Document:

Exhibit 10.2

Exhibit 10.2

 

 

REGISTRATION
RIGHTS AGREEMENT

Registration
Rights Agreement (the “Agreement”), dated
as of February 25, 2005, by and between HouseRaising, Inc. , a corporation
organized under the laws of State of North Carolina, with its principal
executive office at ,4801 East Independence Road, Suite 201,Charlotte,North
Carolina 28212 (the “Company”), and
Dutchess Private Equities Fund, II, L.P., a Delaware limited partnership with
its principal office at 312 Stuart Street, Boston, MA 02116 (the “Holder”).

Whereas, in
connection with the Investment Agreement by and between the Company and the
Investor of even date herewith (the “Investment
Agreement”), the
Company has agreed to issue and sell to the Investor an indeterminate number of
shares of the Company’s Common Stock, $0.001 par value per share (the
“Common
Stock”), to be
purchased pursuant to the terms and subject to the conditions set forth in the
Investment Agreement; and 

Whereas, to induce
the Investor to execute and deliver the Investment Agreement, the Company has
agreed to provide certain registration rights under the Securities Act of 1933,
as amended, and the rules and regulations thereunder, or any similar successor
statute (collectively, the “1933
Act”), and
applicable state securities laws, with respect to the shares of Common Stock
issuable pursuant to the Investment Agreement.

Now
therefore, in consideration of the foregoing premises and the mutual covenants
contained hereinafter and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Investor
hereby agree as follows: 

 

Section
1. DEFINITIONS.

As used
in this Agreement, the following terms shall have the following
meanings:

“Execution
Date” means
the date first written above.

“Investor” means
Dutchess Private Equities Fund, II, L.P., a Delaware limited
partnership.

“Person” means a
corporation, a limited liability company, an association, a partnership, an
organization, a business, an individual, a governmental or political subdivision
thereof or a governmental agency. 

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“Potential
Material Event” means
any of the following: (i) the
possession by the Company of material information not ripe for disclosure in a
Registration Statement, which shall be evidenced by determinations in good faith
by the Board of Directors of the Company that disclosure of such information in
the Registration Statement would be detrimental to the business and affairs of
the Company, or (ii) any
material engagement or activity by the Company which would, in the good faith
determination of the Board of Directors of the Company, be adversely affected by
disclosure in a Registration Statement at such time, which determination shall
be accompanied by a good faith determination by the Board of Directors of the
Company that the Registration Statement would be materially misleading absent
the inclusion of such information.

“Principal
Market” shall
mean The American Stock Exchange, National Association of Securities Dealer’s,
Inc. Over-the-Counter electronic bulletin board, the Nasdaq National Market or
The Nasdaq SmallCap Market whichever is the principal market on which the Common
Stock is listed. 

 

“Register,”
“Registered,” and
“Registration” refer
to a registration effected by preparing and filing one (1) or more Registration
Statements in compliance with the 1933 Act and pursuant to Rule 415 under the
1933 Act or any successor rule providing for offering securities on a continuous
basis (“Rule
415”), and
the declaration or ordering of effectiveness of such Registration Statement(s)
by the United States Securities and Exchange Commission (the
“SEC”).

“Registrable
Securities” means
(i)
the
shares of Common Stock issued or issuable pursuant to the Investment Agreement,
and (ii) any
shares of capital stock issued or issuable with respect to such shares of Common
Stock, if any, as a result of any stock split, stock dividend, recapitalization,
exchange or similar event or otherwise, which have not been (x) included
in a Registration Statement that has been declared effective by the SEC or
(y) sold
under circumstances meeting all of the applicable conditions of Rule 144 (or any
similar provision then in force) under the 1933 Act.

“Registration
Statement” means a
registration statement of the Company filed under the 1933 Act covering the
Registrable Securities.

All
capitalized terms used in this Agreement and not otherwise defined herein shall
have the same meaning ascribed to them as in the Investment Agreement.

 

Section
2. REGISTRATION.

(a) On or
before the execution of this Agreement, the Company shall have provided a draft
of the Registration Statement covering the Registrable Securities (together with
such other securities as Investor and the Company may agree in writing shall be
included in the Registration Statement) to the Investor. The Company shall, as
soon as practicable, but not later than thirty (30) calendar days following the
Execution of this agreement, file with the SEC a Registration Statement or
Registration Statements (as is necessary) on Form SB-2 (or, if such form is
unavailable for such a registration, on such other form as is available for such
a registration), covering the resale of all of the Registrable Securities, which
Registration Statement(s) shall state that, in accordance with Rule 416
promulgated under the 1933 Act, such Registration Statement also covers such
indeterminate number of additional shares of Common Stock as may become issuable
upon stock splits, stock dividends or similar transactions. The Company shall
initially register for resale 6,000,000 shares of
Common Stock which would be issuable on the date preceding the filing of the
Registration Statement based on the closing bid price of the Company’s Common
Stock on such date and the amount reasonably calculated that represents Common
Stock issuable to other parties as set forth in the Investment Agreement except
to the extent that the SEC requires the share amount to be reduced as a
condition of effectiveness..

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(b) The
Company shall use commercially reasonable efforts to have the Registration
Statement(s) declared effective by the SEC within ninety (90) calendar days
after the Execution Date. 

(c) The
Company agrees not to include any other securities in the Registration Statement
covering the Registrable Securities without Investor’s prior written consent
which Investor may withhold in its sole discretion. Furthermore, the Company
agrees that it will not file any other Registration Statement for other
securities, until thirty calendar days after the Registration Statement for the
Registrable Securities is declared effective by the SEC.

 

Section
3. RELATED
OBLIGATIONS.

At such
time as the Company is obligated to prepare and file a Registration Statement
with the SEC pursuant to Section 2(a), the Company will effect the registration
of the Registrable Securities in accordance with the intended method of
disposition thereof and, with respect thereto, the Company shall have the
following obligations:

 

(a) The
Company shall use commercially reasonable efforts to cause such Registration
Statement relating to the Registrable Securities to become effective within
ninety (90) days after the Execution Date and shall keep such Registration
Statement effective until the earlier to occur of (i) the date
on which (A) the
Investor shall have sold all the Registrable Securities; and (B) the
Investor has no right to acquire any additional shares of Common Stock under the
Investment Agreement (the “Registration
Period”). The
Registration Statement (including any amendments or supplements thereto and
prospectuses contained therein) shall not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein, or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading. The Company shall use its best efforts to
respond to all SEC comments within seven (7) business days from receipt of such
comments by the Company. The Company shall use its best efforts to cause the
Registration Statement relating to the Registrable Securities to become
effective no later than three (3) business days after notice from the SEC that
the Registration Statement may be declared effective. The Investor agrees to
provide all information which it is required by law to provide to the Company,
including the intended method of disposition of the Registrable Securities, and
the Company’s obligations set forth above shall be conditioned on the receipt of
such information.

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(b) The
Company shall prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to a Registration Statement and the
prospectus used in connection with such Registration Statement, which prospectus
is to be filed pursuant to Rule 424 promulgated under the 1933 Act, as may be
necessary to keep such Registration Statement effective during the Registration
Period, and, during such period, comply with the provisions of the 1933 Act with
respect to the disposition of all Registrable Securities of the Company covered
by such Registration Statement until such time as all of such Registrable
Securities shall have been disposed of in accordance with the intended methods
of disposition by the Investor thereof as set forth in such Registration
Statement. In the event the number of shares of Common Stock covered by a
Registration Statement filed pursuant to this Agreement is at any time
insufficient to cover all of the Registrable Securities, the Company shall amend
such Registration Statement, or file a new Registration Statement (on the short
form available therefor, if applicable), or both, so as to cover all of the
Registrable Securities, in each case, as soon as practicable, but in any event
within thirty (30) calendar days after the necessity therefor arises (based on
the then Purchase Price of the Common Stock and other relevant factors on which
the Company reasonably elects to rely), assuming the Company has sufficient
authorized shares at that time, and if it does not, within thirty (30) calendar
days after such shares are authorized. The Company shall use commercially
reasonable efforts to cause such amendment and/or new Registration Statement to
become effective as soon as practicable following the filing thereof.

