Document:

cbai_ex101.htm

Exhibit 10.1

 

SETTLEMENT AND EXCHANGE AGREEMENT

This Settlement and Exchange Agreement (this “Agreement”), dated December 17, 2014 (the “Effective Date”), is entered into by and among St. George Investments LLC, a Utah limited liability company (formerly known as St George Investments LLC, an Illinois limited liability company) (“SGI”), Tonaquint, Inc., a Utah corporation (“Tonaquint”), and Cord Blood America, Inc., a Florida corporation (“Cord Blood”). Each of SGI and Tonaquint are sometimes individually referred to hereinafter as an “Investor Party,” and collectively as the “Investor Parties.”

 

A. SGI and Cord Blood previously entered into that certain Note and Warrant Purchase Agreement dated March 10, 2011 (the “SGI Purchase Agreement”), whereby Cord Blood issued to SGI a Secured Convertible Promissory Note dated March 10, 2011 in the original principal amount of $1,105,500.00 (the “SGI Note”) and a Warrant to Purchase Shares of Common Stock dated March 10, 2011 (the “Warrant”).  

 

B. Subsequent to entering into the SGI Purchase Agreement, Tonaquint, an affiliate of SGI, and Cord Blood entered into that certain Securities Purchase Agreement dated June 27, 2012 (the “Tonaquint Purchase Agreement”), whereby Cord Blood issued a Secured Convertible Promissory Note dated June 27, 2012 in the original principal amount of $1,252,000.00 to Tonaquint (the “Tonaquint Note”).

 

C. Cord Blood’s obligations under the Tonaquint Purchase Agreement and Tonaquint Note were secured by way of that certain Security Agreement dated June 27, 2012 (the “Tonaquint Security Agreement”) executed by Cord Blood; CorCell Companies, Inc., a Nevada corporation (“CCCI”); CorCell, Ltd., a Nevada corporation (“CCL”); Cord Partners, Inc., a Florida corporation (“CPI”); CBA Professional Services, Inc., d/b/a/ BodyCells, Inc., a Florida corporation (“CBAPSI”), which has been dissolved; CBA Properties, Inc., a Florida corporation (“CBAPI”); and Career Channel Inc., a Florida corporation (“Channel”), in favor of Tonaquint.  (Collectively, Cord Blood, CCCI, CCL, CPI, CBAPI, and Channel are referred to herein as the “Debtors”).

 

D. Cord Blood’s obligations under the Tonaquint Purchase Agreement and Tonaquint Note were further guaranteed by all of the Debtors other than Cord Blood pursuant to a certain Guaranty dated June 27, 2012 executed by all of the Debtors except Cord Blood for the benefit of Tonaquint (the “Tonaquint Guaranty”).

 

E. Cord Blood made payments under the SGI Note, but none under the Tonaquint Note, because it understood from the parties’ discussions that Cord Blood was not obligated to make payments under the Tonaquint Note until the SGI Note was paid off.

 

F. Tonaquint issued a default notice to Cord Blood dated August 23, 2013 for several alleged defaults (including nonpayment) under the Tonaquint Note.

 

G. In response, on or about August 30, 2013, Cord Blood filed a lawsuit against the Investor Parties in the United States District Court, District of Utah, Central Division, as Case No. 2:13-cv-00806 (the “Lawsuit”), alleging fraud and other claims.

 

  

  

  

 

H. Cord Blood also filed for a temporary restraining order and preliminary injunction in connection with the Lawsuit, but voluntarily withdrew the same after Tonaquint voluntarily halted efforts to sell assets it claimed were pledged under the Tonaquint Security Agreement.

 

I. The Investor Parties answered Cord Blood’s Complaint filed in the Lawsuit and asserted various counterclaims against Cord Blood.

 

J. The Investor Parties believe and have asserted that the combined outstanding balances of the SGI Note and the Tonaquint Note as of the date hereof are in excess of $11,500,000.00. Nevertheless, the Investor Parties have agreed to settle the Lawsuit on the terms and conditions set forth herein (including Tonaquint’s receipt of the Exchange Note (as defined below) having an initial outstanding balance that is significantly less than $11,500,000.00) in order to resolve the Lawsuit and avoid additional protracted litigation.

K. Cord Blood disputed the Investor Parties’ claims, including the amount of damages claimed by the Investor Parties, and asserted affirmative claims for relief.

L. After months of litigation, the parties now desire to settle the Lawsuit and all claims between them on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the promises set forth in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1. Incorporation of Recitals.  The foregoing recitals are contractual in nature and are incorporated herein as part of this Agreement.

2. Exchange of the Tonaquint Note.  Simultaneously with the execution of this Agreement, the parties hereto agree that, in exchange for the Tonaquint Note, Cord Blood shall issue to Tonaquint a Secured Convertible Promissory Note of even date herewith in the original principal amount of $2,500,000.00 in the form attached hereto as Exhibit A (the “Exchange Note”).  The parties acknowledge and agree that this exchange is intended to comport with the requirements of Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”).  The parties further acknowledge that for purposes of Rule 144 of the Securities Act, it is their intent that the holding period of the Exchange Note issued hereunder (including the corresponding Conversion Shares (as defined in the Exchange Note)) will include the holding period of the Tonaquint Note from June 27, 2012. In furtherance thereof, the parties represent and warrant to Tonaquint that they have no knowledge of any fact or circumstance that would prevent the holding period of the Exchange Note (including the corresponding Conversion Shares) from including the holding period of the Tonaquint Note from June 27, 2012.  As set forth in more detail in Section 9.1, the parties agree to take any reasonable actions and execute any reasonable documents and agreements as the other party may reasonably request from time to time in support of such position. The parties agree not to take a position contrary to this Section 2.  Cord Blood agrees to issue the Exchange Note (and any Conversion Shares) without restriction and not containing any restrictive legend without the need for any action by Tonaquint, provided that the applicable holding period has been met. In furtherance thereof, counsel to Tonaquint shall provide an opinion that: (a) the Conversion Shares issuable to Tonaquint upon conversion of the Exchange Note may be resold pursuant to Rule 144 without volume or manner-of-sale restrictions or current public information requirements; and (b) the transactions contemplated hereby and all other documents associated with this transaction comport with the requirements of Section 3(a)(9) of the Securities Act. The Exchange Note is being issued in substitution of and exchange for, and not in satisfaction of, the Tonaquint Note, and no other cash or property has been given for the Exchange Note except for the surrender of the Tonaquint Note to Cord Blood for cancellation. The Exchange Note shall not constitute a novation or satisfaction and accord of the Tonaquint Note.

  

2

  

 

3. Amendment to Security Agreement. Simultaneously with the execution of this Agreement, the parties hereto agree that Cord Blood, all other Debtors, and Tonaquint shall execute and deliver to each other that certain First Amendment to Security Agreement in the form attached hereto as Exhibit B (the “Amendment to Security Agreement”), which shall amend the Tonaquint Security Agreement as set forth therein.  Consistent with the Amendment to Security Agreement, all parties hereto acknowledge and agree that it is their intent that the Tonaquint Security Agreement has been effective since June 27, 2012 and secures all obligations arising under the Exchange Note issued hereunder. The parties hereto further acknowledge and agree that it is their intent that the security interest created by the Tonaquint Security Agreement remains an unbroken and continuous security interest and lien position since the original date the Tonaquint Security Agreement was entered into. The parties represent and warrant that they are not aware of any facts or circumstances in contravention of the parties’ intent expressed in the foregoing sentence and further agree not to take any position to the contrary of that intent.

4. Representations and Warranties.

4.1. Representations and Warranties of the Debtors. Each Debtor represents and warrants to the Investor Parties as follows:

4.1.1. Authority for Agreement. Such Debtor has full power, authority and legal right and capacity to enter into and perform such Debtor’s obligations under this Agreement and each other document contemplated hereby to which such Debtor is or will be a party and to consummate the transactions contemplated hereby and thereby.  Such Debtor has approved this Agreement and the other documents contemplated hereby and the transactions contemplated hereby and thereby and has authorized the execution, delivery and performance of this Agreement and the other documents contemplated hereby and the consummation of the transactions contemplated hereby and thereby.  No other proceedings on the part of such Debtor, whether by the officers, directors, members, managers or otherwise, are necessary to approve and authorize the execution, delivery and performance of this Agreement and the other documents contemplated hereby and the consummation of the transactions contemplated hereby and thereby.  This Agreement and the other documents contemplated hereby to which such Debtor is a party have been duly executed and delivered by such Debtor and are legal, valid and binding obligations of such Debtor, enforceable against such Debtor in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws.

  

3

  

 

4.1.2. No Violation to Result. The execution, delivery and performance by such Debtor of this Agreement and the other documents contemplated hereby and the consummation by such Debtor of the transactions contemplated hereby and thereby, do not and will not, directly or indirectly (with or without notice or lapse of time):  (i) violate, breach, conflict with, constitute a default under, accelerate or permit the acceleration of the performance required by any note, debt instrument, security agreement, mortgage or any other contract to which such Debtor is a party or by which such Debtor is bound or any material law, judgment, decree, order, rule, regulation, permit, license or other legal requirement of any government authority applicable to such Debtor; (ii) give any government authority or other person the right to challenge any of the transactions contemplated by this Agreement; or (iii) result in the creation or imposition of any encumbrance, lien, or claim, or the possibility of any encumbrance, lien or claim, or restriction in favor of any person upon the Exchange Note or any of the properties or assets of such Debtor.  No notice to, filing with, or consent of, any person is necessary in connection with, nor is any “change of control” provision triggered by, the execution, delivery or performance by such Debtor of this Agreement and the other documents contemplated hereby nor the consummation by such Debtor of the transactions contemplated hereby or thereby.  Such Debtor has given all notices, made all filings and obtained all consents necessary for the consummation of the transactions contemplated herein.

