GLOBAL FINANCING AGREEMENT
This
Global Financing Agreement (the "Agreement") is made
and entered into as of this 30th day of November 2008 by and between
Indigo-Energy, Inc., a corporation organized under the laws of the State of
Nevada (the "Company"), and Xxxx Xxxxxx Capital, LLC ( “CMC“ and together with
the Company, the “Parties”.)
WHEREAS, the Company
previously issued various promissory notes (the “Old Notes”) to CMC in the
aggregate principal amount of $3,450,000. Each of the Old Notes set
forth certain terms intended to govern such Old Notes and further provide for
interest at a rate of 20% per annum and 9 of the 12 Notes entitle CMC to convert
the balance of the Old Notes into shares of the Company’s common
stock;
WHEREAS, loans from CMC
has provided the Company with sufficient working capital in the past twelve (12)
months which has allowed the Company to remain solvent and remain current in the
filings required by the Securities and Exchange Commission;
WHEREAS, CMC and the Company
have agreed to convert certain outstanding debt into equity.
WHEREAS, the Parties have
agreed that it is in their best interests to modify all of the terms provided
under the Old Notes, including those terms relating to interest and maturity;
and
WHEREAS, CMC has further
agreed to provide additional funding, under the terms and conditions set forth
herein, the Company as is necessary for it to institute a new drilling program
and for other costs associated thereto.
NOW THERFORE, the Parties
hereto agree as follows:
Section
1.
Settlement of the Old
Notes.
Effective upon the execution of this Agreement, the Parties hereby agree to
restructure the Old Notes as follows:
a. The
principal amount and interest payable on Old Notes in the aggregate amount of
One Million Dollars ($1,000,000) (the “First Notes”) specifically identified as
CMC Promissory Notes II, IV, and V shall be converted into Fifty Million
(50,000,000) shares of the Company’s common stock, par value $0.001 (the “Common
Stock”). The certificate or certificates of Common Stock issued
to CMC pursuant to this Section 1(a) shall contain a restrictive legend as
required by the Securities Act of 1933. Upon conversion as provided
for herein, the Company shall be released of all its obligations under the First
Notes; except that the Company shall be obligated to issue to CMC, within seven
(7) business days, the certificates representing Fifty Million shares of Common
Stock to CMC;
b.
The remaining Old Notes in the principal amount of Two Million Four Hundred
Fifty Thousand ($2,450,000) (the “Second Notes”), specifically identified as CMC
Promissory Notes I, III, VI, VII, VIII, IX, X, XI, and XII plus interest of
approximately $400,000 on all of the Old Notes shall immediately be amended and
replaced by a revised promissory note (the “Revised Note”), a copy of which is
attached hereto as Exhibit A, which shall be delivered to CMC upon the execution
of this Agreement and which shall provide for the following:
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i.)
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The
Revised Note shall be secured by all the assets of the
Company;
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ii.)
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The
interest rate payable on the Revised Note shall be reduced from twenty
percent (20%) per annum to ten percent (10%) per
annum;
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iii.)
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The
Revised Note shall have a maturity date of no earlier than sixty (60)
months from the date of issuance thereof (the “Maturity
Date”);
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iv.)
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The
principal amount and interest due on the Revised Note shall be payable in
equal monthly installments beginning in the thirteenth month from the date
of the issuance in equal monthly payments fully amortizing the principal
and interest of such Revised Note until the Maturity Date;
and
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v.)
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That
upon the issuance of the Revised Note, the Second Notes shall be deemed to
be released and all of the Company’s liabilities or obligations there
under shall be extinguished.
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Section
2.
Undertaking of
the Parties. The Parties further undertake as
follows:
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a.
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CMC’s
Undertaking:
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i.)
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CMC
undertakes to provide the Company funding in an amount up to One Million
Dollars ($1,000,000) (the “Funding”) to be used exclusively for the
Company’s Drilling Activities (as defined below in Section
2(b)(i)). A portion of this Funding sufficient to drill the
first of two xxxxx shall be deposited by CMC into escrow with the trust
account of Xxxxxxx Xxxxxx LLP (as set forth in Section 2(b)(iii) hereof)
on or before December 10, 2008, and shall be evidenced by a two (2) year
promissory note issued by the Company in favor of CMC. Such
promissory note shall bear interest at the rate of ten percent (10%) per
annum. Interest only shall be payable on the promissory note
during the first twelve (12) months from issuance thereof, with the
principal amount thereof, and any interest thereon, to be payable in
twelve (12) equal monthly installments beginning the thirteenth (13th)
month from issuance until maturity.
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ii.)
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Commencing
when the Drilling Activities have been completed, CMC hereby agrees to
provide the Company with funding in an amount of Five Hundred Thousand
Dollars ($500,000) each month for a period of six months from the
completion of such Drilling Activities (the “Additional
Funding”). This Additional Funding is to be utilized to meet
the Company’s drilling objectives of a minimum of one new well to be
drilled each month and for certain expenses necessary to maintain the
Company’s operations and status as a public company. CMC’s
obligation to provide the Additional Funding shall not begin until thirty
(30) days from the completion of Drilling
Activities. Funding shall be in the form of a promissory
note for each loan with a two (2) year maturity and shall provide for an
interest rate of ten percent (10%) per
annum.
