SETTLEMENT AGREEMENT AND MUTUAL RELEASE
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.
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(a)
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Seventy-Five
Thousand Dollars ($75,000.00) to be paid within 72 hours of the execution
of this Agreement;
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| (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;
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| (c) |
In
the absence of farther written notice by Alpha or its assignee, payments
shall be made by wire transfer to the
following:
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Beneficiary
Name
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ALPHA
ENERGY
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Beneficiary
Address
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Account
No:
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ABA
Routing No:
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Swift
Number
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Bank
and Address:
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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
Xxxxxxx@xxxxxxxx-xxxxxxx.xxx
on behalf of Quixotic and to xxxxxxx@xxxxxxxxxxxxxxx.xxx 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.
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ALPHA
ENERGY
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QUIXOTIC
SYSTEMS, INC.
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By:
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/s/ Apha Energy |
By:
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/s/ Xxxxxxx Xxxxx | ||||||
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Printed Name:
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______________________________________ |
Printed Name:
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Xxxxxxx Xxxxx | ||||||
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Title:
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___________________________________________ |
Title:
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President | ||||||
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Dated:
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_________________________________________ |
Dated:August
29,
2007
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CLEAR
SKIES GROUP, INC.
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By:
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/s/ Xxxx Xxxxx | ||||||||
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Printed Name:
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Xxxx Xxxxx | ||||||||
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Title:
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COO | ||||||||
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Dated:
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8/30/07 | ||||||||
