Document:

Unassociated Document

 

Exhibit 10.1

TRANSITION AGREEMENT

This Transition Agreement (“Transition Agreement”) is effective as of August 19, 2011 (the “Effective Date”), by and between Electromed, Inc., a Minnesota corporation (“Electromed”) and Terry Belford (“Belford”).

RECITALS

A.           Belford is currently employed by Electromed in the capacity of Chief Financial Officer (“CFO”), but wishes to retire from his position and resign his employment.

B.           Electromed and Belford have reached agreement as to the terms and conditions of Belford’s remaining employment with Electromed and his separation in order for their professional relationship to terminate in an amicable manner.

C.           The parties desire to set forth their understanding and agreement with respect to Belford’s transition and separation from Electromed in this Transition Agreement and the Separation Agreement and Release of Claims attached to this Transition Agreement as Exhibit A (the “Separation Agreement”).

NOW, THEREFORE, in consideration of the mutual covenants and promises made by and between the parties, the receipt and adequacy of which is acknowledged, Electromed and Belford hereby agree as follows:

AGREEMENTS

1.           Term.  The period during which Belford will provide transition services under this Transition Agreement will commence on the Effective Date and will terminate automatically on the Separation Date.  For purposes of this Agreement, the “Separation Date” means the earlier of (a) October 31, 2011, or (b) the date on which Electromed’s new CFO commences employment.  The period from the Effective Date through the Separation Date will be referred to as the “Term.”  Electromed agrees to provide prompt notice to Belford of the date the new CFO commences employment if that date is prior to October 31, 2011.

2.           Resignation.

a.           By signing this Transition Agreement, Belford hereby resigns as an employee and CFO of Electromed, effective as of the Separation Date.

b.           If Belford’s employment with Electromed terminates for any reason other than his resignation pursuant to this Transition Agreement, then his termination will be governed by the applicable terms of the New Employment Agreement dated effective January 1, 2010 (the “Employment Agreement”), and this Transition Agreement and the Separation Agreement will become null and void.

 

  

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3.           Duties.  During the Term, Belford will (a) perform his ordinary and customary duties (including but not limited to assisting with and overseeing the preparation and filing of the Annual Report on Form 10-K for the fiscal year ended June 30, 2011 (the “2011 Annual Report”), which the parties expect to be filed no later than September 28, 2011), except that Belford will not make any personnel changes without the approval of the Chief Executive Officer or the Board of Directors of Electromed, and except to the extent otherwise directed by Electromed, (b) transition his duties, and train and educate the appropriate personnel within Electromed to assume his duties, (c) perform such other duties as reasonably directed by Electromed, and (d) abide by and comply with Electromed’s policies, procedures and standards of conduct as they exist from time to time.  Belford’s last day in the office will be the day the 2011 Annual Report is filed with the Securities and Exchange Commission (the “Filing Date”).  Beginning the first business day following the Filing Date and continuing through the Separation Date, Belford will work from home to perform the duties required hereunder.  Belford will not come into the office after the Filing Date unless specifically requested by Electromed’s Chief Executive Officer.

4.           Compensation and Benefits.  From the Effective Date through October 31, 2011, Electromed will continue to (a) pay Belford his current base salary plus any applicable bonus, at a rate of $15,066.00 per month, less applicable deductions and withholding, and (b) provide Belford such other benefits and group insurance benefits for which Belford is eligible, subject to the terms and eligibility requirements of such plans.  Belford will not be entitled to any other compensation or benefits during or after the Term except as expressly set forth in this Transition Agreement and the Separation Agreement.

5.           Separation Pay.  Electromed will provide Belford with the Separation Pay described in Section 2 the Separation Agreement if, and only if, (a) Belford signs this Transition Agreement, (b) Belford does not materially breach the terms of this Transition Agreement, (c) Belford’s resignation pursuant to Section 2 has become effective, and (d) Belford signs (and does not rescind in whole or in part) the Separation Agreement on the later of (i) ten (10) calendar days following the Separation Date, or (ii) twenty-one (21) calendar days from the date Belford receives the Separation Agreement.

