STOCK OPTION AGREEMENT
THIS
NON-INCENTIVE STOCK OPTION AGREEMENT (this "Agreement") is made
and
entered into as of June 23, 2006, by and between Indigo-Energy,
Inc., a Nevada
corporation (the "Company"), and HUB Energy, LLC, a Pennsylvania
limited
liability company (the "Holder" and together with the Company, the
"Parties"
each a "Party").
This
Agreement is made pursuant to the Advisory Services Agreement,
dated
as of June 23, 2006 by and between the Parties (the "Advisory
Services
Agreement"). For good and valuable consideration, the Parties
hereby agree as
follows:
1.
Definitions. Capitalized terms used and not otherwise defined
herein
shall have the meanings given to such terms in the Advisory
Services Agreement.
As used in this Agreement, the following terms shall have the
following
meanings:
(a)
"Common Stock" means the common stock of the Company, par value
$.001
per share;
(b)
"Option(s)" has the meaning set forth in paragraph 2 herein;
(c)
"Option Shares" means the Stock (as defined below) underlying
the
Options (as defined below);
(d)
"Stock" means collectively the Common stock and Preferred Stock of
the
Company;
2.
Issuance of Stock Options.
(a)
Pursuant to the terms of the Advisory Services Agreement, the
Company
hereby grants to the Holder, options (the "Options") exercisable
into shares of
the Company's Stock, at a price and in the amounts set forth in
Schedule A
attached hereto. The Options shall become exercisable upon
achievement of the
milestones (the "Milestones") set forth in Schedule A attached
hereto.
(b) Status
of Option(s). The Option(s) are non-qualified stock options.
3. Right
to Exercise. The Options issued herein shall vest and be
exercisable in whole or in part when the Milestones as set forth in
Schedule A
are reached.
(a) Option
Exercise and Payment. The Options may be exercised by written
notice to the Company, in form and substance satisfactory to the
Company, which
must state the election to exercise the Options, the number of
shares of Stock
for which the Option is being exercised and such other
representations and
agreements as to your investment intent with respect to such shares
as may be
required pursuant to the provisions of this Agreement. The written
notice must
be accompanied by full payment of the exercise price for the number
of shares of
stock being purchased.
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(b)
Cashless Exercise. The holder shall also have the right to
exercise
options by receiving in shares the difference between the option
price and the
fair market value of the stock at the time of exercise.
(c) In the
event a change in control occurs, all options will become
immediately exercisable.
Change in
Control shall be deemed to have occurred if:
(i) Any "person" (as such term is used in Sections 13(d) and
14(d)
of the Exchange Act) is or becomes a "beneficial owner" (as
defined
in Rule 13d-3 under the Exchange Act), directly or indirectly,
of
securities of the Company representing more than 35% of the
voting
power of the then outstanding securities of the Company, and
such
person owns more aggregate voting power of the Company's then
outstanding securities entitled to vote generally in the election
of
directors than any other person;
(ii) The shareholders of the Company approve (or, if
shareholder
approval is not required, the Board approves) an agreement
providing
for (x) the merger of consolidation of the Company with another
corporation where the shareholders of the Company, immediately
prior
to the merger or consolidation, will not beneficially own,
immediately after the merger or consolidation, shares entitling
such
shareholders to 50% or more of all votes to which all
shareholders
of the surviving corporation would be entitled in the election
of
directors (without consideration of the rights of any class of
stock
to elect directors by a separate class vote), (y) the sale or
other
disposition of all or substantially all of the assets of the
Company,
or (z) a liquidation or dissolution of the Company; or
(iii) directors are elected such that a majority of the members
of
the Board shall have been members of the Board for less than
two
years, unless the election or nomination for election of each
new
director who was not a director at the beginning of such
two-year
period was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the
beginning
of such period.
(c) Effect
of Failure to Exercise. Any failure by Holder to exercise any
Options, or any exercise for less than all shares purchasable under
the Option,
shall not affect Holder's right to exercise the unexercised portion
at a later
time.
4.
Piggyback Registration. In the event that the Company proposes
to
register any of its Stock, under the Securities Act of 1933, as
amended (the
"Securities Act"), whether or not for sale for its own account, in
a manner that
would permit registration of registerable securities for sale for
cash to the
public under the Securities Act, it shall afford the Holder
piggyback
registration rights of its registerable shares pursuant to the
Registration
Rights Agreement, attached hereto as Exhibit A.
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5. Capital
Adjustments. In the event that Stock is changed into or
exchanged for a different number or kind of shares of stock or
other securities
of the Company, whether through merger, consolidation,
reorganization,
recapitalization, stock dividend, stock split-up or other
substitution of
securities of the Company, the Board shall make appropriate
equitable
anti-dilution adjustments to the number and class of shares of
stock available
for issuance under this Agreement and to the option price. Any
reference to the
option price in this Agreement shall be a reference to the option
price as so
adjusted.
6. Form of
Payment. The Option exercise price may be paid, in whole or in
part, (i) in cash, by check, or by cash equivalent, or (ii) by any
other form of
payment permitted by the Company.
7.
Representations and Warranties. The Company represents and
warrants
that:
(a)
Existence and Rights. The Company is a corporation duly
organized,
validly existing and in good standing under the laws of the state
of Nevada. The
Company has all requisite corporate power and authority, to carry
on its
business and to own and use the properties owned and used by it.
The Company is
qualified to conduct business and is in good standing under the
laws of each
jurisdiction wherein the nature of its business or its ownership of
property
requires it to be so qualified, except where the failure to be so
qualified,
would not individually or in the aggregate, have a material adverse
effect on
the assets or business of the Company.
(b)
Corporate Authorization. The Company has all necessary power
and
authority to enter into this Agreement and has taken all action,
specifically
including, without limitation, all corporate action, necessary to
execute,
deliver and perform this Agreement. This Agreement has been duly
authorized,
executed and delivered by the Company and is a legally valid and
binding
obligation of the Company enforceable against the Company in
accordance with its
terms.
(c) No
Conflict. The execution, delivery and performance of this
Agreement
and of the related documents by the Company will not violate any
provision of
the Company's Articles of Incorporation or the Bylaws; or violate
any law or
rule or regulation of any administrative agency or governmental
body; or any
order, writ, injunction or decree of any court, arbiter,
administrative agency
or governmental authority having ju
