SECOND AMENDMENT TO STOCK SALE AGREEMENT
SECOND
AMENDMENT TO STOCK SALE AGREEMENT
THIS
SECOND AMENDMENT (the “Second Amendment”) is made effective as of November 18,
2008 by and between Sunwin International Neutraceuticals, Inc., a Nevada
corporation, (“Sunwin International”) and Shandong Shengwang Group Co., Ltd. a
limited liability company organized under the laws of the Peoples Republic of
China (“Shandong Shengwang”). Sunwin International and Shandong
Shengwang may collectively be referred to as the “Parties”.
BACKGROUND
A. Shandong
Shengwang and Sunwin International are the parties to that certain Stock Sale
and Purchase Agreement dated as of June 30, 2008 (the "Agreement");
B. The
Agreement was amended as of September 2, 2008 (the “Amendment”) to adjust the
Purchase Price of the Qufu Shengwang Interest to reflect a reduction in the net
tangible assets of Qufu Shengwang from $11,693,666 to $10,334,022 as a result of
the application of generally accepted accounting principles in the United States
(“US GAAP”) required to eliminate the difference between the fair market value
and cost basis of the land use rights that were recorded by Qufu Shengwang in
its financial statements prior to completion of an audit to its financial
statements as of April 30, 2008;
C. Subsequent to the
Amendment, Qufu Shengwang adjusted its balance sheet to eliminate certain
inventory in the amount of $698,115 and a patent that was included in its
intangible assets valued at $2,924,489 (the “Balance Sheet Adjustments”)
resulting in net assets in Qufu Shengwang of $6,711,418 as of April 30, 2008;
and
D. As
a result of the Balance Sheet Adjustments and to clarify that the reference to
"net tangible assets" in the Agreement and the Amendment was intended to refer
to "net assets", the parties agreed to amend certain parts of the Agreement and
the Amendment as set forth below.
NOW, THEREFORE, in consideration of the
execution and delivery of the Agreement, the Amendment and the Second Amendment
and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree as
follows:
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1.
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Section
1 of the Amendment is hereby deleted in its entirety and replaced with the
following:
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1. CONSIDERATION
(a) Subject
to the terms and conditions of this Agreement, Sunwin International shall
acquire a number of shares of Sunwin International’s Common Stock (the “Revised
Purchased Shares”) calculated by dividing: (i) $4,026,851, which is equal to 60%
of the value of the net assets of Qufu Shengwang of $6,711,418 as of April 30,
2008 after giving effect to the Balance Sheet Adjustments and as determined by
an independent audit prepared in accordance with US GAAP; by (ii) the average
closing price of Sunwin International’s common stock on the OTC Bulletin Board
over the 20 day period preceding the date of this Amendment which amount is
$0.21 (the “Revised Purchase Price”). Within 20 days from the date of
the Second Amendment, Shandong Shengwang agrees to cancel a total of 10,350,296
shares of Sunwin International’s common stock which represents the difference
between 29,525,776 (the Purchased Shares as set forth in the Amendment) and
19,175,480 (the Revised Purchased Shares provided for in the Second
Amendment). In addition, Sunwin International will refund to Shandong
Shengwang the sum of $2,173,562 which represents the difference between
$6,200,413 (the Purchase Price set forth in the Amendment) and $4,026,851 (the
Revised Purchase Price set forth in the Second Amendment).
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2.
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This
Amendment shall be deemed part of, but shall take precedence over and
supersede any provisions to the contrary contained in the Agreement. All
initial capitalized terms used in this Amendment shall have the same
meaning as set forth in the Agreement unless otherwise
provided. Except as specifically modified hereby, all of the
provisions of the Agreement which are not in conflict with the terms of
this Amendment shall remain in full force and
effect.
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SIGNATURE
PAGE FOLLOWS
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IN
WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date
first above written.
| Shandong Shengwang Group Co., Ltd. | Sunwin International Neutraceuticals, Inc. | |||
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By:
/s/ Xxx Xx
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By:
Xxx Xx
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Name:
Xxx Xx
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Name:
Xxx Xx
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Title:
General Manager
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Title:
General Manager
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