netSECURITIES PURCHASE AGREEMENT
netSECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of
October 7, 2013, by and between WWA GROUP, INC., a Nevada corporation, with
headquarters located at 00000 Xxxxxxxx Xxxxxx - Xxxxx 000, Xxxxxxxx Xxxxxxx, XX 00000 (the
“Company”), and XXXXX ENTERPRISES, INC., a Delaware corporation, with its address at 0
Xxxxxx Xxxxx, Xxxxx 000, Xxxxx Xxxx, XX 00000 (the “Buyer”).
WHEREAS:
A.
The Company and the Buyer are executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by the rules and regulations as
promulgated by the United States Securities and Exchange Commission (the “SEC”) under the
Securities Act of 1933, as amended (the “1933 Act”);
B.
Buyer desires to purchase and the Company desires to issue and sell, upon the
terms and conditions set forth in this Agreement an 8% convertible note of the Company, in the
form attached hereto as Exhibit A, in the aggregate principal amount of $32,500.00 (together
with any note(s) issued in replacement thereof or as a dividend thereon or otherwise with respect
thereto in accordance with the terms thereof, the “Note”), convertible into shares of common
stock, $0.001 par value per share, of the Company (the “Common Stock”), upon the terms and
subject to the limitations and conditions set forth in such Note.
C.
The Buyer wishes to purchase, upon the terms and conditions stated in this
Agreement, such principal amount of Note as is set forth immediately below its name on the
signature pages hereto; and
NOW THEREFORE, the Company and the Buyer severally (and not jointly) hereby
agree as follows:
1.
Purchase and Sale of Note.
a.
Purchase of Note. On the Closing Date (as defined below), the
Company shall issue and sell to the Buyer and the Buyer agrees to purchase from the Company
such principal amount of Note as is set forth immediately below the Buyer’s name on the
signature pages hereto.
b.
Form of Payment. On the Closing Date (as defined below), (i) the
Buyer shall pay the purchase price for the Note to be issued and sold to it at the Closing (as
defined below) (the “Purchase Price”) by wire transfer of immediately available funds to the
Company, in accordance with the Company’s written wiring instructions, against delivery of the
Note in the principal amount equal to the Purchase Price as is set forth immediately below the
Buyer’s name on the signature pages hereto, and (ii) the Company shall deliver such duly
executed Note on behalf of the Company, to the Buyer, against delivery of such Purchase Price.
c.
Closing Date. Subject to the satisfaction (or written waiver) of the
conditions thereto set forth in Section 6 and Section 7 below, the date and time of the issuance
and sale of the Note pursuant to this Agreement (the “Closing Date”) shall be 12:00 noon,
Eastern Standard Time on or about October 9, 2013, or such other mutually agreed upon time.
The closing of the transactions contemplated by this Agreement (the “Closing”) shall occur on
the Closing Date at such location as may be agreed to by the parties.
2.
Buyer’s Representations and Warranties.
The Buyer represents and
warrants to the Company that:
a.
Investment Purpose.
As of the date hereof, the Buyer is
purchasing the Note and the shares of Common Stock issuable upon conversion of or otherwise
pursuant to the Note (including, without limitation, such additional shares of Common Stock, if
any, as are issuable (i) on account of interest on the Note, (ii) as a result of the events described
in Sections 1.3 and 1.4(g) of the Note or (iii) in payment of the Standard Liquidated Damages
Amount (as defined in Section 2(f) below) pursuant to this Agreement, such shares of Common
Stock being collectively referred to herein as the “Conversion Shares” and, collectively with the
Note, the “Securities”) for its own account and not with a present view towards the public sale or
distribution thereof, except pursuant to sales registered or exempted from registration under the
1933 Act; provided, however, that by making the representations herein, the Buyer does not
agree to hold any of the Securities for any minimum or other specific term and reserves the right
to dispose of the Securities at any time in accordance with or pursuant to a registration statement
or an exemption under the 1933 Act.
b.
