DEBT CONVERSION AGREEMENT
Exhibit
10.1
This
Debt Conversion Agreement (the “Agreement”) is entered into this
26 day of April, 2019 by and among True Drinks Holdings Inc., a
Nevada corporation (the “Company”), and Red Xxxxx
Holdings, LLC, a Delaware limited liability company
(“Red Xxxxx”).
Each of the Company, and Red Xxxxx may be referred to herein,
individually, as a “Party” and, collectively, as the
“Parties”.
WHEREAS, The Company and Red Xxxxx wish
to restructure $3,935,757 principal amount of debt, together with
all accrued and unpaid interest thereon (“Outstanding Amount”) issued to
Red Xxxxx in the form of several promissory notes set forth on
Exhibit A attached
hereto (the “Notes”) into shares of Company
common stock, par value $0.001 per share (“Common Stock”); and
NOW, THEREFORE, for good and valuable
consideration, the sufficiency of which is hereby acknowledged, the
Parties hereby agree as follows:
1.
Conversion. The
Company and Red Xxxxx hereby agree to convert the Outstanding
Amount and all other payment obligations as of the date hereof into
1,070,741,474 shares of Common Stock (the “Conversion Shares”)
(“Conversion”),
which Conversion shall only be effective upon closing of the
Exchange, as such term is defined in the Exchange Agreement, a copy
of which is attached hereto as Exhibit B. Upon consummation of
the Exchange, the Parties agree and acknowledge that the Notes
shall terminate and be of no further force and effect, and shall
only represent the right to receive the Conversion
Shares.
2.
Representations and
Warranties. Each Party represents and warrants to each other
Party, as of the date hereof, that with respect to itself, (a) it
has the corporate power to execute and deliver this Agreement and
perform its obligations under this Agreement, (b) this Agreement
has been duly executed and delivered by it and is legally binding
upon it (assuming that each other Party has duly executed and
delivered this Agreement), enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting Red Beards’ rights and
to general principles of equity, and (c) the execution, delivery
and performance of this Agreement by the Parties, and the
consummation of the transactions contemplated by this Agreement,
will not (i) violate any provision of any governing instruments of
the Parties, (ii) result in a material default (with due notice or
lapse of time or both) or the creation of any lien or encumbrance
or give rise to any right of termination, cancellation or
acceleration under any material note, bond, mortgage, indenture, or
other financing instrument to which the Parties are parties or by
which they are bound, (iii) violate any judgment, order, ruling or
regulation applicable to the Parties as parties in interest, or
(iv) violate any law applicable to the Parties, except any matters
described in clauses (ii) or (iii) above which would not have a
material adverse effect on the Parties or their
properties.
3.
Notices.
(a) Subject to clause
(b) below, all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by
facsimile or e-mail to the address of such Party set forth on the
signature page hereto.
(b) Any Party
hereto may change its address or facsimile number for notices and
other communications hereunder by notice to the other in the manner
set forth above.
4.
Governing Law;
Jurisdiction.
(a) THIS AGREEMENT AND ANY CLAIMS,
CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR
TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE
OF CALIFORNIA WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW
WHICH WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION.
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(b) THE PARTIES HEREBY IRREVOCABLY AND
UNCONDITIONALLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS
OF THE STATE OF CALIFORNIA SITTING IN SAN DIEGO COUNTY AND OF THE
UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF
CALIFORNIA, AND ANY APPROPRIATE APPELLATE COURTS THEREFROM, AND
EACH PARTY HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF
ANY DISPUTE, CONTROVERSY OR CLAIM ARISING OUT OF, OR IN CONNECTION
WITH, THIS AGREEMENT MAY BE HEARD AND DETERMINED IN SUCH COURTS.
THE PARTIES HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAWS, ANY OBJECTION WHICH THEY MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH DISPUTE,
CONTROVERSY OR CLAIM BROUGHT IN ANY SUCH COURT OR ANY DEFENSE OF
INCONVENIENT FORUM FOR THE MAINTENANCE OF SUCH DISPUTE, CONTROVERSY
OR CLAIM IN ANY SUCH COURT. EACH OF THE PARTIES HERETO
AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION, LITIGATION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY APPLICABLE LAW.
5. WAIVER OF JURY
TRIAL. EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN CONNECTION WITH ANY DISPUTE, CONTROVERSY
OR CLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.
