<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K-A2
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
November 8, 1998
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Date of Report
(Date of Earliest Event Reported)
MICRO-HYDRO POWER, INC.
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(Exact Name of Registrant as Specified in its Charter)
Delaware 0-21733 87-0369035
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(State or other (Commission File No.) (IRS Employer I.D. No.)
Jurisdiction)
6510 South Acres
Houston, Texas 77048
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(Address of Principal Executive Offices)
(713)991-6262
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Registrant's Telephone Number
5525 South 900 East, Suite 110
Salt Lake City, Utah 84117
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(Former Name or Former Address if changed Since Last Report)
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Item 1. Changes in Control of Registrant.
(a) On December 18, 1998, the Registrant and The Kingsley Coach,
L.L.C., a Louisiana limited liability company ("Kingsley"), executed an
Agreement and Plan of Reorganization (the "Plan") as outlined in the Letter of
Intent between the Registrant and Kingsley dated November 3, 1998 (see the 8-K
Current Report dated November 8, 1998, Item 7, which has been previously
filed with the Securities and Exchange Commission and which is incorporated
herein by reference), whereby the Registrant, acquired 100% of the assets,
subject to liabilities, of Kingsley. The Plan was treated as a purchase of
Kingsley for accounting purposes; the effective date of the Plan was December
18, 1998.
The Plan provided for the issuance of 7,000,000 pre-split shares of the
Registrant's "restricted securities" (common stock) in exchange for 100% of
Kingsley's assets.
Additional shares were issued as follows: (i), 300,000 pre-split
shares of common stock under an S-8 Registration Statement to certain persons,
including directors and executive officers, who have provided non-capital
raising services to the Registrant; (ii), 100,000 "restricted securities" for
other services rendered; and (iii), 2,400,000 "restricted securities"
(approximately 80% of which will be held in escrow subject to funding of the
reorganized Registrant through the sale of an additional 2,000,000 pre-split
shares of "restricted securities" in consideration of $2,000,000).
There were 300,010 pre-Plan outstanding voting securities of the
Registrant, and taking into account the common stock issued as outlined above
(and excluding the 2,000,000 shares to be offered at $1 per share), there will
be 10,100,010 post-reorganization pre-split outstanding shares of the
Registrant's common stock. The Registrant has provided its stockholders with
an Information Statement concerning a one for two reverse split of the
outstanding voting securities and a name change to "The Kingsley Coach, Inc."
This would reduce the outstanding voting securities to 5,050,005 shares.
The Plan was adopted, ratified and approved by the Board of
Directors of the Registrant at a special meeting held on December 11, 1998.
The sole consideration for the assets was the exchange of
7,000,000 "unregistered" and "restricted" shares of $0.00001 par value common
stock of the Registrant, and the assumption of the liabilities of Kingsley
attached to the Plan.
The basis of the "control" by the Kingsley Stockholders is
ownership. See the table below under Paragraph (b) of this Item.
The former principal stockholders of the Registrant and their
percentage of ownership of the outstanding voting securities of the Registrant
prior to the completion of the Plan were: Jenson Services, Inc. 104,128,
(34.7%); Hugh and Sharon Lambert, 46,855, (15.6%); Quinton Hamilton, former
President and Director, owned no shares of the Registrant; Thomas J. Howells,
former Vice President and Director, owned no shares of the Registrant; and
Kathleen L. Morrison, former Secretary owned no shares of the Registrant.
A copy of the Plan, including any material exhibits and related
instruments, is attached to this 8-K-A2 Current Report. See Item 7.
(b) To the knowledge of management and based upon a review of the
stock ledger maintained by the Registrant's transfer agent and registrar, the
following table sets forth the beneficial ownership of persons who own more
than five percent of the Registrant's common stock as of the date hereof, and
the share holdings of new management, to wit:
Amount and Nature Percent
of Beneficial of
Name Title Ownership Class
Ralph Dickenson* Chairman, CEO
President
Verdo Lancaster Vice President, Director 3,062,500 30.3%
33236 Walker Road North
Walker, LA 70785
Richard Duston Sec/Treasurer, Director 875,000 8.66%
904 College Street
Columbus, MS 39701
Russell Ratliff Non-voting Director
129 Blue Heron Drive
Lenoir City, TN 37772
Catherine Rimes Director
1828 Holloway Road
Lebanon, TN 37090
James Whitehead Director
3576 S. Eufaula Ave.
Eufaula, AL 36072
DRK, Inc.* 3,062,500 30.3%
14010 Sunfish Lake Blvd.
Anoka, MN 55303
All directors and executive
officers as a group (6)
* Owned 50% by Catherine Rimes and 50% by George O. R. Carlson
Item 2. Acquisition or Disposition of Assets.
See Item 1 of this Report. The consideration exchanged
under the Plan was negotiated at "arms length" between the directors and
executive officers of the Registrant and Kingsley, and the members of the
Board of Directors of the Registrant used criteria used in similar proposals
involving the Registrant in the past, including the relative value of the
assets of the Registrant; its present and past business operations; the future
potential of Kingsley; its management; and the potential benefit to the
stockholders of the Registrant. The members of the Board of Directors
determined in good faith that the consideration for the exchange was
reasonable, under these circumstances.
No director, executive officer or person who may be deemed to be an
affiliate of the Registrant had any direct or indirect interest in Kingsley
prior to the completion of the Plan.
Business
Kingsley Coach is the manufacturer of customized recreational and
commercial vehicles. Unlike typical recreational vehicles, a Kingsley Coach
has a semi-truck chassis as its base. This unique feature allows for easy
service for owners who can go to any truck stop for repairs. Kingsley Coaches
retail for between $239,000 and $450,000, depending on customized features.
Kingsley commenced business in 1996, with first-year sales of
$300,000. In 1997, sales were $825,000, and in 1998, projected sales are in
excess of $3 Million. Kingsley's Chairman, Ralph Dickenson, estimates that
1999 sales will increase substantially.
Kingsley has signed an agreement with Thor Industries of
Middleburg, Pennsylvania, which will increase Kingsley's production capability
dramatically. Kinglsey will commence the operating of its new facility in
Middleburg in January 1999.
Assets
See Exhibit B to the Plan, Item 7.
Liabilities
See Exhibit B to the Plan, Item 7.
Management
Names Title or Position Age
Ralph Dickenson CEO, Chairman and President 59
Verdo Lancaster Vice President and Director 59
Richard Duston Sec/Tres and Director 49
Russell Ratliff Non-voting director 39
Catherine Rimes Director 37
James Whitehead Director 56
Resumes
Ralph Dickenson. Mr. Dickenson is the Chairman, CEO, President and co-founder
of the Kinglsey Coach line of vehicles. With over 30 years in the
transportation industry, Mr. Dickenson has been involved in the transit bus,
charter bus, school bus industry as well as transit bus re-manufacturing,
sales and service of all types of buses and trucks.
Verdo Lancaster. Mr. Lancaster is Vice President of Finance and sales and a
director. Mr. Lancaster has many years of experience in the mobile home
industry and has owned recreational vehicles over the last 30 years.
Richard Duston. Mr. Duston currently works for Waters Truck & Tractor Co.,
Inc. as a comptroller. Waters Truck & Tractor is the 2nd largest Navistar
dealer in the southeast U.S. and is a 60 year old family-owned company. BS
Degree from Mississippi State University in accounting in 1975. MPA Degree
from Mississippi State University in 1976 and a Graduate Degree from the
School of Banking of the South in 1985.
Russell Ratliff. Mr. Ratliff is President of Southeast Financial Consulting,
Inc., a Tennessee corporation engaged in providing business and financial
consulting services to a variety of private sector clients. Mr. Ratliff
received his B.A. in business from Shorter University in North Little Rock,
Arkansas, in 1983 and in 1982, he received a Bachelor of Science Degree in
Geology from Tennessee Technological University.
Catherine Rimes. Ms. Rimes is the daughter of Ralph Dickenson and basically
grew up in the transportation industry working with and learning from her
father. She can up through the ranks working as a bus cleaner and general
office assistant to eventually being put in charge of special projects and
ultimately asked to serve as the President of several divisions. Her
responsibilities include customer relations, contract negotiations, lease
fleet management, personnel, marketing and advertising.
James Whitehead. Mr. Whitehead is a director. Mr. Whitehead is currently CEO
of Whitehead Brothers, a nationwide freight trucking company with fifty trucks
and 62 employees. He is also co-owner of Lake City Logistics in Eufaula,
Alabama.
Item 3. Bankruptcy or Receivership.
None; not applicable.
Item 4. Changes in Registrant's Certifying Accountant.
None; not applicable.
Item 5. Other Events.
