PLACEMENT AGENCY AGREEMENT

This Placement Agency Agreement (this “Agreement”) is made and entered into as
of December 18, 2006 (the “Effective Date”), by and between Cord Blood America,
Inc., a Florida corporation (the “Company”), and Stonegate Securities, Inc., a
Texas corporation (“Stonegate”).

WHEREAS, the Company desires to retain Stonegate as its placement agent, and
Stonegate is willing to act in such capacity, in each case subject to the terms
and conditions of this Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the Company and Stonegate (each a “Party” and collectively, the
“Parties”) hereby agree as follows:

1.

RETENTION OF STONEGATE; SCOPE OF SERVICES.

(a)

Subject to the terms and conditions set forth herein, the Company hereby retains
Stonegate to act as the placement agent to the Company during the Contract
Period (as defined in Section 2 below), and Stonegate hereby agrees to be so
retained.

(b)

During the Exclusivity Period (as defined in Section 2(a) below), as the
exclusive placement agent to the Company, Stonegate will have the exclusive
right to identify for the Company prospective purchasers (collectively, the
“Purchasers” and each individually, a “Purchaser”) in one or more placements
 (each, a “Placement” and collectively, the “Placements”) of debt and/or equity
securities to be issued by the Company, the type and dollar amount being as
mutually agreed to by the Parties (the “Securities”).  During the period of
exclusivity Stonegate shall be the Company’s sole and only placement agent as to
Securities.

(c)

After the Exclusivity Period, as the non-exclusive placement agent to the
Company, Stonegate will have the non-exclusive right during the Contract Period
to identify for the Company prospective Purchasers in one or more Placements of
Securities, the type and dollar amount being as mutually agreed to by the
Parties.

(d)

Terms of the Placements shall be as set forth in subscription documents,
including any stock purchase or subscription agreement, escrow agreement,
registration rights agreement, warrant agreement and/or other documents to be
executed and delivered in connection with each Placement (collectively, the
“Subscription Documents”).  The Placements are intended to be exempt from the
registration requirements of the Securities Act of 1933, as amended (the
“Securities Act”), pursuant to Regulation D (“Regulation D”) of the rules and
regulations of the Securities and Exchange Commission (the “SEC”) promulgated
under the Securities Act.

(e)

Stonegate will act on a best efforts basis and will have no obligation to
purchase any of the Securities offered in any Placement. During the Contract
Period, Stonegate shall have the right to arrange for all sales of Securities in
the Placements, including without limitation the exclusive right to identify
potential buyers for the Securities.  All sales of Securities in the Placements
shall be subject to the approval of the Company, which approval may be withheld
in the Company’s sole discretion.

(f)

The Company shall keep confidential this Agreement and the terms of this
Agreement, as well as all exhibits and attachments hereto, if any.
 Additionally, the Company shall keep confidential all information and documents
provided to the Company by Stonegate, including, but not limited to, the
identity of any potential investor, and the contents of any term sheet,
solicitation, investor list, investor indication of interest, road show list,
and any similar document.

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(g)

The Company shall notify Stonegate of any solicitations the Company receives
from a third party in regard to prospective Purchasers or prospective Placements
during the Exclusivity Period (the “Exclusivity Period Contacts”).  The
foregoing applies only in the event the solicitation contains proposed or
possible terms of a potential agreement.  Additionally, for a period of one (1)
year after the end of the Contract Period, in the event that the Company enters
into any agreement, transaction or arrangement with any Exclusivity Period
Contact, the Company shall notify Stonegate in writing of the agreement,
transaction or arrangement, and pay Stonegate a fee equal to the Agency Fee plus
all other compensation under Section 6 of this Agreement for securities of the
Company sold to the Exclusivity Period Contacts.  The foregoing shall apply to
all Exclusivity Period Contacts, regardless as to when the agreement,
transaction or arrangement is ultimately consummated and regardless as to
whether the same occurs during or within one (1) year after the Contract Period.

(h)

The terms and provisions of Sections 1(f) and 1(g) specifically shall survive
the Contract Period.

2.

CONTRACT PERIOD AND TERMINATION.  

(a)

Stonegate shall act as the Company’s exclusive placement agent under this
Agreement for a period commencing on the Effective Date and continuing for a
period of ninety (90) days (the “Exclusivity Period”); thereafter, Stonegate
shall act as the Company’s non-exclusive placement agent under this Agreement
continuing until terminated by either Party upon 10 days notice to the other
Party (the “Contract Period”).  Provided, however, that the Company shall not be
allowed to terminate this Agreement during the period that Stonegate is the
exclusive placement agent.

(b)

Upon termination, neither party will have any further obligation under this
Agreement, except as provided in Sections 5, 6, 7, 8, 9 and 10 hereof.

3.

REPRESENTATIONS AND WARRANTIES OF THE COMPANY.  

The representations and warranties of the Company made to the Purchasers as set
forth in the Subscription Documents are hereby incorporated by reference as of
the date of consummation of the sale of the Securities (the “Closing”) and all
such representations and warranties are hereby deemed made by the Company
directly to Stonegate as though set forth in full herein.  The company
represents and warrants that it has full power and authority to enter into this
Agreement and to perform its obligations hereunder.  This Agreement is
enforceable against the Company in accordance with its terms, subject to
applicable laws governing bankruptcy, insolvency and creditors’ rights
generally.  The Agreement does not conflict with, violate, cause a default,
right of termination, or acceleration (whether through the passage of time or
otherwise) under any contract, agreement, or understanding binding upon the
Company or any subsidiary of the Company.

4.

COVENANTS OF THE COMPANY.

The Company covenants and agrees as follows:

(a)

Neither the Company nor any affiliate of the Company (as defined in Rule 501(b)
of Regulation D) will sell, offer for sale, or solicit offers to buy, or
otherwise negotiate in respect of any security (as defined in the Securities
Act) of the Company which will be integrated with the sale of the Securities and
cause the Placement to be a deemed a public offering requiring registration
under the Securities Act.

(b)

Any and all filings and documents required to be filed in connection with or as
a result of the Placements pursuant to federal and state securities laws are the
responsibility of the Company and will be filed by the Company.

(c)

Any press release to be issued by the Company announcing or referring to any
Placement in which Stonegate serves as the placement agent shall be subject to
the prior review of Stonegate, and each such press release shall, at the request
of Stonegate, identify Stonegate as the placement agent.  

Placement Agency Agreement for - Cord Blood America Inc.11

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Stonegate shall be permitted to publish a tombstone or similar advertisement
upon completion of each Placement identifying itself as the Company’s placement
agent with respect thereto.  This Agreement shall not be filed publicly by the
Company without the prior written consent of Stonegate, unless required by
applicable law or regulation.

5.

FURNISHING OF COMPANY INFORMATION; CONFIDENTIALITY.

(a)

In connection with Stonegate’s activities hereunder on the Company’s behalf, the
Company shall furnish Stonegate with all reasonable information concerning the
Company and its operations that Stonegate deems necessary or appropriate (the
“Company Information”) and shall provide Stonegate with reasonable access to the
Company’s books, records, officers, directors, employees, accountants and
counsel.  The Company acknowledges and agrees that, in rendering its services
hereunder, Stonegate will be using and relying upon the Company Information
without independent verification thereof or independent appraisal of any of the
Company’s assets and may, in its sole discretion, use additional information
contained in public reports or other information furnished by the Company or
third parties.

(b)

Stonegate agrees that the Company Information will be used solely for the
purpose of performing its services hereunder.  Subject to the limitations set
forth in subsection (c) below, Stonegate will keep the Company Information
provided hereunder confidential and will not disclose such Company Information
or any portion thereof, except (i) to a third party contacted by Stonegate on
behalf of, and with the prior approval of, the Company pursuant hereto who has
agreed to be bound by a confidentiality agreement satisfactory in form and
substance to the Company, or (ii) to any other person for which the Company’s
consent to disclose such Company Information has been obtained.

(c)

Stonegate’s confidentiality obligations under this Agreement shall not apply to
any portion of the Company Information which (i) at the time of disclosure to
Stonegate or thereafter is generally available to and known by the public (other
than as a result of a disclosure directly or indirectly by Stonegate in
violation of this Agreement); (ii) was available to Stonegate on a
non-confidential basis from a source other than the Company, provided that such
source is not and was not bound by a confidentiality agreement with the Company;
(iii) has been independently acquired or developed by Stonegate without
violating any of its obligations under this Agreement; or (iv) the disclosure of
which is legally compelled (whether by deposition, interrogatory, request for
documents, subpoena, civil or administrative investigative demand or other
similar process).  In the event that Stonegate becomes legally compelled to
disclose any of the Company Information, Stonegate shall provide the Company
with prompt prior written notice of such requirement so that the Company may
seek a protective order or other appropriate remedy and/or waive compliance with
the terms of this Agreement.

(d)

The obligations of the Parties under this Section 5 shall survive the
termination of this Agreement for 12 months.

6.

FEES AND EXPENSES.

(a)

As compensation for services rendered by Stonegate in connection with the
Placements, the Company agrees to pay Stonegate a fee (the “Agency Fee”) of ten
percent (10%) of the gross proceeds from the sale of Securities in the
Placements.  The Agency Fee shall be paid immediately upon the closing of each
sale of Securities by the Company.

(b)

In the event that any Placement includes warrants that are subsequently
exercised, any sums received by the Company as a result of such exercise shall
be included in and added to the gross proceeds from the sale of Securities in
the Placements.  Upon the exercise of any such warrant, regardless as to the
timing of same, the Company shall immediately notify Stonegate of the exercise
and shall pay to Stonegate all fees, including the above Agency Fee, associated
with the exercise of the warrants.

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(c)

In order to compensate Stonegate for its initial due diligence efforts, the
Company shall deliver to Stonegate (or Stonegate’s designee) 100,000 shares of
fully paid non-assessable shares of common stock of the Company (the “Shares”),
such shares to vest immediately upon the execution of this Agreement.  The
Shares will be issued pursuant to an exemption from the registration
requirements of the Securities Act of 1933, as amended.  The Shares will be
subject to the registration rights provisions set forth on Appendix I hereto.
 Under any circumstance, the shares shall have piggy-back registration rights
and be transferable.  The Company will issue the Shares to such affiliates of
Stonegate and in such denominations as will be designated by Stonegate.

