Exhibit 10.3

 

EXCHANGE AGREEMENT

 

THIS EXCHANGE AGREEMENT (this “Agreement”) is entered into and effective as of
March 9, 2020 (the “Effective Date,” subject to Section 5(i) below) by and
between UAS Drone Corp., a Nevada corporation (the “Company”), and GREENBLOCK
CAPITAL, LLC, a Florida limited liability company (hereinafter, “GBC”). Each of
the Company and GBC may be referred to individually as a “Party” and
collectively as the “Parties.”

 

RECITALS:

 

WHEREAS, the Company was organized on February 4, 2015, with the intention of
engaging in the business of developing and manufacturing commercial unmanned
aerial systems, or drones, for the law enforcement and first responder markets;
and

 

WHEREAS, the Company’s extremely limited business operations were unsuccessful
and, beginning with its Annual Report on Form 10-K for the fiscal year ended
December 31, 2017, its periodic reports as filed with the Securities and
Exchange Commission (the “SEC”) have indicated that the Company is a “shell
company” as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), and subparagraph (i) of SEC Rule 144, which
substantially limits the resale of shares of its $0.0001 par value common stock
(the “Company Common Stock”) until it is no longer a shell company and twelve
(12) months from the filing of “Form 10 Information” with the SEC reflecting the
change of such designation; and

 

WHEREAS, GBC is currently the beneficial owner of 437,500 outstanding shares of
Company Common Stock (the “GBC Outstanding Shares”); and

 

WHEREAS, there is an extremely limited market for the Company Common Stock, with
an average of zero shares traded per day over the preceding thirty (30) days,
according to the OTC Markets, Inc. (the “OTC Markets”) website
(www.otcmarkets.com/stock/USDR/quote); and

 

WHEREAS, for the foregoing reasons, the Company has determined that the present
value of the Company Common Stock is $0.0001 per share; and

 

WHEREAS, during the period from February 4, 2016, through the date hereof, GBC
has advanced to the Company a total of $208,308 to assist the Company with the
payment of its outstanding costs and expenses (the “GBC Advances”); and

 

WHEREAS, on March 4, 2020, the Company entered into a Share Exchange Agreement
with Duke Robotics, Inc., a Delaware corporation (“Duke”), and the several
stockholders of Duke identified on Annex A thereto (the “Duke Share Exchange
Agreement”); and

 

 

 

 

WHEREAS, all capitalized terms not defined herein shall have the meanings
ascribed to them in the Duke Share Exchange Agreement; and

 

WHEREAS, the closing of the Duke Share Exchange Agreement is subject to various
conditions precedent including, but not limited to, the conversion and exchange
of certain outstanding debt, which debt includes the GBC Advances, in
consideration of the issuance of additional shares of the Company Common Stock
and convertible debentures to the holders of such debt in an amount not to
exceed $400,000 in the aggregate (the “UAS Convertible Debt”) as provided in the
Share Exchange Agreement, and the closing of the “Duke Funding” as defined in
Annex B of the Duke Share Exchange Agreement (respectively, the “Closings”); and

 

WHEREAS, GBC, subject to the Closings, is willing to waive all outstanding
interest that has accrued on the GBC Advances through the Effective Date of the
transactions contemplated hereby and to exchange all of the $208,308 in GBC
Advances for a total of 65,198 shares of the Company Common Stock comprised of
“restricted securities” as defined in SEC Rule 144, together with a convertible
debenture (the “New Debenture”) in the principal amount of $99,054 to be newly
issued by the Company pursuant to this Agreement;

 

NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement, and for other good and valuable consideration, the receipt of which
is hereby acknowledged, it is hereby agreed as follows:

 

1. Exchange.  (a) Upon the terms and conditions set forth in this Agreement, and
subject to the Closings, the Company hereby agrees to issue to GBC: (i) 65,198
shares of Company Common Stock, which the Parties agree shall have the status of
“restricted securities” issued by a “shell company” as defined in Rule 12b-2 of
the Exchange Act and be subject to the resale provisions in subparagraph (i) of
SEC Rule 144; and (ii) the New Debenture in the principal amount of $99,054,
which New Debenture shall be in the form attached hereto as Exhibit A and
incorporated herein by reference, in exchange for: (i) the waiver of all accrued
interest on the GBC Advances through the Closing Date of the transactions
contemplated hereby; and (ii) the retirement and cancellation of all $208,308 in
GBC Advances, which GBC Advances include a total of $199,611 advanced through
September 30, 2019, as disclosed in the Company’s Quarterly Report on Form 10-Q
for the quarterly period then ended, together with $8,697 in additional advances
through the date hereof. The issuance of such 65,198 shares and the New
Debenture will be subject to forfeiture if there are no simultaneous Closings of
the Duke Share Exchange Agreement and the Duke Funding. The Company shall
promptly deliver the shares of the Company Common Stock and the New Debenture to
GBC on the Closings of the transactions contemplated hereby.

