Exhibit 2.1
SHARE EXCHANGE AGREEMENT
This SHARE EXCHANGE AGREEMENT (this "AGREEMENT"), dated as of November 5,
2009, is by and among Wollemi Mining Corp., a Delaware corporation (the
"PUBCO"), Peakway Worldwide Limited, a British Virgin Islands company
("PEAKWAY"), and Cabo Development Limited, a British Virgin Islands company (the
"STOCKHOLDER"). Each of the parties to this Agreement is individually referred
to herein as a "PARTY" and collectively, as the "PARTIES."
BACKGROUND
Peakway has 1,000 ordinary shares (the "PEAKWAY STOCK") issued and
outstanding, all of which are held by the Stockholder. The Stockholder is the
record and beneficial owner of the number of shares of Peakway Stock as set
forth on Exhibit A. The Stockholder has agreed to transfer all of its Peakway
Stock in exchange for 10,500,000 newly issued common stock , par value $.0001
per share, of the Pubco (the "PUBCO STOCK") that will constitute approximately
70% of the issued and outstanding common stock of the Pubco immediately after
the Closing. The number of shares of Pubco Stock to be received by the
Stockholder is listed opposite such Stockholder's name on Exhibit A attached to
this Agreement. The aggregate number of shares of Pubco Stock that is reflected
on Exhibit A is referred to herein as the "SHARES".
The Board of Directors of the Pubco, Peakway and the Stockholder have
determined that it is desirable to effect this plan of reorganization and share
exchange.
AGREEMENT
NOW THEREFORE, the parties agree as follows:
ARTICLE I
Exchange of Shares
SECTION 1.01. Exchange by Stockholder. At the Closing (as defined in
Section 1.02), the Stockholder shall sell, transfer, convey, assign and deliver
to Pubco its Peakway Stock free and clear of all Liens (as defined below) in
exchange for Pubco Stock listed on Exhibit A opposite such Stockholder's name.
SECTION 1.02. Closing. The closing (the "CLOSING") of the transactions
contemplated hereby (the "TRANSACTIONS") shall take place at the Beijing office
of King and Wood LLP in People's Republic of China at 11:00 a.m. local time on
the second business day following the satisfaction or waiver of all conditions
to the obligations of the parties to consummate the Transactions contemplated
hereby (other than conditions with respect to actions the respective parties
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will take at the Closing itself), or such other date and time as the parties may
mutually determine (the "CLOSING DATE").
ARTICLE II
Representations and Warranties of Stockholder
The Stockholder hereby represents and warrants to Pubco with respect to
itself, as follows:
SECTION 2.01. Good Title. The Stockholder is the record and beneficial
owner, and has good title to its Peakway Stock, with the right and authority to
sell and deliver such Peakway Stock. Upon registering of Pubco as the new owner
of such Peakway Stock in the share register of members of Peakway, Pubco will
receive good title to such Peakway Stock, free and clear of all liens, security
interests, pledges, equities and claims of any kind, voting trusts, stockholder
agreements and other encumbrances (collectively, "LIENS").
SECTION 2.02. Power and Authority. This Agreement constitutes a legal,
valid and binding obligation of the Stockholder, enforceable against such
Stockholder in accordance with the terms hereof.
SECTION 2.03. No Conflicts. The execution and delivery of this Agreement by
the Stockholder and the performance by the Stockholder of its obligations
hereunder in accordance with the terms hereof: (i) will not require the consent
of any third party or any federal, state, local or foreign government or any
court of competent jurisdiction, administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign ("GOVERNMENTAL
ENTITY") under any statutes, laws, ordinances, rules, regulations, orders,
writs, injunctions, judgments, or decrees (collectively, "LAWS"); (ii) will not
violate any Laws applicable to such Stockholder and (iii) will not violate or
breach any contractual obligation to which such Stockholder is a party.
SECTION 2.04. No Finder's Fee. The Stockholder has not created any
obligation for any finder's, investment banker's or broker's fee in connection
with the Transactions.
SECTION 2.05. Purchase Entirely for Own Account. Pubco Stock proposed to be
acquired by the Stockholder hereunder will be acquired for investment for its
own account, and not with a view to the resale or distribution of any part
thereof, and the Stockholder has no present intention of selling or otherwise
distributing Pubco Stock, except in compliance with applicable securities laws.
SECTION 2.06. Lock-up and Registration Rights. The Stockholder hereby
undertakes that it will not offer, sell, contract to sell, pledge or otherwise
dispose of, directly or indirectly, any Pubco Stock, enter into a transaction
that would have the same effect, or enter into any swap, hedge or other
arrangement that transfers, in whole or in part, any of the economic
consequences of ownership of such Pubco Stock, whether any of these transactions
are to be settled by delivery of any such Pubco Stock, in cash or otherwise, or
publicly disclose the intention to make any offer, sale, pledge or disposition,
or to enter into any transaction, swap, hedge or other arrangement, for a period
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of 24 months from the date of issuance of such Pubco Stock. After 24-month
period described above, the Stockholder shall be entitled to effect the
registration under the Securities Act of such Pubco Stock.
SECTION 2.07. Restricted Securities. The Stockholder understands that the
Pubco Stock is characterized as "restricted securities" under the Securities Act
inasmuch as this Agreement contemplates that, if acquired by the Stockholder
pursuant hereto, the Pubco Stock would be acquired in a transaction not
involving a public offering. The Stockholder further acknowledges that if the
Pubco Stock is issued to the Stockholder in accordance with the provisions of
this Agreement, such Pubco Stock may not be resold without registration under
the Securities Act or the existence of an exemption therefrom. The Stockholder
represents that it is familiar with Rule 144 promulgated under the Securities
Act, as presently in effect, and understands the resale limitations imposed
thereby and by the Securities Act.
SECTION 2.08. Legends. It is understood that the Pubco Stock will bear the
following legend or one that is substantially similar to the following legend:
NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON
CONVERSION OF THESE SECURITIES HAVE BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED
OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY. THESE SECURITIES AND THE
SECURITIES ISSUABLE UPON CONVERSION OF THESE SECURITIES MAY
BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
SECURED BY SUCH SECURITIES.
SECTION 2.09. Accredited Investor. The Stockholder is an "accredited
investor" within the meaning of Rule 501 under the Securities Act.
ARTICLE III
Representations and Warranties of Peakway
Peakway represents and warrants to Pubco that, except as set forth in
Peakway Disclosure Letter (as defined below, and regardless of whether or not
Peakway Disclosure Letter is referenced below with respect to any particular
representation or warranty), which will be delivered by Peakway to Pubco
concurrently herewith (the "PEAKWAY DISCLOSURE LETTER"):
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SECTION 3.01. Organization, Standing and Power. Each of Peakway and its
subsidiaries (the "PEAKWAY SUBSIDIARIES") is duly organized, validly existing
and in good standing under the laws of the jurisdiction in which it is organized
and has the corporate power and authority and possesses all governmental
franchises, licenses, permits, authorizations and approvals necessary to enable
it to own, lease or otherwise hold its properties and assets and to conduct its
businesses as presently conducted, other than such franchises, licenses,
permits, authorizations and approvals the lack of which, individually or in the
aggregate, has not had and would not reasonably be expected to have a material
adverse effect on Peakway, a material adverse effect on the ability of Peakway
to perform its obligations under this Agreement or on the ability of Peakway to
consummate the Transactions (a "PEAKWAY MATERIAL ADVERSE EFFECT"). Peakway and
each Peakway Subsidiary is duly qualified to do business in each jurisdiction
where the nature of its business or its ownership or leasing of its properties
make such qualification necessary except where the failure to so qualify would
not reasonably be expected to have a Peakway Material Adverse Effect. Peakway
has delivered to the Pubco true and complete copies of the memorandum and
articles of association of Peakway and such other constituent instruments of
Peakway as may exist, each as amended to the date of this Agreement (as so
amended, the "PEAKWAY CONSTITUENT INSTRUMENTS"), and the comparable charter,
organizational documents and other constituent instruments of each Peakway
Subsidiary, in each case as amended through the date of this Agreement.
SECTION 3.02. Peakway Subsidiaries; Equity Interests.
(a) The Peakway Disclosure Letter lists each Peakway Subsidiary and its
jurisdiction of organization. Except as specified in Peakway Disclosure Letter,
all the outstanding shares of capital stock or equity investments of each
Peakway Subsidiary have been validly issued and are fully paid and nonassessable
and are as of the date of this Agreement owned by Peakway, free and clear of all
Liens.
(b) Except for its interests in Peakway Subsidiaries, Peakway does not as
of the date of this Agreement own, directly or indirectly, any capital stock,
membership interest, partnership interest, joint venture interest or other
equity interest in any person.
SECTION 3.03. Capital Structure. The authorized shares of Peakway are
50,000 ordinary shares of a single class with a par value of US$1.00 each. As of
the date of this Agreement, 1,000 ordinary shares are issued and outstanding.
