CONFIDENTIAL
SETTLEMENT AND GENERAL RELEASE AGREEMENT

This Settlement and General Release Agreement ("AGREEMENT") is entered into by
and between CLIFFORD L. STRAND ("STRAND"), SECURED DIVERSIFIED INVESTMENT, LTD.
("SDP') and JAN WALLACE ("WALLACE") referred to jointly as the "PARTIES" as of
the date this AGREEMENT is signed, with reference to the following terms:

RECITALS

A.  On or about January 13, 2006, Alliance Title Company filed an lnterpleader
lawsuit Case Number 06CC02129 in the Orange County Superior Court, Department
C11 against STRAND, WILLIAM S. BIDDLE ("BIDDLE"), GERNOT TROLF ("TROLF"),
NATIONWIDE COMMERICAL BROKERS ("NATIONWIDE"), SDI and others and as result,
deposited with the Court the funds in the amount of $267,000.00.

On or about January 20, 2006, STRAND, BIDDLE, TROLF and NATIONWIDE filed a
separate lawsuit Case Number 06CC02350 in the Orange County Superior Court,
Department C11 against SDI and one of its officers WALLACE along with others for
Fraud and Misrepresentation, Negligent Misrepresentation, Breach of Contract,
Breach of the Covenant of Good Faith and Fair Dealing, Conversion, Commons
Counts, Money had and received and Declaratory Relief. On or about March 15,
2006 SDI filed a cross-complaint against the Plaintiffs along with others for
Breach of Contract, Breach of Fiduciary Duty, Negligent Supervision, Civil
Conspiracy, Intentional Interference with Economic Relations; Negligent
Interference with Economic Relations; Breach of Oral Agreement, Breach of
Employment Contract; Breach of Directors/Officers' Fiduciary Duty; Fraud and
Intentional Misrepresentation and Declaratory Relief.

B.  On or about March 10, 2006, STRAND BIDDLE, TROLF along with another
shareholder, filed a lawsuit against SDI for declaratory relief under
Corporation Code Section 2115, Case Number 06CC03959, filed in the Orange County
Superior Court, Department C11. Both litigations shall be referred to as the
"ACTIONS".

C.  STRAND filed a complaint with the Securities and Exchange Commission of the
United States of America ("SEC") in regard to his objections to the June 2, 2006
SDI shareholder meeting which he has not taken nor does he intend to any further
action on.

D.  On or about September 19, 2006 DIDDLE, TROLF and NATIONWIDE entered into a
settlement agreement with SDI and WALLACE which is incorporated herein by
reference. In addition BIDDLE, TROLF and NATIONWIDE dismissed, with prejudice,
their claims in the ACTIONS against SDI and WALLACE. SDI and WALLACE dismissed,
with prejudice, their claims in the ACTIONS against BIDDLE, TROLF and
NATIONWIDE.

E.  The parties expressly acknowledge that they have no personal

 

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knowledge of any liability, fraud or wrongdoing on the part of any other party,
its agents, officers, directors, stockholders, employees, successors, assigns,
insurers and attorneys with respect to any claims in the ACTIONS, or with
respect to any other matters relating to it. No provision hereof or of any
related document shall be construed as an admission or concession of liability
or fraud or of any wrongdoing or of any preexisting liability. However, in order
to fully and forever resolve these matters, and with the understanding that this
AGREEMENT does not constitute an admission by any party of any wrongdoing or of
any lack of merit relating to any claims referred to herein, STRAND, SDI, and
WALLACE enter into this AGREEMENT.

AGREEMENT

1.  In consideration for the promises set forth herein, the PARTIES agree as
follows:

a.  
The PARTIES agree that (1) upon execution by STRAND and his attorney of this
AGREEMENT, (2) upon execution of a stipulation and order of disbursement and
requests for dismissal with prejudice in the above ACTIONS attached hereto as
Exhibit A and incorporated herein by reference, and (3) upon execution by STRAND
Irrevocable Proxy attached hereto as Exhibit B and incorporated herein by
reference, The PARTIES shall file with the Orange County Superior Court a
stipulation and order of disbursement as follows and for the benefit of: $80,000
to STRAND and the remainder to SDI; in addition the PARTIES shall also file the
requests for dismissal. The payments shall be in one lump sum with no payroll or
other taxes deducted.

b.  
SDI makes no representations or warranties regarding the tax effect of the
settlement proceeds as directed by this AGREEMENT. Further, STRAND agrees to
defend and/or indemnify SDI with respect to any liability created by STRAND'S
payment or non-payment of taxes with respect to the settlement sum.

