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Exhibit 2
STOCK TRANSFER AGREEMENT
This Stock Transfer Agreement (the "Agreement") is entered into as of
March 4, 1997 by and among Xxxxxx Xxxxxxx ("Xxxxxxx"), Xxxxxxx X. Xxxxxx
("Xxxxxx") and Xxxxxx Xxxxxxx ("Xxxxxxx" and, together with Xxxxxx, the
"Transferees").
RECITALS
A. WHEREAS, Xxxxxxx desires to transfer to Xxxxxx 24,500 shares of
common stock, $.01 par value (the "Xxxxxx Shares"), of Media Arts Group, Inc., a
Delaware corporation (the "Company") beneficially held by him.
B. WHEREAS, Xxxxxx beneficially holds a promissory note issued by
Xxxxxxx on January 3, 1993, in aggregate principal amount of $134,750 bearing
interest at a rate of 6% per annum (the "Xxxxxx Note") which, in consideration
for receipt of the Xxxxxx Shares, Xxxxxx desires to cancel, as more fully
provided herein.
C. WHEREAS, Xxxxxxx desires to transfer to Kinkade 24,500 shares of
common stock, $.01 par value (the "Kinkade Shares" and, together with the Xxxxxx
Shares, the "Shares"), of the Company beneficially held by him.
D. WHEREAS, Kinkade beneficially holds a promissory note issued by
Xxxxxxx on January 3, 1993, in aggregate principal amount of $134,750 bearing
interest at a rate of 6% per annum (the "Kinkade Note") which, in consideration
for receipt of the Kinkade Shares, Kinkade desires to cancel, as more fully
provided herein.
AGREEMENT
NOW, THEREFORE, in order to implement the foregoing and in
consideration of the mutual agreements contained herein and for other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto agree as follows:
1. Transfer of Xxxxxx Shares. Effective as of the date hereof,
Xxxxxxx hereby conveys, transfers, assigns and delivers to Xxxxxx, and Xxxxxx
hereby acquires, the Xxxxxx Shares, free and clear of all Encumbrances (as
defined in Section 5.2(a) below).
2. Cancellation of Xxxxxx Note. The parties hereto agree that,
effective as of the date hereof, Xxxxxxx'x obligations with respect to the
$134,750 aggregate principal amount of the Xxxxxx Note, including all interest
accrued thereon, are hereby terminated, and the Xxxxxx Note is hereby canceled
and rendered void and of no further force or effect. In connection with the
foregoing, Xxxxxx hereby waives the 10 days' advance written notice of
prepayment described in subsection 2(a) of the Xxxxxx Note.
3. Transfer of Kinkade Shares. Effective as of the date
hereof, Xxxxxxx hereby conveys, transfers, assigns and delivers to Kinkade, and
Kinkade hereby acquires, the Kinkade Shares, free and clear of all Encumbrances
(as defined in Section 5.2(a) below).
4. Cancellation of Kinkade Note. The parties hereto agree that,
effective as of the date hereof, Xxxxxxx'x obligations with respect to the
$134,750 aggregate principal amount of the Kinkade
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Note, including all interest accrued thereon, are hereby terminated, and the
Kinkade Note is hereby canceled and rendered void and of no further force or
effect. In connection with the foregoing, Kinkade hereby waives the 10 days'
advance written notice of prepayment described in subsection 2(a) of the Kinkade
Note.
5. Closing:
5.1 Closing. The closing of the transactions contemplated
herein (the "Closing") shall be held concurrently upon execution of this
Agreement at the offices of Xxxxxx & Xxxxxxx, 000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000,
Xxx Xxxxxxxxx, Xxxxxxxxxx.
5.2 Documents to be Delivered. To effect the transfers
described in Sections 1 and 3 and the cancellation of the Xxxxxx Note and
Kinkade Note described in Sections 2 and 4, respectively, the parties hereto
shall, concurrently upon execution of this Agreement deliver the following:
(a) Xxxxxxx shall surrender to the Company his
stock certificate evidencing the Shares, free and clear of any claim, lien,
pledge, option, charge, easement, security interest, right-of-way, encumbrance
or other rights of third parties ("Encumbrances"), accompanied by stock powers
duly executed in blank, and Xxxxxxx shall instruct the Company to issue to
Xxxxxx a stock certificate evidencing the Xxxxxx Shares, free and clear of any
Encumbrance whatsoever.
(b) Xxxxxx shall deliver to Xxxxxxx his
original execution copy of the Xxxxxx Note, in canceled form, as acknowledgment
of the cancellation of the Xxxxxx Note and the satisfaction in full of Xxxxxxx'x
obligations thereunder.
(c) Kinkade shall deliver to Xxxxxxx his
original execution copy of the Kinkade Note, in canceled form, as acknowledgment
of the cancellation of the Kinkade Note and the satisfaction in full of
Xxxxxxx'x obligations thereunder.
