Schedule A
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Xxxx X. Xxxxxxx
C/O XXXXXXX X. XXXXX
29th floor
Xxxxx Xxxxxxx Xxxxxxx & Xxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
March 29, 2000
The Purchasers (as defined below)
c/o Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-3903
Attention: Xxxxxxx X. Xxxxx, Esq.
Stock Purchase Agreement
Gentlemen:
This letter agreement (this "Agreement") is written to
set forth the agreement between the three persons identified on
Schedule A (each a "Purchaser," and collectively, "Purchasers")
and Xxxx X. Xxxxxxx ("Seller"), relating to the sale by Seller to
Purchasers and the purchase by Purchasers from Seller of an
aggregate of 400,000 shares of the Common Stock (par value $0.01
per share) (the "GMAI Common Stock"; those 400,000 shares, the
"Shares") of Xxxx Xxxxxxx Auctions, Inc., a New York corporation
("GMAI").
1. Purchase of GMAI Common Stock. Seller hereby
sells to each Purchaser, and each Purchaser hereby purchases from
Seller, the number of shares of GMAI Common Stock set forth
opposite the Purchaser's name on Schedule A. The Purchasers
shall pay $5,200,000 to Seller as the aggregate purchase price
for the Shares (the "Purchase Price").
2. Payment and Delivery. (a) Immediately after the
parties sign this Agreement, Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP,
as agent for the Purchasers (the "Agent"), shall wire transfer to
a bank account designated by Seller in writing an amount equal to
the Purchase Price.
(b) Upon his receipt of the Purchase Price,
Seller shall deliver to the Agent a certificate or certificates
representing the Shares which the Purchasers are purchasing
hereunder (together with properly executed stock assignment
powers with all necessary stock transfer taxes paid or provided
for necessary to permit the transfer of the Shares to the
Purchasers).
3. Seller's Representations and Warranties. Seller
represents and warrants to Purchasers as follows:
(a) Seller has all requisite power and authority
to enter into and perform his obligations under this Agreement
and to carry out the transactions contemplated hereby. This
Agreement has been duly executed and delivered by Seller, and
this Agreement is a valid and binding obligation of Seller,
enforceable against him in accordance with its terms, except as
enforceability may be limited by any bankruptcy, insolvency,
moratorium, reorganization or similar laws affecting creditors'
rights generally and by general equitable principles (whether
such enforceability is considered in a proceeding at law or in
equity).
(b) The making, execution, delivery and
performance of this Agreement by Seller will not (i) violate or
conflict with any law, rule, regulation, order, judgment or
decree applicable to Seller or any material license, permit or
other governmental authorization held by Seller, or (ii) violate
or conflict with any material provision, or result in any
material default, acceleration or other breach, of any contract,
license, lease or loan agreement to which Seller is a party.
(c) Seller is not liable for any fee, commission
or other compensation to any agent, broker, investment banker or
other similar person acting on behalf of or under the authority
of Seller in connection with the making, execution, delivery or
performance of this Agreement or the sale of Shares hereunder to
the Purchasers.
(d) Seller is the record and beneficial owner of
and has good and valid title to the Shares, free and clear of any
lien, charge, encumbrance, security interest, option, right or
claim of others. Upon delivery of and payment for the Shares as
provided in this Agreement, Seller will transfer to each
Purchaser good and valid title to the Shares being sold to that
Purchaser hereunder, free and clear of any lien, charge,
encumbrance, security interest, option, right or claim of others,
other than as may be imposed by the certificate of incorporation
or by-laws of GMAI or by applicable securities laws.
(e) (i) Since January 1, 2000, Seller has not
purchased any GMAI Common Stock, (ii) Seller has no net short
position in GMAI Common Stock, and (iii) Seller neither owns or
has obligations under any put, call, option or derivative
security relating to GMAI Common Stock.