2.  STRAND, as the first party, and SDI and WALLACE as a second party, on their
own behalf and on behalf of their respective dependents, successors, heirs,
executors, administrators and assigns, and each of them, hereby fully and
forever releases and discharges each other, and any parent companies, any
subsidiaries, any predecessors in interest, any successors in interest, any
companies associated as a result of an asset purchase or any affiliated
companies or organizations, as well as their agents, officers, directors,
stockholders, employees, successors, assigns, insurers and attorneys, and each
of them, of and from any and all claims, rights, actions, causes of action,
obligations, debts, interest, damages, charges, losses, debts, penalties,
forfeitures, liabilities, costs, attorneys' fees, and demands of any nature,
whether in law or in equity, arising out of or relating to any acts or omissions
that took place prior to the date of this AGREEMENT, including without
limitation, any matters relating in any way to the ACTIONS and/or any matters
relating to or contained in or which could have been contained in the ACTIONS
and/or any claims under other Federal or State statute, law or regulation.

3.  It is the intention of the PARTIES hereto that this AGREEMENT shall be
effective as a full and final accord and satisfaction and release of each and
every released matter, including all unknown and/or unsuspected claims.
Accordingly, the

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PARTIES hereby waive and relinquish any and all rights or benefits that any
party may have under the provisions of Section 1542 of the California Civil
Code, which reads as follows:

"A general release does not extend to claims which the creditor does not know or
suspect to exist in its favor
at the time of executing the release, which if known by him must have materially
affected his settlement with the debtor."

In connection with this waiver, each party hereto acknowledges that facts in
addition to or different from those presently known may later be discovered
which relate to the subject matter of this AGREEMENT. The PARTIES also recognize
the possibility that, in the future, damages that are not currently known may be
suffered in relation to matters released in this AGREEMENT. Notwithstanding
these possibilities, it is each party's intention to fully, finally and forever
settle and release all released matters, disputes and differences, whether known
or unknown, suspected or unsuspected, that have existed; now exist, or may
exist. It is the intention of the PARTIES hereto that this AGREEMENT shall be
effective as a full and final accord and satisfaction and release of each and
every released matter, including all unknown and/or unsuspected claims. In
connection with this waiver, each party hereto acknowledges that facts in
addition to or different from those presently known may later be discovered
which relate to the subject matter of this AGREEMENT. The PARTIES also recognize
the possibility that, in the future, damages that are not currently known may be
suffered in relation to matters released in this AGREEMENT. Notwithstanding
these possibilities, it is each party's intention to fully, finally and forever
settle and release all released matters, disputes and differences, whether known
or unknown, suspected or unsuspected, that have existed; now exist, or may
exist. Nothing in this AGREEMENT constitutes, or should or shall be deemed to
constitute, any admission of any act, fact or liability, with respect to any
matters released herein.

4. STRAND represents that he does not desire reemployment by SDI as an officer
or reelection as a director and hereby expressly waives any and all rights which
he may have had to such reemployment or to reinstatement with SDI. Further,
STRAND agrees and promises that he will not at any time seek employment or
reemployment with SDI and/or any other party or entity released herein as an
officer or reelection as a director.

5. The contents and the existence of this AGREEMENT, and the PARTIES'
discussions pertaining to it, are and shall remain forever confidential, and
neither party will communicate or allow communication in any manner (written,
oral or otherwise) to anyone with respect thereto, except that this AGREEMENT
may be disclosed as required to the PARTIES' attorneys, insurers, accountants
and/or governmental authorities, or otherwise may be disclosed as compelled by
law. If any party beaches any clause of the AGREEMENT other party may seek all
rights and remedies under the law including but not limited to attorney's fees
and costs.

6. The PARTIES hereto, and each of them, shall forever refrain and forbear from
commencing, instituting, or prosecuting any lawsuit, action or other proceedings
against any of the other PARTIES related to the claims released herein. Such
forbearance from commencing, instituting or prosecuting any lawsuit, action or
other proceeding by one such party against the other shall include not only such
other parties,

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but their officers, directors, representatives, assigns, agents, attorneys,
heirs, employees, partners and personal representatives as well, and such
forbearance shall apply to any cause relating to, based upon or arising out of
any and all claims, debts, liabilities, demands, obligations, costs, expenses,
actions or causes of action, released and discharged hereunder, except those
necessary to enforce the terms of this agreement.

7. Each party agrees to bear its/her own costs, expenses and attorneys'
fees incurred in connection with the ACTIONS and this AGREEMENT.

8. Each party hereto expressly warrants and represents that they are fully
authorized to enter into this AGREEMENT and each of its terms, and that they
have not assigned to any other party or person any claims released herein.

