EXHIBITS 10.1


THIS REDEMPTION AND SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE

THIS REDEMPTION AND SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE (Agreement")
is made and entered into as of February 17, 2004,  by: among AJW Partners,  LLC.
New  Millennium  Capital  Partners ll. LLC, AJW Offshore,  Ltd- (flkla/ AJW /New
Millennimn  Offshore.  Ltd),  and AJW  Qualified  Partners,  LLC (f/k/a  Pegasus
Capital Partners,  LLC) (collectively,  the "Investors") on behalf of themselves
and their  officers,  directors.  employees,  attorneys  and agents,  and Torbay
Holdings,  Inc.  ("Torbay")  on behalf of itself  and its  officers,  directors,
employees.  attorneys, heirs, executors and agents, in accordance with the terms
and conditions set forth below.

                                    RECITALS:

WHEREAS.  on May 15, 2002,  the  Investors  entered  into a Securities  Purchase
agreement  and several  related  agreements  with Torbay,  pursuant to which the
investors purchased from Torbay $500,000 of 12% secured  convertible  debentures
(the "2002  Debentures") and 1,500.000 warrants to buy shares of Torbay's common
stock and on April 16. 2003,  the Investors  entered into a Securities  Purchase
agreement  and several  related  agreements  with Torbay,  pursuant to which the
Investors purchased from Torbay $250,000 of 12% secured  convertible  debentures
(the "2003  Debentures")  and 500,000  warrants to buy shares of Torbay's common
stock  (collectively,  the "Securities  Purchase  Agreements" or  "Debentures").
Since that time, the Investors have converted a portion of their Debentures into
shares  of  Torbay  common  stock,   leaving  the  following  principal  amounts
outstanding:  $338,850 principal amount of thc 2002 Debentures and approximately
$207,000 principal amount of the 2003 Debentures.

WHEREAS,  Torbay has defaulted on its  obligations  contained in the agreements,
including,  without limitation,  its obligation to deliver common stock upon its
receipt of conversion  notices from the  Investors  and the  Investors  have not
exercised their rights under the default provisions of the Debentures.

WHEREAS, on December 18, 2003, Torbay filed a summons against the Investors, The
NIR Group,  LLC,  First Street  Manager III LLC,  Pegasus  Manager,  LLC and AJW
Manager,  LLC  entitled  Torbay v. The NIR  Group et al,.  No  03/018792  in the
Supreme  Court of the State of New York,  County of Nassau (the  "Nassau  County
Summons").

WHEREAS,  the  parties  have  agreed to enter  into this  Agreement  to  settle.
compromise,  release.  and dismiss,  fully and completely and forever,  each and
every claim that the Investors may have against  Torbay and that Torbay may have
against the Investors.

NOW  THEREFORE,   in   consideration  of  the  mutual   covenants,   agreements,
representations  and  warranties  herein  contained,  to avoid further risks and
uncertainty of litigation, and for other good and sufficient consideration,  the
partiers agree as follows:

1.  Redemption of Debentures.  The parties have agreed that the 2002  Debentures
and  the  2003  Debentures  will be  redeemed  under  the  following  terms  and
conditions and that once these terms and conditions have been satisfied, the May
15, 2002 and April 16, 2003 Securities Purchase Agreements will be discharged in
full:

(a) Shares ofTorbay Common Stock. The Investors do not currently hold any shares
of  Torbay's  common  stock.  Within  three  (3) days of the  execution  of this
Agreement,  Torbay will issue and deliver to the Investors  2,000,000  shares of
unrestricted,  freely  Tradeable:  Torbay common stock upon conversion of and in
accordance with the terms and conditions of the Debentures.  This Agreement will
not become  effective until the 2,000,000 shares are delivered to the Investors.
The shares are to be allocated  among the Investors as follows:  AJW  Partners..
LLC will receive 700,000 shares,  New Millennium  Capital  Partners ll, LLC will
receive 140,000 shares,  AJW Offshore Ltd. will receive 700,000 shares,  and AJW
Qualified  Partners win receive 460,000 shares.  Subsequent to their sale of the
2,000,000  unrestricted shares of Torbay Common stock, the Investors will notify
Torbay that they have sold their shares of Torbay common stock.  Such notice can
be delivered by the  Investors to Torbay by  facsimile,  hand,  regular mail, or
federal express.  Within five (5) business days of receiving such notice, Torbay
will  deliver to the  Investors  4,000,000  Restricted  shares of Torbay  common
stock.  The 4,000,000 shares are to be allocated among the Investors as follows:
AJW Partners, LLC will receive 1,400,000 shares, New Millennium Capital Partners
II, LLC will receive  280,000 shares,  AJW Offshore Ltd. will receive  1,400,000
shares, and AJW Qualified Partners will receive 920,000 shares.

