DWAY 8-K
Driveitaway Holdings, Inc. (DWAY)
UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) |
(Commission File Number) |
(IRS Employer Identification No.) |
(Address of principal executive office) (Zip Code)
(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:
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 Definitive Agreement.
On June 30, 2022, DriveitAway Holdings, Inc (the “Company”) closed on a transaction with two (2) investors pursuant to respective Subscription Agreements for an aggregate amount of $250,000, for five (5) Units. Each Unit, priced at $50,000, consists a twenty four (24) month Secured Promissory Note (the “Note”), at an interest rate of 15%, which is convertible at $0.20 per share into shares of the Company’s common stock. The principal and interest on the Note shall be payable as follows:
| (a) | the principal balance and all accrued and unpaid interest, late fees, etc. shall be due and payable on June 30, 2024 (the “Maturity Date”), and |
| (b) | interest shall be paid monthly in cash on the Note commencing 90 days from its issuance, and, |
| (c) | at the Maturity Date, interest owed for the initial 90-day period shall be payable in full. |
After payment of the legal fees and due diligence costs, the net proceeds to the Company of $230,000 will be used to acquire EV vehicles and 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.
The Notes are secured by a Security Agreement upon an Event of Default. The collateral under the Security Agreement includes all vehicles owned by the Company, as well as all proceeds and products on the vehicles, including, without limitation, all payments under insurance or any indemnity or warranty payable on the vehicles.
Each Unit also provides for warrants issued to the investors (the “Warrant”) subject to a Common Stock Purchase Warrant, issued by the Company, for 25,000 shares of the Company’s common stock at an exercise price of $0.30 per share, exercisable within five (5) years from the date of issuance. The Warrant also includes various covenants of the Company for the benefit of the warrant holder and includes a beneficial ownership limitation on the holder that, in certain circumstances, may serve to restrict the holder’s right to exercise the Warrant. In addition, the shares issuable upon exercise of the Warrant shall be included in the next succeeding registration statement filed by the Company with the Securities and Exchange Commission (the “SEC”)..
In addition, the Company granted the investors piggyback registration rights, pursuant to a Piggyback Registration Rights Agreement, whereby the Company agreed too, among other things, provide registration rights for common stock convertible under the Note or shares issued pursuant to an exercise of the Warrant, to register the underlying shares should the Company file a registration statement with the SEC for the purpose of effecting a public offering of common stock.
The Note and Warrant was issued, and any shares to be issued pursuant to any conversion of the Note or the exercise of the Warrant 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, Common Stock Purchase Warrant, Subscription Agreement, Security Agreement and Piggyback Registration Rights 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, 10.2 and 10.3, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
Item 2.03 Creation of a 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 Unregistered Sales 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 Secured Convertible Note |
| 4.2 | Form of Common Stock Purchase Warrant |
| 10.1 | Form of Subscription Agreement |
| 10.2 | Form of Security Agreement |
| 10.3 | Form of Piggyback Registration Rights 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: July 7, 2022 | By: | /s/ John Possumato |
| Name: | John Possumato | |
| Title: | Chief Executive Officer | |
EXHIBIT 4.1
THIS NOTE AND THE SHARES OF COMMON STOCK OF DRIVEITAWAY HOLDINGS, INC. ISSUABLE UPON CONVERSION HEREOF HAVE NOT BEEN AND WILL NOT BE REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER (THE “1933 ACT) AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THEY HAVE BEEN REGISTERED UNDER SUCH LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
15% SECURED CONVERTIBLE NOTE
$XXXX
New Jersey
June 30, 2022
FOR VALUE RECEIVED, DRIVEITAWAY HOLDINGS, INC., a Delaware corporation with an address of 14 Kings Highway, Haddonfield, New Jersey 08033, (the “Company”) promises to pay to the order of XXXXXXXX with an address of XXXXXXXXXXXXX, and successors and assigns, (the “Holder”), the principal sum of XXXXX Dollars ($XXXXX.00), 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 and all accrued and unpaid interest, late fees, etc. shall be due and payable on June 30, 2024 (the “Maturity Date”), and |
| (b) | interest shall be paid monthly in cash on the Note commencing 90 days from its issuance, and, |
| (c) | at the Maturity Date, interest owed for the initial 90-day period shall be payable in full. |
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. Any Holder of this Note electing to exercise the right of conversion set forth in Section 4 hereof, in addition to the requirements set forth in Section 4, and any prospective transferee of this Note, also is required to give the Company written confirmation that this Note is being converted (“Notice of Conversion”) in the form annexed hereto as Exhibit A. The date of receipt (including receipt by telecopy) of such Notice of Conversion shall be the Conversion Date. |
| 4. | The Holder of this Note is entitled, at its option, at any time, to convert all or any amount of the principal face amount of this Note then outstanding, together with accrued and unpaid interest thereon, into shares of the Company’s Common Stock (the “Common Stock”) at a conversion price of $.20 per share (the “Conversion Price”) for each share of Common Stock. In connection with each conversion, the Holder shall deliver a Notice of Conversion by fax or other electronic method of communication to the Company followed by delivery of this Note to the Company postage paid. Such Conversion shall be effectuated by the Company delivering the shares of Common Stock to the Holder within ten (10) business days of receipt by the Company of the Notice of Conversion and this Note. Accrued but unpaid interest shall be subject to conversion prior to principal. If less than of all this Note is being converted at one time, the Company shall issue a new Note in the name in the name of the Holder for the amount of principal not being converted. No fractional shares or scrip representing fractions of shares will be issued on conversion, but the number of shares issuable shall be rounded to the nearest whole share. Any reclassification of the outstanding shares of Common Stock shall require the appropriate adjustment of the Conversion Price to reflect the change in economic value (i.e., 2 for 1 forward stock split shall reduce the Conversion Price to $0.10 per share). |
| 5. | 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. The Company shall give the Holder thirty (30) days’ written notice and the Holder during such thirty-day period shall have the option to convert this Note or any part thereof into shares of Common Stock at the Conversion Price. |
| 6. | 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, or at the election of the Holder, such Holder may convert the unpaid principal amount of this Note (together with the amount of accrued but unpaid interest) into shares of Common Stock immediately prior to such Sale Event at the Conversion Price. |
| 7. | In case of any Sale Event in connection with which this Note is not redeemed or converted, the Company shall cause effective provision to be made so that the Holder of this Note shall have the right thereafter, by converting this Note, to purchase or convert this Note into the kind and number of shares of stock or other securities or property (including cash) receivable upon such reclassification, capital reorganization or other change, consolidation or merger by a holder of the number of shares of Common Stock that could have been purchased upon exercise of the Note and at the Conversion Price. The foregoing provisions shall similarly apply to successive Sale Events. If the consideration received by the holders of Common Stock is other than cash, the value shall be as determined by the Board of Directors of the Company or successor person or entity acting in good faith. |
| 8. | The repayment of this Note shall be secured by the collateral described in the Security Agreement entered into by the Company for the benefit of the Holder as of the date of this Note (the “Security Agreement”). The Security Agreement shall set forth the terms and conditions upon which a default hereunder shall entitle the Holder to seek additional remedies upon certain collateral of the Company’s subsidiary. |
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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.
