8-K
Driveitaway Holdings, Inc. (DWAY)
UNITED
STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
FORM
8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March1, 2023
DRIVEITAWAY
HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 000-52883 | 20-4456503 |
|---|---|---|
| (State or other jurisdiction<br> of incorporation or organization) | (Commission<br> File Number) | (IRS Employer<br> Identification No.) |
3401 Market Street, Suite 200/201Philadelphia, PA 19104
(Address of principal executive office) (Zip Code)
(856) 577-2763
(Registrants’ telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| None | None | None |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter)
Emerging Growth Company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material DefinitiveAgreement.
On March 1, 2023, DriveitAway Holdings, Inc. (the “Company”) closed on a transaction with four (4) investors pursuant to respective Subscription Agreements for an aggregate amount of $62,500. Each investor was issued a Promissory Note, dated March 1, 2023 (the “Note”), for their respective investment amounts at an interest rate of 15%. The principal and interest on the Note shall be payable as follows:
| (a) | the principal balance shall be due and payable on June<br>30, 2023 (the “Maturity Date”); and |
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| (b) | All interest shall accrue and be due and payable upon the<br>Maturity Date |
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The net proceeds to the Company of $62,500 will be used for working capital and other general corporate purposes.
Pursuant to the terms of the Note, a failure to timely make any payment due on the Note or any other default of this Note shall constitute an event of default (an “Event of Default”). From and after an Event of Default has occurred under this Note, the interest rate of the Note shall be increased by five hundred (500) basis points. Such increased interest rate shall take effect upon the occurrence of any such Event of Default: (i) without notice to the Company if such default is on account of a monetary payment obligation under this Note or any other agreement by and between the Company and the Holder dated of even date herewith; or (ii) upon notice and the expiration of a ten (10) day cure period if the default is on account of any obligation other than a monetary payment obligation. The Company shall be responsible for curing such default(s) before all respective grace periods expire and for providing unambiguous written proof to Holder that such default(s) is cured, or such default(s) shall conclusively be deemed not cured.
In addition, each investor was issued a Common Stock Purchase Warrant (the “Warrant”) by the Company in an amount equal to two times the amount of their respective investments, for an aggregate amount of 125,000 warrants, at an exercise price of $0.05 per share, exercisable within five (5) years from the date of issuance. Pursuant to the terms of the Warrant, the warrants include various covenants of the Company for the benefit of the warrant holder, and also include a beneficial ownership limitation on the holder that, in certain circumstances, may serve to restrict the holder’s right to exercise the warrants. In addition, the shares issuable upon the exercise of the warrant shall be included in the next succeeding registration statement filed by the Company with the Securities and Exchange Commission.
The Note and Warrant were issued, and any shares to be issued pursuant to any conversion of the Note or the exercise of the warrants shall be issued in a private placement in reliance upon an exemption from registration provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder.
The foregoing description of the Note, Warrant, and Subscription Agreement does not purport to be complete and is qualified in their entirety by reference to the full text of the respective agreements, which are filed as Exhibits 4.1, 4.2, and 10.1, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
Item 2.03 Creation ofa Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 is incorporated herein by reference.
Item 3.02 UnregisteredSales of Equity Securities.
The information set forth under Item 1.01 is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description |
|---|---|
| 4.1 | Form of Promissory Note |
| 4.2 | Form of Common Stock Purchase Warrant |
| 10.1 | Form of Subscription Agreement |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| DRIVEITAWAY HOLDINGS, INC. | ||
|---|---|---|
| Dated: March 7, 2023 | By: | /s/ John Possumato |
| Name: | John Possumato | |
| Title: | Chief Executive Officer |
EXHIBIT 4.1
THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTEREDWITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE PURSUANT TO AN EXEMPTION FROM REGISTRATIONUNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER (THE “1933 ACT) AND MAY NOT BESOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THEY HAVE BEEN REGISTERED UNDER SUCH LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
15% PROMISSORY NOTE
| $XXXXX | New Jersey |
|---|---|
| March 1, 2023 |
FOR VALUE RECEIVED, DRIVEITAWAY HOLDINGS,INC., a Delaware corporation with an address of 3401 Market Street, Suite 200/201, Philadelphia, PA 19104 (the “Company*”)* promises to pay to the order of XXXXXXXXX with an address of XXXXXXXXXXXXXXX , and successors and assigns, (the “Holder”), the principal sum of XXXXXXXXXXXXXXXX and No/100ths Dollars ($XXXXX), together with interest on the unpaid principal balance of this Note at the rate of fifteen percent (15.0%) per annum, which principal and interest shall be payable as follows:
| (a) | the principal balance shall be due and payable on June 30, 2023 (the “Maturity Date”), and |
|---|---|
| (b) | all interest shall accrue and be due and payable at the Maturity Date. |
All payments on this Note shall be deemed made when good funds are received by the Holder at the address shown above or at such other place as Holder may designate in writing from time to time.
A failure to timely make any payment due on this Note or any other default of this Note shall constitute an event of default (an “Event of Default”). From and after an Event of Default has occurred under this Note, the interest rate of the Note shall be increased by five hundred (500) basis points. Such increased interest rate shall take effect upon the occurrence of any such Event of Default: (i) without notice to the Company if such default is on account of a monetary payment obligation under this Note or any other agreement by and between the Company and the Holder dated of even date herewith; or (ii) upon notice and the expiration of a ten (10) day cure period if the default is on account of any obligation other than a monetary payment obligation. The Company shall be responsible for curing such default(s) before all respective grace periods expire and for providing unambiguous written proof to Holder that such default(s) is cured, or such default(s) shall conclusively be deemed not cured.
If any payment owed under this Note shall not have been paid within five (5) days of the due date thereof, the Company agrees to pay to the Holder a late charge of two percent (2%) of such payment including the payment due on the Maturity Date or upon acceleration.
