SHARE EXCHANGE AGREEMENT
AGREEMENT
dated as
of August 30, 2006 by and between Sunburst Acquisitions VII, Inc., a Colorado
corporation (hereinafter referred to as "Sunburst") and Max Concepts Limited
and
Noble Sense Consultants Limited, being the shareholders of Splendid Group
Investments Limited, a British Virgin Islands corporation (hereinafter referred
to as the "Splendid Shareholders").
WHEREAS,
Splendid Group Investments Limited (“Splendid”) owns one hundred percent (100%)
of the issued and outstanding capital stock of Guangzhou Junlian Correspondence
Technology Co., Ltd., a corporation organized under the laws of the People’s
Republic of China (“GJCT”); and
WHEREAS,
the
Splendid Shareholders own all of the issued and outstanding capital stock
of
Splendid; and
WHEREAS,
the
Splendid Shareholders desire to transfer the capital stock of Splendid to
Sunburst and Sunburst desires to acquire the shares.
NOW,
THEREFORE,
it is
agreed:
1. Definitions.
As used
herein, the following terms shall have the meanings set forth
below:
a. “Applicable
Law” means any domestic or foreign law, statute, regulation, rule, policy,
guideline or ordinance applicable to the businesses or corporate existence
of
Sunburst, Splendid or GJCT.
b. “Lien”
means, with respect to any property or asset, any mortgage, lien, pledge,
charge, security interest, claim, encumbrance, royalty interest, any other
adverse claim of any kind in respect of such property or asset, or any other
restrictions or limitations of any nature whatsoever.
2. Share
Exchange.
a. On
the
Closing Date (defined herein), the Splendid Shareholders shall transfer and
assign to Sunburst all of the issued and outstanding capital stock of Splendid.
The Splendid Shareholders represent and warrant that upon delivery to Sunburst
of certificates for said shares, all of the right, title and interest in
said
shares will be transferred to Sunburst free of Liens, claims and encumbrances.
b. On
the
Closing Date, Sunburst shall issue to the Splendid Shareholders, from its
authorized but unissued shares of common stock, a total of five million,
nine
hundred thirty five thousand (5,935,000) shares of common stock (the “Exchange
Shares”). The Splendid Shareholders hereby represent that they have assigned to
Zhang Jun Chuan their right to receive the Exchange Shares, and direct Sunburst
to issue the certificates for the Exchange Shares directly to Mr, Zhang.
Sunburst warrants that the common stock, when so issued, will be duly
authorized, fully paid and non-assessable. Sunburst further warrants that,
upon
issuance of the Exchange Shares, there will be 9,720,000 shares of Sunburst
common stock issued and outstanding, of which Xx. Xxxxx will own 95% and
the
other shareholders of Sunburst will own 5%.
c. The
parties intend that the exchange of shares described above shall qualify
as a
tax-free exchange under Section 351 of the United States Internal Revenue
Code.
The parties further intend that the issuance of the common stock and the
preferred stock by Sunburst to the Splendid Shareholders shall be exempt
from
the provisions of Section 5 of the Securities Act of 1933 pursuant to Section
4(2) of said Act.
3. Closing.
The
Closing of the transactions contemplated by this Agreement ("Closing") shall
take place at the offices of counsel for Sunburst simultaneous with the
execution of this Agreement (the “Closing Date”).
4. Warranties
and Representations of Splendid Shareholders.
In order
to induce Sunburst to enter into this Agreement and to complete the transaction
contemplated hereby, the Splendid Shareholders warrant and represent to Sunburst
that:
a. Organization
and Standing - Splendid.
Splendid is a corporation duly organized, validly existing and in good standing
under the laws of the British Virgin Islands and has full power and authority
to
carry on its business as now conducted. The copy of the Articles of Association
of Splendid previously delivered to Sunburst is true and complete as of the
date
hereof.
b. Capitalization
- Splendid.
Splendid’s entire authorized capital stock consists of 100 shares of common
stock, $1.00 par value, of which all 100 shares are issued and outstanding.
There are no other voting or equity securities authorized or issued, nor
any
authorized or issued securities convertible into equity securities, and no
outstanding subscriptions, warrants, calls, options, rights, commitments
or
agreements by which Splendid or the Splendid Shareholders are bound, calling
for
the issuance of any additional equity securities of Splendid. All of the
outstanding Splendid Common Shares have been duly authorized and validly
issued
and are fully paid and non-assessable and were not issued in violation of
any
preemptive rights or any Applicable Law.
c. Ownership
of Splendid Shares.
