ex10_2.htm


    
      

    


    Exhibit
10.2

    


    NEITHER
THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SHARES ISSUABLE UPON
EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE ASECURITIES
ACT@)
OR THE SECURITIES LAWS OF ANY STATE.  NEITHER THE SECURITIES
REPRESENTED HEREBY MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED NOR
MAY THE SHARES BE ISSUED UPON EXERCISE UNLESS SUCH SECURITIES AND SHARES ARE
REGISTERED UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR THE
COMPANY RECEIVES AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH SALE,
TRANSFER, PLEDGE OR ISSUANCE IS EXEMPT FROM REGISTRATION.

    


    SINO
CLEAN ENERGY, INC.

    


    Non-statutory
Stock Option Agreement

    


    1.            
Grant of
Option. This Non-statutory Stock Option Agreement (the “Agreement”)
evidences the grant by Sino Clean Energy, Inc., a Nevada corporation (the “Company”),
on December 15, 2008 (the “Grant
Date”) to Hon Wan Chan, also known as Helice Chan, an officer of the
Company (the “Optionee”),
of an option (the “Option”)
to purchase, in whole or in part, on the terms provided herein, a total of
100,000 shares (the “Shares”)
of common stock, $0.001 par value per share, of
the Company (“Common
Stock”) at an exercise price equal to the last reported sale price per
Share in the over-the-counter market on the Grant Date, as reported by the
Financial Industry Regulatory Authority’s OTC Bulletin Board, the National
Quotation Bureau Incorporated or any similar organization or agency reporting
prices in the over-the-counter market per Share.  Unless earlier
terminated, this Option shall expire at 5:00 p.m., Eastern time, on December 14,
2010 (the “Final Exercise
Date”).

     

            It
is intended that the Option evidenced by this Agreement shall not be an
incentive stock option as defined in Section 422 of the Internal Revenue Code of
1986, as amended, and any regulations promulgated thereunder (the “Code”).  Except
as otherwise indicated by the context, the term “Optionee”,
as used in this Option, shall be deemed to include any person who acquires the
right to exercise this Option validly under its terms.

    


    2.           
 Vesting
Schedule. The Option shall vest and the Shares shall be subject to
exercise commencing on the Grant Date.  The right of exercise shall be
cumulative so that to the extent the Option is not exercised in any period to
the maximum extent permissible it shall continue to be exercisable, in whole or
in part, with respect to all Shares for which it is vested until the earlier of
the Final Exercise Date or the termination of this Option under Section 3
hereof.

    


    3.           
 Exercise
of Option.

    


    a.           Form of
Exercise. Each election to exercise this Option shall be in writing in
the form of the Notice of Exercise attached hereto as Appendix A, signed by
the Optionee, and received by the Company at its principal office, accompanied
by this Agreement, and payment in full by a check or money order made payable to
the Company in the amount of the exercise price and any withholding tax, as
provided under Section 5 hereof.  The Optionee may purchase less than
the number of shares covered hereby, provided that no partial exercise of this
Option may be for any fractional share.

    


    b.           Continuous
Relationship with the Company Required. Except as otherwise provided in
this Section 3, this Option may not be exercised unless the Optionee, at
the time he or she exercises this Option, is, and has been at all times since
the Grant Date, an employee, officer or director of, or consultant or advisor
to, the Company or any parent or subsidiary of the Company.

    


    c.           Termination
of Relationship with the Company.  If the Optionee ceases to
have continuous relationship with the Company as described in paragraph (b)
above for any reason, then, except as provided in paragraphs (d) and (e)
below, the right to exercise this Option shall terminate three (3) months after
such cessation (but in no event after the Final Exercise Date), provided that this Option
shall be exercisable only to the extent that the Optionee was entitled to
exercise this Option on the date of such cessation.  Notwithstanding
the foregoing, if the Optionee, prior to the Final Exercise Date, violates the
non-competition or confidentiality provisions of any employment contract,
confidentiality and nondisclosure agreement or other agreement between the
Optionee and the Company, the right to exercise this Option shall terminate
immediately upon written notice to the Optionee from the Company describing such
violation.


