EXHIBIT 10.4

REGISTRATION RIGHTS AGREEMENT

 

This REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into
as of September 30, 2016, by and between HISPANICA INTERNATIONAL DELIGHTS OF
AMERICA INC., a Delaware corporation, with headquarters located at 575 Lexington
Ave., 4th Floor, New York, NY 10022(the “Company”), and Anson Investments Master
Fund LP, a limited liability company, with its address at190 Elgin Avenue George
Town Grand Cayman (the “Buyer”).

 

This Agreement is being entered into pursuant to the Securities Purchase
Agreement, dated as of the date hereof, between the Company and the Buyer (the
“Purchase Agreement”).

 

The Company and the Buyer hereby agrees as follows:

 

1.  Definitions. In addition to the other capitalized terms used and defined
elsewhere herein, as used in this Agreement, the following terms shall have the
following meanings:

 

“Commission” means the Securities and Exchange Commission.

 

“Common Stock” means the shares of Common Stock, $0.001 par value per share of
the Company.

 

“Conversion Shares” means the shares of Common Stock underlying the Note.

 

“Conversion Share Amount” means a number of Conversion Shares equal to
2,030,770, which amount represents an agreed to, good faith estimate of the
number of Conversion Shares to be included as Registrable Securities hereunder.

 

“Effectiveness Date” means, (a) with respect to the Initial Registration
Statement required to be filed hereunder, the 60th calendar day following the
Closing Date (or, if the Initial Registration Statement is reviewed by the
Commission, the 120th calendar day following the Filing Date) and (b) with
respect to the additional Registration Statement required to be filed (if
applicable) pursuant to Section 2(b), the 60th calendar day following the
Conversion Share Registration Failure (or, if such additional Registration
Statement is reviewed by the Commission, the 120th calendar day following the
Conversion Share Registration Failure).

 

“Exchange Act” means the Securities Exchange Act of 1934 and the rules
promulgated thereunder, as amended.

 

“Filing Date” means the 45th calendar day following the sale, and receipt of
proceeds, of an aggregate of $400,000 of Notes to the Buyer and/or third party
investors on the same terms and conditions set forth in the Purchase Agreement.

 

“Holder” or “Holders” means the holder or holders, as the case may be, from time
to time of Registrable Securities, including the Buyer.

 

“Initial Registration Statement” means the initial Registration Statement
covering the Registrable Securities filed pursuant to this Agreement.

 

“Issuance Shares” means the 1,100,000 shares of Common Stock sold and issued to
the Buyer pursuant to the Purchase Agreement.

 

“Note” means the Convertible Promissory Note sold or to be sold to the Buyer
pursuant to the Purchase Agreement.

 

“Person” means an individual or a corporation, partnership, trust, incorporated
or unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or political subdivision thereof) or
other entity of any kind.

 

“Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an informal investigation or partial proceeding,
such as a deposition), whether commenced or threatened.

 

“Prospectus” means the prospectus included in a Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated by the Commission pursuant to
the Securities Act), as amended or supplemented by any prospectus supplement,
with respect to the terms of the offering of any portion of the Registrable
Securities covered by a Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in
such Prospectus.

 

“Registrable Securities” means (a) (if applicable) any Conversion Share Failure
Amount (as defined in Section 2(b), (b) an aggregate of up to 8,000,000
Conversion Shares, Issuance Shares, Warrant Shares and (c) any securities issued
or issuable upon any stock split, dividend or other distribution,
recapitalization or similar event with respect to the foregoing; provided that
“Registrable Securities” shall not include any shares of Common Stock owned by
the Buyer which are then the subject of an effective Registration Statement or
otherwise eligible to be sold without volume limitations pursuant to Rule
144(b).

 

“Registration Statement” means any registration statement required to be filed
hereunder pursuant to Section 2 hereof, including the Prospectus, amendments and
supplements to any such registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto, and all material incorporated
by reference or deemed to be incorporated by reference in any such registration
statement.

 

“Rule 415” means Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended or interpreted from time to time, or
any similar rule or regulation hereafter adopted by the Commission having
substantially the same purpose and effect as such Rule.

 

“Rule 424” means Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended or interpreted from time to time, or
any similar rule or regulation hereafter adopted by the Commission having
substantially the same purpose and effect as such Rule.

