**SETTLEMENT
      AGREEMENT AND**


**RELEASE
      OF CLAIMS**





This
      Settlement Agreement and Release of Claims (“Agreement”) is made and entered
      into this 15th day of January, 2007, by and between Plaintiff B-50.com, LLC
      (“B-50”), and Defendant XFormity, Inc., a Texas Corporation (“XFormity”). B-50
      and XFormity are sometimes collectively referred to in this Agreement as “the
      Parties.” B-50 and XFormity are currently parties to a Lawsuit pending in
      federal district court for the Northern District of Texas, Dallas Division,
      Civil Action No. 304CV-542-B (“the Lawsuit”).





W-I-T-N-E-S-S-E-T-H





WHEREAS,
      the Parties wish to settle the Lawsuit, without any party making any admissions
      of liability or wrongdoing;





NOW,
      THEREFORE, in consideration of the promises and covenants made herein, and
      for
      other good and valuable consideration, the Parties hereby agree as
      follows:





|1. | CONSIDERATION.
|-- | --------------




The
      parties hereto acknowledge and agree that the sole consideration for the
      covenants and agreements contained herein, the sufficiency whereof is hereby
      acknowledged, shall be (i) the execution and delivery of the License Agreement
      dated January 2, 2007 that has already been executed by both parties and the
      (ii) execution, delivery and filing of the Stipulation for Dismissal with
      Prejudice in the form attached to this Agreement. The agreements contained
      herein and
      in
      the License Agreement are
      subject to and contingent upon the entry of a final Order of Dismissal with
      Prejudice by the Court ending the Lawsuit in accordance with the Stipulation. T he
      execution and delivery of the License Agreement and this Agreement are not
      an
      admission of liability or wrongdoing by either party.





|2. | MUTUAL
              RELEASES OF ALL CLAIMS OF ANY PARTY.
|-- | ---------------------------------------------------------




A.  In
      exchange for the other Parties’ promises and covenants herein, including the
      consideration provided for in Paragraph 1 above, and the promises and covenants
      contained in the License Agreement dated January 2, 2007, the
      receipt and sufficiency of which are hereby acknowledged, B-50, for itself,
      and
      all of its present and former officers, directors, employees, agents, insurers,
      attorneys, parents, affiliates subsidiaries and successors and assigns, hereby
      irrevocably and unconditionally releases, acquits and forever discharges
      Xformity and its parent corporation, XFormity Technologies, Inc., a Colorado
      corporation, and all of their present and former officers, directors, employees,
      agents, insurers, benefit plans (and related persons/entities), attorneys,
      parents, affiliates, subsidiaries, and successors and assigns, (collectively
      referred to as the “XFormity Released Parties”), from any and all charges,
      complaints, grievances, actions, suits, liabilities, obligations, promises,
      agreements, demands, controversies, rights, claims and causes of action of
      whatever kind or nature, whether known or unknown, including claims brought
      under any federal, state or local statute, ordinance or under common
      law, **** and and
      all manner of claims, demands, causes of action, judgments, actions, suits,
      levies, executions, and liabilities of whatever nature, known or unknown, fixed
      or contingent, liquidated or unliquidated, indirect or direct, foreseen or
      unforeseen, which B-50 may have had, may have, or may come to have against
      the
      XFormity Released Parties, , at any time by reason of, in any way connected
      with, arising out of, bearing upon, or in any way relating to any matter, act,
      fact, transaction or occurrence or thing occurring prior to the date of
      execution of this Agreement, including without limitation, all claims pertaining
      to, arising out of, or bearing upon the Lawsuit.





B.  In
      exchange for the other Parties’ promises and covenants herein, including the
      consideration provided for in Paragraph 1 above, and the promises and covenants
      contained in the License Agreement dated January 2, 2007, the receipt and
      sufficiency of which are hereby acknowledged, the XFormity Released Parties,
      for
      themselves, and all of their present and former officers, directors, employees,
      agents, insurers, attorneys, parents, affiliates subsidiaries and successors
      and
      assigns, hereby irrevocably and unconditionally release, acquit and forever
      discharge B-50, and all of its present and former officers, directors,
      employees, agents, insurers, benefit plans (and related persons/entities),
      attorneys, parents, affiliates, subsidiaries, and successors and assigns,
      (collectively referred to as the “B-50 Released Parties”), from any and all
      charges, complaints, grievances, actions, suits, liabilities, obligations,
      promises, agreements, demands, controversies, rights, claims and causes of
      action of whatever kind or nature, whether known or unknown, including claims
      brought under any federal, state or local statute, ordinance or under common
      law, **** and all
      manner of claims, demands, causes of action, judgments, actions, suits, levies,
      executions, and liabilities of whatever nature, known or unknown, fixed or
      contingent, liquidated or unliquidated, indirect or direct, foreseen or
      unforeseen, which the XFormity Released Parties may have had, may have, or
      may
      come to have against the B-50 Released Parties, at any time by reason of, in
      any
      way connected with, arising out of, bearing upon, or in any way relating to
      any
      matter, act, fact, transaction or occurrence or thing occurring prior to the
      date of execution of this Agreement, including without limitation, all claims
      pertaining to, arising out of, or bearing upon the Lawsuit.





