Unassociated Document


    EXCLUSIVE
OPTION AGREEMENT

     

    BETWEEN

     

    China
New Energy Investment Co., Ltd.

     

    AND

     

    Beijing
Fengyin Xianghe Scientific Technology Co., Ltd.

    


     

    Beijing,
CHINA


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    EXCLUSIVE
OPTION AGREEMENT

     

    This
Exclusive Option Agreement (the “Agreement”) is entered into as of _________,
2010 between the following parties in Beijing.

     

    Party A:

    Name:
China New Energy Investment Co., Ltd.

    Registered
Address:

    Legal
Representative:

    


    Party B:

    Name:
Beijing Fengyin Xianghe Scientific Technology Co., Ltd.

    Registered
Address:

    Legal
Representative:

    


    丙方Party C:

    Name:
Zhuolu Dadi Gas Co. Ltd.

    Registered
Address: Zhuolu County, Zhangjiakou, Hebei Province

    Legal
Representative: Tang Zhixiang

    


    In this
Agreement, Party A and Party B are called collectively as the
“Parties”.

     

    WHEREAS:

    


    
      	
              1.

            	
              Party
      A is a wholly foreign-owned enterprise incorporated under the laws of the
      People’s Republic of China (the
“PRC”);

            


    

     

    
      	
              2.

            	
              Party
      B is a liability limited company incorporated in Beijing and with business
      license issued by the Beijing Municipal Administration of Industry and
      Commerce;

            


    

     

    
      	
              3.

            	
              Party
      C is a liability limited company incorporated in Zhuolu County,
      Zhangjiakou, Hebei Province.

            


    

    


    
      	
              4.

            	
              Party
      A and Party B have reached Equity Transfer Agreement on 70% Equity of
      Zhuolu Dadi Gas Co. Ltd. (hereinafter referred to as “ETA”) in connection
      with Party B transferring 70% equity of Party C to Party
  A.

            


    

    


    NOW, THEREFORE, the Parties
through mutual negotiations hereby enter into this Agreement according to the
following terms and conditions:


    
      
         


      

      
        1

        
          

        

      

      
         


      

    

    


    
      	
              1.

            	
              THE
      GRANT AND EXERCISE OF PURCHASE
OPTION

            


    

     

    
      	
            	
              1.1

            	
              Grant:

            


    

    Party B
grants Party A an irrevocable exclusive purchase option. After the completion of
the Transfer under the ETA Party A has right to purchase remaining 30% the
shares of Party C currently owned by Party B. This purchase option is
irrevocable and shall be exercised only by Party A.

    


    
      	
            	
              1.2

            	
              Exercise
      Procedures:

            


    

    
      	
               
      

            	
              1.2.1

            	
              Both
      Party shall sign Equity Transfer Agreement on 70% Equity
      of  Zhuolu Dadi Gas Co. Ltd(as
      attached)on the date
      of execution of this Agreement.

            


    

    
      	
               
      

            	
              1.2.2

            	
              Upon
      payment of the 2nd Payment (as defined in the ETA), Party A shall notify
      Party B in writing within 3 working days regarding its intention of
      exercising the Option (the “Option Notice” hereinafter). After the
      mentioned period, if the Transferee does not provide the notice to
      Transferor, it will deem as the Transferee gives up the option
      right.

            


    

    
      	
               
      

            	
              1.2.3

            	
              Upon
      delivery of the Option Notice, Party B shall execute other necessary
      documents (collectively, the “Transfer Documents”) with Party A (or the
      qualified person appointed by Party A) in order to effectuate the transfer
      of shares.

            


    

    
      	
               
      

            	
              1.2.4

            	
              Party
      B shall assist Party A to complete the necessary procedures such as
      governmental approval, permission, registration, documentations and other
      related procedure to complete the
transfer.

            


    

    


    
      	
              2、

            	
              Price
      of Option

            


    

    The
option price shall be RMB 65 million for the 30% of Party C’s equity owned by
Party B.

    


    
      	
              3.

            	
              REPRESENTATIONS
      AND WARRANTIES

            


    

    


    
      	
            	
              3.1

            	
              Each
      party hereto represents to the other parties that: (1) it has all the
      necessary rights, powers and authorizations to enter into this Agreement
      and perform its duties and obligations hereunder; and (2) the execution or
      performance of this Agreement shall not violate any significant contract
      or agreement to which it is a party or by which it or its assets are
      bounded.

            


    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              3.2

            	
              Party
      B represents to Party A that: (1) they are legally registered shareholders
      of Party C and have paid the full amount of their respective portions of
      Party C's registered capital required under the PRC laws; (2) Party B has
      not mortgaged or pledged its shares of Party C, nor has it granted any
      security interest or borrowed against its shares of Party C in any form;
      and (3) Party B has not sold nor will sell to any third party its equity
      interests in Party C.

            


    

    


    
      	
              4.

            	
              ASSIGNMENT
      OF AGREEMENT

            


    

    


    
      	
            	
              4.1

            	
              Party
      B shall not transfer their rights and obligations under this Agreement to
      any third party without the prior written consent of the Party
      A.

            


    

     

    
      	
            	
              4.2

            	
              Party
      B hereby agrees that Party A shall have the right to transfer all of its
      rights and obligation under this Agreement to any third party whenever it
      desires. Any such transfer shall only be subject to a written notice sent
      to Party B.

            


    

     

    
      	
              5. 

            	
              CONFIDENTIALITY

            


    

    


    The
Parties acknowledge and confirm that any oral or written materials exchanged by
the Parties in connection with this Agreement are confidential. The Parties
shall maintain the secrecy and confidentiality of all such materials. Without
the written approval by the other Parties, any Party shall not disclose to any
third party any relevant materials, but the following circumstances shall be
excluded:

    


    
      	
               
      

            	
              a.

