Document:

Exhibit

Exhibit 10.5

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (this “Agreement”), dated as of September 18, 2020 (the “Effective Date”), is by and between Denbury Inc., a corporation incorporated under the Delaware General Corporation Law (the “Company”), and ________________________ (“Indemnitee”).

WHEREAS, competent and experienced persons are becoming more reluctant to serve as directors or officers of corporations unless they are provided with adequate protection against claims and actions against them for their activities on behalf, or at the request, of such corporations, generally through insurance and indemnification.

WHEREAS, uncertainties in the interpretations of the statutes, regulations, laws and public policies relating to indemnification of corporate directors and officers are such as to make adequate, reliable assessment of the risks to which directors and officers of such corporations may be exposed difficult, particularly in light of the proliferation of lawsuits against directors and officers generally.

WHEREAS, the Board of Directors of the Company (the “Board”), based upon the collective business experience of the directors comprising the Board, has concluded that the continuation of present trends in litigation against corporate directors and officers will inevitably make it more difficult for the Company to attract and retain directors and officers of the highest degree of competence committed to the active and effective direction and supervision of the business and affairs of the Company and its subsidiaries and affiliates, and the operation of its and their facilities, and the Board deems such consequences to be so detrimental to the best interests of the Company that it has concluded that the Company should act to provide its directors and officers with enhanced protection against inordinate risks attendant on their positions in order to assure that the most capable persons otherwise available will be attracted to, or will remain in, such positions.

WHEREAS, in connection with the foregoing, the Board has further concluded that it is not only reasonable and prudent, but necessary, for the Company to obligate itself contractually to indemnify to the fullest extent permitted by applicable law its directors and certain of its officers and certain persons serving other entities on behalf, or at the request, of the Company, and to assume, to the maximum extent permitted by applicable law, financial responsibility for expenses and liabilities which might be incurred by such individuals in connection with claims lodged against them for their decisions and actions in such capacities.

WHEREAS, Section 145(a) of the Delaware General Corporation Law (the “DGCL”), under which the Company is incorporated, provides that a corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director or officer of the corporation, or is or was serving at the request of the corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid

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in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful. The termination of any action, suit, 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 the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the person’s conduct was unlawful.

WHEREAS, in addition, Section 145(b) of the DGCL provides that a corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director or officer of the corporation, or is or was serving at the request of the corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery of the State of Delaware (the “Court of Chancery”) or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.

WHEREAS, in addition, Section 145(g) of the DGCL provides that a corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director or officer of the corporation, or is or was serving at the request of the corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the corporation would have the power to indemnify such person against such liability under Section 145 of the DGCL.

WHEREAS, the Company desires to hold harmless and indemnify Indemnitee to the fullest extent permitted or required by the provisions of the DGCL or court interpretations thereunder as it is presently constituted and as it may be amended from time to time; provided, however, that in the case of any amendment to the DGCL, the Company’s obligations to hold harmless and indemnify Indemnitee shall be changed only to the extent that such amendment to the DGCL permits or requires the Company to provide broader indemnification rights than prior to such amendment.

WHEREAS, the Company desires to have Indemnitee serve or continue to serve as a director and/or an officer of the Company or at the request of the Company as a director and/or an officer of another corporation, partnership, joint venture, trust or other enterprise (each a “Company Affiliate”) of which he has been or is serving, or will serve at the request of the Company, free from undue concern for unpredictable, inappropriate or unreasonable claims for

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damages by reason of his being, or having been, a director and/or an officer of the Company or a director and/or an officer of a Company Affiliate or by reason of his decisions or actions on their behalf.

WHEREAS, Indemnitee is willing to serve, or to continue to serve, or to take on additional service for, the Company or the Company’s Affiliates in such aforesaid capacities on the condition that he be indemnified as provided for herein.

