Document:

Exhibit 10.01

 

June 23,
2005

 

 

Robert
N. Stephens

 

 

Dear Bob:

 

We received your resignation letter,
effective May 25, 2005, from your role as Chief Executive Officer and your
Board of Director membership.  Your
payroll check through your last day of work, plus unused accrued vacation,
sabbatical payout, and a refund of any unused amounts that have been deducted
from your earnings for purposes of participating in Adaptec’s Employee Stock
Purchase Plan was sent to you on May 26, 2005.  You will also receive a check for $40,000
less legally mandated payroll deductions and withholdings.  This amount is to cover miscellaneous
benefits including but not limited to financial planning, attorney fees, auto
allowance, and outplacement.

 

We find these circumstances unfortunate and
wish to offer you certain severance benefits so you can pursue other
opportunities.  The Compensation
Committee of the Board of Directors agreed to the severance program as set
forth below.

 

Please sign and return the below Separation
Agreement and General Release (the “Agreement”) along with the exit paperwork
to Adaptec Human Resources in the enclosed envelope prior to July 15,
2005.

 

SEPARATION AGREEMENT AND GENERAL RELEASE

 

1.                                       Consideration
for Agreement:  In exchange for the
release and agreements described herein, you and Adaptec agree as follows:

 

a)                                      Six
months following the date Adaptec receives a signed Agreement, and provided
that you have returned all Adaptec property, equipment, and assets, your
severance payment of $975,000 will be processed in twelve monthly installments
of $81,250 less legally mandated payroll deductions and withholdings.  This payment is being given as consideration
for this Agreement and is not otherwise due. 
These severance payments are conditional on you not joining a competitor
through November 30, 2006.  If you
do join, advise or consult with a competitor the Company shall have no
obligation to make further payments under this Section 1(a).  The Compensation Committee and the Chairman
of the Board must agree with you that a company is not considered a competitor,
which agreement shall not be unreasonably withheld, conditioned or delayed.

 

 

b)                                     All
future vesting of stock options will cease effective May 25, 2005.  All vested options will have an exercise period
through the earlier of (i) the end of the term of such option or (ii) November 25,
2006.

 

c)                                      Beginning
on June 1, 2005 you and your family shall be entitled to continuation of
your Adaptec health, vision, dental and EAP benefits pursuant to the Consolidated
Omnibus Budget and Reconciliation Act (“COBRA”) at the Company’s expense for
eighteen months until November 30, 2006. 
You must sign up for COBRA to receive this benefit.  Information will be sent to your home within
four weeks from Ceridian.

 

d)                                     You
hereby acknowledge that you are bound by the Employee Proprietary Information
Agreement (the “Employee
Invention Agreement”) that you executed, and that as a result of
your employment with Adaptec you have had access to Adaptec’s proprietary
information and trade secrets, that you will hold all such proprietary
information and trade secrets in strictest confidence and that you will not
make use of such proprietary information and trade secrets on behalf of
anyone.  You further confirm that you
have delivered to Company all documents and data of any nature containing or
pertaining to such proprietary information and trade secrets and that you have
not taken with you any such documents or data or any reproduction thereof.  You also hereby acknowledge non-solicitation
obligations and non-compete agreements imposed on you remains in effect.

 

e)                                      You
will promptly submit to Adaptec, and Adaptec will promptly reimburse you for,
all of your business expenses (incurred consistent with Adaptec’s policies in
effect on May 25, 2005) attributable to the period on or prior to May 25,
2005.

 

f)                                        Adaptec
and you agree that the Indemnity Agreement you executed as of March 12, 1998
shall remain in effect to the extent provided therein.

 

g)                                     If
you relocate from the Milpitas area to Southern California by May 25,
2006, Adaptec will pay the brokerage commission and other costs associated with
sale of your home (up to a maximum of six percent (6%) of the selling price of
your home) and will also pay for the relocation costs of your furniture,
household goods and personal effects to Southern California.  To the extent possible, all Adaptec payments
shall be made directly to the third-party brokers or vendors.

