Exhibit 2.1
RESCISSION AND PURCHASE AGREEMENT
Agreement made this 29th day of September, 1999, by and among Metro Global
Media, Inc. ["MGM"], Metro, Inc. ["Metro"], Fanzine International, Inc.
["Fanzine"], Goldtree Publishing, Inc. ["Goldtree"], Xxxxxx Xxxxxxx ["Xxxxxxx"],
Xxxxxx X. Xxxxxxxxx ["Xxxxxxxxx"], Xxxx Senior ["Senior"] and Xxxxxxx Xxxxxx
["Xxxxxx"] (MGM and Metro are sometimes collectively referred to herein as the
"Metro Group;" Fanzine, Xxxxxxx, Xxxxxxxxx, Senior and Xxxxxx are sometimes
collectively referred to as the "Fanzine Group").
WHEREAS, during 1998 Metro acquired 100 shares of the capital stock of
Fanzine (as referred to in Section 1.1 of the Stock Purchase Agreement, as
hereinafter defined) [the "Fanzine Stock"] from Xxxxxxx, Xxxxxxxxx, Senior and
Xxxxxx, for consideration of Four Million Dollars ($4,000,000) [the "Metro
Investment"]; and
WHEREAS, the parties hereto acknowledge that their expectations never
materialized; and
WHEREAS, the parties hereto acknowledge that a complete rescission of the
transactions, arrangements and combinations commenced by them during 1998 is in
their respective best interests, and
WHEREAS, Goldtree is desirous of acquiring a portion of the Fanzine Stock
from Metro.
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
1. Rescission Effective immediately upon the execution of this Agreement,
and the deliveries required by Sections 2 and 3 of this Rescission Agreement,
each of the agreements set forth below shall be deemed fully rescinded; and the
respective benefits, liabilities or obligations imposed under or by them shall
be cancelled or made void [the "Rescission"]:
(a) That certain Stock Pledge Agreement dated July 31, 1998 among MGM and
the individual members of the Fanzine Group [the "Stock Purchase Agreement"];
(b) That certain Pledge Agreement dated July 31, 1998 executed by MGM and
benefiting the individual members of the Fanzine Group [the "Pledge Agreement"];
(c) That certain Voting Agreement dated July 31, 1998 among MGM and the
individual members of the Fanzine Group [the "Voting Agreement"],
(d) The Employment Agreement dated July 31, 1998 among MGM, Fanzine and
Xxxxxx [the "Xxxxxx Agreement"];
(e) The Employment Agreement dated July 31, 1998 among MGM, Fanzine and
Xxxxxxx [the "Xxxxxxx Agreement"];
(f) The Employment Agreement dated July 31, 1998 among MGM, Fanzine and
Senior [the "Senior Agreement"]; and
(g) The Employment Agreement dated July 31, 1998 among MGM, Fanzine and
Xxxxxxxxx [the "Xxxxxxxxx Agreement"].
The business operations, and all of the tangible and intangible assets of
Fanzine, shall revert to the Fanzine Group as of the date of this Agreement. No
member of the Metro Group shall (i) have any present or future interest in any
of the stock, business operations, or tangible or intangible assets of Fanzine,
whether presently existing, previously existing, or hereafter existing; and (ii)
be or remain liable for any past, present or future debts, liabilities or
obligations incurred by Fanzine. No member of the Fanzine Group shall (i) have
any present or future interest in any of the business operations, or tangible or
intangible assets of any member of the Metro Group, whether presently existing,
previously existing, or hereafter existing; and (ii) be or remain liable for any
past, present or future debts, liabilities or obligations incurred by any member
of the Metro Group.
Any and all income tax liabilities attributable to any earnings of Fanzine
shall be paid exclusively by, and be the sole responsibility of, the Fanzine
Group.
2. Return of consideration and Repurchase of the Fanzine Shares.
(a) Concurrently with the parties' mutual execution and delivery of this
Rescission Agreement, the Fanzine Group shall deliver to MGM a Promissory Note
substantially in the form of Exhibit "A" to this Agreement (the "Fanzine Note"),
obligating the individual members of the Fanzine Group to pay to Metro, as
consideration for the acquisition by the Fanzine Group of fifty (50) shares of
the Fanzine Stock, the sum of Two Million ($2,000,000) on or before October 31,
1999; provided, however, that (notwithstanding any cure periods to the
contrary), Fanzine shall have the option of paying up to One million Dollars
($1,000,000) of that sum on or before November 30, 1999.
