EMPLOYMENT AGREEMENT
 
THIS EMPLOYMENT AGREEMENT (as amended, modified or supplemented and in effect
from time to time, this “Agreement”) is made and entered into this 23rd day of
October 2011 by and between DANYANG LIHUA ELECTRON CO., LTD. (the “Lihua
Electron”), and Yang “Roy” Yu (the “Executive”).
 
WHEREAS, Lihua Electron is the indirect, wholly owned subsidiary of Lihua
International, Inc. (the “Parent”), a Delaware company whose common stock is
listed on The Nasdaq Stock Market, LLC; and
 
WHEREAS, Lihua Electron desires to employ the Executive to provide services to
Lihua Electron, pursuant to the terms of this Agreement, and to provide the same
or similar services under this Agreement to the Parent and Jiangsu Lihua Copper
Industry Co., Ltd.; a PRC limited liability company (together, with Lihua
Electron, the “Company”); and
 
WHEREAS, the Board has approved the employment of the Executive to provide the
services outlined in this Agreement; and
 
WHEREAS, the Executive desires to provide such services pursuant to this
Agreement.
 
NOW THEREFORE, in consideration of the premises and the mutual covenants
contained in this Agreement, the parties agree as follows:
 
ARTICLE I            SELECTED DEFINITIONS
 
1.1           Defined Terms.  As used herein, the terms below shall have the
following meanings:
 
“Board” shall mean the Board of Directors of the Parent.
 
“Business” shall mean the (i) the existing business of the Company, including
Copper Clad Aluminum, Scrap Copper Recycling and Copper Anode; and (ii) such
other businesses as the Company is engaged, or with respect to which the Company
has a written letter of intent, joint venture agreement, acquisition agreement
or other similar written agreement to enter into such other business, at the
date of the termination of the Effective Period.
 
“Cause” shall mean:
 
(a)           the Executive’s conviction for, or entry of a plea of guilty or
nolo contendere or no contest with respect to any felony or a misdemeanor
involving dishonesty or moral turpitude;
 
(b)           the Executive’s (i) willful gross misconduct, including, without
limitation, dishonesty, embezzlement, fraud, theft or other misappropriation or
(ii) willful bad faith act or failure to act that is materially injurious to the
business or reputation of the Company;
 
 
 

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(c)           the Executive’s failure to execute and carry out a reasonable
lawful directive of the Board relating to the Business; or
 
(d)           the Executive’s material breach of any of his obligations
hereunder or the Company’s policies and procedures as in effect from time to
time;
 
“Consent” means any consent, authorization or approval;
 
“Effective Period” shall mean the period commencing on the date hereof and
ending on the first (1st) anniversary of this Agreement (unless earlier
terminated pursuant to this Agreement); provided, however, that the Executive’s
employment may be renewed prior to the first and second anniversary of this
Agreement, upon written notice to the Executive delivered no later than 30 days
prior to each such anniversary;
 
“Good Reason” shall mean the occurrence without the Executive’s written consent
of any of the following circumstances: (i) a material breach by the Company of
any material provision of this Agreement including, but not limited to, failure
to pay salary or benefits when due or the failure to appoint the Executive to
the position provided for in Section 2.1 hereof, provided that, such breach is
not cured by the Company within fifteen (15) days after receipt of the
Executive’s written notification to the Company, specifically in reasonable
detail, the facts and circumstances alleged to constitute such breach; or (ii)
any material adverse alteration of Executive’s position, duties or
responsibilities hereunder, including, without limitation, the duties set forth
in Section 2.1 (except in each case in connection with the termination of
Executive’s employment for Cause or disability or as a result of the Executive’s
death or temporarily as a result of the Executive’s illness or other absence) or
the assignment to Executive of duties or responsibilities materially
inconsistent with Executive’s position as Executive Vice President of Finance of
the Company proved such alteration or assignment is not cured by the Company
within fifteen (15) days after receipt of the Executive’s written notification
to the Company, specifying in reasonable detail the facts and circumstances
alleged to constitute such alteration or assignment;
 
