Exhibit
      10.2


    REGISTRATION
      RIGHTS AGREEMENT

    


    THIS
      REGISTRATION RIGHTS AGREEMENT
      (this
“Agreement”)
      is made
      and entered into as of August 2, 2007, by and among CHINA
      NATURAL GAS, INC.,
      a
      Delaware corporation (the “Company”),
      and
      the investors signatory hereto (each an “Investor”
      and
      collectively, the “Investors”).

    


    This
      Agreement is made pursuant to the Securities Purchase Agreement, dated as of
      the
      date hereof among the Company and the Investors (the “Purchase
      Agreement”).

    


    The
      Company and the Investors hereby agree as follows:

    


    1.
      Definitions.
      Capitalized terms used and not otherwise defined herein that are defined in
      the
      Purchase Agreement will have the meanings given such terms in the Purchase
      Agreement. As used in this Agreement, the following terms have the respective
      meanings set forth in this Section 1:

     

    “Advice”
      has
      the
      meaning set forth in Section 7(c).

    


    “Effective
      Date”
      means,
      as to a Registration Statement, the date on which such Registration Statement
      is
      first declared effective by the Commission.

    


    “Effectiveness
      Date”
      means
      (a) with respect to the initial Registration Statement required to be filed
      under Section 2(a), the earlier of: (a)(i) the 90th day following the Final
      Closing Date; provided,
      that,
      if the Commission reviews and has written comments to the filed Registration
      Statement that would require the filing of a pre-effective amendment thereto
      with the Commission, then the Effectiveness Date under this clause (a)(i) shall
      be the 120th day following the Final Closing Date, and (ii) the fifth Trading
      Day following the date on which the Company is notified by the Commission that
      the initial Registration Statement will not be reviewed or is no longer subject
      to further review and comments (provided
      further, however,
      that
      the periods specified in clauses (a)(i) and (a)(ii) shall be automatically
      stayed for such additional period of time as the Registration Statement does
      not
      meet the requirements of Rule 3-01 of Regulation S-X, provided that such
      automatic stay shall expire on December 31, 2007); (b) with respect to any
      additional Registration Statements that may be required pursuant to Section
      2(b), the earlier of (i) the 90th day following (x) if such Registration
      Statement is required because the Commission shall have notified the Company
      in
      writing that certain Registrable Securities were not eligible for inclusion
      on a
      previously filed Registration Statement, the date or time on which the
      Commission shall indicate as being the first date or time that such Registrable
      Securities may then be included in a Registration Statement, or (y) if such
      Registration Statement is required for a reason other than as described in
      (x)
      above, the date on which the Company first knows, or reasonably should have
      known, that such additional Registration Statement(s) is required; provided,
      that,
      if the Commission reviews and has written comments to a Registration Statement
      that would require the filing of a pre-effective amendment thereto with the
      Commission, then the Effectiveness Date under this clause (b)(i) for such
      Registration Statement shall be the 120th day following the date that the
      Company first knows, or reasonably should have known, that such additional
      Registration Statement is required under such Section, and (ii) the fifth
      Trading Day following the date on which the Company is notified by the
      Commission that such additional Registration Statement will not be reviewed
      or
      is no longer subject to further review and comments; or (c) with respect to
      a
      Registration Statement required to be filed under Section 2(e), the
“Second
      Effectiveness Date.”

    


    “Effectiveness
      Period”
      has the
      meaning set forth in Section 2(a).

    


    “Exchange
      Act”
      means
      the Securities Exchange Act of 1934, as amended.

    


    “Filing
      Date”
      means
      (a) with respect to the initial Registration Statement required to be filed
      under Section 2(a), the 60th day following the Final Closing Date; (b) with
      respect to any additional Registration Statements that may be required pursuant
      to Section 2(b), the 60th day following (x) if such Registration Statement
      is
      required because the Commission shall have notified the Company in writing
      that
      certain Registrable Securities were not eligible for inclusion on a previously
      filed Registration Statement, the date or time on which the Commission shall
      indicate as being the first date or time that such Registrable Securities may
      then be included in a Registration Statement, or (y) if such Registration
      Statement is required for a reason other than as described in (x) above, the
      date on which the Company first knows, or reasonably should have known, that
      such additional Registration Statement(s) is required; or (c) with respect
      to a
      Registration Statement required to be filed under Section 2(e), the
“Second
      Filing Date.”

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    “Final
      Closing Date”
      means
      that date which is 30 days after the Initial Closing (as that term is defined
      in
      the Purchase Agreement).

    


    “Holder”
      or
“Holders”
      means
      the holder or holders, as the case may be, from time to time of Registrable
      Securities.

    


    “Indemnified
      Party”
      has the
      meaning set forth in Section 6(c).

    


    “Indemnifying
      Party”
      has the
      meaning set forth in Section 6(c).

    


    “Losses”
      has the
      meaning set forth in Section 6(a).

    


    “California”
      means
      the state and federal courts sitting in the City of San Francisco, County of
      San
      Francisco.

    


    “Proceeding”
      means an
      action, claim, suit, investigation or proceeding (including, without limitation,
      an investigation or partial proceeding, such as a deposition), whether commenced
      or threatened.

    


    “Prospectus”
      means
      the prospectus included in a Registration Statement (including, without
      limitation, a prospectus that includes any information previously omitted from
      a
      prospectus filed as part of an effective registration statement in reliance
      upon
      Rule 430A promulgated under the Securities Act), as amended or supplemented
      by
      any prospectus supplement, with respect to the terms of the offering of any
      portion of the Registrable Securities covered by a Registration Statement,
      and
      all other amendments and supplements to the Prospectus, including post-effective
      amendments, and all material incorporated by reference or deemed to be
      incorporated by reference in such Prospectus.

    


    “Registrable
      Securities”
      means:
      (i) the Shares; (ii) the Warrant Shares; and (iii) any securities issued or
      issuable upon any stock split, dividend or other distribution, recapitalization
      or similar event, or any conversion price adjustment with respect to any of
      the
      securities referenced in (i) above.

    


    “Registration
      Statement”
      means
      the initial registration statement required to be filed in accordance with
      Section 2(a) and any additional registration statement(s) required to be filed
      under Section 2(b), including (in each case) the Prospectus, amendments and
      supplements to such registration statements or Prospectus, including pre- and
      post-effective amendments, all exhibits thereto, and all material incorporated
      by reference or deemed to be incorporated by reference therein.

    


    “Rule
      144”
      means
      Rule 144 promulgated by the Commission pursuant to the Securities Act, as such
      Rule may be amended from time to time, or any similar rule or regulation
      hereafter adopted by the Commission having substantially the same effect as
      such
      Rule.

    


    “Rule
      415”
      means
      Rule 415 promulgated by the Commission pursuant to the Securities Act, as such
      Rule may be amended from time to time, or any similar rule or regulation
      hereafter adopted by the Commission having substantially the same effect as such
      Rule.

    


    “Rule
      424”
      means
      Rule 424 promulgated by the Commission pursuant to the Securities Act, as such
      Rule may be amended from time to time, or any similar rule or regulation
      hereafter adopted by the Commission having substantially the same effect as
      such
      Rule.

    


    “Second
      Effectiveness Date”
      means
      (a) with respect to the initial Registration Statement required to be filed
      under Section 2(e), the earlier of: (a)(i) the 90th day following the Second
      Final Closing Date; provided,
      that,
      if the Commission reviews and has written comments to the filed Registration
      Statement that would require the filing of a pre-effective amendment thereto
      with the Commission, then the Second Effectiveness Date under this clause (a)(i)
      shall be the 120th day following the Second Final Closing Date, and (ii) the
      fifth Trading Day following the date on which the Company is notified by the
      Commission that the initial Registration Statement will not be reviewed or
      is no
      longer subject to further review and comments (provided
      further, however,
      that
      the periods specified in clauses (a)(i) and (a)(ii) shall be automatically
      stayed for such additional period of time as the Registration Statement does
      not
      meet the requirements of Rule 3-01 of Regulation S-X, provided that such
      automatic stay shall expire on December 31, 2007); and (b) with respect to
      any
      additional Registration Statements that may be required pursuant to Section
      2(b), the earlier of (i) the 90th day following (x) if such Registration
      Statement is required because the Commission shall have notified the Company
      in
      writing that certain Warrant Shares were not eligible for inclusion on a
      previously filed Registration Statement, the date or time on which the
      Commission shall indicate as being the first date or time that such Warrant
      Shares may then be included in a Registration Statement, or (y) if such
      Registration Statement is required for a reason other than as described in
      (x)
      above, the date on which the Company first knows, or reasonably should have
      known, that such additional Registration Statement(s) is required; provided,
      that,
      if the Commission reviews and has written comments to a Registration Statement
      that would require the filing of a pre-effective amendment thereto with the
      Commission, then the Second Effectiveness Date under this clause (b)(i) for
      such
      Registration Statement shall be the 120th day following the date that the
      Company first knows, or reasonably should have known, that such additional
      Registration Statement is required under such Section, and (ii) the fifth
      Trading Day following the date on which the Company is notified by the
      Commission that such additional Registration Statement will not be reviewed
      or
      is no longer subject to further review and comments.

     

    
      
         

      

      
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    “Second
      Filing Date”
      means
      (a) with respect to the initial Registration Statement required to be filed
      under Section 2(e), the 60th day following the Second Final Closing Date; and
      (b) with respect to any additional Registration Statements that may be required
      pursuant to Section 2(b), the 60th day following (x) if such Registration
      Statement is required because the Commission shall have notified the Company
      in
      writing that certain Registrable Securities were not eligible for inclusion
      on a
      previously filed Registration Statement, the date or time on which the
      Commission shall indicate as being the first date or time that such Registrable
      Securities may then be included in a Registration Statement, or (y) if such
      Registration Statement is required for a reason other than as described in
      (x)
      above, the date on which the Company first knows, or reasonably should have
      known, that such additional Registration Statement(s) is
      required.


    


    “Second
      Final Closing Date”
      means
      that date which is 30 days after the Second Closing (as that term is defined
      in
      the Purchase Agreement).

    


    “Securities
      Act”
      means
      the Securities Act of 1933, as amended.

    


    “Shares”
      means
      the shares of Common Stock issued or issuable to the Investors pursuant to
      the
      Purchase Agreement.

    


    “Warrant
      Shares”
      means
      the shares of Common Stock issued or issuable upon
      exercise of the Warrants
      issued
      to the Investors pursuant to the Purchase Agreement.

    


    2.
      Registration.

     

    (a)
      On or
      prior to each Filing Date, the Company shall prepare and file with the
      Commission a Registration Statement covering the resale of all Registrable
      Securities not already covered by an existing and effective Registration
      Statement for an offering to be made on a continuous basis pursuant to Rule
      415,
      on Form S-1 (or on such other form appropriate for such purpose). Such
      Registration Statement shall contain (except if otherwise required pursuant
      to
      written comments received from the Commission upon a review of such Registration
      Statement) the “Plan of Distribution” attached hereto as Annex
      A.
      The
      Company shall cause such Registration Statement to be declared effective under
      the Securities Act as soon as possible but, in any event, no later than its
      Effectiveness Date, and shall use its reasonable best efforts to keep the
      Registration Statement continuously effective under the Securities Act until
      the
      date which is the earlier of (i) five years after its Effective Date, (ii)
      such
      time as all of the Registrable Securities covered by such Registration Statement
      have been publicly sold by the Holders, or (iii) such time as all of the
      Registrable Securities covered by such Registration Statement may be sold by
      the
      Holders pursuant to Rule 144(k) as determined by the counsel to the Company
      pursuant to a written opinion letter to such effect, addressed and reasonably
      acceptable to the Company’s transfer agent and the affected Holders (the
“Effectiveness
      Period”).

     

    
      
         

      

      
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    (b)
      If
      for any reason the Commission does not permit all of the Registrable Securities
      to be included in the Registration Statement filed pursuant to Section 2(a)
      or
      Section 2(e), or for any other reason any outstanding Registrable Securities
      are
      not then covered by an effective Registration Statement, then the Company shall
      prepare and file by the Filing Date in the case of Registrable Securities to
      be
      included in the Registration Statement filed pursuant to Section 2(a) and by
      the
      Second Filing Date in the case of Warrant Shares to be included in the
      Registration Statement filed pursuant to Section 2(e) for such Registration
      Statement, an additional Registration Statement covering the resale of all
      Registrable Securities not already covered by an existing and effective
      Registration Statement for an offering to be made on a continuous basis pursuant
      to Rule 415, on Form S-1 (or on such other form appropriate for such purpose).
      Each such Registration Statement shall contain (except if otherwise required
      pursuant to written comments received from the Commission upon a review of
      such
      Registration Statement) the “Plan of Distribution” attached hereto as
Annex
      A.
      The
      Company shall cause each such Registration Statement to be declared effective
      under the Securities Act as soon as possible but, in any event, by its
      Effectiveness Date, and shall use its reasonable best efforts to keep such
      Registration Statement continuously effective under the Securities Act during
      the entire Effectiveness Period.

     

    (c)
      If:
      (i) a Registration Statement is not filed on or prior to its Filing Date (if
      the
      Company files a Registration Statement without affording the Holders the
      opportunity to review and comment on the same as required by Section 3(a)
      hereof, the Company shall not be deemed to have satisfied this clause (i)),
      or
      (ii) a Registration Statement is not declared effective by the Commission on
      or
      prior to its required Effectiveness Date, or (iii) after its Effective Date,
      without regard for the reason thereunder or efforts therefore, such Registration
      Statement ceases for any reason to be effective and available to the Holders
      as
      to all Registrable Securities to which it is required to cover at any time
      prior
      to the expiration of its Effectiveness Period for more than an aggregate of
      20
      Trading Days (which need not be consecutive) (any such failure or breach being
      referred to as an “Event,”
      and for
      purposes of clauses (i) or (ii) the date on which such Event occurs, or for
      purposes of clause (iii) the date which such 20 Trading Day-period is exceeded,
      being referred to as “Event
      Date”),
      then
      in addition to any other rights the Holders may have hereunder or under
      applicable law: (x) on each such Event Date the Company shall pay to each Holder
      an amount in cash, as partial liquidated damages and not as a penalty, equal
      to
      1.0% of the aggregate Investment Amount paid by such Holder for Shares pursuant
      to the Purchase Agreement; and (y) on each monthly anniversary of each such
      Event Date (if the applicable Event shall not have been cured by such date)
      until the applicable Event is cured, the Company shall pay to each Holder an
      amount in cash, as partial liquidated damages and not as a penalty, equal to
      1.0% of the aggregate Investment Amount paid by such Holder for Shares pursuant
      to the Purchase Agreement. In no event shall the Company be obligated to pay
      any
      liquidated damages to any Holder pursuant to this Section 2(c) in an aggregate
      amount that exceeds 10% of the aggregate Investment Amount paid by such Holder
      for Shares pursuant to the Purchase Agreement. The parties agree that the
      Company will not be liable for liquidated damages under this Section in respect
      of the aggregate Investment Amount that is attributable to any Registrable
      Securities that are sold prior to an Event Date. If the Company fails to pay
      any
      partial liquidated damages pursuant to this Section in full within seven days
      after the date payable, the Company will pay interest thereon at a rate of
      10%
      per annum (or such lesser maximum amount that is permitted to be paid by
      applicable law) to the Holder, accruing daily from the date such partial
      liquidated damages are due until such amounts, plus all such interest thereon,
      are paid in full. The partial liquidated damages pursuant to the terms hereof
      shall apply on a daily pro-rata basis for any portion of a month prior to the
      cure of an Event, except in the case of the first Event Date.

     

    (d)
      Each
      Holder agrees to furnish to the Company a completed Questionnaire in the form
      attached to this Agreement as Annex
      B
      (a
“Selling
      Holder Questionnaire”).
      The
      Company shall not be required to include the Registrable Securities of a Holder
      in a Registration Statement and shall not be required to pay any liquidated
      or
      other damages under Section 2(c) to any Holder who fails to furnish to the
      Company a fully completed Selling Holder Questionnaire at least two Trading
      Days
      prior to the Filing Date (subject to the requirements set forth in Section
      3(a)).

    


    (e)
      In
      the event the Second Closing (as defined in the Purchase Agreement) does not
      occur prior to the Filing Date for the Registration Statement required by
      Section 2(a), the Company shall prepare and file with the Commission a
      Registration Statement covering the resale of all Warrant Shares not already
      covered by an existing and effective Registration Statement for an offering
      to
      be made on a continuous basis pursuant to Rule 415, on Form S-1 (or on such
      other form appropriate for such purpose). Such Registration Statement shall
      contain (except if otherwise required pursuant to written comments received
      from
      the Commission upon a review of such Registration Statement) the “Plan of
      Distribution” attached hereto as Annex
      A.
      The
      Company shall cause such Registration Statement to be declared effective under
      the Securities Act as soon as possible but, in any event, no later than its
      Second Effectiveness Date, and shall use its reasonable best efforts to keep
      the
      Registration Statement continuously effective for the Effectiveness
      Period.

    


    
      
         

      

      
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    3.
      Registration
      Procedures.

     

    In
      connection with the Company’s registration obligations hereunder, the Company
      shall:

    


    (a)
      Not
      less than two days prior to the filing of a Registration Statement or any
      related Prospectus or any amendment or supplement thereto, the Company shall
      furnish to each Holder copies of the “Selling Stockholders” section of such
      document, the “Plan of Distribution” and any risk factor contained in such
      document that addresses specifically this transaction or the Selling
      Stockholders, as proposed to be filed which documents will be subject to the
      review of such Holder. The Company shall not file a Registration Statement,
      any
      Prospectus or any amendments or supplements thereto in which the “Selling
      Stockholder” section thereof differs from the disclosure received from a Holder
      in its Selling Holder Questionnaire (as amended or supplemented).

    


    (b)
      (i)
      Prepare and file with the Commission such amendments, including post-effective
      amendments, to each Registration Statement and the Prospectus used in connection
      therewith as may be necessary to keep such Registration Statement continuously
      effective as to the applicable Registrable Securities for its Effectiveness
      Period and prepare and file with the Commission such additional Registration
      Statements in order to register for resale under the Securities Act all of
      the
      Registrable Securities; (ii) cause the related Prospectus to be amended or
      supplemented by any required Prospectus supplement, and as so supplemented
      or
      amended to be filed pursuant to Rule 424; provided,
      however,
      that on
      the Business Day following the Effectiveness Date, the Company shall file with
      the Commission in accordance with Rule 424 the final prospectus to be used
      in
      connection with sales pursuant to the Registration Statement (a “Final
      Prospectus Filing”);
      provided,
      further, however,
      that
      any advance notification provisions set forth in this Agreement, including
      without limitation Sections 3(a) and 3(c), shall not apply to the extent that
      such provisions would render impracticable the Final Prospectus Filing within
      the period specified in this Section 3(b)(ii); (iii) respond as promptly as
      reasonably possible to any comments received from the Commission with respect
      to
      each Registration Statement or any amendment thereto and, as promptly as
      reasonably possible provide the Holders true and complete copies of all
      correspondence from and to the Commission relating to such Registration
      Statement that would not result in the disclosure to the Holders of material
      and
      non-public information concerning the Company; and (iv) comply in all material
      respects with the provisions of the Securities Act and the Exchange Act with
      respect to the Registration Statements, the delivery of the Prospectus or
      Prospectuses and the disposition of all Registrable Securities covered by each
      Registration Statement.

    


    (c)
      Notify the Holders as promptly as reasonably possible (and, in the case of
      (i)(A) below, not less than three Trading Days prior to such filing) and (if
      requested by any such Person) confirm such notice in writing as promptly as
      reasonably possible (i)(A) when a Prospectus or any Prospectus supplement or
      post-effective amendment to a Registration Statement is proposed to be filed;
      (B) when the Commission notifies the Company whether there will be a “review” of
      such Registration Statement and whenever the Commission comments in writing
      on
      such Registration Statement (the Company shall provide true and complete copies
      thereof and all written responses thereto to each of the Holders that pertain
      to
      the Holders as a Selling Stockholder or to the Plan of Distribution, but not
      information which the Company believes would constitute material and non-public
      information); and (C) with respect to each Registration Statement or any
      post-effective amendment, when the same has become effective; (ii) of any
      request by the Commission or any other Federal or state governmental authority
      for amendments or supplements to a Registration Statement or Prospectus or
      for
      additional information; (iii) of the issuance by the Commission of any stop
      order suspending the effectiveness of a Registration Statement covering any
      or
      all of the Registrable Securities or the initiation of any Proceedings for
      that
      purpose; (iv) of the receipt by the Company of any notification with respect
      to
      the suspension of the qualification or exemption from qualification of any
      of
      the Registrable Securities for sale in any jurisdiction, or the initiation
      or
      threatening of any Proceeding for such purpose; and (v) of the occurrence of
      any
      event or passage of time that makes the financial statements included in a
      Registration Statement ineligible for inclusion therein or any statement made
      in
      such Registration Statement or Prospectus or any document incorporated or deemed
      to be incorporated therein by reference untrue in any material respect or that
      requires any revisions to such Registration Statement, Prospectus or other
      documents so that, in the case of such Registration Statement or the Prospectus,
      as the case may be, it will not contain any untrue statement of a material
      fact
      or omit to state any material fact required to be stated therein or necessary
      to
      make the statements therein, in light of the circumstances under which they
      were
      made, not misleading.

     

    
      
         

      

      
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    (d)
      Use
      its reasonable best efforts to avoid the issuance of, or, if issued, obtain
      the
      withdrawal of (i) any order suspending the effectiveness of a Registration
      Statement, or (ii) any suspension of the qualification (or exemption from
      qualification) of any of the Registrable Securities for sale in any
      jurisdiction, at the earliest practicable moment.

     

    (e)
      Furnish to each Holder, without charge, at least one conformed copy of each
      Registration Statement and each amendment thereto and all exhibits to the extent
      requested by such Person (including those previously furnished) promptly after
      the filing of such documents with the Commission.

     

    (f)
      Promptly deliver to each Holder, without charge, as many copies of each
      Prospectus or Prospectuses (including each form of prospectus) and each
      amendment or supplement thereto as such Persons may reasonably request. The
      Company hereby consents to the use of such Prospectus and each amendment or
      supplement thereto by each of the selling Holders in connection with the
      offering and sale of the Registrable Securities covered by such Prospectus
      and
      any amendment or supplement thereto.

     

    (g)
      Prior
      to any public offering of Registrable Securities, to register or qualify or
      cooperate with the selling Holders in connection with the registration or
      qualification (or exemption from such registration or qualification) of such
      Registrable Securities for offer and sale under the securities or Blue Sky
      laws
      of all jurisdictions within the United States, to keep each such registration
      or
      qualification (or exemption therefrom) effective during the Effectiveness Period
      and to do any and all other acts or things necessary or advisable to enable
      the
      disposition in such jurisdictions of the Registrable Securities covered by
      the
      Registration Statements.

