Employment
Agreement

      

        
          

        

      

    

     

    AMENDED AND
RESTATED

     

    EMPLOYMENT   AGREEMENT

     

    


     

    This
AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is
voluntarily entered into on December 29, 2008 by and between Perfectenergy
International Limited, a Nevada corporation (the “Corporation”), and
Mr. Zhuang Xiao Lin (Edward Zhuang), an individual residing at Room 1001, No. 5, Lane 1028,
Changshou Road, Shanghai (the “Executive”), under
the terms and conditions outlined below and replaces in its entirety the
Employment Agreement dated February 1, 2008  previously executed by
the parties.

    


    RECITALS:

     

    WHEREAS,
the Corporation desires to employ the Executive in the capacity hereinafter
stated, and the Executive desires to enter into the employ of the Corporation in
such capacity for the period and on the terms and conditions set forth
herein;

     

    NOW,
THEREFORE, in consideration of the mutual covenants and agreements set forth
below, it is hereby covenanted and agreed by the Corporation and the Executive
as follows:

     

    
      	
              1.

            	
              Capitalized
      Terms.  All capitalized terms used herein have the
      meaning as set forth in this
Agreement.

            


    

     

    
      	
              2.

            	
              Employment
      Period.  The Corporation hereby agrees to employ the
      Executive in its Shanghai Office as the Chief Financial Officer
      (“CFO”).  The Executive, in such capacities, agrees to provide
      services to the Corporation for the period begin­ning on Feb 1, 2008
      (“the Commencement
      Date”).  The Employment Period under this Agreement shall
      be 3 year commencing from the Commencement Date.  The Employment
      Period may be renewed by the mutual agreement of the Executive and the
      Corporation one (1) month before this Agreement expires, subject to the
      Corporation’s business needs and the Executive’s performance and
      competencies (as determined by the
Corporation).

            


    

     

    
      	
              3.

            	
              Performance of Duties
      and Work Location.  The Executive agrees that during the
      employment period, while he is employed by the Corporation, he shall
      devote his full time, energies and talents exclusively to serving in the
      capacities of CFO in the best interests of the Corporation, and to perform
      the duties assigned to him faithfully, efficiently and in a professional
      manner (see Appendix I for detail).  The Executive will be based
      in Shanghai.  The Executive agrees not
  to:

            


    

     

    
      	
            	
              (a)

            	
              serve
      as or be a consultant to or employee, officer, agent or director of any
      corporation, partnership or other entity other than the Corporation (other
      than civic, charitable, or other public service organizations);
      or

            


    

     

    
      	
            	
              (b)

            	
              have
      more than a five percent (5%) ownership interest in any enterprise if such
      ownership interest would have a material adverse effect upon the ability
      of the Executive to perform his duties hereunder; provided, however, the
      Executive shall (i) disclose to the Board of Directors of the Corporation
      (the “Board”) any 5% ownership interest in any enterprise, (ii) disclose
      any financial relationship or ownership (regardless of such percentage),
      with any supplier, customer or partner of the Corporation or any of its
      affiliates, and (iii) not cause a conflict of interest between the
      Corporation or any of its affiliates on the one hand and any supplier,
      customer or partner of the Corporation or any of its affiliates on the
      other hand.

            


    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      
         

        Employment
Agreement

        

          
            

          

           

        

      

    

    
      	
              4.

            	
              Compensation.  Subject
      to the terms and conditions of this Agreement, during the employment
      period, while he is employed by the Corporation, the Executive shall be
      compensated by the Corporation for his services as
  follows:

            


    

     

    
      	
            	
              (a)

            	
              Beginning
      on the Commencement Date, the Executive’s base salary (“Base Salary”)
      shall be RMB 50,000 per month, payable at the end of each month, and
      subject to normal tax and other statutory withholdings in
      China.  During the employment period, the Executive’s Base
      Salary rate shall be reviewed on or before each anniversary of the
      Commencement Date to determine whether an increase in the Executive’s rate
      of compensation is appropriate;

            


    

     

    
      	
            	
              (b)

            	
              An
      additional month’s salary payable at every Chinese New Year (for 2008,
      such 13th
      month salary shall be multiplied by a percentage equal to the number of
      months employed before Chinese New Year divided by 12 months), subject to
      normal tax and other statutory withholdings in
  China;

            


    

     

    
      	
            	
              (c)

