Blueprint





 







Exhibit 10.2


 



THIS PROMISSORY NOTE HAS BEEN ACQUIRED FOR INVESTMENT AND HAS NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
QUALIFIED UNDER ANY STATE SECURITIES LAWS. THIS PROMISSORY NOTE MAY
NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
QUALIFICATION OR AN EXEMPTION THEREFROM UNDER SAID ACT AND ANY
APPLICABLE STATE SECURITIES LAWS.

 



CONVERTIBLE PROMISSORY NOTE


 


	
 

	
 

	
 


	

$250,000

	
 

	

October
25, 2018


	
 

	
 

	

Irvine,
California






 


FOR VALUE RECEIVED, True Drinks
Holdings, Inc., a Nevada corporation, (the “Company”), promises to pay to the
order of Red Beard Holdings, LLC, its successors or assigns (the
“Holder”), the
principal sum of Two Hundred Fifty Thousand Dollars ($250,000), or
such lesser amount as is advanced and outstanding hereunder, on
December 31, 2019 (the “Maturity Date”), together with
interest thereon as provided in Section 3 of this Convertible
Promissory Note (this “Note”). Holder shall disburse the
amount of this Note in accordance with the terms
hereof.

 


1.
Definitions. For
purposes of this Note, the following terms shall have the following
meanings:

 


“Business Day” means any day which
is not a Saturday or Sunday or a legal holiday on which national
banks are authorized or required to be closed.

 


“Governmental Authority” means any
federal, state, local or other governmental department, commission,
board, bureau, agency or other instrumentality or authority,
domestic or foreign, exercising executive, legislative, judicial,
regulatory or administrative authority or functions of or
pertaining to government.

 


“Material Adverse Effect” means
any event, matter, condition or circumstance which (i) has or
would reasonably be expected to have a material adverse effect on
the business, properties, operations, condition (financial or
otherwise) or prospects of the Company and its Subsidiaries, taken
as a whole; (ii) would materially impair the ability of the
Company or any other Person to perform or observe their respective
obligations under or in respect of this Note; (iii) would
materially impair the rights and remedies of Holder under this
Note; or (iv) affects the legality, validity, binding effect
or enforceability of this Note.

 


“Organic Document” means, relative
to any Person, its articles or certificate of incorporation, or
certificate of limited partnership or formation, its bylaws,
partnership or operating agreement or other organizational
documents, and all stockholders agreements, voting trusts and
similar arrangements applicable to any of its capital stock,
partnership interests or other ownership interests.

 


“Outstanding Balance” means the
outstanding principal balance of this Note together with all
accrued but unpaid interest hereunder.

 


“Person” means an individual, a
partnership, a corporation, a limited liability company, an
association, a joint stock company, a trust, a joint venture, an
unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.

 


“PIK Interest” means, with respect
to the Outstanding Balance under this Note, accrued interest on
such Outstanding Balance to the extent such interest is not paid in
cash but is added to the principal balance and due on the Maturity
Date.


 


 




 








 






 


2.
Line of
Credit.


 


(a)
Subject to the terms and conditions of this Note, Holder agrees to
make advances to the Company at the Company’s request in an
aggregate principal amount at any one time outstanding not to
exceed $50,000, up to a maximum of $250,000 (the
“Line of
Credit”); provided,
however, that the Holder, in its sole discretion, may
decline to provide additional advances for any reason upon written
notice to the Company of such intent to decline to provide
additional funds, which written notice shall be provided to the
Company no later than 5:00 p.m. PST one Business Day prior to the
requested advance date. The Company may borrow, repay and re-borrow
all or any part of the Line of Credit, subject to the terms of this
Note. All advances must be requested not later than the Maturity
Date. Holder shall enter each amount borrowed and repaid in
Holder’s records. No failure by Holder to make, and no error
by Holder in making, any entry in such records shall affect the
Company’s obligation to repay the full principal amount
advanced by Holder to or for the account of the Company, or to pay
interest or fees thereon at the agreed-upon rates.

