EXHIBIT
      10.1

    


    RELEASE
      AND SETTLEMENT AGREEMENT

    


    


    THIS
      RELEASE AND SETTLEMENT AGREEMENT (this “Agreement”)
      is
      entered into as of October 19, 2007 by and between MEDICAL DISCOVERIES, INC.,
      a
      Utah corporation (the “Company”),
      and
      MERCATOR MOMENTUM FUND, LP, MONARCH POINTE FUND, LTD., and MERCATOR MOMENTUM
      FUND III, LP, each a private investment entity (the foregoing three investment
      funds are hereinafter collectively referred
      to as “MAG”).

    


    RECITALS

    


    WHEREAS,
      on or about October 2004, the board of directors of the Company (the
“Board”)
      adopted a resolution establishing the rights, preferences, privileges and
      restrictions of the Company’s Series A Convertible Preferred Stock (the
“Series
      A Preferred Stock”);

     

    WHEREAS,
      the Company thereafter filed with the Secretary of State of the State of Utah
      (the “Utah
      SOS”)
      a
      Certificate of Designations of Preferences and Rights of the Series A Preferred
      Stock (the “Certificate”),
      which
      Certificate designated the rights of the holders of the Series A Preferred
      Stock
      with respect to such preferred stock;

     

    WHEREAS,
      in connection with an initial round of preferred equity financing, the Company
      issued to MAG shares of the Series A Preferred Stock pursuant to the terms
      and
      conditions of Subscription Agreements each dated October 18, 2004 (the
“Subscription
      Agreements”);

     

    WHEREAS,
      pursuant to the Certificate, MAG had the right to convert shares of the Series
      A
      Preferred Stock at a Conversion Price (as defined in the Certificate) equal
      to
      85% of the Market Price (as defined in the Certificate) except that if an Event
      of Default (as defined in the Subscription Agreements) occurs, the conversion
      price is reduced to 75% of the Market Price, subject to a Floor Price (as
      defined in the Certificate) of $0.05 per share;

     

    WHEREAS,
      on or around March 2005, in connection with a subsequent round of equity
      financing pursuant to which the Company issued to MAG additional shares of
      the
      Series A Preferred Stock, the Company and MAG agreed to amend the Certificate
      (the “Amendment”)
      to
      delete all references therein to a Floor Price, which Amendment was to be filed
      with the Utah SOS in accordance with Utah general corporate law;

     

    WHEREAS,
      the Company failed to file the Amendment with the Utah SOS and, accordingly,
      the
      Series A Preferred Stock conversion price is still limited to the $0.05 per
      share Floor Price; 

     

    WHEREAS,
      the Company is in default of the Subscription Agreements for failing to keep
      the
      Registration Statement (as defined in the Subscription Agreements)
      effective;

     

    WHEREAS,
      the parties hereto desire to reach an agreement in settlement of any and all
      past, present, future, actual, potential and unknown losses, costs, expenses
      and
      damages that MAG may have suffered as result of the Company’s failure to file
      the Amendment and to keep the Registration Statement effective (all such losses,
      expenses and damages, the “Losses”);

     

    WHEREAS,
      MAG owns all of the issued and outstanding shares of the Series A Preferred
      Stock; and,

     

    WHEREAS,
      the parties hereto now desire to enter into a full and complete release and
      settlement with respect of the Losses, subject to the terms and conditions
      of
      this Agreement.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Agreement

    


    NOW,
      THEREFORE, upon these premises, which are incorporated herein by reference,
      and
      for and in consideration of the mutual promises and covenants set forth herein
      and other good and valuable consideration, the receipt and adequacy of which
      are
      hereby acknowledged, it is hereby agreed as follows:

    