            	
              The
      materials is known or will be known by the public (except for any
      materials disclosed to the public by the Party who receives such
      materials);

            


    

     

    
      	
               
      

            	
              b.

            	
              The
      materials are required to be disclosed under the applicable laws or the
      rules or provisions of stock exchange;
or

            


    

     

    
      	
               
      

            	
              c.

            	
              The
      materials disclosed by each Party to its legal or financial consultant
      relate to the transaction contemplated under this Agreement, and such
      legal or financial consultant shall comply with the confidentiality set
      forth in this Section. The disclosure of the confidential materials by an
      employee of any Party shall be deemed disclosure of such materials by such
      Party, and such Party shall be liable for breaching the contract. This
      Article shall survive this Agreement even if this Agreement is invalid,
      amended, revoked, terminated or unenforceable by any
    reason.

            


    

     

    
      	
              6. 

            	
              BREACH
      OF CONTRACT

            


    

    


    Any
violation of any provision hereof, any incomplete or mistaken performance of any
obligation provided hereunder, any misrepresentation made hereunder, any
material nondisclosure or omission of any material fact, or any failure to
perform any covenants provided hereunder by any Party shall constitute a breach
of this Agreement. The breaching Party shall be liable for any such breach
pursuant to the applicable laws.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	
              7. 

            	
              APPLICABLE
      LAW AND DISPUTE RESOLUTION

            


    

    


    
      	
            	
              7.1

            	
              Applicable
      Law

            


    

     

    The
execution, validity, interpretation and performance of this Agreement and the
disputes resolution under this Agreement shall be governed by the laws of
PRC.

    


    
      	
            	
              7.2

            	
              Dispute
      Resolution

            


    

     

    The
parties shall strive to settle any dispute arising from the interpretation or
performance of this Agreement through friendly consultation. In case no
settlement can be reached through consultation within thirty (30) days after
such dispute is raised, each party can submit such matter to China International
Economic and Trade Arbitration Commission Beijing Branch (the “CIETAC”) in
accordance with its rules. The arbitration shall take place in Beijing. The
arbitration award shall be final, conclusive and binding upon both
parties.

     

    
      	
              8. 

            	
              EFFECTIVENESS
      AND TERMINATION

            


    

    


    
      	
            	
              8.1

            	
              This
      Agreement shall be effective upon the execution hereof by all Parties
      hereto and shall remain effective
thereafter.

            


    

    


    
      	
            	
              8.2

            	
              This
      Agreement may not be terminated without the consent of Party A and Party B
      except that Party A may, by giving thirty (30) days prior notice to the
      other Parties hereto, terminate this
Agreement.

            


    

    


    
      	
              9. 

            	
              MISCELLANEOUS

            


    

    


    
      	
            	
              9.1

            	
              Amendment,
      Modification and Supplement

            


    

     

    Any
amendment and supplement to this Agreement shall be made by the Parties in
writing. The amendment and supplement duly executed by each Party shall be
deemed an integral part of this Agreement and shall have the same legal effect
as this Agreement.

     

    
      
        
        

      

      
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              9.2

            	
              Entire
      Agreement 

            


    

     

    The
Parties acknowledge that this Agreement, General Framework Agreement for
Cooperation, ETA, Supplementary Agreement for the Escrow Terms and Conditions
for the First Installment and all ancillary agreements to each constitutes the
entire agreement of the Parties with respect to the subject matters therein and
supersedes and replaces all prior or contemporaneous agreements and
understandings in oral or written form.

     

    
      	
            	
              9.3

            	
              Severability

            


    

      

    If any
provision of this Agreement is adjudicated to be invalid or non-enforceable
according to relevant PRC laws of the PRC, such a provision shall be deemed
invalid only to the extent the PRC laws are applicable in China, and the
validity, legality and enforceability of the other provisions hereof shall not
be affected or impaired in any way. The Parties shall, through consultation
based on the principal of fairness, replace such invalid, illegal or
non-enforceable provision with valid provision so that any substituted provision
may bring the similar economic effects as  those intended by the
invalid, illegal or non-enforceable provision.

     

    
      	
            	
              9.4

            	
              Headings

            


    

     

    The
headings contained in this Agreement are for the convenience of reference only
and shall not in any other way affect the interpretation, explanation or the
meaning of the provisions of this Agreement.

     

    
      	
            	
              9.5

            	
              Language
      and Copies

            


    

      

    This
Agreement is executed in Chinese in six (6) copies; each Party holds two and
each original copy has the same legal effect.

     

    
      	
            	
              9.6

            	
              Successor

            


    

     

    This
Agreement shall bind and benefit the successor or the transferee of each
Party.

     

    IN WITNESS THEREFORE, the
parties hereof have caused this Agreement to be executed by their duly
authorized representatives as of the date first written
above.



    
      
         


      

      
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    [No Text
Below, Signature Page Only]

     

    PARTY
A: China New Energy Investment Co., Ltd (Seal)

    


    Legal Representative/Authorized Representative(Signature):

     

    
      
        

      
 


    PARTY
B: Beijing Fengyin Xianghe Scientific Technology Co., Ltd. (Seal)

    


    Legal Representative/Authorized Representative(Signature):

    
       

      
        
          

        
  
PARTY
C: Zhuolu Dadi Gas Co., Ltd. (Seal)

    


    Legal Representative/Authorized Representative(Signature):

    
       

      
        
          

        

      

    
 

    
      
         


      

      
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