DEFINITIVE JOINT VENTURE
AGREEMENT
by and between
LIVESTAR ENTERTAINMENT
GROUP, INC.
and
GLOBAL BANCORP,
INC.
December 28, 2004
DEFINITIVE
JOINT VENTURE AGREEMENT
This DEFINITIVE
JOINT VENTURE AGREEMENT ("AGREEMENT") is made as of December 28,
2004, by and between GLOBAL BANCORP, INC., a Nevada corporation
("GBBI"), and LIVESTAR ENTERTAINMENT GROUP, INC., a Nevada
corporation ("LVSG"). GBBI and LVSG are hereunder also referred to
collectively as the "PARTIES" and individually as a
"PARTY."
A. LVSG is an
entertainment holding company currently transitioning to a holding
company structure.
B. GBBI is
development company with a focus on advanced digital media
technologies including Video on Demand, Voice Over Internet
(“VoIP”), and a smart card bank platform for future
integrated commerce and e-commerce applications such as Web-Enabled
ATMs (personal banking in the home).
C. The Parties
desire to form a joint venture to pursue the Business, as hereafter
defined.
NOW THEREFORE,
for valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the Parties hereby agree as
follows:
1.
DEFINITIONS
1.1 "AFFILIATE"
means any Person: (a) that is controlled by, controls, or is under
common control with a Party (collectively, a "CONTROLLED PERSON");
or (b) that is controlled by, controls, or is under common control
with any such Controlled Person, in each case for so long as such
control continues; provided, however, that for purposes of Section
3.2 Affiliates of LVSG shall include Persons in which LVSG owns,
directly or indirectly, at least thirty percent (30%) of the
outstanding voting shares, regardless of whether such control
actually exists. For purposes of this definition, "CONTROL" shall
mean the possession, directly or indirectly, of power to direct or
cause the direction of management or policies (whether through
ownership of securities or other ownership interests, by contract
or otherwise).
1.2 "APPLICABLE
LAW" means, as to any Person, any statute, law, rule, regulation,
directive, treaty, judgment, order, decree or injunction of any
Governmental Authority that is applicable to or binding upon such
Person or any of its properties.
1.3 "BOARD"
means the board of directors of the Company.
1.4
"BUSINESS" means the business of the Company as described
herein.
1.5
"BUSINESS DAY" means a day on which commercial banks in
Nevada.
1.6 "CLOSING
DATE" is defined in Section 3.2.
1.7 "COMMON
STOCK" means common stock of the Company as authorized by the
Articles.
1.8
"COMPANY" is defined in Section 3.1.
1.9 "COMPANY
INTEREST" means, as to any Person, the percentage interest
represented by the Securities then held by such Person divided by
all then outstanding Securities (on an as-converted to Common Stock
basis).
1.10
"CONFIDENTIAL INFORMATION" is defined in Section 5.1.
1.11
"DISCLOSING PARTY" is defined in Section 5.1.
1.12
"EFFECTIVE DATE" means the date of this Agreement.
1.13
"ESTABLISHMENT DATE" is defined in Section 3.1.
1.14
"GOVERNMENTAL AUTHORITY" means any domestic or foreign government,
governmental authority, court, tribunal, agency or other
regulatory, administrative or judicial agency, commission or
organization, and any subdivision, branch or department of any of
the foregoing.
1.15 "LAUNCH
DATE" is defined in Section 3.1.
1.16 "PARTY"
and "PARTIES" are defined in the opening paragraph of this
Agreement.
1.17 "PERSON"
means a natural individual, Governmental Authority, partnership,
firm, corporation, or other business association.
1.18
"PRESIDENT" means the president of the Company.
1.19
"RECEIVING PARTY" is defined in Section 5.1.
1.20
"SECURITIES" means all outstanding shares of Common Stock, and any
other equity securities of the Company or instruments exercisable
for or convertible into Common Stock.
1.21
"TERRITORY" means the world.
1.22 "TERM"
is defined in Section 7.1.
1.23
"TRANSACTION DOCUMENTS" means this Agreement, the Asset Purchase
Agreement.
1.24
"TRANSFERRED SHARES" is defined in Section 3.2.
