White Energy Company Limited Level 11, 213 Miller Street
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White
Energy Company Limited
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Level
11, 000 Xxxxxx Xxxxxx
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North
Sydney NSW 2060
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ABN
62 071 527 083
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PO
Box 422
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North
Sydney NSW 2059
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Telephone
x00 0 0000 0000
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Facsimile:
+ 61 2 9959 0099
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xxx.xxxxxxxxxxxxx.xxx
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6 July
2009
The
Directors
P.O. Box
309GT, Xxxxxx House
South
Church Street
Xxxxxx
Town, Grand Cayman
Cayman
Islands
Dear
Sirs,
AMENDMENTS
TO THE SHARE EXCHANGE AGREEMENT DATED 12 MARCH 2009 (“SEA”)
We refer
to our discussions over the last few days regarding amending the Share Exchange
Agreement dated 16 March 2009 (SEA) between White Energy Company Limited (“WEC”)
and Asia Special Situation Acquisition Corp (“ASSAC”).
We
confirm that we have agreed to amend the principal terms of the SEA as
follows:
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1.
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ASSAC
will acquire 100% of all of the issued and outstanding WEC common shares
as at the date of settlement through a merger or related scheme of
arrangement (the “Transaction”). Each of the issued and
outstanding WEC shares shall be valued at a price of US$2.50 per WEC
share, and the product of multiplying the issued and outstanding WEC
common shares as at the settlement date by US$2.50 shall be the White
Energy Market Value - as defined in the
SEA.
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2.
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It
is a condition precedent that at settlement, ASSAC shall have minimum
Adjusted Funds (as defined in the SEA) of US$100 million and maximum
Adjusted Funds of US$140 million.
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3.
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WEC
shareholders will be issued shares in ASSAC such that following settlement
of the Transaction, WEC shareholders shall hold a Percentage Interest in
ASSAC equal to the White Energy Market Value divided by White Energy
Market Value + Adjusted Funds (as defined in the SEA). For the avoidance
of doubt we have attached a table illustrating the anticipated relevant
equity interests for both WEC and ASSAC shareholders on settlement of the
Transaction.
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4.
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It
is a requirement of the Transaction that immediately post settlement ASSAC
shall be dual listed on the main board of the NYSE and on the
ASX.
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5.
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Prior
to settlement of the Transaction, WEC shall be entitled to issue ordinary
shares in WEC without ASSAC’s consent subject to any such issues being on
commercial terms (for the avoidance of doubt this shall include WEC’s
recent placement of 36.667 million shares and any shares issued under the
related Share Purchase Plan).
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6.
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On
settlement of the Transaction, WEC will control both the management and
board of directors of ASSAC and all current ASSAC directors will resign
from the Board.
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7.
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On
settlement of the Transaction, ASSAC shall change its name to “White
Energy Company Inc” or a similar name determined by WEC, if for legal or
other reasons “White Energy Company Inc” is not
available.
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8.
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As
part of the amended terms of the Transaction, no Performance Shares (as
defined in the SEA) will be issued to management. However, post
settlement of the Transaction, the ASSAC board of directors will establish
a director, management and staff option plan if they so determine and on
terms they regard as appropriate.
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9.
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The
economic benefit attributable to all current WEC option holders pre
settlement of the Transaction shall be preserved post settlement of the
Transaction (on a basis to be determined – this will most likely be
achieved by rolling the current WEC options in ASSAC options on
economically similar terms).
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10.
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It
is a requirement of the Transaction that the 5,725,000 insider warrants
will be re-purchased by ASSAC immediately after settlement of the
Transaction on terms satisfactory to WEC. For the avoidance of
doubt, the terms on which the insider warrants will be re-purchased must
be agreed between ASSAC and the warrant holders prior to the WEC scheme
meeting occurring.
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11.
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It
is a condition precedent of the Transaction that the total fees to be paid
by ASSAC in relation to the Transaction, shall be capped at US$15 million.
In this regard, ASSAC must renegotiate some of their existing fee
arrangements to comply with this condition prior to the Transaction being
put to WEC shareholders for determination. Specifically, any payable or
fee to be paid to the Maxim Group will need to be substantially reduced
and the fees paid to Canaccord Xxxxx and Xxxx Capital (in aggregate) shall
be limited to the following:
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a.
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a
6% financing fee on new funds raised in ASSAC (ie. US$6 million assuming
US$100 million in funds are
raised);
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b.
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a
success fee on successful settlement of the Transaction fixed at US$3
million; and
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c.
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A
total of 1.15 million warrants issued to Canaccord Xxxxx and Xxxx Captal
on the successful settlement of the Transaction which shall be exercisable
by the payment of cash equal to a strike price of US$11 per
share.
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12.
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From
the WEC perspective, the Transaction will be consummated through a Scheme
of Arrangement (in accordance with the Corporations Act 2001) and ASSAC
will need to obtain its shareholder approval to the Transaction as
envisaged under the SEA.
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13.
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It
is agreed that WEC’s convertible note liability (pursuant to the 10
October 2007 Convertible Note Deed Poll) shall be rolled into ASSAC on an
economically equivalent basis on settlement of the
Transaction. The noteholders shall, therefore, have the right
to convert their notes into ASSAC shares on an economically equivalent
basis.
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14.
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Under
the terms of the Joint Development Agreement signed on 14 May 2009 (JDA),
WEC and Peabody Energy Inc (Peabody) have agreed that Peabody shall have
the right to purchase a 14.9% equity interest in WEC if and when WEC and
Peabody sign definitive agreements as outlined in the JDA. WEC
and ASSAC agree that Xxxxxxx’x right to purchase a 14.9% equity interest
in WEC as outlined in the JDA shall be transferred into a right to buy an
equivalent interest in ASSAC post settlement of the Transaction on the
same basis.
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15.
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All
ASSAC shares issued to WEC shareholders shall be registered such that they
are readily tradeable on the NYSE and the
ASX.
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16.
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Other
terms of the SEA shall be amended as reasonably required in order to give
effect to the scheme of arrangement and the Transaction outlined
herein.
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17.
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Pending
the execution of definitive and legally binding documents between WEC and
ASSAC setting forth the scheme of arrangement and other terms of the
Transactions, all of the terms and conditions of the SEA shall continue to
remain in full force and effect and each of WEC and ASSAC reserve all of
their respective legal rights and remedies
thereunder.
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Please
indicate your confirmation that the contents of this letter accurately reflect
our discussions and our resultant agreement on the terms upon which the SEA
should be amended, by signing where indicated below. In so doing, it is agreed
that we will immediately inform our respective shareholders of the amendments to
the Transaction and instruct our respective lawyers to immediately amend the SEA
(and to draft any related documents to give effect to the above)
accordingly.
Yours
faithfully,
WHITE
ENERGY COMPANY LIMITED
By: /s/ Xxxx
XxXxxxxx
Xxxx
XxXxxxxx, Chairman
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Accepted
and agreed this 6th day of
July 2009
By: /s/ Xxxx
X.
Xxxxx
Xx.
Xxxx X. Xxxxx, President