     

    (h)
      Cooperate with the Holders to facilitate the timely preparation and delivery
      of
      certificates representing Registrable Securities to be delivered to a transferee
      pursuant to the Registration Statements, which certificates shall be free,
      to
      the extent permitted by the Purchase Agreement, of all restrictive legends,
      and
      to enable such Registrable Securities to be in such denominations and registered
      in such names as any such Holders may request.

     

    (i)
      Upon
      the occurrence of any event contemplated by Section 3(c)(v), as promptly as
      reasonably possible, prepare a supplement or amendment, including a
      post-effective amendment, to the affected Registration Statements or a
      supplement to the related Prospectus or any document incorporated or deemed
      to
      be incorporated therein by reference, and file any other required document
      so
      that, as thereafter delivered, no Registration Statement nor any Prospectus
      will
      contain an untrue statement of a material fact or omit to state a material
      fact
      required to be stated therein or necessary to make the statements therein,
      in
      light of the circumstances under which they were made, not
      misleading.

    


    (j) Comply
      with all applicable rules and regulations of the Commission.

     

    4.
      Registration
      Expenses.
      All
      fees and expenses incident to the performance of or compliance with this
      Agreement by the Company shall be borne by the Company whether or not any
      Registrable Securities are sold pursuant to a Registration Statement. The fees
      and expenses referred to in the foregoing sentence shall include, without
      limitation, (i) all registration and filing fees (including, without limitation,
      fees and expenses (A) with respect to filings required to be made with any
      Trading Market on which the Common Stock is then listed for trading, and (B)
      in
      compliance with applicable state securities or Blue Sky laws), (ii) printing
      expenses (including, without limitation, expenses of printing certificates
      for
      Registrable Securities), (iii) messenger, telephone and delivery expenses,
      (iv)
      fees and disbursements of counsel for the Company, (v) Securities Act liability
      insurance, if the Company so desires such insurance, and (vi) fees and expenses
      of all other Persons retained by the Company in connection with the consummation
      of the transactions contemplated by this Agreement. In addition, the Company
      shall be responsible for all of its internal expenses incurred in connection
      with the consummation of the transactions contemplated by this Agreement
      (including, without limitation, all salaries and expenses of its officers and
      employees performing legal or accounting duties), the expense of any annual
      audit and the fees and expenses incurred in connection with the listing of
      the
      Registrable Securities on any securities exchange as required
      hereunder.

     

    
      
         

      

      
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    5.
      No
      Piggyback on Registrations.
      Neither
      the Company nor any of its security holders (other than the Holders in such
      capacity pursuant hereto) may include securities of the Company in a
      Registration Statement other than the Registrable Securities. The Company shall
      not file any other registration statements until 60 Trading Days following
      the
      date that a Registration Statement or Registration Statements registering all
      the Registrable Securities is declared effective by the Commission, provided
      that this Section shall not prohibit the Company from filing amendments to
      registration statements already filed.

    


      6.
      Indemnification.

     

    (a)
      Indemnification
      by the Company.
      The
      Company shall, notwithstanding any termination of this Agreement, indemnify
      and
      hold harmless each Holder, the officers, directors, agents, investment advisors,
      partners, members and employees of each of them, each Person who controls any
      such Holder (within the meaning of Section 15 of the Securities Act or Section
      20 of the Exchange Act) and the officers, directors, agents and employees of
      each such controlling Person, to the fullest extent permitted by applicable
      law,
      from and against any and all losses, claims, damages, liabilities, costs
      (including, without limitation, reasonable costs of preparation and reasonable
      attorneys’ fees) and expenses (collectively, “Losses”),
      as
      incurred, arising out of any untrue or alleged untrue statement of a material
      fact contained in any Registration Statement, any Prospectus or any form of
      prospectus or in any amendment or supplement thereto or in any preliminary
      prospectus, or arising out of or relating to any omission or alleged omission
      of
      a material fact required to be stated therein or necessary to make the
      statements therein (in the case of any Prospectus or form of prospectus or
      supplement thereto, in light of the circumstances under which they were made)
      not misleading, except to the extent, but only to the extent, that (1) such
      untrue statements or omissions are based solely upon information regarding
      such
      Holder furnished in writing to the Company by such Holder expressly for use
      therein, or to the extent that such information relates to such Holder or such
      Holder’s proposed method of distribution of Registrable Securities and was
      reviewed and expressly approved in writing by such Holder expressly for use
      in
      the Registration Statement, such Prospectus or such form of Prospectus or in
      any
      amendment or supplement thereto (it being understood that the Holder has
      approved Annex A hereto for this purpose) or (2) in the case of an occurrence
      of
      an event of the type specified in Section 3(c)(ii)-(v), the use by such Holder
      of an outdated or defective Prospectus after the Company has notified such
      Holder in writing that the Prospectus is outdated or defective and prior to
      the
      receipt by such Holder of an Advice or an amended or supplemented Prospectus,
      but only if and to the extent that following the receipt of the Advice or the
      amended or supplemented Prospectus the misstatement or omission giving rise
      to
      such Loss would have been corrected. The Company shall notify the Holders
      promptly of the institution, threat or assertion of any Proceeding of which
      the
      Company is aware in connection with the transactions contemplated by this
      Agreement.

     

    (b)
      Indemnification
      by Holders.
      Each
      Holder shall, severally and not jointly, indemnify and hold harmless the
      Company, its directors, officers, agents and employees, each Person who controls
      the Company (within the meaning of Section 15 of the Securities Act and Section
      20 of the Exchange Act), and the directors, officers, agents or employees of
      such controlling Persons, to the fullest extent permitted by applicable law,
      from and against all Losses, as incurred, arising solely out of or based solely
      upon: (x) such Holder’s failure to comply with the prospectus delivery
      requirements of the Securities Act or (y) any untrue statement of a material
      fact contained in any Registration Statement, any Prospectus, or any form of
      prospectus, or in any amendment or supplement thereto, or arising solely out
      of
      or based solely upon any omission of a material fact required to be stated
      therein or necessary to make the statements therein not misleading to the
      extent, but only to the extent that, (1) such untrue statements or omissions
      are
      based solely upon information regarding such Holder furnished in writing to
      the
      Company by such Holder expressly for use therein, or to the extent that such
      information relates to such Holder or such Holder’s proposed method of
      distribution of Registrable Securities and was reviewed and expressly approved
      in writing by such Holder expressly for use in the Registration Statement (it
      being understood that the Holder has approved Annex A hereto for this purpose),
      such Prospectus or such form of Prospectus or in any amendment or supplement
      thereto or (2) in the case of an occurrence of an event of the type specified
      in
      Section 3(c)(ii)-(v), the use by such Holder of an outdated or defective
      Prospectus after the Company has notified such Holder in writing that the
      Prospectus is outdated or defective and prior to the receipt by such Holder
      of
      an Advice or an amended or supplemented Prospectus, but only if and to the
      extent that following the receipt of the Advice or the amended or supplemented
      Prospectus the misstatement or omission giving rise to such Loss would have
      been
      corrected. In no event shall the liability of any selling Holder hereunder
      be
      greater in amount than the dollar amount of the net proceeds received by such
      Holder upon the sale of the Registrable Securities giving rise to such
      indemnification obligation.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    


    (c)
      Conduct
      of Indemnification Proceedings.
      If any
      Proceeding shall be brought or asserted against any Person entitled to indemnity
      hereunder (an “Indemnified
      Party”),
      such
      Indemnified Party shall promptly notify the Person from whom indemnity is sought
      (the “Indemnifying
      Party”)
      in
      writing, and the Indemnifying Party shall assume the defense thereof, including
      the employment of counsel reasonably satisfactory to the Indemnified Party
      and
      the payment of all fees and expenses incurred in connection with defense
      thereof; provided, that the failure of any Indemnified Party to give such notice
      shall not relieve the Indemnifying Party of its obligations or liabilities
      pursuant to this Agreement, except (and only) to the extent that it shall be
      finally determined by a court of competent jurisdiction (which determination
      is
      not subject to appeal or further review) that such failure shall have
      proximately and materially adversely prejudiced the Indemnifying
      Party.

     

    An
      Indemnified Party shall have the right to employ separate counsel in any such
      Proceeding and to participate in the defense thereof, but the fees and expenses
      of such counsel shall be at the expense of such Indemnified Party or Parties
      unless: (1) the Indemnifying Party has agreed in writing to pay such fees and
      expenses; (2) the Indemnifying Party shall have failed promptly to assume the
      defense of such Proceeding and to employ counsel reasonably satisfactory to
      such
      Indemnified Party in any such Proceeding; or (3) the named parties to any such
      Proceeding (including any impleaded parties) include both such Indemnified
      Party
      and the Indemnifying Party, and such Indemnified Party shall have been advised
      by counsel that a conflict of interest is likely to exist if the same counsel
      were to represent such Indemnified Party and the Indemnifying Party (in which
      case, if such Indemnified Party notifies the Indemnifying Party in writing
      that
      it elects to employ separate counsel at the expense of the Indemnifying Party,
      the Indemnifying Party shall not have the right to assume the defense thereof
      and such counsel shall be at the expense of the Indemnifying Party). The
      Indemnifying Party shall not be liable for any settlement of any such Proceeding
      effected without its written consent, which consent shall not be unreasonably
      withheld. No Indemnifying Party shall, without the prior written consent of
      the
      Indemnified Party, effect any settlement of any pending Proceeding in respect
      of
      which any Indemnified Party is a party, unless such settlement includes an
      unconditional release of such Indemnified Party from all liability on claims
      that are the subject matter of such Proceeding.

    


    All
      fees
      and expenses of the Indemnified Party (including reasonable fees and expenses
      to
      the extent incurred in connection with investigating or preparing to defend
      such
      Proceeding in a manner not inconsistent with this Section) shall be paid to
      the
      Indemnified Party, as incurred, within ten Trading Days of written notice
      thereof to the Indemnifying Party (regardless of whether it is ultimately
      determined that an Indemnified Party is not entitled to indemnification
      hereunder; provided, that the Indemnifying Party may require such Indemnified
      Party to undertake to reimburse all such fees and expenses to the extent it
      is
      finally judicially determined that such Indemnified Party is not entitled to
      indemnification hereunder).

    


    (d)
      Contribution.
      If a
      claim for indemnification under Section 5(a) or 5(b) is unavailable to an
      Indemnified Party (by reason of public policy or otherwise), then each
      Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
      contribute to the amount paid or payable by such Indemnified Party as a result
      of such Losses, in such proportion as is appropriate to reflect the relative
      fault of the Indemnifying Party and Indemnified Party in connection with the
      actions, statements or omissions that resulted in such Losses as well as any
      other relevant equitable considerations. The relative fault of such Indemnifying
      Party and Indemnified Party shall be determined by reference to, among other
      things, whether any action in question, including any untrue or alleged untrue
      statement of a material fact or omission or alleged omission of a material
      fact,
      has been taken or made by, or relates to information supplied by, such
      Indemnifying Party or Indemnified Party, and the parties’ relative intent,
      knowledge, access to information and opportunity to correct or prevent such
      action, statement or omission. The amount paid or payable by a party as a result
      of any Losses shall be deemed to include, subject to the limitations set forth
      in Section 5(c), any reasonable attorneys’ or other reasonable fees or expenses
      incurred by such party in connection with any Proceeding to the extent such
      party would have been indemnified for such fees or expenses if the
      indemnification provided for in this Section was available to such party in
      accordance with its terms.

