Unassociated Document


    


     

    Exhibit
10.1

    


    


    


    

     

    ENGAGEMENT LETTER

    INTERNAL CONTROLS
ASSESSMENT

     

    March 3, 2009

     

    
      
        

      



    


    Mr. Luiz
Saenz

    Chief
Executive Officer

    Loreto
Resources

    Lima,
Peru

    


    


    Dear Mr.
Saenz:

    


    Pursuant
to your request, MMS is pleased to provide Loreto with services described in
this Engagement Letter.

    


    The
remainder of this Engagement Letter contains an Executive Summary, Engagement
Assumptions, Engagement Approach and Scope, Roles and Responsibilities,
Estimated Engagement Fees, Conclusion and Appendices.

    


    Details
of MMS’s services outlined in this document should be treated as company
confidential.  Please do not hesitate to contact me should you have
any questions or comments regarding this Engagement Letter.

    


    MMS would
like the opportunity to review this with you at your convenience. We feel that a
follow-up discussion would help address any questions you may
have.  Please let us know if this is amenable to your
schedule.

    


    We look
forward to the opportunity to work with Loreto Resources as a trusted, long term
business partner.

    


     

    Sincerely,

    


    Eric E.
Marin, President

    Marin
Management Services

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    
      	
              EXECUTIVE
      SUMMARY

            


    

    


    


    After
recent discussions between Loreto Resources (“Loreto”) and Marin Management
Services (“MMS”), MMS understands that Loreto desires an Engagement Letter
(henceforth, the “Engagement Letter”) that describes and estimates the
engagement services (henceforth, the “Engagement”).

    


    In
summary, the Engagement will consist of the following services:

    


    
      	
              1.  

            	
              Internal
      Controls Review

            


    

    
      	
              2.  

            	
              Financial
      Reports Review

            


    

    
      	
              3.  

            	
              Internal
      Control Assessment Report

            


    

    


    Given the
need to provide an assessment of the current state of Internal Controls at
Loreto prior to the completion of the upcoming 10K due in March, MMS will
conduct the Engagement in a phased approach.

    


    In Phase
One, MMS will interview the necessary Loreto personnel. In Phase Two, MMS will
assess the current state of Internal Controls and provide a report summarizing
the findings. These two phases will be completed in concert with the delivery of
the 10K report and will achieve the requirements identified in Section 404 of
the Sarbanes-Oxley Act of 2002 (henceforth, “SOX”).

    


    Services
for Phase Three, Four and Five are not part of this Engagement. Should Loreto
decide to engage MMS in these services, Loreto and MMS will enter into a
separate engagement letter detailing the scope of these services.

    


    MMS will
spend an estimated 10 to 15 man-days to execute Phase One and Two.

    


    MMS
estimates the Time and Materials fees for Phase One and Two to be between
$16,000 and $24,000 plus expenses.

    


    MMS is
available to commence the Engagement on Monday, March 9, 2009.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              ENGAGEMENT
      ASSUMPTIONS

            


    

    


    


    The table
below highlights certain assumptions used by MMS in defining the estimates and
scope of services that will meet the objectives of the Engagement.

    


    


    
      
        
          
            
              
                
                  	
                          Personnel:

                           

                        	
                          Loreto
      will make available the necessary internal and third party personnel on a
      timely basis to assist MMS on Engagement services, where
      applicable.  This includes the following:

                           

                          § Chief
      Executive

                          § Financial
      Subject Matter Experts

                          § Accounting
      Subject Matter Experts

                          § Others
      as Needed

                           

                        
	
                          Insurance:

                        	
                          Loreto
      maintains a current Directors and Officers policy that fully covers MMS
      for the services provided under this Engagement Letter.

                           

                        
	
                          Others:

                        	
                          Either
      party can terminate this engagement upon written notice to the other
      party. Should such termination occur, MMS will deliver all work conducted
      up to the point of termination, and Loreto will pay all fees and expenses
      incurred up to the point of termination.

                           

                          Services
      for Phase Three, Phase Four and Phase Five are not part of this Engagement
      Letter.

                           

                          Criticality
      of 10K submission (and timelines in Appendix B) assumes that March 9, 2009
      is the start date for this Engagement.

                           

                          This
      Engagement will be Time and Materials. MMS will invoice Loreto twice a
      month or upon completion of the Engagement, whichever occurs sooner.
      Invoices will contain hours and expenses expended by MMS for the period.
      Invoices are due upon receipt.

                           

                          Should
      these assumptions prove to be incorrect, MMS will notify Loreto to the
      impact to the scope of services and estimates provided herein, if
      any.

                           

                        


                

              

            

          

        

      

    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    
      	
              ENGAGEMENT
      APPROACH AND SCOPE

            


    

    


    


    MMS will
conduct the Engagement in a phased approach as highlighted in Appendix
A.   Further, Appendix B provides a birds-eye view of the
timelines associated with these phases.

    


    Phase One
and Phase Two should be conducted as soon as possible so that the assessment
report can be completed in concert with the 10K that is itself due by the end of
March.

