Exhibit 10.1


 



EXCHANGE AGREEMENT












THIS EXCHANGE AGREEMENT (the “Agreement”) is made as of the 31st day of May 2018, by and between, Sport Endurance, Inc., a Nevada corporation (the “Company”), and the investor signatory hereto (the “Investor”).







WHEREAS, the Investor has previously acquired from the Company secured convertible notes, issued by the Company, as set forth on Schedule I (the “Notes”).







WHEREAS, the November 2017 Note had been convertible at $0.50 per share with standard price protection for lower priced issuances and should have been reset to $0.03 per share as a result of the issuance of warrants in March 2018 with a $0.01 exercise price.







WHEREAS, the Company has authorized a new series of convertible preferred stock of the Company designated as Series B Convertible Preferred Stock, $0.001 par value, the terms of which are set forth in the Certificate of Designations for such series of Series B Preferred Stock (the “Certificate of Designations”) in the form attached hereto as Exhibit A.







WHEREAS, subject to the satisfaction of the conditions set forth herein, the Company and the Investor desire to enter into a transaction wherein the Company shall issue such aggregate number of shares of Series B Convertible Preferred Stock (the “Series B”) in exchange for each of the Notes as set forth on Schedule I (the “Exchange”).







NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:







1.          Exchange.  The closing of the Exchange will occur on or before May 31, 2018 (or such later date as the parties hereto may agree) following the satisfaction or waiver of the conditions set forth herein (such date, the “Closing Date”). On the Closing Date, subject to the terms and conditions of this Agreement, the Investor shall, and the Company shall, pursuant to Section 3(a)(9) of the Securities Act of 1933 (the “Securities Act”), exchange the Notes for the Series B. At the Closing (as defined below), the following transactions shall occur (such transactions in this Section 1, the “Exchange”):







1.1.          On the Closing Date, the Company shall issue the Series B to the Investor (or its designee). Promptly after the Closing Date the Company shall deliver a certificate evidencing the Series B to the Investor.  On the Closing Date, the Investor shall be deemed for all corporate purposes to have become the holder of record of the Series B and shall have the right to convert the Series B, irrespective of the date the Company delivers the certificate evidencing the Series B to the Investor.






















1.2.          Upon receipt of the Series B in accordance with Section 1.1, all of the Investor’s rights under the Notes shall be extinguished (including, without limitation, the rights to receive, as applicable, any premium, make-whole amount, accrued and unpaid interest or dividends thereon or any other shares of Common Stock with respect thereto (whether upon in connection with a Fundamental Transaction, event of default or otherwise)).







1.3.          The Company and the Investor shall execute and/or deliver such other documents and agreements as are customary and reasonably necessary to effectuate the Exchange, including UCC-3s.







1.4.          If the Closing has not occurred on or prior to May 31, 2018, the Investor shall have the right, by delivery of written notice to the Company to terminate this Agreement (such date, the “Termination Date”).  From the date hereof until the earlier of (x) the Closing Date (as defined below) and (y) the Termination Date, the Investor shall forbear from taking any actions with respect to the Notes not explicitly set forth herein, including, without limitation, conversions, exercises, redemptions, exchanges or delivery of written notice to the Company to require the conversion, exercise, redemption or exchange of any of the Notes.







1.5.          It shall be a condition to the obligation of the Investor on the one hand and Company on the other hand, to consummate the Exchange contemplated hereunder that the other party’s representations and warranties contained herein are true and correct on the Closing Date with the same effect as though made on such date, unless waived in writing by the party to whom such representations and warranties are made.







1.6.          At or before the Closing, the Investor shall deliver or cause to be delivered to Nason Yeager Gerson White & Lioce, P.A., as counsel to the Company, (i) the executed Agreement and (ii) other items required to effectuate the Exchange.







2.          Representations and Warranties of the Company.  The Company hereby represents and warrants to the Investor that:







2.1.          Organization, Good Standing and Qualification.  The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada.  The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a Material Adverse Effect (as defined below) on its business or properties.  As used in this Agreement, “Material Adverse Effect” means any material adverse effect on the business, properties, assets, liabilities, operations, results of operations, condition (financial or otherwise) or prospects of the Company and its Subsidiaries, if any, individually or taken as a whole, or on the transactions contemplated hereby or on the



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Exchange (as defined below) or by the agreements and instruments to be entered into (or entered into) in connection herewith or therewith, or on the authority or ability of the Company to perform its obligations under this Agreement or the Exchange.