The Company shall pay all costs of collection of this Note, including but not limited to reasonable attorney’s fees: (a) if this Note shall be referred after an Event of Default to an attorney-at-law for collection or other appropriate action; or (b) if an action to enforce any right to or against collateral securing this Note shall be instituted after an Event of Default on this Note.
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This Note is subject to the following additional provisions:
| 1. | This Note is exchangeable for an equal aggregate principal number of notes of different authorized denominations, as requested by the Holder surrendering the same. No service charge will be made for such registration or transfer or exchange, except that Holder shall pay any tax or other governmental charges payable in connection therewith. |
|---|---|
| 2. | The Company shall be entitled to withhold from all payments any amounts required to be withheld under applicable laws. |
| 3. | This Note may be transferred or exchanged only in compliance with the Securities Act of 1933, as amended (the “Act”) and applicable state securities laws. Any attempted transfer to a non-qualifying party shall be treated by the Company as void. Prior to due presentment for transfer of this Note, the Company and any agent of the Company may treat the person in whose name this Note is duly registered on the Company’s records as the owner hereof for all other purposes, whether or not this Note be overdue, and neither the Company nor any such agent shall be affected or bound by notice to the contrary. |
| 4. | At any time, the Company shall have the option to redeem this Note and pay to the Holder the then unpaid principal amount, plus accrued but unpaid interest through the date of such redemption date, plus a ten percent (10%) premium. |
| 5. | Upon (a) a transfer of all or substantially all of the assets of the Company to any person in a single transaction or series of related transactions, (b) any consolidation or merger of the Company with or into another person or entity in which the Company is not the surviving entity (other than a merger which is effected solely to change the jurisdiction of incorporation of the Company and results in a reclassification, conversion or exchange of outstanding shares of Common Stock solely into shares of Common Stock) (each of items (a) and (b) being referred to as a “Sale Event”), then, in each case, the Company shall, upon request of the Holder, redeem this Note in cash for its then unpaid principal amount, plus accrued but unpaid interest through the date of redemption. |
Each party who is, or may become, liable on this Note in any capacity, hereby waives presentment, demand, notice of dishonor and protest, notice of extensions, modifications or alterations of the date or terms of payment hereof, and all surety defenses in the nature thereof and further consents to all extensions or modifications of the due date and terms of payment of this Note. No delay or omission on the part of the Holder shall operate as a waiver of such right or of any other right of such party, nor shall any delay, omission or waiver on any one occasion be deemed a bar to or a waiver of the same or any other right on any future occasion.
Notwithstanding anything herein to the contrary, the total interest charged on the principal amount owing hereunder from time to time shall not exceed the maximum amount allowed by law, and the Company shall not be bound or obligated to pay any interest hereunder in excess of such amount. If and to the extent the interest on this Note or any other payment required hereunder would exceed the maximum interest allowed by law, then to such extent, the excess interest payment(s) shall be deemed a partial prepayment of principal.
The Holder shall have the absolute right to sell and/or assign this Note, in whole or in part, and/or to enter into one or more participation agreements concerning this Note. If Holder gives written notice of any such sale(s), assignment(s) and/or participation(s) to the Company, they shall make payments to such subsequent holder(s) or participant(s), as the case may be.
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Wherever the context shall so require, the singular and plural shall mean each other and the masculine, feminine and neutral genders shall mean each other. This Note shall be governed by the laws of the State of New Jersey.
THE COMPANY ACKNOWLEDGES THAT THE TRANSACTION OFWHICH THIS NOTE IS A PART IS A COMMERCIAL TRANSACTION, AND HEREBY VOLUNTARILY AND KNOWINGLY WAIVES ITS RIGHT TO NOTICE AND HEARING ASALLOWED BY LAW OR ANY STATE OR FEDERAL LAW WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE HOLDER MAY DESIRE TO USE. FURTHER, THE COMPANYHEREBY WAIVES, TO THE EXTENT PERMITTED BY LAW, THE BENEFITS OF ALL VALUATION, APPRAISEMENT, HOMESTEAD EXEMPTION, STAY, REDEMPTION ANDMORATORIUM LAWS, NOW IN FORCE OR WHICH MAY HEREAFTER BECOME LAW. THE COMPANY HEREBY WAIVES, TO THE EXTENT PERMITTED BY LAW, THE BENEFITSOF TRIAL BY JURY, NOW IN FORCE OR WHICH MAY HEREAFTER BECOME LAW.
IN WITNESS WHEREOF, the Company has executed this Promissory Note on the date written above.
| DRIVEITAWAY HOLDINGS, INC. | |
|---|---|
| By: | |
| John F. Possumato | |
| Chief Executive Officer |
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EXHIBIT 4.2
NEITHER THIS SECURITY NOR THE SECURITIES AS TO WHICH THIS SECURITY MAY BE EXERCISED HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
COMMON STOCK PURCHASE WARRANT
DRIVEITAWAY HOLDINGS, INC.
Warrant Shares: XXXX
Date of Issuance: March 1, 2023 (“Issuance Date”)
This COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received (in connection with the issuance of the promissory note to the Holder (as defined below) of even date) (the “Note”), XXXXXXXX (including any permitted and registered assigns, the “Holder”), is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date of issuance hereof, to purchase from DriveItAway Holdings, Inc., a Delaware corporation (the “Company”), up to XXXXX shares of Common Stock (as defined below) (the “Warrant Shares”) (whereby such number may be adjusted from time to time pursuant to the terms and conditions of this Warrant) at the Exercise Price per share then in effect. This Warrant is issued by the Company as of the date hereof in connection with that certain subscription agreement dated January 13, 2023, by and among the Company and the Holder (the “Purchase Agreement”).
