SHARE EXCHANGE AGREEMENT AND PLAN OF REORGANIZATION
Exhibit
10.1
AND
PLAN
OF REORGANIZATION
This
SHARE EXCHANGE AGREEMENT AND PLAN OF REORGANIZATION is made and entered into
as
of October 15, 2007, by and among Rhino Outdoor International, Inc., a Nevada
corporation (“RHINO”); Yama Buggy Sales and Distribution, Inc., a
Nevada corporation (“YAMABUGGY”); and Yamabuggy, LLC, a Delaware
limited liability company, which is executing this Agreement as Shareholder
of
Yamabuggy, sometimes collectively referred to as the
“Shareholder.”
R
E C I T A L S
A. Yama
Buggy and Shareholder have entered into a Sales and Distribution
Agreement executed as of October 3, 2007 pursuant to which
Yama Buggy has the exclusive right to solicit and obtain orders for the products
of Shareholder.
B. Rhino
desires to acquire all of the outstanding shares of capital stock of Yama Buggy
in exchange for shares of capital stock of Rhino
(“Exchange”).
C. The
Shareholder owns 100% of the issued and outstanding shares of Yama Buggy and
desire to exchange those shares for shares of common stock of
Rhino.
D. Rhino,
YamaBuggy and the Shareholder desire to make certain representations and
warranties and other agreements in connection with the Exchange.
E. The
parties intend, by executing this Agreement, to adopt a plan of reorganization
within the meaning of Section 368 of the Internal Revenue Code of 1986, as
amended (“Code”), and to cause the Exchange to qualify as a
reorganization under the provisions of Section 368 of the
Code.
NOW,
THEREFORE, in consideration of the covenants and representations set forth
herein, and for other good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
ARTICLE
I
THE
EXCHANGE
1.1. Exchange
of Shares/Common Stock Purchase Warrants.
(a) Concurrently
with the execution of this Agreement, the Shareholder is assigning, transferring
contributing and delivering to Rhino 100% of the issued and outstanding shares
of capital stock of Yama Buggy (“Yama Buggy Shares”).
Concurrently
with the execution of this Agreement, Rhino is issuing to the Shareholder Ten
Million (10,000,000) shares of Rhino Common Stock (“Rhino
Shares”).
(b) Upon
the consummation of the exchange of shares described in this Section 1.1, the
Rhino and Rhino shall execute and file Articles of Exchange with Nevada
Secretary of State. It is intended by the parties hereto that the Exchange
shall
constitute a reorganization within the meaning of Section 368 of the
Code.
(c) In
addition to the issuance of the Rhino Shares, Rhino shall issue to Shareholder
the Rhino Common Stock Purchase Warrant in the form attached hereto as Exhibit
1.1(c) (“Warrant”).
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF YAMA BUGGY
In
this
Agreement, any reference to any event, change, condition or effect being
“material” with respect to any person means any material event, change,
condition or effect related to the condition, financial or otherwise,
properties, assets, including intangible assets, liabilities, business,
operations or results of operations of such person and its subsidiaries, taken
as a whole. In this Agreement, any reference to a “Material Adverse
Effect” with respect to any person means any event, change or effect that
is materially adverse to the condition, financial or otherwise, properties,
assets, liabilities, business, operations or results of operations of such
person.
In
this
Agreement, any reference to a party’s “knowledge” means such party’s actual
knowledge after reasonable inquiry of executive officers and
directors.
Except
as
disclosed in the Disclosure Schedule delivered by Yama Buggy to Rhino prior
to
the execution and delivery of this Agreement (“Yama Buggy Disclosure
Schedule”) corresponding to the Section of this Agreement to which any of
the following representations and warranties specifically relate or as disclosed
in another section of the Yama Buggy Disclosure Schedule if it is reasonably
apparent from the nature of the disclosure that it is applicable to another
Section of this Agreement, Yama Buggy represents and warrants to Rhino as
follows:
2.1 Organization,
Standing and Power. Yama Buggy is a corporation duly organized,
validly existing and in good standing under the laws of Nevada. Yama Buggy
has
the power to own its properties and to carry on its business as now being
conducted and as presently proposed to be conducted and is duly authorized
and
qualified to do business and is in good standing in each jurisdiction in which
the failure to be so qualified and in good standing would have a Material
Adverse Effect on Yama Buggy. Yama Buggy has delivered or made
available to Rhino a true and correct copy of the Articles of Incorporation
(“Articles of Incorporation”), and the Bylaws, or other charter
documents, as applicable, of Yama Buggy, as amended to date.
