UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
 
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): December 17, 2014
 
CORD BLOOD AMERICA, INC.
 (Exact name of registrant as specified in its charter)
 
Florida
  
000-50746
  
90-0613888
(State or Other Jurisdiction
  
(Commission
  
(I.R.S. Employer
of Incorporation)
  
File Number)
  
Identification No.)

1857 Helm Drive, Las Vegas, NV 89119
 (Address of Principal Executive Office) (Zip Code)

(702) 914-7250
 (Registrant’s telephone number, including area code)
_______________________________
 
Copies to:
Joseph R. Vicente
1857 Helm Drive, Las Vegas, NV 89119
Phone: (702) 914-7250
Fax: (702) 914-7251
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
 
 
 
 
ITEM 1.01
Entry Into a Material Definitive Agreement.

In a transaction that closed on December 17, 2014 and in settlement of the previously disclosed litigation matter between Cord Blood America, Inc., a Florida corporation (the "Company"), on the one hand, and St. George Investments LLC, an Illinois limited liability company (“St. George”) and Tonaquint, Inc., a Utah corporation (“Tonaquint”), on the other, Case Number 2:13-CV-00806-PMW filed in the United States District Court for the District of Utah, Center Division, the Company, St. George and Tonaquint entered into a Settlement and Exchange Agreement (the "Settlement Agreement"). Pursuant to the Settlement Agreement, the Secured Convertible Promissory Note and the Warrant to Purchase Shares of Common Stock issued by the Company to St. George on or around March 10, 2011, as well as the Note and Warrant Purchase Agreement pursuant to which the St. George Note and St. George Warrant were issued, and all other documents that made up the March 2011 transaction between the Company and St. George, all of which have been set forth in detail in prior filings by the Company, were terminated, cancelled or otherwise extinguished.  Further pursuant to the Settlement Agreement, the Secured Convertible Promissory Note issued by the Company to Tonaquint on or around June 27, 2012 was exchanged for a Secured Convertible Promissory Note of the Company in the principal amount of $2,500,000.00 (the "Company Note"), and certain of the other documents that were part of the June 27, 2012 transaction between the Company and Tonaquint (the “June 2012 Tonaquint Transaction”) were terminated, cancelled or otherwise extinguished, and certain of them were amended, as set forth below.  The June 2012 Tonaquint Transaction is described in prior filings by the Company.

Under the Company Note, the Company shall make monthly payments to Tonaquint, with the first payment due on or before April 17, 2015, and with payments continuing thereafter until the Company's Note is paid in full, with a maturity date that is 33 calendar months after April 17, 2015. The amount of the monthly payments is $100,000.00 (the “Installment Amount”); provided, however, that if the remaining amount owing under the Company Note as of the applicable Installment Date (defined in the Company Note) is less than $100,000.00, then the Installment Amount for such Installment Date shall be equal to the outstanding amount. The Company may prepay any or all of the outstanding amount of the Company Note at any time, without penalty. In the event the Company prepays an amount that is less than the outstanding amount, then the prepayment amount shall be applied to the next Installment Amount(s) due under the Company Note.

For each monthly payment, the Company may elect to designate all or any portion of the Installment Amount then due as a conversion eligible amount (hereafter “Conversion Eligible Amount”); provided that the total outstanding Conversion Eligible Amount that has not been converted by Tonaquint, as set forth below, at any given time may not exceed one hundred thousand dollars ($100,000) without Tonaquint’s prior written consent and subject to additional restrictions set forth in the Company Note. In the event the Company designates any portion of any monthly payment amount as a Conversion Eligible Amount, the applicable monthly payment shall be reduced by an amount equal to the portion thereof designated as a Conversion Eligible Amount. The Conversion Eligible Amount shall continue to be included in and be deemed to be a part of the Outstanding Balance (defined in the Company Note) of the Company Note unless and until such amount is either paid in cash by the Company or converted into Common Stock by Tonaquint. The Company may pay the Conversion Eligible Amount in cash, provided that no prepayments of cash shall reduce the Conversion Eligible Amount until the Outstanding Balance is equal to or less than the Conversion Eligible Amount.

Once the Company has designated amounts as Conversion Eligible Amount, Tonaquint may convert all or any portion of that amount into shares of the Company's Common Stock. In the event of a conversion by Tonaquint of a Conversion Eligible Amount, the number of Common Stock shares delivered to Tonaquint upon conversion will be calculated by dividing the amount of the Company Note that is being converted by 70% of the average of the three (3) lowest Closing Bid Prices of the Common Stock (as defined in the Company Note) in the twenty (20) Trading Days immediately preceding the applicable Conversion.

The Company Note has an interest rate of 7.5%, which would increase to a rate of 15.0% on the happening of certain Events of Default (defined in the Company Note) that are not considered a Payment Default (defined in the Company Note), provided that the Company may cure the default in accordance with and subject to the terms set forth in the Company Note. Where a Payment Default occurs, including where (i) Borrower shall fail to pay any principal, interest, fees, charges, or any other amount when due and payable under that Company Note; or (ii) Borrower shall fail to deliver any Conversion Shares in accordance with the terms of the Company Note, late fees shall accrue as set forth in the Company Note, and in addition, the Company shall have ninety (90) days from delivery of notice of default from Tonaquint to cure the default, as set forth in more detail in the Company Note. If the Company fails to cure the Payment Default, Tonaquint may accelerate the Company Note by written notice to the Company, with the Outstanding Balance becoming immediately due and payable in cash at the Mandatory Default Amount (defined in the Company Note) 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%), along with other remedies, as set forth in the Company Note.  

 
 
 
 
The Company Note, as well as a First Amendment to Security Agreement, which amended the Security Agreement entered as part of the June 2012 Tonaquint Transaction and Consent to Entry of Judgment by Confession, along with a First Amendment to Guaranty executed by all wholly owned subsidiaries of the Company, which amended the Amendment to Guaranty that was entered as part of June 2012 Tonaquint Transaction were each delivered along with the Settlement Agreement (collectively the "Transaction Documents"). The Transaction Documents contain representations and warranties of the Company and Tonaquint that are customary for transactions of this kind.

The foregoing is only a summary of the terms of the transaction between the Company and St. George and Tonaquint. You are urged to read each of the Transaction Documents, which are attached as Exhibits to this Current Report and incorporated by reference herein.
 
ITEM 5.02                    Compensatory Arrangements of Certain Officers.

On December 18, 2014, the Company entered into an Executive Employment Agreement with Joseph R. Vicente, the Company’s President and Chairman of the Board, which is effective as of January 1, 2015 and shall terminate as of December 31, 2017, unless earlier terminated by the Company or Mr. Vicente in accordance with the Employment Agreement.

Mr. Vicente’s Executive Employment Agreement provides for a base salary equal to $135,000, as well as an annual bonus, payable at the discretion of the Board of Directors, equal to 30% of  Mr. Vicente’s base salary for that calendar year, provided that Mr. Vicente has the option to receive any portion of his salary and bonus in stock of the Company, in lieu of cash, at a value determined by the Board of Directors in their reasonable discretion and otherwise in accordance with the Employment Agreement.

