Letter Agreement


 


 


 


December 14, 2012


 


By Hand Delivery


Naijiang Zhou


 


Dear Mr. Zhou:


 


The purpose of this
letter agreement (the “Agreement”) is to confirm your employment arrangement with SUTOR STEEL TECHNOLOGY CO., LTD.
(the “Company”), on the following terms and conditions:


 


1. Duties. You
will be employed as the Chief Financial Officer, subject to the supervision of the board of directors. Your duties will include
but not be limited to, supervise the financial management of the company, improve the cash utilizing efficiency, reduce financial
cost. You shall devote your entire business time, energies, attention and abilities to the business of Company unless otherwise
authorized by the board of directors. During your employment by Company, you shall not engage in any activity or have any business
interest which in any manner interferes with the proper performance of your duties, conflicts with the interest of Company or brings
into disrepute the business reputation of Company.


 


2. Salary. Your
salary will be 696,000 in Renminbi (approximately 111,360 USD) per year, to be paid in monthly installments or otherwise in accordance
with Company’s normal payroll practices. You shall also be entitled to receive 50,000 restricted shares of the common stock
of Sutor Technology Group Limited (“Sutor”) pursuant to Sutor’s 2009 Equity Incentive Plan. The restricted shares
grant shall be evidenced by the standard restricted shares grant agreement under Sutor’s 2009 Equity Incentive Plan (the
“Restricted Shares Agreement”) and the restricted shares will be subject to the terms and conditions of such Restricted
Shares Agreement.


 


3.   
 Bonus. You shall be eligible for a bonus, which will be payable in the sole discretion of Company based upon your
performance and the Company’s performance during any year of your employment with the Company.


 


4.   
Term of Employment. Your term of employment will be one year. After one year, this employment shall be renewed automatically
unless terminated or modified. Either you or Company may end your employment at any time, with or without cause, and with or without
notice.


 


5.   
Vacation. You shall be entitled to 24 paid vacation days. You may not take more than 32 vacation days consecutively.
Vacation days will not be carried over to future years of employment.


 






    	 



    	 	



    
 


6.   
Incentive and Other Plans. You will be entitled to participate in such pension, major medical, life insurance and
other plans and benefit programs as may be made available from time to time to employees of Company having responsibilities comparable
to yours and under the terms of which you are eligible to participate.


 


7. Company Policies.
You shall at all times be subject to and comply with policies, rules and procedures of Company then in effect, including without
limitation with respect to hours of work, holidays, vacation and sick leave and pay, conflict of interest, improper payments, political
contributions and payments to government officials.


 


8. Patents. You
hereby assign to Company all rights to any inventions, techniques, processes, concepts, ideas, programs, source codes, formulae,
research and development and marketing plans, whether or not patentable or copyrightable, made, conceived or reduced to practice
by you during the course of your employment by Company.


 


9. Covenants.
During your employment by Company and at all times thereafter, you shall not (a) disrupt, disparage, impair or interfere with the
business of Company or (b) disclose to anyone else, directly or indirectly, any proprietary or business sensitive information concerning
the business of Company or use, or permit or assist, by acquiescence or otherwise, anyone else to use, directly or indirectly,
any such information. Such information shall include all information to the extent not generally known to the public which, if
released to unauthorized persons, could be detrimental to the reputation or business interests of Company or parties with which
Company contracts or which would permit such person to benefit improperly.


 


10. Company Property.
Upon termination of your employment for any reason, you shall promptly deliver to Company all property belonging to Company and
shall not retain any copies of any correspondence, reports, lists or other documents relating in any way to the affairs of Company
or its clients.


 


11. Non-Solicitation.
During the term of your employment by Company and for a period of twelve months following the termination of your employment, whether
voluntary or involuntary, you shall not, directly or indirectly:


 


(a) solicit customers
or business patronage which results in competition with the business of Company or any of its affiliates, or


 


(b) approach or attempt
to induce any person who is then in the employ of Company to leave the employ of Company or employ or attempt to employ any person
who was in the employ of Company at any time during the prior twelve months.


 


12. Notices.
All notices hereunder shall be to the parties’ addresses set forth above for the Company and on the Signature Page for you,
in writing and given by registered or certified mail, return receipt requested, postage and registration fees prepaid, and shall
be deemed given when so mailed. The addresses set forth herein may be changed by notice given in the manner set forth in this Section.


 






    	 



    	 	



    
 


13.  Miscellaneous. This Agreement (a) shall be governed by, and construed in accordance with, the laws of the British
Virgin Islands, without regard for the conflict of laws principles thereof, (b) shall inure to the benefit of, and shall be binding
upon, the parties hereto and their respective heirs, legal representatives and assigns, (c) may not be changed orally but only
by an agreement in writing signed by the party against whom any waiver, change, amendment, notification or discharge is sought,
and (d) contains the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior
agreements, oral or written, between the parties hereto. For the avoidance of doubt, each of the Employment Contract, Amendment
to the Employment Contract, and Amendment No. 2 to the Employment Contract, by and between you and Sutor, dated December 18, 2009,
February 23, 1011 and February 9, 2012, respectively, shall be terminated, except that the 50,000 restricted shares of Sutor granted
under Section 4.1(b) of the Employment Contract, as amended, shall continue to be vested according to certain Restricted Shares
Grant Agreement, dated February 21, 2012, by and between you and Sutor. The invalidity of all or any part of any section of this
Agreement shall not render invalid the remainder of this Agreement. If any provision of this Agreement is so broad as to be unenforceable,
such provision shall be interpreted to be only so broad as is enforceable.


 


SUTOR STEEL
TECHNOLOGY CO., LTD.


 


By: /s/
Lifang Chen                                        


Name: Lifang
Chen


Title: Chairman


 


Solely with respect to Sections
2 and 13 herein:


 


SUTOR TECHNOLOGY
GROUP LIMITED


 


By: /s/
Lifang Chen                                         


Name: Lifang
Chen


Title: Chief
Executive Officer


 


ACCEPTED AND AGREED TO


AS OF THE DATE FIRST ABOVE


WRITTEN:


 


/s/ Naijiang Zhou                      


Naijiang Zhou