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 OF WHICH THIS NOTE IS A PART IS A COMMERCIAL TRANSACTION, AND HEREBY VOLUNTARILY AND KNOWINGLY WAIVES ITS RIGHT TO NOTICE AND HEARING AS ALLOWED BY LAW OR ANY STATE OR FEDERAL LAW WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE HOLDER MAY DESIRE TO USE. FURTHER, THE COMPANY HEREBY WAIVES, TO THE EXTENT PERMITTED BY LAW, THE BENEFITS OF ALL VALUATION, APPRAISEMENT, HOMESTEAD EXEMPTION, STAY, REDEMPTION AND MORATORIUM LAWS, NOW IN FORCE OR WHICH MAY HEREAFTER BECOME LAW. THE COMPANY HEREBY WAIVES, TO THE EXTENT PERMITTED BY LAW, THE BENEFITS OF TRIAL BY JURY, NOW IN FORCE OR WHICH MAY HEREAFTER BECOME LAW.
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IN WITNESS WHEREOF, the Company has executed this Secured Convertible Promissory Note on the date written above.
| DRIVEITAWAY HOLDINGS, INC. | ||
| By: | ||
| John F. Possumato | ||
| Chief Executive Officer | ||
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NOTICE OF CONVERSION
The undersigned hereby elects to convert the principal amount set forth below (together with any accrued and unpaid interest thereon) of the 15% Secured Convertible Notes due 2024 (“Notes”) of DriveItAway Holdings, Inc., a Delaware corporation (the “Company”), into Common Stock of the Company at the applicable conversion price, as of the date written below. If Common Stock is to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by the Company in accordance therewith. No fee will be charged to the holder for any conversion, except for such transfer taxes, if any.
Principal Amount of Note to be Converted: $____________.
Name (must match name of registered owner of the Notes being converted):
__________________________________
Name (if different from above) and Address for Delivery of Common Stock:
Signature: __________________________
Date: _________________
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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: XXXXX
Date of Issuance: June 30, 2022 (“Issuance Date”)
This COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received (in connection with the issuance of the secured promissory note to the Holder (as defined below) of even date) (the “Note”), XXXXXXX (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 XXXX 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 May 16, 2022, 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 $0.30, 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.
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| 1. | EXERCISE OF WARRANT. |
(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) No Fractional 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.
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(c) Holder’s Exercise 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 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) Registration of 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) Distribution of 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-Dilution Adjustments 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) Subdivision or Combination of Common 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 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.
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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.
(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) Issuance of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, suc h 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.
(a) Assignment Generally. 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 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.
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(b) No Transfer 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) Legend on 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 IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH 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 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, (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, or (v) shares of Common Stock issued pursuant to the Company’s current private placement offering of 7,000,000 Units for $0.20 per Unit, each of which consists of one share of common stock and one warrant to purchase one share of common stock for $0.40 per share.
(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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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed as of the Issuance Date set forth above.
| DRIVEITAWAY HOLDINGS, INC. | ||
| By: | ||
| John F. Possumato, CEO | ||
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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 XXXXX 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: | ||
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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.
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EXHIBIT 10.1
SUBSCRIPTION AGREEMENT
To: DRIVEITAWAY HOLDINGS, INC.
RE: 15% SECURED CONVERTIBLE NOTES WITH WARRANTS
Dated: May 16, 2022
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 Twenty-four month 15% Secured Convertible Note (“Note”) which is convertible at $.20 per share into shares of the Company Common Stock and a warrant exercisable for 25,000 shares of the Company’s Common Stock at an exercise price of $.30 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 Patrizio & O’Leary LLP Attorney Escrow Account 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
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 CLCN.
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| 2. | Acceptance of Subscription. |
The Offering will be open until the sale of all of the Units.
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 as well as its Business Plan dated April 2022 (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 Company represents and warrants to, and agrees with the undersigned as follows, in each case as of the date hereof and in all material respects as of the date of any closing, except 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. |
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| 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 undersigned hereby represents and warrants to, and agrees with, the Company as follows: |
| 1. | The undersigned is an “Accredited Investor” as that term is defined in Rule 501 (a) of Regulation D promulgated under the Securities Act, a copy of which is attached hereto as Exhibit A to this Agreement. “ |
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| 2. | If a natural person, the undersigned is: a bona fide resident of the state or non-United States jurisdiction contained in the address set forth on the Signature Page of this Agreement as the undersigned’s home address; at least 21 years of age; and legally competent to execute this Agreement. If an entity, the undersigned has its principal offices or principal place of business in the state or non-United States jurisdiction contained in the address set forth on the Signature Page of this Agreement, the individual signing on behalf of the undersigned is duly authorized to execute this Agreement and this Agreement constitutes the legal, valid and binding obligation of the undersigned enforceable against 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 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. |
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| 9. | The undersigned acknowledges that the Shares shall be subject to a stop transfer order and the certificate or certificates evidencing any Shares shall bear the following or a substantially similar legend or such other legend as may appear on the forms of common stock and such other legends as may be required by state blue sky laws: |
THE SECURITIES 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 UNLESS SUCH 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.
