FORM 10-SB
GENERAL FORM FOR REGISTRATION OF
SECURITIES
OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
Rhino Enterprises Group, Inc.
(Name of Small Business Issuer in its charter)
Nevada 88-0333844
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification
number)
2925 LBJ Freeway, Suite 188, Dallas, Texas 75234
(Address of principal executive offices) (Zip Code)
Issuer's Telephone Number: (972) 241-2669
Securities to be registered under Section 12(b) of the Act:
Title of each class to be so registered: n/a
Name of exchange on which each class is to be registered: n/a
Securities to be registered under Section 12(g) of the Act:
Common Stock, par value $.001 per share
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TABLE OF CONTENTS
Page No.
Part I
Item 1. Description of Business 1
Item 2. Management's Discussion and Analysis 16
Item 3. Description of Property 20
Item 4. Security Ownership of Certain
Beneficial Owners and Management 20
Item 5. Directors, Executive Officers,
Promoters and Control Persons 23
Item 6. Executive Compensation 26
Item 7. Certain Relationships and Related
Transactions 29
Item 8. Description of Securities 31
Part II
Item 1. Market for Common Equity and Related
Stockholder Matters 32
Item 2. Legal Proceedings 33
Item 3. Changes In and Disagreements with
Accountants 33
Item 4. Recent Sales of Unregistered
Securities 34
Item 5. Indemnification of Directors and
Officers 37
Part F/S 37
Part III
Item 1. Index to Exhibits 28
Item 2. Description of Exhibits 28
Signatures 28
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PART I
ITEM 1. DESCRIPTION OF BUSINESS
General
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Rhino Enterprises Group, Inc. (the "Company" or "Rhino")
was originally incorporated in Nevada on March 3, 1995 as Unique
Fashions, Inc. ("Unique"), with the stated business plan of
producing, marketing and selling children's specialty garments.
Unique's common stock was approved for trading on the Over-the-
Counter Bulletin Board as "UNQF."
On March 25, 1999, the Company effected a tax-free spin-off
transaction of its former wholly-owned subsidiary, Unique Ideas,
Inc. (formerly Unique Products, Inc.), a Texas corporation. The
stock of Unique Ideas, Inc. was distributed on a pro-rata basis
to the stockholders of the Company on March 25, 1999.
On April 30, 1999, the Company effected a one-for-twenty (1
for 20) reverse stock split of its common stock, changed its name
to Rhino Enterprises Group, Inc. and changed its stock symbol to
"RHNO."
On May 13, 1999, the Board of Directors of Rhino approved a
stock-for-stock purchase agreement between Rhino and the
shareholders of Framing Systems, Inc., a Nevada corporation
("Framing"). From May 17, 1999 to December 2, 1999, the majority
of the Framing shareholders exchanged their shares of Framing
common stock into shares of the Company's common stock on a one
share of Rhino common stock for twenty-five shares of Framing
common stock basis, eventually making Framing a 68%-owned
subsidiary of the Company.
On November 12, 1999, Rhino acquired 50% of the outstanding
stock of R&R Food, Inc., a Texas corporation ("R&R"). R&R
currently operates one Great Outdoors restaurant location in
Arlington, Texas. R&R also has the exclusive franchise right to
open two additional Great Outdoors stores in the Dallas-Fort
Worth, Texas metroplex area.
On October 27, 1999, Rhino entered into a letter of intent
to acquire Executive Assistance, Inc., a Nevada corporation
("Executive Assistance"), which transaction closed on November
18, 1999. Executive Assistance is a firm engaged in the business
of providing administrative functions to small businesses. The
terms of the acquisition were based on a stock-for-stock
exchange, whereby the Executive Assistance shareholders exchanged
100% of the outstanding stock (4,000,000 shares) of Executive
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Assistance for 80,000 shares of the Company's common stock. This
transaction made Executive Assistance a wholly-owned subsidiary
of the Company.
On November 24, 1999, the Company subscribed to 100% of the
founder's stock in Eyesite.com, Inc., a Delaware corporation
("Eyesite" or "Eyesite.com") the Company incorporated in May of
1999, thus making Eyesite a wholly owned subsidiary of the
Company. Eyesite's corporate headquarters are located at 2925 LBJ
Freeway, Suite 188, Dallas, Texas. Subsequently, on December 29,
1999, Eyesite purchased all of the assets related to and
including the registered web site www.eyesite.com from Dr. Gary
Edwards. Eyesite is positioning itself to be a marketing and
buying cooperative to champion the independent eye care
professional and provide business-to-business and consumer
e-commerce, as well as to provide information regarding LASIK
vision correction.
On December 17, 1999 Rhino acquired 50% of the outstanding
stock of e-Data Alliance, Inc., a Texas corporation ("e-Data").
e-Data currently operates web hosting and off-site data storage.
It also provides Web site design and database services. The
servers operated by e-Data are located in premium
telecommunications facilities located in Dallas.
On December 17, 1999 Rhino sold its 50% ownership of R&R
to Sarwin Family, LLC, a Texas Limited Liability Company, at the
same price for which it was purchased (net cost of zero to the
Company).
Information regarding the Company's investments in fixed
maturity investments is included in Note C to the Company's
Consolidated Financial Statements. Additionally, the information
regarding the Company's indebtedness is included in Note E to the
Company's consolidated financial statements.
It is the Company's intention to grow by developing business
partnerships and making strategic acquisitions. As part of its
ongoing corporate strategy, the Company will continue to seek
acquisition opportunities which will complement its existing
operations. The largest subsidiary of Rhino is its wholly-owned
Eyesite.com, Inc., a Delaware corporation.
Operating decisions for the various subsidiaries are made by
the managers of the business entities. The Company's Board of
Directors makes investment decisions and all other capital
allocation decisions for the Company. Likewise, the respective
subsidiaries' Board of Directors who make those decisions for
their companies.
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The Company retained cash and investments at the holding
company level of $152,730.99 at December 31, 1999. Total
liabilities of Rhino at the same date were $3,935,485.73.
The Company will report, as of the end of its 1998 tax year,
aggregate consolidated net operating tax loss carry forwards
("NOLs") for Federal income tax purposes of approximately
$242,167. These losses will expire over the course of the next 15
years unless utilized prior thereto. See Note B of the Notes to
Consolidated Financial Statements.
Business of Issuer
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The Company is a holding company engaged in a number of
diverse business activities. The Company's focus is to develop
growth-oriented portfolio companies through a consolidation
process in carefully selected industries. The Company utilizes a
refined screening process to determine industries that are highly
fragmented and support an overall trend towards consolidation.
In each selected industry, the Company targets a company or
companies to be acquired that will become the growth platform for
their industry. The Company plans to pursue such a consolidation
strategy by acquiring companies with revenues of $5 million or
less and, through its management practices, endeavor to
facilitate growth to $20 to $25 million in profitable gross
revenue. The Company intends to use its current businesses as a
base to acquire profitable companies in each of the targeted
industries. The Company plans to then put into place management
controls, systems and resources to enable the combination of
these companies to realize substantially greater growth and
profitability than they are able to achieve under current
management.
The Company's principal source of revenue and the focus of
its business emphasis flows from business activities of its
subsidiaries. Of those, only Eyesite and e-Data have material
activity that requires identification and understanding.
Eyesite.com
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Eyesite intends to position itself to be the premier
Internet "portal of choice" for all information, products and
services related to vision correction and eye care. Eyesite plans
to pursue this objective by responding to the exploding business
opportunities immediately available through the Internet and
through the latest technological advances in the $25 billion
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optical market (according to a 1998 Dain Rauscher Wessels
research report) for eye care. By utilizing state-of-the-art
technology, Eyesite intends to deliver the highest quality
information, services and products in a cost effective and
efficient manner and is determined to draw on the vast resources
of the Internet to most effectively reach customers and eye care
professionals. Eyesite intends to enhance its existing web site,
www.eyesite.com, to enable easy storage and retrieval of eye care
information and provide innovative and reasonably priced products
and services to draw customers to its site. Eyesite aims to make
its web site the place where people go for information, products
and services in the vision correction and eye care field.
The Eyesite web site will be the driving force of the
enterprise, and its continuously expanding web presence will
serve as the conduit for spreading of its information, products
and services. Eyesite anticipates being the vital link that
instantly connects eye care information and opportunities with
consumers on a twenty-four hour basis, seven days a week.
Market for Products or Services
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A vast portion of the nation's population requires
eyeglasses or contact lenses to correct common refractive vision
disorders, and over 97 million Americans purchased eyewear in
1998, according to Jobson Optica Group's U.S. Optical Industry
Handbook 1999. These consumers, with a median age of
approximately 35 years old, spent a total of approximately $16
billion during 1998 on eyeglasses, contact lenses and other
corrective lenses. When professional services are included,
estimates for the total eye care market in North America were
approximately $36 billion. Consumers purchased retail optical
goods through three main retail channels: (1) independent
ophthalmologists, optometrists and opticians, which accounted for
63% of sales, (2) retail chains, which accounted for 35% of sales
and (3) health maintenance organizations, which accounted for 2%
of sales. These expenditures are made to treat the symptoms of
what has become a fixable disorder. Companies in the optical
industry are meeting rising demand with innovative new products.
The innovations include advanced spectacle lens materials, high
performance sun wear and eyeglass frames, contact lenses,
pharmaceuticals that improve the treatment of eye diseases and
refractive vision correction (RVC).
While the optical market is growing an estimated 5% per
annum, again according to Jobson Optica Group's U.S. Optical
Industry Handbook 1999, the market for RVC (any procedure
intended to correct the eyesight of nearsighted, farsighted, and
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astigmatic individuals) is booming, according to the Dain
Rauscher Wessels Report. Laser vision correction (LVC) has
established itself as the dominant procedure in this burgeoning
RVC market. According to the October 1998 report from the Equity
Capital Markets Group of Dain Rauscher Wessels, the LVC market is
projected to expand at an average annual pace of 40%-50%
(procedure volume) over the next several years, reaching an
estimated $1.4 billion consumer market in 2000 and providing a
revenue opportunity of $260 million. The "acceptability" of this
procedure is expanding dramatically as prominent and highly
recognizable personalities publicly talk about the tremendous
beneficial impact of having their vision corrected through an LVC
procedure.
This increased consumer demand for refractive vision
correction and expansion of services to meet that demand were
noted as the primary reason for laser center operators raising
millions of dollars in the past year to expand operations. Based
on information from the Market Scope Report, a report on the U.S.
Refractive Surgical Market and the Warburg Dillon Read report on
the eye care industry, Eyesite understands that this cash
infusion along with positive cash flows from profitable
operations will feed a significant expansion in the number of
laser centers and in corporate marketing efforts.
The Internet has become an important alternative to
traditional media, enabling millions of consumers to seek
information, communicate with one another and execute commercial
transactions electronically. The number of worldwide web users is
expected to grow considerably over the next several years. The
Internet is distinct from traditional media in that it offers 24
hours a day, 7 days a week, real-time access to dynamic and
interactive content and instantaneous communication among users.
These characteristics, combined with the fast growth of Internet
users and usage, have created a powerful, rapidly expanding
direct marketing and sales channel. Advertisers can target very
specific demographic groups, measure the effectiveness of
advertising campaigns and revise them in response to real-time
feedback. Similarly, the Internet offers on-line merchants the
ability to reach a vast audience and operate with lower costs and
greater economies of scale, while offering consumers greater
selections, lower prices and heightened convenience, compared to
conventional retailing. The management team of Eyesite believes
that all participants in the eye care industry will benefit from
the Internet because of its unique attributes as an open,
low-cost and flexible technology for the exchange of information
and execution of electronic transactions.
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Portals such as AOL, Excite, The Go Network, Lycos, MSN, and
Yahoo! have established themselves as leading pathways for a
broad variety of information. Users are augmenting these portals
with subject-specific vertical portals (example: drkoop.com for
the healthcare industry), which are becoming a growing segment of
the Internet. These vertical portals are using brand awareness
driven by high quality topical content and significant market
resources to establish them as destinations for highly
concentrated groups of users.
Health and medical information is one of the fastest growing
areas of interest on the Internet. According to Cyber Dialogue,
an industry research firm, during the 12-month period ended July
1998, approximately 17 million adults in the United States
searched on-line for health and medical information, including
eye care information. Cyber Dialogue estimates that approximately
70% of the persons searching for health and medical information
on-line believe the Internet empowers them by providing them with
information before and after they go to a doctor's office.
Eyesite believes that establishing clear brand identity as a
trusted source of on-line consumer eye care information and
services, should provide a significant opportunity to capitalize
on multiple revenue sources. These include direct-to-consumer
advertising of the value of the laser vision correction procedure
at an affordable price and e-commerce of all types of eyewear.
Products, Sales and Marketing
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Eyesite has three principal thrusts for providing products
and services, one or more of which may be pursued concurrently.
In the first phase, Eyesite intends to rapidly expand and enhance
its existing web site, www.eyesite.com, in the first quarter of
2000. The aim is to make this web site the premier Internet
gateway for vision care information and for value shopping by
consumers seeking eye care products and services through
e-commerce on the World Wide Web. This soon-to-be all-inclusive,
comprehensive web site will provide extensive and relevant
information and services such as:
o eye diseases, disorders, injuries and their treatment;
o vision correction options;
o real-time optical-related news;
o frequently asked questions and answers section (FAQs);
o interactive chat support;
o a referral system for eye care professionals;
o on-line, real-time appointment setting;
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o on-line ability for a patient to retrieve
prescriptions for eye glasses from his/her eye care
professional;
o opportunities to purchase quality eye care-related
products and services on-line and at a reasonable
cost;
o opportunities for the independent eye care
professional to realize an additional influx of
patients via our web site on the Internet as a result
of intense geographic cross-media marketing; and
o opportunities for the independent eye care
professional to take advantage of deeper discounts
through the collective buying of a large co-operative.
Second, Eyesite intends to recruit a select number of
independent eye care professionals in each metropolitan area that
it elects to enter to become Eyesite.com, Inc. licensees. While
enabling each eye care professional to retain his/her
independence, Eyesite intends to provide certain benefits, as
outlined in the Marketing section below. These select eye care
professionals will further facilitate the branding of the
"Eyesite.com" name. Further, they will become an eye care
professional of choice on the Eyesite.com web site.
Additionally, Eyesite intends to establish laser centers
that lead the market in providing affordable laser eye surgical
procedures, without compromising quality of care. These vision
correction laser procedures will be marketed with the intent to
expand the availability to a greater segment of the population
with an emphasis on "quality and value at an affordable price."
Initially, these centers will be providing the highly successful,
rapidly growing and increasingly accepted LASIK procedure. Since
these centers will offer only these laser refractive surgical
procedures, the surgeons will be some of the most experienced in
the field, thus continuing to enhance the objective of quality of
care. This exclusivity of service offered with below market
pricing may potentially allow each center to generate excellent
cash flow and profits for Eyesite. Additional patient options for
corrective eye procedures will be examined for potential
inclusion in the menu of future services to be provided.
The eye care professional can be viewed as a key gatekeeper
for refractive procedures. First Quarter 2000 will see Eyesite
launch its effort to license a growing number of independent
optometrist affiliates in each metropolitan area. These
Eyesite.com optometrists will be encouraged to refer a growing
number of candidates for these procedures to each laser center.
Eyesite's aggressive cross-media marketing of its Web Site will
cause the Internet to become a strong marketing tool for these
laser centers.
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Eyesite will launch the campaign to market and provide laser
vision correction in Dallas/Ft. Worth, Texas area. After
successfully establishing the laser vision market in the
Dallas/Ft. Worth area, the Company will expand its presence to
numerous other metropolitan areas throughout the United States.
Eyesite intends to employ a dynamic marketing and
advertising plan to increase awareness of the web site address as
well as the products and services it offers. It aims to utilize
traditional advertising to include print, television and radio;
banner swaps; listings with major Internet search engines;
strategic alliances with leaders in the vision care industry; the
use of the new electronic magazine format, e-zines; and referral
partnerships to create a synergistic blend of influential tools
to drive consumers to our web site.
Eyesite intends to pursue three target audiences: (1) the
consuming public; (2) the independent eye care professional; and
(3) vendors of vision related products. To the consumer, Eyesite
intends to provide the capability to:
o access information on any topic related to the eye and
its care;
o go on-line, ask an eye care question, and receive a
response from a qualified eye care professional;
o referrals for quality eye care refractive surgical
procedures at more affordable prices;
o search for an eye care professional in the consumer's
geographical area;
o set an appointment with an Eyesite.com affiliated eye
care professional, in real-time, on-line from anywhere
in the world;
o order discounted quality vision and eye care related
products and services 24 hours a day over the
Internet, such as: prescription glasses and frames,
contact lenses, sunglasses, eye exams, and eyeware
accessories, all of which would be picked up at the
nearest Eyesite.com independent eye care
professional's location of the consumer's choosing;
o participate in chat rooms regarding vision related
concerns; and
o access a bulletin board for job opportunities in the
eye care industry.
To the independent eye care professional, Eyesite intends to
provide:
o brand identity as an Eyesite.com professional;
o intense geographic cross-media marketing;
o doctor listings;
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o inexpensive web site hosting;
o e-mail;
o chat rooms;
o MIS assistance for improved profitability;
o patient referrals;
o appointment scheduling;
o product sales;
o better discounts on cost of goods sold;
o continuing education opportunities;
o access to the bulletin board to advertise employment
opportunities;
o opportunities for co-management revenues from Lasik
surgery; and
o retained independence.
To vendors, Eyesite intends to provide links to vendor web
sites and the opportunity to advertise vendor products and
services.
A relentless branding and marketing of the web site,
www.eyesite.com, will continually focus on increasing the number,
quality and value of visitors to the site. Eyesite intends to
take full advantage of the powerful trend that more than 60% of
the population of the United States requires eye glasses or
contact lenses and that during 1998 more than 100 million
consumers spent a total of some $16 billion on corrective vision
products. Eyesite plans to move quickly to reap the benefits of
the predicted expansion of the laser vision correction market at
an average annual pace of 40%-50% over the next several years.
Competition
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Optical retail is a competitive and fragmented industry.
Eyesite has a variety of competitors, including ophthalmologists
and optometrists in private practice, traditional optical retail
stores, including national optical chains such as Sunglass Hut,
Pearle Vision Center, Sterling Optical, LensCrafters and National
Vision Association and mass merchandisers such as Wal-Mart, Sam's
and Costco. In addition, Eyesite intends to compete with non-
traditional optical retailers, such as retailers, mail order
catalogs, direct marketers such as 1-800 Contacts, and with other
online web-based optical retailers such as Shades.com and
EyeCity.com. Eyesite management recognizes that there will be
many more online competitors in the future, as barriers to entry
are minimal, and new competitors can launch competing websites at
a relatively low cost.
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The Eyesite management team believes that the principal
competitive factors it will have in its online market are brand
recognition, product selection, convenience, price,
accessibility, customer service, quality of search tools, quality
of site content and reliability and speed of fulfillment.
In the laser vision correction niche of Eyesite's industry,
there is intense competition. Individual companies compete with
other entities, including hospitals, individual ophthalmologists,
other laser centers and certain manufacturers of excimer laser
equipment, in offering laser vision correction. Laser centers
compete on the basis of quality of service, reputation and price.
The Company competes in two principal markets: the market for
laser vision correction and the consumer market for vision
correction.
Within the consumer market for laser vision correction,
Eysesite faces competition from other service providers. As
market acceptance for laser vision correction continues to
increase, competition within this market will grow. The market
for laser vision correction is divided into three major segments:
corporate-owned centers, surgeon-owned centers, and institution-
owned centers. In the United States for the fourth quarter of
calendar 1998, the corporate-owned segment accounted for the
largest percentage of total procedure value with a 42% market
share according to The Market Scope, an industry source. The
surgeon-owned centers, which refer to ophthalmologists who have a
laser and perform laser vision correction procedures, accounted
for 39% of total procedures performed. The remaining 19% of laser
vision correction procedures were performed at institution-owned
centers, such as hospitals or universities.
Although competitors in certain regions charge less for
laser vision correction than Eyesite, the management team
believes that the primary factors affecting competition in the
laser vision correction market are quality of service,
reputation, brand recognition and price, and that competitiveness
is enhanced by a strong network of highly qualified doctors.
In the laser vision correction arena, Eyesite competes in
fragmented geographic markets. Eyesite's principal corporate
competitors include: TLC, The Laser Centers, Laser Vision
Centers, LCA-Vision, Clear Vision Laser Centers, Omega Health
Systems and Icon Laser Centers. In each specific geographic
market, Eyesite will also compete with local ophthalmologists and
institutions.
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Current Status of Eyesite.com
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Eyesite is launching in February 2000 its campaign in the
Dallas/Ft. Worth, Texas market to license independent eyecare
professionals and to commence performing the Lasik procedure.
Currently, Eyesite is in discussions with a number of independent
optometrists, with one having signed on. Eyesite has also entered
into an agreement with an opthalmologist to perform the Lasik
procedure, as well as having made contractual arrangements with a
laser center at which the procedures will be performed.
e-Data
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e-Data began operations in May, 1999. e-Data provides a wide
range of hosting and enhanced Internet services that enable its
customers to deploy and manage their web sites and network-based
applications more effectively than internally developed
solutions. Its hosting services store customers' web sites,
software applications, and data on servers typically housed in
their data center so that others on the Internet can access and
interact with its customers' web sites and network-based
applications. e-Data web hosting services provide a variety of
hosting solutions to meet the needs of businesses of all sizes,
as their web sites develop from low-end marketing brochures to
more complex, interactive web sites and finally to applications
integral to their businesses. e-Data's application hosting
services provide its customers remote access to mission-critical
software applications and data 24 hours a day, 7 days a week, 365
days a year.
Market for Products or Services
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The Internet is experiencing significant growth and is
emerging as a global medium for communications and commerce.
International Data Corporation, or IDC, estimates that the number
of Web users worldwide will increase from approximately 97.3
million at the end of 1998 to 319.8 million by the end of 2002, a
34.6% compounded annual growth rate. IDC also estimates that the
number of Web users in the United States will increase from
approximately 51.6 million at the end of 1998 to 135.9 million by
the end of 2002, a 27.4% compounded annual growth rate. During
this same period, the number of business web sites in the United
States is projected by Forrester Research, Inc. to increase from
approximately 650,000 in 1998 to approximately 2.6 million in
2002, a 41.1% compounded annual growth rate. This growth in the
number of web users and number of web sites is being driven by a
number of factors including:
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o the large and growing installed base of personal
computers;
o easier and less expensive alternatives for Internet
access;
o improvements in the speed, reliability and security of
the Internet;
o commerce-enabling technologies;
o higher quality and more diverse content;
o an increase in the number of networked applications;
and
o the proliferation of broadband technologies that
promise consumers faster, more convenient access to
the Internet.
The dramatic growth in usage combined with enhanced
functionality and accessibility have made the Internet an
increasingly attractive medium for businesses to:
o disseminate information;
o engage in e-commerce;
o build customer relationships;
o streamline and automate data-intensive processes; and
o communicate more efficiently with dispersed employees.
In the last several years, businesses have emerged with
operating models that are exclusively dependent on the Internet,
while traditional businesses of all sizes are working quickly to
establish a web presence. Many of these businesses establish
their initial online presence with a simple, static brochure for
marketing purposes. As they become more familiar with the
Internet as a communications platform, an increasing number of
businesses are implementing more complex, mission-critical
applications on the Web including sales, customer service,
customer acquisition and retention, employee communications and
e-commerce between suppliers and business partners.
According to Forrester Research, Inc., U.S. firms are now
spending approximately 25% of their overall IT budgets on
outsourcing services. These services include packaged application
software implementation and support, customer support and network
development and maintenance. Reasons for the growth in
outsourcing include:
o the desire of companies to focus on their core
businesses;
o the increased costs that businesses experience in
developing and maintaining their networks and software
applications;
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o the fast pace of technological change that shortens
time to obsolescence and increases capital
expenditures as companies attempt to capitalize on
leading-edge technologies;
o the challenges faced by companies in hiring,
motivating and retaining qualified application
engineers and IT employees;
o the desire of companies to reduce deployment time and
risk.
Many businesses, both small and large, lack the resources
and expertise to cost-effectively develop and continually enhance
their web sites with evolving technologies while maintaining a
network infrastructure that remains operational in the event of a
hardware or software failure as well as supports increased
bandwidth capability as their business grows. Small- to medium-
sized businesses typically lack the IT resources, capital and
scale to design their own web sites and install, maintain and
monitor their own web servers and Internet connectivity. Large
businesses typically require state-of-the-art facilities and
networks that are monitored and managed on a 24x7 basis by
experts in Internet technology and that can be upgraded and
scaled to meet the needs of mission-critical Internet
applications that may be integral to their businesses. As a
result, e-Data believes enterprises of all sizes are seeking
outsourcing arrangements to help:
o build effective web sites;
o improve their site's reliability and performance;
o provide continuous monitoring of their Internet
operations; and
o reduce costs.
Businesses increasingly face competitive demands to automate
business processes. This problem has been exacerbated by a
shortage of IT professionals. Until recently, implementation of
Internet applications required development of in-house software
applications or the customization of existing packages. This made
each implementation unique and costly. It also made
implementation time frames and costs unpredictable. The
management team of e-Data believes that businesses of all sizes
have a significant need to outsource the hosting of Internet and
other software applications to improve core business processes,
reduce costs and enhance their global competitive position.
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Products, Sales and Marketing
-----------------------------
The management team of e-Data believes that a significant
market opportunity exists for a nationally-recognized hosting
solutions provider with the scale and expertise to offer a wide
range of value-priced services to businesses of all sizes. They
believe that e-Data can offer a full range of hosting services
that enable businesses to deploy, use, expand and update their
web sites and applications infrastructures more rapidly and cost-
effectively than internally developed solutions. e-Data service
offerings comprise three main areas: web hosting, application
hosting and design/consulting.
e-Data web hosting services include the following product
offerings:
o Virtual Hosting. Its virtual hosting solution provides
web site hosting on a server that is owned, managed
and housed by e-Data for multiple customers. This is
an economical solution for customers with simple or
moderately accessed sites.
o Dedicated Hosting. Its dedicated hosting solution
provides web site hosting on a server that is managed,
housed and typically owned by e-Data for a single
customer. Dedicated server web hosting enables a
customer to host complex web sites and applications
without the need to incur significant infrastructure
and overhead costs. This solution provides greater
server and network resources for e-Data customers than
virtual hosting and allows them to configure their
hardware to optimize site performance. Companies with
increasing levels of complexity, traffic or reliance
on their web sites may prefer dedicated hosting.
o Co-located Hosting. Its co-located hosting solution
provides web hosting services on servers that are
owned by e-Data customers but which are managed and
housed by e-Data. In general, the co-located servers
are housed separately from e-Data shared and dedicated
servers in its data centers which they monitor on a
24x7 basis and to which they allow customers limited
access.
o Application Hosting. Its application hosting solution,
through which e-Data manages software applications for
its customers, is designed to support its customers'
Internet, intranet and extranet projects through a
variety of service and support options.
-14-
<PAGE>
e-Data offers a range of application outsourcing services
which provide its customers with the ability to capitalize on the
latest Internet-enabled technologies while outsourcing
information technology operations such as deployment strategies
and maintenance and upgrades of software to a third party.
e-Data provides consulting services to its customers for
intranet, extranet and application hosting solutions, as well as
for internal networking implementations and back-end web
development projects.
Competition
-----------
The market for web-hosting, data storage and web-design are
all highly competitive. e-Data is relatively new in operating in
these three areas and intends to expand its current customer base
significantly in the coming months. As e-Data is a new venture,
most of e-Data's competitors in these three areas have greater
financial, technical and marketing resources, larger customer
bases, longer operating histories, greater name recognition and
more established relationships in the industry than e-Data does.
Its current and prospective competitors generally may be
divided into the following groups:
o other Web hosting and Internet services companies such
as AboveNet Communications, Inc., Exodus
Communications, Inc., Frontier GlobalCenter, Globix
Corporation and local and regional hosting providers;
o national and regional Internet service providers such
as Concentric Network Corporation, MindSpring
Enterprises, Inc., UUNET Technologies, Inc., PSINet
Inc. and Verio Inc.;
o global telecommunications companies including AT&T
Corp., British Telecommunications plc, Telecom Italia
SpA and Nippon Telegraph and Telephone Corp.;
o regional and local telecommunications companies,
including the regional Bell operating companies such
as Bell Atlantic Corporation and US West, Inc.;
o companies that focus on application hosting such as
USinternetworking, Inc. and IBM Global Services;
o multimedia hosting companies such as broadcast.com.
General Information of the Company
- ----------------------------------
The Company has no trademarks, patents or other licenses
that are material to the conduct of its business. Eyesite.com is
in the process of registering its logo and name.
-15-
<PAGE>
Neither the Company nor its subsidiaries have material
research and development expenses.
The costs to the Company and its subsidiaries of complying
with environmental regulations are not material.
The Company currently employs approximately seven (7) full-
time employees at the corporate level. The aggregate total of
employees amongst the Company and its subsidiaries is
approximately 19. None of the Company's employees are members of
collective bargaining units. The Company believes its
relationships with its employees is good.
Item 2. Management's Discussion and Analysis
This registration statement includes, without limitation,
certain statements containing the words "believes,"
"anticipates," "estimates," "could," "plans to," and "predicts"
and words of a similar nature, which constitute "forward-looking
statements" meaning actual results could differ from projected or
expected results. In particular, the statements herein regarding
the Company's anticipated increased sales in the year 2000; the
continuity of growth of the Company and its subsidiaries; the
expected increase in wages and professional fees in the year 2000
and the percentage of increase thereof; the anticipated expansion
of the Company's operations in the year 2000; the anticipated
execution of a formal long term lease agreement for office space;
the increase or reduction of goodwill; the anticipated increase
in advertising expenses in the year 2000; the Company continuing
to make loans to other businesses as a way to pursue business
opportunities; the increase of interest expense in the year 2000;
the growth of interest income in the year 2000; the possibility
of extraordinary income in the year 2000; the anticipation that a
significant portion of the loans made to other companies will be
repaid in the year 2000; the anticipation that the Company will
be able to secure additional long term debt financing or equity
financing in 2000; the belief that the Company has the financial
resources and commitments needed to meet business requirements in
the foreseeable future; the anticipated significant growth
of its operations in 2000; the assertion that such growth will in
turn cause certain financial and operational areas of the Company
to change; the expected increase in the number of employees of
the Company; the assertion that such expansion of employees will
also significantly increase the funds utilized to provide
sufficient advertising & marketing, office space and equipment
for the increased staff and growth of the Company; and the
anticipation of the increase in expenditures for legal and
accounting services to meet the Company's various compliance
-16-
<PAGE>
standards are all forward-looking statements. Forward-looking
statements reflect management's current expectations and are
inherently uncertain. The Company's actual results may differ
significantly from management's expectations.
Results of Operations
- ---------------------
The Company posted revenues of $24,174 for the year ended
1999 up from $0 in 1998. This increase was caused by the
Company's acquisition and development of its subsidiaries, e-Data
Alliance, Inc. and Executive Assistance, Inc. The Company
anticipates increased sales in 2000 as these and the Company's
other subsidiaries' operations continue to grow.
The Company's operating expenses increased by approximately
3400%, from $17,889 in 1998 to $624,363 in 1999. This dramatic
increase in operating expenses was attributable to the Company's
pursuit of business activity and acquisition candidates. Wages
and professional fees grew from $0 in 1998 to $276,243 in 1999,
as the Company increased staff to handle the marketing,
management and technological demands of its increased business
activity. The Company anticipates wages to continue to grow into
2000, but should not increase by this large of a percentage based
on 1999's total wages. Additionally, the Company incurred office
space costs associated with the growth, which increased this
expense from $0 in 1998 to $45,334 in 1999. With the anticipated
expansion of the Company's operations into 2000, management
anticipates entering into a formal long-term lease arrangement
which would increase rent expense. This increase was also caused
by the amortization of Goodwill, $14,919, due to the acquisitions
the Company made in 1999. In 2000, Goodwill will grow as a gross
figure since the 2000 figures will reflect 12 months of amortized
Goodwill. The Company also anticipates a significant increase in
advertising expense in 2000. This is due to the Company's need to
promote its subsidiaries and the amortization of the advertising
credit the Company has with Money Business, Inc., a Texas
corporation dba The Underground Shopper.
Other Income/(Expense) went from ($12,500) in 1998 to $2,057
in 1999. The increase was caused by $61,915 of interest owed to
the Company on loans it has made to other Companies and a $12,745
profit that was attributable to a non-recurring item. The
Company's interest expense also increased from $12,500 in 1998 to
$72,603 in 1999, an increase of 480%. The Company will continue
to make loans to other companies as a way to pursue business
opportunities. The increase in interest expense was caused by the
Company incurring additional debt to finance operations and
-17-
<PAGE>
acquisitions. The Company anticipates that interest expense will
continue to increase into 2000 as the Company continues to expand
and grow its operations. Therefore, it is anticipated that
interest income for the Company will continue to grow into 2000.
It is possible that the Company will have other extraordinary
income in 2000, but at this time management cannot predict the
source of any potential extraordinary income.
Financial Condition
- -------------------
In 1999, the Company financed its operations through debt
and sales of common stock. In March and April of 1999, the
Company raised $68,599 through the sale of common stock. At year
end, cash and cash equivalents were $399,844 as compared to $0 at
December 31, 1998. The ratio of current assets to current
liabilities was 2.7 to 1 at December 31, 1999, compared to $0 at
December 31, 1998.
Cash utilized by operating activities increased from $1,884
in 1998 to $737,370 in 1999. This was caused by the expansion of
the Company's business activity. The majority of the cash
utilized by operations was attributable to wages and rent.
Investing activities consumed $2,081,988 during 1999,
compared to $0 in 1998. Capital expenditures rose in 1999 from $0
in 1998 to $124,964 in 1999. These capital expenditures were
investments in furniture, fixtures and equipment for the
expansion of the Company and to accommodate possible future
growth. Additionally in 1999, the Company made short-term loans
bearing 8% to 10% interest to various companies totaling
$1,959,254 which is an increase over 1998's total of $0. The
Company anticipates that a significant portion of these loans
will be repaid in 2000, thus providing a source of working
capital for the Company.
Financing activity provided the Company with $3,116,728 as
of December 31, 1999 as compared to $0 in 1998. During 1999, the
Company received approximately $3,049,374 of debt financing at
interest rates ranging from 6% to 10%. This financing provided,
in part, the funding for operations and investment activities.
The Company anticipates that it will be able to secure additional
long term debt financing or equity financing in 2000 to provide
additional necessary working capital for operations.
-18-
<PAGE>
The Company believes that it has the financial resources and
commitments needed to meet business requirements in the
foreseeable future, including capital expenditures and working
capital requirements. The Company anticipates significant growth
of its operations in 2000. This growth will in turn cause certain
financial and operational areas of the Company to change. The
most significant change in operations will be the number of
employees working for the Company. The Company currently has 7
full-time employees and out-sources most projects. In an effort
to bring these projects "in-house" and based on the expansion,
the Company anticipates having 35-50 full or part time employees
by the end of 2000. This expansion will also significantly
increase the funds utilized to provide sufficient advertising &
marketing, office space and equipment for the increased staff and
growth of the Company. Additionally, the Company will be required
to increase its expenditures for legal and accounting services to
meet its various compliance standards.
Year 2000 Compliance
- --------------------
Prior to January 1, 2000, it was widely believed that many
computer systems used today would not be able to interpret data
correctly after December 31, 1999, because such systems allow
only two digits to indicate the year in a date. The Company and
its subsidiaries have been engaged, both before December 31, 1999
and after January 1, 2000, in assessing this Year 2000 ("Y2K")
issue as it relates to their businesses, including their
electronic interactions with banks, vendors, customers and
others. Even though the acute problems many anticipated relating
to the Y2K challenge did not materialize in any significant way
during the first month of 2000, this project, along with
developing and implementing solutions to the Y2K issue, if any
were to occur, is continuing. Management currently anticipates
that the project will be substantially completed by March 1,
2000, and will not have a material impact on the Company's
consolidated financial results or position.
