Insurance, Indemnification, and Dissolution

The Commonhaus Foundation (CF) is committed to protecting its team—councilors, officers, employees, and agents—against legal expenses and liabilities they might face while performing their duties in good faith for the Foundation. In simple terms, if individuals are acting with the Foundation's best interests in mind and within the bounds of the law, the Foundation aims to support them.

Below are the detailed policies that outline this support, including the circumstances under which it applies, the process for claiming indemnification, and the Foundation’s rights to procure insurance for further protection. Additionally, the Foundation's approach to dissolution is outlined, ensuring any remaining assets are used to further open source projects in alignment with our mission.

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The CF Council (CFC) shall assess the Foundation's risks and evaluate whether to procure insurance coverages, such as Directors and Officers (D&O) Liability insurance, to protect against those risks.

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Scope of Indemnification and Standard of Conduct

Subject to the limitations set forth in this Section, the Foundation must indemnify directors (councilors), Officers, employees, and agents of the Foundation from any action, suit, or proceeding (whether civil, criminal, administrative or investigative) arising from that person’s role in the Foundation or service at the request of the Foundation.

Standard of Conduct. This indemnification extends to all reasonable expenses (including attorneys’ fees), judgments, fines, and other amounts paid in settlement by the person in connection with the action, so long as the person: (1) acted in good faith and in a manner they reasonably believed to be consistent with the best interests of the Foundation, and (2) had no reason to believe their conduct was unlawful, in the case of criminal matters.

This indemnification does not extend to a person who is found liable to the Foundation in an action brought by the Foundation, or to enforce the Foundation's rights. Otherwise, the outcome of an action will not alone create a presumption that a person did not act in good faith, in the best interests of the Foundation, or with lawful intent.

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Authorization by the Council

The Foundation will only indemnify a person if the CFC first determines that indemnification is proper under the circumstances because the person has met the standard of conduct.

This determination must be made by (a) a majority vote of Councilors who were not party to the action, even if less than a quorum, or (b) the members of the Foundation.

Indemnification: Advance Payment. The Foundation must advance expenses to an indemnified person defending a court action, so long as the indemnified person agrees to repay the advanced amount if the CFC ultimately determines the person was not entitled to indemnification.

Indemnification: Non-Exclusivity. A person’s rights to indemnification and advance expenses under this Section are not exclusive of any other right to indemnification or advance expenses that the person may be entitled to.

Indemnification: Continuation; Advancement of Expenses. A person’s right to indemnification and advancement of expenses under this Section shall continue after the person has ceased to be a Councilor, Officer, employee, or agent of the Foundation, and shall inure to the benefit of the heirs, executors and administrators of that person.

Indemnification: Severability. If any part of this Section or any award made hereunder is determined to be invalid, the other provisions remain in full force and effect.

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Dissolution and Asset Distribution

In the unfortunate event that the Commonhaus Foundation must dissolve, we commit to a responsible and lawful closure process, prioritizing the continuity and integrity of our open source projects. Given that CF projects represent collaborative effort of individual contributors, the dissolution process will respect the unique structure and community-driven nature of each project.

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Dissolution Steps

  1. Settling Liabilities: All outstanding debts or obligations incurred by the Foundation will be paid off.
  2. Prioritizing Project Continuity: Before distributing any remaining assets, we will first seek to ensure the continuity of CF projects. Preference will be given to transferring projects, including associated trademarks and other intellectual property, to entities capable of supporting the ongoing mission of these projects. This could include other nonprofit groups classified under Section 501(c)(3), business leagues under 501(c)(6), or similar entities aligned with our goals. Our primary aim is to preserve the projects' integrity and purpose, rather than liquidating assets for debt repayment.
  3. Asset Distribution: Only after all efforts have been made to secure a future for our projects will remaining assets be distributed in accordance with legal requirements and our mission.
  4. Compliance and Court Involvement: Asset distribution will comply with Section 501(c)(6) of the Internal Revenue Code, with a court’s involvement if necessary, to decide on the recipients aligned with our mission, should no suitable organization be identified.

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Procedures for Dissolution

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