    


    Phase
One – Discovery

    MMS will
interview the necessary personnel, including Director(s), Executive(s), and
Financial and Accounting personnel (or third parties where appropriate), to
prepare for the upcoming assessment in Phase Two.

    


    This
Phase One will be conducted in Loreto’s office in Peru.

    


    Phase
Two – Assessment

    Based on
the Phase One interviews, MMS will review the financial reports and assess the
current state of Internal Controls at Loreto, specifically, the

    


    
      	
              ·  

            	
              Financial
      Reporting Procedures and Policies

            


    

    
      	
              ·  

            	
              Key
      Personnel and Relationships

            


    

    


    Other
areas that will be assessed, although not as vital at this early juncture in
Loreto’s life cycle are as follows: Risk Management and Mitigation Strategy,
Information and Communication, Internal Controls Culture (i.e., “Control
Environment”) and Monitoring

    


    Upon
completion of this Phase Two, MMS will create and deliver an Internal Control
assessment report, as alluded to in Section 404 of SOX, summarizing the
effectiveness of the current state of Internal Controls, and presenting it to
Loreto and its auditors.

    


    To
minimize the expense costs to Loreto associated with travel, MMS will conduct
this phase in its Houston office. If further interviews are required, MMS will
attempt to garner the necessary data via teleconferencing
technology.

    


    Phase
Three – Bridge

    (NOT PART
OF THIS ENGAGEMENT)

    


    Phase
Four – Execute

    (NOT PART
OF THIS ENGAGEMENT)

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Phase
Five – Delivery

    (NOT PART
OF THIS ENGAGEMENT)

    


    The
Engagement Letter includes estimates for these aforementioned performance
improvement areas. Should Loreto require additional services, MMS will work with
Loreto to determine course of action and impact to the estimates provided
herein.

    


    


    
      	
              ROLES
      &
RESPONSIBILITIES

            


    

    


    


    An
important factor for the Engagement is for the parties to clearly understand
roles and responsibilities.  As part of the Engagement, Loreto and MMS
will create a defined set of roles and responsibilities for Engagement team
members.  The table below describes the MMS roles that will be
assigned to the Engagement.

    


    
      
        
          
            	
                    Level

                  	
                    Role

                  
	
                    Eric
      Marin

                  	
                    Interim
      CFO

                  


          

        

      

    

    


    The exact
nature and makeup of the MMS team may change if the Engagement scope
changes.

    


    Loreto
will provide an Executive Sponsor that will be responsible for overall direction
of the Engagement and for owning the deliverables resulting from Engagement
phases.  In addition, Loreto will make the necessary Subject Matter
Experts available throughout the term of this Engagement.

    


    


    
      	
              ESTIMATED
      ENGAGEMENT FEES

            


    

    


    


    We
anticipate the following Engagement highlights based on Appendix B:

    


    
      	
              ·  

            	
              Engagement
      Commencement: As soon as possible in order to have the 10K
      completed before the end of March
2009.

            


    

    


    
      	
              ·  

            	
              Engagement
      Duration: approximate two (2) to four (4) weeks for the Engagement
      services.

            


    

    


    
      	
              ·  

            	
              Estimated
      Total Man-Days: ten  (10) to fifteen
  (15)

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              ·  

            	
              Engagement
      Rate: $200 per hour, discounted from a standard $250 hourly
      rate

            


    

    


    
      	
              ·  

            	
              Pricing and
      Engagement Duration Assumptions: assumes the Engagement estimates
      are based on the Engagement Assumptions and on the scope highlighted under
      “Engagement Approach and Scope”.

            


    

    


    


    
      
        	
                 

                Engagement

                Services

                 

              	
                 

                Estimated

                Fee

                 

              
	
                 

                Phase
      1 and 2 Engagement Services

                ($200
      / Hour * 10 to 15 Days)

                 

              	
                 

                $16,000
      - $24,000

                plus
      expenses

                 

              


      

    

    


    Actual
billing will be on a Time and
Material basis. Also, expenses are not included in the fees above;
moreover, MMS does expect to incur travel, lodging, transportation and meal
expenses while conducting the services under this Engagement
Letter.

    


    Should
either of us identify changes in scope that are not identified under the section
“Engagement Assumptions”, “Engagement Approach and Scope”, or other matters
arise that require additional assistance on this Engagement, MMS will inform
Loreto and discuss the impact to these fees and expenses prior to
proceeding.

    


    


    
      	
              CONCLUSION

            


    

    


    


    In
conclusion, we thank you for the opportunity to allow us to propose our
solution. MMS is prepared to participate on the Engagement beginning March 9,
2009 and book the necessary flights upon the execution of this Engagement Letter
signifying your understanding and acceptance of the Engagement.

    


    


    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	
                                    Name:

                                  	Luis
      F. Saenz
	 	 
	
                                    Title:

                                  	President
      and CEO
	 	 
	
                                    Company
      Name:

                                  	Loreto
      Resources Corporation
	 	 
	
                                    Date:

                                  	03/04/09
	 	 
	
                                    Signature:

                                  	/s/
      Luis F.
Saenz