Document:

Unassociated Document

GUARANTY OF LEASE

 

THIS GUARANTY OF LEASE (the “Guaranty” or “Guaranty of Lease”) is made as of July 1, 2011, by NeoStem, Inc., a Delaware corporation (“Guarantor”), for the benefit of Vanni Business Park, LLC, a Delaware limited liability company (“Lessor”).

 

RECITALS:

 

A.    Progenitor Cell Therapy, LLC, a Delaware limited liability company, is the named Lessee (“Lessee”) under that certain lease with Lessor dated for reference purposes September 1, 2005, as amended by that certain First Amendment thereto dated July 1, 2006, and as further amended by that certain Second Amendment thereto of even date herewith (said lease as so amended is herein called the “Lease”), respecting certain premises (the “Premises”) comprised of the entire building commonly known as Building F located at 291 North Bernardo Avenue in the City of Mountain View, County of Santa Clara, State of California (the “Building”) and more particularly described in the Lease.

 

B.    Guarantor is the sole member of Lessee and materially benefits by Lessor agreeing to enter into the Second Amendment of the Lease with Lessee.

 

NOW, THEREFORE, in furtherance of the foregoing, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Guarantor covenants and agrees as follows:

 

AGREEMENT:

 

1.     Guarantee. Guarantor hereby absolutely and unconditionally guarantees (a) the full and faithful performance of all of the covenants, conditions, agreements and undertakings of Lessee to be kept and performed by Lessee under the Lease including, but not limited to, the payment when due of all rent, additional rent, property taxes, insurance, and other sums payable by Lessee to Lessor under the Lease and (b) the payment of all damages owing to Lessor by Lessee after the termination of the Lease or the exercise by Lessor of any other right or remedy of Lessor following a default by Lessee under the Lease (collectively the “Obligations”). Guarantor understands and agrees that this Guaranty is unconditional and continuing and is a guaranty of payment and performance and not of collection,

 

2.     Independent Obligation. The liability of Guarantor hereunder is independent of the obligations of Lessee under the Lease and a separate action or separate actions may be brought and prosecuted against Guarantor whether or not any action is brought or prosecuted against Lessee under the Lease.

 

3.     Modifications to Lease. Guarantor’s obligations under this Guaranty shall not be extinguished, discharged, diminished or reduced in any way by any modification or amendment of the Lease including, but not limited to, any modification of payment dates or amounts, or any subsequent sublease or assignment of the Lease made with or without the consent of Lessor or of Guarantor. Guarantor hereby waives any right to approve any modification or amendment of the Lease.

  

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4.     Obligations of Guarantor Upon Default by Lessee. In the event that Lessee shall fail to pay when due rent, additional rent, property taxes, insurance premiums, or any other monetary sum or charge, or any portion thereof, accrued or due pursuant to the terms of the Lease, then, upon written notice to Guarantor by Lessor delivered as provided herein, Guarantor shall pay to Lessor any and all such amounts as may be due and owing from Lessee to Lessor by reason of Lessee’s failure to perform. If Lessee shall fail to perform any covenant, term or condition of the Lease as required to be performed by Lessee other than as provided for in the preceding sentence, then upon written notice to Guarantor by Lessor given as provided herein, Guarantor shall commence and complete performance of such condition, covenant or term within five (5) days after Lessor’s delivery to Guarantor of notice of such failure by Lessee to so perform, and in the event such performance by Guarantor cannot be completed within such five (5) days, Guarantor shall commence performance within such time and diligently pursue completion thereof within a reasonable time thereafter, not to exceed sixty (60) days from the date of Lessor’s notice.

 

5.     Remedies. If Guarantor fails to perform any obligation under this Guaranty of Lease, then Lessor shall have, in addition to all other remedies provided at law or in equity, the following remedies:

 

(a)       At Lessor’s sole option, and without any obligation to do so, Lessor may proceed to perform on behalf of Guarantor any or all of the obligations of Guarantor under this Guaranty, and Guarantor, on written demand, shall pay to Lessor all reasonable out of pocket sums expended by Lessor in the performance of the obligations of Guarantor under this Guaranty of Lease, together with interest at the rate specified in Paragraph 14 of this Guaranty of Lease from the date expended until paid; and

 

(b)       From time to time and without first requiring performance on the part of Lessee, and without being required to exhaust or proceed against the security deposit or any or all other security held by Lessor for the performance of Lessee under the Lease, Lessor may enforce its rights to require performance by Guarantor or any or all of the obligations on the part of Guarantor to be performed under this Guaranty of Lease by action at law or in equity, or both.

