SAMPLE JOINT VENTURE AGREEMENT

To:

 Re:      Letter of Intent

______________ offer this Letter of Intent (“LOI”) to form a Joint Venture (“JV”) with _________________ to develop the approximate ________acres located at the  _______________________________________________________________. The following outlines the terms and conditions of the JV. Notwithstanding this binding LOI all agreements herein will be finalized in an Operating Agreement to be executed by both  ________________________.

1. Property. Approximately

1. Entity.  Property and development will be owned and held in a single purpose entity limited liability company formed under mutually acceptable law (the “Entity”). ___________________________ will be members of the Entity.

1. _________________ will participate in the marketing, development, operation and subsequent sale of the Property (exclusively the “Project”). The Project will consist of an _______________________ described above and will contain a single or group of buildings of certain size and use as will be more fully defined and detailed in a to-be-formed development plan.

1. Contributions  ________________________ will provide equity capital and will be solely responsible for procuring and guaranteeing the project debt.  Debt, and equity provided by a third party that will expect a preferred payment or project level return, to be approved by all parties.  Funding requirements will consist of the following:

• Land Acquisition

• Entitlements and Permitting

• Project Equity

• Finance-construction and permanent including soft cost.

• Design-site, shell and buyer/tenant improvements.

• Construction-site, shell and buyer/tenant improvements.

• Warranties

• Close-out and title coordination.

• GMP (Guaranteed Maximum Price) and Completion Guarantee.

1. ______________Contribution will consist of the following:

• Sales, Marketing and/or Leasing

• Legal-entity formation

• Letters of Intent

• Contracts

• Hiring Property Management Company

• Association formation

• Association Budgets

• CC& R’s

• Close-out and title coordination

• Assist in the coordination of the customers purchase process (escrow and closing coordination.

• Design, Budget and Financing Approval

1.  The costs for performing said functions of the Project are estimated in the attached Project Pro-forma Budget. These estimated numbers contained in the Project Pro-forma are for budgeted purposes only and will be adjusted as needed while project progresses and more detailed information becomes available.

1. _____________________ shall determine the economic viability of the project and in his sole discretion may elect to either move forward with the project or cancel the purchase and sales agreement with the seller.  Should ___________ determine that the project is economically viable, then a Joint Venture Operating Agreement will be executed by both _____________ and ___________ substantially under the same terms and conditions as this binding letter of intent.  Should ______________ choose not to close on the land and develop the property, the ____________ shall have the right to continue with the project without compensation to __________________.

1. It is understood that _________________ contribution to the Joint Venture has been the location (identification) of the property (Project), preparation of the letter of intent to purchase the property, the negotiations thereof, contract negotiations, and the many hours required in the conceptual planning of the project, meetings with attorneys for the preparation of the customers letters of intent, purchase and sales agreements and various condo documents; and marketing efforts which include the preparation of marketing materials (letters, postcards and flyers), printing, postage, telephone marketing, meetings with various potential customers and the many other hours of marketing efforts.  The above described efforts and costs will be conducted initially at the sole cost of ______________ and if ___________________elects to go forward with the project, then said costs shall be reimbursable thru the project costs upon loan funding.  Specifically, compensation to ______________ for his marketing efforts and market knowledge shall be at the rate of $____________ per month as of the beginning ________________________________ for 12 months from the effective date or until the project is completed and sold.  If ______________________ elects not to continue forward with the project prior to closing on the land said marketing costs will be borne solely by the ______________ and neither party will have any claims for costs against the other party and this agreement shall expire.

1.  Sales & Leasing Commissions  It is anticipated that various outside persons (brokers) will be compensated for sales of condo units.  The rate of compensation for these sales is based on 3% of the price of the shell space.  The _____________ will be responsible for managing the sales process and thus will be entitled to compensation equal to 1.5% of such outside sales.  However it is further anticipated that ________________ will sell or lease the majority of the units in the project and thus will be entitled to the 3% commission on their sales.  If the __________________ make the sale (without an outside broker), they will not be entitled to the additional 1.5%.

1.  Distributions from Operations and/or Sales.  Subject to adjustments in the Operating Agreement Net Proceeds from Operations and/or Sale of Property/Project will be distributed as follows:

• Equity contributions in accordance with their respective percentage contributions as well as any additional capital contributions by either party.
• Preferred return on respective equity contribution and additional capital contributions at a rate equal to ______% per annum, compounded annually, as applicable.
• The _______________ and _________________ will split all remaining proceeds __________%/______% to  _______________ and _____________ respectively.

1. Additional Capital Contributions.   In order to comply with the Pro-forma budget for the project, should _______________ be required to contribute additional funds to the project, ________________ will be entitled to compensation on such contributions in the amount of _______% per annum, compounded annually, as applicable.

1.  Assignment.    Notwithstanding the foregoing, The _____________ and ________ shall have the right to assign this Agreement to a single purpose entity for the development of the project.

If the terms and conditions contained in the Letter of Intent are acceptable to you, please so indicate by executing both originals of this Letter of Intent, retaining one original for yourself and returning one original to the undersigned at the address indicated below by March _______, 2008

Very truly yours                                              ____________________________________

________________________________         ___________________________________

                                                                        Agreed and accepted this __ day of ______ 200_

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