PLAN OF EXCHANGE
BY WHICH
XENICENT, INC.
(A NORTH CAROLINA CORPORATION)
SHALL ACQUIRE
HEILONGJIANG PINGCHUAN ▇▇ ▇▇▇▇ ▇▇
▇▇▇ YOU ▇▇▇▇ ▇▇▇▇ SI
(A CORPORATION ORGANIZED UNDER THE LAWS OF THE PEOPLES' REPUBLIC OF CHINA)
I. RECITALS 1
1. The Parties to this Agreement: 1
(1.1) Xenicent, Inc. 1
(1.2) Heilongjiang Pingchuan ▇▇ ▇▇▇▇ ▇▇ ▇▇▇ You ▇▇▇▇ ▇▇▇▇ Si 1
(1.3) ▇▇▇▇▇ ▇▇▇▇▇▇▇ 1
2. Capital of the Parties: 1
(2.1) The Capital of XCEN 1
(2.2) The Capital of Heilongjiang Pingchuan ▇▇
▇▇▇▇ ▇▇ ▇▇▇ You ▇▇▇▇ ▇▇▇▇ Si 1
3. Transaction Descriptive Summary: 1
4. SEC compliance. 2
5. North Carolina compliance. 2
6. Audited Financial Statements. 2
II. PLAN OF EXCHANGE 3
1. Conditions Precedent to Closing. 3
(1.1) Shareholder Approval. 3
(1.2) Board of Directors. 3
(1.3) Due Diligence Investigation. 3
(1.4) The rights of dissenting shareholders, 3
(1.5) All of the terms, covenants and conditions 3
(1.6) The representations and warranties 3
(1.7) Certificate of ▇▇▇▇▇ ▇▇▇▇▇▇▇ 4
2. Conditions Concurrent and Subsequent to Closing. 4
(2.1) Share Cancellation. 4
(2.2) Acquisition Share Issuance. 4
3. Plan of Exchange 5
(3.1) Exchange of Shares: 5
(3.2) Conversion of Outstanding Stock: 5
(3.3) Closing/Effective Date: 5
(3.4) Surviving Corporations 5
(3.5) Rights of Dissenting Shareholders: 5
(3.6) Service of Process: 5
(3.7) Surviving Articles of Incorporation: 5
(3.8) Surviving By-Laws: 5
(3.9) Further Assurance, Good Faith and Fair Dealing: 5
(3.10) General Mutual Representations and Warranties. 6
(3.10.1) Organization and Qualification. 6
(3.10.2) Corporate Authority. 6
(3.10.3) Ownership of Assets and Property. 6
(3.10.4) Absence of Certain Changes or Events. 6
(3.10.5) Absence of Undisclosed Liabilities. 7
(3.10.6) Legal Compliance. 7
(3.10.7) Legal Proceedings. 8
(3.10.8) No Breach of Other Agreements. 8
(3.10.9) Capital Stock. 8
(3.10.10) SEC Reports, Liabilities and Taxes 8
(3.10.11) Brokers' or Finder's Fees. 9
(3.11) Miscellaneous Provisions 9
(3.11.1) 9
(3.11.2) 9
(3.11.3) 9
(3.11.4) 9
(3.11.5) 9
(3.11.6) 9
4. Termination. 10
5. Closing 10
6. Execution in Counterparts
Signatures
The Remainder of this Page is Intentionally left Blank
PLAN OF EXCHANGE
BY WHICH
XENICENT, INC.
(A NORTH CAROLINA CORPORATION)
SHALL ACQUIRE
HEILONGJIANG PINGCHUAN ▇▇ ▇▇▇▇ ▇▇ ▇▇▇ YOU ▇▇▇▇ ▇▇▇▇ SI
(A CORPORATION ORGANIZED UNDER THE LAWS OF THE P.R. CHINA)
THIS PLAN OF EXCHANGE is made and dated this 22nd day of June, 2004, to
supersede all previous agreements, if any between the parties. This Agreement
anticipates extensive due diligence by both parties, and may be terminated by
written notice, at any time (i) by mutual consent; (ii) by either party during
the due diligence phase.