The Company's consolidated financial results could also be
adversely affected if one or more of the companies in which it
has material investments or will have material investments are
materially adversely affected by the Y2K issue.
Eyesite.com and Executive Assistance rely primarily on
personal computers and popular contemporary business and
operating system software that management believes are year 2000
compliant.
-19-
<PAGE>
R&R Foods also utilizes small personal computers and
attendant readily available software to manage food operations
and accounting functions. R&R Foods is also dependent on vendors
for a continued, uninterrupted flow of operations. R&R Foods'
management has identified those vendors material to its
operations and is continuing to monitor the interaction between
its operations and their delivery systems. Management believes
that all hardware, software and third-party business associates
that are material to its continued operations are year 2000
compliant.
E-Data is highly dependent on electronic data processing,
Internet and server technology and information systems in its
operations. E-Data management believes that its hardware and
operating system software are year 2000 compliant. E-Data has
identified the third parties material to its operations.
Management of E-Data is continuing to monitor and, in the case of
certain material third parties, has been able to test its
interface to the external systems of its third-party business
associates and believes that they are year 2000 compliant.
Management of E-Data believes that its electronic data processing
and information systems will be year 2000 compliant. However,
should any material system fail to correctly process information
due to the recent century change, operations could be interrupted
and this could have a material adverse effect on E-Data's results
of operations.
ITEM 3. DESCRIPTION OF PROPERTY
The Company rents from The Strateia Group, Inc. on a month-
to-month basis approximately 4,705 square feet of office space
located at 2925 LBJ Freeway, Suite 188, Dallas, Texas 75234, for
a monthly rental of $6,496 per month. This office space is
utilized for the Company's corporate offices and is in good
condition and adequate for the Company's current needs. There is
currently unused space available in the suite for the addition of
a few more employees. However, as the Company's corporate staff
grows, the Company may relocate it offices to a space that better
utilizes is square footage. At this time, the Company is not a
party to any lease or other written agreement for the utilization
of its office space.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information as of
the date of filing this registration statement (unless otherwise
noted), with respect to the beneficial ownership of the common
stock by each officer and director of the Company, each person
(or group of persons whose shares are required to be aggregated)
-20-
<PAGE>
known to the Company to be the beneficial owner of more than five
percent (5%) of the common stock, and all such directors and
executive officers of the Company as a group. Unless otherwise
noted, the persons named below have sole voting and investment
power with respect to the shares shown as beneficially owned by
them.
Title of Name and Address Amount & Nature Percent of
Class of Beneficial Owner of Beneficial Owner Class
- ---------------------------------------------------------------
Common Robert W. Moehler 128,010<F1> 7.4%
2925 LBJ Freeway
Suite 188
Dallas, Texas 75234
Common David H. Young 28,290<F2> 1.6%
2925 LBJ Freeway
Suite 188
Dallas, Texas 75234
Common Daniel H. Weaver 214,747<F3> 12.4%
2925 LBJ Freeway
Suite 283
Dallas, Texas 75234
Common David H. Carl 116,230<F4> 6.7%
2925 LBJ Freeway
Suite 188
Dallas, Texas 75234
Common Emmerson Finance, Ltd. 225,000 13.0%
c/o Belestra AG
Beethovenstr, Switzerland
Common The Strateia Group, Inc. 108,000<F5> 6.2%
2925 LBJ Freeway
Suite 188
Dallas, Texas 75234
- ----------------------------------------------------------------
Officers and directors
as a group (4 persons) 487,277 28.2%
================================================================
- ---------------------
<F1> As of February 3, 2000, Mr. Moehler has current ownership of
103,020 shares, which total includes 60,000 shares held in the
name of MFC Group, Inc., a corporation which is controlled by Mr.
-21-
<PAGE>
Moehler. Mr. Moehler has options to purchase 250,000 shares of
the Company's common stock at $.25 per share, which vest monthly
(beginning November 1, 1999) in fifty-nine equal increments of
4,165 shares and one final increment of 4,265 shares, expiring
five years from the dates of vesting, none of which have been
exercised. The above figure includes 24,990 shares, which
represents Mr. Moehler's right to exercise the options which have
vested (or will vest within the next 60 days).
<F2> As of February 1, 2000, Mr. Young has current ownership of
3,300 shares. Mr. Young has options to purchase 250,000 shares of
the Company's common stock at $.25 per share, which vest monthly
(beginning November 1, 1999) in fifty-nine equal increments of
4,165 shares and one final increment of 4,265 shares, expiring
five years from the dates of vesting, none of which have been
exercised. The above figure includes 24,990 shares, which
represents Mr. Young's right to exercise the options which have
vested (or will vest within the next 60 days).
<F3> As of February 3, 2000, Mr. Weaver has current ownership of
202,267 shares, which total includes 14,000 shares held in an
IRA. Mr. Weaver has options to purchase 125,000 shares of the
Company's common stock at $.25 per share, which vest monthly
(beginning November 1, 1999) in fifty-nine equal increments of
2,080 shares and one final increment of 2,280 shares, expiring
five years from the dates of vesting, none of which have been
exercised. The above figure includes 12,480 shares, which
represents Mr. Weaver's right to exercise the options which have
vested (or will vest within the next 60 days).
<F4>As of February 4, 2000, Mr. Carl has current ownership of
103,750 shares. Mr. Carl has options to purchase 125,000 shares
of the Company's common stock at $.25 per share, which vest
monthly (beginning November 1, 1999) in fifty-nine equal
increments of 2,080 shares and one final increment of 2,280
shares, expiring five years from the date of vesting, none of
which have been exercised. The above figure includes 12,480
shares, which represents Mr. Carl's right to exercise the options
which have vested (or will vest within the next 60 days).
<F5>The Strateia Group, Inc., a Nevada corporation, is controlled
by Joe H. Glover. Although Rhino shares office space with The
Strateia Group, Inc., none of its officers and directors exercise
any amount of control over The Strateia Group, Inc.
CHANGES IN CONTROL
The Company has no arrangements which might result in a
change in control of the Company.
-22-
<PAGE>
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS
The following table sets forth the directors and executive
officers of the Company, their ages, and all positions with the
Company.
Name Age Positions
- ---------------------------------------------------------------
Robert W. Moehler 35 Director and President
David H. Young 50 Director, Chief Operating
Officer and Secretary
Daniel H. Weaver 49 Director, Executive Vice
President of Finance and
Treasurer
David H. Carl 51 Director
George W. Flinn* 51 Vice President of Human
Resources
- ----------------
*Although George W. Flinn holds the title of Vice President
of Human Resources, he is not a board appointed officer of
the Company.
Robert W. Moehler, age 35, is President and Director of the
Company. Mr. Moehler has been a director of the Company since
October, 1999. In December of 1999, he was re-elected as a
director for a one year term. He is also a director of the
Company's wholly-owned subsidiary, Eyesite.com, Inc., a Delaware
corporation. Mr. Moehler has significant experience with start-up
companies and industry consolidations. Mr. Moehler received an
M.B.A. degree in Management in 1996 from Amber University in
Dallas, Texas. He also received a B.B.A. degree in Finance in
1992 and a B.S. degree in Business Control Systems in 1987 from
the University of North Texas in Denton, Texas. From 1987-1989 he
served as a Staff Auditor for Western Union Telegraph Company,
Inc. From 1989-1992 he served in various capacities with The
Thompson Group, Inc. and Dedicated Care Holdings, Inc.,a group of
companies located in Dallas, Texas that were involved in
providing long-term health care services, as well as numerous
other medical-related services including therapy, lab and
pharmacy. During his employment with these companies, he served
as senior accountant from 1989-1990, controller from 1990-1991
and Treasurer from 1991-1992. Since 1992, Mr. Moehler has been
self-employed, providing business consulting services as well as
buying, selling and marketing sports memorabilia. Since November
1995, Mr. Moehler has served in varying capacities with MFC
Group, Inc., a Nevada organized company that provides business
consulting services. From January 1994 to January 1997, Mr.
-23-
<PAGE>
Moehler served as Secretary and Treasurer of The Strateia Group,
Inc., a business consulting firm located in Dallas that
specializes in providing services to entrepreneurial businesses
and start-ups. Since January 1997, Mr. Moehler has served as
President of Memorabilia & Antiquities, Inc., a development stage
company that sells and markets sports memorabilia, historical
documents and ancient antiquities. From December 1997 to December
1998, Mr. Moehler was President of Enviro-Clean of America, Inc.
(OTCBB: EVCL) and oversaw the financing efforts, acquisition plan
and its obtaining public status. From December 1998 until his
resignation in May, 1999, Mr. Moehler continued to serve as
Secretary/Treasurer and a member of the Board of Directors of
EVCL. Since January 1999, Mr. Moehler has served as President,
Secretary, Treasurer and a director of Framing Systems, Inc., a
majority owned subsidiary of the Company. He was named president
of Rhino Enterprises Group, Inc. in October of 1999.
David H. Young, age 50, is the Chief Operating Officer,
Secretary and a Director of the Company. He has been a director
of the Company since October of 1999. In December of 1999, Mr.
Young was re-elected to the board for a one year term. Mr.
Young joined The Strateia Group, Inc. in August of 1998 as an
industry specialist after retiring from the United States Marine
Corps as a full colonel. During his tenure at The Strateia Group,
Col. Young obtained training and experience in the public market,
specifically in small public companies. His most recent effort
with Enviro-Clean of America, Inc. (OTCBB: EVCL), assisted that
corporation from the development stage to a company producing $5
million in gross revenues. While on active duty, Col. Young had
numerous command positions, including the 31st Marine
Expeditionary Unit and the 3rd Battalion, 6th Marines. Col. Young
played a significant role as Officer in Charge of the Mobile
Training Team Gold in Colombia, South America in creating counter
drug units. Col. Young is a 1973 graduate of the United States
Naval Academy and has an MA from the Naval War College and is a
candidate for an MBA from Regis University.
Daniel H. Weaver, CPA, age 49, is the Executive Vice
President of Finance, Treasurer and a Director of the Company. He
has been a director of the Company since February of 1999. In
December of 1999, Mr. Weaver was re-elected to the board for a
one year term. He received a Bachelor of Science from the United
States Naval Academy in 1972 and a Master of Business
Administration from George Washington University in 1978. After
service in the U.S. Navy, Mr. Weaver worked for the U.S. House of
Representatives in a staff position. He subsequently worked for
the international accounting firm of Coopers & Lybrand and then
served as the Treasurer and Chief Accounting Officer of a savings
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<PAGE>
and loan association. From 1984 to 1997, he was an officer and
shareholder in the accounting firm of Solana Kaufman & Weaver. He
formed his own accounting firm, D.H. Weaver & Associates, in
1998. Mr. Weaver currently serves as a Director for Energy System
Solutions, Inc. (ESUL), a public company traded on the OTC
Bulletin Board.
David H. Carl, age 51, is a Director of Rhino Enterprises
Group, Inc. He was a director of the Company from March of 1995
to April of 1997 and has currently been a director of the Company
since February of 1999. In December of 1999, Mr. Carl was
re-elected to the board for a one year term. From February of
1999 to October of 1999, he served as President of the Company.
He is the President of the Company's wholly-owned subsidiary,
Eyesite.com, Inc., a Delaware corporation. Mr. Carl received a
Bachelor of Science degree from the United States Naval Academy
in 1972 and a Bachelor of Business degree from the University of
Maryland in 1982. From 1972 to 1983, Mr. Carl was a Captain in
the United States Marine Corps. After serving as general manager
for several retail bookstores in Dallas, Texas from 1983 to 1985,
Mr. Carl formed a financial partnership that began a
consolidation of small retail bookstores, for which he served as
the managing partner from 1986 to 1988. Subsequently, from 1989
to 1992, Mr. Carl was the operational partner for a real estate
investment firm, Fidelity Group. From 1992 to present, Mr. Carl
has owned The Bayside Group, Inc., a firm that consults with
start-up and small businesses on operational matters. During this
time, from 1993 to 1997, Mr. Carl started and provided
operational oversight to a residential mortgage brokerage
company, Community Home Mortgage, Inc. with locations in the
Dallas/Ft. Worth area. Mr. Carl has been involved with several
entrepreneurial, start-up companies for the last several years.
He currently serves as a Director of Energy System Solutions,
Inc, a public company traded on the OTC Bulletin Board (ESUL).
George W. Flinn, age 51, is Vice President of Human
Resources, a non-officer position of the Company. A former Marine
Lieutenant Colonel, he received a Bachelor of Science Degree from
the U. S. Naval Academy in 1971. He has extensive experience in
the areas of leadership, management, operations, human resources,
process improvement, and corporate communications. He served as
an infantry officer from 1971-1991. Key responsibilities
included: aide-de-camp to the Commandant of the Marine Corps from
1976-1979; Commanding Officer of Marine Recruiting Station in
Cincinnati, Ohio from 1983-1986; and Commanding Officer of a 1500
man Battalion Landing Team during Operations Desert Storm/Desert
Shield. After leaving the Marine Corps in December of 1991, he
worked for eight years for Harris Chemical Group, a manufacturer
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<PAGE>
of inorganic extractive minerals. His responsibilities were as
Director of Human Resources, Director of Quality/Communications,
and Director of Corporate Communications supporting 3500
employees at 31 sites on three continents. Lieutenant Colonel
Flinn joined Rhino Enterprises in May of 1999.
ITEM 6. EXECUTIVE COMPENSATION
The following table sets forth the compensation received by
the Company's Presidents for the last three fiscal years. None of
the other officers' compensation packages exceeded $100,000 per
year.
SUMMARY COMPENSATION TABLE <F1>
<TABLE>
<CAPTION>
Long Term Compensation
Annual Compensation Awards
--------------------------------- ----------------------------
Securities
Name and Other Restricted Underlying
Principal Annual Stock Options/
Position Year Salary Bonus Comp. Awards SARs
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Robert Moehler 1999<F2> $15,152 $15,000 $2,200<F3> -0- 250,000<F4>
President
David Carl 1999<F5> -0- $10,000 $4,000 $2,000 125,000<F6>
President
Gary Boone 1999<F7> -0- -0- -0- $1,000 -0-
President 1998 -0- -0- -0-
1997 $20,000 -0- -0-
<F1> All columns which are inapplicable have been removed. All
figures have been rounded to the nearest whole amount.
<F2> Mr. Moehler became president of the Company on October 26,
1999.
<F3> Mr. Moehler was paid $2,200 in total consulting fees during
the month of April, 1999.
<F4> Mr. Moehler has options to purchase 250,000 shares of the
Company's common stock at $.25 per share, which vest monthly
(beginning November 1, 1999) in fifty-nine equal increments of
4,165 shares and one final increment of 4,265 shares, expiring
five years from the dates of vesting, none of which have been
exercised. Mr. Moehler will have the right to exercise 145,775 of
the options within three years from the date of issuance.
<F5> Mr. Carl was president of the Company from February 15, 1999
until October 26, 1999, when Mr. Moehler was appointed as
president.
-26-
<PAGE>
<F6>Mr. Carl has options to purchase 125,000 shares
of the Company's common stock at $.25 per share, which vest
monthly (beginning November 1, 1999) in fifty-nine equal
increments of 2,080 shares and one final increment of 2,280
shares, expiring five years from the date of vesting, none of
which have been exercised. Mr. Carl will have the right to
exercise 72,800 of the options within three years from the date
of issuance.
<F7> Gary Boone was president of the Company from October 15,
1996 until February 15, 1999, when Mr. Carl was appointed as
president.
</TABLE>
OPTIONS/SAR GRANTS
Option/SAR Grants in Last Fiscal Year
Individual Grants
- -----------------------------------------------------------------------------
Number of % of Total
Securities Options/SARs
Underlying Granted to
Options/SARs Employees in Exercise or Base Expiration
Name Granted Fiscal Year Price Date
- -----------------------------------------------------------------------------
Moehler 250,000 33% $.25 Five Years<F1>
Carl 125,000 17% $.25 Five Years<F2>
Boone -0- n/a n/a n/a
<F1>Mr. Moehler has options to purchase 250,000 shares of the
Company's common stock at $.25 per share, which vest monthly
(beginning November 1, 1999) in fifty-nine equal increments of
4,165 shares and one final increment of 4,265 shares, expiring
five years from the dates of vesting.
<F2>Mr. Carl has options to purchase 125,000 shares
of the Company's common stock at $.25 per share, which vest
monthly (beginning November 1, 1999) in fifty-nine equal
increments of 2,080 shares and one final increment of 2,280
shares, expiring five years from the date of vesting.
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<PAGE>
AGGREGATED OPTION/SAR EXERCISES AND FISCAL YEAR END
OPTION/SAR VALUE TABLE
Aggregated Option/SAR Exercises
in Last Fiscal Year and FY-End Option/SAR Value
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
FY-End (#) FY-End ($)
Shares Acquired Exercisable/ Exercisable/
Name on Exercise (#) Value Realized ($) Unexercisable Unexercisable
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Moehler -0- -0- 8,330/241,670 $34,361.25/$996,888.75
Carl -0- -0- 4,160/120,840 $17,160/$498,465
Boone -0- -0- -0- -0-
</TABLE>
LONG TERM INCENTIVE PLANS
There are no long term incentive plans in effect and,
therefore, no awards have been given to any executive officer in
the past year.
COMPENSATION OF DIRECTORS
The Company has issued to Mr. Carl, a director of the
Company, options to purchase 125,000 shares of the Company's
common stock at $.25 per share, which vest monthly (beginning
November 1, 1999) in fifty-nine equal increments of 2,080 shares
and one final increment of 2,280 shares, expiring five years from
the date of vesting. Although Mr. Carl held the position of
President/CEO of the Company for a short period of time during
the fiscal year end 1999, these options were granted to Mr. Carl
for his role as a director of the Company.
Other than the options granted to Mr. Carl, as stated above,
no other director of the Company has received any compensation
for the sole purpose of serving as a director. The Company does
not, at this time, plan to pay compensation to other or future
members of the Company's Board of Directors for the performance
of their duties as directors, other than reimbursement of
expenses incurred to attend board meetings. The Company has not
established committees of the Board of Directors.
-28-
<PAGE>
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE IN
CONTROL ARRANGEMENTS
On October 27, 1999, the Company executed an employment
agreement with its President, Robert W. Moehler, for a three year
term. The terms of the employment contract provide, among other
things, that Mr. Moehler shall serve in the position of
President, shall be entitled to minimum annual compensation of
$84,000, shall receive benefits and life insurance as set forth
in the agreement and shall receive options to purchase 250,000
shares of common stock at $.25 per share (vesting monthly).
Further, in the event of a "change of control" of the Company, as
defined in the employment agreement, the Company shall pay to Mr.
Moehler an amount equal to the monthly portion of his minimum
annual compensation multiplied by 36, which shall be paid to Mr.
Moehler in one lump sum no later than 60 days after Mr. Moehler's
termination of employment. The employment agreement with Mr.
Moehler is included as Exhibit 10.0 to this registration
statement on Form 10-SB.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In October of 1999, the Company entered into an employment
agreement with Robert W. Moehler, President of the Company.
Pursuant to the employment agreement, which is for a term of
three years, Mr. Moehler will receive minimum annual compensation
of $84,000 along with other benefits as set forth in the
agreement. In addition, Mr. Moehler was granted options to
purchase 250,000 shares of the Company's common stock at an
exercise price of $.25 per share, which vest monthly over five
years and expire five years from the dates of vesting.
In October of 1999, the Company entered into an employment
agreement with David H. Young, Chief Operating Officer of the
Company. Pursuant to the employment agreement, which is for a
term of three years, Mr. Young will receive minimum annual
compensation of $75,000 along with other benefits as set forth in
the agreement. In addition, Mr. Young was granted options to
purchase 250,000 shares of the Company's common stock at an
exercise price of $.25 per share, which vest monthly over five
years and expire five years from the dates of vesting.
In October of 1999, the Company issued to Daniel H. Weaver,
an officer and a director, and to David H. Carl, a director,
options to purchase 125,000 shares each of the Company's common
stock, at an exercise price of $.25 per share, which vest monthly
over five years and expire five years from the dates of vesting.
-29-
<PAGE>
In March of 1999, the Company issued to Daniel H. Weaver, a
director only at the time, and David H. Carl, a director,
2,000,000 shares of common stock each, which were valued at the
par value of $.001 per share. These shares were subsequently
reverse split into 100,000 shares each. At the same time, the
Company issued to Gary Boone, an officer and director at the
time, 1,000,000 shares of common stock, which were valued at the
par value of $.001 per share. These shares were subsequently
reverse split into 50,000 shares. This stock compensation was
awarded to these three individuals for their services rendered to
the Company prior to its name change to Rhino Enterprises Group,
Inc. and was not for compensation solely for serving as a
director.
The Company loaned approximately $350,000 to Memorabilia &
Antiquities, Inc., a Nevada corporation which is partially owned
and controlled by Robert Moehler, President of the Company. This
loan was made upon the same terms as the loans made to other
corporations and has since been repaid in full, together with
stated interest.
Robert Moehler, President of the Company, indirectly held
75% of the outstanding shares of Executive Assistance, Inc., a
Nevada corporation, prior to Executive Assistance being acquired
by the Company. Mr. Moehler abstained from the vote by the board
of directors of the Company to approve this stock for stock
transaction, in which he indirectly received 60,000 shares of the
Company.
On November 3, 1999, the Company issued to Daniel H. Weaver,
an officer and director of the Company, 69,817 shares for
accounting services rendered to the Company by his accounting
practice, which services were valued at $28,625 or $.41 per
share.
The Company leases, on a month-to-month basis, its office
space and some equipment from The Strateia Group, Inc., a 6.2%
shareholder of the Company. The Strateia Group, Inc. owes
approximately $118,000 to the Company. The Strateia Group, Inc.
is owned and controlled by Joe H. Glover.
On December 3, 1999, the Company paid to Daniel H. Weaver,
an officer and director of the Company, $4,200 for the purchase
of a 1990 Buick Electra Park Avenue. The Company utilized the
web-site of Edmunds.com to get a fair market value, resale price
based upon the year, mileage and general condition of the
vehicle.
-30-
<PAGE>
On November 25, 1999, the Company paid to Memorabilia &
Antiquities, Inc., a Nevada corporation partially owned and
controlled by Robert W. Moehler, $8,050 for the purchase of a
1994 Chevrolet Blazer. The Company utilized the web-site of
Edmunds.com to get a fair market value, resale price based upon
the year, mileage and general condition of the vehicle.
On November 22, 1999, the Company paid to Memorabilia &
Antiquities, Inc., a Nevada corporation partially owned and
controlled by Robert W. Moehler, $20,650 for the purchase of a
1996 Chevrolet Tahoe. The Company utilized the web-site of
Edmunds.com to get a fair market value, resale price based upon
the year, mileage and general condition of the vehicle.
On November 29, 1999, the Company loaned to $5,000 to Daniel
H. Weaver at 6% interest per annum, which shall be repaid to the
Company upon demand by the Company.
Other than as described above, there have been no material
transactions in the past two years or proposed transactions to
which the Company has been or proposed to be a party in which any
officer, director, nominee for officer or director, or security
holder of more than 5% of the Company's outstanding securities is
involved.
The Company has no promoters other than its executive
officers and directors. There have been no transactions which
have benefitted or will benefit its executive officers and
directors either directly or indirectly.
ITEM 8. DESCRIPTION OF SECURITIES
The Company is presently authorized to issue up to
20,000,000 shares of common stock, $.001 par value per share, and
up to 5,000,000 shares of preferred stock, $.001 par value per
share. No shareholder of the Company has a preemptive right to
acquire the Company's unissued shares. There are no provisions,
other than the articles of incorporation and by-laws of the
Company and the Nevada Revised Statutes, that govern the voting
of the Company's shares. The Company has not to date paid any
dividends on its common stock or preferred stock. There are no
provisions, other than as may be set forth in the Nevada Revised
Statutes, that prohibit or limit the payment of dividends. There
are no provisions in the Company's articles of incorporation or
by-laws that would delay, defer or prevent a change in control of
the Company.
-31-
<PAGE>
PART II
ITEM 1. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
MARKET INFORMATION
The Company is voluntarily filing this Registration
Statement on Form 10-SB to maintain the eligibility requirements
for its listing on the OTC Bulletin Board, which requires all
listed companies to be registered with the Securities and
Exchange Commission (the "SEC") under Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended, and to be current in
its required filings once so registered. Further, these
eligibility requirements mandate that the Company obtains a "no
further comment" position from the SEC with regard to this
Registration Statement on Form 10-SB, prior to the Company's May
3, 2000 phase-in date. If the Company should fail, for any
reason, to reach this position with the SEC, the Company's common
stock will be removed from eligibility to trade on the OTC
Bulletin Board, or delisted. Should this occur, the Company's
common stock could only be able to trade via the Pink Sheets, if
the Company is able to locate a market maker willing to make a
market in its stock, until such time as it has been re-approved
for trading on the OTC Bulletin Board or other exchange.
The Company's common stock was originally approved for
trading on the OTC Bulletin Board under the symbol "UNQF." When
the Company's name changed to Rhino Enterprises Group, Inc. on
April 30, 1999, its symbol changed to "RHNO," under which it
currently trades. The range of high and low bid information for
the Company's common stock for each quarter that it has traded
within the last two fiscal years is set forth below.
Quarter High/Ask Low/Bid
--------------------------------------------------
4th Quarter 1999 $5.50 $0.41
3rd Quarter 1999 no trades no trades
2nd Quarter 1999 $0.50 $0.125
1st Quarter 1999 no trades no trades
4th Quarter 1998 no trades no trades
3rd Quarter 1998 no trades no trades
2nd Quarter 1998 no trades no trades
1st Quarter 1998 no trades no trades
The above historical trading information was received from
Prophet Financial Systems via American Online's historical quote
function. These quotations reflect inter-dealer prices, without
retail mark-up, mark-down or commission and may not represent
actual transactions.
-32-
<PAGE>
There are currently options outstanding that allow the
optionholders to purchase up to an aggregate of 977,500 shares of
the Company's common stock at varying exercise prices, vesting
dates and expiration dates. Please see Part II, Item 4, Recent
Sales of Unregistered Securities, for a more detailed description
of these options.
The Company has not agreed to register any shares of
its common stock for any shareholder. There are presently
646,594 shares of common stock which are restricted and which
may, subject to eligibility, be sold in reliance upon Rule 144 of
the Securities Act of 1933, as amended.
STOCKHOLDERS
There are approximately 295 shareholders of record for the
Company's common stock.
DIVIDENDS
To date, the Company has not paid any dividends on its
common stock. The payment of dividends, if any, in the future is
within the discretion of the Board of Directors and will depend
upon the Company's earnings, its capital requirements and
financial condition, and other relevant factors. There are no
provisions in the Company's articles of incorporation or by-laws
that prevent or restrict the payment of dividends. Dividend
payments, if any, would be subject to the provisions of the
Nevada Revised Statutes as well.
ITEM 2. LEGAL PROCEEDINGS
The Company is not a party to any material pending legal
proceedings and, to the best of its knowledge, no such action by
or against the Company has been threatened. None of the
Company's officers, directors or beneficial owners of five
percent (5%) or more of the Company's outstanding securities is a
party adverse to the Company, nor do any of the foregoing
individuals have a material interest adverse to the Company.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
The Company used the same accountant for auditing of the
Company's financial statements for the last two fiscal years and
has not had any disagreements with said accountant.
-33-
<PAGE>
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
On December 31, 1997, the Company issued an aggregate of
60,000 shares of common stock to one individual and his company
based upon a conversion of an aggregate of $15,000 in convertible
debentures of the Company's subsidiary at that time and $15,000
in loans to the Company. These securities were issued in reliance
upon both Section 4(2) of the Securities Act of 1933, as amended
and Article 581-5(B) of the Texas Securities Act, as such stock
was issued in the ordinary course of business to liquidate a
bonafide debt.
On March 26, 1999, the Company issued to three of its
officers and directors an aggregate of 5,000,000 shares of common
stock, valued at the par value of $.001 per share, for services
rendered to the corporation. These securities were issued in
reliance on both Section 4(2) of the Securities Act of 1933, as
amended, and Article 581-5(I) of the Texas Securities Act, as
such stock was issued to Texas residents under a stock purchase
program for the benefit of employees and directors of the
Company.
From March 26, 1999 to April 7, 1999, the Company sold an
aggregate of 13,719,817 shares of its common stock to a total of
33 investors at a sales price of $.005 per share pursuant to an
exemption from registration provided by Regulation D, Rule 504.
In accordance with the terms of Rule 504 at the time of this
offering, the Company was neither a reporting company, investment
company nor a blank check company; the Company did not advertise
for or generally solicit investors; and the Company did not raise
more than $1,000,000. These securities were sold for cash. There
were no underwriting discounts or commissions involved in the
sale of these securities.
In April of 1999, the Company issued an aggregate of 157,500
shares of common stock to an aggregate of seven individuals for
conversion of an aggregate of $92,500 of convertible debentures
in the Company's subsidiary at that time. The conversion rate was
set forth in the convertible debenture. These securities were
issued in reliance upon both Section 4(2) of the Securities Act
of 1933, as amended and Article 581-5(B) of the Texas Securities
Act, as such stock was issued in the ordinary course of business
to liquidate a bonafide debt.
The Company acquired 68% of the outstanding common stock
of Framing Systems, Inc., a Nevada corporation, by issuing to the
shareholders of Framing Systems one share of the Company's
restricted common stock for each twenty-five shares of common
-34-
<PAGE>
stock of Framing Systems. Between the dates of May 17, 1999 and
December 2, 1999, 44 shareholders of Framing Systems exchanged an
aggregate of 6,894,000 shares of Framing Systems' common stock
for 275,760 shares of the Company's common stock. These
securities were issued in reliance on both Section 4(2) of the
Securities Act of 1933, as amended, and Article 581-5(G) of the
Texas Securities Act, as such stock was only issued pursuant to
and in connection with a merger, consolidation or sale of
corporate stock or assets from the Company to another corporation
or the securities holders of such target corporation.
On August 20, 1999, the Company approved the issuance of
1,000 shares of common stock of the Company, valued at $0.1875
per share to an employee of the Company as a bonus for
administrative services rendered to the Company. These securities
were issued in reliance on both Section 4(2) of the Securities
Act of 1933, as amended, and Article 581-5(I) of the Texas
Securities Act, as such stock was issued to Texas residents under
a stock purchase program for the benefit of employees and
directors of the Company.
On August 20, 1999, three individuals who had made loans to
the Company, converted their loans to an aggregate of 10,250
shares of common stock of the Company. The conversion price of
$.50 per share (pre 1 for 20 reverse stock split) was set forth
in the original loan documents executed by each individual. These
securities were issued in reliance upon both Section 4(2) of the
Securities Act of 1933, as amended and Article 581-5(B) of the
Texas Securities Act, as such stock was issued in the ordinary
course of business to liquidate a bonafide debt.
On October 27, 1999, the Company issued options to purchase
an aggregate of 950,000 shares of common stock to officers,
directors and other employees of the Company. On an aggregate
basis, these options vest in 59 equal monthly increments of
15,820 shares on the first day of each month beginning in
November of 1999 and ending with September of 2004 and one final
monthly increment of 16,620 shares on the first day of October of
2004. These options expire five years from the dates of vesting
and the exercise price is $.25 per share. These securities were
issued in reliance on both Section 4(2) of the Securities Act of
1933, as amended, and Article 581-5(I) of the Texas Securities
Act, as such options were issued to Texas residents under a stock
purchase program for the benefit of employees and directors of
the Company.
-35-
<PAGE>
Between November 1, 1999 and November 19, 1999, four
individuals who had made loans to the Company converted their
loans to an aggregate of 8,000 shares of common stock of the
Company. The conversion price of $.50 per share (pre 1 for 20
reverse stock split) was set forth in the original loan documents
executed by each individual. These securities were issued in
reliance upon both Section 4(2) of the Securities Act of 1933, as
amended and Article 581-5(B) of the Texas Securities Act, as such
stock was issued in the ordinary course of business to liquidate
a bonafide debt.
On November 3, 1999, the Company approved the issuance to
one of its officers/directors, 69,817 shares for accounting
services rendered to the Company by this individual's accounting
practice, which services were valued at $28,625 or $.41 per
share. These securities were issued in reliance on both Section
4(2) of the Securities Act of 1933, as amended, and Article 581-
5(I) of the Texas Securities Act, as such stock was issued to
Texas residents under a stock purchase program for the benefit of
employees and directors of the Company.
The Company acquired 100% of the outstanding common stock
of Executive Assistance, Inc., a Nevada corporation, by issuing
to the shareholders of Executive Assistance, one share of the
Company's restricted common stock for each fifty shares of common
stock of Executive Assistance. On November 17, 1999, 3
shareholders of Executive Assistance exchanged an aggregate of
4,000,000 shares of Executive Assistance's common stock
for 80,000 shares of the Company's common stock. These securities
were issued in reliance on both Section 4(2) of the Securities
Act of 1933, as amended, and Article 581-5(G) of the Texas
Securities Act, as such stock was only issued pursuant to and in
connection with a merger, consolidation or sale of corporate
stock or assets from the Company to another corporation or the
securities holders of such target corporation.
On November 17, 1999, the Company issued to an employee of
its subsidiary, Executive Assistance, options to purchase a total
of 2,500 shares of common stock. These options vest in 59 equal
monthly increments of 41 shares on the first day of each month
beginning in December of 1999 and ending with October of 2004 and
one final monthly increment of 81 shares on the first day of
November of 2004. These options expire five years from the dates
of vesting and the exercise price is $.50 per share. These
securities were issued in reliance on both Section 4(2) of the
Securities Act of 1933, as amended, and Article 581-5(I) of the
Texas Securities Act, as such options were issued to Texas
residents under a stock purchase program for the benefit of
employees and directors of the Company.
-36-
<PAGE>
On December 1, 1999, the Company issued to one individual,
options to purchase up to 25,000 shares of common stock of the
Company at $5.00 per share, for an aggregate of $125,000,
expiring on December 1, 2001. These securities were issued in
reliance on Section 4(2) of the Securities Act of 1933, as
amended, as such options were issued to an accredited investor in
an isolated transaction.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Officers and directors of the Company may be indemnified by
the Company for any liability incurred by them while acting
within the scope of their respective duties as officers and
directors of the Company, except for acts of intentional
misconduct. As of the date hereof, the Company has no contracts
in effect providing any indemnity with any specific rights of
indemnification, although the Company's by-laws authorize its
Board of Directors to enter into and deliver such contracts to
provide an indemnity with specific rights of indemnification in
addition to the rights provided in the Company's articles of
incorporation and by-laws to the fullest extent provided under
Nevada law. The Company has been advised that, in the opinion of
the Securities and Exchange Commission, such indemnification is
against public policy, and is unenforceable. The Company has no
special insurance against liability of its directors and
officers, although the Company's by-laws provide that the Company
may, unless prohibited by Nevada law, maintain such insurance.
PART F/S
The Company's audited financial statements for the years
ended December 31, 1998 and 1997 and the Company's unaudited
financial statements for the 12 months ended December 31, 1999
and required by this Part F/S are included herein.
The unaudited, consolidated financial statements presented
herein may not include all of the information and note
disclosures required by generally accepted accounting principles.
These condensed consolidated financial statements should be read
in conjunction with the audited financial statements and notes
thereto for the years ended December 31, 1998 and 1997. The
accompanying financial statements for the year ended December 31,
1999 have not been examined by independent accountants in
accordance with generally accepted auditing standards, but in the
opinion of management such financial statements include all
adjustments (consisting only of normal recurring adjustments)
necessary to present fairly the Company's financial position and
results of operations.
-37-
<PAGE>
RHINO ENTERPRISES GROUP, INC.
AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
<PAGE>
RHINO ENTERPRISES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1999 AND 1998
1999 1998
------------ -----------
ASSETS
Cash on hand and in banks 297,370 0
Accounts receivable 47,474 0
Notes receivable 1,968,254 0
Inventory of products held for resale 0 0
Prepaid expenses and deposits 55,000 0
Property, plant and equipment 136,052 0
Less -- accumulated depreciation (28,935) 0
Intanglible assets, including goodwill 953,261 96,521
Less -- accumulated amortization (14,920) (54,007)
---------- -------
Total Assets 3,413,556 42,514
========== =======
See Notes to Consolidated Financial Statements.
