SINO-AMERICAN DEVELOPMENT CORPORATION STOCK PURCHASE AGREEMENT
EXHIBIT
10.1
THIS
STOCK PURCHASE AGREEMENT (this “Agreement”) is made as of December 11, 2006 by
and among SINO-American Development Corporation, a Nevada corporation (the
“Company”) and each of the undersigned purchasers identified on the signature
pages hereto and on Schedule
A
attached
hereto (collectively, the “Purchasers”).
WHEREAS,
subject
to the terms and conditions of this Agreement and the other documents or
instruments contemplated hereby:
A.
The
Company desires to sell and issue to Purchasers and Purchasers desires to
purchase from the Company 12,505,000 newly issued shares (the “Shares”) of the
Company’s common stock, par value $0.001 (the “Common Stock”) for an aggregate
subscription price of Twelve Thousand Five Hundred Five dollars ($12,505);
and
B.
After
the Closing (as defined in Section 2), the Company may effect a Spin-Off (as
defined and described more fully in Section 4.1) of the Company’s sole operating
subsidiary.
NOW,
THEREFORE, the parties hereby agree as follows:
Section
1. Purchase
and Sale.
1.1
Shares
to be Purchased and Sold.
On the
terms and subject to the conditions of this Agreement, at the Closing, the
Company shall sell, issue, and deliver to Purchasers, and Purchasers shall
purchase, acquire and accept delivery of fully paid and non-assessable
Shares.
1.2
Purchase
Price.
Subject
to the terms and conditions of this Agreement, as consideration for the Shares,
Purchasers hereby agrees to pay and deliver to the Company’s designated agent,
Etech Securities, Inc., at the Closing an aggregate of Twelve Thousand Five
Hundred Five dollars ($12,505) (the "Purchase Price").
1.3
Review
of Documents.
Purchasers’ purchase of the Shares shall be subject to and conditional upon its
reasonable review of corporate records and documents relating to the Company’s
financial, business and legal condition (“Due Diligence”). The Company
acknowledges that the Purchasers and its representatives, accountants, lenders,
guarantors and counsel, (collectively the "Representatives") shall be entitled
to perform such Due Diligence as the Purchasers and its Representatives deem
necessary prior to the Closing. The Company hereby agrees to promptly provide
Purchasers with such available Due Diligence information as Purchasers and
its
Representatives shall reasonably request, including but not limited to the
Company’s: (i) Articles of Incorporation, (ii) Bylaws, (iii) minutes of Board of
Director meetings, (iv) financial statements, (iv) tax returns, or (v) material
agreements.
1
Section
2. Closing.
2.1
Time
and Place.
The
closing of the purchase and sale of the Shares (the "Closing") shall take place
at the offices of Xxxxxxxxxx & Xxxxx LLP, 00000 Xxxxxxxx Xxxxxxxxx, Xxxxx
000, Xxx Xxxxxxx, Xxxxxxxxxx 00000 on or before December 11, 2006, or such
other
date and time as the parties may mutually agree (the “Closing Date”),
upon
satisfaction of the closing conditions set forth in Section 3 of this
Agreement.
2.2
Escrow.
The
Company agrees to execute and deliver an escrow agreement substantially in
the
form attached as Exhibit A (the “Escrow Agreement”) with a mutually acceptable
escrow agent (“Escrow Agent”) for this transaction, which Escrow Agent shall
hold and distribute the Purchase Price and the Shares as required by the terms
of this Agreement and the Escrow Agreement.
Section
3. Conditions
to Closing.
3.1
Conditions
to Obligations of Purchasers.
The
obligations of Purchasers under this Agreement shall be subject to each of
the
following conditions:
(a)
Closing
Deliveries.
At the
Closing, the Company shall have delivered or caused to be delivered to the
Escrow Agent the following:
(i) this
Agreement, duly executed by the Company;
(ii) the
Registration Rights Agreement referred to in Section 8 below, duly executed
by
the Company;
(iii) a
duly
executed copy of the Assignment and Assumption Agreement referred to in Section
4.1 below;
(iv) a
copy of
the transfer agent instruction letter delivered to Company’s transfer agent
directing the issuance of the Shares to the Purchasers; and
(v) such
other documents as Purchasers or its counsel may reasonably request in
connection with the transactions contemplated hereby.
