Document:

Digital Video Systems, Inc. - Form 8-K

    Exhibit
      10.1

    DIGITAL
      VIDEO SYSTEMS, INC.

     

    INDEMNIFICATION
      AGREEMENT

     

    This
      Indemnification Agreement (the “Agreement”)
      is
      effective as of April 11, 2007 by and between Digital Video Systems, Inc.,
      a
      Delaware corporation (the “Company”)
      and____________ (the “Indemnitee”).

     

    WHEREAS,
      the Company desires to attract and retain the services of highly qualified
      individuals, such as Indemnitee, to serve the Company and its related
      entities;

     

    WHEREAS,
      in order to induce Indemnitee to continue to provide services to the Company,
      the Company wishes to provide for the indemnification of, and the advancement
      of
      expenses to, Indemnitee to the maximum extent permitted by law;

     

    WHEREAS,
      the Company and Indemnitee recognize the continued difficulty in obtaining
      liability insurance for the Company’s directors, officers, employees, agents and
      fiduciaries, the significant increases in the cost of such insurance and the
      general reductions in the coverage of such insurance;

     

    WHEREAS,
      the Company and Indemnitee further recognize the substantial increase in
      corporate litigation in general, subjecting directors, officers, employees,
      agents and fiduciaries to expensive litigation risks at the same time as the
      availability and coverage of liability insurance has been severely limited;
      and

     

    WHEREAS,
      in view of the considerations set forth above, the Company desires that
      Indemnitee shall be indemnified and advanced expenses by the Company as set
      forth herein;

     

    NOW,
      THEREFORE, the Company and the Indemnitee hereby agree as set forth
      below.

     

    1. Certain
      Definitions

     

    (a) “Change
      in Control”
shall
      mean an event that shall be deemed to have occurred if, on or after the date
      of
      this Agreement, (i) any “person”
(as
      such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act
      of
      1934, as amended (the “Exchange
      Act”),
      other
      than a trustee or other fiduciary holding securities under an employee benefit
      plan of the company acting in such capacity or a corporation owned directly
      or
      indirectly by the stockholders of the Company in substantially the same
      proportions as their ownership of stock of the Company, who becomes the
“beneficial
      owner”
(as
      defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
      securities of the Company representing more than 50% of the total voting power
      represented by the Company’s then outstanding Voting Securities, (ii) during any
      period of two consecutive years, individuals who at the beginning of such period
      constitute the Board of Directors of the Company and any new director whose
      election by the Board of 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Directors
      or nomination for election by the Company’s stockholders was approved by
      a vote
      of
      at least two thirds (2/3) of the directors then still in office who either
      were
      directors at the beginning of the period or whose election or nomination for
      election was previously so approved cease for any reason to constitute a
      majority thereof, or (iii) the stockholders of the Company approve a merger
      or
      consolidation of the Company with any other corporation other than a merger
      or
      consolidation which would result in the Voting Securities of the Company
      outstanding or immediately prior thereto continuing to represent (either
      remaining outstanding or by being converted into Voting Securities of the
      surviving entity) at least 80% of the total voting power represented by the
      Voting Securities of the Company or such surviving entity outstanding
      immediately after such merger or consolidation, or the stockholders of the
      Company approve a plan of complete liquidation of the Company or an agreement
      for the sale or disposition by the Company of (in one transaction or a series
      of
      related transactions) all or substantially all of the Company’s assets.

     

    (b) “Claim”
shall
      mean, with respect to a Covered Event, any threatened, pending or completed
      action, suit, proceeding or alternative dispute resolution mechanism, or any
      hearing, inquiry or investigation that Indemnitee in good faith believes might
      lead to the institution of any such action, suit, proceeding or alternative
      dispute resolution mechanism, whether civil, criminal, administrative,
      investigative or other. 

     

    (c) References
      to the “Company”
shall
      include, in addition to Digital Video Systems, Inc., any constituent corporation
      (including any constituent of a constituent) absorbed in a consolidation or
      merger to which Digital Video Systems, Inc. (or any of its wholly owned
      subsidiaries) is a party which, if its separate existence had continued, would
      have had power and authority to indemnify its directors, officers, employees,
      agents or fiduciaries, so that if Indemnitee is or was a director, officer,
      employee, agent or fiduciary of such constituent corporation, or is or was
      serving at the request of such constituent corporation as a director, officer,
      employee, agent or fiduciary of another corporation, partnership, joint venture,
      employee benefit plan, 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. 

     

    (d) “Covered
      Event”
shall
      mean any event or occurrence related to the fact that Indemnitee is or was
      a
      director, officer, employee, agent or fiduciary of the Company, or any
      subsidiary of the Company, or is or was serving at the request of the Company
      as
      a director, officer, employee, agent or fiduciary of another corporation,
      partnership, joint venture, trust or other enterprise, or by reason of any
      action or inaction on the part of Indemnitee while serving in such capacity.
      

     

    (e) “Expenses”
shall
      mean any and all expenses (including attorneys’ fees and all other costs,
      expenses and obligations incurred in connection with investigating, defending,
      being a witness in or participating in (including on appeal), or preparing
      to
      defend, to be a witness in or to participate in, any action, suit, proceeding,
      

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    alternative
      dispute resolution mechanism, hearing, inquiry or investigation), judgments,
      fines, penalties 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, of any Claim and any federal, state, local
      or
      foreign taxes imposed on the Indemnitee as a result of the actual or deemed
      receipt of any payments under this Agreement. 

     

    (f) “Expense
      Advance”
shall
      mean a payment to Indemnitee, pursuant to Section 3 hereof, of Expenses in
      advance of the settlement of or final judgment in any action, suit, proceeding
      or alternative dispute resolution mechanism, hearing, inquiry or investigation
      which constitutes a Claim. 

     

    (g) “Independent
      Legal Counsel”
shall
      mean an attorney or firm of attorneys, selected in accordance with the
      provisions of Section 2(d) hereof, who shall not have otherwise performed
      services for the Company or Indemnitee within the last three years (other than
      with respect to matters concerning the rights of Indemnitee under this
      Agreement, or of other indemnitees under similar indemnity agreements).

