GLOBAL SETTLEMENT AGREEMENT
This
Modification and Settlement Agreement (the “Agreement”)
is
made and entered into as of this day of March 2008 by Indigo-Energy, Inc.,
a
corporation organized under the laws of the State of Nevada (the “Company), on
the one hand, and the individuals listed in Schedule A hereof (the
“Developers”), on the other hand (together with the Company, the
“Parties”).
WHEREAS,
the
Company previously entered into various agreements with each of the Developers,
including but not limited to the Limited Partnership Agreement dated as of
July
7, 2006 whereby the Developers were granted interests (the “LP Interests”) in
Indigo- Energy Partners, LP (“Indigo LP”) and accordingly became limited
partners of Indigo LP, pursuant to which the Company agreed to grant each of
the
Developers certain interests in the Company’s assets, including interests in the
xxxxx owned and/or operated by the Company as defined in the Indigo Energy
Partners L.P. Agreement (the “Old Agreements”);
WHEREAS,
the
Parties have agreed that it is in all of their interests to modify all of the
terms provided under the Old Agreements, including those terms relating to
past
and future payments to be received by the Developers from revenue generated,
earned or to be generated or earned from the Company’s xxxxx, as well as any
interest in such xxxxx that may be have been granted to the
Developers;
WHEREAS,
the
Company desires for the Developers to give up their LP Interests in order for
the Company to be in a position to dissolve Indigo LP; and
WHEREAS,
the
Company has offered and the Developers have agreed to accept modifications
to
the terms and condition provided in the Old Agreements, subject to the
provisions set forth herein,
NOW
THEREFORE,
the
Parties hereto agree as follows:
Section
1. Release.
Effective upon the execution of this Agreement, the Developers hereby release
the Company, its agents, employees, directors, officers, consultants and
affiliates from any liability relating to, arising out of or by virtue of the
Old Agreements, except the obligation to make payments and issue stock warrants
as set forth below. Further, also upon execution of this Agreement, the Company
(which includes its officers, directors, shareholders, agents, employees,
consultants, attorneys, parent, subsidiary and affiliated companies), hereby
releases the Developers, which includes their agents, employees, directors,
officers, attorneys, consultants, affiliates, heirs, successors and assigns
from
any liability to the Company or any other person or entity, relating to, arising
out of or by virtue of the Old Agreements. This Release, and the remainder
of
this Agreement, does not apply to the Modification and Settlement Agreements
and
underlying Promissory Notes related to Indigo Well #2.
Section
2. Cancellation
of LP Interests.
Effective upon execution of this Agreement by all parties, the Developers hereby
surrender all of their LP Interests and recognize that such LP Interests, will
be cancelled, that Indigo LP will be dissolved, and that the old Agreements
will
be terminated. A general description of the LP Interests being cancelled are
set
forth on Schedule A hereto.
Section
3. Consideration.
As
consideration for this Agreement, the Parties hereby agree as
follows:
a. Settlement
Amounts
- The
Company agrees to pay to the Developers, on a pro-rata basis, an aggregate
amount of Fifty Thousand Dollars ($50,000) a month for a period of thirty-six
(36) months commencing on the date on which the Company receives funding,
regardless of the source of such funding, in the aggregate amount of at least
Ten Million Dollars ($10,000,000). The Developers understand that the Company
will not be in a position to make such payments, as set forth in this paragraph,
until the Company receives the funding described herein. The monthly payments
to
be paid to each Developer under this Agreement are set forth in Schedule B
hereto. In the event that the Company has not commenced any payments by January
1, 2009, regardless of whether it has received funding of at least $10,000,000,
or if the Company defaults on any payments hereunder, the Developers have the
right to seek judicial enforcement of the Company’s obligation to pay the
Settlement Amounts, and the Release in Section 1 hereof shall be null and void
and the Developers shall be permitted to pursue any and all claims and remedies
they may have under the Old Agreements, under this Agreement or under any other
applicable agreement(s), and any claims and remedies related thereto, against
any or all persons or entities, including the parties to this Agreement, which
includes but is not limited to their officers, directors, shareholders, members,
agents, employees, consultants, attorneys, parent, subsidiary and affiliated
companies.
