Exhibit 10.3
 
THE SECURITIES REPRESENTED HEREBY HAVE NOT 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, AND, ACCORDINGLY, MAY NOT BE TRANSFERRED UNLESS (I) SUCH SECURITIES
HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF 1933, AS
AMENDED, (II) SUCH SECURITIES MAY BE SOLD PURSUANT TO RULE 144, OR (III) THE
COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT
SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED.

PURSUANT TO THE TERMS OF SECTION 1 OF THIS WARRANT, ALL OR A PORTION OF THIS
WARRANT MAY HAVE BEEN EXERCISED, AND THEREFORE THE ACTUAL NUMBER OF WARRANT
SHARES REPRESENTED BY THIS WARRANT MAY BE LESS THAN THE AMOUNT SET FORTH ON THE
FACE HEREOF.

True Drinks Holdings, Inc.

Warrant To Purchase Common Stock

Warrant No: 20151009-01
Number of Shares of Common Stock (subject to adjustment): 17,500,000
Date of Issuance: October 9, 2015 (“Issuance Date”)

True Drinks Holdings, Inc., a Nevada corporation (the “Company”), hereby
certifies that, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, Vincent C. Smith, the registered holder hereof
or its permitted assigns (the “Holder”), is entitled, subject to the terms set
forth below, to purchase from the Company, upon the exercise of this Warrant to
Purchase Common Stock (including any Warrants to Purchase Common Stock issued in
exchange, transfer or replacement hereof, the “Warrant”) at the Exercise Price
(as defined below) then in effect, at any time or times on or after the Issuance
Date and until the Expiration Date (as defined below), Seventeen Million Five
Hundred Thousand (17,500,000) fully paid nonassessable shares of Common Stock
(as defined below) (as such amount may be adjusted in accordance with the terms
of this Warrant, the “Warrant Shares”).  Except as otherwise defined herein,
capitalized terms in this Warrant shall have the meanings set forth in Section
14.
 
This Warrant is being issued in connection with, and as partial consideration
for, that certain Personal Guaranty of Bottling Agreement (the “Guaranty”),
dated October 9, 2015, executed by Vincent C. Smith for the benefit of Niagara
Bottling, LLC, a California limited liability (“Niagara”).  The Guaranty was
entered into in connection with that certain Bottling Agreement, dated October
9, 2015, by and between the Company and Niagara.  The rights granted to the
Holder hereunder shall be deemed to be earned in full immediately upon the
execution of the Guaranty, and such rights shall not be impacted in any way by
the subsequent revocation or termination of the Guaranty (in accordance with its
terms).
 
The terms and conditions of the Warrant are as follows:
 
1.      EXERCISE OF WARRANT.
 
(a)      Mechanics of Exercise.  Subject to the terms and conditions hereof
(including, without limitation, the limitations set forth in Section 1(e)), this
Warrant may be exercised by the Holder at any time on or after the Issuance Date
until the Expiration Date, in whole or in part (but not as to fractional
shares), by (i) delivery of a written notice, in the form attached hereto as
Exhibit A (the “Exercise Notice”), of the Holder’s election to exercise this
Warrant and (ii) if the Holder is not electing a Cashless Exercise (as defined
below) pursuant to Section 1(d) of this Warrant, payment to the Company of an
amount equal to the Exercise Price multiplied by the number of Warrant Shares as
to which this Warrant is being exercised (such amount, the “Cash Exercise
Price”) in cash or wire transfer of immediately available funds (any such
exercise, a “Cash Exercise”) (the items referred to in clauses (i) and (ii)
above, as applicable, the “Exercise Delivery Documents”).  The Holder shall

