STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is made and entered into
as of July 8, 2005 by and among Acer Limited ("Seller"), Madison Avenue Holdings
Inc., a Delaware corporation (the "Company"), and Xxxx Xxx ("Purchaser" and
together with Seller and the Company, the "Parties").
WHEREAS, Seller is the sole record and beneficial owner of Five Hundred
Thousand (500,000) shares of $.001 par value common stock of the Company, and
wishes to sell 95% of those shares (the "Stock"); and
WHEREAS, Purchaser wishes to purchase the Stock from Seller in a private
sale that is not part of a distribution or public offering.
NOW, THEREFORE, in the Parties hereto agree as follows:
1. Agreement to Purchase and Sell the Stock. Subject to the terms and
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conditions of this Agreement, at the Closing (as hereinafter defined),
Seller agrees to sell to Purchaser, and Purchaser agrees to purchase from
Seller, for a purchase price of One Hundred Twenty Thousand U.S. Dollars
($120,000) (the "Purchase Price"), four hundred and seventy-five hundred
thousand (475,000) shares of common stock of the Company.
2. Closing and Payment. In reliance upon the written representations and
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warranties of Purchaser, Seller will sell and in reliance upon the written
representations and warranties of Seller, Purchaser will purchase, at a
single closing, the Stock. The closing shall be held on July 8, 2005, or
such other date as the Parties may agree, at Guzov Ofsink, LLC, 000
Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Closing"). At
the Closing, Seller will deliver to Purchaser original stock certificates
evidencing the Stock to be purchased hereunder, along with completed and
executed stock powers. At the Closing, Purchaser will deliver to Seller
the Purchase Price by check or wire transfer to an account designated by
Seller.
3. Representations and Warranties of Seller. Seller hereby represents and
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warrants to Purchaser that the statements in the following paragraphs of
this Section 3 are all true and complete as of the date hereof and unless
Seller gives written notice to Purchaser prior to the Closing to the
contrary, will be true and correct on the date of Closing:
3.1 Authority; Due Authorization; the Company. This Agreement has been
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duly and validly executed and delivered by Seller, and upon the
execution and delivery by Purchaser of this Agreement and the
performance by Purchaser of its obligations herein, will constitute,
a legal, valid and binding obligation of Seller. The Company, is a
corporation duly incorporated, validly existing and in good standing
under the laws of the state of Delaware. The execution and delivery
by Seller of this Agreement does not, and the performance by Seller
of its obligations under this Agreement and the consummation of the
transactions contemplated hereby will not, conflict with or result
in a violation or breach of any of the terms, conditions or
provisions of any other agreement to which Seller is a party.
3.2 Title to Securities. Seller is the sole record and beneficial owner
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of the Stock, owns the Stock free and clear of all liens and
encumbrances and has sole dispositive power and authority with
respect to the Stock.
3.3 Valid Issuance. The Stock being purchased by the Purchaser hereunder
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is, and shall be at the Closing, duly and validly issued, fully
paid, and non-assessable and the offer and sale to Purchaser of the
Stock will be made in a transaction that is exempt from the
registration requirements of the Securities Act of 1933, as amended
and all applicable state securities laws .
3.4 Capitalization of the Company. Immediately prior to the Closing, the
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authorized capital stock of the Company shall consist of a total of
10,000,000 (ten million) shares of Common Stock, $.001 par value
(the "Common Stock"), of which 500,000 shares shall be issued and
outstanding and there shall not be outstanding any securities which
are convertible into or exercisable or exchangeable for any shares
of Common Stock or other equity securities of the Company. There are
no, and at the Closing there will be no,
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outstanding warrants, options, or securities convertible into Common
Stock or any other equity or debt securities of the Company, nor any
commitments to issue the same.
3.5 Litigation. There is no action, suit, proceeding or investigation
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pending or, to the best knowledge of Seller, currently threatened
against the Company or any subsidiary that may affect the validity
of this Agreement or the right of the Seller to enter into this
Agreement or to consummate the transactions contemplated hereby.
3.6 Securities Laws. The Company has complied in all respects with
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applicable federal and state securities laws, rules and regulations,
including the Sarbanes Oxley Act of 2002, as such laws, rules and
regulations apply to the Company and its securities; and (b) all
shares of capital stock of the Company have been issued in
accordance with applicable federal and state securities laws, rules
and regulations. There are no stop orders in effect with respect to
any of the Company's securities.