The Employment Agreement provides for change of control termination payments, whereby if Mr. Vicente is terminated, his compensation reduced, or the employer terminates his employment within one year after a change in control, then Mr. Vicente is entitled to a termination benefit in an amount no less than the total of the highest annual salary and bonus amount set forth in the Employment Agreement multiplied by two (2).  The Employment Agreement also provides for termination payments in the absence of a change of control in the event the Company terminates Mr. Vicente without cause, which said payments shall be in an amount equal to all compensation paid by the Company to Mr. Vicente for the 24 months preceding the termination, including salary, bonus, equity, stock options and other compensation, to be paid in equal, monthly installments over the 24-month period following termination. (see the Executive Employment Agreement attached as an Exhibit hereto for more information).

Item 8.01                      Other Events.

On December 22, 2014, the Company, Tonaquint and St. George filed a Stipulated Motion to Dismiss with Prejudice the lawsuit between and among those same parties in the United States District Court for the District of Utah, Central Division, case number 2:13-cv-00806-PMW (the “Action”), and on that same day, the Court entered an Order of Dismissal, dismissing the Action in its entirety. The Action which is also referenced herein above has been described in detail in previous filings by the Company.

Item 9.01                      Financial Statements and Exhibits.

(d) Exhibits

The following Exhibits are furnished herewith:
 
Exhibit No.   Description
     
10.1   Settlement and Exchange Agreement
10.2   Secured Convertible Promissory Note
10.3   First Amendment to Security Agreement
10.4   First Amendment to Guaranty
10.5   Consent to Entry of Judgment by Confession
10.6   Executive Employment Agreement with Joseph R. Vicente
 
 
 
 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
 
CORD BLOOD AMERICA, INC.
  
   
(Registrant)
  
       
Date:  December 23, 2014
By:
/s/ Joseph R. Vicente
  
   
Chairman and President
  

 


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.

 
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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.

 
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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.

 
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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;
 
 
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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.

 
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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.
 
 
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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.
 
 
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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,
 
 
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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.
 
 
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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.

 
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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]
 
 
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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 DOCUMENTS


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.
 
 
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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.
 
 
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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
 
 
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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.
 
 
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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.  
 
 
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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.
 
 
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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,
 
 
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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]
 
 
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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
 


Exhibit 10.3
 
FIRST AMENDMENT TO SECURITY AGREEMENT

This First Amendment (this “Amendment”) to that certain Security Agreement dated June 27, 2012 (the “Agreement”), is entered into on December 17, 2014 to be effective as of June 27, 2012, by and among Cord Blood America, Inc., a Florida corporation (“CBAI”); CorCell Companies, Inc., a Nevada corporation (“CCCI”); CorCell, Ltd., a Nevada corporation (“CCL”); Cord Partners, Inc., a Florida corporation (“CPI”); CBA Properties, Inc., a Florida corporation (“CBAPI”); and Career Channel Inc., a Florida corporation (“Channel”), in favor of Tonaquint, Inc., a Utah corporation (together with its successors, transferees, and/or assigns, “Secured Party”).  Each of CBAI, CCCI, CCL, CPI, CBAPI, and Channel may be referred to herein as a “Debtor”, and collectively as the “Debtors”.  Each of the Debtors and Secured Party are sometimes referred to herein individually as a “Party” and collectively as the “Parties”.  Unless otherwise defined herein, all references to defined terms herein shall refer to such terms as defined in the Agreement.

WHEREAS, the Debtors previously executed the Agreement in favor of Secured Party, granting Secured Party a security interest in the Collateral as security for the Obligations, all as set forth in the Agreement;

WHEREAS, the Parties desire to amend the Agreement to clarify and confirm what was intended by the defined term “Obligations,” among other things; and

WHEREAS, Section 8.3 of the Agreement provides that the Agreement may not be amended except by the written agreement of the Parties.

NOW THEREFORE, the Parties agree, and for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Agreement is hereby amended as follows:
 
1. Preamble.  The preamble of the Agreement shall be deleted in its entirety and replaced with the following:
 
“This Security Agreement, dated as of June 27, 2012 (as the same may be amended from time to time, this “Security Agreement”), is executed by Cord Blood America, Inc., a Florida corporation (“CBAI”); CorCell Companies, Inc., a Nevada corporation (“CCCI”); CorCell, Ltd., a Nevada corporation (“CCL”); Cord Partners, Inc., a Florida corporation (“CPI”); CBA Properties, Inc., a Florida corporation (“CBAPI”); and Career Channel Inc., a Florida corporation (“Channel”), in favor of Tonaquint, Inc., a Utah corporation (“Secured Party”).  Each of CBAI, CCCI, CCL, CPI, CBAPI, and Channel may be referred to herein as a “Debtor”, and collectively as the “Debtors”.”
 
2. Recital A.  Recital “A” of the Agreement shall be deleted in its entirety and replaced with the following:
 
 
 
 
 
“A.           CBAI has issued to Secured Party a certain Secured Convertible Promissory Note dated June 27, 2012, in the face amount of $1,252,000 (as the same may be amended, and including any promissory note for which said note is subsequently exchanged, the “Note”).”
 
3. Definition of Obligations. The paragraph that defines “Obligations” in Section 1 of the Agreement shall be deleted in its entirety and replaced with the following:
 
““Obligations” means (a) all loans, advances, debts, liabilities and obligations, howsoever arising, owed by any Debtor to Secured Party or any affiliate of Secured Party of every kind and description, now existing or hereafter arising, whether created by the Note, this Security Agreement, that certain Securities Purchase Agreement of even date herewith, entered into by and between any Debtor and Secured Party, as the same may be amended from time to time (the “Purchase Agreement”), any other Transaction Documents (as defined in the Purchase Agreement), any settlement or exchange agreement arising from or related to any of the foregoing and all certificates, documents, agreements, resolutions and instruments delivered by any Debtor to Secured Party under or in connection with any such settlement or exchange agreement (collectively, including any such settlement or exchange agreement, the “Subsequent Transaction Documents”), any modification or amendment to any of the foregoing, guaranty of payment or other contract or by a quasi-contract, tort, statute or other operation of law, whether incurred or owed directly to Secured Party or as an affiliate of Secured Party or acquired by Secured Party or an affiliate of Secured Party by purchase, pledge or otherwise, (b) all costs and expenses, including attorneys’ fees, incurred by Secured Party or any affiliate of Secured Party in connection with the Note or in connection with the collection or enforcement of any portion of the indebtedness, liabilities or obligations described in the foregoing clause (a), (c) the payment of all other sums, with interest thereon, advanced in accordance herewith to protect the security of this Security Agreement, and (d) the performance of the covenants and agreements of Debtors contained in all documents or agreements identified or described in clause (a) above.”
 