Capitalized terms used in this Warrant shall have the meanings set forth in the Purchase Agreement unless otherwise defined in the body of this Warrant or in Section 12 below. For purposes of this Warrant, the term “Exercise Price” shall mean $0.05, subject to adjustment as provided herein, and the term “Exercise Period” shall mean the period commencing on the Issuance Date and ending on 5:00 p.m. eastern standard time on the five-year anniversary thereof.
| 1. | EXERCISE OF<br>WARRANT. |
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(a) Mechanics of Exercise. Subject to the terms and conditions hereof, the rights represented by this Warrant may be exercised in whole or in part at any time or times during the Exercise Period by delivery of a written notice, in the form attached hereto as Exhibit A (the “Exercise Notice”), of the Holder’s election to exercise this Warrant. The Holder shall not be
required to deliver the original Warrant in order to effect an exercise hereunder. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. On or before the second Trading Day (the “Warrant Share Delivery Date”) following the date on which the Holder sent the Exercise Notice to the Company or the Company’s transfer agent, and upon receipt by the Company of payment to the Company of an amount equal to the applicable Exercise Price multiplied by the number of Warrant Shares as to which all or a portion of this Warrant is being exercised (the “Aggregate Exercise Price” and together with the Exercise Notice, the “Exercise Delivery Documents”) in cash or by wire transfer of immediately available funds, the Company shall (or direct its transfer agent to) issue and dispatch by overnight courier to the address as specified in the Exercise Notice, a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of shares of Common Stock to which the Holder is entitled pursuant to such exercise (or deliver such shares of Common Stock in electronic format if requested by the Holder). Upon delivery of the Exercise Delivery Documents, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the certificates evidencing such Warrant Shares. If this Warrant is submitted in connection with any exercise and the number of Warrant Shares represented by this Warrant is greater than the number of Warrant Shares being acquired upon an exercise, then the Company shall as soon as practicable and in no event later than three Business Days after any exercise and at its own expense, issue a new Warrant (in accordance with Section 6) representing the right to purchase the number of Warrant Shares purchasable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised.
If the Company fails to cause its transfer agent to transmit to the Holder the respective shares of Common Stock by the respective Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise in Holder’s sole discretion, and such failure shall be deemed an event of default under the Note.
(b) NoFractional Shares. No fractional shares shall be issued upon the exercise of this Warrant as a consequence of any adjustment pursuant hereto. All Warrant Shares (including fractions) issuable upon exercise of this Warrant may be aggregated for purposes of determining whether the exercise would result in the issuance of any fractional share. If, after aggregation, the exercise would result in the issuance of a fractional share, the number of shares issuable shall be rounded up, as the case may be, to the nearest whole share.
(c) Holder’sExercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, to the extent that after giving effect to issuance of Warrant Shares upon exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other persons acting as a group together with the Holder or any of the Holder’s Affiliates), would beneficially own in excess of the Beneficial Ownership Limitation, as defined below. For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of Common Stock issuable upon exercise of this Warrant pursuant to a pending Exercise Notice with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which
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would be issuable upon (i) exercise of the remaining, non-exercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or non-converted portion of any other securities of the Company (including without limitation any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates. Except as set forth in the preceding sentence, for purposes of this paragraph (c), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this paragraph applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any affiliates) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination.
For purposes of this paragraph, in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or its transfer agent setting forth the number of shares of Common Stock outstanding. Upon the request of a Holder, the Company shall within two Trading Days confirm to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The limitations contained in this paragraph shall apply to a successor Holder of this Warrant.
(d) Registrationof Common Stock. The shares issuable upon exercise of this Warrant shall be included in the next succeeding registration statement filed by the Company with the securities exchange commission after the Issuance Date, other than a registration statement filed on Form S-8 or Form S-4. If no such registration statement is filed or if the Company fails to include such shares in such registration statement, then no later than the date that is six months from the Issuance Date the Company shall file a registration statement with the Securities and Exchange Commission including all shares issuable upon exercise of this Warrant, and cause it to be declared effective.
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2. ADJUSTMENTS. The Exercise Price and the number of Warrant Shares shall be adjusted from time to time as follows:
(a) Distributionof Assets. If the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including without limitation any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case:
(i) any Exercise Price in effect immediately prior to the close of business on the record date fixed for the determination of holders of shares of Common Stock entitled to receive the Distribution shall be reduced, effective as of the close of business on such record date, to a price determined by multiplying such Exercise Price by a fraction (i) the numerator of which shall be the Closing Sale Price of the shares of Common Stock on the Trading Day immediately preceding such record date minus the value of the Distribution (as determined in good faith by the Company’s Board of Directors) applicable to one share of Common Stock, and (ii) the denominator of which shall be the Closing Sale Price of the shares of Common Stock on the Trading Day immediately preceding such record date; and
(ii) the number of Warrant Shares shall be increased to a number of shares equal to the number of shares of Common Stock obtainable immediately prior to the close of business on the record date fixed for the determination of holders of shares of Common Stock entitled to receive the Distribution multiplied by the reciprocal of the fraction set forth in the immediately preceding clause (i); provided, however, that in the event that the Distribution is of shares of common stock of a company (other than the Company) whose common stock is traded on a national securities exchange or a national automated quotation system (“Other Shares of Common Stock”), then the Holder may elect to receive a warrant to purchase Other Shares of Common Stock in lieu of an increase in the number of Warrant Shares, the terms of which shall be identical to those of this Warrant, except that such warrant shall be exercisable into the number of shares of Other Shares of Common Stock that would have been payable to the Holder pursuant to the Distribution had the Holder exercised this Warrant immediately prior to such record date and with an aggregate exercise price equal to the product of the amount by which the exercise price of this Warrant was decreased with respect to the Distribution pursuant to the terms of the immediately preceding clause (i) and the number of Warrant Shares calculated in accordance with the first part of this clause (ii).
(b) Anti-DilutionAdjustments to Exercise Price. If and whenever, at any time while this Warrant is outstanding, the Company issues or sells, or in accordance with this Section 2 is deemed to have issued or sold, any warrant or option to purchase Common Stock and/or Common Stock Equivalents (including shares of Common Stock owned or held by or for the account of the Company), but excluding any securities issued or sold or deemed to have been issued or sold solely in connection with an Exempt Issuance, with a purchase price per share (the “New Issuance Price”) less than the Exercise Price in effect immediately prior to such issuance or sale or deemed issuance or sale, then immediately after such issuance or sale or deemed issuance or sale, the Exercise Price then in effect shall be reduced to an amount equal to the New Issuance Price (subject to adjustment as provided herein).