 

(b) Registration Rights. In accordance with the provisions set forth in that
certain Registration Rights Agreement being entered into by the Company, GBC and
other security holders of the Company contemporaneously with the execution of
this Agreement, (the “RRA”), within 30 calendar days following the earlier of
(X) the Company having timely filed its form 10-K for the fiscal year ended
December 2019 or (Y) it has finalized the second stage of the share exchange
agreement with the stockholders of Duke Robotics, Inc. or (Z) March 31, 2020,
the Company shall prepare and file with the SEC a Registration Statement (the
“Registration Statement”) for a resale offering to be made on a continuous
basis, registering the Conversion Shares (as defined in the New Debenture)
issuable upon conversion of the New Debenture (the “Registrable Securities”) and
shall use its commercially best efforts to keep such Registration Statement,
with respect to GBC, continuously effective under the Securities Act until the
earlier to occur of (i) the date on which GBC may sell the Conversion Shares
then held in compliance with Rule 144, or (ii) all Conversion Shares covered by
the Registration Statement have been sold by GBC.

 

2

 

 

Notwithstanding the registration obligations set forth above, if the SEC informs
the Company that all of the Registrable Securities cannot, as a result of the
application of Rule 415, be registered for resale as a secondary offering on a
single registration statement, the Company agrees to promptly inform GBC thereof
and use its commercially reasonable efforts to file amendments to the such
Registration Statement as required by the SEC, covering the maximum number of
Registrable Securities permitted to be registered by the SEC, on Form S-1 or
such other form available to register for resale the Registrable Securities as a
secondary offering, all as set forth in the RRA.

 

If the SEC or any SEC Guidance sets forth a limitation on the number of
Registrable Securities, and any other securities being registered on the
Registration Statement, permitted to be registered on a particular Registration
Statement, unless otherwise directed in writing by GBC as to its Registrable
Securities, the number of Registrable Securities to be registered on such
Registration Statement will be reduced on the basis set forth in the RRA.

 

For purposes of this Section 14, “SEC Guidance” means (i) any publicly-available
written or oral guidance of the SEC staff, or any comments, requirements or
requests of the SEC staff and (ii) the Securities Act.

 

If there is a conflict between this Agreement and the RRA, the RRA shall take
precedence and will control.

 

(c) Six Month Lock-Up of the Outstanding Shares. The 437,500 GBC Outstanding
Shares shall be restricted from sale or other disposition for a period of six
months from the date of the Closings.

 

2. Mutual Release. As further consideration for the transactions contemplated
hereby, each Party hereby releases acquits, and forever absolutely discharges
the other Party and its past and present owners, management members, employees,
servants, representatives, agents, attorneys, affiliated entities and persons,
subrogees, heirs, executors, insurers, successors, and assigns from any and all
actions, causes of action, claims, debts, liabilities, accounts, demands,
damages, causes, claims for indemnification or contribution, or any other thing
whatsoever whether known or unknown, suspected or unsuspected, certain or
speculative, accrued or unaccrued that such Party ever had or now has relating
to or arising out of past agreements, contracts, obligations and relationships
written or verbal with the other Party; provided, however, that such mutual
release shall not apply to any claims that may arise under or relate to this
Agreement or the New Debenture.

 

3

 

 

3. Representations and Warranties.  Each Party hereto hereby represents and
warrants to the other Party as follows:

 

(a) Authorization.  Such Party has the full right, power and authority to enter
into this Agreement and to perform the terms and provisions hereof.  The
execution, delivery and performance of this Agreement by such Party have been
duly authorized by all necessary action on the part of such party, and this
Agreement constitutes the valid and binding obligation of such Party,
enforceable against such Party in accordance with its terms.

