SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 
FORM 8-K
 
CURRENT REPORT
 
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): September 9, 2015
 
TRUE DRINKS HOLDINGS, INC.
(Exact name of Registrant as specified in its Charter)
 
         
Nevada
 
001-32420
 
84-1575085
(State or other jurisdiction
of incorporation)
 
(Commission File No.)
 
(IRS Employer
Identification No.)
         
     
18552 MacArthur Blvd., Suite 325, Irvine, California 92612
   
    (Address of principal executive offices)    
         
    (949) 203-3500    
    (Registrant’s Telephone Number)    
         
    Not Applicable    
    (Former name or address, if changed since last report)    
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
 
 

Item 1.01- Entry into a Material Definitive Agreement

See Item 2.03.

Item 2.03- Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant
 
On September 9, 2015, True Drinks Holdings, Inc. (the “ Company ”) began a private offering, to certain accredited investors (each an “ Investor ” and collectively, “ Investors ”), of: (i) senior subordinated secured promissory notes (the “ Secured Notes ”) in the aggregate principal amount of up to $2.5 million (the “ Maximum Offering Amount ”); and (ii) and five-year warrants to purchase that number of shares equal to 15% of the principal amount of the Secured Note purchased by each Investor (“ Warrants ”), divided by the ten-day average closing price of the Company’s common stock, par value $0.01 per share (“ Common Shares ”) (the “ Note Financing ”). Each Secured Note will accrue interest at a rate of 12% per annum, and will mature one year from the date of issuance.
 
In connection with the Note Financing, on September 9, 2015, the Company sold Secured Notes in the aggregate principal amount of $600,000 and Warrants to purchase an aggregate total of 473,684 shares of Common Stock. The Secured Notes were offered and sold in transactions exempt from registration under the Securities Act of 1933, as amended (“ Securities Act ”), in reliance on Section 4(2) thereof and Rule 506 of Regulation D thereunder. Each of the investors represented that it was an "accredited investor" as defined in Regulation D. The proceeds from the sale of the Secured Notes are expected to be used for general corporate purposes.
 
Item 3.02 - Unregistered Sales of Equity Securities.

See Item 2.03

Item 5.02- Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

Appointment of Robert Van Boerum as Chief Operations Officer

On September 11, 2015, the Company appointed Robert Van Boerum to serve as the Company’s Chief Operations Officer, and the Company and Mr. Van Boerum entered into a two-year employment agreement, a form of which is attached to this Current Report on Form 8-K as Exhibit 10.3 (the “ Van Boerum Employment Agreement ”).

Mr. Van Boerum has been an employee of the Company since 2012, and has handled a wide range of responsibilities, including marketing, operations, and information technology. Prior to his time with the Company, Mr. Van Boerum served Chief Information Officer for Regeneca International, Inc. from 2011 to 2012, and as Vice President of Corporate Strategy for AL International (JCOF) form 2009 to 2011. Mr. Van Boerum holds a B.S. in Management Information Systems form the University of Nevada- Las Vegas, and a MBA from San Diego State University.

Under the terms and conditions of the Van Boerum Employment Agreement, Mr. Van Boerum will receive a base salary of $14,583.33 per month. Mr. Van Boerum will also be eligible for an annual bonus equal to 30% of his salary, which bonus will be awarded at the sole discretion of the Company’s Compensation Committee, and is eligible to earn stock option compensation at the discretion of the Compensation Committee. The Van Boerum Employment Agreement may be terminated for “Cause”, if Mr. Van Boerum (a) is convicted of any fraud or embezzlement, (b) after written notice, willfully breaches or habitually neglects his duties and responsibilities, (c) commits acts of dishonesty, gross negligence or willful misconduct or (d) violates any law or regulation relating to the business operations of the Company that may have a material adverse effect on the Company. If the Company terminates Mr. Van Boerum’s employment for reasons other than for Cause, the Company shall pay a severance in an amount equal to six months of Mr. Van Boerum’s base salary.

 
 
 

Resignation of Kevin Sherman as the Company’s Chief Marketing Officer and appoint of Mr. Sherman to the Company’s Board of Directors

On September 9, 2015, Kevin Sherman tendered his resignation as the Company’s Chief Marketing Officer, and on September 13, 2015, the Company appointed Kevin Sherman to serve as a Director on the Company’s Board of Directors.

Mr. Sherman served as the Company’s Chief Marketing Officer from October 2012 until September 2015, managing the brand development of AquaBall™ Naturally Flavored Water. Prior to joining True Drinks, Mr. Sherman was the Vice President Strategy and Network Development and President of Retail for Bazi, Inc. He was instrumental in the development of Bazi’s All-Natural formula and spearheaded the concept of all-natural energy. Prior to Bazi, Mr. Sherman served as the Senior Manager of Network Development of Product Partners LLC from May 2008 to May 2009, chief operating officer of Hand & Associates from January 2008 to May 2008, and as the director of development and principal of Holy Innocents School from August 2007 to December 2007. Mr. Sherman also served as the principal of Saints Peter and Paul School from January 2004 to August 2007.

Except as otherwise disclosed herein, there are no related party transactions between the Company and Mr. Sherman that would require disclosure under Item 404(a) of Regulation S-K, or arrangements or understandings in connection with Mr. Sherman’s appointment to the Board.
 
Item 9.01- Financial Statements and Exhibits

See Exhibit Index.

Disclaimer

The foregoing descriptions of the Secured Notes, Warrants and Van Boerum Employment Agreement do not purport to be complete, and are qualified in their entirety by reference to the form of Secured Note, form of Warrant and full text of the Van Boerum Employment Agreement, attached hereto as Exhibits 10.1, 10.2 and 10.3 respectively, and are incorporated by reference herein.

 
 
 

SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

       
   
TRUE DRINKS HOLDINGS, INC.
       
Date: September 11, 2015
 
By:
 /s/ Daniel Kerker
     
Daniel Kerker
     
Chief Financial Officer
       

 
 
 
 
EXHIBIT INDEX

Exhibit Number
 
Description
10.1
 
Form of Senior Subordinated Secured Promissory Note
10.2
 
Form of Warrant
10.3
 
Employment Agreement, by and between the Company and Robert Van Boerum, dated September 9, 2015


Exhibit 10.1

 
SECURED PROMISSORY NOTE
 

[$____________] September [__], 2015

For value received, True Drinks Holdings, Inc., a Nevada corporation (the “ Company ”), hereby promises to pay to the order of [___________________] or its registered assigns (the “ Holder ”), at the address of [________________________________________________], the principal sum of [$__________] on the dates specified herein, with interest as specified herein.
 
This Note is subject to the following additional provisions, terms and conditions:
 
ARTICLE 1.   DEFINITIONS .
 
Section 1.1.   Certain Definitions .
 
“ Applicable Rate ” means 12% per annum.
 
“ Bankruptcy Law ” means Title 11, United State Code or any similar federal or state law for the relief of debtors.
 
“ Business Day ” means any day that is not a Saturday or Sunday or a day on which banks are required or permitted to be closed in New York, New York.
 
“ Collateral ” has the meaning set forth in Section 2.5 .
 
“ Company ” has the meaning given to such term in the first paragraph of this Note.
 
