Document:

f8k082609ex10ii_clrlite.htm

Exhibit 10.2

 

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT
SECURED BY THE SECURITIES.

	
Principal Amount: $______
	
Issue Date: August __________, 2009

	
Purchase Price: $________
	  

 

FORM OF

CONVERTIBLE PROMISSORY NOTE

FOR VALUE RECEIVED, Clear-Lite Holdings, Inc., a Nevada corporation (hereinafter called “Borrower”), hereby promises to pay to _______________ (the “Holder”) or order, without demand, the sum of ______________ Dollars ($_____) (“Principal Amount”) on August ___ 2011  (the
“Maturity Date”), if not sooner paid.

The Principal Amount of this Note represents a 16.67% original issue discount (the “OID”) and this Note does not bear any additional interest.

This Note has been entered into pursuant to the terms of a subscription agreement between the Borrower and the Holder dated at or about the date hereof (the “Subscription Agreement”), and shall be governed by the terms of such Subscription Agreement.  Unless otherwise separately defined herein, all capitalized terms
used in this Note shall have the same meaning as is set forth in the Subscription Agreement.  The following terms shall apply to this Note:

ARTICLE I

 

GENERAL PROVISIONS

 

      1.1           Payment Grace Period.  The
Borrower shall have a seven (7) day grace period to pay any monetary amounts due under this Note, after which grace period a default interest rate of fourteen percent (14%) per annum shall apply.

1.2           Conversion Privileges.  The Conversion Privileges set forth in Article II shall remain in full force and effect immediately from the date hereof
and until the Note is paid in full regardless of the occurrence of an Event of Default.  The Note shall be payable in full on the Maturity Date, unless previously converted into Common Stock in accordance with Article II hereof.

ARTICLE II

CONVERSION RIGHTS

The Holder shall have the right to convert the principal and any interest due under this Note into Shares of the Borrower's Common Stock, $.001 par value per share (“Common Stock”) as set forth below.

 

1

 

 

2.1.           Conversion into the Borrower's Common Stock.

(a)           The Holder shall have the right from and after the date of the issuance of this Note and then at any time until this Note is fully paid, to convert any outstanding and unpaid principal portion of this Note, and accrued interest, at the election of the Holder (the date
of giving of such notice of conversion being a “Conversion Date”) into fully paid and nonassessable shares of Common Stock as such stock exists on the date of issuance of this Note, or any shares of capital stock of Borrower into which such Common Stock shall hereafter be changed or reclassified, at the Conversion Price as defined in Section 2.1(b) hereof,determined as provided herein.  Upon delivery to the Borrower of a completed Notice of Conversion, a form of which is annexed hereto as
Exhibit A, Borrower shall issue and deliver to the Holder within four (4) business days after the Conversion Date (such fourth day being the “Delivery Date”) that number of shares of Common Stock for the portion of the Note converted in accordance with the foregoing.  At the election of the Holder, the Borrower will deliver accrued but unpaid interest on the Note, if any, through the Conversion Date directly to the Holder on or before the Delivery Date.  The number of shares of
Common Stock to be issued upon each conversion of this Note shall be determined by dividing that portion of the outstanding principal amount of the Note and accrued but unpaid interest, if any, to be converted, by the Conversion Price.

(b)    Subject to adjustment as provided in Section 2.1(c) hereof, the conversion price per share shall be equal to $0.30 (“Conversion Price”).

 (c)            The Conversion Price and number and kind of shares or other securities to be issued upon conversion determined pursuant to Section 2.1(a), shall be subject to adjustment from time to time upon the happening of certain
events while this conversion right remains outstanding, as follows:

A.           Merger, Sale of Assets, etc.  If (A) the Borrower effects any merger or  consolidation of the Borrower with or into another entity, (B)
the Borrower effects any sale of all or substantially all of its assets in one or a series of related transactions,  (C) any tender offer or exchange offer (whether by the Borrower or another entity) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, (D) the Borrower consummates a stock purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off
or scheme of arrangement) with one or more persons or entities whereby such other persons or entities acquire more than the 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by such other persons or entities making or party to, or associated or affiliated with the other persons or entities making or party to, such stock purchase agreement or other business combination), (E) any “person” or “group” (as these terms are used for purposes of Sections
13(d) and 14(d) of the 1934 Act) is or shall become the “beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate Common Stock of the Borrower, or (F) the Borrower effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (in any such case, a “Fundamental  Transaction”), this Note,
as to the unpaid principal portion thereof and accrued interest thereon, shall thereafter be deemed to evidence the right to convert into such number and kind of shares or other securities and property as would have been issuable or distributable on account of such Fundamental Transaction, upon or with respect to the securities subject to the conversion right immediately prior to such Fundamental Transaction.  The foregoing provision shall similarly apply to successive Fundamental Transactions of a
similar nature by any such successor or purchaser.  Without limiting the generality of the foregoing, the anti-dilution provisions of this Section shall apply to such securities of such successor or purchaser after any such Fundamental Transaction.

 

2

 

 

B.           Reclassification, etc.  If the Borrower at any time shall, by reclassification or otherwise, change the Common Stock into the same or a different number of securities of any class or classes that
may be issued or outstanding, this Note, as to the unpaid principal portion thereof and accrued interest thereon, shall thereafter be deemed to evidence the right to purchase an adjusted number of such securities and kind of securities as would have been issuable as the result of such change with respect to the Common Stock immediately prior to such reclassification or other change.

C.           Stock Splits, Combinations and Dividends.  If the shares of Common Stock are subdivided or combined into a greater or smaller number of shares of Common Stock, or if a dividend is paid on the Common
Stock in shares of Common Stock, the Conversion Price shall be proportionately reduced in case of subdivision of shares or stock dividend or proportionately increased in the case of combination of shares, in each such case by the ratio which the total number of shares of Common Stock outstanding immediately after such event bears to the total number of shares of Common Stock outstanding immediately prior to such event.

                               D.           Share Issuance.   So
long as this Note is outstanding, if the Borrower shall issue any Common Stock except for the Excepted Issuances, prior to the complete conversion or payment of this Note, for a consideration per share that is less than the Conversion Price that would be in effect at the time of such issuance, then, and thereafter successively upon each such issuance, the Conversion Price shall be reduced to such other lower issue price.  For purposes of this adjustment, the issuance of any security or debt instrument
of the Borrower carrying the right to convert such security or debt instrument into Common Stock or of any warrant, right or option to purchase Common Stock shall result in an adjustment to the Conversion Price upon the issuance of the above-described security, debt instrument, warrant, right, or option and again upon the issuance of shares of Common Stock upon exercise of such conversion or purchase rights if such issuance is at a price lower than the then applicable Conversion Price.  The reduction
of the Conversion Price described in this paragraph is in addition to the other rights of the Holder described in the Subscription Agreement.  Common Stock issued or issuable by the Borrower for no consideration will be deemed issuable or to have been issued for $0.001 per share of Common Stock.  The reduction of the Conversion Price described in this paragraph is in addition to the other rights of the Holder described in the Subscription Agreement.

