EXHIBIT 99.4
MUTUAL RELEASE
THIS MUTUAL RELEASE (this "AGREEMENT") is made and entered into as of the
21st day of December, 2001 (the "EFFECTIVE DATE"), by and among TAG-IT PACIFIC,
INC., a Delaware corporation ("TAG-IT") on the one hand, and ETIC ART S.A. DE
C.V., a Mexican corporation, and CIERRES IDEAL DE MEXICO, S.A. DE C.V., a
Mexican corporation (individually, a "MEXICAN CORPORATION" and collectively, the
"MEXICAN CORPORATIONS") collectively on the other hand.
RECITALS
A. Tag-It, Grupo Industrial Cierres Ideal, S.A. de C.V., a Mexican
corporation ("Grupo"), Industrias Unidas, S.A. de C.V. ("IUSA") and Talon, Inc.,
a Delaware corporation ("TALON"), are parties to that certain Asset Purchase
Agreement, dated December 21, 2001 (the "PURCHASE AGREEMENT"), which agreement
provides for the acquisition by Tag-It of certain assets of Grupo, IUSA and
Talon.
B. The Mexican Corporations are affiliates of Grupo and/or IUSA, and their
execution of this Agreement is a condition precedent to the consummation by
Tag-It of its obligations under the Purchase Agreement.
AGREEMENT
NOW, THEREFORE, with reference to the foregoing facts, the parties agree as
follows:
1. RELEASE; TERMINATION OF EXISTING AGREEMENTS.
1.1 RELEASE BY THE MEXICAN CORPORATIONS.
(a) Effective as of the Effective Date, each Mexican Corporation, on behalf
of such Mexican Corporation and each of such Mexican Corporation's affiliates,
subsidiaries, representatives, agents, successors-in-interest and assigns,
hereby releases and forever discharges Tag-It and each of Tag-It's officers,
directors, employees, agents, stockholders, controlling persons,
representatives, affiliates, subsidiaries, successors-in-interest and assigns
(individually, a "TAG-IT RELEASEE" and collectively, "TAG-IT RELEASEES") from
any and all causes of action, claims, actions, rights, judgments, attorneys'
fees, obligations, contracts, damages, promissory notes, demands, accountings or
liabilities of whatever kind and character, whether now known or unknown,
suspected or unsuspected, both at law and in equity, which such Mexican
Corporation or any of such Mexican Corporation's affiliates, subsidiaries,
representatives, agents, successors-in-interest and assigns now has, have ever
had or may hereafter have against the respective Tag-It Releasees arising
contemporaneously with or prior to the Effective Date or on account of or
arising out of any matter, cause or event occurring contemporaneously with or
prior to the Effective Date; PROVIDED, HOWEVER, that nothing contained herein
will operate to release any obligations of Tag-It arising under the Purchase
Agreement or any other agreement or instrument entered into in connection with
the Purchase Agreement.
(b) Each Mexican Corporation agrees that each Tag-It Releasee is a direct
beneficiary with respect to this SECTION 1.1 and may enforce these provisions.
Each Mexican Corporation represents and warrants to the Tag-It Releasees that,
as of the Effective Date, it has not assigned nor subrogated any of said rights,
claims and causes of action referenced in this SECTION 1.1,
or authorized any other person or entity to assert any of these claims on its
behalf.
(c) Each Mexican Corporation agrees and covenants never to file a lawsuit,
arbitration proceeding or any other administrative proceeding against any Tag-It
Releasee for any causes of action, claims, actions, rights, judgments,
obligations, damages, promissory notes, demands, accountings or liabilities of
whatever kind and character released and discharged by such party pursuant to
this SECTION 1.1.
1.2 RELEASE BY TAG-IT.
(a) Effective as of the Effective Date, Tag-It, on behalf of Tag-It and
each of Tag-It's affiliates, subsidiaries, representatives, agents,
successors-in-interest and assigns, hereby releases and forever discharges the
Mexican Corporations and each Mexican Corporation's respective officers,
directors, employees, agents, stockholders, controlling persons,
representatives, affiliates, subsidiaries, successors-in-interest and assigns
(individually, a "MEXICAN CORPORATION RELEASEE" and collectively, the "MEXICAN
CORPORATION RELEASEES") from any and all causes of action, claims, actions,
rights, judgments, attorneys' fees, obligations, contracts, damages, promissory
notes, demands, accountings or liabilities of whatever kind and character,
whether now known or unknown, suspected or unsuspected, both at law and in
equity, which Tag-It or any of Tag-It's affiliates, subsidiaries,
representatives, agents, successors-in-interest and assigns now has, have ever
had or may hereafter have against the respective the Mexican Corporation
Releasees arising contemporaneously with or prior to the Effective Date or on
account of or arising out of any matter, cause or event occurring
contemporaneously with or prior to the Closing Date; PROVIDED, HOWEVER, that
nothing contained herein will operate to release any obligations of Grupo, Talon
or any other party arising under the Purchase Agreement or any other agreement
or instrument entered into in connection with the Purchase Agreement.