4.1.3. Intercreditor Agreement. The Havi Loan (as defined in the Intercreditor Agreement (as defined below)), and all other indebtedness owed by Cord Blood or its affiliates to HAVI (as defined in the Intercreditor Agreement) that is subject to the terms of the Intercreditor Agreement, has been repaid in full as of the date hereof.

4.2. Representations and Warranties of the Investor Parties. Each Investor Party represents and warrants to the Debtors as follows:

4.2.1. Authority for Agreement. Such Investor Party has full power, authority and legal right and capacity to enter into and perform such Investor Party’s obligations under this Agreement and each other document contemplated hereby to which such Investor Party is or will be a party and to consummate the transactions contemplated hereby and thereby.  Such Investor Party has approved this Agreement and the other documents contemplated hereby and the transactions contemplated hereby and thereby and has authorized the execution, delivery and performance of this Agreement and the other documents contemplated hereby and the consummation of the transactions contemplated hereby and thereby.  No other proceedings on the part of such Investor Party, whether by the officers, directors, members, managers or otherwise, are necessary to approve and authorize the execution, delivery and performance of this Agreement and the other documents contemplated hereby and the consummation of the transactions contemplated hereby and thereby.  This Agreement and the other documents contemplated hereby to which such Investor Party is a party have been duly executed and delivered by such Investor Party and are legal, valid and binding obligations of such Investor Party, enforceable against such Investor Party in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws.

  

4

  

 

4.2.2. No Violation to Result. The execution, delivery and performance by such Investor Party of this Agreement and the other documents contemplated hereby and the consummation by such Investor Party of the transactions contemplated hereby and thereby, do not and will not, directly or indirectly (with or without notice or lapse of time):  (i) violate, breach, conflict with, constitute a default under, accelerate or permit the acceleration of the performance required by any note, debt instrument, security agreement, mortgage or any other contract to which such Investor Party is a party or by which such Investor Party is bound or any material law, judgment, decree, order, rule, regulation, permit, license or other legal requirement of any government authority applicable to such Investor Party; or (ii) give any government authority or other person the right to challenge any of the transactions contemplated by this Agreement.  No notice to, filing with, or consent of, any person is necessary in connection with, nor is any “change of control” provision triggered by, the execution, delivery or performance by such Investor Party of this Agreement and the other documents contemplated hereby nor the consummation by such Investor Party of the transactions contemplated hereby or thereby.  Such Investor Party has given all notices, made all filings and obtained all consents necessary for the consummation of the transactions contemplated herein.

5. Additional Agreements.  Simultaneously with the execution of this Agreement, Cord Blood also agrees to execute (or cause the execution of) and deliver to Tonaquint the following documents:

5.1. Consent to Entry of Judgment by Confession dated of even date herewith in the form attached hereto as Exhibit C (the “Confession”), which Tonaquint may file in accordance with the terms of the Exchange Note;

5.2. Amendment to Guaranty dated of even date herewith in the form attached hereto as Exhibit D (the “Amendment to Guaranty”), executed by all of the Debtors except Cord Blood for the benefit of Tonaquint, which amends the Tonaquint Guaranty as set forth therein; and

5.3. Secretary’s Certificate dated of even date herewith in the form attached hereto as Exhibit E, executed by the duly elected Secretary of Cord Blood.

6. Termination of Certain Agreements.  The parties hereto acknowledge and agree that, effective as of the Effective Date:

6.1. SGI Transaction.  Each of the following agreements pertaining to the SGI Purchase Agreement is hereby terminated, cancelled, and extinguished and made of no further force or effect, without the need for any additional action by any party:

6.1.1. SGI Purchase Agreement;

6.1.2. SGI Note;

6.1.3. Warrant;

 

  

5

  

 

6.1.4. Irrevocable Instructions to Transfer Agent dated March 10, 2011 executed by Cord Blood and SGI;

6.1.5. Security Agreement dated March 10, 2011 by and between Cord Blood and SGI;

6.1.6. Secured Buyer Note #1 dated March 10, 2011 in the original principal amount of $125,000, issued by SGI to Cord Blood (“Secured Buyer Note #1”);

6.1.7. Secured Buyer Note #2 dated March 10, 2011 in the original principal amount of $125,000, issued by SGI to Cord Blood (“Secured Buyer Note #2”);

6.1.8. Secured Buyer Note #3 dated March 10, 2011 in the original principal amount of $125,000, issued by SGI to Cord Blood (“Secured Buyer Note #3”);

6.1.9. Secured Buyer Note #4 dated March 10, 2011 in the original principal amount of $125,000, issued by SGI to Cord Blood (“Secured Buyer Note #4”);

6.1.10. Secured Buyer Note #5 dated March 10, 2011 in the original principal amount of $125,000, issued by SGI to Cord Blood (“Secured Buyer Note #5”);

6.1.11. Secured Buyer Note #6 dated March 10, 2011 in the original principal amount of $125,000, issued by SGI to Cord Blood (“Secured Buyer Note #6,” and together with Secured Buyer Note #1, Secured Buyer Note #2, Secured Buyer Note #3, Secured Buyer Note #4, and Secured Buyer Note #5, the “Secured Buyer Notes”);

6.1.12. Letter of Credit Agreement dated March 10, 2011 by and between Cord Blood and SGI;

6.1.13. Escrow Agreement dated March 10, 2011 by and among SGI, Cord Blood, and Griffiths & Turner/GT Title Services, Inc.; and

6.1.14. Any and all other documents, agreements, instruments or certificates relating to the SGI Purchase Agreement transaction.

           Consistent with the foregoing, and without limiting the releases in Section 7 below, each party hereto acknowledges and agrees that (1) SGI hereby forgives the outstanding balance of the SGI Note, (2) SGI hereby forgives all outstanding obligations of Cord Blood under the Warrant, the SGI Note, the SGI Purchase Agreement, and the Secured Buyer Notes or otherwise, (3) the Irrevocable Standby Letter of Credit issued by The Private Bank, Chicago, Illinois, and previously held under the Escrow Agreement, has previously been released by the escrow agent to SGI, and Cord Blood has no rights or claims pertaining thereto, (4) SGI has previously paid in full the outstanding balance of each of the Secured Buyer Notes and has no further obligations under any Secured Buyer Note; and (5) CBAI owes no further duties or obligations of any kind to SGI.

  

6

  

 

6.2. Tonaquint Transaction.  Each of the following agreements pertaining to the Tonaquint Purchase Agreement is hereby terminated, cancelled, and extinguished and made of no further force or effect, without the need for any additional action by any party:

6.2.1. Tonaquint Purchase Agreement;

6.2.2. Judgment by Confession executed by Cord Blood on June 27, 2012 in favor of Tonaquint;

6.2.3. Irrevocable Instructions to Transfer Agent dated June 28, 2012 executed by Cord Blood and Tonaquint;

6.2.4. Share Issuance Resolution dated June 27, 2012 executed by a Cord Blood officer;

6.2.5. Intercreditor Subordination Agreement dated June 27, 2012 (the “Intercreditor Agreement”); and

6.2.6. Any and all other documents, agreements, instruments or certificates relating to the Tonaquint Purchase Agreement transaction, other than the agreements and instruments identified in the paragraph below.

           Consistent with Section 2 above, the parties confirm that the Tonaquint Note is not being terminated hereunder, but rather is being exchanged for the Exchange Note, and as a result, the Investor Parties have surrendered the Tonaquint Note to Cord Blood for cancellation.  Consistent with Section 3 above, the parties confirm that the Tonaquint Security Agreement is not being terminated hereunder, but rather is being amended by way of the Amendment to Security Agreement. Consistent with Section 5.2 above, the parties confirm that the Tonaquint Guaranty is not being terminated hereunder, but rather is being amended by way of the Amendment to Guaranty.

6.3. Without limiting any other provision contained in this Agreement, or the Exchange Note, Amendment to Security Agreement, Amendment to Guaranty, Confession, any other document listed in Section 5, or any other documents, agreements, or instruments entered into or delivered in connection with this Agreement (collectively, the “Settlement Documents”), each party acknowledges and agrees that, from and after the Execution Date, such party will have no further rights and be subject to no further obligations set forth in any of the agreements being terminated pursuant to Sections 6.1 and 6.2 above (collectively, the “Terminated Agreements”).

