Document 6438051

[Property Address] ________________________________________________ JOINT VENTURE AGREEMENT
Fund My Gap, LLC - 4237 Sherwood Court, Concord CA 94521
THIS JOINT VENTURE AGREEMENT (herein after referred to as the "Agreement") is entered into this
_______day of ______________, 20____, by and among
[Entity]___________________________________________ and/or his/her assign
[Name]______________________ , [Entity]________________________________________ (the
“Developer/Manager”) and Fund My Gap, LLC (the “Investor”), (hereinafter collectively referred to as the
"Parties" and individually as "Party") for the business purposes described in Article I.
WHEREAS, the Parties are desirous of forming a joint venture (the "Agreement") by execution of this
Agreement for the purposes set forth herein and are desirous of fixing and defining between themselves
their respective responsibilities, interests, and liabilities in connection with the performance of joint
venture project; and
NOW, THEREFORE, in consideration of the mutual covenants and promises herein contained, the Parties,
intending to be legally bound hereby after first being duly sworn, do covenant, agree and certify as follows:
ARTICLE I GENERAL PROVISIONS
1.01 Business Purpose. The business of the Joint Venture shall be as follows: Locate, identify, evaluate,
select and create offers on appropriate distressed properties in the greater [State] ______________
area as may be mutually agreed by the parties to be economically feasible and practical to acquire, fund,
budget, rehabilitate, repair, market and sell at a profit. Alternatively, distressed properties under control of
the Joint Venture may be assigned to other investors for a profit, as may from time to time be determined
to be in Joint Venture's best interest.
1.02 Term of the Agreement. This Joint Venture shall commence on the date first above written and shall
continue in existence until terminated, liquidated, or dissolved by law or as hereinafter provided.
1.03 PRINCIPAL PLACE OF BUSINESS. The Joint Venture shall maintain its principal place of business
at 4237 Sherwood Court, Concord, CA 94521. The Joint Venture may re-locate its office from time to time
or have additional offices as deemed necessary.
1.04 PROJECT/PROPERTY. The Joint Venture project/property (the “Property” or “Project”) is located in
the state of [State]_______________________
[Property Legal Description and APN Number Below]
APN Number: ___________________________
Legal Description:
[Property Address] ________________________________________________ ARTICLE II GENERAL DEFINITIONS
2.01 Affiliate. An affiliate of an entity or party is a person that, directly or indirectly through one or more
intermediaries, controls, is controlled by or is under common control of such entity or party, and is
identified to all parties as being designated by that entity or party act on its' behalf.
2.02 Capital Contribution(s). The capital contribution to the Joint Venture actually made by the Parties
shall include property, cash, sweat equity, out-of-pocket expenses, project management services and/or
any additional contributions made by either party.
2.03 Net Profits (or Losses). Any net income or loss of the Joint Venture for federal and/or state income
tax purposes shall he determined at the Joint Venture's final disposition settlement of each individual
property/project, including each item of income, expense, gain or deduction. Each party shall be
responsible for their individual respective proportion of federal, state or other income tax due on the net
profit (or shall share proportionately in any such net loss).
ARTICLE III OBLIGATIONS OF THE JOINT VENTURE PARTIES:
3.01 Financial Parties Investor shall provide down payment funds for the mutually agreed Project, in the
amount of $__________________ cash, secured with a _____ lien position and JV Agreement along
with a Promissory Note. Said funds must be committed and held available by the Financial Parties, but
will not be due until acceptance of a joint venture offer by the appropriate seller. Funds will be Fed Fund
wired to the Business Manager's account escrow at time of close within 48 hours of seller's verbal
acceptance of the joint venture offer, to assure solvency of the good faith escrow check written by the
Escrow Agent. Funds provided for Project are not to be used for purposes, including but not limited to
other properties or projects not identified herein. At the time Investor makes contribution of equity funds,
Developer shall execute record and deliver to Investor, as beneficiary, a second lien deed of trust
covering the Property (the “Deed of Trust”) and recorded in the county for which the property is located.
An original record of the filing for the Deed of Trust must be sent to the Investor within 7-10 days of the
closing for this property. The Deed of Trust may also be recorded concurrently with the deposit of funds
at closing thru escrow and shall secure the obligation of Developer, on behalf of the joint venture, to
make distributions to Investor in return of his capital contribution amount, and in payment of distributions
as defined in paragraph 4.01.
