ASSIGNMENT AGREEMENT AND GENERAL RELEASE
This Assignment and General Release (the "Agreement") is effective as of
December 20, 2004, and is by and among Motorsports Emporium, Inc., (formerly Ten
Stix, Inc.), a Nevada corporation ("Motorsports"), Xxxxxx X. Xxxxxx ("Xxxxxx"),
Xxxx X. Xxxxxxxx ("Xxxxxxxx"), and Ten Stix Gaming, Inc., a Colorado corporation
("TSG").
RECITALS
A. Whereas, Ten Stix Gaming, Inc., a Colorado corporation ("TSG"), is a
wholly-owned subsidiary of Motorsports Emporium, Inc., (formerly Ten Stix,
Inc.).
B. Whereas, TSG was organized pursuant to that certain Management Severance
Agreement, dated June 30, 2004, between Motorsports, Xxxxxx, Xxxxxxxx and Xxxxxx
Xxxxx, which provided among other things that (i) Xxxxx would loan or arrange a
loan to Motorsports of $185,000 in order for Motorsports to satisfy the
Stipulation entered into between Motorsports and Rapid Funding, LLC, (ii) all
gaming related assets related to Motorsports' gaming business were to be
assigned and transferred to TSG, (iii) Xxxxxx and Xxxxxxxx were to resign as
officers and directors of Motorsports, (iv) TSG would assume all liabilities and
obligations of Motorsports relating to the gaming assets, (v) upon the
assignment of the gaming related business assets by Motorsports to TSG and the
assumption of the liabilities and obligations associated with those assets,
Xxxxxx and Xxxxxxxx would be appointed as the officers and directors of TSG, and
(vi) Motorsports would assign and transfer 80% of the common stock of TSG to
Xxxxxx and Xxxxxxxx in consideration of their forgiveness of any and all unpaid
accrued payroll, compensation, obligations, advances and loans due and owing by
Motorsports, obligations o and the release of Motorsports, its officers,
directors, consultants, attorneys, etc., of all claims.
C. Whereas, the Management Severance Agreement further anticipated the
execution of Consulting Agreements with Xxxxxx and Xxxxxxxx, under which Xxxxxx
and Xxxxxxxx shall receive an aggregate of $60,000 for consulting services to
Motorsports in the transition of gaming operations to TSG, and TSG shall receive
an additional $40,000 for transitional and spin-off related costs.
D. Whereas, on July 1, 2004, Edify Capital Group, Inc., loaned $185,000 to
Motorsports.
E. Whereas, on September 26, 2004, both Xxxxxx and Xxxxxxxx resigned as
officers and directors of Ten Stix.
F. Whereas, pursuant to that certain Assignment and Assumption Agreement,
effective as of November 4, 2004, all gaming related assets of Motorsports were
assigned to TSG.
G. Whereas, between October 19, 2004 and November 5, 2004, pursuant to
those certain Assignment, Assumption and Release Agreements, certain liabilities
and obligations of Motorsports relating to the gaming related assets and
business were assigned by Motorsports to TSG, assumed by TSG and Motorsports was
released from said liabilities by those creditors.
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H. Whereas, Xxxxxx and Xxxxxxxx have been appointed as the officers and
directors of TSG and have been operating TSG on behalf of Motorsports.
I. Whereas, on November 24, 2004, Motorsports through its wholly-owned
subsidiary, Scottsdale Diecast, Inc., an Arizona corporation, acquired the
assets of Scalecars Ltd., and changed its principal business to selling die cast
scale cars and motor sports accessories.
J. Whereas, Xxxxxx and Xxxxxxxx have expressed their desire to acquire 100%
of the outstanding stock of TSG from Motorsports rather than only 80%.
K. Whereas, Motorsports has agreed to desires to divest itself of 100% of
its interest in TSG and the gaming related business rather than 80% as set forth
in the Management Severance Agreement, in consideration of the full release and
waiver of Motorsports and the Released Parties as set forth herein, of any and
all obligations and performance due and owing by Motorsports to TSG, Xxxxxxxx
and Xxxxxx, including without limitation, the payment of any deferred and unpaid
accrued salaries, compensation, loans to and on behalf of the corporation,
reimbursement and/or any other claims, by TSG, Xxxxxx and Xxxxxxxx of, and in
full satisfaction thereof, Motorsports has agree to assign and transfer to
Xxxxxx and Xxxxxxxx, and Xxxxxx and Xxxxxxxx agree to accept an aggregate of
1,100,000 shares of common stock of TSG (the "Shares"), 550,000 shares to Xxxxxx
and 550,000 shares to Xxxxxxxx. Notwithstanding the above, the provision of the
Management Severance Agreement which provides for the execution of Consulting
Agreements with Xxxxxx and Xxxxxxxx, under which Xxxxxx and Xxxxxxxx shall
receive an aggregate of $60,000 for consulting services from Motorsports shall
remain in full force.
