MUTUAL RESTRUCTURING AND SEPARATION AGREEMENT

Exhibit 10.1

MUTUAL RESTRUCTURING AND SEPARATION AGREEMENT

     This Mutual Restructuring and Separation Agreement (this “ Agreement ”) is made and entered into as of May 1, 2007 (the “ Contract Date ”), by and between Charles R. Mollo (“ Employee ” or “ You ”) and Mobility Electronics, Inc., a Delaware corporation (the “ Company ” or “ Employer ”). Employee and the Company are sometimes each referred to herein as a “ Party ” and collectively, as the “ Parties ”. Terms used herein but not otherwise defined shall have the meanings ascribed thereto in the Employment Agreement (as defined below).

WITNESSETH:

      WHEREAS , Employee and the Company are parties to that certain Employment Agreement, dated as of June 1, 2003 (the “ Employment Agreement ”); and

      WHEREAS , Employee and the Company desire to restructure their business relationship as provided herein;

      NOW, THEREFORE , in consideration of the premises and mutual promises herein contained, it is agreed as follows:

     1. Effective June 8, 2007 (the “ Separation Date ”), your employment with the Company (including your offices of Chairman of the Board, Chief Executive Officer and President) is hereby terminated and the Employment Agreement is hereby terminated in its entirety and is of no further force or effect, except that Sections 5, 6, 9 and 10 of the Employment Agreement shall remain in full force and effect. The Parties understand and agree that neither the making of this Agreement nor the fulfillment of any condition or obligation of this Agreement constitutes an admission of any liability or wrongdoing by the Company, Employee, any Company Release (as defined below) or any Employee Releasee (as defined below).

     2. This Agreement supersedes any and all other agreements, written or verbal, which may exist between the Company and Employee concerning Employee’s separation from the Company, including without limitation any representations made to Employee by any executive officer or director of the Company.

     3. Employee Acknowledgments.

          (a) You have been advised by the Company to consult with the attorney of your choice prior to signing this Agreement.

          (b) You have been given a period of at least twenty-one (21) days within which to consider this Agreement.

          (c) You would not be entitled to receive the consideration offered to You and referred to in Section 6 below but for your signing this Agreement.

          (d) You may revoke this Agreement within seven (7) days after the date You sign it by providing written notice of the revocation to the Company no later than the seventh day after You sign it. The written notice of revocation may be mailed to:

               Alternatively, You may fax the written notice of revocation to Joan E. Dawson of Mobility Electronics, Inc. at (480) 477-3551.

               It is understood and agreed that any notice of revocation received by the Company after the expiration of this seven (7) day period shall be null and void.

     4. It is further expressly agreed by the Parties that this Agreement shall not become effective or enforceable and the consideration referred to in Section 6 below will not be paid until the seven (7) day revocation period described in Section 3(d) above has expired. Therefore, it is expressly agreed by the Parties that the “ Effective Date ” of this Agreement is the first day after the date the seven (7) day revocation period has expired.

     5. Employee represents that he has consulted or has had sufficient opportunity to discuss with any person, including the attorney of his choice, all provisions of this Agreement, that he has carefully read and fully understands all the provisions of this Agreement, that he is competent to execute this Agreement, and that he is voluntarily entering into this Agreement of his own free will and accord, without reliance upon any statement or representation of the Company or its representatives.

     6. Provided that Employee does not revoke this Agreement and complies with his obligations hereunder, the Company agrees as follows:

          (a) The Company will pay to Employee an amount equal to: (i) Employee’s current annual salary of $340,080; and (ii) Employee’s maximum bonus for 2007 (which assumes that 100% of the targets were achieved), which amount is $238,056 (collectively, the “ Severance Payout Amount ”). The Severance Payout Amount shall be paid in accordance with the Company’s normal bi-weekly pay periods in twenty-six equal installments of $22,236 (less statutory deductions), commencing on June 22, 2007, and continuing for twenty-five consecutive pay periods thereafter.

          (b) The Parties agree that the Severance Payout Amount includes all of Employee’s accrued and unused paid time off.

          (c) The Company will reimburse Employee for medical and dental benefits, according to those benefits chosen by Employee for continuation under The Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), until June 8, 2008. As of June 8, 2008, Employee may elect to continue COBRA coverage at his own expense. The Company will also continue to provide Employee with coverage under its existing Execu-Care Policy until June 8, 2008.

     7. Effective as of the Separation Date, all restricted stock units granted under that certain Restricted Stock Unit Award Agreement, dated as of January 13, 2005 (the “ Restricted Units Agreement ”), by and between the Company and Employee, are hereby vested. The Company will use its reasonable commercial efforts to issue a stock certificate for the shares underlying the Restricted Units Agreement on June 8, 2007, or as soon as possible thereafter.

     8. Reference is hereby made to that certain Incentive Stock Option Agreement, dated as of December 16, 2003, by and between the Company and Employee (the “ Incentive Stock Option Agreement ”). Effective as of the Separation Date, Sections 2, 3 and 8 of the Incentive Stock Option Agreement are hereby amended to read in their entirety as follows:

          “2. Character of Option . The Option is not an “incentive stock option” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended.”

          “3. Term . The Option will expire on the sixth anniversary of the Date of Grant.”

          “8. Termination . The Option shall terminate on the expiration date set forth in Section 3 above.”

This Agreement shall serve as an amendment to the Incentive Stock Option Agreement reflecting the above amendments.

     9. Reference is hereby made to that certain Non-Qualified Stock Option Agreement, dated as of December 16, 2003, by and between the Company and Employee (the “ Non-Qualified Stock Option Agreement ”). Effective as of the Separation Date, Sections 3 and 8 of the Non-Qualified Stock Option Agreement are hereby amended to read in their entirety as follows:

          “3. Term . The Option will expire on the sixth anniversary of the Date of Grant.”

          “8. Termination . The Option shall terminate on the expiration date set forth in Section 3 above.”

This Agreement shall serve as an amendment to the Non-Qualified Stock Option Agreement reflecting the above amendments.

     10. Except as provided in Section 6(c) above, Employee’s health insurance and all other Company benefits will terminate according to the terms of the plans. This provision is not, however, intended to waive Employee’s rights under COBRA. Employee acknowledges that the Company will provide the COBRA notice, in accordance with federal guidelines, under which Employee may elect continuation of coverage.

     11. Notwithstanding anything in this Agreement to the contrary, the Parties understand that to the extent Employee may have vested rights pursuant to Employer’s group health insurance plans, group life insurance plans, and the 401(k) plan, such rights are excluded from the scope of this Agreement and are not terminated or released by it.