I. RECITALS
1. THE PARTIES TO THIS AGREEMENT:1. THE PARTIES TO THIS LETTER OF INTENT:
(1.1) XENICENT, INC. ("XCEN"), a North Carolina corporation.
(1.2) HEILONGJIANG PINGCHUAN ▇▇ ▇▇▇▇ ▇▇ ▇▇▇ YOU ▇▇▇▇ ▇▇▇▇ SI,
a corporation organized under the laws of the P.R. China
("Pingchuan").
(1.3) ▇▇▇▇▇ ▇▇▇▇▇▇▇, Chairman of the Board and controlling shareholder of
XCEN ("▇▇▇▇▇▇▇").
2. THE CAPITAL OF THE PARTIES: 2. THE CAPITAL OF THE PARTIES:
(2.1) THE CAPITAL OF XCEN consists of 50,000,000 shares of common
voting stock of $0.001 par value authorized, of which 10,562,020
(pre-reverse stock split) shares are issued and outstanding.
(2.2) THE CAPITAL OF PINGCHUAN consists of RMB 1,030,000 in registered
capital, which for the purposes of this Agreement, are referred
to as "common stock" or "capital stock".
3. TRANSACTION DESCRIPTIVE SUMMARY: XCEN desires to acquire Pingchuan and
the shareholders of Pingchuan (the "Pingchuan Shareholders") wish Pingchuan to
be acquired by a public company. XCEN would acquire 100% of the capital stock of
Pingchuan for 70,000,000 new shares of XCEN. XCEN would cause the cancellation
of 7,800,000 (pre-reverse stock split) shares of its outstanding shares of
common stock in exchange for a payment by Pingchaun and/or the Pingchuan
Shareholders of $400,000, less related expenses, in the aggregate. The parties
intend that the transactions qualify and meet the Internal Revenue Code
requirements for a tax free reorganization, in which there is no corporate gain
or loss recognized for the parties, with reference to Internal Revenue Code
(IRC) sections 354 and 368.
4. SEC COMPLIANCE. XCEN shall cause the filing and the mailing to its
stockholders of an Information Statement on Schedule 14F-1 pursuant to Section
14(f) of the Securities Exchange Act of 1934, as amended, which is required to
be filed and mailed ten days before a change in the majority of the Board of
Directors of XCEN other than at a shareholders' meeting.
5. NORTH CAROLINA COMPLIANCE. Articles of Exchange are required to be
filed by North Carolina law as the last act to make the acquisition final and
effective under North Carolina law.
6. AUDITED FINANCIAL STATEMENTS. Certain filings under the Securities Exchange
Act of 1934, such as a Current Report on Form 8-K, require audited financial
statements of Pingchuan to be filed with the SEC within 75 days of closing. In
connection with XCEN's (or as its name may be changed by agreement of the
parties) filing of a Current Report on Form 8-K post closing, as it relates to
this transaction, audited financial statements of Pingchuan will be prepared and
filed with the SEC.
7. INCREASE IN XCEN CAPITALIZATION AND NAME CHANGE. ▇▇▇▇▇▇▇ shall cause XCEN
to hold a special shareholders' meeting and shall vote in favor of (i) an
increase in the authorized common stock of XCEN to 100,000,000 and (ii) a change
in the corporate name of XCEN to such name as may be designated by Pingchuan.
In connection therewith, XCEN shall file with the SEC and mail to shareholders
an Information Statement on Schedule 14C.
The Remainder of this Page is Intentionally left Blank
II. PLAN OF EXCHANGE
1. CONDITIONS PRECEDENT TO CLOSING.
(1.1) SHAREHOLDER APPROVAL. Each corporate party shall have secured
shareholder approval for this transaction, if required, in
accordance with the laws of its place of incorporation and its
constituent documents.
(1.2) BOARD OF DIRECTORS. The Boards of Directors of each corporate
party shall have approved the transaction and this agreement, in
accordance with the laws of its place of incorporation and its
constituent documents.
