SETTLEMENT
      AND MUTUAL RELEASE AGREEMENT

    


    THIS
      SETTLEMENT AND MUTUAL RELEASE AGREEMENT ("Agreement") is made and entered into
      effective January 16, 2006, by and among AGU Entertainment Corp, a Delaware
      corporation, and each of its subsidiaries, located at 1451 West Cypress Creek
      Road, Fort Lauderdale, FL 33309 (collectively "AGU") and Ned Siegel, Neil Strum,
      and Strum Brothers Investment, LLC ("SBI") (collectively "Siegel
      Group"),
      collectively
      referred to herein as the "Parties."

    


    WHEREAS,
      on
      March
      3, 2004, a subsidiary of AGU, assumed all
      of
      the covenants and obligations of Pyramid Media Group, Inc., a non-affiliated
      company, relating to a Distribution Agreement, dated May 1, 2003 with Ark 21
      Records L.P., including guaranteeing an obligation to repay $350,000 of notes
      payable to Ned Siegel and Neil Strum (the "Notes"); and 

    


    WHEREAS, litigation
      has been commenced on the Notes, in a matter entitled NED
      SIEGEL, NEIL STRUM, and STRUM BROTHERS INVESTMENT, LLC, v. AGU ENTERTAINMENT
      CORP.,
      Case
      No. 05-13076 (14), pending in the 17th Judicial Circuit In and For Broward
      County, Florida (the
      "Florida Litigation"); and 

    


    WHEREAS,
      certain
      other disputes arose between Neil Strum and AGU regarding the employment of
      Neil
      Strum in litigation entitled NEIL
      STRUM v. AGU ENTERTAINMENT CORP. and DAVID LEVY,
      Case
      No. BC342698, pending in the Superior Court of Los Angeles County (the
      "California Litigation"), and

    


    WHEREAS,
      the
      parties wish to reach an amicable resolution of all disputes and disagreements
      between them upon the terms and conditions hereof;

    


    NOW,
      THEREFORE, in
      consideration of the promises, releases, and obligations of the Parties set
      forth herein, and other good and valuable consideration, the receipt and
      sufficiency of which are hereby acknowledged, the Parties agree as
      follows:

    


    
      	 	
              1.

            	
              Terms
                of Settlement:

            


    

    


    
      	 	
              (a)

            	
              Upon
                the execution of this Settlement, AGU will pay the Siegel Group the
                sum of
                $175,000.00 such payment shall be made to Weiss Handler Angelos &
                Cornwell PA Trust account;

            


    

    


    
      	 	
              (b)

            	
              On
                a date no later than February 15, 2006, AGU shall pay the Siegel
                Group the
                sum of $125,000.00 and such payment shall be made to Weiss Handler
                Angelos
                & Cornwell PA Trust account;

            


    

    


    
      	 	
              (c)

            	
              Within
                ten days from the date of this Agreement, the Siegel Group will dismiss
                with prejudice the Florida Litigation and the California Litigation;
                provided, however the stipulations of dismissal provide that the
                respective courts shall have continuing jurisdiction to enforce the
                terms
                of this Settlement Agreement.

            


    

    


    
      	 	
              (d)

            	
              Simultaneously
                with the execution of this Agreement, David and Donna Levy will execute
                a
                personal guaranty in the amount of $125,000 in favor of the Siegel
                Group;

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              2.

            	
              Release
                of AGU.
                The Siegel Group and their respective heirs, successors, assigns,
                shareholders, directors, officers, employees, agents, and any
                corporations, partnerships or other entities owned or controlled
                by them
                and any parents, subsidiaries, and affiliated companies (collectively,
                “Siegel Group”), hereby release and discharge AGU, its successors or
                assigns, shareholders, directors, officers, employees, agents, and
                any
                corporations, partnerships or other entities owned or controlled
                by it and
                any of its subsidiaries and affiliated companies (collectively, "AGU")
                from any and all claims Siegel Group have or may have against AGU
                arising
                from the California Litigation and the Florida Litigation. The Siegel
                Group specifically acknowledges that this release extinguishes all
                claims
                against AGU, whether past or present, known or unknown, foreseen
                or
                unforeseen, without regard to whether such claims are liquidated
                or
                contingent, accrued or unaccrued, or whether based upon contract,
                equity,
                tort, statutory violation, rule of the court, including claims that
                were
                or could or might have been asserted by the Siegel Group with respect
                to
                the California Litigation and the Florida Litigation. Nothing herein
                shall
                prohibit the Siegel Group from seeking legal remedies with respect
                to
                future defaults arising from failure to perform any obligations under
                this
                Settlement Agreement.

            


    

    


    
      	 	
              3.

            	
              Release
                of the Siegel Group. AGU
                and David Levy hereby releases and discharges the Siegel Group, their
                heirs, successors or assigns, from any and all claims AGU and David
                Levy
                has or may have against Siegel Group arising from the California
                Litigation, including all claims whatsoever from the employment of
                Neil
                Strum by AGU and the Florida Litigation. AGU and David Levy specifically
                acknowledge that this release extinguishes all claims against the
                Siegel
                Group, whether past or present, known or unknown, foreseen or unforeseen,
                without regard to whether such claims are liquidated or contingent,
                accrued or unaccrued, or whether based upon contract, equity, tort,
                statutory violation, rule of the court, including claims that were
                or
                could or might have been asserted by AGU or David Levy with respect
                to the
                California Litigation and the Florida Litigation. Nothing herein
                shall
                prohibit AGU or David Levy from seeking legal remedies with respect
                to
                future defaults arising from failure to perform any obligations under
                this
                Settlement Agreement.