 

2.                                       Consideration
for Agreement:  In consideration for the
payments and undertaking described herein, you (individually and on behalf of
your representatives, successors, and assigns) do hereby completely release and
forever discharge Adaptec, its shareholders, employees, owners, officers and
directors, Board Members, and all other representatives, agents, entities,
subsidiaries, divisions, directors, attorneys, successors, and assigns from all
claims, rights, demands, actions, obligations, and causes of action of any and
every kind, nature and 

 

2

 

character, known or unknown, which you may now have, or have ever had,
against them arising from or in any way connected with the employment
relationship between the parties, any actions during the relationship or the
termination thereof.  This Release covers
all statutory, common law, constitutional and other claims, including but not
limited to: all “wrongful discharge” and “constructive discharge” claims; all
claims relating to any contracts of employment, express or implied; any claims
for defamation, misrepresentation, fraud, or breach of the covenant of good
faith and fair dealing, express or implied; any claim for negligent or
intentional infliction of emotional distress; any claim for negligence; any
claims for attorney’s fees or costs; any tort claims of any nature; any claims
under federal, state or municipal statute or ordinance; any claims under the
California Fair Employment and Housing Act, Title VII of the Civil Rights Act
of 1964, the Civil Rights Act of 1991, 42 U.S.C. Section 1981, the
Americans With Disabilities Act, the Employee Retirement Income Security Act,
the California Labor and Civil Codes, the California Constitution, Federal
Rehabilitation Act of 1973, Federal Family and Medical Leave Act, the
California Family Rights Act, the Worker Adjustment and Retraining Notification
Act, Cal WARN, and any other laws and regulations relating to employment,
employment discrimination, and employment termination.  Notwithstanding the foregoing such release
shall not include your rights or benefits under this Agreement, or any rights
to indemnification you may have with the Company pursuant to the Company’s
certificate of incorporation, bylaws, agreement with the Company, state or
federal law or policy of insurance.

 

3.                                       Waiver
of Unknown Future Claims:  You have read Section 1542
of the Civil Code of the State of California, which provides as follows:

 

You acknowledge that Section 1542 gives
you the right not to release existing claims, of which you are not now aware,
unless you voluntarily choose to waive this right.  Having been so appraised, you hereby
voluntarily waive the rights described in Section 1542, and elect to
assume all risks for claims that now exist in your favor known or unknown,
arising from the subject matter of this Agreement.

 

4.                                       Preparation
of Agreement:  Regardless of which party
initially drafted this Agreement, it shall not be construed against any one
party, and shall be construed and enforced as a mutually prepared Agreement.

 

5.                                       Mandatory
Arbitration Clause:  You and Adaptec
agree that any action to enforce the terms and conditions of this Agreement or
for the breach of this Agreement, shall be referred to final and binding
arbitration.  Any arbitration proceeding
will be governed by the rules and procedures of the American Arbitration
Association and the Federal Arbitration Act and the parties hereto expressly
waive their rights, if any, to have any such matters heard by a court or jury,
or administrative agency whether federal or state.  The prevailing party in any arbitration to
enforce this Agreement or remedy its breach will be entitled to costs and
reasonable attorney’s fees incurred.

 

3

 

6.                                       Complete
and Voluntary Agreement:  This Agreement
constitutes the entire understanding of the parties on the subjects covered and
supersedes any other agreement or understanding the parties may have with
respect to the subject matter hereof. You expressly warrant that you have read
and fully understand this Agreement; that you have had the opportunity to seek
legal counsel of your own choosing and to have the terms of the Agreement fully
explained to you, that you are not executing this Agreement in reliance on any
promises, representations or inducements other than those contained herein, and
that you are executing this Agreement and Release voluntarily, free of any
duress or coercion.

 

(a)                                  You
have until July 15, 2005 in which to consider whether or not to sign this
Agreement, and that, having been advised of that entitlement, you may elect to
sign this Agreement at any time prior to the expiration of that time period.

