cdii_ex10-1.htm


     

    
      

      

    

    
 

    SEPARATION
AGREEMENT

     

    This
agreement (the “Agreement”) effective on the last day executed below, is entered
into between   I. ANDREW WEERARTNE (“Employee”) and CHINA DIRECT,
INC., a Florida corporation (“Employer”) relating to Employee’s employment and
separation from employment with Employer and its subsidiaries.

     

    In
consideration of the execution and delivery of the Agreement and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:

     

    
      	
              1.  

            	
              Separation
      from Employment and Severance
Payment.

            


    

     

    
      	
              1.1.  

            	
              Employee’s
      separation will be effective May 22, 2009 (the “Separation
      Date”).  Employee will receive: (i) on the date this agreement
      is signed by the parties, the cash portion of his pay for earnings from
      May 1, 2009 through May 31, 2009 in the amount of $4,166.66 less certain
      payroll deductions in the amount of $318.75 for Medicare and FICA; and
      (ii) upon expiration of the Revocation Period, as hereinafter defined,
      34,367 shares of China Direct, Inc. common stock (the “Stock Based
      Compensation”).  The shares included in the Stock Based
      Compensation have been registered by the Company under the Securities Act
      of 1933, as amended.  The cash payment and stock award covers
      all of the Employer’s obligations to Employee.  Employee
      acknowledges that no other compensation, vacation pay, sick pay or any
      other money is currently owed to
Employee.

            


    

     

    
      	
              2.  

            	
              Covenants
      of Employee.

            


    

     

    
      	
              2.1.  

            	
              As
      of the Separation Date, Employee shall resign as Employer’s Chief
      Financial Officer and from any and all other offices or positions Employee
      may have had with Employer or any of its subsidiaries or affiliated
      companies effective on the Separation Date.  Employee agrees to
      sign a form of resignation letter attached hereto as Exhibit A. Employee
      hereby confirms that Employee’s resignation was not the result of any
      disagreement with Employer on any matter relating to its operation,
      policies (including accounting or financial policies) or
      practices.

            


    

     

    
      	
              2.2.  

            	
              In
      exchange for the promises which Employer makes in this Agreement, Employee
      promises to waive and to release Employer and its subsidiaries, including
      but not limited to, China Direct Investments, Inc., from liability for all
      rights and claims, whether or not they are presently known to exist, that
      Employee has against Employer relating in any way to Employee’s employment
      or separation from employment with Employer and its
      subsidiaries.

            


    

     

    
      	
              2.3.  

            	
              The
      rights and claims which Employee waives and releases in this Agreement
      include, to every extent allowed by law, those arising under the Employee
      Retirement Income Security Act of 1974, the Civil Rights Acts of 1866,
      1871, 1964 and 1991, the Rehabilitation Act of 1973, the Fair Labor
      Standards Act, the Equal Pay Act of 1963, the Vietnam Era Veteran’s
      Readjustment Assistance Act of 1974, the Occupational safety and Health
      Act, the Immigration reform and Control Act of 1986, the Americans with
      Disabilities Act, the Age Discrimination in Employment Act of 1967, the
      Older Worker’s Benefit Protection Act, and the Florida Civil Rights
      Act.  This is not a complete list, and Employee waives and
      releases all similar rights and claims under all other federal, state and
      local discrimination provisions and all other statutory and common law
      causes of action relating in any way to Employee’s employment or
      separation from employment with
Employer.

            


    

     


    
      
         


      

      
         

        
          

        

      

      
         


      

    


    
      	
              2.4.  

            	
              Employee
      hereby agrees to remise, release, acquit, satisfy, and forever discharge
      Employer, of and from all, and all manner of action and actions, cause and
      causes of action, suits, debts, dues, sums of money, accounts, reckonings,
      bonds, bills, specialties, covenants, contracts, controversies,
      agreements, promises, variances, trespasses, damages, judgments,
      executions, claims and demands whatsoever, in law or in equity, which
      Employee ever had, now has, or which any personal representative,
      successor, heir or assign of Employee, hereafter can, shall or may have,
      against Employer, for, upon or by reason of any matter, cause or thing
      whatsoever, from the beginning of the world to the day of this
      Agreement.

            


    

     

    
      	
              2.5.  

