UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of the earliest event reported): July 5, 2011
HEMACARE CORPORATION
(Exact name of registrant as specified in its charter)
| California | 000-15223 | 95-3280412 |
| (State or other jurisdiction of incorporation or organization) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
15350 Sherman Way, Suite 350, Van Nuys, CA 91406
(Address of principal executive offices) (Zip Code)
(818) 226-1968
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[_] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement
On July 5, 2011, HemaCare Corporation (the “Company”) entered into a Second Amendment to Credit Agreement (the “Amendment”) with Wells Fargo Bank (the “Bank’), pursuant to which the parties amended that certain Credit Agreement, dated December 4, 2009, as previously amended to date (the “Credit Agreement”), by and among the Company, the Bank and Coral Blood Services, Inc. (“Coral”).
Pursuant to the Amendment:
(a) outstanding borrowings, including outstanding advances and letters of credit, under the Credit Agreement shall not at any time exceed $660,150.00, which is the amount outstanding under the Credit Agreement as of the date of the Amendment and is the amount of cash collateral the Company maintains in a segregated, blocked deposit account with the Bank, in which the Bank has been granted a security interest of first priority to secure all present and future indebtedness of the Company to the Bank;
(b) the Bank released its security interests on all assets of the Company and Coral other than a security interest on the cash collateral the Company maintains in a segregated, blocked deposit account with the Bank, and terminated certain ancillary agreements pursuant to which the Bank perfected its security interest in certain assets of the Company and Coral; and
(c) the Credit Agreement was amended to modify and delete certain affirmative and negative covenants of the Company and Coral.
In connection with the Amendment, the Company also entered into a Second Modification to Promissory Note, dated July 5, 2011, to modify the maximum principal amount available under the note to be $660,150.00.
The foregoing summary of the Amendment is qualified in its entirety by the actual agreements attached hereto as Exhibits 10.1 and 10.2 and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
The following exhibits are filed herewith:
| Exhibit Number |
Description | |
| 10.1 | Second Amendment to Credit Agreement, dated July 5, 2011, among Wells Fargo Bank, HemaCare Corporation and Coral Blood Services, Inc. | |
| 10.2 | Second Modification to Promissory Note, dated July 5, 2011, among HemaCare Corporation, Coral Blood Services, Inc. and Wells Fargo Bank. |
| 2 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: July 6, 2011 | HEMACARE CORPORATION | ||
| By | /s/ Lisa Bacerra | ||
| Lisa Bacerra, | |||
| Chief Financial Officer | |||
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EXHIBIT INDEX
| Exhibit | |
| Number | Description |
| 10.1 | Second Amendment to Credit Agreement, dated July 5, 2011, among Wells Fargo Bank, HemaCare Corporation and Coral Blood Services, Inc. |
| 10.2 | Second Modification to Promissory Note, dated July 5, 2011, among HemaCare Corporation, Coral Blood Services, Inc. and Wells Fargo Bank. |
| 4 |
Exhibit 10.1
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is entered into as of July 5, 2011, by and between HEMACARE CORPORATION, a California corporation and CORAL BLOOD SERVICES, INC., a California corporation (each individually a "Borrower"), and WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank"). Each reference herein to “Borrower” shall mean each and every party, collectively and individually, defined above as a Borrower.
RECITALS
WHEREAS, Borrower is currently indebted to Bank pursuant to the terms and conditions of that certain Credit Agreement between Borrower and Bank dated as of December 4, 2009, as amended by that certain letter agreement dated January 15, 2011 (as amended, the "Credit Agreement");
WHEREAS, Bank and Borrower have agreed to certain changes in the terms and conditions set forth in the Credit Agreement and have agreed to amend the Credit Agreement to reflect said changes.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree that the Credit Agreement shall be amended as follows:
1. Section 1.1 (a) is hereby amended by deleting "Five Million Dollars ($5,000,000.00)" as the maximum principal amount available under the Line of Credit, and by substituting for said amount "Six Hundred Sixty Thousand One Hundred Fifty Dollars ($660,150.00)."
2. Section 1.1 (c) is hereby amended by deleting "Nine Hundred Thousand Dollars ($900,000.00)" as the maximum principal amount available under the subfeature for Letters of Credit under the Line of Credit, and by substituting for said amount "Six Hundred Sixty Thousand One Hundred Fifty Dollars ($660,150.00)."
3. Section 1.4 is hereby deleted in its entirety, and the following substituted therefor:
“SECTION 1.4. COLLATERAL.
As security for all indebtedness and other obligations of Borrower to Bank subject hereto, Borrower hereby grants to Bank security interests of first priority in Borrower’s Certificate of Deposit number 5321120262 maintained with or issued by Bank (the “Retained Collateral”).
All of the foregoing shall be evidenced by and subject to the terms of such security agreements, financing statements, deeds or mortgages, and other documents as Bank shall reasonably require, all in form and substance satisfactory to Bank. Borrower shall pay to Bank immediately upon demand the full amount of all charges, costs and expenses (to include fees paid to third parties and all allocated costs of Bank personnel), expended or incurred by Bank in connection with any of the foregoing security, including without limitation, filing and recording fees and costs of appraisals, audits and title insurance.”
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4. Section 4.3 (d) is hereby deleted in its entirety, without substitution.
