Jinhao Motor Company - Exhibit 10.5 - Filed by newsfilecorp.com






Exhibit 10.5

INDEMNIFICATION AGREEMENT 

          This
Indemnification Agreement, dated as of September 2, 2010, is made by and between
Jinhao Motor Company, a Nevada corporation (the “Company”), and Stanley
Leung, a 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
stockholders 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.      The
Company’s Bylaws authorize the indemnification of the directors of the Company
in excess of that expressly permitted by Sections 78.751 and 78.752 of the
Nevada Revised Statutes; 

          G.      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; 




          H.      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 

          I.      The
Indemnitee is willing to serve, or continue to serve, the Company, provided, and
on the expressed condition, that the Indemnitee 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, consultants,
advisors 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
and whether formal or informal, including appeals (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 her or of any inaction on his or her part while acting as such director
or officer or by reason of the fact that he or she 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 the Indemnitee 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, or
by reason of any action alleged to have been taken or omitted in any such
capacity. 

          2.     
Agreement to Serve. The Indemnitee agrees to serve or continue to serve
as a director of the Company to the best of his or her 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
the Indemnitee tenders his or her 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. To fullest extent permitted by law, the Company shall
indemnify the Indemnitee against all loss and liability suffered and Expenses,
judgments, fines, penalties or amounts paid in settlement (if the
settlement is approved in advance by the Company) actually incurred by or on
behalf of the Indemnitee in connection with a Proceeding 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 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. 

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                    (b)     
Proceedings by or in the Right of the Company. To the fullest extent
permitted by law, the Company shall indemnify the Indemnitee against all loss
and liability suffered and Expenses, judgments, fines, penalties or amounts paid
in settlement, actually incurred by or on behalf of 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. 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
stockholders 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 Articles of
Incorporation, the Company’s Bylaws or similar organizational documents, or by
statute. 

                    (d)      Acknowledgement.
To the fullest extent permitted by law, the Company’s assumption of the defense
of any Proceeding above will constitute an irrevocable acknowledgement by the
Company that any loss and liability suffered by Indemnitee and Expenses paid in
settlement by or for the account of Indemnitee incurred in connection therewith
are indemnifiable by the Company subject to Sections 3(a) and 3(b) and Section 4
of this Agreement. 

          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:

                    (a)      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 the State of Nevada or any other state or federal
regulatory agency having jurisdiction over the Company; 

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                    (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, but such indemnification or
advancement of Expenses may be provided by the Company in specific cases if the
Company’s board of directors (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 final 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 on the Indemnitee’s behalf;
or 

                    (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 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
thirty (30) 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. 

         6.      Advancement
and Repayment of Expenses. Subject to Section 4 hereof, to the fullest
extent permitted by law, the Expenses incurred by Indemnitee in investigating,
appearing at, participating in or defending any Proceeding shall be paid by the
Company in advance of the final disposition of such Proceeding as soon as
reasonably practicable, but in no event later than 30 days after receipt by the
Company of a statement or statements from Indemnitee requesting such advance or
advances from time to time. In determining whether or not to make an advance
hereunder, the ability of the Indemnitee to repay shall not be a factor. Any
advances shall be unsecured and without interest. The Indemnitee hereby
undertakes to repay any amounts advanced (without interest) to the extent that
it is ultimately determined by a court of competent jurisdiction that Indemnitee is not entitled to be indemnified
by the Company in respect thereof. No other form of undertaking shall be
required of Indemnitee other than the execution of this Agreement. 

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          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 her 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 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 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. 

                    (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 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 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 counsel in any such Proceeding at
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. 

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          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. 

          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 Articles of
Incorporation or Bylaws, the vote of the Company’s stockholders or disinterested
directors, other agreements or otherwise, both as to action in the Indemnittee’s
official capacity and action in another capacity while occupying the
Indemnitee’s 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 Nevada 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 Nevada 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. 

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          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 under applicable law, such provisions shall not be
effective unless and until the Company’s Articles of Incorporation or similar
organizational documents 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. 

          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 New York, 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.    Notices.
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. 

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

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

	COMPANY: 	INDEMNITEE: 
	 	 
	  	  
	JINHAO MOTOR COMPANY 	  
	 	 
	  	  
	  	  
	By: /s/ Tsoi Chak
      Shing                     
      	/s/Stanley Leung 
	 	 
	       Tsoi Chak Shing
    	Address: DBS Bank Ltd 
	 	 
	  	Private Equity 
	 	 
	Address: Dawang Industrial Park 	22/F the Center 
	 	 
	Zhaoqing Hi-Tech Exploit Area 	99 Queen’s Road Central 
	 	 
	Guangdong Province, PRC 	Hong Kong 


JINHAO MOTOR COMPANY – DIRECTOR INDEMNIFICATION AGREEMENT (DBS)
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