 

“SEC Guidance” means any publicly-available written or oral guidance, comments,
requirements or requests of the Commission staff, including the Commission’s
Compliance and Disclosure Interpretations and Manual of Publicly Available
Telephone Interpretations.

 

“Securities Act” means the Securities Act of 1933 and the rules promulgated
thereunder, as amended.

 

“Shares” means the shares of Common Stock sold pursuant to the Purchase
Agreement.

 

“Warrant” means the common stock purchase warrant issued the Buyer pursuant to
the Purchase Agreement.

 

“Warrant Shares” means the 400,000 shares Common Stock issuable upon exercise of
the Warrant.

 

2. Registration

 

(a) Mandatory Registration. On or prior to the Filing Date, the Company shall
prepare and file with the Commission the Initial Registration Statement covering
the resale of all of the Registrable Securities for a resale offering to be made
on a continuous basis. Subject to the terms of this Agreement, the Company shall
use its reasonable best efforts to cause the Initial Registration Statement to
be declared effective under the Securities Act as promptly as possible after the
filing thereof, but in any event prior to the applicable Effectiveness Date, and
shall use its reasonable best efforts to keep the Initial Registration Statement
continuously effective under the Securities Act until the earlier to occur of
(i) the date on which the Buyer or any Holder may sell all Registrable
Securities then held without restriction by volume limitations of Rule 144
promulgated under the Securities Act of 1933 (“Rule 144”), or (ii) all
Registrable Securities covered by such Registration Statement have been sold by
such Holder (the “Effectiveness Period”).

 

(b) Additional Registration. If at any time while the Buyer holds Registrable
Securities the Initial Registration Statement does not register for resale all
of the Conversion Shares (i.e., if the Conversion Share Amount is insufficient
to have registered all Conversion Shares issuable on Conversion of the Note)
(such even, a “Conversion Share Registration Failure”), then the Company shall
use its best efforts to file an additional registration statement to cover the
additional note conversion shares needed for full conversion within 45 business
days. Notwithstanding the foregoing, the Company will have no obligation to file
such additional registration statements if the additional note conversion shares
would be subject to immediate release, without volume or other limitations and
reliance on Rule 144 at the time of conversion.

 

(c) [RESERVED]

 

(d) Subject to the payment of liquidated damages payable pursuant to clause (e)
below, in the event that the Commission does not permit the Company to register
in any Registration Statement all of the Registrable Securities, the Company
shall amend such Registration Statement to register such maximum portion as
permitted by SEC Guidance, including such guidance pertaining to Rule 415
(provided that the Company shall use diligent efforts to advocate with the
Commission for the registration of all of the Registrable Securities in
accordance with the SEC Guidance that are not then registered on an effective
Registration Statement). Notwithstanding any other provision of this Agreement,
if any SEC Guidance sets forth a limitation on the number of Registrable
Securities permitted to be registered on a particular Registration Statement
(and notwithstanding that the Company used diligent efforts to advocate with the
Commission for the registration of all or a greater portion of Registrable
Securities), unless otherwise directed in writing by a Holder as to its
Registrable Securities, the number of Registrable Securities to be registered on
such Registration Statement will be reduced pro-rata among all other Holders,
and unless otherwise directed in writing by a Holder as to its Registrable
Securities, the number of Registrable Securities to be registered on such
Registration Statement will first be reduced by Registrable Securities
represented by the Warrant Shares (applied, in the case that some Warrant Shares
may already be registered, to the Holders on a pro rata basis based on the total
number of unregistered Warrant Shares held by such Holders), and second by
Registrable Securities represented by the Issuance Shares (applied, in the case
that some Common Stock may already be registered, to the Holders on a pro rata
basis based on the total number of unregistered Issuance Shares held by such
Holders) and third by Registrable Securities represented by the Conversion
Shares (applied, in the case that some Common Stock may already be registered,
to the Holders on a pro rata basis based on the total number of unregistered
Conversion Shares held by such Holders).

