RELEASE AGREEMENT
This RELEASE AGREEMENT (this "Agreement"), which shall be effective as of
June 1, 2001 (the "Effective Date") is made as of June 1, 2001, by and between
Total Film Group, Inc., ("TFG") and Xxxxxx Xxxxx ("Green") and Xxxxxxxx Xxxxx
("Xxxxxxxx Xxxxx").
RECITALS
X. Xxxxx and Xxxxxxxx Xxxxx have been employees and directors of TFG and
certain of its subsidiaries.
B. TFG and Green and Xxxxxxxx Xxxxx desire to settle any disagreements
between them with regard to the Green's and Xxxxxxxx Xxxxx'x employment and
service as directors and any other agreement, oral or written, express or
implied, made by, on behalf or for the benefit of TFG or Green or Xxxxxxxx Xxxxx
between TFG and Green and Xxxxxxxx Xxxxx, and any and all claims arising from
the fact that Green and Xxxxxxxx Xxxxx were employees and directors of TFG and
its subsidiaries and to provide for the release of obligations as set forth
herein.
NOW, THEREFORE, in consideration of the premises and of the respective
covenants, agreements, obligations, and promises set forth below, the parties
hereto agree as follows:
1. PAYMENT OF SETTLEMENT AMOUNT.
(a) CASH PAYMENT. TFG shall pay to Green the sum of Fifty Thousand
Dollars ($50,000), in immediately available funds by not later than the
Effective Date, in full and complete satisfaction of all obligations of TFG
and its subsidiaries to Green under any agreement or understanding, oral or
written, express or implied, including without limitation any agreement or
obligation with regard to any cash or equity compensation allegedly owed to
Green for services rendered prior to the Effective Date. TFG acknowledges and
agrees that Green will continue as an employee of TFG, and shall be
compensated as such, through May 31, 2001. Green agrees that he is not
entitled to any further payments, whether cash, equity, or otherwise, from
TFG or any of its subsidiaries, officers, employees or affiliates, except for
any payments from TFG which may become due to him solely by his status as a
holder of shares of common stock of TFG.
(b) FILM RIGHTS ASSIGNMENT. TFG hereby assigns to Green or his assigns all
its right, title and interest in and to the following motion pictures (the
"Films"):
Name Expenses
Rosenstrasse $ 10,687.82
Xxxxxxx Xxxxxx 40,057.84
Lion Cult 13,831.30
Hidden Force 26,018.49
2605 - Heresy 149,987.53
Pirates of Tarutao 21,086.59
TFG hereby waives any right of recovery of development expenses with respect to
the Films in the amounts not to exceed the amount set forth above for each such
Film, and in the aggregate of $261,669.57. Green agrees and acknowledges that
any expenses arising in connection with any Film from and after the Effective
Date, whether or not such expense was incurred prior to the Effective Date,
shall be solely the liability of Green and TFG and its subsidiaries shall in no
event be liable for any expenses with respect to any Film in excess of the
amount set forth above for each such Film, and in the aggregate of $261,669.57.
All files and other documentation relating to the Films shall remain the sole
property of TFG. Green shall have the right, upon reasonable notice and solely
at Green's expense, to request that TFG promptly provide copies of such material
to Green at commercially reasonable rates. Notwithstanding the foregoing, TFG
shall make available any and all documents in its possession necessary to
establish chain of title, proof of ownership, or other such matters as necessary
to the production, financing, distribution and exploitation of the Films; and
shall enter into, record and assign any and all documents necessary to assign
TFG's right, title and interest in and to the Films to Green as reasonably
required by Green, or financiers, lenders, completion bond companies,
distributors and others at interest in the production of the Films, promptly
upon Green's written request. In the event of TFG's breach of the foregoing
sentence, Green shall be entitled to seek injunction and other equitable relief,
without limiting the availability of any other remedies.