(d)           Whenever the Conversion Price is adjusted pursuant to Section 2.1(c) above, the Borrower shall promptly mail to the Holder a notice setting forth the Conversion Price after such adjustment and setting forth a statement of the facts requiring such adjustment.

(e)           During the period the conversion right exists, Borrower will reserve from its authorized and unissued Common Stock not less than an amount of Common Stock equal to 120% of the amount of shares of Common Stock issuable upon the full conversion of this Note.  Borrower
represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable.  Borrower agrees that its issuance of this Note shall constitute full authority to its officers, agents, and transfer agents who are charged with the duty of executing and issuing stock certificates to execute and issue the necessary certificates for shares of Common Stock upon the conversion of this Note.

2.2           Method of Conversion.  This Note may be converted by the Holder in whole or in part as described in Section 2.1(a) hereof and the Subscription Agreement.  Upon partial conversion of this
Note, a new Note containing the same date and provisions of this Note shall, at the request of the Holder, be issued by the Borrower to the Holder for the principal balance of this Note and interest which shall not have been converted or paid.

 

3

 

 

2.3.           Maximum Conversion.  The Holder shall not be entitled to convert on a Conversion Date that amount of the Note in connection with that number of shares of Common Stock which would be in excess
of the sum of (i) the number of shares of Common Stock beneficially owned by the Holder and its affiliates on a Conversion Date, (ii) any Common Stock issuable in connection with the unconverted portion of the Note, and (iii) the number of shares of Common Stock issuable upon the conversion of the Note with respect to which the determination of this provision is being made on a Conversion Date, which would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares
of Common Stock of the Borrower on such Conversion Date.  For the purposes of the provision to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulation 13d-3 thereunder.  Subject to the foregoing, the Holder shall not be limited to aggregate conversions of 4.99%.  The Holder shall have the authority and obligation to determine whether the restriction contained in
this Section 2.3 will limit any conversion hereunder and to the extent that the Holder determines that the limitation contained in this Section applies, the determination of which portion of the Notes are convertible shall be the responsibility and obligation of the Holder.  The Holder may waive the conversion limitation described in this Section 2.3, in whole or in part, upon and effective after 61 days prior written notice to the Borrower to increase such percentage to up to 9.99%.

2.4.           Optional Redemption of Principal Amount.   Provided an Event of Default or an event which with the passage of time or the giving of notice
could become an Event of Default has not occurred, whether or not such Event of Default has been cured, the Borrower will have the option of prepaying the outstanding Principal amount of this Note (“Optional Redemption”), in whole or in part, by paying to the Holder a sum of money equal to one hundred and five percent (105%) of the Principal amount to be redeemed, together with accrued but unpaid interest thereon and any and all other sums due, accrued or payable to the Holder arising under this Note
or any Transaction Document through the Redemption Payment Date as defined below (the “Redemption Amount”).  Borrower’s election to exercise its right to prepay must be by notice in writing (“Notice of Redemption”).  The Notice of Redemption shall specify the date for such Optional Redemption (the “Redemption Payment Date”), which date shall be at least ten (10) business days after the date of the Notice of Redemption (the “Redemption Period”).  A
Notice of Redemption shall not be effective with respect to any portion of the Principal Amount for which the Holder has previously delivered an election to convert, or subject to the previous sentence, for conversions initiated or made by the Holder during the Redemption Period.  On the Redemption Payment Date, the Redemption Amount, less any portion of the Redemption Amount against which the Holder has permissibly exercised its conversion rights, shall be paid in good funds to the Holder. A Notice
of Redemption may not be given nor may the Borrower effectuate a Redemption without the consent of the Holder, if at any time during the Redemption Period an Event of Default, or an event which with the passage of time or giving of notice could become an Event of Default (whether or not such Event of Default has been cured), has occurred.  During the Optional Redemption Period, the Company must abide by all of its obligations to the Note Holder.

ARTICLE III

 

EVENT OF DEFAULT

The occurrence of any of the following events of default (“Event of Default”) shall, at the option of the Holder hereof, make all sums of principal and interest then remaining unpaid hereon and all other amounts payable hereunder immediately due and payable, upon demand, without presentment, or grace period, all of which hereby
are expressly waived, except as set forth below:

 

 

 

4

 

 

3.1           Failure to Pay Principal or Interest.  The Borrower fails to pay any installment of principal, interest or other sum due under this Note when due.

3.2           Breach of Covenant.  The Borrower breaches any material covenant or other term or condition of the Subscription Agreement, Transaction Document or this Note in any material respect and such breach,
if subject to cure, continues for a period of thirty (30) days after written notice to the Borrower from the Holder.

3.3           Breach of Representations and Warranties.  Any material representation or warranty of the Borrower made herein, in the Subscription Agreement or any Transaction Document shall be false or misleading
in any material respect as of the date made and the Closing Date.

3.4           Liquidation.   Any dissolution, liquidation or winding up of Borrower or any substantial portion of its business.

 

3.5           Cessation of Operations.   Any cessation of operations by Borrower or Borrower admits it is otherwise generally unable to pay its debts as such debts become due, provided, however that any
disclosure of the Borrower’s ability to continue as a “going concern” shall not be an admission that the Borrower cannot pay its debts as they come due.

 

3.6           Receiver or Trustee.  The Borrower or any Subsidiary of Borrower shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it
or for a substantial part of its property or business; or such a receiver or trustee shall otherwise be appointed.

3.7           Judgments.  Any money judgment, writ or similar final process shall be entered or filed against Borrower or any of its property or other assets for more than $500,000.

3.8           Bankruptcy.  Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings or relief under any bankruptcy law or any law, or the issuance of any notice in relation to such
event, for the relief of debtors shall be instituted by or against the Borrower or any Subsidiary of Borrower.

 3.9           Delisting.   Delisting of the Common Stock from any Principal Market.

3.10           Executive Officers Breach of Duties.  Any of Borrower’s named executive officers is convicted of a violation of securities laws, or a settlement
in excess of $250,000 is reached by any such officer or director relating to a violation of securities laws, breach of fiduciary duties or self-dealing.

ARTICLE IV

MISCELLANEOUS

4.1           Failure or Indulgence Not Waiver.  No failure or delay on the part of the Holder hereof in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.  All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

 

 

5

 

 

4.2           Notices.  All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i)
personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice.  Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery
by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the first business day following the date of mailing by express courier service, fully prepaid, addressed to such
address, or upon actual receipt of such mailing, whichever shall first occur.  The addresses for such communications shall be:

 

If to the Company, to:

Clear-Lite Holdings, Inc.

Attn: Thomas J. Irvine, CEO

102 NE 2nd Street, PMB 400

Boca Raton, FL 33432

facsimile: (561) 852 -2322

With a copy by fax only to (which copy shall not constitute notice):

Anslow & Jaclin LLP

Attn: Joseph M. Lucosky, Esq.

195 Route 9 South, Suite 204

Manalapan, NJ 07726

facsimile: (732) 577-1188

If to the Holder:

To the address and facsimile number listed on the first paragraph of this Note

With a copy by fax only to (which copy shall not constitute notice):

4.3           Amendment Provision.  The term “Note” and all reference thereto, as used throughout this instrument, shall mean this instrument as originally executed, or if later amended or supplemented,
then as so amended or supplemented.

 

4.4           Assignability.  This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to the benefit of the Holder and its successors and assigns.  The Borrower
may not assign its obligations under this Note.

 

4.5           Cost of Collection.  If default is made in the payment of this Note, Borrower shall pay the Holder hereof reasonable costs of collection, including reasonable attorneys’ fees.

 

 

6

 

 

4.6           Governing Law.  This Note shall be governed by and construed in accordance with the laws of the State of New York without regard to conflicts of laws principles that would result in the application
of the substantive laws of another jurisdiction.  Any action brought by either party against the other concerning the transactions contemplated by this Agreement must be brought only in the civil or state courts of New York or in the federal courts located in the State and county of New York.  Both parties and the individual signing this Agreement on behalf of the Borrower agree to submit to the jurisdiction of such courts.  The prevailing party shall be entitled to recover from
the other party its reasonable attorney's fees and costs.  In the event that any provision of this Note is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or unenforceability of any other provision of this Note.
Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Borrower in any other jurisdiction to collect on the Borrower's obligations to Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other decision in favor of the Holder.  This Note shall be deemed an unconditional obligation of Borrower for the payment of money and,
without limitation to any other remedies of Holder, may be enforced against Borrower by summary proceeding pursuant to New York Civil Procedure Law and Rules Section 3213 or any similar rule or statute in the jurisdiction where enforcement is sought.  For purposes of such rule or statute, any other document or agreement to which Holder and Borrower are parties or which Borrower delivered to Holder, which may be convenient or necessary to determine Holder’s rights hereunder or Borrower’s
obligations to Holder are deemed a part of this Note, whether or not such other document or agreement was delivered together herewith or was executed apart from this Note.

 

4.7           Maximum Payments.  Nothing contained herein shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum rate permitted by applicable law.  In
the event that the rate of interest required to be paid or other charges hereunder exceed the maximum rate permitted by applicable law, any payments in excess of such maximum rate shall be credited against amounts owed by the Borrower to the Holder and thus refunded to the Borrower.

 

4.8           Non-Business Days.   Whenever any payment or any action to be made shall be due on a Saturday, Sunday or a public holiday under the laws of the State of New York, such payment may be due or
action shall be required on the next succeeding business day and, for such payment, such next succeeding day shall be included in the calculation of the amount of accrued interest payable on such date.

 

4.9           Redemption.  This Note may not be redeemed or called without the consent of the Holder except as described in this Note or the Subscription Agreement.

4.10         Shareholder Status.  The Holder shall not have rights as a shareholder of the Borrower with respect to unconverted portions of this Note.  However, the Holder will have the rights of a shareholder
of the Borrower with respect to the Shares of Common Stock to be received after delivery by the Holder of a Conversion Notice to the Borrower.

 

 

 

7

 

 

IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by an authorized officer as of the ____ day of August, 2009.

CLEAR-LITE HOLDINGS, INC.

By:________________________________

           Name:

           Title:

WITNESS:

______________________________________

 

 

 

8

 

 

NOTICE OF CONVERSION

(To be executed by the Registered Holder in order to convert the Note)

The undersigned hereby elects to convert $_________ of the principal and $_________ of the interest due on the Note issued by CLEAR-LITE HOLDINGS, INC. on August ___, 2009 into Shares of Common Stock of CLEAR-LITE HOLDINGS, INC. (the “Borrower”) according to the conditions set forth in such Note, as of the date written
below.

Date of Conversion:____________________________________________________________________

Conversion Price:______________________________________________________________________

Number of Shares of Common Stock Beneficially Owned on the Conversion Date: Less than 5% of the outstanding Common Stock of CLEAR-LITE HOLDINGS, INC.

Shares To Be Delivered:_________________________________________________________________

Signature:____________________________________________________________________________

Print Name:__________________________________________________________________________

Address:    _____________________________________________________________________________

   _____________________________________________________________________________

 

 

9f10q0609a1ex10i_rineon.htm

Exhibit 10.1

 

SHAREHOLDERS AGREEMENT

 

THIS SHAREHOLDERS AGREEMENT (the “Agreement”) is made and entered into as of July 14, 2009 (the “Effective Date”) by and among AMALPHIS
GROUP INC., a British Virgin Islands corporation (“Amalphis” or the “Company”), RINEON GROUP, INC., a Nevada corporation (“Rineon”), and NATPROV HOLDINGS INC., a British
Virgin Islands corporation (“NatProv”), and any other person(s) or entity(ies) which becomes a party to this Agreement.  Rineon and NatProv are hereinafter sometimes individually referred to as a “Shareholder” and collectively referred to as the “Shareholders”.

RECITALS:

WHEREAS, NatProv is the current owner of an aggregate of 451,666 ordinary shares, $0.01 par value per share, of the Company (the “Ordinary Shares”), representing 100% of the issued and outstanding Ordinary Shares of the Company; and

 

WHEREAS, pursuant to a stock purchase agreement between NatProv and Rineon, dated as of May 14, 2009 (the “Stock Purchase Agreement”), NatProv agreed to sell and Rineon agreed to purchase for $36,000,000 in cash, an aggregate of 1,985,834 Ordinary Shares of
the Company, representing approximately 81.5% of the 2,437,500 issued and outstanding Ordinary Shares of the Company owned by NatProv; and,

 

WHEREAS, Rineon has paid to NatProv the $36,000,000 purchase price contemplated by the Stock Purchase Agreement; and

 

WHEREAS, with the approval of Rineon and in order to enable Amalphis’ Subsidiary, Allied Provident Insurance, Inc, to continue to comply with applicable insurance regulations in Barbados, immediately prior to the Effective Date of this Agreement, NatProv has:

 

	(a) 	
converted all of the 1,985,834 Ordinary Shares of the Company to be sold to Rineon under the Stock Purchase Agreement into 36,000 shares of  non voting Series A Preferred Shares of the Company, containing such rights, privileges, powers and designations as are set forth on Exhibit A annexed hereto; and

 

	(b)	assigned and transferred all right, title and interest in and to such 36,000 Series A Preferred Shares to Rineon; and

 

WHEREAS, the Company and the Shareholders also wish to enter into this Agreement to document their agreement and understanding regarding certain restrictions and controls on the Company and the Shares; and

 

NOW THEREFORE, in consideration of the foregoing recitals and the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

 

 

 

1

 

 

ARTICLE  1 -CERTAIN DEFINITIONS

 

Section 1.1 As used in this Agreement, the following terms shall have the following respective meanings:

 

“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling (including, but not limited to, all directors and officers of such Person), controlled by, or under direct or indirect common control with, such Person.  A
Person shall be deemed to control another Person if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such other Person, whether through the ownership of voting securities, by contract or otherwise.  Control will be presumed by the ownership of 10% or more of the voting securities of any such Person.  For purposes of Section 3.10 (Drag-Along Rights) each
director, shareholder, general partner, member, officer and employee (to the extent applicable) of a Person or the spouse or children of any such director, shareholder, general partners,  member, officer or employee or a trust of trusts solely for the benefit of such director, shareholder, general partner, member, officer or employee and/or the spouse or children of such director, shareholder, general partner, member, officer or employee shall, in each case, be deemed to be a Affiliate.

