Contract

Exhibit 10.1 SHARE EXCHANGE AGREEMENT Heng Xing Technology Group Development Limited FOR THE EXCHANGE OF CAPITAL STOCK OF CHINA INTERNATIONAL ENTERPRISES CORP. DATED AS OF JANUARY 31, 2005 1 SHARE EXCHANGE AGREEMENT This SHARE EXCHANGE AGREEMENT, dated as of January 31, 2005, (the”Agreement”) by and among CHINA INTERNATIONAL ENTERPRISES CORP., a Delawarecorporation (“CIEC”), Heng Xing Technology Group Development Limited(hereinafter “XHT”), incorporated under the laws of the British Virgin Islands,and all of the shareholders of XHT, whose names and addresses are set forth onExhibit A attached hereto (“SHAREHOLDERS”) WHEREAS, CIEC is a newly formed Delaware corporation; WHEREAS, SHAREHOLDERS own 100% of the issued and outstanding shares ofCommon Stock, par value $1.00 per share, of XHT (the ” XHT Shares”); WHEREAS, XHT owns 100% of the issued and outstanding shares of ShenzhenHengtaifeng Technology Co., Ltd., (hereinafter referred to as “HFT”) a companyorganized under the laws of China, located at No. 5, Floor 6, Block A, SkyworthBuilding, Hi-tech Industrial Park, Nanshan District, Shenzhen, 518057, P.R.China; and WHEREAS, SHAREHOLDERS believe it is in their best interest to exchange theXHT Shares for shares of the Common Stock, par value $.001 per share, of CIEC(“CIEC Shares”), and CIEC believes it is in its best interests to acquire theXHT Shares in exchange for CIEC Shares, upon the terms and subject to theconditions set forth in this Agreement; WHEREAS, the parties desire this to be a tax-free exchange under theUnited States Internal Revenue Code of 1986, as amended, as of the date of thisAgreement; NOW, THEREFORE, in consideration of the mutual terms, conditions and otheragreements set forth herein, the parties hereto hereby agree as follows: ARTICLE I EXCHANGE OF SHARES FOR COMMON STOCK Section 1.1 Agreement to Exchange Shares for Common Stock. On the ClosingDate (as hereinafter defined) and upon the terms and subject to the conditionsset forth in this Agreement, SHAREHOLDERS shall sell, assign, transfer, conveyand deliver the XHT Shares (representing 50,000 XHT Shares or 100% of the issuedand outstanding XHT Shares), to CIEC, and CIEC shall accept the XHT Shares fromthe SHAREHOLDERS in exchange for the issuance to the SHAREHOLDERS of the numberof CIEC Shares set forth opposite the names of the SHAREHOLDERS on Exhibit Ahereto. Section 1.2 Capitalization. On the Closing Date, immediately before thetransactions to be consummated pursuant to this Agreement, CIEC shall haveauthorized (a) Sixty Million (60,000,000) CIEC Shares, of which 1,080,000 CIECShares have been issued and will be outstanding, and (b) One Million (1,000,000) 2shares of Preferred Stock, par value .001 per share, none of which shares shallbe issued and outstanding. Section 1.3 Closing. The closing of the exchange to be made pursuant tothis Agreement (the “Closing”) shall take place at 10:00 a.m. E.S.T. on thesecond business day after the conditions to closing set forth in Articles VI andVII have been satisfied or waived, or at such other time and date as the partieshereto shall agree in writing (the “Closing Date”), at the offices of GuzovOfsink Flink, LLC, 600 Madison Avenue, 14th Floor, New York, New York 10022. Atthe Closing, SHAREHOLDERS shall deliver to CIEC the stock certificatesrepresenting 100% of the XHT Shares, duly endorsed in blank for transfer oraccompanied by appropriate stock powers duly executed in blank. In fullconsideration and exchange for the XHT Shares, CIEC shall issue and exchangewith SHAREHOLDERS 9,000,000 CIEC Shares , representing 83.33% of the issued andoutstanding common stock of CIEC giving effect to the issuance of the CIECShares pursuant to this Agreement. ARTICLE II REPRESENTATIONS AND WARRANTIES OF CIEC CIEC hereby jointly and severally represents, warrants and agrees asfollows: Section 2.1 Corporate Organization a. CIEC is a corporation duly organized, validly existing and ingood standing under the laws of Delaware, and has all requisite corporate powerand authority to own its properties and assets and to conduct its business asnow conducted and is duly qualified to do business in good standing in eachjurisdiction in which the nature of the business conducted by CIEC or theownership or leasing of its properties makes such qualification and being ingood standing necessary, except where the failure to be so qualified and in goodstanding will not have a material adverse effect on the business, operations,properties, assets, condition or results of operation of CIEC (a “CIEC MaterialAdverse Effect”); b. Copies of the Articles of Incorporation and By-laws of CIEC, withall amendments thereto to the date hereof, have been furnished to XHT, and suchcopies are accurate and complete as of the date hereof. The minute books of CIECare current as required by law, contain the minutes of all meetings of the Boardof Directors of CIEC from its date of incorporation to the date of thisAgreement, and adequately reflect all material actions taken by the Board ofDirectors of CIEC. Section 2.2 Capitalization of CIEC. The authorized capital stock of CIECconsists of Sixty Million (60,000,000) Shares of common stock, $0.001 par valueper share, of which 1,080,000 shares are issued and outstanding, and One Million(1,000,000) Shares of Preferred Stock, par value per share .001 authorized, noneof which shares are issued or outstanding. The parties agree that they have beeninformed of the issuances of these CIEC Shares, and that all such issuances will 3be in accordance with the provisions of this Agreement. All of the CIEC Sharesto be issued immediately after the Closing have been duly authorized and will bevalidly issued, fully paid and non-assessable and no personal liability willattach to the ownership thereof. The CIEC Shares are the sole outstanding sharesof capital stock of CIEC, and there are no outstanding options, warrants,agreements, commitments, conversion rights, preemptive rights or other rights tosubscribe for, purchase or otherwise acquire any shares of capital stock or anyun-issued or treasury shares of capital stock of CIEC, except as set forth onSchedule 2.2 hereto. Section 2.3 Subsidiaries and Equity Investments. CIEC has no subsidiariesor equity interest in any corporation, partnership or joint venture, except asset forth in Schedule 2.3 hereto. Section 2.4 Authorization and Validity of Agreements. CIEC has allcorporate power and authority to execute and deliver this Agreement, to performits obligations hereunder and to consummate the transactions contemplatedhereby. The execution and delivery of this Agreement by CIEC and theconsummation by CIEC of the transactions contemplated hereby have been dulyauthorized by all necessary corporate action of CIEC, and no other corporateproceedings on the part of CIEC are necessary to authorize this Agreement or toconsummate the transactions contemplated hereby. Section 2.5 No Conflict or Violation. The execution, delivery andperformance of this Agreement by CIEC does not and will not violate or conflictwith any provision of the Articles of Incorporation or By-laws of CIEC, and doesnot and will not violate any provision of law, or any order, judgment or decreeof any court or other governmental or regulatory authority, nor violate nor willresult in a breach of or constitute (with due notice or lapse of time or both) adefault under, or give to any other entity any right of termination, amendment,acceleration or cancellation of, any contract, lease, loan agreement, mortgage,security agreement, trust indenture or other agreement or instrument to whichCIEC is a party or by which it is bound or to which any of their respectiveproperties or assets is subject, nor will it result in the creation orimposition of any lien, charge or encumbrance of any kind whatsoever upon any ofthe properties or assets of CIEC, nor will it result in the cancellation,modification, revocation or suspension of any of the licenses, franchises,permits to which CIEC is bound. Section 2.6 Consents and Approvals. Schedule 2.6 sets forth a true andcomplete list of each consent, waiver, authorization or approval of anygovernmental or regulatory