The
Splendid Shareholders are the sole owners of the outstanding shares of Splendid
Common Stock. By the transfer of the Splendid Common Stock to Sunburst pursuant
to this Agreement, Sunburst will acquire good and marketable title to 100%
of
the capital stock of Splendid, free and clear of all Liens, encumbrances
and
restrictions of any nature whatsoever, except by reason of the fact that
the
Splendid Common Shares will not have been registered under the Securities
Act of
1933, or any applicable state securities laws.
d. Business
Operations and Liabilities - Splendid.
Splendid has conducted no business operations other than the acquisition
of
ownership of the capital stock of GJCT. Splendid has no liabilities other
than
liabilities incurred in the ordinary course that do not exceed $ 10,000 on
the
Closing Date.
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e. Organization
and Standing - GJCT.
GJCT is
a corporation duly organized, validly existing and in good standing under
the
laws of the People’s Republic of China. GJCT has full power and authority to
carry on its business as now conducted and to own and operate its assets,
properties and business.
f.
Capitalization
- GJCT.
Except
for the capital stock of GJCT that is owned by Splendid, there are no voting
or
equity securities authorized or issued, nor any authorized or issued securities
convertible into equity securities, and no outstanding subscriptions, warrants,
calls, options, rights, commitments or agreements by which GJCT or Splendid
are
bound, calling for the issuance of any additional equity securities of GJCT.
All
of the outstanding GJCT Common Shares have been duly authorized and validly
issued and are fully paid and non-assessable and were not issued in violation
of
any preemptive rights or any applicable securities laws.
g. Ownership
of GJCT Shares.
Splendid is the owner of one hundred percent (100%) the outstanding shares
of
GJCT Common Stock, free and clear of all Liens, encumbrances, and restrictions
whatsoever.
h. GJCT
Financial Condition.
The
Splendid Shareholders have delivered to Sunburst the financial statements
of
GJCT for the period from Inception through June 30, 2006. Such financial
statements present fairly in all material respects the financial condition
of
GJCT as of the date thereof.
i.
Governmental
Consent.
No
consent, waiver, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or commission
or
other non-U.S., U.S., state, county, local or other foreign governmental
authority, instrumentality, agency or commission is required by or with respect
to Splendid or GJCT in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated
hereby.
j.
Taxes.
Each of
Splendid and GJCT has filed all tax returns that it is required to file with
all
governmental agencies, wherever situate, and has paid or accrued for payment
all
taxes as shown on such returns except
for taxes being contested in good faith. There is no material claim for taxes
that is a Lien against the property of Splendid or GJCT other than Liens
for
taxes not yet due and payable.
k. Pending
Actions.
There
are no material legal actions, lawsuits, proceedings or investigations pending
or threatened, against or affecting Splendid, GJCT, or against GJCT’s Officers
or Directors or the Splendid Shareholder that arose out of their operation
of
GJCT. Neither Splendid, GJCT, nor the Splendid Shareholders are subject to
any
order, writ, judgment, injunction, decree, determination or award of any
court,
arbitrator or administrative, governmental or regulatory authority or body
which
would be likely to have a material adverse effect on the business of GJCT
or
Splendid.
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l.
Ownership
of Assets.
GJCT
has good, marketable title, without any Liens or encumbrances of any nature
whatever, to all of the assets, properties and rights of every type and
description, used in the operation of its business.
m. No
Debt Owed to Splendid Shareholders.
Neither
Splendid nor GJCT owes any money, securities, or property to the Splendid
Shareholders or any affiliate of either or to any company controlled by or
under
common control with such a person, directly or indirectly.
n. Intellectual
Property And Intangible Assets. To
the
knowledge of the Splendid
Shareholders,
GJCT
has full legal right, title and interest in and to all of the intellectual
property utilized in the operation of its business. GJCT has not received
any
written notice that the rights of any other person are violated by the use
by
GJCT of the intellectual property. None of the intellectual property has
ever
been declared invalid or unenforceable, or is the subject of any pending
or, to
the knowledge of the Splendid
Shareholders,
threatened action for opposition, cancellation, declaration, infringement,
or
invalidity, unenforceability or misappropriation or like claim, action or
proceeding.
o. Validity
of the Agreement.