2.2.          Authorization.  All corporate action on the part of the Company, its officers, directors and stockholders necessary for the authorization, execution and delivery of this Agreement and the other Exchange and the performance of all obligations of the Company hereunder and thereunder, and the authorization of the Exchange, the issuance (and reservation for issuance) of the Series B have been taken on or prior to the date hereof.  The Certificate of Designations has been validly filed with the Secretary of State of Nevada and, as of the date hereof and the Closing Date, remains in full force and effect.







2.3.          Valid Issuance of the Series B.  The Series B shares when issued and delivered in accordance with the terms of this Agreement, for the consideration expressed herein, and the Common Stock when issued in accordance with the terms of the Certificate of Designations, for the consideration expressed therein, will be duly and validly issued, fully paid and non-assessable.  Upon conversion of the Series B, the Common Stock shall be freely tradable and may be sold under Rule 144 subject to the Company having filed all applicable Form 10-Qs and Form 10-K. The Company agrees to take all actions, including, without limitation, the issuance by its legal counsel of any necessary legal opinions, necessary to issue unrestricted Common Stock upon appropriate notice of sale under Rule 144 under the Securities Act of 1933 in connection with which Common Stock issued upon conversion of Series B issued in exchange for any Note, the Common Stock will be freely tradable without restriction and not containing any restrictive legend without the need for any action by the Investor other than as required by Rule 144(i).  As of the Closing, the Company shall have reserved from its duly authorized capital stock not less than 125% of the maximum number of shares of Common Stock (assuming for purposes hereof that such Series B are convertible at the initial Conversion Price (as defined in the Certificate of Designations) and any such reservation shall not take into account any limitations on the conversion of the Preferred Shares set forth in the Certificate of Designations).







2.4.          Compliance With Laws.  The Company has not violated any law or any governmental regulation or requirement which violation has had or would reasonably be expected to have a Material Adverse Effect, and the Company has not received written notice of any such violation.







2.5.          Consents; Waivers.  No consent, waiver, approval or authority of any nature, or other formal action, by any Person, not already obtained, is required in connection with the execution and delivery of this Agreement by the Company or the consummation by the Company of the transactions provided for herein and therein.








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2.6.          Acknowledgment Regarding Investor’s Purchase of Series B.  The Company acknowledges and agrees that the Investor is acting solely in the capacity of arm’s length purchaser with respect to this Agreement and Exchange and the transactions contemplated hereby and thereby and that the Investor is not (i) an officer or director of the Company, (ii) an “affiliate” of the Company (as defined in Rule 144 promulgated under the Securities Act), or (iii) to the knowledge of the Company, a “beneficial owner” of more than 10% of the shares of Common Stock (as defined for purposes of Rule 13d-3 of the Securities Exchange Act of 1934 Act).  The Company further acknowledges that the Investor is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Exchange and the transactions contemplated hereby and thereby, and any advice given by the Investor or any of its representatives or agents in connection with the Exchange and the transactions contemplated hereby and thereby is merely incidental to the Investor’s acceptance of the Series B.  The Company further represents to the Investor that the Company’s decision to enter into the Exchange has been based solely on the independent evaluation by the Company and its representatives.







2.7.          Absence of Litigation.  To the knowledge of the Company, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company, threatened against or affecting the Company, the Common Stock, the Notes or any of the Company’s officers or directors in their capacities as such.







2.8.          Validity; Enforcement; No Conflicts.  This Agreement has been duly and validly authorized, executed and delivered on behalf of the Company and shall constitute the legal, valid and binding obligations of the Company enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.  The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the transactions contemplated hereby and thereby will not (i) result in a violation of the organizational documents of the Company or (ii) conflict with, or constitute a default (or an event which 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 of, any agreement, indenture or instrument to which the Company is a party or by which it is bound, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities or “blue sky” laws) applicable to the Company, except in the case of clause (ii) above, for such conflicts, defaults or rights which would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.







2.9.          Disclosure.  The Company confirms that neither it nor any other person acting on its behalf has provided the Investor or its agents or counsel with any information that



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constitutes or could reasonably be expected to constitute material, nonpublic information.  The Company understands and confirms that the Investor will rely on the foregoing representations in effecting transactions in securities of the Company.







3.          Representations and Warranties of the Investor.  The Investor hereby represents, warrants and covenants that:







3.1.          Authorization.  The Investor has full power and authority to enter into this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby and has taken all action necessary to authorize the execution and delivery of this Agreement, the performance of its obligations hereunder and the consummation of the transactions contemplated hereby.







3.2.          Accredited Investor Status; Investment Experience.  The Investor is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D.  The Investor can bear the economic risk of its investment in the Series B, and has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of an investment in the Series B.







3.3.          No Governmental Review.  The Investor understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Series B or the fairness or suitability of the investment in the Series B nor have such authorities passed upon or endorsed the merits of the offering of the Series B.