(c) The
Company shall make available to the Investor whose Registrable Securities are
included in any Registration Statement and its legal counsel without charge
(i)
promptly
after the same is prepared and filed with the SEC at least one (1) copy of such
Registration Statement and any amendment(s) thereto, including financial
statements and schedules, all documents incorporated therein by reference and
all exhibits, the prospectus included in such Registration Statement (including
each preliminary prospectus) and, with regards to such Registration
Statement(s), any correspondence by or on behalf of the Company to the SEC or
the staff of the SEC and any correspondence from the SEC or the staff of the SEC
to the Company or its representatives; (ii) upon the
effectiveness of any Registration Statement, the Company shall make available
copies of the prospectus, via EDGAR, included in such Registration Statement and
all amendments and supplements thereto; and (iii) such
other documents, including copies of any preliminary or final prospectus, as the
Investor may reasonably request from time to time in order to facilitate the
disposition of the Registrable Securities.

 

(d) The
Company shall use commercially reasonable efforts to (i) register
and qualify the Registrable Securities covered by a Registration Statement under
such other securities or “blue sky” laws of such states in the United States as
any Investor reasonably requests; (ii) prepare
and file in those jurisdictions, such amendments (including post-effective
amendments) and supplements to such registrations and qualifications as may be
necessary to maintain the effectiveness thereof during the Registration Period;
(iii) take
such other actions as may be necessary to maintain such registrations and
qualifications in effect at all times during the Registration Period, and
(iv) take all
other actions reasonably necessary or advisable to qualify the Registrable
Securities for sale in such jurisdictions; provided,
however, that
the Company shall not be required in connection therewith or as a condition
thereto to (x) qualify
to do business in any jurisdiction where it would not otherwise be required to
qualify but for this Section 3(d), or (y) subject
itself to general taxation in any such jurisdiction. The Company shall promptly
notify each Investor who holds Registrable Securities of the receipt by the
Company of any notification with respect to the suspension of the registration
or qualification of any of the Registrable Securities for sale under the
securities or “blue sky” laws of any jurisdiction in the United States or its
receipt of actual notice of the initiation or threatening of any proceeding for
such purpose.

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(e) As
promptly as practicable after becoming aware of such event, the Company shall
notify Investor in writing of the happening of any event as a result of which
the prospectus included in a Registration Statement, as then in effect, includes
an untrue statement of a material fact or omission to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading
(“Registration
Default”) and
use all diligent efforts to promptly prepare a supplement or amendment to such
Registration Statement and take any other necessary steps to cure the
Registration Default, (which, if such Registration Statement is on Form S-3, may
consist of a document to be filed by the Company with the SEC pursuant to
Section 13(a), 13(c), 14 or 15(d) of the 1934 Act (as defined below) and to be
incorporated by reference in the prospectus) to correct such untrue statement or
omission, and make available copies of such supplement or amendment to each
Investor. The Company shall also promptly notify Investor (i) when a
prospectus or any prospectus supplement or post-effective amendment has been
filed, and when a Registration Statement or any post-effective amendment has
become effective (the Company will prepare notification of such effectiveness
which shall be delivered to the Investor on the same day of such effectiveness
and by overnight mail), additionally, the Company will promptly provide to the
Investor, a copy of the effectiveness order prepared by the SEC once it is
received by the Company; (ii) of any
request by the SEC for amendments or supplements to a Registration Statement or
related prospectus or related information, (iii)
of the
Company’s reasonable determination that a post-effective amendment to a
Registration Statement would be appropriate, (iv) in the
event the Registration Statement is no longer effective, or
(v) if
Registration Statement is stale as a result of the Company’s failure to timely
file its financials or otherwise. The Company acknowledges that its failure to
cure the Registration Default within ten (10) business days will cause the
Investor to suffer damages in an amount that will be difficult to ascertain.
Accordingly, the parties agree that it is appropriate to include a provision for
liquidated damages. The parties acknowledge and agree that the liquidated
damages provision set forth in this section represents the parties’ good faith
effort to quantify such damages and, as such, agree that the form and amount of
such liquidated damages are reasonable and will not constitute a penalty. It is
the intention of the parties that interest payable under any of the terms of
this Agreement shall not exceed the maximum amount permitted under any
applicable law. If a law, which applies to this Agreement which sets the maximum
interest amount, is finally interpreted so that the interest in connection with
this Agreement exceeds the permitted limits, then: (1) any such
interest shall be reduced by the amount necessary to reduce the interest to the
permitted limit; and (2) any sums
already collected (if any) from the Company which exceed the permitted limits
will be refunded to the Company. The Investor may choose to make this refund by
reducing the amount that the Company owes under this Agreement or by making a
direct payment to the Company. If a refund reduces the amount that the Company
owes the Investor, the reduction will be treated as a partial payment. In case
any provision of this Agreement is held by a court of competent jurisdiction to
be excessive in scope or otherwise invalid or unenforceable, such provision
shall be adjusted rather than voided, if possible, so that it is enforceable to
the maximum extent possible, and the validity and enforceability of the
remaining provisions of this Agreement will not in any way be affected or
impaired thereby.

(f) The
Company shall use commercially reasonable efforts to prevent the issuance of any
stop order or other suspension of effectiveness of a Registration Statement, or
the suspension of the qualification of any of the Registrable Securities for
sale in any jurisdiction and, if such an order or suspension is issued, to
obtain the withdrawal of such order or suspension at the earliest possible
moment and to notify the Investor who holds Registrable Securities being sold of
the issuance of such order and the resolution thereof or its receipt of actual
notice of the initiation or threat of any proceeding for such
purpose.

5

 

(g) The
Company shall permit the Investor and one (1) legal counsel, designated by the
Investor, to review and comment upon a Registration Statement and all amendments
and supplements thereto at least seven (7) business days prior to their filing
with the SEC, and not file any document in a form to which such counsel
reasonably objects. The Company may request to shorten the Investor’s review
period and the Investor will, if possible, attempt to comply with the
accelerated review period. The Company shall not submit to the SEC a request for
acceleration of the effectiveness of a Registration Statement or file with the
SEC a Registration Statement or any amendment or supplement thereto without the
prior approval of such counsel or the Investor, which approval shall not be
unreasonably withheld. 

(h) At the
request of the Investor, the Company shall cause to be furnished to Investor, on
the date of the effectiveness of a Registration Statement, a legal opinion, in
form and substance reasonably acceptable to Investor’s counsel, dated as of such
date, of counsel representing the Company for purposes of such Registration
Statement. 

(i) The
Company shall hold in confidence and not make any disclosure of information
concerning a Investor provided to the Company unless (i)
disclosure
of such information is necessary to comply with federal or state securities
laws, (ii) the
disclosure of such information is necessary to avoid or correct a misstatement
or omission in any Registration Statement, (iii) the
release of such information is ordered pursuant to a subpoena or other final,
non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such
information has been made generally available to the public other than by
disclosure in violation of this Agreement or any other agreement. The Company
agrees that it shall, upon learning that disclosure of such information
concerning a Investor is sought in or by a court or governmental body of
competent jurisdiction or through other means, give prompt written notice to
such Investor and allow such Investor, at the Investor’s expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
for, such information.

(j) The
Company shall use commercially reasonable efforts to maintain designation and
quotation of all the Registrable Securities covered by any Registration
Statement on the Principal Market. If, despite the Company’s best efforts, the
Company is unsuccessful in satisfying the preceding sentence, it shall use
commercially reasonable efforts to cause all the Registrable Securities covered
by any Registration Statement to be listed on each other national securities
exchange and automated quotation system, if any, on which securities of the same
class or series issued by the Company are then listed, if any, if the listing of
such Registrable Securities is then permitted under the rules of such exchange
or system. The Company shall pay all fees and expenses in connection with
satisfying its obligation under this Section 3(j).

6

 

(k) The
Company shall cooperate with the Investor to facilitate the prompt preparation
and delivery of certificates (not bearing any restrictive legend) representing
the Registrable Securities to be offered pursuant to a Registration Statement
and enable such certificates to be in such denominations or amounts, as the case
may be, as the Investor may reasonably request.

(l) The
Company shall provide a transfer agent for all the Registrable Securities not
later than the effective date of the first Registration Statement filed pursuant
hereto.