Yama
Buggy is not in violation of any of the provisions of its bylaws or equivalent
organization documents.
2.2 Capital
Structure. The authorized capital stock of Yama Buggy consists of
1,000,000 shares of common stock. There are no other outstanding shares of
capital stock or voting securities and no outstanding commitments to issue
any
shares of capital stock or voting securities after the date hereof. All
outstanding shares of Yama Buggy Common Stock are duly authorized, validly
issued, fully paid and non-assessable and are free of any liens or encumbrances
other than any liens or encumbrances created by or imposed upon the holders
thereof, and are not subject to preemptive rights or rights of first refusal
created by statute, the Articles of Incorporation or Bylaws of Yama Buggy or
any
agreement to which Yama Buggy is a party or by which it is bound. Except as
described above, there are no other options, warrants, calls, rights,
commitments or agreements of any character to which Yama Buggy is a party or
by
which it is bound obligating Yama Buggy to issue, deliver, sell, repurchase
or
redeem, or cause to be issued, delivered, sold, repurchased or redeemed, any
shares of capital stock of Yama Buggy or obligating Yama Buggy to grant, extend,
accelerate the vesting and/or repurchase rights of, change the price of, or
otherwise amend or enter into any such option, warrant, call, right, commitment
or agreement. There are no contracts, commitments or agreements relating to
voting, purchase or sale of Yama Buggy capital stock (i) between or
among Yama Buggy and any of Shareholder and (ii) to the
best knowledge of Yama Buggy between or among any of the Shareholder.
There are no dividends or other amounts due or payable with respect to any
of
the shares of capital stock of Yama Buggy..
2.3 Authority.
Yama Buggy has all requisite corporate power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby, subject to
the
execution and delivery of this Agreement by each of the Shareholder. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Yama Buggy. This Agreement has been duly
executed and delivered by Yama Buggy and constitutes the valid and binding
obligation of Yama Buggy enforceable against Yama Buggy in accordance with
its
terms, except as enforceability may be limited by bankruptcy and other laws
affecting the rights and remedies of creditors generally and general principles
of equity. The execution and delivery of this Agreement by Yama Buggy does
not,
and the consummation of the transactions contemplated hereby will not, conflict
with, or result in any violation of, or default under, with or without notice
or
lapse of time, or both, or give rise to a right of termination, cancellation
or
acceleration of any obligation or loss of any benefit under (i) any provision
of
the Articles of Incorporation or Bylaws of Yama Buggy, as amended, or (ii)
any
material mortgage, indenture, lease, contract or other agreement or instrument,
permit, concession, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Yama Buggy or any of its properties
or assets, except where such conflict, violation, default, termination,
cancellation or acceleration with respect to the foregoing provisions of (ii)
could not have had and could not reasonably be expected to have a Material
Adverse Effect on Yama Buggy.
No
consent, approval, order or authorization of, or registration, declaration
or
filing with, any court, administrative agency or commission or other
governmental authority or instrumentality (“Governmental Entity”) is
required by or with respect to Yama Buggy in connection with the execution
and
delivery of this Agreement, or the consummation of the transactions contemplated
hereby and thereby, except for (i) the filing of the Articles of Exchange as
provided in Section 1.1 of this Agreement; (ii) such consents,
approvals, orders, authorizations, registrations, declarations and filings
as
may be required under applicable state securities laws and the securities laws
of any foreign country; and (iii) such other consents, authorizations,
filings, approvals and registrations which, if not obtained or made, would
not
have a Material Adverse Effect on Yama Buggy and would not prevent, or
materially alter or delay any of the transactions contemplated by this
Agreement.
2.4 Litigation.
There is no private or governmental action, suit, proceeding, claim,
arbitration, audit or investigation pending before any agency, court or
tribunal, foreign or domestic, or, to the knowledge of Yama Buggy, threatened
against Yama Buggy or any of its properties or any of its officers or directors,
in their capacities as such, that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect on Yama Buggy. There
is
no injunction, judgment, decree, order or regulatory restriction imposed upon
Yama Buggy or any of its assets or business, or, to the knowledge of Yama Buggy,
any of its directors or officers, in their capacities as such, that would
prevent, enjoin, alter or materially delay any of the transactions contemplated
by this Agreement, or that could reasonably be expected to have a Material
Adverse Effect on Yama Buggy.
