Document:

Exhibit
10.2

 

	
  WELLS
  FARGO

  	
   

  	
  REVOLVING LINE OF CREDIT NOTE

  
	
   

  	
   

  	
   

  
	
  $5,000,000.00

  	
   

  	
  Beverly  Hills, California

  
	
   

  	
   

  	
  December 4, 2009

  

 

FOR
VALUE RECEIVED, the undersigned HemaCare Corporation and Coral Blood
Services, Inc. (“Borrower”) promises to pay to the order of WELLS FARGO
BANK, NATIONAL ASSOCIATION (“Bank”) at its office at Beverly Hills RCBO, 433 N.  Camden
Drive, Suite 505, Beverly Hills, CA 90210, or at such other place as the
holder hereof may designate, in lawful money of the United States of America
and in immediately available funds, the principal sum of $5,000,000.00, or so
much thereof as may be advanced and be outstanding, with interest thereon, to
be computed on each advance from the date of its disbursement as set forth
herein.

 

1.             INTEREST:

 

1.1           Interest. The outstanding
principal balance of this Note shall bear interest (computed on the basis of a
360-day year, actual days elapsed) at a rate per annum 0.25000% above the Prime
Rate in effect from
time to time. The term “Prime Rate” means at any time the rate  of interest most recently announced within Bank at its principal office
as its Prime Rate, with the understanding that the  Prime
Rate is one of Bank’s base rates and serves as the basis upon which effective
rates of interest are calculated for those loans making reference thereto, and
is evidenced by the recording thereof after its announcement in such internal
publication or publications as Bank may designate. Each change in the rate of
interest hereunder shall become effective on the date each Prime Rate change is
announced within Bank.

 

1.2           Payment of Interest.  Interest accrued  on this Note shall be payable on the 1st day of each month, commencing
January 1, 2010.

 

1.3           Default
Interest. From and after the
maturity date of this Note, or such earlier date as all principal owing
hereunder becomes due and payable by acceleration or otherwise, or at Bank’s
option upon the occurrence, and during the continuance of an Event of Default,
the outstanding principal balance of this Note shall bear interest at an
increased rate per annum (computed on the basis of a 360-day year, actual days
elapsed) equal to 4% above the rate of interest from time to time applicable to
this Note.

 

2.             BORROWING AND REPAYMENT:

 

2.1           Borrowing and Repayment.  Borrower may from time to time during the term
of this Note borrow, partially or wholly repay its outstanding borrowings, and
reborrow, subject to all of the limitations, terms and conditions of this Note
and of the Credit Agreement between Borrower and Bank defined below; provided
however, that the total outstanding borrowings under this Note shall not at any
time exceed the principal amount stated above. The unpaid principal balance of
this obligation at any time shall be the total amounts advanced hereunder by
the holder hereof less the amount of principal payments made hereon by or for
Borrower, which balance may be endorsed hereon from time to time by the holder.
The outstanding principal balance of this Note shall be due and payable in full
on December 1, 2011.

 

2.2           Advances. Advances hereunder,
to the total amount of the principal sum available hereunder, may be made by
the holder at the oral or written request of (a) John Doumitt or Robert S.
Chilton, any one acting alone, Who are authorized to request advances and
direct the disposition of any advances until written notice of the revocation of such authority is
received by the holder at the office designated above, or (b) any person,
with respect to advances deposited to the credit of any deposit account of
Borrower, which advances, when so deposited, shall be conclusively presumed to
have been made  to or for the benefit of Borrower regardless of the fact that persons other than those
authorized to request advances may have authority to draw against such account.
The holder shall have no obligation to determine whether any person requesting
an advance is or has been authorized by Borrower.

 

	
  PROMNOTE.CA (05/09)

  	
  20091113012

  	
   

  
	
  Revolving Line of Credit
  Note

  	
   

  	
   

  
	
  01178, #0262320210

  	
   

  	
   

  

 

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2.3           Application
of Payments.  Each payment made on this Note shall be
credited first, to any interest then due and second, to the outstanding
principal balance hereof.

 

3.             EVENTS
OF DEFAULT:

 

This
Note is made pursuant to and is subject to the terms and conditions of that
certain Credit Agreement between Borrower and Bank dated as of December 4,
2009, as amended from time to time (the “Credit Agreement”). Any default in the
payment or performance of any obligation under this Note, or any defined event
of default under the Credit Agreement, shall constitute an “Event of Default”
under this Note.

 

4.             MISCELLANEOUS:

 

4.1           Remedies. Upon the
occurrence of any Event of Default, the holder of this Note, at the  holders option, may declare all
sums of principal and interest outstanding hereunder to be immediately due and
payable without presentment, demand, notice of nonperformance, notice of
protest, protest or notice of dishonor, all of which are expressly waived by
Borrower, and the obligation, if any, of the holder to extend any further
credit hereunder shall immediately cease and terminate. Borrower shall pay to
the holder immediately upon demand the full amount of all payments, advances,
charges, costs and expenses, including reasonable attorneys’ fees (to include
outside counsel fees and all allocated costs of the
holder’s in-house counsel), expended or incurred by the holder in
connection with the enforcement of the holder’s rights and/or the collection of
any amounts which become due to the holder under this Note, and the prosecution
or defense of any action in any way related to this Note, including without
limitation, any action for declaratory relief, whether incurred at the trial or
appellate level, in an arbitration proceeding or otherwise, and including any
of the foregoing incurred in connection with any bankruptcy proceeding
(including without limitation, any adversary proceeding, contested matter or
motion brought by Bank or any other person) relating to Borrower or any other
person or entity.

