| JOINT DEVELOPMENT AGREEMENT |
BETWEEN
[INSERT LLC NAME]
[INSERT ADDRESS]
(“Party A”)
AND
[INSERT LLC NAME]
[INSERT ADDRESS]
(“Party B”)
This Joint Development Agreement (this “Agreement”) is entered into as of this ________ day of ________________________ 2021, by and between Party A and Party B. (herein referred to individually as a “Party” and collectively as the “Parties.”)
RECITALS
Whereas
- The Parties have agreed to develop their business relationship for purposes of undertaking a property development project;
- Whereas Party A and Party B wish to become the absolute owners of all that parcel of land described in Schedule ‘A’; and
- This Agreement sets out the broad terms and conditions on which the Parties have agreed to establish a Joint Venture initiative and set out the rights, responsibilities, undertakings, and obligations of the Parties;
NOW THEREFORE IN CONSIDERATION OF MUTUAL COVENANTS, ASSURANCES, AGREEMENTS AND WARRANTIES SET FORTH, IT IS HEREBY AGREED BY AND BETWEEN THE PARTIES AND THIS AGREEMENT WITNESSETH AS UNDER:
- SCOPE OF THIS AGREEMENT
- The property development project will include all tasks required with respect to the development, financing, construction, operation and ownership of the Project and entering into other related documents and agreements.
- INTERPRETATION.
In this Agreement:
- CLOSING: shall mean the final phase of mortgage loan processing in which the property title passes from the seller to the buyer.
- OWNER(S): shall mean Party A and Party B.
- TITLE DEED: shall mean all the documents of title relating to the said land and premises, which shall be the subject of development at the time of execution of the agreement.
- PREMISES/PROPERTY: shall mean ALL THAT piece and parcel of land as described in schedule “A” of this agreement described herein below
- NEW BUILDING: shall mean the multifamily rental apartment, which is to be constructed over the said premises as per plan to be sanctioned by the concerned authorities.
- References to Recitals, Clauses, Paragraphs, Preamble and Schedules are to recitals, clauses, paragraphs, preamble and schedules of this Agreement, all of which form part of this Agreement.
- Table of contents, headings, subheadings, titles, subtitles to clauses, sub-clauses and paragraphs are for information and convenience only and shall not form part of the operative provisions of this Agreement or the Schedules hereto and shall not affect the interpretation or construction of this Agreement.
- Words denoting the singular shall include the plural, and words denoting any gender shall include all genders.
- Reference to statutory provisions shall be construed as meaning and including references also to any amendment or re-enactment (whether before or after the Execution Date) for the time being in force and to all statutory instruments or orders made pursuant to such statutory provisions.
- Any reference to a document in “Agreed Form” is to a document in a form agreed between the Parties initialed for the purpose of identification by or on behalf of each of them (in each case with such amendments as may be agreed by or on behalf of the Parties).
- The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The words “include”, “including” and “among other things” shall, in all cases, be deemed to be followed by “without limitation” or “but not limited to” whether or not they are followed by such phrases or words of like import.
- Any word or phrase defined in the body of this Agreement as opposed to being defined in Clause 1.1 shall bear the same meaning as defined under the relevant applicable statutes/ legislation, unless the contrary is expressly stated or the contrary clearly appears from the context.
- Unless otherwise specified, references to days, months and years are to calendar days, calendar months and calendar years, respectively.
- All approvals and / or consents to be granted by the Parties under this Agreement shall be deemed to mean approvals and / or consents in writing. Words “directly or indirectly” mean directly or indirectly through one or more intermediary persons or through contractual or other legal arrangements, and “direct or indirect” have the correlative meanings.
- Any reference to “writing” shall include printing, typing, lithography and other means of reproducing words in visible form, but excluding text messaging via mobile / smart phones or electronic mails.
