EXHIBIT 10.4
ARRANGEMENTS AND RELEASE AGREEMENT
This Arrangements and Release Agreement (the "Agreement"), by and between
Key Gold Corporation, a Nevada corporation formerly known as DDI International
Inc. (the "Company"), and Xx. Xxxxxx Xxxxxxxx, an individual ("Xx. Xxxxxxxx"),
is made and entered into as of this 17th day of May, 2004 (the "Effective
Date").
W I T N E S S E T H
WHEREAS, Xx. Xxxxxxxx previously lent the Company the sum of $3,000.00,
pursuant to a Loan Agreement and Promissory Note dated March 15, 2004 (the
"Promissory Note"), the full principal amount of which and all accrued interest
thereon is outstanding as of the Effective Date;
WHEREAS, in conjunction with the transactions contemplated by this
Agreement, Xx. Xxxxxxxx is willing to forgive all of the Company's obligations
under the Promissory Note;
WHEREAS, pursuant to an Option Agreement dated March 29, 2002, as modified
by an Amending Agreement and Promissory Note dated March 25, 2004 (collectively,
the "Option Agreement"), immediately preceding the Effective Date, the Company's
sole asset (the "Dental Asset") was its interest in certain assets acquired
under the Option Agreement, including the domain name "xx-xxxxxx-xxxx.xxx";
WHEREAS, as of the Effective Date, the Company had not exercised the
Option Agreement, has not acquired a 100% undivided interest in the Dental Asset
from Xx. Xxxxxxxx, and has not paid the full amount of the purchase price
therefor;
WHEREAS, the Company desires to cancel its contractual right to acquire
the Dental Asset;
WHEREAS, immediately prior to the execution of this Agreement, Xx.
Xxxxxxxx resigned as the Company's President, Chief Executive Officer, and sole
director, and, as his last official act, named Xxxx Xxxxxxxx to replace him in
such capacities;
WHEREAS, in connection with the transactions contemplated by, or
referenced in, this Agreement, Xx. Xxxxxxxx is willing to tender 5,875,000
(pre-split) shares of the Company's common stock owned of record and
beneficially by him (the "Shares") to the Company for cancellation;
WHEREAS, each of the Company and Xx. Xxxxxxxx desires to enter into a
mutual general release with the other;
WHEREAS, each of the Company and Xx. Xxxxxxxx now wish to terminate all of
the relationships that had been created by the Promissory Note, the Option
Agreement, and Xx. Xxxxxxxx'x service as a director and executive officer of the
Company and as a holder of the Shares, including all rights, obligations, and
responsibilities thereunder, and to release each other in respect thereof and in
respect of any and all remedies that any party may have against any other party
as a result thereof, with the sole exception of any rights or duties created by
this Agreement and any actions that could have been brought against Xx. Xxxxxxxx
for which the Nevada Revised Statutes would not have permitted the Company to
have indemnified him;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, the parties hereto do hereby agree as follows:
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ARTICLE 1
TERMINATION OF THE PARTIES' RESPECTIVE OBLIGATIONS UNDER THE
PROMISSORY NOTE AND THE OPTION AGREEMENT; CANCELLATION OF
THE SHARES; TENDER OF CERTAIN CASH CONSIDERATION
1.1 Forgiveness of the Company's Obligations Under the Promissory Note.
As of the Effective Date, Xx. Xxxxxxxx forgives the Company of all of its duties
and obligations to Xx. Xxxxxxxx thereunder and shall deem the Promissory Note to
have been "paid in full."
1.2 Cancellation of the Company's Rights Under the Option Agreement. As
of the Effective Date, the Company cancels any and all of its rights in and to
the Dental Asset and absolves Xx. Xxxxxxxx from any duties and obligations in
favor of the Company thereunder.
1.3 Return of Intellectual Property. As soon as practicable following
the Effective Date, the Company shall cause (i) all copies of all non-public
materials pertaining to the Dental Asset heretofore provided to the Company, its
employees, or agents by Xx. Xxxxxxxx or his agents to be returned to Xx.
Xxxxxxxx, (ii) all computer files pertaining to the Dental Asset maintained by
Company employee or agent to be deleted, and (iii) the declaration of the
Company's Chief Executive Officer certifying the Company's compliance with the
foregoing to be delivered to Xx. Xxxxxxxx.
