Sponsor agreement

This agreement binds you, each co-sponsor you add, and the company or entity you use to run the offering, each of whom is jointly and severally responsible for everything in it. If you act through an entity, you also sign personally as its guarantor of the entity’s obligations to DoorRaise and to investors under this agreement.

You (and your co-sponsors) are the issuer’s managers and are solely responsible for the offering: its terms, the accuracy and completeness of everything you publish or say to investors, compliance with the Securities Act of 1933, the Securities Exchange Act of 1934, state securities laws and anti-fraud rules, and how investor money is used. DoorRaise doesn’t review your deal for merit and doesn’t act as your broker, adviser, lawyer, underwriter or fiduciary. We are not a party to your offering documents.

Each sponsor is either an Operator (runs the property, signs for the loan and is responsible for operations) or a Capital partner (brings investors and shares in sponsor pay). A co-sponsor may instead be a Promoter, who markets the deal to their own followers and takes on a real ongoing duty. Every deal needs at least one Operator. A Capital partner or Promoter is a sponsor and a covered person for the bad actor check; they may not receive any compensation based on the amount raised unless DoorRaise has approved it in writing after legal review and the offering documents disclose it. Pay may be structured only as a share of sponsor profit and fees from the menu, disclosed to investors in full. DoorRaise does not pay any sponsor.

For the fees on our pricing page, we: host your deal page and link; prepare the offering documents from our standard templates using the terms you choose; verify investors’ accredited status; screen investors against sanctions lists; collect electronic signatures; coordinate with the escrow agent; track funding; and provide reporting, distribution and tax-document tools after closing. The full terms of these services are in the administration services agreement at doorraise.com/legal/services-agreement. Our standard templates are reviewed by our securities counsel, but they are templates: you are responsible for deciding they fit your deal and for having your own lawyer review them at your cost. We do not give legal, tax or investment advice to you or your investors.

Deals on DoorRaise use our standard documents and fee menu. You can choose fees only from the menu (acquisition fee, asset management fee on collected rent, preferred return and the split at sale or refinance). You can’t charge investors any other fee, promote, or compensation without disclosing it in the offering documents and getting our written approval. Related-party arrangements (such as affiliated property management, construction or lending) must be disclosed to investors in advance and be on terms no less favorable than an unrelated party would give.

You promise, as of the date you submit the deal and each day it is live, that: (a) you and every sponsor have the legal power to do what you say and nothing prevents it; (b) the entity is validly formed, in good standing and not insolvent; (c) you control the property or have a binding purchase contract, and the information about it is accurate; (d) your track record, experience and credentials are true and not overstated; (e) no sponsor, manager, owner of 20% or more, promoter or other covered person has a disqualifying event under Rule 506(d) or any event Rule 506(e) would require disclosing, except as you have told us in writing; (f) no sponsor is the subject of a pending or threatened investigation, lawsuit, regulatory action, bankruptcy, or judgment that would matter to a reasonable investor, except as disclosed in the offering documents; (g) you have all licenses, registrations and approvals needed to run the offering and the property; (h) nothing you give investors contains an untrue statement or leaves out a fact needed to make it not misleading; (i) you are not using investor money for anything not described in the offering documents; and (j) you have not made, and will not make, any side promise, guarantee or discount to any investor.

Everything you submit must be true, complete and not misleading, including your track record, the property, the business plan, projections and their assumptions. DoorRaise doesn’t verify your past deals; they’re shown as you report them, and you’re responsible for their accuracy. Label projections as estimates and base them on assumptions you believe are reasonable. Give us the purchase contract, title commitment, lender term sheet, rent roll, trailing 12-month financials and closing statement when asked, and tell us in writing within two business days if anything material changes (for example the price, financing, schedule, property condition, a sponsor, a lawsuit or a regulatory contact). We will pause your deal page until the change is disclosed to investors, and you must correct the disclosure promptly.

Before your deal goes live, you and every covered person (each sponsor, managing member, executive officer, 20% or greater owner of the issuer by voting power, and anyone paid to solicit investors) must complete our Rule 506(d) questionnaire truthfully. You must tell us immediately, and in any case within two business days, if any answer changes, and you must stop selling until we say you can continue. We refresh the certification at least every 90 days while a deal is live. Any event before September 23, 2013 that would have been disqualifying must be disclosed to investors under Rule 506(e). We may run background, identity, sanctions, litigation and public-record checks on any covered person, and you consent to them.

Follow our posting rules in everything you post or say about your deal. For a Rule 506(c) deal you may promote it publicly, but you must not accept money from anyone not verified as accredited. For a Rule 506(b) deal you must not advertise or generally solicit at all. You must not pay anyone to find investors unless they are a registered broker-dealer and the payment is disclosed. You may be asked to send us a video, post, email or webinar for review before you publish it. Our review, or our failure to review, is not approval and does not make DoorRaise responsible for your statements.

All investor funds go to the escrow agent named for your deal. You must not ask or allow any investor to send money to you or anyone else, and you must never take, hold, move or use investor money before closing. Funds are released only at closing, and only after the minimum raise is met and every investor has been verified, screened and has signed. After closing, deal money goes into accounts in the deal entity’s own name, kept separate from any other money; you must not mix it with your own or with any other entity’s. If the minimum isn’t met by the deadline, funds are returned to investors, and you must cooperate. A request for release of funds goes through the site and the escrow agent; you won’t try to get money released any other way.

The issuer must file Form D with the SEC within 15 days after the first sale and make the state notice filings required where investors live. DoorRaise prepares these for you as part of the closing fee and files them on your behalf when you authorize it; you remain responsible for their accuracy and timing. You are responsible for every other law that applies to you and the property, including fair housing, landlord-tenant, licensing, environmental, anti-money-laundering, tax, insurance, lending and privacy laws.

