STOCK SALE AND PURCHASE AGREEMENT
THIS
STOCK SALE AND PURCHASE AGREEMENT (the "Agreement") is made and entered as of
25th day of March 2009 by and among Sunwin International Neutraceuticals, Inc.,
a Nevada corporation, (the “Company”) and the shareholders of Qufu Shengren
Pharmaceutical, Co., Ltd., a limited liability company organized under the laws
of the Peoples Republic of China, including Lingrong Kong, Qianfu Yan, Xxxxxx
Xxx, Xxxxx’e Xxx, Xxxxxxx Xx, Xiangsheng Kong, and Xiangzhu Kong (collectively
the “Buyers”).
RECITALS
A. Sunwin
International Neutraceuticals, Inc. is a Nevada corporation.
B. The
Buyers sold their 100% interest in Qufu Shengren Pharmaceutical Co., Ltd., a
Chinese limited liability Company (“Qufu Shengren”) to the Company’s wholly
owned subsidiary, Qufu Natural Green Engineering Co., Ltd., a Chinese limited
liability company, (“Qufu Natural Green”) for a price equal to $3,097,242 in
cash based upon, in part, the Company’s agreement to sell, and the Buyers’
agreement to buy a total of 21,434,201 shares (the “Shares”) of the
Company’s common stock, $0.001par value (the “Common Stock”) at a
price of $.145 per share for an aggregate price of $3,097,242, payable at the
Exchange and subject to the terms and conditions of this Agreement (the “Qufu
Shengren Sale”);
In order
to complete the Company’s plan to acquire a 100% interest in Qufu Shengren as
part of the Qufu Shengren Sale, the Company shall sell to the Buyers a total of
21,434,201 shares of the Company’s Common Stock at a price of $.145 per share
for an aggregate price of $3,097,242, payable at the Exchange and subject to the
terms and conditions of this Agreement; and
C. The offer
and sale of the Shares shall qualify as a transaction in securities exempt from
registration or qualification under the Securities Act of 1933, as amended, (the
"Act").
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, the Buyers shall acquire a total
of 21,434,201 shares of the Company’s Common Stock at a price of $.145 per share
for a total consideration of $3,097,242 in cash payable at the Exchange (the
“Purchase Price”). The per share purchase price is equal to the
average of the closing price of the Company’s Common Stock as listed on the OTC
Bulletin Board during the five trading days prior to March 25, 2009, less
15%. The Purchase Prices is equal to 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.
2. EXCHANGE
a. The
exchange of the stock for cash shall take place not later than April 30, 2009
(the “Exchange”).
b. Procedure at the
Exchange. At the Exchange, 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) the
Company shall deliver the Shares to the Buyers; and
(ii) the
Buyers will pay the Purchase Price to the Company and execute such documentation
as may be reasonably requested by the Company.
3. REPRESENTATIONS AND
WARRANTIES OF THE COMPANY
The
Company hereby represents and warrants as follows:
a. Organization and Good
Standing and Ownership of Company. The Company is duly
organized, validly existing and in good standing under the laws of the state of
Nevada, 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. The Company is duly licensed
or qualified and in good standing as a Nevada corporation where the character of
the properties owned by it or the nature of the business transacted by it make
such licenses or qualifications necessary. Xxxxxxx Xxxxx is the
President and Chairman of the Board of Directors of the Company which owns Qufu
Natural Green.
b. Capitalization of the
Company. The authorized capital of the Company consists of
1,000,000 shares of preferred stock, $.001 par value, none of which are issued
or outstanding and 200,000,0000 shares of common stock, $.001 par value, of
which 127,679,916 shares are outstanding as of the date
hereof. Additionally, the Company has issued and outstanding
9,199,090 warrants to purchase 9,199,090 shares of common stock with an exercise
price of $0.15 per share and 26,666,666 five-year warrants to purchase
26,666,666 shares of common stock with an exercise price of $0.35 per
share.