 

6.     No Waiver. No failure on the part of Lessor to pursue any remedy under this Guaranty of Lease or under the Lease shall constitute a waiver on the part of Lessor of its right to pursue such remedy on the basis of the same or a subsequent default.

 

7.     Waiver of Exoneration. Guarantor waives any right to require Lessor to (a) proceed against Lessee, (b) proceed against or exhaust any security held from Lessee, or (c) pursue any other right or remedy available to Lessor, or (d) have the property of Lessee first applied to the discharge of the Obligations. Guarantor further waives any defense it may acquire by reason of Lessor’s election of any remedy against Guarantor or Lessee, or both.

 

8.     Waiver of Subrogation. Until the obligations of Lessee under the Lease have been performed in full, Guarantor shall have no right of subrogation against Lessee and Guarantor hereby expressly waives any right to enforce any remedy which Lessor now has or may hereafter acquire against Lessee. Until the obligations of Lessee under the Lease have been performed in full, Guarantor hereby waives the benefit of, and any right to participate in, any security now or hereafter held by Lessor for the performance of the obligations of Lessee under the Lease.

  

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9.     Waiver of Presentments. Guarantor waives all presentments, demands for performance, notices of nonperformance, protests, notices of protest, notices of dishonor, and notices of acceptance of this Guaranty and, except for the notices required under Paragraph 4 of this Guaranty, waives all notices of the existence, creation, or incurring of new or additional obligations by Lessee under the Lease.

 

10.   Other Guarantor Waivers. Without limiting the generality of the preceding paragraphs, Guarantor hereby waives:

 

(a)      All defenses by reason of any lack of authority of Lessee, or based on any statute of limitations respecting obligations accruing under the Lease or this Guaranty;

 

(b)      Any and all rights Guarantor may have now or in the future to require or demand that Lessor pursue any right or remedy Lessor may have against Lessee or any other third party;

 

(c)      Any defense arising as a result of Guarantor’s election of the application of Section 1111 (b)(2) of the Bankruptcy Code or based on any borrowing or grant of a security interest under Section 364 of the Bankruptcy Code;

 

(d)      Any defense as a surety, including, without limitation, California Civil Code Sections 2819 (alteration of the obligation without the surety’s consent), 2825 (discharge of the debtor), 2809 (guarantor’s obligation may not be larger than the principal’s obligation), 2810 (a guarantor’s liability ceases if the principal is not liable), and 2846 (equity of exoneration);

 

(e)      Any duty or obligation of Lessor to disclose to Guarantor any facts Lessor may now or hereafter know about Lessee, regardless or whether Lessor has reason to believe that any such facts materially increase the risk beyond that which Guarantor intends to assume or has reason to believe that such facts are unknown to Guarantor or has a reasonable opportunity to communicate such facts to Guarantor, it being understood and agreed that Guarantor is fully responsible for being and keeping informed of the financial condition of Lessee and of any and all circumstances bearing on the risk of nonperformance of any Obligation; and

 

(f)      Any defense based upon an election of remedies by Lessor, including any election which destroys or impairs any right of subrogation, reimbursement or contribution which Guarantor may have, or any rights or benefits under any provisions of California law in any way qualifying, conditioning or limiting the obligations of Guarantor based on any steps or procedures that Lessors should take before proceeding against Guarantor.

 

11.  Bankruptcy. This Guaranty will continue unchanged by any bankruptcy, reorganization or insolvency of Lessee, or any successor or assignee thereof, or by any disaffirmance or abandonment by a trustee of Lessee. Notwithstanding any modification, discharge or extension of the indebtedness or any amendment, modification, stay or cure of Lessor’s rights which may occur in any bankruptcy or reorganization case or proceeding concerning Lessee whether permanent or temporary, and whether assented to by Lessor, Guarantor hereby agrees that it shall be obligated hereunder to pay and perform the Obligations in accordance with the terms of the Lease and the terms of this Guaranty. Guarantor understands and acknowledges that by virtue of this Guaranty, Guarantor has specifically assumed any and all risks of a bankruptcy or reorganization case or proceeding with respect to Lessee.

