Exhibit 10.2
STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made this 1st day of December 2005 by and between
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (hereinto referred to as the "Shareholder"), the controlling
stockholder of THE ▇▇▇▇▇▇▇ RIVERS COMPANY, INC, (The "Company"), a corporation
organized under the laws of Florida; and ▇▇▇▇▇ ▇▇▇▇▇▇, an Individual, (hereinto
referred to as "Buyer").
WHEREAS, the Shareholder, once the conditions as set forth in this
Agreement have been fulfilled, desires to sell 50% of his shares of Preferred
Series A stock of the Company, par value $0.001 per share (the "Preferred A
Stock"), and
WHEREAS, Buyer desires to purchase the Preferred Series A Stock of the
Company;
NOW, THEREFORE, in consideration of the foregoing and the following mutual
covenants and agreements, the parties hereto agree as follows:
1. Purchase of Stock. At the closing of this Agreement (the "Closing"),
upon the basis of the covenants, warranties and representations set forth in
this Agreement, the Shareholder will sell, transfer, assign, and deliver to
Buyer 480,000 shares of Preferred A Stock, free and clear of all liens and
encumbrances, except as otherwise may be permitted hereunder.
2. Purchase Price. The purchase price for the Preferred A Stock to be paid
to the Shareholder by Buyer is $150,000.00 (the "Purchase Price").
3. Restrictive Legend. All shares of the Preferred A Stock to be delivered
hereunder shall bear a restrictive legend in substantially the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS AND NEITHER SUCH SHARES NOR ANY INTEREST THEREIN MAY BE OFFERED,
SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS A REGISTRATION STATEMENT
WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT AND ANY APPLICABLE
STATE SECURITIES LAWS, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT."
4. Representations and Warranties of the Shareholder. Where a
representation contained in this Agreement is qualified by the phrase "to the
best of the Shareholder's knowledge" (or words of similar import), such
expression means that, after having conducted a due diligence review, the
Shareholder believes the statement to be true, accurate, and complete in all
material respects. Knowledge shall not be imputed nor shall it include any
matters which such person should have known or should have been reasonably
expected to have known. The Shareholder represents and warrants to Buyer as
follows:
(a) Power and Authority. The Shareholder has full power and
authority to execute, deliver, and perform this Agreement and all other
agreements, certificates or documents to be delivered in connection herewith,
including, without limitation, the other agreements, certificates and documents
contemplated hereby (collectively the "Other Agreements").
(b) Binding Effect. Upon execution and delivery by the Shareholder,
this Agreement and the Other Agreements shall be and constitute the valid,
binding and legal obligations of the Shareholder, enforceable against the
Shareholder in accordance with the terms hereof and thereof, except as the
enforceability hereof or thereof may be subject to the effect of (i) any
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or affecting creditors' rights generally, and (ii) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
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(c) Effect. Neither the execution and delivery of this Agreement or
the Other Agreements nor full performance by the Shareholder of its obligations
hereunder or thereunder will violate or breach, or otherwise constitute or give
rise to a default under, the terms or provisions of the Articles of
Incorporation or Bylaws of the Company or, subject to obtaining any and all
necessary consents, of any contract, commitment or other obligation of the
Company or necessary for the operation of the Company following the Closing or
any other material contract, commitment, or other obligation to which the
Company is a party, or create or result in the creation of any encumbrance on
any of the property of the Company. The Company is not in violation of its
Articles of Incorporation, as amended, its Bylaws, as amended, or of any
indebtedness, mortgage, contract, lease, or other agreement or commitment.
(d) No Consents. No consent, approval or authorization of, or
registration, declaration or filing with any third party, including, but not
limited to, any governmental department, agency, commission or other
instrumentality, will, except such consents, if any, delivered or obtained on or
prior to the Closing, be obtained or made by the Shareholder prior to the
Closing to authorize the execution, delivery and performance by the Shareholder
of this Agreement or the Other Agreements.
