ex10-1.htm


    Exhibit
      10.1

     

    
       SETTLEMENT
        AGREEMENT WITH

      GENERAL
        UNCONDITIONAL MUTUAL RELEASE

      


      This
        Settlement Agreement With General Unconditional Mutual Release (“the Agreement”)
        is entered into this 5th day of November, 2007, by and between the parties
        identified below.

      


      PARTIES

       

      The
        parties to and beneficiaries of this Agreement (the "Settling Parties") are
        ERIC YOUNG ("Plaintiff"), and WINSONIC DIGITAL MEDIA
        GROUP, LTD. (the “Company”), its present and former employees,
        officers, directors, owners, stockholders and representatives, as well as
        any
        successors or assigns of the corporate defendant (collectively, the
“Defendant”).

      


      RECITALS

       

      WHEREAS,
        Plaintiff filed suit against the Company in Fulton County Superior Court
        (the
“Court”), Civil Action No. 2007 CV 128080 (the “Young case”), alleging that
        Defendant is liable to Plaintiff for breach of contract, unpaid wages, unpaid
        consulting fees and other alleged conduct in violation of state statutes,
        and
        seeking compensatory and punitive damages and attorneys’ fees and other
        relief.  Defendant has denied and continues to deny any and all acts
        of misconduct whatsoever, alleged or not alleged; Defendant has denied and
        continues to deny any and all claims and liability, alleged and not alleged,
        and
        denies causing damage of any type to Plaintiff.  Defendant has further
        asserted a counterclaim against Plaintiff, alleging breaches of contract
        and
        fiduciary duties, as well as asserting a claim for unjust
        enrichment.  Plaintiff has denied and continues to deny any and all
        claims and liability, alleged and not alleged, and denies causing damage
        of any
        type to Defendant.

      


      NOW,
        THEREFORE, in consideration of the recitals, promises and general covenants
        contained herein, the Settling Parties agree as follows.

      


      


      SCOPE
        OF SETTLEMENT/RELEASE

       

      1.           This
        Agreement is intended to and does forever release and settle any and all
        claims
        and disputes by Plaintiff against Defendant, whether known or unknown, from
        the
        beginning of time up to and through the date this Agreement is
        executed.  This release and settlement includes, but is not limited
        to, any and all claims which were or could have been asserted in the
Young case.  Upon receipt of all agreed-upon monies according
        to the schedule described herein, Plaintiff will release and settle all claims,
        title and/or interests against any Defendant, including all claims governed
        by
        federal statute, state statute, or common law, including but not limited
        to
        claims in the Young case, except for claims that the law does not permit
        Plaintiff to waive by signing this Agreement.  This release and
        settlement includes, but is

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      not
        limited to, any claims for damages which were, have been, or could have been
        sought, of any kind, up to the date this Agreement is executed.  This
        release and settlement includes claims for employee
        health, welfare and disability benefits, compensatory damages, punitive damages,
        equitable rights and relief of any and all types and description, including
        but
        not limited to claims for relief arising from alleged discrimination, disability
        protections and/or benefits, retaliation, discharge, constructive discharge
        or
        any other alleged violation of any legally protected status or right and
        all
        forms of statutory and common law damages.  This release and
        settlement encompasses rights to employee benefits protected by the Employee
        Retirement Income Security Act (“ERISA”), and any rights/entitlements under
        Title VII of the Civil Rights Act of 1964 (“Title VII”), Sections 1981 and 1983
        of the Civil Rights Act of 1866, the Age Discrimination in Employment Act
        of
        1967 (“ADEA”), the Older Workers’ Benefit Protection Act (“OWBPA”), the Civil
        Rights Act of 1991, the Equal Pay Act, the Americans With Disabilities Act
        (“ADA”), and any other labor, employment, or anti-discrimination laws; any
        contract, tort, whistleblower, personal injury, or wrongful discharge claim(s);
        and any other federal, state, or local constitution, regulation, law (statutory
        or common), or legal theory.

