HEMACARE CORPORATION INDEMNIFICATION AGREEMENT
Exhibit
99.1
HEMACARE
CORPORATION
This
Indemnification Agreement (the Agreement), dated as of November 9, 2007 is
made
and effective as of the date set forth in Section 14 of the Agreement, by and
between HemaCare Corporation, a California corporation (the Corporation), and
Xxxxxx Xxxxxxxxxxxx, a director and/or officer of the Corporation (the
Indemnitee).
RECITALS
A. The
Corporation and the Indemnitee recognize that the present state of the law
relating to director and officer liability is too uncertain to provide the
Corporation's directors and officers with adequate and reliable advance
knowledge or guidance with respect to the legal risks and potential liabilities
to which they may become personally exposed as a result of performing their
duties for the Corporation;
B. The
Corporation and the Indemnitee are aware of the substantial growth in the number
of lawsuits filed against corporate directors and officers in connection with
their activities in such capacities and by reason of their status as
such;
C. The
Corporation and the Indemnitee recognize that the cost of defending against
such
lawsuits, whether or not meri-torious, is typically beyond the financial
resources of most directors and officers of the Corporation;
D. The
Corporation and the Indemnitee recognize that the legal risks and potential
liabilities, and the threat thereof, associated with proceedings filed against
the directors and officers of the Corporation bear no reasonable relationship
to
the amount of compensation received by the Corporation's directors and
officers;
E. The
Corporation, after reasonable investigation prior to the date hereof, has
determined that the liability insur-ance coverage available to the Corporation
as of the date hereof is inadequate, unreasonably expensive or both. The
Corporation believes, therefore, that the interest of the Corporation's
stockholders would be best served by a combination of (i) insurance, as provided
in Section 8 below, and (ii) a contract with its directors and officers,
including the Indemnitee, to indemnify them to the fullest extent permitted
by
law (as in effect on the date hereof, or, to the extent any amendment may expand
such permitted indemnification, as hereafter in effect) against personal
liability for actions taken in the performance of their duties to the
Corporation;
F. The
Corporation's Articles of Incorporation and Bylaws authorize the indemnification
of the directors and officers of the Corporation, subject to the limitations
set
forth in Section 317 of the California Corporations Code;
G. The
Board
of Directors of the Corporation has concluded that, to retain and attract
talented and experienced individuals to serve as directors and officers of
the
Corporation and to encourage such individuals to take the business risks
necessary for the success of the Corporation, it is necessary for the
Corporation to contractually indemnify its directors and officers, and to assume
for itself liability for expenses and damages in connection with certain claims
against such directors and officers in connection with their service to the
Corporation, and has further concluded that the failure to provide such
contractual indemnifi-cation could result in great harm to the Corporation
and
its stockholders;
H. The
Corporation desires and has requested the Indemnitee to serve or continue to
serve as a director or officer of the Corporation, free from undue concern
for
the risks and potential liabilities associated with such services to the
Corporation; and
I. The
Indemnitee is willing to serve, or continue to serve, the Corporation, provided,
and on the expressed condition, that he is furnished with the indemnification
provided for herein.
AGREEMENT
NOW,
THEREFORE, the Corporation and Indemnitee agree as follows:
1. Definitions.
a. "Expenses"
means, for the purposes of this Agreement, all direct and indirect costs of
any
type or nature whatsoever (including, without limitation, any fees and
disburse-ments of Indemnitee's counsel, accountants and other experts and other
out-of-pocket costs) actually and reasonably incurred by the Indemnitee in
connection with the investigation, preparation, defense or appeal of a
Proceeding; provided, however, that Expenses shall not include judgments, fines,
penalties or amounts paid in settlement of a Proceeding.
b. "Other
enterprise" includes, for the purposes of this Agreement, employee benefit
plans; references to "fines" includes any excise taxes assessed on Indemnitee
with respect to an employee benefit plan; and references to "serving at the
request of the Corporation" includes any service as a director, officer,
employee or agent of the Corporation which imposes duties on, or involves
services by, such director, officer, employee or agent with respect to an
employee benefit plan, its participants or its beneficiaries; and if Indemnitee
acted in good faith and in a manner Indemnitee reasonably believed to be in
the
interest of the participants and beneficiaries of an employee benefit plan,
Indemnitee shall be deemed to have acted in a manner "not opposed to the best
interests of the Corporation" as referred to in this Agreement.