(m) If
requested by the Investor, the Company shall (i) as soon
as reasonably practical incorporate in a prospectus supplement or post-effective
amendment such information as such Investor reasonably determines should be
included therein relating to the sale and distribution of Registrable
Securities, including, without limitation, information with respect to the
offering of the Registrable Securities to be sold in such offering; (ii) make all
required filings of such prospectus supplement or post-effective amendment as
soon as reasonably possible after being notified of the matters to be
incorporated in such prospectus supplement or post-effective amendment; and
(iii)
supplement or make amendments to any Registration Statement if reasonably
requested by such Investor.

(n) The
Company shall use commercially reasonable efforts to cause the Registrable
Securities covered by the applicable Registration Statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary to consummate the disposition of such Registrable
Securities.

 

(o) The
Company shall otherwise use commercially reasonable efforts to comply with all
applicable rules and regulations of the SEC in connection with any registration
hereunder.

(p) Within
one (1) business day after the Registration Statement which includes Registrable
Securities is declared effective by the SEC, the Company shall deliver to the
transfer agent for such Registrable Securities, with copies to the Investor,
confirmation that such Registration Statement has been declared effective by the
SEC.

(q) The
Company shall take all other reasonable actions necessary to expedite and
facilitate disposition by the Investor of Registrable Securities pursuant to a
Registration Statement.

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Section
4. OBLIGATIONS
OF THE INVESTOR.

 

(a) At least
five (5) calendar days prior to the first anticipated filing date of a
Registration Statement the Company shall notify the Investor in writing of the
information the Company requires from Investor if Investor elects to have any of
the Registrable Securities included in such Registration Statement. It shall be
a condition precedent to the obligations of the Company to complete the
registration pursuant to this Agreement with respect to the Registrable
Securities of the Investor and Investor shall furnish in writing to the Company
such information regarding itself, the Registrable Securities held by it and the
intended method of disposition of the Registrable Securities held by it as shall
reasonably be required to effect the registration of such Registrable Securities
and shall execute such documents in connection with such registration as the
Company may reasonably request. Investor covenants and agrees that, in
connection with any sale of Registrable Securities by it pursuant to a
Registration Statement, it shall comply with the “Plan of Distribution” section
of the current prospectus relating to such Registration Statement.

(b) The
Investor, by Investor’s acceptance of the Registrable Securities, agrees to
cooperate with the Company as reasonably requested by the Company in connection
with the preparation and filing of any Registration Statement hereunder, unless
Investor has notified the Company in writing of an election to exclude all
Investor’s Registrable Securities from such Registration Statement.

(c) The
Investor agrees that, upon receipt of written notice from the Company of the
happening of any event of the kind described in Section 3(f) or the first
sentence of 3(e), such Investor will immediately discontinue disposition of
Registrable Securities pursuant to any Registration Statement(s) covering such
Registrable Securities until Investor’s receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3(f) or the first
sentence of 3(e)

 

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Section
5. EXPENSES
OF REGISTRATION.

All
expenses, other than underwriting discounts and commissions and other than as
set forth in the Investment Agreement, incurred in connection with registrations
including comments, filings or qualifications pursuant to Sections 2 and 3,
including, without limitation, all registration, listing and qualifications
fees, printing and accounting fees, and fees and disbursements of counsel for
the Company or for the Investor shall be paid by the Company.

 

Section
6. INDEMNIFICATION.

In the
event any Registrable Securities are included in a Registration Statement under
this Agreement:

(a) To the
fullest extent permitted by law, the Company will, and hereby does, indemnify,
hold harmless and defend Investor who holds Registrable Securities, the
directors, officers, partners, employees, counsel, agents, representatives of,
and each Person, if any, who controls, any Investor within the meaning of the
1933 Act or the Securities Exchange Act of 1934, as amended (the “1934
Act”) (each,
an “Indemnified
Person”),
against any losses, claims, damages, liabilities, judgments, fines, penalties,
charges, costs, attorneys’ fees, amounts paid in settlement or expenses, joint
or several (collectively, “Claims”),
incurred in investigating, preparing or defending any action, claim, suit,
inquiry, proceeding, investigation or appeal taken from the foregoing by or
before any court or governmental, administrative or other regulatory agency,
body or the SEC, whether pending or threatened, whether or not an indemnified
party is or may be a party thereto (“Indemnified
Damages”), to
which any of them may become subject insofar as such Claims (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon: (i) any
untrue statement or alleged untrue statement of a material fact in a
Registration Statement or any post-effective amendment thereto or in any filing
made in connection with the qualification of the offering under the securities
or other “blue sky” laws of any jurisdiction in which the Investor has requested
in writing that the Company register or qualify the Shares (“Blue
Sky Filing”), or
the omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which the statements therein were made, not misleading,
(ii) any
untrue statement or alleged untrue statement of a material fact contained in the
final prospectus (as amended or supplemented, if the Company files any amendment
thereof or supplement thereto with the SEC) or the omission or alleged omission
to state therein any material fact necessary to make the statements made
therein, in light of the circumstances under which the statements therein were
made, not misleading, or (iii) any
violation or alleged violation by the Company of the 1933 Act, the 1934 Act, any
other law, including, without limitation, any state securities law, or any rule
or regulation thereunder relating to the offer or sale of the Registrable
Securities pursuant to a Registration Statement (the matters in the foregoing
clauses (i) through (iii) being, collectively, “Violations”).
Subject to the restrictions set forth in Section 6(c) the Company shall
reimburse the Investor and each such controlling person, promptly as such
expenses are incurred and are due and payable, for any reasonable legal fees or
other reasonable expenses incurred by them in connection with investigating or
defending any such Claim. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6(a):
(i) shall
not apply to a Claim arising out of or based upon a Violation which is due to
the inclusion in the Registration Statement of the information furnished to the
Company by any Indemnified Person expressly for use in connection with the
preparation of the Registration Statement or any such amendment thereof or
supplement thereto; (ii) shall
not be available to the extent such Claim is based on (a) a
failure of the Investor to deliver or to cause to be delivered the prospectus
made available by the Company or (b) the
Indemnified Person’s use of an incorrect prospectus despite being promptly
advised in advance by the Company in writing not to use such incorrect
prospectus; (iii) any
claims based on the manner of sale of the Registrable Securities by the Investor
or of the Investor’s failure to register as a dealer under applicable securities
laws; (iv) any
omission of the Investor to notify the Company of any material fact that should
be stated in the Registration Statement or prospectus relating to the Investor
or the manner of sale; and (v) any
amounts paid in settlement of any Claim if such settlement is effected without
the prior written consent of the Company, which consent shall not be
unreasonably withheld. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Indemnified Person
and shall survive the resale of the Registrable Securities by the Investor
pursuant to the Registration Statement.

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(b) In
connection with any Registration Statement in which Investor is participating,
Investor agrees to severally and jointly indemnify, hold harmless and defend, to
the same extent and in the same manner as is set forth in Section 6(a), the
Company, each of its directors, each of its officers who signs the Registration
Statement, each Person, if any, who controls the Company within the meaning of
the 1933 Act or the 1934 Act and the Company’s agents (collectively and together
with an Indemnified Person, an “Indemnified
Party”),
against any Claim or Indemnified Damages to which any of them may become
subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim or
Indemnified Damages arise out of or are based upon any Violation, in each case
to the extent, and only to the extent, that such Violation is due to the
inclusion in the Registration Statement of the written information furnished to
the Company by such Investor expressly for use in connection with such
Registration Statement; and, subject to Section 6(c), such Investor will
reimburse any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such Claim; provided,
however, that
the indemnity agreement contained in this Section 6(b) and the agreement with
respect to contribution contained in Section 7 shall not apply to amounts paid
in settlement of any Claim if such settlement is effected without the prior
written consent of such Investor, which consent shall not be unreasonably
withheld; provided, further, however, that the Investor shall be liable under
this Section 6(b) for only that amount of a Claim or Indemnified Damages as does
not exceed the net proceeds to such Investor as a result of the sale of
Registrable Securities pursuant to such Registration Statement. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of such Indemnified Party and shall survive the resale of the
Registrable Securities by the Investor pursuant to the Registration Statement.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(b) with respect to any preliminary
prospectus shall not inure to the benefit of any Indemnified Party if the untrue
statement or omission of material fact contained in the preliminary prospectus
were corrected on a timely basis in the prospectus, as then amended or
supplemented. This indemnification provision shall apply separately to each
Investor and liability hereunder shall not be joint and several.

