INDEMNIFICATION AGREEMENT
THIS AGREEMENT made this 29th day of July, 1997, by and between XXXX X.
XXXXXXXX and XXXXXXXXXXX X. XXXXXX (hereinafter collectively referred to as
"Xxxxxxxx and Xxxxxx" and/or the "Indemnifying Party"), whose address is 000
Xxxxxx Xxxxxx, Xxxxx Xxxxx, Xxxxxxx, Xxxxx Xxxxxx, 00000, and the ESTATE OF
XXXXXX X. XXXXXXX (hereinafter referred to as the "Estate" and/or the
"Indemnified Party"), whose administrative address is X/X Xxxxx X. Xxxxx,
Xxx., Xxxxxxx, Xxxxxxx & Xxxxxx, 00 Xxxx Xxxxxx, Xxxxxx, Xxxxx 00000-0000;
WITNESSETH
Upon execution of the Closing documents and Exhibits attached hereto, the
transaction will be completed whereby the sale of One Hundred Fifty-Six
Thousand (156,000) shares of Acadia National Health Systems, Inc. (hereinafter
referred to as "Acadia") common stock and Seventy-three (73) shares of PRI,
Inc. (hereinafter referred to as "PRI") common stock is being purchased from
the Estate 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 and PRI's 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 Estate 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
Estate 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.
Xxxxxxxx and Xxxxxx 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 Xxxxxxxx and Xxxxxx 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 0000
(xxx "Xxxxxxxx Xxx").
In order to provide further assurances to the Estate, and as part of the
negotiated sale of the Estate's controlling interest, Xxxxxxxx and Xxxxxx have
agreed to hold harmless and indemnify the Estate 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 Estate appointing Xxxxxxxx and
Xxxxxx to serve as members of the Board of Directors of Acadia, and to induce
the consummation of the purchase and sale of the Estate's controlling interest
in Acadia to present officers of the Company, Xxxxxxxx and Xxxxxx hereby agree
to indemnify and hold harmless the Estate 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 Estate, which are deemed by a court of law to have been
fraudulent or in breach of its fiduciary duty to Xxxxxxxx and Xxxxxx or the
officers and directors of the Company.
2. Insurance: Xxxxxxxx and Xxxxxx will insure the Estate 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 Estate for the purposes of this
Agreement.
Xxxxxxxx and Xxxxxx 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.
Xxxxxxxx and Xxxxxx shall ensure payment of all premiums on insurance policies
taken out pursuant to this Agreement and shall give proof of payment to the
Estate within fifteen (15) days after a written request by the Estate or its
representative.
3. Warranties/Representations:
(i) The Indemnifying Party hereby jointly and severally agrees to
indemnify the Estate 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 Estate 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 Estate
notifying the Indemnifying Party of the existence of the claim for which
indemnification is sought. The Estate 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 Estate). The results of any such prosecution or defense shall be binding
upon the Indemnifying Party and the Estate for purposes of resolving any claim
for indemnity.
(iii)Notwithstanding the foregoing, no new notice of claim for indemnity may
be given by the Estate 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 Estate shall be the joint and several
responsibility of the Indemnifying Party and paid to the Estate on demand.
The Indemnifying Party shall not be entitled to indemnity or contribution
from, or subrogation to or recovery against the Estate 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:______________________
XXXX X. XXXXXXXX
By:______________________
XXXXXXXXXXX X. XXXXXX
INDEMNIFIED PARTY
(ESTATE OF XXXXXX X. XXXXXXX)
By:______________________
XXXXX X. XXXXX,
Trustee
By:______________________
XXXX X. XXXXXX,
Trustee
By:______________________
XXXXXX X. XXXXXXX,
Personal Representative