SHARE EXCHANGE AGREEMENT

EXHIBIT 10.1

 

SHARE EXCHANGE AGREEMENT

 

BY AND AMONG

 

MOUNTAIN WEST BUSINESS SOLUTIONS, INC.

 

SUNSHINE BIOPHARMA, INC.

 

AND

 

THE SHAREHOLDERS OF SUNSHINE BIOPHARMA, INC.

 

          THIS SHARE EXCHANGE AGREEMENT (the "Agreement") is made and entered into as of October 15, 2009, by and among MOUNTAIN WEST BUSINESS SOLUTIONS, INC. a Colorado corporation ("MWBS"), whose principal place of business is located at 9844 W Powers Circle, Littleton, Colorado 80123; SUNSHINE BIOPHARMA COLORADO, INC., a Colorado corporation ("Sunshine"), with its principal place of business located at 12835 E. Arapahoe Rd, Tower 1 Penthouse #805, Centennial, CO 80012 and the Shareholders of Sunshine (the “Shareholders”), who hereby agree as follows.

 

RECITALS

 

          A.   Shareholders own at least eighty percent (80%) of the issued and outstanding Common and Series A Convertible Preferred Shares (as defined in Section 1.1) of Sunshine (the “Sunshine Shares”); and

 

          B.   MWBS desires to purchase all of the Sunshine Shares from the Shareholders and the Shareholders desire to sell their Sunshine Shares to MWBS on the terms and conditions hereinafter set forth.

 

          NOW, THEREFORE, in consideration of the covenants, promises and representations set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

ARTICLE I

 

SALE AND PURCHASE OF SHARES

 

          1.1   Sale and Purchase . At the at the Effective Time (as defined below), and subject to and upon the terms and conditions of this Agreement, the Shareholders agree to sell, transfer and assign to MWBS, and MWBS agrees to purchase from the Shareholders, all of their Sunshine Shares owned by them. As of Closing, the Sunshine Shares shall constitute at least eighty percent (80%) of

 

 

the issued and outstanding Shares of Sunshine in the aggregate. The sale and purchase of the Sunshine Shares contemplated hereunder shall be referred to herein as the "Transaction."

 

1.2          Closing ; Effective Time . The closing of the Transaction (the "Closing") shall take place at the offices of MWBS stated above herein on or before October 15, 2009, after the satisfaction or waiver of the conditions set forth in Article VI, or at such other time, date and location as the parties hereto agree in writing (the "Closing Date"). As soon as is practicable after the Closing, the parties hereto shall cause the Transaction to be consummated by delivering to the Secretary of State of the State of Colorado a Statement of Share Exchange (the “Statement of Share Exchange”), in such form as required by, and executed and acknowledged in accordance with, the relevant provisions of the Colorado Business Corporations Act (“CBCA”). The Transaction shall become effective as of the date and at such time (the “Effective Time”) as the Colorado Statement of Share Exchange is filed with the Secretary of State of the State of Colorado.

          1.3   Purchase Price . The aggregate purchase price (the "Purchase Price") for the Shares shall be Twenty One Million Nine Hundred Sixty-two (21,962,000) shares of the Common Stock of MWBS valued at $0.001 (US) per share and Eight Hundred Fifty Thousand (850,000) shares of Series A Convertible Preferred Stock of MWBS, valued at $0.001 (US) per share, convertible in accordance with the provisions of that certain Certificate of Preferences of MWBS attached hereto and incorporated herein as Exhibit “A” (the “MWBS Shares”).

 

          1.4   Delivery of Certificates Representing the Shares . At Closing, the Shareholders shall deliver the certificate(s) representing the Sunshine Shares, duly endorsed to MWBS or accompanied by stock powers or other assignments or documents to effectuate transfer of the Sunshine Shares duly endorsed to MWBS, with (i) all such other documents as may be required to vest in MWBS good and marketable title to the Sunshine Shares free and clear of any and all Liens (as defined in Section 2.3 hereof), and (ii) all necessary stock transfer and any other required documentary stamps. The Shareholders shall cause Sunshine to recognize and record the transfers described in this Section 1.4 on its transfer books.