 

(b)                                 You
may rescind within seven (7) calendar days of signing the Agreement the
provisions of Section 3 of this Agreement with respect to claims arising under
the Age Discrimination in Employment Act (“ADEA Rescission Period”).  To be effective, rescission must be in
writing, delivered to Shirley Olerich,
Adaptec Inc., 691 South Milpitas Blvd, M/S 15, Milpitas, CA 95035,
within the applicable rescission period, or sent to Adaptec, at such address,
by certified mail, return receipt requested, postmarked within the applicable
rescission period.

 

Cancellation of Agreement by Adaptec:  If you exercise your right of rescission
under Section 6 (b) of this Agreement, Adaptec will have the right to
terminate this Agreement in its entirety.

 

Effective Date:  This Agreement is effective on the eighth day
after it is signed by you and received by Adaptec HR.  If you wish to accept the terms of this
Agreement, please sign on the line provided below and return the original in
the enclosed self-addressed envelope.

 

Sincerely,

 

	
  /s/ Shirley Olerich

  	
   

  

 

Shirley Olerich

VP of Human Resources

 

I have read and understand the foregoing
Agreement above and agree to be bound by its terms and conditions.

 

Agreed:

 

	
  Dated: 

  	
  6/30/05

  	
   

  	
  BY:

  	
  Robert N. Stephens

  	
  /

  	
  /s/ Robert N. Stephens

  	
   

  
	
   

  	
  /

  	
  (Signature)

  

 

4Exhibit 10.1

 

 

SECOND MODIFICATION TO LOAN AND SECURITY AGREEMENT

 

This Second Modification to Loan and Security Agreement (this “Modification”)
is entered into by and between HEMACARE CORPORATION and CORAL BLOOD SERVICES,
INC. (“Borrower”) and COMERICA BANK (“Bank”) as of this 1st day of July,
2005, at San Jose, California.

 

RECITALS

 

This Modification is
entered into upon the basis of the following facts and understandings of the
parties, which facts and understandings are acknowledged by the parties to be
true and accurate:

 

Bank and Borrower previously entered into a Loan and Security Agreement
(Accounts and Inventory) dated November 19, 2002,
which was subsequently modified pursuant to that certain modification agreement
dated March 22, 2004.  The Loan and Security Agreement as so
modified, and as such may be
otherwise modified, amended, restated, supplemented, revised or replaced from
time to time prior to the date hereof shall collectively be referred to herein
as the “Agreement.”

 

NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as set forth
below.

 

AGREEMENT

 

1.             Incorporation
by Reference.  The Recitals and the
documents referred to therein are incorporated herein by this reference.  Except as otherwise noted, the terms not
defined herein shall have the meaning set forth in the Agreement.

 

2.             Modification
to the Agreement.  Subject to the
satisfaction of the conditions precedent as set forth in Section 3 hereof,
the Agreement is hereby modified as set forth below.

 

a.             In
Section 2.2 of the Agreement, the interest rate “Base Rate
plus 50/100 (0.500%)” is hereby deleted and replaced with the
interest rate “Base Rate minus 25/100 (0.250%)”.
 See LIBOR Addendum attached hereto and
made a part of this Agreement.

 

b.             In
Section 3.1 of the Agreement, the date “June 30,
2005” is hereby deleted and replaced with the date “June 30, 2007”.

 

c.             Section 6.5
first paragraph of the Agreement is hereby deleted in its entirety and replaced
with the following:

 

“6.5         Borrower
shall keep the Inventory only at the following locations: 21101 Oxnard Street,
Woodland Hills, CA 91367 / 1 Odell Plaza, Suite 145, Yonkers, NY 10701 /
162 Governors Trumbull Way, Trumbull, CT 06611 / 330 Mt. Auburn Street,
Cambridge, MA 02238 / 300 Professional Drive, Scarborough, ME 04074 / 992 Union
Street #6, Bangor, ME 04401 / 4954 Van Nuys Blvd., Van Nuys, CA 91403 / 2250
Alcazar Street #136, Los Angeles, CA 90033.”