Except as set forth above, no shares or other voting securities of Peakway are
issued, reserved for issuance or outstanding. Except as specified in Peakway
Disclosure Letter, Peakway is the sole record and beneficial owner of all of the
issued and outstanding capital stock of each Peakway Subsidiary. All outstanding
shares of the capital stock of Peakway and each Peakway Subsidiary are duly
authorized, validly issued, fully paid and nonassessable and not subject to or
issued in violation of any purchase option, call option, right of first refusal,
preemptive right, subscription right or any similar right under any provision of
the applicable corporate laws of the British Virgin Islands, Peakway Constituent
Instruments or any Contract (as defined in Section 3.05) to which Peakway is a
party or otherwise bound. There are not any bonds, debentures, notes or other
indebtedness of Peakway or any Peakway Subsidiary having the right to vote (or
convertible into, or exchangeable for, securities having the right to vote) on
any matters on which holders of Peakway Stock or the common stock of any Peakway
Subsidiary may vote ("VOTING DEBT"). Except as set forth above, as of the date
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of this Agreement, there are not any options, warrants, rights, convertible or
exchangeable securities, "phantom" stock rights, stock appreciation rights,
stock-based performance units, commitments, Contracts, arrangements or
undertakings of any kind to which Peakway or any Peakway Subsidiary is a party
or by which any of them is bound (i) obligating Peakway or any Peakway
Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold,
additional shares of capital stock or other equity interests in, or any security
convertible or exercisable for or exchangeable into any capital stock of or
other equity interest in, Peakway or any Peakway Subsidiary or any Voting Debt,
(ii) obligating Peakway or any Peakway Subsidiary to issue, grant, extend or
enter into any such option, warrant, call, right, security, commitment,
Contract, arrangement or undertaking or (iii) that give any person the right to
receive any economic benefit or right similar to or derived from the economic
benefits and rights occurring to holders of the capital stock of Peakway or of
any Peakway Subsidiary. Except as set forth in Peakway Disclosure Letter, as of
the date of this Agreement, there are not any outstanding contractual
obligations of Peakway to repurchase, redeem or otherwise acquire any shares of
capital stock of Pubco.
SECTION 3.04. Authority; Execution and Delivery; Enforceability. Peakway
has all requisite corporate power and authority to execute and deliver this
Agreement and to consummate the Transactions. The execution and delivery by
Peakway of this Agreement and the consummation by Peakway of the Transactions
have been duly authorized and approved by the Board of Directors of Peakway and
no other corporate proceedings on the part of Peakway are necessary to authorize
this Agreement and the Transactions. When executed and delivered, this Agreement
will be enforceable against Peakway in accordance with its terms.
SECTION 3.05. No Conflicts; Consents.
(a) Except as set forth in Peakway Disclosure Letter, the execution and
delivery by Peakway of this Agreement does not, and the consummation of the
Transactions and compliance with the terms hereof and thereof will not, conflict
with, or result in any violation of or default (with or without notice or lapse
of time, or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or to loss of a material benefit under, or result
in the creation of any Lien upon any of the properties or assets of Peakway or
any Peakway Subsidiary under, any provision of (i) Peakway Constituent
Instruments or the comparable charter or organizational documents of any Peakway
Subsidiary, (ii) any material contract, lease, license, indenture, note, bond,
agreement, permit, concession, franchise or other instrument (a "CONTRACT") to
which Peakway or any Peakway Subsidiary is a party or by which any of their
respective properties or assets is bound or (iii) subject to the filings and
other matters referred to in Section 3.05(b), any material judgment, order or
decree ("JUDGMENT") or material Law applicable to Peakway or any Peakway
Subsidiary or their respective properties or assets, other than, in the case of
clauses (ii) and (iii) above, any such items that, individually or in the
aggregate, have not had and would not reasonably be expected to have a Peakway
Material Adverse Effect.
(b) Except as set forth in Peakway Disclosure Letter and except for
required filings with the Securities and Exchange Commission (the "SEC") and
applicable "Blue Sky" or state securities commissions, no material consent,
approval, license, permit, order or authorization ("CONSENT") of, or
registration, declaration or filing with, or permit from, any Governmental
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Entity is required to be obtained or made by or with respect to Peakway or any
Peakway Subsidiary in connection with the execution, delivery and performance of
this Agreement or the consummation of the Transactions.
SECTION 3.06. Benefit Plans. Peakway does not have or maintain any
collective bargaining agreement or any bonus, pension, profit sharing, deferred
compensation, incentive compensation, stock ownership, stock purchase, stock
option, phantom stock, retirement, vacation, severance, disability, death
benefit, hospitalization, medical or other plan, arrangement or understanding
(whether or not legally binding) providing benefits to any current or former
employee, officer or director of Peakway or any Peakway Subsidiary
(collectively, "PEAKWAY BENEFIT PLANS"). As of the date of this Agreement there
are not any severance or termination agreements or arrangements between Peakway
or any Peakway Subsidiary and any current or former employee, officer or
director of Peakway or any Peakway Subsidiary, nor does Peakway or any Peakway
Subsidiary have any general severance plan or policy.
SECTION 3.07. Litigation. There is no action, suit, inquiry, notice of
violation, proceeding (including any partial proceeding such as a deposition) or
investigation pending or threatened in writing against or affecting Peakway, any
subsidiary or any of their respective properties before or by any court,
arbitrator, governmental or administrative agency, regulatory authority
(federal, state, county, local or foreign), stock market, stock exchange or
trading facility ("ACTION") which (i) adversely affects or challenges the
legality, validity or enforceability of any of this Agreement or the Shares or
(ii) could, if there were an unfavorable decision, individually or in the
aggregate, have or reasonably be expected to result in a Peakway Material
Adverse Effect. Neither Peakway nor any subsidiary, nor any director or officer
thereof (in his or her capacity as such), is or has been the subject of any
Action involving a claim or violation of or liability under federal or state
securities laws or a claim of breach of fiduciary duty.
SECTION 3.08. Compliance with Applicable Laws. Peakway and Peakway
Subsidiaries are in compliance with all applicable Laws, including those
relating to occupational, health and safety and the environment, except for
instances of noncompliance that, individually and in the aggregate, have not had
and would not reasonably be expected to have a Peakway Material Adverse Effect.
Except as set forth in Peakway Disclosure Letter, Peakway has not received any
written communication during the past two years from a Governmental Entity that
alleges that Peakway is not in compliance in any material respect with any
applicable Law.
SECTION 3.09. Brokers; Schedule of Fees and Expenses. No broker, investment
banker, financial advisor or other person is entitled to any broker's, finder's,
financial advisor's or other similar fee or commission in connection with the
Transactions based upon arrangements made by or on behalf of Peakway.
SECTION 3.10. Contracts. Except as disclosed in Peakway Disclosure Letter,
there are no Contracts that are material to the business, properties, assets,
condition (financial or otherwise), results of operations or prospects of
Peakway and its subsidiaries taken as a whole. Neither Peakway nor any Peakway
Subsidiary is in violation of or in default under (nor does there exist any
condition which upon the passage of time or the giving of notice would cause
such a violation of or default under) any Contract to which it is a party or by
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which it or any of its properties or assets is bound, except for violations or
defaults that would not, individually or in the aggregate, reasonably be
expected to result in a Peakway Material Adverse Effect.
SECTION 3.11. Title to Properties. Except as set forth in the Disclosure
Letter, Peakway and Peakway Subsidiaries do not own any real property. Each of
Peakway and Peakway Subsidiaries has sufficient title to, or valid leasehold
interests in, all of its properties and assets used in the conduct of its
businesses. All such assets and properties, other than assets and properties in
which Peakway or any of Peakway Subsidiaries has leasehold interests, are free
and clear of all Liens other than those set forth in Peakway Disclosure Letter
and except for Liens that, in the aggregate, do not and will not materially
interfere with the ability of Peakway and Peakway Subsidiaries to conduct
business as currently conducted.
SECTION 3.12. Intellectual Property. Peakway and Peakway Subsidiaries own,
or are validly licensed or otherwise have the right to use, all patents, patent
rights, trademarks, trademark rights, trade names, trade name rights, service
marks, service mark rights, copyrights and other proprietary intellectual
property rights and computer programs (collectively, "INTELLECTUAL PROPERTY
RIGHTS") which are material to the conduct of the business of Peakway and
Peakway Subsidiaries taken as a whole. The Peakway Disclosure Letter sets forth
a description of all Intellectual Property Rights which are material to the
conduct of the business of Peakway and Peakway Subsidiaries taken as a whole.
There are no claims pending or, to the knowledge of Peakway, threatened that
Peakway or any of Peakway Subsidiaries is infringing or otherwise adversely
affecting the rights of any person with regard to any Intellectual Property
Right. To the knowledge of Peakway, no person is infringing the rights of
Peakway or any of Peakway Subsidiaries with respect to any Intellectual Property
Right.
SECTION 3.13. Labor Matters. Except as set forth in Peakway Disclosure
Letter, there are no collective bargaining or other labor union agreements to
which Peakway or any of Peakway Subsidiaries is a party or by which any of them
is bound. No material labor dispute exists or, to the knowledge of Peakway, is
imminent with respect to any of the employees of Peakway.
SECTION 3.14. Financial Statements. Prior to the Closing Peakway will
deliver to the Pubco its audited consolidated financial statements for the
quarter ended June 30, 2009 and for the fiscal years ended December 31, 2008,
and 2007 (collectively, the "PEAKWAY FINANCIAL STATEMENTS"). Upon delivery,
Peakway Financial Statements will have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis
throughout the periods indicated. The Peakway Financial Statements will fairly
present in all material respects the financial condition and operating results
of Peakway, as of the dates, and for the periods, indicated therein. Peakway
will not have any material liabilities or obligations, contingent or otherwise,
other than (i) liabilities incurred in the ordinary course of business
subsequent to December 31, 2008, and (ii) obligations under contracts and
commitments incurred in the ordinary course of business and not required under
generally accepted accounting principles to be reflected in Peakway Financial
Statements, which, in both cases, individually and in the aggregate would not be
reasonably expected to result in a Peakway Material Adverse Effect.