9. With the exception of the claims listed in the RECITALS above STRAND warrants
that he has not filed any other lawsuits, charges, complaints, petitions, or
other accusatory pleading against SDI and/or WALLACE with any governmental
agency or in any court, on behalf of himself or any other entity he represents,
based upon, arising out of or related in any way to any events occurring prior
to the execution of this Agreement, including, without limiting the generality
of the foregoing ACTIONS. STRAND further agrees that he will not hereafter file,
cause to be filed, or otherwise voluntarily participate in the filing,
investigation, and/or prosecution of any other charges, complaints, petitions or
accusatory pleading brought by any other party in any court currently pending or
not or with any governmental agency in which WALLACE and/or SDI, its officers,
directors, shareholders, agents, attorneys or any parent companies, any
subsidiaries, any predecessors in interest, any successors in interest, any
companies associated as a result of an asset purchase or any affiliated
companies or organizations is named as a party.

With the exception of the claims listed in the RECITALS above WALLACE and/or SDI
warrant that they have not filed any other lawsuits, charges, complaints,
petitions, or other accusatory pleading against STRAND with any governmental
agency or in any court, on behalf of themselves or any other entity they
represent, based upon, arising out of or related in any way to any events
occurring prior to the execution of this Agreement, including, without limiting
the generality of the foregoing ACTIONS. WALLACE and/or SDI further agrees that
they will not hereafter the, cause to be filed, or otherwise voluntarily
participate in the filing, investigation, and/or prosecution of' any other
charges, complaints, petitions or accusatory pleading brought by any other party
in any court currently pending or not or with any governmental agency in which
STRAND is named as a party.

10. This AGREEMENT contains the entire agreement between the PARTIES hereto with
respect to all matters addressed herein, and fully supersedes any and all prior
or contemporaneous agreements, understandings or representations, oral or
written, implied or express, pertaining to the subject matter hereof. All prior
and contemporaneous discussions and negotiations have been and are merged and
integrated into, and are superseded by this Agreement. This AGREEMENT may only
be subsequently modified by a writing signed by all PARTIES hereto.

11. Each party agrees to do all things necessary to carry out and

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effectuate the terms of this AGREEMENT, and expressly promises not to do or fail
to do anything, directly or indirectly, which will interfere with any other
party's realization of the benefits hereof.

12. This AGREEMENT, including the releases herein, shall be binding upon and
inure to the benefit of each of the PARTIES to this AGREEMENT and to each of
their successors in interest, including heirs and assigns.

13. Each of the PARTIES hereto has been represented by counsel in the
negotiating and drafting of this AGREEMENT. Accordingly, the rules of
construction of contracts relating to resolution of ambiguities against the
drafting PARTIES shall be inapplicable to this AGREEMENT.

14. Any construction, interpretation and performance of this AGREEMENT shall be
governed by the laws of the State of California, both substantive and
procedural. Both PARTIES accede to the jurisdiction of the Orange County
Superior Court for any actions to enforce, or for breach of, any term of this
AGREEMENT.

15. If for any reason any provision contained in this AGREEMENT is later deemed
unenforceable, the remainder of this AGREEMENT shall nonetheless remain binding
and enforceable on all PARTIES hereto.

16. In the event of any action brought to enforce any provision of this
AGREEMENT, or for breach of any provision of this AGREEMENT, the prevailing
party therein shall be entitled to an award of their costs and reasonable
attorneys' fees incurred therein, in addition to any other relief.

17. This AGREEMENT may be executed in multiple originals or counterparts, each
of which shall be deemed an original or the equivalent thereof.

WHEREFORE, each party hereto, by the signatures below, certifies that this
AGREEMENT has been read in its entirety, that any questions regarding the
meaning or effect of any terms have been answered to their satisfaction, that
each party enters into this AGREEMENT with the intent to be fully and forever
bound by all of its terms, as of the date set forth opposite their signature
below.

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Dated: January 5, 2007
/s/ Clifford Strand
 
Clifford Strand
   
APPROVED AS TO FORM AND CONTENT:
LAW OFFICES OF ROBERT COVIELLO
 
/s/ Robert Coviello
ROBERT COVIELLO
ATTORNEY FOR CLIFFORD STRAND
 
 
 
Dated: January 5, 2007
 
 
By: /s/ Jan Wallace
 
JAN WALLACE
CEO
SECURED DIVERSIFIED INVESTMENT,
LTD.
   
Dated: January 5, 2007
 
 
APPROVED AS TO FORM AND CONTENTS:
/s/ Jan Wallace
JAN WALLACE
 
 
 
By: /s/ Claire C. Ambrosio
CLAIR C. AMBROSIO
ATTORNEY FOR SECURED
DIVERSIFIED INVESTMENT, LTD.
 

 
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EXHIBIT A

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EXHIBIT B
 
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