 

“Agreement” means this Agreement as the same may be amended, restated, supplemented or modified from time to time in accordance with the terms herein.

 

“Allied Provident” means Allied Provident Insurance, Inc., a Barbados exempt insurance company, and a Subsidiary of the Company.

 

“Board of Directors” means the Board of Directors of the Company

 

“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks in the State of New York are authorized or required by law or executive order to close.

 

 “Certificate of Designation” means the Certificate of Designation, Powers, Preferences and Rights of the Series A Preferred Shares of the Company in the form annexed hereto as Exhibit A.

 

 “Company” has the meaning set forth in the preamble to this Agreement.

 

“Effective Date” has the meaning set forth in the preamble to this Agreement.

 

“Memorandum and Articles of Association” means the Memorandum and Articles of Association of the Company in effect on the Effective Date, as the same may be amended from time to time.

 

“NatProv” has the meaning set forth in the preamble to this Agreement.

 

 “Ordinary Shares” means the 100,000,000 ordinary shares, $0.01 par value per share, of the Company that is authorized for issuance pursuant to the Memorandum and Articles of Association.

 

“Person” means any individual, firm, corporation, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, limited liability company, governmental agency or authority or other entity of any kind, and shall include any
successor (by merger or otherwise) of such entity.

 

“Rineon” has the meaning set forth in the preamble to this Agreement.

 

 

2

 

 

“Rineon Series A Preferred Shares” shall mean the 36,000 Series A Preferred Shares that were transferred and assigned by NatProv to Rineon pursuant to the Stock Purchase Agreement, in lieu of 1,985,834 Ordinary Shares of the Company.

 

“Sale of Control” shall mean the collective reference to any one of the following events:

 

	(a) 	
a sale of all of the issued and outstanding Shares of the Company in one transaction or in a series of transactions; or

 

	(b) 	
a merger of the Company with or into any Person (or a Subsidiary of such Person) who is not an Affiliate of the Company or any of the Shareholders; or

 

	
(c)
	the sale of all or substantially all of the securities, assets or business of the Company to, or the merger or consolidation of the Company with, any Person who is not an Affiliate of the Company or any of the Shareholders.

 

“Series A Preferred Shares” means the 3,000,000 Series A Preferred Shares, $0.01 par value per share, and $1,000 liquidation value per share, of the Company that are authorized for issuance pursuant to the Certificate of Designation.

 

“Shares” means and includes all Ordinary Shares and all Rineon Series A Preferred Shares now owned or hereafter acquired by any Shareholder.

 

“Shareholder” or “Shareholders” have the meanings set forth in the preamble to this Agreement.

 

“Stock Purchase Agreement” has the meaning set forth in the preamble to this Agreement.

 

“Subsidiary” means any corporation or other entity of which at least a majority of the securities or other ownership interest having ordinary voting power (absolutely or contingently) for the election of directors or other Persons performing similar functions are
at the time owned directly or indirectly by the Company and/or any of its other subsidiaries.

 

“Triggering Date” shall mean (i) for Section 3.2, the date of the occurrence of an event of insolvency; and (ii) for Section 3.3, the date that the Offer (as defined in Section
3.3(b)) is delivered to the Offerees.

 

ARTICLE  2 -  TRANSFER OF RINEON SERIES A PREFERRED SHARES

 

Section 2.1 Receipt of Rineon Series A Preferred Shares in Lieu of Ordinary Shares. 

 

	(a)	
By its execution of this Agreement, each of NatProv and Rineon agree to amend the Stock Purchase Agreement to the extent that Rineon agrees to accept, in lieu of 1,985,834 Ordinary Shares of the Company, the 36,000 Series A Preferred Shares representing the Rineon Series A Preferred Shares.

 

	(b)	NatProv hereby acknowledges receipt of payment of the $36,000,000 purchase price for the Rineon Series A Preferred Shares.  NatProv hereby covenants that it heretofore converted all of the 1,985,834 Ordinary Shares of the Company to be sold to Rineon under the Stock Purchase Agreement into 36,000 shares of Series A Preferred Shares of the Company and has transferred to Rineon a stock certificate of the Company representing the
Rineon Series A Preferred Shares, properly endorsed for transfer.  Rineon hereby consents to such conversion and acknowledges receipt of such stock certificate evidencing the Rineon Series A Preferred Shares.

           

 

3

 

 

	(c)	Promptly following the Effective Date of this Agreement, against delivery of the stock certificate referred to in Section 2.1(b) above, the Company shall cause to be issued in the name of Rineon a stock certificate evidencing such Rineon Series A Preferred Shares, free and clear of all liens, security interests, pledges, charges or other encumbrances of any nature whatsoever.

  

ARTICLE  3 - TRANSFERS  AND SALE OF CONTROL

 

Section 3.1 General Restriction Against Transfer; Permitted Transfers.

 

	(a)	
Each Shareholder covenants and agrees that, except as specifically set forth in this Article 3 and subject to Section 3.1(b), neither such Shareholder nor such Shareholder’s successors or Affiliates shall sell, donate, assign as collateral, pledge, hypothecate, mortgage, encumber, allow to be encumbered, transfer or otherwise dispose of in any manner whatsoever (each,
a “Transfer”) any Shares.

 

	(b)	
Any attempt to Transfer or to agree to Transfer any Shares in contravention of the provisions of this Agreement shall be void and shall have no effect.  Compliance with the provisions of this Agreement shall be a condition precedent to the recording or documentation of any Transfer of any Shares in the books and records of the Company.

 

	(c) 	Notwithstanding any of the restrictions on Transfer of the Shares contained in this Agreement, Transfers of any Shares owned by record by any one or more of the Shareholders to any Affiliate or to any Person who is an equity owner of the Shareholder or who controls, is controlled by or is under common control with such Shareholder or any family member of such
Person or Persons, or any trust for the benefit of the foregoing or any entity the majority of whose interests are owned by any of the foregoing (individually or collectively, a “Permitted Transferee”), shall be permitted (each a “Permitted Transfer”); provided, however,
that (A) any Shares so Transferred shall continue to be subject to the restrictions of this Agreement, (B) such Transfer does not violate any of the provisions of this Agreement, and (C) such Transfer shall not be effective until the Permitted Transferee executes and delivers an agreement in the form supplied by the Company whereby such Permitted Transferee agrees to become a party to this Agreement and to be bound by each of the terms and conditions of this Agreement.