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

1.    Services to the Company. Indemnitee will serve or continue to serve as a director and/or an officer of the Company (at the will of the Company or under a separate contract, if any such contract shall hereafter exist) or as a director and/or an officer of a Company Affiliate faithfully and to the best of his ability so long as he is duly elected and/or appointed and qualified in accordance with the provisions of the Company’s Bylaws or other applicable constitutive documents; provided, however, that (a) Indemnitee may at any time and for any reason resign from such position (subject to any contractual obligations which Indemnitee shall have assumed apart from this Agreement) and (b) neither the Company nor any Company Affiliate shall have any obligation under this Agreement to continue Indemnitee in any such position.

2.    Right to Indemnification. The Company shall, to the fullest extent permitted by applicable law as then in effect, indemnify Indemnitee to the extent he is or was involved in any manner (including, without limitation, as a party or a witness) or is threatened to be made so involved in any threatened, pending or completed investigation, claim, action, suit or proceeding (a “Proceeding”), whether civil, criminal, administrative or investigative by reason of the fact that Indemnitee is or was a director and/or an officer of the Company, or is or was serving at the request of the Company as a director and/or an officer of any Company Affiliate, against all costs, charges and expenses (including attorneys’ fees), including an amount paid to settle an action or satisfy a judgment, reasonably incurred by Indemnitee in connection with such Proceeding to which Indemnitee is made a party by reason of being or having been a director and/or an officer of the Company or a director and/or an officer of any Company Affiliate, if (a) Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in and not opposed to the best interests of the Company, and (b) in the case of a criminal or administrative Proceeding, Indemnitee had no reasonable cause to believe that Indemnitee’s conduct was unlawful; provided, however, that except as provided in Section 3(d) of this Agreement, the foregoing shall not apply to Indemnitee with respect to any Proceeding which was commenced by Indemnitee. Such indemnification shall include the right to receive payment in advance of any expenses incurred by Indemnitee in connection with such Proceeding, consistent with the provisions of applicable law as then in effect.

3.    Advancement of Expenses; Procedures; Presumptions and Effect of Certain Proceedings; Remedies. In furtherance, but not in limitation, of the foregoing provisions, the following procedures, presumptions and remedies shall apply with respect to advancement of expenses and the right to indemnification hereunder.

(a)    Advancement of Expenses. Expenses (including attorneys’ fees) incurred by Indemnitee in defending any civil, criminal, administrative or investigative Proceeding shall be

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paid by the Company in advance of the final disposition of such Proceeding upon receipt of an undertaking by or on behalf of Indemnitee to repay such amount if it shall ultimately be determined that Indemnitee is not entitled to be indemnified by the Company as authorized pursuant to Section 145 of the DGCL.

(b)    Procedure for Determination of Entitlement to Indemnification.

(i)    To obtain indemnification under, and pursuant to, this Agreement, Indemnitee shall submit to the General Counsel of the Company a written request for indemnification, including such documentation and information as is reasonably available to Indemnitee and reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification (the “Supporting Documentation”). The determination of Indemnitee’s entitlement to indemnification shall be made not later than 30 days after receipt by the General Counsel of the Company of the written request for indemnification together with the Supporting Documentation. The General Counsel of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification.

(ii)    Indemnitee’s entitlement to indemnification hereunder shall be determined in one of the following ways (each of which shall give effect to the presumptions set forth in Section 3(c) of this Agreement): (A) by a majority vote of the Disinterested Directors (as defined in Section 3(e) of this Agreement), even though less than a quorum; (B) by a committee of Disinterested Directors designated by majority vote of Disinterested Directors, even though less than a quorum; (C) if there are no Disinterested Directors, or if the Disinterested Directors so direct, by Independent Counsel (as defined in Section 3(e) of this Agreement), as selected by the Disinterested Directors as provided below, in a written opinion; or (D) by the stockholders of the Company.

(iii)    If the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section (C) of the immediately preceding paragraph, a majority of the Disinterested Directors, if any, shall select the Independent Counsel, but only an Independent Counsel to which Indemnitee does not reasonably object. If there shall be no Disinterested Directors, such Independent Counsel shall be selected by a majority of the directors of the Board (the “Directors”), but only an Independent Counsel to which the Indemnitee does not reasonably object shall be selected.

