Exhibit 10.1

Xun Energy, Inc.

December 9, 2010

Global Energy Acquisitions, LLC

1806 N. Flamingo Road, Suite 351

Pembroke Pines, Florida, 33028

Attention: Mr. Bryan Mendes, President

Re: Letter of Intent - To purchase 51% Gross Royalty Interest in up to 500
Producing Wells in an entity to be formed  

Dear Mr. Mendes;

 

This letter of intent (“Letter”) confirms our understanding and sets forth an
outline of certain preliminary terms of a proposed transaction (“Transaction”)
between Xun Energy, Inc., a Nevada corporation (“PURCHASER”) and Global Energy
Acquisitions, LLC, a Florida limited liability company and/or its affiliates
(“SELLER”). In this Letter, PURCHASER and SELLER are sometimes collectively
called the “Parties,”

Upon execution of this Letter by the Parties, it is intended that this Letter
will provide a framework for the Parties to enter into a Definitive Agreement
(as defined below). Any obligation to proceed with the Transaction as outlined
herein is expressly subject, among other things, to the execution and delivery
of a written Definitive Agreement by the Parties. It is expressly understood and
agreed by the Parties that the provisions contained in paragraph 1 and its
subparagraphs of this Letter are an expression of interest only and are not
binding; provided however, that the provisions contained in Sections 5, 6, 7,
10, 11, 12, and 15 hereof shall be binding on the Parties notwithstanding the
termination of this Letter for any reason (“Binding Provisions”).

1.  TRANSACTION

1.

WHEREAS, SELLER owns One Hundred percent (100%) of the shares of an entity to be
formed and incorporated under the laws of a state to be determined (“CORP”) for
the purpose of exploring, developing, operating, investing in, acquiring,
expanding, selling, managing, and financing, directly or indirectly oil and gas
properties, oil and gas commodities produced from such properties, and any gas
pipeline gathering system related to such properties, and the development,
acquisition, and improvement of technology, know-how, trade secrets, and other
intellectual property and rights therein; and

2.

WHEREAS, SELLER has a Master Agreement with its drilling partner and operator
(“AFFILIATES”) which allows SELLER to receive a sixty-two and six tenths percent
(62.6%) of seventy one and 875 hundreds percent (71.875%) royalty based on
revenues per producing well and AFFILIATES to receive a thirty-seven and four
tenths percent (37.4%) of seventy one and 875 hundreds percent (71.875%) royalty
based on revenues per producing well; and

3.

WHEREAS, AFFILIATES have exclusive drilling rights to approximately 60,000 +
acres of oil and gas bearing properties with landowners in central and south
central Kentucky and Tennessee whereby AFFILIATES will receive 100% of the net
revenues after the landowner’s royalty fee which will be between twelve and one
half percent (12.5%) and twenty-eight and 1/8 percent (28.125%) and applicable
transportation costs, per producing well; and

4.

WHEREAS, CORP has a contract with SELLER for 100% of SELLER’s sixty-two and six
tenths percent (62.6%) of seventy one and 875 hundreds percent (71.875%) royalty
based on revenues up to 500 producing wells on the 60,000 + acres that
AFFILIATES have various agreements/leases on the oil and gas bearing properties
with landowners in the State of Kentucky whereby AFFILIATES will receive 100% of
the net revenues after the landowner’s royalty fee which will be between twelve
and one half percent (12.5%) and twenty-eight and 1/8 percent (28.125%) and
applicable transportation costs, per producing well; and

5.

SELLER requires the assistance of the PURCHASER in order to finance, explore,
develop, market, and sell the products and services of CORP; and

6.

WHEREAS, the PURCHASER is desirous of purchasing from SELLER a 51% interest in
CORP to finance, explore, develop, market, and sell its products and services
upon the terms and conditions hereinafter set out; and

7.

WHEREAS, Bryan Mendes is the President of SELLER; and

8.

WHEREAS, the Parties will promptly, subject to the terms and conditions of this
Letter; pursue negotiations of the specific terms of the Definitive Agreement.
The Parties agree that PURCHASERS’s counsel shall prepare an initial draft of
the Definitive Agreement. The execution of any such Definitive Agreement would
be subject to the satisfactory completion of the PURCHASER’s ongoing
investigation of the CORP’s assets, and would also be subject to approval by the
respective Parties’ boards of directors no later than January 17, 2011. Based on
the information currently known to PURCHASER, it is proposed that the Definitive
Agreement, with an effective date of January 31, 2011, include the following
terms:

a.  

Basic Transaction

SELLER agrees to sell and/or assign Fifty One percent (51%) of the interest of
the CORP (“SELLER’S INTEREST”) to PURCHASER at the price set forth in Paragraph
1b below. The closing of this Transaction (the “Closing”) would occur as soon as
possible after the satisfaction or waiver of all other closing conditions; but
in no event later than January 31, 2011. The Parties shall endeavor to structure
the Transaction so that it will minimize the Parties’ tax liability under the
Internal Revenue Code.

b.  

