EMPLOYMENT AGREEMENT
 
EMPLOYMENT AGREEMENT (this “Agreement”), dated as of October 23, 2011 (the
“Effective Date”), between Lihua International, Inc. (the “Company”) and Daphne
Yan Huang (“Executive”) (collectively, the “Parties” and, each, a “Party”).
 
WHEREAS, Executive is currently employed by the Company in the position of EVP
of Corporate Finance / Director of IR;
 
WHEREAS, the Company has decided to promote Executive to the position of Chief
Financial Officer (“CFO”) of the Company; and
 
WHEREAS, the Company desires to employ Executive in such new position, and
Executive is willing to accept such employment with the Company, in accordance
with the terms and conditions of this Agreement;
 
NOW, THEREFORE, on the basis of the foregoing premises and in consideration of
the mutual covenants and agreements contained herein, the Parties agree as
follows:
 
1.           Employment, Title and Duties.  The Company hereby agrees to employ
Executive, and Executive hereby accepts employment with the Company, on the
terms, and subject to the conditions, set forth herein.  During the Employment
Period (as defined in Section 2 below), employee shall (i) render her services
to the Company as CFO; and (ii) perform the duties consistent with those typical
of the chief financial officer of a publically traded company and such other
duties commensurate with her position (including that as the Company’s only
US-based employee) as shall be specified or designated by the Company from time
to time, including, without limitation, increasing the Company’s profile in the
US capital markets, planning and representing the Company at investor road shows
and conferences, and targeting and handling buy and sell side research
inquiries.  Executive shall be classified as an “exempt employee,” and, as such,
shall be ineligible for overtime pay.
 
2.           Term.  Executive’s employment hereunder shall commence on the
Effective Date and shall continue for one year following the Effective Date (the
“Initial Term”), subject to earlier termination exclusively as provided for in
Section 6 below, and subject to extension as provided in the following
sentence.  Prior to the first and second anniversary of the Effective Date,
Executive’s employment hereunder may, at the election of the Company, be renewed
for successive, additional one-year periods (each a “Renewal Term”), subject to
earlier termination as exclusively provided for in Section 6 below, upon written
notice to Executive delivered no later than 30 days prior to each such
anniversary.  For the purposes of this Agreement, the “Term” shall mean the
Initial Term as it may be so extended by one or two Renewal Terms, and the
“Employment Period” shall mean the period of Executive’s employment with the
Company.  In the event Executive remains employed by the Company following the
Term, such employment shall be “at-will” and not subject to the terms of this
Agreement, except for Sections 9-11 and 14 below.
 
 
 

--------------------------------------------------------------------------------

 
 
3.           Compensation.  During the Employment Period only (unless otherwise
expressly provided for herein), Executive shall be entitled to the following
compensation.
 
3.1           Salary.  Executive shall receive a base salary (“Base Salary”) at
the rate of not less than $200,000 per year, less applicable withholdings and
deductions, payable in substantially equal installments in accordance with the
Company’s normal payroll practices and procedures in effect at the time of
payment.  Subject to the foregoing, and after review and recommendation of the
Compensation Committee of the Board of Directors of the Company (the
“Compensation Committee”), the Company may, at its discretion, periodically
review and change Executive’s Base Salary.
 
3.2           Signing Bonus.  Within 15 days after the full execution of this
Agreement, Executive shall be paid, in a lump sum, a signing bonus in the amount
of $15,000.
 
3.3           Discretionary Bonuses.  Any bonuses to be paid to Executive (each,
a “Discretionary Bonus”) shall be determined and paid at the sole and complete
discretion of the Compensation Committee and may be based on a variety of
factors, including, but not limited to, Executive’s individual performance and
the overall performance of the Company.  To be eligible for a Discretionary
Bonus, Executive must be employed by the Company at the time such Discretionary
Bonus is paid.
 
3.4           Paid Time Off.  Executive shall be entitled to 15 days of paid
vacation per calendar year, as well as other paid time off (e.g., for holidays,
sick days, personal days, etc.), subject to and in accordance with then current
Company policy.
 
