Document:

Exhibit 10.6

 

THIRD
PARTY SECURITY AGREEMENT:

EQUIPMENT

 

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 goods, tools, machinery,
furnishings, furniture and other equipment, now or at any time hereafter, and
prior to the termination hereof, owned or acquired by Owner, wherever located,
whether in the possession of Owner or any other person and whether located on
Owner’s property or elsewhere, and all improvements, replacements, accessions
and additions thereto and embedded software included therein (collectively
called “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, (a) all accounts, contract rights, chattel
paper (whether electronic or tangible), instruments, promissory notes,
documents, general intangibles, payment intangibles and other rights to payment
of every kind now or at any time hereafter arising out of any such sale, lease,
collection, exchange or other disposition of any of the foregoing, (b) all
rights to payment, including returned premiums, with respect to any insurance
relating to any of the foregoing, and (c) 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 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.

 

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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 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 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; and (vii) Owner
is not in the business of selling goods of the kind included within the
Collateral subject to this Agreement, and Owner acknowledges that no sale or
other disposition of any Collateral, including without limitation, any
Collateral which Owner may deem to be surplus, has been or shall be consented
to or acquiesced in by Bank, except as specifically set forth in writing by
Bank.

 

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(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 of the 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 the Collateral 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) to operate the
Collateral in accordance with all applicable statutes, rules and
regulations relating to the use and control thereof, and not to use the
Collateral for any unlawful purpose or in any way that would void any insurance
required to be carried in connection therewith; (iv) not to permit any
lien on the Collateral or Proceeds, including without limitation, liens arising
from repairs to or storage of the Collateral, except in favor of Bank; (v) to
pay when due all license fees, registration fees and other charges in
connection with any Collateral; (vi) not to remove the Collateral from
Owner’s premises except in the ordinary course of Owner’s business; (vii) not
to sell, hypothecate or otherwise dispose of, nor permit the transfer by
operation of law of, any of the Collateral or Proceeds or any interest therein;
(viii) not to rent, lease or charter the Collateral; (ix) to permit
Bank to inspect the Collateral at any time; (x) 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; (xi) if requested by Bank, to
receive and use reasonable diligence to collect Proceeds, in trust and as the
property of Bank, and to immediately endorse as appropriate and deliver such
Proceeds to Bank daily in the exact form in which they are received together
with a collection report in form satisfactory to Bank; (xii) not to commingle
Proceeds or collections thereunder with other property; (xiii) to give only
normal allowances and credits and to advise Bank thereof immediately in writing
if they affect any Collateral or Proceeds in any material respect; (xiv) in the
event Bank elects to receive payments of Proceeds hereunder, to pay all
expenses incurred 

 

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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 (xv) 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
the Collateral in good and saleable condition and repair, to deal with the
Collateral in accordance with the standards and practices adhered to generally
by owners 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 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 or replacement of the
Collateral; (I) to exercise all rights, powers and remedies which Owner
would have, but for this Agreement, with respect to all the Collateral and
Proceeds subject hereto; (m) to enter onto Owner’s premises in inspecting
the Collateral; and (n) 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.

 

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(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 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

 

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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.

 

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. Owner further agrees that Bank shall have no obligation to process
or prepare any Collateral for sale or other disposition.

 

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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 principal
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.

 

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
the 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.

 

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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.

 

(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.

 

8

 

(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.

 

(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

 

9

 

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.

 

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 Financial Officer

  	
   

  
				

 

10Exhibit 10.7

 

THIRD
PARTY SECURITY AGREEMENT:

EQUIPMENT

 

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 HemaCare Corporation (“Owner”) hereby grants and transfers
to Bank a security interest in all goods, tools, machinery, furnishings,
furniture and other equipment, now or at any time hereafter, and prior to the
termination hereof, owned or acquired by Owner, wherever located, whether in
the possession of Owner or any other person and whether located on Owner’s
property or elsewhere, and all improvements, replacements, accessions and
additions thereto and embedded software included therein (collectively called “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, (a) all accounts, contract rights, chattel paper (whether
electronic or tangible), instruments, promissory notes, documents, general
intangibles, payment intangibles and other rights to payment of every kind now
or at any time hereafter arising out of any such sale, lease, collection,
exchange or other disposition of any of the foregoing, (b) all rights to
payment, including returned premiums, with respect to any insurance relating to
any of the foregoing, and (c) 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 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.

 

1

 

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 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 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; and (vii) Owner is
not in the business of selling goods of the kind included within the Collateral
subject to this Agreement, and Owner acknowledges that no sale or other
disposition of any Collateral, including without limitation, any Collateral
which Owner may deem to be surplus, has been or shall be consented to or
acquiesced in by Bank, except as specifically set forth in writing by Bank.

 

2

 

(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 of the 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 the Collateral 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) to operate the
Collateral in accordance with all applicable statutes, rules and
regulations relating to the use and control thereof, and not to use the
Collateral for any unlawful purpose or in any way that would void any insurance
required to be carried in connection therewith; (iv) not to permit any
lien on the Collateral or Proceeds, including without limitation, liens arising
from repairs to or storage of the Collateral, except in favor of Bank; (v) to
pay when due all license fees, registration fees and other charges in
connection with any Collateral; (vi) not to remove the Collateral from
Owner’s premises except in the ordinary course of Owner’s business; (vii) not
to sell, hypothecate or otherwise dispose of, nor permit the transfer by
operation of law of, any of the Collateral or Proceeds or any interest therein;
(viii) not to rent, lease or charter the Collateral; (ix) to permit
Bank to inspect the Collateral at any time; (x) 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; (xi) if requested by Bank, to
receive and use reasonable diligence to collect Proceeds, in trust and as the
property of Bank, and to immediately endorse as appropriate and deliver such
Proceeds to Bank daily in the exact form in which they are received together
with a collection report in form satisfactory to Bank; (xii) not to commingle
Proceeds or collections thereunder with other property; (xiii) to give only
normal allowances and credits and to advise Bank thereof immediately in writing
if they affect any Collateral or Proceeds in any material respect; (xiv) in the
event Bank elects to receive payments of Proceeds hereunder, to pay all
expenses incurred 

 

3

 

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 (xv) 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
the Collateral in good and saleable condition and repair, to deal with the
Collateral in accordance with the standards and practices adhered to generally
by owners 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 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 or replacement of the Collateral; (I) to
exercise all rights, powers and remedies which Owner would have, but for this
Agreement, with respect to all the Collateral and Proceeds subject hereto; (m) to
enter onto Owner’s premises in inspecting the Collateral; and (n) 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.

 

4

 

(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
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 

 

5

 

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.

 

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. Owner further agrees that Bank shall have no obligation to process
or prepare any Collateral for sale or other disposition.

 

6

 

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 principal
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.

 

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
the 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.

 

7

 

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.

 

(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.

 

8

 

(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.

 

(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 

 

9

 

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.

 

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.

 

	
  HEMACARE CORPORATION

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/

  	
  John Doumitt

  	
   

  
	
   

  	
  John Doumitt

  	
   

  
	
   

  	
  Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/  Robert S. Chilton

  	
   

  
	
   

  	
  Robert S. Chilton

  	
   

  
	
   

  	
  Executive
  Vice President and Chief Financial Officer

  	
   

  
				

 

10

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