Unassociated Document


    


    OPTION
AGREEMENT

    


    This
Option Agreement (this “Agreement”) is
dated January 20, 2011,
and is entered into in Pinghe
County, Fujian Province, People’s Republic of China (“PRC” or “China”) by
and between Zhangzhou Fuhua Biomass Energy Technology Co., Ltd. (“Party A”), and
Fujian Zhangzhou Ding Neng Bio-Technology Co., Ltd. (“Party B”), and the
undersigned shareholders of Party B (each a “Shareholder” and collectively the
“Shareholders”
or “Party C”). Party A, Party B and the Shareholders are each referred to in
this Agreement as a “Party” and
collectively as the “Parties.”

    


    RECITALS

    


    1.           Party
B is engaged in the business of biodiesel production etc (the “Business”). Party
A has the expertise in consulting, and Party A and Party B has entered into a
Consulting Services Agreement to provide Party B with various consulting
services in connection with the Business.

    


    2.           The
Shareholders collectively holds 100% of the issued and outstanding equity
interests of Party B (collectively the “Equity Interest”).

    


    3.           The
Parties are entering into this Agreement in connection with the Consulting
Services Agreement.

    


    NOW, THEREFORE, the Parties to
this Agreement hereby agree as follows:

    


    1.           PURCHASE AND SALE OF EQUITY
INTEREST

    


    1.1           Grant of Rights. The
Shareholders (hereinafter the “Transferors”) hereby
collectively and irrevocably grant to Party A or a designee of Party A (the
“Designee”) an option to purchase at any time, to the extent permitted under PRC
Law, all or a portion of the Equity Interest in accordance with such procedures
as determined by Party A, at the price specified in Section 1.3 of this
Agreement (the “Option”).  No
Option shall be granted to any party other than to Party A and/or a
Designee.  Party B hereby agrees to grant the Option to Party A and/or
the Designee.  As used herein, Designee may be an individual person, a
corporation, a joint venture, a partnership, an enterprise, a trust or an
unincorporated organization.

    


    1.2           Exercise of
Rights.  According with the requirements of applicable PRC laws
and regulations, Party A and/or the Designee may exercise the Option at any time
by issuing a written notice (the “Notice”) to one or more of the Transferors and
specifying the amount of the Equity Interest to be purchased from such
Transferor(s) and the manner of purchase.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    1.3         Purchase
Price.

     

    1.3.1        The
purchase price of the Equity Interest pursuant to an exercise of the Option
shall be equal to the capital paid in by the Transferors, adjusted pro rata for
purchase of less than all of the Equity Interest, unless applicable PRC laws and
regulations require an appraisal of the Equity Interest or stipulate other
restrictions regarding the purchase price of the Equity Interest.

    


    1.3.2       If
the applicable PRC laws and regulations require an appraisal of the Equity
Interest or stipulate other restrictions regarding the purchase price of the
Equity Interest at the time Party A exercises the Option, the Parties agree that
the purchase price shall be set at the lowest price permissible under the
applicable laws and regulations.

    


    1.4         Transfer of Equity
Interest.  Upon each exercise of the Option under this
Agreement:

    


    1.4.1       The
Transferors shall hold or cause to be held a meeting of shareholders of Party B
in order to adopt such resolutions as necessary in order to approve the transfer
of the relevant Equity Interest (such Equity Interest hereinafter the “Purchased
Equity Interest”) to Party A and/or the Designee;

    


    1.4.2       The
relevant Parties shall, enter into an Equity Interest Purchase Agreement, in a
form reasonably acceptable to Party A, setting forth the terms and conditions
for the sale and transfer of the Purchased Equity Interest;

    


    1.4.3       The
relevant Parties shall execute, without any security interest, all other
requisite contracts, agreements or documents, obtain all requisite approval and
consent of the government, conduct all necessary actions, transfer the valid
ownership of the Purchased Equity Interest to Party A and/or the Designee, and
cause Party A and/or the Designee to be the registered owner of the Purchased
Equity Interest.  As used herein, “security interest” means any
mortgage, pledge, the right or interest of the third party, any purchase right
of equity interest, right of acquisition, right of first refusal, right of
set-off, ownership detainment or other security arrangements; however, such term
shall not include any security interest created under that certain Equity Pledge
Agreement dated as of January 20,
2011 by and among the Parties (the “Pledge Agreement”).