 
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not be required to surrender this Warrant in order to effect a partial exercise
hereunder; provided, however, that in the event that this Warrant is exercised
in full or for the remaining unexercised portion hereof, the Holder shall
deliver this Warrant to the Company for cancellation within a reasonable time
after such exercise.  On or before the first Trading Day following the date on
which the Company has received the Exercise Delivery Documents, the Company
shall transmit by facsimile or e-mail transmission a confirmation of receipt of
the Exercise Delivery Documents to the Holder and the Company’s transfer agent
for the Common Stock (the “Transfer Agent”). On or before the second Trading Day
following the date on which the Company has received all of the Exercise
Delivery Documents (such date, the “Share Delivery Date”), the Company shall,
(X) provided that the Transfer Agent is participating in The Depository Trust
Company (“DTC”) Fast Automated Securities Transfer Program (the “FAST Program”)
and so long as the Warrant Shares are not required to bear a legend regarding
restriction on transferability, upon the request of the Holder, credit such
aggregate number of shares of Common Stock to which the Holder is entitled
pursuant to such exercise to the Holder’s (or its designee’s) balance account
with DTC through its Deposit Withdrawal Agent Commission system, or (Y) if the
Transfer Agent is not then participating in the FAST Program, or if the
certificates evidencing the Warrant Shares to be received are required to bear a
legend regarding restriction on transferability, issue and dispatch by overnight
courier to the address as specified in the Exercise Notice, a certificate,
registered in the Company’s share register in the name of the Holder (or its
designee), for the number of shares of Common Stock to which the Holder is
entitled pursuant to such exercise.  Upon delivery of the Exercise Delivery
Documents, the Holder shall be deemed for all corporate purposes to have become
the holder of record of the Warrant Shares with respect to which this Warrant
has been exercised, irrespective of the date such Warrant Shares are credited to
the Holder’s DTC account or the date of delivery of the certificates evidencing
such Warrant Shares, as the case may be.  If this Warrant is submitted in
connection with any exercise pursuant to this Section 1(a) and the number of
Warrant Shares represented by this Warrant is greater than the number of Warrant
Shares being acquired upon such exercise, then the Company shall as soon as
practicable, and in no event later than three Trading Days after any such
exercise, and at its own expense, issue a new Warrant (in accordance with
Section 6(d)) representing the right to purchase the number of Warrant Shares
purchasable under this Warrant immediately prior to such exercise, less the
number of Warrant Shares with respect to which this Warrant is then being
exercised.  The Company shall pay any and all taxes and other expenses of the
Company (including overnight delivery charges) that may be payable with respect
to the issuance and delivery of Warrant Shares upon exercise of this Warrant;
provided, however, that the Company shall not be required to pay any tax which
may be payable in respect of any transfer involved in the registration of any
certificates for Warrant Shares or Warrants in a name other than that of the
Holder or an affiliate thereof.  The Holder shall be responsible for all other
tax liability that may arise as a result of holding or transferring this Warrant
or receiving Warrant Shares upon exercise hereof.
 
(b)      Exercise Price.  For purposes of this Warrant, “Exercise Price” means
$0.188.  The Exercise Price is subject to adjustment as provided herein.
 
(c)      Cashless Exercise.  Notwithstanding anything contained herein to the
contrary, the Holder may, in its sole discretion, exercise this Warrant in whole
or in part and, in lieu of making the cash payment otherwise contemplated to be
made to the Company upon such exercise in payment of the Cash Exercise Price,
elect instead to receive upon such exercise the “Net Number” of shares of Common
Stock determined according to the following formula (a “Cashless Exercise”):
 
                                                    Net Number = (A x B) - (A x
C)
                                                                      
                  B

For purposes of the foregoing formula:
 
 
A=
the total number of shares with respect to which this Warrant is then being
exercised.

 
 
B=
the arithmetic average of the Closing Sale Prices of the Common Stock for the
five (5) consecutive Trading Days ending on the date immediately preceding the
date of the Exercise Notice.

 
 
C=
the Exercise Price then in effect for the applicable Warrant Shares at the time
of such exercise.

 
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(d)      Rule 144.  For purposes of Rule 144(d) promulgated under the Securities
Act, as in effect on the date hereof, assuming the Holder is not an “affiliate”
of the Company (within the meaning of such term under the Securities Act), it is
intended that the Warrant Shares issued in a Cashless Exercise shall be deemed
to have been acquired by the Holder, and the holding period for the Warrant
Shares shall be deemed to have commenced, on the Issuance Date.
 
(e)      Disputes.  In the case of a dispute as to the determination of the
Exercise Price or the arithmetic calculation of the Warrant Shares, the Company
shall promptly issue to the Holder the number of Warrant Shares that are not
disputed in accordance with Section 1(a).
 
2.      ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES.  The Exercise
Price and the number of Warrant Shares shall be adjusted from time to time as
follows:
 
(a)      Voluntary Adjustment By Company. The Company may at any time during the
term of this Warrant reduce (but not increase) the then current Exercise Price
to any amount and for any period of time deemed appropriate by the Board of
Directors of the Company.
 
(b)      Adjustment upon Subdivision or Combination of Common Stock.  If the
Company at any time on or after the Issuance Date subdivides (by any stock
split, stock dividend, recapitalization, reorganization, scheme, arrangement or
otherwise) its outstanding shares of Common Stock into a greater number of
shares, the Exercise Price in effect immediately prior to such subdivision will
be proportionately reduced and the number of Warrant Shares will be
proportionately increased.  If the Company at any time on or after the Issuance
Date combines (by any stock split, stock dividend, recapitalization,
reorganization, scheme, arrangement or otherwise) its outstanding shares of
Common Stock into a smaller number of shares, the Exercise Price in effect
immediately prior to such combination will be proportionately increased and the
number of Warrant Shares will be proportionately decreased.  Any adjustment
under this Section 2(b) shall become effective at the close of business on the
date the subdivision or combination becomes effective.
 
