Document:

CNL Strategic Capital, LLC S-1

Exhibit 10.10

 

SERVICE AGREEMENT

 

THIS
SERVICE AGREEMENT (“Agreement”) is made and entered into as of the 7th day of February, 2018 (the
“Effective Date”), by and between CNL Capital Markets Corp. (“CCM”), and CNL Strategic
Capital Management, LLC (the “Administrator”).

 

WHEREAS,
the CNL Strategic Capital, LLC (the “Company”) has prepared and filed with the U.S. Securities and Exchange
Commission (the “SEC”) a registration statement on Form S-1 and intends to raise capital through this
and other follow on offerings of securities to the public, each under Rule 415 (collectively, the “Offering”),
pursuant to the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder; and

 

WHEREAS,
the Administrator is entering into this Agreement individually and on behalf of the Company and references in this Agreement to
actions, representations, warranties, and agreements of the Administrator shall refer to actions, representations, warranties,
and agreements of the Administrator, either individually or on behalf of the Company, as applicable; and

 

WHEREAS,
the Administrator desires to retain CCM to act as an agent on its behalf and on behalf of the Company to provide certain services
to the Company in connection with the Offering and thereafter, as set forth herein, and CCM is willing and desires to accept such
retention, all upon the terms and conditions set forth in this Agreement.

 

NOW,
THEREFORE, in consideration of the terms and conditions hereinafter set forth and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, it is agreed between CCM and Administrator (collectively, the “Parties”),
as follows:

 

1.            Appointment
and Third Party Agreements

 

A.
       Transfer Agent Services. Subject to and in accordance with the terms and conditions
herein set forth, the Administrator hereby retains and appoints CCM to act as an agent duly authorized to act on behalf of the
Company for purposes of negotiating and executing on a Transfer Agency and Service Agreement with a duly registered transfer agent,
DST Systems, Inc., a Delaware corporation, or their successor in CCM’s sole discretion, for the purposes of obtaining transfer
agent, registrar, paying agent and redemption agent services for the term of the Offering (“the TASA Agreement”).

 

B.
   Electronic Account Services. Subject to and in accordance with the terms and conditions herein set forth, the Administrator
hereby retains and appoints CCM to act as an agent duly authorized to act on behalf of the Company for purposes of negotiating
and executing on behalf of the Company an agreement with an investor and financial advisor online account and data access and
service provider, DST Systems, Inc., a Delaware corporation, or their successor in CCM’s sole discretion, for the term of
the Offering, (the “DST Agreement”).

 

C.
 Alternative Investment Product Services. Subject to and in accordance with the terms and conditions herein set forth, the
Administrator hereby retains and appoints CCM to act as an agent duly authorized to act on behalf of the Company for purposes
of negotiating and executing on behalf of the Company an agreement with the National Securities Clearing Corporation (“NSCC”),
or their successor in CCM’s sole discretion, (the “NSCC Agreement”) for the purposes of participation
in the Alternative Investment Product platform.

 

     

     

    

 

D.
 Additional Agency. The Administrator hereby retains and appoints CCM to act as an agent duly authorized to act on behalf
of the Company for purposes of negotiation and execution on behalf of the Administrator of any and all agreements ancillary to
or required for completion of the services set forth in Exhibit “A” attached hereto, which is made a part hereof,
as amended from time to time (collectively, the “Services”) in addition to the TASA Agreement, the DST Agreement
and the NSCC Agreement (the TASA Agreement, the DST Agreement, the NSCC Agreement, and these ancillary agreements, if any, collectively
referred to as the “Service Agreements”), including without limitation the “Communication Services”
as set forth therein. CCM’s signature on any Service Agreement shall be fully binding upon the Company (and, for such purpose,
the Company hereby constitutes and appoints CCM the Company’s true and lawful attorney-in-fact), and the Administrator grants
CCM the right to act on behalf of the Company pursuant to such Service Agreements and to provide such related services as may
be reasonably required, and each act or omission of CCM under or pursuant to such Service Agreements is hereby adopted by the
Administrator on behalf of the Company as authorized and shall be binding on the Company as if the Company had acted or omitted
to act.

 

E.
 Acceptance. CCM hereby accepts the appointment as agent and agrees to perform, or cause to be performed, the Services in
accordance with the terms and conditions hereinafter set forth. In connection with the TASA Agreement and the DST Agreement and
all services provided thereunder, CCM shall be considered as the Administrator’s agent, and shall not be deemed to provide
such services. The Administrator also acknowledges and accepts the terms and fees associated with the Service Agreements.

 

2.            Services
and Terms

 

A.        CCM
shall perform, or cause to be performed, the Services, pursuant to Administrator’s reasonable policies and procedures applicable
to such Services as timely provided in writing to CCM.

 

B.
        CCM shall enter into the Service Agreements as set forth above.

 

C.         CCM
shall determine the levels and priorities applicable to the Services and related actions taken in connection therewith, but shall
in all cases performing Services within a commercially reasonable time as applicable.

 

D.         In
the event an investor, broker-dealer, registered investment adviser registered under the Investment Advisers Act of 1940 or under
applicable state securities laws, or financial advisor contacts CCM regarding any of the issues set forth in Exhibit “B” attached hereto, which is made a part hereof, CCM shall refer such investor, broker-dealer, registered investment adviser
or financial advisor to another party per the written instructions of the Administrator

 

E.         Administrator
hereby agrees that CCM shall have full discretion to engage subcontractors, its affiliates, and third-party service providers
to perform, and assist CCM with the performance of, any and all of its obligations under this Agreement.

 

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F.         It
is intended that CCM be deemed an independent service provider and that no employment relationship shall be created between Administrator
on the one hand and CCM or CCM’s employees, agents or subcontractors on the other hand.

 

G.         Nothing
in this Agreement shall in any way be deemed to restrict the right of CCM to perform services for any other person or entity,
and the performance of such services for others shall not be deemed to violate or give rise to any duty or obligation to Administrator
or any other person or entity, including without limitation any investor not specifically undertaken by CCM hereunder.

 

H.        Administrator
agrees to use reasonable efforts to provide CCM (1) advance written notice in the event that there are any administrative changes
to Administrator’s or the Company’s governing documents, business practices or the Offering which changes would have
an impact on the Services provided pursuant to this Agreement, including, but not limited to, changes to Company’s dividend
reinvestment plan, redemption plan, commissions and fees (including discounts) paid on sales of shares, distribution and stockholder
servicing fees, offering prices of shares, classes of shares being offered, investor suitability standards, the states where shares
are offered, distribution rates or declaration and payable dates, introduction of new securities offerings, and changes in business
practices pertaining to certification of shares, book entry, electronic delivery of information to stockholders; and (2) prompt
notice of Company’s filing of a registration statement or any other form with the SEC, and any amendments thereto, that
affect the Services provided by CCM pursuant to this Agreement.

 

I.         CCM agrees to maintain policies and procedures reasonably designed to prevent violations of applicable securities laws.

 

J.         Within
the sixty (60) day period after the effective date of this Agreement, the parties hereto shall confer, diligently and in good
faith, to agree upon (1) the operational service level standards that shall be measured under this Agreement, if any, and (2)
the ongoing reports to the Administrator to be provided under this Agreement, if any, and/or as they arise, including compliance
reporting.

 

		3.	Compensation
                                         and Payments

 

As
consideration for the provision of the Services under this Agreement, Administrator shall cause the Company to pay fees, expenses,
and payments paid directly to third parties for services provided to the Administrator on behalf of the Company and Company in
connection with a Service Agreement (“Service Agreement Fees”) and Communication Services (“Communication
Services Fees”), as more particularly set forth herein. In full consideration for the provision of the services provided
by the Administrator pursuant to this Agreement, the parties acknowledge that there shall be no separate fee paid to the Administrator
or CCM in connection with the services provided. Administrator agrees use its best efforts to cause the Company to timely pay
any and all Service Agreement Fees and Communication Services Fees.