<Page>

(b)  Redemption  Payment.  Torbay will pay the  Investors  $200,000 in cash,  in
monthly installments of $16,666.66 commencing eight (8) weeks from the execution
of this Agreement.  The montly  installments will be paid on the first of each
month and the monthly  installments will be allocated as follows:  AJW Partners,
LLC will receive $5,833.33, New Millennium Capital Partners II, LLC will receive
$1,166.66,  AJW Offshore Ltd. will receive $5,833.33, and AJW Qualified Partners
will receive $3,833.34.  Although the monthly  installments are due and owing on
the first of each month,  Torbay will have a grace  period of seven (7) business
days in which to pay the monthly installments.

2. The Nassau County  Summons.  Torbay will  withdraw with  prejudice the Nassau
County  Summons.  Within  ten (10)  business  days  from the  execution  of this
Agreement,  Torbay will  provide the  Investors  with a fully filed and docketed
Notice of Withdrawal With Prejudice.

3. The Press  Release.  Within three (3) business  days of the execution of this
Agreement, Torbay will release the following press release on Business Wire:

Torbay  Holdings Inc.  Enters Into  Redemption  and  Settlement  Agreement  with
Debenture Holders, Withdraws Summons against Debenture Holders

New York - February  -' 2004 - Torbay  Holdings  Inc.  (OTC BB:  TRBY.OB)  today
announced  that it has entered into a Redemption  and  Settlement  Agreement and
Mutual General Release with certain holders of its debentures.

As part of the settlement agreement,  Torbay agreed to withdraw the summons that
it filed in Nassau  County,  New York in December  2003.  No complaint  was ever
filed by Torbay  against the  debenture  holders.  Terms of the  redemption  and
settlement agreement were not disclosed.


4.  Confession  of Judgment.  At the time of the  execution  of this  Agreement.
Torbay will deliver to the Investors a fully executed Affidavit of Confession of
Judgment ("Judgment"), in the form set forth hereto as Exhibit A in favor of the
Investors,  in the  amount  of  $350,000,  plus  accrued  interest,  late  fees,
liquidated damages,  and attorneys' fees and costs. The Judgment will be held in
escrow by Brune & Richard LLP pending  Torbay's  performance of the  obligations
set forth in this  Agreement.  If Torbay is in  default  of this  Agreement,  as
defined in  paragraph 5, the  Investors  shall file the Judgment in the New York
State Supreme Court.

5. Default.  Upon the  occurrence  of any of the following  events of default by
Torbay) the Investors may file and enforce tile Judgment:

(a) Torbay fails to comply with the obligations set forth in this Agreement;

(b) Any  statement  by or on  behalf  of  Torbay,  its then  current  directors.
officers, employees,  attorneys or agents that contradicts the text of the Press
Release set forth in Paragraph 3 hereof, that repudiates this Agreement, or that
accuses  the  Investors  of  wrongdoing  in  connection  with  the  Transactions
contemplated by the Securities Purchase Agreements;

(c) Torbay  becomes  insolvent,  ceases  operations.  Dissolves,  terminates its
business  existence,  makes an assignment for the benefit of creditors,  suffers
the appointment of a receiver, trustee, liquidator or custodian of any or all of
its property; or

(d) Torbay is the subject of a bankruptcy or insolvency proceeding.

6. Mutual General Release.

(a)  Except  for  the  performance  by the  parties  of the  provisions  of this
Agreement,  each  party  hereto,  for  itself  and on  behalf  of all  partners,
officers,  directors,   employees,   affiliates  (both  persons  and  entities),
representatives,   agents,   attorneys,   servants,   trustees,   beneficiaries,
predecessors in interest, successors in interest, assigns, nominees and insurers
(collectively,  the "Releasing  Parties"),  shall be deemed to have released and
forever discharged each of the other parties hereto, and all partners, officers,
directors, employees.  affiliates (both persons and entities),  representatives,
agents, attorneys, servants. trustees, beneficiaries,  predecessors in interest.
successors in interest,  assigns,  nominees and insurers of each such party,  of
and from any and all  claims.  demands,  actions  and causes of action,  whether
known or unknown,  fixed or  contingent,  that any of the Releasing  Parties may
have had,  may now have or may  hereafter  acquire  with  respect to any matters
whatsoever arising under or in any way related to (i) any claims, counterclaims,
third-party  claims, and causes of action that the Releasing Parties have or may
have concerning the Securities Purchase Agreements and related agreements,  (ii)
any act which may constitute a defense to the performance of this Agreement, the
Securities  Purchase  Agreements  and the  Debentures~  and (iii) any claims any
party may have  against  any other  with  respect to or in  connection  with any
alleged  violation  of any  state  common  law,  statute.  or state  or  Federal
securities laws,  prior to the date of this Agreement,  including the Securities
Act of 1933, as amended and the Securities Exchange Act of 1934, as amended.

