Exh 10-a
SHARE EXCHANGE AGREEMENT
AGREEMENT dated June 29, 2006 by and among Iron Star Development,
Inc., a Utah corporation (hereinafter referred to as "ISDI") and the
individual signatories to this agreement, being all of the shareholders of
Winner Sea Group Limited, a business company organized under the laws of
the British Virgin Islands (hereinafter referred to as the "WSGL
Shareholders")
WHEREAS, Winner Sea Group Limited ("WSGL") owns ninety percent (90%)
of the registered and outstanding capital stock of Harbin Yinhai Technology
Development Company Limited ("Yinhai"); and
WHEREAS, WSGL and Yinhai own all of the equity in a joint venture
called "Harbin Golden Sea Technology Printing Co., Ltd. ("Golden Sea"),
which is the successor to the business of Yinhai; and
WHEREAS, the WSGL Shareholders own all of the issued and outstanding
capital stock of WSGL; and
WHEREAS, the WSGL Shareholders desire to transfer to ISDI and ISDI
desires to acquire one hundred (100%) percent of such 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 ISDI, WSGL or Yinhai.
b. "GAAP" means generally accepted accounting principles in the
United States of America as promulgated by the American Institute of
Certified Public Accountants and the Financial Accounting Standards Board
or any successor institutes concerning the treatment of any accounting
matter.
c. "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.
d. "Tax" (and, with correlative meaning, "Taxes" and "Taxable")
means:
(i) any income, alternative or add-on minimum tax, gross
receipts tax, sales tax, use tax, ad valorem tax, transfer tax, franchise
tax, profits tax, license tax, withholding tax, payroll tax, employment
tax, excise tax, severance tax, stamp tax, occupation tax, property tax,
environmental or windfall profit tax, custom, duty or other tax, impost,
levy, governmental fee or other like assessment or charge of any kind
whatsoever together with any interest or any penalty, addition to tax or
additional amount imposed with respect thereto by any governmental or Tax
authority responsible for the imposition of any such tax (domestic or
foreign), and
(ii) any liability for the payment of any amounts of the type
described in clause (i) above as a result of being a member of an
affiliated, consolidated, combined or unitary group for any Taxable
period, and
(iii) any liability for the payment of any amounts of the type
described in clauses (i) or (ii) above as a result of any express or
implied obligation to indemnify any other person.
e. "Tax Return" means any return, declaration, form, claim for
refund or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
2. SHARE EXCHANGE.
a. The WSGL Shareholders hereby transfer and assign to ISDI all of
the issued and outstanding capital stock of WSGL. The WSGL Shareholders
represent and warrant that the execution and delivery of this Agreement
transfers to ISDI all of the right, title and interest in said shares free
of Liens, claims and encumbrances.
b. Promptly after the execution of this Agreement, ISDI shall
issue to the WSGL Shareholders a total of Eighteen Million (18,000,000)
shares of common stock. The shares shall be issued in proportion to the
relative interests of the WSGL Shareholders in WSGL, as set forth on
Schedule 2a hereto. No fractional shares will be issued; in lieu thereof,
the number of shares to each WSGL Shareholder will be rounded up to the
next whole share. ISDI warrants that the common stock, when so issued,
will be duly authorized, fully paid and non-assessable.
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 by ISDI to the WSGL 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 Xxxxxx Xxxxxx,
counsel to the WSGL Shareholders, at 11:00 A.M. on the date of this
Agreement. As used herein, "Closing Date" means the date on which the
Closing occurs.
4. WARRANTIES AND REPRESENTATIONS OF WSGL SHAREHOLDERS In order
to induce ISDI to enter into this Agreement and to complete the transaction
contemplated hereby, the WSGL Shareholders, jointly and severally, warrant
and represent to ISDI that:
a. ORGANIZATION AND STANDING - WSGL. WSGL is a Business Company
duly organized, validly existing and in good standing under the laws of the
British Virgin Islands. WSGL has full power and authority to carry on its
business as now conducted and to own and operate its assets, properties and
business.
b. CAPITALIZATION - WSGL. WSGL's entire authorized capital stock
consists of 50,000 shares of common stock, $1.00 par value, of which 49,985
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 WSGL
or the WSGL Shareholders are bound, calling for the issuance of any
additional equity securities of WSGL. All of the outstanding WSGL 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 WSGL SHARES. The WSGL Shareholders are the sole
owners of the outstanding shares of WSGL Common Stock, free and clear of
all liens, encumbrances, and restrictions whatsoever. By the transfer of
the WSGL Common Stock to ISDI pursuant to this Agreement, ISDI will acquire
good and marketable title to 100% of the capital stock of WSGL, free and
clear of all Liens, encumbrances and restrictions of any nature whatsoever.
d. BUSINESS OPERATIONS AND LIABILITIES - WSGL. WSGL has conducted
no business operations other than the execution of the Cooperative Venture
Agreement with Yinhai to create Golden Sea and the acquisition of ownership
of 90% of the capital stock of Yinhai. WSGL has no liabilities other than
liabilities incurred in connection with the activities identified in this
section, which will not exceed $5,000 on the Closing Date.
