surge_8k-ex1089.htm

 

    
      

    

    Exhibit 10.89

     

    
       

    

     

    SETTLEMENT
AGREEMENT

     

    This
agreement (the "Settlement Agreement") is dated and made effective

    as of the
2nd day of February, 2010 (the "Effective Date"),

     

    BETWEEN:

     

    SURGE
GLOBAL ENERGY, INC.

     

    ("Surge")

     

    - and
-

     

    1350826 ALBERTA
LTD. (formerly known

    as
Surge Global Energy (Canada) Ltd. and Signet Energy Inc.)

     

    ("1350826")

     

    - and
-

     

    ANDORA
ENERGY CORPORATION

     

    ("Andora")

     

    WHEREAS:

     

    
      
        	
                A.

              	
                Pursuant
      to a release and indemnification agreement dated November 15, 2005
      between Surge
      and 1350826 (then known as Surge Global Energy (Canada) Ltd.), (the
      "Indemnification Agreement"), Surge
      agreed
      to indemnify and save 1350826 (then known
      as Surge Global Energy (Canada) Ltd.) harmless of and from any
      Damages (as defined
      in the Indemnification Agreement) incurred in respect of, among
      other things, claims by Dynamo Energy
  Corporation;

              


      

    

     

    
      
        	
                B.

              	
                As security
      for the
      indemnification obligations of Surge pursuant to the Indemnification
      Agreement, Surge and
      1350826 (then known as Surge Global Energy (Canada) Ltd.) entered into an escrow agreement (the "Escrow Agreement") with Valiant Trust
      Company
      dated November 15, 2005 pursuant to which Surge deposited 6,300,000
      common shares of
      Surge Global Energy (Canada) Ltd. into escrow to satisfy the amount
      of any Claim
      (as
      defined in the escrow agreement) that 1350826 (then known as Surge Global Energy (Canada) Ltd.)
      became entitled to recover from Surge pursuant to the Escrow
      Agreement;

              


      

    

     

    
      
        	
                C.

              	
                On
      November 16, 2005, Surge Global Energy (Canada) Ltd. changed its
      name to Signet Energy Inc.

              


      

       

    

    
      	
              D.

            	
              Pursuant
      to
      an arrangement agreement dated August 15,
      2007 among Pan Orient Energy Corp., Andora, Signer Energy Inc., 1337686
      Alberta Ltd. and Valiant Trust Company and a plan of arrangement
      (the "Plan of Arrangement") in
      respect thereof approved by the shareholders of Signet Energy Inc. and the
      Court of Queen's Bench (Alberta) (the "Arrangement"), Signet Energy Inc. and
      1337686 Alberta Ltd. were amalgamated to form 1350826 and all of the
      outstanding common shares of Signet Energy inc. were exchanged for common
      shares of Andora on the basis of approximately 0.296895 common shares of
      Andora for each common share of Signet Energy
  Inc.;

            


    

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


     

    
      
        	
                E.

              	
                Pursuant
      to the Arrangement, 1,500,000 of the common shares of Andora (the "2007 Escrowed Shares") issued in exchange
      for common shares of Signet Energy Inc. were placed into escrow with
      Valiant Trust Company to be held in accordance with the terms and
      conditions of the Plan of
Arrangement;

              


      

    

     

    
      
        	
                F.

              	
                In
      connection with the Arrangement, the 6,300,000 common shares of Surge
      Global Energy (Canada) Ltd. held in escrow pursuant to the Escrow
      Agreement were exchanged for 1,870,439 common shares of Andora (the "2005 Escrowed Shares"), which shares
      remained subject to the terms and conditions of the Escrow
      Agreement;

              


      

    

     

    
      
        	
                G.

              	
                Dynamo
      Energy Corporation filed a claim (the "California Claim") against Surge, Signet
      Energy Inc. and others in the Superior Court of California, County of San
      Diego, however, it was subsequently determined that the
      California court did not have
jurisdiction;

              


      

    

     

    
      
        	
                H.

              	
                Following
      the decision of the California court, Dynamo Energy Corporation filed a
      claim (the "Alberta Claim" and,
      together with the California Claim, the "Dynamo Claims") against Surge, Signet
      Energy Inc., Andora, 1237686 Alberta Ltd., 1350826, David Perez and C.W.
      Leigh Cassidy in the Court of Queen's Bench (Alberta), which claim now
      stands dismissed as a result of the failure of Dynamo Energy Corporation
      to pay security for costs pursuant to an order of the Court of Queen's
      Bench (Alberta) dated June 29,
2009;

              


      

    

     

    
      
        	
                I.