(f) Seller is not an affiliate of GMAI and Seller
has owned the Shares since October 29, 1998. For purposes
hereof, "affiliate" shall mean with respect to any specified
party hereto, any person or entity that directly or indirectly,
through one or more intermediaries, controls, is controlled by,
or is under common control with, the specified party. As used in
this definition, the term "control" means the possession,
directly or indirectly, of the power to direct or cause the
direction of the management and policies of a party, whether
through ownership of voting securities, as trustee or executor,
by contract or credit arrangement or otherwise.
(g) During the period ending 365 days from the
date of this Agreement, Seller agrees that he will not sell or
otherwise transfer in any 30-day period more than 40,000 shares
of any unregistered GMAI Common Stock he now owns or subsequently
acquires; provided, however, that this provision shall not apply
in the event of a merger or sale of all or substantially all of
the capital stock of GMAI.
4. Purchaser's Representations and Warranties. Each
Purchaser separately represents and warrants to Seller as to
itself as follows:
(a) If the Purchaser is a corporation, company or
trust, (i) it is duly incorporated or formed, validly existing
and in good standing under the laws of the jurisdiction of its
organization (which is specified in Schedule A), (ii) it has the
full authority to enter into and perform this Agreement, (iii)
this Agreement has been authorized by proper action on behalf of
such Purchaser, and (iv) upon execution and delivery hereof by
such Purchaser, this Agreement will be duly executed and
delivered by such Purchaser, and will represent the valid and
binding obligation of such Purchaser, enforceable against such
Purchaser in accordance with its terms, except as enforceability
may be limited by any bankruptcy, insolvency, moratorium,
reorganization or similar laws affecting creditors' rights
generally and by general equitable principles (whether such
enforceability is considered in a proceeding at law or in equity).
(b) If the Purchaser is an individual, he has all
requisite power and authority to enter into and perform his
obligations under this Agreement and to carry out the
transactions contemplated hereby. This Agreement has been duly
executed and delivered by Purchaser, and this Agreement is a
valid and binding obligation of Purchaser, enforceable against
him in accordance with its terms, except as enforceability may be
limited by any bankruptcy, insolvency, moratorium, reorganization
or similar laws affecting creditors' rights generally and by
general equitable principles (whether such enforceability is
considered in a proceeding at law or in equity).
(c) (i) The Shares being purchased by Purchaser
hereunder are being purchased for his or its sole benefit and
account for investment and not with a view to, or for resale in
connection with, a public offering or distribution, (ii)
Purchaser agrees and acknowledges that such Shares may be sold or
transferred only in compliance with the United States Securities
Act of 1933, as amended (the "Act") and other applicable
securities laws, and GMAI's Certificate of Incorporation and
By-Laws, and (iii) that the certificate or certificates
representing such Shares may be imprinted with a legend
indicating that such stock is not registered under the Act or
such other laws and noting that the transfer thereof is
restricted.
(d) Purchaser is familiar with Rule 501 under the
Act and is an "accredited investor" within the meaning of that
rule.
(e) (i) Purchaser (or its advisors or
representatives) have had access to extensive financial
information concerning GMAI, and Purchaser (or its advisors and
representatives) have such knowledge and experience in financial
and business matters that Purchaser is capable of utilizing the
information so available to it concerning GMAI to evaluate the
risks of an investment in GMAI, and (ii) Purchaser has been
advised that the Shares which he or it is purchasing hereunder
have not been registered under the Act, and that, accordingly,
the Purchaser may not be able to sell or otherwise dispose of
such Shares when he or it may wish to do so.
(f) Except as expressly provided in Section 3,
Seller has made no representation or warranty to Purchaser
with respect to the Shares which he or it is purchasing
hereunder, or GMAI, either orally or in writing.
(g) Purchaser if an individual, or in the case of
a trust the trustee thereof, or in the case of a company the
principal shareholder thereof is not in possession of any
material nonpublic information concerning GMAI, including but not
limited to information relating to GMAI's prospects, potential
business combinations involving GMAI, any potential offer to
acquire GMAI, GMAI's earnings or performance or operating
results, any potential executive hirings by GMAI, acquisitions by
GMAI of other businesses, or any other matter.
