SETTLEMENT
      AND RELEASE AGREEMENT

    


    This
      Settlement and Release Agreement (“Agreement”) is entered into and dated
      effective as of this 22nd day of August, 2007 by and between Laurus Master
      Fund,
      Ltd., a Cayman Islands company (“Laurus”) and Catalyst Lighting Group, Inc., a
      Delaware corporation (“Catalyst”). 

    


    RECITALS

    


    WHEREAS,
      Whitco Company, LP, a Texas limited partnership (“Whitco”) was formerly a wholly
      owned subsidiary of Catalyst;

    


    WHEREAS,
      Laurus and Catalyst are parties to that certain Securities Purchase Agreement
      dated September 30, 2004, as amended, modified or supplemented from time to
      time
      (“Securities Purchase Agreement”);

    


    WHEREAS,
      Laurus, Catalyst and Whitco are parties to that certain Security Agreement
      dated
      September 30, 2004, as amended, modified or supplemented from time to time
      (“Security Agreement”);

    


    WHEREAS,
      Laurus, Catalyst and Whitco are parties to that certain Master Security
      Agreement dated September 30, 2004, as amended, modified or supplemented from
      time to time (“Master Security Agreement”);

    


    WHEREAS,
      Catalyst and Whitco are jointly and severally liable under a certain Secured
      Revolving Note issued by them in favor of Laurus dated September 30, 2004,
      as
      amended, modified or supplemented from time to time (“Revolving
      Note”);

    


    WHEREAS,
      Catalyst and Whitco are jointly and severally liable under a certain Secured
      Convertible Minimum Borrowing Note issued by them in favor of Laurus dated
      September 30, 2004, as amended, modified or supplemented from time to time
      (“Minimum Borrowing Note”);

    


    WHEREAS,
      Catalyst is liable under a certain Secured Convertible Term Note issued by
      it in
      favor of Laurus dated September 30, 2004, as amended, modified or supplemented
      from time to time (“Term Note”);

    


    WHEREAS,
      Laurus and Catalyst are parties to that certain Registration Rights Agreement
      dated September 30, 2004, as amended, modified or supplemented from time to
      time
      (“Registration Rights Agreement”);

    


    WHEREAS,
      Laurus and Catalyst are parties to that certain Omnibus Amendment No. 1 dated
      December 3, 2004, as amended, modified or supplemented from time to time
      (“Omnibus Amendment”);

    


    WHEREAS,
      Laurus, Catalyst and Whitco are parties to that certain Amendment and Agreement
      dated April 18, 2005, as amended, modified or supplemented from time to time
      (“Amendment”);

    


    WHEREAS,
      Catalyst has issued a warrant in favor of Laurus to purchase 472,000 shares
      of
      Catalyst’s common stock, dated September 30, 2004, as amended, modified or
      supplemented from time to time (“First Warrant”);

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    


    WHEREAS,
      Catalyst has issued a warrant in favor of Laurus to purchase 100,000 shares
      of
      Catalyst’s common stock, dated December 3, 2004, as amended, modified or
      supplemented from time to time (“Second Warrant”);

    


    WHEREAS,
      the Securities Purchase Agreement, Security Agreement, Master Security
      Agreement, Revolving Note, Minimum Borrowing Note, Term Note, Registration
      Rights Agreement, Omnibus Amendment, Amendment, First Warrant and Second Warrant
      are herein collectively referred to as the “Documents”;

    


    WHEREAS,
      the Revolving Note, Minimum Borrowing Note and Term Note are herein collectively
      referred to as the “Notes”;

    


    WHEREAS,
      the First Warrant and Second Warrant are herein collectively referred to as
      the
“Warrants”;

    


    WHEREAS,
      on March 15, 2005, Whitco voluntarily filed for protection from its creditors
      under Chapter 11 of the U.S. Bankruptcy Code (“Whitco Bankruptcy”);

    


    WHEREAS,
      in connection with the Whitco Bankruptcy, all of the assets of Whitco (other
      than cash and accounts receivable) were sold to American Technologies Group,
      inc. (“ATG”) in consideration of a warrant to acquire certain shares of ATG’s
      common stock (“ATG Warrant”);

    


    WHEREAS,
      following the sale of assets to ATG, the Whitco Bankruptcy was converted to
      a
      Chapter 7 liquidation proceeding and the ATG Warrant was issued to
      Laurus;

    


    WHEREAS,
      in connection with the Whitco Bankruptcy, Laurus and Catalyst agreed that
      certain accounts receivable collections and the issuance of the ATG Warrant
      would be applied against payment of the Notes balances as follows:

    


    
      	
              Principal
                and Interest Balances:

