Exhibit 10.1

SHARE EXCHANGE AGREEMENT

THIS AGREEMENT dated August 27, 2003, is between Asian Alliance Ventures Inc.
(hereinafter referred to as "AAVI") and the shareholders of WelWay Development
Limited (hereinafter referred to collectively as "the Shareholders" or singly as
"Shareholder"), who represent 100% of the issued and outstanding shares of
WelWay Development Limited, a corporation incorporated under the laws of the
Hong Kong SAR, China (hereinafter referred to as "WelWay"). All the shareholders
of WelWay and the number of shares each owns in WelWay are listed in Schedule A
of this agreement.

THIS AGREEMENT sets forth the terms and conditions upon which the Shareholders
are today selling to AAVI, and AAVI is today purchasing from the Shareholders a
total of 100,000 shares of WelWay, representing 100% of the issued and
outstanding shares of capital stock of WelWay.

IN CONSIDERATION OF THE MUTUAL AGREEMENT CONTAINED HEREIN, THE PARTIES HEREBY
AGREE AS FOLLOWS:

ISSUE OF SHARES

1.01   Shares being Sold
Subject to the terms and conditions of this Agreement, the Shareholders are
selling, assigning, and delivering the WelWay Shares to AAVI at the closing
provided for in Section 1.03 hereof (the "Closing"), free and clear of all
liens, charges, or encumbrances of whatsoever nature.

1.02   Consideration
At the Closing, AAVI is delivering to the Shareholders 6,500,000 (six million
five hundred thousand) common shares of AAVI ("AAVI shares") which will be
deposited with Weir & Associates, 5/F Landmark East, 12 Ice House Street,
Central, Hong Kong as escrow agent, ("Escrow Agent").

1.03   Closing

The Closing of the transactions provided for in this Agreement will taking place
upon satisfaction of terms set forth in Section 1.04.

1.04   Escrow
AAVI will deliver to the "Escrow Agent" a total of 6,500,000 (six million five
hundred thousand) common shares of AAVI, divided into share certificates as
directed by the Shareholders. The Shareholders will deliver to Escrow Agent duly
endorsed stock certificates representing 100,000 shares of common stock of
WelWay (the "WelWay Shares"). Upon receipt of the aforementioned from both
parties, the Escrow Agent will deliver the WelWay Shares to AAVI and
concurrently therewith, the Escrow Agent will deliver to the Shareholders the
AAVI common shares.

1.05   Shares issued for Performance
At the Closing, AAVI is also delivering to the Shareholders 4,000,000 (four
million) common shares of AAVI ("Performance Shares"), divided into share
certificates as directed by the Shareholders. These certificates will also be
deposited with Weir & Associates, 5/F Landmark East, 12 Ice House Street,
Central, Hong Kong as escrow agent, ("Escrow Agent").

1.06   Release of Escrow Shares
Upon the achievement of each of the five milestones as specified in Schedule B
of this agreement, and as confirmed in writing by a resolution passed by the
AAVI Board of Directors, the Escrow Agent will release one-fifth of the
Performance Shares to the Shareholders.

 

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1.07   Cancellation of Performance Shares
At the end of a period of five years from the date of this agreement the
Performance Shares still remaining with the Escrow Agent will be returned to
AAVI for cancellation and the Shareholders will have no right to receive any
further Performance shares.

1.08   Conditions and Restrictions Apply to All AAVI Shares

All shares of common stock issued by AAVI to the Shareholders pursuant to this
agreement will be subject to all relevant restrictions and conditions imposed by
all applicable federal and/or state securities acts or any foreign laws, whether
they are issued as consideration for the WelWay shares or as Performance shares.

RELATED TRANSACTIONS

2.01   Finder
There are no finders with respect to the transaction contemplated herein.

REPRESENTATIONS AND WARRANTIES BY THE SHAREHOLDERS.