<Page>

(b) In  addition.  Torbay for itself  and on behalf of all  partners.  officers.
directors. employees.  affiliates (both persons and entities).  representatives,
agents, attorneys. servants, trustees, beneficiaries.  predecessors in interest,
successors in interest, assigns, nominees and insurers specifically releases and
forever  discharges The NIR Group,  LLC.  First Street  Manager II LlC,  Pegasus
Manager.  LLC,  and AJW  Manager7  LLC of and from any and all claims,  demands,
actions and causes of action,  whether  known or unknown.  fixed or  contingent,
that any of the  Releasing  Parties may have had, may now have or may  hereafter
acquire  with  respect to any  matters  whatsoever  arising  under or in any way
related to (i) any  claims,  counterclaims.  third-party  claims.  and causes of
action that the Re]easing  Parties have or may have  concerning  the  Securities
Purchase Agreements and related agreements,  (ii) any act which may constitute a
defense to the performance of this Agreement, the Securities Purchase Agreements
and the  Debentures.  and (iii) any claims any party may have  against any other
with respect to or in connection with any alleged  violation of any state common
law,  statute.  or state Or Federal  securities  laws, prior to the date of this
Agreement,  including the  Securities Act of 1933. as amended and the Securities
Exchange Act of 1934, as amended.

(c)  Notwithstanding  anything to the contrary  contained herein,  the foregoing
shall not release  Torbay from any  claims,  demands,  expenses or losses by the
Investors  (or causes of action or remedies  related  thereto)  arising from any
indemnity  by  Torbay or any  affiliate  for the  benefit  of the  Investors  as
required by the  Debentures,  the  Securities  Purchase  Agreements  and related
agreements.


General Provisions.

(a) Entire  Agreement.  This  Agreement  and the  documents  referred  to herein
constitute the entire understanding, arrangement and agreement among the parties
hereto or any of them with respect to the subject matter hereof,  and supersedes
all   prior   agreements.   arrangements,   understandings,   negotiations   and
discussions, written or oral, between or among the parties hereto.

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

(c)  Modifications  in Writing.  No provisions of this Agreement may be amended,
supplemented  or waived except by a writing signed by the party or parties to be
bound thereby.

(d)  Execution  in  Counterparts.  This  Agreement  may be  executed in two more
counterparts,  all of which taken  together shall be considered one and the same
agreement and ea(:h of which shall be deemed an original.

(e) Severability. In case any provision of this Agreement shall be held illegal,
invalid or  unenforceable.  the  legality,  validity and  enforceability  of the
remaining  provisions  hereof  shrill  not m any  way be  affected  or  impaired
thereby.

(1) Construction.  The parties  acknowledge that each party and its counsel have
reviewed  and revised this  Agreement  and that no rule of  construction  to the
effect that any ambiguities are to be resolved  against the drafting party shall
be  employed  in the  interpretation  of this  Agreement  or any  amendments  or
exhibits  to it or any  document  executed  and  delivered,  by either  party in
connection with this Agreement. All captions in this Agreement are for reference
only  and  shall  not be used in the  interpretation  of this  Agreement  or any
related document. All Exhibits attached hereto are hereby incorporated herein by
reference.

(g) Attorneys'  Fees And Costs.  In the event any dispute between the parties to
this Agreement should result in litigation or other  proceeding,  the prevailing
party  shall  be  reimbursed  by the  non-prevailing  party  for all  reasonable
attorneys' fess and costs,  incurred by the prevailing  party in connection with
such litigation or other proceeding and any appeal thereof. Such costs, expenses
and fees shall be included in and made a part of the  judgment  recovered by the
prevailing party, if any.

(h)  Conflicting  Terms. To the extent any of the terms herein conflict with the
terms of the Debenture Documents, the terms herein shall prevail.

(i) Informed Consent.  The parties admit,  acknowledge and declare that each has
given  mature  and  careful  thought  and  consideration  to the  making of this
Agreement and to all of the obligations  hereby undertaken and the rights hereby
extinguished or created; that this Agreement is entered into voluntarily,  after
advice of counsel, free of undue influence, coercion. duress, menace or fraud of
any kind; that this Agreement and each and every paragraph and every part hereof
has been carefully read and explained; and, that each party fully and completely
understands  aDd is  cognizant  of  all of the  terms  and  conditions  in  this
Agreement.

