Unassociated Document


    [English
Translation]


    Agreement
for Equity Transfer in Qinhuangdao Chensheng Gas Co.Ltd

    


    Party A: Mr. Xu Chen, Mr. Du
Guang Shi, Mr. Zhang Qi Wen, Mr. Sun Wei Dong, Mr. Wei Zhen Hua, Ms. Liu Jian,
Mr. Zhao Yu Lin, Mr. Zhang Gong Min, Mr. Cheng Ling, Mr. Zhang Guo Qing, Mr.
Wang Yi Jun, Mr. Gong Jin He, Ms. Zhang Xiao Hua, Ms. Xu Xiao Ying, Ms. Zhang
Xiao Hai, Mr. Ma Bin, Ms. Sun Ying (collectively “Party A”)

    


    Party B: China New Energy
Group Company (“Party B”)

    


     Under the relevant rules and
provisions of the Company Law of the People’s Republic of China and Contract Law
of the People’s Republic of China, the both parties hereto mutually agree as
follows on the transfer to Party B of the 51% equity in Qinhuangdao Chensheng
Gas Co.Ltd (“Chensheng Gas”):

    


    Subject
Matter of the Transfer

    
      	
              1.

            	
              The
      transferred equity under this agreement is the 51% equity of Qinhuangdao
      Chensheng Gas Co., Ltd, held by Party A, and the detail of the transferred
      51% equity is as follows:

            


    

    Mr. Xu
Chen agrees to transfer the 13.3% equity of Chensheng Gas, held legally by him,
to Party B.

    Mr. Du
Guang Shi agrees to transfer the 10% equity of Chensheng Gas, held legally by
him, to Party B.

    Mr. Zhang
Qi Wen agrees to transfer the 8% equity of Chensheng Gas, held legally by him,
to Party B.

    Mr. Sun
Wei Dong agrees to transfer the 7.67% equity of Chensheng Gas, held legally by
him, to Party B.

    Mr. Wei
Zhen Hua agrees to transfer the 3.33% equity of Chensheng Gas, held legally by
him, to Party B.

    Ms. Liu
Jian agrees to transfer the 3.33% equity of Chensheng Gas, held legally by her,
to Party B.

    Mr. Zhao
Yu Lin agrees to transfer the 1.67% equity of Chensheng Gas, held legally by
him, to Party B.

    Mr. Zhang
Gong Min agrees to transfer the 0.67% equity of Chensheng Gas, held legally by
him, to Party B.

    Mr. Cheng
Ling agrees to transfer the 0.33% equity of Chensheng Gas, held legally by him,
to Party B.

    Mr. Zhang
Guo Qing agrees to transfer the 0.33% equity of Chensheng Gas, held legally by
him, to Party B.

    Mr. Wang
Yi Jun agrees to transfer the 0.33% equity of Chensheng Gas, held legally by
him, to Party B.

    Mr. Gong
Jin He agrees to transfer the 0.33% equity of Chensheng Gas, held legally by
him, to Party B.

    Ms. Zhang
Xiao Hua agrees to transfer the 0.33% equity of Chensheng Gas, held legally by
her, to Party B.


    
      
         


      

      
         


        
          

        

      

      
         


        
          [English
Translation]

        

      

    


    


    Ms. Xu
Xiao Ying agrees to transfer the 0.33% equity of Chensheng Gas, held legally by
her, to Party B.

    Ms. Zhang
Xiao Hai agrees to transfer the 0.33% equity of Chensheng Gas, held legally by
her, to Party B.

    Mr. Ma
Bin agrees to transfer the 0.33% equity of Chensheng Gas, held legally by him,
to Party B.

    Ms. Sun
Ying agrees to transfer the 0.33% equity of Chensheng Gas, held legally by him,
to Party B.

    


    
      	
              2.

            	
              Party
      B agrees to accept the 51% equity of Chensheng Gas, legally held by Party
      A, the detail of the transferred equity is as
  follows:

            


    

    Party B
agrees to accept the 13.33% equity of Chensheng Gas, legally held by Mr. Xu
Chen.

    Party B
agrees to accept the 10% equity of Chensheng Gas, legally held by Mr. Du Guang
Shi.

    Party B
agrees to accept the 8% equity of Chensheng Gas, legally held by Mr. Zhang Qi
Wen.

    Party B
agrees to accept the 7.67% equity of Chensheng Gas, legally held by Mr. Sun Wei
Dong.

    Party B
agrees to accept the 3.33% equity of Chensheng Gas, legally held by Mr. Wei Zhen
Hua.

    Party B
agrees to accept the 3.33% equity of Chensheng Gas, legally held by Ms. Liu
Jian.

    Party B
agrees to accept the 1.67% equity of Chensheng Gas, legally held by Mr. Zhao Yu
Lin.

    Party B
agrees to accept the 0.67% equity of Chensheng Gas, legally held by Mr. Zhang
Gong Min.

    Party B
agrees to accept the 0.33% equity of Chensheng Gas, legally held by Mr. Cheng
Ling.

    Party B
agrees to accept the 0.33% equity of Chensheng Gas, legally held by Mr. Zhang
Guo Qing.

    Party B
agrees to accept the 0.33% equity of Chensheng Gas, legally held by Mr. Wang Yi
Jun.

    Party B
agrees to accept the 0.33% equity of Chensheng Gas, legally held by Mr. Gong Jin
He.

    Party B
agrees to accept the 0.33% equity of Chensheng Gas, legally held by Ms. Zhang
Xiao Hua.