“Governmental Entity” means any government or agency, district, bureau, board,
commission, court, department, official, political subdivision, tribunal, taxing
authority or other instrumentality of any government, whether federal, state or
local, domestic or foreign;
 
“Incentive Plan” shall mean the Parent’s 2009 Omnibus Securities and Incentive
Plan;
 
“Law” means any constitutional provision, statute or other law, rule,
regulation, or interpretation of any Governmental Entity and any Order;
 
 
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“Order” means any decree, injunction, judgment, order, award, ruling, assessment
or writ by a court administrative agency, other Governmental Entity, arbitrator
or arbitration panel;
 
“Restricted Period” means one (1) year from the Termination Date;
 
“Salary” shall mean compensation at a rate of One Hundred and Fifty Thousand
Dollars ($150,000) per annum;
 
“Termination Date” shall mean the effective date of the termination of the
Executive’s employment with the Company;
 
“Termination for Cause” shall mean the discharge of the Executive and
termination of this Agreement for any or all of the items set forth in the
definition of Cause;
 
“Termination for Good Reason” shall mean the termination of this Agreement by
the Executive for Good Reason;
 
“Territory” shall mean the People’s Republic of China.
 
ARTICLE II           EMPLOYMENT
 
2.1           Title: Duties.  The Company agrees to employ the Executive, and
the Executive agrees to serve as the Executive Vice President of Finance of the
Company during the Effective Period.  The Executive shall have all the
responsibilities and power normally associated with such office.  The Executive
shall perform such other duties and services for the Company, if any,
commensurate with the Executive’s position, and as may be designated from time
to time by the Company and the Board.
 
2.2           Performance of Duties
 
2.2.1           The Executive agrees to devote all of his professional time,
attention skills and energies to his duties as Executive Vice President of
Finance and to use his best efforts to perform such duties in an efficient,
trustworthy and businesslike manner.  During the Effective Period the Executive
shall not be employed or engaged in any other business activity, whether or not
such activity is pursued for gain, profit or other pecuniary advantage,
provided, however, the Executive may engage in personal investment activities
for himself and his family and he may engage in charitable and civic activities
and in all such cases, so long as such activities do not interfere with the
performance of his duties hereunder.  The Executive will be based at the
Company’s offices in the Danyang City, China, but his position will require
reasonable travel outside of such area (taking into consideration the nature and
location of the Business, operations, existing and prospective suppliers and
customers).
 
2.2.2           The Executive represents and warrants that he is not bound by
any employment, consulting, non-competition, confidentiality, finders, marketing
or other agreement or arrangement that would or might reasonably be expected to
prohibit or restrict him from performing his duties and obligations hereunder.
 
 
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2.2.3           The Executive shall work no less than five (5) days per week,
eight (8) hours per day, with the average working hours not exceeding forty (40)
hours per week.  The Company may require the Executive to work overtime due to
the business needs of the Company and the Company shall pay the Executive
overtime pay in accordance with its overtime management rules and the relevant
state and local regulations.
 
2.2.4           The Company shall provide the Executive with appropriate working
conditions and facilities with labor protection in accordance with local
standards, and the Executive shall comply with the rules and regulations of work
safety formulated by the Company.
 
ARTICLE III          COMPENSATION AND OTHER FINANCIAL MATERS
 
3.1           Compensation.  The Company shall pay the Salary to the Executive
during the Effective Period in arrears in equal installments pursuant to the
Company’s customary payroll policies in force at the time of payment, less
payroll taxes and other deductions required by applicable law and other
deductions authorized in writing by the Executive.  The Company shall have the
right, after review and recommendation of the Compensation Committee of the
Board of Directors, to adjust the Salary and welfare of the Executive
appropriately based on the capability, experience, attitude, performance,
achievement and position of the Executive, as well as according to the Salary
and position adjustment policies and business conditions experienced by the
Company.
 
3.2           Deductions.  The Company shall deduct the individual income tax of
the Executive and the portion of the society insurance and other welfare
benefits which are to be borne by the Executive from the salary payable to the
Executive in accordance with the relevant PRC laws and regulations.
 
3.3           Insurance, Welfare and Leave.  The parties shall pay premiums for
social security insurance schemes, such as Pension, Unemployment and Medical
Insurance, in accordance with relevant PRC laws and regulations.
 
