Exhibit 10.1

 

 

 

 

 

 

 

 

INDEMNIFICATION AGREEMENT

 

by and between

 

China HGS Real Estate, Inc.,

 

and

 

[NAME],

as Indemnitee

 

 

 

        Dated as of __, 2013        

 

 

 

 

TABLE OF CONTENTS

 

  Page ARTICLE 1 DEFINITIONS 2 ARTICLE 2 INDEMNITY IN THIRD-PARTY PROCEEDINGS 4
ARTICLE 3 INDEMNITY IN PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY 5 ARTICLE 4
INDEMNIFICATION FOR EXPENSES OF A PARTY WHO IS WHOLLY OR PARTLY SUCCESSFUL 5
ARTICLE 5 INDEMNIFICATION FOR EXPENSES OF A WITNESS 6 ARTICLE 6 ADDITIONAL
INDEMNIFICATION RIGHTS 6 ARTICLE 7 CONTRIBUTION IN THE EVENT OF JOINT LIABILITY
6 ARTICLE 8 EXCLUSIONS 7 ARTICLE 9 ADVANCES OF EXPENSES; SELECTION OF LAW FIRM 8
ARTICLE 10 PROCEDURE FOR NOTIFICATION; DEFENSE OF CLAIM; SETTLEMENT 9 ARTICLE 11
NON-EXCLUSIVITY; SURVIVAL OF RIGHTS; INSURANCE; PRIMACY OF INDEMNIFICATION;
SUBROGATION 9 ARTICLE 12 ENFORCEMENT AND BINDING EFFECT 11 ARTICLE 13
MISCELLANEOUS 12

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INDEMNIFICATION AGREEMENT

 

This Indemnification Agreement (this “Agreement”) is made as of ___, 2013, by
and between China HGS Real Estate, Inc. (the “Company”) and [NAME]
(“Indemnitee”). Capitalized terms used herein and not otherwise defined shall
have the respective meanings set forth in Article 1.

 

WHEREAS, the Company desires to attract and retain the services of
highly-qualified individuals, such as Indemnitee, to serve the Company;

 

WHEREAS, in order to induce Indemnitee to provide or continue to provide
services to the Company, the Company wishes to provide for the indemnification
of, and advancement of expenses to, Indemnitee to the fullest extent permitted
by law;

 

WHEREAS, the Company and Indemnitee further recognize the substantial increase
in corporate litigation in general, subjecting directors, officers, employees,
agents and fiduciaries to expensive litigation risks at the same time as the
availability and scope of coverage of liability insurance provide increasing
challenges for the Company;

 

WHEREAS, the Company’s Amended and Restated Articles of Incorporation (as the
same may be amended and/or restated from time to time, the “Articles of
Incorporation”) and the By-Laws of the Company authorize the Company to
indemnify its officers and directors, and Indemnitee may also be entitled to
indemnification pursuant to applicable provisions of the Florida Business
Corporation Act (the “Act”). The Articles of Incorporation, the By-Laws of the
Company and the Act expressly provide that the indemnification provisions set
forth therein are not exclusive, and thereby contemplate that contracts
providing for indemnification may be entered into between the Company and
members of the Board, executive officers and other key employees of the Company;

 

WHEREAS, this Agreement is a supplement to and in furtherance of the Articles of
Incorporation and By-Laws of the Company and any resolutions adopted pursuant
thereto, and shall not be deemed a substitute therefor or be used to diminish or
abrogate any rights of Indemnitee thereunder (regardless of, among other things,
any amendment to or revocation of governing documents or any change in the
composition of the Board or any Corporate Transaction); and

 

WHEREAS, Indemnitee will serve or continue to serve as a director, officer or
key employee of the Company for so long as Indemnitee is duly elected or
appointed or until Indemnitee tenders his resignation or is otherwise terminated
by the Company.

 

NOW, THEREFORE, in consideration of the promises and the covenants contained
herein, the Company and Indemnitee do hereby covenant and agree as follows:

 

 

 

 

ARTICLE 1

DEFINITIONS

 

As used in this Agreement:

 

1.1.            “Affiliate” shall have the meaning set forth in Rule 405 under
the Securities Act of 1933, as amended (as in effect on the date hereof).

 

1.2.            “Agreement” shall have the meaning set forth in the preamble.

