SECURITIES PURCHASE AGREEMENT
Exhibit 10.2
SECURITIES PURCHASE
AGREEMENT
This SECURITIES PURCHASE AGREEMENT (this “Agreement”) is made as of July 1, 2023 (the “Effective Date”) by and between Decentralized Sharing Systems, Inc., a Nevada Corporation, (the “Seller”), and Sharing Services Global Corporation, a Nevada Corporation (the “Buyer”).
RECITALS
WHEREAS, Seller and Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506(b) of Regulation D (“Regulation D”) as promulgated under the Securities Act;
WHEREAS, Seller owns all of the issued and outstanding shares of common stock, (the “Shares”) of HWH World, Inc., a Texas corporation (“HWHW”);
WHEREAS, Seller wishes to sell to Buyer, and Xxxxx wishes to purchase from Seller, the Shares, subject to the terms and conditions set forth herein;
WHEREAS, Seller wishes to sell 1,000 shares of common stock, par value $0.001 per share, representing all of the issued and outstanding shares of common stock of HWHW (the “HWHW Shares”) to Buyer in consideration of i) $10.00 paid immediately in cash (the “Cash Proceeds”) and ii) up to a maximum of $711,299.70 paid from Gross Proceeds (as defined hereinafter) generated from the sale of HWHW’s inventory (the “Inventory Proceeds”), as described and priced in detail in exhibit A (“EXHIBIT A”), payable on a quarterly basis from the Effective Date; as well as upon the terms and conditions set forth in this Agreement.
WHEREAS, Xxxxx wishes to purchase the HWHW Shares from Seller in consideration for the Cash Proceeds and Inventory Proceeds (together, the “Purchase Price”), upon the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Seller and Buyer hereby agree as follows:
1. SALE AND PURCHASE OF SHARES.
1.1 On the terms and subject to the conditions set forth in this Agreement, on the Effective Date (the “Closing”) Seller will sell, convey, transfer and assign to Buyer, free and clear of all liens, pledges, encumbrances, changes, restrictions or known claims of any kind, nature or description, and Buyer will purchase by payment of the Cash Proceeds and accept from Seller, the HWHW Shares. In consideration therefor, Buyer will accept from Seller, the HWHW Shares, free and clear of all liens, pledges, encumbrances, changes, restrictions or known claims of any kind, nature or description. Xxxxx accepts the entirety of the Company, as is, with all liabilities and assets unless otherwise stated in section 1.7.
1.2 Notwithstanding anything to the contrary contained herein this Agreement, Buyer shall not be obligated to pay any Inventory Proceeds generated more than three (3) years after the Effective Date.
1.3 Intentionally omitted.
1.4 For the purposes of calculating the Inventory Proceeds, “Gross Proceeds” shall mean any amounts that Buyer receives from the sale of HWHW’s inventory, net of the related cost of goods as detailed in Exhibit A.
1.5 Intentionally omitted.
| 1 |
1.6 Buyer shall provide Seller with access and the right to any books and records relating to HWHW, for a period of three (3) years from the Effective Date, to allow for full transparency and accountability in verifying calculations related to the Inventory Proceeds.
1.7 Notwithstanding anything to the contrary contained herein this Agreement, Seller acknowledges and agrees that the Seller shall remain responsible for any legal liabilities in connection with HWHW’s liabilities (“Litigation Liabilities”) associated with a certain “Maiden” litigation. The Litigation Liabilities are expected to reach approximately $910,279 as of July 1st, 2023.
2. REPRESENTATIONS AND WARRANTIES.
2.1 REPRESENTATIONS AND WARRANTIES BY SELLER. Seller represents and warrants to Buyer as follows as of the date hereof:
(a) Requisite Power and Authority. Seller has all necessary power and authority to execute and deliver this Agreement and the other agreements and instruments entered into or delivered by any of the parties hereto in connection with the transactions contemplated hereby and thereby (the “Transaction Documents”) and to carry out their provisions. All action on Seller’s part required for the execution and delivery of this Agreement and the other Transaction Documents has been taken. Upon its execution and delivery, this Agreement and the other Transaction Documents will be valid and binding obligations of Seller, enforceable in accordance with their respective terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting enforcement of creditors’ rights, and (b) as limited by general principles of equity that restrict the availability of equitable remedies.