You must manage the property in line with the offering documents and a prudent owner’s standard of care; keep complete and accurate books and records and keep them at least seven years; keep the property insured with the coverage the lender and offering documents require and, unless the offering documents say otherwise, general liability, property, and (where available) manager errors-and-omissions insurance with reasonable limits, naming the entity; pay taxes, debt service and expenses on time; send investors the reports and distributions the operating agreement requires; provide what our partner CPA needs to prepare Schedule K-1s on time; tell investors promptly about any default, litigation, casualty, major capital need, sale or refinancing plan or change in sponsors; and keep investor information confidential and use it only for the offering.

DoorRaise gives you contact details only for investors who are verified in your deal. You may use them only to manage the offering and communicate with those investors. You may not sell, share or use them for other deals or marketing without the investor’s written consent. You are responsible for protecting that information and for complying with CAN-SPAM, TCPA and privacy laws in your messages.

We may at any time, without liability: review your deal, files and communications about it; ask you questions and require documents; pause, limit, remove or decline any deal, page or post; hold or delay documents, notices or closing steps; require a correction or a notice to investors; refuse to proceed with any investor; change our requirements to meet the law; and tell investors, escrow agents, lenders, title companies and regulators what we know, if we believe it’s needed to protect investors or follow the law. We have no duty to monitor your deal, and nothing we do or don’t do makes us responsible for your offering.

You pay the $500 setup fee when you submit a deal. At closing the deal’s entity pays DoorRaise’s closing fee, which includes state filing fees, from escrow, and the yearly fee each year after that until the entity is dissolved. If a deal doesn’t close, only the setup fee is owed. If a closing is unwound or rescinded, we refund the closing fee. The setup fee is non-refundable in every case, including if you withdraw the deal, we decline it after review, or it never launches or closes. If a fee isn’t paid when due, we may pause services, and you remain responsible for it and for our reasonable collection costs. If the deal’s yearly fee is still unpaid 90 days after it is due and 30 days after we have given written notice to the sponsors and to every investor, DoorRaise may give notice that the deal’s company will be dissolved, and it will be dissolved after a further 60 days unless the fee and our costs are paid by then. Any sponsor or investor may pay to stop this. If the company is dissolved, it is wound up in an orderly way: the property is sold on reasonable terms, DoorRaise’s unpaid fees and costs are paid from the proceeds, and what remains goes to the investors and sponsors under the operating agreement. The operating agreement for each deal says the same.

A co-sponsor must accept their invitation, role, duty and share of sponsor pay before the deal goes live. Every sponsor on a deal is jointly and severally responsible for that deal under this agreement, and the lead sponsor is our main contact and may give us instructions for all of them until we are told otherwise in writing. Changes to the sponsor team, roles or pay need our approval before they take effect.

You agree that investors in your deal may rely on the promises in this agreement about accurate information, covered-person certification, handling of investor money, filings, books and records, reports, and compliance with the offering documents. If you break them, an investor can enforce them against you directly, in addition to what the offering documents give them. DoorRaise is not liable to you or your investors for your breach.

Before closing you must give us a backup contact who can speak for the deal if you can’t be reached, and name at least one other person as an authorized signer on the deal’s bank account. If you die, become incapacitated or can’t be reached for 60 days after we send notice to you and your backup contact, we may tell investors, pause the deal page, give investors their records, and share these names with the investors so they can use the operating agreement to appoint a successor. The backup contact and the other signer may act only to pay the deal’s expenses and debt service and to protect the property until a successor is in place. You give us these details on your dashboard, and saving them there is your agreement to this section. We won’t close the deal without them.

If we stop offering the service, you or we end this agreement, or you are removed, you must keep meeting your duties to investors. We will give you and your investors reasonable notice and a way to export their records, signed documents and ownership schedules. You will not try to hold back records or investor access to them. A successor manager or administrator may be appointed by the investors as the operating agreement allows.

We may decline, pause or remove any deal, or stop providing services, if we believe information is inaccurate, a law or this agreement may be broken, or continuing would put investors or DoorRaise at risk. If we do so after investors have committed, we’ll tell them. You will not make claims against us for doing so.

You and each co-sponsor, jointly and severally, will defend, indemnify and hold harmless DoorRaise and its owners, directors, officers, employees, contractors and agents from every claim, loss, liability, penalty, damage, settlement and reasonable cost (including legal, expert and investigation costs) arising out of or related to: your offering and its documents; your statements, posts and promotion; any investor’s or regulator’s claim relating to your deal; your breach of this agreement; fraud, negligence or willful misconduct by any sponsor or affiliate; your violation of any law; the property and its operation; and any covered person’s disqualification. We may control the defense at your cost. This obligation does not depend on our having reviewed or approved anything.

TO THE FULLEST EXTENT THE LAW ALLOWS, DOORRAISE IS NOT LIABLE TO YOU OR YOUR CO-SPONSORS FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES, OR FOR LOST PROFITS, LOST RAISES OR LOST BUSINESS, AND OUR TOTAL LIABILITY UNDER THIS AGREEMENT IS LIMITED TO THE FEES YOU PAID US FOR THE DEAL AT ISSUE. Nothing here limits liability that can’t be limited by law.

The dispute resolution, governing law, time limit, force majeure, assignment and general terms in our terms of service apply to this agreement. If this agreement and the terms of service conflict about a sponsor’s duties, this agreement controls. A sponsor’s promises to investors in this agreement survive its termination.

We may update this agreement with notice. Changes don’t affect deals already closed except as the deal’s documents allow. Either side may end this agreement for future deals at any time; it continues to apply to any deal you have already posted until the entity is dissolved and every duty to investors is met.