Document:

CHINA
        CLEAN ENERGY INC.

      2008
        EQUITY INCENTIVE PLAN

      

      FORM
        OF

      NONQUALIFIED
        STOCK OPTION AGREEMENT

      

      

      This
        NONQUALIFIED STOCK OPTION AGREEMENT (the “Option Agreement”), dated as of the
  _ 
        day of
        ______, 20__ (the “Grant Date”), is between China Clean Energy Inc., a Delaware
        corporation (the “Company”), and                    
        (the
“Optionee”), a [choose
        one]
        [key
        employee, director, advisor and/or consultant] of the Company or of a Subsidiary
        of the Company (a “Related Corporation”), pursuant to the China Clean Energy
        Inc. 2008 EQUITY INCENTIVE PLAN (the “Plan”).

      

      WHEREAS,
        the Company desires to give the Optionee the opportunity to purchase shares
        of
        common stock of the Company, par value $0.001 (“Common Shares”) in accordance
        with the provisions of the Plan, a copy of which is attached
        hereto;

      

      NOW,
        THEREFORE, in consideration of the mutual covenants hereinafter set forth
        and
        for other good and valuable consideration, the parties hereto, intending
        to be
        legally bound hereby, agree as follows:

      

      1. Grant
        of Option.
        The
        Company hereby grants to the Optionee the right and option (the “Option”) to
        purchase all or any part of an aggregate of ________ Common Shares. The Option
        is in all respects limited and conditioned as hereinafter provided, and is
        subject in all respects to the terms and conditions of the Plan now in effect
        and as it may be amended from time to time (but only to the extent that such
        amendments apply to outstanding options). Such terms and conditions are
        incorporated herein by reference, made a part hereof, and shall control in
        the
        event of any conflict with any other terms of this Option Agreement. The
        Option
        granted hereunder is intended to be a nonqualified stock option (“NQSO”) and
not
        an
        incentive stock option (“ISO”) as such term is defined in section 422 of the
        Internal Revenue Code of 1986, as amended (the “Code”).

      

      2. Exercise
        Price.
        The
        exercise price of the Common Shares covered by this Option shall be $1.00
        per
        share. It is the determination of the committee administering the Plan (the
        “Committee”) that on the Grant Date the exercise price was not less than the
        greater of (i) 100% of the “Fair Market Value” (as defined in the Plan) of a
        Common Share, or (ii) the par value of a Common Share.

      

         3. Term.
        Unless
        earlier terminated pursuant to any provision of the Plan or of this Option
        Agreement, this Option shall expire on __________ __, 20__ (the “Expiration
        Date”). This Option shall not be exercisable on or after the Expiration
        Date.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      4.
         Exercise
        of Option.
        The
        Optionee shall have the right to purchase from the Company, on and after
        the
        following dates, the following number of Common Shares, provided the Optionee
        has not terminated his or her service as of the applicable vesting
        date:

      

      
        	
                Date
                  Installment Becomes
                  Exercisable

              	 	
                Number
                  of Option Shares 

              
	 	 	 
	
                 

              	 	
                ________
                  Shares

              
	
                 

              	 	
                an
                  additional ________ Shares

              
	
                 

              	 	
                an
                  additional ________ Shares

              
	
                 

              	 	
                an
                  additional ________ Shares

              

      

       

      The
        Committee may accelerate any exercise date of the Option, in its discretion,
        if
        it deems such acceleration to be desirable. Once the Option becomes exercisable,
        it will remain exercisable until it is exercised or until it
        terminates.

      

      5. Method
        of Exercising Option.
        Subject
        to the terms and conditions of this Option Agreement and the Plan, the Option
        may be exercised by written notice to the Company at its principal office.
        The
        form of such notice is attached hereto and shall state the election to exercise
        the Option and the number of whole shares with respect to which it is being
        exercised; shall be signed by the person or persons so exercising the Option;
        and shall be accompanied by payment of the full exercise price of such shares.
        Only full shares will be issued. 

      

      [The
        Committee should select which of the following methods of payment will be
        permitted:]

      

      The
        exercise price shall be paid to the Company -

      

      (a) in
        cash,
        or by certified check, bank draft, or postal or express money
        order;

      

      (b) through
        the delivery of Common Shares;

      

      (c) by
        delivering a properly executed notice of exercise of the Option to the Company
        and a broker, with irrevocable instructions to the broker promptly to deliver
        to
        the Company the amount necessary to pay the exercise price of the
        Option;

      

      (d) in
        Common
        Shares newly acquired by the Optionee upon the exercise of the Option;
        or

      

      (e) in
        any
        combination of (a), (b), (c), or (d) above.