            	
              Employee
      agrees not to testify for, appear on behalf of, or otherwise assist in any
      way any individual, company, or agency in any claim against Employer,
      except, unless, and only pursuant to a lawful subpoena issued to
      Employee.  If such a subpoena is issued, Employee will
      immediately notify Employer and provide it with a copy of the
      subpoena.

            


    

     

    
      	
              2.6.  

            	
              Employee
      agrees and promises not to undertake any disparaging conduct directed at
      Employer and shall refrain from making any negative or derogatory
      statements concerning Employer.

            


    

     

    
      	
              2.7.  

            	
              Employee
      agrees to waive Employee’s right to future employment with Employer which
      Employee ever had, may now have, or may hereafter have, whether known or
      unknown to Employee at the time of execution of this
      Agreement.

            


    

     

    
      	
              2.8.  

            	
              Employee
      understands and agrees that as of the Separation Date, Employee was and is
      no longer authorized to incur any expenses or obligations or liabilities
      on behalf of Employer.

            


    

     

    
      	
              2.9.  

            	
              Employee
      acknowledges and agrees that, during the period of Employee’s employment
      by Employer, Employee had access to confidential, proprietary, strategic
      and sensitive information relating to Employer'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 Employer and its
      affiliates and clients.  Employee hereby agrees and covenants
      that 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 her family, any confidential,
      proprietary, strategic or sensitive information whatsoever relating,
      directly or indirectly, to Employer's clients, including such clients’
      names, business, or affairs or the business or affairs of any of
      Employer's affiliates or clients, that Employee may learn or initiate and
      develop a business relationship with during Employee’s employment by
      Employer, whether or not such information is specifically designated as
      confidential, proprietary, strategic or
  sensitive.

            


    

     


    
      
         


      

      
        - 2
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              2.10.  

            	
              Employee
      will not at any time after the Separation Date 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 Employer 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 Employer, generally, or of
      any subsidiary or affiliate of Employer, however, that the foregoing shall
      not apply to information which is not unique to Employer, or which is
      generally known to the industry or the public other than as a result of
      Employee’s breach of this Agreement.  Employee agrees to return
      to Employer all memoranda, books, papers, plans, information, letters and
      other data, and all copies thereof or therefrom (including electronic
      media containing such information) in any way relating to the business of
      Employer 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 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 Employer or its
      affiliates.

            


    

     

    
      	
              2.11.  

            	
              Non-Solicitation.  Employee
      hereby further agrees that, for a period of two years after the Separation
      Date, Employee shall not, directly or indirectly, as an owner, officer,
      director, employee or agent, do any of the following: (i) reveal the name
      of, contract with, accept employment with, solicit, persuade, interfere
      with or endeavor to entice away from Employer or any of its affiliates or
      subsidiaries, 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 Employer or any of its affiliates
      within a period of one (1) year after such person is no longer employed or
      retained by Employer or any of its affiliates.  In addition to,
      and not in limitation of the other provisions hereof or of any other
      Agreement between Employee and Employer, Employee shall not at any time in
      any manner interfere with, disturb, disrupt, decrease or otherwise
      jeopardize the business of Employer or its affiliates or do or permit to
      be done anything which may tend to take away or diminish the trade,
      business or good will of Employer or its affiliates or give to any person
      the benefit or advantage of Employer's or its affiliates methods of
      operation, advertising, publicity, training, clients or prospective
      clients, or any other information relating or useful to the business of
      Employer or its affiliates.

            


    

     

    
      	
              2.12.  

            	
              Employee
      hereby certifies that Employee has returned to Employer, all of Employer’s
      property, including computer and office equipment, office keys, phone
      card, security access card, credit card, parking pass, supplies, customer
      and work files and other related
materials.

            


    

     

    
      	
              2.13.  

            	
              Employee
      agrees not to disclose the contents of this Agreement to anyone except
      Employee’s attorneys, if any, provided they agree to this confidentiality
      clause.

            


    

     

    
      	
              2.14.  

            	
              Employee
      agrees that Employee will be responsible for Employee’s own attorneys’
      fees incurred in connection with the negotiation, preparation and
      execution of this Agreement and that Employee unconditionally releases and
      discharges Employer from any claim for such attorneys’ fees incurred by
      Employee or on Employee’s behalf.

            


    

     

    
      	
              2.15.  