 

d.             Section 6.6(d) of
the Agreement is hereby deleted in its entirety and replaced with the following:

 

“6.6(d)  Other than sales of Inventory in the ordinary
course of Borrower’s business, to sell, lease, or otherwise dispose of, move,
or transfer, whether by sale or otherwise, any of Borrower’s assets at any one
time between any of Borrower’s assets exceeding Fifty Thousand and no/100
Dollars ($50,000.00) in value.”

 

e.             Section 6.9(a) of
the Agreement is hereby deleted in its entirety and replaced with the following:

 

“6.9(a)  Borrower will not make any distribution or
declare or pay any dividend (in stock or in cash) to any shareholder or on any
of its capital stock, of any class, whether now or hereafter outstanding; provided,
however, so long as no Event of Default has or is continuing hereunder,
to the extent that and so long as Borrower is an entity that is not directly
subject to Federal income taxation and with respect to which any earnings are
attributable ratably to each Person with an ownership interest in Borrower,
Borrower may make distributions to each such Person in an amount necessary to
pay each such Person’s income tax resulting from such ownership interest in
Borrower, provided, further, that, promptly upon request of Bank, Borrower
shall cause each such Person to provide Bank with copies of its tax return to
substantiate any such distribution;”

 

f.              Section 6.11
of the Agreement is hereby deleted in its entirety and replaced with the following:

 

“6.11  Borrower shall promptly notify Bank in writing
of its acquisition by purchase, lease or otherwise of any after acquired
property, exceeding Fifty Thousand and no/100 Dollars ($50,000.00) in value, at
any one time of the type included in the Collateral, with the exception of
purchases of Inventory in the ordinary course of business.”

 

1

 

3.             Legal
Effect.

 

a.             Except
as specifically set forth in this Modification, all of the terms and conditions
of the Agreement remain in full force and effect.  Except as expressly set forth herein, the
execution, delivery, and performance of this Modification shall not operate as
a waiver of, or as an amendment of, any right, power, or remedy of Bank under
the Agreement, as in effect prior to the date hereof.  Borrower ratifies and reaffirms the
continuing effectiveness of all promissory notes, guaranties, security
agreements, mortgages, deeds of trust, environmental agreements, and all other
instruments, documents and agreements entered into in connection with the
Agreement.

 

b.             Borrower
represents and warrants that each of the representations and warranties contained
in the Agreement are true and correct as of the date of this Modification, and
that no Event of Default has occurred and is continuing.

 

c.             The
effectiveness of this Modification and each of the documents, instruments and agreements
entered into in connection with this Modification is conditioned upon receipt
by Bank of this Modification and any other documents which Bank may require to
carry out the terms.

 

d.             In
consideration for Bank’s willingness to enter into this Modification, Borrower
shall pay to Bank a non-refundable fee in the sum of Three Thousand Seven
Hundred Fifty and no/100 Dollars ($3,750.00), which shall be deemed earned by
Bank as of the date of this Modification and shall be payable by Borrower
concurrently with Borrower’s execution of this Modification.

 

4.             Miscellaneous
Provisions.

 

a.             This
is an integrated Modification and supersedes all prior negotiations and
agreements regarding the subject matter hereof. 
All amendments hereto must be in writing and signed by the parties.

 

b.             This
Modification may be executed in two or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute one
instrument.

 

IN WITNESS WHEREOF, the
parties have agreed as of the date first set forth above.

 

	
  HERMACARE CORPORATION

  	
  COMERICA BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Robert S.
  Chilton

  	
   

  	
  By:

  	
  /s/ Rudy Cedillos

  	
   

  
	
  Title:

  	
  Executive Vice
  President & CFO

  	
   

  	
   

  	
  Rudy Cedillos

  
	
   

  	
   

  	
  Vice President-Western Division

  
	
   

  	
   

  
	
  By:

  	
  /s/ Judi Irving

  	
   

  	
   

  
	
  Title:

  	
  CEO

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  CORAL BLOOD SERVICES, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Robert S.
  Chilton

  	
   

  	
   

  
	
  Title:

  	
  Executive Vice
  President & CFO

  	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Judi Irving

  	
   

  	
   

  
	
  Title:

  	
  CEO

  	
   

  	
   

  
							

 

2

 

LIBOR

Addendum To Loan and Security Agreement

 

This
LIBOR Addendum to Loan and Security Agreement (this “Addendum”) is entered into
as of this 1st day of July, 2005, by and between Comerica Bank (“Bank”)
and Hemacare Corporation and Coral Blood Services, Inc. (“Borrower”).  This Addendum supplements the terms of the
Loan and Security Agreement dated November 19, 2002 by and between
Borrower and Bank.

