SETTLEMENT AND RELEASE AGREEMENT FOR COMMON STOCK
Exhibit
99.2
FOR
COMMON STOCK
KAL
Energy, Inc.
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To:
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KAL
Energy, Inc.
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World
Trade Center 14th Floor
Xx.
Xxxxxxxx Xxxxxxxx Xxx. 00-00
Xxxxxxx
00000, Xxxxxxxxx
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In light of both parties desire to
resolve the debts of KAL Energy, Inc., a Delaware corporation (the “Company”)
with the undersigned, this Settlement and Release Agreement (the “Agreement”) is
made between the Company and the undersigned, whereby the undersigned (the
“Creditor”) will take ________________________________________ shares of common
stock , par value $0.0001 per share, (the “Shares”) of the Company in complete
settlement and satisfaction of the $__________________________________ (the
“Settlement Amount”) owed the Creditor, which is effectively a purchase price of
$0.012 per common share (the “Purchase Price”). This Agreement is in
accordance with and subject to the terms and conditions described
below.
In
consideration of the and Company’s agreement to sell the Shares to the Creditor
for the Settlement Amount upon the terms and conditions contained herein, the
Creditor agrees and represents as follows:
B.
Settlement and
Release.
1. The
Company’s issuance of the Shares for the Settlement Amount will constitute
complete satisfaction of all of the demands, debts, accounts and obligations
between the Creditor and the Company.
2. The
Creditor hereby forever releases and discharges the Company and its parent,
subsidiaries and affiliated entities, and each of their past, present and future
officers, directors, shareholders, agents, employees and insurers, and their
successors and assigns, from any and all complaints, charges, claims,
liabilities, demands, debts, accounts, obligations, promises, suits, actions,
causes of action, and demands in law or equity, including claims for damages,
attorney fees or costs, whether known or unknown, which the Creditor now has or
claims to have, or which the Creditor at any time may have had or claimed to
have, or which the Creditor at any time hereafter may have, or claim to have,
arising at any time in the past to and including the date of this Agreement,
regarding any matter relating in any way to the Settlement Amount.
3. The
Creditor further acknowledges and agrees that this Agreement shall operate as a
complete bar to recovery in any and all litigation, charges, complaints,
grievances or demands of any kind whatsoever now pending or now contemplated, or
which might at any time be filed including, but without limiting the generality
of the foregoing, any and all matters arising out of or in any manner whatsoever
connected with the Settlement Amount. Upon delivery of the Shares by the Company
to the Creditor each and all of the claims regarding any matter relating in any
way to the Settlement Amount are hereby fully and finally settled, compromised
and released.
4. Notwithstanding
the foregoing and for clarity sake, the Creditor does not release or discharge
the Company from any of its indemnification obligations that it may have, that
have arisen, or could arise, with respect to the Creditor stemming from
Creditor’s service as a director of the Company during the period of Creditor’s
service to the Company as a director.
C.
Terms of
Subscription.
1. The
Creditor hereby irrevocably subscribes for and agrees to convert its Settlement
Amount for the Shares. Upon execution of this Agreement by the Creditor, a stock
certificate for the number of Shares purchased will be issued in the name of the
Creditor, and the name of such Creditor will be registered on the stock transfer
books of the Company as the record owner of such Shares. In due
course, the Company will issue and deliver to the Creditor the stock
certificates representing the Shares purchased.
2. The
Creditor hereby agrees to be bound thereby upon the (i) execution and delivery
to the Company of this Agreement and (ii) acceptance by the Company of the
Agreement.
3. The
Creditor is an “accredited investor” as such term is defined in Regulation D
under the Securities Act of 1933, as amended (the “Securities Act”), for the
following reason (Please initial one or
more):
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____
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My
individual income was in excess of $200,000 in each of the past two years,
or my joint income with my spouse was in excess of $300,000 in each of
those years, and I reasonably expect my income to reach the same level in
the current year.
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____
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My
individual net worth or joint net worth with my spouse exceeds
$1,000,000.
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____
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The
Creditor is a trust, corporation or partnership with total assets in
excess of $5,000,000, not formed for the specific purpose of acquiring the
Shares, whose purchase of the Shares will be directed by a person whose
knowledge and experience in financial and business matters is such that he
or she is capable of evaluating the merits and risks of the investment in
the Shares.
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____
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The
Creditor is an entity in which all of the equity owners are accredited
investors.
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____
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Other
(Please specify):
_______________________________________
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_________________________________________________________
4. because
the purchaser is a director and executive officer of the Company.
G.
Experience and
Suitability. The Creditor has such knowledge and experience in
financial and business matters to evaluate the merits and risks of an investment
in the Shares and to make an informed decision relating thereto. The
Creditor has the financial capability for making and protecting the investment
and can afford a complete loss of the investment. The investment is a
suitable one for the Creditor.
H.
No Need for
Liquidity. The Creditor is aware that this investment may not
be readily liquidated in case of an emergency and that the Shares being
purchased may have to be held for an indefinite period of time. The
Creditor’s overall commitment to investments which are not readily marketable is
not excessive in view of my/its net worth and financial circumstances and the
purchase of the Shares will not cause such commitment to become
excessive. In view of such facts, the Creditor has adequate means of
providing for any current needs, anticipated future needs and possible
contingencies and emergencies and has no need for liquidity in the investment in
the Shares. The Creditor is able to bear the economic risk of this
investment.
I.
Opportunity to
Investigate. The Creditor has familiarized itself with all of
the Company’s publicly available filings and other information contained at the
Securities and Exchange Commission’s data retrieval system at:
xxxx://xxxx.xxx.xxx/xxx-xxx/xxxxxx-
idea?action=getcompany&CIK=0001162895&owner=exclude&count=40
(generally
- xxxx://xxxx.xxx.xxx/xxxx/xxxxxxxxxx/xxxxxxxxxxxxx_xxxx.xxxx)
and prior
to the execution of this Agreement, the Creditor has had the opportunity to ask
questions of, and receive answers from, representatives of the Company
concerning the terms and conditions of this transaction, and the finances,
operations, business and prospects of the Company. The Creditor has
also had the opportunity to obtain additional information necessary to verify
the accuracy of information furnished about the Company. Accordingly,
the Creditor has independently evaluated the risks of converting the Settlement
Amount into the Shares at the Purchase Price, and the Creditor has received
information with respect to all matters which the Creditor considers material to
the Creditor’s decision to make this investment.
J.
Risk
Factors. The Creditor has carefully considered the potential
risks relating to the Company and a purchase of the Shares. The
Creditor fully understands that the Company has a limited financial and
operating history and that the Shares are speculative investments which involve
a high degree of risk of loss of the Creditor’s entire
investment. The Creditor is familiar with the general risks of
investment in companies with a limited operating history. The
Creditor understands that the Company is subject to all of such risks, and to
all of the risks inherent in any junior mining and mineral exploration
company.
H.
Investment
Purpose. The Creditor is acquiring the Shares for the
Creditor’s own account for the purpose of investment and not with a view to, or
for resale in connection with, the distribution thereof, nor with any present
intention of distributing or selling the Shares. The Creditor
understands that the Shares have not been registered under the Securities Act or
the securities laws of any state, and the Creditor hereby agrees not to make any
sale, transfer or other disposition of any such Shares unless either (i) the
Shares first shall have been registered under the Securities Act and all
applicable state securities laws, or (ii) an exemption from such registration is
available, and the Company has received such documents and agreements from the
Creditor and the transferee as the Company requests at such time.
I.
Legends. The
Creditor understands that until the Shares have been registered under the
Securities Act and applicable state securities laws each certificate
representing such securities shall bear a legend substantially similar to the
following:
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THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE
SECURITIES LAWS, HAVE BEEN ACQUIRED FOR INVESTMENT, AND MAY NOT BE SOLD,
PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED UNLESS A REGISTRATION
STATEMENT UNDER THE ACT AND APPLICABLE STATE LAW IS IN EFFECT WITH REGARD
THERETO OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE.
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J.
No Regulatory Approval
of Merits. The Creditor understands that neither the
Securities and Exchange Commission nor the commissioner or department of
securities or attorney general of any state has passed upon the merits or
qualifications of, nor recommended nor approved, the Shares. Any
representation to the contrary is a criminal offense.
K.
Independent
Advice. The Creditor understands that the Creditor is urged to
seek independent advice from professional advisors relating to the suitability
for the Creditor of an investment in the Company in view of the Creditor’s
overall financial needs and with respect to the legal and tax implications of
such an investment.
O.
Indemnification. The
Creditor understands the meaning and legal consequences of this Agreement and
agrees to indemnify and hold harmless the Company and each director and officer
thereof from and against any and all loss, damage or liability due to or arising
out of a breach of any representation, warranty or agreement of the Creditor
contained in this Agreement.
P.