2.5 Restrictions
on Business Activities. There is no agreement, judgment,
injunction, order or decree binding upon Yama Buggy to which has or reasonably
could be expected to have the effect of prohibiting or materially impairing
any
business practice of Yama Buggy, any acquisition of property by Yama Buggy
or
the conduct of business by Yama Buggy.
2.6 Governmental
Authorization. To the knowledge of Yama Buggy, it has obtained each
federal, state, county, local or foreign governmental consent, license, permit,
grant, or other authorization of a Governmental Entity (i) pursuant to which
Yama Buggy currently operates or holds any interest in any of its properties
or
(ii) that is required for the operation of its business or the holding of any
such interest, (“Yama Buggy Authorizations”), and all of such Yama
Buggy Authorizations are in full force and effect, except where the failure
to
obtain or have any of such Yama Buggy Authorizations or where the failure of
such Yama Buggy Authorizations to be in full force and effect could not
reasonably be expected to have a Material Adverse Effect on Yama
Buggy.
2.7 Title
to Property. Yama Buggy has good and valid title to all
of its properties, interests in properties and assets, real and personal,
except leased properties and assets, valid leasehold interests in,
free and clear of all mortgages, liens, pledges, charges or encumbrances of
any
kind or character, except (i) the lien of current taxes not yet due and payable,
(ii) such imperfections of title, liens and easements as do not and will not
materially detract from or interfere with the use of the properties subject
thereto or affected thereby, or otherwise materially impair business operations
involving such properties, (iii) liens securing debt, and (iv) liens that in
the
aggregate would not have a Material Adverse Effect on Yama Buggy. To the
knowledge of Yama Buggy, the plants, property and equipment of Yama Buggy that
are used in the operations of its business are in good operating condition
and
repair, except where the failure to be in good operating condition or repair
would not have a Material Adverse Effect.
2.8 Compliance
With Laws. To its knowledge, Yama Buggy has complied with, is not
in violation of, and Yama Buggy has not received any notices of violation with
respect to, any federal, state, local or foreign statute, law or regulation
with
respect to the conduct of its business, or the ownership or operation of its
business, except for such violations or failures to comply as could not be
reasonably expected to have a Material Adverse Effect on Yama
Buggy.
2.9 Minute
Books. The minute books of Yama Buggy have been made available to
Rhino contain in all material respects a complete and accurate summary of all
meetings of directors and stockholders or actions by written consent of Yama
Buggy from the date if inception through the date of this Agreement, and reflect
all transactions referred to in such minutes accurately in all material
respects.
2.10 Brokers’
and Finders’ Fees. Yama Buggy has not incurred, nor will it incur,
directly or indirectly, any liability for brokerage or finders’ fees or agents’
commissions or investment bankers’ fees or any similar charges in connection
with this Agreement or any transaction contemplated hereby.
2.11 Information.
The information concerning Yama Buggy set forth in Section 2 of this Agreement
is complete and accurate in all material respects and does not contain any
untrue statement of a material fact or omit to state a material fact required
to
make the statements made, in light of the circumstances under which they were
made, not misleading.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF RHINO
Except
as
disclosed in the Disclosure Schedule delivered by Rhino to Yama Buggy and
Shareholder prior to the execution and delivery of this Agreement (“Rhino
Disclosure Schedule”) corresponding to the Section of this Agreement to
which any of the following representations and warranties specifically relate
or
as disclosed in another section of the Rhino Disclosure Schedule if it is
reasonably apparent on the face of the disclosure that it is applicable to
another Section of this Agreement, Rhino represents and warrants to Yama Buggy
as follows:
3.1 Organization,
Standing and Power. Rhino is a corporation duly organized, validly
existing and in good standing under the laws of Nevada. Rhino has the corporate
power to own its properties and to carry on its business as now being conducted
and as proposed to be conducted and is duly qualified to do business and is
in
good standing in each jurisdiction in which the failure to be so qualified
and
in good standing would have a Material Adverse Effect on Rhino. Rhino has
delivered or made available to Rhino a true and correct copy of the Certificate
of Incorporation, and the Bylaws, or other charter documents, as applicable,
of
Rhino, each as amended to date. Rhino is not in violation of any of the
provisions of its Certificate of Incorporation or Bylaws or equivalent
organizational documents. Rhino does not directly or indirectly own any equity
or similar interest in, or any interest convertible or exchangeable or
exercisable for, any equity or similar interest in, any corporation,
partnership, joint venture or other business association or entity. Rhino has
no
committees of its Board of Directors, charters, codes of conduct or ethics,
or
similar policies.