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SECTION 3.15. Solvency. Based on the financial condition of Peakway as of
the closing date (and assuming that the closing shall have occurred), (i)
Peakway's fair saleable value of its assets exceeds the amount that will be
required to be paid on or in respect of Peakway's existing debts and other
liabilities (including known contingent liabilities) as they mature, (ii)
Peakway's assets do not constitute unreasonably small capital to carry on its
business for the current fiscal year as now conducted and as proposed to be
conducted including its capital needs taking into account the particular capital
requirements of the business conducted by Peakway, and projected capital
requirements and capital availability thereof, and (iii) the current cash flow
of Peakway, together with the proceeds Peakway would receive, were it to
liquidate all of its assets, after taking into account all anticipated uses of
the cash, would be sufficient to pay all amounts on or in respect of its debt
when such amounts are required to be paid. Peakway does not intend to incur
debts beyond its ability to pay such debts as they mature (taking into account
the timing and amounts of cash to be payable on or in respect of its debt).
SECTION 3.16. No Additional Agreements. Peakway does not have any agreement
or understanding with the Stockholder with respect to the transactions
contemplated by this Agreement other than as specified in this Agreement.
SECTION 3.17. Investment Company. Peakway is not, and is not an affiliate
of, and immediately following the Closing will not have become, an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
SECTION 3.18. Disclosure. All disclosure provided to the Stockholder
regarding Peakway, its business and the transactions contemplated hereby,
furnished by or on behalf of Peakway (including Peakway's representations and
warranties set forth in this Agreement) are true and correct and do not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
SECTION 3.19. Absence of Certain Changes or Events. Except as disclosed in
Peakway Financial Statements or in Peakway Disclosure Letter, from June 30, 2009
to the date of this Agreement, Peakway has conducted its business only in the
ordinary course, and during such period there has not been:
(a) any change in the assets, liabilities, financial condition or
operating results of Peakway or any Peakway Subsidiary, except changes in
the ordinary course of business that have not caused, in the aggregate, a
Peakway Material Adverse Effect;
(b) any damage, destruction or loss, whether or not covered by
insurance, that would have a Peakway Material Adverse Effect;
(c) any waiver or compromise by Peakway or any Peakway Subsidiary of a
valuable right or of a material debt owed to it;
(d) any satisfaction or discharge of any lien, claim, or encumbrance
or payment of any obligation by Peakway or any Peakway Subsidiary, except
in the ordinary course of business and the satisfaction or discharge of
which would not have a Peakway Material Adverse Effect;
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(e) any material change to a material Contract by which Peakway or any
Peakway Subsidiary or any of its respective assets is bound or subject;
(f) any mortgage, pledge, transfer of a security interest in, or lien,
created by Peakway or any Peakway Subsidiary, with respect to any of its
material properties or assets, except liens for taxes not yet due or
payable and liens that arise in the ordinary course of business and do not
materially impair Peakway's or such Peakway Subsidiary's ownership or use
of such property or assets;
(g) any loans or guarantees made by Peakway or any Peakway Subsidiary
to or for the benefit of its employees, officers or directors, or any
members of their immediate families, other than travel advances and other
advances made in the ordinary course of its business;
(h) any alteration of Peakway's method of accounting or the identity
of its auditors;
(i) any declaration or payment of dividend or distribution of cash or
other property to Stockholders or any purchase, redemption or agreements to
purchase or redeem any shares of Peakway Stock;
(j) any issuance of equity securities to any officer, director or
affiliate, except pursuant to existing Peakway stock option plans; or
(k) any arrangement or commitment by Peakway or any Peakway Subsidiary
to do any of the things described in this Section 3.19.
SECTION 3.20. Compliance with PRC Anti-Corruption Laws. Neither Peakway,
nor any of its subsidiaries, nor, to Peakway's knowledge, any director, officer,
agent, employee or other person acting on behalf of Peakway or any of its
subsidiaries has, in the course of its actions for, or on behalf of, Peakway (i)
used any corporate funds for any unlawful contribution, gift, entertainment or
other unlawful expenses relating to political activity; (ii) made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; (iii) violated or is in violation of applicable
PRC laws; or (iv) made any unlawful bribe, rebate, payoff, influence payment,
kickback or other unlawful payment to any foreign or domestic government
official or employee.
ARTICLE IV
Representations and Warranties of the Pubco
The Pubco represents and warrants to the Stockholder and Peakway that,
except as set forth in the reports, schedules, forms, statements and other
documents filed by Pubco with the SEC and publicly available prior to the date
of the Agreement (the "FILED PUBCO SEC DOCUMENTS") or in the letter, which will
be delivered by the Pubco to Peakway and the Stockholder concurrently herewith
(the "PUBCO DISCLOSURE LETTER"):
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SECTION 4.01. Organization, Standing and Power. Pubco is duly incorporated,
validly existing and in good standing under the laws of the State of Delaware
and has full corporate power and authority and possesses all governmental
franchises, licenses, permits, authorizations and approvals necessary to enable
it to own, lease or otherwise hold its properties and assets and to conduct its
businesses as presently conducted, other than such franchises, licenses,
permits, authorizations and approvals the lack of which, individually or in the
aggregate, has not had and would not reasonably be expected to have a material
adverse effect on Pubco, a material adverse effect on the ability of Pubco to
perform its obligations under this Agreement or on the ability of Pubco to
consummate the Transactions (a "PUBCO MATERIAL ADVERSE EFFECT"). Pubco is duly
qualified to do business in each jurisdiction where the nature of its business
or their ownership or leasing of its properties make such qualification
necessary and where the failure to so qualify would reasonably be expected to
have a Pubco Material Adverse Effect. Pubco has delivered to Peakway true and
complete copies of the certificate of incorporation of Pubco, as amended to the
date of this Agreement (as so amended, the "PUBCO CHARTER"), and the Bylaws of
Pubco, as amended to the date of this Agreement (as so amended, the "PUBCO
Bylaws").
SECTION 4.02. Subsidiaries; Equity Interests. Pubco does not own, directly
or indirectly, any capital stock, membership interest, partnership interest,
joint venture interest or other equity interest in any person.
SECTION 4.03. Capital Structure. The authorized capital stock of the Pubco
consists of Seventy-Five Million (75,000,000) shares of Pubco Common Stock, par
value $0.0001 per share. As of the date hereof, (i) 4,500,000 shares of Pubco
Common Stock are issued and outstanding. Except as set forth above, no shares of
capital stock or other voting securities of Pubco were issued, reserved for
issuance or outstanding. All outstanding shares of the capital stock of Pubco
are, and all such shares that may be issued prior to the date hereof will be
when issued, duly authorized, validly issued, fully paid and nonassessable and
not subject to or issued in violation of any purchase option, call option, right
of first refusal, preemptive right, subscription right or any similar right
under any provision of the General Corporation Law of the State of Delaware, the
Pubco Charter, the Pubco Bylaws or any Contract to which Pubco is a party or
otherwise bound. There are not any bonds, debentures, notes or other
indebtedness of Pubco having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote) on any matters on which
holders of Pubco Common Stock may vote ("VOTING PUBCO DEBT"). Except as set
forth above, as of the date of this Agreement, there are not any options,
warrants, rights, convertible or exchangeable securities, "phantom" stock
rights, stock appreciation rights, stock-based performance units, commitments,
Contracts, arrangements or undertakings of any kind to which Pubco is a party or
by which it is bound (i) obligating Pubco to issue, deliver or sell, or cause to
be issued, delivered or sold, additional shares of capital stock or other equity
interests in, or any security convertible or exercisable for or exchangeable
into any capital stock of or other equity interest in, Pubco or any Voting Pubco
Debt, (ii) obligating Pubco to issue, grant, extend or enter into any such
option, warrant, call, right, security, commitment, Contract, arrangement or
undertaking or (iii) that give any person the right to receive any economic
benefit or right similar to or derived from the economic benefits and rights
occurring to holders of the capital stock of the Pubco. As of the date of this
Agreement, there are not any outstanding contractual obligations of Pubco to
repurchase, redeem or otherwise acquire any shares of capital stock of Pubco.
Except as set forth in Schedule 4.03, the Pubco is not a party to any agreement
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granting any securityholder of the Pubco the right to cause the Pubco to
register shares of the capital stock or other securities of the Pubco held by
such securityholder under the Securities Act. The stockholder list to be
provided at closing to Peakway shall be a current shareholder list generated by
its stock transfer agent, and such list shall accurately reflect all of the
issued and outstanding shares of the Pubco's Common Stock.
SECTION 4.04. Authority; Execution and Delivery; Enforceability. The
execution and delivery by the Pubco of this Agreement and the consummation by
the Pubco of the Transactions have been duly authorized and approved by the
Board of Directors of the Pubco and no other corporate proceedings on the part
of the Pubco, except for the filing of a Certificate of Completion (as
hereinafter defined), are necessary to authorize this Agreement and the
Transactions. This Agreement constitutes a legal, valid and binding obligation
of the Pubco, enforceable against the Pubco in accordance with the terms hereof.
SECTION 4.05. No Conflicts; Consents.
