INDEMNIFICATION AGREEMENT
THIS AGREEMENT made this 29th day of July, 1997, by and between ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (hereinafter collectively referred to as
"▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇" and/or the "Indemnifying Party"), whose address is ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, and PEACOCK HILL
FARM LIMITED LIABILITY COMPANY (hereinafter referred to as the "LLC" and/or
the "Indemnified Party"), whose administrative address is ▇/▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇;
WITNESSETH
Upon execution of the Closing documents and Exhibits attached hereto, the
transaction will be completed whereby the sale of Two Million Three Hundred
Twenty-six Thousand (2,326,000) shares of Acadia National Health Systems, Inc.
(hereinafter referred to as "Acadia") common stock is being purchased from the
LLC by several affiliates of the Company (including present officers and
directors.) The transaction is hereby consummated with the execution of all
documents set forth herein and attached hereto as Exhibits, and involves the
estate's beneficial ownership of shares of Acadia common stock. The sale is
hereby made pursuant to Section 4(2) of the Securities Act of 1933 (the "Act")
involving the sale of securities not to be made in any public offering.
The LLC acknowledges that, prior to consummation of all transactions
represented by these closing documents, it was the majority shareholder of
Acadia National Health Systems, Inc. ("Acadia and/or the "Company"). The LLC
also acknowledges that it had no interest in continuing to control the Board
of Directors of the Company nor to retain the majority ownership of the
Company.
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ acknowledge hereby that they will accept appointment
to the Board of Directors of Acadia and will also accept appointment by the
Interim Board to be officers of the Company. This appointment will
automatically assign "affiliate" status to both ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ and will
restrict all common equity holdings they have in the Company, pursuant to Rule
144 of the Act and Section 13 or 15(d) of the Securities Exchange Act of ▇▇▇▇
(▇▇▇ "▇▇▇▇▇▇▇▇ ▇▇▇").
In order to provide further assurances to the LLC, and as part of the
negotiated sale of the LLC's controlling interest, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ have
agreed to hold harmless and indemnify the LLC against any liability which may
arise out of the continued operation, development and expansion of Acadia.
NOW THEREFORE, IT IS AGREED AS FOLLOWS:
1. Indemnification: In consideration of the LLC appointing ▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇ to serve as members of the Board of Directors of Acadia, and to induce
the consummation of the purchase and sale of the LLC's controlling interest in
Acadia to present officers of the Company, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ hereby agree to
indemnify and hold harmless the LLC against any and all liability, claims or
causes of action whatsoever arising out of the continued operation,
development and expansion of Acadia, including reasonable attorneys fees and
costs incurred in defending any such claims or causes of action; provided,
however, that this indemnification shall not apply to any intentional acts
committed by the LLC, which are deemed by a court of law to have been
fraudulent or in breach of its fiduciary duty to ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ or the
officers and directors of the Company.
2. Insurance: ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ will insure the LLC by purchasing an
indemnity policy of insurance or bond which may be in the form of specific
directors and officers insurance ("D&O"). All policies shall be listed in
Schedule A attached hereto, and the policies and any proceeds received
thereunder shall be made payable to the LLC for the purposes of this
Agreement.
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ shall have the right to take out insurance on the life of
any Shareholder whenever, in the opinion of either party, additional insurance
may be required to carry out the obligations under this Agreement.
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ shall ensure payment of all premiums on insurance policies
taken out pursuant to this Agreement and shall give proof of payment to the
LLC within fifteen (15) days after a written request by the LLC or its
managing member.
3. Warranties/Representations:
(i) The Indemnifying Party hereby jointly and severally agrees to
indemnify the LLC and defend and hold it harmless from and against all claims,
damages, losses, costs, and expenses (including reasonable attorney fees,
court costs and other expenses incident to any proceeding, investigation or
any claim, including without limitation in any suit by the LLC against the
Indemnifying Party) attributable directly or indirectly to the breach by the
Indemnifying Party of any obligation hereunder or the inaccuracy of any
representation or warranty made by the Indemnifying Party herein or in any
instrument delivered pursuant hereto or in connection with the transactions
contemplated hereby, including, but not limited to, the Schedule.
(ii) A claim for indemnification shall be made only by the LLC notifying
the Indemnifying Party of the existence of the claim for which indemnification
is sought. The LLC shall thereafter be entitled, at its option, to control,
or participate in, any prosecution or defense relating to such claim for
indemnity (including without limitation decisions to settle or appeal) through
attorneys and agents of its choosing, all at the expense of the Indemnifying
Party (except in any suit by the Indemnifying Party against the LLC). The
results of any such prosecution or defense shall be binding upon the
Indemnifying Party and the LLC for purposes of resolving any claim for
indemnity.
(iii)Notwithstanding the foregoing, no new notice of claim for indemnity may
be given by the LLC after July 1, 2002; any claims for indemnity thereafter
are barred. Any claims for indemnity, or portions thereof, in excess of the
aggregate amount of proceeds received from the indemnity policy due to the
Indemnifying Party and the LLC shall be the joint and several responsibility
of the Indemnifying Party and paid to the LLC on demand. The Indemnifying
Party shall not be entitled to indemnity or contribution from, or subrogation
to or recovery against the LLC with respect to any liability of the
Indemnifying Party which may arise under this Agreement of the transactions
contemplated hereby.
4. This Agreement shall bind upon and inure to the benefit of the heirs,
successors and assigns of the parties hereto.
IN WITNESS WHEREOF, the parties have signed this Agreement this 29th day
of July, 1997.
INDEMNIFYING PARTY
By:_____________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
By:_____________________
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
INDEMNIFIED PARTY
(PEACOCK HILL FARM LIMITED LIABILITY COMPANY)
By:_____________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Sole Managing Member