4. Section 4.  Section 4 of the Agreement shall be deleted in its entirety and replaced with the following:
 
“4.           General Representations and Warranties.  Each Debtor represents and warrants to Secured Party that (a) Debtors are the owners of the Collateral and that to each Debtor's knowledge, no other person has any right, title, claim or interest (by way of Lien or otherwise) in, against or to the Collateral, other than Permitted Liens, and (b) upon the filing of UCC-1 financing statements in the applicable jurisdictions, to each Debtor's knowledge, Secured Party shall have a perfected first-position security interest in the Collateral to the extent that a security interest in the Collateral can be perfected by such filing, except for Permitted Liens.”
 
5. Sections 5.6, 5.7 and 5.8.  Sections 5.6 and 5.7 of the Agreement shall be deleted in their entirety and replaced with the following, and a new Section 5.8 shall be inserted immediately after Section 5.7, so that Sections 5.6, 5.7 and 5.8 of the Agreement shall be and read as follows:
 
“5.6           without limiting the foregoing, not to move any Collateral outside the United States without the consent of Secured Party;
 
 
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5.7           not to sell or otherwise dispose of the Collateral or any interest therein, other than in the ordinary course of business and in an amount not to exceed $50,000 in the aggregate, without the prior consent of Secured Party, which shall not be unreasonably withheld; and
 
5.8           upon the occurrence of an uncured Payment Default (as defined in the Note) due to one or more of the Debtors filing for bankruptcy or being placed into an involuntary bankruptcy, each of the Debtors hereby consents to Secured Party’s immediate relief from any stay or prohibition on foreclosure (“Stay Relief”), 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 each Debtor agrees to not take any action either directly or indirectly to dispute or otherwise contest Secured Party’s absolute and immediate right to Stay Relief in any bankruptcy or similar proceeding.”
 
6. References to "Event of Default".  All references to "Event of Default" contained in the Security Agreement shall be amended and changed to "uncured Payment Default".
 
7. Section 7.5(b).  Section 7.5(b) of the Agreement shall be deleted in its entirety and replaced with the following:
 
“(b)           Second, to the payment to Secured Party of the amount then owing or unpaid on the Note (to be applied first to accrued interest and second to outstanding principal) and all amounts owed under any of the other Transaction Documents and any Subsequent Transaction Documents; and”
 
8. Section 8.1.  Section 8.1 of the Agreement shall be deleted in its entirety and replaced with the following:
 
“8.1           Notices.  Except as otherwise provided herein, all notices, requests, demands, consents, instructions or other communications to or upon Debtors or Secured Party under this Security Agreement shall be directed as set forth below (or as the recipient thereof shall otherwise have directed in writing in accordance herewith) in a manner set forth below and will be deemed effectively given the earlier of (i) when received, (ii) when delivered personally, (iii) one business day after being delivered by email or other form of electronic communication (with receipt of appropriate confirmation and provided that notice of an uncured Payment Default may not be provided by email), (iv) one business day after being deposited with an overnight courier service of recognized standing, or (v) four days after being deposited in the U.S. mail, first class with postage prepaid.
 
   Any Debtor:                                 Cord Blood America, Inc.
                      Attn: Joseph R. Vicente
                      and
                      Attn: Stephen Morgan
                      1857 Helm Drive
Las Vegas, NV 89119

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

Stoel Rives LLP
Attn: David L. Mortensen, Esq.
and
Attn: Rob Yates, Esq.
201 South Main Street, Suite 1100
Salt Lake City, UT 84111

 
Secured Party:
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

9. Section 8.8.  Section 8.8 of the Agreement shall be deleted in its entirety and replaced with the following:
 
“8.8           Entire Agreement. This Security Agreement, the Note and the other Transaction Documents, and any Subsequent Transaction Documents, taken together, constitute and contain the entire agreement of Debtors and Secured Party with respect to this particular matter and supersede any and all prior agreements, negotiations, correspondence, understandings and communications between the parties, whether written or oral, respecting the subject matter hereof.”
 
10. Change of Control. Notwithstanding anything to the contrary contained in the Security Agreement or this Amendment, each Party acknowledges and agrees that nothing contained in the Security Agreement or this Amendment shall preclude (i) the sale of equity interests of any Debtor or (ii) the merger of any Debtor with another party. Notwithstanding anything to the contrary contained in the Security Agreement or this Amendment, each Party acknowledges and agrees that nothing contained in the Security Agreement or this Amendment shall preclude the sale of all or substantially all of the assets of any Debtor as long as the proceeds received from such sale are used to repay all amounts owed to Secured Party and such proceeds (up to the outstanding balance of the Note) are paid directly to Secured Party in cash at the closing of such sale.
 
11. Acknowledgment Regarding Consideration.  Without limiting any provision contained herein, each Debtor acknowledges and agrees that it has received adequate consideration for entering into this Amendment, and covenants never to assert lack or failure of consideration as a defense to the enforcement or effectiveness of this Amendment or the Agreement.
 
 
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12. Other Terms Unchanged.  The Agreement, as amended by this Amendment, remains and continues in full force and effect, constitutes legal, valid, and binding obligations of each of the Parties, and is in all respects agreed to, ratified, and confirmed. Any reference to the Agreement after the date of this Amendment is deemed to be a reference to the Agreement as amended by this Amendment.  If there is a conflict between the terms of this Amendment and the Agreement, the terms of this Amendment shall control.  The Parties acknowledge and agree that it is their intent that the security interest created by the Agreement (as amended hereby) remains an unbroken and continuous security interest and lien position since June 27, 2012. In furtherance thereof, each Party acknowledges, represents and warrants that it has no knowledge of any facts or circumstances that would be inconsistent with such intent and position. Each Party further agrees not to take a position contrary to such representations and warranties and agrees to take such reasonable actions and execute such documents and agreements as Secured Party or any Debtor may reasonably request from time to time in support of such position.
 
13. Headings.  The headings contained in this Amendment are for reference purposes only and do not affect in any way the meaning or interpretation of this Amendment.
 

 
[SIGNATURE PAGE TO FOLLOW]
 
 
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IN WITNESS WHEREOF, the undersigned Parties have executed and delivered this Amendment to be effective as set forth above.
 

SECURED PARTY:

TONAQUINT, INC.


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

 
DEBTORS:

CORD BLOOD AMERICA, INC.


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

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 FIRST AMENDMENT TO SECURITY AGREEMENT]
 


Exhibit 10.4
 
FIRST AMENDMENT TO GUARANTY

This First Amendment (this “Amendment”) to that certain Guaranty dated June 27, 2012 (the “Guaranty”), is entered into on December 17, 2014 to be effective as of June 27, 2012, by CorCell Companies, Inc., a Nevada corporation (“CCCI”); CorCell, Ltd., a Nevada corporation (“CCL”); Cord Partners, Inc., a Florida corporation (“CPI”); CBA Properties, Inc., a Florida corporation (“CBAPI”); and Career Channel Inc., a Florida corporation (“Channel”), for the benefit of  Tonaquint, Inc., a Utah corporation (together with its successors, transferees and/or assigns, “Investor”).  CCCI, CCL, CPI, CBAPI, and Channel are referred to herein collectively as the “Guarantors”.  Each of the Guarantors and Investor are sometimes referred to herein individually as a “Party” and collectively as the “Parties”. Unless otherwise defined herein, all references to defined terms herein shall refer to such terms as defined in the Guaranty.

