Exhibit 10.1

Settlement Agreement

This Settlement Agreement dated September 16, 2011 (the “Agreement”) is, subject
to Court approval, made and entered into by and among Brian Murphy (“Murphy”),
on behalf of himself and derivatively on behalf of ‘mktg, inc.” (the
“Plaintiff”), and Defendants Charles F. Tarzian, Fred Kaseff, Marc C. Particelli
(“Particelli”), James H. Feeney, Herbert M. Gardner, John A. Ward III, UCC-mktg
Investment, LLC (“UCC Investment”), UCC-mktg Partners, LLC, Charles Horsey
(“Horsey”), Patty Hubbard, James Ferguson, Dave Arnold, and Nominal Defendant
‘mktg, inc.’ (“MKTG” or the “Company”) (collectively the “Defendants”) and Union
Capital Corporation (“UCC”) (Plaintiff, Defendants and UCC collectively the
“Parties,” and each a “Party”).

Whereas, on November 25, 2009, the Company entered into a Securities Purchase
Agreement with UCC Investment, an investment vehicle organized by UCC, and
certain of the Company’s directors and officers, providing for a $5 million
financing led by UCC Investment (the “Financing”);

Whereas, on December 15, 2009, the Company closed the Financing and issued $2.5
million in aggregate principal amount of its Senior Secured Notes (“Secured
Notes”), $2.5 million in aggregate stated value of its Series D Convertible
Participating Preferred Stock (“Preferred Stock”) initially convertible into
5,319,149 shares of Common Stock, and Warrants to purchase 2,456,272 shares of
its Common Stock;

Whereas, the Secured Notes issued in the Financing are secured by substantially
all of the Company’s assets, currently bear interest at a rate of 16.5% per
annum payable quarterly, and mature in one installment on December 15, 2012, and
may be prepaid by the Company at any time;
 
 
 

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Whereas, on December 15, 2009, in connection with the closing of the Financing,
the Company entered into a management consulting agreement with UCC (the
“Management Consulting Agreement”), pursuant to which UCC agreed to provide
management advisory services to the Company and the Company agreed to pay to UCC
an annual management fee (“Management Fee”) of $125,000 for such services;

Whereas, the members of the Company’s Board of Directors (the “Board”) as of the
date of this Agreement are Elizabeth Black, Richard L. Feinstein, Gregory J.
Garville (“Garville”), Arthur G. Murray (“Murray”), Horsey and Particelli;

Whereas, the Plaintiff filed an action against the Defendants entitled Brian
Murphy, derivatively on behalf of ‘mktg, inc.’, v. Charles F. Tarzian, Fred
Kaseff, Marc C. Particelli, James H. Feeney, Herbert M. Gardner, John A. Ward
III, UCC-mktg Investment LLC, UCC-mktg Partners, LLC, Charles Horsey, Patty
Hubbard, James Ferguson, and Dave Arnold, Defendants, and ‘mktg, inc.’, Nominal
Defendant, Index No. 650364/2010, in the Supreme Court of the State of New York,
County of New York (the “Action”); and

Whereas, the Plaintiff and Defendants, without admitting any liability one to
the other, have reached an agreement regarding the settlement of all claims
arising out of, in connection with, or relating in any way to the Action,
including without limitation all matters that were or could have been asserted
in the Action, and desire to dismiss the Action with prejudice; and

Whereas, in entering into this Agreement, none of the Parties concede the
sufficiency or validity of any claims, cross claims, or defenses that were or
could be asserted by any of the Parties in the Action.
 
 
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Now Therefore, in consideration of the promises, releases, undertakings, and
covenants set forth herein, the receipt and sufficiency of which is hereby
acknowledged by the Parties, the Parties signatory hereto enter into this
Agreement and agree as follows:

1.           Within two (2) business days of the execution of this Agreement by
all Parties, the interest rate on the Secured Notes shall be reduced from 16.5
percentto 12.5 percent, such reduction to be effective from that point forward.

