Unassociated Document


     

    INDEMNITY
      AND GUARANTY AGREEMENT

     

    THIS
      INDEMNITY AND GUARANTY AGREEMENT (this "Agreement"),
      is made
      as of the 25th day of August, 2007, by Ezra Green ("Green"), whose address
      is 757 Harrisson Street, West Hempstead, NY 11552, and Clar Skies Group, Inc.
      ,
      a New York corporation whose
      address is 757 Harrisson Street, West Hempstead, New York (“Clear Skies”). Clear
      Skies and Green being referred to herein collectively as "Indemnitor Parties"
      and individually as "Indemnitor"), jointly and severally, in favor of Quixotic
      Systems, Inc. , a New York corporation ("Quixotic"),
      whose
      address is 90 Bedford Street, Suite A, New York, New York 10014. 

     

    WITNESSETH:

    


    WHEREAS,
      Alpha Energy has commenced a lawsuit against Quixotic titled Alpha Energy,
      a
      division of Alpha Technologies Services, Inc. v. Quixotic Systems, Inc. , United
      States District Court for the Western District of Washington Case No.
      2:07-CV-1130 MJB (the "Lawsuit"),
      which
      is presently pending. In the Lawsuit, Alpha has asserted claims for breach
      of
      contract and unjust enrichment in relation to the failure to pay for certain
      goods (the "Goods")
      ordered
      by Quixotic from Alpha; and

     

    WHEREAS,
      with limited exception, Quixotic ordered the goods on behalf of Clear Skies
      and
      these goods were shipped to or as directed by Clear Skies; and

     

    WHEREAS,
      in the interest of avoiding the expense, uncertainty and delay of further
      litigation, Alpha Energy, Alpha Technologies Services, Inc. as well as all
      other
      Alpha Group entities ("Alpha")
      Clear
      Skies and Quixotic have agreed to compromise and settle the Lawsuit and all
      claims raised therein pursuant to a Settlement Agreement and Mutual Release
      dated as of the date hereof (the "Settlement
      Agreement"),
      the
      purpose of which is to achieve a full and complete settlement and compromise
      of
      all claims asserted in the Lawsuit; and

     

    WHEREAS,
      as a condition to Quixotic entering into the Settlement Agreement and
      refraining from taking legal action against Clear Skies in connection with
      the
      goods ordered
      by
      Quixotic on behalf of Clear Skies referred to above, Quixotic has required
      that
      Indemnitor Parties indemnify Quixotic from and against and guarantee payment
      to
      or on behalf of Quixotic of
      all
      liability or obligations incurred or that may be incurred by Quixotic in
      connection with the
      Lawsuit
      and the Settlement Agreement, any non-performance by Clear Skies under the
      Settlement
      Agreement and all legal fees and other costs incurred by Quixotic in connection
      with
      the
      Lawsuit, negotiating and entering into the Settlement Agreement, and enforcing
      any of Quixotic's rights under the Settlement Agreement or hereunder;
      and

     

    WHEREAS,
      Green is the founder, a principal equity holder, officer and director of Clear
      Skies and the entering into the Settlement Agreement by Clear Skies and this
      Agreement by each Indemnitor is of substantial benefit to each Indemnitor.
      

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    NOW,
      THEREFORE, to induce Quixotic to enter into the Settlement Agreement and refrain
      from taking legal action against the Indemnitor Parties Skies and in
      consideration of the foregoing premises and for other good and valuable
      consideration, the receipt and sufficiency of which are hereby acknowledged,
      Indemnitor Parties hereby covenant and agree for the benefit of Quixotic, as
      follows:

     

    1. Indemnity
      and Guaranty. 

     