authority, domestic or foreign, or of any otherperson, firm or corporation, and each declaration to or filing or registrationwith any such governmental or regulatory authority, that is required inconnection with the execution and delivery of this Agreement by CIEC or theperformance by CIEC of its obligations hereunder. Section 2.7 Absence of Certain Changes or Events. Since its inception andexcept as set forth on Schedule 2.7: a. CIEC has operated in the ordinary course of business consistent with past practice and there has not been any material adverse change in the assets, properties, business, operations, prospects, net income 4 or condition, financial or otherwise of CIEC. As of the date of this Agreement, CIEC does not know or have reason to know of any event, condition, circumstance or prospective development which threatens or may threaten to have a material adverse effect on the assets, properties, operations, prospects, net income or financial condition of CIEC; b. there has not been any declaration, setting aside or payment of dividends or distributions with respect to shares of capital stock of CIEC or any redemption, purchase or other acquisition of any capital stock of CIEC or any other of CIEC’S securities; and c. there has not been an increase in the compensation payable or to become payable to any director or officer of CIEC. Section 2.8 Tax Matters. All returns, reports, or information returns orother documents (including any relating or supporting information) required tobe filed before the Closing in respect of CIEC has been filed, are true,complete and correct and filed timely and CIEC has paid, accrued or otherwiseadequately reserved for the payment of all Taxes required to be paid in respectof the periods covered by such returns and has adequately reserved for thepayment of all Taxes with respect to periods ended on or before the Closing forwhich tax returns have not yet been filed. All Taxes of CIEC have been paid oradequately provided for and CIEC does not know or have any reason to know of anyproposed additional tax assessment against CIEC not adequately provided for inthe Financial Statements. No deficiency for any Taxes has been asserted orassessed by a taxing authority against CIEC and there is no outstanding auditexamination, deficiency or refund litigation with respect to any Taxes of CIEC.In the ordinary course, CIEC makes adequate provision on its books for thepayment of Taxes (including for any fiscal period which will include the date ofthis Agreement) owed by CIEC. CIEC has not executed an extension or waiver ofany statute of limitations on the assessment or collection of tax that iscurrently in effect. To the best of the knowledge of CIEC, there are no outstanding orcontingent tax liabilities for incorrect treatment of income and expenses ofCIEC. CIEC has not (a) waived any statute of limitations; (b) agreed to anyextension of the period for assessment or collection; or (c) executed or filedany power of attorney with respect to any Taxes, which waiver, agreement orpower of attorney is currently in force. “Taxes” shall, for purposes of this Agreement, mean all taxes, howeverdenominated, including any interest, penalties or addition to tax that maybecome payable in respect thereof, imposed by any governmental body which taxesshall include, without limiting the generality of the foregoing, all incometaxes, payroll and employee withholding taxes, unemployment insurance, socialsecurity, sales and use taxes, excise taxes, franchise taxes, receipts taxes,occupations taxes, real and personal property taxes, stamp taxes, transfertaxes, workman’s compensation taxes and any other obligation of the same or asimilar nature. 5 Section 2.9. Absence of Undisclosed Liabilities. Except as set forth onSchedule 2.9, CIEC has no indebtedness or liability, absolute or contingent,known or unknown. Section 2.10. Interests in Real Property. CIEC does not own any item ofreal property nor does it rent any property other than as set forth in Schedule2.10(a). Attached as Schedule 2.10(b) is a list of all accounts payable andliabilities as of CIEC as of the date of this Agreement. Section 2.11 Personal Property. CIEC owns all personal property (“CIECPersonal Property”) purported to be owned by it as of the date hereof, in eachcase free and clear of all liens, except for those liens described in Schedule2.11. Section 2.12 Compliance with Law. The operations of CIEC have beenconducted in accordance with all applicable laws, regulations, orders and otherrequirements of all courts and other governmental or regulatory authoritieshaving jurisdiction over CIEC and its assets, properties and operations. CIEChas not received notice of any violation of any such law, regulation, order orother legal requirement, and is not in default with respect to any order, writ,judgment, award, injunction or decree of any national, state or local court orgovernmental or regulatory authority or arbitrator, domestic or foreign,applicable to CIEC or any of its assets, properties or operations. Section 2.13. Litigation. Except as set forth on Schedule 2.13, there areno claims, actions, suits, proceedings, labor disputes or investigations pendingor, to the best knowledge of CIEC, threatened before any federal, state or localcourt or governmental or regulatory authority, domestic or foreign, or beforeany arbitrator of any nature, brought by or against CIEC or any of its officers,directors, employees, agents or affiliates involving, affecting or relating toany assets, properties or operations of CIEC or the transactions contemplated bythis Agreement, nor is any basis known to it for any such action, suit,proceeding or investigation. Schedule 2.13 sets forth a list and a summarydescription of all such pending actions, suits, proceedings, disputes orinvestigations. Neither CIEC nor any of its assets or properties is subject toany order, writ, judgment, award, injunction or decree of any country, judicial,state or local court or governmental or regulatory authority or arbitrator. Section 2.14 Contracts. Schedule 2.14 sets forth a true and complete listof all material contracts, agreements and other instruments to which CIEC is aparty or otherwise relating to or affecting any of its assets, properties oroperations. Section 2.15 Employee Plans. Schedule 2.15 lists every pension, savings,retirement, severance health, insurance or other employee benefit plan(collectively referred to herein as the “Plans”) which CIEC maintains, or hasany obligation to contribute to and CIEC is in compliance with such Plans. Section 2.16 Insurance. Schedule 2.16 lists the insurance and theaggregate coverage amount and type and generally applicable deductibles of allpolicies of title, liability, fire, casualty, business interruption, workers’compensation, disability and other forms of insurance insuring the properties,assets and operations of the business of CIEC. 6 Section 2.17 Labor Matters. CIEC is not a party to any outstandingemployment agreements or contracts with officers, directors or employees thatare not terminable at will, or that provide for the payment of any bonus orcommission. Section 2.18 Related Party Transactions. Except as set forth on Schedule2.18, no shareholder or affiliate of CIEC has borrowed any moneys from or hasoutstanding any indebtedness or other similar obligations to CIEC. Except as setforth in Schedule 2.18, no shareholder or affiliate of CIEC, nor any officer oremployee of any of them (i) owns any direct or indirect interest of any kind in,or controls or is a director, officer, employee or partner of, or consultant to,or lender to or borrower from or has the right to participate in the profits of,any person which is (a) a competitor, supplier, customer, landlord, tenant,creditor or debtor of CIEC, (b) engaged in a business related to the business ofCIEC, or (c) a participant in any transaction to which CIEC is a party or is aparty to any contract with CIEC. Section 2.19 Banks. Schedule 2.19 contains a complete and correct list ofthe names and locations of all banks in which CIEC has accounts or safe depositboxes and the names of all persons authorized to draw thereon or to have accessthereto. Except as set forth on Schedule 2.19, no person holds a power ofattorney to act on behalf of CIEC. Section 2.20 Disclosure. This Agreement, the schedules hereto and anycertificate attached hereto or delivered in accordance with the terms hereby byor on behalf of CIEC in connection with the transactions contemplated by thisAgreement, when taken together, do not contain any untrue statement of amaterial fact or omit any material fact necessary in order to make thestatements contained herein and/or therein not misleading. Section 2.21 Survival. Each of the representations and warranties setforth in this Article II shall be deemed represented and made by CIEC at theClosing as if made at such time and shall survive the Closing for a periodterminating on the second anniversary of the date of this Agreement. 