Exhibit 10.1

                           AGREEMENT, RELEASE & WAIVER

      THIS AGREEMENT, RELEASE & WAIVER (the "Agreement") is made on this 5th day
of August 2004, by and between Military Resale Group, Inc., a New York
corporation (hereinafter "the Company") and Ed Whelan (hereinafter "Executive").

      1. Representations of Executive.

            Executive hereby acknowledges that:

            (a) I received a copy of this Agreement from the Company on the 5th
day of August 2004.

            (b) The terms of this Agreement are a result of discussions and/or
negotiations between me and/or my attorney, and the Company and/or its attorney.

            (c) The Company hereby advises me to consult legal counsel before
entering into this Agreement.

            (d) I have thoroughly read and reviewed this entire Agreement, and I
fully understand its meaning and effect.

            (e) I am not entitled to the Consideration for Release recited in
Paragraph 4 of this Agreement except for the fact that I have signed this
Agreement.

            (f) I have signed this Agreement after having been given at least
twenty-one (21) days to consult legal counsel and to consider the language,
meaning and effect of this Agreement.

            (g) I have executed this Agreement voluntarily and without any
threat, intimidation, coercion, force or other type of pressure by the Company
or any other person.

            (h) I have not transferred or assigned any claim I may have against
the Company, as described in Paragraph 2, to any other person or entity.

<PAGE>

      2. Release and Waiver by Executive

      In exchange for the Consideration for Release given to Executive by the
Company, Executive hereby fully, unequivocally, unconditionally and forever
releases and discharges the Company from any and all claims, liabilities,
demands and causes of action of any kind, whether statutory or common law,
whether known or unknown, in contract, tort or otherwise, fixed or contingent,
in law or in equity, in any way arising out of, concerning, or related to,
directly or indirectly, Executive's employment, including, but not limited to,
Executive's separation from employment with the Company. Executive further
expressly waives any rights, which might have accrued prior to the date hereof
against the Company pertaining to or arising from the employment relationship,
including but not limited to his positions as Chairman of the Board of Directors
and Chief Executive Officer. Further, Executive agrees not to seek reemployment
or reinstatement of employment in any capacity with the Company, including as a
Director on the Board of Directors. Without limiting the generality of the
foregoing, this release and waiver includes, but is not limited to, a release
and waiver of claims arising under the Title VII of the Civil Rights Act of 1964
and all amendments thereto, the Age Discrimination in Employment Act, and all
amendments thereto, the Americans with Disabilities Act, and all amendments
thereto, the Family and Medical Leave Act, and all amendments thereto, and the
Employee Retirement Income Security Act, and all amendments thereto, the Worker
Adjustment Retraining Notification Act, and all amendments thereto, the Fair
Credit Reporting Act and all amendments thereto, and any other constitutional,
federal, state and local laws, or theories governing the employment relationship
and all claims growing out of any legal restrictions on the Company's rights to
terminate its employees.

      3. Compensation.

      Executive acknowledges his voluntary resignation, as both an Employee of
the Company and from its Board of Directors, effective as of August 2, 2004.
Executive agrees the Company has hereby paid all wages, commissions, bonuses,
vacation, expenses, severance pay in lieu of notice, car allowance and every
other benefit and compensation to which he is entitled, except for any vested
benefits under any Company welfare, benefit or retirement plans, or stock option
or other plans, if any.

      4. Consideration for Release.

      In consideration of the release and waiver set forth in Paragraph 2 of
this Agreement, and in reliance on the Representation and Warranties set forth
in Paragraph 8 below, the Company agrees to pay to Executive for a period of six
(6) months, for the period beginning on September 1, 2004 and ending on February
28, 2005, such payment shall be made in restricted shares of the Company's
common stock according to same formula by which Executive was paid in restricted
shares of common stock prior to his resignation from the Company and the Board,
to wit: a number of shares determined by dividing $12,000 by the product of 80%
and the average low price of the Company's common stock during such period. Such
monthly stock issuance shall be made in arrears, i.e. following the last
calendar day of each of the six (6) aforementioned months.

      In further consideration of the release and waiver set forth in Paragraph
2 of this Agreement, and in reliance on the Representation and Warranties set
forth in Paragraph 8 below, the Company will reimburse Executive for the cost of
healthcare continuation under COBRA (upon presentation by Executive of
reasonable documentation of prior payment) beginning on September 1, 2004
through and including February 28, 2005.


