Exhibit 10.4
 
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), OR ANY STATE SECURITIES LAWS, AND NEITHER THIS NOTE NOR ANY
INTEREST THEREIN MAY BE OFFERED, SOLD, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS
(1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT AND
ANY APPLICABLE STATE SECURITIES LAWS, OR (2) AN EXEMPTION FROM SUCH REGISTRATION
EXISTS AND THE COMPANY RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF THIS
NOTE, WHICH COUNSEL AND OPINION ARE SATISFACTORY TO THE COMPANY, THAT SUCH
SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN THE MANNER
CONTEMPLATED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR
APPLICABLE STATE SECURITIES LAWS.
 
REVOLVING CREDIT NOTE
 
 $750,000.00

 September 26, 2017

 
 
FOR VALUE RECEIVED, Hispanica International Delights of America, Inc., a
Delaware corporation (the “Company”), hereby promises to pay to the order of a
J.H Brech, LLC, a Texas limited liability company, or its assigns (collectively,
the “Noteholder”), in lawful money of the United States of America, and in
immediately payable funds, the principal sum of Seven Hundred and Fifty Thousand
Dollars ($750,000.00), or such lesser amount as shall equal the aggregate unpaid
principal amount of all funds advanced the Company by the Noteholder in
accordance with the terms of this Note, on the date and in the amounts stated
herein at any time on or after September 1, 2017, and to pay interest on the
unpaid principal amount of this Note, in like money and funds, on the dates
specified herein. Such advances shall be in the discretion of the Noteholder and
in increments in the ordinary course of no less than $10,000.00. The Company
may, from time to time, borrow, repay and reborrow under the terms of this Note
up to but not exceeding the principal amount of this Note upon delivery to the
Noteholder of a request of such advance of the proceeds of this Note. The
amounts previously advanced to the Company by the Noteholder as set forth on
Schedule A annexed to this Note which remains outstanding as of the date of this
Note shall represent amounts advanced to the Company to date by the Noteholder
under this Note, and shall be included in the sums due the Noteholder by the
Company hereunder.
 
The principal hereof outstanding and any unpaid accrued interest thereon shall
be due and payable on or before October 15, 2019 (the “Maturity Date”). This
Note shall bear interest on the unpaid principal balance from time to time
outstanding, until paid, at the rate of 7% per annum calculated quarterly on the
interest payment dates. Interest shall be payable semi-annually on June 30 and
December 31 of each year commencing with the first advance made hereunder.
Payment of all amounts due hereunder shall be made at the address of the
Noteholder set forth below.
 
The Company hereby authorizes the Noteholder to endorse on the Schedule annexed
to this Note the amount and type of all revolving credit loans made to the
Company, all renewals and payments of principal amounts in respect of such
revolving credit loans, and the outstanding principal amount of all revolving
credit loans; provided, however, that the failure to make such notation with
respect to any revolving credit loan or payment shall not limit or otherwise
affect the obligation of the Company under this Note.
 
1.           
PAYMENTS.
 
(a)            Payment of all amounts due hereunder shall be made at the address
of the Noteholder set forth below. In the event that the date for the payment of
any amount payable under this Note falls due on a Saturday, Sunday or public
holiday under the laws of the State of Texas, the time for payment of such
amount shall be extended to the next succeeding business day and interest shall
continue to accrue on any principal amount so effected until the payment thereof
on such extended due date.
 
(b)            All payments received on account of this Note shall be applied to
the reduction of the unpaid principal balance of this Note. Interest shall be
computed on the basis of a year of 360 days, for the actual number of days
elapsed.
 
 

 
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(c)             If payment of the outstanding principal amount of this Note,
together with all accrued unpaid interest thereon at the applicable rate of
interest (as set forth herein), is not made on the Maturity Date, then interest
shall accrue on the outstanding principal amount due under this Note and on any
unpaid accrued interest due on this date of the payment in full of such amounts
(including from and after the date of the entry of judgment in favor of the
Noteholder in an action to collect this Note) at an annual rate equal to the
lesser of 12% or the maximum rate of interest permitted by applicable law.
 