3.4           Bonus.  The Company, in the sole discretion of the Compensation
Committee of the Board, may pay to the Executive an annual bonus of up to
$30,000, payable at such time as is consistent with the Company’s past practice,
and subject to the Company’s ordinary payroll practice.
 
3.5           Benefits.  During the Effective Period, the Executive will be
entitled to receive and take such number of paid vacation days per year
consistent with Company’s prior practices, which may be taken at such times and
for such periods as are reasonable, taking into account the best interests of
the Company, after consultation with the Board.  The Company shall provide the
Executive with such insurance, medical, dental, sick leave, holiday and other
benefits as may be given and amended from time to time to other senior
management of the Company, with such benefits shall be materially consistent
with the Company’s prior practices.
 
 
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3.6           Reimbursement of Expenses.  The Company will reimburse the
Executive for all ordinary and necessary business expenses incurred by the
Executive during the Effective Period in connection with the Business subject to
budgets and guidelines established by the Company from time to
time.  Reimbursement of such expenses shall be paid in accordance with the
Company’s customary policies in force at the time of payment, upon submission by
the Executive of receipts and vouchers, itemizing such expenses in a form
reasonably satisfactory to the Company, properly identifying the nature and
business purpose of any expenditures.
 
3.7           Stock Grant.  The Executive shall receive a 10-year nonqualified
stock option to purchase up to 100,000 shares of common stock of the Parent,
awarded pursuant to the Incentive Plan, with an exercise price equal to the
closing price of one share of common stock of the Parent on the date hereof,
which shall vest in installments of 40,000 shares, 30,000 shares and 30,000
shares on the first, second and third year anniversaries of the date of this
Agreement, respectively, so long as the Executive remains employed as an officer
by the Company at each such vesting date.
 
ARTICLE IV          TERMINATION OF EMPLOYMENT
 
4.1           Termination by the Company for “Cause.”  The Company shall have
the right, acting by Board resolution to effect a Termination for Cause by
written notice provided to the Executive, provided, however, that if any such
“Cause” is under clause (c) or (d) of the definition of Cause, the Company shall
not terminate the Executive’s employment under this Section 4.1, unless the
Company first gives the Executive written notice of its intention to terminate
and of the specific grounds therefor and the Executive has not within fifteen
(15) days following receipt of such notice cured any such events that are
capable of being cured and that constitute the “Cause” (such fifteenth (15th)
day being the Termination Date if no cure is achieved).  Subject to the
foregoing provision, the Termination Date of a Termination for Cause under this
Section 4.1 shall be the date specified in a written notice of termination to
the Executive.
 
4.2           Termination by the Company due to Disability of the
Executive.  The Company shall have the right to discharge the Executive and
terminate this Agreement by written notice provided to the Executive not less
than fifteen (15) days prior to the intended date of discharge and termination
(such intended date being the Termination Date), if Executive has failed to
materially perform the essential functions required by his employment by reason
of any medically determined physical or mental impairment which has lasted for a
continuous period of not less than ninety (90) days or for an aggregate of one
hundred and twenty (120) business days during any twelve (12) month period,
provided that no such discharge or termination shall be effective if prior to
the date when such notice is given, the Executive’s impairment shall have
terminated and he shall be physically and mentally able to engage, and he shall
be engaging in such activities.
 
4.3           Death.  The Effective Period shall terminate forthwith upon the
death of the Executive.  The date of death shall be the Termination Date.
 
4.4           Termination by the Executive for “Good Reason”.  The Executive
shall have the right to effect a Termination for Good Reason by written notice,
provided to the Company not less than thirty (30) days prior to the intended
date of termination.  If no cure is achieved during the thirty (30) day cure
period, the Termination Date shall be the last date of the thirty (30) day
notice period provided in this Section 4.4.
 
 
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4.5           Termination by the Executive for any reason other than Good
Reason, Death or Disability.  The Executive shall have the right to effect a
Termination for any reason other than Good Reason, Death or Disability by
written notice provided to the Company not less than ninety (90) days prior to
the intended date of termination.
 
