f8k051309ex10i_megamedia.htm


    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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