 

(b) No Conflicts.  Neither the execution and delivery of this Agreement nor
compliance with the terms and provisions hereof on the part of such Party shall
breach any statutes or regulations of any governmental authority, domestic or
foreign, or shall conflict with or result in a breach of such Party’s
organizational document(s) (if applicable) or of any of the terms, conditions or
provisions of any judgment, order, injunction, decree, agreement or instrument
to which such Party is a party or by which it or its assets are or may be bound,
or constitute a default thereunder or an event which with the giving of notice
or passage of time or both would constitute a default thereunder, or require the
consent of any person or entity.

 

(c) Consents and Approvals.  No consent, waiver, approval, order, permit or
authorization of, or declaration or filing with, or notification to, any person
or entity is required on the part of such Party in connection with the execution
and delivery of this Agreement or the consummation of the transactions
contemplated hereby.

 

4. Representations, Warranties and Covenants of GBC.

 

GBC represents, warrants and agrees with, the Company that:

 

(a) This Agreement has been duly executed and delivered by GBC and constitutes a
valid and binding obligation of GBC enforceable in accordance with its terms.

 

(b) GBC acknowledges its understanding that the transactions contemplated by
this Agreement are intended to be exempt from registration under the Securities
Act of 1933, as amended (the “Securities Act”).

 

(c) GBC has the financial ability to bear the economic risk of his investment,
has adequate means for providing for its current financial needs and
contingencies and has no need for liquidity with respect to its investment in
the Company.

 

4

 

 

(d) GBC is an “accredited investor” as that term is defined in Rule 501(a) of
Regulation D under the Securities Act (17 C.F.R. 230.501(a)).

     

(e) GBC is not subject to or obligated under any provisions of any law,
regulation, order, judgment or decree which would be breached or violated by the
execution, delivery and performance of this Agreement by GBC and the
consummation of the transactions contemplated hereby.

 

(f) GBC is an “affiliate” and the principal shareholder of the Company and has
had full access to all information about the Company, without qualification,
including, but not limited to, the information contained in all of its filings
with the SEC made by the Company pursuant to the Exchange Act and which are
contained in the Edgar Archives of the SEC.

 

5. Miscellaneous.

 

(a) Notices.    All notices or other communications required or permitted by
this Agreement or by law to be served on or given to either Party to this
Agreement by the other Party shall be in writing and shall be deemed duly served
when personally delivered to the Party at an address agreed upon by both
Parties.

 

(b) Assignment.  This Agreement and all the provisions hereof will be binding
upon and inure to the benefit of the Parties hereto and their respective
successors and permitted assigns.

 

(c) Governing Law.    The validity, interpretation, construction and performance
of this Agreement shall be determined in accordance with the provisions of the
Share Exchange Agreement.

 

(d) Severability.  Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid
under applicable law, such provision will be ineffective only to the extent of
such provision or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.

 

(e) Amendment; Waiver.    In the event either Party wishes to amend this
Agreement, the Agreement may only be amended or waived in a writing executed by
both Parties.

 

(f) Complete Agreement.  This Agreement contains the complete agreement between
the Parties hereto and supersedes any prior understandings, agreements or
representations by or between the Parties, written or oral, which may have
related to the subject matter hereof in any way.

 

(g) Further Assurances. The Parties shall do and perform, or cause to be done
and performed, all such further acts and things, and shall execute and deliver
all such other agreements, certificates, instruments and documents, as the other
Party hereto may reasonably request in order to carry out the intent an
accomplish the purposes of this Agreement, if requested.

 

(h) Counterparts. This Agreement may be executed in two or more identical
counterparts, all of which 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. In the event that any signature is delivered by
facsimile transmission or by an e-mail which contains a portable document format
(.pdf) file of an executed signature page, such signature page 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 signature page
were an original thereof.

 

(i) Effective Date. The “Effective Date” of this Agreement shall be the date of
the Closings of the Duke Share Exchange Agreement and the Duke Funding, and
absent such Closings, this Agreement and the matters covered hereby shall have
no effect whatsoever between the parties hereto, and the respective rights,
obligations and duties of the parties under the Purchase Agreement and the
Original Debentures shall continue, unchanged.

 

[SIGNATURE PAGE FOLLOWS]

 

5

 

 

IN WITNESS WHEREOF, the Parties hereto have executed this Exchange Agreement as
of the date first written above.

 

  UAS DRONE CORP.       By: /s/ Christopher J. Leith     Name: Christopher J.
Leith     Title: Acting CFO

 

  GREENBLOCK CAPITAL, LLC         By: /s/ Chris Spencer     Name: Chris Spencer
    Title: Managing Member

 

 

6