 

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		A.	Service
                                         Agreement Fees

 

Service
Agreement Fees are pass through fees billed directly to the Company (passed through the Administrator) by the third-party providing
a Service under a Service Agreement. The Administrator, and not the Company, is exclusively responsible for their timely payment,
and for any fees or costs associated with any late payments. In the event of a disputed payment, CCM will cooperate with Administrator
to resolve the matter in accordance with the terms of the applicable Service Agreement. Certain Service Agreements, including
but not limited to the TASA Agreement, will contain fee and pricing features that are determined (1) based on actual specific
performance of Services for the Company; and (2) based upon aggregate numbers of investor accounts served by all CCM Company clients
that are beneficiaries of a given Service Agreement, including but not limited to the Company (the “Platform Size Benefits”).
Administrator acknowledges that CCM cannot control fluctuations in the aggregate number of Administrator accounts that determine
the calculation of Platform Size Benefits. CCM will provide an annual report to the Company’s Board of Directors detailing
all Service Agreements, including the fees charged in each and changes to the prior year fees and/or services.

 

		B.	Communication
                                         Services Fees

 

Communication
Services Fees include pass through fees billed directly to the Company by a third party providing Communication Services, either
under a Service Agreement or at the request of CCM in connection with its completion of the Communication Services. The Administrator,
and not the Company, is exclusively responsible for their timely payment, and for any fees or costs associated with any late payments.
In the event of a disputed payment, CCM will cooperate with Administrator to resolve the matter.

 

		C.	Payment
                                         Schedule

 

All
reimbursable amounts due and payable pursuant to any Service Agreement under this Agreement, including all exhibits thereto, shall
be due and payable to CCM by Company within thirty (30) calendar days of request for reimbursement by CCM, except for any fees
or expenses that are subject to good faith dispute. In the event of such a dispute, only that portion of the fee or expense subject
to the good faith dispute may be withheld. Administrator shall notify CCM in writing within thirty (30) calendar days following
the receipt of each invoice if an Administrator is disputing any amounts in good faith together with a statement specifying the
portion of fees or expenses being withheld and a reasonably detailed explanation of the reasons for withholding such fees or expenses.
If Administrator does not provide such notice of dispute within the required time, the invoice will be deemed accepted. Whenever
Administrator withholds payment of a disputed portion of any invoice, the parties hereto will negotiate expeditiously and in good
faith to resolve any such disputes within thirty (30) calendar days of the original notice of dispute. Administrator shall settle
such disputed amounts within ten (10) calendar days of the day on which the parties hereto agree on the amount to be paid by payment
of the agreed amount. If no agreement is reached, such disputed amounts shall be settled as may be required by law or legal process.

 

		D.	Late
                                         Payments

 

If
any undisputed amount in an invoice (for reimbursable fees or reimbursable expenses hereunder) is not paid when due, CCM may,
after prior written notice to the Administrator, charge such undisputed amount against any monies held under this Agreement on
behalf of the applicable Administrator. Without limiting the foregoing, if any undisputed amount in an invoice of CCM (for reimbursable
fees or reimbursable expenses) is not paid when due, or if any disputed amount in an invoice of CCM (for reimbursable fees or
reimbursable expenses) is not paid when due and is subsequently determined to have been due, Administrator shall pay CCM interest
thereon (from due date to the date of payment) at a per annum rate equal to one percent (1.0%) plus the Prime Rate (that is, the
base rate on corporate loans posted by large domestic banks) published by the The Wall Street Journal (or, in the event
such rate is not so published, a reasonable equivalent published rate selected by CCM) on the first day of the publication during
the month when such amount was due. Notwithstanding any other provision hereof, such interest rate shall be no greater than permitted
under applicable provisions of law.

 

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		4.	Confidentiality
                                         of Records

 

A.        As
used herein, “Company Data” means all information and facts owned by the Company or collected on behalf of
the Administrator, including, without limitation, any technical, business or investor information, of any kind, or in any form,
format or medium (including, without limitation, all interrelated, unique data items or records in one or more computer files).
CCM shall keep confidential any Company Data it receives, maintains, processes or otherwise accesses while providing the Services
contemplated herein and will use such Company Data solely for performing its obligations under this Agreement. CCM will not release
Company Data except as otherwise provided for in Section 4 or with the consent of Administrator. Notwithstanding the above, CCM
may release Company Data to its nominees, subcontractors or third-party service providers, including providers under the Service
Agreements (the “Third Parties”), provided that each such Third Party shall be required by CCM to agree to
comply with the terms of confidentiality in this Agreement or other substantially similar terms.

 

B.        Administrator
will provide CCM with such information as CCM may reasonably require in order to comply with its duties under this Agreement.
CCM will maintain such reports and records as Administrator may reasonably require and for such length of time as required by
applicable laws, rules and regulations, and as set forth by Administrator’s record retention policies, but at least as long
as required by the record retention policy of CCM.

 

C.        All
records, data files, material, reports and other data received pursuant to this Agreement are the property of Administrator, are
confidential and will be delivered to Administrator upon Administrator’s demand at Administrator’s expense.

 

D.        Both
CCM and the Administrator shall have in place and comply with reasonable privacy and confidentiality policies and/or procedures
in order to comply with all applicable privacy laws, rules and regulations and to safeguard all Company Data. Such policies and/or
procedures shall be available for review by either CCM or the Administrator upon request to the other party.

 

E.         Notwithstanding
anything to the contrary in this Agreement, CCM may disclose this Agreement and any amendments, terminations and renewals thereof
to: (i) third party due diligence firms and their broker-dealer clients, upon such due diligence firm’s request, to facilitate
the review of Administrator’s offerings in connection with the sale thereof; or (ii) upon the advice of counsel; or (iii)
as may be required by applicable laws, rules and regulations.

 

F.         CCM
is authorized to disclose information concerning Company Data to its affiliates and to Third Parties as may be necessary solely
in connection with the administration of or performance of this Agreement as set forth herein, to CCM’s internal and external
auditors, accountants and counsel, and to any other person or entity when so advised by counsel where CCM may incur liability
for failing to do, including as may be required under applicable laws, rules and regulations or based upon requests by regulators
or other government agencies.

 

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G.         Except
for the agreement to exert reasonable efforts to attempt to correct failures of any third party to operate in material compliance
with the operational and confidentiality requirements provided herein and in their respective service agreements, CCM makes no
warranty that errors or failures will not occur or that they may be resolved. Except as expressly stated herein or for an incident
arising from CCM’s gross negligence or willful misconduct, CCM expressly disclaims responsibility for breaches of confidentiality
or for loss of confidential data and Administrator Data by third parties.

 

5.             Limitation
of Liability; Indemnification

 

A.        Limitation
of Liability

 

1.         Subject
to any limitations imposed by the Company’s charter, CCM shall not be liable for any Losses (as defined in Section 5.B.1.)
or action taken or omitted or for any loss or injury resulting from CCM’s (including, but not limited to, its agents, nominees
and/or subcontractors) or third party service providers’ performance or failure to perform their respective duties hereunder
in the absence of gross negligence or willful misconduct on their respective parts. Subject to any limitations imposed by the
Company’s charter, and except to the extent of CCM’s gross negligence or willful misconduct or for any violation of
any federal securities law or any “blue sky” or state securities law, in no event shall CCM be liable to the Company,
Administrator, any investor, or any third party (i) for acting in accordance with Administrator’s instructions or instructions
from any entity or individual reasonably believed by CCM to be an agent of Company; (ii) for special, consequential or punitive
damages; (iii) for the acts or omissions of its correspondents, designees, agents, subagents; or (iv) any Losses (as defined in
Section 5.B.1.) due to forces beyond the reasonable control of CCM, including without limitation, strikes, work stoppages, acts
of war or terrorism, insurrection, revolution, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions
of utilities, communications or computer (software or hardware) services. With respect to any Losses (as defined in Section 5.B.1.)
incurred as a result of the acts or the failure to act by any correspondents, designees, agents, subagents, sub-agents, contractors
or sub-contractors, CCM shall take appropriate action, as determined by CCM in its sole discretion, to recover such Losses from
such correspondents, designees, agents, sub-agents, contractors or sub-contractors, and CCM’s sole responsibility and liability
to the Company, Administrator and investors shall be limited to such amounts, if any, recovered from same less any costs and expenses
incurred by CCM in any such recovery efforts. Except with respect to Losses resulting from CCM’s gross negligence or willful
misconduct, with respect to any and all Losses howsoever arising from or in connection with this Agreement or the performance
of CCM’s (or its nominees’, subcontractors’ or third-party service providers’) duties hereunder, the enforcement
of this Agreement and disputes between the Parties hereto or otherwise related to CCM’s performance hereunder, CCM’s
sole responsibility and aggregate liability to Company or Administrator shall not exceed the amount of reimbursable fees paid
by Administrator to CCM (exclusive of costs and expenses incurred by CCM) pursuant to Section 3 of this Agreement.