3.5           Stock Options.  As soon as is practicable after the full execution
of this Agreement, the Company will grant to Executive a nonqualified stock
option for 225,000 shares of the Company’s common stock (the “Option”), with a
per share exercise price equal to the closing price of a share of the Company’s
common stock (a “Share”) on the day of the grant of the Option, under and
subject to all of the terms of the Lihua International, Inc. 2009 Omnibus
Securities and Incentive Plan.  The Option will vest in the three equal
installments of 75,000 Shares each, respectively, on the first, second and third
year anniversaries of the Effective Date, provided that any such installment
will not vest, and will be forfeited, if on the vesting date therefor Executive
is not employed as CFO of the Company.
 
3.6           Required Taxes and Withholdings.  Even if not otherwise specified
herein, the Company shall withhold from any payments made under this Agreement
all federal, state, local or other taxes and withholdings as shall be required
pursuant to any applicable law or governmental regulation or ruling.  As CFO and
the only US-based employee of the Company, Executive’s duties hereunder shall
also include ensuring that all such required withholdings are made.
 
4.           Exclusivity; Best Efforts; Duty to Company.  During the Employment
Period, Executive shall (i) in all respects conform to and comply with the
lawful directions and instructions given to her by the Company; (ii) devote her
entire business time, energy and best efforts to her services under this
Agreement; (iii) use her best efforts to promote and serve the interests of the
Company; (iv) comply with the policies and practices established by the Company
from time to time; and (v) not engage in any other business or activity that
impairs or conflicts with her performance of her obligations and duties to the
Company.
 
 
2

--------------------------------------------------------------------------------

 
 
5.           Reimbursement for Expenses.  Executive is authorized to incur
reasonable expenses in the discharge of the services to be performed hereunder
in accordance with the Company’s expense reimbursement policy, as the same may
be modified by the Company from time to time in its sole and complete
discretion.  The Company shall reimburse Executive for all such proper expenses
upon presentation by Executive of itemized accounts of such expenditures in
accordance with the Company’s expense reimbursement policy in effect from time
to time.
 
6.           Termination of Employment.
 
6.1           Death.  Executive’s employment hereunder shall immediately and
automatically be terminated upon Executive’s death.
 
6.2           Disability.  If Executive has been, with or without a reasonable
accommodation, unable to perform the essential functions of the services
contemplated hereunder for a period of not less than 90 consecutive days or an
aggregate of 120 days during any twelve-month period, the Company may terminate
Executive’s employment hereunder by providing written notice of such termination
and its effective date to Executive.  Any dispute as to whether Executive is
disabled shall be resolved by an independent physician, reasonably acceptable to
Executive and the Company, whose determination shall be final and binding upon
both Executive and the Company.
 
6.3           For Cause by the Company.  The Company may terminate Executive’s
employment for Cause, at any time, upon written notice describing the nature of
such Cause.  For purposes of this Agreement, the term “Cause” means Executive’s
(i) willful misconduct; (ii) willful or gross neglect of her job duties; (iii)
failure to materially perform her job duties; (iv) insubordination; (v) failure
to materially comply with the Company’s policies and practices; (vi) acts of
moral turpitude, theft, fraud or dishonesty; (vii) commission of any felony or
misdemeanor (other than minor traffic violations or offences of a comparable
magnitude not involving dishonesty, fraud or breach of trust); (viii) material
breach of any contractual agreement between her and the Company, including,
without limitation, this Agreement; or (ix) acts that are (or reasonably would
be expected to be) damaging or detrimental to the Company, provided that, in the
event of conduct described in clauses (iii), (iv), (v), (viii) or (ix), Cause
shall only exist if, to the extent such basis for Cause is curable, Executive
fails to cure such basis for Cause to the reasonable satisfaction of Employer
within two (2) business days of Employer’s written notice thereof, if reasonably
curable within two (2) business days, or if not, then within such time as is
reasonable under the circumstances, which in no event shall exceed 15 calendar
days.  Executive’s date of termination in the event Executive’s employment is
terminated for Cause shall be the date on which Executive is given notice of
termination under this Section 6.3, except, if a notice period is required,
Executive’s date of termination shall be upon the expiration of said notice
period if Executive fails to cure within such period her conduct giving rise to
Cause.
 
