Longhai Steel, Inc.: Exhibit 10.6 - Filed by newsfilecorp.com






Exhibit 10.6

INDEPENDENT DIRECTOR AGREEMENT 

THIS INDEPENDENT DIRECTOR AGREEMENT (this
“Agreement”) is made effective as of January 11, 2012 by and
between Longhai Steel Inc. (the “Company”), and Michael Grieves
(“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, (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 	√ 	√ 
	Compensation/Nominating Committee 	√ 	  
	Corporate Governance Committee 	√ 	  


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. 

3.                     Compensation and Expenses.


(a)                  
Director Compensation. In recognition of the services provided by
and to be provided by Director, the Company agrees to pay Director $2,500 per
board meeting and issue to Director, an aggregate of 40,000 shares of the
Company’s common stock pursuant to an option agreement dated January 11, 2012
(such payment and issuance, the “Compensation”), one-half (1/2) of the shares to
be vested on the date of appointment, and the remaining one-half
(1/2) of the shares to be vested on December 31, 2012. 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. 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, including business class airfare for board
meetings, approved by the Company in advance, incurred in connection with the
performance of Director’s duties under this Agreement
(“Expenses”), upon submission of receipts and a written request
for payment. Such statement shall be accompanied by sufficient documentary
matter to support the expenditures. The Company may withhold from any payment
any amount of withholding required by law. 

(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 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. 

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.                    
Non-Compete. During the term of this Agreement and for a period
of twelve (12) months following Director’s removal or resignation from the Board
of Directors of the Company or any of its subsidiaries or affiliates (the
“Restricted Period”), Director shall not, directly or indirectly, (i) in any manner whatsoever engage in any capacity with any business
competitive with the Company’s current lines of business or any business then
engaged in by the Company, any of its subsidiaries or any of its affiliates (the
“Company's Business”) for Director’s own benefit or for the benefit of
any person or entity other than the Company or any subsidiary or affiliate; or
(ii) have any interest as owner, sole proprietor, shareholder, partner, lender,
director, officer, manager, employee, consultant, agent or otherwise in any
business competitive with the Company's Business; provided,
however, that Director may hold, directly or indirectly, solely as an
investment, not more than two percent (2%) of the outstanding securities of any
person or entity which are listed on any national securities exchange or
regularly traded in the over-the-counter market notwithstanding the fact that
such person or entity is engaged in a business competitive with the Company's
Business. In addition, during the Restricted Period, Director shall not develop
any property for use in the Company’s Business on behalf of any person or entity
other than the Company, its subsidiaries and affiliates.

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6.                    
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. 

7.                     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. 

8.                    
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. 

9.                    
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. 

10.                  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. 

11.                   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. 

12.                  
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. 

13.                  
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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14.                   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. 

[Signature Page Follows]




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/ Chaojun
      Wang                  
       
	 	Name: Chaojun Wang 
	 	Title: Chief Executive Officer 
	 	  
	 	DIRECTOR 
	 	 
	 	/s/ Michael
      Grieves                         
       
	 	Name: Michael Grieves 
	 	 
	 	Address: