Attached files
Exhibit 10.4
THIS NOTE HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”), OR ANY STATE SECURITIES LAWS, AND
NEITHER THIS NOTE NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD,
ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION
STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT AND ANY
APPLICABLE STATE SECURITIES LAWS, OR (2) AN EXEMPTION FROM SUCH
REGISTRATION EXISTS AND THE COMPANY RECEIVES AN OPINION OF COUNSEL
TO THE HOLDER OF THIS NOTE, WHICH COUNSEL AND OPINION ARE
SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED,
SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN THE MANNER CONTEMPLATED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR
APPLICABLE STATE SECURITIES LAWS.
REVOLVING CREDIT NOTE
$750,000.00
|
September 26,
2017
|
FOR VALUE RECEIVED, Hispanica
International Delights of America, Inc., a Delaware corporation
(the “Company”), hereby promises to pay
to the order of a J.H Brech, LLC, a Texas limited liability
company, or its assigns (collectively, the “Noteholder”), in lawful money of
the United States of America, and in immediately payable funds, the
principal sum of Seven Hundred and Fifty Thousand Dollars
($750,000.00), or such lesser amount as shall equal the aggregate
unpaid principal amount of all funds advanced the Company by the
Noteholder in accordance with the terms of this Note, on the date
and in the amounts stated herein at any time on or after September
1, 2017, and to pay interest on the unpaid principal amount of this
Note, in like money and funds, on the dates specified herein. Such
advances shall be in the discretion of the Noteholder and in
increments in the ordinary course of no less than $10,000.00. The
Company may, from time to time, borrow, repay and reborrow under
the terms of this Note up to but not exceeding the principal amount
of this Note upon delivery to the Noteholder of a request of such
advance of the proceeds of this Note. The amounts previously
advanced to the Company by the Noteholder as set forth on
Schedule A annexed
to this Note which remains outstanding as of the date of this Note
shall represent amounts advanced to the Company to date by the
Noteholder under this Note, and shall be included in the sums due
the Noteholder by the Company hereunder.
The
principal hereof outstanding and any unpaid accrued interest
thereon shall be due and payable on or before October 15, 2019 (the
“Maturity
Date”). This Note shall bear interest on the unpaid
principal balance from time to time outstanding, until paid, at the
rate of 7% per annum calculated quarterly on the interest payment
dates. Interest shall be payable semi-annually on June 30 and
December 31 of each year commencing with the first advance made
hereunder. Payment of all amounts due hereunder shall be made at
the address of the Noteholder set forth below.
The
Company hereby authorizes the Noteholder to endorse on the Schedule
annexed to this Note the amount and type of all revolving credit
loans made to the Company, all renewals and payments of principal
amounts in respect of such revolving credit loans, and the
outstanding principal amount of all revolving credit loans;
provided, however, that the
failure to make such notation with respect to any revolving credit
loan or payment shall not limit or otherwise affect the obligation
of the Company under this Note.
1.
PAYMENTS.
(a)
Payment of all amounts due hereunder shall be made at the address
of the Noteholder set forth below. In the event that the date for
the payment of any amount payable under this Note falls due on a
Saturday, Sunday or public holiday under the laws of the State of
Texas, the time for payment of such amount shall be extended to the
next succeeding business day and interest shall continue to accrue
on any principal amount so effected until the payment thereof on
such extended due date.
(b)
All payments received on account of this Note shall be applied to
the reduction of the unpaid principal balance of this Note.
Interest shall be computed on the basis of a year of 360 days, for
the actual number of days elapsed.
-1-
(c)
If payment of the outstanding principal amount of this Note,
together with all accrued unpaid interest thereon at the applicable
rate of interest (as set forth herein), is not made on the Maturity
Date, then interest shall accrue on the outstanding principal
amount due under this Note and on any unpaid accrued interest due
on this date of the payment in full of such amounts (including from
and after the date of the entry of judgment in favor of the
Noteholder in an action to collect this Note) at an annual rate
equal to the lesser of 12% or the maximum rate of interest
permitted by applicable law.
