RENTAL PROPERTY JOINT VENTURE AGREEMENT
By clicking “I AGREE,” you accept the following terms and conditions of the joint venture:
- DEFINITION OF TERMS
SOCIAL INVESTOR are individuals or organizations that provide funds through a joint venture arrangement with SEDPI GSE in support of projects or organizations that generate a measurable, beneficial social or environmental impact alongside a financial return; through a profit and loss sharing scheme.
SOCIALLY RESPONSIBLE INVESTMENTS (SRI) are Investments made to companies, organizations and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return. SRI is also called social investments and impact investing.
SRI Organization is an organization that entered into a joint venture with SEDPI GSE that generate a measurable, beneficial social or environmental impact alongside a financial return. These may be in the social enterprises and microfinance institutions taking legal forms such as corporations, foundations, cooperatives, rural banks, people’s organizations and microfinance NGOs.
SEDPI GROUP OF SOCIAL ENTERPRISES (SEDPI GSE) composed of mutually reinforcing social enterprises with the goal to lift Filipinos out of poverty. The organizations under the group are: SEDPI, SDFI, SSEVI, SFI, ARDCI Bank and SEDPI Pte.
SOCIAL ENTERPRISE DEVELOPMENT PARTNERSHIPS, INC. (SEDPI) is the training, research and consulting organization of SEDPI GSE.
SEDPI DEVELOPMENT FINANCE, INC. (SDFI) is the financing organization of SEDPI GSE.
SEDPI SOCIAL ENTERPRISE VENTURES, INC. (SSEVI) is the social enterprise incubator and real estate organization of SEDPI GSE.
SEDPI FOUNDATION, INC. (SFI) is the non-profit organization of SEDPI GSE.
ARDCI Bank, Inc. (ARDCI Bank) is the banking unit of SEDPI GSE of which SDFI has minority stake.
SEDPI Pte. Ltd. (SEDPI Pte.) the training and publications organization of SEDPI GSE registered and operating in Singapore.
JOINT VENTURE is an association of persons or companies entering business arrangement undertaking commercial enterprise or specific project; contributing money, property or industry to a common fund and share risks; with community of interest in the business with the intention of sharing in the profit and losses.
RENTAL PROPERTY is a real estate asset where the landlord receives payment or rent from occupants or tenants, in return for occupying or using the property. Rental properties could be classified as residential or commercial.
This Joint Venture Agreement, hereinafter referred to as the “Agreement”, is between the social investor, referred to as First Party and SEDPI GSE, referred to as Second Party.
Each hereinafter referred to as a “Party” or a “Shareholder” and collectively referred to as the “Parties” or the “Shareholders”.
The parties intend to jointly undertake development, construction and/or operations of rental properties and socialized housing targeting low income groups in the Philippines.
The parties have agreed to enter into this Joint Venture Agreement for the purpose of defining and regulating their rights and duties, as among themselves, including their respective partners, if any.
- NATURE OF JOINT VENTURE
The social investor understands that the rental property joint venture has the following details:
- It is a private contractual joint venture and therefore there is no need to register with the Securities and Exchange Commission unlike corporate joint ventures
- The nature of business entered into this joint venture is conferred in the articles of incorporation one or more of the organizations under SEDPI GSE
- Tax arising from income received from the proceeds of the joint venture shall be paid in their individual capacity and not by the Parties collectively.
- Term of the joint venture corresponds to the time when all payouts are settled to all parties.
- No limit in the number of co-venturers except for foreign equity restrictions
- As co-parties, neither of the party provides guarantee to any contribution made to the joint venture, and are aware of basic risks associated with investments.
- OBLIGATIONS OF PARTIES
The parties have entered into this joint venture agreement with ultimate objective of introducing social enterprises and microfinance institutions to networks, organizations and individuals for potential projects and collaborations to benefit marginalized sectors, low income groups and protection of the environment.
For this purpose, the parties have identified their appropriate contributions to this agreement as follows:
|SEDPI||Training, research and consulting services to microfinance institutions; social enterprises and low income groups|
|SDFI||Financing and equity investments to microfinance institutions and social enterprises; and manage contributions of social investors to the joint venture that will invest in microfinance institutions, social enterprises and socialized housing|
|SSEVI||Development and management of real estate|
|SFI||Sustainability and social performance measurement of joint venture projects|
|SEDPI Pte||Publications and media production|
|Provide contribution and expertise in the development, constructin and marketing of rental properties, socialized housing projects and other real estate projects.|
- Capital Contribution AND PROJECT ASSETS
- SEDPI GSE owns rental properties and the first party would like to participate in these rental properties through a joint venure. In order to support the growth of the rental properties portfolio, parties have likewise identified that provision of capital contribution are necessary and beneficial. To this end, parties may choose to participate in extending joint venture contribution to develop, construct and operate real estate properties in the Philippines.
