Exhibit 10.6
 
JOINT VENTURE AGREEMENT
 
THIS AGREEMENT, made and entered into this 10 day of December 2013, by and
between INSPIRED BUILDERS, INC., a Nevada corporation (hereinafter referred to
as "ISRB"), and DEVELOPMENT PROPERTY HOLDINGS, INC., a California corporation
(hereinafter referred to as "DPH"); and hereinafter sometimes referred to
collectively as the "Venturers" or singularly as a "Venturer."
 
WITNESSETH:
 
   In consideration of the mutual covenants set forth herein, the parties hereto
agree as follows:
 
Section 1.   Formation of Venture. Venturers hereby enter into and establish a
Florida joint venture (the "Venture"), to be known as the SAVANNAH OAKS Joint
Venture (hereinafter referred to as "Savannah Oaks") for the purposes set forth
in this Agreement. The term of the Venture shall be from the date hereof through
and including a date sixty (60) months from the date of this Agreement, unless
mutually extended or sooner terminated as provided in this Agreement, or until
all or substantially all of the lands and other property of the Venture shall
have been sold or otherwise transferred and conveyed, whichever occurs first.
The parties hereto shall file a Fictitious Name Affidavit to reflect the name of
this Venture and the parties therein.
 
Section 2.   Purposes and Scope of Venture.
 
(a)  Venturers will acquire control in the name of SAVANNAH OAKS of certain
commercial real property consisting of 9.705 acres located in the State of
Florida (the "Property").
 
(b)  The purpose for which this Venture is established is to acquire, construct
improvements upon and develop the Property in accordance with the development
plan to be approved by the Venturers, and to sell at a profit the subject
properties as improved or unimproved as determined by the Venturers.
 
(c)  Nothing in this Agreement shall restrict in any manner whatsoever the
freedom of any Venturer and its officers, employees, partners or affiliates to
engage in or conduct any other business or activity whatsoever (including the
acquisition, development and exploitation of real property other than the
Property) without any accountability to the Venture or any party hereto, even if
such business or activity competes with the business of the Venture.
 
Section 3.   Scope of Venturers' Authority. Except as otherwise provided in this
Agreement or in a separate writing signed by all of the Venturers, no Venturer
shall have any authority to act for or to assume any obligation, or
responsibility on behalf of, any other Venturer or for the Venture. The
Venturers shall not be considered partners of each other. Any liability
resulting from the death or injury of any person or property occurring on the
Property after the date of this Agreement shall be a liability of the Venturers,
to be shared in proportion to their individual interest in the Venture as
reflected by individual "Term Sheets" referenced in Section 26 herein below.
ISRB and DPH shall equally share the determination of major decisions set forth
below.

 
 

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Section 4.   Development Fee. ISRB and DPH shall be paid the total sum of
$450,000.00 as a development fee from the construction budget, which shall be
split evenly after payment of ordinary expenses. The construction budget shall
be approved by ISRB and its representative, George Baker.
 
Section 5.   Powers of the Venture. This Venture shall have the authority and
power to conduct all business necessary to the successful accomplishment of its
purposes. Specifically, the Venture may:
 
(a)      Establish bank accounts with banks and other institutions and make
investments of the funds and monies of the Venture;
 
(b)     Acquire real and personal property and interests and rights therein
incidental to operation of the business of the Venture;
 
(c)      Borrow money and, as security therefor, mortgage or otherwise impose
liens on all or any part of the Property, or other real or personal property of
the Venture, prepay any mortgage or note secured thereby, in whole or in part,
refinance, increase, or modify any indebtedness of the Venture and any mortgages
or security affecting the Property;
 
(d)     Sell, assign, convey, dedicate, grant easements, with respect to, impose
restrictions upon and otherwise deal with all or any part of the Property or
other assets of the Venture;
 
(e)     Lend its funds or make guaranties of obligations of others upon such
terms as the Venturers shall determine;
 
(f)      Employ such persons, firms or companies as the Venturers shall
determine for the operation or management of the business of the Venture on such
terms and for such compensation as the Venturers shall determine;
 
(g)     Engage architects, engineers, building contractors, land planners, legal
counsel, accountants, consultants, financial advisors, underwriters and any
other professional personnel; and
 
(h)     Engage in such other activities, incur such other expenses and enter
into all such negotiations and contracts as may be necessary or appropriate for
enhancing the profitability of the Venture, and execute, acknowledge and deliver
any and all instrument necessary or convenient to the accomplishment of any of
the foregoing.
 