c. "Proceeding"
means, for the purposes of this Agreement, any threatened, pending, or completed
action, suit or proceed-ing, whether civil, criminal, administrative or
investigative (including an action brought by or in the right of the
Corporation) in which Indemnitee may be or may have been involved as a party
or
otherwise, by reason of the fact that Indemnitee is or was a director or officer
of the Corporation, by reason of any action taken by Indemnitee or of any
inaction on Indemnitee's part while acting as such director or officer or by
reason of the fact that Indemnitee is or was serving at the request of the
Corporation as a director, officer, employee or agent of another foreign or
domestic corporation, partnership, joint venture, trust or other enterprise,
or
was a director and/or officer of the foreign or domestic corporation which
was a
predecessor corporation to the Corporation or of another enterprise at the
request of such predecessor corporation, whether or not Indemnitee is serving
in
such capacity at the time any liability or expense is incurred for which
indemnification or reimbursement can be provided under this
Agreement.
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2.
Agreement
to Serve. In
consideration of the protection afforded by this Agreement, if Indemnitee
is a
director of the Corporation, Indemnitee agrees to serve at least for the
balance
of the current term as a director and not to resign voluntarily during
such
period without the written consent of a majority of the Board of Directors.
If
Indemnitee is an officer of the corporation not serving under an employment
contract, Indemnitee agrees to serve in such capacity at least for the
balance
of the current fiscal year of the Corporation and not to resign voluntarily
during such period without the written consent of a majority of the Board
of
Directors. Following the applicable period set forth above, Indemnitee
agrees to
serve or continue to serve in such capacity as a director or officer of
the
Corporation to the best of his or her abilities at the will of the Corporation
or under separate contract, if such contract exists, for so long as Indem-xxxxx
is duly elected or appointed and qualified or until such time as Indemnitee
tenders his or her resignation in writing. Nothing contained in this Agreement
is intended to create in Indemnitee any right to continued
employment.
3. Indemnification.
a. Third
Party Proceedings.
The
Corporation shall indemnify Indemnitee against Expenses, judgments, fines,
penalties or amounts paid in settlement (if the settlement is approved in
advance by the Corporation) actually and reasonably incurred by Indemnitee
in
connection with a Proceeding (other than a Proceeding by or in the right of
the
Corporation) if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe Indemnitee's conduct was unlawful. The termination
of any Proceeding by judgment, order, settlement, conviction, or upon a plea
of
nolo
contendere
or its
equivalent, shall not, of itself, create a presumption that Indemnitee did
not
act in good faith and in a manner which Indemnitee reasonably believed to be
in
or not opposed to the best interests of the Corporation, and, with respect
to
any criminal Proceeding, had no reasonable cause to believe that Indemnitee's
conduct was unlawful.
b. Proceedings
by or in the Right of the Corporation.
To the
fullest extent permitted by law, the Corporation shall indemnify Indemnitee
against Expenses and amounts paid in settlement, actually and reasonably
incurred by Indemnitee in connection with a Proceeding by or in the right of
the
Corporation to procure a judgment in its favor if Indemnitee acted in good
faith
and in a manner Indemnitee reasonably believed to be in or not opposed to the
best interests of the Corporation. Notwithstanding the foregoing, no
indemnification shall be made in respect of any claim, issue or matter as to
which Indemnitee shall have been adjudged liable to the Corporation unless
and
only to the extent that the state court of California or the court in which
such
action or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case,
Indemnitee is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court deems proper.
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c. Scope.
Notwithstanding any other provision of this Agreement but subject to Section
13(b), the Corporation shall indemnify the Indemnitee to the fullest extent
permitted by law, notwithstanding that such indemnification is not specifically
authorized by other provisions of this Agreement, the Corporation's Articles
of
Incorporation, the Corporation's Bylaws or by statute. The
Corporation also acknowledges that it is the intent of the parties that this
Agreement applies to the Corporation as well as any of its
subsidiaries.
4. Determination
of Right to Indemnification.