      

      [In
        the
        event the exercise price is paid, in whole or in part, with Common Shares,
        the
        portion of the exercise price so paid shall be equal to the Fair Market Value
        of
        the Common Shares surrendered on the date of exercise.]

       

      
        
          
          

        

        
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            2 -

          
            

          

        

        
          
          

        

      

       

      Upon
        receipt of notice of exercise and payment, the Company shall deliver a
        certificate or certificates representing the Common Shares with respect to
        which
        the Option is so exercised. The Optionee shall obtain the rights of a
        shareholder upon receipt of a certificate(s) representing such Common
        Shares.

      

      Such
        certificate(s) shall be registered in the name of the person so exercising
        the
        Option (or, if the Option is exercised by the Optionee and if the Optionee
        so
        requests in the notice exercising the Option, shall be registered in the
        name of
        the Optionee and the Optionee’s spouse, jointly, with right of survivorship) and
        shall be delivered as provided above to, or upon the written order of, the
        person exercising the Option. In the event the Option is exercised by any
        person
        or persons after the death or disability (as determined in accordance with
        section 22(e)(3) of the Code) of the Optionee, the notice shall be accompanied
        by appropriate proof of the right of such person or persons to exercise the
        Option. All Common Shares that are purchased upon exercise of the Option
        as
        provided herein shall be fully paid and non-assessable.

      

      Upon
        exercise of the Option, Optionee shall be responsible for all employment
        and
        income taxes then or thereafter due (whether Federal, State or local), and
        if
        the Optionee does not remit to the Company sufficient cash (or, with the
        consent
        of the Committee, Common Shares to satisfy all applicable withholding
        requirements, the Company shall be entitled to satisfy any withholding
        requirements for any such tax by disposing of Common Shares at exercise,
        withholding cash from Optionee’s salary or other compensation or such other
        means as the Committee considers appropriate to the fullest extent permitted
        by
        applicable law. Nothing in the preceding sentence shall impair or limit the
        Company’s rights with respect to satisfying withholding obligations under
        Section 10 of the Plan.

      

      6. Transferability
        of Option.
        This
        Option is not assignable or transferable, in whole or in part, by the Optionee
        other than by will or by the laws of descent and distribution. During the
        lifetime of the Optionee, the Option shall be exercisable only by the Optionee
        or, in the event of his or her disability, by his or her guardian or legal
        representative.

      

      7. Termination
        of Service by Optionee.
        If the
        Optionee’s service with the Company and all Related Corporations is terminated
        by the Optionee for any reason other than death or disability prior to the
        Expiration Date, this Option may be exercised, to the extent of the number
        of
        Common Shares with respect to which the Optionee could have exercised it
        on the
        date of such termination of service by the Optionee at any time prior to
        the
        earlier of (i) the Expiration Date or (ii) ninety (90) days after the date
        of
        such termination of service. [The
        Plan provides for this period as a default. The Committee may provide for
        different exercise periods in any particular NQSO.]
        Any part
        of the Option that was not exercisable immediately before the Optionee’s
        termination of service shall terminate at that time.

       

      
        
          
          

        

        
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            3 -

          
            

          

        

        
          
          

        

      

       

      8. Disability.
        If the
        Optionee becomes disabled (as determined in accordance with section 22(e)(3)
        of
        the Code) during his or her service and, prior to the Expiration Date, the
        Optionee’s service is terminated as a consequence of such disability, this
        Option may be exercised, to the extent of the number of Common Shares with
        respect to which the Optionee could have exercised it on the date of such
        termination of service by the Optionee or by the optionee’s legal
        representative, at any time prior to the earlier of (i) the Expiration Date
        or
        (ii) ninety (90) days after such termination of service. Any part of the
        Option
        that was not exercisable immediately before the Optionee’s termination of
        service shall terminate at that time.