3.4.          Validity; Enforcement; No Conflicts.  This Agreement has been duly and validly authorized, executed and delivered on behalf of the Investor and shall constitute the legal, valid and binding obligations of the Investor enforceable against the Investor in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.







3.5.          Ownership of Notes.  The Investor owns and holds, beneficially and of record, the entire right, title, and interest in and to the Notes free and clear of all rights and liens (other than pledges or security interests (x) arising by operation of applicable securities laws and (y) that the Investor may have created in favor of a prime broker under and in accordance with its prime brokerage agreement with such broker).  The Investor has full power and authority to transfer and dispose of the Notes to the Company free and clear of any right or lien.  Other than the transactions contemplated by this Agreement, there is no outstanding, plan, pending proposal,



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or other right of any Person to acquire all or any part of the Notes or any shares of Common Stock issuable upon conversion of the Notes.







4.          Additional Covenants







4.1.          Disclosure.  The Company shall, on or before 8:30 a.m., New York City time, on the first business day after the date of this Agreement, issue a press release and Current Report on Form 8-K disclosing all material terms of the transactions contemplated hereby and attaching the form of this Agreement and the Certificate of Designations as an exhibit thereto (collectively with all exhibits attached thereto, the “8-K Filing”).  From and after the issuance of the 8-K Filing, which shall be publicly disclosed by no later than May 31, 2018, the Investor shall not be in possession of any material, nonpublic information received from the Company or any of its Subsidiaries or any of their respective officers, directors, employees, affiliates or agents, that is not disclosed in the 8-K Filing.  The Company shall not, and shall cause its officers, directors, employees, affiliates and agents, not to, provide the Investor with any material, nonpublic information regarding the Company from and after the filing of the 8-K Filing without the express written consent of the Investor.  To the extent that the Company delivers any material, non-public information to the Investor without the Investor’s express prior written consent, the Company hereby covenants and agrees that the Investor shall not have any duty of confidentiality to the Company, any of its subsidiaries or any of their respective officers, directors, employees, affiliates or agent with respect to, or a duty to the Company, any of its subsidiaries or any of their respective officers, directors, employees, affiliates or agent or not to trade on the basis of, such material, non-public information.  The Company shall not disclose the name of the Investor in any filing, announcement, release or otherwise, unless such disclosure is required by law or regulation.  In addition, effective upon the filing of the 8-K Filing, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its subsidiaries or any of their respective officers, directors, affiliates, employees or agents, on the one hand, and the Investor or any of its affiliates, on the other hand, shall terminate and be of no further force or effect.  The Company understands and confirms that the Investor will rely on the foregoing representations in effecting transactions in securities of the Company.







4.2.          Holding Period.  For the purposes of Rule 144 of the Securities Act, the Company acknowledges that (i) the holding period of the Notes may be tacked onto the holding period of the Series B and (ii) the holding period of the Series B may be tacked onto the holding period of the Common Stock, and the Company agrees not to take a position contrary to this Section 4.2.








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4.3.          Blue Sky.  The Company shall make all filings and reports relating to the Exchange required under applicable securities or “Blue Sky” laws of the states of the United States following the date hereof, if any.







4.4.          Fees and Expenses.  Except as otherwise set forth above, each party to this Agreement shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement.







5.          Miscellaneous







5.1.          Successors and Assigns.  Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the parties hereto and the respective successors and assigns of the parties.  Nothing in this Agreement, express or implied, is intended to confer upon any party, other than the parties hereto or their respective successors and assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.







5.2.          Governing Law; Jurisdiction; Jury Trial.  All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York.  Each party hereby irrevocably submits to the exclusive jurisdiction of the state or federal courts sitting in New York County, New York, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each of the parties hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.







5.3.          Notices.  All notices, offers, acceptance and any other acts under this Agreement (except payment) shall be in writing, and shall be sufficiently given if delivered to the addressees in person, by FedEx or similar overnight next business day delivery, or by email followed by overnight next business day delivery, to the address as provided for on the signature page to this agreement.







5.4.          Amendments and Waivers.  Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular



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instance and either retroactively or prospectively), only with the written consent of the Company and the Investor.







5.5.          Severability.  If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms so long as this Agreement as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties.  The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).







5.6.          Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.







5.7.          Survival.  The representations, warranties and covenants of the Company and the Investor contained herein shall survive the Closing and delivery of the Series B.












[SIGNATURES ON THE FOLLOWING PAGE]


















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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the date provided above.












SPORT ENDURANCE INC.






















By:                                                             


 Name: David LeLong


 Title: Chief Executive Officer







Address for Notices:







101 Hudson Street, 21st Floor          


Jersey City, New Jersey 07302


























IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the date provided above.







INVESTOR: