Real Estate Joint Venture Agreement

Submitted by: Romulo Mabanta Buenaventura Sayoc & De Los Angeles 30th Floor, Citibank Tower 8741 Paseo de Roxas City of Makati, Philippines www.rmbsa.net JOINT VENTURE AGREEMENT KNOW ALL MEN BY THESE PRESENTS: This Joint Venture Agreement is made and executed this __th day of ________, 2001 at (fill in place) 1. THE PARTIES The parties to this Joint Venture Agreement are: [*] a corporation duly organized and existing under the laws of the Philippines, with principal office at [*], herein represented by its Chief Executive Officer and Treasurer, [*] (hereinafter referred to as the "Owner"); - and [*], a corporation duly organized and existing under the laws of the Philippines, with principal office at [*], herein represented by its President, [*] (hereinafter referred to as the "Developer"); 2. REPRESENTATIONS OF THE PARTIES The representations and warranties of the parties are considerations of one and the other party in entering into this Agreement. 2.1 Representations by the Owner The Owner is the legitimate and registered owner of two parcels of land located at [*], described as [*] of Transfer Certificate of Title No [*] of the Register of Deeds for (fill in), Pampanga, with an aggregate area of [*] hectares (hereinafter referred to as the ΑProperty≅). 2.2 Representations by the Developer The Developer represents and warrants that it is a corporation organized and existing in accordance with the laws of the Republic of the Philippines that it has the knowledge, expertise and resources to develop subdivisions and that its license to engage in real estate development and management is current and valid. 2 3. 3.1 THE PROJECT The subject of this Joint Venture Agreement shall be the development of a (state what class) housing subdivision on the Property (hereinafter referred to as the ΑProject≅). The Developer acknowledges that the same has been developed in part by the Owner and that certain lots have been sold by the Owner to third persons as a result thereof. The name of the Project shall be [*]. The investments of the parties shall consist of the following: (a) Owner - the Property, costs and expenses as hereafter provided; for purposes of the Project, possession of the Property shall be transferred to the Developer only after the successful land use conversion of the Property. Developer - facilities, technical know-how, costs and expenses as hereafter provided. 3.2 3.3 (b) 4. 4.1 OBLIGATIONS OF THE DEVELOPER The Developer shall be responsible for the following: (a.) Preparation of relocation and topographic survey, subdivision scheme and all necessary alterations, technical studies, plans and designs including the division of the property into individual lot units, if needed. Subsequent individual titling of lots and obtaining tax declarations for lots which are not yet subdivided. Obtaining all the necessary permits, licenses, approvals, authorizations or registrations from or with government offices and agencies prior to the commencement of any work on the Project. Processing of the Application for Conversion or Exemption with the Department of Agrarian Reform, if needed, with all costs and expenses, inclusive of disturbance compensation, related thereto being for its account. Land development which includes the construction of the main gate to the Project, a guard house, adequate road network, water distribution system, drainage system, electrical power distribution system, provision of open spaces and landscaping in common areas. (b.) (c.) (d.) (e.) 3 (f.) Maintenance of roads, curbs and gutters, water and lighting facilities and other facilities/amenities before the issuance of a Certificate of Completion by the Housing and Land Use Regulatory Board, or their turnover to the local government unit concerned or a homeowners= association. Marketing of lots, including the documentation of sales thereof. Accreditation of the Project, approval of financing and delivery of the loan requirements of the buyer-applicants with the proper financing agency, if needed. The Developer shall complete the Project on or before (fill in). However, the completion of the Project may be extended in case of (a) fortuitous event or force majeure as defined by law or this Agreement and (b) lack of or absence of construction materials required for the Project, provided the Owner is notified thereof and the Developer exerts best efforts to obtain such materials. For purposes of this Agreement, "fortuitous event or force majeure" shall include events which are beyond the control of any of the parties such as labor/transport strikes, epidemics, accidents and natural calamities as would render it impossible for the parties to perform their respective obligations hereunder without risk of danger to themselves or their property. In case the Developer claims force majeure as the reason for its inability to perform its obligations hereunder, the Owner shall, nevertheless, have the right to seek termination of this Agreement if the same shall continue for a period of at least six months. The Developer shall submit to the Owner every (fill in) a report on the progress of construction for the (fill in) while the Project is ongoing. The Owner, through a designated representative, shall be allowed to inspect the Project while the development work is in progress, to determine whether the Project plans are being complied with. (g.) (h.) (i.) 4.2 Unless otherwise stated, the Developer shall be responsible for the costs of materials, supplies and equipment required for the completion of the Project. The Developer shall endeavor to make the saleable lots comprise 65% of the Project, while the balance shall consist of roads and open spaces. The Developer shall hold the Owner free and harmless from any and all tenant or agrarian dispute claims, supplier and third party claims, laborer=s 4.3 4.4 4 claims, contractors= lien and all other similar liens and from accidents, injuries or deaths that may arise in the development of the Project. 