Exhibit 10.1

 

AMENDMENT NO. 7 TO CONVERTIBLE LOAN AGREEMENT

 

THIS AMENDMENT NO. 7 TO CONVERTIBLE LOAN AGREEMENT (this “Amendment”), dated as
of December 28, 2018, is made by and between Hickok Incorporated, an Ohio
corporation (“Borrower”), and Roundball, LLC, an Ohio limited liability company
(“Roundball,” and together with Borrower, the “Parties”). Capitalized terms used
but not otherwise defined herein shall have the meanings ascribed to them in the
Loan Agreement (as defined below).

 

RECITALS

 

WHEREAS, Borrower and Roundball are parties to that certain Convertible Loan
Agreement dated December 30, 2011, as amended by Amendment No. 1 thereto dated
December 30, 2012, Amendment No. 2 thereto dated December 30, 2013, Amendment
No. 3 thereto dated December 31, 2014, Amendment No. 4 thereto dated December
30, 2015, Amendment No. 5 thereto dated December 20, 2016, and Amendment No. 6
thereto dated December 29, 2017 (collectively, the “Agreement”); and

 

WHEREAS, Borrower and Roundball desire to amend the Loan Agreement to (i) expand
Roundball’s Conversion Option thereunder; and (ii) to extend the
Roundball/Borrower Option Maturity Date with respect to any borrowings made
under the Loan Agreement, to provide for a form of note evidencing any such
borrowings and to further amend certain terms of the Loan Agreement to reflect
the extension contemplated hereby.

 

NOW, THEREFORE, in consideration of the foregoing and for other consideration,
the receipt of which is hereby acknowledged, the Parties hereby agree as
follows:

 

1.     The form of the Roundball/Borrower Option Note attached hereto shall be
deemed to be attached as Exhibit F to the Loan Agreement and replace the
existing form of such Roundball/Borrower Option Note in its entirety.

 

2.      Section 2.2.1 of the Loan Agreement is hereby amended to read in its
entirety as follows:

 

“2.2.1     Lender Conversion Option. At the option of the applicable Lender, the
principal and interest on the applicable Note may, at any time while any
Obligations under such Note remain outstanding, or in case either Note or some
portion thereof shall be called for prepayment prior to such date, then, with
respect to such Note or portion thereof as is called for prepayment, until and
including, but (if no default is made in the payment of the prepayment price)
not after, the close of business on the date that is three (3) days prior to the
date fixed for such prepayment, be converted, in whole or in part, into fully
paid and non-assessable Conversion Shares at the Conversion Price (the “Lender
Conversion Option”); provided, however, in no event shall the Aplin Note be
convertible into more than 112,752 Conversion Shares; provided, further, that,
(i) upon the exercise by Roundball of the Lender Conversion Option, Roundball
shall have the option, exercisable in its sole discretion and subject to
requisite approval by the shareholders of the Company, to elect to purchase up
to 75,000 shares of Class B Common Stock of the Company (the “Class B Conversion
Shares”) at the Conversion Price, with the remaining portion of the applicable
Note being converted into Conversion Shares at the Conversion Price in
accordance with the terms hereof; and (ii) in the event that the issuance of the
Class B Conversion Shares is not approved by the requisite number of
shareholders, Roundball shall have the option to convert the principal and
interest on the applicable Note into Conversion Shares pursuant to and in
accordance with the terms and conditions of this Section 2.2.1. If and whenever
on or after the Closing Date, the Borrower issues or sells, or in accordance
with this Section 2.2.1, is deemed to have issued or sold, any Equity Interests
of Borrower (including the issuance or sale of shares of Common Stock owned or
held by or for the account of the Borrower, but excluding shares of Common Stock
deemed to have been issued or sold by the Borrower in connection with an Exempt
Offering) for a consideration per share (the “New Issuance Price”) less than a
price equal to the Conversion Price in effect immediately prior to such issue or
sale (the foregoing a “Dilutive Issuance”), then immediately after such Dilutive
Issuance, the Conversion Price then in effect shall be reduced to an amount
equal to the New Issuance Price.