(c)      Adjustment Upon Issuance of Shares of Common Stock. If the Company at
any time on or after the Issuance Date issues or sells, or in accordance with
this Section 2(c) is deemed to have issued or sold, any shares of Common Stock
(including the issuance or sale of shares of Common Stock owned or held by or
for the account of the Company) for consideration per share (the amount of such
consideration, the “New Issuance Price”) less than a price equal to the Exercise
Price in effect immediately prior to such issuance or sale or deemed issuance or
sale (such price, the “Applicable Price”) (the foregoing a “Dilutive Issuance”),
then immediately after such Dilutive Issuance, the Exercise Price then in effect
shall be automatically reduced to an amount equal to the New Issuance Price;
provided, however, that no adjustment pursuant to this Section 2(c) shall be
made if such adjustment would increase the Exercise Price or decrease the number
of Warrant Shares then in effect.  Without limiting the foregoing, the following
shall be applicable to adjustments made pursuant to this Section 2(c):
 
(1)         Issuance of Options. If the Company in any manner grants or sells
any Options, and the lowest price per share for which one share of Common Stock
is issuable upon the exercise of any such Option, or upon conversion, exercise
or exchange of any Convertible Securities issuable upon exercise of any such
Option, is less than the Applicable Price, then such share of Common Stock shall
be deemed to be outstanding and to have been issued and sold by the Company at
the time of the granting or sale of such Option for such price per share. For
purposes of this Section 2(c)(1), the “lowest price per share for which one
share of Common Stock is issuable upon the exercise of any such Option, or upon
conversion, exercise or exchange of any Convertible Securities issuable upon
exercise of any such Option” shall be equal to the lower of (x) the sum of the
lowest amounts of consideration (if any) received or receivable by the Company
with respect to any one share of Common Stock upon (1) the granting or sale of
such Option, (2) exercise of such Option, and (3) conversion, exercise or
exchange of any Convertible Security issuable upon exercise of such Option and
(y) the lowest exercise price set forth in such Option for which one share of
Common Stock is issuable upon the exercise of any such Option, or upon

 
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conversion, exercise or exchange of any Convertible Securities issuable upon
exercise of any such Option. Except as contemplated below, once an adjustment is
made to the Exercise Price in accordance with this Section  2(c)(1) with respect
to a particular issuance of Options or Convertible Securities,  no further
adjustment of the Exercise Price shall be made upon the actual issuance of such
shares of Common Stock or of such Convertible Securities upon the exercise of
such Options, or upon the actual issuance of such shares of Common Stock upon
conversion, exercise or exchange of such Convertible Securities issued upon
exercise of such Options.
 
(2)         Issuance of Convertible Securities. If the Company in any manner
issues or sells any Convertible Securities and the lowest price per share for
which one share of Common Stock is issuable upon the conversion, exercise or
exchange of such Convertible Securities is less than the Applicable Price, then
such share of Common Stock shall be deemed to be outstanding and to have been
issued and sold by the Company at the time of the issuance or sale of such
Convertible Securities for such price per share. For the purposes of this
Section 2(c)(2), the “lowest price per share for which one share of Common Stock
is issuable upon the conversion, exercise or exchange of such Convertible
Securities” shall be equal to the lower of (x) the sum of the lowest amounts of
consideration (if any) received or receivable by the Company with respect to one
share of Common Stock upon (1) the issuance or sale of the Convertible Security
and (2) conversion, exercise or exchange of such Convertible Security, and (y)
the lowest conversion price set forth in such Convertible Security for which one
share of Common Stock is issuable upon conversion, exercise or exchange
thereof.  Except as contemplated below, once an adjustment is made to the
Exercise Price in accordance with this Section  2(c)(2) with respect to a
particular issuance of Convertible Securities,  no further adjustment of the
Exercise Price shall be made upon the actual issuance of such shares of Common
Stock upon the conversion, exercise or exchange of such Convertible Securities.
 
(3)         Change in Option Price or Rate of Conversion. If (1) the purchase or
exercise price provided for in any Options, (2) the additional consideration, if
any, payable upon the issuance, conversion, exercise or exchange of any
Convertible Securities, or (3)the rate at which any Convertible Securities are
convertible into or exercisable or exchangeable for shares of Common Stock,
increases or decreases at any time, the Exercise Price in effect at the time of
such increase or decrease shall be adjusted to reflect the Exercise Price that
would have been in effect had such Options or Convertible Securities provided
for such increased or decreased purchase or exercise price, additional
consideration, or conversion rate, as the case may be, at the time initially
granted, issued or sold. For purposes of this Section 2(c)(3), if the terms of
any Options or Convertible Securities that were outstanding as of the date of
issuance of this Warrant are adjusted in the manner described in the immediately
preceding sentence, then such Options or Convertible Securities, and the shares
of Common Stock deemed issuable upon the exercise, conversion or exchange of
such Options or Convertible Securities, shall be deemed to have been issued as
of the date of such adjustment.
 
