EXHIBIT 10.2

 

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL (WHICH MAY BE THE LEGAL COUNSEL OPINION (AS DEFINED IN THE PURCHASE
AGREEMENT)), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.
NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH
A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.

 

Principal Amount: $440,000.00 Issue Date: September 30 , 2016 Actual Amount of
Purchase Price:$400,000.00  

 

CONVERTIBLE PROMISSORY NOTE

 

FOR VALUE RECEIVED, HISPANICA INTERNATIONAL DELIGHTS OF AMERICA, INC., a
Delaware corporation (hereinafter called the “Borrower” or the “Company”),
hereby promises to pay to the order of Anson Investments Master Fund, a limited
liability company, or registered assigns (the “Holder”) in the form of lawful
money of the United States of America by October 30 , 2017 (the “Maturity
Date”), the sum of $440,000.00, which amount is the $400,000.00 actual amount of
the purchase price hereof plus a 10% original issue discount (the “Principal
Amount”) and to pay interest on the unpaid Principal Amount hereof at the rate
of five percent (5%) (the “Interest Rate”) per annum from the date hereof (the
“Issue Date”) until the same becomes due and payable, whether at maturity or
upon acceleration or by prepayment or otherwise.

 

This Note may not be prepaid in whole or in part except as otherwise explicitly
set forth herein.

 

This Note is unsecured.

 

Interest shall commence accruing on the date that the Note is fully funded and
shall be computed on the basis of a 365-day year and the actual number of days
elapsed.

 

All payments due hereunder (to the extent not converted into shares of common
stock, $0.001 par value per share, of the Borrower (the “Common Stock”) in
accordance with the terms hereof) shall be made in lawful money of the United
States of America. All payments shall be made at such address as the Holder
shall hereafter give to the Borrower by written notice made in accordance with
the provisions of this Note. Whenever any amount expressed to be due by the
terms of this Note is due on any day which is not a business day, the same shall
instead be due on the next succeeding day which is a business day and, in the
case of any interest payment date which is not the date on which this Note is
paid in full, the extension of the due date thereof shall not be taken into
account for purposes of determining the amount of interest due on such date.

 

As used in this Note, the term “business day” shall mean any day other than a
Saturday, Sunday or a day on which commercial banks in the city of New York, New
York are authorized or required by law or executive order to remain closed. Each
capitalized term used herein, and not otherwise defined, shall have the meaning
ascribed thereto in that certain Securities Purchase Agreement dated the date
hereof, pursuant to which this Note was originally issued (the “Purchase
Agreement”). As used herein, the term “Trading Day” means any day that shares of
Common Stock are listed for trading or quotation on the OTCBB (as defined in the
Purchase Agreement), any tier of the NASDAQ Stock Market, the New York Stock
Exchange or the NYSE MKT.

 

This Note is free from all taxes, liens, claims and encumbrances with respect to
the issue thereof and shall not be subject to preemptive rights or other similar
rights of shareholders of the Borrower and will not impose personal liability
upon the holder thereof.

 

The following terms shall apply to this Note:

 

ARTICLE I. CONVERSION RIGHTS

 

1.1 Conversion Right. The Holder shall have the right, at any time before the
date of the payment in full of all outstanding Principal Amount and interest
under this Note (and any Default Amount (as defined below) related thereto), to
convert all or a portion of the then outstanding and unpaid Principal Amount of
this Note plus accrued interest and any Default Interest into fully paid and
non-assessable shares of Common Stock, as such Common Stock exists on the Issue
Date, or any shares of capital stock or other securities of the Borrower into
which such Common Stock shall hereafter be changed or reclassified, at the
Conversion Price (as defined below) determined as provided herein (a
“Conversion”).

 

The Company shall not effect any conversion of this Note, and a Holder shall not
have the right to convert any portion of this Note, to the extent that after
giving effect to the conversion set forth on the applicable Notice of
Conversion, the Holder (together with the Holder’s Affiliates, and any Persons
acting as a group together with the Holder or any of the Holder’s Affiliates)
would beneficially own in excess of the Beneficial Ownership Limitation (as
defined below). For purposes of the foregoing sentence, the number of shares of
Common Stock beneficially owned by the Holder and its Affiliates shall include
the number of shares of Common Stock issuable upon conversion of this Note with
respect to which such determination is being made, but shall exclude the number
of shares of Common Stock which are issuable upon (i) conversion of the
remaining, unconverted principal amount of this Note beneficially owned by the
Holder or any of its Affiliates and (ii) exercise or conversion of the
unexercised or unconverted portion of any other securities of the Company
subject to a limitation on conversion or exercise analogous to the limitation
contained herein (including, without limitation, any other Notes or the
Warrants) beneficially owned by the Holder or any of its Affiliates. Except as
set forth in the preceding sentence, for purposes of this Section beneficial
ownership shall be calculated in accordance with Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder. To the extent that the
limitation contained in this Section applies, the determination of whether this
Note is convertible (in relation to other securities owned by the Holder
together with any Affiliates) and of which principal amount of this Note is
convertible shall be in the sole discretion of the Holder, and the submission of
a Notice of Conversion shall be deemed to be the Holder’s determination of
whether this Note may be converted (in relation to other securities owned by the
Holder together with any Affiliates) and which principal amount of this Note is
convertible, in each case subject to the Beneficial Ownership Limitation. To
ensure compliance with this restriction, the Holder will be deemed to represent
to the Company each time it delivers a Notice of Conversion that such Notice of
Conversion has not violated the restrictions set forth in this paragraph and the
Company shall have no obligation to verify or confirm the accuracy of such
determination. In addition, a determination as to any group status as
contemplated above shall be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder. For purposes
of this Section, in determining the number of outstanding shares of Common
Stock, the Holder may rely on the number of outstanding shares of Common Stock
as stated in the most recent of the following: (i) the Company’s most recent
periodic or annual report filed with the Commission, as the case may be, (ii) a
more recent public announcement by the Company, or (iii) a more recent written
notice by the Company or the Company’s transfer agent setting forth the number
of shares of Common Stock outstanding. Upon the written or oral request of a
Holder, the Company shall within two Trading Days confirm orally and in writing
to the Holder the number of shares of Common Stock then outstanding. In any
case, the number of outstanding shares of Common Stock shall be determined after
giving effect to the conversion or exercise of securities of the Company,
including this Note, by the Holder or its Affiliates since the date as of which
such number of outstanding shares of Common Stock was reported. The “Beneficial
Ownership Limitation” shall not exceed 4.99% of the number of shares of the
Common Stock outstanding immediately after giving effect to the issuance of
shares of Common Stock issuable upon conversion of this Note held by the Holder.
The Holder, upon notice to the Company, may increase or decrease the Beneficial
Ownership Limitation provisions of this Section, provided that the Beneficial
Ownership Limitation in no event exceeds 9.99% of the number of shares of the
Common Stock outstanding immediately after giving effect to the issuance of
shares of Common Stock upon conversion of this Note held by the Holder and the
Beneficial Ownership Limitation provisions of this Section shall continue to
apply. Any increase in the Beneficial Ownership Limitation will not be effective
until the 61st day after such notice is delivered to the Company. The Beneficial
Ownership Limitation provisions of this paragraph shall be construed and
implemented in a manner otherwise than in strict conformity with the terms of
this Section to correct this paragraph (or any portion hereof) which may be
defective or inconsistent with the intended Beneficial Ownership Limitation
contained herein or to make changes or supplements necessary or desirable to
properly give effect to such limitation. The limitations contained in this
paragraph shall apply to a successor holder of this Note.