(iv)    Notwithstanding any other provision in this Agreement, the Company shall not be obligated under this Agreement to make any payment for expenses, indemnification or contribution in connection with any claim made against Indemnitee:

(A)    for which payment has actually been received by or on behalf of Indemnitee under any insurance policy, contract, agreement, other indemnity or advancement provision, except with respect to any excess beyond the amount actually received under any insurance policy, contract, agreement, other indemnity or advancement provision or otherwise;

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(B)    for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Securities Exchange Act of 1934, as amended, or any successor rule or similar provisions of state statutory law or common law; or

(C)    if the Company brings an action, in the Court of Chancery, contesting the right of Indemnitee to receive indemnification or contribution hereunder and establishes that (1) Indemnitee intentionally misrepresented or failed to disclose a material fact in making the request for indemnification or contribution or in the Supporting Documentation or (2) such indemnification or contribution is prohibited by law (such event, a “Disqualifying Event”); provided, however, that in any such action the Company shall have the burden of proving the occurrence of any such Disqualifying Event; provided, further, that the reduction in the obligation of the Company to make any payment for expenses, indemnification or contribution under sub-clause (2) of this clause (C) shall only be to the extent that such obligation is prohibited by law.

(c)    Presumptions and Effect of Certain Proceedings. Except as otherwise expressly provided herein, Indemnitee shall be presumed to be entitled to indemnification hereunder upon submission of a request for indemnification together with the Supporting Documentation in accordance with Section 3(b) above, and thereafter the Company shall have the burden of proof to overcome that presumption in reaching a contrary determination. In any event, if the person or persons empowered under Section 3(b) of this Agreement to determine entitlement to indemnification shall not have been appointed or shall not have made a determination within 30 days after receipt by the General Counsel of the Company of the request therefor together with the Supporting Documentation, Indemnitee shall be deemed to be entitled to indemnification and Indemnitee shall be entitled to such indemnification unless the Company establishes, as provided in Section 3(b)(iv)(C) of this Agreement, or by written opinion of Independent Counsel, that (i) Indemnitee misrepresented or failed to disclose a material fact in making the request for indemnification or in the Supporting Documentation or (ii) such indemnification is prohibited by law. The termination of any Proceeding described in Section 2 of this Agreement, or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which Indemnitee reasonably believed to be in or not opposed to the best interests of the Company and, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.

(d)    Remedies of Indemnitee.

(i)    In the event that a determination is made pursuant to Section 3(b) of this Agreement that Indemnitee is not entitled to indemnification hereunder, Indemnitee shall be entitled, on five days’ written notice to the General Counsel of the Company, to receive the written report of the persons making such determination, which report shall include the reasons and factual findings, if any, upon which such determination was based. At his sole option, Indemnitee shall be entitled to seek an adjudication of his entitlement to such indemnification in the Court of Chancery.

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(ii)    If a determination shall have been made, or deemed to have been made that Indemnitee is entitled to indemnification pursuant to Section 3(b) or (c) of this Agreement or contribution pursuant to Section 5 of this Agreement, the Company shall be obligated to pay the amount constituting such indemnification or contribution within five days after such determination has been made, or deemed to have been made, and the Company shall be conclusively bound by such determination. If (x) advancement of expenses is not timely made pursuant to Section 3(a) of this Agreement or (y) payment of indemnification or contribution is not made within five days after a determination of entitlement to indemnification or contribution has been made or deemed to have been made pursuant to Section 3(b) or (c) of this Agreement, Indemnitee shall be entitled to seek judicial enforcement of the Company’s obligation to pay to Indemnitee such advancement of expenses, indemnification or contribution. 

(iii)    The Company shall be precluded from asserting in any judicial proceeding commenced pursuant to this Section 3(d) that the procedures and presumptions of this Section 3 are not valid, binding and enforceable, and shall stipulate in any such court that the Company is bound by all the provisions of this Agreement.