 

4.2           Obligations Joint and Several.
Should more than one person or entity sign this Note as a Borrower, the
obligations of each such Borrower shall be joint and several.

 

4.3           Governing
Law. This Note shall be governed
by and construed in accordance with the laws of the State of California.

 

IN WITNESS WHEREOF, the undersigned has
executed this Note as of the date first written above.

 

	
  HemaCare Corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ John Doumitt

  	
   

  	
   

  
	
   

  	
  John Doumitt, Chief
  Executive Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ Robert S. Chilton

  	
   

  	
   

  
	
   

  	
  Robert S. Chilton, Executive
  Vice President & Chief Financial Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Coral Blood Services, Inc.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ John Doumitt

  	
   

  	
   

  
	
   

  	
  John Doumitt, Chief
  Executive Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ Robert S. Chilton

  	
   

  	
   

  
	
   

  	
  Robert S. Chilton, Chief
  Financial Officer

  	
   

  	
   

  

 

2Exhibit 10.3

 

THIRD PARTY SECURITY AGREEMENT:

RIGHTS TO PAYMENT AND INVENTORY

 

1.              GRANT OF SECURITY INTEREST. In consideration of any credit or other financial
accommodation heretofore, now or hereafter extended or made to HemaCare
Corporation and Coral Blood Services, Inc. (“Borrowers”), or any of them,
by WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”), and for other valuable
consideration, as security for the payment of all Indebtedness of Borrowers to
Bank, the undersigned Coral Blood Services, Inc. (“Owner”) hereby grants
and transfers to Bank a security interest in all accounts, deposit accounts,
chattel paper (whether electronic or tangible), instruments, promissory notes,
documents, general intangibles, payments intangibles, software, letter of credit
rights, healthcare insurance receivables and other rights to payment
(collectively called “Rights to Payment”), now existing or at any time
hereafter, and prior to the termination hereof, arising (whether they arise
from the sale, lease or other disposition of inventory or from performance of
contracts for service, manufacture, construction, repair or otherwise or from
any other source whatsoever), including all securities, guaranties, warranties,
indemnity agreements, insurance policies, supporting obligations and other
agreements pertaining to the same or the property described therein, and in all
goods returned by or repossessed from Owner’s customers, together with a
security interest in all inventory, goods held for sale or lease or to be
furnished under contracts for service, goods so leased or furnished, raw
materials, component parts and embedded software, work in process or materials
used or consumed in Owner’s business and all warehouse receipts, bills of
lading and other documents evidencing goods owned or acquired by Owner, and all
goods covered thereby, now or at any time hereafter, and prior to the
termination hereof, owned or acquired by Owner, wherever located, and all
products thereof (collectively called “Inventory”), whether in the possession
of Owner, warehousemen, bailees or any other person, or in process of delivery,
and whether located at Owner’s places of business or elsewhere (with all Rights
to Payment and Inventory referred to herein collectively as the “Collateral”),
together with whatever is receivable or received when any of the Collateral or
proceeds thereof are sold, leased, collected, exchanged or otherwise disposed
of, whether such disposition is voluntary or involuntary, including without
limitation, all Rights to Payment, including returned premiums, with respect to
any insurance relating to any of the foregoing, and all Rights to Payment with
respect to any claim or cause of action affecting or relating to any of the
foregoing (hereinafter called “Proceeds”). The word “Indebtedness” is used
herein in its most comprehensive sense and includes any and all advances,
debts, obligations and liabilities of Borrowers, or any of them, heretofore,
now or hereafter made, incurred or created, whether voluntary or involuntary
and however arising, whether due or not due, absolute or contingent, liquidated
or unliquidated, determined or undetermined, including under any swap,
derivative, foreign exchange, hedge, deposit, treasury management or other
similar transaction or arrangement, and whether Borrowers may be liable
individually or jointly with others, or whether recovery upon such Indebtedness
may be or hereafter becomes unenforceable.

 

2.              CONTINUING  AGREEMENT; REVOCATION; OBLIGATION UNDER OTHER  AGREEMENTS. This is a continuing agreement and all rights,
powers and remedies hereunder shall apply to all past, present and future
Indebtedness of each of the Borrowers to Bank, including that arising under
successive transactions which shall either continue the Indebtedness, increase
or decrease it, or from time to time create new Indebtedness after all or any
prior Indebtedness has been satisfied, and notwithstanding the death,
incapacity, dissolution, liquidation or bankruptcy of any of the Borrowers or
Owner or any other event or proceeding affecting any of the Borrowers or Owner.
This Agreement shall not apply to any new Indebtedness created after actual
receipt by Bank of written notice of its revocation as to such 

 

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new Indebtedness; provided however, that loans or advances
made by Bank to any of the Borrowers after revocation under commitments
existing prior to receipt by Bank of such revocation, and extensions, renewals
or modifications, of any kind, of Indebtedness incurred by any of the Borrowers
or committed by Bank prior to receipt by Bank of such revocation, shall not be
considered new Indebtedness. Any such notice must be sent to Bank by registered
U.S. mail, postage prepaid, addressed to its office at Beverly Hills RCBO, 433
N. Camden Drive, Suite 505, Beverly Hills, California 90210, or at such
other address as Bank shall from time to time designate. The obligations of
Owner hereunder shall be in addition to any obligations of Owner under any
other grants or pledges of security for any liabilities or obligations of any
of the Borrowers or any other person heretofore or hereafter given to Bank
unless said other grants or pledges of security are expressly modified or
revoked in writing; and this Agreement shall not, unless expressly herein
provided, affect or invalidate any such other grants or pledges of security.