     

    (h) 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, agent or fiduciary of
      the
      Company which imposes duties on, or involves services by, such director,
      officer, employee, agent or fiduciary with respect to an employee benefit plan,
      its participants or its beneficiaries; and if Indemnitee acted in good faith
      and
      in a manner Indemnitee reasonably believed to be in the interest of the
      participants and beneficiaries of an employee benefit plan, Indemnitee shall
      be
      deemed to have acted in a manner “not
      opposed to the best interests of the Company”
as
      referred to in this Agreement. 

     

    (i) “Reviewing
      Party”
shall
      mean, subject to the provisions of Section 2(d) hereof, any person or body
      appointed by the Board of Directors in accordance with applicable law to review
      the Company’s obligations hereunder and under applicable law, which may include
      a member or members of the Company’s Board of Directors or Independent Legal
      Counsel. 

     

    (j) “Section”
refers
      to a section of this Agreement unless otherwise indicated. 

     

    (k) “Voting
      Securities”
shall
      mean any securities of the Company that vote generally in the election of
      directors. 

     

    2. Indemnification.

     

    (a) Indemnification
      of Expenses. Subject to the provisions of Section 2(b) below, the Company shall
      indemnify Indemnitee for Expenses to the fullest extent permitted by law if
      Indemnitee was or is or becomes 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

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Claim
      (whether by reason of or arising in part out of a Covered Event), including
      all
      interest, assessments and other charges paid or payable in connection with
      or in
      respect of such Expenses. 

     

    (b) Review
      of
      Indemnification Obligations. Notwithstanding the foregoing, in the event any
      Reviewing Party shall have determined (in a written opinion, in any case in
      which Independent Legal Counsel is the Reviewing Party) that Indemnitee is
      not
      entitled to be indemnified hereunder under applicable law, (i) the Company
      shall
      have no further obligation under Section 2(a) hereof to make any payments to
      Indemnitee not made prior to such determination by such Reviewing Party, and
      (ii) the Company shall be entitled to be reimbursed by Indemnitee (who hereby
      agrees to reimburse the Company) for all Expenses theretofore paid in
      indemnifying Indemnitee; provided, however, that if Indemnitee has commenced
      or
      thereafter commences legal proceedings in a court of competent jurisdiction
      to
      secure a determination that Indemnitee is entitled to be indemnified hereunder
      under applicable law in accordance with Section 2(c) hereof, then any
      determination made by any Reviewing Party that, under applicable law, Indemnitee
      is not entitled to be indemnified hereunder shall not be binding, and, until
      a
      final judicial determination is made with respect to such legal proceedings
      (as
      to which all rights of appeal therefrom have been exhausted or lapsed), (x)
      Indemnitee shall not be required to reimburse the Company for any Expenses
      theretofore paid in indemnifying Indemnitee and (y) Indemnitee shall be entitled
      to receive interim payments of Expenses pursuant to Section 2(a) hereof.
      Indemnitee’s obligation to reimburse the Company for any Expenses shall be
      unsecured and no interest shall be charged thereon. 

     

    (c) Indemnitee
      Rights on Unfavorable Determination; Binding Effect. If any Reviewing Party
      determines that Indemnitee substantively is not entitled to be indemnified
      hereunder in whole or in part under applicable law, Indemnitee shall have the
      right to commence litigation seeking an initial determination by the court
      or
      challenging any such determination by such Reviewing Party or any aspect
      thereof, including the legal or factual bases therefor, and, subject to the
      provisions of Section 15 hereof, the Company hereby consents to service of
      process and to appear in any such proceeding. Absent such litigation, any
      determination by any Reviewing Party shall be conclusive and binding on the
      Company and Indemnitee. 

     

    (d) Selection
      of Reviewing Party; Change in Control. If there has not been a Change in
      Control, any Reviewing Party shall be selected by the Board of Directors. If
      there has been such a Change in Control (other than a Change in Control which
      has been approved by a majority of the Company’s Board of Directors who were
      directors immediately prior to such Change in Control), any Reviewing Party
      with
      respect to all matters thereafter arising concerning the rights of Indemnitee
      to
      indemnification of Expenses under this Agreement or any other agreement, or
      under the Company’s Certificate of Incorporation or Bylaws as now or hereafter
      in effect, or under any other applicable law, if desired by Indemnitee, shall
      be
      Independent Legal Counsel selected by Indemnitee and approved by the Company
      (which approval shall not be unreasonably withheld). Such counsel, among other
      things, shall render its written opinion to the Company and Indemnitee as to
      whether and to what extent Indemnitee 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    would
      be
      entitled to be indemnified hereunder under applicable law and the Company agrees
      to abide by such opinion. The Company agrees to pay the reasonable fees of
      the
      Independent Legal Counsel referred to above and to indemnify fully such counsel
      against any and all expenses (including attorneys’ fees), claims, liabilities
      and damages arising out of or relating to this Agreement or its engagement
      pursuant hereto. Notwithstanding any other provision of this Agreement, the
      Company shall not be required to pay Expenses of more than one Independent
      Legal
      Counsel in connection with all matters concerning a single Indemnitee, and
      such
      Independent Legal Counsel shall be the Independent Legal Counsel for any or
      all
      other Indemnitees unless (i) the Company otherwise determines or (ii) any
      Indemnitee shall provide a written statement setting forth in detail a
      reasonable objection to such Independent Legal Counsel representing other
      indemnitees. 

     

    (e) Mandatory
      Payment of Expenses. Notwithstanding any other provision of this Agreement
      other
      than Section 10 hereof, to the extent that Indemnitee has been successful on
      the
      merits or otherwise, including, without limitation, the dismissal of an action
      without prejudice, in defense of any Claim, Indemnitee shall be indemnified
      against all Expenses incurred by Indemnitee in connection therewith.