(c) STOCK PURCHASE. Green and Xxxxxxxx Xxxxx irrevocably agree to sell,
assign and transfer to TFG or its assigns a total of 1,470,000 shares (the
"Shares") of the common stock of TFG at a price per share of $0.21 for aggregate
consideration of Three Hundred Eight Thousand Seven Hundred Dollars ($308,700),
to be paid, in immediately available funds, not later than the Effective Date,
against delivery of duly executed stock assignments or certificates for the
Shares. Green and Xxxxxxxx Xxxxx represent and warrant to TFG that, as of the
Effective Date, Green and Xxxxxxxx Xxxxx own the Shares, beneficially and of
record, free and clear of any liens, pledges, encumbrances, charges, agreements
or claims of any person, association, corporation or legal entity.
(d) STOCK OPTION EXTENSION. On or prior to the Effective Date, TFG will
take all actions necessary, including obtaining the approval of TFG's board of
directors and majority stockholders, to amend Section 3 of that certain stock
option agreement (the "Stock Option") by and between TFG and Green dated July
27, 1998 to provide that the "Option" (as defined in the Stock Option) shall be
exercisable at any time prior to 12:00 midnight July 27, 2003.
(e) MEDICAL BENEFITS. TFG shall for a period of 12-months commencing the
Effective Date, at its option, (i) pay Green's monthly medical insurance
premiums pursuant to continuing COBRA coverage (the "Premium") in an amount not
to exceed $800.00 per month, (ii) pay a monthly sum equivalent to the Premium to
Green in cash each month, or (iii) at any time pay Green the aggregate amount of
all monthly Premiums remaining to be paid at such time.
(f) Concurrently with the execution of this Agreement, TFG shall execute
and deliver to Xxxxxxxx Xxxxx a promissory note substantially in the form of
attached hereto as EXHIBIT A in satisfaction of Xxxxxxxx Xxxxx'x previous loan
to TFG of $120,000.
(g) TFG shall, to the extent required by applicable law, continue to
defend and indemnify Green, and Xxxxxxxx Xxxxx, from and against any and all
claims, suits or actions commenced by any third party against them, arising out
of any actions or inactions undertaken by them in their capacities as officers,
directors, employees or agents of TFG.
2. OTHER AGREEMENTS.
(a) RESIGNATION. Green and Xxxxxxxx Xxxxx hereby resign from their
positions as employees and directors of TFG and its subsidiaries, which
resignations shall become effective on the Effective Date. Green and Xxxxxxxx
Xxxxx shall, no later than 5:00 p.m. Los Angeles time, May 31, 2001, convey to
an officer of TFG all TFG property held by or used by Green and Xxxxxxxx Xxxxx,
including, without limitation, all office keys, automobile keys, automobile
registration and related documents, cellular telephones, and TFG credit cards.
(b) STOCK OWNERSHIP. Green and Xxxxxxxx Xxxxx and TFG acknowledge and
agree that Green and Xxxxxxxx Xxxxx (including holdings of Green individually
and in his capacity as Trustee for Xxxxx Xxxxx, Xxxxxxxx Xxxxx, individually and
in her capacity as Trustee for Xxxxx and Xxxxxx Xxxxx, and, Green and/or
Xxxxxxxx Xxxxx indirectly through the Swan Group) are the beneficial owners of
1,470,000 shares of TFG's common stock and upon consummation of the purchase of
such stock pursuant to section 1(b) of this Agreement, Green and Xxxxxxxx Xxxxx
shall be the beneficial owners of no shares of TFG's common stock. Green and
Xxxxxxxx Xxxxx acknowledge and agree that other than Green's options to purchase
in aggregate 1,000,000 shares of common stock, they have no other equity
interest or any right to an equity interest in TFG or its subsidiaries.
(c) COOPERATION. Green and TFG acknowledge that as part of his duties,
Green contacted several individuals and/or entities regarding possible
alliances, ventures, business combinations, or other business opportunities with
TFG. Green agrees to use his good faith efforts to cooperate with TFG, to the
extent TFG requests such assistance, regarding any such opportunities issues or
disputes related to such contacts and to assist TFG in reasonably and equitably
pursuing such opportunities or resolving any and all such issues or disputes.
