation

At this time only one employee is receiving a salary.  No compensation is being offered to any other persons, officers, or directors.

Incentives

 Currently there are no other stock option plans, retirement, pension, or profit sharing plans for the benefit of our officers/directors, this includes long-term incentive plans (LTIP).  There was however, an award of ‘founders’ stock which was issued for services to the founders.

Employment Contracts

There are no employment agreements at this time

[4.5]           HUMAN RESOURCE ADMINISTRATION

This is comprised of policies, standards, procedures on all things HR, including documentation.

  

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[4.6]           SITE AND FACILITY CRITERIA

There are no special or unique site or facility requirements (e.g. physical structure, data storage, power etc) necessary for Allies Limited to conduct its business other than traditional office functionality.

[4.7]           REGULATORY REQUIREMENTS

Government and Industry Regulation

None at this time

Environmental Laws

The company’s operations currently have no material effect on the environment

6.0           MARKETING

[6.1]           FORWARD- LOOKING STATEMENTS

[6.1.1]           Commercial Real Estate

Allies Limited specializes in identifying positive cashflow properties in a declining market that we believe we have bought, or can buy, at extraordinary discounts to current market prices.  Given this scenario the upside for these acquisitions is significant.  Currently Allies owns class ‘A’ commercial property in Phoenix valued at $8.3 million. (See item overview in appendix)

 

[6.1.2]           High-growth, new technology companies

Allies Limited has actively engaged in the discovery and due-diligence of acquiring ‘start-up’ and ‘second-stage’ (primarily new technology) firms with the potential to have exponential growth and viral expansion over relatively short time spans.  These start-ups generally are in need of fresh capital to bring their projects to fruition.  Allies Limited intends to provide capital for these firms in return for significant equity and managerial consultation.

 In particular, Allies Limited has secured a 40% stake in a leading-edge technology company called Salus Novus Inc. and its brand called ‘Tellisaac’.  Tellisaac is a personal health platform (PHP) merging technology and social networking to provide users a unique peer-to-peer experience sharing and accessing comprehensive health-related content and life-management services.  The web-based system provides information, research, and tools built into a proprietary database designed to empower the user to actively engage with its peers.   By utilizing a viral marketing approach and targeting individuals with ‘high social networking potential’ (SNP), Salus Novus expects to generate over a million users in the near-term and capitalize on ‘ad-click’ revenue.

In addition, a business-to-business (B2B) division will market information to pharmaceutical companies, universities, and government entities.   Given that pharmas spend millions of dollars on information, this will also be a lucrative revenue stream.

Given these notable acquisitions:

	
  

	
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Microsoft purchased a 1.6% stake in Facebook for $240 million, reportedly to gain exclusive advertising rights.

	
  

	
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Myspace was acquired by NewsCorp for nearly $500 million

	
  

	
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Mint.com with only 1.6 million users and less than 36 months old, was acquired by Intuit for $170 million.

  

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 Tellisaac with its plan for garnering 1 million users in the first several months, is well positioned to be acquired  within 24 months for well into 9 figures.

To maximize the value of our shares,  Allies Limited will be engaging, on a regular basis, its network of contacts in media through the use of press releases, phone calls, emails, and other media  channels, to bring full attention to Allies Limited and its portfolio companies, thereby enhancing the valuation of Allies and facilitating additional investment.

 

[6.1.3]           The Shelf (a.k.a. Aged) corporation and its symbol

In anticipation of Allies Limited receiving a stock symbol, the corporate entity’s value will increase significantly, potentially as high as six-figures.  This could be marketed at some time as applicable.

[6.2]           GOALS/ OBJECTIVES/ STRATEGIES

[6.1.1]           Goals/Objectives

	
Ø

	
Grow value for our shareholders and portfolio companies

	
Ø

	
Increase the market capitalization of the company

	
Ø

	
Work with our acquisition’s management to support, assist and advise with the intent to grow them into thriving, sustainable and profitable enterprises

	
Ø

	
Take Allies Limited public

	
Ø

	
Establish balance, order flow, and a healthy marketplace for our Allies shareholders

 [6.1.2]                      Strategies

	
Ø

	
Create industry specific funds (e.g. Commercial Real Estate Fund/ New Media Technology Fund)

	
Ø

	
Actively promote our firm and the ‘holding’ companies that comprise our portfolio funds

	
Ø

	
Focus on businesses with existing cash-flows in commercial real estate and high-growth emerging  markets

	
Ø

	
Partner with other institutional investors and private equity groups to increase our opportunities