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.
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| 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.
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| 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.
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IN WITNESS 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: | Individual |
| Joint Tenants | |
| Tenants by the Entirety | |
| Tenants in Common | |
| Subscribing as Corporation or Partnership | |
| Other |
IN WITNESS WHEREOF, the undersigned Purchaser has executed this Signature Page this ______________ day of ______________________, 2022.
| 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 |
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| Additional Optional Information | ||
| Phone Number | Phone Number | |
| E-Mail Address | E-Mail Address | |
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ACCEPTANCE OF SUBSCRIPTION
DRIVEITAWAY HOLDINGS, INC. hereby accepts this subscription of Units.
DRIVEITAWAY HOLDINGS, INC.
By: _________________________________________________
Name: _________________________________________________
Title: _________________________________________________
Date: _________________________________________________
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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 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 entity in which all of the equity owners are accredited investors. |
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Exhibit B
OFFERING SUMMARY TERM SHEET
| Issuer: | DriveItAway Holdings, Inc. (the “Company”). Current Ticker Symbol: CLCN (OTCQB). |
| Issue: | $500,000 of Convertible Notes (the “Notes”) and warrants (the “Warrants”) to purchase up to 250,000 shares of common stock of the Company (“Common Stock”). |
| Investors: | Accredited Investors |
| Units: | 10 Units consisting of a $50,000 Note and a Warrant as described below shall be sold until the $500,000 is sold. The Company may accept partial Units in its sole discretion. |
| Warrants: | Each $50,000 Unit shall consist of a five-year Warrant (the “Warrant”) to purchase up to 25,000 shares of Common Stock at a price of $.30 per share (the “Shares”). |
| Conversion Price: | The Conversion Price for each Note shall be equal to $.20 per share subject to standard adjustments (the “Conversion Price”). The Noteholders may elect to convert the Notes into Common Stock of the Company at the Conversion Price at any time following the issuance. |
| Interest: | The interest shall be at the annual rate of 15%, payable, in cash, monthly commencing 90 days from closing, with the first 90-day interest amount paid at maturity. |
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| Maturity: | Any unconverted Notes outstanding on the second anniversary of its issuance will be redeemed in cash equal to the face amount of the Notes plus all accrued Interest and any other amounts due. |
| Security: | The Notes will be secured by a first lien on the 8 vehicles purchased by the Company with the net proceeds of this Offering along with a lien on 2 other vehicles owned by the Company if all $500,000 is closed. Each Noteholder’s security interest will be held by them on a pro rata basis determined by the amount of their Note. The Noteholders may appoint a representative with respect to their security interests. |
| 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 Notes or Warrants pursuant to Rule 144. |
| Redemption Rights: | The Company may redeem any unconverted Notes in cash at any time after issuance, at a 10 % premium to the face amount of such Notes. |
| Use of Proceeds: | The Company will use the net proceeds to acquire up to 8 vehicles. |
| Registration Rights: | The holders of the Notes and 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 Notes and Warrants. |
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EXHIBIT 10.2
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (“Agreement”) is made as of this 30th day of June, 2022, by and between DriveItAway, Inc., a Delaware company having its principal office at 14 Kings Highway, Haddonfield, New Jersey 08033 (the “Debtor”), and XXXXXXXXX (the “Secured Party”).
WITNESSETH:
WHEREAS, the Debtor and the Secured Party have on the date hereof entered into that certain Subscription Agreement (the “Purchase Agreement”) in order for Secured Party to purchase a secured convertible note (the “Note”);
WHEREAS, the Parties desire to enter into this Security Agreement (“Security Agreement”) to secure the Note (as defined in the Purchase Agreement).
NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE
I
DEFINED TERMS
1.1 Collateral. As used herein, the term “Collateral” collectively means any and all items set forth on Exhibit A attached hereto.
1.2 Event of Default. As used herein, the term “Event of Default” shall have the meaning given such term in the Note.
1.3 Obligations. As used herein, the term “Obligations” shall mean any and all of Debtor’s liabilities, obligations and indebtedness to the Secured Party or any Guarantor Party (as defined in the Purchase Agreement), however evidenced, regardless of kind, class or form, whether for the payment of any fee, interest, charge, cost or expense or otherwise, incurred for any purpose, now existing or hereafter arising or accruing, created directly or by any assignment or other transfer, direct or indirect, or absolute or contingent (whether pursuant to any guaranty, endorsement or other assurance of payment or otherwise), including, without limitation, Debtor’s obligations under the Note (as set forth in the Note and the Purchase Agreement) on a pro rata basis to each Secured Party.
1.4 Terms Defined in Uniform Commercial Code. All other capitalized terms used in this Agreement which are not specifically defined herein or the definitions of which are not incorporated herein by reference shall have the meanings assigned to such terms in the Uniform Commercial Code in effect in the State of New Jersey as of the date hereof (the “UCC”).
1.5 Singular/Plural. Unless the context of this Agreement otherwise clearly requires, references to the plural include the singular, references to the singular include the plural and “or” has the inclusive meaning represented by the phrase “and/or”. The words “hereof”, “herein”, “hereunder” and other similar terms contained in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement. The headings in this Agreement are for reference purposes only and shall not control or affect the construction of this Agreement or the interpretation hereof in any respect. Any and all references to sections, subsections and exhibits relate to this Agreement unless otherwise provided.