 

7. Mutual Release and Waiver.

7.1. Release by the Investor Parties.  Upon the execution of this Agreement by all parties hereto, each of the Investor Parties, for itself and its directors, shareholders, managers, members, officers, employees, agents, attorneys, subsidiaries, affiliates, successors and assigns, and any and all past and present such persons acting by, through or under the Investor Parties (collectively, the “Investor Releasing Parties”), forever relieves, releases and discharges Cord Blood, each Debtor, CBAPSI and each of their shareholders, directors, officers, employees, agents, attorneys, successors and assigns, and any and all past and present such persons (collectively, the “Cord Blood Released Parties”), from any and all claims, debts, liabilities, demands, obligations, promises, acts, agreements, costs and expenses (including, but not limited to, attorneys’ fees), damages, injuries, actions and causes of actions, of whatever kind or nature, whether legal or equitable, known or unknown, suspected or unsuspected, contingent or fixed (each a “Claim,” and collectively, the “Claims”), that such Investor Party or any of the other Investor Releasing Parties may have that are based upon, relate to or arise out of the Lawsuit, the Terminated Agreements, the Tonaquint Guaranty, the Tonaquint Note or Tonaquint Security Agreement, arising or accruing before the Effective Date.  Each Cord Blood Released Party is an intended third party beneficiary of the release and waiver contained in this Section.

 

  

7

  

 

7.2. Release by Cord Blood. Upon the execution of this Agreement by all parties hereto, Cord Blood and each other Debtor, for itself and its officers, directors, shareholders, employees, agents, attorneys, subsidiaries, affiliates, successors and assigns, and any and all past and present such persons acting by, through or under the Debtors (collectively, the “Cord Blood Releasing Parties”), forever relieves, releases and discharges each Investor Party and each of their shareholders, directors, members, managers, officers, employees, agents, attorneys, affiliates, successors and assigns, and any and all past and present such persons (the “Investor Released Parties”), from any and all Claims that Cord Blood or any other Cord Blood Releasing Party may have that are based upon, relate to or arise out of the Lawsuit, the Terminated Agreements, the Tonaquint Guaranty, the Tonaquint Note or Tonaquint Security Agreement, arising or accruing before the Effective Date. Each Investor Released Party is an intended third party beneficiary of the release and waiver contained in this Section.

7.3. Release Representations.  Each party hereto, for itself and on behalf of such party’s other respective releasing parties, represents, warrants and agrees that (a) the release and waiver contained in this Section 7 shall not apply to any obligations, covenants, conditions, representations or warranties arising under any of the Settlement Documents, (b) such party hereby waives any Claims such party has against any of the parties it is releasing hereunder, and covenants not to institute against any of the parties it is releasing hereunder any proceeding, suit or action, at law or in equity, of whatsoever kind or nature, whether criminal or civil, or in any way to aid in or encourage the institution or prosecution thereof, for damages, expenses, compensation, injunctive relief or otherwise, arising from, related to, or based upon any Claim, and (c) none of the Claims such party is releasing and waiving hereunder have been sold, assigned or otherwise transferred or encumbered (directly or indirectly) to any person or party whatsoever, and such party has the full right and power to grant, execute and deliver the full and complete release and waiver contained herein.

7.4. Unknown Claims.  Each party hereto represents that it is not aware of any claim against or involving any party it is releasing hereunder other than the Claims, all of which are released hereunder.  Each party hereto acknowledges that it has been advised by legal counsel and is familiar with a legal principle that may provide that a general release does not extend to claims which the releasor does not know or suspect to exist in its favor at the time of executing the release, which if known by it must have materially affected its settlement with the releasee.  Each party hereto, being aware of said principle, agrees to expressly waive any rights to this effect, as well as under any other statute or common law principles of similar effect.

 

  

8

  

 

8. Dismissal of Lawsuit. Upon the execution and delivery of all the Settlement Documents by all parties thereto, the parties agree to cause the Lawsuit to be dismissed.  Such dismissal shall be with prejudice and upon the merits and shall occur by way of the Stipulated Motion to Dismiss and Order of Dismissal in the forms attached hereto as Exhibit F, to be appropriately executed and filed with the court in which the Lawsuit has been filed no later than five (5) Trading Days (as defined below) after the Effective Date.  The parties agree that the Order of Dismissal shall have claim and issue preclusive effect on all claims and/or issues that were or could have been raised in the Lawsuit.

9. Miscellaneous.

9.1.  Further Assurances.  At any time or from time to time after the Effective Date, at the request of a party hereto, and without further consideration, each of the parties hereto shall do and perform or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as another party hereto may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby, as well as to comply with securities laws pertaining to the note exchange occurring pursuant to Section 2 above.

9.2. Governing Law; Venue. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Utah for contracts to be wholly performed in such state and without giving effect to the principles thereof regarding the conflict of laws.  Each party hereto hereby (a) consents to and submits to the exclusive jurisdiction of any state or federal court sitting in Salt Lake County, Utah in connection with any dispute or proceeding arising out of or relating to this Agreement, (b) agrees that all claims in respect of any such dispute or proceeding may only be heard and determined in any such court, (c) expressly submits to the exclusive personal jurisdiction and venue of any such court for the purposes hereof, and (d) waives any claim of improper venue and any claim or objection that such courts are an inconvenient forum or any other claim or objection to the bringing of any such proceeding in such jurisdictions or to any claim that such venue of the suit, action or proceeding is improper.

 

9.3. Notices. Any notice required or permitted hereunder shall be given in writing (unless otherwise specified herein) and shall be deemed effectively given (unless otherwise specified herein) on the earliest of:

 

9.3.1. the date delivered, if delivered by personal delivery as against written receipt therefor or by email to an executive officer,

 

9.3.2. the fifth Trading Day (defined below) after deposit, postage prepaid, in the United States Postal Service (with delivery confirmation or by certified mail), or

 

9.3.3. the second Trading Day after mailing by domestic or international express courier (e.g., FedEx), with delivery costs and fees prepaid,

 

  

9

  

 

in each case, addressed to each of the other parties thereunto entitled at the following addresses (or at such other addresses as such party may designate by five (5) Trading Days’ advance written notice similarly given to each of the other parties hereto):

If to Cord Blood or any other Debtor:

Cord Blood America, Inc.

Attn: Joseph R. Vicente and Stephen Morgan

1857 Helm Drive

Las Vegas, NV 89119

with a copy to (which shall not constitute notice):

Stoel Rives LLP

Attn: David L. Mortensen

Attn: Rob Yates

201 S. Main Street, Suite 1100

Salt Lake City, Utah 84111-4904

Telephone: 801.578.6909

Email: dlmortensen@stoel.com

If to Tonaquint:

Tonaquint, Inc.

Attn: John M. Fife

303 East Wacker Drive, Suite 1040

Chicago, Illinois  60601

with a copy to (which shall not constitute notice):

Hansen Black Anderson Ashcraft PLLC

Attn: Jonathan K. Hansen

3051 West Maple Loop Drive, Suite 325

Lehi, Utah 84043

Telephone: 801.922.5000

Email: jhansen@HBAAlaw.com

For purposes of this Agreement, “Trading Day” means any day during which the principal trading market for Cord Blood’s securities in the United States shall be open for business.

9.4. Severability.  If any part of this Agreement is construed to be in violation of any law, such part shall be modified to achieve the objective of the parties hereto to the fullest extent permitted and the balance of this Agreement shall remain in full force and effect.

 

  

10

  

 

9.5.  Successors.  This Agreement shall be binding upon the parties hereto and their respective heirs, legal representatives, successors and assigns and shall inure to the benefit of the parties and their respective heirs, successors and assigns.

9.6. Amendment and Waiver. The provisions of this Agreement may be amended and waived only with the prior written consent of the parties hereto to which such amendment and/or waiver applies.

9.7.  Entire Agreement. This Agreement and the exhibits attached hereto constitutes the sole and entire agreement between the parties, whether written or oral, relating to the subject matter hereof, and supersedes all prior discussions and communications pertaining thereto.

9.8. Attorneys’ Fees.  In the event of any dispute relating to this Agreement or to the subject matter hereof, the prevailing party shall be entitled to collect from the other party any and all reasonable costs (including attorneys’ fees) incurred by the prevailing party in connection with such dispute.  Such relief shall be in addition to any other relief to which the prevailing party is entitled.

9.9. Counterparts. This Agreement may be signed in one or more counterparts, which together shall constitute one document. Additionally, facsimile signatures or signatures conveyed via e-mail in one or more counterparts of this Agreement shall be binding.

9.10. Acknowledgement. By executing this Agreement, each of the parties evidences that it carefully read and fully understands all of the provisions of this Agreement.  Each party further acknowledges that, in executing this Agreement, it has not relied on any promise of future benefit or any statement of any of the other parties hereto, or anyone representing any of the parties hereto, whether written or oral, not set forth in this Agreement.