    (a) Indemnitor
      Parties hereby assume liability for, hereby guarantee payment to or on behalf
      of
      Quixotic, hereby agree to pay, protect, defend (at Quixotic's option) and save
      Quixotic harmless from and against, and hereby indemnify Quixotic from and
      against any and all liabilities, obligations, losses, damages, costs and
      expenses (including, without limitation, attorneys' fees, including the
      attorneys' fees incurred by Quixotic in connection with the Lawsuit and the
      claims made therein, the negotiation of the Settlement Agreement and the
      preparation and negotiation of the this Agreement), causes of action, suits,
      claims, demands and judgments of any nature or description whatsoever
      (collectively, "Costs")
      which
      may at any time be imposed upon, incurred by or awarded against Quixotic as
      a
      result of the Lawsuit and the claims made therein, the Settlement Agreement
      and
      any failure by Clear Skies to timely make any and all payments to Alpha as
      may
      be required under the Settlement Agreement, it being acknowledged and agreed
      to
      by the Indemnitor Parties that, notwithstanding anything to the contrary
      contained in the Settlement Agreement, as between Clear Skies and Quixotic,
      Clear Skies is liable for all amounts payable under the Settlement Agreement,
      and shall timely pay any and all such amounts as and when due. 

     

    (b) This
      is a
      guaranty of payment and performance and not of collection. The liability of
      Indemnitor Parties under this Agreement shall be direct and immediate and not
      conditional or contingent upon the pursuit of any remedies against any
      other
      person. Indemnitor Parties waive any right to require that an action be brought
      against any other person. In the event, on account of the Bankruptcy Reform
      Act
      of 1978, as amended, or any other debtor relief law (whether statutory, common
      law, case law or otherwise) of any jurisdiction whatsoever, now or hereafter
      in
      effect, which may be or become applicable, either Indemnitor Party shall be
      relieved of or fail to incur any debt, obligation or liability as provided
      in
      the Settlement Agreement, the other Indemnitor Party shall nevertheless be
      fully
      liable
      therefor. In the event of a default under the Settlement Agreement, Quixotic
      shall have the right to enforce its rights, powers and remedies thereunder
      or
      hereunder, in any order, and all rights, powers and remedies available to
      Quixotic in such event shall be non-exclusive and cumulative of all other
      rights, powers and remedies provided thereunder or hereunder or by law or in
      equity. If the indebtedness and obligations guaranteed hereby are partially
      paid
      or discharged by reason of the exercise of any of the remedies available to
      Quixotic, this Agreement shall nevertheless remain in
      full
      force
      and
      effect, and Indemnitor Parties shall remain liable for all remaining
      indebtedness and obligations guaranteed hereby. 

     

    
      
        
        

      

      
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    2. Indemnification
      Procedures.
      

     

    (a) If
      any
      claim or action shall be brought against Quixotic based upon any of the matters
      for which Quixotic is indemnified hereunder, Quixotic shall notify Indemnitor
      Parties in writing thereof and, at Quixotic's option, Indemnitor Parties shall
      promptly assume the defense thereof, including, without limitation, the
      employment of counsel acceptable to Quixotic and the negotiation of any
      settlement; provided, however, that any failure of Quixotic to notify any
      Indemnitor Parties of such matter shall not impair or reduce the obligations
      of
      Indemnitor Parties hereunder. Quixotic shall have the right, at the expense
      of
      Indemnitor Parties (which expense shall be included in Costs), to employ
      separate counsel in connection with any such claim or action and to participate
      in the defense thereof. In the event Indemnitor Parties shall fail, upon the
      request of Quixotic, to discharge or undertake to defend Quixotic against any
      claim, loss or liability for which Quixotic is indemnified hereunder, Quixotic
      may, at its sole option and election, defend or settle such claim, loss or
      liability. Alternatively, Quixotic may, at its sole option and election, defend
      or settle such claim, loss or liability. The liability of Indemnitor Parties
      to
      Quixotic hereunder shall be conclusively established by settlement entered
      into
      by Quixotic, provided such settlement is made in good faith, the amount of
      such
      liability to include both the settlement consideration and the costs and
      expenses, including, without limitation, attorneys' fees and disbursements,
      incurred by Quixotic in effecting such settlement. In such event, such
      settlement consideration, costs and expenses shall be included in the Costs
      and
      Indemnitor Parties shall pay the same as hereinafter provided. Quixotic's good
      faith in any such settlement shall be conclusively established if the settlement
      is made on the advice of independent legal counsel for Quixotic.