WHEREAS, the Guarantors previously executed the Guaranty for the benefit of Investor, guaranteeing certain indebtedness, liabilities and obligations of the parent company of the Guarantors, Cord Blood America, Inc., a Florida corporation (“CBAI”), owed to Investor, all as set forth in the Guaranty; and

WHEREAS, the Guarantors desire to amend the Guaranty to clarify and confirm the indebtedness, liabilities and obligations of CBAI guaranteed under the Guaranty, among other things.

NOW THEREFORE, the Guarantors agree, and for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Guaranty is hereby amended as follows:
 
1. Preamble.  The preamble of the Guaranty shall be deleted in its entirety and replaced with the following:
 
“THIS GUARANTY, made effective as of June 27, 2012 (as the same may be amended from time to time, this “Guaranty”), is given by CorCell Companies, Inc., a Nevada corporation (“CCCI”); CorCell, Ltd., a Nevada corporation (“CCL”); Cord Partners, Inc., a Florida corporation (“CPI”); CBA Properties, Inc., a Florida corporation (“CBAPI”); and Career Channel Inc., a Florida corporation (“Channel”) (CCCI, CCL, CPI, CBAPSI, CBAPI, and Channel are collectively referred to as “Guarantors”), for the benefit of Tonaquint, Inc., a Utah corporation, and its successors, transferees, and assigns (collectively “Investor”).”
 
2. Recital A.  Recital “A” of the Guaranty (under the heading “PURPOSE”) shall be deleted in its entirety and replaced with the following:
 
“A.           Guarantors’ parent company, Cord Blood America, Inc., a Florida corporation (“CBAI”), has issued to Investor that certain Secured Convertible Promissory Note of even date herewith in the original principal amount of $1,252,000.00 (as the same may be amended, and including any promissory note for which said note is subsequently exchanged, the “Note”) pursuant to a Securities Purchase Agreement of even date herewith by and between CBAI and Investor (the “Purchase Agreement”).”
 
 
 
 
 
3. Section 1. Section 1 of the Guaranty shall be deleted in its entirety and replaced with the following:
 
“1.           Indebtedness Guaranteed.  Guarantors hereby absolutely and unconditionally guarantee the prompt payment in full of all indebtedness, liabilities and obligations owed by CBAI to Investor under the Purchase Agreement, Note and/or any of the other Transaction Documents, as the same may be amended, as well as under any settlement or exchange agreement arising from or related to any of the foregoing and all certificates, documents, agreements, resolutions and instruments delivered by CBAI or any of the Guarantors to Investor under or in connection with any such settlement or exchange agreement (collectively, including any such settlement or exchange agreement, the “Subsequent Transaction Documents”) (collectively, the “Obligations”), as and when the same (including without limitation portions thereof) become due and payable.  Guarantors acknowledge that the amount of the Obligations may exceed the principal amount of the Note.”

4. Section 3.  Section 3 of the Guaranty shall be deleted in its entirety and replaced with the following:
 
“3.           Alteration of Obligations.  In such manner, upon such terms and at such times as Investor and CBAI deem best and without notice to Guarantors, Investor and CBAI may alter, compromise, accelerate, extend, renew or change the time or manner for the payment of any Obligation, increase or reduce the rate of interest on the Note, release CBAI, as to all or any portion of the Obligations, release, substitute or add any one or more guarantors or endorsers, accept additional or substituted security therefor, or release or subordinate any security therefor.  No exercise or non-exercise by Investor of any right available to Investor, no dealing by Investor with Guarantors or any other guarantor, endorser of the Note or any other person, and no change, impairment or release of all or a portion of the obligations of CBAI under any of the Transaction Documents or any Subsequent Transaction Documents, or suspension of any right or remedy of Investor against any person, including, without limitation, CBAI and any other such guarantor, endorser or other person, shall in any way affect any of the obligations of Guarantors hereunder or any security furnished by Guarantors or give Guarantors any recourse against Investor.  Each Guarantor acknowledges that its obligations hereunder are independent of the obligations of CBAI.”
 
5. Section 12.  Section 12 of the Guaranty shall be deleted in its entirety and replaced with the following:
 
“12.           Notices.  Whenever Guarantors or Investor shall desire to give or serve any notice, demand, request or other communication with respect to this Guaranty, each such notice shall be in writing and shall be effective only if the same is delivered by personal service, or mailed by registered or certified mail, postage prepaid, addressed as follows:
 
 
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To Each Guarantor:
 
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, Esq.
and
Attn: Rob Yates, Esq.
201 South Main Street, Suite 1100
Salt Lake City, UT 84111

To Investor:

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

Any such notice delivered personally shall be deemed to have been received upon delivery.  Any such notice sent by mail shall be presumed to have been received by the addressee three (3) business days after posting in the United States mail.  Any Party to whom any such notice is to be sent hereunder may change its address by giving the other such Parties written notice of its new address as herein provided.”

6. Payments to Guarantors.  All references to payments made to the Guarantors set forth in the Guaranty are deleted. Each of the Guarantors acknowledges and affirms the existence of consideration to support the guaranty provided by them in the Guaranty in favor of Investor and affirmatively represents, warrants, and covenants that they will not assert lack of consideration, or any other defense based on an alleged absence of consideration or receipt or use of the loan proceeds, as a defense to the enforceability of the Guaranty, this Amendment, or the Security Agreement. Those defenses are voluntarily and intentionally waived and relinquished by the Guarantors.
 
7. Acknowledgment Regarding Consideration.  Without limiting any provision contained herein, each of the Guarantors acknowledges and agrees that it has received adequate consideration for entering into this Amendment, and covenants never to assert lack or failure of consideration as a defense to the enforcement or effectiveness of this Amendment or the Guaranty.
 
 
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8. Other Terms Unchanged.  The Guaranty, as amended by this Amendment, remains and continues in full force and effect, constitutes legal, valid, and binding obligations of each of the Guarantors, and is in all respects agreed to, ratified, and confirmed. Any reference to the Guaranty after the date of this Amendment is deemed to be a reference to the Guaranty as amended by this Amendment.  If there is a conflict between the terms of this Amendment and the Guaranty, the terms of this Amendment shall control.  Each Party acknowledges and agrees that it is such Party’s intent that the Guarantors’ agreement to guaranty the indebtedness, liabilities and obligations of CBAI described under and pursuant to the Guaranty (as amended hereby) remain an unbroken and continuous commitment since June 27, 2012. In furtherance thereof, each Party represents and warrants that it is not aware of any facts or circumstances in contravention of the Parties’ intent expressed in the foregoing sentence and further agrees not to take any position to the contrary of such intent. Finally, each Party agrees to execute any documents and agreements and take such further actions as any other Party may reasonably request in support of such intent.
 