(d) All instruments and documents executed and
delivered pursuant hereto shall be in a form and substance, and shall be
executed in a manner, reasonably satisfactory to each party hereto.
6. Representations, Warranties, Covenants, and
Acknowledgments of Transferees. Each of the Transferees, severally and not
jointly, hereby represents, warrants, covenants, acknowledges and agrees that:
6.1 Investment. He is acquiring the Shares transferred to him
hereunder for his own account, and not for the account of any other person. He
is acquiring the Shares transferred to him hereunder for investment and not with
a view to distribution or resale thereof except in compliance with applicable
laws regulating securities.
6.2 Relation of Company. He is in a capacity such that he has
become personally familiar with the business, affairs, financial condition, and
results of operations of the Company.
6.3 Access to Information. He has had the opportunity to ask
questions of, and to receive answers from, appropriate executive officers of the
Company with respect to the terms and conditions of the transactions
contemplated hereby and with respect to the business, affairs, financial
condition, and results of operations of the Company. He has had access to such
financial and other
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information as is necessary in order for him to make a fully-informed decision
as to investment in the Company by way of acquisition of the Shares transferred
to him hereunder, and has had the opportunity to obtain any additional
information necessary to verify any of such information.
6.4 Business Experience. As a result of his relationship with
the Company, study of the information provided by the Company and his general
business experience and experience in financial matters, he is capable of
evaluating the merits and risks of his investment in the Company evidenced by
the acquisition of the Shares transferred to him hereunder.
6.5 Speculative Investment. His investment in the Company
represented by the Shares transferred to him hereunder is speculative in nature
and is subject to a risk of loss in whole or in part. The amount of such
investment is within his risk capital means and is not so great in relation to
his total financial resources as would jeopardize the personal financial needs
of him or his family in the event such investment were lost in whole or in part.
6.6 Registration. He may bear the economic risk of investment
for an indefinite period of time because the sale to him of the Shares
transferred to him hereunder has not been registered under the Securities Act of
1933 (the "Act") and he cannot transfer, sell, distribute, assign, pledge,
hypothecate or otherwise dispose of ("Transfer") the Shares transferred to him
hereunder unless such Transfer is registered under the Act or an exemption from
such registration is available.
7. Xxxxxxx'x Representations and Warranties. Xxxxxxx represents and
warrants to each of the Transferees that Xxxxxxx has good and valid title to the
Shares, free and clear of any Encumbrance whatsoever. The Shares are not subject
to any voting trust agreement or other contract, agreement, arrangement,
commitment or understanding, including any such agreement, arrangement,
commitment or understanding restricting or otherwise relating to the voting,
dividend rights or disposition of the Shares.
8. Miscellaneous.
8.1 Survival of Representations and Warranties. The
representations and warranties contained in Sections 6 and 7 shall survive the
execution and delivery of this Agreement and consummation of the transactions
contemplated hereby.
8.2 Entire Agreement, No Reliance on Representations. This
Agreement, constitutes the entire agreement and understanding concerning the
subject matter herein and supersedes and replaces any prior negotiations and
agreements between the parties hereto, or any of them, whether written or oral.
Each of the parties hereto acknowledges that no other party or agent or attorney
of any other party has made any promise, representation, or warranty whatsoever,
express or implied, not contained herein, concerning the subject matter hereof,
to induce the other party to execute this Agreement, and each party hereto
acknowledges that he has not executed this Agreement in reliance upon any such
promise, representation, or warranty not contained herein.
8.3 Binding Effect. Subject to the limitations set
forth in this Agreement, this Agreement shall be binding upon, and inure to the
benefit of, the executors, administrators, heirs, legal representatives,
successors and assigns of the parties hereto.
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8.4 Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of California applicable
to contracts entered into and wholly to be performed within the State of
California.
8.5 Notices. Any notice, request, instruction or other
document to be given hereunder shall be in writing and delivered in person or by
courier, or by facsimile transmission or mailed by certified mail, postage
prepaid, return receipt requested (such mailed notice to be effective on the
date of such receipt is acknowledged), as follows:
Xxxxxxx: Xxxxxx Xxxxxxx
15305 Top of the Xxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Xxxxxx: Xxxxxxx X. Xxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Kinkade: Xxxxxx Xxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
8.6 Amendments. This Agreement may be amended only by a
written instrument signed by the parties hereto.
8.7 Fees. Each party hereto shall be responsible for its own
expenses, including, without limitation, fees and expenses of legal counsel,
incurred in connection with the negotiation and execution of this Agreement and
the consummation of the transactions contemplated hereby.
8.8 Counterparts. This Agreement may be executed in
counterparts, and each such counterpart for all purposes shall be deemed an
original and all such counterparts together shall constitute but one and the
same agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
By: /s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
By: /s/ Xxxxxxx X Xxxxxx
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Xxxxxxx X. Xxxxxx
By: /s/ Xxxxxx Kinkade
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Xxxxxx Xxxxxxx
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