3.2 Capital
Structure. The authorized capital stock of Rhino consists of
500,000,000 shares of Rhino Common Stock, and 5,000,000 shares of preferred
stock, $0.001 par value (“Rhino Preferred”). There are issued and
outstanding, as of the date hereof, 86,455,000 shares of Rhino Series A Common
Stock, no shares of Rhino Series B Common Stock, 950,000 shares of Series A
Rhino Preferred, 1,000,000 shares of Series B Rhino Preferred and 2,650,000
shares of Series C Rhino Preferred. The shares of Rhino Stock to be issued
pursuant to the provisions of this Agreement will be duly authorized, validly
issued, fully paid, and non-assessable, free of any liens or encumbrances,
and
will be issued in full compliance with all applicable federal and state
securities laws. There are no other outstanding shares of capital stock or
voting securities and no outstanding commitments to issue any shares of capital
stock or voting securities after the date hereof. All outstanding shares of
Rhino Common Stock and Rhino Preferred Stock are duly authorized, validly
issued, fully paid and non-assessable and are free of any liens or encumbrances
other than any liens or encumbrances created by or imposed upon the holders
thereof, and are not subject to preemptive rights or rights of first refusal
created by statute, the Articles of Incorporation or Bylaws of Rhino or any
agreement to which Rhino is a party or by which it is bound.
Further,
all outstanding shares of Rhino Common Stock and Rhino Preferred Stock have
been
issued in full compliance with all applicable federal and state securities
laws. There are no options, warrants, calls, rights, commitments or
agreements of any character to which Rhino is a party or by which it is bound
obligating Rhino to issue, deliver, sell, repurchase or redeem, or cause to
be
issued, delivered, sold, repurchased or redeemed, any shares of capital stock
of
Rhino or obligating Rhino to grant, extend, accelerate the vesting and/or
repurchase rights of, change the price of, or otherwise amend or enter into
any
such option, warrant, call, right, commitment or agreement. There are no
contracts, commitments or agreements relating to voting, purchase or sale of
Rhino’ capital stock (i) between or among Rhino and any of its Shareholder and
(ii) to the best of Rhino’ knowledge, between or among any of Rhino’
Shareholder. There are no dividends or other amounts due or payable with respect
to any of the shares of capital stock of Rhino.
3.3 Authority.
Rhino has all requisite corporate power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of Rhino. This Agreement has been duly executed and delivered by
Rhino and constitutes the valid and binding obligations of Rhino enforceable
against Rhino in accordance with its terms, except as enforceability may be
limited by bankruptcy and other laws affecting the rights and remedies of
creditors generally and general principles of equity. The execution and delivery
of this Agreement do not, and the consummation of the transactions contemplated
hereby will not, conflict with, or result in any violation of, or default under,
with or without notice or lapse of time, or both, or give rise to a right of
termination, cancellation or acceleration of any obligation or loss of any
benefit under (i) any provision of the Articles of Incorporation or Bylaws
of
Rhino, as amended, or (ii) any material mortgage, indenture, lease, contract
or
other agreement or instrument, permit, concession, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to Rhino
or any of its subsidiaries or their properties or assets, except where such
conflict, violation, default, termination, cancellation or acceleration with
respect to the foregoing provisions of (ii) could not have had and could not
reasonably be expected to have a Material Adverse Effect on Rhino. No consent,
approval, order or authorization of, or registration, declaration or filing
with, any Governmental Entity, is required by or with respect to Rhino or any
of
its subsidiaries in connection with the execution and delivery of this Agreement
by Rhino or the consummation by Rhino of the transactions contemplated hereby,
except for (i) the filing with the SEC of Form D; (ii) any filings as may
be required under applicable state securities laws and the securities laws
of
any foreign country; (iii) any filings required with the National Quotation
Bureau Incorporated with respect to the shares of Rhino Common Stock issuable
upon exchange of Rhino Common Stock in the Merger; and (iv) such other consents,
authorizations, filings, approvals and registrations which, if not obtained
or
made, would not have a Material Adverse Effect on Rhino and would not prevent
or
materially alter or delay any of the transactions contemplated by this
Agreement.