(d)

The Company shall also promptly reimburse Stonegate for all reasonable
out-of-pocket expenses incurred by Stonegate and its directors, officers and
employees in connection with the performance of Stonegate’s services under this
Agreement.  For these purposes, “out-of-pocket expenses” shall include, but not
be limited to, attorneys’ fees and costs, telephone conference charges, courier,
mail, supplies, travel, lodging, transportation, and similar expenses.  All
expenses must receive written pre-approval by the company.

(e)

Upon closing of the Placement, the Company agrees to issue to Stonegate a
Securities Purchase Warrant (the “Representative’s Warrant”) entitling the
holder(s) thereof to purchase an amount of Securities equal to ten percent (10%)
of the total number of Securities sold in the Placement for a period of five (5)
years at an exercise price per share equal to the price at which the Securities
are sold to Purchasers.  The Representative’s Warrant shall otherwise be
substantially in the form of Exhibit A attached hereto.  Under any circumstance,
the Representative Warrant must provide for cashless exercise, transferability,
piggy-back registration rights, and adjustments to warrant price and number of
shares subject to warrant.

(f)

The obligations of the Parties under this Section 6 shall survive the
termination of this Agreement for any reason.

7.

INDEMNIFICATION.

(a)

The Company agrees to indemnify and hold Stonegate harmless from and against any
and all losses, claims, damages or liabilities (or actions, including
securityholder actions, in respect thereof) related to or arising out of
Stonegate’s engagement hereunder or its role in connection herewith, and will
reimburse Stonegate for all reasonable expenses (including reasonable costs,
expenses, awards and counsel fees and/or judgments) as they are incurred by
Stonegate in connection with investigating, preparing for or defending any such
action or claim, whether or not in connection with pending or threatened
litigation in which Stonegate is a party.  The Company will not, however, be
responsible for any claims, liabilities, losses, damages or expenses which are
finally judicially determined to have resulted primarily from the bad faith,
gross negligence or willful misconduct of Stonegate.  The Company also agrees
that Stonegate shall not have any liability to the Company for or in connection
with such engagement, except for any such liability for losses, claims, damages,
liabilities or expenses incurred by the Company that result primarily from the
bad faith, gross negligence or willful misconduct of Stonegate.  In the event
that the foregoing indemnity is unavailable (except by reason of the bad faith
or gross negligence of Stonegate), then the Company shall contribute to amounts
paid or payable by Stonegate in respect of its losses, claims, damages and
liabilities in such proportion as appropriately reflects the relative benefits
received by, and fault of, the Company and Stonegate in connection with the
matters as to which such losses, claims, damages or liabilities relate, and
other equitable considerations.  The foregoing shall be in addition to any
rights that Stonegate may have at common law or otherwise and shall extend upon
the same terms to and inure to the benefit of any director, officer, employee,
agent or controlling person of Stonegate.  The Company hereby consents to
personal jurisdiction, service and venue in any court in which any claim which
is subject to this agreement is brought against Stonegate or any other person
entitled to indemnification or contribution under this subsection (a).

(b)

Stonegate agrees to indemnify and hold the Company harmless from and against any
and all losses, claims, damages or liabilities (or actions, including
securityholder actions, in respect thereof) which

Placement Agency Agreement for - Cord Blood America Inc.11

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are finally judicially determined to have resulted primarily from the bad faith,
gross negligence or willful misconduct of Stonegate, and will reimburse the
Company for all reasonable expenses (including reasonable costs, expenses,
awards and counsel fees and/or judgments) as they are incurred by the Company in
connection with investigating, preparing for or defending any such action or
claim, whether or not in connection with pending or threatened litigation in
which the Company is a party.  In the event that the foregoing indemnity is
unavailable, then Stonegate shall contribute to amounts paid or payable by the
Company in respect of its losses, claims, damages and liabilities in such
proportion as appropriately reflects the relative benefits received by, and
fault of, the Company and Stonegate in connection with the matters as to which
such losses, claims, damages or liabilities relate, and other equitable
considerations.  The foregoing shall be in addition to any rights that the
Company may have at common law or otherwise and shall extend upon the same terms
to and inure to the benefit of any director, officer, employee, agent or
controlling person of the Company.  Stonegate hereby consents to personal
jurisdiction, service and venue in any court in which any claim, which is
subject to this agreement, is brought against the Company or any other person
entitled to indemnification or contribution under this subsection (b).

(c)

The obligations of the Parties under this Section 7 shall survive the
termination of this Agreement.

8.

NON-CIRCUMVENTION.

The Company hereby agrees that, for a period of one year from the end of the
Contract Period or other termination of this Agreement, the Company will not
enter into any agreement, transaction or arrangement with any of the
institutions (including their agents, principals and affiliates and the accounts
and funds which they manage or advise) which Stonegate has introduced, directly
or indirectly, to the Company pursuant to a direct meeting, or telephone call as
prospective purchasers of the Securities in the Placements (collectively, the
“Stonegate Contacts”), regardless of whether a transaction is consummated with
such prospective purchasers, unless the Company notifies Stonegate in writing of
the agreement, transaction or arrangement, and pays Stonegate a fee equal to the
Agency Fee plus all other compensation under Section 6 of this Agreement for
securities of the Company sold to Stonegate Contacts.

9.

GOVERNING LAW.  

THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
THE STATE OF TEXAS, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAWS PROVISIONS
THEREOF.

10.

ARBITRATION.

Stonegate and the Company will attempt to settle any claim or controversy
arising out of this Agreement through consultation and negotiation in good faith
and a spirit of mutual cooperation.  Any dispute which the parties cannot
resolve may then be submitted by either party to binding arbitration in Dallas,
Texas under the rules of the American Arbitration Association for resolution.
 Nothing in this paragraph will prevent either party from resorting to judicial
proceedings if (a) good faith efforts to resolve the dispute under these
procedures have been unsuccessful or (b) interim relief from a court is
necessary to prevent serious and irreparable injury.

11.

NO WAIVER.  

The failure or neglect of any party hereto to insist, in any one or more
instances, upon the strict performance of any of the terms or conditions of this
Agreement, or waiver by any party of strict performance of any of the terms or
conditions of this Agreement, shall not be construed as a waiver or
relinquishment in the future of such term or condition, but the same shall
continue in full force and effect.

12.

SUCCESSORS AND ASSIGNS.  

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The benefits of this Agreement shall inure to the benefit of the Parties, their
respective successors, assigns and representatives, and the obligations and
liabilities assumed in this Agreement by the Parties shall be binding upon their
respective successors and assigns.  This Agreement may not be assigned by either
Party without the express written consent of the other Party, which consent
shall not be unreasonably withheld.

13.

NOTICES.  

All notices and other communications required or permitted to be given under
this Agreement shall be in writing and shall be delivered personally or sent by
certified mail, return receipt requested, recognized overnight delivery service,
or facsimile (with copy by first class mail) as follows:

If to the Company:

Cord Blood America, Inc.
9000 W. Sunset Blvd., Suite 400

West Hollywood, CA  90069
Facsimile: ()

Attention: Matthew Schissler, CEO

If to Stonegate:

Stonegate Securities, Inc.
5940 Sherry Lane, Suite 410
Dallas, Texas  75225
Facsimile: (214) 987-1981
Attention: Scott Griffith, President

Either Party may change its address or facsimile number set forth above by
giving the other Party notice of such change in accordance with the provisions
of this Section 13. A notice shall be deemed given (a) if by personal delivery,
on the date of such delivery, (b) if by certified mail, on the date shown on the
applicable return receipt, (c) if by overnight delivery service, on the day
after the date delivered to the service, or (d) if by facsimile, on the date of
transmission.

14.

NATURE OF RELATIONSHIP.  

The Parties intend that Stonegate’s relationship to the Company and the
relationship of each director, officer, employee or agent of Stonegate to the
Company shall be that of an independent contractor and not as an employee of the
Company or an affiliate thereof.  Nothing contained in this Agreement shall
constitute or be construed to be or create a partnership or joint venture
between Stonegate and the Company or their respective successors or assigns.
 Neither Stonegate nor any director, officer, employee or agent of Stonegate
shall be considered to be an employee of the Company by virtue of the services
provided hereunder.

15.

MISCELLANEOUS

Stonegate’s obligations under this Agreement are subject to the following
general conditions:

(a)

All relevant terms, conditions, and circumstances relating to the Placements
will be reasonably satisfactory to Stonegate and its counsel.

(b)

Stonegate reserves the right to solicit the assistance of outside dealers
(“Dealers”) to assist in the offer and sale of the Placements; provided,
however, that any such Dealers agree in writing to be bound by the terms of the
applicable Placement. It is understood that Stonegate, in its sole discretion,
shall be entitled to pay over to any such Dealers any portion of the
compensation received by Stonegate

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hereunder.  The Company shall have no financial liability for any fees or
expenses of any such Dealers.

16.

CAPTIONS.  

The Section titles herein are for reference purposes only and do not control or
affect the meaning or interpretation of any term or provision hereof.

17.

AMENDMENTS.  

No alteration, amendment, change or addition hereto shall be binding or
effective unless the same is set forth in a writing signed by a duly authorized
representative of each Party.

18.

PARTIAL INVALIDITY.  

If it is finally determined that any term or provision hereof is invalid or
unenforceable, (a) the remaining terms and provisions hereof shall be
unimpaired, and (b) the invalid or unenforceable term or provision shall be
replaced by a term or provision that is valid and enforceable and that comes as
close as possible to expressing the intention of the invalid or unenforceable
term or provision.

19.

ENTIRE AGREEMENT.  

This Agreement embodies the entire agreement and understanding of the Parties
and supersedes any and all prior agreements, arrangements and understandings
relating to the matters provided for herein.