 


(b)
Each advance request shall be made (i) by telephone or in
writing at the number or address, as applicable, provided for
Holder in Section 14, and (ii) no later than 11:00 a.m.
PST one Business Day prior to the requested advance date, which
date shall be a Business Day. The Company may not request an
advance more than once in each calendar week. Each oral advance
request shall be conclusively presumed to have been made by a
person authorized by the Company to do so, and any credit by Holder
of an advance to or for the account of the Company shall
conclusively establish the Company’s obligation to repay
same.


 


(c)
This Line of Credit shall terminate, and no further advances shall
be made, upon the Maturity Date.

 


(d) The
proceeds of each advance shall be disbursed in accordance with the
instructions provided by the Company.

 


3.
Payment of
Interest.

 


(a)
Interest Generally.
Interest shall accrue on the outstanding principal amount of this
Note at a rate equal to 8% per annum, based upon a 360-day
year, payable in arrears. Interest
shall compound monthly commencing on the date of this Note and be
payable at such time as all outstanding Principal Amount owed under
this Note shall be fully repaid, but unless earlier paid in
accordance with the terms of this Note, shall be paid on the
Maturity Date.


 


(b)
Default Interest.
Upon the occurrence and during the continuance of any Event of
Default, the Outstanding Balance under this Note shall bear
interest at a rate per annum equal to 10% per annum.

 


4.
Payments.

 


(a)
Form of Payment.
All payments of cash interest and principal shall be in lawful
money of the United States of America by a check drawn on the
account of the Company and sent via overnight courier service to
Holder at such address as previously provided to the Company in
writing (which address, in the case of Holder as of the date of
issuance hereof, shall initially be the address for Holder as set
forth in this Note); provided that Holder may elect to
receive a payment of cash via wire transfer of immediately
available funds by providing the Company with prior written notice
setting out such request and Holder’s wire transfer
instructions. All payments shall be applied first to accrued
interest, and thereafter to principal.

 


(b)
No Set-Off. The
Company agrees to make all payments under this Note without set-off
or deduction and regardless of any counterclaim or
defense.

 


(c)
Prepayment. The
Company shall have the right to prepay the Outstanding Balance owed
under this Note in whole or in part at any time.

 


(d)
Required Payment.
If the Outstanding Balance at any one time outstanding hereunder
exceeds the lending commitment amount of $250,000 (excluding PIK
Interest), the Company shall, at the time any such excess shall
arise, promptly pay to Holder such amount as may be necessary to
eliminate the excess.


 


5.
Conditions
Precedent. Holder shall not be obligated to make any advance
under this Note if any Event of Default shall have occurred and is
continuing.


 


 




 








 






 


6.
Conversion. At any
time prior to the Maturity Date, the Holder shall have the right
and option to convert the Outstanding Balance into that number of
fully paid and non-assessable shares of the Company’s common
stock, par value $0.001 per share, as is equal to the quotient
obtained by dividing the Outstanding Balance by
$0.005.


 


7.
Representations and
Warranties. The Company hereby makes the following
representations and warranties to Holder:

 


(a)
Organization, Good
Standing and Qualification. The Company is duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation, and has all requisite power and
authority to execute, deliver and perform its obligations under
this Note. The Company is qualified to do business and is in good
standing in each jurisdiction in which the failure so to qualify or
be in good standing would have a Material Adverse Effect, and has
all requisite power and authority to own its assets and carry on
its business.

 


(b)
Corporate Power and
Authorization; Consents. The execution, delivery and
performance by the Company of this Note have been duly authorized
by all necessary action of the Company and do not and will not
(i) contravene the terms of the Company’s Organic
Documents; (ii) result in a breach of, or constitute a default
(or an event that with notice or lapse of time or both would become
a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any lease, instrument, contract or other
agreement to which the Company is a party or by which its
properties may be bound or affected; (iii) necessitate the
consent, approval, order or authorization of, or registration,
qualification, designation, declaration or filing with, any
Governmental Authority or any third party; or (iv) violate any
provision of any law, rule, regulation, order, judgment, decree or
the like binding on or affecting the Company, except in the case of
each of clauses (ii), (iii) and (iv), such as would not result
in a Material Adverse Effect.