 

1.3.            “Beneficial Owner” and “Beneficial Ownership” shall have the
meaning set forth in Rule 13d-3 under the Exchange Act (as in effect on the date
hereof).

 

1.4.            “Board” shall mean the Company’s Board of Directors.

 

1.5.            “Articles of Incorporation” shall have the meaning set forth in
the recitals.

 

1.6.            “Company” shall have the meaning set forth in the preamble and
shall also include, in addition to the resulting corporation or other entity,
any constituent corporation (including, without limitation, any constituent of a
constituent) absorbed in a consolidation or merger that, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, employees or agents, so that if Indemnitee is or was a
director, officer, employee or agent of such constituent corporation, or is or
was serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, Indemnitee shall stand in the same position under the
provisions of this Agreement with respect to the resulting or surviving
corporation or other entity as Indemnitee would have with respect to such
constituent corporation if its separate existence had continued.

 

1.7.            “Corporate Status” shall describe the status as such of a person
who is or was a director, officer, trustee, general partner, managing member,
fiduciary, employee or agent of the Company or of any other Enterprise which
such person is or was serving at the request of the Company.

 

1.8.            “Enterprise” shall mean the Company and any other corporation,
constituent corporation (including, without limitation, any constituent of a
constituent) absorbed in a consolidation or merger to which the Company (or any
of its wholly owned Subsidiaries) is a party, limited liability company,
partnership, joint venture, trust, employee benefit plan or other enterprise of
which Indemnitee is or was serving at the request of the Company as a director,
officer, trustee, general partner, managing member, fiduciary, employee or
agent.

 

1.9.            “Exchange Act” shall mean the Securities Exchange Act of 1934,
as amended.

 

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1.10.        “Expenses” shall include all reasonable attorneys’ fees, retainers,
court costs, transcript costs, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees, and all other disbursements or expenses of the types
customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, being or preparing to be a witness in,
settling or negotiating for the settlement of, responding to or objecting to a
request to provide discovery in, or otherwise participating in, any Proceeding.
Expenses also shall include Expenses incurred in connection with any appeal
resulting from any Proceeding, including, without limitation, the premium,
security for, and other costs relating to any cost bond, supersedeas bond, or
other appeal bond or its equivalent and any federal, state, local or foreign
taxes imposed on the Indemnitee as a result of the actual or deemed receipt of
any payments under this Agreement. Expenses, however, shall not include amounts
paid in settlement by Indemnitee or the amount of judgments, fines or penalties
against Indemnitee.

 

1.11.        “Indemnitee” shall have the meaning set forth in the preamble.

 

1.12.        “Act” shall have the meaning set forth in the recitals.

 

1.13.        “Person” shall have the meaning set forth in Sections 13(d) and
14(d) of the Exchange Act (as in effect on the date hereof); provided, however,
that the term “Person” shall exclude: (a) the Company; (b) any Subsidiaries of
the Company; and (c) any employee benefit plan of the Company or a Subsidiary of
the Company or any trustee or other fiduciary holding securities under an
employee benefit plan of the Company or of a Subsidiary of the Company or of a
corporation or other entity owned, directly or indirectly, by the stockholders
of the Company in substantially the same proportions as their ownership of stock
of the Company.

 

1.14.        “Proceeding” shall include any threatened, pending or completed
action, suit, arbitration, mediation, alternate dispute resolution mechanism,
investigation, inquiry, administrative hearing or any other actual, threatened
or completed proceeding, including, without limitation, any and all appeals,
whether brought by or in the right of the Company or otherwise and whether of a
civil (including, without limitation, intentional or unintentional tort claims),
criminal, administrative or investigative nature, whether formal or informal, in
which Indemnitee was, is, will or might be involved as a party or otherwise by
reason of the fact that Indemnitee is or was a director or officer of the
Company, by reason of any action taken by or omission by Indemnitee, or of any
action or omission on Indemnitee’s part, while acting as a director or officer
of the Company, or by reason of the fact that Indemnitee is or was serving at
the request of the Company as a director, officer, trustee, general partner,
managing member, fiduciary, employee or agent of any other Enterprise; in each
case whether or not acting or serving in such capacity at the time any liability
or expense is incurred for which indemnification, reimbursement, or advancement
of expenses can be provided under this Agreement or Act 607.0850; including one
pending on or before the date of this Agreement but excluding one initiated by
Indemnitee to enforce Indemnitee’s rights under this Agreement or Act 607.0850.