(1.3) DUE DILIGENCE INVESTIGATION. Each party shall have furnished to
the other party all corporate and financial information which is
customary and reasonable, to conduct its respective due
diligence, normal for this kind of transaction. If either party
determines that there is a reason not to complete the Plan of
Exchange as a result of their due diligence examination, then
they must give written notice to the other party prior to the
expiration of the due diligence examination period. The Due
Diligence period, for purposes of this paragraph, shall expire on
the Closing Date. The Closing Date shall be June 22, 2004, unless
extended to a later date by mutual agreement of the parties.
(1.4) THE RIGHTS OF DISSENTING SHAREHOLDERS, if any, of each party
shall have been satisfied and the Board of Directors of each
party shall have determined to proceed with the Plan of exchange.
(1.5) ALL OF THE TERMS, COVENANTS AND CONDITIONS of the Plan of
exchange to be complied with or performed by each party for
Closing shall have been complied with, performed or waived in
writing; and
(1.6) THE REPRESENTATIONS AND WARRANTIES of the parties, contained in
the Plan of exchange, as herein contemplated, except as amended,
altered or waived by the parties in writing, shall be true and
correct in all material respects at the Closing Date with the
same force and effect as if such representations and warranties
are made at and as of such time; and each party shall provide the
other with a certificate, certified either individually or by an
officer, dated the Closing Date, to the effect, that all
conditions precedent have been met, and that all representations
and warranties of such party are true and correct as of that
date. The form and substance of each party's certification shall
be in form reasonably satisfactory to the other. In addition, it
shall be a condition precedent of ▇▇▇▇▇▇▇▇▇'s obligation to
consummate the closing that a certificate of good standing on
XCEN shall have been delivered to it by the Secretary of State of
North Carolina.
(1.7) CERTIFICATE OF ▇▇▇▇▇▇▇. It shall be a condition precedent to
▇▇▇▇▇▇▇▇▇'s obligation to consummate the closing that a
certificate of ▇▇▇▇▇▇▇ in substantially the following form be
delivered to it at or prior to closing:
(I) XCEN is a corporation duly organized, validly existing and
in good standing under the laws of the State of North
Carolina and has all requisite corporate power to own,
operate and lease its properties and assets and to carry on
its business.
(II) The authorized capitalization and the number of issued and
outstanding capital shares of XCEN are accurately and
completely set forth in the Plan of Exchange.
(III)The issued and outstanding shares of XCEN (including the
70,000,000 new shares of XCEN common stock to be issued at
closing) have been duly authorized and validly issued and
are fully paid and non-assessable.
(IV) XCEN has the full right, power and authority to sell,
transfer and deliver 70,000,000 new shares of its common
stock to the Pingchuan Shareholders, and, upon delivery of
the certificates representing such shares as contemplated in
the Plan of Exchange, will transfer to the Pingchuan
Shareholders good, valid and marketable title thereto, free
and clear of all liens.
(V) To the best of his knowledge, there is no litigation,
proceeding or governmental investigation pending or
threatened against or relating to XCEN.
(VI) XCEN has taken all steps in connection with the Plan of
Exchange and the issuance of shares thereunder which are
necessary to comply in all material respects with the
Securities Act of 1933, as amended, and the Securities
Exchange Act of 1934, as well as the rules and regulations
promulgated pursuant thereto.
2. CONDITIONS CONCURRENT AND SUBSEQUENT TO CLOSING.
(2.1) SHARE CANCELLATION. Immediate upon or prior to the Closing, XCEN
shall have accepted the cancellation of 7,800,000 (pre-reverse
stock split) shares, such that XCEN shall have no more than
2,762,020 (pre-reverse stock split) shares issued and
outstanding, before the issuance of new shares as provided
herein. Payment for the cancelled shares shall be made by the
Pingchuan and/or the Pingchuan Shareholders in the amount of
$400,000 in the aggregate. XCEN adopted a 5:1 reverse stock split
on March 30, 2004, which was effective on April 20, 2004.