9.11. Ownership Limitation. Notwithstanding anything to the contrary contained in this Agreement or the other Settlement Documents, if at any time Tonaquint shall or would be issued shares of Common Stock (as defined in the Exchange Note) under any of the Settlement Documents, but such issuance would cause Tonaquint (together with its affiliates) to beneficially own a number of shares exceeding the Maximum Percentage (as defined in the Exchange Note), then Cord Blood must not issue to Tonaquint the shares that would cause Tonaquint to exceed the Maximum Percentage (the “Ownership Limitation Shares”).  In order to assist Cord Blood with its compliance with the foregoing covenant, Tonaquint shall clearly indicate on any conversion notice or other request for shares the number of shares of Common Stock it beneficially owns as of the date of such notice or request.  Cord Blood shall be entitled to rely on the number of shares Tonaquint indicates that it beneficially owns as of the date of such notice or request.  Cord Blood will reserve the Ownership Limitation Shares for the exclusive benefit of Tonaquint. From time to time, Tonaquint may notify Cord Blood in writing of the number of the Ownership Limitation Shares that may be issued to Tonaquint without causing Tonaquint to exceed the Maximum Percentage. Upon receipt of such notice, Cord Blood shall promptly issue such designated shares to Tonaquint, with a corresponding reduction in the number of the Ownership Limitation Shares. For purposes of this Section, beneficial ownership of Common Stock will be determined under Section 13(d) of the Securities Exchange Act of 1934, as amended.  For the avoidance of doubt, the “Ownership Limitation Shares” only include Common Stock shares equal to the Conversion Eligible Amount as designated by Borrower that would have exceeded the Maximum Percentage.

  

11

  

 

9.12. Time of the Essence. Time is expressly made of the essence of each and every provision of this Agreement.

[Remainder of page intentionally left blank; signature page to follow]

 

  

12

  

 

IN WITNESS WHEREOF, the undersigned have executed this Agreement to be effective as of the Effective Date.

EXHIBITS:

Exhibit A – Exchange Note

Exhibit B – Amendment to Security Agreement

Exhibit C – Confession

Exhibit D – Amendment to Guaranty

Exhibit E – Secretary’s Certificate

Exhibit F – Dismissal Documents

SGI:

ST. GEORGE INVESTMENTS LLC

By: Fife Trading, Inc., its Manager

                                   By: /s/ John M. Fife

            John M. Fife, President

TONAQUINT:

TONAQUINT, INC.

                 By: /s/ John M. Fife

       John M. Fife, President

CORD BLOOD:

CORD BLOOD AMERICA, INC.

 
By: /s/ Joseph R. Vicente

Name: Joseph R. Vicente

Title: President                                             

  

[Signature page to Settlement and Exchange Agreement]

  

 

Signing with respect to Sections 3, 4, 5.2, 7 and 9 only:

DEBTORS:

CORCELL COMPANIES, INC.

By: /s/ Joseph R. Vicente

Name: Joseph R. Vicente

Title: President                                                                        

CORCELL LTD.

By: /s/ Joseph R. Vicente

Name: Joseph R. Vicente

Title: President 

 

CORD PARTNERS, INC.

By: /s/ Joseph R. Vicente

Name: Joseph R. Vicente

Title: President 

CBA PROPERTIES, INC.

By: /s/ Joseph R. Vicente

Name: Joseph R. Vicente

Title: President                                                                            

CAREER CHANNEL INC.

By: /s/ Joseph R. Vicente

Name: Joseph R. Vicente

Title: President                                                                       

 

  

[Signature page to Settlement and Exchange Agreement]

  

 

EXHIBIT A

EXCHANGE NOTE

  

  

  

 

EXHIBIT B

AMENDMENT TO SECURITY AGREEMENT

  

  

  

 

EXHIBIT C

CONFESSION

  

  

  

 

EXHIBIT D

AMENDMENT TO GUARANTY

  

  

  

 

EXHIBIT E

SECRETARY’S CERTIFICATE

  

  

  

 

EXHIBIT F

DISMISSAL DOCUMENTScbai_ex102.htm

Exhibit 10.2

 

THIS NOTE IS ISSUED IN EXCHANGE FOR (WITHOUT ANY ADDITIONAL CASH OR PROPERTY CONSIDERATION) THE SECURED CONVERTIBLE PROMISSORY NOTE IN THE ORIGINAL PRINCIPAL AMOUNT OF $1,252,000.00 ORIGINALLY ISSUED BY BORROWER (AS DEFINED BELOW) AS OF JUNE 27, 2012.  FOR PURPOSES OF RULE 144, THE PARTIES INTEND THAT THIS NOTE BE DEEMED TO HAVE BEEN ISSUED ON JUNE 27, 2012.

 

NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT.

 

SECURED CONVERTIBLE PROMISSORY NOTE

 

	Exchange Date: December 17, 2014 	U.S. $2,500,000.00

 

FOR VALUE RECEIVED, Cord Blood America, Inc., a Florida corporation (“Borrower”), promises to pay to Tonaquint, Inc., a Utah corporation, or its successors or assigns (“Lender”), $2,500,000.00 and any interest, fees, charges, and late fees on the date that is thirty-three (33) months after the Exchange Date (as defined below) (the “Maturity Date”) in accordance with the terms set forth herein and to pay interest on the Outstanding Balance (as defined below) at the rate of seven and one half percent (7.5%) per annum from the Exchange Date until the same is paid in full. This Secured Convertible Promissory Note (this “Note”) is made and entered into as of December 17, 2014, but is effective as of June 27, 2012. All interest calculations hereunder shall be computed on the basis of a 360-day year comprised of twelve (12) thirty (30) day months, shall compound daily and shall be payable in accordance with the terms of this Note. This Note is issued pursuant to that certain Settlement and Exchange Agreement dated December 17, 2014 (the “Exchange Date”), as the same may be amended from time to time (the “Exchange Agreement”), by and among Borrower, Lender, and St. George Investments LLC, a Utah limited liability company (formerly known as St George Investments LLC, an Illinois limited liability company), pursuant to which Lender exchanged a certain Convertible Promissory Note (as set forth above) for this Note, pursuant to Section 3(a)(9) of the 1933 Act. Certain capitalized terms used herein are defined in Attachment 1 attached hereto and incorporated herein by this reference.

 

1. Payment; Prepayment. Provided there remains any Outstanding Balance, on each Installment Date (as defined below), Borrower shall pay to Lender an amount equal to the Installment Amount (as defined below) due on such Installment Date in accordance with Section 7. All payments owing hereunder shall be in lawful money of the United States of America or Conversion Shares (as defined below), as provided for herein, and delivered to Lender at the address or otherwise in the manner set forth herein, as applicable. Lender shall provide its wire transfer instructions to Borrower within three (3) Trading Days after receiving a written request from Borrower that is delivered in compliance with Section 20 below; provided that, for the avoidance of doubt, Lender’s failure to comply with such covenant shall not alleviate, mitigate or obviate Borrower’s obligation to pay Installment Amounts as and when due hereunder.  Lender shall promptly provide any changes in its wiring instructions to Borrower. All payments shall be applied first to (a) costs of collection, if any, then to (b) fees and charges, if any, including without limitation Late Fees (as defined below), then to (c) accrued and unpaid interest, and thereafter, to (d) principal; provided that the foregoing application of payments shall be made on an installment payment by installment payment basis. For illustration purposes only, if Borrower fails to pay 

 

  

  

  

 

the Installment Amount that is due six (6) months from the Exchange Date (the “First Late Payment”) and also fails to pay the Installment Amount due on the date that is seven (7) months from the Exchange Date (the “Second Late Payment”), and for which Late Fees in the amount of $75,000.00 (the “First Late Payment Late Fees”) have accrued with respect to the First Late Payment and Late Fees in the amount of $15,000.00 (the “Second Late Payment Late Fees”) have accrued with respect to the Second Late Payment, and if Borrower pays to Lender the sum of $200,000.00 on the fifty-first (51st) day from the date the First Late Payment was due, then in such event such payment would be applied as follows (assuming for purposes of this example there are no attorneys’ fees, collection costs, or default interest owed with respect to either the First Late Payment or the Second Late Payment): first, $75,000.00 would be applied towards the First Late Payment Late Fees; second, $100,000.00 would be applied towards the First Late Payment (which would include the applicable principal and interest owed with respect to such payment); third, $15,000.00 would be applied towards the Second Late Payment Late Fees; and lastly, $10,000.00 would be applied towards the Second Late Payment (which would first be applied towards any interest associated with such Second Late Payment, and then to principal). Notwithstanding the foregoing or anything to the contrary herein, Borrower may, in its sole and absolute discretion, pay in cash all or any portion of the Outstanding Balance of this Note at any time. Any prepayment shall be applied to the next Installment Amount or Installment Amounts due under this Note.  Upon written request from Borrower that is delivered in accordance with Section 20 below, Lender shall deliver a written payoff amount, calculating and stating all amounts owed under this Note within three (3) Trading Days of Lender’s receipt of such a written request from Borrower; provided, however, that in the event Lender fails to deliver a written payoff amount to Borrower within such three (3) Trading Day period, Borrower’s exclusive remedy shall be that (a) the next Installment Amount or Installment Amounts due shall be deferred until the date that is two (2) Trading Days following the date Lender provides the written payoff amount (provided that, for the avoidance of doubt, any such deferrals in payment of Installment Amounts shall not alter or delay any Installment Date other than those that occur during a period where Lender has failed to deliver the payoff amount as set forth herein), and (b) no interest shall accrue on the amount Borrower seeks to prepay, for the period beginning on the fourth (4th) Trading Day following Lender’s receipt of such request until the day Lender delivers the written payoff amount to Borrower.