     

    3. Expense
      Advances.

     

    (a) Obligation
      to Make Expense Advances. Upon receipt of a written undertaking by or on behalf
      of the Indemnitee to repay such amounts if it shall ultimately be determined
      that the Indemnitee is not entitled to be indemnified therefor by the Company,
      the Company shall make Expense Advances to Indemnitee. 

     

    (b) Form
      of
      Undertaking. Any obligation to repay any Expense Advances hereunder pursuant
      to
      a written undertaking by the Indemnitee shall be unsecured and no interest
      shall
      be charged thereon. 

     

    (c) Determination
      of Reasonable Expense Advances. The parties agree that for the purposes of
      any
      Expense Advance for which Indemnitee has made written demand to the Company
      in
      accordance with this Agreement, all Expenses included in such Expense Advance
      that are certified by affidavit of Indemnitee’s counsel as being reasonable
      shall be presumed conclusively to be reasonable. 

     

    4. Procedures
      for Indemnification and Expense Advances.

     

    (a) Timing
      of
      Payments. All payments of Expenses (including, without limitation, Expense
      Advances) by the Company to the Indemnitee pursuant to this Agreement shall
      be
      made to the fullest extent permitted by law as soon as practicable after written
      demand by Indemnitee therefor is presented to the Company, but in no event
      later
      than forty-five (45) business days after such written demand by Indemnitee
      is
      presented to the Company, except in the case of Expense Advances, which shall
      be
      made no later than twenty (20) days after such written demand by Indemnitee
      is
      presented to the Company. 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b) Notice/Cooperation
      by Indemnitee. Indemnitee shall, as a condition precedent to Indemnitee’s right
      to be indemnified or Indemnitee’s right to receive Expense Advances under this
      Agreement, 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. 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). In addition, Indemnitee shall give the Company such information
      and cooperation as it may reasonably require and as shall be within Indemnitee’s
      power. 

     

    (c) No
      Presumptions; Burden of Proof. For purposes of this Agreement, the termination
      of any Claim by judgment, order, settlement (whether with or without court
      approval) or conviction, or upon a plea of nolo contendere, or its equivalent,
      shall not create a presumption that Indemnitee did not meet any particular
      standard of conduct or have any particular belief or that a court has determined
      that indemnification is not permitted by this Agreement or applicable law.
      In
      addition, it is the parties’ intention that if Indemnitee commences legal
      proceedings to secure a judicial determination that Indemnitee should be
      indemnified under this Agreement or applicable law, the question of Indemnitee’s
      right to indemnification shall be for the court to decide, and neither the
      failure of any Reviewing Party to have made a determination as to whether
      Indemnitee has met any particular standard of conduct or had any particular
      belief, nor an actual determination by any Reviewing Party that Indemnitee
      has
      not met such standard of conduct or did not have such belief, , shall be a
      defense to Indemnitee’s claim or create a presumption that Indemnitee has not
      met any particular standard of conduct or did not have any particular belief.
      In
      connection with any determination by any Reviewing Party or otherwise as to
      whether the Indemnitee is entitled to be indemnified hereunder, the burden
      of
      proof shall be on the Company to establish by clear and convincing evidence
      that
      Indemnitee is not so entitled. 

     

    (d) Notice
      to
      Insurers. If, at the time of the receipt by the Company of a notice of a Claim
      pursuant to Section 4(b) hereof, the Company has liability insurance in effect
      which may cover such Claim, the Company shall give prompt notice of the
      commencement of such Claim 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 Claim in accordance with
      the
      terms of such policies. 

     

    (e) Selection
      of Counsel. In the event the Company shall be obligated hereunder to provide
      indemnification for or make any Expense Advances with respect to the Expenses
      of
      any Claim, the company, if appropriate, shall be entitled to assume the defense
      of such Claim with counsel approved by Indemnitee (which approval shall not
      be
      unreasonably withheld) upon the delivery to Indemnitee of written notice of
      the
      Company’s election to do so. After delivery of such notice, 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
      or
      expenses of separate counsel subsequently employed by or on behalf of Indemnitee
      with respect to the same Claim; 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    provided
      that (i) Indemnitee shall have the right to employ Indemnitee’s separate counsel
      in any such Claim at Indemnitee’s expense and (ii) if (A) the employment of
      separate 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 continue to retain such counsel to defend such
      Claim, then the fees and expenses of Indemnitee’s separate counsel shall be
      Expenses for which Indemnitee may receive indemnification or Expense Advances
      hereunder. 

     

    5. Additional
      Indemnification Rights; Nonexclusivity.

     

    (a) Scope.
      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 Certificate
      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 Delaware corporation to indemnify a member of its board
      of directors or an officer, employee, agent or fiduciary, it is the intent
      of
      the parties hereto that Indemnitee shall enjoy by this Agreement the greater
      benefits afforded by such change. In the event of any change in any applicable
      law, statute or rule which narrows the right of a Delaware corporation to
      indemnify a member of its board of directors or an officer, employee, agent
      or
      fiduciary, such change, 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 except as set forth
      in Section 10(a) hereof. 

     

    (b) Nonexclusivity.
      The
      indemnification and the payment of Expense Advances provided by this Agreement
      shall be in addition to any rights to which Indemnitee may be entitled under
      the
      Company’s Certificate of Incorporation, its Bylaws, any other agreement, any
      vote of stockholders or disinterested directors, the General Corporation Law
      of
      the State of Delaware, or otherwise. The indemnification and the payment of
      Expense Advances provided under this Agreement shall continue as to Indemnitee
      for any action taken or not taken while serving in an indemnified capacity
      even
      though subsequent thereto Indemnitee may have ceased to serve in such capacity.
      

     

    6. No
      Duplication of Payments.
      The
      Company shall not be liable under this Agreement to make any payment in
      connection with any Claim made against Indemnitee to the extent Indemnitee
      has
      otherwise actually received payment (under any insurance policy, provision
      of
      the Company’s Certificate of Incorporation, Bylaws or otherwise) of the amounts
      otherwise payable hereunder.