      


      2.            This
        Agreement is further intended to and does forever release and settle any
        and all
        claims and disputes by Defendant against Plaintiff, whether known or unknown,
        from the beginning of time up to and through the date this Agreement is
        executed.  This release and settlement includes, but is not limited
        to, any and all counterclaims which were or could have been asserted in the
        Young case.  The Settling Parties are intentionally releasing
        claims that they do not know that they might have and that, with hindsight,
        they
        might regret having released.  The Settling Parties warrant and
        represent that they have not assigned or given away any of the claims they
        are
        releasing.

      


      3.           The
        Settling Parties hereby expressly consent to a Consent Mutual Order of Dismissal
        with Prejudice and agree to a Consent Mutual Dismissal with Prejudice as
        to all
        claims which were made or could have been made at any time in the Young
        case by either party, upon Plaintiff’s receipt of all agreed upon sums described
        herein.  Each Settling Party further releases and waives with
        prejudice any and all other claims of any nature which they have or may have,
        or
        could have raised against the other Settling Party known or unknown, up to
        the
        date that this Agreement is executed, including but not limited to, any and
        all
        claims arising from or in any way related to Plaintiff’s
        employment/opportunity/supervision within the Company.

      


      NO
        ADMISSION OF LIABILITY

       

      4.           Neither
        this Agreement nor any consideration given hereunder constitutes an admission,
        nor is it to be construed as an admission of any right, entitlement or fault
        or
        liability of any kind on the part of any Settling Party.  The Settling
        Parties agree that each Settling Party denies any and all fault or liability
        of
        any type and denies any wrongful conduct whatsoever with regard to any
        matter.

       

      PAYMENT
        AND COMPENSATION TO PLAINTIFF

       

      5.           For
        and in consideration of the mutual releases, settlements, promises, recitals,
        waivers, terms, and conditions set forth in this Agreement, and in consideration
        of the dismissal 

       

       

      
        
          
          

        

        
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      with
        prejudice of the Young case, in its entirety by the Settling Parties, and
        Plaintiff’s binding covenants set forth below, Defendant hereby agrees to
        transmit payment (the “Settlement Funds”) in the amount of $120,000.00 (One
        Hundred Twenty Thousand and No/100 Dollars), minus applicable federal, state,
        and local tax withholdings, to Plaintiff in settlement of his claim for wages
        earned and owed; $55,000.00 (Fifty-five Thousand and No/100 Dollars) in
        settlement of his claim for consultant fees earned, and $75,000.00 (Seventy-Five
        Thousand and No/100 Dollars) in settlement of his claim for intentional torts;
        and $5,000.00 (Five Thousand and No/100 Dollars) to Beverly Adams, Plaintiff’s
        attorney, in full satisfaction of all attorneys’ fees, costs, and expenses
        incurred by anyone representing Plaintiff against Defendant, according to
        the
        following payment schedule:

      


      (a)
                         on
        or before November 7, 2007, (i) a check in the amount of $15,000.00 (Fifteen
        Thousand and No/100 Dollars), reported as 1099 income, made payable to Eric
        Young and (ii) a check in the amount of $1,000.00 (One Thousand and No/100
        Dollars) made payable to Beverly Adams;

      


      (b)                 on
        or before November 27, 2007, (i) a check in the amount of $15,000.00 (Fifteen
        Thousand and No/100 Dollars), reported as 1099 income, made payable to Eric
        Young and (ii) a check in the amount of $1,000.00 (One Thousand and No/100
        Dollars) made payable to Beverly Adams;

      


      (c)                 on
        or before December 27, 2007, (i) a check in the amount of $15,000.00 (Fifteen
        Thousand and No/100 Dollars), reported as 1099 income,  made payable
        to Eric Young and (ii) a check in the amount of $1,000.00 (One Thousand and
        No/100 Dollars) made payable to Beverly Adams;