1.4 Cancellation of the Shares. As of the Effective Date, Xx. Xxxxxxxx
tenders to the Company any and all of his right, title, and interest in and to
the Shares, constituting 5,875,000 (pre-split) shares of common stock of the
Company, in respect of which Shares Xx. Xxxxxxxx represents and warrants to the
Company that he is the sole record and beneficial owner thereof. As of the
Effective Date, the Company cancels each and every Share, such that none of the
Shares shall be then issued and outstanding and all of the Shares shall be
returned to the authorized and unissued capital of the Company.
1.5 Tender of Certain Cash Consideration. As of the Effective Date, in
connection with the transactions contemplated by this Agreement and not as
specific consideration for any of such transactions, the Company tenders to Xx.
Xxxxxxxx the sum of $49,000.00 in good funds.
ARTICLE 2
MUTUAL GENERAL RELEASE AND COVENANT NOT TO XXX
2.1 Mutual General Releases. Effective upon the Effective Date, and
except as otherwise expressly provided for in this Agreement, Xx. Xxxxxxxx, on
the one hand, and the Company, on the other hand (each, collectively, a
"Releasing Party"), on behalf of himself or itself and their respective
affiliates, partners, officers, directors, shareholders, members, agents,
representatives, and family members, and each of their respective heirs,
executors, administrators, successors and assigns (collectively, their
"Affiliates"), hereby irrevocably and unconditionally release and forever
discharge each other and each of their respective Affiliates from any and all
past, present or future liabilities, claims, demands, debts, obligations,
damages, actions (including attorneys' fees associated therewith), judgments,
causes of action or suits of any kind or nature whatsoever, whether known or
unknown, suspected or unsuspected, xxxxxx or inchoate (collectively, "Claims")
which such party may now own, hold or suspect, have at any time heretofore
owned, held or suspected, or may at any time hereafter own or hold with respect
to, or in connection with, any and all of the arrangements, financial and
otherwise, contemplated by the Promissory Note, the Option Agreement, and Xx.
Xxxxxxxx'x service as a director and executive officer of the Company and as a
holder of the Shares, including all rights, obligations, and responsibilities
thereunder; provided, however, that this Section 2.1 is not intended to release
any Claim (i) arising from a breach of any covenant, representation or warranty
in this Agreement, (ii) that could have been brought against Xx. Xxxxxxxx for
which the Nevada Revised Statutes would not have permitted the Company to have
indemnified him, or (iii) to the extent that such release would violate
applicable law.
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(a) Each releasing Party represents and warrants to each other
that such Releasing Party has not heretofore transferred or assigned in whole or
in part, or purported to have transferred or assigned in whole or in part, to
any person or entity, any Claims, or interest therein, which are the subject of
the release in this Article 2 and that such Releasing Party will not do so on or
after the date of this Agreement.
(b) Each Releasing Party acknowledges and agrees that nothing in
this Agreement shall be construed to be, or shall be admissible in any
proceeding as evidence of, an admission by such Releasing Party hereto of a
violation of any federal, state or local statute, ordinance or regulation or any
violation of such Releasing Party's policies or procedures or of any duty
allegedly owed by such Releasing Party to the other Releasing Party. This
Agreement may be introduced, however, in any proceeding to enforce this
Agreement.
2.2 Waiver of Unknown Claims. It is the intention of each Releasing
Party that the releases set forth in Section 2.1 of this Agreement shall be
effective as a bar to all liabilities, claims, demands, obligations, damages,
actions, causes of action, or suits of any kind or nature whatsoever, whether
known or unknown, suspected or unsuspected, other than the claims expressly
excepted from the scope of Section 2.1 of this Agreement. In furtherance of this
intention, each Releasing Party expressly acknowledges that such Releasing Party
is familiar with Section 1542 of the California Civil Code, which provides as
follows:
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.
