SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 of 15(d) of the
Securities Exchange Act of 1934
September 21, 1999
------------------------------------------------
Date of Report (date of earliest event reported)
ROCKY MOUNTAIN POWER COMPANY
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Exact name of Registrant as Specified in its Charter
Colorado 0-22027 84-0503585
- ----------------- --------------- --------------
State or Other Jurisdiction Commission File IRS Employer
Identification of Incorporation Number Number
1358 5th Street, Santa Monica, California 90401
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Address of Principal Executive Offices, Including Zip Code
(310) 823-8622
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Registrant's Telephone Number, Including Area Code
Rocky Mountain Power Company
12835 E. Arapahoe Rd. T-II Ste. 110
Englewood, Co. 80046
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Former Name or Former Address, if Changed Since Last Report
<PAGE>
ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
On September 21, 1999, Rocky Mountain Power Company (the "Company")
completed the acquisition of 100% of the outstanding common stock of MPEG
Super Site, Inc., a Nevada corporation ("MPEG"), in exchange for 13,390,000
shares of the Company's Common Stock (approximately 93% of the shares now
outstanding).
The stock issuances were made pursuant to an Agreement
("Agreement") between the Company and MPEG. The terms of the Agreement
were the result of negotiations between the managements of the Company
and MPEG. However, the Board of Directors did not obtain any independent
"fairness" opinion or other evaluation regarding the terms of the Agreement,
due to the cost of obtaining such opinion or evaluation.
The foregoing summary of the Agreement is qualified by reference to the
complete text of the Agreement, together with the schedules thereto, which
is filed as Exhibit 10 hereto, and is incorporated herein by this
reference.
As a result of the transaction with MPEG and the issuance of
the 13,390,000 shares of the Company's Common Stock, following are
those persons known by the Company to own 5% or more of the Company's Voting
Stock:
Percent of
Outstanding
Name and Address Voting Shares Voting Shares
---------------- ------------- -------------
Kunimitsu Misawa 3,950,000 32.9%
13900 Panay Way, #M206
Marina del Rey, CA 90292
Joseph S. Muto 1,700,000 14.2%
6 Mela Lane
Rancho Palos Verdes, CA 90275
Thomas McGrew 450,000 3.75%
4824 Neblina Drive
Carlsbad, CA 92008
Kristen Welles-Lanham 1,700,000 14.2%
45 Glen Echo
Dove Canyon, CA 92679
Joseph J. Peirce 1,035,000 8.6%
5125 West Lake Avenue
Littleton, CO 80123
Timothy J. Brasel 910,000 (1) 7.6%
5770 S. Beech Court
Greenwood Village, CO 80121
_________________
(1) Includes 265,000 shares held by Brasel Family Partners, Ltd. and 645,000
shares held by La Mirage Trust.
2
<PAGE>
Effective on the closing of the acquisition, the Company's
officers and directors were as follows:
Kunimitsu Misawa - Chairman of the Board
Bruce M. Tomiyama - CFO, President and Secretary
Joseph S. Muto - Director
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
As described in Item 1 of this Report, on September 21, 1999,
the Company acquired all of the issued and outstanding common stock of MPEG
Super Site, Inc. ("MPEG") in exchange for shares of the Company's Common
Stock. The acquisition of MPEG (accounting acquirer) by the Company
(nonoperating shell) is considered in substance to be a capital transaction
and is accounted for in a manner similar to a reverse acquisition.
MPEG Super Site, located on the web at "www.MPEGSUPERSITE.com," is a
content provider of music and entertainment. The Internet has allowed
companies a direct avenue to the consumer that conventional artists and music
companies have been unable to achieve in the past. MPEG Super Site will
utilize the Internet and its technologies to permit the consumer to download
and play music, close to CD quality, directly from their website.
In addition, MPEG Super Site plans to take this approach to the next
level by allowing consumers to view or download live events including
concerts, pay-per-view programs and live sporting events from anywhere in the
world. Thus,the content will attract the end consumer and allow MPEG Super
Site to derive revenue from that download and pay-per-view as well as the
advertisers for the event(s). Further, MPEG Super Site has a working
agreement with the high profile Internet music provider mp3.com and is currently
negotiating additional strategic alliances with other companies involved in
Internet production, marketing and technology.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED. The
following financial statements for MPEG Super Site, Inc. for the period
from June 18, 1999 (inception) to June 30, 1999 are filed herewith:
INDEX
PAGE
1) AUDITED FINANCIAL STATEMENTS OF MPEG SUPERSITE, INC.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT . . . . . . . . .F-1
FINANCIAL STATEMENTS
Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . .F-2
Statement of Operations . . . . . . . . . . . . . . . . . . . . .F-3
Statement of Stockholders' Equity . . . . . . . . . . . . . . . .F-4
Statement of Cash Flows . . . . . . . . . . . . . . . . . . . . .F-5
Notes to Financial Statements . . . . . . . . . . . . . . . . . .F-6
(b) PRO FORMA FINANCIAL INFORMATION. The pro forma
financial information required by Article 11 of Regulation S-X is not yet
available, and will be filed by amendment on or before September 27, 1999.