              	
                1350826
      and Andora have incurred certain legal expenses (the "Indemnified Expenses") to the date of
      this settlement Agreement in connection with the Dynamo Claim for which
      Surge is obligated to indemnify and save harmless 1350826 and Andora
      pursuant to the Indemnification
Agreement;

              


      

    

     

    
      
        	
                J.

              	
                Surge,
      1350826 and Andora have agreed to settle the Indemnified Expenses (the
      "Settlement") and wish to formally
      set out herein the terms of the Settlement and such further terms as may
      be necessary in order to give effect
thereto:

              


      

    

     

    NOW THEREFORE, for good and valuable
consideration, the receipt and existence of which is hereby acknowledged, Surge,
1350826 and Andora covenant and agree with each either as follows:

     

    
      	
              1.

            	
              SETTLEMENT

            


    

     

    
      	
              1.1

            	
              Surge,
      1350826 and Andora hereby acknowledge and agree that the. amount of the
      Indemnified Expenses shall be CDN
$600,000.

            


    

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


     

    
      	
              1.2

            	
              The
      Indemnified Expenses shall be settled in full by the release from escrow
      and delivery of 375,000 of the 2005 Escrowed Shares to Andora for
      cancellation.

            


    

     

    
      	
              1.3

            	
              Following
      the release from escrow and delivery of 375,000 of the 2005 Escrowed
      Shares to Andora,the
      remaining 2005 Escrowed Shares shall be released from escrow and delivered
      to, or to the direction of, Surge and the Escrow Agreement shall be
      terminated in accordance with its
terms.

            


    

     

    
      	
              1.4

            	
              Each of Surge, 1350826 and Andora
      shall execute and deliver to Valiant Trust Company a release notice, substantially
      in the form of the release notice attached as Schedule A hereto, authorizing and directing
      Valiant Trust Company to release the 2005 Escrowed Shares as described in
      paragraphs 1.2 and 1.3 of
      this Settlement Agreement.

            


    

     

    
      	
              1.5

            	
              Following
      the release and delivery of the 2005 Escrowed Shares to Andora pursuant to
      paragraph 1.2 of this Settlement Agreement, Surge shall have no further liability
      to 1350826 or Andora for
      the Indemnified Expenses; provided however that
      Surge shall indemnify and save
      harmless 1350826 and Andora and each of their respective shareholders,
      current and former directors, officers, employees, agents and
      representatives (collectively, the "Indemnified Persons") from and against
      any loss, liability, claim, damage or expense (including legal expenses)
      suffered by, imposed upon or asserted against any of the Indemnified
      Persons after the Effective Date as a result of, in respect of, connected
      with, or arising our of under, or pursuant to the Dynamo Claim. The indemnity contained in
      this paragraph 1.5 shall survive the Settlement and continue in
      full force and effect until August 29,
2011.

            


    

     

    
      	
              1.6

            	
              Following
      the release and delivery of the 2005 Escrowed Shares to Andora pursuant to
      paragraph 1.2 of this Settlement Agreement, Andora shall
      deliver a release
      notice to Valiant Trust Company in accordance with the terms and
      conditions of the
      Plan of Arrangement
      instructing Valiant Trust Company to release the 2007 Escrowed
      Shares to the registered holders thereof in accordance with the terms and
      conditions of the Plan
      of Arrangement.

            


    

     

    
      	
              1.7

            	
              This
      Settlement Agreement shall not prejudice Surge's rights to tax the legal
      fees of Macleod Dixon LLP in connection with their defense of the Dynamo
      Claim; provided however that neither 1350826 nor Andora shall have any
      obligation to
      participate in, assist with or otherwise cooperate with Surge in
      respect of such taxation.

            


    

     

    
      	
              2.

            	
              GENERAL

            


    

     

    
      	
              2.1

            	
              The recitals to this Settlement
      Agreement are hereby incorporated and form part of the agreement between the parties,
      with the same force and effect as if contained in the body of the Settlement
      Agreement

            


    

     

    
      	
              2.2

            	
              This Settlement Agreement
      shall entire to the benefit of and be binding upon the
      respective
      successors and assigns of the parties
  hereto.

            


    

     

    
      	
              2.3 

            	
              Each
      of the parties hereto agrees to execute and deliver, from time to time,
      without further consideration, such further or other deeds or documents
      and to do such other acts and things as may reasonably be required to give
      full force and effect to the terms of this Settlement
      Agreement.