Notwithstanding the fact that this Agreement is to be interpreted under Nevada
law, to the extent that (i) California law is applied to this Agreement or (ii)
Nevada law contemplates or provides an equivalent provision, each Releasing
Party expressly waives and relinquishes any and all rights and benefits that
such Releasing Party may have under Section 1542 of the California Civil Code or
any analogous provision under Nevada law. Notwithstanding, and in furtherance of
the spirit of such waiver, each Releasing Party also acknowledges that such
Releasing Party may hereafter discover facts in addition to or different from
those which such Releasing Party now knows or believes to be true with respect
to the subject matter of this Agreement, or that such Releasing Party may
hereafter come to have a different understanding of the law that may apply to
potential claims that such Releasing Party is releasing hereunder; however, such
Releasing Party affirms that, except as is expressly provided in this Section
2.2 of this Agreement, it is such Releasing Party's intention fully, finally,
and forever to settle and release any and all Claims whatsoever, known or
unknown, suspected or unsuspected, that do now exist, may hereafter exist, or
heretofore have existed between such Releasing Party and the other Releasing
Party released herein. In furtherance of this intention, each Releasing Party
acknowledges that the releases as set forth and limited in Section 2.1 of this
Agreement shall be and remain in effect as full and complete general releases
notwithstanding the discovery or existence of any such additional facts or
different understandings of law.
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2.3 Covenant Not to Xxx. Each Releasing Party hereby represents to the
other Releasing Party that it has not commenced or filed, and covenants that it
will not commence or file with any local, state, or federal agency, court, or
arbitrator any complaints, charges, claims, lawsuits or grievances, or actions
of any kind, whether civil, criminal or administrative, against the other
Releasing Party with respect to any Claim released pursuant to Section 2.1 of
this Agreement.
ARTICLE 3
MISCELLANEOUS
3.1 Notices. Any notices or other communications required or permitted
hereunder shall be sufficiently given if written and delivered in person or sent
by registered mail, postage prepaid, addressed as follows:
to Xx. Xxxxxxxx: Xx. Xxxxxx Xxxxxxxx
0000 Xxxxxxxxx Xxxxx
Xxxxx Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0 Xxxxxx
to the Company: Key Gold Corporation
00000 Xxxxxx Xxxxxxxx Xx.
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
or such other address as shall be furnished in writing by the appropriate
person, and any such notice or communication shall be deemed to have been given
as of the date so mailed.
3.2 Time of the Essence. Time shall be of the essence of this Agreement.
3.3 Costs. The parties will each bear the costs and expenses incurred by
them in connection with this Agreement and the transactions contemplated hereby.
3.4 Entire Agreement and Amendment. This Agreement contains the entire
agreement among the parties hereto with respect to the transactions contemplated
by this Agreement and supersedes all other agreements, written or oral, with
respect thereto. This Agreement may be amended or modified in whole or in part,
and any rights hereunder may be waived, only by an agreement in writing, duly
and validly executed in the same manner as this Agreement or by the party
against whom the waiver would be asserted. The waiver of any right hereunder
shall be effective only with respect to the matter specifically waived and shall
not act as a continuing waiver unless it so states by its terms.
3.5 Counterparts. This Agreement may be executed in one or more
counterparts each of which shall be deemed to constitute an original and shall
become effective when one or more counterparts have been signed by each party
hereto and delivered to the other party.
3.6 Governing Law. This Agreement shall be governed by, and construed
and interpreted in accordance with, the laws of the State of Nevada, without
giving effect to the choice of law provisions thereof.
3.7 Attorneys' Fees and Costs. In the event any party to this Agreement
shall be required to initiate legal proceedings to enforce performance of any
term or condition of this Agreement, including, but not limited to, the payment
of monies or the enjoining of any action prohibited hereunder, the prevailing
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party shall be entitled to recover such sums, in addition to any other damages
or compensation received, as will reimburse the prevailing party for reasonable
attorneys' fees and court costs incurred on account thereof (including, without
limitation, the costs of any appeal) notwithstanding the nature of the claim or
cause of action asserted by the prevailing party.
3.8 Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and its and his respective heirs,
executors, personal representatives, successors, and assigns, as the case may
be.
3.9 Captions. The captions appearing in this Agreement are inserted for
convenience of reference only and shall not affect the interpretation of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
KEY GOLD CORPORATION
By:
----------------------------------------------------- --------------------------------------------
XX. XXXXXX XXXXXXXX Xxxx Xxxxxxxx
Chief Executive Officer
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