 

2. Security. This Note is secured by that certain Security Agreement dated June 27, 2012, as amended pursuant to that certain Amendment to Security Agreement (as defined in the Exchange Agreement) of even date herewith (as amended, the “Security Agreement”), executed by Borrower and encumbering Borrower’s assets, as specifically set forth in the Security Agreement. Borrower acknowledges that Lender filed UCC-1 Financing Statements (the “UCC-1 Filings”) with the Florida Secretary of State on or about June 29, 2012 and the Nevada Secretary of State on or about June 28, 2012 in order to perfect the security interests granted to it pursuant to the Security Agreement and agrees that, notwithstanding the fact that such UCC-1 Filings were made and the Security Agreement was entered into prior to the Exchange Date, it is Borrower’s intent that this Note is secured by such Security Agreement and that it relates back to such Security Agreement. It is the intent of Borrower and Lender that the security interest remains an unbroken and continuous security interest and lien position since the original date the Security Agreement was entered into and was perfected on the applicable dates of the UCC-1 Filings. In furtherance thereof, each of Borrower and Lender acknowledges, represents and warrants to the other that it has no knowledge of any facts or circumstances that would be inconsistent with such intent and position. Borrower and Lender each further agrees not to take a position contrary to the representations and warranties made in this Section 2 and to take such reasonable actions and execute such documents and agreements as the other may reasonably request from time to time in support of such position. This Note is further guaranteed by that certain Guaranty dated June 27, 2012, as amended pursuant to that certain Amendment to Guaranty (as defined in the Exchange Agreement) of even date herewith, executed by all of the Debtors (as defined in the Exchange Agreement) other than Borrower. Borrower further acknowledges and agrees that it believes that the fair market value of the collateral pledged through the Security Agreement exceeds the Outstanding Balance as of the Exchange Date, provided that Lender acknowledges that any breach of such representation shall not constitute a default under this Note and agrees not to bring any claim, suit or other action against Borrower as a result of any breach of such representation except as it relates to Lender’s protection of its interests in the event of Borrower’s bankruptcy.

 

  

2

  

 

3. Lender Optional Conversion.

 

3.1. Conversion Price. The conversion price for each Conversion (as defined below) (the “Conversion Price”) shall be 70% of the average of the three (3) lowest Closing Bid Prices of the Common Stock (as defined below) in the twenty (20) Trading Days immediately preceding the applicable Conversion.

 

3.2. Conversions. Lender has the right at any time after the Exchange Date until the Outstanding Balance has been paid in full, at its election and in its sole discretion, to convert (each instance of conversion is referred to herein as a “Conversion”) all or any part of the Conversion Eligible Amount into shares (“Conversion Shares”) of fully paid and non-assessable common stock, $0.0001 par value per share (“Common Stock”), of Borrower as per the following conversion formula: the number of Conversion Shares equals the amount being converted (the “Conversion Amount”) divided by the Conversion Price. For the avoidance of doubt, if the Conversion Eligible Amount is equal to $0.00, then Lender shall not have the right to convert any portion of the Outstanding Balance until Borrower has designated a Conversion Eligible Amount pursuant to the terms of Section 7.2 below. Additionally, if Lender has delivered a Conversion Notice (as defined below), together with all legal opinions and/or other documents reasonably required for issuance of Common Stock, to Borrower and Borrower has sufficient authorized and unissued shares of Common Stock available to satisfy the Conversion Notice, Borrower may not pay the Conversion Amount set forth in such Conversion Notice in cash, but instead shall be unconditionally obligated to deliver the applicable Conversion Shares in accordance with the terms of this Note. If Lender delivers a Conversion Notice, together with all legal opinions and/or other documents reasonably required for issuance of Common Stock, to Borrower and Borrower does not have sufficient authorized and unissued shares of Common Stock available to satisfy the Conversion Notice, Borrower may pay the applicable Conversion Amount in cash, provided that any cash paid to Lender pursuant to this sentence shall not be applied towards the next Installment Amount due under this Note, but instead shall merely reduce the Outstanding Balance as if Borrower delivered Conversion Shares to Lender in accordance with this Section 3.2. In furtherance of the foregoing, Borrower agrees to notify Lender of the number of authorized and unissued shares of Common Stock it has available within three (3) Trading Days of its receipt of a written request from Lender that is delivered in accordance with Section 20 below. Conversion notices in the form attached hereto as Exhibit A (each, a “Conversion Notice”) may be effectively delivered to Borrower by any method of Lender’s choice (including but not limited to email, mail, overnight courier, or personal delivery), and all Conversions shall be cashless and not require further payment from Lender. Borrower shall deliver the Conversion Shares from any Conversion to Lender in accordance with Section 8 below within three (3) Trading Days of Lender’s delivery of the Conversion Notice to Borrower. For the avoidance of doubt, the Conversion Amount shall not be subtracted from the Outstanding Balance unless and until Lender has received the applicable Conversion Shares as set forth herein. Notwithstanding the foregoing, if Borrower fails to deliver Conversion Shares to Lender as and when required hereunder, Lender may, at any time prior to its receipt of the applicable Conversion Shares, cancel such Conversion by delivering written notice thereof to Borrower, in which event any Event of Default that may have occurred as a result of Borrower’s failure to deliver Conversion Shares shall be deemed to have been cured as of the date Borrower receives such notice and Borrower shall have no further obligation to deliver the applicable Conversion Shares; provided that, for the avoidance of doubt, all Late Fees that may have accrued prior to the date such Event of Default is deemed to have been cured shall remain payable to Lender pursuant to the terms of this Note.

 

  

3

  

 

4. Defaults and Remedies.

 

4.1. Defaults. The following are events of default under this Note (each, an “Event of Default”): (i) Borrower shall fail to pay any principal, interest, fees, charges, or any other amount when due and payable hereunder; or (ii) Borrower shall fail to deliver any Conversion Shares in accordance with the terms hereof; or (iii) Borrower shall default or otherwise materially fail to observe or perform any covenant, obligation, condition or agreement of Borrower contained herein or in any other Settlement Document (as defined in the Exchange Agreement), other than those specifically set forth in the last sentence of Section 2 and this Section 4.1, in any material respect and which has a material adverse effect on Lender; or (iv) any representation, warranty or other statement made or furnished by or on behalf of Borrower to Lender herein or in any Settlement Document shall be false in any material respect when made or furnished, and such false representation or warranty results in a material adverse effect to Lender.

 

4.2. Cure Rights. If an Event of Default occurs that, if not cured, would be a Payment Default, the default may be cured (and no Payment Default will have occurred) if Borrower cures the default within ninety (90) days of the date Lender delivers notice of such default to Borrower (the “Default Notice Date,” and such ninety (90) day period, the “Payment Default Cure Period”); provided that, for the avoidance of doubt, the Late Fees described in Section 9 below shall accrue during the cure period until such payment of the applicable Installment Amount or delivery of the applicable Conversion Shares has been made in full and all such Late Fees that accrue hereunder must be paid in full together with the payment in full of the applicable Installment Amount or delivery of all applicable Conversion Shares in order for such Payment Default to be cured for purposes hereof. Additionally, if an Event of Default occurs that, if not cured, would be an Event of Default pursuant to Sections 4.1(iii) or (iv), and such Event of Default is curable, the default may be cured (and no Event of Default will have occurred) if Borrower, after receiving written notice from Lender demanding cure of such default (which cure must include, for the avoidance of doubt, payment of all Default Interest (as defined below) that accrues following the Default Notice Date), either (i) cures the default within thirty (30) days of the applicable Default Notice Date, or (b) if the cure requires more than thirty (30) days, promptly initiates steps to cure the default and thereafter exercises its best efforts to diligently continue and complete all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practicable; provided that, and for the avoidance of doubt, Default Interest shall begin to accrue on the applicable Default Notice Date and shall continue to accrue until the applicable event is cured, even if it is cured prior to the conclusion of the foregoing thirty (30) day cure period.  Default Interest (as defined below) and Late Fees, including the Late Fees described in Section 9, shall not accrue unless and until after Lender has delivered a written notice of default to Borrower and, Default Interest shall not continue to accrue after the Event of Default has been cured.

 

4.3. Remedies. Upon the occurrence of any Event of Default, Lender shall have the right to deliver written notice thereof via email or reputable overnight courier (with next day delivery specified) (an “Event of Default Notice”) to Borrower. At any time and from time to time after Borrower’s receipt of an Event of Default Notice describing a Payment Default that, for the avoidance of doubt, was not cured within the Payment Default Cure Period, Lender may accelerate this Note by written notice to Borrower, with the Outstanding Balance becoming immediately due and payable in cash at the Mandatory Default Amount (as defined hereafter). For the avoidance of doubt, Lender’s optional acceleration right set forth in the foregoing sentence shall only apply with respect to Payment Defaults that are not cured within the Payment Default Cure Period and not to any other Event of Default hereunder.  The “Mandatory Default Amount” means an amount equal to (i) the Outstanding Balance as of the date of acceleration (which Outstanding Balance, for the avoidance of doubt, will include all Late Fees that accrue until any applicable Payment Default is cured) multiplied by (ii) two hundred fifty percent (250%). At any time following the occurrence of an Event of Default that, if not cured within the timeframe set forth in Section 4.2 above, would constitute an Event of Default other than a Payment

 

  

4

  

 

Default, upon written notice given by Lender to Borrower, interest shall accrue on the Outstanding Balance beginning on the date the applicable event occurred (notwithstanding any cure rights hereunder) and continuing until such event is cured, at an interest rate equal to the lesser of 15% per annum or the maximum rate permitted under applicable law (“Default Interest”). In connection with any acceleration consistent with and under the terms set forth herein and except as otherwise set forth in the Confession of Judgment and/or any of the other Settlement Documents, Lender need not provide, and Borrower hereby waives, any presentment, demand, protest or other notice of any kind, and Lender may immediately enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law.  Default Interest and Late Fees, including the Late Fees described in Section 9, shall not accrue unless and until after Lender has delivered an Event of Default Notice to Borrower and Late Fees and Default Interest shall not continue to accrue after the Event of Default has been cured.  Any acceleration may be rescinded and annulled by Lender at any time prior to payment hereunder and, assuming any Event of Default is not cured, Lender shall have all rights as a holder of the Note until such time, if any, as Lender receives full payment pursuant to this Section 4.3. No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon. Nothing herein shall limit Lender’s right to pursue any other remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to Borrower’s failure to timely deliver Conversion Shares upon Conversion of this Note as required pursuant to the terms hereof.

