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Message: implications of a MOU

implications of a MOU

posted on Mar 20, 2010 10:11AM

If a Memorandum Of Understanding (MOU) has been signed (and we have no assurance of that unless Tyhee management publicly announces such an agreement), it typically includes certain things: (1) a statement clarifying the intentions of the two parties; (2) an agreement to not disclose otherwise non-public information to third parties (This is essential in a potential financial transaction since the Company would have to disclose more information than is public in order to get fair value for their shareholders.); and (3) typically an agreement by the potential investor or financier to not buy or sell any shares of the Company (Tyhee in this case) for a period of at least a year, and frequently 2 years. Unless there is a specific agreement in the MOU as to exclusivity of discussions (which I would doubt, since Management has several parties that would be interested in financing Tyhee), Managment and the Board would be able to have confidential discussions with more than one party in the period ahead.

If a MOU has been signed (which is still unclear until and unless Tyhee announces it), this does not assure that any meaningful discussions will take part for weeks or even in some cases months (or occasionally never, as something could occur to change either party's mind).

Calmlyrational

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