WARRANT EXCHANGE AGREEMENT
Exhibit 10.3
This
Warrant Exchange Agreement (this “Agreement”) is dated as of
January __, 2017, by and between True Drinks Holdings, Inc., a
Nevada corporation (the “Company”), and ____________ (the
“Holder”).
RECITALS
WHEREAS, the Holder currently hold
warrants to purchase an aggregate total of ____________ shares of
the Company’s common stock, par value $0.001 per share
(“Common
Stock”) (the “Warrants”), which Warrants are
more particularly identified on Schedule A attached hereto;
and
WHEREAS, subject to the terms and
conditions set forth herein, the Company and the Holder desire to
cancel and retire the Warrants, in exchange for a total of
___________ shares of the Company’s Common Stock (the
“Exchange”) in
reliance on the exemption from registration provided by Section
3(a)(9) and/or 4(2) of the Securities Act of 1933, as amended (the
“Securities
Act”).
NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which are hereby
agreed and acknowledged, the parties hereby agree as
follows:
AGREEMENT
1. Securities
Exchange.
(a) In consideration of and in express
reliance upon the representations, warranties, covenants, terms and
conditions of this Agreement, the Holder agrees to deliver and
surrender to the Company for cancellation the Warrants, in exchange
for an aggregate total of _________ shares of Common Stock
(“Exchange
Shares”) and the Company agrees to issue and deliver
the Exchange Shares to the Holder.
(b) The closing under this Agreement (the
“Closing”)
shall take place upon the satisfaction of each of the conditions
set forth in Sections 4 and 5 hereof (the “Closing Date”).
(c) At the Closing, the Holder shall
deliver to the Company for cancellation the Warrants. At the
Closing, the Company shall issue to the Holders a certificate(s)
evidencing the Exchange Shares.
2. Representations, Warranties and
Covenants of the Holder. The Holder hereby makes the
following representations and warranties to the Company, and
covenants for the benefit of the Company:
(a) To the extent the Holder is a
corporation, limited liability company or other type of entity, the
Holder is validly existing and in good standing under the laws of
the jurisdiction of its organization.
(b) This Agreement has been duly
authorized, validly executed and delivered by the Holder and is a
valid and binding agreement and obligation of the Holder,
enforceable against the Holder in accordance with its terms,
subject to limitations on enforcement by general principles of
equity and by bankruptcy or other laws affecting the enforcement of
creditors’ rights generally, and the Holder has full power
and authority to execute and deliver the Agreement and the other
agreements and documents contemplated hereby and to perform its
obligations hereunder and thereunder.
(c) The Holder understands that the
Exchange Shares are being offered and sold in reliance on specific
provisions of Federal and state securities laws, and that the
Company is relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgments and
understandings of the Holder set forth herein for purposes of
qualifying for exemptions from registration under the Securities
Act and applicable state securities laws.
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(d) The Holder is an “accredited
investor” as defined under Rule 501 of Regulation D,
promulgated under the Securities Act.
(e) The Holder will be acquiring the
Exchange Shares for their own account, for investment purposes, and
not with a view to any resale or distribution in whole or in part,
in violation of the Securities Act or any applicable securities
laws; provided,
however, that
notwithstanding the foregoing, the Holder does not covenant to hold
the Exchange Shares for any minimum period of time.
(f) The offer and sale of the Exchange
Shares is intended to be exempt from registration under the
Securities Act, by virtue of Section 3(a)(9) and/or 4(2) thereof.
The Holder understands that the Securities purchased hereunder are
“restricted securities,” as that term is defined in the
Securities Act and the rules thereunder, have not been registered
under the Securities Act, and that none of the Exchange Shares can
be sold or transferred unless they are first registered under the
Securities Act and such state and other securities laws as may be
applicable or the Company receives an opinion of counsel reasonably
acceptable to the Company that an exemption from registration under
the Securities Act is available (and then the Exchange Shares may
be sold or transferred only in compliance with such exemption and
all applicable state and other securities laws).
