EXHIBIT 10.2
XXXXX FOREST PRODUCTS LLC.
0000 Xxxxxx Xx, Xxxxxxxx, XX, XXX 00000
0-000-000-0000
This Memorandum of Understanding is made between:
Xxxxx Forest Products (JFP)
0000 Xxxxxx Xx.,
Xxxxxxxx, XX, 00000
XXX
and:
Xxx Xxxxxx Forestry Limited
XX Xxx 0000
Xx Xxxxxxxxx
XX
Re: Memorandum of Understanding/Biomass
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Further to our discussions, meetings and prior exchange of letters as
applicable, we write this letter as the next step to organize and set plans in
motion as noted herein.
The intent of this memorandum of understanding (MOU) is to arrive at a mutually
beneficial business relationship to manufacture densified Biomass, such as Wood
Pellets, Briquettes and Pucks (being referred hereinafter as "Biomass"). The
capital providers we are working with seek further detail in order to assess
financing this Biomass project and in the interests of making sure our
understanding is complete, we have restated some terms from our previous
discussions herein as well.
This MOU focuses on four main elements; being the project profile and what you
and we bring to the MOU and a Plan of Action. Once any due diligence conditions
are met, we agree that we will forthwith instruct our solicitors to draw a
proper legal agreement reflecting our arrangement.
A. Project Profile
This project is concerning the creation of Biomass located in the
East Coast of the North Island, New Zealand and maybe more fully
outlined in that area marked in heavy outline on the attached
map. While the exact boundaries of the project area is not fully
defined (either due to the not knowing the commercial source of
the Biomass, lack of proper survey maps, drawings or political
considerations), the project area consists of the following
minimum characteristics:
A. Allowable annual cut or availability of Biomass through
sawmill residue such as sawdust, shavings, hogfuel, wood
chips, Pulp Logs and/or residuals from logging operations)
of an initial 250 000 tons per annum and project that it can
be increased to 500 000 tons within 2 years of commencing
the project.
B. Tenure of ownership is either a long term lease, license,
outright ownership or hereditary rights of ownership of at
least 15 years
C. Logging and access transportation network (of either roads
or water) is owned by or able to be accessed without
restriction
D. Title to the area where we can construct a Biomass
production mill (the "Mill") is geotechnically capable and
stable to hold a Mill and also has the ability to grant a
legally bind able lease to secure the tenure of the Mill on
that land (so as there will be no legal challenge to the
Xxxxx right to occupy the land
E. Infrastructure such as roads, rail, dock facilities for
Oceangoing Vessels capable of supplying the Mill exist, as
well as moving the above tonnage to market in an
economically viable way..
Based on the above mentioned Project Profile, we are proceeding
in the following fashion
B. Xxx Xxxxxx Forestry Ltd. and Juke New Zealand Ltd. (herein the
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"Fiberholders")
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1. The Fiberholders are incorporated under Laws of New Zealand
and have the legal right to operate the businesses they do.
2. The Fiberholders has under their control the Project Profile
as noted above and has the ability to deliver the Project
Profile on the terms noted herein
3. The Fiberholders desire to initiate and maintain a
sustainable relationship with Xxxxx Forest Products to
manufacture Biomass; and
4. Agree to exclusively sell its Biomass to Xxxxx Forest
Products, or the entity created as a result of this
agreement.
X. Xxxxx Forest Products LLC
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1. JFP. is a Limited Liability Corporation incorporated in
accordance with the laws of the Lummi Nation located within
the United States of America and is owned and controlled by
Xxxxx X Xxxxx, a registered Lummi Nation tribal member.
2. Has the ability to provide a minority and special category
business (Native American, Service Disabled Veteran,
operating within a historically underutilized Business Zone)
in relationship to institutions within the United States and
beyond which allows it to access markets within the United
States and beyond that maybe beneficial to the parties.
3. Has developed relationships with national and international
public and private entities (hereinafter the "Capital
Providers") that may have the ability to finance and
construct one or more Xxxxx to manufacture densified
Biomass.
4. In order to source such financing and construction
facilities from the Capital Providers, JFP needs to source
and provide this Project Profile for evaluation which may
result in further information requests and also assignment
of some or all of this MOU to the Capital Providers such
that financing can be arranged.
5. Part of JFP's market mandate is to source supply of woody
Biomass to an international market.
6. JFP desires to expand its international presence in the
green Energy Biomass sector, and has identified New Zealand
as an Area of interest for its endeavors as JFP has
identified suitable markets for the Biomass in Asia and
Europe and North America, and to efficiently meet its needs
JFP is needing biomass from New Zealand and Australia to
service these markets.
7. JFP is also looking to expand the domestic markets in New
Zealand and Australia for its Biomass markets.
D. Plan of Action
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Based on the Project Profile, both parties agree to move forward in
good faith to:
1. Refine and verify the Project Profile to create further
plans and verified inventories of Biomass to create a
suitable plan for financing to be used by the Capital
Providers. That refined Project Profile plan will identify:
a. The number and plant Mill locations
b. Construction Costs for the Xxxxx
x. Xxxxx biomass tenure length and the ability to JFP to
enter into contracts to secure such plants on the
various locations
d. General feasibility of the various locations.
2. to the extent necessary assign this MOU to the Capital
Providers to permit the financing to be set in motion to
construct initially such Biomass Mill adjacent to the
Sawmill owned by the Fiberholders, using its sawdust and
shavings in addition to forest residue and other woody
biomass accessible to the Fiberholders to create Biomass.
3. Identify additional Areas suitable for the manufacture of
densified biomass in both the North and South Island of New
Zealand.
4. Engage in formal business documents that would:
a. Define the business relationship
b. Specify procedures for dispute resolution
c. Enable the creation of documents suitable for
financing.
5. This MOU may be assigned in whole or in part to the Capital
Providers working with JFP at any time.
Signed on this _____ Day of ______________ 2009
Xxxxx Forest Products LLC:
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Authorized Signatory
Xxx Xxxxxx Forestry Ltd:
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Xxx Xxxxxx - Owner