(4)         Calculation of Consideration Received. If (i) any Options or
Convertible Securities are issued in connection with the issuance or sale or
deemed issuance or sale of any other securities of the Company, together
comprising one integrated transaction, and (ii) all such Options or Convertible
Securities (as applicable) so issued or sold are, or may become, exercisable
and/or convertible for an aggregate number of shares of Common Stock that
exceeds (as applicable) either (1) if Common Stock was the primary security
issued or sold in such transaction, the aggregate number of shares of Common
Stock so issued or sold in such transaction or (2) if Options or Convertible
Securities were the primary securities issued or sold in such transaction, the
aggregate number of shares of Common Stock so deemed issued or sold in such
transaction that underlie all Options or Convertible Securities that constituted
the primary securities in such transaction, then (x) such Options or Convertible
Securities (as applicable) will be deemed to have been issued for consideration
equal to the fair market value thereof and (y) the other securities issued or
sold or deemed to have been issued or sold in such integrated transaction shall
be deemed to have been issued for consideration equal to the difference of (I)
the aggregate

 
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consideration received by the Company minus (II) the aggregate fair market value
of such Options or Convertible Securities (as applicable).  If any shares of
Common Stock, Options or Convertible Securities are issued or sold or deemed to
have been issued or sold for cash, the consideration received therefor will be
deemed to be the net amount of consideration received by the Company therefor.
If any shares of Common Stock, Options or Convertible Securities are issued or
sold for a consideration other than cash, the amount of such consideration
received by the Company will be the fair market value of such consideration,
except where such consideration consists of publicly traded securities, in which
case the amount of consideration received by the Company for such securities
will be the arithmetic average of the volume-weighted average closing price of
such security for the five (5) Trading Days immediately preceding the date of
receipt. If any shares of Common Stock, Options or Convertible Securities are
issued to the owners of the non-surviving entity in connection with any merger
in which the Company is the surviving entity, the amount of consideration
therefor will be deemed to be the fair market value of such portion of the net
assets and business of the non-surviving entity as is attributable to such
shares of Common Stock, Options or Convertible Securities, as the case may be.
The fair market value of any consideration other than cash or publicly traded
securities will be determined jointly by the Company and the Holder. If such
parties are unable to reach agreement within ten (10) days after the occurrence
of an event requiring valuation, the fair market value of such consideration
shall be determined in accordance with Section 12.
 
(5)         Record Date. If the Company takes a record of the holders of shares
of Common Stock for the purpose of entitling them (A) to receive a dividend or
other distribution payable in shares of Common Stock, Options or in Convertible
Securities or (B) to subscribe for or purchase shares of Common Stock, Options
or Convertible Securities, then such record date will be deemed to be the date
of the issuance or sale of the shares of Common Stock deemed to have been issued
or sold upon the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of subscription or
purchase (as the case may be).
 
(d)      Other Events.  If any event occurs of the type contemplated by the
provisions of this Section 2, but not expressly provided for by such provisions
(including, without limitation, the granting of stock appreciation rights or
phantom stock rights), then the Company’s Board of Directors will make an
appropriate adjustment in the Exercise Price and the number of Warrant Shares so
as to protect the rights of the Holder; provided that no such adjustment
pursuant to this Section 2(d) will increase the Exercise Price or decrease the
number of Warrant Shares as otherwise determined pursuant to this Section 2.
 
3.      FUNDAMENTAL TRANSACTIONS.
 
(a)      Fundamental Transactions.  The Company shall not enter into or be party
to a Fundamental Transaction unless (i) the Successor Entity assumes (unless the
Company is the Successor Entity) all of the obligations of the Company under
this Warrant in accordance with the provisions of this Section 3(a), pursuant to
a written agreement to deliver to the Holder, in exchange for such Warrants,
warrants of the Successor Entity evidenced by a written instrument reasonably
satisfactory in form and substance to the Holder, and substantially similar in
form and substance to this Warrant, providing, among other things, that the
securities of the Successor Entity shall be exercisable for a number of shares
of capital stock of the Successor Entity that is substantially equivalent to the
number of shares of Common Stock acquirable by the Holder upon exercise of this
Warrant prior to such Fundamental Transaction, and providing for an exercise
price for the securities of the Successor Entity that is substantially
equivalent to the Exercise Price in effect prior to such Fundamental Transaction
(in each case, after taking into account the relative value of the shares of
Common Stock as determined by reference to such Fundamental Transaction and the
value of the shares of the capital stock of the Successor Entity, with the
intent of the parties being to protect the aggregate economic value of this
Warrant immediately prior to the consummation of such Fundamental Transaction),
and (ii) the Successor Entity (including its Parent Entity, as applicable) is a
publicly traded corporation whose common stock is quoted on or listed for
trading on an Eligible Market. Upon the occurrence of any Fundamental
Transaction, the Successor Entity shall succeed to, and be

 
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substituted for the Company (so that from and after the date of such Fundamental
Transaction, the provisions of this Warrant referring to the “Company” shall
refer to the Successor Entity), and may exercise every right and power of the
Company, and shall assume all of the obligations of the Company under this
Warrant with the same effect as if such Successor Entity had been named as the
Company herein.
 
(b)      Applicability to Successive Transactions.   The provisions of this
Section shall apply similarly and equally to successive Fundamental Transactions
and shall be applied (without regard to any limitations on the exercise of this
Warrant).
 