A Preliminary Information Statement was filed with the Securities and
Exchange Commission respecting a resolution of the Board of Directors
providing for amendments to the Articles of Incorporation effecting a one for
two reverse split of the post-plan outstanding securities and changing
the name of the Registrant to "The Kingsley Coach, Inc." The definitive
Information Statement was filed with the Securities and Exchange Commission
on or about December 21, 1998, has been mailed to the stockholders and is
incorporated herein by reference. See Item 7.
Item 6. Resignations of Directors and Executive Officers.
Under the Plan, the former directors and executive officers
resigned, in seriatim, and the persons listed in Item 1(b) were designated
to serve as directors and executive officers until the next annual meeting of
the stockholders and directors, or until their successors are elected and
qualified or their prior resignations or terminations.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired.
See Exhibits B and E to the Plan; will be filed on or before 75
days from the completion of the Plan, or March 3, 1999.
(b) Pro Forma Financial Information.
Will be filed on or before 75 days from the completion of the
Plan, or March 3, 1999.
(c) Exhibits.
Exhibit Description of Exhibit
Number
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10 Agreement and Plan or Reorganization
Exhibit A-Stockholders of Kingsley
Exhibit B-Assets and Liabilities of
Kingsley as of October 31,
1998
Exhibit C-Registrant's audited
financial statements for the
years ended December 31, 1997
and 1996, see 10-KSB Annual
Report for the year ended
December 31, 1997, as previously
filed with the Securities and
Exchange Commission.*
Exhibit C-1-Registrant's
unaudited Balance Sheet and
Statement of Operations for the
nine months ended September 30,
1998, see 10-QSB for the quarter
ended September 30, 1998, as
previously filed with the
Securities and Exchange
Commission.*
Exhibit D-Exceptions
Exhibit E-The Kingsley Coach, L.L.C.
unaudited Balance Sheet for the
period ended October 31, 1998.
Exhibit F-Exceptions
Exhibit G-Investment Letter
Exhibit H-Certification of Officer, Registrant
Exhibit I-Certification of Officer, Kingsley
10 Consulting Agreement dated December 15, 1998
99.1 Unanimous Written Consent of Directors of Registrant
99.2 Unanimous Written Consent of Directors/Managers/
Trustees of Kingsley
*10-KSB Annual Report for the year ended December 31, 1997
*10-QSB Quarterly Report for the quarter ended September 30, 1998.
*Information Statement dated December 21, 1998.
* Summaries of any exhibit are modified in their
entirety by this reference to each exhibit.
Item 8. Change in Fiscal Year.
None; not applicable.
Item 9. Sales of Equity Securities Pursuant to Regulation S.
None; not applicable.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this Report to be signed on its behalf by
the undersigned hereunto duly authorized.
MICRO-HYDRO POWER, INC.
Date: 1/12/99 By/s/Ralph Dickenson
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Ralph Dickenson
Vice President and Director
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT ("Plan") is made this 18th day of December, 1998,
among Micro-Hydro Power, Inc., a Delaware corporation ("Micro-Hydro" or the
"Company"); The Kingsley Coach, L.L.C., a Louisiana limited liability company
("Kingsley"); and the equity interest holders of Kingsley who are listed on
Exhibit A hereto (the Kingsley Stockholders ).
W I T N E S S E T H:
RECITALS
WHEREAS, the respective Boards of Directors of Micro-Hydro and
Kingsley and the Kingsley Stockholders have adopted resolutions pursuant to
which Micro-Hydro shall acquire and Kingsley shall exchange the assets and
liabilities described in Exhibit B hereof (hereinafter, respectively, the
"Assets" or the Liabilities ), which is incorporated herein by reference; and
WHEREAS, the sole consideration for the Assets shall be the
exchange of 7,000,000 "unregistered" and "restricted" shares of $0.00001 par
value common stock of Micro-Hydro, and the assumption of the Liabilities; and
WHEREAS, the Kingsley Stockholders shall acquire in exchange such
shares of the Company in a reorganization within the meaning of Section
368(a)(1)(C) of the Internal Revenue Code of 1986, as amended;
NOW, THEREFORE, in consideration of the mutual covenants and
promises contained herein, it is agreed:
Section 1
Purchase and Sale of the Assets
1.1 Purchase and Sale. Micro-Hydro hereby agrees to acquire and
Kingsley hereby agrees to exchange the Assets owned by Kingsley as of the
completion of the Plan (the Closing ).
1.2 Consideration for the Assets. The consideration paid for
the Assets shall consist solely of 7,000,000 "unregistered" and "restricted"
shares of $0.00001 par value common stock of Micro-Hydro to be issued in
exchange therefor, and the assumption of the Liabilities..
1.3 Delivery of Shares. Upon the execution and delivery by
Kingsley of an assignment or assignments and other instruments, to the extent
required or necessary, to transfer the Assets to Micro-Hydro, Micro-Hydro
shall deliver one stock certificate or certificates to each of the Kingsley
Stockholders in the amount set opposite their respective names as listed on
Exhibit A hereto representing 7,000,000 "unregistered" and "restricted" shares
of common stock of Micro-Hydro in the aggregate.
1.4 Further Assurances. At the Closing and from time to time
thereafter, Kingsley shall execute such additional instruments and take such
other action as Micro-Hydro may request in order to exchange and transfer
clear title and ownership in the Assets to Micro-Hydro.
1.5 Resignation of Present Directors and Executive Officers and
Designation of New Directors and Executive Officers. On Closing, the present
directors and executive officers of Micro-Hydro shall resign, in seriatim, and
designate the directors and executive officers nominated by Kingsley to serve
in their place and stead, until the next respective annual meetings of the
stockholders and Board of Directors of Micro-Hydro, and until their respective
successors shall be elected and qualified or until their respective prior
resignations or terminations, who shall be: Ralph Dickenson, Chairman, CEO and
President; Verdo (Bert) Lancaster, Vice President and Director; Richard
Duston, Secretary/Treasurer and Director; Russell Ratliff, non-voting member
of the Board of Directors; Catherine Dickenson, Director; and James Whitehead,
Director.
1.6 Change of Name and Reverse Split. Subsequent to the
Closing of this Plan, the Company shall adopt such resolutions as necessary
for the preparation and mailing to stockholders of an Information Statement
for the purpose of amending the Company s Articles of Incorporation to change
the name of the Company to "The Kingsley Coach, Inc. and to effect a reverse
split of its outstanding post-Plan common stock on a basis of one for two
(reducing the post-Plan common outstanding shares [10,100,010 shares] to
5,050,005 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.
1.7 Compensation Agreement. Subject to the Closing of the Plan
and pursuant to a written compensation agreement with certain consultants
engaged by Micro-Hydro and certain 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.
1.8 Grant of Credit. Subject to the Closing of the Plan, 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.
1.9 Closing. The Plan will be deemed to be closed on receipt of
the signatures of Kingsley Stockholders holding 80% of the current outstanding
equity of Kingsley.
Section 2
Closing
The Closing contemplated by Section 1 shall be held at the offices
of Leonard W. Burningham, Esq., Suite 205 Hermes Building, 455 East 500 South,
Salt Lake City, Utah 84111, on or before ten days following the execution and
delivery of this Plan, unless another place or time is agreed upon in writing
by the parties. The Closing may be accomplished by wire, express mail or
other courier service, conference telephone communications or as otherwise
agreed by the respective parties or their duly authorized representatives.
Section 3
Representations and Warranties of Micro-Hydro
Micro-Hydro represents and warrants to, and covenants with, the
Kingsley Stockholders and Kingsley as follows:
3.1 Corporate Status. Micro-Hydro is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Delaware and is licensed or qualified as a foreign corporation in all
states in which the nature of its business or the character or ownership of
its properties makes such licensing or qualification necessary (Delaware
only.) Micro-Hydro is a publicly held Company, having previously and lawfully
offered and sold a portion of its securities in accordance with applicable
federal and state securities laws, rules and regulations. There is presently
no established public market for these or any other securities of Micro-Hydro,
though Micro-Hydro has a Symbol on the OTC Bulletin Board of MPHI.
3.2 Capitalization. The current pre-Plan authorized capital
stock of Micro-Hydro consists of 30,000,000 shares of $0.00001 par value
common voting stock, of which 300,010 shares are issued and outstanding, all
fully paid and non-assessable. Except as otherwise provided herein, there are
no outstanding options, warrants or calls pursuant to which any person has the
right to purchase any authorized and unissued common stock of Micro-Hydro.
3.3 Financial Statements. The financial statements of Micro-
Hydro furnished to the Kingsley Stockholders and Kingsley, consisting of
audited financial statements for the years ended December 31, 1997 and 1996,
attached hereto as Exhibit C, and unaudited balance sheet and statement of
operations for the nine months ended September 30, 1998, attached hereto as
Exhibit C-1 and incorporated herein by reference, are correct and fairly
present the financial condition of Micro-Hydro at such dates and for the
periods involved; such statements were prepared in accordance with generally
accepted accounting principles consistently applied, and no material change
has occurred in the matters disclosed therein, except as indicated in Exhibit
D, which is attached hereto and incorporated herein by reference. Such
financial statements do not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements made,
in light of the circumstances under which they were made, not misleading.
