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Exhibit 10.1

INDEPENDENT DIRECTOR AGREEMENT

THIS INDEPENDENT DIRECTOR AGREEMENT (this “Agreement”) is made effective as of
March 14, 2011 by and between Longhai Steel Inc. (the “Company”), and Mr. Joel
Mayersohn (“Director”).

WHEREAS, the Company seeks to attract and retain as directors, capable and
qualified persons to serve on the Company’s board of directors (the “Board”);
and

WHEREAS, the Company has requested and received from Director certain
information regarding Director’s qualifications and fitness to serve on the
Board and has considered and relied upon the accuracy of such information in
offering Director the opportunity to serve on the Board; and

WHEREAS, the Company believes that Director possesses the necessary
qualifications and abilities to serve as a director of the Company and to
perform the functions and meet the Company’s needs related to its Board.

NOW, THEREFORE, the parties agree as follows:

  1. Service to the Board.

(a)           Service as a Director. Director will serve for a period of three
years (the “term”) as a director of the Company in accordance with the bylaws of
the Company and perform all duties as a director of the Company, including
without limitation (1) attending meetings of the Board, (2) serving on such
committees of the Board (each a “Committee”) to which Director has been
appointed hereunder, (3) attending meetings of each Committee of which Director
is a member and (4) performing Director’s duties on behalf of the Company in
good faith and in a manner that is not opposed to the best interests of the
Company.

(b)           Service on Committees. Director will serve on the following
committees and in the capacities stated:

  Member Chairperson

Audit Committee

X  

Compensation/Nominating Committee

  X

Corporate Governance Committee

X  

To the extent Director serves as Audit Committee Chairperson, Director agrees
that Director is also serving as the financial expert for purposes of filings
before the Securities and Exchange Commission.

2.            Term. The term of this Agreement shall commence as of the date of
Director’s appointment by the Board of Directors of the Company and shall
continue until the Director’s removal or resignation.

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  3. Compensation and Expenses.

(a)            Director Compensation. In recognition of the services provided by
and to be provided by Director, the Company agrees to issue to Director an
aggregate of 6000 restricted shares of the Company’s common stock per annum
(such issuance, the “Compensation”), half of the restricted shares to be granted
on the date that is six (6) months following the Company’s NASDAQ listing, and
half the annual Compensation to be granted on each six (6) month interval
thereafter (each such date a “grant date”).

The Board reserves the right to change the Compensation from time to time, to
take into consideration the responsibilities associated with different
committees in setting Compensation levels and to grant additional restricted
shares periodically, which may vary from the terms described in this section. If
Director ceases to serve as a director on the Company’s Board at any time and
for any reason prior to a grant date associated with any restricted shares, all
restricted shares described in the restricted share agreement that have not been
granted as of such time of cessation of services will not be granted, with the
exception of the 3000 shares for the first six months of service. All such
cancelled or forfeited restricted shares shall be returned to the Company’s
incentive pool.

(b)           Expenses. The Company will reimburse Director for all reasonable,
out-of-pocket expenses, approved by the Company in advance, incurred in
connection with the performance of Director’s duties under this Agreement and
any reasonable travel and accommodation expenses incurred in attending meetings
of the Board (“Expenses”), upon submission of receipts (or other sufficient
documentary support) and a written request for payment.

(c)           Future Compensation and Benefits. The Board, with the compensation
committee, reserves the right to determine the compensation for services
provided under this Agreement. The Board may from time to time authorize
additional compensation and benefits for Director, including stock options and
restricted stock.

(d)           Insurance and Indemnification. This Agreement is effective only
when the directors’ and officers’ insurance policy previously shown to the
Director covering the Director is in place and an Indemnification Agreement
satisfactory to the Director is signed by the Company. When and if the Company
anticipates the successful qualification of its common stock for trading on the
NASDAQ Stock Exchange or any similar exchange for securities trading, the
Company shall amend its existing directors’ and officers’ insurance policy to
increase limits available to independent directors by approximately $5,000,000
or a lesser or greater amount which is determined and approved by the Board to
be appropriate, with such insurance effective on date of such listing or as soon
thereafter as possible, provided that such increase is in the best interests of
the Company and its shareholders.