      

      9. Termination
        of Service by Company without Cause or by Optionee with Good
        Reason.
        If the
        Optionee’s service with the Company and all Related Corporations is terminated
        by the Company for any reason other than Cause (or is terminated by the Optionee
        for Good Reason) prior to the Expiration Date, this Option may be exercised,
        to
        the extent of the number of Common Shares with respect to which the Optionee
        could have exercised it on the date of such termination of employment by
        the
        Optionee at any time prior to the earlier of (i) the Expiration Date, or
        (ii)
        one year after such termination of service. Any part of the Option that was
        not
        exercisable immediately before the Optionee’s termination of employment shall
        terminate at that time.

      

      10. Death.
        If the
        Optionee dies during his or her service and prior to the Expiration Date,
        or if
        the Optionee’s service is terminated for any reason (as described in Paragraphs
        7, 8 and 9) and the Optionee dies following his or her termination of service
        but prior to the earlier of the Expiration Date or the expiration of the
        period
        determined under Paragraph 7, 8 or 9 (as applicable to the Optionee), this
        Option may be exercised, to the extent of the number of Common Shares with
        respect to which the Optionee could have exercised it on the date of his
        or her
        death by the Optionee’s estate, personal representative or beneficiary who
        acquired the right to exercise this Option by bequest or inheritance or by
        reason of the Optionee’s death, at any time prior to the earlier of (i) the
        Expiration Date or (ii) one year after the date of the Optionee’s death. Any
        part of the Option that was not exercisable immediately before the Optionee’s
        death shall terminate at that time. 

      

      11. Termination
        for Cause.
        If the
        Optionee’s service with the Company and all Related Corporations is terminated
        by the Company for Cause prior to the Expiration Date, any unexercised portion
        of this Option shall immediately terminate at that time.

      

      12. Securities
        Matters.
        (a) If,
        at any time, counsel to the Company shall determine that the listing,
        registration or qualification of the Common Shares subject to the Option
        upon
        any securities exchange or under any state or federal law, or the consent
        or
        approval of any governmental or regulatory body, or that the disclosure of
        non-public information or the satisfaction of any other condition is necessary
        as a condition of, or in connection with, the issuance or purchase of Common
        Shares hereunder, such Option may not be exercised, in whole or in part,
        unless
        such listing, registration, qualification, consent or approval, or satisfaction
        of such condition shall have been effected or obtained on conditions acceptable
        to the Board of Directors. The Company shall be under no obligation to apply
        for
        or to obtain such listing, registration or qualification, or to satisfy such
        condition. The Committee shall inform the Optionee in writing of any decision
        to
        defer or prohibit the exercise of an Option. During the period that the
        effectiveness of the exercise of an Option has been deferred or prohibited,
        the
        Optionee may, by written notice, withdraw the Optionee’s decision to exercise
        and obtain a refund of any amount paid with respect thereto.

       

      
        
          
          

        

        
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            4 -

          
            

          

        

        
          
          

        

      

       

      (b) The
        Company may require: (i) the Optionee (or any other person exercising the
        Option
        in the case of the Optionee’s death or Disability) as a condition of exercising
        the Option, to give written assurances, in substance and form satisfactory
        to
        the Company, to the effect that such person is acquiring the Common Shares
        subject to the Option for his or her own account for investment and not with
        any
        present intention of selling or otherwise distributing the same, and to make
        such other representations or covenants; and (ii) that any certificates for
        Common Shares delivered in connection with the exercise of the Option bear
        such
        legends, in each case as the Company deems necessary or appropriate, in order
        to
        comply with federal and applicable state securities laws, to comply with
        covenants or representations made by the Company in connection with any public
        offering of its Common Shares or otherwise. The Optionee specifically
        understands and agrees that the Common Shares, if and when issued upon exercise
        of the Option, may be “restricted securities,” as that term is defined in Rule
        144 under the Securities Act of 1933 and, accordingly, the Optionee may be
        required to hold the shares indefinitely unless they are registered under
        such
        Securities Act of 1933, as amended, or an exemption from such registration
        is
        available.

      

      (c) The
        Optionee shall have no rights as a shareholder with respect to any Common
        Shares
        covered by the Option (including, without limitation, any rights to receive
        dividends or non-cash distributions with respect to such shares) until the
        date
        of issue of a stock certificate to the Optionee for such Common Shares. No
        adjustment shall be made for dividends or other rights for which the record
        date
        is prior to the date such stock certificate is issued.

      

      13. Governing
        Law.
        This
        Option Agreement shall be governed by the applicable Code provisions to the
        maximum extent possible. Otherwise, the laws of the State of Delaware (without
        reference to the principles of conflict of laws) shall govern the operation
        of,
        and the rights of the Optionee under, the Plan and Options granted
        thereunder.