 

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2.             Notwithstanding
any provisions of this Agreement to the contrary, unless CCM has actual knowledge indicating otherwise, CCM shall be under no
duty or obligation to inquire into, and shall not be liable for:

 

		i.	The
                                         legality of the issue, purchase, sale, redemption or transfer of any securities, the
                                         sufficiency of the amount to be paid or received in connection therewith, or the authority
                                         of Company to request such issuance, purchase, sale, redemption or transfer;

 

		ii.	The
                                         legality of the declaration of any dividend by Company, or the legality of the issue
                                         of any securities in payment of any stock dividend;

 

		iii.	The
legality of any recapitalization or readjustment of the securities; or

 

		iv.	The
legality or accuracy of any tax reporting, withholding or cost basis reporting.

 

		3.	Third
                                         Party Information

 

CCM
shall have no responsibility for the accuracy of any information that has been provided by or obtained from third parties.

 

		4.	Trustee
                                         or Fiduciary

 

Nothing
contained herein shall cause CCM to be deemed a trustee or fiduciary for or on behalf of Company, any investor, or any other person.
The Services provided by CCM hereunder are in addition to the services provided by CCM under any other agreements, if applicable,
between the Parties.

 

		B.	Indemnification

 

1.       The
Administrator agrees, to the extent permitted by the Company’s charter and applicable federal and state law (including,
but not limited to, federal and state securities law), to indemnify, defend and hold harmless CCM, and when appropriate, its agents,
nominees and subcontractors, and their respective officers, directors, partners, employees, associated persons, agents and control
persons against any and all losses, claims, damages, liabilities and expenses, including reasonable legal (including attorneys’
fees), and other expenses incurred in investigating or defending such claims or liabilities (collectively referred to herein as
“Losses”), joint or several, whether or not resulting in any liability to such persons, to which they or any
of them may become subject, insofar as such Losses (or actions in respect thereof) arise out of or are based upon this Agreement
or the performance of their duties hereunder, the enforcement of this Agreement and disputes between the Parties hereto or otherwise
related to their performance hereunder. Provided, however, that nothing contained herein shall require that CCM (or its agents,
nominees and subcontractors) be indemnified for Losses to the extent they are caused by its (or its agents’, nominees’
and subcontractors’, respectively) gross negligence or willful misconduct. Nothing contained herein shall limit or in any
way impair the right of CCM to indemnification under any other provision of this Agreement. For purposes of this Section B, “control
persons” with respect to an entity, means those persons who possess, directly or indirectly, the power to direct or
cause the direction of the management or policies of such entity, whether through the ownership of voting securities, by contract,
or otherwise.

 

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2.         CCM
agrees, to the extent permitted by applicable federal and state law (including, but not limited to, federal and state securities
law) to indemnify, defend and hold harmless the Company and the Administrator, and their respective officers, directors, partners,
employees, associated persons, agents and control persons, from and against any and all Losses, joint or several, whether or not
resulting in any liability to such persons, to which they or any of them may become subject, insofar as such Losses (or actions
in respect thereof) arise out of or are based upon this Agreement or the performance of their duties hereunder, the enforcement
of this Agreement and disputes between the Parties hereto or otherwise related to their performance hereunder. Provided, however,
that nothing contained herein shall require that Company and Administrator (or its agents, nominees and subcontractors) be indemnified
for Losses except to the extent they are caused by the gross negligence or willful misconduct of CCM (or its agents, nominees
and subcontractors). Nothing contained herein shall limit or in any way impair the right of Company or the Administrator to indemnification
under any other provision of this Agreement.

 

3.         The
parties hereto agree that CCM may assign to Company or Administrator, at the Company’s or Administrator’s request,
any and all rights of subrogation CCM may have against any third party vendors, correspondents, agents, sub-agents, contractors,
sub-contractors or consultants as and in full satisfaction of any obligation of indemnity CCM may have to Company or Administrator
under this Agreement.

 

4.         Any
party entitled to contribution or indemnification will, promptly after receipt of such notice of commencement of any action, suit,
proceeding or claim against him or it in respect of which a claim for contribution or indemnification may be made against another
indemnifying party or indemnifying parties, notify such other indemnifying party or indemnifying parties. Failure to so notify
such other indemnifying party or indemnifying parties shall not relieve such other indemnifying party or indemnifying parties
from any other obligation it or they may have hereunder or otherwise, unless the indemnifying party has been materially prejudiced
in its ability to defend the action as a result of such delay. If such other indemnifying party or indemnifying parties are so
notified, such other indemnifying party or indemnifying parties shall be entitled to participate in the defense of such action,
suit, proceeding or claim at its or their own expense or in accordance with arrangements satisfactory to all parties who may be
required to contribute. After notice from such other indemnifying party or indemnifying parties to the indemnified party entitled
to contribution or indemnification of its or their acknowledgement of its or their obligations hereunder and its or their election
to assume its or their own defense, the indemnifying party or indemnifying parties so electing shall not be liable for any legal
or other expenses of litigation subsequently incurred by the indemnified party entitled to indemnification or contribution in
connection with the defense thereof, other than the reasonable costs of investigation. No party shall be required to contribute
or provide indemnification with respect to the settlement amount of any action or claim settled without its consent, which shall
not be unreasonably withheld.

 

6.            Representations,
Warrants and Covenants of CCM

 

A.        CCM
hereby represents, warrants and covenants during the full term of this Agreement, that:

 

1.         It
is duly organized and validly existing under the laws of Florida with full power and authority to conduct its business.

 

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2.         It
has the power and authority to enter into and perform this Agreement; and the execution and delivery of this Agreement by CCM
has been duly and validly authorized by all necessary action. This Agreement constitutes the valid and binding agreement of CCM,
enforceable against it in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar state or federal debtor relief laws from time to time in effect which affect the enforcement
of creditors’ rights generally and by general equitable principles. CCM is not in violation of its articles of incorporation
or bylaws or in default under any agreement or instrument the effect of which violation or default would be material to CCM. None
of: (i) the execution and delivery by CCM of this Agreement; (ii) the consummation by CCM of any of the transactions herein or
therein contemplated; and (iii) the compliance by CCM with the provisions hereof or thereof, does or will conflict with or result
in a breach of any term or provision of the articles of incorporation or bylaws of CCM or conflict with, result in a breach, violation
or acceleration of, or constitute a default under, the terms of any agreement or instrument to which CCM is a party or by which
it is bound or, to the knowledge of CCM, any statute, order or regulation applicable to CCM of any court, regulatory body, administrative
agency or governmental body having jurisdiction over CCM. CCM is not a party to, bound by or in breach or violation of any agreement
or instrument or, to the knowledge of CCM, subject to or in violation of any statute, order or regulation of any court, regulatory
body, administrative agency or governmental body having jurisdiction over it that materially and adversely affects, or may in
the future materially and adversely affect: (i) the ability of CCM to perform its obligations under this Agreement; or (ii) the
business, operations, financial conditions, properties or assets of CCM.

 

3.         There
are no actions or proceedings against, or investigations of, CCM pending or, to the knowledge of CCM, threatened, before any court,
arbitrator, administrative agency or other tribunal: (i) asserting the invalidity of this Agreement; (ii) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement; or (iii) that might materially and adversely affect the
performance by CCM of its obligations under, or the validity or enforceability of, this Agreement.

 

4.         CCM
will, during the full term of this Agreement, abide by all applicable provisions of its governing instruments, as the same may
be amended.

