Exhibit
10.31(b)


 


INDEMNIFICATION
AGREEMENT


 


THIS
INDEMNIFICATION AGREEMENT (this “Agreement”) is made as of February 27, 2015 by and between Yulong Eco-Materials Limited,
a Cayman Islands exempted company (the “Company”), and Michael W. Harlan (“Indemnitee”).


 


Section
1.Services by Indemnitee. Indemnitee agrees to serve as a director of the Company and, as mutually agreed by Indemnitee
and the Company, as a director, officer, trustee, general partner, managing member, employee, agent or fiduciary of other corporations,
limited liability companies, partnerships, joint ventures, trusts or other enterprises (including, without limitation, employee
benefit plans) (each, an “Enterprise”). Indemnitee may at any time and for any reason resign from any such position
(subject to any other contractual obligation or any obligation applicable law imposes), in which event the Company will have no
obligation under this Agreement to continue Indemnitee in that position. This Agreement is not and is not to be construed as an
employment contract between the Company (or any of its subsidiaries) and Indemnitee. Indemnitee specifically acknowledges that
Indemnitee’s employment with the Company (or any of its subsidiaries), if any, is at will, and the Indemnitee may be discharged
at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between
Indemnitee and the Company (or any of its subsidiaries), other applicable formal severance policies duly adopted by the Board
or, with respect to service as a director of the Company, by the Company’s Memorandum and Articles of Association, and the
Companies Law of the Cayman Islands, as amended. The foregoing notwithstanding, subject to Section 12, this Agreement will continue
in force after Indemnitee has ceased to serve as a director of the Company and no longer serves at the request of the Company
as a director, officer, employee, agent or fiduciary of any other Enterprise.


 


Section
2.Indemnification—General. The Company will indemnify, and advance Expenses (as hereinafter defined) to, Indemnitee
(i) as this Agreement permits and (ii) (subject to the provisions hereof) to the fullest extent applicable law in effect
on the date hereof and as amended from time to time permits. The rights the preceding sentence provides to Indemnitee will include,
but will not be limited to, the rights the other Sections hereof set forth.


 


Section
3.Proceedings Other Than by or in the Right of the Company. Indemnitee will be entitled to the rights of indemnification
this Section 3 provides if, by reason of his Corporate Status, he is, or is threatened to be made, a party to or a participant
in any threatened, pending or completed Proceeding (as hereinafter defined), other than a Proceeding by or in the right of the
Company. Pursuant to this Section 3, the Company will indemnify Indemnitee against, and will hold Indemnitee harmless from and
in respect of, all Expenses, judgments, penalties, fines (including excise taxes) and amounts paid in settlement (including all
interest, assessments and other charges paid or payable in connection with or in respect of those Expenses, judgments, fines,
penalties or amounts paid in settlement) actually and reasonably incurred by him or on his behalf in connection with that Proceeding
or any claim, issue or matter therein, if he acted in good faith and in a manner he reasonably believed to be in or not opposed
to the best interests of the Company and, with respect to any criminal Proceeding, had no reasonable cause to believe his conduct
was unlawful.


 


Section
4.Proceedings by or in the Right of the Company. Indemnitee will be entitled to the rights of indemnification this
Section 4 provides if, by reason of his Corporate Status, he is, or is threatened to be made, a party to or a participant (as
a witness or otherwise) in any threatened, pending or completed Proceeding brought by or in the right of the Company to procure
a judgment in its favor. Pursuant to this Section 4, the Company will indemnify Indemnitee against, and will hold Indemnitee harmless
from and in respect of, all Expenses actually and reasonably incurred by him or on his behalf in connection with that Proceeding
if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company;
provided, however, that no indemnification against those Expenses will be made in respect of any claim, issue or matter in that
Proceeding as to which Indemnitee has been adjudged to be liable to the Company unless and to the extent that the court in which
that Proceeding has been brought or is pending, determines that despite the adjudication of liability but in view of all the circumstances
of the case, Indemnitee is fairly and reasonably entitled to indemnification.


 






    	 



    	 



    

 


Section
5.Indemnification for Expenses of a Party Who Is Wholly or Partly Successful. Notwithstanding any other
provision hereof, to the extent that Indemnitee is, by reason of his Corporate Status, a party to (or a participant in) and is
successful, on the merits or otherwise, in defense of any Proceeding, the Company will indemnify him against all Expenses actually
and reasonably incurred by him or on his behalf in connection therewith. If Indemnitee is not wholly successful in defense of
any Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in
that Proceeding, the Company will indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his
behalf in connection with each successfully resolved claim, issue or matter. For purposes of this Section 5 and without limitation,
the termination of any claim, issue or matter in any Proceeding by dismissal, with or without prejudice, will be deemed to be
a successful result as to that claim, issue or matter.