(2.2) ACQUISITION SHARE ISSUANCE. Immediately upon the Closing, XCEN
shall issue the acquisition shares and cancel certain other
shares, as follows (all share figures are in post-reverse split
numbers):
XCEN Issued 2,112,404
---------------------------- -----------
Share Cancellation (1,560,000)
---------------------------- -----------
Subtotal 552,404
---------------------------- -----------
Acquisition Share Issuance 70,000,000
---------------------------- -----------
Resulting Total 70,552,404
---------------------------- -----------
3. PLAN OF EXCHANGE
(3.1) EXCHANGE AND REORGANIZATION: XCEN and Pingchuan shall be hereby
reorganized, such that XCEN shall acquire 100% the capital stock
of Pingchuan, and Pingchuan shall become a wholly-owned
subsidiary of XCEN.
(3.2) CONVERSION OF OUTSTANDING STOCK: Forthwith upon the effective
date of the Plan, XCEN shall issue 70,000,000 new investment
shares of its common stock to or for the Pingchuan Shareholders.
(3.3) CLOSING/EFFECTIVE DATE: The Plan of exchange shall become
effective immediately upon approval and adoption by the parties
hereto, in the manner provided by the law of the places of
incorporation and constituent corporate documents, and upon
compliance with governmental filing requirements, such as,
without limitation, compliance with Section 14 of the Securities
Exchange Act of 1934, and the filing of Articles of Exchange, if
applicable under State Law. Closing shall occur when all
requirements have been met. The parties anticipate the filing of
a Schedule 14-F Information Statement at least ten days prior to
any change in control of the Board of Directors of XCEN.
(3.4) SURVIVING CORPORATIONS: Both corporations shall survive the
exchange and reorganization herein contemplated and shall
continue to be governed by the laws of its respective State of
incorporation.
(3.5) RIGHTS OF DISSENTING SHAREHOLDERS: Each Party is the entity
responsible for the rights of its own dissenting shareholders, if
any.
(3.6) SERVICE OF PROCESS AND ADDRESS: Each corporation shall continue
to be amenable to service of process in its own jurisdiction,
exactly as before this acquisition. The address of XCEN is P.O.
Box 243, Chimney Rock, North Carolina 28720. The address of
Pingchuan is ▇▇. ▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇.▇.
China. The address of the Pingchuan Shareholders is in care of
Pingchuan at ▇▇. ▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇.▇.
China.
(3.7) SURVIVING ARTICLES OF INCORPORATION: the Articles of
Incorporation of each Corporation shall remain in full force and
effect, unchanged.
(3.8) SURVIVING BY-LAWS: the By-Laws of each Corporation shall remain
in full force and effect, unchanged.
(3.9) FURTHER ASSURANCE, GOOD FAITH AND FAIR DEALING: the Directors of
each Company shall and will execute and deliver any and all
necessary documents, acknowledgments and assurances and do all
things proper to confirm or acknowledge any and all rights,
titles and interests created or confirmed herein; and both
companies covenant expressly hereby to deal fairly and in good
faith with each other and each others shareholders. In
furtherance of the parties desire, as so expressed, and to
encourage timely, effective and businesslike resolution the
parties agree that any dispute arising between them, capable of
resolution by arbitration, shall be submitted to binding
arbitration. As a further incentive to private resolution of any
dispute, the parties agree that each party shall bear its own
costs of dispute resolution and shall not recover such costs from
any other party.
(3.10) GENERAL MUTUAL REPRESENTATIONS AND WARRANTIES. The purpose and
general import of the Mutual Representations and Warranties, are
that each party has made appropriate full disclosure to the
others, that no material information has been withheld, and that
the information exchanged is accurate, true and correct. These
warranties and representations are made by each party to the
other, unless otherwise provided, and they speak and shall be
true immediately before Closing.
(3.10.1) ORGANIZATION AND QUALIFICATION. Each Corporation is duly
organized and in good standing, and is duly qualified to
conduct any business it may be conducting, as required by
law or local ordinance.
(3.10.2) CORPORATE AUTHORITY. Each Corporation has corporate
authority, under the laws of its jurisdiction and its
constituent documents, to do each and every element of
performance to which it has agreed, and which is reasonably
necessary, appropriate and lawful, to carry out this
Agreement in good faith.
(3.10.3) OWNERSHIP OF ASSETS AND PROPERTY. Each Corporation has
lawful title and ownership of it property as reported to
the other, and as disclosed in its financial statements.