The Company has provided the Director with a summary of the limits and terms of
its current Directors’ and Officers’ Liability Insurance (the “D&O Insurance”)
and the provisions of its corporate by-laws and governing documents dealing with
indemnification of directors (the “Indemnification Provisions”). To the fullest
extent permitted by applicable law, the Company agrees that it will not
voluntarily change the terms of such D&O Insurance or the Indemnification
Provisions to the detriment of the Director at anytime while he is entitled to
benefit of such D&O Insurance or Indemnification Provisions.

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4.           Confidentiality. The Company and Director each acknowledge that, in
order for the intents and purposes of this Agreement to be accomplished,
Director shall necessarily be obtaining access to certain confidential
information concerning the Company and its affairs, including, but not limited
to business methods, information systems, financial data and strategic plans
which are unique assets of the Company (“Confidential Information”). Director
covenants not to, either directly or indirectly, in any manner, utilize or
disclose to any person, firm, corporation, association or other entity any
Confidential information.

5.           Termination. With or without cause, the Company and Director may
each terminate this Agreement at any time upon ten (10) days’ written notice,
and the Company shall be obligated to pay to Director the compensation and
expenses due up to the date of the termination. Nothing contained herein or
omitted herefrom shall prevent the shareholder(s) of the Company from removing
Director with immediate effect at any time for any reason.

6.           Amendments and Waiver. No supplement, modification or amendment of
this Agreement will be binding unless executed in writing by both parties. No
waiver of any provision of this Agreement on a particular occasion will be
deemed or will constitute a waiver of that provision on a subsequent occasion or
a waiver of any other provision of this Agreement.

7.           Binding Effect. This Agreement will be binding upon and inure to
the benefit of and be enforceable by the parties and their respective successors
and assigns.

8.           Severability. The provisions of this Agreement are severable, and
any provision of this Agreement that is held by a court of competent
jurisdiction to be invalid, void, or otherwise unenforceable in any respect will
not affect the validity or enforceability of any other provision of this
Agreement.

9.           Governing Law. This Agreement will be governed by and construed and
enforced in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed in that state without giving effect to the
principles of conflicts of laws.

10.           Notice. Any and all notices referred to herein shall be sufficient
if furnished in writing at the addresses specified on the signature page hereto
or, if to the Company, to the Company’s address as specified in filings made by
the Company with the U.S. Securities and Exchange Commission.

11.           Assignment. The rights and benefits of the Company under this
Agreement shall be transferable, and all the covenants and agreements hereunder
shall inure to the benefit of, and be enforceable by or against, its successors
and assigns. The duties and obligations of Director under this Agreement are
personal and therefore Director may not assign any right or duty under this
Agreement without the prior written consent of the Company.

12.           Entire Agreement. Except as provided elsewhere herein, this
Agreement sets forth the entire agreement of the parties with respect to its
subject matter and supersedes all prior agreements, promises, covenants,
arrangements, communications, representations or warranties, whether oral or
written, by any officer, employee or representative of any party to this
Agreement with respect to such subject matter.

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13.           Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one instrument.
Facsimile execution and delivery of this Agreement is legal, valid and binding
for all purposes.

IN WITNESS WHEREOF, the parties hereto have caused this Independent Director
Agreement to be duly executed and signed as of the day and year first above
written.

  LONGHAI STEEL INC.             By: /s/ Dr. Eberhard Kornotzki       Name: Dr.
Eberhard Kornotzki       Title: Chief Financial Officer                        
DIRECTOR               By: /s/ Joel D. Mayersohn       Name: Mr. Joel Mayersohn
      Address:  

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INDEMNIFICATION AGREEMENT

This Indemnification Agreement (this “Agreement”), dated as of the 14th day of
March 2011 is made by and between Longhai Steel Inc., a Nevada corporation (the
“Company”), and Mr. Joel Mayersohn, an independent director of the Company (the
“Indemnitee”).