1
b. Additional
Consideration
- As
additional consideration to induce the Developers to enter into this Agreement,
the Company also agrees to and will issue concurrently on the date hereof to
each of the Developers, three (3) warrants to purchase shares of the Company’s
common stock (the “Warrants”), for each dollar originally invested. The amount
invested by each of the Developers and the amount of Warrants that will be
issued to each investor is set forth on Schedule C hereto, Each Warrant shall
be
exercisable for a period of seven years beginning on October 1, 2008 and shall
entitle the holder thereof to the right to purchase one (1) share of the
Company’s common stock at a price of $0.25 per share. The form of warrant is
attached as Exhibit A hereto. If the Company fails to make payment of any
Settlement Amount under subparagraph (a) above, or otherwise fails to comply
with any term of this Agreement, the Developers shall retain the Warrants issued
hereunder and, additionally, shall be permitted to pursue any and all of the
claims and remedies more fully described in subparagraph (a) above.
Section
3. Successors.
This
Agreement shall be binding upon and inure to the benefit of the Parties and
their respective administrators, representatives, executors, successors and
assigns, either by reason of death, incapacity, merger, consolidation, and/or
purchase or acquisition of substantially all of the Company’s assets or
otherwise.
Section
4. Governing
Law,
Each
Party acknowledges that it had the opportunity to be represented by counsel
in
connection with this Agreement, and has executed the same with knowledge of
its
consequences. This Agreement is made and entered into under New York law and
shall be interpreted, enforced and governed under the laws of the laws of New
York without regard to its conflicts of laws principles.
Section
5. Paragraph
Headings.
The
paragraph headings used in this Agreement are intended solely for convenience
of
reference and shall not in any manner amplify, limit, modify or otherwise be
used in the interpretation of any of the provisions hereof.
Section
6. Severability.
Should
any of the provisions of this Agreement be declared or be determined to be
illegal or invalid, the validity of the remaining parts, terms or provisions
shall not be affected thereby and said illegal or invalid part, term or
provision shall be deemed not to be a part of this Agreement.
Section
7. Entire
Agreement.
Except
as provided in the next sentence, this Agreement sets forth the entire agreement
between the Parties, and fully supersedes any and all prior agreements or
understandings between the Parties pertaining to the subject matter hereof,
including, but not limited to, the Old Agreements. Notwithstanding the
foregoing, if the Company defaults with regard to payment of any Settlement
Amounts due under this Agreement, or defaults in any other term or provision
of
this Agreement, the Developers may elect to enforce this Agreement, at their
sole option and within their sole discretion, or may pursue any and all claims
and remedies reserved under paragraphs 3(a) and (b) above. Such claims and
options are cumulative, such that the Developers may pursue any all claims
and
remedies without restriction or need for election. Further, and as set forth
above, this Agreement does not apply to the Modification and Settlement
Agreements and underlying Promissory Notes related to Indigo Well
#2,
2
Section
8. Counterparts.
This
Agreement may be executed in counterparts. Each counterpart shall be deemed
an
original, and when taken together with the other signed counterpart, shall
constitute one fully executed Agreement.
Section
9. Further
Assurances.
From
and after the date hereof, the parties hereto shall take all actions, including
the execution and delivery of all documents, necessary to effectuate the terms
hereof.
Section
10. Survival.
All
obligations of the Parties as set forth herein shall survive the execution
and
delivery hereof.
IN
WITNESS WHEREOF, the Parties have caused this Agreement to be entered into
as of
the date first written above.
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/s/
Xxxxxxx Xxxxxx
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By: Xxxxxxx
Xxxxxx
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Title: CFO
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Date: 31
Mar 08
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3
Schedule
A
|
Partner
Participant
|
%
Total Partnership
|
||
|
Xxx
Xxxxxx, Xx.
|
18.18
|
||
|
Xxxxx
Xxxxxx
|
14.77
|
||
|
Xxxxx
Xxxxxx
|
13.64
|
||
|
Xxxx
Xxxxxx, Xx.
|
11.36
|
||
|
Xxxxxx
Xxxxx
|
6.82
|
||
|
Xxx
Xxxxxxx
|
7.95
|
||
|
Xxxx
Xxxxxx, Xx.
|
6.82
|
||
|
Xxxxx
Xxxxxx, Xx.
|
5.68
|
||
|
Xxx
Xxxx
|
4.55
|
||
|
Xxxxxxx
Xxxxxx
|
3.41
|
||
|
Xxxxx
Xxxx
|
1.14
|
||
|
Don
Blatherwiek
|
1.14
|
||
|
XX
Xxxxxxx
|
2.27
|
||
|
Xxxxx
Muhlburger
|
2.27
|
||
|
TOTAL
|
100
|
4
Schedule
B
$50,000
per month
|
Partner
Participant
|
Monthly
Distribution
|
|||
|
Xxx
Xxxxxx, Xx.
|
$
|
9,090.00
|
||
|
Xxxxx
Xxxxxx
|
$
|
7,385.00
|
||
|
Xxxxx
Xxxxxx
|
$
|
6,820.00
|
||
|
Xxxx
Xxxxxx, Xx.
