DIRECTOR AND OFFICER INDEMNIFICATION AGREEMENT
Exhibit
10.1
DIRECTOR
AND OFFICER INDEMNIFICATION AGREEMENT
THIS
INDEMNIFICATION AGREEMENT, dated as of December __, 2007 (this "Agreement"),
is
made by and between HOUSERAISING, INC., a North Carolina corporation (the
"Company"), and _________________________ ("Indemnitee").
RECITALS
A.
It is
important to the Company to attract and retain as directors and officers the
most capable persons reasonably available.
B.
Indemnitee is a director and/or officer of the Company.
C.
Both
the Company and Indemnitee recognize the increased risk of litigation and other
claims being asserted against directors and officers of companies in today's
environment.
D.
The
Company's Amended Articles of Incorporation and By-laws (together, the
"Constituent Documents") do not provide that the Company will indemnify its
directors and officers and will advance expenses in connection therewith, and
Indemnitee's continued willingness to serve as a director and/or officer of
the
Company, or at the Company's request to serve another entity in any capacity,
is
based in part on the Company’s agreement to provide indemnification of directors
and officers by contract.
E.
In
recognition of Indemnitee's need for substantial protection against personal
liability in order to encourage Indemnitee's continued service to the Company
or, at the Company's request, another entity, in an effective manner, and to
provide Indemnitee with express contractual indemnification (regardless of,
among other things, the absence of indemnification provisions in the Company’s
Consituent Documents), the Company wishes to provide in this Agreement for
the
indemnification of Indemnifiable Losses (as defined in Section 1(d)) and the
advancement of Expenses (as defined in Section 1(c)) to Indemnitee as set forth
in this Agreement and, to the extent insurance is maintained, for the continued
coverage of Indemnitee under the Company's directors' and officers' liability
insurance policies.
NOW,
THEREFORE, the parties hereby agree as follows:
1.
CERTAIN DEFINITIONS. In addition to terms defined elsewhere herein, the
following terms have the following meanings when used in this Agreement with
initial capital letters:
(a)
"AFFILIATE" has the meaning given to that term in Rule 405 under the Securities
Act of 1933, provided, however, that for purposes of this Agreement the Company
and its subsidiaries will not be deemed to constitute Affiliates of Indemnitee
or the Indemnitee.
(b)
"CLAIM" means any threatened, pending or completed action, suit or proceeding
(whether civil, criminal, administrative, arbitrative, investigative or
other),
whether instituted by the Company or any other party (including, without
limitation, any governmental entity), or any inquiry or investigation, whether
instituted by the Company or any other party (including, without limitation,
any
governmental entity) that Indemnitee in good faith believes might lead to the
institution of any such action, suit or proceeding.
(c)
"EXPENSES" includes all attorneys' and experts' fees, expenses and charges
and
all other costs, expenses and obligations paid or incurred in connection with
investigating, defending, or participating (as a party, a witness, or otherwise)
in (including on appeal), or preparing to defend or participate in, any
Claim.
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(d)
"INDEMNIFIABLE LOSSES" means any and all Expenses, damages, losses, liabilities,
judgments, fines, penalties and amounts paid or payable in settlement
(including, without limitation, all interest, assessments and other charges
paid
or payable in connection with or in respect of any of the foregoing) relating
to, resulting from or arising out of any act or failure to act by the
Indemnitee, or his or her status as any person referred to in clause (i) of
this
sentence, (i) in his or her capacity as a director, officer, employee or agent
of the Company, any of its Affiliates or any other entity as to which the
Indemnitee is or was serving at the request of the Company as a director,
officer, employee, member, manager, trustee, agent or any other capacity of
another corporation, limited liability company, partnership, joint venture,
trust or other entity or enterprise, whether or not for profit and (ii) in
respect of any business, transaction or other activity of any entity referred
to
in clause (i) of this sentence.
2.
BASIC
INDEMNIFICATION ARRANGEMENT. The Company will indemnify and hold harmless
Indemnitee to the fullest extent permitted by the laws of the State of North
Carolina in effect on the date hereof or as such laws may from time to time
hereafter be amended to increase the scope of such permitted indemnification
(but in no case less than the extent permitted under the laws in effect as
of
the date hereof) against all Indemnifiable Losses relating to, resulting from
or
arising out of any Claim. The failure by Indemnitee to notify the Company of
such Claim will not relieve the Company from any liability hereunder unless,
and
only to the extent that, the Company did not otherwise learn of the Claim and
such failure results in forfeiture by the Company of substantial defenses,
rights or insurance coverage. Except as provided in Sections 4 and 18,
Indemnitee will not be entitled to indemnification pursuant to this Agreement
in
connection with any Claim initiated by Indemnitee against the Company or any
director or officer of the Company unless the Company has joined in or consented
to the initiation of such Claim.
3.
ADVANCEMENT OF EXPENSES. The Indemnitee's right to indemnification in Section
2
of this Agreement shall include the right of Indemnitee to be advanced by the
Company any Expenses. If so requested by Indemnitee, the Company will advance
within two business days of such request any and all Expenses to Indemnitee
which Indemnitee reasonably determines likely to be payable; provided, however,
that Indemnitee will return, without interest, any such advance which remains
unspent at the final conclusion of the Claim to which the advance related;
and
provided, further, that, except as provided in
Section 18, all amounts advanced in respect of such Expenses shall be repaid
to
the Company by Indemnitee if it shall ultimately be determined in a final
judgment that Indemnitee is not entitled to be indemnified for such
Expenses.
4.
INDEMNIFICATION FOR ADDITIONAL EXPENSES. Without limiting the generality or
effect of the foregoing, the Company will indemnify Indemnitee against and,
if
requested by Indemnitee, will within two business days of such request advance
to Indemnitee, any and all attorneys' fees and other Expenses paid or incurred
by Indemnitee in connection with any Claim asserted or brought by Indemnitee
for
(i) indemnification or advance payment of Expenses by the Company under this
Agreement or any other agreement or under any provision of the Company's
Constituent Documents now or hereafter in effect relating to Claims for
Indemnifiable Losses and/or (ii) recovery under any directors' and officers'
liability insurance policies maintained by the Company, regardless of whether
Indemnitee ultimately is determined to be entitled to such indemnification,
advance expense payment or insurance recovery, as the case may be.
5.
PARTIAL INDEMNITY, ETC. If Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for some or a portion of any
Indemnifiable Loss but not for all of the total amount thereof, the Company
will
nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee
is
entitled. Moreover, notwithstanding any other provision of this Agreement,
to
the extent that Indemnitee has been successful on the merits or otherwise in
defense of any or all Claims relating in whole or in part to an Indemnifiable
Loss or in defense of any issue or matter therein, including, without
limitation, dismissal without prejudice, Indemnitee will be indemnified against
all Expenses incurred in connection therewith. In connection with any
determination as to whether Indemnitee is entitled to be indemnified hereunder,
there will be a presumption that Indemnitee is so entitled, and the burden
of
proof shall, to the extent permitted by law, be on the Company to establish
that
Indemnitee is not so entitled.
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6.
NO
OTHER PRESUMPTION. For purposes of this Agreement, the termination of any Claim
by judgment, order, settlement (whether with or without court approval) or
conviction, or upon a plea of nolo contendere or its equivalent, will not create
a presumption that Indemnitee did not meet any particular standard of conduct
or
have any particular belief or that a court has determined that indemnification
is not permitted by applicable law.
7.
NON-EXCLUSIVITY, ETC. The rights of Indemnitee hereunder will be in addition
to
any other rights Indemnitee may have under the Constituent Documents, or the
substantive laws of the Company's jurisdiction of incorporation, any other
contract or otherwise (collectively, "Other Indemnity Provisions"); provided,
however, that (i) to the extent that Indemnitee otherwise would have any greater
right to indemnification under any Other Indemnity Provision, Indemnitee will
be
deemed to have such greater right hereunder and (ii) to the extent that any
change is made to any Other Indemnity Provision which permits any greater right
to indemnification than that provided under this Agreement as of the date
hereof, Indemnitee will be deemed to have such greater right hereunder. The
Company will not adopt any amendment to any of the Constituent Documents
the effect of which would be to deny, diminish or encumber Indemnitee's right
to
indemnification under this Agreement or any Other Indemnity
Provision.
8.
LIABILITY INSURANCE. To the extent the Company maintains an insurance policy
or
policies providing directors' and officers' liability insurance (the "D&O
Insurance"), Indemnitee will be covered by such policy or policies, in
accordance with its or their terms, to the maximum extent of the coverage
available for any director or officer of the Company. Notwithstanding the
foregoing, the Company shall not be required to cover the Indemnitee under
its
D&O Insurance to the same extent as other directors or officers of the
Company, or at all, if the Company determines in good faith that such insurance
is not available, or the premium costs (or increases in premium costs of other
directors or officers of the Company as a result of such coverage) for such
insurance is materially disproportionate to the amount of coverage
provided.
9.
SUBROGATION. In the event of payment under this Agreement, the Company will
be
subrogated to the extent of such payment to all of the related rights of
recovery of Indemnitee against other persons or entities (other than
Indemnitee's successors). The Indemnitee will execute all papers reasonably
required to evidence such rights (all of Indemnitee's reasonable Expenses,
including attorneys' fees and charges, related thereto to be reimbursed by
or,
at the option of Indemnitee, advanced by the Company).
10.
NO
DUPLICATION OF PAYMENTS. The Company will not be liable under this Agreement
to
make any payment in connection with any Indemnifiable Loss made against
Indemnitee to the extent Indemnitee has otherwise actually received payment
(net
of Expenses incurred in connection therewith) under any insurance policy, the
Constituent Documents and Other Indemnity Provisions or otherwise of the amounts
otherwise indemnifiable hereunder provided that, if Indemnitee for any reason
is
required to disgorge any payment actually received by him, the Company shall
be
obligated to pay such amount to Indemnitee in accordance with the other terms
of
this Agreement (i.e., disregarding the terms of this Section 10).
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11.
DEFENSE OF CLAIMS. The Company will be entitled to participate in the defense
(including, without limitation, the negotiation and approval of any settlement)
of any Claim in respect of which Indemnitee may seek indemnification from the
Company hereunder, or to assume the defense thereof, with counsel reasonably
satisfactory to the Indemnitee, provided that in the event that (i) the use
of
counsel chosen by the Company to represent Indemnitee would present such counsel
with an actual or potential conflict, (ii) the named parties in any such Claim
(including any impleaded parties) include both the Company and Indemnitee and
Indemnitee shall conclude that there may be one or more legal defenses available
to him or her that are different from or in addition to those available to
the
Company, or (iii) any such representation by the Company would be precluded
under the applicable standards of professional conduct then prevailing, then
Indemnitee will be entitled to retain separate counsel (but not more than one
law firm plus, if applicable, local counsel in respect of any particular Claim)
at the Company's expense. Notwithstanding the preceding sentence, in any event
the Company shall be liable to Indemnitee under this Agreement for the
reasonable costs of investigation and preparation for the defense of any Claim
(including, without limitation, appearing as a witness
and reasonable fees and expenses of counsel in connection therewith). The
Company will not, without the prior written consent of the Indemnitee, effect
any settlement of any threatened or pending Claim that the Indemnitee is or
could have been a party to unless such settlement solely involves the payment
of
money and includes an unconditional release of the Indemnitee from all liability
on any claims that are the subject matter of such Claim.
12.
SUCCESSORS AND BINDING AGREEMENT. (a) The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation, reorganization
or otherwise) to all or substantially all of the business or assets of the
Company (a "Successor"), by agreement in form and substance satisfactory to
Indemnitee and his or her counsel, expressly to assume and agree to perform
this
Agreement in the same manner and to the same extent the Company would be
required to perform if no such succession had taken place. This Agreement will
be binding upon and inure to the benefit of the Company and may be assigned
to a
Successor, but will not otherwise be assignable or delegatable by the
Company.
(b)
This
Agreement will inure to the benefit of and be enforceable by the Indemnitee's
personal or legal representatives, executors, administrators, successors, heirs,
distributees, legatees and other successors.
(c)
This
Agreement is personal in nature and neither of the parties hereto will, without
the consent of the other, assign or delegate this Agreement or any rights or
obligations hereunder except as expressly provided in Sections 12(a) and 12(b).
Without limiting the generality or effect of the foregoing, Indemnitee's right
to receive payments hereunder will not be assignable, whether by pledge,
creation of a security interest or otherwise, other than by a transfer by the
Indemnitee's will or by the laws of descent and distribution, and, in the event
of any attempted assignment or transfer contrary to this Section 12(c), the
Company will have no liability to pay any amount so attempted to be assigned
or
transferred.
13.
NOTICES. For all purposes of this Agreement, all communications, including
without limitation notices, consents, requests or approvals, required or
permitted to be given hereunder will be in writing and will be deemed to have
been duly given when hand delivered or dispatched by electronic facsimile
transmission (with receipt thereof orally confirmed), or five business days
after having been mailed by United States registered or certified mail, return
receipt requested, postage prepaid or one business day after having been sent
for next-day delivery by a nationally recognized overnight courier service,
addressed to the Company (to the attention of the Secretary of the Company)
and
to the Indemnitee at the addresses shown on the signature page hereto, or to
such other address as any party may have furnished to the other in writing
and
in accordance herewith, except that notices of changes of address will be
effective only upon receipt.
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14.
GOVERNING LAW. The validity, interpretation, construction and performance of
this Agreement will be governed by and construed in accordance with the
substantive laws of the State of North Carolina, without giving effect to the
principles of conflict of laws of such State. Each party consents to
non-exclusive jurisdiction of the North Carolina
Superior Court in Mecklenburg County, North Carolina or the United States
District Court for the Western District of North Carolina (Charlotte Division)
for purposes of any action, suit or proceeding hereunder, waives any objection
to venue therein or any defense based on forum non conveniens or similar
theories and agrees that service of process may be effected in any such action,
suit or proceeding by notice given in accordance with Section 13.