 
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Section 6.   Management of Venture.
 
(a)  Except as otherwise herein provided, the development of the Property and
the business and affairs of the Venture shall be managed by ISRB, which powers
and duties include, but shall not necessarily be limited to, the following:
 
(i)         The management of the day to day affairs and business of the
Venture, including the collection of income and payment of expenses, and make
all decisions regarding the operation and ownership of the business and property
of the Venture which are not herein defined as "Major Decisions";
 
(ii)        To maintain or cause to be maintained the books and records of the
Venture; prepare or cause to be prepared periodic operating and financial
reports of the Venture; prepare and file or cause to be prepared and filed all
necessary tax and information returns;
 
(iii)       To invest, for interest, cash owned by the Venture in financial
institutions or in other liquid investments in accordance with reasonably
prudent cash management practices; an
 
(iv)       ISRB shall be obligated to solicit competitive bids for goods or
services purchased by the Venture and to engage in contracts only with persons
who submit the lowest competitive bids. ISRB shall furnish to the other Venturer
an accounting quarterly of all receipts and expenditures of the Joint Venture no
later than the 20th day of the following month of each quarter. Professional
fees incurred by the Joint Venture shall be expenses of the Joint Venture,
including attorney's fees and accountant's fees
 
(v)        Notwithstanding anything to the contrary, DPH shall have full control
over the marketing, sales and leasing of the Property. A standard leasing and
sales commission shall be charged to the Venture, which commission shall be paid
in equal amounts to DPH and ISRB.
 
(b)  Major Management Decisions. The power to make Major Management Decisions
for the Venture is vested 50% to ISRB and 50% to DPH.
 
A Venturer which is in default under this Agreement shall have no right to
participate in Major Management Decisions or other Venture action. Provided,
however, that the limitation set forth in the immediately preceding sentence
shall not apply to a Venturer unless it has received written notice of default
and has failed to cure same as provided by this Agreement prior to the time that
the vote on a Major Management Decision or other action is taken.
 
Decisions with respect to the following shall constitute Major Management
Decisions within the meaning of this subsection:
 
(i)           Matters pertaining to the sale of the Property, the sales price of
the properties, and the improvements, if any, thereon, or the optioning, leasing
or purchase of lands in addition to the Property; and
 
(ii)          The adoption of the Initial Development Budget of the Venture and
the adoption and modification of budgets subsequent to the Initial Development
Budget. Prior to commencement of construction of improvements and the closing of
the construction loan or loans for improvements, the Joint Venturers shall agree
in writing on a final proposed budget for construction costs and for the
marketing of completed lots.
 
 
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It is contemplated that the Venture will borrow the funds necessary for the
development of the project(s) (sometimes referred to as the "Development Loan")
to be secured by a first mortgage lien on the Property previously acquired in
the name of Savannah Oaks.
 
Section 7.   Reimbursement of Expenses. No Venturer shall be entitled to
reimbursement from the Venture or for expenditures made on behalf of the
Venture, except for such expenditures as are approved for reimbursement by the
Venturers in accordance with a duly adopted budget.
 
Section 8.   Obligations and Liabilities of Venturers. As additional
consideration for this Agreement ISRB and DPH agree to use their best efforts
and expertise to develop and market (either directly or through its agent) the
Property during the term of the Venture. ISRB and DPH shall make or cause to be
made all of the improvements within a reasonable time. The Venture shall borrow
funds as needed pursuant to an acquisition and development loan agreement.
 
ISRB and DPH shall be obligated to use their best efforts to cause such a loan
to be made to the Venture in a total amount of not less than the total costs of
the improvements to be approved by the Venture.
 
