|
================================================================================
SETTLEMENT AND RELEASE
THIS SETTLEMENT AND RELEASE (this "Agreement") is made and
entered into
as of the 15th day of May, 2007, by and among Diverse Talent
Group, Inc., a
California corporation ("DTG"), Christopher Nassif, an
individual ("Nassif" and,
together with DTG, "DT"), CirTran Corporation, a Nevada
corporation ("CTC") and
Diverse Media Group Corp., a Utah corporation and wholly-owned
subsidiary of CTC
("DMG" and, together with CTC, "CirTran"). DTG, Nassif, CTC and
DMG may be
individually referred to herein as a "Party" and collectively as
the "Parties."
R E C I T A L S
WHEREAS, DT and DMG are parties to that certain Assignment
and
Exclusive Services Agreement effective April 1, 2006 (the
"Original Assignment
Agreement") , DMG and Nassif are parties to that certain
Employment Agreement
dated May ___, 2006 (the "Employment Agreement"), DT and DMG are
parties to that
certain Loan Agreement dated as of May 24, 2006 (the "Loan
Agreement") and
related Promissory Note dated May 24, 2006 in the principal
amount of $200,000
from DTG to DMG (the "Note"), Nassif has executed that certain
Fraudulent
Transaction Guarantee dated as of May 24, 2006 (the "Fraudulent
Transfer
Guarantee"), DMG and DTG are parties to that certain Security
Agreement dated as
of May 24, 2006 (the "Security Agreement"), and related
assignments and
guaranties (the "Related Documents" and, together with the
Original Assignment
Agreement, the Employment Agreement, the Note, the Fraudulent
Transfer Guarantee
and the Security Agreement, the "Original Agreements");
WHEREAS, disputes have arisen between the Parties regarding
the
Original Agreements; and
WHEREAS, the Parties desire to resolve their existing disputes
by
entering into this Agreement.
NOW, THEREFORE, in consideration of the premises, covenants
and
agreements made herein, and for other good and valuable
consideration, the
sufficiency of which is hereby acknowledged, the Parties agree
as follows:
1. Rescission. DT hereby withdraws its purported rescission of
the
Original Agreements pursuant to its counsel's letter dated March
12, 2007.
2. Termination of Original Agreements. The Parties hereby
terminate
as of March 31, 2007 (the "Effective Date"): (i) each Original
Agreement, and
(ii) any other agreements between the Parties relating to or
arising from such
agreements.
3. Assignment of Talent Contracts. Upon full execution of
this
Agreement and the issuance of the ShellCo Shares (as defined
below), CirTran
assigns to DTG as of the Effective Date all Talent Contracts (as
defined in the
Original Assignment Agreement) assigned to DMG under the
Original Assignment
1
<PAGE>
Agreement. CirTran represents that it has not previously
assigned the Talent
Contracts or any interest therein to any third party and none of
the Talent
Contracts is subject to any lien, pledge, mortgage, claim,
option, security
interest, claim, charge, easement, limitation, commitment,
encroachment,
restriction or other encumbrance of any kind or nature
whatsoever (whether
absolute or contingent). The assignment of the Talent Contracts
is otherwise
without representation, warranty, guaranty or recourse of any
kind.
4. Surrender of Name; Assignment of Web Site.
a. CirTran hereby surrenders the right to use the name
"Diverse
Media Group" as a business name and agrees to file within three
(3) business
days of the date hereof, the necessary documents to change the
name of DMG to a
name not containing the word "Diverse". CirTran will immediately
and permanently
discontinue the use of the name "Diverse Media Group" and
"Diverse Media Group
Corp." or any similar name containing the word "Diverse." The
surrender of the
name will not preclude DMG from notifying vendors, customers and
other persons
of its change of name as reasonably necessary and with a valid
DMG business
purpose and to identify itself in legal documents, to the extent
legally
required, as "formerly known as Diverse Media Group Corp." or
words to that
effect.
b. CirTran hereby assigns to ShellCo any and all of the
CirTran's
rights, title and interest, in and to the domain name of
www.diversemediagroup.com (the "Domain Name"), free of all
pledges, liens,
encumbrances, charges or security interests, attachments or any
third party
rights. Within three (3) business day of execution of this
Agreement and
issuance of the ShellCo Shares, CirTran will deliver to ShellCo
assignment forms
in the form specified by the domain name registrar for the
Domain Name and
reasonably acceptable to ShellCo; provided that it shall be
ShellCo's
responsibility to provide its technical contact, administrative
contact, domain
server(s) and any other information required by the domain name
registrar.
CirTran may continue to use the content currently hosted at the
Domain Name at
another domain name owned or controlled by CirTran; provided
that (i) DMG's new
business name will be substituted for "Diverse Media Group
Corp." as provided in
Section 4(a), and (ii) all references to DTG or DMG's Talent
Division will be
removed.
5. Waiver of DTG Name Change, Talent Representation and
Operation of
Business. CirTran hereby acknowledges and agrees that
notwithstanding anything
to the contrary in any Original Agreement, including, without
limitation Section
7(d) of the Original Assignment Agreement, DTG (a) shall not be
required to
change its corporate or business name; (b) may represent talent
which was under
contract with DMG at any time prior to or as of the Effective
Date; and (c) may
operate, directly or through an affiliate, a talent agency
located within Los
Angeles County. Notwithstanding anything to the contrary herein
or as otherwise
provided in the Original Agreements, DT shall not be restricted
in the operation
of its business(es) as currently conducted or otherwise by any
of the Parties
hereto or any provision of the Original Agreements.