|
$
|
5,680.00
|
||
|
Xxxxxx
Xxxxx
|
$
|
3,410.00
|
||
|
Xxx
Xxxxxxx
|
$
|
3,975.00
|
||
|
Xxxx
Xxxxxx, Xx.
|
$
|
3,410.00
|
||
|
Xxxxx
Xxxxxx, Xx.
|
$
|
2,840.00
|
||
|
Xxx
Xxxx
|
$
|
2,275.00
|
||
|
Xxxxxxx
Xxxxxx
|
$
|
1,705.00
|
||
|
Xxxxx
Xxxx
|
$
|
570.00
|
||
|
Don
Blatherwiek
|
$
|
570.00
|
||
|
XX
Xxxxxxx
|
$
|
1,135.00
|
||
|
Xxxxx
Muhiburger
|
$
|
1,135.00
|
||
|
TOTAL
|
$
|
50,000.00
|
||
5
Schedule
C
|
Partner
Participant
|
Total
Investment
|
#
Warrants
|
|||||
|
Xxx
Xxxxxx, Xx.
|
$
|
800,000.00
|
2,400,000
|
||||
|
Tanimy
Xxxxxx
|
$
|
650,000.00
|
1,950,000
|
||||
|
Xxxxx
Xxxxxx
|
$
|
600,000.00
|
1,800,000
|
||||
|
Xxxx
Xxxxxx, Xx.
|
$
|
500,000.00
|
1,500,000
|
||||
|
Xxxxxx
Xxxxx
|
$
|
300,000.00
|
900,000
|
||||
|
Xxx
Xxxxxxx
|
$
|
350,000.00
|
1,050,000
|
||||
|
Xxxx
Xxxxxx, Xx.
|
$
|
300,000.00
|
900,000
|
||||
|
Xxxxx
Xxxxxx, Xx.
|
$
|
250,000.00
|
750,000
|
||||
|
Xxx
Xxxx
|
$
|
200,000.00
|
600,000
|
||||
|
Xxxxxxx
Xxxxxx
|
$
|
150,000.00
|
450,000
|
||||
|
Xxxxx
Xxxx
|
$
|
50,000.00
|
150,000
|
||||
|
Xxx
Xxxxxxxxxxx
|
$
|
50,000.00
|
150,000
|
||||
|
XX
Xxxxxxx
|
$
|
100,000.00
|
300,000
|
||||
|
Brace
Muhiburger
|
$
|
100,000.00
|
300,000
|
||||
|
TOTAL
|
$
|
4,400,000.00
|
13,200,000
|
||||
|
WARRANT
ISSUANCE
|
Indigo-Energy
Partners, LP
|
|||||||||
|
March
31, 2008
|
||||||||||
|
Partner
Participant
|
Total
Investment
|
#
Warrants
|
Warrant
#
|
|||||||
|
Xxx
Xxxxxx, Xx.
|
$
|
800,000.00
|
2,400,000
|
001
|
||||||
|
Xxxxx
Xxxxxx
|
$
|
650,000.00
|
1,950,000
|
000
|
||||||
|
Xxxxx
Xxxxxx
|
$
|
600,000.00
|
1,800,000
|
003
|
||||||
|
Xxxx
Xxxxxx, Xx.
|
$
|
500,000.00
|
1,500,000
|
004
|
||||||
|
Xxxxxx
Xxxxx
|
$
|
300,000.00
|
900,000
|
005
|
||||||
|
Xxx
Xxxxxxx
|
$
|
350,000.00
|
1,050,000
|
006
|
||||||
|
Xxxx
Xxxxxx, Xx.
|
$
|
300,000.00
|
900,000
|
007
|
||||||
|
Xxxxx
Xxxxxx, Xx.
|
$
|
250,000.00
|
750,000
|
008
|
||||||
|
Xxx
Xxxx
|
$
|
200,000.00
|
600,000
|
009
|
||||||
|
Xxxxxxx
Xxxxxx
|
$
|
150,000.00
|
450,000
|
000
|
||||||
|
Xxxxx
Xxxx
|
$
|
50,000.00
|
150,000
|
000
|
||||||
|
Xxx
Xxxxxxxxxxx
|
$
|
50,000.00
|
150,000
|
012
|
||||||
|
XX
Xxxxxxx
|
$
|
100,000.00
|
300,000
|
013
|
||||||
|
Xxxxx
Muhiburger
|
$
|
100,000.00
|
300,000
|
014
|
||||||
|
TOTAL
|
$
|
4,400,000.00
|
13,200,000
|
|||||||
6