    
      
         


      

      
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    d.           Exercise
Period Upon Death or Disability.  If the Optionee dies or
becomes disabled (within the meaning of Section 22(e)(3) of the Code) prior
to the Final Exercise Date while he or she has a continuous relationship with
the Company as described in paragraph (b) above and the Company has not
terminated such relationship for Cause as specified in paragraph (e) below, this
Option shall be exercisable, within the period of twelve (12) months following
the date of death or disability of the Optionee, by the Optionee (or in the case
of death by an authorized transferee), provided that this Option
shall be exercisable only to the extent that this Option was exercisable by the
Optionee on the date of his or her death or disability, and further provided
that this Option shall not be exercisable after the Final Exercise
Date.

    


    e.           Discharge
for Cause.  If the Optionee, prior to the Final Exercise Date,
is discharged by the Company for Cause (as defined below), the right to exercise
this Option shall terminate immediately upon the effective date of such
discharge. “Cause”
means, in each case, as reasonably determined by the Company’s Board of
Directors and which determination shall be conclusive: (i) conviction of, or
entry of a pleading of guilty or no contest by, Executive with respect to a
felony or any lesser crime of which fraud or dishonesty is a material element;
(ii) Executive's willful dishonesty towards the Company; (iii) Executive's
willful and continued failure to perform substantially all of his duties with
the Company, or a failure to follow the lawful direction of the Board after the
Board delivers a written demand for substantial performance and Executive
neglects to cure such a failure to the reasonable satisfaction of the Board
within five (5) business days following receipt of such written demand; (iv)
Executive's knowing and intentional failure to comply with applicable laws with
respect to the execution of the Company's business operations or his material
breach of this Agreement; (v) Executive's theft, fraud, embezzlement, dishonesty
or similar conduct which has resulted or is likely to result in material damage
to the Company or any subsidiaries and Affiliate; or (vi) Executive's habitual
intoxication or continued abuse of illegal drugs which materially interferes
with Executive's ability to perform his assigned duties and
responsibilities.  The Optionee shall be considered to have been
discharged for Cause if the Company’s Board of Directors determines, within
thirty (30) days after the Optionee’s resignation, that discharge for cause was
warranted.

    


    4.         
   Company
Right of First Refusal.

    


    a.           Notice of
Proposed Transfer.  If the Optionee proposes to sell, assign,
transfer, pledge, hypothecate or otherwise dispose of, by operation of law or
otherwise (collectively, “Transfer”)
any Shares acquired upon exercise of this Option, then the Optionee shall first
give written notice of the proposed transfer (the “Transfer
Notice”) to the Company.  The Transfer Notice shall name the
proposed transferee and state the number of such Shares the Optionee proposes to
transfer (the “Offered
Shares”), the price per share and all other material terms and conditions
of the transfer.

    


    b.           Company
Right to Purchase.  For thirty (30) days following its receipt
of such Transfer Notice, the Company shall have the option to purchase all or
part of the Offered Shares at the price and upon the terms set forth in the
Transfer Notice. In the event the Company elects to purchase all or part of the
Offered Shares, it shall give written notice of such election to the Optionee
within such 30-day period.  Within ten (10) days after his receipt of
such notice, the Optionee shall tender to the Company at its principal offices
the certificate or certificates representing the Offered Shares to be purchased
by the Company, duly endorsed in blank by the Optionee or with duly endorsed
stock powers attached thereto, all in a form suitable for transfer of the
Offered Shares to the Company.  Promptly following receipt of such
certificate or certificates, the Company shall deliver or mail to the Optionee a
check in payment of the purchase price for such Offered Shares; provided that if the terms of
payment set forth in the Transfer Notice were other than cash against delivery,
the Company may pay for the Offered Shares on the same terms and conditions as
were set forth in the Transfer Notice; and provided further that any
delay in making such payment shall not invalidate the Company’s exercise of its
option to purchase the Offered Shares.