            	 	 	 	 	 
	
              Revolving
                Note - Principal Balance at March 14, 2006

            	 	
              $

            	
              920,421

            	 	 	 	 
	
              Revolving
                Note - Accrued Interest at March 15, 2006

            	 	 	
              3,854

            	 	 	 	 
	
              Minimum
                Borrowing Note - Principal Balance at March 14, 2006

            	 	 	
              997,000

            	 	 	 	 
	
              Minimum
                Borrowing Note - Accrued Interest at March 15, 2006

            	 	 	
              3,947

            	 	 	 	 
	
              Total
                Balance - Revolving Note and Minimum Borrowing Note

            	 	 	 	 	
              $

            	
              1,925,232

            	 
	 	 	 	 	 	 	 	 
	
              Collections,
                Payments and Charges:

            	 	 	 	 	 	 	 
	
              Agreed
                Value of ATG Warrant

            	 	 	
              ($1,500,000

            	
              )

            	 	 	 
	
              Accounts
                Receivable Balance at March 15, 2006 

            	 	 	
              (1,404,295

            	
              )

            	 	 	 
	
              Agreed
                Uncollectible Accounts Receivable

            	 	 	
              300,000

            	 	 	 	 
	
              Debtor-in-Possession
                Collections by Laurus

            	 	 	
              (85,556

            	
              )

            	 	 	 
	
              Laurus
                Fees and Expenses

            	 	 	
              35,000

            	 	 	 	 
	
              Total
                Collections, Payments and Charges

            	 	 	 	 	 	
              ($2,654,851

            	
              )

            
	 	 	 	 	 	 	 	 
	
              Term
                Note Balance:

            	 	 	 	 	 	 	 
	
              Excess
                Payments and Collections Applied to Term Note

            	 	 	 	 	 	
              ($729,619

            	
              )

            
	
              Term
                Note - Principal Balance at March 14, 2006

            	 	 	 	 	 	
              1,549,654

            	 
	
              Term
                Note - Accrued Interest at March 15, 2006

            	 	 	 	 	 	
              6,134

            	 
	
              Balance
                - Term Note

            	 	 	 	 	
              $

            	
              826,169

            	 


    

     

    


    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    WHEREAS,
      Catalyst has insufficient financial resources to pay Laurus the balance of
      the
      Term Note;

    


    WHEREAS,
      Catalyst intends to file with the U.S. Securities and Exchange Commission
      (“SEC”) to become a reporting company under the Securities Exchange Act of 1934,
      as amended (“Exchange Act”) after the audit of Catalyst’s financial statements
      is completed; 

    


    WHEREAS,
      after becoming a reporting company under the Exchange Act, Catalyst intends
      to
      seek to effect a business combination with a corporation or other business
      entity with current business operations in a reverse merger or reverse takeover
      transaction (“Reverse Merger”); 

    


    WHEREAS,
      in order to pursue a Reverse Merger, Catalyst needs to pay, settle and/or
      satisfy all of its liabilities and obligations; 

    


    WHEREAS,
      Laurus and Catalyst desire to settle and satisfy all claims, liabilities and
      obligations under the Documents, Notes and Warrants pursuant to the terms and
      conditions hereof;

    


    WHEREAS,
      Laurus and Catalyst further desire to terminate and cancel all contracts and
      agreements between them, whether oral or written, without further liability
      or
      obligation on behalf of either of them, pursuant to the terms and conditions
      of
      this Agreement; and

    


    WHEREAS,
      Laurus and Catalyst further desire to release each other from any and all
      liabilities and obligations of any kind or nature, whether known or unknown,
      pursuant to the terms and conditions of this Agreement;

    


    AGREEMENTS

    


    Now,
      Therefore,
      in
      consideration of the above recitals, the following representations, warranties,
      covenants and conditions, and other good and valuable consideration, the receipt
      of which is acknowledged, the parties agree as follows:

    


    1. Termination
      of Agreements.
      With
      effect from and after the receipt of securities issued by Catalyst to Laurus
      as
      set forth in Section 3 hereof and the consummation of the transactions
      contemplated by this Agreement, Catalyst, on the one hand, and Laurus, on the
      other hand, each hereby: (i) mutually terminate and cancel any and all
      agreements and contracts (whether oral or written) between Catalyst and/or
      Whitco, on the one hand, and Laurus, on the other hand, pertaining to any
      matters between such parties including, without limitation, the Documents,
      Notes
      and Warrants (collectively, the “Loan Agreements”), and (ii) release each other
      from any further liability and obligations under the Loan Agreements including
      all principal, interest, fees, expenses and penalties thereunder. 

