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Separation Agreement - Headliners Entertainment Group Inc. and Eduardo Rodriguez

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                             SEPARATION AGREEMENT

	This Agreement is made as of the 18th day of August, 2006 by and
between Headliners Entertainment Group, Inc., a Delaware corporation
having its principal place of business in Montclair, New Jersey, ("HLEG")
and Eduardo Rodriguez, an individual residing in the State of New Jersey

    WHEREAS Rodriguez and HLEG entered into an Employment Agreement dated
March 7, 2006 (the "Employment Agreement"); and

    WHEREAS, Rodriguez and HLEG have determined that it is in their mutual
best interests that the employment relationship between Rodriguez and HLEG
be terminated;

    NOW THEREFORE, in consideration of the premises and mutual promises
herein contained, the parties agree as follows:

     1. Termination of Employment and Resignation.  The Employment Agreement
        and Rodriguez's employment with HLEG shall terminate effective on
        September 1, 2006 (the "Termination Date").  Upon execution of this
        Agreement, Rodriguez shall submit letters of resignation, effective
        on the Termination Date, resigning from the Board of Directors and
        as Chief Executive Officer and Chief Financial Officer of HLEG.

     2. Consideration.

        a.   In lieu of all salary, severance payments, benefit
             entitlements and amounts now owing or that would have been
             owed in the future under the terms of the Employment Agreement
             or for any reason whatsoever (except as specified herein),
             HLEG agrees to pay $75,000 to Rodriguez.  $25,000 will be
             payable on the Termination Date, and the remainder in equal
             monthly installments on the first of each of the next
             twelvemonths.  HLEG also agrees to continue at HLEG's expense
             existing health and any disability or life insurance coverage
             for Rodriguez for a period of one year from the Termination
             Date, subject to HLEG's right to make changes in insurance
             coverage applicable to all executives.

        b.   HLEG agrees that on the Termination Date it will transfer to
             Rodriguez title to and possession of that collection of video
             tapes known as the "Rascals Library," containing approximately
             200 hours of live recordings of comedy shows.

        c.   HLEG hereby assigns to Rodriguez, as of the Termination Date,
             all right and interest it may have in the automobile provided
             for his use by HLEG's subsidiary.

     3.      Preferred Stock.

        a.   Rodriguez agrees to sell to Michael Margolies ("Margolies")
             all of the Series B Preferred Stock that Rodriguez owns for
             its par value (the "Series B Stock").  The sale of the Series
             B Stock shall take place upon the Termination Date.  Rodriguez
             shall deliver to Margolies certificates representing all of
             the Series B Stock, duly endorsed for transfer or accompanied
             by a duly executed stock power.  Margolies shall tender
             payment by personal check in the amount of Ten Dollars ($10.00).

        b.   Rodriguez represents to Margolies as follows: (i) that the
             Series B Stock constitutes all of the issued and outstanding
             shares of Series B Preferred Stock of the Company and that
             such shares were validly issued and fully paid and are
             nonassessable;  (ii) that he owns the Series B Stock
             beneficially and of record, and such shares are subject to no
             claims, liens, pledges, security interests, encumbrances,
             rights of first refusal, trusts, restrictions, adverse claims,
             preferential arrangements or restrictions of any kind,
             including, without limitation, any restriction on the use,
             voting, transfer, receipt of income or other exercise of any
             attributes of ownership, or any other rights of others of any
             kind or nature, except for restrictions imposed by federal and
             state securities laws;  (iii) that the delivery of the stock
             certificates for the Series B Stock to Margolies as
             contemplated herein will vest good title to such Stock in
             Margolies; and (iv)  that he has the legal power and authority
             to transfer the Series B Stock in the manner and for the
             purpose set forth herein and will defend his title against the
             claims of all persons whomsoever.

     4.      Releases.

        a.   Releases by HLEG

             i.   In consideration of the terms of this Agreement, and other
                  good and valuable consideration, the sufficiency of which is
                  hereby acknowledged, HLEG, on behalf of itself and its
                  subsidiaries, and its and their successors and assigns,
                  hereby releases and forever discharges Rodriguez from: (A)
                  all claims, actions, causes of action, suits, proceedings
                  and demands of whatsoever nature, character and kind
                  ("Claims") which HLEG has had, now has or hereafter can,
                  shall or may have against Rodriguez as of the date hereof
                  (the "Release Date"); (B) all liabilities, contingent or
                  otherwise, dues, debts, sums of money and accounts of
                  whatsoever nature, character or kind which were, are now or
                  hereafter can, shall or may be owing by Rodriguez to HLEG as
                  of the Release Date; and (C) all undertakings, covenants and
                  obligations of whatsoever nature, character or kind, which
                  have been agreed to, made or assumed by Rodriguez as of the
                  Release Date  in favor of HLEG arising in connection with or
                  as a result of Rodriguez having been an employee, officer,
                  or director of HLEG.