(b)
Truthfulness
and Accuracy of Representations and Warranties.
The
representations and warranties of the Company contained herein shall be true
in
all material respects at the Closing, with the same effect as though made at
such time. The Company shall have performed in all material respects all
obligations and complied in all material respects with all covenants and
conditions required by this Agreement to be performed or complied with by it
at
or prior to the Closing.
2
(c)
Satisfaction
of Closing Conditions of Related Stock Purchase Agreement.
All of
the Closing conditions set forth in the separate Stock Purchase Agreement of
even date herewith between Purchasers and certain stockholders (the “Selling
Stockholders”) of the Company shall have been fully satisfied.
3.2
Conditions
to Obligations of Company.
The
obligations of the Company under this Agreement shall be subject to each of
the
following conditions:
(a)
Closing
Deliveries.
At the
Closing, the Purchasers shall have delivered or caused to be delivered to the
Escrow Agent the following:
(i) this
Agreement, duly executed by Purchasers;
(ii) the
Purchase Price by wire transfer to the account of the Escrow Agent, as per
the
terms of the Escrow Agreement; and
(iii) such
other documents as the Company or its counsel may reasonably request in
connection with the transactions contemplated hereby.
(b)
Truthfulness
and Accuracy of Representations and Warranties.
The
representations and warranties of the Purchasers contained herein shall be
true
in all material respects at the Closing, with the same effect as though made
at
such time. The Purchasers shall have performed in all material respects all
obligations and complied in all material respects with all covenants and
conditions required by this Agreement to be performed or complied with by it
at
or prior to the Closing.
(c)
Satisfaction
of Closing Conditions of Related Stock Purchase Agreement.
All of
the Closing conditions set forth in the separate Stock Purchase Agreement of
even date herewith between Purchasers and the Selling Stockholders shall have
been fully satisfied.
Section
4. Covenants.
In
connection with the purchase and sale of the Shares, the parties hereby covenant
as follows:
4.1
Spin-Off.
(a)
After
the
Closing, all current assets of the Company shall be transferred to Town House
Land Limited, the Company’s sole operating subsidiary (the “Subsidiary”), and
all of the Company’s liabilities shall be assumed by the Subsidiary.
Contemporaneously with the execution and delivery of this Agreement, the Company
and Subsidiary are executing and delivering an assignment and assumption
agreement pursuant to which the Company and Subsidiary agree to effect the
foregoing transaction (the “Assignment and Assumption Agreement”).
(b)
Immediately
after the closing of any future transaction whereby the Company acquires control
and ownership of another company, the Company shall transfer all of the shares
of the Subsidiary held by the Company to a trust, the beneficiaries of which
shall be the stockholders of the Company immediately prior to Closing (the
“Trust”).
3
(c)
Any
and
all debts, payables and liabilities of Company shall be settled and the Company
shall be free of assets and liabilities as of the closing date of the foregoing
transactions. Collectively, the foregoing transactions in this Section 4.1
are
referred to as the “Spin-Off.”
Section
5. Representations
and Warranties of the Company.
The
Company hereby represents and warrants to Purchasers as follows:
5.1
Organization,
Qualification, and Corporate Power.
(a)
The
Company is a corporation duly organized, validly existing, and in good standing
under the laws of the State of Nevada. The Company has qualified to do business
in all jurisdictions in which it conducts business, where the failure to so
qualify would have a material adverse effect on the Company. The Company has
not
received written notice from any other jurisdiction that qualification may
be
required. The Company is not subject to any actual or contingent liability
for
failure to qualify to do business in any jurisdiction.