 

(e) If: (i) the initial Registration Statement is not filed on or prior to its
Filing Date (if the Company files the initial Registration Statement without
affording the Holders the opportunity to review and comment on the portions
relating to their securities ownership, the Company shall be deemed to have not
satisfied this clause (i)), or (ii) the Company fails to file with the
Commission a request for acceleration of a Registration Statement in accordance
with Rule 461 promulgated by the Commission pursuant to the Securities Act,
within five (5) Trading Days of the date that the Company is notified (orally or
in writing, whichever is earlier) by the Commission that such Registration
Statement will not be “reviewed” or will not be subject to further review, or
(iii) prior to the effective date of a Registration Statement, the Company fails
to file a pre-effective amendment and otherwise respond in writing to comments
made by the Commission in respect of such Registration Statement within ten (10)
calendar days after the receipt of comments by or notice from the Commission
that such amendment is required in order for such Registration Statement to be
declared effective, or (iv) a Registration Statement registering for resale all
of the Registrable Securities is not declared effective by the Commission by the
Effectiveness Date of the Initial Registration Statement, or (v) after the
effective date of a Registration Statement, such Registration Statement ceases
for any reason to remain continuously effective as to all Registrable Securities
included in such Registration Statement, or the Holders are otherwise not
permitted to utilize the Prospectus therein to resell such Registrable
Securities, for more than ten (10) consecutive calendar days or more than an
aggregate of fifteen (15) calendar days (which need not be consecutive calendar
days) during any 12-month period (any such failure or breach being referred to
as an “Event”, and for purposes of clauses (i) and (iv), the date on which such
Event occurs, and for purpose of clause (ii) the date on which such five (5)
Trading Day period is exceeded, and for purpose of clause (iii) the date which
such ten (10) calendar day period is exceeded, and for purpose of clause (v) the
date on which such ten (10) or fifteen (15) calendar day period, as applicable,
is exceeded being referred to as “Event Date”), then, in addition to any other
rights the Holders may have hereunder or under applicable law, on each such
Event Date, the Company shall pay to the Holder the sum of $40,000, and on each
monthly anniversary of each such Event Date (if the applicable Event shall not
have been cured by such date) until the applicable Event is cured, the Company
shall pay to each Holder an amount in cash, as partial liquidated damages and
not as a penalty, equal to the product of 2.0% multiplied by the aggregate
Subscription Amount paid by such Holder pursuant to the Purchase Agreement. If
the Company fails to pay any partial liquidated damages pursuant to this Section
in full within seven days after the date payable, the Company will pay interest
thereon at a rate of 18% per annum (or such lesser maximum amount that is
permitted to be paid by applicable law) to the Holder, accruing daily from the
date such partial liquidated damages are due until such amounts, plus all such
interest thereon, are paid in full. The partial liquidated damages pursuant to
the terms hereof shall apply on a daily pro rata basis for any portion of a
month prior to the cure of an Event.

 

3. Registration Procedures.

 

In connection with the Company’s registration obligations hereunder, the Company
shall:

 

(a)  Prepare and file with the Commission such amendments, including
post-effective amendments, to a Registration Statement and the Prospectus used
in connection therewith as may be necessary to keep a Registration Statement
continuously effective as to the applicable Registrable Securities for the
Effectiveness Period, (ii) cause the related Prospectus to be amended or
supplemented by any required Prospectus supplement (subject to the terms of this
Agreement), and, as so supplemented or amended, to be filed pursuant to Rule
424, (iii) respond as promptly as reasonably possible to any comments received
from the Commission with respect to a Registration Statement or any amendment
thereto, and (iv) comply in all material respects with the provisions of the
Securities Act and the Exchange Act with respect to the disposition of all
Registrable Securities covered by a Registration Statement during the applicable
period in accordance (subject to the terms of this Agreement) with the intended
methods of disposition by the Holders thereof set forth in such Registration
Statement as so amended or in such Prospectus as so supplemented.

 