7 ARTICLE III REPRESENTATIONS AND WARRANTIES OF XHT AND SHAREHOLDERS XHT, as to itself and as to HFT, and each of the SHAREHOLDERS, severally,represent, warrant and agree as follows: Section 3.1 Corporate Organization. a. XHT is a corporation duly organized, validly existing and in good standing under the laws of the Territory of the British Virgin Islands and has all requisite corporate power and authority to own its properties and assets and to conduct its business as now conducted and is duly qualified to do business in good standing in each jurisdiction in where the nature of the business conducted by XHT or the ownership or leasing of its properties makes such qualification and being in good standing necessary, except where the failure to be so qualified and in good standing will not have a material adverse effect on the business, operations, properties, assets, condition or results of operation of XHT (an “XHT Material Adverse Effect”). b. Copies of the Articles of Incorporation and By-laws of XHT, with all amendments thereto to the date hereof, have been furnished to CIEC, and such copies are accurate and complete as of the date hereof. The minute books of XHT are current as required by law, contain the minutes of all meetings of the Board of Directors of XHT, and committees of the Board of Directors of XHT from the date of incorporation to the date of this Agreement, and adequately reflect all material actions taken by the Board of Directors and committees of the Board of Directors of XHT. Section 3.2 Capitalization of XHT; Title to the XHT Shares. The authorizedcapital stock of XHT consists of 50,000 shares of common stock, $1.00 par valueper share, of which 100 shares are issued and outstanding. The XHT Shares arethe sole outstanding shares of capital stock of XHT, and there are nooutstanding options, warrants, agreements, commitments, conversion rights,preemptive rights or other rights to subscribe for, purchase or otherwiseacquire any shares of capital stock or any un-issued or treasury shares ofcapital stock of XHT. Section 3.3 Subsidiaries and Equity Investments. a. Schedule 3.3 sets forth: (i) the name of each corporation of which XHT will own at the date of Closing, directly or indirectly, shares of capital stock having in the aggregate 10% or more of the total combined voting power of the issued and outstanding shares of capital stock entitled to vote generally in the election of directors of such corporation (hereinafter referred to collectively as “Subsidiaries” and individually as a “Subsidiary”) (ii) the name of each corporation, partnership, joint 8 venture or other entity (other than the Subsidiaries) in which XHT has, or pursuant to any agreement has the right to acquire at any time by any means, directly or indirectly, an equity interest or investment; (iii) in the case of each of such corporations described in clauses (i) and (ii) above, (A) the jurisdiction of incorporation, (B) the capitalization thereof and the percentage of each class of capital voting stock owned by XHT, (C) a description of any contractual limitations on the holder’s ability to vote or alienate such securities, (D) a description of any outstanding options or other rights to acquire securities of such corporation, and (E) a description of any other contractual provision to which XHT is subject which would materially limit or impair any of XHT’s ownership of such entity or interest or its ability to effectively exercise the full rights of ownership of such entity or interest; and (iv) in the case of each of such unincorporated entities, information substantially equivalent to that provided pursuant to clause (iii) above with regard to corporate entities. b. Each Subsidiary is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation and has all requisite corporate power and authority to own its properties and assets and to conduct its business as now conducted. Each Subsidiary is duly qualified to do business as a foreign corporation in every jurisdiction in which the character of the properties owned or leased by it or the nature of the business conducted by it makes such qualification necessary and is duly qualified to do business in good standing in each jurisdiction in where the nature of the business conducted by XHT or the ownership or leasing of its properties makes such qualification and being in good standing necessary, except where the failure to be so qualified and in good standing will not have a material adverse effect on the business, operations, properties, assets, condition or results of operation of XHT. All the outstanding shares of capital stock of each Subsidiary have been duly authorized and validly issued, are fully paid and non-assessable. XHT owns of record and beneficially such amounts of securities of the Subsidiaries as are identified in Schedule 3.3 hereto and, aside from the items identified in Schedule 3.3, XHT owns such securities free and clear of any liens, claims, charges, security interests or other legal or equitable encumbrances, limitations or restrictions. There are no outstanding options, warrants, agreements, conversion rights, preemptive rights or other rights to subscribe for, purchase or otherwise acquire any issued or unissued shares of capital stock of any Subsidiary. Section 3.4 Authorization and Validity of Agreements. XHT has allcorporate power and authority to execute and deliver this Agreement, to performits obligations hereunder and to consummate the transactions contemplatedhereby. The execution and delivery of this Agreement by XHT and the consummationof the transactions contemplated hereby have been duly authorized by allnecessary corporate action and no other corporate proceedings on the part of XHTare necessary to authorize this Agreement or to consummate the transactionscontemplated hereby. The execution and delivery of this Agreement by eachSHAREHOLDER which is not a natural person (“Entity Shareholder”) and the 9consummation of the transactions contemplated hereby by each Entity Shareholderhave been duly authorized by all necessary action by the Entity Shareholder andno other proceedings on the part of XHT or any SHAREHOLDER are necessary toauthorize this Agreement or to consummate the transactions contemplated hereby. Section 3.5 No Conflict or Violation. Except as otherwise set forth onSchedule 3.5, the execution, delivery and performance of this Agreement by XHTor any SHAREHOLDER does not and will not violate or conflict with any provisionof the constating documents of XHT, and does not and will not violate anyprovision of law, or any order, judgment or decree of any court or othergovernmental or regulatory authority, nor violate nor will result in a breach ofor constitute (with due notice or lapse of time or both) a default under or giveto any other entity any right of termination, amendment, acceleration orcancellation of any contract, lease, loan agreement, mortgage, securityagreement, trust indenture or other agreement or instrument to which XHT is aparty or by which it is bound or to which any of its respective properties orassets is subject, nor will result in the creation or imposition of any lien,charge or encumbrance of any kind whatsoever upon any of the properties orassets of XHT, nor will result in the cancellation, modification, revocation orsuspension of any of the