Attached files
February
5, 2010
Top
Favour Limited
P.O. Box
957
Offshore
Incorporations Centre
Road
Town, Tortola
British
Virgin Islands
Re: Share Exchange - Top Favour
Limited and Ableauctions.com, Inc.
Dear
Sir/Madam:
We are a
firm of lawyers qualified to practice and practicing in the People’s Republic of
China (the “PRC”). We
have acted as Chinese Legal Counsel to Top Favour Limited, a company
incorporated under the laws of British Virgin Islands (“Top Favour”) and its
affiliates, Pingdingshan Hongyuan Energy Science and Technology Development Co.,
Ltd., a wholly foreign owned enterprise incorporated under the laws of PRC
(“Hongyuan”);
Henan Province Pingdingshan Hongli Coal & Coke Co., Ltd., a company
incorporated under the laws of PRC (“Hongli”); Hongli’s
branch doing business as Henan Province Pingdingshan Hongli Coal & Coke Co.,
Ltd. Baofeng Coking Factory (“Baofeng Coking”);
Baofeng Hongchang Coal Co., Ltd., a company incorporated under the laws of PRC
(“Hongchang
Coal”); and Baofeng Hongguang Environment Protection Electricity
Generating Co., Ltd., a company incorporated under the laws of PRC (“Hongguang Power”)
(Baofeng Coking, Hongchang Coal and Hongguang are collectively referred to as
the “Hongli
Companies”). We have been requested by Top Favour to render an
opinion with respect to the share exchange by and among Top Favour, the
shareholders of Top Favour (“Top Favour
Shareholders”), Ableauctions.com, Inc., a Florida corporation (“AAC”), and certain
principal shareholders of AAC, under a certain share exchange agreement dated
July 17, 2009, as amended (“Exchange
Agreement”).
For the
purpose of giving this opinion, we have examined the following documents (the
“Documents”):
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(a)
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the
Exchange Agreement, as amended;
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(b)
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Instruments
of transfer executed by the holders of capital stock of Top Favour,
assigning the capital stock of Top Favour to
AAC;
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(c)
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Copies
of the Articles of Association of the Top Favour, Hongyuan, Hongli,
Hongchang Coal, and Honguang Power;
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(d)
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Consulting
Services Agreement between the Hongyuan and Hongli dated March 18, 2009
(“Consulting
Agreement”);
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(e)
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Equity
Pledge Agreement by and among the Hongyuan as pledgee, and Hongli, Baofeng
Coking, Hongguang Power and Hongchang Coal as pledgees, dated March 18,
2009 (“Equity
Pledge Agreement”);
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(f)
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Operating
Agreement by and among the Hongyuan, Hongli, Baofeng Coking, Hongguang
Power and Hongchang Coal, and certain shareholders of these entities dated
March 18, 2009 (“Operating
Agreement”);
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(g)
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Option
Agreement between the Hongyuan (as option holder), and Hongli, Baofeng
Coking, Hongchang Coal and Hongguang Power, and certain shareholders of
these entities dated March 18, 2009 (“Option
Agreement”); and
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(h)
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Voting
Rights Proxy Agreement between the Hongyuan, Hongli and its shareholders,
Baofeng Coking, Hongchang Coal and Hongguang Power dated March 18, 2009
(“Proxy
Agreement”).
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In
addition, we have reviewed such other Documents and made such enquiries as to
questions of law as we have deemed necessary in order to render the opinion set
forth below.
A company
search conducted in the Companies Registry of PRC is limited with respect to the
information it produces. Further, a company search does not determine
conclusively whether or not an order has been made or a resolution has been
passed for the winding up of a company or for the appointment of a liquidator or
other person to control the assets of a company, as notice of such matters might
not be filed immediately and, once filed, might not appear immediately on a
company’s public file. Moreover, a company search carried out in PRC is unlikely
to reveal any information as to any such procedure initiated by the Company in
any other jurisdiction.
For the
purpose of this opinion we have assumed:
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(a)
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the
genuineness of all signatures and seals, the conformity to originals of
all documents
purporting to be copies of originals and the authenticity of the originals
of such documents;
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(b)
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all
the obligations under the Documents of each party to it other than Top
Favour, Hongli and the Hongli Companies are legal, valid and binding on
that party in accordance with its
terms;
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(c)
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the
due compliance with all matters (including, without limitation, the
obtaining of necessary consents, licenses and approvals, and the making of
necessary fillings and registrations) required under any laws other than
the laws of PRC and compliance with the provisions of such laws as are
applicable to the Documents and the parties thereto and the legality,
validity and enforceability of the Documents under such
laws;
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(d)
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that
such of the documents as contain resolutions of directors and members,
respectively, or extracts of minutes of meetings of the directors and
meetings of the members, respectively accurately and genuinely represent
proceedings of meetings of the directors and of meetings of members,
respectively, of which adequate notice was either given or waived, and any
necessary quorum present
throughout;
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(e)
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the
accuracy and completeness of all factual representations (if any) made in
the Documents;
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(f)
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that
insofar as any obligation under the Documents is to be performed in any
jurisdiction outside PRC its performance will not be illegal or
unenforceable by virtue of the law of that
jurisdiction;
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(g)
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that
the information disclosed by the company searches referred to above is
accurate and complete as at the time of this opinion and conforms to
records maintained by the Company and that, in the case of the company
search, the search did not fail to disclose any information which had been
filed with or delivered to the Companies Registry but had not been
processed at the time when the search was conducted;
and
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(h)
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that
there has been no change in the information contained in the latest
records under Company Registry of the Company made up to the issuance of
this opinion.
