PREFERRED STOCK PURCHASE AGREEMENT
Exhibit
10.2
This
Preferred Stock Purchase Agreement ("Agreement"), is made and
entered into as of the 30th day of
April 2009 by and between RINEON GROUP INC. (formerly, Jupiter Resources,
Inc.), a corporation organized under the laws of the State of Nevada (“Rineon”); INTIGY ABSOLUTE RETURN LTD., a
corporation organized under the laws of the British Virgin Islands ("Intigy”); and XXXXX XXXXXX XXXXX (“Xxxxx” or the “Rineon Principal
Stockholder”). Rineon,
Intigy and the Rineon Principal Stockholder
are hereinafter sometimes referred to individually as a “Party” and collectively as the
“Parties.”
RECITALS:
A. Rineon desires to sell to
Intigy, and Intigy is willing, upon the
terms and subject to the conditions hereinafter set forth, to purchase from
Rineon all of the 36,000
shares of Series A Preferred
Stock authorized for issuance pursuant to the Certificate of
Designations.
B. It
is the intention of the parties hereto that the purchase of the Series A
Preferred Stock shall qualify as a transaction in securities exempt from
registration or qualification under the Securities Act of 1933, as amended, and
under the applicable securities laws of each state or jurisdiction where Intigy
resides.
C. The
board of directors of each of Rineon and Intigy and the Rineon Principal Stockholder
each deem it to be in the best interests of Rineon and
Intigy and their
respective Affiliates to consummate the sale and purchase of the shares of
Series A Preferred Stock upon the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in
consideration of the mutual covenants, agreements, representations and
warranties contained in this Agreement, the parties hereto agree as
follows:
DEFINITIONS
As used
in this Agreement, the following terms shall have the meanings set forth
below:
“Applicable Law” means any
domestic or foreign law, statute, regulation, rule, policy, guideline or
ordinance applicable to the businesses of the Parties, the Share Exchange and/or
the Parties.
“Affiliate” means any one or
more Person controlling, controlled by or under common control with any other
Person or their affiliate.
“Amalphis” means Amalphis Group Inc., a British
Virgin Islands corporation.
“Amalphis Group” shall have the
meaning set forth in Section 2.3 of the
NatProv Purchase Agreement.
“Business Day” shall mean any
day, excluding Saturday, Sunday and any other day on which national banks
located in New York, New York shall be closed for business.
“Certificate of Designations”
shall mean the certificate of designations of the relative rights, privileges
and preferences of the 36,000 shares of Series A Preferred Stock in the form of
Exhibit A annexed hereto
and made a part hereof.
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“Closing Date” shall mean the
date upon which the transactions contemplated by this Agreement and the purchase
and sale of the Series A Preferred Stock shall be consummated.
“Dollar” and “$” means lawful money of the
United States of America.
“Exchange Act” means the
Securities Exchange Act of 1934, as amended.
“Financial Statements” shall
have the meaning as is defined in Section 2.4 of this
Agreement.
“GAAP” means generally accepted
accounting principles in the United States of America as promulgated by the
American Institute of Certified Public Accountants and the Financial Accounting
Standards Board or any successor Institutes concerning the treatment of any
accounting matter.
“Intigy” means Intigy Absolute Return Ltd., a
British Virgin Islands corporation.
“Knowledge” means the knowledge
after reasonable inquiry.
“Lien” means, with respect to
any property or asset, any mortgage, lien, pledge, charge, security interest,
encumbrance or other adverse claim of any kind in respect of such property or
asset.
“Material Adverse Effect” with
respect to any entity or group of entities means any event, change or effect
that has or would have a materially adverse effect on the financial condition,
business or results of operations of such entity or group of entities, taken as
a consolidated whole.
“NatProv” means NatProv Holdings Inc., a
British Virgin Islands corporation.
“NatProv Purchase Agreement”
mean the stock purchase agreement, dated April _, 2009, between Rineon, NatProv,
and the Rineon Principal Stockholder, in the form of Exhibit
B annexed hereto and made a part hereof.
“National Securities Exchange”
means the collective reference to the New York Stock Exchange, the NYSE
Alternext Exchange, the Nadaq Stock Exchange, the FINRA OTC Bulletin Board or
any other recognized national securities exchange in the United
States.
“Person” means any individual,
corporation, partnership, trust or unincorporated organization or a government
or any agency or political subdivision thereof.
“Purchase Price” shall mean
Thirty Six Million United States Dollars (U.S. $36,000,000).
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“Rineon” shall mean the
collective reference to (a) Jupiter Resources Inc., a Nevada corporation, (b)
subsequent to consummation of the Rineon Name Change on April 30, 2009, RINEON GROUP INC., a Nevada
corporation, and (c) upon filing of the Rineon Reincorporation Documents with
the appropriate recording authorities of the British Virgin Islands, RINEON GROUP INC., a British
Virgin Islands corporation.
“Rineon Common Stock” shall
mean the 75,000,000 shares of common stock of Rineon, $0.001 par value per
share, that are authorized for issuance pursuant to the certificate of
incorporation of Rineon.
“Rineon Name Change” shall mean
the change of the corporate name of Rineon to Rineon Group, Inc., pursuant
to the certificate of amendment to the certificate of incorporation of Rineon
filed with the Secretary of State of the State of Nevada on April 30, 2009 and
prior to the of execution of this Agreement.
“Rineon Preferred Stock” means
the 10,000,000 shares of preferred stock of Rineon, $0.001 par value per share,
that are authorized for issuance pursuant to the certificate of incorporation of
Rineon, and containing such rights, privileges and designations as the board of
directors of Rineon may, from time to time determine.
“Rineon Reincorporation
Documents” shall mean the documents annexed hereto as Exhibit
C and made a part hereof which are required to reincorporate and
redomicile Rineon as a corporation organized under the laws of the British
Virgin Islands.
“Sale of
Control” means the sale or transfer of all or substantially
all of the shares of capital stock or assets of Rineon and its consolidated
Subsidiaries, whether through merger, consolidation, asset sale, tender offer or
like combination or consolidation, to any Person who is not an
Affiliate of Rineon immediately prior to such Sale of Control.