       

      
        
          
          

        

        
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            5 -

          
            

          

        

        
          
          

        

      

       

      IN
        WITNESS WHEREOF, the Company has caused this Nonqualified Stock Option Agreement
        to be duly executed by its duly authorized officer, and the Optionee has
        hereunto set his or her hand and seal, all as of the ____ day of __________,
        200_.

       

      
        	 	 	 
	 	China
                Clean Energy
                Inc.
	 
 	 
 	 
 
	 	By:  	 
	 	
                

                Name:

                Title:

              
	 	
              	 
	 	
                

                Optionee

              
	 	
                 

              

      
        
          
          

        

        
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      CHINA
        CLEAN ENERGY INC.

      2008
        EQUITY INCENTIVE PLAN

      

      Notice
        of
        Exercise of Nonqualified Stock Option

      

      

      I
        hereby
        exercise the nonqualified stock option granted to me pursuant to the
        Nonqualified Stock Option Agreement dated as of _________ __, 200_, by China
        Clean Energy Inc. (the “Company”), with respect to the following number of
        shares of the Company’s common stock (“Shares”), par value $0.001 per Share,
        covered by said option:

      
        

        
          	
                  Number
                    of Shares to be purchased:

                	
                  _______

                
	 	 
	
                  Purchase
                    price per Share:

                	
                  $_______

                
	 	 
	
                  Total
                    purchase price:

                	
                  $_______

                

        

        

          
            	
                    o

                  	
                    A.

                  	
                    
                      Enclosed
                        is cash or my certified check, bank draft, or postal or express
                        money
                        order in the amount of $__________ in full/partial [circle
                        one]
                        payment for such Shares;

                    

                  

          

          

          and/or

          

          
            	
                    
                      o

                    

                  	
                    B.

                  	
                    
                      Enclosed
                        is/are       
                           Share(s)
                        with a total fair market value of $                
                         on
                        the date hereof in full/partial [circle
                        one]
                        payment for such Shares;

                    

                  

          

          

          and/or

          

          
            	
                    
                      o

                    

                  	
                    C.

                  	
                    
                      I
                        have provided notice to                      
                         [insert
                        name of broker],
                        a
                        broker, who will render full/partial [circle
                        one]
                        payment for such Shares.
                        [Optionee should attach to the notice of exercise provided
                        to such broker
                        a copy of this Notice of Exercise and irrevocable instructions
                        to pay to
                        the Company the full exercise
                        price.]

                    

                  

          

          

          and/or

          

          
            	
                    
                      o

                    

                  	
                    D.

                  	
                    I
                      elect to satisfy the payment for Shares purchased hereunder
                      by having the
                      Company withhold newly acquired Shares pursuant to the exercise
                      of the
                      Option.

                  

          

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

        

      

       

      Please
        have the certificate or certificates representing the purchased Shares
        registered in the following name or names* :
                                                   ;
        and
        sent to                                                 .

      
        

        

        
          	
                  DATED:                 ___,
                    20__

                	
                   

                
	 	
                  Optionee’s
                    Signature

                

        

        

          
*Certificates
          may be registered in the name of the Optionee alone or in the joint names
          (with
          right of survivorship) of the Optionee and his or her
          spouse.

      

    

     

    
      
        
        

      

      
        -
          2 -Unassociated Document

    EMPLOYMENT
      AGREEMENT

     

    This
      Employment Agreement (the “Agreement”) is made as of the 9th day of January,
      2008, by and between, China Clean Energy Inc., a company organized under the
      laws of the State of Delaware (the “Company”), and Tai-ming Ou (the
“Executive”). 

     

    In
      consideration of the mutual covenants contained herein and other good and
      valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, the Company and Executive, intending to be legally bound, hereby
      agree as follows: 

     

    1. Employment
      and Duties.
      The
      Company hereby agrees to employ Executive as the Chief Executive Officer of
      the
      Company (the “CEO”), and Executive hereby accepts such employment, on the terms
      and conditions hereinafter set forth. During the Term (as defined below),
      Executive shall serve as CEO and shall report to the Board of Directors of
      the
      Company (the “Board”). Executive shall have those powers and duties customarily
      associated with the position of CEO of entities comparable to the Company and
      such other powers and duties as may be prescribed by the Board. Executive shall
      devote all of his working time, attention and energies to the performance of
      his
      duties for the Company.