“ Default Rate ” means 18% per annum.
 
“ Distribution Event ” means any insolvency, bankruptcy, receivership, liquidation, reorganization or similar proceeding (whether voluntary or involuntary) relating to the Company or its property, or any proceeding for voluntary or involuntary liquidation, dissolution or other winding up of the Company, whether or not involving insolvency or bankruptcy.
 
“ Holder ” has the meaning given to such term in the first paragraph of this Note.
 
“ Inventory ” has the meaning set forth in the Uniform Commercial Code of Nevada.
 
“ Maturity Date ” means September [__], 2016.
 
“ Maximum Rate ” means the maximum nonusurious interest rate permitted under applicable law.
 
“ Note ” means this Secured Promissory Note made by the Company payable to the Holder, together with all amendments and supplements hereto, all substitutions and replacements hereof, and all renewals, extensions, increases, restatements, modifications, rearrangements and waivers hereof from time to time.

 
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“ Person ” means any individual, corporation, partnership, joint venture, association, limited liability company, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.
 
“ Proceeds ” has the meaning set forth in the Uniform Commercial Code in the State of Nevada.
 
“ Supporting Obligations ” has the meaning set forth in the Uniform Commercial Code in the State of Nevada.
 
“ Transfer ” has the meaning set forth in Section 4.2(b) .
 
ARTICLE 2.   BASIC TERMS .
 
Section 2.1.   Principal .
 
(a)            Scheduled Repayment .  To the extent not previously paid, the entire unpaid principal balance of this Note shall be due and payable on the Maturity Date.
 
(b)             Prepayment.                        Upon five days’ prior written notice, the Company may make voluntary prepayments in whole or in part of the unpaid principal hereunder from time to time without penalty or premium.
 
Section 2.2.   Interest .
 
(a)           The Company agrees to pay interest in respect of the unpaid principal amount of this Note at a rate per annum equal to the lesser of the Applicable Rate or the Maximum Rate.  Upon the occurrence and during the continuance of an Event of Default, which has not been cured, the Company agrees to pay during the period of the continuance of such Event of Default interest on the unpaid principal amount of this Note at a rate per annum equal to the lesser of the Default Rate and the Maximum Rate.
 
(b)           All interest on the unpaid principal balance of this Note shall be due and payable on a quarterly basis with all remaining interest due on the Maturity Date or, if earlier, the date this Note is prepaid in full. The interest may be paid in cash or shares of the Company’s common stock at the election of the Company. The share price shall be determined by the average closing price of the stock over the five days leading to the end of the respective quarter.
 
(c)           Interest shall be calculated on the basis of a 365-day year.
 
Section 2.3.   Payments in General .  All payments of principal and interest on this Note shall be in such coin or currency of the United States of America as at the time of payment shall be legal tender for payment of public and private debts.  If any payment (whether of principal, interest or otherwise) on this Note is due on a day which is not a Business Day, such payment shall be due and payable on the next succeeding Business Day.  All payments under this Note shall be made by wire transfer or check in accordance with Holder’s instructions.
 
 
-2-
 
 
Section 2.4.   Surrender of Note on Transfer .  This Note shall, as a condition to transfer, be surrendered to the Company in exchange for a new Note in a principal amount equal to the principal amount remaining unpaid on the surrendered Note, and with the same terms and conditions as this Note.  In case the entire principal amount of this Note is prepaid, this Note shall be surrendered to the Company for cancellation and shall not be reissued.
 
Section 2.5.   Security .  To secure the indebtedness evidenced by this Note, all interest hereon, and all other fees and expenses related to the loan evidenced by this Note, including all costs and expenses incurred by Holder in the collection of the foregoing, the Company hereby grants to Holder a security interest in all of the following property (collectively referred to herein as, the “ Collateral ”):
 
(a)           all inventory (the “ Inventory ”);
 
(b)           all books and records pertaining to the foregoing; and
 
(c)           to the extent not otherwise included, all Proceeds and products of any and all of the foregoing, including insurance proceeds, all Supporting Obligations in respect of any of the foregoing and all collateral security and guarantees given by any Person with respect to any of the foregoing.
 
Section 2.6.   Covenants .
 
(a)           The Company agrees to pay all obligations when due and perform fully all of the Company’s duties under and in connection with this Note.
 
(b)           The Company agrees to (i) take all actions reasonably requested by Holder to perfect for Holder a first priority security interest in the Inventory, and (ii) refrain from encumbering, or, other than in the ordinary course of business consistent with past practice, selling any of the Collateral, or permitting the Collateral or any interest in the Collateral to be encumbered, or seized, or, other than in the ordinary course of business consistent with past practice, transferred or otherwise disposed of.
 
ARTICLE 3.   DEFAULT AND REMEDIES .
 
Section 3.1.   Events of Default .  An “ Event of Default ” occurs if:
 
(a)           the Company defaults in the payment of principal or interest on the Note when the same becomes due and payable;
 
(b)           the Company defaults in the punctual performance of any other obligation, covenant, term or provision contained in this Note; or
 
 
-3-
 
 
(c)           the Company (i) commences a voluntary case concerning itself under any Bankruptcy Law now or hereafter in effect, or any successor thereof; (ii) is the object of an involuntary case under any Bankruptcy Law; or (iii) commences any Distribution Event or is the object of an involuntary Distribution Event; or
 
(d)           the Company is sold to a third party; or
 
(e)           there is a death of one of the principals (CEO, CFO or CMO) during the term of the Note.
 
Section 3.2.   Remedies .
 
(a)           If an Event of Default (other than an Event of Default under Section 3.1(c)) shall occur, the Holder may declare by notice in writing given to the Company, the entire unpaid principal amount of the Note, together with accrued but unpaid interest thereon, to be immediately due and payable, in which case the Note shall become immediately due and payable, both as to principal and interest, without presentment, demand, default, notice of intent to accelerate and notice of such acceleration, protest or notice of any kind, all of which are hereby expressly waived, anything herein or elsewhere to the contrary notwithstanding.
 
(b)           If an Event of Default under Section 3.1(c) shall occur, the entire unpaid principal amount of the Note, together with accrued but unpaid interest thereon, shall automatically become immediately due and payable, both as to principal and interest, without presentment, demand, default, notice of intent to accelerate and notice of such acceleration, protest or notice of any kind, all of which are hereby expressly waived, anything herein or elsewhere to the contrary notwithstanding.
 
(c)           If any Event of Default shall have occurred, the Holder may proceed to protect and enforce its rights either by suit in equity or by action at law, or both, and take any of the following actions (but it is expressly agreed and acknowledged that the Holder is under no duty to take any such actions):
 
(i)           require the Company to give possession or control of the Collateral to the Holder;
 
(ii)           take control of Proceeds referred to in Section 2.5(c) , and use any such cash Proceeds to reduce any part of the indebtedness evidenced by this Note, all interest hereon or related fees and expenses;
 
(iii)           sell, or instruct any agent or broker to sell, all or any part of the Collateral in a public or private sale and apply all proceeds to the payment or other satisfaction of the indebtedness evidenced by this Note, all interest hereon or related fees and expenses in such order and manner as the Holder shall, in its discretion, choose;
 
 
-4-
 
 
(iv)           take any action the Company is required to take or any other necessary or desirable action to obtain, preserve, and enforce this Note, and to maintain and preserve the Collateral, without notice to the Company;
 
(v)           transfer any of the Collateral, or evidence thereof, into the Holder’s own name or that of its nominee and receive the Proceeds therefrom and hold the same as security for the indebtedness evidenced by this Note, interest hereon and related fees and expenses, or apply the same thereon;
 
(vi)           take control of funds generated by the Collateral, and use such funds to reduce any part of the indebtedness evidenced by this Note, interest hereon or related fees and expenses; and
 
(vii)           exercise all other rights that a secured creditor may exercise with respect to any of the Collateral.
 