 

          1.5   Issuance of Certificates Representing the MWBS Shares . At Closing, or as soon thereafter as practical, MWBS shall cause the MWBS Shares to be issued to the Shareholders as provided in Section 1.3 above. The MWBS Shares, when issued, shall be “restricted” shares (as that term is defined under the Securities Act of 1933, as amended) (the “Act”) and may not be sold, transferred or otherwise disposed of by the Shareholders without registration under the Act or an available exemption from registration under the Act. The certificates representing the MWBS Shares will contain the appropriate restrictive legends. MWBS shall cause its Transfer Agent to recognize and record the transfers described in this Section 1.5 on its transfer books, and MWBS shall issue appropriate stop-transfer instructions to the Transfer Agent with respect to the MWBS Shares.

 

          1.6   Taking of Necessary Action; Further Action . If, at any time after the Closing, any further action is necessary or desirable to carry out the purposes of this Agreement and to vest MWBS with full right, title and possession to the Sunshine Shares, the Shareholders will take all such lawful and necessary action.

 

 

 

ARTICLE II

 

REPRESENTATIONS AND WARRANTIES OF SUNSHINE AND SHAREHOLDERS

 

          Sunshine and the Shareholders hereby represent and warrant to, and covenant with, MWBS with respect to the following:

 

          2.1   Ownership of Shares. Shareholders are the record and beneficial owners of all of the issued and outstanding Sunshine Shares.           2.2   Authority . The Shareholders have full power and authority and are competent to (i) execute, deliver and perform this Agreement, and each ancillary document which Shareholders have executed or delivered or are to execute or deliver pursuant to this Agreement, and (ii) carry out Shareholders’ obligations hereunder and thereunder, without the need for any Governmental Action/Filing (as defined herein). The execution, delivery and performance by the Shareholders to this Agreement and each ancillary document does not and will not conflict with, result in a breach of, or constitute a default or require a consent or action under, any agreement or other instrument to or by which such Shareholders are a party or are bound or to which any of the properties or assets of the Shareholders are subject, or any Legal Requirement (as defined herein) to which such Shareholders are subject, or result in the creation of any Lien (as defined in Section 2.3) on the Shares. This Agreement, and Shareholders’ ancillary document to be executed and delivered by such Shareholders at the Closing, have been duly executed and delivered by such Shareholders (and each ancillary document to be executed and delivered by Shareholders at or after the Closing will be duly executed and delivered by Shareholders), and this Agreement constitutes, and each ancillary document, when executed and delivered by Shareholders will constitute such Shareholders’ legal, valid and binding obligation, enforceable against Shareholders in accordance with its terms. For purposes of this Agreement, (x) the term "Governmental Action/Filing" shall mean any franchise, license, certificate of compliance, authorization, consent, order, permit, approval, consent or other action of, or any filing, registration or qualification with, any federal, state, municipal, foreign or other governmental, administrative or judicial body, agency or authority, and (y) the term "Legal Requirements" means any federal, state, local, municipal, foreign or other law, statute, constitution, principle of common law, resolution, ordinance, code, edict, decree, rule, regulation, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Entity (as defined in Section 2.8(b)), and all requirements set forth in applicable Contracts (as defined in Section 2.18(a)).

 

          2.3   Title To Shares . The Shareholders have and shall transfer to MWBS at the Closing good and marketable title to all of their Sunshine Shares, free and clear of all liens, claims, charges, encumbrances, pledges, mortgages, security interests, options, rights to acquire, proxies, voting trusts or similar agreements, restrictions on transfer (other than federal and state securities laws restrictions on transfer) or adverse claims of any nature whatsoever ("Liens").

 

2.4

Acquisition of MWBS Shares for Investment .

 

 

 

                         (a) The Shareholders are acquiring the MWBS Shares to be issued to them for investment for each Shareholder’s own account and not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and such Shareholders have no present intention of selling, granting any participation in, or otherwise distributing the same. The Shareholders further represent that they do not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participation to such person or to any third person, with respect to any of the MWBS Shares.