     

    The
      parties hereto agree that it would not be just and equitable if contribution
      pursuant to this Section 5(d) were determined by pro rata allocation or by
      any
      other method of allocation that does not take into account the equitable
      considerations referred to in the immediately preceding paragraph.
      Notwithstanding the provisions of this Section 5(d), no Holder shall be required
      to contribute, in the aggregate, any amount in excess of the amount by which
      the
      proceeds actually received by such Holder from the sale of the Registrable
      Securities subject to the Proceeding exceeds the amount of any damages that
      such
      Holder has otherwise been required to pay by reason of such untrue or alleged
      untrue statement or omission or alleged omission.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    


    The
      indemnity and contribution agreements contained in this Section are in addition
      to any liability that the Indemnifying Parties may have to the Indemnified
      Parties.

    


    7.
      Miscellaneous.

     

    (a)
      Remedies.
      In the
      event of a breach by the Company or by a Holder, of any of their obligations
      under this Agreement, each Holder or the Company, as the case may be, in
      addition to being entitled to exercise all rights granted by law and under
      this
      Agreement, including recovery of damages, will be entitled to specific
      performance of its rights under this Agreement. The Company and each Holder
      agree that monetary damages would not provide adequate compensation for any
      losses incurred by reason of a breach by it of any of the provisions of this
      Agreement and hereby further agrees that, in the event of any action for
      specific performance in respect of such breach, it shall waive the defense
      that
      a remedy at law would be adequate.

    


    (b)
      Compliance.
      Each
      Holder covenants and agrees that it will comply with the prospectus delivery
      requirements of the Securities Act as applicable to it in connection with sales
      of Registrable Securities pursuant to the Registration Statement.

     

    (c)
      Discontinued
      Disposition.
      Each
      Holder agrees by its acquisition of such Registrable Securities that, upon
      receipt of a notice from the Company of the occurrence of any event of the
      kind
      described in Section 3(c), such Holder will forthwith discontinue disposition
      of
      such Registrable Securities under the Registration Statement until such Holder’s
      receipt of the copies of the supplemented Prospectus and/or amended Registration
      Statement or until it is advised in writing (the “Advice”)
      by the
      Company that the use of the applicable Prospectus may be resumed, and, in either
      case, has received copies of any additional or supplemental filings that are
      incorporated or deemed to be incorporated by reference in such Prospectus or
      Registration Statement. The Company may provide appropriate stop orders to
      enforce the provisions of this paragraph.

     

    (d)
      Amendments
      and Waivers.
      The
      provisions of this Agreement, including the provisions of this Section 7(d),
      may
      not be amended, modified or supplemented, and waivers or consents to departures
      from the provisions hereof may not be given, unless the same shall be in writing
      and signed by the Company and the Holders of no less than a majority in interest
      of the then outstanding Registrable Securities. Notwithstanding the foregoing,
      a
      waiver or consent to depart from the provisions hereof with respect to a matter
      that relates exclusively to the rights of certain Holders and that does not
      directly or indirectly affect the rights of other Holders may be given by
      Holders of at least a majority of the Registrable Securities to which such
      waiver or consent relates.

     

    (e)
      Notices.
      Any and
      all notices or other communications or deliveries required or permitted to
      be
      provided hereunder shall be in writing and shall be deemed given and effective
      on the earliest of (a) the date of transmission, if such notice or communication
      is delivered via facsimile (provided the sender receives a machine-generated
      confirmation of successful transmission and reasonably promptly following such
      transmission sends such notice or communication via U.S. mail or overnight
      courier) at the facsimile number specified in this Section prior to 6:30 p.m.
      (New York City time) on a Trading Day, (b) the next Trading Day after the date
      of transmission, if such notice or communication is delivered via facsimile
      at
      the facsimile number specified in this Section on a day that is not a Trading
      Day or later than 6:30 p.m. (New York City time) on any Trading Day, (c) the
      Trading Day following the date of mailing, if sent by U.S. nationally recognized
      overnight courier service, or (d) upon actual receipt by the party to whom
      such
      notice is required to be given. The address for such notices and communications
      shall be as follows:

     

    
      	
               

            	
              If
                to the Company: 

            	 	
              China
                Natural Gas, Inc.

            
	 	 	 	
              Tang
                Xing Shu Ma Building, Suite 418 

            
	 	 	 	
              Tang
                Xing Road 

            
	
               

            	 	 	
              Xian
                High Tech Area

            
	
               

            	
               

            	 	
              Xian,
                Shaanxi Province, China

            
	
               

            	
               

            	 	
              Facsimile
                No.: 

            
	
               

            	
               

            	 	
              Telephone
                No.: 86-29-88323325 

            
	
               

            	
               

            	 	
              Attention:
                Chief Financial Officer 

            


    

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    
      	
               

            	
              With
                a copy to: 

            	 	
              Crone
                Rozynko LLP 

            
	
               

            	
               

            	 	
              101
                Montgomery Street, Suite 1950 

            
	
               

            	
               

            	 	
              San
                Francisco, CA 94104 

            
	
               

            	
               

            	 	
              Facsimile
                No.: (415) 955-8900 

            
	
               

            	
               

            	 	
              Attention:
                Alisande M. Rozynko, Esq. 

            
	
               

            	
               

            	 	
               

            
	
               

            	
              If
                to an Investor: 

            	 	
              To
                the address set forth under such Investor’s name on the signature pages
                hereof 

            
	
               

            	
               

            	 	
               

            
	
               

            	
              If
                to any other Person who is then the registered Holder: 

            
	
               

            	 	
               

            
	
               

            	 	
              To
                the address of such Holder as it appears in the stock transfer books
                of
                the Company or such other address as may be designated in writing
                hereafter, in the same manner, by such Person.


            


    

     

       (f)
      Successors
      and Assigns.
      This
      Agreement shall inure to the benefit of and be binding upon the successors
      and
      permitted assigns of each of the parties and shall inure to the benefit of
      each
      Holder. Other than in connection with a merger, consolidation, sale of all
      or
      substantially all of the Company’s assets or other similar change in control
      transaction, the Company may not assign this Agreement or any rights or
      obligations hereunder without the prior written consent of each Holder. Each
      Holder may assign their respective rights hereunder in the manner and to the
      Persons as permitted under the Purchase Agreement.

     

    (g)
      Execution
      and Counterparts.
      This
      Agreement may be executed in any number of counterparts, each of which when
      so
      executed shall be deemed to be an original and, all of which taken together
      shall constitute one and the same Agreement. In the event that any signature
      is
      delivered by facsimile transmission, such signature shall create a valid binding
      obligation of the party executing (or on whose behalf such signature is
      executed) the same with the same force and effect as if such facsimile signature
      were the original thereof.

     

    (h)
      Governing
      Law.
      All
      questions concerning the construction, validity, enforcement and interpretation
      of this Agreement shall be governed by and construed and enforced in accordance
      with the internal laws of the State of California, without regard to the
      principles of conflicts of law thereof. Each party agrees that all Proceedings
      concerning the interpretations, enforcement and defense of the transactions
      contemplated by this Agreement (whether brought against a party hereto or its
      respective Affiliates, employees or agents) will be commenced in the California
      Courts. Each party hereto hereby irrevocably submits to the exclusive
      jurisdiction of the California Courts for the adjudication of any dispute
      hereunder or in connection herewith or with any transaction contemplated hereby
      or discussed herein, and hereby irrevocably waives, and agrees not to assert
      in
      any Proceeding, any claim that it is not personally subject to the jurisdiction
      of any California Court, or that such Proceeding has been commenced in an
      improper or inconvenient forum. Each party hereto hereby irrevocably waives
      personal service of process and consents to process being served in any such
      Proceeding by mailing a copy thereof via registered or certified mail or
      overnight delivery (with evidence of delivery) to such party at the address
      in
      effect for notices to it under this Agreement and agrees that such service
      shall
      constitute good and sufficient service of process and notice thereof. Nothing
      contained herein shall be deemed to limit in any way any right to serve process
      in any manner permitted by law. Each party hereto hereby irrevocably waives,
      to
      the fullest extent permitted by applicable law, any and all right to trial
      by
      jury in any Proceeding arising out of or relating to this Agreement or the
      transactions contemplated hereby. If either party shall commence a Proceeding
      to
      enforce any provisions of this Agreement, then the prevailing party in such
      Proceeding shall be reimbursed by the other party for its attorney’s fees and
      other costs and expenses incurred with the investigation, preparation and
      prosecution of such Proceeding.

    


    (i)
      Cumulative
      Remedies.
      The
      remedies provided herein are cumulative and not exclusive of any remedies
      provided by law.

     

    (j)
      Severability.
      If any
      term, provision, covenant or restriction of this Agreement is held by a court
      of
      competent jurisdiction to be invalid, illegal, void or unenforceable, the
      remainder of the terms, provisions, covenants and restrictions set forth herein
      shall remain in full force and effect and shall in no way be affected, impaired
      or invalidated, and the parties hereto shall use their reasonable efforts to
      find and employ an alternative means to achieve the same or substantially the
      same result as that contemplated by such term, provision, covenant or
      restriction. It is hereby stipulated and declared to be the intention of the
      parties that they would have executed the remaining terms, provisions, covenants
      and restrictions without including any of such that may be hereafter declared
      invalid, illegal, void or unenforceable.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    (k)
      Headings.
      The
      headings in this Agreement are for convenience of reference only and shall
      not
      limit or otherwise affect the meaning hereof.

     

    (l)
      Independent
      Nature of Investors’ Obligations and Rights.
      The
      obligations of each Investor under this Agreement are several and not joint
      with
      the obligations of each other Investor, and no Investor shall be responsible
      in
      any way for the performance of the obligations of any other Investor under
      this
      Agreement. The Company’s obligations to each Investor under this Agreement are
      identical to its obligations to each other Investor other than such differences
      resulting solely from the number of Securities purchased by each Investor,
      but
      regardless of whether such obligations are memorialized herein or in another
      agreement between the Company and an Investor. Nothing contained herein or
      in
      any Transaction Document, and no action taken by any Investor pursuant thereto,
      shall be deemed to constitute the Investors as a partnership, an association,
      a
      joint venture or any other kind of entity, or create a presumption that the
      Investors are in any way acting in concert or as a group with respect to such
      obligations or the transactions contemplated by this Agreement or any other
      Transaction Document. Each Investor acknowledges that no other Investor will
      be
      acting as agent of such Investor in enforcing its rights under this Agreement.
      Each Investor shall be entitled to independently protect and enforce its rights,
      including without limitation the rights arising out of this Agreement, and
      it
      shall not be necessary for any other Investor to be joined as an additional
      party in any Proceeding for such purpose. The Company acknowledges that each
      of
      the Investors has been provided with the same Registration Rights Agreement
      for
      the purpose of closing a transaction with multiple Investors and not because
      it
      was required or requested to do so by any Investor.

    


    [Remainder
      of Page Intentionally Left Blank]


    
      
         

      

      
        11

        
          

        

      

      
         

      

    


    In
      Witness Whereof,
      the
      parties have executed this Registration Rights Agreement as of the date first
      written above.

     

    
      	 	 	 
	 	
              CHINA
                NATURAL GAS, INC.

            
	 
 	 
 	 
 
	
            	By:  	
              /s/
                Qinan Ji

            
	 	
              

              Name:
                Qinan
                Ji 

            
	 	
              Title:
                Chief
                Executive Officer 

            


    

     

    [Signature
      Pages of Investors to Follow]

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    


    In
      Witness Whereof,
      the
      parties have executed this Registration Rights Agreement as of the date first
      written above.

