Document:

EXHIBIT 4.2

                                                       Name:____________________

                                                      Copy No.:_________________

                    CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM

                                RG America, Inc.
                          f/k/a INVVISION CAPITAL, Inc

                                   $1,000,000
                                   ----------

                   SECURED SUBORDINATED CONVERTIBLE DEBENTURES

                         MINIMUM SUBSCRIPTION: $ 25,000

      RG America  f/k/a  Invvision  Capital,  Inc.,  a Nevada  corporation  (the
"Company"  or "RG  America")  hereby  offers  up to  $1,000,000  of its  secured
subordinated  convertible debentures (the "Debentures") on the terms provided in
this confidential private placement memorandum (the "Memorandum"). RG America is
engaged in the business of providing risk  management  and property  restoration
services to clients in the commercial real estate industry.

      The  Debentures  will  be sold  only to a  limited  number  of  accredited
investors  (as defined  under  applicable  federal and state  securities  laws).
Qualified  investors (as defined herein) may purchase Debentures under the terms
set forth in this Memorandum.  Brokers,  dealers or sales agents may be used, in
which case commissions will be paid for the offer or sale of the Debentures,  as
set forth herein.

      The  offer  and  sale  of the  Debentures  offered  hereby  has  not  been
registered or qualified  under the Securities  Act of 1933, as amended,  or with
any state securities agency.  Instead, the Debentures are being offered and sold
in reliance upon  exemptions  from the  requirement  for such  registration  and
qualification for private offerings. The sale, transfer,  pledge,  hypothecation
or  other  disposition  of the  Debentures  or an  interest  therein  may not be
accomplished  except in accordance  with the  registration  requirements  of the
Securities  Act, as amended,  and applicable  state  securities  laws.  Prior to
transfer,  compliance with such requirements shall be demonstrated by an opinion
of  counsel  satisfactory  to  us  to  the  effect  that  such  registration  or
qualification is not required.

      The  minimum  subscription  for  an  investor  is  a  face  value  $25,000
Debenture.  Persons  subscribing  for the minimum  number of Debentures may also
subscribe for additional Debentures. Our Common Stock is currently quoted on the
NASD  Over-The-Counter  Bulletin Board (the  "Bulletin  Board") under the symbol
"RGMA.OB."  The closing  price as reported by the Bulletin  Board for our Common
Stock on December 10, 2004 was $0.13 per share.

                          ----------------------------

      See  "Risk  Factors"  for   information   that  should  be  considered  by
prospective investors.

      The  Securities  and  Exchange   Commission  (SEC)  and  state  securities
regulators  have not approved these  securities or determined if this Memorandum
is  truthful  or  complete.  Any  representation  to the  contrary is a criminal
offense.

      The date of this Confidential Private Placement Memorandum is December 10,
2004.

<PAGE>

      The terms,  "RG America",  "Company",  "we",  "our",  and "us" refer to RG
America,  Inc.  unless context  suggests  otherwise.  The terms "you" and "your"
refer to a  prospective  investor.  The term  "Common  Stock" means RG America's
common stock, par value $0.001 per share.

      Please read this Memorandum carefully. It describes our company,  finances
and services.  Federal and State securities laws require that we include in this
Memorandum all the material information that you will need to make an investment
decision.

      You may only refer to the  information  contained in this  Memorandum.  We
have not authorized anyone to provide information  different from that contained
in this Memorandum.  Neither the delivery of this Memorandum nor the sale of our
Debentures means that information  contained in this Memorandum is correct after
the  date  of  this  Memorandum.  This  document  is not an  offer  to  sell  or
solicitation of an offer to buy our Debentures in any circumstances  under which
the offer or solicitation is unlawful.

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<PAGE>

                                     SUMMARY

      This summary is intended  only for quick  reference and is not intended to
be  all-inclusive.  This Memorandum  describes in detail numerous aspects of the
Offering that are material to investors,  including those summarized below. This
Memorandum,  with its exhibits and supporting  documents,  must be read in their
entirety by  prospective  investors.  The following  summary is qualified in its
entirety  by  reference  to the  full  text of this  Memorandum,  including  its
exhibits and supporting documents.  The Debentures offered hereby involve a high
degree of risk. See "Risk Factors."

About Our Company

      We provide a broad array of fee-based  services that address clients' risk
management  needs. We intend to do this by dealing with all procedures and costs
associated with the risk of a possible loss such as loss control  activities and
purchasing traditional insurance products. We also deal with the consequences of
a loss after it has occurred by pre-qualifying property, lowering reconstruction
costs,  providing  appropriate insurance coverage,  adjusting claims,  restoring
property and minimizing business interruption costs.

Our Strategy

      We offer three main types of services:

      o     A full-service risk management program designed for the multi-family
            housing industry;

      o     A general lines insurance  agency  specializing in placing  business
            related insurance for a variety of customers; and

      o     A  multi-family  housing and  commercial  real  estate  restoration/
            construction division.

      Our risk  management  programs  and  insurance  agency  are  opportunities
identified by the management of the restoration  construction business conducted
by  our  subsidiary  RG  Restoration,   Inc.  ("RG").   Each  of  our  operating
subsidiaries  was formed to  capitalize  on our  historic  roots within the risk
management  industry and the affinity  group of customers that we have developed
through superior service and customer value generation. We believe synergies can
be realized by directly  marketing a full spectrum of risk  management  products
and services in a less competitive,  more loyal environment.  This strategy also
creates a diversified  stream of recurring  revenue that is far less cyclical in
nature than  traditional  risk  management or  construction  income.  Therefore,
although  each  unit has a unique  marketing  strategy  and  product  portfolio,
marketing efforts are closely  coordinated and complementary,  and share certain
key elements.

      An important  component of any corporate  marketing  strategy is selecting
the basis of  competition.  We can choose to compete  on price,  service  and/or
products.  Competing on product alone can mean offering the widest  selection or
the highest quality product lines.  Many companies can compete on any one or two
of these  bases,  but cannot  deliver all three.  We believe it is, for example,
inconsistent to offer superior service and premium products at a discount price.
Our business units provide on superior  service and, to varying  degrees,  lower
prices.

Subsidiaries

      We are comprised of indirect wholly-owned subsidiaries providing insurance
products, claims management services and property restoration services:

      o     RG Insurance  Services,  Inc. is a general insurance agency which is
            currently  licensed  in the  state of Texas  as a Texas  Property  &
            Casualty and a Life & Health insurance agency;

      o     RG Risk Management,  Inc. provides claim management,  inspection and
            underwriting  services.  These services are provided both in support
            of our proprietary risk management program,  PropertySMARTSM,  which
            is specifically  designed for the multi-family  housing industry and
            on a fee basis to other various types of customers;

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<PAGE>

      o     RG Restoration,  Inc. dba The Restoration Group performs restoration
            work on commercial properties (primarily multi-family housing) which
            have suffered an insured loss such as a fire, flood or hail damage;

      o     Restoration Group America, Inc. is a non-operating company set up to
            hold the intellectual property rights to PropertySMARTSM.; and

      o     Practical  Buildings  Solutions  2000,  Inc. is a specialist  in the
            design and  coordination of multi- family and commercial  Mechanical
            Electrical and Plumbing (MEP) engineering

Our Competitive Advantage

      We believe that the  combination of our restoration  services,  along with
our other more traditional risk management services, including our full lines of
insurance agency,  differentiates us from our competitors and provides us with a
significant  competitive  advantage.  Our  restoration  division  serves  as our
strategic  "implementation arm" and affords us the unique ability to control (i)
property loss costs, which we believe are the most unpredictable and potentially
the largest  component of a customer's risk management  budget and (ii) property
insurer cost structures.  We are also able to deliver value through a high level
of quality service after the client sustains a major loss such as fire or flood.

Our Management

      Our  management  team  consists  of  individuals  with  experience  in the
management of insurance companies,  real estate  developments,  retail companies
and restoration businesses.

      Mr.  Edward P. Rea, our  Chairman,  has over 35 years of experience in the
development,  capitalization,  expansion and disposition of operating companies.
He was the  founder  and  CEO of  Triland  International,  Inc.,  a real  estate
investment/development  company specializing in large master-planned real estate
developments in Dallas, Denver and Atlanta. Past accomplishments  include Valley
Ranch,  a  master-planned  real  estate  development  and home of the NFL Dallas
Cowboys  training  facility.  He is also  currently  the Chairman and CEO of The
Crafter's Marketplace, Ltd.

      Mr.  John E. (Ted) Rea,  our Chief  Executive  Officer and  Director,  was
previously  our President and has been a member of our Board of Directors  since
April 2001.  Mr. Rea has been involved in various  aspects of management in real
estate  construction,  development  and  syndication  for more than 24 years. He
previously  co-founded  and served as  President  of a national  retail chain in
Canada, The Crafter's Marketplace,  beginning in 1994, with daily operations and
management of more than 30 stores,  250 employees  and over 15,000  tenants.  He
attended Southern  Methodist  University from 1983 to 1985. He has been a member
of Young  President  Organization  (YPO) since 1999,  serving in numerous forum,
chapter and regional positions.

      Mr. James A. Rea, our Chief Operating Officer and co-founder,  has over 10
years of experience in the  construction and property  restoration  industry and
previously  served as Vice President of Construction for Matthews  Southwest,  a
Texas-based  construction and development firm. In addition,  he has founded and
operated his own custom home building  company,  building homes throughout North
Texas.

      Mr. Bruce A. Hall, our Chief Financial Officer , joined us in May 2004 and
is a senior financial  executive with extensive  experience as a CFO and related
financial  management   positions  in  the  real  estate  development,   energy,
consulting and manufacturing  industries.  He has held senior level positions at
Recognition  Equipment,  Inc., Harris Adacom Corporation and Probex Corporation.
He has also been an  independent  senior  financial and  management  consultant,
multi-family  housing  developer and began his career in public  accounting with
Arthur Young & Company,  a predecessor of Ernst & Young LLP. Mr. Hall holds both
CPA (Certified  Public  Accountant)  and CMA (Certified  Management  Accountant)
designations and is a graduate of the University of Texas at Austin.

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<PAGE>

      Mr.  Richard  S.  Nelson,  our  President,  has over 20  years  of  senior
management experience.  He was previously Senior Vice President - Business Sales
of WebLink  Wireless,  Inc.  f/k/a  PageMart  Wireless,  Inc.,  a  NASDAQ-listed
wireless  communications  carrier and Vice  President of Marketing  for American
Eagle airlines.

      Mr. Kevin L. Dahlberg,  our Executive Vice President , has a distinguished
20 year career in real estate and securities investments, holding various senior
positions with Hillwood,  a Perot company,  Goldman Sachs,  Keybank and Fidelity
Investments.  He currently holds series 6, 63, and 7 securities licenses and was
responsible  for  creating a $100 million  real estate  acquisition  platform in
Japan for Hillwood.

      Ms. Evelyn M. Rawls,  our  Vice-President  - Insurance  Operations and the
President of our  subsidiary RG Insurance  Services,  Inc., has over 20 years of
experience in the insurance and risk management industry. Prior to joining RGIS,
she was vice president of Merit Insurance, a Texas full-line insurance company.

      Mr. Robert A. (Andy) England is our Chief Technology Officer.  Mr. England
has over 20 years of  experience in the  information  technology  industry.  Mr.
England  previously  held  several  senior  IT  positions  at Sabre  Corporation
including Senior Integration  Manager and served as a Global Account Manager for
Motorola, Inc.

      Mr.  Christopher S. Willis,  our Senior Vice President and General Counsel
of our subsidiary, RG Insurance Services, was previously employed as Senior Vice
President,  General Counsel and Corporate  Secretary of Cunningham Lindsey U.S.,
Inc,  an  insurance  loss  adjusting  firm based in Dallas,  Texas with over 100
locations across the United States.  While at Cunningham Lindsey U.S., Inc., Mr.
Willis was responsible for all legal matters,  including litigation  management,
corporate and regulatory compliance,  as well as for the supervision of the risk
management,  human resources and  administrative  departments.  Prior to joining
Cunningham Lindsey U.S., Inc., Mr. Willis was an associate attorney with the law
firm of Touchstone,  Bernays, Johnston, Beall, Smith & Stollenwerk L.L.P. with a
general  commercial  and insurance  litigation  practice.  Mr.  Willis' areas of
expertise  include  licensing/regulatory  compliance,  risk  management,  claims
administration,  defense  of  extra-contractual  and  bad  faith  claims,  human
resources,  acquisitions  and strategic  planning.  He is a graduate of Southern
Methodist  University  where he  received  degrees in  economics  and  political
science as well as a Juris Doctorate.

      Mr.  Michael E. Mayor,  is our Director of Financial  Services.  Before to
joining  us,  from  October  1986  through  June 2004,  Mr.  Mayor was with Mars
Incorporated as a National  Finance Manager,  National Sales Manager,  Specialty
Markets Manager,  and Key Account  Supervisor.  From May 1984 to October 1986 he
was a Sales  Manager for  Procter and Gamble and  PepsiCo.  Mr.  Mayor  earned a
Bachelor  of Arts degree (BA) from Sam  Houston  State  University,  Huntsville,
Texas and a Masters of  Business  Administration  (MBA)  degree from Thomas More
College in Crestview Hills, Kentucky.

Background

      Effective as of December 30, 2003, we acquired all of the capital stock of
Restoration  Group America 2003, Inc., a Texas  corporation ("RGA 2003") and its
wholly-owned  subsidiaries (i) RG Insurance Services,  Inc., a Texas corporation
("RGIS") which is a general insurance agency,  (ii) RG Risk Management,  Inc., a
Texas corporation  ("RGRM") which intends to engage in the business of providing
claims  management  services,  (iii) RG Restoration,  Inc., a Texas  corporation
("RG")  which is engaged  in the  business  of  performing  commercial  property
restoration  services  and  (iv)  Restoration  Group  America,   Inc.,  a  Texas
corporation  which holds the  intellectual  property  rights to  PropertySMARTSM
("RGA"). RGIS, RGRM, RG and RGA are now our indirect wholly-owned subsidiaries.

      The  Independent  Registered  Public  Accounting  Firm's  reports  on  the
financial  statements  for the years ended  December  31, 2003 and  December 31,
2002,  include an emphasis  paragraph in addition to their audit opinion stating
that  recurring  losses  from  operations,  a  working  capital  deficiency  and
accumulated  deficit raise  substantial doubt about the ability of RG America to
continue as a going concern.

      Our principal  executive office is located at 2100 Valley View Lane, Suite
110,  Dallas Texas 75234,  and our telephone  number is (972)  919-4774.  We are
located on the World Wide Web at www.rgamerica.com  where general information is
available about us.  Information  contained on our website does not constitute a
part of this Memorandum.

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<PAGE>

                                  THE OFFERING

Securities:                Secured Convertible Debentures

Amount:                    $1,000,000

Minimum Subscription:      a $25,000 face value Debenture

Coupon Rate:               12%

Conversion Price:          Convertible  into  shares  of  common  stock  of  the
                           Company  at of  60%  of  the  closing  price  of  the
                           Company's common stock, based upon the previous 5-day
                           trading average of the Company's stock.

Maturity Date:             Earlier of either  July 31,  2005 or Closing of up to
                           an additional $3,000,000 of Equity Proceeds.

Collateral:                First lien on the Company's construction receivables,
                           subordinated to an existing lender.

Events of Default:         If any of the  following  events  occur (an 'Event of
                           Default'), the entire unpaid principal amount of, and
                           accrued and unpaid interest on, this Debenture, shall
                           immediately  be due and payable,  and Holder shall be
                           entitled   to  all  legal  and   equitable   remedies
                           available:

                           o  the Company failing to redeem  Debentures when due
                              pursuant to the terms and  conditions  under which
                              the Convertible Debentures are issued or otherwise
                              failing to pay interest,  costs, charges, expenses
                              or other sum  whatsoever  in  accordance  with the
                              terms  and  conditions  of  the  final   Debenture
                              Purchase Agreement; and/or

                           o  any   statement,   representation,   warranty   or
                              confirmation  on the  part  of any of the  Company
                              being found to be materially  incorrect or untrue;
                              and/or

                           o  there  is a  material  change  ("material"  change
                              defined  as  greater  than  a 30%)  in  ownership,
                              management and/or control of the Company; and/or

                           o  the Company's  failure to register the  underlying
                              shares  in  the  Offering,  which  is  more  fully
                              described  under the  section  of this term  sheet
                              entitled Registration.

Event of Default
Consequences:              Upon any  occurrence  of default,  the interest  rate
                           will be increased to a penalty rate of 18% until such
                           time as the event of  default  has been  cured in its
                           entirety,  and the Debenture Holders will be entitled
                           to receive additional  warrants in an amount equal to
                           25% of the original  warrants issued  hereunder,  for
                           each 180 day period the Company remains in default;

Liquidation Preference:    In the  event  of  any  liquidation,  dissolution  or
                           winding  up  of  the  Company,  the  holders  of  the
                           Debentures  shall be entitled to receive  proceeds in
                           preference to the holders of the Common Stock

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<PAGE>

Right of Redemption:       The  Company  shall  have the right to redeem  any or
                           all-outstanding  Convertible  Debentures  in its sole
                           discretion  anytime  after the Closing  Date with (3)
                           three- business days advance  notice.  The redemption
                           price shall be the face amount  redeemed plus accrued
                           interest.

Warrants:                  The   Investor   shall   receive   up  to   1,500,000
                           post-reverse  split  warrants to  purchase  1,500,000
                           shares of Common Stock pro rata based upon percentage
                           of  aggregated   Debentures.   The  warrant  will  be
                           exercisable   on  a  cash   basis   and   will   have
                           "piggy-back"  registration rights and survive for two
                           years from the Closing Date.  Exercise  Price of such
                           warrants shall be equal to 105 percent of the closing
                           price based upon the previous  5-day trading  average
                           of the Company's stock.

Protective Provisions:     For so long as a majority  of the  Debentures  remain
                           outstanding,  consent of the holders of a majority of
                           the then outstanding Debentures shall be required for
                           any action that materially; (i) alters or changes the
                           rights,  preferences or privileges of the Debentures,
                           (ii) increases or decreases the authorized  number of
                           shares of Common or Preferred  Stock,  (iii)  creates
                           (by  reclassification  or otherwise) any new class or
                           series  of  shares  having  rights,   preferences  or
                           privileges  senior to the Debentures,  (iv) amends or
                           waives any  provision  of the  Company's  Articles of
                           Incorporation  or Bylaws in a manner which materially
                           adversely  affects the holders of the Debentures,  or
                           results in the payment or declaration of any dividend
                           on any shares of Common or Preferred Stock.

Registration Rights:       Promptly,  but no later than 60 days from the Closing
                           Date, the Company shall file a registration statement
                           with  the  United   States   Securities   &  Exchange
                           Commission  ("SEC")  and  use its  best  commercially
                           reasonable  efforts to ensure that such  registration
                           statement is declared effective within 120 days.

Information:               The Company  will agree to provide all holders of the
                           outstanding Debentures of Common Stock with copies of
                           the Company's annual and quarterly reports filed with
                           the  Securities and Exchange  Commission  (the "SEC")
                           and all  other  such  documents  and  information  as
                           required by the  Securities  Exchange Act of 1934, as
                           amended (the "Exchange Act").

Investor Suitability
Standards:                 This   Offering   is  made   solely  to   "accredited
                           investors,"  as defined in Rule 501 of  Regulation  D
                           promulgated under the Securities Act.

Use of Proceeds:           Expansion,  working  capital  and  general  corporate
                           purposes. See "Use of Proceeds."

