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PREFERRED STOCK PURCHASE AGREEMENT

Purchase and Sale Agreement

PREFERRED STOCK PURCHASE AGREEMENT | Document Parties: RINEON GROUP INC | Axiat, Inc | INTIGY ABSOLUTE RETURN LTD | RINEON GROUP INC F/K/A JUPITER RESOURCES, INC You are currently viewing:
This Purchase and Sale Agreement involves

RINEON GROUP INC | Axiat, Inc | INTIGY ABSOLUTE RETURN LTD | RINEON GROUP INC F/K/A JUPITER RESOURCES, INC

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Title: PREFERRED STOCK PURCHASE AGREEMENT
Governing Law: New York     Date: 5/14/2009
Law Firm: Hodgson Russ    

PREFERRED STOCK PURCHASE AGREEMENT, Parties: rineon group inc , axiat  inc , intigy absolute return ltd , rineon group inc f/k/a jupiter resources  inc
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Exhibit 10.2

 

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.

 

 

 

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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 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.”

 

 

 

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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


 
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