3.4 Undisclosed Liabilities. Micro-Hydro has no liabilities of
any nature except to the extent reflected or reserved against in its balance
sheets, whether accrued, absolute, contingent or otherwise, including, without
limitation, tax liabilities and interest due or to become due, except as set
forth in Exhibit D.
3.5 Interim Changes. Since the date of its balance sheets,
except as set forth in Exhibit D, there have been no (1) changes in financial
condition, assets, liabilities or business of Micro-Hydro which, in the
aggregate, have been materially adverse; (2) damages, destruction or losses of
or to property of Micro-Hydro, payments of any dividend or other distribution
in respect of any class of stock of Micro-Hydro, or any direct or indirect
redemption, purchase or other acquisition of any class of any such stock; or
(3) increases paid or agreed to in the compensation, retirement benefits or
other commitments to its employees.
3.6 Title to Property. Micro-Hydro has good and marketable
title to all properties and assets, real and personal, reflected in Micro-
Hydro balance sheets, and the properties and assets of Micro-Hydro are subject
to no mortgage, pledge, lien or encumbrance, except for liens shown therein or
in Exhibit D, with respect to which no default exists.
3.7 Litigation. There is no litigation or proceeding pending,
or to the knowledge of Micro-Hydro, threatened, against or relating to Micro-
Hydro, its properties or business, except as set forth in Exhibit D. Further,
no officer, director or person who may be deemed to be an affiliate of Micro-
Hydro is party to any material legal proceeding which could have an adverse
effect on Micro-Hydro (financial or otherwise), and none is party to any
action or proceeding wherein any has an interest adverse to Micro-Hydro.
3.8 Books and Records. From the date of this Plan to the
Closing, Micro-Hydro will (1) give to the Kingsley Stockholders and Kingsley
or their respective representatives full access during normal business hours
to all of Micro-Hydro offices, books, records, contracts and other corporate
documents and properties so that the Kingsley Stockholders and Kingsley or
their respective representatives may inspect and audit them; and (2) furnish
such information concerning the properties and affairs of Micro-Hydro as the
Kingsley Stockholders and Kingsley or their respective representatives may
reasonably request.
3.9 Tax Returns. Micro-Hydro has filed all federal and state
income or franchise tax returns required to be filed or has received currently
effective extensions of the required filing dates.
3.10 Confidentiality. Until the Closing (and thereafter if there
is no Closing), Micro-Hydro and its representatives will keep confidential any
information which they obtain from the Kingsley Stockholders or from Kingsley
concerning the properties, assets and business of Kingsley. If the
transactions contemplated by this Plan are not consummated by December 31,
1998, Micro-Hydro will return to Kingsley all written matter with respect to
Kingsley obtained by Micro-Hydro in connection with the negotiation or
consummation of this Plan.
3.11 Corporate Authority. Micro-Hydro has full corporate power
and authority to enter into this Plan and to carry out its obligations
hereunder and will deliver to the Kingsley Stockholders and Kingsley or their
respective representatives at the Closing a certified copy of resolutions of
its Board of Directors authorizing execution of this Plan by Micro-Hydro
officers and performance thereunder, and the directors adopting and delivering
such resolutions are the duly elected and incumbent director of Micro-Hydro.
3.12 Due Authorization. Execution of this Plan and performance
by Micro-Hydro hereunder have been duly authorized by all requisite corporate
action on the part of Micro-Hydro, and this Plan constitutes a valid and
binding obligation of Micro-Hydro and performance hereunder will not violate
any provision of the Articles of Incorporation, Bylaws, agreements, mortgages
or other commitments of Micro-Hydro.
3.13 Environmental Matters. Micro-Hydro has no knowledge of any
assertion by any governmental agency or other regulatory authority of any
environmental lien, action or proceeding, or of any cause for any such lien,
action or proceeding related to the business operations of Micro-Hydro or
Micro-Hydro predecessors. In addition, to the best knowledge of Micro-Hydro,
there are no substances or conditions which may support a claim or cause of
action against Micro-Hydro or any of Micro-Hydro current or former officers,
directors, agents or employees, whether by a governmental agency or body,
private party or individual, under any Hazardous Materials Regulations.
Hazardous Materials means any oil or petrochemical products, PCB s,
asbestos, urea formaldehyde, flammable explosives, radioactive materials,
solid or hazardous wastes, chemicals, toxic substances or related materials,
including, without limitation, any substances defined as or included in the
definition of hazardous substances, hazardous wastes, hazardous
materials, or toxic substances under any applicable federal or state laws
or regulations. Hazardous Materials Regulations means any regulations
governing the use, generation, handling, storage, treatment, disposal or
release of hazardous materials, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act, the
Resource Conservation and Recovery Act and the Federal Water Pollution Control
Act.
3.14 Access to Information Regarding Kingsley. Micro-Hydro
acknowledges that it has been delivered copies of what has been represented to
be documentation containing all material information respecting Kingsley and
Kingsley s present and contemplated business operations, potential
acquisitions, management and other factors; that it has had a reasonable
opportunity to review such documentation and discuss it, to the extent
desired, with Micro-Hydro s legal counsel, directors and executive officers;
that it has had, to the extent desired, the opportunity to ask questions of
and receive responses from the directors and executive officers of Kingsley,
and with the legal and accounting firms of Kingsley, with respect to such
documentation; and that to the extent requested, all questions raised have
been answered to Micro-Hydro s complete satisfaction.
Section 4
Representations, Warranties and Covenants of Kingsley
and the Kingsley Stockholders
Kingsley and the Kingsley Stockholders represent and warrant to,
and covenant with, Micro-Hydro as follows:
4.1 Ownership. Kingsley owns the Assets, free and clear of any
liens or encumbrances of any type or nature whatsoever, except the
Liabilities, and Kingsley has full right, power and authority to convey these
Assets without qualification.
4.2 Condition of the Assets. At the time of Closing, the Assets
shall be in good and marketable condition, suitable for the uses for which
they were intended and, reasonable wear and tear excepted, shall be free of
any material defect.
4.3 Corporate Status. Kingsley is a limited liability Company
duly organized, validly existing and in good standing under the laws of the
State of Louisiana and is licensed or qualified as a foreign corporation in
all states or foreign countries and provinces in which the nature of
Kingsley s business or the character or ownership of Kingsley properties makes
such licensing or qualification necessary.
4.4 Corporate Authority. Kingsley has full corporate power and
authority to enter into this Plan and to carry out its obligations hereunder
and will deliver to Micro-Hydro or Micro-Hydro representatives at the Closing
a certified copy of resolutions of its Board of Directors authorizing
execution of this Plan by Kingsley s officers and performance thereunder, and
the directors adopting and delivering such resolutions are the duly elected
and incumbent directors of Kingsley.
4.5 Due Authorization. Execution of this Plan and performance
by Kingsley hereunder have been duly authorized by all requisite corporate
action on the part of Kingsley, and this Plan constitutes a valid and binding
obligation of Kingsley and performance hereunder will not violate any
provision of the Articles of Incorporation, Bylaws, agreements, mortgages or
other commitments of Kingsley.
4.6 No Inventory. None of the Assets constitute inventory of
Kingsley and the principal business of Kingsley is not the sale of merchandise
from stock.
4.7 Further Assurances of Kingsley. Kingsley will execute such
assignment or assignments and will perform such other acts as will enable
Micro-Hydro to take good and marketable title to the Assets.
4.8 Investment Intent. The Kingsley Stockholders are acquiring
the restricted securities of Micro-Hydro to be exchanged and delivered to
them under this Plan for investment and not with a view to the sale or
distribution thereof, and the Kingsley Stockholders have no commitment or
present intention to liquidate the Micro-Hydro or to sell or otherwise dispose
of the Micro-Hydro shares. The Kingsley Stockholders shall execute and
deliver to Micro-Hydro on the Closing an Investment Letter attached hereto as
Exhibit G and incorporated herein by reference, acknowledging the
"unregistered" and "restricted" nature of the shares of Micro-Hydro being
received under the Plan in exchange for the Kingsley Shares, and receipt of
certain material information regarding Micro-Hydro.
4.9 Financial Statements. The financial statements of Kingsley
furnished to Micro-Hydro, consisting of a balance sheet dated October 31,
1998, attached hereto as Exhibit E, and incorporated herein by reference, are
correct and fairly present the financial condition of Kingsley as of the date
and for the period involved, and such statements were prepared in accordance
with generally accepted accounting principles consistently applied, and no
material change has occurred in the matters disclosed therein, except as
indicated in Exhibit F, which is attached hereto and incorporated herein by
reference. These financial statements do not contain any untrue statement of
a material fact or omit to state a material fact necessary in order to make
the statements made, in light of the circumstances under which they were made,
not misleading.