 

The number of Conversion Shares to be issued upon each conversion of this Note
shall be determined by dividing the Conversion Amount (as defined below) by the
applicable Conversion Price then in effect on the date specified in the notice
of conversion, in the form attached hereto as Exhibit A (the “Notice of
Conversion”), delivered to the Borrower by the Holder in accordance with Section
1.4 below; provided that the Notice of Conversion is submitted by facsimile or
e-mail (or by other means resulting in, or reasonably expected to result in,
notice) to the Borrower before 4:00 p.m., New York, New York time on such
conversion date (the “Conversion Date”). The term “Conversion Amount” means,
with respect to any conversion of this Note, the sum of (1) the Principal Amount
of this Note to be converted in such conversion plus (2) at the Holder’s option,
accrued and unpaid interest, if any, on such Principal Amount at the Interest
Rate to the Conversion Date, plus (3) at the Holder’s option, Default Interest,
if any, on the amounts referred to in the immediately preceding clauses (1)
and/or (2).

 

1.2 Conversion Price.

 

(a) Calculation of Conversion Price. The per share conversion price into which
principal and interest shall be convertible into shares of Common Stock
hereunder (the “Conversion Price”) shall be equal to $0.65 (the “Fixed
Conversion Price”).

 

(b) Conversion Price at Closing of an Acquisition. Notwithstanding anything
contained in Section 1.2(a) to the contrary, in the event of an acquisition
which provides for a change of control of the Company or an “uplist” to a higher
exchange (NASDAQ or NYSE:MKT), the outstanding principal and interest shall
convert hereunder at the lower of (i) the Fixed Conversion Price, (ii) a 25%
discount to the acquisition price, or (iii) the uplist price.

 

(c) Conversion Price Upon an Event of Default. Upon the occurrence of Event of a
Default as defined in Article III herein, the Conversion Price shall be the
lower of: (i) the Fixed Conversion Price or (ii) 60% multiplied by the volume
weighted average price of the Common Stock during the ten (10) consecutive
Trading Day period immediately preceding conversion date.

(d) Conversion Price upon Subsequent Offering. Prior to the repayment or
conversion of this Note, in the event the Borrower consummates a financing in
which the Company raises gross proceeds of at least three (3) times the amount
of the outstanding principal amount and interest hereunder, (a “Primary
Offering”), the Holder shall have the right, in its discretion, to (x) demand
repayment in full of any outstanding Principal Amounttogether with a 10%
premium, and interest hereunder as of the date of the closing of the funding or
(y) convert any outstanding principal and interest hereunder into Common Stock
at the closing of such Primary Offering at a Conversion Price equal to the lower
of (A) the Fixed Conversion Price and (B) a 10% discount to the offering price
to investors in the Primary Offering. The Borrower shall provide the Holder no
less than ten (10) business days’ notice of the anticipated closing of a funding
and an opportunity to exercise its conversion rights in connection therewith.

 

1.3 Authorized and Reserved Shares. The Borrower covenants that during the
period the conversion right exists, the Borrower will reserve from its
authorized and unissued Common Stock a sufficient number of shares, free from
preemptive rights, to provide for the issuance of a number of Conversion Shares
equal to the greater of: (a) 2,030,770 shares of Common Stock or (b) the sum of
(i) the number of Conversion Shares issuable upon the full conversion of this
Note (assuming no payment of principal or interest) multiplied by (ii) three (3)
(the “Reserved Amount”). In the event that the Borrower shall be unable to
reserve the entirety of the Reserved Amount (the “Reserve Amount Failure”), the
Borrower shall promptly take all actions necessary to increase its authorized
share capital to accommodate the Reserved Amount (the “Authorized Share
Increase”), including without limitation, all board of directors actions and
approvals and promptly (but no more than 60 business days following the Reserve
Amount Failure) to seek approval of the Authorized Share Increase via the
solicitation of proxies. The Borrower represents that upon issuance in
accordance with the terms hereof, the Conversion Shares will be duly and validly
issued, fully paid and non-assessable. In addition, if the Borrower shall issue
any securities or make any change to its capital structure which would change
the number of Conversion Shares into which this Note shall be convertible at the
then current Conversion Price, the Borrower shall at the same time make proper
provision so that thereafter there shall be a sufficient number of shares of
Common Stock authorized and reserved, free from preemptive rights, for
conversion of this Note. The Borrower (i) acknowledges that it has irrevocably
instructed its transfer agent to issue certificates for the Conversion Shares or
instructions to have the Conversion Shares issued as contemplated by Section
1.4(f) hereof, and (ii) agrees that its issuance of this Note shall constitute
full authority to its officers and agents who are charged with the duty of
executing stock certificates or cause the Company to electronically issue shares
of Common Stock to execute and issue the necessary certificates for the
Conversion Shares or cause the Conversion Shares to be issued as contemplated by
Section 1.4(f) hereof in accordance with the terms and conditions of this Note.
If, at any time the Borrower does not maintain the Reserved Amount it will be
considered an Event of Default under this Note.

