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Unassociated Document

    CYBERDEFENDER
CORPORATION

    

    INDEMNIFICATION
AGREEMENT

    

    This
Indemnification Agreement (“Agreement”) is made effective as of January 19, 2010
by and between CyberDefender Corporation, a
California corporation (the “Company”), and Luc Vanhal
(“Indemnitee”).

    

    WHEREAS, the Company desires
to attract and retain the services of highly qualified individuals, such as
Indemnitee, to serve as officers and directors of the Company and to indemnify
its officers and directors so as to provide them with the maximum protection
permitted by law; and

    

    WHEREAS, the Company is
required to enter into an indemnification agreement with the Indemnitee pursuant
to that certain Media and Marketing Services Agreement (the “Media Services
Agreement”), dated as of March 24, 2009, between the Company and GR Match,
LLC;

    

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

    

    1. Indemnification.

    

    (a) Third Party Proceedings. The
Company shall indemnify Indemnitee if Indemnitee is or was a party to or witness
or other participant in or is threatened to be made a party to or witness or
other participant in any threatened, pending or completed action or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the Company) by reason of the fact that Indemnitee is or
was a director, officer, employee or agent of the Company, or any subsidiary of
the Company, by reason of any action or inaction on the part of Indemnitee while
an officer or director or by reason of the fact that Indemnitee is 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,
against expenses (including attorneys’ fees, expert fees,
other professional fees and court costs, and fees and expenses incurred in
connection with any appeals) (“Expenses”), judgments (including punitive and
exemplary damages), penalties, fines and amounts paid in settlement (if such
settlement is approved in advance by the Company, which approval shall not be
unreasonably withheld) actually and reasonably incurred by Indemnitee in
connection with such action or proceeding if Indemnitee acted in good faith and
in a manner 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 action or proceeding by judgment, order, settlement, conviction, or upon
a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that (i) Indemnitee did not act in good faith,
(ii) Indemnitee did not act in a manner which Indemnitee reasonably
believed to be in the best interests of the Company, or (iii) with respect
to any criminal action or proceeding, Indemnitee had reasonable cause to believe
that Indemnitee’s conduct was unlawful.

    

    (b) Proceedings By or in the Right of
the Company. The Company shall indemnify Indemnitee if Indemnitee was or
is a party to or witness or other participant in or is threatened to be made a
party to or witness or other participant in any threatened, pending or completed
action or proceeding by or in the right of the Company or any subsidiary of the
Company to procure a judgment in its favor by reason of the fact that Indemnitee
is or was a director, officer, employee or agent of the Company, or any
subsidiary of the Company, by reason of any action or inaction on the part of
Indemnitee while an officer or director or by reason of the fact that Indemnitee
is 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, against Expenses and, to the fullest extent permitted by law,
amounts paid in settlement, in each case to the extent actually and reasonably
incurred by Indemnitee in connection with the defense or settlement of such
action or proceeding if Indemnitee acted in good faith and in a manner
Indemnitee reasonably believed to be in the best interests of the Company and
its shareholders, except that no indemnification shall be made in respect of any
claim, issue or matter as to which Indemnitee shall have been adjudged to be
liable to the Company in the performance of Indemnitee’s duty to the Company and
its shareholders unless and only to the extent that the court in which such
action or proceeding is or was pending shall determine upon application that, in
view of all the circumstances of the case, Indemnitee is fairly and reasonably
entitled to indemnity for expenses and then only to the extent that the court
shall determine.

    

    2. Expenses; Indemnification
Procedure.

    

    (a) Advancement of Expenses. The
Company shall advance all Expenses incurred by Indemnitee in connection with the
investigation, defense, settlement or appeal of any civil or criminal action or
proceeding referenced in Section 1(a) or (b) hereof (but not amounts
actually paid in settlement of any such action or proceeding). Indemnitee hereby
undertakes promptly to repay such amounts advanced only if, and to the extent
that, it shall ultimately be determined by the court (as to which all rights of
appeal therefrom have been exhausted or lapsed) that Indemnitee is not entitled
to be indemnified by the Company as authorized hereby. Indemnitee’s obligation
to repay the Company for any such amounts shall be unsecured
and no interest shall be charged thereon. The advances to be made hereunder
shall be paid by the Company to Indemnitee within five (5) days following
delivery of a written request therefor by Indemnitee to the
Company.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    (b) Notice/Cooperation by
Indemnitee. Indemnitee shall give the Company notice in writing as soon
as practicable of any claim made against Indemnitee for which indemnification
will or could be sought under this Agreement; provided, however, that no failure
to provide or delay in giving such notice shall be deemed to reduce or limit the
Company’s obligations under this Agreement unless (and only to the extent) such
failure or delay materially prejudices the Company. Notice to the Company shall
be directed to the Chief Executive Officer of the Company at the address shown
on the signature page of this Agreement (or such other address as the Company
shall designate in writing to Indemnitee). Notice shall be deemed received three
business days after the date postmarked if sent by domestic certified or
registered mail, properly addressed; otherwise notice shall be deemed received
when such notice shall actually be received by the Company. In addition,
Indemnitee shall give the Company such information and cooperation as it may
reasonably require and as shall be within Indemnitee’s reasonable
control.