ARTICLE V           EFFECT OF TERMINATION OF EMPLOYMENT
 
5.1           Termination of Employment by the Company.
 
5.1.1           In the event of termination of the Executive’s employment by the
Company for Cause, the Executive shall be entitled to continue to receive from
the Company through the Termination Date the Salary in accordance with the
Section 3.1 hereof, the benefits in accordance with Section 3.5 hereof, and
applicable PRC laws.
 
5.1.2           In the event of termination of the Executive’s employment due to
the Executive’s disability or death, the Executive (or, if applicable, his
estate) shall be entitled to continue to receive from the Company, or the
Company to pay for, through the six month anniversary of the Termination Date,
the Salary in accordance with Section 3.1 hereof, the benefits in accordance
with Section 3.5 hereof, and applicable PRC laws.
 
5.1.3           In the event of termination of the Executive’s employment by the
Company other than for Cause, disability or death or by the Executive for Good
Reason, the Executive (or, if applicable, his estate) shall be entitled to
continue to receive from the Company, or the Company to pay for, through the
first anniversary of the Termination Date, the salary in accordance with Section
3.1 hereof and the benefits in accordance with Section 3.5 hereof.  Any Salary
and benefits paid after the Termination Date shall be subject to the Executive’s
continued compliance in all material respects with Article 6 hereof and the
execution and delivery of a separation agreement and general release (other than
of the Company’s obligations under this Agreement) in form reasonably acceptable
to the Board.
 
5.2           Termination of Employment by the Executive.  In the event of
termination of the Executive’s employment by the Executive for any reason other
than for Good Reason the Executive shall be entitled to receive from the Company
through the Termination Date, the Salary in accordance with Section 3.1 hereof,
the benefits in accordance with Section 3.5 hereof, and applicable PRC laws.
 
ARTICLE VI          NON-COMPETITION/NON-SOLICITATION; NON-DISCLOSURE AND
NON-USE; NON-DISPARAGEMENT; EQUITABLE RELIEF
 
6.1           Non-Solicitation.
 
6.1.1           In consideration of the Executive’s employment with the Company
and his participation in the Incentive Plan, which the Executive acknowledges is
of direct benefit to the Executive, the Executive hereby covenants that during
the Effective Period and the Restricted Period the Executive and his affiliates
shall not directly or indirectly through any other individual person or entity,
(i) employ, solicit or induce any individual who is or was at any time during
the one (1) year period prior to the Termination Date, an employee or consultant
of the Company, or (ii) cause such individual to terminate or refrain from
renewing or extending his or her employment by or consulting relationship with
the Company.
 
 
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6.1.2           In consideration of the Executive’s employment with the Company
and his participation in the Incentive Plan, which the Executive acknowledges is
of direct benefit to the Executive, the Executive hereby covenants that during
the Effective Period and the Restricted Period the Executive and his affiliates
shall not directly or indirectly through any other individual person or entity,
solicit, persuade or induce any Customer (as defined below) 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 performed,
manufactured, rented or sold by the Company or any other individual, person or
entity in regard to the purchase of products or services similar or identical to
those performed, manufactured, marketed, rented or sold by the Company.  For
purposes hereof, “Customer” means any individual, person or entity which is a
customer of the Company or which was a customer of the Company within one (1)
year prior to the Termination Date.
 
6.1.3           In consideration of the Executive’s employment with the Company
and his participation in the Incentive Plan, which the Executive acknowledges is
of direct benefit to the Executive, the Executive hereby covenants that during
the Effective Period and the Restricted Period the Executive and his affiliates
shall not directly or indirectly through any other individual, person or entity,
solicit, persuade or induce any Supplier (as defined below) to terminate, reduce
or refrain from renewing or extending his, her or its contractual or other
relationship with the Company, directly or indirectly in regard to this sale of
products or services similar or identical to those performed, manufactured,
marketed or sold or purchased by the Company.  For purposes hereof, “Supplier”
shall mean any individual, person or entity which is a supplier of any product
or service to the Company or which was a supplier to the Company within one (1)
year prior to the Termination Date.
 