Now therefore, the Parties agree as follows:
AGREEMENT
1. Assignment of Shares. In consideration of the full release and waiver of
all deferred salary, reimbursement, and/or any other claims, by TSG, Xxxxxx and
Xxxxxxxx of Motorsports, as set forth herein, Motorsports hereby assigns,
transfers and irrevocably conveys 550,000 restricted shares of common stock of
TSG to Xxxxxx X. Xxxxxx and 550,000 restricted shares of common stock of TSG to
Xxxx X. Xxxxxxxx, which shares represent 100% of the issued and outstanding
shares of Ten Stix Gaming, Inc.
2. Release by TSG, Xxxxxx and Xxxxxxxx.
(a) In consideration of the assignment of 100% of the issued and
outstanding shares of TSG, to Xxxxxx and Xxxxxxxx, as set forth above, with
the exception of the provision of the Management Severance Agreement which
provides for the execution of Consulting Agreements with Xxxxxx and
Xxxxxxxx, under which Xxxxxx and Xxxxxxxx shall receive an aggregate of
$60,000 for consulting
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services which shall survive this agreement and remain in full force, TSG,
Xxxxxx and Xxxxxxxx, for themselves and on behalf of any and all of their
affiliates, predecessors, officers, directors, shareholders, successors and
assigns hereby discharge and release Motorsports, and its assigns,
officers, directors, attorneys, agents, consultants, representatives,
principals, predecessors and successors in interest, including without
limitation, Xxxxx Xxxxxxxx, Xxxxxx Xxxxx, Xxxxxxx & Xxxxxxx, LLP and its
attorneys (the "Released Parties"), from any and all claims, demands,
obligations pursuant to any agreement, liabilities, or causes of action of
any nature whatsoever that TSG, Xxxxxx and Xxxxxxxx may now have or
hereinafter acquire against the Released Parties, and TSG, Xxxxxx and
Xxxxxxxx, hereby waive application of California Civil Code Section 1542.
(b) TSG, Xxxxxx and Xxxxxxxx, hereby acknowledge and agree that this
release applies to all claims for all injuries, damages, performance under
any verbal or written agreement, losses or alleged claims or causes of
action to Assignees, their property, or interest whether those injuries,
damages, losses, or rights are known or unknown, foreseen or unforeseen, or
patent or latent that Assignees may now have or may hereinafter accrue.
Assignees hereby waive application of California Civil Code Section 1542,
which states:
"A general release does not extend to claims which the creditor
does not know or suspect 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."
(c) TSG, Xxxxxx and Xxxxxxxx fully understand and acknowledge the
significance and consequences of the waiver of California Civil Code
Section 1542 in that if they should suffer or discover damages or losses or
claims against the Released Parties, they will not be able to make any
claim for those damages or losses, or seek to rescind this Agreement.
Furthermore, TSG, Xxxxxx and Xxxxxxxx acknowledge that they intend these
consequences even as to potential claims that may exist as of the date of
the signing of this Agreement but which TSG, Xxxxxx and Xxxxxxxx do not
know exist, or if known, would have materially affected the decision of
TSG, Xxxxxx and Xxxxxxxx to execute this Agreement.
(d) TSG, Xxxxxx and Xxxxxxxx acknowledge and represent that they have
been apprised of all relevant information and data to their satisfaction.
TSG, Xxxxxx and Xxxxxxxx acknowledge that they are represented by
independent counsel of their own choosing or have voluntarily chosen not to
seek advice of counsel. TSG, Xxxxxx and Xxxxxxxx further acknowledge and
represent that in executing this release they have not relied on any
inducement, promise or representation made by any other party.