    

    (c) Procedure. Any
indemnification provided for in Section 1 shall be paid no later than five
(5) days after receipt of the written request of Indemnitee. If a claim
under this Agreement, under any statute, or under any provision of the Company’s
Articles of Incorporation or Bylaws providing for indemnification, is not paid
in full by the Company within five (5) days after a written request for
payment thereof has first been received by the Company, Indemnitee may, but need
not, at any time thereafter bring an action against the Company to recover the
unpaid amount of the claim and, subject to Section 14 of this Agreement,
Indemnitee shall also be entitled to be paid for the Expenses of bringing such
action irrespective of the ultimate determination as to Indemnitee’s entitlement
to indemnification. It shall be a defense to any such action that Indemnitee has
not met the standards of conduct which make it permissible under applicable law
for the Company to indemnify Indemnitee for the amount claimed, but the burden
of proving such defense shall be on the Company, and Indemnitee shall be
entitled to receive interim payments of Expenses pursuant to Subsection 2(a)
unless and until such defense may be finally adjudicated by court order or
judgment from which no further right of appeal exists. It is the parties’
intention that if the Company contests Indemnitee’s right to indemnification,
the question of Indemnitee’s right to indemnification shall be for the court to
decide, and neither the failure of the Company (including its Board of
Directors, any committee or subgroup of the Board of Directors, independent
legal counsel, or its shareholders) to have made a determination that
indemnification of Indemnitee is proper in the circumstances because Indemnitee
has met the applicable standard of conduct required by applicable law, nor an
actual determination by the Company (including its Board of Directors, any
committee or subgroup of the Board of Directors, independent legal counsel, or
its shareholders) that Indemnitee has not met such applicable standard of
conduct, shall create a presumption that Indemnitee has or has not met the
applicable standard of conduct.

    

    (d) Notice to Insurers. If, at
the time of the receipt of a notice of a claim pursuant to Section 2(b)
hereof, the Company has director and officer liability insurance in effect, the
Company shall give notice of such claim to the insurers under any applicable
policies in accordance with the procedures set forth in those 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 claim in accordance with the terms of such policies.

    

    (e) Selection of Counsel. In the
event the Company shall be obligated under Section 2(a) hereof to pay the
expenses of any proceeding against Indemnitee, the Company, if appropriate,
shall be entitled to assume the defense of such proceeding, with counsel
approved in writing by Indemnitee, which approval shall not be unreasonably
withheld, upon the delivery to Indemnitee of written notice of its election so
to do. After delivery of such notice, written approval of such counsel by
Indemnitee and the retention of such counsel by the Company, the Company will
not be liable to Indemnitee under this Agreement for any fees of counsel
subsequently incurred by Indemnitee with respect to the same proceeding (other
than the fees of Indemnitee’s counsel in connection with transitioning the
defense of such proceeding to counsel employed by the Company), provided that
(i) Indemnitee shall have the right to employ his counsel in any such
proceeding at Indemnitee’s expense; and (ii) if (A) the employment of
counsel by Indemnitee has been previously authorized by the Company,
(B) Indemnitee shall have reasonably concluded that there may be a conflict
of interest between the Company and Indemnitee in the conduct of any such
defense or (C) the Company shall not, in fact, have employed or shall have
ceased to employ counsel in the defense of such proceeding, then the fees and
expenses of Indemnitee’s counsel shall be at the expense of the Company. Neither
the Company nor the Indemnitee will settle any matter the subject of this
Agreement without the written consent of the other, which will not be
unreasonably withheld.

    

    3. Additional Indemnification Rights;
Nonexclusivity.

    

    (a) Scope. Subject to
Section 9 of this Agreement and any other provision of this Agreement that
expressly prohibits, limits or conditions indemnification by the Company, the
Company hereby agrees to indemnify the Indemnitee to the fullest extent
permitted by law, notwithstanding that such indemnification is not specifically
authorized by the other provisions of this Agreement, the Company’s Articles of
Incorporation, the Company’s Bylaws or by statute. In the event of any change,
after the date of this Agreement, in any applicable law, statute or rule which
expands the right of a California corporation to indemnify a member of its board
of directors or an officer, such changes shall be, ipso facto, within the
purview of Indemnitee’s rights and Company’s obligations, under this Agreement.
In the event of any change in any applicable law, statute or rule which narrows
the right of a California corporation to indemnify a member of its Board of
Directors or an 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.

    

    (b) Nonexclusivity. The
indemnification provided by this Agreement shall not be deemed exclusive of any
rights to which Indemnitee may be entitled under the Company’s Articles of
Incorporation, its Bylaws, any agreement, any vote of shareholders or
disinterested directors, the General Corporation Law of the State of California,
or otherwise, both as to action in Indemnitee’s official capacity and as to
action in another capacity while holding such office. The indemnification
provided under this Agreement shall continue as to Indemnitee for any action
taken or not taken while serving in an indemnified capacity even though he may
have ceased to serve in such capacity at the time of any action or other covered
proceeding.

    

    
      
         

      

      
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    4. Partial Indemnification. If
Indemnitee is entitled under any provision of this Agreement to indemnification
by the Company for some or a portion of the Expenses, judgments, fines or
penalties actually or reasonably incurred by him in the investigation, defense,
appeal or settlement of any civil or criminal action or proceeding, but not,
however, for the total amount thereof, the Company shall nevertheless indemnify
Indemnitee for the portion of such Expenses, judgments, fines or penalties to
which Indemnitee is entitled.

    

    5. Contribution. If the
indemnification provided for in this Agreement is unavailable to Indemnitee for
any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall
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, in
such proportion as is deemed fair and reasonable in light of all circumstances
of such action by the court before which such action was brought 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 cause to such action;
and/or (ii) the relative fault of the Company (and its other directors,
officers, employees and agents) and Indemnitee in connection with such event(s)
and/or transaction(s). Indemnitee’s right to contribution under this
Section 5 shall be determined in accordance with, pursuant to and in the
same manner as, the provisions in Section 1 hereof relating to Indemnitee’s
right to indemnification under this Agreement.