            	
              The
      Executive shall be entitled to participate in the Corporation’s 2007 Stock
      Option Plan, the ultimate holding company of the Corporation pursuant to
      the terms and conditions set forth therein and the discretion of the Board
      of Directors.  The Executive shall be granted a total of 500,000
      stock options of PFEN’s common stock.  The strike price for such
      stock options shall be priced at US$1.02.  Such share options
      shall vest as follows: One third (1/3) at each year ending in 3 years
      after the Commencement Date.  Such options shall also be subject
      to such other requirements set forth in a Stock Option Agreement to be
      entered into by and between the Corporation and the
    Executive;

            


    

     

    
      	
            	
              (d)

            	
              In
      addition to public holidays in China, the Executive shall be entitled to
      receive 20 days of paid vacation per year beginning after the completion
      of the Probation Period;

            


    

     

    
      	
            	
              (e)

            	
              The
      Corporation shall be responsible for the Executive’s social insurance
      benefits including health and medical insurance and pension and mandatory
      housing fund in accordance with Chinese employment laws. The Executive
      shall enter into a supplementary agreement with China Star Corp that shall
      provide such benefits and other services for the
  Executive.

            


    

    


    
      	
               
      

            	
              (f)

            	
              The
      Executive shall be reimbursed by the Corporation for all reasonable
      business, promotional, cell phone service, travel and entertainment
      expenses incurred or paid by the Executive during the Employment Period in
      the performance of his services under this Agreement: (i) provided that
      such expenses constitute business deductions from taxable income for the
      Corporation and are excludable from taxable income to the Executive under
      the governing laws and regulations; and (ii) to the extent that such
      expenses do not exceed the amounts allocable for such expenses in budgets
      that are approved from time to time by the Corporation and are not in
      violation of the Corporation’s travel and living expense reimbursement
      policies.  In order that the Corporation reimburse the Executive
      for such allowable expenses, the Executive shall furnish to the
      Corporation, in a timely fashion, the appropriate documentation in
      connection with such expenses and shall furnish such other documentation
      and accounting as the Corporation may from time to time reasonably
      request;

            
	 	 	 
	 	      
              (g)

            	      
              Any
      overtime working activities are already compensated within the
      compensation package provided to the Executive under this
      Agreement.

            


    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      
         

        Employment
Agreement

        

          
            

          

           

        

      

    

    
      	
              5.

            	
              Restrictive
      Covenants.  The Executive acknowledges and agrees that:
      (i) the Executive has a major responsibility for the operation,
      development and growth of the Corporation’s business; (ii) the Executive’s
      work for the Corporation has brought him and will continue to bring him
      into close contact with confidential information of the Corporation, its
      affiliates and its customers; and (iii) the agreements and covenants
      contained in this paragraph 5 are essential to protect the business
      interests of the Corporation and its affiliates and that the Corporation
      will not enter into this Agreement but for such agreements and
      covenants.  Accordingly, the Executive covenants and agrees to
      the following:

            


    

     

    
      	
            	
              (a)

            	
              Confidential
      Information.  Except as may be required by the lawful
      order of a court or agency of competent jurisdiction, the Executive agrees
      to keep secret and confidential, both during the Employment Period and for
      two (2) years after the Executive’s employment with the Corporation
      terminates, all non-public information concerning the Corporation and its
      affili­ates that was acquired by, or disclosed to, the Executive
      during the course of his employment by the Corporation or any of its
      subsidiaries or affiliates, including information relating to customers
      (including, without limitation, credit history, repayment history,
      financial inform­a­tion and financial statements), costs, and
      operations, financial data and plans, whether past, current or planned and
      not to dis­close the same, either directly or indirectly, to any other
      person, firm or business entity, or to use it in any way; provided, how­ever,
      that the provisions of this paragraph 5(a) shall not apply to information
      that: (a) was, is now, or becomes generally available to the public (but
      not as a result of a breach of any duty of confidentiality by which the
      Executive is bound); (b) was disclosed to the Executive by a third party
      not subject to any duty of confidentiality to the Corporation prior to its
      disclosure to the Executive; or (c) is disclosed by the Executive in the
      ordinary course of the Corporation’s business as a proper part of his
      employment in connection with communications with customers, vendors and
      other proper parties, provided that it is for a proper purpose solely for
      the benefit of the Corporation.  The Executive further agrees
      that he shall not make any statement or disclosure that (i) would be
      prohibited by applicable State or local laws and regulations, or (ii) is
      intended or reasonably likely to be detrimental to the Corporation or any
      of its affiliates.