 

3.              OBLIGATIONS
JOINT AND SEVERAL; SEPARATE ACTIONS; WAIVER OF STATUTE OF LIMITATIONS;
REINSTATEMENT OF LIABILITY. The obligations hereunder are joint and several and
independent of the obligations of Borrowers, and a separate action or actions
may be brought and prosecuted against Owner whether action is brought against
any of the Borrowers or any other person, or whether any of the Borrowers or
any other person is joined in any such action or actions. Owner acknowledges
that this Agreement is absolute and unconditional, there are no conditions
precedent to the effectiveness of this Agreement, and this Agreement is in full
force and effect and is binding on Owner as of the date written below,
regardless of whether Bank obtains collateral or any guaranties from others or
takes any other action contemplated by Owner. Owner waives the benefit of any
statute of limitations affecting Owner’s liability hereunder or the enforcement
thereof, and Owner agrees that any payment of any Indebtedness or other act
which shall toll any statute of limitations applicable thereto shall similarly
operate to toll such statute of limitations applicable to Owner’s liability
hereunder. The liability of Owner hereunder shall be reinstated and revived and
the rights of Bank shall continue if and to the extent that for any reason any
amount at any time paid on account of any Indebtedness secured hereby is
rescinded or must be otherwise restored by Bank, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise, all as though such
amount had not been paid. The determination as to whether any amount so paid
must be rescinded or restored shall be made by Bank in its sole discretion; provided
however, that if Bank chooses to contest any such matter at the request of
Owner, Owner agrees to indemnify and hold Bank harmless from and against all
costs and expenses, including reasonable attorneys’ fees (to include outside
counsel fees and all allocated costs of Bank’s in-house counsel), expended or
incurred by Bank in connection therewith, including without limitation, in any
litigation with respect thereto.

 

4.              OBLIGATIONS
OF BANK. Any money received by Bank in respect of the Collateral may be
deposited, at Bank’s option, into a non-interest bearing account over which
Owner shall have no control, and the same shall, for all purposes, be deemed
Collateral hereunder.

 

5.              REPRESENTATIONS
AND WARRANTIES.

 

(a)           Owner represents and warrants to Bank that: (i) Owner’s
legal name is exactly as set forth on the first page of this Agreement,
and all of Owner’s organizational documents or agreements delivered to Bank are
complete and accurate in every respect; (ii) Owner is the owner and has
possession or control of the Collateral and Proceeds; (iii) Owner has the
exclusive right to grant a security interest in the Collateral and Proceeds; (iv) all
Collateral and 

 

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Proceeds are genuine, free from liens, adverse claims, setoffs, default,
prepayment, defenses and conditions precedent of any kind or character, except
the lien created hereby or as otherwise agreed to by Bank, or as heretofore
disclosed by Owner to Bank, in writing; (v) all statements contained
herein and, where applicable, in the Collateral are true and complete in all
material respects; (vi) no financing statement covering any of the
Collateral or Proceeds, and naming any secured party other than Bank, is on
file in any public office; (vii) all persons appearing to be obligated on
the Collateral and Proceeds have authority and capacity to contract and are
bound as they appear to be; (viii) all property subject to chattel paper
has been properly registered and filed in compliance with law and to perfect
the interest of Owner in such property; and (ix) all Rights to Payment and
Proceeds comply with all applicable laws concerning form, content and manner of
preparation and execution, including where applicable Federal Reserve
Regulation Z and any State consumer credit laws.

 

(b)           Owner further represents and warrants to Bank that: (i) the
Collateral pledged hereunder is so pledged at Borrowers’ request; (ii) Bank
has made no representation to Owner as to the creditworthiness of any of the
Borrowers; and (iii) Owner has established adequate means of obtaining
from each of the Borrowers on a continuing basis financial and other
information pertaining to Borrowers’ financial condition. Owner agrees to keep
adequately informed from such means of any facts, events or circumstances which
might in any way affect Owner’s risks hereunder, and Owner further agrees that
Bank shall have no obligation to disclose to Owner any information or material
about any of the Borrowers which is acquired by Bank in any manner.

 

6.              COVENANTS
OF OWNER.

 

(a)             Owner
agrees in general: (i) to indemnify Bank against all losses, claims,
demands, liabilities and expenses of every kind caused by property subject
hereto; (ii) to permit Bank to exercise its powers; (iii) to execute
and deliver such documents as Bank deems necessary to create, perfect and
continue the security interests contemplated hereby; (iv) not to change
Owner’s name, and as applicable, its chief executive office, its principal
residence or the jurisdiction in which it is organized and/or registered
without giving Bank prior written notice thereof; (v) not to change the
places where Owner keeps any Collateral or Owner’s records concerning the
Collateral and Proceeds without giving Bank prior written notice of the address
to which Owner is moving same; and (vi) to cooperate with Bank in
perfecting all security interests granted herein and in obtaining such
agreements from third parties as Bank deems necessary, proper or convenient in
connection with the preservation, perfection or enforcement of any of its
rights hereunder.