             ii.  This release does not apply to any rights or claims which
                  may arise under the section headed "Rodriguez's
                  Representations, Acknowledgments and Covenants" in this
                  Agreement.  This release also does not apply to any rights
                  which may arise in connection with actions or conduct of
                  Rodriguez in which he may have engaged outside the scope of
                  his employment by HLEG.

             iii. Indemnification.  HLEG agrees to indemnify, defend and hold
                  harmless Rodriguez and his heirs and legal representatives,
                  to the full extent of Delaware law, from any and all all
                  losses, damages, costs, expenses (including reasonable
                  attorneys' fees), liabilities or judgments or amounts that
                  are paid in settlement of or in connection with any
                  threatened or actual Claims, including claims for taxes
                  incurred by HLEG, which may be bought against him in his
                  personal capacity by any governmental authority or other
                  third party at any time after the date hereof related to his
                  role as a director, officer, or employee of HLEG.  Rodriguez
                  will provide to HLEG written notice of any such Claims, but
                  the failure to so notify shall not relieve HLEG from any
                  liability that it may have hereunder, except to the extent
                  that such failure would materially prejudice HLEG.

        b.   Releases by Rodriguez.  In consideration of the terms of this
             Agreement, and other good and valuable consideration (the
             sufficiency of which is hereby acknowledged), Rodriguez, on
             behalf of himself, his heirs, executors, administrators and
             assigns, hereby releases, remises and forever discharges HLEG,
             its employees, officers, directors, agents, representatives,
             parents, subsidiaries, affiliates and its successors and
             assigns (the "Releasees") from:

             A.   all Claims which Rodriguez has had, now has or
                  hereafter can, shall or may have against the Releasees
                  as of the Release Date arising from the employment of
                  Rodriguez by the Releasees or the termination of such
                  employment, whether such claims arise pursuant to
                  statute or at common law, including without limitation
                  any claims Rodriguez has or could have under the any
                  state or federal law or regulation;

             B.   all liabilities, contingent or otherwise, dues, debts,
                  sums of money and accounts of whatsoever nature,
                  character or kind which were, are now or hereafter
                  can, shall or may be owing by the Releasees, or any
                  one of them, to Rodriguez as of the Release Date,
                  except that the Releasees are not released from their
                  liabilities and obligations as set forth in this Agreement.

        c.   Future litigation.  In the event that HLEG becomes engaged in
             any legal dispute with any governmental authority or other
             third party (whether formally commenced or otherwise), the
             issues of which Rodriguez may be familiar with, Rodriguez
             agrees to fully cooperate with and assist HLEG, at HLEG's
             request, in addressing and dealing with the matter, provided
             HLEG agrees to reimburse Rodriguez for all reasonable, prior-
             approved costs incurred by him in order to comply with this

     5. Rodriguez's Representations, Acknowledgments and Covenants. Without
        limiting any obligations imposed on Rodriguez by New Jersey law by
        virtue of his service to HLEG prior to the Termination Date as an
        employee, officer and director, Rodriguez represents, acknowledges,
        and agrees as follows:

        a.   Covenant to Maintain Confidentiality.  Rodriguez shall not,
             use, disclose, or permit any person or entity to obtain or
             disclose any Confidential Information (as hereinafter defined)
             for any purpose or under any circumstances other than in the
             course of performing his obligations under the terms of this
             Agreement and for his own personal use in connection with
             preparation of tax returns, financial planning and like uses.
             The term "Confidential Information" includes, without
             limitation, any and all of the following concerning HLEG to
             which the general public does not have access:  records,
             financial and other; business plans; policies; software,
             source codes, formulas, facility information and ideas for
             development of facilities or for new facilities; technical
             information, methodologies, techniques and know how; marketing
             data, studies or plans; customer or distributor lists, sources
             of supply, contracts or information concerning agency,
             employee, consulting or other contracted services,
             distribution, licensing, commission, royalty or other
             agreements or arrangements; leases, loan or investor
             agreements and contracts and agreements of all kinds and
             other information constituting trade secrets or proprietary
             information.  Rodriguez's obligations under this section shall
             not apply with respect to any information which is or becomes
             known to the recipient thereof without any breach of this
             Agreement by Rodriguez, or which was permitted to be disclosed
             by the party from whom it was obtained, or to the extent
             required by an order of the Court, in which case Rodriguez
             shall promptly notify HLEG.

        b.   Non-Competition.  Rodriguez shall not, without the prior
             written consent of HLEG, for a period of five (5) years
             following the Termination Date, either individually or in
             partnership or jointly or in conjunction with any person as
             principal, agent, employee, consultant, shareholder or in any
             manner whatsoever own, operate or be involved or engaged in
             any capacity in the ownership or operation of a comedy club,
             dance hall or restaurant within thirty (30) miles of any such
             facility owned or operated by HLEG on the date of this
             Agreement or hereafter.  In addition, for a period of one (1)
             year following the Termination Date, neither Rodriguez nor any
             entity with which Rodriguez is associated shall employ,
             solicit the employment of, or offer employment to any
             individual who was an employee of HLEG or any subsidiary of
             HLEG at any time during the six months preceding the
             Termination Date.

