BOARD OF DIRECTORS - RETAINER AGREEMENT
BOARD
OF DIRECTORS - RETAINER AGREEMENT
This agreement ("Agreement") is made
as of October 1, 2009 between China Energy Recovery, Inc., a Delaware
corporation, with its principal place of business at 7F, No. 267 Qu Xxxx Xxxx,
Xxxxxxx Xxxxxxxx, Xxxxxxxx 000000, Xxxxx ("CER"), and Xxxxxxx
Xxx, with an address of Xxxxxxx Xxx ("Director"), whereby
Director agrees to serve as a director of CER and provide all necessary services
in connection therewith, according to the following:
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I.
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Services
Provided
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Subject to the approval of its
stockholders, CER agrees to engage Director to serve, and Director agrees to
serve, as a member of the Board of Directors of CER (the "Board of Directors")
and to provide those services required of a director pursuant to (i) CER’s
Certificate of Incorporation and Bylaws, as each may be amended from time to
time (the "Certificate
and Bylaws"), (ii) the General Corporation Law of the State of Delaware
("DGCL"), the
federal securities laws and other state and federal laws and regulations, as
applicable, and (iii) as otherwise directed by the Board of Directors and
shareholders of CER (collectively, the "Services").
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II.
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Nature of
Relationship
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Director is an independent contractor
and this Agreement will not create any partnership, joint venture or
employer/employee relationship for purposes of employee benefits, income tax
withholding, F.I.C.A. taxes or otherwise. Except as specifically
provided herein, Director shall have no right, authority or power to enter into
any agreement or incur any obligation on behalf of CER or its Affiliates (as
defined below) or to bind CER or its Affiliates. For purposes hereof,
"Affiliate"
shall mean with respect to any individual, partnership, joint venture,
corporation, limited liability company, trust, unincorporated association or
other entity (each, a "Person"): (i) any
other Person that directly or indirectly through one or more intermediaries
controls or is controlled by or is under common control with such Person; (ii)
any other Person owning or controlling 10% or more of the outstanding voting
securities of or other ownership interests in such Person; (iii) any officer,
director, member or partner of such Person; (iv) if such Person is an officer,
director, member or partner, any other Person for which such Person acts in any
such capacity; or (v) any company in which CER has and maintains an investment
through itself or any other Affiliate.
CER will supply, at no cost to
Director: periodic briefings on the business, director packages for each board
and committee meeting, copies of minutes of meetings and any other materials
that are required under CER’s Certificate and Bylaws or the charter of any
committee of the board on which Director serves and any other materials which
may be necessary for performing the Services requested under this
Agreement.
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III.
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Director’s
Representations and Warranties;
Covenants
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Director represents and warrants that
no other party has exclusive rights to his services in the specific areas
described herein and that Director is in no way compromising any rights, duties
or trust between any other party and Director. Director further
represents, warrants and agrees that no other agreement, written or otherwise,
now exists or will be entered into that will create a conflict of interest with
this Agreement or otherwise impair Director's ability to perform his obligations
under this Agreement or otherwise with respect to CER. Director
further covenants and agrees that he will comply with all applicable state and
federal laws and regulations, as applicable, including, but not limited to,
Director's fiduciary duties to CER set forth in the DGCL and Sections 10 and 16
of the Securities and Exchange Act of 1934, as amended.
During the term of this Agreement and
for a period of six months thereafter (the "Non-Competition
Period"), Director shall not, without obtaining CER’s prior written
consent, directly or indirectly, as an officer, director, employee, consultant,
owner, shareholder, adviser, joint venturer or otherwise, participate in,
assist, aid, engage in, prepare to engage in or advise in any way any business
or enterprise that is in competition with the Company anywhere that the Company
is conducting business during the Non-Competition Period.
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IV.
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Compensation
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A.
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Retainer
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CER shall pay Director a nonrefundable
retainer of $30,000 per year during the term of this Agreement to provide the
Services. A pro rata portion of the annual retainer shall be paid to
Director for portions of the term served by Director that are less than a full
year. This retainer may be revised by action of the Board of
Directors from time to time. Such revision shall be effective as of
the date specified in the resolution for payments not yet made and need not be
documented by an amendment to this Agreement.