Closing:                   One or more closings with the final closing  expected
                           to  occur  on or  before  January  10,  2005,  unless
                           extended at our sole discretion.

Conditions:                The  Offering  is  subject  to  certain   conditions,
                           including  subscription of the Minimum Offering.  See
                           "Plan of Distribution -- Closing  Conditions;  Escrow
                           Agent."

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<PAGE>

Subscription Agreement:    The purchase of the Debentures  will be made pursuant
                           to a Subscription Agreement and a Registration Rights
                           Agreement which will require, among other provisions,
                           appropriate  representations  and  warranties  of the
                           subscriber  to the Company,  covenants of the Company
                           reflecting  the provisions set forth herein and other
                           typical  covenants  and  appropriate   conditions  of
                           closing,  including  qualification  of the Debentures
                           under   applicable   Blue  Sky  laws.  See  "Plan  of
                           Distribution."

Transfer Restriction:      None of the  Debentures  offered  hereby may be sold,
                           pledged or  otherwise  transferred  from the original
                           purchaser without written consent,  which will not be
                           unreasonably withheld.

Expenses:                  RG  America  will  bear all  reasonable  expenses  in
                           connection with this Offering.

High Risk:                 This Offering involves a high degree of risk, and the
                           Debentures  should not be purchased by investors  who
                           cannot  afford the loss of their  entire  investment.
                           Prospective  investors  are advised to consult  their
                           own  professional  advisors  as to legal,  financial,
                           tax,  accounting  and other  matters  relating to the
                           purchase of Debentures. See "Risk Factors."

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                           FORWARD-LOOKING STATEMENTS

      This Memorandum  includes "forward looking  statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended (the "Securities  Act")
and Section 21E of the  Securities  and  Exchange  Act of 1934,  as amended (the
"Exchange  Act") which can be  identified  by the use of words such as "intend,"
"anticipate,"  "believe,"  "estimate,"  "project,"  "expect"  or  other  similar
statements. These statements discuss future expectations, contain projections of
results   of   operations   or  of   financial   condition,   or   state   other
"forward-looking"   information.   All  statements   other  than  statements  of
historical  information  provided  herein are  forward  looking  and may contain
information  about  financial  results,  economic  conditions,  trends and known
uncertainties.  We caution you that actual results could differ  materially from
those  expected by us,  depending on the outcome of certain  factors,  including
those  factors  discussed  in the  Section  of this  Memorandum  entitled  "Risk
Factors." You are further cautioned not to place undue reliance on these forward
looking  statements,  which speak only as of the date of this Memorandum.  We do
not undertake to update publicly any forward-looking  statements for any reason,
even if new information  becomes  available or other events occur in the future,
including,  without  limitation,  changes in our  business  strategy  or planned
capital  expenditures,  or to reflect the occurrence of unanticipated events. We
believe our  forward-looking  statements are within the safe harbor  provided by
the Exchange Act. When considering these statements, you should keep in mind the
risk factors described below and other cautionary  statements  contained in this
Memorandum.

                                  RISK FACTORS

      You  should  carefully  consider  the  following  risk  factors  and other
information in this  Memorandum  before  deciding to invest in Debentures of our
Common Stock. If any of these risks occur,  our business,  results of operations
and  financial  condition  could be  adversely  affected.  This could  cause the
trading price of our Common Stock to decline,  and you might lose part or all of
your investment.

RISKS RELATED TO THE COMPANY

      We have only recently  begun  operations as a  consolidated  group and are
presently incurring losses.

      We have only operated as a consolidated  group for a short period of time.
We were a development  stage company  through  December 31, 2003. As a result of
the acquisition of RGA 2003 as discussed  above, we are an operating  entity and
are no longer in the development stage effective as of January 1, 2004.

      Our ability to generate revenue is subject to substantial  uncertainty and
risk.  In addition,  we  anticipate  that our  operating  expenses will increase
substantially  in the  foreseeable  future as we  purchase  additional  systems,
equipment,  increase our sales and marketing activities.  Accordingly, we expect
to incur losses at least through the end of fiscal year 2004 and may continue to
incur losses for some time  thereafter.  There can be no assurance  that we will
begin expanded  operations  successfully or on a timely basis or that we will be
able  to  achieve  or  sustaining  operating  profitability.   Our  success  may
ultimately  depend  on  our  management's  ability  to  react  expeditiously  to
exigencies that have not been taken into account in our business plan.

      We have a need for additional financing.

      Substantial   capital  is  required  to  pursue  our  operating  strategy.
Additional  working  capital will be needed to finance the  accounts  receivable
generated  by our  construction  subsidiary  and to hire  additional  sales  and
marketing people as our business grows in states outside of Texas.

      We will need additional  capital to (i) retire our indebtedness,  (ii) for
working  capital  requirements,  and  (iii) to  obtain  additional  systems  and
improvement  to our  facilities,  property  and  equipment  and satisfy  further
capital requirements.  We cannot assure you that we will be able to raise needed
capital from other sources on terms favorable to us, if at all. If we are unable
to obtain sufficient  capital in the future,  our ability to pursue our business
strategy and our results of operations for future periods may be impaired.

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<PAGE>

      Our additional financing requirements could result in dilution to existing
      stockholders.

      If additional  financing is required,  it could be obtained through one or
more transactions which effectively dilute the ownership interests of holders of
our Common Stock.  Further,  there can be no assurances  that we will be able to
secure such  additional  financing.  We have the  authority to issue  additional
Shares of Common  Stock,  as well as  additional  classes or series of ownership
interests or debt  obligations of the Company which may be convertible  into any
class or series of  ownership  interests of the Company.  We are  authorized  to
issue up to  300,000,000  Shares  of  Common  Stock  and  35,000,000  Shares  of
preferred  stock.  Such  securities  may be issued without the approval or other
consent of the holders of our Common Stock.

      Public  adjusting  firms in Texas may not make  referrals  to  restoration
      companies in which they have a financial interest.

      Since  September  1, 2003,  under the  provisions  of S.B.  127, the Texas
legislature  has banned  public  adjusting  firms within the state of Texas from
referring  restoration services contracts to restoration companies in which they
have a financial  interest.  Prior to September 1, 2003,  restoration  companies
such as RG have  historically  derived a large  portion of their  revenues  from
contracts  for  restoration  services  that have been referred to them by public
adjustment  firms that had a financial  interest in the  referral.  Accordingly,
public  adjustment  firms may be less likely to make  referrals  of  restoration
services to companies such as RG because they have no direct financial incentive
to do so.  As a  result,  there is no  assurance  that we will be able to obtain
sufficient revenues from new restoration  services contracts in the future. This
would have a material adverse affect on our financial results.

      Established  competitors with greater  resources may make it difficult for
      us to market our products effectively and offer our products at a profit.

      The property  insurance and insurance  restoration  businesses  are highly
competitive  and  many  of our  competitors  have  substantially  greater  other
resources.  We compete  with both large  national  writers and smaller  regional
companies  including  companies which serve the independent  agency market,  and
companies  which sell insurance  directly to customers.  Some of these companies
may have  certain  competitive  advantages  over us,  including  increased  name
recognition,  loyalty of their customer base,  lower cost  structures and longer
operating histories.  In the past,  competition in the property insurance market
has included offering significant rate discounts,  and there can be no assurance
that these  conditions  will not recur.  Although a number of national  insurers
that are much larger than we are do not  currently  compete in a material way in
the multi-family  property market,  if one or more of these companies decided to
aggressively  enter the market it could have a  material  adverse  effect on us.
These companies include some that would be able to sustain significant losses in
order to acquire market share, as well as others which use distribution  methods
that compete with our distribution  channels.  There can be no assurance that we
will be able to compete effectively against these companies in the future.

      Our future  success will be dependent on our ability to attract and retain
      key personnel.

      Our future success depends  significantly  upon the efforts of certain key
management personnel,  including:  J. E. (Ted) Rea, our Chief Executive Officer;
James Rea, our Chief Operating Officer; Bruce Hall, our CFO; Richard Nelson, our
President; Kevin Dahlberg, our Executive Vice President - Finance; Andy England,
our Chief  Technology  Officer;  Evelyn  Rawls,  our Vice  President - Insurance
Operations; Michael Mayor, our Director of Financial Services; and Chris Willis,
our Senior Vice President and General Counsel RG Insurance  Services.  We intend
to enter into  employment  agreements  with  Messrs.  Rea,  Rea,  Hall,  Nelson,
Dahlberg,  England,  Mayor,  Willis, and Ms. Rawls, as members of our Management
Team.  While our subsidiary RGA does currently have  employment  agreements with
Messrs. Rea, Rea, Nelson, Dahlberg, England, Mayor , Willis and Ms. Rawls, there
is no  assurance  that we will be able to  satisfactorily  negotiate  employment
agreements  between the key members of our management  team and RG America.  The
loss of key personnel  could  adversely  affect our business.  As we continue to
grow,  we will  need to  recruit  and  retain  additional  qualified  management
personnel,  and  there  can be no  assurance  that we will be able to do so.  We
currently do not maintain either key man life insurance on any of our management
or directors and officers insurance for our management.

                                       8
<PAGE>

      The substantial  growth projected by us, if achieved,  must be efficiently
      and effectively managed.

      Our  projected  growth  will  likely  place a  significant  strain  on our
managerial, operational and financial resources. We need to:

      o     improve our financial and management controls, reporting systems and
            procedures;

      o     expand,  train and manage our  workforce  for  marketing,  sales and
            support; and

      o     manage multiple relationships with various customers,  investors and
            third parties.

      Our projections are forward-looking statements and are uncertain.

      This Memorandum contains  "forward-looking  statements" within the meaning
of the Private Securities  Litigation Reform Act of 1995. These  forward-looking
statements  are made  pursuant  to the safe  harbor  provisions  of the  Private
Securities  Litigation  Reform Act of 1995 and include estimates and assumptions
related to economic,  competitive  and legislative  developments.  These include
statements  relating to trends in, or representing  management's  beliefs about,
our  future  strategies,  operations  and  financial  results,  as well as other
statements including words such as "anticipate,"  "believe," "plan," "estimate,"
"expect,"   "intend,"   "may,"   "should"   and   other   similar   expressions.
Forward-looking   statements  are  made  based  upon  our  management's  current
expectations  and beliefs  concerning  trends and future  developments and their
potential effects on the company. They are not guarantees of future performance.
Actual results may differ  materially  from those  suggested by  forward-looking
statements as a result of risks and uncertainties which include, among others:

      o     the availability of primary and reinsurance coverage;

      o     global political conditions and the occurrence of terrorist attacks,
            including nuclear, biological or chemical events;

      o     premium  price  increases  and  profitability  or  growth  estimates
            overall or by lines of  business,  or  geographic  area and  related
            expectations  with  respect to the timing and terms of any  required
            regulatory approvals;

      o     our   expectations   with  respect  to  cash  flow  projections  and
            investment income and with respect to other income;

      o     the effects of disclosures by and investigations of insurance and/or
            construction    companies    relating   to    possible    accounting
            irregularities,  practices  in  the  insurance  industry  and  other
            corporate  governance  issues,  including:  i)  the  effects  on the
            capital  markets and the  markets for  directors  and  officers  and
            errors and omissions  insurance;  ii) claims and litigation  arising
            out of accounting  and other  corporate  governance  disclosures  by
            other  companies;  and iii)  legislative or regulatory  proposals or
            changes,   including   the  changes  in  law   required   under  the
            Sarbanes-Oxley Act of 2002;

      o     general economic conditions including: i) changes in interest rates,
            market credit spreads and the performance of the financial  markets,
            generally;  ii) changes in laws, regulations and taxes; iii) changes
            in competition  and pricing  environments;  and iv) changes in asset
            valuations;

      o     the  occurrence of significant  weather-related  or other natural or
            human-made disasters;

      o     the  inability by our insurance  partners to reinsure  certain risks
            economically;

      o     changes in the litigation environment;

                                       9
<PAGE>

      o     if  our  fronting  insurance  company  or  managing  general  agency
            partners  unreasonably  restrict,  terminate or cease to allow us to
            write new business;

      o     if we fail to attract and retain an adequate  base of  customers  in
            our PropertySMARTSM program;

      o     if we fail to  adequately  perform  our  re-construction/restoration
            duties,  we could be exposed to increased  costs  and/or  litigation
            risks; and o general market conditions.

      We  undertake  no  obligation  to  update or  revise  any  forward-looking
statements, whether as a result of new information, future events or otherwise.

RISKS RELATED TO THE INSURANCE INDUSTRY

      We are  dependent  upon finding and  maintaining  a  relationship  with an
      insurance company or a managing general agency who will write policies for
      our program.

      We do not  own an  insurance  company,  and  therefore  are  dependent  on
companies  within the insurance  industry to issue required  policies.  As such,
price  increases,   changes  in  underwriting  standards,   policy  changes  and
restrictions  or  withdrawals  from  certain  territories  or  the  multi-family
industry,  are  beyond  our  control.  We may not be  able to find an  insurance
company or a managing general agency willing to write policies for our insurance
program.  Furthermore,  if we do find such an insurance company to partner with,
the property and casualty insurance industry  frequently  experiences  prolonged
periods of  profitability,  followed  by periods of  losses.  This  industry  is
subject to large  losses  caused by  natural  catastrophes  such as  hurricanes,
tornados and hail storms.  The frequency and severity of these  catastrophes are
unpredictable,  but tend to occur in certain geographic areas, such as along the
U.S.  Atlantic and Gulf Coasts,  where much of our sales are expected.  Insurers
typically take actions to mitigate the financial  impact of these  industry-wide
underwriting  cycles and  catastrophes  on their net income.  Such actions might
include price increases,  reducing  coverage and restricting or withdrawing from
entire markets.  If our insurance company partner were to cease writing policies
for our  program,  we may not be able to find a  replacement  insurance  partner
which  would  mean  that we will  not be able to  collect  premiums  and  accept
properties  into our  program.  All these  actions  could  adversely  impact our
ability to execute our business plan and meet our financial projections.

      Our  fronting  company  partners'  or managing  general  agency  partners'
      failure to maintain a commercially  acceptable  financial  strength rating
      would significantly and negatively  influence our ability to implement our
      business strategy successfully.

      In order for our insurance product to be acceptable to our targeted market
place,  our fronting  company  partners or managing general agency partners must
maintain a minimum underwriting rating of A- or its equivalent.  There can be no
assurance that our fronting  company  partner's  rating or future changes to our
fronting  company's  rating will not affect our ability to market our  insurance
program.

      Our fronting  company partners or managing general agency partners may not
      be able to successfully alleviate risk through reinsurance arrangements.

      In order to reduce their risk and to increase our  underwriting  capacity,
our  fronting  company  partners or our  managing  general  agency  partners may
purchase  reinsurance.  The availability and the cost of reinsurance  protection
are subject to market conditions, which are outside of our control. As a result,
our fronting company partners or our managing general agency partners may not be
able to successfully alleviate risk through these arrangements. In addition, our
fronting  company  partner is subject to credit risk with respect to reinsurance
because  the  ceding  of risk to  reinsurers  does  not  relieve  them of  their
liability  to  our  policyholders.   A  significant  reinsurer's  insolvency  or
inability to make payments under the terms of a reinsurance  treaty could have a
material adverse effect on their results of operations and financial condition.

                                       10
<PAGE>

      Because our commission revenues are based on premiums set by insurers, any
      decreases in these premium rates could result in revenue decreases for us.

      We are engaged in insurance  agency and  brokerage  activities  and derive
revenues from commissions on the sale of insurance  products to clients that are
paid by the insurance  underwriters  with whom we place our clients'  insurance.
These  commissions  are based on the premiums  that the  insurance  underwriters
charge,  and we do not determine  insurance  premium rates.  In addition,  these
premiums  historically  have been  cyclical in nature and have  displayed a high
degree of volatility  based on the prevailing  economic and competitive  factors
that affect  insurance  underwriters.  These  factors,  which are not within our
control,  include the capacity of insurance  underwriters to place new business,
non-underwriting   profits  of  insurance  underwriters,   consumer  demand  for
insurance products, the availability of comparable products from other insurance
underwriters  at a lower  cost and the  availability  of  alternative  insurance
products, such as government benefits and self-insurance plans, to consumers.

      We cannot  predict the timing or extent of future  changes in premiums and
thus  commissions.  Therefore,  we cannot predict the effect that future premium
rates will have on our  operations.  While increases in premium rates may result
in revenue  increases  for us,  decreases in premium rates may result in revenue
decreases.  These  decreases may adversely  affect our results of operations for
the periods in which they occur.

      Carrier contingent commissions are difficult to predict, and any decreases
      in our collection of them may have an impact on our operating results that
      we are unable to anticipate.

      We  anticipate   deriving  a  portion  of  our  revenues  from  contingent
commissions  based  upon the  terms of the  contractual  relationships  with the
insurance underwriters. Contingent commissions are commissions paid by insurance
underwriters and are based on the estimated profit that the underwriter makes on
the overall volume of business that we place with it.

      Due to the nature of these commissions,  it is difficult for us to predict
their payment.  Increases in loss ratios  experienced by insurance carriers will
result in a decreased  profit to them and may result in decreases in the payment
of contingent commissions to us. Furthermore,  we have no control over insurance
carriers'  ability to estimate loss reserves,  which affects our  profit-sharing
calculation.  In  addition,  tightening  of  underwriting  criteria  by  certain
insurance  underwriters,  due in part to the high loss  ratios,  may result in a
lower  volume  of  business  that we are able to  place  with  them.  Contingent
commissions  affect our revenues,  and decreases in their payment to us may have
an adverse effect on our results of operations.

      We  may  enter  new  markets  and  there  can  be no  assurance  that  our
      diversification strategy will be effective.

      Although we intend to initially  concentrate on our core businesses in the
multi-family  property  industry  in Texas,  Louisiana,  Mississippi,  Oklahoma,
Arkansas,  Arizona,  Colorado,  Kansas, Kentucky,  Missouri, New Mexico, Nevada,
Florida,  Georgia,  North  Carolina,  South  Carolina,   Alabama,  Virginia  and
Tennessee, we also may seek to take advantage of prudent opportunities to expand
our core businesses into other geographic  areas and industry  segments or where
we believe the  opportunity  to apply our business  model to the market place is
strong.  There is no  assurance,  however,  that  this  diversification  will be
successful.

      We are subject to  comprehensive  regulation by state insurance boards and
      commissions.  Therefore,  we may be limited in the way we operate  and our
      ability to earn profits may be restricted by these regulations.

      We are subject to regulation by government agencies in every state that we
conduct insurance related business. These regulations relate to numerous aspects
of our  business and  financial  condition.  Additionally,  we must obtain prior
approval for certain corporate actions.  The primary purpose of this supervision
and  regulation is the  protection of our  insurance  policyholders  and not our
investors.  The extent of regulation  varies, but generally is governed by state
statutes.  These statutes delegate  regulatory,  supervisory and  administrative
authority to state  insurance  departments.  This system of  regulation  covers,
among other things restrictions on the types of terms that we can include in the
insurance policies we offer.

                                       11
<PAGE>

      The regulations of the state insurance  departments may affect the cost or
demand for our products  and may impede us from taking  actions we might wish to
take to increase our  profitability.  Furthermore,  we may be unable to maintain
all required  licenses and  approvals and our business may not fully comply with
the wide variety of applicable laws and regulations or the relevant  authority's
interpretation of the laws and regulations.  Also,  regulatory  authorities have
relatively broad discretion to grant, renew or revoke licenses and approvals. If
we do not have the  requisite  licenses  and  approvals  or do not  comply  with
applicable regulatory  requirements,  the insurance regulatory authorities could
stop or temporarily  suspend us from conducting some or all of our activities or
monetarily penalize us. We must comply with regulations involving:

      o     limitation  of the  right to cancel or  non-renew  policies  in some
            lines;

      o     regulation  of the  right to  withdraw  from  markets  or  terminate
            involvement with agencies; and

      o     licensing of agents.