20.

COUNTERPARTS.  

This Agreement may be executed in one or more counterparts, each of which shall
be an original, but all of which together shall be considered one and the same
agreement.

[Remainder of Page Intentionally Left Blank]

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IN WITNESS WHEREOF, this Agreement has been executed as of the date first
written above by duly authorized representatives of the Company and Stonegate.

CORD BLOOD AMERICA, INC.

By:

Title:

STONEGATE SECURITIES, INC.

By:

Title:

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EXHIBIT A

Form of Representative’s Warrant

[See attached]

Placement Agency Agreement for - Cord Blood America Inc.11

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THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY OTHER
SECURITIES LAWS, HAVE BEEN TAKEN FOR INVESTMENT, AND MAY NOT BE SOLD OR
TRANSFERRED OR OFFERED FOR SALE OR TRANSFER UNLESS A REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND OTHER APPLICABLE SECURITIES LAWS WITH RESPECT TO
SUCH SECURITIES IS THEN IN EFFECT, OR IN THE OPINION OF COUNSEL (WHICH OPINION
IS REASONABLY SATISFACTORY TO THE ISSUER OF THESE SECURITIES), SUCH REGISTRATION
UNDER THE SECURITIES ACT AND OTHER APPLICABLE SECURITIES LAWS IS NOT REQUIRED.

Date: ______________

 

Warrant to Purchase

***______***

Shares

CORD BLOOD AMERICA, INC.

(Incorporated under the laws of the State of Florida)

REPRESENTATIVE’S WARRANT FOR THE PURCHASE OF SHARES OF

COMMON STOCK
Warrant Price: [price for the Securities sold in the placement]
$____ per share, subject to adjustment as provided below.

THIS IS TO CERTIFY that, for value received, Stonegate Securities, Inc.
(“Stonegate”) and its assigns (collectively, the “Holder”), is entitled to
purchase, subject to the terms and conditions hereinafter set forth, up to
***______*** shares of the common stock, par value $________ per share (“Common
Stock”), of Cord Blood America, Inc., a Florida corporation (the “Company”), and
to receive certificate(s) for the Common Stock so purchased.

1.

Exercise Period and Vesting.  The exercise period is the period beginning on the
date of this Warrant (the “Issuance Date”) and ending at 5:00 p.m., Dallas,
Texas time, five years from the Issuance Date (the “Exercise Period”).  This
Warrant is vested in full as of the Issuance Date and is immediately exercisable
by Holder.  This Warrant will terminate automatically and immediately upon the
expiration of the Exercise Period.

2.

Exercise of Warrant; Cashless Exercise.  This Warrant may be exercised, in whole
or in part, at any time and from time to time during the Exercise Period.  Such
exercise shall be accomplished by tender to the Company of the purchase price
set forth above as the warrant price (the “Warrant Price”), either (a) in cash,
by wire transfer or by certified check or bank cashier’s check, payable to the
order of the Company, or (b) by surrendering such number of shares of Common
Stock received upon exercise of this Warrant with a current market price equal
to the Warrant Price (a “Cashless Exercise”), together with presentation and
surrender to the Company of this Warrant with an executed subscription in
substantially the form attached hereto as Exhibit A (the “Subscription”). Upon
receipt of the foregoing, the Company will deliver to the Holder, as promptly as
possible, a certificate or certificates representing the shares of Common Stock
so purchased, registered in the name of the Holder or its transferee (as
permitted under Section 3 below).  With respect to any exercise of this Warrant,
the Holder will for all purposes be deemed to have become the holder of record
of the number of shares of Common Stock purchased hereunder on the date this
Warrant, a properly executed Subscription and payment of the Warrant Price is
received by the Company (the “Exercise Date”), irrespective of the date of
delivery of the certificate evidencing such shares, except that, if the date of
such receipt is a date on which the stock transfer books of the Company are
closed, such person will be deemed to have become the holder of such shares at
the close of business on the next succeeding date on which the stock transfer
books are open.  Fractional shares of Common Stock will not be issued upon the
exercise of this Warrant.  In lieu of any fractional shares that would have been
issued but for the immediately preceding sentence, the Holder will be entitled
to receive cash equal to the current market price of such fraction of a share of
Common Stock on the trading day immediately preceding the Exercise Date.  In the
event this Warrant is exercised in part, the Company shall issue a new Warrant
to the Holder covering the aggregate number of shares of Common Stock as to
which this Warrant remains exercisable for.

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If the Holder elects to conduct a Cashless Exercise, the Company shall cause to
be delivered to the Holder a certificate or certificates representing the number
of shares of Common Stock computed using the following formula:

X = Y (A-B)
A

Where:

X

=

the number of shares of Common Stock to be issued to Holder;

Y

=

the portion of the Warrant (in number of shares of Common Stock) being exercised
by Holder (at the date of such calculation);

A

=

the fair market value of one share of Common Stock on the Exercise Date (as
calculated below); and

B

=

Warrant Price (as adjusted to the date of such calculation).

For purposes of the foregoing calculation, “fair market value of one share of
Common Stock on the Exercise Date” shall mean:  (i) if the principal trading
market for such securities is a national or regional securities exchange, the
closing price on such exchange for the day immediately prior to such Exercise
Date; (ii) if sales prices for shares of Common Stock are reported by the Nasdaq
National Market System or Nasdaq Small Cap Market (or a similar system then in
use), the last reported sales price for the day immediately prior to such
Exercise Date; or (iii) if neither (i) nor (ii) above are applicable, and if bid
and ask prices for shares of Common Stock are reported in the over-the-counter
market by Nasdaq (or, if not so reported, by the National Quotation Bureau), the
average of the high bid and low ask prices so reported for the ten (10) trading
days immediately prior to such Exercise Date.  Additionally, in the case of (i)
or (ii) above, at the sole and exclusive election of Stonegate, in any of the
foregoing calculations of the “fair market value of one share of Common Stock on
the Exercise Date”, Stonegate may elect to use either:  (a) the closing price or
last reported sales price, as the case may be, for the day immediately prior to
the exercise date, OR (b) the arithmetic mean average of the closing prices or
last reported sales prices, as the case may be, over the last ten (10) business
days.  Stonegate’s election shall be used in calculating “the fair market value
of one share of Common Stock on the Exercise Date” in the above calculation.
 Notwithstanding (i), (ii), and (iii) above, if there is no reported closing
price, last reported sales price, or bid and ask prices, as the case may be, for
the period in question, then the current market price shall be determined as of
the latest ten (10) day period prior to such day for which such closing price,
last reported sales price, or bid and ask prices, as the case may be, are
available, unless such securities have not been traded on an exchange or in the
over-the-counter market for 30 or more days immediately prior to the day in
question, in which case the current market price shall be determined in good
faith by, and reflected in a formal resolution of, the Board of Directors of the
Company.  The Company acknowledges and agrees that this Warrant was issued on
the Issuance Date.

3.

Transferability and Exchange.

(a)

This Warrant, and the Common Stock issuable upon the exercise hereof, may not be
sold, transferred, pledged or hypothecated unless the Company shall have been
provided with an opinion of counsel, or other evidence reasonably satisfactory
to it, that such transfer is not in violation of the Securities Act, and any
applicable state securities laws.  Subject to the satisfaction of the aforesaid
condition, this Warrant and the underlying shares of Common Stock shall be
transferable from time to time by the Holder upon written notice to the Company.
 If this Warrant is transferred, in whole or in part, the Company shall, upon
surrender of this Warrant to the Company, deliver to each transferee a Warrant
evidencing the rights of such transferee to purchase the number of shares of
Common Stock that such transferee is entitled to purchase pursuant to such
transfer.  The Company may place a legend similar to the legend at the top of
this Warrant on any replacement Warrant and on each certificate representing
shares issuable upon exercise of this Warrant or any replacement Warrants.  Only
a registered Holder may enforce the provisions of this Warrant against the
Company.  A transferee of the original registered Holder becomes a registered
Holder only upon delivery to the Company of the original Warrant and an original
Assignment, substantially in the form set forth in Exhibit B attached hereto.

(b)

This Warrant is exchangeable upon its surrender by the Holder to the Company for
new Warrants of like tenor and date representing in the aggregate the right to
purchase the number of shares purchasable

Placement Agency Agreement for - Cord Blood America Inc.11 2

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hereunder, each of such new Warrants to represent the right to purchase such
number of shares as may be designated by the Holder at the time of such
surrender.

4.

Adjustments to Warrant Price and Number of Shares Subject to Warrant.  The
Warrant Price and the number of shares of Common Stock purchasable upon the
exercise of this Warrant are subject to adjustment from time to time upon the
occurrence of any of the events specified in this Section 4.  For the purpose of
this Section 4, “Common Stock” means shares now or hereafter authorized of any
class of common stock of the Company and any other stock of the Company, however
designated, that has the right to participate in any distribution of the assets
or earnings of the Company without limit as to per share amount (excluding, and
subject to any prior rights of, any class or series of preferred stock).

(a)

In case the Company shall (i) pay a dividend or make a distribution in shares of
Common Stock or other securities, (ii) subdivide its outstanding shares of
Common Stock into a greater number of shares, (iii) combine its outstanding
shares of Common Stock into a smaller number of shares, or (iv) issue by
reclassification of its shares of Common Stock other securities of the Company,
then the Warrant Price in effect at the time of the record date for such
dividend or on the effective date of such subdivision, combination or
reclassification, and/or the number and kind of securities issuable on such
date, shall be proportionately adjusted so that the Holder of any Warrant
thereafter exercised shall be entitled to receive the aggregate number and kind
of shares of Common Stock (or such other securities other than Common Stock) of
the Company, at the same aggregate Warrant Price, that, if such Warrant had been
exercised immediately prior to such date, the Holder would have owned upon such
exercise and been entitled to receive by virtue of such dividend, distribution,
subdivision, combination or reclassification.  Such adjustment shall be made
successively whenever any event listed above shall occur.