     

    
      	
            	 	 
	 	
              NAME
                OF INVESTING ENTITY 

              
                 
                  Alder Capital Partners I, L.P.

              

            
	 
 	 
 	 
 
	
            	By:  	
              
                /s/
                  Michael Licosati

              

            
	 	
              

              Name:
                Michael
                Licosati

            
	 	
              Title:
                Managing
                Partner 

            


       

    

    
      	
            	 	 
	 	
              
                ADDRESS
                  FOR NOTICE 

              

            
	 
 	 
 	 
 
	
            	
              c/o: 

            	
              
                
                  Alder
                    Capital, LLC.

                

              

            
	 	 
	 	
              
                Street:
                  12750
                  High Bluff Dr., Suite 120

                
                  City/State/Zip:
                    San
                    Diego, CA 92130

                

                
                  Attention:
                    Michael
                    Licosati

                

              

            
	 	
              
                Tel:
                  (858)259-3900x101

                
                  Fax:
                    (858)259-3272

                

                
                  Email: mlicosati@aldercap.com

                

              

            


       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    


    In
      Witness Whereof,
      the
      parties have executed this Registration Rights Agreement as of the date first
      written above.

     

    
      	
            	 	 
	 	
              NAME
                OF INVESTING ENTITY 


              
                
                   
                    Alder Offshore Partners, Ltd.

                

              

            
	 
 	 
 	 
 
	
            	By:  	
              
                /s/
                  Michael Licosati

              

            
	 	
              

              Name:
                Michael
                Licosati

            
	 	
              Title:
                Managing
                Partner 

            


       

      
        	
              	 	 
	 	
                
                  ADDRESS
                    FOR NOTICE 

                

              
	 
 	 
 	 
 
	
              	
                c/o: 

              	
                
                  
                    Alder
                      Capital, LLC.

                  

                

              
	 	 
	 	
                
                  Street:
                    12750
                    High Bluff Dr., Suite 120

                  
                    City/State/Zip:
                      San
                      Diego, CA 92130

                  

                  
                    Attention:
                      Michael
                      Licosati

                  

                

              
	 	
                
                  Tel:
                    (858)259-3900x101

                  
                    Fax:
                      (858)259-3272

                  

                  
                    Email: mlicosati@aldercap.com

                  

                

              


         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

    

     

    In
      Witness Whereof,
      the
      parties have executed this Registration Rights Agreement as of the date first
      written above.

     

    
      	
            	 	 
	 	
              NAME
                OF INVESTING ENTITY 

              
                 
                  Enable Opportunity Partners, L.P.

              

            
	 
 	 
 	 
 
	
            	By:  	
              
                /s/
                  Brendan O’Neil

              

            
	 	
              

              Name:
                Brendan
                O’Neil

            
	 	
              Title:
                Principal
                and Portfolio Manager

            


       

      
        	
              	 	 
	 	
                
                  ADDRESS
                    FOR NOTICE 

                

              
	 
 	 
 	 
 
	
              	
                c/o: 

              	
                
                  
                    
                      Enable
                        Opportunity Partners,
                        L.P.

                    

                  

                

              
	 	 
	 	
                
                  
                    Street:
                      One
                      Ferry Building Suite 255

                  

                

              
	 	
                
                  
                    City/State/Zip:
                      San
                      Francisco, CA 94111

                    
                      Attention:
                        Brendan
                        O’Neil

                    

                    
                      Tel:
                        (415)677-1578

                    

                    
                      Fax:
                        (415)677-1580

                    

                    
                      Email: boneil@enablecapital.com

                    

                  

                

              


         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

    

     

    In
      Witness Whereof,
      the
      parties have executed this Registration Rights Agreement as of the date first
      written above.

     

    
      	
            	 	 
	 	
              NAME
                OF INVESTING ENTITY 

              
                
                   
                    Enable Growth Partners, L.P.

                

              

            
	 
 	 
 	 
 
	
            	By:  	
              
                /s/
                  Brendan O’Neil

              

            
	 	
              

              Name:
                Brendan
                O’Neil

            
	 	
              Title:
                Principal
                and Portfolio Manager

            


       

      
        	
              	 	 
	 	
                
                  ADDRESS
                    FOR NOTICE 

                

              
	 
 	 
 	 
 
	
              	
                c/o: 

              	
                
                  
                    
                      Brendan
                        O’Neil

                    

                  

                

              
	 	 
	 	
                
                  
                    Street:
                      One
                      Ferry Building Suite 255

                  

                

              
	 	
                
                  
                    
                      City/State/Zip:
                        San
                        Francisco, CA 94111

                      
                        Attention:
                          Brendan
                          O’Neil

                      

                      
                        Tel:
                          (415)677-1578

                      

                      
                        Fax:
                          (415)677-1580

                        
                          Email:
                            boneil@enablecapital.com

                        

                      

                    

                  

                

              


      

    

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    In
      Witness Whereof,
      the
      parties have executed this Registration Rights Agreement as of the date first
      written above.

     

    
      	
            	 	 
	 	
              NAME
                OF INVESTING ENTITY 

              
                
                  
                     
                      Lagunitas Partners,
                      L.P.

                  

                

              

            
	 
 	 
 	 
 
	
            	By:  	
              
                
                  /s/
                    Jon D. Gruber

                

              

            
	 	
              

              Name:
                Gruber
                + McBaine Capital Management

            
	 	
              Title:
                General
                Partner

            


       

      
        	
              	 	 
	 	
                
                  ADDRESS
                    FOR NOTICE 

                

              
	 
 	 
 	 
 
	
              	
                c/o: 

              	
                
                  
                    Gruber
                      + McBaine Capital
                      Management

                  

                

              
	 	 
	 	
                
                  
                    Street:
                      50
                      Osgood Place - Penthouse

                  

                

              
	 	
                
                  
                    
                      
                        City/State/Zip:
                          San
                          Francisco, CA 94133

                      

                      
                        Attention:
                          Christine
                          Arroyo

                      

                      
                        Tel:
                          (415)782-2606

                      

                      
                        Fax:
                          (415)981-6434

                      

                      
                        Email: Chris@gmem.com

                      

                    

                  

                

              


      

    

    
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    In
      Witness Whereof,
      the
      parties have executed this Registration Rights Agreement as of the date first
      written above.

     

    
      	
            	 	 
	 	
              NAME
                OF INVESTING ENTITY 

              
                
                  
                    
                       
                        Gruber + McBaine
                        International

                    

                  

                

              

            
	 
 	 
 	 
 
	
            	By:  	
              
                
                  /s/
                    Jon D. Gruber

                

              

            
	 	
              

              Name:
                Gruber
                + McBaine Capital Management

            
	 	
              Title:
                Investment
                Advisor

            


       

      
        	
              	 	 
	 	
                
                  ADDRESS
                    FOR NOTICE 

                

              
	 
 	 
 	 
 
	
              	
                c/o: 

              	
                
                  
                    
                      Gruber+McBaine
                        Capital
                        Management

                    

                  

                

              
	 	 
	 	
                
                  
                    Street:
                      50
                      Osgood Place - Penthouse

                  

                

              
	 	
                
                  
                    
                      
                        City/State/Zip:
                          San
                          Francisco, CA 94133

                      

                      
                        Attention:
                          Christine
                          Arroyo

                      

                      
                        Tel:
                          (415)782-2606

                      

                      
                        Fax:
                          (415)981-6434

                      

                      
                        Email: Chris@gmem.com

                      

                    

                  

                

              


      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    In
      Witness Whereof,
      the
      parties have executed this Registration Rights Agreement as of the date first
      written above.

     

    
      	
            	 	 
	 	
              NAME
                OF INVESTING ENTITY 

              
                
                  
                    
                      
                         
                          Jon D and Linda W Gruber
                          Trust

                      

                    

                  

                

              

            
	 
 	 
 	 
 
	
            	By:  	
              
                
                  /s/
                    Jon D. Gruber

                

              

            
	 	
              

              Name:
                Gruber
                + McBaine Capital Management

            
	 	
              Title:
                Trustee

            


       

      
        	
              	 	 
	 	
                
                  ADDRESS
                    FOR NOTICE 

                

              
	 
 	 
 	 
 
	
              	
                c/o: 

              	
                
                  
                    
                      Gruber+McBaine
                        Capital
                        Management

                    

                  

                

              
	 	 
	 	
                
                  
                    Street:
                      50
                      Osgood Place - Penthouse

                  

                

              
	 	
                
                  
                    
                      
                        City/State/Zip:
                          San
                          Francisco, CA 94133

                      

                      
                        Attention:
                          Christine
                          Arroyo

                      

                      
                        Tel:
                          (415)782-2606

                      

                      
                        Fax:
                          (415)981-6434

                      

                      
                        Email: Chris@gmem.com

                      

                    

                  

                

              




      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    In
      Witness Whereof,
      the
      parties have executed this Registration Rights Agreement as of the date first
      written above.

     

    
      	
            	 	 
	 	
              NAME
                OF INVESTING ENTITY 

              
                
                  
                    
                      
                         
                          Excalibur Limited
                          Partnership

                      

                    

                  

                

              

            
	 
 	 
 	 
 
	
            	By:  	
              
                
                  /s/
                    William Hechter

                

              

            
	 	
              

              Name:
                William
                Hechter

            
	 	
              Title:
                President
                

            


       

      
        	
              	 	 
	 	
                
                  ADDRESS
                    FOR NOTICE 

                

              
	 
 	 
 	 
 
	
              	
                c/o: 

              	
                
                  
                     

                  

                

              
	 	 
	 	
                
                  
                    Street:
                      33
                      Prince Arthur Ave.

                  

                

              
	 	
                
                  
                    
                      
                        
                          City/State/Zip:
                            Toronto
                            On M5R 1B2

                          Attention:
                            William
                            Hechter

                          
                            Tel:
                              (416)964-9077

                          

                          
                            Fax:
                              (416)964-8868

                          

                          
                            Email: willhechter@excaliburlp.com

                          

                        

                      

                    

                  

                

              


      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    In
      Witness Whereof,
      the
      parties have executed this Registration Rights Agreement as of the date first
      written above. 

    


    
      	
            	 	 
	 	
              NAME
                OF INVESTING ENTITY 

              
                
                  
                    
                      
                          Pinnacle
                          China Fund,
                          L.P.

                      

                    

                  

                

              

            
	 
 	 
 	 
 
	
            	By:  	
              
                
                  
                    /s/
                      Barry M.
                      Kitt

                  

                

              

            
	 	
              

              Name:
                Barry
                M. Kitt

            
	 	
              Title:
                General
                Partner of Pinnacle China Fund,
                L.P.

            


       

      
        	
              	 	 
	 	
                
                  ADDRESS
                    FOR NOTICE 

                

              
	 
 	 
 	 
 
	
              	
                c/o: 

              	
                
                  
                    
                      Pinnacle
                        China Fund,
                        L.P.

                    

                  

                

              
	 	 
	 	
                
                  
                    
                      Street:
                        4965
                        Preston Park Blvd., Ste
                        240

                    

                  

                

              
	 	
                
                  
                    
                      
                        
                          
                            City/State/Zip:
                              Plano,
                              TX 75093

                            
                              Attention:
                                Barry
                                M. Kitt

                            

                            
                              Tel:
                                (972)985-2121

                            

                            
                              Fax:
                                (972)985-2122

                            

                            Email:
                              bk@pinnaclechinafund.com

                          

                        

                      

                    

                  

                

              


      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

         

      

    

    In
      Witness Whereof,
      the
      parties have executed this Registration Rights Agreement as of the date first
      written above.

