Document/Exhibit Description Pages Size
1: 8-K Current Report 2 12K
2: EX-2 Plan of Acquisition, Reorganization, Arrangement, 5± 19K
Liquidation or Succession
3: EX-99 Miscellaneous Exhibit 2± 9K
EX-2 — Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession
Exhibit Table of Contents
November 3, 1998
The Kingsley Coach, Inc
6510 South Acres
Houston, Texas 77048
Attention: Ralph Dickenson
Chairman of the Board of Directors and interim CEO
Re: Letter of Intent for exchange of shares of Micro-Hydro
Power, Inc., a Delaware corporation ("Micro-Hydro");
The Kingsley Coach, Inc., a Texas corporation
("Kingsley"), and all of the stockholders of Kingsley
(the "Kingsley Stockholders")
Dear Mr. Dickenson:
This letter will confirm the following general terms upon which
the Board of Directors of Micro-Hydro will adopt an Agreement and Plan of
Reorganization (the "Plan") whereby Micro-Hydro will exchange post-split
shares of its $0.00001 par value common voting stock for all of the
outstanding securities of Kingsley, and whereby Kingsley will become a wholly-
owned subsidiary of Micro-Hydro on completion of the Plan.
We propose that a definitive agreement approved by our respective
Boards of Directors be negotiated and executed and which will set forth in
detail our intent, upon the following general terms and conditions.
A. The Exchange
(i) Micro-Hydro shall issue 9,400,000 pre-split shares (see
Section A(ii) below) or approximately ninety four percent
(94% [see Section A(iii) below]) of its $0.00001 par value
common voting stock in exchange for all of the issued and
outstanding shares of Kingsley. All of the shares of Micro-
Hydro to be issued to the Kingsley Stockholders shall be
"unregistered" and "restricted" shares and shall be issued
in accordance with and subject to applicable laws, rules and
regulations, and, when issued for the consideration
indicated, shall be deemed fully paid and non-assessable.
(ii) Following the completion of the Plan, Micro-Hydro will
reverse split its outstanding common stock on a basis of one
for two (reducing the common outstanding shares [10,000,010
shares] to 5,000,005 shares), while retaining the current
par value and authorized shares, with appropriate
adjustments in the additional paid in capital and stated
capital accounts of Micro-Hydro.
(iii) Subject to the closing of the Plan and pursuant to a
written compensation agreement with certain consultants
engaged by Micro-Hydro and/or the executive officers and
directors of Micro-Hydro, Micro-Hydro shall issue 300,000
pre-split shares of its common stock for non-capital
raising services rendered, and which shares shall be
registered with the Securities and Exchange Commission on
Form S-8. As a result, Micro-Hydro will have 10,000,010
post-Plan pre-split outstanding shares of common stock.
(iv) The exchange is intended to qualify as a tax-free
reorganization under Section 368(a)(1)(B) of the Internal
Revenue Code.
(v) A $175,000 credit shall be accorded Jenson Services, Inc., a
Utah corporation and financial consulting firm ("Jenson
Services"), toward the purchase of a "Kingsley Coach, for
services rendered in connection with the Plan, and Jenson
Services shall be required to provide the "Tractor" for the
"Kingsley Coach." This credit is irrevocable, and is
payable, subject to one condition, only, that being the
closing of the Plan.
B. Definitive Agreement.
The definitive agreement shall include, contain or provide:
(i) Representations and Warranties. Customary and usual
representations and warranties by the parties, and the
principal executive officer of each of the parties shall
certify these representations and warranties "to the best of
his personal knowledge and information."
(ii) Opinions of Counsel. For the delivery at closing of
favorable opinions of counsel for the corporate parties with
respect to customary and usual matters of law covered under
similar plans and parties.
(iii) Financial and Other Information.
(a) The examination and inspection of the books and
records of each of the parties prior to closing; the
delivery no later than at closing of customary
schedules listing each party's material contracts;
real and personal properties; pending, threatened and
contemplated legal proceedings; employees; assets and
liabilities, including contingencies and commitments;
and other information reasonably requested;
(b) Each of the parties to provide audited financial
statements consisting of a balance sheet and a related
statement of income for the period then ended which
fairly present the financial condition of each as of
their respective dates and for the periods involved,
and such statements shall be prepared in accordance
with generally accepted accounting principles
consistently applied, on Closing, for such period or
periods as shall be set forth in the definitive
agreement; and
(c) The financial statements of Micro-Hydro shall reflect
no liabilities and no assets.