3
<PAGE>
(c) EXHIBITS.
Exhibit 10 Share Exchange Agreement between Rocky Mountain Power
Company and MPEG Super Site, Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this Report to be signed on its behalf
by the undersigned, hereunto duly authorized.
MPEG SUPER SITE, INC.
Dated: September 21, 1999 By:/s/ Bruce M. Tomiyami
Bruce M. Tomiyami, Secretary
4
<PAGE>
INDEPENDENT AUDITOR'S REPORT
Board of Directors
MPEG Super Site, Inc.
Las Vegas, Nevada
I have audited the accompanying balance sheet of MPEG Super
Site, Inc. (a development stage company), as of June 30, 1999; and
the related statements of operations, stockholders' equity and cash flows
for period from June 18, 1999 (date of inception) to June 30, 1999.
These financial statements are the responsibility of the Company's
management. My responsibility is to express an opinion on these financial
statements based on my audit.
I conducted my audit in accordance with generally accepted
auditing standards. Those standards require that I plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. I believe that my audit provides a
reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of MPEG Super Site, Inc. (a
development stage company) at June 30, 1999 and the results of its
operations and its cash flows for the period from June 18, 1999 (date of
inception) to June 30, 1999 in conformity with generally accepted accounting
principles.
by:/s/Kurt D. Saliger
Kurt D. Saliger C.P.A.
July 09, 1999
F-1
<PAGE>
MPEG SUPER SITE, INC.
A Development Stage Company
BALANCE SHEET
June 30, 1999
ASSETS
CURRENT ASSETS
Cash $414,000
Accounts Receivable 7,000
--------
TOTAL CURRENT ASSETS $421,000
TOTAL ASSETS $421,000
========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $414,000
--------
TOTAL CURRENT LIABILITIES $414,000
========
LONG-TERM DEBT 0
STOCKHOLDERS' EQUITY
Common Stock, $.001 par value
authorized 50,000,000 shares,
issued and outstanding at June 30, 1999
7,000,000 shares 7,000
Additional Paid In Capital 0
Deficit Accumulated During Development Stage 0
--------
TOTAL STOCKHOLDERS' EQUITY 7,000
--------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $421,000
========
See accompanying notes to financial statements.
F-2
<PAGE>
MPEG SUPER SITE, INC.
A development Stage Company
STATEMENT OF OPERATIONS
June 18, 1999 (Inception) to June 30, 1999
REVENUE 0
--------
TOTAL REVENUE 0
EXPENSES
General and Administrative 0
---------
TOTAL EXPENSES 0
INCOME (LOSS) FROM OPERATIONS 0
Interest Income 0
INCOME (LOSS) BEFORE INCOME TAXES 0
Provision for Income Taxes 0
---------
NET INCOME (LOSS) $ 0
=========
NET INCOME (LOSS)
PER SHARE - BASIC AND DILUTED $ 0.0000
=========
AVERAGE NUMBER OF SHARES OF
COMMON STOCK OUTSTANDING 7,000,000
=========
See accompanying notes to financial statements.
F-3
<PAGE>
MPEG SUPER SITE, INC.
A Development Stage Company
STATEMENT OF STOCKHOLDERS' EQUITY
June 30, 1999
Common Stock (Deficit)
------------ Accumulated
Number Additional During
of Paid In Development
Shares Amount Capital Stage
------ ------ ---------- -----------
Issued for Cash
June 18, 1999 7,000,000 $7,000 $0
Net Income June 18,
1999 (Inception) to
June 30, 1999 $0
--------- ------ ---------- -----------
Balance June 30, 1999 7,000,000 $7,000 $0 $0
========= ====== ========== ===========
See accompanying notes to financial statements.
F-4
<PAGE>
MPEG SUPER SITE, INC.
A Development Stage Company
STATEMENT OF CASH FLOWS
June 18, 1999 (Inception) to June 30, 1999
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 0
Increase in accounts receivable (7,000)
Increase in accounts payable 414,000
--------
Net Cash (Used) In Operating Activities $407,000
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of organizational cost 0
--------
$407,000
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock for cash 7,000
--------
Net increase in cash $414,000
Cash, June 18, 1999 0
--------
Cash, June 30, 1999 $414,000
========
See accompanying notes to financial statements.
F-5
<PAGE>
MPEG SUPER SITE, INC.
A Development Stage Company
NOTES TO FINANCIAL STATEMENTS
June 18, 1999 (inception) to June 30, 1999
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company was incorporated June 18, 1999 under the laws of the
State of Nevada. The Company was organized to engage in any lawful
activity. The Company currently has no operations and, in accordance
with SFAS V, is considered a development stage company.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Method
The Company records income and expenses on the accrual
method.
Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those
estimates.
Organizational Costs
Organizational costs are stated at cost. Amortization is recorded using
the straight-line method over a sixty (60) month period.