      The general level of economic  activity can have an impact on our business
      that is difficult to predict; a strong economic period may not necessarily
      result in higher revenues for us.

      The  volume  of  insurance  business  available  to  our  offices  may  be
influenced  by factors such as the health of the overall  economy.  The specific
impact of the health of the economy on our revenues,  however,  can be difficult
to predict.  When the economy is strong,  insurance coverage typically increases
as payrolls, inventories and other insured risks increase. Insurance commissions
to our offices  generally  would be expected to increase.  As  discussed  above,
however,  our  commission  revenues are  dependent on premium  rates  charged by
insurers,  and these  rates  are  subject  to  fluctuation  based on  prevailing
economic and competitive conditions. As a result, the higher commission revenues
that our company  generally  would expect to see in a strong economic period may
not  necessarily  occur,  as any  increase in the volume of  insurance  business
brought about by favorable  economic  conditions  may be offset by premium rates
that have declined in response to increased competitive conditions,  among other
factors.

      We face competitive  pressures in our business that could cause demand for
      our products to fall and adversely affect our profitability.

      We compete with a large number of other companies in our selected lines of
business. We compete, and will continue to compete, with major U.S. and non-U.S.
insurers and other regional  companies,  as well as mutual companies,  specialty
insurance companies,  underwriting  agencies and diversified  financial services
companies.  Many  of  our  competitors  have  greater  financial  and  marketing
resources than we do. Our profitability  could be adversely  affected if we lose
business  to  competitors  offering  similar or better  products at or below our
prices.  In  addition,  a number of new,  proposed or potential  legislative  or
industry  developments could further increase  competition in our industry.  New
competition from these  developments  could cause the demand for our products to
fall, which could adversely affect our profitability.

      A  number  of  new,   proposed  or  potential   legislative   or  industry
developments  could  further  increase   competition  in  our  industry.   These
developments include:

      o     the  formation of new insurers and an influx of new capital into the
            marketplace as existing  companies  attempt to expand their business
            as a result of better pricing and/or terms;

      o     programs  in  which   state-sponsored   entities   provide  property
            insurance in  catastrophe-prone  areas or other  alternative  market
            types of coverage; and

      o     changing practices caused by the Internet, which have led to greater
            competition in the insurance business.

These  developments   could  make  the  property   insurance   marketplace  more
competitive by increasing the supply of insurance capacity.

                                       12
<PAGE>

      If we are  unable to  respond  in a timely  and  cost-effective  manner to
      technological  change in our  industry,  there may be a resulting  adverse
      effect on our business and operating results.

      The insurance  industry is influenced by rapid  technological  change, new
product and service introductions and evolving industry standards.  For example,
the  insurance   brokerage  industry  has  increased  use  of  the  internet  to
communicate  benefits and related  information  to consumers  and to  facilitate
business-to-business  information exchange and transactions. We actively explore
the opportunities that information  technology  affords the insurance  brokerage
industry and, in particular,  the operations of our offices. We believe that our
future   success   will  depend  on  our  ability  to  continue  to   anticipate
technological  changes and to offer additional product and service opportunities
that meet evolving  standards on a timely and  cost-effective  basis. We believe
that  the  development  and  implementation  of new  technologies  will  require
additional  investment  of our  capital  resources  in the  future.  We have not
determined,  however, the amount of resources and the time that this development
and  implementation  may require.  There is a risk that we may not  successfully
identify new product and service  opportunities  or develop and introduce  these
opportunities in a timely and cost-effective manner. In addition,  opportunities
that our  competitors  develop or introduce may render our products and services
noncompetitive.  As a  result,  we can  give no  assurances  that  technological
changes  that may affect  our  industry  in the future  will not have a material
adverse effect on our business and operating results.

RISKS RELATED TO THE OFFERING

      Our management  has broad  discretion  over the use of proceeds  raised in
this Offering.

      Our management  will have broad  discretion over the allocation of the net
proceeds  from the  Offering  as well as over the  timing of their  expenditure.
Particularly,  our  management may use a portion of the proceeds of the Offering
to pay off a portion of our indebtedness. As a result, investors will be relying
upon our  management's  judgment  with  only  limited  information  about  their
specific intentions for the use of the proceeds.

      Federal and State Securities Laws.

      The  Debentures   offered  hereby  have  not  been  registered  under  the
Securities  Act,  or under  the  provisions  of any  state  securities  laws and
therefore may not be resold without registration or an applicable exemption. The
Debentures  are being  offered and will be sold  without  such  registration  by
reason of specific exemptions provided by federal and state securities laws. The
availability of such exemptions  depends,  in part, upon the "investment intent"
of the  investors,  and the  exemptions may not be available if any one investor
purchases Debentures with a view to the redistribution of that instrument.

      We have a limited  market for our  Common  Stock,  and our stock  price is
      volatile.

      The Shares of Common Stock  offered  hereby are not listed on any national
securities exchange or quoted on the Nasdaq National Market or Small Cap Market.
Instead,  our Common Stock is currently  quoted on the Bulletin  Board under the
symbol "RGMA.OB." Trading on the Bulletin Board is sporadic and highly volatile.
The market price of our Common Stock has fluctuated in the past and may continue
to  fluctuate  in the  future.  Although  we plan to apply for a listing  of our
Common  Stock on a  national  securities  exchange  or to have it  quoted on the
Nasdaq  National  Market or Small Cap Market in the future,  no assurance can be
given  that we will be able to list our Common  Stock on a  national  securities
exchange  or have it quoted on the Nasdaq  National  Market or Small Cap Market.
Accordingly,  you may be required to bear the economic  consequences  of holding
these  securities  for  an  indefinite  period  of  time  and  transfers  of the
Debentures  will be  restricted.  Therefore,  you  cannot  expect  to be able to
immediately liquidate such investment readily or at all.

                                       13
<PAGE>

                                 USE OF PROCEEDS

      We will  receive net proceeds  from the sale of the maximum  amount of the
Debentures  offered hereby in the approximate amount of $800,000 after deducting
any selling commissions and other expenses of the Offering.

Sources:

<TABLE>
<CAPTION>

             Total Principal Amount of         Price to     Expenses of the      Net Proceeds to the
                 Debentures Offered           Investors         Offering                Company
             -------------------------        ----------    ----------------     -------------------
             <S>                              <C>           <C>                  <C>
             $               1,000,000        $1,000,000    $        200,000     $           800,000
</TABLE>

Uses:

      We  intend  to use  the  net  proceeds  from  this  Offering  to  continue
implementation of our new business plan and general working capital needs.

      THE  FOREGOING ARE ONLY  ESTIMATES OF THE TYPE AND AMOUNT OF  EXPENDITURES
FOR WHICH THE  PROCEED OF THE  OFFERING  WILL BE USED.  WE RESERVE  THE RIGHT TO
CHANGE THE ACTUAL USE OF THE  PROCEEDS OF THE  OFFERING,  IF WE BELIEVE,  IN OUR
SOLE DISCRETION, OUR BUSINESS OR OUR AFFAIRS SO DICTATE.

                                       14
<PAGE>

                                LEGAL PROCEEDINGS

      We are currently not a party to any pending material legal proceeding.  To
the knowledge of our management,  no federal, state or local governmental agency
is presently  contemplating  any proceeding  against us. To the knowledge of our
management,  (i) none of our directors,  executive  officers or affiliates,  and
(ii) no owner of record or  beneficially of more than 5% of our Common Stock, is
a  party  adverse  to us  or  has  a  material  interest  adverse  to us in  any
proceeding.

                                 DIVIDEND POLICY

      We have never paid any dividends on our Common Stock.  We do not currently
intend to declare or pay  dividends  on our  Common  Stock,  rather we intend to
retain our  earnings,  if any, for the  operation and expansion of our business.
Dividends  are  subject  to the  discretion  of our board of  directors  and are
contingent  on  future  earnings,  if  any,  our  financial  condition,  capital
requirements,  general  business  conditions  and other  factors as our board of
directors deems relevant.

                                 CAPITALIZATION

      We are authorized to issue up to 300,000,000 shares of common stock, $.001
par value per  share,  of which  118,885,605  were  issued  and  outstanding  at
September 30, 2004. We are also  authorized to issue up to 50,000,000  shares of
preferred  stock,  $.001 par value per  share,  of which  none were  issued  and
outstanding  at  September  30, 2004.  Additionally,  we had  27,614,850  shares
subscribed  but not issued at September 30, 2004 and these have been recorded as
Common Stock Subscribed.

      In August 2004,  the  stockholders  of the Company  approved the Company's
2004  Omnibus  Stock Plan for the  issuance  of up to  30,000,000  shares of the
Common Stock.  Additionally,  in August 2004,  the  stockholders  of the Company
approved  a reverse  stock  split of the issued  and  outstanding  shares of the
Company's  common  stock  by a ratio of  between  one-for-two  and  one-for-six,
inclusive,  to be made at the sole  discretion of the Board of Directors  before
December 31, 2004.  The Company can provide no assurance  that the reverse stock
split will be implemented before December 31, 2004.

      In August 2004, we acquired all of the common stock of Practical  Business
Solutions  2000, Inc. ("PBS 2000").  The aggregate  purchase price was $350,000,
which  payment  consisted of one million  (1,000,000)  restricted  shares of our
common stock.  The terms  included (1) an agreement by the  stockholders  of PBS
2000 to escrow  333,333  shares of common stock shares for a period of two years
to satisfy certain potential indemnifiable claims and (2) and an agreement by us
granting  "piggyback"  registration rights. In December 2004, we determined that
an  impairment  of the  business  will  result in a  one-time  write down of the
goodwill of PBS 2000 in the amount of approximately $404,000.  Additionally,  we
estimate  additional  impairment  related expenses of approximately  $120,000 in
2004.

COMMON STOCK SUBSCRIBED

      In April 2004,  in accordance  to the terms of the  Acquisition  Agreement
between RG America and RGA 2003, we issued 80,000,000 shares of our common stock
at the agreed upon $0.019 per share to the  shareholders of RGA 2003 as follows:
60,000,000 shares once our Amended and Restated  Articles of Incorporation  were
declared  effective  and  20,000,000  shares  upon the  satisfaction  of certain
conditions.  As a result of this  issuance,  20,000,000  shares remain  unissued
subject to the satisfaction of certain additional conditions.  In June 30, 2004,
the required  conditions were met and the Company recorded the 20,000,000 shares
as Common Stock Subscribed.

      In June 2004, we concluded a private placement  offering under Rule 506 of
Regulation  D  promulgated  under the  Securities  Act of 1933,  as amended (the
"Act").  In conjunction  with that offering,  we received  $387,501 of proceeds,

                                       15
<PAGE>

representing  3,875,750  shares of our common stock at an average price of $0.10
per share to accredited and  non-accredited  investors.  We issued  1,385,750 of
these shares and at September 30, 2004,  2,490,000 shares had not been issued by
the transfer  agent and we have  recorded the  2,490,000  shares as Common Stock
Subscribed.

COMMON STOCK WARRANTS

      In May  2001,  we  granted a  corporation,  which is a  stockholder  of RG
America,  a warrant to purchase  1,000,000 shares of our common stock at a price
of $1.00 per share in exchange for $100,000  cash. The warrant  exercise  period
was to  commence  upon  the  granting  of free  trading  shares  in an  Arkansas
corporation,  which had filed for federal bankruptcy protection under Chapter 11
of the  federal  bankruptcy  laws.  We were  under  contract  to  purchase  this
corporation  from the  federal  bankruptcy  trustee at the time the  warrant was
issued.  The contract to purchase this corporation was subsequently  terminated.
As a result,  in February  2002,  we amended the warrant  agreement  to grant an
option to purchase  2,000,000  shares of RG's $.001 par value  common stock at a
price of $.50 per share.  The warrants expire February 28, 2005. In May 2004, we
granted a  corporation,  which is a  stockholder  of RG  America,  a warrant  to
purchase  1,000,000  shares of our common stock at a price of $0.10 per share in
exchange  for  previous and ongoing  financial  advisory  services to assist the
Company.  We determined that the fair market value of the services  provided was
$30,000 based upon comparable services in the marketplace and the entire $30,000
has been recorded against additional paid-in-capital. In June 2004, we granted a
corporation,  which is a strategic partner of RG America,  a warrant to purchase
2,000,000  shares of our common stock  through June 2009 at a price of $1.00 per
share in exchange current and ongoing strategic financial services.

                                       16
<PAGE>

                             SELECTED FINANCIAL DATA

      You should  read the  following  selected  financial  data  together  with
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations"  and  the  financial  statements  and  the  notes  thereto  included
elsewhere in this Memorandum.

NET INCOME (LOSS) PER SHARE

Basic net loss per common share (Basic EPS) excludes dilution and is computed by
dividing net loss by the weighted average number of common shares outstanding or
subscribed during the period.  Diluted net loss per share (Diluted EPS) reflects
the potential  dilution that could occur if stock options or other  contracts to
issue common stock,  such as warrants or  convertible  notes,  were exercised or
converted  into common  stock.  At  September  30, 2004 and 2003,  there were no
common stock equivalents outstanding that were dilutive.

<TABLE>
<CAPTION>

                                                        Nine Months Ended         Three Months Ended
                                                          September 30,               September 30,
                                                   ------------------------  --------------------------
                                                      2004          2003         2004           2003
                                                   -----------   ----------  -----------     ----------
<S>                                                <C>           <C>         <C>             <C>
Net income (loss), as reported (numerator)         $(2,185,103)  $  (19,360) $  (773,604)    $  101,215
                                                   ===========   ==========  ===========     ==========
   Weighted average number of common
    shares outstanding (denominator)                92,678,730   11,489,990  140,149,118     11,489,990
                                                   -----------   ----------  -----------     ----------
   Net income (loss) per share                     $      (.02)  $     (.00) $       .01     $      .01
                                                   ===========   ==========  ===========     ==========
</TABLE>

                                                   17
<PAGE>

                        RG AMERICA, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                   (Unaudited)

                                     ASSETS
                                                                   September 30,
                                                                        2004
                                                                   -------------
Current assets:
    Cash and cash equivalents                                      $          --
    Contracts receivable, net of allowance for doubtful
         accounts of $74,757                                             701,472
    Unbilled revenue                                                      59,765
    Prepaid expenses                                                       7,530
    Other receivables                                                     95,259
    Notes receivable - related party                                      28,485
    Notes receivable                                                     268,900
                                                                   -------------
    Total current assets                                               1,161,411
    Property and equipment, net of
         accumulated depreciation of $77,797                             329,253
    Goodwill - net                                                       401,033
                                                                   -------------
    Total assets                                                      $1,891,697
                                                                   =============

                    LIABILITIES AND STOCKHOLDERS' DEFICIENCY

LIABILITIES
                                                                   September 30,
                                                                        2004
                                                                   -------------
Current liabilities:
Bank overdraft                                                     $       8,030
Accounts payable, trade                                                1,334,309
Accrued expenses                                                         489,360
Withholding taxes payable                                                220,518
Deferred revenue                                                         495,346
Bank line of credit                                                      270,000
Notes payable - related party                                             63,254
Notes payable                                                            300,455
                                                                   -------------
Total current liabilities                                              3,181,272
                                                                   -------------
Long-term debt - related party                                             8,355
                                                                   -------------
Total liabilities                                                  $   3,189,627

Commitments and contingencies                                                 --

                                       18
<PAGE>

STOCKHOLDERS' DEFICIENCY
Stockholders' deficiency
Preferred stock, $.001 par value, 35,000,000
shares authorized, none issued and outstanding                               --
Common stock, $.001 par value, 300,000,000
shares authorized, 118,885,605 issued and
outstanding                                                             118,886
Common stock subscribed, 27,614,850 shares                               27,615
Additional paid in capital                                            5,279,772
Common stock warrants                                                   130,000
Accumulated deficit                                                  (6,854,203)
                                                                    -----------
Total stockholders' deficiency                                       (1,297,930)
                                                                    -----------
Total liabilities and stockholders' deficiency                      $ 1,891,697
                                                                    -----------

OUR REVENUES AND EXPENSES

      As a provider of risk  management  services to the commercial  real estate
industry,  we generate  revenues  through the  operation of a general  insurance
agency,  providing claims management services and performing commercial property
restoration  services These  revenues are made up of insurance  premiums that we
receive for placing  policies,  fees received from providing claims  management,
inspection and underwriting  services,  as well as payments for restoration work
on multi-family  properties  (primarily apartment buildings) which have suffered
an insured loss such as a fire, flood or hail damage.

      Our expenses largely consist of:

      o     salaries and benefits paid to employees;

      o     construction materials; and

      o     occupancy and equipment costs.

Insurance  losses occur at various  times  during the year such as fire,  flood,
hail,  hurricanes and tornadoes.  As a result, we do not experience  seasonality
issues with respect to revenues from operations.

PLAN OF OPERATION

      We provide a broad array of fee-based  services that address clients' risk
management needs. It is the intent of our management to create a risk management
business which is highly diversified in the following ways:

      o     Services.  We  currently  offer  various  risk  management  services
            including  placing  insurance  products,  offering  risk  mitigation
            services and  strategies  to minimize  business  interruption  costs
            through  our  PropertySMARTSM  program,  adjusting  loss  claims and
            performing property restoration services.

                                       19
<PAGE>

      o     Geography. We are currently based in Texas and do business in Texas,
            Mississippi, Alabama, Pennsylvania and Colorado and intend to expand
            our  marketing  territory to the  contiguous 48 states of the United
            States.

      o     Channels of Distribution.  Our internal sales people place insurance
            coverage,  sell our PropertySMARTSM risk management program and sell
            property  restoration  services.  We  also  receive  referrals  from
            independent  adjusting firms for property restoration  services.  We
            intend to expand  this by further  marketing  to these  firms and to
            demonstrate  to  insurance   carriers  our  anticipated  lower  loss
            experience  for  property  owners  enrolled  in our  PropertySMARTSM
            program.  We believe this will likely result in our ability to place
            insurance  products with our clients at a lower premium cost to them
            in  the  future  thus  generating  additional  commissions  for  our
            insurance  agency and  greater  fee  income for our risk  mitigation
            services business. This will in turn drive additional revenue to our
            property   restoration   division  from   contracts  from  our  risk
            mitigation services clients.

      Our   acquisition  of  Restoration   Group  America  2003,  Inc.  and  its
wholly-owned subsidiaries RGIS, RGRM and RG in December, 2003, was the beginning
of the  implementation of this business plan. We will concentrate in the next 12
months on increasing sales and marketing efforts for our risk management service
offerings.

LIQUIDITY AND CAPITAL RESOURCES

      Upon  completion of the  Offering,  we will still have a critical need for
additional  working  capital  in the next 12  months  to  execute  our  business
strategy.  We  anticipate  using the net  proceeds of the  Offering  for general
working capital. We will need additional capital (i) to retire our indebtedness,
(ii) for working capital purposes,  (iii) expand sales and marketing  activities
and (iv) obtain additional systems and improvements to our facilities, property,
equipment and satisfy further capital expense requirements.

      In the  event  that we are  unable  to  obtain  additional  capital  after
completion of the Offering,  this will likely have a material  adverse effect on
our  operations  and may force us to cease  operating  entirely.  Our  long-term
capital  requirements  beyond  this 12 month  period  (assuming  we have  raised
sufficient capital during the next 12 months to allow us to maintain operations)
will depend on numerous factors, including:

      o     The rate of market acceptance for our services;

      o     The ability to expand our client base; and

      o     The level of expenditures for sales and marketing and other factors.