This
Agreement has been duly executed by the Splendid Shareholders and constitutes
their valid and binding obligation, enforceable in accordance with its terms
except to the extent limited by applicable bankruptcy, reorganization,
insolvency, moratorium or other laws relating to or effecting generally the
enforcement of creditors’ rights. The execution and delivery of this Agreement
and the carrying out of its purposes will not result in the breach of any
of the
terms or conditions of, or constitute a default under or violate, the Articles
of Association of either Splendid or GJCT, or any material agreement or
undertaking, oral or written, to which Splendid or GJCT or the Splendid
Shareholders is a party or is bound or may be affected, nor will such execution,
delivery and carrying out violate any order, writ, injunction, decree, law,
rule
or regulation of any court, regulatory agency or other governmental body;
and
the business now conducted by GJCT can continue to be so conducted after
completion of the transaction contemplated hereby.
p. Compliance
with Laws.
GJCT's
operations have been conducted in all material respects in accordance with
all
applicable statutes, laws, rules and regulations. GJCT is not in violation
of
any law, ordinance or regulation of the People’s Republic of China or of any
other jurisdiction. GJCT holds all the environmental, health and safety and
other permits, licenses, authorizations, certificates and approvals of
governmental authorities necessary or proper for the current use, occupancy
or
operation of its business, all of which are now in full force and effect.
5. Warranties
and Representations of Sunburst.
In
order to induce the Splendid Shareholders to enter into this Agreement and
to
complete the transaction contemplated hereby, Sunburst warrants and represents
to the Splendid Shareholders that:
a. Organization
and Standing.
Sunburst is a corporation duly organized, validly existing and in good standing
under the laws of the State of Colorado and has full power and authority
to
carry on its business as now conducted. The copies of the Certificate of
Incorporation and Bylaws of Sunburst previously delivered to the Splendid
Shareholder are true and complete as of the date hereof.
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b. Capitalization.
Sunburst's entire authorized capital stock consists of 100,000,000 shares
of
common stock, no par value, and 20,000,000 shares of preferred stock, no
par
value. At the Closing, prior to the issuance of shares to the Splendid
Shareholders, there will be 3,785,000 shares of Sunburst Common Stock issued
and
outstanding and no shares of Preferred Stock outstanding. At the Closing,
there
will be no other voting or equity securities outstanding, and no outstanding
subscriptions, warrants, calls, options, rights, commitments or agreements
by
which Sunburst is bound, calling for the issuance of any additional shares
of
common stock or preferred stock or any other voting or equity security.
c. Corporate
Records.
All of
Sunburst's books and records, including, without limitation, its books of
account, corporate records, minute book, stock certificate books and other
records are up-to-date, complete and reflect accurately and fairly the conduct
of its business in all material respects since its date of incorporation.
d. Sunburst
Financial Condition.
On the
Closing Date Sunburst will have no assets and no liabilities of any kind
or
nature, fixed or contingent.
e. Significant
Agreements.
At the
Closing Sunburst will not be bound by any contract, agreement, lease,
commitment, guarantee or arrangement of any kind.
f.
Taxes.
Sunburst has filed all tax returns that it is required to file with all
governmental agencies, wherever situate, and has paid or accrued for payment
all
taxes as shown on such returns except
for taxes being contested in good faith. There is no material claim for taxes
that is a Lien against the property of Sunburst other than Liens for taxes
not
yet due and payable.
g. Pending
Actions.
There
are no legal actions, lawsuits, proceedings or investigations, either
administrative or judicial, pending or threatened, against or affecting Sunburst
or against Sunburst’s former Officers or Directors that arose out of their
operation of Sunburst. Sunburst is not subject to any order, writ, judgment,
injunction, decree, determination or award of any court, arbitrator or
administrative, governmental or regulatory authority or body.
h. Validity
of the Agreement.
All
corporate and other proceedings required to be taken by Sunburst in order
to
enter into and to carry out this Agreement have been duly and properly taken.