c. Common
Stock. The shares of the Company’s Common Stock to be issued
to the Buyers have been duly authorized by all necessary corporate and
stockholder actions and, and when so issued in accordance with the terms of this
Agreement, will be validly issued, fully paid and non-assessable.
d. Information on the
Company. The Buyers have been furnished with or has had access
at the XXXXX Website of the Securities and Exchange Commission (the
“Commission”) to the Company’s 10-KSB (and any amendments thereto) for the
fiscal year ended April 30, 2008 and all periodic and current reports filed with
the Commission thereafter (the “Reports”). In addition, the Buyers
have received in writing from the Company such other information concerning its
operations, financial condition and other matters as the Buyers have requested
in writing (such other information is collectively, the “Other Written
Information”).
e. 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 or similar doctrines
of the Company;
(i) 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 the Company is a party
or by or to which it or any of its assets or properties may be bound or
subject;
(ii) violate
any order, judgment, injunction, award or decree of any court, arbitrator or
governmental or regulatory body against, or binding upon, the Company, or upon
the properties or business of the Company; or
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(iii) violate
any statute, law or regulation of any jurisdiction applicable to the
transactions contemplated herein which could have a materially adverse effect on
the business or operations of the Company.
f. Authority to Execute and
Perform Agreements. The Company 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 shareholder
of the Company, 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 the Company, 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 the
Company.
g. Full
Disclosure. No representation or warranty by the Company 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 the Company 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 the Company.
4. REPRESENTATIONS AND
WARRANTIES OF BUYERS
The
Buyers hereby represent and warrant to the Company as follows:
a. Authorization. The
Buyers have the requisite power and authority to enter into and perform this
Agreement and to purchase the Shares. This Agreement has been duly authorized,
executed and delivered by the Buyers and constitutes, or shall constitute when
executed and delivered, a valid and binding obligation of the Buyers enforceable
against the Buyers in accordance with the terms thereof.
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b. No Conflicts. The
execution, delivery and performance of this Agreement and the consummation by
the Buyers of the transactions contemplated hereby or relating hereto do not and
will not conflict with, or constitute a default (or an event which with notice
or lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of any agreement,
indenture or instrument or obligation to which the Buyers is a party or by which
its properties or assets are bound, or result in a violation of any law, rule,
or regulation, or any order, judgment or decree of any court or governmental
agency applicable to such Buyers or its properties (except for such conflicts,
defaults and violations as would not, individually or in the aggregate, have a
material adverse effect on the Buyers). The Buyers is not required to obtain any
consent, authorization or order of, or make any filing or registration with, any
court or governmental agency in order for it to execute, deliver or perform any
of its obligations under this Agreement or to purchase the Shares in accordance
with the terms hereof, provided that for purposes of the representation made in
this sentence, the Buyers is assuming and relying upon the accuracy of the
relevant representations and agreements of the Company herein.
c. Information on
Buyers. The Buyers (i) are, and will be on the date of the Exchange, an
“accredited investor”, as such term is defined in Regulation D promulgated by
the Commission under the 1933 Act, (ii) is experienced in investments and
business matters, (iii) have made investments of a speculative nature and has
purchased securities of United States publicly-owned companies in private
placements in the past and, (iv) alone or with their representatives, have such
knowledge and experience in financial, tax and other business matters as to
enable the Buyers to utilize the information made available by the Company to
evaluate the merits and risks of and to make an informed investment decision
with respect to the proposed purchase, which represents a speculative
investment. The Buyers are able to bear the risk of such investment for an
indefinite period and to afford a complete loss thereof. The information set
forth on the signature page hereto regarding the Buyers is
accurate.
d. Purchase of Shares.