(j)  Governing  Law.  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. Any litigation based thereon, or arising out of,
under, or in connection with. this agreement or any course of conduct, course of
dealing,  statements  (whether oral or written) or actions of the parties hereto
shall be brought  and  maintained  exclusively  in the state or  Federal  courts
within  the State of New York,  sitting  in New York City.  The  parties  hereby
expressly and  irrevocably  submit to the  jurisdiction of the state and Federal
Courts  within the State of New York for the purpose of any such  litigation  as
set  forth  above  and  irrevocably  agrees  to be bound by any  final  judgment
rendered  thereby  in  connection  with such  litigation.  The  parties  further
irrevocably  consent  to the  service  of process  by  registered  mail  postage
prepaid,  or by personal  service  within or without the State of New York.  The
parties hereby expressly and irrevocably  waive, to the fullest extent permitted
by law, any objection  which they may have or hereafter may have to venue of any
such  litigation  brought in any such court referred to above and any claim that
any such  litigation has been brought in any  inconvenient  forum. To the extent
that the parties have or hereafter may acquire any immunity from jurisdiction of
any  court or from  any  legal  process  (whether  through  service  or  notice,
attachment prior to judgment,  attachment in aid of execution or otherwise) with
respect to themselves or their property,  the parties hereby  irrevocably  waive
such immunity in respect of its obligations under this Agreement and the related
agreements entered into in connection herewith.

(k)  Waiver  of Right to Trial by  Jury.  EACH  PARTY TO THIS  AGREEMENT  HEREBY
KNOWINGLY~  VOLUNTARILY AND  INTENTJONALLY  WAIVES ANY RIGHT TO TRIAL BY JURY ON
ANY CLAIM DEMAND,  ACTION OR CAUSE OF ACTION (a) ARISING  UNDER.  THIS AGREEMENT
OR. (b) IN ANY WAY  CONNECTED  WITH OR.  RELATED OR  INCIDENTAL  TO THE DEALINGS
AMONG THE PARTIES  HERETO WITH  RESPECT TO THIS  AGREEMENT  OR THE  TRANSACTIONS
RELATED HERETO,  IN EACH CASE WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE.
THE PARTIES  AGREE AND CONSENT THAT ANY SUCH CLAIM,  DEMAND,  ACTION OR CAUSE OF
ACTION  SHALL BE DOCIDED BY COURT  TRJAL  WITHOUT A JURY,  AND THAT ANY PARTY TO
THIS  AGREEMENT MAY FILE AN ORIGINAL  COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN  EVIDENCE  OF THE  CONSENT OF THE  PARTIES TO THE WAIVER OR
THEIR  RIGHT TO TRIAL BY JURY.  THE PARTIES  ACKNOWLEDGE  THAT THEY HAVE HAD THE
OPPORTUNITY  TO CONSULT WITH COUNSEL  REGARDING  THIS  SECTION,  THAT THEY FULLY
UNDERSTAND  ITS  TERMS,  CONTENT  AND  EFFE'CT,  AND THAT THEY  VOLUNTARILY  AND
KNOWINGLY AGREE TO THE TERMS OF THIS SECTION. THIS WAIVER CONSTITUTES A MATERIAL
INDUCEMENT FOR THE PARTIES TO ENTER INTO THIS AGREEMENT.

(l) Further Assurances.  The parties hereto hereby agree to execute such further
documents, and take such further actions as may reasonably be necessary to carry
out the intent and  provisions of this  Agreement,  or any agreement or document
relating hereto or entered into in connection herewith.

<Page>

IN WITNESS  WHEREOF,  the parties  hereto have executed this Agreement as of the
date first within above.

PLEASE READ  CAREFULLY.  THIS  REDEMPTION  AND  SETTLEMENT  AGREEMENT AND MUTUAL
GENERAL RELEASE INCLUDES A RELEASE OF KNOWN AND UNKNOWN CLAIMS.

TORBAY HOLDINGS INC.

By: /s/ W. T. Large
--------------------------------------------
Its: President and CEO

AJW PARTNERS, LLC.
BY: SMG GROUP, LLC

BY: /s/ Corey Ribotsky
--------------------------------------------
Its: Manager

NEW MILLENNIUM  CAPITAL  PARTNERS II, LLC
BY: FIRST STREET  MANAGER II LLC

BY: /s/ Corey Ribotsky
--------------------------------------------
Its: Manager

AJW OFFSHORE, LTD
BY: FIRST STREET  MANAGER II LLC

BY: /s/ Corey Ribotsky
--------------------------------------------
Its: Manager

AJW QUALIFIED PARTNERS LLC
BY: AJW MANAGER, LLC

BY: /s/ Corey Ribotsky
--------------------------------------------
Its: Manager

<Page>



SUPREME COURT FOR THE STATE OF NEW YORK COUNTY OF NASSAU

                                                                       Index No.