(b) No Violations. The execution and delivery of the Transaction Documents, and the consummation by Seller of the transactions contemplated thereby, does not result in a violation of any law, rule, regulation, order, judgment or decree (foreign or domestic and including federal and state securities laws and regulations) applicable to the Company or by which any material property or asset of Seller is bound or affected other than any of the foregoing which would not have a Material Adverse Effect.
(c) Good Title. The HWHW Shares are owned free and clear of any lien, encumbrance, adverse claim, restriction on sale, transfer or voting (other than restrictions imposed by applicable securities laws), preemptive right, option or other right to purchase, and upon the consummation of the sale of such HWHW Shares as contemplated hereby, Buyer will have good title to such HWHW Shares, free and clear of any lien, encumbrance, adverse claim, restriction on sale, transfer or voting (other than restrictions imposed by applicable securities laws), preemptive right, option or other right to purchase.
2.2 REPRESENTATIONS AND WARRANTIES BY BUYER. Buyer represents and warrants to Seller, as of the date hereof, as follows:
(a) Investment Representations.
| (i) | Buyer understands that the HWHW Shares have not been registered under the Securities Act of 1933, as amended (the “Securities Act”) or any other applicable securities laws. Buyer also understands that the HWHW Shares are being offered pursuant to an exemption from the registration requirements of the Securities Act, under Section 4(2) and/or Regulation D of the Securities Act. Seller acknowledges that Buyer will rely on Seller’s representations, warranties and certifications set forth below for purposes of determining Seller’s suitability as an investor in the HWHW Shares and for purposes of confirming the availability of the Section 4(2) and/or Regulation D exemption from the registration requirements of the Securities Act. |
| 2 |
| (ii) | Buyer has received all the information it considers necessary or appropriate for deciding whether to acquire the HWHW Shares. Buyer understands the risks involved in an investment in the HWHW Shares. Buyer further represents that it, through its authorized representatives, has had an opportunity to ask questions and receive answers from Seller regarding the terms and conditions of the offering of the HWHW Shares and the business, properties, prospects, and financial condition of HWHW and to obtain such additional information (to the extent Buyer possessed such information or could acquire it without unreasonable effort or expense) necessary to verify the accuracy of any information furnished to Seller or to which Seller had access. Seller further represents that it is an “accredited investor” within the meaning of Rule 501(a) of the Securities Act. |
| (iii) | Buyer is acquiring the HWHW Shares for its own account for business and strategic development only and not with a view towards their resale or “distribution” (within the meaning of the Securities Act) of any part of the HWHW Shares. |
| (iv) | Buyer understands that the HWHW Shares may not be offered, sold or otherwise transferred except in compliance with the registration requirements of the Securities Act and any other applicable securities laws or pursuant to an exemption therefrom, and in each case in compliance with the conditions set forth in this Agreement. Buyer acknowledges and is aware that the HWHW Shares may not be sold pursuant to Rule 144 adopted under the Securities Act unless certain conditions are met and until Seller has held the HWHW Shares for the applicable holding period under Rule 144. |
| (v) | Buyer acknowledges and agrees that each certificate representing the HWHW Shares, or book entry made in lieu of certificates, shall bear a legend substantially in the following form: |
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE 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.”
(b) No Reliance. Buyer has not relied on and is not relying on any representations, warranties or other assurances regarding Seller other than the representations and warranties expressly set forth in this Agreement.
(c) Organization and Good Standing. Buyer is duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or organization, as the case may be.
