EXHIBIT 10.13
 

SUMMARY TERM SHEET

For Discussion Purposes Only

This Summary Term Sheet (the "Term Sheet") sets forth the principal terms
pursuant to which, subject to certain conditions set forth herein, The Investor
would agree to purchase certain securities of Fresh Healthy Vending
International, Inc. (the "Company" or "VEND"), and the Company would sell such
securities to the Investor (the "Transaction"). The terms and conditions set
forth herein are subject to change and this Term Sheet does not constitute an
offer. Except for the paragraph entitled "No Short Sales"; nothing in this Term
Sheet is binding on either of the parties. The issuance and sale of such
securities is subject to completion of ongoing due diligence to the Investor's
satisfaction, the preparation of definitive documentation that is mutually
satisfactory to the parties and, in the case of the Investor, that the Investor
shall have determined that, subsequent to the date hereof and prior to the
closing of the Transaction, there shall have been no material adverse
developments relating to the business, assets, operations, properties, condition
(financial or otherwise) or prospects of the Company and its subsidiaries. It is
contemplated that the Company is offering the securities on a best efforts,
confidential, private basis to the Investor, which is an accredited investor,
pursuant to the exemption afforded by Rule 506(b) of Regulation D of the
Securities Act of 1933, as amended.

Company                                        Fresh Healthy Vending
International, Inc., a Nevada corporation.

Business Fresh Healthy Vending International, Inc., a franchise development
company, and its franchisees, operate approximately 2,300 vending machines that
provide natural, organic, and healthy food and beverage products in North
America, the Bahamas, and Puerto Rico. The Company and its franchisees also
offer food and beverage vending products through an Ecommerce platform. The
company is headquartered in San Diego, California.

 
Units Offered
Dollar Amount
$600K of Units
Securities
Unit comprised of:
(i)  10% Convertible Promissory Notes; and
(ii)    100% Common stock purchase warrants (the "Warrants") coverage, with a
term of 4 years, exercisable 6 months after issuance with a warrant strike price
of $0.75 per share price of the Company's common stock. Warrants will have a
cashless exercise feature.
Purchase Price
$50,000 Principal Amount of Note with ½ Notes available
Maturity Date
12 months with a one-time 3 month extension at election of Company.
In the event of extension, interest will be increased to 13% and shares equal to
3% of the conversion shares valued at $.30 per share shall be immediately
issued.
Conversion
The Convertible Notes, plus accrued interest, may be converted at any time in
whole or in part, at the lesser of:
(i)            25% discount to the next round of financing prior to conversion
in excess of $1M; or
(ii)            $0.30 per share; or,
(iii)            Commencing 6 months after issuance date, at the Investor's sole
discretion, at 20% discount to the lowest trading price 10 business days prior
to conversion.
Registration Rights
Piggyback Registration Rights.

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Anti-Dilution
There will be a full ratchet, anti-dilution with respect to the shares of Common
Stock only (no adjustments will be made to the Warrants), for any equity or
Convertible Debt financing completed or a definitive Term Sheet exercised within
12 months of closing or 15 months if the Company exercises its one-time
extension (see "Term" below). The ratchet does not come into effect for any
non-convertible debt offering only arranged by the Company, its advisors or
bankers. In addition, the Company agrees NOT to accept any "floorless"
Convertible Debt financing during the Term of the Notes, and acceptance of any
such type of instrument will be considered a default of the Note.
Interest
10%,
13% in the event of the 3 month extension, Thereafter, 18 % in the event of a
default,
Interest shall be adjusted so that it does not exceed the maximum interest rate
permissible by law.
Interest payable in cash or kind with the election to the Noteholders.
Interest paid in kind shall be at the lesser of $0.30 or the 3 day low average
of the 10 day proceeding closing bid price prior to the date the interest is
due.
Events of Default
To be discussed.
Protective Provisions*
For so long as any portion of the Notes or at least 40% of the Conversion Shares
are owned by the Investor(s), the Company shall not, absent consent of the
majority in interest of the Investors:
(i)          make any loan or advance in excess of $100,000 to any person or
entity;
(ii)          guarantee any indebtedness of any person or entity other than the
Company or its wholly owned subsidiaries or enter into any transaction or
agreement with any officers, directors or affiliated parties;
(iii)          make any investment in securities other than wholly owned
subsidiaries or regular money market facilities
(iv)          incur any aggregate indebtedness in excess of $250,000 that is not
already included in a Board-approved budget;
(v)    hire, fire, or change the compensation of the executive officers or
management, including approving any option grants thereto;
(vi)          change the principal business of the Company, enter new lines of
business, or exit the current line of business;
(vii)          sell, assign, license, pledge or encumber material technology or
intellectual property except in the ordinary course of business, consistent with
past practice;

 

 

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(viii)          enter into any corporate strategic relationship involving the
payment, contribution or assignment by the Company or to the Company of assets
greater than $250,000;
(ix)          decide to liquidate, dissolve, wind up, merge or consolidate the
Company; or
(x)          sell, lease, transfer, license or dispose of all or substantially
all of the assets of the Company, except that notwithstanding this subsection
and sub section
(ix) above, any merger, consolidation and/or sale of all or substantially all of
the Company's assets or shares.
* Aforementioned applicable until conversion, and see Nick Yates Employment
Agreement re indebtedness.
Use of Proceeds
General Working Capital with only up to $500,000 to repay outstanding senior
indebtedness.

