cdiiex10-1.htm


     

    
      

      

    

    

      CONSULTING
AGREEMENT

       

      This
Consulting Agreement (“Agreement”) is made as of January 23, 2009 by and between
China Direct, Inc., a Florida corporation (“Client”) and Marc Siegel
(“Consultant”).  Client and Consultant may collectively be referred to
as the “Parties”.

      


      W
I T N E S S E T H:

       

      WHEREAS,
the Client deems it advisable to retain the Consultant to provide consulting and
advisory services, and the Consultant is willing to provide such services to the
Client on the terms and conditions described herein.

       

      NOW,
THEREFORE, in consideration of the mutual covenants and agreements contained in
this Agreement, the parties hereto agree as follows:

       

      1.          Consulting
Services.  Upon the terms and subject to the conditions
contained in this Agreement, Consultant hereby agrees that it shall, during the
term of this Agreement, undertake the performance of the following services for
Client’s consulting companies (the “Services”):

       

      a.      Upon
request of Client, familiarize himself, to the extent appropriate and feasible,
with the business, operations, properties, financial condition, management and
prospects of Client and its client consulting companies;

       

      
        	
                 
      

              	
                a.

              	
                Provide
      advice relating to their
capitalization;

              


      

       

      
        	
                 
      

              	
                b.

              	
                Evaluate
      alternative financing structures and arrangements and potential sources of
      investment capital;

              


      

       

      
        	
                 
      

              	
                c.

              	
                Assist
      in developing appropriate acquisition criteria and identifying target
      industries;

              


      

       

      
        	
                 
      

              	
                d.

              	
                Identify,
      evaluate, structure and provide advice in connection with potential
      mergers and acquisitions, divestitures, spin-offs, joint ventures and
      other corporate transactions;

              


      

       

      b.      Assist
in evaluating and make recommendations concerning the relationships among
Client's and its client consulting companies various lines of business and
potential areas for business growth; and

       

      c.      Provide
such other services upon which the Parties may mutually agree.

       

      The services to be provided hereunder
may be performed at Client's office located in Deerfield Beach,
Florida.  Consultant shall be provided with office accommodations
located among the senior executive officers of Client.

       

      2.          Term. This Agreement
shall commence as of the effective date of this Agreement and terminate on
December 31, 2009.

       

      3.          Compensation. Upon
execution of this Agreement, the Client shall issue to Consultant

       

      a.      Client
shall pay to Consultant $120,000 in either cash or Common Stock, at the option
of the Client (the “Consulting Shares”). The number of Consulting Shares, if
issued in lieu of the cash amount,

       


      
        
           


        

        
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      shall be
equal to the result of dividing $120,000 by the per share closing price of the
Common Stock on the business day immediately following the Company’s filing of a
public announcement disclosing the resignation of Marc
Siegel.   The Consulting Shares shall be payable in four equal
installments payable on March 31, 2009, June 30, 2009, September 30, 2009 and
December 31, 2009.  The Severance Shares shall be issued pursuant to
the Company’s 2008 Non-Executive Stock Incentive Plan and are subject to
approval of the Compensation Committee of the Company’s board of
directors.  The award of the Severance Shares are intended to be
exempt from Section 16(b) of the Securities Exchange Act of 1934 (the “Act”)
pursuant to Rule 16b-3 of the Act.  In the event the Client elects to
pay Consultant in cash, such cash payments shall be made quarterly as follows:
$30,000 on March 31, 2009, $30,000 on or before June 30, 2009, $30,000 on or
before September 30, 2009, and $30,000 on or before December 31, 2009.