6.2           Non-Compete.  In consideration for the Executive’s employment with
the Company and his participation in the Incentive Plan, which the Executive
acknowledges is of direct benefit to the Executive, the receipt and sufficiency
of which is hereby acknowledged, the Executive hereby covenants that during the
Effective Period and the Restricted Period the Executive shall not directly or
indirectly, in his, her and its own capacity or through one or more affiliates,
whether as owner, consultant, executive, partner, member, manager, officer,
director, venturer, agent through stock ownership, investment of capital,
lending of money or property, rendering of services or otherwise, engage or
assist others to engage in the Business in the Territory, provided, that the
Executive may own up to 4.99% percent of the outstanding shares of a company
engaged in such Business if such shares are listed on The Nasdaq Stock Market,
LLC or another national securities exchange.
 
 
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6.3           Non-Disclosure and Non-Use.  Without the prior written consent of
the Company, neither the Executive nor his/her affiliates shall disclose any
confidential information of the Company with respect to the Business, which any
of its respective officers, directors, employees, counsel, agents, investment
bankers, or accountants, may now possess or may hereafter create or obtain
relating to, without limitation know-how, trade secrets, customer lists,
supplier lists, referral source lists, costs, profits or margin information,
markets, sales, pricing policies, operational methods, plans for future
development, data drawings, samples, processes, products, software, the
financial condition, results of operations, business, properties, assets,
liabilities, or future prospects of the Company with respect to the Business and
such information shall not be published, disclosed or made accessible by any of
them to any other Person or entity or used by any of them, provided, however,
that the Executive may disclose or use any such information (i) as has become
generally available to the public other than through a breach of this Agreement
by the Executive or any of its affiliates and representatives, (ii) as becomes
available to the Executive on a non-confidential basis from a source other than
any other party hereto or such other party’s affiliates or representatives,
provided that such source is not known or reasonably believed by the Executive
to be bound by a confidentiality agreement or other obligations of secrecy,
(iii) as may be required in any report, statement or testimony required to be
submitted to any Governmental Entity having or claiming to have jurisdiction
over it, or as may be otherwise required by applicable Law, or as may be
required in response to any summons or subpoena or in connection with any
litigation, (iv) as may be required to obtain any governmental approval or
Consent required in order to consummate the transactions contemplated by this
Agreement or (v) as may be necessary to establish the Executive’s rights under
this Agreement; provided, further, that in the case of clauses (i), (iii), and
(iv), the Executive shall promptly notify the party to whom it is obliged to
keep such information confidential and, to the extent practicable, provide such
party a reasonable opportunity to prevent public disclosure of such information.
 
6.4           Non-Disparagement.  The Executive agrees not to (i) in any way
publicly disparage the Company, equity holders, officers, directors, employees
or agents or the Company, (ii) cause embarrassment or public humiliation to such
entitles or persons, or (iii) make any public statement that is adverse,
inimical or otherwise detrimental to the interests of any such entities or
persons or the Business.
 
6.5           Developments.  The Executive acknowledges that the Company, at the
Company’s expense, has acquired, created and maintains, and will continue to
acquire, create and maintain, significant goodwill with its current and
prospective customers, vendors and employees, and that such goodwill is valuable
property of the Company.  The Executive further acknowledges that to the extent
such goodwill will be generated through the Executive’s efforts, such efforts
will be funded by the Company and the Executive will be fairly compensated for
such efforts. The Executive acknowledges that all goodwill developed by the
Executive relative to the Company’s customers, vendors and employees will be the
sole and exclusive property of the Company and will not be personal to the
Executive.  In consideration for the Executive’s employment with the Company and
his participation in the Incentive Plan, which the Executive acknowledges is of
direct benefit to the Executive, the receipt and  sufficiency of which is hereby
acknowledged, the Executive hereby covenants that:
 
6.5.1           All work, designs, materials (tangible and intangible) and
products produced, developed, created or completed by the Executive on behalf of
the Company during the Effective Period shall be deemed “work made for hire,” as
such term is defined under the copyright laws of the United States, and are
expressly intended to be wholly owned, and all copyright rights therein to be
held, by the Company.  To the extent that any such copyrightable works may not,
by operation of law, be works for hire, the executive agrees to and hereby does
assign to the Company ownership of all copyright rights in those works.  Each
Person within the Company shall have the right to obtain and hold in his/her own
name copyrights, registrations and similar protection which may be available for
those works.  The Executive agrees to give the Company all assistance it may
reasonably require to secure or protect those rights.
 