<PAGE>
RHINO ENTERPRISES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1999 AND 1998
1999 1998
------------ -----------
LIABILITIES AND EQUITY
Accounts payable 126,253 89,684
Accrued expenses 19,835 43,896
Marketing Obligation 800,000 0
Notes payable 2,918,538 267,264
10% convertible debentures 0 288,852
---------- --------
Total Liabilities 3,864,626 689,696
---------- --------
Common stock 1,576 4,269
Paid in capital 1,553,945 1,196,745
Accumulated other comprehensive income 0 0
Minority interests 3,653 0
Accumulated deficit (2,010,244) (1,848,196)
---------- ----------
Total Stockholders' Equity (451,070) (647,182)
---------- ----------
Total Liabilities and
Stockholders' Equity 3,413,556 42,514
========== ==========
See Notes to Consolidated Financial Statements.
<PAGE>
RHINO ENTERPRISES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
1999 1998
------------ -----------
REVENUES 24,174 0
COST OF SALES 0 0
-------- -------
GROSS PROFIT (LOSS) 24,174 0
GENERAL AND ADMINISTRATIVE EXPENSES 648,537 17,889
-------- -------
LOSS FROM OPERATIONS (624,363) (17,889)
OTHER INCOME (EXPENSE)
Interest income 61,915 0
Other income 12,745 0
Interest expense (72,603) (12,500)
-------- -------
TOTAL OTHER INCOME (EXPENSE) 2,057 (12,500)
-------- -------
LOSS BEFORE INCOME TAX (622,306) (30,389)
LESS MINORITY INCOME (EXPENSE) 3,144 0
-------- -------
PROVISION FOR INCOME TAX 0 0
-------- -------
NET LOSS and COMPREHENSIVE LOSS (619,162) (30,389)
======== =======
See Notes to Consolidated Financial Statements.
<PAGE>
RHINO ENTERPRISES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
| COMMON PAID IN ACCUMULATED MINORITY TOTAL
SHARES | STOCK CAPITAL DEFICIT INTEREST EQUITY
--------- | ------- --------- ----------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, January 1, 1998 4,269,528| 4,269 1,196,745 (1,817,807) 0 (616,793)
|
|
Net loss -- 1998 operations | (30,389) (30,389)
---------| ------ --------- ---------- ------ --------
BALANCE, December 31, 1998 4,269,528| 4,269 1,196,745 (1,848,196) 0 (647,182)
========= ====== ========= ========== ====== ========
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
RHINO ENTERPRISES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
| COMMON PAID IN ACCUMULATED MINORITY TOTAL
SHARES | STOCK CAPITAL DEFICIT INTEREST EQUITY
---------|-------- --------- ----------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, January 1, 1999 4,269,528 | 4,269 1,196,745 (1,848,196) 0 (647,182)
|
504 Offering 13,719,817 | 13,720 53,635 67,355
|
Shares issued for services 5,070,817 | 5,071 28,742 33,813
|
Shares issued to pay off loans 17,750 | 18 177,482 177,500
|
Converted debentures 123,900 | 124 (124) 0
|
Shares issued to purchase entities 343,360 | 343 105,496 105,839
|
Cost of equity | (30,000) (30,000)
|
Spin off subsidiary (Unique Ideas, Inc) | 457,114 457,114
|
Reverse stock split (1 for 20) (21,968,596)| (21,969) 21,969 0
|
Net loss -- 1999 operations | (619,162) (619,162)
|
Minority interests | 3,653 3,653
----------- | ------- --------- ---------- ------ --------
BALANCE, December 31, 1999 1,576,576 | 1,576 1,553,945 (2,010,244) 3,653 (451,070)
=========== ======= ========= ========== ====== ========
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
RHINO ENTERPRISES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
1999 1998
------------ -----------
CASH USED BY OPERATING ACTIVITIES
Net Loss (619,162) (30,389)
Adjustments to reconcile net loss
to cash used
Depreciation and amortization 42,403 6,302
Minority interest in income (3,143) 0
Stock issued for services 33,813 0
Changes in working capital (191,281) 22,203
---------- -------
Cash Used By Operating Activities (737,370) (1,884)
---------- -------
CASH USED IN INVESTING ACTIVITIES
Purchase property and equipment (124,964) 0
Purchase website (8,333) 0
Purchase of subsidary 10,563 0
Loans to other entities (1,959,254) 0
---------- -------
Cash Used by Investing Activities (2,081,988) 0
---------- -------
CASH PROVIDED BY FINANCING ACTIVITIES
Issue notes 3,049,374 0
Repay notes 0 0
Issue common stock for cash 67,354 0
---------- -------
Cash Provided by Financing Activities 3,116,728 0
---------- -------
NET INCREASE (DECREASE) IN CASH 297,370 (1,884)
CASH, beginning of year 0 1,884
---------- -------
CASH, end of year 297,370 0
========== =======
See Notes to Consolidated Financial Statements.
<PAGE>
RHINO ENTERPRISES GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 and 1998
NOTE A -- NATURE OF OPERATIONS
Rhino Enterprises Group, Inc. was formerly known as Unique
Fashions, Inc. (a Nevada C corporation). The company
invests in start-up companies and provides management and
consulting services related to operations and capital
structures.
Unique Fashions, Inc. was organized on March 3, 1995 to
acquire Unique Ideas, Inc. (a Texas C corporation). The
acquisition transaction was consummated on May 1, 1995, with
an exchange of one share of the Company's common stock for
each share of Unique Ideas, Inc.'s outstanding common stock.
The transaction was accounted for as a purchase, effective
May 1, 1995. During 1998, the only activities involved
negotiating pay-off settlements with trade payable vendors,
collecting outstanding receivables, and disposing of assets.
Unique Ideas, Inc. was incorporated August 17, 1993, as
Unique Products, Inc. for the purpose of acquiring the
assets and assuming the liabilities of Doodle Art Wear, a
Texas general partnership. The purchase price for the
partnership was allocated to the acquired assets and
liabilities. Intangible assets amounting to $50,223 related
to the design, manufacturing process, and product marketing
strategies for children's outerwear and related accessories
were identified and amortized on a straight-line basis over
a period of five years. Unique Ideas, Inc. accounted for the
acquisition transaction as a purchase effective August 17,
1993. By the end of 1996, operations had ceased and on March
25, 1999, all of the outstanding common shares (675,266)
owned by Unique Fashions, Inc. were distributed pro rata to
shareholders as a spin-off transaction.
On May 13, 1999, the Board of Directors approved the
purchase of 100% of the outstanding shares of Framing
Systems, Inc. (a Nevada C corporation) for 405,160
restricted common shares. Framing Systems, Inc. provides
wholesale framing services on a sub-contract basis. As of
December 31, 1999, only 68.06 percent of the shares held by
Framing Systems shareholders had been surrendered for Rhino
Enterprises Group, Inc. shares.
On October 31, 1999, the Board of Directors approved the
formation of a wholly-owned subsidiary, Eyesite.Com, Inc.,
(a Delaware C corporation). Eyesite.Com, Inc. provides
vision care information to consumers and provides customers
to eye care professionals through the use of the Internet.
<PAGE>
RHINO ENTERPRISES GROUP, INC. and SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 and 1998
NOTE A -- NATURE OF OPERATIONS (continued)
On November 11, 1999, the Board of Directors approved the
purchase of 100% of the outstanding shares of Executive
Assistance, Inc. (a Nevada C corporation) for 80,000 shares
of restricted common stock. Executive Assistance, Inc.
provides various forms of administrative services to small
businesses.
On December 17, 1999, the Board of Directors approved the
purchase of 50 percent of the outstanding shares of E-Data
Alliance Corp, Inc., (a Texas C corporation) for $1,000,000.
The purchase price consists of the assumption of a $200,000
note payable from E-Data Alliance, Inc. to Digital
Information & Virtual Access, Inc. and an assignment of an
$800,000 marketing obligation with Digital Information &
Virtual Access, Inc. E-Data Alliance, Inc. provides Internet
web hosting and e-commerce services.
NOTE B -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Consolidation -- These consolidated financial statements
contain the accounts of Rhino Enterprises Group, Inc. and
its subsidiaries, Eyesite.Com, Inc., Executive Assistance,
Inc., E-Data Alliance, Inc., and Framing Systems, Inc. The
accounts of Eyesite.Com, Inc. and Executive Assistance, Inc.
are included at 100 percent, E-Data Alliance is included at
50 percent and Framing Systems, Inc. at 68.06 percent. All
significant intercompany transactions and balances have been
eliminated in consolidation.
Property, Plant and Equipment -- All fixed and depreciable
assets were carried at cost. Depreciation of property,
plant, and equipment was provided using the straight-line
method over the expected useful life of the assets.
Allowance for Uncollectible Receivables -- Management
believes that a reserve for uncollectible accounts is not
necessary at December 31, 1998 and 1999.
Accounting Estimates -- The preparation of consolidated
financial statements in accordance with generally accepted
accounting principles requires management to make estimates
and assumptions which affect the reported amounts of assets,
liabilities, revenues and expenses, and disclosures of
contingent assets and liabilities at the date of the
consolidated financial statements. Actual results could
differ from those estimates.
<PAGE>
RHINO ENTERPRISES GROUP, INC. and SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 and 1998
NOTE B -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
Income Tax Accounting -- Income taxes are provided for the
tax effects of transactions reported in the consolidated
financial statements and consist of taxes currently due,
plus deferred taxes. Deferred tax assets or liabilities are
recognized for temporary differences between the tax basis
of assets and liabilities for financial statement and income
tax purposes. Deferred tax assets and liabilities represent
future tax return consequences of those temporary
differences. At December 31, 1999 and 1998, there were no
deferred tax assets or liabilities.
Management estimates that there will be a tax basis net
operating loss carryforward of approximately $851,000 which
will expire starting in 2010. A deferred tax asset has not
been recognized for this tax net operating loss, since
management believes that it is not more likely than not that
this tax benefit will ever be realized.
NOTE C -- NOTES RECEIVABLE
At various times during 1999, the Company has made loans to
affiliates and companies with which it is contemplating a
strategic and/or investment relationship. These loans vary
in interest rates from 8 to 10 percent with maturities
ranging from 30 days to 180 days. The balance outstanding at
December 31, 1999 was $1,968,254.
NOTE D -- CONVERTIBLE DEBENTURES
At various times during 1995 and 1996, Unique Ideas, Inc.
raised $1,379,916 of working capital by issuing short-term
convertible promissory notes bearing interest at 10%. These
notes were originally expected to be repaid within six
months of issue. But, due to continuing cash constraints, no
repayments were ever made. The principal amount (not
including interest) of the notes is convertible into shares
of common stock at exchange rates ranging from $0.10 to
$1.00 per share. As of December 31, 1998, $1,091,064 of
debentures had been converted to common stock.
<PAGE>
RHINO ENTERPRISES GROUP, INC. and SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 and 1998
NOTE D -- CONVERTIBLE DEBENTURES (continued)
During 1999 and prior to the spin-off transaction discussed
in Note A above, an additional $87,349 of debentures had
been turned in for conversion, which resulted in issuance of
123,900 shares of stock. Subsequent to the spin-off
transaction, the Board of Directors approved an extension of
time for debenture holders to convert their instruments into
common shares of the Company. At December 31, 1999, there
were 30 holders in the amount of $196,352 still outstanding,
which could ultimately result in the issuance of 19,635
shares.
NOTE E -- INDEBTEDNESS
Parent Company has the following outstanding indebtedness at
December 31, 1999 and 1998:
1999 1998
Note payable to Digital Information
& Virtual Access, Inc., 6% interest,
unsecured, unpaid accrued interest
at December 31, 1999 is $60,164 $ 1,118,538 $ -0-
Note payable to an individual, 50%
interest, past due, unsecured -0- 25,000
Notes payable to five individuals,
non-interest bearing, past due,
unsecured -0- 152,500
Notes payable to Net.Return, 10%
interest, unsecured 1,800,000 -0-
---------- ------------
Total for Rhino Enterprises
Group, Inc 2,918,538 177,500
---------- ------------
<PAGE>
RHINO ENTERPRISES GROUP, INC. and SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999and 1998
NOTE E -- INDEBTEDNESS (continued)
Indebtedness of the Subsidiary Companies at December 31,
1999 and 1998 consisted of the following:
1999 1998
Note payable to Capital Funding &
Consulting Group, 11% interest,
past due, unsecured, unpaid accrued
interest at December 31, 1998 is
$12,131. -0- 30,000
Note payable to an individual, 9%
interest, past due, unsecured,
unpaid and accrued interest at
December 31, 1998 is $9,024 -0- 36,799
Notes payable to six individuals,
various rates of interest, past
due, unsecured -0- 22,965
------------
Total for Unique Ideas, Inc -0- 89,764
----------- ------------
Total Consolidated Indebtedness $ 2,918,538 $ 267,264
=========== ============
On June 15, 1999, the Board of Directors approved the
conversion of the outstanding loans of $177,500 into
restricted stock at $.50 per share. Taking into account the
1 for 20 reverse split discussed below, the new conversion
rate is $10.00 per share of restricted common stock, for a
maximum issuance of 17,750 shares.
NOTE F -- COMMON STOCK
The Company has 25,000,000 of authorized shares of common
stock at a par value of $0.001 per share.
On March 30, 1999, the Company authorized a securities
offering of 15,000,000 shares of common stock at an offering
price of $.005 per share, on a best efforts basis pursuant
to an exemption from registration with the Securities and
Exchange Commission provided by Rule 504 of Regulation D and
Section 3(b) of the Securities Act of 1933, and pursuant to
exemptions from registration under the various states in
which the securities will be offered as deemed appropriate
by the Board of Directors and offered under the terms and
conditions set forth in the offering memorandum or offering
circular. Funds of $67,355 were raised from this offering
and 13,719,817 share were issued.
<PAGE>
RHINO ENTERPRISES GROUP, INC. and SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 and 1998
NOTE F -- COMMON STOCK (continued)
On April 16, 1999, the Board of Directors and Shareholders
authorized a 1 for 20 reverse split, which reduced the
authorized common shares to 1,250,000. Par value was not
modified. Simultaneously, the Board of Directors and
Shareholders increased the authorized common stock to
20,000,000 at $.001 par value and 5,000,000 preferred shares
at $.001 par value. Dividends, convertibility and other
special preferences will be determined at the discretion of
the Board of Directors.
NOTE G -- COMMITMENTS
The Company operates out of leased facilities under the
terms of short-term rental agreements, which are not in
writing. Rent expense was $45,344 and $0 for 1999 and 1998
respectively.
The Company has employment agreements with its president and
chief operating officer which provided, among other things,
for the payment of a base salary, car allowance, life
insurance, and options to purchase 250,000 shares of common
stock at $.25 per share. The options vest monthly for a
period of 5 years.
Certain other key employees were granted options to purchase
125,000 shares of common stock at $.25 per share which vest
monthly over the next 5 years.
NOTE H -- NON-CASH INVESTING AND FINANCING TRANSACTIONS
1999 1998
Debentures converted to common stock $ 87,400 $ -0-
Notes payable converted to common stock 177,000 -0-
Interest expense 60,164 -0-
Taxes based on income paid -0- -0-
Acquisition of Goodwill which is being
amortized over 15 years:
Executive Assistance, Inc. 39,555 -0-
E-Data Alliance, Inc. 795,000 -0-
Framing Systems, Inc. 60,629 -0-
---------- ---------
Total Goodwill $ 895,184 $ -0-
========== =========
<PAGE>
RHINO ENTERPRISES GROUP, INC. and SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 and 1998
NOTE I -- CONTINGENT LIABILITY
One of the Company's stockholders is an attorney who has
provided various forms of legal services over the past four
years. The unbilled amount for services rendered is
approximately $40,000 as of December 31, 1999. Management
expects to negotiate a settlement with this stockholder to
satisfy this contingent obligation by issuing shares of the
Company's stock.
On November 29, 1999, the Board of Directors approved the
buy-back of up to 200,000 shares of the Company's common
shares for a price not to exceed $5 per share for a period
of 180 days from the date the Company issues a press release
to announce such a buy-back. The Company will set aside
$1,000,000 of working capital to finance any stock
repurchases.
<PAGE>
UNIQUE FASHIONS, INC.
AND SUBSIDIARY
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1998
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Shareholders and Board of Directors
UNIQUE FASHIONS, INC. and SUBSIDIARY
We have audited the accompanying consolidated balance sheets of
UNIQUE FASHIONS, INC. and SUBSIDIARY as of December 31, 1997
and 1998, and the related consolidated statements of income,
stockholders' equity, and cash flows for the years then ended.
These consolidated financial statements are the responsibility
of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on
our audit.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether
the consolidated financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
consolidated 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. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the
consolidated financial position of UNIQUE FASHIONS, INC. and
SUBSIDIARY as of December 31, 1997 and 1998, and the results of
their operations and their cash flows for the years then ended
in conformity with generally accepted accounting principles.
/s/ M. C. Hunter & Associates
March 19, 1999
<PAGE>
UNIQUE FASHIONS, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1997 AND 1998
1997 1998
------- --------
ASSETS
Cash on hand and in banks 1,884 0
Accounts receivable 0 0
Inventory of products held
for resale 0 0
Prepaid expenses and deposits 188 0
Property, plant and equipment 0 0
Less -- accumulated depreciation 0 0
Intanglible assets, including
goodwill 96,521 96,521
Less -- accumulated amortization (47,705) (54,007)
-------- ---------
Total Assets 50,888 42,514
======== =========
See Notes to Consolidated Financial Statements
<PAGE>
UNIQUE FASHIONS, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1997 AND 1998
1997 1998
--------- ----------
LIABILITIES AND EQUITY
Accounts payable 89,684 89,684
Accrued expenses 21,881 43,896
Notes payable 267,264 267,264
10% convertible debentures 288,852 288,852
---------- ----------
Total Liabilities 667,681 689,696
---------- ----------
Common stock 4,269 4,269
Paid in capital 1,196,745 1,196,745
Accumulated other
comprehensive income 0 0
Accumulated deficit (1,817,807) (1,848,196)
---------- ----------
Total Stockholders' Equity (616,793) (647,182)
---------- ----------
Total Liabilities and
Stockholders' Equity 50,888 42,514
=========== ==========
See Notes to Consolidated Financial Statements
<PAGE>
UNIQUE FASHIONS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1998
1997 1998
----------- -----------
REVENUES 0 0
COST OF SALES 0 0
----------- -----------
GROSS PROFIT (LOSS) 0 0
GENERAL AND ADMINISTRATIVE
EXPENSES 180,944 17,889
----------- -----------
LOSS FROM OPERATIONS (180,944) (17,889)
----------- -----------
OTHER INCOME (EXPENSE)
Interest income 0 0
Interest expense (12,500) (12,500)
Loss on disposition of
assets (212,672) 0
Other (34,473) 0
------------ ------------
TOTAL OTHER INCOME (EXPENSE) (259,645) (12,500)
------------ ------------
LOSS BEFORE INCOME TAX (440,589) (30,389)
PROVISION FOR INCOME TAX 0 0
------------ ------------
NET LOSS and COMPREHENSIVE
LOSS (440,589) (30,389)
============ ============
See Notes to Consolidated Financial Statements
<PAGE>
UNIQUE FASHIONS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1998
<TABLE>
<CAPTION>
| COMMON PAID IN ACCUMULATED TOTAL
SHARES | STOCK CAPITAL DEFICIT EQUITY
--------- | ------- ------- --------- ----------
<S> <C> | <C> <C> <C> <C>
BALANCE, |
January 1, 1997 |
|
4,093,528 | 4,093 1,155,321 (1,377,218) (217,804)
|
Converted debentures |
60,000 | 60 29,940 30,000
|
Shares issued to |
pay off loans |
75,000 | 75 7,425 7,500
|
Shares issued for |
services |
41,000 | 41 4,059 4,100
|
Net loss -- 1997 |
operations | (440,589) (440,589)
------- | --------- ---------- ------------- ---------
BALANCE, |
December 31, 1997 |
|
4,269,528 | 4,269 1,196,745 (1,817,807) (616,793)
=========== | ========== ========== ============ ==========
</TABLE>
(continued)
See Notes to Consolidated Financial Statements.
<PAGE>
UNIQUE FASHIONS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1998
<TABLE>
<CAPTION
| COMMON PAID IN ACCUMULATED TOTAL
SHARES | STOCK CAPITAL DEFICIT EQUITY
------ | ------ ------- ----------- -------
<S> <C> | <C> <C> <C> <C>
BALANCE, January |
1, 1998 |
4,269,528 | 4,269 1,196,745 (1,817,807) (616,793)
|
Net loss |
1998 operations | (30,389) (30,389)
---------- | ------- ---------- -------------- ----------
BALANCE, December |
31, 1998 4,269,528 | 4,269 1,196,745 (1,848,196) (647,182)
========== | ======= ========== ============== ==========
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
UNIQUE FASHIONS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1998
1997 1998
--------- ----------
CASH USED BY OPERATING ACTIVITIES
Net Loss (440,589) (30,389)
Adjustments to reconcile net loss
to cash used
Depreciation and amortization 10,801 6,302
Stock and debentures issued
for services 4,100 0
Changes in working capital 198,357 22,203
--------- ---------
Cash Used By Operating Activities (227,331) (1,884)
--------- ---------
CASH USED IN INVESTING ACTIVITIES
Purchase property and equipment 0 0
Disposition of assets 1,333 0
--------- ---------
Cash Provided by Investing Activities 1,333 0
--------- ---------
CASH PROVIDED BY FINANCING ACTIVITIES
Issue notes and debentures 152,500 0
Repay notes (5,552) 0
Issue common stock for cash 0 0
--------- ---------
Cash Provided by Financing
Activities 146,948 0
--------- ---------
NET INCREASE (DECREASE) IN CASH (79,050) (1,884)
CASH, beginning of year 80,934 1,884
--------- ---------
CASH, end of year 1,884 0
========= =========
See Notes to Consolidated Financial Statements.
<PAGE>
UNIQUE FASHIONS, INC and SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997 and 1998
NOTE A NATURE OF OPERATIONS
Unique Fashions, Inc. (a Nevada C corporation) through its
wholly-owned subsidiary, Unique Ideas, Inc. (a Texas C
corporation) designed and manufactured children's outerwear,
accessories and related products during 1994, 1995 and 1996.
The product lines were marketed through independent sales
representatives that had sales agreements requiring Unique
Ideas, Inc. to pay sales commissions of 6% to 16%. By the end
of 1996, operations had ceased.
Unique Ideas, Inc. was originally incorporated August 17,
1993, as Unique Products, Inc. for the purpose of acquiring the
assets and assuming the liabilities of Doodle Art Wear, a Texas
general partnership. This entity had developed certain
intangibles including designs, manufacturing processes and
marketing strategies for children's outerwear and related
accessories. Unique Ideas, Inc. accounted for the acquisition
transaction as a purchase effective August 17, 1993.
Unique Ideas, Inc. issued 225,000 shares of its common stock
to the two general partners and 25,000 shares for $25,000 cash
to an unrelated individual. In addition, Unique Ideas, Inc.
issued $60,000 of notes, including $35,000 which did not bear
interest.
Net profits interests in Unique Ideas, Inc. aggregating 14%
were granted to the holder of the non-interest bearing note.
These net profits interests covered a period of three years.
Imputed interest at 12% was recorded for these notes and is was
amortized over the terms of these notes on a level yield basis.
One of the non-controlling interest shareholders purchased a 5%
two-year net profits interest in Unique Ideas, Inc. for
$25,000. At December 31, 1994, two 3% net profits interests
were still in effect. Subsequent to December 31, 1994, these
remaining net profits interests were exchanged for shares of
common stock of Unique Ideas, Inc. (prior to the acquisition by
Unique Fashions, Inc. discussed below).
The purchase price for the partnership was allocated to the
acquired assets and liabilities. Intangibles amounting to
$50,223 were identified and were related to the design,
manufacturing process, and product marketing strategies. These
intangible assets were amortized on a straight-line basis over
a period of five years.
<PAGE>
UNIQUE FASHIONS, INC and SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997 and 1998
NOTE A NATURE OF OPERATIONS (continued)
Unique Fashions, Inc. (the "Company") was organized on
March 3, 1995, in order to acquire Unique Ideas, Inc. The
acquisition transaction was consummated on May 1, 1995, with an
exchange of one share of the Company's common stock for each
share of Unique Ideas, Inc.'s outstanding common stock. The
transaction was accounted for as a purchase, effective May 1,
1995. Consequently, the consolidated statement of income
reflects the results of operations from that date through
December 31, 1995. The following summarizes the pro-forma
results of operations for the Company as if the acquisition had
taken place January 1, 1994.
Revenues $ 119,409
Net Loss $ 119,302
Loss per share $( 0.08)
Weighted average number of
common shares outstanding $ 1,517,177
During 1997 and 1998, the only activities have been
negotiating pay-off settlements with trade payable vendors,
collecting outstanding receivables, and disposing of assets.
NOTE B SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Consolidation - These consolidated financial statements
contain the accounts of Unique Fashions, Inc. and Unique Ideas,
Inc. All significant intercompany transactions and balances
have been eliminated in consolidation.
Inventory - Inventory was stated at the lower of
first-in, first-out cost or market.
Property, Plant and Equipment - All fixed and depreciable
assets were carried at cost. Depreciation of property, plant,
and equipment was provided using the straight-line method based
upon an expected useful life of three years.
Allowance for Uncollectible Receivables - Management
believes that a reserve for uncollectible accounts is not
necessary at December 31, 1997 and 1998.
<PAGE>
UNIQUE FASHIONS, INC and SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997 and 1998
NOTE B SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Accounting Estimates - The preparation of consolidated
financial statements in accordance with generally accepted
accounting principles requires management to make estimates and
assumptions which affect the reported amounts of assets,
liabilities, revenues and expenses, and disclosures of
contingent assets and liabilities at the date of the
consolidated financial statements. Actual results could differ
from those estimates.
Income Tax Accounting - Income taxes are provided for
the tax effects of transactions reported in the consolidated
financial statements and consist of taxes currently due, plus
deferred taxes. Deferred tax assets or liabilities are
recognized for temporary differences between the tax basis of
assets and liabilities for financial statement and income tax
purposes. Deferred tax assets and liabilities represent future
tax return consequences of those temporary differences. At
December 31, 1997 and 1998, there were no deferred tax assets
or liabilities.
Management estimates that there will be a tax basis net
operating loss carryforward of approximately $1,800,000 which
will expire starting in 2010. A deferred tax asset has not be
recognized for this tax net operating loss, since management
believes that it is not more likely than not that this tax
benefit will ever be realized.
NOTE C CONVERTIBLE DEBENTURES
At various times during 1995 and 1996, Unique Ideas, Inc.
raised $1,379,916 of working capital by issuing short-term
convertible promissory notes bearing interest at 10%. They
were originally expected to be repaid within six months of
issue. But, due to continuing cash constraints, no repayments
were ever made. The principal amount (not including interest)
of the notes is convertible into shares of common stock at
exchange rates ranging from $0.10 to $1.00 per share. As of
December 31, 1998, $1,091,064 of debentures had been converted
to common stock. In addition, at December 31, 1998, an
additional $48,274 of debentures had been turned in for
conversion, which will result in issuance of 147,698 shares of
stock. See also the "Subsequent Events" footnote below.
<PAGE>
UNIQUE FASHIONS, INC and SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997 and 1998
NOTE D INDEBTEDNESS
Parent Company has the following outstanding indebtedness
at December 31, 1998
Note payable to an individual, 50%
interest, past due, unsecured $ 25,000
Notes payable to five individuals,
non-interest bearing,
past due, unsecured 152,500
--------
Total for Unique Fashions, Inc. $177,500
--------
Indebtedness of the Subsidiary Company
at December 31, 1998 consisted of
the following
Note payable to Capital Funding &
Consulting Group, 11% interest,
past due, unsecured. Unpaid accrued
interest at December 31, 1998
is $12,131. $ 30,000
Note payable to an individual, 9%
interest, past due, unsecured.
Unpaid and accrued interest at
December 31, 1998 is $9,024 36,799
Notes payable to six individuals,
various rates of Interest, past
due, unsecured 22,965
---------
Total for Unique Ideas, Inc. $ 89,764
---------
Total Consolidated Indebtedness $ 267,264
=========
The outstanding debt shown above has been outstanding since
December, 1996 when the Company ceased operations.
<PAGE>
UNIQUE FASHIONS, INC and SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997and 1998
NOTE E SUBSEQUENT EVENTS
Subsequent to December 31, 1998, management submitted an
offer to the remaining debenture holders to convert their
promissory notes into shares of Unique Fashions, Inc.'s common
stock. As of the date of the audit report, only two such
holders had accepted this offer. Their notes amount to $7,500
and will result in the issuance of 12,500 shares of common
stock.
Management is considering a strategy to reorganize by
spinning off Unique Products, Inc. leaving essentially a shell
parent corporation. A pro-forma condensed balance sheet of
Unique Fashions, Inc. should this course of action be adopted
would be as follows
Assets $ 0
Liabilities 190,056
Common stock 4,270
Paid in capital 1,196,745
Accumulated deficit (1,391,071)
Following consummation of the possible spinoff, management
then intends to actively pursue a target company for
acquisition that could enhance shareholder value through a
proven-track record of operations and the utilization of the
tax net operating loss carryforward. However, there are no
assurances that such a plan can or will be achieved.
NOTE F COMMON STOCK
The Company has 25,000,000 of authorized shares of common
stock at a par value of $0.001 per share.
NOTE G COMMITMENTS
There was no rent expense for 1997 or 1998, and there were no
outstanding lease commitments as of December 31, 1998.
<PAGE>
UNIQUE FASHIONS, INC and SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997 and 1998
NOTE H NON-CASH INVESTING AND FINANCING TRANSACTIONS
1997
Debentures converted to common stock $ 30,000
Note payable converted to common stock 7,500
The Company paid interest of $0, and $0 for the years ended
December 31, 1997 and 1998, respectively. Also, during these
same years, the Company did not pay any taxes based on income.
The acquisition of Unique Ideas, Inc. by the Company resulted
in the recognition of approximately $40,000 of goodwill which
is being amortized over 40 years.
NOTE I CONTINGENT LIABILITY
One of the Company's stockholders is an attorney who has
provided various forms of legal services over the past four
years. The unbilled amount for services rendered is
approximately $40,000 as of December 31, 1998. Management
expects to negotiate a settlement with this stockholder to
satisfy this contingent obligation by issuing shares of the
Company's stock.
<PAGE>
PART III
ITEMS 1 AND 2. INDEX TO EXHIBITS AND DESCRIPTION
Exhibit
Number Description
- ------- -----------------------------------------------------
2.0 Acquisition Agreement - Framing Systems, Inc.
2.1 Acquisition Agreement - Executive Assistance, Inc.
2.2 Acquisition Agreement - R&R Foods, Inc.
2.3 Acquisition Agreement - e-Data Alliance, Inc.
2.4 Divestiture Agreement - R&R Foods, Inc.
3.0 Articles of Incorporation
3.1 Articles of Amendment to the Articles of Incorporation
3.2 By-Laws
10.0 Employment Agreement-Robert W. Moehler
10.1 Employment Agreement-David H. Young
10.2 Letter of Advertising Credit
21.0 Subsidiaries of the Registrant
27.0 Financial Data Schedule
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act
of 1934, the registrant has caused this registration statement to
be signed on its behalf by the undersigned, thereunto duly
authorized.
Rhino Enterprises Group, Inc.
(Registrant)
Date: February 9, 2000 By: /s/ ROBERT W. MOEHLER
--------------------------------
Robert W. Moehler
President and duly
authorized officer
-66-
STOCK-FOR-STOCK AGREEMENT
REORGANIZATION AGREEMENT between Rhino Enterprises Group, Inc.,
a Nevada corporation (hereinafter referred to as "RHINO"), and
shareholders of Framing Systems, Inc., a Nevada corporation
(hereinafter referred to as "FRAMING").
For the Acquisition by RHINO of all the outstanding stock of
FRAMING, in exchange for stock of RHINO.
AGREEMENT, dated as of this 14th day of May, 1999, between
RHINO and all of the Shareholders of FRAMING (hereinafter
collectively referred to as the "FRAMING Shareholders").
WHEREAS, the FRAMING Shareholders own10,129,000 shares of common
stock, $.001 par value per share, of FRAMING, and which constitutes
all of the outstanding common stock of FRAMING, for a total of
10,129,000 issued and outstanding shares of common stock of
FRAMING.
WHEREAS, the FRAMING Shareholders own and have the right to
sell, transfer and exchange all of the shares for the purchase of
the capital stock of RHINO. RHINO hereby offers 405,160 shares of
its common stock to the FRAMING Shareholders for all of the
outstanding common stock of FRAMING. The FRAMING Shareholders wish
to make said exchange.
WHEREAS, the parties hereto intend that the securities exchange
described herein between RHINO and the Shareholders of FRAMING will
be tax free in accordance with the provisions of Section
368(a)(1)(B) of the Internal Revenue Code.
NOW THEREFORE, in consideration of the premises and of the
mutual covenants hereinafter set forth, the parties hereto have
agreed and by these present do hereby agree as follows:
1. Exchange of Securities. Subject to the terms and conditions
hereinafter set forth, at the time of the closing referred to in
Section 6 hereof (the "Closing Date"), RHINO will issue and
deliver, or cause to be issued and delivered to the FRAMING
Shareholders, in exchange for all of the issued and outstanding
shares of FRAMING, 405,160 shares of its common stock. The shares
of RHINO will be allocated as set forthon thge signature pages
entitled Shareholders of Framing Systems, Inc., attached hereto.
The shares of FRAMING Shareholders will be exchanged for shares in
RHINO on a one for fifty (1 for 25) basis.
2. Representations and Warranties by FRAMING and FRAMING
Shareholders. FRAMING and FRAMING Shareholders each represent and
warrant to RHINO, all of which representations and warranties shall
be true at the time of closing, and shall survive the closing for
a period of six (6) months from the date of closing, except as to
the warranties and representations set forth in subsection (i)
herein, which shall survive for a period of three (3) years from
the date of closing, and those set forth in subsection (l) herein,
which shall survive for a period of six (6) months from the date of
closing, or from the date when the accounts receivable may become
due and payable, whichever shall occur later, that:
(a) FRAMING is a corporation duly organized and validly
existing and in good standing under the laws of the State of Nevada
and has the corporate powers to own its property and carry on its
business as and where it is now being conducted. Copies of the
Certificate of Incorporation and the By-Laws of FRAMING, which have
heretofore been furnished by FRAMING Shareholders to RHINO, are
true and correct copies of said Certificate of Incorporation and
By-Laws including all amendments to the date hereof.
(b) The authorized capital stock of FRAMING consists of
25,000,000 shares of common stock, $.001 par value ("Common Stock
of FRAMING"), of which10,129,000 shares have been validly issued
and are now outstanding.
(c) FRAMING Shareholders have full power to exchange the shares
to purchase the capital stock of RHINO on behalf of themselves upon
the terms provided for in this Agreement, and said shares have been
duly and validly issued and are free and clear of any lien or other
encumbrance.
(d) From the date hereof, and until the date of closing, no
dividends or distributions of capital, surplus, or profits shall be
paid or declared by FRAMING in redemption of their outstanding
shares or otherwise, and except as described herein no additional
shares shall be issued by said corporation.
(e) Since the date hereof, FRAMING has not engaged in any
transaction other than transactions in the normal course of the
operations of their business, except as specifically authorized by
RHINO in writing.
(f) FRAMING is not involved in any pending or threatened
litigation which would materially affect its financial condition
disclosed to RHINO in writing.
(g) FRAMING has and will have on the Closing Date, good and
marketable title to all of its property and assets shown on
Schedule I, attached hereto, free and clear of any and all liens or
encumbrances or restrictions, except as shown on Schedule I,
attached hereto and except for taxes and assessments due and
payable after the Closing Date and easements or minor restrictions
with respect to its property which do not materially affect the
present use of such property.