6. UCC Termination Statements. Within three (3) business day
of
execution of this Agreement and issuance of the ShellCo Shares,
CirTran will
file UCC-3 termination statements with respect to any financing
statements filed
by it in connection with the Original Agreements with respect to
DT and any of
its affiliates. CirTran will promptly provide DT with copies of
such termination
statements and evidence of filing with and acceptance by the
appropriate
2
<PAGE>
jurisdiction(s). If CirTran fails to file the termination
statements within the
time period prescribed in this Section 6, DT is hereby
authorized to file the
UCC-3 termination statements on CirTran's behalf. Each Security
Document (as
defined in the Loan Agreement) is hereby terminated and CirTran
hereby releases,
assigns, transfers and delivers to DT all of the Collateral (as
defined in the
relevant Security Document). CirTran hereby acknowledges that
the security
interests and liens granted under each Security Document and
otherwise in
connection with the Loan Agreement and all related documents
have terminated and
have been released, and CirTran agrees to execute and deliver to
DT, such
documents as DT shall reasonably request to evidence the
termination of the
security interests and release of the Collateral pursuant to
this Section 6.
7. Return of Note. Within one (1) business day of the date
hereof,
CirTran shall return to DTG the executed original of the Note
marked "CANCELLED"
and shall take all other actions reasonably necessary to
terminate the Note.
8. Issuance of ShellCo Shares. In consideration of CirTran
entering
into this Agreement and subject to Section 9 below, DTG will
cause Diverse Media
Group, Inc., a Delaware corporation and affiliate of DT
("ShellCo"), to issue
9,000,000 shares of ShellCo common stock (the "Shares") to
Wilson-Davis & Co.,
Inc. ("Escrow Agent") for the benefit of DMG pursuant to the
Escrow Agreement
(the "Escrow Agreement") attached hereto as Exhibit A. DT will
cause ShellCo to
enter into the Escrow Agreement and the Investor Rights
Agreement (the "Investor
Rights Agreement"), attached hereto as Exhibit B, simultaneously
with the
execution of this Agreement. Pursuant to the Escrow Agreement,
the Shares will
be held in escrow pending the registration, sale or return of
the Shares by DMG.
It is a condition precedent to the issuance of the Shares by
ShellCo that each
party to the Investor Rights Agreement and each party to the
Escrow Agreement,
other than ShellCo in each such case, shall have executed and
delivered to
ShellCo the Investor Rights Agreement and the Escrow Agreement,
as applicable.
9. Return of ShellCo Shares. If DMG has sold ShellCo Shares
for
proceeds equal to an aggregate of $2,000,000, less transaction
fees, any
remaining ShellCo Shares received pursuant this Agreement by DMG
shall be
returned to and retired by ShellCo for no additional
consideration, all as set
forth in the Investor Rights Agreement.
10. Representations and Warranties.
a. The Parties represent and warrant to each other that, in
deciding to enter into this Agreement, they each: (i) made their
own
investigation and evaluation; (ii) had all of the information
they needed; (iii)
did not rely on any statements, acts or omissions except as
expressly set forth
in this Agreement; (iv) were not acting under any duress,
compulsion or undue
influence; (v) have had advice of counsel of their own choosing
in negotiations
for and the preparation of this Agreement; and (vi) have read
the provisions of
this Agreement and are fully aware of its contents and legal
effect.
b. DT represents and warrants that, as of the date hereof,
ShellCo
has approximately 103,000,000 shares outstanding and that the
Original
3
<PAGE>
Agreements and other rights being transferred to DT pursuant to
this Agreement
will be owned, directly or indirectly, by ShellCo.
c. The Parties, and each of them, represent and warrant to
the
other that they have the authority to enter into this
Agreement.
d. Each Party represents and warrants that this Agreement
constitutes a legal, valid, and binding obligation of each of
them, enforceable
in accordance with its terms.
e. Each Party represents and warrants that it has not
transferred
or assigned or purported to transfer or assign any of the
claims, causes of
action, demands, costs, obligations, damages, or liabilities
being released
under this Agreement, and each Party agrees to indemnify the
other from and
against any claim based upon, connected with, or arising out of
any such
assignment or transfer or purported assignment or transfer.
11. Disclosure and Press Releases. The Parties shall promptly
issue a
joint press release upon execution of this Agreement accurately
describing the
terms of this Agreement in substantially the form attached
hereto as Exhibit C.
12. Mutual Release and Waiver.
a. Each Party, in consideration of the covenants and agreements
of
the other Parties contained herein, does hereby knowingly and
voluntarily
release and forever discharge and hold harmless each of the
other Parties, and
any of its subsidiaries, affiliates, suppliers, predecessors,
successors, or
assigns, and the respective agents, trustees, beneficiaries,
officers,
directors, shareholders, attorneys, employees, independent
contractors,
partners, members, managers and representatives of any of the
foregoing
(collectively, the "Released Parties"), of and from any and all
claims, demands,
damages, action and causes of action or suits at law or equity
of whatsoever
kind or nature, whether fixed or contingent, presently know or
unknown,
suspected or unsuspected that such Party has ever had, now has
or in the future
may have against another Party arising from, or based upon, any
of the Original
Agreements, including, but without limitation, any loss,
liability, expense
and/or detriment, of any kind or character, in any way arising
out of, connected
with, or resulting from the acts or omissions of the Released
Parties or any of
them, any breach of contract, any breach of fiduciary duty,
breach of an
| 
