EMPLOYMENT
AGREEMENT

     

    This
EMPLOYMENT AGREEMENT (this “Agreement”) is
entered into as of May 11, 2009 by and between:

     

    (i)  China
New Energy Group Company, a Delaware corporation (the “Company”);
and

     

    (ii)
Yangkan Chong (the “Executive”), an
individual resident of the Republic of Singapore.

     

    RECITALS

     

    WHEREAS, the Company, through
its subsidiaries, is engaged in the development of natural gas distribution
networks, and the distribution of natural gas to residential, and industrial and
commercial customers in small and medium sized cities in China (the “Business”);
and

     

    WHEREAS,
Executive represents that he has the experience, background and expertise
necessary to enable him to be the Company’s Chief Executive Officer (“CEO”) and
to manage, grow and develop the Business; and

     

    WHEREAS,
based on such representation, the Company wishes to employ Executive as its CEO,
and Executive wishes to be so employed, in each case, upon the terms hereinafter
set forth;

     

    NOW THEREFORE, in
consideration of the foregoing recitals and the mutual covenants and promises
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby expressly acknowledged, the parties agree as
follows:

     

    
      	
              1. 

            	
              RETENTION AND
      DUTIES.

            


    

     

    
      	
              1.1

            	
              Position
      and Duties. During the Employment Period (as defined in Section 1.2
      below), the Executive shall serve the Company as its Chief Executive
      Officer and shall have such powers, duties and obligations consistent with
      such position as the Company’s board of directors (the “Board”) shall
      determine from time to time.  References to the Board herein
      with respect to any determination involving the Executive or his duties,
      shall be deemed to exclude the Executive if he is then a member of the
      Board.

            


    

     

    
      	
               
      

            	
              The
      Executive shall exercise due care as would a good business manager and
      faithfully and diligently perform his duties for the Company. The
      Executive shall comply with the policies, guidelines, standards, rules and
      procedures of the Company, and any additions or amendments thereto, as
      they are in effect from time to time during the Employment
      Period.  During the Employment Period, the Executive shall
      report directly to the Board.

            


    

     

    
      	
              1.2

            	
              Employment
      Period. Subject to earlier termination as provided in Section 3
      below, the Employment Period shall be a period of one year commencing on
      May 18, 2009 (the “Commencement
      Date”), provided that
      this Agreement shall be automatically renewed, and the Employment Period
      shall be automatically extended, for successive one-year terms unless
      either party gives written notice to the other party at least thirty (30)
      days prior to the expiration of this Agreement and the Employment Period
      (including any renewal and extension thereof) to terminate this Agreement
      or modify its terms (provision of such notice shall not be deemed to
      constitute a breach, or an earlier termination, of this
      Agreement).  The term “Employment Period” shall include any
      extension thereof pursuant to the preceding
  sentence.

            


    


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

     

    
      	
              1.3

            	
              Location.
      The Executive will be based in Tianjin, China.  The Executive
      acknowledges that he may be required to travel from time to time in
      accordance with the business requirements of the Company in the course of
      performing his duties for the
Company.

            


    

     

    
      	
              1.4

            	
              Company
      Group. Except with
      respect to the direct employment of the Executive by the Company, the term
      “Company” as used herein with respect to all obligations of the Executive
      hereunder shall be deemed to include the Company and all of its
      subsidiaries and affiliated entities (collectively, the “Company
      Group”).

            


    

     

    
      	
              1.5

            	
              Minimum
      Time Commitment. During the Employment Period, the Executive shall
      hold no employment outside the Company Group and shall devote
      substantially all of his business time, attention and skills to the
      performance of his duties for the Company. The The Executive hereby
      acknowledges that he shall not be entitled to any overtime pay as would
      employees who have standard working
hours.

            


    

     

    
      	
              1.6

            	
              Representations;
      No Breach of Contract or other Obligation. In addition to the
      representations contained in the Recitals above, Executive hereby
      represents to the Company that: (i) the execution and delivery of
      this Agreement by the Executive and the performance by the Executive of
      his duties hereunder shall not constitute a breach of, or otherwise
      contravene, the terms of any other agreement or policy to which the
      Executive is a party or otherwise bound; (ii) that the Executive has
      no information (including, without limitation, confidential information
      and trade secrets) relating to any other person or entity which would
      prevent, or be violated by, the Executive entering into this Agreement or
      carrying out his duties hereunder;  (iii) that the
      Executive is not bound by any confidentiality, trade secret or similar
      agreement with any other person or entity; and (iv) Executive is subject
      to no fiduciary or other obligation which may affect the performance of
      his duties hereunder.