    


    1.5         Payment.  Payment
of the purchase price shall be determined through negotiation between the
Transferors and Party A (including the
Designee) in
accordance with the applicable laws at the time of the exercise of the
Option.

    


    
      
        
        

      

      
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    2.           REPRESENTATIONS RELATING TO
EQUITY INTEREST

    


    2.1          Party B’s
Representations.  Party B hereby represents and
warrants:

    


    2.1.1       Without
Party A’s prior written consent, Party B’s Articles of Association shall not be
supplemented, changed or renewed in any way, Party B’s registered capital of
shall not be increased or decreased, and the structure of the registered capital
shall not be changed in any form;

    


    2.1.2       To
maintain the corporate existence of Party B and to prudently and effectively
operate the business according with customary fiduciary standards applicable to
managers with respect to corporations and their shareholders;

    


    2.1.3       Without
Party A’s prior written consent, upon the execution of this Agreement, to not
sell, transfer, mortgage, create pledges, liens, or any other encumbrances on or
dispose, in any other form, any asset, legitimate or beneficial interest of
business or income, or encumber or approve any encumbrance or imposition of any
security interest on Party B’s assets;

    


    2.1.4       Without
Party A’s prior written consent, to not issue or provide any guarantee or permit
the existence of any debt, other than (i) such debt that may arise from Party
B’s normal or daily business (excepting a loan); and (ii) such debt which has
been disclosed to Party A before this Agreement;

    


    2.1.5       To
operate and conduct all business operations in the ordinary course of business,
without damaging Party B’s business or the value of its assets;

    


    2.1.6       Without
Party A’s prior written consent, to not enter into any material agreements,
other than agreements entered into in the ordinary course of business (for
purpose of this paragraph, if any agreement for an amount in excess of One
Hundred Thousand Renminbi (RMB 100,000) shall be deemed a material
agreement);

    


    2.1.7       Without
Party A’s prior written consent, to not provide loan or credit to any other
party or organization;

    


    2.1.8       To
provide to Party A all relevant documents relating to its business operations
and finance at the request of Party A;

    


    2.1.9       To
purchase and maintain general business insurance of the type and amount
comparable to those held by companies in the same industry, with similar
business operations and assets as Party B, from an insurance company approved by
Party A;

    


    2.1.10     Without
Party A’s prior written consent, to not enter into any merger, cooperation,
acquisition or investment;

    


    2.1.11     To
notify Party A of the occurrence or the potential occurrence of litigation,
arbitration or administrative procedure relating to Party B’s assets, business
operations and/or income;


    
      
         


      

      
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    2.1.12      In
order to guarantee the ownership of Party B’s assets, to execute all requisite
or relevant documents, take all requisite or relevant actions, and make and
pursue all relevant claims;

    


    2.1.13      Without
Party A’s prior written notice, to not assign the Equity Interest in any form;
however, Party B shall distribute dividends to the Shareholders upon the request
of Party A; and

    


    2.1.14      In
accordance with Party A’s request, to appoint any person designated by Party A
to be a management member of Party B.

    


    2.2         Transferors’
Representations.  The Transferors hereby represent and
warrant:

    


    2.2.1        Without
Party A’s prior written consent, upon the execution of this Agreement, to not
sell, transfer, mortgage, create pledges, liens, or any other encumbrances on or
dispose in any other form any legitimate or beneficial interest of the Equity
Interest, or to approve any security interest, except as created pursuant to the
Pledge Agreement;

    


    2.2.2        Without
Party A’s prior written notice, to not adopt or support or execute any
shareholders resolution at any meeting of the shareholders of Party B that seeks
to approve any sale, transfer, mortgage or disposal of any legitimate or
beneficial interest of the Equity Interest, or to allow any attachment of
security interests, except as created pursuant to the Pledge
Agreement;

    


    2.2.3        Without
Party A’s prior written notice, to not agree or support or execute any
shareholders resolution at any meeting of the shareholders of Party B that seeks
to approve Party B’s merger, cooperation, acquisition or
investment;

    


    2.2.4        To
notify Party A the occurrence or the potential occurrence of any litigation,
arbitration or administrative procedure relevant to the Equity
Interest;

    


    2.2.5        To
cause Party B’s Board of Directors to approve the transfer of the Purchased
Equity Interest pursuant to this Agreement;

    


    2.2.6        In
order to maintain the ownership of Equity Interest, to execute all requisite or
relevant documents, conduct all requisite or relevant actions, and make all
requisite or relevant claims, or make requisite or relevant defense against all
claims of compensation;

    


    2.2.7        Upon
the request of Party A, to appoint any person designated by Party A to be a
director of Party B; and



    
      
         


      

      
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     2.2.8       To
prudently comply with the provisions of this Agreement and any other agreements
entered into with Party A and Party B in connection therewith, and to perform
all obligations under all such agreements, without taking any action or
nonfeasance that may affect the validity and enforceability of such
agreements.

