Unassociated Document


    Equity
Transfer Agreement on

    70% Equity of Zhuolu Dadi Gas Co.
Ltd.

    


    This
Agreement is entered by and between the Transferor, the Transferee and the Related
Party of Transferor in  Beijing on the day of
September 14,2010.

    


    Transferor:

      Beijing
Fengyin Xianghe Scientific Technology Co., Ltd.

    


    Transferee:

    China New
Energy Investment Co.,Ltd

    Authorized
Representative:

    ID
No.:

    


    Related
Party of Transferor:

      Tang
Zhixiang (ID No._ 110227195610211817)

    


    (The
Transferor, the Transferee and the Related
Party of Transferor
shall hereinafter be referred to individually as the "Party" and collectively as
the "Parties".)

    


    Target
Company:

    Zhuolu
Dadi Gas Co. Ltd., (hereinafter referred to as “Zhuolu Company” or the “Target
Company”), a limited company established and existing under the laws of China,
with its registered address at Zhuolu County, Zhangjiakou, Hebei Province, with
its legal representative of Tang Zhixiang.


    
      
         


      

      
        1

        
          

        

      

      
         


      

    

    


    Whereas:

    


    
      	
              1)

            	
              The
      Related Party of Transferor is the actual controller of (i) the
      Transferor; (ii) Target Company and its related companies listed in Annex
      I (List of Target Company and its related companies) and (iii) majority
      shareholders of Target Company and its related
  companies;

            


    

    
      	
              2)

            	
              The
      Transferor undertakes that after the execution of this Agreement and
      within 45 days after the Transferee paid the first installment payment to
      the Mutual Management Bank Account he will reach the target of holding
      100% equity of the Target Company by purchasing the
  equity;

            


    

    
      	
              3)

            	
              The
      Transferee agrees that after the Transferor holding 100% equity of the
      Target Company, the Transferee will purchase 70% equity of the Target
      Company from the Transferor;

            


    

    
      	
              4)

            	
              Target
      Company and its related companies listed in Annex I intend to invest
      projects listed in Annex VII; and

            


    

    
      	
              5)

            	
              The
      Transferor provides the separate and consolidated financial statements
      (including balance sheet and income statement) of Target Company and its
      related companies listed in Annex I as indicated in Annex VIII. Transferor
      and the Related Party of Transferor represent and agree that all financial
      statements contained in Annex VIII are accurate and
    complete.

            


    

    


    Pursuant
to the Company Law of the
People's Republic of China and Contract Law of the People's
Republic of China and other applicable laws and regulations the
Transferor, the Transferee and the Related Party of Transferor, after friendly
consultations, conclude this Agreement regarding the equity transfer as
follows:


    
      
         


      

      
        2

        
          

        

      

      
         


      

    


    1.
Transferred Equity

    
      	
              1.1

            	
              The
      Transferor agrees that after the execution of this Agreement and within 45
      days after the Transferee paid the first installment payment to the Mutual
      Management Bank Account it will reach the target of holding 100% equity of
      the Target Company by purchasing the equity. The Transferor agrees to sell
      70% equity interest of the Target Company held by it to the
      Transferee.

            


    

    
      	
              1.2

            	
              The
      Transferee agrees to purchase the 70% equity interest of the Target
      Company from the Transferor after its holding 100% equity interest of the
      Target Company.

            


    

    
      	
              1.3

            	
              After
      the completion of registration in AIC for this equity transfer the
      Transferee will enjoy the shareholder's rights, and undertake obligations
      and responsibilities of shareholder in accordance with applicable China
      laws and the provisions of the Articles of Association of the Target
      Company.

            


    

    


    
      	
              2.

            	
              Principles
      of Transfer of Equity

            


    

    
      	
              2.1

            	
              The
      Parties agree that the respective obligations of the Transferor and the
      Transferee to effect the sale and purchase of the Transferred Equity and
      the Completion shall comply with the following
  principles:

            


    

    
      
        	
                  

              	
                (1)

              	
                that
      all necessary permissions, instructions, consents, licenses, approval or
      authorization of any governmental
      authority, bureau, agency or other body required in connection with the
      legality, validity or enforceability of the sale and purchase of the
      Transferred Equity have been obtained or
    made;

              


      

    

    
      
        	 	
                (2)

              	
                that
      all necessary procedures, formalities and steps and regulatory
      requirements relating to the sale and purchase of the Transferred Equity
      have been completed or complied
with;

              


      

    

    
      
        	 	
                (3)

              	
                that
      this transfer of equity shall not result in the deprivation of operating
      right of urban gas pipeline project of the Target Company and its related
      companies listed in Annex
I.

              


      

    


    
      
         


      

      
        3

        
          

        

      

      
         


      

    

    


    
      	
              2.2

            	
              The
      Transferee may at any time in writing exempt the performance of any of the
      above principles by the Transferor, and such exempt may be made subject to
      such terms and conditions as determined by the
  Transferee.

            


    

    


    The
Parties agree that unless otherwise provided in this Agreement, the Transferee
shall be entitled to terminate this Agreement unilaterally without any liability
of breach of this Agreement if some or all of the principles have not been
complied with before the completion of the transfer due to the Transferor. In
the event of such termination by the Transferee, any installments of the
purchase price previously paid shall be returned to the Transferee and the
Transferee is entitled to a penalty of RMB 5,000,000.00. If the penalty can not
cover the damages or losses suffered by the Transferee hereby, the Transferor
shall compensate the shortfall of such losses of the Transferee. If the
Transferee suffers from damages or losses hereby, the Transferor shall
compensation such losses to the Transferee.

    


    
      	
              3.

            	
              Arrangement
      of Mutual Management Bank Account

            


    

    
      	
              3.1

            	
              Both
      the Transferee and the Transferor mutually agree that the Parties will
      open a mutual managed bank account with the Beneficiary of the Transferee
      within 3 working days after the execution of this Agreement. Any interest
      arise from the money deposited in the Mutual Management Bank Account shall
      belong to the Transferee.

            


    

    


    In the
event that pursuant to the laws and regulations or the terms and conditions of
this Agreement, this Agreement shall be terminated and the Transferor was
obliged to refund partial or entire payment paid by the Transferor; then release
the mutual managed bank account

    
      	
              3.2

            	
              Both
      the Transferee and the Transferor mutually agree that relevant documents
      in connection with the terms and conditions of escrow may be made,
      including Supplementary Agreement for the Escrow Terms and Conditions for
      the First Installment.

            


    


    
      
         


      

      
        4

        
          

        

      

      
         


      

    

    


    
      	
              4.

            	
              Consideration
      and Payment Schedule

            


    

     Both
the Transferor and the Transferee agree that the consideration of 70% equity of
the Target Company (hereinafter referred to as the "Consideration") shall be
RMB135,000,000.00 (including tax). In any cases, the amount of the Consideration
will not be adjusted. But if any party breaches this Agreement, the breaching
party shall take the corresponding liabilities of breach.

    
      	  	
              4.1.1

            	
              The
      Consideration shall be paid in Renminbi or equivalent US Dollars (the
      exchange rate between RMB and USD shall be the rate upon each installment
      of payment) by installments.

            


    

    
      	 	
              4.1.2

            	
              Both
      the Transferor and the Transferee agree the value of the corresponding
      equity of the Target Company and its related companies listed in Annex I
      is included in the Consideration. After this acquisition, the Target
      Company shall achieve the shareholding structure listed in Annex
      III.

            


    

    
      
        	
                4.2

              	
                Payment
      Schedule

              


      

    

    


    The
Parties agree that the Consideration shall be paid according to the following
Payment Schedule:

    
      	  	
              4.2.1

            	
              The
      amount of the first installment is
  RMB60,000,000.00.

            


    

    
      	 	
              4.2.1.1

            	
              Transferee
      shall make the first installment payment to the Mutual Management Bank
      Account within 5
      working days after the execution of this
  Agreement.

            


    


    
      
         


      

      
        5

        
          

        

      

      
         


      

    

    


    Notwithstanding
aforesaid, if the Transferee failed to pay the agreed amount to the Transferor
to the Mutual Management Bank Account before the expiration day of the first
installment payment, the Transferee will be in a 5 days grace period. After such
grace period expired, if the transferee still failed to pay the agreed amount in
accordance with this Agreement, the Transferee shall pay overdue penalties at
the amount of 0.1% of the amount payable of the first installment to the
Transferors per day. However, that in no event shall the penalty of the late
payment of first installment payment be greater than RMB5,000,000.00
Yuan.

    


    
      	
            	
              4.2.1.2 

            	
              The
      Parties agree that after the satisfaction of first installment payment
      release preconditions, the Transferor is entitled to transfer partial or
      entire first installment payment from the Mutual Management Bank Account
      to any bank account at its sole discretion within 45 days (including the
      45th
      day) after the first installment payment was paid to the Mutual Management
      Bank Account. The first installment payment release preconditions are as
      follows:.

            


    

     

    
      
        	
              	
                (1) 

              	
                Transferor
      owns 100% equity of the Target Company by purchasing equity and has
      completed the corresponding alteration of AIC registration, namely after
      such alteration the Transferor shall hold 100% equity of the Target
      Company.;

              


      

       

    

    
      
        	
              	
                (2) 

              	
                The
      Target Company has accomplish the equity purchase of the entire equity on
      the purpose of achieving the shareholding structure listed in Annex II and
      completed the corresponding alteration registration of AIC. In order to
      avoid ambiguity, the Parties agree that the consideration of the equity
      transfer which the Target Company purchase on the purpose of achieving the
      shareholding structure listed in Annex II shall be included in the
      Consideration of this Agreement and the Transferor shall be in charge of
      making relevant payment of such consideration of the equity transfer to
      the seller of such equity and ensure that there will not be any liability
      incurred by the Target Company
hereby.

              


      

    


    
      
         


      

      
        6

        
          

        

      

      
         


      

    

    


    
      
        	
              	
                (3) 

              	
                Transferor
      has transferred 70% equity of the Target Company to the Transferee and
      completed the alteration of AIC registration for the equity transfer of
      the Target Company (during which the Transferee shall provide necessary
      assistance), namely after such alteration the Transferee shall hold 70%
      equity of the Target Company. For the Board of the Target Company after
      such alteration of AIC registration 5 directors of shall be appointed by
      the Transferee and 2 shall be appointed by the Transferor. The Target
      Company has obtained the new Business License. The business scope of all
      the Target Company shall at least include the operation, management and
      services of urban gas pipeline when submitting to MOC for
      approval  and the subsidiary companies wholly-owned, controlled
      of Target Company listed in Annex II shall remain the
  same.

