MUTUAL RELEASE AND SETTLEMENT AGREEMENT This Mutual Release and Settlement Agreement (AGREEMENT ) is entered into as of the

th day of April, 2011, by and among the following parties: TERRI M. WILSON (TERRY), KATHLEEN CHEATHAM (KATHLEEN), ROCHELLE MITCHELL, (ROCHELLE) on the one hand, and KATHARINE CHEATHAM (KATHARINE), MARY LOUISE HILL (MARY) AND DAYON DILLIHUNT (DAYON), on the other hand, with respect to the following recitals (the PARTIES shall refer to all of the signatories to the AGREEMENT): Recitals A. On or about December 18, 2010, TERRY AND KATHLEEN filed a Complaint against KATHARINE, MARY and DAYON in the Superior Court of the State of California for the County of Los Angeles, bearing Case Number BC 451 329, arising out of the ownership and rights of the PARTIES in that certain real property commonly designated as 529 Westminster Avenue, Venice CA., (the PROPERTY), hereinafter referred to as the ACTION. B. On April 14, 2010, the PARTIES successfully mediated the dispute referenced in the ACTION. C. The PARTIES desire to enter into this AGREEMENT as a means of more formally settling any claims or causes of action each may have against the other, relating to the ACTION. D. TERRY AND ROCHELLE hereby represent and warrant that ROCHELLE has assigned all of her right, title and 1/6th interest in the PROPERTY to TERRY, and that accordingly, ROCHELLE does not have any interest in the PROPERTY, or any interest in the distribution of sales proceeds of the PROPERTY as set forth below. Effectively, TERRY shall be deemed to have a 2/6th interest in the PROPERTY for purposes of this AGREEMENT. NOW, THEREFORE, the PARTIES hereby agree as follows:
1. The PROPERTY shall be immediately marketed and sold, and proceeds divided as set forth below. There are two options in connection with the sale of the PROPERTY.

OPTION ONE: Within 5 calendar days from the date of signing the AGREEMENT, TERRI and/or KATHLEEN, through their counsel of record may give written notice via email or facsimile to counsel for KATHARINE, MARY and DAYON of their intent to purchase the PROPERTY (WRITTEN NOTICE TO PURCHASE).
2.

3. IF WRITTEN NOTICE TO PURCHASE is not timely received for any reason, OPTION ONE shall lapse, and be of no force and effect.

If OPTION ONE is not timely exercised, TERRY and/or KATHLEEN (referred to herein for purposes of OPTION ONE as the BUYING GROUP shall have the right to obtain a written appraisal of the PROPERTY. KATHARINE, MARY AND DAYON (referred to herein for purposes of OPTION ONE as the Selling Group, shall also have the right to obtain a written appraisal of the PROPERTY. Each appraisal must be obtained in written form and provided to each counsel within 15 days from the date when OPTION ONE is exercised. If there is a failure of either the Buying Group or the Selling Group to timely obtain and exchange an appraisal, then the appraisal that is obtained and timely exchanged shall establish the sales price of the PROPERTY, which the Buying Group must pay under OPTION ONE. If neither the Buying Group nor the Selling Group under OPTION ONE timely obtains and exchanges a written appraisal, the right of the Buying Group to purchase the PROPERTY from the Selling Group shall lapse, cease and terminate.
4. 5. If the Buying Group and the Selling Group timely obtain and exchange an appraisal, then the sales price under OPTION ONE, shall be the average of the two appraisals. For example, if one appraisal values the PROPERTY at one million dollars and the second appraisal values the PROPERTY at nine hundred thousand dollars, then the sales price under OPTION ONE shall be nine hundred and fifty thousand dollars. If only one appraisal is timely obtained and exchanged, then the sales price shall be the value of the PROPERTY as stated in that appraisal.

6. Under OPTION ONE, the BUYING GROUP shall have 15 days to close escrow on the purchase of the PROPERTY. If there is a failure to timely close escrow on the part of the Buying Group, then OPTION ONE shall lapse, cease and terminate, and be of no force and effect.
7. If for any reason OPTION ONE lapses, ceases and/or terminates as stated above, KATHARINE shall immediately list the PROPERTY with a reputable broker at the listing price recommended by said broker, and shall enter into listing agreement with that broker, for 180 days at a 5% commission (OPTION TWO). 8. Under OPTION TWO, the PROPERTY shall not be sold for less than 85% of the listing price unless agreed to in writing by all of the PARTIES.

If the PROPERTY is sold under either OPTION ONE OR OPTION TWO, the proceeds shall be divided as follows, after payment of all costs of sale, brokerage fee (there will be no brokerage fee owed under OPTION ONE) and the mortgage in favor of CHASE of approximately $173,000:
9.

(a.)