Income Taxes
Income taxes are provided for using the liability method of
accounting in accordance with Statement of Financial Accounting
Standards No. 109 (SFAS #109) "Accounting for Income Taxes." A deferred
tax asset or liability is recorded for all temporary differences between
financial and tax reporting.
Deferred tax expense (benefit) results from the net change during
the year of deferred tax assets and liabilities.
F-6
<PAGE>
MPEG SUPER SITE, INC.
A Development Stage Company
NOTES TO FINANCIAL STATEMENTS
June 18, 1999 (inception) to June 30, 1999
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CON'T)
Loss Per Share
Net loss per share is provided in accordance with Statement
of Financial Accounting Standards No. 128 (SFAS #128) "Earnings Per Share."
Basic loss per share is computed by dividing losses available to common
stockholders by the weighted average number of common shares outstanding
during the period. Diluted loss per share reflects per share amounts that
would have resulted if dilutive common stock equivalents had been converted
to common stock. As of June 30, 1999, the Company had no dilutive common
stock equivalents such as stock options.
NOTE 3 - INCOME TAXES
There is no provision for income taxes for the period from
June 18, 1999 (inception) to June 30, 1999 due to zero net income
and no Nevada state income tax in the state of the Company's domicile.
NOTE 4 - STOCKHOLDERS' EQUITY
Common Stock
The authorized common stock of the Company consists of
50,000,000 shares with a par value of $0.001 per share with 7,000,000
shares issued and outstanding as of June 30, 1999.
Preferred Stock
The authorized preferred stock of the Company consists of
10,000,000 shares with a par value of $0.001 per share.
NOTE 5 - JOINT VENTURE AGREEMENT
The Company has entered into a joint venture agreement with
Bainbridge Investments, Ltd. whereas Bainbridge agrees to fund the purchase
of a 12G fully reporting publicly traded vehicle. The Company is to receive
$314,000 from Bainbridge for the purchase of a publicly traded vehicle as
well as an additional $100,000 for operating capital. Bainbridge will recieve
2,500,000 shares of common stock in exchange for the initial $414,000.
Bainbridge Investments, Ltd. has also agreed to additonal
funding of five million dollars ($5,000,000) over the next fourteen months in
exchange for 500,000 shares of common stock.
F-7
<PAGE>
SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT is made this 24th day of
September, 1999, by and between Rocky Mountain Power Company, a
Colorado corporation (hereinafter referred to as "Rocky"), MPEG
Super Site, Inc., a Colorado corporation (hereinafter referred to
as "MPEG").
WHEREAS, Rocky desires to acquire all of the issued and
outstanding shares of common stock of MPEG in exchange for an
aggregate of 13,390,000 authorized but un-issued restricted
shares of the common stock, no par value, of Rocky (the "Common
Stock") (the "Exchange Offer"); and
WHEREAS, MPEG desires to assist Rocky in a business
combination which will result in the shareholders of MPEG owning
approximately 92% of the then issued and outstanding shares of
Rocky's Common Stock, and Rocky holding 100% of the issued and
outstanding shares of MPEG's common stock; and
WHEREAS, the share exchange contemplated hereby will result
in the MPEG shareholders tendering all of the outstanding common
stock of MPEG to Rocky in exchange solely for the Common Stock
and no other consideration, which the parties hereto intend to
treat as a reorganization under I.R.C. Section 368(a)(1)(B).
NOW, THEREFORE, in consideration of the mutual promises,
covenants, and representations contained herein,
THE PARTIES HERETO AGREE AS FOLLOWS:
ARTICLE 1
EXCHANGE OF SECURITIES
1.1 Issuance of Shares. Subject to all of the terms and
conditions of this Agreement, Rocky agrees to offer one share of
Common Stock for each share of MPEG common stock issued and
outstanding, or a total of 13,390,000 shares of Rocky's Common
Stock. The Common Stock will be issued directly to the
shareholders of MPEG on the Closing, in the amounts set forth on
the attached Shareholder list, which is attached hereto and
incorporated herein by reference.
1.2 Exemption from Registration. The parties hereto intend
that the Common Stock to be issued by Rocky to MPEG shareholders
shall be exempt from the registration requirements of the
Securities Act of 1933, as amended (the "Act"), pursuant to
Section 4(2) of the Act and the rules and regulations promulgated
thereunder.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF MPEG
Except as disclosed in Schedule 2 which is attached hereto
and incorporated herein by reference, MPEG hereby represents and
warrants to Rocky that:
2.1 Organization. MPEG is a corporation duly organized,
validly existing, and in good standing under the laws of
Colorado, has all necessary corporate powers to own its
properties and to carry on its business as now owned and operated
by it, and is duly qualified to do business and is in good
standing in each of the jurisdictions where its business requires
qualification.