 

1.4 Method of Conversion.

 

(a) Mechanics of Conversion. This Note may be converted by the Holder in whole
or in part, on any Trading Day, at any time from time to time by submitting to
the Borrower a Notice of Conversion (by facsimile, e-mail or other reasonable
means of communication dispatched on the Conversion Date prior to 4:00 p.m., New
York, New York time). Any Notice of Conversion submitted after 4:00 p.m., New
York, New York time, shall be deemed to have been delivered and received on the
next Trading Day.

 

(b) Surrender of Note Upon Conversion. Notwithstanding anything to the contrary
set forth herein, upon conversion of this Note in accordance with the terms
hereof, the Holder shall not be required to physically surrender this Note to
the Borrower unless the entire unpaid Principal Amount of this Note is so
converted. The Holder and the Borrower shall maintain records showing the
Principal Amount so converted and the dates of such conversions or shall use
such other method, reasonably satisfactory to the Holder and the Borrower, so as
not to require physical surrender of this Note upon each such conversion.
However, the holder will be required to provide the Notice of Conversion
(Exhibit A) in such instance. In the event of any dispute or discrepancy, such
records of the Borrower shall, prima facie, be controlling and determinative in
the absence of manifest error. Notwithstanding the foregoing, if any portion of
this Note is converted as aforesaid, the Holder may not transfer this Note
unless the Holder first physically surrenders this Note to the Borrower,
whereupon the Borrower will forthwith issue and deliver upon the order of the
Holder a new Note of like tenor, registered as the Holder (upon payment by the
Holder of any applicable transfer taxes) may request, representing in the
aggregate the remaining unpaid Principal Amount of this Note. The Holder and any
assignee, by acceptance of this Note, acknowledge and agree that, by reason of
the provisions of this paragraph, following conversion of a portion of this
Note, the unpaid and unconverted Principal Amount of this Note represented by
this Note may be less than the amount stated on the face hereof.

 

(c) Payment of Taxes. The Borrower shall not be required to pay any tax which
may be payable in respect of any transfer involved in the issue and delivery of
shares of Common Stock or other securities or property on conversion of this
Note in a name other than that of the Holder (or in street name), and the
Borrower shall not be required to issue or deliver any such shares or other
securities or property unless and until the person or persons (other than the
Holder or the custodian in whose street name such shares are to be held for the
Holder’s account) requesting the issuance thereof shall have paid to the
Borrower the amount of any such tax or shall have established to the
satisfaction of the Borrower that such tax has been paid.

 

(d) Delivery of Common Stock Upon Conversion. Upon receipt by the Borrower from
the Holder of a facsimile transmission or e-mail (or other reasonable means of
communication) and a phone confirmation to an officer of the Company of a Notice
of Conversion meeting the requirements for conversion as provided in this
Section 1.4, the Borrower shall issue and deliver or cause to be issued and
delivered to or upon the order of the Holder certificates for the Conversion
Shares (or cause the electronic delivery of the Conversion Shares as
contemplated by Section 1.4(f) hereof) within 3 (3) Trading Days after such
receipt (the “Deadline”) (and, solely in the case of conversion of the entire
unpaid principal and interest amount (and any Default Amount) hereof, surrender
of this Note.

 

(e) Obligation of Borrower to Deliver Common Stock. Upon receipt by the Borrower
of a Notice of Conversion, the Holder shall be deemed to be the holder of record
of the Conversion Shares issuable upon such conversion, the outstanding
Principal Amount and the amount of accrued and unpaid interest on this Note
shall be reduced to reflect such conversion, and, unless the Borrower defaults
on its obligations under this Article I, all rights with respect to the portion
of this Note being so converted shall forthwith terminate except the right to
receive the Common Stock or other securities, cash or other assets, as herein
provided, on such conversion. If the Holder shall have given a Notice of
Conversion as provided herein, the Borrower’s obligation to issue and deliver
the certificates for the Conversion Shares (or cause the electronic delivery of
the Conversion Shares as contemplated by Section 1.4(f) hereof) shall be
absolute and unconditional, irrespective of the absence of any action by the
Holder to enforce the same, any waiver or consent with respect to any provision
thereof, the recovery of any judgment against any person or any action to
enforce the same, any failure or delay in the enforcement of any other
obligation of the Borrower to the holder of record, or any setoff, counterclaim,
recoupment, limitation or termination, or any breach or alleged breach by the
Holder of any obligation to the Borrower, and irrespective of any other
circumstance which might otherwise limit such obligation of the Borrower to the
Holder in connection with such conversion. The Conversion Date specified in the
Notice of Conversion shall be the Conversion Date so long as the Notice of
Conversion is received by the Borrower before 6:00 p.m., New York, New York
time, on such date.

 

(f) Delivery of Conversion Shares by Electronic Transfer. In lieu of delivering
physical certificates representing the Conversion Shares issuable upon
conversion hereof, provided the Borrower is participating in the Depository
Trust Company (“DTC”) Fast Automated Securities Transfer program, upon request
of the Holder and its compliance with the provisions contained in Section 1.1
and in this Section 1.4, the Borrower shall use its best efforts to cause its
transfer agent to electronically transmit the Conversion Shares issuable upon
conversion hereof to the Holder by crediting the account of Holder’s Prime
Broker with DTC through its Deposit Withdrawal Agent Commission system.

 

(g) Liquidated Damages for Failure to Timely Deliver Conversion Shares Upon
Conversion. If the Company fails to deliver, based on circumstances within its
control and not as a result of the acts of third parties, to the Holder such
Conversion Shares pursuant to Section 1.4(d) by the Deadline, the Company shall
pay to the Holder, in cash, as liquidated damages and not as a penalty, for each
$1,000 of principal amount being converted, $10 per Trading Day (increasing to
$20 per Trading Day on the fifth (5th) Trading Day after such liquidated damages
begin to accrue) for each Trading Day after such Deadline until such Conversion
Shares are delivered or Holder rescinds such conversion. Nothing herein shall
limit a Holder’s right to pursue actual damages or declare an Event of Default
pursuant to Article III hereof for the Company’s failure to deliver Conversion
Shares within the period specified herein and the Holder shall have the right to
pursue all remedies available to it hereunder, at law or in equity including,
without limitation, a decree of specific performance and/or injunctive relief.
The exercise of any such rights shall not prohibit the Holder from seeking to
enforce damages pursuant to any other Section hereof or under applicable law.