 


(c)
Enforceability.
This Note constitutes the legal, valid and binding obligation of
the Company, enforceable against the Company in accordance with its
terms

 


8.
Covenants. So long
as any indebtedness under this Note remains outstanding, the
Company shall provide to Holder, as soon as possible and in any
event within three (3) days after the occurrence thereof,
written notice of an Event of Default, which notice sets forth the
details of such event and the action which is proposed to be taken
by the Company with respect thereto.

 


9.
Default.

 


(a)
Events of Default.
For purposes of this Note, any of the following events which shall
occur shall constitute an “Event of
Default”:

 


(i) any
indebtedness under this Note is not paid when and as the same shall
become due and payable, whether at maturity, by acceleration,
thirty (30) days following notice of prepayment or
otherwise;

 


(ii)
default shall occur in the observance or performance of the
covenant, obligation or agreement of the Company contained in
Section 8, or (B) any other provision of this Note, and,
in the case of this clause (B), such default shall continue uncured
for a period of thirty (30) days;

 


(iii)
any representation, warranty or certification made herein by or on
behalf of the Company or any of its Subsidiaries shall prove to
have been false or incorrect in any material respect on the date or
dates as of which made (any such falsity being a
“Representation
Default”);


 




 








 






 

 


(iv)
the Company shall (A) apply for or consent to the appointment
of a receiver, trustee, custodian or liquidator of itself or any
part of its property, (B) become subject to the appointment of
a receiver, trustee, custodian or liquidator for itself or any part
of its property, (C) make an assignment for the benefit of
creditors, (D) fail generally, become unable or admit in
writing to its inability to pay its debts as they become due,
(E) institute any proceedings under the United States
Bankruptcy Code or any other federal or state bankruptcy,
reorganization, receivership, insolvency or other similar law
affecting the rights of creditors generally, or file a petition or
answer seeking reorganization or an arrangement with creditors to
take advantage of any insolvency law, or file an answer admitting
the material allegations of a bankruptcy, reorganization or
insolvency petition filed against it, or (F) become subject to
any involuntary proceedings under the United States Bankruptcy Code
or any other federal or state bankruptcy, reorganization,
receivership, insolvency or other similar law affecting the rights
of creditors generally;

 


(v) the
Company shall (i) liquidate, wind up or dissolve (or suffer
any liquidation, wind-up or dissolution), (ii) suspend its
operations other than in the ordinary course of business, or
(iii) take any action to authorize any of the actions or
events set forth above in this Section 9(a)(v);
or

 


(vi)
this Note shall for any reason cease to be, or shall be asserted by
the Company not to be, a legal, valid and binding obligation of the
Company.

 


(b)
Consequences of Events of
Default.

 


(i) If
any Event of Default shall occur for any reason, whether voluntary
or involuntary, and be continuing, Holder may, upon notice or
demand, declare the Outstanding Balance under this Note to be due
and payable, whereupon the Outstanding Balance under this Note
shall be and become immediately due and payable, and the Company
shall immediately pay to Holder the entire Outstanding Balance.
Upon the occurrence of an actual or deemed entry of an order for
relief with respect to the Company under the United States
Bankruptcy Code, then the Outstanding Balance under this Note shall
automatically be due immediately without notice of any kind. The
Company agrees to pay Holder all out-of-pocket costs and expenses
incurred by Holder (including attorney’s fees) in connection
with the enforcement or protection of its rights in relation to
this Agreement, including any suit, action, claim or other activity
of Holder to collect the Outstanding Balance under this Note or any
portion thereof, or in connection with the transactions
contemplated hereby.

 


(ii)
Holder shall also have any other rights, which Holder may have been
afforded under any contract or agreement at any time and any other
rights which Holder may have pursuant to applicable
law.

 


11.
Lost, Stolen, Destroyed or
Mutilated Note. In case this Note shall be mutilated, lost,
stolen or destroyed, the Company shall issue a new Note of like
date, tenor and denomination and deliver the same in exchange and
substitution for and upon surrender and cancellation of such
mutilated Note, or in lieu of this Note being lost, stolen or
destroyed, upon receipt of evidence satisfactory to the Company of
such loss, theft or destruction.