            


    

     

    
      	
              2.

            	
              COMPENSATION AND
      BENEFITS.

            


    

     

    
      	
              2.1

            	
              Base
      Salary. The Executive’s gross base salary for the first twelve (12)
      months of the Employment Period shall be at annualized rate of US$144,000.
      The Board and/or its Compensation Committee shall review the Executive’s
      base salary every twelve (12) months and make appropriate adjustment, in
      its discretion.

            


    

     

    
      	
               
      

            	
              The
      base salary shall be paid in accordance with the Company’s regular payroll
      practices in effect from time to time, but not less frequently than in
      monthly installments.

            


    

     

    
      	
              2.2

            	
              Bonus
      and Other Incentives. During the Employment Period, the Executive
      will be eligible to receive bonuses and other incentive payments in
      accordance with the terms and conditions of any bonus or other incentive
      plans and programs as may be adopted by the Board from time to
      time.

            


    


    
      
         


      

      
        2

        
          

        

      

      
         


      

    

     

    
      	
              2.3

            	
              Reimbursement
      of Business Expenses. Executive hereby agrees that he shall, within
      thirty (30) days prior to then end of each calendar quarter, submit to the
      Board an expense budget for following calendar quarter.  The
      Executive will be eligible to receive reimbursement for all reasonable
      business expenses incurred by the Executive during the course of
      performing his duties for the Company under this Agreement which are set
      forth in the budget approved by the Board.  To the extent there
      are additional expenses, or expenses exceeding the amounts pre-approved by
      the Board, Executive shall seek further Board approval for such expenses
      to the extent they exceed $1,000.

            


    

     

    
      	
              2.4

            	
              Vacation
      and Other Leave.  During the Employment Period, the
      Executive shall be entitled to take paid vacation of three (3) weeks in
      each 12 month period taken at such times so as to not materially impede
      his duties hereunder.  The Executive shall also be entitled to
      all other holiday and leave pay generally available to the executive
      officers of the Company.

            


    

     

    
      	
              2.5

            	
              No
      Overtime Pay.  The
      Executive acknowledges that he shall perform his duties for the Company in
      a timely manner, that the compensation and benefits he will be entitled to
      receive pursuant to this Agreement will sufficiently compensate him for
      his services, and that he will not be entitled to receive any overtime
      pay.

            


    

     

    
      	
              3.

            	
              TERMINATION.

            


    

     

    
      	
              3.1

            	
              Termination
      by the Company. The Executive’s employment by the Company, and the
      Employment Period, may be terminated by the Company: (i) for Cause (as
      defined immediately below), (ii) with no less than thirty (30) days prior
      notice to the Executive, without Cause, (iii) in the event of the
      Executive’s death, or (iv) in the event that the Board determines in good
      faith that the Executive has a Disability (as defined immediately
      below).

            


    

     

    
      	
               
      

            	
              As
      used herein, “Cause” shall
      mean, as determined by a majority of the Board (excluding the Executive,
      if he is then a member of the Board), (i) any act of embezzlement,
      dishonesty or fraud taken by the Executive; (ii) the Executive’s
      conviction for a felony or conviction of any crime involving moral
      turpitude or that impairs the Executive’s ability to perform his duties;
      (iii) the Executive’s improper and material disclosure or use of the any
      confidential or proprietary information of the Company or any member of
      the Company Group; (iv) the Executive’s breach of any fiduciary duty to
      the Company,  (v) the Executive’s failure or refusal
      to  perform his duties which, if curable, remains uncured
      following thirty (30) days’ written notice to the Executive from the
      Company describing such failure or refusal; (vi) Executive’s performance
      of any action when specifically instructed not to do so by the Board,
      except where required by applicable law, regulation or rule; or (vii)
      Executive’s failure to perform any action when instructed to do so by the
      Board, except where prohibited by applicable law, regulation or
      rule.

            


    

     

    
      	
               
      

            	
              As
      used herein, “Disability”
      shall mean a physical or mental impairment which, as determined by the
      Board, renders the Executive unable to perform the essential functions of
      his employment with the Company, even with reasonable accommodation that
      does not impose an undue hardship on the Company, for more than 90 days in
      any twelve (12) month period, unless a longer period is required by
      applicable laws, in which case that longer period would
    apply.

