LETTER OF AGREEMENT
Pan Pacific Group International Ltd
North, Central & South America, Asia, Africa, Middle East, Eastern &Western Europe, and the Caribbean
Exhibit 10.1
March 20th, 2012
Monar International Inc
1103 United Success Commercial Center
000 Xxxxxx Xxxx, Xxxxxxxx Xxx
Xxxx Xxxx, Xxxxx
Attn: Mr. Xxxxxx Xxxxxx
Director
Dear Sir:
Re: OFFER TO PROVIDE SERVICES FOR MONAR INTERNATIONAL INC.’S SURINAME TIMBER AND LUMBER BUSINESS
Subject to and in accordance with the terms and conditions contained herein, this letter of agreement (the “Letter Agreement”) will set forth the basic understandings, terms and conditions relating to the services to be provided to Monar International Inc. (“Monar”), a company organized under the laws of Nevada, United States of America, for Monar’s Suriname Timber and Lumber Business (the “Transaction”) by the Pan Pacific Group International Ltd. (“PPGI”), a company organized under the laws of Trinidad & Tobago.
Monar and PPGI also acknowledge that they intend to enter into an additional service agreement by way of a more formal agreement (the “Formal Agreement”) and other documents that more fully delineate and formalize the terms outlined in this Letter Agreement, failing which the following terms will apply:
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1.
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Form of Transaction.
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PPGI and Monar have agreed to the terms as follows:
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a.
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PPGI will be paid a 10% fee on amounts for negotiating logging contracts in the Republic of Suriname as per the attached schedule (“Schedule A”) to be completed over a 4-year period from commencement of the final agreement.
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b.
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PPGI will be paidUS$5.00 per cubic metre for Asia and European export logs payable FOB Suriname.
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00X Xxxxxxx Xxxx, Xxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx & Tobago Phone: (597) 880 - 1771
Email: xxxxxxxxxxxxx@xxxxx.xxx Website: xxxxxxxxxxxxx.xxx
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c.
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PPGI will be responsible for supervision of logging operations and all local administrative and support activities to facilitate the export of logs and lumber and the sale of domestic logs and lumber.
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d.
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PPGI is to receive a setup fee of USD20,000 payable upon signing of the formal agreement and a monthly administration fee to cover expected costs, such fee to be determined as part of the final agreement effective 30 days after commencement of operations.
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e.
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PPGI is to receive 10% of net profits on the Domestic log and lumber sales.
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f.
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PPGI will receive 500,000 restricted shares of Monar to be earned over four years as per the performance schedule specified in the formal agreement and based on production of domestic and export logs.
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2. Formal Agreement.
Additional terms, conditions and provisions may be contained in a Formal Agreement, which will be prepared and executed in form and substance satisfactory to Monar and PPGI and their respective legal counsel within 30 days of this agreement.
3. Due Diligence.
The parties’ obligations under this Letter Agreement shall be subject to the following conditions:
(a) Monar shall complete due diligence to its satisfaction and that of its counsel, as to corporate status, compliance with applicable laws, assets, liabilities, business relationship, employees and consultants available and business abilities of PPGI within Thirty (30) days after entering into this Letter Agreement.
(b) PPGI will provide Monar and its respective representatives, agents and advisers with reasonable access to, and copies of, all books, records, files and documents in PPGI as may be reasonably requested by Monar. in order that Monar may satisfy itself as to all matters relating to the business, ownership, assets, operations and liabilities of PPGI.
4. Representations and Warranties.
The Formal Agreement shall contain usual and customary representations and warranties by all of the parties in this agreement including but not limited to:
(i) due incorporation and good standing;
(ii) due authorization of the transactions and agreements relating thereto;
(iii) title of each such corporation to its assets;
(iv) correctness of financial statements;
00X Xxxxxxx Xxxx, Xxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx & Tobago Phone: (597) 880 - 1771
Email: xxxxxxxxxxxxx@xxxxx.xxx Website: xxxxxxxxxxxxx.xxx
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(v) condition of properties, equipment and other material assets;
(vi) absence of undisclosed or contingent liabilities;
(vii) absence of any material adverse change since the date of its most recent financial statements in the financial condition, results or prospects of such corporation;
(viii)absence of tax liabilities other than on a current basis;
(ix) absence of any threatened or pending litigation; and
(x) continuing validity of contracts, licenses and permits;
5. Indemnification.
All parties to this agreement shall agree to indemnify the other against any loss, damage, expense, judgment or payment (including expenses of investigation, attorney’s fees and litigation expenses) resulting from the inaccuracy of any representation or warranty made by such party in the Formal Agreement.