            


    

     

    
      	
            	
              (b)

            	
              Non-Competition.  The
      Executive agrees that for the period commencing on the Commencement Date
      and ending twenty four (24) months after this Agreement expires, the
      Executive is terminated for any reason or voluntarily resigns (the “Non-Competition
      Period”), the Executive, unless the Corporation and all of its
      affiliates cease business in China, shall not directly or indirectly,
      alone or as a partner, officer, director, employee, consultant, agent,
      independent contractor, member or stockholder of any person or entity
      (“Person”), engage in any business activity in which is directly or
      indirectly in competition with the Business of the Corporation or its
      affiliates, or which is directly or indirectly detrimental to the Business
      or business plans of the Corporation or its affiliates.  The
      “Business” of
      the Corporation shall mean the actual or intended business of the
      Corporation during the Employment Period and as of the date the Executive
      leaves the employment of the Corporation.  As of the date
      hereof, the Business of the Corporation is to provide coal gasification
      technology, coal gasification plant development, operations and
      maintenance based on coal gasification technology.  The
      Executive further agrees that during the Non-Competition Period, he shall
      not in any capacity, either separately or in association with others: (i)
      employ or solicit for employment or endeavor in any way to entice away
      from employment with the Corporation or its affiliates any employee of the
      Corporation or its affiliates; (ii) solicit, induce or influence any
      supplier, customer, agent, consultant or other person or entity that has a
      business relationship with the Corporation or its affiliates to
      discontinue, reduce or modify such relationship with the Corporation or
      its affiliates; nor (iii) solicit any of the Corporation’s or its
      affiliate’s identified potential acquisition
  candidates.

            


    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      
         

        Employment
Agreement

        

          
            

          

           

        

      

    

    
      	
            	
              (c)

            	
              Remedies.  If
      the Executive breaches, or threatens to commit a breach of any of the
      provisions contained in paragraphs 5(a) or 5(b) (the “Restrictive
      Covenants”), the Corporation shall have the following rights and
      remedies, each of which shall be enforceable, and each of which is in
      addition to, and not in lieu of, any other rights and remedies available
      to the Corporation at law or in
equity:

            


    

     

    
      
        	
              	
                (i)

              	
                The
      Executive shall account for and pay over to the Corporation all
      compensation, profits, and other benefits which inure to the Executive’s
      benefit which are derived or received by the Executive or any person or
      business entity controlled by the Executive, or his relatives, resulting
      from any action or transactions constituting a breach of any of the
      Restrictive Covenants.

              


      

    

     

    
      
        	
              	
                (ii)

              	
                Notwithstanding
      the provisions of paragraph 5(c)(i) above, the Executive acknowledges and
      agrees that in the event of a violation or threatened violation of any of
      the Restrictive Covenants, the Corporation shall be entitled to enforce
      each such provision by any available mandatory relief obtained in any
      court of competent jurisdiction without prejudice to any other rights and
      remedies that may be available at law or in equity, and the Corporation
      shall also be entitled to recover its attorneys’ fees and costs incurred
      to enforce any of the Restrictive Covenants from the Executive if the
      Corporation prevails in such enforcement
action.

              


      

    

     

    
      	
            	
              (d)

            	
              Severability.  If
      any of the Restrictive Covenants, or any part thereof, are held to be
      invalid or unenforceable, the same shall not affect the remainder of the
      covenant or covenants, which shall be given full effect, without regard to
      the invalid or unenforceable portions.  Without limiting the
      generality of the foregoing, if any of the Restrictive Covenants, or any
      part thereof, are held to be unenforceable because of the duration of such
      provision or the area covered thereby, the parties hereto agree that the
      court making such determination shall have the power to reduce the
      duration and/or area of such provision and, in its reduced form, such
      provision shall then be
enforceable.

            


    

     

    
      	
            	
              (e)

            	
              Proprietary
      Rights.  The Executive acknowledges and agrees that all
      know-how, documents, reports, plans, proposals, marketing and sales plans,
      client lists, client files, and any materials made by the Executive or by
      the Corporation or its affiliates are the property of the Corporation and
      shall not be used by the Executive in any way adverse to the Corporation’s
      interests.  The Executive shall not deliver, reproduce or in any
      way allow such documents or things to be delivered or used by any third
      party without specific direction or consent of the Board.  The
      Executive hereby assigns to the Corporation any rights which he may have
      in any such trade secret or proprietary
  information.

            


    

     

    
      	
              6.