(iv)    If Indemnitee, pursuant to this Section 3(d), seeks a judicial adjudication to enforce his rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company against, any expenses actually and reasonably incurred by Indemnitee if Indemnitee prevails in such judicial adjudication. If it shall be determined in such judicial adjudication that Indemnitee is entitled to receive part but not all of the indemnification or advancement of expenses sought, the expenses incurred by Indemnitee in connection with such judicial adjudication shall be prorated accordingly.

(e)    Definitions. For purposes of this Section 3:

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

“Independent Counsel” means a law firm or a member of a law firm that neither presently is, nor in the past five years has been, retained to represent (a) (i) the Company, its officers, directors or holders of more than 10% of the Company’s issued and outstanding equity securities, or (ii) Indemnitee, in each case in any matter material to any such party or (b) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing under the law of Delaware, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights hereunder.

4.    Other Rights to Indemnification. The indemnification and advancement of costs and expenses (including attorneys’ fees and disbursements) provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may now or in the future be entitled under any provision of applicable law, the Certificate of Incorporation or Bylaws of the Company, or any other agreement or any vote of Directors or shareholders or otherwise, whether as to action

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in his official capacity or in another capacity while occupying any of the positions or having any of the relationships referred to in Section 1 of this Agreement.

5.    Contribution in the Event of Joint Liability.

(a)    To the fullest extent permissible under applicable law, if the indemnification and hold harmless rights provided for in this Agreement are unavailable to Indemnitee in whole or in part for any reason whatsoever, the Company, in lieu of indemnifying or holding harmless Indemnitee, shall pay, in the first instance, the entire amount incurred by Indemnitee, whether for judgments, liabilities, fines, penalties, amounts paid or to be paid in settlement and/or for expenses, in connection with any Proceeding without requiring Indemnitee to contribute to such payment, and the Company hereby waives and relinquishes any right of contribution it may have at any time against Indemnitee.

(b)    The Company shall not enter into any settlement of any Proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such Proceeding) unless such settlement provides for a full and final release of all claims asserted against Indemnitee.

(c)    The Company hereby agrees to fully indemnify and hold harmless Indemnitee from any claims for contribution which may be brought by officers, directors or employees of the Company other than Indemnitee who may be jointly liable with Indemnitee. Indemnitee shall seek payments or advances from the Company only to the extent that such payments or advances are unavailable from any insurance policy of the Company covering Indemnitee.

6.    Duration of Agreement.

(a)    This Agreement shall be effective from and after the Effective Date, and shall continue until and terminate upon the later of (i) the tenth anniversary after Indemnitee has ceased to occupy any of the positions or have any of the relationships described in Section 1 of this Agreement or (ii) (A) the final termination or resolution of all Proceedings with respect to Indemnitee commenced during such l0-year period and (B) either (x) receipt by Indemnitee of the indemnification to which he is entitled hereunder with respect thereto or (y) a final adjudication or binding arbitration that Indemnitee is not entitled to any further indemnification with respect thereto, as the case may be.

(b)    This Agreement shall be binding upon the Company and its successors and assigns and shall inure to the benefit of Indemnitee and his heirs, devisees, executors, administrators or other legal representatives.

7.    Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable under any particular circumstances or for any reason whatsoever (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, all other portions of any section, paragraph or clause of this Agreement that contains any provision that has been found to be invalid, illegal or unenforceable), or the validity, legality or enforceability under any other circumstances shall not in any way be affected or impaired thereby and (b) to the fullest extent possible consistent with applicable law, the provisions of this Agreement (including, without limitation, all other portions of any section,

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paragraph or clause of this Agreement that contains any such provision that has been found to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall be deemed revised and shall be construed so as to give effect to the intent manifested by this Agreement (including the provision held invalid, illegal or unenforceable).

8.    Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement. Facsimiles and counterparts executed by electronic signature shall be effective as originals.