(a) Except as set forth in the Pubco Disclosure Letter, the execution and
delivery by Pubco of this Agreement, does not, and the consummation of
Transactions and compliance with the terms hereof and thereof will not, conflict
with, or result in any violation of or default (with or without notice or lapse
of time, or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or to loss of a material benefit under, or to
increased, additional, accelerated or guaranteed rights or entitlements of any
person under, or result in the creation of any Lien upon any of the properties
or assets of Pubco under, any provision of (i) Pubco Charter or Pubco Bylaws,
(ii) any material Contract to which Pubco is a party or by which any of its
properties or assets is bound or (iii) subject to the filings and other matters
referred to in Section 4.05(b), any material Judgment or material Law applicable
to Pubco or its properties or assets, other than, in the case of clauses (ii)
and (iii) above, any such items that, individually or in the aggregate, have not
had and would not reasonably be expected to have a Pubco Material Adverse
Effect.
(b) No Consent of, or registration, declaration or filing with, or permit
from, any Governmental Entity is required to be obtained or made by or with
respect to Pubco in connection with the execution, delivery and performance of
this Agreement or the consummation of the Transactions, other than the filings
under state "blue sky" laws, as may be required in connection with this
Agreement and the Transactions.
SECTION 4.06. SEC Documents; Undisclosed Liabilities.
(a) Pubco has filed all reports, schedules, forms, statements and other
documents required to be filed by Pubco with the SEC (the "PUBCO SEC
DOCUMENTS").
(b) As of its respective filing date, each Pubco SEC Document complied in
all material respects with the requirements of the Exchange Act and the rules
and regulations of the SEC promulgated thereunder applicable to such Pubco SEC
Document, and did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. Except to the extent that information contained in any
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Pubco SEC Document has been revised or superseded by a later filed Pubco SEC
Document, none of the Pubco SEC Documents contains any untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The consolidated
financial statements of Pubco included in the Pubco SEC Documents comply as to
form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with the U.S. generally accepted accounting principals
("GAAP") (except, in the case of unaudited statements, as permitted by the rules
and regulations of the SEC) applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto) and fairly present
the consolidated financial position of Pubco and its consolidated subsidiaries
as of the dates thereof and the consolidated results of their operations and
cash flows for the periods shown (subject, in the case of unaudited statements,
to normal year-end audit adjustments).
(c) Except as set forth in the Filed Pubco SEC Documents, Pubco has no
liabilities or obligations of any nature (whether accrued, absolute, contingent
or otherwise) required by GAAP to be set forth on a balance sheet of Pubco or in
the notes thereto. The Pubco Disclosure Letter sets forth all financial and
contractual obligations and liabilities (including any obligations to issue
capital stock or other securities of the Pubco) due after the date hereof. As of
the date hereof the Pubco has total liabilities of less than $1,000, all of
which liabilities shall be paid off at or prior to the Closing and shall in no
event remain liabilities of the Pubco, Peakway or the Stockholder following the
Closing.
SECTION 4.07. Absence of Certain Changes or Events. Except as disclosed in
the Filed Pubco SEC Documents or in the Pubco Disclosure Letter, from the date
of the most recent audited financial statements included in the Filed Pubco SEC
Documents to the date of this Agreement, Pubco has conducted its business only
in the ordinary course, and during such period there has not been:
(a) any change in the assets, liabilities, financial condition or
operating results of the Pubco from that reflected in the Pubco SEC
Documents, except changes in the ordinary course of business that have not
caused, in the aggregate, a Pubco Material Adverse Effect;
(b) any damage, destruction or loss, whether or not covered by
insurance, that would have a Pubco Material Adverse Effect;
(c) any waiver or compromise by the Pubco of a valuable right or of a
material debt owed to it;
(d) any satisfaction or discharge of any lien, claim, or encumbrance
or payment of any obligation by the Pubco, except in the ordinary course of
business and the satisfaction or discharge of which would not have a Pubco
Material Adverse Effect;
(e) any material change to a material Contract by which the Pubco or
any of its assets is bound or subject;
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(f) any material change in any compensation arrangement or agreement
with any employee, officer, director or stockholder;
(g) any resignation or termination of employment of any officer of the
Pubco;
(h) any mortgage, pledge, transfer of a security interest in, or lien,
created by the Pubco, with respect to any of its material properties or
assets, except liens for taxes not yet due or payable and liens that arise
in the ordinary course of business and do not materially impair the Pubco's
ownership or use of such property or assets;
(i) any loans or guarantees made by the Pubco to or for the benefit of
its employees, officers or directors, or any members of their immediate
families, other than travel advances and other advances made in the
ordinary course of its business;
(j) any declaration, setting aside or payment or other distribution in
respect of any of the Pubco's capital stock, or any direct or indirect
redemption, purchase, or other acquisition of any of such stock by the
Pubco;
(k) any alteration of the Pubco's method of accounting or the identity
of its auditors;
(l) any issuance of equity securities to any officer, director or
affiliate, except pursuant to existing Pubco stock option plans; or
(m) any arrangement or commitment by the Pubco to do any of the things
described in this Section 4.07.
SECTION 4.08. Taxes.
(a) Pubco has timely filed, or has caused to be timely filed on its behalf,
all Tax Returns required to be filed by it, and all such Tax Returns are true,
complete and accurate, except to the extent any failure to file or any
inaccuracies in any filed Tax Returns, individually or in the aggregate, have
not had and would not reasonably be expected to have a Pubco Material Adverse
Effect. All Taxes shown to be due on such Tax Returns, or otherwise owed, has
been timely paid, except to the extent that any failure to pay, individually or
in the aggregate, has not had and would not reasonably be expected to have a
Pubco Material Adverse Effect.
(b) The most recent financial statements contained in the Filed Pubco SEC
Documents reflect an adequate reserve for all Taxes payable by Pubco (in
addition to any reserve for deferred Taxes to reflect timing differences between
book and Tax items) for all Taxable periods and portions thereof through the
date of such financial statements. No deficiency with respect to any Taxes has
been proposed, asserted or assessed against Pubco, and no requests for waivers
of the time to assess any such Taxes are pending, except to the extent any such
deficiency or request for waiver, individually or in the aggregate, has not had
and would not reasonably be expected to have a Pubco Material Adverse Effect.
(c) There are no Liens for Taxes (other than for current Taxes not yet due
and payable) on the assets of Pubco. Pubco is not bound by any agreement with
respect to Taxes.
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SECTION 4.09. Absence of Changes in Benefit Plans. From the date of the
most recent audited financial statements included in the Filed Pubco SEC
Documents to the date of this Agreement, there has not been any adoption or
amendment in any material respect by Pubco of any collective bargaining
agreement or any bonus, pension, profit sharing, deferred compensation,
incentive compensation, stock ownership, stock purchase, stock option, phantom
stock, retirement, vacation, severance, disability, death benefit,
hospitalization, medical or other plan, arrangement or understanding (whether or
not legally binding) providing benefits to any current or former employee,
officer or director of Pubco (collectively, "PUBCO BENEFIT PLANS"). As of the
date of this Agreement there are not any employment, consulting,
indemnification, severance or termination agreements or arrangements between the
Pubco and any current or former employee, officer or director of the Pubco, nor
does the Pubco have any general severance plan or policy.
SECTION 4.10. ERISA Compliance; Excess Parachute Payments. The Pubco does
not, and since its inception never has, maintained, or contributed to any
"employee pension benefit plans" (as defined in Section 3(2) of ERISA),
"employee welfare benefit plans" (as defined in Section 3(1) of ERISA) or any
other Pubco Benefit Plan for the benefit of any current or former employees,
consultants, officers or directors of Pubco.
SECTION 4.11. Litigation. There is no Action which (i) adversely affects or
challenges the legality, validity or enforceability of any of this Agreement or
the Shares or (ii) could, if there were an unfavorable decision, individually or
in the aggregate, have or reasonably be expected to result in a Pubco Material
Adverse Effect. Neither the Pubco nor any subsidiary, nor any director or
officer thereof (in his or her capacity as such), is or has been the subject of
any Action involving a claim or violation of or liability under federal or state
securities laws or a claim of breach of fiduciary duty.
SECTION 4.12. Compliance with Applicable Laws. Pubco is in compliance with
all applicable Laws, including those relating to occupational health and safety
and the environment, except for instances of noncompliance that, individually
and in the aggregate, have not had and would not reasonably be expected to have
a Pubco Material Adverse Effect. Except as set forth in the Filed Pubco SEC
Documents or in the Pubco Disclosure Letter, Pubco has not received any written
communication during the past two years from a Governmental Entity that alleges
that Pubco is not in compliance in any material respect with any applicable Law.
The Pubco is in compliance with all effective requirements of the Sarbanes-Oxley
Act of 2002, as amended, and the rules and regulations thereunder, that are
applicable to it, except where such noncompliance could not have or reasonably
be expected to result in a Pubco Material Adverse Effect. This Section 4.12 does
not relate to matters with respect to Taxes, which are the subject of Section
4.08.
SECTION 4.13. Contracts. Except as disclosed in the Pubco Filed SEC
Documents, there are no Contracts that are material to the business, properties,
assets, condition (financial or otherwise), results of operations or prospects
of the Pubco taken as a whole. Pubco is not in violation of or in default under
(nor does there exist any condition which upon the passage of time or the giving
of notice would cause such a violation of or default under) any Contract to
which it is a party or by which it or any of its properties or assets is bound,
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except for violations or defaults that would not, individually or in the
aggregate, reasonably be expected to result in a Pubco Material Adverse Effect.