(b)

In case the Company shall fix a record date for the making of a distribution to
all holders of Common Stock (including any such distribution made in connection
with a consolidation or merger in which the Company is the surviving
corporation) of cash, evidences of indebtedness or assets, or subscription
rights or warrants, the Warrant Price to be in effect after such record date
shall be determined by multiplying the Warrant Price in effect immediately prior
to such record date by a fraction, the numerator of which shall be the current
market price per share of Common Stock on such record date, less the amount of
cash so to be distributed (or the fair market value (as determined in good faith
by, and reflected in a formal resolution of, the Board of Directors of the
Company) of the portion of the assets or evidences of indebtedness so to be
distributed, or of such subscription rights or warrants, applicable to one share
of Common Stock, and the denominator of which shall be such current market price
per share of Common Stock.  Such adjustment shall be made successively whenever
such a record date is fixed; and in the event that such distribution is not so
made, the Warrant Price shall again be adjusted to be the Warrant Price which
would then be in effect if such record date had not been fixed.

(c)

For the purpose of any computation under any subsection of this Section 4, the
“current market price” per share of Common Stock on any date shall be the per
share price of the Common Stock on the trading day immediately prior to the
event requiring an adjustment hereunder and shall be:  (i) if the principal
trading market for such securities is a national or regional securities
exchange, the closing price on such exchange on such day; or (ii) if sales
prices for shares of Common Stock are reported by the Nasdaq National Market
System or Small Cap Market System (or a similar system then in use), the last
reported sales price so reported on such day; or (iii) if neither (i) nor (ii)
above are applicable, and if bid and ask prices for shares of Common Stock are
reported in the over-the-counter market by Nasdaq (or, if not so reported, by
the National Quotation Bureau), the average of the high bid and low ask prices
so reported on such day.  Notwithstanding the foregoing, if there is no reported
closing price, last reported sales price, or bid and ask prices, as the case may
be, for the day in question, then the current market price shall be determined
as of the latest date prior to such day for which such closing price, last
reported sales price, or bid and ask prices, as the case may be, are available,
unless such securities have not been traded on an exchange or in the
over-the-counter market for 30 or more days immediately prior to the day in
question, in which case the current market price shall be determined in good
faith by, and reflected in a formal resolution of, the Board of Directors of the
Company.

(d)

Notwithstanding any provision herein to the contrary, no adjustment in the
Warrant Price shall be required unless such adjustment would require an increase
or decrease of at least 1% in the Warrant Price; provided, however, that any
adjustments which by reason of this subsection (d) are not required to be made
shall be carried forward

Placement Agency Agreement for - Cord Blood America Inc.11 3

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and taken into account in any subsequent adjustment.  All calculations under
this Section 4 shall be made to the nearest cent or the nearest one-hundredth of
a share, as the case may be.

(e)

In the event that at any time, as a result of an adjustment made pursuant to
subsection (a) above, the Holder of any Warrant thereafter exercised shall
become entitled to receive any shares of capital stock of the Company other than
shares of Common Stock, thereafter the number of such other shares so receivable
upon exercise of any Warrant shall be subject to adjustment from time to time in
a manner and on terms as nearly equivalent as practicable to the provisions with
respect to the shares of Common Stock contained in this Section 4, and the other
provisions of this Warrant shall apply on like terms to any such other shares.

(f)

If the Company merges or consolidates into or with another corporation or
entity, or if another corporation or entity merges into or with the Company
(excluding such a merger in which the Company is the surviving or continuing
corporation and which does not result in any reclassification, conversion,
exchange, or cancellation of the outstanding shares of Common Stock), or if all
or substantially all of the assets or business of the Company are sold or
transferred to another corporation, entity, or person, then, as a condition to
such consolidation, merger, or sale (a “Transaction”), lawful and adequate
provision shall be made whereby the Holder shall have the right from and after
the Transaction to receive, upon exercise of this Warrant and upon the terms and
conditions specified herein and in lieu of the shares of the Common Stock that
would have been issuable if this Warrant had been exercised immediately before
the Transaction, such shares of stock, securities, or assets as the Holder would
have owned immediately after the Transaction if the Holder had exercised this
Warrant immediately before the effective date of the Transaction.

5.

Registration Rights.  The Company hereby grants to Holder, with respect to the
shares of Common Stock underlying this Warrant, registration rights identical to
those that are granted to Purchasers in the Placement (as such terms are defined
in that certain Placement Agency Agreement, dated as of __________, by and
between the Company and Stonegate); it being specifically agreed and understood
that the shares of Common Stock underlying this Warrant will be included in any
registration statement filed by the Company which includes shares of Common
Stock, or shares of Common Stock underlying any securities, issued to Purchasers
in the Placement.

6.

Reservation of Shares.  The Company agrees at all times to reserve and hold
available out of its authorized but unissued shares of Common Stock the number
of shares of Common Stock issuable upon the full exercise of this Warrant.  The
Company further covenants and agrees that all shares of Common Stock that may be
delivered upon the exercise of this Warrant will, upon delivery, be fully paid
and nonassessable and free from all taxes, liens and charges with respect to the
purchase thereof hereunder.

7.

Notices to Holder.  Upon any adjustment of the Warrant Price (or number of
shares of Common Stock purchasable upon the exercise of this Warrant) pursuant
to Section 4, the Company shall promptly thereafter cause to be given to the
Holder written notice of such adjustment.  Such notice shall include the Warrant
Price (and/or the number of shares of Common Stock purchasable upon the exercise
of this Warrant) after such adjustment, and shall set forth in reasonable detail
the Company’s method of calculation and the facts upon which such calculations
were based.  Where appropriate, such notice shall be given in advance and
included as a part of any notice required to be given under the other provisions
of this Section 7.

In the event of (a) any fixing by the Company of a record date with respect to
the holders of any class of securities of the Company for the purpose of
determining which of such holders are entitled to dividends or other
distributions, or any rights to subscribe for, purchase or otherwise acquire any
shares of capital stock of any class or any other securities or property, or to
receive any other right, (b) any capital reorganization of the Company, or
reclassification or recapitalization of the capital stock of the Company or any
transfer of all or substantially all of the assets or business of the Company
to, or consolidation or merger of the Company with or into, any other entity or
person, or (c) any voluntary or involuntary dissolution or winding up of the
Company, then and in each such event the Company will give the Holder a written
notice specifying, as the case may be (i) the record date for the purpose of
such dividend, distribution, or right, and stating the amount and character of
such dividend, distribution, or right; or (ii) the date on which any such
reorganization, reclassification, recapitalization, transfer, consolidation,
merger, conveyance, dissolution, liquidation, or winding up is to take place and
the time, if any is to be fixed, as of which the holders of record of Common
Stock (or such capital stock or securities receivable upon the exercise of this
Warrant) shall be entitled to

Placement Agency Agreement for - Cord Blood America Inc.11 4

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exchange their shares of Common Stock (or such other stock securities) for
securities or other property deliverable upon such event.  Any such notice shall
be given at least 10 days prior to the earliest date therein specified.

8.

No Rights as a Stockholder.  This Warrant does not entitle the Holder to any
voting rights or other rights as a stockholder of the Company, nor to any other
rights whatsoever except the rights herein set forth.

9.

Additional Covenants of the Company.  For so long as the Common Stock is listed
for trading on any regional or national securities exchange or Nasdaq (National
Market or Small Cap System), the Company shall, upon issuance of any shares for
which this Warrant is exercisable, at its expense, promptly obtain and maintain
the listing of such shares.  The Company shall also comply with the reporting
requirements of Sections 13 and 15(d) of the Exchange Act for so long as and to
the extent that such requirements apply to the Company.

The Company shall not, by amendment of its Articles of Incorporation or through
any reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities, or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of this Warrant.
 Without limiting the generality of the foregoing, the Company (a) will at all
times reserve and keep available, solely for issuance and delivery upon exercise
of this Warrant, shares of Common Stock issuable from time to time upon exercise
of this Warrant, (b) will not increase the par value of any shares of capital
stock receivable upon exercise of this Warrant above the amount payable therefor
upon such exercise, and (c) will take all such actions as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable stock.

10.

Successors and Assigns.  This Agreement shall be binding upon and inure to the
benefit of the Company, the Holder and their respective successors and permitted
assigns.

11.

Notices.  The Company agrees to maintain a ledger of the ownership of this
Warrant (the “Ledger”).  Any notice hereunder shall be given by registered or
certified mail if to the Company, at its principal executive office and, if to
the Holder, to its address shown in the Ledger of the Company; provided,
however, that the Holder may at any time on three (3) days written notice to the
Company designate or substitute another address where notice is to be given.
 Notice shall be deemed given and received after a certified or registered
letter, properly addressed with postage prepaid, is deposited in the U.S. mail.

12.

Severability.  Every provision of this Warrant is intended to be severable. If
any term or provision hereof is illegal or invalid for any reason whatsoever,
such illegality or invalidity shall not affect the remainder of this Warrant.

13.

Governing Law.  This Warrant shall be governed by and construed in accordance
with the laws of the State of Texas without giving effect to the principles of
choice of laws thereof.

14.

Attorneys’ Fees.  In any action or proceeding brought to enforce any provision
of this Warrant, the prevailing party shall be entitled to recover reasonable
attorneys’ fees in addition to its costs and expenses and any other available
remedy.

15.

Entire Agreement.  This Warrant (including the Exhibits attached hereto)
constitutes the entire understanding between the Company and the Holder with
respect to the subject matter hereof, and supersedes all prior negotiations,
discussions, agreements and understandings relating to such subject matter.

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
duly authorized officer as of the date first set forth above.

CORD BLOOD AMERICA, INC.