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Notwithstanding the forgoing Section 2(b), in the event that the Company successfully lists shares of its common stock on a senior national securities exchange, including but not limited to the Nasdaq Stock Market and/or New York Stock Exchange, the exercise price of this Warrant shall no longer be subject to the anti-dilution adjustment provisions provided in Section 2(b) of this Warrant.
(c) Subdivisionor Combination ofCommon Stock. If the Company at any time on or after the Issuance Date subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced and the number of Warrant Shares will be proportionately increased. If the Company at any time on or after the Issuance Date combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Exercise Price in effect immediately prior to such combination will be proportionately increased and the number of Warrant Shares will be proportionately decreased. Any adjustment under this Section 2(c) shall become effective at the close of business on the date the subdivision or combination becomes effective. Each such adjustment of the Exercise Price shall be calculated to the nearest one-hundredth of a cent. Such adjustment shall be made successively whenever any event covered by this Section 2(c) shall occur.
3. FUNDAMENTAL TRANSACTIONS. If, at any time while this Warrant is outstanding, (i) the Company effects any merger of the Company with or into another entity and the Company is not the surviving entity (such surviving entity, the “Successor Entity”), (ii) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions, (iii) any tender offer or exchange offer (whether by the Company or by another individual or entity, and approved by the Company) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares of Common Stock for other securities, cash or property and the holders of at least 50% of the Common Stock accept such offer, or (iv) the Company 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 (other than as a result of a subdivision or combination of shares of Common Stock governed by Section 2(c) herein) (in any such case, a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive the number of shares of Common Stock of the Successor Entity or of the Company and any additional consideration (the “Alternate Consideration”) receivable upon or as a result of such reorganization, reclassification, merger, consolidation or disposition of assets by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such event (disregarding any limitation on exercise contained herein solely for the purpose of such determination). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any
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Successor Entity in such Fundamental Transaction shall issue to the Holder a new warrant consistent with the foregoing provisions and evidencing the Holder’s right to exercise such warrant into Alternate Consideration.
4. NON-CIRCUMVENTION. The Company covenants and agrees that it will not, by amendment of its certificate of incorporation, bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good faith carry out all the provisions of this Warrant and take all action as may be required to protect the rights of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii) shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of Common Stock upon the exercise of this Warrant, and (iii) shall, for so long as this Warrant is outstanding, have authorized and reserved, free from preemptive rights, five times the number of shares of Common Stock that is actually issuable upon full exercise of the Warrant (based on the Exercise Price in effect from time to time, and without regard to any limitations on exercise).
5. WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, this Warrant, in and of itself, shall not entitle the Holder to any voting rights or other rights as a stockholder of the Company. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company.
| 6. | REISSUANCE. |
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(a) Lost,Stolen or Mutilated Warrant. If this Warrant is lost, stolen, mutilated or destroyed, the Company will, on such terms as to indemnity or otherwise as it may reasonably impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination and tenor as this Warrant so lost, stolen, mutilated or destroyed.
(b) Issuanceof New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant shall be of like tenor with this Warrant, and shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date.
| 7. | TRANSFER. |
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(a) AssignmentGenerally. This Warrant shall be binding upon the Company and its successors and assigns, and shall inure to be the benefit of the Holder and its successors and assigns. Notwithstanding anything to the contrary herein, the rights, interests or obligations of the Company hereunder may not be assigned, by operation of law or otherwise, in whole or in part, by the Company without the prior signed written consent of the Holder, which consent may be withheld at the sole discretion of the Holder (any such assignment or transfer shall be null and void if the Company does not obtain the prior signed written consent of the Holder). This Warrant or
| 6 |
| --- |
any of the severable rights and obligations inuring to the benefit of or to be performed by Holder hereunder may be assigned by Holder to a third party, in whole or in part, without the need to obtain the Company’s consent thereto.
(b) NoTransfer Except on Compliance with the Law. The Holder of this Warrant and any transferee hereof or of the Common Stock with respect to which this Warrant may be exercisable, by his or her acceptance hereof, hereby understands and agrees that this Warrant and the Common Stock with respect to which this Warrant may be exercisable have not been registered under the Securities Act, and may not be sold, pledged, hypothecated, donated, or otherwise transferred (whether or not for consideration) without an effective registration statement under the Act or an available exemption from such registration. It shall be a condition to the transfer of this Warrant that any transferee thereof deliver to the Company its written agreement to accept and be bound by all of the terms and conditions of this Warrant. The foregoing notwithstanding, the Company acknowledges its obligations to register the Common Stock which is issuable upon exercise of this Warrant pursuant to Section 1(d) hereof.
(c) Legendon Shares issued upon Exercise. Except to the extent the resale of the shares of Common Stock issuable upon exercise hereof are registered for resale, or may be sold to the public pursuant to Rule 144 under the Securities Act, the certificates of the Company that will evidence the shares of Common Stock with respect to which this Warrant may be exercisable will be imprinted with a conspicuous legend in substantially the following form:
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED, DONATED OR OTHERWISE TRANSFERRED (WHETHER OR NOT FOR CONSIDERATION) BY THE HOLDER WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND/OR SUBMISSION TO THE COMPANY OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO COUNSEL TO THE COMPANY, IN EACH SUCH CASE, TO THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE ACT.”
8. NOTICES. Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance with the notice provisions contained in the Purchase Agreement. The Company shall provide the Holder with prompt written notice (i) immediately upon any adjustment of the Exercise Price, setting forth in reasonable detail, the calculation of such adjustment and (ii) at least ten days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the shares of Common Stock, (B) with respect to any grants, issuances or sales of any stock or other securities directly or indirectly convertible into or exercisable or exchangeable for shares of Common Stock or other property, pro rata to the holders of shares of Common Stock, or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction with such notice being provided to the Holder.