3.7 Tax Returns, Payments and Elections. The Company has timely filed
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all tax returns, statements, reports, declarations and other forms
and documents and has, to date, paid all taxes due.
3.8 `34 Act Reports. To the best knowledge of the Seller, none of the
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Company's filings with the Stock and Exchange Commission through the
latest applicable date, contains any untrue statement of a material
fact or omits to state a material fact necessary to make the
statements therein not misleading, in light of the circumstances in
which they were made.
4. Representations and Warranties of Purchaser. Purchaser hereby represents
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and warrants to Seller that the statements in the following paragraphs of
this Section 4 are all true and complete as of the date hereof and unless
Purchaser gives written notice to Seller prior to the Closing to the
contrary, will be true and correct on the date of Closing:
4.1 Exempt Transaction. Purchaser understands that the offering and sale
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of the Stock is intended to be exempt from registration under the
Act and exempt from registration or qualification under any state
law.
4.2 Investment Experience. The Purchaser is an experienced investor in
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equity securities of companies in the development stage and
acknowledges that he is able to fend for himself, can bear the
economic risk of its investment, and has such knowledge and
experience in financial or business matters that he is capable of
evaluating the merits and risks of an investment in the Stock.
Purchaser has had full access to all the information Purchaser
considers necessary or appropriate to make an informed investment
decision with respect to the Stock. Purchaser further has had an
opportunity to ask questions and receive answers from the Company
regarding the terms and conditions of the offering of the Stock and
to obtain additional information necessary to verify any information
furnished to Purchaser or to which Purchaser had access. Purchaser
has not relied on any oral representation made by the Company or
agent of the Company.
4.3 No General Solicitation. Purchaser has not received any general
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solicitation or advertising regarding the offering of this
Agreement.
4.4 Restricted Securities. The Purchaser understands that the Stock he
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is purchasing is characterized as "restricted Stock" under the U.S.
federal securities laws inasmuch as the Stock is being acquired from
the Company in a transaction not involving a public offering and
that under such laws and applicable regulations such Stock may be
resold without registration under the Act only in certain limited
circumstances. In this connection, the Purchaser represents that he
is familiar with Rule 144 under the Securities Act of 1933, as
amended (the "Act"), as presently in effect, and understands the
resale limitations imposed thereby and by the Act. The Purchaser
understands that the Stock has not been and will not be registered
under the Act or qualified in any state in which the Stock may be
offered by the Purchaser, and thus the Purchaser will not be able to
resell or otherwise transfer the Stock unless the Stock is
registered under the Act and registered or qualified under
applicable state securities laws, or an exemption from such
registration or qualification is available.
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4.5 Legends. It is understood that the certificates evidencing the Stock
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may bear one or all of the following legends:
(1) "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE
OFFERED, SOLD, PLEDGED, HYPOTHECATED, ASSIGNED OR TRANSFERRED EXCEPT
(i) PURSUANT TO A REGISTRATION STATEMENT UNDER THE SECURITIES ACT
WHICH HAS BECOME EFFECTIVE AND IS CURRENT WITH RESPECT TO THESE
SECURITIES, OR (ii) PURSUANT TO A SPECIFIC EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT, BUT ONLY UPON A HOLDER HEREOF
FIRST HAVING OBTAINED THE WRITTEN OPINION OF COUNSEL REASONABLY
ACCEPTABLE TO THE CORPORATION, THAT THE PROPOSED DISPOSITION IS
CONSISTENT WITH ALL APPLICABLE PROVISIONS OF THE SECURITIES ACT AS
WELL AS ANY APPLICABLE "BLUE SKY" OR SIMILAR SECURITIES LAW."
(2) Any legend required by the Bylaws of the Company.
5. CONDITIONS TO PURCHASER'S OBLIGATIONS AT THE CLOSING.
5.1 Conditions to Closing. Subject to the terms hereof, the obligation
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of the Purchaser to purchase the Stock at the Closing is subject to
the fulfillment, prior to the Closing to the satisfaction of the
Purchaser, of the following conditions, the waiver of which shall
not be effective against Purchaser without written consent thereto:
5.1.1 Representations and Warranties True and Correct. The representations
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and warranties made by Seller in Section 3 hereof shall be true and
correct and complete as of the date hereof, and shall be true and
correct and complete as of the date of the Closing with the same
force and effect as if they had been made on and as of such date.