     

    (b) Indemnitor
      Parties shall not, without the prior written consent of Quixotic: (i) settle
      or
      compromise any action, suit, proceeding or claim or consent to the entry of
      any
      judgment that does not include as an unconditional term thereof the delivery
      by
      the claimant or plaintiff to Quixotic of a full and complete written release
      of
      Quixotic (in form, scope and substance satisfactory to Quixotic in its sole
      discretion) from all liability in respect of such action, suit, proceeding
      or
      claim and a dismissal with prejudice of such action, suit, proceeding or claim;
      or (ii) settle or compromise any action, suit, proceeding or claim in any manner
      that may adversely affect Quixotic or obligate Quixotic to pay any sum or
      perform any obligation as determined by Quixotic in its sole
      discretion.

     

    (c) All
      Costs
      shall be immediately reimbursable to Quixotic when and as incurred and, in
      the
      event of any litigation, claim or other proceeding, without any requirement
      of
      waiting for the ultimate outcome of such litigation, claim or other proceeding,
      and Indemnitor Parties shall pay to Quixotic any and all Costs within ten (10)
      days after written notice from Quixotic itemizing the amounts thereof incurred
      to the date of such notice. In addition to any other remedy available for the
      failure of Indemnitor Parties to periodically pay such Costs, such Costs, if
      not
      paid within said ten-day period, shall bear interest at 9% per
      annum.

     

    3. Reinstatement
      of Obligations.
      If at
      any time all or any part of any payment made by any Indemnitor or received
      by
      Quixotic from any Indemnitor under or with respect to this Agreement is or
      must
      be rescinded or returned for any reason whatsoever (including, but not limited
      to, the insolvency, bankruptcy or reorganization of such Indemnitor), then
      the
      obligations of Indemnitor Parties hereunder shall, to the extent of the payment
      rescinded or returned, be deemed to have continued in existence, notwithstanding
      such previous payment made by any Indemnitor, or receipt of payment by Quixotic,
      and the obligations of Indemnitor Parties hereunder shall continue to be
      effective or be reinstated, as the case may be, as to such payment, all as
      though such previous payment by such Indemnitor had never been made.


     

    
      
        
        

      

      
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    4. Waivers
      by Indemnitor. 
      To the
      extent permitted by law, Indemnitor Parties each hereby waive and agree not
      to
      assert or take advantage of:

     

    (a) Any
      right
      to require Quixotic to proceed against any other person or to proceed against
      or
      exhaust any security held by Quixotic at any time or to pursue any other remedy
      in Quixotic's power or under any other agreement before proceeding against
      Indemnitor Parties (or any of them) hereunder;

     

    (b) The
      defense of the statute of limitations in any action hereunder;

     

    (c) Any
      defense that may arise by reason of the incapacity, lack of authority, death
      or
      disability of any other person or persons or the failure of Quixotic to file
      or
      enforce a claim against the estate (in administration, bankruptcy or any other
      proceeding) of any other person or persons;

     

    (d) Demand,
      presentment for payment, notice of nonpayment, protest, notice of protest and
      all other notices of any kind, or the lack of any thereof, including, without
      limiting the generality of the foregoing, notice of the existence of any action
      or non-action on the part of any endorser or creditor of Indemnitor Parties
      (or
      any of them) or on the part of any other person or entity whomsoever under
      this
      or any other instrument;

     

    (e) Any
      defense based upon an election of remedies by Quixotic; Indemnitor;

     

    (f) Any
      right
      or claim of right to cause a marshalling of the assets of any
      Indemnitor;

     

    (g) Any
      principle or provision of law, statutory or otherwise, which is or might be
      in
      conflict with the terms and provisions of this Agreement;

     

    (h) Any
      invalidity, irregularity or unenforceability, in whole or in part, of this
      Agreement or the Settlement Agreement;

     

    (i) Any
      deficiencies in the ability of Quixotic to collect or to obtain performance
      from
      any persons now or hereafter liable for the payment and performance of any
      obligation hereby guaranteed;

     