(b) Concurrently with the parties' mutual execution and delivery of this
Rescission Agreement, Goldtree shall deliver to MGM a Promissory Note
substantially in the form of Exhibit "B" to this Agreement (the "Goldtree
Note"), obligating Goldtree to pay to Metro, as consideration for the
acquisition by Goldtree of fifty (50) shares of the Fanzine Stock, the sum of
Two Million ($2,500,000), as follows: (i) the sum of One Million ($1,000,000)
Dollars shall be payable on or before May 31, 2000; and (ii) the sum of One
Million, Five Hundred Thousand Dollars ($1,500,000) shall be payable on or
before August 31, 2000.
(c) The Fanzine Note and the Goldtree Note shall each be without interest,
provided, however, that if there is any default with respect to any payment
thereunder (which default remains uncured after ten days written notice
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thereof), the Note shall bear interest on the unpaid balance at the rate of
twelve percent (12%) per annum from the date thereof.
(d) The Goldtree Note shall be secured by (i) the personal guarantee by
each the individual members of Fanzine Group pro rata in a percentage equal to
each member's pro rata percentage receipt of the Metro Investment), in the form
of Exhibit "C" annexed to this Rescission Agreement (the "Guarantee
Agreements"); and (ii) a pledge of the assets of Fanzine pursuant to the terms
of a security agreement in the form of Exhibit "D" annexed to this Rescission
Agreement (the "Goldtree Security Agreement").
(e) The Fanzine Note shall be secured by a pledge of the assets of Fanzine
pursuant to the terms of a security agreement in the form of Exhibit "E" annexed
to this Rescission Agreement (the "Fanzine Security Agreement").
(e) Concurrently with the parties' mutual execution and delivery of this
Rescission Agreement, the Fanzine Group shall deliver to MGM the One Million
(1,000,000) shares of the common stock of MGM referred to in Section 2.2(a) of
the Stock Purchase Agreement.
(f) Concurrently with the parties' mutual execution and delivery of this
Rescission Agreement, and the receipt by Metro of the Fanzine Note, the Goldtree
Note, the Guarantee Agreements, the Goldtree Security Agreement, and the Fanzine
Security Agreement the Fanzine Stock shall be deemed sold and conveyed as
follows: (i) fifty (50) shares thereof to the individual members of the Fanzine
Group (in such proportions as the members of the Fanzine Group shall elect), and
(ii) fifty (50) shares thereof to Goldtree. The share certificate in the name of
Metro relating to the Fanzine Stock shall forthwith be released from escrow, and
marked "cancelled" on its face and/or destroyed, new share certificates
evidencing the ownership of the Fanzine Stock by the individual members of the
Fanzine Group and Goldtree shall be issued by Fanzine, and the books and records
of Fanzine shall be modified to reflect such fact.
3. Exchange of General Releases. Upon the execution of this Rescission
Agreement, the parties shall exchange general releases (the "General Releases"),
in the form of Exhibit "F" annexed hereto, wherein and whereby each member of
the Metro Group shall release each member of the Fanzine Group, and each member
of the Fanzine Group shall release each member of the Metro Group, from any and
all claims of any nature, whether known or unknown, whether presently existing
or hereafter coming into being, and whether a direct or third-party claim. The
General Releases shall exclude from the terms thereof any obligations the
parties may have to one another arising under this Agreement or any exhibit
annexed hereto.
4. Notices. All notices necessary or desirable to be given hereunder shall
be deemed sufficient if served personally, or by fax transmission, with a
confirming copy mailed to the parties at their addresses set forth below (or to
any other such addresses as are hereafter stated in a notice given in compliance
herewith):
If to any member of the Fanzine Group, to each of the following:
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Fanzine International, Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Xxxxxxx Xxxxxx, Esq.
00 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Xxxxxx Xxxxxxx
00 Xxxxx Xxx
Xxxxxxxxxx, XX 00000
Xxxxxx X. Xxxxxxxxx
c/o Xxxxxx X. Xxxxxxxxx & Associates, Inc.
000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Bart Senior
c/o Xxxxxx X. Xxxxxxxxx & Associates, Inc.
000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxx, XX 00000
If to any member of the Metro Group:
Metro Global Media, Inc.
0000 Xxxx Xxxxxx
Xxxxxxxx, XX 00000
With a copy to:
Xxxxxxx, Green, Fahringer,
Roll, Salisbury & Cambria, LLP
Att: Xxxxxxx Xxxxxxxxx, Esq.
00 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
If to Goldtree:
Goldtree
x/x Xxx Xxx Xxxx xx Xxxxxxx Xxxxxx, X.X.
00 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
5. Governing Law. This Agreement shall be construed in accordance with the
laws of the State of New York, regardless of any conflict of law considerations.