6.           Notice of Breach and Opportunity to Cure.  In the event Electromed believes that Belford has breached any of the terms or conditions of this Agreement, Electromed shall give Belford prompt written notice thereof, and Belford shall thereafter have ten (10) days to cure said breach and avoid any default under this Agreement.

7.           Post-Separation Restrictions and Obligations.  In further consideration for the Separation Pay described in Section 2 of the Separation Agreement, Belford agrees that he will abide by the restrictions and obligations described in his Non-Competition, Non-Solicitation, and Confidentiality Agreement dated effective January 1, 2010 (the “Non-Competition Agreement”) as well as the post-separation consulting and cooperation obligations described in the Separation Agreement.

8.           Modifications.  This Transition Agreement and the Separation Agreement supersede all prior agreements and understandings between the parties, whether oral or in writing, relating to Belford’s employment with Electromed and termination thereof, compensation, benefits, and/or separation/severance payments and/or benefits (including but not limited to the Employment Agreement), unless this Transition Agreement is declared null and void pursuant to Section 2 (b) of this Transition Agreement.  Notwithstanding the foregoing, this Transition Agreement does not supersede or terminate the Non-Competition Agreement, or any separate warrant agreements between Belford and Electromed.  This Transition Agreement may not be changed or terminated orally.  No modification, termination or attempted waiver of any of the provisions of this Transition Agreement will be valid unless in writing signed by both parties.

 

  

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9.           Governing Law.  This Transition Agreement and all questions arising in connection with it will be governed by the laws of the State of Minnesota.

10.           Assignment.  This Transition Agreement is personal to Belford and may not be assigned by him without the written agreement of Electromed.  The rights and obligations of this Transition Agreement automatically will inure to the successors and assigns of Electromed.

11.           Severability.  If a court finds any term of this Transition Agreement to be invalid, unenforceable, or void, the parties agree that the court will modify such term to make it enforceable to the maximum extent possible.  If the term cannot be modified, the parties agree that the term will be severed and all other terms of this Transition Agreement will remain in effect.

IN WITNESS WHEREOF, the parties have executed this Transition Agreement in the manner appropriate to each.

	 	 
TERRY BELFORD

	 
	 	 	 
	
Date: August 19, 2011    

	/s/ Terry Belford	 
	 	 	 

 

	 	 
 
ELECTROMED, INC.

	 
	 	 	 
	
Date: August 19, 2011    

	/s/ Robert D. Hansen	 
	 	By: Robert D. Hansen	 
	 	Its: Chief Executive Officer	 
	 	 	 

- 3 -ex1002to8k08066_11042011.htm

Exhibit 10.02

 

INDEMNIFICATION AGREEMENT

This Indemnification Agreement, dated as of November 7, 2011 (this “Agreement”), is by and between SG Blocks, Inc., a Delaware corporation (the “Corporation,” which capitalized term shall include any one or more of its subsidiaries where appropriate), and _______________ (“Indemnitee”):

RECITALS

WHEREAS, highly competent persons are becoming more reluctant to serve publicly-held corporations as directors or executive officers or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to, and activities on behalf of, such corporations; and

WHEREAS, the statutes and judicial duties regarding the duties of officers and directors and officers are often difficult to apply, ambiguous or conflicting and therefore fail to provide such directors and executive officers with adequate and reliable knowledge of legal risks to which they are exposed or information regarding the proper cause of action to take; and

WHEREAS, the current impracticability and costs of obtaining adequate insurance and the uncertainties relating to indemnification have increased the difficulty of attracting and retaining competent directors and executive officers; and

WHEREAS, the Board of Directors of the Corporation (the “Board of Directors”) has determined that the difficulty in attracting and retaining competitive directors and executive officers is detrimental to the best interests of the Corporation’s stockholders and that the Corporation should act to assure such persons that there will be increased certainty of such protection in the future; and

WHEREAS, the Corporation believes it is unfair to directors and executive officers to assume the risk of significant judgments and other expenses which may occur in cases in which the director or executive officer acted in good faith; and

WHEREAS, Section 145 of the General Corporation Law of Delaware (“Section 145”), under which the Corporation is organized, empowers the Corporation to indemnify its officers and directors by agreement and expressly provides that the indemnification provided by Section 145 is not exclusive; and

WHEREAS, the Board of Directors believes it is reasonable, prudent and necessary for the Corporation contractually to obligate itself to indemnify Indemnitee to the fullest extent permitted by applicable law so that Indemnitee will continue to serve the Corporation free from undue concern that Indemnitee will not be so indemnified; and

WHEREAS, Indemnitee is willing to serve, continue to serve and/or to take on additional service for or on behalf of the Corporation on the condition that Indemnitee is so indemnified.