    (j) An
      assertion or claim that the automatic stay provided by 11 U.S.C. §362 or any
      other stay provided under any other debtor relief law (whether statutory, common
      law, case law or otherwise) of any jurisdiction whatsoever, now or hereafter
      in
      effect, which may be or become applicable, shall operate or be interpreted
      to
      stay, interdict, condition, reduce or inhibit the ability of Quixotic to enforce
      any of its rights, whether now or hereafter required, which Quixotic may have
      against any Indemnitor;

     

    (k) Any
      modifications of the Settlement Agreement or any obligation of Clear Skies
      pursuant thereto by operation of law or by action of any court, whether pursuant
      to the Bankruptcy Reform Act of 1978, as amended, or any other debtor relief
      law
      (whether statutory, common law, case law or otherwise) of any jurisdiction
      whatsoever, now or hereafter in effect, or otherwise; and

     

    (l) Any
      action, occurrence, event or matter consented to by Indemnitor Parties under
      Section 5(e) hereof, under any other provision hereof, or otherwise.


     

    
      
        
        

      

      
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    5. General
      Provisions.
      

     

    (a) Fully
      Recourse.
      All of
      the terms and provisions of this Agreement are recourse obligations of
      Indemnitor Parties and not restricted by any limitation on personal liability.
      

     

    (b) Unsecured
      Obligations.
      Indemnitor Parties hereby acknowledge that that Quixotic would not enter into
      the Settlement agreement and refrain from taking action against the Indemnitor
      Parties but for the unsecured personal liability undertaken by Indemnitor
      Parties herein. Indemnitor Parties further hereby acknowledge that even though
      the warranties, covenants or agreements of Indemnitor Parties contained herein
      may be identical or substantially similar to covenants or agreements of Clear
      Skies set forth in the Settlement Agreement, it being the intent of Quixotic
      to
      create separate obligations of Indemnitor Parties hereunder which can be
      enforced against Indemnitor Parties without regard to the Settlement
      Agreement.

     

    (c) No
      Subrogation; No Recourse Against Quixotic.
      In
      connection with the foregoing, Indemnitor Parties expressly waive any and all
      rights of subrogation to Quixotic against Alpha, and Indemnitor Parties hereby
      waive any rights to enforce any remedy which Quixotic may have against Alpha.
      Indemnitor Parties shall not have any right of recourse against Quixotic by
      reason of any action Quixotic may take or omit to take under the provisions
      of
      this Agreement or under the provisions of the Settlement Agreement.


     

    (d) Rights
      Cumulative; Payments.
      Quixotic's rights under this Agreement shall be in addition to all rights of
      Quixotic under the Settlement Agreement or applicable law or in equity. FURTHER,
      PAYMENTS MADE BY INDEMNITOR PARTIES UNDER THIS AGREEMENT SHALL NOT REDUCE IN
      ANY
      RESPECT THEIR OBLIGATIONS AND LIABILITIES UNDER THE SETTLEMENT AGREEMENT.


     

    (e) No
      Limitation on Liability.
      No
      action which Quixotic shall take or fail to take in connection with the Lawsuit,
      the Settlement Agreement or hereunder, nor any course or dealing with Alpha
      or
      any other person, shall limit, impair or release Indemnitor Parties' obligations
      hereunder, affect this Agreement in any way or afford any Indemnitor any
      recourse against Quixotic. Nothing contained in this Section shall be construed
      to require Quixotic to take or refrain from taking any action referred to
      herein. 

     

    (f) Entire
      Agreement; Amendment; Severability.
      This
      Agreement contains the entire agreement between the parties respecting the
      matters herein set forth and supersedes all prior agreements, whether written
      or
      oral, between the parties respecting such matters. Any amendments or
      modifications hereto, in order to be effective, shall be in writing and executed
      by the parties hereto. A determination that any provision of this Agreement
      is
      unenforceable or invalid shall not affect the enforceability or validity of
      any
      other provision, and any determination that the application of any provision
      of
      this Agreement to any person or circumstance is illegal or unenforceable shall
      not affect the enforceability or validity of such provision as it may apply
      to
      any other persons or circumstances.