 

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1.15.        “Subsidiary” with respect to any Person, shall mean any corporation
or other entity of which a majority of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by that Person.

 

1.16.        “Voting Securities” shall mean any securities of the Company that
vote generally in the election of directors (or similar body).

 

1.17.        References to “fines” shall include any excise tax or penalty
assessed on Indemnitee with respect to any employee benefit plan; references to
“other enterprise” shall include employee benefit plans; references to “serving
at the request of the Company” shall include any service as a director, officer,
employee, agent or fiduciary of the Company which imposes duties on, or involves
services by, such director, officer, employee, agent or fiduciary with respect
to an employee benefit plan, its participants or beneficiaries; and if
Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to
be in the best interests of the participants and beneficiaries of an employee
benefit plan, Indemnitee shall be deemed to have acted in a manner “not opposed
to the best interests of the Company” as referred to in this Agreement.

 

1.18.        The phrase “to the fullest extent not prohibited by (and not merely
to the extent affirmatively permitted by) applicable law” shall include, but not
be limited to: (a) to the fullest extent authorized or permitted by the
provision of the Act that authorizes or contemplates additional indemnification
by agreement, or the corresponding provision of any amendment to or replacement
of the Act, and (b) to the fullest extent authorized or permitted by any
amendments to or replacements of the Act adopted after the date of this
Agreement that increase the extent to which a corporation may indemnify its
officers and directors.

 

ARTICLE 2

INDEMNITY IN THIRD-PARTY PROCEEDINGS

 

Subject to Article 8, the Company shall indemnify Indemnitee in accordance with
the provisions of this Article 2 if Indemnitee is, was or is threatened to be
made, a party to or a participant (as a witness or otherwise) in any Proceeding,
other than a Proceeding by or in the right of the Company to procure a judgment
in its favor. Subject to Article 8, to the fullest extent not prohibited by (and
not merely to the extent affirmatively permitted by) applicable law, Indemnitee
shall be indemnified against all Expenses, judgments, fines, penalties and,
subject to Section 10.3, amounts actually and reasonably paid in settlement by
Indemnitee or on Indemnitee’s behalf in connection with such Proceeding or any
claim, issue or matter therein, if Indemnitee acted in good faith and in a
manner Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company and, in the case of a criminal Proceeding, had no
reasonable cause to believe that such conduct was unlawful.

 

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ARTICLE 3

INDEMNITY IN PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY

 

Subject to Article 8, the Company shall indemnify Indemnitee in accordance with
the provisions of this Article 3 if Indemnitee is, was or is threatened to be
made, a party to or a participant in any Proceeding by or in the right of the
Company to procure a judgment in its favor. Subject to Article 8, to the fullest
extent not prohibited by (and not merely to the extent affirmatively permitted
by) applicable law, Indemnitee shall be indemnified against all Expenses
actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in
connection with such Proceeding or any claim, issue or matter therein, if
Indemnitee is not liable pursuant to Act 607.0831 or other applicable provisions
of the Act or if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company. No indemnification for Expenses shall be made under this Article 3 in
respect of any claim, issue or matter as to which Indemnitee shall have been
finally adjudged (and not subject to further appeal) by a court of competent
jurisdiction to be liable to the Company, except to the extent that any court in
which the Proceeding was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
Indemnitee is fairly and reasonably entitled to indemnification.

 

ARTICLE 4

INDEMNIFICATION FOR EXPENSES OF A PARTY WHO IS WHOLLY OR PARTLY SUCCESSFUL

 

Notwithstanding any other provisions of this Agreement, to the extent that
Indemnitee is a party to (or a participant in) and is successful, on the merits
or otherwise, in any Proceeding or in defense of any claim, issue or matter
therein, in whole or in part, the Company shall indemnify Indemnitee against all
Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s
behalf in connection therewith. For the avoidance of doubt, if Indemnitee is not
wholly successful in such Proceeding but is successful, on the merits or
otherwise, as to one or more but less than all claims, issues or matters in such
Proceeding, the Company shall indemnify Indemnitee against all Expenses actually
and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection
with each resolved claim, issue or matter, whether or not Indemnitee was wholly
or partly successful; provided, that Indemnitee shall only be entitled to
indemnification for Expenses with respect to unsuccessful claims under this
Article 4 to the extent Indemnitee is not liable pursuant to Act 607.0831 or
other applicable provisions of the Act or Indemnitee acted in good faith and in
a manner Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company and, in the case of a criminal Proceeding, had no
reasonable cause to believe that such conduct was unlawful. For purposes of this
Article 4 and without limitation, the termination of any claim, issue or matter
in such a Proceeding by dismissal, with or without prejudice, or by settlement,
shall be deemed to be a successful result as to such claim, issue or matter.