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B.
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Stock
Options
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On the Effective Date (as defined
below) of this Agreement, Director shall receive options to purchase 60,000
shares of CER common stock, exercisable at a price per share equal to the
current fair market value of CER's common stock on the grant date of the option
as determined by the Board of Directors. This option grant shall be
subject to the terms of the equity incentive plan adopted by CER's Board of
Directors, and made pursuant to the terms of a separate option agreement between
CER and Director. Twelve and one half percent (12.5%) of the total
number of options shall vest on each quarterly anniversary of the grant date;
provided, that upon the termination of Director’s service as a director of CER,
all unvested options shall be terminated and be forfeited.
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C.
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Payment
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Retainer payments shall be made
quarterly in cash in advance on the first day of each accounting quarter.
No invoices need be submitted by Director for payment of the
retainer.
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D.
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Expenses
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CER will reimburse Director for
reasonable expenses approved in advance by CER's Chief Executive Officer, such
approval not to be unreasonably withheld. Invoices for approved expenses,
with receipts attached, shall be submitted to and must be approved by CER’s
Chief Executive Officer as to form and completeness.
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V.
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Indemnification and
Insurance
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CER and Director will execute an
indemnification agreement substantially in the form of the agreement attached
hereto as Exhibit
B (the "Indemnification
Agreement"). In addition, CER will use its commercial best
efforts to procure and maintain directors’ and officer’s liability insurance,
provided such insurance can be obtained on reasonable terms.
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VI.
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Term of
Agreement
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The term of this Agreement shall
commence on the date that Director is formally appointed to fill a vacant
directorship by the existing Board of Directors (the "Effective Date") and
shall continue through the date that is the earlier to occur of: (i) a
termination of this Agreement in accordance with Section VII; and (ii) the two
year anniversary of the Effective Date. Notwithstanding the foregoing
sentence, this Agreement shall be automatically renewed for successive terms
upon Director’s reelection as a member of CER’s Board of Directors for the
period of such new term, unless the Board of Directors determines not to renew
this Agreement in its sole discretion. Any amendment to this
Agreement must be approved in a meeting or by a written action of CER’s Board of
Directors. Amendments to Section IV regarding compensation hereof do not
require Director’s approval or consent to be effective.
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VII.
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Termination
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This Agreement shall automatically
terminate upon the earlier to occur of (i) the death of Director, (ii)
resignation or removal of the Director from, or failure to win election or
reelection to, the CER Board of Directors, or (iii) upon the approval of the
Board of Directors, in its sole discretion.
In the event of the termination of this
Agreement, Director agrees to return any materials transferred to Director under
this Agreement, except as may be necessary to fulfill any outstanding
obligations hereunder. Director agrees that CER has the right of
injunctive relief to enforce this provision.
In the event of termination, Director
shall be entitled to receive the number of options which have vested in Director
as of the date of termination pursuant to Paragraph A of Section IV
above. The unvested options as of the date of termination shall be
forfeited by Director.
Termination shall not relieve either
party of its continuing obligations under this Agreement, the Indemnification
Agreement or the Confidentiality Agreement (as defined below) with respect to
confidentiality of proprietary information.
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VIII.
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Confidentiality
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Director agrees to sign and abide by
CER’s Director Proprietary Information and Inventions Agreement, a copy of which
is attached hereto as Exhibit A (the "Confidentiality
Agreement").
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IX.
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Resolution of
Dispute
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Any dispute regarding this Agreement
(including without limitation its validity, interpretation, performance,
enforcement, termination and damages) shall be determined in accordance with the
laws of the State of Delaware and the United States of America. Any action
under this paragraph shall not preclude any party hereto from seeking injunctive
or other legal relief to which each party may be entitled.
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X.
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Sole
Agreement
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This Agreement (including the
Confidentiality Agreement and the Indemnification Agreement) supersedes all
prior or contemporaneous written or oral understandings or agreements, and may
not be added to, modified, or waived, in whole or in part, except by a writing
signed by the party against whom such addition, modification or waiver is sought
to be asserted.
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XI.
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Assignment
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This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns and, except as
otherwise expressly provided herein, neither this Agreement, nor any of the
rights, interests or obligations hereunder shall be assigned by either of the
parties hereto without the prior written consent of the other
party.