      


      (d)                 on
        or before January 27, 2007, (i) a check in the amount of $25,000.00
        (Twenty-Five Thousand and No/100 Dollars), reported as 1099 income, made
        payable
        to Eric Young and (ii) a check in the amount of $1,000.00 (One Thousand and
        No/100 Dollars) made payable to Beverly Adams; and

      


      (e)                 on
        or before February 27, 2007, (i) a check in the amount of $180,000.00 (One
        Hundred EightyThousand and No/100 Dollars), minus applicable federal, state,
        and
        local tax withholdings on $120,000 (One Hundred Twenty Thousand and No/100
        Dollars) of that amount, made payable to Eric Young and (ii) a check in the
        amount of $1,000.00 (One Thousand and No/100 Dollars) made payable to Beverly
        Adams (the “Balloon Payment”). 

      


      6.           The
        payment of these amounts by Defendant, the issuance to Plaintiff a vested
        stock
        option to purchase up to three hundred eighty thousand (380,000) shares of
        restricted common stock (noted below), and the approved  transfer of
        the 500,000 restricted shares of Common Stock issued to Plaintiff (also noted
        below), will constitute payment in full in exchange for the full, final and
        complete
        settlement of the Young case as to Defendant and full and final release
        of any and all claims, known or unknown, against Defendant that exist or
        may
        have existed at any time up to the date of execution of this
        Agreement.  At the time of execution of this Agreement, Plaintiff’s
        counsel will provide Tax I.D. for issuance to Defendant’s counsel of an IRS
        Form 1099-MISC in connection with payment of Settlement Funds.


       

       

      
        
          
          

        

        
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            	time
                    of execution of this Agreement, Plaintiff’s counsel will provide Tax I.D.
                    for issuance to Defendant’s counsel of an IRS Form 1099-MISC in
                    connection with payment of Settlement
                    Funds.


          

           

        

      

                
             7.           Defendant
        further agrees to issue Plaintiff by November 5, 2007 a vested stock option
        to
        purchase up to three hundred eighty thousand (380,000) shares of restricted
        common stock, par value $0.001, of the Company (“Common Stock) at an exercise
        price of One Dollar ($1.00) per share (the “Stock Options”), pursuant to the
        terms and conditions of Plaintiff’s contractual agreement with
        Defendant.  The Stock Options shall be fully vested upon issuance and
        shall have an expiration date of November 5, 2010, in
        accordance with WinSonic’s employee stock option plan in effect during Young’s
        employment with the Company.  The Settling Parties acknowledge that
        Defendant has previously issued Plaintiff 500,000 restricted shares of Common
        Stock.  Defendant agrees to process and approve any transfer of any
        restricted shares of Common Stock issued to Plaintiff pursuant to this Agreement
        at the earliest possible date, subject to and in accordance with all state
        and
        federal laws, including, but not limited to, the Securities Act of 1933,
        as
        amended, the Securities Exchange Act of 1934, as amended, and all rules and
        regulations promulgated by the Securities and Exchange Commission.

      


      RIGHT
        TO CURE; DEFAULT PROVISIONS

      


      8.           In
        the event Defendant fails to pay any of the Settlement Funds, deliver the
        stock
        options due to be paid or delivered by Defendant, and approve the transfer
        of
        the 500,000 restricted shares of Common Stock issued to Plaintiff, hereunder
        in
        strict compliance with the terms of this Agreement, and such failure shall
        continue for five (5) days after written notice from Plaintiff demanding
        cure of
        such failure, then and in that event, counsel for Plaintiff shall, without
        further notice to Defendant, submit an affidavit to the Court setting forth
        the
        Defendant's default, the amounts received by Plaintiff under this Agreement,
        that portion of the obligations of the Defendant pursuant to this Agreement
        which remains outstanding at the time of said default, and upon receipt of
        said
        affidavit, the Court shall, ex parte, enter final judgment against Defendant
        in
        favor of Plaintiff for the judgment amount, less all amounts paid pursuant
        to
        this Agreement, as well as an additional $25,000 (Twenty-Five Thousand Dollars),
        plus post-judgment interest at the legal rate.  Notwithstanding
        anything herein to the contrary, if Defendant cannot pay the Balloon Payment
        due
        on February 27, 2008, Defendant may make a payment of $15,000 (Fifteen Thousand
        and No/100 Dollars) by February 27, 2008 to Plaintiff without being in default,
        and shall extend the due date of the Balloon Payment to then be due on March
        27,
        2008.  There will be no other extensions of the Balloon Payment due
        date without the express written consent of Plaintiff.

