STOCK SALE AND PURCHASE AGREEMENT

 

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This STOCK SALE AND PURCHASE AGREEMENT (the "Agreement") dated as of June 29, 2010 is entered into by and between Qufu Natural Green Engineering Co., Ltd., a Chinese limited liability company (“Seller”) and a wholly owned subsidiary of Sunwin International Neutraceuticals, Inc. (the “Company”), Shengya Veterinary Medicine Co., Ltd., a limited liability company organized under the laws of the Peoples’ Republic of China (“Shengya”), and Mr. Laiwang Zhang (the "Buyer"), a Chinese citizen and the President and Chairman of the Company.

WHEREAS, the Seller owns 100% of the ownership interests in Shengya (the “Shengya Interest”).

WHEREAS, Shengya manufactures and sells a variety of veterinary medicines in China (the “Business”) that historically represents less than 20% of the total revenues of the Company and represented approximately 12% of the total revenues of the Company in fiscal year ended April 30, 2010 compared to 16.7% in the fiscal year ended April 30, 2009.

WHEREAS, The Company has determined to streamline its product offerings to focus on its core business of producing and selling stevia and other herb-based products including herb extracts, herb medicines.

WHEREAS, the Seller has determined to exit all business activities related to the Business and sell its 100% interest in Shengya to the Buyer.

WHEREAS, Buyer is the President and Chairman of the Company, the parent company of the Seller.

WHEREAS, Buyer is desirous of acquiring the Shengya Interest and the Business.

WHEREAS, Seller desires to convey, sell and assign to Buyer all of Seller’s right, title and interest in and to the Shengya Interest upon the terms and conditions contained in this Agreement.

NOW THEREFORE, in consideration of the mutual promises and other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties agree as follows:

1.           Recitals.  The foregoing recitals are true and correct.

2.           Purchase Price.  Subject to the terms and conditions of this Agreement, Buyer shall acquire 100% of the ownership interests in Shengya (the “Shengya Interest “) by cancelling the number of shares of the Company’s common stock, $.001 par value computed as follows:  divide (x) the net book value of Shengya’s assets (total assets minus total liabilities) as set forth on its consolidated balance sheet as of April 30, 2010 as set forth on Exhibit “A” to this Agreement by the average of the closing price of the Company’s common stock over the 10 trading days prior to the date of this Agreement (the “ ;Purchase Price”).

 

3.           Representations and Warranties of Shengya, Seller and the Company.

3.1           Organization and Good Standing.  Shengya is a Chinese limited liability company duly formed, validly existing and in good standing under the laws of its jurisdiction of formation, with full corporate power and authority to own, lease and operate its business and properties and to carry on business in the places and in the manner as presently conducted or proposed to be conducted.

3.2           Authority and Enforcement.  Shengya, Seller and the Company have all requisite corporate power and authority to execute and deliver this Agreement, and to consummate the transactions contemplated hereby. Shengya, Seller and the Company have taken all corporate action necessary for the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, and this Agreement constitutes the valid and binding obligation of Shengya, Seller and the Company, enforceable against them in accordance with its terms, except as may be affected by bankruptcy, insolvency, moratoria or other similar laws affecting the enforcement of creditors’ rights generally and subjec t to the qualification that the availability of equitable remedies is subject to the discretion of the court before which any proceeding therefor may be brought.

3.3           Capitalization of Shengya.  The registered capital of Shengya is RMB 3,000,000.  One hundred (100%) of the ownership interests in the Company are owned by the Seller.

4.           Representations and Warranties of Buyer.

4.1           Good Standing. Buyer is a Chinese citizen with full power and authority to own, lease and operate properties and to carry on business under the laws of Peoples’ Republic of China.

4.2           Authority and Enforcement.  Buyer has all requisite power and authority to execute and deliver this Agreement, and to consummate the transactions contemplated hereby.  This Agreement constitutes the valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms, except as may be affected by bankruptcy, insolvency, moratoria or other similar laws affecting the enforcement of creditors’ rights generally and subject to the qualification that the availability of equitable remedies is subject to the discretion of the court before which any proceeding therefor may be brought.

4.3           Good Title to the Shengya Interest.  The Seller has good and marketable title to the Shengya Interest, free and clear of all liens, pledges, options, claims, title defects, encumbrances, charges and other restrictions of every kind (collectively, the “Liens”).  There are no unpaid taxes or other matters which are or could become a Lien on the Shengya Interest.

4.3           Information on the Buyer and Shengya’s Business.  The Buyer has served as the Chairman of Shengya and the Seller since January 2003 and the President and Chairman of the Company since April 2004. The Buyer has had access to such other information concerning the business of Shengya and its operations, financial condition and other matters as the Buyer deemed necessary to enable Buyer to thoroughly investigate Shengya and all aspects of the transaction set forth in this Agreement.  Buyer has determined that Shengya’s Business and financial affairs are satisfactory to Buyer in all respects.  Buyer has and will rely solely on Buyer's own independent investigations a nd inspections of Shengya and Buyer has not relied and will not rely on any representation of Seller, Shengya or the Company other than as expressly set forth in this Agreement. Buyer further acknowledges and agrees that, except for the specific representations made by Seller in this Agreement, Seller, Shengya or the Company have made no representations, are not willing to make any representations, nor held out any inducements to Buyer, other than those (if any) exclusively set forth in this Agreement; and Seller, Shengya or the Company is not and shall not be liable or bound in any manner by any express or implied warranties, guaranties, statements, representations or information pertaining to Shengya, except as may be specifically set forth in this Agreement.

 

4.4           Information on the Company.  The Buyer has been furnished with or has had access at the EDGAR Website of the Securities and Exchange Commission (the “Commission”) to the Company’s Form 10-K for the fiscal year ended April 30, 2009 and all periodic and current reports filed with the Commission thereafter (the “Reports”).  In addition, the Buyer has received in writing from the Company such other information concerning its operations, financial condition and other matters as the Buyer may have requested in writing (such other information is collectively, the “Other Written Information”).