Document:

PROMISSORY
      NOTE

    CASH
      OUT- JWSr. III

    And

    SETTLEMENT
      AGREEMENT

    
 

    
      	
              $150,000
                (One Hundred, Fifty-Thousand Dollars) 

            	
              Dated:
                July, 27 2007 

            
	
              Principal
                Amount 

            	
              State
                of Nevada

            

    

    

    Funding
      Date-
      On or
      before July 27, 2007

    Due
      Date
      of Note
      September 15, 2007

    

    FOR
      VALUE
      RECEIVED, One Hundred, Fifty-Thousand Thousand Dollars ($150,000), the
      undersigned, Indigo-Energy, Inc., a Nevada Corporation, located at 701 N. Green
      Valley Parkway, Suite 200, Henderson, NV 89074 (Borrowers)
      hereby
      promises to pay to the order of James C. Walter Sr., an individual, residing
      at
      587 McKendimen Road, Medford, NJ 08055 (Maker)
      the sum
      of $150,000 (One Hundred, Fifty-Thousand Dollars). Said sum shall be paid in
      the
      manner following: 

    

    At
      the
      Due Date Borrower will repay this Promissory Note- Cash Out and Settlement
      Agreement (Note) in the following manner:

    

    Borrower
      will repay the Principal Amount along with an interest payment of $2,000
      (Two-Thousand Dollars) within 5 days of the Due Date via wire transfer to the
      Maker.

    

    The
      Maker
      agrees to the following terms and conditions as part of this Note:

    

    1)
      The
      Maker hereby releases the Borrower from all claims and obligations contained
      within the Promissory Note document dated April 6, 2007 with a due date of
      June
      6, 2007. 

    2)
      The
      Maker hereby releases the Borrower from all claims, obligations and revenue
      from
      Indigo Well #2 in which the Maker currently an investment interest. This Note
      releases the Borrower from all current and future obligations on that assigned
      well.

    

    As
      an
      additional consideration for this Note, the Borrower agrees to issue, within
      30
      days of the date of signing, 1.4
      Million (One Million, Four-Hundred
      Thousand)
      shares
      of the Borrower’s common stock. Such shares shall be restricted by SEC Rule
      144.

    

    This
      Note
      shall at the option of the Maker be immediately due and payable upon the
      occurrence of any of the following:

    
      	1-  	
              Breach
                of any condition of any of the security
                interest.

            

    

    
      	2-  	
              Upon
                the insolvency, dissolution, or liquidation of the
                Borrowers.

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    Wire
      Instructions for receipt of funds by Borrower are:

    

    Bank
      of
      America

    Branch
      NV1-155-01-01

    Banker:
      Charity Lopez

    2638
      W.
      Horizon Ridge Parkway

    Henderson,
      NV 89052

    702-654-6316

    702-654-6342
      fax

    Indigo-Energy,
      Inc.

    Account
      #
      005012537333

    Wire
      Routing ABA # 026009593

    

    

    In
      the
      event this Note shall be in default, and placed with an attorney for collection,
      then the Borrower agrees to pay all reasonable attorney fees and costs of
      collection. Payments not made within 10 days of due date shall be subject to
      a
      late charge of 10% of said payment. All payments hereunder shall be made to
      the
      Maker.

    

    The
      Borrowers agree to be fully bound hereunder until this note shall be fully
      paid
      and waive demand, presentment and protest and all notices thereto and further
      agrees to remain bound, notwithstanding any extension, renewal, modification,
      waiver, or other indulgence by the Maker or upon the discharge or release of
      the
      Borrowers, or upon the exchange, substitution, or release of any collateral
      granted as security for this Note. No modification or indulgence by Maker shall
      be binding unless in writing, and any indulgence for one occasion shall not
      be
      an indulgence for any other or future occasion. This Note shall take effect
      as a
      sealed instrument and shall be construed, governed, and enforced in accordance
      with the laws of the State of Nevada. 

    

    

    Signed
      the date recorded below:

    

    
      	 	 	 	 	 
	
              David
                Larson, CEO 

            	 	
              Date

            	 	 
	
              Indigo-Energy,
                Inc.

            	 	 	 	 
	 	 	 	 	 
	
              Accepted
                by Maker:

            	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
              James
                C. Walter Sr.,
                an
                individual

            	 	
              Date

            	 	
              SSAN#

            

    

    

    

    

    

    PromNoteCashOutJCWSrIIIJune 12, 2007 

    
 
Indigo-Energy, Inc 
701 N. Green Valley Pkwy, Suite 200 
Henderson, NV 89074 
Mr. D
avid Larson, CEO 
 
Dear Mr. Larson, 
 
This letter sets forth the basis on which Network I Financial Securities, Inc (“Network”) is engaged by Indigo-Energy (the “Company”) 
to act as it financial advisor for its finance and acquisition program for a one-year period beginning the date of this agreement. 
 
