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EXHIBIT 10.4

 

INDEMNIFICATION AGREEMENT

 

This INDEMNIFICATION AGREEMENT, dated as of the 25th day of October 2007 is made
by and between CHINA SECURITY & SURVEILLANCE TECHNOLOGY, INC., a Delaware
corporation (the "Company"), and Robert Shiver, an officer or director of the
Company (the “Indemnitee”).

 

RECITALS

 

A.

The Company and the Indemnitee recognize that the present state of the law is
too uncertain to provide the Company’s officers and directors with adequate and
reliable advance knowledge or guidance with respect to the legal risks and
potential liabilities to which they may become personally exposed as a result of
performing their duties for the Company;

 

B.

The Company and the Indemnitee are aware of the substantial growth in the number
of lawsuits filed against corporate officers and directors in connection with
their activities in such capacities and by reason of their status as such;

 

C.

The Company and the Indemnitee recognize that the cost of defending against such
lawsuits, whether or not meritorious, is typically beyond the financial
resources of most officers and directors of the Company;

 

D.

The Company and the Indemnitee recognize that the legal risks and potential
liabilities, and the threat thereof, associated with proceedings filed against
the officers and directors of the Company bear no reasonable relationship to the
amount of compensation received by the Company’s officers and directors;

 

E.

The Company, after reasonable investigation prior to the date hereof, has
determined that the liability insurance coverage available to the Company as of
the date hereof is inadequate, unreasonably expensive or both.  The Company
believes, therefore, that the interest of the Company and its current and future
shareholders would be best served by a combination of (i) such insurance as the
Company may obtain pursuant to the Company’s obligations hereunder and (ii) a
contract with its officers and directors, including the Indemnitee, to indemnify
them to the fullest extent permitted by law (as in effect on the date hereof,
or, to the extent any amendment may expand such permitted indemnification, as
hereafter in effect) against personal liability for actions taken in the
performance of their duties to the Company;

 

F.

Section 145 of the Delaware General Corporation Law empowers Delaware
corporations to indemnify their officers and directors and further states that
the indemnification provided by Section 145 shall not be deemed exclusive of any
other rights to which those seeking indemnification may be entitled under the
certificate of incorporation or any bylaw, agreement, vote of shareholders or
disinterested directors or otherwise, both as to action in an official capacity
and as to action in another capacity while holding such office; thus, Section
145 does not by itself limit the extent to which the Company may indemnify
persons serving as its officers and directors;

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G.

The Company’s Certificate of incorporation and Bylaws authorize the
indemnification of the officers and directors of the Company in excess of that
expressly permitted by Section 145;

 

H.

The Board of Directors of the Company has concluded that, to retain and attract
talented and experienced individuals to serve as officers and directors of the
Company and to encourage such individuals to take the business risks necessary
for the success of the Company, it is necessary for the Company to contractually
indemnify its officers and directors, and to assume for itself liability for
expenses and damages in connection with claims against such officers and
directors in connection with their service to the Company, and has further
concluded that the failure to provide such contractual indemnification could
result in great harm to the Company and its shareholders;

 

I.

The Company desires and has requested the Indemnitee to serve or continue to
serve as a director or officer of the Company, free from undue concern for the
risks and potential liabilities associated with such services to the Company;
and

 

J.

The Indemnitee is willing to serve, or continue to serve, the Company, provided,
and on the expressed condition, that he is furnished with the indemnification
provided for herein.

 

AGREEMENT

 

NOW, THEREFORE, the Company and the Indemnitee agree as follows:

 

1.

DEFINITIONS.

 

(a)

“EXPENSES” means, for the purposes of this Agreement, all direct and indirect
costs of any type or nature whatsoever (including, without limitation, any fees
and disbursements of Indemnitee’s counsel, accountants and other experts and
other out-of-pocket costs) actually and reasonably incurred by the Indemnitee in
connection with the investigation, preparation, defense or appeal of a
Proceeding; provided, however, that Expenses shall not include judgments, fines,
penalties or amounts paid in settlement of a Proceeding.