    1. Release
      of Claims.
      Each of
      the MAG entities, for themselves, their future, present, and former employees,
      agents, representatives, consultants, attorneys, fiduciaries, officers,
      directors, successors, assigns and subsidiary entities (together, the
“MAG
      Parties”)
      do
      hereby irrevocably release, remise, acquit, and forever discharge the Company,
      including all of its future, present, and former employees, agents,
      representatives, consultants, attorneys, fiduciaries, servants, officers,
      directors, managers, partners, predecessors, successors and assigns, subsidiary
      and parent entities (together, the “Company
      Parties”),
      from
      any and all actions and causes of action, judgments, execution, suits, debts,
      past, present, future and unknown claims, demands, liabilities, obligations,
      damages that could be brought by the MAG Parties, and expenses of any and every
      character, known or unknown, direct and/or indirect, at law or in equity, or
      whatsoever kind or nature, in connection with, relating to or otherwise arising
      out of the Losses and the Company’s failure to file the Amendment. The Company
      acknowledges that the releases and agreements in this paragraph are limited
      to
      the Losses and to damages and other causes of actions related to the Company’s
      failure to file the Amendment.

    


    2. Covenant
      Not to Sue.
      MAG
hereby
      covenants and agrees that neither of them will at any time, directly or
      indirectly, initiate, maintain, or prosecute, or in any way knowingly aid in
      the
      initiation, maintenance, or prosecution, of any past,
      present, future and unknown claim,
      demand, or cause of action, at law, in equity, or otherwise, against the Company
      Parties related to the Losses or the
      Company’s failure to file the Amendment.

    


    3. Consideration.
      In
      consideration of the releases, promises and covenants of MAG set forth herein,
      the Company hereby issues to MAG warrants (the “Warrants”)
      to
      purchase 17 million shares of the Company’s common stock, no par value, at an
      exercise price of $0.01 per share for a term of 10 years from the date of
      issuance of the Warrants. Warrants to purchase the 17 million shares of common
      stock shall be allocated as follows: Warrants for 5,122,100 shares of Common
      Stock to Mercator Momentum Fund, L.P.; Warrants for 6,050,300 shares of Common
      Stock to Mercator Momentum Fund III, L.P.; Warrants for 5,827,600
      shares
      of
      Common Stock to Monarch Pointe Fund, Ltd. The form of the Warrants is attached
      hereto as Exhibit
      A.

    


    4. No
      Admission of Liability.
      By
      entering into this Agreement, neither party hereto admits the allegations or
      contentions of the other party with respect to the Losses, the Company’s failure
      to file the Amendment, and related matters, and each party is entering into
      this
      Agreement for the sole purpose of resolving this matter and avoiding the time
      and expense incident to protracted litigation.

    


    5. Entire
      Agreement.
      This
      Agreement constitutes the sole, complete and entire agreement and understanding
      of the parties concerning the matters contained herein and may not be altered,
      modified, or changed in any manner except by a writing duly executed by the
      parties. No conditions precedent to the effectiveness of this Agreement exist,
      other than as expressly provided for herein. There are no oral or written
      collateral agreements. All prior discussions and negotiations have been and
      are
      merged, integrated into and superseded by this Agreement.

    


    6. Severability.
      The
      invalidity or unenforceability of any provision of this Agreement shall not
      affect the validity or enforceability of any other provisions of this Agreement,
      which shall remain in full force and effect. If any covenants or provisions
      of
      this Agreement are determined to be unenforceable by reason of their extent,
      duration, scope, or otherwise, then the parties contemplate that the court
      making such determination shall reduce such extent, duration, scope, or other
      provision and enforce them in their reduced form for all purposes contemplated
      by this Agreement.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    


    7. Survival.
      The
      representations, warranties, covenants, and agreements of the respective parties
      set forth herein shall survive the date of the consummation of the transaction
      contemplated in this Agreement. 

    


    8. Notices.
      Any
      notice, demand, request, or other communication under this Agreement shall
      be in
      writing and shall be deemed to have been given on the date of service if
      personally served or by facsimile transmission (if receipt is confirmed by
      the
      facsimile operator of the recipient), or delivered by overnight courier service,
      or on the third day after mailing if mailed by certified mail, return receipt
      requested, addressed as follows:

     

    
      	 	If to the Company, as follows:  	Medical Discoveries, Inc.	 
	 	 	