Upon
receipt of a written claim addressed to the Board of Directors for
indemnification pursuant to Section 3, the Corporation shall determine by any
of
the methods set forth in Section 317 of the California Corporations Code whether
Indemnitee has met the applicable standards of conduct which make it permissible
under applicable law to indemnify Indemnitee. If a claim under Section 3 is
not
paid in full by the Corporation within thirty (30) days after such written
claim
has been received by the Corporation or if applicable, whatever time is
reasonably necessary for the Corporation to complete the investigation
contemplated in Section 3 of this Agreement, the Indemnitee may at any time
thereafter bring suit against the Corporation to recover the unpaid amount
of
the claim. The Indemnitee's Expenses incurred in connection with successfully
establishing his or her right to indemnification or advances, in whole or in
part, in any such Proceeding shall also be indemnified by the Corporation.
Neither the failure of the Corporation (including its Board of Directors,
independent legal counsel, or its stockholders) to make a determination prior
to
the commencement of such action that indemnification of the Indemnitee is proper
in the circumstances because Indemnitee has met the applicable standard of
conduct under applicable law, nor an actual determination by the Corporation
(including its Board of Directors, independent legal counsel or its
stockholders) that the Indemnitee has not met such applicable standard of
conduct, shall create a presumption that Indemnitee has not met the applicable
standard of conduct. The
Corporation shall have the burden of proof concerning whether the Indemnitee
has
or has not met the applicable standard of conduct.
5. Advancement
and Repayment of Expenses.
a. Proceedings.
The
Expenses incurred by Indemnitee in defending and investigating any Proceeding
shall be paid by the Corporation in advance of the final disposition of such
Proceeding within thirty (30) days after receiving from Indemnitee the copies
of
invoices presented to Indemnitee for such Expenses, if Indemnitee shall provide
an undertaking to the Corporation to repay such amount to the extent it is
ultimately determined that Indemnitee is not entitled to indemnification. In
determining whether or not to make an advance hereunder, the ability of
Indemnitee to repay shall not be a factor. Notwithstanding the foregoing, in
a
proceeding brought by the Corporation directly, in its own right (as
distinguished from an action bought derivatively or by any receiver or trustee),
the Corporation shall not be required to make the advances called for hereby
if
the Board of Directors determines, in its sole discretion, that it does not
appear that Indemnitee has met the standards of conduct which make it
permis-sible under applicable law to indemnify Indemnitee and the advance-ment
of Expenses would not be in the best interests of the Corporation and its
stockholders.
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b. Mandatory
Payment of Expenses.
To the
extent that Indemnitee has been successful on the merits, in defense of any
action, suit, or proceeding referred to in Section 3 hereof or in defense of
any
claim, issue or matter therein, Indemnitee shall be indemnified against all
Expenses incurred by Indemnitee in connection therewith.
6. Partial
Indemnification.
If the Indemnitee is entitled under any provision of this Agreement to
indemnification or advancement by the Corporation of some or a portion of any
Expenses or liabilities of any type whatsoever (including, but not limited
to,
judgments, fines, penalties, and amounts paid in settlement) incurred by
Indemnitee in the investigation, defense, settle-ment or appeal of a Proceeding,
but is not entitled to indemnifi-cation or advancement of the total amount
thereof, the Corporation shall nevertheless indemnify or pay advancements to
the
Indemnitee for the portion of such Expenses or liabilities to which the
Indemnitee is entitled.
7. Notice
to Corporation by Indemnitee.
Indemnitee shall notify the Corporation in writing of any matter with respect
to
which Indemnitee intends to seek indemnification hereunder as soon as reasonably
practicable following the receipt by Indemnitee of written notice thereof;
provided that any delay in so notifying Corporation shall not constitute a
waiver by Indemnitee of his or her rights hereunder. The written notification
to
the Corporation shall be addressed to the Board of Directors and shall include
a
description of the nature of the Proceeding and the facts underly-ing the
Proceeding and be accompanied by copies of any documents filed by any state
or
federal regulatory agency or with the court in which the Proceeding is pending.
In addition, Indemnitee shall give the Corporation such information and
cooperation as it may reasonably require and as shall be within Indemnitee's
power.
