EXHIBIT 10.1

 

WARRANT EXERCISE AGREEMENT

 

This Warrant Exercise Agreement (this “Agreement”), dated as of May 2, 2019, is
entered into by and between Iconic Brands, Inc., a Nevada corporation (the
“Company”), and [·], a [·](the “Holder”), the holder of warrants to purchase
shares of the Company’s common stock, par value $0.001 per share (the “Common
Stock”).

 

WHEREAS, the Holder beneficially owns in the aggregate [·] ([·]) warrants to
purchase Common Stock with an exercise price of $0.32 per share that are
exercisable on or prior to 5:00 p.m. (New York City time) on November 15, 2022
and May 21, 2023, respectively, as set forth on the Holder’s signature page
hereto (collectively, the “Original Warrants”).

 

WHEREAS, the Holder desires to exercise such Original Warrants for cash in the
amounts set forth on the applicable signature pages hereto and, immediately
prior to such exercise and in consideration of the Holder’s cash exercise of
such Original Warrants, the Company has agreed to issue the Holder, in addition
to the shares of Common Stock to which such exercising Holder is entitled
pursuant to the exercise of the Original Warrants, 200% of new warrants as the
number of Original Warrants being exercised in the form attached hereto as
Exhibit A (the “New Warrants”). The New Warrants shall have an exercise price of
$2.25 per share, will have piggyback registration rights, and will have a
cashless exercise provision after 6 months if there is no registration statement
in effect. The shares of Common Stock underlying the Original Warrants are
referred to herein as the “Warrant Shares”. The shares of Common Stock
underlying the New Warrants are referred to herein as the “New Warrant Shares”
and collectively with the New Warrants and Warrant Shares, the “Securities”.

 

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for good and valuable consideration the receipt and adequacy of
which are hereby acknowledged, the Holder and the Company agree as follows:

 

ARTICLE I

DEFINITIONS

 

Section 1.1 Definitions. Capitalized terms not defined in this Agreement shall
have the meanings ascribed to such terms in the New Warrants.

 

ARTICLE II

EXERCISE OF ORIGINAL WARRANTS

 

Section 2.1 Exercise of Warrants. By executing this Agreement, the Company and
the Holder hereby agree that the Holder shall be deemed to have exercised the
number of Original Warrants set forth on the signature page hereto for aggregate
cash proceeds to the Company in the amount set forth on the Holder’s signature
page hereto, pursuant to the terms of the Original Warrants. The Holder shall
deliver the aggregate cash exercise price for such Original Warrants to the bank
account set forth on the Company’s signature page hereto within two Trading Days
after the date hereof and the Company shall deliver the Warrant Shares to the
Holder pursuant to the terms of Section 2(d) of the Original Warrants, but
pursuant to DWAC or physical delivery instructions, as applicable, set forth on
the Holder’s signature page hereto. The date of the closing of the initial
exercise of the Original Warrants shall be referred to as the “Closing Date.”

 

Section 2.2 Issuance of New Warrants. Within two Trading Days of the Closing
Date, the Company shall deliver to the Holder the New Warrants to which the
Holder is entitled. The Holder shall be entitled to receive a number of New
Warrants equal to 200% of the number of shares of Common Stock as the Holder
exercises for cash pursuant to the exercise of the Original Warrants as set
forth in Section 2.1 above.

 

Section 2.3 Legends; Restricted Securities.

 

(a) The Holder understands that the New Warrants and the shares of Common Stock
underlying New Warrants are not, and may never be, registered under the
Securities Act of 1933, as amended (the “Securities Act”), or the securities
laws of any state and, accordingly, each certificate, if any, representing such
securities shall bear a legend substantially similar to the following:

 

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“NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.”