     

    7. Partial
      Indemnification.
      If
      Indemnitee is entitled under any provision of this Agreement to indemnification
      by the Company for some or a portion of Expenses incurred in connection with
      any
      Claim, but not, however, for all of the total amount thereof, the Company shall
      nevertheless indemnify Indemnitee for the portion of such Expenses to which
      Indemnitee is entitled.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    8. Mutual
      Acknowledgement.
      Both
      the Company and Indemnitee acknowledge that in certain instances, federal law
      or
      applicable public policy may prohibit the Company from indemnifying its
      directors, officers, employees, agents or fiduciaries under this Agreement
      or
      otherwise. Indemnitee understands and acknowledges that the Company 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 Indemnitee.

     

    9. Liability
      Insurance.
      To the
      extent the Company maintains liability insurance applicable to directors,
      officers, employees, agents or fiduciaries, Indemnitee shall be covered by
      such
      policies in such a manner as to provide Indemnitee the same rights and benefits
      as are provided to the most favorably insured of the Company’s directors, if
      Indemnitee is a director; or of the Company’s officers, if Indemnitee is not a
      director of the Company but is an officer; or of the Company’s key employees,
      agents or fiduciaries, if Indemnitee is not an officer or director but is a
      key
      employee, agent or fiduciary.

     

    10. Exceptions.
      Notwithstanding any other provision of this Agreement, the Company shall not
      be
      obligated pursuant to the terms of this Agreement:

     

    (a) Excluded
      Action or Omissions.
      To
      indemnify Indemnitee for Expenses resulting from acts, omissions or transactions
      for which Indemnitee is prohibited from receiving indemnification under this
      Agreement or applicable law; provided,
      however,
      that
      notwithstanding any limitation set forth in this Section 10(a) regarding the
      Company’s obligation to provide indemnification, Indemnitee shall be entitled
      under Section 3 hereof to receive Expense Advances hereunder with respect to
      any
      such Claim unless and until a court having jurisdiction over the Claim shall
      have made a final judicial determination (as to which all rights of appeal
      therefrom have been exhausted or lapsed) that Indemnitee has engaged in acts,
      omissions or transactions for which Indemnitee is prohibited from receiving
      indemnification under this Agreement or applicable law. 

     

    (b) Claims
      Initiated by Indemnitee.
      To
      indemnify or make Expense Advances to Indemnitee with respect to Claims
      initiated or brought voluntarily by Indemnitee and not by way of defense,
      counterclaim or crossclaim, except (i) with respect to actions or proceedings
      brought to establish or enforce a right to indemnification under this Agreement
      or any other agreement or insurance policy or under the Company’s Certificate of
      Incorporation or Bylaws now or hereafter in effect relating to Claims for
      Covered Events, (ii) in specific cases if the Board of Directors has approved
      the initiation or bringing of such Claim, or (iii) as otherwise required under
      Section 145 of the Delaware General Corporation Law, regardless of whether
      Indemnitee ultimately is determined to be entitled to such indemnification
      or
      insurance recovery, as the case may be. 

     

    (c) Lack
      of Good Faith.
      To
      indemnify Indemnitee for any Expenses incurred by the Indemnitee with respect
      to
      any action instituted (i) by Indemnitee to 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    enforce
      or interpret this Agreement, if a court having jurisdiction over such action
      determines as provided in Section 13 hereof that each of the material assertions
      made by the Indemnitee as a basis for such action was not made in good faith
      or
      was frivolous, or (ii) by or in the name of the Company to enforce or interpret
      this Agreement, if a court having jurisdiction over such action determines
      as
      provided in Section 13 hereof that each of the material defenses asserted by
      Indemnitee in such action was made in bad faith or was frivolous. 

     

    (d) 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 Exchange Act, as amended, or any similar successor statute; provided,
      however,
      that
      notwithstanding any limitation set forth in this Section 10(d) regarding the
      Company’s obligation to provide indemnification, Indemnitee shall be entitled
      under Section 3 hereof to receive Expense Advances hereunder with respect to
      any
      such Claim unless and until a court having jurisdiction over the Claim shall
      have made a final judicial determination (as to which all rights of appeal
      therefrom have been exhausted or lapsed) that Indemnitee has violated said
      statute. 

     

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

     

    12. Binding
      Effect; Successors and Assigns.
      This
      Agreement shall be binding upon and inure to the benefit of and be enforceable
      by the parties hereto and their respective successors, assigns (including any
      direct or indirect successor by purchase, merger, consolidation or otherwise
      to
      all or substantially all of the business or assets of the Company), spouses,
      heirs and personal and legal representatives. The Company shall require and
      cause any successor (whether direct or indirect, and whether by purchase,
      merger, consolidation or otherwise) to all, substantially all, or a substantial
      part, of the business or assets of the Company, by written agreement in form
      and
      substance satisfactory to Indemnitee, expressly to assume and agree to perform
      this Agreement in the same manner and to the same extent that the Company would
      be required to perform if no such succession had taken place. This Agreement
      shall continue in effect regardless of whether Indemnitee continues to serve
      as
      a director, officer, employee, agent or fiduciary (as applicable) of the Company
      or of any other enterprise at the Company’s request.

