|
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.
4.
Acknowledgment
by CAMOFI. Upon MHII’s
satisfaction
|