1.25 "ASSET
PURCHASE AGREEMENT" means the Asset Purchase Agreement to be
entered into between GBBI and the Company on the Closing Date in
the form of attached Exhibit 1.0.
2. PURPOSE OF
JOINT VENTURE
The Parties
hereby associate themselves in a joint venture relationship which
shall have as its principal purpose the establishment and
development of the Business. The Business will be limited initially
to (1) developing, marketing and providing of a Voice Over IP
service (“VoIP”) throughout the world, with initial
rollout in Canada and the United States and (2) activities
incidental thereto.
3.
ESTABLISHMENT AND CAPITALIZATION OF THE COMPANY
3.1
Establishment. The Parties agree that the joint venture
contemplated by this Agreement shall be carried out exclusively
through a newly-formed Nevada corporation initially established by
both LVSG and GBBI (the "COMPANY"). The Company's corporate name
shall be VOXBOX Telecom, Inc. The Parties shall use commercially
reasonable efforts to cause the Establishment Date to occur on or
before February 1, 2005 and the Launch Date to occur on or before a
date to be agreed upon by the Parties after mutual discussions. For
the purposes of this Agreement, "ESTABLISHMENT DATE" means the date
on which the Company is established and "LAUNCH DATE" means the
date on which the Company commences commercial
operations.
3.2
Capitalization.
(a) Initial Capitalization. The Company shall, as of the
Establishment Date, have authorized capital stock consisting of two
classes of shares designated as Preferred Stock and Common Stock.
The Company's initial equity shall be funded as follows:
(i) GBBI Initial Subscription. On or prior to the
Establishment Date, GBBI shall subscribe for 10,000 shares of
Common Stock, representing a one-hundred-percent (100%) Company
Interest, for an aggregate purchase price of the transfer of the
rights to the VOXBOX service.
(ii) LVSG Purchase. On a date within fifteen (15) days after
the Establishment Date mutually agreed by the Parties (the "CLOSING
DATE"),
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(a)GBBI shall
(x) sell to LVSG, and LVSG shall purchase from GBBI, 800 shares of
Common Stock representing a four percent (4%) Company Interest (the
"TRANSFERRED SHARES") for an aggregate purchase price of $40,000
USD which the parties acknowledge will be paid to GBBI by LVSG.
($4950 USD has been paid in advance to GBBI prior the date of this
Agreement and the balance of $35,050 USD will be owing to GBBI to
be paid by June 28, 2005).
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(b) On or prior
to the Closing Date, LVSG shall subscribe for 8,400 shares of
Common Stock, representing a forty five-percent (46%) Company
Interest the (“Financing Purchase Shares”), for an
aggregate purchase price of $420,000 USD in financing for the
Company (the “Financing Purchase Price”).
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LVSG shall
provide the Company with the Financing Purchase Price $420,000.00
USD) as per 12 monthly payments of $35,000 USD as per the following
schedule (the “Financing Schedule”):
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The Parties
agree that if required by that LVSG may forward the Financing
Purchase Price in lesser or greater amounts and at more frequent or
less frequent times as per the above Financing Schedule. The
parties agree that if by June 28, 2005 LVSG has not provided a
minimum of $140,000 of the Financing Purchase Price that the
Company will have the right to seek third party financing to
acquire the pro-rated balance of the Financing Purchase Shares from
LVSG that LVSG has not forwarded the subsequent pro-rated Financing
Purchase Price to the Company up to the date of the Deficient
Payments Notice. If the Company elects to seek third party
financing it will issue to LVSG a written notice of such election
herein referred to as a “Deficient Payments Notice”.
LVSG will have the right to maintain its rights to the Financing
Purchase Shares by advancing to the Company the amount equal to the
Financing Purchase Price it should have made at the time of receipt
of the Deficient Payment Notice plus the early advancement of the
next payment as per the Financing Schedule within 15 days of the
receipt of the Deficient Payments Notice.
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If LVSG is not
able to comply with the terms of Deficient Payments Notice. GBBI
will have the right to sell to a third party the prorated portion
of the Financing Purchase Shares issued to LVSG that LVSG has not
forwarded the respective Financing Purchase Price for.