 

1.             Definitions.

 

a.             Advance.  As used herein, “Advance”
means a borrowing requested by Borrower and made by Bank under the Note,
including a LIBOR Option Advance and/or a Base Rate Option Advance.

 

b.             Business Day.  As
used herein, “Business Day” means any day except a Saturday, Sunday or any
other day designated as a holiday under Federal or California statute or
regulation.

 

c.             LIBOR.  As used herein, “LIBOR” means
the rate per annum (rounded upward if necessary, to the nearest whole 1/8 of
1%) and determined pursuant to the following formula:

 

	
  LIBOR =

  	
  Base
  LIBOR

  	
   

  
	
   

  	
  100%
  - LIBOR Reserve Percentage

  	
   

  

 

(1)           “Base LIBOR” means the rate per annum determined by Bank at which
deposits for the relevant LIBOR Period would be offered to Bank in the
approximate amount of the relevant LIBOR Option Advance in the inter-bank LIBOR
market selected by Bank, upon request of Bank at 10:00 a.m. California
time, on the day that is the first day of such LIBOR Period.

 

(2)           “LIBOR Reserve Percentage” means the reserve percentage prescribed by
the Board of Governors of the Federal Reserve System (or any successor)  for “Eurocurrency Liabilities” (as defined in
Regulation D of the Federal Reserve Board, as amended), adjusted by Bank for
expected changes in such reserve percentage during the applicable LIBOR Period.

 

d.             LIBOR Business Day.  As used herein, “LIBOR Business Day” means a
Business day on which dealings in Dollar deposits may be carried out in the
interbank LIBOR market.

 

e.             LIBOR Period.  As used herein, “LIBOR Period” means, with
respect to a LIBOR Option Advance:

 

(1)           initially, the period commencing on, as the case may be, the date the
Advance is made or the date on which the Advance is converted to a LIBOR Option
Advance, and continuing for, in every case, a thirty (30), sixty (60), or
ninety (90) day basis thereafter so long as the LIBOR Option is quoted for such
period in the applicable interbank LIBOR market, as such period is selected by
Borrower in the notice of Advance as provided in the Note or in the notice of
conversion as provided in this Addendum; and

 

(2)           thereafter, each period commencing on the last day of the next
preceding LIBOR Period applicable to such LIBOR Option Advance and continuing
for, in every case, a thirty (30), sixty (60), or ninety (90) day basis
thereafter so long as the LIBOR Option is quoted for such period in the
applicable interbank LIBOR market, as such period is selected by Borrower in
the notice of continuation as provided in this Addendum.

 

f.              Note.  As used herein, “Note” means
the Loan and Security Agreement dated November 19, 2002.

 

g.             Regulation D.  As
used herein, “Regulation D” means Regulation D of the Board of Governors of the
Federal Reserve System as amended or supplemented from time to time.

 

h.             Regulatory Development.  As
used herein, “Regulatory Development” means any or all of the following: (i) any
change in any law, regulation or interpretation thereof by any public authority
(whether or not having the force of law); (ii) the application of any
existing law, regulation or the interpretation thereof by any public authority
(whether or not having the force of law); and (iii) compliance by Bank
with any request or directive (whether or not having the force of law) of any
public authority.

 

2.             Interest Rate Options. 
Borrower shall have the following options regarding the interest rate to
be paid by Borrower on Advances under the Note:

 

a.             A rate equal to two percent (2.000%) above
Bank’s LIBOR, (the “LIBOR Option”), which LIBOR Option shall be in effect
during the relevant LIBOR Period; or

 

b.             A rate equal to one quarter of one percent
(0.250%) below the “Base Rate” as referenced in the Note and quoted from time
to time by Bank as such rate may change from time to time (the “Base Rate
Option”).