Purchaser Share Price

PURCHASER and SELLER agree that the value of the PURCHASER SHARES will be a
minimum of USA Seventy five Cents (USA$0.75) per PURCHASER SHARE or the average
of the five (5) day closing price prior to January 31, 2011.

 

c.

Purchase Price

PURCHASER and SELLER agree that the Purchase Price for the Fifty One percent
(51%) of the interest of the CORP shall be 51% of the Third Party Valuation for
the 100% of SELLER’s sixty-two and six tenths percent (62.6%) of seventy one and
875 hundreds percent (71.875%) royalty based on revenues up to 500 producing
wells on the 60,000 + acres that AFFILIATES have various agreements/leases on
the oil and gas bearing properties with landowners in the State of Kentucky
whereby AFFILIATES will receive 100% of the net revenues after the landowner’s
royalty fee which will be between twelve and one half percent (12.5%) and
twenty-eight and 1/8 percent (28.125%) and applicable transportation costs, per
producing well.

d.

Option to Purchase

PURCHASER will have the option to purchase the remaining 49% interest in the
CORP from SELLER on a “first right of refusal basis.”

e.

Third Party Valuation

SELLER will have an Independent Third Party prepare a Valuation Report for the
Oil and Gas interest in CORP. PURCHASER and SELLER shall share the cost
responsibility with regards to the Third Party report.

f.

Delivery of Financial Statements

SELLER will have delivered to PURCHASER the Financial Statements for CORP which
financial statements will include audited financial statements for the period
ended December 31, 2010, prepared in accordance with GAAP and audited by an
independent auditor registered with the Public Company Accounting Oversight
Board in the United States.

g.

Redemptions and Transfers

PURCHASER agrees to redeem a portion of the issued and outstanding shares of
common stock owned by any officer, director or affiliate thereof and no officer,
director or affiliate of PURCHASER proportionate to the shares issued to the
SELLER plus a redemption of one hundred million shares (100,000,000) owned by
director Peter Matousek.

h.

Other Terms

The SELLER will make comprehensive representations and warranties to PURCHASER
and will provide comprehensive covenants, indemnities and other protections for
the benefit of PURCHASER. The consummation of the Transaction by the PURCHASER
would be subject to the satisfaction of various conditions, including the
condition that SELLER shall be authorized by the Board of Directors to assign
SELLER’S INTEREST to PURCHASER and that all appropriate federal and state
securities laws and regulations shall be complied with by the PURCHASER and
SELLER.

i.

Definitive Agreements.

The Parties will consult with their respective attorneys, accountants,
investment bankers and other professional advisors, as they deem necessary and
appropriate, for the purpose of negotiating and entering into a definitive
agreement setting forth the rights and obligations of the Parties with respect
to the Transaction (the “Definitive Agreement”), together with any other
necessary or appropriate agreements or instruments.

2.  ACCESS

During the period from the date this Letter is signed by the Parties (the
“Signing Date”) until the date on which SELLER provides PURCHASER with written
notice that negotiations toward a Definitive Agreement are terminated (the
“Termination Date”), CORP will afford full and free access to their personnel,
properties, contracts, books and records, and all other documents and data
during business hours and upon reasonable notice by the PURCHASER.  

3.  CONDUCT OF BUSINESS

During the period from the Signing Date until the earlier of the Termination
Date or the execution of a Definitive Agreement, PURCHASER will operate its
business in the ordinary course and agree to refrain from entering into any
transactions, unless otherwise approved by the SELLER, in writing, such approval
shall not unreasonably withheld.

4.  CONDITIONS TO CONSUMMATION

The consummation of the Transaction shall be subject, among other things, to:

a.

Completion of the due diligence satisfactory to the SELLER and PURCHASER,
respectively, in its sole discretion;

b.

Receipt of all necessary consents and approvals of governmental entities and any
other third parties;

c.

Execution and delivery of the Definitive Agreement approved by the Board of
Directors of the SELLER and PURCHASER;

d.

Clearance by the Securities and Exchange Commission of the Company’s proxy
statement for use in connection with a special meeting of shareholders relating
to the Transaction, if applicable;

e.

Approval of the principal terms of the Transaction by the affirmative vote of
holders of the necessary outstanding shares of PURCHASER Common Stock (pursuant
to the Company’s articles of incorporation, bylaws or state statute) at a duly
held special meeting of shareholders, if applicable;

f.

Approval of the principal terms of the Transaction by the affirmative vote of
holders of the necessary outstanding shares of the capital stock of PURCHASER
and SELLER (pursuant to the Company’s articles of incorporation, bylaws or state
statute) at a duly held special meeting of shareholders, if applicable;

g.

Compliance with all other applicable laws and regulations, including blue sky
laws, and the absence of a “stop order” or an injunction seeking to prevent the
Transaction;

h.

Absence of any material adverse change in the business, financial condition,
assets, prospects or operations of the PURCHASER since the effective date of the
Definitive Agreement (or other such date(s) as the Parties may agree).