2.           MKTG covenants to the Plaintiff that within forty-five (45)
calendar days of the Court’s execution and entry of an order approving this
Agreement and dismissing the Action in its entirety, MKTG shall pay in full the
amount due and owing on the Secured Notes, provided that, however, MKTG’s
obligation to pay down the Secured Notes shall be delayed for an additional 45
calendar days, or for such other time period as MKTG and the Plaintiff shall
reasonably and in good faith agree upon (but not beyond the existing maturity
date of the Secured Notes), in the event that due to acts of God, governmental
actions, or unusual volatility in the financial markets, compliance within the
initial 45 day period is not reasonably possible. Nothing contained in this
Section 2 shall be deemed to amend or modify the Secured Notes, it being
understood that this covenant is between MKTG and the Plaintiff, and does not
bind the holders of the Secured Notes.

3.           Within two (2) business days of the Court’s execution and entry of
an order approving this Agreement and dismissing the Action in its entirety, UCC
shall reduce its annual Management Fee under the Management Consulting Agreement
by one-half from $125,000 to $62,500, such reduction to be effective from that
point forward and on a pro-rated basis for the year in which the reduction takes
effect. However, Garville and Murray, or any other directors that may in the
future be designated in their stead by the holders of the Preferred Stock as a
class, shall each be eligible to receive director’s fees in the same amounts
received from time to time by the other non-employee directors of the Company.
 
 
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4.           Particelli agrees that he shall not stand for re-election as
director of the Company in the next election of the Company’s Board of
Directors, provided that, notwithstanding any other provision of this Paragraph
4, Particelli may stand for re-election if Horsey, as a director of the Company,
acting in his sole and absolute discretion, votes in favor of Particelli’s
nomination for re-election or otherwise agrees in a writing delivered to the
Board that Particelli should be permitted to stand for re-election. In
connection with this Paragraph 4, Murphy acknowledges and agrees that any action
or decision by Horsey regarding Particelli’s nomination for re-election, as set
forth herein, is within Horsey’s sole and absolute discretion, and Murphy, both
individually and derivatively on behalf of the Company, waives any right or
ability to challenge any such action or decision by Horsey or to assert any
claim based on or arising from any such action or decision by Horsey.

5.           Following the execution of this Agreement by all Parties, the
Plaintiff shall file a request for attorney’s fees, incurred in this Action,
with the Court. Subject to the Court’s approval, MKTG agrees to pay Plaintiff’s
attorney’s fees up to $175,000, with one-half to be paid within five (5)
business days of the Court’s execution and entry of an order granting
Plaintiff’s request for attorney’s fees, and the remainder to be paid within
sixty (60) calendar days after the first payment.

6.           Following the execution of this Agreement by all Parties and upon
the Court’s approval of the form of notice set forth in Exhibit A attached
hereto (the “Notice of Settlement”), in accordance with New York Business
Corporation Law § 626(d) and at its own expense, MKTG shall use reasonable
efforts to provide the notice to the Company’s stockholders of the proposed
settlement of this Action by causing a copy of the Notice of Settlement to be
sent by United States Postal Service commercial First-Class Mail to all owners
of MKTG common stock as of the date of this Agreement, as shown in the stock
records or register maintained by MKTG or the transfer agent for its common
stock. To the extent requested by the Court, MKTG shall file with the Court
proof of mailing of the Notice of Settlement as set forth in this Paragraph 6.
 
 
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7.           The Parties hereby stipulate and agree that, upon the Court’s
approval of this Agreement, the Action shall be dismissed with prejudice, and
the Parties shall execute all documents necessary to dismiss the Action with
prejudice, provided that the parties agree to request that the Action remain
pending on the Court’s docket until MKTG makes payment of all attorney’s fees
approved by the Court, as set forth in Paragraph 5 of this Agreement.