(3.10.4) ABSENCE OF CERTAIN CHANGES OR EVENTS. Each Corporation has
not had any material changes of circumstances or events
which have not been fully disclosed to the other party, and
which, if different than previously disclosed in writing,
have been disclosed in writing as currently as is
reasonably practicable. Specifically, and without
limitation:
(3.10.4-A) the business of each Corporation shall be
conducted only in the ordinary and usual course and
consistent with its past practice, and neither party
shall purchase or sell (or enter into any agreement to
so purchase or sell) any properties or assets or make
any other changes in its operations, respectively,
taken as a whole, or provide for the issuance of,
agreement to issue or grant of options to acquire any
shares, whether common, redeemable common or
convertible preferred, in connection therewith;
(3.10.4-B) Neither Corporation shall (i) amend its Articles
of Incorporation or By-Laws, (ii) change the number of
authorized or outstanding shares of its capital stock,
or (iii) declare, set aside or pay any dividend or
other distribution or payment in cash, stock or
property;
(3.10.4-C) Neither Corporation shall (i) issue, grant or
pledge or agree or propose to issue, grant, sell or
pledge any shares of, or rights of any kind to acquire
any shares of, its capital stock, (ii) incur any
indebtedness other than in the ordinary course of
business, (iii) acquire directly or indirectly by
redemption or otherwise any shares of its capital stock
of any class (except for XCEN's proposed cancellation
of shares of common stock) or (iv) enter into or modify
any contact, agreement, commitment or arrangement with
respect to any of the foregoing;
(3.10.4-D) Except in the ordinary course of business,
neither party shall (i) increase the compensation
payable or to become payable by it to any of its
officers or directors; (ii) make any payment or
provision with respect to any bonus, profit sharing,
stock option, stock purchase, employee stock ownership,
pension, retirement, deferred compensation, employment
or other payment plan, agreement or arrangement for the
benefit of its employees (iii) grant any stock options
or stock appreciation rights or permit the exercise of
any stock appreciation right where the exercise of such
right is subject to its discretion (iv) make any change
in the compensation to be received by any of its
officers; or adopt, or amend to increase compensation
or benefits payable under, any collective bargaining,
bonus, profit sharing, compensation, stock option,
pension, retirement, deferred compensation, employment,
termination or severance or other plan, agreement,
trust, fund or arrangement for the benefit of
employees, (v) enter into any agreement with respect to
termination or severance pay, or any employment
agreement or other contract or arrangement with any
officer or director or employee, respectively, with
respect to the performance or personal services that is
not terminable without liability by it on thirty days
notice or less, (vi) increase benefits payable under
its current severance or termination, pay agreements or
policies or (vii) make any loan or advance to, or enter
into any written contract, lease or commitment with,
any of its officers or directors;
(3.10.4-E) Neither party shall assume, guarantee, endorse or
otherwise become responsible for the obligations of any
other individual, firm or corporation or make any loans
or advances to any individual, firm or corporation,
other than obligations and liabilities expressly
assumed by the other that party;
(3.10.4-F) Neither party shall make any investment of a
capital nature either by purchase of stock or
securities, contributions to capital, property
transfers or otherwise, or by the purchase of any
property or assets of any other individual, firm or
corporation.
(3.10.5) ABSENCE OF UNDISCLOSED LIABILITIES. Each Corporation has,
and has no reason to anticipate having, any material
liabilities which have not been disclosed to the other, in
the financial statements or otherwise in writing, except
for any liabilities that may result from a restatement of
financial statements arising out of the disposition of the
Giantek subsidiary.
(3.10.6) LEGAL COMPLIANCE. Each Corporation shall comply in all
material respects with all Federal, state, local and other
governmental (domestic or foreign) laws, statutes,
ordinances, rules, regulations (including all applicable
securities laws), orders, writs, injunctions, decrees,
awards or other requirements of any court or other
governmental or other authority applicable to each of them
or their respective assets or to the conduct of their
respective businesses, and use their best efforts to
perform all obligations under all contracts, agreements,
licenses, permits and undertaking without default.
(3.10.7) LEGAL PROCEEDINGS. Each Corporation has no legal
proceedings, administrative or regulatory proceeding,
pending or suspected, which have not been fully disclosed
in writing to the other.