9.    Gender Neutral. Whenever the context requires herein, the gender of all words used herein shall include the masculine, feminine, and neuter, and the number of all words shall include the singular and plural.

10.    Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

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

12.    Notification and Defense of Claim. Indemnitee agrees to notify the General Counsel of the Company promptly in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any matter which may be subject to indemnification hereunder, whether civil, criminal, administrative or investigative; provided, however, that the failure of Indemnitee to give such notice to the General Counsel of the Company shall not adversely affect Indemnitee’s rights under this Agreement except to the extent the Company shall have been materially prejudiced as a direct result of such failure. Nothing in this Agreement shall constitute a waiver of the Company’s right to seek participation at its own expense in any Proceeding which may give rise to indemnification hereunder.

13.    Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed or (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, in either case:

(i)    if to Indemnitee, at the address indicated on the signature page hereof; and

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(ii)    if to the Company:

Denbury Inc.
5320 Legacy Drive
Plano, Texas 75024
Attention: General Counsel

or to such other address as may have been furnished to either party by the other party in accordance with this Section 13.

14.    Governing Law. The parties hereto agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date.

[Remainder of Page Intentionally Left Blank]

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	DENBURY INC.

	 
	 

	 
	 
	 

	 
	By:
	 

	 
	 
	James S. Matthews,

	 
	 
	Executive Vice President,
Chief Administrative Officer and
General Counsel

[Signature Page to Indemnification Agreement]

	
			
	 
	INDEMNITEE:

	 
	 

	 
	 
	 

	 
	By:
	 

	 
	 
	Director

	 
	 
	 

	 
	 
	 

	 
	Address:
	 

	 
	 
	 

[Signature Page to Indemnification Agreement]Exhibit 10.5

 

 

HUADI INTERNATIONAL GROUP CO., LTD.

No. 1688 Tianzhong Street, Longwan District,

Wenzhou, Zhejiang Province

People’s Republic of China 325025

+86-057786598888

 

March 9, 2020

 

Songlin Li

No.8 Binhai Second Road, Yongxing Street,

Longwan District, Wenzhou City, Zhejiang Province

People’s Republic of China 325024

 

Re: Director Offer Letter

 

Dear Mr. Li:

 

Huadi International
Group Co. Ltd., a Cayman Islands limited liability company (the “Company” or “we”), is pleased to offer
you a position as a Director of the Company. We believe your background and experience will be a significant asset to the
Company and we look forward to your participation as a Director in the Company. Should you choose to accept this position as a
Director, this letter agreement (the “Agreement”) shall constitute an agreement between you and the Company and contains
all the terms and conditions relating to the services you agree to provide to the Company. Your appointment shall also be subject
to the approval of Company’s Board of Directors and/or Nomination and Compensation Committees and shall begin upon Company’s
listing on a national exchange.

 

1. Term.  This
Agreement is effective as of the date of this Agreement. Your term as a Director shall continue subject to the provisions in Section
9 below or until your successor is duly elected and qualified.  The position shall be up for re-appointment every year
by the board of the Directors of the Company (the “Board”) and upon re-appointment, the terms and provisions of this
Agreement shall remain in full force and effect.

 

2. Services.  You
shall render customary services as a Director, Chair of the Nomination Committee, and member of the Audit and Compensation Committees
(hereinafter, your “Duties”). During the term of this Agreement, you may attend and participate at each meeting regarding
the business and operation issues of the Company as regularly or specially called, via teleconference, video conference or in person.
You shall consult with the members of the Board and committee (if any) regularly and as necessary via telephone, electronic mail
or other forms of correspondence.

 

3. Services
for Others.  You shall be free to represent or perform services for other persons during the term of this Agreement.  

 

4. Compensation.  As
compensation for your services to the Company, you will receive upon execution of this Agreement a compensation of $10,000 for
each calendar year of service under this Agreement on a pro-rated basis and payable on a quarterly basis.

 

You shall be reimbursed
for reasonable expenses incurred by you in connection with the performance of your Duties (including travel expenses for in-person
meetings).

 

5. D&O
Insurance Policy. During the term under this Agreement, the Company shall include you as an insured under its officers
and directors insurance policy with a Side A coverage.

 

6. No
Assignment.  Because of the personal nature of the services to be rendered by you, this Agreement may not be
assigned by you without the prior written consent of the Company.

 

     

     

    

 

 

7. Confidential
Information; Non-Disclosure.  In consideration of your access to certain Confidential Information (as defined
below) of the Company, in connection with your business relationship with the Company, you hereby represent and agree as follows:

 

a. Definition.  For
purposes of this Agreement the term “Confidential Information” means: (i) any information which the Company possesses
that has been created, discovered or developed by or for the Company, and which has or could have commercial value or utility in
the business in which the Company is engaged; (ii) any information which is related to the business of the Company and is generally
not known by non-Company personnel; and (iii) Confidential Information includes, without limitation, trade secrets and any information
concerning products, processes, formulas, designs, inventions (whether or not patentable or registrable under copyright or similar
laws, and whether or not reduced to practice), discoveries, concepts, ideas, improvements, techniques, methods, research, development
and test results, specifications, data, know-how, software, formats, marketing plans, and analyses, business plans and analyses,
strategies, forecasts, customer and supplier identities, characteristics and agreements.

 

b. Exclusions.  Notwithstanding
the foregoing, the term Confidential Information shall not include: (i) any information which becomes generally available or is
readily available to the public other than as a result of a breach of the confidentiality portions of this Agreement, or any other
agreement requiring confidentiality between the Company and you; (ii) information received from a third party in rightful
possession of such information who is not restricted from disclosing such information; (iii) information known by you prior to
receipt of such information from the Company, which prior knowledge can be documented and (iv) information you are required to
disclose pursuant to any applicable law, regulation, judicial or administrative order or decree, or request by other regulatory
organization having authority pursuant to the law; provided, however, that you shall first have given prior written notice to the
Company and made a reasonable effort to obtain a protective order requiring that the Confidential Information not be disclosed.

 

c. Documents. You
agree that, without the express written consent of the Company, you will not remove from the Company’s premises, any notes,
formulas, programs, data, records, machines or any other documents or items which in any manner contain or constitute Confidential
Information, nor will you make reproductions or copies of same.  You shall promptly return any such documents or items,
along with any reproductions or copies to the Company upon the Company’s demand, upon termination of this Agreement, or upon
your termination or Resignation (as defined in Section 9 herein).

 

d. Confidentiality.  You
agree that you will hold in trust and confidence all Confidential Information and will not disclose to others, directly or indirectly,
any Confidential Information or anything relating to such information without the prior written consent of the Company, except
as may be necessary in the course of your business relationship with the Company.  You further agree that you will not
use any Confidential Information without the prior written consent of the Company, except as may be necessary in the course of
your business relationship with the Company, and that the provisions of this paragraph (d) shall survive termination of this Agreement.
Notwithstanding the foregoing, you may disclose Confidential Information to your legal counsel and accounting advisors who have
a need to know such information for accounting or tax purposes and who agree to be bound by the provisions of this paragraph (d).

 

e. Ownership.  You
agree that the Company shall own all right, title and interest (including patent rights, copyrights, trade secret rights, mask
work rights, trademark rights, and all other intellectual and industrial property rights of any sort throughout the world) relating
to any and all inventions (whether or not patentable), works of authorship, mask works, designations, designs, know-how, ideas
and information made or conceived or reduced to practice, in whole or in part, by you during the term of this Agreement and that
arise out of your Duties (collectively, “Inventions”) and you will promptly disclose and provide all Inventions
to the Company. You agree to assist the Company, at its expense, to further evidence, record and perfect such assignments, and
to perfect, obtain, maintain, enforce, and defend any rights assigned.

 

8. Non-Solicitation.  
During the term of your appointment, you shall not solicit for employment any employee of the Company with whom you have had
contact due to your appointment.