       

      4.          Warranties.  Consultant
warrants that the Services to be provided under this Agreement shall be
performed in a professional manner employing reasonable commercial
efforts.  This warranty shall be valid for a period of thirty (30)
days from the performance of the Services.  Except as specifically
provided in this Section 4, Consultant disclaims any and all other warranties
with respect to the services provided hereunder, including without limitation
any implied warranty of merchantability or fitness for a particular purpose.
Consultant does not warrant the results of any services. In addition, Client
acknowledges and agrees that Consultant is not engaged in the practice of law or
the provision of legal services, and that Client alone is completely and
independently responsible for compliance with all state, federal and
international laws applicable to Client and the operation of its
business.  Consultant’s entire liability to Client (or any other
person or entity) for any loss or damages resulting from any breach of this
Agreement, claims, demands or actions arising out of or relating to the
Services, whether in contract, tort (including negligence) or otherwise, shall
not exceed the sum of $5,000.  Except for the intentional conduct of
Consultant, Consultant will not be liable for any damages caused by the Client's
action or inaction, or for any indirect, incidental, consequential, special,
punitive or exemplary damages or lost profits, including, but not limited to,
damages for loss of business profits, business interruption, loss of business
information, data, goodwill or other pecuniary loss arising from Consultant’s
failure to provide the Services even if Consultant has been advised of the
possibility of such damages.

       

       

      5.           Termination.  This
Agreement may be terminated by the Consultant upon at least 30 days'
written notice to the Company to such effect or by the Company with "Cause" (as
defined below).  As used in this Agreement, "Cause" shall mean a
termination of the Consulting Period based upon:

       

       

      (i)  misconduct
by the Consultant or any of his employees to the material and demonstrable
detriment of the Company;

       

       

      (ii)   the
conviction (by a court of competent jurisdiction, not subject to further appeal)
of, or pleading guilty to, a felony by the Consultant;

       

       

      (iii)  the
Consultant's continued and ongoing gross negligence in the performance of his
duties and responsibilities to the Company as described in this
Agreement;

       

       

      (iv)  the
Consultant's material failure to perform his duties and responsibilities to the
Company as described in this Agreement (other than any such failure resulting
from the Consultant's incapacity due to physical or mental illness), in either
case after written notice from Client to the Consultant of the specific nature
of such material failure and the failure of the Consultant to cure such material
failure within thirty (30) days following receipt of such notice;
or

       


      
        
           


        

        
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      (v)  a
breach by Consultant of the Lock-Up Agreement entered into between Consultant
and the Company.

       

       

      Upon
termination of this Agreement pursuant to Section 5, the Consultant and the
Company shall not have any further obligation under this Agreement, except for
the obligations of the Consultant under Section 6 below.

       

      6.          Non-Compete and Confidential
Information.

       

       

      a.      Non-Competition
Covenant.

       

       

      i.           During
the term of this Agreement, the Consultant shall not, directly or indirectly,
become a consultant (including, but not limited to, through any entity of which
the Consultant is an employee, officer, director or advisor), employee, director
or advisor of, or otherwise affiliated with, any company (including such
company’s subsidiaries) that operates its business in the Peoples Republic of
China (the “PRC”).  

       

       

      ii.           During
the Consulting Period and for a period of two years thereafter, the
Consultant shall not, directly or indirectly, solicit or hire or encourage the
solicitation or hiring of any person who was an employee of Client at any time
on or after the date of such termination, exclusive of David Stein, (unless more
than six months shall have elapsed between the last day of such person's
employment by Client and the first date of such solicitation or
hiring).

       

      b.      Confidential
Information.  In the course of performing services under this
Agreement, Client may disclose to Consultant, and Consultant may otherwise
obtain knowledge of or access to, trade secrets and other proprietary and
confidential information concerning the Client, the Client products, financial
condition, services, research and development plans, and other matters
pertaining to the Client’s business (“Confidential
Information”).  Consultant agrees to treat and hold all Confidential
Information as secret and confidential, and to apply strict standards of care to
maintain the secrecy of the Confidential Information.  In this regard,
Consultant agrees not to copy or reproduce any Confidential Information and not
to disclose the contents of any Confidential Information to any person or
entity, other than officers and directors of the Client or with their written
permission.  Consultant further agrees to return to the Client written
or other copies (including electronic media containing Confidential Information)
of any and all Confidential Information in Consultant’s
possession.  The provisions of this Section 6 shall not apply to any
Confidential Information that Consultant is obligated by law to disclose to any
court or any federal or state government agency; provided, however, that in the
event disclosure is required by law Consultant shall provide the Client with
prompt notice of such requirement so that the Client may seek an appropriate
protective order prior to such required disclosure by Consultant.  In
addition, Consultant hereby acknowledges that he is aware that the United States
securities laws may prohibit any person who has material, nonpublic information
concerning Client from purchasing or selling securities of Client or from
communicating such information to any other person under circumstances in which
it is reasonably foreseeable that such person is likely to purchase or sell such
securities.