 


Section
6.Indemnification for Expenses as a Witness. Notwithstanding any other provision hereof, to the extent that Indemnitee
is, by reason of his Corporate Status, a witness in any Proceeding to which Indemnitee is not a party, the Company will indemnify
him against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.


 


Section
7. Advancement of Expenses. The Company will advance all reasonable Expenses incurred by or on behalf of Indemnitee
in connection with any Proceeding within 30 days after the Company receives a statement or statements from Indemnitee requesting
such advance or advances from time to time, whether prior to or after final disposition of that Proceeding. Each such statement
must reasonably evidence the Expenses incurred by or on behalf of Indemnitee and include or be preceded or accompanied by an undertaking
by or on behalf of Indemnitee to repay any Expenses advanced if it ultimately is determined that Indemnitee is not entitled to
be indemnified by the Company against those Expenses. The Company will accept any such undertaking and advance such Expenses without
regard to Indemnitee’s ultimate entitlement to indemnification under other provisions of this Agreement.


 


Section
8.Procedure for Determination of Entitlement to Indemnification. (a)  Within thirty (30) days after the actual
receipt by Indemnitee of notice that he or she is a party to or a participant (as a witness or otherwise) in any Proceeding, Indemnitee
shall submit to the Company a written notice identifying the Proceeding. The omission by the Indemnitee to notify the Company
will not relieve the Company from any liability which it may have to Indemnitee (i) otherwise than under this Agreement, and (ii)
under this Agreement only to the extent the Company cannot establish that such omission to notify resulted in actual prejudice
to the Company.


 


(b)Indemnitee
shall thereafter deliver to the Company a written application to indemnify Indemnitee in accordance with this Agreement. Such
application(s) may be delivered from time to time and at such time(s) as Indemnitee deems appropriate in his or her sole discretion.
Following such a written application for indemnification by Indemnitee, the Indemnitee's entitlement to indemnification shall
be determined according to Section 8(c) of this Agreement.


 


(c)On
written request by Indemnitee for indemnification pursuant to Section 8(b), a determination, if applicable law requires, with
respect to Indemnitee’s entitlement thereto will be made in the specific case: (i) by a majority vote of the Disinterested
Directors, even though less than a quorum of the Board, or (ii) if so requested by the Indemnitee in his or her sole discretion
by an Independent Counsel in a written opinion to the Board, a copy of which will be delivered to Indemnitee. If it is so determined
that Indemnitee is entitled to indemnification hereunder, the Company will: (i) within 30 days after that determination pay to
Indemnitee all amounts theretofore incurred by or on behalf of Indemnitee in respect of which Indemnitee is entitled to that indemnification
by reason of that determination; and (ii) thereafter on written request by Indemnitee, pay to Indemnitee within 30 days after
that request such additional amounts theretofore incurred by or on behalf of Indemnitee in respect of which Indemnitee is entitled
to that indemnification by reason of that determination. Indemnitee will cooperate with the person, persons or entity making the
determination with respect to Indemnitee’s entitlement to indemnification under this Agreement, including providing to such
person, persons or entity on reasonable advance request any documentation or information which is (i) not privileged or otherwise
protected from disclosure, (ii) reasonably available to Indemnitee and (iii) reasonably necessary to that determination.
The Company will bear all costs and expenses (including attorneys’ fees and disbursements) Indemnitee incurs in so cooperating
(irrespective of the determination as to Indemnitee’s entitlement to indemnification) and hereby indemnifies and agrees
to hold Indemnitee harmless therefrom.


