ex10_1.htm


    
      

    

     

    SETTLEMENT AGREEMENT AND MUTUAL RELEASE

    


    


    
      THIS
SETTLEMENT AGREEMENT AND MUTUAL RELEASE (the “Agreement”) is made as of the 17
day of June, 2008 by and among MARSHALL HOLDINGS INTERNATIONAL, INC., a Nevada
corporation formerly known as “Gateway Distributors, Ltd.” (“MHII”) and CAMOFI
MASTER LDC and CAMHZN MASTER LDC (collectively, “CAMOFI”).

       

      WHEREAS,
MHII, CAMOFI, and D. L. Claire Capital, Inc., a Delaware corporation, executed
that certain Purchase Agreement dated as of October 31, 2007 (the “Purchase
Agreement”) to which reference is hereby made and expressly incorporated herein
for all purposes; and

       

      WHEREAS,
in connection with the Purchase Agreement, there were executed and delivered
those certain CAMOFI 12% Secured Promissory Notes due May 1, 2008, Letter
Agreement, (Fuselier) Guarantee, MHII’s Guarantee, Mortgage (Nevada), Mortgage
(Utah), Security Agreement, Security Interest and Pledge Agreement, Common Stock
Purchase Warrant to Purchase 424,936 Shares of Common Stock of Marshall Holdings
International, Inc., and Common Stock Purchase Warrant to Purchase 1,200,063
Shares of Common Stock of Marshall Holdings International, Inc., all of which
are more fully described in the Purchase Agreement, to which references are
hereby made and expressly incorporated herein for all purposes (all of such
documents, including the Purchase Agreement, are collectively, the “Transaction
Documents”); and



    WHEREAS,
MHII has been unable to satisfy certain of its obligations as described in the
Transaction Documents; and

    


    WHEREAS,
CAMOFI and MHII wish to settle all claims, disputes, and obligations between
them arising out of or related to the Transaction Documents, including all
claims asserted or that could have been asserted in the Transaction Documents,
upon the terms set forth herein; and

    


    NOW,
THEREFORE, in consideration of the premises and covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound, the parties agree as
follows:

    


    
      1.    Settlement.  In
settlement of all obligations as described in the Transaction Documents, MHII
shall (a) pay to CAMOFI the sum of $1,000,000 (the “Settlement Payment”) on or
before 90 days from the date hereof, and (b) until such time as CAMOFI shall
have notified MHII in writing that it has sold or otherwise disposed of all of
the shares of MHII common stock (the “Shares”) held by it, MHII shall cooperate
fully with CAMOFI and its counsel and deliver, within a reasonable time, upon
the request of CAMOFI or its counsel any and all opinions of counsel,
certificates, agreements, instruments and documents reasonably requested by
CAMOFI or its counsel to enable CAMOFI to sell or otherwise dispose of its
Shares.  MHII’s performance under this Paragraph 1 and Paragraph 2
hereof is expressly made a condition precedent to CAMOFI’s release of MHII as
set forth in Paragraph 3 hereof, and the release set forth in Paragraph 3 shall
not become effective until MHII shall have satisfied in full all of its
obligations under Paragraphs 1 and 2.

       

      2.    Consideration.  In
addition to the Settlement Payment, as consideration for the execution of this
Agreement, MHII shall, simultaneously with the execution of this Agreement pay
to CAMOFI (a) the sum of $20,000 and (b) the sum of $15,000 as reimbursement for
legal fees and as a management fee, the payment of which grant to MHII the right
to make the Settlement Payment on or before 30 days from the date
hereof.  If the Settlement Payment is not made within 30 days from the
date hereof, MHII shall pay to CAMOFI an additional $20,000 before 31 days from
the date hereof, the payment of which will grant to MHII the right to make the
Settlement Payment on or before 60 days from the date hereof.  If the
Settlement Payment is not made within 60 days from the date hereof, MHII shall
pay to CAMOFI an additional $20,000 before 61 days from the date hereof, the
payment of which will grant to MHII the right to make the Settlement Payment on
or before 90 days from the date hereof, which extension shall be
final.  Notwithstanding anything contained in this Agreement to the
contrary, upon MHII’s breach of any of its obligations contained in this
Agreement (x) this Agreement shall become null and void and of no further
effect, (y) CAMOFI shall be entitled to retain any payments made to it by MHII
in accordance with this Agreement, and (z) the Transaction Documents shall
remain unchanged and in full force and effect, and CAMOFI shall be entltled to
pursue any and all of its remedies hereunder.