SECTION 4.14. Title to Properties. Pubco has good title to, or valid
leasehold interests in, all of its properties and assets used in the conduct of
its businesses. All such assets and properties, other than assets and properties
in which the Pubco has leasehold interests, are free and clear of all Liens
other than those set forth in the Pubco Disclosure Letter and except for Liens
that, in the aggregate, do not and will not materially interfere with the
ability of the Pubco to conduct business as currently conducted. Pubco has
complied in all material respects with the terms of all material leases to which
it is a party and under which it is in occupancy, and all such leases are in
full force and effect. Pubco enjoys peaceful and undisturbed possession under
all such material leases.
SECTION 4.15. Intellectual Property. Pubco owns, or is validly licensed or
otherwise has the right to use, all Intellectual Property Rights which are
material to the conduct of the business of the Pubco taken as a whole. The Pubco
Disclosure Letter sets forth a description of all Intellectual Property Rights
which are material to the conduct of the business of the Pubco taken as a whole.
Except as set forth in the Pubco Disclosure Letter no claims are pending or, to
the knowledge of the Pubco, threatened that the Pubco is infringing or otherwise
adversely affecting the rights of any person with regard to any Intellectual
Property Right. To the knowledge of the Pubco, no person is infringing the
rights of the Pubco with respect to any Intellectual Property Right.
SECTION 4.16. Labor Matters. There are no collective bargaining or other
labor union agreements to which the Pubco is a party or by which it is bound. No
material labor dispute exists or, to the knowledge of the Pubco, is imminent
with respect to any of the employees of the Pubco.
SECTION 4.17. Market Makers. The Pubco has at least two market makers for
its common shares and such market makers have obtained all permits and made all
filings necessary in order for such market makers to continue as market makers
of the Pubco.
SECTION 4.18. Transactions With Affiliates and Employees. Except as set
forth in the Filed Pubco SEC Documents and Pubco Disclosure Letter, none of the
officers or directors of the Pubco and, to the knowledge of the Pubco, none of
the employees of the Pubco is presently a party to any transaction with the
Pubco or any subsidiary (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Pubco, any entity in which
any officer, director, or any such employee has a substantial interest or is an
officer, director, trustee or partner.
SECTION 4.19. Internal Accounting Controls. The Pubco maintains a system of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability, (iii) access to
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assets is permitted only in accordance with management's general or specific
authorization, and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences. The Pubco has established disclosure controls and
procedures for the Pubco and designed such disclosure controls and procedures to
ensure that material information relating to the Pubco is made known to the
officers by others within those entities. The Pubco's officers have evaluated
the effectiveness of the Pubco's controls and procedures. Since June 30, 2009,
there have been no significant changes in the Pubco's internal controls or, to
the Pubco's knowledge, in other factors that could significantly affect the
Pubco's internal controls.
SECTION 4.20. Solvency. Based on the financial condition of the Pubco as of
the closing date (and assuming that the closing shall have occurred), (i) the
Pubco's fair saleable value of its assets exceeds the amount that will be
required to be paid on or in respect of the Pubco's existing debts and other
liabilities (including known contingent liabilities) as they mature, (ii) the
Pubco's assets do not constitute unreasonably small capital to carry on its
business for the current fiscal year as now conducted and as proposed to be
conducted including its capital needs taking into account the particular capital
requirements of the business conducted by the Pubco, and projected capital
requirements and capital availability thereof, and (iii) the current cash flow
of the Pubco, together with the proceeds the Pubco would receive, were it to
liquidate all of its assets, after taking into account all anticipated uses of
the cash, would be sufficient to pay all amounts on or in respect of its debt
when such amounts are required to be paid. The Pubco does not intend to incur
debts beyond its ability to pay such debts as they mature (taking into account
the timing and amounts of cash to be payable on or in respect of its debt).
SECTION 4.21. Application of Takeover Protections. The Pubco has taken all
necessary action, if any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provision under the Pubco's
charter documents or the laws of its state of incorporation that is or could
become applicable to the Stockholder as a result of the Stockholder and the
Pubco fulfilling their obligations or exercising their rights under this
Agreement, including, without limitation, the issuance of the Shares and the
Stockholder's ownership of the Shares.
SECTION 4.22. No Additional Agreements. The Pubco does not have any
agreement or understanding with the Stockholder with respect to the transactions
contemplated by this Agreement other than as specified in this Agreement.
SECTION 4.23. Investment Company. The Pubco is not, and is not an affiliate
of, and immediately following the Closing will not have become, an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
SECTION 4.24. Disclosure. All disclosure provided to the Stockholder
regarding the Pubco, its business and the transactions contemplated hereby,
furnished by or on behalf of the Pubco (including the Pubco's representations
and warranties set forth in this Agreement) are true and correct and do not
contain any untrue statement of a material fact or omit to state any material
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fact necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
SECTION 4.25. Certain Registration Matters. Except as specified in the
Pubco Disclosure Letter and Filed Pubco SEC Documents, the Pubco has not granted
or agreed to grant to any person any rights (including "piggy-back" registration
rights) to have any securities of the Pubco registered with the SEC or any other
governmental authority that have not been satisfied. SECTION 4.26. Listing and
Maintenance Requirements. The Pubco is, and has no reason to believe that it
will not in the foreseeable future continue to be, in compliance with the
listing and maintenance requirements for continued listing of the Pubco Stock on
the trading market on which the Pubco Stock are currently listed or quoted. The
issuance and sale of the Shares under this Agreement does not contravene the
rules and regulations of the trading market on which the Pubco Stock are
currently listed or quoted, and no approval of the stockholders of the Pubco is
required for the Pubco to issue and deliver to the Stockholder the Shares
contemplated by this Agreement.
SECTION 4.26. No Undisclosed Events, Liabilities, Developments or
Circumstances. No event, liability, development or circumstance has occurred or
exists, or is contemplated to occur with respect to the Pubco, its subsidiaries
or their respective business, properties, prospects, operations or financial
condition, that would be required to be disclosed by the Pubco under applicable
securities laws on a registration statement on Form S-1 filed with the SEC
relating to an issuance and sale by the Pubco of its Common Stock and which has
not been publicly announced.
SECTION 4.27. Foreign Corrupt Practices. Neither the Pubco, nor any of its
subsidiaries, nor, to the Pubco's knowledge, any director, officer, agent,
employee or other person acting on behalf of the Pubco or any of its
subsidiaries has, in the course of its actions for, or on behalf of, the Pubco
(i) used any corporate funds for any unlawful contribution, gift, entertainment
or other unlawful expenses relating to political activity; (ii) made any direct
or indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; (iii) violated or is in violation of any
provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (iv)
made any unlawful bribe, rebate, payoff, influence payment, kickback or other
unlawful payment to any foreign or domestic government official or employee.
ARTICLE V
Deliveries
SECTION 5.01. Deliveries of the Stockholder.
(a) Concurrently herewith the Stockholder is delivering to the Pubco this
Agreement executed by the Stockholder.
(b) On Closing date, the Stockholder shall deliver to the Pubco:
(i) certificates representing its Peakway Stock; and
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(ii) duly executed instruments of transfer by the Stockholder of its
Peakway Stock to the Pubco.
SECTION 5.02. Deliveries of the Pubco.
(a) Concurrently herewith, the Pubco is delivering:
(i) to the Stockholder and to Peakway, a copy of this Agreement
executed by Pubco;
(ii) to Peakway, a certificate from the Pubco, signed by its Secretary
or Assistant Secretary certifying that the attached copies of the
Pubco Charter, Pubco Bylaws and resolutions of the Board of
Directors of the Pubco approving the Agreement and the
Transactions, are all true, complete and correct and remain in
full force and effect;
(b) At or prior to the Closing, the Pubco shall deliver:
(i) to Peakway, a letter of resignation of Chen Yi from all offices
he holds with the Pubco effective upon the Closing and from his
position as a director of the Pubco; and
(ii) to Peakway, evidence of the election (A) of five directors to the
board of directors of the Pubco and (B) of the executive officers
of Peakway as executive officers of the Pubco effective upon the
Closing.
(c) On Closing date, the Pubco shall deliver:
to the Stockholder, certificates representing the new shares of Pubco Stock
issued to the Stockholder as set forth on Exhibit A.
SECTION 5.03. Deliveries of Peakway.
Concurrently herewith, Peakway is delivering to the Pubco this Agreement
executed by Peakway
ARTICLE VI
Conditions to Closing
SECTION 6.01. Stockholder and Peakway Conditions Precedent. The obligations
of the Stockholder and Peakway to enter into and complete the Closing is
subject, at the option of the Stockholder and Peakway, to the fulfillment on or
prior to the Closing Date of the following conditions:
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(a) Representations and Covenants. The representations and warranties of
the Pubco contained in this Agreement shall be true in all material respects on
and as of the Closing Date with the same force and effect as though made on and
as of the Closing Date. The Pubco shall have performed and complied in all
material respects with all covenants and agreements required by this Agreement
to be performed or complied with by the Pubco on or prior to the Closing Date.
(b) Litigation. No action, suit or proceeding shall have been instituted
before any court or governmental or regulatory body or instituted or threatened
by any governmental or regulatory body to restrain, modify or prevent the
carrying out of the Transactions or to seek damages or a discovery order in
connection with such Transactions, or which has or may have, in the reasonable
opinion of Peakway or the Stockholder, a materially adverse effect on the
assets, properties, business, operations or condition (financial or otherwise)
of the Pubco or Peakway.