(3.10.8) NO BREACH OF OTHER AGREEMENTS. This Agreement, and the
faithful performance of this agreement, will not cause any
breach of any other existing agreement, or any covenant,
consent decree, or undertaking by either, not disclosed to
the other.
(3.10.9) CAPITAL STOCK. The issued and outstanding shares and all
shares of capital stock of each Corporation is as detailed
herein, that all such shares are in fact issued and
outstanding, duly and validly issued, were issued as and
are fully paid and non-assessable shares, and that, other
than as represented in writing, there are no other
securities, options, warrants or rights outstanding, to
acquire further shares of such Corporation.
(3.10.10) SEC REPORTS, LIABILITIES AND TAXES.
(i) XCEN has filed all required registration statements,
prospectuses, reports, schedules, forms, statements and
other documents required to be filed by it with the SEC
since the date of its registration under the Securities
Act of 1933, as amended (collectively, including all
exhibits thereto, the "XCEN SEC Reports"). None of the
XCEN SEC Reports, as of their respective dates,
contained any untrue statements of material fact or
failed to contain any statements which were necessary
to make the statements made therein, in light of the
circumstances, not misleading, except for any statement
arising out of a restatement of financial results that
may be caused by the disposition of the Giantek
subsidiary. All of the XCEN SEC Reports, as of their
respective dates (and as of the date of any amendment
to the respective XCEN SEC Reports), complied as to
form in all material respects with the applicable
requirements of the Securities Act and the Exchange Act
and the rules and regulations promulgated thereunder.
(ii) Except as disclosed in the XCEN SEC Reports filed prior
to the date hereof, XCEN and its Subsidiaries have not
incurred any liabilities or obligations (whether or not
accrued, contingent or otherwise) that are of a nature
that would be required to be disclosed on a balance
sheet of XCEN and its Subsidiaries or the footnotes
thereto prepared in conformity with GAAP, other than
(A) liabilities incurred in the ordinary course of
business, (B) liabilities that would not, in the
aggregate, reasonably be expected to have a material
adverse effect on XCEN, or (C) liabilities that may be
reflected in XCEN's balance sheet as a result of a
restatement of financial results arising out of the
disposition of the Giantek subsidiary.
(iii)Except as disclosed in the XCEN SEC Reports filed
prior to the date hereof, XCEN and each of its
Subsidiaries (i) have prepared in good faith and duly
and timely filed (taking into account any extension of
time within which to file) all material tax returns
required to be filed by any of them and all such filed
tax returns are complete and accurate in all material
respects; (ii) have paid all taxes that are shown as
due and payable on such filed tax returns or that XCEN
or any of its Subsidiaries are obligated to pay without
the filing of a tax return; (iii) have paid all other
assessments received to date in respect of taxes other
than those being contested in good faith for which
provision has been made in accordance with GAAP on the
most recent balance sheet included in XCEN's financial
statements; (iv) have withheld from amounts owing to
any employee, creditor or other person all taxes
required by law to be withheld and have paid over to
the proper governmental authority in a timely manner
all such withheld amounts to the extent due and
payable; and (v) have not waived any applicable statute
of limitations with respect to United States federal or
state income or franchise taxes and have not otherwise
agreed to any extension of time with respect to a
United States federal or state income or franchise tax
assessment or deficiency.
(3.10.11) BROKERS' OR FINDER'S FEES. Each Corporation is not aware
of any claims for brokers' fees, or finders' fees, or other
commissions or fees, by any person not disclosed to the
other, which would become, if valid, an obligation of
either company.
(3.11) MISCELLANEOUS PROVISIONS
(3.11.1) Except as required by law, no party shall provide any
information concerning any aspect of the transactions
contemplated by this Agreement to anyone other than their
respective officers, employees and representatives without
the prior written consent of the other parties hereto. The
aforesaid obligations shall terminate on the earlier to
occur of (a) the Closing, or (b) the date by which any
party is required under its articles or bylaws or as
required by law, to provide specific disclosure of such
transactions to its shareholders, governmental agencies or
other third parties. In the event that the transaction does
not close, each party will return all confidential
information furnished in confidence to the other. In
addition, all parties shall consult with each other
concerning the timing and content of any press release or
news release to be issued by any of them.
