AGREEMENT

EXHIBIT 10.19

 

AGREEMENT

 

THIS AGREEMENT is made and entered into as of the      day of September, 2005, by and between MCZ/CENTRUM FLORIDA VI OWNER, L.L.C., an Illinois limited liability company (the “ Seller ”), and MHI Hollywood LLC, a Delaware limited liability company (the “ Purchaser ”).

 

WITNESSETH :

 

For and in consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, the adequacy and receipt of which are hereby acknowledged by the parties hereto, the parties agree, covenant and contract as follows:

 

ARTICLE I

PROPERTY

 

1.1 The property to be sold, conveyed, assigned or otherwise transferred by Seller to Purchaser at closing (hereinafter collectively called the “ Property ”) consists of the following:

 

1.1.1 The hotel condominium unit (“ Hotel Unit ”) comprising a portion of the hotel condominium project (the “Hotel Condominium” ) to be developed by Seller on a portion of the property described on Exhibit “A” attached hereto and made a part hereof (the “Land ”) as shown on the site plan attached hereto as and made a part hereof as Exhibit “B” (the “Site Plan” ) consisting of all portions of the Hotel Condominium, with the exception of the residential units (the “ Units ”) and the air space above and below the Hotel Condominium, as more particularly shown on the plans identified on Exhibit “C” attached hereto and made a part hereof (the “Plans” ). Any portion of the Hotel Unit that provides support to the Units such as lobbies, hallways, elevators, stairways, etc. (the “ Support Facilities ”), shall be subject to an easement (the “ Easement Agreement ”) in favor of the owners of the Units (the “ Unit Owners ”), in which Easement Agreement will require the Unit Owners to pay their pro rata share of costs for the use of the Support Facilities.

 

1.1.2 All of Seller’s right, title and interest in all personal property, including without limitation all appliances, furnishings, fixtures and equipment to be located in the Hotel Unit for use in connection with the operation of the Hotel Unit, all of which are to be consistent with the standards of the License Agreement, as hereunder defined, including without limitation the items listed on Exhibit “D” attached hereto and made a part hereof (hereafter collectively referred to as the “ Personal Property ”).

 

ARTICLE II

DEPOSIT

 

2.1 Simultaneously with the execution of this Agreement, Purchaser shall deliver to Holland & Knight, LLP, as escrow agent (the “ Escrow Agent ”), the sum of Fifty Thousand and No/100 Dollars ($50,000.00) (the “ Deposit ”). Upon receipt of Purchaser’s tax identification number, the Escrow Agent shall invest the Deposit in an interest-bearing account, certificate of deposit or repurchase agreement. All interest accrued or earned thereon shall be paid or credited to Purchaser except in the event of default of Purchaser, in which event the interest shall be disbursed to Seller, together with the Deposit, as liquidated damages.

ARTICLE III

PURCHASE PRICE

 

3.1 The purchase price (“ Purchase Price ”) for the Property is Five Hundred Thousand Dollars ($500,000.00), subject to adjustment and prorations as hereinafter provided. The Purchase Price shall be paid to Seller as follows:

 

 

ARTICLE IV

TITLE

 

4.1 Not less than sixty (60) days prior to closing Seller shall provide Purchaser with a title insurance commitment (the “ Commitment ”) issued by Chicago Title Insurance Company, First American Title Insurance Company, or Lawyers Title Insurance Corporation (the “ Title Company ”) binding the Title Company to insure good, marketable and insurable fee simple title to the Units in Purchaser by its ALTA Form B Owner’s Title Insurance Policy Form with insurance in the amount of the Purchase Price (the “ Owner’s Policy ”) upon the recording of the special warranty deed to be given by Seller. The Commitment shall show Seller to be vested with good and marketable and insurable fee simple title to the Land and Hotel Condominium, free and clear of all liens and encumbrances, except the following:

 

(i). Ad valorem real estate taxes, assessments and personal property taxes for the year of closing and subsequent years.

 

(ii). All applicable zoning ordinances and regulations.

 

(iii). Matters set forth on Exhibit “E” attached hereto and made a part hereof. (Items i, ii and iii are hereafter collectively referred to as the “ Permitted Exceptions ”)

 

4.2 Purchaser shall have twenty (20) days from the receipt of the Commitment ( the “Title Review Period” ) to specifically object in writing to any particular condition of title or exception revealed by the Commitment, other than the Permitted Exceptions. If Purchaser fails to specifically object in writing to any particular condition of title or exception set forth in the Commitment prior to the end of the Title Review Period, then same shall be deemed waived and such condition of title or exception shall be deemed to constitute a Permitted Exception. Seller shall utilize commercially reasonable efforts to eliminate or cure any title defects raised by

 