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XII.
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Notices
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Any and all notices, requests and other
communications required or permitted hereunder shall be in writing, registered
mail or by facsimile, to each of the parties at the addresses set forth above or
the numbers set forth below:
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Director:
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Attention: Xxxxxxx
Xxx
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Telephone:
000-000-0000
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Facsimile: 000-000-0000
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CER:
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Attention:
Qinghuan Wu
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7F,
No. 267 Qu Xxxx Xxxx
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Xxxxxxx
Xxxxxxxx
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Xxxxxxxx
000000, Xxxxx
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Telephone:
00-00-00000000
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Facsimile:
00-00-00000000
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Any such
notice shall be deemed given when received and notice given by registered mail
shall be considered to have been given on the tenth (10th) day after having been
sent in the manner provided for above.
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XIII.
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Survival of
Obligations
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Notwithstanding the expiration of
termination of this Agreement, neither party hereto shall be released hereunder
from any liability or obligation to the other which has already accrued as of
the time of such expiration or termination (including, without limitation, CER’s
obligation to make any fees and expense payments required pursuant to Section IV
hereof) or which thereafter might accrue in respect of any act or omission of
such party prior to such expiration or termination.
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XIV.
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Severability
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Any provision of this Agreement which
is determined to be invalid or unenforceable shall not affect the remainder of
this Agreement, which shall remain in effect as though the invalid or
unenforceable provision had not been included herein, unless the removal of the
invalid or unenforceable provision would substantially defeat the intent,
purpose or spirit of this Agreement. Further, to the extent that any
provision of this Agreement is inconsistent with any provision in CER's
Certificate or Bylaws, such provision in the Certificate or Bylaws shall
control.
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IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed by their duly
authorized officers, as of the date first written above.
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DIRECTOR:
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By:
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/s/ Xxxxxxx Xxx
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Name:
Xxxxxxx Xxx
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CER:
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By:
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/s/ Qinghuan Wu
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Name:
Qinghuan Wu
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Title: Chief
Executive
Officer
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EXHIBIT
A
BOARD
OF DIRECTORS PROPRIETARY INFORMATION
AND
INVENTIONS AGREEMENT
WHEREAS, Xxxxxxx Xxx ("Director") and China
Energy Recovery, Inc., a Delaware corporation ("CER"), have entered
into the Board of Directors – Retainer Agreement dated as of October 1, 2009
(the "Retainer
Agreement"), whereby Director agrees to serve as a member of the board of
directors of CER;
WHEREAS, the parties agree that in
connection with Director's services to CER as a director, Director will receive
certain confidential and proprietary information of CER, the disclosure of which
information by Director would be damaging to CER; and
WHEREAS, the parties desire to assure
the confidential status of the information which may be disclosed by CER to
Director pursuant to the Retainer Agreement and in connection with Director's
services as a director of CER.
NOW THEREFORE, in reliance upon and in
consideration of the following undertaking, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1. Director
acknowledges that pursuant to his service as a director of CER: (i) Director has
had and will have access to Proprietary Information (as defined below), all of
which has been and shall be made accessible to Director only in strict
confidence; (ii) unauthorized disclosure of the Proprietary Information will
damage CER's business; (iii) Proprietary Information would be susceptible to
immediate competitive application by a competitor of CER; (iv) CER's business is
substantially dependent on access to and the continuing secrecy of Proprietary
Information; (v) Proprietary Information is novel, unique to CER and known only
to Director, other directors, CER and certain key employees and contractors of
CER; (vi) CER shall at all times retain ownership and control of all Proprietary
Information; and (vii) the restrictions contained in this Agreement and the
Retainer Agreement are reasonable and necessary for the protection of CER's
legitimate business interests.
2. Subject
to the limitations set forth in Paragraph 3, all information of a confidential
nature disclosed by CER to Director shall be deemed to be "Proprietary
Information". In particular, Proprietary Information shall be
deemed to include any information, process, technique, algorithm, program,
design, drawing, formula or test data relating to any research project, work in
process, future development, engineering, manufacturing, marketing, servicing,
financing or personnel matter relating to CER, its present or future products,
sales, suppliers, customers, employees, investors, or business, whether oral,
written, graphic or electronic form.