Section 9.   Additional Contributions. It is recognized that additional
contributions to capital of the Venture ("Additional Contributions") may be
required by ISRB to discharge the following obligations as the same from time to
time arise:
 

 
(i) 
All ad valorem real property taxes on property owned by the Venture;

 
(ii) 
Insurance premiums incurred pursuant to this Agreement; and

 

 
(iii)
Sums required to fund expenditures or obligations included in a duly adopted
budget or otherwise approved as a Major Management Decision of the Venturers.

 
Except as herein above provided, no further capital contributions shall be
required. Any Additional Contributions made by ISRB shall be repaid as set forth
in Section 11(c).
 
Section 10.   Capital Accounts. A capital account shall be established for each
Venturer on the books of the Venture. Each Venturer shall receive a credit to
its capital account for any Additional Contributions made under this Section 10
and a credit for its share of profits of the Venture in the manner set forth in
Section 13 below. There shall be charged against each Venturer's capital account
its share of any losses of the Venture in the manner set forth in Section 14
below.
 
 
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Section 11.        Distribution of Proceeds and Profits. Net cash proceeds from
each sale of the Property shall be distributed in the following manner: (net
cash proceeds is defined as the sale price less usual and customary Seller's
closing costs and pro-rations, including sales commissions not to exceed five
percent (5%) of the sales price, which may be shared with other brokers or
agents.)
 
(a)  First, to pay closing costs, lien releases or mortgage releases and any
accrued and unpaid interest on the Development or Construction Loan, if any, and
then
 
(b)  To the Joint Venture to the extent of ten percent (10%) of proceeds after
payment under subparagraph (a) for creation of a reserve account (but which
account shall not exceed in the aggregate One Hundred Thousand and no/100
Dollars ($100,000.00), which account shall be used to pay for any unanticipated
development expenses and/or income taxes, and then
 
(c)  Any unpaid principal balance or any other obligation encumbering the
Property, including paying the debt of $250,000.00, plus interest, on property
commonly referred to as the "corner lot," and any Additional Contributions made
by ISRB, and then
 
(d)  Senior equity in the amount of $1,800,000.00, and then
 
(e)  Former equity in the amount of $1,500,000.00, and then
 
(f)  (1) To senior equity holder ten percent (10%),
          (2) To PRLLC thirty percent (30%),
          (3) To ISRB sixty percent (60%).
 
Section 12.         Limitation upon Sale and Encumbrance. The Venturers hereby
agree that their rights in and powers to sell, lease, exchange, encumber or
otherwise dispose of any interests held by them in the Venture, the Property or
any other assets of the Venture (which interest in the Property, the Venture,
and other assets of the Venture shall be collectively referred to as the
"Venture Assets") shall be limited and controlled as follows;
 
(a)  No Venturer shall sell, transfer, exchange or otherwise dispose of its
interest in any of the Venture Assets without first having offered same to the
Venture and the other Venturer under the provisions of Section 13 herein below.
Any such attempted sale, transfer, exchange or other disposition in
contravention of the provisions of this Section shall be void and of no effect.
 
(b)  If so requested by unanimous vote of the Venturers, a memorandum shall be
recorded in the public records of                           County, Florida,
giving notice of the provisions of this Section and other appropriate provisions
of this Agreement.
 
(c)  Notwithstanding anything to the contrary, Venturers shall have the right to
pledge or encumber their future development fees upon the consent of the other
Venturer, which consent shall not be unreasonably withheld.
 
 
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Section 13.         Right of First Refusal. No Venturer may sell or transfer any
part or all of its interest in the Venture Assets to any person other than to
the other Venturer without the prior written consent of the other Venturer,
except as otherwise permitted under this Agreement.
 
