ACQUISITION AGREEMENT
THIS
ACQUISITION AGREEMENT (the "Agreement") is made and entered as of March 25,
2009, by and among Qufu Natural Green Engineering Co., Ltd., a limited liability
company organized under the laws of the Peoples Republic of China (“Buyer”),
Qufu Shengren Pharmaceutical Co., Ltd., a limited liability company organized
under the laws of the Peoples Republic of China (“Qufu Shengren”), and the
shareholders of Qufu Shengren listed on the signature page to this Agreement
(the “Shareholders”).
RECITALS
A. Qufu
Shengren is a limited liability company organized under the laws of the Peoples
Republic of China.
B. The
Shareholders own an interest in Qufu Shengren in an amount listed next to their
name on the signature page to this Agreement and collectively own and hold a
100% interest in Qufu Shengren (the “Qufu Shengren Interest”).
C. Buyer
desires to acquire the Qufu Shengren Interest and the Shareholders desire to
sell to Buyer their interest in Qufu Shengren for a total price of $3,097,242,
which represents 100% of the value of the net tangible assets of Qufu Shengren
as of December 30, 2008 as determined by an independent asset appraiser in
accordance with government-issued assets appraisal principles in
China. Buyer will acquire such Qufu Shengren Interest in exchange for
cash at Closing (the “Cash Consideration”), as hereinafter defined and in
accordance with the terms and conditions set forth in this
Agreement.
D. Qufu
Shengren is doing business in China and related territories with the following
address:
6
Shengwang Ave
Qufu,
Shandong, China
Tel:
(00000) 000-0000
Fax:
(00000) 000-0000
NOW,
THEREFORE, in consideration of the mutual covenants, agreements, representations
and warranties contained in this Agreement, the parties hereto agree as
follows:
1. CONSIDERATION
Subject
to the terms and conditions of this Agreement, Buyer shall acquire the Qufu
Shengren Interest for a total consideration of $3,097,242 in cash, which amount
represents 100% of the value of the net tangible assets of Qufu Shengren as of
December 30, 2008 as determined by an independent asset appraiser in accordance
with government-issued assets appraisal principles in China, payable in cash at
Closing (the “Purchase Price”). The purchase price shall be paid to
the Shareholders in proportion to their ownership interest in Qufu Shengren as
set forth on the signature page to this Agreement.
2. CLOSING
a. The
closing shall take place not later than April 30, 2009 (the
“Closing”). The parties agree that, subject to the Closing, the
acquisition of the Qufu Shengren shall be effective as of March 25,
2009.
b. Procedure at the
Closing. At the Closing, the parties agree to take the
following steps in the order listed below (provided, however, that upon their
completion all of these steps shall be deemed to have occurred
simultaneously):
(i) Buyer and/or an
affiliate of Buyer as determined by Buyer shall deliver the Purchase Price to
Qufu Shengren; and
(ii) The
Shareholders will transfer their 100% interest in Qufu Shengren to Buyer by
delivery of the Qufu Shengren Interest and execution of such documentation as
may be reasonably requested by Buyer.
3. REPRESENTATIONS AND
WARRANTIES OF QUFU SHENGREN AND THE SHAREHOLDERS
Qufu
Shengren and the Shareholders hereby represent and warrant as
follows:
a. Organization and Good
Standing and Ownership of Qufu Shengren. Qufu Shengren is duly
organized, validly existing and in good standing under the laws of the Peoples
Republic of China, and is entitled to own or lease its properties and to carry
on its business in the places where such properties are now owned, leased or
operated and as such business is now conducted. Qufu Shengren is duly
licensed or qualified and in good standing as a Chinese company of limited
liabilities where the character of the properties owned by it or the nature of
the business transacted by it make such licenses or qualifications
necessary. There are no outstanding subscriptions, rights, options,
warrants or other agreements obligating either Qufu Shengren to issue, sell or
transfer any ownership interest in Qufu Shengren or an ownership of the assets
of Qufu Shengren. The Shareholders have no relationship with Buyer
and its parent company Sunwin International Neutraceuticals, Inc., a Nevada
corporation or its executive officers or directors.
a. Asset Appraisal Report,
Books and Records. Qufu Shengren has delivered to Buyer the
assets appraisal report and schedules of fixed assets of Qufu Shengren as of
December 30, 2008 as determined by an independent asset appraiser in accordance
with government-issued assets appraisal principles in China (the "Qufu Shengren
Asset Appraisal "). The Qufu Shengren Asset Appraisal is true and
accurate and fairly represents the value of the assets of Qufu Shengren as of
December 30, 2008, and has been prepared in accordance with government-issued
assets appraisal principles in China. Since December 30, 2008 there
have been no material changes in the assets of Qufu Shengren.
