INDEMNITY AGREEMENT
Execution
Copy
INDEMNITY
AGREEMENT
THIS INDEMNITY AGREEMENT is
made as of November 5, 2009 by and among Hong Kong Chenxin International
Development Limited, a Hong Kong company (“HKCo”), Fresh Generation
Overseas Limited (the “HKCo
Stockholder”) and Xxxxxxxx Xxxxx (the “Principal USCo Stockholder” or
“Indemnitor”).
RECITALS
WHEREAS, HKCo, the HKCo
Stockholder and MD Holdings Corp., a Nevada corporation (“USCo”), entered into a Share
Exchange Agreement, dated as of the date hereof (the “Share Exchange Agreement”);
and
WHEREAS, the Share Exchange
Agreement requires as a condition to the obligation of HKCo and the HKCo
Stockholder to close that, among other things, the Indemnitor provides an
indemnity to the Indemnitees (as herein defined).
NOW, THEREFORE, in
consideration of the foregoing, the mutual covenants hereinafter set forth and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Indemnitor and HKCo agree to be legally bound as
follows:
ARTICLE
I
DEFINITIONS
Section
1.01. Certain
Definitions. The
following terms shall have the meanings herein specified throughout this
Agreement:
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“Agreement”
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This
Indemnity Agreement, as same may be amended from time to
time.
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“Contract
Documents”
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The
Share Exchange Agreement and any and all other documents comprising the
entire documentation relating to, pertaining to or delivered in connection
with, the Share Exchange Agreement, including, but not limited to, this
Agreement.
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“Governing
Jurisdiction”
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State
of New York.
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“Indemnitees”
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HKCo
and the HKCo Stockholder.
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“Person”
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Any
natural person, partnership, limited liability company or corporation and
any other form of business or legal entity and any governmental or
quasi-governmental agency or
authority.
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“Third Party
Claims”
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Any
claims, liens, encumbrances, adverse interests, executions, levies,
actions, demands, injunctions, orders, judgments, actions or proceedings,
whether or not seeking costs, damages, penalties or expenses, brought by
any Person relating to or in connection with
USCo.
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Section
1.02. Additional
Definitions. All
terms of this Agreement which are not defined in Section 1.01 shall
have the meanings set forth in this Agreement. Capitalized terms used
but not otherwise defined herein have the meanings specified in the Share
Exchange Agreement.
Section
1.03. Captions. Article
and Section captions and headings of this Agreement are for convenience of
reference only and in no way define, limit, prescribe, expand or otherwise alter
the scope or intent of this Agreement or in any way affect this Agreement or any
provision hereof.
Section
1.04. Interpretation. Words
in the singular number shall be held to include the plural and vice versa and
words of one gender shall be held to include the other genders as the context
requires. The terms “hereof,” “herein” and “herewith” and words of
similar import shall be construed to refer to this Agreement in its entirety and
not to any particular provision unless otherwise stated.
Section
1.05. Governing
Law. This
Agreement shall be construed and enforced in accordance with and governed by the
laws of the Governing Jurisdiction without giving effect to choice of laws or
conflicts of laws principles thereof as though the entire Agreement were to be
fully performed within the Governing Jurisdiction among Persons who were all
residents only of the Governing Jurisdiction.
Section
1.06. Construction. This
Agreement shall be construed without regard to any presumption or rule requiring
construction against the party drafting any instrument or causing any instrument
to be drafted.
Section
1.07. Recitals. The
foregoing recitals are true and correct and are hereby incorporated into this
Agreement as if set forth at length herein.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF INDEMNITOR
The
Indemnitor represents and warrants to the Indemnitees, at and as of the Closing
Date (as defined in the Share Exchange Agreement), solely with respect to
himself, all of the following:
Section
2.01. Legal
Capacity.
(a) The
Indemnitor has the power and the legal capacity to enter into and to perform his
obligations hereunder and to carry out the terms hereof.