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We have
made no investigation regarding, and express no opinion in relation to, the laws
of any country or territory other than PRC. This opinion is limited to and is
given on the basis of the current law and practice in the PRC and is to be
construed in accordance with, and is governed by, the laws of PRC.
Based
upon and subject to the foregoing and further subject to the qualifications set
forth below, we are of the opinion that as at the date hereof:
1. Top
Favour Limited (“Top
Favour”) is an international business company that exists in good
standing under the laws of the British Virgin Islands, and Jianhua Lv is the
sole director of Top Favour.
2. Top
Favour has a total of ten thousand (10,000) ordinary shares of capital stock
authorized, issued and outstanding, it has no other securities issued and
outstanding, and it has issued no rights, nor does it have any obligations or
agreements to issue, any shares of its capital stock or securities to any
person.
3. Pingdingshan
Hongyuan Energy Science and Technology Development Co., Ltd. (“Hongyuan”) is a
corporation existing in good standing under the laws of the PRC, under
registration number 410400400014160, and its registered address is at: West
Renmin Road, Chengguan Town, Baofeng Town, Pingdingshan City, Henan Province,
China. The registered capital of Hongyuan has been fully
paid.
4. Henan
Province Pingdingshan Hongli Coal & Coke Co., Ltd. (“Hongli”) is a
corporation existing in good standing under the laws of PRC, under registration
number 410400100002773, and its registered address is at: the intersection
between Kuanggong Road and Tiyu Road (10th
floor, Chengshi Xin Yong She, Tiyu Road), Xinhua District, Pingdingshan City,
China). The registered capital of Hongli has been fully
paid.
5. Baofeng
Hongchang Coal Co., Ltd. (“Hongchang Coal”) is a
corporation existing in good standing under the laws of PRC, under registration
number 410421100002678, and its registered address at: Zhaozhuang Village,
Daying Town, Baofeng County, China. The registered capital of Hongchang Coal has
been fully paid.
6. Baofeng
Hongguang Environment Protection Electricity Generating Co., Ltd. (“Hongguang Power”) is
a corporation exiting in good standing under the laws of PRC, under registration
number of 4104212000252 and its registered address at:
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Hanzhuang
Village, Daying Town, Baofeng County, Pingdingshan, Henan Province,
China. The registered capital of Hongguang Power has been fully
paid.
7.
Top Favour owns 100% of the equity of Hongli, and Hongli is a wholly foreign
owned enterprise.
8.
Hongli owns 100% of the equity of Hongchang Coal.
9.
Hongli owns 100% of the equity of Honguang Power.
10. Baofeng
Coking is a branch operation of Hongli.
11. The
Consulting Services Agreement, Operating Agreement, Equity Pledge Agreement,
Option Agreement and Proxy Agreement (collectively, the “Control Agreements”),
to which Hongyuan, Hongli, the Hongli Companies, and certain shareholders of the
foregoing are parties, are each legally valid and binding obligations of the
respective parties.
12.
The Control Agreements do not violate the law, regulations or policies of the
PRC central government, or the PRC provincial laws, regulations or policies that
apply to Hongyuan, Hongli or the Hongli Companies.
13. To
our knowledge, Hongli and the Hongli Companies have all business licenses issued
by PRC government authorities that are necessary to conduct business as
presently conducted.
14. Hongli
and the Hongli Companies each have the requisite corporate power to own, lease
and operate its properties and to conduct its business.
15. No
authorization, approval, consent, filing or other order of any PRC governmental
body, regulatory agency, self-regulatory organization or stock exchange or
market, court or, any third party, is required to be obtained by Hongyuan,
Hongli or the Hongli Companies in order to consummate the transactions under the
Exchange Agreement, or for the exercise of any rights and remedies under the
Exchange Agreement.
16. On
the closing date of the Exchange Agreement, the Top Favour Shareholders
effectively transferred 10,000 ordinary shares representing 100% of the issued
and outstanding capital stock of Top Favour, to AAC, and as a result immediately
thereafter AAC owns 100% of Top Favour.
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17. The
execution, delivery and performance of the Exchange Agreement by Top Favour and
the Top Favour Shareholders, and the consummation of the transactions
contemplated thereby (a) do not and will not result in a violation of, or
constitute a default under (i) each of the organization or governing documents
of Hongyuan, Hongli, Hongchang Coal or Hongguang Power (ii) any other agreement,
note, lease, mortgage, deed or other instrument to which any of Hongyuan, Hongli
or the Hongli Companies are a party or by which any of such companies are bound
or affected or (iii) any applicable law, rule or regulation of the PRC, and (b)
do not and will not result in or require the creation of any lien, security
interest or other charge or encumbrance upon or with respect to the respective
properties under the organization or governing documents of Hongyuan, Hongli or
the Hongli Companies.
18. The
Exchange Agreement constitutes a binding obligation of each of the Top Favour
Shareholders, and the rights and obligations of Top Favour Shareholders
thereunder are enforceable and valid under the laws of China.
The
opinions expressed above are based on documents furnished by Hongli and the
Hongli Companies, and our interpretation of applicable Chinese laws and
regulations which in our experience are applicable. We note, however, that the
laws and the regulations in China have been subject to substantial and frequent
revision in recent years. We cannot assure that any future
interpretations of Chinese laws and regulations by relevant authorities,
administrative pronouncements, or court decisions, or future positions taken by
these authorities would not adversely impact or affect the opinions set forth in
this letter. This opinion letter has been prepared solely for your use of
reference and may not be quoted in whole or in part or otherwise referred to in
any documents, or disclosed to any third party, or filed with or furnished to
any governmental agency, or other party without the express prior written
consent of this firm.
Sincerely
yours,
AllBright
Law Offices
/s/ Steve
Zhu
Attorney
at Law/Senior Partner
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