“Series A Preferred Stock”
shall mean the 36,000 shares of Series A convertible preferred stock of Rineon,
$1,000 stated value per share, authorized for issuance pursuant to the
Certificate of Designation.
“Stock Redemption Agreement”
shall mean that agreement, dated of even date herewith, between Rineon and the
Rineon Principal Stockholder, annexed hereto as Exhibit
D and made a part hereof, pursuant to which, inter alia, on or before the
Closing Date the Rineon Principal Stockholder shall transfer back to Rineon for
cancellation all of the shares of Rineon Common Stock owned of record and
beneficially by the Rineon Principal Stockholder, in exchange for the
consideration set forth in such Stock Redemption Agreement.
“Subject Shares” shall have the
meaning as is defined in the NatProv Purchase Agreement.
“Subsidiary” of any Person
means another Person, an amount of the voting securities, other voting ownership
or voting partnership interests of which is sufficient to elect at least a
majority of its Board of Directors or other governing body (or, if there are no
such voting interests, 50% or more of the equity interests of which) is owned
directly or indirectly by such first Person.
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“Tax” (and, with correlative
meaning, “Taxes” and
“Taxable”)
means:
(i) any
income, alternative or add-on minimum tax, gross receipts tax, sales tax, use
tax, ad valorem tax, transfer tax, franchise tax, profits tax, license tax,
withholding tax, payroll tax, employment tax, excise tax, severance tax, stamp
tax, occupation tax, property tax, environmental or windfall profit tax, custom,
duty or other tax, impost, levy, governmental fee or other like assessment or
charge of any kind whatsoever together with any interest or any penalty,
addition to tax or additional amount imposed with respect thereto by any
governmental or Tax authority responsible for the imposition of any such tax
(domestic or foreign), and
(ii) any
liability for the payment of any amounts of the type described in clause (i)
above as a result of being a member of an affiliated, consolidated, combined or
unitary group for any Taxable period, and
(iii) any
liability for the payment of any amounts of the type described in clauses (i) or
(ii) above as a result of any express or implied obligation to indemnify any
other person.
“Tax Return” means any return,
declaration, form, claim for refund or information return or statement relating
to Taxes, including any schedule or attachment thereto, and including any
amendment thereof.
“Trading Days” means
any day on which the New York Stock Exchange or other National Securities
Exchange on which Rineon Common Stock trades is open for trading.
“VWAP” means the
volume weighted average price per share of Rineon Common Stock as reported by
Bloomberg Reporting Service or other recognized stock market price reporting
service.
SECTION
1. PURCHASE AND SALE OF SERIES
A PREFERRED STOCK; OFFICERS AND DIRECTORS
1.1 The Series A Preferred
Stock.
(a) On
the Closing Date and subject to and upon the terms and conditions of this
Agreement, Rineon shall sell, assign, transfer and exchange (collectively,
“Transfer”) to Intigy,
all, and not less than all, of the 36,000 shares of the Series A Preferred Stock
authorized for issuance pursuant to the Certificate of Designation.
(b) On
the Closing Date, and in exchange for the Transfer to it of the aforesaid shares
of Series A Preferred Stock, Intigy shall pay to Rineon the $36,000,000 Purchase
Price. Such Purchase Price shall be paid by wire transfer of
immediately available funds to a bank account designated by Rineon prior to the
Closing Date. On the Closing Date and subject to the simultaneous
closing of the transactions contemplated by the NatProv Purchase Agreement, as
provided herein, Rineon shall direct Intigy to wire the Purchase Price for the
Series A Preferred Stock directly to NatProv in payment of the purchase price
for the Subject Shares referred to in the NatProv Purchase Agreement.
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(c) As
set forth in the Certificate of Designations, the 36,000 shares of Series A
Preferred Stock:
(i) shall
have a par value of $0.001 per share;
(ii) shall
have a stated or liquidation value of $1,000 per share (the “Stated Value”);
(iii) shall
be senior upon liquidation or a Sale of Control to all other classes of
preferred stock of Rineon Common Stock now existing or hereafter
created;
(iv) in
the event of any “Sale of Control” (as defined in the Certificate of
Designation), in addition to the right of the holder(s) of the Series A
Preferred Stock to receive a preferential payment in respect of such Series A
Preferred Stock equal to product of (A) the $1,000 per share Stated Value, and
(B) the number of Series A Preferred Stock then owned, the holder(s) of the
Series A Preferred Stock shall be entitled to participate with the holders of
Rineon Common Stock in receipt of the consideration payable upon such Sale of
Control to the extent 0.000099% of such consideration for each one (1) Exchange
Share then owned by the holder(s), or an aggregate of 4.95% of such
consideration as to all 50,000 Series A Preferred Stock;
(v)
shall not pay a fixed dividend, but shall entitle the holder(s) to
participate equally with the holders of Rineon Common Stock in connection with
any cash or stock dividends or distributions;
(v) shall
be convertible at any time or from time to time into shares of Rineon Common
Stock, at a conversion price per shares equal to 100% of the VWAP per share of
Rineon Common Stock, as traded on any National Securities Exchange, for the
twenty (20) Trading Days immediately prior to the date notice of conversion is
given by the holders; provided,
however, that the maximum number of shares of Rineon Common Stock that
may be owned of record or beneficially at any point in time by any one holder of
the Series A Preferred Stock (whether upon conversion(s) of Series A Preferred
Stock, open market purchases, other purchases of Rineon Common Stock, or any
combination of the foregoing) shall not exceed an aggregate of 4.95% of the
outstanding shares of Rineon Common Stock; and
(vi) shall
not be subject to mandatory or optional redemption without the prior written
consent or approval of both Rineon and the holder(s) of the Series A Preferred
Stock.
The
foregoing summary description of the Series A Preferred Stock is for
informational purposes only and is qualified in its entirety by the terms and
conditions of the Certificate of Designation annexed as Exhibit
A hereto; which shall govern in all respects the relative rights,
preferences and privileges of the Series A Preferred Stock.