 

Section 3.2 Sale Upon Insolvency.  Each
Shareholder agrees that upon the occurrence of any of the following events:  (i) a Shareholder’s adjudication as a bankrupt; (ii) institution by or against a Shareholder of a petition for arrangement or any other type of insolvency proceeding under any bankruptcy law or otherwise; (iii) a Shareholder’s making of a general assignment for the benefit of such Shareholder’s creditors, (iv) the appointment of a receiver or trustee in bankruptcy of such Shareholder for any of a Shareholder’s
assets; or (v) the taking, making or institution of any like or similar act or proceeding involving a Shareholder, provided that such event, adjudication, institution, making, appointment or similar act or proceeding is not cured or rescinded within sixty (60) days (the “Cure Period”), then, at the end of the Cure Period, such Shareholder or such Shareholder’s successor
or successors in interest shall offer to sell to the Offerees, and the Offerees may, but shall not be required to, purchase all, but not less than all, of such Shareholder’s Shares and such sale shall be made in accordance with Section 3.4, Section 3.5, Section 3.6 and Section 3.7.

 

 

4

 

 

Section 3.3 Right of First Refusal.

 

(a) Notwithstanding any other provision of this Agreement, except as provided in Section 3.3(c) below, neither NatProv nor any Permitted Transferee of NatProv may Transfer all or any portion
of its Shares following the Effective Date.

 

(b) Prior to July 14, 2012, neither NatProv nor any Permitted Transferee of NatProv may effect any Transfer of its or their Shares.  If at any time following July 14, 2012, NatProv
or any Permitted Transferee of NatProv (each a “Selling Shareholder”) desires to sell for cash or cash equivalents all or any portion of its Shares pursuant to a bona fide offer from a third party who is not an Affiliate (for the purposes of this Section 3.3, the “Proposed Transferee”), the Selling Shareholder shall submit a written offer (the “Offer”)
to sell such Shares (the “Offered Shares”) to Rineon on terms and conditions, including price, not less favorable to the Offerees than those on which the Selling Shareholder proposes to sell such Offered Shares to the Proposed Transferee.  The Offer shall disclose the identity of the Proposed Transferee, the Offered Shares proposed to be sold, the total number of Shares owned by the Selling Shareholder, the terms and conditions,
including price, of the proposed sale, and any other material facts relating to the proposed sale.  Rineon may assign its right to purchase the Offered Shares by delivering written notice to the Selling Shareholder.  Any sale proposed or made under this Section 3.3 shall be made in accordance with Section 3.4, Section 3.5, Section 3.6 and Section 3.7.

 

	 (c) 	
The provisions of this Section 3.3 (including Rineon’s Right of First Refusal) shall not apply with respect to:

 

	 	(i)	
any redemption of Shares or sales of Shares by a Shareholder to the Company in a transaction approved by the Board of Directors of the Company and consented to in writing by Rineon; or

 

	 	(ii)	
any Permitted Transfer; or

 

	 	(iii)	any sales or issuances of Ordinary Shares or other equity securities by the Company with the prior written consent of Rineon.

 

Section 3.4 Option Period; Effecting Election.

 

	(a)	
Option Period.  For each proposed purchase of Shares made pursuant to Section 3.2, Section 3.3 or Section 3.4, Rineon shall have the first option to purchase all or any portion of such Shares.  Rineon shall have thirty (30) days (the “Rineon Option
Period”) from the effective Triggering Date to consummate such a sale.  If Rineon does not consummate any such sale within the Rineon Option Period, the Company shall then have an additional thirty (30) day period (the “Company Option Period”) (beginning on the day following the expiration of the Rineon Option Period) during which it may consummate the purchase of the applicable Shares.  The Rineon Option
Period and the Company Option Period are collectively referred to herein as the “Option Periods.”  If any such Share purchase is not consummated by either Rineon or the Company within the applicable Option Period, the Shares may be sold to a third party or otherwise Transferred, as applicable, by NatProv.  Any purchase made by Rineon or the Company under this Agreement shall result in all of the applicable Shares
being purchased.  Rineon may assign the right to purchase the Shares to any third party in any proportions that Rineon desires in its sole discretion.

 

	(b)	Effecting Election.  Election by Rineon or the Company to purchase Shares offered for sale pursuant to this Agreement shall be effected by sending written notice of such election to such Selling Shareholder or such its or their representative (as applicable) prior to the expiration of the applicable Option
Period.

 

 

5

 

 

 Section 3.5 Effect of Failure to Elect
to Purchase All Shares.

 

	(a)	
If either Rineon or the Company do not elect to purchase all of the Shares offered for sale by an Selling Shareholder pursuant to Section 3.2 or Section 3.3, all of the Selling Shareholder’s Shares shall continue to be owned by such Shareholder.  Such Shares may be transferred as contemplated by NatProv or its Permitted Transferee, but such Shares will at
all times continue to be subject to the restrictions of this Agreement and no such Transfer will be effective until each proposed transferee executes and delivers a counterpart of this Agreement.

 

	(b)	If either Rineon nor the Company do not elect to purchase all of the Shares offered for sale by a Selling Shareholder pursuant to Section 3.3, all, but not less than all, of the Selling Shareholder’s Shares not purchased by Rineon or the Company may be transferred to the bona fide offeror pursuant to the terms of the bona fide offer within thirty (30) days
following the expiration of the applicable Option Period; provided, however, that any Shares so transferred shall continue to be subject to the restrictions of this Agreement and such Transfer shall not be effective until the transferee executes and delivers a counterpart of this Agreement.  If all of the Selling Shareholder’s Shares are not transferred within such
30-day period, such Shares shall again become subject to the restrictions contained in this Agreement and shall not be transferred except in accordance with the terms and conditions of this Agreement.

 

Section 3.6 Purchase Price.  Except
as provided in Section 3.3 of this Agreement, the “Purchase Price” per share of the Shares proposed for Transfer or Transferred shall be determined as of the last equity offering of the Company and being equal to the price per share pursuant to the last equity offering, provided such equity offering of the Company was consummated within a six (6) month period of the proposed Transfer and with parties who are not Affiliates of the Company
or any Shareholder, or in absence of an equity offering within the said six (6) month period, by the written concurrence of two out of three qualified appraisers (the “Appraisers”).  One appraiser shall be appointed by the Selling Shareholder, one Appraiser shall be appointed by the applicable proposed purchaser (Rineon or the Company), and these two Appraisers shall choose the third Appraiser.  The first two Appraisers
shall be chosen within five (5) days after the Triggering Date, and the third Appraiser shall be chosen within five (5) days of the date that the second Appraiser is chosen.  Each party shall pay the costs and expenses of the Appraiser chosen by it, and they shall evenly split the costs of the third Appraiser.  The Appraisers shall develop a fair market value determination of the Company’s value, and this shall become the final and binding Purchase Price.  All Appraisers must
be firms or individuals with previous background and experience in the valuation and appraisal of corporations, which are similar in size, industry and financial condition to the Company.  The Appraisers shall deliver a written report to all parties (which documents their determination of the Purchase Price, along with a sufficiently detailed description of the methodologies, assumptions and procedures used) within thirty (30) days after the designation of the third Appraiser.  Notwithstanding
any other provision of this Section 3.6, if the higher of the two valuations made by the first two appraisers exceeds the lower appraisal by ten percent (10%) or less, the Purchase Price shall be equal to the average of these two valuations and the third appraiser will not be used.