15.
VALIDITY. If any provision of this Agreement or the application of any provision
hereof to any person or circumstance is held invalid, unenforceable or otherwise
illegal, the remainder of this Agreement and the application of such provision
to any other person or circumstance will not be affected, and the provision
so
held to be invalid, unenforceable or otherwise illegal will be reformed to
the
extent, and only to the extent, necessary to make it enforceable, valid or
legal.
16.
MISCELLANEOUS. No provision of this Agreement may be waived, modified or
discharged unless such waiver, modification or discharge is agreed to in writing
signed by Indemnitee and the Company. No waiver by either party hereto at any
time of any breach by the other party hereto or compliance with any condition
or
provision of this Agreement to be performed by such other party will be deemed
a
waiver of similar or dissimilar provisions or conditions at the same or at
any
prior or subsequent time. No agreements or representations, oral or otherwise,
expressed or implied with respect to the subject matter hereof have been made
by
either party that are not set forth expressly in this Agreement. References
to
Sections are to references to Sections of this Agreement.
17.
COUNTERPARTS. This Agreement may be executed in one or more counterparts, each
of which will be deemed to be an original but all of which together will
constitute one and the same agreement.
18.
LEGAL
FEES AND EXPENSES. It is the intent of the Company that the Indemnitee not
be
required to incur legal fees and or other Expenses associated with the
interpretation, enforcement or defense of Indemnitee's rights under this
Agreement by litigation or otherwise because the cost and expense thereof would
substantially detract from the benefits intended to be extended to the
Indemnitee hereunder. Accordingly, without limiting the generality or effect
of
any other provision hereof, if it should appear to the Indemnitee that the
Company has failed to comply with any of its obligations under this Agreement
or
in the event that the Company or any other person takes or threatens to take
any
action to declare this Agreement void or unenforceable, or institutes any
litigation or other action or proceeding designed to deny, or to recover from,
the Indemnitee the benefits provided or intended to be provided to the
Indemnitee hereunder, the Company irrevocably authorizes the Indemnitee from
time to time to retain counsel of Indemnitee's choice, at the expense of the
Company as hereafter provided, to advise and represent the Indemnitee in
connection with any such interpretation, enforcement or defense, including
without limitation the initiation or defense of any litigation or other legal
action, whether by or against the Company or any director, officer, stockholder
or other person affiliated with the Company. Notwithstanding any existing or
prior attorney-client relationship between the Company and such counsel, the
Company irrevocably consents to the Indemnitee's entering into an
attorney-client relationship with such
counsel, and in that connection the Company and the Indemnitee agree that a
confidential relationship shall exist between the Indemnitee and such counsel.
Without respect to whether the Indemnitee prevails, in whole or in part, in
connection with any of the foregoing, the Company will pay and be solely
financially responsible for any and all attorneys' and related fees and expenses
incurred by the Indemnitee in connection with any of the foregoing.
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19.
RIGHT
OF INDEMNITEE TO INDEMNIFICATION UPON APPLICATION; PROCEDURE UPON APPLICATION.
Except as provided in Section 3, any indemnification under this Agreement shall
be made as soon as practicable but in any event no later than 30 days after
receipt of the written request of the Indemnitee for such indemnification (such
request to be accompanied by reasonable supporting documentation of the
Indemnifiable Losses), unless a determination is made within said 30 day period
by (a) the Board by a majority vote of a quorum thereof consisting of directors
who were not parties to such proceedings, or (b) independent legal counsel
in a
written opinion (which counsel shall be appointed if such a quorum is not
obtainable), that the Indemnitee has not met the relevant standards for
indemnification set forth in this Agreement. In the case of either (a) or (b)
above, the Company shall send prompt written notice to the Indemnitee of such
determination.
20.
CERTAIN INTERPRETIVE MATTERS. No provision of this Agreement will be interpreted
in favor of, or against, either of the parties hereto by reason of the extent
to
which any such party or its counsel participated in the drafting thereof or
by
reason of the extent to which any such provision is inconsistent with any prior
draft hereof or thereof.
IN
WITNESS WHEREOF, Indemnitee has executed and the Company has caused its duly
authorized representative to execute this Agreement as of the date first above
written.
0000
Xxxx
Xxxxxxxxxxxx Xxxx., Xxxxx 000
Xxxxxxxxx,
XX 00000
By:_________________________________________
Name:
Xxxx Xxxxxxxx
Title:
Chairman, CEO and President
[NAME]
[Address]
____________________________________________
[Name]
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