1.2 Exemption from
Registration. The Parties intend that the Series A Preferred
Stock to be issued by Rineon to Intigy shall be exempt from the registration
requirements of the Securities Act pursuant to Section 4(2) of the Securities
Act and the rules and regulations promulgated thereunder.
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1.4 Closing.
The
closing of the Share Exchange (the “Closing”) will take place at
the offices of Xxxxxxx Xxxx LLP, counsel to Intigy, at its office in New York,
New York, within ten (10) days following the delivery of satisfaction or waiver
of the conditions precedent set forth in Section 4 or at such other date as
Rineon and Intigy shall agree (the “Closing Date”), but in no
event shall the Closing Date occur later than May 14, 2009, unless such date
shall be extended by mutual agreement of Rineon and Intigy.
1.5 Certificate of Designations;
Board of Directors; Stock Redemption. On or prior to the
Closing Date:
(a) The
Certificate of Designation of Rineon shall have been filed with Secretary of
State of the State of Nevada and with the appropriate recording authorities of
the British Virgin Islands.
(b) The
existing director(s) of Rineon shall tender their resignations and the board of
directors of Rineon upon and subsequent to the consummation of the transactions
contemplated by the NatProv Purchase Agreement the entire board of directors of
Rineon shall be Xxx xx Xxxx, Xxxxxx Xxxxxxx, Xxxxx Laslop and Tore Nag, and/or
such other Persons as shall be acceptable to Intigy. Such initial
members of the board of directors shall serve until the earlier of their death,
resignation or removal or until the next annual meeting of the stockholders of
Rineon, when their respective successors are duly elected and qualified. The
officers of Rineon subsequent to the Closing Date under this Agreement and the
consummation of the transactions contemplated by the NatProv Purchase Agreement
and shall be appointed by the board of directors of Rineon on the Closing Date
and shall be Persons acceptable to Intigy.
(c) All
of the transactions contemplated by the Stock Redemption Agreement
shall have been consummated.
(d) All
of the Rineon Reincorporation Documents shall have been duly executed and
approved by British Virgin Islands counsel to Rineon.
1.6 Restrictions On
Resale
The
Series A Preferred Stock and the shares of Rineon Common Stock issuable upon
conversion of the Series A Preferred Stock will not be registered under the
Securities Act, or the securities laws of any state, and cannot be transferred,
hypothecated, sold or otherwise disposed of until: (i) a registration statement
with respect to such securities is declared effective under the Securities Act,
or (ii) Rineon receives an opinion of counsel of the stockholder, reasonably
satisfactory to counsel for Rineon, that an exemption from the registration
requirements of the Securities Act is available.
The
certificates representing the Series A Preferred Stock shall contain a legend
substantially as follows:
“THE
SECURITIES WHICH ARE REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
HYPOTHECATED OR OTHERWISE DISPOSED OF UNTIL A REGISTRATION STATEMENT WITH
RESPECT THERETO IS DECLARED EFFECTIVE UNDER SUCH ACT, OR RINEON GROUP, INC.
(FORMERLY, JUPITER RESOURCES, INC.) RECEIVES AN OPINION OF COUNSEL FOR THE
HOLDER REASONABLY SATISFACTORY TO COUNSEL FOR SUCH CORPORATION THAT AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT IS AVAILABLE.”
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SECTION
2. REPRESENTATIONS AND WARRANTIES OF INTIGY.
Intigy hereby represents and
warrants to Rineon as
follows:
2.1 Organization and Good
Standing. Intigy is a corporation duly organized and validly
existing under the laws of the British Virgin Islands.
2.2 Authority. Intigy
has the corporate power to enter into this Agreement and to perform its
obligations hereunder. The execution and delivery of this Agreement
and the consummation of the transaction contemplated hereby have been duly
authorized by the Board of Directors of Intigy. The execution and
performance of this Agreement will not constitute a material breach of any
agreement, indenture, mortgage, license or other instrument or document to which
Intigy is a party and will not violate any judgment, decree, order, writ, rule,
statute, or regulation applicable to Intigy or its properties. The
execution and performance of this Agreement will not violate or conflict with
any provision of the Articles of Incorporation or by-laws of
Intigy.
2.3 Investment
Purpose. As of the date hereof and the Closing Date Intigy is
purchasing the Series A Preferred Stock and the shares of Rineon Common Stock
issuable upon conversion of the Series A Preferred Stock (the “Conversion Shares” and
collectively with the Series A Preferred Stock, the “Securities”) for its own
account and not with a present view towards the public sale or distribution
thereof, except pursuant to sales registered or exempted from registration under
the Securities Act; provided,
however, that by making the representations herein, Intigy does not agree
to hold any of the Securities for any minimum or other specific term and
reserves the right to dispose of the Securities at any time in accordance with
or pursuant to a registration statement or an exemption under the Securities
Act.
2.4 Accredited Investor / Non
U.S. Person Status. Intigy is either (i) an “accredited
investor” as that term is defined in Rule 501(a) of Regulation D under the
Securities Act (an “Accredited Investor”); or (ii) is not a U.S.
Person (as defined for purposes of Regulation S) and Intigy is not acquiring the
Securities for the account or benefit of a U. S. Person. Further, if purchased
pursuant to Regulation S, each Intigy acknowledges that the Securities have not
been registered under the Securities Act and may not be offered or sold in the
United States or to U.S. Persons (other than distributors, as defined in Rule
902 of the Securities Act) unless the securities are registered under the
Securities Act, or an exemption from the registration requirements of the
Securities Act is available.
2.5 Reliance on
Exemptions. Intigy understands that the Securities are being
offered and sold to it in reliance upon specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying upon the truth and accuracy of, and Intigy’s
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of Intigy set forth herein in order to determine the
availability of such exemptions and the eligibility of Intigy to acquire the
Securities.