(h) (1) The inventories of FRAMING as reflected in Schedule I,
furnished by FRAMING Shareholders to RHINO prior to the execution
hereof, are valued at book value.
(2) The inventory of FRAMING listed on the schedule referred to
in (h) (1) above is hereinafter collectively referred to as the
"Inventory." The Inventory is in good and usable condition.
(i) As of the date hereof, there are no accounts receivable of
FRAMING of a material nature, except for those accounts receivable
set forth in Schedule I, attached hereto.
(j) FRAMING does not now have, nor will it have on the Closing
Date, any long-term contracts ("long-term" being defined as more
than one year) except those set forth in Schedule I attached
hereto.
(k) FRAMING does not now have, nor will it have on the Closing
Date any pension plan, profit-sharing plan, or stock purchase plan
for any of its employees except those set forth in Schedule I,
attached hereto and certain options to proposed executive officers.
(l) FRAMING does not now have, nor will it have on the Closing
Date, any known liabilities or contingent liabilities other than
those disclosed in their financial statements dated May 12, 19999
attached hereto as Schedule II except in the ordinary course of
business or in connection with its proposed private offering.
3. Representations and Warranties by RHINO. RHINO represents
and warrants to the FRAMING Shareholders, all of which
representations and warranties shall be true at the time of
closing, and shall survive the closing for a period of six (6)
months from the date of closing, as follows:
(a) RHINO is a corporation duly organized and validly existing
and in good standing under the laws of the State of Nevada and has
the corporate power to own its properties and carry on its business
as now being conducted and has authorized capital stock consisting
of 20,000,000 shares of common stock, $.001 par value per share, of
which there are 1,209,799 shares presently outstanding.
(b) RHINO has the corporate power to execute and perform this
Agreement, and to deliver the stock required to be delivered to
FRAMING Shareholders hereunder.
(c) The execution and delivery of this Agreement, and the
issuance of the stock required to be delivered hereunder have been
duly authorized by all necessary corporate actions, and neither the
execution nor delivery of this Agreement, nor the issuance of the
stock, nor the performance, observance or compliance with the terms
and provisions of this Agreement will violate any provision of law,
any order of any court or other governmental agency, the
Certificate of Incorporation or By-Laws of RHINO or any indenture,
agreement or other instrument to which RHINO is a party, or by
which RHINO is bound, or by which any of its property is bound.
(d) The shares of Common Stock of RHINO deliverable pursuant
hereto will on delivery in accordance with the terms hereof, be
duly authorized, validly issued, and fully paid, and non-
assessable.
4. Conditions to the Obligations of RHINO. The obligations of
RHINO hereunder shall be subject to the conditions that:
(a) RHINO shall not have discovered any material error or
misstatement in any of the representations and warranties by the
FRAMING Shareholders herein, and all the terms and conditions of
this Agreement to be performed and complied with shall have been
performed and complied with.
(b) There shall have been no substantial adverse changes in the
conditions, financial, business otherwise of FRAMING from the date
of this Agreement, and until the date of closing, except for
changes resulting from those operations in the usual and ordinary
course of business, and between such dates the business and assets
of FRAMING shall not have been materially adversely affected as the
result of any fire, explosion, earthquake, flood, accident, strike,
lockout, combination of workmen, taking over of any such assets by
any governmental authorities, riot, activities of armed forces, or
acts of God or of the public enemies.
(c) RHINO shall upon request and at the time of closing,
receive an opinion of counsel to the effect that: (1) FRAMING is
duly organized and validly existing under the laws of the State of
Nevada and has the power and authority to own its properties and to
carry on its respective business wherever the same shall be located
and operated as of the Closing Date; and, (2) this Agreement has
been duly executed and delivered by FRAMING Shareholders and
constitutes a legal, valid and binding obligation of the FRAMING
Shareholders enforceable in accordance with its terms.
(d) FRAMING does not now have, nor will it have on the date of
closing, any known or unknown liabilities or contingent
liabilities, except as specifically set forth on Schedule II,
attached hereto.
5. Conditions to the Obligations of FRAMING Shareholders. The
obligations of the FRAMING Shareholders hereunder are subject to
the conditions that:
(a) FRAMING Shareholders shall not have discovered any material
error or misstatement in any of the representations and warranties
made by RHINO herein and all the terms and conditions of this
Agreement to be performed and complied with by RHINO shall have
been performed and complied with.
(b) The FRAMING Shareholders shall upon request, at the time of
closing, receive an opinion of counsel to the effect that: (1)
RHINO is a corporation duly organized and validly existing under
the laws of the State of Nevada, and has the power to own and
operate its properties wherever the same shall be located as of the
Closing Date; (2) the execution, delivery and performance of this
Agreement by RHINO has been duly authorized by all necessary
corporate action and constitutes a legal, valid and binding
obligation of RHINO, enforceable in accordance with its terms; (3)
the securities to be delivered to FRAMING Stockholders pursuant to
the terms of this Agreement has been validly issued, is fully paid
and non-assessable; (4) the exchange of the securities herein
contemplated does not require the registration of the RHINO
securities pursuant to any Federal law dealing with the issuance,
sale, transfer, and/or exchange of corporate securities; (5) that
RHINO is not under investigation by the SEC, the NASD or any state
securities commission; (6) that there are no known securities
violations; (7) all shares issued by RHINO have been validly issued
in accordance with Nevada or Federal law, are fully paid and non-
assessable; and (8) there are no outstanding options, rights,
warrants, conversion privileges or other agreements which would
require issuance of additional shares.
6. Closing Date. The closing shall take place on or before
June 1, 1999, or as soon thereafter as is practicable, at 2925 LBJ
Freeway, Suite 183; Dallas, TX 75231, or at such other time and
place as the parties hereto shall agree upon.
7. Actions at the Closing. At the closing, RHINO and FRAMING
Shareholders will each deliver, or cause to be delivered to the
other, the securities to be exchanged in accordance with Section I
of this Agreement and each party shall pay any and all Federal and
State taxes required to be paid in connection with the issuance and
the delivery of their own securities. All stock certificates shall
be in the name of the party to which the same are deliverable.
8. Conduct of Business, Board of Directors, etc. Between the
date hereof and the Closing Date, FRAMING will conduct its business
in the same manner in which it has heretofore been conducted and
the FRAMING Shareholders will not permit FRAMING to: (1) enter
into any contract, etc., other than in the ordinary course of
business; or (2) declare or make any distribution of any kind to
the stockholders of FRAMING, without first obtaining the written
consent of RHINO.
9. Access to the Properties and Books of FRAMING. The FRAMING
Shareholders hereby grant to RHINO, through their duly authorized
representatives and during normal business hours between the date
hereof and the Closing Date, the right of full and complete access
to the properties of FRAMING and full opportunity to examine their
books and records.
10. Miscellaneous
(a) This Agreement shall be controlled, construed and enforced
in accordance with the laws of the State of Nevada.
(b) Each of the Constituent Corporations shall bear and pay all
costs and expenses incurred by it or on its behalf in connection
with the consummation of this Agreement, including, without
limiting the generality of the foregoing, fees and expenses of
financial consultants, accountants and counsel and the cost of any
documentary stamps, sales and excise taxes which may be imposed
upon or be payable in respect to the transaction.
(c) At any time before or after the approval and adoption by
the respective stockholders of the Constituent Corporations, if
required, this Reorganization Agreement may be amended or
supplemented by additional written agreements, as may be determined
in the judgment of the respective Boards of Directors of the
Constituent Corporations to be necessary, desirable or expedient to
further the purpose of this Reorganization Agreement, to clarify
the intention of the parties, to add to or to modify the covenants,
terms or conditions contained herein, or otherwise to effectuate or
facilitate the consummation of the transaction contemplated hereby.
Any written agreement referred to in this paragraph shall be
validly and sufficiently authorized for the purposes of this
Reorganization Agreement if signed on behalf of FRAMING or RHINO,
as the case may be, by its Chairman of the Board, or its President.
(d) This Reorganization Agreement may be executed in any number
of counterparts and each counterpart hereof shall be deemed to be
an original instrument, but all such counterparts together shall
constitute but one Reorganization Agreement.
(e) This Agreement shall be binding upon and shall inure to the
benefit of the heirs, executors, administrators and assigns of the
FRAMING Shareholders and upon the successors and assigns of RHINO.
(f) All notices, requests, instructions, or other documents to
be given hereunder shall be in writing and sent by registered mail:
If to FRAMING Shareholders, then: Robert Moehler
2925 LBJ Freeway, Suite 283
Dallas, TX 75234
If to RHINO, then: David H. Carl
2925 LBJ Freeway, Suite 188
Dallas, TX 75234
The foregoing Reorganization Agreement, having been duly
approved or adopted by the Board of Directors, and duly approved or
adopted by the stockholders of the constituent corporation, as
required, in the manner provided by the laws of the State of
Nevada, the Chairman of the Board, the President or the Secretary
of said corporations, and the Shareholders of FRAMING do now
execute this Reorganization Agreement under the respective seals of
said corporation by the authority of the directors and stockholders
of each, as required, as the act, deed and agreement of each of
said corporations. This Stock-For-Stock Agreement may be signed in
two or more counterparts.
RHINO ENTERPRISES GROUP, INC.
By: /s/ DAVID H. CARL
-----------------------------
David H. Carl, President
FRAMING SYSTEMS, INC.
By: /s/ ROBERT W. MOEHLER
-----------------------------------
Robert W. Moehler, President
Acknowledgment of Execution of Agreement
By Officer of
Rhino Enterprises Group, Inc.
STATE OF TEXAS )
) ss.
COUNTY OF DALLAS )
BE IT REMEMBERED that on this 14th day of May, 1999, personally
came before me, a Notary Public in and for jurisdiction aforesaid,
David H. Carl, President of Rhino Enterprises Group, Inc., a Nevada
corporation, and one of the corporations described in and which
executed the foregoing Agreement of Reorganization, known to me
personally to be such, and he, the said, David H. Carl, as such
President, duly executed said Agreement of Reorganization before me
and acknowledged said Agreement of Reorganization are in the
handwriting of said President of Rhino Enterprises Group, Inc..
IN WITNESS WHEREOF, I have hereunto set my hand and seal of
office the day and year aforesaid.
/s/ LINDA S. HERRINGTON
----------------------------------
Notary Public
Acknowledgment of Execution of Agreement
By Officer of
Framing Systems, Inc.
STATE OF TEXAS )
) ss.
COUNTY OF DALLAS )
BE IT REMEMBERED that on this 14th day of May, 1999,
personally came before me, a Notary Public in and for jurisdiction
aforesaid, Robert W. Moehler, President of Framing Systems, Inc.,
a Nevada corporation, and one of the corporations described in and
which executed the foregoing Agreement of Reorganization, known to
me personally to be such, and he, the said, Robert W. Moehler, as
such President, duly executed said Agreement of Reorganization
before me and acknowledged said Agreement of Reorganization are in
the handwriting of said President of Framing Systems, Inc.
IN WITNESS WHEREOF, I have hereunto set my hand and seal of
office the day and year aforesaid.
/s/ LINDA S. HERRINGTON
-------------------------------------
Notary Public
<PAGE>
SHAREHOLDERS OF FRAMING SYSTEMS, INC.
Number of Shares Number of Shares
Name In Framing To be issued-Rhino
- ----- ----------------- ------------------
- ----------------------- 50,000 2,000
Barry Bendett
/s/ ISRAEL BURDEI
- ----------------------- 50,000 2,000
Israel Burdei
/s/ KEVIN CANNON AND CATHERINE CANNON
- ----------------------- 50,000 2,000
Kevin and Catherine Cannon
/s/ MARTHA DAVIS
- ----------------------- 2,000 80
Martha Davis
/s/ JAMES DEMARCO
- ----------------------- 200,000 8,000
James DeMarco
/s/ RONALD DRAKE
- ----------------------- 10,000 400
Ronald Drake
- ----------------------- 5,000 200
Wanda Drake
/s/ DAVID L. HIRSCH
- ----------------------- 250,000 10,000
David L. Hirsch
/s/ PETER J. JOSEPH JR.
- ----------------------- 100,000 4,000
Peter J. Joseph, Jr.
/s/ LARRY JULIA
- ----------------------- 150,000 6,000
Larry Julia
/s/ SOFIA KABAK-SHARAVNER
- ----------------------- 25,000 1,000
Sofia Kabak-Sharavner
/s/ RICHARD KANDEL
- ----------------------- 50,000 2,000
Richard Kandel
/s/ ALAN D. AND STEPHANIE KANE
- ----------------------- 100,000 4,000
Alan D. and Stephanie Kane
/s/ MARK LARSON
- ----------------------- 5,000 200
Mark Larson
/s/ WILLIAM LAVIA
- ----------------------- 50,000 2,000
William LaVia
/s/ RICHARD Z. LIPSKY, M.D.
- ----------------------- 82,000 3,280
Richard Z. Lipsky, M.D.
/s/ MARY MAGOUIRK
- ----------------------- 10,000 400
Mary Magouirk
/s/ NICHOLAS MAISTO
- ----------------------- 100,000 4,000
Nicholas Maisto
/s/ JOSEPH D. MCKEOWN
- ----------------------- 70,000 2,800
Joseph D. McKeown
/s/ DANIEL V. MCLEOD
- ----------------------- 15,000 600
Daniel V. McLeod
/s/ STUART MILSTEIN
- ----------------------- 100,000 4,000
Stuart Milstein
/s/ DONNA MINTZ
- ----------------------- 100,000 4,000
Donna Mintz
/s/ BRETT A. MULE
- ----------------------- 100,000 4,000
Brett A. Mule
- ----------------------- 50,000 2,000
Michael and Jeneen Murphy
/s/ LAWRENCE AND MARGARET NOVACK
- ----------------------- 250,000 10,000
Lawrence and Margaret Novack
- ----------------------- 30,000 1,200
Maryellen Reinhardt
/s/ ROSA RUDNET
- ----------------------- 50,000 2,000
Rosa Rudnet
- ----------------------- 50,000 2,000
Tracy Schauer
/s/ WILLIAM J. SCHNEIDER
- ----------------------- 50,000 2,000
William J. Schneider
/s/ LEONARD SCHOEN JR.
- ----------------------- 100,000 4,000
Leonard Schoen, Jr.
/s/ SOCRATES SKIADAS
- ----------------------- 200,000 8,000
Socrates Skiadas
/s/ KIMBERLY SLIMAK
- ----------------------- 100,000 4,000
Kimberly Slimak
- ----------------------- 50,000 2,000
Michael Stankiewicz
/s/ GLENN S. AND STUART G. STANLEY
- ----------------------- 400,000 16,000
Glenn S. and Stuart G. Stanley
/s/ IRINA STAROBINSKY
- ----------------------- 40,000 1,600
Irina Starobinsky
/s/ EDWARD A. THORNTON
- ----------------------- 100,000 4,000
Edward A. Thornton
/s/ JAMES TREPETA
- ----------------------- 200,000 8,000
James Trepeta
/s/ M.A. TREPETA
- ----------------------- 350,000 14,000
M.A. Trepeta
/s/ C.F. WALKER
- ----------------------- 20,000 800
C.F. WALKER
/s/ RONALD J. WALKER
- ----------------------- 15,000 600
Ronald J. Walker
/s/ GREGORY R. WEATERBY
- ----------------------- 100,000 4,000
Gregory R. Weatherby
/s/ GRACE C. WONG
- ----------------------- 50,000 2,000
Grace C. Wong
BCLM INVESTMENT CORPORATION 3,000,000 120,000
By:
Its:
DLJ CONSULTING, INC. 100,000 4,000
By: DEAN JULIA
Its: PRESIDENT
ETHEL C. DELK TRUST 50,000 2,000
By: ETHEL C. DELK
Its: TRUSTEE
FEDERATED TAX CONSULTANTS 50,000 2,000
By: PAUL ZANN
Its: PRESIDENT
MDT CONSULTING INC. 100,000 4,000
By: MICHAEL TREPETA
Its: PRESIDENT
MK RESOURCES, INC. 50,000 2,000
By: DENNIS EVANS
Its: PRESIDENT
SAMAHA FAMILY LIMITED PARTNERSHIP 100,000 4,000
By: VICTOR SAMAHA
Its:
SJN CONSULTING INC. 100,000 4,000
By: SCOTT NOVACK
Its: PRESIDENT
THE STRATEIA GROUP, INC. 2,700,000 108,000
By: JOE H. GLOVER
Its: PRESIDENT
REORGANIZATION AGREEMENT
THIS REORGANIZATION AGREEMENT (the "Agreement") is made and
entered into as of the 11th day of November, 1999, by and among
Rhino Enterprises Group, Inc., a Nevada corporation (hereinafter
referred to as "RHINO"), Executive Assistance, Inc., a Nevada
corporation ("EXECUTIVE") and shareholders (hereinafter
collectively referred to as the "EXECUTIVE Shareholders") of
EXECUTIVE.
RECITALS
WHEREAS, the EXECUTIVE Shareholders collectively own
4,000,000 shares of common stock, $.001 par value per share, of
EXECUTIVE, which constitutes all of the issued and outstanding
common stock of EXECUTIVE;
WHEREAS, the EXECUTIVE Shareholders wish to exchange all of
their collective EXECUTIVE common stock for certain common stock
of
RHINO;
WHEREAS, the parties hereto intend that the stock exchange
described herein between RHINO and the Shareholders of EXECUTIVE
are intended to be tax deferred in accordance with the provisions
of Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as
amended.
NOW THEREFORE, in consideration of the premises and of the
mutual covenants hereinafter set forth, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto
have agreed and by these present do hereby agree as follows:
1. Exchange of Securities. Subject to the terms and
conditions hereinafter set forth, at the time of the closing
referred to in Section 6 hereof (the "Closing Date"), RHINO will
issue and deliver, or cause to be issued and delivered, to the
EXECUTIVE Shareholders up to 80,000 shares of its common stock,
in exchange for all of the issued and outstanding shares of
EXECUTIVE. The shares of RHINO will be allocated to the
EXECUTIVE Shareholders as set forth in Schedule I, attached
hereto. The shares of EXECUTIVE Shareholders will be exchanged
for shares in RHINO on a one (1) share of RHINO stock for fifty
(50) shares of EXECUTIVE stock basis.
2. Representations and Warranties by EXECUTIVE and EXECUTIVE
Shareholders. EXECUTIVE and EXECUTIVE Shareholders each jointly
and severally represent and warrant to RHINO, all of which
representations and warranties shall be true and correct at the
time of Closing and shall survive the Closing Date for a period
Page 1
<PAGE>
of six (6) months from the Closing Date, except as to the
warranties and representations set forth in subsection (h)
herein, which shall survive for a period of three (3) years from
the Closing Date, and those set forth in subsection (i) herein,
which shall survive for a period of nine (9) months from the
Closing Date, or from the date when the accounts receivable may
become due and payable (whichever shall occur later) that:
(a) EXECUTIVE is a corporation duly organized and validly
existing and in good standing under the laws of the State of
Nevada and has the corporate powers to own its property and carry
on its business as and where it is now being conducted. Copies of
the Certificate of Incorporation and the By-Laws of EXECUTIVE,
which have heretofore been furnished by EXECUTIVE to RHINO, are
true and correct copies of said Certificate of Incorporation and
By-Laws, including all amendments to the date hereof;
(b) The authorized capital stock of EXECUTIVE consists of (i)
20,000,000 shares of common stock, $.001 par value ("Common Stock
of EXECUTIVE"), of which 4,000,000 shares have been validly
issued and are now outstanding, and (ii) 5,000,000 shares of
preferred stock, $.001 par value, of which no shares have been
validly issued and are now outstanding;
(c) EXECUTIVE Shareholders have full power to exchange the
shares to purchase the capital stock of RHINO on behalf of
themselves upon the terms provided for in this Agreement, and
said shares have been duly and validly issued and are free and
clear of any lien or other encumbrance;
(d) From the date hereof, and until the date of closing, no
dividends or distributions of capital, surplus, or profits shall
be paid or declared by EXECUTIVE in redemption of the outstanding
shares of the EXECUTIVE Shareholders or otherwise, and except as
described herein no additional shares shall be issued by said
corporation;
(e) Since the date hereof, EXECUTIVE has not engaged in any
transaction other than transactions in the normal course of the
operations of their business, except as specifically authorized
by RHINO in writing;
(f) EXECUTIVE is not involved in any pending or threatened
litigation which would materially affect its financial condition,
except as specifically disclosed to RHINO in writing;
(g) EXECUTIVE has and will have on the Closing Date, good and
marketable title to all of its property and assets shown on
Schedule II, attached hereto, free and clear of any and all liens
or encumbrances or restrictions, except as shown on Schedule II,
attached hereto, and except for taxes and assessments due and
payable after the Closing Date and easements or minor
restrictions with respect to its property which do not materially
affect the present use of such property;
(h) As of the date hereof, there are no accounts receivable
of EXECUTIVE of
Page 2
<PAGE>
a material nature, except for those accounts receivable set forth
in Schedule II, attached hereto; and
(i) EXECUTIVE does not now have, nor will it have on the
Closing Date, any known liabilities or contingent liabilities
other than those disclosed in their financial statements dated
October 30, 1999 attached hereto as Schedule III except in the
ordinary course of business or in connection with its proposed
private offering.
3. Representations and Warranties by RHINO. RHINO represents
and warrants to the EXECUTIVE Shareholders, all of which
representations and warranties shall be true at the time of
closing, and shall survive the closing for a period of six (6)
months from the date of closing, as follows:
(a) RHINO is a corporation duly organized and validly
existing and in good standing under the laws of the State of
Nevada and has the corporate power to own its properties and
carry on its business as now being conducted and has authorized
capital stock consisting of 20,000,000 shares of common stock,
$.001 par value per share, of which there are 1,208,549 shares
presently issued and outstanding.
(b) RHINO has the corporate power to execute and perform this
Agreement, and to deliver the stock required to be delivered to
EXECUTIVE Shareholders hereunder.
(c) The execution and delivery of this Agreement, and the
issuance of the stock required to be delivered hereunder have
been duly authorized by all necessary corporate actions, and
neither the execution nor delivery of this Agreement, nor the
issuance of the stock, nor the performance, observance or
compliance with the terms and provisions of this Agreement will
violate any provision of law, any order of any court or other
governmental agency, the Certificate of Incorporation or By-Laws
of RHINO or any indenture, agreement or other instrument to which
RHINO is a party, or by which RHINO is bound, or by which any of
its property is bound.
(d) The shares of Common Stock of RHINO deliverable pursuant
hereto will on delivery in accordance with the terms hereof, be
duly authorized, validly issued, and fully paid, and non-
assessable.
4. Conditions to the Obligations of RHINO. The obligations
of
RHINO hereunder shall be subject to the conditions that:
(a) RHINO shall not have discovered any material error or
misstatement in any of the representations and warranties by the
EXECUTIVE Shareholders herein, and all the terms and conditions
of this Agreement to be performed and complied with shall have
been performed and complied with.
Page 3
<PAGE>
(b) There shall have been no substantial adverse changes in
the conditions, financial, business or otherwise, of EXECUTIVE
from the date of this Agreement, and until the date of closing,
except for changes resulting from those operations in the usual
and ordinary course of business, and between such dates the
business and assets of EXECUTIVE shall not have been materially
adversely affected as the result of any fire, explosion,
earthquake, flood, accident, strike, lockout, combination of
workmen, taking over of any such assets by any governmental
authorities, riot, activities of armed forces, or acts of God or
of the public enemies.
(c) RHINO shall, upon request and at the time of closing,
receive an opinion of counsel to the effect that: (1) EXECUTIVE
is duly organized and validly existing under the laws of the
State of Nevada and has the power and authority to own its
properties and to carry on its respective business wherever the
same shall be located and operated as of the Closing Date; and,
(2) this Agreement has been duly executed and delivered by
EXECUTIVE Shareholders and constitutes a legal, valid and binding
obligation of the EXECUTIVE Shareholders enforceable in
accordance with its terms.
(d) EXECUTIVE does not now have, nor will it have on the date
of closing, any known or unknown liabilities or contingent
liabilities, except as specifically set forth on Schedule III,
attached hereto.
5. Conditions to the Obligations of EXECUTIVE Shareholders.
The obligations of the EXECUTIVE Shareholders hereunder are
subject to the conditions that:
(a) EXECUTIVE Shareholders shall not have discovered any
material error or misstatement in any of the representations and
warranties made by RHINO herein and all the terms and conditions
of this Agreement to be performed and complied with by RHINO
shall have been performed and complied with.
(b) The EXECUTIVE Shareholders shall upon request, at the
time of closing, receive an opinion of counsel to the effect
that: (1) RHINO is a corporation duly organized and validly
existing under the laws of the State of Nevada, and has the power
to own and operate its properties wherever the same shall be
located as of the Closing Date; (2) the execution, delivery and
performance of this Agreement by RHINO has been duly authorized
by all necessary corporate action and constitutes a legal, valid
and binding obligation of RHINO, enforceable in accordance with
its terms; (3) the securities to be delivered to EXECUTIVE
Stockholders pursuant to the terms of this Agreement have been
validly issued, are fully paid and non-assessable; (4) the
exchange of the securities herein contemplated does not require
the registration of the RHINO securities pursuant to any Federal
law dealing with the issuance, sale, transfer, and/or exchange of
corporate securities; (5) that RHINO is not under investigation
by the SEC, the NASD or any state securities commission; (6) that
there are no known securities violations; (7) all shares issued
by RHINO have been validly issued in accordance with Nevada or
Federal law, are fully paid and non-assessable; and (8) there
Page 4
<PAGE>
are no outstanding options, rights, warrants, conversion
privileges or other agreements which would require issuance of
additional shares.
6. Closing Date. The closing shall take place on or before
November 11, 1999, at 2:00 pm, or as soon thereafter as is
practicable, at the offices of RHINO, 2925 LBJ Freeway, Suite
188, Dallas, Texas 75234, or at such other time and place as the
parties hereto shall agree upon.
7. Actions at the Closing. At the closing, RHINO, EXECUTIVE
and EXECUTIVE Shareholders will each deliver, or cause to be
delivered to the other, the securities to be exchanged in
accordance with Section I of this Agreement and each party shall
pay any and all Federal and State taxes required to be paid in
connection with the issuance and the delivery of their own
securities. All stock certificates shall be in the name of the
party to which the same are deliverable.
8. Conduct of Business, Board of Directors, etc. Between the
date hereof and the Closing Date, EXECUTIVE will conduct its
business in the same manner in which it has heretofore been
conducted and the EXECUTIVE Shareholders will not permit
EXECUTIVE to: (1) enter into any contract, etc., other than in
the ordinary course of business; or (2) declare or make any
distribution of any kind to the stockholders of EXECUTIVE,
without first obtaining the written consent of RHINO.
9. Access to the Properties and Books of EXECUTIVE. The
EXECUTIVE Shareholders hereby grant to RHINO, through their duly
authorized representatives and during normal business hours
between the date hereof and the Closing Date, the right of full
and complete access to the properties of EXECUTIVE and full
opportunity to examine their books and records.
10. Miscellaneous
(a) This Agreement shall be controlled, construed and
enforced in accordance with the laws of the State of Texas.
(b) Each of the Constituent Corporations shall bear and pay
all costs and expenses incurred by it or on its behalf in
connection with the consummation of this Agreement, including,
without limiting the generality of the foregoing, fees and
expenses of financial consultants, accountants and counsel and
the cost of any documentary stamps, sales and excise taxes which
may be imposed upon or be payable in respect to the transaction.
(c) At any time before or after the approval and adoption by
the respective stockholders of the Constituent Corporations, if
required, this Reorganization Agreement may be amended or
supplemented by additional written agreements, as may be
determined in the judgment of the respective Boards of Directors
of the Constituent Corporations to be necessary, desirable or
expedient to further the purpose of this Reorganization
Agreement, to clarify the intention of the parties, to add to or
to modify the covenants, terms or conditions contained herein, or
otherwise to effectuate or facilitate the consummation of the
transaction contemplated hereby. Any written agreement referred
to in this paragraph shall be validly and sufficiently authorized
for the purposes of this Reorganization Agreement if
Page 5
<PAGE>
signed on behalf of EXECUTIVE or RHINO, as the case may be, by
its Chairman of the Board, or its President.
(d) This Reorganization Agreement may be executed in any
number of counterparts and each counterpart hereof shall be
deemed to be an original instrument, but all such counterparts
together shall constitute but one Reorganization Agreement.
(e) This Agreement shall be binding upon and shall inure to
the benefit of the heirs, executors, administrators and assigns
of the EXECUTIVE Shareholders and upon the successors and assigns
of RHINO.
(f) All notices, requests, instructions, or other documents
to be given hereunder shall be in writing and sent by registered
mail:
If to EXECUTIVE Shareholders, then:
c/o Executive Assistance, Inc.
2925 LBJ Freeway, Suite 188
Dallas, Texas 75234
If to RHINO, then: 2925 LBJ Freeway, Suite 188
Dallas, Texas 75234
With a copy to: Bellinger & DeWolf, LLP
750 N. St. Paul, Suite 900
Dallas, Texas 75201
Attn: Glenn Bellinger
Page 6
<PAGE>
The foregoing Reorganization Agreement, having been duly
approved or adopted by the Board of Directors, and duly approved
or adopted by the stockholders of the constituent corporation, as
required, in the manner provided by the laws of the State of
Nevada, the Chairman of the Board, the President or the Secretary
of said corporations, and the Shareholders of EXECUTIVE do now
execute this Reorganization Agreement under the respective seals
of said corporation by the authority of the directors and
stockholders of each, as required, as the act, deed and agreement
of each of said corporations. This Stock-For-Stock Agreement may
be signed in two or more counterparts.
RHINO ENTERPRISES GROUP, INC.
By:/s/DAVID H YOUNG
----------------------------
David H. Young, Chief Operating Officer
EXECUTIVE ASSISTANCE, INC.
By:/s/ MARY J. MAGOUIRK
--------------------------
Mary J. Magouirk, President
Page 7
<PAGE>
SHAREHOLDERS OF EXECUTIVE ASSISTANCE, INC.
Name Number of Shares
/s/MARY J. MAGOUIRK 675,000
- ----------------------
Mary J. Magouirk
/s/KATHY A. CRABB 325,000
- ----------------------
Kathy A. Crabb
MFC Group, Inc. 3,000,000
By:/s/ROBERT W. MOEHLER
- ------------------------
Robert W. Moehler, President
Page 8
<PAGE>
Acknowledgment of Execution of Agreement
By Officer of
Rhino Enterprises Group, Inc.
STATE OF TEXAS )
) ss.
COUNTY OF DALLAS )
BE IT REMEMBERED that on this 17TH day of November, 1999,
personally came before me, a Notary Public in and for
jurisdiction aforesaid, David H. Young, Chief Operating Officer
of Rhino Enterprises Group, Inc., a Nevada corporation, and one
of the corporations described in and which executed the foregoing
Agreement of Reorganization, known to me personally to be such,
and he, the said, David H. Young, as such Chief Operating
Officer, duly executed said Agreement of Reorganization before me
and acknowledged said Agreement of Reorganization is in the
handwriting of said Chief Operating Officer of Rhino Enterprises
Group, Inc.
IN WITNESS WHEREOF, I have hereunto set my hand and seal of
office the day and year aforesaid.
/s/LINDA S. HERRINGTON
-----------------------
Notary Public
Page 9
<PAGE>
Acknowledgment of Execution of Agreement
By Officer of
Executive Assistance, Inc.
STATE OF TEXAS )
) ss.
COUNTY OF DALLAS )
BE IT REMEMBERED that on this 17th day of November, 1999,
personally came before me, a Notary Public in and for
jurisdiction aforesaid, Mary J. Magouirk, President of Executive
Assistance, Inc., a Nevada corporation, and one of the
corporations described in and which executed the foregoing
Agreement of Reorganization, known to me personally to be such,
and she, the said, Mary J. Magouirk, as such President, duly
executed said Agreement of Reorganization before me and
acknowledged said Agreement of Reorganization is in the
handwriting of said President of Executive Assistance, Inc.
IN WITNESS WHEREOF, I have hereunto set my hand and seal of
office the day and year aforesaid.
/s/ LINDA S. HERRINGTON
-----------------------
Notary Public
Page 10
<PAGE>
Acknowledgment of Execution of Agreement
By Shareholder of
Executive Assistance, Inc.
STATE OF TEXAS )
) ss.
COUNTY OF DALLAS )
BE IT REMEMBERED that on this 17TH day of November, 1999,
personally came before me, a Notary Public in and for the
jurisdiction aforesaid, Mary J. Magouirk, a shareholder of
Executive Assistance, Inc., a corporation of the State of Nevada,
known to me personally to be such, and she, the said, Mary J.
Magouirk, as a shareholder of Executive Assistance, Inc., duly
executed the attached Reorganization Agreement between Rhino
Enterprises Group, Inc., a Nevada corporation, and Executive
Assistance, Inc., a Nevada corporation, before me and
acknowledged said Reorganization Agreement to be the act, deed
and agreement between themselves, as shareholders of Executive
Assistance, Inc., and Rhino Enterprises Group, Inc., and the
signature of Mary J. Magouirk, to said foregoing Reorganization
Agreement is in the handwriting of Mary J. Magouirk, a
shareholder of Executive Assistance, Inc.
IN WITNESS WHEREOF, I have hereunto set my hand and seal of
office the day and year aforesaid.
/s/ LINDA S. HERRINGTON
--------------------------
Notary Public
Page 11
<PAGE>
Acknowledgment of Execution of Agreement
By Shareholder of
Executive Assistance, Inc.
STATE OF TEXAS )
) ss.
COUNTY OF DALLAS )
BE IT REMEMBERED that on this 17th day of November, 1999,
personally came before me, a Notary Public in and for the
jurisdiction aforesaid, Kathy Crabb, a shareholder of Executive
Assistance, Inc., a corporation of the State of Nevada, known to
me personally to be such, and she, the said, Kathy Crabb , as a
shareholder of Executive Assistance, Inc., duly executed the
attached Reorganization Agreement between Rhino Enterprises
Group, Inc., a Nevada corporation, and Executive Assistance,
Inc., a Nevada corporation, before me and acknowledged said
Reorganization Agreement to be the act, deed and agreement
between themselves, as shareholders of Executive Assistance,
Inc., and Rhino Enterprises Group, Inc., and the signature of
Kathy Crabb, to said foregoing Reorganization Agreement is in the
handwriting of Kathy Crabb, a shareholder of Executive
Assistance, Inc.
IN WITNESS WHEREOF, I have hereunto set my hand and seal of
office the day and year aforesaid.
/s/ LINDA S. HERRINGTON
------------------------
Notary Public
Page 12
<PAGE>
Acknowledgment of Execution of Agreement
By Shareholder of
Executive Assistance, Inc.
STATE OF TEXAS )
) ss.
COUNTY OF DALLAS )
BE IT REMEMBERED that on this 17th day of November, 1999,
personally came before me, a Notary Public in and for the
jurisdiction aforesaid, Robert W. Moehler, President of MFC
Group, Inc., a shareholder of Executive Assistance, Inc., a
corporation of the State of Nevada, known to me personally to be
such, and he, the said, Robert W. Moehler, President of MFC
Group, Inc., as a shareholder of Executive Assistance, Inc., duly
executed the attached Reorganization Agreement between Rhino
Enterprises Group, Inc., a Nevada corporation, and Executive
Assistance, Inc., a Nevada corporation, before me and
acknowledged said Reorganization Agreement to be the act, deed
and agreement between themselves, as shareholders of Executive
Assistance, Inc., and Rhino Enterprises Group, Inc., and the
signature of Robert W. Moehler, to said foregoing Reorganization
Agreement is in the handwriting of Robert W. Moehler, President
of MFC Group, Inc., a shareholder of Executive Assistance, Inc.
IN WITNESS WHEREOF, I have hereunto set my hand and seal of
office the day and year aforesaid.