4.10 Confidentiality. Until the Closing (and continuously if
there is no Closing), Kingsley, the Kingsley Stockholders and their
representatives will keep confidential any information which they obtain from
Micro-Hydro concerning Micro-Hydro properties, assets and business. If the
transactions contemplated by this Plan are not consummated by December 31,
1998, Kingsley and the Kingsley Stockholders will return to Micro-Hydro all
written matter with respect to Micro-Hydro obtained by them in connection with
the negotiation or consummation of this Plan.
4.11 Environmental Matters. Kingsley has no knowledge of any
assertion by any governmental agency or other regulatory authority of any
environmental lien, action or proceeding, or of any cause for any such lien,
action or proceeding related to the business operations of Kingsley or
Kingsley s predecessors. In addition, to the best knowledge of Kingsley,
there are no substances or conditions which may support a claim or cause of
action against Kingsley or any of Kingsley s current or former officers,
directors, agents or employees, whether by a governmental agency or body,
private party or individual, under any Hazardous Materials Regulations.
Hazardous Materials means any oil or petrochemical products, PCB s,
asbestos, urea formaldehyde, flammable explosives, radioactive materials,
solid or hazardous wastes, chemicals, toxic substances or related materials,
including, without limitation, any substances defined as or included in the
definition of hazardous substances, hazardous wastes, hazardous
materials, or toxic substances under any applicable federal or state laws
or regulations. Hazardous Materials Regulations means any regulations
governing the use, generation, handling, storage, treatment, disposal or
release of hazardous materials, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act, the
Resource Conservation and Recovery Act and the Federal Water Pollution Control
Act.
4.12 Access to Information Regarding Micro-Hydro. Kingsley and
the Kingsley Stockholders acknowledge that they have been delivered copies of
what has been represented to be documentation containing all material
information respecting Micro-Hydro and Micro-Hydro present and contemplated
business operations, potential acquisitions, management and other factors;
that they have had a reasonable opportunity to review such documentation and
discuss it, to the extent desired, with their legal counsel, directors and
executive officers; that they have had, to the extent desired, the opportunity
to ask questions of and receive responses from the directors and executive
officers of Micro-Hydro, and with the legal and accounting firms of Micro-
Hydro, with respect to such documentation; and that to the extent requested,
all questions raised have been answered to their complete satisfaction.
Section 5
Conditions Precedent to Obligations of Kingsley and the Kingsley Stockholders
All obligations of Kingsley and the Kingsley Stockholders under
this Plan are subject, at their option, to the fulfillment, before or at the
Closing, of each of the following conditions:
5.1 Representations and Warranties True at Closing. The
representations and warranties of Micro-Hydro contained in this Plan shall be
deemed to have been made again at and as of the Closing and shall then be true
in all material respects and shall survive the Closing.
5.2 Due Performance. Micro-Hydro shall have performed and
complied with all of the terms and conditions required by this Plan to be
performed or complied with by it before the Closing.
5.3 Officers' Certificate. Kingsley and the Kingsley
Stockholders shall have been furnished with a certificate signed by the
President of Micro-Hydro, in such capacity, attached hereto as Exhibit H and
incorporated herein by reference, dated as of the Closing, certifying (1) that
all representations and warranties of Micro-Hydro contained herein are true
and correct; and (2) that since the date of the financial statements (Exhibits
C and C-1 hereto), there has been no material adverse change in the financial
condition, business or properties of Micro-Hydro, taken as a whole.
5.4 Opinion of Counsel of Micro-Hydro. Kingsley and the
Kingsley Stockholders shall have received an opinion of counsel for Micro-
Hydro, dated as of the Closing, to the effect that (1) the representations of
Sections 3.1, 3.2 and 3.11 are correct; (2) except as specified in the
opinion, counsel knows of no inaccuracy in the representations in 3.5, 3.6 or
3.7; and (3) the shares of Micro-Hydro to be issued to the Kingsley
Stockholders under this Plan will, when so issued, be validly issued, fully
paid and non-assessable.
5.5 Assets and Liabilities of Micro-Hydro. Unless otherwise
agreed, Micro-Hydro shall have no assets and no liabilities at Closing, and
all costs, expenses and fees incident to the Plan shall have been paid.
5.6 Resignation of Directors and Executive Officers and
Designation of New Directors and Executive Officers. The present directors
and executive officers of Micro-Hydro shall resign, and shall have designated
nominees of Kingsley as outlined in Section 1.6 hereof as directors and
executive officers of Micro-Hydro to serve in their place and stead, until the
next respective annual meetings of the stockholders and Board of Directors of
Micro-Hydro, and until their respective successors shall be elected and
qualified or until their respective prior resignations or terminations.
5.7 Name Change and Reverse Split of Micro-Hydro. Subsequent
to the Closing of this Plan, the Company shall adopt such resolutions as
necessary for the preparation and mailing to stockholders of an Information
Statement for the purpose of amending the Company s Articles of Incorporation
to change the name of the Company to "The Kingsley Coach, Inc. and to effect
a reverse split of its outstanding common stock on a basis of one for two,
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.
Section 6
Conditions Precedent to Obligations of Micro-Hydro
All obligations of Micro-Hydro under this Plan are subject, at
Micro-Hydro option, to the fulfillment, before or at the Closing, of each of
the following conditions:
6.1 Representations and Warranties True at Closing. The
representations and warranties of Kingsley and the Kingsley Stockholders
contained in this Plan shall be deemed to have been made again at and as of
the Closing and shall then be true in all material respects and shall survive
the Closing.
6.2 Due Performance. Kingsley and the Kingsley Stockholders
shall have performed and complied with all of the terms and conditions
required by this Plan to be performed or complied with by them before the
Closing.
6.3 Officers' Certificate. Micro-Hydro shall have been
furnished with a certificate signed by the President of Kingsley, in such
capacity, attached hereto as Exhibit I and incorporated herein by reference,
dated as of the Closing, certifying (1) that all representations and
warranties of Kingsley and the Kingsley Stockholders contained herein are true
and correct; and (2) that since the date of the financial statements (Exhibit
E), there has been no material adverse change in the financial condition,
business or properties of Kingsley, taken as a whole.
6.4 Books and Records. The Kingsley Stockholders or the Board
of Directors of Kingsley shall have caused Kingsley to make available all
books and records of Kingsley, including minute books and stock transfer
records; provided, however, only to the extent requested in writing by Micro-
Hydro at Closing.
Section 7
Termination
Prior to Closing, this Plan may be terminated (1) by mutual
consent in writing; (2) by either the sole director of Micro-Hydro or Kingsley
and the Kingsley Stockholders if there has been a material misrepresentation
or material breach of any warranty or covenant by the other party; or (3) by
either the sole director of Micro-Hydro or Kingsley and the Kingsley
Stockholders if the Closing shall not have taken place, unless adjourned to a
later date by mutual consent in writing, by the date fixed in Section 2.
Section 8
General Provisions
8.1 Further Assurances. At any time, and from time to time,
after the Closing, each party will execute such additional instruments and
take such action as may be reasonably requested by the other party to confirm
or perfect title to any property transferred hereunder or otherwise to carry
out the intent and purposes of this Plan.
8.2 Waiver. Any failure on the part of any party hereto to
comply with any of Micro-Hydro obligations, agreements or conditions hereunder
may be waived in writing by the party to whom such compliance is owed.
8.3 Brokers. Each party represents to the other parties
hereunder that no broker or finder has acted for it in connection with this
Plan, and agrees to indemnify and hold harmless the other parties against any
fee, loss or expense arising out of claims by brokers or finders employed or
alleged to have been employed by he/she/it.
8.4 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been given if delivered in
person or sent by prepaid first-class registered or certified mail, return
receipt requested, as follows:
If to Micro-Hydro: 5525 South 900 East, Suite 110
Salt Lake City, Utah 84117
With a copy to: Leonard W. Burningham, Esq.
Suite 205 Hermes Building
455 East 500 South Street
Salt Lake City, Utah 84111
If to Kingsley: 6510 South Acres
Houston, Texas 77048
If to the Kingsley
Stockholders: To the addresses listed on Exhibit A
8.5 Entire Agreement. This Plan constitutes the entire
agreement between the parties and supersedes and cancels any other agreement,
representation, or communication, whether oral or written, including the
Letter of Intent dated November 8, 1998, between the parties hereto relating
to the transactions contemplated herein or the subject matter hereof.
8.6 Headings. The section and subsection headings in this Plan
are inserted for convenience only and shall not affect in any way the meaning
or interpretation of this Plan.