8.           In consideration for the foregoing, except for obligations under
this Agreement, the Plaintiff, on behalf of himself and on behalf of his
successors, heirs, assigns, and affiliates (collectively the “Releasors”),
hereby irrevocably, unconditionally, fully, and completely releases, discharges,
and acquits forever the Defendants and UCC and their agents, employees,
representatives, predecessors, successors, affiliates, parent and subsidiary
entities, corporate affiliates, joint ventures, assigns, shareholders, present
and former officers and directors, attorneys, insurers, heirs, executors, and
administrators (collectively, the “Releasees”) from any and all claims,
counterclaims, actions, rights, causes of action, suits, debts, dues, offsets,
sums of money, accounts, reckonings, bonds, bills, specialties, covenants,
contracts, controversies, agreements, demands, liabilities, obligations,
representations, and promises of actions of every kind and nature, variances,
trespasses, damages and judgments whatsoever, whether known or unknown,
suspected or unsuspected, fixed or contingent, existing or claimed to exist,
both in law and equity, before any judicial or arbitral body anywhere in the
world, that the Releasors ever had, now have, or may hereafter have against the
Releasees for, upon, or by reason of any matter, cause of action, or thing
whatsoever, from the beginning of the world to the date of execution of this
Agreement, and further, the Plaintiff, derivatively on behalf of the Company and
on behalf of its successors, heirs, assigns, and affiliates (collectively the
“Derivative Releasors”), hereby irrevocably, unconditionally, fully, and
completely releases, discharges, and acquits forever the Releasees from any and
all claims, counterclaims, actions, rights, causes of action, suits, debts,
dues, offsets, sums of money, accounts, reckonings, bonds, bills, specialties,
covenants, contracts, controversies, agreements, demands, liabilities,
obligations, representations, and promises of actions of every kind and nature,
variances, trespasses, damages and judgments whatsoever, whether known or
unknown, suspected or unsuspected, fixed or contingent, existing or claimed to
exist, both in law and equity, before any judicial or arbitral body anywhere in
the world, that the Derivative Releasors ever had, now have, or may hereafter
have against the Releasees for, upon, or by reason of any matter, cause of
action, or thing whatsoever, from the beginning of the world to the date of
execution of this Agreement arising from or relating to the subject matter of
the Action. Notwithstanding the foregoing, the Releasors do not waive any rights
for indemnification by the Company held by virtue of Murphy’s position as a
former director and officer of the Company, such rights being subject to the
terms of that certain Separation Agreement by and between Murphy and CoActive
Marketing Group, Inc., dated December 31, 2007, which agreement shall remain in
full force and effect.
 
 
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9.           Effective upon the entry of an Order by the Court dismissing the
Action with prejudice, the Plaintiff waives any rights and hereby covenants not
to initiate a lawsuit or administrative complaint or charge or commence any sort
of action or proceeding whatsoever against Defendants or UCC or their current
and former officers, agents, directors, employees and representatives, and their
successors and assigns, at any time in the future based on any right or claim
that arose on or before the effective date of this Agreement, and further, the
Plaintiff, derivatively on behalf of the Company, waives any rights and hereby
covenants not to initiate a lawsuit or administrative complaint or charge or
commence any sort of action or proceeding whatsoever against Defendants or UCC
or their current and former officers, agents, directors, employees and
representatives, and their successors and assigns, at any time in the future
based on any right or claim that arose on or before the effective date of this
Agreement arising from or relating to the subject matter of the Action. The
Plaintiff further covenants and agrees that he will not cause or encourage any
other to initiate suit against Defendants or UCC or their current and former
officers, agents, directors, employees and representatives, and their successors
and assigns, at any time in the future based on any right or claim that arose on
or before the effective date of this Agreement, and further represents that,
from the date of the filing of the Amended Complaint in this Action to the date
of this Agreement, he has not encouraged any other to initiate suit against
Defendants or UCC or their current and former officers, agents, directors,
employees and representatives, or their successors and assigns.
 
 
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10.           The Plaintiff, on behalf of himself and derivatively on behalf of
the Company, further expressly waives any and all rights he may have under any
statute or common law principle that would limit the effect of the releases
herein to those claims actually known or that Plaintiff should have known at the
time of execution of this Agreement. In giving the releases herein, which
includes claims which may be unknown to at present, Plaintiff acknowledges that
he has read and understands Section 1542 of the Civil Code of the State of
California which reads as follows:

“A general release does not extend to claims which the creditor does not know or
suspect to 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.”