     

    2. Term.
      The
      term of Executive’s employment hereunder, unless sooner terminated as provided
      herein (the “Initial Term”), shall be for a period of two (2) years commencing
      on the date hereof (the “Commencement Date”). The term of this Agreement shall
      automatically be extended for additional terms of one (1) year each (each a
      “Renewal Term”), unless either party gives prior written notice of non-renewal
      to the other party no later than ninety (90) days prior to the expiration of
      the
      Initial Term (“Non-Renewal Notice”), or the then current Renewal Term, as the
      case may be. For purposes of this Agreement, the Initial Term and any Renewal
      Term are hereinafter collectively referred to as the “Term.”

     

    3. Compensation,
      Benefits and Equity Awards.

     

    (a) Base
      Salary.
      During
      the Term, Executive shall receive a base salary of RMB 18,000 per month payable
      on a monthly basis, which amount may be increased no less than 10% at the
      discretion of the Board following the one year anniversary of the date hereof.
      Should Executive remain employed by the Company after two years, his base salary
      will be subject to good faith negotiations with the Board. Executive’s base
      salary shall be paid in accordance with the Company’s regular payroll practices,
      including all usual and customary federal, state, and local tax withholdings.
      

     

    (b) Expenses.
      The
      Company shall reimburse Executive for all reasonable business expenses upon
      the
      presentation of itemized statements of such expenses in accordance with Company
      policies and procedures as may be in effect from time to time.

     

    (c) Vacation.
      During
      the Term, Executive shall be entitled to at least three (3) weeks of paid
      vacation per calendar year to be used and accrued in accordance with the
      Company’s policies as may be in effect from time to time. In addition to
      vacation, Executive shall be entitled to the number of sick days, personal
      days
      and national holidays per year as to which other Executives of the Company
      may
      be entitled.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (d) Other
      Benefit Plans.
      During
      the Term, Executive shall be entitled to participate in such employee benefit
      plans and insurance programs offered by the Company, or which may be in effect
      from time to time, in accordance with any eligibility requirements for
      participation therein.

     

    (e) Equity
      Awards.

     

    Executive
      will receive the following equity awards:

    

    (i) Stock
      Options.
      The
      Company shall grant Executive options to purchase an aggregate of 130,000 shares
      of common stock (“Options”), pursuant to the Company’s 2008 Equity Incentive
      Plan (the “Incentive Plan”). Such grant shall be evidenced by an Option
      Agreement, as contemplated by the Incentive Plan. The per share exercise price
      of the Options shall be $2.50 and $3.00 respectively as defined in the Option
      Agreement. The term of the Option shall be three years from the Commencement
      Date. One-twelfth (1/12) of the Options shall become exercisable each quarter
      that Executive remains employed by the Company.

     

    (ii) Future
      Grants.
      Executive shall be eligible for grants of Options, Restricted Stock and other
      permissible awards under the Incentive Plan, as the Board or Compensation
      Committee of the Company shall, in its absolute and sole discretion,
      determine.

     

    4. Termination.
      Executive’s employment by the Company shall terminate under the following
      circumstances:

     

    (a) Death.
      If
      Executive dies, Executive’s employment shall be terminated effective as of the
      end of the calendar month during which Executive died.

     

    (b) Disability.
      In the
      event Executive, by reason of physical or mental incapacity, shall be
      substantially unable to perform his duties hereunder for a period of three
      (3)
      consecutive months, or for a cumulative period of six (6) months within any
      12
      month period (such incapacity deemed to be “Disability”), the Company shall have
      an option, at any time thereafter, to terminate Executive’s employment hereunder
      as a result of such Disability. Such termination will be effective ten (10)
      days
      after the Board gives written notice of such termination to Executive, unless
      Executive shall have returned to the full performance of his duties prior to
      the
      effective date of the notice. Upon such termination, Executive shall be entitled
      to any benefits as to which he and his dependents are entitled by law, and
      except as otherwise expressly provided herein, all obligations of the Company
      hereunder shall cease upon the effectiveness of such termination other than
      payment of salary earned through the date of Disability, provided that such
      termination shall not affect or impair any rights Executive may have under
      any
      policy of long term disability insurance or benefits then maintained on his
      behalf by the Company. Executive’s base salary shall continue to be paid during
      any period of incapacity prior to and including the date on which Executive’s
      employment is terminated for Disability.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (c) Cause.
      The
      Company shall have the right to terminate Executive's employment for “Cause.”
For purposes of this Agreement, “Cause” shall mean: 

     

    (i) the
      willful or continued failure by Executive to substantially perform his duties,
      including, but not limited to, acts of fraud, willful misconduct, gross
      negligence or other act of dishonesty;

     

    (ii) a
      material violation or material breach of this Agreement which is not cured
      within 10 days written notice to Executive;

     

    (iii) misappropriation
      of funds, properties or assets of the Company by Executive or any action which
      has a materially adverse effect on the Company or its business; 

     

    (iv) the
      conviction of, or plea of guilty or no contest to, a felony or any other crime
      involving moral turpitude, fraud, theft, embezzlement or dishonesty; or

     

    (v) abuse
      of
      drugs or alcohol which impairs the Executive’s ability to perform his duties as
      CEO. 

     

    (d) Good
      Reason.
      Executive may terminate his employment for “Good Reason.” For purposes of this
      Agreement, “Good Reason” shall mean: (i) a material diminution of Executive’s
      authority or duties with the Company (other than as a result of Executive’s
      incapacity or disability); or (ii) a greater than 10% reduction in Executive’s
      base salary. Prior to the Executive terminating his employment with the Company
      for “Good Reason,” Executive must provide written notice to the Company that
      such “Good Reason” exists and setting forth, in detail, the grounds Executive
      believes constitutes such “Good Reason.” If the Company does not cure the
      grounds upon which Executive believes “Good Reason” exists within thirty (30)
      days after being provided with notice by the Executive, then Executive’s
      employment shall be deemed terminated. 

     

    (e) Without
      Cause.
      The
      Company shall have the right to terminate Executive’s employment hereunder
      without cause at any time by providing Executive with written notice of such
      termination, which termination shall take effect 10 days after the date such
      notice is provided. 

     

    (f) Voluntary
      Resignation.
      Executive shall have the right to terminate his employment hereunder by
      providing the Company with a written notice of resignation. Such notice must
      be
      provided 60 days prior to the date upon which Executive wishes such resignation
      to be effective. Upon receipt of such resignation, the Company shall have the
      option to accelerate the resignation to a date prior to the expiration of the
      60
      day period.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    5. Payments
      Due Upon Termination.
      In the
      event Executive’s employment is terminated pursuant to Section 5(d) or (e)
      above, then any unvested Options held by Executive shall immediately vest and
      the Company shall continue pay to Executive his base salary as in effect on
      the
      date of termination for a period of twelve (12) months and reimburse Executive
      for the costs of obtaining comparable medical benefits for twelve (12) months,
      unless the Executive obtains other employment which provides for comparable
      medical benefits as Executive received while employed by the Company. In the
      event Executive’s employment is terminated for any other reason, then Executive
      shall be entitled to receive his base salary though the effective date of
      termination and the Company shall reimburse Executive for any reasonable
      expenses previously incurred for which Executive had not been reimbursed prior
      to the termination of employment. Executive acknowledges and agrees that prior
      to receiving any payments under this Section, and as a material condition
      thereof, Executive shall, if requested by the Company, sign and agree to be
      bound by a general release of claims against the Company related to Executive’s
      employment (and termination of employment) with the Company in such form as
      the
      Company may deem appropriate. Upon Executive’s termination of employment for any
      reason, upon the request of the Board, he shall resign any memberships or
      positions that he then holds with the Company. 

     

    6. Executive’s
      Representations.
      Executive hereby represents and warrants to the Company that: (i) his execution
      and performance of duties under this Agreement does not and shall not conflict
      with, breach, violate or cause a default under any contract, agreement,
      arrangement, understanding, order, judgment or decree as to which Executive
      is a
      party or by which he is bound; (ii) Executive is not a party to or bound by
      any
      employment agreement, non-compete agreement, confidentiality agreement or any
      similar agreement or arrangement with any other person or entity which effects
      or impacts his ability to be employed by the Company pursuant to the terms
      of
      this Agreement; and (iii) upon the execution and delivery of this Agreement
      by
      the Company, this Agreement shall constitute a valid and binding obligation
      of
      Executive, enforceable in accordance with its terms. In addition, Executive
      acknowledges that the Company has relied on such representations and warranties
      in employing Executive, that he has not entered into, and will not enter into,
      any agreement, either oral or written, in conflict with this Agreement. If
      it is
      determined that Executive is in breach or has breached any of the
      representations set forth herein, the Company shall have the right to
      immediately terminate the Executive’s employment with the company and that such
      termination shall be deemed a termination with Cause. Executive hereby
      acknowledges and represents that he has consulted with independent legal counsel
      regarding his rights and obligations under this Agreement and that he fully
      understands the terms and conditions contained herein.