       

       

      7.           Relationship.
Consultant shall be an independent contractor within the meaning of all federal,
state and local laws and regulations governing employment insurance, workers'
compensation, industrial accident, labor and taxes. Consultant shall not, by
reason of this Agreement, acquire any benefits, privileges or rights under any
benefit plan operated by the Company or its subsidiaries or affiliates for the
benefit of their employees, including, without limitation, (i) any pension or
profit-sharing plans or (ii) any plans providing medical, dental, disability or
life insurance protection.

       


      
        
           


        

        
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      8.           Authority. Unless
otherwise agreed by the Company and Consultant in writing, during the term of
this Agreement, Consultant shall not have the power or authority to enter into,
execute agreements or other documents that are binding upon the Company or have
the authority to direct the operations of the Company, other than within the
scope of the services provided for in this
Agreement.       

       

      9.          Modifications.  This
Agreement can only be modified by a written agreement duly signed by persons
authorized to sign agreements on behalf of Client and Consultant, and variance
from or addition to the terms and conditions of this Agreement or other written
notification will be of no effect.  The failure of any Party to
enforce any right it is granted herein, or to require the performance by the
other Party hereto of any provision of this Agreement, or the waiver by any
Party of any breach of this Agreement, shall not prevent a subsequent exercise
or enforcement of such provisions or be deemed a waiver of any subsequent breach
of this Agreement.

       

      10.          Entire
Understanding.  This Agreement represents the entire
understanding and agreement between the Parties with respect to the subject
matter hereof, and merges all prior discussions between them and supersedes and
replaces any and every other agreement or understanding which may have existed
between the Parties to the extent that any such agreement or understanding
relates to providing services to Client. To the extent, if any, that the terms
and conditions of Client’s orders or other correspondence are inconsistent with
this Agreement, this Agreement shall control.

       

      11.          Force
Majeure.  No delay, failure or default in performance of any
obligation by either Party, excepting all obligations to make payments
hereunder, shall constitute a breach of this Agreement to the extent caused by,
in whole or in part, the other Party (and within the other party’s reasonable
control) or an act of God, war, civil disturbance, terrorist act, court order,
labor dispute, or other cause beyond its reasonable control, and such
nonperformance will not be a default under this Agreement.

       

      12.          Laws, Severability, Venue,
Waivers.  The validity of this Agreement and the rights,
obligations and relations of the Parties hereunder shall be construed and
determined under and in accordance with the laws of the State of Florida,
without regard to conflicts of law principles thereunder provided, however, that
if any provision of this Agreement is determined by a court of competent
jurisdiction to be in violation of any applicable law or otherwise invalid or
unenforceable, such provision shall to such extent as it shall be determined to
be illegal, invalid or unenforceable under such law be deemed null and void, but
this Agreement shall otherwise remain in full force.  Suit to enforce
any provision of this Agreement, or any right, remedy or other matter arising
therefrom, will be brought exclusively in the state or federal courts located in
Broward County, Florida.  Client agrees and consents to venue in
Broward County, Florida and to the in personam jurisdiction of these courts and
hereby irrevocably waives any right to a trial by jury.

       

      13.          Counterparts. This
Agreement may be executed in any number of counterparts, each of which when so
executed, shall constitute an original copy hereof, but all of which together
shall consider but one and the same document.

       

      14.          Disclaimer.
Consultant acknowledges that it has and will during the term of this Agreement,
rely upon information provided by Client in connection with the performance of
the Services and in accepting the Client’s securities as full or partial payment
of the Compensation under this Agreement.

