Unassociated Document


    LETTER
AGREEMENT

     

    This Letter Agreement is made this
20th
day of May, 2009, by and between the following:

     

    Indigo-Energy,
Inc. (“Indigo”); Epicenter Oil & Gas, LLC (“Epicenter”); Spectrum
Facilitating Technologies, LLC (“Spectrum”); and Lawrence Stowe, PhD
(“Consultant”).

     

    
      	
               
      

            	
              1.

            	
              Indigo
      and Epicenter have drilled four (4) wells in Dubois Field, Dubois County,
      Indiana, for the production of natural gas and/or oil, including one
      vertical well and two horizontal wells in the New Albany Shale, and one
      horizontal well in the Devonian
limestone.

            


    

     

    
      	
               
      

            	
              2.

            	
              Additional
      funds are needed to complete the four wells and place them into
      production.  Spectrum has arranged for said financing to
      accomplish the foregoing in the amount of $5,000,000 (five million
      dollars).

            


    

     

    
      	
               
      

            	
              3.

            	
              Indigo
      and Epicenter have reached an accord with respect to the use of said
      $5,000,000 as defined below for the placing of the Dubois Field into full
      operation and production.

            


    

     

    The
parties agree as follows:

     

    
      	
            	
              A.

            	
              Numbers
      1, 2 and 3 above are true and correct, and by reference are incorporated
      into this Agreement.

            


    

     

    
      	
            	
              B.

            	
              Spectrum
      shall arrange for funding in the amount of $5,000,000 which shall be
      deposited into a bank account subject to the control and direction of
      Spectrum.  The amount of funds drawn down from said $5,000,000
      shall bear interest at the rate of 10% (ten percent) per
      annum.  Interest shall be paid annually with the first payment
      being due on or before one year from the date of first disbursement of any
      funds from said bank account, or upon repayment of the $5,000,000,
      whichever is first.

            


    

     

    
      	
            	
              C.

            	
              Indigo
      and Epicenter shall form a new LLC (“Newco”)for the purpose of executing
      the terms of this Letter Agreement, and shall have two Managing Members,
      Robert Turnage from Epicenter directing all well and field related
      operations and Stanley L. Teeple from Indigo directing all administrative
      and accounting functions.  Newco shall be owned 50% (fifty
      percent) by Indigo and 50% (fifty percent) by Epicenter.  Newco
      shall open a bank account into which disbursement of funds from the
      Spectrum account shall be deposited.  Withdrawals from said
      account shall be made based upon written requests. Disbursements from the
      Newco account shall not exceed the following amounts, and are to be used
      for the following purposes:

            


    

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      	$ 	
                                              600,000

                                            	 	 	
                                              Indigo
      overhead and expenses for 4 months

                                            
	 	
                                              1,900,000

                                            	 	 	
                                              Current
      well payables

                                            
	 	
                                                750,000

                                            	 	 	
                                              4
      wells completion expenses

                                            
	 	
                                                280,000

                                            	 	 	
                                              Dubois
      Field and Reef overhead and field operations for 4
  months

                                            
	 	
                                                500,000

                                            	 	 	
                                              $300,000
      initial and two 100,000 monthly payments toward

                                            
	 	 
      	 	 	
                                              forbearance
      of Reef LLC to retain rights in the DuBois field

                                            
	 	
                                                250,000

                                            	 	 	
                                              Epicenter
      overhead and expenses

                                            
	 	
                                                720,000

                                            	 	 	
                                              Contingent
      expenses and working capital

                                            
	$ 	
                                              5,000,000

                                            	 	 	
                                              total

                                            


                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      	
            	
              D.

            	
              Any
      funds remaining in the Spectrum account following all disbursements and
      all expenditures shall be applied to repayment of borrowed funds and any
      interest due.

            


    

     

    
      	
            	
              E.

            	
              Once
      production from the Dubois field is confirmed by Spectrum, a second phase
      of funding shall be secured by Spectrum.  Epicenter shall
      receive $50,000,000 (fifty million dollars) and Indigo shall receive
      $50,000,000 (fifty million dollars) with said sums to be used for each
      company’s respective projects.  In addition, Epicenter shall
      purchase all of Indigo’s interest in the DuBois field as described in Item
      #1 above, for an amount to be mutually agreed upon.  Following
      the closing of said purchase Newco shall be liquidated and
      dissolved.

            


    

     

    
      	
            	
              F.

            	
              Upon
      the funding of the initial $5,000,000, Indigo shall execute and deliver a
      release to Spectrum, International Finance, LLC, and David
      Hampton.  Upon the funding of $50,000,000 each to Indigo and
      Epicenter, Indigo, Epicenter, Robert R. Turnage and Frank G. Finkbeiner
      shall execute and deliver mutual
releases.

            


    

     

    
      	
            	
              G. 

            	
              One
      hundred percent (100%) of the Working Interest from the sale of production
      in theDuBois wells as described in Item #1 above shall be deposited into
      Newco as workingcapital until the entire $5 million is repaid or Newco is
      dissolved..

            


    

     

    The
parties signify their acceptance of the terms and conditions of this Letter
Agreement by their signatures below.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  	
                                          Indigo-Energy,
      Inc.

                                        
	 
	
                                          By:

                                        	
                                          
                                            /s/
      Steven P. Durdin

                                          

                                        
	 
      	
                                          Steven
      P. Durdin, CEO

                                        
	 
      	 
      
	
                                          Epicenter
      Oil & Gas, LLC

                                        
	 
	
                                          By:

                                        	
                                          /s/ Robert R. Turnage

                                        
	 
      	
                                          Robert
      R. Turnage, Managing Member

                                        
	 
      	 
      
	
                                          By:

                                        	
                                          /s/ Frank G. Finkbeiner

                                        
	 
      	
                                          Frank
      G. Finkbeiner, Managing Member

                                        
	 
      	 
      
	
                                          Spectrum
      Facilitating Technologies, LLC

                                        
	 
	
                                          By:

                                        	
                                          
                                            /s/
      David Hampton

                                          

                                        
	 
      	
                                          David
      Hampton

                                        
	 
      	 
      
	
                                          Consultant

                                        
	 
	
                                          By:

                                        	
                                          /s/ Lawrence Stowe

                                        
	 
      	
                                          Lawrence
      Stowe,
PhD.

                                        


                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
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