ARTICLE
II
COLLATERAL
2.1 Collateral. As security for the payment and performance of all of the Obligations, the Debtor hereby mortgages, pledges and assigns to the Secured Party, and hereby creates in and grants to the Secured Party, a continuing security interest in and to all of the Debtor’s right, title and interest in and to all of the Collateral.
ARTICLE
III
REPRESENTATIONS AND WARRANTIES
The Debtor hereby represents, warrants and agrees as follows:
3.1 Enforceability. This Agreement constitutes the legal, valid and binding obligation of the Debtor enforceable against the Debtor in accordance with its terms.
3.2 Principal Place of Business. The Debtor’s principal place of business is located at the address set forth in the first page of this Agreement.
3.3 Ownership of Collateral. The Debtor lawfully owns the Collateral free and clear of any and all liens, security interests, claims, charges, encumbrances, taxes and assessments whatsoever, and the Debtor shall defend the title to the Collateral against any and all third parties and against all claims and demands whatsoever.
ARTICLE
IV
COVENANTS AND AGREEMENTS
The Debtor covenants and agrees that so long as this Agreement remains in effect:
4.1 Possession. The Debtor shall not sell, exchange, assign, loan, deliver, lease, mortgage or otherwise dispose of the Collateral, except in the ordinary course of business, without the prior written consent of the Secured Party and all risk of loss shall remain with the Debtor.
4.2 Liens. The Debtor shall keep the Collateral free and clear of any and all security interests, claims, liens, charges, encumbrances, and rights of third parties other than those liens of Secured Party.
4.3 Costs. The Debtor hereby agrees to pay to the Secured Party on demand any and all costs and expenses (including, without limitation, reasonable attorneys’ fees and costs) incurred by the Secured Party in enforcing this Agreement, in realizing upon or protecting the Collateral.
4.4 Maintenance of Security Interests. The Debtor shall do any and all acts and things, and will execute and deliver, all instruments (including without limitation, any mortgages, pledges, assignments, security agreements, financing statements, continuation statements and other similar items) reasonably requested by the Secured Party to establish, perfect, maintain and continue the perfection and priority of the security interest of the Secured Party in the Collateral. The Debtor hereby authorizes the Secured Party to file any and all UCC-1 financing statements and all other documents necessary to perfect its security interest in the Collateral.
4.5 Insurance. The Debtor shall keep the Collateral duly insured against loss by fire, theft and other casualties in amounts reasonably acceptable to the Secured Party.
4.6 Change of Name or Location of Business. The Debtor will notify the Secured Party of any change in the Debtor’s name or principal place of business within five (5) days after the occurrence of any such change.
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ARTICLE
V
REMEDIES
5.1 Rights and Remedies Generally. Upon the occurrence of an Event of Default, the Secured Party shall be entitled to exercise, in addition to any and all rights and remedies contained in this Agreement and any and all other agreements with the Debtor, any and all of the rights and remedies available to a secured party under the UCC or other applicable law, and may: sell, lease, transfer, endorse, assign or deliver the whole or any part of the Collateral at any public or private sale. Upon consummation of any such sale, the Secured Party shall have the right to assign, transfer, endorse and deliver to the purchaser or purchasers thereof the Collateral or any portion thereof so sold. Each such purchaser at any such sale shall hold the property sold absolutely free from any claim or right on the part of any Debtor.
The Secured Party shall give the Debtor at least ten (10) days’ written notice (which the Debtor agrees is reasonable notification within meaning of the applicable sections of the UCC) of the Secured Party’s intention to attempt to make any such public or private sale of its Collateral. Such notice, in the case of public sale, shall state the time and place for such sale (which may be on the premises of such Debtor). Any public sale of any of the Collateral shall be held at such time or times within ordinary business hours and at such place or places as the Secured Party may fix and so state in the notice of such sale. At any such sale, the Collateral or any portion thereof may be sold in its entirety or in separate parcels, as determined by the Secured Party (in its sole discretion). The Secured Party may, without any notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for sale, and such sale may, without further notice, be made at the time and place to which the same was so adjourned. As an alternative to exercising the power of sale herein conferred upon it, the Secured Party may proceed by action at law or in equity to foreclose the security interest created under this Agreement and sell the Collateral or any portion thereof pursuant to judgment or decree of a court or courts having competent jurisdiction.
5.2 Disposition of Collateral. The net proceeds realized by the Secured Party upon any sale or other disposition, after deduction for any and all actual and reasonable expenses incurred in connection with the retaking, holding, preparing for sale or selling of the Collateral (including, without limitation, reasonable attorneys’ fees) shall be applied toward satisfaction of the Obligations. The Secured Party shall pay to the Debtor any surplus realized upon such sale or other disposition. The Debtor shall remain liable for any deficiency. The commencement of any action, legal or equitable, or the rendering of any judgment or decree for any deficiency shall not affect the Secured Party’s security interest in the Collateral. The Debtor agrees that the Secured Party shall have the right to take any steps by judicial process or otherwise to enforce the Collateral or any security therefor.
5.3 Waiver of Notice. The Debtor waives any and all rights to notice of any kind prior to the exercise by the Secured Party of its right to take possession of the Collateral without judicial
5.4 Pro Rata Distribution. Each Secured Party shall be entitled to its pro rata distribution based on the amount of its Note. Frederick C. Biehl is appointed as agent for the Secured Party.
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ARTICLE
VI
MISCELLANEOUS
6.1 Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey without reference to such State’s principles of conflicts of laws.
6.2 Assignment. No party shall have the right to assign its rights and obligations hereunder without the prior written consent of the other party.
6.3 Amendment. This Agreement shall not be amended except by a writing executed by all of the parties.
6.4 Persons Bound. The terms and conditions of this Agreement shall be binding upon and shall inure to the benefit of the parties and their respective successors and permitted assigns.
6.5 Waiver. The waiver by a party of a breach of any provision of this Agreement shall not operate as nor be construed as a waiver of any subsequent breach thereof.