              


      

       

    

    
      
        	  	
                (4) 

              	
                The
      Target Company has achieved the shareholding structure listed in Annex
      II;

              


      

       

    

    
      
        	
              	
                (5) 

              	
                Before
      the completion of the Transfer, Articles of Associations of the Target
      Company and subsidiaries wholly-owned, controlled of Target Company listed
      in Annex II shall satisfy that: (i) resolutions of the shareholders’
      meeting with respect to decision of amending the articles of the
      association of the company, increasing or decreasing the registered
      capital, and merge, split, dissolution or alteration of the company form,
      shall be passed by the shareholders which represent two-thirds of the
      approving votes; and (ii) the Transferor or the Target Company has the
      right to appoint all the directors or executive director of the Target
      Company and subsidiaries wholly-owned, controlled of Target Company listed
      in Annex II. In the case when the Transferor transfer its equity of the
      Target Company partially or entirely, such right of director appointment
      shall be still be valid to the transferee of such equity, unless otherwise
      provided under this
Agreement;

              


      

    


    
      
         


      

      
        7

        
          

        

      

      
         


      

    

    


    
      
        	
              	
                (6) 

              	
                Both
      Transferor and the Related Party of Transferor has entered into an
      agreement involving all the following contents by and between all the
      shareholders (other than the Target Company, Transferee and Transferor) of
      the Target Company and Subsidiary Companies wholly-owned, controlled of
      Target Company listed in Annex
II):

              


      

    

    
      
        
          	
                	
                    (i)  

                	
                  Both
      the Transferor and the Related Party of Transferor  undertakes
      that after the completion of the Transfer (A) except provided otherwise in
      the agreement,they will not take part in any day-to-day operation and
      management (including but not limited to, taking the position of director,
      supervisor, senior officer, etc.) of the Target Company and Subsidiary
      Companies wholly-owned, controlled and equity affiliates of Target Company
      listed in Annex II; (B) the Transferor shall have the right appoint 2
      directors and the Transferee shall have the right to appoint 5 directors
      and (C) waive the first right of refusal (if any) to purchase any equity
      sold by other shareholders of any the Target Company and Subsidiary
      Companies wholly-owned, controlled of Target Company listed in Annex II
      any more. Transferor shall only have the rights to enjoy the dividends and
      vote for the resolution of shareholder’s meeting according to his equity
      proportion; and

                


        

      

       

    

    
      
        	
              	
                (7) 

              	
                DADI
      GAS undertakes in writing that from the execution day of this Agreement it
      will not operate any business in connection with city gas and also will
      not operate any business in connection with the gas construction in the
      area of the Target Company, any Subsidiary Companies wholly-owned,
      controlled of Target Company, the projects planned and the area the
      Transferee operate and will operate without the prior written consent of
      the Transferee;

              


      

    


    
      
         


      

      
        8

        
          

        

      

      
         


      

    

    


    
      
        
          	  	
                  (8) 

                	
                  The
      Transferor and the Target Company shall assist the Transferee to inspect
      and check the fixed assets of the Target Company and Subsidiary Companies
      wholly-owned, controlled of Target Company listed in Annex II)(If
      due to the reasons caused by the Transferee and which results the
      completion of fixed inspection and physical check could not be completed,
      then it deems as the Transferor has fulfilled their obligation).

                


        

      

       

    

    
      
        	  	
                (9)   

              	
                The
      Transferor shall procure the Target Company and Subsidiary Companies
      wholly-owned, controlled of Target Company listed in Annex II to complete
      to transfer following materials to the Transferee, including but not
      limited to, company stamps, certificates, licenses, government permits and
      documents and materials of engineering, finance, human resources and
      business contracts of operation, no matter in writing or in electronic;
      and

              


      

       

    

    
      
        	  	
                (10) 

              	
                Completion
      of the Transfer;

              


      

       

    

    
      
        	  	
                (11) 

              	
                The
      Transferor and the Related Party of Transferor has caused all the
      corresponding signatory parties of the legal documents regarding to the
      projects planned listed in Annex VII agree that (i) the Transferor, the
      Related Party of Transferor and their affiliates (where applicable) is
      entitled to transfer all of its rights and liabilities set forth in the
      corresponding legal documents to the Transferee or any third party
      nominated by the Transferee with no additional consideration; and (ii) the
      transfer of rights and liabilities aforesaid shall not cause any adverse
      affect to its transferee on the performance of such legal documents.
      Simultaneously, any legal documents regarding to such rights and
      liabilities transfer is duly executed. In addition, the Transferor obtain
      the written undertaking from DADI GAS of which DADI GAS will not take part
      in such projects planned in any manners without the prior written consent
      from the Transferee; and

              


      

    


    
      
         


      

      
        9

        
          

        

      

      
         


      

    

    


    
      
        	  	
                (12) 

              	
                All
      Obligations of all parties set forth in Supplementary Agreement for the
      Escrow Terms and Conditions for the First Installment have fully
      performance, there is no any breach for all
  parties.

              


      

    

    


    The
Transferor shall submit original certificate or documents on satisfaction of
above conditions after obtainment. After the Transferee has received all the
certificates and documents, the Transferee shall issue a written confirmation
immediately. The day on which such written confirmation is issued is the
satisfaction day of the first installment payment release preconditions.
Notwithstanding aforesaid, the Transferee shall not refuse to issue the written
confirmation unreasonably when such certificates and documents submitted by the
Transferor are true, necessary and sufficient. Above-mentioned first installment
payment release preconditions shall be satisfied or fulfilled within 45 days
after the Transferee paid the first installment payment to the Mutual Management
Bank Account. In the event that the Transferor failed to satisfy all the first
installment payment release preconditions prior to the expiry of such time limit
and the Transferor submit a list in writing on the completion situation of the
preconditions (including all the completed items and uncompleted items) on the
expiration day of such time limit. the Transferee agreed to provide a remedy
period for the Transferor, the preliminary remedy period are 15 days . During
such preliminary remedy period, the Transferor does not need to pay any penalty
for its failure on satisfaction of all the first installment payment release
preconditions. In the event that the Transferor failed to satisfy all the first
installment payment release preconditions prior to the expiry of such
preliminary remedy period, the Transferor is entitled to submit a written
application on the extension of the remedy period of which the Transferor shall
state the reasons of its failure to satisfy all the first installment payment
release preconditions. The Transferee is entitled to decide whether such reasons
are reasonable or not. If not reasonable or the Transferor does not submit such
extension application, the remedy period will be expired on the expiration day
of the preliminary remedy perod; if reasonable, the Transferee may provide a 15
days extension of the remedy period (extension remedy period) for the
Transferor, The remedy perod will be expired on the expiration day of the
extension remedy period. During such extension
remedy period, the Transferor need to pay 0.1% of the first payment per day as
the penalty to the Transferee until the Transferor satisfy all the first
installment payment release preconditions,but in case that
the Transferor fails to satisfy all the first installment payment release
preconditions due to the liability of the Transferee, such penalty shall not
apply. In the event the Transferor is not able to satisfy all the first
installment payment release preconditions prior the expiry of remedy period, the
Transferee is entitled to take any of the following action (except due to the
liability of the Transferee ):


    
      
         


      

      
        10

        
          

        

      

      
         


      

    

    


    
      	
               
      

            	
              i.

            	
              to
      terminate this Agreement, have the first installment payment which has
      been paid to the Mutual Management Bank Account returned and require the
      Transferor to pay the Transferee RMB5,000,000.00Yuan as
      penalty.

            


    

    
      	
               
      

            	
              ii.

            	
              to
      delay the issuance of the written confirmation of the first installment
      payment release preconditions until all the items are satisfied and
      require the Transferor to pay the Transferee no less than RMB
      5,000,000.00Yuan as penalty.

            


    

    
      	
               
      

            	
              iii.

            	
              to
      be entitled to deduct the corresponding amount of the first installment
      payment according to how the first installment payment release
      preconditions are satisfied at its sole discretion. In the event that
      there are 2 or more than 2 deduction situation occurs, all the deduction
      situations will be applied.

            


    


    
      
         


      

      
        11

        
          

        

      

      
         


      

    

    


    
      	
               
      

            	
              iv.

            	
              Notwithstanding
      aforesaid, when the Transferee exercise its right set forth in item (i) to
      (iii) above-mentioned, the Transferee is entitled to decide at its sole
      discretion to waive any of its rights partially or
    entirely.

            


    

    Notwithstanding
the foregoing provided, if the Transferor intends to borrow some of the first
installment in the Mutual Management Bank Account, subject to the satisfaction
Supplementary Agreement for the Escrow Terms and Conditions for the First
Installment it is entitled to use 50% of frist installment and the Transferee
shall coordinate with it.

    
      	
            	
              4.2.2

            	
              The
      amount of the second installment is RMB65,000,000.00. After the
      satisfaction of the following payment preconditions, the Transferee shall
      make the second installment payment to the Transferor within 90 days
      (including the 90th
      day) after the Transferee released the first installment payment, provided,
      however, that the extension and grace period set forth later in this
      section shall apply:

            


    


    
      
         


      

      
        12

        
          

        

      

      
         


      

    


    
      (1)   In the
case that the Target Company holds less than 70% equity of any subsidiary
companies wholly-owned, controlled, equity affiliates of Target Company listed
in Annex II, the balance portion of the equity between the current shareholding
percentage and 70% has been transferred to the Target Company from one or more
than one non Target Company shareholder. Such equity transfer of the balance
portion shall be caused successfully by the Transferor and/or the Related Party
of Transferor. The corresponding alteration of AIC registration (the Transferee
and the Target Company shall provide the necessary assistance during the
procedure) shall be completed as well, namely, after the alteration of AIC
registration, the Target Company holds 70% equity of such company. For example,
the Target Company holds 60% equity of Chengde Dadi Gas Ltd., Co. (hereinafter
call “Chengde Company”) currently. The balance portion of equity is 10% equity
of Chengde Company. 10% equity of Chengde Company has been transferred to the
Target Company from one or more than one non Target Company shareholder. Such
equity transfer of 10% equity of Chengde Company shall be caused successfully by
the Transferor and/or the Related Party of Transferor. The corresponding
alteration of AIC registration (the Transferee and the Target Company shall
provide the necessary assistance during the procedure) shall be completed as
well, namely, after the alteration of AIC registration, the Target Company holds
70% equity of Chengde Company.

    

    
      (2)   The
Target Company has achieved the shareholding structure listed in Annex III. The
business scope of all the subsidiary companies wholly-owned, controlled of
Target Company listed in Annex III shall remain the same.;
and

    

    
      (3)   All the
materials submitted from the Transferor to the Transferee on the Delivery of the
transfer are true, accurate and sufficient and necessary and
complete;.

