Exhibit 10.1

EXCHANGE AGREEMENT

This Exchange Agreement (this “Agreement”) is made and entered into as June 22,
2018, by and between the undersigned holder (the “Holder”), and Cool Holdings,
Inc., a Maryland corporation (the “Company”).

RECITALS

WHEREAS, the Holder is the beneficial owner of one or more promissory notes, as
further described on Exhibit A attached hereto (collectively, the “Notes”); and

Whereas, the maker of the Notes is a direct or indirect wholly-owned subsidiary
of the Company; and

WHEREAS, subject to the terms and conditions set forth herein, the Company and
the Holder desire to exchange the principal amount of the Notes, plus any
accrued interest, calculated as of the Closing Date (as defined below) (the
“Exchange Notes”), for units of securities of the Company (“Exchange Units”),
calculated as of the Closing Date, at an exchange rate per Exchange Unit as set
forth in the Holder Profile attached hereto as Exhibit B (the “Holder
Profile”).  Each Exchange Unit will be comprised of (a) one share of common
stock of the Company, par value $0.001 (the “Exchange Common Shares”), or one
share of 0% Series A Convertible Preferred Stock, par value $0.001 per shares
(the “Exchange Preferred Shares” and, together with the Exchange Common Shares,
the “Exchange Shares”) and (b) a warrant, in the form attached hereto as Exhibit
C, which would permit the Holder to purchase up to 100% of the number of Common
Exchange Shares, at an exercise price as set forth in the Holder Profile (the
“Exchange Warrants”); and

WHEREAS, the offering and exchange of the Exchange Units to be issued is
intended to be exempt from registration pursuant to Section 3(a)(9) of the
Securities Act of 1933, as amended (the “Securities Act”).

NOW, THEREFORE, in consideration of the premises and the agreements set forth
below, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

ARTICLE I

Exchange

Section 1.01Exchange.  Upon the terms and subject to the conditions of this
Agreement, the Holder and the Company shall, pursuant to Section 3(a)(9) of the
Securities Act, exchange the Exchange Notes for the Exchange Units without the
payment of any additional consideration. At the Closing (as defined below), the
following transactions shall occur (collectively, the “Exchange”):

 

(a)

The Holder shall surrender the original Exchange Notes for cancellation, or, in
the event the original Exchange Notes are lost, stolen or missing, shall deliver
an affidavit of loss, in the manner and place designated by the Company. Upon
cancellation of the Exchange Notes, the Holder hereby releases all claims
arising out of or related to the Exchange Notes, including, but not limited to,
any accrued and unpaid interest payable with respect to the Exchange Notes.

 

(b)

The Company shall issue to the Holder the Exchange Units.  No factional Exchange
Units will be issued.  Instead, the number of Exchange Units to be issued to the
Holder will be the number of Exchange Units as would otherwise be issued
pursuant to the Exchange rounded down to the next lowest whole number. The
issuance of the Exchange Units to the Holder will be made without registration
of the offering and exchange of the Exchange

-1-

--------------------------------------------------------------------------------

 

 

Units under the Securities Act, in reliance upon the exemption therefrom
provided by Section 3(a)(9) of the Securities Act and in reliance on similar
exemptions under state securities or Blue Sky laws.

Section 1.02Closing.  The closing of the Exchange (the “Closing”) will take
place at the offices of Perkins Coie LLP, 1888 Century Park East, Suite 1700,
Los Angeles, CA 90067-1721, or such other location as may be agreed upon by the
parties, on the date determined by the Company (the “Closing Date”). The parties
shall exchange closing deliverables as follows:

 

(a)

At or prior to the Closing, each party shall execute this Agreement and deliver
the same to the other;

 

(b)

At or prior to the Closing, the Holder shall deliver the Exchange Notes or an
affidavit of loss, in a form approved by the company, as applicable, to the
Company at the address listed in Section 4.11, or to such other person or place
designated by the Company;

 

(c)

At or prior to the Closing, the Company shall cancel the Exchange Notes;

 

(d)

At or prior to the Closing, the Company shall provide notice to the Holder of
the number of Exchange Units to be issued pursuant to this Agreement;

 

(e)

At the Closing, the Company shall instruct Computershare Trust Company, N.A. to
electronically issue the Exchange Common Shares, in book-entry form, to the
Holder or, if the Holder so instructs in advance of the Closing Date, its
designee;