(d)
The Holder shall have the right from time to time, and at any time
during the period beginning on the date of this Agreement, to
convert all or any part of the outstanding and unpaid principal
and/or interest amount of this Note into fully paid and
non-assessable shares of the Company’s common stock, $0.001
par value (“Common
Stock”), by delivering to the Company a notice of
conversion in the form attached hereto as Schedule B; provided, however, that in no event
shall the Holder be entitled to convert any portion of this Note in
excess of that portion of this Note upon conversion of which the
sum of (1) the number of shares of Common Stock beneficially owned
by the Holder and its affiliates , and (2) the number of shares of
Common Stock issuable upon the conversion of the portion of this
Note with respect to which the determination of this proviso is
being made, would result in beneficial ownership by the Holder and
its affiliates of more than 4.99% of the outstanding shares of
Common Stock. For purposes of the proviso to the immediately
preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), and Regulations
13D-G thereunder, except as otherwise provided in clause (1) of
such proviso, provided, further, however, that the limitations on
conversion may be waived by the Holder upon, at the election of the
Holder, not less than 61 days’ prior notice to the Borrower,
and the provisions of the conversion limitation shall continue. The
conversion shall be valued as follows:
(i) if
the Company's Common Stock is not listed for trading on an exchange
or quoted for trading on the OTC Bulletin Board or the Pink Sheets,
Principal and Interest Shares shall be valued at the lesser of (A)
the closing price of the Common Stock as reported on the Company's
primary market on the trading day immediately preceding the date
the interest payment is due and payable, or (B) $1.50 per
share.
(ii) if
the Company's is listed for trading on an exchange or quoted for
trading on the OTC Bulletin Board or the Pink Sheets, Principal and
Interest Shares shall be at $1.50 per share.
2.
PREPAYMENT.
This Note may be prepaid, in whole or in part, without penalty with
five days prior written notice to the Noteholder.
3.
DEFAULT. If
any of the following events (each an “Event of Default”) shall
occur:
(a)
The Company fails to pay the principal or interest accrued on, or
any other amount at any time owing under, the Note as and when the
same becomes due and payable and such default is not cured within
10 business days after notice of the occurrence of such default;
or
(b)
The Company defaults in the due observance or performance of or
breach any of its covenants contained in this Note and such default
is not cured within 10 business days after notice of the occurrence
of such default; or
(c)
The Company shall (i) apply for or consent to the appointment of,
or the taking of possession by, a receiver, trustee or similar
official of or for itself or of or for all or a substantial part of
its property, (ii) make an assignment for the benefit of its
creditors, (iii) commence a voluntary case under the Federal
Bankruptcy Code, as now or hereafter in effect (the
“Code”), (iv)
file a petition seeking to take advantage of any other bankruptcy,
insolvency, moratorium, reorganization or other similar law of any
jurisdiction (“Other
Laws”), (v) acquiesce as to, or fail to controvert in
a timely or appropriate manner, an involuntary case filed against
the Company under the Code, or (vi) take any corporate action in
furtherance of any of the foregoing; or
-2-
(d)
A proceeding or involuntary case shall be commenced, without the
application or consent of the Company in any court of competent
jurisdiction (i) under the Code, (ii) seeking liquidation,
reorganization, dissolution, winding up or composition or
readjustment of its debts under any Other Laws, or (iii) seeking
the appointment of a trustee, receive or similar official for it or
for all or any substantial part of its assets, and any such
proceeding or case shall continue undismissed, or unstayed and in
effect, for a period of 90 days; or
(e)
A final judgment for the payment of money shall be rendered by a
court of competent jurisdiction against the Company, and the
Company shall not discharge the same, or procure a stay of
execution thereof within 30 days from the date of entry thereof and
within such 30 day period or such longer period during which
execution of such judgment shall have been stayed, appeal therefrom
and cause the execution thereof to be stayed during such appeal,
and such judgment, together with all other judgments against the
Company (including all subsidiaries), shall exceed in the aggregate
$200,000 in excess of any insurance as to the subject matter of
such judgments, as to which coverage has not been declined or the
underlying claim rejected by the applicable insurer;
or
(f)
The liquidation or dissolution of the Company or any vote in favor
thereof by the board of directors and stockholders of the Company;
or
(g)
An attachment or garnishment is levied against the assets of the