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| --- |
9. AMENDMENT AND WAIVER. The terms of this Warrant may be amended or waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the Company and the Holder.
10. GOVERNING LAW AND VENUE. This Warrant shall be governed by and construed in accordance with the laws of the State of Delaware without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Warrant shall be brought only in the state courts located in the State of New Jersey or in the federal courts located in the State of New Jersey. The parties to this Warrant hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. THE HOLDER HEREBY IRREVOCABLYWAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTIONWITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY. 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 Warrant or any other agreement delivered in connection herewith 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 enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.
11. ACCEPTANCE. Receipt of this Warrant by the Holder shall constitute acceptance of and agreement to all of the terms and conditions contained herein.
12. CERTAIN DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:
| (a) | “Nasdaq” means<br>www.Nasdaq.com. |
|---|
(b) “Closing Sale Price” means, for any security as of any date, (i) the last closing trade price for such security on the Principal Market, as reported by Nasdaq, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing trade price, then the last trade price of such security prior to 4:00 p.m., New York time, as reported by Nasdaq, or (ii) if the foregoing does not apply, the last trade price of such security in the over- the-counter market for such security as reported by Nasdaq, or (iii) if no last trade price is reported for such security by Nasdaq, the average of the bid and ask prices of any market makers for such security as reported by the OTC Markets. If the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Sale Price of such security on such date shall be the fair market value as mutually determined by the Company and the Holder.
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All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during the applicable calculation period.
(c) “Common Stock” means the Company’s common stock, and any other class of securities into which such securities may hereafter be reclassified or changed.
(d) “Common Stock Equivalents” means any securities of the Company that would entitle the holder thereof to acquire at any time Common Stock, including without limitation any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
(e) “Exempt Issuance” means (i) issuances of securities in a firm commitment underwritten public offering (excluding a continuous offering pursuant to Rule 415 under the 1933 Act), (ii) issuances to employees, officers, directors, contractors, consultants or other advisors approved by the Board, whether pursuant to a plan or on a case-by-case basis, (iii) issuances to strategic partners or other parties in connection with a commercial relationship, or providing the Company with equipment leases, real property leases or similar transactions approved by the Board, or (iv) issuances of securities as consideration for a merger, consolidation or purchase of assets, or in connection with any strategic partnership or joint venture (the primary purpose of which is not to raise equity capital), or in connection with the disposition or acquisition of a business, product or license by the Company.
(f) “Principal Market” means the primary exchange or quotation system on which the Common Stock is then traded.
(g) “Trading Day” means (i) any day on which the Common Stock is listed or quoted and traded on its Principal Market, (ii) if the Common Stock is not then listed or quoted and traded on any national securities exchange, then a day on which trading occurs on any over- the-counter markets, or (iii) if trading does not occur on the over-the-counter markets, any Business Day.
* * * * * * *
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INWITNESS WHEREOF, the Company has causedthis Warrant to beduly executed as of the Issuance Date set forth above.
| DRIVEITAWAY HOLDINGS, INC. | |
|---|---|
| By: | |
| John F. Possumato, CEO |
| 10 |
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EXHIBIT A
EXERCISE NOTICE
(To be executed by the registered holder to exercise this Common Stock Purchase Warrant)
THE UNDERSIGNED holder hereby exercises the right to purchase ___________ of the shares of Common Stock (“Warrant Shares”) of DriveItAway Holdings, Inc., a Delaware corporation (the “Company”), evidenced by the attached copy of the Common Stock Purchase Warrant (the “Warrant”). Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.
1. Form of Exercise Price. The Holder intends that payment of the Exercise Price shall be made with respect to Warrant Shares.
2. Payment of Exercise Price. The holder shall pay the applicable Aggregate Exercise Price in the sum of $ to the Company in accordance with the terms of the Warrant.
3. Delivery of Warrant Shares. The Company shall deliver to the holder Warrant Shares in accordance with the terms of the Warrant.
| Date: | |
|---|---|
| (Print Name of Registered Holder) | |
| By: | |
| Name: | |
| Title: |
| 11 |
| --- |
EXHIBIT B
ASSIGNMENT OF WARRANT
(To be signed only upon authorized transfer of the Warrant)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto the right to purchase shares of common stock of DriveItAway Holdings, Inc. to which the within Common Stock Purchase Warrant relates and appoints
, as attorney-in-fact, to transfer said right on the books of DriveItaway Holdings, Inc. with full power of substitution and re-substitution in the premises. By accepting such transfer, the transferee has agreed to be bound in all respects by the terms and conditions of the within Warrant.
| Dated: | |
|---|---|
| (Signature) * | |
| (Name) | |
| (Address) | |
| (Social Security or Tax Identification No.) |
* The signature on this Assignment of Warrant must correspond to the name as written upon the face of the Common Stock Purchase Warrant in every particular without alteration or enlargement or any change whatsoever. When signing on behalf of a corporation, partnership, trust or other entity, please indicate your position(s) and title(s) with such entity.
12
EXHIBIT 10.1
SUBSCRIPTION AGREEMENT
To: DRIVEITAWAY HOLDINGS, INC.
**RE:**15% NOTESWITH WARRANTS
Dated: January 13, 2023
Gentlemen:
| 1. | Subscription. |
|---|
The undersigned (the “Purchaser”), intending to be legally bound, hereby irrevocably agrees to purchase from DriveItAway Holdings, Inc., a Delaware Corporation (the “Company”), the number of Units, set forth on the Signature Page at the end of this Subscription Agreement (the “Agreement”) at a purchase price of $50,000 per Unit with each Unit consisting of a 120 days 15% Note (“Note”) and a warrant exercisable for 100,000 shares of the Company”s Common Stock (“Common Stock”) at an exercise price of $.05 per share ( collectively, the “Shares”), upon the terms and conditions hereinafter set forth (the “Offering”). This subscription is submitted to the Company accordance with and subject to the terms and conditions described in this Agreement and in the Term Sheet attached hereto as Exhibit B.