     

    
      	
            	 	 
	 	
              NAME
                OF INVESTING ENTITY 

              
                
                  
                    
                      
                         
                          The Pinnacle Fund,
                          L.P.

                      

                    

                  

                

              

            
	 
 	 
 	 
 
	
            	By:  	
              
                
                  
                    /s/
                      Barry M.
                      Kitt

                  

                

              

            
	 	
              

              Name:
                Barry
                M. Kitt

            
	 	
              Title:
                General
                Partner of Pinnacle China Fund,
                L.P.

            


       

      
        	
              	 	 
	 	
                
                  ADDRESS
                    FOR NOTICE 

                

              
	 
 	 
 	 
 
	
              	
                c/o: 

              	
                
                  
                    
                      The
                        Pinnacle Fund,
                        L.P.

                    

                  

                

              
	 	 
	 	
                
                  
                    
                      Street:
                        4965
                        Preston Park Blvd., Ste
                        240

                    

                  

                

              
	 	
                
                  
                    
                      
                        
                          
                            City/State/Zip:
                              Plano,
                              TX 75093

                            
                              Attention:
                                Barry
                                M. Kitt

                            

                            
                              Tel:
                                (972)985-2121

                            

                            
                              Fax:
                                (972)985-2122

                            

                            Email:
                              bk@pinnaclechinafund.com

                          

                        

                      

                    

                  

                

              




      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    In
      Witness Whereof,
      the
      parties have executed this Registration Rights Agreement as of the date first
      written above.

     

    
      	
            	 	 
	 	
              NAME
                OF INVESTING ENTITY 

              
                
                  
                    
                      
                         
                          Patara Capital,
                          L.P.

                      

                    

                  

                

              

            
	 
 	 
 	 
 
	
            	By:  	
              
                
                  
                    /s/
                      Berke
                      Bakay

                  

                

              

            
	 	
              

              Name:
                

            
	 	
              Title:
                Principal

            


       

      
        	
              	 	 
	 	
                
                  ADDRESS
                    FOR NOTICE 

                

              
	 
 	 
 	 
 
	
              	
                c/o: 

              	
                
                  
                    
                      Patara
                        Capital,
                        L.P.

                    

                  

                

              
	 	 
	 	
                
                  
                    
                      Street:
                        5050
                        Quorum Drive, Ste
                        312

                    

                  

                

              
	 	
                
                  
                    
                      
                        
                          
                            
                              City/State/Zip:
                                Dallas,
                                TX 75254

                            

                            
                              Attention:
                                Berke
                                Bakay

                            

                            
                              Tel:
                                (214)866-0005

                            

                            
                              Fax:
                                (214)540-5796

                              
                                Email:
                                  bbakay@pataracap.com

                              

                            

                          

                        

                      

                    

                  

                

              




      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    In
      Witness Whereof,
      the
      parties have executed this Registration Rights Agreement as of the date first
      written above.

     

    
      	
            	 	 
	 	
              NAME
                OF INVESTING ENTITY 

              
                
                  
                    
                      
                         
                          Keyrock Partners,
                          L.P.

                      

                    

                  

                

              

            
	 
 	 
 	 
 
	
            	By:  	
              
                
                  
                    /s/
                      Stephen J.
                      Carter

                  

                

              

            
	 	
              

              
                Name:
                  Stephen
                  J. Carter

              

            
	 	
              Title:
                Managing
                Member

            


       

      
        	
              	 	 
	 	
                
                  ADDRESS
                    FOR NOTICE 

                

              
	 
 	 
 	 
 
	
              	
                c/o: 

              	
                
                  
                    
                      Keyrock
                        Partners,
                        L.P.

                    

                  

                

              
	 	 
	 	
                
                  
                    
                      Street:
                        8201
                        Preston Rd, Ste
                        400

                    

                  

                

              
	 	
                
                  
                    
                      
                        
                          
                            
                              
                                City/State/Zip:
                                  Dallas,
                                  TX 75225

                              

                              
                                Attention:
                                  Stephen
                                  Carter

                              

                              
                                Tel:
                                  (214)891-1601

                              

                              
                                Fax:
                                  (214)890-8825

                                Email:
                                  Stephen@keyrockcapital.com

                              

                            

                          

                        

                      

                    

                  

                

              


      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    In
      Witness Whereof,
      the
      parties have executed this Registration Rights Agreement as of the date first
      written above.

     

    
      
        	
              	 	 
	 	
                NAME
                  OF INVESTING ENTITY 

                
                  
                    
                      
                        
                           
                            Robert K. Moses,
                            Jr.

                        

                      

                    

                  

                

              
	 
 	 
 	 
 
	
              	By:  	
                
                  
                    
                      /s/
                        Robert K. Moses,
                        Jr.

                    

                  

                

              
	 	
                

                
                  Name:
                    Robert
                    K. Moses, Jr.

                

              
	 	
                Title:
                  

              


         

        
          	
                	 	 
	 	
                  
                    ADDRESS
                      FOR NOTICE 

                  

                
	 
 	 
 	 
 
	
                	
                  c/o: 

                	
                  
                    
                      
                        Robert
                          K. Moses,
                          Jr.

                      

                    

                  

                
	 	 
	 	
                  
                    
                      
                        Street:
                          P.O.
                          Box 27888

                      

                    

                  

                
	 	
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    City/State/Zip:
                                      Houston,
                                      TX 77227

                                  

                                

                                
                                  
                                    Attention:
                                      

                                  

                                

                                
                                  
                                    Tel:
                                      (713)781-6191

                                  

                                

                                
                                  
                                    Fax:
                                      (713)781-6022

                                  

                                  Email:
                                    

                                

                              

                            

                          

                        

                      

                    

                  

                


        

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    


    In
      Witness Whereof,
      the
      parties have executed this Registration Rights Agreement as of the date first
      written above.

    
       

      
        	
              	 	 
	 	
                NAME
                  OF INVESTING ENTITY 

                
                  
                    
                      
                        
                           
                            Straus GEPT Partners,
                            L.P.

                        

                      

                    

                  

                

              
	 
 	 
 	 
 
	
              	By:  	
                
                  
                    
                      
                        /s/
                          Craig
                          Connors

                      

                    

                  

                

              
	 	
                

                
                  Name:
                    Craig
                    Connors

                

              
	 	
                Title:
                  CFO

              


         

        
          	
                	 	 
	 	
                  
                    ADDRESS
                      FOR NOTICE 

                  

                
	 
 	 
 	 
 
	
                	
                  c/o: 

                	
                  
                    
                      
                        
                          Straus
                            Asset
                            Management

                        

                      

                    

                  

                
	 	 
	 	
                  
                    
                      
                        
                          Street:
                            320
                            Par, Ave., 10th
                            Floor

                        

                      

                    

                  

                
	 	
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    City/State/Zip:
                                      New
                                      York, NY 10022

                                    Attention:
                                      

                                    
                                      Tel:
                                        (212)415-7274

                                    

                                    
                                      Fax:
                                        (212)415-7256

                                    

                                    
                                      Email:
                                        cconnors@strauspartners.com

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                


        

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    In
      Witness Whereof,
      the
      parties have executed this Registration Rights Agreement as of the date first
      written above.

    


    
      	
               

            	
              NAME
                OF INVESTING ENTITY 

            
	
                

            	
               
                Straus Partners, L.P.

            
	 	
              By:
                

            	
              /s/
                Craig Connors 

            	
               

            
	
               

            	
              Name:
                

            	
              
                

              

              Craig
                Connors

            	
               

            
	
               

            	
              Title:
                

            	
              CFO

            	
               

            
	 	 	 	 
	
                

            	
              ADDRESS
                FOR NOTICE 

            
	 	
              c/o:
                

            	
              Straus
                Asset Management

            	
               

            
	
               

            	
              Street:
                

            	
              320
                Par, Ave., 10th
                Floor

            	
               

            
	
               

            	
              City/State/Zip:
                

            	
              New
                York, NY 10022

            	
               

            
	
               

            	
              Attention:
                

            	
               

            	
               

            
	
               

            	
              Tel:
                

            	
              (212)415-7274

            	
               

            
	
               

            	
              Fax:
                

            	
              (212)415-7256

            	
               

            
	
                

            	
              Email:
                

            	
              cconnors@strauspartners.com

            


    

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    In
      Witness Whereof,
      the
      parties have executed this Registration Rights Agreement as of the date first
      written above.

    


    
      	
               

            	
              NAME
                OF INVESTING ENTITY 

            
	
                

            	
               
                Sansar Capital Special Opportunity Master Fund, L.P.

            
	 	 	 	 
	 	
              By:
                

            	
              /s/
                Vincent Guacci

            	
               

            
	
               

            	
              Name:
                

            	
              
                

              

              Vincent
                Guacci

            	
               

            
	
               

            	
              Title:
                

            	
              CFO/COO

            	
               

            
	 	 	 	 
	
                

            	
              ADDRESS
                FOR NOTICE 

            
	 	
              c/o:
                

            	
              Sansar
                Capital Special Opportunity Master Fund

            	
               

            
	
               

            	
              Street:
                

            	
              25
                West 53rd
                St.

            	
               

            
	
               

            	
              City/State/Zip:
                

            	
              New
                York, NY 10019

            	
               

            
	
               

            	
              Attention:
                

            	
              Vince
                Guacci

            	
               

            
	
               

            	
              Tel:
                

            	
              (212)399-8980

            	
               

            
	
               

            	
              Fax:
                

            	
              (917)849-5120

            	
               

            
	
                

            	
              Email:
                

            	
              operaluns@sansarcapital.com

            


    

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    In
      Witness Whereof,
      the
      parties have executed this Registration Rights Agreement as of the date first
      written above.

    


    
      	
               

            	
              NAME
                OF INVESTING ENTITY 

            
	
                

            	
               
                Octagon Capital Partners

            
	 	
              By:
                

            	
              /s/
                Steven Hart

            	
               

            
	
               

            	
              Name:
                

            	
              
                

              

              Steven
                hart

            	
               

            
	
               

            	
              Title:
                

            	
              General
                Partner

            	
               

            
	 	 	 	 
	
                

            	
              ADDRESS
                FOR NOTICE 

            
	 	
              c/o:
                

            	
              Steven
                Hart

            	
               

            
	
               

            	
              Street:
                

            	
              155
                West 68th
                St., #276

            	
               

            
	
               

            	
              City/State/Zip:
                

            	
              New
                York, NY 10023

            	
               

            
	
               

            	
              Attention:
                

            	
               

            	
               

            
	
               

            	
              Tel:
                

            	
              (917)658-7878

            	
               

            
	
               

            	
              Fax:
                

            	
               

            	
               

            
	
                

            	
              Email:
                

            	
              octagoncp@yahoo.com

            


    

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    In
      Witness Whereof,
      the
      parties have executed this Registration Rights Agreement as of the date first
      written above.