(d)            The Holder shall have the right from time to time, and at any
time during the period beginning on the date of this Agreement, to convert all
or any part of the outstanding and unpaid principal and/or interest amount of
this Note into fully paid and non-assessable shares of the Company’s common
stock, $0.001 par value (“Common Stock”), by delivering to the Company a notice
of conversion in the form attached hereto as Schedule B; provided, however, that
in no event shall the Holder be entitled to convert any portion of this Note in
excess of that portion of this Note upon conversion of which the sum of (1) the
number of shares of Common Stock beneficially owned by the Holder and its
affiliates , and (2) the number of shares of Common Stock issuable upon the
conversion of the portion of this Note with respect to which the determination
of this proviso is being made, would result in beneficial ownership by the
Holder and its affiliates of more than 4.99% of the outstanding shares of Common
Stock. For purposes of the proviso to the immediately preceding sentence,
beneficial ownership shall be determined in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), and
Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such
proviso, provided, further, however, that the limitations on conversion may be
waived by the Holder upon, at the election of the Holder, not less than 61 days’
prior notice to the Borrower, and the provisions of the conversion limitation
shall continue. The conversion shall be valued as follows:
 
(i) if the Company's Common Stock is not listed for trading on an exchange or
quoted for trading on the OTC Bulletin Board or the Pink Sheets, Principal and
Interest Shares shall be valued at the lesser of (A) the closing price of the
Common Stock as reported on the Company's primary market on the trading day
immediately preceding the date the interest payment is due and payable, or (B)
$1.50 per share.
 
(ii) if the Company's is listed for trading on an exchange or quoted for trading
on the OTC Bulletin Board or the Pink Sheets, Principal and Interest Shares
shall be at $1.50 per share.
 
2.           
PREPAYMENT. This Note may be prepaid, in whole or in part, without penalty with
five days prior written notice to the Noteholder.
 
3.           
DEFAULT. If any of the following events (each an “Event of Default”) shall
occur:
 
(a)            The Company fails to pay the principal or interest accrued on, or
any other amount at any time owing under, the Note as and when the same becomes
due and payable and such default is not cured within 10 business days after
notice of the occurrence of such default; or
 
(b)            The Company defaults in the due observance or performance of or
breach any of its covenants contained in this Note and such default is not cured
within 10 business days after notice of the occurrence of such default; or
 
(c)            The Company shall (i) apply for or consent to the appointment of,
or the taking of possession by, a receiver, trustee or similar official of or
for itself or of or for all or a substantial part of its property, (ii) make an
assignment for the benefit of its creditors, (iii) commence a voluntary case
under the Federal Bankruptcy Code, as now or hereafter in effect (the “Code”),
(iv) file a petition seeking to take advantage of any other bankruptcy,
insolvency, moratorium, reorganization or other similar law of any jurisdiction
(“Other Laws”), (v) acquiesce as to, or fail to controvert in a timely or
appropriate manner, an involuntary case filed against the Company under the
Code, or (vi) take any corporate action in furtherance of any of the foregoing;
or
 
 
 
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(d)            A proceeding or involuntary case shall be commenced, without the
application or consent of the Company in any court of competent jurisdiction (i)
under the Code, (ii) seeking liquidation, reorganization, dissolution, winding
up or composition or readjustment of its debts under any Other Laws, or (iii)
seeking the appointment of a trustee, receive or similar official for it or for
all or any substantial part of its assets, and any such proceeding or case shall
continue undismissed, or unstayed and in effect, for a period of 90 days; or
 
(e)            A final judgment for the payment of money shall be rendered by a
court of competent jurisdiction against the Company, and the Company shall not
discharge the same, or procure a stay of execution thereof within 30 days from
the date of entry thereof and within such 30 day period or such longer period
during which execution of such judgment shall have been stayed, appeal therefrom
and cause the execution thereof to be stayed during such appeal, and such
judgment, together with all other judgments against the Company (including all
subsidiaries), shall exceed in the aggregate $200,000 in excess of any insurance
as to the subject matter of such judgments, as to which coverage has not been
declined or the underlying claim rejected by the applicable insurer; or
 
(f)            The liquidation or dissolution of the Company or any vote in
favor thereof by the board of directors and stockholders of the Company; or
 
(g)            An attachment or garnishment is levied against the assets of the
Company involving an amount in excess of $750,000 and the lien created by such
levy is not vacated, bonded or stayed within 10 business days after such lien
has attached to such assets; or
 
(h)            The Company defaults in the payment (regardless of amount) when
due of the principal of, interest on, or any other liability on account of, any
indebtedness of the Company(other than the Note) having an unpaid principal
amount in excess of $200,000 or a default occurs in the performance or
observance by the Company of any covenant or condition (other than for the
payment of money) contained in any note (other than this Note) or agreement
evidencing or pertaining to any such indebtedness, which causes the maturity of
such indebtedness to be accelerated or permits the holder or holders of such
indebtedness to declare the same to be due prior to the stated maturity thereof,
or
 
(i)            The Company sells all or substantially all of its assets or
merges or is consolidated with another corporation in which the Company is not
the surviving corporation, or the accounting acquirer in the event of a reverse
merger; or
 
(j)           A Change of Control of the Company occurs. For the purpose of this
Note, a “Change of Control” shall mean a change in control (a) as set forth in
Section 280G of the Internal Revenue Code or (b) of a nature that would be
required to be reported in response to Item 5.01 of the current report on Form
8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the
Exchange Act; provided that, without limitation, such a change in control shall
be deemed to have occurred at such time as:
 
i.            any "person", other than the Noteholder becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 50% or more of the
combined voting power of the Company's outstanding securities then having the
right to vote at elections of directors; or,
 
ii.            the individuals who at the date of this Note constitute the Board
of Directors cease for any reason to constitute a majority thereof unless the
election, or nomination for election, of each new director was approved by a
vote of at least two thirds of the directors then in office who were directors
at the date of this Note,
 
 
 
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then, and in any such event, the Noteholder may by written notice to the Company
declare the entire unpaid principal amount of this Note outstanding together
with accrued interest thereon due and payable, and the same shall, unless such
default be cured within 20 business days after such notice, forthwith become due
and payable upon the expiration of such 20-day period, without presentment,
demand, protest, or other notice of any kind, all of which are expressly waived.
 
4.           
SUITS FOR ENFORCEMENT AND REMEDIES. If any one or more Events of Default shall
occur, the Noteholder may proceed to (i) protect and enforce Noteholder’s rights
either by suit in equity or by action at law, or both, whether for the specific
performance of any covenant, condition or agreement contained in this Note or in
any agreement or document referred to herein or in aid of the exercise of any
power granted in this Note or in any agreement or document referred to herein,
(ii) enforce the payment of this Note, or (iii) enforce any other legal or
equitable right of the Noteholder. No right or remedy herein or in any other
agreement or instrument conferred upon the Noteholder is intended to be
exclusive of any other right or remedy, and each and every such right or remedy
shall be cumulative and shall be in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or by statute
or otherwise.
 
5.           
REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company covenants and agrees
that for so long as any portion of the indebtedness evidenced by this Note,
whether principal, accrued and unpaid interest or any other amount at any time
due hereunder, remains unpaid, the Company will:
 
(a)            Do or cause to be done all things necessary to preserve and keep
in full force and effect its corporate existence, rights and franchises and to
comply in all material respects with all laws, regulations and orders of each
governmental authority having jurisdiction over the Company;
 
(c)            Promptly following the occurrence of an Event of Default furnish
to the Noteholder a written statement of the Company’s President or Chief
Financial Officer setting forth the details of such Event of Default and the
action which the Company proposes to take with respect thereto;
 
(d)            At all times maintain true and complete records and books of
account in which all of the financial transactions of the Company are duly
recorded in conformance with U.S. generally accepted accounting principles;
 
(e)            Maintain the registration of the Company’s Common Stock under
Section 12(g) of the Securities Exchange Act of 1934 (the “Exchange Act”), and
to timely file (or obtain extensions in respect thereof and file within the
applicable grace period) all reports and other filings required to be filed by
the Company after the date hereof pursuant to the Exchange Act.
 