licenses, franchises, permits to which XHT is bound. Section 3.6 XHT Financial Statements. XHT has heretofore furnished to CIECaudited financial statements of HTF as of and for the years ended on December31, 2002 and December 31, 2003, accompanied by the reports thereon of HTF’sauditors, and the unaudited financial statements of HTF for the period endedSeptember 30, 2004 (the “HTF Financial Statements”). The HTF FinancialStatements, including the notes thereto: a. were prepared in accordance with United States generally accepted accounting principles (“US GAAP”); and B. present fairly, in all material respects, the financial position, results of operations and changes in financial position of HTF as of such dates and for the periods then ended. Section 3.7. Absence of Certain Changes or Events. Since December 30,2003, and except: i. as contemplated by this Agreement; or ii. as set forth on Schedule 3.7: a. XHT and HFT have operated in the ordinary course of business consistent with past practice and there has not been any material adverse change in the assets, properties, business, operations, prospects, net income or condition, financial or otherwise of 10 either. XHT does not know or has reason to know of any event, condition, circumstance or prospective development which threatens or may threaten to have a material adverse effect on the assets, properties, operations, prospects, net income or financial condition of XHT or HFT; b. There has not been any substantive change in any method of accounting or accounting practice of XHT or HFT; c. there have not been any declaration, setting aside or payment of dividends or distributions with respect to shares of capital stock of XHT or HFT or any redemption, purchase or other acquisition of any capital stock of XHT or HFT or any other of their securities; and d. there has not been increase in the compensation payable or to become payable to any director, officer or employee of XHT or HFT other than pursuant to employment agreements or consistent with prior past practices. Section 3.8 Tax Matters. All returns, reports, or information return orother document (including any relating or supporting information) required to befiled before the Closing in respect of XHT and HFT have been filed, and each haspaid, accrued or otherwise adequately reserved for the payment of all Taxesrequired to be paid in respect of the periods covered by such returns and hasadequately reserved for the payment of all Taxes with respect to periods endedon or before the Closing for which tax returns have not yet been filed. To the best of the knowledge of XHT and the SHAREHOLDERS, there are nooutstanding or contingent tax liabilities for incorrect treatment of income andexpenses of XHT or HFT. Neither XHT, noir HFT has (a) waived any statute oflimitations; (b) agreed to any extension of the period for assessment orcollection; or (c) executed or filed any power of attorney with respect to anyTaxes, which waiver, agreement or power of attorney is currently in force. Section 3.9 Absence of Undisclosed Liabilities. Except as set forth onSchedule 3.9, XHT and HFT have no indebtedness or liability, absolute orcontingent, known or unknown, which is not shown or provided for on the balancesheet of HTF as of September 30, 2004 (the “HTF Balance Sheet Date”), other thanliabilities incurred or accrued in the ordinary course of business since the HTFBalance Sheet Date. Except as shown in such balance sheet as of the HTF BalanceSheet Date or in the notes to the HTF Financial Statements, XHT and HFT are notdirectly or indirectly liable upon or with respect to (by discount, repurchaseagreements or otherwise), or obligated in any other way to provide funds inrespect of, or to guarantee or assume, any debt, obligation or dividend of anyperson, except endorsements in the ordinary course of business in connectionwith the deposit of items for collection. Section 3.10 Interests in Real Property. HFT owns all real propertypurported to be owned by it as of the date hereof, in each case free and clearof all liens, except for those liens described in Schedule 3.10. Section 3.11 Compliance with Law. The operations of XHT and HFT have beenconducted in accordance with all applicable laws, regulations, orders and otherrequirements of all courts and other governmental or regulatory authoritieshaving jurisdiction over XHT, HFT and their assets, properties and operations, 11including, without limitation, all such laws, regulations, orders andrequirements promulgated by or relating to consumer protection, equalopportunity, health, environmental protection, architectural barriers to thehandicapped, fire, zoning and building and occupation safety except where suchnon-compliance would not have a XHT Material Adverse Effect. XHT and HFT havenot received notice of any violation of any such law, regulation, order or otherlegal requirement, and is not in default with respect to any order, writ,judgment, award, injunction or decree of any national, state or local court orgovernmental or regulatory authority or arbitrator, domestic or foreign,applicable to XHT or HFT or any of their assets, properties or operations. Section 3.12 Litigation. Except as disclosed in Schedule 3.12, there areno claims, actions, suits, proceedings, labor disputes or investigations pendingor, to the best of the XHT’S knowledge, threatened before any federal, state orlocal court or governmental or regulatory authority, domestic or foreign, orbefore any arbitrator of any nature, brought by or against XHT, HFT or any oftheir officers, directors, employees, agents or affiliates involving, affectingor relating to any assets, properties or operations of XHT or HFT or thetransactions contemplated by this Agreement, nor is any basis known to XHT forany such action, suit, proceeding or investigation. Schedule 3.12 sets forth alist and a summary description of all such pending actions, suits, proceedings,disputes or investigations. Neither XHT, HFT, nor any of their assets orproperties is subject to any order, writ, judgment, award, injunction or decreeof any federal, state or local court or governmental or regulatory authority orarbitrator, that would have a XHT Material Adverse Effect on its assets,properties, operations, prospects, net income or financial condition or whichwould or might interfere with the transactions contemplated by this Agreement. Section 3.13 Investment Intent. The CIEC Shares will be acquired hereundersolely for the account of the SHAREHOLDERS, for investment, and not with a viewto the resale or distribution thereof. Section 3.14 Disclosure. This Agreement, the schedules hereto and anycertificate attached hereto or delivered in accordance with the terms hereby byor on behalf of XHT or the SHAREHOLDERS in connection with the transactionscontemplated by this Agreement, when taken together, do not contain any untruestatement of a material fact or omit any material fact necessary in order tomake the statements contained herein and/or therein not misleading. Section 3.15 Survival. Each of the representations and warranties setforth in this Article III shall be deemed represented and made by XHT and theSHAREHOLDERS at the Closing as if made at such time and shall survive theClosing for a period terminating on the second anniversary. 