Exhibit 10.1
 

SETTLEMENT AGREEMENT
AND MUTUAL RELEASE
 
This Confidential Settlement Agreement and Mutual Release (“Agreement”) is dated
as of October 5, 2007 and is hereby entered into between NANA YALLEY (“Yalley”),
and WINSONIC DIGITAL MEDIA GROUP, LTD (“Winsonic” or the “Company”).
 
RECITALS
 
WHEREAS, certain claims and disputes between the parties have arisen as a result
of certain acts and occurrences which are the subject of a civil action (“Civil
Action”) styled, Nana Yalley v. Winsonic Digital Media Group, Ltd; Case No.
A529885, currently pending before the Eighth Judicial District Court in the
State of Nevada, Department 13; and
 
WHEREAS, the parties, without conceding or admitting liability, conclude that it
serves their respective interests to avoid the expenditure of additional time,
effort and resources in litigating their disputes and in continuing the Civil
Action, and that they now wish to fully, finally and forever settle and
compromise their claims and disputes against each other, including but not
limited to any and all claims to attorneys fees, costs and other expenses, and
to release, discharge and terminate all claims, demands, controversies, suits,
causes of action, damages, rights, liabilities and obligations which the parties
may have against each other, including but not limited to, the claims and
counterclaims set forth in the Civil Action, which either have been asserted or
which could have been asserted.
 
NOW, THEREFORE, in consideration of the following terms, covenants and
conditions set forth herein, the parties hereby agree as follows:
 
SETTLEMENT TERMS
 
1.  Simultaneously with the execution of this Agreement, Winsonic shall issue to
Yalley one million, eight hundred sixty four thousand, two hundred and
eighty-six (1,864,286) restricted shares of common stock of the Company.
 
 
a.
These shares are being issued with a Restrictive Legend expiration date of
December 9, 2007.

 
 
b.
The issuance of these shares has been approved by the Board of Directors of
Winsonic, as evidenced by the Written Consent of the Board of Directors attached
hereto as Exhibit “A”.

 
 
c.
Simultaneously with the execution of this Agreement, Winsonic and its counsel
shall execute, and will cause to be delivered to Pacific Stock Transfer Company
(“Pacific”) within three (3) business days following the execution of this
Agreement the Opinion Letter attached hereto as Exhibit “B.”

 
 
 
 

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Simultaneously with the execution of this Agreement, Winsonic shall issue to
Yalley one hundred thousand (100,000) restricted shares of common stock of the
Company.

 
 
a.
These shares are being issued with a Restrictive Legend expiration date of
October 5, 2009.

 
 
b.
The issuance of these shares has been approved by the Board of Directors of
Winsonic, as evidenced by the Written Consent of the Board of Directors attached
hereto as Exhibit “A”.

 
 
c.
Simultaneously with the execution of this Agreement, Winsonic and its counsel
shall execute, and will cause to be delivered to Pacific Stock Transfer Company
(“Pacific”) within three (3) business days following the execution of this
Agreement the Opinion Letter attached hereto as Exhibit “C”.

 
3.           Simultaneously with the execution of this Agreement, Winsonic shall
issue to Yalley an Option to purchase five hundred thousand (500,000) shares of
restricted common stock of the Company at the price of one dollar ($1.00) per
share.  The purchase Option shall vest immediately and Yalley shall have the
right to exercise the purchase option up to December 9, 2010.
 
 
a.
The issuance of this purchase Option has been approved by the Board of Directors
of Winsonic, as evidenced by the Written Consent of the Board of Directors
attached hereto as Exhibit “A”.

 
4.           Simultaneously with the execution of this Agreement, Yalley,
Winsonic, and Pacific shall execute the Stipulation and Order for Dismissal
attached hereto as Exhibit “D”.  Upon the issuance of the shares detailed in
Paragraphs 1 and 2 herein and confirmation from Pacific that it has received the
letters detailed in Paragraphs 1(c) and 2(c) herein, Yalley shall file the
executed Stipulation and Order for Dismissal.
 
5.           The parties shall bear their own costs, attorneys' fees and
expenses incurred in and as a result of the Civil Action.
 
6.           Yalley and Winsonic hereby release and forever discharge each other
from any and all claims for relief, losses, causes of action, costs, interest,
expenses, attorneys fees, liabilities, duties and obligations of any kind or
nature whatsoever, at law or in equity, whether known or unknown, fixed or
contingent, arising out of their dispute or any other cause whatsoever occurring
prior to the date of the execution of this Agreement.
 
7.           Yalley and Winsonic acknowledge that this Agreement is a compromise
settlement between them, and is not an admission of liability as to any claim,
and that this Agreement is a means of avoiding further litigation.
 
 
 
 

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8.           Nothing in this Agreement expresses or implies an intention on the
part of Yalley or Winsonic to confer upon any person, any rights or remedies by
reason of any term, provision, condition, undertaking, warranty, representation
or agreement contained herein.
 
9.           In the event it is necessary for either Yalley or Winsonic to
institute an action to interpret or enforce this Agreement, or to preclude the
purported violation of this Agreement, the prevailing party in such action shall
be entitled to reimbursement of reasonable costs, expenses and attorneys fees.
 
10.           This Agreement is made pursuant to and shall be governed by the
laws of the State of Nevada.
 
11.           This Agreement contains the entire understanding between Yalley
and Winsonic in connection with the subject matter discussed herein.  It is
expressly acknowledged and recognized by the parties that there are no other
oral or written agreements between the parties, and that this Agreement may be
modified, cancelled, supplemented or discharged only in a subsequent writing
signed by the parties.
 
12.           This Agreement is a result of negotiations, and, as such, shall be
deemed to have been jointly prepared by the parties.
 
13.           The normal rule of construction to the effect that any ambiguities
are to be resolved against the drafting party shall not be employed in the
interpretation of this Agreement or of any amendments or exhibits to this
Agreement.
 
14.           Yalley and Winsonic each warrant and acknowledge that they have
been fully advised by legal counsel concerning the Agreement and they are
relying fully upon their own judgment and advice of such counsel.
 
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15.           This Agreement may be executed in counterparts and delivered by
facsimile with the same force and effect as if all signatures were set forth in
a single instrument.
 
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set
forth above.
 
 
 
 
By:     /s/ Nana
Yalley                                                                                                                              
NANA YALLEY
 
 
AS REVIEWED BY:
 
GORDON & SILVER, LTD.
 
By:/s/ Joel
Schwarz                                                                                                                                   
ERIC R. OLSEN
Nevada Bar No. 3127
JOEL Z. SCHWARZ
Nevada Bar No. 9181
3960 Howard Hughes Parkway, 9th Floor
Las Vegas, NV  89109
Attorneys for Plaintiff
NANA YALLEY
 
WINSONIC DIGITAL MEDIA GROUP, LTD.
 
 
By:     /s/ Winston
Johnson                                                                                                                                        
 
 
 
AS REVIEWED BY:
 
PAUL HASTINGS, LLP
 
By:     / s/ William K.
Whitner                                                                                                                                      
 WILLIAM K. WHITNER
 

 
 
 

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