8.7 Governing Law. This Plan shall be governed by and construed
and enforced in accordance with the laws of the State of Delaware, except to
the extent pre-empted by federal law, in which event (and to that extent
only), federal law shall govern.
8.8 Assignment. This Plan shall inure to the benefit of, and be
binding upon, the parties hereto and their successors and assigns; provided
however, that any assignment by any party of Micro-Hydro s rights under this
Plan without the prior written consent of the other parties shall be void.
8.9 Counterparts. This Plan may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
8.10 Default. In the event of any default hereunder, the
prevailing party in any action to enforce the terms and provisions hereof
shall be entitled to recover reasonable attorney's fees and related costs.
IN WITNESS WHEREOF, the parties have executed this Agreement and
Plan of Reorganization effective the day and year first above written.
MICRO-HYDRO POWER, INC.
Date: 12/18/98 By/S/Quinton Hamilton
Quinton Hamilton, President
THE KINGSLEY COACH, INC.
Date: 12/17/98 By/s/Ralph Dickenson
Ralph Dickenson, Chairman
AGREEMENT AND PLAN OR REORGANIZATION
COUNTERPART SIGNATURE PAGE
This Counterpart Signature Page for that certain AGREEMENT AND PLAN OF
REORGANIZATION (the "Plan") dated as of the 17th day of December, 1998, among
Micro-Hydro Power, Inc., a Delaware corporation ("Micro-Hydro"); The Kingsley
Coach, L.L.C., a Louisiana limited liability company ("Kingsley"); and the
equity interest holders of Kingsley who are signatories thereto is executed by
the undersigned, an equity interest holder in Kingsley as of the date first
written above. The undersigned, through execution and delivery of this
Counterpart Signature page, intends to be legally bound by the terms of the
Agreement.
DKR, Inc.
Catherine Dickenson
by:/s/Catherine Dickenson
1828 Holloway Road
Lebanon, TN 37090
Verdo Lancaster
by:/s/Verdo Lancaster
33236 Walker Road North
Walker, LA 70785
Richard Duston
/s/Richard Duston
904 College Street
Columbus, MS 39701
<PAGE>
EXHIBIT A
STOCKHOLDERS OF THE KINGSLEY COACH,
L.L.C.
Number of Shares of
Equity Interest Micro-Hydro
Owned of to be
Name and Address Kingsley Received in Exchange
DRK, Inc. 43.75% 3,062,500
14010 Sunfish Lake Blvd.
Anoka, MN 55303
Verdo Lancaster 43.75% 3,062,500
33236 Walker Road North
Walker, LA 70785
Richard Duston 12.5% 875,000
904 College Street
Columbus, MS 39701
<PAGE>
EXHIBIT B
ASSETS AND LIABILITIES OF
THE KINGSLEY COACH, L.L.C.
AS OF OCTOBER 31, 1998
<TABLE>
ACCOUNTS PAYABLE Current-30 60 90 over 90
10/31/98
<S> <C> <C> <C> <C>
AIT Freight 955.48
Air Dreco 114.21
Air Engineering 165.53
Austin Hardware 337.82
American Trucker 1100.00
American Trucking On 4000.00
Arriving Magazine 1015.00 1315.00
BFI 152.28
BRT Leasing 1925.00
Belmont Publishing 3435.00
Bus conversion 350.75 253.00
CL Alloys 235.00 6032.58
City of Houston 38.15
Citibank 6455.41
Deutsche Financial 1700.10
E & G Transportation 230.00
Family Motor Coach 250.00
Foss Manufacturing 112.00
Jim Gibson 23.52
Gulf Coast MSO 233.00
HL&P 590.00
Houston Freightliner 194.32 799.48
Hutton Communcation 1651.79 1487.93
IRS 20924.95
Kingsley Coach SE 144.40
LaRose of Memphis 400.75
Lewisburg Builders 341.79
Natl Trust Exchange 4165.56
Truck Paper 580.00
Jack Patterson 117.42
Performance Magazine 199.00
POPP Telcom 248.34
R & B Inc. 330.30 370.65
Reliastar Inc. 451.30
Brad Rhorer 2295.00
Paul Selmar 440.00
Shorewood RV 375.93
Shriver Ins. 789.18
Smart Power 4250.00
SW Bell 1751.83
Stewart & Stevenson 2407.27
TX Workforce Comm 988.29
Ticketman 932.00
Transportation Equip News 3032.00 1500.00
State of TN 479.00
Steel Supply 329.20
Thor America 43.25
UPS 740.13
University Loft 50.37
Vanner 1359.75
Viking Office Products 174.34
Wilson Art 174.72
TOTALS $23108.41 $14035.85 $7148.70 $49723.52
</TABLE>
<TABLE>
KINGSLEY COACH
Inventory October 31, 1998
Qty Description Each Extended Cost
<S> <C> <C> <C>
1 Roof Cap Moulding $10,000.00
1 Rear Cap Moulding 8,000.00
2 Rear Fender Mold 5,000.00 10,000.00
2 Front Step Mold 5,000.00 10,000.00
1 Side Faring Mold 3,000.00
1 Side Faring Extension mold 1,000.00
1 3/4" Drill press 900.00
1 Radial Arm Saw 2,500.00
4 material stands with bins 1,000.00 4,000.00
1 Ramco Band saw 2,500.00
1 M16 millermatic 250 welder 2,700.00
1 10" Table Saw 800.00
2 Modular Work Tables 400.00 800.00
2 Tail Light Assembly molds 200.00 400.00
1 Hydralic Pipe & Tubing Bender 800.00
1 50" Brake Press 600.00
1 36" Brake Press 250.00
3 Mobile Work Tables 100.00 300.00
1 Thermal Dyamier Plasma Cutter 2,300.00
1 Oxygen/Acetelyn Torch set 380.00
1 Miller 120 Stick Welder 480.00
1 10 Ton Chain Hoist 200.00
2 SAE Wrench Set 400.00 800.00
1 3/4" Socket Set 100.00
1 52" Manuel Shear 800.00
1 3 Phase 10HP Compressor 1,200.00
1 20 Gallon Water heater 189.00
1 110 Shore Power Compressor 280.00
1 6.5K Propane Generator 3,800.00
1 50000' 14 Gauge Wire 7,500.00
1 40000" 16 Gauge Wire 1,200.00
1 60000" 12 Gauge Wire 4,800.00
1 Kingsley Wire Stamper 10,000.00
300' 3/8" Loom .42 126.00
600' 1/2" Loom .50 300.00
500' 5/8" Loom .94 470.00
3 14" Air Suspension Bags 140.00 420.00
1 Fantastic Fan 150.00
10 48" Flourescent Light Fixtures 16.00 150.00
1 130 yards Carpet 480.00
3 20 Ton Hydralic Jacks 80.00 240.00
400' Weather Stripping .92 370.00
1 Complete Slide Out Ram Set 2,800.00
4 48" Heat Lamps 200.00 800.00
4 Air Ride Seats 875.00 3,500.00
2 Flex Steel Electric Seats 1,250.00 2,500.00
1 Pleasure Coach Demo 225,000.00
1 Custom Coach Demo 350,000.00
1 6 gal propane Tank(Vapor) 387.00
1 Flex Steel Electric Seat Motor 350.00
500# B5 Stainless Steel Sheets 980.00
27 Mirrored Stainless Sheets 211.11 5,700.00
1 48X96X1/8 Diamond Tread Plate 180.00
150' Side Moulding 1.24 186.00
1 11R22.5 Bridgestone Tire 280.00
3 Bay Door Latches 130.00 390.00
3 Tail Light Assemblies 48.00 144.00
1 Fax Machine 240.00
1 Computer 3,800.00
4 Office Desks 150.00 600.00
1 Executive Desk 380.00
2 Conference Tables 80.00 160.00
1 5 Dubic Foot Icebox 189.00
1 3 seciton scaffold 600.00
1 6' ladder 80.00
1 10' extension ladder 120.00
1 1994 Mercedes 240 D 4,000.00
1 Portable Band Saw 240.00
1 30' Band Saw 240.00
1 Color Copier 800.00
1 Video Door Monitor System 180.00
40 Door Latch Props 8.00 320.00
3 Car Stereo systems 169.00 507.00
1 Enterainment System Speakers 90.00
200' 12-2 Rolmex Wire .37 73.00
1 900 Watt Microwave 139.00
2 220 Volt a/c Units 320.00 640.00
2 BTI Monitoring system 150.00 300.00
2 Frt Spring Air Ride system 480.00 960.00
2 25 Gal Water Tanks 85.00 170.00
1 70 Gal Water Tank 125.00
2 A Stage Foam Tanks 300.00 600.00
2 B Stage Foam Tanks 300.00 600.00
1 Brass Shower Door 143.00
1 32 X 80 Entrance Door 150.00
150' Strip Lights w/ modular control 4.00 600.00
3000# A Structural Steel-Lower Bay 1,500.00
700# Structural Aluminum 900.00
KC1024Kingsley in Process 12,000.00
KC1023Kingsley in Process 48,000.00
KC1019Kingsley in Process 38,000.00
KC1021Kingsley in Process 38,000.00
KC1015Kingsley in Process 35,000.00
Assorted Hand tools 5,000.00
Misc Electrical Connectors 900.00
Misc Hardware 900.00
TOTAL 884,373.00
</TABLE>
<PAGE>
EXHIBIT C
MICRO-HYDRO POWER, INC.