            	
              Employee
      agrees and acknowledges that this Agreement does not constitute an
      admission by Employer of any violation of any federal, state, or local
      statue or regulation, or any violation of any of Employee’s rights or of
      any duty owed by Employer to
Employee.

            


    

     


    
      
         


      

      
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              2.16.  

            	
              Employee
      confirms and agrees that Employee is responsible for any income or other
      taxes owed by Employee or required by all applicable laws, statutes,
      regulations or orders of the U.S. Internal Revenue Service (the “IRS”) to
      be withheld or deducted related to the Stock Based Compensation and the
      50,965 shares of China Direct, Inc.’s common stock previously issued to
      Employee (the “Withholding Taxes”). In this regard, Employee shall, upon
      receipt of the Stock Based Compensation and expiration of the Revocation
      Period, pay Employer the sum of $4,781.28 reflecting Employee’s portion of
      Social Security and Medicare withholding taxes which Employer will remit
      to the IRS on behalf of Employee.  In the event that the IRS
      challenges the amount or Employer’s failure to withhold and pay the
      Withholding Taxes and the IRS determines by way of assessment,
      reassessment or otherwise that the Withholding Taxes are not correct, then
      (ii) Employee shall pay directly to the IRS any withholding taxes owing by
      Employee in excess of the Withholding Taxes paid by Employee to Employer,
      and (iii) Employee shall indemnify Employer for any withholding taxes due,
      assessments, interest and penalties imposed by the IRS in respect of the
      late payment of such withholding taxes by Employer on behalf of Employee
      plus all legal and accounting fees incurred by Employer in connection
      therewith provided that Employer shall provide Employee, in a timely
      manner, with copies of all assessments, reassessments or other
      communications by the IRS to Employer related
  thereto.

            


    

     

    
      	
              3.  

            	
              Representations
      of Employee.

            


    

     

    
      	
              3.1.  

            	
              Employee
      hereby acknowledges that Employee is aware that the United States
      securities laws prohibit any person who has material, nonpublic
      information concerning Employer from purchasing or selling securities of
      Employer 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. Furthermore, Employee hereby
      represents that Employee has not purchased or sold any securities of
      Employer through the date hereof in violation of any state or federal
      securities laws.

            


    

     

    
      	
              4.  

            	
              Opportunity
      to Review and Right of
Revocation.

            


    

     

    
      	
              4.1.  

            	
              Employee
      acknowledges that Employer advised Employee of Employee’s right to
      consider the terms of this Agreement for 21 days after its delivery, and
      Employee, after consulting counsel, hereby irrevocably waives that
      right.

            


    

     

    
      	
              4.2.  

            	
              Pursuant
      to federal law, this Agreement is revocable by Employee for seven days
      following Employee's execution of the Agreement ("Revocation
      Period").  To be effective, such revocation must be in writing
      signed by the Employee and must be delivered to the General Counsel of the
      Company before 11:59 p.m., on the last day of the Revocation
      Period.  If an effective revocation is delivered in the
      foregoing manner and timeframe, this Agreement shall be of no force or
      effect and shall be null and void ab initio.  Employee
      understands that if Employee revokes this Agreement, Employee will lose
      all benefits of this Agreement. The promises of Employer in this Agreement
      will go into effect only if Employee has not revoked the Agreement within
      the Revocation Period.

            


    

     

    
      	
              5.  

            	
              Miscellaneous.

            


    

     

    
      	
              5.1.  

            	
              Employee
      agrees that Employee shall not make any disparaging, denigrating, critical
      or untrue statements (public or private) about Employer, its management or
      about any other employee of Employer, its products, customers, clients,
      suppliers, business or prospects.  It is agreed and understood
      that any breach of this paragraph by Employee would be
      material.

            


    

     


    
      
         


      

      
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              5.2.  

            	
              Employer
      agrees that it shall not make any disparaging, denigrating, critical or
      untrue statements (public or private) about Employee.  It is
      agreed and understood that any breach of this paragraph by Employer would
      be material.

            


    

     

    
      	
              5.3.  

            	
              Employee
      acknowledges and warrants that Employee has had the opportunity to and
      been advised to obtain independent legal advice regarding Employee’s
      duties, obligations and responsibilities under this Agreement and has been
      advised of each and every legal right and obligation enumerated within or
      arising out of this Agreement or has voluntarily declined same. . Employee
      acknowledges his understanding that this Agreement and any Form 4 filed by
      Employee related to the issuance of the Stock Based Compensation was
      prepared at the request of Employer by Lazarus Rothstein, Esq., its
      general counsel and that Mr. Rothstein did not represent Employee in
      conjunction with this Agreement or the preparation and filing of the Form
      4.