     

    
      
        
        

      

      
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    (g) Governing
      Law; Binding Effect; Waiver of Acceptance.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of New York, with out regard to conflicts of laws principles. This
      Agreement shall bind Indemnitor Parties and the heirs, personal representatives,
      successors and assigns of Indemnitor Parties and shall inure to the benefit
      of
      Quixotic and the officers, directors, shareholders, agents and employees of
      Quixotic and their respective heirs, successors and assigns. Notwithstanding
      the
      foregoing, no Indemnitor shall assign any of its rights or obligations under
      this Agreement without the prior written consent of Quixotic, which consent
      may
      be withheld by Quixotic in its sole discretion. Indemnitor Parties hereby waive
      any acceptance of this Agreement by Quixotic, and this Agreement shall
      immediately be binding upon Indemnitor Parties.

     

    (h) Notice.
      All
      notices, demands, requests or other communications to be sent by one party
      to
      the other hereunder or required by law shall be in writing and shall be deemed
      to have been validly given or served by delivery of the same in person to the
      intended addressee, or by depositing the same with Federal Express or another
      reputable private courier service
      for next business day delivery to the intended addressee at its address set
      forth on the first
      page of
      this Agreement or at such other address as may be designated by such party
      as
      herein provided, or by depositing the same in the United States mail, postage
      prepaid, registered or certified mail, return receipt requested, addressed
      to
      the intended addressee at its address set forth on the first page of this
      Agreement or at such other address as may be designated by such party as herein
      provided. All notices, demands and requests shall be effective upon such
      personal delivery, or one (1) business day after being deposited with the
      private courier service, or three (3) business days after being deposited in
      the
      United States mail as required above. Rejection or other refusal to accept
      or
      the inability to deliver because of changed address of which no notice was
      given
      as herein required shall be deemed to be receipt of the notice, demand or
      request sent. By giving to the other party hereto at least fifteen (15) days'
      prior written notice thereof in accordance with the provisions hereof, the
      parties hereto shall have the right from time to time to change their respective
      addresses and each shall have the right to specify as its address any other
      address within the United States of America. 

     

    (i) No
      Waiver; Time of Essence; Business Day.
      The
      failure of any party hereto to enforce any right or remedy hereunder, or to
      promptly enforce any such right or remedy, shall not constitute a waiver thereof
      nor give rise to any estoppel against such party nor excuse any of the parties
      hereto from their respective obligations hereunder. Any waiver of such right
      or
      remedy must be in writing and signed by the party to be bound. This Agreement
      is
      subject to enforcement at law or in equity, including actions for damages or
      specific performance.

     

    (j) Captions
      for Convenience; Definition.
      The
      captions and headings of the sections and paragraphs of this Agreement are
      for
      convenience of reference only and shall not be construed in interpreting the
      provisions hereof. As used in this Agreement, unless otherwise expressly
      provided to the contrary, the word "person" shall include natural persons and
      all entities of any type, kind, nature and description and shall also include
      common law trusts.

     

    (k) Attorneys'
      Fees.
      In the
      event it is necessary for Quixotic to retain the services of an attorney or
      any
      other consultants in order to enforce this Agreement, or any portion thereof,
      Indemnitor Parties agree jointly and severally to pay to Quixotic any and all
      costs and expenses, including, without limitation, attorneys' fees, incurred
      by
      Quixotic as a result thereof and such costs, fees and expenses shall be included
      in Costs. 

     

    
      
        
        

      

      
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    (l) Successive
      Actions.
      A
      separate right of action hereunder shall arise each time Quixotic acquires
      knowledge of any matter indemnified or guaranteed by Indemnitor under this
      Agreement. Separate and successive actions may be brought hereunder to enforce
      any of the provisions hereof at any time and from time to time. No action
      hereunder shall preclude any subsequent action, and Indemnitor Parties hereby
      waive and covenant not to assert any defense in the nature of splitting of
      causes of action or merger of judgments. 