SEC Filings The Company will be responsible for timely filing of all required
documents including Form D, and blue sky filings, and will pay for all legal
opinions of Company counsel associated with all future Rule 144 sales of the
Investor with respect to the securities sold.

Opinion of Counsel At closing, and among other deliverables customary for a
financing of this kind (officer and secretary certificates, updated financial
statements etc.), counsel for the Company shall issue an opinion reasonably
satisfactory to the Investor, opining as to the due authorization and issuance
of the Notes and Warrants, the reservation and approval of issuance of the
common stock underlying the Warrants upon conversion of any part of the Notes,
exercise of the Warrants (the "Warrant Shares"), and that all common stock
issued or issuable is fully paid and nonassessable.  The "Transaction Documents"
shall include, the Subscription Agreement, Note and Warrant issued to Investors.
The specific opinion matters to be opined on are as follows (with specific
language to be approved by counsel for Investor):

1. The Company (and its subsidiaries) is a corporation validly formed and in
good legal standing under the laws of an acceptable state. The Company has the
corporate power to own, lease and operate its properties and to conduct its
business as described in the Offering Documents. The Company has (a) the
corporate power to execute, deliver and perform its obligations, (b), taken all
corporate action necessary to authorize the execution, delivery and performance,
and (c) duly executed and delivered the Transaction Documents. The company owns
marketable title to all of its subsidiaries.

2. The Transaction Documents have been duly authorized and are valid and binding
obligations of the Company, enforceable against the Company in accordance with
their respective terms.

3. No authorization, approval, consent or license of any U.S. governmental or
regulatory body, agency or instrumentality is required in connection with the
authorization, issuance, transfer, sale or delivery of the Convertible
Promissory Notes and Warrants, the Selling Agent's Warrants, and the shares of
Common Stock underlying the securities except as may be required pursuant to the
federal securities laws and state blue sky laws.

4. The execution and delivery of the Transaction Documents by the Company, the
consummation by the Company of the transactions therein contemplated and the
compliance with the terms of the Transaction Documents do not and will not
conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, the certificate of incorporation or bylaws of the
Company.

5. The conversion shares and warrant shares have been duly authorized and
approved for issuance and, when issued upon conversion of the Notes and interest
or exercise of the Warrants, will also be deemed validly issued, fully paid and
non assessable in all respects.

6. The issuance of the Shares and the Warrants and entry into the Transaction
Documents, does not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, the certificate of incorporation
or bylaws of the Company.

7. The Company complied in all material respects with Regulation D of the
Securities Act with regard to the Offering and the offering and sale of the
Units were not required to be registered under the Securities Act.

8. No Litigation.

 

 

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OTHER MATTERS
 
Governing law
The legal documents to be prepared shall be governed by the laws of the State of
California; jurisdiction will be the State of California as well. Any
controversy between the parties hereto involving the construction or application
of any terms, covenants or conditions of this Agreement, or any claims arising
out of or relating to this Agreement or the breach hereof or thereof, will be
submitted to and settled by arbitration in San Diego, California, in accordance
with the rules of the America's Arbitration Association that in effect, and
judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof. In the event of any arbitration under this
Agreement, both parties agree to be responsible for and pay their own
arbitration (i.e. filing) and legal fees, said failure to do so is to be
considered an immediate default. In addition, upon default, Investor shall be
entitled to recover all reasonable legal fees and miscellaneous costs incurred
in the enforcement or collection of any judgment or award rendered therein.
No Short Sales
Following the execution of this Term Sheet and until the earlier of the exercise
in full or expiration of the Warrants, neither the Investor nor any of its
affiliates or members shall sell short any of the Company's securities or take
any other action that would have the effect of depressing the value of the
Company's common stock.
 
 

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*REMINDER, ALL DEFINITIVE OFFERING DOCUMENTS SUBJECT TO COUNSEL REVIEW AND
SATISFACTION

EXECUTED AS OF THIS 30th DAY OF JUNE, 2015

Fresh Healthy Vending International, Inc.

By /s/Arthur Scott Budman             
Name: Arthur Scott Budman
Title: CEO

cc: Nicholas Yates

The Investor's Representative

By:  /s/Jeffrey
Stuber                                                                           
Name: Jeffrey Stuber                     
Title: CEO