	
Ø

	
Acquire assets through corporate divestiture transactions

	
Ø

	
Partner with early-stage and family-owned businesses and strategic buyers

	
Ø

	
Purchase and grow companies through industry-consolidation strategies

	
Ø

	
Prior to investing, identify the measures we will take to create new value for Allies shareholders and stakeholders (a.k.a. 100-Day Plans)

	
Ø

	
Work with a variety of service providers to ensure the continued growth and success of the firm

	
Ø

	
Utilize a variety of research and analytic tools to better manage portfolio investments and provide substantive intelligence to our team members

	
Ø

	
Provide optimum support, assistance, and advice to our portfolio companies

	
Ø

	
Utilize a distressed debt strategy (a.k.a. loan-to-own) by assuming defaulted commercial loans

	
Ø

	
Apply for listing to trade publicly on the Over the Counter Bulletin Board (OTCBB)

	
Ø

	
Promote the security to the general public, brokers, market makers and institutions

  

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[6.2]           TARGET BUSINESS SEGMENTS (Principal Services and their Markets)

Allies Limited will be separated into several distinct divisions and personnel for specific business sectors.  There will be a commercial real estate division championed with recognizing real estate development opportunities with the potential for significant and near-term appreciation for Allies shareholders.  This ‘Commercial Real Estate Fund’ will focus on acquiring interests in performing real-estate at or below distressed pricing.  An emphasis will be placed on locating these properties in high-growth geographies with consistent population and commercial growth.

 Our commercial real estate interests include positive cash flow, class A office space

Another division of Allies will focus on ‘start-up’ and ‘second-stage’ (primarily new technology) firms with the potential to have exponential growth and viral expansion over relatively short (18-60 month) time spans.  The ‘New Media Technology Fund’ will be used to make whole and partial investments in companies with defensible business models in high growth technologies.  Companies with potential for patent-related revenue, business to business revenue and emerging revenue will be of particular importance in our evaluation process.  These ‘start-ups’ are in need of fresh capital to bring their projects to fruition.  Allies Limited intends to provide capital for these firms in return for significant equity and managerial consultation.

Allies final distinct division will be in the business of marketing its ‘holding companies’ and real estate to increase valuation and to raise venture capital to fund current and future investments.    Allies may partner with other private equity firms to help fund projects of interest.

Additionally, Allies Limited is in the business of consultation for general business purposes, primarily, but not limited to, marketing real estate development, emerging breakthrough technologies, dental practices, and health centers.

[6.3]           MARKET SIZE/ MARKET SHARE/ MARKET POTENTIAL

[6.3.1]           Size of the industry -  Investment Activity

A record $686 billion of private equity was invested globally in 2007, up over a third on the previous year and more than twice the total invested in 2005. Private equity fund raising also surpassed prior years in 2007 with $494 billion raised, up 10% on 2006. The contraction in the credit markets caused by the sub-prime crisis, triggered a slowdown in private equity financing and it became more difficult for private equity firms to obtain debt financing from banks to complete private equity deals.

 

 

With the onset of the global financial crisis in 2008, private equity investment activity decreased sharply. Approximately $190 billion of private equity was invested globally in 2008, down 40% on the previous year. Investment activity slowed in the second half of the year as liquidity dried up and investors became more risk averse as equity markets fell. Buyouts’ share of total investments fell to 41% in 2008 from 89% in the previous year as the contraction in the credit markets made it more difficult for private equity firms to obtain debt financing from banks to complete deals. Early indicators for 2009 show that activity was down further in the first half of the year with firms doing smaller deals and using less leverage. As large buyout activity slowed, investments hit a 12 year low and dropped to $24 billion in the first half of 2009, down to one-sixth the level in the same period in 2008.

 

  

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From a geographic perspective, in 2007, North America accounted for 71% of global private equity investments (up from 66% in 2000). Between 2000 and 2007, Europe’s share of investments fell from 20% to 15%. This was largely a result of stronger buyout market activity in the US than in Europe. Between 2000 and 2007, although there was an increase in Asia-Pacific and emerging markets fundraising activity, this region’s share of investments remained relatively unchanged at around 12%.