The undersigned is delivering (i) the subscription payment by check made payable to the Company or by wire using the instructions attached hereto as Exhibit C and (ii) one executed copy of this Agreement, to:
Paul Patrizio, Esq.
Patrizio & O”Leary LLP
300 Carnegie Center, Suite 150
Princeton, NJ 08540
ppatrizio@po-legal.com
The undersigned understands that the Units are being issued pursuant to the exemption from the registration requirements of the United States Securities Act of 1933, as amended (the “Securities Act”), provided by Regulation D Rule 506 of such Securities Act. As such, the Units are only being offered and sold to investors who qualify as “accredited investors,” and the Company is relying on the representations made by the undersigned in this Agreement that the undersigned qualifies as such an accredited investor. The Units, the Notes and the Shares are “restricted securities” for purposes of the United States securities laws and cannot be transferred except as permitted under these laws. The Company”s common stock publicly trades in the OTC Market under the symbol DWAY.
| 2. | Acceptance of Subscription. |
|---|
The Offering will be open until the sale of all of the Units.
| 1 |
| --- |
Subject to applicable state securities laws, the Purchaser may not revoke any subscription that such Purchaser delivers to the Company. However, the undersigned understands and agrees that the Company, in its sole discretion, may (i) reject the subscription of any Purchaser, whether or not qualified, in whole or in, part, and (ii) may withdraw the Offering at any time prior to the termination of the Offering. The Company shall have no obligation to accept subscriptions in the order received. This subscription shall become binding only if accepted by the Company.
| 3. | Term Sheet and Information. |
|---|
The Purchaser hereby acknowledges review of the Term Sheet attached hereto as Exhibit B (the “Term Sheet”) and review of the Company”s filings with the SEC (the “Material Information”). This Offering is subject to the terms and conditions set forth in the Term Sheet which are incorporated by reference herein.
| 4. | Representations and Warranties. |
|---|---|
| 1. | The<br> Company represents and warrants to, and agrees with the undersigned as follows, in each case<br> as of the date hereof and in all material respects as of the date of any closing, except<br> for any changes resulting solely from the Offering: |
| --- | --- |
| 1. | The Company is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation with full power and authority to own, lease, license and use its properties and assets and to carry out the business in which it is engaged. The Company is in good standing as a foreign corporation in every jurisdiction in which its ownership, leasing, licensing or use of property or assets or the conduct of its business makes such qualification necessary, except where the failure to be so qualified would not have a material adverse effect on the Company. |
| --- | --- |
| 2. | Each outstanding share of Common Stock is validly authorized, validly issued, fully paid and non-assessable, without any personal liability attaching to the ownership thereof and has not been issued and is not or will not be owned or held in violation of any preemptive rights of stockholders. |
| 3. | There is no litigation, arbitration, claim, governmental or other proceeding (formal or informal), or investigation pending or, to the best knowledge of the officers of the Company, threatened with respect to the Company, or any of its subsidiaries, operations, businesses, properties or assets such as individually or in the aggregate do not now have and could not reasonably be expected have a material adverse effect upon the operations, business, properties or assets of the Company. |
| 4. | The Company is not in violation of, or in default with respect to, any law, rule, regulation, order, judgment or decree such as in the aggregate do not now have and will not in the future have a material adverse effect upon the operations, business, properties or assets of the Company; nor is the Company required to take any action in order to avoid any such violation or default. |
| 2 |
| --- | | 5. | The Company has all requisite power and authority (i) to execute, deliver and perform its obligations under this Agreement, and (ii) to issue and sell the Units in the Offering. | | --- | --- | | 6. | No consent, authorization, approval, order, license, certificate or permit of or from, or declaration or filing with, any United States federal, state, local, or other applicable governmental authority, or any court or any other tribunal, is required by the Company for the execution, delivery or performance by the Company of this Agreement or the issuance and sale of the Units, except such filings and consents as may be required and have been or at the initial closing will have been made or obtained under the laws of the United States federal and state securities laws. | | 7. | The execution, delivery and performance of this Agreement and the issuance of the Units will not violate or result in a breach of, or entitle any party (with or without the giving of notice or the passage of time or both) to terminate or call a default under any agreement or violate or result in a breach of any term of the Company”s Articles of Incorporation or Bylaws of, or violate any law, rule, regulation, order, judgment or decree binding upon, the Company, or to which any of its operations, businesses, properties or assets are subject, the breach, termination or violation of which, or default under which, would have a material adverse effect on the operations, business, properties or assets of the Company. | | 8. | The Shares issuable through the Units in this Offering are validly authorized and, if and when issued in accordance with the terms and conditions set forth in the Term Sheet and in this Agreement, will be validly issued, fully paid and non-assessable without any personal liability attaching to the ownership thereof, and will not be issued in violation of any preemptive or other rights of stockholders. | | 9. | The Term Sheet and the Material Information do not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading. Without limiting the generality of the foregoing, there has been no material adverse change in the financial condition, results of operations, business, properties, assets, liabilities, or, to the knowledge of the Company, future prospects of the Company from the latest information set forth in the Material Information. | | 2. | The<br> undersigned hereby represents and warrants to, and agrees with, the Company as follows: | | --- | --- | | 1. | The<br> undersigned is an “Accredited Investor” as that term is defined in Rule 501 (a)<br> of Regulation D promulgated under the Securities Act, a copy of which is attached hereto<br> as Exhibit A to this Agreement. “ | | --- | --- |
| 3 |