2.2 Capital. The authorized capital stock of MPEG consists
of 50,000,000 shares of Common Stock, of which 13,390,000 are
currently issued and outstanding. All of the issued and
outstanding shares of MPEG are duly authorized, validly issued,
fully paid, and non-assessable. There are no outstanding
subscriptions, options, rights, warrants, debentures,
instruments, convertible securities, or other agreements or
commitments obligating MPEG to issue or to transfer from treasury
any additional shares of its capital stock of any class.
2.3 Subsidiaries. MPEG does not have any subsidiaries or
own any interest in any other enterprise (whether or not such
enterprise is a corporation) except for the Nevada subsidiary
named MPEG Super Site, Inc..
2.4 Directors and Officers. Schedule 2 contains the names
and titles of all directors and officers of MPEG as of the date
of this Agreement.
2.5 Financial Statements. MPEG has delivered to Rocky the
audited balance sheet its wholly owned subsidiary as of June 30,
1999, and operating statement covering the period from inception
through June 30, 1999 (the "Financial Statements"). The
Financial Statements are complete and correct in all material
respects and have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis
throughout the periods indicated. The Financial Statements
accurately set out and describe the financial condition of MPEG's
subsidiary as of June 30, 1999.
2.6 Absence of Changes. Since June 30, 1999, except for
changes in the ordinary course of business which have not in the
aggregate been materially adverse, to the best of MPEG's
knowledge, MPEG has conducted its business only in the ordinary
course and has not experienced or suffered any material adverse
change in the condition (financial or otherwise), results of
operations, properties, business or prospects of MPEG or waived
or surrendered any claim or right of material value.
2.7 Absence of Undisclosed Liabilities. Neither MPEG nor
any of its properties or assets are subject to any material
liabilities or obligations of any nature, whether absolute,
accrued, contingent or otherwise and whether due or to become
due, that are not reflected in the financial statements presented
to Rocky or have otherwise been disclosed to Rocky.
2.8 Tax Returns. Within the times and in the manner
prescribed by law, MPEG has filed all federal, state and local
tax returns required by law, or has filed extensions which have
not yet expired, and has paid all taxes, assessments and
penalties due and payable.
2.9 Investigation of Financial Condition. Without in any
manner reducing or otherwise mitigating the representations
contained herein, Rocky and/or its attorneys shall have the
opportunity to meet with accountants and attorneys to discuss the
financial condition of MPEG. MPEG shall make available to Rocky
and/or its attorneys all books and records of MPEG.
2.10 Trade Names and Rights. MPEG does not use any
trademark, service mark, trade name, or copyright in its
business, or own any trademarks, trademark registrations or
applications, trade names, service marks, copyrights, copyright
registrations or applications.
2.11 Compliance with Laws. MPEG has complied with, and is
not in violation of, applicable federal, state or local statutes,
laws and regulations (including, without limitation, any
applicable building, zoning or other law, ordinance or
regulation) affecting its properties or the operation of its
business, except for matters which would not have a material
affect on MPEG or its properties.
2.12 Litigation. MPEG is not a party to any suit, action,
arbitration or legal, administrative or other proceeding, or
governmental investigation pending or, to the best knowledge of
MPEG, threatened against or affecting MPEG or its business,
assets or financial condition, except for matters which would not
have a material affect on MPEG or its properties. MPEG is not in
default with respect to any order, writ, injunction or decree of
any federal, state, local or foreign court, department, agency or
instrumentality applicable to it. MPEG is not engaged in any
lawsuit to recover any material amount of monies due to it.
2.13 Authority. MPEG has full corporate power and authority
to enter into this Agreement. The board of directors of MPEG has
taken all action required to authorize the execution and delivery
of this Agreement by or on behalf of MPEG and the performance of
the obligations of MPEG under this Agreement. No other corporate
proceedings on the part of MPEG are necessary to authorize the
execution and delivery of this Agreement by MPEG in the
performance of its obligations under this Agreement. This
Agreement is, when executed and delivered by MPEG, and will be a
valid and binding agreement of MPEG, enforceable against MPEG in
accordance with its terms, except as such enforceability may be
limited by general principles of equity, bankruptcy, insolvency,
moratorium and similar laws relating to creditors' rights
generally.
2.14 Ability to Carry Out Obligations. Neither the
execution and delivery of this Agreement, the performance by MPEG
of its obligations under this Agreement, nor the consummation of
the transactions contemplated under this Agreement will to the
best of MPEG's knowledge: (a) materially violate any provision
of MPEG's articles of incorporation or bylaws; (b) with or
without the giving of notice or the passage of time, or both,
violate, or be in conflict with, or constitute a material default
under, or cause or permit the termination or the acceleration of
the maturity of, any debt, contract, agreement or obligation of
MPEG, or require the payment of any prepayment or other
penalties; (c) require notice to, or the consent of, any party to
any agreement or commitment, lease or license, to which MPEG is
bound; (d) result in the creation or imposition of any security
interest, lien, or other encumbrance upon any material property
or assets of MPEG; or (e) violate any statute or law or any
judgment, decree, order, regulation or rule of any court or
governmental authority to which MPEG is bound or subject.
