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
significan
