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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,
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