Company involving an amount in excess of $750,000 and the lien
created by such levy is not vacated, bonded or stayed within 10
business days after such lien has attached to such assets;
or
(h)
The Company defaults in the payment (regardless of amount) when due
of the principal of, interest on, or any other liability on account
of, any indebtedness of the Company(other than the Note) having an
unpaid principal amount in excess of $200,000 or a default occurs
in the performance or observance by the Company of any covenant or
condition (other than for the payment of money) contained in any
note (other than this Note) or agreement evidencing or pertaining
to any such indebtedness, which causes the maturity of such
indebtedness to be accelerated or permits the holder or holders of
such indebtedness to declare the same to be due prior to the stated
maturity thereof, or
(i)
The Company sells all or substantially all of its assets or merges
or is consolidated with another corporation in which the Company is
not the surviving corporation, or the accounting acquirer in the
event of a reverse merger; or
(j) A
Change of Control of the Company occurs. For the purpose of this
Note, a “Change of
Control” shall mean a change in control (a) as set
forth in Section 280G of the Internal Revenue Code or (b) of a
nature that would be required to be reported in response to Item
5.01 of the current report on Form 8-K, as in effect on the date
hereof, pursuant to Section 13 or 15(d) of the Exchange Act;
provided that, without limitation, such a change in control shall
be deemed to have occurred at such time as:
i.
any "person", other than
the Noteholder becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 50% or more of the combined
voting power of the Company's outstanding securities then having
the right to vote at elections of directors; or,
ii.
the individuals who at the date of this Note constitute the Board
of Directors cease for any reason to constitute a majority thereof
unless the election, or nomination for election, of each new
director was approved by a vote of at least two thirds of the
directors then in office who were directors at the date of this
Note,
-3-
then,
and in any such event, the Noteholder may by written notice to the
Company declare the entire unpaid principal amount of this Note
outstanding together with accrued interest thereon due and payable,
and the same shall, unless such default be cured within 20 business
days after such notice, forthwith become due and payable upon the
expiration of such 20-day period, without presentment, demand,
protest, or other notice of any kind, all of which are expressly
waived.
4.
SUITS FOR
ENFORCEMENT AND REMEDIES. If any one or more Events of
Default shall occur, the Noteholder may proceed to (i) protect and
enforce Noteholder’s rights either by suit in equity or by
action at law, or both, whether for the specific performance of any
covenant, condition or agreement contained in this Note or in any
agreement or document referred to herein or in aid of the exercise
of any power granted in this Note or in any agreement or document
referred to herein, (ii) enforce the payment of this Note, or (iii)
enforce any other legal or equitable right of the Noteholder. No
right or remedy herein or in any other agreement or instrument
conferred upon the Noteholder is intended to be exclusive of any
other right or remedy, and each and every such right or remedy
shall be cumulative and shall be in addition to every other right
and remedy given hereunder or now or hereafter existing at law or
in equity or by statute or otherwise.
5.
REPRESENTATIONS AND
WARRANTIES OF THE COMPANY. The Company covenants and agrees
that for so long as any portion of the indebtedness evidenced by
this Note, whether principal, accrued and unpaid interest or any
other amount at any time due hereunder, remains unpaid, the Company
will:
(a)
Do or cause to be done all things necessary to preserve and keep in
full force and effect its corporate existence, rights and
franchises and to comply in all material respects with all laws,
regulations and orders of each governmental authority having
jurisdiction over the Company;
(c)
Promptly following the occurrence of an Event of Default furnish to
the Noteholder a written statement of the Company’s President
or Chief Financial Officer setting forth the details of such Event
of Default and the action which the Company proposes to take with
respect thereto;
(d)
At all times maintain true and complete records and books of
account in which all of the financial transactions of the Company
are duly recorded in conformance with U.S. generally accepted
accounting principles;
(e)
Maintain the registration of the Company’s Common Stock under
Section 12(g) of the Securities Exchange Act of 1934 (the
“Exchange
Act”), and to timely file (or obtain extensions in
respect thereof and file within the applicable grace period) all
reports and other filings required to be filed by the Company after
the date hereof pursuant to the Exchange Act.