 

[6.3.2]           Size of the Industry -  Fundraising Activity

 

Private equity funds under management totaled $2.5 trillion at the end of 2008. The 15% increase during the year was due to strong fund raising activity in the first half of 2008 and an increase in unrealized portfolio investments, as firms were reluctant to exit their stakes in market conditions of falling valuations. Funds available for investments totaled 40% of overall assets under management or some $1 trillion, a result of high fund raising volumes between 2006 and 2008.[

 

Despite the financial crisis and fall in private equity investments, fund-raising levels were down only 8% in 2008 to $450 billion, a result of a relatively strong start to the year. The slowdown in fund-raising accelerated in the first half of 2009, with under $100 billion raised, a two-thirds drop on the same period in 2008. The fall in investment activity and economic slowdown have given a boost to the secondary market for private equity where existing stakes in private equity holdings are bought and sold.

 

From a geographic perspective, in 2007, North America accounted for 65% of funds raised (down from 68%). Between 2000 and 2007, Europe’s share of funds raised fell from 25% to 22%. This was largely a result of stronger buyout market activity in the US than in Europe. Between 2000 and 2007 there was a rise in the importance of Asia-Pacific and emerging markets as investment destinations, particularly China, Singapore, South Korea and India. Asia-Pacific’s share of funds raised increased from 6% to 10% during this period.

 

[6.4]           COMPETITOR OVERVIEW

 

According to an updated 2009 ranking created by industry magazine Private Equity International  (published by PEI Media called the PEI 300), the largest private equity firm in the world today is TPG, based on the amount of private equity direct-investment capital raised over a five-year window. As ranked by the PEI 300, the 10 largest private equity firms in the world are:

 

	
1.

	
TPG Capital (formerly Texas Pacific Group)

 

	
2.

	
Goldman Sachs Capital Partners

 

	
3.

	
The Carlyle Group

 

	
4.

	
Kohlberg Kravis Roberts

 

	
5.

	
Apollo Global Management

 

	
6.

	
Bain Capital

 

	
7.

	
CVC Capital Partners

 

	
8.

	
The Blackstone Group

 

	
9.

	
Warburg Pincus

 

	
10.

	
Apax Partners

 

  

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[6.5]           STRENGHTS/ WEAKNESSESS/ OPPORTUNITIES/ THREATS

 

	
STRENGTHS

	
WEAKNESSES

	
Management expertise

	
Lack clout of larger private equity firms

	
Strong network of business relationships

	  
	
No debt, low overhead

	  
	
Creative investment strategies

	  
	  	  
	
OPPORTUNITIES

	
THREATS

	
Distressed commercial real estate market

	
Difficulty in locating & executing on deals

	
High returns of new social media startups

	  
	
 

	  

[6.6]           MEDIA CHANNEL  EVALUATION

Allies will utilize all applicable media channels and promotional tools necessary to accomplish our goal of promoting Allies Limited private equity funds and portfolio companies to investors, market analysts, market makers and other key industry players.  Given the nature of our business, more traditional forms of promotion will likely be used more predominately (e.g. direct selling, press releases, networking etc).  However, newer digital marketing strategies will be incorporated into the marketing mix as possible.

7.0           OPERATIONS

[7.1]           SITE AND FACILITIES MANAGEMENT

Our commercial real estate division will oversee, as applicable or necessary, the execution of any management/maintenance contracts of properties owned or managed by Allies Limited.

[7.2]           TRAINING AND DEVELOPMENT

Presently this component is not needed.  However, as we bring on new division personnel, a comprehensive training program will be instituted.

[7.3]           VENDOR RELATIONSHIP MANAGEMENT (VRM)

 Allies Limited will utilize a set of tools, technologies, policies and support that will ultimately allow us to optimally manage relationships with our vendors, in the event that this kind of management is necessary.

[7.4]           CUSTOMER SERVICE/ CLIENT RELATIONS

Over time and as the company grows, a more formal or identifiable level of support will likely be necessary to assist with client (shareholder)-related inquiries and/or issues.   These personnel will also assist with office operations and marketing support.  Currently this functionality is handled by the sales division.

[7.5]           RESEARCH AND DEVELOPMENT

Some level of research is always underway with the goals of staying abreast of industry and market developments and positioning ourselves to identify potential acquisitions.

  

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ALLIES LTD

	
FRESH IDEAS & SOUND INVESTMENTS

[7.6]           COMPLIANCE

Currently, this specific functionality is not present within the company given the nonexistence of regulatory requirements or oversight applicable to us.

[7.7]           DISASTER RECOVERY PROGRAM

Given the nature of our business, a formal plan is not necessary.

[7.8]           BUSINESS ARCHIVES AND DOCUMENT MANAGEMENT

This component provides the means to preserve and maintain key documents, files, and other items of historical importance or business necessity.