 

(h) Compensation for Buy-In on Failure to Timely Deliver Conversion Shares Upon
Conversion. In addition to any other rights available to the Holder, if the
Company fails based on circumstances within its control and not as a result of
the acts of third parties, to deliver to the Holder such Conversion Shares by
the Deadline pursuant to Section 1.4(d) and if after such Deadline the Holder is
required by its brokerage firm to purchase (in an open market transaction or
otherwise), or the Holder’s brokerage firm otherwise purchases, shares of Common
Stock to deliver in satisfaction of a sale by the Holder of the Conversion
Shares which the Holder was entitled to receive upon the conversion relating to
such Deadline (a “Buy-In”), then the Company shall (A) pay in cash to the Holder
(in addition to any other remedies available to or elected by the Holder) the
amount, if any, by which (x) the Holder’s total purchase price (including any
brokerage commissions) for the Common Stock so purchased exceeds (y) the product
of (1) the aggregate number of shares of Common Stock that the Holder was
entitled to receive from the conversion at issue multiplied by (2) the actual
sale price at which the sell order giving rise to such purchase obligation was
executed (including any brokerage commissions) and (B) at the option of the
Holder, either reissue (if surrendered) this Debenture in a principal amount
equal to the principal amount of the attempted conversion (in which case such
conversion shall be deemed rescinded) or deliver to the Holder the number of
shares of Common Stock that would have been issued if the Company had timely
complied with its delivery requirements under Section 1.4(d). For example, if
the Holder purchases Common Stock having a total purchase price of $11,000 to
cover a Buy-In with respect to an attempted conversion of this Debenture with
respect to which the actual sale price of the Conversion Shares (including any
brokerage commissions) giving rise to such purchase obligation was a total of
$10,000 under clause (A) of the immediately preceding sentence, the Company
shall be required to pay the Holder $1,000. The Holder shall provide the Company
written notice indicating the amounts payable to the Holder in respect of the
Buy-In and, upon request of the Company, evidence of the amount of such loss.
Nothing herein shall limit a Holder’s right to pursue any other remedies
available to it hereunder, at law or in equity including, without limitation, a
decree of specific performance and/or injunctive relief with respect to the
Company’s failure to timely deliver Conversion Shares upon conversion of this
Debenture as required pursuant to the terms hereof.

 

1.5 Concerning the Shares. The Conversion Shares issuable upon conversion of
this Note may not be sold or transferred unless (a) such shares are sold
pursuant to an effective registration statement under the 1933 Act, (b) the
Holder shall have delivered to the Company, at the cost of the Company, an
opinion of counsel (which may be the Legal Counsel Opinion as contemplated by
and in accordance with Section 4(m) of the Purchase Agreement) that shall be in
form, substance and scope customary for opinions of counsel in comparable
transactions to the effect that the shares to be sold or transferred may be sold
or transferred pursuant to an exemption from such registration, which opinion
shall be reasonably acceptable to the Company, or (c) the shares are sold
pursuant to Rule 144. Except as otherwise provided in the Purchase Agreement
(and subject to the removal provisions set forth below), until such time as the
Conversion Shares have been registered under the 1933 Act or otherwise may be
sold pursuant to Rule 144 without any restriction as to the number of securities
as of a particular date that can then be immediately sold, each certificate for
the Conversion Shares that has not been so included in an effective registration
statement or that has not been sold pursuant to an effective registration
statement or an exemption that permits removal of the legend, shall bear a
legend substantially in the following form, as appropriate:

 

“NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL (WHICH MAY BE THE LEGAL COUNSEL OPINION (AS DEFINED IN THE PURCHASE
AGREEMENT)), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.
NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH
A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.”

 

The legend set forth above shall be removed and the Company shall issue to the
Holder a certificate for the applicable Conversion Shares without such legend
upon which it is stamped or (as requested by the Holder) issue the applicable
Conversion Shares by electronic delivery by crediting the account of such
holder’s broker with DTC, if, unless otherwise required by applicable state
securities laws, (a) such Conversion Shares are registered for sale under an
effective registration statement filed under the 1933 Act or otherwise may be
sold pursuant to Rule 144 without any restriction as to the number of securities
as of a particular date that can then be immediately sold, or (b) the Company or
the Holder provides the Legal Counsel Opinion (as contemplated by and in
accordance with Section 4(m) of the Purchase Agreement) to the effect that a
public sale or transfer of such Conversion Shares may be made without
registration under the 1933 Act, which opinion shall be accepted by the Company
so that the sale or transfer is effected. The Company shall be responsible for
the fees of its transfer agent and all DTC fees associated with any such
issuance. The Holder agrees to sell all Conversion Shares, including those
represented by a certificate(s) from which the legend has been removed, in
compliance with applicable prospectus delivery requirements, if any. In the
event that the Company does not reasonably accept the opinion of counsel
provided by the Holder with respect to the transfer of Conversion Shares
pursuant to an exemption from registration, such as Rule 144, Rule 144A or
Regulation S, at the Deadline, notwithstanding that the conditions of Rule 144,
Rule 144A or Regulation S, as applicable, have been met, it will be considered
an Event of Default under this Note.

 

1.6 Effect of Certain Events.

 

(a) Effect of Acquisition in Cash. In the event of a cash sale, conveyance or
disposition of all or substantially all of the assets of the Borrower, or the
consolidation, merger or other business combination of the Borrower with or into
any other Person (as defined below) or Persons when the Borrower is not the
survivor, the Borrower has the obligation to repay the total amount due under
the note plus any accrued interest according to Section 1.9. “Person” shall mean
any individual, corporation, limited liability company, partnership,
association, trust or other entity or organization.