    


    3.           Representations and
Warranties.  As of the execution date of this Agreement and on
each transfer of Purchased Equity Interest pursuant to an exercise of the
Option, Party B and the Transferors hereby represent and warrant as
follows:

    


    3.1           Such
Parties shall have the power and ability to enter into and deliver this
Agreement and to perform their respective obligations thereunder, and at each
transfer of Purchased Equity Interest, the relevant Equity Interest Purchase
Agreement and to perform their obligations thereunder.  Upon
execution, this Agreement and each Equity Interest Purchase Agreement will
constitute legal, valid and binding obligations and be fully enforceable in
accordance with their terms;

    


    3.2           The
execution and performance of this Agreement and any Equity Interest Purchase
Agreement shall not: (i) violate any relevant laws and regulations of the PRC;
(ii) conflict with the Articles of Association or other organizational documents
of Party B; (iii) cause to breach any agreements or instruments or having
binding obligation on it, or constitute a breach under any agreements or
instruments or having binding obligation on it; (iv) breach relevant
authorization of any consent or approval and/or any effective conditions; or (v)
cause any authorized consent or approval to be suspended, removed, or cause
other added conditions;

    


    3.3           The
Equity Interest is transferable in whole and in part, and neither Party B nor
the Transferors has permitted or caused any security interest to be imposed upon
the Equity Interest other than pursuant to the Pledge Agreement;

    


    3.4           Party
B does not have any unpaid debt, other than (i) such debt that may arise during
the ordinary course of business; and (ii) debt either disclosed to Party A
before this Agreement or incurred pursuant to Party A’s written
consent;

    


    3.5           Party
B has complied with all applicable PRC laws and regulations in connection with
this Agreement;

    


    3.6           There
are no pending or ongoing litigation, arbitration or administrative procedures
with respect Party B, its assets or the Equity Interests, and Party B and the
Transferors have no knowledge of any pending or threatened claims to the best of
their knowledge; and

    


    3.7           The
Transferors own the Equity Interest free and clear of encumbrances of any kind,
other than the security interest pursuant to the Pledge Agreement.

    


    
      
        
        

      

      
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    4.           ASSIGNMENT OF
AGREEMENT

     

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

    


    4.2           Party
B and the Transferors hereby agrees that Party A shall be able to transfer all
of its rights and obligations under this Agreement to any third party, and such
transfer shall only be subject to a written notice of Party A to Party B
and  the Transferors without any further consent from Party B or the
Transferors.

    


    5.           EFFECTIVE DATE AND
TERM

    


    5.1           This
Agreement shall be effective as of the date first set forth above.

    


    5.2           The
term of this Agreement shall commence from the effective date and shall last for
the maximum period of time permitted by law unless it is early terminated in
accordance with this Agreement.

    


    5.3           At
the end of the term of this Agreement (including any extension thereto), or if
earlier terminated pursuant to Section 5.2, the Parties agree that any transfer
of rights and obligations pursuant to Section 4.2 shall continue to be in
effect.

    


    6.           APPLICABLE LAWS AND DISPUTE
RESOLUTION

    


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

    


    6.2           Dispute
Resolution.  The Parties shall strive to resolve any disputes
arising from the interpretation or performance of this Agreement through
amicable negotiations.  If such dispute cannot be settled within
thirty (30) days, any Party may submit such dispute to China International
Economic and Trade Arbitration Commission (“CIETAC”) for arbitration. There shall be three (3)
arbitrators.  Party B shall select one (1) arbitrator and Party A
shall select one (1) arbitrator, and both arbitrators shall be selected within
thirty (30) days after giving or receiving the demand for
arbitration.  Such arbitrators shall be freely selected, and the
Parties shall not be limited in their selection to any prescribed
list.  The chairman of the CIETAC shall select the third
arbitrator.  If a Party does not appoint an arbitrator who consents to
participate within thirty (30) days after giving or receiving the demand for
arbitration, the relevant appointment shall be made by the chairman of the
CIETAC.  The arbitration shall abide by the rules of CIETAC, and the
arbitration proceedings shall be conducted in Beijing, China in
English.  The determination of CIETAC shall be final and binding upon
the Parties.

    


    7.           Taxes and
Expenses.  Each Party shall, according with PRC laws, bear any
and all registration taxes, costs and expenses for the transfer of equity
arising from the preparation, execution and completion of this Agreement and all
Equity Interest Purchase Agreements.


    
      
         


      

      
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    8.           Notices.  Notices
or other communications required to be given by any Party pursuant to this
Agreement shall be written in English and Chinese and delivered personally or
sent by registered mail or prepaid mail or by a recognized courier service or by
facsimile transmission to the relevant address of each Party as set forth below
or other addresses of the Party as specified by such Party from time to
time.  The date when the notice is deemed to be duly served shall be
determined as follows: (a) a notice delivered personally is deemed duly served
upon the delivery; (b) a notice sent by mail is deemed duly served the tenth
(10th) day after the date of the air registered mail with the postage prepaid
has been sent out (as is shown on the postmark), or the fourth (4th) day after
the delivery by an internationally recognized courier service; and (c) a notice
sent by facsimile transmission is deemed duly served upon the receipt time as
shown on the transmission confirmation.

     

    
      	
              Party
      A

            	
                

            	 
      
	 
      	 
      	
              Zhangzhou
      Fuhua Biomass Energy Technology Co., Ltd.

            
	 
      	 
      	 
      
	   
      	
                 
      

            	
              Address:
      Pingzhai Village, Shange Town,, Pinghe County,

               Zhangzhou
      City, Fujian Province, China

                
    

            
	 
      	
                

            	
              Attn: HUANG
      Sanfu

                

            
	 
      	
                

            	
              Fax:
      86- 596-2967018

               

            
	 
      	
                

            	
              Tel:
      86- 596-2911187

            
	 
      
	
              Party
      B:   

            
	 
      
	 
      	 
      	
              Fujian
      Zhangzhou Ding Neng Bio-Technology Co., Ltd.

            
	 
      	
                

            	
              Address:
      Pingzhai Village, Shange Town,, Pinghe County, 

              Zhangzhou
      City, Fujian Province, China

               

            
	 
      	
                

            	
              Attn: NIE
      Xinfeng

               

            
	  
      	
               
       

            	
              Fax:
      86- 596-2967018

                

            
	 
      	
                

            	
              Tel:
      86- 596-2911187

            


    

     

    
      
         


      

      
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              Party
      C:

            	 
      	 
      
	 
      	 
      	 
      
	 
      	
              PartyC1
      :

               

            	
              NIE Xinfeng

               

            
	 
      	 
      	
              Address:
      No. 33 Cangxiang Road, Haicang District, Xiamen City, 

              Fujian
      Province, China.

               

            
	 
      	 
      	
              Fax:
      86- 596-2967018

               

            
	 
      	 
      	
              Tel:
      86- 596-2911187

               

            
	 
      	
              PartyC2:

            	 
      
	 
      	 
      	
              HUANG
      Sanfu

            
	 
      	 
      	
              Address:
      Taoyuan County, Taiwan

               

            
	 
      	 
      	
              Fax:
      86- 596-2967018

               

            
	 
      	 
      	
              Tel:
      86- 596-2911187

            


    

    


    9.           Confidentiality.  The
Parties acknowledge and confirm that any oral or written information exchanged
by the Parties in connection with this Agreement is confidential.  The
Parties shall maintain the confidentiality of all such information. Without the
written approval by the other Parties, any Party shall not disclose to any third
party any confidential information except as follows:

    


    (a)           Such
information was in the public domain at the time it was
communicated;

    


    (b)           Such
information is required to be disclosed pursuant to the applicable laws,
regulations, policies relating to the stock exchange; or

    


    (c)           Such
information is required to be disclosed to a Party’s legal counsel or financial
consultant, provided however, such legal counsel and/or financial consultant
shall also comply with the confidentiality as stated hereof.  The
disclosure of confidential information by employees or agents of the disclosing
Party is deemed to be an act of the disclosing Party, and such Party shall be
responsible for all breach of confidentiality arising from such
disclosure.  This provision shall survive even if certain clauses of
this Agreement are subsequently amended, revoked, terminated or determined to be
invalid or unable to implement for any reason.