              6033
                W. Century Blvd, Suite 1090, 

              Los
                Angeles, California 90045

            	 
	 	 	 	 	 
	 	If to MAG, as follows:	Mercator Momentum Fund LP	 
	 	 	
              Mercator
                Momentum Fund III, LP

              Monarch
                Pointe Fund, Ltd.

              c/o
                MAG Capital LLC

              555
                Flower Street, Suite 4200

              Los
                Angeles, California 90071

            	 


    

     

    or
      such
      other addresses and facsimile numbers as shall be furnished in writing by any
      party in the manner for giving notices hereunder, and any such notice, demand,
      request, or other communication shall be deemed to have been given as of the
      date so delivered or sent by facsimile transmission (if receipt is confirmed
      by
      the facsimile operator of the recipient), three days after the date so mailed,
      or one day after the date so sent by overnight delivery.

    


    9. Successors
      and Assigns.
      This
      Agreement shall be binding upon and inure to the benefit of the parties hereto
      and their respective successors and assigns. 

    


    10. Relief.
      Any
      party’s breach or threatened breach of any covenant contained in this Agreement
      will cause such damage to the other party as will be irreparable, and for that
      reason, each party agrees that the other shall be entitled as a matter of right
      to an injunction from any court of competent jurisdiction restraining any
      further violation of such covenants by such other party. The right to injunctive
      relief shall be cumulative and in addition to all other remedies, including,
      specifically, recovery of damages.

    


    11. Attorneys’
      Fees.
      In the
      event that any party institutes any action or suit to enforce this Agreement
      or
      to secure relief from any default hereunder or breach hereof, the non-prevailing
      party shall reimburse the prevailing party for all costs, including reasonable
      attorneys’ fees, incurred in connection therewith and in enforcing or collecting
      any judgment rendered therein, including such costs which are incurred in any
      bankruptcy or appellate proceeding.

    


    12. Jurisdiction
      and Venue.
      Any
      judicial proceeding brought against any of the parties hereto, with respect
      to
      the Agreement, shall be brought in any court of competent jurisdiction in Los
      Angeles, California, irrespective of where such party may be located at the
      time
      of such proceeding, and by execution and delivery of the Agreement, each of
      the
      parties hereto hereby consents to the jurisdiction and venue of such court
      and
      waives any defense or opposition to such jurisdiction and venue.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    


    13. Governing
      Law.
      This
      Agreement shall be governed by and construed under and in accordance with the
      laws of the State of California, excluding the laws respecting choice or
      conflicts of law.

    


    14. Additional
      Documents.
      Each
      party shall, at any time and from time to time, execute and deliver to the
      other
      party all other and further instruments necessary or convenient to effectuate
      the purpose and intent of this Agreement.

    


    


    IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed,
      individually or by their respective officers, hereunto duly authorized.


    


    


    


    MEDICAL
      DISCOVERIES, INC. 

    


    


    By:/s/
      _________________________

    


    David
      R.
      Walker, Chairman of the Board

     

    
      	 	 	 
	 	MERCATOR
              MOMENTUM
              FUND, LP
	 
 	 
 	 
 
	 	         
              	By:/s/
	 	
              
David
              Firestone, General Partner &
              Manager


    

    


    
       

      
        	 	 	 
	 	MERCATOR
                MOMENTUM
                FUND III, LP
	 
 	 
 	 
 
	 	         
                	By:/s/
	 	
                
David
                Firestone, General Partner &
                Manager


      

      
         

        
          	 	 	 
	 	MONARCH
                  POINTE
                  FUND, LTD.
	 
 	 
 	 
 
	 	        
                  	By:/s/
	 	
                  
David
                  Firestone, General Partner &
                  Manager