EXHIBIT 10.1
June 15, 2009
Xxxxxx Xxxxx
Sun River Energy, Inc.
0000 Xxxxxxx Xxxx
Xxxxxx, XX 00000
Re: Letter of Intent for Financing
Dear Xx. Xxxxx:
This Letter of Intent ("Agreement") is to inform you that Europa Securities LLC
("Europa"), the "Placement Agent," is pleased to conditionally offer a Private
Placement of Class A Preferred Convertible in the amount of $6,000,000 in two
traunches:
a) $1,000,000 as Bridge Funding, and
b) $6,000,000 as a capital fund for acquisition, development and
exploration activities.
To funds will be used for a) oil and gas acquisitions; b) exploration assessment
costs; c) completion costs; and d) operating capital "Funding." This funding is
subject to satisfactory due diligence, mutual execution of terms and
underwriting agreements and/or Placement Agent Agreements. This letter
supersedes all prior correspondence, commitments, and oral and other
communications relating to financing arrangements between Issuer, Europa, and
their agents.
Issuer: Sun River Energy, Inc.
Placement Agent and Selected Dealers: Europa Securities, LLC., its affiliates,
successors, or assigns.
Use of Proceeds: Proceeds of the Funding outlined herein will be used for
development of production operations, SG&A expenditures, acquisition of
producing assets, exploration expenses, seismic and data acquisition and general
working capital purposes. The funds will be distributed in a single closing to
Issuer and as specified in the subsequent Mutually Executed Final Term Sheet.
Anticipated Closing Date: Closing can commence after satisfactory completion of
Europa's extensive due diligence and execution of the Final Agreement.
Funding Amount: Seven Million United States Dollars ($7,000,000) (in two
traunches, $1,000,000 initially and $6,000,000 90 days thereafter.) Borrower is
advised that Europa shall raise the contemplated financing herein from its
investors and other Broker/Dealer participants and financing sources and will be
conditioned upon receiving satisfactory commitments from syndication
participants.
Security Being Offered: Class A Preferred, 8% cumulative dividend convertible to
common stock further terms to be specified later. The Class A will be registered
prior to funding the second traunche.
Placement Agent Fees: Europa's compensation hereunder shall be governed by the
Investment Banking Agreement in force between Issuer and Europa.
Preferred Dividend: Eight percent (8%) cumulative per annum.
Expenses: Upon Funding, Issuer shall be required to cover the costs of due
diligence, legal fees, and processing fees for this transaction. At the Funding
Closing, Client and/or Borrower will be responsible for payment of the
Investor's reasonable expenses and travel expense in connection with the
transaction up to a maximum of $25,000. Additional fees may be due as agreed
upon or upon Funding.
Law: This Letter and the proposed Funding are intended to be governed by and
constructed in accordance with Florida Statutes and laws without regard to its
conflict of law provisions. This transaction is not intended to be nor shall be
interpreted as an offering or solicitation to purchase a security as defined by
the U.S. Securities Act of 1933/1934 or as amended by law, any state law, or the
law of any other nation.
In the event of a dispute arising from the contemplated transaction between the
parties that cannot be amicably resolved between the parties through reasonable
diligent prior effort, the parties agree to binding arbitration, under the rules
of the American Arbitration Association, with the final hearing to occur in
Miami, Florida. Any award will be limited to actual consideration paid,
provided, or due to the prevailing party.
Not Binding: This Letter is an expression of interest by Europa to formally
pursue the financing as proposed herein, notwithstanding the use of terms such
as "shall" and "must" or other similar terms herein. The only binding terms of
this Letter include this paragraph and the confidentiality and arbitration
provisions. This Letter is not to be construed in any manner as a commitment to
fund. Issuance of a commitment and subsequent funding is contingent upon
completed due diligence as outlined above. Any fees paid herein or hereunder are
nonrefundable.
Indemnity: Europa and Issuer agree to hold each other harmless, including its
officers, directors, and employees, against all claims, damages, liabilities,
and expenses which may be incurred by or asserted against any such person in
connection with or arising out of this Letter and the transactions contemplated
hereby, other than claims, damages, liability, and expense resulting from such
person's gross negligence or willful misconduct.
Conditions of Acceptance: This Agreement is intended to be a summary of the most
important elements of the agreement to enter into a transaction with Issuer, and
it is subject to all requirements and conditions contained in the Agreement
documentation proposed by Europa in the course of closing and funding described
herein. Not every provision that imposes duties, obligations, burdens, or
limitations on Issuer is contained herein but shall be contained in the final
documentation satisfactory to Europa.
Offer Expiration: The proposed terms and conditions herein shall immediately
expire if not accepted within 72 hours from the date of issuance, unless prior
thereto either extended in writing by the Investor or accepted as provided below
by the Issuer.
Acceptance and Commencement: For Issuer to accept this Agreement, please so
indicate by signing and returning a faxed copy and an original copy of this
Letter via overnight delivery to Europa. Said material will be held in the
strictest of confidence and only distributed internally to Europa and its
investors.
Sincerely,
/s/ Xxxx X. Xxxxxxxx
--------------------------
Xxxx X. Xxxxxxxx, CEO
Europa Securities, LLC.
AGREED AND ACCEPTED THIS 15th DAY OF JUNE, 2009
/s/ Xxxxxx Xxxxx
------------------------
Xxxxxx Xxxxx, President
Sun River Energy, Inc.