(b)  Notify the Holders of Registrable Securities to be sold (which notice
shall, pursuant to clauses (iii) through (vi) hereof, be accompanied by an
instruction to suspend the use of the Prospectus (entirely or in a particular
jurisdiction, as the case may be) until the requisite changes have been made) as
promptly as reasonably possible (and, in the case of (i)(A) below, not less than
one (1) Trading Day prior to such filing) and (if requested by any such Person)
confirm such notice in writing no later than one (1) Trading Day following the
day (i)(A) when a Prospectus or any Prospectus supplement or post-effective
amendment to a Registration Statement is proposed to be filed, (B) when the
Commission notifies the Company whether there will be a “review” of such
Registration Statement and whenever the Commission comments in writing on such
Registration Statement, and (C) with respect to a Registration Statement or any
post-effective amendment, when the same has become effective, (ii) of any
request by the Commission or any other federal or state governmental authority
for amendments or supplements to a Registration Statement or Prospectus or for
additional information, (iii) of the issuance by the Commission or any other
federal or state governmental authority of any stop order suspending the
effectiveness of a Registration Statement covering any or all of the Registrable
Securities or the initiation of any Proceedings for that purpose; (iv) of the
receipt by the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of any
Proceeding for such purpose, (v) of the occurrence of any event or passage of
time that makes the financial statements included in a Registration Statement
ineligible for inclusion therein or any statement made in a Registration
Statement or Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that
requires any revisions to a Registration Statement, Prospectus or other
documents so that, in the case of a Registration Statement or the Prospectus, as
the case may be, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading and (vi) of the occurrence or existence of any pending
corporate development with respect to the Company that the Company believes may
be material and that, in the determination of the Company, makes it not in the
best interest of the Company to allow continued availability of a Registration
Statement or Prospectus, provided that, any and all of such information shall
remain confidential to each Holder until such information otherwise becomes
public, unless disclosure by a Holder is required by law; provided, further,
that notwithstanding each Holder’s agreement to keep such information
confidential, each such Holder makes no acknowledgement that any such
information is material, non-public information, and provided further, that
during any three hundred sixty five (365) day period such suspension periods
shall not exceed an aggregate of ninety (90) days.

 

(c)  Use its reasonable best efforts to avoid the issuance of, or, if issued,
obtain the withdrawal of (i) any order stopping or suspending the effectiveness
of a Registration Statement, or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, at the earliest practicable moment.

 

(d)  Subject to the terms of this Agreement, consent to the use of such
Prospectus and each amendment or supplement thereto by each of the selling
Holders in connection with the offering and sale of the Registrable Securities
covered by such Prospectus and any amendment or supplement thereto, except after
the giving of any notice pursuant to Section 3(b) until the delivery of the
Advice contemplated by Section 9(b).

 

(e)  Cooperate with any broker-dealer through which a Holder proposes to resell
its Registrable Securities in effecting a filing with the FINRA Corporate
Financing Department pursuant to FINRA Rule 5110, as requested by any such
Holder.

 

(f)  Prior to any resale of Registrable Securities by a Holder, use its
reasonable best efforts to register or qualify or cooperate with the selling
Holders in connection with the registration or qualification (or exemption from
the registration or qualification) of such Registrable Securities for the resale
by the Holder under the securities or Blue Sky laws of such jurisdictions within
the United States as any Holder reasonably requests in writing, to keep each
registration or qualification (or exemption therefrom) effective during the
Effectiveness Period and to do any and all other acts or things reasonably
necessary to enable the disposition in such jurisdictions of the Registrable
Securities covered by each Registration Statement; provided, however, that the
Company shall not be required in connection therewith or as a condition thereto
to (1) qualify to do business in any jurisdiction where it would not otherwise
be required to qualify but for this Section 3(f), (2) subject itself to general
taxation in any such jurisdiction, or (3) file a general consent to service of
process in any such jurisdiction.

 

(g)  If requested by a Holder, cooperate with such Holders to facilitate the
timely preparation and delivery of certificates representing Registrable
Securities to be delivered to a transferee pursuant to a Registration Statement,
and to enable such Registrable Securities to be in such denominations and
registered in such names as any such Holder may request.

 

(h)  Upon the occurrence of any event contemplated by Section 3(b), as promptly
as reasonably possible under the circumstances taking into account the Company’s
good faith assessment of any adverse consequences to the Company and its
shareholders of the premature disclosure of such event, prepare a supplement or
amendment, including a post-effective amendment, to a Registration Statement or
a supplement to the related Prospectus or any document incorporated or deemed to
be incorporated therein by reference, and file any other required document so
that, as thereafter delivered, neither a Registration Statement nor such
Prospectus will contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. If the Company notifies the Holders in accordance with clauses
(iii) through (vi) of Section 3(b) above to suspend the use of any Prospectus
until the requisite changes to such Prospectus have been made, then the Holders
shall suspend use of such Prospectus. The Company will use its reasonable best
efforts to ensure that the use of the Prospectus may be resumed as promptly as
is practicable.