 

(f)

If applicable, at the Closing, the Company shall issue and deliver certificates
evidencing the Exchange Preferred Shares to the Holder;

 

(g)

At the Closing, the Company shall issue and deliver the Exchange Warrants to the
Holder; and

Notwithstanding anything contained herein to the contrary, the Holder agrees
that it is irrevocably committed to the Exchange and is bound by this Agreement
upon acceptance hereof by the Holder, as indicated by its signature below;
provided, however, this Agreement shall not become binding on the Company unless
the Exchange has been accepted by the Company, as indicated by its signature
below.  If the Exchange is rejected, this Agreement and the Exchange shall be
rendered void and of no further force or effect.  The Holder hereby agrees that,
notwithstanding the execution by the Holder of this Agreement, the Holder will
not be a stockholder of the Company with respect to any Exchange Units, and
Exchange Units proposed to be acquired by the Holder shall not be transferred to
the Holder, until the Exchange has been accepted, this Agreement has been signed
by both parties, and the Closing has occurred.

Section 1.03Issuance Matters.

 

(a)

The Company agrees to issue the Exchange Common Shares at the Closing without
any restrictions on transfer and without any restrictive legend.

 

(b)

The Company shall not issue fractional shares upon Exchange of the Exchange
Notes.  

 

(c)

If any fractional share would be issuable upon the Exchange, the Company shall
issue to Holder the number of Exchange Units as would otherwise be issued
pursuant to the Exchange rounded down to the next lowest whole number

-2-

--------------------------------------------------------------------------------

 

Section 1.04Beneficial Ownership Limitation. Notwithstanding anything to the
contrary set forth herein, in the event the Holder (together with the Holder’s
affiliates, and any other persons acting as a group together with the Holder or
any of the Holder’s affiliates (such persons, “Attribution Parties”))
beneficially owns or would beneficially own in excess of 9.99% of the shares of
common stock of the Company, par value $0.001 (“Common Shares”) outstanding
immediately after giving effect to the Exchange (“Beneficial Ownership
Limitation”), the Holder shall be issued Exchange Preferred Shares for any
Exchange Units issued hereunder in excess of the Beneficial Ownership
Limitation.

Section 1.05Exercise and Voting Limitation.

 

(a)

Notwithstanding anything to the contrary set forth herein, the Company shall not
issue, and the Holder shall not have the right to receive, any Common Shares
issuable upon conversion of the Exchange Preferred Shares (such Common Shares,
“Conversion Shares”) or of any other shares of convertible preferred stock of
the Company (together with the Exchange Preferred Shares, the “Preferred
Shares”), whether such Preferred Shares were issued pursuant to this Agreement
or any other agreement with the Company, if, following the issuance of such
Conversion Shares, the Holder would in the aggregate hold in excess of 19.99% of
the issued and outstanding Common Shares of the Company, calculated on a
post-issuance basis (the “Exchange Cap”), except that such limitation shall not
apply in the event that the Company obtains the approval of its stockholders as
required by the applicable rules of NASDAQ Stock Market (“NASDAQ”) to issue
Common Shares in excess of the Exchange Cap.

 

(b)

Notwithstanding anything to the contrary set forth herein, the Holder agrees
that it will not vote any Preferred Shares on an as-converted basis to the
extent voting on an as-converted basis would result in the Holder having the
right to vote in excess of 9.99% of the total number of Common Shares entitled
to vote on any matter submitted for a vote by the holders of Common Shares.

ARTICLE II

Representations, Warranties and Covenants of the Holder

The Holder represents and warrants to, and agrees with, the Company as set forth
below in this Article II, as of the date hereof, each of which is being relied
upon by the Company, as the case may be, as a material inducement to enter into
and perform this Agreement:

Section 2.01Existence and Power.

 

(a)

The Holder is duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization, as applicable, and has all requisite
entity power and authority to carry out the transactions contemplated hereby in
accordance with the terms hereof.

 

(b)

The execution, delivery and performance by the Holder of this Agreement has been
duly authorized by all requisite entity action, as applicable. Neither the
execution of this Agreement nor the consummation of the transactions
contemplated hereby by the Holder will contravene any formation documents of the
Holder, as applicable, or will constitute a violation of or a default under, or
conflict with or require a consent under, any contract, commitment, agreement,
understanding, arrangement, restriction, law, statute, rule, regulation,
judgment, order, injunction, suit, action or proceeding of any kind to which the
Holder is a party or by which the Holder or any of its assets are bound.