    

    6. Mutual Acknowledgment. Both
the Company and 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. Indemnitee understands
and acknowledges that the Company 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 Indemnitee.

    

    7. Directors’ and Officers’ Liability
Insurance. The Company agrees to maintain director’s and officer’s
liability insurance to the extent required pursuant to Section 9 of the Media
Services Agreement.  In all policies of directors’ and officers’
liability insurance, Indemnitee shall be named as an insured in such a manner as
to provide Indemnitee the same rights and benefits as are accorded to the most
favorably insured of the Company’s directors or officers if Indemnitee is a
director; or of the Company’s officers, if Indemnitee is an officer; or of the
Company’s key employees, if Indemnitee is not an officer or director but is a
key employee.

    

    8. 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. If any term or
provision of the Agreement is determined to be invalid, illegal or unenforceable
in whole or in part for any reason, such illegal, unenforceable, or invalid
provisions or part thereof shall be stricken from this Agreement, and such
provision shall not affect the legality, enforceability, or validity of the
remainder of this Agreement. If any provision or part of this Agreement is
stricken in accordance with the provisions of this section, then this stricken
provision shall be replaced, to the extent possible, with a legal, enforceable,
and valid provision that is as similar in tenor to the stricken provision as is
legally possible.

    

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

    

    (a) Excluded Acts. To indemnify
Indemnitee for (i) any acts or omissions or transactions from which a
director may not be relieved of liability under the California Corporations
Code; or (ii) for breach of any duty to the Company or its shareholders as
to circumstances in which indemnity is expressly prohibited by Section 317
of the California Corporations Code; or

    

    (b) Claims Initiated by
Indemnitee. To indemnify or advance Expenses to Indemnitee with respect
to proceedings or claims initiated or brought voluntarily by Indemnitee and not
by way of defense, except with respect to proceedings or claims brought to
establish or enforce a right to indemnification under this Agreement or under
any other statute or law or otherwise as required under Section 317 of the
California Corporations Code, but such indemnification or advancement of
Expenses may be provided by the Company in specific cases if the Board of
Directors has approved the initiation or bringing of such proceeding or claim;
or

    

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

    

    (d) Insured Claims. To indemnify
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 Indemnitee by an insurance
carrier under a policy of directors’ and officers’ liability insurance
maintained by the Company; or

    

    
      
         

      

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

    

    10. Effectiveness of Agreement.
To the extent that the indemnification permitted under the terms of certain
provisions of this Agreement exceeds the scope of the indemnification provided
for in the California Corporations Code, such provisions shall not be effective
unless and until the Company’s Articles of Incorporation authorize such
additional rights of indemnification. In all other respects, the balance of this
Agreement shall be effective as of the date set forth on the first page and may
apply to acts or omissions of Indemnitee which occurred prior to such date if
Indemnitee was an officer, director, employee or other agent of the Company, or
was serving at the request of the Company as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, at the time such act or omission occurred. All of the Company’s
obligations under this Agreement will continue as long as Indemnitee is subject
to any actual or possible matter which is the subject of this Agreement,
notwithstanding Indemnitee’s termination of service as an officer or director of
the Company.

    

    11. Construction of Certain
Phrases.

    

    (a) For
purposes of this Agreement, references to the “Company” shall include, in
addition to the resulting corporation, any constituent corporation (including
any constituent of a constituent) absorbed in a consolidation or merger which,
if its separate existence had continued, would have had power and authority to
indemnify its directors, officers, employees or agents, so that if Indemnitee is
or was a director, officer, employee or agent of such constituent corporation,
or is or was serving at the request of such constituent corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, Indemnitee shall stand in the same position
under the provisions of this Agreement with respect to the resulting or
surviving corporation as Indemnitee would have with respect to such constituent
corporation if its separate existence had continued.

    

    (b) For
purposes of this Agreement, references to “other enterprises” shall include
employee benefit plans; references to “fines” shall include any excise taxes
assessed on Indemnitee with respect to an employee benefit plan; and references
to “serving at the request of the Company” shall include any service as a
director, officer, employee or agent of the Company which imposes duties on, or
involves services by, such director, officer, employee or agent with respect to
an employee benefit plan, its participants, or beneficiaries.

    

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

    

    13. Successors and Assigns. This
Agreement shall be binding upon the Company and its successors (whether direct
or indirect, voluntary or involuntary by purchase, merger or otherwise) and
assigns, and shall inure to the benefit of Indemnitee and Indemnitee’s estate,
heirs, legal representatives and assigns. Any such assumption will not release
the Company from its obligations under this Agreement.

    

    14. Attorneys’ Fees. In the event
that any action is instituted or any mediation is commenced by Indemnitee under
this Agreement to enforce or interpret any of the terms hereof, Indemnitee shall
be entitled to be paid all costs and expenses, including reasonable attorneys’
fees, incurred by Indemnitee with respect to such action or mediation, unless as
a part of such action or mediation, the court of competent jurisdiction or
mediator determines (as to which all rights of appeal therefrom have been
exhausted or lapsed) that each of the material assertions made by Indemnitee as
a basis for such action or mediation was not made in good faith or was
frivolous. In the event of an action instituted or mediation commenced by or in
the name of the Company under this Agreement or to enforce or interpret any of
the terms of this Agreement, Indemnitee shall be entitled to be paid all costs
and expenses, including attorneys’ fees, incurred by Indemnitee in defense of
such action or mediation (including with respect to Indemnitee’s counterclaims
and cross-claims made in such action or mediation), unless as a part of such
action or mediation the court or mediator determines (as to which all rights of
appeal therefrom have been exhausted or lapsed) that each of Indemnitee’s
material defenses to such action or mediation was made in bad faith or were
frivolous.

