Exhibit 10.1
 
SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE
 
This Settlement Agreement and Mutual General Release (hereinafter, the
“Agreement”) is made and entered into as of May ___, 2009 by and between Golden
State Equity Investors, Inc., a California corporation (formerly known as Golden
Gate Investors, Inc.) (“GSEI”) and Mega Media Group, Inc., a Nevada corporation
(“Mega”). GSEI and Mega will sometimes be referred to individually as a “Party”
and collectively as the “Parties” throughout this Agreement.
 
RECITALS
 
A. WHEREAS, GSEI filed a Complaint in the Superior Court of the State of
California, County of San Diego (the “Court”) bearing case number
37-2009-00085176-CU-CO­CTL in which GSEI alleged claims against Mega, in which
GSEI asserted a cause of action for breach of contract regarding the Investment
Agreements (as defined in the aforementioned Complaint) against Mega (the
“Action”); and
 
B. WHEREAS, the Parties now wish to reach a final resolution of the
 
disputes between them.
 
NOW, THEREFORE, in consideration of the mutual promises made herein, the Parties
agree as follows:
 
AGREEMENT
 
1.             Recitals: The Recitals set forth above are an integral part of
this
 
Agreement, and shall be used in any interpretation of this Agreement.
 
2.             Payment: Mega agrees to pay GSEI the aggregate sum of $250,000.00
 
(the “Settlement Amount”), payable as follows:
 
(a) Mega shall pay to GSEI in cash, via wire transfer or other available funds,
the amounts at such times as set forth on the Payment Schedule attached hereto
as Schedule 1.
(b) Mega’s payments made pursuant to Section 2(a) hereof must be received by
GSEI no later than two business days after the applicable date listed in the
Payment Schedule attached hereto as Schedule 1.
 
Notwithstanding the foregoing, in the event that (i) Mega has satisfied all of
the payments listed in Schedule 1 attached hereto through February 1, 2010, for
an aggregate payment amount of $125,000, on or prior to February 1, 2010, and
(ii) an Event of Default has not occurred under this Agreement on or prior to
February 1, 2010, then the Settlement Amount shall be deemed paid in full.
Should any payment described in this Section not be timely received by GSEI,
such that an Event of Default exists under this Agreement, the outstanding
Settlement Amount shall accrue interest from the date hereof at a rate of 9.75%
per annum.
 

 

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3.             Notice of Conditional Settlement; Dismissal of Action; and
Stipulated  Judgment: Concurrent with the execution of this Agreement, the
Parties agree that a Notice of Conditional Settlement will be filed with the
Court. Further, upon GSEI’s receipt of the entire Settlement Amount, or as soon
as reasonably practicable thereafter, GSEI shall cause the Action to be
dismissed with prejudice. Concurrently with the execution of this Agreement,
GSEI and Mega shall enter into that certain Stipulation for Future Entry of
Judgment attached hereto as Exhibit A (the “Stipulation”).
 
4.             Event of Default: Each of the following shall constitute an
“Event of Default” under the terms of this Agreement:
 
(a) Any failure by Mega to make any scheduled payment of the Settlement Amount
within two days of the dates set forth in Section 2 of this Agreement; and
 
(b) Any breach of the representations or covenants made by the Parties in this
Agreement.
 
5.             Mutual Releases: Effective upon its receipt of the Settlement
Amount, and except as to obligations created herein, GSEI, for itself and its
past and present shareholders, officers, directors, employees, administrators
and representatives, hereby fully releases, remises, acquits and forever
discharges Mega, and its affiliates, predecessors and successors, together with
each of their past and present officers, directors, shareholders,
representatives, employees, consultants, attorneys, fiduciaries and assigns,
from any and all claims, demands, actions, losses, judgments, debts, covenants,
executions, liabilities, obligations and expenses of any kind or nature arising
out of any acts, omissions, liabilities, transactions, transfers, happenings,
violations, promises, facts or circumstances arising out of, related to, or
described in the Action or the Investment Agreements, whether or not now known
or suspected or claimed, whether in law, admiralty, arbitration, administrative,
equity or otherwise, and whether accrued or hereafter maturing.
 