2.15 Full Disclosure. None of the representations and
warranties made by MPEG herein, or in any schedule, exhibit or
certificate furnished or to be furnished in connection with this
Agreement by MPEG, or on its behalf, contains or will contain any
untrue statement of material fact.
2.16 Assets. MPEG has good and marketable title to all of
its tangible properties and such tangible properties are not
subject to any material liens or encumbrances.
2.17 Material Contracts and Obligations. Attached hereto on
Schedule 2 is a list of all agreements, contracts, indebtedness,
liabilities and other obligations to which MPEG is a party or by
which it is bound that are material to the conduct and operations
of its business and properties, which provide for payments to or
by the Company in excess of $10,000; or which involve
transactions or proposed transactions between the Company and its
officers and directors. Copies of such agreements and contracts
and documentation evidencing such liabilities and other
obligations have been made available for inspection by Rocky and
its counsel. All of such agreements and contracts are valid,
binding and in full force and effect in all material respects,
assuming due execution by the other parties to such agreements
and contracts.
2.18 Consents and Approvals. No consent, approval or
authorization of, or declaration, filing or registration with,
any governmental or regulatory authority is required to be made
or obtained by MPEG in connection with: (a) the execution and
delivery by MPEG of this Agreement; (b) the performance by MPEG
of its obligations under this Agreement; or (c) the consummation
by MPEG of the transactions contemplated under this Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF ROCKY
Except as disclosed in Schedule 3 which is attached hereto
and incorporated herein by reference, Rocky represents and
warrants to MPEG that:
3.1 Organization. Rocky is a corporation duly organized,
valid existing, and in good standing under the laws of Colorado,
has all necessary corporate powers to own properties and to carry
on business, and it is not now conducting any business, except to
the extent to which the effecting of the transaction contemplated
by this Agreement constitutes doing business.
3.2 Capitalization. The authorized capital stock of Rocky
consists of 100,000,000 shares of no par value Common Stock of
which 611,270 shares of Common Stock are currently issued and
outstanding. All of the issued and outstanding shares of Common
Stock are duly authorized, validly issued, fully paid and non-
assessable. There are no outstanding subscriptions, options,
rights, warrants, convertible securities, or other agreements or
commitments obligating Rocky to issue or to transfer from
treasury any additional shares of its capital stock of any class.
Prior to the Closing, the board of directors of Rocky will
approve a 2.0 for 1 forward split which will increase the number
of shares issued and outstanding to 1,222,540.
3.3 Subsidiaries. Rocky does not presently have any
subsidiaries or own any interest in any other enterprise (whether
or not such enterprise is a corporation) except for Prime Rate
Income & Dividend Enterprises, Inc. ("Pride").
3.4 Directors and Officers. Schedule 3 contains the names
and titles of all directors and officers of Rock as of the date
of this Agreement.
3.5 Financial Statements. Rocky has delivered to MPEG its
audited balance sheet and statements of operations and cash flows
as of and for the period ended June 30, 1998, and its unaudited
balance sheet and statements of operations for the nine months
ended March 31, 1999 (the "Financial Statements"). The
Financial Statements are complete and correct in all material
respects and have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis
throughout the periods indicated. The Financial Statements
accurately set out and describe the financial condition and
operating results of the Company as of the dates, and for the
periods, indicated therein. The current liabilities of Rocky are
set forth on Schedule 2. As of the Closing, the total
liabilities of Rocky shall be zero
3.6 Absence of Changes. Since March 31, 1999, except for
changes in the ordinary course of business which have not in the
aggregate been materially adverse, to the best of Rocky's
knowledge, Rocky has not experienced or suffered any material
adverse change in its condition (financial or otherwise), results
of operations, properties, business or prospects or waived or
surrendered any claim or right of material value.
3.7 Absence of Undisclosed Liabilities. To the best of
Rocky's knowledge, neither Rocky nor any of its properties or
assets are subject to any liabilities or obligations of any
nature, whether absolute, accrued, contingent or otherwise and
whether due or to become due, that are not reflected in the
financial statements presented to MPEG.
3.8 Tax Returns. Within the times and in the manner
prescribed by law, Rocky has filed all federal, state and local
tax returns required by law and has paid all taxes, assessments
and penalties due and payable.
3.9 Investigation of Financial Condition. Without in any
manner reducing or otherwise mitigating the representations
contained herein, MPEG shall have the opportunity to meet with
Rocky's accountants and attorneys to discuss the financial
condition of Rocky. Rocky shall make available to MPEG all books
and records of Rocky.
3.10 Trade Names and Rights. Rocky does not use any
trademark, service mark, trade name, or copyright in its
business, or own any trademarks, trademark registrations or
applications, trade names, service marks, copyrights, copyright
registrations or applications.
3.11 Compliance with Laws. To the best of Rocky's
knowledge, Rocky has complied with, and is not in violation of,
applicable federal, state or local statutes, laws and regulations
(including, without limitation, any applicable building, zoning,
or other law, ordinance, or regulation) affecting its properties
or the operation of its business.