 

(b) Certificates evidencing shares of Common Stock underlying the New Warrants
shall not contain any legend (including the legend set forth in Section 2.3(a)
hereof), (i) while a registration statement covering the resale of such Common
Stock is effective under the Securities Act, (ii) following any sale of such
Common Stock pursuant to Rule 144, (iii) if such Common Stock is eligible for
sale under Rule 144 (assuming cashless exercise of the New Warrants), without
the requirement for the Company to be in compliance with the current public
information required under Rule 144 as to such Common Stock and without volume
or manner-of-sale restrictions, (iv) if such Common Stock may be sold under Rule
144 (assuming cashless exercise of the New Warrants) and the Company is then in
compliance with the current public information required under Rule 144 as to
such Common Stock, or (v) if such legend is not required under applicable
requirements of the Securities Act (including judicial interpretations and
pronouncements issued by the staff of the Securities and Exchange Commission
(the “Commission”)). The Company shall cause its counsel to issue a legal
opinion to the transfer agent promptly after the Delegend Date (as defined
below) if required by the Company and/or the transfer agent to effect the
removal of the legend hereunder, which opinion shall be in form and substance
reasonably acceptable to the Holder. If such Common Stock may be sold under Rule
144 (assuming cashless exercise of the New Warrants) without the requirement for
the Company to be in compliance with the current public information required
under Rule 144 or if such legend is not otherwise required under applicable
requirements of the Securities Act (including judicial interpretations and
pronouncements issued by the staff of the Commission) then such Common Stock
shall be issued free of all legends. The Company agrees that following the
Delegend Date or at such time as such legend is no longer required under this
Section 2.3(b), it will, no later than two (2) Trading Days following the
delivery by the Holder to the Company or the transfer agent of a certificate
representing the Common Stock underlying the New Warrants issued with a
restrictive legend (such second Trading Day, the “Legend Removal Date”), deliver
or cause to be delivered to the Holder a certificate representing such shares
that is free from all restrictive and other legends or, at the request of the
Holder shall credit the account of the Holder’s prime broker with the Depository
Trust Company System as directed by the Holder. The Company may not make any
notation on its records or give instructions to the transfer agent that enlarge
the restrictions on transfer set forth in this Section 2.3(b). “Delegend Date”
means the earliest of the date that (a) a registration statement with respect to
the Common Stock has been declared effective by the Commission or (b) all of the
Common Stock has been sold pursuant to Rule 144 or may be sold pursuant to Rule
144 without the requirement for the Company to be in compliance with the current
public information required under Rule 144 and without volume or manner-of-sale
restrictions or (c) following the six (6) month anniversary of (I) the Closing
Date if a New Warrant is exercised pursuant to a cashless exercise or (II) the
date of the related cash exercise of the New Warrants provided, in each case
that the applicable holder of the New Warrants or the Common Stock, as the case
may be, is not an Affiliate of the Company, the Company is in compliance with
the current public information required under Rule 144 (“Current Public
Information Requirement”) and all such Common Stock may be sold pursuant to Rule
144 or an exemption from registration under Section 4(a)(1) of the Securities
Act without volume or manner-of-sale restrictions; provided, further, however,
that if the Company fails to comply with the Current Public Information
Requirement at any time following the applicable six (6) month anniversary set
forth above and the one (1) year anniversary of the Closing Date, the Company
shall promptly provide notice to the Holder and the Holder undertakes not to
sell such Common Stock pursuant to Rule 144 until the Company notifies the
Holder that it has regained compliance with the Current Public Information
Requirement; and provided further, that if a delegending is in effect solely as
the result of the effectiveness of a registration statement covering the resale
of any Common Stock, the Holder undertakes not to sell any such Common Stock if
the Holder is notified or otherwise becomes aware that such registration
statement has been withdrawn or suspended, contains a material misstatement or
omission or has become stale. The Holder agrees with the Company that the Holder
will sell or transfer any New Warrants or shares of Common Stock underlying New
Warrants pursuant to either the registration requirements of the Securities Act,
including any applicable prospectus delivery requirements, or an exemption
therefrom, and that if such securities are sold pursuant to a registration
statement, they will be sold in compliance with the plan of distribution set
forth therein, and acknowledges that the removal of the restrictive legend from
certificates representing any such securities as set forth in this Section 2.3
or otherwise is predicated upon the Company’s reliance upon this understanding.