The Plaintiff, on behalf of himself and derivatively on behalf of the Company,
hereby expressly waives and relinquishes all rights and benefits under this
section and any law or legal principle of similar effect in any jurisdiction
with respect to claims released hereby.

11.           The Defendants and UCC hereby agree that they will not commence
any action or proceeding, or assert any claims, against the Plaintiff based on
the fact that Plaintiff commenced the Action against the Defendants.
 
 
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12.           Neither this Agreement nor anything contained in it shall be
deemed, construed, or treated in any respect as an admission by any Party hereto
of any liability or wrongdoing.

13.           The Parties to this Agreement individually represent and warrant
to each other that they have read and understand its terms, have the power and
authority to execute it, have had and taken the opportunity to confer with legal
counsel concerning its terms and all matters covered by and relating to it, and
agree to be bound by its terms and conditions. The Parties have entered into
this Agreement for reasons on their own and not based upon the representations
of any Party hereto except as contained in the Agreement.

14.           The terms and provisions of this Agreement shall inure to the
benefit of and be binding upon the Parties hereto and their respective heirs,
legal representatives, successors, and assigns.

15.           This Agreement shall be interpreted, enforced, and governed by the
substantive and procedural law of New York.

16.           This Agreement constitutes the entire agreement and understanding
among the Parties with respect to the settlement of the Action, and supersedes
any prior agreements, written or oral, with respect to such settlement. There
are no other agreements, covenants, representations, or warranties respecting
this Agreement or the other matters contemplated herein except as expressly set
forth and provided herein. This Agreement cannot be changed, altered, amended,
modified, terminated, or otherwise changed in any respect except by a writing
duly executed by all authorized representatives of all the Parties, and the
Parties acknowledge and agree that they will make no claim at any time or place
that this Agreement has been orally altered or modified in any respect
whatsoever.

17.           The representations, warranties, and covenants contained herein
shall survive this Agreement.

 
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18.           This Agreement may be executed in counterparts all of which
together shall constitute one and the same instrument, and facsimile or pdf
signatures shall be deemed the equivalent of original signatures.

19.           This Agreement is not effective until it has been fully executed
by all Parties. The Parties understand that this Agreement remains subject to
the Court’s approval. Subsequent to the execution of this Agreement by all
Parties, the Plaintiff shall promptly submit to the Court a motion for approval
of this Agreement and dismissal of the Action with prejudice. During the time
that the Court’s approval of this Agreement is pending, the Parties shall not
seek discovery in the Action or seek any form of relief other than relating to
the terms of this Agreement.

20.           In the event this Agreement is not approved by the Court, this
Agreement is voidable by the Parties, provided that this Agreement shall not be
voidable by the Plaintiff in the event the Court declines the Plaintiff’s
request for attorney’s fees or awards the Plaintiff attorney’s fees in a lesser
amount than that specified in Paragraph 5 of this Agreement.
 
 
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In Witness Whereof, the undersigned have executed this Agreement as of the date
first above written.
 
Brian Murphy
 
‘mktg, inc.’
     
/s/ Brian Murphy
 
By:
/s/ Charles Horsey
     
Title: CEO
         
Charles F. Tarzian
 
Fred Kaseff
     
/s/ Charles F. Tarzian
 
/s/ Fred Kaseff
         
Marc C. Particelli
 
James H. Feeney
     
/s/ Marc C. Particelli
 
/s/ James H. Feeney
         
Herbert M. Gardner
 
John A. Ward III
     
/s/ Herbert M. Gardner
 
/s/ John A. Ward, III
         
UCC-mktg Investment, LLC
 
UCC-mktg Partners, LLC
     
By:
/s/ Gregory J. Garville
 
By:
/s/ Gregory J. Garville
Title: Managing Director
 
Title: Managing Director
          Charles Horsey  
Patty Hubbard
      /s/ Charles Horsey  
/s/ Patty Hubbard
          James Ferguson  
Dave Arnold
      /s/ James Ferguson  
/s/ Dave Arnold
          Union Capital Corporation                 By:
/s/ Gregory J. Garville
      Title: President      

 
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EXHIBIT A

[Notice of Settlement]

 
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