EXHIBIT
10.1


RESCISSION AND
MUTUAL RELEASE AGREEMENT

BETWEEN

KINGS ROAD ENTERTAINMENT, INC. & ASHFORD CAPITAL, LLC


This Rescission
and Mutual Release Agreement (hereinafter referred to as “Agreement”), is made
and entered into this ____day of May, 2007, by and between KINGS ROAD
ENTERTAINMENT, INC., (herein referred to as “KREN”), which maintains a business
address at 468 N. Camden Drive, Beverly Hills, CA 90210, and ASHFORD CAPITAL,
LLC., (herein referred to as “Ashford Capital”), which maintains a business
address at 19200 Von Karman Ave., Suite 600, Irvine, CA 92612, and, each and
all of which are referred to from time to time as the “Parties,” as follows:


RECITALS


WHEREAS, on or about
March 1, 2007 the Parties executed a Stock Purchase Agreement (the “SPA”)
between the Board of Directors of KREN and the Manager of Ashford Capital,
whereby Ashford Capital was to purchase four million seven hundred thousand
(4,700,000) shares of 144 restricted stock of KREN for the consideration of
$300,000.  A copy of the SPA is attached
hereto as Exhibit A and by this reference made a part of this Agreement;


WHEREAS, on or about May
4, 2007 the Parties agreed to rescind the SPA and enter into a mutual release
and rescission of the agreement; and


WHEREAS, it is the desire
of the Parties to this Agreement to fully and finally settle the disputes
between them including any and all claims arising from the transaction embodied
in the SPA, subject only to the terms and conditions set forth in this
Agreement.  This Agreement does not
constitute an admission of liability or concession of the merit of any claims
by any party but is entered into by and between the Parties herein solely for
the purposes of settling disputed claims and to avoid the expense and
uncertainty of potential litigation.


NOW, THEREFORE, in
consideration of the recitals contained herein, and based upon the following
promises and consideration, it is hereby agreed as follows:


1.               Consent to
Rescission.  The Parties hereby
consent to and agree to rescind that certain Stock Purchase Agreement between
them, a copy of which is attached as Exhibit A.


2.               Disposition of
Consideration Received.


a.               Ashford Capital
shall: (1) return the 4,700,000 shares of KREN common stock purchased pursuant
to the SPA; and (2) deliver to KREN a stock power, with gold medallion
signature, for the certificate transferred.


b.              KREN shall return to
Ashford Capital, through wire transfer, $300,000 (USD), representing the
reimbursement for the purchase price of the aforementioned stock.


3.               Party Warranties
and Representations.  Each party
warrants that is has full authority to make the above-described mutual general
release of all claims.  Each party
warrants that it has not assigned its claims against any party hereto to anyone
else.


4.               Surrender of
Rights.  Each party desires to extend
the release as fully as possible as between themselves and to expressly waive
any limitation on the effect of said release as set forth in section 1542 of
the California Civil Code, or any other provisions of law, which may limit the
effectiveness of the release.  Section
1542 of the California Civil Code provides:


“Section 1542. 
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.”


5.               Escrow.  The Parties agree to select a mutually
agreeable third party to act as escrow holder (“Escrow Holder”) and to effect
the exchange contemplated by this Agreement. 
The Escrow Holder will act according to the terms of the Escrow
Instructions.  A copy of this Escrow
Instructions are attached hereto as Exhibit B and by this reference made a part
of this Agreement.











 


6.               Destruction of
Proprietary and Confidential Materials. 
Each party to this Agreement shall return and destroy all proprietary or
confidential information received from the other party during the course of the
negotiations and discussions concerning the SPA.


Miscellaneous Provisions


7.               Each party to this
Agreement Agrees to do all things necessary or convenient to carry out and
effectuate the terms of this Agreement.


8.               This Agreement is
the entire agreement between the Parties and supercedes all prior or
contemporaneous agreement or understandings. 
Any modifications to this Agreement must be in writing and signed by all
Parties.  This Agreement shall not be
construed against any party due to the party’s participation in the drafting of
the Agreement.


9.               In the event a
lawsuit is brought to enforce the terms of this Agreement, the prevailing party
shall be entitled to an award of reasonable attorney’s fees and costs.


10.         This Agreement shall be
governed by the laws of the State of California, in the County of Orange.


11.         The section headings are
for the convenience of the Parties, and do not limit the provisions of this
Agreement.


12.         This Agreement may be
executed in counterparts, and when each party has signed and delivered at least
one such counterpart, each counterpart shall be deemed an original and, when
taken together with other singed counterparts, shall constitute one Agreement
which shall be binding upon and effective as to all Parties.  The Parties agree to accept as original
signatures those signed copies of this Agreement executed and received by
telefax, e-mail, or as a scanned document.


13.         The terms, covenants and
conditions of this Agreement shall be binding upon and inure to the benefit of
the heirs, successors and assigns of the Parties.


Executed on May 10,
2007.


	
  

  	
  KINGS ROAD ENTERTAINMENT, INC.

  
	
   

  	
  By:

  	
  /s/ Philip Holmes

  
	
   

  	
   

  	
  Philip Holmes, CEO

  
	
   

  	
   

  	
   

  
	
   

  	
  ASHFORD CAPITAL, LLC

  
	
   

  	
  By:

  	
  /s/ Frank Kavanaugh

  
	
   

  	
   

  	
  Frank Kavanaugh, Managing Director