Article IX - Indemnification of Council Members and Officers

Section 1. General Policy

It shall be the policy of the CPESC, Inc. to indemnify to the maximum extent permitted by Chapter 55A of the General Statutes of North Carolina any one or more of the Council members, officers, employees, or agents and former Council members, officers, employees, or agents of CPESC, Inc., and persons who serve or have served at the request of CPESC, Inc. as Council members, officers, partners, trustees, employees or agents of another foreign or domestic CPESC, Inc., partnership, joint venture, trust or other enterprise, against judgments, penalties, settlements and other liabilities incurred by them in connection with any pending, threatened or completed action, suit or proceeding, whether civil, criminal, investigative or administrative (a "proceeding") and against reasonable costs and expenses (including attorneys' fees) in connection with any proceeding, where such liabilities and litigation expenses were incurred incident to the good faith performance of their duties.

Section 2. Use of Corporate Funds

CPESC, Inc. may advance expenses in connection with any proceeding to any such person in accordance with applicable law. The use of funds of CPESC, Inc. for indemnification or for purchase and maintenance of insurance for the benefit of the persons designated in Section 1 of this Article shall be deemed a proper expense of CPESC, Inc.