This Mutual
Release Agreement (“this Agreement”) is made and
entered into as of May 19, 2006, by and between Paul A. Kruger
(“Kruger”) and Dirt Motor Sports, Inc., a Delaware
corporation (the “Company”). Kruger and the Company are
sometimes each referred to herein as a “Party” and
collectively, as the “Parties”.
WHEREAS ,
Kruger and the Company have entered into that certain Term Sheet
for Paul Kruger Transition with Dirt Motor Sports, Inc., dated
February 24, 2006 (the “Term Sheet”);
and
WHEREAS ,
Kruger and the Company expressly agree and understand that the
consideration for Kruger’s waiver of rights or claims
described herein consists of the consummation of the transactions
described in the Term Sheet, which consideration exceeds that to
which Kruger is already entitled; and
WHEREAS,
Company expressly agrees that it has received good and valuable
consideration for the execution of this Agreement as provided by
the mutual covenants contained herein and the consummation by
Kruger of the actions required pursuant to the Term Sheet and
related definitive agreements; and
WHEREAS ,
each Party desires to settle fully and finally any and all
differences they may have with each other; and
NOW,
THEREFORE , in consideration of the premises and mutual
promises herein contained, it is agreed as follows:
1. Effective
immediately, Kruger hereby resigns as Chief Executive Officer,
Chairman of the Board, and as a director and employee, of the
Company and all of the Company’s subsidiaries.
2. As a
material inducement to Kruger to enter into this Agreement, and
subject to the terms of this Agreement, the Company hereby
irrevocably and unconditionally releases, acquits and forever
discharges Kruger and his successors, heirs, representatives and
assigns and all persons acting by, through, under or in concert
with any of them, (collectively “Kruger Releasees”),
from any and all charges, complaints, claims, liabilities,
obligations, promises, agreements, controversies, damages, actions,
causes of action, suits, rights, demands, costs, losses, debts and
expenses (including attorneys’ fees and costs actually
incurred), of any nature whatsoever, known or unknown, whether
suspected or unsuspected, and whether concealed or hidden
(“Claim” or “Claims”) which the Company now
has, owns, holds, or which the Company at any time heretofore had,
owned, or held against each of the Kruger Releasees, arising out
of, in connection with, or related to Kruger’s involvement as
a shareholder, officer or director of the Company or any of its
subsidiaries, Kruger’s employment with the Company or any of
its subsidiaries, or Kruger’s service as Chairman of the
Company’s board of directors or as a member of the
Company’s or any of its subsidiaries boards of directors;
including but not limited to (a) all Claims of breach of an
implied or express employment contract, libel,
defamation,
fraud, breach
of any implied covenant of good faith and fair dealing or breach of
any fiduciary duty, whether arising under statute or common law,
whether in tort or in contract; and (b) all Claims relating to
any agreement, arrangement or understanding that Kruger has, or may
have, with the Company. The Company agrees that this Section of the
Agreement is intended to be a broad release in favor of the Kruger
Releasees and to include all actual or potential legal claims that
the Company may have against the Kruger Releasees, except as
specifically provided otherwise in this Agreement.
3. As a
further inducement to Kruger entering into this Agreement, the
Company covenants and promises to indemnify and shall defend and
hold Kruger harmless from any and all Claims released under
Section 2 above, including, without limitation, claims made by
third parties arising out of or related to Kruger’s
involvement as a shareholder, officer or Director of Company or any
of its subsidiaries, and from any and all Claims arising out of or
in connection with any personal guarantee by Kruger of any Company
obligation.
4. As a
material inducement to the Company to enter into this Agreement,
and subject to the terms of this Agreement and except as is
hereinafter provided, Kruger hereby irrevocably and unconditionally
releases, acquits and forever discharges the Company and each of
its parent, owners, stockholders, predecessors, successors,
assigns, agents, directors, officers, employees, representatives,
attorneys, divisions, subsidiaries, affiliates and all persons
acting by, through, under or in concert with any of them,
(collectively the “Company Releasees”), from any and
all Claims which Kruger now has, owns, holds, or which Kruger at
any time heretofore had, owned, or held against any of the Company
Releasees, including, but not limited to: (a) all Claims under
the Age Discrimination in Employment Act of 1967, as amended;
(b) all Claims under Title VII of the Civil Rights Act of
1964, as amended; (c) all claims under the Fair Labor
Standards Act; the National Labor Relations Act; and the
Occupational Safety and Health Act; (d) all Claims under the
Employee Retirement Income Security Act of 1974, as amended;
(e) all Claims arising under the Americans With Disabilities
Act of 1990, as amended; (f) all Claims arising under the
Family and Medical Leave Act of 1993, as amended; (g) all
Claims related to Kruger’s employment with the Company;
(h) all Claims of unlawful discrimination based on age, sex,
race, religion, national origin, handicap, disability, equal pay,
sexual orientation or other protected status; (i) all Claims
of wrongful discharge, promissory estoppel, negligence,
misrepresentation and retaliation, breach of an implied or express
employment contract, negligent or intentional infliction of
emotional distress, libel, defamation, breach of privacy, fraud,
breach of any implied covenant of good faith and fair dealing and
any other federal, state, or local common law or statutory claims,
whether in
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