cdii_ex10-2.htm


     

    
      

      

    

    
 

    EMPLOYMENT
AGREEMENT

    


    This
EMPLOYMENT AGREEMENT (“Agreement”), dated as of April 3, 2009, is by and between
China Direct, Inc. (the “Company” or “China Direct”), having its main office at
431 Fairway Drive Suite 200, Deerfield Beach, FL 33441 and Huaqin Chen
(“Employee” or “you”).

    


    WHEREAS,
the Company is engaged in the business of managing Chinese entities and
providing consulting services to Chinese businesses;

    


    WHEREAS,
the Company desires to employ Employee and to enter into an Agreement embodying
the terms of such employment; and

    


    WHEREAS,
Employee desires to accept such employment and enter into such
Agreement;

    


    NOW,
THEREFORE, in consideration of the premises and mutual covenants herein and for
other good and valuable consideration, the parties agree as
follows:

    


    1. Term of
Employment.  Your employment
with the Company will be on an at-will basis.  This means that
although we hope your tenure with us will be long and rewarding, your employment
is for no specified period of time. You may decide to leave your employment at
any time and for any reason. Similarly, the Company may, in its discretion, at
any time and for any lawful reason choose to end your employment.  If
you decide to resign from the Company, you agree to provide the Company with at
least 10 business days notice.

    


    2. Position and
Location.

    


    A. Position.  Effective
on April 1, 2009 (the “Commencement Date”) Employee shall serve as
Controller.  At
all times, Employee shall have such duties and authority as are commensurate
with Employee’s then position and shall report to the management of the
Company.  Employee represents and warrants to the Company that he is
free to accept employment with the Company as contemplated herein and has no
other written or oral obligations or commitments of any kind or nature which
would in any way interfere with Employee’s acceptance of employment pursuant to
the terms hereof or the full performance of Employee’s obligations hereunder or
the exercise of Employee’s best efforts in Employee’s employment
hereunder.  In the event that Employee is not retained by the Company,
the Company will not be deemed to be in breach of this Agreement.

    


    B. Time
Devoted.  During the Employment Term, Employee will devote such
time and efforts as may be necessary or appropriate to fulfill Employee’s duties
and responsibilities hereunder.  Employee agrees to devote
substantially of Employee’s time and efforts to the performance of Employee’s
duties as an employee of the Company and, during Employee’s employment by the
Company, shall not, directly or indirectly, act for the benefit of any person,
firm or corporation other than the Company.  Employee also agrees that
he is not now, nor will he be, concerned, connected or otherwise affiliated with
any other business pursuit whatsoever without the prior written consent of the
Company.

    


    C. Principal
Offices.  Unless otherwise mutually agreed by the parties,
Employee’s principal offices shall be located at the Company’s headquarters in
Broward County or its surrounding counties in Florida.

    



    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    D. Compliance with
Laws.  Employee acknowledges that the Company is subject to
various laws, statutes and high ethical standards by reason of the nature of its
business activities, and Employee agrees to fully comply with all laws, rules
and statutes and ethical standards applicable to the Company.

    


    3. Employee
Benefits.  Following an
initial 90 day trial period, Employee shall be entitled to participate in the
Company’s employee benefit plans as in effect from time to
time.  During each fiscal year of the Company, Employee shall be
entitled to reasonable vacation time, provided that Employee shall evidence
reasonable judgment with regard to appropriate vacationing
scheduling.  Subject to the foregoing, Employee shall be entitled to
vacation time as delineated in the Employee Handbook, with any unused vacation
time to lapse as of the conclusion of the related fiscal year, unless the Board
of Directors shall authorize the accruing of such unused vacation
time.

    


    4. Business
Expenses.  During the
Employment Term, reasonable business expenses incurred by Employee in the
performance of Employee’s duties hereunder shall be reimbursed by the Company in
accordance with Company policies.

