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”).

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:

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. The execution and delivery of the License Agreement and this Agreement are not an admission of liability or wrongdoing by either 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