3.02 Business Manager: Developer shall provide the corporate entity to hold title on behalf of the
parties, secure funding, and provide administrative contract and business management services for the
acquisition, rehabilitation and disposition of each project/property. The Business Manager shall award
and execute contracts for services on behalf of the Joint Venture, process payments and arrange
disbursements form the lender, maintain accurate records and assure distribution of net proceeds from
each completed project.
3.03 Project Manager: Developer shall provide active field management of the acquisition, rehabilitation
and disposition of each project/property identified under this joint venture. The developer
[Entity]_____________________________________ will provide an accurate accounting of all
rehab costs if required. The rehab costs will need to be documented with actual invoices and receipts.
The Project Manager is responsible to make day-to-day operational decisions, obtain competitive bids
and provide hands-on management of contractor hired to provide services to the Joint Venture, and shall
obtain such certificates as may be required by the laws of the appropriate state tor each project/venture,
in order for the Joint Venture to operate its business and shall do ail other acts and things requisite for the
continuation of the Joint Venture pursuant to applicable law. The Project Manager shall submit contractor
invoices to the Business Manager for approval and disbursement of funds as set forth in the scope of
work/budget. The Project Manager will also acquire final Release of Liens signed by contractors for each
payment made to contractor. The Project Manager must also provide reports every week on the status of
the work performed, to be performed the following week, along with 4 photographs of each room, 2
photographs of the front, 2 photographs of the rear, or additional photographs as requested by the
Investor. Status reports must to be provided via email or fax, each Monday or as demanded by Investor
within 48 hours. Failure to do so will result in the Investor taking over the project.
[Property Address] ________________________________________________ 3.04 The Parties may be reimbursed from project funds for reasonable out-of-pocket expenses approved
in advance by the Investor in writing, related to providing various services rendered specifically on behalf
of this joint venture on approved projects.
ARTICLE IV ALLOCATIONS
4.01 Net Profit (or Loss). Commencing on the date entered and ending on the termination of the business
of the Joint Venture, all net profits, losses and other allocations to the Joint Venture shall be allocated on
a project-by-project basis as follows: Investor will receive $_________________ plus
$__________________ exit fee or up to ___% of the net profits whichever is greater from
Project Net Profit. Paid out after the Hard Money Lender and before the Developer.
4.02 Disbursement. These allocations are assignable and payable at the closing disposition and
settlement on each individual project/property and the settlement agent shall be directed to make such
disbursements at settlement within 48 hours after the PML and before the Developer.
4.03 Failure to Perform. Should any party fail to perform its obligations under this joint venture with due
diligence, the other party may on the venture's behalf proceed and then receive all allocation or the net
profit from that particular project/property for the added services.
ARTICLE V RIGHTS AND DUTIES OF THE JOINT VENTURERS
5.01 Business of the Joint Venture. The Project Manager shall have authority and discretion in the day-today management and operational control of the business of the Joint Venture for the purposes herein
stated, unless the developer exceeds the agreed upon rehab cost as outlined in the scope of work that
will be provided to the investor prior to the investors release of initial funds. The Business Manger shall
assure that the Joint Venture adheres to sound business practices, subject to both the initial approval and
periodic review by the parties to this Joint Venture. As approved, obligations or contracts executed by the
Business Manager shall constitute the act of, and serve to bind, the Joint Venture.
5.02 Prior Consent. The Project Manager will not proceed unilaterally to make offers or create an
obligation to purchase a property on behalf of the joint venture without the prior concurrence of tile other
Parties, confirmed by email or in writing to the Project Manager.
5.03 Responsibilities. The Project and Business Managers shall control the affairs of the Joint Venture to
the best of their ability and use their best efforts to carry out the business of the Joint Venture. The
Financial Parties shall provide funds at the appropriate time. However the day to day control of
operations by the developer must not exceed the initial scope of work. The Joint Venture's business for
this project shall have the authority or right to act for or bind the Joint Venture unilaterally. Developer to
provide Investor timely status reports. Failure to provide status reports as scheduled or as demanded
within 48 hours and Investor has the right to file a Notice to Perform to Developer via phone, email, or fax.