(b)
The
Company has one (1) wholly owned subsidiary named Town House Land Limited,
a
limited liability company duly organized, validly existing and in good standing
under the laws of the Hong Kong Special Administrative Region in The People's
Republic of China ("PRC"). On the date hereof, Town House Land Limited owns
97%
of the issued and outstanding shares of registered capital of Town House Land
(Wuhan) Limited, a limited liability company organized in the PRC in the City
of
Wuhan, Hubei Province ("Wuhan Town House"). Wuhan Town House directly owns
100%
of the equity interest in (1) Town House Land (Miami) Corporation, a Florida
corporation, and (2) Town House Land (USA), Inc., a California
Corporation.
5.2
Capitalization.
(a)
On
the
date hereof: (A) the entire authorized capital stock of the Company consists
of:
(i) 150,000,000 of shares of Common Stock and (ii) 50,000,000 shares of the
Company’s preferred stock, par value $0.001 (the “Preferred Stock”), and (B)
there are 28,416,500 shares of Common Stock issued and outstanding. There are
no
shares of Preferred Stock issued and outstanding. There are no shares of Common
Stock held in treasury. At Closing, all of the issued and outstanding shares
of
Common Stock, including the Shares purchased hereunder, are and shall have
been
duly authorized and will be validly issued, fully paid, and non-assessable.
As
of Closing: (i) there will be no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange rights, or
other contracts or commitments that could require the Company to issue, sell,
or
otherwise cause to become outstanding any of its capital stock and (ii) there
will be no outstanding or authorized stock appreciation, phantom stock, profit
participation, or similar rights with respect to the Company.
4
(b)
On
the
date hereof: (A) the entire authorized capital stock of the Subsidiary consists
of 500,000 shares of common stock (the “Subsidiary Shares”), of which all
500,000 shares of common stock are issued and outstanding and held by the
Company. No other Subsidiary Shares are issued and outstanding. At Closing,
all
of the issued and outstanding Subsidiary Shares shall have been duly authorized
and will be validly issued, fully paid, and non-assessable. As of Closing:
(i)
there will be no outstanding or authorized options, warrants, purchase rights,
subscription rights, conversion rights, exchange rights, or other contracts
or
commitments that could require Subsidiary to issue, sell, or otherwise cause
to
become outstanding any of its capital stock and (ii) there will be no
outstanding or authorized stock appreciation, phantom stock, profit
participation, or similar rights with respect to the Subsidiary.
5.3
Authorization
of Transaction.
The
Company has full power and authority (including full corporate power and
authority) to execute and deliver this Agreement or any other document or
instrument contemplated hereby or thereby (collectively, the “Transaction
Documents”), and to perform its obligations under any Transaction Document. The
Transaction Documents constitute valid and legally binding obligations of the
Company, enforceable in accordance with the terms and conditions thereof.
5.4
Noncontravention.
Neither
the execution and the delivery of any Transaction Document, nor the consummation
of the transactions contemplated thereby, will (i) violate any constitution,
statute, regulation, rule, injunction, judgment, order, decree, ruling, charge,
or other restriction of any government, governmental agency, or court to which
either the Company or Subsidiary is subject or any provision of the charter
or
bylaws of the Company or Subsidiary, or (ii) conflict with, result in a breach
of, constitute a default under, result in the acceleration of, create in any
party the right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, instrument, or other
arrangement to which either the Company or Subsidiary is a party or by which
it
is bound or to which any of its assets is subject (or result in the imposition
of any Security Interest upon any of its assets). To the knowledge of the
Company, and other than in connection with the provisions of the Nevada Revised
Statutes, the Securities Exchange Act of 1934 (the “Exchange Act”), the
Securities Act of 1933, as amended (the “Securities Act”), and any state
securities laws, neither the Company nor Subsidiary needs to give any notice
to,
make any filing with, or obtain any authorization, consent, or approval of
any
government or governmental agency in order for the parties to consummate the
transactions contemplated by the Transaction Documents.
5.5
Subsidiaries.
After
giving effect to the Spin-Off, the Company will have no subsidiaries. The
Company’s Board of Directors has approved the Spin-Off of the Subsidiary to its
stockholders and in connection therewith has declared a dividend of all of
the
issued and outstanding stock of the Subsidiary payable to the Company
Stockholders of record as of December 8, 2006. The Spin-Off shall be completed
and the dividend paid by the Company within sixty (60) days following the
Closing Date. Other than its ownership of the Subsidiary, the Company has no
assets. As of the date hereof and the Closing Date, no person or entity has
any
lien, security interest or claim against the Company’s assets, whether now
existing or hereafter acquired.
5
5.6
Litigation.
There
is no action, suit, proceeding, or claim, pending or to the knowledge of the
Company, threatened, and no investigation by any court or government or
governmental agency or instrumentality, domestic or foreign, pending or to
the
knowledge of the Company, threatened, against the Company or the Subsidiary,
nor
is there any outstanding order, writ, judgment, stipulation, injunction, decree,
determination, award, or other order of any court or government or governmental
agency or instrumentality, domestic or foreign, against the Company or the
Subsidiary.
5.7
Material
Adverse Change.
Since
the date of any Transaction Document and up to Closing, other than the actions
contemplated in any Transaction Document prior to Closing, there has been no
(i)
adverse effect on the legality, validity or enforceability of any Transaction
Document, or (ii) material and adverse effect on the results of operations,
assets, business or condition (financial or otherwise) of the Company.
5.8
Listing
of the shares of Common Stock.
The
Company’s Common Stock is listed for trading on the OTC Bulletin Board
(hereinafter referred to as the “OTC”). The Company is in compliance with all
rules, regulations and listing requirements of the OTC. The Company has not
received any notices or other communication with respect to any violations
or
potential violations of any rules, regulations and listing requirements of
OTC.
5.9
Taxes.
The
Company has timely and accurately filed, or caused to be timely and accurately
filed, all tax returns required to be filed by it, and has paid, collected
or
withheld, or caused to be paid, collected or withheld, all amounts of taxes
required to be paid, collected or withheld, other than such Taxes for which
adequate reserves have been established and which are being contested in good
faith. There are no claims or assessments pending against the Company for any
alleged deficiency in any tax, there are no pending or, to the Knowledge of
the
Company, threatened audits or investigations for or relating to any liability
in
respect of any taxes, and the Company has not been notified in writing of any
proposed tax claims or assessments against the Company (other than in each
case,
claims or assessments for which adequate reserves have been established and
which are being contested in good faith). The Company has not executed any
waivers or extensions of any applicable statute of limitations to assess any
amount of taxes. There are no outstanding requests by the Company for any
extension of time within which to file any tax return or within which to pay
any
amounts of taxes shown to be due on any tax return. To the knowledge of the
Company, there are no liens for taxes on the assets of the Company except for
statutory liens for current taxes not yet due and payable. There are no
outstanding powers of attorney enabling any party to represent the Company
with
respect to taxes. Other than with respect to the Company, the Company is not
liable for taxes of any other person or entity, or is not currently under any
contractual obligation to indemnify any person or entity with respect to any
amounts of taxes, or is a party to any tax sharing agreement or any other
agreement providing for payments by the Company with respect to any amounts
of
taxes. The Company has not engaged in any transaction which requires its
participation to be disclosed under Treas. Reg. Sec. 1.6011-4.
6
5.10
Financial
Statements and SEC Filings.
(a)
The
consolidated financial statements (hereinafter referred to collectively as
the
“Company Audited Financial Statements”) of the Company and its consolidated
subsidiaries contained in its Form 10-KSB with respect to the fiscal year ended
December 31, 2005 and 2004, are true and correct and have been prepared in
conformity with GAAP consistently applied throughout the periods to which such
financial statements relate. The Company Audited Financial Statements fairly
present, in all material respects in conformity with such principles as so
applied, the consolidated financial position and results of operations and
cash
flows of the Company, at the dates shown and for the periods therein specified.
The balance sheet constituting a part of the Company Audited Financial
Statements fairly present in all material respects all consolidated liabilities
of the Company, on a consolidated basis, of the types normally reflected in
balance sheets as and at the respective dates thereof.
(b)
The
consolidated financial statements (hereinafter referred to as the “Company
Interim Financial Statements” and, together with the Company Audited Financial
Statements, herein referred to as the “Company Historical Financial Statements”)
of the Company and its consolidated subsidiaries contained in its Form 10-QSB
with respect to the quarters ending March 31, 2006, June 30, 2006 and September
30, 2006 are true and correct and have been prepared in conformity with GAAP
consistently applied throughout the periods to which such financial statements
relate. The Company Interim Financial Statements fairly present in all material
respects in conformity with such principles so applied, the consolidated
financial position and results of operations and cash flows of the Company,
on a
consolidated basis, at the dates shown and for the periods therein specified.
The balance sheets constituting a part of the Company Interim Financial
Statements fairly present, in all material respects, all liabilities of the
Company, on a consolidated basis of the types normally reflected in balance
sheets as and at the respective date thereof.
(c)
The
Company is a reporting company registered under Section 12(g) of the Exchange
Act. The Company has filed on a timely basis all forms, reports and documents
required to be filed with the Securities and Exchange Commission (“SEC”) since
January 1, 2004. All such required forms, reports and documents (including
those
that the Company may file subsequent to the date hereof) are referred to herein
as the “Company SEC Reports.” As of their respective dates, the Company SEC
Reports (i) were prepared in accordance with the requirements of the Securities
Act or the Exchange Act, as the case may be, and the rules and regulations
of
the SEC thereunder applicable to such the Company SEC Reports, and (ii) did
not
at the time they were filed (or if amended or superseded by a filing prior
to
the date of this Agreement, then on the date of such filing) contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. Each
of
the principal executive officer of the Company and the principal financial
officer of the Company (as defined under the Xxxxxxxx-Xxxxx Act of 2002), or
each former principal executive officer of the Company and each former principal
financial officer of the Company, as applicable, has made the certifications
required by Sections 302 and 906 of the Xxxxxxxx-Xxxxx Act of 2002 and the
rules
and regulations of the SEC promulgated thereunder with respect to the Company
SEC Reports pursuant to the Exchange Act, when applicable.
7
(d)
There
has
never been any stop order issued or, to the knowledge of the Company, any
administrative investigation or proceeding undertaken by the SEC with respect
to
the Company and its directors and officers.
5.11
Undisclosed
Liabilities.
Except
otherwise disclosed in this Agreement or disclosed in the Company’s historical
financial statements, the Company does not have any liabilities, whether
accrued, absolute, contingent, or otherwise, whether due or to become due and
whether the amount thereof is readily ascertainable or not, other than
liabilities which, individually or in the aggregate, would not have a material
adverse effect, or any unrealized or anticipated losses from any unfavorable
commitments, other than those which, individually or in the aggregate, would
not
have a material adverse effect.
5.12
Broker’s
Fees.
Neither
the Company nor Subsidiary is a party to any advisory, finder’s or broker’s
agreement with respect to the consummation of the transactions contemplated
by
this Agreement.
5.13
Compliance
with Law.
The
Company and Subsidiary are in material compliance with all laws, ordinances
and
governmental rules and regulations, whether foreign, federal, state or local,
to
which the Company and Subsidiary are subject.
5.14
Assignment
and Assumption.
Upon
Closing and execution and delivery of the Assignment and Assumption Agreement,
the Company (i) will transfer all of its assets and liabilities to the
Subsidiary and (ii) will have no liabilities whatsoever at the parent level.
Section
6. Representations
and Warranties of Purchasers.
6.1
Authority.
The
Purchasers hereby represent and warrant to the Company that Purchasers has
all
requisite power and authority (corporate or otherwise) to execute, deliver
and
perform the Transaction Documents and the transactions contemplated thereby,
and
the execution, delivery and performance by Purchasers of the Transaction
Documents have been duly authorized by all requisite action by Purchasers and
each such Transaction Document, when executed and delivered by Purchasers,
constitutes a valid and binding obligation of Purchasers, enforceable against
Buyer in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other similar
laws affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity).