 

(c) Promptly
after receipt by an Indemnified Person or Indemnified Party under this Section 6
of notice of the commencement of any action or proceeding (including any
governmental action or proceeding) involving a Claim, such Indemnified Person or
Indemnified Party shall, if a Claim in respect thereof is to be made against any
indemnifying party under this Section 6, deliver to the indemnifying party a
written notice of the commencement thereof, and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnified Person or the Indemnified Party, as the
case may be; provided, however, that an Indemnified Person or Indemnified Party
shall have the right to retain its own counsel with the fees and expenses to be
paid by the indemnifying party, if, in the reasonable opinion of counsel
retained by the Indemnified Person or Indemnified Party, the representation by
counsel of the Indemnified Person or Indemnified Party and the indemnifying
party would be inappropriate due to actual or potential differing interests
between such Indemnified Person or Indemnified Party and any other party
represented by such counsel in such proceeding. The indemnifying party shall pay
for only one (1) separate legal counsel for the Indemnified Persons or the
Indemnified Parties, as applicable, and such counsel shall be selected by the
Investor, if the Investor are entitled to indemnification hereunder, or the
Company, if the Company is entitled to indemnification hereunder, as applicable.
The Indemnified Party or Indemnified Person shall cooperate fully with the
indemnifying party in connection with any negotiation or defense of any such
action or Claim by the indemnifying party and shall furnish to the indemnifying
party all information reasonably available to the Indemnified Party or
Indemnified Person which relates to such action or Claim. The indemnifying party
shall keep the Indemnified Party or Indemnified Person fully appraised at all
times as to the status of the defense or any settlement negotiations with
respect thereto. No indemnifying party shall be liable for any settlement of any
action, claim or proceeding effected without its written consent, provided,
however, that the indemnifying party shall not unreasonably withhold, delay or
condition its consent. No indemnifying party shall, without the consent of the
Indemnified Party or Indemnified Person, consent to entry of any judgment or
enter into any settlement or other compromise which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party or Indemnified Person of a release from all liability in
respect to such Claim. Following indemnification as provided for hereunder, the
indemnifying party shall be surrogated to all rights of the Indemnified Party or
Indemnified Person with respect to all third parties, firms or corporations
relating to the matter for which indemnification has been made. The failure to
deliver written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall not relieve such indemnifying party of any
liability to the Indemnified Person or Indemnified Party under this Section 6,
except to the extent that the indemnifying party is prejudiced in its ability to
defend such action.

10

 

    (d) The
indemnity agreements contained herein shall be in addition to (i) any
cause of action or similar right of the Indemnified Party or Indemnified Person
against the indemnifying party or others, and (ii) any
liabilities the indemnifying party may be subject to pursuant to the
law.

 

Section
7. CONTRIBUTION.

To the
extent any indemnification by an indemnifying party is prohibited or limited by
law, the indemnifying party agrees to make the maximum contribution with respect
to any amounts for which it would otherwise be liable under Section 6 to the
fullest extent permitted by law; provided,
however, that:
(i) no
contribution shall be made under circumstances where the maker would not have
been liable for indemnification under the fault standards set forth in Section
6; (ii) no
seller of Registrable Securities guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution
from any seller of Registrable Securities who was not guilty of fraudulent
misrepresentation; and (iii)
contribution
by any seller of Registrable Securities shall be limited in amount to the net
amount of proceeds received by such seller from the sale of such Registrable
Securities.

 

Section
8. REPORTS
UNDER THE 1934 ACT.

With a
view to making available to the Investor the benefits of Rule 144 promulgated
under the 1933 Act or any other similar rule or regulation of the SEC that may
at any time permit the Investor to sell securities of the Company to the public
without registration (“Rule
144”), the
Company agrees to:

(a) make and
keep public information available, as those terms are understood and defined in
Rule 144;

(b) file with
the SEC in a timely manner all reports and other documents required of the
Company under the 1933 Act and the 1934 Act so long as the Company remains
subject to such requirements (it being understood that nothing herein shall
limit the Company’s obligations under Section 5(c) of the Investment Agreement)
and the filing of such reports and other documents is required for the
applicable provisions of Rule 144; and

(c) furnish
to the Investor, promptly upon request, (i) a
written statement by the Company that it has complied with the reporting
requirements of Rule 144, the 1933 Act and the 1934 Act, (ii) a copy
of the most recent annual or quarterly report of the Company and such other
reports and documents so filed by the Company, and (iii) such
other information as may be reasonably requested to permit the Investor to sell
such securities pursuant to Rule 144 without registration.

11

Section
9. NO
ASSIGNMENT OF REGISTRATION RIGHTS.

The
rights under this Agreement shall not be assignable.

Section
10. AMENDMENT
OF REGISTRATION RIGHTS.

Provisions
of this Agreement may be amended only with the written consent of the Company
and Investor. 

Section
11. MISCELLANEOUS.

(a)
Any
notices or other communications required or permitted to be given under the
terms of this Agreement that must be in writing will be deemed to have been
delivered (i) upon
receipt, when delivered personally; (ii)
upon
receipt, when sent by facsimile (provided a confirmation of transmission is
mechanically or electronically generated and kept on file by the sending party);
or (iii) one (1)
day after deposit with a nationally recognized overnight delivery service, in
each case properly addressed to the party to receive the same. The addresses and
facsimile numbers for such communications shall be:

If to the
Company:

HouseRaising,
Inc. 

4801 East
Independence Road

Suite
201

Charlotte,North
Carolina 28212

Telephone:
704-532-2121

Facsimile
704-536-0928

If to the
Investor:

Dutchess
Private Equities Fund, LP

312
Stuart St, Third Floor

Boston,
MA 02116

Telephone:
 617-960-3570

Facsimile:
 617-960-3772

Each
party shall provide five (5) business days prior notice to the other party of
any change in address, phone number or facsimile number.

(b) Failure
of any party to exercise any right or remedy under this Agreement or otherwise,
or delay by a party in exercising such right or remedy, shall not operate as a
waiver thereof.

12

 

(c) The laws
of the Commonwealth of Massachusetts shall govern all issues arising from or
related to this Agreement without regard to the principles of conflict of laws.
Each party hereby irrevocably submits to the exclusive jurisdiction of the state
and federal courts sitting in the City of Boston, County of Suffolk, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. If any provision of this
Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity
or unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other
jurisdiction.

(d) This
Agreement and the Transaction Documents constitute the entire agreement among
the parties hereto with respect to the subject matter hereof and thereof. There
are no restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein and therein.

(e) This
Agreement and the Transaction Documents supersede all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof and thereof.

(f)
The
headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof. Whenever required by the context
of this Agreement, the singular shall include the plural and masculine shall
include the feminine. This Agreement shall not be construed as if it had been
prepared by one of the parties, but rather as if all the parties had prepared
the same.

(g) This
Agreement may be executed in two or more identical counterparts, each of which
shall be deemed an original but all of which shall constitute one and the same
agreement. This Agreement, once executed by a party, may be delivered to the
other party hereto by facsimile transmission of a copy of this Agreement bearing
the signature of the party so delivering this Agreement.

(h) Each
party shall do and perform, or cause to be done and performed, all such further
acts and things, and shall execute and deliver all such other agreements,
certificates, instruments and documents, as the other party may reasonably
request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated
hereby.

*
* *

 

13

 

SIGNATURE
PAGE OF REGISTRATION RIGHTS AGREEMENT

 

Your
signature on this Signature Page evidences your agreement to be bound by the
terms and conditions of the Investment Agreement and the Registration Rights
Agreement as of the date first written above. 

 

 

The
undersigned signatory hereby certifies that he has read and understands the
Registration Rights Agreement, and the representations made by the undersigned
in this Registration Rights Agreement are true and accurate, and agrees to be
bound by its terms. 