  

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12.    Assignment of Lease. As used herein, the term “Lessor” shall include any successor, assignee or transferee of Lessor. Guarantor agrees that Lessor may, without notice to Guarantor, assign the Lease and this Guaranty of Lease in whole or in part and that no such assignment or transfer of the Lease and/or this Guaranty of Lease shall operate to extinguish or diminish the liability of Guarantor under this Guaranty of Lease.

 

13.    Obligations of Guarantor Are Primary. Guarantor agrees that the liability of Guarantor under this Guaranty of Lease shall be primary and that in any cause or right of action that shall accrue to Lessor under this Guaranty of Lease, Lessor may, at its sole option, proceed against Guarantor without having commenced any action, or having obtained any judgment, against Lessee. If Lessor has any enforceable rights against Lessee upon termination of the Lease, Lessor shall be entitled to enforce those rights against Guarantor without giving prior notice to Lessee or Guarantor, and without making any demand on either of them.

 

14.    Interest. Any sum required to be paid by Guarantor to Lessor pursuant to the terms of this Guaranty of Lease shall bear interest at the lower of ten percent (10%) or the prime commercial lending rate then in effect at Bank of America (or if Bank of America no longer exists, then ten percent (10%)), from the date due until paid in full.

 

15.    Attorneys’ Fees. Guarantor agrees to pay Lessor’s reasonable out of pocket attorneys’ fees and all costs and other expenses reasonably incurred in any collection or attempted collection, or in any negotiations relative to the obligations hereby guaranteed, or incurred enforcing this Guaranty against the Guarantor. In addition, in the event of any dispute between the parties arising under this Guaranty of Lease, or the breach of any covenant or condition under this Guaranty of Lease, then the prevailing party shall be entitled to have and recover from the party not so prevailing the attorneys’ fees and costs incurred by the prevailing party, whether such fees and costs are incurred in taking any action under this Guaranty of Lease, or in any judicial proceeding (including appellate proceeding). “Prevailing party” for the purposes of this Paragraph 15 shall include, without limitation, the party who receives from the other party the sums allegedly due, performance of the covenants allegedly breached, consideration substantially equal to that which was demanded, or substantially the relief or consideration sought in any judicial proceeding whether or not such proceeding is prosecuted to final judgment, or a party who dismisses a judicial action in return for substantially the performance or relief sought or the payment of the sums allegedly due.

 

16.    Time of the Essence. Time is of the essence with respect to the performance of each and every provision of this Guaranty of Lease.

 

17.    Governing Law. This Guaranty of Lease shall be construed and interpreted in accordance with the laws of the State of California.

 

18.    Captions. The captions and paragraph numbers appearing in this Guaranty of Lease are inserted only as a matter of convenience and are not to be used to interpret this Guaranty of Lease.

  

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19.    Notices. All notices required hereunder between Guarantor and Lessor shall be in writing, shall be delivered personally or sent by registered or certified mail, return receipt requested, or by nationally recognized overnight carrier providing for receipted delivery and shall be deemed to have been given or made when received (or upon attempted delivery if the person to whose attention the notice is directed is absent at the time of attempted delivery or if the delivery is refused), in the case of the Guarantor at NeoStem, Inc., 420 Lexington Avenue, Suite 450, New York City, New York 10170, Attention: General Counsel and in the case of the Lessor, at Vanni Business Park, LLC, c/o Chris Vanni, 8080 Santa Teresa Blvd., Suite 210, Gilroy, CA 95020. Either address may be changed on ten (10) days notice, given to the other as above provided.

 

20.    Examination of Lease. Guarantor acknowledges that it has (a) received a copy of the Lease, (b) read and understood the terms and provisions of the Lease including, but not limited to, the covenants, conditions, agreements and undertakings of Lessee to be kept and performed by Lessee under the Lease, (c) read and understood the provisions of this Guaranty of Lease, and (d) understood the obligations of Guarantor under this Guaranty of Lease, including the legal effect of such obligations and has been advised by legal counsel respecting such obligations.