    


    
      
         


      

      
        13

        
          

        

      

      
         


      

    

    


    The
Transferor shall submit original certificates or documents on satisfaction of
above conditions after obtained. After the Transferee has received all the
certificates and documents, the Transferee shall issue a written confirmation
immediately. The day on which such written confirmation is issued is the
satisfaction day of such payment precondition. Notwithstanding aforesaid, the
Transferee shall issue the written confirmation when such certificates and
documents submitted by the Transferor are true, necessary and
sufficient.  Above-mentioned payment preconditions shall be satisfied
or fulfilled within 180 days after the Transferee release the first installment
payment. In the event that the Transferor failed to satisfy all the second
installment payment preconditions prior to the expiry of such time limit and the
Transferor submit a list in writing on the completion situation of the
preconditions (including all the completed items and uncompleted items) on the
expiration day of such time limit,, the Transferee agreed to provide a remedy
period for the Transferor, the preliminary remedy period are 15 days. During
such preliminary remedy period, the Transferor does not need to pay any penalty
for its failure on satisfaction of all the second installment payment
preconditions. In the event that the Transferor failed to satisfy all the second
installment payment preconditions prior to the expiry of such preliminary remedy
period, the Transferor is entitled to submit a written application on the
extension of the remedy period of which the Transferor shall state the reasons
of its failure to satisfy all the second installment payment preconditions. The
Transferee is entitled to decide whether such reasons are reasonable or not. If
not reasonable or the Transferor does not submit such extension application, the
remedy period will be expired on the expiration day of the preliminary remedy
period; if reasonable, the Transferee may provide a 15 days extension of the
remedy period (extension remedy period) for the Transferor, The remedy period
will be expired on the expiration day of the extension remedy period. During
such extension
remedy period, the Transferor need to pay 0.1% of the second payment per day as
the penalty to the Transferee until the Transferor satisfy all the second
installment payment preconditions,but in case that
the Transferor fails to satisfy all the second installment payment release
preconditions due to the liability of the Transferee, such penalty shall not
apply. In the event the Transferor is not able to satisfy all the second
installment payment preconditions prior the expiry of remedy period, the
Transferee is entitled to take any of the following action (except due to the
liability of the Transferee ):


    
      
         


      

      
        14

        
          

        

      

      
         


      

    

    


    
      	
               
      

            	
              i.

            	
              to
      terminate this Agreement, have the first installment payment which has
      been paid to the Mutual Management Bank Account returned and require the
      Transferor to pay the Transferee RMB5,000,000.00 Yuan as
      penalty.

            


    

    
      	
               
      

            	
              ii.

            	
              to
      delay the issuance of the written confirmation of the second installment
      payment release preconditions until all the items are satisfied and
      require the Transferor to pay the Transferee no less than
      RMB5,000,000.00Yuan as penalty.

            


    

    
      	
               
      

            	
              iii.

            	
              to
      be entitled to deduct the corresponding amount of the second installment
      payment according to how the second installment payment release
      preconditions are satisfied at its sole discretion. In the event that
      there are 2 or more than 2 deduction situation occurs, all the deduction
      situations will be applied.

            


    

    
      	
               
      

            	
              iv.

            	
              Notwithstanding
      aforesaid, when the Transferee exercise its right set forth in item (i) to
      (iii) above-mentioned, the Transferee is entitled to decide at its sole
      discretion to waive any of its rights partially or
    entirely.

            


    

    


    Notwithstanding
aforesaid, after the expiration day of the second installment payment, the
Transferor confirm that the Transferee is entitle to have a extension of 90 days
without any penalty. After such extension if the Transferee failed to pay the
agreed amount to the Transferor after such extention, the Transferee will be in
a 45 days grace period. After such grace period expired, if the transferee still
failed to pay the agreed amount in accordance with this Agreement, the
Transferee shall pay overdue penalties at the amount of 0.1% of the amount
payable of the second installment to the Transferors per day. However, that in
no event shall the penalty of the late payment of second installment payment be
greater than RMB 5,000,000.00Yuan.


    
      
         


      

      
        15

        
          

        

      

      
         


      

    

    


    
      	  	
              4.2.3

            	
              The
      amount of the third installment is RMB10,000,000.00. For the purpose of
      smoothly transition and stable operating of the Target Company, the third
      installment shall be considered as the reserved payment of this
      transaction and will be paid to the Transferor within 180 days (including
      the 180th
      day) after the Transferee paid the second installment payment under the
      condition that the Transferor are free of any liabilities of breach or
      compensation.

            


    

    
      	  	
              4.2.4

            	
              Notwithstanding
      aforesaid, both the Transferor and the Transferee agreed
    that:

            


    

    
      
        	
              	
                (i) 

              	
                Notwithstanding
      aforesaid, if the Transferee failed to pay the agreed amount to the
      Transferor in the mutual management bank account before the expiration day
      of the third installment payment, the Transferee will be in a 45 days
      grace period. After such grace period expired, if the transferee still
      failed to pay the agreed amount in accordance with this Agreement, the
      Transferee shall pay overdue penalties at the amount of 0.1% of the amount
      payable of the third installment to the Transferors per day. However, that
      in no event shall the penalty of the late payment of third installment
      payment be greater than RMB 500,000.00
Yuan.

              


      

    


    
      
         


      

      
        16

        
          

        

      

      
         


      

    


    
      
        	
              	
                (ii) 

              	
                The
      third installment payment shall be paid by the Transferee to a mutual
      management bank account opened under the name of the Transferor. Within 3
      years after the completion of the Transfer, in the event that the
      Transferor breaches any provisions of this Agreement, the Transferee is
      entitled to require to transfer the penalty in such mutual management bank
      account to the bank account appointed by the Transferee. If it is not
      sufficient, the Transferor shall pay the outstanding penalty to the
      Transferee immediately. In the event that the Transferor does not breach
      this Agreement or has already completed the remedy (including but not
      limited to payment of the penalty of breaching) of its breach of this
      Agreement, the Transferee shall withdraw its management of such mutual
      management bank account after the expiration of such period of 3 years. If
      this provision is conflict with PRC rules and regulations,PRC rules
      and regulations shall
prevail.

              


      

    

    
      	
              4.3

            	
              Notwithstanding
      the provisions on the payment period of Article 4.2.1 and Article 4.2.2,
      in the event there is less than 10 working days between a satisfaction day
      of payment preconditions and the corresponding expiration day of payment,
      the 10the working day after such satisfaction day of payment shall be
      deemed as the expiration day of such
payment.

            


    

    
      	
              4.4

            	
              The
      Transferor agree that when the Transferee makes payment to the Transferor,
      the Transferee is entitled to deduct any of the remaining payables
      confirmed by the parties (if any) owed by the Transferor on its own
      discretion without any prior consent of the
  Transferor.

            


    

    
      	
              4.5

            	
              The
      Transferee agrees that, except as otherwise provided in this Agreement,
      when making the payment of the consideration to the Transferor, the
      Transferee will make the payment to the bank account instructed by the
      Transferor. The Transferor agrees that, such payment following the
      Transferor’s payment instruction shall be considered as the payment to the
      Transferor.

            


    


    
      
         


      

      
        17

        
          

        

      

      
         


      

    


    
      	
              5.

            	
              Business
      Operation before the Completion

            


    

    
      	
              5.1

            	
              Both
      the Transferor and the Related Party of Transferor undertakes jointly and
      severally that theTarget Company and its related companies listed in Annex
      I and the shareholder’s meeting and the board of directors meeting of each
      company will procure that the business of each company respectively will
      be operated in a normal and prudent basis and in the ordinary course of
      day-to-day operations and, will not do or omit to do (or allow to be done)
      or to be omitted to be done any act or thing (in either case whether or
      not in the ordinary course of day-to-day operations) which is material and
      in particular (but without limiting the generality of the foregoing) the
      Transferor will procure that the Target Company and its related companies
      listed in Annex I shall NOT prior to Completion, without the prior written
      consent of the Transferee:

            


    

    
      
        	  	
                (1) 

              	
                issue or agree to issue any shares or loan
      capitals, or; offer or agree to offer or withdraw any option of purchase,
      or; amend any existing terms concerning the acquisition or subscription of
      the option or right of any shares or loan
      capital;

              


      

    

    
      
        	  	
                (2) 

              	
                make a loan or raise
      money;

              


      

    

    
      
        	  	
                (3) 

              	
                terminate any Agreements, arrangements or
      Agreements of great value, or; waive any rights of material
      value;

              


      

    

    
      
        	  	
                (4) 

              	
                create or permit to arise any mortgage, charge,
      lien, pledge, other form of security or encumbrance of equity of
      whatsoever nature, whether similar to the foregoing or not, on or in
      respect of any part of its undertaking, property or assets other than
      liens arising by operation of law in amounts which are not
      material;

              


      

    

    
      
        	  	
                (5) 

              	
                give any guarantee, indemnity, surety or security
      to any third
party;

              


      

    

    
      
        	  	
                (6) 

              	
                dispose or agree to dispose of or acquire or agree
      to acquire any material
asset;

              


      

    

    
      
        	  	
                (7) 

              	
                dispose
      of the ownership, possession, custody or control of any corporate or other
      books or records;

              


      

    


    
      
         


      

      
        18

        
          

        

      

      
         


      

    


    
      
        	  	
                (8)   

              	
                other
      than in the ordinary and usual course of its business, compromise, settle,
      release, discharge or compound any material civil, criminal, arbitration
      or other proceedings or any material liability, claim, action, demand or
      dispute or waive any right in relation to any of the
      foregoing;

              


      

    

    
      
        	 	
                (9)   

              	
                other
      than in the ordinary course of its business, release compromise or write
      off any material amount recorded in the books of account of the company as
      owing by any debtors of the
company;

              


      

    

    
      
        	 	
                (10) 

              	
                let
      or agree to let the company to transfer the possession or ownership of the
      whole or any part of the Property, or take on lease or assume possession
      of any real property;

              


      

    

    
      
        	 	
                (11) 

              	
                terminate
      any or allow to lapse any material insurance policy now in effect or
      defaulting under any provision
thereof;

              


      

    

    
      
        	 	
                (12) 

              	
                Cause
      any employees to terminate their
employment;

              


      

    

    
      
        	 	
                (13) 

              	
                Materially
      change the terms of any existing employment
  arrangements;

              


      

    

    
      
        	 	
                (14) 

              	
                Make
      any payments to the shareholders;
or

              


      

    

    
      
        	 	
                (15) 

              	
                Conduct
      any behaviors which will cause any change or effect which, individually or
      in the aggregate with all other such changes and effects, is materially
      adverse to the business or to the condition (financial or otherwise),
      assets, operations, financial condition, results of operations or
      prospects of the company, taken as a whole, or that would materially and
      adversely effect the ability of the company to conduct its business as
      regularly conducted.

              


      

    


    
      
         


      

      
        19

        
          

        

      

      
         


      

    


    
      	
              6.