The Shareholders hereby jointly and severally represent and warrant as follows:

3.01   Organization, Capitalization, etc.

WelWay is a corporation duly organized, validly existing, and in good standing
under the laws of the Hong Kong SAR, China and is qualified no where else. The
authorized capital stock of WelWay consists of 100,000 shares, par value HK$1.00
per share, 100,000 of which are validly issued and outstanding, fully paid and
nonassessable. All of the shares owned by the Shareholders are owned free and
clear of any liens, claims, options, charges, or encumbrances of whatsoever
nature. The Shareholders have the unqualified right to sell, assign, and deliver
the WelWay Shares, and, upon consummation of the transactions contemplated by
this Agreement, AAVI will acquire good and valid title to the WelWay Shares,
free and clear of all liens, claims, options, charges, and encumbrances of
whatsoever nature. The Shareholders acknowledge that the AAVI common shares
being acquired from AAVI are restricted securities as that term is defined in
Rule 144 of the Securities Act of 1933, as amended (the "Act"). There are no
outstanding options or other agreements of any nature whatsoever relating to the
issuance by WelWay of any shares of its capital stock. WelWay has the corporate
power and authority to carry on its business as presently conducted.

3.02   No Violation
Neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will constitute a violation or default under
any term or provision of the Certificate of Incorporation or Articles of the
Company, or of any contract, commitment, indenture, other agreement or
restriction of any kind or character to which WelWay or any of the Shareholders
is a party or by which WelWay or any of the Shareholders is bound.

3.03   Tax Returns
WelWay has duly filed all tax reports and returns required to be filed by it and
has fully paid all taxes and other charges claimed to be due from taxing
authorities; there are no liens upon any of WelWay's property or assets; there
are not now any pending questions relating to, or claims asserted for, taxes or
assessments asserted against WelWay.

 

 

 

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3.04   Title to Properties; Encumbrances
WelWay has good and marketable title to all of its properties and assets, real
and personal, tangible and intangible, and all such properties and assets are
subject to no mortgage, pledge, lien, conditional sale agreement, encumbrance,
or charge of whatsoever nature. There are currently no properties owned by
WelWay.

3.05   Accounts Receivable
There are currently no accounts receivable of WelWay.

3.06   Undisclosed Liabilities

Except to the extent disclosed by WelWay, WelWay as of the date hereof has no
liabilities or obligations of any nature, whether absolute, accrued, contingent,
or otherwise and whether due or to become due. Further, the Shareholders do not
know or have any reasonable ground to know of any basis for the assertion
against WelWay of any liability or obligation as of the date hereof, of any
nature or in any amount not previously and fully disclosed. WelWay had no
accounts payable at the date hereof.

3.07   Absence of Certain Changes

WelWay has not since inception:

a)   Suffered any material adverse change in financial condition, assets,
liabilities, business, or prospects;

b)   Incurred any obligation or liability (whether absolute, accrued,
contingent, or otherwise) other than in the ordinary course of business and
consistent with past practice;

c)   Paid any claim or discharged or satisfied any lien or encumbrance or paid
or satisfied any liability (whether absolute, accrued, contingent, or otherwise)
in the ordinary course of business and consistent with past practices;

d)   Permitted or allowed any of its assets, tangible or intangible, to be
mortgaged, pledged, or subjected to any liens or encumbrances;

e)   Written down the value of any inventory or written-off as un-collectible
any notes or accounts receivable or any portion thereof;

f)   Cancelled any other debts or claims or waived any rights of substantial
value, or sold or transferred any of its assets or properties, tangible or
intangible, other than sales of inventory or merchandise made in the ordinary
course of business and consistent with past practice;

g)   Made any capital expenditures or commitments for additions to property,
plant or equipment

h)   Declared, paid, or set aside for payment to its stockholders any dividend
or other distribution in respect of its capital stock or redeemed or purchased
or otherwise acquired any of its capital stock or any options relating thereto
or agreed to take any such action;

i)   Made any material change in any method of accounting or accounting
practice.

 

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3.08   Litigation.
There are no actions, proceedings, or investigations pending or, to the
knowledge of the Shareholders, threatened against WelWay, and the Sellers know
or have any reason to know of any basis for any such action, proceeding, or
investigation. There is no event or condition of any kind or character
pertaining to the business, assets, or prospects of WelWay that may materially
and adversely affect such business, assets or prospects.

