Unassociated Document


    


    SETTLEMENT
      AGREEMENT AND MUTUAL RELEASE

    


    THIS
      SETTLEMENT AGREEMENT AND MUTUAL RELEASE ("Agreement") is entered into
      as
      of the 30th day of August, 2007, by and
      between ALPHA ENERGY ("Alpha"),
      CLEAR
      SKIES GROUP, INC. ("Clear Skies"), and QUIXOTIC SYSTEMS, INC. ("Quixotic").
      For
      the purposes of this Agreement, the term "Alpha" shall be defined to include
      Alpha Energy, Alpha Technologies Services, Inc. as well
      as
      all
      other Alpha Group entities. All of the above referenced entities and individuals
      shall be referred to collectively as the "Parties."

     

    RECITALS

     

    A. Alpha
      has
      commenced a lawsuit against Quixotic titled Alpha
      Energy,
      et al. v. Quixotic
      , Systems, Inc.,
      United
      States District Court for the Western District of Washington Case
      No.
      2:07-CV-01130 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 Quixotic purchased from
      Alpha.
      With limited exception, at the direction of
      Quixotic,
      these goods
      were
      shipped to Clear Skies.

    


    B. In
      the
      interest of avoiding the expense, uncertainty and delay
      of
further
      litigation,
      the
      Parties have agreed to compromise and settle the Lawsuit
      and
      all
      claims raised therein on the terms and conditions set forth below. The purpose
      of this Agreement is to
      achieve
      a
      full and complete settlement and compromise of all claims asserted in the
      Lawsuit.

    


    TERMS AND
      CONDITIONS

    


    1. Quixotic
      and Clear Skies collectively shall pay Alpha, or its assign, the total
sum
      of
      Two Hundred Six Thousand Seven Hundred and Seventy Eight and 00/100 U.S. Dollars
      ($206,778.00) (the "Settlement Amount"). Quixotic and Clear
      Skies
      are
      jointly and severally liable
      for the entire Settlement Amount- In the event of the insolvency, bankruptcy,
      receivership, or any other reorganization of either Clear Skies or Quixotic,
      the
      other entity will
      remain
      liable for the remaining Settlement Amount. Payments of the Settlement Amount
      shall be made in
      accordance
      with the following payment schedule.

    


    
      	 	
              (a)

            	
              Seventy-Five
                Thousand Dollars ($75,000.00) to be paid within 72 hours of the execution
                of this Agreement;

            


    

    


    
      	
            	(b)	
              Beginning
                on September 15, 2007, Quixotic and Clear Skies shall pay to Alpha
                the sum
                of Twenty—Five Thousand Dollars ($25,000) each month for five (5)
                consecutive
                months. The final
                payment of Six
                Thousand Seven Hundred Seventy Eight Dollars
                ($6,778.00) shall be made in the sixth consecutive month. Each of
                these
                payments must be wired to Alpha pursuant to the terms specified in
                section
                (c) below no later than the 15th
                day
                of each month in which the payment is
                due;

            


    

    


    
      	
            	(c)	
              In
                the absence of farther written notice by Alpha or its assignee, payments
                shall be made by wire transfer to the
                following:

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              
                Beneficiary
                  Name

              

            	
              ALPHA
                ENERGY

            
	 	 
	
              Beneficiary
                Address

            	
               

            
	 	 
	
              Account
                No:

            	
               

            
	 	 
	
              ABA
                Routing No:

            	
               

            
	 	 
	
              Swift
                Number

            	
               

            
	 	 
	
              Bank
                and Address:

            	
               

            
	 	
               

            


    

     

    2. Concurrent
      with the execution of this Agreement, Quixotic and Clear Skies will execute
      and
      deliver to counsel for Alpha the Confession of Judgment attached to this
      Agreement as
      Exhibit
      A.
      In the
      event of a default by Quixotic and Clear Skies in the timely payment of any
      payment due in a
      accordance
      with
      paragraph 1, if such default is not cured within three (3) business days after
      notice of said default, then Alpha shall be entitled to file the Confession
      of
      Judgment for entry. Notice of default
      to
      Quixotic and Clear Skies shall be deemed given upon
      the
e-wiling
      of such notice
      to
Richard@quixotic-systems.com
      on behalf of Quixotic and to rparker@clearskiesgroup.com on behalf of Clear
      Skies. In such event, all payments previously received by Alpha from Quixotic
      and Clear Skies pursuant to paragraph 1 of this Agreement shall be credited
      against the principal amount of the Confession of Judgment in partial
      satisfaction thereof.

     

    Alpha
      shall hold the Confession of Judgment in trust until Quixotic and Clear Skies
      have paid the full settlement amount of $206,778.00, as described in Paragraph
      1, at which time Alpha shall destroy
      the
      judgment or, at
      Quixote's
      or Clear Skies' option, surrender the judgment to them.

     

    3. In
      consideration for the promises made herein, Quixotic and Clear Skies hereby
      release and forever discharge Alpha, and Alpha hereby releases and forever
      discharges Quixotic and Clear Skies, from any and all
      claims,
      liens,
      indebtedness, demands, grievances, charges, causes of action, obligations,
      damages or liabilities of any kind
      or
      nature whatsoever,
      arising
      out of
      or
      relating to the claims
      raised
      in the Lawsuit. This waiver includes, but is not limited to, claims for costs
      and attorneys' fees. This release does not extend to
      any
      other
      potential claims or liabilities
      aside from those arising from the invoices referenced in and attached to the
      Complaint filed in, the Lawsuit. This release shall also include a release
      of
      all claims by Quixotic and Clear Skies against Alpha.