AUDITED FINANCIAL STATEMENTS
FOR THE YEARS ENDED
DECEMBER 31, 1997 AND 1996
See 10-KSB Annual Report for the year ended December 31, 1997, as
previously filed with the Securities and Exchange Commission.
<PAGE>
EXHIBIT C-1
MICRO-HYDRO POWER, INC.
UNAUDITED BALANCE SHEET AND STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
See 10-QSB Quarterly Report for the quarter ended September 30, 1998, as
previously filed with the Securities and Exchange Commission.
<PAGE>
EXHIBIT D
None.
<PAGE>
EXHIBIT E
THE KINGSLEY COACH, L.L.C.
UNAUDITED BALANCE SHEET
FOR THE PERIOD ENDED
OCTOBER 31, 1998
<TABLE>
KINGSLEY COACH, LLC
ASSETS
<S> <C> <C> <C>
Current Assets:
Cash $ 8,945
Accounts Receivable:
Trade $23,524
Inter-Company 181,926
Employee & Pend. Legal 16,571 222,021
Inventory 219,065
Prepaid expenses 0
Total Current Assets: 450,031
Leasehold Improvements 32,499
Less: Accum. Amortization (3,168) 29,331
Utility Deposits 3,650
Total Assets: 483,012
Liabilities
Current Liabilities
Accounts Payable-Inter/co 380,725
Advance Deposits 483,800
Payroll Taxes Payable 27,219
Total Current Liabilities 891,744
Loans Payable:
Deposit Guaranty 188,532
Hibernia Bank 200,000
Bert Lancaster 175,000 563,532
Partners Equity:
Partners Contribution (792,655)
Undistributed Partners Share (179,609) (972,264)
Total Liabilities and Partners Equity 483,012
Note:
An agreement to purchase for inventory demo. purposes two coaches for $285,000
and $217,000.
</TABLE>
<PAGE>
EXHIBIT F
None.
<PAGE>
EXHIBIT G
Micro-Hydro Power, Inc.
5525 South 900 East, #110
Salt Lake City, Utah 84117
Re: Exchange of Assets and Liabilities of The Kingsley
Coach, L.L.C., a Louisiana limited liability company
("Kingsley"), for shares of Micro-Hydro Power, Inc., a
Delaware corporation ("Micro-Hydro or the "Company")
Dear Ladies and Gentlemen:
Pursuant to that certain Agreement and Plan of Reorganization (the
"Plan") between the undersigned, Kingsley, the other equity interest holders
of Kingsley and Micro-Hydro, I acknowledge that I have approved this exchange;
that I am aware of all of the terms and conditions of the Plan; that I have
received and personally reviewed a copy of the Plan and any and all material
documents regarding the Company, including, but not limited to the 10-KSB
Annual Report, the 10-QSB Quarterly Reports and all other Reports of the
Company filed with the Securities and Exchange Commission during the past
twelve months. I represent and warrant that I have sufficient knowledge and
experience to understand the nature of the exchange and am fully capable of
bearing the economic risk of the loss of my entire cost basis.
I further understand that immediately prior to the completion of
the Plan, Micro-Hydro had no assets and no liabilities, of any measurable
value, and that in actuality, the completion of the Plan and the exchange of
my shares of Kingsley for shares of Micro-Hydro results in a decrease in the
actual percentage of ownership that my shares of Kingsley represented in
Kingsley prior to the completion of the Plan.
I understand that you have and will make books and records of your
Company available to me for my inspection in connection with the contemplated
exchange of my shares, options or warrants, and that I have been encouraged to
review the information and ask any questions I may have concerning the
information of any director or officer of the Company or of the legal and
accounting firms for the Company. I understand that the accountant for the
Company is Mantyla, McReynolds & Associates, 5872 South 900 East, #250, Salt
Lake City, Utah 84121, Telephone (801) 269-1818; and that legal counsel for
Micro-Hydro is Leonard W. Burningham, Esq., 455 East 500 South, #205, Salt
Lake City, Utah 84111, Telephone (801) 363-7411. I further understand that,
upon the completion of the Plan, no accountant, attorney, employee or
consultant will have any claim of any kind against the Company for any event
or occurrence on or prior to the completion of the Plan.
I also understand that I must bear the economic risk of ownership
of any of the Micro-Hydro shares for a long period of time, the minimum of
which will be one (1) year, as these shares are "unregistered" shares and may
not be sold unless any subsequent offer or sale is registered with the United
States Securities and Exchange Commission or otherwise exempt from the
registration requirements of the Securities Act of 1933, as amended (the
"Act"), or other applicable laws, rules and regulations.
I intend that you rely on all of my representations made herein
and those in the personal questionnaire (if applicable) I provided to Kingsley
for use by Micro-Hydro as they are made to induce you to issue me the shares
of Micro-Hydro under the Plan, and I further represent (of my personal
knowledge or by virtue of my reliance on one or more personal
representatives), and agree as follows, to-wit:
1. That the shares being acquired are being received for
investment purposes and not with a view toward further distribution;
2. That I have a full and complete understanding of the phrase
"for investment purposes and not with a view toward further distribution";
3. That I understand the meaning of "unregistered shares and
know that they are not freely tradeable;
4. That any stock certificate issued by you to me in connection
with the shares being acquired shall be imprinted with a legend restricting
the sale, assignment, hypothecation or other disposition unless it can be made
in accordance with applicable laws, rules and regulations;
5. I agree that the stock transfer records of your Company
shall reflect that I have requested the Company not to effect any transfer of
any stock certificate representing any of the shares being acquired unless I
shall first have obtained an opinion of legal counsel to the effect that the
shares may be sold in accordance with applicable laws, rules and regulations,
and I understand that any opinion must be from legal counsel satisfactory to
the Company and, regardless of any opinion, I understand that the exemption
covered by any opinion must in fact be applicable to the shares;
6. That I shall not sell, offer to sell, transfer, assign,
hypothecate or make any other disposition of any interest in the shares,
options or warrants being acquired except as may be pursuant to any applicable
laws, rules and regulations;
7. I fully understand that my shares which are being exchanged
for shares of the Company are "risk capital," and I am fully capable of
bearing the economic risks attendant to this investment, without
qualification; and
8. I also understand that without approval of counsel for
Micro-Hydro, all shares of Micro-Hydro to be issued and delivered to me in
exchange for my shares of Kingsley shall be represented by one certificate
only and which such certificate shall be imprinted with the following legend
or a reasonable facsimile thereof on the front and reverse sides thereof:
The shares, options or warrants of stock represented
by this certificate have not been registered under the
Securities Act of 1933, as amended, and may not be
sold or otherwise transferred unless compliance with
the registration provisions of such Act has been made
or unless availability of an exemption from such
registration provisions has been established, or
unless sold pursuant to Rule 144 under the Act.
Any request for more than one stock certificate must be
accompanied by a letter signed by the requesting stockholder setting forth all
relevant facts relating to the request. Micro-Hydro will attempt to
accommodate any stockholders' request where Micro-Hydro views the request is
made for valid business or personal reasons so long as in the sole discretion
of Micro-Hydro, the granting of the request will not facilitate a "public"
distribution of unregistered shares of Micro-Hydro.
You are requested and instructed to issue a stock certificate as
follows, to-wit:
Verdo Lancaster and Frieda M. Lancaster JTRS
33236 Walker North
Walker, LA 70785
Dated this 18th day of December, 1998.
/s/Verdo Lancaster
DRK, Inc.
14010 Sunfish Lake Blvd.
Anoka, MN 55303
Dated this 18th day of December, 1998.
/s/Catherine Dickenson
Richard K. Duston and Linda L. Duston, JTRS
904 College Street
Columbus, MS 39701
Dated this 18th day of December, 1998.