ARTICLE 4.   MISCELLANEOUS .
 
Section 4.1.   Amendment .  This Note may be amended, modified, superseded or cancelled, and any of the terms, covenants, representations, warranties or conditions hereof and thereof may be waived, only by a written instrument executed by the Holder and the Company.
 
Section 4.2.   Successors and Assigns .
 
(a)           The rights and obligations of the Company and the Holder under this Note shall be binding upon, and inure to the benefit of, and be enforceable by, the Company and the Holder, and their respective permitted successors and assigns.
 
(b)           The Company may not sell, assign (by operation of law or otherwise), transfer, pledge, grant a security interest in or delegate (collectively “ Transfer ”) any of its rights or obligations under this Note unless the Holder has granted its prior written consent and any such purported Transfer by the Company without obtaining such prior written consent shall be null and void ab initio .
 
Section 4.3.   Defenses .  Except as expressly set forth herein, the obligations of the Company under this Note shall not be subject to reduction, limitation, impairment, termination, defense, set-off, counterclaim or recoupment for any reason.
 
Section 4.4.   Replacement of Note .  Upon receipt by the Company of evidence, satisfactory to it, of the loss, theft, destruction, or mutilation of this Note and (in the cases of loss, theft or destruction) of any indemnity reasonably satisfactory to it, and upon surrender and cancellation of this Note, if mutilated, the Company will deliver a new Note of like tenor in lieu of this Note.  Any Note delivered in accordance with the provisions of this Section 4.4 shall be dated as of the date of this Note.

 
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Section 4.5.   Attorneys’ and Collection Fees .  Each party will bear its own fees and expenses incurred in connection with the preparation, execution and performance of this Note and the transactions contemplated hereby, including all fees and expenses of agents, representatives, financial advisors, legal counsel and accountants.  Notwithstanding the foregoing, in the event this Note shall not be paid when due and payable (whether upon demand, by acceleration or otherwise), the Company shall be liable for and shall pay to Holder all collection costs and expenses incurred by Holder, including reasonable attorney’s fees.
 
Section 4.6.   Governing Law .  This Note and the validity and enforceability hereof shall be governed by and construed and interpreted in accordance with the laws of the State of Nevada.
 
Section 4.7.   Waivers .  Except as may be otherwise provided herein, the makers, signers, sureties, guarantors and endorsers of this Note severally waive demand, presentment, notice of dishonor, notice of intent to demand or accelerate payment hereof, notice of acceleration, diligence in collecting, grace, notice, and protest, and agree to one or more extensions for any period or periods of time and partial payments, before or after maturity, without prejudice to the Holder.
 
Section 4.8.   No Waiver by Holder .  No failure or delay on the part of the Holder in exercising any right, power or privilege hereunder and no course of dealing between the Company and the Holder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.
 
Section 4.9.   No Impairment .  The Company will not, by amendment of its certificate of incorporation or through any reorganization, recapitalization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at times in good faith assist in the carrying out of all the provisions of this Note.
 
Section 4.10.   Limitation on Interest .  Notwithstanding any other provision of this Note, interest on the indebtedness evidenced by this Note is expressly limited so that in no contingency or event whatsoever, whether by acceleration of the maturity of this Note or otherwise, shall the interest contracted for, charged or received by the Holder exceed the maximum amount permissible under applicable law.  If from any circumstances whatsoever fulfillment of any provisions of this Note or of any other document evidencing, securing or pertaining to the indebtedness evidenced hereby, at the time performance of such provision shall be due, shall involve transcending the limit of validity prescribed by law, then, ipso facto , the obligation to be fulfilled shall be reduced to the limit of such validity, and if from any such circumstances the Holder shall ever receive anything of value as interest or deemed interest by applicable law under this Note or any other document evidencing, securing or pertaining to the indebtedness evidenced hereby or otherwise an amount that would exceed the highest lawful rate, such amount that would be excessive interest shall be applied to the reduction of the principal amount owing under this Note or on account of any other indebtedness of the Company to the Holder, and not to the payment of interest, or if such excessive interest exceeds the unpaid balance of principal of this Note and such other indebtedness, such excess shall be refunded to the Company.  In determining whether or not the interest paid or payable with respect to any indebtedness of the Company to the Holder, under any specific contingency, exceeds the highest lawful rate, the Company and the Holder shall, to the maximum extent permitted by applicable law, (a) characterize any non-principal payment as an expense, fee or premium rather than as interest, (b) exclude voluntary prepayments and the effects thereof, (c) amortize, prorate, allocate and spread the total amount of interest throughout the term of such indebtedness so that the actual rate of interest on account of such indebtedness does not exceed the maximum amount permitted by applicable law, and/or (d) allocate interest between portions of such indebtedness, to the end that no such portion shall bear interest at a rate greater than that permitted by applicable law.  The terms and provisions of this paragraph shall control and supersede every other conflicting provision of this Note and all other agreements between the Company and the Holder.
 
Section 4.11.   Severability . If one or more provisions of this Note are held to be unenforceable under applicable law, such provision(s) shall be excluded from this Note and the balance of this Note shall be interpreted as if such provision(s) were so excluded and shall be enforceable in accordance with its terms.
 
Section 4.12.   Construction . This Note has been freely and fairly negotiated among the parties.  If an ambiguity or question of intent or interpretation arises, this Note will be construed as if drafted jointly by the parties and no presumption or burden of proof will arise favoring or disfavoring any party because of the authorship of any provision of this Note.  Unless the context requires otherwise, any agreements, documents, instruments or laws defined or referred to in this Note will be deemed to mean or refer to such agreements, documents, instruments or laws as from time to time amended, modified or supplemented, including (a) in the case of agreements, documents or instruments, by waiver or consent and (b) in the case of laws, by succession of comparable successor statutes.  All references in this Note to any particular law will be deemed to refer also to any rules and regulations promulgated under that law.  The words “include, “includes” and “including will be deemed to be followed by “without limitation.”  The word “or” is used in the inclusive sense of “and/or” unless the context requires otherwise.  References to a Person are also to its permitted successors and assigns.  Pronouns in masculine, feminine and neuter genders will be construed to include any other gender, and words in the singular form will be construed to include the plural and vice versa, unless the context requires otherwise.  When a reference in this Note is made to an Article, Section, Exhibit, Annex or Schedule, such reference is to an Article or Section of, or Exhibit, Annex or Schedule to, this Note unless otherwise indicated.  The words “this Note,” “herein,” “hereof,” “hereby,” “hereunder” and words of similar import refer to this Note as a whole and not to any particular subdivision unless expressly so limited.
 