    
      3.    General Release of
MHII.  Subject to and expressly conditioned upon the
performance by MHII of all of its obligations under Paragraphs 1 and 2 hereof,
at such time as CAMOFI shall have determined that MHII has fully satisfied all
of its obligations under Paragraphs 1 and 2 hereof, CAMOFI, individually and for
its assigns, predecessors, successors, joint venturers, heirs, executors,
administrators, personal representatives, and trustees, and any other person at
interest therewith, without any further action, shall be deemed to have released
and forever discharged MHII, their assigns, predecessors, successors, joint
venturers, heirs, executors, administrators, personal representatives,
stockholders, officers, directors, employees, underwriters, attorneys, and
trustees, and any other person at interest therewith, from and against any and
all claims, demands, debts, interest, expenses, dues, liens, liabilities, causes
of action including court costs or attorneys’ fees, or any other form of
compensation, it may now own or hereafter acquire against MHII, whether
statutory, in contract, in tort, either at law or in equity, including quantum meruit, as well as
any other kind or character of action on account of, growing out of, relating to
or concerning, whether directly or indirectly, the Transaction Documents, the
transactions and occurrences described in the Transaction Documents, any other
instrument, agreement or transaction, whether written or oral, in connection
with the Transaction Documents, or any other transaction or occurrence of any
nature whatsoever occurring before the execution of this Agreement, save only
the executory provisions of this Agreement.  Upon MHII’s satisfaction
in full if all of its obligations under this Agreement MHII will have no further
obligation with respect to any of the Transaction Documents, and the Transaction
Documents shall have no further force or effect.  Notwithstanding
anything contained in this Agreement to the contrary, upon MHII’s breach of any
of its obligations contained in this Agreement (a) this Agreement shall become
null and void and of no further effect, (b) CAMOFI shall be entitled to retain
any payments made to it by MHII in accordance with this Agreement, and (c) the
Transaction Documents shall remain unchanged and in full force and effect, and
CAMOFI shall be entltled to pursue any and all of its remedies
hereunder.


      
        
           


        

        
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      4.           Acknowledgment by
CAMOFI.  Upon MHII’s satisfaction in full if all of its
obligations under this Agreement, CAMOFI, without any further action, shall be
deemed to have acknowledged and agreed that the release and discharge set forth
above shall be a general
release.  It is understood and agreed to by the parties that
this Agreement is a compromise of all obligations of MHII in connection with the
Transaction Documents.  CAMOFI further acknowledges that the general
release set forth herein above is given voluntarily, based solely upon the
judgment of CAMOFI formed after consultation with its attorney, and is not based
upon any representations or statements of any kind or nature whatsoever made by
or on behalf of MHII as to the liability, if any, of MHII, or the value of the
Transaction Documents or any other matter relating
thereto.  Additionally, CAMOFI expressly states and acknowledges that
no promise, agreement, or representation, other than those expressed herein,
have been made by MHII to CAMOFI or its attorney in order to induce the
execution of this Agreement.