 

  

  

  

NOW, THEREFORE, in consideration of the premises and the covenants contained in this Agreement and other good and valuable consideration, the receipt and adequacy of which is acknowledged by both the Corporation and Indemnitee, and the Corporation and Indemnitee do hereby covenant and agree as follows:

1.            Definitions.

(a)           “Affiliate” includes any corporation, partnership, joint venture, employee benefit plan, trust or other enterprise directly or indirectly owned by the Corporation.

(b)           “Change in Control” means a change in control of the Corporation of a nature that would be required to be reported in response to Item 5(f) of Schedule 14A of Regulation 14A (or in response to any similar item or similar schedule or form) promulgated under the Securities Exchange Act of 1934 (the “Act”), whether or not the Corporation is then subject to such reporting requirement; provided, however, that, without limitation, a Change in Control shall be deemed to have occurred if:

(i)           any “person” (as such term is used in Sections 13(d) and 14(d) of the Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Corporation representing 25% or more of the combined voting power of the Corporation’s then outstanding securities without the prior approval of at least two-thirds of the members of the Board of Directors in office immediately prior to such person attaining such percentage interest;

(ii)          the Corporation is a party to a merger, consolidation, sale of assets or other reorganization, or a proxy contest, as a consequence of which members of the Board of Directors in office immediately prior to such transaction or event constitute less than two-thirds of the Board of Directors immediately thereafter;

(iii)         during any period of 24 consecutive months, individuals who at the beginning of such period constituted the Board of Directors (including for this purpose any new director whose election or nomination for election by the Corporation’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of such period) cease for any reason to constitute at least two-thirds of the Board of Directors; or

(iv)         the stockholders of the Corporation approve a plan of complete liquidation of the Corporation or an agreement for the sale or disposition by the Corporation (in one transaction or a series of transactions) of all or substantially all of the Corporation’s assets.

(c)           “Potential Change in Control” shall be deemed to have occurred if:

(i)           the Corporation enters into an agreement, the consummation of which would result in the occurrence of a Change in Control; or

(ii)          the Board of Directors adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change in Control has occurred.

 

  

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(d)           “Corporate Status” describes the status of a person who is or was or has agreed to become a director, officer, employee or agent of the Corporation, or served at the request of the Corporation as a director, officer, employee, trustee or agent of another corporation, partnership, joint, venture, trust or other enterprise.

(e)           “Disinterested Director” means a director of the Corporation who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

(f)           “Proceeding” includes any threatened, pending or completed inquiry, action, suit, arbitration, alternate dispute resolution mechanism, investigation, administrative hearing or any other proceeding, whether civil, criminal, administrative or investigative, except one initiated by an Indemnitee pursuant to paragraph 12(a) to enforce the Indemnitee’s rights under this Agreement.

(g)           “Expenses” includes all reasonable direct and indirect costs of any type or nature whatsoever (including, without limitation, attorneys’ fees and related disbursements, out-of-pocket costs and reasonable compensation for time spent by the Indemnitee for which Indemnitee is not otherwise compensated by the Corporation or any third party, provided that the rate of such compensation and estimated time involved is approved in advance by the Board of Directors), actually and reasonably incurred by the Indemnitee in connection with either the investigation, defense or appeal of a Proceeding (including amounts paid in settlement by or on behalf of Indemnitee, provided the Corporation agrees to such settlement (an “Approved Settlement”)), or the prosecution of an action or proceeding, including appeals, to establish or enforce a right to indemnification under this Agreement, Section 145 or otherwise.  Expenses as defined in this Agreement shall not include any judgments, fines or penalties actually levied against the Indemnitee.