(3.11.2) This Agreement may be executed simultaneously in two or
more counterpart originals. The parties can and may rely
upon facsimile signatures as binding under this Agreement,
however, the parties agree to forward original signatures
to the other parties as soon as practicable after the
facsimile signatures have been delivered.
(3.11.3) The Parties to this agreement have no wish to engage in
costly or lengthy litigation with each other. Accordingly,
any and all disputes which the parties cannot resolve by
agreement or mediation, shall be submitted to binding
arbitration under the rules and auspices of the American
Arbitration Association. As a further incentive to avoid
disputes, each party shall bear its own costs, with respect
thereto, and with respect to any proceedings in any court
brought to enforce or overturn any arbitration award. This
provision is expressly intended to discourage litigation
and to encourage orderly, timely and economical resolution
of any disputes which may occur.
(3.11.4) If any provision of this Agreement or the application
thereof to any person or situation shall be held invalid or
unenforceable, the remainder of the Agreement and the
application of such provision to other persons or
situations shall not be effected thereby but shall continue
valid and enforceable to the fullest extent permitted by
law.
(3.11.5) No waiver by any party of any occurrence or provision
hereof shall be deemed a waiver of any other occurrence or
provision.
(3.11.6) The parties acknowledge that both they and their counsel
have been provided ample opportunity to review and revise
this agreement and that the normal rule of construction
shall not be applied to cause the resolution of any
ambiguities against any party presumptively. The Agreement
shall be governed by and construed in accordance with the
laws of the State of North Carolina.
4. TERMINATION. The Plan of exchange may be terminated by written notice, at
any time prior to closing, by either party whether before or after approval by
the shareholders of either or both; (i) by mutual consent; (ii) by either party
during the due diligence phase, or (iii) by either party, in the event that the
transaction represented by the anticipated Plan of exchange has not been
implemented and approved by the proper governmental authorities 120 days from
the of this Agreement. In the event that termination of the Plan of exchange by
either or both, as provided above, the Plan of exchange shall forthwith become
void and there shall be no liability on the part of either party or their
respective officers and directors.
5. CLOSING. The parties hereto contemplate that the closing of this Plan of
Exchange shall occur in escrow pursuant to an Escrow Agreement dated March 22,
2004. The Escrow Agreement provides that the exchange transaction shall be
consummated when and if (i) all necessary filings are made with the SEC and
other state regulatory authorities to effect the exchange transaction, (ii) XCEN
effects a change of its name to such name as may be designated by Pingchuan, and
(iii) XCEN effects a change of its ticker symbol to such new ticker symbol as
the NASDAQ shall designate. The date on which the last of the escrow conditions
is satisfied and a change of control of XCEN occurs is referred to herein as the
"Closing Date". On the Closing Date, a certificate for the 70,000,000 shares of
XCEN common stock will be delivered to Pingchuan for distribution to the
Pingchuan Shareholders and ▇▇▇▇▇▇▇ shall be paid by Pingchuan the remaining
$100,000 payment due for the cancellation of ▇▇▇▇▇▇▇'▇ 7,800,000 shares. The
parties acknowledge that the Escrow Agreement has a default provision that
governs the rights of the parties in the event that any payments are not made on
a timely basis and accept the terms thereof.
6. EXECUTION IN COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and when all of the counterparts are put together it shall be one
document and shall be a binding contract.
The Remainder of this Page is Intentionally left Blank
The parties hereto, intending to be bound, hereby sign this Plan of
Exchange below as of the date first written above.
XENICENT, INC. HEILONGJIANG PINGCHUAN ▇▇ ▇▇▇▇
▇▇ ▇▇▇ YOU ▇▇▇▇ ▇▇▇▇ ▇▇
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇, Zhanwu
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▇▇▇▇▇ ▇▇▇▇▇▇▇, Chairman ▇▇, Zhanwu
▇▇▇▇▇ ▇▇▇▇▇▇▇
By: /S/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇
(Individually)