(g) The Holder owns and holds,
beneficially and of record, the entire right, title, and interest
in and to the Warrants free and clear of all rights and
Encumbrances (as defined below). The Holder has the full power and
authority to vote, transfer and dispose of the Warrants free and
clear of any right or Encumbrance other than restrictions under the
Securities Act and applicable state securities laws. Other than the
transactions contemplated by this Agreement, there is no
outstanding vote, plan, pending proposal, or other right of any
person to acquire all or any of the Warrants. As used herein,
“Encumbrances”
shall mean any security or other property interest or right, claim,
lien, pledge, option, charge, security interest, contingent or
conditional sale, or other title claim or retention agreement,
interest or other right or claim of third parties, whether
perfected or not perfected, voluntarily incurred or arising by
operation of law, and including any agreement (other than this
Agreement) to grant or submit to any of the foregoing in the
future.
(h) In
the event the shares of common stock issuable upon exercise of the
Warrants were registered by the Company under the Securities Act
(the “Registered Warrant
Shares”), the Holder acknowledges and agrees that the
Exchange Shares are not registered under Securities
Act, and, by exchanging any such Warrants for Exchange Shares, the
Holder shall not receive Registered Warrant Shares that otherwise
may have been issued upon exercise thereof.
3. Representations, Warranties and
Covenants of the Company. The Company represents and warrants to
the Holder, and covenants for the benefit of the Holder, as
follows:
(a) The Company has been duly incorporated
and is validly existing and in good standing under the laws of the
state of Nevada, with full corporate power and authority to own,
lease and operate its properties and to conduct its business as
currently conducted, and is duly registered and qualified to
conduct its business and is in good standing in each jurisdiction
or place where the nature of its properties or the conduct of its
business requires such registration or qualification, except where
the failure to register or qualify would not have a Material
Adverse Effect. For purposes of this Agreement, “Material Adverse Effect” shall
mean any material adverse effect on the business, operations,
properties, prospects, or financial condition of the Company and
its subsidiaries and/or any condition, circumstance, or situation
that would prohibit or otherwise materially interfere with the
ability of the Company to perform any of its obligations under this
Agreement in any material respect.
(b) The Exchange Shares have been duly
authorized by all necessary corporate action and, when paid for or
issued in accordance with the terms hereof, the Exchange Shares
shall be validly issued and outstanding, fully paid and
nonassessable, free and clear of all liens, encumbrances and rights
of refusal of any kind.
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(c) This Agreement has been duly
authorized, validly executed and delivered on behalf of the Company
and is a valid and binding agreement and obligation of the Company
enforceable against the Company in accordance with its terms,
subject to limitations on enforcement by general principles of
equity and by bankruptcy or other laws affecting the enforcement of
creditors’ rights generally, and the Company has full power
and authority to execute and deliver the Agreement and the other
agreements and documents contemplated hereby and to perform its
obligations hereunder and thereunder.
(d) The execution and delivery of the
Agreement and the consummation of the transactions contemplated by
this Agreement by the Company, will not (i) conflict with or result
in a breach of or a default under any of the terms or provisions
of, (A) the Company’s certificate of incorporation or
by-laws, or (B) of any material provision of any indenture,
mortgage, deed of trust or other material agreement or instrument
to which the Company is a party or by which it or any of its
material properties or assets is bound, (ii) result in a violation
of any provision of any law, statute, rule, regulation, or any
existing applicable decree, judgment or order by any court, Federal
or state regulatory body, administrative agency, or other
governmental body having jurisdiction over the Company, or any of
its material properties or assets or (iii) result in the creation
or imposition of any material lien, charge or encumbrance upon any
material property or assets of the Company or any of its
subsidiaries pursuant to the terms of any agreement or instrument
to which any of them is a party or by which any of them may be
bound or to which any of their property or any of them is subject
except in the case of clauses (i)(B), (ii) or (iii) for any such
conflicts, breaches, or defaults or any liens, charges, or
encumbrances which would not have a Material Adverse
Effect.