RECITALS

A.           The Company and the Indemnitee recognize that the present state of
the law is too uncertain to provide the Company’s officers and directors with
adequate and reliable advance knowledge or guidance with respect to the legal
risks and potential liabilities to which they may become personally exposed as a
result of performing their duties for the Company;

B.           The Company and the Indemnitee are aware of the substantial growth
in the number of lawsuits filed against corporate officers and directors in
connection with their activities in such capacities and by reason of their
status as such;

C.           The Company and the Indemnitee recognize that the cost of defending
against such lawsuits, whether or not meritorious, is typically beyond the
financial resources of most officers and directors of the Company;

D.           The Company and the Indemnitee recognize that the legal risks and
potential liabilities, and the threat thereof, associated with proceedings filed
against the officers and directors of the Company bear no reasonable
relationship to the amount of compensation received by the Company’s officers
and directors;

E.           Section 78.7502 of the Nevada Revised Statutes empowers Nevada
corporations to indemnify their officers and directors and further states that
the indemnification provided by Section 78.7502 shall not be deemed exclusive of
any other rights to which those seeking indemnification may be entitled under
the articles of incorporation or any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in an official capacity
and as to action in another capacity while holding such office; thus, Section
78.7502 does not by itself limit the extent to which the Company may indemnify
persons serving as its officers and directors;

F.           The Company’s Articles of Incorporation and Bylaws authorize the
indemnification of the officers and directors of the Company in excess of that
expressly permitted by Section 78.7502;

G.           The Board of Directors of the Company has concluded that, to retain
and attract talented and experienced individuals to serve as officers and
directors of the Company and to encourage such individuals to take the business
risks necessary for the success of the Company, it is necessary for the Company
to contractually indemnify its officers and directors, and to assume for itself
liability for expenses and damages in connection with claims against such
officers and directors in connection with their service to the Company, and has
further concluded that the failure to provide such contractual indemnification
could result in great harm to the Company and its stockholders;

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H.           The Company desires and has requested the Indemnitee to serve or
continue to serve as a director or officer of the Company, free from undue
concern for the risks and potential liabilities associated with such services to
the Company; and

I.           The Indemnitee is willing to serve, or continue to serve, the
Company, provided, and on the expressed condition, that the Indemnitee is
furnished with the indemnification provided for herein.

AGREEMENT

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

  1. DEFINITIONS.

(a)           “EXPENSES” means, for the purposes of this Agreement, all direct
and indirect costs of any type or nature whatsoever (including, without
limitation, any fees and disbursements of Indemnitee’s counsel, accountants and
other experts and other out-of-pocket costs) actually and reasonably incurred by
the Indemnitee in connection with the investigation, preparation, defense or
appeal of a Proceeding; provided, however, that Expenses shall not include
judgments, fines, penalties or amounts paid in settlement of a Proceeding.

(b)           “PROCEEDING” means, for the purposes of this Agreement, any
threatened, pending or completed action or proceeding, whether civil, criminal,
administrative or investigative (including an action brought by or in the right
of the Company) in which Indemnitee may be or may have been involved as a party
or otherwise, by reason of the fact that Indemnitee is or was a director or
officer of the Company, by reason of any action taken by Indemnitee or of any
inaction on his or her part while acting as such director or officer or by
reason of the fact that he or she is or was serving at the request of the
Company as a director, officer, employee or agent of another foreign or domestic
corporation, partnership, joint venture, trust or other enterprise, or was a
director or officer of the foreign or domestic corporation which was a
predecessor corporation to the Company or of another enterprise at the request
of such predecessor corporation, whether or not he or she is serving in such
capacity at the time any liability or expense is incurred for which
indemnification or reimbursement can be provided under this Agreement.