    
      
         


      

      
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    10.          Further
Warranties.  The Parties agree to promptly execute such
documents as required to perform the provisions of this Agreement, and to take
such actions as may be reasonably required to perform the provisions of this
Agreement.

    


    11.          MISCELLANEOUS

    


    11.1           Amendment, Modification and
Supplement.  Any amendments and supplements to this Agreement
shall only take effect if executed by both Parties in writing.

    


    11.2           Entire
Agreement.  Notwithstanding Article 5 of this Agreement, the
Parties acknowledge that this Agreement constitutes the entire agreement of the
Parties with respect to the subject matters therein and supersede and replace
all prior or contemporaneous agreements and understandings, whether oral or in
writing.

    


    11.3           Severability.  If
any provision of this Agreement is deemed invalid or non-enforceable according
with relevant laws, such provision shall be deemed invalid only within the
applicable laws and regulations of the PRC, and the validity, legality and
enforceability of the other provisions hereof shall not be affected or impaired
in any way.  The Parties shall, through reasonable negotiation,
replace such invalid, illegal or non-enforceable provisions with valid
provisions in order to bring similar economic effects of those invalid, illegal
or non-enforceable provisions.

    


    11.4           Headings.  The
headings contained in this Agreement are for reference only and shall not affect
the interpretation and explanation of the provisions in this
Agreement.

    


    11.5           Language and
Copies.  This Agreement shall be executed in English in five
(5) duplicate originals. Each Party shall hold one (1) original, each of which
shall have the same legal effect.

    


    11.6           Successor.  This
Agreement shall be binding on the successors of each Party and the transferee
allowed by each Party.

    


    11.7           Survival.  Each
Party shall continue to perform its obligations notwithstanding the expiration
or termination of this Agreement.  Article 6, Article 8, Article 9 and
Section 11.7 hereof shall continue to be in full force and effect after the
termination of this Agreement.

    


    11.8           Waiver.  Any
Party may waive the terms and conditions of this Agreement in writing with the
written approval of all the Parties.  Under certain circumstances, any
waiver by a Party to the breach of other Parties shall not be construed as a
waiver of any other breach by any other Parties under similar
circumstances.

     

    [SIGNATURE PAGE
FOLLOWS]

     

    
      
        
        

      

      
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    IN WITNESS WHEREOF this
Agreement is duly executed by each Party or its legal representatives as of the
date first set forth above.

     

    
      
        
          
            
              	
                      PARTY
      A:

                    	
                      Zhangzhou
      Fuhua Biomass Energy Technology Co., Ltd.

                    
	 
      	 
      
	 
      	
                      Legal/Authorized
      Representative:

                    	
                      /s/ Sanfu
      Huang

                    	
                       

                    
	 
      	 
      
	 
      	
                      Name:HUANG
      Sanfu

                    
	 
      	
                      Title:
      Executive Director

                    
	 
      	 
      
	
                      PARTY
      B:

                    	
                      Fujian
      Zhangzhou Ding Neng Bio-Technology Co., Ltd.

                    
	 
      	 
      
	 
      	
                      Legal/Authorized
      Representative:

                    	
                      /s/
      Xinfeng Nie 

                    	
                       

                    
	 
      	
                      Name:
      NIE Xinfeng

                    
	 
      	
                      Title:
      Chairman of Board of
Directors

                    


            

          

        

      

    

     

    
      
         


      

      
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    SIGNATURE PAGE FOR
SHAREHOLDERS OF PARTY B

    


    SHAREHOLDERS
OF PARTY B:

     

    
      
        	
                /s/ Xinfeng
Nie

              


      

    

    NIE
Xinfeng

    ID Card
No.:320325197112048034

    Owns 60%
of Fujian Zhangzhou Ding Neng Bio-Technology Co., Ltd.

    


    
      
        	
                /s/ Sanfu Huang


              


      

    

    HUANG
Sanfu

    ID Card
No.:R121153145

    Owns 40%
of Fujian Zhangzhou Ding Neng Bio-Technology Co., Ltd.

     

    
      
         


      

      
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