Effective upon execution of this Agreement and except as to obligations created
herein, Mega, for itself and its past and present shareholders, officers,
directors, employees, administrators and representatives, hereby fully releases,
remises, acquits and forever discharges GSEI, and its affiliates, predecessors
and successors, together with each of their past and present officers,
directors, shareholders, representatives, employees, consultants, attorneys,
fiduciaries and assigns from any and all claims, demands, actions, losses,
judgments, debts, covenants, executions, liabilities, obligations and expenses
of any kind or nature arising out of any acts, omissions, liabilities,
transactions, transfers, happenings, violations, promises, facts or
circumstances arising out of, related to, or described in the Action or the
Investment Agreements, whether or not now known or suspected or claimed, whether
in law, admiralty, arbitration, administrative, equity or otherwise, and whether
accrued or hereafter maturing.
 
6.             Section 1542 Waiver: Each Party to this Agreement acknowledges
and affirms that it is familiar with Section 1542 of the California Civil Code,
which provides that:
 
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO
 
 

 

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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.
 
Each Party knowingly and voluntarily waives the provisions of Section 1542 of
the California Civil Code, as against each Party released hereby, and
acknowledges and agrees that this waiver is an essential and material term of
this settlement which led to this Agreement, and that without such waiver, the
settlement reflected in this Agreement would not have been entered into. Each
Party further acknowledges the significance and consequence of the release and
the specific waiver of Section 1542 of the California Civil Code.
 
7.             No Admission of Liability: The Parties understand and acknowledge
that this Agreement constitutes a compromise and settlement of disputed claims
and is made to buy peace and for no other reason. No action taken by the Parties
hereto either previously or in connection with this Agreement shall be deemed or
construed to be an admission of the truth or falsity of any claims heretofore
made, or an acknowledgement or admission by any Party of any fault or liability
whatsoever to the other Parties or third parties.
 
8.             Authority: The Parties represent and warrant that the undersigned
individuals have the authority to act on behalf of the signing Party and have
the authority to bind that Party, and all that may claim through it, to the
terms and conditions of this Agreement. Each Party warrants and represents that
there are no liens or claims of lien or assignment or equity or otherwise of or
against any of the claims or causes of action released herein.
 
9.             Representation: The Parties represent and warrant that they each
have had an opportunity to consult with an attorney, and have carefully read and
understand the scope and effect of the provisions of this Agreement. No Party
has relied upon any representations or statements made by any other Party, which
are not specifically set forth in this Agreement. Each of the Parties warrant
and represent that in executing this Agreement, such Party has relied on legal
advice from the attorney of its choice, that the terms of this Agreement and its
consequences have been completely read and explained to such Party by that
attorney, and that such Party fully understands the terms of this Agreement.
 
10.             No Prior Assignment Indemnity. The Parties represent and warrant
that they are the sole and lawful owner of all right, title and interest in and
to every claim and other matter which each purports to release herein, and that
such Party has not hereto assigned or transferred, or purported to assign or
transfer, to any person or entity any right, title or interest in any such claim
or other matter herein released. In the event that any Party shall have assigned
and transferred, or purported to assign or transfer, any claim or other matter
herein released, such Party shall indemnify, defend and hold harmless the other
Parties from and against any loss, cost, or claim or expense (including, but not
limited to, all costs related to defense of any action including reasonable
attorneys’ fees) based upon, arising out of or occurring as a result of any such
claim or assignment to transfer.
 
11.            No Right to Rescission: The Parties represent and warrant that
they have conducted all necessary investigations and have consulted with counsel
and are not relying on
 
 

 

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any representations, except those contained in this Agreement and the Parties
assume the risk of any untruths regarding any matters upon which they have
relied and forever waive any rights to rescind this Agreement and the sole
remedy for the Parties is to enforce the terms of this Agreement.
 
12.             Severability: In the event that any provision hereof becomes
declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement shall continue in full force and effect without said
illegal provision.
 
13.             Entire Agreement: This Agreement represents the entire agreement
and understanding between the Parties, and represents the complete, final and
exclusive embodiment of their agreement concerning the matters set forth in the
Recitals. Further, this Agreement shall supersede and replace any and all prior
and contemporaneous agreements, representations and understandings regarding the
subject of this Agreement. Notwithstanding the provisions of California Evidence
Code Section 1152, this Agreement is admissible for purposes of enforcement.
 