 

 

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3.     The representations and warranties of Borrower set forth in Section 5 of
the Loan Agreement are hereby affirmed in their entirety as if made on the date
hereof, with the exception of the following:

 

(a)        Section 5.2(a) of the Loan Agreement is hereby amended to read in its
entirety as follows:

 

“5.2     Capitalization. The authorized capital stock of Borrower consists of
10,000,000 shares of Class A Common Stock, of which 2,114,886 shares were issued
and outstanding as of the close of business on September 30, 2018, and 2,500,000
shares of Class B Common Stock, of which 773,616 shares were issued and
outstanding as of the close of business on September 30, 2018. As of September
30, 2018, 15,795 shares of Class A Common Stock and 5,667 shares of Class B
Common Stock were held in treasury by Borrower. All of the outstanding Shares
have been duly authorized and are validly issued, fully paid and nonassessable.
Other than 150,000 shares of Class A Common Stock reserved for issuance under
Borrower’s 2013 Omnibus Equity Plan, 5,000 shares of Class A Common Stock
reserved for issuance under Borrower’s other stock option plans, 326,489 shares
of Class A Common Stock reserved for issuance to Roundball in accordance with
the provisions of this Agreement, and 100,0000 shares of Class A Common Stock,
issuable upon the exercise of warrants issued to Roundball in accordance with
the terms of the Warrant Agreement dated December 30, 2012, Borrower has no
shares of any class of capital stock reserved for issuance.”

 

(b)        Section 5.5 of the Loan Agreement is amended to delete the words
“September 30, 2017, and to substitute therefore the words “September 30, 2018.”

 

4.     The representations and warranties of Roundball set forth in Section 6 of
the Loan Agreement are hereby affirmed in their entirety as if made on the date
hereof, with the exception of the following:

 

(a)       Section 6.4 of the Loan Agreement is amended to read in its entirety
as follows:

 

6.4     Disclosure and Access to Information. Roundball acknowledges that it has
received and reviewed a copy of Borrower’s (a) Annual Report on Form 10-K for
the fiscal year ending September 30, 2017; (b) Annual Report on Form 10-K for
the transition period from October 1, 2017 to December 31, 2017; (c) Proxy
Statement for its Annual Meeting of Shareholders filed with the SEC on January
29, 2018; (d) Quarterly Reports on Form 10-Q for the periods ending March 31,
2018, June 30, 2018 and September 30, 2018; (e) Current Reports on Form 8-K
filed December 21, 2017, February 14, 2018, May 15, 2018, May 18, 2018, June 6,
2018, July 6, 2018, July 11, 2018, August 15, 2018, September 13, 2018, and
November 15, 2018; (f) unaudited balance sheet dated September 30, 2018. In
addition, Roundball acknowledges that it and its representatives have had access
to such additional information concerning Borrower as it deemed necessary or
appropriate to make an informed investment decision with respect to the
transactions contemplated by this Agreement, including access to and an
opportunity to ask questions of Borrower’s management (which questions have been
responded to by such persons to Roundball’s satisfaction).

 

5.     The parties agree that the amendments set forth herein shall apply from
and after the date hereof and that nothing contained herein shall be deemed to
modify or waive any rights or obligations under the Loan Agreement existing
prior to that date.

 

[Signature Page Follows.]

 

 

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IN WITNESS WHEREOF, the parties have duly executed this Amendment by their duly
authorized officers as of the date first above written.

 

 

 

 

 

HICKOK INCORPORATED

 

ROUNDBALL LLC

 

 

 

 

 

By:

/s/ Brian E. Powers

 

By:

/s/ Frederick Widen

Name:

Brian Powers

 

Name:

Frederick Widen

Title:

President and CEO 

 

Title:

Manager

                              

 

[Signature Page to Amendment No. 7 to Convertible Loan Agreement]

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EXHIBIT F

 

CONVERTIBLE

 

PROMISSORY NOTE

 

$_________ Akron, Ohio

 

_______ __, 2019

 

FOR VALUE RECEIVED, Hickok Incorporated, an Ohio corporation (“Borrower”),
hereby promises to pay to the order of Roundball LLC, an Ohio limited liability
company, its successors and assigns (herein referred to as “Holder”), with an
address of 25101 Chagrin Boulevard, Suite 350, Beachwood, Ohio 44122, or at such
other place as the Holder may from time to time designate, the principal sum of
_____________ Dollars ($__0,000) (the “Loan”), with interest thereon at the time
and in the manner set forth herein.

 

1.      Loan Agreement. This Convertible Promissory Note (“Note”) has been
executed and delivered by Borrower pursuant to the terms of that certain
Convertible Loan Agreement, dated of as of December 30, 2011, as amended by
Amendment No. 1 thereto dated December 30, 2012, Amendment No. 2 thereto dated
December 30, 2013, Amendment No. 3 thereto dated December 31, 2014, Amendment
No. 4 thereto dated December 30, 2015, Amendment No. 5 thereto dated December
20, 2016, Amendment No. 6 thereto dated December 29, 2017 and Amendment No. 7
thereto dated December [●], 2018 (collectively, the “Loan Agreement”). All
capitalized terms used but not defined herein shall have the meanings ascribed
to such terms in the Loan Agreement.