12 ARTICLE IV COVENANTS Section 4.1 Certain Changes and Conduct of Business. a. From and after the date of this Agreement and until the Closing Date, XHT and HFT shall conduct their business solely in the ordinary course consistent with past practices and, in a manner consistent with all representations, warranties or covenants of XHT, and without the prior written consent of CIEC, XHT and HFT will not, except as required or permitted pursuant to the terms hereof: i. make any material change in the conduct of its businesses and/or operations or enter into any transaction other than in the ordinary course of business consistent with past practices; ii. make any change in its Articles of Incorporation or By-laws; issue any additional shares of capital stock or equity securities or grant any option, warrant or right to acquire any capital stock or equity securities or issue any security convertible into or exchangeable for its capital stock or alter in any material term of any of its outstanding securities or make any change in its outstanding shares of capital stock or its capitalization, whether by reason of a reclassification, recapitalization, stock split or combination, exchange or readjustment of shares, stock dividend or otherwise; iii. A. incur, assume or guarantee any indebtedness for borrowed money, issue any notes, bonds, debentures or other corporate securities or grant any option, warrant or right to purchase any thereof, except pursuant to transactions in the ordinary course of business consistent with past practices; or B. issue any securities convertible or exchangeable for debt securities of XHT or HFT; iv. make any sale, assignment, transfer, abandonment or other conveyance of any of its assets or any part thereof, except pursuant to transactions in the ordinary course of business consistent with past practice; v. subject any of its assets, or any part thereof, to any lien or suffer such to be imposed other than such liens as may arise in the ordinary course of business consistent with past practices by operation of law which will not have an XHT Material Adverse Effect; 13 vi. acquire any assets, raw materials or properties, or enter into any other transaction, other than in the ordinary course of business consistent with past practices; vii. enter into any new (or amend any existing) employee benefit plan, program or arrangement or any new (or amend any existing) employment, severance or consulting agreement, grant any general increase in the compensation of officers or employees (including any such increase pursuant to any bonus, pension, profit-sharing or other plan or commitment) or grant any increase in the compensation payable or to become payable to any employee, except in accordance with pre-existing contractual provisions or consistent with past practices; viii. make or commit to make any material capital expenditures; ix. pay, loan or advance any amount to, or sell, transfer or lease any properties or assets to, or enter into any agreement or arrangement with, any of its affiliates; x. guarantee any indebtedness for borrowed money or any other obligation of any other person; xi. fail to keep in full force and effect insurance comparable in amount and scope to coverage maintained by it (or on behalf of it) on the date hereof; xii. take any other action that would cause any of the representations and warranties made by it in this Agreement not to remain true and correct in all material aspect; xiii. make any material loan, advance or capital contribution to or investment in any person; xiv. make any material change in any method of accounting or accounting principle, method, estimate or practice; xv. settle, release or forgive any claim or litigation or waive any right; xvi. commit itself to do any of the foregoing.b. From and after the date of this Agreement, XHT and HFT will: 1. continue to maintain, in all material respects, its properties in 14 accordance with present practices in a condition suitable for its current use; 2. file, when due or required, federal, state, foreign and other tax returns and other reports required to be filed and pay when due all taxes, assessments, fees and other charges lawfully levied or assessed against it, unless the validity thereof is contested in good faith and by appropriate proceedings diligently conducted; 3. continue to conduct its business in the ordinary course consistent with past practices; 4. keep its books of account, records and files in the ordinary course and in accordance with existing practices; and 5. continue to maintain existing business relationships with suppliers. Section 4.2 Access to Properties and Records. CIEC shall afford XHT’Saccountants, counsel and authorized representatives, and XHT shall afford toCIEC’S accountants, counsel and authorized representatives full access duringnormal business hours throughout the period prior to the Closing Date (or theearlier termination of this Agreement) to all of such parties’ properties,books, contracts, commitments and records and, during such period, shall furnishpromptly to the requesting party all other information concerning the otherparty’s business, properties and personnel as the requesting party mayreasonably request, provided that no investigation or receipt of informationpursuant to this Section 4.2 shall affect any representation or warranty of orthe conditions to the obligations of any party. Section 4.3 Negotiations. From and after the date hereof until the earlierof the Closing or the termination of this Agreement, no party to this Agreementnor its officers or directors (subject to such director’s fiduciary duties) noranyone acting on behalf of any party or other persons shall, directly orindirectly, encourage, solicit, engage in discussions or negotiations with, orprovide any information to, any person, firm, or other entity or groupconcerning any merger, sale of substantial assets, purchase or sale of shares ofcapital stock or similar transaction involving any party,. A party shallpromptly communicate to any other party any inquiries or communicationsconcerning any such transaction which they may receive or of which they maybecome aware of. Section 4.4 Consents and Approvals. The parties shall: i. use their reasonable commercial efforts to obtain all necessary consents, waivers, authorizations and approvals of all governmental and regulatory authorities, domestic and foreign, and of all other persons, firms or corporations required in connection with the execution, delivery and performance by them of this Agreement; and 15 ii. diligently assist and cooperate with each party in preparing and filing all documents required to be submitted by a party to any governmental or regulatory authority, domestic or foreign, in connection with such transactions and in obtaining any governmental consents, waivers, authorizations or approvals which may be required to be obtained connection with such transactions. Section 4.5 Public Announcement. Unless otherwise required by applicablelaw, the parties hereto shall consult with each other before issuing any pressrelease or otherwise making any public statements with respect to this Agreementand shall not issue any such press release or make any such public statementprior to such consultation.. Section 4.6 Stock Issuance. From and after the date of this Agreementuntil the Closing Date, neither CIEC nor XHT shall issue any additional sharesof its capital stock. Section 4.7 Notwithstanding anything to the contrary contained herein, itis herewith understood and agreed that both CIEC and XHT may enter into andconclude agreements and/or financing transactions as same relate to and/or arecontemplated by any separate written agreements either: (a) annexed hereto asexhibits; or (b) entered into by XHT with CIEC executed by both partiessubsequent to the date hereof. These Agreements shall become, immediately uponexecution, part of this Agreement and subject to all warranties, representationsand conditions contained herein. Section 4.8 Prior to the Closing CIEC shall adopt By-laws of CIEC whichshall contain provisions to the effect that (a) so long as a nominee of AmericanUnion Securities, Inc. (“AUS”) is entitled to have one designee of AUS electedas a director of CIEC (the “AUS Nominee”), CIEC shall not issue or commit toissue any securities without the consent of the AUS Nominee and (b) such By-lawprovision shall not be amended or deleted without the consent of AUS. The AUSNominee shall have been duly elected as a director of CIEC on or prior to theClosing Date. ARTICLE V CONDITIONS TO OBLIGATIONS OF XHT The obligations of XHT to consummate the transactions contemplated by thisAgreement are subject to the fulfillment, at or before the Closing Date, of thefollowing conditions, any one or more of which may be waived by XHT in its solediscretion: Section 5.1 Representations and Warranties of CIEC. All representationsand warranties made by CIEC in this Agreement shall be true and correct on andas of the Closing Date as if again made by CIEC as of such date. Section 5.2 