            


    

     

    
      	 	
              4.

            	
              Confidentiality.
                From and after the date of execution of this Settlement Agreement,
                this
                Settlement Agreement shall be kept and maintained confidentially
                among the
                Parties. No Party shall disclose any part or term of this Settlement
                Agreement to any other person or entity, without the prior written
                consent
                of all other parties, except,
                (i) AGU shall be entitled to disclose such facts concerning this
                Settlement Agreement as may be required under applicable laws, rules
                and
                regulations governing the conduct of business by public corporations,
                including, among other laws, the United States Securities Laws; (ii)
                any
                Party shall be entitled to disclose any or all of the terms of this
                Settlement Agreement, if compelled to do so by an order of a court
                of
                competent jurisdiction, or a subpoena issued in connection with a
                judicial
                proceeding, only after a protective order is issued by a court preventing
                further disclosure of the terms of this Settlement Agreement by any
                of the
                parties to any such litigation; (iii) any Party shall be entitled
                to
                disclose any or all of the terms of this Settlement Agreement in
                any
                judicial or arbitral proceeding commenced in order to enforce the
                terms of
                this Settlement Agreement, and (iv) any Party shall be entitled to
                disclose to their legal and accounting professionals as necessary
                and
                appropriate in the ordinary course of
                business.

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              5.

            	
              No
                Admission of Liability.
                By entering into this Agreement, the Parties to this Agreement do
                not
                admit to any liability to the other Party, and each denies liability.
                This
                Agreement does not constitute any admission by either Party of any
                liability on the merits of any claim or defense which has been or
                could
                have been asserted by the other
                Party.

            


    

    


    
      	 	
              6.

            	
              Default:
                In
                the event AGU fails to pay all sums required to be paid hereunder
                within
                five (5) business days of its due date (“Cure Period”), upon the Siegel
                Group faxing a copy of a notice of default to AGU’s attorney at (561)
                417-8101, the Siegel Group shall be entitled to file with the Court
                an
                affidavit indicating such default ("Default Affidavit") and may set
                the
                matter for hearing upon notice. At the hearing, upon a showing by
                the
                Siegel Group of AGU's default after expiration of the Cure Period,
                the
                Court shall enter a Final Judgment in favor of Siegel Group and against
                AGU and the Gurantors in the amount of $125,000.00, less any payments
                made
                hereunder, with execution to issue. In the event either party is
                required
                to initiate court proceedings to enforce this Stipulation for Settlement,
                the prevailing party shall be entitled to reasonable attorneys' fees
                and
                costs associated with the enforcement of this Stipulation for
                Settlement.

            


    

    


    
      	 	
              7.

            	
              Each
                Party to Bear Its Own Costs.
                Each
                Party shall bear its own costs and attorneys' fees relative to the
                settlement of this matter.

            


    

    


    
      	 	
              8.

            	
              Entire
                Agreement. This
                Agreement contains the entire agreement of the Parties on the matters
                covered. Any agreement, statement, or promise made by any Party,
                or by any
                employee, officer, or agent of any Party, as to the matters covered
                in the
                Agreement which is not in writing and signed by both Parties shall
                not be
                binding.

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              9.

            	
              Amendments. This
                Agreement may be amended, or a provision waived, only by an instrument
                in
                writing signed by all of the Parties to this
                Agreement.

            


    

    


    
      	 	
              10.

            	
              Counterparts. This
                Agreement may be executed in one or more counterparts which together
                will
                compromise a binding contract even though all signatures may not
                appear on
                the same document. Facsimile signatures shall be deemed as legally
                binding
                as original signatures for all
                purposes.

            


    

    


    
      	 	
              11.

            	
              Choice
                of Law. This
                Agreement is entered into the State of Florida and shall be construed
                and
                enforced in accordance with the Laws of the State of Florida and
                all
                actions arising hereunder shall be brought in the venue of Palm Beach
                County, Florida, and each party hereto hereby consents to jurisdiction
                in
                Palm Beach County, Florida.

            


    

    


    
      	 	
              12.

            	
              Severability
                of Provisions. Any
                provisions of this Agreement which is prohibited or unenforceable
                in any
                jurisdiction shall, as to such jurisdiction, be ineffective to the
                extent
                of such provision or unenforceability without invalidating the remainder
                provisions of this Agreement.

            


    

    


    In
      Witness Whereof, each party sets his hand and seal on the date first written
      above.

     

    
      	 	 
	AGU
              ENTERTAINMENT CORP.
	 
 	 
 
	By:  	/s/ David
              C.
              Levy
	
              

            	
            
	 David
              C.
              Levy, President	 


    

     

    
      	  
	 
 	 
 
	/s/ David
              C.
              Levy
	
              

            	
            
	 David
              C.
              Levy	 


    

     

     

    
      	 	 
	STRUM
              BROTHERS INVESTMENTS, LLC
	 
 	 
 
	By:  	/s/ Neil
              Strum
	
              

            	
            
	 Neil
              Strum	 


    

     

    
      	
                

            
	
              
 

            	 
 
	/s/ Neil
              Strum
	
              

            	
            
	 Neil
              Strum	 


    

     

    
      	  
	 
 	 
 
	/s/ Ned
              Siegel
	
              

            	
            
	 Ned
              Siegel