-3-

--------------------------------------------------------------------------------

 

Section 2.02Valid and Enforceable Agreement; Authorization. The execution,
delivery and performance by the Holder of this Agreement has been duly
authorized by all requisite entity action, as applicable. This Agreement
constitutes the legal, valid and binding obligation of the Holder, enforceable
against the Holder in accordance with its terms, subject, as to enforcement of
remedies, to bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights and remedies of creditors generally and to the effect of
general principles of equity.

Section 2.03Title to Exchange Notes. The Holder is the sole beneficial owner of
and has good and valid title to the Exchange Notes, free and clear of any
mortgage, lien, pledge, charge, security interest, encumbrance, title retention
agreement, option, equity or other adverse claim thereto. The Holder has not, in
whole or in part, (a) assigned, transferred, hypothecated, pledged or otherwise
disposed of the Exchange Notes or its rights in the Exchange Notes, or (b) given
any person or entity any transfer order, power of attorney or other authority of
any nature whatsoever with respect to the Exchange Notes.

Section 2.04Reliance on Exemptions. The Holder acknowledges that the Exchange
Units are being offered and exchanged in reliance on specific exemptions from
the registration requirements of United States federal and state securities laws
and that the Company is relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgments and understandings of
the Holder set forth herein in order to determine the availability of such
exemptions and the eligibility of the Holder to acquire the Exchange Shares. The
Holder acknowledges that the Exchange Units shall be issued to the Holder solely
in exchange for the Exchange Notes without the payment of any additional
consideration. As of the date hereof and as of the Closing Date, the Holder has
not and will not pay any commission or other remuneration, directly or
indirectly, to any broker or other intermediary, in connection with the
Exchange.

ARTICLE III

Representations, Warranties and Covenants of the Company

The Company represents and warrants to, and agrees with, the Holder as set forth
below in this Article III, as of the date hereof, each of which is being relied
upon by the Holder, as the case may be, as a material inducement to enter into
and perform this Agreement:

Section 3.01Existence and Power.

 

(a)

The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Maryland and has the power, authority
and capacity to execute and deliver this Agreement, to perform the Company’s
obligations hereunder, and to consummate the transactions contemplated hereby.

 

(b)

Neither the execution of this Agreement nor the consummation of the transactions
contemplated hereby by the Company will contravene the certificate of
incorporation or the bylaws of the Company or will constitute a violation of or
a default under, or conflict with or require a consent under, any contract,
commitment, agreement, understanding, arrangement, restriction, law, statute,
rule, regulation, judgment, order, injunction, suit, action or proceeding of any
kind to which the Company is a party or by which the Company or any of its
assets are bound.

Section 3.02Valid and Enforceable Agreement; Authorization. The execution,
delivery and performance by the Company of this Agreement and the consummation
of the transactions contemplated hereby have been duly authorized by all
requisite corporate action. This Agreement constitutes the legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, subject, as to enforcement of remedies, to bankruptcy,
insolvency, reorganization, moratorium or

-4-

--------------------------------------------------------------------------------

 

similar laws affecting the rights and remedies of creditors generally and to the
effect of general principles of equity.

Section 3.03Capitalization. The entire authorized capital stock of the Company
is a substantially set forth in the Company’s Form 10-Q filed with the
Securities and Exchange Commission on May 21, 2018.

Section 3.04Disclosure. The Company has timely filed all reports, schedules,
forms, statements and other documents required to be filed by it with the
Securities and Exchange Commission (the “SEC”) pursuant to the reporting
requirements of the Securities Act and the Securities Exchange Act of 1934 (the
“Exchange Act”) (all of the foregoing filed prior to the date hereof and all
exhibits included therein and financial statements and schedules thereto and
documents (other than exhibits to such documents) incorporated by reference
therein, being hereinafter referred to herein as the “SEC Documents”), or has
timely filed for a valid extension of such time of filing and has filed any such
SEC Documents prior to the expiration of any such extension. As of their
respective dates, the SEC Documents complied in all material respects with the
requirements of the Securities Act and the Exchange Act and the rules and
regulations of the SEC promulgated thereunder applicable to the SEC Documents,
and none of the SEC Documents, at the time they were filed with the SEC,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.

