AGREEMENT made as of this 26th day of February, 1998, by and between News
Communications., a New York corporation with offices at 000-00 Xxxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxx, Xxx Xxxx ("Seller") and Magazine Holding, Inc., a
Delaware corporation with offices at Xxxxx 0000, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx ("Purchaser").
WHEREAS, Seller owns 90% of the issued and outstanding voting common stock
of Manhattan File Publishing Corp. ("Manhattan File") and Purchaser owns 10% of
the issued and outstanding common shares of Manhattan File; and
WHEREAS, Seller desires to sell to Purchaser and Purchaser desires to
acquire 80% of the issued and outstanding voting common stock of Manhattan File
("Seller's Stock") from Seller.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, receipt of which is hereby acknowledged, the parties
hereto hereby agree as follows:
1. Closing
Simultaneously with the execution hereof Seller shall convey to
Purchaser and Purchaser shall acquire Seller's Stock represented by a stock
certificate or certificates delivered at 1251 Avenue of the Americas, New York,
New York, representing Seller's Stock free and clear of all liens and
encumbrances, and Purchaser shall deliver in exchange therefore a check in the
amount of $100 payable to Seller. Seller shall simultaneously deliver to
Purchaser the Manhattan File minute book, stock book and ledger, and seal.
2. Affirmative Covenants of Seller
Seller covenants and agrees that:
(a) All withholding taxes, i.e., Federal, State, City, Social Security, as
well as Medicare and Disability obligations, of Manhattan File, have been paid
to the date hereof or appropriate provision has been made for payment thereof
when due and will be paid by Seller.
(b) All employees of Manhattan File have been terminated as of the
closing.
(c) All utility, telephone and lease obligations relating to the business
and leased office space of Manhattan File have been made or provision for their
payment has been made through February 28, 1998 and will be paid by Seller.
(d) All commercial rent tax due under (c) above has been paid.
(e) Seller shall execute and deliver to Purchaser all necessary
instruments and documents required to transfer ownership and control of the
business of Manhattan File to Purchaser as provided herein, including the
delivery of a letter to Chase Manhattan Bank changing the signatories on the
Manhattan File Bank account.
3. Seller's Representations and Warranties.
Seller represents and warrants to Purchaser as follows:
(a) To the best of Seller's knowledge, there is no outstanding litigation
pending or, to Seller's knowledge, threatened against Manhattan File except as
related to the collection of receivables.
(b) To the best of Seller's knowledge, the payables have been properly set
forth in all respects on Appendix B and Seller knows of no other payables
contingent or otherwise.
4. Receivables and Payables.
Purchaser agrees to use its best efforts to collect all outstanding
receivables totaling as of February 18, 1998, an aggregate of $550,000 as set
forth on Appendix A. Reasonable costs incurred in collection efforts may be
charged by Purchaser. Seller agrees that Purchaser may apply any proceeds
received from the collection of receivables toward the payment of outstanding
payables which on February 18, 1998 totaled an aggregate of $300,000 as detailed
in Appendix B. Seller agrees that any amounts received as a result of litigation
currently pending to collect various of the receivables shall be applied, after
the payment of applicable reasonable attorney's fees, towards the payment of
payables.
5. Indenture
Purchaser herewith grants Seller a lien and indenture with respect
to any amount of receivables hereinafter collected by Purchaser to the extent
such receivables may exceed by any amount the outstanding payables, and
Purchaser herewith grants to Seller a lien and preferred right of indenture with
respect to any such excess collected receivables. Purchaser shall promptly pay
over to Seller any such excess collected receivables. Upon Seller's request,
Purchaser shall provide Seller with a monthly report of the status of the
collection of outstanding receivables.
6. Mutual Covenants
The parties agree to cooperate with one another in good faith in
order to effectuate a harmonious and positive transition of ownership in all of
their dealings with media, personnel, financial institutions, etc.
7. Governing Law: Disputes
This Agreement shall be governed by the laws of the State of New
York. In the event of any dispute arising out of this Agreement, the parties
agree to submit such dispute for resolution to arbitration before the American
Arbitration Association in New York City and each party will bear its respective
costs thereof.
8. No Obligations
Except as otherwise provided in this Agreement, Seller shall have no
further obligations to Purchaser or Manhattan File with respect to any
liabilities or obligations of Manhattan File.
9. The Agreement dated as of January 12, 1993 between News Communications
and Xxxxxxxx Xxxxxxx is herewith cancelled and made null and void in all
respects, and neither party hereto shall have any obligation to the other
thereunder.
10. Buyer shall obtain prior approval from Seller in the event of a sale
of any shares of Manhattan File to a publisher operating in the Hamptons.
11. Buyer acknowledges that Seller produces publications in New York City
and in the Hamptons and will continue to do so and will not be limited in the
scope of its activities except that Seller will not use the trademark or name
Manhattan File.
12. To the extent that Seller has any records or documents on the
Manhattan File premises and will afford Seller reasonable opportunity to
retrieve these within one month from the date hereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
in their respective names as of the day and year first above written.
Attest: NEWS COMMUNICATIONS, INC.
___________________ /s/ Xxxxxx X. Xxxx, Xx.
----------------------------
Chief Executive Officer
Attest: MAGAZINE HOLDINGS, INC.
___________________ By: Xxxxxxxx Xxxxxxx
----------------------------
President