            	
              Matters
      prior to Completion

            


    

    
      	
              6.1

            	
              Both
      the Transferor and the Related Party of Transferor jointly and severally
      confirms that, in order to enhance the work efficiency of the transaction,
      within 7 days after the execution of this Agreement, the Parties will
      designate personnel to form a transfer preparing working team
      respectively. The Parties shall coordinate to cause the working team
      perform its duty. The main duty of the working team includes: (1)
      coordinating and assisting the Transferee to complete the Delivery of the
      transfer; (2) ensuring the normal day-to-day operation of Target Company
      and Subsidiary Companies wholly-owned, controlled, equity affiliates of
      Target Company listed in Annex II before the delivery of transfer; (3) any
      other responsibilities agreed by the
Parties.

            


    

    
      	
              6.2

            	
              To
      ensure the steady handover, the Parties mutually agree to make the
      corresponding arrangement for the work during the period from the
      execution of this Agreement to
Completion.

            


    

    
      	
              6.3

            	
              The
      transfer preparing working team shall provide a list for the documents for
      the Transfer to the Target Company and Subsidiary Companies wholly-owned,
      controlled, equity affiliates of Target Company listed in Annex II and
      prepare all documents for the Transfer mentioned in Section
      7.4.

            


    

    


    
      	
              7.

            	
              Completion
      of the Transfer

            


    

    
      	
              7.1

            	
              The
      Parties agree that after all preparation work for the Transfer has been
      set forth in Section 6.3 of this Agreement has been completed they will
      establish a “transfer team” ("Transfer Team") jointly to deliver the
      Target Company (including the Target Company and subsidiary companies
      wholly-owned, controlled of Target Company listed in Annex II) within 3
      working days. The day when Transfer Team is established is the
      Commencement Day of Handover.

            


    

    
      	
              7.2

            	
              The
      Transferor shall prepare a list of transfer for the Transfer Team. The
      list shall show all the assets, corporate books required by the law,
      account books, documents, agreements, and contracts and so on of the
      Target Company and subsidiary companies wholly-owned, controlled of Target
      Company listed in Annex II.

            


    


    
      
         


      

      
        20

        
          

        

      

      
         


      

    

    


    
      	
              7.3

            	
              If
      the Transferor provide reports or data of the Target Company and
      subsidiary companies wholly-owned, controlled of Target Company listed in
      Annex II which are materially different from actual facts, the Transferor
      shall be considered as in breach of this Agreement, the Transferee is
      entitled to terminate this Agreement (whereupon Transferor will be
      entitled to a refund of the purchase price paid by the Transferor) and
      require the Transferor to compensate relevant damages and losses. The
      Transferee is entitled to decide to waive such rights partially or
      entirely at its sole discretion.

            


    

    
      	
              7.4

            	
              To
      facilitate the Completion of the Transfer, the Transferor shall submit the
      following documents to the
Transferee:

            


    

    
      
        	  	
                (1) 

              	
                Permits
      and approvals in writing for the alteration registration of equity
      transfer of the Target Company and subsidiary companies wholly-owned,
      controlled of Target Company listed in Annex II (if any) from Committees
      of Foreign Trade and Economic Cooperation and
  AIC;

              


      

    

    
      
        	 	
                (2) 

              	
                Certificates
      of ownership of the Transferred Equity (including register of shareholders
      of the Target Company and subsidiary companies wholly-owned, controlled of
      Target Company listed in Annex
II);

              


      

    

    
      
        	 	
                (3) 

              	
                Certificates
      or documents which proves that the Target Company and subsidiary companies
      wholly-owned, controlled of Target Company listed in Annex II have legally
      and validly owned the operation right of gas pipeline, the qualification
      of gas operation and the charging right of gas. The certificates or
      documents include but not limited to the agreement of operation right of
      gas pipeline entered into by and between the local government or authority
      of the local government, administrative permit of the qualification of gas
      enterprise, certificate of gas
charging.

              


      

    


    
      
         


      

      
        21

        
          

        

      

      
         


      

    

    


    
      
        	  	
                (4) 

              	
                The
      true, necessary and sufficient certificates or documents which proves that
      the Transferor has transferred all trademark, patent, know-how and other
      intangible asset right (if any) which is owned by third party but
      currently using by the Target Company and subsidiary companies
      wholly-owned, controlled of Target Company listed in Annex II from the
      owner to the Target Company.

              


      

    

    
      
        	 	
                (5) 

              	
                Letters
      of resignation from all the current directors, supervisors of the Target
      Company and subsidiary companies wholly-owned, controlled of Target
      Company listed in Annex II, in which confirm that none of them have
      involved corresponding Target Company or subsidiary companies
      wholly-owned, controlled of Target Company listed in Annex II respectively
      in any claims (no matter on the basis of the compensation for resignation
      or any other reasons). The resignation shall be effective upon the
      delivery day;

              


      

    

    
      
        	 	
                (6) 

              	
                Confirmation
      letters of senior management of the Target Company and subsidiary
      companies wholly-owned, controlled of Target Company listed in Annex II to
      confirm that none of the them have claims against the corresponding Target
      Company and subsidiary companies wholly-owned, controlled of Target
      Company listed in  Annex II respectively (no matter on the basis
      of the compensation for resignation or any other
  reasons);

              


      

    

    
      
        	 	
                (7) 

              	
                Certificates
      that prove property right alteration registration procedures concerning
      the selling and purchasing of Transferred Equity have been duly
      completed;

              


      

    

    
      
        	 	
                (8) 

              	
                Certificates
      that prove the authorization orders of existing bank accounts of all the
      Target Company and subsidiary companies wholly-owned, controlled of Target
      Company listed in Annex II have been rendered void and new authorization
      orders have been issued to personnel appointed by the
      Transferee;

              


      

    


    
      
         


      

      
        22

        
          

        

      

      
         


      

    

    


    
      
        	
              	
                (9)   

              	
                Certificates
      of ownership of the assets of all the Target Company and subsidiary
      companies wholly-owned, controlled of Target Company listed in Annex II;
      and

              


      

    

    
      
        	
              	
                (10) 

              	
                Certificates
      issued by the banks of the Target Company and subsidiary companies
      wholly-owned, controlled of Target Company listed in Annex II stating the
      amount of the debit or credit of such accounts at close of business on the
      day of Completion of the
Transfer.

              


      

    

    
      
        	
              	
                (11) 

              	
                In
      the circumstance that the Target Company and subsidiary companies
      wholly-owned, controlled of Target Company listed in Annex II do not have
      any instance where the situations set forth in item (1) - (10) are not
      applicable, the Transferor shall make statements as to the
      non-applicability of the item and shall guarantee in writing, and
      furthermore the Transferor shall undertake if there is any untrue and
      inaccurate in statement which cause the Transferee suffer damages hereof
      that the Transferor shall assume the responsibility of
      compensation.

              


      

    

    
      
        	
              	
                (12) 

              	
                Any
      other document or approval necessary to the completion fo the transfer of
      equity to the Transferee.

              


      

    

    
      	
              7.5

            	
              The
      Parties agree that the transfer shall be deemed to be completed on the day
      when the alteration registration of this Transfer in AIC and also the
      Transferee confirms that all works of delivery has completed and the
      Transferor have fulfilled its obligations under Section 7.4 and issues a
      written confirmation. Such day is the satisfaction day of Completion of
      the Transfer. Notwithstanding aforesaid, the Transferee shall not refuse
      to issue the written confirmation unreasonably when such certificates and
      documents submitted by the Transferor are true, necessary and
      sufficient.

            


    


    
      
         


      

      
        23

        
          

        

      

      
         


      

    

    


    
      	
              7.6

            	
              Both
      the Transferor and the Related Party of Transferor jointly and severally
      undertake and warrant that the net assets value of each Target Company and
      its related companies of the satisfaction day of Completion of the
      Transfer shall not be lower than its net assets value of December 31, 2009
      which was confirmed by the Transferee. Otherwise, the Transferor shall
      submit a explanation on why the net assets value drops in writing. The
      Transferee is entitled to decide whether such explanation from the
      Transferor is reasonable or not at its sole discretion. If the Transferee
      decides that such explanation is not reasonable, the Transferee is
      entitled to deduct the Consideration
  accordingly.

            


    

    


    
      	
              8.

            	
              Undertakings
      and Warranties

            


    

    
      	
              8.1

            	
              Both
      the Transferor and the Related Party of Transferor jointly and severally
      undertake and warrant that on the execution day of this
      Agreement:

            


    

    
      	  	
              8.1.1

            	
              The
      Transferor shall increase its equity holding of in the shortest duration
      at its best effort to reach the target of holding no less than 70% equity
      of the Target Company by purchasing the equity interest. After the
      completion of such equity purchase, the Transferor shall legally own 70%
      of the equity of the Target Company. Should any third Party claim any
      ownership or other interest in the aforesaid equity, the Transferor shall
      assume full responsibility and shall be liable to compensate the
      Transferee for any loss incurred
hereof.

            


    

    
      	 	
              8.1.2

            	
              Upon
      execution by the Parties, this Agreement will be binding upon the
      Transferor and the Related Party of the
  Transferor.

            


    

    
      	 	
              8.1.3

            	
              The
      Transferor and the Related Party of the Transferor will negotiate with the
      Transferee on matters concerning equity transfer not mentioned herein in
      accordance with PRC laws and regulations and relevant
      policies.

            


    


    
      
         


      

      
        24

        
          

        

      

      
         


      

    

    


    
      	
                

            	
              8.1.4

            	
              Both
      the Transferor and the Related Party of Transferor jointly and severally
      acknowledges that the Transferee is entering into this Agreement in
      reliance upon the accuracy of each of the
  Warranties.

            


    

    
      	 	
              8.1.5

            	
              Both
      the Transferor and the Related Party of Transferor jointly and severally
      undertakes that upon the execution of the Agreement, it will terminate any
      negotiation in connection with the equity transfer of the Target Company
      with any third Party except the Transferee and it will not carry out new
      negotiations in connection with the equity transfer of the Target Company
      with any third Party except the
Transferee.

            


    

    
      	 	
              8.1.6

            	
              The
      above-mentioned undertakings and warranties are made as of the execution
      day of the Agreement and shall survive after the Completion Day of the
      Agreement.