     

    13. Expenses
      Incurred in Action Relating to Enforcement or Interpretation.
      In the
      event that any action is instituted by Indemnitee under this Agreement or under
      any liability insurance policies maintained by the Company to enforce or
      interpret any of the terms hereof or thereof, Indemnitee shall be entitled
      to be
      indemnified for all Expenses incurred by Indemnitee with respect to such action
      (including without limitation attorneys’ fees), regardless of whether Indemnitee
      is ultimately successful in such action, unless as a part of such action a
      court
      having jurisdiction over such action makes a final judicial determination (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 was not
      made in good faith or was frivolous; provided,
      however,
      that
      until such final judicial determination is made, Indemnitee shall be entitled
      under Section 3 hereof to receive payment of Expense Advances hereunder with
      respect to such action. In the event of an action instituted by or in the name
      of the Company under this Agreement to enforce or interpret any of the terms
      of
      this Agreement, Indemnitee shall be entitled to be indemnified for all Expenses
      incurred by Indemnitee in defense of such action (including without limitation
      costs and expenses incurred with respect to Indemnitee’s counterclaims and
      cross-claims made in such action), unless as a part of such action a court
      having jurisdiction over such action makes a final judicial determination (as
      to
      which all rights of appeal therefrom have been exhausted or lapsed) that each
      of
      the material defenses asserted by Indemnitee in such action was made in bad
      faith or was frivolous; provided,
      however,
      that
      until 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    such
      final judicial determination is made, Indemnitee shall be entitled under Section
      3 hereof to receive payment of Expense Advances hereunder with respect to such
      action.

     

    14. 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 signed
      for by the party addressed, on the date of such delivery, or (ii) if mailed
      by
      domestic certified or registered mail with postage prepaid, on the third
      business day after the date postmarked. Addresses for notice to either party
      are
      as shown on the signature page of this Agreement, or as subsequently modified
      by
      written notice. 

     

    15. Consent
      to Jurisdiction.
      The
      Company and Indemnitee each hereby irrevocably consent to the jurisdiction
      of
      the courts of the State of Delaware for all purposes in connection with any
      action or proceeding which arises out of or relates to this Agreement and agree
      that any action instituted under this Agreement shall be commenced, prosecuted
      and continued only in the Court of Chancery of the State of Delaware in and
      for
      New Castle County, which shall be the exclusive and only proper forum for
      adjudicating such a claim.

     

    16. Severability.
      The
      provisions of this Agreement shall be severable in the event that any of the
      provisions hereof (including any provision within a single section, paragraph
      or
      sentence) are held by a court of competent jurisdiction to be invalid, void
      or
      otherwise unenforceable, and the remaining provisions shall remain enforceable
      to the fullest extent permitted by law. Furthermore, to the fullest extent
      possible, the provisions of the Agreement (including without limitation each
      portion of this Agreement containing any provision held to be invalid, void
      or
      otherwise unenforceable, that is not itself invalid, void or unenforceable)
      shall be construed so as to give effect to the intent manifested by the
      provision held invalid, illegal or unenforceable.

     

    17. Choice
      of Law.
      This
      Agreement, and all rights, remedies, liabilities, powers and duties of the
      parties to this Agreement, shall be governed by and construed in accordance
      with
      the laws of the State of Delaware without regard to principles of conflicts
      of
      laws.

     

    18. 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.

     

    19. Amendment
      and Termination.
      No
      amendment, modification, termination or cancellation of this Agreement shall
      be
      effective unless it is in writing signed by both the parties hereto. No waiver
      of any of the provisions of this Agreement shall be deemed to be or shall
      constitute a waiver of any other provisions hereof (whether or not similar),
      nor
      shall such waiver constitute a continuing waiver.

     

    20. Integration
      and Entire Agreement.
      This
      Agreement sets forth the entire understanding between the parties hereto and
      supersedes and merges all previous written and oral negotiations, commitments,
      understandings and agreements relating to the subject matter hereof between
      the
      parties hereto.

     

    21. No
      Construction as Employment Agreement.
      Nothing
      contained in this Agreement shall be construed as giving Indemnitee any right
      to
      be retained in the employ of the Company or any of its subsidiaries or
      affiliated entities.

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

    

     

    DIGITAL
      VIDEO SYSTEMS, INC.

     

    

     

    By:___________________________

    Name:
      Mali Kuo

    Title:
      Chairman and CEO

     

    

     

    

     

    AGREED
      TO
      AND ACCEPTED

     

    INDEMNITEE:

    

    ______________________________________________

    (signature)

    

    Name:_________________________________________

    Address:Exhibit 10.14

 

PetroChina Oil and Gas Company Limited Jilin Oil Field Branch Company

Chang Ling Long De Oil and Gas Development Company Limited

He301 Oilfield Cooperative Development Contract

 

This contract includes following parties:

Party A: PetroChina Oil and Gas Company Limited Jilin Oil Field Branch Company (hereafter

               referred to as PetroChina Subsidiary)

Party B: Chang Ling Long De Oil and Gas Development Company Limited (hereafter referred to

               as Contractor)

 

According as “Mining Resource Law of the People’s Republic of China”, “Contract Law of the People’s Republic of China” and “Oil Field Development and Management Regulations of PetroChina Oil and Gas Company Limited”, both parties agree that He301 oil field is going to be cooperatively developed by both parties effective May 28, 2003. And in line with the mutually beneficial principle, the related matters concerned achieve the following contract provisions:

 

 

Article 1: Contract Tenet

 

1.1 The Contract tenet is to develop and produce the proven oil and gas reserve in the

Contract Area and to achieve the certain economic benefit.

1.2 The Contractor is responsible for all test fees, and the Contractor is also responsible for all investment costs which will occur during the development period.

1.3 Since the date of commercial development and production of oil, the produced crude oil shall be distributed follows the scheme which the article10 states.

1.4 The Contract does not authorize any rights to the Contractor that could exceed the scope of the contract.

 

 

Article 2: Definitions

 

2.1 PetroChina Oil and Gas Company Limited (hereafter referred to as PetroChina)

2.2 PetroChina Oil and Gas Company Limited Jilin Oil Field Branch Company (hereafter referred to as PetroChina Subsidiary)

2.3 Chang Ling Long De Oil and Gas Development Company Limited (hereafter referred to as Contractor).

2.4 “Contract Area” means He301 oil fields

2.5 “Exploitation” means the activities of oil and gas production and development, in certain situations also means reconnoitring. 

2.6 “Test” means the locale test before making the development plan which could help exploiting oil and gas effectively.  

2.7 “Joint Management Committee” (hereafter referred to as Committee) means the committee formed in the joint effects of both parties to ensure the contract is effectively implemented and the work is able to proceed normally.