- No provisions shall be interpreted in favor of, or against, any Party by reason of the extent to which such Party or its counsel participated in the drafting hereof or by reason of the extent to which any such provision is inconsistent with any prior draft hereof.
- If, in calculating a price or an amount, the relevant variables for such calculation are expressed in different currencies then all such variables for the purposes of such calculation shall be in US Dollars.
- CONTRIBUTION AND ROLES
- It is agreed that upon successful acquisition of the Property, both Party A and Party B shall be registered against the Title Deed as being the proprietors of the Property.
Provided that alternative arrangements agreed upon by the Parties shall be in writing and executed by the Parties.
- Acquisition of the Property, including title search, shall be done through Party B’s Attorney.
- Subject to clause 3.3, the Parties acknowledge and agree to distribute ownership interest in the Property and the New Building as follows:
| Party A: | 51% |
| Party B: | 49% |
- In consideration for the allocation of 51% interest in the Property, Party A agrees to:
- Secure debt financing in its own name within 9 months from a Lender (defined below) approved by the parties for purposes of undertaking construction and development of the Property. Party A shall take all necessary action to exclude Party B from all liability with respect to debt financing.
If no construction has commenced within 9 months from the date of this agreement, Party A shall absolutely forfeit 31% interest in the Property to Party B.
- Procure the requisite permits and to commence construction within 12 months from the date of this Agreement, and supply Party B with copies of the procured permits no less than 3 days from the date construction is to commence.
- Secure a construction loan for the project and commence construction of the project (as evidenced by the securing of permits).
- In the event that the Property is acquired and registered in the name of Party A, Party A shall commence procedures to register the Property in the names of Party A and Party B within five (5) days from the date of Closing.
- In consideration for the allocation of 49% interest in the Property, Party B agrees to:
- Provide initial financing strictly for the acquisition of the Property.
- At the closing of this Agreement, Party B shall provide party A with capital contribution the sum of $80,000 to be used as working capital. The working capital will be used to reimburse several investors, pay engineering costs, obtaining construction drawings, obtaining all relevant permits and any other expenses that may be incurred during the course of securing financing from a Lender for the development of the Property.
- MANAGEMENT AND ADMINISTRATION OF THE JOINT VENTURE
- Each Party shall take all such steps and do all such acts and things as may be necessary or desirable during the term of this Agreement to perform its obligations in accordance with the objectives and provisions of this Agreement and the applicable Laws.
- In the event of disability, death or winding up of either of the Parties, the surviving Party shall be responsible for completing the project, by itself or in collaboration with a third party(ies).
- MEETINGS
- Frequency. A meeting of the Parties shall be held monthly. Each Party has the right to attend the Meeting through its managing members, which managing members may, through express notice to the other party, appoint another person to represent such managing members in the meeting.
- Notice. A Meeting shall be convened by giving at least fourteen (14) days’ advance notice of such meeting in writing to the other Party. Such notice requirement may be waived in relation to any meeting if all Parties agree to shorten the notice period in respect of such meeting or attend such meeting without objection. No General Meeting shall be convened otherwise than in accordance with this Agreement.
- DEADLOCK
- The Parties shall use their best endeavors to amicably solve whatever controversy may arise between them at any Meeting. Notwithstanding the above effort, should any resolution be unable to be passed, then a deadlock is deemed to have arisen (“Deadlock”).
- In the event the Parties are unable to resolve the dispute within one (1) month from the date the Deadlock has arisen, the matter would be referred to an independent reviewer appointed by the Parties in writing (“Independent Reviewer”) for their decision. The decision taken by the Independent Reviewer shall be final and binding on the Parties. Such decision of the Independent Reviewer shall be deemed to be resolution of the Parties and shall be recorded in the minute book.
- Pursuant to the decision of the Independent Reviewer and notwithstanding anything contained herein, a Meeting of the Parties shall be called at a short notice (not being later than three (3) Business Days after the decision of the Independent Reviewer) and pass the resolution which was the subject of Deadlock in accordance with the decision of the Independent Reviewer.