(e) Stock Ownership of the Shares to be Sold by the Shareholder. The
Shareholder has good, absolute, and marketable title to 960,000 shares of the
Preferred A Stock which constitute 100% percent of the issued and outstanding
shares of the Preferred A Stock. The shares of the Stock to be sold by the
Shareholder hereunder constitute one-half (1/2) of all of the shares of the
capital stock of the Company owned by the Shareholder. The Shareholder has the
complete and unrestricted right, power and authority to cause the sale,
transfer, and assignment of the Stock pursuant to this Agreement. The delivery
of the Stock to Buyer as herein contemplated will vest in Buyer good, absolute
and marketable title to the shares of the Stock as described herein, free and
clear of all liens, claims, encumbrances, and restrictions of every kind, except
those restrictions imposed by applicable securities laws or this Agreement. No
one affiliated with the Shareholder or any of its officers, directors, or
principal stockholders owns any shares of the capital stock of the Company,
other than the shares of the Stock owned by the Shareholder.
(f) Organization and Standing of the Company. The Company is a duly
organized and validly existing Florida corporation in good standing, with all
requisite corporate power and authority to carry on its business as presently
conducted. The Company is qualified to do business in all other jurisdictions
where it does or plans to do business.
(g) Capitalization and Other Outstanding Shares. The authorized
capital stock of the Company consists solely of 990,000,000,000 shares of common
stock, par value $.00001 per share ("Company Common Stock"), of which 8,177,624
shares are issued and outstanding and 1,000,000,000 shares of Preferred Stock,
of which (i) 1,000,000 shares have been designated as Series A Preferred Stock
of which 960,000 are issued and outstanding and (ii) 10,000,000 have been
designated as Series B Preferred Stock of which no shares are issued and
outstanding. There are no outstanding options, contracts, commitments, warrants,
preemptive rights, agreements or any rights of any character affecting or
relating in any manner to the issuance of the Stock or other securities or
entitling anyone to acquire the Stock or other securities of the Company.
(h) The Shareholder's Representations and Warranties True and
Complete. All representations and warranties of the Shareholder in this
Agreement and the Other Agreements are true, accurate and complete in all
material respects as of the Closing.
(i) No Knowledge of the Company's Default. The Shareholder have no
knowledge that any of the Company's representations and warranties contained in
this Agreement or the Other Agreements are untrue, inaccurate or incomplete or
that Shareholder or Company is in default under any term or provision of this
Agreement or the Other Agreements.
(j) No Untrue Statements. No representation or warranty by the
Shareholder in this Agreement or in any writing furnished or to be furnished
pursuant hereto, contains or will contain any untrue statement of a material
fact, or omits, or will omit to state any material fact required to make the
statements herein or therein contained not misleading.
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(k) Reliance. The foregoing representations and warranties are made
by the Shareholder with the knowledge and expectation that Buyer is placing
complete reliance thereon.
(l) Conduct of Business in Normal Course. The Company will carry on
its business and activities in substantially the same manner as they previously
have been carried out and will not institute any unusual or novel methods of
manufacture, purchase, sale, lease, management, accounting, or operation that
vary materially from those methods used by the Company as of the date of this
Agreement.
5. Representations and Warranties of Buyer. Where a representation
contained in this Agreement is qualified by the phrase "to the best of Buyer's
knowledge" (or words of similar import), such expression means that, after
having conducted a due diligence review, Buyer believes the statement to be
true, accurate, and complete in all material respects. Knowledge shall not be
imputed nor shall it include any matters which such person should have known or
should have been reasonably expected to have known. Buyer hereby represents and
warrants to the Shareholder as follows:
(a) Power and Authority. Buyer has full power and authority to
execute, deliver and perform this Agreement and the Other Agreements.
(b) Binding Effect. Upon execution and delivery by Buyer, this
Agreement and the Other Agreements shall be and constitute the valid, binding
and legal obligations of Buyer enforceable against Buyer in accordance with the
terms hereof or thereof, except as the enforceability hereof and thereof may be
subject to the effect of (i) any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting creditors'
rights generally, and (ii) general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law).