 

(b)

“PROCEEDING” means, for the purposes of this Agreement, any threatened, pending
or completed  action or  proceeding,  whether  civil, criminal, administrative
or investigative (including an action brought by or in the right of the Company)
in which the Indemnitee may be or may have been involved as a party or
otherwise, by reason of the fact that the Indemnitee is or was a director or
officer of the Company, by reason of any action taken by him or of any inaction
on his part while acting as such director or officer or by reason of the fact
that he is or was serving at the request of the Company as a director, officer,
employee or agent of another foreign or domestic corporation, partnership, joint
venture, trust or other enterprise, or was a director or officer of the foreign
or domestic corporation which was a predecessor corporation to the Company or of
another enterprise at the request of such predecessor corporation, whether or
not he is serving in such capacity at the time any liability or expense is
incurred for which indemnification or reimbursement can be provided under this
Agreement.

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2.

AGREEMENT TO SERVE.

 

The Indemnitee agrees to serve or continue to serve as a director or officer of
the Company to the best of his abilities at the will of the Company or under
separate contract, if such contract exists, for so long as the Indemnitee is
duly elected or appointed and qualified or until such time as he tenders his
resignation in writing.  Nothing contained in this Agreement is intended to
create in the Indemnitee any right to continued employment.

 

3.

INDEMNIFICATION.

 

(a)

THIRD PARTY PROCEEDINGS.  The Company shall indemnify the Indemnitee against
Expenses, judgments, fines, penalties or amounts paid in settlement (if the
settlement is approved in advance by the Company) actually and reasonably
incurred by the Indemnitee in connection with a Proceeding (other than a
Proceeding by or in the right of the Company) if the Indemnitee acted in good
faith and in a manner the Indemnitee reasonably believed to be in the best
interests of the Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe the Indemnitee’s conduct was
unlawful.  The termination of any Proceeding by judgment, order, settlement,
conviction, or upon a plea of NOLO CONTENDERE or its equivalent, shall not, of
itself, create a presumption that the Indemnitee did not act in good faith and
in a manner which the Indemnitee reasonably believed to be in the best interests
of the Company, or, with respect to any criminal Proceeding, had no reasonable
cause to believe that the Indemnitee’s conduct was unlawful.

 

(b)

PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY.  To the fullest extent permitted
by law, the Company shall indemnify the Indemnitee against Expenses and amounts
paid in settlement, actually and reasonably incurred by the Indemnitee in
connection with a Proceeding by or in the right of the Company to procure a
judgment in its favor if the Indemnitee acted in good faith and in a manner the
Indemnitee reasonably believed to be in the best interests of the Company and
its shareholders.  Notwithstanding the foregoing, no indemnification shall be
made in respect of any claim, issue or matter as to which the Indemnitee shall
have been adjudged liable to the Company in the performance of the Indemnitee’s
duty to the Company and its shareholders unless and only to the extent that the
court in which such action or proceeding is or was pending shall determine upon
application that, in view of all the circumstances of the case, the Indemnitee
is fairly and reasonably entitled to indemnity for expenses and then only to the
extent that the court shall determine.

 

(c)

SCOPE.  Notwithstanding any other provision of this Agreement but subject to
SECTION 14(b), the Company shall indemnify the Indemnitee to the fullest extent
permitted by law, notwithstanding that such indemnification is not specifically
authorized by other provisions of this Agreement, the Company’s Certificate of
incorporation, the Company’s Bylaws or by statute.

 

4.

LIMITATIONS ON INDEMNIFICATION.

 

Any other provision herein to the contrary notwithstanding, the Company shall
not be obligated pursuant to the terms of this Agreement:

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(a)

EXCLUDED ACTS.  To indemnify the Indemnitee for any acts or omissions or
transactions from which a director may not be relieved of liability under
applicable law;

 

(b)

EXCLUDED INDEMNIFICATION PAYMENTS.  To indemnify or advance Expenses in
violation of any prohibition or limitation on indemnification under the
statutes, regulations or rules promulgated by any state or federal regulatory
agency having jurisdiction over the Company.