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6. Confidentiality. Each party to this Agreement shall hold and continue to
hold, indefinitely, any information it has obtained from any other party
["Information"] in strictest confidence and will not disclose same to any person
or entity whatsoever, absent the prior express written instruction of the other
parties. Nor shall any party to this Agreement make any disparaging remarks or
statements regarding any other party. The party in possession of Information
shall take all necessary steps to ensure that the same is held in the strictest
confidence by itself, its employees, representatives and agents, and that no
such person makes any disparaging remark about any other party. Notwithstanding
the foregoing, a party in possession of Information may provide access thereto,
and may make a disparaging remark about another party (i) to its partners,
officers, employees and representatives on, and only on, a need to know basis;
(ii) to the extent that any party concludes that it is required under any
applicable federal or state securities laws to make such disclosure or such
disparaging remark; (iii) if, and to the extent required by any other applicable
law provided that such party uses reasonable efforts to limit the disclosure or
disparaging statement by means of a protective order or a request for
confidential treatment and provides the other party a reasonable opportunity to
review the disclosure or disparaging statement before it is made and to
interpose its own objection thereto.
Without limiting the above in any manner, no party to this Agreement shall
make any public or private statement regarding any other party to this Agreement
without first disclosing to the other party the statement that is intended to be
made and the identity of the person or entity to whom it is intended to be made
(and affording the other party an opportunity to make a counter or responding
statement), except that either party may state, to any person or entity, and
without the prior consent of any other party, the following: "The venture
between Metro and Fanzine did not work out to the satisfaction of either party,
and each party believed that its business interests would be better served by
progressing independently of each other. As a result, an amicable separation
took place, so that neither party has any farther ties or obligations to the
other for any purpose." The Metro Group and the Fanzine Group shall consult with
each other for the purpose of the drafting and release of any public
notification or governmental filings deemed necessary or desirable with respect
to the rescission undertaken herein.
7. Cooperation. The parties hereto shall each, promptly upon request,
deliver, or cause to be promptly delivered to the others, such additional
documents, instruments or writings prepared by the requesting party as may be
reasonably necessary for the purpose of carrying out this Rescission Agreement
and/or to effect the Rescission and the transactions contemplated by this
Agreement, including (but not limited to any UCC forms and/or US Patent and
Trademark forms necessary to perfect the security interest set forth in the
Goldtree Security Agreement and/or the Fanzine Security Agreement. The parties
shall also cooperate with each other in order to make all necessary financial
disclosure to the SEC and any tax filings with the IRS.
8. Headings, Construction, assignability. The headings contained in this
Rescission Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement. All words used in this
Agreement will be construed to be of such gender or number as the circumstances
require. Unless otherwise expressly provided, the word "including" does not
limit the preceding words or terms; and the words "hereof' and "hereunder" and
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similar references refer to this Agreement in its entirety and not to any
specific paragraph or subparagraph hereof. This Agreement, the Exhibits annexed
hereto, and the benefits accruing to any party hereunder or in any Exhibit
hereto, may be assigned by any party at any time; provided, however, that such
assignment shall not effect or eliminate any liabilities or obligations of any
party set forth in this Agreement or in any Exhibit annexed hereto, which
liabilities and/or obligations shall remain in full force and effect
notwithstanding any assignment.
9. Counterparts with Faxes. This Agreement may be executed in one or more
counterpart copies. Each counterpart copy shall constitute an agreement and all
of the counterpart copies shall constitute one fully executed agreement. This
Agreement may be executed on facsimile counterparts. The signature of any party
to any counterpart shall be deemed a signature to, and may be appended to, any
other counterpart.
10. Representation. Each of the parties hereto has had an opportunity to
review this Agreement and the Exhibits annexed hereto with its respective
attorneys. No adverse inference or conclusion shall be drawn with respect to the
construction of this Agreement or the Exhibits attached hereto based upon the
drafting of the Agreement by one party or another.
11. Entire Agreement. All prior statements, agreements, representations and
warranties, if any, regarding the subject matter hereof, are totally superceded
by and merged into this Agreement, which represents the final and sole agreement
of the parties with respect to the matters which are the subject hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above-written.
METRO GLOBAL MEDIA, INC.
By: /s/ Xxxxx Xxxx
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XXXXX XXXX,
TREASURER
FANZINE INTERNATIONAL, INC.
By: /s/
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GOLDTREE PUBLISHING, INC.
By: /s/
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/s/ Xxxxxx Xxxxxxx
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XXXXXX XXXXXXX
/s/ Xxxxxx X. Xxxxxxxxx
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XXXXXX X. XXXXXXXXX
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/s/ Bart Senior
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BART SENIOR
/s/ Xxxxxxx Xxxxxx
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XXXXXXX XXXXXX
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