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2.6 Information. Intigy
and its advisors, if any, have had the opportunity to ask questions of
management of the Company and its Subsidiaries and have been furnished with all
information relating to the business, finances and operations of Rineon and the
Amalphis Group and information relating to the offer and sale of the Securities
which have been requested by Intigy or its advisors. Neither such
inquiries nor any other due diligence investigation conducted by Intigy or any
of its advisors or representatives shall modify, amend or affect Intigy’s right
to rely on the representations and warranties of NatProv contained in the
NatProv Purchase Agreement. Intigy understands that its investment in
the Securities involves a significant degree of risk. Intigy further
represents to the Rineon that Intigy’s decision to enter into this Agreement has
been based solely on the independent evaluation of Intigy and the
representations and warranties of NatProv contained in the NatProv Purchase
Agreement.
2.7 Governmental
Review. Intigy understands that no United States federal or
state agency or any other government or governmental agency has passed upon or
made any recommendation or endorsement of the Securities.
2.8 Transfer or
Resale. Intigy understands the sale or re-sale of the
Securities has not been and is not being registered under the Securities Act or
any applicable state securities laws, and the Securities may not be transferred
unless (i) the Securities are sold pursuant to an effective registration
statement under the Securities Act, (ii) in accordance with the provisions of
Regulation S, (iii) Intigy shall have delivered to the Company an opinion
of counsel that shall be in form, substance and scope customary for opinions of
counsel in comparable transactions to the effect that the Securities to be sold
or transferred may be sold or transferred pursuant to an exemption from such
registration, which opinion shall be reasonably acceptable to the Company,
(iv) the Securities are sold or transferred to an “Affiliate” (as defined
in Rule 144 promulgated under the Securities Act (or a successor rule) (“Rule
144”) of Intigy who agrees to sell or otherwise transfer the Securities
only in accordance with this Section 2(f) and who is an Accredited Investor,
(v) the Securities are sold pursuant to Rule 144, or (vi) the
Securities are sold pursuant to Regulation D under the Securities Act (or a
successor rule) (“Regulation
D”). Each Investor acknowledges that hedging transactions
involving the Securities may not be conducted unless in compliance with the
Securities Act. Notwithstanding the foregoing or anything else
contained herein to the contrary, the Securities may be pledged as collateral in
connection with a bona fide margin account or other lending
arrangement.
2.9 Full
Disclosure. No representation or warranty by Intigy in this
Agreement or in any document or schedule to be delivered by them pursuant
hereto, and no written statement, certificate or instrument furnished or to be
furnished by Intigy pursuant hereto or in connection with the negotiation,
execution or performance of this Agreement contains or will contain any untrue
statement of a material fact or omits or will omit to state any fact necessary
to make any statement herein or therein not materially misleading or necessary
to a complete and correct presentation of all material aspects of the business
of Intigy.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF
RINEON.
3.1 Organization and Good
Standing. Rineon is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Nevada. Rineon has the corporate power to own its own property and to
carry on its business as now being conducted and is duly qualified to do
business in any jurisdiction where so required except where the failure to so
qualify would have no material negative impact.
3.2 Authority. The
Rineon Principal Stockholder has approved the execution delivery and performance
of this Agreement by Rineon. The Rineon Principal Stockholder
individually has the power and authority, and Rineon has the corporate power to
enter into this Agreement and to perform its obligations hereunder, including
payment of the Purchase Price. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized by the Board of Directors and stockholders of Rineon as required
by British Virgin Islands and Nevada law. The execution and
performance of this Agreement will not constitute a material breach of any
agreement, indenture, mortgage, license or other instrument or document to which
Rineon is a party and will not violate any judgment, decree, order, writ, rule,
statute, or regulation applicable to Rineon or its properties. The
execution and performance of this Agreement will not violate or conflict with
any provision of the respective Certificate of Incorporation or by-laws of
Rineon.
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3.3 Rineon
Capitalization. As of the date of this Agreement, Rineon is
authorized to issue (a) 75,000,000 shares of Rineon Common Stock, $0.001 par
value per share, and (b) 10,000,000 shares of Rineon Preferred Stock. An
aggregate of 7,000,000 shares of Rineon Common Stock and no shares of Rineon
Preferred Stock are issued and outstanding. Except as contemplated by
this Agreement, no shares of Rineon Common Stock or Rineon Preferred Stock are
reserved for issuance pursuant to any agreement, convertible securities, options
or warrants. The record and beneficial owners of the 7,000,000
issued and outstanding shares of Rineon Common Stock as at April 15, 2009 are
set forth on Schedule
3.3 of this Agreement.
3.4 Rineon 2008 Balance Sheet;
Assets and Liabilities.
(a) The
Form 10KSB/A of Rineon for the fiscal year ended May 31, 2008 includes the
audited balance sheet, statement of operations and statement of cash flows of
Rineon as at May 31, 2008 and for the fiscal year then ended (the “Rineon 2008 Audited Financial
Statements”). The Form 10QSB/A of Rineon for the quarters
ended August 31, 2008, November 30, 2008 and February 28, 2009, includes the
unaudited balance sheet, statement of operations and statement of cash flows of
Rineon as at August 31, 2008, November 30, 2008 and February 28, 2009 and for
the respective three, six and nine months then ended (the “Rineon Unaudited Financial
Statements”). Except as set forth on the Rineon Balance Sheet
as at February 28, 2009 or otherwise disclosed on Schedule 3.4, as at
February 28, 2009 and for all periods subsequent thereto, Rineon has no other
assets and has incurred no other liabilities, debts or obligations, whether
fixed, contingent or otherwise required to be set forth on a balance sheet
prepared in accordance with GAAP. The books of account and other
financial records of Rineon are in all respects complete and correct in all
material respects and are maintained in accordance with good business and
accounting practices.
(b) Rineon
has no operating assets or liabilities, and has not conducted any trade or
business activities whatsoever, other than as set forth on Schedule 3.4 annexed
hereto.
3.5 No Material Adverse
Changes. Since February 28, 2009:
(a) there
has not been any material adverse changes in the financial position of Rineon
except changes arising in the ordinary course of business, which changes will in
no event materially and adversely affect the financial position of Rineon, and
will be consistent with the representations made by Rineon
hereunder.