 

21.    Binding on Successors. Guarantor shall not assign any of its obligations hereunder by operation of law or otherwise, and any attempted assignment shall, at Lessor’s sole option, be void. Subject to the foregoing, the obligations of Guarantor under this Guaranty shall be binding on Guarantor’s successors.

 

IN WITNESS WHEREOF, Guarantor has executed this Guaranty of Lease as of the date first hereinabove set forth.

 

	
GUARANTOR

	 
	  	  	 
	
NEOSTEM, INC.,

	 
	
a Delaware corporation

	 
	  	  	 
	
By:

	
/s/ Robin L. Smith

	 
	
Name: 

	
Robin L. Smith

	 
	
Title:

	
CEO

	 

 

  

5CONVERTIBLE PROMISSORY NOTE

$300,000 PLUS INTEREST DUE & PAYABLE

DOCUMENT B-02262010a

 

THIS NOTE AND THE SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS NOTE AND THE SHARES ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT OR APPLICABLE EXEMPTION OR SAFE HARBOR PROVISION.

 

FOR VALUE RECEIVED, on the Effective Date, as defined below on the signature page, Nacel Energy Corp. as Obligor (“Borrower,” or “Obligor”), hereby promises to pay to the Lender (“Lender” or “Holder”), as defined below on the signature page, the Principal Sum, as defined below, along with the Interest Rate, as defined below, according to the terms herein.

 

	
The “Lender” shall be:

	 	
JMJ Financial / Its Principal, or Its Assignees

	  	 	  
	
The “Principal Sum” shall be:

	 	
$300,000 (three hundred thousand US Dollars): Subject to the following: accrued, unpaid interest shall be added to the Principal Sum.

	  	 	  
	
The “Consideration” shall be:

	 	
$300,000 (three hundred thousand US dollars) in the form of the Secured & Collateralized Promissory Note Document C-02262010a (including Security & Collateral Agreement).

	  	 	  
	
The “Interest Rate” shall be:

	 	
12% one-time interest charge on the Principal Sum. No interest or principal payments are required until the Maturity Date, but both principal and interest may be included in conversion prior to maturity date.

	  	 	  
	
The “Conversion Price” shall be the following price:

	 	
As applied to the Conversion Formula set forth in 2.2, 70% (seventy percent) of the lowest trade price in the 30 trading days previous to the conversion; as applies to Nacel Energy Corp. voting common stock.

	  	 	  
	
The “Maturity Date” is the date upon which the Principal Sum of this Note, as well as any unpaid interest shall be due and payable, and that date shall be:

	 	
3 (three) years from the Effective Date, as defined below on the signature page.

	  	 	  
	
The “Prepayment Terms” shall be:

	 	
Prepayment is not permitted, unless approved by Holder in writing.

 

DOCUMENT B-02262010a

  

  

  

 

ARTICLE 1 PAYMENT-RELATED PROVISIONS

 

	
  

	
1.1

	
Interest Rate. Subject to the Holder’s right to convert, interest payable on this Note will accrue interest at the Interest Rate and shall be applied to the Principal Sum.

 

	
  

	
1.2

	
Payable on Demand. This Note is payable on demand in an amount not to exceed the cash amount paid in towards Document C-02262010a

 

ARTICLE 2 CONVERSION RIGHTS

 

The Holder will have the right to convert the Principal Sum and accrued interest under this Note into Shares of the Borrower’s Common Stock as set forth below.

 

2.1 Conversion Rights and Cashless Exercise. Subject to the terms set forth in Section 2.7, the Holder will have the right at its election from and after the Effective Date, and then at any time, to convert all or part of the outstanding and unpaid Principal Sum and accrued interest into shares of fully paid and nonassessable shares of common stock of Nacel Energy Corp.(as such stock exists on the date of issuance of this Note, or any shares of capital stock of Nacel Energy Corp. into which such stock is hereafter changed or reclassified, the “Common Stock”) as per the Conversion Formula set forth in Section 2.2. Any such conversion shall be cashless, and shall not require further payment from Holder. Unless otherwise agreed in writing by both the Borrower and the Holder, at no time will the Holder convert any amount of the Note into common stock that would result in the Holder owning more than 4.99% of the common stock outstanding of Nacel Energy Corp.. Shares from any such conversion will be delivered to Holder by 2:30pm EST within 2 (two) business days of conversion notice delivery (see 3.1) by “DWAC/FAST” electronic transfer (see “Share Delivery” attachment).