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<PAGE>

      In further consideration of the release and waiver set forth in Paragraph
2 of this Agreement, and in reliance on the Representation and Warranties set
forth in Paragraph 8 below, the Company further agrees that it shall reimburse
Executive for an amount not to exceed $85,000 for expenses incurred by Executive
directly in connection with his role and obligations as CEO and Chairman, such
amount to be finally determined by mutual agreement of the parties or as set
forth in the dispute resolutions procedures set forth in Paragraph 18. Any such
expense reimbursement shall be payable by the Company to Executive in equal
installments over the twenty-four (24) month period beginning on September 30,
2004.

      In further consideration of the release and waiver set forth in Paragraph
2 of this Agreement, and in reliance on the Representation and Warranties set
forth in Paragraph 8 below, the Company further agrees to issues, within six (6)
months following the execution of this Agreement, One-Million (1,000,000)
two-year warrants at a $0.25 strike price, including provisions for the cashless
exercise of such warrants, but subject to the reasonable usual and customary
terms of any such plan or agreement pursuant to which such warrants are
authorized or issued.

      In further consideration of the release and waiver set forth in Paragraph
2 of this Agreement, and in reliance on the Representation and Warranties set
forth in Paragraph 8 below, the Company further agrees to issues, within six (6)
months following the execution of this Agreement, One-Million (1,000,000)
two-year warrants at a $5.00 strike price, including provisions for the cashless
exercise of such warrants, but subject to the reasonable usual and customary
terms of any such plan or agreement pursuant to which such warrants are
authorized or issued.

      It is specifically understood that the payment of the consideration under
this section does not constitute an admission of any wrongdoing on the Company's
part and is in addition to the compensation to which Executive was entitled and
for which he has been paid, as reflected in Paragraph 3.

      5. Confidentiality.

      Executive hereby agrees to keep the existence and terms of this Agreement
confidential and to refrain from revealing any of its terms and conditions to
anyone other than Executive's spouse, legal counsel, accountant, tax advisor or
as required by law or as agreed in writing by the Company in connection with a
legal process. Further, Executive hereby agrees not to disclose Confidential or
Proprietary Information of the Company and to refrain from disclosing to or
sharing such information with others who might gain from such knowledge. For the
purpose of this Agreement, Confidential and Proprietary Information shall mean
any confidential, financial, marketing, business, technical, or other
information, including specifically but not exclusively, information which
Executive prepared, caused to be prepared, or received in connection with his
employment with the Company, such as merger or acquisition opportunities or
prospects, trade, technical or technological secrets, customer or vendor lists,
price lists, details of organization or business affairs; computer hardware
configurations and software designs and programs, business plans, business
strategies, software, software evaluations, trade secrets, personnel
information, marketing methods and techniques, and any of the above-recited
information as it relates to the Company, any subsidiaries, predecessors,
successors or assigns. For purposes of this Agreement, "Confidential and
Proprietary Information" specifically excludes information, which is generally
known or becomes known in the industry (except when known based upon Executive's
breach of this Agreement). As Executive and the Company agree and mutually
acknowledge that any breach of this section would result in damage to the
Company, and such damage would necessarily be of a type which is difficult to
measure or quantify, Executive and the Company hereby agree that for each event
of a violation of this section of the Agreement the Company shall be entitled to
recover liquidated damages in the amount of $12,500 and consequential damages,
including attorney's fees and costs, from Executive.


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<PAGE>

      6. Non-Competition.

            (a) Executive acknowledges that during his employment with the
Company he has enjoyed a position of trust and confidence that gave him complete
access to Confidential and Proprietary Information, which has value to the
Company.

            (b) Executive acknowledges that his service as Chairman of the Board
of Directors and Chief Executive Officer of the Company means that he comes
within the statutory exception contained in subsection 2(d) of C.R.S.
ss.8-2-113, which allows for non-competition agreements between employers and
executives, managers, officers and professional staff. Being cognizant of his
virtually unlimited access to Confidential and Proprietary Information, which is
of value to the Company, Executive also acknowledges that his subsequent
employment by a competitor would be more likely than not to result in the
inevitable disclosure of the trade secrets of the Company.