(iv) Expenses. In the event of the termination of the exchange,
Micro-Hydro, Kingsley and the Kingsley Stockholders will
each bear their respective costs, and neither party shall
have liability to any other party for any expense of any
other party.
(v) Conduct of Business of Micro-Hydro and Kingsley Pending
Closing. Until consummation or termination of the exchange,
Micro-Hydro and Kingsley will conduct business only in the
ordinary course and none of the assets of Micro-Hydro or
Kingsley shall be sold or disposed of except in the ordinary
course of business or with the written consent of the other
parties.
(vi) Other.
(a) Micro-Hydro, Kingsley and all of the Kingsley
Stockholders shall have received all permits,
authorizations, regulatory approvals and third party
consents necessary for the consummation of the
exchange, and all applicable legal requirements shall
have been satisfied;
(b) The definitive agreement shall be executed as soon as
practicable, and Micro-Hydro shall instruct its legal
counsel to immediately prepare all necessary
documentation upon the execution of this Letter of
Intent;
(c) The Boards of Directors of Micro-Hydro and Kingsley
shall have approved the definitive agreement;
(d) The Kingsley Stockholders owning not less than 100% of
the outstanding securities of Kingsley shall have
adopted, ratified and accepted the definitive
agreement;
(e) All notices or other information deemed required or
necessary to be given to any of the parties shall be
given at the following addresses:
Micro-Hydro: 5525 South 900 East, #110
Salt Lake City, Utah 84117
Kingsley: 6510 South Acres
Houston, Texas 77048
Kingsley Stockholders: The addresses listed in the
definitive agreement
(f) The definitive agreement shall contain customary and
usual indemnification and hold harmless provisions;
(g) The transactions which are contemplated herein, to the
extent permitted, shall be governed by and construed
in accordance with the laws of the State of Delaware.
(h) Each party and its agents, attorneys and
representatives shall have full and free access to the
properties, books and records of the other party (the
confidentiality of which the investigating party
agrees to retain) for purposes of conducting
investigations of the other party;
(i) The substance of any public announcement with respect
to the exchange, other than notices required by law,
shall be approved in advance by all parties or their
duly authorized representatives;
(j) The current Board of Directors and officers of Micro-
Hydro shall resign at Closing, and be replaced by
those designated by Kingsley and the Kingsley
Stockholders;
(k) The pre-Plan stockholders of Micro-Hydro shall be
protected against any reverse split that occurs in the
reorganized Micro-Hydro for a period of three years
following Closing, and in the event of any such
reverse split, such stockholders shall be entitled to
have the reorganized Micro-Hydro issue them additional
shares to increase their respective stock holdings as
though such reverse split had never been effected.
Except as provided in paragraphs (iv), (v) and (vi)(i), this
letter merely evidences the intention of the parties hereto and is not
intended to be legally binding. The proposed agreement contemplated herein
may be terminated by any of the parties at any time prior to the execution of
the definitive agreement, which shall be controlling thereafter, and each of
the parties agrees to hold the others harmless for any attorney's fees,
accountant's fees, expenses or other damages which may be incurred by failure
to consummate the contemplated exchange.
C. Counterparts. This Letter of Intent may be executed in any
number of counterparts and each such counterpart shall be deemed to be an
original instrument, but all of such counterparts together shall constitute
but one agreement.
If the foregoing correctly sets forth the substance of the
understanding of the parties, please execute this letter in duplicate, retain
one copy for your records, and return one to Leonard W. Burningham, at his
address, which is Suite 405 Hermes Building, 455 East 500 South, Salt Lake
City, Utah 84111.
Very truly yours,
MICRO-HYDRO POWER, INC.
By /s/ Thomas J. Howells
Vice President and Director
Accepted this 8th day of
November, 1998
THE KINGSLEY COACH, INC.
By /s/ Ralph Dickenson, Chairman & CEO
Dates Referenced Herein and Documents Incorporated by Reference
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