 

4.4. Judgment by Confession. As set forth in the Exchange Agreement, together with its execution of this Note, Borrower has executed a Consent to Entry of Judgment by Confession (the “Confession”) for the benefit of Lender. As set forth in the Confession, at any time following the occurrence of a Payment Default that, for the avoidance of doubt, is not cured within the Payment Default Cure Period, Lender may file the Confession in its reasonable discretion in the amount of the Mandatory Default Amount. In addition, default interest at an interest rate equal to the lesser of 15% per annum or the maximum rate permitted under applicable law shall accrue on the Outstanding Balance from the date that is five (5) Trading Days after the Confession is filed until the full Outstanding Balance, as increased pursuant to Section 4.3 above (including, without limitation, the increase to the Mandatory Default Amount), is paid.

 

4.5. Relief From Stay. Upon (i)(a) Borrower’s voluntarily filing of a petition for relief under any bankruptcy, insolvency or similar law (domestic or foreign), or (i)(b) an involuntary bankruptcy or insolvency proceeding being commenced or filed against Borrower, and (ii)(a) Borrower failing to make any payment or deliver any Conversion Shares when due hereunder or (ii)(b) an order by the Bankruptcy Court that materially impairs Lender’s security interest in the collateral described in the Security Agreement, Borrower hereby consents to immediate relief from any stay or prohibition on foreclosure, including but not limited to the automatic stay arising under Section 362 of the US Bankruptcy Code (11 U.S.C. 362) or similar provision, and shall not take any action either directly or indirectly to dispute or otherwise contest Lender’s absolute and immediate right to stay relief in any bankruptcy or similar proceeding.  Borrower’s consent to stay relief in this Section 4.5 is a material inducement for Lender under this Note.

 

4.6. Cooperation in Bankruptcy. Borrower and Lender acknowledge that it is their intent that Borrower’s obligations under this Note and the other Settlement Documents and Lender’s rights and remedies under this Note and the other Settlement Documents shall remain in place and be enforceable to the maximum extent permitted by law during any bankruptcy proceedings Borrower may undertake, whether via its voluntary filing of a petition for relief under any bankruptcy, insolvency or similar law or via an involuntary bankruptcy or insolvency proceeding commenced or filed against Borrower (“Bankruptcy Proceedings”). In furtherance thereof, to the fullest extent allowable by law, Borrower covenants and agrees to not use bankruptcy as a mechanism, tool or means to terminate, eliminate, minimize, alter, modify, or circumvent its obligations under this Note or any other Settlement Document or any rights or remedies of Lender hereunder or under any other Settlement Document.  Borrower further agrees to provide its good faith cooperation in assisting and enabling Lender to enforce its rights and remedies under the Settlement Documents during any Bankruptcy Proceedings and will not take a contrary position to the intent of the parties expressed in this Section 4.6.

 

  

5

  

 

5. Unconditional Obligation; No Offset. Borrower acknowledges that this Note is an unconditional, valid, binding and enforceable obligation of Borrower not subject to offset, deduction or counterclaim of any kind. Borrower hereby waives any rights of offset it now has or may have hereafter against Lender, its successors and assigns, and agrees to make the payments or conversions called for herein in accordance with the terms of this Note.

 

6. Waiver. No waiver of any provision of this Note shall be effective unless it is in the form of a writing signed by the party granting the waiver. No waiver of any provision or consent to any prohibited action shall constitute a waiver of any other provision or consent to any other prohibited action, whether or not similar. No waiver or consent shall constitute a continuing waiver or consent or commit a party to provide a waiver or consent in the future except to the extent specifically set forth in writing.

 

7. Borrower Installments.

 

7.1. Installment Payments. Beginning on the date that is four (4) months after the Exchange Date and on the same day of each month thereafter until the Maturity Date, unless paid in full prior to the Maturity Date (each, an “Installment Date”), Borrower shall pay to Lender the applicable Installment Amount, as the same may be reduced pursuant to Section 7.2 below, due on such date. Payments of each Installment Amount must be made in cash, which must be delivered to Lender on or before the applicable Installment Date. Borrower may pay any Installment Amount prior to its being due, without penalty.

 

7.2. Designation of Conversion Eligible Amount. Notwithstanding Borrower’s obligations set forth in Section 7.1 above, for each Installment Date Borrower may elect to designate all or any portion of the Installment Amount then due to be deemed to be a Conversion Eligible Amount by delivering written notice via email or reputable overnight courier (with next day delivery specified) of such election to Lender on or before the applicable Installment Date; provided that the total Conversion Eligible Amount at any given time may not exceed the Conversion Eligible Amount Cap without Lender’s prior written consent and Borrower may not designate any portion of any Installment Amount as a Conversion Eligible Amount during any period where (i) Lender has delivered a Conversion Notice to Borrower and Lender has not yet received the Conversion Shares associated with such Conversion Notice, or (ii) the Conversion Eligible Amount is equal to the Conversion Eligible Amount Cap. In the event Borrower designates any portion of any Installment Amount as a Conversion Eligible Amount, the applicable Installment Amount shall be reduced by an amount equal to the portion thereof designated as a Conversion Eligible Amount. Any portion of any Installment Amount not designated by Borrower as a Conversion Eligible Amount in a writing delivered to Lender on or prior to the applicable Installment Date shall be payable in cash in accordance with Section 7.1 above. For the avoidance of doubt, the Conversion Eligible Amount shall continue to be included in and be deemed to be a part of the Outstanding Balance for all purposes hereunder unless and until such amount is either paid in cash by Borrower or converted into Common Stock by Lender pursuant to Section 3 above. Nothing herein shall prevent Borrower from paying the Conversion Eligible Amount in cash, provided that, for the avoidance of doubt, all prepayments under this Note shall be applied in the manner described in Section 1 above and no prepayments of cash shall reduce the Conversion Eligible Amount until the Outstanding Balance is equal to or less than the Conversion Eligible Amount.  

 

  

6

  

8. Method of Conversion Share Delivery. On or before the close of business on the third (3rd) Trading Day following the date of delivery of a Conversion Notice, together with all legal opinions and/or other documents reasonably required for issuance of Common Stock (the “Delivery Date”), Borrower shall, provided it is DWAC Eligible at such time, deliver or cause its transfer agent to deliver the applicable Conversion Shares electronically via DWAC to the account designated by Lender. Each of Borrower and Lender acknowledge that Borrower is not DWAC Eligible as of the Effective Date. If Borrower continues to not be DWAC Eligible, it shall deliver to Lender or its broker (as designated in the Conversion Notice), via reputable overnight courier, a certificate representing the number of shares of Common Stock equal to the number of Conversion Shares to which Lender shall be entitled, registered in the name of Lender or its designee. For the avoidance of doubt, Borrower shall have met its obligation to deliver Conversion Shares by the Delivery Date (i) if Borrower is DWAC Eligible, Lender or its broker, as applicable, has actually received the applicable Conversion Shares no later than close of business on or before the applicable Delivery Date, or (ii) if Borrower is not then DWAC Eligible, Borrower sends the Conversion Shares to Lender or its broker, as applicable, via a reputable overnight carrier (and provides a tracking number to Lender with respect to such mailing) on or before the second (2nd) Trading Day following the date of delivery of the applicable Conversion Notice. If Lender or its broker has not received any applicable certificate on or before the fourth (4th) Trading Day following the date of delivery of the applicable Conversion Notice, Lender shall have the right to require Borrower to cancel the certificate that was previously mailed and to deliver a new certificate for the applicable Conversion Shares, which new certificate must be delivered via a reputable overnight carrier (with the tracking number provided to Lender) within two (2) Trading Days of Lender’s request, that is delivered in accordance with Section 20 below, for cancellation. All Conversion Shares delivered hereunder must be Free Trading upon delivery thereof to Lender and any such shares that are not Free Trading shall not be deemed to have been delivered to Lender until such shares become Free Trading, unless such shares are not Free Trading due to actions by Lender or through no fault of Borrower.