By:

Title:

Placement Agency Agreement for - Cord Blood America Inc.11 5

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Exhibit A

SUBSCRIPTION FORM

(To be Executed by the Holder to Exercise the Rights To Purchase Common Stock
Evidenced by the Within Warrant)

The undersigned hereby irrevocably subscribes for _______ shares (the “Stock”)
of the Common Stock of Cord Blood America, Inc. (the “Company”) pursuant to and
in accordance with the terms and conditions of the attached Warrant (the
“Warrant”), and hereby makes payment of $_______ therefor by [tendering cash,
wire transferring or delivering a certified check or bank cashier’s check,
payable to the order of the Company] [surrendering _______ shares of Common
Stock received upon exercise of the Warrant, which shares have a current market
price equal to such payment as required in Section 2 of the Warrant].  The
undersigned requests that a certificate for the Stock be issued in the name of
the undersigned and be delivered to the undersigned at the address stated below.
 If the Stock is not all of the shares purchasable pursuant to the Warrant, the
undersigned requests that a new Warrant of like tenor for the balance of the
remaining shares purchasable thereunder be delivered to the undersigned at the
address stated below.

In connection with the issuance of the Stock, I hereby represent to the Company
that I am acquiring the Stock for my own account for investment and not with a
view to, or for resale in connection with, a distribution of the shares within
the meaning of the Securities Act of 1933, as amended (the “Securities Act”).

I understand that because the Stock has not been registered under the Securities
Act, I must hold such Stock indefinitely unless the Stock is subsequently
registered and qualified under the Securities Act or is exempt from such
registration and qualification. I shall make no transfer or disposition of the
Stock unless (a) such transfer or disposition can be made without registration
under the Securities Act by reason of a specific exemption from such
registration and such qualification, or (b) a registration statement has been
filed pursuant to the Securities Act and has been declared effective with
respect to such disposition.  I agree that each certificate representing the
Stock delivered to me shall bear substantially the same as set forth on the
front page of the Warrant.

I agree that each certificate representing the Stock delivered to me shall bear
substantially the same legend as set forth on the front page of the Warrant.

I further agree that the Company may place stop orders on the certificates
evidencing the Stock with the transfer agent, if any, to the same effect as the
above legend.  The legend and stop transfer notice referred to above shall be
removed only upon my furnishing to the Company of an opinion of counsel
(reasonably satisfactory to the Company) to the effect that such legend may be
removed.

Date:

Signed:

Address:

Placement Agency Agreement for - Cord Blood America Inc.11

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Exhibit B

ASSIGNMENT

(To be Executed by the Holder to Effect Transfer of the Attached Warrant)

For Value Received __________________________ hereby sells, assigns and
transfers to _________________________ the Warrant attached hereto and the
rights represented thereby to purchase _________ shares of Common Stock in
accordance with the terms and conditions hereof, and does hereby irrevocably
constitute and appoint _________________________ as attorney to transfer such
Warrant on the books of the Company with full power of substitution.

Dated:________________________

Signed: _____________________________

Please print or typewrite
name and address of
assignee:

 

Please insert Social Security
or other Tax Identification
Number of Assignee:

 

 

 

 

 

 

 

 

 

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APPENDIX I

Registration Rights

1.

Definitions.

(a)

As used in this Appendix I, the following terms shall have the meanings:

1.

“Affiliate,” of any specified Person means any other Person who directly, or
indirectly through one or more intermediaries, is in control of, is controlled
by, or is under common control with, such specified Person.  For purposes of
this definition, control of a Person means the power, directly or indirectly, to
direct or cause the direction of the management and policies of such Person
whether by contract, securities ownership or otherwise; and the terms
“controlling” and “controlled” have the respective meanings correlative to the
foregoing.

2.

“Commission” means the Securities and Exchange Commission.

3.

“Company” shall mean Cord Blood America, Inc.

4.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission thereunder, or any similar successor
statute.

5.

“Holder” means Stonegate Securities, Inc. and any permitted transferee or
assignee of Registrable Securities who agrees to become bound by all of the
terms and provisions of this Appendix I.

6.

“Person” means any individual, partnership, corporation, limited liability
company, joint stock company, association, trust, unincorporated organization,
or a government agency or political subdivision thereof.

7.

“Placement” means any offering of securities of the Company pursuant to which
Holder serves as a placement agent or underwriter, whether on a best efforts
basis or otherwise.   

8.

“Prospectus” means the prospectus (including any preliminary prospectus and/or
any final prospectus filed pursuant to Rule 424(b) under the Securities Act and
any prospectus that discloses information previously omitted from a prospectus
filed as part of an effective registration statement in reliance on Rule 430A
under the Securities Act) included in the Registration Statement, as amended or
supplemented by any prospectus supplement with respect to the terms of the
offering of any portion of the Registrable Securities covered by the
Registration Statement and by all other amendments and supplements to such
prospectus, including all material incorporated by reference in such prospectus
and all documents filed after the date of such prospectus by the Company under
the Exchange Act and incorporated by reference therein.

9.

“Public Offering” means an offer registered with the Commission and the
appropriate state securities commissions by the Company of its Common Stock and
made pursuant to the Securities Act.

10.

“Registrable Securities” means the shares of common stock issued to Stonegate
Securities, Inc. or its designated affiliates pursuant to the terms of the
Placement Agency Agreement; provided, however, a share of common stock shall
cease to be a Registrable Security for purposes of this Appendix I when it no
longer is a Restricted Security.

11.

“Registration Statement” means a registration statement of the Company filed on
Form S-3 under the Securities Act providing for the registration of, and the
sale on a continuous or delayed basis by the holders of, all of the Registrable
Securities pursuant to Rule 415 under the Securities Act, including the
Prospectus contained therein and forming a part thereof, any amendments to such
registration statement and supplements to such Prospectus, and all exhibits and
other material incorporated by reference in such registration statement and
Prospectus.  In the event that Form S-3 is unavailable for such a registration,
the Company shall use such other form as is available for such a registration.

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12.

“Restricted Security” means any share of common stock except any that (i) have
been registered pursuant to an effective registration statement under the
Securities Act and sold in a manner contemplated by the prospectus included in
such registration statement, (ii) have been transferred in compliance with the
resale provisions of Rule 144 under the Securities Act (or any successor
provision thereto) or is transferable pursuant to paragraph (k) of Rule 144
under the Securities Act (or any successor provision thereto), or (iii)
otherwise has been transferred and are not subject to transfer restrictions
under the Securities Act.

13.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations of the Commission thereunder, or any similar successor statute.

(b)

All capitalized terms used and not defined herein have the respective meaning
assigned to them in the Subscription Agreement.

2.

Registration.

(a)

Initial Registration Statement.  The Company hereby grants to Holder, with
respect to the Registrable Securities, registration rights identical to those
granted to the purchasers in the Placement and will include the Registrable
Securities in any registration statement filed for the purchasers in the
Placement.  The Company agrees to keep such Registration Statement effective
until the earlier of: (i) the passage of two years from the effective date of
such Registration Statement; or (ii) the date on which all Registrable
Securities may be resold by the Holders by reason of Rule 144(k) under the
Securities Act or any other rule of similar effect.

(b)

Registration Default.  If the Registration Statement covering the Registrable
Securities required to be filed by the Company pursuant to Section 2(a) is not
(i) filed with the Commission by the Filing Deadline, or (ii) declared effective
by the Commission by the Effectiveness Deadline (each of the Filing Deadline and
Effectiveness Deadline, an “Initial Date”), then the Company shall make the
payments to the Holders of the Registrable Securities as provided in the next
sentence as liquidated damages and not as a penalty.  The amount to be paid by
the Company to the Holders shall be determined as of each Computation Date (as
defined below) and, as applicable, the actual filing and effectiveness dates of
the Registration Statement, and such amount shall be equal to 2.5% (the
“Liquidated Damage Rate”) of the Purchase Price (as defined in the Subscription
Agreement) for the period from the Initial Date to the first Computation Date,
and for each 30-day period of any subsequent Computation Dates thereafter,
calculated on a pro rata basis to the date on which the Registration Statement
is filed with (in the event of an Initial Date pursuant to clause (i) above) or
declared effective by (in the event of an Initial Date pursuant to clause (ii)
above) the Commission (the “Periodic Amount”).  The full Periodic Amount shall
be paid by the Company to the Holders, pro rata, by wire transfer of immediately
available funds within three days after each Computation Date and, as
applicable, the actual filing and effectiveness dates of the Registration
Statement.

As used in this Section 2(b), “Computation Date” means the date which is 30 days
after the Initial Date and, if the Registration Statement to be filed by the
Company pursuant to Section 2(a) has not theretofore been filed with the
Commission or declared effective by the Commission, as the case may be, each
date which is 30 days after the previous Computation Date until such
Registration Statement is so filed or declared effective, as the case may be.
 Notwithstanding the above, if the Registration Statement covering the
Registrable Securities required to be filed by the Company pursuant to Section
2(a) hereof is not filed with the Commission by the Filing Deadline, the Company
shall be in default of the terms of this Appendix I, and the Holders shall be
entitled to damages as set forth above.

(c)

Piggyback Registration Rights.  

(i)

Whenever the Company proposes to register any of its Common Shares or any other
common shares of the Company under the Securities Act (other than a registration
(A) on Form S-8 or S-4 or any successor or similar forms, (B) relating to Common
Shares or any other common shares of the Company issuable upon exercise of
employee or consultant share options or in connection with any employee benefit
or similar plan of the Company or (C) in connection with a direct or indirect
acquisition by the Company of another Person or any transaction with respect to

4

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which Rule 145 (or any successor provision) under the Securities Act applies),
whether or not for sale for its own account, it will each such time, give prompt
written notice at least 20 days prior to the anticipated filing date of the
registration statement relating to such registration to the Holders, which
notice shall set forth such Holders’ rights under this Section 2(c) and shall
offer the Holders the opportunity to include in such registration statement such
number of Registrable Securities as the Holders may request.  Upon the written
request of a Holder made within 10 days after the receipt of notice from the
Company (which request shall specify the number of Registrable Securities
intended to be disposed of by such Holders), the Company will use its best
efforts to effect the registration under the Securities Act of all Registrable
Securities that the Company has been so requested to register by the Holders, to
the extent requisite to permit the disposition of the Registrable Securities to
be so registered; provided, however, that (A) if such registration involves a
Public Offering, the Holders must sell their Registrable Securities to the
underwriters on the same terms and conditions as apply to the Company and (B)
if, at any time after giving written notice of its intention to register any
Registrable Securities pursuant to this Section 2(c) and prior to the effective
date of the registration statement filed in connection with such registration,
the Company shall determine for any reason not to register such Registrable
Securities, the Company shall give written notice to the Holders and, thereupon,
shall be relieved of its obligation to register any Registrable Securities in
connection with such registration.  The Company’s obligations under this Section
2(c) shall terminate on the date that the registration statement to be filed in
accordance with Section 2(a) is declared effective by the Commission.