Agreements and Covenants. CIEC shall have performed andcomplied in all material respects to all agreements and covenants required by 16this Agreement to be performed or complied with by it on or prior to the ClosingDate. Section 5.3 Consents and Approvals. Consents, waivers, authorizations andapprovals of any governmental or regulatory authority, domestic or foreign, andof any other person, firm or corporation, required in connection with theexecution, delivery and performance of this Agreement shall be in full force andeffect on the Closing Date. Section 5.4 No Violation of Orders. No preliminary or permanent injunctionor other order issued by any court or governmental or regulatory authority,domestic or foreign, nor any statute, rule, regulation, decree or executiveorder promulgated or enacted by any government or governmental or regulatoryauthority, which declares this Agreement invalid in any respect or prevents theconsummation of the transactions contemplated hereby, or which materially andadversely affects the assets, properties, operations, prospects, net income orfinancial condition of CIEC shall be in effect; and no action or proceedingbefore any court or governmental or regulatory authority, domestic or foreign,shall have been instituted or threatened by any government or governmental orregulatory authority, domestic or foreign, or by any other person, or entitywhich seeks to prevent or delay the consummation of the transactionscontemplated by this Agreement or which challenges the validity orenforceability of this Agreement. Section 5.5 Other Closing Documents. XHT shall have received such othercertificates, instruments and documents in confirmation of the representationsand warranties of CIEC or in furtherance of the transactions contemplated bythis Agreement as XHT or its counsel may reasonably request. Section 5.6 Audited Financial Statements. XHT acknowledges that CIEC hasno operating history and will not provide any audited financial statements. ARTICLE VI CONDITIONS TO OBLIGATIONS OF CIEC The obligations of CIEC to consummate the transactions contemplated bythis Agreement are subject to the fulfillment, at or before the Closing Date, ofthe following conditions, any one or more of which may be waived by CIEC in itssole discretion,. Section 6.1 Representations and Warranties of XHT. All representations andwarranties made by XHT in this Agreement shall be true and correct on and as ofthe Closing Date as if again made by XHT on and as of such date. Section 6.2 Agreements and Covenants. XHT shall have performed andcomplied in all material respects to all agreements and covenants required bythis Agreement to be performed or complied with by it on or prior to the ClosingDate. Section 6.3 Consents and Approvals. All consents, waivers, authorizationsand approvals of any governmental or regulatory authority, domestic or foreign, 17and of any other person, firm or corporation, required in connection with theexecution, delivery and performance of this Agreement, shall have been dulyobtained and shall be in full force and effect on the Closing Date. Section 6.4 No Violation of Orders. No preliminary or permanent injunctionor other order issued by any court or other governmental or regulatoryauthority, domestic or foreign, nor any statute, rule, regulation, decree orexecutive order promulgated or enacted by any government or governmental orregulatory authority, domestic or foreign, that declares this Agreement invalidor unenforceable in any respect or which prevents the consummation of thetransactions contemplated hereby, or which materially and adversely affects theassets, properties, operations, prospects, net income or financial condition ofXHT and its subsidiaries, taken as a whole, shall be in effect; and no action orproceeding before any court or government or regulatory authority, domestic orforeign, shall have been instituted or threatened by any government orgovernmental or regulatory authority, domestic or foreign, or by any otherperson, or entity which seeks to prevent or delay the consummation of thetransactions contemplated by this Agreement or which challenges the validity orenforceability of this Agreement. Section 6.5. Other Closing Documents. CIEC shall have received such othercertificates, instruments and documents in confirmation of the representationsand warranties of XHT or in furtherance of the transactions contemplated by thisAgreement as CIEC or its counsel may reasonably request. ARTICLE VII TERMINATION AND ABANDONMENT SECTION 7.1 Methods of Termination. This Agreement may be terminated andthe transactions contemplated hereby may be abandoned at any time before theClosing: a. By the mutual written consent of SHAREHOLDERS, CIEC and XHT; b. By XHT, upon a material breach of any representation, warranty, covenant or agreement on the part of CIEC set forth in this Agreement, or if any representation or warranty of CIEC shall become untrue, in either case such that any of the conditions set forth in Article V hereof would not be satisfied (a “CIEC Breach”), and such breach shall, if capable of cure, have not been cured within ten (10) days after receipt by the party in breach of a notice from the non-breaching party setting forth in detail the nature of such breach; c. By CIEC, upon a material breach of any representation, warranty, covenant or agreement on the part of XHT or the SHAREHOLDERS set forth in this Agreement, or, if any 18 representation or warranty of XHT or the SHAREHOLDERS shall become untrue, in either case such that any of the conditions set forth in Article VI hereof would not be satisfied (a “XHT Breach”), and such breach shall, if capable of cure, not have been cured within ten (10) days after receipt by the party in breach of a written notice from the non-breaching party setting forth in detail the nature of such breach; d. By either XHT or CIEC, if the Closing shall not have consummated before ninety (90) days after the date hereof; provided, however, that this Agreement may be extended by written notice of either CIEC or XHT, if the Closing shall not have been consummated as a result of XHT or CIEC having failed to receive all required regulatory approvals or consents with respect to this transaction or as the result of the entering of an order as described in this Agreement; and further provided, however, that the right to terminate this Agreement under this Section 7.1(d) shall not be available to any party whose failure to fulfill any obligations under this Agreement has been the cause of, or resulted in, the failure of the Closing to occur on or before this date. e. By either CIEC or XHT if a court of competent jurisdiction or governmental, regulatory or administrative agency or commission shall have issued an order, decree or ruling or taken any other action (which order, decree or ruling the parties hereto shall use its best efforts to lift), which permanently restrains, enjoins or otherwise prohibits the transactions contemplated by this Agreement. Section 7.2 Procedure Upon Termination. In the event of termination andabandonment of this Agreement by CIEC or XHT pursuant to Section 7.1, writtennotice thereof shall forthwith be given to the other parties and this Agreementshall terminate and the transactions contemplated hereby shall be abandoned,without further action. If this Agreement is terminated as provided herein, noparty to this Agreement shall have any liability or further obligation to anyother party to this Agreement; provided, however, that no termination of thisAgreement pursuant to this Article VII shall relieve any party of liability fora breach of any provision of this Agreement occurring before such termination. 