EUROPA SECURITIES LLC
325 Hammond Drive, Suite 112
TELEPHONE (404) 256-0802 ATLANTA
GEORGIA 30328 FACSIMILE (404) 256-0803
January 27, 2009
Redgie Green
President
Sun River Energy, Inc.
c/o 7609 Ralston Road
Arvada, CO 80002
Re: Funding/Financing Referral/Placement Agency Agreement
Dear Redgie,
This Funding/financing referral/ Placement Agency
Agreement (this "Agreement")
will confirm that Sun River Energy, Inc. (the
"Company") hereby engages Europa
Securities, LLC ("Europa"), to act as its exclusive
referral/placement agent, on
a commercially reasonable, best-efforts basis, to
provide certain Services (as
defined below) to the Company in accordance with the
terms and conditions set
forth herein; and Europa hereby
agrees to provide such Services
on a
commercially reasonable, best-efforts basis to
the Company in accordance with
such terms and conditions. Europa makes no assurances that
the provision of the
Services hereunder will be successful.
Now, therefore, in consideration of the
mutual promises made herein and for
other good and valuable consideration, the receipt and
sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
For the purposes of this Agreement, the
term "Services" shall
include efforts to obtain capital for the Company
or any of
its Projects, or otherwise arrange for the Company to
receive
capital on terms and conditions acceptable to
the Company,
through any legal means,
whether equity, debt or any
combination thereof, (collectively, a "Financing")
For the purposes of this Agreement, an Accredited
Investor, as
such term is defined in Rule 501 of
Regulation D, shall be
considered to have been "introduced to
the Company by or
through Europa" if the Accredited Investor was
introduced to
the Company either directly or
indirectly by Europa, its
agents or employees, (a "Europa Investor").
Nothing contained in this Agreement shall be construed as an
offer
by Europa or any of its affiliates to
extend credit. In
addition, Europa does not provide legal, tax
or accounting
services and does not render such advice.
<PAGE>
The "Term" of this Agreement shall
extend from the date this
Agreement is fully executed and shall continue until
delivery
of written notice by the Company to Europa to terminate
this
agreement at any time with or without cause (the
"Termination
Date"), provided, however, that the
termination of this
Agreement shall not in any way limit, modify,
or otherwise
affect the rights of Europa to:
(i) receive its entire
compensation pursuant to the terms of
this Agreement in
connection with a Financing involving the Company
during the
Term of this Agreement or subsequent to the
termination or
expiration of this Agreement, (ii) The Company,
its agents,
heirs, assignees and successors agree that
there can be no
direct
contact between the Company, its agents and the source
of potential financing without the written
authorization or
consent of the Agent. Said provision shall remain
in effect
for Five years from effective date or last closing and include
all third party persons or companies for financing/funding. An
introduction will be viewed as
formally made by means of
facsimile, email, United States
Postal service, phone,
conference call or hand delivered letter to the
Company. Any
funding source introduced by the company itself, is
excluded.
Expiration of this Agreement and (iii) is
protected by the
indemnification rights, waivers and other provisions of
this
Agreement. The Company will authorize distribution or
provide
comments to Europa within five business days after
receiving
such material.
In consideration of the performance of the Services
pursuant to
this Agreement, the Company
shall compensate Europa as
follows:
Upon
execution of this Agreement, the Company will pay to
Europa a fee of $10,000, of which $5,000 is payable within
two (2) business days after the signing of this Agreement
by the Company and the balance at the first closing of any
financing. Said funds will be used to defray the cost
of
performing initial Due Diligence and background checks in
conformity with the rules of
the Financial Industry
Regulatory Authority ("FINRA").
Upon the closing of a Financing on any terms accepted
by
the Company with a Europa Investor, the Company shall
pay fees to Europa from escrow at closing following
the actual transfer of Consideration
(as defined
herein) to the Company, its stockholders, affiliates
or
subsidiaries. These fees shall consist of
the
following:
A. In the case of equity, a cash fee equal
to
eight percent (8.0%) of
the aggregate
Consideration received by the Company, its
stockholders, affiliates or
subsidiaries
from said investors relative to a Financing
referred to in this Section plus a two (2)
percent non-accountable expense allowance.
In addition, the Company shall issue
to
Europa
common stock of the company equal to
eight percent (8.0%) of the gross dollars
number raised for the Company at a price of
110%
of the five day volume weigh average
bid price (VWAP) per share Europa may assign
any or all of its rights to affiliates.
If all or part of the Financing is in the
form of a note that is convertible
into
equity, the Company shall pay fees on the
portion of the Consideration that
meets
these criteria in accordance with the above
Section of this Agreement.
