Item
1.01 Entry into a Material Definitive Agreement.
Effective
as of November 2, 2021, Global Diversified Marketing Group Inc., a Delaware corporation (the “Company”), entered into an
Equity Purchase Agreement (the “Purchase Agreement”) with Williamsburg Venture Holdings, LLC, a Nevada limited liability
company (the “Investor”), pursuant to which the Company has the right to sell to the Investor up to $5,000,000 in shares
of its common stock, $0.0001 par value per share (“Common Stock”), subject to certain limitations.
Under
the terms and subject to the conditions of the Purchase Agreement, the Investor is obligated to purchase up to $5,000,000 in shares of
Common Stock (subject to certain limitations) from time-to-time over the 12-month period commencing on the date that a registration statement,
which the Company agreed to file with the Securities and Exchange Commission (the “SEC”), is declared effective by the SEC.
The price per share of Common Stock shall be ninety percent (90%) of the average of the volume weighted average price of the Company’s
Common Stock for five trading days following the clearing date associated with the put notice delivered by the Company to the Investor.
If the shares are DWAC eligible, the valuation period begins on the date such notice is delivered. The maximum amount of each put shall
be the lower of 200% of the average daily trading volume and $500,000.
The
Purchase Agreement provides for the payment of $25,000 liquidated damages to the Investor if Paul Adler, the sole officer of the Company,
resigns or is removed as chief executive officer or chief financial officer of the Company.
The
Company’s sales of shares of Common Stock to the Investor under the Purchase Agreement are limited to no more than the number of
shares that would result in the beneficial ownership by the Investor and its affiliates, at any single point in time, of more than 4.99%
of the then outstanding shares of the Common Stock.
The
Company agreed with the Investor that it will not enter into any other credit equity line agreements without the prior consent of the
Investor.
As
consideration for its commitment to purchase shares of Common Stock pursuant to the Purchase Agreement, the Company agreed to issue to
the Investor 50,000 shares of Common Stock (the “Commitment Shares”) upon execution of the Purchase Agreement.
In
connection with Purchase Agreement, the Company also entered into a registration rights agreement (the “Registration Rights Agreement”)
with the Investor, dated November 2, 2021. Pursuant to the terms of the Registration Rights Agreement, the Company shall file a registration
statement with the SEC with respect to the shares of Common Stock issuable to the Investor pursuant to the Purchase Agreement and the
Commitment Shares no later than December 31, 2021.
The
Company has the right to terminate the Purchase Agreement at any time, at no cost or penalty. Actual sales of shares of Common Stock
to the Investor under the Purchase Agreement will depend on a variety of factors to be determined by the Company from time to time, including
(among others) market conditions, the trading price of the Common Stock and determinations by the Company as to the appropriate sources
of funding for the Company and its operations.
The
Purchase Agreement and the Registration Rights Agreement contain customary representations, warranties and agreements of the Company
and the Investor and customary conditions to completing future sale transactions, indemnification rights and obligations of the parties.
The
foregoing descriptions of the Purchase Agreement and the Registration Rights Agreement are qualified in their entirety by reference to
the full text of the Purchase Agreement and the Registration Rights Agreement, copies of which are attached hereto as Exhibit 10.1 and
10.2, respectively, and each of which is incorporated herein in its entirety by reference.