      


      IRS
        FILINGS REGARDING SETTLEMENT FUNDS

       

      9.           Plaintiff
        agrees that Defendant is required to report payment of Settlement Funds to
        tax
        authorities and to withhold all taxes from payments it makes hereunder that
        it
        determines it is legally required to withhold.  Defendant will issue
        an IRS Form 1099 MISC to Plaintiff reflecting
        the payment of $45,000 for 2007.  Defendant will issue an IRS Form
        1099 to Plaintiff reflecting the payments of $85,000 for
        2008.  Defendant will issue an IRS Form W-2 to Plaintiff reflecting
        the payment of $120,000.00 (One Hundred Twenty Thousand and No/100 Dollars),
        

       

       

      
        
          
          

        

        
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      minus
        25%
        for federal taxes (per Circular E Employers Tax Guide Publication 15 for
        Supplemental wages), 6% for state taxes (per Georgia Department of Revenue),
        and
        7.65% for Social Security and Medicare taxes. Defendant will issue IRS Forms
        1099-MISC to Beverly Adams reflecting the payment of $3,000.00 (Three Thousand
        and No/100 Dollars) for 2007 and $2,000 (Two Thousand and No/100 Dollars)
        for
        2008 to Plaintiff’s attorney.

      


      COSTS
        AND ATTORNEY'S FEES

       

      10.         The
        Settling Parties unconditionally and reciprocally release and hold each other
        harmless from any claims for attorney's fees, costs, or expenses in any form
        incurred by the Settling Parties and/or their respective counsel, less those
        fees being paid by Defendant to Plaintiff’s counsel, as otherwise agreed upon
        herein.  The Settling Parties will each bear their own costs of
        litigation and attorney's fees.

      


      WARRANTY
        AND INDEMNIFICATION

       

      11.         Plaintiff
        covenants and agrees that he and/or his lawyer are solely and entirely
        responsible for the payment of any and all federal, state, or local taxes
        or
        assessments due upon the Settlement Funds paid pursuant to this Agreement
        (other
        than mentioned in Section 9 above). Plaintiff expressly
        warrants that he will hold Defendant harmless from any claims, tax, interest
        or
        penalty, asserted by any taxing authority relating to any tax, arising from
        the
        payment of any Settlement Fund accrued up to but not to exceed, the actual
        tax
        consequences to Defendant, plus any reasonable attorney’s fees incurred by
        Defendant in responding to such claim.

      


      DISMISSAL
        OF ACTION

       

      12.         In
        consideration of the premises, recitals, general promises and undertakings
        set
        forth in this Agreement, the Settling Parties stipulate and agree to a Final
        Mutual Order of Dismissal, and further consent to dismissal, fully, forever
        and
        with prejudice of all claims which were or could have been asserted in the
        Young case, upon full and final payment of all Settlement Funds due under
        the terms of this Settlement Agreement.