**C**  The
      parties understand and expressly agree that the General Mutual Release contained
      in paragraphs 2A and 2B above extends to all claims of every nature and
      kind, known or unknown, suspected or unsuspected, presently existing or which
      may arise in the future, caused by or resulting from or attributable to any
      act
      or omission of each party and each person released under this Agreement which
      occurred or failed to occur prior to the execution of this Agreement. The
      parties acknowledge that except for matters expressly represented herein, the
      facts with respect to which this Agreement was entered into may turn out to
      be
      other than or different from the facts now known to each party or believed
      by
      each party to be true, and the parties hereto expressly assume the risks of
      the
      facts turning out to be different and agree that this Agreement shall be in
      all
      respects effective and binding despite any such difference. The
      parties agree that the General Mutual Releases contained in paragraphs 2A
      and 2B above do not prevent any party from enforcing the terms of the License
      Agreement dated January 2, 2007 that has already been executed by both
      parties **.** The
      parties also agree that the General Mutual Releases contained in
      paragraphs 2A and 2B above do not apply to any claims or causes of action
      that arise after the date of execution of this Agreement.





D.  Each
      party does hereby represent and warrant to the other party that no portion
      of
      any claim, demand, cause of action or other matter released herein, nor any
      portion of any recovery or settlement to which such party might be entitled
      from
      the other party, has been assigned or transferred to any other person, firm,
      entity or corporation, either directly or by way of subrogation or operation
      of
      law, and (ii) covenants (a) to indemnify, defend and hold harmless the other
      party from all loss, costs, claim or expense (including, but not limited to,
      all
      expenses of investigation and defense of any such claim or action, including
      reasonable attorney's fees and accountants' fees, costs and expenses) arising
      out of any claim made or action instituted against the other party by any person
      or entity who claims to be the beneficiary of any such assignment or transfer,
      and to pay and satisfy any judgment resulting from any settlement of any such
      claim or action and (b) not to sue the other party for any claim or claims
      or
      arising under any local, state or federal statutory, regulatory or common law
      right, claim or cause of action whatsoever which may have existed prior to,
      or
      may exist at the time of, the execution of this Agreement.





E.  The
      parties to this Agreement warrant and represent that no promise or inducement
      has been offered except as expressly set forth herein and that this Agreement
      is
      executed without reliance upon any statement or representation by the persons
      or
      parties involved or their representatives concerning the nature or extent of
      any
      damages or any legal liability of the other party therefor.





F.  The
      parties recognize and agree that by entering into this Agreement no party
      admits, and each of them does specifically deny, any violation of any local,
      state or federal law, common or statutory or any liability to the other. The
      parties further recognize that no delivery of any document or instrument made
      in
      connection with this Agreement is to be construed as an admission of liability
      by such party and that this instrument has been entered into in order to
      consummate a compromise and final settlement of any and all claims of the
      parties which might arise from any fact, transaction or occurrence prior to
      the
      date hereof.





|3. | DISMISSAL
              WITH PREJUDICE.
|-- | ---------------------------------------




Concurrently
      with the execution of this Agreement, the parties agree to execute, deliver
      and
      file the Stipulation for Dismissal with Prejudice and take all action necessary
      to dismiss with prejudice all claims, demands and causes of action asserted
      or
      which could have been asserted in the Lawsuit. The Parties agree to cooperate
      with each other in the execution and filing of any and all papers necessary
      to
      cause said dismissal with prejudice, including but not limited to, the
      Stipulation of Dismissal with Prejudice that is attached hereto and that is
      incorporated herein by this reference.  Each
      party shall be responsible for obtaining the necessary signatures from its
      attorneys on the Stipulation for Dismissal with Prejudice.





4.  NO
      FEES OR COSTS TO EITHER PARTY .





The
      Parties agree that they will each be responsible for their own attorneys’ fees,
      costs and disbursements incurred in connection with the Lawsuit.





5.  RECITALS .





The
      recitals and facts set forth above are incorporated into this Agreement as
      part
      of the terms hereof.





6. CONSTRUCTION
      OF AGREEMENT .





A.   The
      Parties hereto acknowledge and agree that they each have been represented by
      competent legal counsel of their own choosing in connection with all
      negotiations, drafting and execution of this Agreement, and the License
      Agreement dated January 2, 2007. Accordingly, the language used in this
      Agreement and the License Agreement dated January 2, 2007 will be deemed
      language chosen by all Parties hereto to express their mutual assent, and no
      rule of strict construction against any party will apply to any term or
      condition of this Agreement.