3.4 Absence
of Certain Changes. Rhino has conducted its business in the
ordinary course consistent with past practice and there has not occurred: (i)
any change, event or condition (whether or not covered by insurance) that has
resulted in, or is reasonably likely to result in, or to the best of Rhino’
knowledge any event beyond Rhino’ control that is reasonably likely to result
in, a Material Adverse Effect to Rhino; (ii) any acquisition, sale or transfer
of any material asset of Rhino or any of its subsidiaries other than in the
ordinary course of business and consistent with past practice; (iii) any change
in accounting methods or practices, including any change in depreciation or
amortization policies or rates, by Rhino or any revaluation by Rhino of any
of
its or any of its subsidiaries’ assets; (iv) any declaration, setting aside, or
payment of a dividend or other distribution with respect to the shares of Rhino,
or any direct or indirect redemption, purchase or other acquisition by Rhino
of
any of its shares of capital stock; (v) any material contract entered into
by
Rhino or any of its subsidiaries, other than in the ordinary course of business
and as provided to Rhino, or any amendment or termination of, or default under,
any material contract to which Rhino or any of its subsidiaries is a party
or by
which it is bound; (vi) any amendment or change to Rhino’ Articles of
Incorporation or Bylaws; or (vii) any increase in or modification of the
compensation or benefits payable, or to become payable, by Rhino to any of
its
directors or employees, other than pursuant to scheduled annual performance
reviews, provided that any resulting modifications are in the ordinary course
of
business and consistent with Rhino’ past practices. Rhino has not agreed since
December 31, 2005 to do any of the things described in the preceding clauses
(i)
through (vii) and is not currently involved in any negotiations to take any
of
the actions described in the preceding clauses (I) through (vii), other than
negotiations with Rhino and its representatives regarding the transactions
contemplated by this Agreement.
3.5 Litigation.
There is no private or governmental action, suit, proceeding, claim,
arbitration, audit or investigation pending before any agency, court or
tribunal, foreign or domestic, or, to the knowledge of Rhino, threatened against
Rhino or any of its properties or any of its officers or directors, in their
capacities as such, that, individually or in the aggregate, could reasonably
be
expected to have a Material Adverse Effect on Rhino. There is no injunction,
judgment, decree, order or regulatory restriction imposed upon Rhino or any
of
its assets or business, or, to the knowledge of Rhino, any of its directors
or
officers, in their capacities as such, that would prevent, enjoin, alter or
materially delay any of the transactions contemplated by this Agreement, or
that
could reasonably be expected to have a Material Adverse Effect on
Rhino.
3.6 Restrictions
on Business Activities. There is no agreement, judgment,
injunction, order or decree binding upon Rhino or any of its subsidiaries which
has or reasonably could be expected to have the effect of prohibiting or
materially impairing any business practice of Rhino, any acquisition of property
by Rhino or the conduct of business by Rhino.
3.7 Governmental
Authorization. Rhino has obtained each federal, state, county,
local or foreign governmental consent, license, permit, grant, or other
authorization of a Governmental Entity (i) pursuant to which Rhino currently
operates or holds any interest in any of its properties or (ii) that is required
for the operation of Rhino’ business or the holding of any such interest ((i)
and (ii) herein collectively referred to as “Rhino Authorizations”),
and all of such Rhino Authorizations are in full force and effect, except where
the failure to obtain or have any of such Rhino Authorizations or where the
failure of such Rhino Authorizations to be in full force and effect could not
reasonably be expected to have a Material Adverse Effect on Rhino.
3.8 Title
to Property. Rhino has good and valid title to all of its
properties, interests in properties and assets, real and personal, except
properties, interests in properties and assets sold or otherwise disposed of
in
the ordinary course of business, or in the case of leased properties and assets,
valid leasehold interests in, free and clear of all mortgages, liens, pledges,
charges or encumbrances of any kind or character, except (i) the lien of current
taxes not yet due and payable, (ii) such imperfections of title, liens and
easements as do not and will not materially detract from or interfere with
the
use of the properties subject thereto or affected thereby, or otherwise
materially impair business operations involving such properties, (iii) liens
securing debt, and (iv) liens that in the aggregate would not have a Material
Adverse Effect on Rhino. The plants, property and equipment of Rhino that are
used in the operations of its business are in good operating condition and
repair, except where the failure to be in good operating condition or repair
would not have a Material Adverse Effect. All properties used in the operations
of Rhino to the extent generally accepted accounting principles require the
same
to be reflected.