 

3.             LIBOR Option Advance.  The
minimum LIBOR Option Advance will not be less than Five Hundred thousand and
no/100 Dollars ($500,000.00) for any LIBOR Option Advance.

 

4.             Payment of Interest on LIBOR Option Advances. 
Interest on each LIBOR Option Advance shall be payable pursuant to the
terms of the Note.  Interest on such
LIBOR Option Advance shall be

 

1

 

computed on the basis of a 360-day
year and shall be assessed for the actual number of days elapsed from the first
day of the LIBOR Period applicable thereto but not including the last day
thereof.

 

5.             Bank’s Records Re:   LIBOR Option Advances.  With
respect to each LIBOR Option Advance, Bank is hereby authorized to note the
date, principal amount, interest rate and LIBOR Period applicable thereto and
any payments made thereon on Bank’s books and records (either manually or by
electronic entry) and/or on any schedule attached to the Note, which
notations shall be prima facie evidence of the accuracy of the information
noted.

 

6.             Selection/Conversion of Interest Rate Options.  At
the time any Advance is requested under the Note and/or Borrower wishes to
select the LIBOR Option for all or a portion of the outstanding principal balance
of the Note, and at the end of each LIBOR Period, Borrower shall give Bank
notice specifying (a) the interest rate option selected by Borrower; (b) the
principal amount subject thereto; and (c) if the LIBOR Option is selected,
the length of the applicable LIBOR Period. 
Any such notice may be given by telephone so long as, with respect to
each LIBOR Option selected by Borrower, (i) Bank receives written confirmation
from Borrower not later than three (3) LIBOR Business Days after such
telephone notice is given; and (ii) such notice is given to Bank prior to
10:00 a.m., California time, on the first day of the LIBOR Period.  For each LIBOR Option requested hereunder,
Bank will quote the applicable fixed LIBOR Rate to Borrower at approximately
10:00 a.m., California time, on the first day of the LIBOR Period.  If Borrower does not immediately accept the
rate quoted by Bank, any subsequent acceptance by Borrower shall be subject to
a redetermination of the rate by Bank; provided, however, that if Borrower
fails to accept any such quotation given, then the quoted rate shall expire and
Bank shall have no obligation to permit a LIBOR Option to be selected on such
day.  If no specific designation of
interest is made at the time any Advance is requested under the Note or at the
end of any LIBOR Period, Borrower shall be deemed to have selected the Base
Rate Option for such Advance or the principal amount to which such LIBOR Period
applied.  At any time the LIBOR Option is
in effect, Borrower may, at the end of the applicable LIBOR Period, convert to
the Base Rate Option.  At any time the
Base Rate Option is in effect, Borrower may convert to the LIBOR OPTION, and
shall designate a LIBOR Period.

 

7.             Default Interest Rate.  From
and after the maturity date of the Note, or such earlier date as all principal
owing hereunder becomes due and payable by acceleration or otherwise, the
outstanding principal balance of the Note shall bear interest until paid in
full at an increased rate per annum (computed on the basis of a 360-day year,
actual days elapsed) equal to three percent (3.00%) above the rate of interest
from time to time applicable to the Note.

 