4.      NONCIRCUMVENTION.  The Company hereby covenants and agrees that the
Company will not, by amendment of its Articles of Incorporation, Bylaws or
through any reorganization, transfer of assets, consolidation, merger, scheme of
arrangement, dissolution, issuance or sale of securities, or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
of this Warrant, and will at all times in good faith comply with all the
provisions of this Warrant and take all actions consistent with effectuating the
purposes of this Warrant.  Without limiting the generality of the foregoing, the
Company (i) shall not increase the par value of any shares of Common Stock
receivable upon the exercise of this Warrant above the Exercise Price then in
effect, (ii) shall take all such actions as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the exercise of this Warrant, and
(iii) shall, so long as this Warrant is outstanding, take all action necessary
to reserve and keep available out of its authorized and unissued shares of
Common Stock, solely for the purpose of effecting the exercise of this Warrant,
100% of the number of shares of Common Stock issuable upon exercise of this
Warrant then outstanding (without regard to any limitations on the exercise of
this Warrant).
 
5.      WARRANT HOLDER NOT DEEMED A STOCKHOLDER.  Except as otherwise
specifically provided herein, the Holder, solely in such Person’s capacity as a
holder of this Warrant, shall not be deemed the holder of any of the Warrant
Shares for any purpose, nor shall anything contained in this Warrant be
construed to confer upon the Holder, solely in such Person’s capacity as the
Holder of this Warrant, any of the rights of a stockholder of the Company or any
right to vote, give or withhold consent to any corporate action (whether any
reorganization, issue of stock, reclassification of stock, consolidation,
merger, conveyance or otherwise), receive notices of meetings, receive dividends
or subscription rights, or otherwise, prior to the issuance to the Holder of the
Warrant Shares which such Person is then entitled to receive upon the due
exercise of this Warrant.  In addition, nothing contained in this Warrant shall
be construed as imposing any liabilities on the Holder to purchase any
securities (upon exercise of this Warrant or otherwise) or as a stockholder of
the Company, whether such liabilities are asserted by the Company or by
creditors of the Company.
 
6.      REISSUANCE OF WARRANTS.
 
(a)      Transfer of Warrant.  If this Warrant is to be transferred, the Holder
shall surrender this Warrant to the Company and deliver the completed and
executed Assignment Form, in the form attached hereto as Exhibit B, whereupon
the Company will forthwith issue and deliver upon the order of the Holder a new
Warrant (in accordance with Section 6(d)), registered in such name as the Holder
may request on the Assignment Form, representing the right to purchase the
number of Warrant Shares being transferred by the Holder and, if less than the
total number of Warrant Shares then underlying this Warrant are being
transferred, a new Warrant (in accordance with Section 6(d)) to the Holder
representing the right to purchase the number of Warrant Shares not being
transferred.
 
(b)      Lost, Stolen or Mutilated Warrant.  Upon receipt by the Company of
evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of this Warrant, and, in the case of loss, theft or destruction,
of any indemnification undertaking by the Holder to the Company in customary
form and, in the case of mutilation, upon surrender and cancellation of this
Warrant, the Company shall execute and deliver to the Holder a new Warrant (in
accordance with Section 6(d)) representing the right to purchase the Warrant
Shares then underlying this Warrant.
 

 
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(c)      Exchangeable for Multiple Warrants.  This Warrant is exchangeable, upon
the surrender hereof by the Holder to the Company, for a new Warrants (in
accordance with Section 6(d)) representing in the aggregate the right to
purchase the number of Warrant Shares then underlying this Warrant, and each
such new Warrant will represent the right to purchase such portion of such
Warrant Shares as is designated by the Holder at the time of such surrender and
set forth in such new Warrant; provided, however, that no Warrants for
fractional shares of Common Stock shall be issued.
 
(d)      Issuance of New Warrants.  Whenever the Company is required to issue a
new Warrant pursuant to the terms of this Warrant, such new Warrant (i) shall be
of like tenor with this Warrant, (ii) shall represent, as indicated on the face
of such new Warrant, the right to purchase the Warrant Shares then underlying
this Warrant (or, in the case of new Warrants being issued pursuant to Section
6(c), the Warrant Shares which, when added to the number of shares of Common
Stock underlying the other new Warrants issued in connection with such issuance,
does not exceed the number of Warrant Shares then underlying this Warrant),
(iii) shall have an issuance date, as indicated on the face of such new Warrant,
which shall be the same as the Issuance Date, and (iv) shall have the same
rights and conditions as this Warrant.
 