8. Maintenance
of Liability Insurance.
a. The
Corporation hereby agrees that so long as Indemnitee shall continue to serve
as
a director or officer of the Corporation and thereafter so long as Indemnitee
shall be subject to any possible Proceeding, the Corporation shall obtain and
maintain in full force and effect directors' and officers' liability insurance
("D&O Insurance") under the following terms and conditions.
b. The
terms
and conditions of any policy of D&O Insurance shall, unless waived by the
Board of Directors, include all of the following: the insuring agreement shall
cover any alleged failure or breach of performance by the officer or director,
to the maximum extent permitted by applicable law and this Agreement; the
deductible amount shall be no more than One Hundred Thousand Dollars ($100,000),
which deductible shall be paid by the Corporation; the policy shall contain
a
severability clause such that the action or inaction of one or more directors
or
officers will not deprive the remaining officers and directors of coverage;
and
the policy may be written on a claims made basis.
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c. The
Board
of Directors shall not waive coverage for any prior director or officer, without
notifying such prior director or officer of such waiver, for at least three
years following the termination of such person as a director or officer of
the
Corporation.
d. Unless
changed by resolution of the Board of Directors, the face amount of the policy
shall be no less than Four Million Dollars ($4,000,000) for each claim and
Four
Million Dollars ($4,000,000) annual aggregate and, if practicable, such policy
shall contain no SEC exclusion. In the event that available limits are reduced
in any policy year to less than Three Million Dollars ($3,000,000) by reason
of
claims paid or expenses incurred, the Corporation shall purchase additional
coverage so that the available limits will be reinstated to Four Million Dollars
($4,000,000) unless the Board of Directors determines in good faith that the
premium costs for such additional insurance are disproportionate to the amount
of such additional coverage.
e. The
insurance company or companies selected by the Corporation for the issuance
of
the D&O Insurance required by this Section 8 shall be subject to the
approval of the Board of Directors.
f. If,
at
the time of the receipt of a notice of a claim pursuant to Section 7 hereof,
the
Corporation has D&O Insurance in effect, the Corporation shall give prompt
notice of the commencement of such claim to the insurers in accordance with
the
procedures set forth in the respec-tive policies. The Corporation shall
thereafter take all necessary or desirable action to cause such insurers to
pay,
on behalf of the Indemnitee, all amounts payable as a result of such Proceeding
in accordance with the terms of such policies.
g. The
obligation of the Corporation to indemnify the Indemnitee under this Agreement
shall be secondary to all valid and collectable insurance purchased by the
Corporation which shall be primary.
9. Defense
of Claim.
In the event that the Corporation shall be obligated under Section 5
hereof to pay any Expenses of any Proceeding against Indemnitee, the
Corporation, if appropriate, shall be entitled to assume the defense of such
Proceeding, with counsel approved by Indemnitee, which approval shall not be
unreasonably withheld, upon the delivery to Indemnitee of written notice of
its
election to do so. After delivery of such notice, approval of such counsel
by
Indemnitee and the retention of such counsel by the Corporation, the Corporation
will not be liable to Indem-xxxxx under this Agreement for any fees of counsel
subsequently incurred by Indemnitee with respect to the same Proceeding,
provided that (i) Indemnitee shall have the right to employ his or her counsel
in any such Proceeding, at Indemnitee's expense; and (ii) if (A) the employment
of counsel by Indemnitee has been previously authorized by the Corporation,
or
(B) Indemnitee shall have reasonably concluded that there may be a conflict
of
interest between the Corporation and the Indemnitee in the conduct of such
defense or (C) the Corporation shall not, in fact, have employed counsel to
assume the defense of such Proceeding, then the fees and expenses of
Indemnitee's counsel shall be at the expense of the Corporation.
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10. Attorneys'
Fees.
In the event that Indemnitee or the Corporation institutes an action to
enforce or interpret any terms of this Agreement, the Corporation shall
reimburse Indemnitee for all of the Indemnitee's reasonable fees and expenses
in
bringing and pursuing such action or defense, unless as part of such action
or
defense, a court of competent jurisdiction deter-mines that the material
assertions made by Indemnitee as a basis for such action or defense were not
made in good faith or were frivolous.
11. Continuation
of Obligations.
All agreements and obligations of the Corporation contained herein shall
continue during the period the Indemnitee is a director or officer of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, and shall continue thereafter so long as
the
Indemnitee shall be subject to any possible proceeding by reason of the fact
that Indemnitee served in any capacity referred to herein.
12. Successors
and Assigns.
This Agreement establishes contract rights that shall be binding upon, and
shall inure to the benefit of, the successors, assigns, heirs and legal
repre-sentatives of the parties hereto.