3. The
term "Proprietary
Information" shall not be deemed to include information which Director
can demonstrate by competent written proof: (i) is now, or hereafter becomes,
through no act or failure to act on the part of Director, generally known or
available; (ii) is known by Director at the time of receiving such information
as evidenced by his records; (iii) is hereafter furnished to Director by a third
party, as a matter of right and without restriction on disclosure; or (iv) is
the subject of a prior written permission to disclose provided by
CER.
A-1
4. Director
shall maintain in trust and confidence and shall not disclose to any third party
or use for any unauthorized purpose any Proprietary Information received from
CER. Director may use such Proprietary Information only to the extent
required to accomplish the purposes of this Agreement and the Retainer
Agreement. Director shall not use Proprietary Information for any purpose
or in any manner which would constitute a violation of any laws or regulations,
including without limitation the export control laws of the United States.
No other rights of licenses to trademarks, inventions, copyrights, or patents
are implied or granted under this Agreement.
5. Proprietary
Information supplied shall not be reproduced in any form except as required to
accomplish the intent of this Agreement and the Retainer Agreement.
6. Director
represents and warrants that he shall protect the Proprietary Information
received with at least the same degree of care used to protect his own
Proprietary Information from unauthorized use or disclosure.
7. All
Proprietary Information (including all copies thereof) shall remain in the
property of CER, and shall be returned to CER after Director's need for it has
expired, or upon request of CER, and in any event, upon completion or
termination of this Agreement or the Retainer Agreement.
8. Notwithstanding
any other provision of this Agreement or the Retainer Agreement, disclosure of
Proprietary Information shall not be precluded if Director has provided prior
written notice of such disclosure to CER and such disclosure:
(a) is
in response to a valid order of a court or other governmental body of the United
States or any political subdivision thereof; provided, however, that the
responding party shall first have given notice to the other party hereto and
shall have made a reasonable effort to obtain a protective order requiring that
the Proprietary Information so disclosed be used only for the purpose for which
the order was issued;
(b) is
otherwise required by law; or
(c) is
otherwise necessary to establish rights or enforced obligations under this
Agreement, but only to the extent that any such disclosure is
necessary.
9. This
Agreement shall continue in full force and effect for so long as Director
continues to receive or is in possession of Proprietary Information. This
Agreement may be terminated at any time upon thirty (30) days written notice to
the other party. The termination of this Agreement shall not relieve
Director of the obligations imposed by Paragraphs 4, 5, 6, 7 and 13 of this
Agreement with respect to Proprietary Information received by Director prior to
the effective date of such termination, and the provisions of these Paragraphs
shall survive the termination of this Agreement and the Retainer
Agreement.
10. Director
agrees to fully indemnify CER for any loss or damage, direct or indirect,
suffered as a result of any breach by Director of the terms of this Agreement,
including any reasonable fees incurred by CER in the collection of such
indemnity.
11. Any
dispute regarding this Agreement (including without limitation its validity,
interpretation, performance, enforcement, termination and damages) shall be
determined in accordance with the laws of the State of Delaware and the United
States of America.
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12. This
Agreement contains the final, complete and exclusive agreement of the parties
relative to the subject matter hereof and may not be changed, modified, amended
or supplemented except by a written instrument signed by both
parties.
13. Each
party hereby acknowledges and agrees that in the event of any breach of this
Agreement by Director, including, without limitation, an actual or threatened
disclosure of Proprietary Information without the prior express written consent
of CER, CER will suffer an irreparable injury, such that no remedy at law will
afford it adequate protection against, or appropriate compensation for, such
injury. Accordingly, each party hereby agrees that CER shall be entitled
to specific performance of Director's obligations under this Agreement, as well
as such further injunctive relief as may be granted by a court of competent
jurisdiction.
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IN WITNESS WHEREOF, the
parties hereto have executed this Agreement on and as of the day and year first
above written.