TFG expressly acknowledges and agrees that Green has not represented to TFG that
he will be able to cause any such individuals or entities to continue their
business relationships or discussions with TFG, and the failure or refusal of
any such individuals or entities to continue their relationships or discussions
with TFG shall not limit of diminish the rights of Green or the obligations of
TFG hereunder.
3. RELEASE.
(a) TFG, for itself and its present and former employees, directors,
officers, shareholders, lenders, consultants, partners, successors, affiliates,
assigns, agents, insurers or reinsurers, parents and subsidiaries (collectively
the "TFG Parties") on the one hand, and Green and Xxxxxxxx Xxxxx, and their
respective heirs and present and former employees, lenders, consultants,
partners, successors, affiliates, assigns, agents, insurers or reinsurers
(collectively, the "Green Parties") on the other hand, each hereby forever
release and discharge each other and any other person, firm, partnership,
company or corporation now, previously, or hereafter expressly and formerly
affiliated in any manner with any of the above (the "Released Parties") from any
and all claims, obligations, damages, and liabilities, in law or equity, whether
or not known, suspected or claimed, direct or indirect, fixed or contingent,
whether now existing or hereafter arising that any party may assert against the
Released Parties arising out of, or in any way related to or connected with,
Green's and Xxxxxxxx Xxxxx'x activities prior to the date hereof for or on
behalf of TFG, or their status as employees, consultants and directors of TFG or
its subsidiaries (the "Released Claims"), excluding those obligations of the
parties undertaken pursuant to this Agreement.
(b) It is expressly understood that the Released Claims include, without
limitation, any and all claims or causes of action against the Released Parties
based on theories of alter ego, principal-agent, conspiracy, successor
liability, fraudulent conveyance law, or the like, and include specifically,
without limitation, any and all claims or causes of action against the Released
Parties based upon Green's and Xxxxxxxx Xxxxx'x positions as employees,
consultants or directors of TFG and its subsidiaries.
(c) Each of the parties hereto acknowledge that they are familiar with the
provisions of California Civil Code Section 1542, which provides as follows:
A general release does not extend to claims which the creditor does
not know or expect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his
settlement with the debtor.
Each of the parties hereto acknowledge that they may have sustained damages,
losses, costs, or expenses by reason of an act, failure to act, event, or matter
that are presently unknown and unsuspected and that such damages, losses, costs,
or expenses as may have been sustained may give rise to additional damages,
losses, costs, or expenses in the future. Nevertheless, each party hereby
expressly waives any and all rights they may have under California Civil Code
Section 1542, or under any other state or federal statute, or common law
principle of similar effect relating to the Released Claims.
4. NO ORAL REPRESENTATIONS OR AGREEMENTS. No oral representations or
agreements not expressly included in this written Agreement have been made to,
or relied upon by, any of the parties hereto in conjunction with this Agreement.
This Agreement constitutes the entire agreement of the parties on the subject
matter hereof, and it is expressly understood and agreed
upon that this Agreement shall not be altered, amended, modified, or otherwise
changed by oral communication of any kind or character.
5. INDEMNITY REGARDING ASSIGNMENT OF CLAIMS. Each of the parties hereto
hereby represents to the other parties hereto that they have not heretofore
assigned, sold, transferred, pledged, or hypothecated, or purported to assign,
sell, transfer, pledge, or hypothecate, to any entity or individual, any claims
related to this Agreement. Each of the parties hereto hereby agrees to indemnify
and hold harmless the other parties hereto against any claim, demand, debt,
loss, obligation, liability, cost, expense (including reasonable attorneys'
fees), right of action to cause of action, based solely on, arising solely out
of, or solely in connection with, any such transfer, assignment, sale, pledge,
or hypothecation, or purported transfer, assignment, sale, pledge, or
hypothecation by such party.