(c) No Consents. No consent, approval or authorization of, or
registration, declaration or filing with any third party, including, but not
limited to, any governmental department, agency, commission or other
instrumentality, will, except such consents, if any, delivered or obtained on or
prior to the Closing, be obtained or made by Buyer prior to the Closing to
authorize the execution, delivery and performance by Buyer of this Agreement or
the Other Agreements.
(d) Buyer's Representations and Warranties True and Complete. All
representations and warranties of Buyer in this Agreement and the Other
Agreements are true, accurate and complete in all material respects as of the
Closing.
(e) No Knowledge of the Buyer's Default. Buyer has no knowledge that
any of the Buyer representations and warranties contained in this Agreement or
the Other Agreements are untrue, inaccurate or incomplete in any respect or that
the Shareholder is in default under any term or provision of this Agreement or
the Other Agreements.
(f) No Untrue Statements. No representation or warranty by Buyer in
this Agreement or in any writing furnished or to be furnished pursuant hereto,
contains or will contain any untrue statement of a material fact, or omits, or
will omit to state any material fact required to make the statements herein or
therein contained not misleading.
(g) Reliance. The foregoing representations and warranties are made
by Buyer with the knowledge and expectation that the Shareholder is placing
complete reliance thereon.
6. The Nature and Survival of Representations, Covenants and Warranties.
All statements and facts contained in any memorandum, certificate, instrument,
or other document delivered by or on behalf of the parties hereto for
information or reliance pursuant to this Agreement, shall be deemed
representations, covenants and warranties by the parties hereto under this
Agreement. All representations, covenants and warranties of the parties shall
survive the Closing and all inspections, examinations, or audits on behalf of
the parties, shall expire one year following the Closing.
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7. Indemnification by the Shareholder. The Shareholder agrees to indemnify
and hold harmless Buyer against and in respect to all damages (as hereinafter
defined) up to the amount of the Purchase Price. Damages, as used herein shall
include any claim, salary, wage, action, tax, demand, loss, cost, expense,
liability (joint or several), penalty, and other damage, including, without
limitation, counsel fees and other costs and expenses reasonably incurred in
investigating or attempting to avoid same or in opposition to the imposition
thereof, or in enforcing this indemnity, resulting to Buyer from any inaccurate
representation made by or on behalf of the Shareholder in or pursuant to this
Agreement, breach of any of the warranties made by or on behalf of the
Shareholder in or pursuant to this Agreement, or breach or default in the
performance by the Shareholder of any of the obligations to be performed by it
hereunder.
Notwithstanding the scope of the Shareholder's representations and
warranties herein, or of any individual representation or warranty, or any
disclosure to Buyer herein or pursuant hereto, or the definition of damages
contained in the preceding sentence, or Buyer's knowledge of any fact or facts
at or prior to the Closing, damages shall also include all debts, liabilities,
and obligations of any nature whatsoever (whether absolute, accrued, contingent,
or otherwise, and whether due or to become due) of the Company, as of the date
hereof, whether known or unknown by the Shareholder; all claims, actions,
demands, losses, costs, expenses, and liabilities resulting from any litigation
from causes of action arising prior to the Closing involving the Company or any
stockholders thereof other than the Shareholder, whether or not disclosed to
Buyer; all claims, actions, demands, losses, costs, expenses, liabilities and
penalties resulting from (i) the Company's infringement or claimed infringement
upon or acting adversely to the rights or claimed rights of any person under or
in respect to any copyrights, trademarks, trademark rights, patents, patent
rights or patent licenses; or (ii) any claim or pending or threatened action
with respect to the matters described in clause (i); all claims, actions,
demands, losses, costs, expenses, liabilities or penalties resulting from the
Company's failure in any respect to perform any obligation required by it to be
performed at or prior to the Closing, or by reason of any default of the
Company, at the Closing, under any of the contracts, agreements, leases,
documents, or other commitments to which it is a party or otherwise bound or
affected; and all losses, costs, and expenses (including without limitation all
fees and disbursements of counsel) relating to damages.