19 ARTICLE VIII POST-CLOSING AGREEMENTS Section 8.1 Consistency in Reporting. Each party hereto agrees that: i. the transaction is intended to qualify as a tax-free transaction under the Code; ii. if the characterization of any transaction contemplated in this agreement or any ancillary or collateral transaction is challenged, each party hereto will testify, affirm and ratify that the characterization contemplated in such agreement was with the characterization intended by the party; provided, however, that nothing herein shall be construed as giving rise to any obligation if the reporting position is determined to be incorrect by final decision of a court of competent jurisdiction. Section 8.2 Indemnification. a. Obligation of CIEC to Indemnify. CIEC hereby agrees to indemnify, defend and hold harmless XHT, the SHAREHOLDERS and their respective directors, officers, equity holders, agents, affiliates, successors and permitted assigns or each of them from and against, and shall pay and/or reimburse the foregoing persons for, any and all losses, liabilities, claims, obligations, damages and costs and expenses (including reasonable attorneys’ fees and disbursements and other costs incurred or sustained by an Indemnitee (as defined below) in connection with the investigation, defense or prosecution of any such claim or any action or proceeding between the Indemnitee and the Indemnifying Party (as defined below) or between the Indemnitee and any third party or otherwise), whether or not involving a third-party claim (collectively, “Losses”), relating to or arising out of the breach of any representation, warranty, covenant or agreement of CIEC hereunder. b. Obligation of XHT to Indemnify. XHT and the SHAREHOLDERS shall jointly and severally indemnify, defend and hold harmless CIEC and its directors, officers, shareholders, agents, affiliates, successors and permitted assigns from and against, and shall pay and/or reimburse the foregoing persons for, any and all Losses relating to or arising out of the breach of any representation, warranty, covenant or agreement of XHT or the SHAREHOLDERS contained in this Agreement. c. Notice to Indemnifying Party. If any party (the “Indemnitee”) receives notice of any claim or the commencement of any action or proceeding with respect to which the other party (or parties) is obligated to provide indemnification (the “Indemnifying Party”) pursuant to Sections 8.2(a) or 8.2(b) hereof, the Indemnitee shall give the Indemnifying Party written notice thereof within a reasonable period of time following the Indemnitee’s receipt of such notice. Such notice shall describe the claim in reasonable detail and shall indicate the amount (estimated if necessary) of the Losses that have been or may be sustained by the Indemnitee. The Indemnifying Party may, subject to the other provisions of this Section 8.2(c), compromise or defend, at such Indemnifying Party’s own expense and by such Indemnifying Party’s own counsel, any such matter involving the asserted liability of the Indemnitee in respect 20 of a third-party claim. If the Indemnifying Party elects to compromise or defend such asserted liability, it shall within thirty (30) days (or sooner, if the nature of the asserted liability so requires) notify the Indemnitee of its intent to do so, and the Indemnitee, shall reasonably cooperate, at the request and reasonable expense of the Indemnifying Party, in the compromise of, or defense against, such asserted liability. The Indemnifying Party will not be released from any obligation to indemnify the Indemnitee hereunder with respect to a claim without the prior written consent of the Indemnitee, unless the Indemnifying Party delivers to the Indemnitee a duly executed agreement settling or compromising such claim with no monetary liability to or injunctive relief against the Indemnitee and a complete release of the Indemnitee with respect thereto. The Indemnifying Party shall have the right to conduct and control the defense of any third-party claim made for which it has been provided notice hereunder. All costs and fees incurred with respect to any such claim will be borne by the Indemnifying Party. The Indemnitee will have the right to participate, but not control, at its own expense, the defense or settlement of any such claim; provided, that if the Indemnitee and the Indemnifying Party shall have conflicting claims or defenses, the Indemnifying Party shall not have control of such conflicting claims or defenses and the Indemnitee shall be entitled to appoint a separate counsel for such claims and defenses at the cost and expense of the Indemnifying Party. If the Indemnifying Party chooses to defend any claim, the Indemnitee shall make available to the Indemnifying Party any books, records or other documents within its control that are reasonably required for such defense. d. Adjustment to Indemnification. Notwithstanding anything contained in this Section 8.2 to the contrary, no Indemnifying Party will be obligated to indemnify an Indemnitee and hold it harmless from and against any punitive, consequential or indirect damages, or any asserted or established claim for any damages which provides for recovery based on any multiple of losses, multiple of lost profits or multiple of lost anticipated profits. The determination of any loss for which indemnification may be claimed under this Section 8.2 shall be net of any tax (or other) benefit derived, insurance proceeds or third party reimbursement received or recoverable (but adjusted for any tax incurred as a result of the receipt of such amounts) by the party bearing such liability, claim, lien, encumbrance, charge, fine or penalty as a result thereof. The sole remedy of the parties hereto for any and all claims of the nature described in this Section 8.2 hereof shall be the indemnity set forth in such section. Section 8.3 Registration of Resale of CIEC Shares by SHAREHOLDERS. Withina reasonable time after the Closing Date, CIEC shall file a registrationstatement with the SEC to to register for resale all of the CIEC Shares acquiredby the SHAREHOLDERS pursuant to this Agreement. CIEC shall bear all costs inconnection such registration of the CIEC Shares, except underwriting discountsand commissions. CIEC shall use its best efforts to have the registrationstatement declared effective by the SEC within 150 days after the Closing Date 21and to keep such registration statement effective for a period ending two yearsafter the Closing Date. CIEC and the SHAREHOLDERS agree to exchange allcustomary indemnification covenants in connection with the registrationstatement and to provide all necessary cooperation in connection with thepreparation and filing of the registration statement. Section 8.4 AUS Nominee and Board Observer Rights. For a period commencingon the Closing Date and ending on the first anniversary thereof, AUS shall beentitled to nominate for election to the Board of Directors of CIEC one person.CIEC and the SHAREHOLDERS shall cause the nominee to be elected on or prior tothe Closing Date, and if for any reason from time to time AUS shall desire tochange the AUS Nominee, to use their best efforts to promptly elect the newdesignee of AUS. So long as the AUS and its officers, directors and employeescontinues to own CIEC Shares which constitute 5% or more of the outstanding CIECShares and a designee of AUS is not then a director of CIEC, CIEC agrees thatAUS shall have the right to appoint a non-voting representative (the “Observer”)to attend meetings of the Board of Directors of CIEC, to change therepresentative so appointed at any time and, upon the resignation of suchrepresentative for any reason, to reappoint such a representative. CIEC shallprovide the Observer with a copy of any materials to be distributed or discussedat such meetings at the same time as provided to members of the Board. Nothingherein shall require CIEC to change the place or time of any meeting for whichnotice has been provided by CIEC to the Observer simultaneously with thatprovided to CIEC’s directors ARTICLE IX MISCELLANEOUS PROVISIONS Section 9.1 Survival of Provisions. The respective representations,warranties, covenants and agreements of each of the parties to this Agreement(except covenants and agreements which are expressly required to be performedand are performed in full on or before the Closing Date) shall survive theClosing Date and the consummation of the transactions contemplated by thisAgreement, subject to Sections 2.21, 3.15 and 8.2. In the event of a breach ofany of such representations, warranties or covenants, the party to whom suchrepresentations, warranties or covenants have