/s/LINDA S. HERRINGTON
---------------------
Notary Public
Page 13
STOCK PURCHASE AGREEMENT
by and among
R&R FOODS, INC.,
a Texas corporation
and
THE INDIVIDUAL AND CORPORATION SIGNING THIS AGREEMENT
Dated to be effective as of November 10, 1999
<PAGE>
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made and
entered to be effective as of the 10th day of November, 1999, by and
among R&R FOODS, INC., a Texas corporation ("R&R"), ROBERT
CENTENO("Centeno") and RHINO ENTERPRISES GROUP, INC., a Nevada
corporation ("Rhino").
WHEREAS, Centeno is currently the owner of One Thousand
(1,000) shares of the common stock of R&R, which constitutes Fifty
Percent (50%) of the issued and outstanding shares of the common
stock of R&R; and
WHEREAS, the parties have reached an understanding with
respect to the sale by Centeno and the purchase by Rhino of all
Centeno's right, title and interest in and to all of his issued and
outstanding shares of the common stock of R&R.
NOW, THEREFORE, in consideration of the mutual covenants
and agreements hereinafter set forth, and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties mutually covenant and agree as follows:
1. Purchase and Sale of Stock.
Purchase of Shares. Subject to the terms and conditions of
this Agreement, on the Closing Date Centeno shall sell to Rhino,
and Rhino shall purchase from Centeno, Centeno's One Thousand
(1,000) shares of common stock (the "R&R Common Shares") of R&R,
free and clear of all obligations, liens, security interests or
encumbrances of every type and description.
(b) Payment for Purchased Stock. Rhino shall pay to
Centeno a cash payment (the "Stock Purchase Price") as follows:
The sum of Forty-Six Thousand and No/100 Dollars ($46,000.00)
shall be due at Closing; provided, however, that Centeno
acknowledges receipt of the Purchase Price from Digital Information
& Virtual Access, Inc., a Nevada corporation ("DIVA"), on behalf
of Rhino.
(c) Closing. The Closing Date shall be November 10,
1999, or such other date as R&R, Centeno and Rhino may mutually
agree upon in writing. The place of Closing shall be at the
offices of Rhino, or such other location that the parties hereto
may agree upon in writing.
2. Representations and Warranties of Centeno and R&R.
Centeno and R&R represent and warrant to Rhino as follows:
(a) Organization and Standing of R&R. To the best of
Centeno's knowledge, R&R is a corporation duly organized, validly
existing and in good standing under the laws of the State of Texas,
and is qualified to do business in all states where it does
business.
<PAGE>
(b) Capitalization. R&R's entire authorized capital
consists of One Hundred Thousand (100,000) common shares, One/Tenth
Dollar ($.10) par value, of which immediately prior to the Closing
of the transaction contemplated in Paragraph 1(a) hereof, Two
Thousand (2000) shares shall be issued and outstanding. All of
the outstanding common shares are fully paid and nonassessable. At
the Closing, there will be no agreements, arrangements or
understandings to which Centeno or R&R are parties or by which they
are bound with respect to the acquisition, disposition, or voting
of any capital stock of R&R, other than this Agreement.
(c) Stock Ownership. Centeno is the owner of the
collective number of R&R Common Shares set forth above in Section
1(a), and can deliver sufficient common shares to close the
proposed exchange and redemption, free and clear of any liens,
claims, pledges or encumbrances.
(d) Authority of Centeno and R&R. The execution of this
Agreement by Centeno and R&R and the consummation by Centeno and
R&R of the transactions contemplated in this Agreement have been
duly authorized and approved by all necessary corporate action,
including any requisite shareholder approval, and these
authorizations have not been amended or revoked. R&R and Centeno
have the power and requisite authority to enter into this Agreement
and consummate the transaction contemplated by this Agreement.
This Agreement has been duly executed and delivered and constitutes
the valid and binding obligation of R&R and Centeno, enforceable
against them in accordance with its terms.
(e) Disclosure. No representation or warranty made by
either Centeno or R&R in this Agreement or in any writing,
certificate or financial statement, furnished or to be furnished in
connection with the transaction contemplated in this Agreement,
contains or will contain any misstatement of a material fact or
omit to state a material fact necessary to make the statement
contained herein not misleading.
(f) Claims. As of the date hereof Centeno has no claims
against Rhino or R&R which are not reflected in the Stock Purchase
Price hereunder. In this regard, Centeno hereby waives any and all
claims, causes, causes of action, whether in contract or in tort,
whether known or unknown, of any nature whatsoever, now existing or
hereafter arising, against Rhino and R&R.
3. Conditions to Rhino's Obligations. All obligations of
Rhino to close under this Agreement are subject to the following
conditions (which may be waived only at Rhino's option) existing
on the Closing Date or such other date as the context may require.
(a) Representations and Warranties. Each of Centeno's and
R&R's representations and warranties in this Agreement shall be
true at the Closing Date as though such representations and
warranties were made and as of that date.
<PAGE>
(b) Operations. From the date of this Agreement to the
Closing Date, R&R's business, properties and assets shall have been
operated and conducted in the normal course of business.
4. Covenants of Centeno and Rhino. The parties hereby
covenant to each other as follows:
(a) As of the Closing Date, Centeno and Rhino shall have
duly executed and delivered or shall simultaneously therewith duly
execute and deliver all other instruments or documents contemplated
herein, provided all of the terms and conditions contained therein
have been performed and fulfilled.
(b) As of the Closing Date, R&R and Rhino shall cause the
appropriate parties to execute and deliver all other instruments or
documents contemplated herein, provided all of the terms and
conditions contained therein have been performed and fulfilled.
5. Deliveries at Closing and Post-Closing Deliveries.
(a) Transfer Documents. At the Closing on the Closing Date,
Centeno shall execute, acknowledge and deliver to Rhino and/or R&R,
as applicable, stock powers, one or more stock certificates and
other documents of transfer sufficient to transfer and assign to
Rhino all right, title and interest in and to the R&R Common
Shares.
(b) Cash Purchase Price. At or before the Closing on the
Closing Date, Rhino or its designee DIVA shall pay the Stock
Purchase Price, as set forth in Section 1(b) (i) above to Centeno
in cash or ready funds.
(c) Resignation. At the Closing on the Closing Date,
Centeno shall resign as a director, officer and an employee of
R&R.
(d) Additional Documents. Each of the parties hereto upon
request of the other or their respective counsel will at the
Closing Date, and from time to time thereafter, execute and deliver
to each other all such instruments and documents of further
assurance, conveyance, confirmation of title, or otherwise, and
will do any and all such acts and things as may reasonably be
required to carry out their respective obligations under this
Agreement.
6. General.
(a) Actions After the Closing. After the date of Closing,
the parties shall execute and deliver such other and further
instructions and perform such other and further acts as may
reasonably be required fully to consummate the transactions
contemplated hereby.
(b) Brokerage. The parties hereby represent and warrant to
each other that they have not contracted with any broker, finder or
other party in connection with this transaction, and they have not
taken any action which will result in any broker's, finder's or
other fees <PAGE> being duly payable to any party with respect to
the transaction contemplated hereby. Each party hereby agrees to
indemnify and hold the other parties harmless from any loss,
liability, damage, costs or expenses (including reasonable
attorneys' fees) resulting to the other parties by reason of the
breach of the representation and warranty made by such party
herein.
(c) Execution of Counterparts. For the convenience of the
parties, this Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same document.
(d) Notices. All notices which are required or may be
given pursuant to the terms of this Agreement shall be in writing
and shall be sufficient in all respects if delivered personally or
by registered or certified mail or by recognized courier, postage
prepaid, as follows:
If to R&R to:
R&R Foods, Inc.
1301 North Collins
Arlington, Texas 76011
Attn: Richard Bedford, President
If to Centeno to:
Robert Centeno
7716 Watson
Plano, TX 75025
If to Rhino to:
Rhino Enterprises Group, Inc.
2925 LBJ Freeway, Suite 188
Dallas, Texas 75234
Attn: Robert Moehler, President
with a copy to:
Bellinger & DeWolf, L.L.P.
750 North St. Paul, Suite 900
Dallas, Texas 75201
Attn: H. Len Musgrove, Esq.
(e) Assignment, Successors and Assigns. This Agreement
shall be binding upon the parties hereto, their heirs, personal
representatives, successors and assigns.
<PAGE>
(f) Applicable Laws. This Agreement shall be construed and
governed by the laws of the State of Texas. All parties hereto
consent to the jurisdiction of the District Courts of the State of
Texas and acknowledges that proper venue for any dispute under this
Agreement shall be Dallas County, Texas.
(g) Confidential Information/Press Release. Centeno, R&R
and Rhino and their respective employees and agents shall not
disclose to any other person any information including, without
limitation, financial and operational information, procedures or
techniques, sales methods and customer or potential customer lists
learned by them during the course of any examination called for or
conducted by them pursuant to this Agreement and treated as
confidential by Centeno, R&R and Rhino, and if the transaction
contemplated by this Agreement is not consummated, neither Rhino,
Centeno nor R&R shall disclose, or use information so obtained in
its own business. No press release may be made by any prty hereto
without the prior written consent of Rhino.
(h) Entire Agreement. Except for the other agreements
referenced herein, this Agreement constitutes the entire Agreement
between the parties hereto, and no party hereto shall be bound by
any communications between them on the subject matter hereof unless
such communications are in writing, bear a date contemporaneous
with or subject to the date hereof and are signed by the party
against whom such change is asserted. Any prior written agreements
or letters of intent between the parties shall, upon the execution
of this Agreement, be null and void.
(i) Headings and Definitions. The headings in the
sections of this Agreement are inserted for convenience and shall
not constitute a part hereof or affect the meaning or
interpretation hereof.
IN WITNESS WHEREOF, each of the parties has executed this
Agreement have caused their corporate seals to be affixed as of the
day and year first above written.
/s/ ROBERT CENTENO
--------------------
ROBERT CENTENO
R&R FOODS, INC.,
a Texas corporation
By:/s/ RICHARD BEDFORD
---------------------
Richard Bedford, President
<PAGE>
RHINO ENTERPRISES GROUP, INC.,
a Nevada corporation
By:/s/ ROBERT W. MOEHLER
-----------------------
Robert Moehler, President
STOCK PURCHASE AGREEMENT
by and between
E-DATA ALLIANCE CORP.,
a Texas corporation
and
RHINO ENTERPRISES GROUP, INC.,
a Nevada corporation
Dated to be effective as of December 17, 1999
<PAGE>
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made and
entered to be effective as of the 17th day of December, 1999, by
and between E-DATA ALLIANCE CORP., a Texas corporation ("E-Data"),
and RHINO ENTERPRISES GROUP, INC., a Nevada corporation ("Rhino").
WHEREAS, E-Data currently has Ten Thousand (10,000) shares of
common stock, par value $1.00 per share, issued and outstanding,
which constitutes all of the issued and outstanding shares of the
common stock of E-Data;
WHEREAS, the parties have reached an understanding with respect
to the issuance and sale by E-Data and the purchase by Rhino of Ten
Thousand (10,000) shares of newly issued common stock, par value
$1.00 per share, so that E-Data will have Twenty Thousand (20,000)
shares of common stock issued and outstanding after issuing such
shares of common stock to Rhino.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth, and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties mutually covenant and agree as follows:
1. Purchase and Sale of Stock.
(a) Purchase of Shares. Subject to the terms and conditions
of this Agreement, on the Closing Date E-Data shall issue and sell
to Rhino, and Rhino shall purchase from E-Data, Ten Thousand
(10,000) shares of common stock (the "E-Data Common Shares") of E-
Data, free and clear of all obligations, liens, security interests
or encumbrances of every type and description.
(b) Payment for Purchased Stock. Rhino shall deliver to E-
Data the following compensation (collectively the "Stock Purchase
Price"):
(i) A cash payment of One Hundred Thousand and No/100 Dollars
($100,000.00), which shall be due at Closing;
(ii) Evidence of the cancellation of those certain Promissory
Notes dated September 28, 1999 and October 22, 1999, respectively
(collectively the "Notes"), each in the amount of $50,000, owed by
E-Data to Digital Information & Virtual Access, Inc, a Nevada
corporation ("DIVA"); and
(iii) An advertising/marketing credit (the "Marketing Credit")
of $800,000 with Money Business, Inc., a Texas corporation DBA The
Underground Shopper.
1
<PAGE>
(c) Closing. The "Closing Date" shall be December 17, 1999,
or such other date as E-Data and Rhino may mutually agree upon in
writing. The place of "Closing" shall be at the offices of Rhino,
or such other location that the parties hereto may agree upon in
writing.
2. Representations and Warranties of E-Data. E-Data
represents and warrants to Rhino as follows:
(a) Organization and Standing of E-Data. E-Data is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Texas, and is qualified to do
business in all states where it does business.
(b) Capitalization. E-Data's entire authorized capital
consists of One Million (1,000,000) shares, par value $1.00 per
share, of which immediately prior to the Closing of the transaction
contemplated in Paragraph 1(a) hereof, Ten Thousand (10,000) shares
shall be issued and outstanding. All of the outstanding common
shares are fully paid and nonassessable. At the Closing, there will
be no agreements, arrangements or understandings to which E-Data is
a party or by which it is bound with respect to the acquisition,
disposition or voting of any capital stock of E-Data, other than
this Agreement.
(c) Authority of E-Data. The execution of this Agreement by
E-Data and the consummation by E-Data of the transactions
contemplated in this Agreement have been duly authorized and
approved by all necessary corporate action, including any requisite
board of director and shareholder approval, and these
authorizations have not been amended or revoked. E-Data has the
power and requisite authority to enter into this Agreement and
consummate the transaction contemplated by this Agreement. This
Agreement has been duly executed and delivered and constitutes the
valid and binding obligation of E-Data, enforceable against them in
accordance with its terms.
(d) Disclosure. No representation or warranty made by E-Data
in this Agreement or in any writing, certificate or financial
statement, furnished or to be furnished in connection with the
transaction contemplated in this Agreement, contains or will
contain any misstatement of a material fact or omit to state a
material fact necessary to make the statement contained herein not
misleading. Additionally, E-Data has disclosed what it believes to
be all material matters to Rhino needed to properly evaluate the
advisability of investing in E-Data, including, without limitation,
all claims or potential claims against E-Data.
(e) Claims. As of the date hereof, E-Data has no claims
against Rhino or DIVA or their respective officers, directors,
agents and employees, which are not reflected in the Stock Purchase
Price hereunder. In this regard, E-Data hereby waives any and all
claims, causes, causes of action, whether in contract or in tort,
whether known or unknown, of any nature whatsoever, now existing or
hereafter arising, against Rhino or DIVA.
3. Representations and Warranties of Rhino. Rhino represents
and warrants to E-Data that as of the date hereof, Rhino has no
claims against E-Data or its officers, directors, agents and
2
<PAGE>
employees, which are not reflected in the Stock Purchase Price
hereunder. In this regard, Rhino hereby waives any and all claims,
causes, causes of action, whether in contract or in tort, whether
known or unknown, of any nature whatsoever, now existing against E-
Data, except as may arise pursuant to E-Data's representations and
warranties and covenants set forth herein.
4. Conditions to Rhino's Obligations. All obligations of
Rhino to close under this Agreement are subject to the following
conditions (which may be waived only at Rhino's option) existing
on the Closing Date or such other date as the context may require.
(a) Representations and Warranties. Each of E-Data's
representations and warranties in this Agreement shall be true at
the Closing Date as though such representations and warranties were
made and as of that date.
(b) Operations. From the date of this Agreement to the
Closing Date, E-Data's business, properties and assets shall have
been operated and conducted in the normal course of business.
5. Covenants of E-Data and Rhino. The parties hereby covenant
to each other as follows:
(a) As of the Closing Date, E-Data and Rhino shall have duly
executed and delivered or shall simultaneously therewith duly
execute and deliver all other instruments or documents contemplated
herein, provided all of the terms and conditions contained therein
have been performed and fulfilled.
(b) As of the Closing Date, E-Data and Rhino shall cause the
appropriate parties to execute and deliver all other instruments or
documents contemplated herein, provided all of the terms and
conditions contained therein have been performed and fulfilled.
6. Deliveries at Closing and Post-Closing Deliveries.
(a) Transfer Documents. At the Closing on the Closing Date,
E-Data shall execute, acknowledge and deliver to Rhino, one or more
stock certificates sufficient to issue to Rhino all right, title
and interest in and to the E-Data Common Shares.
(b) Cash Purchase Price. At or before the Closing on the
Closing Date, Rhino or its designee shall pay the Stock Purchase
Price, as set forth in Section 1(b)(i) above, to E-Data in cash or
ready funds.
(c) Cancellation of Notes and Marketing Credit. At the Closing
or the Closing Date, Rhino shall deliver (i) evidence of
cancellation of the Notes, and (ii) evidence of the Marketing
Credit.
3
<PAGE>
(d) Shareholder Agreement. At or before the Closing on the
Closing Date, Rhino and all other shareholders of E-Data shall
enter into a Shareholder Agreement, the form of which is attached
hereto as Exhibit A.
(e) Additional Documents. Each of the parties hereto upon
request of the other or their respective counsel will at the
Closing Date, and from time to time thereafter, execute and deliver
to each other all such instruments and documents of further
assurance, conveyance, confirmation of title, or otherwise, and
will do any and all such acts and things as may reasonably be
required to carry out their respective obligations under this
Agreement.
7. General.
(a) Actions After the Closing. After the date of Closing, the
parties shall execute and deliver such other and further
instructions and perform such other and further acts as may
reasonably be required fully to consummate the transactions
contemplated hereby.
(b) Brokerage. The parties hereby represent and warrant to
each other that they have not contracted with any broker, finder or
other party in connection with this transaction, and they have not
taken any action which will result in any broker's, finder's or
other fees being duly payable to any party with respect to the
transaction contemplated hereby. Each party hereby agrees to
indemnify and hold the other parties harmless from any loss,
liability, damage, costs or expenses (including reasonable
attorneys' fees) resulting to the other parties by reason of the
breach of the representation and warranty made by such party
herein.
(c) Execution of Counterparts. For the convenience of the
parties, this Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same document.
(d) Notices. All notices which are required or may be given
pursuant to the terms of this Agreement shall be in writing and
shall be sufficient in all respects if delivered personally or by
registered or certified mail or by recognized courier, postage
prepaid, as follows:
If to E-Data to:
e-Data Alliance Corp.
P.O. Box 3286
Grapevine, Texas 76099
Attn: Chris Miltenberger, President
4
<PAGE>
If to Rhino to:
Rhino Enterprises Group, Inc.
2925 LBJ Freeway, Suite 188
Dallas, Texas 75234
Attn: Robert Moehler, President
with a copy to:
Bellinger & DeWolf, L.L.P.
750 North St. Paul, Suite 900
Dallas, Texas 75201
Attn: H. Len Musgrove, Esq.
(e) Assignment, Successors and Assigns. This Agreement shall
be binding upon the parties hereto, their heirs, personal
representatives, successors and assigns.
(f) Applicable Laws. This Agreement shall be construed and
governed by the laws of the State of Texas. All parties hereto
consent to the jurisdiction of the District Courts of the State of
Texas and acknowledges that proper venue for any dispute under this
Agreement shall be Dallas County, Texas.
(g) Confidential Information/Press Release. E-Data and Rhino
and their respective employees and agents shall not disclose to any
other person any information including, without limitation,
financial and operational information, procedures or techniques,
sales methods and customer or potential customer lists learned by
them during the course of any examination called for or conducted
by them pursuant to this Agreement and treated as confidential by
E-Data and Rhino, and if the transaction contemplated by this
Agreement is not consummated, neither Rhino nor E-Data shall
disclose, or use information so obtained in its own business. No
press release may be made by any party hereto without the prior
written consent of Rhino.
(h) Entire Agreement. Except for the other agreements
referenced herein, this Agreement constitutes the entire Agreement
between the parties hereto, and no party hereto shall be bound by
any communications between them on the subject matter hereof unless
such communications are in writing, bear a date contemporaneous
with or subject to the date hereof and are signed by the party
against whom such change is asserted. Any prior written agreements
or letters of intent between the parties shall, upon the execution
of this Agreement, be null and void.
(i) Headings and Definitions. The headings in the sections of
this Agreement are inserted for convenience and shall not
constitute a part hereof or affect the meaning or interpretation
hereof.
5
<PAGE>
IN WITNESS WHEREOF, each of the parties has executed this
Agreement have caused their corporate seals to be affixed as of the
day and year first above written.
E-DATA ALLIANCE CORP.,
a Texas corporation
By:/s/Chris Miltenberger
----------------------
Chris Miltenberger, President
RHINO ENTERPRISES GROUP, INC.,
a Nevada corporation
By:/s/Robert Moehler
--------------------
Robert Moehler, President
<PAGE>
EXHIBIT "A"
SHAREHOLDER AGREEMENT
[Not included but available upon request.]
STOCK PURCHASE AGREEMENT
by and among
RHINO ENTERPRISES GROUP, INC.,
a Nevada corporation
and
SARWIN FAMILY, LLC
Dated to be effective as of December 17, 1999
<PAGE>
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made and
entered to be effective as of the 17th day December, 1999, by and
between, SARWIN FAMILY, LLC, a Texas Limited Liability
Company,.("Sarwin"), and RHINO ENTERPRISES GROUP, INC., a Nevada
Corporation ("Rhino").
WHEREAS, Rhino is currently the owner of One Thousand (1,000)
shares of the common stock of R&R Food, Inc., a Texas Corporation
("R & R"), which stock constitutes Fifty Percent (50%) of the
issued and outstanding shares of the common stock of R&R; and
WHEREAS, the parties have reached an understanding with respect to
the sale by Rhino and the purchase by Sarwin's of all of Rhino's
right, title and interest in and to the issued and outstanding
shares of the common stock of R&R.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth, and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties mutually covenant and agree as follows:
1. Purchase and Sale of Stock.
(a) Purchase of Shares. Subject to the terms and conditions of
this Agreement, on the Closing Date (as defined below) Rhino shall
sell to Sarwin, and Sarwin shall purchase from Rhino, Rhino's One
Thousand (1,000) shares of common stock (the "R&R Common Shares")
of R&R, free and clear of all obligations, liens, security
interests or encumbrances of every type and description.
(b) Payment for Purchased Stock. Sarwin shall pay to Rhino
consideration(the "Purchase Price") as follows:
The sum of Forty-Six Thousand and No/100 Dollars ($46,000.00)
shall be due at Closing; provided, however, that Rhino accepts
receipt of this Purchase Price in the form of a Promissory
Note.
(c) Closing. The Closing Date shall be December 17 , 1999, or
such other date as Rhino and Sarwin may mutually agree upon in
writing. The place of Closing shall be at the offices of Rhino, or
such other location that the parties hereto may agree upon in
writing.
2. Representations and Warranties of Rhino. Rhino represent and
warrant to Sarwin as follows:
(a) Organization and Standing of R&R. To the best of Rhino's
knowledge, R&R is a corporation duly organized, validly existing
and in good standing under the laws of the State of Texas, and is
qualified to do business in all states where it does business.
(b) Capitalization. R&R's entire authorized capital consists of
One Hundred
1
<PAGE>
Thousand (100,000) common shares, One/Tenth Dollar ($.10) par
value, of which immediately prior to the Closing of the transaction
contemplated in Paragraph 1(a) hereof, Two Thousand (2000) shares
shall be issued and outstanding. All of the outstanding common
shares are fully paid and nonassessable. At the Closing, there will
be no agreements, arrangements or understandings to which Rhino or
R&R are parties or by which they are bound with respect to the
acquisition, disposition, or voting of any capital stock of R&R,
other than this Agreement.
(b) Stock Ownership. Rhino is the owner of the collective
number of R&R Common Shares set forth above in Section 1(a), and
can deliver sufficient common shares to close the proposed exchange
and redemption, free and clear of any liens, claims, pledges or
encumbrances.
(c) Authority of Rhino. The execution of this Agreement by
Rhino and the consummation by Rhino of the transactions
contemplated in this Agreement have been duly authorized and
approved by all necessary corporate action, including any requisite
shareholder approval, and these authorizations have not been
amended or revoked. R&R and Rhino have the power and requisite
authority to enter into this Agreement and consummate the
transaction contemplated by this Agreement. This Agreement has
been duly executed and delivered and constitutes the valid and
binding obligation of R&R and Rhino, enforceable against them in
accordance with its terms.
(d) Disclosure. No representation or warranty made by either
Rhino or R&R in this Agreement or in any writing, certificate or
financial statement, furnished or to be furnished in connection
with the transaction contemplated in this Agreement, contains or
will contain any misstatement of a material fact or omit to state
a material fact necessary to make the statement contained herein
not misleading.
(e) Claims. As of the date hereof Sarwin has no claims against
Rhino or R&R which are not reflected in the Stock Purchase Price
hereunder. In this regard, Sarwin hereby waives any and all claims,
causes, causes of action, whether in contract or in tort, whether
known or unknown, of any nature whatsoever, now existing or
hereafter arising, against Rhino and R&R.
3. Conditions to Rhino's Obligations. All obligations of Sarwin
to close under this Agreement are subject to the following
conditions (which may be waived only at Sarwin's option) existing
on the Closing Date or such other date as the context may require.
(a) Representations and Warranties. Each of Rhino's and R&R's
representations and warranties in this Agreement shall be true at
the Closing Date as though such representations and warranties were
made and as of that date.
(b) Operations. From the date of this Agreement to the Closing
Date, R&R's business, properties and assets shall have been
operated and conducted in the normal course of business.
2
<PAGE>
4. Covenants of Sarwin and Rhino. The parties hereby covenant to
each other as follows:
(a) As of the Closing Date, Rhino and Sarwin shall have duly
executed and delivered or shall simultaneously therewith duly
execute and deliver all other instruments or documents contemplated
herein, provided all of the terms and conditions contained therein
have been performed and fulfilled.
(b) As of the Closing Date, Rhino shall cause the appropriate
parties to execute and deliver all other instruments or documents
contemplated herein, provided all of the terms and conditions
contained therein have been performed and fulfilled.
5. Deliveries at Closing and Post-Closing Deliveries.
(a) Transfer Documents. At the Closing on the Closing Date,
Rhino shall execute, acknowledge and deliver to Sarwin and/or R&R,
as applicable, stock powers, one or more stock certificates and
other documents of transfer sufficient to transfer and assign to
Sarwin all right, title and interest in and to the R&R Common
Shares.
(b) Purchase Price. At or before the Closing on the Closing
Date, Sarwin or its designee shall pay the Purchase Price, as set
forth in Section 1(b) (i) above to Rhino in cash, ready funds or an
executed Promissory Note.
(c) Additional Documents. Each of the parties hereto upon
request of the other or their respective counsel will at the
Closing Date, and from time to time thereafter, execute and deliver
to each other all such instruments and documents of further
assurance, conveyance, confirmation of title, or otherwise, and
will do any and all such acts and things as may reasonably be
required to carry out their respective obligations under this
Agreement.
6. General.
(a) Actions After the Closing. After the date of Closing, the
parties shall execute and deliver such other and further
instructions and perform such other and further acts as may
reasonably be required fully to consummate the transactions
contemplated hereby.
(b) Brokerage. The parties hereby represent and warrant to each
other that they have not contracted with any broker, finder or
other party in connection with this transaction, and they have not
taken any action which will result in any broker's, finder's or
other fees being duly payable to any party with respect to the
transaction contemplated hereby. Each party hereby agrees to
indemnify and hold the other parties harmless from any loss,
liability, damage, costs or expenses (including reasonable
attorneys' fees) resulting to the other parties by reason of the
breach of the representation and warranty made by such party
herein.
3
<PAGE>
(c) Execution of Counterparts. For the convenience of the
parties, this Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same document.
(d) Notices. All notices which are required or may be given
pursuant to the terms of this Agreement shall be in writing and
shall be sufficient in all respects if delivered personally or by
registered or certified mail or by recognized courier, postage
prepaid, as follows:
If to R&R to:
R&R Foods, Inc.
1301 North Collins
Arlington, Texas 76011
Attn: Richard Bedford, President
If to Sarwin to:
Sarwin Family, LLC
__________________________
__________________________
If to Rhino to:
Rhino Enterprises Group, Inc.
2925 LBJ Freeway, Suite 188
Dallas, Texas 75234
Attn: Robert Moehler, President
with a copy to:
Bellinger & DeWolf, L.L.P.
750 North St. Paul, Suite 900
Dallas, Texas 75201
Attn: H. Len Musgrove, Esq.
(e) Assignment, Successors and Assigns. This Agreement shall be
binding upon the parties hereto, their heirs, personal
representatives, successors and assigns.
(f) Applicable Laws. This Agreement shall be construed and
governed by the laws of the State of Texas. All parties hereto
consent to the jurisdiction of the District Courts of the State of
Texas and acknowledges that proper venue for any dispute under this
Agreement shall be Dallas County, Texas.
(g) Confidential Information/Press Release. Rhino, R&R and
Sarwin and their respective employees and agents shall not
disclose to any other person any information
4
<PAGE>
including, without limitation, financial and operational
information, procedures or techniques, sales methods and customer
or potential customer lists learned by them during the course of
any examination called for or conducted by them pursuant to this
Agreement and treated as confidential by Rhino, R&R and Sarwin, and
if the transaction contemplated by this Agreement is not
consummated, neither Sarwin, Rhino nor R&R shall disclose, or use
information so obtained in its own business. No press release may
be made by any party hereto without the prior written consent of
Rhino.
(h) Entire Agreement. Except for the other agreements referenced
herein, this Agreement constitutes the entire Agreement between the
parties hereto, and no party hereto shall be bound by any
communications between them on the subject matter hereof unless
such communications are in writing, bear a date contemporaneous
with or subject to the date hereof and are signed by the party
against whom such change is asserted. Any prior written agreements
or letters of intent between the parties shall, upon the execution
of this Agreement, be null and void.
(i) Headings and Definitions. The headings in the sections of
this Agreement are inserted for convenience and shall not
constitute a part hereof or affect the meaning or interpretation
hereof.
IN WITNESS WHEREOF, each of the parties has executed this Agreement
have caused their corporate seals to be affixed as of the day and
year first above written.
SARWIN FAMILY LIMITED PARTNERSHIP
a Texas Limited Liability Company
By: /s/ STEVE SARWIN
----------------------------------
Steve Sarwin, Manager
RHINO ENTERPRISES GROUP, INC.,
a Nevada corporation
By: /s/ ROBERT W. MOEHLER
-----------------------------------
Robert Moehler, President
5
[FILED IN THE OFFICE OF THE SECRETARY OF STATE OF THE STATE OF
NEVADA MAR 3, 1995]
ARTICLES OF INCORPORATION
OF
UNIQUE FASIONS, INC.
KNOW ALL MEN BY THESE PRESENTS:
That we, the undersigned, have this day voluntarily
associated ourselves together for the purpose of forming a
Corporation under and pursuant to the laws of the State of
Nevada, and we do hereby certify that:
ARTICLE I - NAME: The exact name of this Corporation is:
Unique Fashions, Inc.
ARTICLE II - RESIDENT AGENT:
The Resident Agent of the Corporation is Max C. Tanner,
Esq., The Law Offices of Max C. Tanner, 2950 East Flamingo Road,
Suite G, Las Vegas, Nevada 89121.
ARTICLE III - DURATION: The Corporation shall have perpetual
existence.
ARTICLE IV - PURPOSES: The purpose, object and nature of the
business for which this Corporation is organized are:
(a) To engage in any lawful activity;
(b) To carry on such business as may be necessary,
convenient, or desirable to accomplish the above purposes, and to
do all other things incidental thereto which are not forbidden by
law or by these Articles of Incorporation.
ARTICLE V - POWERS: The powers of the Corporation shall be those
powers granted by 78.060 and 78.070 of the Nevada Revised
Statutes under which this corporation is formed. In addition,
the Corporation shall have the following specific powers:
(a) To elect or appoint officers and agents of the
Corporation and to fix their compensation;
<PAGE>
(b) To act as an agent for any individual, association,
partnership, corporation or other legal entity;
(c) To receive, acquire, hold, exercise rights arising out
of the ownership or possession thereof, sell, or otherwise
dispose of, shares or other interests in, or obligations of,
individuals, associations, partnerships, corporations,or
governments;
(d) To receive, acquire, hold, pledge, transfer, or
otherwise dispose of shares of the corporation, but such shares
may only be purchased, directly or indirectly, out of earned
surplus;
(e) To make gifts or contributions for the public welfare
or charitable, scientific or educational purposes, and in time of
war, to make donations in aid of war activities.
ARTICLE VI - CAPITAL STOCK:
Section 1. Authorized Shares. The total number of shares
which this Corporation is authorized to issue is 25,000,000
shares of Common Stock at $.001 par value per share.
Section 2. Voting Rights of Shareholders. Each holder of
the Common Stock shall be entitled to one vote for each share Of
stock standing in his name on the books of the corporation.
Section 3. Consideration for Shares. The Common Stock
shall be issued for such consideration, as shall be fixed from
time to time by the Board of Directors. In the absence of fraud,
the judgment of the Directors as to the value of any property for
shares shall be conclusive. When shares are issued upon payment
of the consideration fixed by the Board of Directors, such shares
shall be taken to be fully paid stock and shall be
non-assessable. The Articles shall not be amended in this
particular.
Section 4. Pre-emptive Rights. Except as may otherwise be
provided by the Board of Directors, no holder of any shares of
the stock of the Corporation, shall have any preemptive right to
purchase, subscribe for, or otherwise acquire any shares of stock
of the Corporation of any class now or hereafter authorized, or
any securities exchangeable for or convertible into such shares,
or any warrants or other instruments evidencing rights or options
to subscribe for, purchase, or otherwise acquire such shares.
2
<PAGE>
Section 5. Stock Rights and Options. The Corporation shall
have the power to create and issue rights, warrants, or options
entitling the holders thereof to purchase from the corporation
any shares of its capital stock of any class or classes, upon
such terms and conditions and at such times and prices as the
Board of Directors may provide, which terms and conditions shall
be incorporated in an instrument or instruments evidencing such
rights. In the absence of fraud,the judgment of the Directors as
to the adequacy of consideration for the issuance of such rights
or options and the sufficiency thereof shall be conclusive.
ARTICLE VII - ASSESSMENT OF STOCK: The capital stock of this
Corporation, after the amount of the subscription price has been
fully paid in, shall not be assessable for any purpose, and no
stock issued as fully paid up shall ever be assessable or
assessed. The holders of such stock shall not be individually
responsible for the debts, contracts, or liabilities of the
Corporation and shall not be liable for assessments to restore
impairments in the capital of the Corporation.
ARTICLE VIII - DIRECTORS: For the management of the business,and
for the conduct of the affairs of the Corporation, and for the
future definition, limitation, and regulation of the powers of
the Corporation and its directors and shareholders, it is further
provided:
Section 1. Size of Board. The members of the governing
board of the Corporation shall be styled directors. The number
of directors of the Corporation, their qualifications, terms of
office, manner of election, time and place of meeting, and powers
and duties shall be such as are prescribed by statute and in the
by-laws of the Corporation. The name and post office address of
the directors constituting the first board of directors, which
shall be one (1) in number are:
NAME ADDRESS
Max C. Tanner 2950 E. Flamingo Rd. Ste. "G"
Las Vegas, NV 89121
Section 2. Powers of Board. In furtherance and not in
limitation of the powers conferred by the laws of the State of
Nevada, the Board of Directors is expressly authorized and
empowered:
(a) To make, alter, amend, and repeal the By-Laws subject to
the power of the shareholders to alter or repeal the By-Laws made
by the Board of Directors.
3
<PAGE>
(b) Subject to the applicable provisions of the ByLaws then
in effect, to determine, from time to time, whether and to what
extent, and at what times and places, and under what conditions
and regulations, the accounts and books of the Corporation, or
any of them, shall be open to shareholder inspection. No
shareholder shall have any right to inspect any of the accounts,
books or documents of the Corporation, except as permitted by
law, unless and until authorized to do so by resolution of the
Board of Directors or of the Shareholders of the Corporation;
(c) To issue stock of the Corporation for money, property,
services rendered, labor performed, cash advanced, acquisitions
for other corporations or for any other assets of value in
accordance with the action of the board of directors without vote
or consent of the shareholders and the judgment of the board of
directors as to value received and in return therefore shall be
conclusive and said stock, when issued, shall be fully-paid and
non-assessable.