- FINANCING, COMPENSATION AND RELATED MATTERS
- The Parties intend to obtain financing for the development project and the Parties also recognize that the Property will be required as security by lending institutions (“Lender”) pursuant to the Financing Agreements.
- The Parties recognize and agree the Lender will hold a first priority Deed of Trust as security for the loan facility extended to the Parties for acquisition and development of the Property. It is also recognized and agreed by Party A that the Party B and/or its managing member may be granted a Deed of Trust security position second only to the Lender.
- Upon successful completion of construction and development of the Property, each Party shall be entitled to receive 50% of the Developers Fee.
- It is recognized that Party B will be reimbursed for the total amount of funding provided by Party B from its personal resources, which reimbursement with include 20% interest on the total amount.
- TRANSFER RESTRICTIONS
- A Transfer of any interest in the Property shall be on the following conditions:
- A Party shall be entitled, at any time to sell its interest in the Property in accordance with the applicable Laws, and in terms of the provisions appearing hereinafter in this Agreement.
- Beginning on the Effective Date and ending two (2) years after a certificate of completion has been issued (“Lock-In Period”), interest held by the Parties in the Property may be transferred to any third party only with a prior written consent from the non-transferring Party.
- Either party may initiate, at any time during the term of this Agreement, discussions to buy out the other party’s Interest, or to sell its own Interest, to the other Party, or to sell both Parties’ Interests to a Third Party. In the event either party initiates such discussions, both parties will negotiate such a buyout or sale, as the case may be, in good faith; provided, however, that neither party will be obligated to sell or buy any such Interest.
- A Transfer of any interest in the Property shall be on the following conditions:
- TIME IS OF THE ESSENCE
- Time is of the essence in the performance of this Agreement
- DEFAULT
- If a Party commits a material breach of its obligations under this Agreement (the “Defaulting Party”), then the other Party (the “Non-Defaulting Party”) may serve notice of thirty (30) days (a “Default Notice”) on the Defaulting Party referring to this clause, specifying the nature of the material breach and requiring that it be remedied.
- If the Defaulting Party fails to remedy the material breach within thirty (30) Business Days of receipt of the Default Notice, the Non-Defaulting Party may elect to:
- Terminate this Agreement with immediate effect; or
- If the Property has been acquired, issue a notice to the Defaulting Party requiring it to sell its interest to the Non-Defaulting Party or to their nominee at 80% of the Fair Market Value (as defined below) (“Default Put Price”); or
- If the Property has been acquired, issue a notice to the Defaulting Party requiring it to buy the Non-Defaulting Party’s interest at 120% of the Fair Market Value (as defined below) (“Default Call Price”).
- For the purposes of this Clause 8, the “Default Price” shall be the Fair Market value (“FMV”) determined as follows:
“The FMV shall be determined as of the date of the notice for determination of FMV issued by any Party under this Agreement, as follows:
- Notwithstanding anything contained in this Agreement, the Parties may determine the FMV by mutual agreement.
- Provided that where the Parties cannot mutually agree on the FMV, the Parties may mutually agree upon an Independent Financial Advisor to determine the FMV.
- Where the Parties cannot mutually agree on: (i) the FMV; or, (ii) an Independent Financial Advisor to determine the FMV, each Party shall appoint an Independent Financial Advisor to determine the FMV (each a “Party Valuer” and collectively the “Party Valuers”), who shall each provide their determination of the FMV.
- If the difference between the values determined by the Party Valuers is within a price band of 20% of the lower of the two values, then the FMV shall be the average of the two values.
- If the difference between the values determined by the Valuers exceeds 20% of the lower of the two values, then the Parties shall agree to jointly appoint a third Independent Financial Advisor (the “Final Valuer”) whose determination of the FMV shall be final and binding on the Parties.