            


    

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


     

    


    
      	
              2.4

            	
              This
      Settlement Agreement shall be governed in accordance with the laws of the
      Province of Alberta and the parties do hereby irrevocably submit and
      attorn to the jurisdiction of the Courts of the Province of
      Alberta for all matters related to this Settlement Agreement,
      including its validity and
interpretation.

            


    

     

    
      	
              2.5

            	
              Time
      shall be and remain of the essence of this Settlement
      Agreement.

            


    

     

    
      	
              2.6

            	
              This
      Settlement Agreement may be executed
      in any number of counterparts, each of which shall be deemed to be an
      original, and all of which taken together shall be deemed to constitute
      one and the same instrument, and it shall not be necessary in making proof
      of this Settlement Agreement to produce or account for
      more than one full set of
counterparts.

            


    

     

    
      	
              2.7

            	
              Transmittal of a party's originally executed
      execution page of This Settlement Agreement to the other party may be
      by facsimile or PDF, in
      which case such execution shall be deemed to be the same as if an original
      thereof were delivered in
lieu.

            


    

     

    
      	
              2.8

            	
              This
      Settlement Agreement constitutes the entire agreement between the parties
      related to its subject matter and, except as herein stated and in any
      of the instruments
      and documents that may be executed and delivered pursuant hereto,
      contains all of the representations, undertakings, and agreements of the
      respective parties concerning the subject matter hereof.
      There are no verbal representations, undertaking or
      agreements between the parties of any kind related to the subject
      matter hereof except those contained
herein.

            


    

     

     

     

     

     

     

     

     

     

     

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


     

    IN
WITNESS WHEREOF the parties have properly executed this Settlement Agreement
with full authority on behalf of the signatories to do so.

     

    
 

    
      	
              SURGE
      GLOBAL ENERGY, INC.

               

              Per: 
        /s/ E. Jamie
      Schloss                            
      

              CEO

            	
              1350826
      ALBERTA LTD.

               

              Per:  /s/ Greg
      Cave                                  
      

               

               

               

              ANDORA
      ENERGY CORPORATION

               

              Per:  /s/ Greg
      Cave                                   
      

            


    

     

     

     

     

     

     

     

     

     

     

    
 

    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    
      	 
      


    

     

    SCHEDULE
A 

     

    Release
Notice

     

    
      	
              To: 

            	
              Valiant
      Trust Company

            


    

     

    Reference
is made to the escrow agreement (the "Escrow
Agreement") dated November 15, 2005 among Valiant Trust Company (the "Escrow Agent"), 1350826 Alberta Ltd.
(then known as Surge Global Energy (Canada), Ltd.) and Surge Global Energy Inc.
In accordance with the terms of the Escrow Agreement, each of the undersigned hereby
irrevocably authorize and direct the Escrow Agent to release the Escrowed
Shares, consisting of an aggregate of 1,870,439 common shares of Andora Energy
Corporation, as set forth below:

     

    
      	
              1.

            	
              release
      and deliver 375,000
      of the Escrowed Shares to Andora Energy Corporation for
      cancellation; and

            


    

     

    
      	
              2. 

            	
              release
      and deliver the remainder of the Escrowed Shares to Surge Global Energy
      Inc.

            


    

     

    Upon
release and delivery of the Escrowed Shares as aforesaid, the Escrow Agreement
will terminate in accordance with its terms.

     

    All
capitalized terms used, but not otherwise defined, herein shall have the
respective meanings ascribed thereto in the Escrow Agreement.

     

    This
Release Notice may be executed in counterpart, each of which when so executed
shall be deemed to be an
original, and such counterparts shall constitute one and the
same instrument and, notwithstanding their date of execution, shall be
deemed to bear date as of the date of this Release Notice. This Release Notice
shall be considered properly executed by a party if executed by that party and
transmitted by facsimile or transmitted electronically in either Tagged Image
Format Files (TIFF) or
Portable Document Format (PDF).

     

     

    DATED as
of the day of February, 2010.

     

     

     

    
      
        	
                1350826
      ALBERTA LTD.

                
                   

                  Per:  /s/ Greg
      Cave                                  
      

                   

                   

                   

                  ANDORA
      ENERGY CORPORATION

                   

                  Per:  /s/ Greg
      Cave                                   
      

                

                 

                 

                 

              	
                 

                
                  SURGE
      GLOBAL ENERGY, INC.

                   

                  Per: 
        /s/ E. Jamie
      Schloss                            
      

                  CEO