 
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6.5.2           All discoveries, developments, ideas, improvements,
modifications, innovations, inventions, processes, programs, operating
instructions, manuals, documentation, discs, tapes, written materials, systems,
techniques, hardware, software, test procedures or other things, whether or not
patentable (referred to herein as “Inventions”), that are made, conceived or
reduced to practice by the Executive, while employed by the Company, solely or
with others, whether or not during working hours or on the Company’s premises,
and that (i) relate to the Business or actual or demonstrably anticipated
research or development or a reasonable or contemplated expansion thereof, or
(ii) result from any work performed by the Executive for the Company, or (iii)
are developed on the Company’s time or using the Company’s equipment, supplies,
facilities or trade secret information, or (iv) are based upon or are related to
trade secrets and other confidential information of the Company shall be the
property of, and shall promptly be disclosed by the Executive to the Company.
 
6.5.3           At any time during or after the Effective Period, the Executive
shall, without further compensation but at the Company’s sole expense, sign all
papers and cooperate in all other acts reasonably required to secure or protect
the Company’s rights in all such property identified in subsection 6.5.1 and
6.5.2 above, including without limitation executing written assignments therefor
and applying for, obtaining and enforcing copyrights or patents thereon in any
and all countries.  In the event that the Executive is unable or unavailable or
shall refuse to sign any lawful or necessary documents required in order for the
Company to apply for and obtain any copyright or patent with respect to any work
performed by the Executive under this Agreement (including applications or
renewals, extensions, divisions or continuations), the Executive hereby
irrevocably designates and appoints the Company and its duly authorized officers
and agents as his agents and attorneys-in-fact to act for and in the Executive’s
behalf, and in Executive’s place and stead, to execute and file any such
applications or documents and to do all other lawfully permitted acts to further
the prosecution and issuance of copyrights and patents with respect to such new
developments with the same legal force and effect as if executed by the
Executive.
 
6.6          Equitable Relief. The Executive acknowledges that a breach of the
covenants contained in this Article 6, may cause irreparable damage to the
Business and the Company, the amount of which will be difficult to ascertain,
and that the remedies at law for any such breach will be inadequate.
Accordingly, the Executive agrees that, in addition to any other remedy which
may be available at law or in equity, any person within the Company shall be
entitled to specific performance and injunctive relief with or without posting a
bond (as determined by a court of competent jurisdiction) to prevent any actual,
intended or likely breach. The parties acknowledge that the time, scope and
other provisions of this Article 6 have been specifically negotiated by
sophisticated commercial parties, each with separate qualified counsel, and
agree that all such provisions are reasonable under the circumstances and fair
and necessary to protect the interests of the Company and to prevent the
Executive from unfairly taking advantage of contacts established during
employment by the Company. Accordingly, except to the extent provided in the
last sentence of this Section 6.6, the Executive agrees not to contest the
validity or enforceability of any provision of Article 6 of this Agreement. In
the event that any provision in this Article 6 or any other provision contained
in this Agreement shall be determined by any arbitrator or any court of
competent jurisdiction to be unenforceable such provisions shall be interpreted
to extend only over the maximum period of time for which they may be enforceable
and/or over the maximum geographical area as to which it may be enforceable
and/or to the maximum extent in all other respects as to which they may be
enforceable, all as determined by any arbitrator or such court in such action so
as to be enforceable to the extent consistent with then applicable law.
 
 
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ARTICLE VII        MISCELLANEOUS PROVISIONS
 
7.1           Assignment and Successors.  The rights and obligations of the
Company under this Agreement may be assigned and shall inure to the benefit of
and be binding upon the successors and assigns of the Company, provided, that
the Company may not assign this Agreement except to its affiliates, pursuant to
a reorganization of the Company and any attempt to do so shall be void.  The
Executive’s rights or obligations hereunder may not be assigned to or assumed by
any other person, provided that the rights of the Executive hereunder shall
inure to the benefit of the heirs and personal representatives of the
Executive.  No other persons shall have any right, benefit or obligation
hereunder.
 