6.6 Notices. All notices required under this Agreement shall be deemed to have been given or made for all purposes (i) upon personal delivery, (ii) upon confirmation receipt that the communication was successfully sent to the applicable number, if sent by facsimile, or electronic mail, (iii) one day after being sent, when sent by professional overnight courier service, or (iv) five days after posting when sent by registered or certified mail. Notices shall be sent to the parties at the addresses set forth in the introduction to this Agreement or at such other place as a party shall notify the other party in writing.
6.7 Entire Agreement. This Agreement constitutes the entire agreement between the parties regarding the subject matter contained herein and supersedes all prior and contemporaneous undertakings and agreements of the parties, whether written or oral, with respect to the subject matter herein.
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6.8 Consents and Waivers Relating to Legal Proceedings.
(a) Jurisdictional Consents and Waivers. EACH PARTY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND IRREVOCABLY (I) CONSENTS IN EACH ACTION AND OTHER LEGAL PROCEEDING COMMENCED IN CONNECTION WITH THIS AGREEMENT TO THE PERSONAL JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE STATE OF NEW JERSEY (THE “EXCLUSIVE VENUES”); (II) WAIVES EACH OBJECTION TO THE LAYING OF VENUE OF ANY SUCH ACTION OR OTHER LEGAL PROCEEDING; PROVIDED, HOWEVER, THE VENUE OF ANY ACTION OR PROCEEDING COMMENCED BY THE SECURED PARTY FOLLOWING AN EVENT OF DEFAULT SHALL BE THE EXCLUSIVE VENUES; (III) WAIVES PERSONAL SERVICE OF PROCESS IN EACH SUCH ACTION AND OTHER LEGAL PROCEEDING; (IV) CONSENTS TO THE MAKING OF SERVICE OF PROCESS IN EACH SUCH ACTION AND OTHER LEGAL PROCEEDING BY REGISTERED MAIL DIRECTED TO SAID PARTY AT THE LAST ADDRESS OF SUCH PARTY SHOWN IN THE RECORDS RELATING TO THIS AGREEMENT MAINTAINED BY THE SERVING PARTY, WITH SUCH SERVICE OF PROCESS TO BE DEEMED COMPLETED FIVE DAYS AFTER THE MAILING THEREOF; AND (V) CONSENTS TO EACH SUCH FINAL JUDGMENT BEING SUED UPON IN ANY COURT HAVING JURISDICTION WITH RESPECT THERETO AND ENFORCED IN THE JURISDICTION IN WHICH SUCH COURT IS LOCATED AS IF ISSUED BY SUCH COURT.
(b) Waiver of Trial by Jury and Claims to Certain Damages. EACH PARTY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND IRREVOCABLY WAIVES EACH RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY ACTION OR OTHER LEGAL PROCEEDING, WHETHER BASED ON ANY CONTRACT OR NEGLIGENT OR INTENTIONAL TORT OR OTHERWISE, IN CONNECTION WITH THIS AGREEMENT, AND ANY AMOUNT OWING BY A PARTY TO THE OTHER PARTY PURSUANT THERETO.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, this Agreement has been duly executed by the parties as of the date and year first above written.
| DEBTOR: | DriveItAway , Inc. | |
| By: | ||
| Name: | ||
| Title: | ||
| AGENT: | |
| Frederick C. Biehl |
[Signature Page to Security Agreement]
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EXHIBIT
A
COLLATERAL
(a) All vehicles owned by Debtor as evidenced by the attached vehicle information.
(b) all proceeds and products of the foregoing, including without limitation all payments under insurance or any indemnity or warranty payable in respect of any of the foregoing.
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EXHIBIT 10.3
DRIVEITAWAY HOLDINGS, INC.
PIGGYBACK REGISTRATION RIGHTS AGREEMENT
June 30, 2022
This Piggyback Registration Rights Agreement (“Agreement”) is made and entered into as of June 30, 2022, by and among DriveItAway Holdings, Inc., a Delaware corporation (“Company”) and the holders of the Company’s securities entitling them to convert or exercise for shares of the Company’s common stock (“Common Stock”) listed on Exhibit A hereto. The holders of these securities will be referred to herein as ”Common Shareholders” and each individually as a ”Common Shareholder.”
RECITALS
WHEREAS this Agreement is being executed and delivered pursuant to the Subscription Agreement dated May 16, 2022 (“Subscription Agreement”) by and among the Company and the Common Shareholders.
WHEREAS, subject to the terms and conditions of the Subscription Agreement, the Company has agreed to grant Common Shareholders the piggyback registration rights set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises hereinafter set forth, the parties hereto agree as follows:
AGREEMENT
1. REGISTRATION RIGHTS.
1.1 Definitions. For purposes of Agreement:
Registration. ”Register,” “registered,” and ”registration” refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act of 1933, as amended (“Securities Act”), and the declaration or ordering of effectiveness of such registration statement.
Registrable Securities. ”Registrable Securities” means: (a) any and all shares of the Company’s Common Stock and (b) any shares of Common Stock issued as (or issuable upon the conversion or exercise of any warrant, right or other security which is issued as) a dividend or other distribution with respect to, in exchange for or in replacement of, all such shares of Common Stock described in clause (a); excluding in all cases, however, any Registrable Securities sold by a person in a transaction in which rights under this Section 1 are not assigned in accordance with this Agreement or any Registrable Securities sold to the public or sold pursuant to Rule 144 promulgated under the Securities Act (“Excluded Shares”).
Registrable Securities Then Outstanding. ”Registrable Securities then Outstanding” will mean the number of shares of Common Stock which are Registrable Securities and (a) are then issued and outstanding or (b) are then issuable pursuant to the exercise or conversion of then outstanding and then exercisable options, warrants or convertible securities.
Holder. ”Holder” or ”Holders” means any person or persons owning of record Registrable Securities that have not been sold to the public or pursuant to Rule 144 promulgated under the Securities Act including the Common Shareholder(s) under this Agreement or any assignee of record of such Registrable Securities to whom rights under this Section 1 have been duly assigned in accordance with this Agreement; provided, however, the Company will in no event be obligated to register Common Stock.