(ii)

If a registration pursuant to this Section 2(c) involves a Public Offering and
the managing underwriter thereof advises the Company that, in its view, the
number of Common Shares, if any, or other Common Shares that the Company and the
Holders intend to include in such registration exceeds the largest number of
Common Shares (including any other Common Shares or warrants of the Company)
that can be sold without having an adverse effect on such Public Offering (the
“Maximum Offering Size”), the Company will include in such registration only
that number of Common Shares which does not exceed the Maximum Offering Size, in
the following order of priorities: (1) first, all securities the Company
proposes to sell for its own account, (2) second, up to the full number of
securities proposed to be registered for the account of the holders of
securities entitled to inclusion of their securities in the Registration
Statement by reason of demand registration rights, and (3) third, the securities
requested to be registered by other holders of securities entitled to
participate in the registration, drawn from them pro-rata based on the number of
shares each has requested to be included in such registration and the Holders
pursuant to this Appendix I.

If as a result of the proration provisions of this Section 2(c)(ii), the Holders
are not entitled to include all such Registrable Securities in such
registration, such Holders may elect to withdraw their request to include any
Registrable Securities in such registration.  

Notwithstanding the foregoing, the Company shall have no obligations under this
Section 2(c) hereof at any time that such Registrable Securities are the subject
of an effective registration statement.  

3.

Obligations of the Company.  In connection with the registration of the
Registrable Securities, the Company shall use its reasonable best efforts to:

(a)

Subject to the provisions of Section 3(r) hereof, promptly (i) prepare and file
with the Commission such amendments (including post-effective amendments) to the
Registration Statement and supplements to the Prospectus as may be necessary to
keep the Registration Statement continuously effective and in compliance with
the provisions of the Securities Act applicable thereto so as to permit the
Prospectus forming part thereof to be current and useable by Holders for resales
of the Registrable Securities for a period of two years from the date the
Registration Statement is first declared effective by the Commission (the
“Effective Time”) or such shorter period that will terminate when all the
Registrable Securities covered by the Registration Statement have been sold
pursuant thereto in accordance with the plan of distribution provided in the
Prospectus, transferred pursuant to Rule 144 under the Securities Act or
otherwise transferred in a manner that results in the delivery of new securities
not subject to transfer restrictions under the Securities Act (the “Registration
Period”) and (ii) take all lawful action such that each of (A) the Registration
Statement and any amendment thereto does not, when it becomes effective, contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, not misleading
and (B) the Prospectus forming part of the Registration Statement, and any
amendment or supplement

5

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thereto, does not at any time during the Registration Period include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.  Notwithstanding the
foregoing, the Company’s obligations hereunder shall terminate as to any Holder
at such time as that Holder’s Registrable Securities can be sold under Rule
144(k);

(b)

During the Registration Period, comply with the provisions of the Securities Act
with respect to the Registrable Securities of the Company covered by the
Registration Statement until such time as all of such Registrable Securities
have been disposed of in accordance with the intended methods of disposition by
the Holders as set forth in the Prospectus forming part of the Registration
Statement;

(c)

(i) Prior to the filing with the Commission of any Registration Statement
(including any amendments thereto) and the distribution or delivery of any
Prospectus (including any supplements thereto), provide draft copies thereof
(including a copy of the accountant’s consent letter to be included in the
filing) to Stonegate Securities, Inc. (“Stonegate”) and reflect in such
documents all such comments as Stonegate reasonably may propose; and (ii)
furnish to each Holder whose Registrable Securities are included in the
Registration Statement, (A) promptly after the same is prepared and publicly
distributed, filed with the Commission, or received by the Company, one copy of
the Registration Statement, each Prospectus, and each amendment or supplement
thereto, and (B) such number of copies of the Prospectus and all amendments and
supplements thereto and such other documents, as such Holder may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such Holder;

(d)

(i) Register or qualify the Registrable Securities covered by the Registration
Statement under such securities or “Blue Sky” laws of all jurisdictions
requiring Blue Sky registration or qualification, (ii) prepare and file in such
jurisdictions such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof at all times during the Registration Period,
(iii) take all such other lawful actions as may be necessary to maintain such
registrations and qualifications in effect at all times during the Registration
Period, and (iv) take all such other lawful actions reasonably necessary or
advisable to qualify the Registrable Securities for sale in such jurisdictions;
provided, however, that the Company shall not be required in connection
therewith or as a condition thereto to (A) qualify to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 3(d), (B) subject itself to general taxation in any such jurisdiction or
(C) file a general consent to service of process in any such jurisdiction;

(e)

As promptly as practicable after becoming aware of such event, notify each
Holder of the occurrence of any event, as a result of which the Prospectus
included in the Registration Statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and promptly prepare
an amendment to the Registration Statement and supplement to the Prospectus to
correct such untrue statement or omission, and deliver a number of copies of
such supplement and amendment to each Holder as such Holder may reasonably
request;

(f)

Notify each Holder who holds Registrable Securities being sold (or, in the event
of an underwritten offering, the managing underwriters) of the issuance by the
Commission of any stop order or other suspension of the effectiveness of the
Registration Statement on the date of receipt of any such stop order or other
suspension, and take all lawful action to effect the withdrawal, recession or
removal of such stop order or other suspension;

(g)

Cause all the Registrable Securities covered by the Registration Statement to be
listed not later than the date that the Registration Statement is declared
effective by the Commission on the principal national securities exchange, or
included in an inter-dealer quotation system of a registered national securities
association, on or in which securities of the same class or series issued by the
Company are then listed or included;

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(h)

Maintain a transfer agent and registrar, which may be a single entity, for the
Registrable Securities not later than the effective date of the Registration
Statement;

(i)

Cooperate with the Holders who hold Registrable Securities being offered to
facilitate the timely preparation and delivery of certificates for the
Registrable Securities to be offered pursuant to the registration statement and
enable such certificates for the Registrable Securities to be in such
denominations or amounts, as the case may be, as the Holders reasonably may
request and registered in such names as the Holder may request; and, within
three business days after a registration statement which includes Registrable
Securities is declared effective by the Commission, deliver and cause legal
counsel selected by the Company to deliver to the transfer agent for the
Registrable Securities (with copies to the Holders whose Registrable Securities
are included in such registration statement) an appropriate instruction and, to
the extent necessary, an opinion of such counsel;

(j)

Take all such other lawful actions reasonably necessary to expedite and
facilitate the disposition by the Holders of their Registrable Securities in
accordance with the intended methods therefor provided in the Prospectus which
are customary under the circumstances;

(k)

Make generally available to its security holders as soon as practicable, but in
any event not later than three (3) months after (i) the effective date (as
defined in Rule 158(c) under the Securities Act) of the Registration Statement,
and (ii) the effective date of each post-effective amendment to the Registration
Statement, as the case may be, an earnings statement of the Company and its
subsidiaries complying with Section 11(a) of the Securities Act and the rules
and regulations of the Commission thereunder (including, at the option of the
Company, Rule 158);

(l)

In the event of an underwritten offering, promptly include or incorporate in a
Prospectus supplement or post-effective amendment to the Registration Statement
such information as the managers reasonably agree should be included therein and
to which the Company does not reasonably object and make all required filings of
such Prospectus supplement or post-effective amendment as soon as practicable
after it is notified of the matters to be included or incorporated in such
Prospectus supplement or post-effective amendment;

(m)

In connection with any underwritten offering, make such representations and
warranties to the Holders participating in such underwritten offering and to the
managers, in form, substance and scope as are customarily made by the Company to
underwriters in secondary underwritten offerings;

(n)

In connection with any underwritten offering, obtain opinions of counsel to the
Company (which counsel and opinions (in form, scope and substance) shall be
reasonably satisfactory to the managers) addressed to the underwriters, covering
such matters as are customarily covered in opinions requested in secondary
underwritten offerings (it being agreed that the matters to be covered by such
opinions shall include, without limitation, as of the date of the opinion and as
of the date the Registration Statement is first declared effective or most
recent post- effective amendment thereto, as the case may be, the absence from
the Registration Statement and the Prospectus, including any documents
incorporated by reference therein, of an untrue statement of a material fact or
the omission of a material fact required to be stated therein or necessary to
make the statements therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading, subject to customary
limitations);

(o)

In connection with any underwritten offering, obtain “cold comfort” letters and
updates thereof from the independent public accountants of the Company (and, if
necessary, from the independent public accountants of any subsidiary of the
Company or of any business acquired by the Company, in each case for which
financial statements and financial data are, or are required to be, included in
the Registration Statement), addressed to each underwriter participating in such
underwritten offering (if such underwriter has provided such letter,
representations or documentation, if any, required for such

7

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cold comfort letter to be so addressed), in customary form and covering matters
of the type customarily covered in “cold comfort” letters in connection with
secondary underwritten offerings;

(p)

In connection with any underwritten offering, deliver such documents and
certificates as may be reasonably required by the managers, if any; and

(q)

In connection with any underwritten offering, in the event that any
broker-dealer registered under the Exchange Act shall be an “Affiliate” (as
defined in Rule 2729(b)(1) of the rules and regulations of the National
Association of Securities Dealers, Inc. (the “NASD Rules”) (or any successor
provision thereto)) of the Company or has a “conflict of interest” (as defined
in Rule 2720(b)(7) of the NASD Rules (or any successor provision thereto)) and
such broker-dealer shall underwrite, participate as a member of an underwriting
syndicate or selling group or assist in the distribution of any Registrable
Securities covered by the Registration Statement, whether as a holder of such
Registrable Securities or as an underwriter, a placement or sales agent or a
broker or dealer in respect thereof, or otherwise, the Company shall assist such
broker-dealer in complying with the requirements of the NASD Rules, including,
without limitation, by (A) engaging a “qualified independent underwriter” (as
defined in Rule 2720(b)(15) of the NASD Rules (or any successor provision
thereto)) to participate in the preparation of the Registration Statement
relating to such Registrable Securities, to exercise usual standards of due
diligence in respect thereof and to recommend the public offering price of such
Registrable Securities, (B) indemnifying such qualified independent underwriter
to the extent of the indemnification of underwriters provided in Section 6
hereof, and (C) providing such information to such broker-dealer as may be
required in order for such broker-dealer to comply with the requirements of the
NASD Rules.