been made shall have all rightsand remedies for such breach available to it under the provisions of thisAgreement or otherwise, whether at law or in equity, regardless of anydisclosure to, or investigation made by or on behalf of such party on or beforethe Closing Date. Section 9.2 Publicity. No party shall cause the publication of any pressrelease or other announcement with respect to this Agreement or the transactionscontemplated hereby without the consent of the other parties, unless a pressrelease or announcement is required by law. If any such announcement or otherdisclosure is required by law, the disclosing party agrees to give thenon-disclosing parties prior notice and an opportunity to comment on theproposed disclosure. Section 9.3 Successors and Assigns. . This Agreement shall inure to thebenefit of, and be binding upon, the parties hereto and their respectivesuccessors and assigns; provided, however, that no party shall assign or 22delegate any of the obligations created under this Agreement without the priorwritten consent of the other parties. Section 9.4 Investment Bankers, Financial Advisors, Brokers and Finders. a. CIEC represents and warrants to XHT that it has not employed the services of a broker or finder in connection with this Agreement or any of the transactions contemplated hereby. b. XHT represents and warrants to CIEC that except for Warner Technology and Investment Corp. (“Warner”) and AUS, it has not employed the services of an investment banker, financial advisor, broker and finder in connection with this Agreement and transaction. Warner and AUD have received for a nominal consideration an allocation of shares of CIEC. XHT acknowledges and agrees that, except for such allocation of shares, XHT is solely responsible for all fees of XHT and HTF in connection herewith and therewith. Section 9.5 Fees and Expenses. Except as otherwise expressly provided inthis Agreement, all legal and other fees, costs and expenses incurred inconnection with this Agreement and the transactions contemplated hereby shall bepaid by the party incurring such fees, costs or expenses. Section 9.6 Notices. All notices and other communications given or madepursuant hereto shall be in writing and shall be deemed to have been given ormade if in writing and delivered personally or sent by registered or certifiedmail (postage prepaid, return receipt requested) to the parties at the followingaddresses: If to XHT, to: Mr. Yuan Qing Li Heng Xing Technology Group Development Limited, and Shenzhen Hengtaifeng Technology Co., Ltd. No. 5 Floor 6, Block A Skyworth Building Hi-tech Industrial Park Nanshan District Shenzhen 518057 P.R. China with a copy to: American Union Securities, Inc. 100 Wall Street, 15th Floor New York, New York 10005 Fax: 212-785-5867 23 If to CIEC, to: China International Enterprises Corp. No. 5 Floor 6, Block A Skyworth Building Hi-tech Industrial Park Nanshan District Shenzhen 518057 P.R. China Attention: Mr. Yuan Qing Li with a copy to: American Union Securities, Inc. 100 Wall Street, 15th Floor New York, New York 10005 Fax: 212-785-5867or to such other persons or at such other addresses as shall be furnished by anyparty by like notice to the others, and such notice or communication shall bedeemed to have been given or made as of the date so delivered or mailed. Nochange in any of such addresses shall be effective insofar as notices under thisSection 9.6 are concerned unless such changed address is located in the UnitedStates of America and notice of such change shall have been given to such otherparty hereto as provided in this Section 9.6. Section 9.7 Entire Agreement. This Agreement, together with the exhibitshereto, represents the entire agreement and understanding of the parties withreference to the transactions set forth herein and no representations orwarranties have been made in connection with this Agreement other than thoseexpressly set forth herein or in the exhibits, certificates and other documentsdelivered in accordance herewith. This Agreement supersedes all priornegotiations, discussions, correspondence, communications, understandings andagreements between the parties relating to the subject matter of this Agreementand all prior drafts of this Agreement, all of which are merged into thisAgreement. No prior drafts of this Agreement and no words or phrases from anysuch prior drafts shall be admissible into evidence in any action or suitinvolving this Agreement. Section 9.8 Severability. This Agreement shall be deemed severable, andthe invalidity or unenforceability of any term or provision hereof shall notaffect the validity or enforceability of this Agreement or of any other term orprovision hereof. Furthermore, in lieu of any such invalid or unenforceable termor provision, the parties hereto intend that there shall be added as a part ofthis Agreement a provision as similar in terms to such invalid or unenforceableprovision as may be possible so as to be valid and enforceable. Section 9.9 Titles and Headings. The Article and Section headingscontained in this Agreement are solely for convenience of reference and shall 24not affect the meaning or interpretation of this Agreement or of any term orprovision hereof. Section 9.10 Counterparts. This Agreement may be executed in two or morecounterparts, each of which shall be deemed an original and all of whichtogether shall be considered one and the same agreement. Section 9.11 Convenience of Forum; Consent to Jurisdiction. The parties tothis Agreement, acting for themselves and for their respective successors andassigns, without regard to domicile, citizenship or residence, hereby expresslyand irrevocably elect as the sole judicial forum for the adjudication of anymatters arising under or in connection with this Agreement, and consent andsubject themselves to the jurisdiction of, the courts of the State of New Jerseylocated in County of New York, and/or the United States District Court for theSouthern District of New York, in respect of any matter arising under thisAgreement. Service of process, notices and demands of such courts may be madeupon any party to this Agreement by personal service at any place where it maybe found or giving notice to such party as provided in Section 9.6. Section 9.12 Enforcement of the Agreement. The parties hereto agree thatirreparable damage would occur if any of the provisions of this Agreement werenot performed in accordance with their specific terms or were otherwisebreached. It is accordingly agreed that the parties shall be entitled to aninjunction or injunctions to prevent breaches of this Agreement and to enforcespecifically the terms and provisions hereto, this being in addition to anyother remedy to which they are entitled at law or in equity. Section 9.13 Governing Law. This Agreement shall be governed by andinterpreted and enforced in accordance with the laws of the State of New Jerseywithout giving effect to the choice of law provisions thereof. Section 9.14 Third Party Beneficiary. AUS is a third party beneficiary ofthis Agreement. Except for AUS, no person is a third party beneficiary of thisAgreement. 25 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as ofthe date first above written.HENG XING TECHNOLOGY GROUPDEVELOPMENT LIMITEDBy: /s/ Wu Ying ———————-Title: Authorized SignatoryCHINA INTERNATIONALENTERPRISES CORP.By: /s/ Li Yuan Qing ———————- Li Yuan QingTitle: Chief Executive OfficerBy: /s/ Li Yuan Qing ———————- Li Yuan Qing /s/ Qiu Zhen Liang ———————- Qiu Zhen Liang /s/ Chen Ling ———————- Chen Ling 26 EXHIBIT A

Name and Address Number of XHT Shares Number of CIEC Sharesof SHAREHOLDER Being Exchanged to be Received- ————– ——————— Li Yuan Qing 60 5,400,000Suite 2911-2912, 29th FloorTwo International Finance CentreNo. 8 Finance StreetCentral, Hong KongQiu Zhen Liang 30 2,700,000Building 86-306Yuanling XincunFutian DistrictShenzhen, PRCChen Ling 10 900,0005-402 Chiwei BuildingSouth Huaquiang RoadShenzhen, PRC

27 SCHEDULES2.2 None2.3 None2.6 None2.7 None2.9 None2.11 None2.13 None2.14 None2.15 None2.16 None2.18 None2.19 None3.3 XHT owns 1005 of HFT, a corporation formed in Shenzhen Province, China3.5 None3.7 None3.10 None3.12 None 28