(b) there
has not been any damage, destruction or loss materially affecting the assets,
prospective business, operations or condition (financial or otherwise) of Rineon
whether or not covered by insurance;
(c) there
has not been any declaration setting aside or payment of any dividend or
distribution with respect to any redemption or repurchase of Rineon capital
stock;
(d) there
has not been any sale of an asset (other than in the ordinary course of
business) or any mortgage pledge by Rineon of any properties or assets;
or
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(e) there
has not been adoption or modification of any pension, profit sharing,
retirement, stock bonus, stock option or similar plan or
arrangement.
(f) there
has not been any loan or advance to any shareholder, officer, director,
employee, consultant, agent or other representative or made any other loan or
advance otherwise than in the ordinary course of business;
(g) there
has not been any increase in the annual level of compensation of any executive
employee of Rineon;
(h) except
in the ordinary course of business, Rineon has not entered into or modified any
contract, agreement or transaction; and
(i) Rineon
has not issued any equity securities or rights to acquire equity
securities.
3.6 Taxes. Rineon
has timely filed all material tax, governmental and/or related forms and reports
(or extensions thereof) due or required to be filed and has paid or made
adequate provisions for all taxes or assessments which have become due as of the
Closing Date, and there are no deficiencies outstanding.
3.7 Compliance with
Laws. Rineon has complied with all federal, state, county and
local laws, ordinances, regulations, inspections, orders, judgments,
injunctions, awards or decrees applicable to it or its business, which, if not
complied with, would materially and adversely affect the business of Rineon or
the trading market for the Rineon Shares and specifically, and Rineon has
complied with provisions for registration under the Securities Act of 1933 and
all applicable blue sky laws in connection with its public stock offering and
there are no outstanding, pending or threatened stop orders or other actions or
investigations relating thereto.
3.8 Actions and
Proceedings. Rineon is not a party to any material pending
litigation or, to its knowledge, any governmental proceedings are threatened
against Rineon.
3.9 Periodic
Reports. Rineon is current in the filing of all forms or
reports with the Securities and Exchange Commission (“SEC”), and has been a
reporting company under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”). All such reports and statements filed by Rineon with
the SEC (collectively, “SEC
Reports”) did not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstance under which they were made, not
misleading.
3.10 Disclosure. Rineon
has (and at the Closing it will have) disclosed in writing to NatProv all
events, conditions and facts materially affecting the business, financial
conditions or results of operation of Rineon all of which have been set forth
herein. Rineon has not now and will not have, at the Closing,
withheld disclosure of any such events, conditions, and facts which they have
knowledge of or have reasonable grounds to know may exist.
3.11 Access to
Records. The corporate financial records, minute books, and
other documents and records of Rineon have been made available to NatProv prior
to the Closing hereof.
3.12 No
Breach. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby will
not:
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(a) violate
any provision of the Articles of Incorporation or By-Laws of
Rineon;
(b) violate,
conflict with or result in the breach of any of the terms of, result in a
material modification of, otherwise give any other contracting party the right
to terminate, or constitute (or with notice or lapse of time or both constitute)
a default under, any contract or other agreement to which Rineon is a party or
by or to which it or any of its assets or properties may be bound or
subject;
(c) violate
any order, judgment, injunction, award or decree of any court, arbitrator or
governmental or regulatory body against, or binding upon, Rineon or upon the
securities, properties or business to Rineon; or
(d) violate
any statute, law or regulation of any jurisdiction applicable to the
transactions contemplated herein.
3.14 Brokers or
Finders. No broker's or finder's fee will be payable by Rineon
in connection with the transactions contemplated by this Agreement, nor will any
such fee be incurred as a result of any actions of Rineon.
3.15 NatProv Purchase
Agreement. Rineon, the Rineon Principal Stockholder, and
NatProv have duly executed and delivered the NatProv Purchase Agreement,
pursuant to which immediately prior to the Closing Date under this Agreement,
Rineon shall purchase from NatProv, for $36,000,000 all of the Subject Shares
of Amalphis.
3.16 Authority to Execute and
Perform Agreements. Rineon has the full legal right and power
and all authority and approval required to enter into, execute and deliver this
Agreement and to perform fully its obligations hereunder. This
Agreement has been duly executed and delivered and is the valid and binding
obligation of Rineon enforceable in accordance with its terms, except as may be
limited by bankruptcy, moratorium, insolvency or other similar laws generally
affecting the enforcement of creditors' rights. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby and the performance by Rineon of this Agreement, in accordance with its
respective terms and conditions will not:
(a) require
the approval or consent of any governmental or regulatory body or the approval
or consent of any other person;
(b) conflict
with or result in any breach or violation of any of the terms and conditions of,
or constitute (or with any notice or lapse of time or both would constitute) a
default under, any order, judgment or decree applicable to Rineon, or any
instrument, contract or other agreement to which Rineon is a party or by or to
which Rineon is bound or subject; or
(c) result
in the creation of any lien or other encumbrance on the assets or properties of
Rineon.
3.17 Rineon Name
Change. The Rineon Name Change has been consummated.
3.18 Full
Disclosure. No representation or warranty by Rineon in this
Agreement or in any document or schedule to be delivered by them pursuant
hereto, and no written statement, certificate or instrument furnished or to be
furnished by Rineon pursuant hereto or in connection with the negotiation,
execution or performance of this Agreement contains or will contain any untrue
statement of a material fact or omits or will omit to state any fact necessary
to make any statement herein or therein not materially misleading or necessary
to complete and correct presentation of all material aspects of the business of
Rineon.
-11-
SECTION
4. CONDITIONS PRECEDENT
4.1 Conditions Precedent to the
Obligations of Intigy. All
obligations of Intigy under this Agreement are subject to the fulfillment, prior
to or as of the Closing Date, as indicated below, of each of the following
conditions; any one of which may be waived at Closing by the
Intigy:
(a) The
representations and warranties by or on behalf of Rineon contained in this
Agreement or in any certificate or document delivered pursuant to the provisions
hereof shall be true in all material respects at and as of Closing Date as
though such representations and warranties were made at and as of such
time.