Accredited Investor Status. The Buyer is an “accredited investor”
as that term is defined in Rule 501(a) of Regulation D (an “Accredited Investor”).
c.
Reliance on Exemptions.
The Buyer understands that the
Securities are being offered and sold to it in reliance upon specific exemptions from the
registration requirements of United States federal and state securities laws and that the Company
is relying upon the truth and accuracy of, and the Buyer’s compliance with, the representations,
warranties, agreements, acknowledgments and understandings of the Buyer set forth herein in
order to determine the availability of such exemptions and the eligibility of the Buyer to acquire
the Securities.
d.
Information. The Buyer and its advisors, if any, have been, and for
so long as the Note remain outstanding will continue to be, furnished with all materials relating
to the business, finances and operations of the Company and materials relating to the offer and
sale of the Securities which have been requested by the Buyer or its advisors. The Buyer and its
advisors, if any, have been, and for so long as the Note remain outstanding will continue to be,
afforded the opportunity to ask questions of the Company. Notwithstanding the foregoing, the
Company has not disclosed to the Buyer any material nonpublic information and will not
disclose such information unless such information is disclosed to the public prior to or promptly
following such disclosure to the Buyer. Neither such inquiries nor any other due diligence
investigation conducted by Buyer or any of its advisors or representatives shall modify, amend or
affect Buyer’s right to rely on the Company’s representations and warranties contained in
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Section 3 below.
The Buyer understands that its investment in the Securities involves a
significant degree of risk. The Buyer is not aware of any facts that may constitute a breach of any
of the Company's representations and warranties made herein.
e.
Governmental Review.
The Buyer understands that no United
States federal or state agency or any other government or governmental agency has passed upon
or made any recommendation or endorsement of the Securities.
f.
Transfer or Re-sale. The Buyer understands that (i) the sale or re-
sale of the Securities has not been and is not being registered under the 1933 Act or any
applicable state securities laws, and the Securities may not be transferred unless (a) the Securities
are sold pursuant to an effective registration statement under the 1933 Act, (b) the Buyer shall
have delivered to the Company, at the cost of the Buyer, an opinion of counsel that shall be in
form, substance and scope customary for opinions of counsel in comparable transactions to the
effect that the Securities to be sold or transferred may be sold or transferred pursuant to an
exemption from such registration, which opinion shall be accepted by the Company, (c) the
Securities are sold or transferred to an “affiliate” (as defined in Rule 144 promulgated under the
1933 Act (or a successor rule) (“Rule 144”)) of the Buyer who agrees to sell or otherwise
transfer the Securities only in accordance with this Section 2(f) and who is an Accredited
Investor, (d) the Securities are sold pursuant to Rule 144, or (e) the Securities are sold pursuant
to Regulation S under the 1933 Act (or a successor rule) (“Regulation S”), and the Buyer shall
have delivered to the Company, at the cost of the Buyer, an opinion of counsel that shall be in
form, substance and scope customary for opinions of counsel in corporate transactions, which
opinion shall be accepted by the Company; (ii) any sale of such Securities made in reliance on
Rule 144 may be made only in accordance with the terms of said Rule and further, if said Rule is
not applicable, any re-sale of such Securities under circumstances in which the seller (or the
person through whom the sale is made) may be deemed to be an underwriter (as that term is
defined in the 0000 Xxx) may require compliance with some other exemption under the 1933 Act
or the rules and regulations of the SEC thereunder; and (iii) neither the Company nor any other
person is under any obligation to register such Securities under the 1933 Act or any state
securities laws or to comply with the terms and conditions of any exemption thereunder (in each
case). Notwithstanding the foregoing or anything else contained herein to the contrary, the
Securities may be pledged as collateral in connection with a bona fide margin account or other
lending arrangement.
g.