SEC. ”SEC” means the United States Securities and Exchange Commission.
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1.2 Piggyback Registrations.
(a) Piggyback Registrations. The Company will notify all Holders of Registrable Securities in writing at least thirty (30) days prior to filing any registration statement under the Securities Act for purposes of effecting a public offering of securities of the Company (including, but not limited to, registration statements relating to secondary offerings of securities of the Company, but excluding registration statements relating to any demand or Form S-3 registration of the Company’s preferred shareholders or to any employee benefit plan or a corporate reorganization) and will afford each such Holder an opportunity to include in such registration statement all or any part of the Registrable Securities then held by such Holder. Each Holder desiring to include in any such registration statement all or any part of the Registrable Securities held by such Holder will, within twenty (20) days after receipt of the above-described notice from the Company, so notify the Company in writing, and in such notice will inform the Company of the number of Registrable Securities such Holder wishes to include in such registration statement. If a Holder decides not to include all of its Registrable Securities in any registration statement thereafter filed by the Company, such Holder will nevertheless continue to have the right to include any Registrable Securities in any subsequent registration statement or registration statements as may be filed by the Company with respect to offerings of its securities, all upon the terms and conditions set forth herein.
(b) Underwriting. If a registration statement under which the Company gives notice under this Section 1.2 is for an underwritten offering, then the Company will so advise the Holders of Registrable Securities. In such event, the right of any such Holder’s Registrable Securities to be included in a registration pursuant to this Section 1.2 will be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their Registrable Securities through such underwriting will enter into an underwriting agreement in customary form with the managing underwriter or underwriter(s) selected for such underwriting. Notwithstanding any other provision of this Agreement, if the managing underwriter(s) determine(s) in good faith that marketing factors require a limitation of the number of shares to be underwritten, then the managing underwriter(s) may exclude shares (including Registrable Securities) from the registration and the underwriting, and the number of shares that may be included in the registration and the underwriting will be allocated, first, to the Company, and second, to each of the Holders requesting inclusion of their Registrable Securities in such registration statement on a pro rata basis based on the total number of Registrable Securities then held by each such Holder. If any Holder disapproves of the terms of any such underwriting, such Holder may elect to withdraw therefrom by written notice to the Company and the underwriter, delivered at least ten (10) business days prior to the effective date of the registration statement. Any Registrable Securities excluded or withdrawn from such underwriting will be excluded and withdrawn from the registration. For any Holder which is a partnership or corporation, the partners, retired partners and shareholders of such Holder, or the estates and family members of any such partners and retired partners and any trusts for the benefit of any of the foregoing persons will be deemed to be a single “Holder,” and any pro rata reduction with respect to such “Holder” will be based upon the aggregate amount of shares carrying registration rights owned by all entities and individuals included in such “Holder,” as defined in this sentence.
(c) Expenses. All expenses incurred in connection with a registration pursuant to this Section 1.2 (excluding underwriters’ and brokers’ discounts and commissions), including, without limitation all federal and “blue sky” registration and qualification fees, printers’ and accounting fees, fees and disbursements of counsel for the Company and the reasonable fees and disbursements of one (1) counsel for the selling Holder or Holders will be borne by the Company.
1.3 Obligations of the Company. Whenever required to affect the registration of any Registrable Securities under this Agreement, the Company will, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its best efforts to cause such registration statement to become effective, and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for up to ninety (90) days;
(b) Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement;
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(c) Furnish to the Holders such number of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of the Registrable Securities owned by them that are included in such registration;
(d) Use its best efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as will be reasonably requested by the Holders, provided the Company will not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions;
(e) In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter(s) of such offering (it being understood and agreed, as a condition to the Company’s obligations under this clause (e), each Holder participating in such underwriting will also enter into and perform its obligations under such an agreement);
(f) Notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing; and
(g) Furnish, at the request of any Holder requesting registration of Registrable Securities, on the date such Registrable Securities are delivered to the underwriters for sale, if such securities are being sold through underwriters, or, if such securities are not being sold through underwriters, on the date the registration statement with respect to such securities becomes effective, (i) an opinion, dated as of such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily giv en to underwriters in an underwritten public offering and reasonably satisfactory to a majority in interest of the Holders requesting registration, addressed to the underwriters, if any, and to the Holders requesting registration of Registrable Securities and (ii) a “comfort” letter dated as of such date, from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering and reasonably satisfactory to a majority in interest of the Holders requesting registration, addressed to the underwriters, if any, and to the Holders requesting registration of Registrable Securities.
1.4 Furnish Information. It will be a condition precedent to the obligations of the Company to take any action pursuant to Section 1.2 hereof that the selling Holders will furnish to the Company such information regarding themselves, the Registrable Securities held by them and the intended method of disposition of such securities as will be required to timely effect the registration of their Registrable Securities.
1.5 Delay of Registration. No Holder will have any right to obtain or seek an injunction restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 1.
1.6 Indemnification. In the event any Registrable Securities are included in a registration statement under Section 1.2 hereof:
(a) By the Company. To the extent permitted by law, the Company will indemnify and hold harmless each Holder, the partners, officers and directors of each Holder, any underwriter (as defined in the Securities Act) for such Holder and each person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Securities Exchange Act of 1934, as amended, (“Exchange Act”), against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a ”Violation”):
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(i) Any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto;
(ii) The omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading; or
(iii) Any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any federal or state securities law or any rule or regulation promulgated under the Securities Act, the Exchange Act or any federal or state securities law in connection with the offering covered by such registration statement;
and the Company will reimburse each such Holder, partner, officer or director, underwriter or controlling person for any legal or other expenses reasonably incurred by them, as incurred, in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, the indemnity agreement contained in this Subsection 1.6(a) will not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent will not be unreasonably withheld), nor will the Company be liable in any such case for any such loss, claim, damage, liability or action to the extent it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by such Holder, partner, officer, director, underwriter or controlling person of such Holder.