(c) No Material Adverse Change. There shall not have been any occurrence,
event, incident, action, failure to act, or transaction since June 30, 2009
which has had or is reasonably likely to cause a Pubco Material Adverse Effect.
(d) Post-Closing Capitalization. At, and immediately after, the Closing,
the authorized capitalization, and the number of issued and outstanding shares
of the capital stock of Peakway and the Pubco, on a fully-diluted basis, as
indicated on a schedule to be delivered by the Parties at or prior to the
Closing, shall be acceptable to the Stockholder in its sole and absolute
discretion.
(e) SEC Reports. The Pubco shall have filed all reports and other documents
required to be filed by Pubco under the U.S. federal securities laws through the
Closing Date.
(f) OTCBB Quotation. The Pubco shall have maintained its status as a
company whose common stock is quoted on the Over-the-Counter Bulletin Board and
no reason shall exist as to why such status shall not continue immediately
following the Closing.
(g) Deliveries. The deliveries specified in Section 5.02 shall have been
made by the Pubco.
(h) No Suspensions of Trading in Pubco Stock; Listing. Trading in the Pubco
Stock shall not have been suspended by the SEC or any trading market (except for
any suspensions of trading of not more than one trading day solely to permit
dissemination of material information regarding the Pubco) at any time since the
date of execution of this Agreement, and the Pubco Stock shall have been at all
times since such date listed for trading on a trading market.
(i) Satisfactory Completion of Due Diligence. Peakway and the Stockholder
shall have completed their legal, accounting and business due diligence of the
Pubco and the results thereof shall be satisfactory to Peakway and the
Stockholder in their sole and absolute discretion.
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(j) Delivery of PRC Legal Opinion. Pubco shall have received an opinion
from Peakway's legal counsel in the People's Republic of China that confirms the
legality under Chinese law in connection with the Transactions.
SECTION 6.02. Pubco Conditions Precedent. The obligations of the Pubco to
enter into and complete the Closing is subject, at the option of the Pubco, to
the fulfillment on or prior to the Closing Date of the following conditions, any
one or more of which may be waived by the Pubco in writing.
(a) Representations and Covenants. The representations and warranties of
the Stockholder and Peakway contained in this Agreement shall be true in all
material respects on and as of the Closing Date with the same force and effect
as though made on and as of the Closing Date. The Stockholder and Peakway shall
have performed and complied in all material respects with all covenants and
agreements required by this Agreement to be performed or complied with by the
Stockholder and Peakway on or prior to the Closing Date. Peakway shall have
delivered to the Pubco, if requested, a certificate, dated the Closing Date, to
the foregoing effect.
(b) Litigation. No action, suit or proceeding shall have been instituted
before any court or governmental or regulatory body or instituted or threatened
by any governmental or regulatory body to restrain, modify or prevent the
carrying out of the Transactions or to seek damages or a discovery order in
connection with such Transactions, or which has or may have, in the reasonable
opinion of the Pubco, a materially adverse effect on the assets, properties,
business, operations or condition (financial or otherwise) of the Pubco.
(c) No Material Adverse Change. There shall not have been any occurrence,
event, incident, action, failure to act, or transaction since June 30, 2009
which has had or is reasonably likely to cause a Peakway Material Adverse
Effect.
(d) Deliveries. The deliveries specified in Section 5.01 and Section 5.03
shall have been made by the Stockholder and Peakway, respectively.
(e) Post-Closing Capitalization. At, and immediately after, the Closing,
the authorized capitalization, and the number of issued and outstanding shares
of the capital stock of Peakway and the Pubco, on a fully-diluted basis, as
indicated on a schedule to be delivered by the Parties at or prior to the
Closing, shall be acceptable to the Pubco in its sole and absolute discretion.
ARTICLE VII
Covenants
SECTION 7.01. Blue Sky Laws. Pubco shall take any action (other than
qualifying to do business in any jurisdiction in which it is not now so
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qualified) required to be taken under any applicable state securities laws in
connection with the issuance of Pubco Stock in connection with this Agreement.
SECTION 7.02. Fees and Expenses. All fees and expenses incurred in
connection with this Agreement shall be paid by the Party incurring such fees or
expenses, whether or not this Agreement is consummated.
SECTION 7.03. Continued Efforts. Each Party shall use commercially
reasonable efforts to (a) take all action reasonably necessary to consummate the
Transactions, and (b) take such steps and do such acts as may be necessary to
keep all of its representations and warranties true and correct as of the
Closing Date with the same effect as if the same had been made, and this
Agreement had been dated, as of the Closing Date.
SECTION 7.04. Conduct of Business. During the period from the date hereof
through the Closing Date, Pubco and Peakway shall carry on their respective
businesses in the ordinary and usual course consistent with past practice.
SECTION 7.05. Exclusivity. The Pubco shall not (i) solicit, initiate, or
encourage the submission of any proposal or offer from any person relating to
the acquisition of any capital stock or other voting securities of the Pubco, or
any assets of the Pubco (including any acquisition structured as a merger,
consolidation, share exchange or other business combination), (ii) participate
in any discussions or negotiations regarding, furnish any information with
respect to, assist or participate in, or facilitate in any other manner any
effort or attempt by any person to do or seek any of the foregoing, or (iii)
take any other action that is inconsistent with the Transactions and that has
the effect of avoiding the Closing contemplated hereby. The Pubco shall notify
Peakway immediately if any person makes any proposal, offer, inquiry, or contact
with respect to any of the foregoing.
SECTION 7.06. Filing of 8-K. As soon as practicable following the Closing
Date, Peakway shall provide the Pubco and the Stockholder with a draft of the
current report on Form 8-K that is reasonably acceptable to the Pubco and the
Stockholder that the Pubco shall file, within four business days of the Closing
Date and attaching as exhibits all relevant agreements with the SEC disclosing
the terms of this Agreement and other requisite disclosure regarding the
Transactions and including the requisite audited consolidated financial
statements of Peakway.
SECTION 7.07. Access. Each Party shall permit representatives of each other
Party to have full access to all premises, properties, personnel, books, records
(including Tax records), contracts, and documents of or pertaining to such
Party.
SECTION 7.08. Preservation of Business. From the date of this Agreement
until the Closing Date, each of Peakway and the Pubco shall operate only in the
ordinary and usual course of business consistent with past practice (provided,
however, that Pubco shall not issue any securities without the prior written
consent of Peakway), and shall use reasonable commercial efforts to (a) preserve
intact its respective business organization, (b) preserve the good will and
advantageous relationships with customers, suppliers, independent contractors,
employees and other Persons material to the operation of its respective
business, and (c) not permit any action or omission which would cause any of its
21
<PAGE>
respective representations or warranties contained herein to become inaccurate
or any of its respective covenants to be breached in any material respect.
ARTICLE VIII
Miscellaneous
SECTION 8.01. Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given upon receipt by the Parties at the following addresses (or at such other
address for a Party as shall be specified by like notice):
If to the Pubco, to:
Room 42, 4th Floor, New Henry House,
10 Ice Street, Central, Hong Kong
Tel: 00852 2810 7822
Fax: 00852 2845 0504
Attn: Yi Chen
If to Peakway, to:
No. 78 Kanglong East Road, Yangdaili, Chendai Township, Jinjiang
City, Fujian Province, P. R. China
Tel: (86 595) 8677 0999
Fax: (86 595) 8677 5388
Attn: Haiting Li
If to the Stockholder, to:
Room 42, 4th Floor, New Henry House, 10 Ice Street, Central, Hong Kong
Tel: (852) 2810 7822
Fax: (852) 2845 0504
Attn: Haiting Li
with a copy to:
King & Wood
40th Floor, Office Tower A, Beijing Fortune Plaza 7 Dongsanhuan Zhonglu,
Chaoyang District Beijing 100020, China.
Attention: Charles Law
Tel: 8610-58785372
Fax:8610-58785566
22
<PAGE>
SECTION 8.02. Amendments; Waivers; No Additional Consideration. No
provision of this Agreement may be waived or amended except in a written
instrument signed by Peakway, Pubco and the Stockholder holding a majority of
the Shares. No waiver of any default with respect to any provision, condition or
requirement of this Agreement shall be deemed to be a continuing waiver in the
future or a waiver of any subsequent default or a waiver of any other provision,
condition or requirement hereof, nor shall any delay or omission of either Party
to exercise any right hereunder in any manner impair the exercise of any such
right. No consideration shall be offered or paid to the Stockholder to amend or
consent to a waiver or modification of any provision of any transaction document
unless the same consideration is also offered to all Stockholders who then hold
Shares.
SECTION 8.03. Termination.
(a) Termination of Agreement.
Peakway, the Stockholder and the Pubco may terminate this Agreement by
mutual written consent at any time prior to the Closing;
(b) Effect of Termination. If any Party terminates this Agreement pursuant
to Section 8.03(a) above, all rights and obligations of the Parties hereunder
shall terminate without any Liability of any Party to any other Party to
consummate its obligations hereunder or to complete the transactions
contemplated by this Agreement, except for any Liability of any Party then in
breach.