(h)           “Independent Counsel” means any law firm or member of a law firm which the Board of Directors may designate from time to time, provided that such law firm or member of the law firm so designated is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent: (x) the Corporation or Indemnitee in any matter material to either such party, or (y) any other party to the Proceeding giving rise to a claim for indemnification under this Agreement.  Indemnitee has the sole right, exercisable in Indemnitee’s sole discretion, to waive the proviso contained in clause (x) of the immediately preceding sentence.  Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Corporation or Indemnitee in an action to determine Indemnitee’s rights under this Agreement arising on or after the date of this Agreement, regardless of when the Indemnitee’s act or failure to act occurred.

2.             Services By Indemnitee. Indemnitee shall serve or continue to serve in Indemnitee’s position with the Corporation so long as Indemnitee is duly appointed or elected and qualified in accordance with the applicable provisions of the By-Laws of the Corporation or until such time as he or she tenders his or her resignation in writing, Indemnitee’s employment agreement (if any) is terminated, or Indemnitee’s employment with the Corporation is otherwise terminated by the Board of Directors.  This Agreement shall not impose any obligation on the Indemnitee or the Corporation to continue the Indemnitee’s position with the Corporation beyond any period otherwise applicable, nor to create any right to continued employment of the Indemnitee in any capacity.

 

  

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3.             General Indemnification Right.  The Corporation shall indemnify and shall advance Expenses to Indemnitee as provided in this Agreement to the fullest extent permitted by law.

4.             Proceedings Other than Proceedings by or in the Right of the Corporation.  Indemnitee shall be entitled to the rights of indemnification provided in this section 4 if, by reason of his or her Corporate Status, he or she is, or is threatened to be made, a party to any Proceeding, other than a Proceeding by or in the right of the Corporation.  Pursuant to this section 4, Indemnitee shall be indemnified against Expenses, including, without limitation, amounts paid in an Approved Settlement, as well as any judgments, fines and penalties levied or awarded against Indemnitee in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in, or not opposed to, the best interests of the Corporation, and, with respect to any criminal Proceeding, had no reasonable cause to believe Indemnitee’s conduct was unlawful.  Without limiting the generality of the foregoing, for purposes of this section 4, and in addition to other circumstances for which Indemnitee shall be deemed to have acted in good faith, Indemnitee shall conclusively be deemed to have acted in good faith if Indemnitee’s action is based on information supplied to the Indemnitee by legal counsel for the Corporation or an Affiliate or by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Corporation or an Affiliate.

5.            Proceedings by or in the Right of the Corporation.  Indemnitee shall be entitled to the rights of indemnification provided in this section 5, if, by reason of his or her Corporate Status, Indemnitee is, or is threatened in writing to be made, a party to any threatened, pending or completed Proceeding brought by or in the right of the Corporation to procure a judgment in the Corporation’s favor. Pursuant to this section 5, Indemnitee shall be indemnified against Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with such Proceeding if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in, or not opposed to, the best interests of the Corporation.  Notwithstanding the foregoing, no indemnification against such Expenses shall be made in respect of any claim, issue or matter as to which Indemnitee shall have been adjudged to be liable to the Corporation if applicable law expressly prohibits such indemnification unless and only to the extent that the Court of Chancery of the State of Delaware, or the court in which such Proceeding shall have been brought or is pending, shall determine that indemnification against Expenses may nevertheless be made by the Corporation.  Without limiting the generality of the foregoing, for purposes of this section 5, and in addition to other circumstances for which Indemnitee shall be deemed to have acted in good faith, Indemnitee shall conclusively be deemed to have acted in good faith if Indemnitee’s action is based on information supplied to the Indemnitee by legal counsel for the Corporation or an Affiliate or by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Corporation or an Affiliate.