- For purposes of this Clause 8, the following shall constitute a ‘material breach’ of this Agreement:
- Any breach attributable to the conduct of or omission to fulfill its respective obligations by a Party and is having a significant financial impact on the other Party, provided that notice of such material breach shall have been given to the Party in breach, and such breach shall remain un-remedied for thirty (30) days after the date on which such notice is deemed to have been received;
- A Transfer or attempted Transfer, by a Party, of its interest in the Property in violation of the terms of this Agreement;
- Any of the representations or warranties set forth in this Agreement being untrue at any time whilst this Agreement remains in force.
- Any Party (or its agents, employees or representatives) having committed fraud, malfeasance, gross negligence, willful misconduct, theft or embezzlement having material impact on Business of the Property.
- Any insolvency event having occurred with any Party.
- Any Party being in material breach in any other contract/ agreement, which has a material impact on Business of the Property.
- TERM AND TERMINATION
- This Agreement shall become effective on the date of execution hereof and shall continue to be in force till such time it is terminated pursuant to the terms and conditions set out herein.
- Effect of Termination. Upon termination of this Agreement against a Party, such Party shall be relieved and discharged from all liabilities, obligations or claims under this Agreement, except for such rights, obligations and liabilities of such Party which have accrued under this Agreement prior to termination or such obligations which by their nature or pursuant to this Agreement survive termination.
- REPRESENTATION AND WARRANTIES
- Each Party hereby represents and warrants to, where applicable, and covenants with the other Party, as follows:
- It is duly organized and is validly existing under the laws of the jurisdiction of its incorporation;
- It has full power and authority to execute and deliver this Agreement and the execution of this Agreement will be valid and binding upon itself;
- All approvals, filings, consents and authorizations required by it to execute and deliver this Agreement have been obtained and are valid;
- The execution and delivery of, or the performance of obligations under, this Agreement do not and will not at any time violate or conflict with any: (i) applicable law; (ii) provision of its incorporation documents; or (iii) agreement, contract, promise, covenant, undertaking, representation or warranty, applicable to or made by it;
- This Agreement constitutes legal, valid and binding obligations of such Party, enforceable in accordance with its terms;
- The officer(s) executing this Agreement on behalf of any Party has all the requisite power and authority to execute and deliver this Agreement on its behalf, and has/have complied with all relevant procedural requirements relating to such execution; and
- Each of the representations and warranties given by such Party in this Agreement are true and correct.
- Each Party hereby represents and warrants to, where applicable, and covenants with the other Party, as follows:
- CONFIDENTIALITY
- Unless otherwise agreed, this Clause applies to:
- All information of a confidential nature and clearly identified as confidential that is disclosed (whether in writing, verbally or by any other means and whether directly or indirectly) by one Party to one of the other Parties whether before or after the date of this Agreement;
- Any information concerning the business affairs of one Party or other information confidential to that Party which one of the other Parties learns as a result of the relationship between the Parties pursuant to this Agreement; and
- Any information, discussion, arguments or information in any form relating to an existing or potential dispute between the Parties whether the same has been settled amicably or remain unsettled;
- Including any information relating to any Party’s products, operations, processes, plans or intentions, product information, know how, design rights, trade secrets, market opportunities and business affairs (together “Confidential Information”).
- Unless otherwise agreed, this Clause applies to:
- In this clause, in relation to a particular item of Confidential Information:
- The “Disclosing Party” means the party by whom (or on whose behalf) that Confidential Information is disclosed or (where there is no such disclosure) the party to whom the Confidential Information relates, or to whom the Confidential Information is proprietary or who otherwise desires that the confidentiality of the Confidential Information is respected; and
- The “Receiving Party” means the other party.
- During the term of this Agreement and after termination of this Agreement for any reason whatsoever, the Receiving Party shall:
- Keep the Confidential Information confidential;
- Not disclose the Confidential Information to any other person other than with the prior written consent of the Disclosing Party or in accordance with this Clause 11; and,
- Not use the Confidential Information for any purpose other than the performance of its obligations and the exercise of its rights under this Agreement.
