Exhibit 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.
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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 th