(d) Requisite Power and Authority. Buyer has all necessary power and authority to execute and deliver this Agreement and the other Transaction Documents and to carry out their provisions. All action on Xxxxx’s part required for the execution and delivery of this Agreement and the other Transaction Documents has been taken. Upon its execution and delivery, this Agreement and the other Transaction Documents will be valid and binding obligations of Buyer, enforceable in accordance with their respective terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting enforcement of creditors’ rights, and (b) as limited by general principles of equity that restrict the availability of equitable remedies.
| 3 |
(e) No Reliance. Buyer has not relied on and is not relying on any representations, warranties or other assurances regarding HWHW other than the representations and warranties expressly set forth in this Agreement.
2.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and warranties shall survive the Closing for a period of 12 months and shall be fully enforceable at law or in equity against the parties and each party’s successors and assigns.
3. CLOSING.
3.1 Conditions to Seller’s Obligations. The obligations of Seller under this Agreement, (including, without limitation, the obligation to transfer the HWHW Shares) shall be subject to satisfaction of the following conditions, unless waived by Seller: (i) Buyer shall have performed in all material respects all agreements, and satisfied in all material respects all conditions on its part to be performed or satisfied hereunder, at or prior to the Closing; (ii) all of the representations and warranties of Buyer herein shall have been true and correct in all respects when made, shall have continued to have been true and correct in all respects at all times subsequent thereto, and shall be true and correct in all material respects on and as of the Closing as though made on, as of, and with reference to such Closing; (iii) Buyer shall have obtained or made, as applicable, all consents, authorizations and approvals from, and all declarations, filings and registrations required to consummate the transactions contemplated by this Agreement, including all items required under the incorporation document and bylaws of Buyer; (iv) Buyer shall have reviewed this Agreement and the transactions contemplated herein (the “Transaction”).
3.2 Conditions to Buyer’s Obligations. The obligations of Buyer under this Agreement, (including, without limitation, the obligation to pay the Seller the Cash Proceeds and Inventory Proceeds, shall be subject to satisfaction of the following conditions, unless waived by Buyer: (i) Seller shall have performed in all respects all agreements, and satisfied in all respects all conditions on his part to be performed or satisfied hereunder, at or prior to the Closing; (ii) all of the representations and warranties of Seller herein shall have been true and correct in all material respects when made, shall have continued to have been true and correct in all material respects at all times subsequent thereto, and shall be true and correct in all material respects on and as of the Closing as though made on, as of, and with reference to such Closing; (iii) Seller shall have executed and delivered to Buyer all documents necessary to transfer the HWHW Shares to Buyer, as contemplated by this Agreement; and (iv) Seller shall have obtained or made, as applicable, all consents, authorizations and approvals from, and all declarations, filings and registrations required to consummate the transactions contemplated by this Agreement.
3.3 Closing Documents. At the Closing
(a) Seller shall deliver to Buyer, in form and substance reasonably satisfactory to Buyer a duly executed copy of this Agreement, together with any other Transaction Documents (ii) certificates evidencing the HWHW Shares, together with stock powers duly for such certificates to allow such certificates to be registered in the name of Buyer, or evidence of such book-entry transfer of the HWHW Shares to Buyer.
(b) Xxxxx shall deliver to Seller, in form and substance reasonably satisfactory to Seller (i) a duly executed copy of this Agreement, together with any other Transaction Documents (ii) copies of resolutions adopted by the board of directors of Buyer and certified by the Secretary of Buyer authorizing the execution and delivery of, and performance of Xxxxx’s obligations under, this Agreement.