(h) Purchaser if an individual, or if a trust
such trust and its trustee and each of its principal
beneficiaries, or if a company its principal beneficial owner(s)
(i) has no net short position in GMAI Common Stock, and (ii)
neither owns nor has obligations under any put, call, option or
other derivative security relating to GMAI Common Stock.
5. Indemnity.
(a) Each Purchaser hereby indemnifies Seller
against any liability in connection with any fee, commission or
other compensation owed by that Purchaser to any agent, broker,
investment banker or other similar person acting on behalf of or
under the authority of that Purchaser in connection with the
making, execution, delivery or performance of this Agreement or
the purchase of the Shares being purchased by that Purchaser from
Seller hereunder.
(b) Seller hereby indemnifies each Purchaser
against any liability in connection with any fee, commission or
other compensation owed by Seller to any agent, broker,
investment banker or other similar person acting on behalf of or
under the authority of Seller in connection with the making,
execution, delivery or performance of this Agreement or the sale
of the Shares being sold by Seller to that Purchaser hereunder.
6. Miscellaneous. This Agreement (a) by election of
the parties, in accordance with section 5-1401 of the New York
General Obligations Law, shall be governed by the laws of the
State of New York applicable to contracts made and to be wholly
performed within that State (without reference to its conflict of
laws rules) and the rights and duties of the parties hereunder
shall be determined in accordance therewith, (b) may be modified,
amended or terminated only in writing signed by the parties to be
bound thereby, (c) expresses the entire agreement of the parties
with respect to its subject matter, and (d) shall be binding upon
and inure to the benefit of the parties and their respective
successors and assigns. In the event of any dispute arising
under this Agreement, each Purchaser and Seller agree that it
shall be resolved exclusively in the Federal or state courts
sitting in New York County, New York, and each Purchaser and
Seller hereby submits to the exclusive jurisdiction of such
courts, and agrees that service of process against him may be
made by mailing by registered mail to his address as shown on the
first page of this Agreement. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to be an
original but all of which together shall constitute one and the
same agreement. This Agreement shall be effective when each of
the parties shall have executed at least one counterpart,
although not all of the parties may have executed the same
counterpart.
If the foregoing correctly sets forth our agreement please
sign and return the enclosed copy of this letter to me, whereupon this
letter will become a binding agreement between Purchasers and Seller.
Very truly yours,
XXXX X. XXXXXXX
By_______________________________________
Xxxxxxx X. Xxxxx, Esq.,
as Attorney-in-Fact for
Xxxx X. Xxxxxxx,
and not individually
AGREED TO AS OF THE DATE HEREOF:
XXXXX SERVICES LTD.
By_________________________________
___________________________________
Its________________________________
________________________________
Xxxx Xxxxxxx
SHERLEIGH ASSOCIATES INC. PROFIT SHARING PLAN
By________________________________
Xxxx Xxxxxx
Trustee
Number of
Purchaser's Name and Shares Being Purchase Price
Address Purchased
Purchaser # 1
-------------
Xxxxx Services Ltd., 200,000 $2,950,000
a British Virgin Islands company
P.O. Box 3186
Xxxxxx Building
Main Street
Road Town
Tortola, British Virgin Islands
Purchaser # 2
------------- 100,000 $ 750,000
Xxxx Xxxxxxx
C/o Xxxx Xxxxxxx Auctions Inc.
000 Xxxxxxx Xxxxxx
Xxxx Xxxxxxxx, Xxx Xxxxxx 00000
Purchaser # 3
----------------
100,000 $1,500,000
SHERLEIGH ASSOCIATES INC.
PROFIT SHARING PLAN,
a New York trust
Xxxx Xxxxxx, Trustee
000 Xxxxx Xxxxxx (0X)
Xxx Xxxx, Xxx Xxxx 00000
TOTAL 400,000 $5,200,000