1

 

    

    

Exhibit 10.14

 

2.8 “Operator” means the entity which is assigned by the PetroChina and responsible for the actual oilfield development and oil production in the Contract Area.

2.9 “Related Company” means a company which holds more than 30% share of PetroChina Subsidiary or the Contractor.

 

 

Article 3: Contract Area

 

3.1 As of the date of the contract, the contract area is He301 oilfields, and the proportion of the area is 10 sq. km. 

3.2 The test area is the same area as the contract area.

3.3 Any unknown and (or) newly discovered oil reserve in the contract area belongs to PetroChina. If the Contractor wants to develop these unknown or newly discovered reserves, Contractor must obtain the prior approval of PetroChina, and enter into a new or complementary contract.

3.4 The Contractor does not have any right to develop or use any resources in the contract area except oil and gas resources.

 

 

Article 4: Contract Term

 

4.1 There are three periods in the Contract: the initial test period, development period and commercial production period.

4.1.1 The initial test period is the first contract year from the date the contract is approved. During this period, the Contractor must drill at least one well, and invest at least two million RMB.

4.1.2 The development period is the period of no more than 24 months after the initial test period.

4.1.3 The commercial production period begins at the end of the development period until the date the contract expires.

4.2 The contract term is 20 continuous years from the date the contract is signed.

4.3 Suspending production during the contract period

If the production needs to be suspended during commercial production period, it must be approved by the Committee. If the production is suspended by Contractor, then PetroChina Subsidiary can only keep the contract open for the Contractor for no more than one year time and cannot beyond the date of the contract termination.

4.4 Abandoning production during the contract period

During the contract period, any party can abandon production in contract area, however, the other party must be informed in writing, and the other party should reply in writing within 90 days after receipt of such notice. If the other party agrees to abandon production in the contract area, upon approval by PetroChina, production may be abandoned in follow of the procedure which is agreed by both parties. And from the date of abandon execution, all the production activities in the contract area shall be ceased. 

4.5 The decision to abandon production during the contract period belongs to PetroChina. If PetroChina decides not to abandon production in the contract area, however, and the Contractor still wants to abandon production, then upon receipt by Contractor of written notice from PetroChina informing Contractor that

 

2

 

Exhibit 10.14

 

PetroChina does not wish to abandon production, all of Contractor’s rights under the contract terminate, and the Contractor will be liable for any obligations incurred by Contractor up to the termination of its rights hereunder and Contractor cannot transfer any liabilities incurred by Contractor during the contract period in the contract area to PetroChina Subsidiary. 

 

 

Article 5: Proportion of the Contract Area

 

5.1 Proportion of cooperative area is regulated particularly, it cannot exceed, and any excess portion should be quashed.

5.2 If there is any quashed proportion, the Contractor should write a particular report for that to PetroChina Subsidiary.

 

 

Article 6: Management Committee

 

6.1 In order to ensure the operation proceeds normally, in ten days from the date of the contract, both parties shall establish a joint management committee together.

6.2 PetroChina Subsidiary and the Contractor should each appoint 3 representatives respectively to form the Committee. Each party shall appoint one of three representatives as the chief delegate. Either party may upon written notice to the other party change representatives, or appoint another representative as chief delegate. The appointed representatives have the rights to express opinions on all proposals at the meetings of the Committee. While making the decision as to any proposal, the chief delegate of each party shall be the spokesman for their own party. The Committee shall hold a meeting once every six months.

The chief delegate who is appointed by the Contractor will serve as the Committee’s president. The chief delegate who is appointed by PetroChina Subsidiary will serve as the Committee’s vice-president. The meetings of the Committee shall be presided over by the president. Both parties can appoint any number of advisors without voting rights to attend the Committee meetings.

6.3  The duties of the Committee are:

6.3.1 Prepare the oil and gas exploration plan in the contract area and organize the implementation of the plan.

6.3.2 Determine the operation policy and investment plan of the contract area.

6.3.3 Inspect and approve the annual financial budget scheme and final account results.

6.3.4 Make the management regulations of the contract area; supervise the operator’s production and operation activities.

 

 

Article 7: Operator

 

7.1. The operating crews in the Contract Area shall be provided by PetroChina
Subsidiary. The Contractor can assign three personnel to take part in the daily
operation;

7.2. The Operator shall use and apply advanced technology and management
expertise to reasonably, economically and effectively implement oil exploration
operations;

7.3. Within the oil and gas exploration plan and investment budget made by
Committee, the Operator shall make specific plan of oil and gas exploration.

 

3

 

Exhibit 10.14

 

7.4 As authorized by the Committee, the Operator shall take charge of installing equipments, purchasing equipments and raw materials, and signing relevant service contracts in regard of the operation.

7.5 The Operator shall accurately and completely record all costs of the operation and maintain all financial records.

7.6 The Operator shall report periodically to the Committee about the operation.

7.7 During the operation period, the Operator shall be liable for any loss caused by the inappropriate activities of the operator or its employees.

7.8 During the operation period, the Operator shall obey related national regulations in health, safety, and environmental protection. Any problems arising as a result of operator’s activities shall be handled by the operator and then determine the liability and process according to certain rules and regulations.

7.9 The Operator shall report all recorded data to the PetroChina Subsidiary under the regulations and rules of PetroChina.

 

 

Article 8: Making General Exploration Plan

 

8.1 Prior to the exploration, the Committee will assign qualified entities to make the general exploration plan and report to the PetroChina Subsidiary for review and approval. The Contractor is responsible for paying the costs of these qualifies entities.

8.2 During the implementation of the general exploration plan in the contract area, the entities are allowed to change the plan base on the newly changed situations. However, such activities cannot be implemented until acquire the approval from the PetroChina Subsidiary.

 

 

Article 9: Fund Raising

 

9.1 The Contractor shall provide the needed capital base on the annual general oil exploration plan and financial budget which are reviewed and approved by the Committee.