 

Section 3.7 Closing; Payment.

 

	(a)	The closing (“Closing”) of any sale of a Selling Shareholder’s Shares to Rineon or the Company pursuant to Section 3.2 or Section 3.3 shall take place at the office of the Company at any point prior to the expiration of the applicable Option Period or in the event of a sale under Section 3.3, on the twentieth (20th) Business Day following the date the Offer
was made.  The certificate or certificates representing the Shares to be purchased, properly endorsed for transfer or with an executed stock power attached, shall be delivered at the Closing free and clear of all liens, security interests, pledges, charges or other encumbrances of any nature whatsoever against the payment of the purchase price therefor.

 

 

6

 

 

	(b)	
The purchase of Shares under this Agreement shall be made in cash; provided, that upon the mutual consent of the parties thereto, all or part of such purchase price may be paid by the execution and delivery of a promissory note payable to the Selling Shareholder, which shall contain such terms and conditions as the parties may agree.

 

	(c)	Notwithstanding any other provision of this Section 3.7, if either Rineon or the Company is purchasing the Shares pursuant to Section 3.3 and is paying the purchase price set forth in the bona fide offer from an unaffiliated third party, the purchase price shall be paid in accordance with the terms and conditions contained in the bona fide offer.

 

Section 3.8 Tag-Along Rights.

 

	(a)	
If at any time any of the Shareholders, whether alone or together by agreement, contract or understanding (for the purposes of this Section 3.9, each a “Selling Party”) wishes to sell any Shares owned by it in a single transaction or series of related transactions equaling ten percent (10%) or more of all of the shares of capital stock of the Company then issued and outstanding
(on a fully-diluted basis counting all issued options, warrants and convertible securities) to any third party (other than to a Permitted Transferee of such Selling Party in connection with a Permitted Transfer or the Company or any other Shareholder) (for the purposes of this Section 3.9, the “Purchaser”), and the Selling Party has complied with all of the other requirements of this Agreement, the Selling Party shall cause a written
notice of the offer by the Purchaser to purchase such Shares (a “Tag-Along Notice”) to be delivered to each of the other Shareholders (each a “Tag-Along Shareholder”), setting forth the price per Share to be paid by the Purchaser, the identity of the Purchaser and the other principal terms and conditions of the Purchaser’s offer to purchase such Shares,
and each Shareholder shall have the right to offer for sale to the Purchaser, as a condition of such sale by the Selling Party, the same proportion of the Shares then held by such Shareholder as the proposed sale represents with respect to the total number of Shares that the Selling Party owns or has the right to acquire pursuant to outstanding options, warrants or convertible securities, at the same price per Share and on the same terms and conditions as involved in such sale by the Selling Party.  Each
Shareholder shall notify the Selling Party of its intention to sell its Shares pursuant to this Section 3.9 as soon as practicable after receipt of the Tag-Along Notice, but in no event later than thirty (30) days after receipt thereof.

 

	(b)	In the event that any Shareholder elects to sell its pro rata portion to the Purchaser, the Tag-Along Shareholders shall not be obligated to execute and deliver any document which (A) requires the Tag-Along Shareholders to make representations or warrants regarding any aspect whatsoever of the business or prospects of the Company and/or its Subsidiaries, provided that the
Tag-Along Shareholders (so long as the Selling Party(s) do at least the same), shall make representations and warranties to the effect that (x) such Tag-Along Shareholder is the legal and beneficial owner(s) of the securities being sold in the sale, free and clear of all liens, claims, security interests, restrictions, agreements of sale or other encumbrances (other than any imposed by this Agreement, as amended and restated, and (y) such Tag-Along Shareholder has the capacity or power and authority to effect
such sale), (B) would subject such Tag-Along Shareholder to restrictive covenants, or (C) requires such Tag-Along Shareholder to be obligated for any indemnification or other obligations other than (so long as the Selling Party(s) do at least the same) (1) the obligation to join on a pro-rata basis (but not on a joint and several basis), based on its respective share of the aggregate proceeds paid by the Purchaser (but only up to the amount of net proceeds actually received by such Tag-Along Shareholder in the
sale), in any indemnification that the Selling Party(s) have agreed to, and (2) any such obligations that relate specifically to a particular Shareholder such as indemnification with respect to representations and warranties given by a Shareholder regarding such Shareholder’s title to and ownership of Shares.

 

 

7

 

 

	(c)	The Selling Party and each other Shareholder intending to sell Shares hereunder shall sell to the Purchaser all, or at the option of the Purchaser, any part of the Shares proposed to be sold by them at not less than the price per Share and upon other terms and conditions, if any, not more favorable to the Purchaser than those set forth in the Tag-Along Notice; provided, however,
that any purchase of less than all of such Shares by the Purchaser shall be made from the Selling Party and each other Shareholder intending to sell Shares hereunder pro rata based upon the number of Shares then held by the Selling Party and each such other Shareholder electing to sell to the Purchaser (calculated on a fully diluted basis).

 

Section 3.9 Drag-Along Rights.

 

