REAL ESTATE SYNDICATION AGREEMENT

REAL ESTATE SYNDICATION AGREEMENT

THIS AGREEMENT is hereby entered into on this ………………day of …….……………. Two Thousand and ……………………………

BETWEEN

1.[Your Company Name], with a principal address at [Company Address] hereinafter referred to as (“Sponsor”)

AND

2.[Investor’s Name], an individual/entity with a principal address at [Investor’s Address] hereinafter referred to as (“Investor”). Collectively referred to as (“Parties.”)

RECITALS:

WHEREAS, the Sponsor, a Limited Liability Company (LLC), holds expertise in the strategic acquisition, proficient management, and judicious disposition of a diversified portfolio of residential and commercial real estate properties;

WHEREAS, the Investor, [Investor’s Name], seeks to deploy available capital into a meticulously structured real estate venture that aligns with their investment objectives, risk tolerance, and financial goals;

WHEREAS, the Sponsor has meticulously curated a comprehensive investment proposal outlining the salient details of a real estate project entitled [Project Name], encompassing a [Brief Project Description], supported by an in-depth market analysis, financial projections, and risk assessments;

WHEREAS, the Investor, having thoroughly reviewed and assessed the aforementioned investment proposal, is duly impressed with the Sponsor’s strategy, vision, and track record, and aspires to participate as a financial contributor in the realization of the [Project Name] undertaking;

WHEREAS, the Sponsor acknowledges the Investor’s intent and expresses its willingness to extend the opportunity for investment, subject to the terms, conditions, and obligations enshrined in this Agreement, to foster a mutually advantageous partnership.

NOW, THEREFORE, in consideration of the premises and covenants contained herein, the Parties hereto agree as follows:

  1. TERM OF AGREEMENT:

This Agreement shall commence on the Effective Date and continue until the termination of the Project or until the Investor has received a total distribution amount equal to their original investment plus accrued interest, whichever occurs later.

  1. INVESTMENT AMOUNT:

The Investor hereby agrees to invest a total amount of [Investment Amount] (“Investment”) in the real estate project as identified by its formal designation, [Project Name] (“Project”). The Investment shall be remitted to the Sponsor within [Number] days of the execution of this Agreement, in a manner as agreed upon by both Parties. The Investment shall be utilized exclusively for the purposes of the Project, including property acquisition, development, management, and other related expenses.

  1. INTEREST RATE AND ALLOCATION:
  2. The Investor’s Investment shall accrue an annual compound interest rate of [Interest Rate]. Interest shall be calculated and compounded on a monthly basis, based on the outstanding Investment amount at the beginning of each month. The accrued interest shall be added to the principal Investment on a monthly basis, contributing to the cumulative growth of the Investment.
  3. The net profits generated by the Project shall be allocated to the Investor in accordance with their proportionate share of the total Investment. The allocation shall be calculated by dividing the Investor’s Investment amount by the total Investment amount contributed by all investors. This share-based allocation methodology ensures that the Investor’s returns are commensurate with their capital contribution.

Prior to the distribution of profits, the Sponsor shall deduct any project-related expenses, including but not limited to property management fees, maintenance costs, property taxes, and any other bona fide expenditures directly associated with the Project’s operations. Any taxes levied on the Project’s income shall also be deducted from the gross profits before allocation.

  1. REPORTING AND COMMUNICATION:
  2. The Sponsor, as part of its ongoing commitment to transparency, shall provide the Investor with quarterly financial reports detailing the Project’s financial performance. These reports shall encompass comprehensive information regarding the Project’s income, operating expenses, cash flow, and financial position for the preceding quarter. Furthermore, an annual comprehensive report, audited by a reputable and independent third-party auditing firm, shall be prepared and furnished to the Investor. This annual report shall provide an in-depth analysis of the Project’s financial health, outlining key metrics, trends, and insights.
  3. Recognizing the Investor’s legitimate interest in staying informed about their investment, the Investor shall possess the right to request additional information or seek clarification on any financial matters related to the Project. The Sponsor shall make reasonable efforts to promptly respond to such inquiries and provide any necessary documentation or explanations to ensure the Investor’s understanding of the Project’s financial performance.
  4. DISTRIBUTION:
  5. The Sponsor commits to distributing the net profits and returns generated from the Project to the Investor on a quarterly basis. The calculation of net profits shall involve deducting all allowable and reasonable project-related expenses, taxes, and management fees from the total revenues generated by the Project during the specific quarter.
  6. All distributions shall be completed within thirty (30) days following the conclusion of each distribution period. Alongside each distribution, the Sponsor shall furnish the Investor with a comprehensive and itemized breakdown detailing the calculation methodology utilized to determine the Investor’s portion of the distribution. This detailed breakdown shall promote transparency and provide clarity regarding the distribution process.
  7. PAST PERFORMANCE DISCLAIMER:

The Investor conscientiously acknowledges and accepts that any past performance records of the Sponsor or any previous real estate ventures undertaken by the Sponsor do not guarantee or serve as an indicator of future financial outcomes or returns. The Investor understands that real estate investments inherently carry risks and that profitability can be influenced by a multitude of factors, including economic conditions, market trends, and unforeseen events. The Investor acknowledges and agrees that the Sponsor assumes no responsibility or liability for any variations between past performance and future results.

