SECURITIES PURCHASE AGREEMENT

SECURITIES PURCHASE AGREEMENT

This Securities Purchase Agreement (this “ Agreement ”) is made and entered into as of August 6, 2009 (the “ Execution Date ”), by and between China Architectural Engineering, Inc., a Delaware corporation (the “ Company ”), KGE Group Limited, a Hong Kong limited company, and each of the purchasers listed on Schedule I attached hereto (each, a “Purchaser” and collectively, the “Purchasers”).

RECITALS

WHEREAS, the Company desires to sell to the Purchasers, and the Purchasers desire to purchase from the Company, an aggregate of 17,000,000 shares (the “ Shares ”) of the Company’s common stock, $0.001 par value per share (“ Common Stock ”), on the terms and conditions set forth in this Agreement; and

WHEREAS, the Purchasers desire to receive and rely upon KGE Group Limited, and KGE Group Limited is willing to provide for such reliance to encourage investment by the Purchasers, certain promises for the benefit of the Purchasers and the Company and its stockholders overall.

NOW, THEREFORE, in consideration of the foregoing, the mutual promises hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

(a)           “ Affiliate ” means, with respect to any Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with such Person.  “Control” for this purpose means possession, directly or indirectly, of more than fifty percent (50%) of the voting power of a Person.

(b)           “ Business Day ” means any day except Saturday, Sunday and any day which shall be a federal legal holiday or a day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

(c)           “ Entity ” means any sole proprietorship, corporation, partnership of any kind having a separate legal status, limited liability company, business trust, unincorporated organization or association, mutual company, joint stock company or joint venture.

(d)           “ Governmental Authority ” means (i) any federal, state, county, municipal or other government, domestic or foreign, or any agency, board, bureau, commission, court, department or other instrumentality of any such government, or (ii) any Person having the authority under any applicable Governmental Requirement to administer, assess, collect or impose Taxes.

(e)           “ Governmental Requirement ” means at any time (i) any law, statute, code, ordinance, order, rule, regulation, judgment, decree, injunction, writ, edict, award, authorization or other requirement of any Governmental Authority in effect at that time or (ii) any obligation included in any certificate, certification, franchise, permit or license issued by any Governmental Authority or resulting from binding arbitration, including any requirement under common law, at that time.

(f)           “ Knowledge ” means, as it pertains to the Company and any Purchaser, the actual knowledge of the Company or the Purchaser, as applicable.

(g)           “ Person ” means any natural person, Entity, estate, trust, union or employee organization or Governmental Authority.

(a)           Subject to the terms and conditions of this Agreement, the Company agrees to sell and issue to the Purchasers, and the Purchasers agrees to purchase, acquire and accept from the Company at the Closing (as defined below), the number of authorized but unissued shares of Common Stock set forth opposite their names set forth on Schedule I attached hereto at a per share purchase price of $1.65 (the “ Per Share Price ”).

(b)           None of the Shares shall be sold and issued to the Purchasers prior to the Company obtaining stockholder approval to sell and issue the Shares in accordance with the requirements of NASDAQ Marketplace Rule 5635 and Section 6 hereto (the “ Stockholder Approval ”). If and when the Company obtains the Stockholder Approval, the parties shall hold a Closing for the purchase and sale of the Shares.

3.           CLOSING

On September 30, 2009, provided that the Stockholder Approval is obtained, the parties shall conduct a closing for the purchase and sale of the Shares (the “ Closing ,” the date of the Closing being referred to herein as the “ Closing Date ”), at the offices of the Company at 105 Baishi Road, Jiuzhou West Avenue, Zhuhai 519070, People’s Republic of China at 5:00 p.m. Local Time or at such other time and place as the Company and Purchasers mutually agree upon after the Stockholder Approval is obtained.  At the Closing, against delivery of full payment for the Shares sold hereunder by wire transfer of immediately available funds in accordance with the Company’s instructions; the Company shall provide to Purchasers (i) irrevocable instructions to the Company’s transfer agent and registrar to issued one or more stock certificates registered in the name of Purchasers (or in such nominee name(s) as designated by each Purchaser, representing the number of Shares set forth opposite such Purchaser’s name on Schedule I hereto and bearing the legend set forth in Section 5(j) herein.  The Company shall submit such irrevocable instruction letter to the Company’s transfer agent on the Closing Date and the stock certificate representing the Shares purchased by each Purchaser shall be delivered by the transfer agent to the Purchasers no later than Five (5) Business Days from the Closing Date.  Closing documents may be delivered by facsimile on the Closing Date, with original signature pages subsequently sent by overnight courier.

The Company hereby represents and warrants to the Purchasers as of the Closing Date that:

(a)            Organization . The Company has all corporate power and authority required to enter into this Agreement and the other agreements, instruments and documents contemplated hereby, and to consummate the transactions contemplated hereby and thereby.