3.09   Disclosure.
The Shareholders have disclosed to AAVI all facts material to the assets,
prospects, and business of WelWay. No representation or warranty by the
Shareholders contained in this Agreement, and no statement contained in any
instrument, list, certificate, or writing furnished to AAVI pursuant to the
provisions hereof or in connection with the transaction contemplated hereby,
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained herein or therein not
misleading or necessary in order to provide a prospective purchaser of the
business of WelWay with proper information as to WelWay and its affairs.

3.10   Reports and Filings.
WelWay is current in its reporting obligations.

3.11   Undertakings and Acknowledgements by the WelWay Shareholders
The WelWay Shareholders acknowledge and understand that:

a)   the common shares to be issued to them by AAVI have not been approved or
disapproved by the United States Securities and Exchange Commission, any state
securities agency, or any foreign securities agency;

b)   the WelWay Shareholders are not underwriters and are acquiring AAVI's
common shares solely for investment purposes for their own account and not with
a view to, or for, resale in connection with any distribution within the meaning
of any federal securities act, state securities act or any other applicable
federal or state laws;

c)   the Shareholders understand the speculative nature and risks of investments
associated with AAVI, and confirm that the AAVI shares are suitable and
consistent with their investment program; and, that their financial position
enables them to bear the risks of this investment;

d)   the AAVI shares may not be transferred, encumbered, sold, hypothecated, or
otherwise disposed of, if such disposition will violate any federal and/or state
securities acts or foreign laws. Disposition shall include, but is not limited
to acts of selling, assigning, transferring, pledging, encumbering,
hypothecating, giving, and any form of conveying, whether voluntary or not for a
period of one (1) year from the date of issuance and thereafter, only in
compliance with Rule 144 of the Securities Act of 1933;

e)   to the extent that any federal, and/or state securities laws shall require,
the Shareholders hereby agree that any AAVI shares acquired pursuant to this
Agreement shall be without preference as to assets;

 

 

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f)   except As specified in Section 4.04, AAVI is under no obligation to
register or seek an exemption under any federal securities act, state securities
act, or any foreign securities act for any of its common shares or to cause or
permit such shares to be transferred in the absence of any such registration or
exemption;

g)   the Shareholders have had the opportunity to ask questions of AAVI and have
received additional information from AAVI to the extent that AAVI possessed such
information, necessary to evaluate the merits and risks of any investment in the
AAVI. Further, the Shareholders have been given access to: (i) all material
books, records, documents, correspondence, and financial statements of AAVI;
(ii) all material contracts and documents relating to the proposed transaction;
(iii) all reports filed with the Securities and Exchange Commission; and, (iv)
an opportunity to question the appropriate executive officers of AAVI.

h)   the Shareholders have satisfied the suitability standards imposed by their
place of residence and have a pre-existing business relationship with AAVI;

i)   the Shareholders have adequate means of providing for their current needs
and personal contingencies and have no need to sell the AAVI shares in the
foreseeable future (that is, at the time of the investment, the Shareholders can
afford to hold the investment for an indefinite period of time);

j)   the Shareholders have sufficient knowledge and experience in financial
matters to evaluate the merits and risks of this investment. Further, the
Shareholders represent and warrant that they are able to evaluate and interpret
the information furnished to them by AAVI and are capable of reading and
interpreting financial statements;

k)   the Shareholders warrant and represent that they are "sophisticated
investors" as that term is defined in United States court decisions and the
rules, regulations and decisions of the United States Securities and Exchange
Commission;

l)   further, the Shareholders warrant and represent that they are "accredited
investors" as that term is defined in Section 2(15)(i) or (ii) of the Securities
Act of 1933;

m)   the Shareholders acknowledge that if they are residents of the State of
Florida, they have the privilege of declaring this transaction null and void
provided the Shareholders communicate such intention to AAVI in writing within
three (3) days of the of the tender of their consideration.