b. Taxes. Qufu
Shengren has prepared and filed all appropriate tax returns for all periods
prior to and through the date hereof for which any such returns have been
required to be filed by it and has paid all taxes shown to be due by said
returns or on any assessments received by it or has made adequate provision in
its financial statements for the payment thereof.
c. Compliance with
Laws. Qufu Shengren has complied with all applicable laws,
ordinances, regulations, inspections, orders, judgments, injunctions, awards or
decrees applicable to it or its business which, if not complied with, would
materially and adversely affect the business of Qufu Shengren. Qufu
Shengren shall obtain the necessary approvals from the respective regulatory
authority and shall provide such valid license to Buyer.
d. Authority to Execute and
Perform Agreements. Qufu Shengren and the Shareholders have
the full legal right and power and all authority and approval required to enter
into, execute and deliver this Agreement and to perform fully their obligations
hereunder. This Agreement has been duly executed and delivered and is
the valid and binding obligation of , enforceable in accordance with its terms,
except as may be limited by bankruptcy, moratorium, insolvency or other similar
laws generally affecting the enforcement of creditors' rights. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby and the performance by this Agreement, in
accordance with its respective terms and conditions will not:
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i. require
the approval or consent of any governmental or regulatory body, or the approval
or consent of any other person;
ii. conflict
with or result in any breach or violation of any of the terms and conditions of,
or constitute (or with any notice or lapse of time or both would constitute) a
default under, any order, judgment or decree applicable to Qufu Shengren or the
Shareholders, or any instrument, contract or other agreement to
which is a party or by or to which is bound or subject;
or
iii. result in
the creation of any lien or other encumbrance on the assets or properties of
Qufu Shengren or the Shareholders.
e. Actions and
Proceedings. There is no outstanding order, judgment,
injunction, award or decree of any court, governmental or regulatory body or
arbitration tribunal against or involving Qufu Shengren.
f. Tangible
Assets. Qufu Shengren has full title and interest in all
machinery, equipment, furniture, leasehold improvements, fixtures, vehicles,
structures, owned or leased by Qufu Shengren, any related capitalized items or
other tangible property material to the business of Qufu Shengren and as set
forth in the Qufu Shengren Asset Appraisal and as set forth on Schedule A
attached hereto (the "Qufu Shengren Assets"). Qufu Shengren holds all
rights, title and interest in all the Qufu Shengren Assets owned by it or
acquired by it after the date of the Qufu Shengren Asset Appraisal, free and
clear of all liens, pledges, mortgages, security interests, conditional sales
contracts or any other encumbrances.
g. Liabilities. Qufu
Shengren does not have any direct or indirect indebtedness, liability, claim,
loss, damage, deficiency, obligation or responsibility, known or unknown, fixed
or unfixed, liquidated or unliquidated, secured or unsecured, accrued or
absolute, contingent or otherwise, including, without limitation, any liability
on account of taxes, any other governmental charge or lawsuit (all of the
foregoing collectively defined to as "Qufu Shengren Liabilities"), which were
not fully, fairly and adequately reflected on the Qufu Shengren unaudited
balance sheet as of December 30, 2008. Since December 30, 2008 there
have been no material changes in liabilities, outside of the ordinary course of
business.
h. Full
Disclosure. No representation or warranty by Qufu Shengren or
the Shareholders in this Agreement or in any document or schedule to be
delivered by them pursuant hereto, and no written statement, certificate or
instrument furnished or to be furnished to Buyer pursuant hereto or in
connection with the negotiation, execution or performance of this Agreement,
contains or will contain any untrue statement of a material fact or omits or
will omit to state any fact necessary to make any statement herein or therein
not materially misleading or necessary to a complete and correct presentation of
all material aspects of the business of Qufu Shengren.
4. The
Shareholders hereby represent and warrant that the Shareholders collectively are
the beneficial owners of record of the Qufu Shengren Interest, which ownership
interest is free and clear of all rights, claims, liens and encumbrances, and
has not been sold, pledged, assigned or otherwise transferred except pursuant to
this Agreement. The total registered and authorized capital of Qufu
Shengren is $3,700,000, which has been contributed by and is solely owned by the
Shareholders.