| 4 |
4. MISCELLANEOUS.
4.1 ADDRESSES AND NOTICES. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via e-mail transmission prior to 5:00 P.M., New York City time, on a trading day, (b) the next trading day after the date of transmission, if such notice or communication is delivered via e-mail transmission on a day that is not a trading day or later than 5:00 P.M., New York City time, on any trading day, (c) the trading day following the date of mailing, if sent by U.S. nationally recognized overnight courier service with next day delivery specified, or (d) upon actual receipt by the party to whom such notice is required to be given. The address and e-mail address for such notices and communications shall be as follows:
If to Buyer to:
|
Sharing Services Global Corporation Address: 0000 Xxxxxxxx Xxxxxxx Xxxxx XX 00000 | |
| If to Seller to: | Decentralized Sharing Systems, Inc. Address: 000 Xxxxxxxxx Xxxx Xxxxxxxxx, Xxx Xxxx 00000 | |
| With copies to: | Xxxxxxxxx Xxxx Xxxxxxx LLP 0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx Xxx Xxxx, Xxx Xxxx 00000 Attention: Xxxxxx X. Xxxxxx Xxxxxxxxx No.: (000) 000-0000 Sichenzia Email: XXXxxxxx@XXX.XXX |
Any such person may by notice given in accordance with this Section 4.1 to the other parties hereto designate another address or person for receipt by such person of notices hereunder.
4.2 TITLES AND CAPTIONS. TITLES AND CAPTIONS. All Article and Section titles or captions in this Agreement are for convenience only. They shall not be deemed part of this Agreement and do not in any way define, limit, extend or describe the scope or intent of any provisions hereof.
4.3 ASSIGNABILITY. This Agreement is not transferable or assignable by the undersigned.
4.4 PRONOUNS AND PLURALS. Whenever the context may require, any pronoun used herein shall include the corresponding masculine, feminine or neuter forms. The singular form of nouns, pronouns and verbs shall include the plural and vice versa.
4.5 FURTHER ACTION. The parties shall execute and deliver all documents, provide all information and take or forbear from taking all such action as may be necessary or appropriate to achieve the purposes of this Agreement. Each party shall bear its own expenses in connection therewith.
4.6 APPLICABLE LAW. This Agreement shall be construed in accordance with and governed by the laws of the State of Texas without regard to its conflict of law rules.
4.7 BINDING EFFECT. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, administrators, successors, legal representatives, personal representatives, permitted transferees and permitted assigns. If the undersigned is more than one person, the obligation of the undersigned shall be joint and several and the agreements, representations, warranties and acknowledgments herein contained shall be deemed to be made by and be binding upon each such person and such person’s heirs, executors, administrators and successors.
| 5 |
4.8 INTEGRATION. This Agreement constitutes the entire agreement among the parties pertaining to the subject matter hereof and supersedes and replaces all prior and contemporaneous agreements and understandings, whether written or oral, pertaining thereto, including without limitation, the Prior Agreement. No covenant, representation or condition not expressed in this Agreement shall affect or be deemed to interpret, change or restrict the express provisions hereof.
4.9 AMENDMENT. Neither this Agreement nor any term or provision hereof may be amended, modified, waived or supplemented orally, but only by a written consent executed by the parties hereto.
4.10 CREDITORS. None of the provisions of this Agreement shall be for the benefit of or enforceable by creditors of any party.
4.11 WAIVER. No failure by any party to insist upon the strict performance of any covenant, agreement, term or condition of this Agreement or to exercise any right or remedy available upon a breach thereof shall constitute a waiver of any such breach or of such or any other covenant, agreement, term or condition.
4.12 RIGHTS AND REMEDIES. The rights and remedies of each of the parties hereunder shall be mutually exclusive, and the implementation of one or more of the provisions of this Agreement shall not preclude the implementation of any other provision.
4.13 COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.
SIGNATURES ON THE
FOLLOWING PAGES
| 6 |
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed by their respective representatives hereunto authorized as of the day and year first above written.
| By Seller: | ||
| DECENTRALIZED SHARING SYSTEMS, INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
| By Buyer: | ||
| SHARING SERVICES GLOBAL CORPORATION | ||
| By: | ||
| Name: | ||
| Title: | ||
| 7 |
EXHIBIT A
| 8 |
EXHIBIT B
| 9 |