 

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ARTICLE 5

INDEMNIFICATION FOR EXPENSES OF A WITNESS

 

Notwithstanding any other provision of this Agreement, to the extent that
Indemnitee is, by reason of Indemnitee’s Corporate Status, a witness in any
Proceeding to which Indemnitee is not a party, Indemnitee shall be indemnified
against all Expenses actually and reasonably incurred by Indemnitee or on
Indemnitee’s behalf in connection therewith.

 

ARTICLE 6

ADDITIONAL INDEMNIFICATION RIGHTS

 

Notwithstanding any limitations in Articles 2, 3 or 4, but subject to Article 8,
the Company shall indemnify Indemnitee to the fullest extent not prohibited by
(and not merely to the extent affirmatively permitted by) law if Indemnitee is,
was or is threatened to be made, a party to or a participant in any Proceeding
(including a Proceeding by or in the right of the Company to procure a judgment
in its favor) against all Expenses, judgments, fines, penalties and, subject to
Section 10.3, amounts paid in settlement (including all interest, assessments
and other charges paid or payable in connection with or in respect of such
Expenses, judgments, fines, penalties and amounts paid in settlement) actually
and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection
with the Proceeding. No indemnity shall be available under this Article 6 on
account of Indemnitee’s conduct that constitutes a breach of Indemnitee’s duty
of loyalty to the Company or its stockholders or is an act or omission not in
good faith or that involves intentional misconduct or a knowing violation of the
law.

 

ARTICLE 7

CONTRIBUTION IN THE EVENT OF JOINT LIABILITY

 

7.1.            If the indemnification rights provided for in this Agreement are
unavailable to Indemnitee in whole or in part for any reason whatsoever, in
respect of any Proceeding in which the Company is jointly liable with Indemnitee
(or would be if joined in such Proceeding), the Company, in lieu of indemnifying
Indemnitee, shall pay, in the first instance, the entire amount incurred by
Indemnitee, whether for judgments, liabilities, fines, penalties, amounts paid
or to be paid in settlement and/or for Expenses, without requiring Indemnitee to
contribute to such payment, and the Company hereby waives and relinquishes any
right of contribution it may have at any time against Indemnitee.

 

7.2.            The Company shall not enter into any settlement of any
Proceeding in which the Company is jointly liable with Indemnitee (or would be
if joined in such Proceeding) unless such settlement provides for a full and
final release of all claims asserted against Indemnitee.

 

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7.3.            To the extent otherwise permitted herein, the Company hereby
agrees to fully indemnify Indemnitee from any claims for contribution which may
be brought by officers, directors or employees of the Company (other than
Indemnitee) who may be jointly liable with Indemnitee.

 

ARTICLE 8

EXCLUSIONS

 

8.1.            Notwithstanding any provision in this Agreement, the Company
shall not be obligated under this Agreement to make any indemnity, contribution
or advancement of Expenses in connection with any claim made against Indemnitee:

 

(a)                         for which payment has actually been made to or on
behalf of Indemnitee under any insurance policy of the Company or its
Subsidiaries or other indemnity provision of the Company or its Subsidiaries,
except with respect to any excess beyond the amount paid under any insurance
policy, contract, agreement, other indemnity provision or otherwise; or

 

(b)                         for an accounting of profits made from the purchase
and sale (or sale and purchase) by Indemnitee of securities of the Company
within the meaning of Section 16(b) of the Exchange Act (or any similar
successor statute) or similar provisions of state statutory law or common law;
or

 

(c)                         in connection with any Proceeding (or any part of
any Proceeding) initiated or brought voluntarily by Indemnitee, including,
without limitation, any Proceeding (or any part of any Proceeding) initiated by
Indemnitee against the Company or its directors, officers, employees or other
indemnitees, other than a Proceeding initiated by Indemnitee to enforce its
rights under this Agreement, unless (i) the Board authorized the Proceeding (or
any part of any Proceeding) or (ii) the Company provides the indemnification
payment, in its sole discretion, pursuant to the powers vested in the Company
under applicable law; or

 

(d)                        for the payment of amounts required to be reimbursed
to the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002, as
amended, or any similar successor statute; or

 

(e)                         for any payment to Indemnitee that is finally
determined to be unlawful under the procedures and subject to the presumptions
of this Agreement.

