LETTER OF INTENT
Exhibit 10.6
This Letter of Intent (“LOI”) is entered into and effective this 10th day of January, 2011 (“Effective Date”), by and among Minerco Resources, Inc., a Nevada corporation which is publicly traded on the Over-The -Counter Bulletin Board (OCTBB: MINE) through its wholly owned subsidiary, Minerco Honduras S.A., hereinafter referred to as the “Buyer”, and Sesecapa Energy Company S.A. de C.V. (SENCO), a Corporation formed and operated under the laws of Honduras hereinafter referred to as the “Seller”, (hereinafter sometimes referred to collectively as the “Parties”).
WHEREAS, Buyer is in the business of developing, producing and providing clean, renewable energy solutions in Latin America; and
WHEREAS, Seller is in the business of developing, producing and providing clean, renewable energy solutions in Latin America; and
WHEREAS, Seller desires to sell Buyer, and Buyer desires to purchase from Seller, Thirty percent (30%) of the Seller’s rights, title and interest in and to a certain Hydro-Electric Project located in Honduras known as the “Rio Sixe” (hereinafter sometimes referred to as the “Project”) for the consideration and upon the terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE, the Parties, for and in the consideration of the mutual covenants hereinafter provided and other good and valuable consideration, the receipt of which is hereby acknowledged and agreed as follows:
1. Buyer shall purchase and Seller shall sell Thirty percent (30%) of its right, title and interest in and to certain a Hydro-Electric Project located in Honduras known as the “Rio Sixe” for the purchase price of Twelve Thousand and Eight Hundred U.S. Dollars and Zero Cents (US$ 12,800.00) in cash (the “Purchase Price”), payable as follows:
|
(a)
|
Buyer acquires 30% right, title and interest of the Project for Development Stage (pre-construction stage of the river site approved by XXXXX);
Final ownership for Construction/Operations Phase will be dictated by actual equity placement placed by each Party. After a negotiation process between Parties, Buyer can acquire a maximum of 80% right, title and interest of the Project, while Seller to retain a minimum of 20% right, title and interest of the Project;
|
|
(b)
|
The Cash Investment Schedule is attached to this LOI as Schedule 1.0;
|
Page 1 of 5 MINE-SENCO Rio Sixe LOI January 10, 2011
|
(c)
|
The First Cash Investment is payable on or before 30 days following the execution of the Definitive Agreement;
|
|
(d)
|
Total Cash Investment to be payable as necessary to complete development of the Project, but not to be accelerated nor delayed from attached Schedule;
|
|
(e)
|
The Parties agree to form a new entity (company) to hold the Project with the proper share ownership based on final equity contribution;
|
|
(f)
|
The Buyer’s shares in new company shall be Preferred (First Paid) shares;
|
|
(g)
|
Buyer shall be provided one (1) seat on the Board of Directors of new company holding the Project. The position will be commiserate with final equity positions;
|
|
(h)
|
Buyer shall implement then oversee all accounting philosophies and policies to ensure compliance with proper regulatory authorities;
|
2. Definitive Agreement. The parties and their counsel shall be responsible for preparing the initial draft of the Definitive Agreement. Subject to the conditions precedent to the transaction and a satisfactory due diligence investigation, Buyer and Seller shall negotiate in good faith to arrive at a mutually acceptable Definitive Agreement for approval, execution and delivery at the earliest possible practical date.