(b) By Selling Holders. To the extent permitted by law, each selling Holder will indemnify and hold harmless the Company, each of its directors, each of its officers who have signed the registration statement, each person, if any, who controls the Company within the meaning of the Securities Act, any underwriter and any other Holder selling securities under such registration statement or any of such other Holder’s partners, directors or officers or any person who controls such Holder within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages or liabilities (joint or several) to which the Company or any such director, officer, controlling person, underwriter or other such Holder, partner or director, officer or controlling person of such other Holder may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) such Violation occurs in reliance upon and in conformity with written information furnished by such Holder expressly for use in connection with such registration; and each such Holder will reimburse any legal or other expenses reasonably incurred by the Company or any such director, officer, controlling person, underwriter or other Holder, partner, officer, director or controlling person of such other Holder in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, the indemnity agreement contained in this Subsection 1.6(b) will not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Holder, which consent will not be unreasonably withheld; and provided further, the total amounts payable in indemnity by a Holder under this Subsection 1.6(b) in respect of any Violation will not exceed the net proceeds received by such Holder in the registered offering out of which such Violation arises.
(c) Notice. Promptly after receipt by an indemnified party under this Section 1.6 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 1.6, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party will have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, an indemnified party will have the right to retain its own counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential conflict of interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if prejudicial to its ability to defend such action, will relieve such indemnifying party of any liability to the indemnified party under this Section 1.6, but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability it may have to any indemnified party otherwise than under this Section 1.6.
(d) Defect Eliminated in Final Prospectus. The foregoing indemnity agreements of the Company and Holders are subject to the condition that, insofar as they relate to any Violation made in a preliminary prospectus but eliminated or remedied in the amended prospectus on file with the SEC at the time the registration statement in question becomes effective or the amended prospectus filed with the SEC pursuant to SEC Rule 424(b) (“Final Prospectus”), such indemnity agreement will not inure to the benefit of any person if a copy of the Final Prospectus (i) was furnished to the indemnified party and (ii) was not furnished to the person asserting the loss, liability, claim or damage at or prior to the time such action is required by the Securities Act.
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(e) Contribution. In order to provide for just and equitable contribution to joint liability under the Securities Act in any case in which either (i) any Holder exercising rights under this Agreement, or any controlling person of any such Holder, makes a claim for indemnification pursuant to this Section 1.6 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact this Section 1.6 provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of any such selling Holder or any such controlling person in circumstances for which indemnification is provided under this Section 1.6; then, and in each such case, the Company and such Holder will contribute to the aggregate losses, claims, damages or liabilities to which they may be subject (after contribution from others) in such proportion so such Holder is responsible for the portion represented by the percentage that the public offering price of its Registrable Securities offered by and sold under the registration statement bears to the public offering price of all securities offered by and sold under such registration statement, and the Company and other selling Holders are responsible for the remaining portion; provided, however, in any such case, (A) no such Holder will be required to contribute any amount in excess of the public offering price of all such Registrable Securities offered and sold by such Holder pursuant to such registration statement and (B) no person or entity guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any person or entity who was not guilty of such fraudulent misrepresentation.
(f) Survival. The obligations of the Company and Holders under this Section 1.6 will survive the completion of any offering of Registrable Securities in a registration statement, and otherwise.
1.7 “Market Stand-Off” Agreement.
(a) Each Holder hereby agrees it will not, to the extent requested by the Company or an underwriter of securities of the Company, sell or otherwise transfer or dispose of or engage in any other transaction regarding any Registrable Securities or other shares of stock of the Company then owned by such Holder (other than to donees or partners of the Holder who agree to be similarly bound) for up to one hundred eighty (180) days following the effective date of a registration statement of the Company filed under the Securities Act; provided, however, all executive officers and directors of the Company then holding Common Stock of the Company enter into similar agreements.
(b) In order to enforce the foregoing covenant, (i) the Company will have the right to place restrictive legends on the certificates representing the shares subject to this Section 1.7 and to impose stop transfer instructions with respect to the Registrable Securities and such other shares of stock of each Holder (and the shares or securities of every other person subject to the foregoing restriction) until the end of such period and (ii) the Holder agrees to execute the form of agreement requested by the Company and/or underwriter.
1.8 Rule 144 Reporting. With a view to making available the benefits of certain rules and regulations of the SEC which may at any time permit the sale of the Registrable Securities to the public without registration, after such time as a public market exists for the Common Stock of the Company, the Company agrees to:
(a) Make and keep public information available, as those terms are understood and defined in Rule 144 under the Securities Act, at all times after the effective date of the first registration under the Securities Act filed by the Company for an offering of its securities to the general public;
(b) Use its best efforts to file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements); and
(c) As long as a Holder owns any Registrable Securities, to furnish to the Holder forthwith upon request a written statement by the Company as to its compliance with the reporting requirements of said Rule 144 (at any time after ninety (90) days after the effective date of the first registration statement filed by the Company for an offering of its securities to the general public), and of the Securities Act and the Exchange Act (at any time after it has become subject to the reporting requirements of the Exchange Act), a copy of the most recent annual or quarterly report of the Company and such other reports and documents of the Company as a Holder may reasonably request in availing itself of any rule or regulation of the SEC allowing a Holder to sell any such securities without registration (at any time after the Company has become subject to the reporting requirements of the Exchange Act).
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1.9 Termination of the Company’s Obligations. The Company will have no obligations pursuant to Section 1.2 with respect to: (a) any request or requests for registration made by any Holder on a date more than two (2) years after the closing date of the first firmly underwritten public offering of Common Stock of the Company pursuant to a Registration Statement filed with, and declared effective by, the SEC under the Securities Act, on the terms and conditions approved by the Company’s board of directors (an ”Initial Public Offering”) or (b) any Registrable Securities proposed to be sold by a Holder in a registration pursuant to Section 1.2 if, in the opinion of counsel to the Company, all such Registrable Securities proposed to be sold by a Holder may be sold in a three-month period without registration under the Securities Act pursuant to Rule 144 under the Securities Act.
