RELEASE OF CLAIMS AND ASSUMPTION OF
LIABILITIES
This RELEASE OF CLAIMS AND
ASSUMPTION OF LIABILITIES (this "Agreement") is executed effective
as of September 29, 2006 (the " Effective Date
"), by and among HARRELL HOSPITALITY GROUP, INC. , a
Delaware corporation (" HHG ") and Paul L. Barham , an individual
(" Barham "), Clive Russell , an individual ("
Russell "), Geoffrey Dart , an individual ("
Dart "), and Apsley Estates, Ltd . ("
Apsley ") (collectively, Barham, Russell, Dart and
Apsley are called the " Purchasers ")
P R E M I S E
S:
WHEREAS
, HHG is the owner of 100% of
the issued and outstanding common stock of Hotel Management Group,
Inc., a Texas corporation (the " Company
");
WHEREAS
, HHG owes the Purchasers
individually various amounts for accrued but unpaid compensation
(in the aggregate, the " Payables "). Specifically,
HHG owes (i) Barham approximately $164,875 for unpaid salary and
automobile allowance; (ii) Russell $70,574 for unpaid directors
fees and for the principal and accrued interest owing on a loan
made from Russell to HHG, (iii) Dart $11,290 for unpaid directors
fees, and (iv) Apsley $94,125 for unpaid consulting fees. In
addition, HHG has liabilities to certain employees for accrued
vacation that total $38,538 (the " Liabilities
").
WHEREAS
, HHG and the Purchasers
entered into that certain Stock Purchase Agreement dated August 28,
2006 (the "Stock Purchase Agreement") whereby HHG agreed to sell
the stock of the Company to the Purchasers in exchange for
cancellation of the Payables, assumption of the Liabilities and for
other consideration.
WHEREAS
, HHG and the Purchasers
desire to set forth their agreements regarding cancellation of the
Payables and assumption by the Purchasers of the
Liabilities.
A G R E E M E N
T:
NOW,
THEREFORE , in
consideration of the foregoing premises and the mutual covenants
hereinafter contained and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged,
Purchasers and HHG hereby agree as follows:
ARTICLE I
ASSUMPTION OF
LIABILITIES
1.01 Assumption of
the Liabilities . Purchasers hereby jointly and severally
assume payment of the Liabilities. Specifically, Purchasers
additionally agree to indemnify and hold HHG harmless from any
loss, cost or expense (including attorneys fees) relating to or
arising out of vacation, personal leave or sick leave claims by
employees of HHG that accrued through September 30, 2006,
specifically including but not limited to any claims by Paul L.
Barham, Jonathan Tripp and Tom Gillespie.
ARTICLE II
RELEASE OF CLAIMS
2.01 Release by
Barham . Barham hereby releases HHG from payment of any
portion of the Payables owing to him. In addition, Barham
represents and warrants to HHG that, other than the Payables and
the Liabilities and the rights that may accrue to Barham as a
shareholder, there are no other fees, salaries, or amounts owed to
or claimed by Barham from HHG or its affiliates.
2.02 Release by
Russell . Russell hereby releases HHG from payment of any
portion of the Payables owing to him. In addition, Russell
represents and warrants to HHG that, other than the Payables, there
are no other fees, salaries, or amounts owed to or claimed by
Russell from HHG or its affiliates.
2.03 Release by
Dart . Dart hereby releases HHG from payment of any portion
of the Payables owing to him. In addition, Dart represents and
warrants to HHG that, other than the Payables, there are no other
fees, salaries, or amounts owed to or claimed by Dart from HHG or
its affiliates.
2.04 Release by
Apsley . Apsley hereby releases HHG from payment of any
portion of the Payables owing to it. In addition, Apsley represents
and warrants to HHG that, other than the Payables, there are no
other fees, salaries, or amounts owed to or claimed by Apsley from
HHG or its affiliates.
ARTICLE III
MISCELLANEOUS
3.01 Further
Actions . From time to time, as and when requested by
Purchasers or HHG, HHG or Purchasers shall execute and
deliver,