6.
NOTICES. All notices required to be given to any of the parties hereunder shall
be in writing and shall be deemed to have been sufficiently given for all
purposes when presented personally to such party, sent by telecopier (with the
original timely mailed), or sent by registered, certified or express mail,
return receipt requested, to such party at its address set forth below:
 

If to the Company to:                                            
 
J.H. Brech, LLC
Christian C. Onsager
Onsager | Fletcher | Johnson
1801 Broadway, Suite 900
Denver, Colorado  80202
Direct Dial: 720.457.7070   Main: 303.512.1123
Fax: 303.512.1129
 
If to the Noteholder to:                                            
 
Hispanica International Delights of America, Inc.
Fernando "Oswaldo" Leonzo
Chairman & CEO
Hispanica International
Delights of America, Inc. 
575 Lexington Ave  4th Floor
New York, NY 10022
c: 914.413.6106 
f: 516.223.2894
 
or hereafter given to the other party hereto pursuant to the provisions of this
Note.
 
 
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7.
EXCLUSIVE JURISDICTION AND VENUE. The Parties agree that the courts of the
County of Tarrant, State of Texas shall have sole and exclusive jurisdiction and
venue for the resolution of all disputes arising under the terms of this Note
and the transactions contemplated herein. The Parties further that, in the event
of litigation arising out of or in connection with this Note in this court, they
will not contest or challenge the jurisdiction or venue of this court.
 
8.
GOVERNING LAW. This Note shall be governed by and construed and interpreted in
accordance with the laws of the State of Texas applicable to contracts made and
to be performed entirely therein, without giving effect to the rules and
conflicts of law.
 
9.
CONFORMITY WITH LAW. It is the intention of the Company and of the Noteholder to
conform strictly to applicable usury and similar laws. Accordingly,
notwithstanding anything to the contrary in this Note, it is agreed that the
aggregate of all charges which constitute interest under applicable usury and
similar laws that are contract for, chargeable or receivable under or in respect
of this Note, shall under no circumstances exceed the maximum amount of interest
permitted by such laws, and any excess, whether occasioned by acceleration or
maturity of this Note or otherwise, shall be canceled automatically, and if
theretofore paid, shall be either refunded to the Company or credited on the
principal amount of this Note.
 
10.
ASSIGNABILITY: This Note shall be binding upon the Borrower and its successors
and assigns, and shall inure to be the benefit of the Holder and its successors
and assigns. Each transferee of this Note must be an “accredited investor” (as
defined in Rule 501(a) of the 1933 Act). Notwithstanding anything in this Note
to the contrary, this Note may be pledged as collateral in connection with a
bona fide margin account or other lending arrangement.
 
 
Remainder of Page Intentionally Left Blank
 
 
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IN WITNESS WHEREOF, the Company has signed and sealed this Note and delivered it
in the State of Texas as of September 1, 2017.
 
COMPANY:
HISPANICA INTERNATIONAL
 
/s/ Fernando Leonzo
Fernando Leonzo, CEO
 
 
J.H.Brech, LLC
 
/s/ Harry N. McMillan

Harry N. McMillan, Trustee of the C.E. McMillan Family Trust, in his capacity as
Managing Member of J.H. Brech, LLC.
 
 
 
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SCHEDULE A
TO REVOLVING CREDIT NOTE
 
 
Date Made, Renewed
or Paid
Type
of Loan
Amount of Principal Renewed
or Paid
Unpaid Principal Balance
of Revolving Credit Note
Name of Person
Making Notation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
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