Exhibit 10.1

 

INDEPENDENT DIRECTOR AGREEMENT

 

This INDEPENDENT DIRECTOR AGREEMENT (the “Agreement”) is made and entered into
as of May 29, 2014, with an effective date of May 31, 2014 (the “Effective
Date”), by and between China Integrated Energy, Inc., a Delaware corporation
(the “Company”), and Liren Wei, a citizen of the United States, with a permanent
residence at 133-10 39th Avenue, Flushing, New York 11354 (the “Independent
Director”).

 

WHEREAS, the Company desires to engage the Independent Director, and the
Independent Director desires to serve, as a non-employee director of the
Company, subject to the terms and conditions contained in this Agreement.

 

NOW, THEREFORE, in consideration of the mutual promises and covenants contained
herein, the receipt of which is hereby acknowledged, the Company and the
Independent Director, intending to be legally bound, hereby agree as follows:

 

1. DEFINITIONS.

 

(a) “Corporate Status” describes the capacity of the Independent Director with
respect to the Company and the services performed by the Independent Director in
that capacity.

 

(b) “Entity” shall mean any corporation, partnership, limited liability company,
joint venture, trust, foundation, association, organization or other legal
entity.

 

(c) “Proceeding” shall mean any threatened, pending or completed claim, action,
suit, arbitration, alternate dispute resolution process, investigation,
administrative hearing, appeal, or any other proceeding, whether civil,
criminal, administrative or investigative, whether formal or informal, including
a proceeding initiated by the Independent Director pursuant to Section 12 of
this Agreement to enforce the Independent Director’s rights hereunder.

 

(d) “Expenses” shall mean all reasonable fees, costs and expenses, incurred in
connection with any Proceeding, including, without limitation, attorneys’ fees,
disbursements and retainers, fees and disbursements of expert witnesses, private
investigators, professional advisors (including, without limitation, accountants
and investment bankers), court costs, transcript costs, fees of experts, travel
expenses, duplicating, printing and binding costs, telephone and fax
transmission charges, postage, delivery services, secretarial services, and
other disbursements and expenses.

 

(e) “Liabilities” shall mean judgments, damages, liabilities, losses, penalties,
excise taxes, fines and amounts paid in settlement, and any interest,
assessments or other charges imposed thereon, and any federal, state, local or
foreign taxes imposed as a result of the actual or deemed receipt of any
payments under this Agreement.

 

(f) “Parent” shall mean any corporation or other entity (other than the Company)
in any unbroken chain of corporations or other entities ending with the Company,
if each of the corporations or entities, other than the Company, owns stock or
other interests possessing 50% or more of the economic interest or the total
combined voting power of all classes of stock or other interests in one of the
other corporations or entities in the chain.

 

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(g) “Subsidiary” shall mean any corporation or other entity (other than the
Company) in any unbroken chain of corporations or other entities beginning with
the Company, if each of the corporations or entities, other than the last
corporation or entity in the unbroken chain, owns stock or other interests
possessing 50% or more of the economic interest or the total combined voting
power of all classes of stock or other interests in one of the other
corporations or entities in the chain.

 

2. SERVICES OF INDEPENDENT DIRECTOR. While this Agreement is in effect, the
Independent Director shall also perform duties as Chairman of the Audit
Committee and will be compensated for such duties and be reimbursed expenses in
accordance with the Schedule A attached to this Agreement, subject to the
following.

 

(a) The Independent Director will perform services as is consistent with
Independent Director’s position with the Company, as required and authorized by
the By-Laws and Certificate of Incorporation of the Company, and in accordance
with high professional and ethical standards and all applicable laws and rules
and regulations pertaining to the Independent Director’s performance hereunder,
including without limitation, laws, rules and regulations relating to a public
company.

 

(b) The Independent Director is solely responsible for taxes arising out of any
compensation paid by the Company to the Independent Director under this
Agreement, and the Independent Director understands that he will be issued a
U.S. Treasury form 1099 for any compensation paid to him by the Company, and
understands and agrees that the Company shall comply with any tax or withholding
obligations as required by applicable law from time to time in connection with
this Agreement.

