SETTLEMENT AGREEMENT AND GENERAL RELEASE
Exhibit 10.2
SETTLEMENT
AGREEMENT AND
GENERAL RELEASE
THIS
SETTLEMENT AGREEMENT AND GENERAL
RELEASE (“Agreement”) is made and entered into as of January 17,
2008, by and between plaintiff ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (“Plaintiff” or
“▇▇▇▇▇▇”) on the one hand, and defendants ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (“▇▇▇▇▇▇▇”) and
WinSonic Digital Media Group, Inc. (“WinSonic”) (collectively, “Defendants”) on
the other hand. This Agreement also will refer to Plaintiff and
Defendants individually as “Party” and to Plaintiff and Defendants collectively
as “Parties.”
RECITALS
A. WinSonic
became indebted to Plaintiff
as of September 3, 2004, in the amount of $600,000 plus 80,000 shares of
WinSonic stock. As of November 20, 2004, the cash portion of that
obligation remained $432,896.62 which together with accrued interest thereon
is
acknowledged by the parties to total $580,986.97 (the “Cash Obligation”) and
which together with the 80,000 shares is the total obligation to ▇▇▇▇▇▇ (the
“Obligation”).
B. Disputes
have arisen amongst the
Parties related to payments due pursuant to the Obligation.
C. On
August 1, 2007, Plaintiff filed
claims in the Superior Court of California, Orange County, against Defendants
(the “Lawsuit”).
D. In
order to avoid the time and expense
of further litigation, Plaintiff and Defendants wish to settle and resolve,
fully and finally, all differences between them, including but not limited
to
settling and resolving the Lawsuit, as well as any and all matters arising
out
of or related in any way to the Lawsuit, the settlement thereof, the Obligation,
and any other dealings or contacts between Defendants and
Plaintiff.
E. Except
for the Lawsuit as described
above, Plaintiff represents that she has not filed any other claims, charges,
complaints, lawsuits or appeals of any kind, in any court or administrative
body, against either or both of the Defendants.
NOW,
THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Plaintiff and Defendants agree as follows:
1. Terms.
The
Parties agree as follows:
a.
Within five (5) days of the execution of this Agreement, WinSonic will issue
to
Plaintiff 80,000 shares of company stock which shall be deemed to be fully
paid
for and vested as of November 20, 2004. WinSonic agrees promptly to provide
an
opinion letter of
corporate
counsel and execute such other and further documents as may be necessary on
the
part of WinSonic to remove any restrictions and cause such shares to be free
trading.
b.
Concurrently with, and in addition to the 80,000 shares which are to be free
trading, WinSonic will issue 1,996,521 shares of restricted stock, the number
of
which shares shall have been calculated by dividing the Cash Obligation by
the
average trading price of the shares for the ten trading days immediately
preceding the effective date of this Agreement (the “Share Price”) calculated to
be $0.485, and then applying a 40% discount to the Share Price.
c.
Simultaneous with the execution of this Agreement, the Parties shall enter
into
the Repurchase Rights Agreement attached hereto as Exhibit 1.
2. Dismissal
with Prejudice by
Plaintiff
Within
seven (7) days of Plaintiff’s
receipt of the Shares pursuant to paragraph 1 above and a fully executed copy
of
this Agreement, Plaintiff agrees to dismiss, with prejudice, the Lawsuit and
any
other pending claims, charges or complaints against
Defendants. Plaintiff agrees to have her counsel execute and deliver
for filing such dismissal of the Lawsuit to ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇ of Paul, Hastings,
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇.
3. Mutual
General
Releases.
a. Plaintiff’s
Release: As a
material inducement to Defendants to enter into this Agreement, Plaintiff and
her successors, assigns, agents, employees, representatives, attorneys and
accountants, irrevocably and unconditionally release, acquit and forever
discharge Defendants, and each of them, as well as each of Defendants’
successors, assigns, agents, employees, representatives, attorneys and
accountants (hereafter collectively, “Defendants and their Releasees”), and the
corporate defendants named in the Lawsuit from any and all charges, claims,
liabilities, obligations, promises, agreements, damages, actions, causes of
action, suits, demands, costs, losses, debts and expenses (including attorneys’
fees and costs actually incurred) of any nature whatsoever, known or unknown,
suspected or unsuspected (collectively, “Claims”), including, but not limited
to, all Claims arising from or relating to (a) Lawsuit; (b) Defendants’
dealings with or contacts with Plaintiff and her heirs, assigns, agents,
employees, representatives, attorneys and accountants; and (c) any matters
which
are or could have been asserted by Plaintiff and her heirs, assigns, agents,
employees, representatives, attorneys and accountants in the
Lawsuit. Nothing contained in this paragraph or anywhere in this
Agreement, however, shall be deemed to release Defendants, or either of them,
from any breach of this Agreement, default under the Agreement, or any material
misrepresentation or omission made in this Agreement.