5. Sections 5.2, 5.4, 5.5 and 5.6 are hereby deleted in their entirety, without substitution.
6. Section 5.3 is hereby deleted in its entirety, and the following substituted therefor:
“SECTION 5.3. MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Merge into or consolidate with any other entity; nor sell, lease, transfer or otherwise dispose of all or substantially all of Borrower's assets.”
7. At such time as this Amendment becomes effective, all liens and security interests created by, arising under or granted to Bank pursuant to the Credit Agreement, including liens and security interests created by, arising under, or granted to Bank pursuant to the Discharged Agreements (as defined below), shall automatically terminate and be released, except for the liens and security interests granted Bank in the Retained Collateral. Bank shall as soon as practicable file in the applicable filing and recording offices such UCC termination statements and other documents as may be necessary or appropriate to reflect the termination and release of liens and security interests as provided in this paragraph 7.
8. Each of the following agreements (the “Discharged Agreements”) is hereby terminated and Borrower shall have no further obligations to Bank thereunder:
(i) Third Party Security Agreement: Rights to Payment and Inventory between Coral Blood Services, Inc. and Wells Fargo Bank, dated December 4, 2009;
(ii) Third Party Security Agreement: Rights to Payment and Inventory between HemaCare Corporation, and Wells Fargo Bank, dated December 4, 2009;
(iii) Continuing Security Agreement: Rights to Payment and Inventory among HemaCare Corporation, Coral Blood Services, Inc. and Wells Fargo Bank, dated December 4, 2009;
(iv) Third Party Security Agreement: Equipment between Coral Blood Services, Inc. and Wells Fargo Bank, dated December 4, 2009;
(v) Third Party Security Agreement: Equipment between HemaCare Corporation, and Wells Fargo Bank, dated December 4, 2009; and
(vi) Security Agreement Equipment among HemaCare Corporation, Coral Blood Services, Inc. and Wells Fargo Bank, dated December 4, 2009.
9. Except as specifically provided herein, all terms and conditions of the Credit Agreement remain in full force and effect, without waiver or modification. All terms defined in the Credit Agreement shall have the same meaning when used in this Amendment. This Amendment and the Credit Agreement shall be read together, as one document.
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10. Borrower hereby remakes all representations and warranties contained in the Credit Agreement and reaffirms all covenants set forth therein, as modified hereby. Borrower further certifies that as of the date of this Amendment there exists no Event of Default as defined in the Credit Agreement, nor any condition, act or event which with the giving of notice or the passage of time or both would constitute any such Event of Default.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the day and year first written above.
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HEMACARE CORPORATION
By: /s/ Pete van der Wal Pete van der Wal, Chief Executive Officer |
WELLS FARGO BANK, NATIONAL ASSOCIATION
By: /s/ Seth W. Evenson Seth W. Evenson, Relationship Manager |
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By: /s/ Lisa Bacerra Lisa Bacerra, Chief Financial Officer, Secretary |
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CORAL BLOOD SERVICES, INC.
By: /s/ Pete van der Wal Pete van der Wal, Chief Executive Officer |
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By: /s/ Lisa Bacerra Lisa Bacerra, Chief Financial Officer, Secretary |
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Exhibit 10.2
SECOND MODIFICATION TO PROMISSORY NOTE
THIS MODIFICATION TO PROMISSORY NOTE (this “Modification”) is entered into as of July 5, 2011, by and between HEMACARE CORPORATION and CORAL BLOOD SERVICES, INC. (“Borrower”), and WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”).
RECITALS
WHEREAS, Borrower is currently indebted to Bank pursuant to the terms and conditions of that certain Revolving Line of Credit Note in the maximum principal amount of $5,000,000.00, executed by Borrower and payable to the order of Bank, dated as of December 4, 2009 (the "Note"), which Note is subject to the terms and conditions of a loan agreement between Borrower and Bank dated as of December 4, 2009, as amended from time to time (the "Loan Agreement").
WHEREAS, Bank and Borrower have agreed to certain changes in the terms and conditions set forth in the Note, and have agreed to modify the Note to reflect said changes.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree that the Note shall be modified as follows:
1. The maximum principal amount available under the Note is hereby modified to be Six Hundred Sixty Thousand One Hundred Fifty Dollars ($660,150.00).
2. The effective date of the changes set forth herein shall be July 5 , 2011.
3. Except as expressly set forth herein, all terms and conditions of the Note remain in full force and effect, without waiver or modification. All terms defined in the Note or the Loan Agreement shall have the same meaning when used in this Modification. This Modification and the Note shall be read together, as one document.
4. Borrower certifies that as of the date of this Modification there exists no Event of Default under the Note, nor any condition, act or event which with the giving of notice or the passage of time or both would constitute any such Event of Default.
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IN WITNESS WHEREOF, the parties hereto have caused this Modification to be executed as of the day and year first written above.
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HEMACARE CORPORATION
By: /s/ Pete van der Wal Pete van der Wal, Chief Executive Officer |
WELLS FARGO BANK, NATIONAL ASSOCIATION
By: /s/ Seth W. Evenson Seth W. Evenson, Relationship Manager |
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By: /s/ Lisa Bacerra Lisa Bacerra, Chief Financial Officer, Secretary |
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CORAL BLOOD SERVICES, INC.
By: /s/ Pete van der Wal Pete van der Wal, Chief Executive Officer |
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By: /s/ Lisa Bacerra Lisa Bacerra, Chief Financial Officer, Secretary |
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