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CER:
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0X,
Xx. 000, Xx Xxxx Xxxx, Xxxxxxx Xxxxxxxx
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Xxxxxxxx
200081, China
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By:
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/s/ Qinghuan Wu
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Name:
Qinghuan Wu
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Title: Chief
Executive Officer
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DIRECTOR:
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By:
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/s/ Xxxxxxx Xxx
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Name:
Xxxxxxx Xxx
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A-4
EXHIBIT
B
INDEMNITY
AGREEMENT
THIS AGREEMENT is made and
entered as of October 1, 2009 by and between China Energy Recovery, Inc., a
Delaware corporation ("CER"), and Xxxxxxx
Xxx ("Director").
RECITALS
WHEREAS, CER and Director have
entered into a Board of Directors – Retainer Agreement dated as of October 1,
2009 (the "Retainer
Agreement"), whereby Director will perform a valuable service to CER in
his capacity as a director of CER;
WHEREAS, the stockholders of
CER have adopted bylaws (the "Bylaws"), which,
among other things, provide for the indemnification of the directors, officers,
employees and other agents of CER, including persons serving at the request of
CER in such capacities with other corporations or enterprises, as authorized by
the General Corporation Law of the State of Delaware, as amended (the "Code");
WHEREAS, the Bylaws and the
Code, by their non-exclusive nature, permit contracts between CER and its
agents, officers, employees and other agents with respect to indemnification of
such persons; and
WHEREAS, in order to induce
Director to serve as a director of CER, CER has determined and agreed that it is
in the best interest of CER to enter into this Agreement with
Director;
NOW, THEREFORE, in
consideration of Director’s service as a director after the date hereof, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
AGREEMENT
1. Services to
CER. Director will serve as a director of CER or as a
director, officer or other fiduciary of an affiliate of CER (including any
employee benefit plan of CER) faithfully and to the best of his ability so long
as he is duly elected and qualified in accordance with the provisions of the
Bylaws or other applicable charter documents of CER or such affiliate; provided, however, that
Director may at any time and for any reason resign from such position (subject
to any contractual obligation that Director may have assumed apart from this
Agreement) and that CER or any affiliate shall have no obligation under this
Agreement to continue Director in any such position.
2. Indemnity of
Director. CER hereby agrees to hold harmless and indemnify
Director to the fullest extent authorized or permitted by the provisions of the
Bylaws and the Code, as the same may be amended from time to time (but, only to
the extent that such amendment permits CER to provide broader indemnification
rights than the Bylaws or the Code permitted prior to adoption of such
amendment).
3. Additional
Indemnity. In addition to and not in limitation of the
indemnification otherwise provided for herein, and subject only to the
exclusions set forth in Section 4 hereof, CER hereby further agrees to hold
harmless and indemnify Director:
B-1
(a) against
any and all expenses (including attorneys’ fees), witness fees, damages,
judgments, fines and amounts paid in settlement and any other amounts that
Director becomes legally obligated to pay because of any claim or claims in
connection with any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, arbitrational, administrative or investigative
(including an action by or in the right of CER) to which Director is, was or at
any time becomes a party, or is threatened to be made a party, by reason of the
fact that Director is, was or at any time becomes a director, officer, employee
or other agent of CER, or is or was serving or at any time serves at the request
of CER as a director, officer, employee or other agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise;
and
(b) otherwise,
to the fullest extent as may be provided to Director by CER under the
non-exclusivity provisions of the Code and the Bylaws.
4. Limitations on Additional
Indemnity. No indemnity pursuant to Section 3 hereof shall be
paid by CER:
(a) on
account of any claim against Director solely for an accounting of profits made
from the purchase or sale by Director of securities of CER pursuant to the
provisions of Section 16(b) of the Securities Exchange Act of 1934 and
amendments thereto or similar provisions of any federal, state or local
statutory law;
(b) on
account of Director’s conduct that is established by a final judgment as
fraudulent or dishonest or that constituted willful misconduct;
(c) on
account of Director’s conduct that is established by a final judgment as
constituting a breach of Director’s duty of loyalty to CER, or which results in
any personal profit or advantage to which Director was not legally
entitled;
(d) for
which payment is actually made to Director under a valid and collectible
insurance policy or under a valid and enforceable indemnity clause, bylaw or
agreement, except in respect of any excess beyond payment under such insurance,
clause, bylaw or agreement;
(e) if
indemnification is not lawful (and, in this respect, both CER and Director have
been advised that the Securities and Exchange Commission believes that
indemnification for liabilities arising under the federal securities laws is
against public policy and is, therefore, unenforceable and that claims for
indemnification should be submitted to appropriate courts for adjudication);
or
(f) in
connection with any proceeding (or part thereof) initiated by Director, or any
proceeding by Director against CER or its directors, officers, employees or
other agents, unless (i) such indemnification is expressly required to be made
by law, (ii) the proceeding was authorized by the Board of Directors of CER,
(iii) such indemnification is provided by CER, in its sole discretion, pursuant
to the powers vested in CER under the Code, or (iv) the proceeding is initiated
pursuant to Section 9 hereof.