      To the  extent  that the funds from this  Offering  and our  revenues  are
insufficient  to fund our  activities in the short or long term, we will need to
raise additional funds by incurring debt or through public or private  offerings
of our securities.

                                       20
<PAGE>

                                    BUSINESS

INTRODUCTION

      We provide a broad array of fee-based  services that address clients' risk
management  needs for their real estate  assets.  We do this by dealing with all
procedures  and costs  associated  with the risk of a possible loss such as loss
control activities and purchasing  traditional  insurance products. We also deal
with the  consequences  of a loss after it has  occurred  by  adjusting  claims,
restoring  property and  minimizing  business  interruption  costs.  We have two
direct,  wholly-owned,  non-operating  subsidiaries,  Restoration  Group America
2003, Inc. and Invvision Funding,  Inc., three indirect,  wholly-owned,  primary
operating  subsidiaries,  (i) RG Insurance Services, Inc. ("RGIS"), (ii) RG Risk
Management, Inc. ("RGRM"), (iii) RG Restoration, Inc. ("RG"), Practical Building
Solutions 2000, Inc. ("PBS 2000") and one indirect, wholly-owned,  non-operating
subsidiary, Restoration Group America, Inc. ("RGA").

RG Insurance Services, Inc.

      RGIS, a Texas corporation, was organized in September 2003 to operate as a
general insurance agency. It is licensed as a Texas Property & Casualty and Life
& Health agency.  During the year ended  December 31, 2003,  RGIS received gross
commissions  of nearly  $140,000  earned on  approximately  $3,000,000 of annual
premiums. In addition to pursuing traditional  commercial agency business,  RGIS
will  serve  as the  retail  agent  for our  PropertySMARTSM  insurance  program
described  in the  PropertySMARTSM  Risk  Management  Program  section  of  this
Memorandum.  Texas, like most states,  requires  insurance agents to collect and
remit  certain  fees and taxes on insurance  policies  written on an "excess and
surplus  lines"  basis.  Since these  policies  are not subject to rate and form
regulation,  states impose additional  licensing  requirements on agents writing
such business.  Accordingly, RGIS is currently completing licensing requirements
for its Texas surplus lines license.  RGIS hopes to obtain necessary licenses in
all of the states where we do business by the end of 2004.

RG Risk Management, Inc.

      RGRM, a Texas corporation,  was also organized in 2003 and operates as our
risk management division providing claims management,  third-party  inspections,
adjusting and underwriting services.  These services will be provided in support
of PropertySMARTSM,  as well as on a fee basis to other customers.  We intend to
be a valuable  asset to the  customers  of RGIS by aiding them in  reducing  the
frequency and severity of losses through the implementation of our comprehensive
loss control program.

RG Restoration, Inc.

      RG is a Texas corporation  organized in 2003. It performs restoration work
on multi-family  properties  (primarily apartment buildings) which have suffered
an  insured  loss  such as a fire,  flood  or hail  damage.  RG may  also act as
construction  managers  on  selected  restoration  or  construction  projects in
conjunction with the PropertySMARTSM program

Restoration Group America, Inc.

      RGA currently employs some members of our management team and currently it
holds the intellectual property rights to PropertySMARTSM.

Practical Building Solutions 2000, Inc.

      PBS 2000 is a Texas  corporation  organized in 1999. It is a specialist in
the design and coordination of multi-family and commercial Mechanical Electrical
and Plumbing (MEP) engineering.

                                       21
<PAGE>

Corporate Mission

      Our  corporate  mission is to provide a broad array of fee based  services
that address  clients' risk management  needs.  Therefore,  a definition of risk
management  largely defines the products and services we provide.  A traditional
definition of risk management includes the following four steps:

      o     Risk identification and quantification;

      o     Determination  of  optimum  risk  management   solutions   including
            avoidance, reduction, transfer and retention;

      o     Implementing  and financing of the risk  management  program;  and o
            Monitoring the effectiveness of the risk management program.

Risk management  includes all procedures and costs associated with the risk of a
possible  loss,  such as loss  control  activities  and  purchasing  traditional
insurance  products.  It also includes  dealing with the  consequences of a loss
after  it has  occurred,  such as  adjusting  claims,  restoring  property,  and
minimizing business interruption costs. As explained in more detail elsewhere in
this Memorandum, we offer substantially all of these services.

      Risk management services are traditionally provided by insurance companies
who actually retained a substantial portion of the associated underwriting risk.
We do not assume  underwriting risk. To do so would greatly increase  enterprise
risk and require  significantly  more capital,  the return on which is presently
unlikely to justify its  deployment.  We  consider  the ability to generate  fee
income from risk management  services without  incurring  certain business risks
typically associated with underwriting  (insurance cycles,  adverse loss reserve
development, regulatory issues, etc.) to be a significant strategic advantage of
our  business  plan.  From a corporate  perspective,  the role of our  insurance
programs is to generate  commission and service  revenue from  alternative  risk
financing  and through  access to  traditional  retail and  wholesale  insurance
markets.

      To minimize possible errors and omissions  exposure to us (and credit risk
to its reinsurance partners),  we will only accept insurance "paper" or policies
from well  capitalized  fronting  carriers  with an A- or better rating from the
major insurance rating agencies (i.e., AM Best).

Our Strategy

      We offer three main types of services:

      o     PropertySMARTSM, a full-service risk management program designed for
            the multi-family housing industry;

      o     a general lines insurance  agency  specializing in placing  business
            related insurance for a variety of customers; and

      o     an insurance restoration division.

      Our  PropertySMARTSM  program and insurance  agency are  outgrowths of the
restoration  business  conducted  by our  subsidiary  RG.  They  were  formed to
capitalize  on our historic  roots within the risk  management  industry and the
affinity group of customers that we have developed  through superior service and
customer  value  generation.  We believe  synergies  can be  realized  by direct
marketing a full  spectrum of risk  management  products  and services in a less
competitive,  more loyal  environment.  This strategy also creates a diversified
stream of recurring revenue that is far less cyclical in nature than traditional
risk  management or  construction  income.  Therefore,  although each unit has a
unique marketing strategy and product  portfolio,  marketing efforts are closely
coordinated and complementary, and share certain key elements.

      For example, each of our subsidiaries claims Texas as its home and largest
state.  They also share a primary  marketing  territory in the Gulf and Southern
Atlantic Coast states through Virginia, as well as Arkansas,  Arizona, Colorado,
Kansas, Kentucky,  Missouri, New Mexico, Nevada, Oklahoma, and Tennessee.  These
nineteen states comprise 40% (113 million) of the U.S. population. Additionally,
according to the U.S.  Census  Bureau,  they include 38% of all  renter-occupied
housing units,  including 5 million housing units (34% of the national total) in
structures  with 10 or more units.  At $560 per month,  the median gross rent is
$42 less than the national  average,  putting property owners and managers under

                                       22
<PAGE>

additional pressure to control insurance and other operating costs. According to
the U.S.  Census Bureau,  the median  household  income in our target markets is
5.7% higher than the national average.  Demographics aside,  coastal winds, hail
and  tornado  losses  have  caused  traditional  insurers to withdraw or curtail
business  while  simultaneously   raising  premiums  in  recent  years,  thereby
encouraging self-insurance and spawning residual market vehicles.  Additionally,
these states are largely non-union, and are generally recognized as having above
average insurance regulatory climates.

      An important  component of any corporate  marketing  strategy is selecting
the basis of  competition.  We can choose to compete  on price,  service  and/or
products.  By being the  low-cost  volume  provider  in a  particular  industry,
customers  who care  mainly  about  getting the lowest  price will take  notice.
Competing  on product  can mean  offering  the widest  selection  or the highest
quality  product  lines.  Many  companies can compete on any one or two of these
bases, but cannot deliver all three. We believe it is, for example, inconsistent
to offer superior service and premium products at a discount price. Our business
units provide on superior service and, to varying degrees, lower prices.

Our History

      From our incorporation in May 1998 until July 2000, we were known as Asset
Servicing   Corporation   ("ASC").   We  were  originally  in  the  business  of
originating,  underwriting,  documenting, closing, funding, and servicing leases
for manufacturing and transportation equipment for businesses.

      On July 10, 2000, we merged with  ParkPass.com,  Inc. and changed our name
to Omni  ParkPass,  Inc.  ("OPPI").  We then entered the business of  designing,
developing  and  integrating  software  systems  in the live  entertainment  and
amusement park industries.  These efforts were discontinued in March 2001 due to
the high entry costs to the users.

      On April 28, 2001, we acquired all of the outstanding  shares of Invvision
Capital,  Inc., a Texas  corporation and changed our name to Invvision  Capital,
Inc. We became a commercial and industrial real estate and business  development
company.  At the time,  we also had a mortgage  banking  business  as a separate
business   unit.   Our   business   strategy   provided   for   us   to   pursue
vertically-integrated  projects  including  the  acquisition,   development  and
operation of retail food outlets, fuel outlets and power generation  facilities.
We  implemented  this  strategy  by  focusing  on  the  development  of  venture
relationships  with  Native  American  Indian  tribes  recognized  by  the  U.S.
Government.

      In April 2002 we discontinued  our mortgage banking business and sold some
of its assets to the CFO of our  mortgage  banking  subsidiary  due to  mounting
regulatory and financial  pressures.  In June 2002, we sold our mortgage banking
subsidiary, Invvision Mortgage, Inc., in its entirety to its President.

      In August  2002 we also sold our real estate  development  business to the
president  of the  subsidiary,  retaining a net  profits  interest in several of
their business  opportunities.  In August 2002, we  discontinued  our efforts to
establish  retail  outlets  due  to  capital  resource   shortages  as  well  as
difficulties  in  negotiating  with various  Native  American  Indian  tribes to
establish these types of development projects.

      From August 2002 through November 2003, we were an inactive  publicly-held
corporation pursuing a business combination with a privately-held company in the
commercial and industrial real estate business.

      Effective as of December 30, 2003, we acquired all of the capital stock of
Restoration  Group America 2003, Inc., a Texas  corporation ("RGA 2003") and its
wholly-owned  subsidiaries (i) RG Insurance Services,  Inc., a Texas corporation
("RGIS") which is a general insurance agency and (ii) RG Risk Management,  Inc.,
a Texas  corporation  ("RGRM")  which is engaged in the  business  of  providing
claims  management  services,  (iii) RG Restoration,  Inc., a Texas  corporation
("RG") which intends to engage in the business of performing commercial property
restoration  services  and  (iv)  Restoration  Group  America,   Inc.,  a  Texas
corporation   ("RGA")   which  holds  the   intellectual   property   rights  to
PropertySMARTSM.  RGIS,  RGRM,  RG and RGA are  now  our  indirect  wholly-owned
subsidiaries.

      In August 2004, we acquired all of the common stock of Practical  Business
Solutions  2000, Inc. ("PBS 2000").  The aggregate  purchase price was $350,000,
which  payment  consisted of one million  (1,000,000)  restricted  shares of our

                                       23
<PAGE>

common stock.  The terms  included (1) an agreement by the  stockholders  of PBS
2000 to escrow  333,333  shares of common stock shares for a period of two years
to satisfy certain potential indemnifiable claims and (2) and an agreement by us
granting  "piggyback"  registration rights. In December 2004, we determined that
an  impairment  of the  business  will  result in a  one-time  write down of the
goodwill of PBS 2000 in the amount of approximately $404,000.  Additionally,  we
estimate  additional  impairment  related expenses of approximately  $120,000 in
2004.

Services and Products

PropertySMARTSM

      We are developing a property risk management program to address these risk
management  needs in the  multi-family  housing  industry.  The program  will be
marketed under the acronym  PropertySMARTSM,  or Property  Strategically Managed
Alternative  Risk Transfer.  One of the basic goals is to align the interests of
insurance  companies and owners,  thereby providing adequate coverage and prompt
claim  settlements  for  reasonable   premiums.   PropertySMARTSM  will  include
extensive loss control efforts and comprehensive underwriting.

      We will receive  fee-based  income for all services  provided  through the
PropertySMARTSM  program,  except  restoration work, for which we will receive a
fixed percentage over actual  construction  costs.  Program revenues will likely
contain  an  element  of  incentive  based  commissions,   wherein  RGA's  total
compensation  will be partially a function of the program's risk  management and
loss   reduction   products.   Since  it  is  a  primary   goal  to  manage  the
PropertySMARTSM  program to as low a loss level as possible, we believe that our
resulting loss of  construction  revenue (with less losses  occurring  under the
program) will be partially offset by increased commission income, thus producing
a more predictable stream of recurring revenues for the entire organization.

      Initially, PropertySMARTSM will be directly marketed to existing customers
of RG. These  property  owners and managers  control  several  hundred  thousand
units, however, not all of these will meet program underwriting standards. Other
sources of potential  customers are forecast to be national,  regional and local
apartment  associations  who will be made aware of the program by  exhibiting at
their trade shows and advertising in their trade  publications.  PropertySMARTSM
will also have the ability to accept  insurance  applications  from  traditional
retail  agents,  but  expects to do so only on a limited  basis,  most likely in
situations where strong existing customer/agent relationships exist.

      Superior service for the  PropertySMARTSM  program will include a level of
underwriting,  loss control and claim  restoration  services that we believe are
unmatched  currently in the multi-family  housing segment of the risk management
industry.

Insurance Coverage

      Through our subsidiary  RGIS, we operate a general lines insurance  agency
specializing in placing  business-related  insurance for a variety of customers.
RGIS is able to handle the insurance  placement needs for virtually all lines of
insurance   including  general  liability,   workers   compensation,   property,
commercial automobile,  umbrella, directors and officers liability (D&O), errors
and omissions (E&O),  employment practices liability (EPLI), surety bonds, group
health,  life and disability  insurance.  RGIS places this coverage through many
major  insurance  companies  including  Zurich,  Travelers,  Hartford  and  AIG.
Additionally,  we offer clients a complete portfolio of investment products such
as mutual funds,  variable  annuities,  retirement  programs,  and  Professional
Employment Organization (PEO) programs through several key strategic alliances.

      Like our other business units,  RGIS stresses  customer service and value.
It simply requires developing,  maintaining and communicating a sense of urgency
in addressing  all aspects of clients risk  management  needs,  from the initial
sales call through the actual claims settlement. It also requires doing business
with insurance  company partners who share our sense of urgency and service.  In
an industry where mediocre  customer service is often accepted as the norm, RGIS
follows an approach to business that has resulted in a customer retention record
that is almost  unheard of. RGIS's  President is Ms.  Evelyn  Rawls,  a seasoned
insurance  industry veteran who brought with her an established book of business
with  approximately  $3,000,000 of annual  premiums.  Although Ms. Rawls will be
resigning her full time  employment  with RGIS effective  December 31, 2004, she
has agreed to continue as a consultant until December 31, 2005. RGIS will retain
her book of business and associated commissions.

                                       24
<PAGE>

      RGIS is  targeting  several  distinct  customer  groups  in its  marketing
efforts.  The first is growing the existing book of business  referred to above.
It has two major  concentrations  outside  of  habitational  insurance,  medical
malpractice business for physicians'  management groups and the food service and
restaurant  industries.  Customers  include  state-wide  franchises  of  several
national restaurant chains and a national food processing company. We believe an
additional  area for revenue  growth is  enticing  established  insurance  agent
producers  to transfer  their  existing  customer  lists to RGIS in exchange for
receiving a more favorable  commission sharing arrangement than agents typically
receive.  RGIS is  aggressively  pursuing  such  opportunities  for growth,  and
expects to successfully execute this plan.

      In  addition  to  providing   property   insurance  (in  conjunction  with
PropertySMARTSM  ), we offer  multi-line  agency services for apartment  owners'
other insurance needs including workers  compensation,  employee benefits,  auto
and general  liability  policies.  The  combination of these  ancillary lines of
insurance usually costs the property owners  additionally,  about as much as 50%
of the actual the property insurance. As previously mentioned, not all apartment
complexes in our existing customer base meet program underwriting standards. For
these properties,  RGIS will offer traditional  insurance  placement,  including
placing property coverage through other markets.

Insurance Restoration Services

      The insurance  restoration business is a highly competitive and fragmented
industry. This is due to high profit margins, coupled with low economic barriers
to entry. While gross profit margins on residential construction might be in the
10% to 15% range,  restoration  contractors typically enjoy margins in excess of
25%.  Although timely  receivable  collections  can be problematic,  restoration
contractors experience minimal credit risk since their bills are usually paid by
insurance  companies,  a significant  advantage  over  residential  contractors.
Finally,  the  insurance  restoration  industry is largely  recession  proof and
non-cyclical. Hurricanes, tornadoes, hail storms, floods and fires, along with a
host of other  natural and  man-made  perils,  combine to generate a  year-round
stream of potential customers without regard for the state of the economy.

      There are  generally  two  parts to the  insurance  restoration  industry,
remediation (or mitigation) and reconstruction. As the name implies, remediation
means stopping or reducing  further  losses.  It includes such services as water
extraction  and  smoke  removal,  and  is  often  limited  to  working  with  an
apartment's  interiors and  contents.  The  reconstruction  side of the business
involves demolition and replacement of damaged structural components. Currently,
the  majority  of  our  revenues  are  derived  from  reconstruction.   RG,  our
restoration and construction subsidiary, encounters significant competition from
local,  regional and nationally  franchised  companies on both  remediation  and
reconstruction  contracts.  The later two companies are national franchises.  In
this relationship driven business, some competitors focus on insurance companies
(sometimes as preferred vendors) as their client, while others such as RG places
its focus on property owners and managers, who are the policyholders.

      Since  the  insurance   restoration  industry  is  a  relationship  driven
business,  we have  consistently  followed  a  marketing  approach  of  building
relationships  with  policyholders  and/or public  adjusters  hired to represent
policyholders'  interests in settling losses.  Securing  contracts on losses not
involving  existing  relationships  often  involves  "chasing  fire  trucks"  or
following storms.  Our technology  includes digital pagers that notify our sales
force of every dispatched  fire/emergency truck in their marketing territory. We
have parlayed these one-on-one efforts into a portfolio of satisfied clients who
currently own or manage several hundred thousand apartment units.  Although RG's
primary   source  of  future   business  is  expected  to  come  from  servicing
PropertySMARTSM  customer  losses,  it  fully  intends  to  continue  to  pursue
non-program  related business through historic  marketing  channels and efforts.
Although such business is inherently less predictable and more costly to obtain,
its profit margins are extremely lucrative because they are "whatever the market
will  bear"  rather  than  limited by prior  agreement  with  insurance  company
partners.  Additionally,  we will  continue  to offer  restoration  services  to
existing customers whose apartment  complexes are not part of or fail to qualify
for insurance incorporating PropertySMARTSM .

      Our insurance restoration  subsidiary,  RG, has traditionally targeted the
multi-family  housing industry.  RG does not actively pursue contracts involving
total  losses,  but  concentrates  on those  where the  restoration  of  damaged
structures is possible.

                                       25
<PAGE>

SALES AND MARKETING

      Our insurance agency subsidiary,  RGIS, is enjoying strong growth based on
the high level of service it offers as well as the  extensive  experience of the
management.  We will continue to build upon these strengths. We intend to remain
a full  lines  agency  but focus on the  restaurant,  medical  and  habitational
markets.  We will continue to employ  traditional  selling techniques as well as
enjoy  strong  referral  business  by  using  our  broad  ranging  contacts  and
exceptional  reputation.  The agency  will  increase  its  manpower,  attracting
successful agents with existing books of business.  Strategic  partnerships with
specialty  insurance  professionals  are being pursued  because it believed they
will assist us in adding product offering and offering competitive solutions.