     

    7. Successors.
      The
      rights and benefits of Executive hereunder shall not be assignable, whether
      by
      voluntary or involuntary assignment or transfer by Executive. This Agreement
      shall be binding upon, and inure to the benefit of, the successors and assigns
      of the Company, and the heirs, executors and administrators of the Executive,
      and shall be assignable by the Company to any entity acquiring substantially
      all
      of the assets of the Company, whether by merger, consolidation, sale of assets
      or similar transactions.

     

    8. Notice.
      For the
      purposes of this Agreement, notices, demands and all other communications
      provided for in this Agreement shall be in writing and shall be delivered (i)
      personally, (ii) by first class mail, certified, return receipt requested,
      postage prepaid, (iii) by overnight courier, with acknowledged receipt, or
      (iv)
      by facsimile transmission followed by delivery by first class mail or by
      overnight courier, in the manner provided for in this Section, and properly
      addressed as follows:

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	
              If
                to the Company, to: China Clean Energy Inc. Fulong Industrial Park,
                Longtian, Fuqing City, Fujian Province, People’s Republic of
                China

            
	 
	
              If
                to Executive to: No.
                15, Longshou New Village, Longtian Twon, Fuqing City, Fujian
                Province,
                People’s Republic of China

            

    

    

    or
      to
      such other address as the Company or Executive may later indicate in
      writing.

     

    9. Governing
      Law and Dispute Resolution.
      This
      Agreement is governed by, and is to be construed and enforced in accordance
      with, the laws of the State of Delaware, without regard to principles of
      conflicts of laws. If, under such law, any portion of this Agreement is at
      any
      time deemed to be in conflict with any applicable statute, rule, regulation
      or
      ordinance, such portion shall be deemed to be modified or altered to conform
      thereto or, if that is not possible, to be omitted from this Agreement, and
      the
      invalidity of any such portion shall not affect the force, effect and validity
      of the remaining portion hereof. 

     

    10. Amendment.
      No
      provisions of this Agreement may be amended, modified, or waived unless such
      amendment or modification is agreed to in writing signed by Executive and by
      a
      duly authorized officer of the Company. No waiver by either party hereto at
      any
      time of any breach by the other party hereto of any condition or provision
      of
      this Agreement to be performed by such other party shall be deemed a waiver
      of
      similar or dissimilar provisions or conditions at the same or at any prior
      or
      subsequent time.

     

    11. Entire
      Agreement.
      This
      Agreement sets forth the entire agreement of the parties hereto in respect
      of
      the subject matter contained herein and supersedes any and all prior agreements,
      promises, covenants, arrangements, understandings, communications,
      representations or warranties, whether oral or written, by any officer, employee
      or representative of any party hereto. Any prior agreement by the parties hereto
      with respect to the subject matter of this Agreement is hereby terminated and
      canceled as of the date hereof.

     

    12. Severability.
      The
      covenants of this Agreement shall be construed as covenants independent of
      one
      another and as obligations distinct from any other agreement between the
      parties. Should any provision herein be held to be void or unenforceable, the
      remaining provisions shall remain in full force and effect, to be read and
      construed as if the void or unenforceable provisions were originally
      deleted.

     

    13. Counterparts.
      This
      Agreement may be executed in counterparts, each of which shall be deemed to
      be
      an original but all of which together will constitute one and the same
      instrument.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS HEREOF,
      the
      parties hereby enter into this Agreement and affix their signatures as of the
      date first above written.

     

    
      	CHINA
              CLEAN ENERGY
              INC.	 	 	 
	 	 	 	 	 
	By:	/s/ Taiming
              Ou	 	 	 
	 	
              

              Name:
                Taiming Ou

              Title:
                Chief Executive Officer

            	 	 	
            
	 	 	 	 	 
	 	 	 	 	 
	 /s/ Taiming Ou	 	 	 
	
              
Taiming
              Ou	 	 	 

    
      
        
        

      

      
        6

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