 

The exclusion in Section 8.1(c) shall not apply to counterclaims or affirmative
defenses asserted by Indemnitee in an action brought against Indemnitee by any
party other than actions brought against Indemnitee by the Company or its
directors, officers, employees or other indemnitees.

 

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ARTICLE 9

ADVANCES OF EXPENSES; SELECTION OF LAW FIRM

 

9.1.            Subject to Article 8, the Company shall, unless prohibited by
applicable law, advance the Expenses incurred by or on behalf of Indemnitee in
connection with any Proceeding within ten business days after the receipt by the
Company of a statement or statements requesting such advances, together with a
reasonably detailed written explanation of the basis therefor and an itemization
of legal fees and disbursements in reasonable detail, from time to time, whether
prior to or after final disposition of any Proceeding. Advances shall be
unsecured and interest free. Indemnitee shall qualify for advances, to the
fullest extent permitted by applicable law, solely upon the execution and
delivery to the Company of an undertaking providing that Indemnitee undertakes
to repay the advance to the extent that it is ultimately determined by final
judicial decision of a court of competent jurisdiction from which there is no
further right to appeal that Indemnitee is not entitled to be indemnified by the
Company under the provisions of this Agreement. This Section 9.1 shall not apply
to any claim made by Indemnitee for which an indemnification payment is excluded
pursuant to Article 8.

 

9.2.            If the Company shall be obligated under Section 9.1 hereof to
pay the Expenses of any Proceeding against Indemnitee, then the Company shall be
entitled to assume the defense of such Proceeding upon the delivery to
Indemnitee of written notice of its election to do so. If the Company elects to
assume the defense of such Proceeding, then unless the plaintiff or plaintiffs
in such Proceeding include one or more Persons holding, together with his, her
or its Affiliates, in the aggregate, a majority of the combined voting power of
the Company’s then outstanding Voting Securities, the Company shall assume such
defense using a single law firm selected by the Company representing Indemnitee
and other present and former directors or officers of the Company. The retention
of such law firm by the Company shall be subject to prior written approval by
Indemnitee, which approval shall not be unreasonably withheld, delayed or
conditioned. If the Company elects to assume the defense of such Proceeding and
the plaintiff or plaintiffs in such Proceeding include one or more Persons
holding, together with his, her or its Affiliates, in the aggregate, a majority
of the combined voting power of the Company’s then outstanding Voting
Securities, then the Company shall assume such defense using a single law firm
selected by Indemnitee and any other present or former directors or officers of
the Company who are parties to such Proceeding. After (x) in the case of
retention of any such law firm selected by the Company, delivery of the required
notice to Indemnitee, approval of such law firm by Indemnitee and the retention
of such law firm by the Company, or (y) in the case of retention of any such law
firm selected by Indemnitee, the completion of such retention, the Company will
not be liable to Indemnitee under this Agreement for any Expenses of any other
law firm incurred by Indemnitee after the date that such first law firm is
retained by the Company with respect to the same Proceeding, provided, that in
the case of retention of any such law firm selected by the Company (a)
Indemnitee shall have the right to retain a separate law firm in any such
Proceeding at Indemnitee’s sole expense; and (b) if (i) the retention of a law
firm by Indemnitee has been previously authorized by the Company, (ii)
Indemnitee shall have reasonably concluded that there may be a conflict of
interest between either (1) the Company and Indemnitee or (2) Indemnitee and
another present or former director or officer of the Company also represented by
such law firm in the conduct of any such defense, or (iii) the Company shall
not, in fact, have retained a law firm to prosecute the defense of such
Proceeding within thirty days, then the reasonable Expenses of a single law firm
retained by Indemnitee shall be at the expense of the Company.