 

                         (b) The Shareholders understand that the MWBS Shares are not and will not be registered under the Securities Act, that the sale and the issuance of the MWBS Shares is intended to be exempt from registration under the Act pursuant to Section 4(2) thereof, and that MWBS's reliance on such exemption is predicated on the Shareholders’ representations set forth herein. The Shareholders represent and warrant that: (i) they can bear the economic risk of their investment, and (ii) they possesses such knowledge and experience in financial and business matters that they are capable of evaluating the merits and risks of the investment in the MWBS Shares.

 

                         (c) The Shareholders acknowledge that neither the US Securities and Exchange Commission, nor the securities regulatory body of any state or other nation has received, considered or passed upon the accuracy or adequacy of the information and representations made in this Agreement.

 

                         (d) The Shareholders acknowledge that they have carefully reviewed such information as they deemed necessary to evaluate an investment in the MWBS Shares. To their full satisfaction the Shareholders have been furnished all materials requested relating to MWBS and the issuance of the MWBS Shares hereunder, and the Shareholders have been afforded the opportunity to ask questions of MWBS's representatives to obtain any information necessary to verify the accuracy of any representations or information made or given to the Shareholders. Notwithstanding the foregoing, nothing herein shall derogate from or otherwise modify the representations and warranties of MWBS set forth in this Agreement, on which the Shareholders have relied in making an exchange of their Shares for the MWBS Shares.

 

                         (e) The Shareholders understand that the MWBS Shares may not be sold, transferred, or otherwise disposed of without registration under the Act or an exemption therefrom, and that in the absence of an effective registration statement covering the MWBS Shares or any available exemption from registration under the Act, the MWBS Shares must be held indefinitely. Shareholders further acknowledge that the MWBS Shares may not be sold pursuant to Rule 144 promulgated under the Securities Act unless all of the conditions of Rule 144 are satisfied.

 

2.5

Organization and Qualification of Sunshine .

 

                         (a) Sunshine is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has the requisite power and authority to own, lease and operate its assets and properties and to carry on its business as it is now being or currently planned by Sunshine to be conducted. Sunshine is in possession of all franchises, grants, authorizations, licenses, permits, easements, consents, certificates, approvals and orders ("Approvals") necessary to own, lease and operate the properties it purports to own, operate or lease

 

 

and to carry on its business as it is now being or currently planned by Sunshine to be conducted, except where the failure to have such Approvals could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect (as defined in Section 9.2(b)) on Sunshine. Complete and correct copies of the Articles of Incorporation, Bylaws and all corporate minutes (or other comparable governing instruments with different names) (collectively referred to herein as "Charter Documents") of Sunshine, as amended and currently in effect, are attached hereto as Schedule 2.5. Sunshine is not in violation of any of the provisions of its Charter Documents.

 

                         (b) Sunshine is duly qualified or licensed to do business as a foreign corporation and is in good standing in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its activities makes such qualification or licensing necessary, except for such failures to be so duly qualified or licensed and in good standing that could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Sunshine.

 

                         (c) The minute books of Sunshine contain true, complete and accurate records of all meetings and consents in lieu of meetings of its Board of Directors (and any committees thereof), similar governing bodies and Shareholders ("Corporate Records") since the time of Sunshine's organization. Copies of such Corporate Records of Sunshine have been heretofore delivered to MWBS.

 

                         (d) The transfer records of Sunshine contain true, complete and accurate records of shareholder transfers involving the Shares ("Shareholder Records") of Sunshine since the time of Sunshine's organization. Copies of such Shareholder Records of Sunshine have been heretofore delivered to MWBS.

 

          2.6   Subsidiaries . Sunshine has no subsidiary companies. Sunshine does not own, directly or indirectly, any other ownership, equity, profits or voting interest in any other entity or Person or has any agreement or commitment to purchase any such interest, and Sunshine has not agreed and is not obligated to make nor is bound by any written, oral or other agreement, contract, subcontract, lease, binding understanding, instrument, note, option, warranty, purchase order, license, sublicense, insurance policy, benefit plan, commitment or undertaking of any nature, as of the date hereof or any date hereafter, under which it may be obligated to make any future investment in or capital contribution to any other entity or Person.