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(b) Certain Deliveries. On or before the Closing Date, and as
a condition to the purchase and sale of the Transferred Shares and
the Financing Purchase Shares:
(i) the Establishment Date shall have occurred;
(ii) GBBI and the Company shall have executed and delivered
the Asset Purchase Agreement to the Company and LVSG;
(v) each Party shall have received one original of each of
the fully executed Transaction Documents.
(c) Delivery of Share Certificates and Stock Powers. Promptly
after the Closing Date, the Company shall:
(i) deliver to
GBBI share certificates representing the shares of Common Stock
purchased by GBBI pursuant to this Section 3.2, and;
(ii) deliver to
the attorney of the Company certificates representing the shares of
Common Stock purchased by LVSG pursuant to this Section 3.2, the
representing the Financing Purchase Shares purchased by LVSG will
be held in escrow with the attorney for the Company and delivered
prorated to LVSG in increments as the Purchase Price funds are
received by the Company from LVSG, and;
(iii) on or
before the Closing LVSG will also deliver to the attorney of the
Company signature guaranteed stock powers (the “Stock
Powers”) the Stock Powers will be used to allow transfer of
the certificates issued to LVSG only in the event LVSG does not
take possession of the certificates due its unforeseen inability to
complete the Financing Purchase Price as described in this Section
3.2.
3.3 Financial
Assistance.
(a) Financial Assistance. The Board may, by written notice to
the Parties pursuant to the terms of this Agreement, request that
the Parties provide additional financial assistance to the Company,
including in the form of credit support or loans, and, in such
event, if such Party agrees to provide such additional financial
assistance (either directly or through its designees to the Board),
such Party shall make such financial assistance available to the
Company pro rata in accordance with its respective Company Interest
and the Company Interests of all Parties so approving such
financial assistance.
4. OPERATION
AND MANAGEMENT OF THE COMPANY
4.1 Operation of the Company.
Each Party agrees to take all actions necessary to ensure that the
Company shall be operated in accordance with the terms of this
Agreement and the other Transaction Documents, including, without
limitation, to vote all Securities held by it to effect the terms
hereof.
4.2 Board of Directors. The
Company will be managed by the Board in accordance with the terms
of this Agreement and Applicable Law. The Board shall initially
consist of five (2) Directors, one (1) of whom shall be appointed
by LVSG and one (1) of whom shall be appointed by GBBI.
4.3 Removal; Reappointment of
Directors. Any Director may be removed for cause in accordance with
Applicable Law. In addition, each Party having the right to appoint
a Director pursuant to this Section 4 shall also have the right, in
its sole discretion, to remove such Director at any time, effective
upon delivery of written notice to the Company, the Director to be
removed and to the other Party. In the case of a vacancy in the
office of a Director for any reason (including removal pursuant to
the preceding sentence), the vacancy shall be filled by the Party
that appointed the Director in question.
4.4 Board Meetings. The
President shall have the authority to convene Board meetings,
including the authority to specify the time and place of such
meetings. Directors may attend Board meetings in person or by any
other means of attendance permitted under the Bylaws of the
Company, provided, however, that (a) the Board shall meet at least
once during each annual fiscal period and (b) written notice of all
Board meetings shall be given in accordance with the
Bylaws
4.5 Board Quorum; Resolutions.
A quorum shall be deemed to exist for purposes of Board actions in
accordance of the Bylaws of the Company Any action, determination
or resolution of the Board shall require the affirmative vote of a
majority of Directors present at a meeting at which a valid quorum
pursuant to this Section 4.5 is present.
4.6 Shareholders' Meetings.
Shareholders of the Company shall receive notice of each
shareholders' meeting in accordance with the Company Bylaws. The
Company shall have at least one shareholders' meeting each calendar
year. Such meeting will take place at such time and place as is
determined by the Board.
4.7 Financial Statements and
Accounting Records. All financial statements shall be prepared in
accordance with generally accepted accounting principles in the
United States and in reasonable detail, and shall contain such
financial data as LVSG and GBBI may deem necessary in order to keep
the Parties advised of the Company's financial status. The Company
shall, at LVSG's request, provide LVSG with such financial
information as LVSG may reasonably deem necessary for purposes of
complying with its periodic reporting obligations under U.S.
securities law and shall cooperate with LVSG in
connection