<PAGE>
B. If all or part of
the Financing for a
particular Company Project is in the form of
non-convertible debt or equity,
(i.e.)
(drilling or lease program,
merger or
acquisition, transaction, etc then the cash
fee shall be five per cent
(5.0%). In
addition, the Company shall issue to Europa
common
stock equal to seven (7%) of the
gross amount raised for the company @ the
current five day (VWAP) price before said
transaction
is announced. Europa may assign
any or all of its rights to affiliates.
Subsequent Transactions Tail. During the Term of
this Agreement, and for a period of Sixty
(60) months after the
termination or
expiration of this Agreement, if the Company
consummates a Financing with any
Europa
Investor then the Company shall
pay to
Europa all fees and
expenses provided
hereunder.
Fees and expenses due Europa hereunder shall be earned
and
paid out of the funds received at the closing of
a
Financing. Europa and/or its affiliates may be Europa
Investors in the Financing.
During the Term of this Agreement and
subject to The
Company's prior written
approval which may be
reasonably withheld, Europa reserves the
right to
have selected dealers ("Selected Dealers") in
good
standing with the Financial
Industry Regulatory
Authority ("FINRA") participate in the
Financing,
specifically
for the purposes of assisting the
Company in finding qualified Europa Investors for the
Financing. Such Selected Dealers shall be compensated
by
Europa.
For the purposes of this
Agreement, "Security" or
"Securities" shall mean: (i) any
stock or other
security or ownership interest of the Company of the
class, series and with the same terms as is issued in
connection with a Financing, as the case may be, or
(ii) if no such stock, security or ownership interest
is
issued in connection with a
Financing, the
existing common stock or unit of ownership interest
of the Company.
For the purposes of this Agreement, "Consideration" shall
mean the aggregate amount of all cash, plus the fair
market value of all securities,
other property,
goods, services, use of premises or
personnel or
other items of value, received by the Company,
its
agents, employees, stockholders,
affiliates, and
subsidiaries, in connection with a Financing, as the
case may be, of any nature, arising from
Europa's
rendering of the Services hereunder. For the purposes
of this Agreement: (i) the fair market value of any
share
or unit of any stock or other security in which
a public market exists shall be based at the average
of the last sales price for such securities on
the
five (5) trading days prior to the date of
closing of
such Financing, or on the Closing price on the date
of the closing of the financing, whichever is higher,
as the case may be; (ii) the fair market value of any
share or unit of any stock or other security in which
no public market exists and of all other
property
shall be the value as agreed to by the parties or as
determined by an independent appraiser chosen by the
parties hereto; and (iii) the fair market value
of
any services, use of premises or personnel received
in exchange for stock or other security shall be the
fair market value of such stock
or securities
determined in accordance with the foregoing clauses
(i) and (ii). Notwithstanding the foregoing, to the
extent the Consideration offered in a transaction is
other than cash, the Company shall determine, in good
faith,
whether it will accept
such non-cash
Consideration as part of the
Financing. If such
non-cash Consideration are
excluded from the
Financing, Europa
will be entitled to any fees on
such excluded non-cash Consideration.
<PAGE>
Europa's fee in connection with a Financing shall be
based upon the percentages provided
above of the
aggregate Consideration, before
any deductions,
including, but not limited to
fees, deposits,
transaction expenses, reserves, insurance or
other
amounts withheld or paid by the investor or
party
providing the funds in such Financing. Consideration
relative to a Financing shall be deemed to
include
total value of equity or
debt Securities sold
directly or indirectly, in
connection with a
Financing, including proceeds
received by the
Company, its stockholders, affiliates or subsidiaries
upon exercise of options, warrants and/or
similar
securities (collectively, the "Options"),
and any
amounts
paid into escrow and any amounts payable in
the future at such time as the money is paid to the
Company. If the Consideration
received by the
Company, its stockholders,
affiliates or subsidiaries
in connection with a Financing is to be paid in whole
or in part through installment payments, Europa's fee
shall be paid when funds are received by the Company.
To the extent such future payments relative to either
a Financing are not currently ascertainable or relate
to the exercise of Options, the portion of Europa's
fee relating thereto shall be calculated
and paid
when and as such contingent payments are made or when
such Options are exercised and the company receives
money from such exercise. If
the Consideration
received by the Company, its stockholders, affiliates
or subsidiaries in connection with a Financing,
as
the case may be, is paid in whole or in part in the
form of securities or other non-cash Consideration,
such Consideration shall be valued at the fair market
value
thereof on the day prior to the date of closing
of such Financing (or
later date on which a
contingent payment is made), as the
Company and
Europa shall
agree; provided, however, that if such
Consideration consists of securities with an existing
trading market, such securities shall be valued
at
the average of the last
sales price for such
securities on the five (5) trading days prior to the
date of closing of such Financing, as the case
may
be, (or later date on which a contingent payment is
made).