 

                 For purposes of this Agreement, (i) the term "Subsidiary" shall mean any entity in which Sunshine, directly or indirectly, owns beneficially securities or interests representing 50% or more of (x) the aggregate equity or profit interests, or (y) the combined voting power of voting interests ordinarily entitled to vote for management or otherwise, and (ii) the term "Person" shall mean and include an individual, a corporation, a partnership (general or limited), a joint venture, an association, a trust or any other organization or entity, including a government or political subdivision or an agency or instrumentality thereof.

 

2.7

Capitalization of Sunshine .

 

                         (a) The authorized capital of SUNSHINE consists of two hundred ten million (210,000,000) shares consisting of two hundred million (200,000,000) shares of Common Stock,

 

 

$.001 par value per share, and ten million (10,000,000) shares of Preferred Stock consisting of two million seven hundred thousand (2,700,000) shares of Preferred Stock, $.001 par value per share, and seven million three hundred thousand (7,300,000) shares of Series “A” Preferred Stock, $.001 par value per share. As of the Closing Date there will be 93,705,523 Common Shares and 7,300,000 Convertible Preferred Shares issued and outstanding. All issued and outstanding Shares are legally issued, fully paid and nonassessable, and are not issued in violation of the preemptive or other rights of any person.

 

                          (b) There are no equity securities, partnership interests or similar ownership interests of any class of any equity security of Sunshine, or any securities exchangeable or convertible into or exercisable for such equity securities, partnership interests or similar ownership interests, issued, reserved for issuance or outstanding. There are no subscriptions, options, warrants, equity securities, partnership interests or similar ownership interests, calls, rights (including preemptive rights), commitments or agreements of any character to which Sunshine is a party or by which it is bound obligating Sunshine to issue, deliver or sell, or cause to be issued, delivered or sold, or repurchase, redeem or otherwise acquire, or cause the repurchase, redemption or acquisition of, any Shares or similar ownership interests of Sunshine or obligating Sunshine to grant, extend, accelerate the vesting of or enter into any such subscription, option, warrant, equity security, call, right, commitment or agreement.

 

                         (c) There are no registration rights, and there is no voting trust, proxy, rights plan, anti-takeover plan or other agreement or understanding to which Sunshine is a party or by which Sunshine is bound with respect to any equity security of any class of Sunshine.

 

2.8

No Conflict; Required Filings and Consents .

 

                         (a) The execution and delivery of this Agreement by the Shareholders does not, and the performance of this Agreement by the Shareholders shall not, (i) conflict with or violate Sunshine's Charter Documents, (ii) subject to obtaining the adoption of this Agreement and the Transaction by the Shareholders, conflict with or violate any Legal Requirements, or (iii) result in any breach of or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or materially impair Sunshine's rights or alter the rights or obligations of any third party under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a lien or encumbrance on any of the properties or assets of Sunshine pursuant to, any Contracts, except, with respect to clauses (ii) or (iii), for any such conflicts, violations, breaches, defaults or other occurrences that would not, individually and in the aggregate, have a Material Adverse Effect on Sunshine.

 

                         (b) The execution and delivery of this Agreement by the Shareholders does not, and the performance of their obligations hereunder will not, require any consent, approval, authorization or permit of, or filing with or notification to, any court, administrative agency, commission, governmental or regulatory authority, self-regulatory organization, domestic or foreign (a "Governmental Entity"), except (i) for applicable requirements, if any, of the Act, the Securities Exchange Act of 1934, as amended (the "Exchange Act"), state securities laws ("Blue Sky Laws"), and the rules and regulations thereunder, and appropriate documents with the relevant authorities of other jurisdictions in which Sunshine is qualified to do business, (ii) consents, approvals,

 

 

authorizations, permits, filings and notices to be obtained or made prior to Closing, and (iii) where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Sunshine or, after the Closing, MWBS, or prevent consummation of the Transaction or otherwise prevent the parties hereto from performing their obligations under this Agreement.