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5. REPRESENTATIONS AND
WARRANTIES OF BUYER
Buyer
hereby represents and warrants to Qufu Shengren and the Shareholders as
follows:
b. Organization and Good
Standing. Buyer is a limited liability company duly
organized, validly existing and in good standing under the laws of the Peoples
Republic of China and is entitled to own or lease its properties and to carry on
its business as and in the places where such properties are now owned, leased,
or operated and such business is now conducted and has full corporate power and
authority to perform the transactions and agreements contemplated by this
Agreement.
c. Authorization; Binding
Obligation: Consents; Interested Parties. The execution,
delivery and performance of this Agreement have been authorized by all necessary
corporate, shareholder and legal action on the part of Buyer. This
Agreement has been duly executed and delivered by Buyer and is the legal, valid
and binding obligation of Buyer enforceable against it in accordance with its
terms.
d. No
Breach. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby will
not:
i. violate
any provision of the Articles of Incorporation or By-Laws of Buyer;
ii. violate,
conflict with or result in the breach of any of the terms of, result in a
material modification of, otherwise give any other contracting party the right
to terminate, or constitute (or with notice or lapse of time or both constitute)
a default under, any contract or other agreement to which Buyer is a party or by
or to which it or any of its assets or properties may be bound or
subject;
iii. violate
any order, judgment, injunction, award or decree of any court, arbitrator or
governmental or regulatory body against, or binding upon, Buyer or upon the
properties or business of; or
iv. violate
any statute, law or regulation of any jurisdiction applicable to the
transactions contemplated herein which could have a material adverse effect on
the business or operations of Buyer.
e. Authority to Execute and
Perform Agreements. Buyer has the full legal right and power
and all authority and approval required to enter into, execute and deliver this
Agreement and to perform fully its obligations hereunder. This
Agreement has been duly executed and delivered and is the valid and binding
obligation of , enforceable in accordance with its terms, except as may be
limited by bankruptcy, moratorium, insolvency or other similar laws generally
affecting the enforcement of creditors' rights. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby and the performance by this Agreement, in accordance with its respective
terms and conditions will not:
i. require
the approval or consent of any governmental or regulatory body, the members or
owners of Buyer, or the approval or consent of any other person;
ii. conflict
with or result in any breach or violation of any of the terms and conditions of,
or constitute (or with any notice or lapse of time or both would constitute) a
default under, any order, judgment or decree applicable to Buyer, or any
instrument, contract or other agreement to which is a party or by or
to which is bound or subject; or
iii. result in
the creation of any lien or other encumbrance on the assets or properties of
Buyer.
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f. Full
Disclosure. No representation or warranty in this Agreement or
in any document or schedule to be delivered by it pursuant hereto, and no
written statement, certificate or instrument furnished or to be furnished to
Qufu Shengren or Shandong pursuant hereto or in connection with the execution or
performance of this Agreement contains or will contain any untrue statement of a
material fact or omits or will omit to state any fact necessary to make any
statement herein or therein not materially misleading or necessary to a complete
and correct presentation of all material aspects of the business of
Buyer.
g. Representations and
Warranties at Closing. The representations and warranties
contained in this Section 4 shall be true and complete at the Closing with the
same force and effect as through such representations and warranties had been
made on and as of the Closing Date.
6. MUTUAL COVENANTS OF ALL
PARTIES
a. Corporate Examinations and
Investigations. Prior to the Closing, the parties acknowledge
that they have been entitled, through their employees and representatives, to
make such investigation of the assets, properties, business and operations,
books, records and financial condition of the other as they each may reasonably
require. No investigation by a party hereto shall, however, diminish
or waive in any way any of the representations, warranties, covenants or
agreements of the other party under this Agreement.
b. Expenses. Each
party hereto agrees to pay its own costs and expenses incurred in negotiating
this Agreement and consummating the transactions described herein.
c. Further
Assurances. The parties shall execute such documents and other
papers and take such further actions as may be reasonably required or desirable
to carry out the provisions hereof and the transactions contemplated
hereby. Each such party shall use its best efforts to fulfill or
obtain the fulfillment of the conditions to the satisfaction of each party to
conduct the execution of this Agreement on or before the Closing including,
without limitation, the execution and delivery of any documents or other papers,
the execution and delivery of which are necessary or appropriate to the
Closing.
7. INDEMNIFICATION
a. Obligation of Buyer to
Indemnify. Subject to the limitations on the survival of
representations and warranties contained in Section 3 confirm par number, Buyer
hereby agrees to indemnify, defend and hold harmless Qufu Shengren and the
Shareholders from and against any losses, liabilities, damages, deficiencies,
costs or expenses (including interest, penalties and reasonable attorneys' fees
and disbursements (a "Loss") based upon, arising out of or otherwise due to any
inaccuracy in or any breach of any representation, warranty, covenant or
agreement of contained in this Agreement or in any document or other
writing delivered pursuant to this Agreement.