8
6.2
Investment
and Related Representations.
(a)
Shares
as “Restricted” Securities.
The
Purchasers are aware that neither the Shares nor the offer or sale thereof
to
the Purchasers have been registered under the Securities Act, or under any
foreign or state securities law. The Purchasers acknowledge that the Shares
are
being offered pursuant to certain exemptions from Section 5 of the Securities
Act for offers and sale of securities not involving an issuer, underwriter,
or
dealer. The Purchasers understand that the Shares are “restricted” securities
under U.S. federal securities laws inasmuch as they are being acquired from
an
affiliate of the issuer and that under such laws and applicable regulations
such
securities may be resold without registration under the Securities Act only
in
certain limited circumstances. The Purchasers represent that they are familiar
in general with Rule 144 under the Securities Act (which provides generally
for
a one year holding period and limitations on the amount of “restricted”
securities that can be sold in compliance with the rule upon completion of
the
holding period), and understand the resale limitations imposed thereby and
by
the Securities Act. The Purchasers understand that each certificate representing
the Shares and any other securities issued in respect of the Shares upon any
stock split, stock dividend, recapitalization, merger or similar event (unless
no longer required in the opinion of counsel for the Company) shall be stamped
or otherwise imprinted with legends substantially in the following form (in
addition to any legend that may now or hereafter be required by applicable
state
law):
“THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THEY MAY
NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO SUCH SECURITIES,
OR DELIVERY OF AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF SUCH
SECURITIES THAT SUCH OFFER, SALE, TRANSFER, PLEDGE OR HYPOTHECATION IS IN FULL
COMPLIANCE WITH THE SECURITIES ACT OF 1933, AS AMENDED, OR UNLESS SOLD IN
COMPLIANCE WITH RULE 144 UNDER SUCH ACT.”
The
Purchasers agree that they will not sell any portion of the Shares except
pursuant to registration under the Securities Act or pursuant to an available
exemption from registration under the Securities Act. The Purchasers understand
that the Company shall refuse to transfer the Shares except in accordance with
the restrictions and agreements of the Purchasers set forth in this Section
5.1.
(b)
Investment
Representation.
The
Shares are being acquired by the Purchasers pursuant to this Agreement for
investment and not with a view to the public resale or distribution thereof
unless pursuant to an effective registration statement or exemption under the
Securities Act.
9
(c)
No
Public Solicitation.
The
Purchasers are acquiring the Shares after private negotiation and are not
receiving the Shares as a result of any advertisement, article, notice or other
communication regarding the Shares published in any newspaper, magazine or
similar media or broadcast over television or radio or presented at any seminar
or any other general solicitation or general advertisement.
(d)
Investor
Sophistication and Ability to Bear Risk of Loss.
Each
Purchaser, either alone or together with its representatives, acknowledges
that
it has such knowledge, sophistication and experience in business and financial
matters so as to be capable of evaluating the merits and risks of the
prospective investment in the Shares, and has so evaluated the merits and risks
of such investment. Each Purchaser acknowledges that it is able to bear the
economic risk of an investment in the Shares and, at the present time, is able
to afford a complete loss of such investment.
(e)
Informed
Investment Decision.
The
Purchasers have received all information that they requested from the Company
in
order to make an informed investment decision with respect to the
Shares.
(f)
Purchaser
Status.
At the
time any Purchaser receives any of the Shares, such Purchaser will be an
“accredited investor” as defined in Rule 501 under the Securities
Act.
Section
7. Indemnification.
7.1
Indemnification
by Company.
The
Company hereby agrees to indemnify and hold harmless the Purchasers and its
respective affiliates, officers, directors, partners, members, managers,
stockholders, employees, and agents from and against any and all losses, claims,
damages, judgments, penalties, liabilities, and deficiencies, and agrees to
reimburse the Purchasers for all reasonable out-of-pocket expenses (including
reasonable fees and expenses of legal counsel), in each case promptly as
incurred by the other, to the extent arising out of or in connection with:
(i)
any material misrepresentation, omission, or material breach of any of the
Company’ representations or warranties contained in this Agreement; (ii) any
failure by the Company to perform any of their covenants, agreements,
undertakings, or obligations set forth in this Agreement or any ancillary
agreement hereto, or (iii) any operations of the Company or transactions
involving the Company occurring on or prior to the Closing Date.