 

(c) The Company may offset any and all monies payable to the Independent
Director to the extent of any monies owing to the Company from the Independent
Director.

 

(d) The rules and regulations of the Company notified to the Independent
Director, from time to time, apply to the Independent Director. Such rules and
regulations are subject to change by the Board in its sole discretion.
Notwithstanding the foregoing, in the event of any conflict or inconsistency
between the terms and conditions of this Agreement and rules and regulations of
the Company, the terms of this Agreement control.

 

3. REQUIREMENTS OF INDEPENDENT DIRECTOR. During the term of the Independent
Director’s services to the Company hereunder, Independent Director shall observe
all applicable laws and regulations relating to independent directors of a
public company as promulgated from to time, and shall not: (1) be an employee of
the Company or any Parent or Subsidiary; (2) accept, directly or indirectly, any
consulting, advisory, or other compensatory fee from the Company other than as a
director and/or a member of a committee of the Board; (3) be an affiliated
person of the Company or any Parent or Subsidiary, as the term “affiliate” is
defined in 17 CFR 240.10A-3(e)(1), other than in his capacity as a director
and/or a member of a committee of the Board; (4) possess an interest in any
transaction with the Company or any Parent or Subsidiary, for which disclosure
would be required pursuant to 17 CFR 229.404(a), other than in his capacity as a
director and/or a member of a committee of the Board; (5) be engaged in a
business relationship with the Company or any Parent or Subsidiary, for which
disclosure would be required pursuant to 17 CFR 229.404(b), except that the
required beneficial interest therein shall be modified to be 5% hereby.

 

4. REPORT OBLIGATION. While this Agreement is in effect, the Independent
Director shall immediately report to the Company in the event: (1) the
Independent Director knows or has reason to know or should have known that any
of the requirements specified in Section 3 hereof is not satisfied or is not
going to be satisfied; and (2) the Independent Director simultaneously serves on
an audit committee of any other public company.

 

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5. TERM AND TERMINATION. The term of this Agreement and the Independent
Director’s services hereunder shall be for one (1) year from the Effective Date,
unless terminated as provided for in this Section 5. This Agreement and the
Independent Director’s services hereunder shall terminate upon the earlier of
the following:

 

(a) Expiration of the Independent Director’s term as a director of the Company;

 

(b) Removal of the Independent Director as a director of the Company, upon
proper action by the stockholders of the Company in accordance with the By-Laws
and Certificate of Incorporation of the Company and applicable law;

 

(c) Resignation of the Independent Director as a director of the Company upon
written notice to the Board of Directors of the Company; or

 

(d) Termination of this Agreement by the Board, in the event any of the
requirements specified in Section 3 hereof is not satisfied, as determined by
the Board in its sole discretion.

 

6. LIMITATION OF LIABILITY. In no event shall the Independent Director be
individually liable to the Company or its shareholders for any damages for
breach of fiduciary duty as an independent director of the Company, unless the
Independent Director’s act or failure to act involves willful misconduct, fraud
or a knowing violation of law. No act or failure to act on the part of the
Independent Director shall be considered “willful” unless it is done, or omitted
to be done, by the Independent Director in bad faith or without reasonable
belief that his action or omission was in the best interest of the Company.

 

7. AGREEMENT OF INDEMNITY. The Company agrees to indemnify the Independent
Director as follows:

 

(a) Subject to the exceptions contained in Section 8(a) below, if the
Independent Director was or is a party or is threatened to be made a party to
any Proceeding (other than an action by or in the right of the Company) by
reason of the Independent Director’s Corporate Status, the Independent Director
shall be indemnified by the Company against all Expenses and Liabilities
incurred or paid by the Independent Director in connection with such Proceeding
(referred to herein as “INDEMNIFIABLE EXPENSES” and “INDEMNIFIABLE LIABILITIES,”
respectively, and collectively as “INDEMNIFIABLE AMOUNTS”).