	 

      	1.

      	Performance of Services 

      

      
 
Network shall provide the following services: 
 
Acquisitions: 
 
	Network 1 will work with the Company’s staff in developing acquisition criteria both from the point of view of business compatibility and financial acceptability

      

      
 
	 

      	(a)

      	Network will assist the Company in identifying companies in the targeted industries, which may include public companies, divisions of public companies, and privately held companies, and after evaluating such companies, assist in ranking them in terms of priority.

      

      
 
	 	(b)

      	Network will gather financial information in targeting companies. In those cases where the company, or a division of a public company, Network will utilize its contracts and sources of information of develop as complete a financial profile as possible. In the event outside consulting studies are desirable, Network will recommend such consultants and be prepared to retain them on behalf of the Company, with the Company’s approval.

      

      
 
	 	(c)

      	Network will evaluate the target companies from a financial viewpoint, providing an opinion as to value and the price level necessary to consummate a transaction. 

      

      
 
	 	(d)

      	Network will contribute to the analysis of the target company’s desirability from both a business and product viewpoint, combining these conclusions with the judgment as to the likelihood of success. 

      

      
 
 

      
1

      

      
 

      

      

Corporate Planning and Development: 
 
	 	(a)

      	Network 1 will work with the Company on research and development planning as far as financial commitments. 

      

      
 
	 	(b) 

      	Network will introduce the Company to parties that will be able to assist the Company in the Energy industry that could be helpful in the development of the Company’s business. 

      

      
 
	 	(c)

      	Network 1 will introduce the Company to parties in the financial community that follow the industry with n particular interest in Exploration. 

      

      
 
	 	(d)

      	Should the Company request, Network 1 will act as a liaison between shareholders and the Company. 

      

      

 
	 

      	2.

      	Financing 
 
Should the company require additional capital on order to finance a specific acquisition and wish to raise these funds through a secondary issue of equity or private placement, the Company may request Network to serve as its investment banker for said purpose. Such financing shall occur at such time as the Company, in its sole discretion, shall deem appropriate. Terms, conditions, and compensation for said financing will be negotiat
ed at the time of the request.

      
	 	 	 
	 

      	3.

      	Compensation for Services
 
The Company agrees to issue to Network 1 or its designees 3,000,000 restricted common shares upon the execution of this agreement and an additional 2,000,000 common shares if a termination notice has not been sent to Network 1 before the initial six months of this agreement as described in paragraph 5. In addition, if the Company or any of its affiliates acquire by means of merger, consolidation, joint venture, exchan
ge offer, purchase of stocks or assets or other transactions, an entity as a result of submissions or introductions made by Network during the period of this Agreement, or if the company uses the services of Network in conducting or assisting in negotiations in structuring a transactions with any party, the Company shall pay Network, or cause Network to be paid, at the closing of said transaction, a transaction fee to be negotiated prior to the time of transaction. 

      
	 	 	 
	 

      	4.

      	Indemnity 
 
Each part shall indemnify the other and its partners, officers, directors, and employees against all claims, damages, liability, and litigating expenses (including the expense of investigation and defending such claims) as the same as incurred, relating to or arising out its activities hereunder, except to the extent that any claims, damages, liability, or expense, if found on a final judgment by a court of law to have resulted from
 the other’s willful misconduct or gross negligence in performing the services described above. 

      
	 	 	 
	 

      	5.

      	Termination 
 
This Agreement may be terminated after six months by either party at the end of any subsequent calendar month. The terminating party shall give written notice to the other party at least fifteen days prior to such termination. However, the 3,000,000 shares issued as inducement to enter into this agreement, shall remain in full force and effect upon termination of this agreement.

      

      
 
 

      
2

      

      
 

      

      

      

    
    
	 	6.

      	Entire Agreement 
 
This Agreement sets forth the entire understanding of the parties relating to the subject matter hereof, and supersedes and cancels any prior communications, understanding, and agreements between the parties. This Agreement cannot be modified or changed, nor can any of its provisions be waived, except in writing signed by all parties. However, all shares issued pursuant to this Agreement will remain in effect. 

      

       
	 	7.

      	Governing Law
 
This Agreement shall be governed by the Laws of the state of New York. The parties hereto agree to submit to the jurisdiction of the Supreme Court of the State of New York for the determination of any dispute arising this Agreement or in any action to enforce the terms hereof. 

      

Please confirm the foregoing is in accordance with your understanding by signing and returning to us the duplicate of this letter.
 
 
Very truly yours, 
 
 
 
By: /s/ Damon Testaverde
Damon Testaverde 
Managing Director
 
Accepted and Agreed to: 
 
By: /s/ David Larson
David Larson C.E.O. 
Indigo-Energy, Inc. 
 
 
 

      
3

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