 

          2.9   Compliance . Sunshine has complied with, is not in violation of, any Legal Requirements with respect to the conduct of its business, or the ownership or operation of its business, except for failures to comply or violations that, individually or in the aggregate, have not had and are not reasonably likely to have a Material Adverse Effect on Sunshine. The businesses and activities of Sunshine have not been and are not being conducted in violation of any Legal Requirements. Sunshine is not in default or violation of any term, condition or provision of any applicable Charter Documents or Contracts. Neither Sunshine nor the Shareholders have received any notice of non-compliance with any Legal Requirement (and the Shareholders have no Knowledge of any such notice delivered to any other Person). The Shareholders are not in violation of any term of any contract or covenant (either with Sunshine or another entity) relating to employment, patents, proprietary information disclosure, non-competition or non-solicitation.

 

2.10

Financial Statements of Sunshine .

 

(a)       Sunshine has delivered to MWBS copies of its unaudited balance sheets and unaudited statements of income for the period from its inception ( August 17, 2009) through the date hereof. The Sunshine Financial Statements present fairly the financial condition and results of operations of Sunshine at the dates and for the periods covered by the Sunshine Financial Statements. Sunshine represents and warrants that there has been no material adverse change in the financial condition of Sunshine from that stated in Sunshine Financial Statements.

(b)       The Sunshine Financial Statements and any notes related thereto comply as to form in all material respects with applicable accounting requirements, have been prepared in accordance with United States generally accepted accounting principles (“ GAAP ”) applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto) and fairly present in all material respects (subject, in the case of the unaudited interim financial statements, to normal, recurring year-end adjustments none of which are or will be material in amount, individually or in the aggregate) the consolidated financial position of Sunshine as at the dates thereof and the consolidated results of their operations and cash flows for the periods then ended.

(c)       Sunshine does not have any direct or indirect liabilities that were not fully and adequately reflected or reserved against on the balance sheet or described in the notes to the audited financial statements of Sunshine. Sunshine has no Knowledge of any circumstance, condition, event or arrangement that has taken place at any time that may hereafter give rise to any liabilities.

          2.11              No Undisclosed Liabilities . Sunshine has no liabilities (absolute, accrued, contingent or otherwise) of a nature required to be disclosed on a balance sheet or in the related

 

 

notes to the financial statements which are, individually or in the aggregate, material to the business, results of operations or financial condition of Sunshine.

 

          2.12              Litigation . There are no claims, suits, actions, proceedings pending or, to Shareholder’s Knowledge, threatened against Sunshine, before any court, governmental department, commission, agency, instrumentality or authority, or any arbitrator that seeks to restrain or enjoin the consummation of the transactions contemplated by this Agreement or which could reasonably be expected, either singularly or in the aggregate with all such claims, actions or proceedings, to have a Material Adverse Effect on Sunshine or have a Material Adverse Effect on the ability of the parties hereto to consummate the Transaction.

 

          2.13              Restrictions on Business Activities . There is no agreement, commitment, judgment/, injunction, order or decree binding upon Sunshine or to which Sunshine is a party which has or could reasonably be expected to have the effect of prohibiting or materially impairing any business practice of Sunshine, any acquisition of property by Sunshine or the conduct of business by Sunshine as currently conducted other than such effects, individually or in the aggregate, which have not had and could not reasonably be expected to have a Material Adverse Effect on Sunshine.

 

          2.14              Title to Property . Other than as described in Schedule 2.15 hereto, Sunshine owns no other properties.

 

          2.15             Taxes . Definition of Taxes . For the purposes of this Agreement, "Tax" or "Taxes" refers to any and all federal, state, local and foreign taxes, including, without limitation, gross receipts, income, profits, sales, use, occupation, value added, ad valorem, transfer, franchise, withholding, payroll, recapture, employment, excise and property taxes, assessments, governmental charges and duties together with all interest, penalties and additions imposed with respect to any such amounts and any obligations under any agreements or arrangements with any other person with respect to any such amounts and including any liability of a predecessor entity for any such amounts. Sunshine has not been required to file any tax returns as of the date hereof.

 

          2.16             Brokers; Third Party Expenses . The Shareholders have not incurred, nor will they incur, directly or indirectly, any liability for brokerage or finders' fees or agent's commissions or any similar charges in connection with this Agreement or any transaction contemplated hereby.