      


      NO
        ADDITIONAL CLAIMS

       

      13.         Plaintiff
        warrants and represents that he has not filed and does not have any
        administrative claims or complaint of any kind, other than the Young
        allegations, against the Defendant in any federal, state, county, municipal
        or
        local court or agency.  Plaintiff further covenants that he will not
        file any future administrative claim, charge, or complaint against the Defendant
        with any agency or court at any time hereafter regarding any acts, promises,
        allegations, utterances, writings, representations, or omissions, relating
        to in
        any way to all or any of the Defendant, occurring or alleged to have occurred
        at
        any time up to the date of the execution of this Agreement.

       

      14.         The
        Settling Parties warrant and agree that the negotiations, agreements, facts,
        terms, amounts, and provisions of this Agreement, will remain strictly
        confidential.  The Settling Parties further agree not to discuss the
        allegations in this case, or any negotiations, agreements, 

       

       

      
        
          
          

        

        
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      facts,
        terms, amount and/or provisions of this Agreement with any person or entity
        except as specifically permitted herein.  As the sole exceptions to
        this confidentiality requirement, it is not a violation of this Agreement
        if
        disclosure is made in response to an order of a court of competent jurisdiction,
        or if disclosure is made solely for the purposes tax or legal advice, so
        long as
        such entities/individuals are obliged to maintain such information in strict
        confidence.  It also is not a violation if disclosure is made as part
        of Defendant’s mandatory SEC filings.  In the event of any inquiry
        concerning this case and/or any allegation set forth therein, any claims
        against
        Defendant, and/or any term of this Agreement, the parties, will strictly
        limit
        any response to the fact that “the disputes have been resolved; the case has
        been settled.”  Each Settling Party further agrees that it will not
        discuss the other Settling Party, including the Company or any owner, parent,
        subsidiary or successor entity in any disparaging terms.  Any request
        for references will be limited to Defendant’s supply of dates of employment and
        position(s) held.

      


      CONSIDERATION
        OF AGREEMENT

       

      15.         Plaintiff
        acknowledges that, before signing this Agreement, he was given a period of
        at
        least 21 (twenty-one) days in which to consider this Agreement.  If he
        chose to sign this Agreement before the end of the 21-day period, Plaintiff
        represents that he chose to do so of his own free will, and after he determined
        that he did not need the full 21-day period to consider this
        decision.  Plaintiff waives any right he might have to additional time
        beyond the 21-day consideration period within which to consider this
        Agreement.  Plaintiff further acknowledges that:  (1) he
        took advantage of this 21-day period to the extent he deemed necessary to
        consider this Agreement before signing it; (2) he carefully read this Agreement;
        (3) he fully understands this Agreement; (4) he is entering into this Agreement
        voluntarily; (5) he is receiving valuable consideration in exchange for his
        execution of this Agreement that he would not otherwise be entitled to receive;
        and (6) Defendant, in writing, encouraged him to discuss this Agreement with
        his
        attorney (at his own expense) before signing the Agreement, and he did so
        to the
        extent he deemed appropriate.

      


      RIGHT
        TO RESCIND

      


      16.         Plaintiff
        may cancel this Agreement for any reason within seven (7) full 24-hour periods
        after he has signed it.  If Plaintiff decides to cancel this Agreement
        and mails his notice of cancellation, the notice must be postmarked within
        the
        seven (7) day period, sent by certified mail, return receipt
        requested.  If Plaintiff cancels his release of claims against
        Defendant, the notice should be addressed to:

      


      William
        K
        Whitner, Esq.

      Paul,
        Hastings, Janofsky & Walker, LLP

      600
        Peachtree Street, NE, Suite 2400

      Atlanta,
        GA 30308

      


      WARRANTIES

       

       

      
        
          
          

        

        
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      17.         The
        Settling Parties warrant and represent, each to the other, that they have
        been
        represented and advised by counsel and are fully informed and have full
        knowledge of the terms, conditions, and effects of this Agreement.

      


      18.         The
        Settling Parties warrant and represent, each to the other, that they have
        either
        personally or through their attorneys, investigated facts surrounding this
        Agreement and are fully satisfied with the terms and effects of this Agreement;
        and that they are legally competent to execute this Agreement.