 

9. Conversion and Payment Delays. Notwithstanding Borrower’s cure rights with respect to Payment Defaults set forth in Section 4.2 above, for each failure to deliver Conversion Shares when due or for any failure to pay any Installment Amount when due, late fees equal to the following amounts shall be assessed and automatically added to the Outstanding Balance for each day beginning on the day following the applicable Default Notice Date and ending on the date the applicable Installment Amount is paid in full or the applicable Conversion Shares are delivered in full (inclusive of such date): (a) $500 per day will be assessed for each of the first ten (10) days after the applicable Default Notice Date, provided the late fees applicable pursuant to this subsection (a) will not be charged for the first two (2) defaults that would otherwise cause such late fees to apply, (b) $1,000 per day will be assessed for each day beginning with the eleventh (11th) day following the applicable Default Notice Date and ending on the twentieth (20th) day after the Default Notice Date (inclusive of such day), and (c) $2,000.00 per day for each day beginning on the twenty-first (21st) day after the Default Notice Date and continuing until the date (inclusive of such date) the applicable Installment Amount is paid in full or the applicable Conversion Shares are delivered in full, but in any event such late fees shall stop accruing after the ninetieth (90th) day following the applicable Default Notice Date (such fees, the “Late Fees”). For the avoidance of doubt, the Late Fees set forth in clauses (b) and (c) of the foregoing sentence will be charged for all defaults that cause Late Fees to accrue, including without limitation the first two (2) such events for which the Late Fees set forth in clause (a) of the foregoing sentence do not accrue. Moreover, Borrower acknowledges that the Late Fees will be charged in full (with no reductions for partial payments or cures) until the applicable Installment Amount is paid in full or the applicable Conversion Shares are delivered in full, even if Borrower makes a partial payment of such amount or a partial delivery of such shares.

 

  

7

  

 

10. Ownership Limitation. Notwithstanding anything to the contrary contained in this Note or the other Settlement Documents, if at any time Lender shall or would be issued shares of Common Stock under any of the Settlement Documents, but such issuance would cause Lender (together with its affiliates) to beneficially own a number of shares exceeding 9.99% of the number of shares of Common Stock outstanding on such date (including for such purpose the shares of Common Stock issuable upon such issuance) (the “Maximum Percentage”), then Borrower must not issue to Lender shares of the Common Stock which would exceed the Maximum Percentage. In order to assist Borrower with its compliance with the foregoing covenant, Lender shall clearly indicate on any Conversion Notice or other request for shares delivered to Borrower the number of shares of Common Stock it beneficially owns as of the date of such request and Lender agrees that Borrower shall be entitled to rely on the number of shares of Common Stock Lender indicates it owns as of the date of such Conversion Notice or request. For purposes of this section, beneficial ownership of Common Stock will be determined pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended. The shares of Common Stock that Borrower would have issued to Lender but for the obligation not to exceed the Maximum Percentage are referred to herein as the “Ownership Limitation Shares”. Borrower will reserve the Ownership Limitation Shares, if any, for the exclusive benefit of Lender. From time to time, Lender may notify Borrower in writing of the number of the Ownership Limitation Shares that may be issued to Lender without causing Lender to exceed the Maximum Percentage. Upon receipt of such notice, Borrower shall promptly issue such designated shares to Lender, with a corresponding reduction in the number of the Ownership Limitation Shares. By written notice to Borrower, Lender may increase or waive the Maximum Percentage as to itself but any such waiver will not be effective until the 61st day after delivery thereof. The foregoing 61-day notice requirement is enforceable, unconditional and non-waivable and shall apply to all affiliates and assigns of Lender.  For the avoidance of doubt, the “Ownership Limitation Shares” only include common stock shares equal to the Conversion Eligible Amount as designated by Borrower that would have exceeded the Maximum Percentage.

 

11. Attorneys’ Fees. In the event of any dispute relating to this Note or to the subject matter hereof, the prevailing party shall be entitled to collect from the other party any and all reasonable costs (including attorneys’ fees) incurred by the prevailing party in connection with such dispute.  Such relief shall be in addition to any other relief to which the prevailing party is entitled.

 

12. Opinion of Counsel. In the reasonable discretion of Borrower, Borrower may require Lender to provide an opinion of counsel relating to, among other things, a Conversion or the issuance of Conversion Shares.  In the event that an opinion of counsel is required of Lender or otherwise, Lender has the right to have any such opinion provided by its counsel.

 

13. Governing Law. This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Note shall be governed by, the internal laws of the State of Utah, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Utah or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Utah. The provisions set forth in the Exchange Agreement to determine the proper venue for any disputes are incorporated herein by this reference.

 

14. Calculation Disputes. In the case of a dispute as to any arithmetic calculation hereunder (collectively, “Calculations”), Borrower or Lender (as the case may be) shall submit the disputed determinations or arithmetic calculations (as the case may be) via email with confirmation of receipt (a) within two (2) Trading Days after receipt of the applicable notice giving rise to such dispute to Borrower or Lender (as the case may be) or (b) if no notice gave rise to such dispute, at any time after Lender or Borrower learned of the circumstances giving rise to such dispute. If Lender and Borrower are unable to agree upon such determination or calculation within two (2) Trading Days of such disputed determination or arithmetic calculation (as the case may be) being submitted to Borrower or Lender (as the case may be), then Borrower shall, within two (2) Trading Days, submit via email the disputed Calculation to Patrick Kilbourne, or if Mr. Kilbourne is unable or unwilling to serve as an expert in such dispute, 

 

  

8

  

 

Borrower shall, within two (2) Trading Days of Borrower and Lender learning that Mr. Kilbourne is unable or unwilling to serve as an expert in such dispute, deliver the names of three (3) experts to Lender that it proposes to use to resolve such dispute and Lender shall, within two (2) Trading Days of its receipt of such names, select one (1) expert from such list to resolve the dispute, and if that expert is unable or unwilling to resolve the applicable dispute, Borrower and Lender shall continue to follow such process until an expert is retained (the “Third Party Expert”), and, to the extent the disputed Calculation relates to the number of Conversion Shares deliverable to Lender, Borrower shall also deliver to Lender (in the manner described in Section 8 above) the number of Conversion Shares deliverable to Lender using Borrower’s Calculation (for the avoidance of doubt, Borrower’s failure to deliver Conversion Shares to Lender in accordance with this clause shall be an Event of Default pursuant to Section 4.1(ii), subject to the cure rights for such an Event of Default set forth in Section 4.2 as well as payment of Late Fees set forth in Section 9). Borrower shall cause the Third Party Expert to perform the determinations or calculations (as the case may be) and notify Borrower and Lender of the results no later than ten (10) Trading Days from the time it receives such disputed determinations or calculations (as the case may be). The Third Party Expert’s determination of the disputed Calculation shall be binding upon all parties absent demonstrable error. The Third Party Expert’s fee for performing such Calculation shall be paid by the incorrect party, or if both parties are incorrect, by the party whose Calculation is furthest from the correct Calculation as determined by the Third Party Expert. In addition, if the dispute relates to the number of Conversion Shares deliverable to Lender and Borrower’s Calculation is incorrect (or, if both parties are incorrect, Borrower’s Calculation is the furthest from the correct Calculation), Borrower shall within two (2) Trading Days of the Third Party Expert’s determination of the Calculation deliver to Lender (in the manner described in Section 8 above) a number of Conversion Shares equal to two (2) times the difference between the number of Conversion Shares Borrower previously delivered to Lender with respect to the disputed Calculation and the number of Conversion Shares Borrower is required to deliver to Lender based on the Third Party Expert’s final determination of the applicable Calculation.

 

15. Cancellation. After repayment or conversion of the entire Outstanding Balance, this Note shall be deemed paid in full, shall automatically be deemed canceled, and shall not be reissued.  Within ten (10) days after repayment or conversion of the entire Outstanding Balance, Lender will provide written notice that this Note has been canceled and repaid in full.  At that same time, Lender will give notice and file a withdrawal of its UCC-1 Filing and security interest as set forth in the Security Agreement.

 

16. Amendments. The prior written consent of both parties hereto shall be required for any change or amendment to this Note.

 

17. Assignments. Borrower may not assign this Note without the prior written consent of Lender. This Note, any shares of Common Stock issued upon conversion of this Note, and all rights under the Exchange Agreement or any other Settlement Document, as the same may be amended from time to time hereafter, may be offered, sold, assigned or transferred by Lender without the consent of Borrower.  Lender shall give notice of any such assignment or transfer within five (5) Trading Days.

 

18. Time of the Essence. Time is expressly made of the essence with respect to each and every provision of this Note and the documents and instruments entered into in connection herewith.

 

19. Force Majeure.  No party shall be liable or responsible to the other party, nor be deemed to have defaulted under or breached this Note, for any failure or delay in fulfilling or performing any term of this Note, when and to the extent such failure or delay is caused by or results from acts beyond the impacted party’s (“Impacted Party”) control, including, without limitation, the following force majeure events (“Force Majeure Events”): (a) acts of God; (b) flood, fire, earthquake or explosion; (c) war, invasion, hostilities (whether war is declared or not), terrorist threats or acts, riot or other civil unrest; 

 

  

9

  

 

(d) government order or law; (e) actions, embargoes or blockades in effect on or after the Exchange Date; (f) action by any governmental authority; (g) national or regional emergency; (h) strikes, labor stoppages or slowdowns or other industrial disturbances; and (i) shortage of adequate power or transportation facilities. The Impacted Party shall give notice within five (5) Trading Days of the Force Majeure Event to the other party, stating the period of time the occurrence is expected to continue. The Impacted Party shall use diligent efforts to end the failure or delay and ensure the effects of such Force Majeure Event are minimized. The Impacted Party shall resume the performance of its obligations as soon as reasonably practicable after the removal of the cause. Notwithstanding the foregoing, the provisions of this Section 19 shall only apply to Borrower’s obligations to pay Installment Amounts to Lender hereunder to the extent any applicable Force Majeure Event prevents Borrower from being able to pay any applicable Installment Amount to Lender.