     

    4. Alpha
      will dismiss the Lawsuit with prejudice and without award of costs or attorneys'
      fees to any party by directing its
      attorneys to file the appropriate pleading in the United States District Court
      for the Western
      District
      of Washington within
      seven
      (7) days after the execution of
      this
      Agreement and the Confession of Judgment by all parties.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    5. Quixotic
      and Clear Skies represent and warrant that they have not sold, assigned,
      transferred, or encumbered any interest in any claim or demand which would
      otherwise fall within the scope of the claims released pursuant to Paragraph
      3
      of this Agreement.

    


    6. Nothing
      in this Agreement shall be construed as an admission of any liability on the
      part of any of the Parties for any of the claims or counterclaims asserted
      in
      the Lawsuit.

    


    7. The
      Parties
      agree that they shall not disclose or characterize the terms or conditions
      of
      this Agreement, including the amount of the settlement, to any third
      party
      except as
      required
      by court order or other legal
      or
      government process, including, if necessary, disclosure to the Internal Revenue
      Service
      to
      establish the nature of the settlement, or to its tax accountants, tax.
      advisors, or tax counsel.
      The
      Parties agree to notify one another
      of any legal
      or
      government process sufficiently in advance of responding to such process so
      that
      the other party may, if it deems necessary, take steps to oppose such
      disclosure.

    


    8. This
      Agreement, and any companion documents referenced or provided for herein,
      contains the entire agreement between the Parties regarding the matters set
      forth herein. No party has entered into this Agreement based
      on
      any representation
      or consideration not stated in this Agreement.

    


    9. No
      change, modification
      or amendment of this Agreement shall be
      valid
      or
binding,
      unless such change, modification or amendment is in writing and signed by the
      person(s)
      against whom the same is sought to be enforced.

    


    10. This
      Agreement has been generated pursuant to the equal negotiations and advice
      of
      the Parties and their counsel. Accordingly, this Agreement should not be
      construed more favorably or unfavorably as to any one party hereto.

    


    11. This
      Agreement shall
      be
      governed by Washington law. Quixotic
      and Clear Skies consent to and
      shall
      be subject to personal jurisdiction in the state of Washington for any dispute
      that
      arises out of this Agreement. The parties further agree that venue for any
      dispute or action that arises out of this
      Agreement
      shall be in Whatcom County Superior Court.

    


    12. In
      the
      event of any controversy, claim or dispute arising out of
      or
      relating to,
      this
Agreement
      or the method and manner of the performance thereof or the
      breach thereof, should
      any party file suit in order to enforce the terms of this Agreement, the
      prevailing party in any such suit shall be entitled to recover, in addition
      to
      any other relief, a
      reasonable
      sum for attorneys'
      fees, costs and litigation expenses. If no party wholly prevails, the party
      that
      substantially
      prevails shall be awarded a reasonable sum for attorneys' fees, costs and
litigation
      expenses.

    


    13. The
      Parties each acknowledge and agree that
      they
      have
      reviewed this Agreement in its entirety, and every part thereof including all
      exhibits thereto, and that they understand same, that they have had the
      opportunity to consult with their independent counsel as to the Agreement to
      the
      extent they desire, and that the terms and
      conditions hereof adequately and correctly
      reflect their respective understandings of the subject matter
      hereof.

    


    14. The
      undersigned each covenant and warrant that they have the right and authority
      to
      enter into this Agreement and carry out its terms. The undersigned also each
      covenant and. warrant that anyone signing on behalf of any corporation herein
      is
      and has been specially authorized
      pursuant to appropriate action of the shareholders or directors thereof, as
      appropriate,
      to
      execute this Agreement as the act and deed of such corporation.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    15. If
      any
      provision, or portion thereof, of this Agreement is held by
      a
      Court
      of competent
      jurisdiction to be invalid under any applicable
      statute or rule of law, the Parties agree
      that
      such invalidity shall not affect the validity of the remaining portions of
      this
      Agreement and further agree to substitute for the invalid provision a valid
      provision which most closely approximates the intent and economic effect of
      the
      invalid provisions.

    


    16. This
      Agreement may be executed in duplicate originals or counterparts. Each party
      shall receive copies of all executed signature pages so that all parties have
      a
      copy of the fully-executed Agreement for their records. This Agreement shall
      not
      be binding on any party until original counterparts of this Agreement have
      been
      executed by all parties hereto.

     

    


    
      	
              ALPHA
                ENERGY

            	 	
              QUIXOTIC
                SYSTEMS, INC.

            
	 	 	 
	
              By:

            	/s/
              Apha
              Energy                                                                                           
              	 	
              By:

            	/s/
              Richard
              Klein                                                                                           
              
	 	 	 	 	 
	
              Printed Name:

            	______________________________________	 	
              Printed Name:

            	Richard
              Klein                                                                               
              
	 	 	 	 	 
	
              Title:

            	___________________________________________	 	
              Title:

            	President                                                                                                      
	 	 	 	 	 
	
              Dated:

            	_________________________________________	 	
              Dated:August
                29,
                2007                          
                                                                            
                

            
	 	 	 	 	 
	
              CLEAR
                SKIES GROUP, INC.

            	 
	 	 
	
              By:

            	/s/
              Ezra
              Green                                                                                              
              	 	 	 
	 	 	 	 	 
	
              Printed Name:

            	Ezra
              Green                                                                                  	 	 	 
	 	 	 	 	 
	
              Title:

            	COO                                                                                                         
              	 	 	 
	 	 	 	 	 
	
              Dated:

            	8/30/07