 4. REPRESENTATIONS AND WARRANTIES BY AAVI.

    AAVI hereby represents and warrants as follows:

    4.01   Organization, etc.
    AAVI is a corporation organized under the laws of the State of Nevada, USA.

 

 

 

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4.02   Representations

a)   Regarding the Shares:

b)   AAVI understands that the SHARES IT WILL ISSUE HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES AGENCIES;

c)   AAVI is not an underwriter and is acquiring the Shareholder's Shares solely
for investment for the account of AAVI and not with a view to, or for, resale in
connection with any distribution with in the meaning of the federal securities
act, the state securities acts or any other applicable state securities acts;

d)   AAVI understands the speculative nature and risks of investments associated
with WelWay and confirms that the WelWay Shares are suitable and consistent with
its business program;

e)   Except as specified in Section 4.04 AAVI is under no obligation to register
or seek an exemption under any federal and/or state securities acts for any
stock of the Company or to cause or permit such stock to be transferred in the
absence of any such registration or exemption and that the Shareholders herein
must hold such stock indefinitely unless such stock is subsequently registered
under any federal and/or state securities acts or an exemption from registration
is available;

f)   AAVI has satisfied the suitability standards imposed by the laws of its
domicile. The WelWay Shares being acquired from the Shareholders have not been
registered under US federal, state or foreign laws.

4.03   Authority
The execution and delivery of this Agreement by AAVI and the consummation by
AAVI of the transactions contemplated hereby have been duly authorized by the
Board of Directors of AAVI.

4.04   Restricted Shares.

The Certificates representing the AAVI common shares delivered pursuant to this
Agreement which will be issued to the Shareholders are "Restricted Shares" as
that term is defined in the Securities Act of 1933 (the "Act"). Further, some or
all of the Shareholders will become affiliates of AAVI and accordingly, the AAVI
shares issued to the Shareholders will contain a "144 Legend." AAVI acknowledges
that, subject to any applicable federal and/or state securities acts or foreign
laws, AAVI will undertake to register the shares issued to the Shareholders with
the Securities and Exchange Commission of the United States at the earliest
practical date.

SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION.

5.01   Survival of Representations
All representations, warranties, and agreements made by any party in this
Agreement or pursuant hereto shall survive the execution and delivery hereof and
any investigation at any time made by or on behalf of any party.

 

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5.02   Indemnification
The Shareholders, jointly and severally, agree to indemnify AAVI and hold it
harmless from and in respect of any assessment, loss, damage, liability, cost,
and expense (including without limitation interest, penalties, and reasonable
attorneys' fees) in excess of $1,000 in the aggregate, imposed upon or incurred
by AAVI resulting from a breach of any agreement, representation, or warranty of
the Shareholders. Assertion by AAVI of its right to indemnification under this
Section 5.02 shall not preclude the assertion by AAVI of any other rights or the
seeking of any other remedies against the Shareholders.

 6. MISCELLANEOUS.

    6.01   Further Assurances
    From time to time, at AAVI's request and without further consideration, the
    Shareholders, at their own expense, will execute and transfer such documents
    and will take such action as AAVI may reasonably request in order to
    effectively consummate the transactions herein contemplated.

    6.02   Parties in Interest
    All the terms and provisions of this Agreement shall be binding upon, shall
    inure to the benefit of, and shall be enforceable by the prospective heirs,
    beneficiaries, representatives, successors, and assigns of the parties
    hereto.

    6.03   Prior Agreements; Amendments
    This Agreement supersedes all prior agreements and understandings between
    the parties with respect to the subject matter hereof. This Agreement may be
    amended only by a written instrument duly executed by the parties hereto or
    their respective successors or assigns.

    6.04   Headings
    The section and paragraph headings contained in this Agreement are for
    reference purposes only and shall not affect in any way the meaning or
    interpretations of this Agreement.

    6.05   Governing Law
    

    This Agreement shall be governed by and construed and enforced in accordance
    with the laws of the state of Nevada, without regard to its conflict-of-laws
    rules and venue of any actions brought under this Agreement will be in the
    federal or state courts of Nevada.