 

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Section 2.4 Filing of Form 8-K. Prior to 9:00 am ET on the Trading Day
immediately following the Closing Date, the Company shall issue a Current Report
on Form 8-K, reasonably acceptable to the Holder disclosing the material terms
of the transactions contemplated hereby, which shall include this form of
Agreement (the “8-K Filing”). From and after the issuance of the 8-K Filing, the
Company represents to the Holder that it shall not be in possession of any
material, nonpublic information received from the Company, any of its
subsidiaries or any of their respective officers, directors, employees or
agents, that is not disclosed in the 8-K Filing.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES

 

Section 3.1 Representations and Warranties of the Company. The Company hereby
makes the representations and warranties set forth below to the Holder that as
of the date of its execution of this Agreement:

 

(a) Authorization; Enforcement. The Company has the requisite corporate power
and authority to enter into and to consummate the transactions contemplated by
this Agreement and otherwise to carry out its obligations hereunder and
thereunder. The execution and delivery of this Agreement by the Company and the
consummation by it of the transactions contemplated hereby have been duly
authorized by all necessary action on the part of such Company and no further
action is required by such Company, its board of directors or its stockholders
in connection therewith other than in connection with (i) the filings required
pursuant to Section 2.4 of this Agreement and (ii) such filings as are required
to be made under applicable state securities laws (the “Required Approvals”).
This Agreement has been duly executed by the Company and, when delivered in
accordance with the terms hereof will constitute the valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms except (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable law.

 

(b) Organization. The Company is a duly organized and validly existing
corporation in good standing under the laws of the State of Nevada.

 

(c) No Conflicts. The execution, delivery and performance of this Agreement by
the Company and the consummation by the Company of the transactions contemplated
hereby do not and will not: (i) conflict with or violate any provision of the
Company’s certificate or articles of incorporation, bylaws or other
organizational or charter documents, or (ii) conflict with, or constitute a
default (or an event that with notice or lapse of time or both would become a
default) under, result in the creation of any lien upon any of the properties or
assets of the Company, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of,
any material agreement, credit facility, debt or other material instrument
(evidencing Company debt or otherwise) or other material understanding to which
the Company is a party or by which any property or asset of the Company is bound
or affected, or (iii) subject to the Required Approvals, conflict with or result
in a violation of any law, rule, regulation, order, judgment, injunction, decree
or other restriction of any court or governmental authority to which the Company
is subject (including federal and state securities laws and regulations), or by
which any property or asset of the Company is bound or affected, except in the
case of each of clauses (ii) and (iii), such as would not have or reasonably be
expected to result in (i) a material adverse effect on the legality, validity or
enforceability of this Agreement, (ii) a material adverse effect on the results
of operations, assets, business or condition (financial or otherwise) of the
Company and its subsidiaries, taken as a whole, or (iii) a material adverse
effect on the Company’s ability to perform in any material respect on a timely
basis its obligations under this Agreement (any of (i), (ii) or (iii), a
“Material Adverse Effect”).

 

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(d) Disclosure. Except with respect to the material terms and conditions of the
transactions contemplated by this Agreement, the Company confirms that neither
it nor any other Person acting on its behalf has provided any of Holder or their
agents or counsel with any information that it believes constitutes or might
constitute material, non-public information. The Company understands and
confirms that the Holder will rely on the foregoing representation in effecting
transactions in securities of the Company. As of the date of this Agreement, all
of the disclosure when furnished by or on behalf of the Company to the Holder
regarding the Company and its subsidiaries, their respective businesses and the
transactions contemplated hereby, including but not limited to the disclosure
set forth in the SEC Reports, is true and correct and does not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading. As used herein, “SEC Reports” means
all reports, schedules, forms, statements and other documents required to be
filed by the Company as of the date of this Agreement with the Commission
pursuant to the reporting requirements of the Securities Exchange Act of 1934,
as amended, including all exhibits included therein and financial statements,
notes and schedules thereto and documents incorporated by reference therein.

 

(e) Issuance of Securities. The issuance of the New Warrants are duly authorized
and, upon issuance in accordance with the terms of this Agreement, the New
Warrants shall be validly issued and free from all preemptive or similar rights
(except for those which have been validly waived prior to the date hereof),
taxes, liens and charges and other encumbrances with respect to the issue
thereof, other than restrictions on transfer under applicable state and federal
securities laws and liens or encumbrances created by or imposed by the Holder.
As of the Closing Date, a number of shares of Common Stock shall have been duly
authorized and reserved for issuance which equals or exceeds the maximum number
of Warrant Shares issuable upon exercise of the New Warrants (without taking
into account any limitations on the exercise of the New Warrants set forth
therein). Upon exercise of the New Warrants in accordance with the New Warrants,
the New Warrant Shares when issued will be validly issued, fully paid and
nonassessable and free from all preemptive or similar rights, taxes, liens,
charges and other encumbrances with respect to the issue thereof, other than
restrictions on transfer under applicable state and federal securities laws and
liens or encumbrances created by or imposed by the Holder, with the holders
being entitled to all rights accorded to a holder of Common Stock. Assuming the
accuracy of each of the representations and warranties set forth in Section 3.2
of this Agreement, the offer and issuance by the Company of the New Warrants is
exempt from registration under the Securities Act.

 

(f) No General Solicitation. Neither the Company, nor any of its subsidiaries or
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) in connection with the offer or sale of the New Warrants.

 

(g) No Integrated Offering. None of the Company, its subsidiaries or any of
their Affiliates, nor any Person acting on their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would require registration of the
issuance of any of the New Warrants or the New Warrant Shares (collectively, the
“New Securities”) under the Securities Act, whether through integration with
prior offerings or otherwise, or cause this offering of the New Securities to
require approval of stockholders of the Company for purposes of the Securities
Act or any applicable stockholder approval provisions, including, without
limitation, under the rules and regulations of any exchange or automated
quotation system on which any of the securities of the Company are listed or
designated for quotation. None of the Company, its subsidiaries, their
Affiliates nor any Person acting on their behalf will take any action or steps
that would require registration of the issuance of any of the New Securities
under the Securities Act or cause the offering of any of the New Securities to
be integrated with other offerings for purposes of any such applicable
stockholder approval provisions.

 

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(h) No Disqualification Events. With respect to Securities to be offered and
sold hereunder in reliance on Rule 506(b) under the Securities Act (“Regulation
D Securities”), none of the Company, any of its predecessors, any affiliated
issuer, any director, executive officer, other officer of the Company
participating in the offering hereunder, any beneficial owner of 20% or more of
the Company’s outstanding voting equity securities, calculated on the basis of
voting power, nor any promoter (as that term is defined in Rule 405 under the
Securities Act) connected with the Company in any capacity at the time of sale
(each, an “Issuer Covered Person” and, together, “Issuer Covered Persons”) is
subject to any of the “Bad Actor” disqualifications described in Rule
506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”),
except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The
Company has exercised reasonable care to determine whether any Issuer Covered
Person is subject to a Disqualification Event. The Company has complied, to the
extent applicable, with its disclosure obligations under Rule 506(e), and has
furnished to the Holder a copy of any disclosures provided thereunder.

 

Section 3.2 Representations and Warranties of the Holder. The Holder hereby
makes the representations and warranties set forth below to the Company that as
of the date of its execution of this Agreement.

 

(a) Organization; Due Authorization. The Holder is either an individual or an
entity duly incorporated or formed, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or formation with full right,
corporate, partnership, limited liability company or similar power and authority
to enter into and to consummate the transactions contemplated by this Agreement
and otherwise to carry out its obligations hereunder. The Holder represents and
warrants that (i) the execution and delivery of this Agreement by it and the
consummation by it of the transactions contemplated hereby have been duly
authorized by all necessary action on its behalf and (ii) this Agreement has
been duly executed and delivered by the Holder and constitutes the valid and
binding obligation of the Holder, enforceable against it in accordance with its
terms.

 

(b) Understandings or Arrangements. The Holder is acquiring the Securities as
principal for its own account and has no direct or indirect arrangement or
understandings with any other persons to distribute or regarding the
distribution of such Securities (this representation and warranty not limiting
the Holder’s right to sell the Securities pursuant to a registration statement
or otherwise in compliance with applicable federal and state securities laws).
The Holder is acquiring the Securities hereunder in the ordinary course of its
business.

 

(c) No Conflicts. The Holder represents and warrants that the execution,
delivery and performance of this Agreement by the Holder and the consummation by
the Holder of the transactions contemplated hereby do not and will not: (i)
conflict with or violate any provision of the Holder’s organizational or charter
documents, or (ii) conflict with or result in a violation of any agreement, law,
rule, regulation, order, judgment, injunction, decree or other restriction of
any court or governmental authority which would interfere with the ability of
the Holder to perform its obligations under this Agreement.