(b)            Due Authorization . All corporate actions on the part of the Company necessary for the authorization, execution, delivery and performance of all obligations of the Company under this Agreement, including the authorization, issuance, reservation for issuance and delivery of all the Shares being sold under this Agreement, have been taken and no further consent or authorization of the Company, the Company’s board of directors (the “ Board of Directors ”) or the Company’s stockholders is required (other than the Stockholder Approval), and this Agreement constitutes the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except (i) as may be limited by (1) applicable bankruptcy, insolvency, reorganization or other laws of general application relating to or affecting the enforcement of creditors’ rights generally and (2) the effect of rules of law governing the availability of equitable remedies and (ii) as rights to indemnity or contribution may be limited under federal or state securities laws or by principles of public policy thereunder.

(c)            Non-Contravention . The execution, delivery and performance of this Agreement by the Company, and the consummation by Company of the transactions contemplated hereby, do not: (i) contravene or conflict with the organizational documents of Company; or (ii) constitute a violation of any provision of any federal, state, local or foreign law, rule, regulation, order or decree applicable to Company, except in the case of clause (ii), for such violations, breaches or defaults as would not be reasonably likely to have a material adverse effect on the Company.

(d)            Litigation . There is no Action pending to which Company is a party that is reasonably likely to prevent, enjoin, alter or delay the transactions contemplated by this Agreement.

(e)            Valid Issuance of the Shares . The Shares have been duly authorized and, when issued and delivered to Purchasers against payment therefor in accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable and will be free and clear from all liens, claims and encumbrances with respect to the issuance of such Shares and will not be subject to any pre-emptive rights or similar rights.

(f)            Brokers, Finders and Others .  There are no fees or commissions of any sort whatsoever claimed by, or payable by the Company to, any broker, finder, intermediary or any other similar Person in connection with effecting this Agreement or the transactions contemplated hereby, except for ordinary and customary legal and accounting fees.

(g)            Governmental and Third-Party Proceedings .  No consent, approval, authorization of, or registration, declaration or filing with, any court, Governmental Authorities or any other third party, other than the Nasdaq Stock Market or as required under U.S. state and federal securities laws, is required to be made or obtained by the Company in connection with the execution, delivery or performance by the Company of this Agreement and the Transaction Documents or the consummation by the Company of the transactions contemplated hereby.

Each of the Purchasers, severally but not jointly, hereby represents and warrants to the Company as of the Closing Date that:

(a)            Organization . Purchaser has all corporate, limited liability company, partnership, trust or individual, as the case may be, power and authority required to enter into this Agreement and the other agreements, instruments and documents contemplated hereby, and to consummate the transactions contemplated hereby and thereby.

(b)            Due Authorization . All corporate, limited liability company, partnership, trust or individual, as the case may be, action on the part of Purchaser necessary for the authorization, execution, delivery of and the performance of all obligations of Purchaser under this Agreement have been taken and no further consent or authorization of Purchaser is necessary, and this Agreement constitutes Purchaser’s legal, valid and binding obligation, enforceable in accordance with its terms, except (i) as may be limited by (1) applicable bankruptcy, insolvency, reorganization or other laws of general application relating to or affecting the enforcement of creditors’ rights generally and (2) the effect of rules of law governing the availability of equitable remedies and (ii) as rights to indemnity or contribution may be limited under federal or state securities laws or by principles of public policy thereunder.

(c)            Non-Contravention . The execution, delivery and performance of this Agreement by Purchaser, and the consummation by Purchaser of the transactions contemplated hereby, do not: (i) contravene or conflict with the organizational documents of Purchaser; or (ii) constitute a violation of any provision of any federal, state, local or foreign law, rule, regulation, order or decree applicable to Purchaser, except in the case of clause (ii), for such violations, breaches or defaults as would not be reasonably likely to have a Material Adverse Effect on Purchaser.

(d)            Litigation . There is no Action pending to which Purchaser is a party that is reasonably likely to prevent, enjoin, alter or delay the transactions contemplated by this Agreement.

(e)            Investment Representations . The Purchaser has received this Agreement and carefully read such Agreement; the decision to acquire Shares has been taken solely in reliance upon the information contained in this Agreement, and such other written information supplied by an authorized representative of the Company as the Purchaser may have requested.  The Purchaser acknowledges that all documents, records and books pertaining to this investment have been made available for inspection by the Purchaser, its attorneys, accountants and purchaser representatives upon request prior to tendering this Agreement, and that it has been informed by the Company that its books and records will be available for inspection by the Purchaser or its agents and representatives at any time, and from time to time, during reasonable business hours and upon reasonable notice.  The Purchaser further acknowledges that it (or its advisors, agents and/or representatives) has had a reasonable and adequate opportunity to ask questions of and receive answers from the Company concerning the terms and conditions of the acquisition of Shares, the nature of Shares and the business and operations of the Company, and to obtain from the Company such additional information, to the extent possessed or obtainable without unreasonable effort or expense, as is necessary to verify the accuracy of the information contained in this Agreement or otherwise provided by the Company; all such questions have been answered by the Company to the full satisfaction of the Purchaser.  Purchaser is not relying upon any oral information furnished by the Company or any other Person in connection with its investment decision, and in any event, no such oral information has been furnished to Purchaser which is in any way inconsistent with or contradictory to any information contained in this Agreement, or otherwise provided to Purchaser by the Company in writing as described above.