This Agreement has been duly executed by Sunburst, and constitutes a valid
and
binding obligation of Sunburst, enforceable against it in accordance with
its
terms except to the extent limited by applicable bankruptcy reorganization,
insolvency, moratorium or other laws relating to or effecting generally the
enforcement of creditors’ rights. The execution and delivery of this Agreement
and the carrying out of its purposes will not result in the breach of any
of the
terms or conditions of, or constitute a default under or violate, Sunburst's
Certificate of Incorporation or Bylaws, or any agreement, lease, mortgage,
bond,
indenture, license or other document or undertaking, oral or written, to
which
Sunburst is a party or is bound or may be affected, nor will such execution,
delivery and carrying out violate any order, writ, injunction, decree, law,
rule
or regulation of any court, regulatory agency or other governmental
body.
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i.
SEC
Status. The
common stock of Sunburst is registered pursuant to Section 12(g) of the
Securities and Exchange Act of 1934. Sunburst has filed all reports required
by
the applicable regulations of the SEC. All
of
the filings by Sunburst under the Exchange Act within the past four years
were
true, correct and complete in all material respects when filed, were not
misleading and did not omit to state any material fact which was necessary
to
make the statements contained in such public filings not misleading in any
material respect.
j.
Compliance
with laws.
Sunburst’s operations have been conducted in all material respects in accordance
with all applicable statutes, laws, rules and regulations. Sunburst is not
in
violation of any Applicable Law.
6. Deliveries
at Closing
a. At
the
Closing the Splendid Shareholders shall deliver to Sunburst certificates
for the
outstanding shares of Splendid duly endorsed for transfer to
Sunburst.
b. At
the
Closing, Sunburst shall deliver to the Splendid Shareholders the
following:
A.
Certificates for five million, nine hundred thirty five thousand (5,935,000)
shares of Sunburst common stock in the name of Zhang Jun Chuan.
B.
A
certification signed by the Secretary of Sunburst attesting to the adoption
and
continuing effectiveness of resolutions of the Sunburst Board of Directors
ratifying and approving this Agreement.
C.
All
books and records of Sunburst.
7. Restriction
on Resale.
The
Sunburst Common Shares to be issued by Sunburst to the Splendid Shareholders
hereunder at the Closing will not be registered under the Securities Act
of
1933, or the securities laws of any state, and cannot be transferred,
hypothecated, sold or otherwise disposed of within the United States of America
until: (i) a registration statement with respect to such securities is declared
effective under the Securities Act of 1933, or (ii) Sunburst receives an
opinion
of counsel for the stockholders, reasonably satisfactory to counsel for
Sunburst, that an exemption from the registration requirements of the Securities
Act of 1933 is available.
The
certificates representing the shares which are being issued to the Splendid
Shareholder pursuant to this Agreement shall contain a legend substantially
as
follows:
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“THE
SECURITIES WHICH ARE REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
HYPOTHECATED OR OTHERWISE DISPOSED OF UNTIL A REGISTRATION STATEMENT WITH
RESPECT THERETO IS DECLARED EFFECTIVE UNDER SUCH ACT, OR SUNBURST ACQUISITIONS
VII, INC. RECEIVES AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO SUNBURST
ACQUISITIONS VII, INC. THAT AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF
SUCH ACT IS AVAILABLE.”
8. Applicable
Law.
This
Agreement shall be governed by the laws of the State of Colorado, without
giving
effect to the principles of conflicts of laws thereof, as applied to agreements
entered into and to be performed in such state.
9. Assignment;
Binding Effect.
This
Agreement, including both its obligations and benefits, shall inure to the
benefit of, and be binding on the respective permitted assigns, transferees
and
successors of the parties. This Agreement may not be assigned or transferred
in
whole or in part by any party without the prior written consent of the other
parties, which consent shall not be unreasonably withheld or
delayed.
10.
Counterparts.
This
Agreement may be executed in multiple facsimile counterparts. Each of the
counterparts shall be deemed an original, and together they shall constitute
one
and the same binding Agreement, with one counterpart being delivered to each
party hereto.
IN
WITNESS WHEREOF, the parties hereto have set their hands as of the date and
year
written on the first page.
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SUNBURST
ACQUISITIONS VII, INC.
|
MAX
CONCEPTS LIMITED
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||
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By:
|
/s/
Zhang Jun Chuan
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By:
|
/s/
Zhang Jun Xxxxx
|
|
Xxxxx
Jun Chuan, Chief Executive Officer
|
Zhang
Jun Chuan, Trustee
|
||
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NOBLE
SENSE CONSULTANTS LIMITED
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|||
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By:
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/s/
Xx Xxxx Tu
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||
|
Xx
Xxxx Tu, Trustee
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