6.4           Without Cause by the Company.  The Company may terminate
Executive’s employment without Cause, at any time, with or without prior notice,
in its sole and complete discretion by providing written notice of such
termination and its effective date to Executive.
 
 
3

--------------------------------------------------------------------------------

 
 
6.5           Resignation with Good Reason.  Executive may resign her employment
hereunder for Good Reason, at any time, provided that (i) Executive provides the
Company with at least 30 days’ (but not greater than one hundred twenty (120)
days) prior written notice thereof within thirty (30) days of the occurrence of
the event giving rise to Good Reason, and (ii) Executive provides the Company
with a thirty (30) day opportunity to cure the event giving rise to Good Reason
following the delivery of such notice (the “Cure Period”).  For the purpose of
this Agreement, the term "Good Reason" means (i) a material and substantial
diminution in Executive’s duties, authority, or responsibilities that would be
inconsistent with Executive’s position (other than such a diminution pursuant to
Section 8 below), (ii) a material failure by the Company to pay Executive’s Base
Salary or other compensation as provided for herein; or (iii) any other material
breach by the Company of the terms this Agreement.  For the avoidance of any
doubt, if Executive does not provide the Company with timely notice as provided
for in this paragraph with respect to an event purporting to give rise to Good
Reason, Executive shall have waived her right to terminate her employment
hereunder for Good Reason with respect to such event.  For the purpose of this
Agreement, Executive’s date of termination in the event Executive resigns her
employment for Good Reason shall be the expiration date of the Cure Period
provided for in this section (provided the Company has failed to materially cure
the condition giving rise to Good Reason), except the Company may waive all or
any part of such Cure Period, in which event Executive’s date of termination
shall be the last day of such Cure Period that has not been waived or, if the
entire Cure Period has been waived, the date that Executive provided notice of
termination of employment.
 
7.           Effect of Termination of Employment
 
7.1           Generally.  In the event Executive’s employment with the Company
terminates, Executive shall have no right to receive any compensation, benefits
or any other payments or remuneration of any kind from the Company, except as
otherwise provided by this Section 7, in any separate written agreement between
Executive and the Company or as may be required by law.  In the event
Executive’s employment with the Company is terminated (regardless of the reason
therefor), Executive (or Executive’s estate in the event of termination due to
Executive’s death) shall receive the following (collectively, the “Accrued
Amounts”):  (i) Executive’s Base Salary through and including the effective date
of Executive’s termination of employment (the “Termination Date”), which shall
be paid no later than the first regularly scheduled payroll date following the
Termination Date;  and (ii) payment for any unreimbursed business expenses
subject to, and in accordance with, the terms of Section 5 above.
 
7.2           Severance Pay.  In the event Executive’s employment is terminated
pursuant to Sections 6.1 (death), 6.2 (disability), 6.4 (without Cause) or 6.5
(Good Reason), in addition to the Accrued Amounts, Executive shall be entitled
to receive severance pay in an amount equal to 6 months of Executive’s Base
Salary as of the Termination Date (“Severance Pay”), subject to and in
accordance with the terms of this Section 7.2.  Payment of Severance Pay is
conditioned on (i) Executive’s continued compliance in all material respects
with Section 9 below and (ii) Executive signing (without revoking if such right
is provided under applicable law) a separation agreement and general release in
a form acceptable to the Company (a “Separation Agreement”).  The Severance Pay
shall be paid in the form of salary continuation pursuant to the terms and
conditions of Section 3.1 above commencing on a regularly scheduled payroll date
of the Company within 90 days following the Termination Date, provided that, if
such 90-day period spans two calendar years, then such salary continuation shall
commence in the calendar year following the year in which the Termination Date
occurs, and provided further that the first payment shall include payment for
any payroll dates between the Termination Date and the date of such payment.
 