- SDFI shall be entitled to a property management fee agreed upon by the parties. The property management fee shall cover costs such as marketing; tenant screening and selection; rent collection; property maintenance; legal and financial keep; inspections and evictions among others
- Any returns on the contributions/financing provided by the party shall be subject to collection of payments or rent from occupants or tenants for the period. As a general understanding, the parties are aware that returns are based on the actual collections of payments or rents collected for the period, as such, distribution of dividends, returns, or interest shall be subject to the collection efficiency from tenants or occupants net of property management fee and taxes.
- The parties agree that repairs to the rental properties shall be equally absorbed based on their joint venture contribution.
- Subscription to joint venture contribution is on a first come, first served basis. Should there be oversubscription, the amount will be placed in the First Party’s wallet and the same will be advised through email.
- One joint venture capital contribution is equivalent to PhP100,000. First party cannot have more than PhP500,000 joint venture capital contribution to a single real estate property to ensure that parties’ portfolio are diversified and avoid concentration of portfolio to a few.
- Each joint venture contribution has a term equivalent to the useful life of the rental property selected at which point the parties the rightful property owner among the SEDPI GSE companies decide whether to reinforce, sell or build a new rental property.
- Payouts are scheduled quarterly and recorded in the First Party’s wallet account with SEDPI GSE. The payout is calculated net of property management fee and taxes; and shall be divided equitably to the parties using their joint venture contribution to the specific rental property as a proportion to the base value of the same rental property as indicated Section 7 of this agreement.
- Wallet balance do not earn anything. To earn, wallet balance must be placed as contribution to rental propertues or SRI organizations available provided that there is space for participation.
- If joint venture contribution and/or payouts are redeemed before two years, an exit fee of 3% is charged to the account of the First Party. Exit fee of 3% will be applied even to amounts resulting to redemption arising from oversubscription.
- First party may redeem their joint venture contribution anytime however SEDPI GSE has the right of first refusal to the redemption. First party may transfer rights to another party but with the sole approval of SEDPI GSE.
- When the First Party reaches a cumulative joint venture contribution of at least PhP100,000, First Party is required to finish the Wealth Building 101 training of SEDPI.
- SEDPI GSE will maintain at least 51% exposure to each rental property project it enters into joint venture with to ensure that it has enough stake in the joint venture agreement. This ensures that member of SEDPI GSE retains full control and full ownership of the property.
- RENTAL PROPERTIES
The following are the rental properties available for joint venture:
|Rental Property||Address||Base value|
|Marzan 1||450-A J. Marzan Street, Sampaloc, Manila||PhP16,500,000.00|
|Maddela 1||National Highway, Poblacion Sur, Maddela, Quirino||To be determined|
|Marzan 2||450-B J. Marzan Street, Sampaloc, Manila||To be determined|
- TRANSFER RESTRICTIONS; RIGHT OF FIRST OFFER
Limitation on Transfers. Except as expressly permitted under this Section, no party shall, whether directly or indirectly, (i) sell, give, assign, hypothecate, pledge, encumber, grant a security interest in or otherwise dispose of, or suffer to exist (whether by operation of law or otherwise) any encumbrance on (each, a “Transfer”) any of the right, title or interest therein or thereto without first offering it to SEDPI GSE.
- NON-DISCLOSURE AND NON-COMPETITION
During the effectivity of this Agreement, the Parties shall not disclose or communicate to any third party any information used in the operation and management of any project undertaken by the venture, except (i) to such third persons as may be specially approved by the Parties in writing as authorized to receive the same and as part of the marketing of the service of his/its business; and (ii) except as may be required by law, regulation or court order. The Parties further agree to keep this Agreement confidential, and shall not disclose or communicate to any third person any information relating thereto, except with the written consent of all the Parties in writing and except as may be required by law, regulation or court order.
- APPLICABLE LAW AND VENUE OF ACTIONS
- APPLICABLE LAW. This Agreement, including the rights, interests, and obligations of the parties hereto, shall be governed by the laws of the Republic of the Philippines.
- VENUE OF ACTIONS. Any action or proceeding by either of the parties herein against the other shall be filed in the proper courts, to the exclusion of other courts.