      


      19.         The
        Settling Parties warrant and represent, each to the other, that no promise
        or
        inducement has been offered or made except as herein set forth, and that
        this
        Agreement is executed without reliance upon any other statement or
        representation in connection with this Agreement.

      


                  
           20.         If any
        provision or term of this Agreement should be declared invalid or unenforceable,
        such declaration shall not affect the validity or enforceability of the
        remaining terms and conditions hereof.  If this Agreement is revoked
        or cancelled, Plaintiff will repay the special payment and benefits he received
        for signing it.

       

      21.         The
        terms of this Agreement, and the [Order of Mutual Dismissal with Prejudice]
        of
        this case in its entirety, constitute the complete understanding and agreement
        of the Settling Parties with respect to all matters within the scope of this
        Agreement, and no other promise or agreement shall be binding.

      


      22.         This
        Agreement may not be amended, modified, superseded, canceled, or terminated,
        and
        its terms and conditions may not be waived, except by a written instrument
        executed by the Settling Parties.  No waiver by any Settling Party of
        any condition or of the breach of any term, covenant, representation or warranty
        contained in this Agreement, in any one or more instances, shall be deemed
        to be
        or construed as a further or continuing waiver of any such condition or breach
        in other instances, or as a waiver of any other condition or of any breach
        of
        any other terms, covenants, representations or warranties contained in this
        Agreement.

      


      23.         The
        rights and obligations of the Settling Parties under this Agreement shall
        inure
        to the benefit of and shall be binding upon their successors, assigns,
        employees, agents and/or legal representatives.

       

       

      
        
          
          

        

        
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      FULL
        AND KNOWING WAIVER

       

         
        24.         By signing this agreement,
        the Settling Parties certify that: they carefully read and fully understand
        this
        Agreement; they consulted an attorney before signing this Agreement; they
        agree
        to all terms knowingly, voluntarily and without intimidation, coercion, or
        pressure.  They further warrant that they have no desire for
        additional time for consideration and sign this Agreement to be effective
        on the
        date of execution.

      


      GOVERNING
        LAW

       

                
             25.         The
        Settling Parties agree that the laws of the State of Georgia shall govern
        this
        Agreement and all disputes concerning any aspect of this Agreement.

      


      


      


      [Signatures
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      AGREED
        AND ACCEPTED:

       

      
        	
                _/s/
                  Eric Young_________________

              	
                __/s/
                  November 5, 2007______

              


        	
                ERIC
                  YOUNG

              	           
                Date


      

       

      WITNESSED:

       

      
        	
                _/s/
                  Beverly R. Adams___________

              	
                __/s/
                  November 5, 2007______

              


      

      
        	
                BEVERLY
                  R. ADAMS,
                  ESQ.

              	
                            Date

              


      

      100
        Chastain Center Blvd., Suite 165

      Kennesaw,
        GA 30144

      Counsel
        for Eric Young 

      


       

      AGREED
        AND ACCEPTED:

      


      
        	
                __/s/
                  Winston D. Johnson_________

              	
                __/s/
                  November 5, 2007______

              


        	WINSTON
                D. JOHNSON  	           
                Date


      

      Chief
        Executive Officer

      WinSonic
        Digital Media Group, Ltd.

      Centennial
        Tower, Suite 2600

      101
        Marietta Street, N.W.

      Atlanta,
        Georgia  30303

      
 

      WITNESSED:

      


      
        	
                _/s/
                  William K. Whitner__________

              	
                __/s/
                  November 5, 2007______

              


        	WILLIAM
                K WHITNER, ESQ. 	        
                   Date


      

      Paul,
        Hastings, Janofsky & Walker LLP

      600
        Peachtree Street, N.E., Suite 2400

      Atlanta,
        Georgia 30308

      Counsel
        for Defendant WinSonic Digital

      Media
        Group, Ltd.

       

       

      9