 

(b) Subject to the exceptions contained in Section 8(b) below, if the
Independent Director was or is a party or is threatened to be made a party to
any Proceeding by or in the right of the Company, to procure a judgment in its
favor by reason of the Independent Director’s Corporate Status, the Independent
Director shall be indemnified by the Company against all Indemnifiable Amounts.

 

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(c) For purposes of this Agreement, the Independent Director shall be deemed to
have acted in good faith in conducting the Company’s affairs as an independent
director of the Company and/or a member of a committee of the Board of the
Company, if the Independent Director: (i) exercised or used the same degree of
diligence, care, and skill as an ordinarily prudent man would have exercised or
used under the circumstances in the conduct of his own affairs; or (ii) took, or
omitted to take, an action in reliance upon advise of counsels or other
professional advisors for the Company, or upon statements made or information
furnished by other directors, officers or employees of the Company, or upon a
financial statement of the Company provided by a person in charge of its
accounts or certified by a public accountant or a firm of public accountants,
which the Independent Director had reasonable grounds to believe to be true.

 

(d) The parties hereto acknowledge and intend that this Agreement shall provide
for indemnification in excess of that expressly provided by statute and
currently provided in the Company’s formation and governing documents,
including, without limitation, any indemnification provided by the Company’s
By-Laws, Certificate of Incorporation, vote of its shareholders or disinterested
directors, or applicable law.

 

(e) In the event the Independent Director intends to engage separate legal
counsel, the Independent Director shall provide at least two days’ prior written
notice to the Company before such engagement and identify therein the
Proceeding.

 

8. EXCEPTIONS TO INDEMNIFICATION. The Independent Director shall be entitled to
indemnification under Sections 7(a) and 7(b) above in all circumstances other
than the following:

 

(a) If indemnification is requested under Section 7(a) and it has been
adjudicated finally by a court or arbitral body of competent jurisdiction that,
in connection with the subject of the Proceeding out of which the claim for
indemnification has arisen, (i) the Independent Director failed to act in good
faith and in a manner the Independent Director reasonably believed to be in or
not opposed to the best interests of the Company, (ii) the Independent Director
had reasonable cause to believe that the Independent Director’s conduct was
unlawful, or (iii) the Independent Director’s conduct constituted willful
misconduct, fraud or knowing violation of law, then the Independent Director
shall not be entitled to payment of Indemnifiable Amounts hereunder. No act or
failure to act on the part of the Independent Director shall be considered
“willful” unless it is done, or omitted to be done, by the Independent Director
in bad faith or without reasonable belief that his action or omission was in the
best interest of the Company.

 

(b) If indemnification is requested under Section 7(b) and

 

(i) it has been adjudicated finally by a court or arbitral body of competent
jurisdiction that, in connection with the subject of the Proceeding out of which
the claim for indemnification has arisen, the Independent Director failed to act
in good faith and in a manner the Independent Director reasonably believed to be
in or not opposed to the best interests of the Company, including without
limitation, the breach of Section 4 hereof by the Independent Director, the
Independent Director shall not be entitled to payment of Indemnifiable Expenses
hereunder; or

 

(ii) it has been adjudicated finally by a court or arbitral body of competent
jurisdiction that the Independent Director is liable to the Company with respect
to any claim, issue or matter involved in the Proceeding out of which the claim
for indemnification has arisen, including, without limitation, a claim that the
Independent Director received an improper benefit or improperly took advantage
of a corporate opportunity, the Independent Director shall not be entitled to
payment of Indemnifiable Expenses hereunder with respect to such claim, issue or
matter.

 

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9. WHOLLY OR PARTLY SUCCESSFUL. Notwithstanding any other provision of this
Agreement, and without limiting any such provision, to the extent that the
Independent Director is, by reason of the Independent Director’s Corporate
Status, a party to and is successful, on the merits or otherwise, in any
Proceeding, the Independent Director shall be indemnified in connection
therewith. If the Independent Director 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 the Independent Director against those Expenses and Liabilities
reasonably incurred by the Independent Director or on the Independent Director’s
behalf in connection with each successfully resolved claim, issue or matter. For
purposes of this section, the termination of any claim, issue or matter in such
a Proceeding by dismissal, with or without prejudice, shall be deemed to be a
successful result as to such claim, issue or matter.