6.
Waivers;
Amendments.
(a) No failure or delay
by the Parties in exercising any right or power hereunder shall
operate as a waiver hereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude
any other or further exercise hereof or the exercise of any other
right or power. The rights and remedies of the Parties hereunder
are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of this
Agreement or consent to any departure by any Party therefrom shall
in any event be effective unless the same shall be permitted by
clause (b) of this Section, and then such waiver or consent
shall be effective only in the specific instance and for the
purpose for which given.
(b) Neither this
Agreement nor any other provision hereof may be waived, amended or
modified except pursuant to an agreement in writing entered into by
the Parties and expressly identified as a waiver, amendment or
modification.
7.
Assignment. The
provisions of this Agreement shall be binding upon and inure to the
benefit of the Parties hereto and their respective successors and
assigns.
8.
No Third-Party
Beneficiaries. Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any person (other than
the Parties hereto, their respective successors and assigns
permitted hereby) any legal or equitable right, cause of action,
remedy or claim under or by reason of this Agreement.
9.
Severability. Any
provision of the Agreement held to be invalid, illegal or
unenforceable in any respect in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity,
illegality or unenforceability without affecting the validity,
legality and enforceability of the remaining provisions thereof;
and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other
jurisdiction.
10.
Counterparts. This
Agreement may be executed in counterparts, each of which shall be
deemed an original instrument, but all such counterparts together
shall constitute but one agreement.
11.
Headings. Section
headings used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or
be taken into consideration in interpreting, this
Agreement.
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12.
Interpretation. The
Parties acknowledge and agree that (i) each Party has had the
opportunity to exercise business discretion in relation to the
negotiation of the details of the transaction contemplated hereby,
(ii) this Agreement is the result of arms-length negotiations from
equal bargaining positions and (iii) each Party and its counsel
participated in the preparation and negotiation of this Agreement.
Any rule of construction that a contract be construed against the
drafter shall not apply to the interpretation or construction of
this Agreement.
13.
Entire Agreement.
This Agreement constitute the entire agreement among the Parties
pertaining to the subject matter hereof, and supersede all prior
agreements, understandings, negotiations and discussions, whether
oral or written, of the Parties pertaining to the subject matter
hereof.
[Remainder of Page Intentionally Left Blank]
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IN
WITNESS WHEREOF, the Parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the
day and year first above written.
By:
/s Xxxxxx Xxx
Xxxxxx
Name:
Xxxxxx Xxx Xxxxxx
Title:
Chief Executive Officer
RED
XXXXX HOLDINGS, LLC
By:
/s/ Xxxxxxx
Xxxxx
Name:
Xxxxxxx Xxxxx
Title:
Manager
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EXHIBIT A
Red Xxxxx Holdings, LLC
List of
Notes Subject to Conversion:
Red
Xxxxx Holdings 07/25/2017 note
Red
Xxxxx Holdings 08/28/2017 note
Red
Xxxxx Holdings 09/25/2017 note
Red
Xxxxx Holdings 10/27/2017 note
Red
Xxxxx Holdings 11/14/2017 note
Red
Xxxxx Holdings 01/11/2018 note
Red
Xxxxx Holdings 01/29/2018 note
Red
Xxxxx Holdings 02/14/2018 note
Red
Xxxxx Holdings 02/27/2018 note
Xxxxxxx
X Xxxxxxx 07/31/2017 note
Xxxxx
Court, LLC 07/28/2017 note
Xxxxxx
X XxXxx Trust 11/15/2017 note
Xxxx X
XxXxx Trust 11/15/2017 note
Aggregate Principal
Amount of Notes:
$
2,465,000
Aggregate Accrued
Interest through 4-22-19:
$
291,493
Aggregate Per Diem
Interest:
$
-
Total Shares Issued
upon Conversion (through April 22, 2019):
403,443,450
Additional Shares
Issuable Per Diem:
-_
List of
Additional Debt Subject to Conversion:
Short-term
Debt
Aggregate Principal
Amount of Short-term Debt:
$
656,870
Total Shares Issued
upon Conversion (through April 22, 2019):
437,535,224
Trade
Debt
Aggregate Principal
Amount of Short-term Debt:
$
813,887
Total Shares Issued
upon Conversion (through April 22, 2019):
229,762,800
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