7.      REGISTRATION RIGHTS.  The Company agrees that if, at any time within
thirty (30) calendar days following the Issuance Date, it enters into any
agreement or arrangement pursuant to which it sells and issues any additional
shares of its capital stock in a financing transaction (any such transaction, a
“New Financing”), including any transaction in which it sells and issues any
additional shares of Series C Convertible Preferred Stock, and pursuant to which
the Company agrees, through the execution of a registration rights agreement (or
similar agreement) to register the shares of capital stock issued in the New
Financing (or the shares of capital stock underlying the Options or Convertible
Securities issued in the New Financing) under the Securities Act, the Company
will include the Warrant Shares as “registrable securities” within such
registration rights agreement.  The treatment of the Warrant Shares pursuant to
such registration rights agreement shall be substantially similar to the
treatment of the “registrable securities” pursuant to that certain Registration
Rights Agreement, dated August 13, 2015, entered into between the Company and
the Purchasers named therein (the “Registration Rights Agreement”).  To the
extent the Company does not enter into a New Financing transaction within the
referenced time period, the Company agrees to enter into a registration rights
agreement covering the registration of the Warrant Shares on substantially
similar terms as set forth in the Registration Rights Agreement within sixty
(60) days following the Issuance Date.
 
8.      NOTICES.
 
(a)      Whenever the Exercise Price or the number of Warrant Shares issuable
upon exercise of this Warrant is adjusted pursuant to the terms hereof, the
Company shall promptly mail to the Holder a notice setting forth the adjusted
number of Warrant Shares and/or the adjusted Exercise Price and a brief
statement of the facts requiring such adjustment(s).
 
(b)      If, during the period of time between the Issuance Date and the
Expiration Date, (i) the Company shall declare a dividend (or any other
distribution in whatever form) on the Common Stock, (ii) the Company shall
declare a special nonrecurring cash dividend on or a redemption of the Common
Stock, (iii) the Company shall authorize the granting to all holders of the
Common Stock rights or warrants to subscribe for or purchase any shares of
capital stock of any class or of any rights, (iv) the approval of any
stockholders of the Company shall be required in connection with any
consolidation or merger to which the Company is a party, any sale or transfer of
all or substantially all of the assets of the Company, or any compulsory share
exchange whereby the Common Stock is converted into other securities, cash or
property, or (v) the Company shall authorize the voluntary or involuntary
dissolution, liquidation or winding up of the affairs of the Company, then, in
each case, the Company shall cause to be mailed to the Holder, at least ten (10)
days prior to the applicable record or effective date hereinafter specified, a
notice stating (x) the date on which a record is to be taken for the purpose of
such dividend, distribution, redemption, rights or warrants, or if a record is
not to be taken, the date as of which the holders of the Common Stock of record
to be entitled to such dividend, distributions, redemption, rights or warrants
are to be determined or (y) the date on which such consolidation, merger, sale,
transfer or share exchange is expected to become effective or close, and the
date as of which it is expected that holders of the Common Stock of record shall
 
 
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be entitled to exchange their shares of the Common Stock for securities, cash or
other property deliverable upon such reclassification, consolidation, merger,
sale, transfer or share exchange; provided that the failure to mail such notice
or any defect therein or in the mailing thereof shall not affect the validity of
the corporate action required to be specified in such notice.  To the extent
that any notice provided hereunder constitutes, or contains, material,
non-public information regarding the Company or any of the subsidiaries of the
Company, the Company shall simultaneously file such notice with the SEC pursuant
to a Current Report on Form 8-K.  The Holder shall remain entitled to exercise
this Warrant during the period commencing on the date of such notice to the
effective date of the event triggering such notice except as may otherwise be
expressly set forth herein.
 
9.      AMENDMENT AND WAIVER.  Except as otherwise provided herein, the
provisions of this Warrant may be amended and the Company may take any action
herein prohibited, or omit to perform any act herein required to be performed by
it, only if the Company has obtained the written consent of the Required
Holders; provided, that, except as contemplated by Section 2, the number of
Warrant Shares subject to this Warrant, the Exercise Price and the Expiration
Date may not be amended, and the right to exercise this Warrant may not be
altered or waived, without the written consent of the Holder.  Any such
amendment shall apply to all Warrants and be binding upon all registered holders
of such Warrants.
 
10.      GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.  This
Warrant shall be governed by, and construed in accordance with, the internal
laws of the State of California, without reference to the choice of law
provisions thereof.  The Company and, by accepting this Warrant, the Holder,
each irrevocably submits to the exclusive jurisdiction of the courts of the
State of California located in Orange County and the United States District
Court for the Central District of California for the purpose of any suit,
action, proceeding or judgment relating to or arising out of this Warrant and
the transactions contemplated hereby.  Service of process in connection with any
such suit, action or proceeding may be served on each party hereto anywhere in
the world by the same methods as are specified for the giving of notices under
this Warrant.  The Company and, by accepting this Warrant, the Holder, each
irrevocably consents to the jurisdiction of any such court in any such suit,
action or proceeding and to the laying of venue in such court.  The Company and,
by accepting this Warrant, the Holder, each irrevocably waives any objection to
the laying of venue of any such suit, action or proceeding brought in such
courts and irrevocably waives any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum.  EACH OF
THE COMPANY AND, BY ITS ACCEPTANCE HEREOF, THE HOLDER HEREBY WAIVES ANY RIGHT TO
REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS WARRANT AND
REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.
 
11.         CONSTRUCTION; HEADINGS.  This Warrant shall be deemed to be jointly
drafted by the Company and the Holder and shall not be construed against any
person as the drafter hereof.  The headings of this Warrant are for convenience
of reference and shall not form part of, or affect the interpretation of, this
Warrant.
 