 

6.             Indemnification for Expenses of a Party Who is Wholly or Partly Successful.  Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of Indemnitee’s Corporate Status, a party to and is successful, on the merits or otherwise, in any Proceeding, Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith.  If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Corporation shall indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with each successfully resolved claim, issue or matter.  For purposes of this section 6, but without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal or withdrawal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

 

  

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7.            Indemnification for Expenses of a Witness.  Notwithstanding any other provision of this Agreement, to the extent that the Indemnitee is, by reason of his or her Corporate Status, a witness in any Proceeding, he or she shall be indemnified against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith.

8.             Advance of Expenses.  The Corporation shall advance all reasonable Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding within twenty days after the receipt by the Corporation of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding.  Such statement or statements shall evidence or reflect the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by an undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it is determined ultimately that Indemnitee is not entitled to be indemnified against such Expenses.

9.            Procedure for Determination of Entitlement to Indemnification.

(a)           To obtain indemnification under this Agreement, Indemnitee shall submit to the secretary of the Corporation a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification.  Promptly upon receipt of such a request for indemnification, the secretary of the Corporation shall advise the Board of Directors in writing that Indemnitee has requested indemnification.

(b)           Upon written request by Indemnitee for indemnification pursuant to paragraph 9(a), a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall be made in the specific case as follows:

(i)           if a Change in Control shall have occurred, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee (unless Indemnitee shall request that such determination be made by the Board of Directors, in which case the determination shall be made in the manner provided below in clauses (ii) or (iii));

(ii)          if a Change of Control shall not have occurred, (x) by the Board of Directors by a majority vote of a quorum consisting of Disinterested Directors, or (y) if a quorum of the Board of Directors consisting of Disinterested Directors is not obtainable or, even if obtainable, if such quorum of Disinterested Directors so directs, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee; or

(iii)         as provided in paragraph 10(b) of this Agreement;

 

  

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and, if it is determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten days after such determination.  Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination.  Any costs or Expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating shall be borne by the Corporation (regardless of the determination as to Indemnitee’s entitlement to indemnification) and the Corporation hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

(c)           In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to paragraph 9(b), and no counsel shall have been designated previously by the Board of Directors or the Independent Counsel so designated is unwilling or unable to serve, then,

(i)           if no Change of Control shall have occurred, the Independent Counsel shall be selected by the Board of Directors and the Corporation shall give written notice to Indemnitee advising Indemnitee of the identity of the Independent Counsel so selected; or

(ii)          if a Change of Control shall have occurred, the Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall request that such selection be made by the Board of Directors, in which event the preceding sentence shall apply), and Indemnitee shall give written notice to the Corporation advising the Corporation of the identity of three potential independent counsels, of which the Board of Directors may select one counsel to act as Independent Counsel.  The Board of Directors shall make such selection within seven days of the giving of such list of three potential independent counsels, and if not selected by the Board of Directors during said seven-day period, Indemnitee shall select the counsel among the three potential independent counsels to serve as the Independent Counsel.

In either event, Indemnitee or the Corporation, as the case may be, may, within seven days after such written notice of selection shall have been given, deliver to the Corporation or to Indemnitee, as the case may be, a written objection to such selection.  Such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirement of “Independent Counsel” as defined in this Agreement, and the objection shall set forth with particularity the factual basis of such assertion.  If such written objection is made, the Independent Counsel so selected may not serve as Independent Counsel unless and until a court has determined that such objection is without merit.  If, within twenty days after submission by Indemnitee of a written request for indemnification pursuant to paragraph 9(a), no Independent Counsel shall have been selected or, if selected, shall have been objected to in accordance with this paragraph 9(c), either the Corporation or Indemnitee may petition the Court of Chancery of the State of Delaware or other court of competent jurisdiction for resolution of any objection which shall have been made by the Corporation or Indemnitee to the other’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the Court or by such other person as the Court shall designate, and the person with respect to whom an objection is favorably resolved or the person so appointed shall act as Independent Counsel under paragraph 9(b).  The Corporation shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with the performance of the Independent Counsel’s responsibilities pursuant to paragraph 9(b), and the Corporation shall pay all reasonable fees and Expenses incident to the implementation of the procedures of this paragraph 9(c), regardless of the manner in which such Independent Counsel was selected or appointed.  Upon the due commencement of any judicial proceeding or arbitration pursuant to section 12, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).