Authority and
Noncontravention. The execution and performance hereof
violates no order, judgment, injunction, agreement or controlling document to
which the Creditor is a party or by which the Creditor is bound. If
an organization, (i) the Creditor is duly organized, validly existing and in
good standing under the laws of the jurisdiction in which it has been formed;
(ii) the Creditor has the right and power under its organizational instruments
to execute, deliver and perform its obligations hereunder; and (iii) this
Agreement has been duly authorized by all necessary action on the part of all
officers, directors, partners, stockholders and trustees and will not violate
any agreement to which the Creditor is a party; and (iv) the individual
executing and delivering this Agreement has the requisite right, power, capacity
and authority to do so on behalf of the organization. The Creditor
has not been organized for the purpose of subscribing for the
Shares.
Q.
Duration. The
Creditor understands that the Creditor may not cancel, terminate or revoke this
Agreement or any agreement made by the Creditor hereunder and that this
Agreement shall survive the Creditor’s death or disability and shall be binding
upon the Creditor’s heirs, executors, administrators, successors and
assigns.
R.
Miscellaneous.
7. Notices. Notices
required or permitted to be given hereunder shall be in writing and shall be
deemed to be sufficiently given when personally delivered or sent by registered
mail, return receipt requested, addressed: (i) if to the Company, to the address
listed above, Attention: Xxxxxx Xxxxxxxxx, or (ii) if to the Creditor, at the
address set forth in Part O, or at such other address as may have been specified
by written notice given in accordance with this paragraph.
8. Entire
Agreement. This Agreement embodies the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior oral or written agreements and understandings
relating to the subject matter hereof. No statement, representation,
warranty, covenant or agreement of any kind not expressly set forth in this
Agreement shall affect, or be used to interpret, change or restrict, the express
terms and provisions of this Agreement.
9. Modifications and
Amendments. The terms and provisions of this Agreement may be
modified or amended only by written agreement executed by the parties
hereto.
10. Waivers and
Consents. Failure of the Company to exercise any right or
remedy under this Agreement or any other agreement between the Company and the
Creditor, or otherwise, or delay by the Company in exercising such right or
remedy, will not operate as a waiver thereof. No waiver by the Company will be
effective unless and until it is in writing and signed by the
Company.
11. Counterparts. This
Agreement may be executed in one or more counterparts, and by telefax
transmission, and each such counterpart shall be deemed an original, and all of
which, when taken together, shall constitute but one and the same
instrument.
12. Governing
Law. This Agreement shall be enforced, governed and construed
in all respects in accordance with the laws of the State of Delaware, as such
laws are applied by the Delaware courts to agreements entered into and to be
performed in Delaware by and between residents of Delaware, and shall be binding
upon the Creditor, the Creditor’s heirs, estate, legal representatives,
successors and assigns and shall inure to the benefit of the Company, its
successors and assigns. If any provision of this Agreement is invalid or
unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and
shall be deemed modified to conform with such statute or rule of law. Any
provision hereof that may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision
hereof.
Q.
The Creditor is purchasing the Shares as follows (please check as
appropriate):
______ individually
______ in trust
______ joint
tenants
______ as a partnership
______ tenants in
common
______ other:_______________________
Name:
______________________________________________________
Telephone:
__________________________________________________
Home Address:
_______________________________________________
City:
_________________ State: ______________________________
Zip: __________________
Business: ____________________________________________________
Address:
_____________________________________________________
City:
_________________ State: ______________________________
Zip: __________________
Business Telephone:
____________________________________________
Communications should be sent
to: ________
business or
________ home address
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Federal
Income Tax I.D. No. (Social Security Number
for
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Individual
Investors)
______________________________
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R.
Under penalties of perjury, the Creditor certifies that:
1. The
Company has my correct Taxpayer Identification Number (Social Security Number
for Individual Investors);
2. The
Creditor is not subject to backup withholding either because the Creditor has
not been notified by the Internal Revenue Service (IRS) that the Creditor is
subject to backup withholding as a result of a failure to report all interest or
dividends, or the IRS has notified the Creditor that the Creditor is no longer
subject to backup withholding.
IN
WITNESS WHEREOF, the Creditor has executed this Agreement as of this
27th day
of February, 2009.
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Signature
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Print
Name
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***************************************************************
The
foregoing settlement and release and subscription for Shares of KAL Energy, Inc.
is hereby accepted.
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KAL
Energy, Inc.
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//s//
Xxxxxx Xxxxxxxxx
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Xxxxxx
Xxxxxxxxx, Chief Financial Officer
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DATE:
February 27, 2009
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