            (c) Executive accordingly agrees that for a period of thirty-six
(36) months beginning on August 2, 2004 Executive shall not directly or
indirectly engage in competition with the Company by taking any of the following
actions:

                  (i) Owning, managing, operating, joining, controlling or
providing services to (or participating in the ownership, management, operation
or control of, other than as a holder of less than 5% of the shares of a public
company), aiding or assisting any corporation, association, partnership, limited
liability company, proprietorship or other business entity, regardless of form,
that at any location in the United engages in the business in which the Company
is engaged; or,

                  (ii) Serving as an employee, agent, consultant, officer,
director, advisor, or creditor of any such business entity or enterprise
described in (i) above.

            (d) Executive accordingly agrees that for the term of this Agreement
and for a period of thirty-six (36) months beginning on August 2, 2004 that
Executive shall not directly or indirectly engage in competition with the
Company by taking any of the following actions:


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<PAGE>

      Inducing or attempting to induce any customer, supplier or business
relation of the Company to cease doing business with the Company or in any other
way interfering with the relationship between any customer, supplier or business
relation and the Company.

            (e) Executive acknowledges that the restrictions set forth above are
reasonable and appropriate to protect the Confidential and Proprietary
Information of value to the Company, which would be inevitably disclosed if he
competed, directly or indirectly, as set forth above. If however, a court
determines that any of the foregoing restrictions are unreasonable in duration,
scope or area of restriction, then Executive and the Company agree that the
restrictions shall be applied only to the activities and territory, and only for
the period of time, that the court determines reasonable in light of all
then-existing circumstances.

      7. Non-Solicitation of Employees.

      The Executive agrees that for the period of thirty-six (36) months
following his separation from employment for any reason he shall not directly or
indirectly solicit or recruit, or attempt to solicit or recruit, or hire, any
employee of the Company who is employed by the Company or was employed by the
Company at any time during the last year of the Executive's employment with the
Company.

      8. Representations and Warranties of Executive

            (a) The Company's financial statements and notes, attached hereto as
Exhibit A, fairly present the financial condition and the results of operations,
changes in stockholders' equity and cash flow of the Company as at the
respective dates of and for the periods referred to in such financial
statements. Company maintains accurate books and records reflecting its assets
and liabilities and maintains proper and adequate internal accounting controls
which provide assurance that (i) transactions are executed with management's
authorization; (ii) transactions are recorded as necessary to permit preparation
of the consolidated financial statements of the Company and to maintain
accountability for the Company's consolidated assets; (iii) access to the
Company's assets is permitted only in accordance with management's
authorization; (iv) the reporting of the Company's assets is compared with
existing assets at regular intervals; and (v) accounts, notes and other
receivables and inventory are recorded accurately, and properly and adequate
procedures are implemented to effect the collection thereof on a current and
timely basis.

            (b) Exhibit B provides an accurate and complete breakdown and aging
of all accounts receivable, notes receivable, related contra-accounts, and other
receivables of Company as of the respective dates of and for the periods
referred to on such Exhibit B. Except as set forth in Exhibit B, all existing
accounts receivable of the Company have not yet been collected, represent valid
obligations of customers of Company arising from bona fide transactions entered
into in the ordinary course of business; and are current and will be collected
in full (without any counterclaim or setoff) on or before December 31, 2004 (net
of an allowance for uncollectible accounts also as shown on Exhibit B.


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<PAGE>

            (c) Exhibit C provides an accurate and complete breakdown and aging
of all accounts payable, related contra-accounts, notes payable and other
payables of Company as of the respective dates of and for the periods referred
to on such Exhibit C. Except as set forth in Exhibit C, all existing accounts
payable of the Company have not yet been paid, represent valid obligations of
the Company arising from bona fide transactions entered into in the ordinary
course of business.

            (d) Neither this Agreement nor any of the Company's filings with the
SEC contains any untrue statement of fact; and neither this Agreement nor any of
the Company's filings with the SEC omits to state any fact necessary to make any
of the representations, warranties or other statements or information contained
therein not misleading. All of the information set forth in this Agreement and
the Company's filings with the SEC, and all other information regarding the
Company and its business, condition, assets, liabilities, operations, financial
performance, net income and prospects that has been furnished to the SEC or any
of its representatives by or on behalf of the Company is accurate and complete
in all respects.