4.5 The Developer warrants and obligates itself to comply with all applicable laws, ordinances, rules and regulations promulgated by the proper authorities regarding the development of the Project and further holds the Owner free from any charges arising from non-compliance or breach thereof. The Developer shall provide the Owner with a monthly sales report. The parties shall pay a broker=s commission of 7% of the selling price of each lot, whether the same be sold by the Developer, the Owner or third persons/external brokers. The Owner and Developer shall share in this cost at the rates of 60% and 40%, respectively. The sale and marketing of all lots shall be undertaken by the parties or any real estate marketing firm/licensed real estate brokers duly designated by them. In all instances, however, a uniform pricing scheme for the sale of the lots will be adopted. In case a third person or firm is appointed by the parties as their marketing and collection agent, the terms of such person's or agent's engagement, will be the subject of mutual agreement between the parties. All printed matters, advertisements or marketing strategies in connection with the sale of the lots will be approved by the parties. All expenses that may be incurred for the production of such printed matter or advertisement or for the implementation of such marketing strategy shall be shared by the Owner and Developer at the rates of 60% and 40%, respectively. 4.6 4.7 4.8 5. OBLIGATIONS, REPRESENTATIONS AND WARRANTIES OF THE OWNER The Owner warrants and represents that it has good, indefeasible, valid, legal and registrable claims thereto. Save for the agrarian issues affecting the Property, all parcels of land subject for development shall be free from any lien, encumbrances, obligations and liabilities and the Owner shall, at its own expense, defend the rights that may be required by the lot buyers against all legal claims of third persons. The Owner undertakes to free and protect the Developer from any claim of whatever form or nature which any third party may have for any cause or reason arising from the execution of this Agreement not directly attributable to the Developer. Other than the disturbance compensation, if any, to be paid to tenant/claimants for the conversion process which is for the sole 5.1 5.2 5 account of the Developer, payments for any established claim of any third party shall be the sole responsibility of the Owner. 5.3 Upon the successful conversion of the Property by the Developer, the Owner shall ensure the continuous and peaceful possession and control over the Property by the Developer upon the execution of this Agreement and through the duration of the Project. The Owner warrants and represents that real estate taxes due on the Property as of the date of execution hereof have been paid in full. In case there are unpaid real estate taxes, the same shall be borne solely by the Owner. 5.4 6. 6.1 DEVELOPMENT OF THE PROPERTY The Developer hereby undertakes to develop the Property into a residential subdivision, plans and specifications for which are specified in Annex "__" hereof, which plans and specifications shall be the basis of the detailed technical studies, designs and plans to be executed by the technical persons to be engaged by the Developer for the Project. The parties agree that the said plans and specifications may be subject to changes or modifications to be mutually agreed upon by them. In addition, such plans and specifications, as amended or modified, will be in compliance with existing laws, rules and regulations. The Developer shall submit to the Owner, for its approval, the Project plans and specifications within (fill in) from the execution hereof and prior to their submission to the government offices and agencies concerned for their approval. The Developer will comply strictly with the said plans and specifications in its development of the Property. 6.2 The average saleable lot size shall be not less than (fill in words) (fill in figure) square meters. Transfer Certificates of Title to individual lots of the Project shall be held by the Owner and shall be released to the Developer upon full payment of the purchase price therefor (for subsequent release to the buyers thereof) or in case of the donation of road lots and open spaces, including alleys, parks and playgrounds to the local government unit concerned or a homeowners= association, as applicable. This Agreement and restriction on the use of each lot forming part of the Property, that is, residential purposes, shall be annotated in the Transfer 6.3 6.4 6 Certificates of Title covering the Property. The costs therefor shall be for the account of (fill in). 7. 7.1 SELLING PRICES OF LOTS The selling price of the lots shall be at rates prevailing where the Property is located. In no event, however, shall the selling price of the lots be less than P1,500.00 per square meter unless otherwise justified by the circumstances. The viable selling price and terms of payments for the lots shall be determined by the Developer which may include in-house financing without down payment and terms of up to ten (10) years. 7.2 8. 8.1 SHARING OF PROCEEDS AND EXPENSES Proceeds from the sale of the lots, after deducting expenses, shall be shared by the Owner and the Developer in the ratio of 60%-40%, respectively. The following expenses shall likewise be shared in the aforementioned ratio: (a) (b) (c) (d) real estate taxes due on unsold lots; real estate taxes due on road lots and open spaces prior to their transfer to a homeowners= association or local government unit; value-added and withholding taxes due on the sale of the lots; and broker=s commissions. All other expenses incurred in connection with the development of the Project and the sale of lots therein shall be for the account of the Developer. 8.2 The respective shares of the Developer and Owner from the gross sales of saleable lots shall be paid on the 15th day after every end of the month (cutoff period) from all cash receipts. The Owner shall appoint its representative to the marketing office of the Developer to act as Assistant Cashier. This monthly sales report of actual Αcash-in≅ in forms of cash or checks cleared shall be the basis of the monthly releases of shares/payment from the shares of the Owner. 