PREFERRED STOCK PURCHASE
AGREEMENT
This Preferred Stock Purchase
Agreement (" Agreement "), is made and entered into as of
the 30 th
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 DARCY
GEORGE RONEY (“ Roney ” 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.
“ 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).
“ 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.
“ 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
.
(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.
The closing of the Share Exchange (the “
Closing ”) will take place at the offices of Hodgson
Russ 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
Leo de Waal, Thomas Lindsey, Keith 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.”
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.
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