e. ORGANIZATION AND STANDING - YINHAI. Yinhai is a corporation
duly organized, validly existing and in good standing under the laws of the
People's Republic of China. Yinhai has full power and authority to carry
on its business as now conducted and to own and operate its assets,
properties and business.
f. OWNERSHIP OF YINHAI SHARES. WSGL is the owner of ninety
percent (90%) the outstanding shares of Yinhai Common Stock, free and clear
of all Liens, encumbrances, and restrictions whatsoever. The remaining
ten percent (10%) of the outstanding shares of Yinhai Common Stock is owned
by Xxx Xxxxxxx.
g. TAXES. Each of WSGL, Golden Sea and Yinhai 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 WSGL,
Golden Sea or Yinhai other than Liens for Taxes not yet due and payable.
All Taxes due and owing by WSGL, Golden Sea or Yinhai have been paid.
Neither WSGL nor Yinhai is the beneficiary of any extension of time within
which to file any tax return.
h. PENDING ACTIONS. There are no material legal actions,
lawsuits, proceedings or investigations, either administrative or judicial,
pending or threatened, against or affecting WSGL, Golden Sea, Yinhai, or
against Yinhai's officers or directors or the WSGL Shareholders that arose
out of their operation of Yinhai. Neither WSGL, Yinhai, any of Yinhai's
officers or directors nor any of the WSGL 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 Yinhai or Golden Sea.
i. WSGL FINANCIAL STATEMENTS. The WSGL Shareholders have
delivered to ISDI the audited financial statements of WSGL for the period
ended March 31, 2006 and the audited financial statements of Yinhai for the
years ended December 31, 2005 and 2004 (collectively, the "WSGL Financial
Statements"). The WSGL Financial Statements have been prepared in
accordance with U.S. generally accepted accounting principles and present
fairly in all material respects the financial condition of WSGL and Yinhai
as of the dates thereof. The WSGL financial statements have been reported
on by an independent accountant registered with the PCAOB. The WSGL
Shareholders have also delivered to ISDI the unaudited financial statements
of Yinhai for the three month periods ended March 31, 2006 and 2005 (the
"Interim Financial Statements"). The Interim Financial Statements fairly
present the results of operations of Yinhai and its financial condition as
of the dates thereof.
j. ABSENCE OF CERTAIN CHANGES OR EVENTS. Since March 31, 2006,
there has not been (i) any material adverse change in the business,
operations, properties, assets, or condition of Yinhai or (ii) any damage,
destruction, or loss to Yinhai (whether or not covered by insurance)
materially and adversely affecting the business, operations, properties,
assets, or condition of Yinhai;
k. COMPLIANCE WITH LAWS. Yinhai's operations and those of Golden
Sea have been conducted in all material respects in accordance with all
applicable statutes, laws, rules and regulations. Yinhai is not in
violation of any law, ordinance or regulation of the People's Republic of
China or of any other jurisdiction. Yinhai holds all the environmental,
health and safety and other permits, licenses, authorizations, certificates
and approvals of governmental authorities (collectively, "Permits")
necessary or proper for the current use, occupancy or operation of its
business, and all of the Permits are now in full force and effect.
l. UNDISCLOSED LIABILITIES. Neither WSGL nor Yinhai has any
material liability except for (i) liabilities set forth in the WSGL
Financial Statements or the Interim Financial Statements, and (ii)
liabilities that have arisen after March 31, 2006 in the ordinary course of
business.
m. INVESTMENT INTENT. The WSGL Shareholders (i) understand that
the shares of ISDI common stock that they will receive pursuant to this
Agreement have not been and will not be registered under the Securities Act
or under any state securities laws, and are being transferred to them in
reliance upon federal and state exemptions for transactions not involving
any public offering, (ii) are acquiring the shares solely for their own
accounts for investment purposes and not with a view to the distribution
thereof, (iii) are sophisticated investors with knowledge and experience in
business and financial matters, (iv) have received information concerning
ISDI and have had the opportunity to obtain additional information as
desired in order to evaluate the merits and risks inherent in holding ISDI
shares, and (v) are able to bear the economic risk and lack of liquidity
inherent in holding ISDI shares.
5. WARRANTIES AND REPRESENTATIONS OF ISDI. In order to induce the
WSGL Shareholders to enter into this Agreement and to complete the
transaction contemplated hereby, ISDI warrants and represents to the WSGL
Shareholders that:
a. ORGANIZATION AND STANDING. ISDI is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Utah. ISDI is qualified to do business as a foreign corporation
in every other state in which it operates to the extent required by the
laws of such states, and has full power and authority to carry on its
business as now conducted and to own and operate its assets, properties and
business. The copies of the Certificate of Incorporation and Bylaws of ISDI
previously delivered to the WSGL Shareholders are true and complete as of
the date hereof.
b. CAPITALIZATION. ISDI's entire authorized capital stock
consists of 40,000,000 shares of common stock, $.001 par value. At the
Closing there will be 307,899 shares of ISDI Common Stock issued and
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 ISDI is bound, calling
for the issuance of any additional shares of common stock or preferred
stock or any other voting or equity security.
