FORM OF NOTE
Exhibit 4(iv)
FORM OF NOTE
$[_____________] | Date:[________], 20[__] |
FOR VALUE RECEIVED, [_____________] (“Borrower”) promises to pay to the order of Cord Blood America, Inc. (“Lender”), at [________], or at such other place as Lender may from time to time designate in writing, the principal sum of $[________], with interest, as follows:
1.
Interest. The principal balance outstanding, from time to time, shall bear interest from and after the date hereof at the rate of 2.0% per year. Interest shall be calculated on a simple interest basis and the number of days elapsed during the period for which interest is being calculated. Interest not paid when due shall be added to the principal.
2.
Payments. If not sooner paid, the entire unpaid principal balance, interest thereon and any other charges due and payable under this Note shall be due and payable on the fourth anniversary of the date of this Note (“Maturity Date”); provided, however, that in no event shall this Note be due or payable in cash at any time that there is a default, defined as follows: (i) Lender is in default of any loan agreement, equity investment agreement or instrument, or other material agreement, (ii) there are any shares of preferred stock of Lender issued or outstanding, or (iii) there currently exists the occurrence of any of the events listed in Section 3.1 (a), (c), (d), (e), (g) or (h) of the Preferred Stock Purchase Agreement dated July 2, 2009, by and among the Company and the investors referred to therein, which is uncured. However, at anytime, including even in the case of an outstanding default, the Company shall continue to have the right, in its sole discretion, to offset a portion of, or all of the sum remaining payable under this Note, at any time or from time to time, against the sums the Company is otherwise obligated to pay the holder(s) of the Company’s then outstanding Series A Preferred Stock, in connection with a redemption of all or any part of said Series A Preferred Stock from such holder(s). In this regard, the Company has the continuing right of offset, whereby it may offset sums payable to the Company under this note, whether it is in default or not, against sums otherwise payable by the Company in connection with the Company’s redemption of such Series A Preferred Shares. Borrower shall have the right to prepay all or any part of the principal balance of this Note at any time without penalty or premium. All payments shall be first be applied to interest, then to reduce the outstanding principal.
3.
Full Recourse Note. THIS IS A FULL RECOURSE PROMISSORY NOTE. Accordingly, notwithstanding that Xxxxxxxx’s obligations under this Note are secured by the Collateral, in the event of a material default hereunder, Xxxxxx shall have full recourse to all the other assets of Borrower. Moreover, Lender shall not be required to proceed against or exhaust any Collateral, or to pursue any Collateral in any particular order, before Xxxxxx pursues any other remedies against Borrower or against any of Borrower’s assets.
4.
a.
Pledge. As security for the due and prompt payment and performance of all payment obligations under this Note and any modifications, replacements and extensions hereof (collectively, “Secured Obligations”), Borrower hereby pledges and grants a security
2
interest to Xxxxxx in all of Xxxxxxxx’s right, title, and interest in and to all of the following, now owned or hereafter acquired or arising (together the “Collateral”):
i.
Publicly traded shares of common stock, preferred stock, bonds, notes and/or debentures (collectively, “Pledged Securities”) with a fair market value on the date hereof at least equal to the principal amount of this Note, based upon the trading price of such securities on the Pink Sheets, OTC Bulletin Board, NASDAQ Capital Market, NASDAQ Global Market, NYSE Amex, or New York Stock Exchange;
ii.
all rights of Borrower with respect to or arising out of the Pledged Securities, including voting rights, and all equity and debt securities and other property distributed or distributable with respect thereto as a result of merger, consolidation, dissolution, reorganization, recapitalization, stock split, stock dividend, reclassification, exchange, redemption, or other change in capital structure; and
iii.
all proceeds, replacements, substitutions, accessions, and increases of any of the Collateral.
b.
Replacement Securities. In the event that Borrower voluntarily or involuntarily sells or disposes of any Pledged Securities during any period in which any principal balance of this Note remains outstanding, Borrower shall promptly provide replacement securities of equal or greater value, which shall be deemed to constitute additional Pledged Securities hereunder..
c.