8.             Prepayment.  In the event that the LIBOR
Option is the applicable interest rate for all or any part of the outstanding
principal balance of the Note, and any payment or prepayment of any such
outstanding principal balance of the Note shall occur on any day other than the
last day of the applicable LIBOR Period (whether voluntarily, by acceleration,
required payment, or otherwise), or if Borrower elects the LIBOR Option as the
applicable interest rate for all or any part of the outstanding principal
balance of the Note in accordance with the terms and conditions hereof, and,
subsequent to such election, but prior to the commencement of the applicable
LIBOR Period, Borrower revokes such election for any reason whatsoever, or if
the applicable interest rate in respect of any outstanding principal balance of
the Note hereunder shall be changed, for any reason whatsoever, from the LIBOR
Option to the Base Rate Option prior to the last day of the applicable LIBOR
Period, or if Borrower shall fail to make any payment of principal or interest
hereunder at any time that the LIBOR Option is the applicable interest rate
hereunder in respect of such outstanding principal balance of the Note,
Borrower shall reimburse Bank, on demand, for any resulting loss, cost or
expense incurred by Bank as a result thereof, including, without limitation, any
such loss, cost or expense incurred in obtaining, liquidating, employing or
redeploying deposits from third parties.  Such amount payable by Borrower to Bank may
include, without limitation, an amount equal to the excess, if any, of (a) the
amount of interest which would have accrued on the amount so prepaid, or not so
borrowed, refunded or converted, for the period from the date of such
prepayment or of such failure to borrow, refund or convert, through the last
day of the relevant LIBOR Period, at the applicable rate of interest for such
outstanding principal balance of the Note, as provided under this Note, over
(b) the amount of interest (as reasonably determined by Bank) which would have
accrued to Bank on such amount by placing such amount on deposit for a
comparable period with leading banks in the interbank LIBOR market.  Calculation of any amounts payable to Bank
under this paragraph shall be made as though Bank shall have actually funded or
committed to fund the relevant outstanding principal balance of the Note
hereunder through the purchase of an underlying deposit in an amount equal to
the amount of such outstanding principal balance of the Note and having a
maturity comparable to the relevant LIBOR Period; provided, however, that Bank
may fund the outstanding principal balance of the Note hereunder in any manner
it deems fit and the foregoing assumptions shall be utilized only for the
purpose of the calculation of amounts payable under this paragraph.  Upon the written request of Borrower, Bank shall
deliver to Borrower a certificate setting forth the basis for determining such
losses, costs and expenses, which certificate shall be conclusively presumed
correct, absent manifest error.  Any
prepayment hereunder shall also be accompanied by the payment of all accrued
and unpaid interest on the amount so prepaid.  Any outstanding principal balance of the Note
which is bearing interest at such time at the Base Rate Option may be prepaid
without penalty or premium.  Partial
prepayments hereunder shall be applied to the installments hereunder in the
inverse order of their maturities.

 

BY INITIALING BELOW, BORROWER ACKNOWLEDGE(S) AND
AGREE(S) THAT: (A) THERE IS NO RIGHT TO PREPAY ANY LIBOR OPTION ADVANCE,
IN WHOLE OR IN PART, WITHOUT PAYING THE PREPAYMENT AMOUNT SET FORTH HEREIN (“PREPAYMENT
AMOUNT”), EXCEPT AS OTHERWISE REQUIRED UNDER APPLICABLE LAW; (B) BORROWER
SHALL BE LIABLE FOR PAYMENT OF THE PREPAYMENT AMOUNT IF BANK EXERCISES ITS
RIGHT TO ACCELERATE PAYMENT OF ANY LIBOR OPTION ADVANCE AS PART OR ALL OF
THE OBLIGATIONS OWING UNDER THE NOTE, INCLUDING WITHOUT LIMITATION,
ACCELERATION UNDER A DUE-ON-SALE PROVISION; (C) BORROWER WAIVES ANY RIGHTS
UNDER SECTION 2954.10 OF THE CALIFORNIA CIVIL CODE OR ANY SUCCESSOR
STATUTE; AND (D) BANK HAS MADE EACH LIBOR OPTION ADVANCE PURSUANT TO THE
NOTE IN RELIANCE ON THESE AGREEMENTS.

 

2

 

	
  /s/ RSC

  	
  /s/ JI

  	
   

  
	
  BORROWER’S INITIALS

  	
   

  

 

9.             Hold Harmless and Indemnification. 
Borrower agrees to indemnify Bank and to hold Bank harmless from, and to
reimburse Bank on demand for, all losses and expenses which Bank sustains or incurs
as a result of (i) any payment of a LIBOR Option Advance prior to the last
day of the applicable LIBOR Period for any reason, including, without limitation,
termination of the Note, whether pursuant to this Addendum or the occurrence of
an Event of Default; (ii) any termination of a LIBOR Period prior to the
date it would otherwise end in accordance with this Addendum; or (iii) any
failure by Borrower, for any reason, to borrow any portion of a LIBOR Option
Advance.