	(a)	At any time, Rineon or any Permitted Transferee of Rineon (for the purposes of this Section 3.10, the “Initiating Shareholders”) may, in connection with a bona fide offer (a “Drag-Along Offer”) by a third party who is not an Affiliate of the Company or any Shareholder (for the purposes
of this Section 3.10, a “Third Party”) to acquire for value all of the then outstanding Shares or all or substantially all of the assets or businesses of the Company (no matter how the transaction may be structured), require NatProv and all other Shareholders (each a “Drag-Along Shareholder”) to sell to such Third Party all of the Shares then held by such Shareholder
or to vote their Shares in favor of such transaction if other than a sale of Shares as provided below; provided, however, that: (i) the Drag-Along Shareholders shall not be obligated to execute and deliver any document which (A) requires the Drag-Along Shareholders to make representations or warrants regarding any aspect whatsoever of the business or prospects of the Company and/or
its Subsidiaries, provided that such Drag-Along Shareholders (so long as the Initiating Shareholders do at least the same), shall make representations and warranties to the effect that (x) such Drag-Along Shareholder is the legal and beneficial owner(s) of the securities being sold in the sale, free and clear of all liens, claims, security interests, restrictions, agreements of sale or other encumbrances (other than any imposed by this Agreement, as amended and restated, and (y) such Drag-Along Shareholder has
the capacity or power and authority to effect such sale), (B) would subject such Drag-Along Shareholder to restrictive covenants, or (C) requires such Drag-Along Shareholder to be obligated for any indemnification or other obligations other than (so long as the Initiating Shareholders do at least the same) (1) the obligation to join on a pro-rata basis (but not on a joint and several basis), based on its respective share of the aggregate proceeds paid by the purchaser in such sale (but only up to the amount of
net proceeds actually received by such Drag-Along Shareholder in the sale), in any indemnification that the Initiating Shareholders have agreed to, and (2) any such obligations that relate specifically to a particular Shareholder such as indemnification with respect to representations and warranties given by a Shareholder regarding such Shareholder’s title to and ownership of Shares; (ii) if the Initiating Shareholders elect to exercise their rights under this Section 3.10(a), the Drag-Along Shareholders
receive either cash or marketable securities (i.e., securities that are actively publicly traded on the NYSE, NYSE Alternext Exchange, NASDAQ or similar exchange or quotation system) in such sale.  If the Initiating Shareholders elect to exercise their right to compel a sale pursuant to this Section 3.10, the Initiating Shareholders will cause a written notice of the Drag-Along Offer (the “Drag-Along Notice”) to be delivered
to each of the other Shareholders, setting forth the aggregate consideration, the identity of the Third Party and the other principal terms and conditions thereof.
 

	(b)	
The Initiating Shareholders will have one hundred twenty (120) days from the date the Drag-Along Notice is given to the other Shareholders to consummate the sale to the Third Party, at the price and on the terms substantially similar to those set forth in such Drag-Along Notice, of all of the Shares subject to the Drag-Along Offer pursuant to Subsection (a).  If the sale to the Third Party is not completed during such one hundred twenty
(120) day period, then the other Shareholders will be released from their obligations with respect to such Drag-Along Notice (but not future Drag-Along transactions).

 

	(c)	Subject to Section 3.10(b), each Shareholder agrees to cast all votes to which such Shareholder is entitled in respect of its Shares, whether at any annual or special meeting, by written consent or otherwise, in the same proportion as Shares are voted by the Initiating Shareholders to approve any transaction or series of transactions in connection with which the Initiating Shareholders exercise their rights in this Section 3.10 (including,
without limitation, any recapitalization, merger, consolidation, reorganization or sale of all or substantially all of the assets of the Company).

 

 

8

 

 

Section 3.10 Sale of Control. Notwithstanding
anything to the contrary, express or implied contained in this Agreement, unless additional Ordinary Shares of the Company shall have been previously issued with Rineon’s prior written consent, upon the occurrence of a Sale of Control transaction, Rineon shall be entitled to receive in connection therewith, the greater of either:

 

	(a)	
$36,000,000, payable in cash or such other property as shall be acceptable to Rineon in the exercise of its sole and absolute discretion, or

 

	(b) 	eighty-one and one-half percent (81.5%) of the total consideration payable in connection with such Sale of Control transaction.  Subject to the foregoing, NatProv or any Permitted Transferee of NatProv shall be entitled to receive the balance of the total consideration payable in connection with such Sale of Control transaction.

 

 

ARTICLE  4 -  ACTIONS REQUIRING SPECIAL APPROVAL

 

Section 4.1 Matters Requiring Special Approval.  Notwithstanding any other provision of this
Agreement and in addition to any requirements imposed by applicable law, no obligation of the Company or any of its subsidiaries will be entered into, no decision will be made, and no action taken by or in respect of the Company or any of its subsidiaries with respect to the following matters without the prior written approval of Rineon:

 

	(a)	
any change in the membership of the Board of the Directors of the Company serving as of the Effective Date;

 

	(b)	
any change in the Company’s senior executive officers or management serving as of the Effective Date;

 

	(c)	
the issuance of any capital stock of the Company or any other securities convertible into or exercisable or exchangeable for capital stock of the Company;

 

	(d)	
the incurrence of any indebtedness in an amount exceeding $500,000 at any one time or exceeding $2,500,000 in the aggregate;

 

	(e)	
any change in the fundamental nature of the business of the Company and its subsidiaries, as being conducted as of the Effective Date;

 

	(f)	
the acquisition by the Company of the securities or assets of any Person which is not an Affiliate of the Company;

 

	(g)	
any change in Memorandum and Articles of Association of the Company or in the Certificate of Designations that would create, alter or change the rights, preferences or privileges of any class of the Ordinary Shares or the Series A Preferred Shares or the taking of any other action that would alter or change the rights, preferences or privileges of any class of the Ordinary
Shares or the Series A Preferred Shares;

 

	(h)	the taking of any steps to wind-up, dissolve or terminate the corporate existence of the Company or any Subsidiary, or any act of bankruptcy in relation to the Company or any Subsidiary;

 

 

9

 

 

	(i) 	
the amalgamation, merger, reorganization or consolidation of the Company or any Subsidiary or the sale, lease, assignment, lending, giving, licensing, transfer or otherwise disposing of all or substantially all of the assets of the Company or any Subsidiary;

 

	(j)	
the share price, valuation and other terms of any new issuance of shares of the Company, including the identity of all new Shareholders, except with respect to Permitted Transfer(s); and

 

	(k)	entering into, termination, renewal, amendment or modification of any agreement between a Shareholder (or any person related to or an Affiliate of such Shareholder) and the Company or any Subsidiary of the Company.

 

ARTICLE  5 -  GENERAL PROVISIONS

 

Section 5.1 Termination.  This Agreement shall terminate: (a) as to the Company and all Shareholders,
upon the occurrence of a Sale of Control transaction, and (b) as to any one or more Shareholder, upon the Transfer of all Shares owned by such Shareholder except in connection with a Permitted Transfer(s).

 

Section 5.2 Legend.  Each certificate
evidencing any of the Shares shall bear a legend substantially as follows:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT FOR DISTRIBUTION, AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.

 

Section 5.3 Notices.  Except as expressly set forth to the contrary in this Agreement,
all notices, requests, or consents provided for or permitted to be given under this Agreement must be in writing and delivered by (a) personal delivery, or (b) a nationally recognized overnight courier delivery service (such as Federal Express, UPS, DHL, or USPS Express Mail) and a notice, request, or consent given under this Agreement is effective on receipt by the Person to receive it in the case of clause (a), or one business day after deposit in such an overnight courier delivery service.  All notices,
requests, and consents to be sent to the Company or a Shareholder must be sent to or made at the appropriate address as held by the Company, or to such other address as is specified by written notice to all parties hereto.  Whenever any notice is required to be given by law or this Agreement, a written waiver thereof, signed by the person entitled to notice, whether before or after the time stated therein, will be deemed equivalent to the giving of such notice.

 

Section 5.4 Entire Agreement.  This
Agreement constitutes the entire agreement among the Company and the Shareholders relating to the matters contained herein and supersedes all Prior Agreements with respect to the Company or the Shares, whether oral or written.