            


    


    
      
         


      

      
        3

        
          

        

      

      
         


      

    

     

    
      	
              3.2

            	
              Termination
      by the Executive.  The Executive’s employment by the
      Company, and the Employment Period, may be terminated by the Executive
      with no less than thirty (30) days prior notice to the Company, provided that
      the Executive may provide immediate notice in the event of a Constructive
      Termination (as defined immediately below), if not cured within thirty
      (30) days after the occurrence
thereof.

            


    

     

    
      	
               
      

            	
              As
      used herein, “Constructive
      Termination” shall mean, without the Executive’s express written
      consent, (i) there is a material reduction in the Executive’s powers,
      duties and responsibilities, or (ii) there is a material reduction in the
      Executive’s base salary, opportunity for bonus and incentive payments, or
      overall benefits package.

            


    

     

    
      	
              3.3

            	
              Benefits
      upon termination. If the Executive’s employment by the Company is
      terminated during the Employment Period for any reason by the Company or
      by the Executive (in any case, the date that the Executive’s employment by
      the Company terminates is referred to as the “Severance
      Date”), the Company shall have no further obligation to make or
      provide to the Executive, and the Executive shall have no further right to
      receive or obtain from the Company, any payments or benefits except as
      follows:

            


    

     

    
      	
               
      

            	
              (a)

            	
              The
      Company shall pay the Executive (or, in the event of the Executive’s
      death, the Executive’s estate) any base salary, bonus and incentive
      payment that had accrued under this Agreement but had not been paid on or
      before the Severance Date, and any reimbursement due to the Executive
      under this Agreement for expenses incurred by the Executive on or before
      the Severance Date.

            


    

     

    
      	
               
      

            	
              (b)

            	
              If,
      during the Employment Period, the Executive’s employment with the Company
      is terminated as a result of a Constructive Termination or terminated by
      the Company without Cause, the Executive shall be entitled to receive an
      amount equal to fifty percent (50%) of the Executive’s annualized base
      salary as in effect on the Severance Date (the “Severance
      Benefit”).  The Company shall pay the Severance Benefit
      to the Executive in accordance with the Company’s regular payroll
      practices in effect from time to time, but not less frequently than in
      monthly installments.

            


    

     

    Notwithstanding
the foregoing provisions of this Section 3.3, if the Executive breaches his
obligations under Section 4 of this Agreement at any time, from and after the
date of such breach, the Executive shall no longer be entitled to, and the
Company shall no longer be obligated to pay, any remaining unpaid portion of the
Severance Benefits.

     

    The
foregoing provisions of this Section 3.3 shall not affect the Executive’s
receipt of benefits otherwise due terminated employees consistent with the terms
of applicable benefit plans or programs of the Company or applicable
laws.

     

    
      	
              3.4

            	
              Notice
      of termination.  Any termination of the Executive’s
      employment under this Agreement shall be communicated by written notice of
      termination from the terminating party to the other party. The notice of
      termination shall indicate the specific provision(s) of this Agreement
      relied upon in effecting the
termination.

            


    


    
      
         


      

      
        4

        
          

        

      

      
         


      

    

     

    
      
        	
                3.5

              	
                Resignation from the
      Board.       Executive
      hereby agrees that any termination of this Agreement shall also constitute
      submission to the Board of Executive’s resignation from the Board, if the
      Executive is a member of the Board at such
time.

              


      

    

     

    
      	
              4.

            	
              CONFIDENTIALITY;
      NON-COMPETITION;
NON-SOLICITATION.

            


    

    


    
      	
              4.1

            	
              Executive’s
      acknowledgment.  The Executive agrees and acknowledges
      that in order to assure the Company that it will retain its value as a
      going concern, it is necessary that the Executive undertakes not to
      utilize his special knowledge of the Business and his relationships with
      persons and entities in the Business and  relationships with
      customers and suppliers to compete with the Company.  The
      Executive further acknowledges that: (i) the Company is and will be
      engaged in the Business; (ii) the Executive has occupied a position of
      trust and confidence with the Company prior to the date of this Agreement
      and, during such period the Executive has, and during the term of this
      Agreement the Executive will, become familiar with the Company’s trade
      secrets and with other proprietary and confidential information concerning
      the Company and the Business; (iii) the agreements and covenants contained
      in this Section 4 are essential to protect the Company and the goodwill of
      the Business; and (iv) the Executive’s employment with the Company has
      special, unique and extraordinary value to the Company and the Company
      would suffer irreparable harm, for which money damages would not
      constitute adequate compensation, if the Executive were to provide
      services to any person or entity in violation of the provisions of this
      Agreement or otherwise violate any of the terms of this Section
      4.