(d) To authorize and issue, without shareholder consent,
obligations of the Corporation, secured and unsecured, under such
terms and conditions as the Board, in its sole discretion, may
determine, and to pledge or mortgage, as security therefore, any
real or personal property of the Corporation, including
after-acquired property;
(e) To determine whether any and, if so, what part, of the
earned surplus of the Corporation shall be paid in dividends to
the shareholders, and to direct and determine other use and
disposition of any such earned surplus;
(f) To fix, from time to time, the amount of the profits of
the Corporation to be reserved as working capital or for any
other lawful purpose;
(g) To establish bonus, profit-sharing, stock option, or
other types of incentive compensation plans for the employees,
including officers and directors, of the Corporation, and to fix
the amount of profits to be shared or distributed, and to
determine the persons to participate in any such plans and the
amount of their respective participations.
(h) To designate, by resolution or resolutions passed by a
majority of the whole Board, one or more committees, each
consisting of two or more directors, which, to the extent
permitted by law and authorized by the resolution or the By-Laws,
shall have and may exercise the powers of the Board;
4
<PAGE>
(i) To provide for the reasonable compensation of its own
members by By-Law, and to fix the terms and conditions upon which
such compensation will be paid;
(j) In addition to the powers and authority herein before,
or by statute, expressly conferred upon it, the Board of
Directors may exercise all such powers and do all such acts and
things as may be exercised or done by the corporation, subject,
nevertheless, to the provisions of the laws of the State of
Nevada, of these Articles of Incorporation, and of the By-Laws of
the Corporation.
Section 3. Interested Directors. No contract or
transaction between this Corporation and any of its directors, or
between this Corporation and any other corporation, firm,
association, or other legal entity shall be invalidated by reason
of the fact that the director of the Corporation has a direct or
indirect interest, pecuniary or otherwise, in such corporation,
firm, association, or legal entity, or because the interested
director was present at the meeting of the Board of Directors
which acted upon or in reference to such contract or transaction,
or because he participated in such action, provided that: (1)
the interest of each such director shall have been disclosed to
or known by the Board and a disinterested majority of the Board
shall have nonetheless ratified and approved such contract or
transaction (such interested director or directors may be counted
in determining whether a quorum is present for the meeting at
which such ratification or approval is given); or (2) the
conditions of N.R.S. 78.140 are met.
ARTICLE IX - LIMITATION OF LIABILITY OF OFFICERS OR DIRECTORS:
The personal liability of a director or officer of the
corporation to the corporation or the Shareholders for damages
for breach of fiduciary duty as a director or officer shall be
limited to acts or omissions which involve intentional
misconduct, fraud or a knowing violation of law.
ARTICLE X - INDEMNIFICATION: Each director and each officer of
the corporation may be indemnified by the corporation as follows:
(a) The corporation may indemnify any person who was or is
a party, or is threatened to be made a party, to any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action
by or in the right of the corporation), by reason of the fact
that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or
5
<PAGE>
other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement, actually and
reasonably incurred by him in connection with the action, suit or
proceeding, if he acted in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests
of the corporation and with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suite or proceeding, by
judgment, order, settlement, conviction or upon a plea of nolo
contendere or its equivalent, does not of itself create a
presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to
the best interests of the corporation, and that, with respect to
any criminal action or proceeding, he had reasonable cause to
believe that his conduct was unlawful.
(b) The corporation may indemnify any person who was or is
a party, or is threatened to be made a party, to any threatened,
pending or completed action or suit by or in the right of the
corporation, to procure a judgment in its favor by reason of the
fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise against expenses including amounts paid in settlement
and attorneys' fees actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit,
if he acted in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the
corporation. Indemnification may not be made for any claim,
issue or matter as to which such a person has been adjudged by a
court of competent jurisdiction, after exhaustion of all appeals
there from, to be liable to the corporation or for amounts paid
in settlement to the corporation, unless and only to the extent
that the court in which the action or suit was brought or other
court of competent jurisdiction determines upon application that
in view of all the circumstances of the case the person is fairly
and reasonably entitled to indemnity for such expenses as the
court deems proper.
(c) To the extent that a director, officer, employee or
agent of a corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred
to in subsections (a) and (b) of this Article, or in defense of
any claim, issue or matter therein, he must be indemnified by the
corporation against expenses,
6
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including attorney's fees, actually and reasonably incurred by
him in connection with the defense.
(d) Any indemnification under subsections (a) and (b) unless
ordered by a court or advanced pursuant to subsection (e), must
be made by the corporation only as authorized in the specific
case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances. The
determination must be made:
(i) By the stockholders;
(ii) By the board of directors by majority vote of
a quorum consisting of directors who were not parties to the act,
suit or proceeding;
(iii) If a majority vote of a quorum consisting of
directors who were not parties to the act, suit or proceeding so
orders, by independent legal counsel in a written opinion; or
(iv) If a quorum consisting of directors who were
not parties to the act, suit or proceeding cannot be obtained, by
independent legal counsel in a written opinion.
(e) Expenses of officers and directors incurred in
defending a civil or criminal action, suit or proceeding must be
paid by the corporation as they are incurred and in advance of
the final disposition of the action, suit or proceeding, upon
receipt of an undertaking by or on behalf of the director or
officer to repay the amount if it is ultimately determined by a
court of competent jurisdiction that he is not entitled to be
indemnified by the corporation. The provisions of this
subsection do not affect any rights to advancement of expenses to
which corporate personnel other than directors or officers may be
entitled under any contract or otherwise by law.
(f) The indemnification and advancement of expenses
authorized in or ordered by a court pursuant to this section:
(i) Does not exclude any other rights to which a
person seeking indemnification or advancement of expenses may be
entitled under the certificate or articles of incorporation or
any bylaw, agreement, vote of stockholders or disinterested
directors or otherwise, for either an action in his official
capacity or an action in another capacity while
7
<PAGE>
holding his office, except that indemnification, unless ordered
by a court pursuant to subsection (b) or for the advancement of
expenses made pursuant to subsection (e) may not be made to or on
behalf of any director or officer if a final adjudication
establishes that his acts or omissions involved intentional
misconduct, fraud or a knowing violation of the law and was
material to the cause of action.
(ii) Continues for a person who has ceased to be a
director, officer, employee or agent and inures to the benefit of
the heirs, executors and administrators of such a person.
ARTICLE XI - PLACE OF MEETING; CORPORATE BOOKS: Subject to the
laws of the State of Nevada, the shareholders and the Directors
shall have power to hold their meetings, and the Directors shall
have power to have an office or offices and to maintain the books
of the Corporation outside the State of Nevada, at such place or
places as may from time to time be designated in the By-Laws or
by appropriate resolution.
ARTICLE XII - AMENDMENT OF ARTICLES: The provisions of these
Articles of Incorporation may be amended, altered or repealed
from time to time to the extent and in the manner prescribed by
the laws of the State of Nevada, and additional provisions
authorized by such laws as are then in force may be added. All
rights herein conferred on the directors, officers and
shareholders are granted subject to this reservation.
ARTICLE XIII - INCORPORATOR: The name and address of the sole
incorporator signing these Articles of Incorporation is as
follows:
NAME POST OFFICE ADDRESS
1. Max C. Tanner 2950 East Flamingo Road, Suite G
Las Vegas, Nevada 89121
8
<PAGE>
IN WITNESS WHEREOF, the undersigned incorporator has
executed these Articles of Incorporation this 2nd day of March,
1995.
/s/ MAX C. TANNER
-------------------
Max C. Tanner
STATE OF NEVADA )
)ss:
COUNTY OF CLARK )
On March 2, 1995, personally appeared before me, a Notary
Public, Max C. Tanner, who acknowledged to me that he executed
the foregoing Articles of Incorporation for Unique Fashions,
Inc., a Nevada corporation.
/s/ June Y. Kelsay
--------------------
Notary Public
[Notary Public- State of Nevada, County Of Clark, June Y. Kelsay,
My commission expires January10, 1996]
9
<PAGE>
[FILED IN THE OFFICE OF THE SECRETARY OF STATE OF THE STATE OF
NEVADA MAR 03 1995
CERTIFICATE OF ACCEPTANCE
OF APPOINTMENT BY RESIDENT AGENT
IN THE MATTER OF UNIQUE FASHIONS, INC.
We, The Law Offices of Max C. Tanner, do hereby certify that
on the 2nd day of March, 1995, we accepted the appointment as
Resident Agent of the above-entitled corporation in accordance
with Sec. 78.090, NRS 1957.
Furthermore, that the principal office in this state is
located at The Law Offices of Max C. Tanner, 2950 East Flamingo
Road, Suite G, City of Las Vegas 89121, County of Clark, State
of Nevada.
IN WITNESS WHEREOF, I have hereunto set my hand this 2nd day
of March, 1995.
THE LAW OFFICES OF MAX C. TANNER
By: /s/ MAX C.TANNER
-----------------
Max C. Tanner, Esq.
Resident Agent
10
[FILED IN THE OFFICE OF THE SECRETARY OF STATE OF THE STATE OF
NEVADA APRIL 20 1999 NO. C3763-95 /s/ DEAN HELLER, DEAN HELLER,
SECRETARY OF STATE]
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
OF
UNIQUE FASHIONS, INC.
Pursuant to NRS 78.207, 78.209, 78.385 and 78.390, the
undersigned President and Secretary of Unique Fashions, Inc. do
hereby certify:
That on April 16, 1999, the following amendments to the
articles of incorporation were unanimously approved by the Board
of Directors of said corporation by written consent in lieu of
a special meeting of the Board of Directors and by 14,868,332
shares of the 23,059,845 shares issued and outstanding and
authorized to vote.
1. Change of Authorized Capital
Effective at 12:01 a.m. on April 30, 1999, Article VI -
Capital Stock, Section 1. Authorized Shares is hereby amended to
read as follows:
Section 1. Authorized Shares. The total number of shares
which this Corporation is authorized to issue is 25,000,000
shares consisting of Common and Preferred Stock as follows:
(a) COMMON - The Corporation shall effect a one for
twenty (1 for 20) reverse stock split of its authorized, as well
as issued and outstanding, common stock on the books of the
Corporation at the close of business on April 29, 1999. The stock
split shall be effective at 12:01 a.m. on April 30, 1999. On
April 29, 1999 there were 25,000,000 shares of authorized common
stock, par value $.001 per share. At 12:01 a.m. on April 30,1999,
after effecting the stock split, there were 1,250,000 shares of
authorized common stock, par value $.001 per share. Any
fractional shares created by the one for twenty (1 for 20)reverse
stock split shall be rounded up to the next whole share.
Immediately following the one for twenty (1 for 20) reverse stock
split, the authorized common stock shall be increased from
1,250,000 shares to 20,000,000 shares at $.001 par value per
share.
(b) PREFERRED - The total number of shares of Preferred
Stock which this Corporation is authorized to issue is 5,000,000
shares at $.001 par value per share, which Preferred Stock may
contain special preferences as determined by the Board of
Directors of the Corporation, including, but not limited to, the
bearing of interest and convertibility into shares of Common
Stock of the Corporation.
2. Change of Name of Corporation
Effective at 12:01a.m. on April 30, 1999, "Article I - Name"
is hereby amended to read as follows:
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ARTICLE I - NAME: The exact name of this Corporation is:
Rhino Enterprises Group, Inc.
This Certificate of Amendment of the Articles of
Incorporation may be executed in two or more counterparts.
UNIQUE FASHIONS, INC.
/s/DAVID H. CARL
-----------------------------
David H. Carl, President
/s/DANIEL H. WEAVER
-----------------------------
Daniel H. Weaver, Secretary
STATE OF TEXAS )
)ss.
COUNTY OF DALLAS )
On the 19th day of April, 1999, personally appeared before
me, a Notary Public, David H. Carl, President of Unique Fashions,
Inc., who acknowledged that he executed the Certificate of
Amendment of Articles of Incorporation.
/s/LINDA S. HERRINGTON
-------------------------
Signature of Notary
(Notary stamp or seal)
STATE OF TEXAS )
)ss.
COUNTY OF DALLAS )
On the 19th day of April, 1999, personally appeared before
me, a Notary Public, Daniel H. Weaver, Secretary of Unique
Fashions, Inc., who acknowledged that he executed the Certificate
of Amendment of Articles of Incorporation.
/s/ LINDA S. HERRINGTON
-------------------------
Signature of Notary
(Notary stamp or seal)
2
BY-LAWS OF
UNIQUE FASHIONS, INC.
ARTICLE I
SHAREHOLDERS
Section 1.01 Annual Meeting. The annual meeting of the
shareholders shall be held at such date and time as shall be
designated by the board of directors and stated in the notice of
the meeting or in a duly-executed waiver of notice thereof. If
the corporation shall fail to provide notice of the annual
meeting of the shareholders as set forth above, the annual
meeting of the shareholders of the corporation shall be held
during the month of November or December of each year as
determined by the Board of Directors, for the purpose of electing
directors of the corporation to serve during the ensuing year and
for the transaction of such other business as may properly come
before the meeting. If the election of the directors is not held
on the day designated herein for any annual meeting of the
shareholders, or at any adjournment thereof, the president shall
cause the election to be held at a special meeting of the
shareholders as soon thereafter as is convenient.
Section 1.02 Special Meetings. Special meetings of the
shareholders may be called by the president or the Board of
Directors and shall be called by the president at the written
request of the holders of not less than 51% of the issued and
outstanding shares of capital stock of the corporation.
All business lawfully to be transacted by the shareholders
may be transacted at any special meeting at any adjournment
thereof. However, no business shall be acted upon at a special
meeting, except that referred to in the notice calling the
meeting, unless all of the outstanding capital stock of the
corporation is represented either in person or by proxy. Where
all of the capital stock is represented, any lawful business may
be transacted and the meeting shall be valid for all purposes.
Section 1.03 Place of Meetings. Any meeting of the
shareholders of the corporation may be held at its principal
office in the State of Nevada or such other place in or out of
the United States as the Board of Directors may designate. A
waiver of notice signed by the shareholders entitled to vote may
designate any place for the holding of such meeting.
<PAGE>
Section 1.04 Notice of Meetings.
(a) The secretary shall sign and deliver to all
shareholders of record written or printed notice of any meeting
at least ten (10) days, but not more than sixty (60) days, before
the date of such meeting; which notice shall state the place,
date and time of the meeting, the general nature of the business
to be transacted, and, in the case of any meeting at which
directors are to be elected, the names of nominees, if any, to be
presented for election.
(b) In the case of any meeting, any proper business
may be presented for action, except that the following items
shall be valid only if the general nature of the proposal is
stated in the notice or written waiver of notice:
(1) Action with respect to any contract or
transaction between the corporation and one or more of
its directors or another firm, association, or
corporation in which one or more of its directors has
a material financial interest;
(2) Adoption of amendments to the Articles of
Incorporation; or
(3) Action with respect to the merger,
consolidation, reorganization, partial or complete
liquidation, or dissolution of the corporation.
(c) The notice shall be personally delivered or mailed
by first class mail to each shareholder of record at the last
known address thereof, as the same appears on the books of the
corporation, and the giving of such notice shall be deemed
delivered the date the same is deposited in the United States
mail, postage prepaid. If the address of any shareholder does
not appear upon the books of the corporation, it will be
sufficient to address any notice to such shareholder at the
principal office of the corporation.
(d) The written certificate of the person calling any
meeting, duly sworn, setting forth the substance of the notice,
the time and place the notice was mailed or personally delivered
to the several shareholders, and the addresses to which the
notice was mailed shall be prima facie evidence of the manner and
fact of giving such notice.
Section 1.05 Waiver of Notice. If all of the shareholders
of the corporation shall waive notice of a meeting, no notice
shall be required, and, whenever all of the shareholders shall
meet in
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<PAGE>
person or by proxy, such meeting shall be valid for all purposes
without call or notice, and at such meeting any corporate action
may be taken.
Section 1.06 Determination of Shareholders of Record.
(a) The Board of Directors may at any time fix a
future date as a record date for the determination of the
shareholders entitled to notice of any meeting or to vote or
entitled to receive payment of any dividend or other distribution
or allotment of any rights or entitled to exercise any rights in
respect of any other lawful action. The record date so fixed
shall not be more than sixty (60) days prior to the date of such
meeting nor more than sixty (60) days prior to any other action.
When a record date is so fixed, only shareholders of record on
that date are entitled to notice of and to vote at the meeting or
to receive the dividend, distribution or allotment of rights, or
to exercise their rights, as the case may be, notwithstanding any
transfer of any shares on the books of the corporation after the
record date.
(b) If no record date is fixed by the Board of
Directors, then (1) the record date for determining shareholders
entitled to notice of or to vote at a meeting of shareholders
shall be at the close of business on the business day next
preceding the day on which notice is given or, if notice is
waived, at the close of business on the day next preceding the
day on which the meeting is held; (2) the record date for
determining shareholders entitled to give consent to corporate
action in writing without a meeting, when no prior action by the
Board of Directors is necessary, shall be the day on which
written consent is given; and (3) the record date for determining
shareholders for any other purpose shall be at the close of
business on the day on which the Board of Directors adopts the
resolution relating thereto, or the sixtieth (60th) day prior to
the date of such other action, whichever is later.
Section 1.07 Quorum: Adjourned Meetings.
(a) At any meeting of the shareholders, a majority of
the issued and outstanding shares of the corporation represented
in person or by proxy, shall constitute a quorum.
(b) If less than a majority of the issued and
outstanding shares are represented, a majority of shares so
represented may adjourn from time to time at the meeting, until
holders of the amount of stock required to constitute a quorum
shall be in attendance. At any such adjourned meeting
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<PAGE>
at which a quorum shall be present, any business may be
transacted which might have been transacted as originally
called. When a shareholders' meeting is adjourned to another
time or place, notice need not be given of the adjourned meeting
if the time and place thereof are announced at the meeting at
which the adjournment is taken,unless the adjournment is for more
than ten (10) days in which event notice thereof shall be given.
Section 1.08 Voting.
(a) Each shareholder of record, such shareholder's
duly authorized proxy or attorney-in-fact shall be entitled to
one (1)vote for each share of stock standing registered in such
shareholder's name on the books of the corporation on the record
date
(b) Except as otherwise provided herein, all votes
with respect to shares standing in the name of an individual on
the record date (included pledged shares) shall be cast only by
that individual or such individual's duly authorized proxy or
attorney-in-fact. With respect to shares held by a representative
of the estate of a deceased shareholder, guardian, conservator,
custodian or trustee, votes may be cast by such holder upon proof
of capacity, even though the shares do not stand in the name of
such holder. In the case of shares under the control of a
receiver, the receiver may cast votes carried by such shares even
though the shares do not stand in the name of the receiver
provided that the order of the court of competent jurisdiction
which appoints the receiver contains the authority to cast votes
carried by such shares. If shares stand in the name of a minor,
votes may be cast only by the duly-appointed guardian of the
estate of such minor if such guardian has provided the
corporation with written notice and proof of such a appointment.
(c) With respect to shares standing in the name of a
corporation on the record date, votes may be cast by such officer
or agents as the by-laws of such corporation prescribe or, in the
absence of an applicable by-law provision, by such person as may
be appointed by resolution of the Board of Directors of such
corporation. In the event no person is so appointed, such votes
of the corporation may be cast by any person (including the
officer making the authorization) authorized to do so by the
Chairman of the Board of Directors, President or any Vice
President of such corporation.
(d) Notwithstanding anything to the contrary herein
contained, no votes may be cast by shares owned by this
corporation or its subsidiaries, if any. If shares are held by
this corporation or its subsidiaries, if any, in a
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<PAGE>
fiduciary capacity, no votes shall be cast with respect thereto
on any matter except to the extent that the beneficial owner
thereof possesses and exercises either a right to vote or to give
the corporation holding the same binding instructions on how to
vote.
(e) With respect to shares standing in the name of two or
more persons, whether fiduciaries, members of a partnership,
joint tenants, tenants in common, husband and wife as community
property, tenants by the entirety, votin trustees, persons
entitled to vote under a shareholder voting agreement or
otherwise and shares held by two or more persons (including proxy
holders) having the same fiduciary relationship respect in the
same shares, votes may be cast in the following manner:
(1) If only one such person votes, the votes of
such person binds all.
(2) If more than one person casts votes, the act
of the majority so voting binds all.
(3) If more than one person casts votes, but the
vote is evenly split on a particular matter, the votes shall be
deemed cast proportionately as split.
(f) Any holder of shares entitled to vote on any
matter
may cast a portion of the votes in favor of such matter and
refrain from casting the remaining votes or cast the same against
the proposal, except in the case of elections of directors. If
such holder entitled to vote fails to specify the number of
affirmative votes, it will be conclusively presumed that the
holder is casting affirmative votes with respect to all shares
held.
(g) If a quorum is present, the affirmative vote of
holders of a majority of the shares represented at the meeting
and entitled to vote on any matter shall be the act of the
shareholders, unless a vote of greater number or voting by
classes is required by the laws of the State of Nevada, the
Articles of Incorporation and these By-Laws.
Section 1.09 Proxies. At any meeting of shareholders, any
holder of shares entitled to vote may authorize another person or
persons to vote by proxy with respect to the shares held by an
instrument in writing and subscribed to by the holder of such
shares entitled to vote. No proxy shall be valid after the
expiration of six (6) months from the date of execution thereof,
unless coupled with an interest or unless otherwise specified in
the proxy. In no event shall the term of a proxy exceed seven
(7)years from the date of its execution. Every proxy shall
continue
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<PAGE>
in full force and effect until its expiration or revocation.
Revocation may be effected by filing an instrument revoking the
same or a duly-executed proxy bearing a later date with the
secretary of the corporation.
Section 1.10 Order of Business. At the annual shareholders
meeting, the regular order of business shall be as follows:
(1) Determination of shareholders present and
existence of quorum;
(2) Reading and approval of the minutes of the
previous meeting or meetings;
(3) Reports of the Board of Directors, the
president, treasurer and secretary of the corporation, in the
order
named;
(4) Reports of committee;
(5) Election of directors;
(6) Unfinished business;
(7) New business;
(8) Adjournment.
Section 1.11 Absentees Consent to Meetings. Transactions
of any meeting of the shareholders are as valid as though had at
a meeting duly-held after regular call and notice if a quorum is
present, either in person or by proxy, and if, either before or
after the meeting, each of the persons entitled to vote, not
present in person or by proxy (and those who, although present,
either object at the beginning of the meeting to the transaction
of any business because the meeting has not been lawfully called
or convened or expressly object at the meeting to the
consideration of matters not included in the notice which are
legally required to be included therein), signs a written waiver
of notice and/or consent to the holding of the meeting or an
approval of the minutes thereof. All such waivers, consents, and
approvals shall be filed with the corporate records and made a
part of the minutes of the meeting. Attendance of a person at a
meeting shall constitute a waiver of notice of such meeting,
except when the person objects at the beginning of the meeting to
the transaction of any business because the meeting is not
lawfully called or convened and except that attendance at a
meeting is not a waiver of any right to object to the
consideration of matters not included in the notice if such
objection is expressly made at the beginning. Neither the
business
to be transacted at nor the purpose of any regular or special
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<PAGE>
meeting of shareholders need be specified in any written waiver
of notice, except as otherwise provided in Section 1.04(b) of
these By-Laws.
Section 1.12 Action Without Meeting. Any action which may
be taken by the vote of the shareholders at a meeting may be
taken without a meeting if consented to by the holders of a
majority of the shares entitled to vote or such greater
proportion as may be required by the laws of the State of Nevada,
the Articles of Incorporation, or these ByLaws. Whenever action
is taken by written consent, a meeting of shareholders needs not
be called or noticed.
ARTICLE II
DIRECTORS
Section 2.01 Number, Tenure and Qualification. Except as
otherwise provided herein, the Board of Directors of the
corporation shall consist of at least one (1) but no more than
nine (9) persons, who shall be elected at the annual meeting of
the shareholders of the corporation and who shall hold office for
one (1) year or until their successors are elected and qualify.
Section 2.02 Resignation. Any director may resign effective
upon giving written notice to the chairman of the Board of
Directors, the president, or the secretary of the corporation,
unless the notice specifies a later time for effectiveness of
such resignation. If the Board of Directors accepts the
resignation of a director tendered to take effect at a future
date, the Board or the shareholders may elect a successor to take
office when the resignation becomes effective.
Section 2.03 Reduction in Number. No reduction of the
number of directors shall have the effect of removing any
director prior to the expiration of his term of office.
Section 2.04 Removal.
(a) The Board of Directors or the shareholders of the
corporation, by a majority vote, may declare vacant the office of
a director who has been declared incompetent by an order of a
court of competent jurisdiction or convicted of a felony.
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Section 2.05 Vacancies.
(a) A vacancy in the Board of Directors because of death,
resignation, removal, change in number of directors, or otherwise
may be filled by the shareholders at any regular or special
meeting or any adjourned meeting thereof or the remaining
director(s) by the affirmative vote of a majority thereof. A
Board of Directors consisting of less than the maximum number
authorized in Section 2.01 of ARTICLE II constitutes vacancies on
the Board of Directors for purposes of this paragraph and may be
filled as set forth above including by the election of a majority
of the remaining directors. Each successor so elected shall hold
office until the next annual meeting of shareholders or until a
successor shall have been duly-elected and qualified.
(b) If, after the filling of any vacancy by the
directors, the directors then in office who have been elected by
the shareholders shall constitute less than a majority of the
directors then in office, any holder or holders of an aggregate
of five percent (5%) or more of the total number of shares
entitled to vote may call a special meeting of shareholders to be
held to elect the entire Board of Directors. The term of office
of any director shall terminate upon such election of a
successor.
Section 2.06 Regular Meetings. Immediately following the
adjournment of, and at the same place as, the annual meeting of
the shareholders, the Board of Directors, including directors
newly elected, shall hold its annual meeting without notice,
other than this provision, to elect officers of the corporation
and to transact such further business as may be necessary or
appropriate. The Board of Directors may provide by resolution
the place, date and hour for holding additional regular meetings.
Section 2.07 Special Meetings. Special meetings of the
Board of Directors may be called by the chairman and shall be
called by the chairman upon the request of any two (2) directors
or the president of the corporation.
Section 2.08 Place of Meetings. Any meeting of the
directors of the corporation may be held at its principal office
in the State of Nevada, or at such other place in or out of the
United States as the Board of Directors may designate. A waiver
or notice signed by the directors may designate any place for the
holding of such meeting.
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<PAGE>
Section 2.09 Notice of Meetings. Except as otherwise
provided in Section 2.06, the chairman shall deliver to all
directors written or printed notice of any special meeting, at
least three (3) days before the date of such meeting, by delivery
of such notice personally or mailing such notice first class
mail, or by telegram. If mailed, the notice shall be deemed
delivered two (2) business days following the date the same is
deposited in the United States mail, postage prepaid. Any
director may waive notice of any meeting, and the attendance of a
director at a meeting shall constitute a waiver of notice of such
meeting, unless such attendance is for the express purpose of
objecting to the transaction of business threat because the
meeting is not properly
called or convened.
Section 2.10 Quorum: Adjourned Meetings.
(a) A majority of the Board of Directors in office
shall constitute a quorum.
(b) At any meeting of the Board of Directors where a
quorum is not present, a majority of those present may adjourn,
from time to time, until a quorum is present, and no notice of
such adjournment shall be required. At any adjourned meeting
where a quorum is present, any business may be transacted which
could have been transacted at the meeting originally called.
Section 2.11 Action Without Meeting. Any action required
or permitted to be taken at any meeting of the Board of Directors
or any committee thereof may be taken without a meeting if a
written consent thereto is signed by all of the members of the
Board of Directors or of such committee. Such written consent or
consents shall be filed with the minutes of the proceedings of
the Board of Directors or committee. Such action by written
consent shall have the same force and effect as the unanimous
vote of the Board of Directors or committee.
Section 2.12 Telephonic Meetings. Meetings of the Board of
Directors may be held through the use of a conference telephone
or similar communications equipment so long as all members
participating in such meeting can hear one another at the time of
such meeting. Participation in such a meeting constitutes
presence in person at such meeting.
Section 2.13 Board Decisions. The affirmative vote of a
majority of the directors present at a meeting at which a quorum
is present shall be the act of the Board of Directors.
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Section 2.14 Powers and Duties.
(a) Except as otherwise provided in the Articles of
Incorporation or the laws of the State of Nevada, the Board of
Directors is invested with the complete and unrestrained
authority to manage the affairs of the corporation, and is
authorized to exercise for such purpose as the general agent of
the corporation,its entire corporate authority in such manner as
it sees fit. The Board of Directors may delegate any of its
authority to manage, control or conduct the current business of
the corporation to any standing or special committee or to any
officer or agent and to appoint any persons to be agents of the
corporation with such powers, including the power to
sub-delegate, and upon such terms as may be deemed fit.
(b) The Board of Directors shall present to the
shareholders at annual meetings of the shareholders, and when
called for by a majority vote of the shareholders at a special
meeting of the shareholders, a full and clear statement of the
condition of the corporation, and shall, at request, furnish each
of the shareholders with a true copy thereof.
(c) The Board of Directors, in its discretion, may
submit any contract or act for approval or ratification at any
annual meeting of the shareholders or any special meeting
properly called for the purpose of considering any such contract
or act,provided a quorum is present. The contract or act shall
be valid and binding upon the corporation and upon all the
shareholders thereof, if approved and ratified by the affirmative
vote of a majority of the shareholders at such meeting.
(d) In furtherance and not in limitation of the powers
conferred by the laws of the State of Nevada, the Board of
Directors is expressly authorized and empowered to issue stock of
the Corporation for money, property, services rendered, labor
performed, cash advanced, acquisitions for other corporations or
for any other assets of value in accordance with the action of
the Board of Directors without vote or consent of the
shareholders and the judgment of the Board of Directors as to the
value received and in return therefore shall be conclusive and
said stock, when issued, shall be fully-paid and non-assessable.
Section 2.15 Compensation. The directors shall be allowed
and paid all necessary expenses incurred in attending any
meetings of the Board, but shall not receive any compensation for
their services as directors until such time as the corporation is
able to declare and pay dividends on its capital stock.
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Section 2.16 Board Officers.
(a) At its annual meeting, the Board of Directors
shall elect, from among its members, a chairman to preside at the
meetings of the Board of Directors. The Board of Directors may
also elect such other board officers and for such term as it may,
from time to time, determine advisable.
(b) Any vacancy in any board office because of death,
resignation, removal or otherwise may be filled by the Board of
Directors for the unexpired portion of the term of such office.
Section 2.17 Order of Business. The order of
business at any meeting of the Board of Directors shall be as
follows:
(1) Determination of members present and
existence of quorum;
(2) Reading and approval of the minutes of any
previous meeting or meetings;
(3) Reports of officers and committeemen;
(4) Election of officers;
(5) Unfinished business;
(6) New business;
(7) Adjournment.
ARTICLE III
OFFICERS
Section 3.01 Election. The Board of Directors, at its
first meeting following the annual meeting of shareholders, shall
elect a president, a secretary and a treasurer to hold office for
one (1) year next coming and until their successors are elected
and qualify. Any person may hold two or more offices. The Board
of Directors may, from time to time, by resolution, appoint one
or more vice presidents, assistant secretaries, assistant
treasurers and transfer agents of the corporation as it may deem
advisable;prescribe their duties; and fix their compensation.
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Section 3.02 Removal; Resignation. Any officer or agent
elected or appointed by the Board of Directors may be removed by
it whenever, in its judgment, the best interest of the
corporation would be served thereby. Any officer may resign at
any time upon written notice to the corporation without prejudice
to the rights, if any, of the corporation under any contract to
which the resigning officer is a party.
Section 3.03 Vacancies. Any vacancy in any office because
of death, resignation, removal, or otherwise may be filled by the
Board of Directors for the unexpired portion of the term of such
office.
Section 3.04 President. The president shall be the general
manager and executive officer of the corporation, subject to the
supervision and control of the Board of Directors, and shall
direct the corporate affairs, with full power to execute all
resolutions and orders of the Board of Directors not especially
entrusted to some other officer of the corporation. The
president shall preside at all meetings of the shareholders and
shall sign the certificates of stock issued by the corporation,
and shall perform such other duties as shall be prescribed by the
Board of Directors.
Unless otherwise ordered by the Board of Directors, the
president shall have full power and authority on behalf of the
corporation to attend and to act and to vote at any meetings of
the shareholders of any corporation in which the corporation may
hold stock and, at any such meetings, shall possess and may
exercise any and all rights and powers incident to the ownership
of such stock. The Board of Directors, by resolution from time to
time, may confer like powers on any person or persons in place of
the president to represent the corporation for these purposes.
Section 3.05 Vice President. The Board of Directors may
elect one or more vice presidents who shall be vested with all
the powers and perform all the duties of the president whenever
the president is absent or unable to act, including the signing
of the certificates of stock issued by the corporation, and the
vice president shall perform such other duties as shall be
prescribed by the Board of Directors.
Section 3.06 Secretary. The secretary shall keep the
minutes of all meetings of the shareholders and the Board of
Directors in books provided for that purpose. The secretary
shall attend to the giving and service of all notices of the
corporation, may sign with the president in the name of the
corporation all contracts authorized by the Board of Directors or
appropriate committee, shall have the custody of the corporate
seal, shall affix the
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corporate seal to all certificates of stock duly issued by the
corporation, shall have charge of stock certificate books,
transfer books and stock ledgers, and such other books and papers
as the Board of Directors or appropriate committee may direct,
and shall, in general perform all duties incident to the office
of the secretary. All corporate books kept by the secretary
shall be open for examination by any director at any reasonable
time.
Section 3.07 Assistant Secretary. The Board of Directors
may appoint an assistant secretary who shall have such powers
and perform such duties as may be prescribed for him by the
secretary of the corporation or by the Board of Directors.
Section 3.08 Treasurer. The treasurer shall be the chief
financial officer of the corporation, subject to the supervision
and control of the Board of Directors, and shall have custody of
all the funds and securities of the corporation. When necessary
or proper, the treasurer shall endorse on behalf of the
corporation for collection checks, notes and other obligations,
and shall deposit all monies to the credit of the corporation in
such bank or banks or other depository as the Board of Directors
may designate, and shall sign all receipts and vouchers for
payments made by the corporation. Unless otherwise specified by
the Board of Directors, the treasurer shall sign with the
president all bills of exchange and promissory notes of the
corporation, shall also have the care and custody of the stocks,
bonds, certificates, vouchers, evidence of debts, securities and
such other property belonging to the corporation as the Board of
Directors shall designate, and shall sign all papers required by
law, by these By-laws or by the Board of Directors to be signed
by the treasurer. The treasurer shall enter regularly in the
books of the corporation, to be kept for that purpose, full and
accurate accounts of all monies received and paid on account of
the corporation and whenever required by the Board of Directors,
the treasurer shall render a statement of any or all accounts.
The treasurer shall at all reasonable times exhibit the books of
account to any directors of the corporation and shall perform all
acts incident to the position of treasurer subject to the control
of the Board of Directors. The treasurer shall, if required by
the Board of Directors,give a bond to the corporation in such sum
and with such security as shall be approved by the Board of
Directors for the faithful performance of all the duties of the
treasurer and for restoration to the corporation in the event of
the treasurer's death, resignation, retirement, or removal from
office, of all books, records, papers, vouchers, money and other
property belonging to the corporation. The expense of such bond
shall be borne by the corporation.
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Section 3.09 Assistant Treasurer. The Board of Directors
may appoint an assistant treasurer who shall have such powers and
perform such duties as may be prescribed by the treasurer of the
corporation or by the Board of Directors, and the Board of
Directors may require the assistant treasurer to give a bond to
the corporation in such sum and with such security as it may
approve, for the faithful performance of the duties of assistant
treasurer, and for the restoration to the corporation, in the
event of the assistant treasurer's death, resignation, retirement
or removal from office, of all books, records, papers, vouchers,
money and other property belonging to the corporation. The
expense of such bond shall be borne by the corporation.
ARTICLE IV
CAPITAL STOCK
Section 4.01 Issuance. Shares of capital stock of the
corporation shall be issued in such manner and at such times and
upon such conditions as shall be prescribed by the Board of
Directors.