12.              DISPUTE RESOLUTION.  In the case of a dispute as to the
determination of the Exercise Price or the arithmetic calculation of the Warrant
Shares, the Company shall submit the disputed determinations or arithmetic
calculations via facsimile or e-mail transmission within two (2) Business Days
of receipt of the Exercise Notice giving rise to such dispute, as the case may
be, to the Holder.  If the Holder and the Company are unable to agree upon such
determination or calculation of the Exercise Price or the Warrant Shares within
three (3) Business Days of such disputed determination or arithmetic calculation
being submitted to the Holder, then the Company shall, within two (2) Business
Days submit via facsimile or e-mail transmission the disputed determination of
the Exercise Price to an independent, reputable investment bank selected by the
Company and approved by the Holder, which approval shall not be unreasonably
withheld.  The Company shall cause the investment bank or the accountant, as the
case may be, to perform the determinations or calculations and notify the
Company and the Holder of the results no later than ten (10) Business Days from
the date it receives the disputed determinations or calculations.  The
prevailing party in any dispute resolved pursuant to this Section 11 shall be
entitled to be paid for its reasonable expenses incurred in resolving such
dispute, including all costs and fees paid or incurred in good faith, in
relation to the resolution of such dispute.  Such investment bank’s or
accountant’s determination or calculation, as the case may be, shall be binding
upon all parties absent demonstrable error.

 
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13.           REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF.  The
remedies provided in this Warrant shall be cumulative and in addition to all
other remedies available under this Warrant, at law or in equity (including a
decree of specific performance and/or other injunctive relief), and nothing
herein shall limit the right of the Holder to pursue actual damages for any
failure by the Company to comply with the terms of this Warrant.
 
14.        TRANSFER.  Subject to compliance with applicable securities laws, and
to the requirements of Section 6, this Warrant and all rights hereunder are
transferable, in whole or in part, upon surrender of the Warrant to the Company,
together with a written assignment of this Warrant substantially in the form of
the Assignment Form attached hereto.
 
15.         CERTAIN DEFINITIONS.  For purposes of this Warrant, the following
terms shall have the following meanings:
 
(a)      “Bloomberg” means Bloomberg Financial Markets.
 
(b)      “Business Day” means any day other than Saturday, Sunday or other day
on which commercial banks in the City of New York are authorized or required by
law to remain closed.
 
(c)      “Closing Bid Price” and “Closing Sale Price” means, for any security as
of any date, the last closing bid price or last trade price, respectively, of
such security on the principal securities exchange or trading market where such
security is listed or traded as reported by Bloomberg, or if the foregoing do
not apply, the last closing bid price or last trade price, respectively, of such
security in the over-the-counter market on the electronic bulletin board for
such security as reported by Bloomberg, or, if no closing bid price or last
trade price, respectively, is reported for such security by Bloomberg, the
average of the bid prices, or the ask prices, respectively, of any market makers
for such security as reported on the OTCQB Marketplace.  If the Closing Bid
Price or the Closing Sale Price cannot be calculated for a security on a
particular date on any of the foregoing bases, the Closing Bid Price or the
Closing Sale Price, as the case may be, of such security on such date shall be
the fair market value as mutually determined by the Company and the Holder.  All
such determinations to be appropriately adjusted for any stock dividend, stock
split, stock combination or other similar transaction during the applicable
calculation period.
 
(d)      “Common Stock” means (i) the Company’s shares of Common Stock, par
value $0.001 per share, and (ii) any share capital into which such Common Stock
shall have been changed or any share capital resulting from a reclassification
of such Common Stock.
 
(e)       “Convertible Securities” means any stock or securities (other than
Options) directly or indirectly convertible into or exercisable or exchangeable
for shares of Common Stock.
 
(f)      “Eligible Market” means the New York Stock Exchange, Inc., the NYSE
MKT, the NASDAQ Global Market, the NASDAQ Global Select Market, or the NASDAQ
Capital Market.
 
(g)       “Exchange Act” means the Securities Exchange Act of 1934, as amended.
 
(h)      “Expiration Date” means 11:59 p.m. Pacific Standard Time on the fifth
anniversary of the Issuance Date or, if such date falls on a day that is not a
Trading Day, then at 11:59 p.m. Pacific Standard Time on the next Trading Day.
 