(r)

Notwithstanding anything to the contrary in Section 3, at any time after the
Registration Statement has been declared effective, the Company may delay the
disclosure of material non-public information concerning the Company, the
disclosure of which at the time is not, in the good faith opinion of the Company
and its counsel, in the best interest of the Company (a “Grace Period”);
provided, that the Company shall promptly (i) notify the Holders in writing of
the existence of material non-public information giving rise to a Grace Period
and the date on which the Grace Period will begin, and (ii) notify the Holders
in writing in advance of, or on the same date on which, the Grace Period ends;
and, provided further, that during any consecutive 365 day period, there shall
be only two Grace Periods, such Grace Periods in total not to exceed 45 days.
 For purposes of determining the length of a Grace Period above, the Grace
Period shall begin on and include the date the Holders receive the notice
referred to in clause (i) and shall end on and include the date specified as the
Grace Period ending date in the notice referred to in clause (ii).  If at any
time after the Registration Statement has been declared effective, the Company
delays disclosure of material non-public information concerning the Company,
other than during a permitted Grace Period as described above, the Company shall
make payments to the Holders as provided in the next sentence as liquidated
damages intended by the parties to compensate the Holders in part for the
incremental costs and investment risks associated with holding the Registrable
Securities as restricted securities and not as a penalty.  The amount of
payments shall be calculated at the Liquidated Damage Rate of the Purchase Price
in accordance with the provisions of Section 2(b) (including its provision of a
minimum amount of $34,000), and the timing of payments shall also be determined
in accordance with Section 2(b).  For the purposes of such calculations and
determinations of the amount and timing of payments: (i) the Initial Date shall
mean the first date that the Company delays disclosure of material non-public
information concerning the Company other than during a permitted Grace Period
and (ii) the Computation Date shall mean the date that is 30 days after the
Initial Date and each date that is 30 days after the previous Computation Date
until such period of delay has ceased and the Company has provided notice to the
Holders of the end of such period in accordance with the provisions of this
section above.  Nothing herein shall limit the rights of any Holder to pursue
actual damages for the Holder’s inability to sell any of the Registrable
Securities into the public market for any reason described in this section.

Notwithstanding the foregoing, the Company shall have no obligations under
Section 3(l) through (q) unless it is effecting an underwritten offering
pursuant to Section 2(c).

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4.

Obligations of the Holders.  In connection with the registration of the
Registrable Securities, the Holders shall have the following obligations, which
obligations shall be several and not joint:

(a)

Prior to the first anticipated filing date of the Registration Statement under
Section 2(a) hereof, the Company shall provide the Holders with a draft of the
Registration Statement, including such information about the Holder as has been
provided in the  Questionnaire completed by the Holder, together with whatever
confirmations, certificates or consents as may be reasonably requested by the
Company.  In connection with any other Registration Statement including the
Holders, it shall be a condition precedent to the obligations of the Company to
complete the registration pursuant to this Appendix I with respect to the
Registrable Securities of a particular Holder that such Holder shall furnish to
the Company such information regarding itself, the Registrable Securities held
by it and the intended method of disposition of the Registrable Securities held
by it as shall be reasonably required to effect the registration of such
Registrable Securities and shall execute such documents in connection with such
registration as the Company may reasonably request.  At least ten business days
prior to the first anticipated filing date of the Registration Statement, the
Company shall notify each Holder and its counsel, whether in-house or otherwise
(“Counsel”) of the information the Company requires from each such Holder (the
“Requested Information”) if such Holder elects to have any of its Registrable
Securities included in the Registration Statement.  If at least four business
days prior to the anticipated filing date the Company has not received the
Requested Information from a Holder (a “Non-Responsive Holder”) or its Counsel,
then the Company shall send such Non-Responsive Holder and its Counsel a
reminder of such information request.  If at least two business days prior to
the anticipated filing date the Company still has not received the Requested
Information from such Non-Responsive Holder or its Counsel, then the Company may
file the Registration Statement without including Registrable Securities of such
Non-Responsive Holder.  However, promptly upon receipt of the Requested
Information, and at the expense of the Non-Responsive Holder, the Company shall
file such amendment(s) to the Registration Statement as may be necessary to
include therein the Registrable Securities of the Non-Responsive Holder.

(b)

Each Holder by its acceptance of the Registrable Securities agrees to cooperate
with the Company in connection with the preparation and filing of the
Registration Statement hereunder, unless such Holder has notified the Company in
writing of its election to exclude all of its Registrable Securities from the
Registration Statement; the Company shall, on its part, ensure that Item 507 of
Regulation S-K of the Securities Act (regarding information on the selling
security holders) be complied with in connection with its preparation and filing
of the Registration Statement hereunder;

(c)

As promptly as practicable after becoming aware of such event, notify the
Company of the occurrence of any event, as a result of which the Prospectus
included in the Registration Statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and

(d)

Each Holder agrees that, upon receipt of any notice from the Company of the
occurrence of any event of the kind described in Section 3(e) or 3(f), it shall
immediately discontinue its disposition of Registrable Securities pursuant to
the Registration Statement covering such Registrable Securities until such
Holder’s receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 3(e) and, if so directed by the Company, such Holder
shall deliver to the Company (at the expense of the Company) or destroy (and
deliver to the Company a certificate of destruction) all copies in such Holder’s
possession, of the Prospectus covering such Registrable Securities current at
the time of receipt of such notice.

5.

Expenses of Registration.  All expenses, other than underwriting discounts and
commissions, incurred in connection with registrations, filings or
qualifications pursuant to Section 3, but including, without limitation, all
registration, listing, and qualifications fees, printing and engraving fees,
accounting fees, and the fees and disbursements of counsel for the Company, and
the reasonable fees, not to exceed $5,000.00, of one firm of counsel to the
holders of a majority in interest of the Registrable Securities shall be borne
by the Company.

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6.

Indemnification and Contribution.

(a)

The Company shall indemnify and hold harmless each Holder and each underwriter,
if any, which facilitates the disposition of Registrable Securities, and each of
their respective officers and directors and each person who controls such Holder
or underwriter within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act (a “Company Indemnified Person”) from and against any
losses, claims, damages or liabilities, joint or several, to which such Company
Indemnified Person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement or an
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, not misleading, or
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any Prospectus or an omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and the Company hereby agrees to
reimburse such Company Indemnified Person for all reasonable legal and other
expenses incurred by them in connection with investigating or defending any such
action or claim as and when such expenses are incurred; provided, however, that
the Company shall not be liable to any such Company Indemnified Person in any
such case to the extent that any such loss, claim, damage or liability arises
out of or is based upon (i) an untrue statement or alleged untrue statement made
in, or an omission or alleged omission from, such Registration Statement or
Prospectus in reliance upon and in conformity with written information furnished
to the Company by such Company Indemnified Person expressly for use therein or
(ii) in the case of the occurrence of an event of the type specified in Section
3(e), the use by the Company Indemnified Person of an outdated or defective
Prospectus after the Company has provided to such Company Indemnified Person
written notice that such Prospectus is outdated or defective.

(b)

Indemnification by the Holders.  Each Holder agrees, as a consequence of the
inclusion of any of its Registrable Securities in a Registration Statement,
severally and not jointly, to (i) indemnify and hold harmless the Company, its
directors (including any person who, with his or her consent, is named in the
Registration Statement as a director nominee of the Company), its officers and
each person, if any, who controls the Company within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act (“Holder
Indemnified Person”), against any losses, claims, damages or liabilities to
which the Holder Indemnified Person may become subject, under the Securities Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in such Registration
Statement or Prospectus or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein (in light of the circumstances under
which they were made, in the case of the Prospectus), not misleading, in each
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made by such Holder
in reliance upon and in conformity with written information furnished to the
Company by such holder expressly for use therein; provided, however, that no
Holder shall be liable under this Section 6(b) for any amount in excess of the
gross proceeds paid to such Holder in respect of shares sold by it, and (ii)
reimburse the Holder Indemnified Person for any legal or other expenses incurred
in connection with investigating or defending any such action or claim as such
expenses are incurred.

(c)

Indemnification by the Underwriters.  Each underwriter, if any, which
facilitates the disposition of Registrable Securities shall agree, as a
consequence of facilitating such disposition of Registrable Securities,
severally and not jointly, to (i) indemnify and hold harmless the Company, its
directors (including any person who, with his or her consent, is named in the
Registration Statement as a director nominee of the Company), its officers and
each person, if any, who controls the Company within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, against any
losses, claims, damages or liabilities to which the Company or such other
persons may become subject, under the Securities Act or otherwise, insofar as
such losses, claims, damages or

10

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liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in
such Registration Statement or Prospectus or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein (in light of the
circumstances under which they were made, in the case of the Prospectus), not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company by such holder or underwriter expressly for use therein; provided,
however, that no underwriter shall be liable under this Section 6(b) for any
amount in excess of the gross proceeds paid to such underwriter in respect of
shares sold by it, and (ii) reimburse the Company for any legal or other
expenses incurred by the Company in connection with investigating or defending
any such action or claim as such expenses are incurred.