 

	 	 	 
	 	
      DUTCHESS PRIVATE EQUITIES
      FUND, II, L.P.,

      BY ITS GENERAL PARTNER,

      DUTCHESS CAPITAL MANAGEMENT, LLC

	 
 	 
 	 
 
		By:  	/s/ Douglas H.
    Leighton
	 	
      

      Name: Douglas H. Leighton
	 	Title:   Managing
      Member

 

	 	 	 
	 	HOUSERAISING,
INC.
	 
 	 
 	 
 
		By:  	/s/ Charles M. Skibo
	 	
      

      Name: Charles M. Skibo
	 	Title:   Chief Executive Officer

 

14Exhibit 10.3

Exhibit 10.3

 

 

HOUSERAISING,
INC.

PLACEMENT
AGENT AGREEMENT

Dated as
of: February
25, 2005

The
undersigned, HouseRaising, Inc., a North Carolina corporation (the “COMPANY”),
hereby agrees with US EURO Securities, Inc., a California corporation (the
“PLACEMENT AGENT”) and Dutchess Private Equities Fund, L.P., a Delaware Limited
Partnership (the “INVESTOR”) as follows:

	1.  	
      OFFERING.
      The Company hereby engages the Placement Agent to act as its exclusive
      placement agent in connection with the Investment Agreement dated
      February
      25, 2005
      (the “INVESTMENT AGREEMENT”) pursuant to which the Company shall issue and
      sell to the Investor, from time to time, and the Investor shall purchase
      from the Company (the “OFFERING”) up to Twelve
      Million Dollars ($12,000,000)
      of the Company’s Class A Voting Common Stock (the “COMMITMENT AMOUNT”),
      par value $0.001
      per share (the “COMMON STOCK”), at price per share equal to the Purchase
      Price, as that term is defined in the Investment Agreement. Pursuant to
      the terms hereof, the Placement Agent shall render consulting services to
      the Company with respect to the Investment Agreement and shall be
      available for consultation in connection with the advances to be requested
      by the Company pursuant to the Investment Agreement. All capitalized terms
      used herein and not otherwise defined herein shall have the same meaning
      ascribed to them as in the Investment Agreement. The Investor will be
      granted certain registration rights with respect to the Common Stock as
      more fully set forth in a Registration Rights Agreement between the
      Company and the Investor dated February
      25, 2005
      (the “REGISTRATION RIGHTS AGREEMENT”). The documents to be executed and
      delivered in connection with the Offering, including, but not limited, to
      this Agreement, the Investment Agreement, and the Registration Rights
      Agreement, and any Prospectus or other disclosure document ( including all
      amendments and supplements ) utilized in connection with the Offering are
      referred to sometimes hereinafter collectively as the “OFFERING
      MATERIALS.” The Company’s Common Stock is sometimes referred to
      hereinafter as the “SECURITIES.” The Placement Agent shall not be
      obligated to sell any Securities and this Offering by the Placement Agent
      shall be solely on a “best efforts basis.”

	2.  	
      REPRESENTATIONS,
      WARRANTIES AND COVENANTS OF THE PLACEMENT AGENT.

A. The
Placement Agent represents, warrants and covenants as follows:

	   (i)
	The
      Placement Agent has the necessary authority to enter into this Agreement
      and to consummate the transactions contemplated
hereby.

 

(ii)
 The
execution and delivery by the Placement Agent of this Agreement and the
consummation of the transactions contemplated herein will not result in any
violation of, or be in conflict with, or constitute a default under, any
agreement or instrument to which the Placement Agent is a party or by which the
Placement Agent or its properties are bound, or any judgment, decree, order or,
to the Placement Agent’s knowledge, any statute, rule or regulation applicable
to the Placement Agent. This Agreement when executed and delivered by the
Placement Agent, will constitute the legal, valid and binding obligations of the
Placement Agent, enforceable in accordance with their respective terms, except
to the extent that (a) the enforceability hereof or thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws from time to
time in effect and affecting the rights of creditors generally, (b) the
enforceability hereof or thereof is subject to general principles of equity, or
(c) the indemnification provisions hereof or thereof may be held to be in
violation of public policy.

 

(iii) Upon
receipt and execution of this Agreement the Placement Agent will promptly
forward copies of this Agreement to the Company or its counsel and the Investor
or its counsel.

 

(iv) The
Placement Agent will not take any action that it reasonably believes would cause
the Offering to violate the provisions of the Securities Act of 1933, as amended
(the “1933 ACT”), the Securities Exchange Act of 1934 (the “1934 ACT”), the
respective rules and regulations promulgated there under (the “RULES AND
REGULATIONS”) or applicable “Blue Sky” laws of any state or
jurisdiction.

1

 

 (v) The
Placement Agent will use all reasonable efforts to determine (a) whether the
Investor is an Accredited Investor and (b) that any information furnished by the
Investor is true and accurate. The Placement Agent shall have no obligation to
insure that (x) any check, note, draft or other means of payment for the Common
Stock will be honored, paid or enforceable against the Investor in accordance
with its terms, or (y) subject to the performance of the Placement Agent’s
obligations and the accuracy of the Placement Agent’s representations and
warranties hereunder, (1) the Offering is exempt from the registration
requirements of the 1933 Act or any applicable state “Blue Sky” law or (2) the
Investor is an Accredited Investor.

 

(vi) The
Placement Agent is a member of the National Association of Securities Dealers,
Inc., and is a broker-dealer registered as such under the 1934 Act and under the
securities laws of the states in which the Securities will be offered or sold by
the Placement Agent unless an exemption for such state registration is available
to the Placement Agent. The Placement Agent is in compliance with all material
rules and regulations applicable to the Placement Agent generally and applicable
to the Placement Agent’s participation in the Offering.

	3.  	
      REPRESENTATIONS
      AND WARRANTIES OF THE COMPANY.

A. The
Company makes to the Placement Agent all the representations and warranties it
makes to the Investor in the Investment Agreement and, in addition, represents
and warrants as follows:

 

(i) The
execution, delivery and performance of each of this Agreement, the Investment
Agreement and the Registration Rights Agreement has been or will be duly and
validly authorized by the Company and is, and with respect to this Agreement,
the Investment Agreement and the Registration Rights Agreement will each be, a
valid and binding agreement of the Company, enforceable in accordance with its
respective terms, except to the extent that (a) the enforceability hereof or
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws from time to time in effect and affecting the rights of creditors
generally, (b) the enforceability hereof or thereof is subject to general
principles of equity or (c) the indemnification provisions hereof or thereof may
be held to be in violation of public policy. The Securities to be issued
pursuant to the transactions contemplated by this Agreement and the Investment
Agreement have been duly authorized and, when issued and paid for in accordance
with (x) this Agreement, the Investment Agreement and the
certificates/instruments representing such Securities, (y) will be valid and
binding obligations of the Company, enforceable in accordance with their
respective terms, except to the extent that (1) the enforceability thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
from time to time in effect and affecting the rights of creditors generally, and
(2) the enforceability thereof is subject to general principles of equity. All
corporate action required to be taken for the authorization, issuance and sale
of the Securities has been duly and validly taken by the Company.

 

(ii) The
Company has a duly authorized, issued and outstanding capitalization as set
forth herein and in the Investment Agreement. The Company is not a party to or
bound by any instrument, agreement or other arrangement providing for it to
issue any capital stock, rights, warrants, options or other securities, except
for this Agreement, the agreements described herein and as described in the
Investment Agreement, dated the date hereof and the agreements described
therein. All issued and outstanding securities of the Company, have been duly
authorized and validly issued and are fully paid and non-assessable; the holders
thereof have no rights of rescission or preemptive rights with respect thereto
and are not subject to personal liability solely by reason of being security
holders; and none of such securities were issued in violation of the preemptive
rights of any holders of any security of the Company. As of the date hereof, the
authorized capital stock of the Company consists of (i)
100,000,000 shares of Common Stock, $0.001 par value per share, of which as of
the date hereof, 36,869,936 shares are issued and outstanding; 5,000,000 shares
of Preferred Stock authorized, $0.001 par value per share, of which as of the
date hereof, 1,000,000 shares of Class A Convertible Preferred Stock are issued
and outstanding; as of December 31, 2004, 9,384,696 shares were reserved for
issuance pursuant to options, warrants and other convertible securities.