 
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Section 4.13.   Right of Setoff .  Notwithstanding the terms of this Note or any other agreement or document, the Holder and each of its affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, and without prior notice to the Company, any such notice being expressly waived by the Company, to set off and appropriate and apply any and all obligations and indebtedness (in whatever currency) at any time owing by the Holder or such affiliate to or for the credit or the account of the Company against any and all of the obligations of the Company now or hereafter existing under this Note to the Holder or its affiliates, whether direct or indirect, absolute or contingent, matured or unmatured, and irrespective of whether or not the Holder or its affiliates shall have made any demand under this Note and although such obligations of the Company are owed to a subsidiary, office or affiliate of the Holder different from the subsidiary, office or affiliate obligated on such obligations or indebtedness.  The rights of the Holder and its affiliates under this Section 4.13 are in addition to other rights and remedies (including other rights of set-off) that the Holder or such affiliates may have.  The Holder agrees to notify the Company promptly after any such set off and appropriation and application; provided , however , that the failure to give such notice shall not affect the validity of such set off and appropriation and application.
 

 
[Signature Page Follows]
 

 
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EXECUTED as of the date first written above.
 
    TRUE DRINKS HOLDINGS, INC.
     
  By:
________________________________
Name:  Dan Kerker
Title: CFO

The Holder hereby accepts this Note this [____] day of September, 2015.
 
       
    Entity Name  
 
 
By:
 
________________________________
Name:                      
Title:                         
 
 
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Exhibit 10.2
 
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.: [______________]
Number of Shares of Common Stock: [_______________]
Date of Issuance: September [___], 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 are hereby acknowledged, [­­­­­­­­­­­­­­­­­­­­­___________________], the registered holder hereof or its permitted assigns (the “ Holder ”), is entitled, subject to the terms set forth below, to purchase from the Company, at the Exercise Price (as defined below) then in effect, upon surrender of this Warrant to Purchase Common Stock (including any Warrants to Purchase Common Stock issued in exchange, transfer or replacement hereof, the “ Warrant ”), at any time or times on or after the Issuance Date (the “ Exercisability Date ”), but not after 11:59 p.m., Pacific Standard Time, on the Expiration Date (as defined below), [___________] ([________________________________________]) fully paid nonassessable shares of Common Stock (as defined below)   (the “ Warrant Shares ”).  Except as otherwise defined herein, capitalized terms in this Warrant shall have the meanings set forth in Section 14 .
 
1.       EXERCISE OF WARRANT.
 
(a)       Mechanics of Exercise .  Subject to the terms and conditions hereof, this Warrant may be exercised by the Holder on any day on or after the Exercisability 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(c) of this Warrant, payment to the Company of an amount equal to the applicable Exercise Price multiplied by the number of Warrant Shares as to which this Warrant is being exercised (the “ Aggregate Exercise Price ”) in cash or wire transfer of immediately available funds (a “ Cash Exercise ”) (the items under (i) and (ii) above, the “ Exercise Delivery Documents ”).  The Holder shall not be required to surrender this Warrant in order to effect an 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.
 
(b)       Exercise Price .  For purposes of this Warrant, “ Exercise Price ” means [$_____], subject to adjustment as provided herein.
 
 
 
 

(c)       Cashless Exercise .  In the event that the underlying common shares have not been registered on a registration statement with the SEC, and 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 Aggregate 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.

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 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 Subscription Date subdivides (by any stock split, stock dividend, recapitalization, reorganization, scheme, arrangement or otherwise) one or more classes of 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 Subscription Date combines (by any stock split, stock dividend, recapitalization, reorganization, scheme, arrangement or otherwise) one or more classes of 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.
 
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 and the other Transaction Documents in accordance with the provisions of this Section 3(a), pursuant to a written agreement to deliver to each holder of the Warrants in exchange for such Warrants a security 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, including, without limitation, providing that the successor security shall be exercisable for a corresponding number of shares of capital stock equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and an adjusted exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and (ii) the Successor Entity (including its Parent Entity) 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 substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant referring to the “Company” shall refer instead 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, issue 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 exercise).
 
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 entitled to vote or receive dividends or be deemed the holder of share capital of the Company 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 notice 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)       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(c)) representing the right to purchase the Warrant Shares then underlying this Warrant.
 
(b)       Exchangeable for Multiple Warrants .  This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company, for a new Warrant or Warrants (in accordance with Section 6(c)) 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; provided, however, that no Warrants for fractional shares of Common Stock shall be given.  Notwithstanding anything to the contrary herein, in no event shall the original Warrant be subdivided into more than three (3) separate Warrants and such new Warrants shall not be further subdivided.
 
(c)       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 a new Warrant being issued pursuant to Section 6(b), the Warrant Shares designated by the Holder 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 is the same as the Issuance Date, and (iv) shall have the same rights and conditions as this Warrant.
 
 
 
 
 
7.       NOTICES .
 
(a)      Whenever the Exercise Price or the number of shares of Common Stock 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 Exercise Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.
 
(b)      If during the term during which this Warrant may be exercised (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 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.
 
8.       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 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.
 
9.       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.
 
 
 
 
 
10.          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.
 
11.               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 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 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 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 Business Days from the time it receives the disputed determinations or calculations.  The prevailing party in any dispute resolved pursuant to this Section 11 shall be entitled to the full amount of all reasonable expenses, 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.
 
12.            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.
 
13.            NON-TRANSFERABILITY .  Subject to applicable laws and the restrictions on transfer set forth in the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights) are not transferable.
 
14.       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 March 9, 2018.
 
(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)      “ 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 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.
 
(k)      “ 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.
 
(l)      “ Principal Market ” means the OTCQB Marketplace.
 
(m)           " Required Holders " means the Holders of at least a majority of the outstanding
 
 
 
 
 
Warrants.
 
(n)      “ 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.
 
(o)      “ Trading Day ” means any day on which the Common Stock are 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 are then traded; provided that “Trading Day” shall not include any day on which the Common Stock are scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock are 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 4:00:00 p.m., New York time).
 
 [Signature Page Follows]

 
 
 

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


 
TRUE DRINKS HOLDINGS, INC.
 
 
By:  ____________________
Name:           Dan Kerker
Title: Chief Financial Officer

 
 
 
 
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 _________________ of the 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 if 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

 
____________
a “ 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 Aggregate 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:


Exhbit 10.3

EMPLOYMENT AGREEMENT
 
This EMPLOYMENT AGREEMENT (“Agreement”), dated as of September 9, 2015 (the “Effective Date”), is made by and between True Drinks Inc., a Delaware corporation, located at 18552 MacArthur Blvd., Irvine, California 92612 (the “Company”), and Robert Van Boerum, whose address is Rancho Santa Margarita, CA. (“Employee”), based upon the following:
 
RECITALS 

 
WHEREAS, the Company wishes to retain the services of Employee, and Employee wishes to render services to the Company, as its Chief Operating Officer; and
 
WHEREAS, the Company and Employee wish to set forth in this Agreement the duties and responsibilities that Employee has agreed to undertake on behalf of the Company.
 
