June
      30, 2008

    


    Mr.
      Liping Zhu

    Room
      702, Wang Hao Block, Tiyu Road, Taiyuan, Shanxi

    


    Dear
      Mr.
      Zhu:

    


    Puda
      Coal, Inc. (the “Company”)
      is
      pleased to offer you the position of President and Chief Executive Officer
      (“CEO”)
      of the
      Company on a full time basis. The Board of Directors and the management team
      of
      the Company are impressed with your credentials and we look forward to your
      future success in this position.

     

    The
      terms
      of your new position with the Company are as set forth below:

     

    1. Position.

     

    (a)
      You
      will become the President and CEO of the Company, working out of the Company’s
      headquarters office in Taiyuan City, Shanxi Province, China. You
      will
      report to the board of directors of the Company (the “Board”)
      and
      perform such services incident to your position as provided in the bylaws of
      the
      Company or as the Board may direct.

     

    (b)
      You
      agree to the best of your ability and experience that you will at all times
      loyally and conscientiously perform all of the duties and obligations required
      of and from you pursuant to the express and implicit terms hereof, and to the
      reasonable satisfaction of the Company. During the term of your employment,
      you
      further agree that you will devote all of your business time and attention
      to
      the business of the Company, the Company will be entitled to all of the benefits
      and profits arising from or incident to all such work, services and advice,
      you
      will not render commercial or professional services of any nature to any person
      or organization, whether or not for compensation, without the prior written
      consent of the Company, and you will not directly or indirectly engage or
      participate in any business that is competitive in any manner with the business
      of the Company. Nothing in this letter agreement will prevent you from accepting
      speaking or presentation engagements in exchange for honoraria or from serving
      on boards of charitable organizations, or from owning no more than one percent
      (1%) of the outstanding equity securities of a corporation whose stock is listed
      on a national stock exchange.

     

    2. Start
      Date.
      Subject
      to fulfillment of any conditions imposed by this letter agreement, you commence
      this new position with the Company on June 25, 2008 (the “Start
      Date”).
      

     

    3. Compensation.
      You
      will
      be paid a monthly salary of $6,428.60, which is equivalent to $77,143 on an
      annualized basis (the “Base
      Salary”).
      Your
      salary will be payable monthly
      pursuant
      to the Company’s regular payroll policy. In addition, you will be entitled to an
      annual bonus of $22,857, payable as soon as practicable after the completion
      of
      the Company’s fiscal year, December 31; provided that during the first year of
      your employment, you will receive the amount of bonus that is proportionate
      to
      the time you have served at the Company. You will only receive the annual bonus
      if you are still employed by the Company on the last day of the Company’s fiscal
      year. The Base Salary and annual bonus will be reviewed annually by the Board
      and the compensation committee of the Board as part of the Company’s executive
      compensation review process. You have also been elected by the Board to be
      a
      member of the Board; however, you will not receive any additional compensation
      for your services on the Board. 


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        Mr.
          Liping Zhu

        June
          30,
          2008

        Page
          2

      

    

     

    4. Benefits.
      

     

    (a) Insurance
      Benefits.
      The
      Company will provide you with the opportunity to participate in the standard
      benefits plans currently available to other Company employees, subject to any
      eligibility requirements imposed by such plans. 

     

    (b) Vacation;
      Sick Leave.
      You
      will
      be entitled to paid time off according to the Company’s standard
      policies.

     

    (c) Expenses
      Reimbursement.
      The
      Company agrees to reimburse you for all reasonable, ordinary and necessary
      expenses properly incurred by you in connection with the performance of your
      duties hereunder, provided that proper vouchers are submitted to the Company
      by
      you evidencing such expenses and the purposes for which the same were incurred.
      

     

    5. Confidentiality
      and Insider Trading.
      You
      hereby acknowledge that your services to be rendered under this letter agreement
      are of a special, unique and extraordinary character and, in connection with
      such services, you will have obtained trade secrets and other non-public
      information concerning the Company, any affiliate of the Company and their
      affairs, including but not limited to the business methods, information systems,
      financial data and strategic plans which are unique assets of the Company or
      any
      affiliate of the Company, as the case may be (“Confidential
      Information”),
      the
      use or disclosure of which would cause irreparable harm to the Company. You
      covenant not to, either directly or indirectly, in any manner, utilize or
      disclose to any person, firm, corporation, association or other entity any
      Confidential Information or engage in any illegal insider trading activities
      during your term and thereafter. You further acknowledge that money damages
      are
      not sufficient remedy for your breach of this letter agreement, and that the
      Company shall be entitled, in addition to any and all other remedies available
      to the Company, to the entry of preliminary injunction as a remedy for such
      breach or contemplated breach without the need to post a bond and without proof
      of actual damages. 

    


    6. Non-Compete;
      Non-Solicitation.
      You
      agree that during your term and for a period of one year commencing on the
      termination of your employment hereunder, you will not without the prior written
      consent of the Company (a) solicit or induce any employee, agent or independent
      contractor of the Company or any affiliate of the Company to terminate his
      relationship with the Company or the Company’s affiliate, or (b) participate in,
      render services to, or become employed by, any business enterprise which is
      engaged in business activities competitive with the business of the Company
      or
      any affiliate of the Company as then conducted or may be determined by the
      Company as potentially competitive with the ongoing business of the Company
      or
      any Affiliate of the Company. 