 

20. Notices. Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be given in accordance with the subsection of the Exchange Agreement titled “Notices.”

 

21. Waiver of Jury Trial. EACH PARTY TO THIS NOTE IRREVOCABLY WAIVES ANY AND ALL RIGHTS SUCH PARTY MAY HAVE TO DEMAND THAT ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS NOTE OR THE OTHER SETTLEMENT DOCUMENTS BE TRIED BY JURY. THIS WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND A TRIAL BY JURY ARISING UNDER COMMON LAW OR ANY APPLICABLE STATUTE, LAW, RULE OR REGULATION. FURTHER, EACH PARTY HERETO ACKNOWLEDGES THAT SUCH PARTY IS KNOWINGLY AND VOLUNTARILY WAIVING SUCH PARTY’S RIGHT TO DEMAND TRIAL BY JURY.

 

22. Liquidated Damages. Lender and Borrower agree that in the event Borrower fails to comply with any of the terms or provisions of this Note, Lender’s damages would be uncertain and difficult (if not impossible) to accurately estimate because of the parties’ inability to predict future interest rates, future share prices, future trading volumes and other relevant factors. Accordingly, Lender and Borrower agree that any fees, balance adjustments, default interest or other charges assessed under this Note are not penalties but instead are intended by the parties to be, and shall be deemed, liquidated damages (under Lender’s and Borrower’s expectations that any such liquidated damages will tack back to the Closing Date for purposes of determining the holding period under Rule 144).

 

[Remainder of page intentionally left blank; signature page follows]

 

  

10

  

 

IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed as of the Exchange Date.

 

	 	
BORROWER:

	 
	 	 	 
	 	
Cord Blood America, Inc.

	 
	 	 	 	 
	 	By: 	/s/ Joseph R. Vicente	 
	 	Name:	Joseph R. Vicente	 
	 	Title:	President	 
	 	 	 	 

                                                   

ACKNOWLEDGED, ACCEPTED AND AGREED:

 

LENDER:

 

Tonaquint, Inc.

 

	By:	/s/ John M. Fife	 
	 	John M. Fife, President

 

  

[Signature Page to Secured Convertible Promissory Note]

  

 

ATTACHMENT 1

DEFINITIONS

For purposes of this Note, the following terms shall have the following meanings:

 

A1. “Closing Bid Price” and “Closing Sale Price” means, for any security as of any date, the last closing bid price and last closing trade price, respectively, for such security on its principal market, as reported by Bloomberg, or, if its principal market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price (as the case may be) then the last bid price or last trade price, respectively, of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if its principal market is not the principal securities exchange or trading market for such security, the last closing bid price or last trade price, respectively, of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg. If the Closing Bid Price or the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price or the Closing Sale Price (as the case may be) of such security on such date shall be the fair market value as mutually determined by Lender and Borrower. If Lender and Borrower are unable to agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in Section 14. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during such period.

 

A2. “Conversion Eligible Amount” means the aggregate of any portion of the Outstanding Balance designated by Borrower as a Conversion Eligible Amount pursuant to Section 7.2 above, less the aggregate of such amounts that Lender actually converts pursuant to Section 3 above.

 

A3. “Conversion Eligible Amount Cap” means that the Conversion Eligible Amount shall not exceed $100,000.00 at any given time.

 

A4. “DTC” means the Depository Trust Company.

 

A5. “DTC Eligible” means, with respect to the Common Stock, that such Common Stock is eligible to be deposited in certificate form at the DTC, cleared and converted into electronic shares by the DTC and held in the name of the clearing firm servicing Lender’s brokerage firm for the benefit of Lender.

 

A6. “DTC/FAST Program” means the DTC’s Fast Automated Securities Transfer Program.

 

A7. “DWAC” means Deposit Withdrawal at Custodian as defined by the DTC.

 

A8. “DWAC Eligible” means that (i) Borrower’s Common Stock is eligible at DTC for full services pursuant to DTC’s operational arrangements, including without limitation transfer through DTC’s DWAC system, (ii) Borrower has been approved (without revocation) by the DTC’s underwriting department, (iii) Borrower’s transfer agent is approved as an agent in the DTC/FAST Program, (iv) the Conversion Shares are otherwise eligible for delivery via DWAC; (v) Borrower has previously delivered all Conversion Shares to Lender via DWAC; and (vi) Borrower’s transfer agent does not have a policy prohibiting or limiting delivery of the Conversion Shares via DWAC.

 

A9. “Free Trading” means that (a) the shares or certificate(s) representing the applicable shares of Common Stock are available for resale pursuant to the applicable federal and state securities laws.

 

A10. “Installment Amount” means $100,000.00; provided, however, that, if the remaining amount owing under this Note as of the applicable Installment Date is less than $100,000.00, then the Installment Amount for such Installment Date (and only such Installment Amount) shall be reduced (and only reduced) by the amount necessary to cause such Installment Amount to equal such outstanding amount.

 

A11. “Outstanding Balance” means, as of any date of determination, the original principal balance of this Note, plus any accrued but unpaid interest, Late Fees, collection and enforcements costs (including attorneys’ fees) incurred by Lender, transfer, stamp, issuance and similar taxes and fees related to Conversions, and any other fees or charges (including without limitation late charges) incurred under this Note minus any and all payments made by Borrower under this Note whether in cash or through the delivery of Conversion Shares.

 

  

Attachment 1 to Secured Convertible Promissory Note, Page 1

  

 

A12. “Payment Default” means any Event of Default under Section 4.1(i) or Section 4.1(ii) hereof, which is not cured within the Payment Default Cure Period.

 

A13. “Trading Day” shall mean any day on which the Common Stock is traded or tradable for any period on the Common Stock’s principal market, or on the principal securities exchange or other securities market on which the Common Stock is then being traded.

 

  

Attachment 1 to Secured Convertible Prmissory Note, Page 2

  

 

EXHIBIT A

 

Tonaquint, Inc.

303 East Wacker Drive, Suite 1200

Chicago, Illinois 60601

 

	Cord Blood America, Inc.	Date:	 
	Attn: Joseph A. Vicente	 	 
	1857 Helm Drive	 	 
	Las Vegas, Nevada 89119	 	 

 

CONVERSION NOTICE

The above-captioned Lender hereby gives notice to Cord Blood America, Inc., a Florida corporation (the “Borrower”), pursuant to that certain Secured Convertible Promissory Note made by Borrower in favor of Lender on December 17, 2014 (the “Note”), that Lender elects to convert the portion of the Note balance set forth below into fully paid and non-assessable shares of Common Stock of Borrower as of the date of conversion specified below. Said conversion shall be based on the Conversion Price set forth below. In the event of a conflict between this Conversion Notice and the Note, the Note shall govern, or, in the alternative, at the election of Lender in its sole discretion, Lender may provide a new form of Conversion Notice to conform to the Note. Capitalized terms used in this notice without definition shall have the meanings given to them in the Note.

 

	
  

	
A.

	
Date of Conversion:

	
____________

	
  

	
B.

	
Conversion #:

	
____________

	
  

	
C.

	
Conversion Eligible Amount:

	
____________

	
  

	
D.

	
Shares of Common Stock Beneficially Owned by Lender:

	
____________

	
  

	
E.

	
Conversion Amount:

	
____________

	
  

	
F.

	
Conversion Price:  _______________

	
  

	
G.

	
Conversion Shares:  _______________ (E divided by F)

	
  

	
H.

	
Remaining Outstanding Balance of Note:  ____________*

	
  

	
I.

	
Remaining Conversion Eligible Amount:  ____________

 

* Subject to adjustments for corrections, defaults, interest and other adjustments permitted by the Settlement Documents (as defined in the Exchange Agreement), the terms of which shall control in the event of any dispute between the terms of this Conversion Notice and such Settlement Documents.

 

Additionally, $_________________ of the Conversion Amount converted hereunder shall be deducted from the Installment Amount(s) relating to the following Installment Date(s): __________________________________________.

Please transfer the Conversion Shares electronically (via DWAC) to the following account:

Broker:________________________                                                Address:________________

DTC# :________________________                                                      

Account #:_____________________  

Account Name:__________________                                                    

  

Exhibit A to Secured Convertible Promissory Note, Page 1

  

 

To the extent the Conversion Shares are not able to be delivered to Lender electronically via the DWAC system, deliver all such certificated shares to Lender via reputable overnight courier after receipt of this Conversion Notice (by facsimile transmission or otherwise) to:

_____________________________________

_____________________________________

_____________________________________

Sincerely,

Lender:

Tonaquint, Inc.

By:_____________________________________           

John M. Fife, President

 

Exhibit A to Secured Convertible Promissory Note, Page 2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00238-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00238-of-00352.parquet"}]]