 

(c)

CLAIMS INITIATED BY INDEMNITEE.  To indemnify or advance Expenses to the
Indemnitee with respect to Proceedings or claims initiated or brought
voluntarily by the Indemnitee and not by way of defense, except with respect to
proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other statute or law or otherwise as required under
Section 145 of the Delaware General Corporation Law, but such indemnification or
advancement of Expenses may be provided by the Company in specific cases if the
Board of Directors has approved the initiation or bringing of such suit;

 

(d)

LACK OF GOOD FAITH.  To indemnify the Indemnitee for any Expenses incurred by
the Indemnitee with respect to any proceeding instituted by the Indemnitee to
enforce or  interpret this Agreement, if a court of competent jurisdiction
determines that each of the material assertions made by the Indemnitee in such
proceeding was not made in good faith or was frivolous;

 

(e)

INSURED CLAIMS.  To indemnify the Indemnitee for Expenses or liabilities of any
type whatsoever (including, but not limited to, judgments, fines, ERISA excise
taxes or penalties, and amounts paid in settlement) which have been paid
directly to or on behalf of the Indemnitee by an insurance carrier under a
policy of directors' and officers' liability insurance maintained by the Company
or any other policy of insurance maintained by the Company or the Indemnitee;

 

(f)

CLAIMS UNDER SECTION 16(b).  To indemnify the Indemnitee for Expenses and the
payment of profits arising from the purchase and sale by the Indemnitee of
securities in violation of Section 16(b) of the Securities Exchange Act of 1934,
as amended, or any similar successor statute.

 

5.

DETERMINATION OF RIGHT TO INDEMNIFICATION.

 

Upon receipt of a written claim addressed to the Board of Directors for
indemnification pursuant to SECTION 3, the Company shall determine by any of the
methods set forth in Section 145 of the Delaware General Corporation Law whether
the Indemnitee has met the applicable standards of conduct which makes it
permissible under applicable law to indemnify the Indemnitee.  If a claim under
SECTION 3 is not paid in full by the Company within ninety (90) days after such
written claim has been received by the Company, the Indemnitee may at any time
thereafter bring suit against the Company to recover the unpaid amount of the
claim and, unless such action is dismissed by the court as frivolous or brought
in bad faith, the Indemnitee shall be entitled to be paid also the expense of
prosecuting such claim.  The court in which such action is brought shall
determine whether the Indemnitee or the Company shall have the burden of proof
concerning whether the Indemnitee has or has not met the applicable standard of
conduct.

 

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6.

ADVANCEMENT AND REPAYMENT OF EXPENSES.

 

Subject to SECTION 4 hereof, the Expenses incurred by the Indemnitee in
defending and investigating any Proceeding shall be paid by the Company in
advance of the final disposition of such Proceeding within 30 days after
receiving from the Indemnitee the copies of invoices presented to the Indemnitee
for such Expenses, if the Indemnitee shall provide an undertaking to the Company
to repay such amount to the extent it is ultimately determined that the
Indemnitee is not entitled to indemnification.  In determining whether or not to
make an advance hereunder, the ability of the Indemnitee to repay shall not be a
factor.  Notwithstanding the foregoing, in a proceeding brought by the Company
directly, in its own right (as distinguished from an action bought derivatively
or by any receiver or trustee), the Company shall not be required to make the
advances called for hereby if the Board of Directors determines, in its sole
discretion, that it does not appear that the Indemnitee has met the standards of
conduct which make it permissible under Applicable law to indemnify the
Indemnitee and the advancement of Expenses would not be in the best interests of
the Company and its shareholders.

 

7.

PARTIAL INDEMNIFICATION.

 

If the Indemnitee is entitled under any provision of this Agreement to
indemnification or advancement by the Company of some or a portion of any
Expenses or liabilities of any type whatsoever (including, but not limited to,
judgments, fines, penalties, and amounts paid in settlement) incurred by him in
the investigation, defense, settlement or appeal of a Proceeding, but is not
entitled to indemnification or advancement of the total amount thereof, the
Company shall nevertheless indemnify or pay advancements to the Indemnitee for
the portion of such Expenses or liabilities to which the Indemnitee is entitled.

 

8.

NOTICE TO COMPANY BY INDEMNITEE.