9. Headings.  The headings contained in this Amendment are for reference purposes only and do not affect in any way the meaning or interpretation of this Amendment.
 

 
[SIGNATURE PAGE TO FOLLOW]
 
 
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IN WITNESS WHEREOF, the undersigned Guarantors have executed and delivered this Amendment to be effective as set forth above.
 

GUARANTORS:

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 FIRST AMENDMENT TO GUARANTY]


Exhibit 10.5
 
CONSENT TO ENTRY OF JUDGMENT BY CONFESSION

_________ COUNTY                      )
                                                             ) ss.
STATE OF ___________               )

Defendant, Cord Blood America, Inc., a Florida corporation (“Defendant”), hereby knowingly and voluntarily consents to the entry of either one of the Judgments by Confession attached hereto as Exhibit A and Exhibit B (collectively, the “Judgment by Confession”), to be entered in either federal or state court at the request and discretion of counsel for Tonaquint, Inc., a Utah corporation, or its successors or assigns (“Plaintiff”), upon the occurrence of a Payment Default (as defined in that certain Secured Convertible Promissory Note (the “Note”) issued by Defendant in favor of Plaintiff pursuant to that certain Settlement and Exchange Agreement (the “Settlement Agreement”)) that is not cured as set forth in the Note.
 
The Judgment Amount (as defined in the Judgment by Confession) shall be 250% of the entire Outstanding Balance (as defined in the Note) of the Note (the “Judgment Amount”), together with reasonable attorneys’ fees and collection costs, at the time the Judgment by Confession is filed.  Plaintiff agrees it (a) will give Defendant two (2) business-days notice before filing the Judgment by Confession; (b) will serve a copy of the Judgment by Confession on Cord Blood concurrent with the filing; and (c) will not file the Judgment by Confession unless and until a Payment Default has occurred under the Note and is not cured within the timeframe set forth therein.  Subject to the foregoing, Plaintiff shall be entitled to file the Confession of Judgment in either state or federal court in Salt Lake County, Utah in Plaintiff’s discretion.  Plaintiff’s counsel or Plaintiff shall provide the applicable court with an affidavit stating that an uncured Payment Default has occurred and stating the Judgment Amount. A copy of the Judgment by Confession, and the affidavit shall be served via email and express-mail overnight delivery on Defendant and its counsel identified in the Settlement Agreement at the same time that it is filed.
 
 
 
 
 
Defendant expressly agrees and acknowledges that:
           (a)           By executing this Judgment by Confession, it is permitting final judgment to be entered against it in the Judgment Amount, plus any subsequently accruing interest as specified herein, plus attorneys’ fees accrued and owing under Note (the “Final Judgment Amount”) in the event of any uncured Payment Default under the Note;
           (b)           It is waiving any right to a jury trial on any of the matters set forth in the Judgment by Confession, or on any matter set forth in the Settlement Agreement or the Note;
            (c)           Defendant understands that this Judgment by Confession is being delivered to Plaintiff, to be filed with one of the courts referenced herein for the purpose of obtaining a final, fully enforceable, judgment against Defendant in the amount of the Final Judgment Amount in the event of an uncured Payment Default;
           (d)           Defendant represents and warrants that it has all necessary authority, corporate or otherwise, to enter into this Consent to Entry of Judgment by Confession, and that the Settlement Agreement, the Note, this Consent to Entry of Judgment by Confession, and all other documents referenced herein or therein, once executed, are legally binding and fully enforceable against it in accordance with the terms hereof and thereof; and
           (e)           Defendant expressly agree and acknowledge that by filing the Judgment by Confession, Plaintiff will obtain a final judgment in the Final Judgment Amount.
 
[remainder of page intentionally left blank]
 
 
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CORD BLOOD AMERICA, INC.


By: Joseph R Vicente    Dated: 12-17-2014                                                 
      ______________ , President


Subscribed and sworn to before me by Joseph R Vicente on this 17th day of  Dec 2014.
 

____________________________________
Notary Public
 
 
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EXHIBIT A TO CONSENT TO ENTRY OF JUDGMENT BY CONFESSION
 
 

 
 
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________________________________ (________)
________________________________
________________________________
________________________________
Telephone:  (_____) _______________
Facsimile: (_____) ________________

Attorney for Tonaquint, Inc.

                                                                                                                                          
 
IN THE THIRD JUDICIAL DISTRICT COURT
 
 
IN AND FOR SALT LAKE COUNTY, STATE OF UTAH
 
 
TONAQUINT, INC., a Utah corporation,
 
Plaintiff,
 
vs.
 
CORD BLOOD AMERICA, INC., a Florida corporation,
 
Defendant.
  
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JUDGMENT BY CONFESSION
 
Case No.                                             
 
Judge                                             

Defendant CORD BLOOD AMERICA, INC., a Florida corporation (“Defendant”), having confessed and stipulated to the entry of a final and binding judgment against it and in favor of Plaintiff TONAQUINT, INC., a Utah corporation, its successors or assigns (“Plaintiff”), in the event of an uncured Payment Default, as such terms are defined in the Note (as defined below), and other good cause appearing therefore, the Court hereby FINDS, ORDERS, ADJUDGES, AND DECREES that:
 
 
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1. A Payment Default, which was not timely cured, has occurred under that certain Secured Convertible Promissory Note dated December 17, 2014 given by Defendant in favor of Plaintiff (the “Note”) pursuant to that certain Settlement and Exchange Agreement dated December 17, 2014, entered into by and between Defendant and Plaintiff, copies of which are attached hereto as Attachment 1, in that Defendant failed to make a required payment or payments thereunder or timely deliver any shares of its common stock to Plaintiff as required thereunder and failed to cure such Payment Default, as allowed under the Note.
 
2. By virtue of Defendant’s default and violation of the Note, judgment in favor of Plaintiff is hereby entered against Defendant in the amount of the Outstanding Balance (as defined in the Note), which credits Defendant for any payments made by Defendant, multiplied by 250%, which amount is $________________ (the “Judgment Amount”).
 
3. Interest shall accrue on the Judgment Amount at the rate of 15% per annum until all amounts due under the terms of this Judgment by Confession are paid to Plaintiff.
 
4. It is further ordered that this Judgment shall be augmented in the amount of Plaintiff’s reasonable costs and attorneys’ fees expended in enforcing this Judgment as shall be established by affidavit or declaration by or on behalf of Plaintiff.
 
DATED this ____day of ___________, 201__.
 
BY THE COURT

___________________________________
Third Judicial District Court Judge
 

 
 
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ATTACHMENT 1 – SETTLEMENT AND EXCHANGE AGREEMENT AND NOTE
 
 
 
 
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EXHIBIT B TO CONSENT TO ENTRY OF JUDGMENT BY CONFESSION

________________________________ (________)
________________________________
________________________________
________________________________
Telephone:  (_____) _______________
Facsimile: (_____) ________________

Attorney for Tonaquint, Inc.

                                                                                                                                          
 
IN THE UNITED STATES DISTRICT COURT
DISTRICT OF UTAH, CENTRAL DIVISION
 
 
TONAQUINT, INC., a Utah corporation,
 
Plaintiff,
 
vs.
 
