Exhibit 10.17
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("Agreement") is entered into by and among
Xxxxx Xxxxxxxx ("Xxxxxxxx"), Mondas Minerals Corp. (and its successors), and CCG
Acquisition Corp. (a Delaware corporation) pursuant Section 7.2(e) of the
Agreement and Plan of Merger ("MERGER AGREEMENT") dated February 4, 2011 among
Mondas Minerals Corp., CCG Acquisition Corp., a Delaware corporation ("CCG
DELAWARE"), Xxxxxxxx, and Consumer Capital Group Inc., a California corporation
("CCG CALIFORNIA"). All capitalized terms used in this Agreement and not defined
shall have the same meanings as assigned to such terms in the Merger Agreement.
WHEREAS, prior to the merger and related transactions under the Merger
Agreement, Xxxxxxxx owned 1,500,000 shares of Mondas Minerals Corp., a Delaware
corporation including its successors ("MONDAS"), constituting 60% of the issued
and outstanding shares of Mondas;
WHEREAS, under the Merger Agreement it is contemplated that CCG California
shall merge with CCG Delaware, a wholly owned subsidiary of Mondas (sometimes
referred to as the "MERGER SUBSIDIARY"), with CCG California as the surviving
corporation (the "MERGER"), and, in connection with the Merger, the shareholders
of CCG California shall receive 17,777,776 shares of common stock of Mondas as
consideration;
WHEREAS, in connection with the Merger, Xxxxxxxx shall cause 1,388,889
shares of his common stock to be cancelled, Mondas shall issue 17,777,776 shares
to the CCG California shareholders, and as a result of the Merger, Mondas will
have issued and outstanding, on a post-merger fully diluted basis (assuming full
issuance of 3,333,333 shares under a proposed option plan), a total of
22,222,220 shares of common stock;
WHEREAS, as an inducement to and a condition for CCG California to conduct
the Merger, Xxxxxxxx is agreeing to the terms of this Agreement; and
WHEREAS, the purpose of this Agreement is to indemnify Mondas and the
Surviving Corporation for all claims and liabilities associated with past
business activities of Mondas prior to the Merger, as well as to provide for
certain post-closing covenants.
IN WITNESS WHEREOF, for valid consideration which is hereby acknowledged,
the parties agree as follows:
1. Representations and Warranties. Xxxxxxxx hereby reiterates the
representations and warranties regarding Mondas set forth in Article V of the
Merger Agreement, which representations and warranties are incorporated into
this Agreement by reference.
2. Indemnification. Xxxxxxxx hereby agrees to indemnify and hold Mondas and
the Surviving Corporation, their officers, directors, employees and agents and
each person, if any, who controls them within the meaning of Section 15 of the
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Securities Act of 1933, as amended (the "SECURITIES ACT") or Section 20 of the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), the
stockholders or members of Mondas and the Surviving Corporation, and, following
the Closing of the Merger, all of their then officers, directors, employees and
agents and each person, if any, who then control Mondas and the Surviving
Corporation within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, harmless from and against (i) any and all past liabilities
of any type or nature whatsoever of Mondas existing at the time of Closing,
which includes all expenses related to the Agreement and liabilities incurred by
Mondas relating to its operations, dealings or actions prior to the date of
Closing, (ii) any breach of the Mondas Representations and Warranties, and (iii)
any breach of covenants by Xxxxxxxx provided herein.
3. Indemnified Parties; Rights. In case any action shall be commenced
involving any person in respect of which indemnity may be sought pursuant hereto
(the "INDEMNIFIED PARTY"), the Indemnified Party shall promptly notify the
person against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in
writing. A delay in giving notice shall only relieve the Indemnifying Party of
liability to the extent the Indemnifying Party suffers actual prejudice because
of the delay. The Indemnifying Party shall have the right, at its option and
expense, to participate in the defense of such a proceeding or claim, but not to
control the defense, negotiation or settlement thereof, which control shall at
all times rest with the Indemnified Party, unless the proceeding or claim
involves only money damages or relates to a corporate restructuring,
recapitalization or stock issuance prior to the Closing, not an injunction or
other equitable relief, and unless the Indemnifying Party:
(i) irrevocably acknowledges in writing complete responsibility for and
agrees to indemnify the Indemnified Party; and
(ii) furnishes satisfactory evidence of the financial ability to indemnify
the Indemnified Party;
in which case the Indemnifying Party may assume such control through counsel of
its choice and at its expense, but the Indemnified Party shall continue to have
the right to be represented, at its own expense, by counsel of its choice in
connection with the defense of such a proceeding or claim. If the Indemnifying
Party does not assume control of the defense of such a proceeding or claim, (i)
the entire defense of the proceeding or claim by the Indemnified Party, (ii) any
settlement made by the Indemnified Party, and (iii) any judgment entered in the
proceeding or claim shall be deemed to have been consented to by, and shall be
binding on, the Indemnifying Party as fully as though it alone had assumed the
defense thereof and a judgment had been entered in the proceeding or claim in
the amount of such settlement or judgment, except that the right of the
Indemnifying Party to contest the right of the Indemnified Party to
indemnification under the Agreement with respect to the proceeding or claim
shall not be extinguished. If the Indemnifying Party does assume control of the
defense of such a proceeding or claim, it will not, without the prior written
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consent of the Indemnified Party settle the proceeding or claim or consent to
entry of any judgment relating thereto which does not include as an
unconditional term thereof the giving by the claimant to the Indemnified Party a
release from all liability in respect of the proceeding or claim. The parties
hereto agree to cooperate fully with each other in connection with the defense,
negotiation or settlement of any such proceeding or claim.