14.             Governing Law, Exclusive Jurisdiction: This Agreement shall be
governed by the laws of the State of California, including all matters of
construction, validity, performance, and enforcement and without giving effect
to the principles of conflict of laws. By signing this Agreement, the Parties
hereby agree and submit to the jurisdiction of the courts in the downtown branch
of the courts of San Diego County, California. Each of the Parties consents to
the exclusive jurisdiction of the federal courts whose districts encompass any
part of the City of San Diego or the state courts of the State of California
sitting in the City of San Diego in connection with any dispute arising under
the terms of this Agreement. Each Party hereby irrevocably and unconditionally
waives, to the fullest extent it may effectively do so, any defense of an
inconvenient forum or improper venue to the maintenance of such action or
proceeding in any such court and any right of jurisdiction on account of its
place of residence or domicile. Each Party irrevocably and unconditionally
consents to the service of any and all process in any such action or proceeding
in such courts by the mailing of copies of such process by registered or
certified mail (return receipt requested), postage prepaid, at its address
specified in Section 18 of this Agreement. Each Party agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.
 
15.             Counterparts: This Agreement may be executed in counterparts and
each counterpart shall have the same force and effect as an original and
constitute an effective, binding agreement on the part of each of the
undersigned. The Agreement may be transmitted by facsimile or otherwise.
 
16.             No Construction Against the Drafter: This Agreement shall be
deemed jointly drafted and written by all Parties to it and shall not be
construed or interpreted against any particular Party, regardless of which Party
or counsel originated or drafted any portion of it.
 
17.             Enforcement of Settlement: In the event of any litigation to
enforce the terms of this Agreement, the prevailing Party shall be entitled to
reasonable attorneys’ fees, as well as to such costs as may be awardable to the
prevailing Party by rule or statute in the court in which the action is brought.
 
 

 

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18.             Notices: Any notices, consents, waivers, or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered (i) upon receipt, when
delivered personally; (ii) upon confirmation of receipt, when sent by facsimile;
(iii) three days after being sent by U.S. certified mail, return receipt
requested, or (iv) one day after deposit with a nationally recognized overnight
delivery service, in each case properly addressed to the Party to receive the
same. The addresses and facsimile numbers for such communications shall be:
 
If to Mega, to:
 
Mega Media Group, Inc.
1122 Coney Island Ave., Suite 205
Brooklyn, NY 11230
Telephone:    718-947-1100
Facsimile:       646-417-5109
 
If to GSEI, to:
 
Golden State Equity Investors, Inc.
1150 Silverado Street, Suite 220
La Jolla, California 92037
Telephone:    858-551-8789
Facsimile:       858-551-8779
 
Each Party may change its foregoing address by notice given pursuant to this
Section 18.
 
19.             Survival of Warranties. The representations and warranties
contained in this Agreement are deemed to and do survive the execution hereof.
 
20.     Modifications. This Agreement may not be amended, canceled, revoked or
otherwise modified except by written agreement subscribed by the Parties to be
charged with such modification.
 
 
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21.            No Implied Waiver. No action or failure to act shall constitute a
waiver of any right or duty afforded under this Agreement, nor shall any action
or failure to act constitute an approval of, or acquiescence in, any breach,
except as may be specifically agreed in writing. Waiver of any one provision
herein shall not be deemed to be a waiver of any other provision herein.
 
22.             Termination of Investment Agreements. Upon GSEI’s receipt of the
Settlement Amount, the Investment Agreements, including the 7% Convertible
Debenture issued by Mega to GSEI dated as of April 18, 2008, the Securities
Purchase Agreement between Mega and GSEI dated as of April 18, 2008 and the
Secured Promissory Note issued by GSEI to Mega dated as of April 18, 2008, shall
be terminated and of no further force or effect.
 
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first set forth above.
 
        Golden State Equity Investors, Inc.
 
        By:     __________________________                           
        Name: _________________________
        Title: __________________________
 
        Mega Media Group, Inc.
 
        By:     __________________________                           
        Name: _________________________
        Title: __________________________
 
 
 
 

 

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Schedule 1
Payment Schedule
 

           
 
     
Payment Amount
 
June 1, 2009
  $ 15,000  
July 1, 2009
  $ 15,000  
August 1, 2009
  $ 15,000  
September 1, 2009
  $ 15,000  
October 1, 2009
  $ 15,000  
November 1, 2009
  $ 15,000  
December 1, 2009
  $ 15,000  
January 1, 2010
  $ 15,000  
February 1, 2010
  $ 5,000  
March 1, 2010
  $ 15,000  
April 1, 2010
  $ 15,000  
May 1, 2010
  $ 15,000  
June 1, 2010
  $ 15,000  
July 1, 2010
  $ 15,000  
August 1, 2010
  $ 15,000  
September 1, 2010
  $ 15,000  
October 1, 2010
  $ 15,000  
November 1, 2010
  $ 5,000  

 
 
 
 

 

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Exhibit A
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 

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