 

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ARTICLE 10

PROCEDURE FOR NOTIFICATION; DEFENSE OF CLAIM; SETTLEMENT

 

10.1.        Indemnitee shall, as a condition precedent to Indemnitee’s right to
be indemnified under this Agreement, give the Company notice in writing promptly
of any claim made against Indemnitee for which indemnification will or could be
sought under this Agreement, provided, however, that a delay in giving such
notice shall not deprive Indemnitee of any right to be indemnified under this
Agreement unless, and then only to the extent that, such delay is materially
prejudicial to the defense of such claim. The omission or delay to notify the
Company will not relieve the Company from any liability for indemnification
which it may have to Indemnitee otherwise than under this Agreement. The
Secretary of the Company shall, promptly upon receipt of such a request for
indemnification, advise the Board in writing that Indemnitee has requested
indemnification.

 

10.2.        The Company will be entitled to participate in the Proceeding at
its own expense.

 

10.3.        The Company shall have no obligation to indemnify Indemnitee under
this Agreement for any amounts paid in settlement of any claim effected without
the Company’s prior written consent, provided the Company has not breached its
obligations hereunder. The Company shall not settle any claim, including,
without limitation, any claim in which it takes the position that Indemnitee is
not entitled to indemnification in connection with such settlement, nor shall
the Company settle any claim which would impose any fine or any obligation on
Indemnitee, without Indemnitee’s prior written consent. Neither the Company nor
Indemnitee shall unreasonably withhold, delay or condition their consent to any
proposed settlement.

 

ARTICLE 11

NON-EXCLUSIVITY; SURVIVAL OF RIGHTS; INSURANCE; PRIMACY OF INDEMNIFICATION;
SUBROGATION

 

11.1.        The rights of Indemnitee as provided by this Agreement shall not be
deemed exclusive of any other rights to which Indemnitee may at any time be
entitled under applicable law, the Articles of Incorporation, the Company’s
By-Laws, any agreement, a vote of stockholders, a resolution of directors, or
otherwise. No amendment, alteration or repeal of this Agreement or of any
provision hereof shall limit or restrict any right of Indemnitee under this
Agreement in respect of any action taken or omitted by such Indemnitee in
Indemnitee’s Corporate Status prior to such amendment, alteration or repeal. To
the extent that a change in applicable law, whether by statute or judicial
decision, permits greater indemnification or advancement of Expenses than would
be afforded currently under the Articles of Incorporation, the Company’s By-Laws
or this Agreement, it is the intent of the parties hereto that Indemnitee shall
enjoy by this Agreement the greater benefits so afforded by such change. No
right or remedy herein conferred is intended to be exclusive of any other right
or remedy, and every other right and remedy shall be cumulative and in addition
to every other right and remedy given hereunder or now or hereafter existing at
law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other right or remedy.

 

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11.2.        The Act, the Articles of Incorporation and the Company’s By-Laws
permit the Company to purchase and maintain insurance or furnish similar
protection or make other arrangements, including, but not limited to, providing
a trust fund, letter of credit, or surety bond (“Indemnification Arrangements”)
on behalf of Indemnitee against any liability asserted against Indemnitee or
incurred by or on behalf of Indemnitee or in such capacity as a director,
officer, employee or agent of the Company, or arising out of Indemnitee’s status
as such, whether or not the Company would have the power to indemnify Indemnitee
against such liability under the provisions of this Agreement or under the Act,
as it may then be in effect. The purchase, establishment, and maintenance of any
such Indemnification Arrangement shall not in any way limit or affect the rights
and obligations of the Company or of Indemnitee under this Agreement except as
expressly provided herein, and the execution and delivery of this Agreement by
the Company and Indemnitee shall not in any way limit or affect the rights and
obligations of the Company or the other party or parties thereto under any such
Indemnification Arrangement.

 

11.3.        To the extent that the Company maintains an insurance policy or
policies providing liability insurance for directors, officers, trustees,
partners, managing members, fiduciaries, employees, or agents of the Company or
of any other Enterprise which such person serves at the request of the Company,
the Company shall cause Indemnitee to be covered by such policy or policies in
accordance with its or their terms to the maximum extent of the coverage
available for any such director, officer, trustee, partner, managing member,
fiduciary, employee or agent under such policy or policies. If, at the time the
Company receives notice from any source of a Proceeding as to which Indemnitee
is a party or a participant (as a witness or otherwise), the Company has
director and officer liability insurance in effect, the Company shall give
prompt notice of the commencement of such Proceeding to the insurers in
accordance with the procedures set forth in the respective policies. The Company
shall thereafter take all necessary or desirable action to cause such insurers
to pay, on behalf of Indemnitee, all amounts payable as a result of such
Proceeding in accordance with the terms of such policies.