 
4

--------------------------------------------------------------------------------

 
 
8.           Notice of Termination.  In the event Executive elects to terminate
her employment hereunder by resigning with Good Reason under Section 6.5 above,
Executive agrees to provide the Company with the applicable prior written notice
of termination required by such section (the “Notice Period”).  The Company may
in its discretion elect to place Executive on a paid leave of absence for all or
any part of the Notice Period.  If Executive provides the Company with written
notice of Executive’s intent to terminate her employment, the Company retains
the right to terminate Executive’s employment under Section 6.3 above during the
Notice Period, except that the Company shall not terminate Executive’s
employment for Cause based on Executive’s failure to report to work during the
Notice Period if the Company does not require Executive to report to work during
the Notice Period.  Executive shall receive all payments due hereunder for the
period of time the Company requires Executive to be subject to such Notice
Period.  During the Notice Period, Executive shall perform any duties and
responsibilities the Company reasonably requests of Executive consistent with
the provisions of Section 1 hereof.
 
9.           Confidentiality, Non-Solicitation and Non-Competition.
 
9.1           Representations and Acknowledgements.  Executive represents and
acknowledges that:  (i) among the Company’s most valuable and indispensable
assets are its Confidential Information (defined below) and its close
relationships with its customers, suppliers and employees, which the Company has
devoted and continues to devote a substantial amount of time, money and other
resources to develop; (ii) Executive is in a position of trust and confidence,
and by working at the Company, Executive will be exposed to and acquire the
Company’s Confidential Information and develop, at the Company’s expense,
special and close relationships with the Company’s customers and suppliers;
(iii) the Company’s Confidential Information and close customer, supplier and
employee relationships must be protected; (iv) this Section 9 is a material
provision of this Agreement and the Company would not employ Executive hereunder
but for the promises and acknowledgements that Executive makes in this Section
9; and (v) to the extent required by law, the covenants in this Agreement
contain reasonable limitations as to time, geographical area and scope of
activities to be restricted and that such covenants do not impose a greater
restraint on Executive than is necessary to protect the Company’s Confidential
Information, close customer, supplier and employee relationships and other
legitimate business interests.
 
 
5

--------------------------------------------------------------------------------

 
 
9.2           Non-Disclosure of Confidential Information.  Executive shall not,
either during or after the termination of Executive’s employment by the Company,
except to the extent necessary to perform Executive’s duties hereunder or as
required by law, use or disclose to any other person or entity outside of the
Company any Confidential Information of the Company or any information received
in confidence by the Company from any third party.  As used in this Agreement,
“Confidential Information” shall mean any and all information not in the public
domain or generally known in the industry of the Company (and information in the
public domain or generally known in the industry only as a result of Executive’s
breach of her obligations of confidentiality to the Company), in any form,
acquired by Executive during the course of Executive’s employment with the
Company, including, without limitation, the Company’s trade secrets and
non-public information relating to the Company’s past, present and future actual
or prospective businesses, Intellectual Property (as defined in Section 10
below), products and services, operations, structure, designs, concepts,
research, software packages, operations, marketing strategies, sources or leads
for and methods of obtaining new business, costs, pricing, financial condition,
customers, vendors, suppliers, distribution methods, supply chain methods,
employees, independent contractors and hiring practices.
 
9.3             No Competition or Interference with Customers and
Suppliers.  Executive agrees that, during the Employment Period and for a period
of one (1) year thereafter (the “Restricted Period”), regardless of whether, or
on what basis, Executive’s employment is terminated prior thereto or any claim
that Executive may have against the Company under this Agreement or otherwise,
Executive shall not, without the prior written consent of the Company, directly
or indirectly, on behalf of herself or on behalf of or in conjunction with any
person or entity (a “Person”), whether as an employee, agent, consultant,
independent contractor, officer, director, principal, shareholder (except as a
holder, for investment purposes only, of not more than one percent (1%) of the
outstanding stock of any company listed on a national securities exchange, or
actively traded in a national over-the-counter market), equity holder, partner,
member, joint venturer, lender, investor or otherwise, attempt to or actually:
 
(a)           solicit, induce, contact or persuade any Customer to terminate,
reduce or refrain from renewing or extending its contractual or other
relationship with the Company in regard to the purchase of products or services
developed, marketed or sold by the Company, or to become a customer of or enter
into any contractual or other relationship with Executive or any other person or
entity for products or services that are the same, similar or otherwise in
competition with the products and services of the Company (collectively,
“Competing Services”); and/or
 
