MEMORANDUM OF UNDERSTANDING BY AND BETWEEN JET STREAM VOLTAGE, INC. AND KORE HOLDINGS, INC.
MEMORANDUM OF UNDERSTANDING
BY AND BETWEEN JET STREAM VOLTAGE, INC.
AND KORE HOLDINGS,
INC.
This Memorandum of Understanding (the
“MOU”) is entered into this 28th day of December, 2008, by and between Jet
Stream Voltage, Inc. (“Jet Stream”), a Delaware corporation licensed to do and
doing business in the State of Maryland, having its head-quarters at
0000X Xxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxx 00000, and Kore Holdings, Inc. (“Kore”),
a Nevada corporation, licensed to do and doing business in the states of
Cali-fornia and Maryland, having its current business address at 00000 Xxxxxxxx
Xxxx, Xxxx-xxx, Xxxxxxxx 00000.
W I T N E
S S E T H:
WHEREAS, Kore Holdings, Inc.
desires to convey and transfer all of its wind-related assets held by Arcadian
Renewable Power, Inc. (“Arcadian”), a Delaware cor-poration, and a wholly owned
subsidiary of Kore in exchange for a twenty per cent stake in the preferred and
common stock authorized by Jet Stream on the terms and conditions set forth in
this MOU; and
WHEREAS, Jet Stream possesses certain
intellectual property, potential investor banking participants, and other
valuable assets that it desires to develop, exploit, market, and operate
profitably for and on behalf of its shareholders; and
WHEREAS, Kore desires to endow Jet
Stream and in accordance with the terms and conditions set forth in this
MOU;
NOW, THEREFORE, for the mutual
promises, covenants, representations and warranties contained herein, and other
valuable consideration, the timely receipt and suf-ficiency of which are hereby
acknowledged, the parties agree as follows:
1. Representations and
Warranties by Jet Stream. Jet Stream hereby makes the
following representations and warranties to Kore:
1.1. Jet
Stream is a corporation authorized by its Amended Certificate of Incorporation
to issue ten thousand (10,000) shares of preferred stock and ten thousand
(10,000) shares of common stock at no par value. No other shares,
whether common stock or preferred stock, have been issued.
1.2 Jet
Stream’s Board of Directors consists of five (5) board seats of which, Kore will
control three (3) board seats until Jet Stream achieves the stated financial
goals which are set forth in section three (3) of this MOU.
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1.3 Jet
Stream was organized as a Subchapter C corporation under Title
26 of the
United States Code. It is a cash basis taxpayer. Because
Jet Stream was organized in December of 2008, it has no balance sheet for any
years prior to the year ending December 31, 2008. Jet Stream has no
debt and no contingent liabil-ities.
1.4 Jet
Stream is not a party to any lawsuit, administrative proceeding,
litigation,
demand, injunction, levy or attachment action or governmental
investi-gation. Moreover, none of these events or proceedings is
anticipated.
1.5 Other
than the aforementioned preferred shares to be issued to Kore pursuant to this
MOU, no individuals or entities own or have subscribed to any shares, warrants,
or options with respect to Jet Stream’s securities.
1.6 Jet
Stream is a Delaware Subchapter C corporation and has the right, power, and
authority to enter into this Agreement.
1.7 C.
Xxxxxxx Xxxxxx, the chairman and chief executive officer of Jet Stream Voltage,
Inc., is also the chief operating officer of Kore and has held this office since
on or about August 27, 2008. Because Xx. Xxxxxx’x position in both
companies presents a material conflict of interest with respect to his
participation in the transaction described herein, the following actions will be
taken: (1) Xx. Xxxxxx will not vote in any of the elections held
pursuant to this transaction, and (2) Xx. Xxxxxx’x holding office in both
companies will be made known to the directors and shareholders of each
respective company prior to their vote approving the transfer and assignment of
2,000 shares of preferred and 2,000 shares of common stock in Jet Stream
Voltage, Inc. to Kore Holdings, Inc. for its conditional transfer and assignment
to Jet Stream of Kore’s wind-related assets within Arcadian Power.
1.8
Jetstream and its management pledge and covenant to maximize the wind power
assets being contributed herein by Kore’s wholly owned subsidiary,
Arcadian.
1.9 Jetstream is currently working
closely with investment banking firms to identify additional sources of capital
for the purposes of maximizing the assets contributed to Jet Stream by Kore
pursuant to this MOU.