 

(i)  Comply with all applicable rules and regulations of the Commission.

 

(j)  Require each selling Holder to furnish to the Company a certified statement
as to the number of shares of Common Stock beneficially owned by such Holder and
the natural persons thereof that have voting and dispositive control over the
shares. In the event of the failure by such Holder to comply with the Company’s
request within fifteen (15) days from the date of such request, the Company
shall be permitted to exclude such Holder from a Registration Statement, without
being subject to the payment of liquidated damages to such Holder. At such time
that such Holder complies with the Company’s request the Company shall use its
reasonable best efforts to include such Holder on the Registration Statement.

 

(l) In the event of any underwritten public offering, enter into and perform its
obligations under an underwriting agreement, in usual and customary form, with
the managing underwriter(s) of such offering.

 

(n) In connection with the preparation and filing of each Registration Statement
registering Registrable Securities under the Securities Act, and before filing
any such Registration Statement or any other document in connection therewith,
give the participating Holders of Registrable Securities and their respective
counsel, the opportunity to (i) review any such Registration Statement, each
prospectus included therein or filed with the SEC, each amendment thereof or
supplement thereto and any other document to be filed, including the Company's
response to SEC comments, and (ii) provide comments to such documents if
necessary to cause the description relating to such Holders to be accurate. The
cumulative time taken by total shareholders for review will be added to extend
the Filing Date requirement under Section 2(e). Each shareholder will be
responsible to cover the cost of review of their own documents.

 

(o) In the event that Form S-3 is not available for the registration of the
resale of Registrable Securities hereunder, the Company shall (i) register the
resale of the Registrable Securities on Form S-1 and (ii) undertake to register
the Registrable Securities on Form S-3 as soon as such form is available,
provided that the Company shall maintain the effectiveness of the Registration
Statement then in effect until such time as a Registration Statement on Form S-3
covering the Registrable Securities has been declared effective by the SEC.

 

4.  Registration Expenses. All fees and expenses incident to the performance of
or compliance with this Agreement by the Company shall be borne by the Company
whether or not any Registrable Securities are sold pursuant to a Registration
Statement. The fees and expenses referred to in the foregoing sentence shall
include, without limitation, (i) all registration and filing fees (including,
without limitation, fees and expenses of the Company’s counsel and independent
registered public accountants) (A) with respect to filings made with the
Commission, (B) with respect to filings required to be made with any trading
market on which the Common Stock is then listed for trading.in compliance with
applicable state securities or Blue Sky laws reasonably agreed to by the Company
in writing (including, without limitation, fees and disbursements of counsel for
the Company in connection with Blue Sky qualifications or exemptions of the
Registrable Securities) and (D) with respect to any filing that may be required
to be made by any broker through which a Holder intends to make sales of
Registrable Securities with the FINRA pursuant to FINRA Rule 5110, so long as
the broker is receiving no more than a customary brokerage commission in
connection with such sale, (ii) printing expenses (including, without
limitation, expenses of printing certificates for Registrable Securities), (iii)
messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Company, (v) Securities Act liability insurance, if the Company
so desires such insurance, and (vi) fees and expenses of all other Persons
retained by the Company in connection with the consummation of the transactions
contemplated by this Agreement and (vii) reasonable fees and disbursements of a
single special counsel for the Holders (selected by Holders of the majority of
the Registrable Securities requesting such registration), up to $2,000 for each
registration. In addition, the Company shall be responsible for all of its
internal expenses incurred in connection with the consummation of the
transactions contemplated by this Agreement (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder. In no event shall the Company be
responsible for any broker or similar commissions of any Holder.

