DEBT EXCHANGE AGREEMENT
THIS DEBT EXCHANGE AGREEMENT (the "Agreement") is entered into as of December 23, 2002, by and
among Asian Alliance Ventures, Inc., a Nevada corporation (the "Company") and the holders of certain of the
Company's outstanding obligations as listed on Schedule A hereto (each individually a "Holder" and collectively,
A. The Holders have provided the Company with an aggregate of Three Hundred Fifty-Nine
Thousand Two Hundred Sixty-Six Dollars ($359,266) in advances made from time to time ("Debt") in the
specific amounts listed on Schedule A and are currently entitled to the payment or repayment of the same.
B. The Company and the Holders wish to agree, in lieu of such payments, that the Holders be issued
an aggregate of 7,185,320 Common Shares of the Company's capital stock ("Exchange Shares") with each share
to be valued at US$0.05 and allocated among the Holders, pro rata, to the amount due to each of them.
1. Exchange .
(a) Terms of Exchange . The Company hereby agrees to issue to the Holders and the Holders
agree to accept the Exchange Shares in full payment of amounts due to them on the basis of one
Exchange Shares for each $0.05 due to such Holder, the valuation for such transaction being
identical to the valuation applied by the Company to the conversion by Shengdong Hengtong
Chemical Corporation of a payable due to it from the Company.
(b) Issuance of Shares . Concurrently with the execution of this Agreement and subject to the
terms and conditions set forth herein and in full discharge and payment of all amounts set forth
opposite each Holder's name on Schedule A hereto (the "Exchange"), the Company does hereby
agree to cause the aggregate number of Exchange Shares set forth opposite each Holder's name on
Schedule A hereto to be issued and delivered. In furtherance thereof, each Holder hereby
acknowledges that the Company will instruct its transfer agent, U.S. Stock Transfer, to promptly