            


    

    


    
      	
              4.2

            	
              Competitive
      activities.  The
      Executive hereby agrees that for a period (the “Restricted Period”)
      commencing on the date hereof and ending two years following the
      termination of the Executive’s employment with the Company for whatever
      reason, the Executive shall not, on behalf of himself or any other
      individual or group of individuals, firm, company, corporation,
      partnership, trust or other entity or enterprise or successor in interest
      to any of the foregoing, or any employee, partner, officer, director,
      partner, or stockholder of any of the foregoing, directly or indirectly,
      as an employee, proprietor, stockholder, partner, consultant, or
      otherwise, engage in any business or activity directly competitive with
      the Business or any of the business activities of the Company as they are
      now, currently proposed to be, or are, at the time in question, undertaken
      by the Company, anywhere in the territory of North America or China (the
      “Territory”), except as expressly approved by the Board in
      writing.  With respect to the Territory, the Executive
      specifically acknowledges that the Company has conducted the Business
      throughout those areas comprising the Territory and the Company intends to
      continue to expand the Business throughout the
  Territory.

            


    

    


    
      	
              4.3

            	
              Blue-pencil.  If any
      court of competent jurisdiction shall at any time deem the term of this
      Agreement or any particular covenant contained in this Section 4,
      including, without limitation, the Restricted Period, to be too lengthy or
      the Territory to be too extensive, the other provisions of this Section 4
      shall nevertheless stand, the Restricted Period shall be deemed to be the
      longest period permissible by law under the circumstances and the
      Territory shall be deemed to comprise the largest territory permissible by
      law under the circumstances.  The court in each case shall
      reduce the Restricted Period and/or the Territory to permissible duration
      or size.

            


    


    
      
         


      

      
        5

        
          

        

      

      
         


      

    

    


    
      	
              4.4

            	
              Confidential
      information.  During the
      term of this Agreement and for a period of three (3) years thereafter, the
      Executive shall keep secret and retain in strictest confidence, and shall
      not, without the prior written consent of the Board, furnish, make
      available or disclose to any third party or use for the benefit of himself
      or any third party, any Confidential Information.  As used in
      this Section 4.4, the term “Confidential Information” shall mean any
      information relating to the business or affairs of the Company or the
      Business, including, but not limited to, information relating to financial
      statements, customer identities, potential customers, employees,
      suppliers, servicing methods, equipment, programs, strategies and
      information, analyses, profit margins or other proprietary information
      used by the Company in connection with the Business; provided, however,
      that Confidential Information shall not include any information which is
      the public domain, becomes generally known in the industry through no
      wrongful act on the part of the Executive or as required to be disclosed
      by a court of competent jurisdiction.  The Executive
      acknowledges that the Confidential Information is vital, sensitive,
      confidential and proprietary to the
Company.

            


    

    


    
      	
              5.

            	
              Inventions
      and other intellectual property.  The
      Executive hereby agrees that all right, title and interest in and to all
      of the Executive’s “Creations” and work product made during the term of
      the Executive’s employment with the Company, whether pursuant to this
      Agreement or otherwise, shall belong solely to the Company, whether or not
      they are protected or protectable under applicable patent, trademark,
      service mark, copyright or trade secret laws.  For purposes of
      this Section 5, the term “Creations” shall mean all inventions, designs,
      discoveries, books, newsletters, manuscripts, articles, research,
      compilations, improvements, and other works which are or may be
      copyrighted, trade-marked or patented or otherwise constitute works of
      intellectual property which may be protected (including, without
      limitation, any information relating to the Company’s software products,
      source code, know-how, processes, designs, algorithms, computer programs
      and routines, formulae, techniques, developments or experimental work,
      works-in-progress, or business trade secrets whether now existing, or
      hereafter developed during the term of this Agreement) made or conceived
      or reduced to practice by the Company.  The Executive agrees
      that all work or other material containing or reflecting any such
      Creations shall be deemed work made for hire as defined in Section 101 of
      the Copyright Act, 15 U.S.C. Section 101.  If a court of
      competent jurisdiction determines that any such works are not works made
      for hire, the Executive hereby assigns to the Company all of the
      Executive’s right, title and interest, including all rights of copyright,
      patent, and other intellectual property rights, to or in such
      Creations.