 

10.           Funding Losses.  The
indemnification and hold harmless provisions set forth in this Addendum shall
include, without limitation, all losses and expenses arising from interest and
fees that Bank pays to lenders of funds it obtains in order to fund the loans
to Borrower on the basis of the LIBOR Option(s) and all losses incurred in
liquidating or re-deploying deposits from which such funds were obtained and
loss of profit for the period after termination.  A written statement by Bank to Borrower of
such losses and expenses shall be conclusive and binding, absent manifest
error, for all purposes.  This obligation
shall survive the termination of this Addendum and the payment of the Note.

 

11.           Regulatory Developments Or Other
Circumstances Relating To Illegality or Impracticality of LIBOR.  If
any Regulatory Development or other circumstances relating to the interbank
Euro-dollar markets shall, at any time, in Bank’s reasonable determination,
make it unlawful or impractical for Bank to fund or maintain, during any LIBOR
Period, to determine or charge interest rates based upon LIBOR, Bank shall give
notice of such circumstances to Borrower and:

 

(i)            In the case of a LIBOR Period in progress,
Borrower shall, if requested by Bank, promptly pay any interest which had
accrued prior to such request and the date of such request shall be deemed to
be the last day of the term of the LIBOR Period; and

(ii)           No LIBOR Period may be designated thereafter until Bank determines that
such would be practical.

 

12.           Additional Costs. 
Borrower shall pay to Bank from time to time, upon Bank’s request, such amounts
as Bank determines are needed to compensate Bank for any costs it incurred
which are attributable to Bank having made or maintained a LIBOR Option Advance
or to Bank’s obligation to make a LIBOR Option Advance, or any reduction in any
amount receivable by Bank hereunder with respect to any LIBOR Option or such
obligation (such increases in costs and reductions in amounts receivable being herein
called “Additional Costs”), resulting from any Regulatory Developments, which (i) change
the basis of taxation of any amounts payable to Bank hereunder with respect to
taxation of any amounts payable to Bank hereunder with respect to any LIBOR
Option Advance (other than taxes imposed on the overall net income of Bank for
any LIBOR Option Advance by the jurisdiction where Bank is headquartered or the
jurisdiction where Bank extends the LIBOR Option Advance; (ii) impose or
modify any reserve, special deposit, or similar requirements relating to any
extensions of credit or other assets of, or any deposits with or other
liabilities of, Bank (including any LIBOR Option Advance or any deposits referred
to in the definition of LIBOR); or (iii) impose any other condition
affecting this Addendum (or any of such extension of credit or liabilities).  Bank shall notify Borrower of any event
occurring after the date hereof which entitles Bank to compensation pursuant to
this paragraph as promptly as practicable after it obtains knowledge thereof
and determines to request such compensation. 
Determinations by Bank for purposes of this paragraph, shall be
conclusive, provided that such determinations are made on a reasonable basis.

 

13.           Legal Effect. 
Except as specifically modified hereby, all of the terms and conditions
of the Note remain in full force and effect.

 

IN WITNESS WHEREOF, the
parties have agreed to the foregoing as of the date first set forth above.

 

	
  HERMACARE CORPORATION

  	
  COMERICA BANK

  
	
   

  	
   

  
	
  By:

  	
  /s/ Robert S. Chilton

  	
   

  	
  By:

  	
  /s/ Rudy Cedillos

  	
   

  
	
   

  	
   

  	
   

  	
  Rudy Cedillos

  
	
  Title:

  	
  Ex. Vice President
  & CFO

  	
   

  	
   

  	
  Vice President-Western
  Division

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Judi Irving

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  CEO

  	
   

  	
   

  
	
   

  	
   

  
	
  CORAL BLOOD SERVICES, INC.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Robert S. Chilton

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  Ex. Vice President
  & CFO

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Judi Irving

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  CEO

  	
   

  	
   

  
											

 

3

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