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        Mr.
          Liping Zhu

        June
          30,
          2008

        Page
          3

      

    

    


    7. At-Will
      Employment.
      Your
      employment with the Company will be on an “at will” basis, meaning that either
      you or the Company may terminate your employment at any time upon 30 days
      written notice for any reason or no reason, without further obligation or
      liability; provided that if your employment with the Company is terminated
      by
      the Company without “cause,” the Company will pay you a severance payment equal
      to three months Base Salary in effect during the year you are terminated. For
      the purposes of this letter, “cause” shall mean: (i) your repeated failure to
      perform one or more of your essential duties and responsibilities to the
      Company, as determined by the Board in its sole discretion, after 10 day written
      notice to you and a chance to cure; (ii) your failure to follow the lawful
      directives of the Board; (iii) your material violation of any Company policy,
      including any provision of Code of Conduct or Code of Ethics of the Company
      then
      in effect, if any; (iv) your commission of any act of fraud, embezzlement,
      dishonesty or any other willful misconduct that in the reasonable judgment
      of
      the Board has caused or is reasonably expected to result in material injury
      to
      the Company; (v) your unauthorized use or disclosure of any Confidential
      Information of the Company or any other party to whom you owe an obligation
      of
      nondisclosure as a result of your relationship with the Company; (vi) your
      conviction of a felony or misdemeanor (other than a traffic offense); (vii)
      your
      willful breach of any of your obligations under any written agreement with
      the
      Company; (viii) your violation of any duties and responsibilities of a principal
      executive officer under the applicable laws, including but not limited to your
      fiduciary duty to the Company under the laws of the State of Florida and your
      responsibilities under the United States federal securities laws.

     

    8. No
      Conflicting Obligations.
      You
      understand and agree that by accepting this offer of employment, you represent
      to the Company that your performance will not breach any other agreement to
      which you are a party and that you have not, and will not during the term of
      your employment with the Company, enter into any oral or written agreement
      in
      conflict with any of the provisions of this letter agreement or the Company’s
      policies. You are not to bring with you to the Company, or use or disclose
      to
      any person associated with the Company, any confidential or proprietary
      information belonging to any former employer or other person or entity with
      respect to which you owe an obligation of confidentiality under any agreement
      or
      otherwise. The Company does not need and will not use such information and
      we
      will assist you in any way possible to preserve and protect the confidentiality
      of proprietary information belonging to third parties. Also, we expect you
      to
      abide by any obligations to refrain from soliciting any person employed by
      or
      otherwise associated with any former employer and suggest that you refrain
      from
      having any contact with such persons until such time as any non-solicitation
      obligation expires.

     

    9. True
      Disclosure.
      You
      have represented to the Company that (a) your prior work experience is as
      disclosed to the Company in writing and (b) you are not a party to or otherwise
      bound by any order, decree or judgment. 

     

    10. Indemnification.
      The
      Company shall indemnify and defend you and hold you harmless, to the full extent
      allowed by the law of the State of Florida, and as provided by, or granted
      pursuant to, any charter provision of the Company, both as to action in your
      official capacity and as to action in another capacity while holding such
      office, except for matters arising out of your gross negligence or willful
      misconduct. 


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        Mr.
          Liping Zhu

        June
          30,
          2008

        Page
          4

      

    

     

    11. Entire
      Agreement.
      This
      letter agreement sets forth the entire agreement and understanding between
      you
      and the Company (including any affiliate of the Company) relating to your
      employment and supersedes all prior agreements and discussions between us.
      

     

    12. Amendment.
      This
      letter may not be modified or amended except by a written agreement, signed
      by
      an officer of the Company, although the Company reserves the right to modify
      unilaterally your compensation, benefits, job title and duties, reporting
      relationships and other terms of your employment. 

     

    13. Governing
      Law and Dispute Resolution.
      This
      letter agreement shall be interpreted in accordance with, and the rights of
      the
      parties hereto shall be determined by, the laws of People’s Republic of China
      without reference to its conflicts of laws principles. Any dispute arising
      from
      or in connection with this contract shall be submitted to China International
      Economic and Trade Arbitration Commission (“CIETAC”)
      in
      Beijing for arbitration, which shall be conducted in accordance with CIETAC’s
      arbitration rules in effect at the time of applying for arbitration. The
      arbitral award is final and binding upon both parties. The parties agree that:
      (a) The venue of arbitration is Beijing. The hearing of arbitration may be
      conducted in Beijing or, to the extent permitted by CIETAC’s arbitration rules,
      any other place as agreed on by the parties as the most convenient place; (b)
      The language to be used during the arbitration proceedings should be Chinese;
      and (c) A one-arbitrator tribunal will be appointed jointly by both parties
      and
      the arbitration should follow the ordinary proceeding. In case the parties
      fail
      to jointly appoint the arbitrator, the arbitrator should be appointed by the
      chairman of CIETAC upon the joint authorization of the parties. The parties
      may
      select the arbitrator from the panel of arbitrators provided by CIETAC, and
      to
      the extent permitted by CIETAC’s arbitration rules, from outside of the panel.



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        Mr.
          Liping Zhu

        June
          30,
          2008

        Page
          5

      

    

    


    We
      are
      all delighted to be able to extend you this offer and look forward to working
      with you. To indicate your acceptance of the Company’s offer, please sign and
      date this letter agreement in the space provided below and return it to me.
      

     

    
      	
              Very
                truly yours,

            	
              ACCEPTED
                AND AGREED:

            
	 	 
	
              PUDA
                COAL, INC.

            	
              LIPING
                ZHU

            
	
              /s/
                Ming Zhao

            	 
	
              By:
                Ming Zhao

            	 
	
              Title:
                Chairman of the Board of Directors

            	
              /s/
                Liping Zhu

            
	 	
              Signature