CORD BLOOD AMERICA, INC., a Florida corporation,
 
Defendant.
  
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JUDGMENT BY CONFESSION
 
Case No. ____________                                            
 
Judge ______________                                            

Defendant CORD BLOOD AMERICA, INC., a Florida corporation (“Defendant”), having confessed and stipulated to the entry of a final and binding judgment against it and in favor of Plaintiff TONAQUINT, INC., a Utah corporation, its successors or assigns (“Plaintiff”), in the event of an uncured Payment Default, as such terms are defined in the Note (as defined below), and other good cause appearing therefore, the Court hereby FINDS, ORDERS, ADJUDGES, AND DECREES that:
 
1.           A Payment Default, which was not timely cured, has occurred under that certain Secured Convertible Promissory Note dated December 17, 2014 given by Defendant in favor of Plaintiff (the “Note”) pursuant to that certain Settlement and Exchange Agreement dated December 17, 2014, entered into by and between Defendant and Plaintiff, copies of which are attached hereto as Attachment 1, in that Defendant failed to make a required payment or payments thereunder or timely deliver any shares of its common stock to Plaintiff as required thereunder and failed to cure such Payment Default, as allowed under the Note.
 
 
 
 
 
2.           By virtue of Defendant’s default and violation of the Note, judgment in favor of Plaintiff is hereby entered against Defendant in the amount of the Outstanding Balance (as defined in the Note), which credits Defendant for any payments made, multiplied by 250%, which amount is $________________ (the “Judgment Amount”).
 
3.           Interest shall accrue on the Judgment Amount at the rate of 15% per annum until all amounts due under the terms of this Judgment by Confession are paid to Plaintiff.
 
4.           It is further ordered that this Judgment shall be augmented in the amount of Plaintiff’s reasonable costs and attorneys’ fees expended in enforcing this Judgment as shall be established by affidavit or declaration by or on behalf of Plaintiff.
 
DATED this ____day of ___________, 201__.
BY THE COURT


___________________________________Federal District Court Judge
 
 
 
 
 
ATTACHMENT 1 – SETTLEMENT AND EXCHANGE AGREEMENT AND NOTE




Exhibit 10.6

 
EXECUTIVE EMPLOYMENT AGREEMENT
JOSEPH R. VICENTE
 
This Agreement is made as of the Effective Date (defined below), by and between Cord Blood America, Inc, a Florida Corporation (the “Company” or “Employer”) and JOSEPH R. VICENTE (the “Employee”).

WITNESSETH:

In Consideration of the mutual covenants herein contained, the parties hereto agree as follows:

1.           Employment.  The Board of Directors of the Company elected Employee to the officer position of President of the Company, and the Company hereby employs the Employee and the Employee accepts such employment in accordance with the terms and subject to the conditions set forth in this Agreement.

2.           Term.  The term of employment shall be for an initial period commencing as of January 1, 2015 (the “Effective Date”) and ending December 31, 2017 (“Initial Term”), unless canceled by either party or unless Employee is removed from or terminates his positions in accordance with the Company’s bylaws and the laws of the state of the Company’s incorporation.  In the event of any such cancellation, removal or termination, the provisions of paragraph 5 of this Agreement shall apply.

3.           Duties.

(a)           Title and Description of Duties.  Employee shall serve as President of the Company.  Employee also serves as Chairman on the Company’s Board of Directors, which said position has been addressed separately from this Agreement.  In his capacity as President, Employee shall be responsible for all operations of the Company, and such other tasks and duties as may be requested by the Board of Directors of the Company.

(b)           Change of Duties.  The duties of Employee may be modified from time to time at the direction of the Board.

(c)           Loyal and Conscientious Performance of Duties.  Employee agrees that to the best of his ability and expertise, Employee shall render his exclusive services and assert his best efforts on behalf of the Company, devoting full time in the performance of his duties consistent with the needs of the Company and the practices of the industry.  Employee shall perform his duties diligently and competently.

 
 
 
 
4.           Obligations of the Company.

(a)           The Company shall provide Employee with compensation incentives, benefits and business expense reimbursements specified elsewhere in this Agreement.

5.           Compensation.

(a)           Annual Salary and equity compensation.  As compensation for the services to be rendered by Employee, hereunder, Company shall pay Employee an annual salary equal to $135,000, payable in accordance with the Company’s standard accounting practices, provided that payments are made at least semi-monthly.  .  Compensation reviews for Employee will be at least annually.  All payments to Employee hereunder shall be made in accordance with the Company’s customary practices and procedures, all of which shall be in conformity with applicable federal, state and local laws and regulations.  Employee may opt, at Employee’s sole discretion, to receive a portion of his salary in the form of common stock, in lieu of cash, at a value determined by the Board of Directors in their reasonable discretion, provided the Company has common stock available to be issued to Employee and has a plan in place for such issuances and is otherwise able to issue stock to Employee at that time.  In the event Employee opts to receive a portion of his salary in the form of common stock and the Company is not able to issue common stock to Employee, whether due to the absence of available common stock or otherwise, Employee may defer that portion of his salary until such time as the Company is able to issue common stock to Employee, provided that if the Company is unable to issue common stock to Employee within one year of the Employee’s election to defer his salary, then the Company shall pay the Employee the deferred amount in cash on a date that is one year from Employee’s election to defer.


(b)           Pension and Profit Sharing.    As part of the compensation for services rendered under this Agreement, Employee shall be entitled to participate in the Company’s pension, profit sharing, and 401K plans if such plans are established by Company.

(c)           Bonus.   Performance criteria for Employee shall be established by the Board of Directors, in consultation with Employee, and reviewed annually.  Based upon the Employee’s performance toward the achievement of the agreed upon performance criteria, the Company may award Employee a bonus.  The bonus opportunity shall be equal to 30% of Employee’s annual salary then in effect under this Agreement per year. Said Bonus earned and paid to Employee shall be determined by the Board of Directors, by measuring the success with which the Employee has met performance criteria as established by the Board of Directors. Employee may opt, at Employee’s sole discretion, to receive a portion of his salary in the form of common stock, in lieu of cash, at a value determined by the Board of Directors in their reasonable discretion, provided the Company has common stock available to be issued to Employee and has a plan in place for such issuances and is otherwise able to issue stock to Employee at that time.  In the event Employee opts to receive a portion of his salary in the form of common stock and the Company is not able to issue common stock to Employee, whether due to the absence of available common stock or otherwise, Employee may defer that portion of his salary until such time as the Company is able to issue common stock to Employee, provided that if the Company is unable to issue common stock to Employee within one year of the Employee’s election to defer his salary, then the Company shall pay the Employee the deferred amount in cash on a date that is one year from Employee’s election to defer.

 
 
 

(d)           Equity Compensation. Employee will receive no additional stock options or shares of the Company’s common stock at this time.  Company reserves the right to review this portion of the Agreement at least on an annual basis.  All payments to Employee hereunder shall be made in accordance with the Company’s customary practices and procedures, all of which shall be in conformity with applicable federal, state and local laws and regulations.