(b)           solicit, induce, contact or persuade any supplier of goods or
services to the Company (“Supplier”) to terminate, reduce or refrain from
renewing or extending its contractual or other relationship with the Company in
regard to the supplying of goods or services to the Company; and/or
 
(c)           offer or provide to any Customer any Competing Services; and/or
 
(d)           engage in the business of providing products or services that are
the same, similar or otherwise in competition with the products and services
that the Company has actually offered or has actively contemplated offering at
any time during the Restricted Period, within the United States.
 
 
6

--------------------------------------------------------------------------------

 
 
For purposes of this Agreement, “Customer” shall mean any company or
individual:  (i) who contacted Executive, whom Executive contacted or served, or
for whom Executive supervised contact or service regarding the actual or
potential purchase of Company products or services during the period of
Executive’s employment by the Company; (ii) who purchased products or services
from the Company during the period of Executive’s employment by the Company;
and/or (iii) who the was an active prospect of the Company for the purchase of
products or services from the Company during the period of Executive’s
employment by the Company.
 
9.4           No Interference with Employees.  Executive agrees that, during the
Restricted Period, regardless of whether, or on what basis, Executive’s
employment is terminated prior thereto or any claim that Executive may have
against the Company under this Agreement or otherwise, Executive shall not,
without the prior written consent of the Company, directly or indirectly, on
behalf of herself or on behalf of or in conjunction with any Person, whether as
an employee, agent, consultant, independent contractor, officer, director,
principal, shareholder (except as a holder, for investment purposes only, of not
more than one percent (1%) of the outstanding stock of any company listed on a
national securities exchange, or actively traded in a national over-the-counter
market), equity holder, partner, member, joint venturer, lender, investor or
otherwise, attempt to or actually, (i) solicit, induce or entice any employee,
consultant or independent contractor of the Company to terminate, reduce or
refrain from renewing or extending such person’s or entity’s business or
employment relationship with the Company; (ii) solicit, induce or entice any
employee of the Company to perform services in competition with those offered by
the Company; (iii) otherwise interfere with the relationship between the Company
and any employee, consultant or independent contractor of the Company; or (iv)
employ or otherwise engage as an employee, independent contractor or consultant
(x) any employee of the Company or (y) any person who was employed by the
Company within the prior twelve-month period.
 
9.5           Non-Disparagement.  During and after Executive’s employment with
the Company, except as may be required by law, Executive must not make any
statement (verbal, written or otherwise) about the Company or its financial
status, business, personnel, directors, officers, consultants, services or
business methods that is intended to or is reasonably likely to disparage or
denigrate the Company.
 
9.6           Notice to Subsequent Employers.  Upon commencing any new
employment or independent contractor relationship during the Restricted Period,
Executive shall expressly advise each new employer and each Person for whom
Executive has agreed to serve as an independent contractor (each, a “New
Employer”) of Executive’s continuing obligations to the Company under this
Agreement and, in particular, this Section 9.
 
 
7

--------------------------------------------------------------------------------

 
 
9.7           Injunctive Relief and Other Remedies.  Executive acknowledges that
a breach of any of the covenants contained in this Section 9 will result in
material irreparable injury to the Company and/or its subsidiaries or affiliates
for which there is no adequate remedy at law, that it will not be possible to
measure damages for such injuries precisely and that, in the event of such a
breach or threat thereof, the Company shall be entitled to obtain a temporary
restraining order and/or a preliminary and/or permanent injunction, without the
necessity of posting a bond or of proving irreparable harm or injury as a result
of such breach or threatened breach of this Section 9, restraining Executive
from engaging in activities prohibited by this Section 9 and such other relief
as may be required specifically to enforce any of the covenants in this Section
9.  The Executive further agrees that, if she breaches any of the provisions of
this Agreement (including any of the covenants contained in this Section 9), to
the extent permitted by law, she shall (i) forfeit her right to receive the
balance of any compensation and/or benefits due her under this Agreement; (ii)
pay over to the Company all compensation, profits, monies, accruals, increments
or other benefits derived or received by Executive as the result of any action
or transaction constituting a breach of any provision hereof; and (iii) pay over
to the Company all costs and expenses incurred by the Company resulting from
Executive’s breach (including, without limitation, reasonable attorneys’ fees
and expenses in dealing with her breach or any suits or actions with regard
thereto) and for all damages (compensatory, along with punitive) that may be
awarded in connection therewith.  The provisions of this section shall not limit
any other remedies available to the Parties as a result of a breach of the
provisions of this Agreement or otherwise.
 