      9. Return of Company Property. Executive represents and warrants that he
has returned any and all property belonging to the Company including, but not
limited to, any and all documents or other media containing Confidential or
Proprietary Information, as well as any training or other reference manuals,
Company vehicle, telephone and gas cards or other Company credit cards, keys,
computers, fax machines, pagers or the like. Executive represents and warrants
that he will keep the laptop computer, blackberry and flat-screen display in his
possession, but shall deliver to the undersigned Company representative all
Company-related data contained therein. In return, the Company shall withhold
from the cash consideration in Section 4 above an amount equal to 50% of the
original purchase price of such equipment as determined by the Company.

      10. Mutual Non-Disparagement The parties agree that neither shall make any
disclosure, issue any public statements or otherwise cause to be disclosed any
information which is designed, intended or might reasonably be anticipated to
have a negative effect on the other party, or in the case of Employer, including
but not limited to any of its respective directors, officers or employees.
Except in such disclosures as may be required by law, neither the Company nor
Executive shall issue any printed announcement or press release concerning
Executive's departure without the other party's prior consent, which consent
shall not be unreasonably withheld.

      11. Revocation.


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<PAGE>

      Executive understands that he may revoke this Agreement at any time prior
to the expiration of seven (7) days following the execution and acceptance of
this Agreement, by delivering written notice of the revocation of this Agreement
to Military Resale Group, Inc. 2180 Executive Circlet, Colorado Springs, Co.
80906-4100, Attention: Lee Brukman, so the Company receives it not later than
such expiration date.

      12. Severability.

      If any provision of this Agreement is declared by any court of competent
jurisdiction to be invalid for any reason, such invalidity shall not affect the
remaining provisions of this Agreement, which shall be fully severable and given
full force and effect.

      13. Parties.

      The parties agree that any reference to "Military Resale Group, Inc." or
"the Company" in this Agreement shall also be a reference to Military Resale
Group, Inc. including its officers, directors, shareholders, employees, agents,
subsidiaries, affiliates, predecessors, successors and assigns, and that every
reference to "Executive" shall also be a reference to his heirs, personal or
legal representatives, executors, successors and assigns.

      14. Covenant Not to Sue

      Executive promises and covenant that he will not file any lawsuit against
the Company based upon any clam covered under the foregoing release, except that
Executive is not prohibited from bringing any claim under the Age Discrimination
in Employment Act, as amended, wherein Executive seeks to challenge whether he
knowingly and voluntarily entered into this Agreement.

      15. Continued Cooperation.

      Executive agrees to make himself reasonably available to the Company to
furnish full and truthful information concerning any events that took place
during his employment, and to furnish full and truthful consultation concerning
any potential or actual litigation relating to the Company. Should Executive be
contacted by any person concerning any pending or potential litigation relating
to the Company, Executive shall immediately notify the Company's Chief Executive
Officer in writing.

      16. Choice of Law/Venue.

      The parties agree that the laws of the state of Colorado shall govern this
Agreement and any action to enforce, subject when appropriate to the provisions
of Paragraph 18 (Dispute Resolution), shall be brought in a court of competent
jurisdiction in Colorado.

      17. Full Agreement.

      The parties agree that this is the entire Agreement between Executive and
the Company and that neither party has relied on any representation or
statement, written or oral, which is not set forth in this document. This
Agreement supercedes all previous agreements entered into by and between the
Company and Executive, and any pre-existing or other agreements, except those
expressly referenced in Paragraph 3 above, if any, shall be terminated, deemed
null and void.


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<PAGE>

      18. Dispute Resolution Procedures.

      In the event that the parties are unable to agree, on or before September
30, 2004, on the amount of expenses to be reimbursed to Executive pursuant to
subparagraph 3 of Paragraph 4, then either party may refer the dispute to
arbitration, to be held in Colorado Springs, Colorado, pursuant to the rules of
the American Arbitration Association.

Military Resale Group, Inc.

By: /s/ Ethan Hokit
   -------------------
Name: Ethan Hokit
      -------------------
Title: President
       -------------------
Date:
     ---------------------

Executive:

/s/ Edward Whelan
-----------------
Ed Whelan


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