 

2.     Principal and Interest.

 

(a)     The unpaid principal balance of this Note shall bear interest at a rate
equal to 0.34% per annum, computed monthly.

 

(b)     If full payment of the principal and interest is not made when due, the
amount of the unpaid interest shall be added to the principal balance of this
Note.

 

(c)     Interest shall be payable on the Maturity Date (as defined below).
Interest shall be computed on the basis of the actual number of days elapsed
over a 360-day year.

 

(d)     If all or any portion of the principal balance or any of the accrued
interest under this Note shall not be paid for any reason by the Maturity Date
or on such earlier date that payment becomes due pursuant to the Loan Agreement
or this Note, then all accrued and unpaid interest at such date shall be added
to and become part of the unpaid principal balance at the Maturity Date or the
date of acceleration, whichever is earlier.

 

3.      Term. The entire principal balance of this Note, together with all
accrued interest thereon, shall be due and payable on December 30, 2019, unless
(a) accelerated as set forth in Section 7, (b) the Holder, in its sole and
absolute discretion, exercises its Lender Conversion Option, in whole, pursuant
to Section 2.2.2 of the Loan Agreement prior to December 30, 2019, or (c)
Borrower exercises its Borrower Conversion Option pursuant to Section 2.2.5 of
the Loan Agreement (the “Maturity Date”).

 

4.      Prepayment. Borrower may prepay the Note, in whole or in part, at any
time upon notice as provided for in the Loan Agreement, subject to Holder's
conversion rights upon prepayment set forth in Section 2.2.1 therein.

 

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5      Application of Payments. All payments made hereunder shall be applied
first to the reasonable expenses, if any, including reasonable attorney's fees,
of the Holder incurred in the collection of this Note following default, then to
accrued interest, which shall be due and payable upon any prepayment, and then
to principal.

 

6.      Conversion. This Note is subject to, and entitled to the benefits of,
the Lender Conversion Option and the Borrower Conversion Option set forth in
Section 2.2 of the Loan Agreement. Nothing in this Note is intended to limit
such conversion privileges and to the extent there is any inconsistency between
the terms of this Note and such conversion privileges, the terms of the Loan
Agreement shall govern. Borrower acknowledges that, if Holder converts a
portion, but less than all, of this Note pursuant to the exercise of its Lender
Conversion Option, Borrower shall cancel this Note and execute and deliver to
Lender a replacement Note in the aggregate principal amount of the unconverted
portion of the Note surrendered.

 

7.      Events of Default. If any of the “Events of Default” as that term is
defined in Section 11 of the Loan Agreement, shall occur and shall not be cured
within the time limits set forth in said Section 11, then, the principal amount
of this Note, together with all accrued and unpaid interest thereon and all
other amounts payable under this Note may become, or may be declared to be, due
and payable in the manner, upon the conditions and with the effect provided in
the Loan Agreement.

 

8.      Payment of Costs and Expenses. Borrower agrees to pay all losses, costs
and expenses, including reasonable attorneys’ fees, in connection with the
enforcement of the Note, the Loan Agreement and any other instruments and
documents delivered in connection herewith sustained as a result of the
occurrence of an Event of Default by Borrower.

 

9.      Amendments. The terms of this Note are subject to amendment only in the
manner provided for in the Loan Agreement.

 

10.    Invalidity of any Provisions in Note. If, for any reason, any of the
terms or provisions (or any part of any provision) hereof are found to be
invalid, illegal, unenforceable or contrary to any applicable law, such
invalidity, illegality or unenforceability shall not affect any other provision
(or any remaining part of any provision) of this Note, but this Note shall be
construed as if such invalid, illegal or unenforceable provision (or any part
thereof) had never been contained herein, and Borrower hereby agrees that this
Note shall still remain in full force and effect subject only to the exclusion
of those terms or provisions (and only to the extent to which such terms or
provisions) shall have been found invalid, illegal, unenforceable or contrary to
any such applicable law.

 

11.      Presentment, Demand and Notice Waived. Borrower waives presentment for
payment, demand and notice of demand, notice of non-payment, protest and notice
of protest, notice of dishonor and trial by jury in any litigation arising out
of, relating to, or connected with this Note, the Loan Agreement or any other
Loan Document.

 

12.      Governing Law. This Note shall be governed and construed in accordance
with the laws of the State of Ohio (but not including the choice of law rules
thereof).

 

 

[Signature Page Follows.]

 

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IN WITNESS WHEREOF, Borrower has caused this Note to be executed by its duly
authorized officer as of the date first above written.

 

HICKOK INCORPORATED

 

 

By: ___________________

 

Its: President and CEO 

 

 

 

  [Signature Page to Convertible Promissory Note] 6