      We believe  that  insurance  is one of the  largest  and  fastest  growing
expenses of all real estate operations, such as apartment complexes, behind only
debt service costs and  (occasionally)  property taxes.  This financial  squeeze
sets a  pre-existing  interest in any solution that can deliver  stable to lower
premiums with manageable deductibles.

      RG continues to follow traditional methods for obtaining restoration work.
We compete for  restoration  contracts  at loss  locations.  We use a variety of
techniques to determine where there are losses from fire,  wind,  storm etc. and
to position  ourselves to be in contact  with the  decision  maker on each loss.
Because  of RG's  expertise  in  construction  we have been  approached  and are
evaluating  build-to-suit  industrial  and  commercial  projects.  Some  of  our
subsidiaries  are members of several trade and industry  groups which provide us
excellent  contacts for sales calls.  Each  subsidiary  promotes and markets the
services  and  programs  of  the  other  operating   subsidiaries.   This  cross
pollination  can be both  informal as well as within a defined  program  such as
PropertySMARTSM. Further, we have and will continue to use expert consultants to
assist us in  targeting,  contacting  and  marketing  to those  sectors  we have
identified for concentration.

      The  PropertySMARTSM  program will be a major on-going  branding effort of
ours as well as promoting  all the RG America  family of companies  under the RG
America  designation.  We have chosen to do what is often  called  "rifle  shot"
marketing  and  advertising  techniques  rather than broad based  efforts to our
defined  audience  due to its cost  effectiveness.  We have  applied to register
PropertySMARTSM  as a service mark with the United  States  Patent and Trademark
Office and believe it will be granted.

COMPETITION

      We do not  believe  that we  have  any  competitors  with  respect  to the
aggregate  suite of  services we offer,  and  particularly  with  respect to our
PropertySMARTSM program.

      However,  our insurance  agency and our restoration  construction  company
both operate in very large industries, each with substantial competition.

      In  Texas,  there  are  approximately   5,400  separate  insurance  agency
entities,  employing  80,000 insurance  agents.  Of these,  approximately  2,500
insurance agencies provide commercial  insurance services.  For 2002,  insurance
agencies  licensed to do business in Texas collected $2.5 billion in commissions
from their insurance company partners. RGIS focuses on commission-based property
and  casualty  insurance  placements,  as well as providing  Life,  Accident and
Health insurance for selected  businesses.  RGIS seeks to maintain a competitive
advantage  over  the  other  agencies  discussed  above,  with its  service  and
promoting the PropertySMARTSM program.

      Our restoration  construction  company operates in a multi-billion  dollar
per year  industry  where  there  are low  barriers  to entry  and  little to no
regulation.   Consequently   the  industry  is  fragmented   with  thousands  of
restoration  contractors  ranging  in size  from  international  giants  to solo
handymen working from the back of a pickup truck. However,  despite the industry
confusion  and  competition,  we seek to maintain a competitive  advantage  over
other restoration companies with our PropertySMARTSM program.

                                       26
<PAGE>

OPERATIONS

      Our operations are  headquartered  in Dallas,  Texas.  We currently do not
maintain any other permanent office  locations.  From time to time, we establish
and maintain temporary on-site construction offices at job-sites for RG.

FACILITIES

      Our principal  executive and administrative  offices are presently located
at 2100 Valley View Lane,  Suite 100,  Dallas,  Texas 75234. We currently lease,
from an unrelated  third party,  8,647 square feet of office space on a month to
month  basis for  $12,971.00  per month or $18.00 per square  foot.  We consider
these  facilities to be suitable and adequate for our needs for the  foreseeable
future.  Additional  space is  available  for lease in our building if we should
need it in the future.  In the opinion of our  management,  our  properties  are
adequately covered by insurance.

EMPLOYEES

Labor Relations

      None of our employees are represented by a labor union. We believe we have
and will continue to have a good  relationship  with our  employees.  Management
meets with employees  periodically  to discuss our  objectives,  as well as more
specific labor issues, such as scheduling,  compensation and work rules. Much of
the labor on our construction and restoration crews are independent  contractors
hired on a job-by-job basis.

LITIGATION

      We are currently not a party to any pending material legal proceeding.  To
the knowledge of our management,  no federal, state or local governmental agency
is presently  contemplating  any proceeding  against us. To the knowledge of our
management,  (i) none of our directors,  executive  officers or affiliates,  and
(ii) no owner of record of  beneficially of more than 5% of our Common Stock, is
a  party  adverse  to us  or  has  a  material  interest  adverse  to us in  any
proceeding.

GOVERNMENT REGULATIONS

      RG  Insurance  Services,  Inc. is  regulated  by the Texas  Department  of
Insurance  (TDI).  Among other  regulations and  requirements,  TDI requires the
following from our agency:

      o     Errors & Omissions insurance in the amount of at least $1,000,000;

      o     At least  one of RGIS'  officers  and  voting  shareholders  must be
            licensed individually as insurance agents by TDI; and

      o     All RGIS employees  producing new business or consulting  clients on
            insurance  purchasing or premium issues must hold an insurance agent
            license.

      Our other  subsidiaries  are  subject to various  state and local laws and
regulations regarding construction activities and building codes.

                                       27
<PAGE>

                                   MANAGEMENT

      The following table sets forth certain information  concerning each of our
directors  and  executive  officers  as well as certain  key  executives  of our
subsidiaries as of the date of this Memorandum:

Name                        Age  Position with the Company
-------------------------   ---  -----------------------------------------------
John E. Rea                 39   Chief Executive Officer and Director

James A. Rea                36   Chief Operating Officer and Director

Robert A. England           42   Chief Technology Officer

Richard S. Nelson           56   President

Kevin L. Dahlberg           41   Executive Vice President - Finance

Evelyn M. Rawls             43   Vice President - Insurance Operations and
                                 President, RG Insurance Services, Inc.

Bruce A. Hall               48   Chief Financial Officer

Michael E. Mayor            42   Director of Financial Services

Christopher S. Willis       34   Senior Vice President & General Counsel -
                                 RG Insurance Services, Inc.

Edward P. Rea               64   Chairman of the Board of Directors and Director

Paul S. Johnson(1),(2)      70   Director

Michael A. Jenkins(1),(2)   62   Director

J. Kenneth Dunn             45   Director

Ralph Hunter                66   Director

----------
(1)   Audit Committee member.
(2)   Compensation Committee member.

                                       28
<PAGE>

John E. (Ted) Rea, Chief Executive Officer and Director

      Mr. Rea was named as our Chief Executive  Officer in December 2003. He was
previously  our President and has been a member of our Board of Directors  since
April 2001. Mr. Rea previously served as President of The Crafter's Marketplace,
Ltd. in Canada beginning in 1998. He attended Southern Methodist University from
1983 to 1985. Mr. Rea is the brother of our President,  Chief Operating  Officer
and Director, Mr. James A. Rea, and the son of our Chairman, Mr. Edward P. Rea.

James A. Rea, Chief Operating Officer and Director

      Mr. Rea has been our past  President  and Chief  Operating  Officer  since
December 2003 and has been a Director of the Company since March 2004.  Prior to
joining us, he was  President  and Chief  Operating  Officer of The  Restoration
Group,  Inc.  from June 2001 through  December  2003. He was President of Tenax,
Inc. a home building  company from February,  1999 through June 2001. He was the
Vice  President  of  Construction  for  Matthews  Southwest  from  1996  through
February,  1999. Mr. Rea attended Texas Tech University.  Mr. Rea is the brother
of our Chief Executive Officer and Director,  Mr. John E. Rea and the son of our
Chairman, Mr. Edward P. Rea.

Robert A. (Andy) England, Chief Technology Officer

      Mr. England has been our Chief Technology  Officer since December 2003. He
was  previously the Chief  Technology  Officer and Chief  Production  Manager at
Restoration  Group America 2003, Inc. from April 2003 to December 2003. Prior to
that,  he was employed by Motorola,  Inc. as a Global  Account  Manager from May
1999 through March 2003. Mr. England was a Senior Integration  Manager for Sabre
Holdings  Corporation  from 1986 until May 1999. He earned a Bachelor of Science
(BSc)  degree  in  Computing  and  Information   Sciences  from  Oklahoma  State
University in 1986. Mr. England is also a licensed all-lines insurance adjuster.

Richard S. Nelson, President

      Mr. Nelson has been with us since February 2004. Prior to joining us, from
September 2003 through February 2004, Mr. Nelson was the CEO of Mosquito Control
Systems,  L.P., a Dallas,  Texas-based  pest control firm.  From  September 2002
through  September  2003,  he headed  Richard  Nelson &  Associates,  a business
consulting  firm.  From June,  1992 through  September  2002, he was Senior Vice
President  of  WebLink  Wireless,   Inc.,  f/k/a  PageMart  Wireless,   Inc.,  a
publicly-held  wireless  communication  carrier.  He also held several executive
positions at AMR  Corporation.  Mr. Nelson earned a Bachelor of Arts degree (BA)
from  Northwestern  University  in Chicago,  Illinois  and a Masters of Business
Administration (MBA) degree from the University of Dallas in Dallas, Texas.

Bruce A. Hall, Chief Financial Officer

      Mr. Hall joined us in May 2004 and is a senior  financial  executive  with
extensive  experience as a CFO and in related financial  management positions in
the real estate development, energy, consulting and manufacturing industries. He
has held senior level positions at Recognition  Equipment,  Inc.,  Harris Adacom
Corporation  and Probex  Corporation.  He has also been a senior  financial  and
management  consultant,  multi-family  housing developer and began his career in
public  accounting  with Arthur Young & Company,  a predecessor of Ernst & Young
LLP. Mr. Hall holds both CPA (Certified  Public  Accountant)  and CMA (Certified
Management Accountant) designations and is a graduate of the University of Texas
at Austin.

Kevin L. Dahlberg, Executive Vice President - Finance

      Mr.  Dahlberg  has been our  Executive  Vice  President  -  Finance  since
December 2003. He was previously  employed with Moore Remodeling & Construction,
L.P. and Mosquito Control Systems,  L.P. as principal and partner from September
2002 through December 2003. Prior to that, Mr. Dahlberg was employed by Hillwood

                                       29
<PAGE>

Investments,  a Perot  Company,  from March 2000,  through August 2002 as a Vice
President.  Prior to his tenure at Hillwood, Mr. Dahlberg was employed at Archon
Financial,  a Goldman Sachs company,  as a Vice  President and  Commercial  Real
Estate Lending  Underwriter  from November  1997,  through  September  1999. Mr.
Dahlberg  obtained a Bachelor of Arts in Business  Administration  (BBA)  degree
from Baylor  University  with majors in  Entrepreneurship,  Management  and Real
Estate in 1985.  He also  holds  Series  6,  Series 7 and  Series 63  Securities
Licenses.

Evelyn M. Rawls,  Vice  President  -  Insurance  Operations  and  President,  RG
Insurance Services, Inc.

      Ms.  Rawls  has been our  Vice  President  -  Insurance  Operations  since
December 2003 and President of RG Insurance Services, Inc. since September 2003.
She was Vice President of Merit Insurance Services, Inc. from August, 1999 until
September  2003.  Prior to that,  Ms. Rawls was Assistant Vice President at Hilb
Rogal & Hamilton  Company from  September 1995 until August 1999. Ms. Rawls will
be resigning her full time employment with RGIS effective December 31, 2004, but
has agreed to continue as a consultant until December 31, 2005. RGIS will retain
her book of business and associated commissions.

Mr.  Christopher  S. Willis,  Senior Vice  President  and General  Counsel of RG
Insurance Services, Inc.

      Mr. Willis joined our firm in September  2004. He was previously  employed
as Senior Vice President,  General Counsel and Corporate Secretary of Cunningham
Lindsey U.S., Inc, an insurance loss adjusting firm based in Dallas,  Texas with
over 100 locations across the United States. Prior to joining Cunningham Lindsey
U.S.,  Inc.,  Mr.  Willis  was an  associate  attorney  with  the  law  firm  of
Touchstone,  Bernays,  Johnston,  Beall,  Smith  &  Stollenwerk  L.L.P.  He is a
graduate of Southern Methodist University where he received degrees in economics
and political science as well as a Juris Doctorate.

Michael E. Mayor , Director of Financial Services

      Mr. Mayor is our Director of Financial Services. Prior to joining us, from
October  1986  through  June 2004,  Mr.  Mayor was with Mars  Incorporated  as a
National Finance Manager, National Sales Manager, Specialty Markets Manager, and
Key Account  Supervisor.  From May 1984 to October  1986, he was a Sales Manager
for Procter and Gamble and  PepsiCo.  Mr. Mayor earned a Bachelor of Arts degree
(BA) from Sam  Houston  State  University,  Huntsville,  Texas and a Masters  of
Business  Administration  (MBA)  degree from Thomas  More  College in  Crestview
Hills, Kentucky.

Edward P. (Ted) Rea, Chairman of the Board

      Mr. Rea has been Chairman of the Board and a Director since April 2001. He
has also been an  independent  business  consultant  since 1998.  Mr. Rea is the
father of our Chief  Executive  Officer and  Director,  Mr. John E. Rea, and our
President, Chief Operating Officer and Director, Mr. James A. Rea.

Paul S. Johnson, Director

      Mr.  Johnson has been a member of our Board of  Directors  since  February
2004. Mr. Johnson  retired from the U.S. Naval Reserves in 1991 with the rank of
2-star admiral. From July, 1989 to the present, he has been employed by American
East as a  Captain  on Boeing  727  aircraft.  He is a  graduate  of Iowa  State
University where he obtained a Bachelors of Science (BS) degree.

Michael A. Jenkins, Director

      Mr. Jenkins has been a member of our Board of Directors  since March 2004.
He is currently  President of Leisure and Recreation  Concepts,  Inc.  (LARC), a
design and consulting firm,  located in Dallas,  Texas. He has been President of
LARC since 1970.  Additionally,  Mr.  Jenkins has been  President  and  Managing
Director of Dallas Summer Musicals, Inc., a musical theater company, since 1974.
Mr. Jenkins attended Baylor University from 1960 to 1963.

                                       30
<PAGE>

J. Kenneth Dunn, Director

      Mr. Dunn is  currently  the  President  of Rainer  Capital  Management,  a
banking and financial  consulting  firm,  which he formed in 2003.  From 1994 to
2002,  Mr. Dunn was a partner with Meridian  Capital  Management,  a real estate
management  firm.  From 1988 to 1994,  Mr. Dunn was Executive  Vice President of
Hampton Real Estate Group, a real estate management  company which owned and /or
controlled  approximately  10,000  apartment units and 1,500,000  square feet of
commercial  property.  Mr. Dunn was employed as a  commercial  loan officer from
1982 to 1988 with First National Bank of Commerce in New Orleans,  Louisiana and
Banc Texas in Dallas,  Texas in the general  business  and real  estate  lending
divisions.  Mr. Dunn received his Master of Business  Administration degree from
the University of Arkansas in 1982.

Ralph Hunter, Director

      Mr. Hunter has been the President of Hunter-Gray Financial Services, Inc.,
an Ontario-based  financial and investment planning firm, since 1994. Mr. Hunter
has extensive  experience  in the  insurance  industry and from 1960 to 1998 was
President and Chief  Executive  Officer of Hunter  Insurance  Brokers,  Ltd., an
Ontario-based  general  insurance  brokerage firm specializing in commercial and
personal  insurance  services.  Mr.  Hunter  is past  President  of the  City of
Mississauga  Insurance Brokers Association and in 2003, was awarded the Queen of
England's  Jubilee Award in  recognition of community  service.  He is currently
Chairman of the board of directors for the Mississauga  Living Arts Center and a
director on the Peel Regional  Police Service Board  responsible  for the second
largest Police Service in Ontario with over 2100 employees.

Board Participation and Structure

      On November 26, 2004,  Cecil W. Jones  resigned his position as a director
of the Company due to the time  required for Mr. Jones primary  business.  There
were no  disagreements  with the Company on any matter  related to the Company's
operations, policies or practices.

      On December 6, 2004,  D. Yale Sage  resigned his position as a director of
the Company to pursue other business interests. There were no disagreements with
the  Company on any matter  related to the  Company's  operations,  policies  or
practices.

Compensation Committee

      We  maintain  a  Compensation  Committee  of our Board of  Directors.  The
Compensation  Committee is responsible for review of and making  recommendations
to our Board of Directors on all matters  relating to compensation  and benefits
provided to our executive officers.  The Compensation  Committee is comprised of
Messrs. Jenkins, Hunter and Johnson.

Audit Committee

      The Audit  Committee  assists our Board of  Directors  in  exercising  its
fiduciary responsibilities for oversight of audit and relating matters including
corporate  accounting,  reporting and control practices.  It is also responsible
for  recommending  to our Board of  Directors  the  independent  auditors  to be
engaged by the Company for the  following  fiscal year.  The Audit  Committee is
comprised  of Mr.  Dunn and a director  to be  determined  by the end of January
2005.  , The  Audit  Committee  will  meet  periodically  with  our  management,
financial  personnel  and  the  independent  auditors  to  review  our  internal
accounting  controls and auditing and financial  reporting matters.  The Company
does not currently have a designated  financial expert, but anticipates  filling
this position in 2005.

                                       31
<PAGE>

Governance Committee

      The  Governance  Committee  assists our Board of Directors  in  addressing
corporate  governance and fiduciary control issues. The Governance  Committee is
comprised of Messrs. Dunn and Hunter.

Nomination Committee

      The Nomination  Committee  assists our Board of Directors in the selection
and nomination of directors.  The  Nominating  Committee is comprised of Messrs.
Jenkins, Johnson and Edward P. Rea.

                                       32
<PAGE>

MINIMUM SUITABILITY

      We have adopted as a general investor suitability standard the requirement
that each  subscriber  for our Debentures  represent in writing,  in addition to
other  representations,  that (i) he is acquiring our  Debentures for investment
and not with a view to resale  or  distribution;  (ii) he can bear the  economic
risk of losing his entire investment; (iii) he is an accredited investor as that
term is defined in Regulation D; (iv) his overall commitment to investments that
are not  readily  marketable  is not  disproportionate  to his net worth and his
investment in our  Debentures  will not cause such overall  commitment to become
excessive  and (v) he has adequate  means of providing for his current needs and
personal  contingencies  and has no need for liquidity in his  investment in our
Debentures.

      These suitability standards represent minimum suitability requirements for
a prospective purchaser, and the satisfaction of such standards by a prospective
purchaser does not necessarily mean that our Debentures is a suitable investment
for the  purchaser.  Each  prospective  investor  should  consider  whether  the
purchase  of  Debentures  is  suitable  for him in the  light of his  individual
investment  objectives  and his present and expected  future  financial  and tax
position and needs.  Each prospective  investor is urged to consult a qualified,
independent tax and investment advisor and his attorney.

SUBSCRIPTION PROCEDURES

      Upon request by a  prospective  investor,  we will deliver a volume of the
documents (the "Subscription  Documents"),  that a prospective  investor will be
required to complete and execute in order to be considered as a purchaser of our
Debentures.  The  Subscription  Documents  will consist of, among other possible
documents,  a  Subscription  Agreement,  a Registration  Rights  Agreement and a
Confidential Purchaser Questionnaire that will require a prospective investor to
certify,  among other things, that (i) the prospective investor is an accredited
investor;  (ii) the prospective  investor's  total  investment in our Debentures
will not  represent  more than ten  percent of the  prospective  investor's  net
worth; and (iii) any Debentures to be purchased by the prospective investor will
be purchased for the prospective  investor's own account, for investment and not
with a view to resale or distribution thereof.

