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EXHIBIT 10.1
SINO-AMERICAN DEVELOPMENT
CORPORATION
STOCK PURCHASE AGREEMENT
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.
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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 Richardson &
Patel LLP, 10900 Wilshire Boulevard, Suite 500, Los Angeles,
California 90024 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.
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(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").
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(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.
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(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.
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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
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