  2. AGREEMENT TO SERVE.

Indemnitee agrees to serve or continue to serve as a director or officer of the
Company to the best of his or her abilities at the will of the Company or under
separate contract, if such contract exists, for so long as Indemnitee is duly
elected or appointed and qualified or until such time as the Indemnitee tenders
his or her resignation in writing. Nothing contained in this Agreement is
intended to create in Indemnitee any right to continued employment.

  3. INDEMNIFICATION.

(a)           THIRD PARTY PROCEEDINGS. The Company shall indemnify Indemnitee
against Expenses, judgments, fines, penalties or amounts paid in settlement (if
the settlement is approved in advance by the Company) actually and reasonably
incurred by Indemnitee in connection with a Proceeding (other than a Proceeding
by or in the right of the Company) if Indemnitee acted in good faith and in a
manner Indemnitee reasonably believed to be in the best interests of the
Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe Indemnitee’s conduct was unlawful. The termination
of any Proceeding by judgment, order, settlement, conviction, or upon a plea of
NOLO CONTENDERE or its equivalent, shall not, of itself, create a presumption
that Indemnitee did not act in good faith and in a manner which Indemnitee
reasonably believed to be in the best interests of the Company, or, with respect
to any criminal Proceeding, had no reasonable cause to believe that Indemnitee’s
conduct was unlawful.

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(b)           PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY. To the fullest
extent permitted by law, the Company shall indemnify Indemnitee against Expenses
and amounts paid in settlement, actually and reasonably incurred by Indemnitee
in connection with a Proceeding by or in the right of the Company to procure a
judgment in its favor if Indemnitee acted in good faith and in a manner
Indemnitee reasonably believed to be in the best interests of the Company and
its stockholders. Notwithstanding the foregoing, no indemnification shall be
made in respect of any claim, issue or matter as to which Indemnitee shall have
been adjudged liable to the Company in the performance of Indemnitee’s duty to
the Company and its stockholders unless and only to the extent that the court in
which such action or Proceeding is or was pending shall determine upon
application that, in view of all the circumstances of the case, Indemnitee is
fairly and reasonably entitled to indemnity for Expenses and then only to the
extent that the court shall determine.

(c)           SCOPE. Notwithstanding any other provision of this Agreement but
subject to Section 14(b), the Company shall indemnify the Indemnitee to the
fullest extent permitted by law, notwithstanding that such indemnification is
not specifically authorized by other provisions of this Agreement, the Company’s
Articles of Incorporation, the Company’s Bylaws or by statute.

  4. LIMITATIONS ON INDEMNIFICATION.

Ally other provision herein to the contrary notwithstanding, the Company shall
not be obligated pursuant to the terms of this Agreement:

(a)           EXCLUDED ACTS. To indemnify Indemnitee for any acts or omissions
or transactions from which a director may not be relieved of liability under
applicable law;

(b)           EXCLUDED INDEMNIFICATION PAYMENTS. To indemnify or advance
Expenses in violation of any prohibition or limitation on indemnification under
the statutes, regulations or rules promulgated by any state or federal
regulatory agency having jurisdiction over the Company.

(c)           CLAIMS INITIATED BY INDEMNITEE. To indemnify or advance Expenses
to Indemnitee with respect to Proceedings or claims initiated or brought
voluntarily by Indemnitee and not by way of defense, except with respect to
Proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other statute or law or otherwise as required under
Section 78.7502 of the Nevada Revised Statutes, but such indemnification or
advancement of Expenses may be provided by the Company in specific cases if the
Board of Directors has approved the initiation or bringing of such suit;

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(d)           LACK OF GOOD FAITH. To indemnify Indemnitee for any Expenses
incurred by the Indemnitee with respect to any Proceeding instituted by
Indemnitee to enforce or interpret this Agreement, if a court of competent
jurisdiction determines that each of the material assertions made by the
Indemnitee in such Proceeding was not made in good faith or was frivolous;