            


    

    
      	
              8.2

            	
              Both
      the Transferor and the Related Party of Transferor jointly and severally
      undertake and warrant that:

            


    

    8.2.1      The
Transferor and Related Party of the Transferor shall cause the Target Company to
set up a wholly-owned enterprise subsidiary – Zhuolu Dadi Municipal Engineering
Construction Technology Service Ltd. Co.. Simultaneously, Zhuolu Dadi Municipal
Engineering Construction Technology Service Ltd. Co. satisfies all the following
conditions:

    
      	
               
      

            	
              8.2.1.1

            	
                  Before
      October 15,2010 , owns all the receivable and payables, operation
      contracts and assets (including but not limited fixed assets) which are
      (A) booked in the financial statement upon December 31, 2009 confirmed by
      the Transferee of Shijiazhuang Branch of Beijing Dadi Gas Engineering Co.,
      Ltd., Yanqing Branch of Beijing Dadi Gas Engineering Co., Ltd., Baigou
      Branch of Beijing Dadi Gas Engineering Co., Ltd., Xian County Branch of
      Beijing Dadi Gas Engineering Co., Ltd., Huahua Port Branch of Beijing Dadi
      Gas Engineering Co., Ltd., Zhuolu Branch of Beijing Dadi Gas Engineering
      Co., Ltd. and Chengde Branch of Beijing Dadi Gas Engineering Co., Ltd..;
      and (B) occurred during the period from January 1, 2010 to the
      satisfaction day of Completion of the Transfer, instead of such branches
      respectively; and

            


    


    
      
         


      

      
        25

        
          

        

      

      
         


      

    

    


    
      
        	  	
                8.2.1.2

              	
                Apart
      from the credits and debts, operation contracts and assets (including but
      not limited fixed assets) set forth in item 8.1.2.2 aforesaid, does not
      own any other debts or potential
debts;

              


      

    

    
      	
            	
              8.2.2

            	
              The
      Transferred Equity shall not subject to any restriction under any laws and
      agreements beyond the ones stipulated expressly in this Agreement. Should
      any third Party produce effective evidence that the transfer by the
      Transferor is subject to any restriction under any laws and agreements,
      the Transferor shall assume full responsibility and shall be liable to
      compensate the Transferee for any loss incurred
  hereof.

            


    

    
      	
            	
              8.2.3

            	
              Upon
      the performance of this Agreement, the Transferred Equity purchased by the
      Transferee and its subsidiary rights and interests or those to be
      generated from the equity are free of any rights and interests of any
      third Party.

            


    

    
      	
            	
              8.2.4

            	
              Target
      Company and its related companies listed in Annex I are established and
      legally existing under the laws of
China.

            


    


    
      
         


      

      
        26

        
          

        

      

      
         


      

    


    
      	
            	
              8.2.5

            	
              Target
      Company and its related companies listed in Annex I own and have acquired
      all the effective authorization letters, licenses, approvals and permits
      to manage existing assets and carry out all the business operations
      (specified in Annex IV " The production and operation information of
      Target Company and its Related Companies"). The above-mentioned
      authorization letters, licenses, approvals and permits have been
      registered and recorded in relevant authorities in accordance with
      applicable laws and regulations. The Transferor shall explain for any
      exceptional case (if has) in advance and ensure to settle such
      case.

            


    

    
      	
            	
              8.2.6

            	
              Target
      Company and its related companies listed in Annex I have legally and
      validly owned the operation right of gas pipeline, the qualification of
      gas operation and the charging right of gas. The certificates or documents
      include but not limited to the agreement of operation right of gas
      pipeline entered into by and between the local government or authority of
      the local government, administrative permit of the qualification of gas
      enterprise, certificate of gas charging. The Transferor shall explain for
      any exceptional case (if has) in advance and ensure to settle such
      case.

            


    

    
      	
            	
              8.2.7

            	
              Target
      Company and its related companies listed in Annex I have completed the
      corresponding comprehensive acceptance inspection for the vaporizing
      station and completed pipeline (including but not limited to examination
      and filing procedures of Construction Bureau, Quality Supervision Bureau,
      Environmental Protection Bureau and Security Supervision Bureau) and
      obtain the acceptance inspection report for relevant authorities. The
      Transferor shall explain for any exceptional case (if has) in advance and
      ensure to settle such case;

            


    


    
      
         


      

      
        27

        
          

        

      

      
         


      

    


    
      	  	
              8.2.8

            	
              Except
      disclosure to the Transferee in writing, the assets of the Target Company
      and its related companies listed in Annex I are free of any guarantees or
      any right of third Party or any other limitations that might have adverse
      affect to the execution of rights concerning the above-mentioned assets or
      interests values. As of the execution day of the Agreement, nobody has
      executed or claimed to execute any rights that might have significantly
      adverse affect the conditions of the transferred assets, or raised any
      disputes directly or indirectly involving the transferred
      assets.

            


    

    
      	 	
              8.2.9

            	
              Except
      disclosure to the Transferee in writing, there exists no litigation,
      arbitration or administrative procedures involving any relevant
      enterprises or its Target Company and its related companies listed in
      Annex I.

            


    

    
      	 	
              8.2.10

            	
              Except
      explicit disclosure in Annex VI   Obligations Transfer
      List, the assets of the Target Company and its related companies listed in
      Annex I are free of any other loans to be paid or debts of any forms.
      Contingent liabilities or other liabilities of the Target Company and
      subsidiary companies wholly-owned, controlled of Target Company listed in
      Annex II before the completion which the Transferor HAS not disclosed in
      Annex VI (Obligations transfer list) of this Agreement shall be assumed by
      the Transferor and the Related Party of Transferor jointly and severally.
      If the corresponding Target Company or subsidiary companies wholly-owned,
      controlled of Target Company assumes or pays such liabilities in advance,
      the Transferor shall reinburse all the payments to the corresponding
      Target Company or subsidiary companies wholly-owned, controlled, equity
      affiliates of the Target Company within 5 working days after the
      occurrence of the payment.Further more, all intercompany accounts payable
      among or between subsidiaries of the Target Company and Subsidiary
      Companies wholly-owned, controlled of Target Company listed in Annex II
      and the affiliates of the Transferor and Related Party of Transferor were
      incurred in the ordinary course of each respective subsidiary’s business
      with the exception of those listed in Annex
      VI   Obligations Transfer List which shall be paid by the
      Transferor.

            


    


    
      
         


      

      
        28

        
          

        

      

      
         


      

    

    


    
      	  	
              8.2.11

            	
              There
      is no written notice, nor is the Transferor or the Related Party fo
      Transferor aware of the treat of any notice from creditors that will cause
      a mandatory disposal of assets of the Target Company and its related
      companies listed in Annex I.

            


    

    
      	 	
              8.2.12

            	
              as
      far as the Transferor’s knowledge (refer to the Transferor knows, or
      should know from making a diligent examination), no material adverse
      affect occurs or might occur on the basis of reasonable judgment to the
      existing business, finance or operation on the Target Company and its
      related companies listed in Annex
I.

            


    

    
      	 	
              8.2.13

            	
              The
      Assets Confirmation List (specified in Annex V) of the Target Company and
      its related companies listed in Annex I provided by Transferor to
      Transferee is true, accurate and
complete.

            


    

    
      	 	
              8.2.14

            	
              On
      the day of December 31, 2009,the Target Company and its related companies
      listed in Annex I have effective and tradable ownership for all the fixed
      assets stipulated in Assets Confirmation List, including but not limited
      to all the machines, constructions, on-going projects, gas pipeline, land
      and other fixed and current assets. Moreover, the Target Company will
      still have effective and tradable ownership in the above-mentioned assets
      and all the acquired assets upon the date of the Completion of the
      Transfer.

            


    

    
      	 	
              8.2.15

            	
              Major
      assets in operation of the Target Company and its related companies listed
      in Annex I shall be in good condition and comply with normal standards of
      gas industry after periodical and proper
  maintenance.

            


    

    

      
        
           


        

        
          29

          
            

          

        

        
           


        

      

    

    
       

      
        
          	
                	
                  8.2.16

                	
                  The
      operations (including but not limited to the operation of business
      involved in the business scope, financial, taxation, environment
      protection, labor and human resources, security manufaction, etc )of the
      Target Company and its related companies listed in Annex I have never gone
      against rules and regulations of China , never received any written notice
      from relevant management or public service department that indicates
      authorizations, licenses, approvals and permits awarded to the Target
      Company before have been revoked due to its delinquent behaviors and the
      revocation of the above-mentioned documents, compliance with relevant
      regulations or remedial measures adopted have made material adverse
      affects to the business operation of the Target Company and subsidiary
      companies wholly-owned, controlled of Target Company. Before the
      satisfaction day of Completion of the Transfer, none of the Target Company
      and Subsidiary Companies wholly-owned, controlled of Target Company listed
      in Annex II has any disputes or infringement of the legal interest of
      their employees respectively.

                


        

        
          	
                	
                  8.2.17

                	
                  All
      the employees who has the employment relationship with the Target Company
      and Subsidiary Companies wholly-owned, controlled of Target Company listed
      in Annex II have no dispute or claim against the corresponding Target
      Company and subsidiary companies wholly-owned, controlled of Target
      Company listed in  Annex II respectively (no matter on the basis
      of whatever reasons),otherwise
      the Transferor shall assume full responsibility and shall be liable to
      compensate the Transferee for any loss incurred
  hereof;

                


        

      

       

      
        
          
          

        

        
          30

          
            

          

        

        
          
          

        

      

       

      
        	  	
                8.2.18

              	
                The
      Obligations Transfer List (please refer to Annex VI) of the Target Company
      and its related companies listed in Annex I provided by Transferor to
      Transferee is true, accurate and
complete.

              


      

      
        	 	
                8.2.19

              	
                Before
      the delivery day, all the debts owed by the Target Company and its related
      companies listed in Annex I have been shown in the Debt Transfer List
      (specified in Annex VI).

              


      

      
        	 	
                8.2.20

              	
                Except
      for debts shown in the Debt Transfer List (please refer to Annex VI),
      there is no other debt owed by the Target Company and its related
      companies listed in Annex I before the Date of
  Completion.

              


      

      
        	 	
                8.2.21

              	
                If
      the Transferee has reasonable grounds to believe that a breach of any of
      the Warranties has occurred then the Transferor and the Related Party of
      the Transferor shall ensure that for a period of three (3) years after the
      date of Completion the Transferee and its advisers and representatives
      shall be given all facilities which they may reasonably request and in
      particular shall allow them full access to all accounting and other
      records of the Transferor in order that they might ascertain whether a
      breach of the Warranties has
occurred.

              


      


      
        
           


        

        
          31

          
            

          

        

        
           


        

      


      
        	  	
                8.2.22

              	
                Both
      the Transferor and the Related Party of Transferor jointly and severally
      undertakes that all the shareholders of Target Company and its related
      companies listed in Annex I other than Transferor or the Target Company
      (hereinafter referred to as "Non-Transferor Shareholders") shall
      completely cooperate with Transferor and obey the instructions of
      Transferor on the matters of this transaction (including but not limited
      to, waiver of right of first refusal, etc.), do not hold any substantive
      rights to control any Target Company and Subsidiary Companies
      wholly-owned, controlled of Target Company; to control or dispose of any
      assets or take action on behalf of any Target Company and Subsidiary
      Companies wholly-owned, controlled of Target Company; or to acquire a
      greater interest in any Target Company and Subsidiary Companies
      wholly-owned, controlled of Target Company with more preferred condition
      than Transferee.
      Further more; Non-Transferor Shareholders shall not cause any
      obstacles to the transaction and the transfer of equity will not trigger
      any additional rights for Non-Transferor shareholders that they do not
      currently possess.;

              


      

      
        	  	
                8.2.23

              	
                The
      above-mentioned undertakings and warranties are made as of the Completion
      Day of the Transfer and shall survive after the Completion Day of the
      Transfer.