 

5.  Indemnification.

 

(a)  Indemnification by the Company. The Company shall, notwithstanding any
termination of this Agreement, indemnify and hold harmless each Holder, the
officers, directors, members, partners, agents and employees (and any other
Persons with a functionally equivalent role of a Person holding such titles,
notwithstanding a lack of such title or any other title) of each of them, each
Person who controls any such Holder (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) and the officers, directors,
members, stockholders, partners, agents and employees (and any other Persons
with a functionally equivalent role of a Person holding such titles,
notwithstanding a lack of such title or any other title) of each such
controlling Person, to the fullest extent permitted by applicable law, from and
against any and all losses, claims, damages, liabilities, costs (including,
without limitation, reasonable attorneys’ fees) and expenses (collectively,
“Losses”), as incurred, arising out of or relating to (1) any untrue or alleged
untrue statement of a material fact contained in a Registration Statement, any
Prospectus or any form of prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or relating to any omission
or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus or
supplement thereto, in light of the circumstances under which they were made)
not misleading or (2) any violation or alleged violation by the Company of the
Securities Act, the Exchange Act or any state securities law, or any rule or
regulation thereunder, in connection with the performance of its obligations
under this Agreement, except to the extent, but only to the extent, that (i)
such untrue statements or omissions are based upon information regarding such
Holder furnished to the Company by such Holder for use therein (including the
information included on Annex A hereto), or to the extent that such information
relates to such Holder’s proposed method of distribution of Registrable
Securities or (ii) the Holder used an outdated or defective Prospectus which the
Company had previously notified such Holder was outdated or defective pursuant
to Sections 3(b)(iii)-(vi) and for which the Company had not yet provided the
Advice contemplated in Section 9(b). The Company shall notify the Holders
promptly of the institution, threat or assertion of any Proceeding arising from
or in connection with the transactions contemplated by this Agreement of which
the Company is aware.

 

(b)  Indemnification by Holders. Each Holder shall, severally and not jointly,
indemnify and hold harmless the Company, its directors, officers, agents and
employees, each Person who controls the Company (within the meaning of Section
15 of the Securities Act and Section 20 of the Exchange Act), and the directors,
officers, agents or employees of such controlling Persons, to the fullest extent
permitted by applicable law, from and against all Losses, as incurred, to the
extent arising out of or based solely upon: (x) such Holder’s failure to comply
with the prospectus delivery requirements of the Securities Act or (y) any
untrue or alleged untrue statement of a material fact contained in any
Registration Statement, any Prospectus, or in any amendment or supplement
thereto or in any preliminary prospectus, or arising out of or relating to any
omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading (i) to the extent, but
only to the extent, that such untrue statement or omission is contained in any
information so furnished by such Holder to the Company for inclusion in such
Registration Statement or such Prospectus (including the information included on
Annex A) or (ii) to the extent that such information relates to such Holder’s
proposed method of distribution of Registrable Securities set forth in such
Prospectus or in any amendment or supplement thereto or (iii) the use by such
Holder of an outdated or defective Prospectus after the Company has notified
such Holder in writing that the Prospectus is outdated or defective and prior to
the receipt by such Holder of the Advice contemplated in Section 9(b). In no
event shall the liability of any selling Holder hereunder be greater in amount
than the dollar amount of the net proceeds received by such Holder upon the sale
of the Registrable Securities giving rise to such indemnification obligation.

 

(c)  Conduct of Indemnification Proceedings.

 

(i) If any Proceeding shall be brought or asserted against any Person entitled
to indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall
promptly notify the Person from whom indemnity is sought (the “Indemnifying
Party”) in writing, and the Indemnifying Party shall have the right to assume
the defense thereof, including the employment of counsel reasonably satisfactory
to the Indemnified Party and the payment of all fees and expenses incurred in
connection with defense thereof; provided, that, the failure of any Indemnified
Party to give such notice shall not relieve the Indemnifying Party of its
obligations or liabilities pursuant to this Agreement, except (and only) to the
extent that it shall be finally determined by a court of competent jurisdiction
(which determination is not subject to appeal or further review) that such
failure shall have prejudiced the Indemnifying Party.

 

(ii) An Indemnified Party shall have the right to employ separate counsel in any
such Proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Party or
Parties unless: (1) the Indemnifying Party has agreed in writing to pay such
fees and expenses, (2) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding, or (3) the named
parties to any such Proceeding (including any impleaded parties) include both
such Indemnified Party and the Indemnifying Party, and counsel to the
Indemnified Party shall reasonably believe that a conflict of interest is likely
to exist if the same counsel were to represent such Indemnified Party and the
Indemnifying Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the
expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and the reasonable fees and expenses of no
more than one (1) separate counsel shall be at the expense of the Indemnifying
Party). The Indemnifying Party shall not be liable for any settlement of any
such Proceeding effected without its written consent, which consent shall not be
unreasonably withheld or delayed. No Indemnifying Party shall, without the prior
written consent of the Indemnified Party, effect any settlement of any pending
Proceeding in respect of which any Indemnified Party is a party, unless such
settlement includes an unconditional release of such Indemnified Party from all
liability on claims that are the subject matter of such Proceeding.