(b) Rineon
shall have performed and complied in all material respects, with all covenants,
agreements, and conditions set forth in, and shall have executed and delivered
all documents required by this Agreement to be performed or complied with or
executed and delivered by it prior to or at the Closing, including, without
limitation, all of the covenants and agreements of Rineon set forth in Section 5.6 of this
Agreement..
(c) On
the Closing Date, an executive officer of Rineon shall have delivered to Intigy
a certificate, duly executed by such Person and certifying, that to the best of
such Person’s knowledge and belief, the representations and warranties of Rineon
set forth in this Agreement are true and correct in all material
respects.
(d) On
or immediately after the Closing, the transactions contemplated by the NatProv
Purchase Agreement shall have been consummated, and Rineon shall have acquired
good and marketable title to all of the Subject Shares of Amalphis.
(e) At
the Closing (i) all of the Rineon Reincorporation Documents and other
certificates and instruments necessary to redomicile and reincorporate Rineon
under the laws of the British Virgin Islands under the name “Rineon Group, Inc.” shall have
been completed and duly executed by all necessary Persons, and approved by
British Virgin Islands counsel to Rineon, and (ii) all required preapprovals, if
any, of any governmental authority or agency of the British Virgin Islands to
consummate the foregoing shall have been obtained.
(f) All
of the transactions contemplated by the Stock Redemption Agreement
shall have been consummated.
(g) On
or immediately after the Closing, Rineon shall be redomiciled and reincorporated
under the laws of the British Virgin Islands under the name Rineon Group,
Inc.
(h) At
the Closing, Intigy shall have received an opinion of Xxxxxx & Xxxxxx LLP
dated as of the Closing to the effect that:
(i) Rineon is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Nevada;
(ii) This
Agreement has been duly authorized, executed and delivered by Rineon and is a
valid and binding obligation of Rineon enforceable in accordance with its
terms;
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(iii) All
of the transactions contemplated by the Stock Redemption Agreement shall have
been consummated.
(iv) Upon
filing of the Rineon Reincorporation Documents with the recording authorities in
the British Virgin Islands, Rineon shall have been duly reincorporated and
redomiciled as a British Virgin Island corporation under the name Rineon Group,
Inc.
(v) The
Rineon Principal Stockholder has approved this Agreement, the NatProv Purchase
Agreement and the transactions contemplated hereby and thereby, and, through its
Board of Directors, Rineon has taken all corporate action under Nevada and
British Virgin Islands law that is necessary for the performance by Rineon of
its obligations under this Agreement; and
(vi) The
Series A Preferred Stock to be issued pursuant to Section 1.1 hereof will be
duly and validly issued, fully paid and non-assessable;
(vii) Rineon
has the corporate power to execute, deliver the Series A Preferred Stock and
perform under this Agreement; and
(viii) The
capitalization of Rineon as at the Closing Date is as set forth in Section 3.3 of this
Agreement.
In
rendering its opinion, as to matters of the laws of the British Virgin Islands,
Xxxxxx & Jaclin LLP may rely upon the opinion of Xxxx Xxxxxx, Esquire or his
law firm, as special British Virgin Island counsel.
(i) At
the Closing, all instruments and documents delivered to Intigy pursuant to the
provisions hereof shall be reasonably satisfactory to legal counsel for
Intigy.
(j) Rineon
shall have issued to Intigy one or more stock certificates evidencing all 36,000
shares of the Series A Preferred Stock.
4.2 Conditions Precedent to the
Obligations of Rineon. All
obligations of Rineon under this Agreement are subject to the fulfillment, prior
to or at Closing, of each of the following conditions (any one of which may be
waived at Closing by Rineon):
(a) The
representations and warranties by Intigy contained in this Agreement or in any
certificate or document delivered pursuant to the provisions hereof shall be
true in all material respects at and as of the Closing as though such
representations and warranties were made at and as of such time;
(b) Intigy
shall have performed and complied with, in all material respects, with all
covenants, agreements, and conditions set forth in, and shall have executed and
delivered all documents required by this Agreement to be performed or complied
or executed and delivered by them prior to or at the Closing;
(c) On
the Closing Date, Intigy shall have delivered to Rineon a certificate, duly
executed by such Person and certifying, that to the best of such Person’s
knowledge and belief, the representations and warranties of Intigy set forth in
this Agreement are true and correct in all material respects.
(d) Intigy
shall have paid to Rineon the $36,000,000 Purchase Price for the
36,000 shares of Series A Preferred Stock pursuant to the terms and conditions
of this Agreement.
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SECTION
5. COVENANTS
5.1 Corporate Examinations and
Investigations. Prior to the Closing Date, the parties
acknowledge that they have been entitled, through their employees and
representatives, to make such investigation of the assets, properties, business
and operations, books, records and financial condition of the other as they each
may reasonably require. No investigations, by a party hereto shall,
however, diminish or waive any of the representations, warranties, covenants or
agreements of the party under this Agreement.
5.2 Further
Assurances. The parties shall execute such documents and other
papers and take such further actions as may be reasonably required or desirable
to carry out the provisions hereof and the transactions contemplated
hereby. Each such party shall use its best efforts to fulfill or
obtain the fulfillment of the conditions to the Closing, including, without
limitation, the execution and delivery of any documents or other papers, the
execution and delivery of which are necessary or appropriate to the
Closing.
5.3 Confidentiality. In
the event the transactions contemplated by this Agreement are not consummated,
Rineon and Intigy agree to keep confidential any information disclosed to each
other in connection therewith for a period of three (3) years from the date
hereof; provided, however, such obligation shall not apply to information
which:
(i)
at
the time of the disclosure was public knowledge;
(ii) is
required to be disclosed publicly pursuant to any applicable federal or state
securities laws;
(iii) after the
time of disclosure becomes public knowledge (except due to the action of the
receiving party);
(iv)
the
receiving party had within its possession at the time of disclosure;
or
(v) is ordered disclosed by
a Court of proper jurisdiction.