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b. Obligation of Qufu Shengren
and the Shareholders to Indemnify. Subject to the limitations
on the survival of representations and warranties contained in Section 4, Qufu
Shengren and the Shareholders agree to indemnify, defend and hold harmless Buyer
from and against any Indemnified Liabilities. For this purpose,
“Indemnified Liabilities” shall mean all suits, proceedings, claims, expenses,
losses, costs, liabilities, judgments, deficiencies, assessments, actions,
investigations, penalties, fines, settlements, interest and damages (including
reasonable attorneys’ fees and expenses), whether suit is instituted or not and,
if instituted, whether at any trial or appellate level, and whether raised by
the parties hereto or a third party, incurred or suffered by Buyer, its
officers, directors, employees, agents and affiliates or any of them arising
from, in connection with or as a result of (a) any false or inaccurate
representation or warranty made by or on behalf of Qufu Shengren or Shandong in
or pursuant to this Agreement; or (b) any default or breach in performance of
any of the covenants or agreements made by Qufu Shengren or Shandong in or
pursuant to this Agreement.
8. MISCELLANEOUS
a. Waivers. The
waiver of a breach of this Agreement or the failure of any party hereto to
exercise any right under this Agreement shall in no event constitute a waiver as
to any future breach whether similar or dissimilar in nature or as to the
exercise of any further right under this Agreement.
b. Amendment. This
Agreement may be amended or modified only by an instrument of equal formality
signed by the parties or the duly authorized representatives of the respective
parties.
c. Assignment. This
Agreement is not assignable except by operation of law.
d. Notices. Until
otherwise specified in writing, the mailing addresses of both parties of this
Agreement shall be as follows:
|
Buyer:
0
Xxxxxxxxx Xxx
Xxxx,
Xxxxxxxxx, Xxxxx
|
Qufu
Shengren and the Shareholders:
0
Xxxxxxxxx Xxx
Xxxx,
Xxxxxxxxx, Xxxxx
Tel:
(00000) 000-0000
Fax:
(00000) 000-0000
|
Any
notice, request, information or other document to be given hereunder to any of
the parties by any other party shall be in writing and shall be either hand
delivered, delivered by facsimile, mailed by overnight delivery service or by
registered or certified mail (postage prepaid), return receipt requested, at the
address indicated above or at such other address that shall have been furnished
in writing to the addressor.
e. Governing
Law. This Agreement shall be construed, and the legal
relations between the parties determined, in accordance with the laws of the
Peoples Republic of China, thereby precluding any choice of law rules which may
direct the application of the laws of any other jurisdiction.
f. Entire
Agreement. This Agreement executed in connection with the
consummation of the transactions contemplated herein comprises the entire
agreement among the parties with respect to the acquisition of the Qufu Shengren
Interest and supersedes all prior agreements, written or oral, with respect
thereto.
g. Headings. The
headings in this Agreement are for reference purposes only and shall not in any
way affect the meaning or interpretation of this Agreement.
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h. Severability of
Provisions. The invalidity or unenforceability of any term,
phrase, clause, paragraph, restriction, covenant, agreement or other provision
of this Agreement shall in no way affect the validity or enforcement of any
other provision or any part thereof.
i. Counterparts. This
Agreement may be executed in any number of counterparts, each of which when so
executed, shall constitute an original copy hereof, but all of which together
shall consider but one and the same document.
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IN WITNESS WHEREOF, the
parties have executed this Agreement on the date first above
written.
|
Qufu
Natural Green Engineering Co., Ltd.
By:
/s/ Chengxiang Yan, General
Manager
Chengxiang
Yan, General Manager
|
Qufu
Shengren Pharmaceutical Co., Ltd.
By:
/s/ Xiangsheng Kong, General
Manager
Xiangsheng
Kong, General Manager
|
|
Shareholder
Name
|
Ownership
%
|
|
|
/s/ Lingrong Kong
Lingrong
Kong
|
20%
|
|
|
/s/ Qianfu Yan
Qianfu
Yan
|
20%
|
|
|
/s/ Xxxxxx Xxx
Xxxxxx
Xxx
|
20%
|
|
|
/s/ Xxxxx’e Xxx
Xxxxx’e
Xxx
|
16%
|
|
|
/s/ Wenyang Li
Wenyang
Li
|
8%
|
|
|
/s/ Xiangsheng Kong
Xiangsheng
Kong
|
8%
|
|
|
/s/ Xiangzhu Kong
Xiangzhu
Kong
|
8%
|
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