2

 

 (iii) The
Common Stock to be issued in accordance with this Agreement and the Investment
Agreement has been duly authorized and when issued and paid for in accordance
with this Agreement, the Investment Agreement and the certificates/instruments
representing such Common Stock, will be validly issued, fully-paid and
non-assessable; the holders thereof will not be subject to personal liability
solely by reason of being such holders; such Securities are not and will not be
subject to the preemptive rights of any holder of any security of the
Company.

	4.	       
      REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
INVESTOR.

	A.	The
      Investor makes to the Placement Agent all the representations and
      warranties it makes to the Company in the Investment Agreement and, in
      addition represents, warrants  and covenants as
follows:

 

(i) The
Investor has the necessary power to enter into this Agreement and to consummate
the transactions contemplated hereby.

 

(ii) The
execution and delivery by the Investor of this Agreement and the consummation of
the transactions contemplated herein will not result in any violation of, or be
in conflict with, or constitute a default under, any agreement or instrument to
which the Investor is a party or by which the Investor or its properties are
bound, or any judgment, decree, order or, to the Investor’s knowledge, any
statute, rule or regulation applicable to the Investor. This Agreement when
executed and delivered by the Investor, will constitute the legal, valid and
binding obligations of the Investor, enforceable in accordance with their
respective terms, except to the extent that (a) the enforceability hereof or
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws from time to time in effect and affecting the rights of creditors
generally, (b) the enforceability hereof or thereof is subject to general
principles of equity, or (c) the indemnification provisions hereof or thereof
may be held to be in violation of public policy.

 

  (iii) The
Investor is not, and will not be, as a result of the transactions contemplated
by the Offering Materials a “dealer” within the meaning of the Securities
Exchange Act of 1934 and applicable federal and state securities laws and
regulations. The Investor covenants that in this respect it is and will remain
in compliance with the requirements of applicable “no action” rulings of the
U.S. Securities Exchange Commission.

 

(iv) The
Investor will promptly forward copies of any and all due diligence
questionnaires compiled by the Investor to the Placement Agent. 

	5.	CERTAIN
      COVENANTS AND AGREEMENTS OF THE COMPANY. 

 

The
Company covenants and agrees at its expense and without any expense to the
Placement Agent as follows: 

	A.	To
      advise the Placement Agent of any material adverse change in the Company’s
      financial condition, prospects or business or of any development
      materially affecting the Company or rendering untrue or misleading any
      material statement in the Offering Materials occurring at any time as soon
      as the Company is either informed or becomes aware
thereof.

	B.	To
      use its commercially reasonable efforts to cause the Common Stock issuable
      in connection with the Equity Line of Credit to be qualified or registered
      for sale on terms consistent with those stated in the Registration Rights
      Agreement and under the securities laws of such jurisdictions as the
      Placement Agent and the Investor shall reasonably request. Qualification,
      registration and exemption charges and fees shall be at the sole cost and
      expense of the Company.

	C.	Upon
      written request, to provide and continue to provide the Placement Agent
      and the Investor copies of all quarterly financial statements and audited
      annual financial statements prepared by or on behalf of the Company, other
      reports prepared by or on behalf of the Company for public disclosure and
      all documents delivered to the Company’s
stockholders.

3

 

	D.	To
      deliver, during the registration period of the Investment Agreement, to
      the Placement Agent upon the Placement Agent’s
request,

 

(i) within
forty five (45) days, a statement of its income for each such quarterly period,
and its balance sheet and a statement of changes in stockholders’ equity as of
the end of such quarterly period, all in reasonable detail, certified by its
principal financial or accounting officer;

 

(ii) within
ninety (90) days after the close of each fiscal year, its balance sheet as of
the close of such fiscal year, together with a statement of income, a statement
of changes in stockholders’ equity and a statement of cash flow for such fiscal
year, such balance sheet, statement of income, statement of changes in
stockholders’ equity and statement of cash flow to be in reasonable detail and
accompanied by a copy of the certificate or report thereon of independent
auditors if audited financial statements are prepared; and

 

(iii) a copy of
all documents, reports and information furnished to its stockholders at the time
that such documents, reports and information are furnished to its stockholders.

	(iv)          	
      a
      copy of all documents, reports and information furnished to the Investor
      at the time that such documents, reports and information are furnished to
      the Investor.

	E.	To
      comply with the terms of the Offering Materials.

	F.	To
      ensure that any transactions between or among the Company, or any of its
      officers, directors and affiliates be on terms and conditions that are no
      less favorable to the Company, than the terms and conditions that would be
      available in an “arm’s length” transaction with an independent third
      party.

	6.	INDEMNIFICATION.

	A.	The
      Company hereby agrees that it will indemnify and hold the Placement Agent
      and each officer, director, shareholder, employee or representative of the
      Placement Agent and each person controlling, controlled by or under common
      control with the Placement Agent within the meaning of Section 15 of the
      1933 Act or Section 20 of the 1934 Act or the SEC’s Rules and Regulations
      promulgated there under (the “Rules and Regulations”), harmless from and
      against any and all loss, claim, damage, liability, cost or expense
      whatsoever (including, but not limited to, any and all reasonable legal
      fees and other expenses and disbursements incurred in connection with
      investigating, preparing to defend or defending any action, suit or
      proceeding, including any inquiry or investigation, commenced or
      threatened, or any claim whatsoever or in appearing or preparing for
      appearance as a witness in any action, suit or proceeding, including any
      inquiry, investigation or pretrial proceeding such as a deposition) to
      which the Placement Agent or such indemnified person of the Placement
      Agent may become subject under the 1933 Act, the 1934 Act, the Rules and
      Regulations, or any other federal or state law or regulation, common law
      or otherwise, arising out of or based upon (i) any untrue statement or
      alleged untrue statement of a material fact contained in (a) Section 4 of
      this Agreement, (b) the Offering Materials (except those written
      statements relating to the Placement Agent given by an indemnified person
      for inclusion therein), (c) any application or other document or written
      communication executed by the Company or based upon written information
      furnished by the Company filed in any jurisdiction in order to qualify the
      Common Stock under the securities laws thereof, or any state securities
      commission or agency; (ii) the omission or alleged omission from documents
      described in clauses (a), (b) or (c) above of a material fact required to
      be stated therein or necessary to make the statements therein not
      misleading; or (iii) the breach of any representation, warranty, covenant
      or agreement made by the Company in this Agreement. The Company further
      agrees that upon demand by an indemnified person, at any time or from time
      to time, it will promptly reimburse such indemnified person for any loss,
      claim, damage, liability, cost or expense actually and reasonably paid by
      the indemnified person as to which the Company has indemnified such person
      pursuant hereto. Notwithstanding the foregoing provisions of this
      Paragraph 6(A), any such payment or reimbursement by the Company of fees,
      expenses or disbursements incurred by an indemnified person in any
      proceeding in which a final judgment by a court of competent jurisdiction
      (after all appeals or the expiration of time to appeal) is entered against
      the Placement Agent or such indemnified person based upon specific finding
      of fact as to the Placement Agent or such indemnified person’s gross
      negligence or willful misfeasance will be promptly repaid to the
      Company.

4

 

	B.	The
      Placement Agent hereby agrees that it will indemnify and hold the Company
      and each officer, director, shareholder, employee or representative of the
      Company, and each person controlling, controlled by or under common
      control with the Company within the meaning of Section 15 of the 1933 Act
      or Section 20 of the 1934 Act or the Rules and Regulations, harmless from
      and against any and all loss, claim, damage, liability, cost or expense
      whatsoever (including, but not limited to, any and all reasonable legal
      fees and other expenses and disbursements incurred in connection with
      investigating, preparing to defend or defending any action, suit or
      proceeding, including any inquiry or investigation, commenced or
      threatened, or any claim whatsoever or in appearing or preparing for
      appearance as a witness in any action, suit or proceeding, including any
      inquiry, investigation or pretrial proceeding such as a deposition) to
      which the Company or such indemnified person of the Company may become
      subject under the 1933 Act, the 1934 Act, the Rules and Regulations, or
      any other federal or state law or regulation, common law or otherwise,
      arising out of or based upon (i) the conduct of the Placement Agent or its
      officers, employees or representatives in willful violation of any of such
      laws and regulations while acting as Placement Agent for the Offering or
      (ii) the material breach of any representation, warranty, covenant or
      agreement made by the Placement Agent in this Agreement (iii) any false or
      misleading information provided to the Company by one of the Placement
      Agent’s indemnified persons. Notwithstanding the foregoing provisions of
      this Paragraph 6(B), any such payment or reimbursement by the Placement
      Agent of fees, expenses or disbursements incurred by an indemnified person
      in any proceeding in which a final judgment by a court of competent
      jurisdiction (after all appeals or the expiration of time to appeal) is
      entered against such indemnified person based upon specific finding of
      fact as to such indemnified person’s gross negligence or willful
      misfeasance will be promptly repaid to the Placement Agent. Placement
      Agent shall not be responsible for any such indemnity payment, loss,
      claim, damage or liability beyond what amount of the gross proceeds was
      paid to them.