    

    6.06   Notices
    All notices, requests, demands, and other communications hereunder shall be
    in writing and shall be deemed to have been duly given if delivered or
    mailed (registered or certified mail, postage prepaid, return receipt
    requested) or by facsimile, as follows:

    If to the Shareholders:
    
    c/o Matt Mecke
    6th Floor Landmark East
    12 Ice House Street
    Central
    Hong Kong
    Fax No. (852) 3101-7530 (Attention: Matt Mecke)

 

 

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If to AAVI;

Asian Alliance Ventures, Inc.
c/o Asian Alliance Ventures (Hong Kong) Limited
1304 Kinwick Centre
32 Hollywood Road
Central
Hong Kong
Fax No. (852) 2110-9983

6.07   Agent
Each Shareholder, individually, shall have full authority to execute all
documents and receive said AAVI common shares on behalf of the other Seller,
individually. Further, the Shareholders hereby authorize and direct each other
to act as their agent in connection with the disbursement of the moneys set
forth above.

6.08   Effect
In the event any portion of this Agreement is deemed to be null and void under
any state, federal or foreign law, all other portions and provisions not deemed
void or voidable shall be given full force and effect.

6.09   Counterparts
This Agreement may be executed simultaneously in several counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
Shareholders and AAVI, on the date first above written.

Asian Alliance Ventures, Inc.

 

/s/ Robert Clarke
Robert G. Clarke, Chairman

WelWay Development Limited

/s/ Matt Mecke
Matt Mecke, Director

 

 

 

 

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Shareholders of WelWay Development Limited

/s/ Matthew Ryan Mecke
Matthew Ryan Mecke

/s/ Andrew Crampton
Andrew Crampton

/s/ David James Fiddes
David James Fiddes

/s/ Robert James Henson Johnson
Robert James Henson Johnson

/s/ Francois Williams
Francois Williams

/s/ Christopher Michael Fox
Christopher Michael Fox

/s/ Martin Lewis McCullough
Martin Lewis McCullough

/s/ Ho Edith Kan Ying
Ho Edith Kan Ying

 

 

 

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SCHEDULE A

Shareholders of WelWay Development Limited

Matthew Ryan Mecke

address omitted

32,560 shares

Andrew Crampton

address omitted

17,700 shares

David James Fiddes

address omitted

16,580 shares

Robert James Henson Johnson

address omitted

15,920 shares

Francois Williams

address omitted

17,200 shares

Christopher Michael Fox

address omitted

16 shares

Martin McCullough

address omitted

15 shares

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(continued)

SCHEDULE A

Shareholders of WelWay Development Limited

Edith Kam Ying Ho

address omitted

5 shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Schedule B

Performance Share Milestones

Milestones are to be considered as being reached when:

1.The target results specified for each Milestone is confirmed by AAVI's audited
financial statements for a full fiscal year (ending December 31).

2.All financial results are to be measured on a consolidated basis, except for
Milestone C (below).

3.AAVI's financial statements have been reviewed and approved by the AAVI audit
Committee.

4.Achievement of each Milestone is confirmed by a Resolution passed by the AAVI
Board of Directors and appropriate instructions issued to the Escrow Agent
authorizing the release.

Five Milestones are required to achieve release of the total of 4,000,000 (four
million) Performance Shares from Escrow. Achievement of each Milestone will
result in the release of 800,000 Performance Shares, allocated pro rata among
the Shareholders.

The five Milestones are:

A.Net revenues of US$10,000,000 (ten million) in a fiscal year.

B.Net revenues of US$25,000,000 (twenty-five million) in a fiscal year.

C.Net revenues of US$5,000,000 (five million) from one or more Joint Ventures in
China in a fiscal year, i.e. net revenues received by AAVI from the China market
only.

D.Earnings before interest, taxes, depreciation and amortization (EBITDA) of
US$1,000,000 (one million) in a fiscal year.

E.Net earnings, after tax, of US$1,000,000 (one million) in a fiscal year.

The Milestones are not sequential and more than one Milestone may be achieved in
a given fiscal year.

 

 

 

 

 

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