SECTION 8.04. Power of Attorney. The Stockholder hereby irrevocably
constitutes and appoints Peakway and any officer or agent of Peakway, with full
power of substitution, as its true and lawful attorneys-in-fact with full
irrevocable power and authority in the place and stead of the Stockholder or in
Peakway's own name, for the purpose of carrying out the terms of this Agreement,
to take any and all appropriate action and to execute any and all documents and
instruments that may be necessary or useful to accomplish the purposes of this
Agreement and, without limiting the generality of the foregoing, hereby gives
said attorneys the power and right, on behalf of the Stockholder, without notice
to or assent by the Stockholder to transfer any future shares acquired by the
Stockholder and any purchase option, call option, right of first refusal,
preemptive right, subscription right or any similar right granted to the
Stockholder relating to transactions on or before the date hereof.
SECTION 8.05. Replacement of Securities. If any certificate or instrument
evidencing any Shares is mutilated, lost, stolen or destroyed, the Pubco shall
issue or cause to be issued in exchange and substitution for and upon
cancellation thereof, or in lieu of and substitution therefor, a new certificate
or instrument, but only upon receipt of evidence reasonably satisfactory to the
Pubco of such loss, theft or destruction and customary and reasonable indemnity,
if requested. The applicants for a new certificate or instrument under such
circumstances shall also pay any reasonable third-party costs associated with
the issuance of such replacement Shares. If a replacement certificate or
instrument evidencing any Shares is requested due to a mutilation thereof, the
Pubco may require delivery of such mutilated certificate or instrument as a
condition precedent to any issuance of a replacement.
23
<PAGE>
SECTION 8.06. Remedies. In addition to being entitled to exercise all
rights provided herein or granted by law, including recovery of damages, the
Stockholder, Pubco and Peakway will be entitled to specific performance under
this Agreement. The Parties agree that monetary damages may not be adequate
compensation for any loss incurred by reason of any breach of obligations
described in the foregoing sentence and hereby agrees to waive in any action for
specific performance of any such obligation the defense that a remedy at law
would be adequate.
SECTION 8.07. Independent Nature of Stockholders' Obligations and Rights.
The obligations of each Stockholder under this Agreement are several and not
joint with the obligations of any other Stockholder, and no Stockholder shall be
responsible in any way for the performance of the obligations of any other
Stockholder under this Agreement. The decision of each Stockholder to acquire
Shares pursuant to this Agreement has been made by such Stockholder
independently of any other Stockholder. Nothing contained herein, and no action
taken by any Stockholder pursuant hereto, shall be deemed to constitute the
Stockholder as a partnership, an association, a joint venture or any other kind
of entity, or create a presumption that the Stockholder are in any way acting in
concert or as a group with respect to such obligations or the transactions
contemplated herein. Each Stockholder acknowledges that no other Stockholder has
acted as agent for such Stockholder in connection with making its investment
hereunder and that no Stockholder will be acting as agent of such Stockholder in
connection with monitoring its investment in the Shares or enforcing its rights
under this Agreement. Each Stockholder shall be entitled to independently
protect and enforce its rights, including without limitation the rights arising
out of this Agreement, and it shall not be necessary for any other Stockholder
to be joined as an additional party in any proceeding for such purpose. Each of
Peakway and Pubco acknowledge that the Stockholder has been provided with this
same Agreement for the purpose of closing a transaction with multiple
Stockholders and not because it was required or requested to do so by any
Stockholder.
SECTION 8.08. Limitation of Liability. Notwithstanding anything herein to
the contrary, each of the Pubco and Peakway acknowledge and agree that the
liability of a Stockholder arising directly or indirectly, under any transaction
document of any and every nature whatsoever shall be satisfied solely out of the
assets of such Stockholder, and that no trustee, officer, other investment
vehicle or any other affiliate of such Stockholder or any investor, shareholder
or holder of shares of beneficial interest of such Stockholder shall be
personally liable for any liabilities of such Stockholder.
SECTION 8.09. Interpretation. When a reference is made in this Agreement to
a Section, such reference shall be to a Section of this Agreement unless
otherwise indicated. Whenever the words "include", "includes" or "including" are
used in this Agreement, they shall be deemed to be followed by the words
"without limitation".
SECTION 8.10. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule or Law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the Transactions contemplated hereby is not affected in any manner
materially adverse to any Party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the Parties shall
24
<PAGE>
negotiate in good faith to modify this Agreement so as to effect the original
intent of the Parties as closely as possible in an acceptable manner to the end
that Transactions contemplated hereby are fulfilled to the extent possible.
SECTION 8.11. Counterparts; Facsimile Execution. This Agreement may be
executed in one or more counterparts, all of which shall be considered one and
the same agreement and shall become effective when one or more counterparts have
been signed by each of the Parties and delivered to the other Parties. Facsimile
execution and delivery of this Agreement is legal, valid and binding for all
purposes.
SECTION 8.12. Entire Agreement; Third Party Beneficiaries. This Agreement,
taken together with Peakway Disclosure Letter and the Pubco Disclosure Letter,
(a) constitute the entire agreement, and supersede all prior agreements and
understandings, both written and oral, among the Parties with respect to the
Transactions and (b) are not intended to confer upon any person other than the
Parties any rights or remedies.
SECTION 8.13. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof. Each of the parties hereto agrees (a) that this Agreement involves
at least $100,000.00, and (b) that this Agreement has been entered into by the
parties hereto in express reliance upon 6 Del. C. ss. 2708. Each of the parties
hereto hereby irrevocably and unconditionally agrees (i) that it is and shall
continue to be subject to the jurisdiction of the courts of the State of
Delaware and of the federal courts sitting in the State of Delaware, and (ii)(A)
to the extent that such party is not otherwise subject to service of process in
the State of Delaware, to appoint and maintain an agent in the State of Delaware
as such party's agent for acceptance of legal process and notify the other
parties hereto of the name and address of such agent, and (B) to the fullest
extent permitted by law, that service of process may also be made on such party
by prepaid certified mail with a proof of mailing receipt validated by the U.S.
Postal Service constituting evidence of valid service, and that, to the fullest
extent permitted by applicable law, service made pursuant to (ii)(A) or (B)
above shall have the same legal force and effect as if served upon such party
personally within the State of Delaware.
SECTION 8.14. Assignment. To the fullest extent permitted by law, neither
this Agreement nor any of the rights, interests or obligations under this
Agreement shall be assigned, in whole or in part, by operation of law or
otherwise by any of the Parties without the prior written consent of the other
Parties. Any purported assignment without such consent shall be void. Subject to
the preceding sentences, this Agreement will be binding upon, inure to the
benefit of, and be enforceable by, the Parties and their respective successors
and assigns.
[Signature Page Follows]
25
<PAGE>
The Parties hereto have executed and delivered this Share Exchange
Agreement as of the date first above written.
The Pubco:
WOLLEMI MINING CORP.
By: /s/ Chen Yi
----------------------------------
Name: Chen Yi
Title: President
Peakway:
PEAKWAY WORLDWIDE LIMITED
By: /s/ Haiting Li
----------------------------------
Name: Haiting Li
Title: Director
The Stockholder:
CABO DEVELOPMENT LIMITED
By: /s/ Haiting Li
----------------------------------
Name: Haiting Li
Title: Director
26
<PAGE>
EXHIBIT A
Number of Percentage of Total Number of Shares of
Shares of Company Shares Pubco Stock to be
Peakway Stock Represented By Shares Received by
Name and Address of Stockholder Being Exchanged Being Exchanged Stockholder
------------------------------- --------------- --------------- -----------
Cabo Development Limited 1,000 70% 10,500,000
<PAGE>
WAIVER
November 5, 2009
This waiver dated November 5, 2009 (the "WAIVER") is made pursuant to Section
6.02 of the Share Exchange Agreement ("Share Exchange Agreement") dated November
5, 2009 by and among Wollemi Mining Corp., a Delaware corporation (the "PUBCO"),
Peakway Worldwide Limited, a British Virgin Islands company ("PEAKWAY"), and
Cabo Development Limited, a British Virgin Islands company (the "STOCKHOLDER").
Capitalized terms not otherwise defined herein shall have the meaning set forth
in the Share Exchange Agreement.
Pursuant to Section 3.14 of the Share Exchange Agreement, Prior to the Closing
Peakway will deliver to the Pubco its audited consolidated financial statements
for the quarter ended June 30, 2009 and for the fiscal years ended December 31,
2008, and 2007 (collectively, the "PEAKWAY FINANCIAL STATEMENTS").
The Pubco hereby waives the requirement of the audited consolidated financial
statements for the quarter ended June 30, 2009 and December 31, 2008 as provided
in Section 3.14 of the Share Exchange Agreement, and acknowledges and agrees
that Peakway shall provide the reviewed consolidated financial statements for
the quarter ended June 30, 2009 and December 31, 2008, and the audited
consolidated financial statements for the fiscal years ended December 31, 2008
and 2007.
This Waiver may be executed and delivered in one or more counterparts, each of
which shall be deemed as original, but all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the Pubco has executed this Waiver of the date first written
above.
The Pubco:
WOLLEMI MINING CORP.
By: /s/ Chen Yi
----------------------------------
Name: Chen Yi
Title: President
<PAGE>
BEIJING YINGDAO LAW FIRM
C-2 Floor, Kaixuan Building, No. 143 TELEPHONE: 66515676
Xizhimen Wai Street, Beijing 100044 FAX: 66512605
People's Republic of China E-MAIL: gaodengli@tom.com
To:
Wollemi Mining Corp.
Room 42, 4th Floor, New Henry House
10 Ice Street, Central, Hong Kong
Re: Fujian Jingjiang Pacific Shoes Co., Limited, and
Fujian Baopiao Light Industry Co., Limited.