10.           Company’s Intellectual Property Rights. Executive acknowledges and
agrees that all Intellectual Property created, made or conceived by Executive
(solely or jointly), during Executive’s employment by the Company, will be owned
exclusively by the Company whenever the Intellectual Property relates to the
actual or anticipated businesses of the Company or results from or is suggested
by any work performed by employees for or on behalf of the Company.  Executive
further acknowledges and agrees that all such Intellectual Property shall
constitute “works made for hire” under the Copyright Act of 1976.  Executive
agrees (i) to the extent such Intellectual Property is deemed not to be a works
made for hire, that this Agreement shall constitute an assignment to the Company
of the Executive’s rights (including, but not limited to, copyright, trademark,
trade dress, trade secret, design and patent rights), if any, in all such
Intellectual Property, and (ii) to assist the Company, and to take all
reasonable steps, with securing patents, registering copyrights and trademarks,
and obtaining any other forms of protection for the Intellectual Property in the
United States and elsewhere.  As used in this Agreement, “Intellectual Property”
shall mean and include literary works, product designs, artwork, graphic
designs, web site designs, audio-visual works, trademarks, business ideas and
methods, Confidential Information (as defined in Section 9.2 above), and any
other patents, inventions or works of creative authorship.
 
11.           Company Property.  Executive agrees that all drawings, designs,
blueprints, reports, computer programs or data, books, handbooks, manuals, files
(electronic or otherwise), computerized storage media, papers, memoranda,
letters, notes, photographs, facsimile, software, computers, PDAs, Blackberries
and other documents (electronic or otherwise), materials and equipment of any
kind that Executive has acquired or will acquire during the course of
Executive’s employment with the Company are and remain the property of the
Company.  Upon termination of employment with the Company, or sooner if
requested by the Company, Executive agrees to return all such documents,
materials and records to the Company and not to make or take copies of the same
without the prior written consent of the Company.
 
12.           Representations Regarding Prior Work and Legal
Obligations.  Executive acknowledges and agrees that (i) she is not permitted to
make any unauthorized use of documents or other information in her employment
with the Company which could properly be considered or construed to be
confidential or proprietary information of another Person and (ii) she may not
bring any confidential documents or other form of tangible information onto the
Company’s premises relating to any prior employment of Executive.  Executive
represents and warrants that she will adhere to such obligations and that she
has no contractual commitments or other legal obligations that would prohibit
her from entering into this Agreement or performing her obligations and duties
hereunder.
 
 
8

--------------------------------------------------------------------------------

 
 
13.           Indemnification and Liability Insurance.  The Company will
indemnify the Executive and hold her harmless to the fullest extent permitted by
law and its corporate governance documents against and in respect of any and all
actions, suits, proceedings, claims, demands, judgments, costs, expenses
(including advancement of reasonable attorney’s fees), losses, and damages
resulting from Executive’s good faith performance of her duties and obligations
to the Company.  The Company will cover Executive under its directors’ and
officers’ liability insurance in the same amount and to the same extent as the
Company covers its other officers and directors.  If, after the Company
indemnifies Executive hereunder, it is ultimately determined that Executive is
not entitled to have been so indemnified, Executive shall promptly repay to the
Company the full amount for which he was so indemnified.
 