THEREFORE, in consideration of the foregoing and of the mutual promises contained in this Agreement, the Company and Employee (who are sometimes individually referred to as a “party” and collectively referred to as the “Parties”) agree as follows:
 
AGREEMENT
 
1. TERM.
 
The term of Employee’s employment under this Agreement shall commence effective as of the Effective Date and shall continue for a period of two years (the “Term”), unless earlier terminated as herein provided or by operation of law. Thereafter, this Agreement and the Term shall be extended automatically for successive one year periods unless terminated in accordance with the terms hereof or unless either party hereto, not less than one month before the commencement of any such one year extension period, provides notice of such termination to the other party hereto. For all purposes of this Agreement, the Term shall include and be deemed to include all extensions of this Agreement. This Agreement may be terminated prior to the expiration of the Term by either party, without limitation, by the provision of notice of termination of this Agreement to the other party thirty (30) days in advance, except as permitted upon termination for “Cause” as set forth in Section 8. The notice period does not commence until actually received by the other party.
 
2. GENERAL DUTIES.
 
Employee shall report to the Company’s Chief Executive Officer or as otherwise instructed by the Company’s board of directors (the “Board”) and shall render his services and assert his best efforts on behalf of the Company, devoting full time in the performance of his duties consistent with the needs of the Company and the practices of the industry. Employee shall perform his duties diligently and competently. The Company recognizes that the Employee has positions on other Community based Advisory Boards and on occasion may be contracted as a Consultant by other third parties. The Company accepts this as a reality and, provided the Employee renders his service on a full time basis to Company, the Company accepts this on a “time to time” basis during the period of this Agreement. Employee shall be primarily responsible for the duties set forth on Exhibit A attached hereto. Employee shall do and perform all services, acts, or things necessary or advisable to discharge his duties under this Agreement, and such other duties as are commonly performed by an employee of his rank or which may, from time to time, be prescribed by the Company through its managers, the Board, and/or the Company’s executives. Furthermore, Employee agrees to cooperate with and work to the best of his ability with the Company’s management team, the officers and other employees, to continually improve the Company’s reputation in its industry for quality products and performance.
 
 
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3. COMPENSATION.
 
(a) Base Salary. So long as Employee’s employment continues hereunder, the Company shall pay to Employee a monthly base salary in the amounts set forth below (the “Base Salary”). The Base Salary shall be $14,583.33 per month. At the beginning of each successive 12 month period over the term of this Agreement thereafter, this annual salary shall be increased over the next 12 months by a sum equal to or greater than 7.5% of the annual salary for the preceding 12 month period, provided that the Board of Directors approves such increase. Compensation reviews for Employee will be at least annually.
 
The Base Salary shall be paid to Employee in accordance with the periodic payroll practices of the Company for employees.
 
(b) Bonus Plan. Employee shall be eligible for a bonus equal of up to 30% of the Employee’s Base Salary, in the sole discretion of the Compensation Committee of the Board.  Such bonus shall be based on the performance of Employee, as determined by the Chief Executive Officer, and the achievement of certain operating and other objectives established by the Compensation Committee. Any annual bonus payable hereunder shall be paid within 45 days after the end of the calendar year in which the bonus is earned, or as soon thereafter as reasonably practicable.
 
                                (c) Stock Compensation. The Employee shall be eligible to receive equity incentive awards, in the form of stock options, restricted stock or such other form of equity or equity-based incentive compensation as determined by the Compensation Committee, which shall be determined in good faith by the Compensation Committee in its sole discretion consistent with the Company’s equity incentive plan(s) then in effect.   All equity incentive grants shall be subject to the vesting schedule as defined within the Company’s equity incentive plan(s) in effect.  Notwithstanding the foregoing, any unvested equity incentive awards shall vest immediately upon a change of control of the Company.  For the purposes of this Agreement, a “change in control” shall mean the acquisition by any individual, entity, or group of beneficial ownership of 50% or more of the combined voting power of the then outstanding voting securities of the Company, or any parent of the Company; provided, however , a change in control shall not occur in the event the change in control results from the acquisition of control by an existing shareholder of the Company.
 
                                (e) Indemnification Insurance; Indemnification. If during any period of the Term, Employee is a director or officer of the Company, the Company shall provide Employee with director’s and officer’s liability insurance to the extent that such insurance is provided to other directors and officers of the Company and is available at commercially reasonable premiums. Such insurance shall be in such form, and shall provide for such coverage and deductibles, as shall be commercially reasonable and standard for companies in businesses and circumstances similar to those of the Company.
 
(f) Participation In Employee Benefit Plans. Employee shall have the same rights, privileges, benefits and opportunities to participate in any of the Company’s employee benefit plans (health, dental and vision) which may now or hereafter be in effect on a general basis for executive officers or employees of the Company. The Company may discontinue any benefit plans and otherwise amend and change the type and quantity of benefits it provides in its sole discretion, provided that the Company continues to provide to Employee any benefits specifically set forth herein. In the event Employee receives payments from a disability plan maintained by the Company, the Company shall have the right to offset such payments against Employee’s Base Salary and any bonuses otherwise payable to Employee during the period for which payments are made by such disability plan.
 
4. REIMBURSEMENT OF BUSINESS EXPENSES.
 
The Company shall promptly reimburse Employee for all reasonable business expenses incurred by Employee in connection with the business of the Company. However, each such expenditure shall be reimbursable only if Employee furnishes to the Company adequate records and other documentary evidence required by federal and state statutes and regulations issued by the appropriate taxing authorities for the substantiation of each such expenditure as an income tax deduction.
 
 
-2-
 
 
5. ANNUAL VACATION. 
 Employee shall be entitled to 15 days vacation time for each calendar year during the Term of this Agreement . 

 
6. INDEMNIFICATION OF LOSSES.
 
The Company shall indemnify and hold harmless Employee from any and all liability arising from Employee’s actions taken on the Company’s behalf and within Employee’s scope of duties and authority, so long as such actions were taken by Employee in good faith and in furtherance of the Company’s business. The Company shall indemnify and hold Employee harmless to the full extent of the law from any and all claims, losses and expenses sustained by Employee as a result of any action taken by him to discharge his duties under this Agreement, and the Company shall defend Employee, at the Company’s expense, in connection with any and all claims by shareholders or third parties which are based upon actions taken by Employee to discharge his duties under this Agreement.
 
7. PERSONAL CONDUCT.
 
Employee agrees to promptly and faithfully comply with all present and future policies, requirements, directions, and reasonable requests of Company executives and/or management and any rules, regulations, or other policies of the Company in connection with the Company’s business and Employee’s duties hereunder.
 
8. TERMINATION BY THE COMPANY.
 
Notwithstanding any provision hereunder, the Company may terminate Employee’s employment immediately if such termination is for “Cause.” For purposes of this Agreement, “Cause” shall mean:
 
(a) Employee is convicted of any fraud or embezzlement against the Company; or
 
(b) After written notice and an opportunity to cure, Employee willfully breaches or habitually neglects the duties and responsibilities which he is required to perform under the terms of this Agreement; or
 
(c) Employee commits such acts of dishonesty, fraud, misrepresentation, gross negligence or willful misconduct which results in material harm to the Company or its business; or
 
(d) Employee violates any law, rule or regulation applicable to the Company or Employee relating to the business operations of the Company that may have a material adverse effect upon the Company’s business, operations or condition (financial or otherwise).
 