(e)           INSURED CLAIMS. To indemnify Indemnitee for Expenses or
liabilities of any type whatsoever (including, but not limited to, judgments,
fines, ERISA excise taxes or penalties, and amounts paid in settlement) which
have been paid directly to or on behalf of Indemnitee by an insurance carrier
under a policy of directors’ and officers’ liability insurance maintained by the
Company or any other policy of insurance maintained by the Company or
Indemnitee; or

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

  5. DETERMINATION OF RIGHT TO INDEMNIFICATION.

Upon receipt of a written claim addressed to the Board of Directors for
indemnification pursuant to Section 3, the Company shall determine by any of the
methods set forth in Section 78.751 of the Nevada Revised Statutes whether
Indemnitee has met the applicable standards of conduct which makes it
permissible under applicable law to indemnify Indemnitee. If a claim under
Section 3 is not paid in full by the Company within ninety (90) days after such
written claim has been received by the Company, the Indemnitee may at any time
thereafter bring suit against the Company to recover the unpaid amount of the
claim and, unless such action is dismissed by the court as frivolous or brought
in bad faith, the indemnitee shall be entitled to be paid also the expense of
prosecuting such claim. The court in which such action is brought shall
determine whether Indemnitee or the Company shall have the burden of proof
concerning whether Indemnitee has or has not met the applicable standard of
conduct.

  6. ADVANCEMENT AND REPAYMENT OF EXPENSES.

Subject to Section 4 hereof, the Expenses incurred by Indemnitee in defending
and investigating any Proceeding shall be paid by the Company in advance of the
final disposition of such Proceeding within 30 days after receiving from
Indemnitee the copies of invoices presented to Indemnitee for such Expenses, if
Indemnitee shall provide an undertaking to the Company to repay such amount to
the extent it is ultimately determined that Indemnitee is not entitled to
indemnification. In determining whether or not to make an advance hereunder, the
ability of Indemnitee to repay shall not be a factor. Notwithstanding the
foregoing, in a proceeding brought by the Company directly, in its own right (as
distinguished from an action bought derivatively or by any receiver or trustee),
the Company shall not be required to make the advances called for hereby if the
Board of Directors determines, in its sole discretion, that it does not appear
that Indemnitee has met the standards of conduct which make it permissible under
applicable law to indemnify Indemnitee and the advancement of Expenses would not
be in the best interests of the Company and its stockholders.

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  7. PARTIAL INDEMNIFICATION.

If the Indemnitee is entitled under any provision of this Agreement to
indemnification or advancement by the Company of some or a portion of any
Expenses or liabilities of any type whatsoever (including, but not limited to,
judgments, fines, penalties, and amounts paid in settlement) incurred by him in
the investigation, defense, settlement or appeal of a Proceeding, but is not
entitled to indemnification or advancement of the total amount thereof, the
Company shall nevertheless indemnify or pay advancements to the Indemnitee for
the portion of such Expenses or liabilities to which the Indemnitee is entitled.

  8. NOTICE TO COMPANY BY INDEMNITEE.

Indemnitee shall notify the Company in writing of any matter with respect to
which Indemnitee intends to seek indemnification hereunder as soon as reasonably
practicable following the receipt by Indemnitee of written notice thereof,
provided, however, that any delay in so notifying the Company shall not
constitute a waiver by Indemnitee of her rights hereunder. The written
notification to the Company shall be addressed to the Board of Directors and
shall include a description of the nature of the Proceeding and the facts
underlying the Proceeding and be accompanied by copies of any documents filed
with the court in which the Proceeding is pending. In addition, Indemnitee shall
give the Company such information and cooperation as it may reasonably require
and as shall be within Indemnitee’s power.