      If the  prospective  investor  determines to purchase  Debentures  offered
hereby,  the prospective  investor must return to us the prospective  investor's
copy of the Subscription Documents) each of which shall have been duly completed
and signed. At that time, the prospective  investor must also remit by certified
check or wire transfer (to an escrow account specified by us) an amount equal to
the purchase price of the Debentures  that the  prospective  investor  wishes to
purchase.

      We will review the Subscription  Documents and determine whether to accept
the subscriptions  proposed thereby.  If a subscription is accepted,  we will so
notify the prospective  investor and the purchase price will remain deposited in
escrow  at a bank  until  the  closing  for the  subscribed  Debentures.  If the
subscription  is not  accepted,  the  Company  will so  notify  the  prospective
investor  and  will  return  the  prospective   investor's  funds,  as  soon  as
practicable.  Funds held in escrow will not bear  interest.  We may, in our sole
discretion, reduce each prospective investor's requested number of Debentures by
any amount without any prior notice to or consent by any  prospective  investor.
In this event, each prospective investor's funds in excess of the purchase price
for  Debentures  issued to the investor will be returned as soon as  practicable
following the closing date.

      We may agree to hold more than one closing with respect to the  Debentures
offered hereby. There will be no minimum aggregate number of Debentures required
to be sold at the initial closing or any subsequent closing. The initial closing
and any  subsequent  closings  will be held at  times  and  places  and on dates
selected by us and any  Placement  Agent,  provided that no closing will be held
after  January 10,  2005,  unless this  Offering is extended by us as  permitted
herein.

                                       33
<PAGE>

CLOSING CONDITIONS

      Each  prospective  investor  will  not be  deemed  to have  purchased  any
Debentures  until such time as all of the  following  conditions to closing have
occurred:  (i) the purchase  price for the  Debentures has been delivered to us;
and (ii) closing documents in form and substance  satisfactory to the us and our
counsel, Gardere Wynne Sewell, L.L.P., have been executed and delivered.

                              AVAILABLE INFORMATION

      We  are  subject  to the  informational  requirements  of  the  Securities
Exchange  Act of 1934,  as  amended  (the  "Exchange  Act"),  and in  accordance
therewith files periodic  reports,  proxy statements and other  information with
the Securities and Exchange Commission (the "Commission").  Such reports,  proxy
statements and other  information may be inspected and copies made at the public
reference facilities maintained by the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street,  N.W.,  Washington,  D.C. 20549 and at the regional offices of
the Commission. In addition, registration statements and certain other documents
filed with the Commission  through its Electronic Data  Gathering,  Analysis and
Retrieval  ("EDGAR") system are publicly available through the Commission's site
on the Internet's World Wide Web, located at http://www.sec.gov.

      Nevertheless,  before  December  2003, we were an inactive,  publicly-held
corporation  pursuing a business  combination with a privately held company. See
"Business - Our History."  Consequently,  our filings available through EDGAR as
of the  date of  this  Memorandum  do not  describe  our  present  business  and
operations or any of our prospects  since the date of our  acquisitions of RGIS,
RGRM and RG. This Memorandum has not been filed with the Commission or any other
federal or state agency or regulatory body. Neither the Commission nor any other
federal or state  agency or  regulatory  body has passed  upon the  accuracy  or
adequacy of this Memorandum.

                                       34EXHIBIT 4.3

      THIS NOTE AND THE SECURITIES  REPRESENTED  HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THEY MAY NOT BE SOLD, OFFERED FOR
SALE,  PLEDGED  OR  HYPOTHECATED  IN THE  ABSENCE OF AN  EFFECTIVE  REGISTRATION
STATEMENT  AS TO  THE  SECURITIES  UNDER  SAID  ACT  OR AN  OPINION  OF  COUNSEL
REASONABLY  SATISFACTORY  TO  THE  CORPORATION  THAT  SUCH  REGISTRATION  IS NOT
REQUIRED.

                SUBORDINATED SECURED CONVERTIBLE PROMISSORY NOTE

$1,000,000.00                                                 December ___, 2004
New York, New York

      FOR  VALUE  RECEIVED,   RG  America,   Inc.,  a  Nevada  corporation  (the
"Company"),  promises to pay to - (the "Holder"),  or its assigns, the principal
sum of One Million Dollars ($1,000,000.00), or such lesser amount as shall equal
the outstanding  principal  amount  subscribed to hereof and hereby noted on the
signature  page below,  together with interest from the date of this Note on the
unpaid  principal  balance  at a rate equal to twelve  percent  (12%) per annum,
computed  on the basis of the actual  number of days  elapsed  and a year of 365
days. All unpaid  principal,  together with any then unpaid and accrued interest
and other amounts payable  hereunder,  shall be due and payable on the "Maturity
Date"  which date shall be the earlier of (i) July 31,  2005,  or (ii) when such
amounts are  declared due and payable by the Holder (or made  automatically  due
and  payable)  upon or after the  occurrence  of an Event of Default (as defined
below).

      THE  OBLIGATIONS  DUE UNDER THIS NOTE ARE SECURED BY A SECURITY  AGREEMENT
(THE  "SECURITY  AGREEMENT")  DATED AS OF THE DATE  HEREOF AND  EXECUTED  BY THE
COMPANY IN FAVOR OF THE HOLDER. ADDITIONAL RIGHTS OF THE HOLDER ARE SET FORTH IN
THE SECURITY AGREEMENT.

      The  following  is a  statement  of the  rights  of  the  Holder  and  the
conditions  to which  this  Note is  subject,  and to which the  Holder,  by the
acceptance of this Note, agrees:

      1.    DEFINITIONS.  As used in this Note, the following  capitalized terms
have the following meanings:

            (a)   the "Company"  includes the  corporation  initially  executing
this Note and any Person which shall succeed to or assume the obligations of the
Company under this Note.

<PAGE>

            (b) "Certificate"  shall mean the Restated Articles of Incorporation
of Company as in effect on the date hereof.

            (c)  "Equity  Securities"  of any  Person  shall mean (a) all common
stock, preferred stock,  participations,  shares, partnership interests or other
equity interests in and of such Person (regardless of how designated and whether
or not voting or non-voting)  and (b) all warrants,  options and other rights to
acquire any of the foregoing.

            (d) "Event of Default" has the meaning given in Section 7 hereof.

            (e)  "Financial   Statements"   shall  mean,  with  respect  to  any
accounting  period for any Person,  statements of operations,  retained earnings
and cash flows of such Person for such period, and balance sheets of such Person
as of the end of such period,  setting  forth in each case in  comparative  form
figures for the corresponding period in the preceding fiscal year if such period
is less than a full  fiscal  year or,  if such  period  is a full  fiscal  year,
corresponding figures from the preceding fiscal year, all prepared in reasonable
detail and in accordance with generally accepted accounting  principles (except,
with  respect to monthly or quarterly  financials,  for  footnotes  and year end
adjustments). Unless otherwise indicated, each reference to Financial Statements
of any Person  shall be deemed to refer to  Financial  Statements  prepared on a
consolidated basis.

            (f) "Holder"  shall mean the Person  specified  in the  introductory
paragraph of this Note or any Person who shall at the time be the holder of this
Note.

            (g)  "Indebtedness"  shall mean and include the aggregate amount of,
without  duplication (a) all obligations for borrowed money, (b) all obligations
evidenced by bonds,  debentures,  notes or other  similar  instruments,  (c) all
obligations to pay the deferred  purchase  price of property or services  (other
than accounts payable incurred in the ordinary course of business  determined in
accordance with generally accepted accounting  principals),  (d) all obligations
with  respect  to  capital  leases,  (e)  all  guaranty  obligations;   (f)  all
obligations  created  or  arising  under  any  conditional  sale or other  title
retention  agreement with respect to property  acquired by such Person,  (g) all
reimbursement and other payment obligations, contingent or otherwise, in respect
of letters of credit and/or obligations under taxing authorities.

            (h)  "Investment"  of any  Person  shall mean any loan or advance of
funds by such Person to any other  Person  (other than  advances to employees of
such  Person for  moving  and  travel  expense,  drawing  accounts  and  similar
expenditures  in the  ordinary  course  of  business),  any  purchase  or  other
acquisition of any Equity  Securities or Indebtedness  of any other Person,  any
capital contribution by such Person to or any other investment by such Person in
any other Person (including,  without limitation,  any Indebtedness  incurred by
such Person of the type  described in clauses (a) and (b) of the  definition  of
"Indebtedness"  on  behalf  of  any  other  Person);  provided,   however,  that
Investments shall not include accounts  receivable or other indebtedness owed by
customers  of such  Person,  which are  current  assets  and arose from sales or
non-exclusive licensing in the ordinary course of such Person's business.

                                       2
<PAGE>

            (i) "Lien" shall mean,  with respect to any  property,  any security
interest,  mortgage, pledge, lien, claim, charge or other encumbrance in, of, or
on such property or the income therefrom,  including,  without  limitation,  the
interest of a vendor or lessor under a conditional sale agreement, capital lease
or other  title  retention  agreement,  or any  agreement  to provide any of the
foregoing, and the filing of any financing statement or similar instrument under
the Uniform Commercial Code or comparable law of any jurisdiction.

             (j) "Material  Adverse Effect" shall mean a material adverse effect
on (a) the business,  assets, operations, or financial or other condition of the
Company;  (b) the ability of the Company to pay or perform  the  Obligations  in
accordance with the terms of this Note and the other  Transaction  Documents and
to avoid a default or Event of Default under any  Transaction  Document;  or (c)
the rights  and  remedies  of Holder  under  this  Note,  the other  Transaction
Documents or any related document, instrument or agreement.

            (l) "Obligations" has the meaning given in Section 1 of the Security
Agreement.

            (m) "Permitted Indebtedness" means:

                  (i)  Indebtedness  of Company  in favor of the Holder  arising
under this Note;

                  (ii) The  existing  Indebtedness  disclosed  on the RG AMERICA
Disclosure Schedule (the "Schedule");

                  (iii)  Indebtedness  to trade  creditors,  including,  without
limitation, affiliates of Company, incurred in the ordinary course of business;

                  (iv) Other Indebtedness of Company, not exceeding $1.0 million
in the aggregate outstanding at any time;

                  (v) Contingent obligations of Company consisting of guarantees
(and other  credit  support)  of the  obligations  of vendors and  suppliers  of
Company  in respect  of  transactions  entered  into in the  ordinary  course of
business;

                  (vi)  Indebtedness  with respect to capital lease  obligations
and Indebtedness secured by Permitted Liens;

                  (vii)   Extensions,   renewals,   refundings,    refinancings,
modifications,  amendments  and  restatements  of any of the items of  Permitted
Indebtedness  (a) through (f) above,  provided that the principal amount thereof
is not increased or the terms thereof are not modified to impose more burdensome
terms upon Company.

                                       3
<PAGE>

            (n)  "Permitted  Investments"  shall mean and include:  (a) deposits
with  commercial  banks organized under the laws of the United States or a state
thereof to the extent such  deposits  are fully  insured by the Federal  Deposit
Insurance Corporation; (b) Investments in marketable obligations issued or fully
guaranteed by the United States and maturing not more than one (1) year from the
date of issuance; (c) Investments in open market commercial paper rated at least
"A1" or "P1" or higher by a national  credit rating agency and maturing not more
than one (1) year from the  creation  thereof;  (d)  Investments  pursuant to or
arising under currency  agreements or interest rate  agreements  entered into in
connection with bona fide hedging  arrangements;  (e) Investments  consisting of
deposit  accounts of the  Company in which the Holder has a  perfected  security
interest and deposit  accounts of its  Subsidiaries  maintained  in the ordinary
course of business;  (f)  Investments  existing on the Closing Date disclosed in
the Schedule;  (g) Extensions of credit in the nature of accounts  receivable or
notes  receivable  arising  from the same or lease of goods or  services  in the
ordinary course of business;  (h)  Investments  consisting of the endorsement of
negotiable  instruments for deposit or collection or similar transactions in the
ordinary  course of  business;  (i)  Investments  (including  debt  obligations)
received in connection  with the  bankruptcy or  reorganization  of customers or
suppliers and in settlement of  delinquent  obligations  of, and other  disputes
with,  customers or suppliers  arising in the ordinary  course of business;  (j)
Investments consisting of (i) compensation of employees,  officers and directors
of borrower so long as the Board of  Directors of Company  determines  that such
compensation is in the best interests of Company, (ii) travel advances, employee
relocation loans and other employee loans and advances in the ordinary course of
business,  (iii)  loans to  employees,  officers  or  directors  relating to the
purchase  of equity  securities  of Company,  (iv) other  loans to officers  and
employees  approved  by the  Board  of  Directors;  and  (k)  other  Investments
aggregating not in excess of $1,000,000 at any time.

            (o) "Permitted Liens" shall mean and include: (i) Liens for taxes or
other  governmental  charges not at the time  delinquent or  thereafter  payable
without penalty or being contested in good faith,  provided provision is made to
the  reasonable  satisfaction  of Holder  for the  eventual  payment  thereof if
subsequently  found payable;  (ii) Liens of carriers,  warehousemen,  mechanics,
materialmen,  vendors, and landlords incurred in the ordinary course of business
for sums not overdue or being  contested  in good faith,  provided  provision is
made to the reasonable  satisfaction of Holder for the eventual  payment thereof
if  subsequently  found payable;  (iii)  deposits  under workers'  compensation,
unemployment  insurance and social security laws or to secure the performance of
bids,  tenders,  contracts  (other than for the repayment of borrowed  money) or
leases,  or to secure  statutory  obligations  of  surety or appeal  bonds or to
secure  indemnity,  performance or other similar bonds in the ordinary course of
business; (iv) Liens securing obligations under a capital lease if such lease is
permitted under the Security  Agreement and such Liens do not extend to property
other than the  property  leased under such  capital  lease;  (v) Liens upon any
equipment  acquired or held by Company or any of its  Subsidiaries to secure the
purchase price of such equipment or indebtedness incurred solely for the purpose
of financing the  acquisition of such equipment;  (vi) easements,  reservations,
rights of way, restrictions,  minor defects or irregularities in title and other

                                       4
<PAGE>

similar  charges or affecting the value or use of such property;  (vii) Liens in
favor of the  Holder;  (viii)  Liens  existing  on the date  hereof  in favor of
holders of Senior  Indebtedness;  (ix) any liens  existing as of the date hereof
and disclosed in the Schedule; (x) liens on equipment leased by Company pursuant
to an operating  lease in the ordinary  course of business  (including  proceeds
thereof and accessions thereto) incurred solely for the purpose of financing the
lease of such equipment  (including Liens arising from UCC financing  statements
regarding  such  leases);  (xi)  liens  arising  from  judgements,   decrees  or
attachments  to the  extent  and  only  so  long as  such  judgment,  decree  or
attachment  does not  constitute an Event of Default under 7(h);  (xii) liens in
favor of customs  and revenue  authorities  arising as a matter of law to secure
payment of customs duties in connection  with the  importation of goods;  (xiii)
liens arising solely by virtue of any statutory or common law provision relating
to  banker's  liens,  rights  off setoff or similar  rights and  remedies  as to
deposit  accounts  or  other  funds   maintained  with  a  creditor   depository
institution; and (xiv) liens incurred in connection with the extension, renewal,
refunding,   refinancing,   modification,   amendment  or   restatement  of  the
indebtedness  secured by Liens of the type  described  in clauses (i) and (xiii)
above, provided that any extension, renewal or replacement Lien shall be limited
to the property  encumbered by the existing Lien and the principal amount of the
indebtedness being extended, renewed or refinanced does not increase.

            (p) "Person" shall mean and include an individual, a partnership,  a
corporation  (including  a business  trust),  a joint stock  company,  a limited
liability  company,  an  unincorporated  association,  a joint  venture or other
entity or a governmental authority.

            (q)  "Senior  Indebtedness"  shall  mean the  principal  of,  unpaid
interest on and other amounts due in connection with the Company's Business Loan
Agreement  with Town North Bank in an amount not to exceed $0.50  million at any
time.

            (r) "Preferred shares" shall mean the Company's presently authorized
Preferred Stock.

            (s)  "Subsidiary"  shall mean (a) any corporation of which more than
50% of the issued and outstanding equity securities having ordinary voting power
to elect a majority of the Board of Directors of such corporation is at the time
directly or  indirectly  owned or controlled  by Company,  (b) any  partnership,
joint  venture,  or other  association  of  which  more  than 50% of the  equity
interest  having the power to vote,  direct or control  the  management  of such
partnership,  joint  venture or other  association  is at the time  directly  or
indirectly  owned and controlled by Company (c) any other entity included in the
financial statements of Company on a consolidated basis.

            (t)  "Transaction  Documents"  shall  mean this Note,  the  Security
Agreement, the Warrant (as defined in Section 11 hereof).

                                       5
<PAGE>

      2.    REPRESENTATIONS  AND WARRANTIES OF COMPANY.  The Company  represents
and warrants to the Holder that except as disclosed in the RG AMERICA Disclosure
Schedule delivered concurrently herewith:

            (a) Due  Incorporation  and  Qualification.  Each of Company and its
Subsidiaries (i) is a corporation  duly organized,  validly existing and in good
standing under the laws of its jurisdiction of incorporation; (ii) has the power
and authority to own, lease and operate its properties and carry on its business
as now conducted and as proposed to be conducted;  and (iii) is duly  qualified,
licensed to do business and in good  standing as a foreign  corporation  in each
jurisdiction  where the failure to be so qualified or licensed could  reasonably
be expected to have a Material Adverse Effect.

            (b) Authority. The execution, delivery and performance by Company of
each Transaction  Document to be executed by Company and the consummation of the
transactions  contemplated  thereby (i) are within the power of Company and (ii)
have been duly authorized by all necessary actions on the part of Company.

            (c)  Enforceability.  Each Transaction  Document executed,  or to be
executed,  by Company  has been,  or will be, duly  executed  and  delivered  by
Company  and  constitutes,  or will  constitute,  a  legal,  valid  and  binding
obligation of Company, enforceable against Company in accordance with its terms,
except as limited by bankruptcy, insolvency or other laws of general application
relating to or affecting  the  enforcement  of creditors'  rights  generally and
general principles of equity.

            (d) Non-Contravention.  The execution and delivery by Company of the
Transaction  Documents  executed by Company and the performance and consummation
of the  transactions  contemplated  thereby do not and will not (i)  violate the
Certificate of Incorporation or Bylaws of the Company or any material  judgment,
order, writ, decree,  statute,  rule or regulation  applicable to Company;  (ii)
violate any  provision  of, or result in the breach or the  acceleration  of, or
entitle any other Person to  accelerate  (whether  after the giving of notice or
lapse of time or both), any material mortgage, indenture,  agreement, instrument
or contract to which Company is a party or by which it is bound; or (iii) result
in the creation or imposition of any Lien upon any property, asset or revenue of
Company  (other than any Lien arising  under the  Transaction  Documents) or the
suspension,  revocation,  impairment,  forfeiture, or nonrenewal of any material
permit,  license,  authorization or approval applicable to Company, its business
or operations, or any of its assets or properties.

            (e) Approvals. No consent,  approval,  order or authorization of, or
registration,  declaration or filing with, any  governmental  authority or other
Person  (including,  without  limitation,  the  shareholders  of any  Person) is
required in  connection  with the  execution  and  delivery  of the  Transaction
Documents  executed  by Company  and the  performance  and  consummation  of the
transactions contemplated thereby.