	C.	The
      Investor hereby agrees that it will indemnify and hold the Placement Agent
      and each officer, director, shareholder, employee or representative of the
      Placement Agent, and each person controlling, controlled by or under
      common control with the Placement Agent within the meaning of Section 15
      of the 1933 Act or Section 20 of the 1934 Act or the Rules and
      Regulations, harmless from and against any and all loss, claim, damage,
      liability, cost or expense whatsoever (including, but not limited to, any
      and all reasonable legal fees and other expenses and disbursements
      incurred in connection with investigating, preparing to defend or
      defending any action, suit or proceeding, including any inquiry or
      investigation, commenced or threatened, or any claim whatsoever or in
      appearing or preparing for appearance as a witness in any action, suit or
      proceeding, including any inquiry, investigation or pretrial proceeding
      such as a deposition) to which the Placement Agent or such indemnified
      person of the Placement Agent may become subject under the 1933 Act, the
      1934 Act, the Rules and Regulations, or any other federal or state law or
      regulation, common law or otherwise, arising out of or based upon (i) the
      conduct of the Investor or its officers, employees or representatives in
      its acting as the Investor for the Offering or (ii) the material breach of
      any representation, warranty, covenant or agreement made by the Investor
      in the Offering Materials (iii) any false or misleading information
      provided to the Placement Agent by the Investor or one of the Investor’s
      indemnified persons.

	D.	The
      Placement Agent hereby agrees that it will indemnify and hold the Investor
      and each officer, director, shareholder, employee or representative of the
      Investor, and each person controlling, controlled by or under common
      control with the Investor within the meaning of section 15 of the 1933 Act
      or Section 20 of the 1934 Act or the Rules and Regulations, harmless from
      and against any and all loss, claim, damage, liability, cost or expense
      whatsoever (including, but not limited to, any and all reasonable legal
      fees and other expenses and disbursements incurred in connection with
      investigating, preparing to defend or defending any action, suit or
      proceeding, including any inquiry or investigation, commenced or
      threatened, or any claim whatsoever or in appearing or preparing for
      appearance as a witness in any action, suit or proceeding, including any
      inquiry, investigation or pretrial proceeding such as a deposition) to
      which the Investor or such indemnified person of the Investor may become
      subject under the 1933 Act, the 1934 Act, the Rules and Regulations, or
      any other federal or state law or regulation, common law or otherwise,
      arising out of or based upon (i) the conduct of the Placement Agent or its
      officers, employees or representatives in willful violation of any of such
      laws and regulations while acting as the Placement Agent for the Offering
      or (ii) the material breach of any representation, warranty, covenant or
      agreement made by the Placement Agent in this Agreement (iii) any false or
      misleading information provided to the Investor by one of the Placement
      Agent’s indemnified persons. Notwithstanding the foregoing provisions of
      this Paragraph 6(D), any such payment or reimbursement by the Placement
      Agent of fees, expenses or disbursements incurred by an indemnified person
      in any proceeding in which a final judgment by a court of competent
      jurisdiction (after all appeals or the expiration of time to appeal) is
      entered against such indemnified person based upon specific finding of
      fact as to such indemnified person’s gross negligence or willful
      misfeasance will be promptly repaid to the Placement Agent. Placement
      Agent shall not be responsible for any such indemnity payment, loss,
      claim, damage or liability beyond what amount of the gross proceeds was
      paid to them.

5

 

	E.	Promptly
      after receipt by an indemnified party of notice of commencement of any
      action covered by Section 6(A), (B), (C) or (D), the party to be
      indemnified shall, within five (5) business days, notify the indemnifying
      party of the commencement thereof; the omission by one (1) indemnified
      party to so notify the indemnifying party shall not relieve the
      indemnifying party of its obligation to indemnify any other indemnified
      party that has given such notice and shall not relieve the indemnifying
      party of any liability outside of this indemnification if not materially
      prejudiced thereby. In the event that any action is brought against the
      indemnified party, the indemnifying party will be entitled to participate
      therein and, to the extent it may desire, to assume and control the
      defense thereof with counsel chosen by it which is reasonably acceptable
      to the indemnified party. After notice from the indemnifying party to such
      indemnified party of its election to so assume the defense thereof, the
      indemnifying party will not be liable to such indemnified party under such
      Section 6(A), (B), (C), or (D) for any legal or other expenses
      subsequently incurred by such indemnified party in connection with the
      defense thereof, but the indemnified party may, at its own expense,
      participate in such defense by counsel chosen by it, without, however,
      impairing the indemnifying party’s control of the defense. Subject to the
      proviso of this sentence and notwithstanding any other statement to the
      contrary contained herein, the indemnified party or parties shall have the
      right to choose its or their own counsel and control the defense of any
      action, all at the expense of the indemnifying party if, (i) the
      employment of such counsel shall have been authorized in writing by the
      indemnifying party in connection with the defense of such action at the
      expense of the indemnifying party, or (ii) the indemnifying party shall
      not have employed counsel reasonably satisfactory to such indemnified
      party to have charge of the defense of such action within a reasonable
      time after notice of commencement of the action, or (iii) such indemnified
      party or parties shall have reasonably concluded that there may be
      defenses available to it or them which are different from or additional to
      those available to one or all of the indemnifying parties (in which case
      the indemnifying parties shall not have the right to direct the defense of
      such action on behalf of the indemnified party or parties), in any of
      which events such fees and expenses of one additional counsel shall be
      borne by the indemnifying party; provided, however, that the indemnifying
      party shall not, in connection with any one action or separate but
      substantially similar or related actions in the same jurisdiction arising
      out of the same general allegations or circumstance, be liable for the
      reasonable fees and expenses of more than one separate firm of attorneys
      at any time for all such indemnified parties. No settlement of any action
      or proceeding against an indemnified party shall be made without the
      consent of the indemnifying party.

	F.	In
      order to provide for just and equitable contribution in circumstances in
      which the indemnification provided for in Section 6 is due in accordance
      with its terms but is for any reason held by a court to be unavailable on
      grounds of policy or otherwise, the Company and the Placement Agent and
      the Investor shall contribute to the aggregate losses, claims, damages and
      liabilities (including legal or other expenses reasonably incurred in
      connection with the investigation or defense of same) which the other may
      incur in such proportion so that the Company, the Placement Agent and the
      Investor shall be responsible for such percent of the aggregate of such
      losses, claims, damages and liabilities as shall equal the percentage of
      the gross proceeds paid to each of them.; provided, however, that no
      person guilty of fraudulent misrepresentation within the meaning of
      Section 11(f) of the 1933 Act shall be entitled to contribution from any
      person who was not guilty of such fraudulent misrepresentation. For
      purposes of this Section 6(F), any person controlling, controlled by or
      under common control with the Placement Agent, or any partner, director,
      officer, employee, representative or any agent of any thereof, shall have
      the same rights to contribution as the Placement Agent and each person
      controlling, controlled by or under common control with the Company within
      the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
      and each officer of the Company and each director of the Company shall
      have the same rights to contribution as the Company and each person
      controlling, controlled by or under common control with the Investor
      within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
      Act and each member of the general partner of the Investor shall have the
      same rights to contribution as the Company. Any party entitled to
      contribution will, promptly after receipt of notice of commencement of any
      action, suit or proceeding against such party in respect of which a claim
      for contribution may be made against the other party under this Section
      6(F), notify such party from whom contribution may be sought, but the
      omission to so notify such party shall not relieve the party from whom
      contribution may be sought from any obligation they may have hereunder or
      otherwise if the party from whom contribution may be sought is not
      materially prejudiced thereby. The indemnity and contribution agreements
      contained in this Section 6 shall remain operative and in full force and
      effect regardless of any investigation made by or on behalf of any
      indemnified person or any termination of this
Agreement.