5. Continuation of
Indemnity. All agreements and obligations of CER contained
herein shall continue during the period Director is a director, officer,
employee or other agent of CER (or is or was serving at the request of CER as a
director, officer, employee or other agent of another corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise) and shall
continue thereafter so long as Director shall be subject to any possible claim
or threatened, pending or completed action, suit or proceeding, whether civil,
criminal, arbitrational, administrative or investigative, by reason of the fact
that Director was serving in the capacity referred to herein.
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6. Partial
Indemnification. Subject to the limitations on indemnity
provided in Section 4, Director shall be entitled under this Agreement to
indemnification by CER for the portion of the expenses (including attorneys’
fees), witness fees, damages, judgments, fines and amounts paid in settlement
and any other amounts to which Director is entitled and that Director becomes
legally obligated to pay in connection with any action, suit or proceeding
referred to in Section 3 hereof even if not entitled hereunder to
indemnification for the total amount thereof, and CER shall indemnify Director
for the portion thereof to which Director is entitled.
7. Notification and Defense of
Claim. Not later than thirty (30) days after receipt by
Director of notice of the commencement of any action, suit or proceeding,
Director will, if a claim in respect thereof is to be made against CER under
this Agreement, notify CER of the commencement thereof. With respect
to any such action, suit or proceeding as to which Director notifies CER of the
commencement thereof:
(a) CER
will be entitled to participate therein at its own expense;
(b) except
as otherwise provided below, CER may, at its option and jointly with any other
indemnifying party similarly notified and electing to assume such defense,
assume the defense thereof, with counsel reasonably satisfactory to
Director. After notice from CER to Director of its election to assume
the defense thereof, CER will not be liable to Director under this Agreement for
any legal or other expenses subsequently incurred by Director in connection with
the defense thereof except for reasonable costs of investigation or otherwise as
provided below. Director shall have the right to employ separate
counsel in such action, suit or proceeding but the fees and expenses of such
counsel incurred after notice from CER of its assumption of the defense thereof
shall be at the expense of Director, unless (i) the employment of counsel by
Director has been authorized by CER, (ii) Director shall have reasonably
concluded, and CER has agreed, that there is an actual conflict of interest
between CER and Director in the conduct of the defense of such action, or (iii)
CER shall not in fact have employed counsel to assume the defense of such
action, in each of which cases the fees and expenses of Director’s separate
counsel shall be at the expense of CER. CER shall not be entitled to
assume the defense of any action, suit or proceeding brought by or on behalf of
CER or as to which Director and CER shall have made the conclusion provided for
in clause (ii) above; and
(c) CER
shall not be liable to indemnify Director under this Agreement for any amounts
paid in settlement of any action or claim effected without its written consent,
which shall not be unreasonably withheld. CER shall be permitted to settle any
action except that it shall not settle any action or claim in any manner which
would impose any penalty or limitation on Director without Director’s written
consent, which may be given or withheld in Director’s sole
discretion.
8. Expenses. CER shall
advance, prior to the final disposition of any proceeding, promptly following
request therefor, all expenses incurred by Director in connection with such
proceeding upon receipt of an undertaking by or on behalf of Director to repay
said amounts if it shall be determined ultimately that Director is not entitled
to be indemnified under the provisions of this Agreement, the Bylaws, the Code
or otherwise.