(e)           Change of Control Termination.  If  (a) there is a Change of Control at the Company  (defined as (i) the acquisition of all or a majority of the outstanding voting shares of the Company by a new person, (ii) the acquisition of all or a majority of the assets of the Company by a new person, (iii) the merger of the Company with another person, or (iv) the election of a majority of directors to the Board of  Directors of the Company who are not persons who were nominated for election by a majority of the then existing Board of Directors (e.g. were not on the Management slate of nominees for election); and (b) the Employee’s employment is terminated by the Company, or employee’s compensation is reduced from its then current level or employee’s responsibilities are reduced or downgraded (each of such events hereinafter referred to a “Triggering Event”), and which Triggering Event occurs within one year after such Change of Control; then the Company shall pay to the Employee a Termination Bonus in the form of a lump sum cash payment in an amount no less than the total of the highest annual salary plus bonus amount set forth in this Agreement multiplied by two (2).  The Termination Bonus shall be paid as a lump sum within thirty (30) days of the Triggering Event.

(f)           Termination, with No Change of Control; Termination after the
Change of Control Period Has Lapsed.  Where there has been no change of control or when the one (1) year period following a Change of Control has lapsed, in the event Employee is terminated by the Company without cause, the Company shall pay Employee an amount equal to all compensation paid by the Company to the Employee for the 24 months preceding the termination, including Employee’s salary, equity, bonus, stock options and other compensation that were received by Employee, which said termination bonus shall be paid monthly, in equal installments, over the 24-month period following termination.  Any salary and bonus that Employee elected to take in stock in the prior 24-month period will be calculated as if the Employee was paid the value of such stock in cash.   In addition, during this 24-month period, Company shall keep Employee on Company’s health plan, on the same terms as before the termination.  In the event the Company terminates Employee for cause, as determined by vote of the disinterested directors of the Board of Directors, Employee shall not be entitled to such compensation, though a severance may be paid by Company to Employee as deemed appropriate by the Board of Directors, other than Employee.  For purposes of this paragraph, “Cause” shall be defined as failure to exercise duties of care, diligence, loyalty and any other duties applicable to officers of corporations incorporated in the state of Florida, and shall also include (i) an intentional act of fraud, embezzlement, theft or any other material violation of law that occurs during or in the course of Employee’s employment with the Company; (ii) intentional damage to the Company’s assets; (iii) intentional disclosure of the Company’s confidential information contrary to Company’s policies; (iv) breach of Employee’s obligations under this Agreement; (v) intentional breach of the Company’s policies; (vii) the willful and continued failure to substantially perform the required duties (other than as a result of incapacity due to physical or mental illness); or (vi) willful conduct by Employee that is demonstrably and materially injurious to the Company, monetarily or otherwise.  An act, or a failure to act, shall not be deemed willful or intentional, as those terms are defined herein, unless it is done, or omitted to be done, by Employee in bad faith or without a reasonable belief by Employee that his action or omission was in the best interest of the Company. Failure to meet performance standards or objectives, by itself, does not constitute Cause. If Employee terminates this Agreement, no such compensation described in this paragraph shall be available to Employee.
 
 
 
 
 
6.           Employee Benefits.

(a)           Vacation.  Employee shall be entitled to 20 days vacation time each year with full pay.  The time for such vacation shall be requested by Employee, subject to the Company’s reasonable approval.  If Employee is unable for any reason to take the total amount of authorized vacation during any year, he may accrue the time and add it to vacation time for the following year, provided that the amount of vacation time to be rolled over from one year to the next may not exceed 20 days.  The accrued unused portion of vacation will be paid upon termination in accordance with the policies and procedures in place at the Company at the time of termination.

(b)           Illness.  Employee shall be entitled to 10 days per year as sick leave and/or personal leave with full pay.  Sick leave may be accumulated up to a total of thirty (30) days.  As with all employees of the Company, the accumulated balance of unused sick time will not be paid as compensation upon termination of employment.

(c)           Death Benefits.  Employee shall be entitled to participate in such Company Death benefits and insurance programs as may be made available to other key employees.

(d)           Health Care Benefits.                                           The Company will pay for health care benefits for Employee and his family, including major medical insurance, dental insurance, and vision insurance, subject to reasonable negotiation between the Company and Employee in the event of changes in healthcare laws pursuant to which the Company may be adversely affected if this paragraph were to remain in place.
 
 
 
 
 
7.           Expenses.

(a)           Reimburse Business Expenses.  The Company shall pay or reimburse Employee for all reasonable, ordinary and necessary business and travel expenses that may be incurred by him directly and solely for the benefit of the Company in connection with the rendition of the services contemplated hereby.  Employee shall submit to the Company such invoices, receipts or other evidences or expenses as Company may require.

(b)           The following provisions shall be in effect for any reimbursements to which Employee otherwise becomes entitled under this Agreement, including (without limitation) the reimbursements provided under this paragraph, in order to assure that such reimbursements are effected in compliance with the applicable requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”):
 
(i)           The amount of reimbursements to which Employee may become entitled in any one calendar year shall not affect the amount of expenses eligible for reimbursement hereunder in any other calendar year.
 
 (ii)           Employee’s right to reimbursement cannot be liquidated or exchanged for any other benefit or payment.

8.           Work Product/Trade Secrets.

(a)           Ownership of Work Product.  Employee agrees that any and all intellectual properties, including, but not limited to, all ideas, concepts, themes, inventions, designs, improvements and discoveries conceived, developed or written by Employee, either individually or jointly in collaboration with others during the term of this Agreement, shall belong to and be the sole and exclusive property of the Company.

9.           Soliciting Customers After Termination of Employment; Covenant Not to Compete.

(a)           Employee acknowledges and agrees that the names and addresses of Employer’s customers constitute trade secrets of Employer and that the sale or unauthorized use or disclosure of such names, or any other of Employer’s trade secrets obtained by Employee during his employment with Employer constitute unfair competition.  Employee further acknowledges that Employer’s employees are a valuable asset in the operation of Employer’s business.  Employee promises and agrees not to engage in any unfair competition with Employer.

(b)           For a period of 24 months immediately following the termination of his employment with Employer, Employee shall not directly or indirectly make known to any person, firm, or corporation the names or addresses of any of the customers of the Employer or any other information pertaining to them, or call on, solicit, take away, or attempt to call on, solicit, or take away any of the customers of Employer on whom Employee called or with whom Employee became acquainted during his employment with Employer, either for himself or for any other person, firm or corporation.
 
 
 
 
 
(c)           Employee hereby agrees that he will not, during the term of this
Agreement and for two (2) years following termination of this Agreement participate in any business activities on behalf of any enterprise which competes with the Company in the umbilical cord blood and cord tissue processing and storage business, unless approved by the Company in writing.  Employee will be deemed to be engaged in such competitive business activities if Employee participates in such a business enterprise as an employee, officer, director, independent contractor, agent, partner, proprietor, or other participant; provided that the ownership of no more than 2 percent of the stock of a publicly traded corporation engaged in a competitive business shall not be deemed to be engaging in competitive business activities.