Representations and Warranties of the
Company. The Company
understands and agrees that Europa will be
relying upon the
same representations and warranties required by and
given to
Europa Investors in
connection with any
Financing.
Accordingly, the Company agrees that,
as a condition to
closing of any Financing with Europa
Investors that are
introduced to the Company by or through Europa,
the Company
will make customary representations and warranties to
Europa
Investors and will confirm in writing to Europa
that Europa
may rely on such representations and warranties in
connection
with any such Financing. Specifically, the Company
represents
and warrants to Europa as follows:
Securities
Law Compliance. The Offering Documents conform
in all material respects with the
requirements of
Section 4(2) of the Securities Act and Regulation D
promulgated
hereunder and with the requirements of
all other published rules and
regulations of the
Securities and Exchange Commission (the "Commission")
currently in effect relating to "private offerings"
to "accredited investors." The Offering
Documents,
when read together as of their respective dates, will
not contain an untrue statement of a material fact or
omit to state any material fact necessary in order to
make the statements therein,
in light of the
circumstances in which
they were made, not
misleading. If at any time prior to the Termination
Date or other termination of this Agreement any event
shall occur as a result of which it
might become
necessary to amend or
supplement the Offering
Documents so that they do not include
any untrue
statement of any material fact or omit to state any
material
fact necessary in order to
make the
statements therein, in the light of the circumstances
then existing, not misleading, the
Company will
promptly
notify Europa and will supply Europa with
amendments or supplements correcting such statement
or omission. The Company will also provide Europa for
delivery to all offered and
purchasers and their
representatives, if any, any information, documents
and instruments which Europa deems
necessary to
comply with applicable state and federal law.
<PAGE>
Organization. The Company is a corporation duly organized,
validly existing and in good standing under the laws
of the State of incorporation and has all requisite
corporate power and authority to own and lease
its
properties, to carry on its business as
currently
conducted and as proposed to be conducted, to execute
and deliver this Agreement and to
carry out the
transactions contemplated by this Agreement, and is
duly licensed or qualified to
do business as a
foreign corporation in each jurisdiction in which the
conduct of its business or ownership or leasing
of
its properties requires it to be so qualified, except
where
the failure to be so qualified would not have a
material adverse effect on the business,
financial
condition or prospects of the Company.
Capitalization. The authorized, issued and
outstanding
capital stock of the
Company prior to the
consummation of the transactions contemplated hereby
is as set forth in the Offering Documents. All issued
and outstanding shares of the Company are
validly
issued, fully paid and non-assessable and have
not
been issued in violation of the preemptive rights of
any shareholder of the Company. All prior sales
of
securities of the Company were either
registered
under the Securities Act and
applicable state
securities laws or exempt from such registration.
Warrants, Preemptive Rights, etc. Except for the Investor
Warrants and the Financing Warrants
to purchase
shares
of Common Stock to be issued to Europa or its
designees in consideration for acting as
Placement
Agents hereunder, and except as
disclosed in the
Offering Documents,
there are not any outstanding
warrants, options,
agreements, convertible
securities, preemptive rights to subscribe
for or
other commitments pursuant to which the Company is,
or may become, obligated to issue any shares of its
capital stock or other securities of the Company and
the Offering will not cause
any anti-dilution
adjustments to such securities or commitments.
Subsidiaries and Investments. Except
as stated in the
Offering Documents, the Company has no subsidiaries
and the Company does not own, directly or indirectly,
any capital stock or other
equity ownership or
proprietary interests in any
other corporation,
company, association, trust,
partnership, joint
venture or other entity.
Financial Statements. The financial information contained
in the Offering Documents will be accurate
in all
material respects (such financial statements included
as part of the Offering Documents is
hereinafter
referred to collectively
as the "Financial
Statements"). The Financial Statements
have been
prepared in conformity with
generally accepted
accounting principles consistently applied and show
all material liabilities, absolute or contingent, of
the Company required to be recorded
thereon and
present fairly the financial position and results of
operations of the Company as of the dates and for the
periods indicated, except that interim financial data
shall be subject to normal
year-end adjustments
consistent
with past practice.