13. Non-exclusivity.
a. The
provisions for indemnification and advance-ment of expenses set forth in this
Agreement shall not be deemed to be exclusive of any other rights that the
Indemnitee may have under any provision of law, the Corporation's Articles
of
Incorporation or Bylaws, the vote of the Corporation's stockholders or
disinterested directors, other agreements or otherwise, both as to action in
his
or her official capacity and action in another capacity while occupying his
or
her position as a director or officer of the Corporation. The indemnification
provided under this Agreement shall continue as to Indemnitee for any action
taken or not taken while serving in an indemnified capacity even though
Indemnitee may have ceased to serve in such capacity.
b. In
the
event of any changes, after the date of this Agreement, in any applicable law,
statute, or rule which expand the right of a California corporation to indemnify
its officers and directors, the Indemnitee's rights and the Corporation's
obligations under this Agreement shall be expanded to the full extent permitted
by such changes. In the event of any changes in any applicable law, statute
or
rule, which narrow the right of a California corporation to indemnify a director
or officer, such changes, to the extent not otherwise required by such law,
statute or rule to be applied to this Agreement, shall have no effect on this
Agreement or the parties' rights and obligations hereunder.
14. Effectiveness
of Agreement.
This Agreement shall be effective as of the date set forth on the first
page and may apply to acts or omissions of Indemnitee which occurred prior
to
such date if Indemnitee was an officer, director, employee or other agent of
the
Corporation, or was serving at the request of the Corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, at the time such act or omission
occurred.
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15. Severability.
Nothing in this Agreement is intended to require or shall be construed as
requiring the Corporation to do or fail to do any act in violation of applicable
law. The Corporation's inability, pursuant to court order, to perform its
obligations under this Agreement shall not constitute a breach of this
Agreement. The provisions of this Agreement shall be severable as provided
in
this Section 15. If this Agreement or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify Indemnitee to the full extent permitted
by any applicable portion of this Agreement that shall not have been
invalidated, and the balance of this Agreement not so invalidated shall be
enforceable in accordance with its terms.
16. Governing
Law.
This Agreement shall be interpreted and enforced in accordance with the
laws of the State of California, except to the extent federal law is applicable.
To the extent permitted by applicable law, the parties hereby waive any
provisions of law which render any provision of this Agreement unenforceable
in
any respect.
17. Notice.
All notices, requests, demands and other communications under this Agreement
shall be in writing and shall be deemed duly given (i) if delivered by hand
and
receipted for by the party addressee or (ii) if mailed by certified or
registered mail with postage prepaid, on the third business day after the
mailing date. Addresses for notice to either party are as shown on the signature
page of this Agreement, or as subsequently modified by written
notice.
18. Mutual
Acknowledgment.
Both the Corporation and Indemnitee acknowledge that in certain instances,
federal law or applicable public policy may prohibit the Corporation from
indemnifying its directors and officers under this Agreement or otherwise.
Indemnitee understands and acknowledges that the Corporation has undertaken
or
may be required in the future to undertake with the Securities and Exchange
Commission to submit the question of indemnification to a court in certain
circumstances for a determination of the Corporation's right under public policy
to indemnify Indemnitee.
19. Subrogation.
In the event of payment under this Agreement, the Corporation shall be
subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee, who shall execute all documents required and shall do all acts
that
may be necessary to secure such rights and to enable the Corporation effectively
to bring suit to enforce such rights.
20. Counterparts.
This Agreement may be executed in one or more
counterparts, each of which shall constitute an original.
21. Amendment
and Termination.
No amendment, modification, termination or cancellation of this Agreement
shall be effective unless in writing signed by both parties hereto.
IN
WITNESS WHEREOF, the parties have executed this Indemnification Agreement as
of
the day and year set forth above.
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| HEMACARE CORPORATION | ||
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| By: | /s/ Xxxxxx Xxxxx, M. D. | |
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00000 Xxxxxxx Xxx, Xxxxx 000 |
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Xxx
Xxxx, XX 00000
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INDEMNITEE:
|
Xxxxxx
Xxxxxxxxxxxx
(Type
Name)
|
||
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/s/
Xxxxxx Xxxxxxxxxxxx
(Signature)
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00000
Xxxxx Xxxxxxx, Xxxxxx, XX 00000
(Address)
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