     

    (m) SUBMISSION
      TO JURISDICTION; WAIVER OF JURY

     

    (1) INDEMNITOR
      PARTIES, TO THE FULL EXTENT PERMITTED BY LAW, HEREBY KNOWINGLY, INTENTIONALLY
      AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, (A) SUBMITS
      TO
      PERSONAL JURISDICTION IN THE STATE OF NEW YORK OVER ANY SUIT, ACTION OR
      PROCEEDING BY ANY PERSON ARISING FROM OR RELATING TO THIS AGREEMENT, (B) AGREES
      THAT ANY SUCH ACTION, SUIT OR PROCEEDING MAY BE BROUGHT IN ANY STATE OR FEDERAL
      COURT OF COMPETENT JURISDICTION SITTING IN NEW YORK COUNTY, NEW YORK, (C)
      SUBMITS TO THE JURISDICTION OF SUCH COURTS, AND, (D) AGREES THAT NO INDEMNITOR
      WILL BRING ANY ACTION, SUIT OR PROCEEDING IN ANY OTHER FORUM. INDEMNITOR PARTIES
      FURTHER CONSENT AND AGREE TO SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER LEGAL
      PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY REGISTERED OR CERTIFIED U.S.
      MAIL, POSTAGE PREPAID, TO THE INDEMNITOR PARTIES AT THE ADDRESS FOR NOTICES
      DESCRIBED IN SECTION 5(h) HEREOF, AND CONSENTS AND AGREES THAT SUCH SERVICE
      SHALL CONSTITUTE IN EVERY RESPECT VALID AND EFFECTIVE SERVICE (BUT NOTHING
      HEREIN SHALL AFFECT THE VALIDITY OR EFFECTIVENESS OF PROCESS SERVED IN ANY
      OTHER
      MANNER PERMITTED BY LAW). 

     

    (2) INDEMVINITOR
      PARTIES, TO THE FULL EXTENT PERMITTED BY LAW, HEREBY KNOWINGLY, INTENTIONALLY
      AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, WAIVE,
      RELINQUISH AND FOREVER FORGOES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
      PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO THIS AGREEMENT
      OR ANY CONDUCT, ACT OR OMISSION OF QUIXOTIC OR INDEMNITOR PARTIES, OR ANY OF
      THEIR DIRECTORS, OFFICERS, PARTNERS, MEMBERS, EMPLOYEES, AGENTS OR ATTORNEYS,
      OR
      ANY OTHER PERSONS OR ENTITIES AFFILIATED WITH QUIXOTIC OR ANY INDEMNITOR, IN
      EACH OR THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.
      

     

    (n) Joint
      and Several Liability.
      Notwithstanding anything to the contrary herein, the representations,
      warranties, covenants, agreements and obligations made and undertaken by each
      Indemnitor herein, shall be joint and several. 

     

    
      
        
        

      

      
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    (o) Counterparts.
      This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      effective only upon delivery and thereafter shall be deemed an original, and
      all
      of which shall be taken to be one and the same instrument, for the same effect
      as if all parties hereto had signed the same signature page. Any signature
      page
      of this Agreement may be detached from any counterpart of this Agreement without
      impairing the legal effect of any signatures thereon and may be attached to
      another counterpart of this Agreement identical in form hereto but having
      attached to it one or more additional signature pages. 

     

     

    [No
      Further Text on this Page; Signature Page Follows]

     

    
      
        
        

      

      
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    IN
      WITNESS WHEREOF, each Indemnitor has executed this first above
      written.

     

     

    
      	/s/
              Ezra
              Green                                             
              
	
              EZRA
                GREEN, an individual

            


    

    
 

    
      	
              CLEAR
                SKIES GROUP, INC.

            
	 	 
	
              By:

            	/s/
              Ezra
              Green                            
	
              Name:
                Ezra Green

            
	
              Title:

            


    

    


    


    
      	
              Acknowledged
                and Accepted:

            
	 
	
              QUIXOTIC
                SYSTEMS, INC.

            
	 	 
	 	 
	
              By:

            	/s/
              Richard
              Klein                             
              
	
              Name:
                Richard Klein

            
	
              Title:

            


    

     

    
      
        
        

      

      
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