 






    	2



    	 



    

 


(d)If
an Independent Counsel is to make the determination of entitlement to indemnification pursuant to Section 8(c), the Independent
Counsel will be selected as this Section 8(d) provides. If a Change of Control has not occurred, the Board will select the
Independent Counsel, and the Company will give written notice to Indemnitee advising him of the identity of the Independent Counsel
so selected. If a Change of Control has occurred, Indemnitee will select the Independent Counsel (unless Indemnitee requests that
the Board make the selection, in which event the preceding sentence will apply), and Indemnitee will give written notice to the
Company advising it of the identity of the Independent Counsel so selected. In either event, Indemnitee or the Company, as the
case may be, may, within 10 business days after the written notice of selection has been given, deliver to the Company or to Indemnitee,
as the case may be, a written objection to the selection; provided, however, that any such objection may be asserted only on the
ground that the Independent Counsel so selected is not an “Independent Counsel” as Section 21 defines that term, and
the objection must set forth with particularity the factual basis for that assertion. Absent a proper and timely objection, the
person so selected shall act as Independent Counsel. If any such written objection is so made and substantiated, the Independent
Counsel so selected may not serve as Independent Counsel unless and until that objection is withdrawn or a court of competent
jurisdiction has determined that objection is without merit. If (i) an Independent Counsel is to make the determination of entitlement
to indemnification pursuant to Section 8(c) and (ii) within 20 days after submission by Indemnitee of a written request for indemnification
pursuant to Section 8(a), no Independent Counsel has been selected and not objected to, either the Company or Indemnitee may petition
a court of competent jurisdiction for resolution of any objection that has been made by the Company or Indemnitee to the other’s
selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the petitioned court
or by such other person as the petitioned court designates, and the person with respect to whom all objections are so resolved
or the person so appointed will act as the Independent Counsel under Section 8(c). The Company will pay any and all reasonable
and documented fees and expenses the Independent Counsel incurs in connection with acting pursuant to Section 8(c), and the Company
will pay all reasonable and documented fees and expenses incident to the procedures this Section 8(d) sets forth, regardless of
the manner in which the Independent Counsel is selected or appointed. If (i) the Independent Counsel selected or appointed
pursuant to this Section 8(d) does not make any determination respecting Indemnitee’s entitlement to indemnification
hereunder within 45 days after the Company receives a written request therefor and (ii) any judicial proceeding or arbitration
pursuant to Section 10(a) is then commenced, that Independent Counsel will be discharged and relieved of any further responsibility
in such capacity (subject to the applicable standards of professional conduct then prevailing).


 


Section
9.Presumptions and Effect of Certain Proceedings.


 


(a)The
termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or on a
plea of nolo contendere or its equivalent, will not (except as this Agreement otherwise expressly provides) of itself adversely
affect the right of Indemnitee to indemnification hereunder or create a presumption that Indemnitee did not act in good faith
and in a manner he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal
Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.


 


(b)Any
action Indemnitee takes or omits to take in connection with any employee benefit plan will, if taken or omitted in good faith
by Indemnitee and in a manner Indemnitee reasonably believed to be in the interest of the participants in or beneficiaries of
that plan, be deemed to have been taken or omitted in a manner “not opposed to the best interests of the Company”
for all purposes hereof.


 


(c)Reliance
as Safe Harbor. For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if
Indemnitee's action is based on the records or books of account of the Enterprise, including financial statements, or on information
supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for
the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant
or by an appraiser or other expert selected by the Enterprise. The provisions of this Section 9(d) shall not be deemed to be exclusive
or to limit in any way the other circumstances in which the Indemnitee may be deemed or found to have met the applicable standard
of conduct set forth in this Agreement.


 


(d)Actions
of Others. The knowledge and/or actions, or failure to act, of any other director, trustee, partner, managing member, fiduciary,
officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification
under this Agreement.


 






    	3



    	 



    

 


Section
10.Remedies of Indemnitee. (a) In the event that (i) a determination is made pursuant to Section 8(c)(i) that Indemnitee
is not entitled to indemnification hereunder, (ii) advancement of Expenses is not timely made pursuant to Section 7, (iii) no
determination as to Indemnitee’s entitlement to indemnification shall have been made pursuant to Section 8(c) of this Agreement
hereunder, or that determination shall not have been made within 45 days after receipt by the Company of the request for that
indemnification, (iv) payment of indemnification is not made pursuant to Section 5 or 6 within 30 days after receipt by the
Company of a written request therefor or (v) payment of indemnification pursuant to Section 8(c) is not made timely, Indemnitee
will be entitled to an adjudication from a court of competent jurisdiction of his entitlement to that indemnification or advancement
of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator
pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Indemnitee must commence any such proceeding
seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right
to commence that proceeding pursuant to this Section 10(a); provided, however, that this sentence will not apply in respect of
a proceeding brought by Indemnitee to enforce his rights under Section 5.