8.3 9. SHARING CONTROL AND POSSESSION OVER PROPERTY, EXECUTION OF DOCUMENTS AND DEEDS Upon signing of this Agreement, the Owner shall sign a Special Power of Attorney authorizing the Developer to sell, subdivide, as well as execute documents to Developer to undertake the development of the Property and 9.1 7 the sale of the lot to applicant-buyers. If necessary, the Owner shall make available to the Developer the Transfer Certificates of Title covering the Property to enable the Developer to prepare plans and specifications for the Project and obtaining the necessary permits and licenses. For this purpose, both parties shall sign and attach a letter to the relevant applications stating that the titles are being delivered in trust and for the purpose of obtaining permits and licenses only. 9.2 Upon the execution of this Agreement and subject to compliance with requirements of existing laws, such as issuance of the necessary conversion clearance, the Developer is authorized to enter and take physical possession of the parcel of land subject of this Agreement with the right to prohibit or exclude any third person(s) that may interrupt or disturb the activities to be undertaken and perform any and all acts necessary and proper to be done pursuant to the foregoing stipulations and execute the necessary documents for the development of the Subdivision. Upon the execution of this Agreement, the Owner cannot sell, transfer, assign, mortgage or encumber the Property or its rights thereto unless this Agreement is terminated for cause. The Owner hereby agrees to perform any and all acts and to execute any and all documents or deeds which may be necessary to give effect to this Agreement except the mortgage of the property. The Owner shall have the right to visit the Property and inspect records of the Developer relating to the sale of lots during the latter=s business hours and upon prior notice to it. 9.3 9.4 9.5 10. 10.1 COMMENCEMENT OF THE PROJECT The Developer shall commence with pre-selling and/or development of the Subdivision immediately from the date when all of the following conditions are deemed present: (a.) The properties are cleared of all occupants and is in full possession of the Developer or its representatives including security officers. The necessary permits or clearances from the concerned government agencies are secured by Developer which shall be the latter=s responsibility. (b.) 10.2 If the Developer fails to commence with the development program 45 days from the date the conditions under paragraph 10.1 has been accomplished to the satisfaction of the Owner, this contract shall be deemed null and void 8 except when the Developer is prevented into doing so by any claims of third parties or legal impediments not of its own doing. 11. 11.1 INSURANCE/BONDS The Developer will obtain a performance bond and submit the same to the Housing and Land Use Regulatory Board. The cost thereof will be for its account. The Developer shall require the contractor of the Project to obtain adequate insurance to protect the contractor and the parties from any liability with respect to the Project, such as, but not limited to, the Contractor's All Risk Insurance, as well as other policies that may be required by government agencies. The Contractor's All Risk Insurance shall cover damage to the Project and materials used therefor during the construction period up to the completion of the Project for the full value of the Project, including damage to the Developer's equipment, machinery, tools, appliances or other personal property owned, rented or used by the Developer or anyone employed by it in connection with the Project, and third party liability for bodily injury and death as well as property damage, including damage to adjoining structures. In any event, the contract shall be required to undertake to hold the parties free and harmless from all claims of third persons even if it has obtained the required insurance policies. Within a reasonable time from the commencement of development work on the Project, the Developer shall furnish the Owner certified copies of insurance policies obtained by the contractor. 11.2 12. 12.1 FINAL PROVISIONS This Agreement shall inure to the benefit of and be binding upon, the parties hereto and their respective legal representatives and assigns and the rights of Developer can be validity transferred or assigned to a third party with the prior written consent of the Owner. The parties hereby warrant and covenant that will perform in good faith their respective obligations under this Agreement. The parties agree that this Agreement will conform to all laws, rules and regulations as may be applicable to the Project. 12.2 12.3 9 12.4 This Agreement embodies all agreements between the parties, and shall not be amended or modified except upon the prior written consent of both parties. All notices that may be required hereunder shall be made in writing and sent to the parties at their respective addresses herein stated or which may be given from time to time, or by facsimile (with confirmation copy). Either party shall have the right to seek termination of this Agreement in case of breach of any of the terms hereof provided the aggrieved party shall notify the other party in writing regarding such breach and the party in breach shall fail to remedy the same within fifteen days from its receipt of notice regarding the same. In case of any action arising from the interpretation or enforcement of any of the provisions hereof, the same shall be brought before the proper court of Makati City only. 12.5 12.6 12.7 IN WITNESS WHEREOF, the Parties have set their hands as follows: [*] Developer By: By: Owner [*] [*] President [*] CEO & Treasurer Signed in the Presence of: ______________________ ______________________ 10 ACKNOWLEDGEMENT REPUBLIC OF THE PHILIPPINES) ) S.S. BEFORE ME, this ____ day of ________, 2001, personally appeared the following with their Community Tax Certificates, to wit: NAME [*] [*] known to me and to me known to be the same persons who executed the foregoing document and acknowledged that the same is their own free and voluntary act and deed, and those of the entities represented. IN WITNESS WHEREOF, I have hereunto set my hand and notarial seal on the date and in the place hereinbefore stated. CERT. NO. DATE/PLACE ISSUED Doc. No. _____; Page No. _____; Book No. _____; Series of 2001. [*]