 

		7.	Representations,
                                         Warrants and Covenants of Administrator

 

A.        Administrator
hereby represents, warrants and covenants during the full term of this Agreement, that:

 

1.         It
is duly organized and validly existing under the laws of Delaware with full power and authority to conduct its business.

 

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2.         It
has the power and authority to enter into and perform this Agreement on behalf of the Company; and the execution and delivery
of this Agreement by Administrator has been duly and validly authorized by all necessary action. This Agreement constitutes the
valid and binding agreement of Administrator, enforceable against it in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar state or federal debtor relief laws from
time to time in effect which affect the enforcement of creditors’ rights generally and by general equitable principles.
Administrator is not in violation of its articles of incorporation or bylaws or in default under any agreement or instrument the
effect of which violation or default would be material to Administrator. None of: (i) the execution and delivery by Administrator
of this Agreement; (ii) the consummation by Administrator of any of the transactions herein or therein contemplated; and (iii)
the compliance by Administrator with the provisions hereof or thereof, does or will conflict with or result in a breach of any
term or provision of the charter of Administrator of Company or conflict with, result in a breach, violation or acceleration of,
or constitute a default under, the terms of any agreement or instrument to which the Company or Administrator is a party or by
which it is bound or, to the knowledge of Administrator, any statute, order or regulation applicable to Administrator of any court,
regulatory body, administrative agency or governmental body having jurisdiction over Administrator. Administrator is not a party
to, bound by or in breach or violation of any agreement or instrument or, to the knowledge of Administrator, subject to or in
violation of any statute, order or regulation of any court, regulatory body, administrative agency or governmental body having
jurisdiction over it that materially and adversely affects, or may in the future materially and adversely affect: (i) the ability
of Administrator to perform its obligations under this Agreement; or (ii) the business, operations, financial conditions, properties
or assets of Administrator.

 

3.         There
are no actions or proceedings against, or investigations of, Administrator pending or, to the knowledge of Administrator, threatened,
before any court, arbitrator, administrative agency or other tribunal: (i) asserting the invalidity of this Agreement; (ii) seeking
to prevent the consummation of any of the transactions contemplated by this Agreement; or (iii) that might materially and adversely
affect the performance by Administrator of its obligations under, or the validity or enforceability of, this Agreement.

 

4.         The
Administrator acknowledges that CCM (1) is not a registered transfer agent under Section 17A(c) of the Securities Exchange Act
of 1934, as amended, and is not acting as a fiduciary or in the capacity of a transfer agent; and (2) is not a member of the Financial
Industry Regulatory Authority (FINRA) and is not acting as a broker or dealer in connection with performing Services for the Administrator.

 

5.         Administrator
will, during the full term of this Agreement, abide by all applicable provisions of its governing instruments, as the same may
be amended.

 

		8.	Term
                                         and Termination

 

A.       
The initial term of this Agreement shall commence on the Effective Date as noted above and shall expire on January 1, 2020. Upon
the expiration of such initial term or any renewal thereof, this Agreement shall then automatically be renewed for consecutive
one (1) year periods (each such renewal, a “Renewal Term”). Renewal Terms exactly align with a given calendar year.
Notwithstanding the above, the Agreement may otherwise be terminated earlier as follows:

 

1.         By
either CCM or Administrator, after having given the other party at least sixty (60) calendar days advance written notice of its
intent to terminate.

 

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2.         In
the event that CCM shall fail to perform material services hereunder and such failure may result in a material adverse effect
on Administrator’s business, Administrator may terminated this Agreement immediately on written notice to CCM.

 

B.        In
the event that this Agreement is terminated, regardless of the reason for such termination, CCM agrees to cooperate with Administrator
to provide for an orderly transfer of functions to the successor service provider.

 

		9.	Survival
                                         of Terms

 

The
provisions of Section 4 (Confidentiality of Records), and Section 5 (Limitation of Liability; Indemnification), Section 9 (Survival
of Terms) and Section 13 (Governing Law and Venue) shall survive any termination of this Agreement.

 

		10.	Notices

 

Unless
otherwise provided herein, all notices or other communications under this Agreement must be in writing and signed by an authorized
officer (or such other persons as either party shall specify in written notice to the other).

 

All
such notices shall be deemed given and received when delivered by hand or facsimile transmission in conjunction with a transmission
confirmation, or after three (3) days following placement in the U.S. mail addressed to the other party, first class certified
mail, or via overnight courier service, at the applicable address set forth in this Section.

 

If
sent to CCM:

 

	 	CNL
        CAPITAL MARKETS CORP.

        

        CNL
Center at City Commons 

        450
        South Orange Avenue

        

        Orlando,
Florida 32801 

        Attention:
        Legal Counsel

        

 

If
sent to the Administrator:

 

	 	CNL
        Strategic Capital Management, LLC

        

        CNL
Center at City Commons 

        450
        South Orange Avenue

        

        Orlando,
Florida 32801 

        Attention:
        Chief Financial Officer

        

 

		11.	Nonwaiver

 

The
failure of any party to insist upon or enforce strict performance by any other party of any provision of this Agreement or to
exercise any right under this Agreement shall not be construed as a waiver or relinquishment to any extent of such party’s
right to assert or rely upon any such provision or right in that or any other instance; rather, such provision or right shall
be and remain in full force and effect.

 

    - 11 -

     

    

 

		12.	Assignment

 

Except
for the assignment by CCM (i) to a successor corporation upon the merger or consolidation of CCM, (ii) to an affiliate of CCM,
or (iii) upon the sale of all or substantially all of CCM’s business of providing services similar to the Services, this
Agreement shall not be assigned by any party hereto without the prior written consent of the other party hereto. The Company shall
be a third party beneficiary of this Agreement; otherwise there shall be no third party beneficiaries of this Agreement, and other
than the Company herein, no provision of this Agreement is intended to be for the benefit of any person or entity not a party
to this Agreement, and no third party shall be deemed to be a beneficiary of any provision of this Agreement. Further, no third
party shall by virtue of any provision of this Agreement have a right of action or an enforceable remedy against either party
to this Agreement except the Company.

 

		13.	Governing
                                         Law and Venue

 

This
Agreement shall be construed in accordance with the applicable laws of the State of Florida, excluding the choice of law provisions
thereof. Any aggrieved party may proceed to enforce its rights in the appropriate action at law or in equity. Venue for all suits
arising out of this Agreement shall lie exclusively in the courts of Orange County, Florida. By execution of this Agreement, each
party hereby submits itself to the in personam jurisdiction of all courts of Orange County, Florida, and waives any right they
may have to seek any change of jurisdiction or venue.

 

		14.	Severability

 

In
the event any provision of this Agreement shall for any reason be held to be invalid, illegal or unenforceable, the remaining
provisions of this Agreement shall be unimpaired and the invalid, illegal or unenforceable provision shall be replaced by a mutually
acceptable provision, which, being valid, legal and enforceable, comes closest to the intention of the Parties.

 

		15.	Use
of CCM’s Name

 

Administrator
shall obtain the prior written consent of CCM for any reference to CCM or to services to be furnished by CCM in any communication
or document, except as required to be disclosed in any document filed with the SEC; provided that CCM shall have no responsibility
or liability for the content of any such communication or document.

 

		16.	Headings

 

The
section and paragraph headings contained herein are for convenience and reference only and are not intended to define or limit
the scope of any provision of this Agreement.

 

		17.	Counterparts

 

This
Agreement may be executed in counterpart copies, each of which shall be deemed an original but all of which together shall constitute
one and the same instrument comprising this Agreement.

 

    - 12 -

     

    

 

		18.	Attorneys’
Fees

 

Unless
otherwise contemplated in this Agreement, the parties hereto agree to pay their own attorneys’ fees and costs as may be
incurred in negotiating, preparing and drafting this Agreement, whether the same is finally entered into and executed or not.

 

		19.	Amendment;
Entire Agreement

 

No
modification, amendment, supplement to or waiver of this Agreement or any of its provisions shall be binding upon CCM or Administrator
unless made in writing and duly signed by authorized officers of each of CCM and Administrator. This Agreement constitutes the
entire understanding between the parties hereto, and all prior or contemporaneous correspondence, conversations or memoranda are
merged in, replaced by and without effect on this Agreement.