    


    
      	
               

            	
              NAME
                OF INVESTING ENTITY 

            
	
                

            	
              Heller
                Capital Investments

            
	 	
              By:
                

            	
              /s/
                Ronald I. Heller

            	
               

            
	
               

            	
              Name:
                

            	
              
                

              

              Ronald
                I. Heller

            	
               

            
	
               

            	
              Title:
                

            	
              CIO

            	
               

            
	 	 	 	 
	
                

            	
              ADDRESS
                FOR NOTICE 

            
	 	
              c/o:
                

            	 	
               

            
	
               

            	
              Street:
                

            	
              700
                E. Palisade Ave.

            	
               

            
	
               

            	
              City/State/Zip:
                

            	
              Englewood
                Cliffs, NJ 07632

            	
               

            
	
               

            	
              Attention:
                

            	
              Steven
                Hart

            	
               

            
	
               

            	
              Tel:
                

            	
              (201)816-4235

            	
               

            
	
               

            	
              Fax:
                

            	
              (201)569-5014

            	
               

            
	
                

            	
              Email:
                

            	
              Snallceap777@yahoo.com

            


    

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    In
      Witness Whereof,
      the
      parties have executed this Registration Rights Agreement as of the date first
      written above.

    


    
      	
               

            	
              NAME
                OF INVESTING ENTITY 

            
	
                

            	
              Highbridge
                International, LLC

            
	 	 	 	 
	 	
              By:
                

            	
              /s/
                Adam J. Chill

            	
               

            
	
               

            	
              Name:
                

            	
              
                

              

              Adam
                J. Chill

            	
               

            
	
               

            	
              Title:
                

            	
              Managing
                Director

            	
               

            
	 	 	 	 
	
                

            	
              ADDRESS
                FOR NOTICE 

            
	 	
              c/o:
                

            	
              Highbridge
                Capital Mangement, L.L.C.

            	
               

            
	
               

            	
              Street:
                

            	
              9
                West 57th
                St., 27th
                Floor

            	
               

            
	
               

            	
              City/State/Zip:
                

            	
              New
                York, NY 10019

            	
               

            
	
               

            	
              Attention:
                

            	
              Ari
                J. Storch/Adam J. Chill

            	
               

            
	
               

            	
              Tel:
                

            	
              (212)287-4720

            	
               

            
	
               

            	
              Fax:
                

            	
              (212)-751-0755

            	
               

            
	
                

            	
              Email:
                

            	
              ari.storch@hcmng.com

              adam.chill@hcmng.com

            


    

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    In
      Witness Whereof,
      the
      parties have executed this Registration Rights Agreement as of the date first
      written above.

     

    
      	
               

            	
              NAME
                OF INVESTING ENTITY 

            
	
                

            	
              Whitebox
                Intermarket Partners, L.P.

            
	 	 	 	 
	 	
              By:
                

            	
              
                /s/
                  Jonathan Wood

              

            	
               

            
	
               

            	
              Name:
                

            	
              
                

              

              Jonathan
                Wood

            	
               

            
	
               

            	
              Title:
                

            	
              
                COO

              

            	
               

            
	 	 	 	 
	
                

            	
              ADDRESS
                FOR NOTICE 

            
	 	
              c/o:
                

            	
              Whitebox
                Advisors, LLC

            	
               

            
	
               

            	
              Street:
                

            	
              3033
                Excelsior Blvd., Ste 300

            	
               

            
	
               

            	
              City/State/Zip:
                

            	
              Minneapolis,
                MN 55416

            
	
               

            	
              Attention:
                

            	
              
                Ryan
                  Kuehn

              

            	
               

            
	
               

            	
              Tel:
                

            	
              
                (612)253-6069

              

            	
               

            
	
               

            	
              Fax:
                

            	
              
                (612)253-6169

              

            	
               

            
	
                

            	
              Email:
                

            	
              
                rkuehn@whiteboxadvisors.com

              

            


    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    In
      Witness Whereof,
      the
      parties have executed this Registration Rights Agreement as of the date first
      written above.

     

    
      	
               

            	
              NAME
                OF INVESTING ENTITY 

            
	
                

            	
              Heartland
                Value Fund

            
	 	 	 	 
	 	
              By:
                

            	
              
                /s/
                  David C. Fondrie

              

            	
               

            
	
               

            	
              Name:
                

            	
              
                

              

              David
                C. Fondrie

            	
               

            
	
               

            	
              Title:
                

            	
              
                CEO

              

            	
               

            
	 	 	 	 
	
                

            	
              ADDRESS
                FOR NOTICE 

            
	 	
              c/o:
                

            	
              Heartland
                Advisors, Inc.

            	
               

            
	
               

            	
              Street:
                

            	
              789
                N. Water St., Ste 500

            	
               

            
	
               

            	
              City/State/Zip:
                

            	
              Milwaukee,
                WI 53202

            
	
               

            	
              Attention:
                

            	
              
                Nicole
                  Best

              

            	
               

            
	
               

            	
              Tel:
                

            	
              
                (414)977-8748

              

            	
               

            
	
               

            	
              Fax:
                

            	
              
                
                  (414)977-8948

                

              

            	
               

            
	
                

            	
              Email:
                

            	
              
                nbest@heartlandfunds.com

                pbeste@heartlandfunds.com

                croberts@heartlandfunds.com

              

            


    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    In
      Witness Whereof,
      the
      parties have executed this Registration Rights Agreement as of the date first
      written above.

     

    
      	
               

            	
              NAME
                OF INVESTING ENTITY 

            
	
                

            	
              Nite
                Capital Master, Ltd.

            
	 	 	 	 
	 	
              By:
                

            	
              
                
                  /s/
                    Keith A. Goodman

                

              

            	
               

            
	
               

            	
              Name:
                

            	
              
                

              

              
                Keith
                  A. Goodman

              

            	
               

            
	
               

            	
              Title:
                

            	
              
                
                  Authorized
                    Signatory

                

              

            	
               

            
	 	 	 	 
	
                

            	
              ADDRESS
                FOR NOTICE 

            
	 	
              c/o:
                

            	
              
                Nite
                  Capital Master, Ltd.

              

            	
               

            
	
               

            	
              Street:
                

            	
              
                100
                  East Cook Ave. Ste 201

              

            	
               

            
	
               

            	
              City/State/Zip:
                

            	
              
                Libertyville,
                  IL 60048

              

            
	
               

            	
              Attention:
                

            	
              
                
                  Keith
                    Goodman

                

              

            	
               

            
	
               

            	
              Tel:
                

            	
              
                
                  (847)968-2655

                

              

            	
               

            
	
               

            	
              Fax:
                

            	
              
                
                  
                    (847)968-2648

                  

                

              

            	
               

            
	
                

            	
              Email:
                

            	
              
                
                  keith@nitecapital.com

                

              

            


    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    In
      Witness Whereof,
      the
      parties have executed this Registration Rights Agreement as of the date first
      written above.

     

    
      	
               

            	
              NAME
                OF INVESTING ENTITY 

            
	
                

            	
              Barrington
                Partners, a California Limited Partnership

            
	 	 	 	 
	 	
              By:
                

            	
              
                
                  
                    /s/
                      Russell Faucett

                  

                

              

            	
               

            
	
               

            	
              Name:
                

            	
              
                

              

              
                
                  Russell
                    Faucett 

                

              

            	
               

            
	
               

            	
              Title:
                

            	
              
                
                  
                    General
                      Partner

                  

                

              

            	
               

            
	 	 	 	 
	
                

            	
              ADDRESS
                FOR NOTICE 

            
	 	
              c/o:
                

            	
              
                
                  Barrington
                    Partners

                

              

            	
               

            
	
               

            	
              Street:
                

            	
              
                
                  2001
                    Wilshire Blvd., Ste 401

                

              

            	
               

            
	
               

            	
              City/State/Zip:
                

            	
              
                
                  Santa
                    Monica, CA 90403

                

              

            
	
               

            	
              Attention:
                

            	
              
                
                  
                    Glenn
                      Rosen

                  

                

              

            	
               

            
	
               

            	
              Tel:
                

            	
              
                
                  
                    (310)264-4844x5

                  

                

              

            	
               

            
	
               

            	
              Fax:
                

            	
              
                
                  
                    
                      (310)264-4847

                    

                  

                

              

            	
               

            
	
                

            	
              Email:
                

            	
              
                
                  
                    glenn@barrpart.com

                  

                

              

            


    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    In
      Witness Whereof,
      the
      parties have executed this Registration Rights Agreement as of the date first
      written above.

     

    
      	
               

            	
              NAME
                OF INVESTING ENTITY 

            
	
                

            	
              
                Barrington
                  Investors, L.P.

              

            
	 	 	 	 
	 	
              By:
                

            	
              
                
                  
                    /s/
                      Russell Faucett

                  

                

              

            	
               

            
	
               

            	
              Name:
                

            	
              
                

              

              
                
                  Russell
                    Faucett 

                

              

            	
               

            
	
               

            	
              Title:
                

            	
              
                
                  
                    General
                      Partner

                  

                

              

            	
               

            
	 	 	 	 
	
                

            	
              ADDRESS
                FOR NOTICE 

            
	 	
              c/o:
                

            	
              
                
                  Barrington
                    Partners

                

              

            	
               

            
	
               

            	
              Street:
                

            	
              
                
                  2001
                    Wilshire Blvd., Ste 401

                

              

            	
               

            
	
               

            	
              City/State/Zip:
                

            	
              
                
                  Santa
                    Monica, CA 90403

                

              

            
	
               

            	
              Attention:
                

            	
              
                
                  
                    Glenn
                      Rosen

                  

                

              

            	
               

            
	
               

            	
              Tel:
                

            	
              
                
                  
                    (310)264-4844x5

                  

                

              

            	
               

            
	
               

            	
              Fax:
                

            	
              
                
                  
                    
                      (310)264-4847

                    

                  

                

              

            	
               

            
	
                

            	
              Email:
                

            	
              
                
                  
                    glenn@barrpart.com

                  

                

              

            


    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Annex
      A

    


    PLAN
      OF DISTRIBUTION

    


    The
      Selling Stockholders and any of their pledgees, donees, transferees, assignees
      and successors-in-interest may, from time to time, sell any or all of their
      shares of Common Stock on any stock exchange, market or trading facility on
      which the shares are traded or in private transactions. These sales may be
      at
      fixed or negotiated prices. The Selling Stockholders may use any one or more
      of
      the following methods when selling shares:

    


    ·   ordinary
      brokerage transactions and
      transactions in which the broker-dealer solicits Investors;

    

      ·   block
        trades in which the broker-dealer will attempt to sell the shares as agent
        but
        may position and resell a portion of the block as principal to facilitate
        the
        transaction;

    

    


    ·   purchases
      by a broker-dealer as principal
      and resale by the broker-dealer for its account;

    


    ·   an
      exchange distribution in accordance
      with the rules of the applicable exchange;

    


    ·   privately
      negotiated
      transactions;

    


    ·   to
      cover short sales made after the date
      that this Registration Statement is declared effective by the
      Commission;

    


    ·   broker-dealers
      may agree with the Selling
      Stockholders to sell a specified number of such shares at a stipulated price
      per
      share;

    


    ·   a
      combination of any such methods of sale;
      and

    


    ·   any
      other method permitted pursuant to
      applicable law.

    


    The
      Selling Stockholders may also sell shares under Rule 144 under the Securities
      Act, if available, rather than under this prospectus.

    


    Broker-dealers
      engaged by the Selling Stockholders may arrange for other brokers-dealers to
      participate in sales. Broker-dealers may receive commissions or discounts from
      the Selling Stockholders (or, if any broker-dealer acts as agent for the
      purchaser of shares, from the purchaser) in amounts to be negotiated. The
      Selling Stockholders do not expect these commissions and discounts to exceed
      what is customary in the types of transactions involved.