 

(b) Adjustment Due to Merger, Consolidation, Etc. If, at any time when this Note
is issued and outstanding and prior to conversion of all of this Note, there
shall be any merger, consolidation, exchange of shares, recapitalization,
reorganization, or other similar event, as a result of which shares of Common
Stock of the Borrower shall be changed into the same or a different number of
shares of another class or classes of stock or securities of the Borrower or
another entity, or in case of any sale or conveyance of all or substantially all
of the assets of the Borrower other than in connection with a plan of complete
liquidation of the Borrower, then the Holder of this Note shall thereafter have
the right to receive upon conversion of this Note, upon the basis and upon the
terms and conditions specified herein and in lieu of the shares of Common Stock
immediately theretofore issuable upon conversion, such stock, securities or
assets which the Holder would have been entitled to receive in such transaction
had this Note been converted in full immediately prior to such transaction
(without regard to any limitations on conversion set forth herein), and in any
such case appropriate provisions shall be made with respect to the rights and
interests of the Holder of this Note to the end that the provisions hereof
(including, without limitation, provisions for adjustment of the Conversion
Price and of the number of shares issuable upon conversion of the Note) shall
thereafter be applicable, as nearly as may be practicable in relation to any
securities or assets thereafter deliverable upon the conversion hereof. The
Borrower shall not affect any transaction described in this Section 1.6(b)
unless (a) it first gives, to the extent practicable, at least thirty (30) days
prior written notice (but in any event at least fifteen (15) days prior written
notice) of the record date of the special meeting of shareholders to approve, or
if there is no such record date, the consummation of, such merger,
consolidation, exchange of shares, recapitalization, reorganization or other
similar event or sale of assets (during which time the Holder shall be entitled
to convert this Note) and (b) the resulting successor or acquiring entity (if
not the Borrower) assumes by written instrument the obligations of this Section
1.6(b). The above provisions shall similarly apply to successive consolidations,
mergers, sales, transfers or share exchanges.

 

(c) Adjustment Due to Distribution. If the Borrower shall declare or make any
distribution of its assets (or rights to acquire its assets) to holders of
Common Stock as a dividend, stock repurchase, by way of return of capital or
otherwise (including any dividend or distribution to the Borrower’s shareholders
in cash or shares (or rights to acquire shares) of capital stock of a subsidiary
(i.e., a spin-off)) (a “Distribution”), then the Holder of this Note shall be
entitled, upon any conversion of this Note after the date of record for
determining shareholders entitled to such Distribution, to receive the amount of
such assets which would have been payable to the Holder with respect to the
shares of Common Stock issuable upon such conversion had such Holder been the
holder of such shares of Common Stock on the record date for the determination
of shareholders entitled to such Distribution.

 

(d) Purchase Rights. If, at any time when all or any portion of this Note is
issued and outstanding, the Borrower issues any convertible securities or rights
to purchase stock, warrants, securities or other property (the “Purchase
Rights”) pro rata to the record holders of any class of Common Stock, then the
Holder of this Note will be entitled to acquire, upon the terms applicable to
such Purchase Rights, the aggregate Purchase Rights which such Holder could have
acquired if such Holder had held the number of shares of Common Stock acquirable
upon complete conversion of this Note (without regard to any limitations on
conversion contained herein) immediately before the date on which a record is
taken for the grant, issuance or sale of such Purchase Rights or, if no such
record is taken, the date as of which the record holders of Common Stock are to
be determined for the grant, issue or sale of such Purchase Rights.

 

(e) Notice of Adjustments. Upon the occurrence of each adjustment or
readjustment of the Conversion Price as a result of the events described in this
Section 1.6, the Borrower, at its expense, shall promptly compute such
adjustment or readjustment and prepare and furnish to the Holder a certificate
setting forth such adjustment or readjustment and showing in detail the facts
upon which such adjustment or readjustment is based. The Borrower shall, upon
the written request at any time of the Holder, furnish to such Holder a like
certificate setting forth (i) such adjustment or readjustment, (ii) the
Conversion Price at the time in effect and (iii) the number of shares of Common
Stock and the amount, if any, of other securities or property which at the time
would be received upon conversion of the Note.

 

1.7 [RESERVED]

 

 

1.8 Status as Shareholder. Upon submission of a Notice of Conversion by a
Holder, (i) the Conversion Shares covered thereby (other than the Conversion
Shares, if any, which cannot be issued because their issuance would exceed such
Holder’s allocated portion of the Reserved Amount or Maximum Share Amount) shall
be deemed converted into shares of Common Stock and (ii) the Holder’s rights as
a Holder of such converted portion of this Note shall cease and terminate,
excepting only the right to receive certificates for such shares of Common Stock
and to any remedies provided herein or otherwise available at law or in equity
to such Holder because of a failure by the Borrower to comply with the terms of
this Note. Notwithstanding the foregoing, if a Holder has not received
certificates for all shares of Common Stock prior to the tenth (10th) business
day after the expiration of the Deadline with respect to a conversion of any
portion of this Note for any reason, then (unless the Holder otherwise elects to
retain its status as a holder of Common Stock by so notifying the Borrower) the
Holder shall regain the rights of a Holder of this Note with respect to such
unconverted portions of this Note and the Borrower shall, as soon as
practicable, return such unconverted Note to the Holder or, if the Note has not
been surrendered, adjust its records to reflect that such portion of this Note
has not been converted. In all cases, the Holder shall retain all of its rights
and remedies for the Borrower’s failure to convert this Note.

 

1.9 Prepayment/Redemption. Notwithstanding anything to the contrary contained in
this Note, at any time prior to or as of (but not following) the Maturity Date,
the Borrower shall have the right, exercisable on not less than three (3)
Trading Days prior written notice to the Holder of the Note, to prepay all or
some of the outstanding Principal Amount of this Note together with accrued
interest then due in accordance with this Section 1.9. Any notice of prepayment
hereunder (an “Optional Prepayment Notice”) shall be delivered to the Holder of
the Note at its registered addresses and shall state: (1) that the Borrower is
exercising its right to prepay the Note, and (2) the date of prepayment which
shall be not more than three (3) Trading Days from the date of the Optional
Prepayment Notice. On the date fixed for prepayment (the “Optional Prepayment
Date”), the Borrower shall make payment of the Optional Prepayment Amount (as
defined below) to or upon the order of the Holder as specified by the Holder in
writing to the Borrower at least one (1) business day prior to the Optional
Prepayment Date. If the Borrower exercises its right to prepay the Note, the
Borrower shall make payment to the Holder of an amount in cash (the “Optional
Prepayment Amount”) equal to the sum of: (w) 115% multiplied by the Principal
Amount plus (x) accrued and unpaid interest on the Principal Amount to the
Optional Prepayment Date plus (y) Default Interest, if any, on the amounts
referred to in clauses (w) and (x). The Company covenants and agrees that it
will honor all Notices of Conversion tendered from the time of delivery of the
Optional Redemption Notice through the date all amounts owing thereon are due
and paid in full.

 

1.10 Reduction of Principal Amount. If any portion of the outstanding Principal
Amount of this Note is prepaid pursuant to Section 1.9, the remaining
outstanding Principal Amount shall be reduced by an amount equal to the product
of the Optional Prepayment Amount paid in cash less any accrued and unpaid
interest and Default Interest.