 

10. ADVANCES AND INTERIM EXPENSES. The Company shall pay to the Independent
Director on request (and, in any event, within not more than ten business days
of such request), all Indemnifiable Expenses incurred by the Independent
Director in connection with any Proceeding, including a Proceeding by or in the
right of the Company, in advance of the final disposition of such Proceeding, if
the Independent Director furnishes the Company with a written undertaking, to
the satisfaction of the Company, to repay the amount of such Indemnifiable
Expenses advanced to the Independent Director in the event it is finally
determined by a court or arbitral body of competent jurisdiction that the
Independent Director is not entitled under this Agreement to indemnification
with respect to such Indemnifiable Expenses. The Independent Director’s
obligation to reimburse the Company for such advances shall be unsecured and no
interest shall be charged thereon.

 

11. PROCEDURE FOR PAYMENT OF INDEMNIFIABLE AMOUNTS. The Independent Director
shall submit to the Company a written request specifying the Indemnifiable
Amounts, for which the Independent Director seeks payment under Section 7 hereof
and the Proceeding of which has been previously notified to the Company and
approved by the Company for indemnification hereunder. At the request of the
Company, the Independent Director shall furnish such documentation and
information as are reasonably available to the Independent Director and
necessary to establish that the Independent Director is entitled to
indemnification hereunder. The Company shall pay such Indemnifiable Amounts
within ten (10) days of receipt of all required documents.

 

12. REMEDIES OF INDEPENDENT DIRECTOR.

 

(a) RIGHT TO PETITION COURT. In the event that the Independent Director makes a
request for payment of Indemnifiable Amounts under Sections 7, 9-11 above, or
seeks payment of insurance under Section 14, below, and such payment or
advancement is not made in a timely manner (i) by the Company, pursuant to the
terms of this Agreement, or (ii) by any insurance carrier(s), pursuant to the
terms of their respective insurance policies, then the Independent Director may
petition the appropriate judicial authority to enforce the Company’s or the
carrier(s) respective obligations.

 

(b) BURDEN OF PROOF. In any judicial proceeding brought under Section 12 (a)
above, the Company shall have the burden of proving that the Independent
Director is not entitled to payment of Indemnifiable Amounts hereunder.

 

(c) EXPENSES. The Company agrees to reimburse the Independent Director in full
for any Expenses incurred by the Independent Director in connection with
investigating, preparing for, litigating, defending or settling any action
brought by the Independent Director under Section 12 (a) above, or in connection
with any claim or counterclaim brought by the Company in connection therewith.

 

(d) VALIDITY OF AGREEMENT. The Company shall be precluded from asserting in any
Proceeding, including, without limitation, an action under Section 12 (a) above,
that the provisions of this Agreement are not valid, binding and enforceable or
that there is insufficient consideration for this Agreement and shall stipulate
in court that the Company is bound by all the provisions of this Agreement.

 

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(e) FAILURE TO ACT NOT A DEFENSE. The failure of the Company (including its
Board of Directors or any committee thereof, independent legal counsel, or
stockholders) to make a determination concerning the permissibility of the
payment of Indemnifiable Amounts or the advancement of Indemnifiable Expenses
under this Agreement shall not be a defense in any action brought under Section
12 (a) above.

 

13. PROCEEDINGS AGAINST COMPANY. Except as otherwise provided in this Agreement,
the Independent Director shall not be entitled to payment of Indemnifiable
Amounts or advancement of Indemnifiable Expenses with respect to any Proceeding
brought by the Independent Director against the Company, any Entity which it
controls, any director or officer thereof, or any third party, unless the Board
has consented to the initiation of such Proceeding. This section shall not apply
to counterclaims or affirmative defenses asserted by the Independent Director in
an action brought against the Independent Director.