 

    2

     

    

 

 

9. Termination
and Resignation.  Your services as a Director may be terminated for any or no reason by the determination
of the Board. You may also terminate your services as a Director for any or no reason by delivering your written notice of
resignation to the Company (“Resignation”), and such Resignation shall be effective upon the time specified
therein or, if no time is specified, upon receipt of the notice of resignation by the Company. Upon the effective date of the
termination or Resignation, your right to compensation hereunder will terminate subject to the Company’s obligations to
pay you any compensation that you have already earned and to reimburse you for approved expenses already incurred in
connection with your performance of your Duties as of the effective date of such termination or Resignation.

 

10. Governing
Law; Arbitration.    All questions with respect to the construction and/or enforcement of this Agreement,
and the rights and obligations of the parties hereunder, shall be determined in accordance with the law of the State of New York.
All disputes with respect to this Agreement, including the existence, validity, interpretation, performance, breach or termination
thereof or any dispute regarding non-contractual obligations arising out of or relating to it shall be referred to and finally
resolved by arbitration administered by the American Arbitration Association at its New York office in force when the Notice of
Arbitration is submitted. The law of this arbitration clause shall be New York law. The seat of arbitration shall be in New York.
The number of arbitrators shall be one. The arbitration proceedings shall be conducted in English.

 

11. Entire
Agreement; Amendment; Waiver; Counterparts.  This Agreement expresses the entire understanding with respect to
the subject matter hereof and supersedes and terminates any prior oral or written agreements with respect to the subject matter
hereof.  Any term of this Agreement may be amended and observance of any term of this Agreement may be waived only with
the written consent of the parties hereto.  Waiver of any term or condition of this Agreement by any party shall not
be construed as a waiver of any subsequent breach or failure of the same term or condition or waiver of any other term or condition
of this Agreement.  The failure of any party at any time to require performance by any other party of any provision of
this Agreement shall not affect the right of any such party to require future performance of such provision or any other provision
of this Agreement.  This Agreement may be executed in separate counterparts each of which will be an original and all
of which taken together will constitute one and the same agreement, and may be executed using facsimiles of signatures, and a facsimile
of a signature shall be deemed to be the same, and equally enforceable, as an original of such signature.

 

12. Indemnification.  The
Company shall, to the maximum extent provided under applicable law, indemnify and hold you harmless from and against any
expenses, including reasonable attorney’s fees, judgments, fines, settlements and other legally permissible amounts
(“Losses”), incurred in connection with any proceeding arising out of, or related to, your performance of your
Duties, other than any such Losses incurred as a result of your gross negligence or willful misconduct.  The
Company shall advance to you any expenses, including reasonable attorneys’ fees and costs of settlement, incurred in
defending any such proceeding to the maximum extent permitted by applicable law.  Such costs and expenses incurred
by you in defense of any such proceeding shall be paid by the Company in advance of the final disposition of such proceeding
promptly upon receipt by the Company of (a) written request for payment; (b) appropriate documentation evidencing the
incurrence, amount and nature of the costs and expenses for which payment is being sought; and (c) an undertaking adequate
under applicable law made by or on your behalf to repay the amounts so advanced if it shall ultimately be determined pursuant
to any non-appealable judgment or settlement that you are not entitled to be indemnified by the Company. 

 

13. Acknowledgement.  
You accept this Agreement subject to all the terms and provisions of this Agreement. You agree to accept as binding,
conclusive, and final all decisions or interpretations of the Board of Directors of the Company of any questions arising
under this Agreement.

  

    3

     

    

 

 

The Agreement has been executed and delivered
by the undersigned and is made effective as of the date set first set forth above.

  

	 	Sincerely,
	 	 	 
	 	Huadi International Group Co., Ltd.
	 	 	 
	 	By:	/s/ Huisen Wang
	 	 	Huisen Wang
	 	 	Chief Executive Officer

 

	AGREED AND ACCEPTED:
	 	 
	/s/ Songlin
Li	 
	Songlin Li
	 

 

 

4

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