FIRST AMENDMENT TO SECURITIES PURCHASE AGREEMENT
EXHIBIT 10.2
FIRST AMENDMENT TO
This FIRST AMENDMENT TO THE SECURITIES PURCHASE AGREEMENT (this “Amendment”), dated as of October 31, 2022 (the “Effective Date”), by and between DRIVEITAWAY HOLDINGS, INC. (f/k/a Creative Learning Corporation), a Delaware corporation, with headquarters located at 0000 Xxxxxx Xxxxxx, Xxxxx 000/000, Xxxxxxxxxxxx, XX 00000 (the “Company”), and AJB CAPITAL INVESTMENTS, LLC, a Delaware limited liability company, with its address at 0000 Xxxxxxxx Xxxxxx, Xxxxx X, Xxxxxxxxx, XX 00000 (the “Buyer”).
WHEREAS:
| A. | The Company and the Buyer are partiers to that certain Securities Purchase Agreement, dated as of February 24, 2022 (the “Agreement”) and 10% Promissory Note of the Company issued in favor of the Buyer, dated February 24, 2022, in the principal amount of US$750,000.00 (the “Note”). |
| B. | The Company has asked that the Buyer waive certain existing Events of Default under the Note (the “Existing Events of Default) set forth on Appendix A hereto. |
| C. | Section 10(e) of the Agreement provides that the provisions of the Agreement may be amended if such amendment is in writing and signed by the Buyer. |
| D. | The Company and the Buyer desire to amend the Agreement in accordance with the terms of this Amendment. |
NOW THEREFORE, in consideration of the foregoing recitals and the mutual covenants, representations, warranties, conditions, and agreements hereinafter expressed, the Company and the Buyer hereby agree as follows:
| 1. | Defined Terms. All capitalized terms used in this Amendment and not otherwise defined shall have the meanings given to such terms in the Agreement or the Note, as applicable. |
| 2. | Amendment to Section 4(o). Section 4(o) of the Agreement is hereby amended in its |
o. Commitment
Fee Shares. The Company shall pay to Buyer, (i) as a commitment
fee, Eight Hundred Thousand and No/100 United States Dollars (US$800,000.00) (the “Commitment Fee”) by issuing to Buyer that
number of shares of the Company’s Common Stock equal to such amount. It is agreed that the number of shares of Common Stock issuable
to Buyer under this Section 4(o) shall be 5,000,000 (the “Commitment Fee Shares”). The Company shall instruct its transfer
agent (the “Transfer Agent”) to issue two (2) or more certificates or book entry statements, representing the Commitment Fee
Shares issuable to the Buyer within sixty (60) days after the Company’s execution of this Agreement, and shall cause its Transfer
Agent to deliver such certificates or book entry statements to Buyer within five (5) Business Days from such date. The Buyer shall never
be in possession of an amount of Common Stock greater than 4.99% of the issued and outstanding Common Stock of the Company provided,
however that this ownership restriction described in this Section may be waived by Xxxxx, in whole or in part, upon sixty-one (61) days’ prior written notice. In the event any certificate or book entry representing the Commitment Fee Shares issuable hereunder shall not be delivered to the Buyer within the applicable five (5) Business Day period, same shall be an immediate default under this Agreement and the other Transaction Documents. The Commitment Fee Shares, when issued, shall be deemed to be validly issued, fully paid, and non-assessable shares of the Company’s Common Stock. The Commitment Fee Shares shall be deemed fully earned as of the Effective Date.
(i) Adjustments.
Subject to Section 4(o)(ii) below, it is the intention of the Company and Buyer that the Buyer shall be able to sell (if Buyer so elects,
in Buyer’s sole and absolute discretion) the Commitment Fee Shares, and generate net proceeds (net of all brokerage commissions
and other fees or charges payable by Buyer in connection with the sale thereof) from such sale equal to the Commitment Fee. The Buyer
shall use its best efforts to sell the Commitment Fee Shares in the principal trading market of the Company’s Common Stock or otherwise,
at any time in accordance with applicable securities laws. At any time, and from time to time, the Buyer may elect during the period beginning
on the date which is the six (6) month anniversary of the Closing Date and ending on the date which is the thirty-six (36) month anniversary
of the Closing Date (the “Adjustment Period”), the Buyer may deliver to the Company a reconciliation statement showing the
net proceeds actually received by the Buyer from the sale of all of the Commitment Fee Shares actually sold (the “Sale Reconciliation”).