/s/Richard Duston
<PAGE>
EXHIBIT H
CERTIFICATE OF OFFICER PURSUANT TO
AGREEMENT AND PLAN OF REORGANIZATION
The undersigned, the President of Micro-Hydro Power, Inc., a
Delaware corporation ("Micro-Hydro"), represents and warrants the following as
required by the Agreement and Plan of Reorganization (the "Plan") between
Micro-Hydro and The Kingsley Coach, L.L.C., a Louisiana limited liability
company ("Kingsley"), and the Kingsley Stockholders, to-wit:
1. That the undersigned is the President of Micro-Hydro and has
been authorized and empowered by its Board of Directors to execute and deliver
this Certificate to Kingsley and the Kingsley Stockholders;
2. Based upon the personal knowledge, information and belief of
the undersigned and opinions of counsel for Micro-Hydro regarding the Plan:
(i) All representations and warranties of Micro-Hydro
contained within the Plan are true and correct;
(ii) Micro-Hydro has complied with all terms and provisions
required of it pursuant to the Plan; and
(iii) There have been no material adverse changes in the
financial position of Micro-Hydro as set forth in its
financial statements for the years ended December 31,
1997 and 1996, and September 30, 1998, except as set
forth in Exhibit D to the Plan.
MICRO-HYDRO POWER, INC.
By/s/Quinton N. Hamilton
Quinton N. Hamilton, President
<PAGE>
EXHIBIT I
CERTIFICATE OF OFFICER PURSUANT TO
AGREEMENT AND PLAN OF REORGANIZATION
The undersigned, the President of The Kingsley Coach, L.L.C., a
Louisiana limited liability company ("Kingsley"), represents and warrants the
following as required by the Agreement and Plan of Reorganization (the "Plan")
between Kingsley, the Kingsley Stockholders and Micro-Hydro Power, Inc., a
Delaware corporation ("Micro-Hydro"), to-wit:
1. That he is the President of Kingsley and has been authorized
and empowered by its Board of Directors to execute and deliver this
Certificate to Micro-Hydro;
2. Based on his personal knowledge, information, belief:
(i) All representations and warranties of Kingsley
contained within the Plan are true and correct;
(ii) Kingsley has complied with all terms and provisions
required of it pursuant to the Plan; and
(iii) There have been no material adverse changes in the
financial position of Kingsley as set forth in its
balance sheet dated October 31, 1998, except as set
forth in Exhibit F to the Plan.
THE KINGSLEY COACH, L.L.C.
By/s/Ralph Dickenson
Ralph Dickenson, President
/s/Ralph Dickenson
Ralph Dickenson, Personally
CONSULTING AND COMPENSATION AGREEMENT
THIS AGREEMENT is made and entered into this 15th day of December, 1998,
by and between Russell Ratliff and Southeast Financial Consulting, Inc., on
one hand, (collectively "SFC") and Kingsley Coach, L.L.C. ("Kingsley"), DRK,
Inc., Verdo Lancaster and Richard Duston, on the other.
WHEREAS, Kingsley is a Louisiana limited liability company whose members
are DRK, Inc. (43.75% equity ownership), Verdo Lancaster (43.75% equity
ownership), and Richard Duston (12.5% equity ownership);
WHEREAS, Kingsley desires to effectuate a reverse merger with Micro
Hydro Power, Inc., a Delaware corporation ("MHP") which will subsequent to the
merger change its name to Kingsley Coach, Inc., or some close derivation
thereof;
WHEREAS, immediately subsequent to the merger there will be outstanding
10,100,010 shares of MHP stock, owned as follows: current shareholders of MHP
(600,010 shares or 6.0%); DRK, Inc. (3,062,500 shares or 30.63%); Verdo
Lancaster (3,062,500 shares or 30,63%); Richard Duston (875,000 shares or
8.75%); and SFC (2,400,000 shares or 24%);*
*SFC's shares will be held in escrow and released to SFC upon
performance as stated herein.
WHEREAS, Kingsley desires to use the consulting services and business
expertise of SFC, on a long term basis, to consummate the merger with MHP and
to assist Kingsley in the post-merger sale of restricted stock; and
WHEREAS, SFC is willing to provide such services in consideration for
the compensation stated herein;
NOW, THEREFORE, in consideration for the mutual promises contained
herein, SFC and Kingsley agree as follows:
1. Duties and Responsibilities of SFC
The primary responsibility of SFC will be to raise a minimum of two
million dollars ($2,000,000) in capital by assisting Kingsley in the post-
merger sale of restricted stock. In connection with such assistance, SFC
agrees that it will not disseminate any misleading information and will not in
any event disseminate any written information without the prior written
approval of Kingsley.
SFC will also provide general consulting services to Kingsley regarding
the contemplated merger with MHP. SFC will, both prior and subsequent to the
merger, provide marketing services to Kingsley. SFC will monitor market
developments pertinent to the post-merger sale of stock and will advise
Kingsley on the business significance thereof, in order to assist Kingsley in
strategic planning activities.
2. Compensation to SFC for services already rendered by SFC
a. For services already rendered by SFC, immediately after the merger
the escrow agent will release to SFC 147,000 shares of post-merger stock, from
which stock SFC will transfer to Todd Halseth 97,000 shares in satisfaction of
an agreement dated November 1998, and transfer to Wilbur Rimes 50,000 shares.
b. For services already rendered by SFC, including the transaction
pursuant to which Kingsley will transfer to James Whitehead 163,000 shares of
post-merger restricted stock, the escrow agent will immediately after the
merger release to SFC 83,000 shares of post-merger stock.
3. Compensation for Future Capital Raising Services of SFC
a. SFC agrees to assist Kingsley in the sale of Two Million
(2,000,000) shares of post-merger restricted stock at a price of One Dollar
($1.00) per share. MHP will issue an additional Two Million (2,000,000)
shares of post-merger stock for this purpose, thus resulting in 12,000,010
total shares outstanding.
b. In the event that within 15 days of the date the post-merger stock
begins trading, SFC has secured the sale of five hundred thousand (500,000)
shares of post-merger stock at a price of One Dollar ($1.00) per share and
Kingsley has received compensation therefor, the escrow agent will release to
SFC an additional Five Hundred Forty Thousand Five Hundred (542,500) shares of
post-merger stock held in escrow.
c. In the event that within 45 days of the date the post-merger stock
begins trading, SFC has secured the sale of the remainder of the 2,000,000
shares (i.e., and additional 1,500,000 shares of post-merger stock at a price
of One Dollar ($1.00) per share and Kingsley has received compensation
therefor, the escrow agent will release to SFC One Million Six Hundred Twenty
Seven Thousand five Hundred shares of post-merger stock held in escrow.
d. In the event SFC fails to meet the deadlines in b, and c, the
escrow agent shall transfer the shares held in escrow back to the corporation
which will recertificate same and hold same as treasury shares. Kingsley may
extend the time periods in b. and c. as Kingsley deems prudent. In the event
the merger is not consummated, or the post-merger stock is not trading, within
thirty (30) days of the date of this agreement, all obligations under this
agreement are void. Kingsley may extend this time period as Kingsley deems
prudent.
e. The escrow agent will release to SFC the shares held in escrow pro
rata to the stock shares purchased by SFC sources, to wit: When 10% of the
2,000,000 shares are sold to SFC sources, SFC will receive 10% of the
2,170,000 shares held in escrow, and so on until the two million shares sold
to SFC sources are purchased and all the 2,170,000 shares held in escrow are
released.
f. The escrow agent shall release the shares held in escrow upon
receipt of written instructions from Kingsley. All parties to this agreement
further agree that in any legal action against the escrow agent, the escrow
agent shall receive from any party the attorney fees the escrow agent incurs
in sail legal action. Each party shall be responsible for said attorney fees
jointly and severally.
g. SFC shall, out of the 2,170,000 shares held in escrow, satisfy all
Kingsley and/or SFC obligations to John Acunta and Leonard Burningham.
h. The Kingsley members shall retain the voting rights to the
2,170,000 shares issued to SFC. Furthermore, SFC will notify Kingsley of
SFC's intent to subsequently transfer to any third party any of the 2,170,000
shares and Kingsley shall have the right to repurchase said stock from SFC for
fifteen (15) days after such notice and for the consideration contemplated by
SFC and such third party.
4. Sole Agreement
This agreement supersedes all previous agreements between Kingsley and
SFC/Ratliff and represents the full and final agreement between Kingsley and
SFC/Ratliff and may not be changed orally but only in a writing signed by each
party hereto.
5. Law Governing
This agreement will be governed by the laws of the State of Louisiana,
with venue in East Baton Rouge Parish, Louisiana.
6. Post Transaction Ownership
For informational purposes, it is noted that after the consummation of
all transactions reflected herein, the ownership percentage of all
shareholders will be as follows:
DRK: 25.52%
Lancaster: 25.52%
Duston: 7.29%
SFC: 20%
Jenson and current MPH existing shareholders: 5%
SFC Sources who purchase of stock 16.6%
IN WITNESS WHEREOF, the parties hereto now sign this Agreement on the
date first above written, attesting by signature that the respective party has
read the foregoing document, understands its terms, conditions, and intentions
and fully assents thereto.
/s/Ralph Dickenson
Kingsley Coach, L.L.C. DRK, Inc.