    


    5. Compensation.

    


    A. Salary
Compensation: Employee shall receive an annual salary of $80,000.00 or
$6,666.66 per month, paid on the first business day of each month for the prior
month’s employment.  the Company shall deduct from amounts to which
Employee is entitled all applicable federal, state and local taxes and other
charges, which it may now or hereafter be required to deduct as a matter of law
or otherwise within the discretion of the Company, so long as the exercise of
such discretion is permitted under applicable federal and state
law.

    


    B. Bonus
Compensation: The Company may, in the discretion of and subject to approval of
the Compensation Committee of the Board of Directors, award Employee a bonus of
up to 20% of Employee’s cash salary.  The Bonus Compensation may be in
the form of securities or cash.

    


    C. Equity
Compensation: The Company shall grant to Employee a Restricted Stock Award (the
"RSA’s") amounting to 10,000 shares of common stock of China Direct,
Inc.  The RSA’s will vest in accordance with the following
schedule:

    


    
      	 
      	
              ●

            	
              2,500
      shares will vest on April 3, 2010;

            
	 
      	
              ●

            	
              2,500
      shares will vest on July 3, 2010;

            
	 
      	
              ●

            	
              2,500
      shares will vest on October 3, 2010; and

            
	 
      	
              ●

            	
              2,500
      shares will vest on January 3,
2011.

            


    

    


    RSA’s shall vest so long as Employee
remains employed with China Direct, Inc. and in accordance with the terms and
conditions set forth in the Company’s Restricted Stock Agreement as approved by
the Company’s compensation committee.

    


    6. Representations
and Warranties.  Employee hereby represents, warrants and
agrees that: (i) Employee has required the necessary approval to be employed by
the Company; (ii) all statements, representations and warranties made by
Employee in the Employment Application Form in connection with Employee’s
employment by the Company are true, correct and complete in all respects; and
(iii) Employee is under no contractual or other restriction or obligation that
would be violated by Employee’s employment by the
Company.  Furthermore, Employee agrees to notify the Human Resources
Department promptly (Within 5 business days) if the information furnished in
Employee’s Employee Application Form or Employee Contact Form has
changed.


    
      
         


      

      
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    7. Compliance
with Laws. Employee hereby agrees
that, so long as Employee is employed by the Company, Employee will comply with
all statutes, laws, rules and regulations of the SEC or various securities
exchanges to which the Company is, or may become in the future, a member and all
other applicable federal, state and local agencies and authorities, as well as
all written internal rules, regulations and procedures established by the
Company and in effect and subject to change from time to
time.  Employee also agrees that Employee will promptly notify, no
later than one (1) business day, the highest ranking the Company Employee as
reflected on the organizational chart in the event Employee becomes aware of or
is put on notice concerning any violation of or non-compliance with any of the
above laws, rules or regulations or the commencement of any action, suit,
proceeding or investigation involving Employee or the
Company.  Without limiting the foregoing, Employee hereby acknowledges
that Employee has received a copy of the Company's Employee Handbook, has both
read and understood such policies and will comply with same in all
respects.

    


    8. Confidentiality. Employee acknowledges
and agrees that, during the period of Employee’s employment by the Company,
Employee will have access to confidential, proprietary, strategic and sensitive
information relating to the Company's business and affairs and the business and
affairs of its affiliates and clients, including, without limitation, materials
used for identifying clients, client information and lists, information
concerning ongoing and potential assignments, internal operating procedures,
business plans, projections, valuations techniques, financial models and
research data.  Employee also acknowledges and agrees that such
information is special and unique to the Company and its affiliates and
clients.  Employee hereby agrees and convenes that, without the
Company's prior written permission, Employee will not, directly or indirectly,
publish, disclose or make accessible to any other person, firm, corporation,
organization or entity, including, without limitation, any member of Employee’s
family, either during or after the period Employee is employed by the Company,
any confidential, proprietary, strategic or sensitive information whatsoever
relating, directly or indirectly, to the Company's clients, including such
clients’ names, business, or affairs or the business or affairs of any of the
Company's affiliates or clients, that Employee may learn or initiate and develop
a business relationship with during Employee’s employment by the Company,
whether or not such information is specifically designated as confidential,
proprietary, strategic or sensitive.  In addition, Employee agrees to
return to the Company all tangible evidence of such information in their
original form (paper, electronic or magnetic), which may be in Employee’s
possession, custody or control prior to or at the termination of Employee’s
employment.