If, as of the date of the delivery by Buyer of the Sale Reconciliation, the Buyer has not realized net proceeds from the sale of such
Commitment Fee Shares equal to at least the Commitment Fee, as shown on the Sale Reconciliation, then the Company shall either pay in
cash the applicable shortfall amount or immediately take all required action necessary or required in order to cause the issuance of additional
shares of Common Stock to the Buyer in an amount sufficient such that, when sold and the net proceeds thereof are added to the net proceeds
from the sale of any of the previously issued and sold Commitment Fee Shares,
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the Buyer shall have received total net funds equal to the Commitment Fee. If additional shares of Common Stock are issued pursuant to the immediately preceding sentence, and after the sale of such additional issued shares of Common Stock the Buyer still has not received net proceeds equal to at least the Commitment Fee, then the Company shall again be required to immediately take all required action necessary or required in order to cause the issuance of additional shares of Common Stock to the Buyer as contemplated above, and such additional issuances shall continue until the Buyer has received net proceeds from the sale of such Common Stock equal to the Commitment Fee. In the event additional Common Stock is required to be issued as outlined above, the Company shall instruct its Transfer Agent to issue certificates or book entry statements representing such additional shares of Common Stock to the Buyer immediately subsequent to the Buyer’s notification to the Company that additional shares of Common Stock are issuable hereunder, and the Company shall in any event cause its Transfer Agent to deliver such certificates or book entry statements to Buyer within three (3) Business Days following the date Buyer notifies the Company that additional shares of Common Stock are to be issued hereunder. In the event such certificates or book entry statements representing such additional shares of Common Stock issuable hereunder shall not be delivered to the Buyer within said three (3) Business Day period, same shall be an immediate default under this Agreement and the Transaction Documents. Nothing herein contained shall be interpreted to in any way limit the net proceeds from the sale of the Commitment Fee Shares which shall be generated by the Buyer. The Company’s obligation to pay the Commitment Fee contemplated by this Section 4(o) thru the sale of Commitment Fee Shares, shall be an obligation hereunder, secured by all transaction documents.
(ii) Redemption. In the event that the Note has been repaid in full (including accrued and unpaid interest) on or prior to the Maturity Date (without extension), the Company shall have the right to redeem 2,500,000 of the Commitment Fee Shares (as adjusted for stock splits, stock dividends or similar events) which were originally issued (the “Redeemable Commitment Fee Shares”) for an amount payable by the Company to the Buyer in cash of an aggregate of one ordinary U.S. dollar ($1.00). Upon Xxxxx’s receipt of such cash payment in accordance with the immediately preceding sentence, the Redeemable Commitment Fee Shares shall be immediately redeemed without any further action on the part of the Company or the Buyer. In the event the Company redeems the Redeemable Commitment Fee Shares pursuant to this Section 4(o)(ii), the Commitment Fee shall be deemed reduced to $400,000 for purposes of Section 4(o)(i) herein.
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3. Previously Issued Commitment Fee Shares. The Buyer agrees and acknowledges that the Company has previously issued to the Buyer 4,000,000 shares of Common Stock as Commitment Fee Shares, in satisfaction of the Company’s obligations to issue Commitment Fee Shares to the Buyer under the Agreement as in existence prior to the execution of this Amendment. In connection with the execution of this Amendment, the Buyer and the Company agree and acknowledge that the Company will be obligated to issue to the Buyer an additional amount of Commitment Fee Shares totaling 1,000,000 shares (the “Additional Commitment Fee Shares”), and that, upon such issuance, the Company will have satisfied its obligations under Section 4(o) of the Agreement, as amended by this Amendment.
4. Issuance of Additional Commitment Fee Shares. Within five (5) business days of the date of this Amendment, the Company, though its transfer agent, will issue to the Buyer the Additional Commitment Fee Shares in two (2) book entry statements.
5. Waiver. As of the Effective Date, the Buyer waives the Existing Events of Default. The waiver contained herein does not apply to any other Default or Event of Default, other than the Existing Events of Default, which may now or hereafter exist under the Note, the Agreement or the other Transaction Documents. No consent or waiver, express or implied, by the Buyer to or for any breach of or deviation from any covenant, condition, or duty by the Company, including the waiver of the Existing Events of Default, shall be deemed a consent or waiver to or of any other breach of the same or any other covenant, condition, or duty set forth in the Note, the Agreement or the other Transaction Documents. The Buyer’s waiver contained herein does not constitute a course of dealing nor does it constitute a course of conduct.
6. Miscellaneous.
| a. | No Further Amendment. Except as expressly amended hereby, the Agreement is in all respects ratified and confirmed and all the terms, conditions, and provisions thereof shall remain in full force and effect. This Amendment is limited precisely as written and shall not be deemed to be an amendment to any other term or condition of the Agreement or any other document referred to therein. This Amendment shall be deemed to be in full force and effect from and after the execution of this Amendment by the Company and the Buyer, and the Company and the Buyer shall be bound hereby. | |
| b. | Incorporation of Certain Provisions by Reference. The following provisions of the Agreement are hereby incorporated into this Amendment by reference mutatis mutandis: Section 10(a) (Governing Law); Section 10(b) (Counterparts; Signature by Facsimile); Section 10(c) (Construction; Headings); Section 10(d) (Severability); Section 10(e) (Entire Agreement; Amendments), Section 10(k) (No Strict Construction). |
[signature page follows]
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IN WITNESS WHEREOF, the undersigned Xxxxx and the Company have caused this Amendment to be duly executed as of the date first above written.
| By: | /s/ Xxxx Xxxxxxxxx | |
| Name: | Xxxx Xxxxxxxxx | |
| Title: | Chief Executive Officer |
AJB CAPITAL INVESTMENTS, LLC
| By: | /s/ Xxx Xxxxxx | |
| Name: | Xxx Xxxxxx | |
| Title: | Partner |
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APPENDIX A
Events of Default have occurred and are continuing under the Note arising from the Company’s breach of (i) Section 3.10 of the Note for failure to timely the Company’s quarterly report on Form 10-Q for the period ended March 31, 2022, and (ii) Section 3.19 of the Note for the loss of the “bid” price for its Common Stock.
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