 
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(i)      “Fundamental Transaction” means that the Company shall, directly or
indirectly, in one or more related transactions, (i) consolidate or merge with
or into (whether or not the Company is the surviving corporation) another Person
(but excluding a migratory merger effected solely for the purpose of changing
the jurisdiction of incorporation of the Company), or (ii) sell, lease, license,
assign, transfer, convey or otherwise dispose of all or substantially all of the
properties or assets of the Company to another Person, or (iii) allow another
Person to make a purchase, tender or exchange offer that is accepted by the
holders of more than the 50% of the outstanding shares of Common Stock (not
including any shares of Common Stock held by the Person or Persons making or
party to, or associated or affiliated with the Persons making or party to, such
purchase, tender or exchange offer), or (iv) consummate a stock purchase
agreement or other business combination (including, without limitation, a
reorganization, recapitalization, spin-off or scheme of arrangement) with
another Person whereby such other Person acquires more than the 50% of the
outstanding shares of Common Stock (not including any shares of Common Stock
held by the other Person or other Persons making or party to, or associated or
affiliated with the other Persons making or party to, such stock purchase
agreement or other business combination), (v) reorganize, recapitalize or
reclassify its Common Stock, or (vi) any “person” or “group” (as these terms are
used for purposes of Sections 13(d) and 14(d) of the Exchange Act) is or shall
become the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of 50% of the aggregate ordinary voting power
represented by issued and outstanding Common Stock.
 
(j)       “Options” means any rights, warrants or options to subscribe for or
purchase shares of Common Stock or Convertible Securities.
 
(k)       “Parent Entity” of a Person means an entity that, directly or
indirectly, controls the applicable Person and whose common stock or equivalent
equity security is quoted or listed for trading on an Eligible Market, or, if
there is more than one such Person or Parent Entity, the Person or Parent Entity
with the largest public market capitalization as of the date of consummation of
the Fundamental Transaction.
 
(l)      “Person” means an individual, a limited liability company, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization, any other entity and a government or any department or agency
thereof.
 
(m)            “Principal Market” means the OTCQB Marketplace.
 
(n)      "Required Holders" means the Holders of a majority of the Warrant
Shares evidenced by this Warrant as of the date of determination.
 
(o)      “Securities Act” means the Securities Act of 1933, as amended.
 
(p)      “Successor Entity” means the Person (or, if so elected by the Holder,
the Parent Entity) formed by, resulting from or surviving any Fundamental
Transaction or the Person (or, if so elected by the Holder, the Parent Entity)
with which such Fundamental Transaction shall have been entered into.
 
(q)      “Trading Day” means any day on which the Common Stock is traded on the
Principal Market, or, if the Principal Market is not the principal trading
market for the Common Stock, then on the principal securities exchange or
securities market on which the Common Stock is then traded; provided that
“Trading Day” shall not include any day on which the Common Stock is scheduled
to trade on such exchange or market for less than 4.5 hours or any day that the
Common Stock is suspended from trading during the final hour of trading on such
exchange or market (or if such exchange or market does not designate in advance
the closing time of trading on such exchange or market, then during the hour
ending at 4:00 p.m., New York time).
 
 [Signature Page Follows]

 
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IN WITNESS WHEREOF, the Company has caused this Warrant to Purchase Common Stock
to be duly executed as of the Issuance Date set forth above.

 
TRUE DRINKS HOLDINGS, INC.
 
By: /s/ Lance Leonard
Name: Lance Leonard
Title: Chief Executive Officer

 
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 EXHIBIT A

EXERCISE NOTICE
TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
WARRANT TO PURCHASE COMMON STOCK

True Drinks Holdings, Inc.

The undersigned holder hereby exercises the right to purchase _________________
shares of Common Stock (“Warrant Shares”) of True Drinks Holdings, Inc., a
Nevada corporation (the “Company”), [evidenced by the attached Warrant to
Purchase Common Stock (the “Warrant”) (only include this provision if Warrant is
being exercised in full)].  Capitalized terms used herein and not otherwise
defined shall have the respective meanings set forth in the Warrant.

    1.           Form of Exercise Price.  The Holder intends that payment of the
Exercise Price shall be made as a:

                  “Cash Exercise” with respect to _______________ Warrant
Shares; and/or

                  “Cashless Exercise” with respect to _______________ Warrant
Shares.

    2.           Payment of Exercise Price.  In the event that the holder has
elected a “Cash Exercise” with respect to some or all of the Warrant Shares to
be issued pursuant hereto, the holder shall pay the Cash Exercise Price in the
sum of $___________________ to the Company in accordance with the terms of the
Warrant.

    3.           Delivery of Warrant Shares.  The Company shall deliver to the
holder __________ Warrant Shares in accordance with the terms of the Warrant
and, after delivery of such Warrant Shares, _____________ Warrant Shares remain
subject to the Warrant.

Date: _______________ __, ______

   Name of Registered Holder

By:   _____________________________
         Name:
         Title:

 
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 EXHIBIT B

ASSIGNMENT FORM
 
True Drinks Holdings, Inc.

(To assign the foregoing Warrant, execute this form and supply required
information.  Do not use this form to purchase shares.)
 
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are
hereby assigned to:
 
Name:
          
(Please Print)
Address:                                                                
 
   
(Please Print)
Dated: _______________ __, ______
 
Holder’s
Signature:                                                                
 
Holder’s Address:                                                               
 
 

 
NOTE:  The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatever.  Officers of corporations and those acting in a fiduciary or
other representative capacity should file proper evidence of authority to assign
the foregoing Warrant.
 

B-1

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