            


    

     

    The
Executive covenants that he shall keep the Company informed of the development
of all Creations made, conceived or reduced to practice by the Company, in whole
or in part, by the Executive or any other alone or with others, which either
result from any work the Executive may do for, or at the request of, the
Company, or are related to the Company’s present or contemplated activities,
investigations, or obligations.  The Executive further agrees that (i)
at the Company’s request and expense, he will execute any assignments or any
other documents or instruments necessary to transfer all rights any such
Creations to the Company and (ii) he will cooperate with the Company or its
nominee in perfecting the Company’s title (or the title of the Company’s
nominee) in any or all such materials.


    
      
         


      

      
        6

        
          

        

      

      
         


      

    

     

    
      
        	
                6.

              	
                 INTERFERENCE WITH
      RELATIONSHIPS.

              


      

    

     

    
      	
              6.1

            	
              Suppliers,
      customers, service providers. During the Restricted Period, the
      Executive shall not, directly or indirectly, as employee, agent,
      consultant, stockholder, director, partner or in any other individual or
      representative capacity intentionally solicit or encourage any present or
      future customer, employee, consultant, service provider, stockholder,
      officer, director or supplier of or service provider to the Company to
      terminate or otherwise alter his, their or its relationship with the
      Company in a manner having an adverse effect on the Company or the
      Business.

            


    

     

    
      
        	
                6.2

              	
                Employees.
      During
      the Restricted Period, the Executive shall not, directly or indirectly, as
      employee, agent, consultant, stockholder, director, partner or in any
      other individual or representative capacity intentionally solicit or
      encourage any employee, consultant or agent of the Company to terminate,
      modify or cancel their relationship with the Company or to enter into a
      relationship with another company in the
  Business.

              


      

    

     

    
      	
              7.

            	
              RETURN
      OF COMPANY MATERIALS UPON TERMINATION.  The Executive
      acknowledges that all price lists, sales manuals, catalogs, binders,
      customer lists and other customer information, supplier lists, financial
      information, business plans, corporate records, working notes, work
      product, sales manuals, catalogs, binders and other records or documents
      containing any Confidential Information prepared by the Executive or
      coming into the Executive’s possession by virtue of the Executive’s
      employment by the Company, other than personal information belonging to
      the Executive, is and shall remain the property of the Company and that
      immediately upon termination of the Executive’s employment hereunder, the
      Executive shall return all such items in his possession, together with all
      copies thereof, to the Company.

            


    

    


    
      	
              8.

            	
              INDEMNIFICATION.  The Company
      hereby covenants and agrees to indemnify and hold harmless the Executive
      fully, completely, and absolutely against and in respect to any and all
      actions, suits, proceedings, claims, demands, judgments, costs, expenses
      (including attorney's fees), losses, and damages resulting from the
      Executive's good faith performance of his duties and obligations under the
      terms of this Agreement, subject to compliance with any applicable
      requirements and limitations improved by the memorandum and articles of
      association of the Company as in effect on the date hereof and applicable
      law.

            


    

     

    
      	
              9.

            	
              WITHHOLDING
      OBLIGATIONS. Notwithstanding anything to the contrary, the Company
      may withhold (or cause there to be withheld, as the case may be) from any
      amounts otherwise due or payable under or pursuant to this Agreement such
      national, provincial, local or any other income, employment or other
      taxes, and such portion of social insurance, medical insurance and housing
      provident fund, as may be required to be withheld pursuant to any
      applicable laws or regulations.

            


    


    
      
         


      

      
        7

        
          

        

      

      
         


      

    

     

    
      	
              10.

            	
              ASSIGNMENT.  This
      Agreement is personal in its nature and neither of the parties hereto
      shall, without the written consent of the other, assign or transfer this
      Agreement or any rights or obligations hereunder; provided,
      however, that (i) the Company may assign or transfer this Agreement
      or any rights or obligations hereunder to any member of the Company Group
      without such consent, and (ii) in the event of a merger,
      consolidation, or transfer or sale of all or substantially all of the
      assets of the Company with or to any other entities or individuals, this
      Agreement shall, subject to the provisions hereof, be binding upon and
      inure to the benefit of such successor and such successor shall discharge
      and perform all the promises, covenants, duties, and obligations of the
      Company hereunder.

            


    

     

    
      	
              11.