- Notwithstanding the provisions of Clause 11.3, the Receiving Party may disclose Confidential Information as follows:
- To its professional advisers, to and to potential transferees of its interest (each, a “Recipient”) providing the Receiving Party ensures that each Recipient is made aware of and complies with all the Receiving Party’s obligations of confidentiality under this Agreement as if the Recipient was a party to this Agreement; and
- To other parties to this Agreement and to their Affiliates, and where disclosure is required by Law, by any court of competent jurisdiction or by any appropriate regulatory body.
- This Clause 11 shall not apply to any Confidential Information which:
- Is at the date of this Agreement or at a later date comes into the public domain other than through breach of this Agreement by the Receiving Party or any Recipient;
- Was known by the Receiving Party before receipt from (or on behalf of) the Disclosing Party (or, as appropriate, before the Receiving Party learnt of the same pursuant to this Agreement) and which had not previously been obtained under an obligation of confidence; or
- Subsequently comes lawfully into the Receiving Party’s possession from an external party, free of any obligation of confidence.
- GENERAL PROVISIONS
- Except where this Agreement provides otherwise, each Party shall pay its own costs relating to or in connection with the negotiation, preparation, execution and performance by it of this Agreement and of each agreement or document entered into pursuant to this Agreement and the transactions contemplated by this Agreement.
- The rights, powers and remedies provided by this Agreement are cumulative and are not exclusive of any rights, powers and remedies provided by law.
- If any provision of this Agreement is or becomes illegal, invalid or unenforceable under the law of any jurisdiction, that shall not affect or impair the legality, validity or enforceability of any other provision of this Agreement.
- The terms and provisions of this Agreement are intended solely for the benefit of each Party and their respective successors or permitted assigns, and it is not the intention of the Parties hereto to confer third-party beneficiary rights upon any other person.
- The Parties shall use their best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary or desirable under applicable laws and regulations to consummate or implement expeditiously the transactions contemplated by, and the agreements and understanding contained in this Agreement.
- Nothing in this Agreement is intended to authorize any Party to act as agent for any other, and no Party shall have authority to act in the name or on behalf of or otherwise to bind any other in any way (including but not limited to the making of any representation or warranty, the assumption of any obligation or liability and the exercise of any right or power).
- Dispute Resolution
The Parties agree to attempt initially to solve all claims, disputes or controversies arising under, out of or in connection with this Agreement by conducting good faith negotiations. If the Parties are unable to settle the matter between themselves, the matter shall thereafter be resolved by a final and binding arbitration. Whenever a Party shall decide to institute arbitration proceedings, it shall give written notice to that effect to the other Party. The Party giving such notice shall refrain from instituting the arbitration proceedings for a period of sixty (60) days following such notice. During such period, the Parties shall make good faith efforts to amicably resolve the dispute without arbitration. Any arbitration hereunder shall be conducted under the rules of the American Arbitration Association. Each such arbitration shall be conducted by an arbitrator agreed upon by the Parties. Any such arbitration shall be held in North Carolina. The arbitrators shall have the authority to grant specific performance. Judgment upon the award so rendered may be entered in any court having jurisdiction or application may be made to such court for judicial acceptance of any award and an order of enforcement, as the case may be. In no event shall a demand for arbitration be made after the date when institution of a legal or equitable proceeding based on such claim, dispute or other matter in question would be barred under this Agreement or by the applicable statute of limitation. The prevailing Party in any such arbitration shall be entitled to recover from the other Party, in addition to any other remedies, all reasonable costs, attorneys’ fees and other expenses incurred by such prevailing Party.
- Variation
Either party may request variations to the Agreement. The Parties shall enter into discussions to agree on any required changes, revised pricing and time for performance. Such variations will only be effective if agreed in writing by the Parties and recorded.