7.2           Notices.  Any notice, request, instruction or other document or
communication to be given hereunder shall be in writing and shall be deemed to
have been duly given (i) if mailed, at the time when mailed in any general or
branch office of the United States Postal service, enclosed in a registered or
certified postage-paid envelope, (ii) if sent by facsimile transmission, when so
sent and receipt acknowledged by an appropriate facsimile receipt, or (iii) if
sent by other means (including e-mail), when actually received by the party to
which such notice has been directed, in each case at the respective addresses or
numbers set forth below or such other address or number as such party may have
fixed by notice; provided, however, that in the event of delivery under clauses
(ii) or (iii) (otherwise than by receipted hand delivery), such notice shall be
promptly followed by notice pursuant to clause (i);
 
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.
Fax: (212) 504-3103
 
 
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If to the Executive:

Building 503 3B, 10 Nanhunan Road
Beijing, China, 100102
Attn: Mr. Roy Yu
 
7.3           Severability.  If any provision or portion of this Agreement shall
be or become illegal, invalid or unenforceable in whole or in part for any
reason, such provision shall be ineffective only to the extent of such
illegality, invalidity or unenforceability without invalidating the remainder of
such provision or the remaining provisions of this Agreement.  Upon such
determination that any term or other provision is illegal, invalid, or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that the agreements contemplated
hereby are fulfilled to the extent possible.
 
7.4           Amendment, Waiver etc..  This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersedes all  prior agreements between the parties with respect to the
subject matter hereof and incorporates and supersedes all prior agreements
between the parties concerning the employment of the Executive of the Company
and may be modified or amended only by a mutual written agreement of the Board,
acting by resolution, and the Executive.  There are no other agreements,
conditions or representations, oral or written, express or implied, with regard
thereto.
 
7.5           Counterparts.  This Agreement may be executed and delivered
(including by facsimile or PDF transmission) in counterparts, and by the
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original, but all of which taken
together shall constitute one and the same agreement.
 
7.6           Non-Waiver of Rights and Breaches.  No failure or delay of any
party hereto in the exercise of any right given to such party hereunder shall
constitute a waiver thereof unless the time specified herein for the exercise of
such right has expired, nor shall any single or partial exercise of any right
preclude other or further exercise thereof or of any other right.  The waiver of
a party hereto of any default of any other party shall not be deemed to be a
waiver of any subsequent default or other default by such party, whether similar
or dissimilar in nature.
 
7.7           Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE PEOPLE’S REPUBLIC OF CHINA.
 
7.8           Dispute Resolution: Consent to Jurisdiction.  Any dispute,
controversy or claim arising out of or relating to this Agreement shall be
settled by binding and final arbitration in Beijing City under the commercial
arbitration rules of the People’s Republic of China then existing.  The decision
of the arbitration shall be final and judgment on the arbitration award may be
entered in any court having jurisdiction of the subject matter over the
controversy.
 
7.9           Expenses.  Each party shall bear his or its own fees and expenses
in connection with the preparation, negotiation and execution of this Agreement.
 
 
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7.10         Survival.  Unless otherwise provided herein, the provisions of
Articles 6 and 7 hereof shall survive the termination of the Effective Period or
termination of this Agreement and shall cease to survive upon the end of the
period provided for in Article 6.
 
7.11         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.  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 hereto.  In this Agreement, unless the context
otherwise requires, the masculine, feminine and neuter genders and the singular
and the plural include one another.
 
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IN WITNESS WHEREOF, the parties, intending to be legally bound, executed this
Agreement as of the date first above written.

DANYANG LIHUA ELECTRON CO., LTD.
 
By:
/s/ Jianhua Zhu  
Name: Jianhua Zhu
 
Title: Chief Executive Officer
 
EXECUTIVE
 
By:
/s/ Yang “Roy” Yu  
Name: Yang “Roy” Yu

 
 
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