            (f) No  Violation or Default.  None of the Company or the  Company's
Subsidiaries  is  in  violation  of  or in  default  with  respect  to  (i)  its
Certificate of  Incorporation  or Bylaws or equivalent  charter  document or any

                                       6
<PAGE>

material judgment,  order, writ, decree,  statute, rule or regulation applicable
to such Person; (ii) any material mortgage, indenture,  agreement, instrument or
contract  to which such  Person is a party or by which it is bound (nor is there
any waiver in effect which,  if not in effect,  would result in such a violation
or default),  where, in each case, such violation or default,  individually,  or
together with all such violations or defaults,  could  reasonably be expected to
have a Material Adverse Effect.

            (g)  Litigation.   No  actions   (including,   without   limitation,
derivative actions), suits, proceedings or investigations are pending or, to the
knowledge  of the  Company,  threatened  against  the  Company or the  Company's
Subsidiaries  at law or in equity in any court or before any other  governmental
authority  which if adversely  determined  (i) would (alone or in the aggregate)
have a  Material  Adverse  Effect or (ii) seeks to enjoin,  either  directly  or
indirectly,  the  execution,  delivery  or  performance  by the  Company  of the
Transaction Documents or the transactions contemplated thereby.

            (h) Title.  The Company and the Company's  Subsidiaries own and have
good and  marketable  title in fee  simple  absolute  to,  or a valid  leasehold
interest in, all their  respective real properties and good title to their other
respective  assets and  properties  as  reflected  in the most recent  Financial
Statements  delivered to Purchasers (except those assets and properties disposed
of in the  ordinary  course  of  business  since  the  date  of  such  Financial
Statements)  and all respective  assets and  properties  acquired by Company and
Company's Subsidiaries since such date (except those disposed of in the ordinary
course of business).  Such assets and properties are subject to no Lien,  except
for Permitted Liens.

            (i) Equity  Securities.  The authorized capital stock of the Company
consists of 300,000,000  shares of Common Stock, $.001 par value, and 35,000,000
shares of  Preferred  Stock,  $.001 par  value,  of which  there are  issued and
outstanding,  118,885,605  shares of Common Stock and zero (0) Preferred shares.
Additionally,  there are  27,614,850  shares of common stock that are subscribed
and issuable  There are no other  outstanding  shares of capital stock or voting
securities.  All  outstanding  shares  of the  Company's  Common  Stock  and the
Company's  Series A Preferred Stock are duly authorized,  validly issued,  fully
paid and  non-assessable  and are free of any Liens other than any Liens created
by or imposed upon the holders thereof, and are not subject to preemptive rights
or rights of first refusal created by statute,  the Certificate of Incorporation
or Bylaws of the Company or any  agreement to which the Company is a party or by
which  it is  bound.  There  are no  other  options,  warrants,  calls,  rights,
commitments or agreements of any character to which the Company is a party or by
which it is bound obligating the Company to issue, deliver,  sell, repurchase or
redeem, or cause to be issued,  delivered,  sold,  repurchased or redeemed,  any
shares of capital  stock of the  Company  or  obligating  the  Company to grant,
extend,  accelerate  the vesting of, change the price of, or otherwise  amend or
enter into any such option, warrant, call, right, commitment or agreement.

                                       7
<PAGE>

      3.    REPRESENTATIONS  AND WARRANTIES OF HOLDER. The Holder represents and
warrants to the Company that such Holder has been advised that neither this Note
nor the  securities  which may be issued  upon the  conversion  hereof have been
registered  under  the  Securities  Act,  or  any  state  securities  laws  and,
therefore,  cannot be resold  unless  registered  under the  Securities  Act and
applicable state  securities laws or unless an exemption from such  registration
requirements  is  available.  Such  Holder is aware that the Company is under no
obligation to effect any such  registration  with respect to the Note or to file
for or comply with any  exemption  from  registration.  Such Holder has not been
formed solely for the purpose of making this  investment  and is purchasing  the
Note to be acquired by such Holder hereunder for its own account for investment,
not as a nominee or agent,  and not with a view to, or for resale in  connection
with, the distribution thereof. Such Holder has such knowledge and experience in
financial and business  matters that such Purchaser is capable of evaluating the
merits and risks of such  investment,  is able to incur a complete  loss of such
investment  and is able to bear  the  economic  risk of such  investment  for an
indefinite period of time. Such Holder is an accredited investor as such term is
defined in Rule 501 of Regulation D under the Securities Act.

      4.    INTEREST.  Accrued interest on the outstanding  principal balance on
this Note shall be payable on the Maturity Date.

      5.    PREPAYMENT.  Upon  fifteen  (15) days  prior  written  notice to the
Holder, the Company may prepay this Note in whole or in part;  provided that any
such  prepayment will be applied first to the payment of expenses due under this
Note,  second to  interest  accrued  on this Note and  third,  if the  amount of
prepayment exceeds the amount of all such expenses and accrued interest,  to the
payment of principal of this Note.

      6.    CERTAIN  COVENANTS.  While any amount is outstanding under the Note,
without the prior  written  consent of the Holder,  which  consent  shall not be
unreasonably withheld or delayed:

            (a) Indebtedness.  Neither Company nor any of its Subsidiaries shall
create,  incur,  assume  or  permit  to exist  any  Indebtedness  except  Senior
Indebtedness and Permitted Indebtedness.

            (b) Liens.  Neither the Company  nor any of its  Subsidiaries  shall
create,  incur,  assume or permit to exist any Lien on or with respect to any of
its  assets  or  property  of any  character,  whether  now  owned or  hereafter
acquired, except for Permitted Liens.

            (c)  Asset  Dispositions.   Neither  the  Company  nor  any  of  its
Subsidiaries shall sell, lease, transfer, license or otherwise dispose of any of
its  assets or  property  (collectively,  a  "Transfer"),  whether  now owned or
hereafter acquired,  except (i) transfers in the ordinary course of its business
consisting of the sale of inventory and sales of worn-out or obsolete  equipment
and (ii)  transfers  not in excess of $1.0 million for fair value and other than
to any affiliate of the Company.

                                       8
<PAGE>

            (d) Mergers,  Acquisitions,  Etc. Neither the Company nor any of its
Subsidiaries shall consolidate with or merge into any other Person or permit any
other Person to merge into it, or acquire all or substantially all of the assets
or capital stock of any other Person.

            (e)  Investments.  Neither the  Company nor any of its  Subsidiaries
shall make any Investment  except for Permitted  Investments.  Without  previous
notice to Holder,  Company  will not sell an amount  greater  than  $100,000  in
equity securities.

            (f) Dividends,  Redemptions, Etc. Neither the Company nor any of its
Subsidiaries shall (i) pay any dividends or make any distributions on its equity
securities;  (ii) purchase,  redeem,  retire,  decease or otherwise  acquire for
value any of its equity  securities;  (iii)  return any capital to any holder of
its equity securities;  (iv) make any distribution of assets, Equity Securities,
obligations  or  securities to any holder of its Equity  Securities;  or (v) set
apart  any sum for any such  purpose;  other  than  payments  of  principal  and
interest on outstanding  bridge loans and  repurchases of shares from terminated
employees  pursuant to the terms of restricted  stock purchase  agreements,  and
provided, however, that any Subsidiary may pay cash dividends to Company.

            (g)  Indebtedness  Payments.  Except  as  set  forth  on RG  AMERICA
Disclosure  Schedule (as defined in the Merger  Agreement),  neither the Company
nor any of its  Subsidiaries  shall (i) prepay,  redeem,  purchase,  decrease or
otherwise  satisfy in any manner prior to the  scheduled  repayment  thereof any
Indebtedness  for borrowed money (other than (A) amounts due under this Note and
(B) Senior  Indebtedness) or lease obligations,  (ii) amend, modify or otherwise
change  the  terms  of any  Indebtedness  for  borrowed  money  (other  than (A)
Obligations under this Note and (B) Senior Indebtedness) or lease obligations so
as to  accelerate  the scheduled  repayment  thereof or (iii) repay any notes to
officers, directors or stockholders.

            (h) Information  Rights;  Notices.  The Company shall furnish to the
Holder the following:

                  (i) Quarterly  Financial  Statements.  Within ninety (90) days
after the last day of each quarter,  a copy of the  Financial  Statements of the
Company for such quarter and for the fiscal year to date, certified by the chief
financial  officer or controller of the Company to present  fairly the financial
condition,  results of operations and other information presented therein and to
have been prepared in accordance with generally accepted  accounting  principals
consistently applied,  subject to normal year end adjustments and except that no
footnotes need be included with such Financial Statements;

                  (ii)  Annual  Financial  Statements.  Within  ninety (90) days
after the close of each  fiscal year of the  Company,  (i) copies of the audited
Financial  Statements  of  Company  for  such  year,  audited  by  a  recognized

                                       9
<PAGE>

independent  certified  public  accountants,  (ii)  copies  of  the  unqualified
opinions and management letters delivered by such accountants in connection with
such  Financial  Statements,  and (iii) a report  containing  a  description  of
projected business prospects  (including capital  expenditures) and management's
discussion  and  analysis of  financial  condition  and results of  operation of
Company and its Subsidiaries;

                  (iii) SEC  Reports.  At such time as the Company is subject to
the  reporting  requirement  of the Exchange  Act, as soon as possible and in no
event  later than five (5) days after they are sent,  made  available  or filed,
copies of all  registration  statements  and reports  filed by Company  with the
Securities  and  Exchange  Commission  and all  reports,  proxy  statements  and
financial  statements  sent or made  available  by Company  to its  stockholders
generally; and

                  (iv) Notice of Defaults. Promptly upon the occurrence thereof,
written notice of the occurrence of any Event of Default  hereunder or any event
of default with respect to any Senior Indebtedness.

            (i) Inspection Rights. The Holder and its representatives shall have
the right,  at any time during normal  business  hours,  upon  reasonable  prior
notice,  to visit and inspect the  properties of the Company and its  corporate,
financial and operating records,  and make abstracts  therefrom,  and to discuss
the Company's  affairs,  finances and accounts with its directors,  officers and
independent public accountants.

            (j) Use of Proceeds.  The Company  shall use the  proceeds  from all
borrowings under this Note solely for working capital purposes.

      7.    EVENTS OF DEFAULT.  The  occurrence  of any of the  following  shall
constitute  an  "Event of  Default"  under  this Note and the other  Transaction
Documents:

            (a) Failure to Pay.  The Company  shall fail to pay (i) when due any
principal  payment  on the due  date  hereunder  or (ii) any  interest  or other
payment required under the terms of this Note or any other Transaction  Document
on the date due and such  payment  shall not have been made within five (5) days
of Company's  receipt of the Holder's  written notice to Company of such failure
to pay; or

            (b)  Breaches  of  Certain  Covenants.  The  Company  or  any of its
Subsidiaries  shall  fail  to  observe  or  perform  any  covenant,  obligation,
condition or agreement set forth in Section 6(d), 6(f) or 6(j) of this Note; or

            (c)  Breaches  of  Other  Covenants.  The  Company  or  any  of  its
Subsidiaries  shall fail to observe or perform any other  covenant,  Transaction
Documents  (other than those  specified in Sections  7(a) and 7(b)) and (i) such
failure  shall  continue for fifteen (15) days, or (ii) if such failure does not
result  from the payment of money or the failure to pay money and is not curable
within such fifteen (15) day period,  but is  reasonably  capable of cure within

                                       10
<PAGE>

forty-five (45) days, either (A) such failure shall continue for forty-five (45)
days or (B) the Company or its  Subsidiary  shall not have commenced a cure in a
manner reasonably satisfactory to the Holder within the initial fifteen (15) day
period; or

            (d)  Representations and Warranties.  Any representation,  warranty,
certificate, or other statement (financial or otherwise) made or furnished by or
on behalf of the Company to the Holder in writing in  connection  with this Note
or any of the other Transaction Documents,  or as an inducement to the Holder to
enter  into  this  Note and the  other  Transaction  Documents,  shall be false,
incorrect,  incomplete  or  misleading  in any respect  when made or  furnished,
except any such false, incorrect,  incomplete or misleading statement which will
not result in a Material Adverse Effect on the Company; or

            (e) Other  Payment  Obligations.  Except  pursuant to the  Company's
Business Loan Agreement  with Town North  National  Bank,  which may be replaced
with an equivalent entity indebtedness as described in the RG AMERICA Disclosure
Schedule,  the Company or any of its Subsidiaries  shall (i)(A) fail to make any
payment when due under the terms of any bond, debenture,  note or other evidence
of Indebtedness,  including the Senior  Indebtedness,  to be paid by such Person
(excluding this Note and the other Transaction Documents but including any other
evidence of  Indebtedness  of Company or any of its  Subsidiaries to the Holder)
and such failure shall continue beyond any period of grace provided with respect
thereto, or (B) default in the observance or performance of any other agreement,
term or condition contained in any such bond, debenture,  note or other evidence
of Indebtedness,  and (ii) the effect of such failure or default is to cause, or
permit the holder or holders  thereof  to cause,  Indebtedness  in an  aggregate
amount of Two Hundred Fifty  Thousand  Dollars  ($250,000) or more to become due
prior to its stated date of maturity,  unless such acceleration  shall have been
rescinded and such failure to pay cured within thirty (30) days from the date of
such acceleration; or

            (f) Voluntary Bankruptcy or Insolvency  Proceedings.  The Company or
any of its  Subsidiaries  shall (i) apply for or consent to the appointment of a
receiver,  trustee, liquidator or custodian of itself or of all or a substantial
part of its property,  (ii) be unable, or admit in writing its inability, to pay
its debts  generally as they  mature,  (iii) make a general  assignment  for the
benefit of its or any of its creditors,  (iv) be dissolved or liquidated in full
or in part,  (v) become  insolvent  (as such term may be defined or  interpreted
under  any  applicable  statute),  (vi)  commence  a  voluntary  case  or  other
proceeding seeking  liquidation,  reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or other similar law now or
hereafter  in effect or consent to any such relief or to the  appointment  of or
taking  possession  of its  property by any official in an  involuntary  case or
other proceeding  commenced against it, or (vii) take any action for the purpose
of effecting any of the foregoing; or

            (g) Involuntary  Bankruptcy or Insolvency  Proceedings.  Proceedings
for the  appointment  of a receiver,  trustee,  liquidator  or  custodian of the
Company  or any of its  Subsidiaries  or of  all or a  substantial  part  of the

                                       11
<PAGE>

property  thereof,   or  an  involuntary  case  or  other  proceedings   seeking
liquidation,  reorganization  or other relief with respect to the Company or any
of its  Subsidiaries  or the debts thereof under any  bankruptcy,  insolvency or
other similar law now or hereafter in effect shall be commenced and an order for
relief entered or such  proceeding  shall not be dismissed or discharged  within
sixty (60) days of commencement; or

            (h) Judgments. A final judgment or order for the payment of money in
excess of Two Hundred Fifty Thousand  Dollars  ($250,000)  (exclusive of amounts
covered by insurance  issued by an insurer not an affiliate of Company) shall be
rendered  against  the  Company  or any of its  Subsidiaries  and the same shall
remain  undischarged  for a period of thirty  (30) days during  which  execution
shall not be effectively stayed, or any judgment,  writ, assessment,  warrant of
attachment,  or execution or similar process shall be issued or levied against a
substantial  part of the property of the Company or any of its  Subsidiaries and
such judgment,  writ, or similar process shall not be released,  stayed, vacated
or otherwise dismissed within thirty (30) days after issue or levy; or

            (i) Transaction Documents.  Any Transaction Document or any material
term  thereof  shall  cease to be, or be  asserted  by the  Company not to be, a
legal,  valid and binding  obligation of Company  enforceable in accordance with
its terms or if the Liens of the  Holder in any of the  assets of Company or its
Subsidiaries  shall cease to be or shall not be valid and perfected Liens or the
Company  or any  Subsidiary  shall  assert  that  such  Liens  are not valid and
perfected Liens.

      8.    RIGHTS OF HOLDER UPON DEFAULT.  Upon the  occurrence or existence of
any Event of Default  (other  than an Event of Default  referred  to in Sections
7(f) and 7(g)) and at any time  thereafter  during the continuance of such Event
of  Default,  the Holder  may,  by written  notice to the  Company,  declare all
outstanding  Obligations  payable by the Company hereunder to be immediately due
and payable  without  presentment,  demand,  protest or any other  notice of any
kind, all of which are hereby expressly waived,  anything contained herein or in
the  other  Transaction  Documents  to the  contrary  notwithstanding.  Upon the
occurrence  or existence of any Event of Default  described in Sections 7(f) and
7(g),  immediately and without notice,  all outstanding  Obligations  payable by
Company  hereunder  shall  automatically  become  immediately  due and  payable,
without  presentment,  demand,  protest or any other notice of any kind,  all of
which are hereby  expressly  waived,  anything  contained herein or in the other
Transaction  Documents  to the  contrary  notwithstanding.  In  addition  to the
foregoing  remedies,  upon the  occurrence or existence of any Event of Default,
the Holder may exercise any other  right,  power or remedy  granted to it by the
Transaction  Documents  or otherwise  permitted to it by law,  either by suit in
equity or by action at law, or both.

      9.    SUBORDINATION.  The  indebtedness  evidenced  by this Note is hereby
expressly  subordinated,  to the extent and in the manner hereinafter set forth,
in right of payment to the prior payment in full of the Senior Indebtedness.

                                       12
<PAGE>

            (a) Insolvency  Proceedings.  If there shall occur any receivership,
insolvency, assignment for the benefit of creditors, bankruptcy, reorganization,
or arrangements  with creditors  (whether or not pursuant to bankruptcy or other
insolvency laws),  sale of all or substantially all of the assets,  dissolution,
liquidation,  or any other  marshaling  of the  assets  and  liabilities  of the
Company,  (i) no amount shall be paid by the Company in respect of the principal
of,  interest  on or other  amounts  due with  respect  to this Note at the time
outstanding,  unless  and until the  principal  of and  interest  on the  Senior
Indebtedness  then outstanding shall be paid in full, and (ii) no claim or proof
of claim  shall be filed with the Company by or on behalf of Holder of this Note
which shall assert any right to receive any payments in respect of the principal
of and  interest  on this Note  except  subject  to the  payment  in full of the
principal of and interest on all of the Senior Indebtedness then outstanding.

            (b) Default on Senior Indebtedness. If there shall occur an event of
default  which  has  been  declared  in  writing  with  respect  to  any  Senior
Indebtedness,  as  defined  therein,  or in the  instrument  under  which  it is
outstanding,  permitting the holder to accelerate  the maturity  thereof and the
Holder shall have received written notice thereof from the holder of such Senior
Indebtedness, then, unless and until such event of default shall have been cured
or waived or shall have ceased to exist, or all Senior  Indebtedness  shall have
been paid in full,  no payment  shall be made in respect of the  principal of or
interest on this Note,  unless  within one hundred  eighty  (180) days after the
happening  of such event of default,  the  maturity of such Senior  Indebtedness
shall not have been accelerated. Not more than one notice may be given to Holder
pursuant to the terms of this Section 9(b) during any 360 day period.

            (c)  Further  Assurances.  By  acceptance  of this Note,  the Holder
agrees  to  execute  and  deliver  customary  forms of  subordination  agreement
requested  from  time  to time  by  holders  of  Senior  Indebtedness,  and as a
condition to the  Holder's  rights  hereunder,  the Company may require that the
Holder execute such forms of subordination  agreement;  provided that such forms
shall not impose on the Holder terms less favorable  than those provided  herein
and in the Security Agreement.

            (d) Other  Indebtedness.  No indebtedness  which does not constitute
Senior  Indebtedness  shall  be  senior  in  any  respect  to  the  indebtedness
represented by this Note.

