Exhibit H-1
BLOCKED ACCOUNT
AGREEMENT
THIS BLOCKED ACCOUNT AGREEMENT (“
Agreement ”) is made and entered into as of this 9th
day of April, 2007, by and among Citibank, N.A. (“
Bank ”), Cord Blood America, Inc., a Florida
corporation (“ Company ”), and Shelter Island
Opportunity Fund, LLC, and its successors and assigns (“
Purchaser ”).
A.
Pursuant to that certain Securities
Purchase Agreement, dated as of February 14, 2007, (as amended,
supplemented or otherwise modified from time to time, the “
Securities Purchase Agreement ”), among Company,
Corcell, Ltd., a Nevada corporation (“ Corcell
”), Career Channel, Inc., a Florida corporation d/b/a
Rainmakers International (“ Rainmakers ”), and
the Purchaser, Purchaser has agreed to purchase the $230,000
Secured Original Issue Discount Debenture of Company (“
Debenture ”).
B.
Company has established Account No. _____
with Bank (together with any successor accounts and any renewals or
rollovers thereto, the “ Blocked Account
”).
C.
From the proceeds of the sale of the
Debenture, the aggregate amount of $80,000 is being deposited and
credited to the Blocked Account under the terms and conditions
hereof.
D.
The parties hereto desire to enter into
this Agreement in order to set forth their relative rights and
duties with respect to the Blocked Account and all funds on deposit
therein from time to time.
NOW, THEREFORE, in consideration of the
premises and the mutual covenants and agreements hereinafter set
forth, the parties hereto agree as follows:
1.
Effectiveness
. This agreement shall take effect
immediately upon its execution by all parties hereto and shall
supersede any blocked account or similar agreement in effect with
respect to the Blocked Account.
2.
Security Interest;
Agency . As
collateral security for Company’s obligations to Purchaser
under the Debenture and Securities Purchase Agreement and the other
documents delivered by Company, Corcell and Rainmakers and
described therein (collectively, “ Transaction
Documents ”), Company hereby grants to Purchaser a
security interest in (a) the Blocked Account, (b) all contract
rights, claims and privileges in respect of the Blocked Account and
(c) all cash, checks, money orders and other items of value of
Company now or hereafter paid, deposited, credited, held (whether
for collection, provisionally or otherwise) or otherwise in the
possession or under the control of, or in transit to, Bank or any
agent, bailee or custodian thereof (collectively, “
Receipts ”). Bank hereby acknowledges notice of
Purchaser’s security interest in such collateral and does
hereby consent thereto. Purchaser hereby appoints Bank as
Purchaser’s bailee and pledgee-in-possession for the Blocked
Account and all Receipts,
and Bank hereby accepts such appointment
and agrees o be bound by the terms of this Agreement and all
instructions delivered by Purchaser to Bank pursuant hereto.
Company hereby agrees to such appointment and further agrees
that Purchaser shall be entitled to exercise, upon the written
instructions of Purchaser to Bank hereunder, any and all rights
which Company may have with respect to the Blocked Account or under
applicable law with respect to the Blocked Account, all Receipts
and all other collateral described in this paragraph 2.
3.
Control of Blocked
Account .
(a)
The Blocked Account shall be maintained
by Bank in the name of “Shelter Island Opportunity Fund
Blocked Account for Cord Blood America, Inc.”
(b)
On receipt by Bank of a joint notice from
Purchaser and Company stating that the conditions specified in the
Securities Purchase Agreement for the release of funds from the
Blocked Account have been satisfied, the funds that are then on
deposit in the Blocked Account shall be debited by the Bank from
the Blocked Account and released to the Company, or as designated
by the Company, by wire transfer of such funds on the date
specified, which date shall be no more than ten and not less than
one business day after the date of such notice (a “
Payment Date”) .
(c)
Until release of the funds on deposit in
the Blocked Account in accordance with Section 3(b), the Blocked
Account shall be under the sole dominion and control of Purchaser
and neither Company nor any other person or entity, through or
under Company, shall have any control over the use of, or any right
to withdraw any amount from, the Blocked Account.
4.
Procedures for Blocked
Account . Bank shall
follow the following procedures with respect to the Blocked
Account:
(a)
Apply and credit for deposit to the
Blocked Account all Receipts from time to time tendered for deposit
therein, including without limitation all wire transfers and other
payments directed to the Blocked Account.
(b)
From and after the date, if any, that
notice has been delivered to Bank and Company by Purchaser (the
“ Activation Date ”) that a default has occurred
under the Securities Purchase Agreement or any Transaction
Document, and until such time, if any, that Purchaser shall have
withdrawn such notice in writing, Bank shall determine, on each
business day, the balance of all available funds on deposit in the
Blocked Account and automatically initiate a federal funds wire
transfer of all such funds not later than 12:00 p.m. (New York
Time) on such business day to such account as may be designated in
writing from time to time by Purchaser (the “ Purchaser
Account ”).
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5.
Statements and Other
Information .
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