(e) The delivery and issuance of the
Exchange Shares in accordance with the terms of and in reliance on
the accuracy of the Holder’s representations and warranties
set forth in this Agreement will be exempt from the registration
requirements of the Securities Act.
(f) No consent, approval or authorization
of or designation, declaration or filing with any governmental
authority on the part of the Company is required in connection with
the valid execution and delivery of this Agreement or the offer,
sale or issuance of the Exchange Shares or the consummation of any
other transaction contemplated by this Agreement.
(g) The Company has complied and will
comply with all applicable federal and state securities laws in
connection with the offer, issuance and delivery of the Exchange
Shares hereunder. Neither the Company nor anyone acting on its
behalf, directly or indirectly, has or will sell, offer to sell or
solicit offers to buy any of the Exchange Shares, or similar
securities to, or solicit offers with respect thereto from, or
enter into any preliminary conversations or negotiations relating
thereto with, any person, or has taken or will take any action so
as to bring the issuance and sale of any of the Exchange Shares
under the registration provisions of the Securities Act and
applicable state securities laws. Neither the Company nor any of
its affiliates, nor any person acting on its or their behalf, has
engaged in any form of general solicitation or general advertising
(within the meaning of Regulation D under the Securities Act) in
connection with the offer or sale of any of the Exchange
Shares.
(h) The Company represents that it has not
paid, and shall not pay, any commissions or other remuneration,
directly or indirectly, to any third party for the solicitation of
the Exchange. Other than the exchange of the Warrants, the Company
has not received any consideration for the Exchange Shares. By
virtue of such exchange, the holding period for the Exchange Shares
under Rule 144 of the Securities Act shall begin no later than the
holding period for the Warrants, as applicable.
(i) The
Company shall cause its Common Stock to continue to be registered
under Section 12(b) or 12(g) of the Securities Exchange Act of 1934
(the “Exchange
Act”), comply with all requirements related to any
registration statement filed pursuant to this Agreement, and not
take any action or file any document (whether or not permitted by
the Securities Act or the rules promulgated thereunder) to
terminate or suspend such registration or to terminate or suspend
its reporting and filing obligations under the Exchange Act and the
Securities Act, except as permitted herein. The Company will take
all action necessary to continue the listing or trading of its
Common Stock on the OTC Pink Market or other exchange or market on
which the Common Stock is trading.
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4. Conditions Precedent to the Obligation
of the Company to Consummate the Exchange. The obligation
hereunder of the Company to issue and deliver the Exchange Shares
to the Holder and consummate the Exchange is subject to the
satisfaction or waiver, at or before the Closing Date, of each of
the conditions set forth below. These conditions are for the
Company’s sole benefit and may be waived by the Company at
any time in its sole discretion.
(a) The Holder shall have executed and
delivered this Agreement.
(b) The Holder shall have performed,
satisfied and complied in all material respects with all covenants,
agreements and conditions required by this Agreement to be
performed, satisfied or complied with by the Holder at or prior to
the Closing Date.
(c) The representations and warranties of
the Holder shall be true and correct in all material respects as of
the date when made and as of the Closing Date as though made at
that time, except for representations and warranties that are
expressly made as of a particular date, which shall be true and
correct in all material respects as of such date.
5. Conditions Precedent to the Obligation
of the Holder to Consummate the Exchange. The obligation
hereunder of the Holder to surrender the Warrants, accept the
Exchange Shares and consummate the Exchange is subject to the
satisfaction or waiver, at or before the Closing Date, of each of
the conditions set forth below. These conditions are for the
Holder’s sole benefit and may be waived by the Holder at any
time in its sole discretion.
(a) The Company shall have executed and
delivered this Agreement.
(b) The Company shall have performed,
satisfied and complied in all material respects with all covenants,
agreements and conditions required by the Agreement to be
performed, satisfied or complied with by the Company at or prior to
the Closing Date.
