CANCELLATION OF INDEBTEDNESS AGREEMENT
This
Cancellation of Indebtedness Agreement is entered into and effective as of
July
1, 2007 (the "Effective Date-). by and between Xxxxx Xxxxxxxx Xxxxxxxxx
("SMR-), and Platinum Studios, Inc., a California corporation (the
"Company"), with reference to the following:
WHEREAS,
the Company was formed in September 2006 as a successor-in-interest to Platinum
Studios, LLC, a California limited liability company (the "LLC") and SMR
serve
as and executive officer and director of the Company and holds a majority
of its
outstanding capital stock;
WHEREAS,
throughout the existence of the LLC, SMR was either the sole member of the
LLC
or the member who held a super majority of the membership interests in the
LLC;
WHEREAS,
during the existence of the LLC, in addition to capital contributions, SMR
also
made personal loans to the LLC, which loans were assumed by the Company when
the
LLC converted into a corporation, the dates, amounts and applicable interests
rates of which loans are set forth on Schedule A attached hereto (collectively,
the "SMR LLC Loans");
WHEREAS,
since the inception of the Company through the Effective Date, SMR has made
personal loans to the Company, the dates, amounts and applicable interest
rates
of which are set forth on Schedule B attached hereto (the "SMR Company
Loans");
WHEREAS,
the SMR I,LC Loans and the SMR Company Loans are collectively referred to
as the
SMR Loans;
WHEREAS,
the Board of Directors of the Company has determined it to be in its best
interests of the Company and its shareholders to conserve working capital
of the
Company and to pay off the SMR Loans through the issuance of stock and
warrants;
WIIEREAS,
SMR is amendable to the cancellation of the SMR Loans through the issuance
of
stock and warrants;
NOW,
THEREFORE, the parties agree as follows:
1.
Cancellation of Indebtedness. Simultaneous with the execution of this
Agreement by the parties hereto and the delivery to SMR of the Stock Certificate
and the Warrant as defined in Section 2 below (the "Cancellation Date"),
SMR
hereby irrevocably cancels all indebtedness owed to SMR under the SMR Loans,
including all principal and interest accrued and owing thereon through the
Cancellation Date, and releases the Company from any liability or obligation
with respect to the SMR Loans.
2.
Stock Certificate and Warrant. In exchange for the cancellation of
indebtedness as set forth in Section 1, above, and the Company's release
from
any liability and obligation under the SMR Loans, the Company agrees to issue
as
of the Cancellation Date:
(a)
a stock certificate for the number of shares of the Company's common stock
equal
to the amount of the SMR Loans (outstanding principal and interest through
the
Cancellation Date) divided by $0.10 (the "Stock Certificate"); and
(b)
a common stock purchase warrant to purchase a number of shares of the Company's
common stock equal to 15% of the SMR Loans (principal only) divided by $0.10
per
share, at an exercise price of $0.10 per share, substantially in the form of
Exhibit "A" attached hereto (the "Warrant").
In
connection herewith, SMR directs the Company to issue the Stock Certificate
and
the Warrant in the name of Xxxxxxxxx Xxxxxxxxx.
3.
Governing Law; Attorneys' Fees. This Agreement shall be governed by and
construed in accordance with the laws of the State of California, without regard
to principles of conflicts of law. If any suit, action, or proceeding is brought
to enforce any term or provision of this Agreement, the prevailing party shall
be entitled to recover reasonable attorneys' fees, costs, and expenses incurred,
in addition to any other relief to which such party may be legally
entitled.
4.
Entire Agreement. This Agreement constitutes the only agreement or
understanding between the parties with respect to the subject mater hereof,
and
supersedes and is controlling over any and all prior existing agreements or
communications between the parties. All negotiations, commitments, and
understandings acceptable to both parties have been incorporated in this
Agreement and the accompanying termination letter.
5.
Amendment. This Agreement may not be amended except as mutually agreed to
in writing by the parties.
IN
WITNESS WHEREOF, the parties to this Agreement have executed the same as of
the
date first above written.
By
: /s/
Xxxxx Xxxxxxxxx
Xxxxx Xxxxxxxxx, President
/s/ Xxxxx
Xxxxxxxx Xxxxxxxxx
Xxxxx Xxxxxxxx Xxxxxxxxx