6. CONFIDENTIALITY; NON-SOLICITATION NON-DISPARAGEMENT. (a) Each of Green
and Xxxxxxxx Xxxxx will not for a period of two years from the Effective Date,
directly or indirectly disclose any information considered confidential by TFG,
including but not limited to the terms of this Agreement, provided, however,
that the foregoing restriction shall not (i) extend to or include information
which is or becomes known other than as a result of a breach of this provision,
or (ii) prevent the disclosure of any information required by valid legal
process, including civil discovery, or to the extent necessary to defend a legal
action brought by any person or entity against them, or institute or prosecute
any legal action brought by them in good faith.
(b) Each of Green and Xxxxxxxx Xxxxx will not for a period of two years
from the Effective Date solicit or encourage any client, customer or other
business source of TFG's subsidiary Total Creative, Inc. ("TCI"), including but
not limited to the Thailand Government Tourist Office, to discontinue its
business relationship with TCI or TFG or otherwise interfere with such business
in any way. For a period of two years from the date hereof, each of Green and
Xxxxxxxx Xxxxx will not encourage or solicit any employee of TFG or its
subsidiaries to leave TFG or its subsidiaries for any reason; provided, however,
that TFG acknowledges and agrees that Green has had discussions with, and may
offer employment to, Ms. Xxxxx Xxxx.
(c) The TFG Parties shall not, at any time before, on or after the
Effective Date, disparage or otherwise negatively portray to third parties Green
or Xxxxxxxx Xxxxx. The Green Parties shall not, at any time before, on or after
the Effective Date disparage or otherwise negatively portray to third parties
the TFG Parties. Each party acknowledges and agrees that all of the foregoing is
a material element of this Agreement, and any breach of this provision by any
party would cause substantial and irreparable injury to the other party's
ongoing business for which there would be no adequate remedy at law.
Accordingly, in the event of any breach or attempted or threatened breach of any
of the terms of this provision, each party agrees that the other party shall be
entitled to seek injunctive and other equitable relief without the requirement
of posting bond, without limiting the applicability of any other remedies. TFG
agrees that is shall not issue any press releases regarding Green unless such
release shall have been previously approved by Green, or a period of 14-days
shall have elapsed subsequent to TFG's delivery to Green of such proposed press
release and Green shall not have objected to such press release in
writing.
7. COSTS AND EXPENSES. Each of the parties hereto shall bear his, her, or
its own costs and expenses incurred in connection with the negotiation,
drafting, and consummation of this Agreement.
8. SUCCESSORS, SUBSIDIARIES, AND ASSIGNS. This Agreement shall bind and
inure to the benefit of the principals, agents, representatives, successors,
heirs, and assigns of the parties hereto.
9. COUNTERPARTS. This Agreement may be signed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same Agreement, which shall be binding on
the parties hereto and their successors, subsidiaries and assigns.
10. CONSTRUCTION. The terms and language of this Agreement are the result
of negotiations between the parties and there shall be no presumptions that any
ambiguities in this Agreement should be resolved against any party hereto. Any
controversy concerning the construction of this Agreement shall be decided
without regard to authorship.
11. HEADINGS. Paragraph headings or captions contained in this Agreement
are used for reference only and shall not be deemed to govern or extend the
terms of this Agreement.
12. NECESSARY ACTS. Each of the parties hereto agrees to any and all acts
necessary and/or reasonably required in order to effectuate the purposes of this
Agreement or to comply with its terms.
13. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with California law, without regard to the conflicts of laws
provision thereof.
14. REPRESENTATION BY COUNSEL. Each party hereto represents and warrants
that it has been represented by counsel in connection with the negotiation,
preparation and execution of this Agreement.
15. FURTHER ASSURANCES. Each of the parties shall execute and deliver any
and all additional papers, documents and other assurances and shall do any and
all acts of things reasonably necessary in connection with the performance of
its obligations hereunder to carry out the express intent of the parties.
[signature page follows.]
IN WITNESS WHEREOF, the parties to this Agreement have executed this
Agreement as of the date first above written.
TOTAL FILM GROUP, INC.
By: ____________________________
Name:
Title
GREEN
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Xxxxxx Xxxxx
XXXXXXXX XXXXX
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Xxxxxxxx Xxxxx