The Shareholder shall reimburse and/or pay on behalf of Buyer and/or the
Company on demand for any payment made or required to be made by Buyer and/or
the Company at any time after the Closing based upon the judgment of any court
of competent jurisdiction or pursuant to a bona fide compromise or settlement of
claims, demands or actions, in respect to the damages to which the foregoing
indemnity relates. Buyer shall give, or Buyer shall cause the Company to give,
the Shareholder written notice within 30 days after notification of any
litigation threatened or instituted against the Company which might constitute
the basis of a claim for indemnity by Buyer and/or the Company against the
Shareholder.
Notwithstanding anything contained in this Agreement to the contrary, the
right to indemnification described in this paragraph shall expire 24 months
after the Closing.
8. Further Conveyances and Assurances. After the Closing, the Shareholder
and Buyer will, without further cost or expense to, or consideration of any
nature from the other, execute and deliver, or cause to be executed and
delivered, to the other, such additional documentation and instruments of
transfer and conveyance, and will take such other and further actions, as the
other may reasonably request as more completely to sell, transfer and assign to
and fully vest in Buyer ownership of the Stock and to consummate the
transactions contemplated hereby. The Shareholder and the Buyer further covenant
and agree that neither of them will take any action (either as a shareholder, a
director, or otherwise) to authorize the issuance of any of the remaining 40,000
authorized shares of the Series A Preferred Stock without the written consent of
the other party.
9. Closing. The Closing of the sale and purchase contemplated hereunder
shall be on or before December 1, 2005, and shall be subject to the faithful and
final execution of the Merger Agreement by and between The ▇▇▇▇▇▇▇ Rivers
Company and Diverse Networks, Inc. ("Merger Agreement").
10. Deliveries at the Closing by the Shareholder. At the Closing the
Shareholder, shall deliver to Buyer:
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(a) Certificates representing 480,000 shares of the Preferred A
Stock, free and clear of all liens, claims, encumbrances, and restrictions of
every kind except for the restrictive legend required by Paragraph 3 hereof.
(b) Any other document which may be necessary to carry out the
intent of this Agreement.
11. Deliveries at the Closing by Buyer. At the Closing, Buyer shall
deliver to the Shareholder the following:
(a) A Promissory Note (the "Note") for the Purchase Price, as set
forth in Exhibit A.
(b) A Pledge Agreement (the "Pledge") as set forth in Exhibit B
(c) Any other document which may be necessary to carry out the
intent of this Agreement.
12. Default and Reversal of the Agreement.
(a) Buyer shall be held in default if Buyer is unable to execute
fully or uphold the terms and conditions of the Merger Agreement between ▇▇▇▇▇▇▇
▇▇▇▇▇▇ Company and Diverse Networks, Inc. ("Merger Agreement"). Any default by
Buyer of the Merger Agreement shall be deemed an immediate default of this
Agreement. The Merger Agreement is hereby attached herein as Exhibit C.
13. No Assignment. This Agreement shall not be assignable by any party
without the prior written consent of the other parties, which consent shall be
subject to such parties' sole, absolute and unfettered discretion.
14. Brokerage. The Shareholder and Buyer agree to indemnify and hold
harmless each other against, and in respect of, any claim for brokerage or other
commissions relative to this Agreement, or the transactions contemplated hereby,
based in any way on agreements, arrangements, understandings or contracts made
by either party with a third party or parties whatsoever.
15. Mediation and Arbitration. All disputes arising or related to this
Agreement must exclusively be resolved first by mediation with a mediator
selected by the parties, with such mediation to be held in California. If such
mediation fails, then any such dispute shall be resolved by binding arbitration
under the Commercial Arbitration Rules of the American Arbitration Association
in effect at the time the arbitration proceeding commences. Any party may seek
from a court of competent jurisdiction any provisional remedy that may be
necessary to protect its rights or assets pending the selection of the
arbitrator or the arbitrator's determination of the merits of the controversy.
