Exhibit 10.1

 

DEBT CONVERSION AGREEMENT

 

THIS DEBT CONVERSION AGREEMENT (the “Agreement”) is entered into as of October
27, 2016, by and between LifeApps Brands Inc., a Delaware corporation (the
“Company”) and Lesly A. Thompson (the “Lender”). The Company and Lender may be
referred to herein individually as a “Party” and collectively as the “Parties.”

 

Recitals:

 

WHEREAS, on November 9, 2015, Lender made an unsecured $25,000 convertible loan
to the Company paying interest at the rate of 10% per annum (the “Loan”) to be
used by the Company for working capital purposes; and

 

WHEREAS, the Loan and the terms thereof were evidenced in a writing signed by
the Parties on November 9, 2015; and

 

WHEREAS, the Loan was due and payable on March 21, 2016 and is presently due and
payable; and

 

WHEREAS, the Loan is convertible into shares of the Company’s common stock,
$0.001 par value per share (the “Common Stock”) at a conversion price of $0.75
per share which is substantially greater than the present market price for the
Common Stock; and

 

WHEREAS, the Parties wish to revise the conversion price to $0.0055 per share
(the “Revised Conversion Price”) which is the closing sale price for the
Company’s Common Stock on the date of this Agreement; and

 

WHEREAS, in consideration of the Revised Conversion Price, the Lender has agreed
to waive the payment of interest due on the Loan and to immediately convert the
principal amount of the Loan ($25,000) into shares of Common Stock at the
Revised Conversion Price; and

 

WHEREAS, the Parties desire to set forth their agreements and understandings
with respect thereto.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the Parties agree as follows:

 

1.          Conversion to Common Stock and Cancellation of Accrued
Interest.  Effective as of the date hereof, the principal amount of the Loan
($25,000) shall be converted at the Revised Conversion Price into 4,545,455
shares of Common Stock (the “Conversion Shares”) and the accrued interest due on
the Loan shall be cancelled.

 

 

 

 

2.          Amounts Repaid in Full. For and in consideration of the issuance of
the Conversion Shares to Lender, the Loan shall be deemed to be repaid in full,
and the Company shall have no further obligations in connection with the Loan.

 

3.          Waiver and Release. Lender, on behalf of herself, and each of her
successors, assigns, representatives and agents (collectively, the “Releasing
Parties”), hereby covenants not to sue and fully, finally and forever completely
releases the Company and its present, future and former officers, directors,
stockholders, employees, agents, attorneys and representatives (collectively,
the “Company Released Parties”) of and from any and all claims, actions,
obligations, liabilities, demands and/or causes of action, of whatever kind or
character, whether now known or unknown, which the Releasing Parties have or
might claim to have against the Company Released Parties for any and all
injuries, harm, damages (actual and punitive), costs, losses, expenses,
attorneys’ fees and/or liability or other detriment, if any, whenever incurred
or suffered by the Releasing Parties arising from, relating to, or in any way
connected with, any fact, event, transaction, action or omission that occurred
or failed to occur with respect to the Loan on or prior to the date of this
Agreement.

 

4.          Restricted Stock. (a) The Conversion Shares to be issued hereunder
have not been registered with the United States Securities and Exchange
Commission, or with the securities regulatory authority of any state. The
Conversion Shares are subject to restrictions imposed by federal and state
securities laws and regulations on transferability and resale, and may not be
transferred assigned or resold except as permitted under the Securities Act of
1933, as amended (the “Act”), and the applicable state securities laws, pursuant
to registration thereunder or exemption therefrom.

 

(b)          Lender understands that the certificates representing the
Conversion Shares shall bear a restrictive legend in substantially the following
form (and a stop-transfer order may be placed against transfer of such
certificates or other instruments):

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES
LAWS, AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD,
PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT
WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS, OR (2) AN EXEMPTION FROM SUCH REGISTRATION EXISTS AND THE
COMPANY RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH
COUNSEL AND OPINION ARE SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE
OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN THE MANNER CONTEMPLATED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR APPLICABLE STATE
SECURITIES LAWS.

 

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The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Conversion Shares upon
which it is stamped, if (a) such Conversion Shares are sold pursuant to a
registration statement under the Securities Act, or (b) such holder delivers to
the Company an opinion of counsel, reasonably acceptable to the Company, that a
disposition of the Conversion Shares is being made pursuant to an exemption from
such registration and that the Shares, after such transfer, shall no longer be
“restricted securities” within the meaning of Rule 144.

 

5.            Lender’s Representations. The Company is issuing the Conversion
Shares to Lender in reliance upon the following representations made by Lender:

 

(a)          Lender is acquiring the Conversion Shares for investment for her
own account and not with the view to, or for resale in connection with, any
distribution thereof. Lender understands and acknowledges that the Conversion
Shares have not been registered under the Act or any state securities laws, by
reason of a specific exemption from the registration provisions of the Act and
applicable state securities laws, which depends upon, among other things, the
bona fide nature of the investment intent and other representations of Lender as
expressed herein.

 

(b)          Lender (i) has had, and continues to have, access to detailed
information with respect to the business, financial condition, results of
operations and prospects of the Company; (ii) has received or has been provided
access to all material information concerning an investment in the Company; and
(iii) has been given the opportunity to obtain any additional information or
documents from, and to ask questions and receive answers of, the officers,
directors and representatives of the Company to the extent necessary to evaluate
the merits and risks related to an investment in the Company represented by the
Conversion Shares.

 

(c)          As a result of Lender’s study of the aforementioned information and
Lender’s prior overall experience in financial matters, and Lender’s familiarity
with the nature of businesses such as the Company, Lender is properly able to
evaluate the capital structure of the Company, the business of the Company, and
the risks inherent therein.