            	
              Termination and
      Compensation Due Upon Termination.  The Executive’s right
      to compensation for periods after the date the Executive’s employment with
      the Corporation terminates shall be determined in accordance with the
      following:

            


    

     

    
      	
            	
              (a)

            	
              Voluntary
      Resignation.  The Executive may terminate his employment
      with the Corporation for any reason (or no reason at all) at any time by
      giving the Corporation thirty (30)1 days prior written notice of
      voluntary resignation; provided, however, the Corporation may decide that
      the Executive’s voluntary resignation be effective immediately upon notice
      of such resignation.  The Corporation shall have no
      oblig­a­tion to make payments to the Executive in accordance with
      the provisions of paragraph 4 for periods after the date on which the
      Executive’s employment with the Cor­poration terminates due to the
      Executive’s voluntary
resig­na­tion.

            


    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      
        Employment
Agreement

        

          
            

          

           

        

      

    

    
      	
            	
              (b)

            	
              Termination with Prior
      Notice.  The Corporation may terminate the Executive with
      30 days’ prior notice (or payment in lieu of notice) based on one of the
      following grounds:

            


    

     

    
      	
               
      

            	
              (i)

            	
              the
      Executive is suffering non-work related illness and is unable to perform
      his duties after the medical treatment
period;

            


    

     

    
      	
               
      

            	
              (ii)

            	
              the
      Executive is not able or not competent, as determined by the Corporation,
      to perform his duties even after training (including on-the-job
      training);

            


    

     

    
      	
               
      

            	
              (iii)

            	
              there
      is a major change of circumstances which were relied on as the basis to
      enter into this Agreement, including merger, division or acquisition of
      the Corporation; or

            


    

     

    
      	
               
      

            	
              (iv)

            	
              the
      Corporation is undergoing a statutory reorganization or sustaining major
      financial difficulties.

            


    

    


    Upon
termination based on any of the above grounds, the Corporation shall pay the
Executive compensation at the rate of one month of the current Base Salary for
each year of services with the Corporation.

    


    
      	
            	
              (c)

            	
              Termination for
      Cause.  The Executive may only be terminated for cause,
      without prior notice, by the agreement of the President &
      CEO.  The Corporation shall have no oblig­ation to make
      payments to the Executive in accordance with the provisions of paragraph 4
      or otherwise for periods after the Executive’s employment with the
      Corporation is terminated on account of the Executive’s discharge for
      cause.  For pur­poses of this Agreement, the Executive shall
      be considered terminated for “cause” if he is
      discharged by the Corporation on account of the occurrence of one or more
      of the following events:

            


    

     

    
      	
               
      

            	
              (i)

            	
              the
      Executive becomes habitually addicted to drugs or
  alcohol;

            


    

     

    
      	
               
      

            	
              (ii)

            	
              the
      Executive discloses confidential information in violation of paragraph
      5(a) and such disclosure has a material adverse effect on the Corporation,
      or engages in competition in violation of paragraph
  5(b);

            


    

     

    
      	
               
      

            	
              (iii)

            	
              the
      Corporation is directed by regulatory or govern­mental authorities to
      terminate the employment of the Executive or the Executive engages in
      acti­vities that cause actions to be taken by regula­tory or
      governmental authorities that have a material adverse effect on the
      Corporation;

            


    

     

    
      	
               
      

            	
              (iv)

            	
              the
      Executive is indicted of a felony crime (other than a felony resulting
      from a minor traffic
viola­tion);

            


    

     

    
      	
               
      

            	
              (v)

            	
              the
      Executive commits an act of fraud against the Corporation, violates a duty
      of loyalty to the Corporation, or acts against the interest of the
      Corporation, or

            


    

     

    
      	
               
      

            	
              (vi)

            	
              any
      other causes as prescribed under the governing laws and
      regulations.

            


    

     

    
      	
            	
              (d)

            	
              Disability.  Disability
      of the Executive shall be dealt with in accordance with the Corporation’s
      long term disability plan (if any) and the applicable
  law.

            


    

     

    
      
        	
              	
                (e)

              	
                Death.  The
      Corporation shall have no obligation to make pay­ments to the
      Executive in accordance with the pro­visions of paragraph 4 for
      periods after the date of the Execu­tive’s death, except payments due
      and owing as of such date.

              


      

    

     

    
      
        	
              	
                (f)

              	
                Stock
      Options.  In the event of termination of this Agreement
      (regardless of reason), and notwithstanding anything contained herein, the
      Executive must exercise all vested stock options issued to the Executive
      pursuant to this Agreement within six (6) months after the effective
      termination date of the
Agreement.