(a)  If a Venturer (the "Seller") receives a bona fide offer (the "Third-Party
Offer") from a Third Party other than the other Venturers to acquire all or any
part of the interest of the Seller in the Venture Assets, which the Seller
desires to accept, the Seller shall, prior to accepting same, give written
notice (the "Section 13 Notice") of the Third-Party Offer to the other Venturers
setting forth the name and address of the party making the Third-Party Offer and
the price and terms of the Third-Party Offer. The Section 13 Notice shall be
accompanied by a complete and accurate copy of any document or contract which
embodies the terms of the Third-Party Offer. The Venturers shall have the right
to acquire all of the interest of the Seller covered by the Third-Party Offer on
the same terms and for the same price set forth in the Third-Party Offer, except
that the time for closing shall be within ninety (90) days after the offer is
accepted. If the Venturers elect to acquire the Seller's interest in the
Venture, it shall give written notice within thirty (30) days after receiving
the Section 13 Notice of its election to do so.
 
(b)  If the interest of the Seller is not purchased in accordance with paragraph
(a) of this Section 13, then the Seller shall then be free to accept the
Third-Party Offer and close the sale to the Third Party at a price not lower
than the price and on terms no more favorable to the buyer than the terms
offered to the other Venturers. In the event Seller does not close the transfer
of its interest pursuant to the Third-Party Offer within ninety (90) days after
the end of such thirty (30) day notice period, then Seller shall be deemed again
bound by the provisions of this Section 13 with respect to any other or
subsequent Third-Party Offer.
 
(c)  The sale or transfer pursuant to this Section 13 shall not relieve the
Seller or transferor from its liability under any agreements made herein or
otherwise made in connection with the Venture Assets, including, but not limited
to, liability for Additional Capital Contributions duly approved but not yet
due, liabilities contemplated by approved budgets and any other liabilities,
actual or contingent, existing at the time of the sale or transfer. The
purchaser or transferee of any interest in the Venture Assets shall be bound by
the terms and provisions of this Agreement and shall be deemed to have assumed
all of the liabilities of the Seller or transferor in proportion to the Seller's
or Transferor's interest in the Venture assets so acquired by the purchaser or
transferee. As a condition precedent to the effective consummation of such sale,
simultaneously upon purchasing said Venture Interest the purchaser or transferee
shall execute a written assumption of such liability in a form acceptable to the
other Venturers.
 
(d)  All parties shall be entitled to have specific performance of the
obligation to purchase or sell arising pursuant to the procedures described in
this Section 13, and shall, in addition, have any and all other remedies in law
or in equity available to it in order to enforce provisions of this Section 13.
 
 
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Section 14.           Income Taxation and Accounting. The following provisions
shall govern the Venture's income tax and accounting practices:
 
(a)          All federal and state income tax returns shall be prepared on an
accrual basis. All expenses and costs which are deductible for federal tax
purposes shall be deducted and treated as expenses, including, without
limitation, taxes and carrying charges.
 
(b)          Depreciation on eligible property shall be taken by the Venture on
the Accelerated Cost Recovery System, unless otherwise approved by the
Venturers.
 
(c)          The Venture's books and accounts shall be kept and maintained at
all times by ISRB. The books shall be maintained on an accrual basis in
accordance with the generally accepted accounting principals.
 
(d)          Each Venturer shall have the right at all reasonable times and upon
reasonable notice to audit or examine and make copies of the books and accounts
of the Venture.
 
Section 15.          Insurance. The Venture shall purchase at the expense of the
Venture general liability coverage for the protection of the Venture and all of
the Venturers in relation to the business of the Venture and such fire and
extended coverage and other insurance coverages as good business practices
dictate.
 
Section 16.           Bankruptcy, Failure to Abide by Agreements, Etc. In the
event that any Venturer shall make an assignment for the benefit of creditors,
file a petition in bankruptcy, become adjudicated bankrupt or insolvent, have a
permanent receiver appointed in any judicial proceeding for any portion of its
property, or shall fail to perform and abide by any of the terms of this
Agreement imposed upon it (after thirty (30) days' advance written notice of
such failure to perform or abide is given to such Venturer in default by the
other Venture), then the Venturer (the "Non-Withdrawing Venturer") shall have
the right, but not the obligation, by written notice to said Venturer, to
require said Venturer to withdraw from the Venture. In that event, the
Non-Withdrawing Venturer shall either forthwith purchase the interest of said
Venturer (the "Offering Venturer") at the purchase price and on the terms set
forth in Section 15, or shall terminate and liquidate the Venture.
 