 

(signature
page follows)

 

    - 13 -

     

    

 

IN
WITNESS WHEREOF, the Parties have duly executed this Service Agreement as of the date first written above.

 

	CNL CAPITAL MARKETS CORP. (“CCM”)

	 	 
	 	 	 	 
	By: 	 /s/ Chirag J. Bhavsar	 	 
	 	 	 
	Name:	Chirag J. Bhavsar	 	 
	 	 	 
	Title:
	
        Co-Chief Executive Officer and Co-President

	 	 
	 	 	 	 
	 	 	 	 
	CNL Strategic Capital Management, LLC (“ADMINISTRATOR”) 

	 	 
	 	 	 	 
	By: 	/s/ Chirag J. Bhavsar	 	 
	 	 	 
	Name: 	Chirag J. Bhavsar	 	 
	 	 	 
	Title:
	
Chief Executive Officer

	 	 

 

    - 14 -

     

    

 

EXHIBIT
“A”

 

Services

 

		●	Answer
                                         and resolve all incoming administrative or servicing calls

		●	Provide
                                         personnel to assist with processing share subscriptions

		●	Negotiate
                                         and set up interactive voice response strategy & call flows

		●	Respond
                                         to incoming phone calls, e-mails, faxes, web, and mail correspondence relating to administrative
                                         services

		●	Develop,
                                         maintain and/or seek approvals for or consultative services on administrative forms (hard
                                         copy or electronic) required for daily operations (including the subscription agreement;
                                         investor, financial advisor or custodian administrative form changes; Transfer on death
                                         forms; Distribution Reinvestment Plan forms; Share Repurchase forms

		●	Ensuring
                                         updated investor forms are posted to www.cnlsecurities.com or other web venues
                                         as they become applicable (e.g. Vision) and facilitating the accurate dissemination of
                                         these documents to the Company websites

		●	Oversee
                                         and administer e-delivery program for investor communications including tax forms, monthly
                                         data feeds to broker-dealers, quarterly statements, proxies and annual reports

		●	Facilitate,
                                         oversee and act as a liaison to the transfer agent on behalf of the Company for the following
                                         non-exclusive list of services:

		○	Facilitate
                                         contracting, pricing and service level agreement negotiation

		○	Oversight
                                         of transfer agents, technology vendors, telephone vendors, printers, statement companies,
                                         DTCC, and qualified plan custodians.

		○	Facilitate
                                         new product / new offering procedures as they pertain to systems and technologies.

		○	Oversight
                                         of investor-qualified plan custodian calls

		○	Oversight
                                         of distributions processing and communications

		○	Oversight
                                         of commissions processing and communications

		○	Oversight
                                         of rescissions processing and communications

		○	Processing
                                         of redemptions and tracking and communication of the same

		○	Oversight
                                         of deposit processing

		○	Oversight
                                         of ownership transfer, resales and secondary market oversight, if applicable, such as
                                         tracking trends, unusual activity.

		○	Oversight
                                         of tax form generation and, where applicable; organizing the printing, mailing, re-printing,
                                         and electronic availability of the same.

		●	Implementation
                                         of mandatory cost basis regulation

		○	Oversight
                                         and development of Vision, FAN Web (Financial Advisor and Investor transactional websites)
                                         and FAN Mail.

		○	Facilitation
                                         and servicing of investments by foreign investors, if allowable.

		○	Oversight
                                         of various statement coordination, including account, distribution and confirmation statements

		○	Ensure
                                         invoice reconciliation from various vendors (by providing confirmation that vendors are
                                         adhering to the contracted pricing & terms)

		●	Provide
                                         analysis and consultative services, as needed, regarding transfer agent, custodial fund
                                         clearing services and related strategies

 

     

     

    

 

		●	Provide
                                         Company support, as needed, for business or regulatory purposes (including position reports
                                         and investor counts)

		●	Facilitate,
                                         but not undertake, customer and advisor oversight of:

		○	Transfer
                                         agent compliance and regulatory issues (SEC, FINRA, OFAC, Privacy Acts, and the Electronic
                                         Transactions Act and/or E-SIGN regulations)

		○	Blue
                                         sky matters (including communication and reporting to prevent blue sky violations)

		●	Internal
                                         & external client services training on processes and procedures

		●	Perform
                                         outbound research and problem resolution calls (as it pertains to not-in-good-order “NIGO”
                                         issues)

		●	Responding
                                         to all escalated issues including but not limited to:

		○	Investor
                                         and financial advisor phone calls

		○	New
                                         business and maintenance issues and cures

		○	Lost
                                         shareholder / escheatment

		○	TIN
                                         certifications / IRS B & C notices

		●	Maintenance
                                         and supervision of Vision and CNL Securities Corp. website log-in’s (as applicable)

		●	Act
                                         as liaison to clearing firms, custodians and broker-dealers, including set up, problem-resolution,
                                         running reports, and reconciliations

		●	Executive
                                         Management & Ad-hoc reports

		●	Generation
                                         of investor & financial advisor communications and provide consultation regarding
                                         the same

		●	Facilitation
                                         of systems enhancement / development and provide consultation regarding the same

		●	Development
                                         and maintenance of a data bridge for sales and tax reporting

		●	Assist
                                         in negotiation and continued oversight of custodial accounts and /or escrow arrangements

		●	Assist
                                         in the printing and mailing of offering documents where requested by the Administrator
                                         or the Company.

		●	Communications
                                         Services as follows:

		○	Oversee
                                         communications sent by DST or other service providers

		○	Development
                                         of fund investor stationery

		○	Development
                                         of operational forms and instructions

		○	Development
                                         and implementation of branding

		○	Creation
                                         of budget & planning for the next year

		○	Development
                                         of Company biographies

		○	Provide
                                         investor relations/communications services

		1.	General
                                         communication traffic coordination

		2.	Corporate
                                         restructuring

		3.	Coordinate
                                         and administer proxy firm and related services, including solicitation

		○	Coordinate
                                         approvals, print & distribute/mail (as needed):

		1.	Valuation
                                         letters

		2.	Tender
                                         offers

		3.	Notice
                                         of deemed distribution approach

		4.	Distribution
                                         declaration

 

    - 2 -

     

    

 

		○	Draft,
                                         coordinate approvals, print & distribute:

		1.	Annual
                                         and quarterly reports

		2.	Cover
                                         letter & envelopes for prospectus

		3.	Error
                                         letters

		4.	Statement
                                         updates (i.e. statement messages, tax messages)

		5.	Crisis
                                         and other communications as needed

		6.	Q&A’s

		○	Manage
                                         and/or communicate through corporate events:

		1.	Name
                                         changes

		2.	Liquidation
                                         events

		3.	Lawsuits

		4.	Tax
                                         issues

		5.	FA
                                         e-mails (announcements, press releases, etc.)

		6.	Other
                                         matters as they arise

		○	Manage
                                         platform communications:

		1.	Monthly
                                         e-newsletter

		2.	Arrange
                                         conference calls to BD/FA community

		○	Coordinate
                                         and maintain investor section of Company website

		1.	Post
                                         forms & filings

		2.	Arrange
                                         and test FanWeb and other links

		3.	Maintain/communicate
                                         other content as needed

 

    - 3 -

     

    

 

EXHIBIT
“B”

 

Administrator
Service Escalations to Administrator and Its Designee

 

		●	Legal
                                         requests

 

		●	Requests
                                         for shareholder lists

 

		●	Redemption
                                         requests when forms are received after the deadline

 

		●	Rescission
                                         requests

 

		●	Foreign
                                         investor approvals

 

		●	Questionable
                                         resales

 

		●	Some
                                         transfers requiring legal back upgmes_ex105.htm

EXHIBIT 10.5

 

SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase Agreement (this “Agreement”) is made and entered into as of __________ by and between G-MES Holdings Inc., a Nevada corporation (the “Company”) and the undersigned (the “Purchaser”). The Purchaser, together with the Company shall be referred to as the “Parties”.

 

WHEREAS, the Company desires to issue and sell to the Purchaser, and the Purchaser desires to purchase from the Company a convertible note described below under Section 1 of this Agreement pursuant to an exemption from registration under Section 4(2), Regulation D, and/or Regulation S under the Securities Act of 1933, as amended (the “1933 Act”) or other applicable exemptions on the terms and conditions set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows:

 

	
 
	
1.
	