 

ARTICLE II. CERTAIN COVENANTS

 

2.1 No Dilutive Issuances. So long as the Borrower shall have any obligation
under this Note, and in addition to any adjustment in the Conversion Price as
provided for herein, the Borrower shall not sell or grant any option to purchase
or sell or grant any right to reprice, or otherwise dispose of or issue (or
announces any sale, grant or any option to purchase or other disposition), any
Common Stock or other securities convertible into, exercisable for or otherwise
entitled the any person or entity the right to acquire shares of Common Stock at
an effective price per share that is lower than the then Fixed Conversion Price
(a “Dilutive Issuance”); provided, however, that the Borrower may engage in a
Dilutive Issuance on the express condition that proceeds from the Dilutive
Issuance shall be used to prepay this Note in accordance with Section 1.9, with
such prepayment to occur at the closing of and directly from the proceeds of the
Dilutive Issuance.

 

2.2 Distributions on Capital Stock. So long as the Borrower shall have any
obligation under this Note, the Borrower shall not without the Holder’s written
consent (a) pay, declare or set apart for such payment, any dividend or other
distribution (whether in cash, property or other securities) on shares of
capital stock other than dividends on shares of Common Stock solely in the form
of additional shares of Common Stock or (b) directly or indirectly or through
any subsidiary make any other payment or distribution in respect of its capital
stock except for distributions pursuant to any shareholders’ rights plan which
is approved by a majority of the Borrower’s disinterested directors.

 

2.3 Restriction on Stock Repurchases. So long as the Borrower shall have any
obligation under this Note, the Borrower shall not without the Holder’s written
consent redeem, repurchase or otherwise acquire (whether for cash or in exchange
for property or other securities or otherwise) in any one transaction or series
of related transactions any shares of capital stock of the Borrower or any
warrants, rights or options to purchase or acquire any such shares.

 

2.4 Sale of Assets. So long as the Borrower shall have any obligation under this
Note, if the Borrower sells, leases or otherwise dispose of any significant
portion of its assets outside the ordinary course of business resulting in a
cash to the Borrower equal to 3x the amount of the note, then the Borrower shall
have the obligation to pay the total amount of the note plus any accrued
interest to the Holder according to Section 1.9.n

 

2.5 Advances and Loans. So long as the Borrower shall have any obligation under
this Note, the Borrower shall not, without the Holder’s written consent, lend
money, give credit or make advances to officers, directors, or employees.

 

 

2.6 Preservation of Business and Existence, etc. So long as the Borrower shall
have any obligation under this Note, the Borrower shall maintain and preserve,
and cause each of its Subsidiaries to maintain and preserve, its existence,
rights and privileges, and become or remain, and cause each of its Subsidiaries
(other than dormant Subsidiaries that have no or minimum assets) to become or
remain, duly qualified and in good standing in each jurisdiction in which the
character of the properties owned or leased by it or in which the transaction of
its business makes such qualification necessary.

2.7 Noncircumvention. The Company hereby covenants and agrees that the Company
will not, by amendment of its Certificate or Articles of Incorporation or
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 Note, and will at all times in good faith carry out all
the provisions of this Note and take all action as may be required to protect
the rights of the Holder.

2.8 Lost, Stolen or Mutilated Note. Upon receipt by the Company of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Note, 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 Note, the
Company shall execute and deliver to the Holder a new Note.

ARTICLE III. EVENTS OF DEFAULT

 

It shall be considered an event of default if any of the following events listed
in this Article III (each, an “Event of Default”) shall occur; provided,
however, that, with respect to any default under Sections 3.1 and 3.2, the
Borrower shall have five (5) business days to cure such Event of Default and
with respect to any default under Sections 3.3, 3.4 such default continues for
more than twenty (20) days after the earlier of the date on which (i) Holder has
given notice of such default to Borrower and (ii) Borrower has actual knowledge
of such default:

 

3.1 Failure to Pay Principal or Interest. The Borrower fails to pay the
principal hereof or interest thereon when due on this Note, whether at maturity,
upon acceleration or otherwise.

 

3.2 Conversion and the Shares. The Borrower (i) fails to issue Conversion Shares
to the Holder (or announces or threatens in writing that it will not honor its
obligation to do so) upon exercise by the Holder of the conversion rights of the
Holder in accordance with the terms of this Note, (ii) fails to transfer or
cause its transfer agent to transfer (issue) (electronically or in certificated
form) any certificate for the Conversion Shares issuable to the Holder upon
conversion of or otherwise pursuant to this Note as and when required by this
Note, or (iii) the Borrower directs its transfer agent not to transfer or
delays, impairs, and/or hinders its transfer agent in transferring (or issuing)
(electronically or in certificated form) any certificate for the Conversion
Shares issuable to the Holder upon conversion of or otherwise pursuant to this
Note as and when required by this Note, or fails to remove (or directs its
transfer agent not to remove or impairs, delays, and/or hinders its transfer
agent from removing) any restrictive legend (or to withdraw any stop transfer
instructions in respect thereof) on any certificate for any Conversion Shares
issued to the Holder upon conversion of or otherwise pursuant to this Note as
and when required by this Note (or makes any written announcement, statement or
threat that it does not intend to honor the obligations described in this
paragraph) and any such failure shall continue uncured (or any written
announcement, statement or threat not to honor its obligations shall not be
rescinded in writing) for three (3) business days after the Holder shall have
delivered a Notice of Conversion. It is an obligation of the Borrower to remain
current in its obligations to its transfer agent. It shall be an event of
default of this Note, if a conversion of this Note is delayed, hindered or
frustrated due to a balance owed by the Borrower to its transfer agent. If at
the option of the Holder, the Holder advances any funds to the Borrower’s
transfer agent in order to process a conversion, such advanced funds shall be
paid by the Borrower to the Holder within forty-eight (48) hours of a demand
from the Holder.

 

3.3 Breach of Agreements and Covenants. The Borrower breaches any material
agreement, covenant or other material term or condition contained in the
Purchase Agreement, this Note, the Warrant described in the Purchase Agreement
or in any agreement, statement or certificate given in writing pursuant hereto
or in connection herewith or therewith. Each above mentioned agreement has its
own breach and cure provisions.