    


    c.           Shares
Not Purchased By Company.  If the Company does not elect to
acquire all of the Offered Shares, the Optionee may, within the 30-day period
following the expiration of the option granted to the Company under subsection
(b) above, transfer the Offered Shares which the Company has not elected to
acquire to the proposed transferee, provided that such transfer
shall not be on terms and conditions more favorable to the transferee than those
contained in the Transfer Notice.  Notwithstanding any of the above,
all Offered Shares transferred pursuant to this Section 4 shall remain subject
to the right of first refusal set forth in this Section 4 and such transferee
shall, as a condition to such transfer, deliver to the Company a written
instrument confirming that such transferee shall be bound by all of the terms
and conditions of this Section 4.


    
      
         


      

      
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    d.            Consequences
of Non-Delivery.  After the time at which the Offered Shares
are required to be delivered to the Company for transfer to the Company pursuant
to subsection (b) above, the Company shall not pay any dividend to the Optionee
on account of such Offered Shares or permit the Optionee to exercise any of the
privileges or rights of a stockholder with respect to such Offered Shares, but
shall, in so far as permitted by law, treat the Company as the owner of such
Offered Shares.

    


    e.           
 Exempt
Transactions.  The following transactions shall be exempt from
the provisions of this Section 4:

    


    i.           Any
transfer of Shares to or for the benefit of any spouse, child or grandchild of
the Optionee, or to a trust for their benefit;

    


    ii.           Any
transfer pursuant to an effective registration statement filed by the Company
under the Securities Act of 1933, as amended (the “Securities Act”);
and

    


    iii.           The
sale of all or substantially all of the shares of capital stock of the Company
(including pursuant to a merger or consolidation);

    


    provided, however, that in the
case of a transfer pursuant to clause (i) above, such Shares shall remain
subject to the right of first refusal set forth in this Section 4 and such
transferee shall, as a condition to such transfer, deliver to the Company a
written instrument confirming that such transferee shall be bound by all of the
terms and conditions of this Section 4.

    


    f.            
Assignment
of Company Right.  The Company may assign its rights to
purchase Offered Shares in any particular transaction under this Section 4 to
one or more persons or entities.

    
 

    g.            Termination.  The
provisions of this Section 4 shall terminate upon the earlier of the following
events:

    


    i.           the
closing of the sale of shares of Common Stock in an underwritten public offering
pursuant to an effective registration statement filed by the Company under the
Securities Act; or

    


    ii.           the
sale of all or substantially all of the capital stock, assets or business of the
Company, by merger, consolidation, sale of assets or otherwise (other than a
merger or consolidation in which all or substantially all of the individuals and
entities who were beneficial owners of the Common Stock immediately prior to
such transaction beneficially own, directly or indirectly, more than 75% of the
outstanding securities entitled to vote generally in the election of directors
of the resulting, surviving or acquiring corporation in such
transaction).

    


    h.          
 No
Obligation to Recognize Invalid Transfer.  The Company shall
not be required (1) to transfer on its books any of the Shares which shall have
been sold or transferred in violation of any of the provisions set forth in this
Section 4, or (2) to treat as owner of such Shares or to pay dividends to any
transferee to whom any such Shares shall have been so sold or
transferred.

    


    i.            
Legends.  The
certificate representing Shares shall bear a legend substantially in the
following form (in addition to, or in combination with, any legend required by
applicable federal and state securities laws and agreements relating to the
transfer of the Company securities):

    "The shares represented by this
certificate are subject to a right of first refusal in favor of the Company, as
provided in a certain stock option agreement with the
Company."


    
      
         


      

      
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    5.           
 Withholding.
No Shares will be issued pursuant to the exercise of this Option unless and
until the Optionee pays to the Company, or makes provision satisfactory to the
Company for payment of, any federal, state or local withholding taxes required
by law to be withheld in respect of this Option.