The Company may terminate this Agreement for Cause immediately upon written notice of termination to Employee; provided, however , if the Company terminates this Agreement due to Employee’s willful breach or habitual neglect of the duties he is required to perform, Employee shall be entitled to a period of thirty (30) days from the date of the initial written notice of termination to cure said breach. Except as otherwise set forth in this Section 8, upon any termination for “Cause,” the obligations of Employee and the Company under this Agreement shall immediately cease. Such termination shall be without prejudice to any other remedy to which the Company may be entitled either at law, in equity, or under this Agreement.
 
9. COMPENSATION UPON TERMINATION
 
(a) Upon Termination For Cause. In the event the Company terminates Employee’s employment for Cause in accordance with Section 8, Employee shall receive any payments of Base Salary earned through and including the date of termination (the “For Cause Payment”).

 
-3-
 
 
The For Cause Payment shall constitute Employee’s sole right and exclusive remedy in the event of such termination of Employee’s employment, and upon payment by the Company of the For Cause Payment, all other rights or remedies otherwise available shall cease immediately, and the Company shall have no further obligations to Employee under this Agreement, except that Employee shall have the right to exercise all benefits that have vested as of the date of termination to which Employee is entitled under any compensation or employee benefit plan of the Company in accordance with the terms and provisions of such compensation or employee benefit plan, all other documents and agreements that give rise to or otherwise govern such vested benefits and all applicable laws and regulations. Employee shall be entitled to receive such For Cause Payment only after Employee executes a waiver and general release in favor of the Company (but not Employee).
 
(b) Upon Termination Other Than For Cause. In the event Employee’s employment is terminated other than pursuant to Section 8, in exchange for execution of a general release and California Civil Code Section 1542 waiver (a copy of which is attached hereto as Exhibit B), the Company shall pay Employee an amount equal to six months of Employee’s Base Salary in effect on the date of termination, the “Without Cause Severance Payment”), plus reimbursement for business expenses incurred by Employee up to the date of termination. The Without Cause Severance Payment will be paid within sixty (60) days after the Company’s receipt of the executed general release and California Civil Code Section 1542 waiver. The Without Cause Severance Payment is in addition to payment of Base Salary earned and payment of any unused and accrued vacation through and including the date of termination. In addition, in the event Employee’s employment is terminated other than pursuant to Section 8, all equity incentive awards held by Employee that are subject to vesting shall automatically upon such termination be fully vested and shall remain exercisable, in the case of stock options, in accordance with their terms for a period of twelve (12) months following the date of such termination (notwithstanding any term or provision of any document (e.g., a stock option agreement) to the contrary).
 
The Without Cause Severance Payment shall constitute Employee’s sole right and exclusive remedy in the event of such termination of Employee’s employment, and upon payment by the Company of the Without Cause Severance Payment, all other rights or remedies otherwise available shall cease immediately, and the Company shall have no further obligations to Employee under this Agreement, except that Employee shall have the right to exercise all benefits that have vested as of the date of termination to which Employee is entitled under any compensation or employee benefit plan of the Company in accordance with the terms and provisions of such compensation or employee benefit plan, all other documents and agreements that give rise to or otherwise govern such vested benefits and all applicable laws and regulations.
 
(c) Exclusivity of Payments. Upon termination of Employee’s employment under this Agreement, Employee shall not be entitled to any severance payment or severance benefit from the Company other than the payments and benefits provided in this Section 9.
 
(d) Withholding of Taxes; Tax Reporting. The Company may withhold from any amount payable under this Agreement all such federal, state, city and other taxes and may file with appropriate governmental authorities all such information, returns or other reports with respect to the tax consequences of any amount payable under this Agreement as may in the Company’s reasonable judgment be required.
 
 
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10. PROPRIETARY INFORMATION.
 
(a) Company Information. Employee agrees at all times during the period of his employment with the Company and thereafter, to hold in strictest confidence, and not to use, except for the benefit of the Company, or to disclose to any person, firm, corporation or other entity without written authorization of the Board, any Proprietary Information (as defined herein) of the Company which Employee obtains, creates, or otherwise accesses in any way. Employee further agrees not to make copies of such Proprietary Information except as authorized by the Company. Employee understands that “Proprietary Information” means any Company proprietary information, technical data, trade secrets or know-how, including, but not limited to, research, product plans, products, services, suppliers, customer lists and customers (including, but not limited to, customers of the Company on whom Employee called or with whom Employee became acquainted during the employment), prices and costs, markets, software, developments, inventions, formulas, technology, designs, drawings, marketing, licenses, finances, budgets or other business information disclosed to Employee by the Company either directly or indirectly in writing, orally or by drawings or observation of parts or equipment or created by Employee during the period of employment, whether or not during working hours. Employee understands that Proprietary Information also includes, but is not limited to, information pertaining to any aspects of the Company’s business which is either information not known by actual or potential competitors of the Company or is proprietary information of the Company or its customers or suppliers, whether of a technical nature or otherwise. Employee further understands that Proprietary Information does not include any of the foregoing items which has become publicly and widely known and made generally available through no wrongful act of Employee or of others who were under confidentiality obligations as to the item or items involved.
 
(b) Former Employer Information. Employee represents that his performance of all terms of this Agreement as an employee of the Company have not breached and will not breach any agreement to keep in confidence proprietary information, knowledge or data acquired by Employee in confidence or trust prior or subsequent to the commencement of employment with the Company, and Employee will not disclose to the Company, or induce the Company to use, any inventions, confidential or proprietary information or material belonging to any previous employer or any other party.
 
11. INVENTIONS.
 
(a) Inventions Retained and Licensed. Exhibit B attached hereto contains a full and exhaustive list describing with particularity all inventions, original works of authorship, developments, improvements, and trade secrets which were made or otherwise created by Employee prior to the commencement of Employee’s employment hereunder (collectively “Prior Inventions”). Such Prior Inventions belong solely to Employee or belong to Employee jointly with another as listed therein, which relate in any way to any of the Company’s proposed businesses, products or research and development, and which are not assigned to the Company hereunder; or, if no such list is attached, Employee represents that there are no such Prior Inventions. If, in the course of employment with the Company, Employee incorporates into a Company product or service a Prior Invention owned by Employee or in which Employee has an interest, the Company is hereby granted and shall have a non-exclusive, royalty-free, irrevocable, perpetual, worldwide license (with the right to sublicense) to make, have made, copy, modify, make derivative works of, use, sell and otherwise distribute such Prior Invention as part of or in connection with such product, process or machine.
 
(b) Assignment of Inventions. Employee agrees that Employee will promptly make full written disclosure to the Company, will hold in trust for the sole right and benefit of the Company, and hereby assign to the Company, or its designee, all his right, title and interest throughout the world in and to any and all inventions, original works of authorship, developments, concepts, know-how, improvements or trade secrets, whether or not patentable or registrable under copyright or similar laws, which Employee may solely or jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice, during the period of time in which Employee is employed by the Company (collectively referred to as “Inventions”), except as provided in Section 10(e) below. Employee further acknowledges that all inventions, original works of authorship, developments, concepts, know-how, improvements or trade secrets which are made by Employee (solely or jointly with others) within the scope of and during the period of employment with the Company are “works made for hire” (to the greatest extent permitted by applicable law) and are compensated by the compensation provided to Employee pursuant to this Agreement, unless regulated otherwise by the mandatory law of the state of California.
 