 

  

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10.           Presumptions and Effect of Certain Proceedings.

(a)           If a Change of Control shall have occurred, in making a determination with respect to entitlement to indemnification under this Agreement, the person, persons or entity making such determination shall presume that the Indemnitee is entitled to indemnification under this Agreement if the Indemnitee has submitted a request for indemnification in accordance with paragraph 9(a), and the Corporation shall have the burden of proof to overcome that presumption in connection with the making of any determination contrary to that presumption by any person, persons or entity.

(b)           If, within 30 days after receipt by the Corporation of the request for indemnification, the Board of Directors shall not have made a determination under clauses (i) or (ii)(x) of paragraph 9(b) with regard to such indemnification request, the requisite determination of entitlement to indemnification shall be deemed to have been made in favor of the Indemnitee who then shall be entitled to such indemnification, absent (i) a misstatement by the Indemnitee of a material fact, or an omission of a material fact necessary to make the Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) prohibition of such indemnification under applicable law.  The foregoing provisions of this paragraph 10(b) shall not apply if the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to clauses (i) or (ii)(y) of paragraph 9(b).

(c)           The termination of any Proceeding or of any claim, issue or matter therein by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of the Indemnitee to indemnification or create a presumption that the Indemnitee did not act in good faith and in a manner which  Indemnitee reasonably believed to be in, or not opposed to, the best interests of the Corporation or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that Indemnitee’s conduct was unlawful.

11.           Assumption of Defense.

(a)           In the event the Corporation shall be obligated to pay the Expenses of any Proceeding against the Indemnitee, the Corporation may assume the defense of such Proceeding, with counsel of the Corporation’s reasonable choice, upon the delivery to the Indemnitee of written notice of the Corporation’s reasonable election to do so.  After the giving of such notice, the Corporation will not be liable to the Indemnitee under this Agreement for any fees of counsel subsequently incurred by the Indemnitee with respect to the same Proceeding, provided that (i) the Indemnitee shall have the right to employ counsel in such Proceeding at the Indemnitee’s expense; and (ii) the fees and Expenses of the Indemnitee’s counsel shall be at the expense of the Corporation if (A) the employment of counsel by the Indemnitee has been previously authorized and approved in writing by the Corporation, (B) the Corporation shall have reasonably concluded that there may be a conflict of interest between the Corporation and the Indemnitee in the conduct of any such defense, or (C) the Corporation shall not, in fact, have employed counsel to assume the defense of such Proceeding.

 

  

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(b)           Whether or not such defense is assumed by the Corporation, the Corporation will not be subject to any liability for any settlement made without its written consent.  If the Corporation is not entitled to, or does not elect to, assume the defense of a claim, the Corporation will not be obligated to pay the fees and expenses of more than one counsel for Indemnitee.

12.           Remedies of Indemnitee.

(a)           In the event that any one or more of the following events shall have occurred:

(i)           a determination is made pursuant to section 9 that Indemnitee is not entitled to indemnification under this Agreement,

(ii)          expenses are not advanced timely in accordance with section 8,

(iii)         the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to paragraph 9(b) and such determination shall not have been made and delivered in a written opinion within 90 days after receipt by the Corporation of the request for indemnification,

(iv)        payment of indemnification is not made pursuant to section 6 within ten days after receipt by the Corporation of a written request therefor, and/or

(v)         payment of indemnification is not made within ten days after a determination has been made that Indemnitee is entitled to indemnification or such determination is deemed to have been made pursuant to paragraph 10(b),

then, the Indemnitee shall be entitled to an adjudication of Indemnitee’s entitlement to such indemnification or advancement of Expenses in an appropriate court of the State of Delaware, or in any other court of competent jurisdiction.  Alternatively, Indemnitee, at Indemnitee’s sole option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the rules of the American Arbitration Association.  Indemnitee shall commence such proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first obtained the right to commence such proceeding pursuant to this section 12.  The Corporation shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.