    


    6.           
 Compliance
with Laws and Regulations.

    


    a.           The
exercise of this Option and the issuance of the Shares upon such exercise shall
be subject to compliance by the Company and Optionee with all applicable
requirements of law relating thereto and with all applicable regulations of any
national securities exchange (or the Nasdaq Stock Market or the Over-the-Counter
Bulletin Board, if applicable) on which the Common Stock may be listed or quoted
for trading at the time of such exercise and issuance.

    


    b.           The
inability of the Company to obtain approval from any regulatory body having
authority deemed by the Company to be necessary to the lawful issuance and sale
of any Common Stock pursuant to this Option shall relieve the Company of any
liability with respect to the non-issuance or sale of the Common Stock as to
which such approval shall not have been obtained.  The Company,
however, shall use its best efforts to obtain all such approvals.

    


    7.            
Investment
Intent; Restrictions on Transfer.  Optionee represents and
agrees that if Optionee exercises this Option in whole or in part, Optionee will
in each case acquire the Shares upon such exercise for the purpose of investment
and not with a view to, or for resale in connection with, any distribution
thereof; and that upon such exercise of this Option in whole or in part,
Optionee (or any person or persons entitled to exercise this Option under the
provisions of Section 4 hereof) shall furnish to the Company a written statement
to such effect, satisfactory to the Company in form and substance. The Company,
at its option, may include a legend on each certificate representing Shares
issued pursuant to any exercise of this Option, stating in effect that such
Shares have not been registered under the Securities Act of 1933, as amended
(the “Act”), and that
the transferability thereof is restricted.  If the Shares represented
by this Option are registered under the Act, either before or after the exercise
of this Option in whole or in part, the Optionee shall be relieved of the
foregoing investment representation and agreement and shall not be required to
furnish the Company with the foregoing written statement.

    


    Optionee
further represents that Optionee has had access to the financial statements or
books and records of the Company, has had the opportunity to ask questions of
the Company concerning its business, operations and financial condition, and to
obtain additional information reasonably necessary to verify the accuracy of
such information, and further represents that Optionee has either such
experience and knowledge in investment, financial and business matters or has
investments similar to the stock of the Company such that Optionee is capable of
evaluating the merits and risks thereof and has the capacity to protect his or
her own interest in connection therewith.

    


    8.           
 Nontransferability
of Option. Subject to Section 4, this Option may not be sold, assigned,
transferred, pledged or otherwise encumbered by the Optionee, either voluntarily
or by operation of law, except by will or the laws of descent and distribution,
and, during the lifetime of the Optionee, this Option shall be exercisable only
by the Optionee.

    


    9.            
Optionee
Not a Shareholder.  Optionee shall have no rights as a
shareholder with respect to the Common Shares of the Company covered by this
Option until the date of issuance of a stock certificate or stock certificates
to her upon exercise of this Option.  No adjustment will be made for
dividends or other rights for which the record date is prior to the date such
stock certificate or certificates are issued.

    


    10.          
 No Right
to Employment.  Nothing in the Option granted hereby shall
interfere with or limit in any way the right of the Company to terminate
Optionee's employment or consulting at any time, nor confer upon Optionee any
right to continue in the employ of, or consult with, the Company.

    


    11.          
 Adjustment
in Option Shares.  Should any change
be made to the Common Stock by reason of any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares, or other change
affecting the outstanding Common Stock as a class without the Company’s receipt
of consideration, appropriate adjustments shall be made to (i) the total number
and/or class of securities subject to this Option and (ii) the Exercise Price in
order to reflect such change and thereby preclude a dilution or enlargement of
benefits hereunder.


    
      
         


      

      
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    12.           Notices.  All
notices to the Company shall be addressed to the Chief Executive Officer at the
principal executive office of the Company, and all notices to Optionee shall be
addressed to Optionee at the address of Optionee on file with the Company, or to
such other address as either may designate to the other in writing.  A
notice shall be deemed to be duly given if and when enclosed in a properly
addressed sealed envelope deposited, postage prepaid, with the postal
service.  In lieu of giving notice by mail as aforesaid, written
notices under this Agreement may be given by personal delivery to Optionee or to
the Chief Executive Officer (as the case may be).