 

          2.17              Intellectual Property . For the purposes of this Agreement, the following terms have the following definitions:

 

                         "Intellectual Property" shall mean any or all of the following and all worldwide common law and statutory rights in, arising out of, or associated therewith: (i) patents and applications therefore and all reissues, divisions, renewals, extensions, provisionals, continuations and continuations-in-part thereof ("Patents"); (ii) inventions (whether patentable or not), invention disclosures, improvements, trade secrets, proprietary information, know how, technology, technical data and customer lists, and all documentation relating to any of the foregoing; (iii) copyrights, copyrights registrations and applications therefore, and all other rights corresponding thereto throughout the world; (iv) domain names, uniform resource locators ("URLs") and other names and locators associated with the Internet ("Domain Names"); (v) industrial designs and any registrations

 

 

and applications therefore; (vi) trade names, logos, common law trademarks and service marks, trademark and service mark registrations and applications therefore (collectively, "Trademarks"); (vii) all databases and data collections and all rights therein; (viii) all moral and economic rights of authors and inventors, however denominated, and (ix) any similar or equivalent rights to any of the foregoing (as applicable).

 

                          "Company Intellectual Property" shall mean any Intellectual Property that is owned by, or exclusively licensed to, Sunshine or MWBS, as applicable.

 

                          "Registered Intellectual Property" means all Intellectual Property that is the subject of an application, certificate, filing, registration or other document issued, filed with, or recorded by any private, state, government or other legal authority.

 

                          "Company Registered Intellectual Property" means all of the Registered Intellectual Property owned by, or filed in the name of, Sunshine or MWBS, as applicable.

 

                          "Company Products" means all current versions of products or service offerings of Sunshine or MWBS, as applicable.

 

                         (a) No Company Intellectual Property or Company Product is subject to any material proceeding or outstanding decree, order, judgment, contract, license, agreement or stipulation restricting in any manner the use, transfer or licensing thereof by Sunshine, or which may affect the validity, use or enforceability of such Company Intellectual Property or Company Product, which in any such case could reasonably be expected to have a Material Adverse Effect on Sunshine.

 

                         (b) Sunshine owns and has good and exclusive title to, each material item of Company Intellectual Property owned by it free and clear of any Liens (excluding non-exclusive licenses and related restrictions granted in the ordinary course); and Sunshine is the exclusive owner of all material Trademarks used in connection with the operation or conduct of the business of Sunshine, including the sale of any products or the provision of any services by Sunshine.

 

                         (c) The operation of the business of Sunshine as such business currently is conducted, including (i) the design, development, manufacture, distribution, reproduction, marketing or sale of the products or services of Sunshine (including Products), and (ii) Sunshine's use of any product, device or process, to Sunshine's Knowledge and except as could not reasonably be expected to have a Material Adverse Effect, has not and does not and will not infringe or misappropriate the Intellectual Property of any third party or constitute unfair competition or trade practices under the laws of any jurisdiction.

 

2.18

Agreements, Contracts and Commitments .

 

                         (a) Schedule 2.19 hereto sets forth a complete and accurate list of all Material Contracts (as hereinafter defined), specifying the parties thereto. For purposes of this Agreement:

 

                          "Contracts" shall mean all contracts, agreements, leases, mortgages, indentures, note, bond, liens, license, permit, franchise, purchase orders, sales orders, arbitration awards,

 

 

judgments, decrees, orders, documents, instruments, understandings and commitments, or other instrument or obligation (including without limitation outstanding offers or proposals) of any kind, whether written or oral, to which Sunshine is a party or by or to which any of the properties or assets of Sunshine may be bound, subject or affected (including without limitation notes or other instruments payable to Sunshine).