(c) Each of the representations and
warranties of the Company shall be true and correct in all material
respects as of the date when made and as of the Closing Date as
though made at that time, except for representations and warranties
that speak as of a particular date, which shall be true and correct
in all material respects as of such date.
(d) No statute, regulation, executive
order, decree, ruling or injunction shall have been enacted,
entered, promulgated or endorsed by any court or governmental
authority of competent jurisdiction which prohibits the
consummation of any of the transactions contemplated by this
Agreement at or prior to the Closing Date.
(e) As of the Closing Date, no action,
suit or proceeding before or by any court or governmental agency or
body, domestic or foreign, shall be pending against or affecting
the Company, or any of its properties, which questions the validity
of the Agreement or the transactions contemplated thereby or any
action taken or to be taken pursuant thereto. As of the Closing
Date, no action, suit, claim or proceeding before or by any court
or governmental agency or body, domestic or foreign, shall be
pending against or affecting the Company, or any of its properties,
which, if adversely determined, is reasonably likely to result in a
Material Adverse Effect.
6. Governing Law; Consent to
Jurisdiction. This
Agreement shall be governed by and interpreted in accordance with
the laws of the State of California without giving effect conflicts
of law principles that would result in the application of the
substantive laws of another jurisdiction. Each of the Parties
consents to the exclusive jurisdiction of the Federal courts whose
districts encompass any part of the State of California in
connection with any dispute arising under this Agreement and hereby
waives, to the maximum extent permitted by law, any objection,
including any objection based on forum non conveniens, to the bringing
of any such proceeding in such jurisdictions. Each Party waives its
right to a trial by jury. Each Party to this Agreement irrevocably
consents to the service of process in any such proceeding by the
mailing of copies thereof by registered or certified mail, postage
prepaid, to such Party at its address set forth herein. Nothing
herein shall affect the right of any Party to serve process in any
other manner permitted by law.
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7. Notices. All notices and other
communications provided for or permitted hereunder shall be made in
writing by hand delivery, express overnight courier, registered
first class mail, or telecopier (provided that any notice sent by
telecopier shall be confirmed by other means pursuant to this
Section 7), initially to the address set forth below, and
thereafter at such other address, notice of which is given in
accordance with the provisions of this Section.
(a) if to the Company:
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00000
XxxXxxxxx Xxxx., Xxxxx 000
Xxxxxx,
Xxxxxxxxxx 00000
Attention: Chief
Executive Officer
Tel.
No.: (000) 000-0000
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with a
copy to:
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Disclosure Law
Group
000
Xxxx Xxxxxxxx, Xxxxx 000
Xxx
Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx
X. Xxxxxx, Esq.
Tel
No.: (000) 000-0000
Fax
No.: (000) 000-0000
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(b) if to the Holder:
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_____________________
_____________________
_____________________
Attention:
____________
Tel.
No.: _____________
Fax
No.: _____________
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All
such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; when
receipt is acknowledged, if telecopied; or when actually received
or refused if sent by other means.
8. Entire Agreement. This Agreement constitutes the entire
understanding and agreement of the parties with respect to the
subject matter hereof and supersedes all prior and/or
contemporaneous oral or written proposals or agreements relating
thereto all of which are merged herein. This Agreement may not be
amended or any provision hereof waived in whole or in part, except
by a written amendment signed by both of the parties.
9. Counterparts. This Agreement may be executed by
facsimile signature and in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one
and the same instrument.
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IN
WITNESS WHEREOF, this Agreement was duly executed on the date first
written above.
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By:______________________________________
Xxxxx Xxxxxxx
Chief Executive Officer
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HOLDER
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By:_____________________________________
Name:
Title:
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Our
transfer agent shows your currently held shares are issued as
follows:
Issue
shares in the name of (if none currently held or different from
above):
__________________________________________________________________
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SCHEDULE A
SCHEDULE
OF WARRANTS
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Warrant
Holder
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Warrant
Number
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Date of
Issuance
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Date of
Expiration
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Number
Outstanding
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