4. Limits.
(a) After the Closing, Xxxxxxxx shall not be required to indemnify any
Indemnified Party with respect to any claim for indemnification pursuant to this
Agreement unless and until the aggregate amount of indemnifiable Damages
suffered by all Indemnitees subject to indemnification pursuant to this
Agreement exceeds $100,000 (the "Threshold"), at which point the indemnifying
Person shall indemnify the full amount of such claims and all claims thereafter,
subject to any other applicable limitations in this section; provided however,
that no Threshold shall apply to any Damages incurred as a result of a breach of
Section 5.7 (Liabilities and Contracts) of the Merger Agreement. The aggregation
of claims must only reach the Threshold once, and after such point the
Indemnitees may seek indemnification for all claims which may arise under this
section. "Damages" shall mean the amount of any loss, damage, injury, decline in
value, liability, claim, fee (including any legal fee, expert fee, accounting
fee or advisory fee), demand, settlement, judgment, award, fine, penalty, tax,
charge, cost (including any cost of investigation) or expense of any nature
whatsoever. Damages related to a failure to receive accounts receivables shall
take into account the revenue reflected by that receivable as it was taken into
account by Parent in valuing the Company.
(b) The maximum amount that Xxxxxxxx shall be required to indemnify the
Indemnified Party under this Agreement shall be $355,000.
(c) Xxxxxxxx agrees to pay any indemnifiable Damages subject to the terms
and conditions hereunder to the Indemnified Parties within 30 days of written
notification to Xxxxxxxx by Indemnified Parties with documentation of such
Damages, and payment shall be made in cash.
(d) Xxxxxxxx shall not be required to indemnify any Indemnified Party with
respect to any claim for indemnification pursuant to this Agreement which arises
after the one (1) year anniversary of the Closing. A claim shall be considered
to have arisen if the Surviving Corporation or Mondas becomes aware of such
claim by any means, including but not limited to written or verbal notification
by any claimant, or awareness of any fact that indicates the existence of any
claim, provided that Surviving Corporation or Mondas notifies Xxxxxxxx of the
existence of such claim(s) on or prior to the one (1) year anniversary of the
Closing.
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5. Additional Post-Closing Covenants. Xxxxxxxx agrees to the following
post-Closing covenants:
(a) Name Change. Immediately following the Closing, Xxxxxxxx shall
cooperate with Mondas and provide any and all information necessary, or take all
actions reasonably requested by Surviving Corporation, for Mondas to be renamed
as "Consumer Capital Group Inc."
(b) Corporate Records.(c) Xxxxxxxx agrees to cooperate and use commercially
reasonable efforts to provide true and accurate historical tax records,
accounting documentation, account numbers, and any other corporate information
relating to Mondas' operations prior to and leading up to the Closing, promptly
upon request of the Surviving Corporation or its representatives.
6. Survival; Termination. The parties agree that all of the covenants,
representations and warranties provided herein shall survive the Closing and
continue to be binding regardless of any investigation made at any time by any
party.
7. Additional Agreements. At any time, and from time to time, each party
will execute such additional instruments and take such action as may be
reasonably requested by the other party to carry out the intent and purposes of
this Agreement.
8. Waiver. Any failure on the part of any party hereto to comply with any
of its obligations, agreements or conditions hereunder may be waived in writing
by the party to whom such compliance is owed.
9. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been given if delivered in person or sent by
prepaid first-class registered or certified mail, return receipt requested, as
follows:
If to Xxxxxxxx: Xxxxx Xxxxxxxx
00000 Xxxx Xxxxx Xxxxxx
Xxxx Xxxxx, XX 00000
Facsimile: 0-000-000-0000
With a copy to: Xxxxxx Xxxxxx, Esq.
000 Xxxxx Xxxxx
Xxx Xxxxx, XX 00000
Facsimile: (000) 000-0000
If to Indemnified Parties c/o Consumer Capital Group Inc.
or Surviving Corporation: 000 X. Xxxxxxxx Xxx. #000
Xxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx Xxx
Facsimile:
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With a copy to: Xxxxxxxxxx & Xxxxx LLP
00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
10. Entire Agreement. This Agreement and the Merger Agreement constitute
the entire agreement between the parties regarding the foregoing subject matter,
and supersede and cancel any other agreement, representation or communication,
whether oral or written, between the parties hereto relating to the transaction
contemplated herein or the subject matter hereof.
11. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of California, without giving
effect to principles of conflicts of laws.
12. Successors and Assigns. This Agreement shall inure to the benefit of,
and be binding upon, the parties hereto and their successors and assigns.
13. Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
14. Fees. In the event of default hereunder by either party, the prevailing
party in any proceeding to enforce this Agreement shall be entitled to recover
attorney's fees and costs and such other damages as may have been caused by the
default of the defaulting party.
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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date set forth below.
Dated: 2-4-2011 By: /s/ Xxxxx Xxxxxxxx
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Xxxxx Xxxxxxxx, an individual
MONDAS MINERALS CORP.
a Delaware corporation
By: /s/ Xxxxx Xxxxxxxx
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Xxxxx Xxxxxxxx
Chief Executive Officer
CCG ACQUISITION CORP.
a Delaware corporation
By: /s/ Xxxxx Xxxxxxxx
--------------------------------------------
Xxxxx Xxxxxxxx
Chief Executive Officer
ACKNOWLEDGED:
CONSUMER CAPITAL GROUP INC.
a California corporation
By: /s/ Xxxx Xxx
--------------------------------
Xxxx Xxx
Chief Executive Officer
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