6. Consents.
All parties to this agreement will cooperate with one another and proceed, as promptly as is reasonably practicable to seek to obtain all necessary consents and approvals, and to endeavor to comply with all other legal or contractual requirements for or preconditions to the execution and consummation of the Formal Agreement.
7. Confidentiality.
All parties agree to treat all information (including but not limited to any information identified as “confidential” in writing and any such information which by its content or from the manner in which it is provided could reasonably be deemed to be confidential) concerning the other furnished, or to be furnished, by or on behalf of the other in accordance with the provisions of this paragraph(collectively, the “Information”), and to take, or abstain from taking, other actions set forth herein. The Information will be used solely for the purpose of evaluating the proposed transactions, and will be kept confidential by each corporation and its officers, directors, employees, representatives, agents, and advisors; provided that (i) any of such Information may be disclosed by either corporation to its officers, directors, employees, representatives, agents, and advisors who need to know such information for the purpose of evaluating the proposed transactions, (ii) any disclosure of such information may be made to which each corporation consents in writing, (iii) such information may be disclosed if so required by law and (iv) such obligation of confidentiality shall expire upon such confidential information becoming public by means other than a breach of this paragraph. If the proposed Transaction is not consummated all parties will promptly return all documents, contracts, records, or properties to the other. The provisions of this paragraph shall survive the termination of this Letter Agreement.
8. Public Disclosure.
00X Xxxxxxx Xxxx, Xxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx & Xxxxxx Phone: (597) 880 - 1771
Email: xxxxxxxxxxxxx@xxxxx.xxx Website: xxxxxxxxxxxxx.xxx
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Before the closing of the proposed Transaction, neither party shall make any public release of information regarding the matters contemplated herein except (i) that press releases shall be issued by PPGI as promptly as is practicable after the execution of this Letter Agreement, that PPGI may each continue such communications with employees, customers, suppliers, franchisees, lenders, leasers, shareholders, and other particular groups as may be legally required or necessary or appropriate and not inconsistent with the best interests of the other party or the prompt consummation of the transactions contemplated by this Letter Agreement, and (iii) as required by law.
9. Reasonable Commercial Efforts.
All parties will negotiate in good faith and use its reasonably commercial efforts to arrive at a mutually acceptable Formal Agreement for approval, execution, and delivery on the earliest reasonably practicable date. PPGI will pursue its due diligence investigation of the business, financial condition and in good faith and with reasonable dispatch. Each party hereto will also use it reasonable commercial efforts (subject to all the terms and conditions here of and the Formal Agreement) to effect the closing of the Transaction and to proceed with the transactions contemplated in this Letter Agreement and the Formal Agreement as promptly as is reasonably practicable.
10. Costs.
Monar and PPGI will each be solely responsible for and bear all of its own respective expenses, including, without limitation, expenses of legal counsel ,accountants, financial and other advisors, incurred at any time in connection with pursuing or consummating the Formal Agreement and the transactions contemplated herein.
11. Execution in Counterparts.
This Letter Agreement may be executed in original or counterpart form, delivered by facsimile or otherwise, and when executed by the parties as aforesaid, shall be deemed to constitute one agreement and shall take effect as such.
12. Governing Law.
The situs of this Letter Agreement is the State of Nevada, USA and for all purposes this Letter Agreement will be governed exclusively by and construed and enforced in accordance with the laws and Courts of the State of Nevada, USA.
13. Expiration Date.
In the event that the formal agreement cannot be finalized between the two parties by April 30, 2012, then this Letter of Agreement will expire without liability to either party.