6

 

	7.	FEES.
      The Company hereby agrees to pay the Placement Agent 1% of the Put Amount
      on each draw toward the fee. The aggregate maximum amount payable to the
      Placement Agent during the Open Period shall be ten thousand dollars
      ($10,000).

	8.	PAYMENT
      OF EXPENSES. The Company hereby agrees to bear all of the expenses in
      connection with the Offering, including, but not limited to the following:
      filing fees, printing and duplicating costs, advertisements, postage and
      mailing expenses with respect to the transmission of Offering Materials,
      registrar and transfer agent fees, and expenses, fees of the Company’s
      counsel and accountants, issue and transfer taxes, if any. The Company
      agrees to bear all the reasonable expenses of the Placement Agent in
      performing its services under this Agreement including but not limited to
      the fees and expenses of counsel.

	9.	CONDITIONS
      OF CLOSING. The Closing shall be held at the offices of the Investor or
      its counsel. The obligations of the Placement Agent hereunder shall be
      subject to the continuing accuracy of the representations and warranties
      of the Company herein as of the date hereof and as of the Date of Closing
      (the “Closing Date”) with respect to the Company as if it had been made on
      and as of such Closing Date; the accuracy on and as of the Closing Date of
      the statements of the officers of the Company made pursuant to the
      provisions hereof; and the performance by the Company on and as of the
      Closing Date of its covenants and obligations hereunder and to the
      following further conditions:

	A.	Upon
      the effectiveness of a registration statement in accordance with the
      Investment Agreement, the Placement Agent shall receive the opinions of
      Counsel to the Company and of the Investor, dated as of the date thereof,
      which opinion shall be in form and substance reasonably satisfactory to
      the Investor, the Company, their counsel and the Placement
  Agent.

	B.	At
      or prior to the Closing, the Placement Agent shall have been furnished
      such documents, certificates and opinions as it may reasonably require for
      the purpose of enabling them to review or pass upon the matters referred
      to in this Agreement and the Offering Materials, or in order to evidence
      the accuracy, completeness or satisfaction of any of the representations,
      warranties or conditions herein contained.

	C.   
          	
      At
      and prior to the Closing, (i) there shall have been no material adverse
      change nor development involving a prospective change in the condition or
      prospects or the business activities, financial or otherwise, of the
      Company from the latest dates as of which such condition is set forth in
      the Offering Materials; (ii) there shall have been no transaction, not in
      the ordinary course of business except the transactions pursuant to the
      Investment Agreement entered into by the Company which has not been
      disclosed in the Offering Materials or to the Placement Agent in writing;
      (iii) except as set forth in the Offering Materials, the Company shall not
      be in default under any provision of any instrument relating to any
      outstanding indebtedness for which a waiver or extension has not been
      otherwise received; (iv) except as set forth in the Offering Materials,
      the Company shall not have issued any securities (other than those to be
      issued as provided in the Offering Materials) or declared or paid any
      dividend or made any distribution of its capital stock of any class and
      there shall not have been any change in the indebtedness (long or short
      term) or liabilities or obligations of the Company (contingent or
      otherwise) and trade payable debt; (v) no material amount of the assets of
      the Company shall have been pledged or mortgaged, except as indicated in
      the Offering Materials; and (v) no action, suit or proceeding, at law or
      in equity, against the Company or affecting any of its properties or
      businesses shall be pending or threatened before or by any court or
      federal or state commission, board or other administrative agency,
      domestic or foreign, wherein an unfavorable decision, ruling or finding
      could materially adversely affect the businesses, prospects or financial
      condition or income of the Company, except as set forth in the Offering
      Materials. 

	D.    
        	
      At
      Closing, the Placement Agent shall receive a certificate of the Company
      signed by an executive officer and chief financial officer, dated as of
      the applicable Closing, to the effect that the conditions set forth in
      subparagraph (C) above have been satisfied and that, as of the applicable
      closing, the representations and warranties of the Company set forth
      herein are true and correct.

7

 

	10.	TERMINATION.
      This Agreement shall be co-terminus with, and terminate upon the same
      terms and conditions as those set forth in, the Investment Agreement. The
      rights of the Investor and the obligations of the Company under the
      Registration Rights Agreement, and the rights of the Placement Agent and
      the obligations of the Company shall survive the termination of this
      Agreement unabridged for a period of twenty-four (24) months after the
      Closing Date.

	11.	MISCELLANEOUS.
      A. This Agreement may be executed in any number of counterparts, each of
      which shall be deemed to be an original, but all which shall be deemed to
      be one and the same instrument. B. Any notice required or permitted to be
      given hereunder shall be given in writing and shall be deemed effective
      when deposited in the United States mail, postage prepaid, or when
      received if personally delivered or faxed (upon confirmation of receipt
      received by the sending party), addressed as
follows:

If to
Placement Agent, to:

US EURO
Securities, Inc

Corporate
Finance Department

275
Madison Ave., 6th
Floor

New York,
NY 10016

With a
copy to:

Michael
Roy Fugler

Same
address

If to the
Company, to:

HouseRaising,
Inc.

4801 E.
Independence Blvd., Ste. 201

Charlotte,
NC 28212

Attn:
Robert V. McLemore

President

Tel:
(704) 532-2121

 

With a
copy to:

Harold H.
Martin, Esq.

17111
Kenton Drive, Ste. 100B

Cornelius,
NC 28031

Tel:
(704) 894-9760

If to the
Investor: 

Dutchess
Private Equities fund, LP

312
Stuart St.

Boston,
MA 02116

Tel: (617)
960-3582

Fax: (617)
960-3772

or to
such other address of which written notice is given to the others. 

	C.	This
      Agreement shall be governed by and construed in all respects under the
      laws of the State of Delaware, without reference to its conflict of laws
      rules or principles. Any suit, action, proceeding or litigation arising
      out of or relating to this Agreement shall be brought and prosecuted in
      such federal or state court or courts located within the Commonwealth of
      Massachusetts as provided by law. The parties hereby irrevocably and
      unconditionally consent to the jurisdiction of each such court or courts
      located within the Commonwealth of Massachusetts and to service of process
      by registered or certified mail, return receipt requested, or by any other
      manner provided by applicable law, and hereby irrevocably and
      unconditionally waive any right to claim that any suit, action, proceeding
      or litigation so commenced has been commenced in an inconvenient
      forum.

	D.	This
      Agreement and the other agreements referenced herein contain the entire
      understanding between the parties hereto and may not be modified or
      amended except by a writing duly signed by the party against whom
      enforcement of the modification or amendment is
sought.

	E.	If
      any provision of this Agreement shall be held to be invalid or
      unenforceable, such invalidity or unenforceability shall not affect any
      other provision of this Agreement. 

 

IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first written above. 

 

	
      COMPANY:
	 
	 	 
	 	 
	
      By:
      /s/ Robert McLemore
	 
	
      

    	
	
      Name:
      Robert McLemore
	 
	
      Title:  
      President
	 
	 	 
	 	 
	
      PLACEMENT
      AGENT: 
	
      PLACEMENT
      AGENT: 

	 	 
	
      By:
      /s/ Raymond P. Dowd
	
      By:
      /s/ Michael Roy Fugler 

	
      

       	
      

       
	
      Name:
      Raymond P. Dowd
	
      Name:
      Michael Roy Fugler

	
      Title:
      President/Compliance Department 
	
      Title:
      Chairman/Compliance Department

	 	 
	 	 
	
      INVESTOR:
	 
	 	 
	
      DUTCHESS
      PRIVATE EQUITIES FUND, L.P.
	 
	
      BY
      ITS GENERAL PARTNER DUTCHESS 
	 
	
      CAPITAL
      MANAGEMENT, LLC
	 
	 	 
	 	 
	
      By
      /s/ Douglas H. Leighton
	 
	
      

       	 
	
      Name:
      Douglas H. Leighton
	 
	
      Title:
      A Managing Member
	 

8

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