| --- | | 2. | If<br> a natural person, the undersigned is: a bona fide resident of the state or<br> non-United States jurisdiction contained in the address set forth on the Signature Page of<br> this Agreement as the undersigned”s home address; at least 21 years of age; and legally<br> competent to execute this Agreement. If an entity, the undersigned has its principal offices<br> or principal place of business in the state or non-United States jurisdiction contained in<br> the address set forth on the Signature Page of this Agreement, the individual signing on<br> behalf of the undersigned is duly authorized to execute this Agreement and this Agreement<br> constitutes the legal, valid and binding obligation of the undersigned enforceable against<br> the undersigned in accordance with its terms. | | --- | --- | | 3. | The undersigned has received, read carefully and is familiar with this Agreement, the Term Sheet and the information in the Material Information. | | --- | --- | | 4. | The undersigned (or the undersigned”s purchaser representative) has such knowledge and experience in finance, securities, taxation, investments and other business matters so as to be able to protect the interests of the undersigned in connection with this transaction, and the undersigned”s investment in the Company hereunder is not material when compared to the undersigned”s total financial capacity. | | 5. | The undersigned understands the various risks of an investment in the Company as proposed herein and can afford to bear such risks, including, without limitation, the risks of losing the entire investment. | | 6. | The undersigned acknowledges that a limited market for the Common Stock of the Company presently exists as it trades in the OTC Markets and no major market may develop in the future. Accordingly, the undersigned understands he may find it impossible to liquidate the investment at a time when it may be desirable to do so, or at any other time. | | 7. | The undersigned has been advised by the Company that neither of the Shares nor the Units has been registered under the Securities Act, that they will be issued on the basis of the statutory exemption provided by Rule 506 of the Securities Act or Regulation D promulgated thereunder, or both, relating to transactions by an issuer not involving any public offering and under similar exemptions under certain state securities laws; that this transaction has not been reviewed by, passed on or submitted to any federal or state agency or self- regulatory organization where an exemption is being relied upon; and that the Company”s reliance thereon is based in part upon the representations made by the undersigned in this Agreement. | | 8. | The undersigned acknowledges that the undersigned has been informed by the Company of or is otherwise familiar with, the nature of the limitations imposed by the Securities Act and the rules and regulations thereunder on the transfer of the Shares. In particular, the undersigned agrees that no sale, assignment or transfer of any of the Shares shall be valid or effective, and the Company shall not be required to give any effect to such a sale, assignment or transfer, unless (i) the sale, assignment or transfer of such Shares is registered |
| 4 |
| --- |
under the Securities Act, it being understood that the Shares are not currently registered for sale and that the Company has no obligation or intention to so register the Shares, except as contemplated by the terms of the Term Sheet or (ii) such Shares are sold, assigned or transferred in accordance with all the requirements and limitations of Rule 144 under the Securities Act , or (iii) such sale, assignment or transfer is otherwise exempt from registration under the Securities Act, including Regulation S promulgated thereunder. The undersigned further understands that an opinion of counsel and other documents may be required to transfer the Shares.
| 9. | The<br> undersigned acknowledges that the Shares shall be subject to a stop transfer order and the<br> certificate or certificates evidencing any Shares shall bear the following or a substantially<br> similar legend or such other legend as may appear on the forms of common stock and such other<br> legends as may be required by state blue sky laws: |
|---|
THESECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE “ACT”)OR. APPLICABLE STATE SECURITIES LAWS, AND SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR UNLESSSUCH SALE OR TRANSFER IS EXEMPT FROM SUCH REGISTRATION REQUIREMENTS OF THE ACT AND APPLICABLE STATE SECURITIES LAWS.
| 10. | The undersigned will acquire the Units for the undersigned”s own account (or for the joint account of the undersigned and the undersigned”s spouse either in joint tenancy, tenancy by “he entirety or tenancy in common) for investment and not with a view to the sale or distribution thereof or the granting of any participation therein and has no present intention of distributing or selling to others any of such interest or granting any participation therein. |
|---|---|
| 11. | No oral or written representations have been made other than as stated in the Term Sheet or Material Information, and no oral or written information furnished to the undersigned or the undersigned”s advisor(s) in connection with the Offering were in any way inconsistent with the information stated in the Term Sheet and Material Information. |
| 12. | The undersigned has consulted his own financial, legal and tax advisors with respect to the economic, legal and tax consequences of an investment in the Units and has not relied on the Term Sheet or the Company, its officers, directors or professional advisors for advice as to such consequences. |
| 5. | Indemnification. |
| --- | --- |
The Purchaser understands the meaning and legal consequences of the representations and warranties contained in Section 4.2, and agrees to indemnify and hold harmless the Company and each member, officer, employee, agent or representative thereof against any and all loss, damage or liability due to or arising out of a breach of any representation or warranty, or breach or failure to comply with any covenant, of the Purchaser, whether contained in the Term Sheet or this Subscription Agreement.
| 5 |
| --- |
Notwithstanding any of the representations, warranties, acknowledgments or agreements made herein by the Purchaser, the Purchaser does not thereby or in any other manner waive any rights granted to the Purchaser under federal or state securities laws.
| 6. | Provisions of Certain State Laws. |
|---|
IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED TIE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE NEW YORK UNIFORM SECURITIES ACT AND, THEREFORE, CANNOT BE RESOLD UNLESS THEY ARE REGISTERED UNDER THE ACT OR UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
| 7. | Additional Documents. |
|---|
The Purchaser hereby acknowledges, and the Company hereby agrees, that there are additional documents that are required to be executed by the parties hereto to effectuate the terms and conditions of the Term Sheet and both parties agree to execute and be bound by such additional documents.
| 8. | Irrevocability; Binding Effect. |
|---|
The Purchaser hereby acknowledges and agrees that the Subscription hereunder is irrevocable, that the Purchaser is not entitled to cancel, terminate or revoke this Subscription. Agreement or any agreements of the undersigned thereunder and that this Subscription Agreement and such other agreements shall survive the death or disability of the Purchaser and shall be binding upon and inure to the benefit of the parties and their heirs, executors, administrators, successors, legal representatives and assigns. If the Purchaser is more than one person, the obligations of the Purchaser hereunder 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 his heirs, executors, legal representatives and assigns.
| 6 |
| --- | | 9. | Modification. | | --- | --- |
Neither this Subscription Agreement nor any provisions hereof shall be waived, modified, discharged or terminated except by an instrument in writing signed by the party against whom any such waiver, modification, discharge or termination is sought.