 

(iii) Subject to the terms of this Agreement, all reasonable fees and expenses
of the Indemnified Party (including reasonable fees and expenses to the extent
incurred in connection with investigating or preparing to defend such Proceeding
in a manner not inconsistent with this Section) shall be paid to the Indemnified
Party, as incurred, within ten (10) Trading Days of written notice thereof to
the Indemnifying Party; provided, that, the Indemnified Party shall promptly
reimburse the Indemnifying Party for that portion of such fees and expenses
applicable to such actions for which such Indemnified Party is judicially
determined not to be entitled to indemnification hereunder.

 

(d)  Contribution.

 

(i) If the indemnification under Section 5(a) or 5(b) is unavailable to an
Indemnified Party or insufficient to hold an Indemnified Party harmless for any
Losses, then each Indemnifying Party shall contribute to the amount paid or
payable by such Indemnified Party, in such proportion as is appropriate to
reflect the relative fault of the Indemnifying Party and Indemnified Party in
connection with the actions, statements or omissions that resulted in such
Losses as well as any other relevant equitable considerations. The relative
fault of such Indemnifying Party and Indemnified Party shall be determined by
reference to, among other things, whether any action in question, including any
untrue or alleged untrue statement of a material fact or omission or alleged
omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in this Agreement, any reasonable attorneys’ or
other fees or expenses incurred by such party in connection with any Proceeding
to the extent such party would have been indemnified for such fees or expenses
if the indemnification provided for in this Section was available to such party
in accordance with its terms.

 

(ii) The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no Holder shall be required
to contribute, in the aggregate, any amount in excess of the amount by which the
net proceeds actually received by such Holder from the sale of all of such
Holder’s Registrable Securities pursuant to such Registration Statement or
Prospectus exceeds the amount of any damages that such Holder has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission.

 

(e) Remedies Not Exclusive. The indemnity and contribution agreements contained
in this Section are in addition to any liability that the Indemnifying Parties
may have to the Indemnified Parties.

 

6. Preconditions to Participation in Underwritten Registrations. No Holder of
Registrable Securities may participate in any underwritten registration
hereunder unless such Holder (i) agrees to enter into a written underwriting
agreement with the managing underwriter and containing such provisions as are
customary in the securities business for such an arrangement between such
underwriter and companies of the Company's size and investment stature, and (ii)
provides any relevant information and completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements, and other documents
required under the terms of such underwriting arrangements, provided, however,
that (i) the representations and warranties by, and the other agreements on the
part of, the Company to and for the benefit of the underwriters shall also be
made to and for the benefit of such Holders of Registrable Securities and (ii)
no such Holder shall be required to make, and the Company shall use its
reasonable best efforts to ensure that no underwriter requires any Holder to
make, any representations and warranties to, or agreements with, any underwriter
in a registration effected pursuant to this Agreement other than customary
representations, warranties and agreements relating to such Holder's title to
Registrable Securities and authority to enter into the underwriting agreement.

 

7. [RESERVED]

 

8. Reports Under the Exchange Act. With a view to making available to the Buyer
the benefits of Rule 144, the Company agrees to:

 

(a) make and keep public information available, as those terms are understood
and defined in Rule 144 for so long as any Holder of Registrable Securities
holds Registrable Securities; and

 

(b) furnish to the Buyer so long as such Buyer owns Registrable Securities, as
promptly as commercially reasonable upon request: (i) a written statement by the
Company, if true or applicable, that it has complied in all material respects
with the reporting requirements of Rule 144, the Securities Act and the Exchange
Act, (ii) a copy of the most recent annual or quarterly report of the Company
and such other reports and documents so filed by the Company (it being
understood that if such documents are available via the Commission’s website,
such documents need not be provided), and (iii) such other information as may be
reasonably requested to permit the Buyer to sell such securities pursuant to
Rule 144 without registration, it being understood and agreed that the foregoing
shall not constitute an obligation of the Company to remain publicly reporting
under the Exchange Act.

 

(c) The Company specifically acknowledges and agrees that a breach of this
Section 8 shall be deemed an Event of Default under the Note.

 

9.  Miscellaneous.

 

(a)  Compliance. Each Holder covenants and agrees that it will comply with the
prospectus delivery requirements of the Securities Act as applicable to it in
connection with sales of Registrable Securities pursuant to a Registration
Statement.

 

(b)  Discontinued Disposition. By its acquisition of Registrable Securities,
each Holder agrees that, upon receipt of a notice from the Company of the
occurrence of any event of the kind described in Section 3(b)(iii) through (vi),
such Holder will forthwith discontinue disposition of such Registrable
Securities under a Registration Statement until it is advised in writing (the
“Advice”) by the Company that the use of the applicable Prospectus (as it may
have been supplemented or amended) may be resumed. The Company will use its
reasonable best efforts to ensure that the use of the Prospectus may be resumed
as promptly as is practicable.

 

(c)  Amendments and Waivers. The provisions of this Agreement may be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may be given, and shall be in writing and signed by the
Company and each or any Holders of an interest of the then outstanding
Registrable Securities (including, for this purpose, any Registrable Securities
issuable upon exercise of the Warrant). If a Registration Statement does not
register all of the Registrable Securities pursuant to a waiver or amendment
done in compliance with the previous sentence or otherwise, then the number of
Registrable Securities to be registered for each Holder shall be reduced pro
rata among all Holders and each Holder shall have the right to designate which
of its Registrable Securities shall be omitted from such Registration Statement.
Notwithstanding the foregoing, a waiver or consent to depart from the provisions
hereof with respect to a matter that relates exclusively to the rights of a
Holder or some Holders and that does not directly or indirectly affect the
rights of other Holders may be given by such Holder or Holders of all of the
Registrable Securities to which such waiver or consent relates; provided,
however, that the provisions of this sentence may not be amended, modified, or
supplemented except in accordance with the provisions of the first sentence of
this Section 9(c).

 

(d) Assignment of Registration Rights. The rights of the Buyer and each Holder
hereunder, including the right to have the Company register for resale
Registrable Securities in accordance with the terms of this Agreement, shall be
automatically assignable by each Holder to any Person who acquires all or a
portion of the Registrable Securities if such assignment shall be undertaken in
accordance with Section 5.7 of the Purchase Agreement. Such rights to assignment
and related obligations shall apply to the Holders (and to subsequent)
successors and assigns.

 

(e)  Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of each of the parties and
shall inure to the benefit of each Holder. The Company may assign its rights or
obligations hereunder without the prior written consent the Holders of a
majority of the then outstanding Registrable Securities. Each Holder may assign
their respective rights hereunder in the manner and to the Persons as permitted
under the Purchase Agreement.

 

(f)  No Inconsistent Agreements. Neither the Company nor any of its subsidiaries
or affiliates has entered, as of the date hereof, nor shall the Company or any
of its Subsidiaries, on or after the date of this Agreement, enter into any
agreement with respect to its securities, that would have the effect of
impairing the rights granted to the Holders in this Agreement or otherwise
conflicts with the provisions hereof.

 

(g)  Execution and Counterparts. This Agreement may be executed in two (2) or
more counterparts, all of which when taken together shall be considered one and
the same agreement and shall become effective when counterparts have been signed
by each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission or by e-mail delivery of a “.pdf” format
data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile or “.pdf” signature page were an original
thereof.

 

(h)  Governing Law; Disputes. All questions concerning the governing law,
construction, validity, enforcement and interpretation of and disputes regarding
this Agreement shall be determined in accordance with the provisions of the
Purchase Agreement.

 

(i)  Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.

 

(j)  Headings. The headings in this Agreement are for convenience only, do not
constitute a part of the Agreement and shall not be deemed to limit or affect
any of the provisions hereof.

 

 

IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as of the date first written above.

 

HISPANICA INTERNATIONAL DELIGHTS OF AMERICA, INC.

 

 

 

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

 

 

ANSON INVESTMENTS MASTER FUND LP

 

By: /s/ Amin Nathoo     Name: Amin Nathoo     Title: Advising Rep. M5V Advisors
Inc.