    


    13.           Applicable
Law.  This Agreement has been granted, executed and delivered
in the State of Nevada, and the interpretation and enforcement shall be governed
by the laws thereof and subject to the exclusive jurisdiction of the courts
therein.

    


    


    IN
WITNESS WHEREOF, the Company has caused this Option to be executed under its
corporate seal by its duly authorized officer.  This Option shall take
effect as a sealed instrument.

    


     

    
      
        	 	SINO CLEAN ENERGY,
      INC	 
	 	 	 	 
	
                Dated:
      __________, 200_    

              	
                By:
      

              	 	 
	 	 	Baowen
      Ren	 
	 	 	Chief
      Executive Officer	 
	 	 	 	 


      

    

    



    
      
         


      

      
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    APPENDIX
A

    


    NOTICE
OF EXERCISE

    


    Sino
Clean Energy, Inc.

    Room
2205, Suite A, Zhengxin Building, No. 5

    Gaoxin
1st Road, Gao Xin District, Xi’an, Shaanxi Province

    People’s
Republic of China

    


    (1)           The
undersigned hereby elects to purchase ________ shares of the Common Stock of
Sino Clean Energy, Inc. (the “Company”) pursuant to the terms of the attached
Non-statutory Stock Option Agreement and tenders herewith payment of the
exercise price in full, together with all applicable transfer taxes, if any, in
the amount of $ _____________.

    


    (2)           Please
issue a certificate or certificates representing said shares of Common Stock in
the name of the undersigned or in such other name as is specified
below:

    


    ________________________

    (Name)

    ________________________

    ________________________

    (Address)

    


    (3)           The
undersigned represents that (i) the aforesaid shares of Common Stock are being
acquired for the account of the undersigned for investment and not with a view
to, or for resale in connection with, the distribution thereof and that the
undersigned has no present intention of distributing or reselling such shares;
(ii) the undersigned is aware of the Company’s business affairs and financial
condition and has acquired sufficient information about the Company to reach an
informed and knowledgeable decision regarding its investment in the Company;
(iii) the undersigned is experienced in making investments of this type and has
such knowledge and background in financial and business matters that the
undersigned is capable of evaluating the merits and risks of this investment and
protecting the undersigned’s own interests; (iv) the undersigned understands
that the shares of Common Stock issuable upon exercise of this Option have not
been registered under the Securities Act of 1933, as amended (the “Act”), by
reason of a specific exemption from the registration provisions of the Act,
which exemption depends upon, among other things, the bona fide nature of the
investment intent as expressed herein, and, because such securities have not
been registered under the Act, they must be held indefinitely unless
subsequently registered under the Act or an exemption from such registration is
available; (v) the undersigned is aware that the aforesaid shares of Common
Stock may not be sold pursuant to Rule 144 adopted under the Act unless certain
conditions are met and until the undersigned has held the shares for the number
of years prescribed by Rule 144, that among the conditions for use of the Rule
is the availability of current information to the public about the Company and
the Company has not made such information available and has no present plans to
do so; and (vi) the undersigned agrees not to make any disposition of all or any
part of the aforesaid shares of Common Stock unless and until there is then in
effect a registration statement under the Act covering such proposed disposition
and such disposition is made in accordance with said registration statement, or
the undersigned has provided the Company with an opinion of counsel satisfactory
to the Company, stating that such registration is not required.

     

    
      
        
          
            
              
                
                  
                    
                      	 	 	 	 
	 	 	 	 
	
                              
                                (Date)

                              

                            	
                               

                            	(Signature)	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	(Print
      name) 	 


                    

                  

                

              

            

          

        

      

    

     

    


     

     

     

     

     

     

     

     

     

     

     

     

     

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