- FORCE MAJEURE
For the purposes of this Agreement, “Force Majeure” means an event which could not reasonably have been avoided by a diligent party in the circumstances, which is beyond the reasonable control of a party and which makes a party’s performance of its responsibilities hereunder impossible or so impractical as reasonably to be considered impossible in the circumstances and includes, but is not limited to, war, riots, civil disorder, earthquake, storm, flood or adverse weather conditions, strikes, lockouts or other industrial action, terrorist acts, confiscation or any other action by government agencies.
- Force Majeure shall not include any event which is caused by the negligence or intentional action of a Party or such Party’s subcontractors or agents or employees, or by a failure to observe good professional practice.
- Force Majeure shall not include insufficiency of funds or failure to make any payment required hereunder.
- The failure of a Party to fulfil any of its obligations hereunder shall not be considered to be a breach of, or default under, this Agreement insofar as such inability arises from an event of Force Majeure, provided that the Party affected by such an event has taken all reasonable precautions, due care and reasonable alternative measures, all with the objective of carrying out the terms of this Agreement.
- A Party affected by an event of Force Majeure shall take all reasonable measures to remove such Party’s inability to fulfil its obligations hereunder with a minimum of delay. The Parties shall take all reasonable measures to minimize the consequence of any event of Force Majeure.
- A Party affected by an event of Force Majeure shall notify in writing the other Party of such event as soon as possible, and in any event not later than five (5) days following the occurrence of such event, providing evidence of the nature and cause of such event, and shall similarly give notice of the restoration of normal conditions as soon as possible.
- Not later than fourteen (14) days after the Contractor, as a result of an event of Force Majeure, has become unable to discharge a material portion of its obligations, the Parties shall consult with each other with a view to agreeing on appropriate measures to be taken in the circumstances.
- NO WAIVER
Except where this Agreement provides otherwise, the rights and remedies contained in it are cumulative and not exclusive to rights or remedies provided by law. The failure by either Party to enforce at any time or for any period any one or more of the terms or conditions of this Agreement shall not be a waiver of them or of the right at any time subsequently to enforce all terms and conditions of this Agreement.
- SEVERABILITY
If any provision of this Agreement is declared by any judicial or other competent to be void, voidable, illegal or otherwise unenforceable, the Parties shall amend that provision in such reasonable manner as achieves the intention of the Parties without illegality or at the discretion of the Contractor, it may be severed from this Agreement and the remaining provisions of this Agreement shall remain in full force and effect.
- NOTICES
Save for the provisions of section 3, the Parties select as their respective addresses, the addresses (including email) set out below for all purposes arising out of or in connection with this Agreement at which addresses only all processes and notices arising out of or in connection with this Agreement may validly be served upon or delivered by the Parties.
THE COMPANY: ___________________________________________
___________________________________________
___________________________________________
___________________________________________
___________________________________________
___________________________________________
THE CONTRACTOR: ___________________________________________
___________________________________________
___________________________________________
___________________________________________
___________________________________________
___________________________________________
- INDEMNITY
The Defaulting Party shall defend, indemnify and hold harmless the other Party from and against all claims, damages, judgements, fines, demands, actions, suits, losses, costs and expenses (including court costs and experts’ and attorneys’ fees) which arise out of or result directly from any act, omission, conduct (including intentional, willful and wanton or that supporting a claim for strict liability), negligence or default by the Defaulting Party.
- CHANGE OF ADDRESS
Either Party may provide changes in the above addressees by notice in writing given to the other Party as aforesaid.
- GOVERNING LAW
The construction, validity and performance of this Agreement shall be governed in all respects by the Laws of the state of North Carolina.
IN WITNESS WHEREOF, each of the Parties has executed this Consulting Agreement, both Parties by its duly authorized officer, as of the day and year set forth below.
Schedule A
Description of Property
Schedule – “A”
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