              


      

    

     

    
      	
            	
              (g)

            	
              Probation
      Period.  The Executive shall be subject to a three (3)
      month probation/trial period (the “Probation Period”), beginning on the
      Commencement Date, during which time the Executive may be terminated
      immediately by the Corporation, the Corporation shall have no
      oblig­a­tion to make payments to the Executive in accordance with
      the provisions of paragraph 4 for periods after the date on which the
      Executive’s employment with the Cor­poration terminates due to such
      termination.

            


    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      
        Employment
Agreement

        

          
            

          

        

      

    

     

    
      	
              7.

            	
              Successors and
      Assignment.  This Agreement shall be binding on, and
      inure to the benefit of the Corporation and its successors and assigns and
      any person acquiring, whether by merger, consolidation, pur­chase of
      all or substantially all of the Corporation’s assets and business, or
      otherwise without further action by the Executive; provided however, that
      Executive hereby agrees to execute an acknowledgement of assignment if
      requested to do so by the successor, assign or acquiring
      person.  The Corporation may assign this agreement to any of its
      direct and indirect subsidiaries or its
  affiliates.

            


    

     

    
      	
              8.

            	
              Waiver of
      Breach.  The waiver by either the Corporation or the
      Executive of a breach of any provision of this Agreement shall not operate
      as, or be deemed a waiver of, any subsequent breach by either the
      Corporation or the Executive.

            


    

     

    
      	
              9.

            	
              Notice.  Any
      notice to be given hereunder by a party hereto shall be in writing and
      shall be deemed to have been given when received or, when deposited in the
      mail, certified or registered mail, postage
  prepaid:

            


    

     

    
      	
            	
              (a)

            	
              to
      the Executive addressed as follows:

            


    

     

    Mr.
Zhuang Xiao Lin, Edward

    Adress:Room
1001, No. 5, Lane 1028 Changshou Road, Shanghai

    Cell :
13611939698

    


    
      	
            	
              (b)

            	
              to
      the Corporation addressed as
follows:

            


    

     

    No. 479
You Dong Road, XinZhuang

    Shanghai
201100 China

    Tel:
+86-21-54880958

    Fax:
+86-21-54888243

    


    
      	
              10.

            	
              Amendment.  This
      Agreement may be amended or canceled by mutual agreement of the parties in
      writing without the consent of any other person and no person, other than
      the parties hereto (and the Executive’s estate upon his death), shall have
      any rights under or interest in this Agreement or the subject matter
      hereof.  The parties hereby agree that no oral conversations
      shall be deemed to be a modification of this Agreement and neither party
      shall assert the same.

            


    

     

    
      	
              11.

            	
              Applicable
      Law.  The provisions of this Agreement shall be construed
      in accordance with the laws of the People’s Republic of
    China.

            


    

     

    
      	
              12.

            	
              Dispute
      Resolution.  Any dispute arising
      from or in connection with this Agreement which cannot be resolved through
      amicable consultations shall be submitted to the relevant local
      arbitration commission for resolution. If any party is not satisfied with
      the arbitration award, that party may file an action with a Chinese
      court.  However, for any disputes arising from or in connection
      with the restrictive covenants as set out under Clause 5 of this
      Agreement, such disputes shall be dealt with in accordance with Clause 5
      (c) (ii).

            


    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      
        Employment
Agreement

        

          
            

          

           

        

      

    

    
      	
              13.

            	
              Termination.  All of the
      provisions of this Agreement shall terminate after the expiration of the
      Employment Period.

            


    

     

    
      	
              14.

            	
              Miscellaneous:
      This Agreement is made in two (2) copies duly initiated on each page by
      the Parties and has been signed by the Executive and signed and sealed by
      the Corporation on the date first set forth
  above.

            


    

     

    


     

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      Employment
Agreement

      

        
          

        

         

      

    

    IN
WITNESS WHEREOF, the Executive and the Corporation have executed this Employment
Agreement as of the day and year first above written.

     

    
      	 	Zhuang Xiao
      Lin, Edward
	 	 
	 	 
	 	 
	 	/s/ Zhuang Xiao
      Lin
	 	 
	 	 
	 	 
	 	Perfect
      Energy International Limited
	 	 
	 	 
	 	 
	 	/s/ Wennan
    Li
	 	      
              By:
      Wennan Li (CEO)