  

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ALLIES LTD

	
FRESH IDEAS & SOUND INVESTMENTS

8.0           FINANCIAL

ALLIES LIMITED

FINANCIAL STATEMENTS

TABLE OF CONTENTS

NOVEMBER 30, 2009

 

 

 

	
Balance Sheet as of November 30, 2009

	
26

	  	  
	
Statement of Operations for the period from

	  
	
July 23, 2009 (Date of Inception) to November 30, 2009

	
27

	  	  
	
Statement of Stockholders’ Equity as of November 30, 2009

	
28

	  	  
	
Statement of Cash Flows for the period from

	  
	
July 23, 2009 (Date of Inception) to November 30, 2009

	
29

	  	  
	
Notes to the Financial Statements

	
30-46

 

 

 

  

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ALLIES LTD

	
FRESH IDEAS & SOUND INVESTMENTS

 

ALLIES LIMITED

(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEET

AS OF NOVEMBER 30, 2009

 

	
ASSETS

	 	 	 
	  	 	 	 
	
Current assets

	 	 	 
	
Cash and cash equivalents

	 	$	257,063	 
	  	 	 	 	 
	
Other Assets

	 	 	 	 
	
Security deposit

	 	$	1,110	 
	  	 	 	 	 
	
TOTAL ASSETS

	 	$	258,173	 
	  	 	 	 	 
	  	 	 	 	 
	
LIABILITIES AND STOCKHOLDERS’ EQUITY

	 	 	 	 
	  	 	 	 	 
	
LIABILITIES

	 	 	 	 
	
Current Liabilities

	 	 	 	 
	  	 	 	 	 
	
Accrued expenses

	 	$	10,204	 
	
Total Liabilities

	 	$	10,204	 
	  	 	 	 	 
	
STOCKHOLDERS EQUITY

	 	 	 	 
	
Common stock, $.0001 par value, 100,000,000 shares authorized, 60,583,447 shares issued and outstanding

	 	 	6,058	 
	
Additional paid in capital

	 	 	293,469	 
	
Deficit accumulated during the development stage

	 	 	-51,558	 
	
Total Stockholders’ Equity

	 	 	247,969	 
	  	 	 	 	 
	
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

	 	$	258,173	 
	  	 	 	 	 

 

See accompanying notes to financial statements

 

 

  

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ALLIES LTD

	
FRESH IDEAS & SOUND INVESTMENTS

 

ALLIES LIMITED

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF OPERATIONS

FOR THE PERIOD FROM JULY 23, 2009 (INCEPTION) TO NOVEMBER 30, 2009

 

	  	 	 	 
	
REVENUES

	 	$	0	 
	  	 	 	 	 
	
OPERATING EXPENSES

	 	 	 	 
	
Professional fees

	 	$	12,635	 
	
Payroll expenses

	 	$	32,465	 
	
Rent expense

	 	$	3,520	 
	
General and administrative expenses

	 	$	2,938	 
	
TOTAL OPERATING EXPENSES

	 	$	51,558	 
	  	 	 	 	 
	
NET LOSS BEFORE INCOME TAXES

	 	$	-51,558	 
	  	 	 	 	 
	
PROVISION FOR INCOME TAXES

	 	$	0	 
	  	 	 	 	 
	
NET LOSS

	 	$	-51,558	 
	  	 	 	 	 
	
NET LOSS PER SHARE: BASIC AND DILUTED

	 	$	0	 
	  	 	 	 	 
	
WEIGHTED AVERAGE SHARES OUTSTANDING: BASIC AND DILUTED

	 	$	60,344,123	 
	  	 	 	 	 

 

See accompanying notes to financial statements.

 

 

 

 

 

  

20

  

 

	 
	
 

ALLIES LTD

	
FRESH IDEAS & SOUND INVESTMENTS

 

ALLIES LIMITED

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF STOCKHOLDERS’ EQUITY

FOR THE PERIOD FROM JULY 23, 2009 (INCEPTION) TO NOVEMBER 30, 2009

 

	  	 	 	 	 	 	 	 	 	 	
Deficit

	 	 	 
	  	 	 	 	 	 	 	 	 	 	
Accumulated

	 	 	 
	  	 	 	 	 	 	 	 	
Additional

	 	
during the

	 	 	 
	  	 	
Common Stock

	 	 	
Paid-In

	 	
Development

	 	 	 
	  	 	
Shares

	 	 	
Amount

	 	 	
Capital

	 	
Stage

	 	
Total

	 
	