$174,000.00 to KATHARINE, plus the addition of the difference between the monthly expenses of the PROPERTY less $750/month from date the AGREEMENT is signed; The PARTIES understand that the sale of the PROPERTY shall result in a capital gains tax to be paid by KATHARINE, as the current owner of record of the PROPERTY. However, the PARTIES acknowledge that each shall be responsible for their pro rata share of the capital gains tax, and as a result, from distributions owed to TERRY, KATHLEEN, MARY and DAYON, the amount owed for capital gains tax shall be paid from escrow sales proceeds to KATHARINE, who shall be responsible to timely pay said capital gains tax on the PROPERTY as follows:
(1) 2/6th of the total by TERRY; (2) 1/6th of the total by KATHLEEN; (3) 1/6th of the total by MARY; (4) 1/6TH of the total by DAYON

(b.)

10.

Release:

The EPP PARTIES and HASTING, on behalf of their respective officers, directors, shareholders, agents, employees, representatives, heirs, successors, and assigns, hereby completely release and forever discharge each other, and their present and former officers, directors, shareholders, agents, employees, representatives, insurers, successors, heirs, attorneys, and assigns (hereinafter referred to collectively as the Released Group), from all claims, rights, demands, actions, obligations, liabilities, and causes of action of any and every kind, nature, and character whatsoever, which the EPP PARTIES or HASTING may now have, has ever had, or may have in the future against each other, concerning the claims in the Complaint, and in connection with HASTINGs employment at EPP. 11. Representations and Warranties:

Each of the parties to this Agreement represents and warrants to, and agrees with the following:

(a) Each party or responsible officer thereof has read this Agreement and understands the contents thereof. (b) It is within the contemplation of each party to this Agreement, and understood by each party to this Agreement, that this Agreement is not an admission of liability by any party hereto and is a compromise of disputed claims. Nothing in this Agreement shall be construed as an admission of liability or responsibility on the part of any party hereto. This Agreement affects the settlement of claims which are denied and contested. Each party to this Agreement denies any liability in connection with any of the claims outlined herein. 8. Attorneys Fees:

In the event of any action or proceeding arising out of or relating to this Agreement, its breach or enforcement, including any action for declaratory relief or specific performance, the prevailing party in such action or proceeding shall be entitled to recover all court costs, expenses, and reasonable attorneys fees, up to and including any appeals. The court shall determine the prevailing party, whether or not the dispute or controversy proceeds to final judgment. 9. Entire Agreement: Each party acknowledges and represents that (i) no promise, inducement, or other agreement not expressed herein has been made, (ii) it has not relied and is not relying on any such promise, inducement, or representation, and (iii) this Agreement contains the entire agreement between the parties with respect to the subject matter hereof, and it supersedes all prior negotiations, representations, or agreements between the parties, if any, either oral or written. 10. Predecessors, Successors and Assigns:

All terms of this Agreement shall be binding upon, and inure to the benefit of and be enforceable by the parties hereto and their respective legal representatives, predecessors, successors, and assigns. 11. Modification:

No modification, waiver, amendment, discharge, or change of this Agreement shall be valid unless the same is in writing and signed by the party against which the enforcement of such modification, waiver, amendment, discharge, or change is or may be sought. 12. Waiver Concerning Civil Code 1542:

Except as hereinabove provided, the EPP PARTIES and HASTING hereby expressly waive any and all rights under 1542 of the Civil Code of the State of California and under any other federal or state statutory rights or rules or principles of common law or equity, or those of any jurisdiction similar to 1542. 1542 provides as follows: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH, IF KNOWN BY HIM OR HER, MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR. 13. California Law:

All questions about the construction of this Agreement, and the rights, liabilities, and remedies of the parties to this Agreement, shall be governed by the laws of the State of California. All parties to this Agreement agree to be bound by and submit to the laws and the courts of the State of California. 14. Costs and Attorneys Fees:

Except as provided in Paragraph 7 hereinabove, the parties agree that each party shall be responsible for the payment of its own costs, attorneys fees, and for all other expenses in connection with the negotiation of this Agreement, any claims released herein, and the Complaint that is the subject of this Agreement. 15. Counterparts:

This Agreement may be executed in multiple counterparts, each of which shall be deemed to be an original document for all purposes. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

ERNEST PAPER PRODUCTS, INC. By: ___________________________ Timothy Wilson, President

RITA A. HASTING ______________________________

IPD PACKAGING, INC. By: ___________________________ ______________, President

APPROVED AS TO FORM AND CONTENT BY ATTORNEYS: JOHN D. WILSON, ESQ. SCHWARTZ, WISOT & WILSON, LLP Attorneys for ERNEST PAPER PRODUCTS, INC., and IPD PACKAGING, INC. ______________________________ VIRGINIA GABURO, ESQ. Attorney for Rita A. Hasting

______________________________