Rights With Respect to Distributions. So long as no default shall have occurred and be continuing under this Note, Borrower shall be entitled to receive any and all dividends and distributions made with respect to the Pledged Securities and any other Collateral. However, upon the occurrence and during the continuance of any default, Lender shall have the sole right (unless otherwise agreed by Lender) to receive and retain dividends and distributions and apply them to the outstanding balance of this Note or hold them as Collateral, at Lender’s election.
d.
Voting Rights. So long as no default shall have occurred and be continuing under this Note, Borrower shall be entitled to exercise all voting rights pertaining to the Pledged Securities and any other Collateral. However, upon the occurrence and during the continuance of any default, all rights of Borrower to exercise the voting rights that Borrower would otherwise be entitled to exercise with respect to the Collateral shall cease and (unless otherwise agreed by Lender) all such rights shall thereupon become vested in Lender, which shall thereupon have the sole right to exercise such rights.
e.
Financing Statement; Further Assurances. Xxxxxxxx agrees, concurrently with executing this Note, that Lender may file a UCC-1 financing statement relating to the Collateral in favor of Lender, and any similar financing statements in any jurisdiction in which Lender reasonably determines such filing to be necessary. Xxxxxxxx further agrees that at any time and from time to time Borrower shall promptly execute and deliver all further instruments and documents that Xxxxxx may request in order to perfect and protect the security interest granted hereby, or to enable Lender to exercise and enforce its rights and remedies with respect to any Collateral following an event of default.
3
x.
Xxxxxx of Lender. Borrower hereby appoints Lender as Borrower’s true and lawful attorney-in-fact to perform any and all of the following acts, which power is coupled with an interest, is irrevocable until the Secured Obligations are paid and performed in full, and may be exercised from time to time by Lender in its discretion: To take any action and to execute any instrument which Lender may deem reasonably necessary or desirable to accomplish the purposes of this Section 3f and, more broadly, this Note including, without limitation: (i) to exercise voting and consent rights with respect to Collateral in accordance with this Note, (ii) to receive, endorse and collect all instruments made payable to Borrower representing any dividend, interest payment or other distribution in respect of the Collateral or any part thereof and to give full discharge for the same, when and to the extent permitted by this Note, (iii) to perform or cause the performance of any obligation of Borrower hereunder in Borrower’s name or otherwise, (iv) during the continuance of any default hereunder, to liquidate any Collateral pledged to Lender hereunder and to apply proceeds thereof to the payment of the Secured Obligations or to place such proceeds into a cash collateral account, all at Lender’s sole discretion, (v) to enter into any extension, reorganization or other agreement relating to or affecting the Collateral, and, in connection therewith, to deposit or surrender control of the Collateral, (vi) to accept other property in exchange for the Collateral, (vii) to make any compromise or settlement Lender deems desirable or proper, and (viii) to execute on Xxxxxxxx’s behalf and in Xxxxxxxx’s name any documents required in order to give Lender a continuing first lien upon the Collateral or any part thereof.
5.
Additional Terms
a.
No Waiver. The acceptance by Lender of payment of a portion of any installment when due or an entire installment but after it is due shall neither cure nor excuse the default caused by the failure of Borrower timely to pay the whole of such installment and shall not constitute a waiver of Lender’s right to require full payment when due of any future or succeeding installments.
b.
Default. Any one or more of the following shall constitute a “default” under this Note: (i) a default in the payment when due of any amount hereunder, (ii) Borrower’s refusal to perform any material term, provision or covenant under this Note, (iii) the commencement of any liquidation, receivership, bankruptcy, assignment for the benefit of creditors or other debtor-relief proceeding by or against Borrower, or, subject to Section 4b, the Collateral, and (iv) the levying of any attachment, execution or other process against Borrower, or, subject to Section 4b, the Collateral or any material portion thereof.
c.
i.
Upon the occurrence of any payment default Lender may, at its election, declare the entire balance of principal and interest under this Note immediately due and payable. A delay by Xxxxxx in exercising any right of acceleration after a default shall not constitute a waiver of the default or the right of acceleration or any other right or remedy for such default. The failure by Lender to exercise any right of acceleration as a result of a default shall not constitute a waiver of the right of acceleration or any other right or remedy with respect to any other default, whenever occurring.