    

    15. Notice. All notices,
requests, demands and other communications under this Agreement shall be in
writing and shall be deemed duly given (i) if delivered by hand and
receipted for by the party addressee, on the date of such receipt, or
(ii) if mailed by domestic certified or registered mail with postage
prepaid, on the third business day after the date postmarked, or (iii) if
delivered by a nationally recognized overnight courier service, such as FedEx or
DHL, on the date of delivery. Addresses for notice to either party are as shown
on the signature page of this Agreement, or as subsequently modified by written
notice.

    

    16. Consent to Jurisdiction,
Venue.

    

    A dispute
or claim arising out of or relating to this Agreement (“Dispute”) shall be
resolved in the following manner:

    

    (a) A
Dispute may be submitted to JAMS for non-binding mediation either prior to or at
the same time that any civil action with respect to such Dispute is commenced.
Either party may commence mediation by providing to JAMS and the other party a
written request for mediation, setting forth the subject of the dispute and the
relief requested. The parties will cooperate with JAMS and with one another in
selecting a mediator from JAMS panel of neutrals, and in scheduling the
mediation proceedings. The parties covenant that they will participate in the
mediation in good faith. All offers, promises, conduct and statements, whether
oral or written, made in the course of the mediation by any of the parties,
their agents, employees, experts and attorneys, and by the mediator and any JAMS
employees, are confidential, privileged and inadmissible for any purpose,
including impeachment, in any litigation or other proceeding involving the
parties, provided that evidence that is otherwise admissible or discoverable
shall not be rendered inadmissible or non-discoverable as a result of its use in
the mediation. The provisions of this Section may be enforced by any court of
competent jurisdiction.

    

    
      
         

      

      
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    (b) Any
civil action with respect to a Dispute may be brought only in the United States
District Court for the Central District of California (Western Division) or in
any court of the State of California sitting in the City of Los Angeles.
Each party waives, to the fullest extent permitted by law, any objection which
such party may now or later have to the laying of venue of any legal action or
proceeding arising out of or relating to this Agreement as described in this
Section, and any claim that any action or proceeding brought in any such court
has been brought in an inconvenient forum. Both parties hereby authorize and
accept service of process sufficient for personal jurisdiction in any action
against such party as contemplated by this Section by registered or certified
mail, return receipt requested, postage prepaid, to the party’s address for the
giving of notices as set forth in this Agreement. Any final judgment rendered
against either party in any action or proceeding shall be conclusive as to the
subject of such final judgment and may be enforced in other jurisdictions in any
manner provided by law.

    

    17. Amendments. Any repeal or
modification of Company’s Articles of Incorporation or Bylaws or any repeal or
modification of the relevant provisions of any applicable law will not in any
way diminish any of Indemnitee’s rights or the Company’s obligations under this
Agreement. This Agreement cannot be amended except with the written consent of
the Company and Indemnitee. No waiver of any provision of this Agreement shall
be binding on either party unless it is in writing and signed by both the
Company and Indemnitee.

    

    18. Choice of Law. This Agreement
shall be governed by and its provisions construed in accordance with the laws of
the State of California as applied to contracts between California residents
entered into and to be performed entirely within California.

    

    19. Subrogation. In the event of
payment under this Agreement, the Company shall be subrogated to the extent of
such payment to all of the rights of recovery of Indemnitee, who shall execute
all documents required and shall do all acts that may be necessary to secure
such rights and to enable the Company effectively to bring suit to enforce such
rights.

    

    20. Integration and Entire
Agreement. This Agreement (i) sets forth the entire understanding
between the parties in respect to the subject matter hereof,
(ii) supersedes all previous written or oral negotiations, commitments,
understandings, and agreements relating to the subject matter hereof and
(iii) merges all prior and contemporaneous discussion between the
parties.

    

    [SIGNATURES
FOLLOW]

     

    
      
         

      

      
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    IN WITNESS WHEREOF, the
parties hereto have executed this Indemnification Agreement as of the date first
above written.

     

    
      
        	 	CyberDefender
      Corporation	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/
      Gary Guseinov	 
	 	 	Gary
      Guseinov	 
	 	Its:	Chief
      Executive Officer	 
	 	 	 	 
	 	Address:  	617
      West 7th
      Street, Suite 401	 
	 	 	Los
      Angeles, CA 90017	 

      

    

                  

    
      
        	AGREED
      TO AND ACCEPTED BY INDEMNITEE:
	 	 	 	 	 
	
                /s/
      Luc Vanhal

              	 	 	
                 

              	 
	
                Luc
      Vanhal

              	 	 	
                 

              	 

      

    

               

    
      
        	Address:	
                c/o
      Guthy-Renker

                3340
      Ocean Park Blvd.

                Suite
      3000

                Santa
      Monica,
CA 90405Labor
Contract

     

    between
and by

     

    Party A:
Beijing Telestone
Technology Company Ltd.

    and

    Party B:
________________________________

    

    Execution
Date: _____________, ________

    

    
      Printed
by HR Dept. of Beijing Telestone Technology Company Ltd.