    


    Employee
will not at any time (whether during or after Employee’s employment with the
Company) disclose or use for Employee’s own benefit or purposes or the benefit
or purposes of any other person, firm, partnership, joint venture, association,
corporation or other business organization, entity or enterprise other than the
Company and any of its subsidiaries or affiliates, any trade secrets,
information, data or other confidential information relating to customers,
development programs, costs, marketing, trading, investment, sales activities,
promotion, credit and financial data, manufacturing processes, financing
methods, plans or the business and affairs of the Company, generally, or of any
subsidiary or affiliate of the Company, except in the performance of Employee’s
duties hereunder or in compliance with legal process; provided, however, that
the foregoing shall not apply to information which is not unique to the Company,
or which is generally known to the industry or the public other than as a result
of Employee’s breach of this covenant.  In the event that Employee is
compelled by legal process to disclose confidential information, Employee shall
give prompt written notice to the Company to allow the Company the opportunity
to object to or otherwise resist such order.  Employee agrees that
upon termination of Employee’s employment with the Company for any reason,
Employee will return to the Company immediately all memoranda, books, papers,
plans, information, letters and other data, and all copies thereof or therefrom
in any way relating to the business of the Company and its affiliates, except
that Employee may retain personal notes, notebooks and diaries that do not
contain confidential information of the type described in the preceding
sentence.  Employee shall be bound by the nondisclosure provisions of
this Section 8.


    
      
         


      

      
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    Employee
further agrees that Employee will not retain or use for Employee’s account at
any time any trade names, trademark or other proprietary business designation
used or owned in connection with the business of the Company or its
affiliates.

    


    9. Non-Solicitation. Employee hereby further
agrees that, for a period of five (5) years after the effective date of the
termination of Employee’s employment by the Company for any reason (or for no
reason), Employee shall not, directly or indirectly, do any of the following:
(i) reveal the name of, contract, solicit, persuade, interfere with or endeavor
to entice away from the Company or any of its affiliates, any of their
respective clients, agents, representatives or employees; or (ii) employ or
offer to employ any person who, at any time up to the effective date of such
termination, was an employee, agent or representative employed or retained by
the Company or any of its affiliates within a period of one (1) year after such
person is no longer employed or retained by the Company or any of its
affiliates.  Provided, however, that the restriction set forth in
clause (i) above shall not apply to the solicitation of any of the clients
serviced by Employee while employed at the Company.  The parties
hereto agree that nothing in this Agreement shall restrict or prohibit the
Company from soliciting any or all clients serviced by Employee while Employee
was employed at the Company.

    


    10. Arbitration;
Temporary and Provisional Relief. In consideration of
Employee’s employment by the Company, Employee hereby understands and agrees to
submit to final and binding arbitration any and all claims, controversies and
disputes of any nature whatsoever arising out of or related in any way to this
Agreement or to Employee’s employment by the Company, including, without
limitation, any and all claims, controversies and disputes related to Employee’s
hiring, the terms of Employee’s employment or the termination of Employee’s
employment.  Employee specifically agrees, without limiting the
interpretation of this section, to forego litigation and to submit to binding
arbitration all claims, controversies and disputes under the following: 1) Title
VII (Equal Employment Opportunity Act); 2) the Federal Age Discrimination
Employment Act (ADEA), 3) any other applicable employment or human rights laws,
rules and regulations, including, without limitation, any city and state laws;
and 4) the Employee Retirement Income Security Act (ERISA).  Said
arbitration shall be under the rules and auspices of a third party which the
Company, in its sole discretion, shall elect.