14.           Miscellaneous Provisions.
 
14.1         Section 409A Compliance.  Unless otherwise expressly provided, any
payment of compensation by the Company to Executive, whether pursuant to this
Agreement or otherwise, shall be made within two and one-half months (2½ months)
after the later of the end of the calendar year or the Company’s fiscal year in
which Executive’s right to such payment vests (i.e., is not subject to a
“substantial risk of forfeiture” for purposes of Section 409A of the Internal
Revenue Code of 1986, as amended (“Section 409A”)).  For purposes of this
Agreement, termination of employment shall be deemed to occur only upon
“separation from service” as such term is defined under Section 409A and all
payments and installment payments shall be treated as separate individual
payments for purpose of applying Code Section 409A to such amounts. To the
extent that any severance payments (including payments on termination for “Good
Reason”) come within the definition of “involuntary severance” under Section
409A, such amounts up to the lesser of two times the Executive’s annual
compensation for the year preceding the year of termination or two (2) times the
Section 401(a)(17) limit for the year of termination, shall be excluded from
“deferred compensation” as allowed under Section 409A, and shall not be subject
to the following Section 409A compliance requirements.  All payments of
“nonqualified deferred compensation” (within the meaning of Section 409A) are
intended to comply with the requirements of Section 409A, and shall be
interpreted in accordance therewith. Neither party individually or in
combination may accelerate, offset or assign any such deferred payment, except
in compliance with Section 409A, and no amount shall be paid prior to the
earliest date on which it is permitted to be paid under Section 409A.  In the
event that Executive is determined to be a “key employee” (as defined and
determined under Section 409A) of the Company at a time when its stock is deemed
to be publicly traded on an established securities market, payments determined
to be “nonqualified deferred compensation” payable upon separation from service
shall be made no earlier than (i) the first day of the seventh (7th) complete
calendar month following such termination of employment, or (ii) Executive’s
death, consistent with the provisions of Section 409A.  Any payment delayed by
reason of the prior sentence shall be paid out in a single lump sum at the end
of such required delay period in order to catch up to the original payment
schedule.  All expense reimbursement or in-kind benefits subject to Section 409A
provided under this Agreement or, unless otherwise specified in writing, under
any Company program or policy, shall be subject to the following rules: (i) the
amount of expenses eligible for reimbursement or in-kind benefits provided
during one calendar year may not affect the benefits provided during any other
year; (ii) reimbursements shall be paid no later than the end of the calendar
year following the year in which the Executive incurs such expenses, and the
Executive shall take all actions necessary to claim all such reimbursements on a
timely basis to permit the Company to make all such reimbursement payments prior
to the end of said period, and (iii) the right to reimbursement or in-kind
benefits shall not be subject to liquidation or exchange for another benefit.
Notwithstanding anything herein to the contrary, no amendment may be made to
this Agreement if it would cause the Agreement or any payment hereunder not to
be in compliance with Section 409A.
 
 
9

--------------------------------------------------------------------------------

 
 
14.2         Severability and Blue Penciling.  If any provision of this
Agreement is held to be invalid, the remaining provisions shall remain in full
force and effect.  However, if any court determines that any covenant in this
Agreement or any part thereof is unenforceable because the duration, geographic
scope or restricted activities thereof are overly broad, then such provision or
part thereof shall be modified by reducing the overly broad duration, geographic
scope or restricted activities by the minimum amount so as to make the covenant,
in its modified form, enforceable.
 
14.3         Assignability and Binding Effect.  This Agreement shall inure to
the benefit of and shall be binding upon the heirs, executors, administrators,
successors and legal representatives of Executive, and shall inure to the
benefit of and be binding upon the Company and its successors and assigns, but
the obligations of Executive may not be delegated or assigned.  Executive shall
not be entitled to assign, transfer, pledge, encumber, hypothecate or otherwise
dispose of this Agreement, or any of Executive’s rights hereunder, and any such
attempted delegation or disposition shall be null and void and without
effect.  It is hereby acknowledged and agreed that the Company shall have the
right to assign or transfer all or any part of its rights and obligations
hereunder and that this Agreement and all of the Company’s rights and
obligations hereunder may be assumed by any assignee of or successor to the
Company.
 
14.4         Governing Law and Jurisdiction.  Except to the extent preempted by
federal law, this Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without regard to principles of
conflicts of law.  Additionally, in connection with any proceeding brought to
enforce this Agreement or arising out of Executive’s employment with the
Company, Executive agrees that such proceeding shall be resolved exclusively in
an appropriate state or federal court located in New York, New York and hereby
consents and waives any objection to the jurisdiction of any such court.
 