(b) Tag-It agrees that each the Mexican Corporation Releasee is a direct
beneficiary with respect to this SECTION 1.2 and may enforce these provisions.
Tag-It represents and warrants to the Mexican Corporation Releasees as of the
date of this Agreement and as of the Closing Date that it has not assigned nor
subrogated any of said rights, claims and causes of action referenced in this
SECTION 1.2, or authorized any other person or entity to assert any of these
claims on its behalf.
(c) Tag-It agrees and covenants never to file a lawsuit, arbitration
proceeding or any other administrative proceeding against any Mexican
Corporation Releasee for any causes of action, claims, actions, rights,
judgments, obligations, damages, promissory notes, demands, accountings or
liabilities of whatever kind and character released and discharged by such party
pursuant to this SECTION 1.2.
1.3 MUTUAL RELEASE. It is the intention of the parties to this Agreement
that this SECTION 1 shall be effective as a full and final accord and
satisfaction and release of all of claims and judgments identified in this
SECTION 1. Each of the parities hereby acknowledges that it has read and is
familiar with California Civil Code Section 1542 which states 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
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THE RELEASE, WHICH IF KNOWN TO HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
Each of the parties does hereby expressly waive and relinquish all rights
and benefits which it has or may have under California Civil Code Section 1542
(or any similar law of any country, state, territory or jurisdiction) to the
fullest extent that it may lawfully waive such rights and benefits. In
connection with the waiver and relinquishment set forth in this SECTION 1.3,
each of the parties acknowledges that it is aware that it may hereafter discover
facts in addition to and/or different from those now known or believed to be
true with respect to the subject matter of this SECTION 1, but that
notwithstanding that fact, it is their respective intention hereby to fully,
finally, and forever release all of the claims released herein, known or
unknown, suspected or unsuspected, which now exist, may in the future exist or
heretofore have existed between each respective party, on the one hand, and
those parties, persons and entities granted releases by it, on the other hand,
and that in furtherance of such intention, the release given herein shall be and
remain in effect as full and complete releases, notwithstanding the discovery or
existence of any such additional or different facts.
2. MISCELLANEOUS.
2.1 GOVERNING LANGUAGE AND LAW. This Agreement is in the English language
only, and all communications between the parties relative to this Agreement
shall be conducted in the English language only. The Parties hereto hereby agree
that this Agreement shall be governed by, and construed and interpreted in
accordance with, the laws of the State of California without reference to
principles of conflict of laws.
2.2 SUBMISSION TO JURISDICTION AND VENUE IN LOS ANGELES COUNTY, CALIFORNIA.
Solely for purposes of this Agreement and the transactions contemplated hereby,
the parties to this Agreement each hereby agrees that any and all disputes,
legal actions, suits, or proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby, whether legal or equitable in
nature, or arising out of contract or tort claims, may be brought in any
California or federal court located in Los Angeles County, State of California,
United States of America. By their signature to this Agreement, each party,
regardless of their residence, irrevocably submits to the jurisdiction of the
courts located in Los Angeles County, State of California, United States of
America, in any dispute, legal action, suit or proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby. Each party
hereto acknowledges that it has freely agreed to so submit to jurisdiction and
venue, and that without such agreement the courts located in Los Angeles County,
State of California, United States of America might not otherwise have
jurisdiction over such party.
2.3 SERVICE OF PROCESS. Each party hereto agrees that service of any
process, summons, notice or document by U.S. registered mail or the foreign
equivalent of U.S. registered mail to such party's respective addresses set
forth in this Agreement shall be effective service of process for any action,
suit or proceeding in California with respect to any matters to which it has
submitted to jurisdiction in SECTION 2.2 or if otherwise made in accordance with
applicable law.