c. ISDI FINANCIAL CONDITION. On the Closing Date ISDI will have
no liabilities of any kind or nature, fixed or contingent.
d. SIGNIFICANT AGREEMENTS. At the Closing ISDI will not be bound
by any contract, agreement, lease, commitment, guarantee or arrangement of
any kind.
e. TAXES. ISDI 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 ISDI other than Liens for Taxes not yet
due and payable.
f. PENDING ACTIONS. There are no legal actions, lawsuits,
proceedings or investigations, either administrative or judicial, pending
or threatened, against or affecting ISDI or against ISDI's officers or
directors that arose out of their operation of ISDI. ISDI 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.
g. TRADING STATUS. ISDI's common stock is quoted for trading on
the OTC Bulletin Board, with the symbol "ISDV." ISDI has not received any
notice of action by the OTC Bulletin Board contemplating a delisting of ISDI.
h. SEC STATUS. The common stock of ISDI is registered pursuant to
Section 12(g) of the Securities and Exchange Act of 1934. ISDI has filed
all reports required by the applicable regulations of the SEC. All of the
filings by ISDI 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.
i. COMPLIANCE WITH LAWS. ISDI's operations have been conducted
in all material respects in accordance with all applicable statutes, laws,
rules and regulations. ISDI is not in violation of any Applicable Law.
7. RESTRICTION ON RESALE. The ISDI Common Shares to be issued by
ISDI to the WSGL 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) ISDI receives an opinion of counsel for
the stockholders, reasonably satisfactory to counsel for ISDI, 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 WSGL Shareholders pursuant to this Agreement shall contain a legend
substantially as follows:
"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
XXXXXX XXXXXX MARINE, INC. RECEIVES AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO XXXXXX XXXXXX MARINE, INC. THAT AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT IS
AVAILABLE."
IN WITNESS WHEREOF, the parties hereto have set their hands as of the
date and year written on the first page.
IRON STAR DEVELOPMENT, INC.
By: /s Xxxx Xxxx
-----------------------------------
Xxxx Xxxx, Chief Executive Officer
WINNER SEA GROUP LIMITED SHAREHOLDERS:
/s/ Xxxx Xxxx /s/ Qui Huali
Xxxx Xxxx Qui Huali
/s/ Li Qingguo /s/ Zhou Xxxxx
Xx Xxxxxxx Xxxx Yudan
/s/ Xxxx Xxxxx /s/ Han Xxxxxx
Xxxx Xxxxx Xxx Dechao
/s/ Li Yuliang /s/ Xia Xxxxxxx
Xx Xxxxxxx Xxx Songlin
/s/ Xxxx Xxxxxxx /s/ Xxx Xxxxxx
Tian Xxxxxxx Xxx Xxxxxx
/s/ Xxx Xxx /s/ Tian Xxxxxxxx
Xxx Xxx Xxxx Longbiao
/s/ Tian Jihong /s/ Xia Xxxxxx
Xxxx Xxxxxx Xxx Xxxxxx
/s/ Xx Xxxxxx /s/ Zhang
Xx Xxxxxx Xxxxx Xxxxxx
/s/ Xxxx Xxxx /s/ Liu Xxxxxxx
Xxxx Xxxx Xxx Hongmei
/s/ Xie Guighong /s/ Han Xxxxxx
Xxx Xxxxxxx Xxx Jiayue
/s/ Liu Longjiang /s/ Jia Xxxx
Xxx Longjiang Jia Ying
/s/ Ling Jun /s/ Zheng Xxxxx
Xxxx Xxx Xxxxx Xxxxx
/s/ Du Song /s/ Xxxxx Xxx
Du Xxxx Xxxxx Bin
/s/ Wan Xxxxxxx
Xxx Shurong
SHARE EXCHANGE AGREEMENT
Schedule 2a
Winner Sea Iron Star
Shareholder Percentage Shares
---------------------------------------------------------------------
Xxxx Xxxx 35.00 6,300,000
Qui Huali 4.80 864,000
Li Qingguo 4.72 850,000
Xxxx Xxxxx 4.72 850,000
Xxxx Xxxxx 4.50 810,000
Han Dechao 4.44 800,000
Li Yuliang 4.44 800,000
Xia Songlin 4.44 800,000
Xxxx Xxxxxxx 4.17 750,000
Xxx Xxxxxx 3.89 700,000
Xxx Xxx 3.50 630,000
Tian Longbiao 3.22 580,000
Tian Jihong 3.15 570,000
Xia Yuhang 2.78 500,000
Xx Xxxxxx 2.60 470,000
Xxxxx Xxxxxx 2.58 460,000
Xxxx Xxxx 1.67 300,000
Xxx Xxxxxxx 1.53 276,000
Xxx Xxxxxxx 1.00 180,000
Han Jiayue .95 170,000
Liu Longjiang .67 120,000
Jia Ying .56 100,000
Ling Jun .25 45,000
Xxxxx Xxxxx .22 40,000
Du Song .11 20,000
Xxxxx Xxx .06 10,000
Xxxx Xxxxxxx .03 5,000