(e) TSG, Xxxxxx and Xxxxxxxx represent that they have carefully read
and understand all the provisions of this release, and TSG, Xxxxxx and
Xxxxxxxx are voluntarily entering into this release. The benefits of this
release shall inure to Motorsports, and its assigns, officers, directors,
attorneys, agents, consultants, representatives, principals, predecessors
and successors in interest, including without limitation, Xxxxx Xxxxxxxx,
Xxxxxx Xxxxx, Xxxxxxx & Xxxxxxx, LLP and its attorneys (the "Released
Parties")
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3. All Necessary Actions. Motorsports, TSG, Xxxxxx and Xxxxxxxx, agree to
execute and deliver the documents reasonably necessary to effectuate the
transfer, assignment and setting over of the shares to Xxxxxx and Xxxxxxxx as
set forth herein.
4. Cooperation of Xxxxxx, Xxxxxxxx and TSG and Special Power of Attorney.
(a) Cooperation. Xxxxxx, Xxxxxxxx and TSG agree to fully cooperate
with Motorsports and its auditors in the preparation of any periodic,
quarterly or annual reports required to be filed by Motorsports which
require information pertaining to TSG, and agree to provide all
information, documents, bank statements, invoices or other supporting
documentation or information required by the independent auditors for
Motorsports.
(b) Special Power of Attorney; Attorney-In-Fact. TSG, Xxxxxx and
Xxxxxxxx, hereby grant to Xxxxx Xxxxxxxx, President of Motorsports, a
special power of attorney irrevocably making, constituting and appointing
Xxxxx Xxxxxxxx as attorney in-fact for TSG, Xxxxxx and Xxxxxxxx, with power
and authority to act in their name and on their behalf to obtain from any
person or entity, including without limitation any financial institution,
creditor, supplier, vendor or service provider, any information, documents,
bank statements, invoices or other supporting documentation or information
required by the independent auditors for Motorsports, as required for
Motorsports to prepare and file any required periodic, quarterly, annual
report.
(c) Special Provisions. The Special Power of Attorney being granted by
TSG, Xxxxxx and Xxxxxxxx, (i) is a special power of attorney coupled with
an interest, (ii) is irrevocable, (iii) shall survive the death or
incapacity of either Xxxxxx or Xxxxxxxx, (iv) is limited to the matters set
forth in this section 4, and (v) provided this Agreement is executed and
the transactions contemplated hereby are consummated on or before December
31, 2004, the Special Power of Attorney being granted hereby shall expired
on December 31, 2005.
(d) Signatures. Xxxxx Xxxxxxxx may exercise the special power of
attorney on behalf of TSG, Xxxxxx or Xxxxxxxx by a facsimile signature
acting as an attorney-in-fact for TSG, Xxxxxx or Xxxxxxxx.
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5. Miscellaneous Provisions.
(a) Notices. All notices, requests, demands and other communications
under this Agreement, shall be in writing and shall be deemed to have been
duly given on the date of service if served personally on the party to whom
notice is to be given or within five (5) business days if mailed to the
party to whom notice is to be given, by first-class mail, registered, or
certified, postage prepaid and properly addressed as follows:
If to TSG, addressed to:
-----------------------
Ten Stix Gaming, Inc.
00000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
If to Xxxxxxxx, addressed to:
----------------------------
Xxxx X. Xxxxxxxx.
00000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
If to Xxxxxx, addressed to:
---------------------------
Xxxxxx X. Xxxxxx
0000 Xxxxxxxxx Xxxxx
Xxxxx Xxxxxxx, XX 00000
If to Motorsports, addressed to:
--------------------------------
Motorsports Emporium, Inc.
Attn: Xxxxx Xxxxxxxx
00000 X. Xxxxxxx Xxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
(b) Further Assurances. Each of the Parties to this Agreement agrees
to perform such further acts and to execute and deliver any and all further
documents that may reasonably be necessary or desirable to effectuate the
purpose of this Agreement, such as appropriate requests for dismissal of
actions with any and all judicial and/or administrative agencies.