/s/Russell A. Ratliff /s/Verdo Lancaster
Southeast Financial Consulting, Inc. Verdo Lancaster
/s/Russell A. Ratliff
Russell Ratliff Richard Duston
ACTION BY UNANIMOUS CONSENT OF THE
BOARD OF DIRECTORS
OF
MICRO-HYDRO POWER, INC.
The undersigned, being the duly elected and incumbent directors of
Micro-Hydro Power, Inc., a Delaware corporation (the "Company"), acting
pursuant to Section 141(f) of the Delaware General Corporation Law, do hereby
adopt the following resolutions, effective as of the date hereof, unless
indicated otherwise:
RESOLVED, that the Company acquire the assets of The Kingsley
Coach, L.L.C., a Louisiana limited liability company ("Kingsley"),
in consideration of the exchange of 7,000,000 "unregistered" and
"restricted" shares of the $0.00001 par value common stock of the
Company, and assume the liabilities of Kingsley described in
Exhibit B of the Agreement and Plan of Reorganization (the "Plan")
between the Company, Kingsley and the Kingsley Stockholders,
presented to a meeting of the Board of Directors;
FURTHER, RESOLVED, that in the good faith judgment of the
directors, the acquisition of the assets listed in Exhibit B and
the assumption of the liabilities listed in Exhibit B as
contemplated by the Plan is fair, just and equitable, and in the
best interest of the stockholders of the Company;
FURTHER, RESOLVED, that such shares, when issued, be deemed
validly issued, fully paid and non-assessable;
FURTHER, RESOLVED, that the delivery of such shares be subject to
the execution and delivery of an Investment Letter by each
Kingsley Stockholder; the execution and delivery of the Plan by
each Kingsley Stockholder who is party to the Plan and Kingsley;
and compliance by Kingsley and the Kingsley Stockholders with all
of the terms and provisions thereof prior to Closing;
FURTHER, RESOLVED, that the officers of the Company be and they
hereby are authorized and directed to execute and deliver the Plan
and all other documents required or deemed necessary to complete
the Plan for and on behalf of the Company pursuant to which the
Company shall acquire the assets and assume the liabilities
described in Exhibit B to the Plan in exchange for shares of the
Company in a reorganization within the meaning of Section
368(a)(1)(C) of the Internal Revenue Code of 1986, as amended;
FURTHER, RESOLVED, that on Closing, the following persons
nominated by the Board of Directors of Kingsley and as outlined in
Section 1.5 of the Plan be designated as the directors and
executive officers of the Company, to serve until the next
respective annual meetings of the stockholders and directors and
until their successors are elected and qualify, or until his or
her earlier resignation or termination: Ralph Dickenson,
Chairman, CEO and President; Verdo (Bert) Lancaster, Vice
President and Director; Richard Dutson, Secretary/Treasurer and
Director; Russell Ratliff, non-voting member of the Board of
Directors; Catherine Dickenson, Director; and James Whitehead,
Director;
FURTHER, RESOLVED, if the Plan is completed as contemplated, the
Company accept the resignations, in seriatim, of Quinton N.
Hamilton, Thomas J. Howells and Kathleen L. Morrison effective on
the Closing;
FURTHER, RESOLVED, the Company adopt a written compensation
agreement to issue 300,000 pre-split shares of its common stock
which shares will be issued subject to the prompt filing of a
Registration Statement with the Securities and Exchange Commission
on Form S-8 to the following persons for non-capital raising
services: Duane S. Jenson, 79,600 shares; Jeffrey D. Jenson,
79,600 shares; Travis Jenson, 39,800 shares; Quinton Hamilton,
1,000 shares; Thomas C. Howells, 25,000 shares; Kathleen L.
Morrison, 25,000 shares; and Leonard W. Burningham, Esq., 50,000
shares; and that the Company's President be the agent for all
purposes of the Form S-8 Registration Statement;
FURTHER, RESOLVED, that 2,400,000 pre-split "restricted
securities" be issued, subject to raising funding for the
reorganized Micro-Hydro by Southeast Financial Consulting, Inc.
pursuant to a Consulting and Compensation Agreement dated December
15, 1998, a copy of which is attached hereto and incorporated
herein by reference; provided, however, that 120,000 of these
shares be issued to Jenson Services, Inc.; and that 50,000 pre-
split "restricted securities" be issued to Leonard W. Burningham,
Esq. for services rendered and an additional 50,000 pre-split
"restricted securities" be issued to Jenson Services, Inc. for
services rendered;
FURTHER, RESOLVED, that a Proxy Statement or Information Statement
be prepared and mailed to all stockholders of record as of the
closing of the Plan on December 18, 1998, regarding a special
meeting or action by consent regarding the proposed name change to
"The Kingsley Coach, Inc." and reverse split of one for two post-
Plan shares;
FURTHER, RESOLVED, that each stockholder of Kingsley who has
signed the Plan between the Company and Kingsley, be and hereby is
deemed to be a stockholder "of record" of the Company for purposes
of voting or consenting to the name change and reverse split; and
FURTHER, RESOLVED, that the Company change its symbol on the OTC
Bulletin Board to one of the following symbols, in this order of
preference: KNGS, COCH, KOCH or KNGY.
Date: 18 Dec. 98 /s/Quinton N. Hamilton
Quinton N. Hamilton
Date: 18 Dec. 98 /s/Thomas J. Howells
Thomas J. Howells
Date: 12-18-98 /s/Kathleen L. Morrison
Kathleen L. Morrison
UNANIMOUS CONSENT OF THE DIRECTORS/MANAGERS/TRUSTEES
AND ALL OF THE EQUITY INTEREST HOLDERS OF
THE KINGSLEY COACH, L.L.C.
The undersigned, being all of the duly elected and incumbent
directors, managers and/or trustees of The Kingsley Coach, L.L.C, a Louisiana
limited liability company (the "Company"), and all of the equity interest
holders of the Company acting pursuant to the Laws of the State of Louisiana,
do hereby unanimously consent to and adopt the following resolutions,
effective the latest date hereof unless indicated otherwise, to-wit:
RESOLVED, that the Company exchange the assets described in
Exhibit B to the Plan referred to below in consideration of the
exchange of 7,000,000 "unregistered" and "restricted" shares of
the $0.00001 par value common stock of Micro-Hydro Power, Inc., a
Delaware corporation ("Micro-Hydro"), pursuant to an Agreement and
Plan of Reorganization (the "Plan") between the Company, all of
its equity interest holders and Micro-Hydro, and the assumption by
Micro-Hydro of the liabilities listed in Exhibit B to the Plan;
FURTHER, RESOLVED, that in the good faith judgment of the
directors and all of the stockholders, the Plan is fair, just and
equitable, and in the best interest of the Company and its equity
interest holders;
FURTHER, RESOLVED, that Ralph Dickenson be and is hereby
authorized and directed to execute and deliver the Plan and all
other documents required or deemed necessary to complete the Plan
for and on behalf of the Company pursuant to which Micro-Hydro
shall acquire the assets described in Exhibit B to the Plan and
assume the liabilities described in Exhibit B to the Plan in
exchange for such shares of Micro-Hydro in a reorganization within
the meaning of Section 368(a)(1)(C) of the Internal Revenue Code
of 1986, as amended, with the understanding that no tax opinion
has been given by Micro-Hydro or its counsel;
FURTHER, RESOLVED, that all transactions to issue securities of
the reorganized Micro- Hydro as outlined in the Consent of
Directors of Micro-Hydro adopting the Plan, a copy of which is
attached hereto, are adopted, ratified and approved, to include
(1) 300,000 pre-split "free trading" shares to be issued under an
S-8 Registration Statement to be filed with the Securities and
Exchange Commission; (2) 2,400,000 pre-split "restricted
securities" to be issued, subject to raising funding for the
reorganized Micro-Hydro, by Southeast Financial Consulting, Inc.
pursuant to a Consulting and Compensation Agreement dated December
15, 1998; and (3) 50,000 pre-split "restricted" securities to
Leonard W. Burningham, Esq. for services rendered and 50,000 pre-
split "restricted" securities to Jenson Services, Inc. for
services rendered; and
FURTHER, RESOLVED, that the $175,000 credit to Jenson Services as
outlined in the Plan in Section 1.8 thereof, is also adopted,
ratified and approved.
DIRECTORS, MANAGERS/ TRUSTEES
Date: 12/17/98 /s/Ralph Dickenson
Date: 12/17/98 /s/Verdo Lancaster
Date: /s/Richard Duston
EQUITY INTEREST HOLDERS
DKR, Inc.
Date: 12-17-98 By/s/Catherine Dickenson
Date: 12-17 1998 /s/Verdo Lancaster
Verdo Lancaster
Date: 12-17-98 /s/Richard Duston
Richard Duston