Securities Sale and Purchase. The Company shall issue and sell to the Purchaser and the Purchaser agrees to purchase from the Company a convertible note in the form of Exhibit A (the “Note” or the “Securities”) in the principal amount of US$________ (the “Purchase Price”) pursuant to an exemption from registration provided by Section 4(2), Regulation D, and/or Regulation S promulgated under the 1933 Act or other applicable exemption.

 

	
 
	
2.
	
Closing. At the closing, the Company will deliver to the Purchaser the Note and the Purchase Price shall be paid by the Purchaser via wire transfer of immediately available funds to an account designated by the Company. The closing shall be held on such date as the parties may agree upon (the “Closing” and the “Closing Date”) at the offices G-MES HOLDINGS INC., 280 Woodlands Industrial Park E5, #09-44, Harvest @ Woodlands Building, Singapore 757322, at 10:00 a.m., or at such other location or by such other means upon which the parties may agree; provided, that all of the conditions set forth in Section 2 hereof and applicable to the Closing shall have been fulfilled or waived in accordance herewith.

 

	
 
	
3.
	
Representations, Warranties and Covenants of the Company. The Company represents and warrants to the Purchaser, as of the date hereof, as follows:

 

	
 
	
(a)
	
Organization and Standing. The Company is a duly organized corporation, validly existing and in good standing under the laws of the State of Nevada, has full power to carry on its business as and where such business is now being conducted and to own, lease and operate the properties and assets now owned or operated by it and is duly qualified to do business and is in good standing in each jurisdiction where the conduct of its business or the ownership of its properties requires such qualification.

 

	
 
	
(b)
	
Authorization and Power. The execution, delivery and performance of this Agreement and the consummation of the transaction contemplated hereby have been duly authorized by the Board of Directors of the Company. The Agreement has been (or upon delivery will be) duly executed by the Company is or, when delivered in accordance with the terms hereof, will constitute, assuming due authorization, execution and delivery by each of the parties thereto, the valid and binding obligation of the Company enforceable against the Company in accordance with its terms.

	
 
	
 
	
 

	
 
	
(c)
	
No Conflict. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby do not (i) violate or conflict with the Company’s Certificate of Incorporation, By-laws or other organizational documents, (ii) conflict with or result (with the lapse of time or giving of notice or both) in a material breach or default under any material agreement or instrument to which the Company is a party or by which the Company is otherwise bound, or (iii) violate any order, judgment, law, statute, rule or regulation applicable to the Company, except where such violation, conflict or breach would not have a Material Adverse Effect on the Company. This Agreement when executed by the Company will be a legal, valid and binding obligation of the Company enforceable in accordance with its terms (except as may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws and equitable principles relating to or limiting creditors’ rights generally).

 

	 
	1
	

 
	 

 

	
 
	
(d)
	
Authorization. Issuance of the Note to Purchasers has been duly authorized by all necessary corporate actions of the Company.

 

	
 
	
(e)
	
Litigation and Other Proceedings. There are no actions, suits, proceedings or investigations pending or, to the knowledge of the Company, threatened against the Company at law or in equity before or by any court or Federal, state, municipal or their governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign which could materially adversely affect the Company. The Company is not subject to any continuing order, writ, injunction or decree of any court or agency against it which would have a material adverse effect on the Company.

 

	
 
	
(f)
	
Use of Proceeds. The proceeds of this Offering and sale of the Note, net of payment of placement expenses, will be used by the Company for expansion, working capital and other general corporate purposes.

 

	
 
	
(g)
	
Consents/Approvals. No consents, filings (other than Federal and state securities filings relating to the issuance of the Note pursuant to applicable exemptions from registration, which the Company hereby undertakes to make in a timely fashion), authorizations or other actions of any governmental authority are required to be obtained or made by the Company for the Company’s execution, delivery and performance of this Agreement which have not already been obtained or made or will be made in a timely manner following the Closing.

 

	
 
	
(h)
	
Disclosure. No representation or warranty by the Company in this Agreement, the Agreement, nor in any certificate, Schedule or Exhibit delivered or to be delivered pursuant to this Agreement or the Transaction Documents: contains or will contain any untrue statement of material fact or omits or will omit to state a material fact necessary to make the statements contained herein or therein not misleading. To the knowledge of the Company and its subsidiaries at the time of the execution of this Agreement, there is no information concerning the Company and its subsidiaries or their respective businesses which has not heretofore been disclosed to the Purchasers that would have a Material Adverse Effect.

 

	
 
	
(i)
	
Compliance with Laws. The business of the Company and its subsidiaries has been and is presently being conducted so as to comply with all applicable material federal, state and local governmental laws, rules, regulations and ordinances.

 

	
 
	
4.
	
Purchaser Representations, Warranties and Agreements. The Purchaser hereby acknowledges, represents and warrants as follows:

 

	
 
	
(a)
	
Organization; Authority. Such Purchaser is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with the requisite corporate or partnership power and authority to enter into and to consummate the transactions contemplated by the applicable Documents and otherwise to carry out its obligations thereunder. The execution, delivery and performance by such Purchaser of the transactions contemplated by this Agreement has been duly authorized by all necessary corporate or, if such Purchaser is not a corporation, such partnership, limited liability company or other applicable like action, on the part of such Purchaser. Each of this Agreement and other Documents has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application.

 

	
 
	
(b)
	
Investment Intent. Such Purchaser is acquiring the Note as principal for its own account for investment purposes only and not with a view to or for distributing or reselling such Note or any part thereof, without prejudice, however, to such Purchaser’s right at all times to sell or otherwise dispose of all or any part of such Note in compliance with applicable federal and state securities laws. Subject to the immediately preceding sentence, nothing contained herein shall be deemed a representation or warranty by such Purchaser to hold the Note for any period of time. Such Purchaser is acquiring the Note hereunder in the ordinary course of its business. Such Purchaser does not have any agreement or understanding, directly or indirectly, with any Person to distribute any of the Securities.

 

	 
	2
	

 
	 

 

	
 
	
(c)
	
Purchaser Status.

 

	
 
	
(i)
	
The Purchaser agrees and acknowledges that it was not, a “U.S. Person” (as defined below) at the time the Purchaser was offered the Note and as of the date hereof:

 

	
 
	
(A) 
	
Any natural person resident in the United States;

 

	
 
	
(B)
	
Any partnership or corporation organized or incorporated under the laws of the United States;

 

	
 
	
(C)
	
Any estate of which any executor or administrator is a U.S. person;

 

	
 
	
(D) 
	
Any trust of which any trustee is a U.S. person;

 

	
 
	
(E)
	
Any agency or branch of a foreign entity located in the United States;

 

	
 
	
(F)
	
Any non-discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a U.S. person;

 

	
 
	
(G)
	
Any discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated, or (if an individual) resident of the United States; and

 

	
 
	
(H)
	
Any partnership or corporation if (i) organized or incorporated under the laws of any foreign jurisdiction and (ii) formed by a U.S. person principally for the purpose of investing in securities not registered under the 1933 Act, unless it is organized or incorporated, and owned, by accredited Purchasers (as defined in Rule 501(a) of Regulation D promulgated under the 1933 Act) who are not natural persons, estates or trusts.

 

“United States” or “U.S.” means the United States of America, its territories and possessions, any State of the United States, and the District of Columbia.

 

	
 
	
(ii)
	
The Purchaser understands that no action has been or will be taken in any jurisdiction by the Company that would permit a public offering of the Note in any country or jurisdiction where action for that purpose is required.

 

	
 
	
(iii)
	
The Purchaser (i) as of the execution date of this Agreement is not located within the United States, and (ii) is not purchasing the Note for the account or benefit of any U.S. Person, except in accordance with one or more available exemptions from the registration requirements of the 1933 Act or in a transaction not subject thereto.

 

	
 
	
(iv)
	
The Purchaser will not resell the Securities except in accordance with the provisions of Regulation S (Rule 901 through 905 and Preliminary Notes thereto), pursuant to a registration statement under the 1933 Act, or pursuant to an available exemption from registration; and agrees not to engage in hedging transactions with regard to such securities unless in compliance with the 1933 Act.