       

      15.          Expenses. Client
shall reimburse Consultant in cash for all pre-approved expenses incurred by
Consultant in regard to the performance of services under this
Agreement.  Such reimbursement shall be made by Client within 5 days
after Consultant submits a request for reimbursement for such
expenses  which request shall include receipts for such
items.

       


      
        
           


        

        
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      16.          Notices. All notices
to be given hereunder shall be in writing by mail and/or and delivery
to:

      


      
        	
                Consultant:

              	
                Client:

                 

              
	
                Marc
      Siegel

                943
      Lake Wyman Road

                Boca
      Raton, Florida 33431

              	
                China
      Direct, Inc.

                431
      Fairway Drive

                Deerfield
      Beach, FL 33411

              
	 
      	 
      


      

      17.          Indemnification.
Except for intentional acts of Consultant, Consultant shall not be liable to the
Client or to any officer, director, employee, stockholders, or creditor of the
Client, for any act or omission in the course of or in connection with the
provision of advice or assistance hereunder.  The Client agrees to and
shall defend, indemnify and hold Consultant harmless from and against any and
all suits, claims, demand, causes of action, judgment damages, expenses and
liability, (including court costs and attorney’s fees paid in the defense of
Consultant) which may in any way result from services provided by Consultant
pursuant to or in connection with this Agreement. The Client agrees that if
Consultant is made a party, is threatened to be made a party, to any action,
suit or proceeding, whether civil, criminal, administrative, or investigative (a
“Proceeding”), by reason of the fact that Consultant is or was an employee of
the Client, or is or was serving at the request of the Client as an employee or
agent of another corporation, partnership, joint venture, trust, or other
enterprise, including service with respect to clients of the Client, whether or
not the basis of such Proceeding is Consultant’s alleged action in an official
capacity while serving as an employee or agent, Consultant shall be indemnified
and held harmless by the Client, to the same extent as the officers and
directors of the Client, to the fullest extent legally permitted against all
cost, expense, liability, and loss (including, without limitation, attorney’s
fees, judgments, fines, ERISA excise taxes or other liabilities or penalties and
amounts paid or to be paid in settlement) reasonably incurred or suffered by
Consultant in connection therewith, and such indemnification shall continue as
to Consultant even if he has ceased to be an employee or agent of the Client or
other entity and shall inure to the benefit of Consultant’s heirs, executors,
and administrators.  In return for the above provision, Consultant
promises to cooperate with the Client at its expense in his or the Client's
defense of any actions taken by private parties and/or federal or state
governmental bodies against the Consultant or the Client.

      


      18.          Other
Activities.  Except as provided for in Sections 6(a) and (b),
nothing contained herein shall prevent Consultant from acquiring or
participating in a transaction of any kind with any other entity.

       

      19.          Disclaimer.
Consultant acknowledges that he has relied upon the information provided by
Client. Consultant has in entering into this Amendment, relied on the warranties
or representations made by Client, its officers, directors, agents, legal
counsel or accountants concerning Client and/or its stock as to matters past,
present or future.

       

      20.          Attorney’s fees. The Client shall pay,
as and when due, any and all attorneys’ fees and costs incurred by Consultant in
connection with any dispute or settlement arising from his affiliation with the
Client, or as an employee or agent of another corporation, partnership, joint
venture, trust, or other enterprise, including service with respect to clients
of the Client, whether or not the basis of such Proceeding is Consultant’s
alleged action.  Consultant shall be indemnified and held harmless by
the Client, to the same extent as the officers and directors of the Client, to
the fullest extent legally permitted.

      


      



      
        
           


        

        
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      IN
WITNESS WHEREOF, the parties have executed this Agreement on the date first
above written.

       

      
        
          	
                  Client:

                   

                  China Direct,
      Inc.

                	 	 	
                   Consultant

                   

                  Marc
      Siegel

                	 
	
                  By:
      /s/James Wang

                	 	 	
                  By:
      /s/ Marc Siegel

                	 
	
                  Name:
      James Wang

                	 	 	
                  Name: Marc
      Siegel

                	 
	
                  Title:  CEO,
      Chairman

                	 	 	
                   

                	 


        

      

       

      
        
        

      

      


       


      
        
           


        

        
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