    


    11. Notwithstanding
the provision of Section 10 above, in connection with any breach by Employee of
the Sections above, Employee hereby understands and agrees that the Company may,
at any time prior to the initial arbitration hearing pertaining to such dispute
or controversy, seek, by application to the United States District Court for the
of Florida or the Supreme Court of the State of Florida for the County of Palm
Beach, any such temporary or provisional relief or remedy provided for by the
laws of the United States of America or the laws of the State of Florida as
would be available in an action based upon such dispute or controversy in the
absence of an agreement to arbitrate.  The parties acknowledge and
agree that it is their intention to have any such application for temporary or
provisional relief decided by the court to which it is made and that such
application shall not be referred to, removed to or settled by
arbitration.  No such application to said court for temporary or
provisional relief, nor any act or conduct by either party in furtherance of or
in opposition to such application, shall constitute a relinquishment or waiver
of any right to have the underlying dispute or controversy, with respect to
which such application is made, subject to final and binding arbitration in
accordance with Section 10 above.

    


    In the
event of an arbitration or federal or state court proceeding between the Company
and Employee, the Company will have the right to seek from Employee reasonable
attorneys’ fees and any and all fees, costs, expenses and disbursements incurred
in respect of any such arbitration or federal or state proceeding.

    



    
      
         


      

      
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    12. Indemnification.
 Employee
hereby agrees that Employee will be responsible for, will pay and will fully
indemnify the Company for, and will hold the Company harmless from any and all
losses, claims, damages, penalties, judgments, awards, liabilities, cost,
expenses and disbursements, including, without limitation, attorney's fees and
the fees, costs, expenses and disbursements incurred in respect of any action,
suit, proceeding or investigation, incurred by the Company based upon, arising
out of or in connection with Employee’s negligent or
reckless  actions, including but not limited to: (i) Employee's
failure to comply with instructions received from any customer client or
professional resource including but not limited to resources both internal and
external to the Company (ii) Employee's failure to comply with any provision of
any applicable federal or state securities or other law, rule or regulation,
internal rules, policies or procedures, as described above; and (iii) Employee’s
failure to comply with any provision of this Agreement.  the Company
agrees that Employee’s indemnification will pertain solely to accounts and
customers directly serviced by Employee.

    


    Without
limiting the generality of the foregoing, Employee shall be directly and
primarily liable to the Company for the failure of any customer or client
serviced by Employee to deliver to the Company any and all securities or funds
required to properly close or settle any securities sale or purchase
transaction.  Employee expressly understands and agrees that the
Company may, at its discretion, deduct from any Compensation due, Salary or
otherwise, to Employee as a result of the provisions of this Section
12.

    


    13. Authority. Employee shall have no
authority to assume or create any obligation or responsibility whatsoever,
express or implied, on behalf of, or in the name of, the Company, any of its
subsidiaries or its clients.

    


    14. Survival.
 The
covenants, agreements, representations, and warranties contained in or made
pursuant to this Agreement shall survive Employee's termination of employment,
irrespective of any investigation made by or on behalf of any
party.

     

      15. Termination.

    


    A. By Company for Cause, Death
or Disability or by Employee’s Voluntary Resignation.

    


    i. The
Employment Term and Employee’s employment hereunder may be terminated by the
Company for Cause, Death or Disability and shall terminate automatically upon
Employee’s resignation.

    


    ii. For
purposes of this Agreement, “Cause” shall mean (A) willful malfeasance or
willful misconduct by Employee in connection with Employee’s employment, (B)
failure of Employee to perform Employee’s material duties under this Agreement
after notice of Employee’s failure to so perform, written or otherwise (other
than as a result of physical or mental incapacity), (C) Employee’s material
willful and knowing breach of the Agreement that remains uncured for a period of
ten (10) business days following Employee’s notice from the Company describing
such breach, written or otherwise (D) committing or participating in an
injurious act, gross neglect or material omission of responsibilities hereunder
after notice thereof, written or otherwise, which remains uncured for a period
of ten (10) business days following Employee’s receipt of notice from the
Company, written or otherwise, describing such breach; or (E) engaging in a
criminal enterprise involving moral turpitude, embezzlement, or conviction of an
act or acts constituting a felony under the laws of the United States or any
state thereof.  For the purposes of this Agreement, no act, or failure
to act, on Employee’s part shall be considered “willful” unless done or omitted
to be done by him not in good faith and without reasonable belief that
Employee’s action or omission was in the best interests of the
Company.  The date of termination for a termination for Cause shall be
the date indicated in the Notice of Termination.