              


      

      
        	
                8.3

              	
                Both
      the Transferor and the Related Party of Transferor jointly and severally
      undertake and warrant that after the completion of the
      Transfer:

              


      

      
        	
              	
                8.3.1

              	
                The
      books and records and personal with the knowledge necessary to complete
      the audit of the Target Company and the subsidiaries companies
      wholly-owned, controlled of Target Company listed in Annex II which audit
      is under US GAAP, are currently available to the Transferee and such
      materials and information shall remain available until the completion of
      the audit;

              


      

      
        	
              	
                8.3.2

              	
                The
      Transferor and the Related Party of Transferor shall
      endeavor  to give their reasonable efforts to assist the
      Transferee to cause the non-transferor shareholders of the Target Company
      and, subsidiaries companies wholly-owned, controlled of Target Company
      listed in Annex II to execute the template of joint venture agreement
      provided by the Transferor.

              


      


      
        
           


        

        
          32

          
            

          

        

        
           


        

      

      


      
        	
              	
                8.3.3

              	
                The
      Transferor and Related Party of the Transferor shall cause DADI GAS to
      cancel the registration of all the branches of DADI GAS mentioned in
      Section 8.2.1.1 immediately upon receiving the writing notice of request
      for such cancellation.

              


      

      
        	
              	
                8.3.4

              	
                Both
      the Transferor and the Related Party of Transferor jointly and severally
      undertakes that during the operation term of the Target Company and
      subsidiary companies wholly-owned, controlled, equity affiliates of Target
      Company, all the brand name which is currently using by the Target Company
      and its related companies listed in Annex I shall be continuously used for
      free until the company cancels its registration in
  AIC.

              


      

      
        	
              	
                8.3.5

              	
                Both
      the Transferor and the Related Party of Transferor jointly and severally
      undertakes, after the completion of the Transfer of equity, in the period
      that the Transferor still holds any equity of the Target Company and its
      related companies listed in Annex I and within 3 years after the
      Transferor does not hold such equity any more, the Transferor, the Related
      Party of the Transferor and the companies controlled by them shall NOT
      conduct the business of urban gas and NOT operate any business in
      connection with the gas construction in the area of the Target Company,
      any Subsidiary Companies wholly-owned, controlled of Target Company and
      projects planned and the area the Transferee operate and will operate, or
      hold any post in any company conducting the business of urban gas, or take
      any measures to affect any potential
      projects of Target Company and its related companies (including but not
      limited to any projects planned listed in Annex
  VII)..

              


      


      
        
           


        

        
          33

          
            

          

        

        
           


        

      

      


      
        	
              	
                8.3.6

              	
                Without
      the prior written consent of the Transferee, neither the Transferor nor
      the Related Party of Transferor or their affiliates shall not hire any
      employee who has the employment relationship with any of the Target
      Company and its related companies listed in Annex I on the execution day
      of this Agreement.

              


      

      
        	
                8.4

              	
                With
      regard to companies related the exceptional case which the Transferor
      point out subject to Section 8.2.7, the Transferor and Related Party of
      the Transferor undertakes that prior to the second installment they will
      make their best effort to assist such companies to obtain all necessary
      qualifications and certifications for the Target Company and its related
      companies conducting business in
      their locality. However, for Chengde Dadi Gas Ltd., Co. and Baigou Dadi
      Gas Ltd. Co. the Transferor may remedy the entire certificates within a
      certain period with the prior consent of the Transferee. If the Transferor
      and Related Party of the Transferor refuses to perform such assistant
      obligation, they will assume the liability set forth in Section
      9.7.

              


      

      
        	
                8.5

              	
                The
      Transferee undertakes and warrants
that:

              


      

      
        	  	
                8.5.1

              	
                The
      Transferee is a legal entity established and legally existing under the
      laws of P.R.C..

              


      

      
        	 	
                8.5.2

              	
                The
      Transferee will negotiate with the Transferor on matters concerning equity
      transfer not mentioned herein in accordance with PRC laws and regulations
      and relevant policies.

              


      


      
        
           


        

        
          34

          
            

          

        

        
           


        

      


      
        	
              	
                8.5.3

              	
                The
      Transferee shall be responsible for the above mentioned undertakings and
      warranties. If the Transferor have fulfilled its obligations under the
      Agreement, the Transferee shall also bear relevant obligations and pay
      Consideration to the Transferor as stipulated in this
      Agreement.

              


      

      
        	
              	
                8.5.4

              	
                The
      Transferee undertakes that the Transferee may consider offering, but shall
      have no obligation to offer the Related Party of the Transferor a proper
      position in Transferee upon the request of Related Party of Transferor.
      And for purpose successful delivery and smoothly transition the Transferee
      may consider offering the Senior Management of the Target Company , but
      shall have no obligation to offer, a proper position in
      Transferee.

              


      

      


      
        	
                9.

              	
                Liability
      for breach of the Agreement

              


      

      
        	
                9.1

              	
                In
      the event that there is any substantial omission, inaccuracy or
      misrepresentation in the documents or data submitted by the Transferor,
      the Agreement may be terminated by the Transferee. The Transferor shall
      take the liabilities of breaching and indemnify the Transferee for the
      damages for the breach thereof.

              


      

      
        	
                9.2

              	
                The
      Parties mutually agree that, unless otherwise provided under this
      Agreement, if a Party is in material breach of this Agreement ("breaching
      Party"), then the other Party (“observant Party”) has the right to
      terminate this Agreement according to the Contract Law of People's
      Republic of China and applicable judicatory interpretations and claims
      damages arising from the
breach.

              


      


      
        
           


        

        
          35

          
            

          

        

        
           


        

      


      
        	
                9.3

              	
                If
      the Transferor makes explanations for any exceptional case for
      undertakings and warranties in Section 8.2.5, Section 8.2.7, the
      Transferor shall settle such cases within the time limit approved by the
      Transferee. If failed to do so, the Transferee is entitle to choose any of
      following measures:

              


      

      
        
          	  	
                  9.3.1

                	
                  terminate
      this Agreement and require the Transferor to pay the Transferee
      RMB5,000,000.00 Yuan as
penalty.

                


        

      

      
        
          	 	
                  9.3.2

                	
                  deduct
      no less than RMB5,000,000.00 Yuan from payables of the
      Transferee.

                


        

      

      
        	
                9.4

              	
                The
      Parties confirm simultaneously that, if a Party is in breach of
      obligations with regard to the escrow terms and conditions (including but
      not limited to the escrow terms and conditions in this Agreement and any
      other agreement the parties agreed in connection with the escrow terms and
      conditions), the beaching party shall assume responsibility of breach in
      accordance with Supplementary Agreement for the Escrow Terms and
      Conditions for the First
Installment.

              


      

      
        	
                9.5

              	
                The
      Parties confirm simultaneously that, unless otherwise provided in this
      Agreement, if a Party is in breach of their undertakings, warranties and
      facts stated in the Section 8 under the Agreement,the
      observant Party has the right to terminate this Agreement and claim
      damages arising from the breach.

              


      

      
        	
                9.6

              	
                After
      Completion of the Transfer, the Transferor shall take positive measures to
      solve all disputes or debts caused by the operation of the Target Company
      before the Date of Completion, or unforeseeable disputes before the Date
      of Delivery. The Transferor shall compensate for the direct or indirect
      damages rising thereof.

              


      


      
        
           


        

        
          36

          
            

          

        

        
           


        

      

      


      
        	
                9.7

              	
                If
      the Transferor and Related Party of the Transferor refuses to fulfill
      their obligation under Section 8.4 of this Agreement, the Transferor are
      in breach of the Agreement and the Transferee has the right to exercise
      any of the following options:

              


      

      
        	
                9.7.1

              	
                to
      delay the subsequent payments to the Transferor
  or.

              


      

      
        
          	  	
                  A.

                	
                  Lack of exclusive operating agreement and not be
      able to remedy before the second installment, the Transferor shall
      compensate RMB2,000,000.00 per agreement to the
      Transferee;

                


        

      

      
        
          	 	
                  B.

                	
                  Lack
      of certificate of qualification on gas operating and not be able to remedy
      before the second installment, the Transferor shall compensate
      RMB2,000,000.00 per certificate to the
  Transferee;

                


        

      

      
        
          	 	
                  C.

                	
                  Lack
      of certificate of fee collection permit and not be able to remedy before
      the second installment, the Transferor shall compensate RMB2,000,000.00
      per certificate to the
Transferee;

                


        

      

      
        
          	 	
                  D.

                	
                  Lack
      of other certificate which is necessary for the regular operating of gas
      company before the second installment, the Transferor shall compensate
      RMB500,000.00 per certificate to the
Transferee.

                


        

      

      
        	
                9.7.2

              	
                to
      terminate this Agreement and claim damages rising
  thereof

              


      

      
        	
                9.7.3

              	
                For
      Chengde Dadi Gas Ltd., Co. and Baigou Dadi Gas Ltd., Co. Section 9.7 above
      shall not apply.

              


      


      
        
           


        

        
          37

          
            

          

        

        
           


        

      


      
        	
                9.8

              	
                Unless
      this Agreement is otherwise provided, if the Transferor have performed all
      the provisions of this Agreement strictly; however the Transferee
      unilaterally terminates by violating this Agreement, the Transferee shall
      compensate the Transferor for their direct damages rising
      hereby.

              


      

      
        	
                9.9

              	
                Unless
      otherwise provided under this Agreement, each Party shall not terminate
      this Agreement without the consent of the other Party; otherwise the
      termination party shall pay the other Party RMB 5,000,000.00Yuan as
      penalty.

              


      

      
        	
                9.10

              	
                The
      Parties agree that, under any of a situation or situations under Section
      10.2.3 to Section 10.2.9 of the Agreement, Transferee has the right to
      terminate this Agreement at its own discretion without taking any
      liability and has the right to request Transferor to pay it RMB
      5,000,000.00Yuan as penalty.

              


      

      
        	
                9.11

              	
                If,
      according to this Agreement, the Transferee does not make the second
      installment payment to the Transferor after the expiration of the grace
      period of second installment payment, the Transferee shall assist the
      Transferor to transfer 42% equity of the Target Company which is held by
      the Transferee to the Transferor ( after this transfer, the Transferee
      will possess 28% of the Target Company’s
  shares.)

              


      

      


      
        	
                10.