1.10 Limitations on Subsequent Registration Rights. From and after the date of this Agreement, the Company will not, without the prior written consent of the Holders of a majority of the Registrable Securities then outstanding, enter into any agreement with any holder or prospective holder of any securities of the Company that provides such holder or prospective holder with registration rights superior to the registration rights provided to the Common Shareholders pursuant to this Section 1.
2. ASSIGNMENT AND AMENDMENT.
2.1 Assignment. Notwithstanding anything herein to the contrary, the registration rights of a Holder under Section 1 may be assigned only to (a) a party who acquires at least two hundred fifty thousand (250,000) shares of Registrable Securities or (b)(i) a shareholder, partner, member, or beneficiary of such Holder; (ii) a spouse, child, parent or beneficiary of the estate of such Holder or (iii) a trust for the benefit of the persons set forth in (i) or (ii); provided, however, no party may be assigned any of the foregoing rights unless the Company is given written notice by the assigning party at the time of such assignment stating the name, address and tax identification number of the assignee and identifying the securities of the Company as to which the rights in question are being assigned; and provided further any such assignee will receive such assigned rights subject to all the terms and conditions of this Agreement, including without limitation the provisions of this Section 2.
2.2 Amendment of Rights. Subject to Section 2.3, any provision of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and Common Shareholders (and/or any of their permitted successors or assigns) holding shares of Registrable Securities representing and/or convertible into a majority of all Registrable Securities. Any amendment or waiver effected in accordance with this Section 2.2 will be binding upon each Common Shareholder, each Holder, each permitted successor or assignee of such Common Shareholder or Holder and the Company.
2.3 New Common Shareholders. Notwithstanding anything herein to the contrary, if additional parties purchase shares of Common Stock from the Company (each such person or entity, a ”New Common Shareholder”), then each such New Common Shareholder will become a party to this Agreement as a “Common Shareholder” hereunder, without the need for any consent, approval or signature of any Common Shareholder when such New Common Shareholder has both: (a) purchased shares of Common Stock and paid the Company all consideration payable for such shares and (b) executed one or more counterpart signature pages to this Agreement as a “Common Shareholder,” with the Company’s consent.
3. GENERAL PROVISIONS.
3.1 Notices. Any notice, request or other communication required or permitted hereunder will be in writing and will be deemed to have been duly given if personally delivered, deposited in the U.S. mail by registered or certified mail, return receipt requested, postage prepaid, electronic-mail or facsimile when receipt is electronically confirmed (a) if to a Common Shareholder, as set forth below the Common Shareholder’s name on the signature page of this Agreement, and (ii) if to the Company, to the address set forth below:
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DriveItAway Holdings, Inc.
14 Kings Highway
Haddonfield, NJ XXXXX
Attention: John F. Possumato
Chief Executive Officer
Any party hereto (and such party’s permitted assigns) may by notice so given change its address for future notices hereunder. Notice will be deemed conclusively given when personally delivered or when deposited in the mail in the manner set forth above.
3.2 Entire Agreement. This Agreement, together with all the exhibits hereto, constitutes and contains the entire agreement and understanding of the parties with respect to the subject matter hereof and supersedes any and all prior negotiations, correspondence, agreements, understandings, duties or obligations between the parties respecting the subject matter hereof.
3.3 Governing Law. This Agreement will be governed by and construed exclusively in accordance with the internal laws of the State of California as applied to agreements among California residents entered into and to be performed entirely within California, excluding that body of law relating to conflict of laws and choice of law.
3.4 Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, then such provision(s) will be excluded from this Agreement and the balance of this Agreement will be interpreted as if such provision(s) were so excluded and will be enforceable in accordance with its terms.
3.5 Third Parties. Nothing in this Agreement, express or implied, is intended to confer upon any person, other than the parties hereto and their successors and assigns, any rights or remedies under or by reason of this Agreement.
3.6 Successors and Assigns. Subject to the provisions of Section 2.1, the provisions of this Agreement will inure to the benefit of, and will be binding upon, the successors and permitted assigns of the parties hereto.
3.7 Captions. The captions to sections and subsections of this Agreement have been inserted for identification and reference purposes only and will not be used to construe or interpret this Agreement.
3.8 Counterparts. This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. Executed counterparts of this Agreement may be delivered by facsimile transmission or by delivery of a scanned counterpart in portable document format (PDF) by e-mail. The signatures in the facsimile or PDF data file will be deemed to have the same force and effect as if the manually signed counterpart had been delivered to the other party in person.
3.9 Costs and Attorneys’ Fees. In the event any action, suit or other proceeding is instituted concerning or arising out of this Agreement or any transaction contemplated hereunder, the prevailing party will recover all of such party’s costs and attorneys’ fees incurred in each such action, suit or o ther proceeding, including any and all appeals or petitions therefrom.
3.10 Adjustments for Stock Splits and Certain Other Changes. Wherever in this Agreement there is a reference to a specific number of shares of Common Stock of the Company, then, upon the occurrence of any subdivision, combination or stock dividend of such Common Stock, the specific number of shares so referenced in this Agreement will automatically be proportionally adjusted to reflect the affect on the outstanding shares of such Common Stock by such subdivision, combination or stock dividend.
3.11 Aggregation of Stock. All shares held or acquired by affiliated entities or persons will be aggregated together for the purpose of determining the availability of any rights under this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Common Shareholder Piggyback Registration Rights Agreement as of the date and year first above written.
| COMPANY | ||
| DRIVEITAWAY HOLDINGS, INC. | ||
| By: | ||
| John F. Possumato | ||
| Chief Executive Officer | ||
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