b. Defendants’
Release: As
a
material inducement to Plaintiff to enter into this Agreement, Defendants and
their respective successors, assigns, agents, employees, representatives,
attorneys and accountants, irrevocably and unconditionally release, acquit
and
forever discharge Plaintiff, as well as each of Plaintiff’s agents, attorneys
and
2
accountants
(hereafter collectively, “Plaintiff and her Releasees”), from any and all
charges, claims, liabilities, obligations, promises, agreements, damages,
actions, causes of action, suits, demands, costs, losses, debts and expenses
(including attorneys’ fees and costs actually incurred) of any nature
whatsoever, known or unknown, suspected or unsuspected (collectively, “Claims”),
including, but not limited to, all Claims arising from or relating to any
matters which are or could have been asserted by Defendants and their respective
successors, assigns, agents, employees, representatives, attorneys and
accountants, arising out of or related to (a) the Lawsuit; (b) Plaintiff’s
dealings with or contacts with Defendants and their respective successors,
assigns, agents, employees, representatives, attorneys and accountants; and
(c)
any matters which are or could have been asserted by Defendants and their
respective successors, assigns, agents, employees, representatives, attorneys
and accountants in the Lawsuit. Nothing contained herein, however,
shall be deemed to release Plaintiff from any breach of this Agreement or any
material misrepresentation or omission in this Agreement.
4.
Unknown
Claims.
Plaintiff
and Defendants each acknowledge and agree that, as a condition of this
Agreement, they expressly release all claims that they know about as well as
those they may not know about. Plaintiff and Defendants expressly
waive all rights under Section 1542 of the Civil Code of the State of
California, which provides as follows:
A
general
release does not extend to claims which the creditor does not know or suspect
to
exist in his favor at the time of executing the release, which if known by
him
must have materially affected his settlement with the debtor.
Notwithstanding
the provisions of Section 1542, and for the purpose of implementing a full
and
complete release and discharge of Defendants and their Releasees, Plaintiff
expressly acknowledges that this Agreement is intended to include, and does
include, in its effect, without limitation, all claims which Plaintiff and
her
heirs, assigns, agents, employees, representatives, attorneys and accountants
do
not know or suspect to exist in their favor against Defendants and their
Releasees at the time Plaintiff executes this Agreement; and that this
settlement expressly contemplates the extinguishment of all such
claims.
Notwithstanding
the provisions of Section 1542, and for the purpose of implementing a full
and
complete release and discharge of Plaintiff and her Releasees, Defendants,
and
each of them, expressly acknowledge that this Agreement is intended to include
and does include in its effect, without limitation, all Claims which Defendants
and their successors, assigns, agents, employees, representatives, attorneys
and
accountants do not know or suspect to exist in their favor against Plaintiff
and
her Releasees at the time they each execute
3
this
Agreement; and that this settlement expressly contemplates the extinguishment
of
all such claims.
5.
Non-Admission of
Liability or Wrongdoing.
The
execution of this Agreement will not constitute, nor should it be construed
as,
an admission by any Party hereto that such Party has engaged in any wrongful
conduct toward the other Party or any other person. The Parties
specifically deny any liability to or any wrongful conduct against the other
Party, or any other person, on the part of themselves or their attorneys,
employees, or agents.
6.
No
Representations.
The
Parties represent and agree that no promises, statements or inducements have
been made to them which caused them to execute this Agreement, other than those
expressly stated in this Agreement.
7.
Adequate Time to Review Agreement and Consult with Counsel.
The
Parties each acknowledge that (a) she, he or it has been given a reasonable
period of time to review and consider this Agreement; (b) she, he or it has
been
encouraged to consult with an attorney of his/her or its choice concerning
his/her or its rights and this Agreement, (c) she, he or it has thoroughly
discussed all aspects of this Agreement and his/her or its rights with his/her
or its own attorneys to the full extent she, he or it wanted to do so, (d)
she, he or it understands he/she or it is waiving legal rights and
claims by executing this Agreement, (e) she, he or it has carefully read and
fully understands this Agreement, and (f) she, he or it is voluntarily executing
this Agreement.
8.
Ownership of
Claims.
The
Parties each represent and agree that he/she or it has not assigned or
transferred, or attempted to have assigned or transferred, to any person or
entity, any of the Claims that are being released in this
Agreement.
9.
Successors.
This
Agreement shall be binding upon the Parties, and upon their respective
successors, administrators, representatives, executors, successors and
assigns.
10.
Governing Law and
Venue.
This
Agreement is made and entered into in the State of California and shall in
all
respects be interpreted, enforced and governed under the laws of the State
of
California Any legal action relating to this Agreement or between the
parties hereto shall be in Los Angeles County, California.
4
11.
Further Necessary Actions.
The
Parties each agree, without further consideration, to sign or cause to be
signed, and to deliver to the other’s respective counsel any other documents,
and to take any other action, as may be necessary to fulfill their respective
obligations under this Agreement.