 

3.4 Breach of Representations and Warranties. Any representation or warranty of
the Borrower made in the Purchase Agreement, this Note, the Warrant described in
the Purchase Agreement or in any agreement, statement or certificate given in
writing pursuant hereto or in connection herewith or therewith shall be false or
misleading in any material respect when made and the breach of which has (or
with the passage of time will have) a material adverse effect on the rights of
the Holder with respect to this Note or the Purchase Agreement.

 

3.5 Receiver or Trustee. The Borrower or any subsidiary of the Borrower shall
make an assignment for the benefit of creditors, or apply for or consent to the
appointment of a receiver or trustee for it or for a substantial part of its
property or business, or such a receiver or trustee shall otherwise be
appointed.

 

3.6 Judgments. Any money judgment, writ or similar process shall be entered or
filed against the Borrower or any subsidiary of the Borrower or any of its
property or other assets for more than $500,000, and shall remain un-vacated,
un-bonded or un-stayed for a period of twenty (20) days unless otherwise
consented to by the Holder, which consent will not be unreasonably withheld.

 

3.7 Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings, voluntary or involuntary, for relief under any
bankruptcy law or any law for the relief of debtors shall be instituted by or
against the Borrower or any subsidiary of the Borrower.

 

3.8 Delisting of Common Stock. The Borrower shall fail to maintain the listing
of the Common Stock on at least one of the OTCBB, OTC Pink Sheets or any level
of the Nasdaq Stock Market or the New York Stock Exchange (including the NYSE
MKT).

 

3.9 Failure to Comply with the 1933 and 1934 Act. The Borrower shall fail to
comply in any material respect with the reporting requirements of the 1934 Act
and/or the Borrower shall cease to be subject to the reporting requirements of
the 1934 Act. In particular, the Borrower must file with the Commission any
required reports under Section 13 or 15(d) of the 1934 Act such that it remains
in compliance with Rule 144(c)(1) the Securities Act of 1933 (or Rule 144(i)(2)
of, if applicable).

 

3.10 Liquidation. Any dissolution, liquidation, or winding up of Borrower or any
substantial portion of its business.

 

3.11 Cessation of Operations. Any cessation of operations by Borrower or
Borrower admits it is otherwise generally unable to pay its debts as such debts
become due, provided, however, that any disclosure of the Borrower’s ability to
continue as a “going concern” shall not be an admission that the Borrower cannot
pay its debts as they become due.

 

3.12 Maintenance of Assets. The failure by Borrower to maintain any material
intellectual property rights, personal, real property or other assets which are
necessary to conduct its business (whether now or in the future).

 

3.14 Reverse Splits. The Borrower effectuates a reverse split of its Common
Stock without twenty (20) days prior written notice to the Holder.

 

3.15 Replacement of Transfer Agent. In the event that the Borrower proposes to
replace its transfer agent, the Borrower fails to provide, prior to the
effective date of such replacement, a fully executed Irrevocable Transfer Agent
Instructions in a form as initially delivered pursuant to the Purchase Agreement
(including but not limited to the provision to irrevocably reserve shares of
Common Stock in the Reserved Amount) signed by the successor transfer agent to
Borrower and the Borrower.

 

3.16 DTC “Chill”. The DTC places a “chill” for over 30 business days (i.e. a
restriction placed by DTC on one or more of DTC’s services, such as limiting a
DTC participant’s ability to make a deposit or withdrawal of the security at
DTC) on any of the Borrower’s securities.

 

3.17 Illegality. Any court of competent jurisdiction issues an order declaring
this Note, the Purchase Agreement or any provision hereunder or thereunder to be
illegal.

 

3.18 Share Reservation. The Company shall fail to maintain sufficient reserved
shares equal to or greater than the Reserved Amount pursuant to Section 1.3 and
such failure is not cured within 60 business days.

 

3.19 Default Notice. Subject to applicable cure periods, upon the occurrence and
during the continuation of any Event of Default specified in this Article III,
exercisable through the delivery of written notice to the Borrower by the Holder
(the “Default Notice”) (provided, however, that no Default Notice need be
provided by the Holder in the case of the Events of Default specified in
Sections 3.5, 3.6, 3.11, 3.12, or 3.14 above), this Note shall become
immediately due and payable and the Borrower shall pay to the Holder, in full
satisfaction of its obligations hereunder, an amount (the “Default Amount”)
equal to the sum of (i) the Principal Amount, together with accrued interest due
thereon through the date of payment payable at the Holder’s option in cash or
Common Stock and (ii) an additional amount equal to the Principal Amount payable
at the Company’s option in cash or Common Stock . For purposes of payments in
Common Stock, the conversion formula set forth in Section 1.2 shall apply and
the ten (10) consecutive Trading Day pricing period referenced in such section
shall be the ten (10) Trading Days immediately prior to the later of the Event
of Default or the end of the applicable cure period. Upon an uncured Event of
Default, all amounts payable hereunder shall immediately become due and payable,
all without demand, presentment or notice, all of which hereby are expressly
waived, together with all costs, including, without limitation, legal fees and
expenses, of collection, and the Holder shall be entitled to exercise all other
rights and remedies available at law or in equity.

 

ARTICLE IV. MISCELLANEOUS

 

4.1 Failure or Indulgence Not Waiver. No failure or delay on the part of the
Holder in the exercise of any power, right or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any such power,
right or privilege preclude other or further exercise thereof or of any other
right, power or privileges. All rights and remedies of the Holder existing
hereunder are cumulative to, and not exclusive of, any rights or remedies
otherwise available.

 

4.2 Notices. All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing and, unless
otherwise specified herein, shall be (i) personally served, (ii) deposited in
the mail, registered or certified, return receipt requested, postage prepaid,
(iii) delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, e-mail or facsimile, addressed as set
forth below or to such other address as such party shall have specified most
recently by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by e-mail or facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the second business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be:

 

If to the Borrower, to:

 

HISPANICA INTERNATIONAL DELIGHTS OF AMERICA, INC.

575 Lexington Ave., 4th Floor

New York, NY 10022

Attention: Chief Executive Officer

e-mail: foleozo@hidainc.com

 

With a copy to (which copy shall not constitute notice):

 

ROBERT C. LASKOWSKI

LAW OFFICE

520 SWW Yamhill, Suite 600

Portland, OR 97204-1329

Attn: Robert C.Laskowski, Esq.

e-mail: rcl@roblaw.us

 

 

If to the Holder:

To the address set forth on the signature page to the Purchase Agreement

 

With a copy by e-mail only to (which copy shall not constitute notice):

 

Notice@ansonfunds.com

 

4.3 Amendments. This Note and any provision hereof may only be amended by an
instrument in writing signed by the Borrower and the Holder. The term “Note” and
all reference thereto, as used throughout this instrument, shall mean this
instrument as originally executed, or if later amended or supplemented, then as
so amended or supplemented.