    5.           General Release of
CAMOFI.  As a result of the mutual covenants and considerations
contained herein, MHII, individually and for its assigns, predecessors,
successors, joint venturers, heirs, executors, administrators, personal
representatives, stockholders, officers, directors employees, underwriters,
attorneys, and trustees, and any other person at interest therewith, hereby
releases and forever discharges CAMOFI, its partners, employees, assigns,
predecessors, successors, joint venturers, heirs, executors, administrators,
personal representatives, and trustees, and any other person at interest
therewith, from and against any and all claims, demands, debts, interest,
expenses, dues, liens, liabilities, causes of action including court costs or
attorneys’ fees, or any other form of compensation, they may now own or
hereafter acquire against CAMOFI, whether statutory, in contract, in tort,
either at law or in equity, including quantum meruit, as well as
any other kind or character of action on account of, growing out of, relating to
or concerning, whether directly or indirectly, the Transaction Documents, the
transactions and occurrences described in the Transaction Documents, any other
instrument, agreement or transaction, whether written or oral, in connection
with the Transaction Documents, or any other transaction or occurrence of any
nature whatsoever occurring before the execution of this Agreement, save only
the executory provisions of this Agreement.

    


    6.           Acknowledgment by
MHII.  MHII acknowledges and agrees that the release and
discharge set forth above is a general
release.  It is understood and agreed to by the parties that
this Agreement is a compromise of all obligations of MHII in connection with the
Transaction Documents.  MHII further acknowledges that the general
release set forth herein above is given voluntarily, based solely upon the
judgment of MHII formed after consultation with their attorney, and is not based
upon any representations or statements of any kind or nature whatsoever made by
or on behalf of CAMOFI as to the liability, if any, of MHII, or the value of the
Transaction Documents or any other matter relating
thereto.  Additionally, MHII expressly states and acknowledges that no
promise, agreement, or representation, other than those expressed herein, have
been made by CAMOFI to MHII or their attorney in order to induce the execution
of this Agreement.

    


    
      7.           No
Litigation.  Upon MHII’s satisfaction in full if all of its
obligations under this Agreement, the parties covenant, agree, and promise that
they shall not hereafter commence any type of civil action or assert any
defenses, counterclaims, or setoffs against each other arising out of or related
to all claims, counterclaims, crossclaims, and third-party
claims, asserted or that could have been asserted, in the Transaction
Documents.


    

     

    8.           Law
Governing.  This Agreement shall be governed by and interpreted
in accordance with the laws of the State of New York for contracts to be wholly
performed in such state and without giving effect to the principles thereof
regarding the conflict of laws.  Each of the parties consents to the
exclusive jurisdiction of the federal courts whose districts encompass any part
of the County of New York or the state courts of the State of New York sitting
in the County of New York in connection with any dispute arising under this
Agreement or any of the Transaction Documents and hereby waives, to the maximum
extent permitted by law, any objection, including any objection based on forum
non conveniens, to the bringing of any such proceeding in such jurisdictions or
to any claim that such venue of the suit, action or proceeding is
improper.  Nothing in this paragraph shall affect or limit any right
to serve process in any other manner permitted by law.


    
      
         


      

      
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    9.           Confidentiality.  The
terms of this Agreement shall be kept confidential by the parties and not
disclosed to any third parties or the public except as necessary for the
specific enforcement of the terms of this Agreement, filings with the United
States Securities and Exchange Commission or registration statements filed by
MHII, valid business, tax, or other legitimate reasons or needs, or as
otherwise directed or required by court order.

    


    10.           No Assignment or
Subrogation.  All parties to this Agreement warrant and
represent that, as of the date of the execution of this Agreement, no claim
addressed by this Agreement has been assigned or transferred, expressly or
implied by operation of law to any other person or party and no person or party
is subrogated to the rights of the parties herein and that all claims released
herein are owned exclusively by the parties releasing said claims with the sole
authority to release them.