    

    

    
      Version:
2005/06

    
 

    
      
         

      

      
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      Party A:
Beijing Telestone
Technology Company Ltd.   Authorized Representative:
_________

    

    
      Address:
6F, Saiou Scientific
Building, No.5 Haiying Road, Fengtai, Beijing

    

    

    
      Party B:
(name) __________________ Gender: _______________

    

    
      ID No.:
______________________________________________________

    

    
      Date of
Birth: _________

    

    
      Employed
by Party A for a term commencing on _____________

    

    
      Residence:
__________________________________________________

    

    
      Hukou:
______________________________________________________

    

    
      Zip-code:
_______________

    

    

    
      Pursuant
to the Labor Law of the
People’s Republic of China and other applicable laws and regulations,
Party A and Party B (“the Parties”) hereto, on a basis of mutual negotiation,
agree to sign and be bound by, the following terms and conditions as stated in
this Contract:

    

     

    I.                   Term

    
      	
              Article
      I.

            	
              This
      Contract will be effective for a fixed term commencing on _______ and
      expiring on _______, in which Probation of _____ months is
      included.

            

    

     

    II.                   Scope
of Work

    
      	
              Article
      II.

            	
              Party
      B agrees that it will work to the extent as described in the Post Manual of Party
      A and as required by Party
A.

            

    

    
      	
              Article
      III.

            	
              Party
      B shall in a timely manner perform the duty (task) in compliance with
      quantity and quality as required by Party A. For detailed requirement, see
      the Post
      Manual.

            

    

     

    III.                   Working
Time & Compensation

    
      	
              Article
      IV.

            	
              Working
      Time. Party B will work for 8 hours per day and in total 40 hours per week
      in accordance with the policies and by-laws in relation to the working
      time made by Party A.

            

    

    
      	
              Article
      V.

            	
              Compensation.
      Party B will be entitled to the compensation and benefits in relation to
      its duties in accordance with the Compensation Distribution System made by
      Party A. The compensation provided by Party A to Party B is composed of
      Basic Salary, Post Wage and KPI Salary. That KPI Salary is about ___ % of
      the agreed total salary which Party B is entitled to. The Basic Salary
      equals to the Social Minimum Average Salary in the previous year announced
      by the Government in the jurisdiction where Party B
  works.

            

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    
      	
              Article
      VI.

            	
              Party
      A will, on the 7th day of each month, pay Party B the fixed salary
      (composed of Basic Salary and Post Wage) in relation to the previous month
      based on the actual working days by Party B, and on 22nd day each month,
      pay Party B the KPI Salary in relation to such previous month based on the
      actual performance by Party B. The KPIs include but not limited to result,
      quantity, quality and time in relation to the works by Party
      B.

            

    

    
      	
              Article
      VII.

            	
              Salary
      Notice & Confirmation. Party B’s salary baseline and adjustment will
      be subject to the Salary Notice under the Telestone Compensation
      Management Policy, before which Party A and Party B will have a
      face-to-face talk in relation to such baseline and adjustment. Such Notice
      will be delivered to Party B within five (5) days of such face-to-face
      talk in relation to post adjustment, and returned to Party A after signed
      by Party B, in which case such Notice with signature of Party B will be
      incorporated into this Contract as a Schedule hereto and have the same
      effect with this Contract.

            

    

    
      	
              Article
      VIII.

            	
              Complementary
      Provisions. In case of any proper compliance by Party B with or material
      violation by it of the national laws and regulations as well as the
      corporate policies and by-laws, Party A will adjust, including but not
      limited to increase, reduce, cease or even retrace, the Party B’s
      compensation based on any applicable national laws and regulations as well
      as the corporate policies and
by-laws.

            

    

     

    IV.                   Benefits

    
      	
              Article
      IX.

            	
              Social
      Insurance. Party A will apply for, open and maintain the Social Insurance
      for Party B if:

            

    

    a)              Party
A has completed the Industrial & Commercial Registration in the jurisdiction
where Party B is employed; and

    b)             Party
B was never entitled to social insurance when working in other
companies.

    
      	
               
      

            	
              In
      case of failure by it to apply for, open and maintain the Social Insurance
      due to causes incurred by Party B, Party A will provide neither such
      insurance nor any additional
reimbursement.

            

    

    
      	
              Article
      X.

            	
              Timing
      of Social Insurance. If Party B satisfies the conditions required for
      insurance application, opening and maintenance, the timing of Social
      Insurance will commence on the date on which Party B starts to work for
      Party A.

            

    

    
      	
              Article
      XI.

            	
              Coverage
      of Social Insurance. Party A will apply for, open and maintain the Social
      Insurance as required by the national laws and regulations as well as the
      local laws and regulations in the jurisdiction where Party B works, and
      make the contribution in relation to such Social Insurance on a
      period-by-period basis.

            

    

    
      	
              Article
      XII.

            	
              In
      case of insufficient P/Os or any changes to the market, Party A shall have
      the right to make Party B off-duty, and Party B shall agree to such
      off-duty, Provided
      That such off-duty shall not be over one (1) year. In case of
      continuous off-duty by Party B reaching one (1) year, either party may
      terminate this Contract without any liabilities for breach incurred and
      any indemnification paid. During such off-duty, Party A shall pay Party B
      a minimum salary no less than the local Social Minimum Average Salary
      Standard.

            

    

    
      	
              Article
      XIII.

            	
              Training.
      Party A shall provide to Party B trainings in relation to ethics,
      business, technology, labor safety and discipline, and Party A’s policies
      and by-laws.

            

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    V.                   Labor
Discipline

    
      	
              Article
      XIV.

            	
              Party
      A may, by taking into account the requirement in relation to operating and
      management, formulate and amend any corporate policies and by-laws in
      accordance with the national and local laws and regulations, and make
      these policies and by-laws open, express and available to employees. Party
      B shall comply with the forgoing policies and
  By-laws.