3.9 Taxes.
Rhino has filed and provided to Rhino copies of all tax returns
required to be filed by it from inception to the date hereof. All such returns
and reports are accurate and correct in all material respects. Rhino
has no material liabilities with respect to the payment of any federal, state,
county, local or other taxes, including any deficiencies, interest, or
penalties, accrued for or applicable to the period ended on the Rhino Balance
Sheet Date. To the best knowledge of Rhino, none of its tax returns has been
examined or is currently being examined by the Internal Revenue Service and
no
deficiency assessment or proposed adjustment of any such return is pending,
proposed or contemplated. Rhino has not made any election pursuant to the
provisions of any applicable tax laws, other than elections that relate solely
to methods of accounting, depreciation, or amortization, that would have a
material adverse affect on Rhino, its financial condition, its business as
presently conducted or proposed to be conducted, or any of its respective
properties or material assets. There are no outstanding agreements or waivers
extending the statutory period of limitation applicable to any tax return of
Rhino.
Share
Exchange Agreement and Plan of Reorganization- Page 9
3.10 Compliance
With Laws. Rhino has complied with, is not in violation of, and has
not received any notices of violation with respect to, any federal, state,
local
or foreign statute, law or regulation with respect to the conduct of its
business, or the ownership or operation of its business, except for such
violations or failures to comply as would not be reasonably expected to have
a
Material Adverse Effect on Rhino.
3.11 Financial
Statements. The Rhino Financial Statements filed with the
Securities & Exchange Commission each fairly presents in all material
respects the financial position of Rhino at the respective dates thereof and
the
results of its operations and cash flows for the periods indicated.
3.12 Brokers’
and Finders’ Fees. Rhino has not incurred, nor will it incur,
directly or indirectly, any liability for brokerage or finders’ fees or agents’
commissions or investment bankers’ fees or any similar charges in connection
with this Agreement or any transaction contemplated hereby.
3.13 Lack
of Rhino Profitability. Yama Buggy acknowledges that
Rhino has not been profitable since its inception and that Rhino will, for
the
foreseeable future, continue to need funding to operate.
3.14 Information.
The information concerning Rhino set forth in Section 3 of this Agreement is
complete and accurate in all material respects and does not contain any untrue
statement of a material fact or omit to state a material fact required to make
the statements made, in light of the circumstances under which they were made,
not misleading.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF SHAREHOLDER
Shareholder
represents and warrants to Rhino that:
4.1 Title
and Authority. Shareholder has the full right,
power and authority to enter into this Agreement and to transfer, convey and
deliver to Rhino the Shares being transferred to Rhino by Shareholder
hereunder and upon consummation of the Exchange Rhino will acquire
from Shareholder good and marketable title to the Shares being
transferred to Rhino by Shareholder, free and clear of all covenants,
conditions, restrictions, voting trust arrangements, liens, charges,
encumbrances, option and adverse claims or rights whatsoever.
4.2 No
Legal Bar. Shareholder is not a party to, subject to or
bound by any agreement or judgment, order, writ, prohibition, injunction or
decree of any court or other governmental body which would prevent the execution
or delivery of this Agreement by Shareholder to Rhino or the
transfer, conveyance and delivery of the Shares being transferred
by Shareholder to Rhino pursuant to the terms hereof.
Share
Exchange Agreement and Plan of Reorganization- Page 10
4.3 Restrictions
on Rhino Shares. Shareholder
acknowledges that, except as otherwise provided in this Agreement the Rhino
Shares will be not be registered under the Securities Act of 1933 or any state
securities law and are characterized as “restricted securities” under the
Securities Act of 1933. Therefore, the transferability of the Rhino Shares
will
be restricted. Certificates evidencing the Rhino Shares will include a legend
reading substantially as follows:
|
|
THE
SHARES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933
(“ACT”) OR ANY STATE SECURITIES LAW. THE SHARES HAVE BEEN ACQUIRED WITHOUT
A VIEW TO DISTRIBUTION AND MAY NOT BE OFFERED, SOLD,TRANSFERRED,
PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR THE
SHARES UNDER THE ACT AND UNDER APPLICABLE STATE SECURITIES LAWS,
OR AN
OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION
IS NOT
REQUIRED AS TO SUCH SALE, OFFER,TRANSFER,
PLEDGE OR
HYPOTHECATION.
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ARTICLE
V
ADDITIONAL
AGREEMENTS
5.1 Public
Disclosure. Unless otherwise permitted by this Agreement, Rhino and
Yama Buggy shall consult with each other before issuing any press release or
otherwise making any public statement or making any other public, or
non-confidential, disclosure, whether or not in response to an inquiry,
regarding the terms of this Agreement and the transactions contemplated hereby,
and neither shall issue any such press release or make any such statement or
disclosure without the prior approval of the other, which approval shall not
be
unreasonably withheld, except as may be required by law or by obligations
pursuant to the Securities Act of 1933 and rules and regulations promulgated
by
the Securities and Exchange Commission thereunder, any listing agreement with
any national securities exchange or with the NASD, in which case the party
proposing to issue such press release or make such public statement or
disclosure shall use its commercially reasonable efforts to consult with the
other party before issuing such press release or making such public statement
or
disclosure.