 

(d)          Lender’s investment in the Company pursuant to this Agreement is
consistent, in both nature and amount, with Lender’s overall investment program
and financial condition.

 

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(e)          Lender’s financial condition is such that Lender can afford to bear
the economic risk of holding the Conversion Shares, and to suffer a complete
loss of Lender’s investment in the Company represented by the Conversion Shares.

 

(f)          Lender’s principal address is as set forth in Section 6(b) hereof.

 

(g)          Lender understands that a thinly traded public market now exists,
and there may never be an active public market for, the Company’s Common Stock,
including the Conversion Shares.

 

(h)          All action on the part of Lender, and its officers, directors and
partners, if applicable, necessary for the authorization, execution and delivery
of this Agreement and the performance of all obligations of Lender hereunder and
thereunder has been taken, and this Agreement, assuming due execution by the
parties hereto, constitutes valid and legally binding obligations of Lender,
enforceable in accordance with its terms, subject to: (i) judicial principles
limiting the availability of specific performance, injunctive relief, and other
equitable remedies and (ii) bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect generally relating to or
affecting creditors’ rights.

 

(i)          Lender realizes that because of the inherently speculative nature
of businesses of the kind conducted and contemplated by the Company, the
Company’s financial results may be expected to fluctuate from month to month and
from period to period and will, generally, involve a high degree of financial
and market risk that could result in substantial or, at times, even total losses
for investors in securities of the Company.

 

6.           Miscellaneous.

 

(a)          THIS AGREEMENT IS MADE UNDER, AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS
MADE AND TO BE PERFORMED SOLELY THEREIN, WITHOUT GIVING EFFECT TO PRINCIPLES OF
CONFLICTS OF LAW. In any action between or among any of the Parties arising out
of this Agreement, (i) each of the Parties irrevocably and unconditionally
consents and submits to the exclusive jurisdiction and venue of the state and
federal courts having jurisdiction over New York County, New York; (ii) if any
such action is commenced in a state court, then, subject to applicable law, no
party shall object to the removal of such action to any federal court having
jurisdiction over New York County, New York; (iii) each of the parties
irrevocably waives the right to trial by jury; and (iv) each of the parties
irrevocably consents to service of process by first class certified mail, return
receipt requested, postage prepared, to the address at which such party is to
receive notice in accordance with this Agreement.

 

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(b)          All notices, requests, demands, claims, and other communications
hereunder shall be in writing. Any notice, request, demand, claim or other
communication hereunder shall be deemed duly delivered four business days after
it is sent by registered or certified mail, return receipt requested, postage
prepaid, or one business day after it is sent for next business day delivery via
a reputable nationwide overnight courier service, in each case to the intended
recipient as set forth below:

 

If to the Company: Copy to (which copy shall not constitute notice hereunder):  
  LifeApps Brands, Inc. CKR Law LLP Polo Plaza, 3790 Via De La Valle, #116E 1330
Avenue of the Americas, 14th Floor Del Mar, CA 92014 New York, NY 10019
Attention:  Robert Gayman Attention:  Scott Rapfogel, Esq.
Telephone:  525.699.2111 Telephone:  212.259.7300   Facsimile:  212.259.8200    
If to Lender:       Lesly Thompson   5404 Cody Drive   West Des Moines, IA 50266
 

 

Any Party may give any notice, request, demand, claim or other communication
hereunder using any other means (including personal delivery, expedited courier,
messenger service, telecopy, telex, ordinary mail or electronic mail), but no
such notice, request, demand, claim or other communication shall be deemed to
have been duly given unless and until it actually is received by the Party for
whom it is intended. Any Party may change the address to which notices,
requests, demands, claims, and other communications hereunder are to be
delivered by giving the other Parties notice in the manner herein set forth.

 

(c)          This Agreement constitutes the entire agreement between the Parties
and supersedes all prior oral or written negotiations and agreements between the
Parties with respect to the subject matter hereof. No modification, variation or
amendment of this Agreement (including any exhibit hereto) shall be effective
unless made in writing and signed by both Parties.

 

(d)          Each Party to this Agreement hereby represents and warrants to the
other Party that it has had an opportunity to seek the advice of its own
independent legal counsel with respect to the provisions of this Agreement and
that its decision to execute this Agreement is not based on any reliance upon
the advice of any other Party or its legal counsel. Each Party represents and
warrants to the other Party that in executing this Agreement such Party has
completely read this Agreement and that such Party understands the terms of this
Agreement and its significance. This Agreement shall be construed neutrally,
without regard to the Party responsible for its preparation.

 

(e)          Each Party to this Agreement hereby represents and warrants to the
other Party that (i) the execution, performance and delivery of this Agreement
has been authorized by all necessary action by such Party; (ii) the
representative executing this Agreement on behalf of such Party has been granted
all necessary power and authority to act on behalf of such Party with respect to
the execution, performance and delivery of this Agreement; and (iii) the
representative executing this Agreement on behalf of such Party is of legal age
and capacity to enter into agreements which are fully binding and enforceable
against such Party.

 

(f)          This Agreement may be executed in any number of counterparts, all
of which taken together shall constitute a single instrument.

 

[The Remainder of this Page is Left Blank Intentionally. Signature Page
Follows.]

 

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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day
and year first above written.

 

  LIFEAPPS BRANDS, INC.       By: /s/Robert Gayman   Name: Robert Gayman  
Title: Chief Executive Officer         /s/Lesly A. Thompson   Lesly A. Thompson

 

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