Legends. The Buyer understands that the Note and, until such time
as the Conversion Shares have been registered under the 1933 Act may be sold pursuant to Rule
144 or Regulation S without any restriction as to the number of securities as of a particular date
that can then be immediately sold, the Conversion Shares may bear a restrictive legend in
substantially the following form (and a stop-transfer order may be placed against transfer of the
certificates for such Securities):
“NEITHER THE ISSUANCE AND SALE OF THE SECURITIES
REPRESENTED
BY
THIS
CERTIFICATE
NOR
THE
SECURITIES
INTO
WHICH
THESE
SECURITIES
ARE
EXERCISABLE HAVE BEEN REGISTERED UNDER THE
3
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.”
The legend set forth above shall be removed and the Company shall issue a certificate
without such legend to the holder of any Security upon which it is stamped, if, unless otherwise
required by applicable state securities laws, (a) such Security is registered for sale under an
effective registration statement filed under the 1933 Act or otherwise may be sold pursuant to
Rule 144 or Regulation S without any restriction as to the number of securities as of a particular
date that can then be immediately sold, or (b) such holder provides the Company with an opinion
of counsel, in form, substance and scope customary for opinions of counsel in comparable
transactions, to the effect that a public sale or transfer of such Security may be made without
registration under the 1933 Act, which opinion shall be accepted by the Company so that the sale
or transfer is effected. The Buyer agrees to sell all Securities, including those represented by a
certificate(s) from which the legend has been removed, in compliance with applicable prospectus
delivery requirements, if any. In the event that the Company does not accept the opinion of
counsel provided by the Buyer with respect to the transfer of Securities pursuant to an exemption
from registration, such as Rule 144 or Regulation S, at the Deadline, it will be considered an
Event of Default pursuant to Section 3.2 of the Note.
h.
Authorization; Enforcement. This Agreement has been duly and
validly authorized. This Agreement has been duly executed and delivered on behalf of the
Buyer, and this Agreement constitutes a valid and binding agreement of the Buyer enforceable in
accordance with its terms.
i.
Residency. The Buyer is a resident of the jurisdiction set forth
immediately below the Buyer’s name on the signature pages hereto.
3.
Representations and Warranties of the Company.
The Company
represents and warrants to the Buyer that:
4
a.
Organization and Qualification.
The Company and each of its
Subsidiaries (as defined below), if any, is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction in which it is incorporated, with full power and
authority (corporate and other) to own, lease, use and operate its properties and to carry on its
business as and where now owned, leased, used, operated and conducted. Schedule 3(a) sets
forth a list of all of the Subsidiaries of the Company and the jurisdiction in which each is
incorporated.
The Company and each of its Subsidiaries is duly qualified as a foreign
corporation to do business and is in good standing in every jurisdiction in which its ownership or
use of property or the nature of the business conducted by it makes such qualification necessary
except where the failure to be so qualified or in good standing would not have a Material
Adverse Effect. “Material Adverse Effect” means any material adverse effect on the business,
operations, assets, financial condition or prospects of the Company or its Subsidiaries, if any,
taken as a whole, or on the transactions contemplated hereby or by the agreements or instruments
to be entered into in connection herewith.
“Subsidiaries” means any corporation or other
organization, whether incorporated or unincorporated, in which the Company owns, directly or
indirectly, any equity or other ownership interest.
b.
Authorization; Enforcement. (i) The Company has all requisite
corporate power and authority to enter into and perform this Agreement, the Note and to
consummate the transactions contemplated hereby and thereby and to issue the Securities, in
accordance with the terms hereof and thereof, (ii) the execution and delivery of this Agreement,
the Note by the Company and the consummation by it of the transactions contemplated hereby
and thereby (including without limitation, the issuance of the Note and the issuance and
reservation for issuance of the Conversion Shares issuable upon conversion or exercise thereof)
have been duly authorized by the Company’s Board of Directors and no further consent or
authorization of the Company, its Board of Directors, or its shareholders is required, (iii) this
Agreement has been duly executed and delivered by the Company by its authorized
representative, and such authorized representative is the true and official representative with
authority to sign this Agreement and the other documents executed in connection herewith and
bind the Company accordingly, and (iv) this Agreement constitutes, and upon execution and
delivery by the Company of the Note, each of such instruments will constitute, a legal, valid and
binding obligation of the Company enforceable against the Company in accordance with its
terms.
c.