              	
                Termination of this
      Agreement

              


      

      


      The
Parties mutually agree that unless otherwise provided in this Agreement, this
Agreement shall be terminated only under following situations:


      
        
           


        

        
          38

          
            

          

        

        
           


        

      

      


      
        	
                10.1

              	
                This
      Agreement shall be terminated upon the consent of the
    Parties;

              


      

      
        	
                10.2

              	
                Transferee
      is entitle to terminate this Agreement at its own discretion under any of
      the following situations:

              


      

      
        	  	
                10.2.1

              	
                Transferee
      is unable to complete the transaction due to relevant policies and rules
      of the State;

              


      

      
        	 	
                10.2.2

              	
                Necessary governmental approvals are unable to
      obtain for this transaction (if necessary);

              


      

      
        	 	
                10.2.3

              	
                Transferee
      discovers that there are material defects of the Transferred Equity or
      Transferor and/or Non-Transferor Shareholders are unable to transfer the
      Targets of this transaction;

              


      

      
        	 	
                10.2.4

              	
                Transferee
      discovers that there is any conceal, omission or fraud in the documents or
      data submitted by Transferor in connection with the Target Company and
      Subsidiary Companies wholly-owned, controlled of Target Company listed in
      Annex II;

              


      

      
        	 	
                10.2.5

              	
                Transferee
      discovers that before the completion of the Transfer there are martial
      barriers for the Target Company and Subsidiary Companies wholly-owned,
      controlled of Target Company listed in Annex II which will result in
      disability for conducting their business in further 3
      years;

              


      


      
        
           


        

        
          39

          
            

          

        

        
           


        

      


      
        	  	
                10.2.6

              	
                Transferee
      discovers that Transferor fails to ensure the Work Group and the staff of
      Transferee to smoothly work together with relevant staff from the Target
      Company and Subsidiary Companies wholly-owned, controlled of Target
      Company listed in Annex II, which result in Transferee is unable to
      complete its prospective work requirements for continuous 5
      days;

              


      

      
        	 	
                10.2.7

              	
                Transferee
      discovers that Transferor consults or negotiates relevant issues in
      connection with the transfer of part and/or all Transferred Equity or
      signs relevant written documents with any third party other than
      Transferee;

              


      

      
        	 	
                10.2.8

              	
                Non-Transferor
      Shareholders fail to comply with the instructions of Transferor in
      connection with the transaction of the Target Company and Subsidiary
      Companies wholly-owned, controlled of Target Company listed in Annex II
      (including but not limited to the percentage of the transfer, the price of
      the transfer etc.), which results in any obstacle for such proposed
      transaction of Transferee by Non-Transferor Shareholders;or

              


      

      
        	 	
                10.2.9

              	
                The
      Transferor fails to complete or satisfy one or more Transferee’s payment
      and/or payment release preconditions within the time limit provided in
      this Agreement.

              


      

      
        	
                10.3

              	
                Unless
      otherwise provided under this Agreement, in the case when the Transferee
      terminate this Agreement pursuant to the provisions of this Agreement, the
      Transferee is entitled not only to claim the liabilities of breach against
      the breaching party, but also to require the Transferor to fully return
      any payment paid to the Transferor from the
  Transferee.

              


      

      
        	
                10.4

              	
                Transferor
      is entitle to terminate this Agreement at its own discretion under any of
      the following situations:

              


      


      
        
           


        

        
          40

          
            

          

        

        
           


        

      

      


      
        	  	
                10.4.1

              	
                On
      conditions that there is no freeze,
      distrain, pledge, mortgage, or other right limitations against the
      Transferred Equity, Transferor is unable to complete the transaction due
      to relevant policies and rules of the
State;

              


      

      
        	 	
                10.4.2

              	
                Necessary
      governmental approvals are unable to obtain for this transaction (if
      necessary).

              


      

      


      
        	
                11.

              	
                Assignment
      of this Agreement

              


      

      


      Both the
Transferor and the Related Party of Transferor jointly and severally agrees
that, before the second installment if Transferee may transfer its entire or
partial rights and/or obligations to any third party designated by Transferee
who is affiliated with Transferee with the consent of the Transferor and the
Related Party of the Transferor for such transfer; after the second installment
the Transferee may make such transfer without the consent of the Transferor and
the Related Party of the Transferor,but the Transferee will notify. Both the
Transferor and the Related Party of Transferor jointly and severally further
agrees that, such third Transferee aforesaid may be person, legal entity or
other economic organizations. Transferee has the right to designate one natural
person, legal entity or other economic organization or two or more natural
persons, legal entities or other economic organizations as such third Transferee
its own discretion.


      
        
           


        

        
          41

          
            

          

        

        
           


        

      


      
        	
                12.

              	
                Tax
      Issues

              


      

      
        	
                12.1

              	
                Unless
      otherwise provided under this Agreement, Transferee and Transferor shall
      bear relevant payable taxes and expenses in connection with the
      performance of this Agreement and this transaction respectively. If
      required by law, Transferee will withhold and remit tax when making
      payment (if any).

              


      

      
        	
                12.2

              	
                Before
      the completion of delivery, Transferor shall be in charge of the tax
      issues of the Target Company and its related companies listed in Annex I.
      After completion, in case of economic damages and losses arising hereof,
      Transferee has the right to claim for such damages and losses against
      Transferor.

              


      

      


      
        	
                13.

              	
                The
      Related Party of the Transferor undertakes that all the liabilities which
      shall be performed by the Transferor set forth in this Agreement shall be
      applicable to the Related Party of the Transferor as well. Further more,
      the Related Party of the Transferor will take joint guarantee liability
      for the liabilities which shall be performed by the Transferor set forth
      in this Agreement.

              


      


      
        
           


        

        
          42

          
            

          

        

        
           


        

      


      
        	
                14.

              	
                Force
      Majeure

              


      

       

      Neither
Party shall be prevented from failure of performance of any of its obligations
under this Agreement due to an event of Force Majeure outside the reasonable
control of that Party. The Party affected by such event of force majeure shall
notify the other Party immediately in convenient way, and shall no later than 15
days after the commencement of such event submit the documentary evidence
notarized by local notary organ to the other Party. The Parties shall negotiate
the way of dealing with the aftermath such event in time. Any delay in the
performance of any of the duties or obligations of either party shall not be
considered a breach of this Agreement, and the time required for performance
shall be extended for a period equal to the period of such delay, if such delay
has been caused by or is the result of acts of God; acts of public enemy;
insurrections; riots; injunctions; embargoes; labor disputes, including strikes,
lockouts, job actions, or boycotts; fires; explosions; earthquakes; floods;
shortages of energy; governmental prohibition or restriction; or other
unforeseeable causes beyond the reasonable control and without the fault or
negligence of the party so affected.  The party so affected shall
immediately notify the other party of such inability and of the period for which
such inability is expected to continue.  The party giving such notice
of a force majeure event, shall be excused from the performance, or the punctual
performance, of such obligations, as the case may be, from the date of such
notice, up to a maximum of nine (9) calendar months, after which time the party
who is not able to perform, may terminate this Agreement.  To the
extent possible, each party shall use reasonable efforts to minimize the
duration of any force majeure.

      


      
        	
                15.

              	
                Confidentiality

              


      

      Either
Party of this Agreement shall not disclose any information related to this
Agreement to any person、entity or company
during the term of the Agreement or five years after the expiration of the
Agreement, no matter the person、entity or company
has a competitive relationship with the other Party or not, except following
circumstances:

      (1) Such
disclosure is made in accordance with the governing laws or requested by the
competent government, justice authority;


      
        
           


        

        
          43

          
            

          

        

        
           


        

      

      


      (2) The
information has been publicized and such publicizing is not a result of any
breach or violation of a contract, agreement or other binding
documents;

      (3) The
Party of such disclosure has already obtained such Information without any
confidentiality limitation from other parties when it receives the Information
from the other Party;

      (4)
Disclose to the employees, directors, management, consult, CPA, agent and
representative of any party, or its affiliates and the employees, directors,
management, consultant, accounts, agent and representative of such
affiliates.

      


      In case
any Party is in breach of the provision of the confidentiality and causes the
other Party suffering from economic damages and losses, the breaching Party
shall assume relevant liabilities of such breach to the other Party. But the
information disclosed pursuant to the applicable law or compulsory requirements
of the court or any other authorities will not be applied.

      


      
        	
                16.

              	
                Notices

              


      

      
        	
                16.1

              	
                Any
      and all notices shall be delivered in writing, including by facsimile、letter、courier
      service delivered letter, and notices shall be deemed to have been
      delivered at the 7th
      days after the written notice delivered. The notifying date of unwritten
      notice (telephone or email, etc) shall be the date of written confirmation
      of the receiver.

              


      

      
        	
                16.2

              	
                Either
      Party may change its particulars for receipt of notices by notice given to
      the other Party within 3 days after such change. If the Party fails to
      notice the other party its changes on its particulars for receipt of
      notices, it shall take all legal liability for all results rising
      hereof.

              


      


      
        
           


        

        
          44

          
            

          

        

        
           


        

      

       

      If to the
Transferor, notices shall be delivered as follows:

       

      Addressee
:                              Position :                             

      Address :                                     Post
Code :                    

      Facsimile :                                    Email :                                                   

       

      If to the
Transferee, notices shall be delivered as follows:

      
        Addressee
:                              Position :                             

        Address :                                     Post
Code :                    

        Facsimile :                                    Email :                                                   

      

       

      If to the
Related Party of the Transferor, notices shall be delivered as
follows:

      
        Addressee
:                              Position :                             

        Address :                                     Post
Code :                    

        Facsimile :                                    Email :                                                   



      
        	
                16.3

              	
                All
      notices and relevant expenses under this Agreement shall be processed by
      either Party respectively in accordance with laws and regulations at their
      own cost.

              


      


      
        
           


        

        
          45

          
            

          

        

        
           


        

      


      
        	
                17.

              	
                Governing
      Law

              


      

      


      The
formation、validity、interpretation
and/or performance of this Agreement shall be governed by PRC LAWS.

      


      
        	
                18.

              	
                Settlement
      of Dispute

              


      

      


      Any
disputes arising from or in connection with this Agreement shall be settled
through friendly negotiation among the Parties. If the dispute cannot be
resolved by negotiation, then any Party may submit the dispute to China
International Economic and Trade Arbitration Committee located in Beijing for
arbitration according to and regulations in effect at the time of applying for
arbitration. The arbitration award shall be final and binding on all
parties.

      


      
        	
                19.

              	
                Severability

              


      

      


      Any
provision of the Agreement shall be deemed as severable. If any provision of the
Agreement is invalid, it shall not affect the validity of the rest of the
provisions of this Agreement.

      


      
        	
                20.

              	
                Non-waiver

              


      

      


      Either
Party's failure to insist the other Party on the performance of any provision of
the Agreement at any time shall not be deemed to waive such provision or waive
the right to request the other Party on execution of such provision in
future.

    

     

    
      
        
        

      

      
        46

        
          

        

      

      
        
        

      

    

     

    
      
        	
                21.