5.2 Blue
Sky Laws. Rhino shall use its reasonable efforts to comply with the
securities and blue sky laws of all jurisdictions which are applicable to the
issuance of the Rhino Common Stock in connection with the Exchange. The
Shareholder shall use their reasonable best efforts to assist Rhino as may
be
necessary to comply with the securities and blue sky laws of all jurisdictions
which are applicable in connection with the issuance of Rhino Common Stock
in
connection with the Exchange.
Share
Exchange Agreement and Plan of Reorganization- Page 11
5.3 Tax
Treatment. For U.S. federal income tax purposes, it is intended
that the Exchange qualify as a reorganization within the meaning of the Code,
and the parties hereto intend that this Agreement shall constitute a “plan of
reorganization” within the meaning of Section 368 of the Code and Treasury
Regulations Sections 1.368-2(g) and 1.368-3(a). Rhino will report the Exchange
on its income tax returns in a manner consistent with treatment of the Exchange
as a Code Section 368(b) reorganization. Neither Rhino, Rhino nor any of
their respective affiliates has taken any action, nor will they take any action,
that could reasonably be expected to prevent or impede the Exchange from
qualifying as a reorganization under Section 368 of the Code.
5.4 Repurchase
of Yamabuyggy Shares. In
the
event that Shareholder undertakes a public offering of its common stock to
the
public and as a consequence of such offering becomes publicly-held, Shareholder
shall have the right to repurchase the Yama Buggy Shares from Rhino for a
purchase price, at the sole option and discretion of Rhino, of the
greater of (a) $1,000,000. 00 in cash; (b) ten percent (10%) of the then issued
and outstanding common stock of Shareholder at the time of repurchase; or (c)
$100,000.00 in cash plus the market value of the Rhino Shares based on the
30-day trailing average closing bid price of the Rhino Shares as quoted on
the
OTC BB.
ARTICLE
VI
CLOSING
DELIVERIES
9.1 By
Rhino. Concurrently with the execution of this Agreement, Rhino is
delivering to the Shareholder:
(a) Stock
certificates representing eh Rhino Shares in the name of the
Shareholder.
(b) The
Warrant.
(c) Copies
of resolutions of the board of directors of Rhino authorizing the execution
and
performance of this Agreement, certified by the secretary or an assistant
secretary of Rhino as of the date hereof.
9.2 By
Yama Buggy and Shareholder. Concurrently with the
execution of this Agreement, Yama Buggy and the Shareholder are delivering
to
Rhino:
(a) Stock
certificates, duly endorsed in blank, representing all of the Yama Buggy
Shares.
(b) A
certificate of good standing from the secretary of state of Nevada, issued
as of
a date within 60 days prior to the date hereof certifying that Yama Buggy is
in
good standing as a corporation in the state of Nevada.
(c) Copies
of resolutions of the board of directors authorizing the execution and
performance of this Agreement and the contemplated transactions, certified
by
the secretary or an assistant secretary of Rhino as of the date
hereof.
Share
Exchange Agreement and Plan of Reorganization- Page 12
ARTICLE
X
GENERAL
PROVISIONS
10.1 Notices.
All notices and other communications hereunder shall be in writing and shall
be
deemed given if delivered personally or by commercial delivery service, or
mailed by registered or certified mail, return receipt requested, or sent via
facsimile, with confirmation of receipt, to the parties at the following
address, or at such other address for a party as shall be specified by like
notice:
(a) if
to Rhino to:
Xxxxxx
X. Pearl,
President/CEO
0000
Xxxxxx Xxxxx Xxxxx
Xxxxxxxxx,
Xxxxxx 00000
Fax: (000)
000-0000
(b) if
to Yama Buggy or the Shareholder, to:
Xxxx
Xxxxxxxxx
000
Xxxxxxxxx Xxxx
Xxxxxxxxx,
XX 00000
Fax:
(000) 000-0000
Share
Exchange Agreement and Plan of Reorganization- Page 13
10.2 Entire
Agreement; Nonassignability; Parties in Interest. This Agreement
and the documents and instruments and other agreements specifically referred
to
herein or delivered pursuant hereto,(a) constitute the entire agreement among
the parties with respect to the subject matter hereof and supersede all prior
agreements, understandings, representations and warranties, both written and
oral, among the parties with respect to the subject matter hereof, (b) are
not
intended to confer upon any other person any rights or remedies hereunder;
and
(c) shall not be assigned by operation of law or otherwise except as otherwise
specifically provided.