 


(b)If
a determination has been made pursuant to Section 8(c)(i) that Indemnitee is not entitled to indemnification hereunder, any
judicial proceeding or arbitration commenced pursuant to this Section 10 will be conducted in all respects as a de novo trial,
or arbitration, on the merits and Indemnitee will not be prejudiced by reason of that adverse determination. If Indemnitee commences
a judicial proceeding or arbitration pursuant to this Section 10, Indemnitee shall not be required to reimburse the Company for
any advances pursuant to Section 7 until a final determination is made with respect to Indemnitee's entitlement to indemnification
(as to which all rights of appeal have been exhausted or lapsed).


 


(c)If
a determination has been made pursuant to Section 8(c)(i) that Indemnitee is entitled to indemnification hereunder, the Company
will be bound by that determination in any judicial proceeding or arbitration commenced pursuant to this Section 10, absent (i)
a misstatement by Indemnitee of a material fact, or an omission by Indemnitee of a material fact necessary to make Indemnitee’s
statements not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification
under applicable law.


 


(d)If
Indemnitee, pursuant to this Section 10, seeks a judicial adjudication of or an award in arbitration to enforce his rights under,
or to recover damages for breach of, this Agreement, Indemnitee will be entitled to recover from the Company, and will be indemnified
by the Company against, any and all expenses (of the types described in the definition of Expenses in Section 21) actually and
reasonably incurred by him in that judicial adjudication or arbitration, but only if he prevails therein. If it is determined
in that judicial adjudication or arbitration that Indemnitee is entitled to receive part of, but not all, the indemnification
or advancement of expenses sought, the Expenses incurred by Indemnitee in connection with that judicial adjudication or arbitration
will be appropriately prorated between those in respect of which this Section 10(d) entitles Indemnitee to indemnification
and those Indemnitee must bear.


 


(e)The
Company shall be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 10 that
the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court
or before any such arbitrator that the Company is bound by all the provisions of this Agreement.


 


(f)The
Company shall indemnify Indemnitee to the fullest extent permitted by law against all Expenses and, if requested by Indemnitee,
shall (within 30 days after the Company's receipt of such written request) advance such Expenses to Indemnitee, which are incurred
by Indemnitee in connection with any judicial proceeding or arbitration brought by Indemnitee for (i) indemnification or advances
of Expenses by the Company under this Agreement or any other agreement or provision of the Company's Memorandum and Articles of
Association now or hereafter in effect or (ii) recovery or advances under any insurance policy maintained by the Company or any
of its subsidiaries for the benefit of Indemnitee, regardless of whether Indemnitee ultimately is determined to be entitled to
such indemnification, advance or insurance recovery, as the case may be.


 






    	4



    	 



    




 


Section
11.Non-exclusivity; Survival of Rights; Insurance; Subrogation. (a) The rights to indemnification and advancement of
Expenses this Agreement provides are not and will not be deemed exclusive of any other rights to which Indemnitee may at any time
be entitled under applicable law, the Company’s Memorandum and Articles of Association, any agreement, a vote of stockholders
or a resolution of directors, or otherwise. No amendment, alteration or termination of this Agreement or any provision hereof
will limit or restrict any right of Indemnitee hereunder in respect of any action Indemnitee has taken or omitted in his Corporate
Status prior to that amendment, alteration or termination. To the extent that a change in Cayman Islands law (whether by statute
or judicial decision) permits greater indemnification by agreement than would be afforded currently under this Agreement, it is
the intent and agreement of the parties hereto that Indemnitee will enjoy by this Agreement the greater benefits that change affords.
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.


 


(b)The
Company will maintain in effect during the entire period for which the Company is obligated to indemnify Indemnitee under this
Agreement (subject to appropriate cost considerations), an insurance policy or policies providing liability insurance for directors,
officers and employees of the Company or of any other Enterprise that any such person serves at the request of the Company. Indemnitee
will be covered by any such policy or policies in accordance with its or their terms to the maximum extent of the coverage available
for any such person 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 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.


 


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


 


(d)If
the Company makes any payment hereunder, it will be subrogated to the extent of that payment to all the rights of recovery of
Indemnitee, who will execute all papers required and take all action necessary to secure those rights, including execution of
such documents as are necessary to enable the Company to bring suit to enforce those rights.


 


(e)The
Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee with respect to Indemnitee’s service
at the request of the Company as a director, officer, employee, agent or fiduciary of any other Enterprise will be reduced by
any amount Indemnitee has actually received as indemnification or advancement of Expenses from that other Enterprise.


