Indemnification by Acquiree Stockholders. Certain of the Acquiree Stockholders, all of which shall be members of management of Acquiree (the “Indemnifying Stockholders”) receiving Exchange Shares pursuant to Section 1.7 shall, for a period commencing from the Closing Date and ending on the second anniversary of the Closing Date, severally, not jointly, pro rata in such proportion as the number of Exchange Shares received by each Indemnifying Stockholder pursuant to Section 1.7 bears to the total number of Exchange Shares received by all Indemnifying Stockholders pursuant to Section 1.7, indemnify Acquiror in respect of, and hold it harmless against, any and all debts, obligations losses, liabilities, deficiencies, damages, fines, fees, penalties, interest obligations, expenses or costs (whether absolute, accrued, contingent, fixed or otherwise, or whether known or unknown, or due or to become due or otherwise) (including without limitation amounts paid in settlement, interest, court costs, costs of investigators, fees and expenses of attorneys, accountants, financial advisors and other experts, and other expenses of litigation) (collectively, “Damages”) incurred or suffered by Acquiree or Acquiror or any Affiliate thereof resulting from: (a) any misrepresentation or breach of warranty by, or failure to perform any covenant or agreement of, Acquiree contained in this Agreement or the Acquiree Certificate; (b) any claim by a stockholder or former stockholder of Acquiree, or any other person or entity, seeking to assert, or based upon: (i) ownership or rights to ownership of any shares of stock of Acquiree prior to the Effective Time; (ii) any rights of a stockholder prior to the Effective Time (other than the right to receive Exchange Shares pursuant to this Agreement), including any option, preemptive rights or rights to notice or to vote; (iii) any rights under the organizational documents of Acquiree prior to the Effective Time; or (iv) any claim that his, her or its shares were wrongfully repurchased by Acquiree prior to the Effective Time; (c) except for brokerage commissions payable in connection with the Private Placement Offering, any claim for brokers’ or finders’ fees or agents’ commissions arising from or through Acquiree, any of its pre-Share Exchange Affiliates or any Acquiree Stockholder in connection with the negotiation or consummation of the transactions contemplated by this Agreement; and (d) any violation of, or any liability under, any Environmental Law (an “Environmental Claim”) relating to or arising from the activities and operations of Acquiree or any Acquiree Subsidiary prior to the Effective Time, regardless of when the environmental hazard giving rise to such Environmental Claim is discovered.
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Sources: Share Exchange Agreement (China Energy Technology Corp., Ltd.)
Indemnification by Acquiree Stockholders. Certain of the Acquiree Stockholders, all of which shall be members of management of Acquiree (the “Indemnifying Stockholders”) receiving Exchange Shares pursuant to Section 1.7 shall, for a period commencing from the Closing Date and ending on the second anniversary of the Closing Date, severally, not jointly, pro rata in such proportion as the number of Exchange Shares received by each Indemnifying Stockholder pursuant to Section 1.7 bears to the total number of Exchange Shares received by all Indemnifying Stockholders pursuant to Section 1.7, indemnify Acquiror in respect of, and hold it harmless against, any and all debts, obligations losses, liabilities, deficiencies, damages, fines, fees, penalties, interest obligations, expenses or costs (whether absolute, accrued, contingent, fixed or otherwise, or whether known or unknown, or due or to become due or otherwise) (including without limitation amounts paid in settlement, interest, court costs, costs of investigators, fees and expenses of attorneys, accountants, financial advisors and other experts, and other expenses of litigation) (collectively, “Damages”) incurred or suffered by Acquiree or Acquiror or any Affiliate thereof resulting from:
(a) any misrepresentation or breach of warranty by, or failure to perform any covenant or agreement of, Acquiree contained in this Agreement or the Acquiree Certificate;
(b) any claim by a stockholder or former stockholder of Acquiree, or any other person or entity, seeking to assert, or based upon: (i) ownership or rights to ownership of any shares of stock of Acquiree prior to the Effective Time; (ii) any rights of a stockholder prior to the Effective Time (other than the right to receive Exchange Shares pursuant to this Agreement), including any option, preemptive rights or rights to notice or to vote; (iii) any rights under the organizational documents of Acquiree prior to the Effective Time; or (iv) any claim that his, her or its shares were wrongfully repurchased by Acquiree prior to the Effective Time;
(c) except for brokerage commissions payable in connection with the Private Placement Offering, any claim for brokers’ or finders’ fees or agents’ commissions arising from or through Acquiree, any of its pre-Share Exchange Affiliates or any Acquiree Stockholder in connection with the negotiation or consummation of the transactions contemplated by this Agreement; and
(d) any violation of, or any liability under, any Environmental Law (an “Environmental Claim”) relating to or arising from the activities and operations of Acquiree or any Acquiree Subsidiary prior to the Effective Time, regardless of when the environmental hazard giving rise to such Environmental Claim is discovered. Notwithstanding the foregoing, except with respect to any fraud or willful misconduct by Acquiree in connection with this Agreement, Acquiror’s sole and exclusive right to collect any Damages with respect to claims resulting from or relating to any misrepresentation or breach of warranty of or failure to perform any covenant or agreement by Acquiree Stockholders contained in this Agreement shall be pursuant to a sale, in the manner set forth in the Escrow Agreement, of Escrow Shares issued to such Indemnifying Stockholder by Acquiror pursuant to Section 1.10 above.
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