 

11.4.        In the event of any payment under this Agreement, the Company shall
be subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee, who shall execute all papers reasonably required and take all action
reasonably necessary to secure such rights, including, without limitation,
execution of such documents as are necessary to enable the Company to bring suit
to enforce such rights.

 

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11.5.        The Company shall not be liable under this Agreement to make any
payment of amounts otherwise indemnifiable hereunder (or for which advancement
is provided hereunder) if and to the extent that Indemnitee has otherwise
actually received such payment under any insurance policy, contract, agreement
or otherwise.

 

11.6.        The Company’s obligation to indemnify or advance Expenses hereunder
to Indemnitee who is or was serving at the request of the Company as a director,
officer, trustee, partner, managing member, fiduciary, employee or agent of any
other Enterprise shall be reduced by any amount Indemnitee has actually received
as indemnification payments or advancement of Expenses from such Enterprise.
Notwithstanding any other provision of this Agreement to the contrary,
(a) Indemnitee shall have no obligation to reduce, offset, allocate, pursue or
apportion any indemnification advancement, contribution or insurance coverage
among multiple parties possessing such duties to Indemnitee prior to the
Company’s satisfaction and performance of all its obligations under this
Agreement, and (b) the Company shall perform fully its obligations under this
Agreement without regard to whether Indemnitee holds, may pursue or has pursued
any indemnification, advancement, contribution or insurance coverage rights
against any person or entity other than the Company.

 

ARTICLE 12

ENFORCEMENT AND BINDING EFFECT

 

12.1.        The Company expressly confirms and agrees that it has entered into
this Agreement and assumed the obligations imposed on it hereby in order to
induce Indemnitee to serve or continue to serve as a director, officer or key
employee of the Company, and the Company acknowledges that Indemnitee is relying
upon this Agreement in serving or continuing to serve as a director, officer or
key employee of the Company.

 

12.2.        This Agreement shall be effective as of the date set forth on the
first page and may apply to acts or omissions of Indemnitee which occurred prior
to such date if Indemnitee was an officer, director, employee or other agent of
the Company, or was serving at the request of the Company as a director,
officer, trustee, general partner, managing member, fiduciary, employee or agent
of any other Enterprise, at the time such act or omission occurred.

 

12.3.        The Company and Indemnitee agree herein that a monetary remedy for
breach of this Agreement, at some later date, may be inadequate, impracticable
and difficult to prove, and further agree that such breach may cause Indemnitee
irreparable harm. Accordingly, the parties hereto agree that Indemnitee may
enforce this Agreement by seeking, among other things, injunctive relief and/or
specific performance hereof, without any necessity of showing actual damage or
irreparable harm and that by seeking injunctive relief and/or specific
performance, Indemnitee shall not be precluded from seeking or obtaining any
other relief to which he may be entitled. The Company and Indemnitee further
agree that Indemnitee shall be entitled to such specific performance and
injunctive relief, including, without limitation, temporary restraining orders,
preliminary injunctions and permanent injunctions, without the necessity of
posting bonds or other undertaking in connection therewith.

 

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ARTICLE 13

MISCELLANEOUS

 

13.1.        Successors and Assigns. This Agreement shall be binding upon the
Company and its successors and assigns and shall inure to the benefit of
Indemnitee and Indemnitee’s assigns, heirs, executors and administrators. The
Company shall require and cause any successor (whether direct or indirect
successor by purchase, merger, consolidation or otherwise) to all, substantially
all or a substantial part, of the business and/or assets of the Company, by
written agreement in form and substance satisfactory to Indemnitee, expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform if no such succession had
taken place.