4
ii.
Further, upon the occurrence of any material default, following 30 days notice specifying the default and demanded manner of cure for any non-monetary default, Lender shall thereupon and thereafter have any and all of the rights and remedies to which a secured party is entitled after a default under the applicable Uniform Commercial Code, as then in effect. In addition to its other rights and remedies, Xxxxxxxx agrees that, upon the occurrence of default, Lender may in its sole discretion do or cause to be done any one or more of the following:
(a)
Proceed to realize upon the Collateral or any portion thereof as provided by law, and without liability for any diminution in price which may have occurred, sell the Collateral or any part thereof, in such manner, whether at any public or private sale, and whether in one lot as an entirety, or in separate portions, and for such price and other terms and conditions as is commercially reasonable given the nature of the Collateral.
(b)
If notice to Borrower is required, give written notice to Borrower at least ten days before the date of sale of the Collateral or any portion thereof.
(c)
Transfer all or any part of the Collateral into Lender's name or in the name of its nominee or nominees.
(d)
Vote all or any part of the Collateral (whether or not transferred into the name of Lender ) and give all consents, waivers and ratifications in respect of the Collateral and otherwise act with respect thereto, as though Xxxxxx were the outright owner thereof.
iii.
Borrower acknowledges that all or part of foreclosure of the Collateral may be restricted by state or federal securities laws, Lender may be unable to effect a public sale of all or part of the Collateral, that a public sale is or may be impractical and inappropriate and that, in the event of such restrictions, Lender thus may be compelled to resort to one or more private sales to a restricted group of purchasers who will be obliged to agree, among other things, to acquire the Collateral for their own account, for investment and not with a view to its distribution or resale. Xxxxxxxx agrees that if reasonably necessary Lender may resort to one or more sales to a single purchaser or a restricted or limited group of purchasers. Lender shall not be obligated to make any sale or other disposition, unless the terms thereof shall be satisfactory to it.
iv.
If, in the opinion of Lender based upon written advice of counsel, any consent, approval or authorization of any federal, state or other governmental agency or authority should be necessary to effectuate any sale or other disposition of any Collateral, Borrower shall execute all such applications and other instruments as may reasonably be required in connection with securing any such consent, approval or authorization, and will otherwise use its commercially reasonable best efforts to secure the same.
v.
The rights, privileges, powers and remedies of Lender shall be cumulative, and no single or partial exercise of any of them shall preclude the further or other exercise of any of them. Any waiver, permit, consent or approval of any kind by Lender of any default hereunder, or any such waiver of any provisions or conditions hereof, must be in writing and shall be effective only to the extent set forth in writing. Any proceeds of any disposition of
5
the Collateral, or any part thereof, may be applied by Lender to the payment of expenses incurred by Lender in connection with the foregoing, and the balance of such proceeds shall be applied by Lender toward the payment of the Secured Obligations.
d.
No Oral Waivers or Modifications. No provision of this Note may be waived or modified orally, but only in a writing signed by Xxxxxx and Xxxxxxxx.
e.
Attorney Fees. The prevailing party in any action by Xxxxxx to collect any amounts due under this Note shall be entitled to recover its reasonable attorneys fees and costs.
f.
Governing Law. This Note has been executed and delivered in, and is to be construed, enforced, and governed according to the internal laws of, the State of New York without regard to its principles of conflict of laws.
g.
Severability. Whenever possible, each provision of this Note shall be interpreted in such manner as to be effective and valid under applicable law. However, if any provision of this Note shall be held to be prohibited by or invalid under applicable law, it shall be ineffective only to the extent of such prohibition or invalidity without invalidating the remainder of that provision or the other provisions of this Note.
h.
Entire Agreement. This Note contain the entire understanding of the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral or written, with respect to such matters.
|
|
|
|
|
|
By: |
|
|
Name: |
|
|
Title: |
|
|
6