9.2 The Contractor is solo responsible to the initial test costs.

9.3 The Contractor is fully responsible to the investment of exploration in the contract area and the costs of maintaining the normal operation (include operation costs, management costs and other relevant costs). 

9.4 In Article 10.3, regarding the costs of oil transportation and distribution, the Contractor is only responsible for any costs before the oil reaches PetroChina Subsidiary’s oil storage facility; PetroChina Subsidiary is responsible for the rest costs.

9.5 In order to effectuate the contract, the PetroChina Subsidiary agrees that the Contractor can use the rights and interests associated with the product in the contract (except the oilfield, company properties and wells and other equipments) as pledge to borrow money. However, the Contractor must notify the PetroChina Subsidiary in advance and cannot enter into any forms of borrowing contract until get approval in writing. And in addition, the rights and interests of the PetroChina Subsidiary cannot be harmed.

9.6 If the Contractor chooses not to explore the oil field after initial test, the investment will be deemed as a loss. The PetroChina Subsidiary is not responsible for the loss.

 

4

 

Exhibit 10.14

 

 

Article 10: Crude Oil Sales and Royalties

 

10.1 The Operator shall follow and execute strictly to the general annual oil exploration plan which is approved by the Committee.

10.2 All the crude oil extracted from the Contract Area must be sold solely by the PetroChina Subsidiary. No other forms of sales are allowed.

10.3 All the produced crude oil during the commercial production period of the Contract shall be divided by the PetroChina Subsidiary and the Contractor, the scheme is as follow:

 

	
            Contract period
 	
              
 	
            PetroChina Subsidiary
 	
             
 	
            Contractor
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
            First 10 years 

(fromMay,2003)
 	
              
 	
            20%
 	
             
 	
            80%
 
	
            Remaining 10 years (fromMay, 2013)
 	
              
 	
            40%
 	
             
 	
            60%
 

 

10.4 The PetroChina Subsidiary and the Contractor shall follow this scheme in article10.3 strictly in the product sharing.

10.5 The sharing of crude oil will be settled in the format of value added tax receipts every month.

10.6 The PetroChina Subsidiary shall make the payment for crude oil to the Contractor within 30 days after the settlement is made.

 

 

Article 11: Oil Reserve Ownership

 

11.1 The original oil reserve ownership in the Contract Area will not be changed; such ownership is still belonging to the PetroChina.

11.2 Any new explored oil reserves shall be reported to China government by the PetroChina Subsidiary.

11.3 PetroChina is responsible to all the costs relate to oil reserve ownership.

 

 

Article 12: Ownership of Assets and Data 

 

12.1 The PetroChina Subsidiary is consigned by PetroChina to manage the reserves in the Contract Area.

12.2 All the production properties of PetroChina Subsidiary that have been purchased, installed and built according to the working scheme and budget before the cooperation in the contract area belong to PetroChina Subsidiary. During the contract period, all the assets that including wells and drilling equipments in the contract area which are purchased, installed or manufactured in accordance with this contract (include oil drilling machines, shafts, pumps, pipelines, roads, electricity transmitters, land, accommodations, measurement rooms), will belong to PetroChina Subsidiary after the contract is expired.

 

5

 

Exhibit 10.14

 

12.3 All of the data, records, samples, receipts, and other original data which are obtained during the oil production processes, will belong to the PetroChina Subsidiary.

 

 

Article 13: The Natural Gas

 

13.1 All the natural gas which is produced within the contract area can be used for production or production improvement purchases.

13.2 After the natural gas is used for production directly, any excess natural gas which has made the commercial value shall be divided in accordance with the oil distribution proportion set forth in Article10.3 above.

13.3 If any excess natural gas does not have any commercial value, the Operators may dispose of the gas in accordance with the relevant regulation of environmental protection regulations and shall not damage the normal oil production. Such disposal fees can be included in the operation overheads.

 

Article 14: The Expenses of Accounting, Auditing and Employment

 

14.1 Accounting

In order to accurately reflect the experimental fees, development investment, production operational fees and crude oil and natural gas production, distribution amount and value which are incurred during the oil production, the Committee authorizes the Operator to accounting and auditing, preserving and organizing the company accounting memos. Also the operator is obligated to provide the detailed accounting worksheets and written reports to the Committee and other relevant organizations in accordance with the inter-accounting regulations of PetroChina.

14.2 Auditing

After every calendar year, any party to this contract shall have the rights to audit the operator’s accounting records and notify the Operator of the auditing results. During the year, if a party has some special requirements, the party can also audit the Operator’s accounting records. In addition, auditors shall also have the right to check the accounting historical documents and other files, and also inspect the site and facilities if necessary.

14.3 Employment

For all the employees of joint management board and oil production departments, the salaries standard and other subsidizes standard of such personals shall be decided by the Committee, and paid by the contactor.

 

Article 15: Property Insurance

 

15.1 Since the effective date of the Contract, the Operator shall make the insurance plan to the operation and production equipments, facilities, vehicles and other relevant objectives. And the Operator cannot enter into any insurance agreements until the insurance plan is approved by the Committee.

15.2 The occurred insurance fees during the test period shall be included in experimental fees and the fees during the development and commercial operation periods shall be included in the operational overheads.

 

6

 

Exhibit 10.14

 

 

Article 16: Confidentiality and Non-Disclosure

 

16.1 The Contract and other technological files, materials, data and reports which are relevant to the oil production shall be kept confidential. The scope and length of period of the confidentiality period shall follow China’s relevant laws and also the regulations of PetroChina and be decided by the PetroChina Subsidiary.

16.2 During the Confidentiality period, without the agreement of other party, the documents which are included in the scope of confidentiality are non-disclosure to any third parties or companies who have no relation to the contract.

16.3 After the termination of the contract, the Committee shall decide the revealing scope and relevant rules.

 

Article 17: Transfer Possession

 

17.1 The Contractor can transfer part or all of the possession and (or) liability within the Contract to other party. However, such activity shall be reported in writing to the PetroChina, and only can be conducted after being approved and have no damaging effects to the normal oil production. The Contractor shall guarantee in writing to the PetroChina Subsidiary and state the transferred duty can still be fulfilled.