(b)           Whenever a determination is made pursuant to section 8 of this Agreement that Indemnitee is not entitled to indemnification, the judicial proceeding or arbitration commenced pursuant to this section 12 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination.  If a Change of Control shall have occurred, the Corporation shall have the burden of proving that Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be, in any judicial proceeding or arbitration commenced pursuant to this section 12.

 

  

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(c)           If a determination shall have been made or deemed to have been made pursuant to section 9 that Indemnitee is entitled to indemnification, the Corporation shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this section 12 absent

(i)           a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or

(ii)          a prohibition of such indemnification under applicable law.

(d)           The Corporation shall be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this section 12 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Corporation is bound by all the provisions of this Agreement.

(e)           In the event that Indemnitee, pursuant to this section 12, seeks a judicial adjudication or an award in arbitration to enforce his or her rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the Corporation, and shall be indemnified by the Corporation against, any and all expenses (of the types described in the definition of Expenses in this Agreement) actually and reasonably incurred by Indemnitee in connection with obtaining such judicial adjudication or arbitration, but only if Indemnitee prevails therein.  If it shall be determined in said judicial adjudication or arbitration that Indemnitee is entitled to receive part but not all of the indemnification or advancement of Expenses sought, the Expenses incurred by Indemnitee in connection with such judicial adjudication or arbitration shall be appropriately prorated.

13.           Non-Exclusivity; Duration of Agreement; Insurance: and Subrogation.

(a)           The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Corporation’s certificate of incorporation or by-laws, any other agreement, a vote of stockholders, a resolution of directors, or otherwise.

(b)           This Agreement shall continue until and terminate upon the later of:

(i)           five years after the date that Indemnitee shall have ceased to serve as an officer or director of the Corporation, or

(ii)          the final termination of all pending Proceedings in respect of which Indemnitee is granted rights of indemnification or advancement of Expenses under this Agreement and of any proceeding commenced by Indemnitee pursuant to section 12 relating thereto.

(c)           This Agreement shall be binding upon the Corporation and its successors and assigns and shall inure to the benefit of Indemnitee and Indemnitee’s heirs, executors and administrators.

 

  

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(d)           (i)           To the extent that the Corporation maintains an insurance policy or policies providing liability insurance for directors and officers of the Corporation, Indemnitee shall be covered by such policy or policies in accordance with the terms thereof to the maximum extent of the coverage available for Indemnitee under such policy or policies.  The Corporation shall take all necessary or appropriate action to cause such insurers to pay on behalf of the Indemnitee all amounts payable as a result of the commencement of a proceeding in accordance with the terms of such policy.

(ii)          For a period of three years after the date the Indemnitee shall have ceased to serve as an officer or director of the Corporation, the Corporation will provide officers and directors liability insurance for Indemnitee on terms no less favorable than the terms of the liability insurance which the Corporation then provides to the current officers and directors of the Corporation as of the date such services shall totally lease; provided, that the Corporation provides officers and directors liability insurance to its current officers and directors as of such cessation date; and provided, further, that the annual premiums for the liability insurance to be provided to the Indemnitee do not exceed by more than 50% the premium charged for the coverage available for any of the Corporation’s then current officers and directors.

(e)           In the event of any payment under this Agreement, the Corporation shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including, without limitation, execution of such documents as are necessary to enable the Corporation to bring suit to enforce such rights.

(f)           The Corporation shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee otherwise actually has received such payment under any insurance policy, contract, agreement or otherwise.

14.           Severability.  If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever:

(a)           the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and

(b)           to the fullest extent possible the provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.

 

  

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15.           Exception to Right of Indemnification or Advancement of Expenses.

(a)           Except as otherwise provided specifically in this Agreement, Indemnitee shall not be entitled to indemnification or advancement of Expenses under this Agreement with respect to:

 

(i)           any Proceeding, or any claim herein, brought or made by Indemnitee against the Corporation;

(ii)          amounts payable by Indemnitee to the Corporation or any Affiliate in satisfaction of any judgment or settlement in the Corporation’s or such Affiliate’s favor (except amounts for which you shall be entitled to indemnification pursuant to section 5);

(iii)         amounts payable on account of profits realized by you in the purchase or sale of securities of the Corporation or any Affiliate within the meaning of Section 16(b) of the Securities Exchange Act of 1934, as amended;

(iv)         Expenses in connection with which Indemnitee is not entitled to indemnification as a matter of law or public policy; or

(v)          Expenses to the extent you are indemnified by the Corporation otherwise than pursuant to this Agreement, including any Expenses for which payment is made to you under an insurance policy or as otherwise provided pursuant to paragraph 13(c).