            (e)  Subrogation.  Subject  to the  payment  in full  of all  Senior
Indebtedness,  the Holder shall be  subrogated to the rights of the holder(s) of
such Senior Indebtedness (to the extent of the payments or distributions made to
the  holder(s) of such Senior  Indebtedness  pursuant to the  provisions of this
Section  9) to  receive  payments  and  distributions  of assets of the  Company
applicable  to the  Senior  Indebtedness.  No  such  payments  or  distributions
applicable  to the Senior  Indebtedness  shall,  as between  the Company and its
creditors,  other than the holders of Senior  Indebtedness  and the  Holder,  be
deemed to be a payment by the  Company  to or on  account of this Note;  and for
purposes of such  subrogation,  no payments or  distributions  to the holders of
Senior  Indebtedness  to which  the  Holder  would be  entitled  except  for the
provisions  of this Section 9 shall,  as between the Company and its  creditors,
other than the holders of Senior  Indebtedness and the Holder, be deemed to be a
payment by the Company to or on account of the Senior Indebtedness.

                                       13
<PAGE>

            (f) No Impairment.  Subject to the rights, if any, of the holders of
Senior  Indebtedness  under this Section 9 to receive cash,  securities or other
properties otherwise payable or deliverable to the Holder,  nothing contained in
this  Section 9 shall  impair,  as  between  the  Company  and the  Holder,  the
obligation of the Company, subject to the terms and conditions hereof, to pay to
the Holder the principal  hereof and interest hereon as and when the same become
due and  payable,  or shall  prevent the Holder,  upon default  hereunder,  from
exercising  all rights,  powers and  remedies  otherwise  provided  herein or by
applicable law.

            (g) Lien  Subordination.  Any  Lien of the  Holder,  whether  now or
hereafter  existing in  connection  with the amounts due under this Note, on any
assets or property of the Company or any  proceeds or revenues  therefrom  which
the Holder may have at any time as security for any amounts due and  obligations
under this Note shall be subordinate to all Liens now or hereafter  granted to a
holder of Senior  Indebtedness by Company or by law,  notwithstanding  the date,
order or method of attachment  or perfection of any such Lien or the  provisions
of any applicable law.

            (h) Reliance of Holders of Senior  Indebtedness.  The Holder, by its
acceptance  hereof,  shall be deemed to acknowledge and agree that the foregoing
subordination  provisions  are, and are intended to be, an  inducement  to and a
consideration  of each  holder  of  Senior  Indebtedness,  whether  such  Senior
Indebtedness  was  created  or  acquired  before  or after the  creation  of the
indebtedness evidenced by this Note, and each such holder of Senior Indebtedness
shall be deemed conclusively to have relied on such subordination  provisions in
acquiring and holding, or in continuing to hold, such Senior Indebtedness.

      10.   CONVERSION.

            (a)  Conversion  by Holder.  At any time prior to payment in full of
the  principal  balance of this Note,  the Holder  shall have the right,  at the
Holder's  option,  to convert this Note,  in accordance  with the  provisions of
Section 10(c)  hereof,  in whole or in part,  into fully paid and  nonassessable
shares of Common  Stock,  provided that the Holder shall provide at least thirty
(30) days notice to the Company of Holder's  election to convert  this Note into
shares of RG America's  Common Stock upon the occurrence of an Event of Default.
The number of shares of RG  America's  Common  Stock into which this Note may be
converted  shall be determined by dividing the aggregate  amount of this Note to
be converted by the Conversion Price (as defined below) in effect at the time of
such  conversion.  The initial  "Conversion  Price"  shall be equal to $0.60 per
share post  reverse-split.  The Conversion  Price shall be subject to adjustment
from time to time  pursuant to Section 12 hereof and the terms of the  Company's
Certificate.

                                       14
<PAGE>

            (b)  Conversion  by the Company.  The Company  shall have the right,
with the  Holder's  consent,  to  convert  this  Note,  in  accordance  with the
provisions  of Section 10(c)  hereof,  in whole or in part,  into fully paid and
nonassessable  shares of RG  America's  common  stock.  The  number of shares of
common  stock into  which  this Note may be  converted  shall be  determined  by
dividing the  aggregate  amount of this Note to be  converted by the  Conversion
Price in effect at the time of such conversion.

            (c)   Conversion Procedure.

                  (i) Conversion  Pursuant to Section  10(a).  Before the Holder
shall be entitled to convert this Note into shares of RG America's Common Stock,
it shall  surrender this Note,  duly endorsed,  at the office of the Company and
shall give written  notice,  postage  prepaid,  to the Company at its  principal
corporate office, of the election to convert the same pursuant to Section 10(a),
and shall state therein the amount of the unpaid  principal  amount of this Note
to be converted and the name or names in which the  certificate or  certificates
for shares of RG America's Common Stock are to be issued.  The Company shall, as
soon  as  practicable  thereafter  (but  in  any  event  within  ten  (10)  days
thereafter),  issue and  deliver  to the  Holder of this Note a  certificate  or
certificates  for the number of shares of RG America's Common Stock to which the
Holder shall be entitled upon  conversion  (bearing such legends as are required
by applicable state and federal  securities  laws),  together with a replacement
Note (if any principal  amount is not  converted)  and any other  securities and
property to which the Holder is entitled upon such conversion under the terms of
this Note,  including a check payable to Holder for any cash amounts  payable as
described in Section  10(d).  The  conversion  shall be deemed to have been made
immediately  prior to the close of business on the date of the surrender of this
Note,  and the Person or Persons  entitled to receive the shares of RG America's
Common  Stock upon such  conversion  shall be treated  for all  purposes  as the
record holder or holders of such shares of RG America's  Common Stock as of such
date.

                  (ii)  Conversion  Pursuant to Section  10(b).  If this Note is
converted  by the Company  pursuant to Section  10(b),  written  notice shall be
delivered to the Holder  notifying the Holder of the  conversion to be effected,
specifying  the  Conversion  Price,  the  principal  amount  of the  Note  to be
converted,  the date on which such  conversion  is expected to occur and calling
upon  such  Holder to  surrender  to  Company,  in the  manner  and at the place
designated,  the Note.  Upon such  conversion  of this Note,  the  Holder  shall
surrender this Note, duly endorsed,  at the principal office of Company.  At its
expense, the Company shall, as soon as practicable  thereafter (but in any event
within ten (10) days thereafter), issue and deliver to such Holder a certificate
or certificates  for the number of shares to which Holder shall be entitled upon
such  conversion  (bearing such legends as are required by applicable  state and
federal  securities  laws),  together with any other  securities and property to
which the Holder is entitled upon such conversion  under the terms of this Note,
including  a check  payable  to the  Holder  for any  cash  amounts  payable  as
described in Section  10(d).  Any  conversion  of this Note  pursuant to Section
10(b) shall be deemed to have been made immediately  prior to the closing of the
issuance and sale of shares as described in Section  10(b) and on and after such
date the Person  entitled to receive the shares  issuable  upon such  conversion
shall be treated for all purpose as the record  Holder of such shares as of such
date.

                                       15
<PAGE>

            (d) Fractional Shares; Interest; Effect of Conversion. No fractional
shares  shall be issued  upon  conversion  of this Note.  In lieu of the Company
issuing any  fractional  shares to the Holder upon the  conversion of this Note,
the Company  shall pay to the Holder an amount equal to the product  obtained by
multiplying the Conversion  Price by the fraction of a share not issued pursuant
to the previous sentence.  In addition,  the Company shall pay to the Holder any
interest  accrued  on the amount  converted  and on the amount to be paid to the
Company pursuant to the previous sentence.  Upon conversion of this Note in full
and the payment of the amounts  specified  in this  Section  10(d),  the Company
shall  be  forever   released  and  discharged  from  all  its  obligations  and
liabilities under this Note.

      11.   ISSUANCES  OF  WARRANTS.  In the  event  that the  Holder  elects to
convert all or any portion of this Note into shares of RG America's Common Stock
pursuant to Section 10(a) hereof,  or in the event the Company elects to convert
all or any  portion  of this  Note  into  shares of RG  America's  Common  Stock
pursuant  to Section  10(b)  hereof the  Company  hereby  agrees to issue to the
Holder warrants to purchase shares of RG America's  Common Stock (the "Warrant")
as set forth below:

            (a) No Warrant shall be issued if the aggregate  principal amount of
this  Note to be  converted  together  with any  principal  amount  of this Note
previously converted is less than $100,001. This threshold amount applies to the
aggregate  of all  individual  Holders of Notes.  A Holder of $25,000 or more is
entitled to warrants, in accordance with the provisions of Section 11(b) hereof,
if the aggregate of all Notes is more than $100,001.

      t 12 (b) If the  aggregate  principal  amount of this Note to be converted
together with any  principal  amount of this Note  previously  converted is more
than  $100,001,  the  Company  shall  issue to the  Holder  concurrent  with the
issuance  of the  shares of RG  America's  Common  Stock to be issued  upon such
conversion,  a Warrant to purchase up to 1,500,000 shares of RG America's Common
Stock.  The number of shares  subject to the first Warrant to be issued shall be
determined by multiplying  1.05 times a fraction,  the numerator of which is the
amount by which the aggregate  principal amount to be converted exceeds $100,001
and the denominator of which is a minimum of $0.60. The number of shares subject
to any subsequent  Warrant to be issued shall be determined by multiplying  1.05
times a fraction, the numerator of which is the aggregate principal amount to be
converted and the denominator of which is a minimum $0.60.

            (c) Each  Warrant  to be  issued  by the  Company  pursuant  to this
Section 11 shall have an exercise price of a minimum of $ 0.60 per share, a term
of three (3) years and such other  terms as are set forth in the form of Warrant
attached hereto as Exhibit A.

            (d) The  shares  of RG  America's  Common  Stock  issuable  upon the
exercise of any Warrants issued pursuant to this Section 11 shall be entitled to
"piggy back" registration rights.

                                       16
<PAGE>

      12.   CONVERSION PRICE ADJUSTMENTS.

            (a) Adjustments for Stock Splits and Subdivisions.  In the event the
Company  should  at any time or from  time to time  after  the date of  issuance
hereof fix a record date for the  effectuation  of a split or subdivision of the
outstanding  shares of RG America's Common Stock or the determination of holders
of Series A  Preferred  entitled  to  receive a dividend  or other  distribution
payable in additional shares of RG America's Common Stock or other securities or
rights  convertible into, or entitling the holder thereof to receive directly or
indirectly, additional shares of RG America's Common Stock (hereinafter referred
to  as  "RG  America's  Common  Stock  Equivalents")   without  payment  of  any
consideration by such holder for the additional  shares of Series A Preferred or
the RG America's Common Stock Equivalents (including the additional shares of RG
America's Common Stock issuable upon conversion or exercise  thereof),  then, as
of such  record  date  (or the  date of such  dividend  distribution,  split  or
subdivision if no record date is fixed), the Conversion Price of this Note shall
be  appropriately  decreased so that the number of shares of RG America's Common
Stock issuable upon  conversion of this Note shall be increased in proportion to
such increase of outstanding shares.

            (b) Adjustments for Reverse Stock Splits. If the number of shares of
RG  America's  Common  Stock  outstanding  at any time after the date  hereof is
decreased by a  combination  of the  outstanding  shares of RG America's  Common
Stock, then, following the record date of such combination, the Conversion Price
for this Note shall be  appropriately  increased so that the number of shares of
RG America's  Common Stock  issuable on conversion  hereof shall be decreased in
proportion to such decrease in outstanding shares.

            (c)   Notices of Record Date, etc. In the event of:

                  (i) Any taking by the  Company  of a record of the  holders of
any class of  securities  of the  Company  for the  purpose of  determining  the
holders  thereof who are  entitled to receive  any  dividend  (other than a cash
dividend payable out of earned surplus at the same rate as that of the last such
cash dividend theretofore paid) or other distribution, or any right to subscribe
for, purchase or otherwise acquire any shares of stock of any class or any other
securities or property, or to receive any other right; or

                  (ii)  Any  capital   reorganization   of  the   Company,   any
reclassification  or recapitalization of the capital stock of the Company or any
transfer of all or  substantially  all of the assets of the Company to any other
Person or any consolidation or merger involving the Company; or

                  (iii) Any voluntary or involuntary dissolution, liquidation or
windingup of the Company,  the Company will mail to Holder of this Note at least
ten (10) days prior to the earliest date specified  therein, a notice specifying
(A) the date on which any such  record is to be taken  for the  purpose  of such
dividend,  distribution or right, and the amount and character of such dividend,
distribution or right;

                                       17
<PAGE>

and (B) the date on which any such reorganization,  reclassification,  transfer,
consolidation,  merger,  dissolution,  liquidation  or winding-up is expected to
become  effective and the record date for determining  stockholders  entitled to
vote thereon.

            (d) Reservation of Stock Issuable Upon Conversion. The Company shall
at all times  reserve and keep  available  out of its  authorized  but  unissued
shares of RG America's  Common  Stock  solely for the purpose of  effecting  the
conversion  of this Note such number of its shares of RG America's  Common Stock
(and  shares of its Common  Stock for  issuance on  conversion  of such Series A
Preferred) as shall from time to time be sufficient to effect the  conversion of
the Note; and if at any time the number of authorized but unissued  shares of RG
America's  Common  Stock  (and  shares  of its  Common  Stock  for  issuance  on
conversion of such RG America's  Common Stock) shall not be sufficient to effect
the conversion of the entire outstanding  principal amount of this Note, without
limitation  of such other  remedies as shall be  available to the holder of this
Note,  the Company  will use its best efforts to take such  corporate  action as
may, in the opinion of counsel,  be  necessary to increase  its  authorized  but
unissued shares of RG America's Common Stock (and shares of its Common Stock for
issuance on  conversion  of such RG  America's  Common  Stock) to such number of
shares as shall be sufficient for such purposes.

      13.   SUCCESSORS  AND  ASSIGNS.  Neither  this Note nor any of the rights,
interests  or  obligations  hereunder  may be  assigned,  by operation of law or
otherwise, in whole or in part, by the Company without the prior written consent
of the Holder or by the Holder without the prior written consent of the Company.
Subject to the foregoing and the  restrictions on transfer  described in Section
15 below,  the rights and  obligations  of the Company  and the Holder  shall be
binding upon and benefit the  successors,  assigns,  heirs,  administrators  and
transferees of the parties.

      14.   WAIVER AND  AMENDMENT.  Any  provision  of this Note may be amended,
waived or modified upon the written consent of the Company and the Holder.

      15.   TRANSFER OF THIS NOTE OR SECURITIES  ISSUABLE ON CONVERSION  HEREOF.
With  respect  to any  offer,  sale or  other  disposition  of this  Note or any
securities  into which this Note may be converted,  the Holder will give written
notice to the Company  prior  thereto,  describing  briefly the manner  thereof,
together with a written opinion of the Holder's counsel, to the effect that such
offer,  sale or other  distribution  may be  effected  without  registration  or
qualification  under any  federal  or state law then in  effect.  Promptly  upon
receiving  such  written  notice  and  reasonably  satisfactory  opinion,  if so
requested  and subject to Section 13, the Company,  as promptly as  practicable,
shall  notify the Holder that the Holder may sell or  otherwise  dispose of this
Note  or such  securities,  all in  accordance  with  the  terms  of the  notice
delivered  to the Company.  If a  determination  has been made  pursuant to this
Section  15 that  the  opinion  of  counsel  for the  Holder  is not  reasonably
satisfactory  to the Company,  the Company  shall so notify the Holder  promptly
after such  determination  has been made.  Each Note thus  transferred  and each
certificate  representing the securities thus transferred shall bear a legend as
to the applicable restrictions on transferability in order

                                       18
<PAGE>

to ensure  compliance  with the Act,  unless in the  opinion of counsel  for the
Company such legend is not required in order to ensure  compliance with the Act.
The  Company  may issue stop  transfer  instructions  to its  transfer  agent in
connection with such restrictions.

      16.   NOTICES.  Any  notice,  request or other  communication  required or
permitted  hereunder  shall be in writing  and shall be deemed to have been duly
given if personally delivered or mailed by registered or certified mail, postage
prepaid, or by recognized overnight courier or personal delivery,  addressed (i)
if to the  Holder,  at  such  Holder's  address  set  forth  at the  end of this
Agreement,  or at such other  address as such Holder  shall have  furnished  the
Company in writing,  or (ii) if to the Company,  at its address set forth at the
end of this  Agreement,  or at such  other  address  as the  Company  shall have
furnished  to the  Holder in  writing.  Any party  hereto may by notice so given
change its address for future notice  hereunder.  Notice shall  conclusively  be
deemed to have been given when received.

      17.   PAYMENT.  Payment  shall  be made in  lawful  tender  of the  United
States.

      18.   DEFAULT RATE; USURY.  During any period in which an Event of Default
has occurred  and is  continuing,  the Company  shall pay interest on the unpaid
principal  balance  hereof  at a rate per  annum  equal  to the  rate  otherwise
applicable hereunder plus two percent (2%). In the event any interest is paid on
this Note which is deemed to be in excess of the then legal maximum  rate,  then
that portion of the  interest  payment  representing  an amount in excess of the
then  legal  maximum  rate shall be deemed a payment of  principal  and  applied
against the principal of this Note.

      19.   EXPENSES; WAIVERS. If action is instituted to collect this Note, the
Company promises to pay all costs and expenses,  including,  without limitation,
reasonable  attorneys' fees and costs,  incurred in connection with such action.
The Company hereby waives notice of default,  presentment or demand for payment,
protest or notice of  nonpayment  or dishonor  and all other  notices or demands
relative to this instrument. The Company shall pay on demand all reasonable fees
and expenses, including reasonable attorneys' fees and expenses, incurred by the
Holder with respect to the  enforcement  or attempted  enforcement of any of the
obligations of the Company to the Holder under the  Transaction  Documents or in
preserving  any  of  the  Holder's  rights  and  remedies  (including,   without
limitation, all such fees and expenses incurred in connection with any "workout"
or  restructuring   affecting  the  Transaction  Documents  or  the  obligations
thereunder or any bankruptcy or similar  proceeding  involving Company or any of
its Subsidiaries).

      20.   FINANCING  STATEMENTS.  The  Company  agrees  to  execute  all  UCC1
financing  statements and other documents and  instruments  which the Holder may
reasonably request to perfect its security interest in the collateral  described
in the Security Agreement.

                                       19
<PAGE>

      21.   REPLACEMENT NOTE. Upon receipt by the Company of evidence reasonably
satisfactory  to it of the  ownership  of and the loss,  theft,  destruction  or
mutilation  of any Note and (a) in the case of loss,  theft or  destruction,  of
indemnity reasonably satisfactory to it; or (b) in the case of mutilation,  upon
surrender thereof; the Company, at its expense, will execute and deliver in lieu
thereof a new Note  executed in the same manner as the Note being  replaced,  in
the same principal  amount as the unpaid principal amount of such Note and dated
the date to which  interest shall have been paid on such Note or, if no interest
shall have yet been so paid, dated the date of such Note.

      22.   GOVERNING  LAW.  This  Note  and all  actions  arising  out of or in
connection  with this Note shall be governed by and construed in accordance with
the  laws  of the  State  of  Texas,  without  regard  to the  conflicts  of law
provisions of the State of Texas or of any other state.

      IN WITNESS  WHEREOF,  the  Company has caused this Note to be issued as of
the date first written above.

By:______________________________          Amount:______________________________

Name:____________________________

Address:_________________________

        _________________________

Accepted and Agreed to, as of _______________________, 2004:

_________________________________
By:

Its:_____________________________

                                       20

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