            


    

     

    This
Agreement shall be interpreted and enforced in accordance with the laws of the
State of Florida. Each of the parties submits to the jurisdiction of any
provincial or federal court sitting in Broward County, Florida, in any action or
proceeding arising out of or relating to this Agreement and agrees that all
claims in respect of the action or proceeding may be heard and determined by any
such court. Each party also agrees not to bring any action or proceeding arising
out of or relating to this Agreement in any other court. Each of the parties
waives any defense of inconvenient forum to the maintenance of any action or
proceeding so brought and waives any bond, surety, or other security that might
be required of any other party with respect thereto.

     

    
      	
              5.4.  

            	
              This
      Agreement and the agreements referenced herein represent the sole and
      entire agreement between the parties and supersedes any and all prior
      agreements, negotiations, and discussions between the parties or their
      respective counsel with respect to the subject matters covered in this
      Agreement.

            


    

     

    
      	
              5.5.  

            	
              Notwithstanding
      the foregoing, the parties agree that the any and all prior offer letters
      and agreements between the parties shall be terminated effective on the
      date of this Agreement and none of provisions thereunder shall
      survive.

            


    

     

    
      	
              5.6.  

            	
              If
      either party initiates proceedings for the other's breach of this
      Agreement, the prevailing party shall recover attorneys' fees and costs,
      including such fees and costs on any enforcement or appeal
      proceedings.

            


    

     

    
      	
              5.7.  

            	
              If
      one or more paragraphs of this Agreement are ruled invalid or
      unenforceable, such invalidity or unenforceability shall not affect any
      other provision of the Agreement, which shall remain in full force and
      effect.

            


    

     

    
      	
              5.8.  

            	
              This
      Agreement may be modified only by a writing signed by both
      parties.

            


    

     

    
      	
              5.9.  

            	
              Both
      parties agree that, unless required by law or by a court of competent
      jurisdiction, this Agreement shall remain confidential and will not be
      used for any purpose other than enforcing its specific terms in any
      proceeding between the parties. If this document must be filed in any
      court proceeding, the person seeking to file it will do so only under
      seal, unless expressly prohibited by the
court.

            


    

     

    
      	
              5.10.  

            	
              This
      Agreement may be executed in two counterparts, each of which shall
      constitute an original, but all of which together shall constitute one and
      the same document.

            


    

     

    
      	
              5.11.  

            	
              The
      term “Employer” refers to China Direct, Inc., a Florida corporation, any
      or all current or former affiliated corporations, parent corporations,
      partnerships, divisions, related companies and subsidiaries, and the
      officers, directors, shareholders, employees, agents, attorneys,
      successors and assigns of the
Employer.

            


    

     


    
      
         


      

      
        - 5
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    IN
WITNESS WHEREOF, Employee and Employer have agreed upon and signed this
Agreement as of the date set forth below.

     

    
      
        	
                EMPLOYEE:

                 

                 

                Sign
      /s/ I. Andrew
      Weeraratne

                       I.
      Andrew Weeraratne

                 

                Date:
      May 22, 2009

              	
                EMPLOYER:

                CHINA
      DIRECT, INC.

                 

                By:
      /s/ Lazarus
      Rothstein

                Lazarus
      Rothstein

                Its:
      Executive Vice President and General Counsel

                 

                Date:
      May 22, 2009

                 

              


      

    


    
      
         


      

      
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    May 22,
2009

    


    


    China
Direct, Inc.

    China
Direct Investments, Inc.

    CDI
China, Inc.

    431
Fairway Drive, Suite 200

    Deerfield
Beach, FL 33441

    


    Gentlemen:

    


    This
letter confirms that I hereby resign from all offices that I hold at China
Direct, Inc., China Direct Investments, Inc. and CDI China, Inc. (the
“Companies”) effective immediately.  My resignation is not the result
of any disagreement with any of the Companies on any matter relating to their
operations, policies (including accounting or financial policies) or
practices.

    


    Sincerely,

    


    


    


    I. Andrew Weeraratne