            	
              SEVERABILITY.  If
      any provision of this Agreement or the application thereof is held
      invalid, the invalidity shall not affect other provisions or applications
      of this Agreement which can be given effect without the invalid provisions
      or applications and to this end the provisions of this Agreement are
      declared to be severable.

            


    

     

    
      	
              12.

            	
              ENTIRE
      AGREEMENT. This Agreement (including the provisions incorporated
      herein by reference) constitutes the entire agreement and understanding
      between the Executive and the Company regarding the terms of the
      Executive’s employment by the Company and supersedes all prior or
      contemporaneous oral or written agreements concerning such subject matter.
      The Executive acknowledges that he has not entered into this Agreement in
      reliance upon any representation, warranty or undertaking which is not set
      forth in this Agreement.

            


    

     

    
      	
              13.

            	
              AMENDMENT.
      This Agreement may not be amended, modified or changed (in whole or in
      part), except by a formal, definitive written agreement expressly
      referring to this Agreement, which agreement is executed by both of the
      parties hereto.

            


    

    


    
      	
              14.

            	
              DISPUTE
      RESOLUTION. Both the Executive or the Company shall  have
      any dispute or controversy arising under or in connection with this
      Agreement settled by arbitration, by providing written notice of such
      election to the other party hereto, specifying the nature of the dispute
      to be arbitrated.  Such arbitration shall be held before a panel
      of three (3) arbitrators at the American Arbitration Association in New
      York and pursuant to its Commercial Arbitration Rules then in
      effect.  Judgment may be entered on the award of the arbitrators
      in any court having competent
jurisdiction.

            


    

     

    
      	
               
      

            	
              The
      prevailing  party in any litigation or arbitration seeking to
      enforce the provisions of this Agreement shall be entitled to
      reimbursement from the other party of all expenses of such litigation or
      arbitration, including the reasonable fees and expenses of its legal
      representative and necessary costs and disbursements incurred as a result
      of such dispute or legal
proceeding.

            


    

     

    
      	
              15.

            	
              WAIVER.  Neither
      the failure nor any delay on the part of a party to exercise any right,
      remedy, power or privilege under this Agreement shall operate as a waiver
      thereof, nor shall any single or partial exercise of any right, remedy,
      power or privilege preclude any other or further exercise of the same, nor
      shall any waiver of any right, remedy, power or privilege with respect to
      any occurrence be construed as a waiver of such right, remedy, power or
      privilege with respect to any other occurrence. No waiver shall be
      effective unless it is in writing and is signed by the party asserted to
      have granted such waiver.

            


    

     

    
      	
              16.

            	
              NOTICES.
      All notices, requests, demands and other communications required or
      permitted under this Agreement shall be in writing and shall be deemed to
      have been duly given and made if (i) delivered by hand,
      (ii) otherwise delivered against receipt therefor, or (iii) sent
      by a recognized courier to the last known address of the other
      party.

            


    


    
      
         


      

      
        8

        
          

        

      

      
         


      

    

     

    
      	
              17.

            	
              COUNTERPARTS.
      This Agreement may be executed in one or more counterparts, each of which
      shall be deemed an original, and all of which together shall constitute
      one and the same instrument. This Agreement shall become binding when one
      or more counterparts hereof, individually or taken together, shall bear
      the signatures of both parties. Photographic copies of such signed
      counterparts may be used in lieu of the originals for any
      purpose.

            


    

     

    
      	
              18.

            	
              NO
      INTERPRETATION AGAINST DRAFTER. Each party recognizes that this
      Agreement is a legally binding agreement and acknowledges that it or he
      has had the opportunity to consult with legal counsel of choice. In any
      construction of the terms of this Agreement, the same shall not be
      construed against either party on the basis of that party being the
      drafter of such terms.

            


    

     

    
      	
              19.

            	
              GOVERNING
      LAW.  To the
      extent not preempted by U.S. federal law, the provisions of this Agreement
      shall be construed and enforced in accordance with the internal,
      substantive laws of the State of New York, without regards to the
      principles of conflicts of laws
thereof.

            


    

     

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    IN WITNESS WHEREOF, this Agreement has
been executed as of the date first written above.

     

    
      
        	
                China
      New Energy Group

                Company

              
	 
      	 
      
	
                By:

              	 
      
	
                Name:

              	
                John
      D. Kuhns

              
	
                Title:

              	
                Director

              
	 
      
	
                Executive

              
	 
      	 
      
	
                Signature:

              	 
      
	
                Name:

              	
                Yangkan
      Chong

              


      

    

     

    
      
         


      

      
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