10.           Injunctive Relief.  The parties recognize and acknowledge that irreparable damage might result if Employee breaches any provision of this Agreement, and accordingly, the parties hereto agree that all obligations herein may be enforced by injunctive relief.


11.           Warranties and Representation of Employee.  Employee hereby warrants and represents to the Company as follows:

(a)           Employee’s execution and delivery of this Agreement does not violate or conflict with any provision of any document, instrument or agreement (oral or written) to which Employee is subject.

(b)           Employee agrees that all of the results of Employee’s services hereunder during the term of this Agreement shall be deemed to have been accomplished in the course of Employee’s employment hereunder and all proprietary interest, if any, therein, shall, for all purposes, as between Employee and the Company, its successors, licensees and assigns, belong to the Company and shall be the Company’s exclusive property.

(c)           Employee hereby agrees to indemnify and hold the Company and its successors and assigns harmless of and from any and all loss, damage, reasonable cost and expense, including, without limitation, reasonable attorney’s fees, arising out of or in connection with the breach or violation of any of the warranties, representations, covenants or agreements made by Employee herein.

12.           Warranties and Representations of Company.  Company hereby agrees to indemnify and hold Employee harmless of and from any and all loss, damage, cost and expense, including without limitation, reasonable attorney’s fees, arising out of his actions as an employee of the Company, to the fullest extent permitted under Florida Corporate law.
 
 
 
 
 
13.           Insurance.  The Company may secure in its own name or otherwise and at its own expense, life, accident, disability or other insurance covering Employee, or Employee and others, and Employee shall not have any right, title or interest in or to any such insurance.  If Employee shall be required to assist the Company to procure such insurance, Employee agrees that he shall submit to such medical and other examinations, and shall sign such applications and other instruments in writing, as may be reasonably required by the Company and any insurance company to which application for such insurance shall be made.  Employee represents and warrants that he knows of no physical defect or other reason that would prevent the Company from obtaining insurance on Employee without payment of extra premium with exclusions.

14.           Arbitration.

(a)           Any controversy between Company and Employee involving the construction or application of any of the terms, provisions or conditions of this Agreement, shall be submitted to arbitration on the written request of either party served on the other.  The arbitration shall take place in Las Vegas, Nevada before a member of the American Arbitration Association ("AAA") to be mutually appointed by the parties (or, in the event the parties cannot agree on a single such member, to a panel of three members selected in accordance with the rules of the AAA).  The dispute or disagreement shall be settled in accordance with the Commercial Arbitration Rules of the AAA and the decision of the arbitrator(s) shall be final and binding upon the parties and judgment may be obtained thereon in a court of competent jurisdiction.  The prevailing party shall be entitled to recover from the other party the fees and expenses of the arbitrator(s) as well as reasonable attorneys' fees, costs and expenses incurred by the prevailing party.
 
15. Benefit Limit. In the event that any payments or benefits to which Employee becomes entitled in accordance with the provisions of this Agreement (or any other agreement with the Company or any other corporation or entity that directly or indirectly controls, is controlled by, or is under common control with the Company) would otherwise constitute a parachute payment under Code Section 280G(b)(2), then such payments and/or benefits will be subject to reduction to the extent necessary to assure that Employee receives only the greater of (i) the amount of those payments which would not constitute such a parachute payment or (ii) the amount which yields Employee the greatest after-tax amount of benefits after taking into account any excise tax imposed under Code Section 4999 on the payments and benefits provided Employee under this Agreement (or on any other payments or benefits to which Employee may become entitled in connection with any change in control or ownership of the Company or the subsequent termination of his employment with the Company).  The benefit limits of this paragraph shall be calculated as of the date on which the event triggering any parachute payment is effected, and such calculation shall be completed within thirty (30) days after such effective date.
 
 
 
 
 
Should the completed calculations require a reduction in benefits in order  to satisfy the benefit limit of this paragraph, then the portion of any parachute payment otherwise payable in cash to Employee shall be reduced to the extent necessary to comply with such benefit limit, with each such cash payment to be reduced pro-rata but without any change in the payment dates, and with the cash severance payments detailed herein to be the first and then the benefit payments to be the next  such payments so reduced.  Should such benefit limit still be exceeded following such reduction, then the number of shares which would otherwise vest on an accelerated basis under each of Employee’s outstanding equity awards shall be reduced to the extent necessary to eliminate such excess, with such reduction to be applied to such equity awards in the same chronological order in which those awards were made.
 
16.           Entire Agreement.  This Agreement constitutes and embodies the full and complete understanding and agreement of the parties with respect to Employee’s employment by the Company, and supersedes all prior understandings and agreements, if any, whether oral or written between Employee and the Company, and shall not be amended, modified or changed except by an instrument in writing executed by the party to be charged.

17.           Severability.  The invalidity or partial invalidity of one or more provisions of this Agreement shall not invalidate any other provision of this Agreement.

18.           Waiver.  No waiver by either party of any provision or condition to be performed shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or any prior or subsequent time.

19.           Binding Effect.  This Agreement shall inure the benefits of, be binding upon and enforceable against, the parties hereto and their respective heirs, successors, assigns and legal representatives.

20.           Captions.  The paragraph captions contained in this Agreement are for purposes of reference only and shall not affect in any way the meaning or interpretation of this Agreement.

21.           Notices.  All notices, requests, demands and other communications required or permitted to be given hereunder shall be in writing and shall be served personally, sent prepaid commercial overnight delivery service, faxed with a copy mailed as well, or sent registered or certified mail, return receipt requested, postage prepaid, addressed as follows (or to such other address as a party shall specify to the other party in writing):
 
If to Company:                                                      Cord Blood America, Inc.
1857 Helm Drive
Las Vegas, NV 89119

 
If to Employee:                                                      Joseph R. Vicente
Home Address on File with Company
 
 
 
 
 
Notwithstanding anything to the contrary in this Section, either party may, by written notice to the other, specify a different address for notice purposes.  Such notices, demands, or declarations shall be deemed sufficiently served or given for all purposes hereunder, unless otherwise specified in this contract, either (i) if personally serviced, upon such service, (ii) if sent by fax or commercial overnight delivery service, upon the next business day following such sending, or (iii) if mailed, three (3) business days after the time of mailing or on the date of receipt shown on the return receipt, whichever is first.  Company and Employee each agree to notify the other in writing of any change of their respective addresses within ten (10) days after such change.

22.           Governing Law.  This Agreement shall be governed by and construed in accordance with the law of the State of Nevada applicable to agreements made and to be performed in Nevada, except that where Florida law is explicitly referenced herein, Florida law shall govern.

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

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth above.

COMPANY:

Cord Blood America, Inc.
a Florida corporation



By: /s/ Timothy McGrath
 
 
Director


 
           EMPLOYEE:
 
/s/ Joseph R. Vicente
Joseph R. Vicente