 

 

10

 

 

Section 5.5 Effect of Waiver or Consent.  A
waiver or consent, express or implied, of any breach or default by any person in the performance of its obligations with respect to the Company is not a consent or waiver of any other breach or default in the performance by that person of the same or any other obligations of that person with respect to the Company.  Failure on the part of a person to complain of any act or omission of any person or to declare any person in breach or default with respect to the Company, irrespective of how long that
failure continues, does not constitute a waiver by that person of its rights with respect to that default.

 

Section 5.6 Amendment or Modification.  This
Agreement may be amended or modified from time to time only by the written consent of the Company and by a writing signed by the Company and Shareholders whose collective Proportionate Percentages are at least 75%; provided that no amendment or modification will adversely effect the rights of any Shareholder relative to the other Shareholders without the express written consent of such Shareholder.

 

Section 5.7 Binding Effect.  Subject
to the restrictions on Transfer set forth Article 3, this Agreement is binding on and inures to the benefit of the Shareholders and their respective successors and assigns.

 

Section 5.8 Governing Law; Severability.  This
Agreement is governed by and will be construed in accordance with the laws of the State of New York. If any provision of this Agreement or the application thereof to any person or circumstance is held invalid or unenforceable to any extent, the remainder of this Agreement and the application of that provision to other persons or circumstances will not be affected thereby and that provision will be enforced to the greatest extent permitted by law.

 

Section 5.9 Further Assurances.  In
connection with this Agreement and the transactions contemplated hereby, each Shareholder will execute and deliver any additional documents and instruments and perform any additional acts necessary or appropriate to effectuate and perform the provisions of this Agreement and those transactions.

 

Section 5.10 Offset.  Whenever the
Company is to pay any sum to any Shareholder, any amounts that that Shareholder owes to the Company may be offset against and deducted from that sum before payment.

 

Section 5.11 Counterparts.  This Agreement
may be executed in multiple counterparts with the same effect as if all signing parties had signed the same document.  All counterparts when signed and assembled together will constitute a single, fully-executed instrument.  Facsimile and .pdf executed instruments shall have the same validity as originally executed instruments.

 

Section 5.12 Waiver of Jury Trial; Consent to Jurisdiction; Venue. THE
COMPANY AND EACH OF THE SHAREHOLDERS HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE (TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHTS ANY OF THEM MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTES ARISING UNDER OR RELATING TO THE VALIDITY, CONSTRUCTION, OR ENFORCEMENT OF THIS AGREEMENT AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.  ANY ACTION OR PROCEEDING OF ANY KIND (LEGAL, EQUITABLE OR ARBITRATION) SHALL BE BROUGHT IN THE APPLICABLE FEDERAL OR
STATE COURT LOCATED IN NEW YORK COUNTY, NEW YORK.  EACH OF THE PARTIES HERETO IRREVOCABLY CONSENTS TO THE JURISDICTION AND VENUE OF THE STATE AND FEDERAL COURTS LOCATED IN THE STATE OF NEW YORK IN ACCORDANCE WITH THE REQUIREMENTS AND INTENT OF THIS SECTION 4.12.  IN CONNECTION WITH ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE VALIDITY, CONSTRUCTION, OR ENFORCEMENT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY AND EXPRESSLY WAIVES ALL CHALLENGES TO THE CONTRARY.

 

 

11

 

 

Section 5.13 Attorneys’ Fees.  In
any legal action that arises out of or in connection with this Agreement, the prevailing party or parties in any such action shall be entitled to have their attorneys’ fees (including all related costs and expenses and all costs related to or associated with any appeal) paid by the non-prevailing party or parties in such action.  Any non-prevailing parties to such action shall be liable for such reasonable attorneys’ fees, costs and expenses in proportion to the percentage of the Company’s
Ordinary Shares owned by them (excluding any Ordinary Shares owned by any prevailing party or parties in such action).

 

Section 5.14 No Continuation of Employment, Directorship or Independent Contractor Status.  Nothing
in this Agreement shall create an obligation of the Company to continue any Shareholder’s employment, directorship, independent contractor status or similar relationship or status with the Company.

 

Section 5.15 Incorporation of Recitals, Schedules and Exhibits.  All
of the Recitals stated at the beginning of this Agreement and all of the Schedules and Exhibits attached hereto are hereby incorporated by reference into and made a part of this Agreement.

 

Section 5.16 Acknowledgments By Shareholders and the Company.  By
executing this Agreement, each Shareholder and the Company acknowledges and agrees that it (i) has actual notice of all of the provisions of this Agreement, including, without limitation, the restrictions on the transfer of Shares, (ii) has received copies of and has read and reviewed the Company’s Certificate of Incorporation and Memorandum and Articles of Association, and (iii) was strongly encouraged by the Company to obtain individual legal counsel before signing this Agreement.  Each Shareholder
hereby agrees that this Agreement constitutes adequate notice of all such provisions, and each Shareholder hereby waives any requirement that any further notice as required by any provision of New York law or otherwise should be given.

 

[SIGNATURE PAGE FOLLOWS]

 

 

 

 

12

 

 

 

IN WITNESS WHEREOF, the undersigned parties have executed this Shareholders Agreement effective as of the date first set forth above.

 

	 	AMALPHIS GROUP INC.	 
	 	 	 	 
	
 
	
By: 
	 	 
	 	 	Name: John Greenwood	 
	 	 	Title: Director	 
	 	 	 	 

	 	
SHAREHOLDERS:

 
	 
	 	RINEON GROUP, INC.	 
	 	 	 	 
	
 
	
By: 
	 	 
	 	 	Name: Michael Hlavsa	 
	 	 	Title: Chief Financial Officer	 
	 	 	 	 

 

	 	NATPROV HOLDINGS, INC.	 
	 	 	 	 
	
 
	
By: 
	 	 
	 	 	Name: John Greenwood	 
	 	 	Title: President and Director	 
	 	 	 	 

 

 

13

 

 

SCHEDULE A

LIST OF SHAREHOLDERS

 

 

 

	
Name of Shareholder
	 Address
	Rineon Group, Inc	408 Royal Street, Imperial, Saskatchewan
Canada S0G 2J0

	
NatProv Holdings Inc.
	
Harbour House, Second Floor

Waterfront Drive

P.O. Box 972

Tortola, British Virgin Islands

 

 

	
Name of Shareholder
	

Number of Shares

	
Percentage of Shares Outstanding

	Rineon Group, Inc. 	
36,000 non voting  Series A Preferred Shares
	
100% of Series A Preferred Shares

	NatProv Holdings Inc.	

451,666 Ordinary Shares

	

100% of Ordinary Shares

 

14

 

 

 

 

EXHIBIT A

CERTIFICATE OF DESIGNATION, POWERS, PREFERENCES AND RIGHTS

OF

SERIES A PREFERRED SHARES

OF

AMALPHIS GROUP INC.

 

 

 

 

 

 

15

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00163-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00163-of-00352.parquet"}]]