    


    2. Waiver
      and Release.
      Subject
      only to the issuance of securities by Catalyst to Laurus as set forth in Section
      3 hereof, Catalyst and Whitco, on the one hand, and Laurus, on the other hand,
      each hereby waive, and forever and irrevocably release and discharge the other
      party and its respective successors and assigns, and their respective past
      and
      present officers and directors, employees, shareholders, members, consultants,
      attorneys, accountants, other professionals, insurers, agents and all other
      related entities, including, but not limited to, assigns, predecessors,
      successors, controlling corporations, subsidiaries or other affiliates, from
      all
      liabilities and obligations owed by either party to the other party, and from
      any and all claims, demands, and causes of action of every kind and nature,
      including, without limitation, those relating to or arising out of any federal,
      state or local laws, and common law, claims for advances or other loans, claims
      for unpaid fees, interest, penalties, expense reimbursement or other
      compensation under the Loan Agreements or otherwise; provided, however, that
      nothing contained herein shall be construed to limit in any way the rights
      of
      either party, and their successors and assigns, to enforce the terms of this
      Agreement. Further, each party irrevocably
      agrees to refrain from directly or indirectly asserting any claim or demand
      or
      commencing (or causing to be commenced) any suit, action, or proceeding of
      any
      kind, in any court or before any tribunal, against the other party based upon
      any released claim. 

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    3. Issuance
      of Securities.
      In full
      satisfaction of all obligations and liabilities of Catalyst and Whitco owed
      to
      Laurus under the Loan Agreements, Catalyst hereby agrees to issue to Laurus
      a
      total of 10,831,718 shares of Catalyst’s common stock (“Shares”). The Shares
      shall be issued pursuant to an exemption from registration under the Securities
      Act of 1933, as amended (“Securities Act”), and the certificates representing
      the Shares shall contain the restrictive legend under the Securities Act. Prior
      to the issuance of the Shares, Laurus shall deliver to Catalyst a representation
      letter with respect to the issuance of the Shares, which shall be in the form
      attached hereto as Exhibit A. The Shares will be entitled to registration rights
      as set forth in the Registration Rights Agreement, the form of which is attached
      hereto as Exhibit B (“Registration Rights Agreement”). The closing of the
      transactions contemplated hereunder are contingent the closing of that certain
      securities purchase agreement by and between Catalyst and KIG Investors I,
      LLC
      (“KIG”) dated August 22, 2007 (“Purchase Agreement”). Pursuant to the Purchase
      Agreement, (i) Catalyst will issue a total of 1,572,770 shares of Series A
      Convertible Preferred Stock, par value $0.01 per share (“Preferred
      Shares”)
      to KIG
      for a purchase price of $157,277 (“Purchase Price”), (ii) the Preferred Shares
      will be convertible into 25,620,147 shares of Catalyst’s common stock
      (“Conversion Shares”), (iii) the Purchase Price will be used to pay liabilities
      and obligations of Catalyst and costs and expenses to become, and maintain
      its
      status as, a reporting company under the Exchange Act, and (iv) the Conversion
      Shares will be entitled to registration rights under terms and conditions
      substantially identical to those afforded to the Shares to be issued to Laurus
      under the Registration Rights Agreement. The Shares to be issued to Laurus
      hereunder will be issued at the closing of the Purchase Agreement.

    


    Without
      the prior written consent of Laurus, Catalyst shall not issue any securities
      if,
      as a result of such issuance, the Shares issued to Laurus under this Section
      3
      will represent less than 25% of the outstanding shares of Catalyst’s common
      stock on a fully diluted basis; provided, however, that this restriction and
      limitation on the issuance of securities by Catalyst shall not apply to the
      issuance of Catalyst’s securities in connection with the Reverse Merger or any
      capital raise being conducted as part of the Reverse Merger. The provisions
      of
      this paragraph shall terminate and be of no full force and effect immediately
      following the closing of the Reverse Merger. 

    


    Catalyst
      has disclosed to Laurus its intention to take such actions as are necessary
      to
      effect a one-for-ten reverse stock split (“Reverse Split”) following the closing
      of the transactions contemplated hereunder, and Laurus hereby agrees and
      consents to such Reverse Split. 