10.3 Severability.
If any provision of this Agreement, or the application thereof, becomes or
is
declared by a court of competent jurisdiction to be illegal, void or
unenforceable, the remainder of this Agreement will continue in full force
and
effect and the application of such provision to other persons or circumstances
will be interpreted so as reasonably to effect the intent of the parties hereto.
The parties further agree to replace such void or unenforceable provision of
this Agreement with a valid and enforceable provision that will achieve, to
the
extent possible, the economic, business and other purposes of such void or
unenforceable provision.
10.4 Remedies
Cumulative. Except as otherwise provided herein, any and all
remedies herein expressly conferred upon a party will be deemed cumulative
with
and not exclusive of any other remedy conferred hereby, or by law or equity
upon
such party, and the exercise by a party of any one remedy will not preclude
the
exercise of any other remedy.
10.5 Arbitration
Required/Mediation First Option. Any dispute or claim
that arises out of or that relates to this Agreement, or to the interpretation
or breach thereof, or to the existence, scope, or validity of this Agreement
or
the arbitration agreement, shall be resolved by arbitration in accordance with
the then effective arbitration rules of American Arbitration Association.
Judgment upon the award rendered pursuant to such arbitration may be entered
in
any court having jurisdiction thereof. The parties acknowledge that
mediation usually helps parties to settle their dispute. Therefore,
any party may propose mediation whenever appropriate through the organization
named above or any other mediation process or mediator as the parties may agree
upon.
10.6 Governing
Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada, without regard to the laws
that
might otherwise govern under applicable principles of conflicts of law. Each
of
the parties hereto irrevocably consents to the exclusive jurisdiction of any
court located within the State of Nevada in connection with any matter based
upon or arising out of this Agreement or the matters contemplated herein, agrees
that process may be served upon them in any manner authorized by the laws of
the
State of Nevada for such persons and waives and covenants not to assert or
plead
any objection which they might otherwise have to such jurisdiction and such
process.
Share
Exchange Agreement and Plan of Reorganization- Page 14
10.7 Rules
of Construction. The parties hereto agree that they have been
represented by counsel during the negotiation, preparation and execution of
this
Agreement and, therefore, waive the application of any law, regulation, holding
or rule of construction providing that ambiguities in an agreement or other
document will be construed against the party drafting such agreement or
document.
10.8 Attorneys
Fees. In the event any legal action is filed by any
party or parties to this Agreement relating in any way to this Agreement, the
losing party or parties in such action shall reimburse the prevailing party
or
parties for all attorneys fees and costs of litigation.
10.9 Waiver. The
failure of any party to enforce, in one or more instances, any of the terms
or
conditions of this Agreement shall not be construed as a waiver of the future
performance of any such term or condition unless the waiver is made in
writing.
10.10 Amendments. No
amendment, modification or supplement to this Agreement shall be binding on
any
of the parties unless it is in writing and duly signed by the parties in
interest at the time of the modification.
10.11 Advise
of Counsel. This Agreement was prepare on behalf of
Rhino by the Law Office of Xxxxxx X. Xxxxxxxxx. Yama Buggy and Shareholder
have
been advised to obtain their own respective legal counsel in connection with
this Agreement and Rhino has been advised that neither Yama Buggy nor
Shareholder has consulted with legal counsel.
Share
Exchange Agreement and Plan of Reorganization- Page 15
10.12 Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument. This Agreement shall not be effective until the execution
and delivery between each of the parties of at least one set of
counterparts. The parties authorize each other to detach and combine
original signature pages and consolidate them into a single identical
original.
IN
WITNESS WHEREOF, Rhino, Yama Buggy and the Shareholder have caused this Share
Exchange and Reorganization Agreement to be executed and delivered by their
respective officers authorized, all as of the date first written
above.
By:
/s/ XXXXXX
XXXXX
Xxxxxx
Xxxxx, President and Chief Executive Officer
YAMA
BUGGY SALES AND DISTRIBUTION , INC.
By:
/s/ XXXX
XXXX
Xxxx
Xxxx, President
SHAREHOLDER
YAMA
BUGGY, LLC
By:
/s/ XXXX
XXXXXXXXX
Xxxx
Xxxxxxxxx, President
Share
Exchange Agreement and Plan of Reorganization- Page 16