17.2 The PetroChina Subsidiary can authorize and consign the relevant companies to fulfill the contract, however the PetroChina Subsidiary still be responsible to the contract. 

17.3 After being approved by PetroChina, the PetroChina Subsidiary can transfer part or all of the possession and (or) liability within the contract to third party which is controlled by PetroChina. The PetroChina Subsidiary shall guarantee the transferred duty can still be fulfilled and also have no damaging effects to the oil production as well.

 

 

Article 18: Healthy, Safety and Environmental Protection

 

18.1 During the operation, the Operator shall strictly follow Chinese laws, regulations, rules and standards of healthy, safety and environmental protection, and also execute the company’s relevant rules. Fulfill the environmental protection and oil production safety within the Contract Area. All the economic compensation, damage and loss which are incurred by force majeure shall be accounted into accounting memos.

18.2 The Operator shall establish the rules of safety, healthy and environmental protection before conducting the oil production.

18.3 When the PetroChina Subsidiary and other relevant departments assign the personals to inspect the safety, healthy and environmental protection conditions, the Operator shall cooperate and provide the necessary facilities and help.

 

7

 

Exhibit 10.14

 

 

Article 19: Force Majeure

 

19.1 When all of the following situations occur, and as a result thereof, any party to the contract fails or delays to fulfill its duty, it shall not be treated as breach of contract:  

Due to the unpredictable and (or) uncontrollable matters or dependent events occur to this party, which prevent or hinder such party from fulfilling or delay the party from fulfilling any obligations of the Contract:

The above-mentioned incidents are the immediate cause that prevents or hinders from or delays the party from fulfilling any obligations of the Contract. In case of happening such above-mentioned incidents the party shall adopt all rational behavior in order to dispel any reasons that prevent or hinder from or delay the party from fulfilling any obligations of the Contract. And the party shall continue fulfilling the obligations to the Contract within the possible range.

19.2 The party which suffers force majeure shall notify the other party of any incidents and results of the force majeure immediately.

19.3 In the event of the force majeure incidents happens, both parties shall negotiate immediately for seeking the appropriate solution, and also take all kind of efforts to minimize the effects of the force majeure.

19.4 in the event of part or all of oil development operation ceases due to the effects of the force majeure, the term of the Contract shall be extended. And the Operator shall report to the Committee about the effects of the force majeure to the oil production in 15 days before the end of each calendar year. 

19.5 The article19 is not obligatory to any breaches of the Contract caused by the payment manners. 

 

  

Article: 20 Negotiations and Arbitration

 

20.1 In the event of a dispute between parties during the implementation or explanation of the Contract, both parties shall resolve to use good faith negotiations to settle any outstanding issues. The supplementary contract after the negotiations has equal legal effects to the Contract.

20.2 However, in the event good faith negotiations do not succeed, after 30 days of the dispute either party has the right to request the binding arbitration or lawsuit in the local court of the Contract Area.

20.3 The obligations regarding negotiations and arbitration under the Article20 shall survive any termination of the Contract.

 

 

Article 21: Effective Date,Change and Termination of the contract

 

21.1 The Contract will become effective after being signed and stamped by both parties and approved by the PetroChina. The date of approval is the effective date of contract.

21.2 During the execution of the Contract, if both parties agree to revise or supplement any part of the Contract, the authorized representatives of both parties shall sign the written agreement. If such revision or supplement constitutes a major alteration, the written agreement must also be approved by the PetroChina. As inalienable component, the revised or supplement agreement is regarded as a part of the Contract.

 

8

 

Exhibit 10.14

 

21.3 Upon any of the following events, the Contract may be terminated:

21.3.1 If after the effective date of the Contract, the Contractor does not comply with its obligations under Article4 of the Contract, the PetroChina Subsidiary has the right to terminate the Contract.

21.3.2 During the execution of the Contract, due to the factors of geological condition that the Contractor is unable to make any explorations and development, the Contract may be terminated.

21.3.3 During the execution of the Contract, due to the force majeure that the Operator cannot continue the operation especially after the necessary actions have been implemented, the Contract can be terminated.

21.3.4 The Contract will be terminated on the last day of the last year of the Contract term, unless the contract has specified separately.

21.4 In the event of a material breach of the Contract by one party, the other party shall have the right to request the necessary correction in a reasonable time period. If the party fails to correct such breach in the given time period, the other party has the right to terminate the Contract after the 90 days of the written notice has been given. 

21.5 In the event of the termination of the Contract, both partiers shall establish a liquidation group in charge of liquidating the properties in accordance with the law. All assets in the Contract Area shall belong to the PetroChina Subsidiary in accordance with the article12 above. The crude oil that is held in storage shall be shared by both parties in accordance with the article10 above. 

 

 

Article 22: Administrative Agency and Relevant Policies

 

22.1 The PetroChina Exploration and Producing Branch Company is authorized and assigned by the PetroChina to perform as the administrative agency to the Contract and Operation.

22.2 The Contractor agrees to comply with the relevant rules and regulations of “PetroChina Domestic Cooperative Exploitation of Oil and Gas Resource Management Method” which is printed and distributed by the PetroChina.

22.3 The Contractor shall pay RMB 50,000 to the PetroChina Subsidiary annually for the assistance fee. The first assistance fee shall be paid within six months after the Contract takes effect. Thereafter, the Contractor shall pay the assistance fee to the PetroChina Subsidiary in the first month of each contract year.

22.4 After the Contract takes effect, any contracts (agreements) which were signed in the past is abrogated immediately.

22.5 Any unaccomplished issues of the Contract shall be resolved through negotiations by both parties; the supplementary agreement and the Contract shall have the equal legal effect.

 

PetroChina Oil and Gas Company Limited Jilin Oil Field Branch Company (Seal)

 

Representative

 

Chang Ling Long De Oil and Gas Development Company Limited (Seal)

 

Representative

 

9

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