 

                          "Material Contracts" shall mean (x) each Contract (I) providing for payments (past, present or future) to Sunshine in excess of $50,000 in the aggregate or (II) under which or in respect of which Sunshine presently has any liability or obligation of any nature whatsoever (absolute, contingent or otherwise) in excess of $50,000, (y) each Contract which otherwise is or may be material to the businesses, operations, assets, condition (financial or otherwise) or prospects of Sunshine and (z) without limitation of subclause (x) or subclause (y), each of the following Contracts:

 

                                     (i) any mortgage, indenture, note, installment obligation or other instrument, agreement or arrangement for or relating to any borrowing of money by or from Sunshine, any Subsidiary, or any officer, director or 5% or more stockholder ("Insider") of Sunshine;

 

                                     (ii) any guaranty, direct or indirect, by Sunshine or any Insider of Sunshine of any obligation for borrowings, or otherwise, excluding endorsements made for collection in the ordinary course of business;

 

                                     (iii) any Contract made other than in the ordinary course of business or (x) providing for the grant to any preferential rights to purchase or lease any asset of Sunshine, or (y) providing for any right (exclusive or non-exclusive) to sell or distribute, or otherwise relating to the sale or distribution of, any product or service of Sunshine;

 

                                     (iv) any obligation to register any Shares or other securities of Sunshine with the U.S. Securities and Exchange Commission ("SEC") or any state securities commission or agency;

 

                                     (v) any obligation to make payments, contingent or otherwise, arising out of the prior acquisition of the business, assets or stock of other Persons;

 

                                     (vi) any collective bargaining agreement with any labor union;

 

                                     (vii) any lease or similar arrangement for the use by Sunshine of Personal Property; and

 

                                     (viii) any Contract to which any Insider of Sunshine is a party.

 

                         (b) Each Contract was entered into at arms' length and in the ordinary course, is in full force and effect and is valid and binding upon and enforceable against each of the parties thereto. True, correct and complete copies of all Material Contracts (or written summaries in the case of oral Material Contracts) and of all outstanding offers or proposals of Sunshine have been heretofore delivered to MWBS.

 

 

 

                         (c) Neither Sunshine nor any other party thereto is in breach of or in default under, and no event has occurred which with notice or lapse of time or both would become a breach of or default under, any Contract, and no party to any Contract has given any notice of any claim of any such breach, default or event, which, individually or in the aggregate, are reasonably likely to have a Material Adverse Effect on Sunshine. Each Contract to which Sunshine is a party or by which it is bound that has not expired by its terms is in full force and effect, except where such failure to be in full force and effect is not reasonably likely to have a Material Adverse Effect on Sunshine.

 

          2.19          Interested Party Transactions . No employee, officer, director or Shareholder of Sunshine or a Shareholder of his immediate family is indebted to Sunshine, nor is Sunshine indebted (or committed to make loans or extend or guarantee credit) to any of them, other than (i) for payment of salary for services rendered, (ii) reimbursement for reasonable expenses incurred on behalf of Sunshine, and (iii) for other employee benefits made generally available to all employees. To each Shareholder’s Knowledge, none of such individuals has any direct or indirect ownership interest in any Person with whom Sunshine is affiliated or with whom Sunshine has a contractual relationship, or any Person that competes with Sunshine, except that each employee, Shareholder, officer and director of Sunshine and Shareholder of their respective immediate families may own less than 5% of the outstanding stock in publicly traded companies that may compete with Sunshine. To each Shareholder’s Knowledge, no manager or Shareholder or any Shareholder of their immediate families is, directly or indirectly, interested in any material contract with Sunshine (other than such contracts as relate to any such individual ownership of Shares or other securities of Sunshine).

 

             2.20         Representations and Warranties Complete . The representations and warranties of the Shareholders included in this Agreement and any list, statement, document or information set forth in, or attached to, any Schedule provided pursuant to this Agreement or delivered hereunder, are true and complete in all material respects and do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements contained therein not misleading, under the circumstance under which they were made.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES OF MWBS

 

          Except as set forth on the disclosure schedules, MWBS hereby represents and warrants to Sunshine and the Shareholders as follows:

 

3.1       Organization and Qualification; MWBS is a corporation, duly incorporated or organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or organization, has requisite power and authority and governmental approvals to own, lease and operate its properties and to carry on its business as currently conducted. MWBS is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the ownership or leasing of its property or the conduct of its business requires such qualification

 

 

or licensing, except where the failure to be so qualified or licensed or in good standing would not, individually or in the aggregate, have a Material Adverse Effect on MWBS.