        c.   Rodriguez acknowledges that the covenants contained in this
             section are reasonable in scope, area and duration and are
             necessary in furtherance of the legitimate interests of HLEG.
             Rodriguez further acknowledges and agrees that he has received
             adequate consideration for such covenants and that he will be
             able to earn a living in his areas of professional experience
             and expertise while conforming to the restrictions set forth
             herein. Rodriguez specifically acknowledges that he has
             received legal advice in respect of these covenants and that
             he does not intend to argue, and will not argue, in any future
             proceeding or situation that the covenants are in any way
             unconscionable or unenforceable.  Rodriguez further covenants
             and agrees that any breach of the covenants contained in this
             section herein will result in irreparable damage to HLEG and
             may not be compensable in damages.  Accordingly, without
             limiting the type or scope of damages to which HLEG may be
             entitled, Rodriguez agrees that HLEG shall be entitled to seek
             equitable remedies, including immediate injunctive relief,
             without the necessity of proving irreparable harm or the
             inadequacy of money damages.

     6.      Communication.  Neither HLEG nor Rodriguez will make any verbal or
             written announcement regarding Rodriguez's resignation without the
             consent of the other party, such consent not to be unreasonably
             withheld or delayed.  All announcements shall be consistent with
             this Agreement, and each party shall promptly forward to the other
             a copy of any written announcement.  Notwithstanding the foregoing,
             Rodriguez's consent shall not be required with respect to any
             public statement or filing which HLEG is required to make under
             federal securities laws.

     7.      Continued Employment of Certain Persons.  HLEG agrees that it will
             continue to employ Mr. Gerry Pontones and Mr. Luke McKee for a
             period of at least two months following the Termination Date;
             provided, however, HLEG reserves the right to terminate the
             employment of either or both individuals at any time, for any
             reason or without a reason, so long as HLEG continues the
             terminated employee's salary and benefits until the end of the two-
             month period.

     8.      Miscellaneous.

        a.   Governing Law:  This Agreement shall be governed by and
             construed in accordance with the laws of the State of New

        b.   Binding Effect:  This Agreement shall be binding upon and
             inure to the benefit of the parties hereto and their
             respective heirs, legal representatives, successors and
             assigns provided, however, neither party may assign any
             rights, nor secure the assumption of any obligations
             hereunder, to any third party without the prior written
             consent of the other party to this Agreement.

        c.   Notices.   All notices and other communications under this
             Agreement shall be in writing and shall be deemed to have been
             duly given or made as follows:

             i.   If sent by reputable overnight air courier (such as
                  Federal Express), 2 business days after being sent;

             ii.  If sent by facsimile transmission, with a copy mailed on
                  the same day in the manner provided in clause (i) above,
                  when transmitted and receipt is confirmed by the fax
                  machine; or

             iii. If otherwise actually personally delivered, when

             All notices and other communications under this Agreement shall be
             sent or delivered as follows:

             If to HLEG to:

             Michael Margolies
             Headliners Entertainment Group, Inc.
             14 Garrison Inn Lane
             Garrison, New York 10524
             Facsimile:  845-424-4003

             If to Rodriguez to:

             Eduardo Rodriguez
             Rascals Montclair, Inc.
             501 Bloomfield Avenue
             Montclair, NJ 07042
             Facsimile: 973-233-1299

             Each Party may change its address by written notice in accordance
             with this Section.

        d.   Entire Agreement:  This Agreement constitutes the entire
             agreement between the parties with respect to Rodriguez's
             employment by HLEG and the termination of such employment, and
             supersedes all prior agreements, representations, and promises
             by any party or between Rodriguez and HLEG related thereto,
             including without limitation the Employment Agreement.

        e.   Legal and Professional Advice:  The parties agree that they
             have been represented by counsel during the negotiation and
             execution of this Agreement and, therefore, waive the
             application of any law, regulation, holding or rule of
             construction providing that ambiguities in an agreement or
             other document will be construed against the party drafting
             such agreement or document. Rodriguez specifically
             acknowledges that he has had full opportunity to receive and
             consider such legal and professional advice as he may have
             required in order to fully understand the terms and conditions
             of this Agreement and its immediate and future effect.
             Rodriguez voluntarily enters into this Agreement having been
             fully and fairly informed by his own advisors as to the full
             force and effect of all of the terms and conditions herein.

     IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the date first above written.

Headliners Entertainment Group, Inc.

By:  /s/ Michael Margolies
     Michael Margolies, Secretary

     /s/ Eduardo Rodriguez
     Eduardo Rodriguez

Michael Margolies executes this Agreement to evidence his agreement to
purchase the Series B Stock in accordance with the provisions of Section 3

/s/ Michael Margolies
Michael Margolies