November 6, 2009
Ladies and Gentlemen:
We have acted as the qualified lawyers of the People's Republic of China ("PRC")
for the companies as captioned above (the "Companies").
We have made no investigation of and express no opinion in relation to the laws
of any jurisdiction other than the PRC. This opinion is to be governed by and
construed in accordance with the laws of the PRC and is limited to and is given
on the basis of the current law and practice in the PRC.
This opinion is delivered to you pursuant to Section6.01(j) of that certain
Share Exchange Agreement dated November 5, 2009 by and among Wollemi Mining
Corp., a Delaware corporation ( "Wollemi"), Peakway Worldwide Limited, a British
Virgin Islands company ("Peakway") and Cabo Development Limited ("Cabo"), a
British Virgin Islands company, as the sole shareholder of Peakway ("Share
Exchange Agreement"), in connection with the legality of certain transactions
involving or related to the Companies and the share exchange.
1 Certain transactions
Based on the documents examined by us, we understand the facts of certain
transactions relating to the subject matter of this opinion to be as
follows:
The Companies comprise the following PRC limited liability companies:
Fujian Jingjiang Pacific Shoes Co., Limited ("Pacific"), and Fujian Baopiao
Light Industry Co., Limited ("Baopiao").
We are informed and assume, but as PRC counsel express no opinion
confirming, that Peakway is a company formed under the laws of the British
Virgin Islands, and the original and current record owner of 100% of the
share of which is Cabo.
Peakway acquired 100% equity interests in each of the Companies in 2009
from Jinjiang Baopiao Footwear and Apparel Co., Ltd., Hong Kong Tianxinhang
Co., Ltd. and Italy Baopiao (Hong Kong) Apparel Development Co., Ltd.
<PAGE>
2 Assumptions
In giving this opinion, we have assumed that:
2.1 the genuineness of all signatures on all documents; and
2.2 the conformity to original documents of all documents submitted to us as
copies and the authenticity and completeness of those original documents.
3 Opinions
On the basis of the foregoing, we are of the opinion that:
3.1 With respect to Pacific and Baopiao:
(i) Pacific has been duly organized and is validly existing as a wholly
foreign owned company with limited liability under the PRC Laws and is
in good standing under the PRC Laws; 100% of the equity interests of
Pacific are owned by Alberta Holdings Limited, a Hong Kong company
("Albert"), which is in turn 100% controlled by Peakway. The
registered capital of Pacific is RMB 5,000,000, which has been fully
contributed.
(ii) The equity interests of Pacific are free and clear of all liens,
encumbrances, equities or claims; the articles of association, the
business license and other constituent documents of Pacific comply
with the requirements of PRC Laws and are in full force and effect.
(iii)Pacific has complied in all respects with all national, provincial or
local laws, statutes, ordinances, rules, regulations and orders of the
PRC applicable to it or its business or operations or the ownership or
use of any of the its assets, and has obtained and complied in all
respects with all national, provincial and local licenses,
authorizations, approvals, consents, registrations and permits from
PRC governmental agencies necessary for the conduct of its business as
it has been conducting since its inception and/or as currently
conducted or the ownership or use of any of its assets.
(iv) Baopiao has been duly organized and is validly existing as a wholly
foreign owned company with limited liability under the PRC Laws and is
in good standing under the PRC Laws; 100% of the equity interests of
Baopiao are owned by Alberta, which is in turn 100% controlled by
Peakway. The registered capital of Baopiao is 50,000,000HKD. The
contributed capital of Baopiao is 16,370,477.66HKD, which accounts for
32.74% of the registered capital.
(v) The equity interests of Baopiao are free and clear of all liens,
encumbrances, equities or claims; the articles of association, the
business license and other constituent documents of Baopiao comply
with the requirements of PRC Laws and are in full force and effect.
(vi) Baopiao has complied in all respects with all national, provincial or
local laws, statutes, ordinances, rules, regulations and orders of the
PRC applicable to it or its business or operations or the ownership or
use of any of the its assets, and has obtained and complied in all
respects with all national, provincial and local licenses,
authorizations, approvals, consents, registrations and permits from
PRC governmental agencies necessary for the conduct of its business as
it has been conducting since its inception and/or as currently
conducted or the ownership or use of any of its assets.
3.2 With respect to the equity transfer regarding the acquisition of the
Companies made by Alberta:
<PAGE>
(i) Alberta acquired 28% and 72% interest in Pacific from Jinjiang Baopiao
Footwear and Apparel Co., Ltd. and Hong Kong Tianxinhang Co., Ltd.,
respectively, pursuant to equity transfer agreement dated January 12,
2009, of which an approval from the competent local delegate agency of
the PRC Ministry of Commerce was obtained on February 25, 2009,
evidenced by (i) a certificate of foreign investment approval dated
March 16, 2009, and (ii) an amended business license dated March 27,
2009, both in proper form and content, true and accurate.
(ii) Alberta acquired 100% interest in Baopiao from Italy Baopiao (Hong
Kong) Apparel Development Co., Ltd, pursuant to equity transfer
agreement dated February 26, 2009, of which an approval from the
competent local delegate agency of the PRC Ministry of Commerce was
obtained on March 2, 2009, evidenced by (i) a certificate of foreign
investment approval dated April 24, 2009, and (ii) an amended business
license dated March 24, 2009, both in proper form and content, true
and accurate.
(iii)The acquisition by Alberta of the foregoing equity interests in the
Companies did not conflict with any applicable laws, rules,
regulations, ordinances, codes or other obligations of any
governmental body in the PRC(pound)<172>and all necessary approvals,
consents, licenses and permits in connection with these acquisitions
were obtained.
(iv) The consideration for Alberta's acquisition of the equity in the
Companies has been fully paid to and received by the transferring
equity holders of the Companies. No equity interest in the Companies
acquired by Alberta from the transferring equity holders is subject to
any right of rescission, revocation, cancellation or forfeiture or any
lien or encumbrance by any party under the laws of the PRC.
(v) The acquisitions by Alberta of the equity interests in the Companies
were duly authorized by all necessary actions on the part of the
Companies and their equity holders.
(vi) Alberta is now the beneficial owner of the following equity
percentages in the Companies: (a) Pacific-100%; (b) Baopiao- 100%
(vii)The Foreign Exchange Registration of each of the Companies has been
duly filed with SAFE to indicate the percentage ownership in those
Companies by Alberta.
(viii) The transactions contemplated by the equity transfer is not violate
the Regulations on Mergers and Acquisitions of Domestic Enterprises by
Foreign Investors (the "M&A Rules"), which became effective on
September 8, 2006 and were jointly promulgated by six PRC regulatory
agencies on August 8, 2006, including the Ministry of Commerce, the
State Assets Supervision and Administration Commission, the State
Administration for Taxation, the State Administration for Industry and
Commerce, the China Securities Regulatory Commission ("CSRC") and the
State Administration of Foreign Exchange.
(ix) Since CSRC has not promulgated any guidance on the applications and
acceptance procedure for those matters which do not fall within the
applicable scope of the M&A Rules and Related Clarifications, the M&A
Rules and Related Clarifications do not require Albert to obtain the
approval of the CSRC in connection with the acquisitions by Alberta of
the equity interests in the Companies.
(x) Mr. Li Haiting is the sole shareholder of Cabo Development Limited, a
British Virgin Islands company, which owns 100% equity interest in
Peakway. Mr. Li being the beneficial shareholder of Peakway and the
domestic resident of the PRC, has applied for the foreign exchange
registration of overseas in vestments at the local branch of the Sate
Administration of Foreign Exchange of the PRC ("SAFE") in accordance
with the Notice on Issuers Relating to the Administration of Foreign
Exchange in Fund-raising and Return Investment Activities of Domestic
<PAGE>
Residents Conducted via Offshore Special Purpose Vehicle issued by
SAFE ("SAFE Circular 75"). There is not any obstacle to obtain such
registration and nor to satisfy the SAFE Circular 75.
3.3 With respect to the Share Exchange Agreement and the transactions
contemplated thereby:
(i) It is not necessary or advisable under the laws of the PRC for the
execution, delivery, validity or the performance or the enforceability
of the Share Exchange Agreement to obtain the consent of any judicial,
administrative or governmental or other similar authority or body in
the PRC.
(ii) No stamp, registration or similar taxes, duties or charges are payable
in the PRC in connection with the execution and delivery of the Share
Exchange Agreement, to the extent it does not violate PRC public
policy and, on the face of the Share Exchange Agreement, we have no
reason to believe that any of the provisions in the Share Exchange
Agreement are likely to be inconsistent with any public policy of the
PRC.
(iii)No approvals of any judicial, administrative or governmental or other
similar authority or body in the PRC or, to our knowledge, any other
third party is required in respect of the Share Exchange.
(iv) The transactions contemplated by the Share Exchange Agreement do not
violate the laws of the PRC.
3.4 To our knowledge, there are no arbitrations, actions, suits or proceedings
pending or threatened against the Companies by any person or entity or
before any PRC court, governmental authority, tribunal or instrumentality
that seek to enjoin or limit the consummation of the transactions
contemplated by the Share Exchange Agreement, or which likely have, either
singly or in the aggregate, have a material adverse effect on the business,
assets, liabilities, financial condition or prospects of the Companies.
This opinion is addressed solely to Wollemi Mining Corp.
Yours faithfully
/s/ Gao Deng Li
-----------------------------
Beijing Yingdao Law Firm
Lawyer: Gao Deng Li