 

3.2       Authority to Execute and Perform Agreement . MWBS has the requisite power and all authority required to enter into, execute and deliver this Agreement and the Transaction Documents to which it is a party, to perform its obligations hereunder and thereunder and to consummate the Transaction. The execution, delivery and performance of this Agreement and the consummation of the Transaction have been duly authorized by all necessary corporate action.

 

3.3       Binding Effect . This Agreement has been validly executed and delivered by MWBS and, assuming the due execution and delivery hereof by Sunshine, constitutes a valid and binding obligation of MWBS, enforceable against MWBS in accordance with its terms, except to the extent such enforceability may be limited by (i) bankruptcy, insolvency, reorganization, moratorium or other similar laws of general applicability affecting or relating to enforcement of creditors’ rights generally, and (ii) general equitable principles (regardless of whether such enforceability is considered in equity or at law).

 

3.4

Capitalization .

                               (a)       As of the date hereof, the authorized capital stock of MWBS consists of (i) Fifty Million (50,000,000)shares of common stock, par value $0.001 per share, of which Nine Million Three Hundred Eighty-Eight Thousand (9,388,000) shares of Common Stock are issued and outstanding, all of which are validly issued, fully paid and non-assessable, and all of which have been issued and granted in compliance with all applicable securities laws and (in all material respects) other applicable Legal Requirements and all requirements set forth in applicable Contracts; and (ii) One Million (1,000,000)shares of Preferred Stock, par value $.10 per share, of which none are issued and outstanding. MWBS has no other authorized, issued or outstanding class of capital stock. Prior to Effectiveness of this Agreement an aggregate of 8,500,000 shares of MWBS’s Common Stock will be surrendered back to MWBS so that immediately prior to the Effective Date there will be 888,000 shares of MWBS Common Stock issued and outstanding.

 

(b)        Obligations . There are no obligations, contingent or otherwise, of MWBS to repurchase, redeem or acquire shares of MWBS.

 

(c)        Options, Warrants, etc . Other than included in Schedule 3.4(c) hereto, there are no existing options, rights, subscriptions, warrants, unsatisfied preemptive rights, calls or commitments relating to (i) the authorized and unissued capital stock of MWBS, or (ii) any securities or obligations convertible into or exchangeable for, or giving any Person any right to subscribe for or acquire from MWBS any shares of capital stock of MWBS and no such convertible or exchangeable securities or obligations are outstanding.

 

(d)        Registration . The outstanding shares of the capital stock of MWBS have been issued in full compliance with the registration and prospectus delivery requirements of the Securities Act or in compliance with applicable exemptions therefrom, and the registration and qualification requirements of all applicable securities laws of states of the United States.

 

 

 

(e)        MWBS Shares . The MWBS Shares, when issued as provided in this Agreement, will be duly authorized and validly issued, fully paid and nonassessable, and will be free of any Liens or encumbrances and of restrictions on transfer, other than restrictions on transfer under applicable state and federal securities laws or the Transaction documents.

 

3.5       Board Approval . The Board of Directors of MWBS, by resolutions duly adopted at a meeting duly called and held at which a quorum was present or by the unanimous written consent in lieu of such a meeting, has approved this Agreement and the Transaction in accordance with the requirements of the State of Colorado.

 

 

3.7       No Material Adverse Change . There has been no change in the business, properties, assets, operations or condition (financial or otherwise) which has resulted or reasonably could be expected to result in or which MWBS has reason to believe could reasonably be expected to result in a Material Adverse Effect on it, and MWBS has no Knowledge of any such change that is threatened, nor has there been any damage, destruction or loss affecting the assets, properties, business, operations or condition (financial or otherwise), whether or not covered by insurance which has resulted or reasonably could be expected to result in or which MWBS has reason to believe could reasonably be expected to result in a Material Adverse Effect on MWBS.

 

3.8       Books and Records . The books and records, financial and otherwise, of MWBS are in all material respects complete and correct and have been maintained in accordance with sound business and bookkeepin