---------------------------------------------------
AJW PARTNERS, LLC, NEW MILLENIUM CAPITAL PARTNERS  |
II, LLC, AJW OFFSHORE, LTD, and AJW QUALIFIED      |
PARTNERS, LLC                                      |
                                                   |
                                    PLAINTIFF(S)   |       AFFIDAVIT OF
                      AGAINST                      |       CONFESSION OF
TORBAY HOLDINGS INC.,                              |         JUDGMENT
                                                   |
                                    DEFENDANT(S)   |
---------------------------------------------------

STATE OF NEW YORK, COUNTY OF                    ss.:
WILLIAM THOMAS LARGE
                            BEING DULY SWORN, DEPOSES AND SAYS; THAT DEPONENT IS


         the President and CEO of Torbay Holdings, Inc., the

DEFENDANT HEREIN.

THE  DEFENDANT  HEREBY  CONFESSES  JUDGMENT  HEREIN AND  AUTHORIZES  ENTRY
THEREOF  AGAINST  DEFENDANT IN THE SUM OF

$350,000 plus accrued interest, late fees, liquidated damages and attorneys fees
and  costs,  as set  forth in the May 15,  2002 and April  16,  2003  Securities
Purchase Agreements and related agreement:

DEFENDANT RESIDES AT                            DEFENDANT AUTHORIZED ENTRY

IN THE COUNTY OF                   STATE OF
     Nassau                        New York

OF JUDGMENT IN

Supreme Court for the State of New York, County of Nassau

THIS CONFESSION OF JUDGMENT IS FOR A DEBT                   DUE TO THE PLAINTIFF
ARISING FROM THE FOLLOWING FACTS: On May 15, 2003 and April 16, 2003, Plaintiffs
entered into Securities Purchase agreements and several related agreements with
Torbay Holdings Inc. ("Torbay"), pursuant to which the Plaintiffs purchased from
Torbay $750,000 of 12% secured convertible debentures and 2,000,000 warrants to
buy shares of Torbay's common stock (collectively, the "Agreements").
Subsequently, the Investors converted a portion of their Debentures into shares
of Torbay common stock, leaving $545,850 principal amount outstanding. On
November 12, 2003, in accordance with the Agreements between the parties, the
Plaintiffs tendered Conversion Notices to Torbay. The conversion prices were
calculated in accordance with the formula set forth in the Agreements. Pursuant
to the terms of the Agreements, Torbay was obligated to deliver to the
Plaintiffs the shares of its common stock set forth in the Conversion Notices no
later than November 14, 2003. Thereafter, Torbay informed the Plaintiffs that it
would not honor the November 12, 2003 Conversion Notices. On November 18, 2003,
each of the Plaintiffs sent to Torbay a Notice of Default. Under the terms of
the Agreements, a failure by Torbay to deliver common stock issuable by
conversion within the deadline constitutes a default of the Agreements. The
Agreements provide that Torbay must pay a late fee of $2000 per day for failing
to deliver common stock to be issued and delivered upon conversion. The
Agreements also provide for the payment of attorneys' fees and costs to the
prevailing party in any litigation brought to enforce the Agreements. The
Agreements also provide that in the event of default interest is to accrue on
the outstanding principal at the annual rate of 15%.

THIS AFFIDAVIT, IF MADE IN CONNECTION WITH AN AGREEMENT FOR THE PURCHASE FOR
$1,500.00 OR LESS OF ANY COMMODITIES FOR ANY USE OTHER THAN A COMMERCIAL OR
BUSINESS USE UPON ANY PLAN OF DEFERRED PAYMENTS WHEREBY THE PRICE OR COST IS
PAYABLE IN TWO OR MORE INSTALLMENTS, WAS EXECUTED SUBSEQUENT TO THE TIME A
DEFAULT OCCURRED IN THE PAYMENT OF AN INSTALLMENT THEREUNDER.



SWORN TO BEFORE ME THIS
         DAY OF                                  /s/ William Thomas Large
                                    --------------------------------------------
                                      The name signed must be printed beneath

+ Strike out matter in parenthesis if defendant is individual.
* Insert words "to become" if debt is not yet due.
** If in a city court, Insert name of court, UCCA ss. 1403.