3. No Shop Clause. Buyer shall not from and after the date hereof cause any person or entity not to, directly or indirectly, through any director, officer, employee, agent or other adviser or representative acting in such capacity or as an individual (each, a “Representative”) or otherwise (a) solicit, initiate or entertain offers from, negotiate with or in any manner encourage or facilitate, discuss, except or consider any proposal from any other person or entities relating to the subject matter of this LOI, in whole or in part, or by means or (b) participate in any negotiations regarding, or furnish to any other person any information with respect to, or otherwise cooperate in any way with, or assist or participate in, facilitate or encourage, any effort or attempt by any person or entity to do or seek any of the foregoing. Buyer shall immediately cease and cause to be terminated all existing agreements, arrangements, discussions or negotiations with any persons or entities previously with respect to any of the foregoing. Buyer shall notify Seller promptly if any such proposal or offer, or any inquiry or contact with any person with respect thereto or the subject matter of this LOI, and shall, in any such notice to Seller, indicate in reasonable detail the identity of the person or entity making such proposal, offer, inquiry or contact. Buyer and Seller shall not release any third party from, or waive any provision of, any confidentiality agreement to which it is a party.
Page 2 of 5 MINE-SENCO Rio Sixe LOI January 10, 2011
4. Entire Understanding. This LOI embodies the entire understanding of the parties with respect to the transaction contemplated hereby, and supersedes and replaces any prior understanding, agreement or statement of intent, written or verbal, of any and every notice with respect to such understanding, agreement or statement.
5. Counterparts. This LOI may be signed in one or more counterparts with the same effect as if the signatures to each counterpart were upon a single instrument, and all such counterparts together shall be deemed an original of this LOI. Delivery of an executed counterpart of the signature to this LOI by telecopy shall be effective as delivery of a manually executed counterpart of this LOI.
6. Choice of Law and Venue. This Agreement shall be governed by, construed and enforced in accordance with the laws of the State of Texas, without reference to its conflicts of laws principles. The parties agree, before going to any local o international legal dispute, to accept the Conciliation and Arbitration process regulated by the Commercial Chamber of Tegucigalpa, M.D.C., Xxxxxxxxx Xxxxxxx, Honduras.
7. Miscellaneous. This Agreement shall be a binding contractual obligation of the parties with the intent to be replaced by a further binding Definitive Agreement containing all of the forgoing terms and provisions within thirty (30) business days of the date of execution. Should the Definitive Agreement not be signed within 30 days of the signing of this Agreement, this Agreement shall remain in force until such time that a Definitive Agreement is signed.
8. Fair Meaning. The parties agree that the wording of this LOI and the Definitive Agreement shall be construed as a whole according to its fair meaning, and not strictly for or against any of the parties to this LOI or the Definitive Agreement, including the party responsible for drafting those documents.
Page 3 of 5 MINE-SENCO Rio Sixe LOI January 10, 2011
IN WITNESS HEREOF, The Parties have caused this Binding Agreement to be duly executed on the Effective Date first written above.
SELLER:
SESECAPA ENERGY COMPANY S.A. DE C.V., a Honduran Corporation
|
By:
|
/s/ Abogada Xxxxx xx Xxxxxxxxx | |
| Abogada Xxxxx xx Xxxxxxxxx | ||
| Its: | President | |
| Dated: |
BUYER:
MINERCO RESOURCES, INC., a Nevada Corporation
MINERCO HONDURAS S.A., a Honduran Corporation
|
By:
|
/s/ V. Xxxxx Xxxxx | |
| V. Xxxxx Xxxxx | ||
| Its: | President | |
| Dated: |
Page 4 of 5 MINE-SENCO Rio Sixe LOI January 10, 2011
SCHEDULE 1.0
Cash Investment Schedule
|
Project
|
Expense Description
|
Expense Amount
|
Comment
|
|
Rio Sixe
|
MINE Equity – Feas. Study
|
$ 6,300.00
|
Month 1
|
|
Rio Sixe
|
MINE Equity – Feas. Study
|
$ 800.00
|
Month 2
|
|
Rio Sixe
|
MINE Equity – Feas. Study
|
$ 4,500.00
|
Month 3
|
|
Rio Sixe
|
MINE Equity – Feas. Study
|
$ 1,200.00
|
Month 5
|
|
Rio Sixe
|
TOTAL
|
$ 12,800.00
|
Page 5 of 5 MINE-SENCO Rio Sixe LOI January 10, 2011