If the parties wish to accept the terms and conditions set forth above, please execute this Letter Agreement and return an originally signed copy to the undersigned. Upon
00X Xxxxxxx Xxxx, Xxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx & Tobago Phone: (597) 880 - 1771
Email: xxxxxxxxxxxxx@xxxxx.xxx Website: xxxxxxxxxxxxx.xxx
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such execution and return, this Letter of Agreement shall constitute a binding agreement upon the parties.
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Monar International Ltd
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Per:
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Dated: April 10, 2012
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XXXXXX XXXXXX
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Mr. Xxxxxx Xxxxxx
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Authorized Signatory
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President & CEO
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Pan Pacific Group International Ltd
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Per:
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Dated: March 20, 2012
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XXXX X. XXX XXXX
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Xx. Xxxx X. Xxx Xxxx
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Authorized Signatory
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Managing Director
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00X Xxxxxxx Xxxx, Xxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx & Xxxxxx Phone: (597) 880 - 1771
Email: xxxxxxxxxxxxx@xxxxx.xxx Website: xxxxxxxxxxxxx.xxx
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Schedule A
Terms and Conditions
Monar agrees to retain PPGI as an agent/consultant to develop logging and lumber business based on Suriname timber resources aimed primarily at exports to China. Monar will provide capital at its discretion and as it deem appropriate as well as its contacts in the Chinese and other markets and PPGI will provide local services in Suriname as well as its knowledge of the market and economic conditions in Suriname.
In addition, PPGI will seek opportunities where Monar can obtain or rented timber concessions in Suriname whereby Monar will assist with financial and export arrangements, as well as securing foreign buyers.
The basic terms and conditions governing the business relationship between PPGI and Monar are:
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a.
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PPGI will be paid a 10% fee of the value of logging contracts negotiated in the Republic of Suriname as further detailed below. All logging contracts are to be at market prices, or lower if obtainable
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b.
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Term of the agreement is 4 years from the date of this Letter Agreement
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c.
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PPGI will be paid a commission of USD5.00 per cubic meter for logs exported to Asia and Europe. This commission to be payable when the logs are FOB Suriname.
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d.
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PPGI to provide supervision of Suriname logging operations and all local administrative and support activities in Suriname for the export of logs and lumber and the sale of domestic logs and lumber.
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x.
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Xxxxx will play PPGI a one-time set-up fee of USD 20,000 upon signing of the Formal Agreement and a monthly administration fee as defined in the Formal Agreement, such fee to be payable 30 days after commencement of operations.
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f.
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PPGI is to receive 10% of net profits on the domestic log and lumber sales, as defined in the Formal Agreement.
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x.
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Xxxxx will reserve 500,000 restricted shares for PPGI will receive 500,000 restricted shares, to be earned over four years as per the performance schedule specified in the Formal Agreement and based on production of domestic and export logs.
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00X Xxxxxxx Xxxx, Xxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx & Tobago Phone: (597) 880 - 1771
Email: xxxxxxxxxxxxx@xxxxx.xxx Website: xxxxxxxxxxxxx.xxx
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Log/Lumber Contracts
First year 100,000 cu. m.
Second year 150,000 cu. m.
Third year 200,000 cu. m.
Fourth year 250,000 cu. x.
Xxxxx Shares Escrowed Arrangement:
Shares to be released as follows:
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Share Release:
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Required
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Domestic
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Export
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Domestic
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Export
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Year 1
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62,500
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62,500
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75,000
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25,000
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Year 2
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62,500
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62,500
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100,000
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50,000
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Year 3
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62,500
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62,500
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125,000
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75,000
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Year 4
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62,500
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62,500
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150,000
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100,000
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Deduct 50% of all prior net amounts paid from Share market values to a maximum of 50% of share values.
00X Xxxxxxx Xxxx, Xxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx & Tobago Phone: (597) 880 - 1771
Email: xxxxxxxxxxxxx@xxxxx.xxx Website: xxxxxxxxxxxxx.xxx
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