 


Section
12.Duration of Agreement. This Agreement will continue until and terminate on the later of: (i) 10 years after the
date that Indemnitee has ceased to serve as a director or officer of the Company or as a director, officer, trustee, partner,
managing partner, employee, agent or fiduciary of any other Enterprise that Indemnitee served on behalf of the Company at the
request of the Company; or (ii) one year after the final termination of any Proceeding (including any rights of appeal thereto)
then pending in respect of which Indemnitee is granted rights of indemnification or advancement of Expenses hereunder and of any
proceeding commenced by Indemnitee pursuant to Section 10 relating thereto including any rights of appeal of any Section 10 Proceeding.
This Agreement will be binding on the Company and its successors and assigns and will inure to the benefit of Indemnitee and his
spouse (if Indemnitee resides in Texas or another community property state), heirs, executors and administrators.


 


Section
13.Severability. If any provision or provisions of this Agreement is or are invalid, illegal or unenforceable for any
reason whatsoever: (i) the validity, legality and enforceability of the remaining provisions hereof (including, without limitation,
each portion of any Section containing any such invalid, illegal or unenforceable provision which is not itself invalid, illegal
or unenforceable) will not in any way be affected or impaired thereby; (ii) such provision or provisions will be deemed reformed
to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (iii)
to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section containing
any such invalid, illegal or unenforceable provision which is not itself invalid, illegal or unenforceable) will be construed
so as to give effect to the intent manifested thereby.


 






    	5



    	 



    

 


Section
14.Exception to Right of Indemnification or Advancement of Expenses. Notwithstanding any provision in this Agreement,
the Company shall not be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee:


 


(a)for
which payment has actually been received by or on behalf of Indemnitee under any insurance policy or other indemnity provision,
except with respect to any excess beyond the amount actually received under any insurance policy or other indemnity provision;
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 similar provisions of state statutory law or common law;


 


(c)except
as otherwise provided in Sections 10(d) - (f) hereof, in connection with any Proceeding (or any part of any Proceeding) initiated
by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors,
officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior
to its initiation or (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the
Company under applicable law;


 


(d)for
reimbursement to the Company of any bonus or other incentive-based or equity-based compensation or of any profits realized by
Indemnitee from the sale of securities of the Company, in each case as required under the Exchange Act; or


 


(e)in
connection with proceedings or claims involving the enforcement of non-compete and/or non-disclosure agreements or the non-compete
and/or non-disclosure provisions of employment, severance, consulting or similar agreements the Indemnitee may be a party to with
the Company, or any subsidiary of the Company.


 


Section
15.Enforcement and Binding Effect.


 


(a)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 as a director or officer of the Company, and the Company acknowledges that Indemnitee is
relying upon this Agreement in serving as a director or officer of the Company.


 


(b)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.


 


Section
16.Settlement. Notwithstanding any other provision of this Agreement, the Company shall have no obligation to indemnify
Indemnitee under the Agreement for amounts paid in settlement of any action, suit or proceeding without the Company’s written
consent, which shall not be unreasonably withheld.


 


Section
17.Joint Liability.


 


(a)The
Company shall not, without Indemnitee’s prior written consent, enter into any settlement of any Proceeding in which the
Company is or is alleged to be 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.


 


(b)The
Company hereby agrees to fully indemnify, hold harmless and exonerate 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.


 






    	6



    	 



    

 


Section
18.Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which will for all purposes
be deemed to be an original but all of which together will 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.


 


Section
19.Headings. The headings of the Sections hereof are inserted for convenience only and do not and will not be deemed
to constitute part of this Agreement or to affect the construction thereof.


 


Section
20.Security. To the extent requested by Indemnitee and approved by the Board, the Company may at any time and from
time to time provide security to Indemnitee for the Company’s obligations hereunder through an irrevocable bank line of
credit, funded trust or other collateral.