 

4.4 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 the Purchase Agreement). 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.

 

4.5 Cost of Collection. If default is made in the payment of this Note, the
Borrower shall pay the Holder hereof costs of collection, including reasonable
attorneys’ fees.

 

4.6 Governing Law. This Note shall be governed by and construed in accordance
with the laws of the State of New York without regard to principles of conflicts
of laws. Any action brought by either party against the other concerning the
transactions contemplated by this Note shall be brought only in the state courts
of New York or in the federal courts located in the state and county of New
York. The Company and the Holder hereby irrevocably waive any objection to
jurisdiction and venue of any action instituted hereunder and shall not assert
any defense based on lack of jurisdiction or venue or based upon forum non
conveniens. THE COMPANY AND THE HOLDER HEREBY IRREVOCABLY WAIVE ANY RIGHT THEY
MAY HAVE, AND AGREE NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY
DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS NOTE. The
prevailing party shall be entitled to recover from the other party its
reasonable attorney’s fees and costs. In the event that any provision of Note is
invalid or unenforceable under any applicable statute or rule of law, then such
provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule of
law. Any such provision which may prove invalid or unenforceable under any law
shall not affect the validity or enforceability of any other provision of this
Note. The Company and the Holder hereby irrevocably waive personal service of
process and consent to process being served in any suit, action or proceeding in
connection with this Note by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Note and agree that such service
shall constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to serve
process in any other manner permitted by law.

 

4.7 Certain Amounts. Whenever pursuant to this Note the Borrower is required to
pay an amount in excess of the outstanding Principal Amount (or the portion
thereof required to be paid at that time) plus accrued and unpaid interest plus
Default Interest on such interest, the Borrower and the Holder agree that the
actual damages to the Holder from the receipt of cash payment on this Note may
be difficult to determine and the amount to be so paid by the Borrower
represents stipulated damages and not a penalty and is intended to compensate
the Holder in part for loss of the opportunity to convert this Note and to earn
a return from the sale of shares of Common Stock acquired upon conversion of
this Note at a price in excess of the price paid for such shares pursuant to
this Note. The Borrower and the Holder hereby agree that such amount of
stipulated damages is not plainly disproportionate to the possible loss to the
Holder from the receipt of a cash payment without the opportunity to convert
this Note into shares of Common Stock.

 

4.8 Purchase Agreement. The Company and the Holder shall be bound by the
applicable terms of the Purchase Agreement.

 

4.9 Rights as a Holder of Common Stock. Except as otherwise provided below, the
Holder of this Note shall have no rights as a Holder of Common Stock unless and
only to the extent that it converts this Note into Common Stock. In the event of
any taking by the Borrower of a record of its shareholders for the purpose of
determining shareholders who are entitled to receive payment of any dividend or
other distribution, any right to subscribe for, purchase or otherwise acquire
(including by way of merger, consolidation, reclassification or
recapitalization) any share of any class or any other securities or property, or
to receive any other right, or for the purpose of determining shareholders who
are entitled to vote in connection with any Change in Control or any proposed
liquidation, dissolution or winding up of the Borrower, the Borrower shall mail
a notice to the Holder, at least twenty (20) days prior to the record date
specified therein (or thirty (30) days prior to the consummation of the
transaction or event, whichever is earlier), of the date on which any such
record is to be taken for the purpose of such dividend, distribution, right or
other event, and a brief statement regarding the amount and character of such
dividend, distribution, right or other event to the extent known at such time.

 

4.10 Remedies. The Borrower acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Holder, by vitiating the intent and
purpose of the transaction contemplated hereby. Accordingly, the Borrower
acknowledges that the remedy at law for a breach of its obligations under this
Note will be inadequate and agrees, in the event of a breach or threatened
breach by the Borrower of the provisions of this Note, that the Holder shall be
entitled, in addition to all other available remedies at law or in equity, and
in addition to the penalties assessable herein, to an injunction or injunctions
restraining, preventing or curing any breach of this Note and to enforce
specifically the terms and provisions thereof, without the necessity of showing
economic loss and without any bond or other security being required.

 

4.11 Construction; Headings. This Note shall be deemed to be jointly drafted by
the Company and all the Holders and shall not be construed against any person as
the drafter hereof. The headings of this Note are for convenience of reference
and shall not form part of, or affect the interpretation of, this Note.

 

 
 

 

IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by
its duly authorized officer this 30th day of September, 2016.

 

HISPANICA INTERNATIONAL DELIGHTS OF AMERICA, INC.

 

 

By: /s/ Fernando Oswaldo Leonzo     Name: Fernando Oswald Leonzo     Title: 
Chief Executive Officer  

 

 
 

EXHIBIT A -- NOTICE OF CONVERSION

 

The undersigned hereby elects to convert $______________ principal amount of the
Note (defined below) into that number of shares of Common Stock to be issued
pursuant to the conversion of the Note (“Common Stock”) as set forth below, of
HISPANICA INTERNATIONAL DELIGHT OF AMERICA, INC., a Delaware corporation (the
“Borrower”) according to the conditions of the Convertible Promissory Note of
the Borrower dated as of September 30, 2016 (the “Note”), as of the date written
below.

 

Box Checked as to applicable instructions:

 

☐   The Borrower shall electronically transmit the Common Stock issuable
pursuant to this Notice of Conversion to the account of the undersigned or its
nominee with DTC through its Deposit Withdrawal Agent Commission system (“DWAC
Transfer”).           Name of DTC Prime Broker:     Account Number:

 

☐   The undersigned hereby requests that the Borrower issue a certificate or
certificates for the number of shares of Common Stock set forth below (which
numbers are based on the Holder’s calculation attached hereto) in the name(s)
specified immediately below or, if additional space is necessary, on an
attachment hereto:          

 

 

 

 

    Date of Conversion:       Applicable Conversion Price: $     Number of
Shares of Common Stock to be issued Pursuant to Conversion of the Note:

 

 

    Amount of Principal Balance Due remaining under the Note after this
conversion:

 

 

       

 

  By:       Name:       Title:       Date: