Document:

Exhibit 4.5

FIRST AMENDMENT TO SUBSCRIPTION AGREEMENT

THIS FIRST AMENDMENT TO SUBSCRIPTION AGREEMENT (this “Amendment”) dated as of the 14th day of October, 2015, between Fresh Healthy Vending International, Inc., a Nevada corporation (the “Borrower”) and Ensure Capital, Inc. (the “Holder”).

W I T N E S S E T H:

WHEREAS, Holder and Borrower entered into a Subscription Agreement dated on or about June 30, 2015, a copy of which is attached to, and made a part of, this Amendment as Exhibit “A”, (the “Subscription Agreement”), pursuant to which Borrower issued to Holder a Convertible Promissory Note in the original principal amount of $600,000 (the “Note”), together with 100% common stock purchase warrants coverage at an exercise price of $0.75 per share (the “Warrant”); and

WHEREAS, WHEREAS, the Borrower and Holder have agreed to amend the Subscription Agreement as set forth herein.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1.            Adoption of Whereas Clauses.  The parties hereto adopt as part of this Amendment each of the recitals which are set forth in the WHEREAS clauses, and agree that such recitals shall be binding upon the Parties hereto by way of contract and not merely by way of recital or inducement.  Such WHEREAS clauses are hereby confirmed and ratified as being true and accurate by each Party to this Amendment.

2.            Amendments.

A.            Section 5(d) of the Subscription Agreement shall be amended to read in its entirety as follows:

“(d) incur any aggregate indebtedness in excess of $500,000 that is not al- ready included in a Board-approved budget;”

B.            Sections 5(e) and 5(h) of the Subscription Agreement shall be deleted and reserved.

C.            Section 5(j) of the Subscription Agreement shall be amended to read in its entirety as follows:

“(j)  sell, lease, transfer, license or dispose of all or substantially all of the assets of the Company.”

E.            In all other respects, the Subscription Agreement shall remain in full force and effect.

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3.            Amended Term Sheet.  The amended Term Sheet of the terms of the transaction effectuated by the Subscription Agreement, Note, as amended hereby, and the Warrant is attached to, and made a part of, this Amendment as Exhibit “B”.

4.            Borrower and Holder Representations.  The Borrower and Holder each represents, warrants and covenants the following to the other party:

A.            The undersigned has the full authority, right, power and legal capacity to enter into this Amendment and to consummate the transactions contemplated herein.  The execution of this Amendment by the undersigned and its delivery to the the other party, and the consummation by the undersigned of the transactions which are contemplated in this Amendment have been duly approved and authorized by all necessary action by the undersigned’s Board of Directors and no further authorization shall be necessary on the part of the undersigned for the performance and consummation by the undersigned of the transactions which are contemplated by this Amendment.  The execution, delivery and performance of this Amendment shall not require approval, consent or authorization of any third party, including any governmental agency or authority or any political subdivision thereof.  This Amendment constitutes the legal, valid and binding obligation of the undersigned and is enforceable as to the undersigned in accordance with the terms of this Amendment, subject to the enforcement of remedies by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws affecting creditors’ rights generally and by generally applicable equitable principles, whether considered in an action at law or in equity.

B.            The undersigned agrees to cooperate with the other party and shall make, execute, acknowledge, deliver, or cause to be made, executed, acknowledged, and delivered, at such times and places as either party may reasonably deem necessary, all other documents and instruments as may be reasonably necessary in order to effectuate the purposes of this Amendment.

C.            The performance of this Amendment shall not result in any breach of, or constitute a default under, or result in the imposition of any lien or encumbrance upon any property of the undersigned or cause an acceleration under any arrangement, agreement or other instrument to which the undersigned is a party or by which any of its assets are bound.  The undersigned has performed in all respects all of its obligations which are, as of the date of this Amendment, required to be performed by it pursuant to the terms of any such agreement, contract or commitment.

D.            No representation or warranty of the undersigned which is contained in this Amendment, or in a writing furnished or to be furnished pursuant to this Amendment contains or shall contain any untrue statement of a material fact, omits or shall omit to state any material fact which is required to make the statements which are contained herein or therein, in light of the circumstances under which they were made, not misleading.

E.            The undersigned acknowledges that its decision to enter into this Amendment was based entirely upon its own determination, and not upon any representations made to the undersigned by the other party with respect to this Amendment.

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4.            Miscellaneous.

A.            Headings.  The headings contained in this Amendment are for reference purposes only and shall not affect in any way the meaning or interpretation of this Amendment.

B.            Enforceability.  If any provision which is contained in this Amendment, should, for any reason, be held to be invalid or unenforceable in any respect under the laws of any State of the United States, such invalidity or unenforceability shall not affect any other provision of this Amendment and this Amendment shall be construed as if such invalid or unenforceable provision had not been contained in this Amendment.

C.            Governing Law; Disputes.  In view of the fact that: (1) the Assignee is a Delaware limited liability company with an office located in the State of California, and (2) the Borrower is a Nevada corporation with an office located in the State of California, in order to avoid the question of which state law shall be applicable, the Parties agree that:

(i)         This Amendment shall in all respects be construed, governed, applied and enforced in accordance with the laws of the State of California and be deemed to be an agreement entered into in the State of California and made pursuant to the laws of the State of California, without giving effect to the principles of conflicts of law.

(ii)         The parties agree that they shall be deemed to have agreed to binding arbitration with respect to the entire subject matter of any and all disputes relating to or arising under this Amendment including, but not limited to, the specific matters or disputes as to which arbitration has been expressly provided for by other provisions of this Amendment and that any such arbitration shall be commenced exclusively in San Diego, California.  Any such arbitration shall be by a panel of three arbitrators and pursuant to the commercial rules then existing of the American Arbitration Association in the State of California, County of San Diego.

(iii)            In all arbitrations, judgment upon the arbitration award may be entered in any court having jurisdiction.  The parties specifically designate the Courts in the County of San Diego, State of California as properly having venue for any proceeding to confirm and enter judgment upon any such arbitration award.  The parties hereby consent to and submit to personal jurisdiction over each of them by the Courts of the State of California in any action or proceeding to enforce the arbitration award, waive personal service of any and all process and specifically consent that in any such action or proceeding brought in the State of California, any service of process may be effectuated upon any of them by certified mail, return receipt requested.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.

(iv)            The parties agree that the prevailing party in any arbitration as determined by the arbitrator shall be entitled to such costs and attorney’s fees, if any, in connection with such arbitration as may be awarded by the arbitrators.

(v)            The arbitration panel shall have no power to award non-monetary or equitable relief of any sort.  It shall also have no power to award (a) damages inconsistent with any applicable agreement between the parties or (b) punitive damages or any other damages not measured by the prevailing party’s actual damages; and the parties expressly waive their right to obtain such damages in arbitration or in any other forum.  In no event, even if any other portion of these provisions is held invalid or unenforceable, shall the arbitration panel have power to make an award or impose a remedy which could not be made or imposed by a court deciding the matter in the same jurisdiction.

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(vi)            Discovery shall be permitted in connection with the arbitration only to the extent, if any, expressly authorized by the arbitrator upon a showing of substantial need by the party seeking discovery.

(vii)            All aspects of the arbitration shall be treated as confidential.  The parties and the arbitrator may disclose the existence, content or results of the arbitration only as provided in the rules of the American Arbitration Association in San Diego, California.  Before making any such disclosure, a party shall give written notice to all other parties and shall afford such parties a reasonable opportunity to protect their interest.

D.            Expenses.  Each party to this Amendment shall bear and pay its own costs and expenses incurred in connection with the execution and delivery of this Amendment and the transactions set forth in this Amendment.

E.            Entire Agreement.  This Amendment and all documents and instruments referred to herein constitute the entire agreement and supersede all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof and thereof.

F.            Confidentiality.  The Parties agree that the terms of this Amendment are confidential and they shall not make public disclosure of the terms of this Amendment, except: (i) as may be required by law, (ii) in connection with litigation or other legal proceeding against a party, (iii) by judicial or other compulsory process, including, without being limited to, any court order, (iv) as may be required by any federal and/or state regulatory agency, or (v) as may be required in connection with its obligations under federal securities laws and pursuant to the Securities and Exchange Commission or listing requirements.  If either party intends to make a disclosure of the terms of this Amendment as required by law, by judicial or other compulsory process, including, without being limited to, any court order, by any federal and/or state regulatory agency, or as may be required in connection with its obligations under federal securities laws, such party shall notify the other party, if feasible, in advance of any such disclosure.  The Parties agree that the terms of this Amendment regarding confidentiality are not material to this Amendment and any breach of this paragraph shall not be considered a material breach of this Amendment.  In the event of such a breach of this Paragraph, the non-breaching party shall only be entitled to injunctive relief and/or monetary damages for actual harms caused by the breach.

G.            Assignment.  The parties hereby agree that the obligations under this Amendment shall be freely transferred or assigned to any third parties without the prior written consent of Assignee.

H.            Enforceability.  If any provision which is contained in this Amendment, should, for any reason, be held to be invalid or unenforceable in any respect under the laws of any State of the United States, such invalidity or unenforceability shall not affect any other provision of this Amendment and in this Amendment shall be construed as if such invalid or unenforceable provision had not been contained herein.

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I.            Further Assurances.  The Parties agree to execute any and all such other further instruments and documents, and to take any and all such further actions which are reasonably required to effectuate this Amendment and the intents and purposes hereof.

J.            Non-Waiver.  Except as otherwise expressly provided herein, no waiver of any covenant, condition, or provision of this Amendment shall be deemed to have been made unless expressly in writing and signed by the party against whom such waiver is charged; and (i) the failure of any party to insist in any one or more cases upon the performance of any of the provisions, covenants or conditions of this Amendment or to exercise any option herein contained shall not be construed as a waiver or relinquishment for the future of any such provisions, covenants or conditions, (ii) the acceptance of performance of anything required by this Amendment to be performed with knowledge of the breach or failure of a covenant, condition or provision hereof shall not be deemed a waiver of such breach or failure and (iii) no waiver by any party of one breach by another party shall be construed as a waiver of any other or subsequent breach.

K.             Counterparts.  This Amendment may be executed simultaneously in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

L.            Facsimile and E-mail Signatures.  Any signature which is delivered via facsimile or via E-mail in portable document format (“.pdf”) shall be deemed to be an original and have the same force and effect as if such facsimile or .pdf signature were the original thereof.

M.            Binding upon Execution and Delivery.  No party to this Amendment shall be bound hereby until fully executed counterparts to this Amendment have been executed by, and delivered to, each party, or their respective attorneys, by all other parties or their respective attorneys.

N.            Modifications.  This Amendment may not be changed, modified, extended, terminated or discharged orally, but only by an agreement in writing signed by all of the parties to this Amendment.

[Signature page follows]

FIRST AMENDMENT TO SUBSCRIPTION AGREEMENT

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IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of the day and year first above written.

	 	
BORROWER:

	
	 		
	 	
FRESH HEALTHY VENDING INTERNATIONAL, INC.

	
	 	 	
	 	 	
	 	 	
	 	
By: /s/Arthur Budman  

	
	 	
Name: Arthur Budman

 Title: CEO

	
	 	 	
	 	
ASSIGNEE:

	
	 	 	
	 	
ENSURE CAPITAL, INC.

	
	 	 	
	 	 	
	 	 	
	 	
By: /s/ Jeffrey Stuber  

	
	 	
Name:Jeffrey Stuber

 Title: CEO

	

FIRST AMENDMENT TO SUBSCRIPTION AGREEMENT

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EXHIBIT A

SUBSCRIPTION AGREEMENT

 

 

FIRST AMENDMENT TO SUBSCRIPTION AGREEMENT

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EXHIBIT B

AMENDED TERM SHEET

 

 

8 

FIRST AMENDMENT TO SUBSCRIPTION AGREEMENTExhibit 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 3,000 vending machines and micro markets 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

	
Up to $1,000,000 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

	
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%.

	
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

	
Registration Rights

	
Piggyback Registration Rights.

 

 

	
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.

	
Events of Default

	
To be discussed.

	
Protective Provisions*

	
For so long as any portion of the Notes is 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 $500,000 that is not already included in a Board-approved budget;

(v)    change the principal business of the Company, enter new lines of business, or exit the current line of business;

(vi)          sell, assign, license, pledge or encumber material technology or intellectual property except in the ordinary course of business, consistent with past practice;

 

 

 

	 	
 

(vii)          decide to liquidate, dissolve, wind up, merge or consolidate the Company; or

(viii)          sell, lease, transfer, license or dispose of all or substantially all of the assets of the Company

	
Use of Proceeds

	
General Working Capital

 

		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 nonassessable 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 (other than as disclosed in the Company’s financial statements).

 

 

	
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.

 

 

 

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

EXECUTED AS OF THIS __ DAY OF ________, 2015

Fresh Healthy Vending International, Inc.

  

By:    ___________________________________                                      

Name: Arthur Scott Budman 

Title: CEO

 

cc:  Nicholas Yates

The Investor’s Representative

	
By:

	 	 
	
Name:

	 	 
	
Title:

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