            

    

    In case
of any violation by Party B of the forgoing policies and By-laws, Party A will
have the right to give Party B any punishment as described in any corporate
policies and By-laws, and even terminate this Contract.

    
      	
              Article
      XV.

            	
              Except
      for compliance by it with the corporate policies and By-laws in relation
      to labor discipline, Party B shall also comply with the provisions in
      relation to labor safety and sanitation, production process, operational
      procedures and codes and the professional ethics, and in a proactive
      manner participate in the training regarding professional ethics and
      management system organized by Party A and improve its own professional
      competence.

            

    

    

    
      VI.           
Change
& Termination

    

    
      	
              Article
      XVI.

            	
              Change
      to this Contract

            

    

    
      	
               
      

            	
              a)

            	
              In
      case of failure by the Parties to perform this Contract arising from or
      incurred by any material change to the laws, administrative regulations
      and corporate policies and By-laws which are adopted as the basis for
      execution of this Contract, the Parties shall make any necessary change to
      this Contract and in a timely manner proceed with the procedures for that
      change.

            

    

    
      	
               
      

            	
              b)

            	
              In
      case of failure by the Parties to perform this Contract arising from or
      incurred by any material change to the circumstance upon which this
      Contract is executed, the Parties may conclude any change to this Contract
      by negotiation in a good faith.

            

    

    
      	
              Article
      XVII.

            	
              Either
      party proposing any change to this Contract shall notify the other party
      by a written notice in relation to such proposed change. That party
      receiving such notice shall give a reply in writing to the notifying party
      within fifteen (15) days (including the fifteenth day) of reception of
      such notice. No reply within fifteen (15) days delivered shall be deemed
      as consent to that change.

            

    

    
      	
              Article
      XVIII.

            	
              Party
      A may immediately terminate this Contract without any indemnification paid
      if Party B:

            

    

    
      	
               
      

            	
              a)

            	
              is
      proved to be incompetent for the recruitment conditions during the
      Probation;

            

    

    
      	
               
      

            	
              b)

            	
              makes
      any material breach of labor discipline or Party A’s corporate policies or
      By-laws;

            

    

    
      	
               
      

            	
              c)

            	
              makes
      any serious negligence and malpractice which causes any great loss or
      damage to Party A;

            

    

    
      	
               
      

            	
              d)

            	
              fails
      to provide to Party A any true certification in relation to its ID,
      education, employment experience and professional skills etc as required
      by this Contract;

            

    

    
      	
               
      

            	
              e)

            	
              is
      convicted of offence against criminal laws;
or

            

    

    
      	
               
      

            	
              f)

            	
              causes
      other circumstance as designated by Party
A.

            

    

    
      	
              Article
      XIX.

            	
              Party
      A may terminate this Contract by a 30 days written notice to Party B if
      Party B:

            

    

    
      	
               
      

            	
              a)

            	
              is
      ill, or injured due to any reason other than that in relation to its
      duties, and is incompetent for its original duties or other duties
      separately appointed by Party A upon expiration of Medical Treatment
      Period in relation to such illness or
injury;

            

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              b)

            	
              is
      incompetent for the pre-defined duties, or fails to satisfy the
      requirement by Party A in respect of abilities and performance, and after
      trained or with other appointment granted, remain incompetent;
      or

            

    

    
      	
               
      

            	
              c)

            	
              fails
      to conclude an agreement with Party A in case of occurrence of any
      material change to the circumstance upon which this Contract is
      executed.

            

    

    
      	
              Article
      XX.

            	
              If
      it is or become insolvent, suffers or permits the organization to the
      extent as required by laws, or has ceased to be a going concern, Party A
      may terminate this Contract.

            

    

    
      	
              Article
      XXI.

            	
              Party
      A shall not make any termination of this Contract under Article XIX and XX
      if Party B:

            

    

    
      	
               
      

            	
              a)

            	
              is
      proved to wholly or partially be incapable to perform its duties due to
      occupational diseases or injury it suffers
from;

            

    

    
      	
               
      

            	
              b)

            	
              is
      incapable to perform its duties due to illness or injury other than
      occupational injury;

            

    

    
      	
               
      

            	
              c)

            	
              is
      pregnant, perinatal or lactating;

            

    

    
      	
               
      

            	
              d)

            	
              work
      for a initial period less than three (3) years since it become a veteran,
      retired serviceman transferred to civil area, or worker transferred from
      farmer due to requisition;

            

    

    
      	
               
      

            	
              e)

            	
              is
      in military service;

            

    

    
      	
               
      

            	
              f)

            	
              acts
      as the representative of the workers for collective negotiation with a
      term for five (5) years commencing on the date on which it is elected as
      that representative when it is employed by Party A under a labor contract;
      or

            

    

    
      	
               
      

            	
              g)

            	
              other
      circumstances as set forth in laws and administrative
      regulations.

            

    

    
      	
              Article
      XXII.

            	
              Except
      for occurrence that it suffers from illness or injury, Party B shall
      terminate this Contract by a thirty (30) days notice in writing to Party
      A, and upon consent of Party A, proceed with any required procedures in
      relation to severance within 30 days of consent by Party A unless the economic loss
      or damage to Party A caused by Party B has not been proper handled, or
      Party B has not borne the liabilities of breach under this Contract and
      Schedules attached hereto, or other pending issues are being
      reviewed.

            

    

    In case
of failure by Party B to deliver to Party A a 30-day notice under Article XXII
for termination, Party A may refuse to proceed with the procedures in relation
to such termination.

    
      	
              Article
      XXIII.