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iii.)
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CMC
agrees and undertakes to cooperate with the Company in investigating the
feasibility of instituting legal action against certain entities and
individuals that the Parties believe it has a claim
against. CMC commits to advance up to Sixty Thousand Dollars
($60,000) to commence such
litigation.
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iv.)
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CMC
agrees to use his best efforts to initiate and maintain discussions with
all of the Company’s creditors, note holders, and with the individuals
representing Indigo-Energy, LP in order to provide them with the assurance
that CMC will continue to work with the Company in the fulfillment of its
obligations to such parties.
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v.)
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CMC
acknowledges that the Company has substantial obligations to certain
professionals and agrees to cooperate with the Company and to fund the
satisfaction of such liabilities.
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vi.)
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CMC
undertakes to use his best efforts to fund and facilitate the settlement
of all of the Company’s obligations under the Drilling and Operating
Agreements between the Company and Dannic Energy Corp and Mid East Oil
Company on commercially reasonably terms in order that the xxxxx drilled
pursuant to such agreements, as well as all revenues earned there from,
are granted to the Company.
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b.
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The
Company’s Undertaking:
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i.)
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To
use all amounts received by it from the Funding exclusively to pay for all
reasonable costs incurred by the Company in drilling 2 xxxxx within the
property designated as the XxXxxx Field (“Drilling
Activity”).
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ii.)
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The
Company shall, upon consultation and with the approval of CMC, enter into
a definitive drilling agreement with Xxxxxxxx Drilling and Epicenter Oil
and Gas LLC setting forth the rights and obligations of each party thereto
relative to drilling activities on the XxXxxx Field; provided however,
that all parties acknowledge that the agreement will provide that the
lawful owner of the Xxxxxx real property shall receive a percentage of the
working interest in such xxxxx and the remaining interest shall be divided
by and among Epicenter, Xxxxxxxx and the Company, in such percentages as
may be agreed upon by the parties
thereto.
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iii.)
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Upon
the execution of this Agreement, the Company undertakes to appoint Xx.
Xxxxxxx Xxxxxx as the Company’s Chief Operating Officer. The
Company represents and warrants that all the necessary approval required
to facilitate the appointment of Xx. Xxxxxx as the Company’s COO have been
obtained or will be obtained and that there are no legal impediments that
will prevent the Company from making such
appointment.
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Section
3. Consideration. As
consideration for the undertaking of each of the Parties as set forth in this
Agreement, the Parties hereby agree as follows:
a. The
Company shall issue to CMC an aggregate of Fifty Million (50,000,000) shares of
Common Stock for the conversion of the First Notes as set forth in Section
1(a).
b. The
Company shall issue to CMC an aggregate of One Hundred Twenty Five Million
(125,000,000) shares of Common Stock for the conversion to the Revised
Note.
c. The
Company shall issue to CMC warrants to purchase Thirty Seven Million Nine
Hundred Fifty Thousand (37,950,000) shares of Common Stock, which warrants shall
be exercisable within seven (7) years at an exercise price of $0.02 per share,
the current market price of the Company’s common stock. Such warrants
shall only be exercisable in the event that current holders of the Thirty Seven
Million Nine Hundred Fifty Thousand (37,950,000) outstanding warrants/options
previously issued by the Company exercise such warrants or options.
d. Upon
the occurrence of the Funding set forth is Section 2(a)(i) hereof, the Company
shall issue to CMC Fifty Million (50,000,000) shares of Common
Stock. The certificate or certificates representing the Common Stock
issued to CMC pursuant to this Section 3(c) shall contain a restrictive legend
as required by the Securities Act of 1933.
e. In
consideration of the commitment for the Additional Funding, the Company shall
issue to CMC Ten (10) shares of Common Stock for every dollar pledged to the
Company from such Additional Funding or an aggregate of thirty million
(30,000,000) shares . These shares shall be effective immediately and
issued upon the Company’s increase in its shares authorized in sufficient
quantity to allow the issuance.
f. The
certificates evidencing the shares of Common Stock to be delivered to CMC
pursuant to this Agreement shall be delivered by the Company to CMC within seven
(7) business days from the execution of this Agreement and shall contain a
restrictive legend as required by the Securities Act of 1933.
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Section
4. 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
5. Governing
Law, Each Party acknowledges that it has been 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
6.
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
7. 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
8.
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
Notes. Notwithstanding the foregoing, if either party defaults in any
payments due under this Agreement, or defaults in any other term or provision of
this Agreement, the other party shall be entitled to enforce this Agreement, at
its sole option.
Section
9. 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
10.
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
11. Survival. All
obligations of the Parties as set forth herein shall survive the execution and
delivery hereof.
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of Page Intentionally Left Blank]
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IN
WITNESS WHEREOF, the Parties have caused this Agreement to be entered into as of
the date first written above.
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________________________
By: Xxxxxx
X. Xxxxxx
Title:
Chief Executive Officer
Date:
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XXXX
XXXXXX CAPITAL, LLC
________________________
By: Xxxxxxx
Xxxxxx
Title:
Date:
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