2.4 WAIVER OF CLAIM OF INDEMNITY AND INCONVENIENT FORUM. Each party hereto
irrevocably waives all claim of immunity from jurisdiction, attachment and
execution to which he or
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it might otherwise be entitled in any legal action or proceeding brought in any
California or federal court located in Los Angeles County, State of California,
United States of America, and further irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to any
dispute, legal action, suit or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby being brought in any federal
or California court located in Los Angeles County, State of California, United
States of America, and further hereby irrevocably waives any claim that any such
dispute, legal action, suit or proceeding brought in any such court has been
brought in an inconvenient forum.
2.5 NOTICES. Any notice or other communication required or which may be
given hereunder shall be in writing and shall be delivered personally, sent by
facsimile transmission or sent by certified, registered or express mail, postage
prepaid, and shall be deemed given when so delivered personally, or sent by
facsimile transmission or if mailed, five days after the date of mailing, as
follows:
(a) IF TO TAG-IT, TO:
Tag-It Pacific, Inc.
21900 Burbank Boulevard, Suite 270
Woodland Hills, California 91367
Facsimile: (818) 444-4110
Attention: Colin Dyne
WITH A COPY TO:
Akin, Gump Strauss, Hauer & Feld, LLP
2029 Century Park East, Suite 2400
Los Angeles, California 90067
Facsimile: (310) 728-2233
Attention: Murray Markiles, Esq.
(b) IF TO ETIC ART S.A. DE C.V., TO:
Etic Art S.A. de C.V.
Paseo de la Reforma Num. 2608 PH
Col. Lomas Altas
Mexico D.F., 11950
Facsimile: 525 5 261 88 93
Attention: Jose Ballesteros Rojas
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(c) IF TO CIERRES IDEAL DE MEXICO, S.A. DE C.V., TO:
Cierres Ideal de Mexico, S.A. de C.V.
Paseo de la Reforma Num. 2608 PH
Col. Lomas Altas
Mexico D.F., 11950
Facsimile: 525 5 261 88 93
Attention: Jose Ballesteros Rojas
Any party may, by notice given in accordance with this SECTION 2.5 to the other
party, designate another address or person for receipt of notices hereunder.
2.6 WAIVERS AND AMENDMENTS. This Agreement may be amended, modified,
superseded, canceled, renewed or extended, and the terms and conditions hereof
may be waived, only by a written instrument signed by the parties hereto or, in
the case of a waiver, by the party waiving compliance. No delay on the part of
any party in exercising any right, power or privilege hereunder shall operate as
a waiver thereof, nor shall any waiver on the part of any party of any right,
power or privilege hereunder, nor any single or partial exercise of any right,
power or privilege hereunder, preclude any other or further exercise thereof or
the exercise of any other right, power or privilege hereunder. The rights and
remedies herein provided are cumulative and are not exclusive of any rights or
remedies which any party may otherwise have at law or in equity.
2.7 EXHIBITS AND SCHEDULES. The Exhibits and Schedules to this Agreement
are a part of this Agreement as if set forth in full herein.
2.8 HEADINGS. The headings in this Agreement are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
2.9 SEVERABILITY. Whenever possible each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be or become prohibited or invalid
under applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
2.10 COSTS AND ATTORNEYS' FEES. If any action, suit, arbitration or other
proceeding is instituted to remedy, prevent or obtain relief from a default in
the performance by any party to this Agreement of its obligations under this
Agreement, the prevailing party shall recover all of such party's reasonable
attorneys' fees incurred in each and every such action, suit, arbitration or
other proceeding, including any and all appeals or petitions therefrom.
2.11 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which together shall constitute a single document.
2.12 INTERPRETATION. In the event any claim is made by either party
relating to any conflict, omission or ambiguity in this Agreement, no
presumption or burden of proof or persuasion shall be implied by virtue of the
fact that this Agreement was prepared by or at the request of either party or
its counsel.
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2.13 ENTIRE AGREEMENT. This Agreement contains the entire agreement among
the parties with respect to the subject matter hereof purchase and supersedes
all prior agreements, written or oral, with respect thereto.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above-written.
TAG-IT PACIFIC, INC.
By /S/ COLIN S. DYNE
---------------------------------
Colin S. Dyne
Chief Executive Officer
ETIC ART S.A. DE C.V.
By: /S/ JOSE BALLESTEROS ROJAS
---------------------------------
Jose Ballesteros Rojas
Title: CEO
CIERRES IDEAL DE MEXICO, S.A. DE C.V.
By: /S/ JOSE BALLESTEROS ROJAS
---------------------------------
Jose Ballesteros Rojas
Title: CEO
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