 

(b)            Owner
agrees with regard to the Collateral and Proceeds, unless Bank agrees otherwise
in writing: (i) that Bank is authorized to file financing statements in
the name of Owner to perfect Bank’s security interest in Collateral and
Proceeds; (ii) to insure Inventory and, where applicable, Rights to
Payment with Bank named as loss payee, in form, substance and amounts, under
agreements, against risks and liabilities, and with insurance companies satisfactory
to Bank; (iii) not to use any Inventory for any unlawful purpose or in any
way that would void any insurance required to be carried in connection
therewith; (iv) not to remove Inventory from Owner’s premises except in
the ordinary course of Owner’s business; (v) not to permit any lien on the
Collateral or Proceeds, including without limitation, liens arising from the
storage of Inventory, except in favor of Bank; (vi) not to sell,
hypothecate or dispose of, nor permit the transfer by operation of law of, any
of the Collateral or Proceeds or any interest therein, except sales of
Inventory to buyers in the ordinary course of Owner’s business; (vii) to
furnish reports to Bank of all acquisitions, returns, sales and other
dispositions of Inventory in such form and 

 

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detail and at such times as Bank may require; (viii) to permit Bank
to inspect the Collateral at any time; (ix) to keep, in accordance with
generally accepted accounting principles, complete and accurate records
regarding all Collateral and Proceeds, and to permit Bank to inspect the same
and make copies thereof at any reasonable time; (x) if requested by Bank,
to receive and use reasonable diligence to collect Rights to Payment and
Proceeds, in trust and as the property of Bank, and to immediately endorse as
appropriate and deliver such Rights to Payment and Proceeds to Bank daily in
the exact form in which they are received together with a collection report in
form satisfactory to Bank; (xi) not to commingle Rights to Payment, Proceeds or
collections thereunder with other property; (xii) to give only normal
allowances and credits and to advise Bank thereof immediately in writing if
they affect any Rights to Payment or Proceeds in any material respect; (xiii)
on demand, to deliver to Bank returned property resulting from, or payment
equal to, such allowances or credits on any Rights to Payment or Proceeds or to
execute such documents and do such other things as Bank may reasonably request
for the purpose of perfecting, preserving and enforcing its security interest
in such returned property; (xiv) from time to time, when requested by Bank, to
prepare and deliver a schedule of all Collateral and Proceeds subject to this
Agreement and to assign in writing and deliver to Bank all accounts, contracts,
leases and other chattel paper, instruments, documents and other evidences
thereof; (xv) in the event Bank elects to receive payments of Rights to Payment
or Proceeds hereunder, to pay all expenses incurred by Bank in connection
therewith, including expenses of accounting, correspondence, collection
efforts, reporting to account or contract debtors, filing, recording, record
keeping and expenses incidental thereto; and (xvi) to provide any service and
do any other acts which may be necessary to maintain, preserve and protect all
Collateral and, as appropriate and applicable, to keep all Collateral in good
and saleable condition, to deal with the Collateral in accordance with the
standards and practices adhered to generally by users and manufacturers of like
property, and to keep all Collateral and Proceeds free and clear of all
defenses, rights of offset and counterclaims.

 

7.              POWERS OF BANK. Owner appoints Bank its true attorney in fact to perform any
of the following powers, which are coupled with an interest, are irrevocable
until termination of this Agreement and may be exercised from time to time by
Bank’s officers and employees, or any of them, whether or not any of the
Borrowers or Owner is in default: (a) to perform any obligation of Owner
hereunder in Owner’s name or otherwise; (b) to give notice to account
debtors or others of Bank’s rights in the Collateral and Proceeds, to enforce
or forebear from enforcing the same and make extension or modification
agreements with respect thereto; (c) to release persons liable on
Collateral or Proceeds and to give receipts and acquittances and compromise
disputes in connection therewith; (d) to release or substitute security; (e) to
resort to security in any order; (f) to prepare, execute, file, record or
deliver notes, assignments, schedules, designation statements, financing
statements, continuation statements, termination statements, statements of
assignment, applications for registration or like papers to perfect, preserve
or release Bank’s interest in the Collateral and Proceeds; (g) to receive,
open and read mail addressed to Owner; (h) to take cash, instruments for
the payment of money and other property to which Bank is entitled; (i) to
verify facts concerning the Collateral and Proceeds by inquiry of obligors
thereon, or otherwise, in its own name or a fictitious name; (j) to
endorse, collect, deliver and receive payment under instruments for the payment
of money constituting or relating to Proceeds; (k) to prepare, adjust,
execute, deliver and receive payment under insurance claims, and to collect and
receive payment of and endorse any instrument in payment of loss or returned
premiums or any other insurance refund or return, and to apply such amounts
received by Bank, at Bank’s sole option, toward repayment of the Indebtedness; (I) to
exercise all rights, powers and remedies which Owner would have, but for this
Agreement, with respect to all Collateral and Proceeds subject hereto; (m) to
make withdrawals from and to close deposit accounts or other accounts with any
financial institution, wherever located, into which 

 

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Proceeds may have been
deposited, and to apply funds so withdrawn to payment of the Indebtedness; (n) to
preserve or release the interest evidenced by chattel paper to which Bank is
entitled hereunder and to endorse and deliver any evidence of title incidental
thereto; and (o) to do all acts and things and execute all documents in
the name of Owner or otherwise, deemed by Bank as necessary, proper and
convenient in connection with the preservation and perfection of its rights
hereunder or enforcement of its rights hereunder after an Event of Default.
Notwithstanding anything to the contrary provided in this Section 7, the
Bank shall only exercise its rights and remedies under this Section 7(a),
(b), (c), (d), (e), (g), (h), (j), (k), (I) and (m) when any of the
Borrowers or Owner is in default.