  1. CONFIDENTIALITY AND NON-DISCLOSURE:
  2. Both Parties, the Sponsor and the Investor, mutually agree to uphold and enforce strict confidentiality measures with regard to all Project-related information. This commitment encompasses, but is not limited to, financial data, proprietary methodologies, strategic plans, property particulars, and the intricacies of investment terms. The Parties shall exercise the utmost caution in safeguarding such sensitive information from unauthorized disclosure or use.
  3. The Investor shall refrain from disclosing any aspects of their participation or investment in the Project to any third parties without obtaining express and written consent from the Sponsor. This confidentiality obligation shall endure beyond the termination of this Agreement. In cases where disclosure is required by applicable legal or regulatory obligations, the Investor shall provide advance notice to the Sponsor to enable the Sponsor to take any necessary legal measures to safeguard confidential information.
  4. INDEMNIFICATION AND LIMITATION OF LIABILITY:
  5. The Sponsor, operating as a Limited Liability Company (LLC), undertakes the obligation to indemnify and hold the Investor entirely harmless against any and all claims, losses, liabilities, damages, and reasonable expenses incurred as a direct result of the Sponsor’s gross negligence, fraudulent activities, or deliberate misconduct. The Sponsor’s indemnification commitment extends to cover legal costs, settlement amounts, and other expenses reasonably incurred by the Investor in relation to the aforementioned matters.
  6. In turn, the Investor acknowledges and assumes the responsibility to indemnify and hold the Sponsor harmless against any claims, losses, liabilities, damages, and reasonable expenses arising from the Investor’s unauthorized, improper, or unlawful utilization of confidential information belonging to the Project or any other parties involved. Furthermore, the Investor shall indemnify the Sponsor against any losses or liabilities resulting from the Investor’s breach of this Agreement or violation of any pertinent laws and regulations. This indemnification encompasses legal fees, settlement expenses, and other reasonable costs incurred by the Sponsor due to the Investor’s actions.
  7. TERMINATION:
  8. This Agreement possesses the provision for termination by either Party in the event of a material breach of any provision contained herein by the other Party. The Party seeking termination shall initiate the process by providing written notice to the other Party, outlining the nature of the alleged breach. The recipient of the notice shall have a fixed period of [Number] days from the receipt of the written notice to rectify the breach and achieve compliance with the relevant provision. If the breach persists beyond this specified timeframe, the notifying Party reserves the right to terminate this Agreement, effective upon the expiration of the stipulated [Number] days.
  9. It is expressly understood that the termination of this Agreement, regardless of the Party initiating it, shall not absolve either Party from their obligations, responsibilities, and liabilities incurred prior to the termination date. Certain rights and obligations that, by their inherent nature, should extend beyond the termination of this Agreement, shall persist even post-termination. These encompass, but are not restricted to, confidentiality commitments, indemnification obligations, and the constraints outlined in the limitation of liability clauses.
  10. DISPUTE RESOLUTION:

In the event of any dispute arising out of or relating to this Agreement, the Parties agree to first attempt to resolve the matter amicably through mediation. If mediation does not result in a resolution, the dispute shall be settled through binding arbitration in accordance with the rules of the American Arbitration Association. The costs of mediation and/or arbitration shall be borne by the party initiating the dispute.

GOVERNING LAW AND JURISDICTION:

  1. Governing Law: This Agreement shall be governed by and construed in accordance with the laws of [State/Country], without regard to its conflict of law principles.
  2. Jurisdiction: Any legal action or proceeding arising under or in connection with this Agreement shall be brought exclusively in the courts of [City, State/Country], and the parties hereby submit to the personal jurisdiction of such courts.
  3. ENTIRE AGREEMENT:
  4. This Agreement constitutes the entire understanding between the parties concerning the subject matter herein and supersedes all prior and contemporaneous agreements, whether oral or written.
  5. AMENDMENTS:
  6. Any amendments or modifications to this Agreement must be made in writing and signed by both parties.
  7. ASSIGNMENT:

This Agreement may not be assigned by either party without the prior written consent of the other party, except in the case of an assignment to an affiliate or successor of the assigning party.

  1. WAIVER:

The failure of either party to enforce any provision of this Agreement shall not be deemed a waiver of such provision or the right to enforce it in the future.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

Signed by or on behalf of:

THE UNDERSIGNED HAVE READ, FULLY UNDERSTOOD AND BY SIGNING

SPONSOR                                                      INVESTOR

NAME:                                                           NAME:

_______________________________                ___________________________

SIGNATURE:                                                   SIGNATURE:

_______________________________               ___________________________

DATE:                                                            DATE:

_______________________________               ___________________________

 

 

 

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