(c) Arbitration. The Parties agree that any and all disputes, claims
or controversies arising out of or relating to this Agreement shall be
resolved by final and binding arbitration as the exclusive remedy. Either
party may commence the arbitration process by filing a written demand for
arbitration with J.A.M.S./ENDISPUTE, or its successor, in San Diego County,
California, and sending a copy to the other party. If the Parties are
unable to agree upon an arbitrator from the list provided, the Parties
shall alternate in striking names of arbitrators from the list until one is
left, who shall be the Parties' arbitrator. The first party to strike the
names of arbitrators from the list until one is left shall be the party who
or which initially filed the written demand for arbitration. The Parties
will cooperate in scheduling the arbitration proceedings. The arbitration
will be conducted in accordance with the provisions of J.A.M.S./ENDISPUTE's
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Comprehensive Arbitration Rules and Procedures in effect at the time of
filing of the demand for arbitration. The Parties specifically incorporate
the terms of California Code of Civil Procedure Section 1283.05 with
respect to discovery. Should a non-party witness refuse to comply with a
subpoena issued by the arbitrator and the arbitrator is unable to enforce
compliance with the subpoena, the Parties agree to submit the subpoena to a
Court of competent jurisdiction for enforcement of the subpoena. The
arbitrator is authorized to award any remedy allowed by the Agreement or by
applicable law.
(d) Entire Agreement. This Agreement constitutes the entire Agreement
between the Parties, and there are no other agreements modifying its terms.
The terms of this Agreement can only be modified by a writing signed by all
of the parties which expressly states that such modification is intended,
and this Agreement cannot be amended by a partially or fully executed oral
modification.
(e) Governing Law. This Agreement shall be governed by, construed and
enforced in accordance with the laws of California. This Agreement shall be
deemed made and entered into in Xxx Xxxxx Xxxxxx, Xxxxx xx Xxxxxxxxxx,
Xxxxxx Xxxxxx of America; however, it is intended to resolve all claims,
known or unknown, of TSG, Xxxxxx and Xxxxxxxx, in any jurisdiction.
(f) Interpretation of Agreement. This Agreement shall not be construed
against any party on the basis that his, her or its attorney drafted it as
each Party and their respective legal counsel has had an opportunity to
review, make comments, changes and modifications to the Agreement prior to
its execution.
(g) Signature in Counterpart. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
(h) Independent Advice of Counsel. The Parties hereto, and each of
them, represent and declare that in executing this Agreement they relied
solely upon their own judgment, belief, knowledge and the advice and
recommendations of their own independently selected counsel, concerning he
nature, extent, and duration of their rights and claims, and that they have
not been influenced to any extent whatsoever in executing the Agreement by
any representations or statements covering any matters made by any other
party or that party's representatives hereto, or have voluntarily chosen
not to seek advice of counsel.
(i) Successors. This Agreement shall be binding upon the Parties and
their heirs, representatives, administrators, successors and assigns, and
shall inure to the benefit of the released parties and each of them, and to
their heirs, representative, successors and assigns.
(j) Severability. If any provision of this Agreement is held by a
Court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions shall nevertheless continue in full force without
being impaired or invalidated in any way.
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(k) Attorneys' Fees and Costs. In the event any action at law or
equity between or among the parties hereto is required to enforce any of
the provisions of the Agreement, the unsuccessful party of such action
covenants and agrees to pay the successful party all costs and expenses,
including attorneys' fees and if such successful party shall recover a
judgment in any action or proceeding, such costs, expenses and attorneys'
fees shall be included in and a part of such judgment.
IN WITNESS HEREOF, the parties hereto as evidence of their agreement to the
terms of this Agreement have executed this Agreement on the date set forth
opposite their respective names below.
MOTORSPORTS EMPORIUM, INC.
(formerly Ten Stix, Inc.)
/S/ Xxxxx Xxxxxxxx
Date: December 20, 2004 ------------------------------
By: Xxxxx Xxxxxxxx
Its: President
TEN STIX GAMING, INC.
/S/ Xxxx X. Xxxxxxxx
Date: December 20, 2004 ------------------------------
By: Xxxx X. Xxxxxxxx
Its: President, CEO
and Director
/S/ Xxxxx Xxxxxxxx
Date: December 20, 2004 ------------------------------
By: Xxxxx Xxxxxxxx
Its: Secretary, Treasurer
and Director
/S/ Xxxxxx X. Xxxxxx
Date: December 20, 2004 ------------------------------
Xxxxxx X. Xxxxxx, individually
/S/ Xxxx X. Xxxxxxxx
Date: December 20, 2004 ------------------------------
Xxxx X. Xxxxxxxx, individually
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