 

	
 
	
(v)
	
The Purchaser will not engage in hedging transactions with regard to Note of the Company prior to the expiration of the distribution compliance period specified in Category 2 or 3 (paragraph (b)(2) or (b)(3)) in Rule 903 of Regulation S, as applicable, unless in compliance with the 1933 Act; and as applicable, shall include statements to the effect that the securities have not been registered under the 1933 Act and may not be offered or sold in the United States or to U.S. persons (other than distributors) unless the securities are registered under the 1933 Act, or an exemption from the registration requirements of the 1933 Act is available.

 

	
 
	
(vi)
	
No form of “directed selling efforts” (as defined in Rule 902 of Regulation S under the 1933 Act), general solicitation or general advertising in violation of the 1933 Act has been or will be used nor will any offers by means of any directed selling efforts in the United States be made by the Purchaser or any of their representatives in connection with the offer and sale of the Note.

 

	 
	3
	

 
	 

 

	
 
	
(d)
	
General Solicitation. Such Purchaser is not purchasing the Note as a result of any advertisement, article, notice or other communication regarding the Note published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.

 

	
 
	
(e)
	
Access to Information. Such Purchaser acknowledges that it has reviewed the disclosure materials and has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Note and the merits and risks of investing in the Note; (ii) access to information about the Company and the Subsidiaries and their respective financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment. Neither such inquiries nor any other investigation conducted by or on behalf of such Purchaser or its representatives or counsel shall modify, amend or affect such Purchaser’s right to rely on the truth, accuracy and completeness of the Disclosure Materials and the Company’s representations and warranties contained in the Transaction Documents.

 

	
 
	
(f)
	
Independent Investment Decision. Such Purchaser has independently evaluated the merits of its decision to purchase the Note pursuant to the Agreement, and such Purchaser confirms that it has not relied on the advice of any other Purchaser’s business and/or legal counsel in making such decision. Such Purchaser has not relied on the business or legal advice of the Company or any of its agents, counsel or Affiliates in making its investment decision hereunder, and confirms that none of such Persons has made any representations or warranties to such Purchaser in connection with the transactions contemplated by the Transaction Documents.

 

	
 
	
5.
	
Miscellaneous

 

	
 
	
(a)
	
Confidentiality. The Purchaser covenants and agrees that it will keep confidential and will not disclose or divulge any confidential or proprietary information that such Purchaser may obtain from the Company pursuant to financial statements, reports, and other materials submitted by the Company to such Purchaser in connection with this offering or as a result of discussions with or inquiry made to the Company, unless such information is known, or until such information becomes known, to the public through no action by the Purchaser; provided, however, that a Purchaser may disclose such information (i) to its attorneys, accountants, consultants, and other professionals to the extent necessary in connection with his or her investment in the Company so long as any such professional to whom such information is disclosed is made aware of the Purchaser’s obligations hereunder and such professional agrees to be likewise bound as though such professional were a party hereto, (ii) if such information becomes generally available to the public through no fault of the Purchaser, or (iii) if such disclosure is required by applicable law or judicial order.

 

	
 
	
(b)
	
Successors. The covenants, representations and warranties contained in this Agreement shall be binding on the Purchaser’s and the Company’s heirs and legal representatives and shall inure to the benefit of the respective successors and assigns of the Company. The rights and obligations of this Subscription Agreement may not be assigned by any party without the prior written consent of the other party.

 

	 
	4
	

 
	 

 

	
 
	
(c)
	
Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original agreement, but all of which together shall constitute one and the same instrument.

 

	
 
	
(d)
	
Execution by Facsimile. Execution and delivery of this Agreement by facsimile transmission (including the delivery of documents in Adobe PDF format) shall constitute execution and delivery of this Agreement for all purposes, with the same force and effect as execution and delivery of an original manually signed copy hereof.

 

	
 
	
(e)
	
Governing Law and Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada applicable to contracts to be wholly performed within such state and without regard to conflicts of laws provisions. Any legal action or proceeding arising out of or relating to this Subscription Agreement and/or the Offering Documents may be instituted in the courts of the State of Nevada sitting in Nevada, and the parties hereto irrevocably submit to the jurisdiction of each such court in any action or proceeding. Purchaser hereby irrevocably waives and agrees not to assert, by way of motion, as a defense, or otherwise, in every suit, action or other proceeding arising out of or based on this Subscription Agreement and/or the Offering Documents and brought in any such court, any claim that Purchaser is not subject personally to the jurisdiction of the above named courts, that Purchaser’s property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum or that the venue of the suit, action or proceeding is improper.

 

	
 
	
(f)
	
Notices. All notices, requests, demands, claims and other communications hereunder shall be in writing and shall be delivered by certified or registered mail (first class postage pre-paid), guaranteed overnight delivery, or facsimile transmission if such transmission is confirmed by delivery by certified or registered mail (first class postage pre-paid) or guaranteed overnight delivery, to the following addresses and facsimile numbers (or to such other addresses or facsimile numbers which such party shall subsequently designate in writing to the other party):

 

	
 
	(i)	if to the Company:
	
 
	
 
	
G-MES HOLDINGS INC.,

Attn: Saw Peng Hao

280 Woodlands Industrial Park E5, #09-44, 

Harvest @ Woodlands Building, 

Singapore 757322, 

	
 
	
 
	
 

	
 
	
(ii)
	
if to the Purchasers: 

	
 
	
 
	
 

	
 
	
 
	
To the addresses set forth on the signature pages.

 

	
 
	
(g)
	
Entire Agreement. This Agreement (including the Exhibits attached hereto) and other Transaction Documents delivered at the Closing pursuant hereto, contain the entire understanding of the parties in respect of its subject matter and supersede all prior agreements and understandings between or among the parties with respect to such subject matter. The Exhibits constitute a part hereof as though set forth in full above.

 

	
 
	
(h)
	
Amendment; Waiver. This Agreement may not be modified, amended, supplemented, canceled or discharged, except by written instrument executed by the Company and the Purchasers of not less than a majority of the principal amount of the Notes. No failure to exercise, and no delay in exercising, any right, power or privilege under this Agreement shall operate as a waiver, nor shall any single or partial exercise of any right, power or privilege hereunder preclude the exercise of any other right, power or privilege. No waiver of any breach of any provision shall be deemed to be a waiver of any proceeding or succeeding breach of the same or any other provision, nor shall any waiver be implied from any course of dealing between the parties. No extension of time for performance of any obligations or other acts hereunder or under any other agreement shall be deemed to be an extension of the time for performance of any other obligations or any other acts. The rights and remedies of the parties under this Agreement are in addition to all other rights and remedies, at law or equity, that they may have against each other.

 

	
 
	
(i)
	
Severability. If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefore, and upon so agreeing, shall incorporate such substitute provision in this Agreement.

 

[SIGNATURE PAGE FOLLOWS]

 

	 
	5
	

 
	 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.

 

	
COMPANY:
	
G-MES HOLDINGS INC.
	
				
	
 
	
By:
		
	
 
	
Name:
	
Saw Peng Hao
	
	
 
	
Title:
	
Director
	

 

	
PURCHASER:
		
	
 
	
Name: 
	
			
	
 
	
Address: 
	
	
 
	
 
	
 

		
Contact no.:
	
		
Email: 
	

 

	 
	6
	

 
	 

 

Exhibit A

 

4% CONVERTIBLE NOTE

 

For U.S. Investors:

 

[THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (C) IN COMPLIANCE WITH RULE 144 OR 144A THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, (D) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT, OR (E) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS, AND THE HOLDER HAS, PRIOR TO SUCH SALE, FURNISHED TO THE COMPANY AN OPINION OF COUNSEL OR OTHER EVIDENCE OF EXEMPTION, IN EITHER CASE REASONABLY SATISFACTORY TO THE COMPANY. HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.]