    


    4. Representations
      and Warranties of Catalyst.
      Catalyst represents and warrants to Laurus that: (i) on the date of this
      Agreement, Catalyst has all necessary authority to execute this Agreement;
      (ii)
      there is no claim, action, suit or other proceeding pending, threatened or
      known, which, if decided adversely, would interfere with the consummation of
      the
      transaction contemplated hereby; (iii) no approval or consent of any
      governmental authority or third party is required for Catalyst to enter into
      or
      perform this Agreement; (iv) this Agreement is enforceable in accordance with
      its terms, subject to the laws of insolvency and general principles of equity;
      and (v) this Agreement has been duly authorized and adopted by
      Catalyst.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    


    5. Representations
      and Warranties of Laurus.
      Laurus
      represents and warrants to Catalyst that: (i) on the date of this Agreement,
      Laurus has all necessary authority to execute this Agreement; (ii) there is
      no
      claim, action, suit or other proceeding pending, threatened or known, which,
      if
      decided adversely, would interfere with the consummation of the transaction
      contemplated hereby; (iii) no approval or consent of any governmental authority
      or third party is required for Laurus to enter into or perform this Agreement;
      and (iv) this Agreement is enforceable against Laurus in accordance with its
      terms, subject to the laws of insolvency and general principles of equity.
      

    


    6. Delivery
      and Cooperation.
      If
      either party requires any further documentation (including, without limitation,
      any UCC termination filings), the other party will promptly respond to any
      reasonable requests for additional documentation.

    


    7. Miscellaneous.

    


    (a) Successors
      and Assigns.
      This
      Agreement shall be binding upon the parties hereto and their respective
      successors and assigns. 

    


    (b) Survival
      of Covenants and Representations.
      All
      agreements, covenants, representations and warranties made by the parties herein
      shall survive the delivery of this Agreement. 

    


    (c) Severability.
      Should
      any part of this Agreement for any reason be declared invalid or unenforceable,
      such decision will not affect the validity or enforceability of any remaining
      portion, which remaining portion will remain in force and effect as if this
      Agreement had been executed with the invalid portion thereof eliminated, and
      it
      is hereby declared as the intention of the parties hereto that the parties
      would
      have executed the remaining portion of this Agreement without including therein
      any such part or portion that may, for any reason, be hereafter declared invalid
      or unenforceable.

    


    (d) Governing
      Law and Venue.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of Delaware, without reference to choice of law principles. 

    


    (e) Captions.
      The
      descriptive headings of the various Sections or parts of this Agreement are
      for
      convenience only and shall not affect the meaning or construction of any of
      the
      provisions hereof.

    


    (f) Entire
      Agreement.
      This
      Agreement constitutes the entire agreement among the parties hereto concerning
      the subject matter contained herein, and supersedes all prior agreements or
      understanding of the parties. No provision of this Agreement may be waived
      or
      amended except in a writing signed by both parties. A waiver or amendment of
      any
      term or provision of this Agreement shall not be construed as a waiver or
      amendment of any other term or provision.

    


    (g) Counterparts.
      This
      Agreement may be executed by facsimile or electronic signatures and in multiple
      counterparts, each of which shall be deemed an original. It shall not be
      necessary that each party executes each counterpart, or that any one counterpart
      be executed by more than one party so long as each party executes at least
      one
      counterpart. 

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    


    (h) Arbitration.
      All
      disputes, controversies or claims (“Disputes”)
      arising out of or relating to this Agreement shall in the first instance be
      the
      subject of a meeting between a representative of each party who has
      decision-making authority with respect to the matter in question. Should the
      meeting either not take place or not result in a resolution of the Dispute
      within twenty (20) business days following notice of the Dispute to the other
      party, then the Dispute shall be resolved in a binding arbitration proceeding
      to
      be held in New York, New York in accordance with the international rules of
      the
      American Arbitration Association. The arbitrators may award attorneys’ fees and
      other related arbitration expenses, as well as pre- and post-judgment interest
      on any award of damages, to the prevailing party or parties, in their sole
      discretion. The parties agree that a panel of three arbitrators shall be
      required, all of whom shall be fluent in the English language, and that the
      arbitration proceeding shall be conducted entirely in the English language.
      Any
      award of the arbitrators shall be deemed confidential information for a minimum
      period of five years.

     

    [Remainder
      of this page intentionally left blank.]

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    


    IN
      WITNESS WHEREOF, this Agreement has been executed as of the date first written
      above.

     

    
      	 	 	 
	 	CATALYST LIGHTING GROUP,
              INC.
	 
 	 
 	 
 
	
            	By:  	/s/
              Dennis Depenbusch 
	 	
              
 Dennis
              Depenbusch, CEO


       

      
        	 	 	 
	 	LAURUS MASTER FUND,
                LTD.
	 
 	 
 	 
 
	
              	By:  	/s/ David Grin 
	 	
                

                Name:
                  David Grin

                


                Title:
                  Director

              

   

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

    

     

    Exhibit
      A
      - Laurus Investor Representation Letter

    


    Exhibit
      B
      - Registration Rights Agreement

     

    
      
         

      

      
        8