    Party B
agrees to accept the 0.33% equity of Chensheng Gas, legally held by Ms. Xu Xiao
Ying.

    Party B
agrees to accept the 0.33% equity of Chensheng Gas, legally held by Ms Zhang
Xiao Hua.

    Party B
agrees to accept the 0.33% equity of Chensheng Gas, legally held by Mr. Ma
Bin.

    Party B
agrees to accept the 0.33% equity of Chensheng Gas, legally held by Ms. Sun
Ying.

    


    
      	
              3.

            	
              Party
      A agrees to transfer the above mentioned equity of Chensheng Gas it holds
      with to Party B for a consideration. Both Parties shall confirm that the
      transfer price of the equity is by US dollar spot exchange, which is
      equivalent to RMB 12.56 million
Yuan.

            


    

    



    
      
         


      

      
         


        
          

        

      

      
         


        
          [English
Translation]

        

      

    


    


    Performance
of the agreement

    


    
      	
              4.

            	
              Both
      parties agree that the relevant alteration procedures at the
      Administration of Industry & Commerce (“AIC”) regarding ownership
      transfer shall be completed not later than 30 days after signing this
      agreement. The parties may agree to postpone and confirm in writing the
      deadline date for completing the aforementioned work when such procedures
      do necessitate such postponement.

            


    

    
      	
              5.

            	
              Both
      parties agree that Party A shall exercise its rights as shareholders and
      share in the profits from the equity of Chensheng Gas before the 51%
      equity in this agreement is
transferred.

            


    

    
      	
              6.

            	
              Both
      parties agree that, after this agreement is signed, a one-off payment for
      the consideration shall be delivered to Party A not later than one month
      as of the date the joint venture receiving its business
      license.

            


    

    


    Registration
and Transfer

    


    
      	
              7.

            	
              Party
      B shall assist the corresponding persons of Party A to process the legal
      procedures for the equity transfer, including but not
    limited:

            


    

    
      	
                      
      A.

            	
              To
      process the change in shareholders with the company registration
      authority.

            


    

    
      	
               
      

            	
              B.

            	
              To
      process the change in shareholders with other corresponding
      authorities.

            


    

    
      	
              8.

            	
              Party
      B will send its relevant staff to Chensheng Gas for Due Diligence. Party A
      shall cooperate fully for this
work.

            


    

    


    Representations

    
      	
              9.

            	
              Party A represents that it has
      sole power to dispose of the equity that is to be transferred to Party B.
      If any third party has any dispute with Party B regarding the ownership
      and interests on such equity, Party A should be liable for all liabilities
      and pay Party B for all the damage and loss arising
      herefrom.

            


    

    
      	
              10.

            	
              Other
      than those set forth in this agreement, there does not exist any legal or
      contractual restrictions on the equity to be transferred by Party A. If
      any third party offers valid evidence showing that there exists legal or
      contractual restriction on the transfer by Party A, Party A should be
      liable for all the liabilities and pay Party B for all the damage and loss
      arising herefrom.

            


    

    
      	
              11.

            	
              Party
      A represents that Party B will, after the performance of this agreement,
      obtain the transferred equity and all the rights and interests incidental
      to the transferred equity, and that there does not exist any right or
      interest of the third party on the same
equity.

            


    

    


    Liability
for breach of the Agreement and Dispute Resolution

    
      	
              12.

            	
              Both
      parties should conscientiously perform the agreement as soon as the
      agreement becomes effective. Any action in violation of the provisions in
      this agreement should be deemed as breach of the
  agreement.

            


    

    
      	
              13.

            	
              If
      Party B fails to pay the purchase payment to Party A pursuant to the
      schedule, Party B should pay Party A liquidated damages which should be
      calculated by multiplying the secured bank lending rate for the same
      period by the amount of
delinquency.

            


    


    
      
         


      

      
         


        
          

        

      

      
         


        
          [English
Translation]

        

      

    


    


    
      	
              14.

            	
              Any
      dispute relating to or arising under this agreement shall be resolved
      through friendly consultation by both parties. If such consultation fails,
      it may be resolved by bringing a lawsuit at the People’s Court in
      Tianjin.

            


    

    
      	
              15.

            	
              Anything
      not covered in this agreement will be addressed by both parties in
      supplemental agreements after consultation. The supplemental agreement has
      the same legal effect with this agreement. This Agreement will be
      effective as soon as it is signed and sealed by both parties. This
      Agreement is signed in six copies. Each party holds three copies that have
      the same legal force and effect.

            


    

    


    


    Party A
(signatures of individual shareholders):

    


    /s/ Xu
Chen,

    /s/ Du
Guang Shi,

    /s/ Zhang
Qi Wen,

    /s/ Sun
Wei Dong,

    /s/ Wei
Zhen Hua,

    /s/ Liu
Jian,

    /s/ Zhao
Yu Lin,

    /s/ Zhang
Gong Min,

    /s/ Cheng
Ling,

    /s/ Zhang
Guo Qing,

    /s/ Wang
Yi Jun,

    /s/ Gong
Jin He,

    /s/ Zhang
Xiao Hua,

    /s/ Xu
Xiao Ying,

    /s/ Zhang
Xiao Hai,

    /s/ Ma
Bin,

    /s/ Sun
Ying

    


    Party B:
China New Energy Group Company

    (Seal of
China New Energy Group Company)

    


    


    


    


    


    


    Date:
December 10th,
2008