Mr. Pedro Barquet From Ecuador
B&B Madera S.A.
Bayano Wood Development
On January 25,2013, the General Congress granted B & B Madera S.A. the rights to the harvesting, extraction and processing of trees (snags) from Lake Bayano in the area of Parti, Nacruz Gandi y Tabardi with the approval of the General Congress of the Kuna of Madugandi ("The Kuna Contract").
The Aquatic Resources Authority of Panama (ARAP) DGOMIIDMRA-648-12 official letter of October 18, 2012 addressed to the Director of Integrated Management of Watersheds Authority (National Environmental ANAM), awarded a business license to B&B to initiate the development of the Tilapia Business, as well as the extraction of
underwater timber or "snags" from Lake Bayano in the area ofParti, Nacruz Gandi y Tabardi.
Pedro Barquet submitted to Hollund a business plan ("BP") representing that there are approximately 20,000 underwater trees (snags) or l0,000,000 board feet of timber located within the Lake Bayano Concession described as area of Parti, Nacruz Gandi y Tabardi. This business plan (BP) is the chief component which Hollund based their revenue calculations and monetary proposal to Mr. Barquet.
DEFINITIVE AGREEMENT
The parties to this Letter of Intent will endeavor to finalize and execute a definitive agreement (the "Definitive Agreement") defining the Transaction which shall include the terms below and such other provisions as may be mutually agreed upon, on or before July 25, 2013.
TOTAL CONSIDERATION
Hollund will pay to B&B an amount equal to an aggregate amount of $180,000 USD for Eighty Percent (80%) of the shares ofBWD payable as follows:
(i) First payment of $25,000 by wire transfer to B&B Madera S. A. within 4 days of signing of this LOI. ; and
(ii) Second payment of $155,000 within 4 days of signing the Definitive Agreements subsequent to this LOI, and
(iii) Hollund shall pay B&B throughout 18 months the total sum of $500,000 USD (collectively the "Total Consideration") subject to mutually agreeable payment terms. The issuance of the Consideration is dependent upon Hollund's successful due diligence of the Concession and the ability of your company to provide Hollund all of the required documents. This amount corresponds to a Guarantee income for the sales of the logs independent of its selling prices or the volumes that the patented technology will produce all pursuant to 2.7 of this LOI. To that extent, Hollund will make every effort to invest within 120 days approximately $113.000 for the building of the ramp and purchase of lake side equipment and infrastructure and the necessary working capital to begin the extraction of wood as soon as possible.
(iv) Pedro Barquet does hereby agree to manage the day to day operations of the project (personnel, extraction, logistics, etc.) by spending at least two weeks a month at the lake. The other two weeks he will leave people he trust in charge of the operations. Hollund will cover the expenses Mr. Barquet may have for those two weeks. This amount is to be established in the Definitive Agreement. Hollund and Mr. Barquet will work together at the time the wood is ready to be sold to achieve the best price scenario (whether lake side sale or milling) for Hollund.
The Definitive Agreement shall provide for the following conditions for the closing to take place:
6.1 The Congress pursuant to the SECOND CLAUSE of the Kuna contract agrees to apply for and obtain ALL of the necessary permissions, certificates and/or any other applicable form for the removal extraction and marketing of trees in the areas of Parti, Nacruz Gandi y Tabardi from the National Environmental Authority (ANAM) as well any other permits as other institutions such as ARAP, etc. may require.
6.2 Approval of the Congress, pursuant to the FOURTH CLAUSE of the Kuna Contract, of the assignment of B&B's rights to BWD to harvest, extrqtct and process underwater timber or "snags" from Lake Bayano in the Concession described as area of Parti, Nacruz Gandi y Tabardi.
This approval and the agreement specified in the point 6.1 have to be notified III one communication to BWD.