 


Section
21.Definitions. For purposes of this Agreement:


 


“Acquiring
Person” means any Person who or which, together with all its Affiliates and Associates, is or are the Beneficial Owner
of 50% or more of the shares of Common Stock then outstanding, but does not include any Exempt Person; provided, however, that
a Person will not be or become an Acquiring Person if that Person, together with its Affiliates and Associates, becomes the Beneficial
Owner of 50% or more of the shares of Common Stock then outstanding solely as a result of a reduction in the number of shares
of Common Stock outstanding which results from the Company’s direct or indirect repurchase of Common Stock, unless and until
such time as that Person or any Affiliate or Associate of that Person purchases or otherwise becomes the Beneficial Owner of additional
shares of Common Stock constituting 1% or more of the then outstanding shares of Common Stock or any other Person (or Persons)
who is (or collectively are) the Beneficial Owner of shares of Common Stock constituting 1% or more of the then outstanding shares
of Common Stock becomes an Affiliate or Associate of that Person, unless, in either such case, that Person, together with all
its Affiliates and Associates, is not then the Beneficial Owner of 50% or more of the shares of Common Stock then outstanding.


 


“Affiliate”
has the meaning Exchange Act Rule 12b-2 specifies.


 


“Associate”
means, with reference to any Person, (i) any corporation, firm, partnership, limited liability company, association, unincorporated
organization or other entity (other than the Company or a subsidiary of the Company) of which that Person is an officer or general
partner (or officer or general partner of a general partner) or is, directly or indirectly, the Beneficial Owner of 10% or more
of any class of its equity securities or interests, (ii) any trust or other estate in which that Person has a substantial beneficial
interest or for or of which that Person serves as trustee or in a similar fiduciary capacity and (iii) any relative or spouse
of that Person, or any relative of that spouse, who has the same home as that Person.


 


A
specified Person is deemed the “Beneficial Owner” of, and is deemed to “beneficially own,” any
securities:


 


(i)of
which that Person or any of that Person’s Affiliates or Associates, directly or indirectly, is the “beneficial owner”
(as determined pursuant to Exchange Act Rule 13d-3) or otherwise has the right to vote or dispose of, including pursuant
to any agreement, arrangement or understanding (whether or not in writing); provided, however, that a Person will not be deemed
the “Beneficial Owner” of, or to “beneficially own,” any security under this subparagraph (i) as a result
of an agreement, arrangement or understanding to vote that security if that agreement, arrangement or understanding: (A) arises
solely from a revocable proxy or consent given in response to a public (that is, not including a solicitation exempted by Exchange
Act Rule 14a-2(b)(2)) proxy or consent solicitation made pursuant to, and in accordance with, the applicable provisions of
the Exchange Act; and (B) is not then reportable by that Person on Exchange Act Schedule 13D (or any comparable or successor report);


 


(ii)which
that Person or any of that Person’s Affiliates or Associates, directly or indirectly, has the right or obligation to acquire
(whether that right or obligation is exercisable or effective immediately or only after the passage of time or the occurrence
of an event) pursuant to any agreement, arrangement or understanding (whether or not in writing) or on the exercise of conversion
rights, exchange rights, other rights, warrants or options, or otherwise; provided, however, that a Person will not be deemed
the “Beneficial Owner” of, or to “beneficially own,” securities tendered pursuant to a tender or exchange
offer made by that Person or any of that Person’s Affiliates or Associates until those tendered securities are accepted
for purchase or exchange; or


 






    	7



    	 



    

 


(iii)which
are beneficially owned, directly or indirectly, by (A) any other Person (or any Affiliate or Associate thereof) with which the
specified Person or any of the specified Person’s Affiliates or Associates has any agreement, arrangement or understanding
(whether or not in writing) for the purpose of acquiring, holding, voting (except pursuant to a revocable proxy or consent as
described in the proviso to subparagraph (i) of this definition) or disposing of any voting securities of the Company or
(B) any group (as Exchange Act Rule 13d-5(b) uses that term) of which that specified Person is a member;


 


provided,
however, that nothing in this definition will cause a Person engaged in business as an underwriter of securities to be the “Beneficial
Owner” of, or to “beneficially own,” any securities that Person acquires through its participation in good faith
in a firm commitment underwriting (including, without limitation, securities acquired pursuant to stabilizing transactions to
facilitate a public offering in accordance with Exchange Act Regulation M or to cover overallotments created in connection with
a public offering) until the expiration of 40 days after the date of that acquisition. For purposes of this definition, “voting”
a security includes voting, granting a proxy, acting by consent, making a request or demand relating to corporate action (including,
without limitation, calling a stockholder meeting) or otherwise giving an authorization (within the meaning of Section 14(a) of
the Exchange Act) in respect of that security.