 


12.
Waiver of Jury
Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH
CANNOT BE WAIVED, THE COMPANY (BY ITS EXECUTION HEREOF) AND HOLDER
(BY ITS ACCEPTANCE OF THIS NOTE) WAIVES AND COVENANTS THAT IT WILL
NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT
TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE OR ACTION
ARISING OUT OF OR BASED UPON OR RELATING TO THIS NOTE OR IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE TRANSACTIONS
CONTEMPLATED HEREBY, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING.

 


13.
Governing Law. This
Note shall be deemed to be a contract made under the laws of the
State of California and for all purposes shall be governed by,
construed under, and enforced in accordance with the laws of the
State of California.


 




 








 






 

 


14.
Amendment and
Waiver. Any term of this Note may be amended and the
observance of any term of this Note may be waived (either generally
or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and
Holder.

 


15.
Notices. Any notice
or other communication in connection with this Note may be made and
is deemed to be given as follows: (i) if in writing and
delivered in person or by courier, on the date when it is
delivered; (ii) if by facsimile, when received at the correct
number (proof of which shall be an original facsimile transmission
confirmation slip or equivalent); or (iii) if sent by
certified or registered mail or the equivalent (return receipt
requested), on the date such mail is delivered, unless the date of
that delivery is not a Business Day or that communication is
delivered on a Business Day but after the close of business on such
Business Day in which case such communication shall be deemed given
and effective on the first following Business Day. Any such notice
or communication given pursuant to this Note shall be addressed to
the intended recipient at its address or number (which may be
changed by either party at any time) specified as
follows:


 


	
 

	
 

	
 


	

If to
the Company:

	
 

	

True
Drinks Holdings, Inc.


2 Park
Plaza Suite 1200


Irvine,
CA 92614


Facsimile
No.:


Telephone
No.: 949-203-3500


Attention:
Chief Executive Officer


 


	
 

	
 


	

With a
copy to:

	
 

	

Daniel
W. Rumsey


Disclosure
Law Group


600
West Broadway, Suite 700


San
Diego, CA 92101


Facsimile
No.: 619-272-7062


Telephone
No.: 619-795-1134


 


	
 

	
 


	

If to
Holder:

	
 

	

Red
Beard Holdings, LLC.


Matthew
Gless


Telephone
No.: 949-300-8867


 

 


 






 


16.
Severability. If at
any time any provision of this Note shall be held by any court of
competent jurisdiction to be illegal, void or unenforceable, such
provision shall be of no force and effect, but the illegality or
unenforceability of such provision shall have no effect upon the
legality or enforceability of any other provision of this
Note.

 


17.
Assignment. The
provisions of this Note shall be binding upon and inure to the
benefit of each of the Company and Holder and their respective
successors and assigns, provided that the Company shall
not have the right to assign its rights and obligations hereunder
or any interest herein. This Note may be endorsed, assigned and
transferred in whole or in part by Holder to any other
Person.

 


18.
Remedies Cumulative;
Failure or Indulgence Not a Waiver. The remedies provided in
this Note shall be cumulative and in addition to all other remedies
available under this Note. No failure or delay on the part of
Holder in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or privilege preclude other or
further exercise thereof or of any other right, power or
privilege.

 


19.
Entire Agreement.
This Note contains the entire understanding of the parties with
respect to the subject matter hereof and supersedes all prior
agreements, understandings, discussions and representations, oral
or written, with respect to such matters, which the parties
acknowledge have been merged into this Note.

 


20.
Waiver of Notice.
To the extent permitted by law, the Company hereby waives demand,
notice, protest and all other demands and notices in connection
with the delivery, acceptance, performance, default or enforcement
of this Note.


 


 




 








 






 


IN
WITNESS WHEREOF, each of the undersigned has caused this Note to be
duly executed by its officers, thereunto duly authorized as of the
date first above written.


 


	
 

	
 

	
 


	


THE COMPANY:


	
 


	


True Drinks Holdings, INC.,


	
 


	
 

	
 


	

By:

	
 

	

/s/ Robert Van
Boerum





	

Name:

	
 

	

Robert
Van Boerum


	

Title:

	
 

	

Chief
Executive Officer





 


	
 


	


HOLDER:


	

 



Red Beard Holdings, LLC


	
 


	
 

	
 


	

By:

	
 

	

/s/ Vincent
Smith


	

Name:


Title:

	
 

	

Vincent
Smith


Manager