2.0 With respect to the use of the
wind-related assets held by Kore’s sub-sidiary, Arcadian, it is agreed that Kore
shall maintain a ten per cent interest in the devel-opment of all assets
belonging to Jet Stream to the extent that Kore shall have an stream of income
equal to ten percent (10%) of the gross profits earned on Arcadian wind- related
assets by Jet Stream or any successor in interest who purchases or leases the
wind-related assets.
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2. Representations and
Warranties by Kore Holdings, Inc. Kore hereby makes
the
following warranties and representations to Jet Stream:
2.1 Kore Holdings Inc.
is a trading, non-reporting company under the symbol: (OTC: XXXX.XX). Kore’s
management anticipates growing from an OTC development stage company to a small
capitalization firm within the next three (3) years. With a view
towards increasing its capitalization and growth potential, Kore recommends that
the company receive two thousand (2,000) preferred shares and two thousand
(2,000) common shares in Jet Stream Voltage, Inc. in exchange for Jet Stream
meeting certain conditions within the next 12 months, which terms and conditions
are set forth in section three (3) of this MOU. This exchange of Jet
Stream’s preferred and common shares for Kore’s wind-related assets held by
Arcadian is a tax-free exchange and is more fully documented and explained in
the Assignment of Assets attached hereto as Exhibit A and further referenced in
paragraph four (4) of this Agreement.
2.2 Kore concurs that
the estimated value of the wind-related assets should be determined by a 3rd Party
“Fairness Evaluation” in exchange for the aforementioned shares of Jet
Stream.. Valuation’s were made by Xxxxxx, Xxxxxx, and Xxxxx,
SEC-approved accountants/auditors from Cherry Hill, New Jersey, in 2001 through
2006 and was made based upon a comprehensive review of the intellectual
property, ground leases and other assets belonging to Kore’s wholly owned
subsidiary, Arcadian.
2.3 Kore
further warrants and represents that it is under no consent order
entered
by any governmental agency or court.
2.4 All of the
documents executed by Kore that are required to be deliv-ered to Jet Stream
pursuant to this MOU are duly authorized and executed as legal,
valid,
and
binding obligations of Kore, and do not require the consent or approval of any
third party or governmental body.
2.5. Kore is a Nevada
Subchapter C corporation and has the right, power and authority to enter into
this MOU.
3. Condition Precedent to the
Long Term Ownership and Use of the Wind-Related
Assets. The parties agree and understand that, should Jet
Stream not raise work-ing capital in the amount of at least three million
dollars ($3,000,000) on or before De- cember 31, 2009, at Kore’s option, the
wind-related assets held by Arcadian, Kore’s subsidiary, and assigned to Jet
Stream pursuant to this MOU will revert back to Arcadian Renewable Power,
Inc.
4. Mutual and Simultaneous
Representations. Both Jet Stream Voltage, Inc. and Kore
Holdings, Inc. represent and warrant to each other the following:
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3.1 Both
companies are “institutional investors”, as that term is used in Rule
501 promulgated under Regulation D of the Securities Act of 1933 (the
“Act”). As such, neither is a seller or offeror of securities
required to provide its counter-party with a private placement memorandum
prepared by its management and securities counsel.
3.2 Kore
and Jet Stream further represent to each other that their man-
gement,
tax advisors, and counsel have met and have reviewed documentation and materials
that their respective management executives and advisors have deemed to be
sufficient and relevant for the purposes of participating in this
MOU.
3.3 Kore
and Jet Stream represent to each other that a majority of each
class of
shareholders in their respective companies will have to vote to approve the
provisions contained in this MOU and that said shareholders must ratify the
actions and intentions of management with respect to this MOU to move forward
and upon the other parties confirming their abilities to perform.
4. Transfer of Kore Assets for
Jet Stream Securities. Within thirty (30) days after the
execution of this MOU, Kore Holdings, Inc. will receive from Jet Stream’s 2,000
shares of Jet Stream’s preferred stock and 2,000 shares of Jet Stream’s common
stock. This exchange shall occur simultaneously with the conditional
assignment and conveyance to Jet Stream of the wind-related assets held by
Arcadian, a wholly owned subsidiary of Kore. This assignment of
assets from Kore to Jet Stream is further referenced and documented in the
Assignment Agreement Conveying Assets, dated December 28, 2008, which instrument
is attached hereto as Exhibit A and made a part of this MOU.