On the Exchange Date, the Buyers will purchase the Shares as principal for their
own account for investment only and not with a view toward, or for resale in
connection with, the public sale or any distribution thereof, but Buyers do not
agree to hold the Shares for any minimum amount of time.
e. Compliance with Securities
Act. The Buyers understand and agree that the Shares have not been
registered under the 1933 Act or any applicable state securities laws, by reason
of their issuance in a transaction that does not require registration under the
1933 Act (based in part on the accuracy of the representations and warranties of
Buyers contained herein), and that such Shares must be held indefinitely unless
a subsequent disposition is registered under the 1933 Act or any applicable
state securities laws or is exempt from such registration.
Notwithstanding
anything to the contrary contained in this Agreement, such Buyers may transfer
(without restriction and without the need for an opinion of counsel) the Shares
to its Affiliates (as defined below) provided that each such Affiliate is an
“accredited investor” under Regulation D and such Affiliate agrees to be bound
by the terms and conditions of this Agreement. For the purposes of this
Agreement, an “Affiliate” of any person or entity means any other person or
entity directly or indirectly controlling, controlled by or under direct or
indirect common control with such person or entity. Affiliate when employed in
connection with the Company includes each Subsidiary (as defined in Section 5(a)
of this Agreement) of the Company. For purposes of this definition, “control”
means the power to direct the management and policies of such person or firm,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise.
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f. Legends on Shares.
The Shares shall bear the following or similar legend:
“THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THESE SHARES MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAW OR
AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO SUNWIN INTERNATIONAL
NEUTRACEUTICALS, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.”
g. Communication of
Offer. The offer to sell the Shares was directly communicated to the
Buyers by the Company. At no time was the Buyers presented with or solicited by
any leaflet, newspaper or magazine article, radio or television advertisement,
or any other form of general advertising or solicited or invited to attend a
promotional meeting otherwise than in connection and concurrently with such
communicated offer.
h. Authority;
Enforceability. This Agreement and other agreements delivered together
with this Agreement or in connection herewith have been duly authorized,
executed and delivered by the Buyers and are valid and binding agreements
enforceable in accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors’ rights generally and to
general principles of equity.
i. No Governmental
Review. The Buyers understands that no United States federal or state
agency or any other governmental or state agency has passed on or made
recommendations or endorsement of the Shares or the suitability of the
investment in the Shares nor have such authorities passed upon or endorsed the
merits of the offering of the Shares.
j. Survival. The
foregoing representations and warranties shall survive until three years after
the Exchange.
5. MUTUAL COVENANTS OF ALL
PARTIES
a. Corporate Examinations and
Investigations. Prior to the Exchange, 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 Exchange 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
Exchange.
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6. INDEMNIFICATION
a. Obligation of the Company to
Indemnify. Subject to the limitations on the survival of
representations and warranties contained in Section 3, the Company hereby agrees
to indemnify, defend and hold harmless the Buyers 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 the Company contained in this
Agreement or in any document or other writing delivered pursuant to this
Agreement.
b. Obligation of Buyers to
Indemnify. Subject to the limitations on the survival of
representations and warranties contained in Section 4, the Buyers hereby agree
to indemnify, defend and hold harmless the Company 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.
7. 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:
|
The
Company:
0
Xxxxxxxxx Xxx.
Qufu,
Shandong, China 273100
|
Buyers:
0 Xxxxxxxxx
Xxx.Xxxx,
Xxxxxxxx, Xxxxx 000000
|
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
state of Nevada, thereby precluding any choice of law rules which may direct the
application of the laws of any other jurisdiction.
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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 Shares 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.
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.
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/s/ Xxxxxxxx Xxx, Chief Executive
Officer
Xxxxxxxx
Xxx, Chief Executive Officer
|
|
Shareholder
Name
|
Ownership
%
|
|
|
/s/ Lingrong Kong
Lingrong
Kong
|
20%
|
|
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/s/ Qianfu Yan
Qianfu
Yan
|
20%
|
|
|
/s/ Xxxxxx Xxx
Xxxxxx
Xxx
|
20%
|
|
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/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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