Legal–Commercial Structure Diagram

Model 1: Farm Estate with Managed Agarwood

Structured for your vertically integrated Crown ecosystem.

1️⃣ Structural Overview (Entity Relationship Diagram)

                    BUYER / INVESTOR
                (Land Title Holder)
                          │
                          │ Deed of Absolute Sale
                          ▼
                    FARM ESTATE LOT
                (Individually Titled Land)
                          │
                          │ Long-Term Management Agreement (10–15 yrs)
                          ▼
   ESTATE OPERATOR (CAPI)
   Crown Agroforestry Plantations Inc.
                          │
        ┌─────────────────┼─────────────────┐
        ▼                 ▼                 ▼
  COPI (Plantlets)   Inoculation Ops    Security & Maintenance
 Crown Organogenesis  Fusarium Protocol
   Protocols Inc.
        │
        ▼
  AGAP / Industry Partners
  (Technical Standards)

                          │
                          ▼
                HARVEST & GRADING
                          │
                          ▼
   CESI (Extraction & Processing)
   Crown Extraction Solutions Inc.
                          │
                          ▼
               GLOBAL BUYERS / EXPORT
                          │
                          ▼
                  REVENUE COLLECTION
                          │
                          ▼
               ESCROW / TRUST ACCOUNT
                          │
               ┌──────────┴──────────┐
               ▼                     ▼
        60% BUYER SHARE       40% OPERATOR SHARE

2️⃣ Legal Agreement Stack (Layered Structure)

Layer 1 – Real Estate Layer

A. Deed of Absolute Sale

  • Buyer acquires titled agricultural lot.
  • Registered with Registry of Deeds.
  • Buyer has full land ownership rights.

Optional:

  • Estate Covenants (for uniform plantation standards)
  • Environmental compliance (ECC/CNC)

Layer 2 – Plantation Operations Layer

B. Long-Term Management Agreement (LTMA)
Between:

  • Buyer (Landowner)
  • Crown Agroforestry Plantations Inc.

Key Clauses:

  • Term: 10–15 years
  • Exclusive plantation rights
  • Tree ownership structure (important)
  • Management authority
  • Performance standards
  • Insurance requirements

Critical Legal Choice:
Trees may be:

  1. Owned by Buyer
  2. Joint venture asset
  3. Owned by operator until harvest

Recommended:
Buyer owns trees; operator has management rights.

Layer 3 – Biological Input Supply

C. Supply Agreement
Between:

  • Operator (CAPI)
  • Crown Organogenesis Protocols Inc.

Covers:

  • Agaris™ Elite Plantlets
  • Genetic traceability
  • Replacement warranty
  • Survival rate benchmarks

Layer 4 – Harvest & Monetization Layer

D. Harvest & Profit Sharing Agreement

Key Elements:

  • Harvest trigger conditions
  • Grading methodology
  • Pricing formula
  • Revenue waterfall
  • 60/40 split
  • Audit rights

If extraction is included:

Agreement with:

  • Crown Extraction Solutions Inc.

For:

  • Processing
  • Value addition
  • Oil revenue allocation

Layer 5 – Financial Governance Layer

E. Escrow / Trust Agreement

Revenue Flow:

  1. Buyer contracts signed
  2. Payment goes to escrow
  3. Deduct operational expenses
  4. Net proceeds split 60/40

Escrow managed by:

  • Independent bank
    OR
  • Law firm trust account

Provides:

  • Transparency
  • Reduced dispute risk
  • Investor confidence

Layer 6 – Digital & Traceability Layer

F. Digital Asset Registry Agreement

Platform:
AgriTrace™ (Crown Blockchain Solutions)

Includes:

  • Tree-level ID
  • Inoculation timestamp
  • Harvest batch ID
  • Smart contract revenue log
  • ESG & carbon reporting

Buyer receives:

  • Dashboard login
  • Financial projections
  • Tree performance data

3️⃣ Commercial Revenue Waterfall Diagram

GROSS SALES (Export or Extraction)

        ↓

LESS:
• Processing costs
• Export logistics
• Escrow fees
• Taxes

        ↓

NET DISTRIBUTABLE PROFIT

        ↓

60% Buyer
40% Operator

Optional:
Performance bonus tier:
If market price exceeds threshold → 5% bonus to operator.

4️⃣ Risk Allocation Matrix

RiskAllocated ToMitigation
Land title issueBuyerDue diligence
Tree mortalitySharedReplacement clause
Market fluctuationSharedPre-contract buyers
Operational failureOperatorKPI-based contract
TheftOperatorEstate security
Regulatory non-complianceOperatorECC & export permits

5️⃣ Governance Structure

Plantation Oversight Committee

  • 1 Buyer representative
  • 1 Operator representative
  • 1 Independent technical advisor

Purpose:

  • Annual audit
  • Yield review
  • ESG compliance review
  • Harvest approval sign-off

6️⃣ Exit & Transfer Mechanisms

Buyer Can:

  • Sell land with management contract assigned
  • Transfer beneficial interest
  • Use as collateral

Operator Can:

  • Buy back estate at pre-agreed formula
  • Assign management to affiliate

Valuation Formula Example:
Land Market Value + (Projected Net Resin Value × Discount Factor)

7️⃣ Tax & Regulatory Considerations (Philippines Context)

  • Agricultural land classification
  • VAT on exports
  • Income tax on profit share
  • DENR compliance
  • CITES documentation (if exporting agarwood products)

Operator typically handles:

  • Export compliance
  • Phytosanitary certification
  • CITES permits

8️⃣ Strategic Advantage of This Structure

This model achieves:

✔ Asset-backed investment
✔ Professional agricultural management
✔ Transparent digital governance
✔ Export-ready monetization
✔ Bankable institutional framework

It is structured more like a managed forestry REIT model, but privately held.