(d)

Notice of Claims, etc.  Promptly after receipt by a party seeking
indemnification pursuant to this Section 6 (an “Indemnified Party”) of written
notice of any investigation, claim, proceeding or other action in respect of
which indemnification is being sought (each, a “Claim”), the Indemnified Party
promptly shall notify the party against whom indemnification pursuant to this
Section 6 is being sought (the “Indemnifying Party”) of the commencement
thereof; but the omission to so notify the Indemnifying Party shall not relieve
it from any liability that it otherwise may have to the Indemnified Party,
except to the extent that the Indemnifying Party is materially prejudiced and
forfeits substantive rights and defenses by reason of such failure.  In
connection with any Claim as to which both the Indemnifying Party and the
Indemnified Party are parties, the Indemnifying Party shall be entitled to
assume the defense thereof.  Notwithstanding the assumption of the defense of
any Claim by the Indemnifying Party, the Indemnified Party shall have the right
to employ separate legal counsel and to participate in the defense of such
Claim, and the Indemnifying Party shall bear the reasonable fees, out-of-pocket
costs and expenses of such separate legal counsel to the Indemnified Party if
(and only if): (x) the Indemnifying Party shall have agreed to pay such fees,
costs and expenses, (y) the Indemnified Party and the Indemnifying Party shall
reasonably have concluded that representation of the Indemnified Party by the
Indemnifying Party by the same legal counsel would not be appropriate due to
actual or, as reasonably determined by legal counsel to the Indemnified Party,
potentially differing interests between such parties in the conduct of the
defense of such Claim, or if there may be legal defenses available to the
Indemnified Party that are in addition to or disparate from those available to
the Indemnifying Party, or (z) the Indemnifying Party shall have failed to
employ legal counsel reasonably satisfactory to the Indemnified Party within a
reasonable period of time after notice of the commencement of such Claim.  If
the Indemnified Party employs separate legal counsel in circumstances other than
as described in clauses (x), (y) or (z) above, the fees, costs and expenses of
such legal counsel shall be borne exclusively by the Indemnified Party.  Except
as provided above, the Indemnifying Party shall not, in connection with any
Claim in the same jurisdiction, be liable for the fees and expenses of more than
one firm of counsel for the Indemnified Party (together with appropriate local
counsel).  The Indemnified Party shall not, without the prior written consent of
the Indemnifying Party (which consent shall not unreasonably be withheld),
settle or compromise any Claim or consent to the entry of any judgment that does
not include an unconditional release of the Indemnifying Party from all
liabilities with respect to such Claim or judgment.

(e)

Contribution.  If the indemnification provided for in this Section 6 is
unavailable to or insufficient to hold harmless an Indemnified Person under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
Indemnifying Party shall contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party and the Indemnified Party in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations.  The relative fault of such Indemnifying Party and
Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by
such Indemnifying Party or

11

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by such Indemnified Party, and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
 The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6(d) were determined by pro rata
allocation (even if the Holders or any underwriters were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in this Section 6(d).  The
amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
shall be deemed to include any legal or other fees or expenses reasonably
incurred by such Indemnified Party in connection with investigating or defending
any such action or claim.  No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.  The obligations of the Holders and any underwriters in this
Section 6(d) to contribute shall be several in proportion to the percentage of
Registrable Securities registered or underwritten, as the case may be, by them
and not joint.

(f)

Notwithstanding any other provision of this Section 6, in no event shall any (i)
Holder be required to undertake liability to any person under this Section 6 for
any amounts in excess of the dollar amount of the gross proceeds to be received
by such Holder from the sale of such Holder’s Registrable Securities pursuant to
any Registration Statement under which such Registrable Securities are to be
registered under the Securities Act.

(g)

The obligations of the Company under this Section 6 shall be in addition to any
liability which the Company may otherwise have to any Indemnified Person and the
obligations of any Indemnified Person under this Section 6 shall be in addition
to any liability which such Indemnified Person may otherwise have to the
Company.  The remedies provided in this Section 6 are not exclusive and shall
not limit any rights or remedies which may otherwise be available to an
indemnified party at law or in equity.

7.

Rule 144.  With a view to making available to the Holders the benefits of Rule
144 under the Securities Act or any other similar rule or regulation of the
Commission that may at any time permit the Holders to sell securities of the
Company to the public without registration (“Rule 144”), the Company agrees to:

(a)

comply with the provisions of paragraph (c) (1) of Rule 144; and

(b)

file with the Commission in a timely manner all reports and other documents
required to be filed by the Company pursuant to Section 13 or 15(d) under the
Exchange Act; and, if at any time it is not required to file such reports but in
the past had been required to or did file such reports, it will, upon the
request of any Holder, make available other information as required by, and so
long as necessary to permit sales of, its Registrable Securities pursuant to
Rule 144.

8.

Assignment.  The rights to have the Company register Registrable Securities
pursuant to this Appendix I may be assigned or transferred only with the prior
written consent of the Company, and any such assignment or transfer without such
consent shall be void and of no effect, which consent shall not be unreasonably
withheld.  Notwithstanding the foregoing, such consent of the Company shall not
be required with respect to any assignment or transfer of Registrable Securities
to an affiliate of Subscriber, including for this purpose if Subscriber is an
investment company, any fund or account advised by Subscriber’s investment
adviser or any affiliate thereof.  In the event of any such permitted assignment
or transfer by the Holders to any permitted transferee of all or any portion of
such Registrable Securities such transfer will be allowed only if: (a) the
Holder agrees in writing with the transferee or assignee to assign such rights,
and a copy of such agreement is furnished to the Company within a reasonable
time after such assignment, (b) the Company is, within a reasonable time after
such transfer or assignment, furnished with written notice of (i) the name and
address of such transferee or assignee and (ii) the securities with respect to
which such registration rights are being transferred or assigned, (c)
immediately following such transfer or assignment, the securities so transferred
or assigned to the transferee or assignee constitute Restricted Securities, and
(d) at or before the time the Company

12

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received the written notice contemplated by clause (b) of this sentence the
transferee or assignee agrees in writing with the Company to be bound by all of
the provisions contained herein.

9.

Amendment and Waiver.  Any provision of this Appendix I may be amended and the
observance thereof may be waived (either generally or in a particular instance
and either retroactively or prospectively), only with the written consent of the
Company and Holders who hold a majority interest of the Registrable Securities.
 Any amendment or waiver effected in accordance with this Section 9 shall be
binding upon each Holder and the Company.

10.

Miscellaneous.

(a)

A person or entity shall be deemed to be a holder of Registrable Securities
whenever such person or entity owns of record such Registrable Securities.  If
the Company receives conflicting instructions, notices or elections from two or
more persons or entities with respect to the same Registrable Securities, the
Company shall act upon the basis of instructions, notice or election received
from the registered owner of such Registrable Securities.

(b)

If after the date hereof and prior to the Commission declaring the Registration
Statement to be filed pursuant to Section 2(a) effective under the Securities
Act, the Company grants to any Person any registration rights with respect to
any Company securities which are more favorable to such other Person than those
provided in this Appendix I, then the Company forthwith shall grant (by means of
an amendment to this Appendix I or otherwise) identical registration rights to
all Holders hereunder.

(c)

Except as may be otherwise provided herein, any notice or other communication or
delivery required or permitted hereunder shall be in writing and shall be
delivered personally or sent by certified mail, postage prepaid, or by a
nationally recognized overnight courier service as follows, and shall be deemed
given when actually received.

if to the Company, to:

Cord Blood America, Inc.
9000 W. Sunset Blvd., Suite 400

West Hollywood, CA  90069
Facsimile: ()
Attention: Matthew Schissler, CEO

if to the Holders, to:

Stonegate Securities, Inc.

5940 Sherry Lane, Suite 410

Dallas, Texas 75225

Facsimile: (214) 987-1981

Attn: Scott Griffith, President

 

 

The Company or any Holder may change the foregoing address by notice given
pursuant to this Section 10(c).

(d)

Failure of any party to exercise any right or remedy under this Appendix I or
otherwise, or delay by a party in exercising such right or remedy, shall not
operate as a waiver thereof.

(e)

This Appendix I shall be governed by and interpreted in accordance with the laws
of the State of Texas.

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(f)

The remedies provided in this Appendix I are cumulative and not exclusive of any
remedies provided by law.  If any term, provision, covenant or restriction of
this Appendix I is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction.  It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.

(g)

The Company shall not enter into any agreement with respect to its securities
that is inconsistent with the rights granted to the holders of Registrable
Securities in this Appendix I or otherwise conflicts with the provisions hereof.
 The Company is not currently a party to any agreement granting any registration
rights with respect to any of its securities to any person which conflicts with
the Company’s obligations hereunder or gives any other party the right to
include any securities in any Registration Statement filed pursuant hereto,
except for such rights and conflicts as have been irrevocably waived.  Without
limiting the generality of the foregoing, without the written consent of the
holders of a 66 2/3% interest of the Registrable Securities, the Company shall
not grant to any person the right to request it to register any of its
securities under the Securities Act unless the rights so granted are pari pasu
to the prior rights of the holders of Registrable Securities set forth herein,
and are not otherwise in conflict or inconsistent with the provisions of this
Appendix I.  The restrictions on the Company’s rights to grant registration
rights under this paragraph shall terminate on the date all Registrable
Securities have been registered pursuant to a Registration Statement that has
been declared effective by the Commission

(h)

This Appendix I and the Subscription Agreements constitute the entire agreement
among the parties hereto with respect to the subject matter hereof.  There are
no restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein.  This Appendix I and the Subscription Agreements
supersede all prior agreements and undertakings among the parties hereto with
respect to the subject matter hereof.

(i)

Subject to the requirements of Section 8 hereof, this Appendix I shall inure to
the benefit of and be binding upon the successors and assigns of each of the
parties hereto.

(j)

All pronouns and any variations thereof refer to the masculine, feminine or
neuter, singular or plural, as the context may require.

(k)

The headings in this Appendix I are for convenience of reference only and shall
not limit or otherwise affect the meaning thereof.

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