share indemnity letter - what does it mean

(2 Posts)
chiselsattheready Wed 04-Dec-13 20:15:55

hello

i have tiny shares in a small company, which i want to sell. in doing so, i realise i've lost the share certificate (put it in a safe place, etc). i have been asked to sign a share indemnity letter which includes the following clauses, that i will undertake to:-

2. to indemnify the company against all claims demands liabilities costs
charges and expenses that may be brought against or incurred by the company arising out of or in connection with the original certificates still being in existence or the issue of a duplicate certificate or the registration of a sale or transfer as specified
above; and
3. in the event of legal proceedings being instituted against you in connection with any such claim, from time to time upon demand to provide you with such funds as you may require to defend such proceedings and in default of my/our so doing you shall be entitled to admit or settle such proceedings on such terms as you may think fit with recourse to me/us.

please could anyone explain what this leaves me liable for? it seems a bit open ended to me (especially the number 3). to make it clear, i have no interest in the company, now or the future (which is why i'm selling the shares) and wouldn't raise any claim or contest.

thanks in advance.
chisels

The sort of harm they are trying to guard against is that someone else finds your lost share certificate and tries to make a claim against the company.

What they are saying in effect is that they are not taking any liability for claims that arise out of the fact that they have had to issue you with a replacement certificate. You will have to cover their losses.

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