            	
              In
      case of occurrence of any of the following circumstances, Party B may at
      any time terminate this Contract by notice to Party
  A:

            

    

    
      	
              a)

            	
              Party
      B is in the probation;

            

    

    
      	
              b)

            	
              Party
      A forces Party B to work by violence, threat, detention or illegal
      restrictions on individual freedom;

            

    

    
      	
              c)

            	
              Party
      A fails to pay the compensation agreed
  hereunder,

            

    

    
      	
              Article
      XXIV.

            	
              Party
      A may, by taking into account Party B’s capacity, health and the corporate
      business and operating, at any time adjust or transfer Party B’s post or
      duty in the Company, in which case Party B shall be subject to such
      adjustment or transfer, including but not limited to adjustment or
      transfer as set forth in the Post Manual and
      the Change Management
      Provisions, secondment to the entities or affiliated entities
      controlled by or under common control with Party A, assignment to other
      entities designated by Party A or even termination of this Contract. In
      case of any change to Party A due to the forgoing adjustment or transfer,
      the employment established between Party B and any third party designated
      by Party A in relation to such adjustment or transfer shall be deemed as
      termination of this Contract other than annulment hereof. Party B
      undertakes that it will not make any claim against Party A for any rights
      or indemnity by filing any action or proceedings in any organization,
      arbitration courts, administrative agents, governmental authorities or
      courts as set forth by labor and employment laws and regulations due to
      the forgoing changes.

            

    

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              Salary
      Adjustment. If Party B is promoted or demoted by Party A after taking into
      account its operating, the salary which Party B is entitled to will be
      adjusted accordingly. Party A may, by taking into account the assessment
      results for review of Party B’s periodic performance, increase or reduce
      its salary. The change to KPI salary will be subject to change to Post
      Wage, in which case the total Salary will be also changed accordingly. No
      dissent or objection submitted by Party B to any competent labor
      arbitration authority after it receives the changed compensation shall be
      deemed as confirmation by it of such changed compensation as the
      Compensation receivable by it.

            

    

     

    VII.                   Renewal
& Termination

    
      	
              Article
      XXV.

            	
              In
      case of occurrence of any of the following circumstances, this Contract
      shall be terminated:

            

    

    
      	
               
      

            	
              a)

            	
              this
      Contract expires;

            

    

    
      	
               
      

            	
              b)

            	
              the
      conditions for termination agreed
occurs;

            

    

    
      	
               
      

            	
              c)

            	
              Party
      B shall be in line with the legal conditions for
    retirement;

            

    

    
      	
               
      

            	
              d)

            	
              Party
      B is dead or held by court as missing or dead;
  or

            

    

    
      	
               
      

            	
              e)

            	
              Party
      A is bankrupt or dismissed as required by laws and
      regulations.

            

    

    
      	
              Article
      XXVI.

            	
              In
      case of occurrence of any of the following cases, this Contract shall be
      renewed, and the procedures in relation to that renewal shall be in a
      timely manner proceeded with:

            

    

    
      	
               
      

            	
              a)

            	
              Parties
      agree to renew this Contract; or

            

    

    
      	
               
      

            	
              b)

            	
              Party
      A, upon request by Party B for renewal of this Contract, agrees to that
      renewal if any actual employment without written employment agreement is
      established between the parities after the conditions for termination
      occurs.

            

    

    In case
of occurrence of the circumstance as set forth in the Article XXVI b), where the
Parties fail to make an agreement on the term of renewal, the term to be renewed
will be for three (3) months; if Party B satisfies the conditions applicable for
Open-ended Labor Contract, Party A shall enter into an Open-ended Labor Contract
with Party B.

     

    VIII.                   Economic
Compensation & Indemnification

    
      	
              Article
      XXVII.

            	
              If
      it terminates this Contract by agreement with Party B, Party A may pay
      Party B an Economic Compensation calculated in terms of the Service Years
      by Party B in the Company multiplying the monthly fixed salary (Basic
      Salary plus Post Wage) in the previous month before termination (a monthly
      fixed salary per service year as Economic Compensation), in which case the
      part of Service Years less than one year will not be included for Economic
      Compensation to be calculated while the part thereof over six months s but
      less than one year (at most no more than 12 months) will be deemed as 1
      year.

            

    

    
      	
              Article
      XXVIII.

            	
              In
      case of termination by Party A of this Contract due to occurrence of any
      of the following cases, Party A may pay Party B an Economic Compensation
      calculated in terms of the Service Years by Party B in the Company
      multiplying the monthly fixed salary (Basic Salary plus Post Wage) in the
      previous month before termination (a monthly fixed salary per service year
      as Economic Compensation), in which case the part of Service Years less
      than 6 months will not be included for Economic Compensation to be
      calculated while the part thereof over 6 months but less than 1 year (at
      most no more than 12 months) will be deemed as 1
  year.

            

    

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              a)

            	
              Party
      B fails to perform its original duties or other duties appointed by Party
      A due to the illness or injury other than occupational
    injury;

            

    

    
      	
               
      

            	
              b)

            	
              Party
      A terminates this Contract since Party B is incompetent, and after trained
      or with other appointment granted, remain incompetent, for the appointed
      duties;

            

    

    
      	
               
      

            	
              c)

            	
              In
      case of failure by the parties in performance of this Contract due to any
      material change to the circumstance upon which this Contract is executed,
      the parties fails to conclude an agreement regarding change to this
      Contract; or

            

    

    
      	
               
      

            	
              d)

            	
              Party
      A has to initiate employee reduction caused by the insolvency, or
      reorganization, of it, or its ceasing to be a going
    concern.

            

    

    
      	
              Article
      XXIX.