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(b) The
execution, delivery and performance by the Indemnitor of this Agreement does not
require any other approval or consent;
(c) This
Agreement is in full force and effect, has been duly executed and delivered by
the Indemnitor, and constitutes the valid and binding obligation of the
Indemnitor, enforceable against the Indemnitor in accordance with its terms,
except as the enforceability thereof may be limited by Bankruptcy and Equity
Exceptions; and
(d) The
execution, delivery and performance by the Indemnitor of this Agreement, and the
consummation of the Contemplated Transactions and the transactions contemplated
hereby, will not result in any violation of, breach of or default under any
contract, instrument, or agreement to which it is a party or by which it or its
property is bound, or of any license, permit, franchise, judgment, writ,
injunction, decree, order, law, ordinance, rule or regulation applicable to
it.
Section
2.02. Stock
Ownership. The
Indemnitor is the sole record and beneficial owner of the USCo Common Stock to
be tendered and cancelled by him pursuant to Section 4.05 of the
Share Exchange Agreement (the “Cancelled Shares”), and the
Cancelled Shares are free and clear of all restrictions on transfer (other than
restrictions of general applicability under the Securities Act and state
securities laws), liens and taxes. The Indemnitor is not a party to
any option, warrant, right, agreement or commitment providing for the
disposition or acquisition of any shares of USCo Common Stock (other than the
Share Exchange Agreement) or any other capital stock of USCo. The
Indemnitor is not a party to any voting trust, proxy or other agreement or
understanding with respect to the transfer or voting of the Cancelled
Shares.
ARTICLE
III
COVENANTS
OF INDEMNITORS
Section
3.01. Notice of Claims or
Liens. The
Indemnitor will notify HKCo, in writing, promptly upon learning of any existing,
pending or threatened Third Party Claims.
Section
3.02. Tender of Cancelled
Shares. Prior
to the Closing, the Principal USCo Stockholder shall tender to the Company for
cancellation the Cancelled Shares in accordance with Section 4.05 of the
Share Exchange Agreement, and be entitled to receive the consideration set forth
therein.
Section
3.03. Further
Assurances. The
Indemnitor shall use his best efforts to perform or fulfill all conditions and
obligations (a) to be performed or fulfilled by him under this Agreement, (b) to
be performed and fulfilled by USCo under the Share Exchange Agreement and the
other Contract Documents, so that the Contemplated Transactions shall be
consummated as soon as practicable. In addition, the Indemnitor shall
from time to time execute, deliver, record, register and file any and all
further documents, agreements, and other instruments and documents, and take all
further actions which may be required under applicable law or which HKCo and the
HKCo Stockholder may reasonably request, in order to effectuate the Contemplated
Transactions and more fully document any securities laws exemptions available
with respect to the Contemplated Transactions.
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ARTICLE
IV
INDEMNIFICATION
BY INDEMNITORS
Section
4.01. Indemnification. Subject
to the limitations on the survival of the representations and warranties
contained in Section
7.11 of the Share Exchange Agreement, the Indemnitor hereby agrees to
indemnify, defend and hold harmless each Indemnitee from and against any losses,
liabilities, damages, deficiencies, costs or expenses (including interest,
penalties and reasonable attorneys’ fees and disbursements) based upon, arising
out of or otherwise due to (a) any inaccuracy in, or any breach of, any
representation, warranty, covenant or agreement of USCo contained in the Share
Exchange Agreement (other than Section 4.11 thereof) or in any document or
other writing delivered pursuant to the Share Exchange Agreement or any other
Contract Document and (b) the business or operations of MD Mortgage
Corporation.
Section
4.02. Subsequent
Events. The
Indemnitor’s liability hereunder shall be unaffected by (i) any amendment or
modification of the provisions of the Share Exchange Agreement, or any other
Contract Document, (ii) any extensions of time for performance required by the
Share Exchange Agreement or any other Contract Document, (iii) the release (in
whole or in part) of USCo from performance or observance of any of the
agreements, covenants, terms or conditions contained in the Share Exchange
Agreement or this Agreement by operation of law or otherwise, whether made with
or without notice to the Indemnitor, or (iv) any exculpatory provision in the
Share Exchange Agreement or any other Contract Document.
Section
4.03. Defenses. The
Indemnitor shall not claim that he has any defense to his obligations hereunder
other than performance of such obligations in accordance with the terms of this
Agreement or the non-existence of a default of such obligations. The
Indemnitor indemnifies the Indemnitees against loss, cost or expense incurred by
reason of the assertion by the Indemnitor of any defense to his obligations
hereunder except the non-existence of a default by the Indemnitor. In
no event shall HKCo or any of its Affiliates be required to seek any remedy from
or assert any claims or rights against any other Person (including USCo) before
seeking remedy against the Indemnitor, nor shall HKCo or any of its Affiliates
be required to post any bond or provide any notice in connection with the
enforcement of any remedies available to it at law or in equity.