5. Anti-Dilution of Share
Value. Jet Stream warrants and represents to Kore and Kore’s
officers, directors and shareholders that the shares of Jet Stream issued in
consideration for the share issuance and delivery described herein will never be
diluted in value by the promulgation of additional shares or classes of shares.
This anti-dilution provision includes all shares issued by the parent company,
as well as those issued by Jet Stream’s affiliates and wholly-owned
subsidiaries
6. Carry Forward
Interest. Should Jet Stream acquire and develop new wind power
assets (such as new wind turbine farms providing additional generation capacity
for electricity) subsequent to the execution of this MOU, as is now contemplated
by the parties, Kore shall maintain a ten per cent (10%) interest in the all
future income streams derived from the herein conveyed Arcadian
assets. This “going forward” reservation of ownership can be
purchased by Jet Stream in the future, either in whole or in part, should all
parties agree on the terms and conditions of sale or transfer.
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7. Rule 144
Stock. All preferred shares issued pursuant to this MOU shall
be for investment
and not for resale. Accordingly, each share certificate issued and
delivered under the
provisions hereof shall contain the legend set forth in Rule 144A of Regulation
D, as
amended and promulgated under the Act. This securities legend shall
carry restrict-tions on resale for a period of at least six (6)
months.
The
restriction upon the free alienation of the stock will protect the value of all
shareholders of both Kore and Jet Stream by prohibiting immediate sales (or
“shorting”) upon or soon after the issuance and transfer of the
stock. Such sales traditionally reduce the share price in the capital
markets and aggregate capitalization of the securities. The legend
confirming the restrictions on sale can be removed when the stipulated holding
period has passed. This will require the drafting and delivery of an
opinion of counsel letter by a qualified securities attorney acceptable to the
transfer agent of the issuer and full compliance with the provisions of Rule
144.
The restrictions placed upon the resale
of the securities in question do not apply to the transfer of the stock to
related parties via (i) an inter vivos or testamentary
transfer in a revocable or irrevocable trust (ii) a transfer and change of
ownership caused by the pro-bate of a shareholder’s Last Will and Testament, or
(iii) as a donation or gift to a recog-nized Section 501(c)(3) non-profit
organization.
8. Share Delivery
Schedule. Jet Stream shall tender the 2,000 preferred shares
and 2,000 common shares to the secretary of Kore Holdings, Inc. within thirty
(30) days of the execution and ratification of this Memorandum of
Agreement.
9. Term of the
MOU. The term of this MOU shall continue so long as any of its
provisions remain unfulfilled and incomplete. Because of the
continuing life of the anti-dilution provision, this MOU continues in force and
effect so long as either party remains solvent and continues in
business.
10. Provision of Transmission
Lines, Turbines, and Other Equipment. It is un-derstood by the
parties that the provider of the transmission lines, wind turbines, and
property-specific engineering equipment to Arcadian will continue to provide
this equip-ment and these assets to Jet Stream, the transferee in this
MOU.
11. Assignment. Neither
party without the prior written consent of the other may assign its rights and
duties under this MOU.
12. Choice of
Law. This MOU shall be governed by, and its terms and
condi-tions shall be construed in accordance with, the laws of the State of
Nevada.
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13 Notices. Any
notice required, allowed by, or given in connection with this MOU shall be in
writing and shall be delivered to the appropriate party by personal de-livery,
one day after delivery to a nationally recognized overnight delivery service
(charges
prepaid), or four business days after being sent by registered or certified
mail, postage prepaid and correctly addressed, to the parties at their
respective addresses set forth above, and
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If
to Jet Stream Voltage, Inc.
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Mr.
C. Xxxxxxx Xxxxxx
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Chairman
and CEO
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Jet
Stream, Inc.
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0000X
Xxxxxxx Xxxx
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Xxxxxxxxx,
Xxxxxxxx 00000
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Telephone: (000)
000-0000
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If
to Kore Holdings, Inc.
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Xx.
Xxxxxx Xxxx.
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Chairman
and CEO
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00000
Xxxxxxxx Xxxx
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Xxxxxxx,
Xxxxxxxx 00000
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Telephone: (000)
000-0000
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The
parties to this MOU may from time to time amend their address of record by
notifying the other party in writing of the new address in a manner provided in
this para-graph twelve.