Capitalization. As of the date hereof, the authorized capital stock
of the Company consists of: (i) 250,000,000 shares of Common Stock, $0.001 par value per
share, of which 122,841,922 shares are issued and outstanding; and (ii) there are no authorized
shares of Preferred Stock; no shares are reserved for issuance pursuant to the Company’s stock
option plans, no shares are reserved for issuance pursuant to securities (other than the Note and a
prior convertible promissory note in favor of the Buyer dated August 19, 2013 in the amount of
$32,500.00 for which 21,500,000 shares of Common Stock are presently reserved) exercisable
for, or convertible into or exchangeable for shares of Common Stock and 42,750,000 shares are
reserved for issuance upon conversion of the Note. All of such outstanding shares of capital
stock are, or upon issuance will be, duly authorized, validly issued, fully paid and non-
assessable. No shares of capital stock of the Company are subject to preemptive rights or any
other similar rights of the shareholders of the Company or any liens or encumbrances imposed
through the actions or failure to act of the Company. As of the effective date of this Agreement,
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(i) there are no outstanding options, warrants, scrip, rights to subscribe for, puts, calls, rights of
first refusal, agreements, understandings, claims or other commitments or rights of any character
whatsoever relating to, or securities or rights convertible into or exchangeable for any shares of
capital stock of the Company or any of its Subsidiaries, or arrangements by which the Company
or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of
the Company or any of its Subsidiaries, (ii) there are no agreements or arrangements under which
the Company or any of its Subsidiaries is obligated to register the sale of any of its or their
securities under the 1933 Act and (iii) there are no anti-dilution or price adjustment provisions
contained in any security issued by the Company (or in any agreement providing rights to
security holders) that will be triggered by the issuance of the Note or the Conversion Shares.
The Company has furnished to the Buyer true and correct copies of the Company’s Certificate of
Incorporation as in effect on the date hereof (“Certificate of Incorporation”), the Company’s By-
laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible
into or exercisable for Common Stock of the Company and the material rights of the holders
thereof in respect thereto. The Company shall provide the Buyer with a written update of this
representation signed by the Company’s Chief Executive on behalf of the Company as of the
Closing Date.
d.
Issuance of Shares. The Conversion Shares are duly authorized
and reserved for issuance and, upon conversion of the Note in accordance with its respective
terms, will be validly issued, fully paid and non-assessable, and free from all taxes, liens, claims
and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights
or other similar rights of shareholders of the Company and will not impose personal liability
upon the holder thereof.
e.
Acknowledgment of Dilution.
The Company understands and
acknowledges the potentially dilutive effect to the Common Stock upon the issuance of the
Conversion Shares upon conversion of the Note. The Company further acknowledges that its
obligation to issue Conversion Shares upon conversion of the Note in accordance with this
Agreement, the Note is absolute and unconditional regardless of the dilutive effect that such
issuance may have on the ownership interests of other shareholders of the Company.
f.
No Conflicts. The execution, delivery and performance of this
Agreement, the Note by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby (including, without limitation, the issuance and reservation for
issuance of the Conversion Shares) will not (i) conflict with or result in a violation of any
provision of the Certificate of Incorporation or By-laws, or (ii) violate or conflict with, or result
in a breach of any provision of, or constitute a default (or an event which with notice or lapse of
time or both could become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture, patent, patent license or
instrument to which the Company or any of its Subsidiaries is a party, or (iii) result in a
violation of any law, rule, regulation, order, judgment or decree (including federal and state
securities laws and regulations and regulations of any self-regulatory organizations to which the
Company or its securities are subject) applicable to the Company or any of its Subsidiaries or by
which any property or asset of the Company or any of its Subsidiaries is bound or affected
(except for such conflicts, defaults, terminations, amendments, accelerations, cancellations and