              	
                Transcript

              


      

      


      The
formal text of the Agreement shall be written in CHINESE. Any provision of such
Agreement shall be interpreted under the usual meaning of the words in the
Chinese version.

      


      
        	
                22.

              	
                Title
      and Subtitles

              


      

      


      All tile
and subtitles of the Agreement are in the convenience of the reference only and
shall not limit or affect any provision provided in the Agreement.

      


      
        	
                23.

              	
                Entire
      agreement

              


      

      
        	
                23.1

              	
                Entire
      Agreement of this transaction include this Agreement, General Framework
      Agreement for Corporation, Exclusive Option Agreement and Supplementary
      Agreement for the Escrow Terms and Conditions for the First Installment,
      as well as all ancillary agreements to each related to the subject of this
      Agreement and supersedes any and all previous written or oral agreements
      and/or memorandums concluded by any consultation relating to the subject
      of this agreement. Unless this agreement is otherwise provided expressly,
      any other condition, definition, guarantee or statement related to the
      subject of this agreement shall not be binding on the
    Parties.

              


      

    

     

    
      
        
        

      

      
        47

        
          

        

      

      
        
        

      

    

     

    
      
        	
                23.2

              	
                Any
      correction、amendment、replacing or
      modification of this Agreement shall be made in writing and shall be
      ascertained that it is relevant to the Agreement and shall be signed by
      the representatives or designated person(s) of the Parties of the
      Agreement.

              


      

      
        	
                23.3

              	
                Both
      the Transferor and the Transferee mutually agree that in the convenience
      of processing the procedure of the alteration registration related to the
      equity transfer hereof with the local industry and commercial bureau, both
      parties may enter into a simpler equity transfer agreement. The content of
      such simple equity transfer agreement shall not be controversial with this
      Agreement hereof. In case of any controversy, this Agreement shall
      prevail.

              


      

      


      
        	
                24.

              	
                This
      Agreement shall become into effective upon the execution of the Parties
      and the approval from the
government.

              


      

      


      
        	
                25.

              	
                This
      Agreement is executed in [6] counterparts. Each Transferor holds [2], the
      Transferee holds [2] and the Related Party of the Transferor holds
      [2].

              


      

       

      Annexes:

       

      Annex
I List of Target
Company and its Related Companies

       

      Annex II
The Shareholding Structure to be Achieved Prior the First Installment Payment
Release

    

     

    
      
        
        

      

      
        48

        
          

        

      

      
        
        

      

    

     

    
      Annex III
The Shareholding Structure to be Achieved Prior to the Second Installment
Payment

       

      Annex
IV   The production and operation information of Target Company
and its Related Companies

       

      Annex
V  Assets Confirmation List

       

      Annex
VI   Obligations Transfer List

       

      Annex VII
List of Projects Planned of Target Company and its Related
Companies

       

      Annex
VIII Financial Statements of Target Company and its Related
Companies

    

    

      
        
           


        

        
          49

          
            

          

        

        
           


        

      

    

    
      
         

        Notwithstanding
anything to the contrary contained above, the Annexes hereto shall be required
to be delivered as set forth in the chart below:
 


      
        
          
            
              	
                      Annexes

                    	 	
                      时间Delivery
      Date

                    
	 
      	 	 
      
	
                      1

                    	 	
                      Delivered

                    
	 
      	 	 
      
	
                      2

                    	 	
                      Delivered

                    
	 
      	 	 
      
	
                      3

                    	 	
                      Delivered

                    
	 
      	 	 
      
	
                      4

                    	 	
                      Within
      7 days after execution of this Agreement

                    
	 
      	 	 
      
	
                      5

                    	 	
                      Within
      7 days after execution of this Agreement

                    
	 
      	 	 
      
	
                      6

                    	 	
                      Within
      7 days after execution of this Agreement

                    
	 
      	 	 
      
	
                      7

                    	 	
                      Delivered

                    
	 
      	 	 
      
	
                      8

                    	 	
                      Within
      7 days after execution of this
Agreement

                    


            

          

        

      

       

       (This
page is blank below)


      
        
           


        

        
          50

          
            

          

        

        
           


        

      

       

      Signature
Page

      


      Transferor:

        Beijing
Fengyin Xianghe Scientific Technology Co., Ltd.

      


      Authorized
Representative:

      


      Transferee:

      China New
Energy Investment Co.,Ltd

      


      Authorized
Representative:

      


      Related
Party of theTransferor:

      Tang
Zhixiang (Singature):

      


      Date:


      
        
           


        

        
          51

          
            

          

        

        
           


        

      

       

      Annex
I List of Target Company and its Related Companies

      


      
        	
                 
      

              	
                1、Target
      Company: Zhuolu Dadi Gas Co. Ltd.

              


      

      


      
        	
                 
      

              	
                2、Related
      companies of Target Company
include:

              


      

      
        	
                 
      

              	
                (1)
      Xian County Dadi Gas Ltd., Co..

              


      

      
        	
                 
      

              	
                (2)
      Tianjin Dadi Gas Technology Development Ltd.,
  Co.

              


      

      
        	
                 
      

              	
                (3)
      Dadi Xingying Gas Ltd., Co.

              


      

      
        	
                 
      

              	
                (4)
      Shijiazhuang Dadi Gas Ltd., Co. ;

              


      

      
        	
                 
      

              	
                (5)
      Chengde Dadi Gas Ltd., Co. ; and

              


      

      
        	
                 
      

              	
                (6) Baigou Dadi
      Gas Ltd., Co. .

              


      

      
        	
                 
      

              	
                (7)
      Beijing Xiadu Dadi Gas Ltd., Co..

              


      

       

      
        
           


        

        
          52

          
            

          

        

        
           


        

      

      


      Annex
II The Shareholding Structure to be Achieved Prior the First Installment Payment
Release

      


      1、The Transferee
holds 70% equity of the Target Company, the Transferor holds 30% equity of the
Target Company.

      


      2、The wholly-owned
subsidiary companies of the Target Company include:

      (1)
Beijing Xiadu Dadi Gas Ltd., Co.;

      (2) Xian
County Dadi Gas Ltd., Co.; and

      (3)
Zhuolu Dadi municipal engineering Construction technology service Ltd.
Co..

      


      
        
          	
                  3、

                	
                  Name
      of Subsidiary Companies controlled by the Target Company and the equity
      proportion held by the Target Company
include:

                


        

      

      
        	
                 
      

              	
                (1)
      Tianjin Dadi Gas Technology Development Ltd., Co.
  (70%)

              


      

      
        	
                 
      

              	
                (2)
      Dadi Xingying Gas Ltd., Co. (80%)

              


      

      
        	
                 
      

              	
                (3)
      Shijiazhuang Dadi Gas Ltd., Co.
(80%);

              


      

      
        	
                 
      

              	
                (4)
      Chengde Dadi Gas Ltd., Co. (60%);
and

              


      

      
        	
                 
      

              	
                (5)
      Baigou Dadi Gas Ltd., Co. (80%).

              


      

       

      Annex
III The Shareholding Structure to be Achieved Prior to the Second Installment
Payment


      
        
           


        

        
          53

          
            

          

        

        
           


        

      

       

      1、 The Transferee
holds 70% equity of the Target Company, the Transferor holds 30% equity of the
Target Company.

      


      2、 The wholly-owned
subsidiary companies of the Target Company include:

      (1)
Beijing Xiadu Dadi Gas Ltd., Co.;

      (2) Xian
County Dadi Gas Ltd., Co.; and

      (3)
Zhuolu Dadi municipal engineering Construction technology
service  Ltd. Co..

       

      
        
          
            	
                    3、

                  	
                    Name
      of Subsidiary Companies controlled by the Target Company and the equity
      proportion held by the Target Company
include:

                  


          

        

      

      
        	
                 
      

              	
                (1)
      Tianjin Dadi Gas Technology Development Ltd., Co.
  (70%)

              


      

      
        	
                 
      

              	
                (2)
      Dadi Xingying Gas Ltd., Co. (80%)

              


      

      
        	
                 
      

              	
                (3)
      Shijiazhuang Dadi Gas Ltd., Co.
(80%);

              


      

      
        	
                 
      

              	
                (4)
      Chengde Dadi Gas Ltd., Co. (70%);
and

              


      

      
        	
                 
      

              	
                (5)
      Baigou Dadi Gas Ltd., Co. (80%).

              


      

       

      
        
           


        

        
          54

          
            

          

        

        
           


        

      

       

      Annex IV
The production and operation information of Target Company and its Related
Companies

       

      Part one
Basic Information of Target Company

      


      Business
License

      


      Business
License No.:

      Registration
No.:

      Issuing
Date:

      


      Address:

      


      Type
of Enterprise

      


      Registered
Capital

      


      Business
Scope:

      


      Business
Term:

      


      Board
of Directors:

      


      
        	
                Name

              	
                Designated
      by

              	
                Position

              


      


      
        
           


        

        
          55

          
            

          

        

        
           


        

      

      


      
        
          	
                  Board
      of Supervisors

                	 
      
	
                  Name

                	
                  Designated
      by

                


        

      

       

      
        
           


        

        
          56

          
            

          

        

        
           


        

      

      


      Part
2 Certificates and Licenses of Operations

       

      
        
           


        

        
          57

          
            

          

        

        
           


        

      

       

      Annex V
Assets Confirmation List

       

      
        
           


        

        
          58

          
            

          

        

        
           


        

      

       

      Annex VI
Obligations transfer list

       

      
        
           


        

        
          59

          
            

          

        

        
           


        

      

       

      Annex VII
List of Projects Planned of Target Company and its Related
Companies

      


      
        	
                1.

              	
                Qing
      County, located at Hebei Province

              


      

      


      
        	
                2.

              	
                Yangyuan
      County, located at Zhangjiakou City, Hebei
  Province

              


      

      


      
        	
                3.

              	
                Wuqiang
      County, located at the hinterland of Hebei
  Province

              


      

      


      
        	
                4.

              	
                Fucheng
      County, located at Northeast Hengshui City, Hebei
  Province

              


      

      


      
        	
                5.

              	
                Wuyi
      County, located at Northeast Hengshui City, Hebei
  Province

              


      

      


      
        	
                6.

              	
                Lingshou
      County, located at Central and Western Hebei
  Province

              


      

      


      
        	
                7.

              	
                Guyuan
      County, located at Northwest Hebei
Province

              


      

      


      
        	
                8.

              	
                Huailai
      County, located at Hebei Province

              


      

      


      
        	
                9.

              	
                Dongguang
      County, located at southern Cangzhou City, Hebei
  Province

              


      

      


      
        	
                10.

              	
                Xianxian
      is the franchise territories for gas operation controlled by our
      company.

              


      


      
        
           


        

        
          60

          
            

          

        

        
           


        

      

       

      Annex
VIII Financial Statements of Target Company and its Related
Companies


      
        
           


        

        
          61