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9. Enforcement. Any
right to indemnification or advances granted by this Agreement to Director shall
be enforceable by or on behalf of Director in any court of competent
jurisdiction if (i) the claim for indemnification or advances is denied, in
whole or in part, or (ii) no disposition of such claim is made within ninety
(90) days of request therefor. If Director is wholly successful in
such enforcement action, Director shall also be entitled to be paid the expense
of prosecuting his claim. It shall be a defense to any action for
which a claim for indemnification is made under Section 3 hereof (other than an
action brought to enforce a claim for expenses pursuant to Section 8 hereof,
provided that the
required undertaking has been tendered to CER) that Director is not entitled to
indemnification because of the limitations set forth in Section 4
hereof. Neither the failure of CER (including its Board of Directors
or its stockholders) to have made a determination prior to the commencement of
such enforcement action that indemnification of Director is proper in the
circumstances, nor an actual determination by CER (including its Board of
Directors or its stockholders) that such indemnification is improper shall be a
defense to the action or create a presumption that Director is not entitled to
indemnification under this Agreement or otherwise.
10. Subrogation. In the
event of payment under this Agreement, CER shall be subrogated to the extent of
such payment to all of the rights of recovery of Director, who shall execute all
documents required and shall do all acts that may be necessary to secure such
rights and to enable CER effectively to bring suit to enforce such
rights.
11. Non-Exclusivity of
Rights. The rights conferred on Director by this Agreement
shall not be exclusive of any other right which Director may have or hereafter
acquire under any statute, provision of CER’s Certificate of Incorporation or
Bylaws, agreement, vote of stockholders or directors, or otherwise, both as to
action in his official capacity and as to action in another capacity while
holding office.
12. Survival
of Rights.
(a) The
rights conferred on Director by this Agreement shall continue after Director has
ceased to be a director, officer, employee or other agent of CER or to serve at
the request of CER as a director, officer, employee or other agent of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise and shall inure to the benefit of Director’s heirs, executors and
administrators.
(b) CER
shall require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business or
assets of CER, expressly to assume and agree to perform this Agreement in the
same manner and to the same extent that CER would be required to perform if no
such succession had taken place.
13. Severability. Each
of the provisions of this Agreement is a separate and distinct agreement and
independent of the others, so that if any provision hereof shall be held to be
invalid for any reason, such invalidity or unenforceability shall not affect the
validity or enforceability of the other provisions hereof. Furthermore, if this
Agreement shall be invalidated in its entirety on any ground, then CER shall
nevertheless indemnify Director to the fullest extent provided by the Bylaws,
the Code or any other applicable law.
14. Governing Law. This
Agreement shall be interpreted and enforced in accordance with the laws of the
State of Delaware.
15. Amendment and
Termination. No amendment, modification, termination or
cancellation of this Agreement shall be effective unless in writing signed by
both parties hereto.
16. Identical
Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
but all of which together shall constitute but one and the same
Agreement. Only one such counterpart need be produced to evidence the
existence of this Agreement.
B-4
17. Headings. The headings of the
sections of this Agreement are inserted for convenience only and shall not be
deemed to constitute part of this Agreement or to affect the construction
hereof.
18. Notices. All
notices, requests, demands and other communications hereunder shall be in
writing and shall be deemed to have been duly given (i) upon delivery if
delivered by hand to the party to whom such communication was directed or (ii)
upon the third business day after the date on which such communication was
mailed if mailed by certified or registered mail with postage
prepaid:
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(a)
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If
to Director, to:
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|
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Attention: Xxxxxxx
Xxx
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Telephone:
000-000-0000
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Facsimile: 000-000-0000
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(b)
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If
to CER, to:
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0X, Xx.
000 Xx Xxxx Xxxx,
Xxxxxxx
Xxxxxxxx, Xxxxxxxx 200081, China
Attention: Qinghuan
Wu
Facsimile: 00-00-00000000
or to
such other address as may have been furnished to Director by CER.
*
* * * *
B-5
IN WITNESS WHEREOF, the
parties hereto have executed this Agreement on and as of the day and year first
above written.
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CER:
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By:
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/s/ Qinghuan
Wu
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Name:
Qinghuan Wu
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Title: Chief
Executive Officer
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DIRECTOR:
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By:
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/s/ Xxxxxxx Xxx
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|
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Name:
Xxxxxxx Xxx
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X-0