 


“Change
of Control” means the occurrence of any of the following events that occurs after the date of this Agreement: (i) any
Person becomes an Acquiring Person; (ii) at any time the then Continuing Directors cease to constitute a majority of the members
of the Board; (iii) a merger of the Company with or into, or a sale by the Company of its properties and assets substantially
as an entirety to, another Person occurs and, immediately after that occurrence, any Person, other than an Exempt Person, together
with all Affiliates and Associates of that Person (other than Exempt Persons), will be the Beneficial Owner of 50% or more of
the total voting power of the then outstanding Voting Shares of the Person surviving that transaction (in the case or a merger
or consolidation) or the Person acquiring those properties and assets substantially as an entirety unless that Person, together
with all its Affiliates and Associates, was the Beneficial Owner of 50% or more of the shares of Common Stock outstanding prior
to that transaction; (iv) the approval by the stockholders of the Company of a complete liquidation of the Company or an agreement
or series of agreements for the sale or disposition by the Company of all or substantially all of the Company's assets; or (v)
occurs any other event of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation
14A (or a response to any similar item on any similar schedule or form) promulgated under the Exchange Act (as defined below),
whether or not the Company is then subject to such reporting requirement.


 


“Common
Stock” means (i) the common stock, par value $.001 per share, of the Company and (ii) any other class of capital
stock of the Company which is (A) except for less voting rights, identical to the common stock clause (i) of this definition describes
and (B) convertible into that common stock on a share for share basis on the occurrence of a Change of Control.


 


“Continuing
Director” means at any time any individual who then (i) is a member of the Board and was a member of the Board as of
September 1, 2010 or whose nomination for his first election, or that first election, to the Board following that date was recommended
or approved by a majority of the then Continuing Directors (acting separately or as a part of any action taken by the Board or
any committee thereof) and (ii) is not an Acquiring Person, an Affiliate or Associate of an Acquiring Person or a nominee or representative
of an Acquiring Person or of any such Affiliate or Associate.


 


“Corporate
Status” describes the status of a natural person who is or was a director, officer, trustee, general partner, managing
member, employee or agent of the Company or of any other Enterprise, provided that person is or was serving in that capacity at
the request of the Company. For purposes of this Agreement, “serving at the request of the Company” includes any service
by Indemnitee which imposes duties on, or involves services by, Indemnitee with respect to any employee benefit plan or its participants
or beneficiaries.


 






    	8



    	 



    

 


“Disinterested
Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification
is sought by Indemnitee hereunder.


 


“Exchange
Act” means the Securities Exchange Act of 1934, as amended.


 


“Exempt
Person” means: (i)(A) the Company, any subsidiary of the Company, any employee benefit plan of the Company or of any
subsidiary of the Company and (B) any Person organized, appointed or established by the Company for or pursuant to the terms of
any such plan or for the purpose of funding any such plan or funding other employee benefits for employees of the Company or any
subsidiary of the Company; and (ii) Indemnitee, any Affiliate or Associate of Indemnitee or any group (as Exchange Act Rule 13d-5(b)
uses that term) of which Indemnitee or any Affiliate or Associate of Indemnitee is a member.


 


“Expenses”
include all 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, 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, or otherwise participating in, a Proceeding and all interest or finance charges attributable to
any thereof. Should any payments by the Company under this Agreement be determined to be subject to any federal, state or local
income or excise tax, “Expenses” also will include such amounts as are necessary to place Indemnitee in the same after-tax
position (after giving effect to all applicable taxes) he would have been in had no such tax been determined to apply to those
payments. 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. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or
fines against Indemnitee.


 


“Independent
Counsel” means a law firm, or a member of a law firm, that or who is experienced in matters of corporation law and neither
presently is, nor in the past five years has been, retained to represent: (i) the Company, its affiliates or Indemnitee in any
matter material to any such party; or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term “Independent Counsel” does not include at any time any person who, under the
applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company
or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.


 


“Person”
means any natural person, sole proprietorship, corporation, partnership of any kind having a separate legal status, limited liability
company, business trust, unincorporated organization or association, mutual company, joint stock company, joint venture, estate,
trust, union or employee organization or governmental authority.


 


“Proceeding”
includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation,
inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company
or otherwise and whether of a civil, criminal, administrative or investigative nature, in which Indemnitee was, is or will 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 him or of any action on his part while acting as director or officer of the Company, or by reason of the
fact that he 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 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.


 


“Voting
Shares” means: (i) in the case of any corporation, stock of that corporation of the class or classes having general
voting power under ordinary circumstances to elect a majority of that corporation’s board of directors; and (ii) in the
case of any other entity, equity interests of the class or classes having general voting power under ordinary circumstances equivalent
to the Voting Shares of a corporation.