B.   Each
      party further expressly warrants, declares and represents that before executing
      this instrument, such party has fully informed himself/itself of its terms,
      contents, conditions and effects; that such party understands that it may
      consult an attorney of its choice concerning this instrument and their decision
      to enter into this Agreement. Each party represents and acknowledges that it
      has
      read the foregoing instrument carefully and fully and that it understands its
      terms, and each is executing such agreements voluntarily and without any
      coercion, undue influence, threat or intimidation of any kind or type
      whatsoever.





C.   In
      the
      event of any conflict or inconsistency between the provisions of this Agreement
      and the provisions of the License Agreement, the provisions of the License
      Agreement shall control.





|7. | COUNTERPARTS**.**
|-- | -----------------




The
      Parties agree that this Agreement and the License Agreement dated January 2,
      2007 may be signed in counterparts by the Parties with the same force and effect
      as if the Parties had all signed the same original Agreement. This Agreement
      and
      the License Agreement dated January 2, 2007 may further be delivered and
      executed via facsimile transmission, and receipt of a signed counterpart by
      facsimile shall be considered the same as an original.





8. GOVERNING
      LAW AND DISPUTE RESOLUTION .





Any
      controversy or claim arising out of or relating to this Agreement, or the breach
      of the same, shall be settled through consultation and negotiation in good
      faith
      and a spirit of mutual cooperation. However, if those attempts fail, each of
      the
      parties agrees that any dispute or controversy arising out of or in connection
      with this Agreement or any alleged breach hereof shall be settled by mandatory
      binding arbitration in Minneapolis, Minnesota pursuant to the Commercial
      Arbitration Rules of the AAA. If the parties cannot jointly select a single
      arbitrator to determine the matter, one arbitrator shall be chosen by each
      of
      B-50 and XFormity (or, if a party fails to make a choice, by the AAA on behalf
      of such party) and the two arbitrators so chosen will select a third (or, if
      they fail to make a choice, by the AAA). The decision of the single arbitrator
      jointly selected by B-50 and XFormity, or, if three arbitrators are selected,
      the decision of any two of them will be final and binding upon the parties
      and
      the judgment of a court of competent jurisdiction may be entered thereon. The
      arbitrator or arbitrators shall award the costs and expenses of the arbitration,
      including reasonable attorneys' fees, disbursements, arbitration expenses,
      arbitrators' fees and the administrative fee of the AAA, to the prevailing
      party
      as shall be determined by the arbitrator or arbitrators.





9.  BINDING
      EFFECT .





The
      Parties agree that this Agreement is binding upon their respective parents,
      subsidiaries, affiliates, shareholders, officers, directors, employees,
      successors, predecessors-in-interest and assigns.




10. CONFIDENTIALITY
      AND NON-DISCLOSURE AGREEMENT .





Neither
      party shall make disparaging remarks about the other during the term of this
      Agreement, or the License Agreement dated January 2, 2007. The Parties agree
      that this Agreement and its terms shall remain confidential and shall not be
      disclosed to any third party, except under the following
      circumstances:





Terms
      of
      this Settlement Agreement can be disclosed by either party if, in the opinion
      of
      legal counsel for either party, such disclosure is required to be included
      in
      either party’s reports and other filings with the Securities and Exchange
      Commission under Section 13(a) of the Securities Exchange Act of 1934, as
      amended or in a registration statement under the Securities Act. The Parties
      agree that pertinent details of the settlement agreement can be disclosed as
      necessary to applicable government agencies (including, but not limited to,
      the
      Internal Revenue Service, the Securities and Exchange Commission, and other
      state and federal agencies). Upon consent of XFormity, which shall not be
      unreasonably withheld, B-50 may also disclose the terms and conditions of the
      Parties’ settlement to any other parties engaged in litigation with or against
      B-50 involving the ‘851 Patent, and to any other party or parties against whom
      B-50 has asserted any claim, demand or suit alleging infringement of the ‘851
      Patent.





In
      addition, either party may disclose the terms of this Settlement Agreement
      (1)
      to enable either party to obtain advice from its accountants or lawyers, and
      in
      that event such disclosure may only be made to that party’s accountant or
      lawyer; and (2) to comply with lawfully issued process from a court of competent
      jurisdiction. In all other cases, the Parties may only disclose to third parties
      the fact that the Lawsuit has been settled by confidential agreement of the
      Parties.





The
      Parties agree that this Paragraph 10 shall constitute the non-disclosure
      agreement required by Paragraph B(2) of the Settlement Term Sheet, dated
      September 21 st ,
      2006.








DATED:  January
      15, 2007    B-50.COM,
      LLC.








BY: /s/
      Bruce Clark





ITS: CEO











DATED:
      January 15, 2007  XFORMITY, INC,





BY: s/s
      Chris Ball





ITS: CEO