 

For Non-U.S. Investors:

 

[THESE SECURITIES WERE ISSUED IN AN OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT U.S. PERSONS (AS DEFINED IN REGULATION S) PURSUANT TO REGULATION S PROMULGATED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). ACCORDINGLY, NONE OF THE SECURITIES REPRESENTED HEREBY HAVE BEEN REGISTERED UNDER THE SECURITIES ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED OR SOLD IN THE UNITED STATES OR, DIRECTLY OR INDIRECTLY, TO U.S. PERSONS EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN ACCORDANCE WITH THE SECURITIES ACT.]

 

G-MES HOLDINGS INC.

 

 (A Nevada Corporation)

 

4% CONVERTIBLE NOTE

 

DUE _______________

 

	
Original Issuance Date: 
	
Principal Amount: $

 

FOR VALUE RECEIVED, G-MES HOLDINGS INC., a Nevada corporation (the “Company”), hereby unconditionally promises to pay to ________________ (together with its registered assigns, the “Holder”) on ________________ (the “Maturity Date”) the principal sum of __________________________ (U.S.$_______/-) (the “Principal”), and to pay to the Holder interest on the unpaid principal amount of this Note as provided in Article I hereof. 

   
	 
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ARTICLE I

 

Section 1.1 Definitions. The following terms shall have the meanings set forth below:

 

“Business Day” means a day other than Saturday, Sunday or any day on which banks located in the Republic of Singapore are authorized or obligated to close.

 

“Conversion Price” means $0.15 per share.

 

“Dollars” and “$” means lawful money of the United States of America.

 

“Note” means this 4% Convertible Note of the Company issued to the Holder, as modified and supplemented and in effect from time to time.

 

“Person” means any person or entity of any nature whatsoever, specifically including an individual, a firm, a company, a corporation, a partnership, a limited liability company, a trust or other entity.

 

“Stock” means the Company’s $.001 par value per share common stock.

 

ARTICLE II

 

Section 2.1 Principal. Subject to Section 5.1 herein, the entire unpaid principal amount of this Note shall be paid on the Maturity Date. Promptly following the payment in full of this Note, the Holder shall surrender this Note to the Company for cancellation.

 

Section 2.2 Interest. Interest shall accrue (on a compounded basis) on the daily unpaid principal amount of this Note, for each day during the period from and including the date hereof (the “Commencement Date”) to but excluding the date such Note shall be paid in full, at a rate of four percent (4%) per annum (the “Interest Rate”) and shall be payable on the Maturity Date.

 

ARTICLE III

 

Section 3.1 Payments Generally. All payments of principal and interest to be made by the Company in respect of this Note shall be made in Dollars by delivery to the Holder, at the address the Holder provides to the Company, not later than 12:00 noon Singapore time on the date on which such payment shall be due. If the due date of any payment in respect of this Note would otherwise fall on a day that is not a Business Day, such due date shall be extended to the next succeeding Business Day, and interest shall be payable on any principal so extended for the period of such extension. All payments by the Company under this Note will be made without setoff or counterclaim and free and clear of, and without deductions for, any taxes, fees or other expenses or claims of any kind.

 

Section 3.2 Prepayments. At any time, and from time to time, the Company may, at its option, prepay this Note (in an amount up to but not exceeding the unpaid principal amount hereof and any accrued interest hereon) in whole or in part without premium or penalty.

 

ARTICLE IV

 

Section 4.1 Mandatory Conversion. The outstanding principal and interest on the Note will convert automatically into shares of the Issuer’s common stock as soon as the Securities Exchange Commission has declared the S-1 application of the Issuer effective.

 

Section 4.2 Conversion Procedure. To convert this Note pursuant to this Article IV, the Holder must (i) complete and sign subscription documents reasonably requested by the Company and (ii) if the conversion is of the entire unpaid principal of, and interest on, this Note, then surrender this Note to the Company. As promptly as practicable after delivery of subscription documents in accordance with this Section 4.2, the Company shall issue and deliver to Holder, a certificate or certificates for the full number of whole Shares issuable upon the conversion of this Note in accordance with the provisions of this Article IV.

 

	 
	8
	

 
	 

  

Section 4.3 Early Conversion. The Holder is not permitted to convert this Note before the Securities Exchange Commission declares the S-1 application of the Issuer effective.

 

Section 4.4 Investment Representations. This Note has been issued subject to certain investment representations of the original Holder set forth in the Securities Purchase Agreement and may be transferred or exchanged only in compliance with the Securities Purchase Agreement and applicable federal and state securities laws and regulations.

 

Section 4.5 Reservation of Shares; Shares to be Fully Paid. The Company shall reserve, out of its authorized but unissued Shares, sufficient Shares to provide for the conversion of the entire Note. The Company covenants that all Shares which may be issued upon conversion of this Note will, upon issuance, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges with respect to the issuance and delivery thereof.

 

ARTICLE V

 

Section 5.1 Event of Default. "Event of Default", wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

 

(a) default in the payment of any interest in respect of this Note within ten (10) Business Days after it becomes due and payable; or

 

(b) default in the payment of the outstanding principal amount of this Note at its Maturity Date; or

 

(c) the entry of a decree or order by a court having jurisdiction in the premises adjudging the Company a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Company under Federal bankruptcy law or any other applicable Federal or state law, or appointing a receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of the property of the Company, or ordering the winding up or liquidation of the affairs of the Company; or

 

(d) the institution by the Company of proceedings to be adjudicated a bankrupt or insolvent, or the consent by the Company to the institution of bankruptcy or insolvency proceedings against it, or the filing by the Company of a petition or answer or consent seeking reorganization or relief under Federal bankruptcy law or any other applicable Federal or state law, or the consent by the Company to the filing of such petition or to the appointment of a receiver, liquidator, assignee, trustee, sequestrator or similar official of the Company or of any substantial part of the property of the Company, or the making by the Company of an assignment for the benefit of creditors, or the admission by the Company in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Company in furtherance of any such action.

 

Section 5.2 Acceleration of Note. If an Event of Default occurs and is continuing, then and in every such case the Holder may declare the outstanding principal amount of this Note (including accrued interest as provided in Article III hereof) to be due and payable immediately, by a notice in writing to the Company, and upon any such declaration such principal shall become immediately due and payable. Notwithstanding the foregoing, if an Event of Default referenced in paragraph (c) or paragraph (d) of Section 5.1 occurs, the outstanding principal amount of this Note (including accrued interest as provided in Article III hereof) shall automatically become due and payable immediately without any declaration or other action on the part of the Holder. At any time after the outstanding principal amount of this Note shall become immediately due and payable and before a judgment or decree for payment of the money due has been obtained, the Holder, by written notice to the Company, may rescind and annul any acceleration and its consequences.

 

	 
	9
	

 
	 

 

ARTICLE VI

 

                              Section 6.1 Governing Law; Jurisdiction. This Note shall be governed by, and construed in accordance with, the laws of the State of Nevada, without regard to the conflicts of laws provisions thereof. The Company hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the Courts of the State of Nevada in any action or proceeding arising out of or relating to this Note, or for recognition or enforcement of any judgment, and hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in the State of Nevada. The Company hereby agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. The Company hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Note in any court referred to above, and hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. The Company irrevocably consents to service of process in the manner provided for notices below. Nothing in this Agreement will affect the right of the Holder to serve process in any other manner permitted by law.

 

Section 6.2 Successors. All agreements of the Company in this Note shall bind its successors and permitted assigns. This Note shall inure to the benefit of the Holder and its permitted successors and assigns. The Company shall not delegate any of its obligations hereunder without the prior written consent of Holder.

 

Section 6.3 Amendment, Modification or Waiver. No provision of this Note may be amended, modified or waived except by an instrument in writing signed by the Company and the Holder.

 

Section 6.4 Legend. This Note, and any note issued in exchange or substitution for this Note, shall bear the legend appearing on the first page hereof.

 

Section 6.5 Delay or Omission Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right, or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any right, power or privilege. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

 

[Signature Page Follows]

 

	 
	10
	

 
	 

 

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed by an authorized officer thereof as of the date and year first above written.

 

 

	
 
	
G-MES HOLDINGS INC.
	
				
	
 
	
By:
		
	
 
	
Name:
	
SAW PENG HAO
	
	
 
	
Title:
	
Director
	

  

 

 

	
11

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