5.4 Stock
Certificates. At the Closing, Rineon shall have delivered to
Intigy the certificates representing the 36,000 shares of Series A Preferred
Stock registered in the name of Intigy so as to make Intigy the sole owner
thereof.
5.5 Use of
Proceeds. Rineon shall use all of the proceeds from the sale
of the Series A Preferred Stock only to consummate the purchase of the Subject
Shares of Amalphis and pay the purchase price for such Subject Shares to
NatProv, all as provided in the NatProv Purchase Agreement.
5.6 Additional
Covenants.
(a) As
at the Closing Date except as set forth on an unaudited balance sheet of Rineon,
dated April 30, 2009 (the “Closing Balance Sheet”),
Rineon shall have no outstanding expenses, obligations, liabilities or
contingencies of any kind.
(b) As
at the Closing Date, except as provided in this Agreement, there shall be no
outstanding warrants, issued stock options, stock rights or other commitments of
any character relating to the issued or unissued shares of either Common Stock
or preferred stock of Rineon.
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(c) At
the Closing, the Series A Preferred Stock to be issued and delivered to
Intigy hereunder will, when so issued and delivered, constitute valid and
legally issued shares of such Series A Preferred Stock, all of which shall be
fully paid and non-assessable.
(d) At
the Closing all shares of Rineon Common Stock owned of record or beneficially by
the Rineon Principal Stockholder shall have been cancelled pursuant to the Stock
Redemption Agreement.
(e) At
the Closing (i) all Rineon Reincorporation Documents and other certificates and
instruments necessary to redomicile and reincorporate Rineon under the laws of
the British Virgin Islands under the name “Rineon Group, Inc.” shall have been
completed and duly executed by all necessary Persons and approved by British
Virgin Islands counsel to Rineon, and (ii) all required pre-approvals, if any,
of any governmental authority or agency of the British Virgin Islands to
consummate the foregoing shall have been obtained.
5.7 Boards of
Directors.
(a) Rineon. At
the Closing, all of the members of the board of directors of Rineon prior to the
Closing shall resign and prior to such resignation shall appoint as the entire
Board of Directors of Rineon a maximum of five (5) persons, who shall be Xxx xx
Xxxx, Xxxxxx Xxxxxxx, Xxxxx Laslop and Tore Nag, and/or such other Persons as
shall be acceptable to Intigy. In addition, as soon as practicable
following the Closing Date, two (2) additional persons acceptable to the new
board of directors of Rineon shall be added as independent directors (as defined
in the Sarbanes Oxley Act of 2002 or rules of the stock exchange on which Rineon
trades, including a financial expert).
(b) Amalphis
Group. The Boards of Directors of each of the
members of the Amalphis Group as at the Closing Date shall be Persons designated
by or otherwise acceptable to the board of directors of Rineon and acceptable to
Intigy.
5.8Form 8-K Interim
Report.Rineon shall cause a Form 8-K Current Report to be filed with the
SEC not later than four (4) Business Days after the Closing Date.
5.9 Stock Option
Plan. Following the Closing Date, the board of directors of Rineon
shall form a compensation committee of the board of directors which shall
propose an incentive stock option plan for key employees, directors, consultants
and others providing services to Rineon and Intigy, pursuant to which up to
5,000,000 shares of Rineon Common Stock shall be authorized for issuance upon
such terms and conditions as shall be recommended by the compensation committee
and approved by a majority of the members of the board of directors (the “Stock Option
Plan”). Such Stock Option Plan shall thereafter be submitted
to the Rineon stockholders for approval.
5.10 Expenses. It
is understood and agreed that following the execution of this Agreement, any and
all legal or other fees and expenses with respect to any filings, documentation
and related matters with respect to the consummation of the transactions
contemplated hereby shall be the sole responsibility of Rineon, and that Intigy
shall not be responsible for any such expenses or legal or other fees associated
with such filings; provided,
however, that Intigy shall fully cooperate and execute all required
documents as may be legally required.
-15-
SECTION
6. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
Notwithstanding
any right of either party to investigate the affairs of the other party and its
Shareholders, each party has the right to rely fully upon representations,
warranties, covenants and agreements of the other party and its Shareholders
contained in this Agreement or in any document delivered to one by the other or
any of their representatives, in connection with the transactions contemplated
by this Agreement. All such representations, warranties, covenants
and agreements shall survive the execution and delivery hereof and the closing
hereunder for eighteen (18) months following the Closing.
SECTION 7. INDEMNIFICATION;
DISPUTE RESOLUTION; NON-COMPETITION.
7.1 Indemnification by
Intigy.
(a) From
and after the Closing, Intigy shall indemnify and hold harmless Rineon, the
Rineon Principal Stockholder and their Affiliates, directors, officers and
employees (collectively, the “Rineon Parties”) from and
against any and all direct Damages finally awarded arising out of, resulting
from or in any way related to:
(i) a
breach by Intigy of its representations and warranties contained herein,
or
(ii) the
failure to perform or satisfy, when due, any of the covenants and agreements
made by Intigy in this Agreement or in any other document or certificate
delivered by Intigy at the Closing pursuant hereto.
(b) Notwithstanding
the foregoing, the indemnification obligations of Intigy under Section 7.1(a)(i)
above shall (i) only arise if a claim for Damages shall be made in writing by
Rineon to Intigy by December 31, 2009, (ii) only be applicable to Damages
incurred by Rineon Parties in excess of $150,000 (the “Indemnity Floor”),
and (iii) not be applicable to Damages incurred by Rineon Parties which shall be
in excess of $5.0 million (the “Indemnity
Cap”). There shall be no Indemnity Cap with respect to the
matters contemplated by Section 7.1(a)(ii) above, and such indemnity obligations
shall survive indefinitely. Any payment made to any of Rineon Parties
pursuant to the indemnification obligations under this Section 7.1 shall
constitute a reduction in value of the Share Exchange paid pursuant to this
Agreement.
7.2 Indemnification by
Rineon.
