Memorandum of Understanding
This Memorandum of Understanding ("Memorandum" or "MOU"), dated as of this the
25th day of August, 2003, by and between the TCAL Investment Group ("TCAL")
having offices at 00 Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx X0X 188 and LIVESTAR
Entertainment Group, Inc. having offices at 0xx Xxxxx 00 Xxxx 0xx Xxxxxx,
Xxxxxxxxx, XX, X0X 0X0 ("LSTA" or the "Company" or "LIVESTAR").
A. WHEREAS, LSTA is a Corporation with a core business plan of developing
entertainment entities, specifically; Liquor Licensed Entertainment
Establishments (namely nightclubs and lounges) and Live Entertainment (concerts
and special events).
B. WHEREAS, TCAL is a group of businessmen led by Xxxxxxxx Xxxx ("TL") that have
interests in the entertainment and nightclub industries throughout North
America.
C. WHEREAS, LSTA and TCAL ("party" or "parties") hereto endeavour to negotiate
and finalize the purchase of a controlling interest of LSTA by TCAL through a
Tender Offer to the LSTA shareholders and the subsequent development of the
Company through, including but not limited to, acquisitions, corporate
structure changes, capital changes and financing of LSTA (the "Transaction") and
subsequently enter into a potentially mutually beneficial relationship where
both parties will contribute to the success of the Company generally consistent
with the terms herein, the parties set forth the following:
1. Terms of Tender Offer
Subject to further negotiations and completion of adequate due diligence by the
parties to the Transaction, TCAL intends to offer to the shareholders of LSTA to
purchase minimum of 51% of the issued and outstanding shares of LSTA at a price
of no less than $0.05, nor more than $0.07/share. The actual terms and the
commencement date of any tender offer shall be determined subsequent to the date
of this MOU and shall be in compliance with provisions of the Xxxxxxxx Act,
being Section 14 of the Securities Exchange Act of 1934.
The acquisition of LSTA shares will be structured as a "friendly tender offer"
under the Xxxxxxxx Act.
2. Definitive Agreement
The parties will endeavour to negotiate, finalize and execute a Definitive
Agreement regarding the Transaction within 60 days of the date of this MOU. The
Definitive Agreement, subject to the parties reaching an agreement on various
items including but not limited to the items described in Sections, 1, 3, 4, 5,
6 and 7 herein, will detail the final terms of the Transaction.
3. Funding Plan
The parties will endeavour to finalize a Funding Plan for the Company including
the following: The planning and preparation of the Company for an application
for Nasdaq Small Cap, National Market or AMEX. The providing of up to $3 Million
in funding or introducing the Company to funding sources.
4. Capitalization Plan
The parties will endeavour to finalize any proposals by TCAL regarding a
reorganization or recapitalization of the Company.
5. Board of Directors
The parties will endeavour to finalize a reorganization of the Board of
Directors of the Company as per the following:
o New members with expertise and experience in the fields of
entertainment will be nominated and subsequently elected to the Board
of Directors.
o TL and Xxx Xxxxxxx, the Company's present President & CEO ("RH"), will
be nominated to serve as Co-Chairmen.
o TL and RH will mutually nominate a Board Director to serve as Executive
Chairman.
o The new Board of Directors of LSTA will consist of no less than seven
("7") members.
6. Management
The parties will endeavour to finalize a reorganization of the Management of the
Company as per the following:
o New Management candidates with expertise and experience in the fields
of entertainment will be nominated to be hired for the positions of
CEO, President, COO and CFO.
o Xxxxx Xxxxx, the Company's present CFO and COO ("EK"), TL and RH may be
retained as consultants.
o EK and RH, if necessary, will serve in their present offices during the
proposed Management and Board of Director's transition.
7. Standards Committee
The parties will endeavour to finalize the establishment of various Standards
Committees. These proposed Standards Committees will be formed by outside Board
Directors and other outside consultants to make up the following committees:
o Compensation Committee (as defined by the U.S. Securities and Exchange
Commission "SEC")
o Audit Committee (as defined by the SEC)
o Operations Standards & Compliance Committee (a committee to implement,
oversee and regulate the best practices of the various business
operations of the Company)
8. Due Diligence
The Transaction contemplated herein, specifically the above Terms of Tender
Offer in Section 2, is subject to due diligence to be carried out by the parties
mutual staff, accountants and lawyers at each others expense.
9. Confidentiality
Both Parties agree to keep all information received, verbal or written
confidential and further agree to execute any non disclosure or confidentiality
agreements required by the requesting party. All original documents or copies
of original documents provided through the due diligence process will be
returned to other party in the event there is no closing of the contemplated
transaction as intended by this letter. The parties agree that no copies or
information provided will be retained by either party, including; resumes or
bios of employees, financial statements, inventory lists, liquor permits,
leases, notes from staff interviews, or notes from meetings held during the due
diligence process. Either party will have right to present this Memorandum,
information received and the financial statements to its Board of Directors,
Management, Investment Bankers, Consultants and Investors in its efforts to
close this Transaction. Notwithstanding the foregoing, LSTA shall have the
right to issue press releases in conformity with Section 10 below.
10) Press Releases
LSTA will have the right to issue press releases at any time regarding
this Memorandum, the closing of the Transaction or other significant
events. All press releases will require approval of its content by TL
prior to its release. TL agrees to not unreasonably withhold such
approval. We will issue a press release on signing of this Memorandum.
11) Term
a) The Term of this Memorandum shall be from the date of this
Memorandum for a period of 60 days. b)The parties can agree to extend
this Memorandum, or amend this Memorandum or replace this Memorandum
and/or execute additional agreements to reflect the further business
relationship of the parties. c) This Memorandum will remain in force
until the item discussed in 11b above is fully executed.
12) Termination
a) Either party may terminate this Memorandum by giving the other
party 30 days written notice. b) Upon termination all confidential
information will be returned by each party to the other party from
which the confidential information was received.
13) Further Agreements
If deemed necessary by both parties, the parties will subsequently
execute further full and binding agreement(s) ("Agreement(s)") setting
forth the rights and obligations between them.
14) Relationship of the Parties
Nothing in this Memorandum shall be construed to constitute either
party as the agent, employee or representative of the other party.
Neither party will make or have the power or authority to act for,
bind or otherwise create or assume any obligation on behalf of the
other party for any purpose whatsoever, without written permission of
the other party.
15) Notices and Modifications
Any notice or other communication hereunder shall be in writing and
sent to the principal address of the party set forth in the preamble
to this Memorandum. No modification to any provision hereof shall be
effective unless stated in writing and signed by both parties hereto.
16) Waiver
No term or provision hereof shall be deemed waived and no breach
excused unless such waiver or consent shall be in writing and signed
by the party claimed to have waived or consented.
17) Entire Understanding
This Memorandum, together with any attachments hereto, constitutes the
entire understanding between the parties in relation to the subject
matter hereof and supersedes all prior negotiations and agreements
between the parties, whether written or oral.
18) Governing Law
This Memorandum shall be construed in accordance with the laws of the
State of Nevada without giving effect to its conflict of laws
principles.
Sincerely,
________________________________
Xxx Xxxxxxx
LIVESTAR Entertainment Group, Inc.
Agreed and Accepted:
________________________________
Xxxxxxxx Xxxx
TCAL Investment Group