 

(d) Access to Information. The Holder acknowledges that it has had the
opportunity to review this Agreement and the SEC Reports and has been afforded
(i) the opportunity to ask such questions as it has deemed necessary of, and to
receive answers from, representatives of the Company concerning the terms and
conditions of the exercise of the Original Warrants and the merits and risks of
investing in the Warrant Shares, the terms and conditions of the offering of the
Securities and the merits and risks of investing in the Securities; (ii) access
to information about the Company and its financial condition, results of
operations, business, properties, management and prospects sufficient to enable
it to evaluate its investment; and (iii) the opportunity to obtain such
additional information that the Company possesses or can acquire without
unreasonable effort or expense that is necessary to make an informed investment
decision with respect to the investment.

 

(e) Holder Status. The Holder represents and warrants that at the time the
Holder was offered the Securities, it was, and as of the date hereof it is, and
on each date on which it exercises any New Warrants, it was or will be an
“accredited investor” as defined in Rule 501 under the Securities Act.

 

(f) Knowledge. The Holder, either alone or together with its representatives,
has such knowledge, sophistication and experience in business and financial
matters so as to be capable of evaluating the merits and risks of the
prospective investment in the Warrant Shares, and has so evaluated the merits
and risks of such investment. The Holder is able to bear the economic risk of an
investment in the Warrant Shares and, at the present time, is able to afford a
complete loss of such investment.

 

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ARTICLE IV

MISCELLANEOUS

 

Section 4.1 Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be made by email to the
email address of the Holder set forth on Holders’ signature page.

 

Section 4.2 Survival. All warranties and representations (as of the date such
warranties and representations were made) made herein or in any certificate or
other instrument delivered by it or on its behalf under this Agreement shall be
considered to have been relied upon by the parties hereto and shall survive the
issuance of the New Warrants. This Agreement shall inure to the benefit of and
be binding upon the successors and permitted assigns of each of the parties;
provided however that no party may assign this Agreement or the obligations and
rights of such party hereunder without the prior written consent of the other
parties hereto.

 

Section 4.3 Execution. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page
were an original thereof.

 

Section 4.4 Severability. If any provision of this Agreement is held to be
invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.

 

Section 4.5 Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be determined pursuant to
the Governing Law provision of the New Warrants.

 

Section 4.6 Entire Agreement. The Agreement, together with the exhibits and
schedules thereto, contain the entire understanding of the parties with respect
to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.

 

Section 4.7 Construction. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.

 

Section 4.8 Fees and Expenses. At the Closing, the Company has agreed to pay the
legal fees of Foley & Lardner LLP, counsel to one of the Holders, in an amount
equal to $7,500. Except as expressly set forth herein, each party shall pay the
fees and expenses of its advisers, counsel, accountants and other experts, if
any, and all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement. The Company
shall pay all transfer agent fees, stamp taxes and other taxes and duties levied
in connection with the delivery of any Warrant Shares.

 

(Remainder of page left blank; signature page to follow)

 

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IN WITNESS WHEREOF, the undersigned have executed this Warrant Exercise
Agreement as of the date first written above.

 

COMPANY:

 

 

ICONIC BRANDS, INC.

 

      By:

Name:

  Title:        

Bank Account and Wire Instructions

 

 

 

 

 

 

 

 

 

 

 

 

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[HOLDER SIGNATURE PAGES TO ICNB WARRANT EXERCISE AGREEMENT]

 

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly
executed by their respective authorized signatories as of the date first
indicated above.

 

Name of Holder: ______________________________________________________

 

Signature of Authorized Signatory of Holder: _______________________________

 

Name of Authorized Signatory: ___________________________________________

 

Title of Authorized Signatory: ____________________________________________

 

Email Address of Holder: ________________________________________________

 

Number of Original Warrants held: _________________________________________

 

Number of Original Warrants deemed Exercised: ________________________________

 

Aggregate Exercise Price of Warrants deemed Exercised:
__________________________

 

Warrant Shares underlying Warrants deemed Exercised: ___________________________

 

Instructions for Warrant Shares to be issued upon initial exercise of Original
Warrants: _________________

 

___________________________________________________________________________________

 

___________________________________________________________________________________

 

Number of New Warrants to be issued to Holder upon deemed Exercise:
____________________________

 

Address for Delivery of New Warrants for Holder:
_____________________________________________

 

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EXHIBIT A

(Form of New Warrants)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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