5.  CONFIDENTIALITY

Except as and to the extent required by law, the PURCHASER may not directly or
indirectly disclose, or use, and will direct its officers, directors, agents or
representatives not to disclose or use to the detriment of the SELLER, or
directly or indirectly for or to the benefit to the PURCHASER any Confidential
Information (as defined below) furnished, or to be furnished, by the SELLER or
their respective representatives at any time or in any manner whatsoever other
than in connection with its evaluation of the Transaction proposed in this
Letter. For purposes of this Paragraph, “Confidential Information” means any
information about the SELLER stamped “confidential” or identified in writing as
such to the PURCHASER promptly following its disclosure, unless such information
becomes publicly available through no fault of the PURCHASER or its officers,
directors, agents or representatives, (a) the use of such information is
necessary or appropriate in making any filing or obtaining any consent or
approval required for the consummation of the Transaction, or (b) the furnishing
or use of such information is required by or necessary or appropriate in
connection with legal proceedings. Upon the written request of the SELLER or
termination of this Letter, the PURCHASER will promptly return to the SELLER or
destroy any and all Confidential Information in its possession and certify in
writing to the SELLER that it has done so.

6.  DISCLOSURE

Except as and to the extent required by law, without the prior written consent
of the SELLER, PURCHASER will direct its officers, directors, agents or
representatives not to make, directly or indirectly, any public comment,
statement, or communication with respect to, or otherwise to disclose or to
permit the disclosure of the existence of discussions regarding, a possible
transaction between the Parties or any of the terms, conditions, or other
aspects of the transaction proposed in this Letter. If PURCHASER is required by
law to make any such disclosure, it must first provide to the SELLER the content
of the proposed disclosure, the reasons that such disclosure is required by law,
and the time and place that the disclosure will be made.

7.  COSTS

The Parties will be responsible for and bear all of its own costs and expenses
(including any broker’s or finder’s fees and the expenses of its
representatives) incurred at any time in connection with pursuing or
consummating the Transaction.

8.  CONSENTS

During the period from the Signing Date until the earlier of the Termination
Date or the execution of a Definitive Agreement, the Parties will cooperate with
each other and proceed, as promptly as is reasonably practical, to obtain all
consents of third parties necessary in order to consummate the Transaction.

9.  ENTIRE AGREEMENT

The Binding Provisions constitute the entire agreement between the parties, and
supersede all prior oral or written agreements, understandings, representations
and warranties, and courses of conduct and dealing between the parties on the
subject matter hereof. Except as otherwise provided herein, the Binding
Provisions may be amended or modified only by a writing executed by all of the
parties.

10.  GOVERNING LAW

The Binding Provisions will be governed by and construed under the laws of the
State of Florida.

11.  JURISDICTION: SERVICE OF PROCESS

Any action or proceeding seeking to enforce any provision of, or based on any
right arising out of, this Letter may be brought against any of the parties in
the courts of the State of Florida, and each of the parties consents to the
jurisdiction of such courts (and of the appropriate appellate courts) in any
such action or proceeding and waives any objection to venue laid therein.
Process in any action or proceeding referred to in the preceding sentence may be
served on any party anywhere in the world.

12.  TERMINATION

The Binding Provisions will automatically terminate on January 31, 2012 and may
be terminated earlier upon written notice by SELLER to PURCHASER for any reason
whatsoever or no reason, with or without cause, at any time; provided, however,
that the termination of the Binding Provisions will not affect the liability of
PURCHASER for breach of any of the Binding Provisions prior to the termination.
Upon termination, the parties will have no further obligations hereunder, except
as stated in Paragraphs 5, 6, 7, 10, 11, 12, and 15 of this Letter, which will
survive any such termination.

13. ASSIGNMENT

Prior to Closing, SELLER may assign its interest in or under this Agreement or
in the SHARES without the prior written consent of the PURCHASER.

14. COUNTERPARTS

This Letter may be executed in one or more counterparts, each of which will be
deemed to be an original copy of this Letter and all of which, when taken
together, will be deemed to constitute one and the same agreement.

15.  NO LIABILITY

Paragraph 1 and its subparagraphs of this Letter do not constitute and will not
give rise to any legally binding obligation on the part of the SELLER and
PURCHASER. Moreover, except as expressly provided in the Binding Provisions (or
as expressly provided in any binding written agreement that the Parties may
enter into in the future), no past or future action, course of conduct, or
failure to act relating to the Transaction, or relating to the negotiation of
the terms of the Transaction or any Definitive Agreement, will give rise to or
serve as a basis for any obligation or other liability on the part of the SELLER
and PURCHASER.  

If you are in agreement with the foregoing, please sign and return one copy of
this Letter, which thereupon will constitute our agreement with respect to its
subject matter.

Very truly yours,

Xun Energy, Inc.

By: /s/ Peter Matousek

Peter Matousek,

Its: President

Duly executed and agreed as to the Binding Provisions on December 9, 2010.

Global Energy Acquisitions, LLC

By: /s/ Mr. Bryan Mendes

Mr. Bryan Mendes

Its: President