Inception, July 23, 2009

	 	 	 	 	 	 	 	 	 	  	 	 	 
	  	 	 	 	 	 	 	 	 	 	  	 	 	 
	
 Shares issued to founders

	 	 	 	 	 	 	 	 	 	  	 	 	 
	
at $0.000075 per share

	 	 	40,000,000	 	 	$	4,000	 	 	$	-1,000	 	  	 	$	3,000	 
	
 Shares issued for cash

	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	 
	
at $0.00017 per share

	 	 	16,000,000	 	 	$	1,600	 	 	$	1,058	 	  	 	$	2,658	 
	
 Shares issued for cash

	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	 
	
at $0.00017 per share

	 	 	4,000,000	 	 	$	400	 	 	$	0	 	  	 	$	400	 
	
 Shares issued for cash

	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	 
	
at $0.45 per share

	 	 	444,445	 	 	$	44	 	 	$	199,450	 	  	 	$	199,494	 
	
 Shares issued for cash

	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	 
	
at $0.75 per share

	 	 	42,233	 	 	$	4	 	 	$	31,671	 	  	 	$	31,675	 
	
 Shares issued for cash

	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	 
	
at $0.65 per share

	 	 	82,769	 	 	$	8	 	 	$	53,792	 	  	 	$	53,800	 
	
  Shares issued for cash

	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	 
	
at $0.63 per share

	 	 	8,000	 	 	$	1	 	 	$	4,999	 	  	 	$	5,000	 
	
  Shares issued for cash

	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	 
	
at $0.58 per share

	 	 	6,000	 	 	$	1	 	 	$	3,499	 	  	 	$	3,500	 
	
  Net loss for the period

	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	 
	
ended November 30, 2009

	 	 	-	 	 	 	-	 	 	 	-	 	
-$51,558

	 	$	-51,558	 
	  	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	 
	
  Balance, November 30, ‘09

	 	 	60,583,447	 	 	$	6,058	 	 	$	293,469	 	
-$51,558

	 	$	247,969	 

 

See accompanying notes to financial statements

 

 

  

21

  

 

	 
	
 

ALLIES LTD

	
FRESH IDEAS & SOUND INVESTMENTS

 

ALLIES LIMITED

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF CASH FLOWS

FOR THE PERIOD FROM JULY 23, 2009 (INCEPTION) TO NOVEMBER 30, 2009

 

 

	  	 	 	 
	
CASH FLOWS FROM OPERATING ACTIVITIES

	 	 	 
	
   Net loss for the period

	 	$	-51,558	 
	
   Changes in assets and liabilities

	 	 	 	 
	
   Increase in accrued expenses

	 	$	10,204	 
	
CASH FLOWS USED IN OPERATING ACTIVITIES

	 	$	-41,354	 
	  	 	 	 	 
	
CASH FLOWS FROM INVESTING ACTIVITIES

	 	 	 	 
	
Security deposit

	 	$	-1,110	 
	
CASH FLOWS USED IN INVESTING ACTIVITIES

	 	$	-1,110	 
	  	 	 	 	 
	
CASH FLOWS FROM FINANCING ACTIVITIES

	 	 	 	 
	
Proceeds from sale of common stock

	 	$	299,527	 
	
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES

	 	$	299,527	 
	  	 	 	 	 
	
NET INCREASE IN CASH

	 	$	257,063	 
	
Cash, beginning of period

	 	$	0	 
	
Cash, end of period

	 	$	257,063	 
	  	 	 	 	 
	
SUPPLEMENTAL CASH FLOW INFORMATION:

	 	 	 	 
	
Interest paid

	 	$	0	 
	
Income taxes paid

	 	$	0	 
	  	 	 	 	 

 

See accompanying notes to financial statements

 

 

  

22

  

 

	 
	
 

ALLIES LTD

	
FRESH IDEAS & SOUND INVESTMENTS

 

 

9.0           EXIT STRATEGY

 

The goal of Allies is to facilitate “liquidity” for our founding shareholders as quickly as possible through a planned Direct Public Offering (DPO) and establishing a market and increased share value for Allies through acquisition of positive cash flow hard assets and promising high technology firms as well as with aggressive marketing through press releases, relationships, and advertising with financial publications, market makers, analysts, and traders. Our goal is to provide a profitable, liquid, free trading investment exit for our shareholders in a relatively short investment cycle.

 

The principals of Allies Ltd. have restrictions on the sale of their shares and intend to keep the majority of their holdings for an indefinite period of time.

 

 

 

 

 

 

 

  

23

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