JOINT VENTURE AGREEMENT WITH XX XXXXX TRADING & INDUSTRIAL CORPORATION
August 15, 2000
JOINT VENTURE AGREEMENT
This Joint Venture Agreement (the Agreement or This Agreement) is entered into
this August 14 , 2000 by and between
Affordable Homes of America, Inc, hereinafter referred to as AHOA, a Nevada
Corporation whose principle place of business is 0000 X. Xxxxxxxx Xxx. Xxxx
X-0, Xxx Xxxxx, Xxxxxx, XXX and
XX Xxxxx Trading & Industrial Corporation, LLC, hereinafter referred to as
ALNASR, a corporation registered in the Kingdom of Saudi Arabia (registration
no. 3) whose principal place of business is Xxxx Khashoggi Vila, Al Washem
Street, Murabba's District, Riyadh, Kingdom of Saudi Arabia.
WHEREAS
A. AHOA is the holder of two United States of America patents (number
5,782,970 and 5,852,077), the patents being issued for the manufactur ing of
a protected new and unique building material hereinafter refer red to as the
product;
B. AHOA has through extensive research and experience, developed low c ost,
rapidly produced housing models which meet minimum building xxxx dards for
the construction of homes in the United States and in many, if not all
foreign countries.
C. AHOA is now capable and ready to offer the product and associated home
building expertise to a joint venture partner, specifically ALNASR to
introduce, market and sell the product in the Kingdom of Saudi Arabia and in
other countries mutually selected by ALNASR and AHOA.
D. Furthermore, AHOA is now capable and ready to (a) provide full complete
technical assistance in the establishment of plants to manufacture the
product and (b) provide all the necessary expertise required to build and
market low cost homes in accordance with models created by AHOA
AND WHERAS
A. ALNASR has the experience and contacts necessary to (a) market the product
in the countries selected in the Middle East and Northern Africa and (b)
create the infrastructure necessary for AHOA to build manufacturing plants for
products where feasible.
B. ALNASR possesses the professional network which will work diligently
towards obtaining various permits and licenses as required, both for the
introduction of the product in the countries selected and for the introduction
of the product in the countries selected and for the establishment of
factories to construct manufacturing facilities in line with this agreement;
C. Furthermore, ALNASR now desires to utilize its experience, expertise and
network to ensure the success of low cost housing models by bidding for
housing projects in countries selected at the very earliest opportunity to
this signing of this agreement.
NOW THEREFORE, In consideration of one United States Dollar (US$1.00) receipt
of which is hereby acknowledged and the mutual promises and warranties
contained herein, AHOA and ALNASR hereby agree as follows:
MARKETING AND PRODUCTION, LOW COST HOUSING 1. AHOA and ALNASR agree to the
formation of two corporations called Affordable Homes (Middle East), Inc., the
said corporations, unless otherwise agreed upon to be (a) a Canadian (British
Columbia) and (b) a United States of America (Nevada) corporation
respectively;
2. AHOA and ALNASR will each hold 50% of the Canadian and US corporation ( the
"JV Corporations") respectively
3. AHOA and ALNASR understand that each of the JV corporations will be obliged
to form alliances, partnerships or even JV agreements with third parties
depending upon the individual requirements and project mechanics in each
country:
4. AHOA will hereby grant the JV corporation the exclusive rights to (a)
introduce and market the product in various countries selected and (b)
construct manufacturing and production facilities to produce the product in
the said countries selected and furthermore, unless there are fundamental
reasons to the contrary AHOA agrees to transfer such exclusive rights to any
alliances, partnerships or JV undertaken with third parties in any particular
country.
5. AHOA will also grant the JV corporation the exclusive right, jointly, with
other parties or on their own accords, to bid on low cost housing contracts in
countries selected using AHOA's product and technical support.