<PAGE>
National Security Legislation. Neither the
sale of the
Securities hereunder nor the Company's use
of the
proceeds thereof will violate the Trading with
the
Enemy Act, as amended, or any of the foreign assets
control regulations of the United States
Treasury
Department (31 CFR, Subtitle B,
Chapter V, as
amended) or any enabling legislation or
executive
order relating thereto.
Without limiting the
foregoing, neither the Company
nor any of its
subsidiaries (a) is a person
whose property or
interests in property are blocked pursuant to Section
1 of Executive Order 13224 of
September 23, 2001
Blocking Property and Prohibiting Transactions With
Persons Who Commit, Threaten to Commit, or
Support
Terrorism (66 Fed. Reg. 49079 (2001)) or (b) engages
in
any dealings or transactions, or be
otherwise
associated, with any such person. The Company and its
subsidiaries are in compliance with the USA Patriot
Act
of 2001 (signed into law October 26, 2001).
Absence of Changes. Except as set forth in the
Offering
Documents, the Company has
not incurred any
liabilities or obligations, direct or contingent, not
in the ordinary course of business, or entered into
any transaction not in the
ordinary course of
business, which is material to the business of
the
Company, and there has not been any change
in the
capital stock of, or any incurrence of long term debt
by, the Company, or any issuance of options, warrants
or other rights to purchase the capital stock of the
Company, or any adverse change or any
development
involving, so far as the Company can now reasonably
foresee, a prospective
adverse change in the
condition (financial or
otherwise), net worth,
results of operations, business, key
personnel or
properties
which would be material to the business or
financial condition of the Company, and the Company
has not become a party to, and neither the business
nor
the property of the Company has
become the
subject of, any litigation
which if adversely
determined would have a material
adverse affect,
whether or not in the ordinary course of business.
Title. Except as set forth in
the Private Placement
Memorandum, the Company has good and marketable title
to all properties and assets owned by it, free
and
clear of all liens,
charges, encumbrances or
restrictions, except such as are
not materially
significant or important in relation to the Company's
business; all of the material leases and
subleases
under which the Company is the lessor or sublessor of
properties or assets or under which the Company holds
properties or assets as lessee or sub lessee are in
full force and effect, and the
Company is not in
default in any material respect with respect to any
of
the terms or provisions of any of such leases or
subleases, and no material claim has been asserted by
anyone adverse to rights of the Company as
lessor,
sublessor,
lessee or sub lessee under any of the
leases or subleases mentioned above, or affecting or
questioning the right of the Company to
continued
possession of the leased or subleased
premises or
assets under any such lease or sublease. The Company
owns or leases all such properties as are necessary
to its operations as now
conducted and to be
conducted, as presently planned.
<PAGE>
Patents, Trademarks, etc. The Company licenses,
owns or
possesses adequate and enforceable rights to use all
patents, patent applications, trademarks,
service
marks, copyrights, trade
secrets, processes,
formulations, technology or know-how used or proposed
to be used in the conduct
of its business as
described in the Offering Documents
(collectively,
"Proprietary Rights"). The Company has not received
any
notice of any claims, nor does it
have any
knowledge of any threatened claims, and knows of no
facts which could form the
basis of any claim,
asserted by any
person to the effect that the sale or
use of any product or service now used or offered by
the Company or proposed to be used or offered by the
Company infringes on any patents or infringes
upon
the use of any such Proprietary Rights of
another
person and, to the best of the Company's knowledge,
no others have infringed the Proprietary Rights.
Software. The Company licenses all of the software used in
connection with the Company's products. The current
software licensed by the Company (the "Software") is,
to the knowledge of the Company, original and capable
of copyright protection in the United States, and the
Company has exclusive licensed
rights to such
Software, including possession of, or ready
access
to, the source code for such Software in
its most
recent version. No part of any such Software is, to
the
knowledge of the Company, an imitation or copy
of, or infringes upon, the software
of any other
person or entity, or violates or infringes upon any
common law or statutory
rights of any other person or
entity, including, without
limitation, rights
relating to defamation,
contractual rights,
copyrights, trade secrets, and rights of privacy or
publicity. The Company has not
sold, assigned,
licensed, distributed or in any other way disposed of
or encumbered the Software,
other than in the
ordinary course of its business. The Software, to the
extent any part of it
is licensed from any
third-party licensor or constitutes "off-the-shelf"
software, is held by the Company legitimately.
The
Company warrants that, to the best of the Company's
knowledge, the Software is free from any significant
software defect or programming
or documentation
error, operates and runs in
a reasonable and
efficient business manner, and conforms to its stated
specifications.