 

The Indemnitee shall notify the Company in writing of any matter with respect to
which the Indemnitee intends to seek indemnification hereunder as soon as
reasonably practicable following the receipt by the Indemnitee of written notice
thereof; provided, however, that any delay in so notifying the Company shall not
constitute a waiver by the Indemnitee of his rights hereunder.  The written
notification to the Company shall be addressed to the Board of Directors and
shall include a description of the nature of the Proceeding and the facts
underlying the Proceeding and be accompanied by copies of any documents filed
with the court in which the Proceeding is pending.  In addition, the Indemnitee
shall give the Company such information and cooperation as it may reasonably
require and as shall be within the Indemnitee’s power.

 

9.

MAINTENANCE OF LIABILITY INSURANCE.

 

(a)

Subject to SECTION 4 hereof, the Company hereby agrees that so long as the
Indemnitee shall continue to serve as a director or officer of the Company and
thereafter so long as the Indemnitee shall be subject to any possible
Proceeding, the Company, subject to SECTION 9(B), shall use reasonable
commercial efforts to obtain and maintain in full force and effect directors'
and officers' liability insurance (“D&O Insurance”) which provides the
Indemnitee the same rights and benefits as are accorded to the most favorably
insured of the Company’s directors, if the Indemnitee is a director; or of the
Company’s officers, if the Indemnitee is not a director of the Company but is an
officer.

 

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(b)

Notwithstanding the foregoing, the Company shall have no obligation to obtain or
maintain D&O Insurance if the Company determines in good faith that such
insurance is not reasonably available, the premium costs for such insurance are
disproportionate to the amount of coverage provided, the coverage provided by
such insurance is limited by exclusions so as to provide an insufficient
benefit, or the Indemnitee is covered by similar insurance maintained by a
subsidiary or parent of the Company.

 

(c)

If, at the time of the receipt of a notice of a claim pursuant to SECTION 8
hereof, the Company has D&O 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 the Indemnitee, all amounts payable as a result of such Proceeding
in accordance with the terms of such policies.

 

10.

DEFENSE OF CLAIM.

 

In the event that the Company shall be obligated under SECTION 6 hereof to pay
the Expenses of any Proceeding against the Indemnitee, the Company, if
appropriate, shall be entitled to assume the defense of such Proceeding, with
counsel approved by the Indemnitee, which approval shall not be unreasonably
withheld, upon the delivery to the Indemnitee of written notice of its election
to do so.  After delivery of such notice, approval of such counsel by the
Indemnitee and the retention of such counsel by the Company, the Company will
not be liable to the Indemnitee under this Agreement for any fees of counsel
subsequently incurred by the Indemnitee with respect to the same Proceeding,
provided that (i) the Indemnitee shall have the right to employ his counsel in
any such Proceeding at the Indemnitee’s expense; and (ii) if (A) the employment
of counsel by the Indemnitee has been previously authorized by the Company, or
(B) the Indemnitee shall have reasonably concluded that there may be a conflict
of interest between the Company and the Indemnitee in the conduct of such
defense or (C) the Company shall not, in fact, have employed counsel to assume
the defense of such Proceeding, then the fees and expenses of the Indemnitee’s
counsel shall be at the expense of the Company.

 

11.

ATTORNEYS' FEES.

 

In the event that the Indemnitee or the Company institutes an action to enforce
or interpret any terms of this Agreement, the Company shall reimburse the
Indemnitee for all of the Indemnitee’s reasonable fees and expenses in bringing
and pursuing such action or defense, unless as part of such action or defense, a
court of competent jurisdiction determines that the material assertions made by
the Indemnitee as a basis for such action or defense were not made in good faith
or were frivolous.

 

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12.

CONTINUATION OF OBLIGATIONS.

 

All agreements and obligations of the Company contained herein shall continue
during the period the Indemnitee is a director or officer of the Company, or is
or was serving at the request of the Company as a director, officer, fiduciary,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, and shall continue thereafter so long as the Indemnitee shall
be subject to any possible proceeding by reason of the fact that the Indemnitee
served in any capacity referred to herein.

 

13.

SUCCESSORS AND ASSIGNS.

 

This Agreement establishes contract rights that shall be binding upon, and shall
inure to the benefit of, the successors, assigns, heirs and legal
representatives of the parties hereto.

 

14.

NON-EXCLUSIVITY.