Section 4.02 Certificates. Ownership in the corporation
shall be evidenced by certificates for shares of stock in such
form as shall be prescribed by the Board of Directors, shall be
under the seal of the corporation and shall be signed by the
president or the vice president and also by the secretary or an
assistant secretary. Each certificate shall contain the name of
the record holder, the number, designation, if any, class or
series of shares represented, a statement of summary of any
applicable rights, preferences, privileges, or restrictions
thereon, and a statement that the shares are assessable, if
applicable. All certificates shall be consecutively numbered.
The name and address of the shareholder, the number of shares,
and the date of issue shall be entered on the stock transfer
books of the corporation.
Section 4.03 Surrender: Lost or Destroyed Certificates.
All certificates surrendered to the corporation, except those
representing shares of treasury stock, shall be canceled and no
new certificates shall be issued until the former certificate
for a like number of shares shall have been canceled, except that
in case of a lost, stolen, destroyed or mutilated certificate, a
new one may be issued therefor. However, any shareholder
applying for the issuance of a stock certificate in lieu of one
alleged to have been lost, stolen, destroyed or mutilated shall,
prior to the issuance of a replacement, provide the corporation
with his, her or its affidavit of the facts surrounding the loss,
theft, destruction or mutilation and an indemnity bond in an
amount and upon such terms
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as the treasurer, or the Board of Directors, shall require. In
no case shall the bond be in amount less than twice the current
market value of the stock and it shall indemnify the corporation
against any loss, damage, cost or inconvenience arising as a
consequence of the issuance of a replacement certificate.
Section 4.04 Replacement Certificate. When the Articles of
Incorporation are amended in any way affecting the statements
contained in the certificates for outstanding shares of capital
stock of the corporation or it becomes desirable for any reason,
including, without limitation, the merger or consolidation of the
corporation with another corporation or the reorganization of the
corporation, to cancel any outstanding certificate for shares and
issue a new certificate therefor conforming to the rights of the
holder, the Board of Directors may order any holders of
outstanding certificates for shares to surrender and exchange the
same for new certificates within a reasonable time to be fixed by
the Board of Directors. The order may provide that a holder of
any certificate(s) ordered to be surrendered shall not be
entitled to vote, receive dividends or exercise any other rights
of shareholders until the holder has complied with the order
provided that such order operates to suspend such rights only
after notice and until compliance.
Section 4.05 Transfer of Shares. No transfer of stock
shall be valid as against the corporation except on surrender and
cancellation by the certificate therefor, accompanied by an
assignment or transfer by the registered owner made either in
person or under assignment. Whenever any transfer shall be
expressly made for collateral security and not absolutely, the
collateral nature of the transfer shall be reflected in the entry
of transfer on the books of the corporation.
Section 4.06 Transfer Agent. The Board of Directors may
appoint one or more transfer agents and registrars of transfer
and may require all certificates for shares of stock to bear the
signature of such transfer agent and such registrar of transfer.
Section 4.07 Stock Transfer Books. The stock transfer books
shall be closed for a period of ten (10) days prior to all
meetings of the shareholders and shall be closed for the payment
of dividends as provided in Article V hereof and during such
periods as, from time to time, may be fixed by the Board of
Directors, and, during such periods, no stock shall be
transferable.
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Section 4.08 Miscellaneous. The Board of Directors shall
have the power and authority to make such rules and regulations
not inconsistent herewith as it may deem expedient concerning the
issue, transfer and registration of certificates for shares of
the capital stock of the corporation.
ARTICLE V
DIVIDENDS
Section 5.01 Dividends may be declared, subject to the
provisions of the laws of the State of Nevada and the Articles of
Incorporation, by the Board of Directors at any regular or
special meeting and may be paid in cash, property, shares of
corporate stock, or any other medium. The Board of Directors may
fix in advance a record date, as provided in Section 1.06 of
these By-laws, prior to the dividend payment for the purpose of
determining shareholders entitled to receive payment of any
dividend. The Board of Directors may close the stock transfer
books for such purpose for a period of not more than ten (10)
days prior to the payment date of such dividend.
ARTICLE VI
OFFICES; RECORDS; REPORTS; SEAL AND FINANCIAL MATTERS
Section 6.01 Principal Office. The principal office of the
corporation in the State of Nevada shall be the Law Offices of
Max C. Tanner, 2950 East Flamingo Road, Suite G, Las Vegas,
Nevada 89121, and the corporation may have an office in any other
state or territory as the Board of Directors may designate.
Section 6.02 Records. The stock transfer books and a
certified copy of the By-laws, Articles of Incorporation, any
amendments thereto, and the minutes of the proceedings of the
shareholders, the Board of Directors, and committees of the Board
of Directors shall be kept at the principal office of the
corporation for the inspection of all who have the right to see
the same and for the transfer of stock. All other books of the
corporation shall be kept at such places as may be prescribed by
the Board of Directors.
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Section 6.03 Financial Report on Request. Any shareholder
or shareholders holding at least five percent (5%) of the
outstanding shares of any class of stock may make a written
request for an income statement of the corporation for the three
(3) month, six (6) month, or nine (9) month period of the current
fiscal year ended more than thirty (30) days prior to the date of
the request and a balance sheet of the corporation as of the end
of such period. In addition, if no annual report for the last
fiscal year has been sent to shareholders, such shareholder or
shareholders may make a request for a balance sheet as of the end
of such fiscal year and an income statement and statement of
changes in financial position for such fiscal year. The
statement shall be delivered or mailed to the person making the
request within thirty (30) days thereafter. A copy of the
statements shall be kept on file in the principal office of the
corporation for twelve (12) months, and such copies shall be
exhibited at all reasonable times to any shareholder demanding an
examination of them or a copy shall be mailed to each
shareholder. Upon request by any shareholder, there shall be
mailed to the shareholder a copy of the last annual, semiannual
or quarterly income statement which it has prepared and a balance
sheet as of the end of the period. The financial statements
referred to in this Section 6.03 shall be accompanied by
the report thereon, if any, of any independent accountants
engaged by the corporation or the certificate of an authorized
officer of the corporation that such financial statements were
prepared without audit from the books and records of the
corporation.
Section 6.04 Right of Inspection.
(a) The accounting books and records and minutes of
proceedings of the shareholders and the Board of Directors and
committees of the Board of Directors shall be open to inspection
upon the written demand of any shareholder or holder of a voting
trust certificate at any reasonable time during usual business
hours for a purpose reasonably related to such holder's interest
as a shareholder or as the holder of such voting trust
certificate. This right of inspection shall extend to the records
of the subsidiaries, if any, of the corporation. Such inspection
may be made in person or by agent or attorney, and the right of
inspection includes the right to copy and make extracts.
(b) Every director shall have the absolute right at any
reasonable time to inspect and copy all books, records and
documents of every kind and to inspect the physical properties of
the corporation and/or its subsidiary corporations. Such
inspection may be made in person or by agent or attorney, and the
right of inspection includes the right to copy and make extracts.
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Section 6.05 Corporate Seal. The Board of Directors may,
by resolution, authorize a seal, and the seal may be used by
causing it, or a facsimile, to be impressed or affixed or
reproduced or otherwise. Except when otherwise specifically
provided herein, any officer of the corporation shall have the
authority to affix the seal to any document requiring it.
Section 6.06 Fiscal Year. The fiscal year-end of the
corporation shall be the calendar year or such other term as may
be fixed by resolution of the Board of Directors.
Section 6.07 Reserves. The Board of Directors may create,
by resolution, out of the earned surplus of the corporation such
reserves as the directors may, from time to time, in their
discretion, think proper to provide for contingencies, or to
equalize dividends or to repair or maintain any property of the
corporation, or for such other purpose as the Board of Directors
may deem beneficial to the corporation, and the directors may
modify or abolish any such reserves in the manner in which they
were created.
ARTICLE VII
INDEMNIFICATION
Section 7.01 Indemnification. The corporation shall,
unless prohibited by Nevada Law, indemnify any person (an
"Indemnitee") who is or was involved in any manner (including,
without limitation, as a party or a witness) or is threatened to
be so involved in any threatened, pending or completed action
suit or proceeding, whether civil, criminal, administrative,
arbitrative or investigative, including without limitation, any
action, suit or proceeding brought by or in the right of the
corporation to procure a judgment in its favor (collectively, a
"Proceeding") by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint
venture, trust, employee benefit plan or other entity or
enterprise, against all Expenses and Liabilities actually and
reasonably incurred by him in connection with such Proceeding.
The right to indemnification conferred in this Article shall be
presumed to have been relied upon by the directors, officers,
employees and agents of the corporation and shall be enforceable
as a contract right and inure to the benefit of heirs, executors
and administrators of such individuals.
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Section 7.02 Indemnification Contracts. The Board of
Directors is authorized on behalf of the corporation, to enter
into, deliver and perform agreements or other arrangements to
provide any Indemnitee with specific rights of indemnification in
addition to the rights provided hereunder to the fullest extent
permitted by Nevada Law. Such agreements or arrangements may
provide (i) that the Expenses of officers and directors incurred
in defending a civil or criminal action, suit or proceeding, must
be paid by the corporation as they are incurred and in advance of
the final disposition of any such action, suit or proceeding
provided that, if required by Nevada Law at the time of such
advance, the officer or director provides an undertaking to repay
such amounts if it is ultimately determined by a court of
competent jurisdiction that such individual is not entitled to be
indemnified against such expenses, (iii) that the Indemnitee
shall be presumed to be entitled to indemnification under this
Article or such agreement or arrangement and the corporation
shall have the burden of proof to overcome that presumption,
(iii) for procedures to be followed by the corporation and the
Indemnitee in making any determination of entitlement to
indemnification or for appeals therefrom and (iv) for insurance
or such other Financial Arrangements described in Paragraph 7.02
of this Article, all as may be deemed appropriate by the Board of
Directors at the time of execution of such agreement or
arrangement.
Section 7.03 Insurance and Financial Arrangements. The
corporation may, unless prohibited by Nevada Law, purchase and
maintain insurance or make other financial arrangements
("Financial Arrangements") on behalf of any Indemnitee for any
liability asserted against him and liability and expenses
incurred by him in his capacity as a director, officer, employee
or agent, or arising out of his status as such, whether or not
the corporation has the authority to indemnify him against such
liability and expenses. Such other Financial Arrangements may
include (i) the creation of a trust fund, (ii) the establishment
of a program of self-insurance, (iii) the securing of the
corporation's obligation of indemnification by granting a
security interest or other lien on any assets of the corporation,
or (iv) the establishment of a letter of credit, guaranty or
surety.
Section 7.04 Definitions. For purposes of this Article:
Expenses. The word "Expenses" shall be broadly
construed and, without limitation, means (i) all direct and
indirect costs incurred, paid or accrued, (ii) all attorneys'
fees, retainers, court costs, transcripts, fees of experts,
witness fees, travel expenses, food and lodging expenses while
traveling, duplicating costs, printing and binding costs,
telephone charges, postage, delivery service, freight or other
transportation fees and expenses, (iii) all other
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disbursements and out-of-pocket expenses, (iv) amounts paid in
settlement, to the extent permitted by Nevada Law, and(v)
reasonable compensation for time spent by the Indemnitee for
which he is otherwise not compensated by the corporation or any
third party, actually and reasonably incurred in connection with
either the appearance at or investigation, defense, settlement or
appeal
of a Proceeding or establishing or enforcing a right to
indemnification under any agreement or arrangement, this Article,
the Nevada Law or otherwise; provided, however, that "Expenses"
shall not include any judgments or fines or excise taxes or
penalties imposed under the Employee Retirement Income Security
Act of 1974, as amended ("ERISA") or other excise taxes or
penalties.
Liabilities. "Liabilities" means liabilities of any
type whatsoever, including, but not limited to, judgments or
fines, ERISA or other excise taxes and penalties, and amounts
paid in settlement.
Nevada Law. "Nevada Law" means Chapter 78 of the
Nevada Revised Statutes as amended and in effect from time to
time or any successor or other statutes of Nevada having similar
import and effect.
This Article. "This Article" means Paragraphs 7.01
through 7.04 of these bylaws or any portion of them.
Power of Stockholders. Paragraphs 7.01 through 7.04,
including this Paragraph, of these Bylaws may be amended by the
stockholders only by vote of the holders of sixty-six and
two-thirds percent (66 2/3%) of the entire number of shares of
each class, voting separately, of the outstanding capital stock
of the corporation (even though the right of any class to vote is
otherwise restricted or denied); provided, however, no amendment
or repeal of this Article shall adversely affect any right of any
Indemnitee existing at the time such amendment or repeal becomes
effective.
Power of Directors. Paragraphs 7.01 through 7.04 and
this Paragraph of these Bylaws may be amended or repealed by the
Board of Directors only by vote of eighty percent (80%) of the
total number of Directors and the holders of sixty-six and
two-thirds percent (66 2/3) of the entire number of shares of
each class, voting separately, of the outstanding capital stock
of the corporation (even though the right of any class to vote is
otherwise restricted or denied); provided, however, no amendment
or repeal of this Article shall adversely affect any right of any
Indemnitee existing at the time such amendment or repeal becomes
effective.
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ARTICLE VIII
BY-LAWS
Section 8.01 Amendment. Amendments and changes of these
By-Laws may be made at any regular or special meeting of the
Board of Directors by a vote of not less than all of the entire
Board, or may be made by a vote of, or a consent in writing
signed by the holders of a majority of the issued and outstanding
capital stock.
Section 8.02 Additional By-Laws. Additional by-laws not
inconsistent herewith may be adopted by the Board of Directors at
any meeting of the Board of Directors at which a quorum is
present by an affirmative vote of a majority of the directors
present or by the unanimous consent of the Board of Directors in
accordance with Section 2.11 of these By-laws.
CERTIFICATION
I, the undersigned, being the duly elected secretary of the
Corporation, do hereby certify that the foregoing By-laws were
adopted by the Board of Directors on the 3rd day of March, 1995.
/s/MAX C. TANNER
-------------------
Max C. Tanner
Secretary
RHINO ENTERPRISES GROUP, INC.
EMPLOYMENT AND STOCK OPTION AGREEMENT
Agreement made as of this 27th day of October, 1999, by and
between Robert W. Moehler, an individual residing in Mesquite,
Texas ("Employee"), and Rhino Enterprises Group, Inc., a Nevada
corporation (the "Company").
PREAMBLE
The Board of Directors of the Company recognizes Employee's
potential contribution to the growth and success of the Company
and desires to assure the Company of Employee's employment in an
executive capacity as President and to compensate him therefor.
Employee wants to be employed by the Company and to commit
himself to serve the Company on the terms herein provided. In
connection with his employment, the Company will offer options to
purchase certain Restricted Stock, (as hereinafter defined) on
the terms herein provided, including particularly Employee's
undertaking to remain loyal to the Company. Employee's duties
will expressly include operating the Company on a day-to-day
basis on behalf of and for the account of the Company.
NOW, THEREFORE, in consideration of the foregoing and of the
respective covenants and agreements of the parties, the receipt
and sufficiency of which are hereby acknowledged, the parties
agree as follows:
1. Definitions
"Benefits" shall mean all the fringe benefits which may be
approved by the Board from time to time and established by the
Company for the benefit of employees generally and/or for key
employees of the Company as a class, including, but not limited
to, regular holidays, vacations, absences resulting from illness
or accident, health insurance, disability and medical plans
(including dental and prescription drug), group life insurance,
and pension, profit-sharing and stock bonus plans or their
equivalent.
"Board" shall mean the Board of Directors of the Company,
together with an executive committee thereof (if any), as same
shall be constituted from time to time.
"Cause" for termination shall mean (i) Employee's arrest for a
felony or crime of moral turpitude,(ii) acts of Employee which,
in the judgment of the Board, constitute fraud or willful
misconduct on the part of Employee in connection with his duties
under this Agreement, including but not limited to,
misappropriation or embezzlement in the performance of duties
as an employee of the Company or willfully engaging in conduct
materially injurious to the Company and in violation of the
covenants contained in this Agreement, or (iii) gross misconduct,
including but not limited to, willful failure of Employee either
to (a) continue to obey lawful written instruction of the Board
after five (5) days notice in writing of Employee's failure to do
so and the Board's intention to terminate Employee if such
failure is not corrected, or (b) correct any conduct of Employee
which constitutes a material breach of this Agreement after
thirty (30) days notice in writing of Employee's failure to do so
and the Board's intention to terminate Employee if such
<PAGE>
failure is not corrected. Employee agrees, upon the request of
the Board to submit to drug and alcohol testing. Employee's
failure to comply with such request, or failure to test
negatively for drugs or alcohol, shall also constitute Cause.
"Chairman" shall mean the individual designated by the Board
from time to time as its chairman.
"Change of Control" shall mean the occurrence of one or more
of the following three events:
(1) After the effective date of this Agreement, any person
becomes a beneficial owner (as such term is defined in Rule
13d-3 promulgated under the Securities Exchange Act of 1934, as
amended) directly or indirectly of securities representing 33%
or more of the total number of votes that may be cast for the
election of directors of the Company;
(2) Within two (2) years after a merger, consolidation,
liquidation or sale of assets involving the Company, or a
contested election of a Company director, or any combination of
the foregoing, the individuals who were directors of the
Company immediately prior thereto shall cease to constitute a
majority of the Board; or
(3) Within two (2) years after a tender offer or exchange
offer for voting securities of the Company, the individuals who
were directors of the Company immediately prior thereto shall
cease to constitute a majority of the Board.
"Company" shall mean Rhino Enterprises Group, Inc., a Nevada
corporation, together with such parent compan(ies) and/or
subsidiaries of the Company as may from time to time exist.
"Disability" shall mean a written determination by a physician
mutually agreeable to the Company and Employee (or, in the event
of Employee's total physical or mental disability, Employee's
legal representative) that Employee is physically or mentally
unable to perform his duties of President under this Agreement
and that such disability can reasonably be expected to continue
for a period of six (6) consecutive months or for shorter periods
aggregating one hundred and eighty (180) days in any
twelve-(12)-month period.
"Employee" shall mean Robert W. Moehler and, if the context
requires, his heirs, personal representatives, and permitted
successors and assigns.
"Person" shall mean any natural person, incorporated entity,
limited or general partnership, business trust, association,
agency (governmental or private), division, political sovereign,
or subdivision or instrumentality, including those groups
identified as "persons" in 13(d)(3) and 14(d)(2) of the
Securities Exchange Act of 1934, as amended.
"President" shall mean the individual having responsibility to
the Board for
<PAGE>
direction and management of the operational affairs of the
Company, subject to the control of the Chief Executive Officer of
the Company and the Board, and who reports and is accountable to
the Board and the Chief Executive Officer.
"Restricted Stock" shall mean the Company's common stock,
$.001 par value per share.
"Reorganization" shall mean any transaction, or any series of
transactions consummated in a 12-month period, pursuant to which
any Person acquires (by merger, acquisition, or otherwise) all or
substantially all of the assets of the Company or the then
outstanding equity securities of the Company and the Company is
not the surviving entity, the Company being deemed surviving if
and only if the majority of the Board of Directors of the
ultimate parent of the surviving entity were directors of the
Company prior to its organization.
"Territory" shall mean area which is within a ninety (90) mile
radius of any office of the Company or its affiliates.
2. Position, Responsibilities, and Term of Employment.
2.01 Position. Employee shall serve the Company as President
and in such additional management position(s) as the Board shall
designate. In this capacity Employee shall, subject to the Bylaws
of the Company, and to the direction of the Chief Executive
Officer and Board, serve the Company by performing such duties
and carrying out such responsibilities as are normally related to
the position of President in accordance with the standards of the
industry.
2.02 Best Efforts Covenant. Employee will, to the best of
his ability, devote his full professional and business time and
best efforts to the performance of his duties for the Company and
its subsidiaries and affiliates.
2.03 Exclusivity Covenant. Other than Employee's ownership of
and affiliation with Memorabilia & Antiquities, Inc., during the
Agreement's term, Employee will not, without the consent of the
Board, undertake or engage in any other employment, occupation or
business enterprise other than a business enterprise in which
Employee does not actively participate. Further, Employee agrees
not to acquire, assume, or participate in, directly or
indirectly, any position, investment, or interest in the
Territory adverse or antagonistic to the Company, its business or
prospects, financial or otherwise, or take any action towards any
of the foregoing. The provisions of this Section shall not
prevent Employee from owning shares of any competitor of the
Company so long as such shares (i) do not constitute more than 5%
of the outstanding equity of such competitor, and (ii), are
regularly traded on a recognized exchange or listed for trading
by NASDAQ in the over-the-counter market.
2.04 Post-Employment Noncompetition Covenant. Except with the
prior written consent of the Board, Employee shall not engage in
activities in the Territory either on Employee's own behalf or
that of any other business organization, which are in direct or
indirect competition with the Company for a period of one (1)year
subsequent to Employee's voluntary withdrawal from
<PAGE>
employment with the Company (except for a termination pursuant to
a Change in Control) or the Company's termination of Employee's
employment for Cause. Employee and the Company expressly declare
that the territorial and time limitations contained in this
Section and the definition of "Territory" are entirely reasonable
at this time and are properly and necessarily required for the
adequate protection of the business and intellectual property of
the Company. If such territorial or time limitations, or any
portions thereof, are deemed to be unreasonable by a court of
competent jurisdiction, whether due to passage of time, change of
circumstances or otherwise, Employee and the Company agree to a
reduction of said territorial and/or time limitations to such
areas and/or periods of time as said court shall deem reasonable.
For a period of one year subsequent to Employee's voluntary
withdrawal from employment with the Company (except for a
termination pursuant to a Change in Control) or the Company's
termination of Employee's employment for Cause, Employee will not
without the express prior written approval of the Board (i)
directly or indirectly, in one or a series of transactions,
recruit, solicit or otherwise induce or influence any proprietor,
partner, stockholder, lender, director, officer, employee, sales
agent, joint venturer, investor, lessor, supplier, customer,
agent, representative or any other person which has a business
relationship with the Company or had a business relationship with
the Company within the twenty-four (24) month period preceding
the date of the incident in question, to discontinue, reduce, or
modify such employment, agency or business relationship with the
Company, or (ii) employ or seek to employ or cause any business
organization in direct or indirect competition with the Company
to employ or seek to employ any person or agent who is then (or
was at any time within six months prior to the date the Employee
or the competitive business employs or seeks to employ such
person) employed or retained by the Company. Notwithstanding the
foregoing, nothing herein shall prevent the Employee from
providing a letter of recommendation to an employee with respect
to a future employment opportunity.
2.05 Confidential Information. Employee recognizes and
acknowledges that the Company's trade secrets and proprietary
information and know-how, as they may exist from time to time
(collectively, "Confidential Information"), are valuable, special
and unique assets of the Company's business, access to and
knowledge of which are essential to the performance of Employee's
duties hereunder. Employee will not, during or after the term of
his employment by the Company, in whole or in part, disclose such
secrets, information or know-how to any Person for any reason or
purpose whatsoever, nor shall Employee make use of any such
property for his own purposes or for the benefit of any Person
(except the Company) under any circumstances during or after the
term of his employment, provided that after the term of his
employment these restrictions shall not apply to such secrets,
information and know-how which are then in the public domain
(provided that Employee was not responsible, directly or
indirectly, for such secrets, information or processes entering
the public domain without the Company's consent). Employee shall
have no obligation hereunder to keep confidential any
Confidential Information if and to the extent disclosure of any
thereof is specifically required by law; provided, however, that
in the event disclosure is required by applicable law, the
Employee shall provide the Company with prompt notice of such
requirement, prior to making any disclosure, so that the Company
may seek an appropriate protective order. Employee agrees to hold
as the Company's property all memoranda, books, papers, letters,
customer lists, processes, computer software, records, financial
information, policy and procedure manuals, training and
recruiting procedures and other data, and all copies thereof and
therefrom, in any way relating to the Company's business and
affairs, whether made by him or otherwise coming
<PAGE>
into his possession, and on termination of his employment, or on
demand of the Company at any time, to deliver the same to the
Company. Employee agrees that he will not use or disclose to
other employees of the Company, during the term of this
Agreement, confidential information belonging to his former
employers.
Employee shall use his best efforts to prevent the removal of
any Confidential Information from the premises of the Company,
except as required in his normal course of employment by the
Company. Employee shall use his best efforts to cause all persons
or entities to whom any Confidential Information shall be
disclosed by him hereunder to observe the terms and conditions
set forth herein as though each such person or entity was bound
hereby.
2.06 Nonsolicitation. Except with the prior written consent
of the Board, Employee shall not solicit customers, clients, or
employees of the Company or any of its affiliates for a period of
twelve (12) months from the date of the expiration of this
Agreement. Without limiting the generality of the foregoing,
Employee will not willfully canvas, solicit nor accept any such
business in competition with the business of the Company from any
customers of the Company with whom Employee had contact during,
or of which Employee had knowledge solely as a result of, his
performance of services for the Company pursuant to this
Agreement. Employee will not directly or indirectly request,
induce or advise any customers of the Company with whom Employee
had contact during the term of this Agreement to withdraw,
curtail or cancel their business with the Company. Employee will
not induce or attempt to induce any employee of the Company to
terminate his/her employment with the Company.
2.07 Corporate Opportunity. If during the term of this
Agreement and for one year thereafter, Employee identifies, or
otherwise becomes aware of the identification by the Company of,
any Acquisition Opportunity, all rights in such Acquisition
Opportunity (as between the Company and Employee) shall belong
solely to the Company. As used herein, "Acquisition Opportunity"
means any entity engaged in the business in which the Company is
or actively proposes to engage in any territory in the world in
which the Company is conducting or proposes to conduct material
activities.
2.08 Records, Files. All records, files, drawings,
documents, equipment and the like relating to the business of the
Company which are prepared or used by Employee during the term of
his employment under this Agreement shall be and shall remain the
sole property of the Company.
2.09 Work for Hire. Employee agrees that every improvement,
invention, process, apparatus, method, design, and any other
creation that Employee may invent, discover, conceive, or
originate by himself or in conjunction with any other Person
during the term of Employee's employment under this Agreement
[that relates to the business carried on by the Company during
the term of Employee's employment under this Agreement] shall be
treated as a "work for hire" and shall be the exclusive property
of the Company. In this regard, Employee hereby disclaims any and
all interest in such items which Employee might otherwise enjoy.
Employee agrees to disclose to the Company every patent
application, notice of copyright, or other action taken by
Employee or any affiliate or assignee to protect intellectual
property during the 12 months following Employee's termination of
employment at the Company, for whatever reason, so that the
Company may
<PAGE>
determine whether to assert a claim under this Section or any
other provision of this Agreement.
2.10 Equitable Relief. Employee acknowledges that his
services to the Company are of a unique character which give them
a special value to the Company. Employee further recognizes that
violations by Employee of any one or more of the provisions of
this Section 2 may give rise to losses or damages for which the
Company cannot be reasonably or adequately compensated in an
action at law and that such violations may result in irreparable
and continuing harm to the Company. Employee agrees that,
therefore, in addition to any other remedy which the Company may
have at law and equity, including the right to withhold any
payment of compensation under Section 4 of this Agreement, the
Company shall be entitled to injunctive relief to restrain any
violation, actual or threatened, by Employee of the provisions of
this Agreement. In this regard, Employee expressly recognizes
and acknowledges that the terms and conditions of this Section 2
above are:
(a) reasonable to time and area;
(b) necessary to protect legitimate business of the Company;
and
(c) not unduly burdensome to Employee.
2.11 Severability. If any provision of this Section 2 or any
other provision of this Agreement is held by a court of competent
jurisdiction to be illegal, invalid or unenforceable under
present or future laws effective during the term hereof or any
restricted period, or any such provisions are held to be
unreasonable with respect to length of time, geographical area or
areas or activities to be restrained, such provisions shall be
construed to operate for such period of time or such geographical
area or areas and in respect of such activities as such court
shall determine to be the maximum reasonable restraint under the
circumstances, and the parties agree to submit such question or
questions to such court in the event such determination of
unreasonableness is held by such court. Additionally, if any
other provisions of this Agreement shall be construed and
enforced as illegal, invalid or unenforceable, such provision
shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never compromised a part hereof, and
the remaining provisions of this Agreement shall remain in full
force and effect and shall not be effected by the severance of
illegal, invalid or unenforceable provision or provisions.
3. Compensation.
3.01 Minimal Annual Compensation. The Company shall pay to
Employee for the services to be rendered hereunder a base salary
at an annual rate of Eighty Four Thousand Dollars ($84,000)
("Minimum Annual Compensation"). There shall be an annual review
for merit by the Board and an increase as deemed appropriate to
reflect the value of services by Employee. At no time during the
term of this Agreement shall Employee's annual base salary fall
below Minimum Annual Compensation. In addition, if the Board
increases Employee's Minimum Annual Compensation at any time
during the term of this Agreement, such increased Minimum Annual
Compensation shall become a floor below which Employee's
compensation shall not fall at any future time during the term of
this Agreement and shall become Minimum Annual Compensation.
<PAGE>
Employee's salary shall be payable in periodic installments in
accordance with the Company's usual practice for similarly
situated employees of the Company.
3.02 Incentive Compensation. In addition to Minimum Annual
Compensation, Employee shall be entitled to receive payments
under the Company's incentive compensation and/or bonus program
(s) (as in effect from time to time), if any, in such amounts as
are determined by the Company to be appropriate for similarly
situated employees of the Company. Any incentive compensation
which is not deductible in the opinion of the Company's counsel,
under Section 162(m) of the Internal Revenue Code of 1986, as
amended, shall be deferred and paid, without interest, in the
first year or years when and to the extent such payment may be
deducted, Employee's right to such payment being absolute,
subject only to the provisions of Section 4.03.
3.03 Participating in Benefits. Employee shall be entitled
to all Benefits for as long as such Benefits may remain in effect
and/or any substitute or additional Benefits made available in
the future to similarly situated employees of the Company,
subject to and on a basis consistent with the terms, conditions
and overall administration of such Benefits adopted by the
Company. Benefits paid to Employee shall not be deemed to be in
lieu of other compensation to Employee hereunder as described in
this Section 3.
3.04 Specific Benefits.
During the term of this Agreement (and thereafter to the
extent this Agreement shall require):
(a) Employee shall be entitled to three (3) weeks of paid
vacation time per year, to be taken at times mutually acceptable
to the Company and Employee.
(b) The Company shall provide fully paid accident and health
insurance for Employee and his family with limits and extent of
coverage similar to that provided by Employee's previous
employer.
(c) The Company shall obtain at its expense (subject to
Employee's insurability) an insurance policy on the life of
Employee, subject to the last sentence of this Section 3.04(c),
in the face amount of $500,000 that provides it is fully funded
after no more than five (5) years of premium payments. Employee
shall have the exclusive right to designate the beneficiaries of
such policy and change such beneficiaries from time to time. Such
policy and the proceeds and cash value thereof shall be the sole
property of Employee and the Company shall not retain any benefit
therein. The Company shall not be obligated to pay premiums for
such insurance in excess of $500 per annum.
(d) Employee shall be entitled to sick leave benefits during
the employment period in accordance with the customary policies
of the Company for its executive officers, but in no event less
than ten (10) per year. In the event of Employee's Disability,
disability insurance shall provide for the payment of Employee's
Minimum Annual Compensation for a period of not less than one (1)
year from the date of Disability.
<PAGE>
(e) In recognition of the necessity of the use of an
automobile to the efficient and expeditious performance of
Employee's services, duties and obligations to and on behalf of
the Company, the Company shall pay to the Employee an automobile
allowance of $500 per month.
(f) In addition to the vacation provided pursuant to Section
3.04(a) hereof, Employee shall be entitled to not less than ten
(10) paid holidays (other than weekends) per year, generally on
such days on which the New York Stock Exchange is closed to
trading.
(g) Employee shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by him (in
accordance with the policies and procedures established by the
Company or the Board for the similarly situated employees of the
Company) in performing services hereunder.
(h) The Company shall pay the reasonable costs of
preparation, by a professional of Employee's choosing, of
Employee's annual and estimated federal income tax returns.
(i) The Company shall pay the reasonable costs of Employee's
personal financial planning by a professional of Employee's
choosing.
(j) Employee shall be eligible to participate during the
Employment Period in Benefits not inconsistent or duplicative of
those set forth in this Section 3.04 as the Company shall
establish or maintain for its employees or executives generally.
4. Termination.
4.01 Termination by Company for Other Than Cause. If during
the term of this Agreement the Company terminates the employment
of Employee and such termination is not for Cause, then, subject
to the provisions of Section 2.09, the Company shall pay to
Employee an amount equal to the monthly portion of Employee's
Minimum Annual Compensation multiplied by the greater of twenty-
four (24) or the number of months remaining in the term of this
Agreement (the "Severance Period") until such time as Employee
shall become reemployed in a position, in the Dallas metroplex
area, consistent with Employee's experience and stature. If
Employee obtains such a position but Employee's annual
compensation shall be less than the Minimum Annual Compensation,
then the difference shall be paid to Employee for the balance of
the Severance Period. Such difference shall be calculated as
follows: The difference between Employee's Minimum Annual
Compensation for any year, or lesser period, in which this
Agreement would have been in effect and the annualized
compensation payable to Employee in his new position during such
period shall be payable in the same manner as the Minimum Annual
Compensation was paid prior to termination over the period of
such reemployment during such period. If the Employee's
employment in a new position shall terminate, then for the
purposes of this Paragraph 4.01 Employee shall be entitled to
continuation of the Minimum Annual Compensation until he shall
again become reemployed, in which case only the difference shall
be payable as aforesaid; and so on. If the Employee's employment
shall terminate as aforesaid or if the Employee's reemployment in
a new position shall terminate, Employee shall use his best
efforts to become reemployed as soon as reasonably possible in a
position in the Dallas Metroplex consistent with Employee's
experience and stature.
<PAGE>
The Company shall pay to Employee, such compensation set forth
in this paragraph 4.01 under the same terms as the Minimum Annual
Compensation shall be paid under paragraph 3.01, up to a maximum
of two (2) years.
4.02 Constructive Discharge. If the Company fails to
reappoint Employee to (or rejects Employee for) the position or
positions listed in Section 2.01, fails to comply with the
provisions of Section 3, or engages in any other material breach
of the terms of this Agreement, Employee may at his option
terminate his employment and such termination shall be considered
to be a termination of Employee's employment by the Company for
reasons other than "Cause."
4.03 Termination by the Company for Cause. The Company shall
have the right to terminate the employment of Employee for Cause.
Effective as of the date that the employment of Employee
terminates by reason of Cause, this Agreement, except for
Sections 2.04 through 2.09, shall terminate and no further
payments of the Compensation described in Section 3 (except for
such remaining payments of Minimum Annual Compensation under
Section 3.01 relating to periods during which Employee was
employed by the Company) Benefits which are required by
applicable law to be continued, and reimbursement of prior
expenses under Section 3.04) shall be made.
4.04 Change in Control. If any time during the term of this
Agreement there is a Change of Control and Employee's employment
is terminated by the Company for reasons other than "Cause"
within the greater of one (1) year following the "Change in
Control" or the remaining term of this Agreement, the Company
shall pay to Employee an amount equal to the monthly portion of
Employee's Minimum Annual Compensation multiplied by thirty-six
(36). This amount shall be paid to Employee in one lump sum as
soon as practicable, but in no event later than sixty (60) days,
after the date that Employee's employment terminated. To the
extent that Employee is not fully vested in retirement Benefits
from any pension, profit sharing or any other retirement plan or
program (whether tax qualified or not) maintained by the Company,
the Company shall pay directly to Employee the difference between
the amounts which would have been paid to Employee had he been
fully vested on the date that his employment terminated and the
amounts actually paid or payable to Employee pursuant to such
plans or programs.
4.05 Termination on Account of Employee's Death.
(a) In the event of Employee's death during the term of this
Agreement:
(1) This Agreement shall terminate except as provided in this
Section; and
(2) The Company shall pay to Employee's beneficiary or
beneficiaries (or to his estate if he fails to make such
designation) an amount equal to the monthly portion of
Employee's Minimum Annual Compensation as in effect on the date
of his death multiplied by the greater of twenty-four (24) or
the number of months which would have otherwise remained in the
term of this Agreement had Employee not died. This amount shall
be paid in one lump sum as soon as practicable after the date
of his death.