14.5         Mutual Waiver of Jury Trial.  Each Party hereto hereby waives the
right to trial by jury in any action or proceeding based upon, arising out of,
or in any way relating to this Agreement, Executive’s employment with the
Company or the termination of such employment, whether sounding in contract,
tort or otherwise.
 
 
10

--------------------------------------------------------------------------------

 
 
14.6         Notices.
 
(a)           Any notice or other communications under this Agreement shall be
in writing and shall be delivered by hand, email (provided receipt of such email
is acknowledged by the recipient) or mailed by overnight courier or by
registered or certified mail, postage prepaid:
 
(i)           if to Executive, to Executive’s address on the books and records
of the Company, and
 
(ii)           if to the Company:

c/o Lihua Holdings Limited
Danyang Lihua Electron Co. Ltd.
Houxiang Five-Star Industry District
Danyang City, Jiangsu Province, PRC 212312

with a copy to:

Loeb & Loeb LLP
345 Park Avenue
New York, NY  10154
Attention:  Mitchell S. Nussbaum, Esq.
email: mnussbaum@loeb.com
fax: (212) 504-3103
 
(b)           Any notice so addressed shall be deemed to be given: if delivered
by hand, email or facsimile, on the date of such delivery; if mailed by
overnight courier, on the first business day following the date of such mailing;
and if mailed by registered or certified mail, on the third business day after
the date of such mailing.
 
14.7         Survival of Terms.  All provisions of this Agreement that, either
expressly or impliedly, contain obligations that extend beyond termination of
Executive’s employment hereunder (including, without limitation, those in
Sections 7 and 9-11 above and this Section 14) shall survive the  termination of
this Agreement and of Executive’s employment hereunder for any reason.
 
14.8         Interpretation.  The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.  No provision in this Agreement will be
interpreted in favor of, or against, any of the Parties by reason of the extent
to which any such Party or its counsel participated in the drafting thereof or
by reason of the extent to which any such provision is inconsistent with any
prior draft hereof or thereof.  Accordingly, the language in all parts of this
Agreement shall in all cases be construed according to its fair meaning, and not
strictly for or against any Party.  In this Agreement, unless the context
otherwise requires, the masculine, feminine and neuter genders and the singular
and the plural include one another.
 
 
11

--------------------------------------------------------------------------------

 
 
14.9         Entire Agreement.  This Agreement constitutes the entire
understanding and agreement of the Parties hereto regarding the subject matter
hereof.  This Agreement supersedes all prior negotiations, discussions,
correspondence, communications, understandings and agreements regarding such
subject matter.  The Company and Executive each acknowledge and agree that they
are not relying on, and they may not rely, on any oral or written representation
of any kind that is not set forth in writing in this Agreement.
 
14.10       Waivers and Amendments.  This Agreement may be altered, amended,
modified, superseded or canceled, and the terms hereof may be waived, only by a
written instrument signed by the Parties or, in the case of a waiver, by the
Party waiving compliance.  No delay by any Party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof, nor shall any waiver
on the part of any Party of any such right, power or privilege, nor any single
or partial exercise of any such right, power or privilege, preclude any other or
further exercise thereof or the exercise of any other such right, power or
privilege.
 
14.11       Counterparts.  This Agreement may be executed in counterparts, and
each counterpart, when executed, shall have the efficacy of a signed
original.  Photographic, electronically scanned and facsimiles of such signed
counterparts may be used in lieu of the originals for any purpose.
 
[The remainder of this page is intentionally blank; signature page follows.]
 
 
12

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, the Parties have executed and delivered this Agreement as of
the Effective Date.

LIHUA INTERNATIONAL, INC.
 
By:
/s/ Jianhua Zhu
 
Name: Jianhua Zhu
 
Title: Chief Executive Officer
 
EXECUTIVE
 
By:
/s/ Daphne Yan Huang
 
Daphne Yan Huang

 
 
13

--------------------------------------------------------------------------------