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AGREEMENT DATED AUGUST 25, 2000
BETWEEN
AFRICA RESOURCES CORP., of #000-0000 Xxxxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxx Xxxxxxxx, Xxxxxx, X0X 0X0; (herein referred to as "first
party" or "ARC")
AND
AFFORDABLE HOMES OF AMERICA, INC., of 0000 Xxxxxxxx Xxxxxx Xxxx X-0,
Xxx Xxxxx, Xxxxxx, XXX. (herein referred to as "second party" or
"AHOA")
WHEREAS
The first party, acting as general financial consultant for AHOA,
a US based corporation with the desire to assist in the private
placement of shares of AHOA through the preparation of an Offering
Memorandum, Regulation S subscription document, Regulation D
subscription document and any other material required to facilitate
the private placement;
The first party warrants that the contents of this agreement are,
consequent to certain arrangements, binding upon AHOA;
The second party warrants that it clearly understands that its
efforts towards the scheduled private placements will be directed
solely towards `sophisticated" and/or "accredited" investors and
"non-US persons" as such terms are defined in securities regulations
in Canada or the United States;
The second party has, in principle, agreed to terms of private
placements of shares of AHOA and, recognizes the first party as
its advisor with regards to the placement, commission and inventive
terms as defined in the Term Sheet dated August 25, 2000;
The first party and the second party jointly, pursuant to the
preparation of the draft Offering Memorandum, subscription documents
and Term Sheet, jointly agree that this document represents the
binding "private placement agreement" between both parties and that
the terms and conditions contained in the foregoing paragraphs are
hereby agreed upon regardless of any earlier agreements;
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TERMS AND CONDITIONS:
1. The first party agrees to provide investment banking services to
the second party's with respect to the second party's private placement.
These services will include, but not be limited to, the preparation of
documents for private placement (Offering Memorandum, subscription
documents, etc.); presentations, introductions and sales to potential
subscribers, Investor Relations assistance, the introduction of future
strategic and/or JV partners;
2. The first party agrees to provide a corporation for AHOA's use as
per its Joint Venture Agreement with Xx Xxxx Trading and Investment Cor-
poration dated August 14, 2000; the said corporation will be formed and
provided by ARC to AHOA as either a Canadian or US corporation as
required by AHOA;
3. In lieu of services provided for the AHOA's private placement, ARC
will receive a sum equivalent to 4% of the private placement amount
(number of shares placed multiplied by the price of the share) in cash
($120,000) from AHOA; such a commission amount is payable immediately
upon receipt of the total private placement proceeds by AHOA to an
accredited designated by ARC;
4. Towards further compensation, ARC will receive from AHOA a total of
4% free trading shares (240,000 shares) and 2% (120,000 shares) in
warrants with each warrant entitling ARC (or assignee) the right to
purchase one share of AHOA at a price of US $0.50 per share within a
period of one year from the date of the issuance of said warrants;
5. Certain out-of-pocket expenses will be billed separately and will
be subject to a ceiling mutually agreed upon by both parties.
COMPLETION OF THE PRIVATE PLACEMENT:
6. The private placement is deemed to start August 25, 2000 and is
targeted for completion on September 30, 2000 (the "completion date");
7. Any agreed upon alteration in the amounts as per paragraph 3 above
(e.g. acceptance of minimum subscription amount) will also allow the
second party to adjust commissions and incentives outlined in this
agreement after discussions with the first party;
8. Any extension or extensions to the completion date will only be
made in writing between both parties to this agreement.
GENERAL:
9. This agreement is governed by the laws of the Province of British
Columbia, Canada, the laws of the State of Nevada, USA as such laws are
relevant and applicable;
10. AHOA undertakes to obtain independent legal advice to determine the
suitability of any documents prepared by ARC;
11. The objective of this agreement is to create a foundation of good
faith and understanding between both parties to enable a longer term
and ongoing relationship and discussions regarding any amendments or
extensions applicable herein will be conducted in the spirit with which
this agreement has been formulated and concluded.
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12. Contact Information:
Africa Resources Colporation
Xxxxxxx Xxxxx
Tel: (000) 000-0000
Affordable Homes of America, Inc
Xxxxx Xxxxxxxx
Tel: (000) 000-0000