6. AHOA warrants and guarantees that the product is feasible and further
warrants that all technical information provided to ALNASR isaccurate and will
be accurate at all times to the best of AHOA management
7. AHOA warrants that the product is viable building product and is one which
can be produced and used at a cost substantially less that the cost of
normally existing wood or concrete based housing materials
8. AHOA warrants that is engineer and technicians will be available for on
site presentations, reviews and studies in the countries selected to assist
ALNASR in any of its efforts envisaged in this Agreement
9. ALNASR agrees to use its best efforts to introduce, market and sell the
product in countries selected and further agrees that the first country will
be selected within 7 business days of the signing of this Agreement
10. ALNASR agrees that it will arrange for the preparation and submission of
competitive bids which will be based on the use of the product (either via
local production or via exports) to produce low cost housing in the country of
countries selected.
11. ALNASR may provide, as its own contribution towards the Joint Ventures
envisaged herein, land or buildings and such land or buildings will be
acceptable to AHOA, if (a) they are deemed suitable for the furtherance of the
objectives of the joint venture and (b) they are valued as per recognized
local or international standards;
12. Each party will have equal representation of the Board of Directors of the
corporation (per 1) unless such representation needs to be altered due to
locally prevailing regulations in which case both parties shall arrive at
mutually acceptance representations;
COSTS, FEES, EXPENSES & ORGANIZATION
13. Further to a Letter of Intent dated August 07, 2000, AHOA and ALNASR have
made their initial contributions of $US 25,000.00 (United States Dollars
Twenty Five Thousand only) each towards preliminary expenses designed to
identify the precise nature of opportunities for the product in all countries
in the Middle East and in certain countries forming the Northern Africa.
14. AHOA and ALNASR hereby, agree form this juncture, to operate the agreement
only through the JV Corporations (per 1);
15. AHOA and ALNASR hereby agree that both parties will contribute a specified
amount towards their share of initial capitalization of the corporations in
such a manner that preliminary travel cost, legal fees and other expenditures
are accounted for prior to formal capitalization pursuant to the actual
implementation of country specific joint ventures for production, marketing
and bidding purposes.
16. AHOA and ALNASR hereby agree to appoint Xx. Xxxxxxx Xxxxx, President of
Africa Resources Corporation, Vancouver, as Secretary of the Canadian
corporation and AHOA appointee as Secretary of the US Corporation for the
primary purpose of maintaining and preparing books, records, timetables,
timelines and expense budgets;
17. AHOA and ALNASR hereby agree to appoint Xx. Xxxxxxx Nemerqut as General
Counsel for purposes envisaged in this Agreement;
IMMEDIATE OBJECTIVES
18. ALNASR, will, within 7 business days of the signing of this Agreement,
provide written confirmation of a least one country chosen for immediate
implementation of the objectives of the Joint Venture with AHOA, namely to
produce and manufacture the product and, further more, to promote low cost
housing projects;
19. ALNASR will within 7 business days of the signing of this Agreement,
provide a plan of action for a least four other countries where such plan will
be implemented depending upon the level of resources available to AHOA;
20. ALNASR and AHOA will cause the formation of the corporations (per 1) with
immediate effect so that the Secretaries of the Corporations can prepare and
formalize books, records, and budgets in line with the objectives of the
Agreement;
21. In order to fund the JV, and to complete other obligations under the
Agreement, AHOA will immediately conduct a private placement financing in
which cause AHOA will be actively assisted by Africa Resource Corporation and
by ALNASR;
22. ALNASR hereby agrees to make all arrangements, in conjunction with Africa
Resources, to enable AHOA to complete the targeted private placement for a sum
expected to be for a minimum of $7.00 million and for a maximum of $15 million
with the overriding provision that the bulk of the proceed excluding certain
operating and working capital costs agreed upon, will be utilized to fund