            	
              The
      Economic Compensation payable by Party A to Party B shall not be less than
      the Social Minimum Average Salary in the region where Party B
      works.

            

    

    
      	
              Article
      XXX.

            	
              In
      case of failure by Party A to pay the Economic Compensation after
      termination hereof, except for the Economic Compensation required, Party A
      shall also pay Party B an Extra Economic Compensation of 50% of the
      forgoing Economic Compensation.

            

    

    
      	
              Article
      XXXI.

            	
              Party
      A shall reasonably indemnify Party B against any loss and damage arising
      from or incurred by termination by Party A of this Contract in violation
      of provisions hereunder or invalidity of this Contract held due to Party
      A’s reason.

            

    

    
      	
              Article
      XXXII.

            	
              If
      Party B receives the paid training provided by Party A, or is recruited by
      Party A with any additional cost and expense paid, the indemnification
      arising from termination by Party B of this Contract in violation of any
      provisions hereunder shall be enforced in accordance with the Training
      Agreement.

            

    

    
      	
              Article
      XXXIII.

            	
              Party
      B shall indemnify Party A against and hold it free from the following loss
      and damage arising from termination by Party B of this Contract in
      violation of any provisions hereunder or violation by Party B of any
      confidential provisions in relation to trade
  secret.

            

    

    The
parties agrees that a) in case of termination by it of this Contract in
violation of any provisions hereunder, Party B will indemnify Party A and hold
it free from:

    
      	
               
      

            	
              1)

            	
              any
      cost and expense directly paid by Party A in relation to recruitment of
      Party B;

            

    

    
      	
               
      

            	
              2)

            	
              the
      training fee paid by Party A for Party
B;

            

    

    
      	
               
      

            	
              3)

            	
              any
      direct economic loss or damage to Party A’s production, operating and
      running;

            

    

    
      	
               
      

            	
              4)

            	
              a
      penalty calculated in terms of the remaining service years multiplying the
      monthly salary, in which case the part of service years less than 1 year
      will not be included for penalty to be calculated while the part thereof
      over 6 months but less than 1 year (at most no more than 12 months) will
      be deemed as 1 year.

            

    

    and b) in
case of violation by Party B of any confidential provisions in relation to trade
secret, the indemnity required shall be subject to the provisions under the Non-disclosure
Agreement.

     

    IX.                   Supplementary
Provisions

    
      	
              Article
      XXXIV.

            	
              The
      Parties agree that the following terms and conditions are incorporated
      into this Contract: Party A shall have the right to make any proper
      amendment or adjustment to the documents listed in the Schedule attached
      hereto based on the corporate development and the changing market provided that the
      written document or email in relation to such amendment or adjustment is
      sufficiently served to and signed by Party B. That sufficient serving to
      and signature by Party B will bind it to such amendment or
      adjustment.

            

    

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    

    
      	
              Article
      XXXV.

            	
              Party
      B will be entitled to all insurance and benefits provided by Party A provided that Party B
      transfer its personal information record into the human resource service
      authority nominated by Party A for
keeping.

            

    

     

    X.                   Labor
Dispute & Miscellaneous

    
      	
              Article
      XXXVI.

            	
              The
      labor dispute arising from or in connection with performance of this
      Contract shall be settled by the parties through negotiation. If such
      negotiation fails, Party B may submit such dispute to any competent
      officers in the Company for mediation. If such mediation fails, either
      party claiming arbitration shall submit to the Beijing Shijingshan Labor
      Dispute Arbitration Committee an application in writing for
      arbitration.

            

    

    Either
party may directly submit such dispute to Shijingshan Labor Dispute Arbitration
Committee for arbitration. If either party refuses to accept the award by that
Committee, it may file a lawsuit in the People’s Court.

    
      	
              Article
      XXXVII.

            	
              The
      schedules attached to this Contract include and are formed by the
      Probation Agreement, Post Manual, Non-disclosure Agreement and Training
      Agreement and other corporate policies and
  by-laws

            

    

    Any
dispute in connection with this Contract shall be governed (including but not
limited to award or judgment by arbitration or lawsuit) by, and be construed and
understood in accordance with, the provisions under this Contract and Schedules
hereto. The Parties agree that the claims by either party shall not exceed the
restrictions on or in claimed rights or interests as set forth in the
Schedules.

    
      	
              Article
      XXXVIII.

            	
              Any
      matters uncovered in this Contract or any conflicts with the future
      national laws and regulations shall be enforced in accordance with any
      applicable laws and regulations Provided That the
      waiving party shall not repudiate, and undertakes, that it has voluntarily
      make any waiver which it ever expressly made, whether such conflict exists
      or not.

            

    

    
      	
              Article
      XXXIX.

            	
              This
      Contract is a non-format contract. The parties here to have made
      sufficient discussion and amendment prior to execution of this Contract.
      All representation by the parties contained in this Contract are true and
      express. Party B has in a careful manner read, and fully understood, the
      terms and condition hereunder as well as the corporate policies and
      by-laws current in effect. The parties are bound by the rights and
      obligations hereunder.

            

    

    
      	
              Article
      XL.

            	
              This
      Contract is executed in two copies with each party holding, each of which
      shall be an original, but all of which shall together constitute one and
      the same instrument.

            

    

    

    
      
        	
                Party
      A: (seal)

              	 
      	
                Party
      B: (seal)

              
	 
      	 
      	 
      
	
                Authorized
      representative:

              	 
      	 
      
	 
      	 
      	 
      
	
                (seal)

              	
                  

              	 
      

      

    

    Execution
Date:______

    
      
         

      

      
        8

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