The exercise of such arbitration rights by any party will not preclude the
exercise of any self-help remedies (including without limitation, setoff rights)
or the exercise of any non-judicial foreclosure rights. An arbitration award may
be entered in any court having jurisdiction.
16. Attorney's Fees. In the event that it should become necessary for any
party entitled hereunder to bring suit against any other party to this Agreement
for enforcement of the covenants contained in this Agreement, the parties hereby
covenant and agree that the party or parties who are found to be in violation of
said covenants shall also be liable for all reasonable attorney's fees and costs
of court incurred by the other party or parties that bring suit.
17. Benefit. All the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by each of the
parties hereto, and his respective heirs, executors, administrators, personal
representatives, successors and permitted assigns.
18. Notices. All notices, requests, demands, and other communications
hereunder shall be in writing and delivered personally or sent by registered or
certified United States mail, return receipt requested with postage prepaid, or
by telecopy or e-mail, if to the Shareholder, addressed to ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ telephone (▇▇▇) ▇▇▇-▇▇▇▇, and
e-mail ▇▇▇▇▇▇▇▇@▇▇▇.▇▇▇ and if to Buyer, addressed to ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇ at
______________________, Houston, TX telephone __________ email
▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇. Any party hereto may change its address upon 10 days'
written notice to any other party hereto.
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19. Construction. Words of any gender used in this Agreement shall be held
and construed to include any other gender, and words in the singular number
shall be held to include the plural, and vice versa, unless the context requires
otherwise.
20. Waiver. No course of dealing on the part of any party hereto or its
agents, or any failure or delay by any such party with respect to exercising any
right, power or privilege of such party under this Agreement or any instrument
referred to herein shall operate as a waiver thereof, and any single or partial
exercise of any such right, power or privilege shall not preclude any later
exercise thereof or any exercise of any other right, power or privilege
hereunder or thereunder.
21. Cumulative Rights. The rights and remedies of any party under this
Agreement and the instruments executed or to be executed in connection herewith,
or any of them, shall be cumulative and the exercise or partial exercise of any
such right or remedy shall not preclude the exercise of any other right or
remedy.
22. Invalidity. In the event any one or more of the provisions contained
in this Agreement or in any instrument referred to herein or executed in
connection herewith shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect the other provisions of this Agreement or any such other
instrument.
23. Time of the Essence. Time is of the essence of this Agreement.
24. Incorporation by Reference. The Exhibits and Schedules to this
Agreement referred to or included herein constitute integral parts to this
Agreement and are incorporated into this Agreement by this reference.
25. Controlling Agreement. In the event of any conflict between the terms
of this Agreement or any of the Other Agreements or exhibits referred to herein,
the terms of this Agreement shall control.
26. Law Governing; Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of California, without regard
to any conflicts of laws provisions thereof. Each party hereby irrevocably
submits to the personal jurisdiction of the United States District Court for San
Diego County, California over any suit, action or proceeding arising out of or
relating to this Agreement. Each party hereby irrevocably waives, to the fullest
extent permitted by law, any objection which it may now or hereafter have to the
laying of the venue of any such mediation, arbitration, suit, action or
proceeding brought in any such county and any claim that any such mediation,
arbitration, suit, action or proceeding brought in such county has been brought
in an inconvenient forum.
27. Multiple Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. A facsimile transmission
of this signed Agreement shall be legal and binding on all parties hereto.
28. Entire Agreement. This instrument and the attachments hereto contain
the entire understanding of the parties and may not be changed orally, but only
by an instrument in writing signed by the party against whom enforcement of any
waiver, change, modification, extension, or discharge is sought.
SIGNATURE PAGE FOLLOWS
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IN WITNESS WHEREOF, this Agreement has been executed on the date first
written above.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, AN INDIVIDUAL
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, An individual
▇▇▇▇▇ ▇▇▇▇▇▇, AN INDIVIDUAL
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇, An Individual
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