 
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(c) Maintenance of Records. Employee agrees to keep and maintain adequate and current written records of all Inventions made by Employee (solely or jointly with others) during the period of employment with the Company. Such records may be in the form of notes, drawings, flow charts, electronic data or recordings, laboratory notebooks, and any other format and shall be made available to and remain the sole property of the Company at all times. Employee agrees not to remove such records from the Company’s place of business except as expressly permitted by Company policy which may, from time to time, be revised at the sole election of the Company.
 
(d) Assistance and Power of Attorney. Employee agrees to assist the Company, or its designee, at the Company’s expense, in every way to secure the Company’s rights in the Inventions and any copyrights, patents, trademarks, mask work rights, moral rights, or other intellectual property rights relating thereto in any and all countries, including the disclosure to the Company of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments, recordations, and all other instruments which the Company shall deem necessary in order to apply for, obtain, maintain and transfer such rights and in order to assign and convey to the Company, its successors, assigns and nominees the sole and exclusive rights, title and interest in and to such Inventions, and any copyrights, patents or other intellectual property rights relating thereto. Employee further agrees that it is and shall remain Employee’s obligation to execute or cause to be executed, when it is in Employee’s power to do so, any such instrument or papers as required by the Company after the termination of this Agreement until the expiration of the last such intellectual property right to expire in any country of the world. In the event the Company is unable because of any mental or physical incapacity or unavailability or for any other reason to secure Employee’s signature to apply for or to pursue any application for any United States or foreign patents or copyright registrations covering Inventions or original works of authorship assigned to the Company as above, Employee hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as his agent and attorney in fact, to act for and on Employee’s behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to further the application for, prosecution, issuance, maintenance or transfer of letters patent or copyright registrations thereon with the same legal force and effect as if originally executed by Employee. Employee hereby waives and irrevocably quitclaims to the Company any and all claims, of any nature whatsoever, which Employee now or hereafter has for infringement of any and all proprietary rights assigned to the Company.
 
(e) Exception to Assignments. Employee understands that the provisions of this Agreement requiring assignment of Inventions to the Company do not apply to any invention which qualifies fully under the provisions of California Labor Code Section 2870 (attached hereto as Exhibit C). Employee shall advise the Company promptly in writing of any inventions that Employee believe meet such provisions and are not otherwise disclosed on Exhibit B.
 
12. RETURNING COMPANY DOCUMENTS.
 
At the time of the termination of Employee’s employment with the Company, Employee shall deliver to the Company (and will not keep in his possession, recreate or deliver to anyone else) any and all devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, laboratory notebooks, materials, flow charts, equipment, other documents or property, or reproductions of any aforementioned items developed by Employee pursuant to Employee’s employment with the Company or otherwise belonging to the Company, its successors or assigns. Employee further agrees any property situated on the Company’s premises and owned by the Company, including disks and other storage media, filing cabinets or other work areas, is subject to inspection by Company personnel at any time with or without notice. In the event of the termination of Employee’s employment hereunder, Employee agrees to sign and deliver a “Termination Certification” is a form reasonably requested by the Company.
 
13. NOTIFICATION TO OTHER PARTIES.
 
In the event that Employee leaves the employ of the Company, Employee hereby consents to notification by the Company to his new employer about Employee’s rights and obligations under this Agreement.
 
 
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14. SOLICITATION OF EMPLOYEES, CONSULTANTS AND OTHER PARTIES.
 
During the period of Employee’s employment with the Company, and for a period of twenty-four (24) months immediately following the termination of Employee’s employment with the Company for any reason, Employee shall not either directly or indirectly solicit, induce, recruit or encourage any of the Company’s employees or consultants to terminate their relationship with the Company, or take away such employees or consultants, or attempt to solicit, induce, recruit, encourage or take away employees or consultants of the Company, either for himself or for any other person or entity. Further, for a period of twenty-four (24) months following termination of Employee’s employment with the Company for any reason, with or without cause, Employee shall not solicit any investor in, licensor to, or customer of the Company or licensee of the Company’s products, with respect to any business, products or services who are competitive to the products or services offered by the Company or under development as of the date of termination of Employee’s employment with the Company. Employee further agrees that, during the Term and for a period of five years following the termination of this Agreement, Employee will not engage in any conduct that is injurious to the reputation(s) and interest(s) of the Company and/or the Company’s past or present directors, officers, agents, fiduciaries, trustees, administrators, employees or assigns, including but not limited to disparaging (or inducing or encouraging others to disparage) the Company and/or any of the foregoing individuals. For purposes of this Agreement, the term “disparage” includes without limitation, making any statement that would adversely affect in any manner the conduct of the Company’s businesses, the business reputation of the Company and/or any of the foregoing individuals, and/or the personal reputation of any of the foregoing individuals.
 
If any of the foregoing provisions of this Section 14 is found by any court, agency or arbitrator of competent jurisdiction to be unenforceable because it extends for too long a period of time or over too great a range of activities or in too broad a geographic area, it shall be interpreted to extend over the maximum period of time, range of activities or geographic area as to which it may be enforceable.
 
15. MISCELLANEOUS
 
(a) Preparation of Agreement. It is acknowledged by each party that such party either had separate and independent advice of counsel or the opportunity to avail itself or himself of the same. In light of these facts it is acknowledged that no party shall be construed to be solely responsible for the drafting hereof, and therefore any ambiguity shall not be construed against any party as the alleged draftsman of this Agreement.
 
(b) Cooperation. Each party agrees, without further consideration, to cooperate and diligently perform any further acts, deeds and things and to execute and deliver any documents that may from time to time be reasonably necessary or otherwise reasonably required to consummate, evidence, confirm and/or carry out the intent and provisions of this Agreement, all without undue delay or expense.
 
(c) Interpretation.
 
i. Entire Agreement/No Collateral Representations. Each party expressly acknowledges and agrees that this Agreement, including all exhibits attached hereto: (1) is the final, complete and exclusive statement of the agreement of the parties with respect to the subject matter hereof; (2) supersedes any prior or contemporaneous agreements, promises, assurances, guarantees, representations, understandings, conduct, proposals, conditions, commitments, acts, courses of dealing, warranties, interpretations or terms of any kind, oral or written (collectively and severally, “Prior Agreements”), and that any such Prior Agreements are of no force or effect except as expressly set forth herein; and (3) may not be varied, supplemented or contradicted by evidence of any Prior Agreement, or by evidence of subsequent oral agreements. Any agreement hereafter made shall be ineffective to modify, supplement or discharge the terms of this Agreement, in whole or in part, unless such agreement is in writing and signed by the party against whom enforcement of the modification or supplement is sought.
 