3.12 Litigation. Rocky is not a party to any suit, action,
arbitration, or legal, administrative, or other proceeding, or
governmental investigation pending or, to the best knowledge of
Rocky, threatened against or affecting Rocky or its business,
assets, or financial condition. Rocky is not in default with
respect to any order, writ, injunction, or decree of any federal,
state, local, or foreign court, department agency, or
instrumentality. Rocky is not engaged in any legal action to
recover moneys due to it.
3.13 No Prior or Pending Investigation. Rocky is not aware
of any prior or pending investigations or legal proceedings by
the SEC, any state securities regulatory agency, or any other
governmental agency regarding Rocky.
3.14 Authority. Rocky has full corporate power and
authority to enter into this Agreement and to consummate the
transactions contemplated by this Agreement. The Board of
Directors of Rocky has taken all action required to authorize the
execution and delivery of this Agreement by or on behalf of
Rocky, the performance of the obligations of Rocky under this
Agreement and the consummation by Rocky of the transactions
contemplated under this Agreement. No other corporate
proceedings on the part of Rocky Are necessary to authorize the
execution and delivery of this Agreement by Rocky in the
performance of its obligations under this Agreement. This
Agreement is, and when executed and delivered by Rocky, will be a
valid and binding agreement of Rocky, enforceable against Rocky
in accordance with its terms, except as such enforceability may
be limited by general principles of equity, bankruptcy,
insolvency, moratorium and similar laws relating to creditors
rights generally.
3.15 Ability to Carry Out Obligations. Neither the
execution and delivery of this Agreement, the performance by
Rocky of its obligations under this Agreement, nor the
consummation of the transactions contemplated under this
Agreement will, to the best of Rocky's knowledge: (a) violate
any provision of Rocky's articles of incorporation or bylaws; (b)
with or without the giving of notice or the passage of time, or
both, violate, or be in conflict with, or constitute a default
under, or cause or permit the termination or the acceleration of
the maturity of, any debt, contract, agreement or obligation of
Rocky, or require the payment of any prepayment or other
penalties; (c) require notice to, or the consent of, any party to
any agreement or commitment, lease or license, to which Rocky is
bound; (d) result in the creation or imposition of any security
interest, lien or other encumbrance upon any property or assets
of Rocky; or (e) violate any statute or law or any judgment,
decree, order, regulation or rule of any court or governmental
authority to which Rocky is bound or subject.
3.16 Validity of Rocky Shares. The shares of Rocky Common
Stock to be delivered pursuant to this Agreement, when issued in
accordance with the provisions of this Agreement, will be duly
authorized, validly issued, fully paid and non-assessable.
3.17 Full Disclosure. None of the representations and
warranties made by Rocky herein, or in any exhibit, certificate
or memorandum furnished or to be furnished by Rocky, or on its
behalf, contains or will contain any untrue statement of material
fact, or omit any material fact the omission of which would be
misleading.
3.18 Assets. Rocky will not have any assets at the time of
closing except for assets in PRIDE which are being spun off.
3.19 Material Contracts and Obligations. Rocky has no
material contracts to which it is a party or by which it is
bound.
3.20 Consents and Approvals. No consent, approval or
authorization of, or declaration, filing or registration with,
any governmental or regulatory authority is required to be made
or obtained by Rocky in connection with: (a) the execution and
delivery by Rocky of its obligations under this Agreement; (b)
the performance by Rocky of its obligations under this Agreement;
or (c) the consummation by Rocky of the transactions contemplated
by this Agreement.
3.21 Real Property. Rocky does not own, use or claim any
interest in any real property, including without limitation any
license, leasehold or any similar interest in real property or
will mot at the time of closing except as set forth in Rocky's
SEC filings.
ARTICLE 4
COVENANTS
4.1 Investigative Rights. From the date of this Agreement
until the Closing Date, each party shall provide to the other
party, and such other party's counsels, accountants, auditors,
and other authorized representatives, full access during normal
business hours and upon reasonable advance written notice to all
of each party's properties, books, contracts, commitments, and
records for the purpose of examining the same. Each party shall
furnish the other party with all information concerning each
party's affairs as the other party may reasonably request. If
the transaction contemplated hereby is not completed, all
documents received by each party and/or its attorneys and
accountants, auditors or other authorized representatives shall
be returned to the other party who provided same upon request.
The parties hereto, their directors, employees, agents and
representatives shall not disclose any of the information
described above unless such information is already disclosed to
the public, without the prior written consent of the party to
which the confidential information pertains. Each party shall
take such steps as are necessary to prevent disclosure of such
information to unauthorized third parties.
4.2 Conduct of Business. Prior to the Closing, Rocky and
MPEG shall each conduct its business in the normal course, and
shall not sell, pledge, or assign any assets, without the prior
written approval of the other party, except in the regular course
of business except for transactions by PRIDE. Neither Rocky nor
MPEG shall amend its Articles of Incorporation or Bylaws, declare
dividends, redeem or sell stock or other securities, incur
additional or newly-funded liabilities, acquire or dispose of
fixed assets, change employment terms, enter into any material or
long-term contract, guarantee obligations of any third party,
settle or discharge any balance sheet receivable for less than
its stated amount, pay more on any liability than its stated
amount, or enter into any other transaction other than in the
regular course of business except as otherwise contemplated
herein.
ARTICLE 5
CONDITIONS PRECEDENT TO ROCKY'S PERFORMANCE
5.1 Conditions. The obligations of Rocky hereunder shall
be subject to the satisfaction, at or before the Closing, of all
the conditions set forth in this Article 6. Rocky may waive any
or all of these conditions in whole or in part without prior
notice; provided, however, that no such waiver of a condition
shall constitute a waiver by Rocky of any other condition of or
any of Rocky's other rights or remedies, at law or in equity, if
MPEG shall be in default of any of their representations,
warranties, or covenants under this Agreement.
5.2 Accuracy of Representations. Except as otherwise
permitted by this Agreement, all representations and warranties
by MPEG in this Agreement or in any written statement that shall
be delivered to Rocky by MPEG under this Agreement shall be true
and accurate on and as of the Closing Date as though made at that
time.
5.3 Performance. MPEG shall have performed, satisfied, and
complied with all covenants, agreements, and conditions required
by this Agreement to be performed or complied with by it, on or
before the Closing Date.
5.4 Absence of Litigation. No action, suit, or proceeding
before any court or any governmental body or authority,
pertaining to the transaction contemplated by this Agreement or
to its consummation, shall have been instituted or threatened
against MPEG on or before the Closing Date.
ARTICLE 6
CONDITIONS PRECEDENT TO MPEG'S PERFORMANCE
6.1 Conditions. MPEG's obligations hereunder shall be
subject to the satisfaction, at or before the Closing, of all the
conditions set forth in this Article 7. MPEG may waive any or
all of these conditions in whole or in part without prior notice;
provided, however, that no such waiver of a condition shall
constitute a waiver by MPEG of any other condition of or any of
MPEG's rights or remedies, at law or in equity, if Rocky shall be
in default of any of its representations, warranties, or
covenants under this Agreement.
6.2 Accuracy of Representations. Except as otherwise
permitted by this Agreement, all representations and warranties
by Rocky in this Agreement or in any written statement that shall
be delivered to MPEG by Rocky under this Agreement shall be true
and accurate on and as of the Closing Date as though made at that
time.
6.3 Performance. Rocky shall have performed, satisfied,
and complied with all covenants, agreements, and conditions
required by this Agreement to be performed or complied with by
them, on or before the Closing Date.
6.4 Absence of Litigation. No action, suit or proceeding
before any court or any governmental body or authority,
pertaining to the transaction contemplated by this Agreement or
to its consummation, shall have been instituted or threatened
against Rocky on or before the Closing Date.
6.5 Directors of Rocky. Effective on the Closing, Rocky
shall have fixed the size of its Board of Directors at three (3)
persons, and such Board of Directors shall include Kanematsu
Misawa, Joseph S. Muto, and Randall J. Lanham.
6.6 Officers of Rocky. Effective on the Closing, Rocky
shall have elected the following new Officers of Rocky:
Kunimitsu Misawa: Chairman
Bruce M. Tomiyama: CFO, President and Secretary
6.7 Forward Split. Just prior to Closing, Rocky shall
complete a 2.0 for 1 forward stock split.
ARTICLE 7
CLOSING
7.1 Closing. The Closing of this transaction shall be held
at the offices of Krys Boyle Freedman & Sawyer, P.C., 600
Seventeenth Street, Suite 2700 South Tower, Denver, Colorado
80202, or such other place as shall be mutually agreed upon, on
such date as shall be mutually agreed upon by the parties. At the
Closing:
(a) Shareholders shall deliver letters of acceptance and
duly endorsed certificates representing their shares of MPEG
being exchanged for shares of Rocky.
(b) Shareholders shall receive a certificate or
certificates representing the number of shares of Rocky Common
Stock for which the shares of MPEG common stock shall have been
exchanged.
(c) Rocky shall deliver a signed Consent and/or Minutes of
the Directors of Rocky approving this Agreement and each matter
to be approved by the Directors of Rocky under this Agreement.
(d) MPEG shall deliver a signed Consent or Minutes of the
Directors of MPEG approving this Agreement and each matter to be
approved by the Directors of MPEG under this Agreement.
ARTICLE 8
SPIN OFF OF PRIDE
8.1 The parties agreed that prior to the Closing, Rocky
shall spin off all of the issued and outstanding shares of
Rocky's wholly-owned subsidiary named Prime Rate Income &
Dividend Enterprises, Inc. ("PRIDE") to its shareholders based on
a shareholder list prepared one (1) day prior to Closing.
Certificates representing the shares to be spun off will be
placed with an escrow agent mutually acceptable to Rocky and MPEG
with instructions to distribute the shares once PRIDE has a Form
10-SB which is effective with the Securities and Exchange
Commission.
8.2 In the event that a Form 10-SB has not become effective
with the Securities and Exchange Commission within twelve (12)
months after the Closing, PRIDE will use its best effects to
liquidate all of its assets and liabilities and then distribute
all proceeds pro rata to the shareholders on the shareholder list
being held in escrow.
8.3 The current directors of PRIDE will remain as the
directors of PRIDE until the spin off of either the PRIDE stock
or the proceeds of liquidation is completed.
8.4 PRIDE will be responsible for all of its expenses of
operation including the costs of the Form 10-SB until the spin
off is complete.
ARTICLE 9
MISCELLANEOUS
9.1 Captions and Headings. The Article and paragraph
headings throughout this Agreement are for convenience and
reference only, and shall in no way be deemed to define, limit,
or add to the meaning of any provision of this Agreement.
9.2 No Oral Change. This Agreement and any provision
hereof, may not be waived, changed, modified, or discharged
orally, but it can be changed by an agreement in writing signed
by the party against whom enforcement of any waiver, change,
modification, or discharge is sought.
9.3 Non-Waiver. Except as otherwise expressly provided
herein, no waiver of any covenant, condition, or provision of
this Agreement shall be deemed to have been made unless expressly
in writing and signed by the party against whom such waiver is
charged; and (i) the failure of any party to insist in any one or
more cases upon the performance of any of the provisions,
covenants, or conditions of this Agreement or to exercise any
option herein contained shall not be construed as a waiver or
relinquishment for the future of any such provisions, covenants,
or conditions, (ii) the acceptance of performance of anything
required by this Agreement to be performed with knowledge of the
breach or failure of a covenant, condition, or provision hereof
shall not be deemed a waiver of such breach or failure, and (iii)
no waiver by any party of one breach by another party shall be
construed as a waiver with respect to any other or subsequent
breach.
9.4 Time of Essence. Time is of the essence of this
Agreement and of each and every provision hereof.
9.5 Entire Agreement. This Agreement contains the entire
Agreement and understanding between the parties hereto, and
supersedes all prior agreements and understandings.
9.6 Choice of Law. This Agreement and its application
shall be governed by the laws of the State of Colorado, except to
the extent its conflict of laws provisions would apply the laws
of another jurisdiction.
9.7 Notices. All notices, requests, demands, and other
communications under this Agreement shall be in writing and shall
be deemed to have been duly given on the date of service if
served personally on the party to whom notice is to be given, or
on the third day after mailing if mailed to the party to whom
notice is to be given, by first class mail, registered or
certified, postage prepaid, and properly addressed as follows:
Rocky:
Rocky Mountain Power Company
____________________________
____________________________
with a copy to:
Tom Boyle, Esq.
Krys Boyle Freedman & Sawyer, P.C.
600 Seventeenth Street, Suite 2700 South Tower
Denver, Colorado 80202
MPEG:
MPEG Super Site, Inc.
1358 5th Street
Santa Monica, California 90401
with a copy to:
Randall J. Lanham, Esq.
Lanham & Associates
45 Glen Echo
Dove Canyon, California 92679
9.8 Binding Effect. This Agreement shall inure to and be
binding upon the heirs, executors, personal representatives,
successors and assigns of each of the parties to this Agreement.
9.9 Mutual Cooperation. The parties hereto shall cooperate
with each other to achieve the purpose of this Agreement, and
shall execute such other and further documents and take such
other and further actions as may be necessary or convenient to
effect the transaction described herein.
9.10 Brokers. The parties hereto represent and agree that
no broker has brought about the aforementioned transaction and no
finder's fee has been paid or is payable by any party. Each of
the parties hereto shall indemnify and hold the other harmless
against any and all claims, losses, liabilities or expenses which
may be asserted against it as a result of its dealings,
arrangements or agreements with any broker or person, except as
described in this paragraph.
9.11 Announcements. Rocky and MPEG will consult and
cooperate with each other as to the timing and content of any
announcements of the transactions contemplated hereby to the
general public or to employees, customers or suppliers.
9.12 Expenses. Rocky and MPEG will pay their own legal,
accounting and any other out-of-pocket expenses reasonably
incurred in connection with this transaction, whether or not the
transaction contemplated hereby is consummated.
9.13 Exhibits. As of the execution hereof, the parties
hereto have provided each other with the Exhibits provided for
herein above, including any items referenced therein or required
to be attached thereto. Any material changes to the Exhibits
shall be immediately disclosed to the other party.
9.14 After the closing, Rocky's name will be changed and the
rights to the name "Rocky Mountain Power Co." will belong to
Rocky's management.
AGREED TO AND ACCEPTED as of the date first above written.
ROCKY MOUNTAIN POWER COMPANY MPEG SUPER SITE, INC.
By:/s/Mick Schumacher By:/s/ Bruce M. Tomiyama
Mick Schumacher, President Bruce M. Tomiyama, CFO and
Secretary