7.2
Indemnification
by Purchasers.
The
Purchasers hereby agrees to indemnify and hold harmless the Company and their
respective affiliates, officers, directors, partners, members, managers,
stockholders, employees, and agents from and against any and all losses, claims,
damages, judgments, penalties, liabilities, and deficiencies, and agrees to
reimburse the Company for all reasonable out-of-pocket expenses (including
reasonable fees and expenses of legal counsel), in each case promptly as
incurred by the other, to the extent arising out of or in connection with:
(i)
any material misrepresentation or material breach of any of the Purchasers’
representations or warranties contained in this Agreement; (ii) any failure
by
the Purchasers to perform any of its covenants, agreements, undertakings, or
obligations set forth in this Agreement or any ancillary agreement hereto,
or
(iii) any operations of the Purchasers or transactions involving the Purchasers
occurring on or prior to the Closing Date.
10
Section
8. Registration
Rights.
Contemporaneously
with the execution and delivery of this Agreement, the parties hereto are
executing and delivering a Registration Rights Agreement pursuant to which
the
Company has agreed to provide to Purchasers and certain stockholders of the
Company registration rights under the Securities Act, and the rules and
regulations promulgated there under, and applicable state securities laws.
Section
9. Successors
and Assigns.
This
Agreement shall bind and inure to the benefit of the Company, Purchasers and
their respective successors and assigns.
Section
10. Entire
Agreement.
This
Agreement and the other writings and agreements referred to in this Agreement
or
delivered pursuant to this Agreement contain the entire understanding of the
parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings among the parties with respect
thereto.
Section
11. Notices.
All
notices, demands and requests of any kind to be delivered to any party in
connection with this Agreement shall be in writing and shall be deemed to have
been duly given if (i) personally delivered, (ii) sent by telecopy, electronic
mail or facsimile transmission, (iii) sent by internationally-recognized
overnight courier, or (iv) sent by registered or certified mail, return receipt
requested and postage prepaid, addressed as follows:
If
to the Company, to:
0000
Xxxx
Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxx,
XX 00000
Fax:
(000) 000-0000
Attention:
Xxxx Xxxxx, Chief Executive Officer
If
to Purchasers, to:
RP
Capital, LLC
00000
Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx
Xxxxxxx, XX 00000
Fax:
(000) 000-0000
Attention:
Xxxxx X. Xxxxx, Esq.
11
or
to
such other address as the party to whom notice is to be given may have furnished
to the other parties to this Agreement in writing in accordance with the
provisions of this Section 11. Any such notice or communication shall be deemed
to have been received (i) in the case of personal delivery, telecopy, electronic
mail or facsimile transmission, on the date of such delivery, (ii) in the case
of internationally-recognized overnight courier, on the next business day after
the date when sent and (iii) in the case of mailing, on the third business
day
following that on which the piece of mail containing such communication is
posted.
Section
12. Independence
of Agreements, Covenants, Representations and
Warranties.
All
agreements and covenants hereunder shall be given independent effect so that
if
a certain action or condition constitutes a default under a certain agreement
or
covenant, the fact that such action or condition is permitted by another
agreement or covenant shall not affect the occurrence of such default, unless
expressly permitted under an exception to such covenant. In addition, all
representations and warranties hereunder shall be given independent effect
so
that if a particular representation or warranty proves to be incorrect or is
breached, the fact that another representation or warranty concerning the same
or similar subject matter is correct or is not breached will not affect the
incorrectness of or a breach of a representation and warranty hereunder.
