SEPARATION AGREEMENT

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.

2.10.  

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 Agreem