 






    	9



    	 



    

 


Section
22.Modification and Waiver. No supplement to or modification or amendment of this Agreement will be binding unless
executed in writing by both parties hereto. No waiver of any of the provisions of this Agreement will be deemed or will constitute
a waiver of any other provisions hereof (whether or not similar), nor will any such waiver constitute a continuing waiver.


 


Section
23.Notice by Indemnitee. Indemnitee agrees promptly to notify the Company in writing on being served with any summons,
citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject
to indemnification or advancement of Expenses hereunder; provided, however, a failure to give that notice will not deprive Indemnitee
of his rights to indemnification and advancement of Expenses hereunder unless the Company is actually and materially prejudiced
thereby.


 


Section
24.Notices. All notices, requests, demands and other communications hereunder must be in writing and will be deemed
delivered and received (i) if personally delivered or if delivered by telex, telegram, facsimile or courier service, when actually
received by the party to whom the notice or communication is sent or (ii) if delivered by mail (whether actually received or not),
at the close of business on the third business day in the city in which the Company’s principal executive office is located
next following the day when placed in the mail, postage prepaid, certified or registered, addressed to the appropriate party at
the address of that party set forth below (or at such other address as that party may designate by written notice to the other
party in accordance herewith):


 


	 	(a)	If
    to Indemnitee, to:	Michael
    W. Harlan
	 	 	 	2
    Dunnam Lane
	 	 	 	Houston,
    TX  77024
	 	 	 	 
	 	 	with a copy (which will not constitute notice for the purposes of this Agreement) to such legal counsel, if any, as the Indemnitee may designate in writing; and


 





	 	(b)	If
    to the Company, to:	Yulong
    Eco-Materials Limited
	 	 	 	Eastern
    End of Xiwuzhuang Village
	 	 	 	Jiaodian
    Town, Xinhua Area
	 	 	 	Pingdingshan,
    Henan Province
	 	 	 	People’s
    Republic of China
	 	 	 	Attention:
    President


 


Section
25.Contribution. To the fullest extent applicable law permits, if the indemnification provided for in this Agreement
is held by a court of competent jurisdiction to be unavailable to Indemnitee in whole or in part, the Company, in lieu of indemnifying
Indemnitee, will contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts
paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this
Agreement, in such proportion as is deemed fair and reasonable in light of all the circumstances of that Proceeding in order to
reflect: (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving
rise to that Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and
Indemnitee in connection with such event(s) and/or transaction(s); provided, that, without limiting the generality of the foregoing,
such contribution shall not be required where such holding by the court is due to the failure of the Indemnitee to meet the standard
of conduct set forth in Sections 3 or 4 hereof or any limitation on indemnification set forth in Sections 14 or 16 hereof.


 






    	10



    	 



    

 


Section
26.Governing Law; Submission to Jurisdiction. This Agreement and the legal relations among the parties will be governed
by, and construed and enforced in accordance with, the laws of the Cayman Islands, without regard to its conflict of laws rules.
Except with respect to any arbitration Indemnitee commences pursuant to Section 10(a), the Company and Indemnitee hereby irrevocably
and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement will be brought
only in a court of competent jurisdiction in the Cayman Islands and not in any other state or federal court in the United States
of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of in a court of competent
jurisdiction in the Cayman Islands for purposes of any action or proceeding arising out of or in connection with this Agreement,
(iii) waive any objection to the laying of venue of any such action or proceeding in in a court of competent jurisdiction in the
Cayman Islands and (iv) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in in a
court of competent jurisdiction in the Cayman Islands has been brought in an improper or otherwise inconvenient forum.


 


Section
27.Miscellaneous. Use of one gender herein includes usage of each other gender where appropriate. This Agreement uses
the words “herein,” “hereof” and words of similar import to refer to this Agreement as a whole and not
to any provision of this Agreement, and the word “Section” refers to a Section of this Agreement, unless otherwise
specified.


 






    	11



    	 



    

 





IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written.


 


	 	YULONG
    ECO-MATERIALS LIMITED
	 	 	 
	 	By:	/s/
    Yulong Zhu
	 	Name:	Yulong
    Zhu
	 	Title:	Chief
    Executive Officer
	 	 	 
	 	INDEMNITEE:
	 	 	 
	 	/s/
    Michael W. Harlan
	 	Name:
    Michael W. Harlan


 


 


12