**EXHIBIT
      10.1**




**WAIVER
      OF PENALTIES RELATED TO REGISTRATION RIGHTS**




This
      WAIVER OF PENALTIES RELATED TO REGISTRATION
      RIGHTS (“ **WAIVER** ”) is
      entered into as of this 29 th day of
      August, 2007 by and between a CHINA ARCHITECTURAL ENGINEERING, INC., a Delaware
      corporation (the “ **Company** ”),
      and
      the persons listed on the signature pages hereof (the “ **Investors** ”).
      Undefined terms herein shall have the meaning set forth in the Subscription
      Agreement, as defined below.




**RECITALS:**




WHEREAS,
      the Company and each of the Investors entered into that certain Subscription
      Agreement dated October 17, 2007 (“ **Subscription
      Agreement** ”)
      pursuant to which the Investors purchased securities of the Company;




WHEREAS,
      the Company, pursuant to Section 4 of the Subscription Agreement, agreed to
      use
      its reasonable best efforts to cause the Registration Statement to become
      effective within one hundred eighty (180) days after the Closing Date if the
      Registration Statement is subject to a full review by the SEC;




WHEREAS,
      the Subscription Agreement states that Company shall be required to pay, as
      liquidated damages, to each of the Subscriber a cash payment (the “ **Penalty
      Payment** ”)
      equal
      to a total of 0.0333% of the Purchase Price of the Shares sold to the Subscriber
      for each business day after the 180-day period has expired until the
      Registration Statement is declared effective by the SEC;




WHEREAS,
      Section 5.2 of the Subscription Agreement states that the terms of Section
      4 of
      the Subscription Agreement may be modified without the consent or approval
      of
      all of the Subscribers so long as (i) such modification applies in the same
      fashion to the Subscription Agreement of all of the Subscribers in the Offering
      and (ii) at least holders of a majority of the Shares sold in the Offering
      have
      given their approval of such modification, which approval shall be binding
      on
      all holders of Shares; and




WHEREAS,
      the undersigned Investors hold an aggregate number of Shares that is more than
      a
      majority of the Shares sold in the Offering and each of the undersigned
      Investors and the Company desire to modify Section 4 of the Subscription
      Agreement to waive any and all Penalty Payment, and any rights to any Penalty
      Payment, under the Subscription Agreement.




**AGREEMENT:**




NOW,
      THEREFORE, in consideration of the foregoing recitals and the mutual promises
      hereinafter set forth, the parties hereto agree as follows:




1.  Waiver
      of Penalty Payment .
      The
      Company and the undersigned Investors hereby agree to remove all references
      to
      the Penalty Payment from the Subscription Agreement, and each of the Investors
      hereby fully and irrevocably waive the Penalty Payment, any claim to payment
      of
      the Penalty Amount, whether or not owed, and any and all rights related
      thereto.




2.  Conflicts .
      To the
      extent there is any conflict between the terms of the Subscription Agreement
      and
      the terms hereof, the terms of this Waiver take precedence.




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3.  Confirmation
      of Subscription Agreement .
      The
      parties hereto hereby confirm that the Subscription Agreement, as amended by
      this Waiver, remains in full force and effect.




4.  Miscellaneous .
      This
      Waiver may be executed in any number of facsimile counterparts, each of which
      shall be an original, but which together constitute one and the same instrument.
      The parties expressly agree that all the terms and provisions hereof shall
      be
      construed in accordance with and governed by the laws of the State of
      Delaware.





[ *Signature
      Pages Follow* ]


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In
      Witness Whereof **,** the
      parties hereto have executed this Waiver as of the date set forth in the first
      paragraph hereof.




**CHINA
                  ARCHITECTURAL ENGINEERING, INC.**By: /s/ Ken Luo YiName:
                  Ken Luo Yi
                Title:
                  Chief Executive Officer




***Company
      Signature Page***




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In
      Witness Whereof **,** the
      parties hereto have executed this Waiver as of the date set forth in the first
      paragraph hereof.


**INVESTOR**Name
                  of Investor:Name
                  of Signatory:Title
                  of Signatory:Address:Telephone:Facsimile:




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