 

14. INSURANCE. The Company shall obtain and maintain a policy or policies of
director and officer liability insurance, in an amount not less than $5,000,000,
providing the Independent Director with coverage for Indemnifiable Amounts
and/or Indemnifiable Expenses in accordance with said insurance policy or
policies (“D&O INSURANCE”), provided that the Company shall not be liable under
this Agreement to make any payment in connection with any claim made against the
Independent Director to the extent the Independent Director has otherwise
received payment (under any insurance policy) of the amounts otherwise
indemnifiable hereunder. The Company shall thereafter take all necessary or
desirable action to cause such insurers to pay, on behalf of the Independent
Director, all amounts payable as a result of such Proceeding in accordance with
the terms of such policies.

 

15. Non-Exclusivity. The rights of the Independent Director hereunder shall be
in addition to and not in lieu of any other rights the Independent Director may
have under the Company’s Certificate of Incorporation, Bylaws, applicable law,
contract or otherwise. It is the intention of this Agreement to effect the
greatest protection possible to the Independent Director. To the extent that a
change in applicable law (whether by statute or judicial decision) permits
greater indemnification than would be afforded currently under the Company’s
Certificate of Incorporation, Bylaws, applicable law, contract or this
Agreement, it is the intent of the parties that the Independent Director enjoy
by this Agreement and any other agreements the greater benefits so afforded by
such change.

 

16. SUBROGATION. In the event of any payment of Indemnifiable Amounts under this
Agreement or the D&O Insurance, the Company or its Insurance Carrier, as the
case may be, shall be subrogated to the extent of such payment to all of the
rights of contribution or recovery of the Independent Director against other
persons, and the Independent Director shall take, at the request of the Company,
all reasonable action necessary to secure such rights, including the execution
of such documents as are necessary to enable the Company to bring suit to
enforce such rights.

 

17. AUTHORITY. Each party has all necessary power and authority to enter into,
and be bound by the terms of, this Agreement, and the execution, delivery and
performance of the undertakings contemplated by this Agreement have been duly
authorized by each party hereto:

 

18. SUCCESSORS AND ASSIGNMENT. This Agreement shall (a) be binding upon and
inure to the benefit of all successors and assigns of the Company (including any
transferee of all or a substantial portion of the business, stock and/or assets
of the Company and any direct or indirect successor by merger or consolidation
or otherwise by operation of law), and (b) be binding on and shall inure to the
benefit of the heirs, personal representatives, executors and administrators of
the Independent Director. The Independent Director has no power to assign this
Agreement or any rights and obligations hereunder.

 

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19. CHANGE IN LAW. To the extent that a change in applicable law (whether by
statute or judicial decision) shall mandate broader or narrower indemnification
than is provided hereunder, the Independent Director shall be subject to such
broader or narrower indemnification and this Agreement shall be deemed to be
amended to such extent.

 

20. SEVERABILITY. Whenever possible, each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid under applicable law,
but if any provision of this Agreement, or any clause thereof, shall be
determined by a court of competent jurisdiction to be illegal, invalid or
unenforceable, in whole or in part, such provision or clause shall be limited or
modified in its application to the minimum extent necessary to make such
provision or clause valid, legal and enforceable, and the remaining provisions
and clauses of this Agreement shall remain fully enforceable and binding on the
parties.

 

21. MODIFICATIONS AND WAIVER. Except as provided in Section 19 hereof with
respect to changes in applicable law which broaden or narrow the right of the
Independent Director to be indemnified by the Company, no supplement,
modification or amendment of this Agreement shall be binding unless executed in
writing by each of the parties hereto. No delay in exercise or non-exercise by
the Company of any right under this Agreement shall operate as a current or
future waiver by it as to its same or different rights under this Agreement or
otherwise.

 

22. NOTICES. All notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed to have been duly given (a) when
delivered by hand, (b) when transmitted by facsimile and receipt is
acknowledged, or (c) if mailed by certified or registered mail with postage
prepaid, on the third business day after the date en which it is so mailed:

 

If to Independent Director, to: Liren Wei, 133-10 39th Avenue, Flushing, New
York 11354, USA.