Section 17.           Events of Termination. The Venture shall terminate upon
the first to occur of the following events, unless otherwise agreed by the
Venturers in writing:
 
(a)          Upon the sale of all of the subject Property and of all other
property of the Venture; or
 
(b)          Upon the expiration of the term of the Venture.
 
 
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Section 18.           Notices. All notices required or remitted by this
Agreement shall be in writing and shall be sent by Certified, Registered Mail,
or hand delivered to the addresses set forth below. Notices shall be deemed
delivered and given when mailed if mailed or when delivered if hand delivered.
 
Notices to ISRB shall be sent to:
 
Matthew J. Nordgren
9595 Wilshire Boulevard, Suite 801
Beverly Hills, CA 90212
mnordgm@inspiredbuilders.com
 
With copy to:
 
Daniel D. White, Esq.
Law Office of Daniel D. White
One Corporate Plaza Drive, Suite 110
Newport Beach, CA 92660-7924
dan@ddwlaw.com
 
Notices to DPH shall be sent to:
 
Paul Rohan
Development Property Holdings, Inc.
95 North Roscoe Boulevard
Ponte Vedra, FL 32082
prohan@planet511c.com
 
Section 19.          Benefits and. Obligations. All agreements among the
Venturers relative to the Venture shall inure to the benefit of and be binding
upon the parties thereto and their respective legal representatives, heirs,
successors and assigns.
 
Section 20.          Applicable Law. This Agreement shall be construed and
enforced in accordance with the laws of the State of Florida.
 
Section 21.          Non-Waiver. The failure on the part of any party to object
to any breach or to enforce any covenant or remedy herein contained shall not be
construed as a waiver of any subsequent breach or of any such covenant or
remedy.
 
Section 22.         Severability. If any provision of this Agreement shall to
any extent be finally found by a court of competent jurisdiction to be invalid
or unenforceable, neither the remainder of the Agreement, nor the application of
the provision to other persons, entities, or circumstances, shall be affected
thereby, but instead shall be enforced to the maximum extent permitted by law or
equity.
 
Section 23.          Attorney's Fees. In the event that suit be brought to
enforce the provisions of this Agreement or any remedy or lien granted
hereunder, the prevailing party shall be entitled to reasonable attorneys' fees,
including attorneys' fees upon appeal.
 
Section 24.          Assignment. Venturers shall be entitled to assign their
respective interest upon notice to the other Venturer.
 
 
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Section 25.          Entire Agreement. Subject to Section 26 herein below, the
terms and conditions of this Agreement constitute the sole and entire agreement
between the Venturers with respect to the subject matter hereof. This Agreement
may be modified or altered only by the written agreement of all of the
Venturers.
 
Section 26.          Term Sheets: The Venturers shall prepare an individual Term
Sheet on each property defining and delineating the duties and obligations of
each Venturer as well as the individual(s) proportionate share for the profit
made of each particular property.
 
Section 27.          Real Estate Holdings: All properties shall be acquired in
the name of Savannah Oaks, subject to the terms and conditions of this
Agreement.
 
IN WITNESS WHEREOF, the parties hereto have set their hands and seals on the day
first above written.
 
Signed, sealed and delivered in
in the presence of:
 

   
INSPIRED BUILDERS, INC.,
a Nevada corporation
 
 
Matt Nordgren
  By:
/s/ Matthew J. Nordgren
 
 
   
MATTHEW J. NORDGREN
 
12-15-13
  Its:
Chief Executive Officer
                         
DEVELOPMENT PROPERTY HOLDINGS, INC.,
a California corporation
            /s/ Rebecca Mendez   By: /s/ Paul B. Rohan          PAUL B. ROHAN  
Rebecca Mendez    Its: Chief Executive Officer  

 
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