June 14, 2005
Maple Industries and Associates
2 nd Fl, Sanghvi Sadan
Mumbai 400063, India
This letter agreement represents the basis of the formation of a joint venture in India by Alpha ProTech Engineered Products, Inc. and Maple Industries and Associates.
1. The joint venture is in the form of an India Incorporated Company under the name of Harmony Plastics Private Limited which is to be owned on a 50/50 basis by Alpha ProTech Engineered Products, Inc. and Maple Industries and Associates.
2. Harmony Plastics Private Limited is to manufacture High Density Polyethylene / Polypropylene woven fabrics and tape for Alpha ProTech Engineered Products, Inc. but is also able to manufacture for any other company.
3. The joint venture is to be financed as follows:
• Each company is to contribute $350,000US in the form of $58,000US Share Capital and $292,000US Share Premium for a combined total of $700,000US.
• Maple Industries and Associates is to arrange a bank loan of $1,650,000US totally guaranteed by them and not by Alpha ProTech Engineered Products, Inc. The bank loan is to be repaid monthly over a maximum of a six year term. Earlier payments can be made without penalty. The lending bank will have first and exclusive charge over the present and future assets of Harmony Plastics Private Limited in accordance with India laws. Repayment of the term loan will take precedence over the advance repayment of Alpha ProTech i.e. loan from Alpha ProTech will be subordinated to the bank loan
4. In addition Alpha ProTech Engineered Products, Inc. is to advance $1,000,000 for the purchase of material. This advance is non interest bearing and $500,000 is to be repaid monthly over a six year term commencing on the thirteenth month a