 

(a)

The provisions for indemnification and advancement of expenses set forth in this
Agreement shall not be deemed to be exclusive of any other rights that the
Indemnitee may have under any provision of law, the Company’s Certificate of
incorporation or Bylaws, the vote of the Company’s shareholders or disinterested
directors, other agreements or otherwise, both as to action in his official
capacity and action in another capacity while occupying his position as a
director or officer of the Company.

 

(b)

In the event of any changes, after the date of this Agreement, in any applicable
law, statute, or rule which expand the right of a Delaware corporation to
indemnify its officers and directors, the Indemnitee’s rights and the Company’s
obligations under this Agreement shall be expanded to the full extent permitted
by such changes.  In the event of any changes in any applicable law, statute or
rule, which narrow the right of a Delaware corporation to indemnify a director
or officer, such changes, to the extent not otherwise required by such law,
statute or rule to be applied to this Agreement, shall have no effect on this
Agreement or the parties' rights and obligations hereunder.

 

15.

EFFECTIVENESS OF AGREEMENT.

 

To the extent that the indemnification permitted under the terms of certain
provisions of this Agreement exceeds the scope of the indemnification provided
for in the Delaware General Corporate Law, such provisions shall not be
effective unless and until the Company’s Certificate of incorporation authorize
such additional rights of indemnification.  In all other respects, the balance
of this Agreement shall be effective as of the date set forth on the first page
and may apply to acts of omissions of the Indemnitee which occurred prior to
such date if the 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, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, at the time such act or omission occurred.

 

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16.

SEVERABILITY.

 

Nothing in this Agreement is intended to require or shall be construed as
requiring the Company to do or fail to do any act in violation of applicable
law.  The Company’s inability,  pursuant to court order, to perform its
obligations under this Agreement shall not constitute a breach of this
Agreement.  The provisions of this Agreement shall be severable as provided in
this SECTION 16.  If this Agreement or any portion hereof shall be invalidated
on any ground by any court of competent jurisdiction, then the Company shall
nevertheless indemnify the Indemnitee to the full extent permitted by any
applicable portion of this Agreement that shall not have been invalidated, and
the balance of this Agreement not so invalidated shall be enforceable in
accordance with its terms.

 

17.  GOVERNING LAW.

 

This Agreement shall be interpreted and enforced in accordance with the laws of
the State of Delaware, without reference to its conflict of law principals.  To
the extent permitted by applicable law, the parties hereby waive any provisions
of law which render any provision of this Agreement unenforceable in any
respect.

 

18.

NOTICE.

 

All notices, requests, demands and other communications under this Agreement
shall be in writing and shall be deemed duly given (i) if delivered by hand and
receipted for by the party addressee or (ii) if mailed by certified or
registered mail with postage prepaid, on the third business day after the
mailing date.  Addresses for notice to either party are as shown on the
signature page of this Agreement, or as subsequently modified by written notice.

 

19.

MUTUAL ACKNOWLEDGMENT.

 

Both the Company and the Indemnitee acknowledge that in certain instances,
federal law or applicable public policy may prohibit the Company from
indemnifying its directors and officers under this Agreement or otherwise.  The
Indemnitee understands and acknowledges that the Company has undertaken or may
be required in the future to undertake with the appropriate state or federal
regulatory agency to submit for approval any request for indemnification, and
has undertaken or may be required in the future to undertake with the Securities
and Exchange Commission to submit the question of indemnification to a court in
certain circumstances for a determination of the Company’s right under public
policy to indemnify the Indemnitee.

 

20.

COUNTERPARTS.

 

This Agreement may be executed in one or more counterparts, each of which shall
constitute an original.

 

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21.

AMENDMENT AND TERMINATION.

 

No amendment, modification, termination or cancellation of this Agreement shall
be effective unless in writing signed by both parties hereto.

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year set forth above.

 

 

 

COMPANY:

INDEMNITEE:

 

 

CHINA SECURITY & SURVEILLANCE TECHNOLOGY, INC.

 

 

 

 

/s/ Robert Shiver                             

 

Name: Robert Shiver

 

 

By:   /s/ Guoshen Tu                                

 

Name: Guoshen Tu

 

Title: CEO and President

 

 

 

Address: 13/F, Shenzhen Special Zone

 

Presstower, Shennan Rd., Futian Shenzhen

 

518034, P.R.C.

 

 

 

Fax: 86-755-83510815

 

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