 

2.2. Conversion Formula. The number of shares issued through conversion is the conversion amount divided by the conversion price.

	
# Shares =

	
Conversion Amount

	  	
Conversion Price

 

2.3. This section 2.3 intentionally left blank.

 

2.4. This section 2.4 intentionally left blank.

 

2.5 Reservation of Shares. As of the issuance date of this Note and for the remaining period during which the conversion right exists, the Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of Common Stock upon the full conversion of this Note. The Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. The Borrower agrees that its issuance of this Note constitutes full authority to its officers, agents and transfer agents who are charged with the duty of executing and issuing stock certificates to execute and issue the necessary certificates for shares of Common Stock upon the conversion of this Note.

DOCUMENT B-02262010a

  

  

  

 

2.6. Delivery of Conversion Shares. Shares from any such conversion will be delivered to Holder by 2:30pm EST within 2 (two) business days of conversion notice delivery (see 3.1) by “DWAC/FAST” electronic transfer (see “Share Delivery” attachment). If those shares are not delivered in accordance with this timeframe stated in this Section 2.6, at any time for any reason prior to offering those shares for sale in a private transaction or in the public market through its broker, Holder may rescind that particular conversion to have the conversion amount returned to the note balance with the conversion shares returned to the Borrower. The Company will make its best efforts to deliver shares to Holder same day / next day. For each conversion, in the event that shares are not delivered by the third business day (inclusive of the day of the conversion), a penalty of $2,000 per day will be assessed for each day after the third business day (inclusive of the day of the conversion) until share delivery is made; and such penalty will be added to the principal balance of the Note (under JMJ Financial’s expectation that any penalty amounts will tack back to the original date of the note).

 

2.7. Discharge By Payment. Conversions under this Convertible Promissory Note Document B-02262010a are available only after the Conversion Amount described herein is discharged by payment of equal or greater value from the Secured & Collateralized Promissory Note Document C-02262010a by either, at the Holder’s choice, cash payment, or surrender of security/collateral, or other negotiated form of payment mutually agreed to in writing.

 

2.8. Conversion Floor. The Borrower has the right to enforce a conversion floor of $0.65 per share as follows. If Borrower receives a conversion notice in which the Conversion Price is less than $0.65 per share, the Holder will incur a conversion loss [(Conversion Loss = $0.65 – Conversion Price) x number of shares being converted] which the Borrower must make whole by either of the following options:

 

Option A – Pay Conversion Loss in Cash. The Borrower may pay the conversion loss by cash payment in the amount as follows: make whole amount on the conversion loss = ($0.65 – Conversion Price) x number of shares being converted. Any such cash payment must be made by the third day from the time of the conversion notice.

 

Option B – Add Conversion Loss to Balance. The Borrower may convert the Conversion Amount into shares at $0.65 per share, and pay the conversion loss by adding the conversion loss to the balance of the note as follows: make whole amount on the conversion loss = ($0.65 – Conversion Price) x number of shares being converted. Any such make whole amount will automatically be added to the balance of the Note (under JMJ Financial’s expectation that any make whole amounts will tack back to the original date of the note).

 

ARTICLE 3 MISCELLANEOUS

 

3.1. Notices. Any notice required or permitted hereunder must be in writing and either personally served, sent by facsimile or email transmission, or sent by overnight courier. Notices will be deemed effectively delivered at the time of transmission if by facsimile or email, and if by overnight courier the business day after such notice is deposited with the courier service for delivery.

 

3.2. Amendment Provision. The term “Note” and all reference thereto, as used throughout this instrument, means this instrument as originally executed, or if later amended or supplemented, then as so amended or supplemented.

DOCUMENT B-02262010a

  

  

  

 

3.3. Assignability. This Note will be binding upon the Borrower and its successors and permitted assigns, and will inure to the benefit of the Holder and its successors and permitted assigns, and may be assigned by the Holder.

 

3.4. Governing Law. This Note will be governed by, and construed and enforced in accordance, with the laws of the State of Florida, without regard to the conflict of laws principles thereof. Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the state courts of Florida or in the federal courts located in Miami-Dade County, in the State of Florida. Both parties and the individuals signing this Agreement agree to submit to the jurisdiction of such courts.