14. Final
Agreement. This MOU terminates and supersedes all prior
understand-ings and agreements, whether written or oral, on the subject matter
hereof. Only a further writing that is duly executed by both parties
may modify this MOU.
15. Waiver. No
waiver or breach of any term or condition of this MOU shall
neither
operate as a waiver of any other breach of such term or condition nor shall any
failure to enforce any provisions hereunder operate as a waiver of such
provision or any other pro-vision hereunder.
16. Successors and
Assigns. The rights and responsibilities of the parties shall
inure to the benefit and become the obligations of the assigns, successors, and
personal representatives of the parties.
17. Counterparts. This
MOU may be executed in one or more counterparts, each of which shall be deemed
an original, but all of which together shall be considered one and the same
instrument. Facsimile or electronic transmissions of this MOU, when
duly signed and ratified, shall be as legal and binding as the original
thereof.
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18. No Immediate Market for Jet
Stream Securities. In connection with the receipt of the
preferred shares referenced herein, Kore Holdings, Inc. represents and
acknowledges the following:
18.1 Kore
is acquiring the Jet Stream preferred stock described herein as an investment
and not for immediate resale.
18.2 Kore
further acknowledges that it has entered into this MOU with the understanding
that there is no secondary market for the immediate sale of the shares
referenced in this MOU, that said shares are not currently registered with the
U.S. Securi-ties and Exchange Commission or any state securities agency, and
that the shares in ques-tion are being offered and transferred pursuant to a
qualified safe harbor exception to re-gistration.
18.3 Kore
is also aware that no market-maker currently exists to make a
market in
the shares in question and that no attorney general of any state or any
securities regulator has reviewed, passed upon, or opined with respect to this
transaction.
18.4 Kore
is further aware and acknowledges that certain material risks
are
attendant to the acquisition of the common stock issued by Jet
Stream. These include, but are not limited to, a rapidly and
significantly deteriorating economic climate, an un-foreseen change in the U.S.
Tax Code with respect to energy credits and deductions, and the unexpected
demise of the company’s management. Any or a combination of these events could
lead to a decrease in the book value of Jet Stream’s preferred
stock.
18.5 Kore
acknowledges that it has not been promised by the manage-
ment of
Jet Stream or any of the company’s agents, investment advisors, employees or
outside counsel that the preferred shares acquired pursuant to this MOU will
increase in value over time.
18.6 Kore
is aware that Jet Stream is a newly formed development stage
company
and that its corporate chart of accounts and balance sheet have not been audited
at this time by any certified public accounting firm.
19. Severability. No
determination by any court or governmental or administra-tive entity that any
provision of this MOU or any amendment hereof is invalid or unen-forceable in
any instance shall affect the validity or enforceability of (a) any other such
provision, or (b) such provision in any circumstance not controlled by such
determina-tion. Each such provision shall be valid and enforceable to
the fullest extent allowed by and shall be construed wherever possible as being
consistent with applicable law.
20. Time of the
Essence. Time shall be of the essence in the performance of
each and every term of this MOU.
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21. Interpretation. The
parties to this MOU have been represented by counsel and all provisions of this
Agreement have been fully negotiated. No provision of this MOU shall
be interpreted against either party merely because such provision was drafter by
such party or its counsel
22. Attorneys’
Fees. In the event of any litigation arising out of this MOU,
the prevailing party shall be entitled to reasonable attorneys’ fees and court
costs.
23. Waiver. No
party hereto shall be deemed to have waived the exercise of any right which it
holds hereunder unless such waiver is made expressly and in writing (and no
delay or omission by any party hereto in exercising any such right shall be
deemed a waiver of its future exercise). No such waiver made as to
any instance involving the ex-ercise of any such right shall be deemed a waiver
as to any other such instance or any other such right.
IN WITNESS WHEREOF, each party hereto
has executed this Memorandum of Understanding or caused it to be executed on its
behalf by its duly authorized representa-tives, with the intention of creating a
document under seal on the date first above written.
JET
STREAM, INC.
(a
Delaware Corporation)
BY:
/s/ C. Xxxxxxx
Xxxxxx
(SEAL)
C.
Xxxxxxx Xxxxxx
ITS:
Chairman and Chief Executive Officer
KORE
HOLDINGS, INC.
(a Nevada
corporation)
BY: /s/
Xxxxxx
Xxxx
(SEAL)
Xxxxxx
Xxxx
ITS:
Chairman and Chief Executive Officer
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