 

8.              OWNER’S
WAIVERS.

 

(a)             Owner
waives any right to require Bank to: (i) proceed against any of the
Borrowers or any other person; (ii) marshal assets or proceed against or
exhaust any security held from any of the Borrowers or any other person; (iii) give
notice of the terms, time and place of any public or private sale or other
disposition of personal property security held from any of the Borrowers or any
other person; (iv) take any other action or pursue any other remedy in
Bank’s power; or (v) make any presentment or demand for performance, or
give any notice of nonperformance, protest, notice of protest or notice of
dishonor hereunder or in connection with any obligations or evidences of
indebtedness held by Bank as security for or which constitute in whole or in
part the Indebtedness secured hereunder, or in connection with the creation of
new or additional Indebtedness.

 

(b)            Owner
waives any defense to its obligations hereunder based upon or arising by reason
of: (i) any disability or other defense of any of the Borrowers or any
other person; (ii) the cessation or limitation from any cause whatsoever,
other than payment in full, of the Indebtedness of any of the Borrowers or any
other person; (iii) any lack of authority of any officer, director,
partner, agent or any other person acting or purporting to act on behalf of any
of the Borrowers which is a corporation, partnership or other type of entity,
or any defect in the formation of any such Borrower; (iv) the application
by any of the Borrowers of the proceeds of any Indebtedness for purposes other
than the purposes represented by Borrowers to, or intended or understood by,
Bank or Owner; (v) any act or omission by Bank which directly or
indirectly results in or aids the discharge of any of the Borrowers or any
portion of the Indebtedness by operation of law or otherwise, or which in any
way impairs or suspends any rights or remedies of Bank against any of the
Borrowers; (vi) any impairment of the value of any interest in security
for the Indebtedness or any portion thereof, including without limitation, the
failure to obtain or maintain perfection or recordation of any interest in any
such security, the release of any such security without substitution, and/or
the failure to preserve the value of, or to comply with applicable law in
disposing of, any such security; (vii) any modification of the
Indebtedness, in any form whatsoever, including any modification made after
revocation hereof to any Indebtedness incurred prior to such revocation, and
including without limitation the renewal, extension, acceleration or other
change in time for payment of, or other change in the terms of, the
Indebtedness or any portion thereof, including increase or decrease of the rate
of interest thereon; or (viii) any requirement that Bank give any notice
of acceptance of this Agreement. Until all Indebtedness shall have been paid in
full, Owner shall have no right of subrogation, and Owner waives any right to
enforce any remedy which Bank now has or may hereafter have against any of the Borrowers or any other person and
waives any benefit of, or any right to participate in, any security now or
hereafter held by Bank. Owner further waives all rights and defenses Owner may
have arising out of (A) any election of remedies by Bank, even though that
election of remedies, such as a non-judicial foreclosure with respect to any
security for any portion of the Indebtedness, destroys Owner’s rights of
subrogation or Owner’s rights to 

 

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proceed
against any of the Borrowers for reimbursement, or (B) any loss of rights
Owner may suffer by reason of any rights, powers or remedies of any of the
Borrowers in connection with any anti-deficiency laws or any other laws
limiting, qualifying or discharging Borrowers’ Indebtedness, whether by
operation of Sections 726, 580a or 580d of the Code of Civil Procedure as from
time to time amended, or otherwise, including any rights Owner may have to a Section 580a
fair market value hearing to determine the size of a deficiency following any
foreclosure sale or other disposition of any real property security for any
portion of the Indebtedness.

 

9.              AUTHORIZATIONS TO BANK. Owner authorizes Bank either before or after
revocation hereof, without notice to or demand on Owner, and without affecting
Owner’s liability hereunder, from time to time to: (a) alter, compromise,
renew, extend, accelerate or otherwise change the time for payment of, or
otherwise change the terms of, the Indebtedness or any portion thereof,
including increase or decrease of the rate of interest thereon; (b) take
and hold security, other than the Collateral and Proceeds, for the payment of
the Indebtedness or any portion thereof, and exchange, enforce, waive,
subordinate or release the Collateral and Proceeds, or any part thereof, or any
such other security; (c) apply the Collateral and Proceeds or such other
security and direct the order or manner of sale thereof, including without
limitation, a non-judicial sale permitted by the terms of the controlling
security agreement, mortgage or deed of trust, as Bank in its discretion may
determine; (d) release or substitute any one or more of the endorsers or
guarantors of the Indebtedness, or any portion thereof, or any other party
thereto; and (e) apply payments received by Bank from any of the Borrowers
to any Indebtedness of any of the Borrowers to Bank, in such order as Bank
shall determine in its sole discretion, whether or not such Indebtedness is
covered by this Agreement, and Owner hereby waives any provision of law
regarding application of payments which specifies otherwise. Bank may without
notice assign this Agreement in whole or in part.