ARTICLE
V
MISCELLANEOUS
Section
5.01. Survivorship. The
representations, warranties, covenants, conditions and indemnities contained in
this Agreement shall continue after and survive the execution and delivery of
this Agreement.
Section
5.02. Reliance. The
Indemnitees are entitled to rely upon each and every representation and warranty
contained in this Agreement notwithstanding any independent investigations by
the Indemnitees or their respective beneficiaries, trustees, agents or
representatives and no such independent investigations nor the results of any
such investigations shall be the basis of any defense of any Indemnitor’s
obligations hereunder.
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Section
5.03. Remedies. The
Indemnitee’s rights and remedies against the Indemnitor hereunder shall be in
addition to and not in lieu of all other rights and remedies of the Indemnitees
at law or in equity.
Section
5.04. Notices. Unless
otherwise specifically provided, all notices, demands, consents, approvals or
other communications (collectively, “Notices”) shall be delivered
to the parties in accordance with the procedures and to the addresses set forth
in Section 7.03
of the Share Exchange Agreement.
Section
5.05. Successors and
Assigns. This
Agreement shall be binding upon the Indemnitor and the heirs, successors,
assigns and legal representatives of the Indemnitor and shall inure to the
benefit of the Indemnitees and the successors and assigns of each respective
Indemnitee.
Section
5.06. Conflict. To
the extent there is any conflict between the provisions of this Agreement and
the Share Exchange Agreement or the other Contract Documents, the terms of this
Agreement shall control.
Section
5.07. No Waiver. No
delay, forbearance or neglect by the Indemnitees in the enforcement of any of
the conditions of this Agreement or any of the Indemnitees rights or remedies
hereunder shall constitute or be construed as a waiver thereof. No
waiver of any provision hereof, or any consent required hereunder, shall be
effective unless made in writing signed by or on behalf of the party to be
charged with such waiver. No waiver shall be or be deemed to be a
continuing waiver or waiver in respect of any subsequent condition, breach or
default, either of a similar or different nature, unless expressly so stated in
such writing by the Indemnitees.
Section
5.08. Amendment. No
amendment, change, modification or addition to this Agreement or any part hereof
shall be effective unless made in writing and signed by or on behalf of each
party to be charged therewith.
Section
5.09. Counterparts. This
Agreement may be executed in two or more counterparts, including by facsimile,
each of which shall for all purposes be deemed to constitute an original, but
all of which, when taken together, shall constitute but one instrument, and
shall become effective when copies hereof, when taken together, bear the
signatures of each of the parties hereto.
Section
5.10. Severability
. Should
any clause, section or part of this Agreement be held or declared to be void or
illegal for any reason, all other clauses, sections or parts of this Agreement
which can be effected without such illegal clause, section or part shall
nevertheless continue in full force and effect.
Section
5.11. Consent to
Jurisdiction. The
Indemnitor irrevocably submits to the non-exclusive jurisdiction of any of the
designated courts over any suit, action or proceeding arising out of or relating
to this Agreement.
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Section
5.12. Entire
Agreement. This
instrument contains and constitutes the entire agreement of the parties hereto
regarding the subject matter hereof, and supersedes all prior agreements,
written or oral, between the parties regarding the subject matter
hereof.
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remainder of this page is intentionally left blank; Signature page
follows]
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IN WITNESS WHEREOF, the
parties hereto, intending to be legally bound hereby, have executed this
Indemnity Agreement on the date first above written.
| XXXXXXXX XXXXX | |||
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/s/ Xxxxxxxx Xxxxx | |
| Name | |||
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HONG
KONG CHENXIN INTERNATIONAL
DEVELOPMENT
LIMITED
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By:
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/s/ Bank Yu Po Xxxx | |
| Name: Bank Yu Po Xxxx | |||
| Title: Director | |||
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FRESH
GENERATION OVERSEAS LIMITED
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By:
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/s/ Bank Yu Po Xxxx | |
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Name:
Bank Yu Po Xxxx
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Title: Director
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[Signature
Page to Indemnity Agreement]