AHOA's share in the joint venture and/or joint ventures envisaged therein;
23. ALNASR is aware that shares issued as a consequence of the private
placement by AHOA will be restricted shares (either Rule 144 or Reg,'S') and
such shares may remain restricted for trading in the US either for a period of
12 months from the date of the issuance or pending AHOA effecting the
appropriate registration of the securities issued;
GENERAL
24. It is explicitly understood by ALNSAR that AHOA's near term and longer
term participation, especially in the manufacture of the product in one or
more countries, is reliant upon the success of the private placement (per 22)
and a failure to satisfactorily complete the private placement will make it
impossible for AHOA to meet the forthcoming commitments as outlined in this
Agreement;
25. The term of the Agreement shall be for a period of three (3) years with
and automatic renewal for twenty five (25) years if a minimum of US$
100,000,000.00 (United States Dollars One Hundred Million) of actual
construction value is achieved within three years where such construction
value will be the aggregate of construction expenditures in one or more
countries designated by ALNASR;26. Since the representation on the Board of
Directors (per 1) shall be equally split between AHOA and ALNASR, any
stalemate in voting- despite the best efforts of both parties- will be
submitted to an independent Arbitrator selected from the American Arbitrator
Association in which case the Arbitrator's decision will be final;
27. This agreement may be terminated for any of the following reasons:
a. By mutual consent of both parties
b. By the failure of ALNASR to secure necessary licenses permits and other
related arrangements in at least 1 country over a period of 12 months form the
date of signing this Agreement.
c. By the failure of ALNASR to forward a comprehensive plan of action for the
JV corporations within 12 months from the date of signing this Agreement;
d. By the failure of AHOA to complete the private placement envisaged herein
within 6 months from the date of signing this Agreement;
e. By the failure of AHOA to demonstrate adequately that the product meets
with all necessary minimum requirements and furthermore, to prove that the
low cost housing model is reality;
28. The Agreement may be amended at any time provided that any amended
agreement is in writing, signed by both parties and clearly referenced;
29. All timetables of timelines mentioned herein and appearing as the duties
of any of the parties to the Agreement may be extended with the written
consent of both parties to the agreement and the parties concerned hereby
agree that certain requirements or provisions may be waived provided that such
waiver is mutually agreed in writing
30. Address for notices and other communications:
AHOA Affordable Homes of America, Inc
0000 X. Xxxxxxxx Xxx. Xxxx X-0
Xxx Xxxxx, XX
#000-000-0000
Fax#-702-579-4833
e-mail:xxxx@xxxxxxxxxxx.xxx
XX XXXX Trading & Industrial Corporation LLC
Xxxxx Xxxxxxxxx Villa
Al Washem Street
Murabba's District
Riyadh, Kingdom of Saudi Arabia
Telephone: 0-0000-000-0000
Fax:0-0000-000-0000
31. The Agreement is the final written expression and the complete and
exclusive statement of the parties namely AHOA and ALNASR. It super- sedes any
and all other agreements (and letters of intent as the case may be) written or
oral between the parties and alterations or amendments hereinafter must only
be with the written and mutual content of AHOA and ALNASR:
32. The Agreement, and its terms and conditions, shall be govern by the laws
prevailing in the State of Nevada or laws in other jurisdictions if and when
applicable;
33. In the event that any pan of the Agreement is determined invalid by a
court of competent jurisdiction, such determination shall not effect the
validity of the remaining portion of the Agreement:
34. Both parties agree that, within the framework of the Agreement, certain
commission and/or finder's fees will be payable to Charlesbridge Holdings
(Europe) Corporation/Africa Reiources Corporation and to The Aiegis Group and
that the said commissions and fees will be negotiated separately and will form
part of a separate aereement.
SIGNED AND ACCEPTED
DATED: 08/15/2000
For AFFFORDABLE HOMES OF AMERICA, INC.
By: /s/ Xxxxx Xxxxxxxx
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Xxxxx Xxxxxxxx
President
FOR XX XXXX TRADING AND INDUSTRIAL CORPORATION, LLC
By /s/ XXXXX XXXXXXXXX
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XXXXX XXXXXXXXX
DIRECTOR