| 10. | Notices. |
|---|
Any notice, demand or other communication which any party hereto may be required, or may elect, to give to any other party hereunder shall be sufficiently given if (a) deposited, postage prepaid, in a United States mailbox, stamped registered or certified mail, return receipt requested, addressed to such address as may be listed on the books of the Company, or (b) delivered personally at such address.
| 11. | Counterparts. |
|---|
This Subscription Agreement may be executed through the use of separate signature pages or in any number of counterparts, and each such counterpart shall, for all purposes, constitute one agreement binding on all parties, notwithstanding that all parties are not signatories to the same counterpart.
| 12. | Entire Agreement. |
|---|
This Subscription Agreement contains the entire agreement of the parties with respect to the subject matter hereof and there are no representations, covenants or other agreements except as stated or referred to herein.
| 13. | Severability. |
|---|
Each provision of this Subscription Agreement is intended to be severable from every other provision, and the invalidity or illegality of any Portion hereof shall not affect the validity or legality of the remainder hereof.
| 14. | Assignability. |
|---|
This Subscription Agreement is not transferable or assignable by the Purchaser.
| 15. | Applicable Law. |
|---|
This Subscription Agreement shall be governed by and construed in accordance with the laws of the State of Delaware as applied to residents of that State executing contracts wholly to be performed in that State.
| 16. | Choice of Jurisdiction. |
|---|
The parties agree that any action arising in connection with this Subscription Agreement, or any transaction covered hereby shall be resolved within the State of New Jersey.
| 7 |
| --- |
INWITNESS THEREOF, the undersigned exercises and agrees to be bound by this Subscription Agreement by executing the Signature Page attached hereto on the date therein indicated.
By executing this Signature Page, the undersigned hereby executes, adopts and agrees to all terms, conditions and representations of this Subscription Agreement and acknowledges all requirements are met by the purchaser to purchase Units in the Company.
| Number of Units Subscribed at 50,000 per Unit:___________________________________________ |
|---|
| Aggregate Purchase Price: __________________________________________ |
| Type of ownership: |
All values are in US Dollars.
IN WITNESS WHEREOF, the undersigned Purchaser has executed this Signature Page this_____________ day of_____________________, 202_____.
| Exact Name in which Units are | Exact Name in which Units are to |
|---|---|
| to be Registered | be Registered |
| Signature | Signature |
| Print Name | Print Name |
| Tax Identification Number: | Tax Identification Number |
| Mailing Address | Mailing Address |
| 8 |
| --- |
Additional Optional Information
| Phone Number | Phone Number |
|---|---|
| E-Mail Address | E-Mail Address |
ACCEPTANCE OF SUBSCRIPTION
DRIVEITAWAY HOLDINGS, INC. hereby accepts this subscription of Units.
| DRIVEITAWAY HOLDINGS, INC. |
|---|
| By: |
| Name: |
| Title: |
| Date: |
| 9 |
| --- |
Exhibit A to Subscription Agreement
DEFINITION OF “ACCREDITED INVESTOR”
WITHIN THE MEANING OF REGULATION D
An accredited investor means any person who comes within any of the following categories, or whom the Company reasonably believes comes within any of the following categories, at the time of the sale of the Shares to that person:
● any bank as defined in Section 3(a)(2) of the Securities Act or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary capacity; any broker dealer registered pursuant to Section 15 of the Exchange Act; any insurance company as defined in Section 2(13) of the Securities Act; any investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that act; any Small Business Investment Company licensed by the U.S., Small Business Administration under Section 301 (c) or (d) of the Small Business Investment Act of 1958; any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000; any employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000, or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors;
● any private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940;
● any organization described in Section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000;
| ● | any<br> of the directors or executive officers of the Company; |
|---|
● any natural person whose individual net worth, or joint net worth with that person”s spouse, at the time of investment in the Common Stock, exceeds $1,000,000;
● any natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person”s spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching that same income level in the current year;
● any trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Common Stock, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii) of Regulation D; or
| ● | any<br> entity in which all of the equity owners are accredited investors. |
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Exhibit B
OFFERINGSUMMARY TERM SHEET
| Issuer: | DriveItAway Holdings, Inc. (the “Company”). Current Ticker Symbol: DWAY (OTC). |
|---|---|
| Issue: | $200,000 of Notes (the “Note”) and warrants (the “Warrants”) to purchase up to 400,000 shares of common stock of the Company (“Common Stock”). |
| Investors: | Accredited Investors |
| Units: | 4 Units consisting of a $50,000 Note and a Warrant as described below shall be sold until the $200,000 is sold. The Company may accept partial Units in its sole discretion. |
| Warrants: | Each $50,000 Unit shall include a five-year Warrant (the “Warrant”) to purchase up to 100,000 shares of Common Stock at a price of $.05 per share (the “Shares”). |
| Interest: | Each Note shall bear interest at the annual rate of 15%, payable, in cash, at maturity. |
| Maturity: **** | 120 days from issuance. |
| Rule 144: | So long as any of the Notes, Shares or Warrants are outstanding, the Company must timely file and remain current in its periodic filings with the SEC and must fully cooperate with Investors” requests for information including but not limited to the procuring of a legal opinion for the sale of any shares received from the Warrants pursuant to Rule 144. |
| Use of Proceeds: | The Company will use the aggregate net proceeds for working capital and general corporate purposes. |
| Registration Rights: | The holders of the Warrants shall be entitled to piggyback registration rights whereby the shares of Common Stock underlying such securities will be registered on any Registration Statement which is filed after the issuance of such Warrants. |
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EXHIBITC
WIREINSTRUCTIONS
| BANK: | XXXXXXXXXX |
|---|---|
| ABA NUMBER: | XXXXXXXXXX |
| ACCOUNT NAME: | XXXXXXXXXX |
| ACCOUNT NUMBER: | XXXXXXXXXXX |
| BANK ADDRESS: | XXXXXXXXXXX |
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