(b)           Anything in this Agreement to the contrary notwithstanding, Indemnitee shall not be entitled to indemnification or advancement of Expenses under this Agreement in connection with any claim initiated by Indemnitee, unless:

(i)           the Corporation has joined in or the Board has authorized or consented to any such claim or

(ii)          the claim is one to enforce Indemnitee’s rights under this Agreement.

16.           Headings.  The headings of the sections and paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.  Except as otherwise specifically provided, references in this Agreement to specific section, paragraph and clause numbers and letters shall refer to the sections, paragraphs and clauses in this Agreement having such numbers and letters.

17.           Modification and Waiver.  This Agreement may be amended from time to time to reflect changes in Delaware law or for other reasons.  No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by all of the parties to this Agreement.  No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

18.           Notice by Indemnitee.  Indemnitee shall promptly to notify the Corporation in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder; provided, however, that the failure to give any such notice shall not disqualify the Indemnitee from indemnification hereunder unless such failure has a material adverse effect on the Corporation or on the possibility of a favorable outcome to a Proceeding.

 

  

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19.           Notices.  Notices or other communications required or permitted to be given hereunder shall be in writing and shall be deemed duly given if (x) personally delivered, against written receipt therefor, (y) forwarded by pre-paid certified or registered mail, return receipt requested, or (z) forwarded via a nationally recognized overnight courier service (e.g., Federal Express, USPS Express Mail, UPS, DHL, etc.) to the parties to which such notice or other communication is required by this Agreement to be given, at the address of such parties as follows:

 

	
If to the Corporation, to:

	
Paul M. Galvin, Chief Executive Officer

	  	
SG Blocks, Inc.

	  	
350 Madison Avenue

	  	
New York, New York 10017

	  	  
	
with a copy to:

	
[___________]

	  	  
	  	  
	  	  
	
If to Indemnitee, to:

	
[___________]

	  	  
	
with a copy to:

	
[___________]

 

or, in the case of any of the parties to this Agreement, at such other address as such party shall furnish to each of the other parties in accordance with this section 19.  Notices and other communications delivered personally shall be deemed given as of the date of actual receipt; mailed notices and other communications shall be deemed given as of the date three business days following such mailing; and notices and other communications sent via overnight courier service shall be deemed given as of the date one business day after delivery to such courier service.

20.           Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware.  Any legal action resulting from, arising under, out of or in connection with, directly or indirectly, this Agreement shall be commenced exclusively in the Supreme Court, State of New York, County of Nassau, or the U.S. District Court for the Eastern District of New York.  All parties to this Agreement hereby submit themselves to the jurisdiction of any such court, and agree that service of process on them in any such action, suit or proceeding may be affected by the means by which notices are to be given under this Agreement.

21.           Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument.

22.           Specific Enforcement.  The parties hereby agree that any remedy at law for a violation of any of the provisions of this Agreement is not, in itself, adequate to protect the parties hereto, and each party therefore shall be entitled to specific performance or any other mode of injunctive and/or other equitable relief to enforce such party’s rights hereunder or any other relief a court may award.

 

  

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23.           Invalidity of Provision.  Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction.  In addition, to the extent that any term or provision hereof is deemed invalid, void or otherwise unenforceable, but may be made enforceable by amendment thereto, the parties agree that such amendment may be made so that the same shall, nevertheless, be enforceable to the fullest extent permissible under the laws and public policies applied in any such jurisdiction in which enforcement is sought.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written.

 

	
THE CORPORATION:

	
SG Blocks, Inc.

	  
	  
	
By:

	  
	  	
Paul M. Galvin, Chief Executive Officer

	  
	
INDEMNITEE:

	  
	  
	  

 

  

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