Section 3.05Listing. The Company is currently listed on NASDAQ.

Section 3.06Section 3(a)(9) Compliance. The Company acknowledges that the
Exchange Units are being offered and exchanged in reliance on the exemption from
registration provided by Section 3(a)(9) of the Securities Act. As of the date
hereof and as of the Closing Date, the Company has not and will not pay any
commission or other remuneration, directly or indirectly, to any broker or other
intermediary, in connection with the Exchange.

ARTICLE IV

Miscellaneous Provisions

Section 4.01Specific Performance. The parties acknowledge that money damages are
not an adequate remedy for violations of this Agreement and that any party may,
in its sole discretion, apply to a court of competent jurisdiction for specific
performance or injunctive or such other relief as such court may deem just and
proper in order to enforce this Agreement or prevent any violation hereof and,
to the extent permitted by applicable law, each party waives any objection to
the imposition of such relief, this being in addition to any other remedy to
which such party is entitled at law or in equity.

Section 4.02Disclosure of Transaction and Other Material Information. The
Company may publicly disclose all the material terms of the transactions
contemplated by this Agreement.

Section 4.03Entire Agreement. This Agreement and the other documents and
agreements executed in connection with the Exchange embody the entire agreement
and understanding of the parties hereto with respect to the subject matter
hereof and supersede all prior and contemporaneous oral or written agreements,
representations, warranties, contracts, correspondence, conversations, memoranda
and understandings between or among the parties or any of their agents,
representatives or affiliates relative to such subject matter, including,
without limitation, any term sheets, emails or draft documents.

Section 4.04Assignment; Binding Agreement. This Agreement and the various rights
and obligations arising hereunder shall inure to the benefit of and be binding
upon the parties hereto and their successors and assigns. The Company shall not
assign this Agreement or any rights or obligations hereunder without

-5-

--------------------------------------------------------------------------------

 

the prior written consent of the Holder.

Section 4.05Counterparts. This Agreement may be executed in multiple
counterparts, and on separate counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument. Any counterpart or other signature hereupon delivered by facsimile
shall be deemed for all purposes as constituting good and valid execution and
delivery of this Agreement by such party.

Section 4.06Remedies Cumulative. Except as otherwise provided herein, all rights
and remedies of the parties under this Agreement are cumulative and without
prejudice to any other rights or remedies available at law.

Section 4.07Governing Law; Jurisdiction; Jury Trial. This Agreement shall be
governed by and construed in accordance with the internal laws of the State of
Florida, without giving effect to its conflicts of laws provisions. Each of the
Parties hereto irrevocably submits to the exclusive jurisdiction of the courts
of the State of Florida, City of Miami, for the purpose of any suit, action,
proceeding or judgment relating to or arising out of this Agreement 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
Agreement. Each of the Parties hereto 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. Each Party hereto 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
PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION
WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED
SPECIFICALLY AS TO THIS WAIVER. The Parties hereto agree and acknowledge that
each Party has retained counsel in connection with the negotiation and
preparation of this Agreement, and that any rule of construction to the effect
that any ambiguities are to be resolved against the drafting Party shall not be
employed in the interpretation of the foregoing agreements or any amendment,
schedule or exhibits thereto.

Section 4.08Survival. The representations, warranties and covenants of the
Company and the Holder contained in Articles II, III and IV shall survive the
survive cancellation of the Exchange Notes and issuance of the Exchange Shares,
until the expiration of the applicable statute of limitations.

Section 4.09No Third-Party Beneficiaries or Other Rights. Nothing herein shall
grant to or create in any person not a party hereto, or any such person’s
dependents or heirs, any right to any benefits hereunder, and no such party
shall be entitled to sue any party to this Agreement with respect thereto.

Section 4.10Waiver; Consent. This Agreement may not be changed, amended,
terminated, augmented, rescinded or discharged (other than in accordance with
its terms), in whole or in part, except by a writing executed by the parties
hereto. No waiver of any of the provisions or conditions of this Agreement or
any of the rights of a party hereto shall be effective or binding unless such
waiver shall be in writing and signed by the party claimed to have given or
consented thereto. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provision hereof (whether or
not similar), nor shall such waiver constitute a continuing waiver unless
otherwise expressly provided.