12.
Severability.
Should
any of the provisions in this Agreement be declared or be determined to be
illegal or invalid, all remaining parts, terms or provisions shall be valid,
and
the illegal or invalid part, term or provision shall be deemed not to be a
part
of this Agreement.
13.
Proper
Construction.
The
language of all parts of this Agreement shall in all cases be construed as
a
whole according to its fair meaning, and not strictly for or against any of
the
Parties.
As
used
in this Agreement, the term “or” shall be deemed to include the term “and/or”
and the singular or plural number shall be deemed to include the other whenever
the context so indicates or requires.
The
paragraph headings used in this Agreement are intended solely for convenience
of
reference and shall not in any manner amplify, limit, modify or otherwise be
used in the interpretation of any of the provisions hereof.
14.
Final and Binding
Agreement.
The
Parties understand that this Agreement is final and binding when executed by
each of them, and the Parties each agree not to thereafter challenge its
enforceability.
15.
The Parties Are
Responsible for their Own Attorneys’ Fees and Costs.
The
Parties and their attorneys acknowledge and agree that the Parties are solely
responsible for paying their attorneys’ fees and costs, if any, that they have
incurred with respect to preparing and executing this Agreement.
16.
Consequences of
Violating Promises Made in this Agreement.
a. If
Plaintiff pursues any legal action
against the Defendants and their Releasees, or any of them, with respect to
any
claim released by this Agreement; or if Plaintiff breaches any other promises
made in this Agreement; or if Plaintiff has made any representation in this
Agreement that was false when made, or for which there was no reasonable basis,
then, in addition to any other remedies or relief that may be available to
Defendants, then Plaintiff agrees to pay the reasonable attorneys’ fees, costs
and any other damages that Defendants and their Releasees, or any of them,
may
incur in responding to Plaintiff’s actions.
5
b. If
Defendants, or either of them,
pursue any legal action against the Plaintiff and her Releasees, or any of
them,
with respect to any claim released by this Agreement; or if Defendants, or
either of them, breach any other promises made in this Agreement; or if
Defendants, or either of them, has made any representation in this Agreement
that was false when made, or for which there was no reasonable basis, then,
in
addition to any other remedies or relief that may be available to Plaintiff,
then Defendants, and each of them, agree to pay the reasonable attorneys’ fees,
costs and any other damages that Plaintiff and her Releasees, or any of them,
may incur in responding to Defendants’ actions.
17.
Entire
Agreement.
This,
together with Exhibit 1 attached hereto, is the entire agreement between
Plaintiff and Defendants. It includes all of the terms, promises,
representations and understandings made by Plaintiff and Defendants, and it
fully supersedes any earlier written, oral or implied understandings or
agreements between the Parties pertaining to its subject matter.
18.
Execution in
Counterparts.
The
Parties to this Agreement agree that this Agreement may be executed in
counterparts, each one of which will be either an original or a facsimile
signature, and the sum of each counterpart will constitute a single
agreement. The Parties hereto further agree that a facsimile
signature on a copy of this Agreement sent by facsimile shall be accepted as
binding on the Parties signing by facsimile copy. The Parties also
agree, however, that they shall execute three original copies of this Agreement
and provide an executed original copy to each of the Parties.
19.
Notice
Email
notice contemplated by this
agreement shall be made as follows: ▇▇▇▇▇▇▇/WinSonic: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇;
▇▇▇▇▇▇/Miles: ▇▇▇▇▇▇▇@▇▇▇.▇▇▇.
Facsimile
notice shall be made as
follows: ▇▇▇▇▇▇▇/WinSonic: (▇▇▇) ▇▇▇-▇▇▇▇; ▇▇▇▇▇▇/Miles: (▇▇▇)
▇▇▇-▇▇▇▇. Any mailed notice shall be made as follows:
To
▇▇▇▇▇▇▇/WinSonic: ▇▇▇▇▇▇▇
▇ ▇▇▇▇▇▇▇, c/o Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇.▇., ▇▇▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
To
▇▇▇▇▇▇/Miles: ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ c/o ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇,
▇▇ ▇▇▇▇▇.
[Signatures
on Next Page]
6
PLEASE
READ CAREFULLY BEFORE SIGNING. THIS SETTLEMENT AGREEMENT AND GENERAL RELEASE
INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.
Executed
at Santa ▇▇▇, on this 17th day of January, 2008
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
/s/
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
Executed
at Atlanta, GA, on this 18th day of January, ▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
/s/
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Executed
at Atlanta, GA, on this 18th day of January, 2008
WinSonic
Digital Media Group, Ltd.
By:
/s/
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Title:
Chairman of the
Board
and CEO
Name:
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
APPROVED
AS TO FORM AND
CONTENT:
| /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ |
| ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇ | ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq. |
| Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP | Attorney for Plaintiff |
| Attorney for Defendants |
7