    


    
      11.           Notices.  Unless
otherwise specifically provided herein, all notices shall be in writing
addressed to the respective party as set forth below and may be personally
served, faxed, or sent by overnight courier service or United States mail, if to
MHII to Marshall Holdings International, Inc., 2750 West Brooks Avenue, Suite
103, North Las Vegas, Nevada 89032, to the attention of Mr. Richard A. Bailey,
Chief Executive Officer, facsimile (702) 312-3590, and by email
rab@rightsolution.com; and if to CAMOFI, addressed to CAMOFI MASTER LDC, c/o
Centrecourt Asset Management, LLC, 350 Madison Avenue, New York, New York 10017,
to the attention of Michael Loew, Esq., General Counsel, facsimile (646)
758-6751, and by email mloew@centrecourtam.com.  Any notice given
pursuant to this section shall be deemed to have been given: (a) if delivered in
person, when delivered; (b) if delivered by fax, on the date of transmission if
transmitted on a business day before 4:00 p.m. at the place of receipt or, if
not, on the next succeeding business day; (c) if delivered by overnight courier,
two days after delivery to such courier properly addressed; or (d) if by United
States mail, four business days after depositing in the United States mail, with
postage prepaid and properly addressed.  Any party hereto may change
the address or fax number at which it is to receive notices hereunder by notice
to the other party in writing in the foregoing manner.



    12.           Headings.  Headings
in this Agreement are included herein for convenience of reference only and
shall not constitute a part of this Agreement or be given any substantive
effect.

    


    13.           Severability.  In
case any provision in or obligation under this Agreement shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such provision
or obligation in any other jurisdiction, shall not in any way be affected or
impaired thereby.

    


    14.           Construction.  Words
of any gender used in this Agreement shall be held and construed to include any
other gender, and words in the singular number shall be held to include the
plural, and vice versa, unless the context requires otherwise.  In
addition, the pronouns used in this Agreement shall be understood and construed
to apply whether the party referred to is an individual, partnership, joint
venture, corporation or an individual or individuals doing business under a firm
or trade name, and the masculine, feminine and neuter pronouns shall each
include the other and may be used interchangeably with the same
meaning.  This Agreement is and shall be deemed jointly drafted and
written by all the parties and shall not be construed or interpreted for or
against any party, including the party originating or preparing it.

    


    15.           Waiver.  No
course of dealing on the part of any party hereto or its agents, or any failure
or delay by any such party with respect to exercising any right, power or
privilege of such party under this Agreement or any instrument referred to
herein shall operate as a waiver thereof, and any single or partial exercise of
any such right, power or privilege shall not preclude any later exercise thereof
or any exercise of any other right, power or privilege hereunder or
thereunder.

    


    16.           Cumulative
Rights.  The rights and remedies of any party under this
Agreement and the instruments executed or to be executed in connection herewith,
or any of them, shall be cumulative and the exercise or partial exercise of any
such right or remedy shall not preclude the exercise of any other right or
remedy.


    
      
         


      

      
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    17.           Benefit.  The
terms and conditions of this Agreement shall be binding upon and shall inure to
the benefit of the parties hereto, their respective heirs, executors,
administrators, legal representatives, successors, and assigns.

    


    18.           Multiple
Counterparts.  This Agreement may be executed in multiple
counterparts which upon execution by all parties shall in the aggregate comprise
a single executed document.

    


    19.           Attorneys’
Fees.  All parties shall bear their own attorneys’ fees and
expenses arising out of or in connection with this Agreement and/or any related
matters and documents.

    


    20.           Entire
Agreement.  This Agreement is entered for the purpose of
achieving a full settlement of all claims between and among the parties
described herein, subject to the conditions described herein.  This
Agreement represents the entire understanding between the parties with respect
to the subject matter hereof and supersedes any prior negotiations or agreements
between them regarding the matters set forth herein and may not be altered,
amended, or modified in any respect, except by a writing duly executed by the
party to be charged with such change.

    


    IN
WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and
delivered as of the date first written above.

    


    
      	 
      	
              MARSHALL
      HOLDINGS INTERNATIONAL, INC.

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By

            	 
      
	 
      	 
      	
              Richard
      A. Bailey, Chief Executive Officer

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              CAMOFI MASTER LDC

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By

            	 
      
	 
      	 
      	
              [NAME],
      ______________

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              CAMHZN MASTER LDC

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By

            	 
      
	 
      	 
      	
              [NAME],
      ______________

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By

            	 
      
	 
      	 
      	
              
                [NAME],
      ______________

              

            


    

    


     

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