5.1.2 Access to Books and Records. Seller shall have provided Purchaser
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with the following; a stock certificate or stock certificates
totaling 475,000 shares of Common Stock together with a completed
and executed stock power transferring the Stock to Purchaser; a copy
of the Company's stock ledger; a certificate of good standing of the
Company in Delaware as of a date not more than 30 days prior to the
Closing and a copy of the Certificate of Incorporation and bylaws of
the Company certified by the chief executive officer of the Company.
In addition, upon reasonable notice, during business hours, Seller
shall use his reasonable best efforts to cause the Company to give
Purchaser reasonable access to the Company's books and records.
6. CONDITIONS TO SELLER'S OBLIGATIONS AT THE CLOSING.
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6.1 The obligations of the Seller under this Agreement with respect to
the Purchaser are subject to the fulfillment at or before the
Closing of the following conditions:
6.1.1 Representations and Warranties. The representations and warranties
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of the Purchaser contained in Section 4 hereof shall be true and
correct as of such Closing.
6.1.2 Payment of Purchase Price. Purchaser shall have delivered to the
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Seller the Purchase Price.
7. COVENANTS.
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7.1 Seller hereby agrees that it will provide at least 200 shareholders
when and if the Company includes its shares in a registration
statement filed under the Securities Act of 1933, as amended (a
"Registration Statement").
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7.2 Seller hereby agrees that it shall, upon the effectiveness of a
Registration Statement, he shall take all steps necessary to assist
the Company in obtaining at least two market makers for its stock.
7.3 In consideration for Seller's efforts in obtaining Purchaser to
provide new business opportunities to the Company, the Company
hereby covenants and agrees that, in the event that the Company
successfully completes a merger or acquisition of one or more
business entities located by Purchaser (such a merger or
acquisition, the "Business Combination"), it shall issue such number
of new shares of the common stock of the Company (the "New Shares")
to Seller so that Seller will continue to retain 5% of equity
ownership in the Company immediately after the close of the Business
Combination. Purchaser further agrees to cause the Company to issue
the New Shares to Seller in connection with the Business
Combination.
8. INDEMNIFICATION.
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8.1 Seller's Indemnification. Seller agrees to indemnify, defend and
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hold Purchaser and its officers, directors, employees, agents,
consultants and assigns harmless from and against any claims, losses
or expenses (including reasonable attorney's fees) resulting from or
arising out of breach by Seller of any of his representations,
warranties, covenants or obligations under this Agreement.
8.2 Purchaser's Indemnification. Purchaser agrees to indemnify, defend
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and hold Seller and its officers, directors, employees, agents,
consultants and assigns harmless from and against any claims, losses
or expenses (including reasonable attorney's fees) resulting from or
arising out of breach by Purchaser of any of the representations,
warranties, covenants or obligations under this Agreement.
9. MISCELLANEOUS. Any dispute, disagreement, conflict of interpretation or
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claim arising out of or relating to this Agreement, or its enforcement,
shall be governed by the laws of the State of New York. This Agreement may
be executed in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
agreement. A telefaxed copy of this Agreement shall be deemed an original.
The headings and captions used in this Agreement are used for convenience
only and are not to be considered in construing or interpreting this
Agreement. Any term of this Agreement may be amended and the observance of
any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with
the written consent of Seller and the Purchaser. This Agreement
constitutes the entire agreement and understanding of the parties with
respect to the subject matter hereof and supersedes any and all prior
negotiations, correspondence, agreements, understandings duties or
obligations between the parties with respect to the subject matter hereof.
The terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective successors and assigns of the parties.
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the date first written above.
SELLER: ACER LIMITED
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By: Xxxxx Xxxxxxxxxxxxx
Title: Chief Executive Officer
COMPANY: MADISON AVENUE HOLDINGS INC.
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By: Xxxxx Xxxxxxxxxxxxx
Title: Chief Executive Officer
BUYER:
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Xxxx Xxx
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Xxxxx xx Xxx Xxxx, Xxxxxx xx Xxx Xxxx ss:
On June 23, 2005 before me, the undersigned, personally appeared Xxxxx
Xxxxxxxxxxxxx personally known to me or proved to me on the basis of
satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed
to the within instrument and acknowledged to me that he/she/they executed the
same in his/her/their capacity(ies), and that by his/her/their signature on the
instrument, the individual(s), or the person upon behalf of which the
individual(s) acted, executed the instrument.
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(signature and office of individual taking acknowledgment)
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