    



    
      
         


      

      
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    iii. For
purposes of this Agreement, “Disability” shall mean Employee’s inability to
perform Employee’s material duties for a period of at least three (3)
consecutive months or an aggregate of five (5) months in any twenty-four (24)
month period as a result of a physical or mental incapacity.  The
Company may terminate Employee due to Disability on thirty (30) days prior
written notice given during the period Employee is unable to perform Employee’s
material duties as a result of a physical or mental incapacity; provided,
however, that Employee has not returned to the performance of Employee’s
material duties prior to the end of the applicable three (3) month or five (5)
month period described above.

    


    iv. If
Employee’s employment is terminated by the Company for Cause, Death or
Disability or if Employee resigns, Employee shall be entitled to receive the
following benefits:

    


    (i) the Base
Salary through the date of termination;

    


    (ii) any
Sign-On or Annual Bonus earned, but unpaid, as of the date of termination for
any previously completed fiscal year;

    


    (iii) reimbursement
for any unreimbursed business expenses incurred by Employee in accordance with
Company policy prior to the date of Employee’s termination; and

    


    (iv) such
Employment Benefits, if any, as to which Employee may be legally entitled under
the employee benefit plans and equity plans of the Company (the amounts
described in clauses (A) through (D) hereof being referred to as the “Accrued
Rights”).

    


    Following
such termination of Employee’s employment by the Company for Cause, Death or
Disability or resignation by Employee, except as set forth in this Section,
Employee shall have no further rights to any compensation or any other benefits
under this Agreement or any other severance plan, severance policy or severance
arrangement of the Company or its affiliates, except as provided in this
Agreement.

    


    B. By the Company Without
Cause.

    


    i. The
Employment Term and Employee’s employment hereunder may be terminated by the
Company without Cause.

    


    ii. If
Employee’s employment is terminated by the Company without Cause (other than by
reason of Death or Disability), Employee shall be entitled to:

    


    iii. receive
the Accrued Rights; and

    


    iv.  receive
continued payment of the Base Salary for two weeks following date of
termination.

    


    Following
Employee’s termination of employment by the Company without Cause (other than by
reason of Employee’s Death or Disability) or by Employee’s resignation, Employee
shall have no further rights to any compensation or any other benefits under
this Agreement or any other severance plan, severance policy or severance
arrangement of the Company or its affiliates except as provided in this
Agreement.

    



    
      
         


      

      
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    C. Notice of
Termination.  Any purported termination of employment by **the
Company or by Employee (other than due to Employee’s Death or Disability) before
the expiration of the Employment Term shall be communicated by written Notice of
Termination to the other party hereto in accordance with Section 19.G.
hereof.  For purposes of this Agreement, a “Notice of Termination”
shall mean a notice which shall indicate the specific termination provision
relied upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of employment under the provision so
indicated.

    


    16. Modification.  This
Agreement sets forth the entire understanding of the parties with respect to the
subject matter hereof, supersedes all existing agreements between them
concerning such subject matter and may be modified only by a written instrument
duly executed by each party hereto.

    


    17. Waiver.  Any
waiver by either party of a breach of any provision of this Agreement shall not
operate as or be construed to be waiver of any other breach of such provision or
of any breach of any other provision of this Agreement.  The parties
hereto expressly understand and agree that failure of a party to insist upon
strict adherence to any term of this Agreement on one or more occasions shall
not be considered a waiver or deprive that party of the right thereafter to
insist upon strict adherence to that term or any other term of this
Agreement.  Any waiver by either party must be agreed to by the other
party and in writing.