 

 

 

13.2.        Section 409A. It is intended that any indemnification payment or
advancement of Expenses made hereunder shall be exempt from Section 409A of the
Internal Revenue Code of 1986, as amended, and the guidance issued thereunder
(“Section 409A”) pursuant to Treasury Regulation Section 1.409A-1(b)(10).
Notwithstanding the foregoing, if any indemnification payment or advancement of
Expenses made hereunder shall be determined to be “nonqualified deferred
compensation” within the meaning of Section 409A, then (i) the amount of the
indemnification payment or advancement of Expenses during one taxable year shall
not affect the amount of the indemnification payments or advancement of Expenses
during any other taxable year, (ii) the indemnification payments or advancement
of Expenses must be made on or before the last day of the Indemnitee’s taxable
year following the year in which the expense was incurred, and (iii) the right
to indemnification payments or advancement of Expenses hereunder is not subject
to liquidation or exchange for another benefit.

 

13.3.        Severability. In the event that any provision of this Agreement is
determined by a court to require the Company to do or to fail to do an act which
is in violation of applicable law, such provision (including, without
limitation, any provision within a single Article, Section, paragraph or
sentence) shall be limited or modified in its application to the minimum extent
necessary to avoid a violation of law, and, as so limited or modified, such
provision and the balance of this Agreement shall be enforceable in accordance
with their terms to the fullest extent permitted by law.

 

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13.4.        Entire Agreement. Without limiting any of the rights of Indemnitee
under the Articles of Incorporation or By-Laws of the Company as they may be
amended from time to time, this Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings, oral, written and implied,
between the parties hereto with respect to the subject matter hereof.

 

13.5.        Modification, Waiver and Termination. No supplement, modification,
termination, cancellation or amendment of this Agreement shall be binding unless
executed in writing by the parties hereto. No waiver of any of the provisions of
this Agreement shall be deemed or shall constitute a waiver of any other
provisions of this Agreement nor shall any waiver constitute a continuing
waiver.

 

13.6.        Notices. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given (a) if delivered by hand and receipted for by the party to whom said
notice or other communication shall have been directed, or (b) mailed by
certified or registered mail with postage prepaid, on the third business day
after the date on which it is so mailed:

 

  (i) If to Indemnitee, at the address indicated on the signature page of this
Agreement, or such other address as Indemnitee shall provide in writing to the
Company.       (ii) If to the Company, to:                   China HGS Real
Estate, Inc.         6 Xinghan Road, 19th Floor, Hanzhong City,         Shaanxi
Province, PRC 723000         Attention: Xiaojun Zhu                   with a
copy to:                   Loeb & Loeb Beijing Representative Office        
Suite 4301, Beijing Yintai Centre         2 Jianguomenwai Dajie, Chaoyang
District         Beijing 100022, P.R. China         Attention: Lawrence Venick  
 

 

or to any other address as may have been furnished to Indemnitee in writing by
the Company.

 

13.7.        Applicable Law. This Agreement and the legal relations among the
parties shall be governed by, and construed and enforced in accordance with, the
laws of the State of Florida, without regard to its conflict of laws rules.

 

13.8.        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 one and the same Agreement.
Only one such counterpart signed by the party against whom enforceability is
sought needs to be produced to evidence the existence of this Agreement.

 

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13.9.        Headings. The headings of the paragraphs of this Agreement are
inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.

 

13.10.    Representation by Counsel. Each of the parties has been represented by
and has had an opportunity to consult legal counsel in connection with the
negotiation and execution of this Agreement. No provision of this Agreement
shall be construed against or interpreted to the disadvantage of any party by
any court or arbitrator or any governmental authority by reason of such party
having drafted or being deemed to have drafted such provision.

 

13.11.    Period of Limitations. No legal action shall be brought and no cause
of action shall be asserted by or in the right of the Company against
Indemnitee, Indemnitee’s spouse, heirs, executors or personal or legal
representatives after the expiration of three years from the date of accrual of
such cause of action, and any claim or cause of action of the Company shall be
extinguished and deemed released unless asserted by the timely filing of a legal
action within such three-year period; provided, however, that if any shorter
period of limitations is otherwise applicable to any such cause of action such
shorter period shall govern.

 

13.12.    Additional Acts. If for the validation of any of the provisions in
this Agreement any act, resolution, approval or other procedure is required, the
Company undertakes to cause such act, resolution, approval or other procedure to
be affected or adopted in a manner that will enable the Company to fulfill its
obligations under this Agreement.

 

[Signature page follows]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Indemnification
Agreement to be signed as of the day and year first above written.

 

 

 

 

  COMPANY:       China HGS Real Estate, Inc.       By:      Name:
Title:

 

 

  INDEMNITEE:       By:     

Name:

 

Address:

                       

 

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