 

If to the Company, to: Gao Xincheng, Chairman and Chief Executive Officer, China
Integrated Energy, Inc., 10F Western International Square, No.2 Gao-Xin-Lu,
Xi’an City, Shaanxi Province, P.R.China, or to such other address as may have
been furnished in the same manner by any party to the others.

 

23. GOVERNING LAW. This Agreement shall be governed by and construed and
enforced under the laws of the State of Delaware.

 

24. CONSENT TO JURISDICTION. The parties hereby consent to the jurisdiction of
the courts having jurisdiction over matters arising in Delaware for any
proceeding arising out of or relating to this Agreement. The parties agree that
in any such proceeding, each party shall waive, if applicable, inconvenience of
forum and right to a jury.

 

25. AGREEMENT GOVERNS. This Agreement is to be deemed consistent wherever
possible with relevant provisions of the By-Laws and Certificate of
Incorporation of the Company; however, in the event of a conflict between this
Agreement and such provisions, the provisions of this Agreement shall control.

 

26. INDEPENDENT CONTRACTOR. The parties understand, acknowledge and agree that
the Independent Director’s relationship with the Company is that of an
independent contractor and nothing in this Agreement is intended to or should be
construed to create a relationship other than that of independent contractor.
Nothing in this Agreement shall be construed as a contract of
employment/engagement between the Independent Director and the Company or as a
commitment on the part of the Company to retain the Independent Director in any
capacity, for any period of time or under any specific terms or conditions, or
to continue the Independent Director’s service to the Company beyond any period.

 

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27. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between
the Company and the Independent Director with respect to the subject matter
hereof, and supersedes all prior understandings and agreements with respect to
such subject matter.

 

IN WITNESS WHEREOF, the parties hereto have executed this Independent Director
Indemnification Agreement as of the day and year first above written.

 

    AGREED AGREED     China Integrated Energy, Inc. Independent Director     /s/
Gao Xincheng /s/ Liren Wei Name:  Gao Xincheng Name: Liren Wei Title:   Chairman
and CEO      

 

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SCHEDULE A

 

I POSITION:

 

INDEPENDENT DIRECTOR AND MEMBER OF THE AUDIT COMMITTEE

 

II. COMPENSATION:

 

FEES. For all services rendered by the Independent Director pursuant to this
Agreement, both during and outside of normal working hours, including but not
limited to, attending all required meetings of the Board or applicable
committees thereof, executive sessions of the independent directors, reviewing
filing reports and other corporate documents as requested by the Company,
providing comments and opinions as to business matters as requested by the
Company, the Company agrees to pay to the Independent Director a fee in cash of
Ninety Thousand Dollars ($90,000) per annum (“the Fee”), which will be payable
in installments of $22,500, every three months during the Term, with the first
installment to be paid upon the execution of this Agreement.

 

If this Agreement is terminated in accordance with Section 5 hereof prior to the
end of the Term, the Independent Director agrees to return to the Company the
pro rata portion of the Fee for the remainder of the Term.

 

EXPENSES. During the term of the Independent Director’s service as a director of
the Company, the Company shall promptly reimburse the Independent Director for
all expenses incurred by him/her in connection with attending (a) all meetings
of the Board or applicable committees thereof, (b) executive sessions of the
independent directors, and (c) stockholder meetings, as a director or a member
of any committee of the Board , which are approved by the Company in advance.

 

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NO OTHER BENEFITS OR COMPENSATION. The Independent Director acknowledges and
agrees that he/she is not granted and is not entitled to any other benefits or
compensation from the Company for the services provided under this Agreement
except expressly provided for in this Schedule A.

 

 

    AGREED AGREED     China Integrated Energy, Inc. Independent Director     /s/
Gao Xincheng /s/ Liren Wei     Name:  Gao Xincheng Name:  Liren Wei
Title:   Chairman and CEO      

 

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