6.
NOTICES. All
notices required to be given to any of the parties hereunder shall
be in writing and shall be deemed to have been sufficiently given
for all purposes when presented personally to such party, sent by
telecopier (with the original timely mailed), or sent by
registered, certified or express mail, return receipt requested, to
such party at its address set forth below:
If to the Company
to:
J.H. Brech,
LLC
Christian C. Onsager
Onsager
| Fletcher | Johnson
1801
Broadway, Suite 900
Denver,
Colorado 80202
Direct Dial: 720.457.7070
Main: 303.512.1123
Fax: 303.512.1129
If to the
Noteholder
to:
Hispanica
International Delights of America, Inc.
Fernando
"Oswaldo" Leonzo
Chairman
& CEO
Hispanica
International
Delights
of America, Inc.
575 Lexington Ave 4th Floor
New
York, NY 10022
c: 914.413.6106
f: 516.223.2894
or
hereafter given to the other party hereto pursuant to the
provisions of this Note.
-4-
7.
EXCLUSIVE
JURISDICTION AND VENUE. The Parties agree that the courts of
the County of Tarrant, State of Texas shall have sole and exclusive
jurisdiction and venue for the resolution of all disputes arising
under the terms of this Note and the transactions contemplated
herein. The Parties further that, in the event of litigation
arising out of or in connection with this Note in this court, they
will not contest or challenge the jurisdiction or venue of this
court.
8.
GOVERNING
LAW. This Note shall be governed by and construed and
interpreted in accordance with the laws of the State of Texas
applicable to contracts made and to be performed entirely therein,
without giving effect to the rules and conflicts of
law.
9.
CONFORMITY WITH
LAW. It is the intention of the Company and of the
Noteholder to conform strictly to applicable usury and similar
laws. Accordingly, notwithstanding anything to the contrary in this
Note, it is agreed that the aggregate of all charges which
constitute interest under applicable usury and similar laws that
are contract for, chargeable or receivable under or in respect of
this Note, shall under no circumstances exceed the maximum amount
of interest permitted by such laws, and any excess, whether
occasioned by acceleration or maturity of this Note or otherwise,
shall be canceled automatically, and if theretofore paid, shall be
either refunded to the Company or credited on the principal amount
of this Note.
10.
ASSIGNABILITY:
This Note shall be binding upon the Borrower and its successors and
assigns, and shall inure to be the benefit of the Holder and its
successors and assigns. Each transferee of this Note must be an
“accredited
investor” (as defined in Rule 501(a) of the 1933 Act).
Notwithstanding anything in this Note to the contrary, this Note
may be pledged as collateral in connection with a bona fide margin
account or other lending arrangement.
Remainder of Page Intentionally Left Blank
-5-
IN WITNESS WHEREOF, the Company has
signed and sealed this Note and delivered it in the State of Texas
as of September 1, 2017.
COMPANY:
HISPANICA
INTERNATIONAL
/s/ Fernando Leonzo
Fernando Leonzo,
CEO
J.H.Brech,
LLC
/s/ Harry N.
McMillan
Harry N. McMillan,
Trustee of the C.E. McMillan Family Trust, in his capacity as
Managing Member of J.H. Brech, LLC.
-6-
SCHEDULE
A
TO
REVOLVING CREDIT NOTE
Date Made, Renewed
or Paid
|
Type
of Loan
|
Amount of Principal Renewed
or Paid
|
Unpaid Principal Balance
of Revolving Credit Note
|
Name of Person
Making Notation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-7-