 

3.5. Maximum Payments. Nothing contained herein may be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the event that the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess of such maximum will be credited against amounts owed by the Borrower to the Holder and thus refunded to the Borrower.

 

3.6. Attorney Fees. In the event any attorney is employed by either party to this Note with regard to any legal or equitable action, arbitration or other proceeding brought by such party for the enforcement of this Note or because of an alleged dispute, breach, default or misrepresentation in connection with any of the provisions of this Note, the prevailing party in such proceeding will be entitled to recover from the other party reasonable attorneys’ fees and other costs and expenses incurred, in addition to any other relief to which the prevailing party may be entitled.

 

3.7. No Public Announcement. Except as required by securities law, no public announcement may be made regarding this Note, payments, or conversions without written permission by both Borrower and Holder.

 

3.8. Opinion of Counsel. In the event that an opinion of counsel is needed for any matter related to this Note, Holder has the right to have any such opinion provided by its counsel. Holder also has the right to have any such opinion provided by Borrower’s counsel.

 

3.9. Effective Date. This Note will become effective only upon occurrence of the two following events: execution by both parties, and delivery of valid payment by the Lender in the form of the Secured & Collateralized Promissory Note Document C-02262010a (including Security & Collateral Agreement).

 

3.10. Director’s Resolution. Once effective, Borrower will execute and deliver to Holder a copy of a Board of Director’s resolution resolving that this note is validly issued, paid, and effective.

 

Signature Page to Follow

DOCUMENT B-02262010a

  

  

  

 

	
BORROWER[S]:

	  	  
	

	  	

	
Murray Fleming

	  	
Mark Schaftlein

	
Director

	  	
Director & Chairman

	
Nacel Energy Corp.

	  	
Nacel Energy Corp.

 

	
LENDER/HOLDER:

	 	  
	  	 	  
	

	 	  
	
JMJ Financial / Its Principal

	 	  
	  	 	  
	
EFFECTIVE DATE AS EXECUTED BY LENDER/HOLDER:

	
3/26/10             

 

	
NOTARY FOR SIGNATURE BY LENDER/HOLDER:

	  
	
3/26/10

 

DOCUMENT B-02262010a

  

  

  

 

SAMPLE

 

NOTICE OF CONVERSION

 

(To be executed by the Holder in order to convert the Note)

 

The undersigned hereby elects to convert a portion of the Note issued by Nacel Energy Corp. into Shares of Common Stock of Nacel Energy Corp. according to the conditions set forth in such Note, as of the date written below.

 

Date of Conversion:                                                                                                             

 

Conversion Amount:                                                                                                                 

 

Conversion Price:                                                                                                             

 

Shares To Be Delivered:                                                                                                   

 

Signature:                                                                                                                             

 

Print Name:                                                                                                                          

 

Address:                                                                                                                             

 

_____________________________________________________________________ 

 

_____________________________________________________________________

 

Shares from any such conversion will be delivered to Holder by 2:30pm EST within 2 (two) business days of conversion notice by “DWAC/FAST” electronic transfer in accordance with Section 2.6.

DOCUMENT B-02262010a

  

  

  

 

SHARE DELIVERY ATTACHMENT

 

EXAMPLE

 

2.6. Delivery of Conversion Shares. Shares from any such conversion will be delivered to Holder by 2:30pm EST within 2 (two) business days of conversion notice delivery (see 3.1) by “DWAC/FAST” electronic transfer (see “Share Delivery” attachment). If those shares are not delivered in accordance with this timeframe stated in this Section 2.6, at any time for any reason prior to offering those shares for sale in a private transaction or in the public market through its broker, Holder may rescind that particular conversion to have the conversion amount returned to the note balance with the conversion shares returned to the Borrower. The Company will make its best efforts to deliver shares to Holder same day / next day.

 

Example:

 

Holder delivers conversion notice to Borrower at 5:15pm eastern time on Monday January 1st.

 

Borrower’s transfer agent must deliver shares to Holder’s broker via “DWAC/FAST” electronic transfer by no later than 10:30am eastern time on Wednesday January 3rd.

DOCUMENT B-02262010a

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