 

10.           PAYMENT
OF PREMIUMS, TAXES, CHARGES, LIENS AND ASSESSMENTS. Owner agrees to pay, prior
to delinquency, all insurance premiums, taxes, charges, liens and assessments
against the Collateral and Proceeds, and upon the failure of Owner to do so,
Bank at its option may pay any of them and shall be the sole judge of the
legality or validity thereof and the amount necessary to discharge the same.
Any such payments made by Bank shall be obligations of Owner to Bank, due and
payable immediately upon demand, together with interest at a rate determined in
accordance with the provisions of this Agreement, and shall be secured by the
Collateral and Proceeds, subject to all terms and conditions of this Agreement.

 

11.            EVENTS
OF DEFAULT. The occurrence of any of the following shall constitute an “Event
of Default” under this Agreement: (a) any default in the payment or
performance of any obligation, or any defined event of default, under (i) any
contract or instrument evidencing any Indebtedness, or (ii) any other
agreement between any of the Borrowers and Bank, including without limitation
any loan agreement, relating to or executed in connection with any
Indebtedness; (b) any representation or warranty made by Owner herein
shall prove to be incorrect in any material respect when made; (c) Owner
shall fail to observe or perform any obligation or agreement contained herein; (d) any
impairment of any rights of Bank in any Collateral or Proceeds, or any
attachment or like levy on any property of Owner; and (e) Bank, in good
faith, believes any or all of the Collateral and/or Proceeds to be in danger of
misuse, dissipation, commingling, loss, theft, damage or destruction, or otherwise
in jeopardy or unsatisfactory in character or value.

 

6

 

12.            REMEDIES.
Upon the occurrence of any Event of Default, Bank shall have and may exercise
without demand any and all rights, powers, privileges and remedies granted to a
secured party upon default under the California Uniform Commercial Code or
otherwise provided by law, including without limitation, the right (a) to
contact all persons obligated to Owner on any Collateral or Proceeds and to
instruct such persons to deliver all Collateral and/or Proceeds directly to
Bank, and (b) to sell, lease, license or otherwise dispose of any or all
Collateral. All rights, powers, privileges and remedies of Bank shall be
cumulative. No delay, failure or discontinuance of Bank in exercising any
right, power, privilege or remedy hereunder shall affect or operate as a waiver
of such right, power, privilege or remedy; nor shall any single or partial
exercise of any such right, power, privilege or remedy preclude, waive or
otherwise affect any other or further exercise thereof or the exercise of any
other right, power, privilege or remedy. Any waiver, permit, consent or
approval of any kind by Bank of any default hereunder, or any such waiver of
any provisions or conditions hereof, must be in writing and shall be effective
only to the extent set forth in writing. It is agreed that public or private
sales or other dispositions, for cash or on credit, to a wholesaler or retailer
or investor, or user of property of the types subject to this Agreement, or
public auctions, are all commercially reasonable since differences in the
prices generally realized in the different kinds of dispositions are ordinarily
offset by the differences in the costs and credit risks of such dispositions.
While an Event of Default exists: (a) Owner will deliver to Bank from time
to time, as requested by Bank, current lists of all Collateral and Proceeds; (b) Owner
will not dispose of any Collateral or Proceeds except on terms approved by
Bank; (c) at Bank’s request, Owner will assemble and deliver all
Collateral and Proceeds, and books and records pertaining thereto, to Bank at a
reasonably convenient place designated by Bank; and (d) Bank may, without
notice to Owner, enter onto Owner’s premises and take possession of the
Collateral. With respect to any sale by Bank of any Collateral subject to this
Agreement, Owner hereby expressly grants to Bank the right to sell such
Collateral using any or all of Owner’s trademarks, trade names, trade name rights
and/or proprietary labels or marks. Owner further agrees that Bank shall have
no obligation to process or prepare any Collateral for sale or other
disposition.

 

13.              DISPOSITION
OF COLLATERAL AND PROCEEDS; TRANSFER OF INDEBTEDNESS. In disposing of Collateral
hereunder, Bank may disclaim all warranties of title, possession, quiet
enjoyment and the like. Any proceeds of any disposition of any Collateral or
Proceeds, or any part thereof, may be applied by Bank to the payment of
expenses incurred by Bank in connection with the foregoing, including
reasonable attorneys’ fees, and the balance of such proceeds may be applied by
Bank toward the payment of the Indebtedness in such order of application as
Bank may from time to time elect. Upon the transfer of all or any part of the
Indebtedness, Bank may transfer all or any part of the Collateral or Proceeds
and shall be fully discharged thereafter from all liability and responsibility
with respect to any of the foregoing so transferred, and the transferee shall be
vested with all rights and powers of Bank hereunder with respect to any of the
foregoing so transferred; but with respect to any Collateral or Proceeds not so
transferred, Bank shall retain all rights, powers, privileges and remedies
herein given.

 

14.            NOTICES. All
notices, requests and demands required under this Agreement must be in writing,
addressed to Bank at the address specified in Section 2 hereof and to
Owner at the address of its chief executive office (or personal residence, if
applicable) specified below or to such other address as
any party may designate by written notice to each other party, and shall be
deemed to have been given or made as follows: (a) if personally delivered,
upon delivery; (b) if sent by mail, upon the earlier of the date of
receipt or three (3) days after deposit in the U.S. mail, first class and
postage prepaid; and (c) if sent by telecopy, upon receipt.