  9. MAINTENANCE OF LIABILITY INSURANCE.

(a)           Subject to Section 4 hereof, the Company hereby agrees that so
long as Indemnitee shall continue to serve as a director or officer of the
Company and thereafter so long as Indemnitee shall be subject to any possible
Proceeding, the Company, subject to Section 9(b), shall use reasonable
commercial efforts to obtain and maintain in full force and effect directors’
and officers’ liability insurance (“D&O Insurance”) which provides Indemnitee
the same rights and benefits as are accorded to the most favorably insured of
the Company’ directors, if Indemnitee is a director; or of the Company’s
officers, if Indemnitee is not a director of the Company but is an officer.

(b)           Notwithstanding the foregoing, the Company shall have no
obligation to obtain or maintain D&O Insurance if the Company determines in good
faith that such insurance is not reasonably available, the premium costs for
such insurance are disproportionate to the amount of coverage provided, the
coverage provided by such insurance is limited by exclusions so as to provide an
insufficient benefit, or the Indemnitee is covered by similar insurance
maintained by a subsidiary or parent of the Company.

(c)           If, at the time of the receipt of a notice of a claim pursuant to
Section 8 hereof, the Company has D&O Insurance in effect, the Company shall
give prompt notice of the commencement of such Proceeding to the insurers in
accordance with the procedures set forth in the respective policies. The Company
shall thereafter take all necessary or desirable action to cause such insurers
to pay, on behalf of the Indemnitee, all amounts payable as a result of such
Proceeding in accordance with the terms of such policies.

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  10. DEFENSE OF CLAIM.

In the event that the Company shall be obligated under Section 6 hereof to pay
the Expenses of any Proceeding against Indemnitee, the Company, if appropriate,
shall be entitled to assume the defense of such Proceeding, with counsel
approved by Indemnitee, which approval shall not be unreasonably withheld, upon
the delivery to Indemnitee of written notice of its election to do so. After
delivery of such notice, approval of such counsel by Indemnitee and the
retention of such counsel by the Company, the Company will not be liable to
Indemnitee under this Agreement for any fees of counsel subsequently incurred by
Indemnitee with respect to the same Proceeding, provided that (i) Indemnitee
shall have the right to employ counsel in any such Proceeding at Indemnitee’s
expense; and (ii) if (A) the employment of counsel by Indemnitee has been
previously authorized by the Company, or (B) Indemnitee shall have reasonably
concluded that there may be a conflict of interest between the Company and the
Indemnitee in the conduct of such defense or (C) the Company shall not, in fact,
have employed counsel to assume the defense of such Proceeding, then the fees
and expenses of Indemnitee’s counsel shall be at the expense of the Company.

  11. ATTORNEYS FEES.

In the event that Indemnitee or the Company institutes an action to enforce or
interpret any terms of this Agreement, the Company shall reimburse Indemnitee
for all of the Indemnitee’s reasonable fees and expenses in bringing and
pursuing such action or defense, unless as part of such action or defense, a
court of competent jurisdiction determines that the material assertions made by
Indemnitee as a basis for such action or defense were not made in good faith or
were frivolous.

  12. CONTINUATION OF OBLIGATIONS.

All agreements and obligations of the Company contained herein shall continue
during the period the Indemnitee is a director or officer of the Company, or is
or was serving at the request of the Company as a director, officer, fiduciary,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, and shall continue thereafter so long as the Indemnitee shall
be subject to any possible proceeding by reason of the fact that Indemnitee
served in any capacity referred to herein.

  13. SUCCESSORS AND ASSIGNS.

This Agreement establishes contract rights that shall be binding upon, and shall
inure to the benefit of, the successors, assigns, heirs and legal
representatives of the parties hereto.

  14. NON-EXCLUSIVITY.

(a) The provisions for indemnification and advancement of expenses set forth in
this Agreement shall not be deemed to be exclusive of any other rights that the
Indemnitee may have under any provision of law, the Company’s Articles of
Incorporation or Bylaws, the vote of the Company’s stockholders or disinterested
directors, other agreements or otherwise, both as to action in the Indemnitee’s
official capacity and action in another capacity while occupying the
Indemnitee’s position as a director or officer of the Company.