Failure to comply with Notice to Perform within 24 hours of said notice, Investor has full right to assume
control of project until such time as Developer can resume responsibilities or as deemed by Investor. The
developer shall relinquish any anticipated profit and will pay investor any and all costs necessary to
assume control and complete the project.
ARTICLE VI AGREEMENTS WITH THIRD PARTIES AND WITH AFFILIATES OF THE JOINT VENTURE PARTIES
6.01 Validity of Transactions. Affiliates of the parties to this Agreement may be engaged to perform
services for the Joint Venture. The validity of any transaction, agreement or payment involving the Joint
Venture and any Affiliates or the parties to this Agreement otherwise permitted by the terms of this
Agreement shall not be affected by reason of the relationship between them and such Affiliates or the
approval of said transactions, agreement or payment unless the developer has not fulfilled his/her duties
as outlined in this document.
6.02 Other Business of the Parties to this Agreement. The Parties to this Agreement and their Affiliates
may have interests in businesses other than tile Joint Venture. The Joint Venture shall not have the right
to the income or proceeds derived from such other business interests.
[Property Address] ________________________________________________ 6.03 Non-Compete. The Parties agree they will not compete with one another on any mutually agreed
projects/properties being pursued on the Joint Venture's behalf by causing, allowing or entering
agreements with other parties to make competing offers on said project/properties. This in no way shall
be construed as to limit or prevent any of the Parties from entering other agreements or having other
business interests in any other projects/properties not being pursued by this Joint Venture.
ARTICLE VII PAYMENT OF EXPENSES
8.01 Final Expenses. All expenses of the Joint Venture not already disbursed from project funds while in
progress shall be paid at disposition/settlement for each individual project/property by the settlement
agent. Any out-of-pocket expenses incurred by any Joint Venture party shall be submitted in writing to the
Business Manager far enough in advance to allow reimbursement checks to be issued by the settlement
agent separate from the distribution of net profits to each party. Any additional costs must not exceed the
scope of work unless otherwise approved by the developer and the investor.
8.02 Selling, Closing and Other Costs. Real estate agent, accounts payable, accounts receivable,
computer, printing, administrative, legal counsel, title service and settlement company expenses incurred
on behalf of the Joint Venture shall be billed and charged separately, and if previously disbursed, shall be
paid in full at the settlement of each individual project/property, according to industry rates unless
otherwise agreed to in writing by the Project Manager in advance. Unless otherwise agreed, Developer
shall be required to accept any fair offer received on or after thirty (30) days but before (60) days following
completion of repairs, from a qualified purchaser with no financing contingency, provided that the offer
price is at least equal to or higher of 97.5% of the appraised value of the Property after repair, if an
appraisal has been obtained (“Appraised Value”). Unless Investor otherwise agrees, Developer shall be
required to accept any fair offer received after sixty (60) days following completion of repairs, from a
qualified purchaser with no financing contingency, provided that the offered price is at least equal to the
higher of 95% of the Appraised Value, if any and this must be done with the Investor’s acknowledgement
and authorization.
8.03 CIoseout of Individual Projects. All expenses and obligations related to each project/property should
be totally fulfilled at disposition and closing by the settlement agent, and no further financial or accounting
obligations should remain open for that particular project/property after formal sale or disposition. The
rehab costs will need to be documented with actual invoices and receipts. However, if any unpaid
expenses do remain outstanding at time of settlement, then sufficient funds will remain held in escrow,
until such payments are made on a timely basis, and any residual funds thereafter be remitted to the
Parties proportionately.
ARTICLE VII INDEMNIFICATION OF THE JOINT VENTURE PARTIES
The Parties to this agreement shall have no liability to the other for any loss suffered which arises out of
any action or inaction if, in good faith it is determined that such course of conduct was in the best
interests of the joint Venture and such course of conduct did not constitute negligence or misconduct. The
parties to this Agreement shall each be indemnified by the other against Iosses, judgments, liabilities,
expenses and amounts paid in settlement of any claims sustained by it in connection with the joint
Venture.
ARTICLE IX DISSOLUTION
9.01 Events of the Joint Venture Parties. The Joint Venture shall be dissolved upon the happening of any
of the following events: (a) The adjudication of bankruptcy, filing of a petition pursuant to a Chapter of the
Federal Bankruptcy Act, withdrawal, removal or insolvency of either of the parties. (b) The order of a court
of competent jurisdiction. (c) Written notice of withdrawal sent by any Joint Venture Party to all Parties,
effective upon completion and settlement of any remaining projects already undertaken by the Joint
Venture.