From and after the Closing, Rineon
shall indemnify and hold harmless the Intigy, its affiliates, directors,
officers and employees (collectively, the “Intigy Parties”) from and
against any and all direct Damages finally awarded arising out of, resulting
from or in any way related to:
(a) a
breach by Rineon of its representations and warranties contained herein,
or
(b) the
failure to perform or satisfy, when due, any of the covenants and agreements
made by Rineon or the Rineon Principal Stockholder in this Agreement or in any
other document or certificate delivered by Rineon at the Closing pursuant
hereto.
(c) In
the event that any claim for Damages shall be asserted against any of the Intigy
Parties for which Rineon is liable to indemnify against pursuant to this Section
7.2, Rineon shall have the sole right to conduct, at its or their expense, the
defense of any and all such claims with counsel of their choosing, and shall
have the sole right to effect any financial settlement of any such claims for
Damages; provided,
however, that if any such settlement would result in any injunction or
restrictions on the Intigy Parties, or otherwise require any of the Intigy
Parties to pay any ongoing royalties or other payments to any Person, no such
settlement may be effected by Rineon without the prior written consent of
Intigy.
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7.3 Resolution of
Disputes. Except as otherwise provided in Section 5.11
above, any dispute arising under this Agreement which cannot be resolved among
the Parties shall be submitted to final and binding arbitration in accordance
with the then prevailing rules and regulations of the American Arbitration
Association (the “AAA”),
located in New York, New York. There shall be three arbitrators, one
selected by the claimant, one selected by the respondent and the third
arbitrator selected by the AAA. The decision and award of the
arbitrators shall be final and binding upon all Parties and may be enforced in
any federal or state court of competent jurisdiction. Service
of process on any one or more Parties in connection with any such arbitration
may be made by registered or certified mail, return receipt requested or by
email or facsimile transmission.
SECTION
8. MISCELLANEOUS
8.1 Waivers. The
waiver of a breach of this Agreement or the failure of any party hereto to
exercise any right under this Agreement shall in no way constitute waiver as to
future breach whether similar or dissimilar in nature or as to the exercise of
any further right under this Agreement.
8.2 Amendment. This
Agreement may be amended or modified only by an instrument of equal formality
signed by the parties or the duly authorized representatives of the respective
parties.
8.3 Assignment. This
Agreement is not assignable except by operation of law.
8.4 Notice. Until
otherwise specified in writing, the mailing addresses and fax numbers of the
parties of this Agreement shall be as follows:
To: Rineon
Group, Inc. (formerly, Jupiter Resources, Inc.):
Rineon Group, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx
Xxxxxxxx
Xxxxxx
Attn: Xxxxx Xxxxxx Xxxxx,
President
By fax and Email only to:
fax: (000) 000-0000
with a
copy to (which shall not constitute notice):
Xxxxxx & Jaclin LLP
000 Xxxxx 0 Xxxxx, Xxxxx
000
Xxxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxx, Esq.
fax: (000)
000-0000
email: xxxxxx@xxxxxxxxx.xxx
-17-
To: Intigy:
Intigy Absolute Return
Ltd.
c/o Axiat Inc.
0000 Xxxxxxxxxxxxx
Xxxxxxx
Xxxxx
0000
Xxxx Xxxx, XX
Attn: Xxxx
Xxxxx
with a
copy to (which shall not constitute notice):
Xxxxxxx Xxxx, LLP
0000 Xxxxxxxx
00xx
Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx,
Esq.
fax: (000) 000-0000
email: xxxxxx@xxxxxxxxxxx.xxx
Any
notice or statement given under this Agreement shall be deemed to have been
given if sent by registered mail addressed to the other party at the address
indicated above or at such other address which shall have been furnished in
writing to the addressor.
8.5 Governing
Law. This Agreement shall be construed, and the legal
relations between the parties determined, in accordance with the laws of the
State of New York, thereby precluding any choice of law rules which may direct
the application of the laws of any other jurisdiction.
8.6 Publicity. No
publicity release or announcement concerning this Agreement or the transactions
contemplated hereby shall be issued by either party hereto at any time from the
signing hereof without advance approval in writing of the form and substance by
the other party.
8.7 Entire
Agreement. This Agreement (including the Schedules to be
attached hereto) and the collateral agreements executed in connection with the
consummation of the transactions contemplated herein contain the entire
agreement among the parties with respect to the transactions contemplated
hereby, and supersedes all prior agreements, written or oral, with respect
hereof.
8.8 Headings. The
headings in this Agreement are for reference purposes only and shall not in any
way affect the meaning or interpretation of this Agreement.
8.9 Severability of
Provisions. The invalidity or unenforceability of any term,
phrase, clause, paragraph, restriction, covenant, agreement or provision of this
Agreement shall in no way affect the validity or enforcement of any other
provision or any part thereof.
8.10 Counterparts. This
Agreement may be executed in any number of counterparts, each of which when so
executed, shall constitute an original copy hereof, but all of which together
shall consider but one and the same document.
8.11 Binding
Effect. This Agreement shall be binding upon the parties
hereto and inure to the benefit of the parties, their respective heirs,
administrators, executors,
successors
and assigns.
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8.12 Press
Releases. The parties will mutually agree as to the wording
and timing of any informational releases concerning this transaction prior to
and through Closing.
[the
balance of this page intentionally left blank – signature pages
follow]
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IN WITNESS WHEREOF, the
parties have executed this Agreement on the date first above
written.
RINEON GROUP INC. (f/k/a Jupiter Resources,
Inc.)
(a Nevada corporation)
By: /s/
Xxxxx Xxxxxx
Xxxxx
Xxxxx Xxxxxx
Xxxxx, President
INTIGY ABSOLUTE RETURN
LTD.
(a BVI corporation)
By: Axiat,
Inc.
By: /s/ Xxxx
Xxxxx
Xxxx
Xxxxx
President
and CEO
RINEON PRINCIPAL
STOCKHOLDER:
/s/
Xxxxx Xxxxxx
Xxxxx
Xxxxx
Xxxxxx Xxxxx
-20-