The Company has no knowledge of the
existence of any bugs or viruses with respect to the
Software which would have a material adverse effect
on the
condition (financial or otherwise), earnings,
operations, business or business prospects
of the
Company.
Litigation. There is
no material action, suit,
investigation, customer
complaint, claim or
proceeding at law or in equity by or
before any
arbitrator, governmental instrumentality or
other
agency
now pending or, to the
knowledge of the
Company, threatened against the Company (or
basis
therefore known to the Company), the adverse outcome
of
which could materially adversely
affect the
Company's business. The Company is not subject to any
judgment, order, writ, injunction or decree of
any
federal, state, municipal or
other governmental
department, commission, board, bureau,
agency or
instrumentality, domestic or foreign
which could
materially adversely affect the Company's business or
prospects.
<PAGE>
No defaults; No contravention. The Company
is not in
violation of or default under, nor will the execution
and
delivery of this Agreement or any of the Offering
Documents or consummation of
the transactions
contemplated herein or therein result in a violation
of or
constitute a default in the performance
or
observance of any
obligation under, (i) its
Certificate of Incorporation or its Bylaws, (ii) any
indenture, mortgage, deed
of trust, material
contract, material purchase order or other material
agreement or instrument to which the
Company is a
party or by which it or its property
is bound or
affected or (iii) with respect to any material order,
writ, injunction or decree of
any court or any
federal, state, municipal or
other governmental
department, commission, board, bureau,
agency or
instrumentality, domestic or foreign,
and there
exists no condition, event or act which constitutes,
nor which after notice, the lapse of time or
both,
could constitute a
default under any of the
foregoing, which in either case would have a material
adverse
effect on the business of the Company.
Taxes. The Company has filed all federal, state, local and
foreign tax returns which are required to be filed by
it and all such
returns are true and correct in all
material respects. The Company has paid all
taxes
pursuant to such returns
or pursuant to any
assessments received by it or which it is obligated
to withhold from amounts owing to
any employee,
creditor or third party. The Company has
properly
accrued all taxes required to be accrued.
The tax
returns of the Company are not
currently being
audited by any state, local or federal authorities.
The Company has not waived any statute of limitations
with respect to taxes or agreed to any extension of
time with respect to any
tax assessment or
deficiency.
Compliance with Laws; Licenses, etc. The Company has
not
received notice of any violation of or noncompliance
with any federal, state, local or
foreign laws,
ordinances, regulations and orders applicable to its
business which has not been cured, the violation of,
or noncompliance with which, would have a materially
adverse effect on the business or operations of the
Company. The Company has all licenses and permits and
other governmental certificates, authorizations and
approvals (collectively, "Licenses")
required by
every federal, state and
local government or
regulatory body for the operation of its business as
currently conducted and the use of its
properties,
except
where the failure to be licensed would not
have a material adverse effect on the business of the
Company. The Licenses are in full force and
effect
and
no violations are or have been
recorded in
respect of any License and no proceeding is pending
or, to the knowledge of the Company, threatened
to
revoke or limit any thereof.
Authorization of Agreement. This Agreement has been
duly
executed and delivered by the
Company and the
execution, delivery and performance by the Company of
this Agreement and the Subscription
Agreement and
other Offering Documents have been duly authorized by
all requisite corporate action by the
Company and
constitute the legal, valid and binding obligations
of the Company, enforceable in accordance with their
respective terms.
<PAGE>
Authorization of Securities. The
issuance, sale and
delivery of the Securities, the Investor Warrants and
the Financing Warrants have been duly authorized by
all requisite corporate action of the Company
and,
when so issued, paid for and
delivered, will be
validly issued, fully paid and
non-assessable and
will not be subject to preemptive
or any other
similar rights of the shareholders of the Company or
others which rights shall not have been waived prior
to the Closing.
Authorization of Reserved Shares. The issuance, sale
and
delivery by the Company of the shares of Common Stock
reserved for issuance upon exercise of the Investor
Warrants and Financing Warrants
(the "Reserved
Shares") have been duly authorized by all requisite
corporate action of the Company. The Reserved Shares
have been duly reserved for issuance upon exercise of
the Investor Warrants and Agent's Warrants and when
so issued, sold, paid for and delivered, the Reserved
Shares will be validly issued and outstanding, fully
paid and non-assessable, and
not subject to
preemptive or any other similar
rights of the
shareholders of the Company or others which
rights
shall not have been waived prior to the Closing.
Exemption from Registration. Assuming (i) the accuracy of
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