 

7

 

15.           COSTS, EXPENSES AND ATTORNEYS’ FEES. Owner shall pay to
Bank immediately upon demand the full amount of all payments, advances,
charges, costs and expenses, including reasonable attorneys’ fees (to include
outside counsel fees and all allocated costs of Bank’s in-house counsel),
expended or incurred by Bank in connection with (a) the perfection and
preservation of the Collateral or Bank’s interest therein, and (b) the
realization, enforcement and exercise of any right, power, privilege or remedy
conferred by this Agreement, whether incurred at the trial or appellate level,
in an arbitration proceeding or otherwise, and including any of the foregoing
incurred in connection with any bankruptcy proceeding (including without
limitation, any adversary proceeding, contested matter or motion brought by
Bank or any other person) relating to Owner or in any way affecting any of the
Collateral or Bank’s ability to exercise any of its rights or remedies with
respect thereto. All of the foregoing shall be paid by Owner with interest from
the date of demand until paid in full at a rate per annum equal to the greater
of ten percent (10%) or Bank’s Prime Rate in effect from time to time.

 

16.           SUCCESSORS; ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the heirs, executors, administrators, legal
representatives, successors and assigns of the parties; provided however, that
Owner may not assign or transfer any of its interests or rights hereunder
without Bank’s prior written consent. Owner acknowledges that Bank has the
right to sell, assign, transfer, negotiate or grant participations in all or
any part of, or any interest in, any Indebtedness of Borrowers to Bank and any
obligations with respect thereto, including this Agreement. In connection
therewith, Bank may disclose all documents and information which Bank now has
or hereafter acquires relating to Owner and/or this Agreement, whether
furnished by Borrowers, Owner or otherwise. Owner further agrees that Bank may
disclose such documents and information to Borrowers.

 

17.           AMENDMENT. This Agreement may be amended or modified only
in writing signed by Bank and Owner.

 

18.           APPLICATION OF SINGULAR AND PLURAL. In all cases where
there is but a single Borrower, then all words used herein in the plural shall
be deemed to have been used in the singular where the context and construction
so require; and when there is more than one Borrower named herein or when this
Agreement is executed by more than one Owner, the word “Borrowers” and the word
“Owner” respectively shall mean all or any one or more of them as the context requires.

 

19.             SEVERABILITY OF PROVISIONS. If any
provision of this Agreement shall be held to be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or any remaining provisions of this Agreement.

 

20.             GOVERNING
LAW. This Agreement shall be governed by and construed in accordance
with the laws of the State of California.

 

21.             ARBITRATION.

 

(a)           Arbitration.
The parties hereto agree, upon demand by any party, to submit to binding
arbitration all claims, disputes and controversies between or among them (and
their respective employees, officers, directors, attorneys, and other agents),
whether in tort, contract or otherwise in any way arising out of or relating to
this Agreement and its negotiation, execution, collateralization,
administration, repayment, modification, extension, substitution, formation,
inducement, enforcement, default or termination.

 

8

 

(b)           Governing
Rules. Any arbitration proceeding will (i) proceed in a location in
California selected by the American Arbitration Association (“AAA”); (ii) be
governed by the Federal Arbitration Act (Title 9 of the United States Code),
notwithstanding any conflicting choice of law provision in any of the documents
between the parties; and (iii) be conducted by the AAA, or such other
administrator as the parties shall mutually agree upon, in accordance with the
AAA’s commercial dispute resolution procedures, unless the claim or
counterclaim is at least $1,000,000.00 exclusive of claimed interest,
arbitration fees and costs in which case the arbitration shall be conducted in
accordance with the AAA’s optional procedures for large, complex commercial
disputes (the commercial dispute resolution procedures or the optional
procedures for large, complex commercial disputes to be referred to herein, as
applicable, as the “Rules”). If there is any inconsistency between the terms
hereof and the Rules, the terms and procedures set forth herein shall control.
Any party who fails or refuses to submit to arbitration following a demand by
any other party shall bear all costs and expenses incurred by such other party
in compelling arbitration of any dispute. Nothing contained herein shall be
deemed to be a waiver by any party that is a bank of the protections afforded
to it under 12 U.S.C. §91 or any similar applicable state law.

 

(c)           No Waiver of
Provisional Remedies, Self-Help and Foreclosure. The arbitration
requirement does not limit the right of any party to (i) foreclose against
real or personal property collateral; (ii) exercise self-help remedies
relating to collateral or proceeds of collateral such as setoff or
repossession; or (iii) obtain provisional or ancillary remedies such as
replevin, injunctive relief, attachment or the appointment of a receiver,
before during or after the pendency of any arbitration proceeding. This
exclusion does not constitute a waiver of the right or obligation of any party
to submit any dispute to arbitration or reference hereunder, including those
arising from the exercise of the actions detailed in sections (i), (ii) and
(iii) of this paragraph.