<PAGE>
(b) Employee may designate one or more beneficiaries for the
purposes of this Section by making a written designation and
delivering such designation to a Vice President or the Treasurer
of the Company. If Employee makes more than one such written
designation, the designation last received before Employee's
death shall control.
4.06 Termination on Account of Employee's Disability. If
Employee ceases to perform services for the Company because he is
suffering from a medically determinable disability and is
therefore incapable of performing such services, the Company
shall continue to pay Employee an amount equal to two-thirds
(2/3) of Employee's Minimum Annual Compensation as in effect on
the date of Employee's cessation of services by reason of
disability less any amounts paid to Employee as Workers
Compensation, Social Security Disability benefits (or any other
disability benefits paid to Employee as federal, state, or local
disability benefits) and any amounts paid to Employee as
disability payments under any disability plan or program for a
period ending on the earlier of: (a) the date that Employee again
becomes employed in a significant manner and on a substantially
full-time basis; (b) the date that Employee attains normal
retirement age, as such age is defined in a retirement plan
maintained by the Company; or (c) Employee begins to receive
retirement benefits from a retirement plan maintained by the
Company.
5. Stock Options.
5.01 Amount of Stock. In accordance with the provisions of
the Company's Incentive Stock Option Plan (the "Plan") and the
specific authorization of the Board, the Company hereby grants to
Employee, subject to all of the terms and conditions of the Plan
and this Agreement, an option to acquire 250,000 shares of the
Company's common stock ("Option Stock") at an exercise price of
$.25 per share, which Option shall expire five (5) years from the
date of vesting.
5.02 Vesting. The Option to acquire the Option Stock granted
in Section 5.01 shall vest in fifty-nine (59) equal, consecutive
monthly increments of 4,165 shares each on the first day of each
month beginning with November, 1999 and ending with September,
2004 and one increment of 4,265 on the first day of October,
2004. Notwithstanding anything to the contrary contained in this
Agreement, all Options to acquire Option Stock shall irrevocably
vest thirty (30) calendar days prior to the scheduled
consummation of a Change of Control or upon a Board decision to
accelerate vesting.
5.03 Tax Changes. If any change(s) in the Federal income tax
laws materially affect the tax treatment of Employee with respect
to the Option or the Option Stock, the parties agree to negotiate
in good faith to reach an agreement which will take advantage of,
or minimize the disadvantages of, such changes.
6. Miscellaneous.
6.01 Assignment. This Agreement and the rights and
obligations of the parties hereto shall bind and inure to the
benefit of each of the parties hereto and shall also bind and
inure to the benefit of any successor or successors of the
Company in a reorganization, merger or consolidation and any
assignee of all or substantially all of the Company's business
and properties, but, except as to any such successor of the
Company, neither this Agreement nor any rights or
<PAGE>
benefits hereunder may be assigned by the Company or Employee.
6.02 Initial Term and Extensions. Except as otherwise
provided, the term of this Agreement shall be three (3) years
commencing with the effective date hereof. On the third
anniversary of the effective date, and on each subsequent annual
anniversary of the effective date thereafter, the Agreement shall
be automatically extended for an additional year unless either
party notifies the other in writing more than 90 days prior to
the relevant anniversary date that the Agreement is no longer to
be extended.
6.03 Governing Law. This Agreement shall be construed in
accordance with and governed for all purposes by the laws of the
State of Texas, and proper venue for any dispute hereunder shall
be the courts of Dallas County, Texas.
6.04 Interpretation. In case any one or more of the
provisions contained in this Agreement shall, for any reason, be
held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any
other provisions of this Agreement, but this Agreement shall be
construed as if such invalid, illegal or unenforceable provision
had never been contained herein.
6.05 Notice. Any notice required or permitted to be given
hereunder shall be effective when received and shall be
sufficient if in writing and if personally delivered or sent by
prepaid cable, telex or registered air mail, return receipt
requested, to the party to receive such notice at its address set
forth at the end of this Agreement or at such other address as a
party may by notice specify to the other.
6.06 Amendment and Waiver. This Agreement may not be
amended, supplemented or waived except by a writing signed by the
party against which such amendment or waiver is to be enforced.
The waiver by any party of a breach of any provision of this
Agreement shall not operate to, or be construed as a waiver of,
any other breach of that provision nor as a waiver of any breach
of another provision.
6.07 Binding Effect. Subject to the provisions of Section 4
hereof, this Agreement shall be binding on the successors and
assigns of the parties hereto.
All obligations of Employee with respect to any Shares covered
by this Agreement shall, as the context requires, bind Employee's
spouse and the divorce or death of such spouse shall not vitiate
the binding nature of such obligation.
<PAGE>
6.08 Survival of Rights and Obligations. All rights and
obligations of Employee or the Company arising during the term of
this Agreement shall continue to have full force and effect after
the termination of this Agreement unless otherwise provided
herein.
RHINO ENTERPRISES GROUP, INC.,
a Nevada corporation
By:/s/DAVID H. YOUNG
---------------------------
David H. Young
Chief Operating Officer
EMPLOYEE
/s/ROBERT W. MOEHLER
----------------------
Robert W. Moehler, an individual
RHINO ENTERPRISES GROUP, INC.
EMPLOYMENT AND STOCK OPTION AGREEMENT
Agreement made as of this 27th day of October, 1999, by and
between David H. Young, an individual residing in Plano, Texas
("Employee"), and Rhino Enterprises Group, Inc., a Nevada
corporation (the "Company").
PREAMBLE
The Board (as hereinafter defined) recognizes Employee's
potential contribution to the growth and success of the Company
and desires to assure the Company of Employee's employment in an
executive capacity as Chief Operating Officer and to compensate
him therefor. Employee wants to be employed by the Company and to
commit himself to serve the Company on the terms herein provided.
In connection with his employment, the Company will offer
Employee options to purchase certain Restricted Stock, (as
hereinafter defined) on the terms herein provided, including
particularly Employee's undertaking to remain loyal to the
Company. Employee's duties will expressly include operating the
Company on a day-to-day basis on behalf of and for the account of
the Company.
NOW, THEREFORE, in consideration of the foregoing and of the
respective covenants and agreements of the parties, the receipt
and sufficiency of which are hereby acknowledged, the parties
agree as follows:
1. Definitions
"Benefits" shall mean all the fringe benefits which may be
approved by the Board from time to time and established by the
Company for the benefit of employees generally and/or for key
employees of the Company as a class, including, but not limited
to, regular holidays, vacations, absences resulting from illness
or accident, health insurance, disability and medical plans
(including dental and prescription drug), group life insurance,
and pension, profit-sharing and stock bonus plans or their
equivalent.
"Board" shall mean the Board of Directors of the Company,
together with an executive committee thereof (if any), as same
shall be constituted from time to time.
"Cause" for termination shall mean (i) Employee's arrest for a
felony or crime of moral turpitude, (ii) acts of Employee which,
in the judgment of the Board, constitute fraud or willful
misconduct on the part of Employee in connection with his duties
under this Agreement, including but not limited to,
misappropriation or embezzlement in the performance of duties as
an employee of the Company or willfully engaging in conduct
materially injurious to the Company and in violation of the
covenants contained in this Agreement, or(iii) gross misconduct,
including but not limited to, willful failure of Employee either
to (a) continue to obey lawful written instruction of the Board
after five (5)days notice in writing of Employee's failure to do
so and the Board's intention to terminate Employee if such
failure is not corrected, or (b) correct any conduct of Employee
which constitutes a material breach of this Agreement after
thirty(30), days notice in
<PAGE>
writing of Employee's failure to do so and the Board's intention
to terminate Employee if such failure is not corrected. Employee
agrees, upon the request of the Board to submit to drug and
alcohol testing. Employee's failure to comply with such request,
or failure to test negatively for drugs or alcohol, shall also
constitute Cause.
"Chairman" shall mean the individual designated by the Board
from time to time as its chairman.
"Change of Control" shall mean the occurrence of one or more
of the following three events:
(1) After the effective date of this Agreement, any person
becomes a beneficial owner (as such term is defined in Rule
13d-3 promulgated under the Securities Exchange Act of 1934, as
amended) directly or indirectly of securities representing 33%
or more of the total number of votes that may be cast for the
election of directors of the Company;
(2) Within two (2) years after a merger, consolidation,
liquidation or sale of assets involving the Company, or a
contested election of a Company director, or any combination of
the foregoing, the individuals who were directors of the
Company immediately prior thereto shall cease to constitute a
majority of the Board; or
(3) Within two (2) years after a tender offer or exchange
offer for voting securities of the Company, the individuals who
were directors of the Company immediately prior thereto shall
cease to constitute a majority of the Board.
"Chief Operating Officer" shall mean the individual having
responsibility to the Board for direction and management of the
operational affairs of the Company, subject to the control of the
Chief Executive Officer and the President of the Company and the
Board, and who reports and is accountable to the Board, the Chief
Executive Officer and the President.
"Company" shall mean Rhino Enterprises Group, Inc., a Nevada
corporation, together with such parent compan(ies) and/or
subsidiaries of the Company as may from time to time exist.
"Disability" shall mean a written determination by a physician
mutually agreeable to the Company and Employee (or, in the event
of Employee's total physical or mental disability, Employee's
legal representative) that Employee is physically or mentally
unable to perform his duties of Chief Operating Officer under
this Agreement and that such disability can reasonably be
expected to continue for a period of six (6)consecutive months
or for shorter periods aggregating one hundred and eighty (180)
days in any twelve-(12)-month period.
"Employee" shall mean David H. Young and, if the context
requires, his heirs, personal representatives, and permitted
successors and assigns.
<PAGE>
"Person" shall mean any natural person, incorporated entity,
limited or general partnership, business trust, association,
agency (governmental or private), division, political sovereign,
or subdivision or instrumentality, including those groups
identified as persons in 13(d)(3) and 14(d)(2), of the Securities
Exchange Act of 1934, as amended.
"Restricted Stock" shall mean the Company's common stock,
$.001 par value per share.
"Reorganization" shall mean any transaction, or any series of
transactions consummated in a 12-month period, pursuant to which
any Person acquires (by merger, acquisition, or otherwise) all or
substantially all of the assets of the Company or the then
outstanding equity securities of the Company and the Company is
not the surviving entity, the Company being deemed surviving if
and only if the majority of the Board of Directors of the
ultimate parent of the surviving entity were directors of the
Company prior to its organization.
"Territory" shall mean any area which is within a ninety (90)
mile radius of any office of the Company or its affiliates.
2. Position, Responsibilities, and Term of Employment.
2.01 Position. Employee shall serve the Company as Chief
Operating Officer and in such additional management position(s)
as the Board shall designate. In this capacity Employee shall,
subject to the Bylaws of the Company, and to the direction of the
Chief Executive Officer, the President and the Board, serve the
Company by performing such duties and carrying out such
responsibilities as are normally related to the position of Chief
Operating Officer in accordance with the standards of the
industry.
2.02 Best Efforts Covenant. Employee will, to the best of
his ability, devote his full professional and business time and
best efforts to the performance of his duties for the Company and
its subsidiaries and affiliates.
2.03 Exclusivity Covenant. During the Agreement's term,
Employee will not, without the consent of the Board, undertake or
engage in any other employment, occupation or business enterprise
other than a business enterprise in which Employee does not
actively participate. Further, Employee agrees not to acquire,
assume, or participate in, directly or indirectly, any position,
investment, or interest in the Territory adverse or antagonistic
to the Company, its business or prospects, financial or
otherwise, or take any action towards any of the foregoing. The
provisions of this Section shall not prevent Employee from owning
shares of any competitor of the Company so long as such shares
(i) do not constitute more than 5% of the outstanding equity of
such competitor, and (ii) are regularly traded on a recognized
exchange or listed for trading by NASDAQ in the over-the-counter
market.
2.04 Post-Employment Noncompetition Covenant. Except with the
prior written consent of the Board, Employee shall not engage in
activities in the Territory either on Employee's own behalf or
that of any other business organization, which are in direct or
indirect competition with the Company for a period of one(1)
year subsequent to Employee's voluntary withdrawal from
<PAGE>
employment with the Company (except for a termination pursuant to
a Change in Control) or the Company's termination of Employee's
employment for Cause. Employee and the Company expressly declare
that the territorial and time limitations contained in this
Section and the definition of Territory are entirely reasonable
at this time and are properly and necessarily required for the
adequate protection of the business and intellectual property of
the Company. If such territorial or time limitations, or any
portions thereof, are deemed to be unreasonable by a court of
competent jurisdiction, whether due to passage of time, change of
circumstances or otherwise, Employee and the Company agree to a
reduction of said territorial and/or time limitations to such
areas and/or periods of time as said court shall deem reasonable.
For a period of one year subsequent to Employee's voluntary
withdrawal from employment with the Company (except for a
termination pursuant to a Change in ) or the Company's
termination of Employee's employment for Cause, Employee will not
without the express prior written approval of the Board (i)
directly or indirectly, in one or a series of transactions,
recruit, solicit or otherwise induce or influence any proprietor,
partner, stockholder, lender, director, officer, employee, sales
agent, joint venturer, investor, lessor, supplier, customer,
agent, representative or any other person which has a business
relationship with the Company or had a business relationship with
the Company within the twenty-four (24) month period preceding
the date of the incident in question, to discontinue, reduce, or
modify such employment, agency or business relationship with the
Company, or (ii) employ or seek to employ or cause any business
organization in direct or indirect competition with the Company
to employ or seek to employ any person or agent who is then (or
was at any time within six months prior to the date the Employee
or the competitive business employs or seeks to employ such
person) employed or retained by the Company. Notwithstanding the
foregoing, nothing herein shall prevent the Employee from
providing a letter of recommendation to an employee with respect
to a future employment opportunity.
2.05 Confidential Information. Employee recognizes and
acknowledges that the Company's trade secrets and proprietary
information and know-how, as they may exist from time to time
(collectively, "Confidential Information"), are valuable, special
and unique assets of the Company's business, access to and
knowledge of which are essential to the performance of Employee's
duties hereunder. Employee will not, during or after the term of
his employment by the Company, in whole or in part, disclose such
secrets, information or know-how to any Person for any reason or
purpose whatsoever, nor shall Employee make use of any such
property for his own purposes or for the benefit of any Person
(except the Company) under any circumstances during or after the
term of his employment, provided that after the term of his
employment these restrictions shall not apply to such secrets,
information and know-how which are then in the public domain
(provided that Employee was not responsible, directly or
indirectly, for such secrets, information or processes entering
the public domain without the Company's consent). Employee shall
have no obligation hereunder to keep confidential any
Confidential Information if and to the extent disclosure of any
thereof is specifically required by law; provided, however, that
in the event disclosure is required by applicable law, the
Employee shall provide the Company with prompt notice of such
requirement, prior to making any disclosure, so that the Company
may seek an appropriate protective order. Employee agrees to hold
as the Company's property all memoranda, books, papers, letters,
customer lists, processes, computer software, records, financial
information, policy and procedure manuals, training and
recruiting procedures and other data, and all copies thereof and
therefrom, in any way relating to the Company's business and
affairs, whether made by him or otherwise coming
<PAGE>
into his possession, and on termination of his employment, or on
demand of the Company at any time, to deliver the same to the
Company. Employee agrees that he will not use or disclose to
other employees of the Company, during the term of this
Agreement, confidential information belonging to his former
employers.
Employee shall use his best efforts to prevent the removal of
any Confidential Information from the premises of the Company,
except as required in his normal course of employment by the
Company. Employee shall use his best efforts to cause all persons
or entities to whom any Confidential Information shall be
disclosed by him hereunder to observe the terms and conditions
set forth herein as though each such person or entity was bound
hereby.
2.06 Nonsolicitation. Except with the prior written consent
of the Board, Employee shall not solicit customers, clients, or
employees of the Company or any of its affiliates for a period of
twelve (12) months from the date of the expiration of this
Agreement. Without limiting the generality of the foregoing,
Employee will not willfully canvas, solicit nor accept any such
business in competition with the business of the Company from any
customers of the Company with whom Employee had contact during,
or of which Employee had knowledge solely as a result of, his
performance of services for the Company pursuant to this
Agreement. Employee will not directly or indirectly request,
induce or advise any customers of the Company with whom Employee
had contact during the term of this Agreement to withdraw,
curtail or cancel their business with the Company. Employee will
not induce or attempt to induce any employee of the Company to
terminate his/her employment with the Company.
2.07 Corporate Opportunity. If during the term of this
Agreement and for one year thereafter, Employee identifies, or
otherwise becomes aware of the identification by the Company of,
any Acquisition Opportunity, all rights in such Acquisition
Opportunity (as between the Company and Employee) shall belong
solely to the Company. As used herein, "Acquisition Opportunity"
means any entity engaged in the business in which the Company is
or actively proposes to engage in any territory in the world in
which the Company is conducting or proposes to conduct material
activities.
2.08 Records, Files. All records, files, drawings,
documents, equipment and the like relating to the business of the
Company which are prepared or used by Employee during the term of
his employment under this Agreement shall be and shall remain the
sole property of the Company.
2.09 Work for Hire. Employee agrees that every improvement,
invention, process, apparatus, method, design, and any other
creation that Employee may invent, discover, conceive, or
originate by himself or in conjunction with any other Person
during the term of Employee's employment under this Agreement
[that relates to the business carried on by the Company during
the term of Employee's employment under this Agreement] shall be
treated as a "work for hire" and shall be the exclusive property
of the Company. In this regard, Employee hereby disclaims any and
all interest in such items which Employee might otherwise enjoy.
Employee agrees to disclose to the Company every patent
application, notice of copyright, or other action taken by
Employee or any affiliate or assignee to protect intellectual
property during the 12 months following Employee's termination of
employment at the Company, for whatever reason, so that the
Company may
<PAGE>
determine whether to assert a claim under this Section or any
other provision of this Agreement.
2.10 Equitable Relief. Employee acknowledges that his
services to the Company are of a unique character which give them
a special value to the Company. Employee further recognizes that
violations by Employee of any one or more of the provisions of
this Section 2 may give rise to losses or damages for which the
Company cannot be reasonably or adequately compensated in an
action at law and that such violations may result in irreparable
and continuing harm to the Company. Employee agrees that,
therefore, in addition to any other remedy which the Company may
have at law and equity, including the right to withhold any
payment of compensation under Section 4 of this Agreement, the
Company shall be entitled to injunctive relief to restrain any
violation, actual or threatened, by Employee of the provisions of
this Agreement. In this regard, Employee expressly recognizes and
acknowledges that the terms and conditions of this Section 2
above are:
(a) reasonable to time and area;
(b) necessary to protect legitimate business of the Company;
and
(c) not unduly burdensome to Employee.
2.11 Severability. If any provision of this Section 2 or any
other provision of this Agreement is held by a court of competent
jurisdiction to be illegal, invalid or unenforceable under
present or future laws effective during the term hereof or any
restricted period, or any such provisions are held to be
unreasonable with respect to length of time, geographical area or
areas or activities to be restrained, such provisions shall be
construed to operate for such period of time or such geographical
area or areas and in respect of such activities as such court
shall determine to be the maximum reasonable restraint under the
circumstances, and the parties agree to submit such question or
questions to such court in the event such determination of
unreasonableness is held by such court. Additionally, if any
other provisions of this Agreement shall be construed and
enforced as illegal, invalid or unenforceable, such provision
shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never compromised a part hereof, and
the remaining provisions of this Agreement shall remain in full
force and effect and shall not be effected by the severance of
illegal, invalid or unenforceable provision or provisions.
3. Compensation.
3.01 Minimal Annual Compensation. The Company shall pay to
Employee for the services to be rendered hereunder a base salary
at an annual rate of Seventy Five Thousand Dollars ($75,000)
("Minimum Annual Compensation"). There shall be an annual
review for merit by the Board and an increase as deemed
appropriate to reflect the value of services by Employee. At no
time during the term of this Agreement shall Employee's annual
base salary fall below Minimum Annual Compensation. In addition,
if the Board increases Employee's Minimum Annual Compensation at
any time during the term of this Agreement, such increased
Minimum Annual Compensation shall become a floor below which
Employee's compensation shall not fall at any future time during
the term of this Agreement and shall become Minimum Annual
Compensation.
<PAGE>
Employee's salary shall be payable in periodic installments in
accordance with the Company's usual practice for similarly
situated employees of the Company.
3.02 Incentive Compensation. In addition to Minimum Annual
Compensation, Employee shall be entitled to receive payments
under the Company's incentive compensation and/or bonus
program(s) (as in effect from time to time), if any, in such
amounts as are determined by the Company to be appropriate for
similarly situated employees of the Company. Any incentive
compensation which is not deductible in the opinion of the
Company's counsel, under Section 162(m) of the Internal Revenue
Code of 1986, as amended, shall be deferred and paid, without
interest, in the first year or years when and to the extent such
payment may be deducted, Employee's right to such payment being
absolute, subject only to the provisions of Section 4.03.
3.03 Participating in Benefits. Employee shall be entitled
to all Benefits for as long as such Benefits may remain in effect
and/or any substitute or additional Benefits made available in
the future to similarly situated employees of the Company,
subject to and on a basis consistent with the terms, conditions
and overall administration of such Benefits adopted by the
Company. Benefits paid to Employee shall not be deemed to be in
lieu of other compensation to Employee hereunder as described in
this Section 3.
3.04 Specific Benefits.
During the term of this Agreement (and thereafter to the
extent this Agreement shall require):
(a) Employee shall be entitled to three (3) weeks of paid
vacation time per year, to be taken at times mutually acceptable
to the Company and Employee.
(b) The Company shall provide fully paid accident and health
insurance for Employee and his family with limits and extent of
coverage similar to that provided by Employee's previous
employer.
(c) The Company shall obtain at its expense (subject to
Employee's insurability) an insurance policy on the life of
Employee, subject to the last sentence of this Section 3.04(c),
in the face amount of $500,000 that provides it is fully funded
after no more than five (5) years of premium payments. Employee
shall have the exclusive right to designate the beneficiaries of
such policy and change such beneficiaries from time to time. Such
policy and the proceeds and cash value thereof shall be the sole
property of Employee and the Company shall not retain any benefit
therein. The Company shall not be obligated to pay premiums for
such insurance in excess of $500 per annum.
(d) Employee shall be entitled to sick leave benefits during
the employment period in accordance with the customary policies
of the Company for its executive officers, but in no event less
than ten (10) per year. In the event of Employee's Disability,
disability insurance shall provide for the payment of Employee's
Minimum Annual Compensation for a period of not less than one (1)
year from the date of Disability.
<PAGE>
(e) In recognition of the necessity of the use of an
automobile to the efficient and expeditious performance of
Employee's services, duties and obligations to and on behalf of
the Company, the Company shall pay to the Employee an automobile
allowance of $500 per month.
(f) In addition to the vacation provided pursuant to Section
3.04(a) hereof, Employee shall be entitled to not less than ten
(10) paid holidays (other than weekends) per year, generally on
such days on which the New York Stock Exchange is closed to
trading.
(g) Employee shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by him (in
accordance with the policies and procedures established by the
Company or the Board for the similarly situated employees of the
Company) in performing services hereunder.
(h) The Company shall pay the reasonable costs of
preparation, by a professional of Employee's choosing, of
Employee's annual and estimated federal income tax returns.
(i) The Company shall pay the reasonable costs of Employee's
personal financial planning by a professional of Employee's
choosing.
(j) Employee shall be eligible to participate during the
Employment Period in Benefits not inconsistent or duplicative of
those set forth in this Section 3.04 as the Company shall
establish or maintain for its employees or executives generally.
4. Termination.
4.01 Termination by Company for Other Than Cause. If during
the term of this Agreement the Company terminates the employment
of Employee and such termination is not for Cause, then, subject
to the provisions of Section 2.09, the Company shall pay to
Employee an amount equal to the monthly portion of Employee's
Minimum Annual Compensation multiplied by the greater of
twenty-four (24) or the number of months remaining in the term of
this Agreement (the "Severance Period") until such time as
Employee shall become reemployed in a position, in the Dallas
metroplex area, consistent with Employee's experience and
stature. If Employee obtains such a position but Employee's
annual compensation shall be less than the Minimum Annual
Compensation, then the difference shall be paid to Employee for
the balance of the Severance Period. Such difference shall be
calculated as follows: The difference between Employee's Minimum
Annual Compensation for any year, or lesser period, in which this
Agreement would have been in effect and the annualized
compensation payable to Employee in his new position during such
period shall be payable in the same manner as the Minimum Annual
Compensation was paid prior to termination over the period of
such reemployment during such period. If the Employee's
employment in a new position shall terminate, then for the
purposes of this Paragraph 4.01 Employee shall be entitled to
continuation of the Minimum Annual Compensation until he shall
again become reemployed, in which case only the difference shall
be payable as aforesaid; and so on. If the Employee's employment
shall terminate as aforesaid or if the Employee's reemployment in
a new position shall terminate, Employee shall use his best
efforts to become reemployed as soon as reasonably possible in a
position in the Dallas Metroplex consistent with Employee's
experience and stature.
<PAGE>
The Company shall pay to Employee, such compensation set forth
in this paragraph 4.01 under the same terms as the Minimum Annual
Compensation shall be paid under paragraph 3.01, up to a maximum
of two (2) years.
4.02 Constructive Discharge. If the Company fails to
reappoint Employee to (or rejects Employee for) the position or
positions listed in Section 2.01, fails to comply with the
provisions of Section 3, or engages in any other material breach
of the terms of this Agreement, Employee may at his option
terminate his employment and such termination shall be considered
to be a termination of Employee's employment by the Company for
reasons other than "Cause".
4.03 Termination by the Company for Cause. The Company shall
have the right to terminate the employment of Employee for Cause.
Effective as of the date that the employment of Employee
terminates by reason of Cause, this Agreement, except for
Sections 2.04 through 2.09, shall terminate and no further
payments of the Compensation described in Section 3 (except for
such remaining payments of Minimum Annual Compensation under
Section 3.01 relating to periods during which Employee was
employed by the Company, Benefits which are required by
applicable law to be continued, and reimbursement of prior
expenses under Section 3.04) shall be made.
4.04 Change in Control. If any time during the term of this
Agreement there is a Change of Control and Employee's employment
is terminated by the Company for reasons other than "Cause"
within the greater of one (1) year following the "Change in
Control" or the remaining term of this Agreement, the Company
shall pay to Employee an amount equal to the monthly portion of
Employee's Minimum Annual Compensation multiplied by thirty-six
(36). This amount shall be paid to Employee in one lump sum as
soon as practicable, but in no event later than sixty (60) days,
after the date that Employee's employment terminated. To the
extent that Employee is not fully vested in retirement Benefits
from any pension, profit sharing or any other retirement plan or
program (whether tax qualified or not) maintained by the Company,
the Company shall pay directly to Employee the difference between
the amounts which would have been paid to Employee had he been
fully vested on the date that his employment terminated and the
amounts actually paid or payable to Employee pursuant to such
plans or programs.
4.05 Termination on Account of Employee's Death.
(a) In the event of Employee's death during the term of
this Agreement:
(1) This Agreement shall terminate except as
provided in this Section; and
(2) The Company shall pay to Employee's
beneficiary or beneficiaries (or to his estate if he
fails to make such designation) an amount equal to the
monthly portion of Employee's Minimum Annual
Compensation as in effect on the date of his death
multiplied by the greater of twenty-four (24) or the
number of months which would have otherwise remained in
the term of this Agreement had Employee not died. This
amount shall be paid in one lump sum as soon as
practicable after the date of his death.
<PAGE>
(b) Employee may designate one or more beneficiaries for
the purposes of this Section by making a written
designation and delivering such designation to the
President or the Treasurer of the Company. If Employee
makes more than one such written designation, the
designation last received before Employee's death shall
control.
4.06 Termination on Account of Employee's Disability. If
Employee ceases to perform services for the Company because he is
suffering from a medically determinable disability and is
therefore incapable of performing such services, the Company
shall continue to pay Employee an amount equal to two-thirds
(2/3) of Employee's Minimum Annual Compensation as in effect on
the date of Employee's cessation of services by reason of
disability less any amounts paid to Employee as Workers
Compensation, Social Security Disability benefits (or any other
disability benefits paid to Employee as federal, state, or local
disability benefits) and any amounts paid to Employee as
disability payments under any disability plan or program for a
period ending on the earlier of: (a) the date that Employee again
becomes employed in a significant manner and on a substantially
full-time basis; (b) the date that Employee attains normal
retirement age, as such age is defined in a retirement plan
maintained by the Company; or (c) Employee begins to receive
retirement benefits from a retirement plan maintained by the
Company.
5. Stock Options.
5.01 Amount of Stock. In accordance with the provisions of
the Company's Incentive Stock Option Plan (the "Plan") and the
specific authorization of the Board, the Company hereby grants to
Employee, subject to all of the terms and conditions of the Plan
and this Agreement, an option to acquire 250,000 shares of the
Company's common stock ("Option Stock") at an exercise price of
$.25 per share, which Option shall expire five (5) years from the
date of vesting.
5.02 Vesting. The Option to acquire the Option Stock granted
in Section 5.01 shall vest in fifty-nine (59) equal, consecutive
monthly increments of 4,165 shares each on the first day of each
month beginning with November, 1999 and ending with September,
2004 and one increment of 4,265 on the first day of October,
2004. Notwithstanding anything to the contrary contained in this
Agreement, all Options to acquire Option Stock shall irrevocably
vest thirty (30) calendar days prior to the scheduled
consummation of a Change of Control or upon a Board decision to
accelerate vesting.
<PAGE>
5.03 Tax Changes. If any change(s) in the Federal income tax
laws materially affect the tax treatment of Employee with respect
to the Option or the Option Stock, the parties agree to negotiate
in good faith to reach an agreement which will take advantage of,
or minimize the disadvantages of, such changes.
6. Miscellaneous.
6.01 Assignment. This Agreement and the rights and
obligations of the parties hereto shall bind and inure to the
benefit of each of the parties hereto and shall also bind and
inure to the benefit of any successor or successors of the
Company in a reorganization, merger or consolidation and any
assignee of all or substantially all of the Company's business
and properties,
<PAGE>
but, except as to any such successor of the Company, neither
this Agreement nor any rights or benefits hereunder may be
assigned by the Company or Employee.
6.02 Initial Term and Extensions. Except as otherwise
provided, the term of this Agreement shall be three (3) years
commencing with the effective date hereof. On the third
anniversary of the effective date, and on each subsequent annual
anniversary of the effective date thereafter, the Agreement shall
be automatically extended for an additional year unless either
party notifies the other in writing more than 90 days prior to
the relevant anniversary date that the Agreement is no longer to
be extended.
6.03 Governing Law. This Agreement shall be construed and
interpreted in accordance with and governed for all purposes by
the laws of the State of Texas, and proper venue for any dispute
hereunder shall be the courts of Dallas County, Texas.
6.04 Interpretation. In case any one or more of the
provisions contained in this Agreement shall, for any reason, be
held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any
other provisions of this Agreement, but this Agreement shall be
construed as if such invalid, illegal or unenforceable provision
had never been contained herein.
6.05 Notice. Any notice required or permitted to be given
hereunder shall be effective when received and shall be
sufficient if in writing and if personally delivered or sent by
prepaid cable, telex or registered air mail, return receipt
requested, to the party to receive such notice at its address set
forth at the end of this Agreement or at such other address as a
party may by notice specify to the other.
6.06 Amendment and Waiver. This Agreement may not be
amended, supplemented or waived except by a writing signed by the
party against which such amendment or waiver is to be enforced.
The waiver by any party of a breach of any provision of this
Agreement shall not operate to, or be construed as a waiver of,
any other breach of that provision nor as a waiver of any breach
of another provision.
6.07 Binding Effect. Subject to the provisions of Section 4
hereof, this Agreement shall be binding on the successors and
assigns of the parties hereto.
<PAGE>
All obligations of Employee with respect to any Shares covered
by this Agreement shall, as the context requires, bind Employee's
spouse and the divorce or death of such spouse shall not vitiate
the binding nature of such obligation.
6.08 Survival of Rights and Obligations. All rights and
obligations of Employee or the Company arising during the term of
this Agreement shall continue to have full force and effect after
the termination of this Agreement unless otherwise provided
herein.
RHINO ENTERPRISES GROUP, INC.,
a Nevada corporation
By: /s/ROBERT W. MOEHLER
--------------------------------
Robert W. Moehler, President
EMPLOYEE
/s/DAVID H. YOUNG
--------------------------------
David H. Young, an individual
[LETTERHEAD]
December 17, 1999
Money Business, Inc.
(d/b/a the "The Under Ground Shopper")
1508 East Beltline Road
Carrollton, Texas 75006
Re: Engagement of Money Business, Inc. ("MBI")
Ladies and Gentlemen:
This letter shall confirm our agreement and summarize the
terms of the engagement of MBI by Rhino Enterprises Group, Inc.
("Rhino") to utilize the services of MBI for the benefit of Rhino
and/or its assigns under the terms and conditions contained herein.
In this regard, Rhino hereby agrees to purchase MBI's
advertising/marketing services on a retail basis in the amount of
$800,000.00 for the benefit of Rhino and/or its assigns. Each
agrees that the periodic invoices for the actual advertising/
marketing time utilized by Rhino and/or its assigns shall be billed
directly to Rhino on a monthly basis, under MBI's standard
commercial terms of net/30 days. The specific mix of advertising
and marketing services to be provided by MBI to Rhino and/or its
assigns shall be determined by Rhino and/or its assigns, with MBI
using its reasonable best efforts to comply with both the timing
and the type of services requested by Rhino and/or its assigns.
If you agree with the terms and conditions set forth herein,
please indicate your acceptance by signing and dating this letter
as shown below.
Sincerely,
RHINO ENTERPRISES GROUP, INC.,
a Nevada corporation
By: /s/ ROBERT W. MOEHLER
----------------------------------
Robert W. Moehler, President
Agreed and accepted this 17th day of December, 1999.
MONEY BUSINESS, INC.,
d/b/a THE UNDERGROUND SHOPPER,
a Texas corporation
By: /s/ JERRY SCHRAEDER
- ---------------------------
Jerry Schraeder, President
SUBSIDIARIES OF RHINO ENTERPRISES GROUP, INC.
Rhino Enterprises Group, Inc. ("Rhino") owns a portion, if not
all, of the outstanding common stock of the following
corporations:
Eyesite.com, Inc. was incorporated on May 26, 1999 in the state
of Delaware. Rhino owns 100% of the common stock.
Framing Systems, Inc. was incorporated on January 30, 1996 in the
state of Nevada. Rhino owns 68% of the common stock.
Executive Assistance, Inc. was incorporated on September 18, 1998
in the state of Nevada. Rhino owns 100% of the common stock.
e-Data Alliance, Inc. was incorporated on June 2, 1999 in the
state of Texas. Rhino owns 50% of the common stock.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 1998 (AUDITED) AND THE
YEAR ENDED DECEMBER 31, 1999 (UNAUDITED) AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> YEAR YEAR
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1999
<PERIOD-START> JAN-01-1998 JAN-01-1999
<PERIOD-END> DEC-31-1998 DEC-31-1999
<CASH> 0 297,370
<SECURITIES> 0 0
<RECEIVABLES> 0 2,070,728
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 0 2,368,098
<PP&E> 0 136,052
<DEPRECIATION> 0 28,935
<TOTAL-ASSETS> 0 2,475,215
<CURRENT-LIABILITIES> 689,696 3,864,626
<BONDS> 0 0
0 0
0 0
<COMMON> 4,269 1,576
<OTHER-SE> (651,451) (452,646)
<TOTAL-LIABILITY-AND-EQUITY> 42,514 3,413,556
<SALES> 0 24,174
<TOTAL-REVENUES> 0 24,174
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 12,500 10,688
<INCOME-PRETAX> 0 0
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 12,745
<CHANGES> 0 0
<NET-INCOME> (30,389) (619,162)
<EPS-BASIC> (.000) (.000)
<EPS-DILUTED> (.000) (.000)
</TABLE>