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(b)           In the event of any changes, after the date of this Agreement, in
any applicable law, statute, or rule which expand the right of a Nevada
corporation to indemnify its officers and directors, the Indemnitee’s rights and
the Company’s obligations under this Agreement shall be expanded to the full
extent permitted by such changes. In the event of any changes in any applicable
law, statute or rule, which narrow the right of a Nevada corporation to
indemnify a director or officer, such changes, to the extent not otherwise
required by such law, statute or rule to be applied to this Agreement, shall
have no effect on this Agreement or the parties’ rights and obligations
hereunder.

  15. EFFECTIVENESS OF AGREEMENT.

To the extent that the indemnification permitted under the terms of certain
provisions of this Agreement exceeds the scope of the indemnification provided
for in the Nevada Revised Statutes, such provisions shall not be effective
unless and until the Company’s Articles of Incorporation authorize such
additional rights of indemnification. In all other respects, the balance of this
Agreement shall be effective as of the date set forth on the first page and may
apply to acts of omissions of Indemnitee which occurred prior to such date if
Indemnitee was an officer, director, employee or other agent of the Company, or
was serving at the request of the Company as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, at the time such act or omission occurred.

  16. SEVERABIL1TY.

Nothing in this Agreement is intended to require or shall be construed as
requiring the Company to do or fail to do any act in violation of applicable
law. The Company’s inability, pursuant to court order, to perform its
obligations under this Agreement shall not constitute a breach of this
Agreement. The provisions of this Agreement shall be severable as provided in
this Section 16. If this Agreement or any portion hereof shall be invalidated on
any ground by any court of competent jurisdiction, then the Company shall
nevertheless indemnify Indemnitee to the full extent permitted by any applicable
portion of this Agreement that shall not have been invalidated, and the balance
of this Agreement not so invalidated shall be enforceable in accordance with its
terms.

  17. GOVERNING LAW.

This Agreement shall be interpreted and enforced in accordance with the laws of
the State of Nevada, without reference to its conflict of law principals. To the
extent permitted by applicable law, the parties hereby waive any provisions of
law which render any provision of this Agreement unenforceable in any respect.

  18. NOTICE.

All notices, requests, demands and other communications under this Agreement
shall be in writing and shall be deemed duly given (i) if delivered by hand and
receipted for by the party addressee or (ii) if mailed by certified or
registered mail with postage prepaid, on the third business day after the
mailing date. Addresses for notice to either party are as shown on the signature
page of this Agreement, or as subsequently modified by written notice.

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  19. MUTUAL ACKNOWLEDGMENT.

Both the Company and Indemnitee acknowledge that in certain instances, federal
law or applicable public policy may prohibit the Company from indemnifying its
directors and officers under this Agreement or otherwise. Indemnitee understands
and acknowledges that the Company has undertaken or may be required in the
future to undertake with the appropriate state or federal regulatory agency to
submit for approval any request for indemnification, and has undertaken or may
be required in the future to undertake with the Securities and Exchange
Commission to submit the question of indemnification to a court in certain
circumstances for a determination of the Company’s right under public policy to
indemnify Indemnitee.

  20. COUNTERPARTS.

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

  21. AMENDMENT AND TERMINATION.

No amendment, modification, termination or cancellation of this Agreement shall
be effective unless in writing signed by both parties hereto.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year set forth above

COMPANY: INDEMNITEE                 By:
/s/ Dr. Eberhard Kornotzki
By:
/s/ Joel D. Mayersohn
  Name: Dr. Eberhard Kornotzki           Name:   Mr. Joel Mayersohn     Title:
Chief Financial Officer               Address: No. 1 Jingguang Road, Neiqiu
          Address:     County, Xingtai City, Hebei Province,       China 054000
   

8

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