Section
13. Severability.
It
is the
desire and intent of the parties that the provisions of this Agreement be
enforced to the fullest extent permissible under the law and public policies
applied in each jurisdiction in which enforcement is sought. Accordingly, in
the
event that any provision of this Agreement would be held in any jurisdiction
to
be invalid, prohibited or unenforceable for any reason, such provision, as
to
such jurisdiction, shall be ineffective, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of
such
provision in any jurisdiction. Notwithstanding the foregoing, if such provision
could be more narrowly drawn so as not to be invalid, prohibited or
unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so
narrowly drawn, without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any other
jurisdiction.
Section
14. Amendments.
This
Agreement may not be modified or amended, or any of the provisions of this
Agreement waived, except by written agreement of the Company and
Purchasers.
Section
15. Headings.
The
section and paragraph headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation
of
this Agreement.
12
Section
16. Governing
Law.
All
questions concerning the construction, interpretation and validity of this
Agreement shall be governed by and construed and enforced in accordance with
the
domestic laws of California without giving effect to any choice or conflict
of
law provision or rule (whether in the State of California or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of California. In furtherance of the foregoing, the
internal laws of the State of California will control the interpretation and
construction of this Agreement, even if under such jurisdiction's choice of
law
or conflict of law analysis, the substantive law of some other jurisdiction
would ordinarily or necessarily apply. Any action brought under this Agreement
shall be brought in a state or Federal court having competent subject matter
jurisdiction and located in the City of Los Angeles in accordance with the
applicable procedure therefore.
13
Section
17. Counterparts.
This
Agreement may be executed in any number of counterparts, and each such
counterpart of this Agreement shall be deemed to be an original instrument,
but
all such counterparts together shall constitute but one agreement. Facsimile
counterpart signatures to this Agreement shall be acceptable and
binding.
Section
18. Survival
of Representations, Warranties and Agreements.
All
representations, warranties and statements made by a party to in this Agreement
or in any document or certificate delivered pursuant hereto shall survive the
Closing Date. Each of the parties hereto is executing and carrying out the
provisions of this Agreement in reliance upon the representations, warranties
and covenants and agreements contained in this Agreement or at the closing
of
the transactions herein provided for and not upon any investigation which it
might have made or any representations, warranty, agreement, promise or
information, written or oral, made by the other party or any other person other
than as specifically set forth herein.
Section
19. Access
to Books and Records.
During
the course of this transaction through Closing, each party agrees to make
available for inspection all corporate books, records and assets, and otherwise
afford to each other and their respective representatives, reasonable access
to
all documentation and other information concerning the business, financial
and
legal conditions of each other for the purpose of conducting a due diligence
investigation thereof. Such due diligence investigation shall be for the purpose
of satisfying each party as to the business, financial and legal condition
of
each other for the purpose of determining the desirability of consummating
the
proposed transaction. The parties further agree to keep confidential and not
use
for their own benefit, except in accordance with this Agreement any information
or documentation obtained in connection with any such
investigation.
Section
20. Further
Assurances.
If,
at
any time after the Closing, the parties hereby mutually agree that any further
deeds, assignments or assurances in law or that any other things are necessary,
desirable or proper to complete the transactions contemplated hereby in
accordance with the terms of this agreement or to vest, perfect or confirm,
of
record or otherwise, the title to any property or rights of the parties hereto,
the parties agree that their proper officers and directors shall execute and
deliver all such proper deeds, assignments and assurances in law and do all
things necessary, desirable or proper to vest, perfect or confirm title to
such
property or rights and otherwise to carry out the purpose of this Agreement,
and
that the proper officers and directors the parties are fully authorized to
take
any and all such action.
[SIGNATURE
PAGE FOLLOWS]
14
IN
WITNESS WHEREOF,
each of
the undersigned has duly executed this Stock Purchase Agreement as of the date
first written above.
|
THE
COMPANY:
|
SINO-AMERICAN
|
|
DEVELOPMENT
CORPORATION
|
|
|
By:
________________________
|
|
|
Xxxx Xxxxx
|
|
|
Chief Executive Officer
|
|
|
THE
PURCHASERS:
|
[Signatures
set forth in Schedule A]
|
15