 

(d)           Arbitrator
Qualifications and Powers. Any arbitration proceeding in which the amount
in controversy is $5,000,000.00 or less will be decided by a single arbitrator
selected according to the Rules, and who shall not render an award of greater
than $5,000,000.00. Any dispute in which the amount in controversy exceeds $5,000,000.00
shall be decided by majority vote of a panel of three arbitrators; provided
however, that all three arbitrators must actively participate in all hearings
and deliberations. The arbitrator will be a neutral attorney licensed in the
State of California or a neutral retired judge of the state or federal
judiciary of California, in either case with a minimum of ten years experience
in the substantive law applicable to the subject matter of the dispute to be
arbitrated. The arbitrator will determine whether or not an issue is
arbitratable and will give effect to the statutes of limitation in determining
any claim. In any arbitration proceeding the arbitrator will decide (by
documents only or with a hearing at the arbitrator’s discretion) any pre-hearing
motions which are similar to motions to dismiss for failure to state a claim or
motions for summary adjudication. The arbitrator shall resolve all disputes in
accordance with the substantive law of California and may grant any remedy or
relief that a court of such state could order or grant within the scope hereof
and such ancillary relief as is necessary to make effective any award. The
arbitrator shall also have the power to award recovery of all costs and fees,
to impose sanctions and to take such other action as the arbitrator deems
necessary to the same extent a judge could pursuant to the Federal Rules of
Civil Procedure, the California Rules of Civil Procedure or other
applicable law. Judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction. The institution and maintenance of an
action for judicial relief or pursuit of a provisional or ancillary remedy
shall not constitute a waiver of the right of any party, including the
plaintiff, to submit the controversy or claim to arbitration if any other party
contests such action for judicial relief.

 

9

 

(e)             Discovery. In any arbitration proceeding,
discovery will be permitted in accordance with the
Rules. All discovery shall be expressly limited to matters directly relevant to
the dispute being arbitrated and must be completed no later than 20 days before
the hearing date. Any requests for an extension of the discovery periods, or
any discovery disputes, will be subject to final determination by the
arbitrator upon a showing that the request for discovery is essential for the
party’s presentation and that no alternative means for obtaining information is
available.

 

(f)              Class Proceedings
and Consolidations. No
party hereto shall be entitled to join or consolidate disputes by or against
others in any arbitration, except parties who have executed this Agreement or
any other contract, instrument or document relating to any Indebtedness, or to
include in any arbitration any dispute as a representative or member of a
class, or to act in any arbitration in the interest of the general public or in
a private attorney general capacity.

 

(g)             Payment of
Arbitration Costs and Fees. The arbitrator shall award all costs and
expenses of the arbitration proceeding.

 

(h)             Real Property
Collateral; Judicial Reference. Notwithstanding anything herein to the
contrary, no dispute shall be submitted to arbitration if the dispute concerns
indebtedness secured directly or indirectly, in whole or in part, by any real
property unless (i) the holder of the mortgage, lien or security interest
specifically elects in writing to proceed with the arbitration, or (ii) all
parties to the arbitration waive any rights or benefits that might accrue to
them by virtue of the single action rule statute of California, thereby
agreeing that all indebtedness and obligations of the parties, and all
mortgages, liens and security interests securing such indebtedness and
obligations, shall remain fully valid and enforceable. If any such dispute is
not submitted to arbitration, the dispute shall be referred to a referee in
accordance with California Code of Civil Procedure Section 638 et seq.,
and this general reference agreement is intended to be specifically enforceable
in accordance with said Section 638. A referee with the qualifications
required herein for arbitrators shall be selected pursuant to the AAA’s
selection procedures. Judgment upon the decision rendered by a referee shall be
entered in the court in which such proceeding was commenced in accordance with
California Code of Civil Procedure Sections 644 and 645.

 

(i)              Miscellaneous.
To the maximum extent practicable, the AAA, the arbitrators and the parties shall take all action required to conclude any arbitration proceeding
within 180 days of the filing of the dispute with the AAA. No arbitrator or
other party to an arbitration proceeding may disclose the existence, content or
results thereof, except for disclosures of information by a party required in
the ordinary course of its business or by applicable law or regulation. If more
than one agreement for arbitration by or between the parties potentially
applies to a dispute, the arbitration
provision most directly related to the documents between the parties or the subject
matter of the dispute shall control. This arbitration provision shall survive
termination, amendment or expiration of any of the documents or any
relationship between the parties.

 

(j)              Small Claims Court. Notwithstanding
anything herein to the contrary, each party retains the right to pursue in
Small Claims Court any dispute within that court’s jurisdiction. Further, this
arbitration provision shall apply only to disputes in which either party seeks
to recover an amount of money (excluding attorneys’ fees and costs) that
exceeds the jurisdictional limit of the Small Claims Court.

 

Owner warrants that Owner
is an organization registered under the laws of California.

 

10

 

Owner
warrants that its chief executive office (or principal residence, if
applicable) is located at the following address: 15350 Sherman Way, Suite #350,
Van Nuys, CA 91406.

 

Owner warrants that the
Collateral (except goods in transit) is located or domiciled at the following
additional addresses: 2250 Alcazar Street, #136, Los Angeles, CA 90033; 300
Professional Drive, Scarborough, ME 04074; 152 U.S. Route 1, Scarborough, ME
04074; 992 Union Street, Bangor, ME 04401; 120 Bloomingdale Road, Suite #4401,
White Plains, NY 10605 and 3347 S. Hoover Street, Suite C-10, Los Angeles,
CA 90007.

 

IN WITNESS WHEREOF, this Agreement has been duly
executed as of December 4, 2009.

 

CORAL
BLOOD SERVICES, INC.

 

	
  By:

  	
  /s/ John Doumitt

  	
   

  
	
   

  	
  John Doumitt

  	
   

  
	
   

  	
  Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Robert S. Chilton

  	
   

  
	
   

  	
  Robert S. Chilton

  	
   

  
	
   

  	
  Chief Executive
  Officer

  	
   

  

 

11

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