Section 4.11Notices. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (a) upon receipt, when
delivered personally, (b) upon receipt, when sent by facsimile or other
electronic transmission (provided confirmation of transmission is mechanically
or electronically generated and kept

-6-

--------------------------------------------------------------------------------

 

on file by the sending party), or (c) one (1) business day after deposit with an
overnight courier service, in each case properly addressed to the party to
receive the same. The addresses and facsimile numbers for such communications
shall be:

If to the Company:

Cool Holdings, Inc.

4435 Eastgate Mall, Suite 320

San Diego, CA 92121

Telephone: (858) 373-1675

Email: vern.loforti@infosonics.com

Attention: Vernon A. LoForti

with a copy (for informational purposes only) to:

Perkins Coie LLP

1888 Century Park East, Suite 1700

Los Angeles, CA 90067-1721

Telephone: (310) 788-3268

Facsimile: (310) 788-3399

Email: dkatz@perkinscoie.com

Attention: David J. Katz

If to the Holder, to the address specified on the signature page hereto.

Any party hereto may change his or its address for notice by giving notice
thereof in the manner herein above provided.

Section 4.12Interpretations. The words such as “herein,” “hereinafter,”
“hereof,” and “hereunder” refer to this Agreement as a whole and not merely to a
subdivision in which such words appear unless the context otherwise requires.
The singular shall include the plural, and vice versa, unless the context
otherwise requires. The masculine shall include the feminine and neuter, and
vice versa, unless the context otherwise requires.

Section 4.13Further Assurances. The Holder and the Company each hereby agree to
execute and deliver, or cause to be executed and delivered, such other
documents, instruments and agreements, and take such other actions, as either
party may reasonably request in connection with the transactions contemplated by
this Agreement.

Section 4.14Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

Section 4.15Severability. If any one or more of the provisions contained herein,
or the application thereof in any circumstance, is held invalid, illegal or
unenforceable, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions contained herein shall
not be affected or impaired thereby.

[THE REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY.]

  

 

-7-

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed as of the date first above written.

 

COMPANY:

 

 

 

COOL HOLDINGS, INC.

 

 

 

By:

 

 

Name:

 

Vernon A. LoForti

Title:

 

Vice President

 

 

HOLDER:

 

 

 

Name:           

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

  

Address:  

 

 

 

Holder’s Tax ID Number:

 

 

 

Signature Page to Exchange Agreement

--------------------------------------------------------------------------------

 

Exhibit A

The Notes

 

 

 

A-1

--------------------------------------------------------------------------------

 

Exhibit B

 

Holder Profile

 

Terms used but not otherwise defined herein shall have the meanings ascribed to
such terms in the Exchange Agreement.

The Holder represents and warrants that it is the beneficial owner of __________
shares of the Company’s common stock (other than the Exchange Shares).  Please
fill in the blank above.  If that number is zero, please indicate by writing
“0”.

Exchange Rate per Exchange Share: $3.68

Exercise Price per Exchange Warrant: $3.56

 

 

 

(1)

Name of Holder (Please Print or Type)

 

 

 

 

 

 

 

 

Name of person exercising investment
discretion for Holder (trustee or fiduciary, etc.)

 

 

 

 

(2)

Social Security Number/Tax I.D. Number: _____________________

 

 

 

(3)

Type of Holder - Please check one:

 

 

Individual

 

Limited Liability Company

 

 

Partnership

 

Individual Retirement Account

 

 

Corporation

 

Foundation

 

 

Trust

 

Employee Benefit Plan

 

 

Tenants in Common

 

Endowment

 

 

Joint Tenants

 

Other

 

 

 

(4)

Domicile (in the case of individuals) or jurisdiction in which organized:

 

 

 

(5)

Residence or principal place of
business address:

 

 

Mailing address (if different):

 

Name

 

Name

 

 

 

 

 

 

Company

 

Company

 

 

 

 

 

 

Street

 

Street

 

 

 

 

 

 

City, State, Zip Code

 

City, State, Zip Code

 

 

 

 

 

Attn:

 

 

Attn:

 

 

Telephone number:

 

 

Telephone number:

 

 

 

 

 

 

 

 

Fax number:

 

 

Fax number:

 

 

 

 

 

 

 

 

Email:

 

 

Email:

 

 

 

 

 

 

 

 

B-1

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the Holder has hereby executed this Holder Profile as of the
effective date of the Exchange Agreement.

 

HOLDER:

 

 

 

Name:           

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

  

 

 

Exhibit B