 
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ii. Waiver. No breach of any agreement or provision herein contained, or of any obligation under this Agreement, may be waived, nor shall any extension of time for performance of any obligations or acts be deemed an extension of time for performance of any other obligations or acts contained herein, except by written instrument signed by the party to be charged or as otherwise expressly authorized herein. No waiver of any breach of any agreement or provision herein contained shall be deemed a waiver of any preceding or succeeding breach thereof, or a waiver or relinquishment of any other agreement or provision or right or power herein contained.
 
iii. Remedies Cumulative. The remedies of each party under this Agreement are cumulative and shall not exclude any other remedies to which such party may be lawfully entitled.
 
iv. Severability. If any term or provision of this Agreement or the application thereof to any person or circumstance shall, to any extent, be determined to be invalid, illegal, or unenforceable under present or future laws effective during the period of this Agreement, then and, in that event: (A) the performance of the offending term or provision (but only to the extent its application is invalid, illegal or unenforceable) shall be excused as if it had never been incorporated into this Agreement, and, in lieu of such excused provision, there shall be added a provision as similar in terms and amount to such excused provision as may be possible and legal, valid and enforceable, and (B) the remaining part of this Agreement (including the application of the offending term or provision to persons or circumstances other than those as to which it is held invalid, illegal or unenforceable) shall not be affected thereby and shall continue in full force and effect to the fullest extent provided by law.
 
v. No Third Party Beneficiary. Notwithstanding anything else herein to the contrary, the parties specifically disavow any desire or intention to create any third party beneficiary obligations, and specifically declare that no person or entity, other than as set forth in this Agreement, shall have any rights hereunder or any right of enforcement hereof, except the heirs and personal representatives of Employee in the event of Employee’s death or disability.
 
vi. Heading; References; Incorporation; Gender. The headings used in this Agreement are for convenience and reference purposes only, and shall not be used in construing or interpreting the scope or intent of this Agreement or any provision hereof. References to this Agreement shall include all amendments or renewals thereof. Any pronoun referenced in this Agreement shall be deemed to include the other gender, including neutral genders or genders appropriate for entities, if applicable, and the singular shall be deemed to include the plural, and vice versa, as the context requires.
 
(d) Enforcement.
 
(i) Applicable Law. This Agreement and the rights and remedies of each party arising out of or relating to this Agreement (including, without limitation, equitable remedies) shall be solely governed by, interpreted under, and construed and enforced in accordance with the laws (without regard to the conflicts of law principles thereof) of the State of California, as if this agreement were made, and as if its obligations are to be performed, wholly within the State of California.
 
(ii) Consent to Jurisdiction; Service of Process. Any action or proceeding arising out of or relating to this Agreement shall be filed in and heard and litigated solely before the state courts of California located within the County of Orange.
 
(e) 
 rights and benefits under this Agreement are personal to him and therefore (i) no such right
 
No Assignment of Rights or Delegation of Duties by Employee. Employee’s or benefit shall be subject to voluntary or involuntary alienation, assignment or transfer; and (ii) Employee may not delegate his duties or obligations hereunder.
 
 
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(f) Notices. Unless otherwise specifically provided in this Agreement, all notices, demands, requests, consents, approvals or other communications (collectively and severally called “Notices”) required or permitted to be given hereunder, or which are given with respect to this Agreement, shall be in writing, and shall be given by: (A) personal delivery (which form of Notice shall be deemed to have been given upon delivery), (B) by telegraph or by private airborne/overnight delivery service (which forms of Notice shall be deemed to have been given upon confirmed delivery by the delivery agency), (C) by electronic or facsimile or telephonic transmission, provided the receiving party has a compatible device or confirms receipt thereof (which forms of Notice shall be deemed delivered upon confirmed transmission or confirmation of receipt), or (D) by mailing in the United States mail by registered or certified mail, return receipt requested, postage prepaid (which forms of Notice shall be deemed to have been given upon the fifth business day following the date mailed). Each party, and their respective counsel, hereby agrees that if Notice is to be given hereunder by such party’s counsel, such counsel may communicate directly with all principals, as required to comply with the foregoing notice provisions. Notices shall be addressed to the address hereinabove set forth in the introductory paragraph of this Agreement, or to such other address as the receiving party shall have specified most recently by like Notice, with a copy to the other parties hereto. Any Notice given to the estate of a party shall be sufficient if addressed to the party as provided in this subparagraph.
 
(g) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument, binding on all parties hereto. Any signature page of this Agreement may be detached from any form hereto by having attached to it one or more additional signature pages.
 
(h) Execution by All Parties Required to be Binding; Electronically Transmitted Documents. This Agreement shall not be construed to be an offer and shall have no force and effect until this Agreement is fully executed by all parties hereto. If a copy or counterpart of this Agreement is originally executed and such copy or counterpart is thereafter transmitted electronically by facsimile or similar device, such facsimile document shall for all purposes be treated as if manually signed by the party whose facsimile signature appears.
 
IN THE WITNESS HEREOF, the parties execute this employment agreement as of the date written above:
 
TRUE DRINKS INC. 
 
 
/s/ Lance Leonard
Lance Leonard, CEO  
EMPLOYEE
 
 
/s/ Robert Van Boerum
Robert Van Boerum
 
 
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Schedule A

 
Responsibilities:
Planning/Management
·
Responsible for all product quality and costing from the formulation development, sourcing, to the end user package.
 
·
Develop, implement, and manage a strategy for contract manufacturing short term and long term.
 
·
Source, hire, direct and manage all contract manufacturing and the related raw material, components for the end user packages.
 
·
Review and development of ongoing testing practices to insure certification, FDA, US, and International requirements are met.  This includes other organizational certifications specific to the benefit of the brand.
 
·
Direct and coordinate company’s domestic and international inventory and transportation functions.
 
·
Research and develop strategies and plans, which identify improved efficiencies in manufacturing, effective delivery of product to customers domestically and international.
 
·
Work directly with brand management to consistently deliver the highest quality formulations and products.
 
·
Consistently understand and evaluate the changes in economy and world events that may effect raw material costs and fuel costs.  Make recommendations and decisions that effectively manage these costs.
 
·
Develop and oversee all budgets for operations and logistics activities annually and report budgets to expenses.
 
·
Coordinate with sales and marketing to develop forecasting and package change strategies.
 
·
Make appropriate recommendations in package changes that may better the organization’s effectiveness.
 
·
Establish and implement short- and long-range goals, objectives, policies, and operating procedures.
 
·
Implement tracking tools that will enable the ability to analyze and evaluate effectiveness of plans.
 
·
Keep up to date on technology.
 
Operations/Logistics
·
Insure that appropriate efficiencies are implemented in the transportation process to include time, inventory, space, errors, and distance.
 
·
On an on-going basis, evaluate ports of entry, storage locations, and effective inventory management.
 
·
Source and implement software systems that will approve efficiency.
 
·
Participate and approve all fulfillment operations, warehouse selection, and management of transportation.
 
·
Manage and track all raw materials; constantly review suppliers and costs changes.
 
·
Understand plant operations; make periodic visits to the plant/source and review job cost, productivity reports and overall cost of goods analysis.
 
·
Understand international dynamics for distribution and supply chain and consistently evaluate efficiencies.
 
·
Participate and approve all major asset acquisitions, i.e. factory equipment, computers, etc.

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