[Property Address] ________________________________________________ ARTICLE X RESOLUTION OF DISPUTES
10.01 All disputes arising out of this Joint Venture Agreement between the Parties that are not resolvable
by good faith negotiations by the same shall be settled by an impartial arbitrator mutually agreed and
acceptable to the Parties involved. The cost of any such arbitration shall be paid as an expense of the
Joint Venture. In so agreeing, the parties expressly waive their right, if any, to a trial by judge or jury of
these claims, and further agree that the award of the arbitrator shall be final and binding upon them as
though rendered by a court of law and enforceable in any court having jurisdiction over the same.
ARTICLE XI MISCELLANEOUS PROVISIONS
11.01 Records. The Business Manager shall keep adequate records ill its place of business, setting forth
a true and accurate account of all business transactions arising out of and in connection with the conduct
of the Joint Venture. Project accounts shall be cash-based and accrue to the accounting/tax year in which
each individual project/property is settled.
11.02 Validity. In the event that any provision of this Agreement shall be held to be invalid, the same shall
not affect in any respect whatsoever the validity of the remainder of this Agreement.
11.03 Integrated Agreement. This Agreement, along with Attachment A Project List specified in
Paragraph 11.08, constitutes the entire understanding and agreement among me parties hereto with
respect to the subject matter hereof, and there are no agreements, understandings, restrictions or
warranties among the parties other than those set forth and herein provided for.
11.04 Headings. The headings, titles and subtitles used in this Agreement are for ease or reference only
and shall not control or affect the meaning or construction of any provision hereof.
11.05 Notices. Except as may be otherwise specifically provided in this Agreement, all notices required or
permitted hereunder, including verbal notices-to-proceed, shall be confirmed either by email or in writing
and shall be deemed to be delivered when the email delivery is confirmed or when written notice is
deposited in the United States mail (postage prepaid, certified or registered, return receipt requested),
addressed to the parties at their respective addresses set forth in this Agreement or at such other
addresses as may be subsequently specified by written notice.
11.06 Applicable Law and Venue. This Agreement shall be construed and enforced under the laws of
the State of [State] ______________
11.07 Other Instruments, The parties hereto covenant and agree that they will execute such oilier and
further instruments and documents as are or may each become reasonably necessary or convenient to
effectuate and carry out the purposes of this Agreement.
11.08 Project List. A dated project Iist will be issued to the investor along with a MLS and CMA specifying
properties for which offers and acquisition(s) are agreed to be made on behalf of the Joint Venture and
shall be provided by the Business Manager in writing to become Attachment A, an integral part of this
Agreement. Such List shall provide the address of each project of the Joint Venture, the disposition of
each property, and the pertinent dates if the property is actually acquired, rehabilitated and/or disposed
of. Said list shall also list the net profit, after all expenses, distributed to each party at settlement.
11.09 Alternative Representatives. Each Party may, at any time, substitute an alternate as its
representative by serving written notice to all the other Parties. Each such representative or alternate is
hereby granted and shall hereafter possess authority to act for such Party on all matters of interest to it
with respect to its participation in the Joint Venture, until such representation is revoked in writing by the
Party involved.
[Property Address] ________________________________________________ ARTICLE XII OTHER PROVISIONS
12.1 This agreement constitutes the entire agreement of the parties and may not be altered, unless
the same is agreed upon in writing, signed and acknowledged by the parties.
12.2 This agreement is binding upon the heirs, court appointed representatives, assigns, and
successors of the parties.
So agreed and executed this________________
/s/_____________________________________
Heidi P. Linder
Fund My Gap, LLC
INVESTOR
4237 Sherwood Court
Concord, CA 94521
PH: (925) 305-0107
Fax Number: 866-628-7795
[email protected]
m
/s/_______________________________________
[Name]___________________________________
[Entity]___________________________________
DEVELOPER/MANAGER
[Entity]_______________________________________
[Address]_____________________________________
[City]________________________________________
[State]______________________
[Zip]_______________
PH:_________________________
FAX: _____________________
EIN/Tax ID# ___________________________
Email Address: _______________________________