    


    18. Assignment;
Binding Effect.  Employee's rights and obligations under this
Agreement shall not be transferable by assignment or otherwise, such rights
shall not be subject to commutation, encumbrance, or the claims of Employee's
creditors, and any attempt to do any of the foregoing shall be
void.  The provisions of this Agreement shall be binding upon an inure
to the benefit of Employee and Employee’s heirs and personal representatives,
and shall be binding upon and inure to the benefit of the Company and its
successors and assigns.

    


    19. Miscellaneous. 
This is not an employment agreement for a specified term.  Employee
expressly acknowledges that Employee’s employment by the Company is "at will,"
and that nothing contained herein shall confer upon him any right to continue in
the employ of the Company or interfere in any way with the right of the Company
to terminate Employee’s employment at any time for any reason (or for no
reason).  Employee agrees that the existence of this Agreement, and
the terms and conditions hereof, shall be kept strictly confidential and shall
not be disclosed to any person, entity or organization, except pursuant to court
order, regulatory request or to the Company senior management or to the
Legal/Compliance.

    


    A. Governing
Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida without regard to conflicts of
laws principles thereof.

    


    B. Entire
Agreement/Amendments.  This Agreement contains the entire
understanding of the parties with respect to the employment of Employee by the
Company.  There are no restrictions, agreements, promises, warranties,
covenants or undertakings between the parties with respect to the subject matter
herein other than those expressly set forth herein.  This Agreement
may not be altered, modified or amended except by written instrument signed by
the parties hereto.

    


    C. No
Waiver.  The failure of a party to insist upon strict adherence
to any term of this Agreement on any occasion shall not be considered a waiver
of such party’s rights or deprive such party of the right thereafter to insist
upon strict adherence to that term or any other term of this
Agreement.

    



    
      
         


      

      
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    D. Severability.  In
the event that any one or more of the provisions of this Agreement shall be or
become invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions of this Agreement shall not be
affected thereby.

    


    E. Successors; Binding
Agreement.  This Agreement shall be binding upon the parties
hereto, their heirs, legal representatives, successors and
assigns.  This Agreement shall not be assignable by Employee, but
shall be assignable by the Company in connection with the sale, transfer or
other disposition of its business or to any of the Company’s affiliated,
controlled or other companies under common control with the
Company.

    


    F. Headings.  The
headings of this Agreement are for convenience only and shall not control or
affect the meaning or construction or limit the scope or intent of any of the
provisions of this Agreement.

    


    G. Notice.  For
the purpose of this Agreement, notices and all other communications provided for
in the Agreement shall be in writing and shall be deemed to have been duly given
when delivered by hand or overnight courier or three days after it has been
mailed by United States registered mail, return receipt requested, postage
prepaid, addressed to the respective addresses set forth below, or to such other
address as either party may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be effective only upon
receipt.

    


    


    If to the
Company:               China
Direct, Inc.

    431
Fairway Drive Suite 200

    Deerfield
Beach, Fl 33441

    


    If to
Employee:                     
Huaqin Chen

    705
Pierce Court

    Rock
Hill, SC 29730

    


    H. Independent
Counsel.  The Company and Employee agree that each of them have
been, or were advised and fully understand, that they are entitled to be
represented by independent legal counsel with respect to all matters
contemplated herein from the commencement of negotiations at all times through
the execution hereof.

    


    The
parties hereto understand and agree that this Agreement is contingent upon the
successful completion of a standard third party background investigation, based
on the employment application Employee will complete upon starting Employee’s
employment.

    


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

    


    ACCEPTED
AND AGREED TO:

    


    
      	
              China
      Direct, Inc.

               

              /s/
      James Wang

              ______________________________________

              James
      Wang, Chief Executive Officer

               

            	
              Name

               

              /s/
      Huaqin Chen

              ________________________________________

              Huaqin
      Chen