    


    The
      Selling Stockholders may from time to time pledge or grant a security interest
      in some or all of the Shares owned by them and, if they default in the
      performance of their secured obligations, the pledgees or secured parties may
      offer and sell shares of Common Stock from time to time under this prospectus,
      or under an amendment to this prospectus under Rule 424(b)(3) or other
      applicable provision of the Securities Act of 1933 amending the list of selling
      stockholders to include the pledgee, transferee or other successors in interest
      as selling stockholders under this prospectus.

    


    Upon
      the
      Company being notified in writing by a Selling Stockholder that any material
      arrangement has been entered into with a broker-dealer for the sale of Common
      Stock through a block trade, special offering, exchange distribution or
      secondary distribution or a purchase by a broker or dealer, a supplement to
      this
      prospectus will be filed, if required, pursuant to Rule 424(b) under the
      Securities Act, disclosing (i) the name of each such Selling Stockholder and
      of
      the participating broker-dealer(s), (ii) the number of shares involved, (iii)
      the price at which such the shares of Common Stock were sold, (iv)the
      commissions paid or discounts or concessions allowed to such broker-dealer(s),
      where applicable, (v) that such broker-dealer(s) did not conduct any
      investigation to verify the information set out or incorporated by reference
      in
      this prospectus, and (vi) other facts material to the transaction. In addition,
      upon the Company being notified in writing by a Selling Stockholder that a
      donee
      or pledgee intends to sell more than 500 shares of Common Stock, a supplement
      to
      this prospectus will be filed if then required in accordance with applicable
      securities law.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    


    The
      Selling Stockholders also may transfer the shares of Common Stock in other
      circumstances, in which case the transferees, pledgees or other successors
      in
      interest will be the selling beneficial owners for purposes of this
      prospectus.

    


    The
      Selling Stockholders and any broker-dealers or agents that are involved in
      selling the shares may be deemed to be “underwriters” within the meaning of the
      Securities Act in connection with such sales. In such event, any commissions
      received by such broker-dealers or agents and any profit on the resale of the
      shares purchased by them may be deemed to be underwriting commissions or
      discounts under the Securities Act. Discounts, concessions, commissions and
      similar selling expenses, if any, that can be attributed to the sale of
      Securities will be paid by the Selling Stockholder and/or the purchasers. Each
      Selling Stockholder has represented and warranted to the Company that it
      acquired the securities subject to this registration statement in the ordinary
      course of such Selling Stockholder’s business and, at the time of its purchase
      of such securities such Selling Stockholder had no agreements or understandings,
      directly or indirectly, with any person to distribute any such
      securities.

    


    The
      Company has advised each Selling Stockholder that it may not use shares
      registered on this Registration Statement to cover short sales of Common Stock
      made prior to the date on which this Registration Statement shall have been
      declared effective by the Commission. In addition, the Company has advised
      each
      Selling Stockholder that the Commission currently takes the position that
      coverage of short sales “against the box” prior to the effective date of the
      registration statement of which this prospectus is a part would be a violation
      of Section 5 of the Securities Act, as described in Item 65, Section A, of
      the
      Manual of Publicly Available Telephone Interpretations, dated July 1997,
      compiled by the Office of Chief Counsel, Division of Corporate
      Finance.

    


    If
      a
      Selling Stockholder uses this prospectus for any sale of the Common Stock,
      it
      will be subject to the prospectus delivery requirements of the Securities Act.
      The Selling Stockholders will be responsible to comply with the applicable
      provisions of the Securities Act and Exchange Act, and the rules and regulations
      thereunder promulgated, including, without limitation, Regulation M, as
      applicable to such Selling Stockholders in connection with resales of their
      respective shares under this Registration Statement.

    


    The
      Company is required to pay all fees and expenses incident to the registration
      of
      the shares, but the Company will not receive any proceeds from the sale of
      the
      Common Stock. The Company has agreed to indemnify the Selling Stockholders
      against certain losses, claims, damages and liabilities, including liabilities
      under the Securities Act.


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    ANNEX
      B

    


    CHINA
      NATURAL GAS, INC.

    


    SELLING
      SECURITYHOLDER NOTICE AND QUESTIONNAIRE

    


    The
      undersigned beneficial owner of common stock (the “Common
      Stock”),
      of
      China Natural Gas, Inc. (the “Company”)
      understands that the Company has filed or intends to file with the Securities
      and Exchange Commission (the “Commission”)
      a
      Registration Statement for the registration and resale of the Registrable
      Securities, in accordance with the terms of the Registration Rights Agreement,
      dated as of July __, 2007 (the “Registration
      Rights Agreement”),
      among
      the Company and the Investors named therein. A copy of the Registration Rights
      Agreement is available from the Company upon request at the address set forth
      below. All capitalized terms used and not otherwise defined herein shall have
      the meanings ascribed thereto in the Registration Rights Agreement.

    


    The
      undersigned hereby provides the following information to the Company and
      represents and warrants that such information is accurate:

    


    QUESTIONNAIRE

    


    
      	
              1. 

            	
               

            	
              Name. 

            
	
                

            	
               

            	
                

            
	
               

            	
               

            	
              (a)
                

            	
               

            	
              Full
                Legal Name of Selling Securityholder 

            
	
               

            	
               

            	
               

            	
               

            	
               

            
	
               

            	
               

            	
               

            	
               

            	
               

            
	
               

            	
               

            	
              (b)
                

            	
               

            	
              Full
                Legal Name of Registered Holder (if not the same as (a) above) through
                which Registrable Securities Listed in Item 3 below are held:
                

            
	
               

            	
               

            	
               

            	
               

            	
               

            
	
               

            	
               

            	
               

            	
               

            	
               

            
	
               

            	
               

            	
              (c)
                

            	
               

            	
              Full
                Legal Name of Natural Control Person (which means a natural person
                who
                directly or indirectly alone or with others has power to vote or
                dispose
                of the securities covered by the questionnaire): 

            
	
               

            	
               

            	
               

            	
               

            	
               

            
	
               

            	
               

            	
               

            	
               

            	
               

            
	
              2. 

            	
               

            	
              Address
                for Notices to Selling Securityholder: 

            
	
                

            	
               

            	
               

            
	
               

            	
               

            	
               

            	
               

            	
               

            
	
               

            	
               

            	
              Telephone:
                

            	
               

            	
               

            	
               

            
	
               

            	
               

            	
              Facsimile:
                

            	
               

            	
               

            	
               

            
	
               

            	
               

            	
              Contact
                Person: 

            	
               

            	
               

            	
               

            
	
               

            	
               

            	
               

            	
               

            	
               

            	
               

            


    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    


    
      	
              3. 

            	
                

            	
              Beneficial
                Ownership of Registrable Securities: 

            
	
                

            	
                

            	
                

            
	
               

            	
               

            	
              Type
                and Principal Amount of Registrable Securities beneficially owned:
                

            
	
               

            	
               

            	
               

            
	
               

            	
               

            	
               

            
	
              4. 

            	
                

            	
              Broker-Dealer
                Status: 

            
	
                

            	
                

            	
                

            
	
               

            	
               

            	
              (a)
                

            	
               

            	
              Are
                you a broker-dealer? 

            
	
               

            	
               

            	
               

            	
               

            	
               

            
	
               

            	
               

            	
               

            	
               

            	
              Yes
                o  No
                o

            
	
               

            	
               

            	
               

            	
               

            	
               

            
	
                

            	
               

            	
              Note: 

            	
               

            	
              If
                yes, the Commission’s staff has indicated that you should be identified as
                an underwriter in the Registration Statement. 

            
	
                

            	
               

            	
                

            	
               

            	
               

            
	
               

            	
               

            	
              (b)
                

            	
               

            	
              Are
                you an affiliate of a broker-dealer? 

            
	
               

            	
               

            	
               

            	
               

            	
               

            
	
               

            	
               

            	
               

            	
               

            	
              Yes
                o  No
                o

            
	
               

            	
               

            	
               

            	
               

            	
               

            
	
               

            	
               

            	
              (c)
                

            	
               

            	
              If
                you are an affiliate of a broker-dealer, do you certify that you
                bought
                the Registrable Securities in the ordinary course of business, and
                at the
                time of the purchase of the Registrable Securities to be resold,
                you had
                no agreements or understandings, directly or indirectly, with any
                person
                to distribute the Registrable Securities? 

            
	
               

            	
               

            	
               

            	
               

            	
               

            
	
               

            	
               

            	
               

            	
               

            	
              Yes
                o  No
                o

            
	
               

            	
               

            	
               

            	
               

            	
               

            
	
                

            	
               

            	
              Note: 

            	
               

            	
              If
                no, the Commission’s staff has indicated that you should be identified as
                an underwriter in the Registration Statement. 

            
	
                

            	
               

            	
                

            	
               

            	
               

            
	
              5. 

            	
                

            	
              Beneficial
                Ownership of Other Securities of the Company Owned by the Selling
                Securityholder. 

            
	
                

            	
                

            	
                

            
	
                

            	
               

            	
              Except
                as set forth below in this Item 5, the undersigned is not the beneficial
                or registered owner of any securities of the Company other than the
                Registrable Securities listed above in Item 3. 

            
	
                

            	
               

            	
                

            
	
               

            	
               

            	
               

            	
               

            	
              Type
                and Amount of Other Securities beneficially owned by the Selling
                Securityholder: 

            
	
               

            	
               

            	
               

            	
               

            	
               

            
	
               

            	
               

            	
               

            	
               

            	
               

            
	
               

            	
               

            	
               

            	
               

            	
               

            
	
               6. 

            	
                

            	
               

              Relationships
                with the Company: 

            
	
                

            	
                

            	
                

            
	
                

            	
                

            	
              Except
                as set forth below, neither the undersigned nor any of its affiliates,
                officers, directors or principal equity holders (owners of 5% of
                more of
                the equity securities of the undersigned) has held any position or
                office
                or has had any other material relationship with the Company (or its
                predecessors or affiliates) during the past three years. 

            
	
                

            	
                

            	
                

            
	
               

            	
               

            	
              State
                any exceptions here: 

            
	
               

            	
               

            	
               

            
	
               

            	
               

            	
               

            


    

     

    The
      undersigned agrees to promptly notify the Company of any inaccuracies or changes
      in the information provided herein that may occur subsequent to the date hereof
      and prior to the Effective Date for the Registration Statement.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    


    By
      signing below, the undersigned consents to the disclosure of the information
      contained herein in its answers to Items 1 through 6 and the inclusion of such
      information in the Registration Statement and the related prospectus. The
      undersigned understands that such information will be relied upon by the Company
      in connection with the preparation or amendment of the Registration Statement
      and the related prospectus.

    


    IN
      WITNESS WHEREOF
      the
      undersigned, by authority duly given, has caused this Notice and Questionnaire
      to be executed and delivered either in person or by its duly authorized
      agent.

     

    
      	 	 	 
	
              Dated:
                

            	
              Beneficial
                Owner: 

            
	 
 	 
 	 
 
	 	By:  	
            
	 	
              

              Name:
                

            
	 	
              Title:
                

            



     

    PLEASE
      FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN
      THE ORIGINAL BY OVERNIGHT MAIL, TO:

    


    
      	 	
               

            	
              Crone
                Rozynko LLP 

            
	
               

            	
               

            	
              101
                Montgomery Street, Suite 1950 

            
	
               

            	
               

            	
              San
                Francisco, CA 94104 

            
	
               

            	
               

            	
              Facsimile
                No.: (415) 955-8910 

            
	
               

            	
               

            	
              Attention:
                Alisande M. Rozynko, Esq.