2

Purchaser on or before the Closing Date; provided, however that Seller shall have no obligation to undertake any litigation, and, except as expressly set forth in this Section 4.2 shall have no obligation to expend any moneys for such cure. Seller shall remove by payment or bonding, or otherwise any judgment, mechanic’s lien or lis pendens against the Property in a liquidated amount arising by, through or under Seller, capable of removal by the payment of money or bonding. In the event that Seller fails to eliminate such unacceptable exceptions or to cure such title deficiencies prior to the Closing Date, then in such event Purchaser shall elect by written notice to Seller on or before the Closing Date to either (i) cancel this Agreement, in which event Escrow Agent shall return the Deposit, together with all interest accrued thereon, to Purchaser and Purchaser and Seller shall be released from any further obligations under this Agreement except those obligations which survive the termination of this Agreement, or (ii) waive the objection to the condition of title and close hereunder without reduction of the Purchase Price.

 

ARTICLE V

CROWNE PLAZA FRANCHISE

 

5.1 Purchaser, at its sole cost and expense, shall promptly apply for and use commercially reasonable efforts to obtain a license agreement with Intercontinental Hotels Group, or an affiliate thereof (the “ Franchisor ”), to operate the Hotel Condominium as a “Crowne Plaza” pursuant to a Crowne Plaza license agreement (the “ License Agreement ”). In addition, Purchaser shall utilize commercially reasonable efforts to cause Franchisor to agree to issue to Seller a “comfort letter” utilizing Franchisor’s standard form attached hereto as Exhibit “F” modified to reflect that Seller is not a lender and that Seller shall have the same cure rights and other rights afforded a lender in the comfort letter if Seller repurchases the Hotel Unit as provided in Section 5.4 (the “ Comfort Letter ”).

 

5.2 In the event that Purchaser does not obtain (i) the License Agreement consistent with the form of license agreement attached as Exhibit “G” and (ii) a Comfort Letter in form and content acceptable to Purchaser and Seller complying with the requirements of Section 5.1, within ninety (90) days of the Effective Date, then at any time thereafter and prior to the date that Purchaser obtains the License Agreement and Comfort Letter, either Purchaser or Seller may terminate this Agreement, in which event the Deposit shall be returned to the Purchaser and the parties shall be released from all further obligations under this Agreement except for the obligations that survive termination. Purchaser shall keep Seller informed regarding the status of the negotiations with Franchisor.

 

5.3 In the event that Purchaser is successful in obtaining the License Agreement and Comfort Letter as contemplated by Section 5.1, Seller covenants and agrees (i) to cause the Hotel Condominium to be renovated and furnished in accordance with the Franchisor’s design standards (the “ Design Criteria ”), which are attached hereto as Exhibit “H” , other than the items to be provided by Purchaser as contemplated by the Pre-Opening Budget, as hereinafter defined and (ii) to construct the aspects of Phase I (as hereinafter defined) other than the Hotel Condominium consistent with the Design Criteria and Exhibit C.

 

5.4 In the event that Purchaser violates the terms and provisions of the License Agreement and such default is cured by Seller pursuant to the Comfort Letter, Seller shall have the right to repurchase the Hotel Unit at the original Purchase Price (the “ Repurchase Option ”).

 

3

In the event that Seller elects to exercise the Repurchase Option, Seller shall provide written notice to Purchaser of Seller’s election to exercise the Repurchase Option within thirty (30) days of Seller electing to cure any default by Purchaser pursuant to the terms of the Comfort Letter. In such event closing on the repurchase of the Hotel Unit pursuant to the Repurchase Option shall occur within thirty (30) days of the exercise of the Repurchase Option by Seller. Purchaser will reconvey the Hotel Unit and the Personal Property free and clear of all liens and encumbrances subject only to the Permitted Exceptions and such other exceptions to title arising by through or under Seller. The Purchase Price shall be paid in cash at Closing subject to customary adjustments and prorations and payment of customary closing costs. Purchaser shall not be deemed to have violated the terms of the License Agreement if the Hotel Condominium fails to meet the Design Criteria because of Seller’s failure to provide the Temporary Function Space pursuant to Section 12.3 hereof.

 

ARTICLE VI

PRE-SALE REQUIREMENT

 

6.1 If by March 1, 2006, Seller has not entered into binding purchase and sale agreements with purchasers for at least fifty percent (50%) of the Units (the “ Pre-Sale Requirement ”), Seller may terminate this Agreement by written notice to Purchaser, in which event, Escrow Agent shall return the Deposit to Purchaser and Seller shall pay to Purchaser all costs and expenses incurred by Purchaser in connection with the purchase of the Hotel Unit (other than attorney fees), pre-opening and marketing costs and expenses and other costs incurred by Purchaser in connection with the Hotel Condominium including, without limitation, the costs of obtaining and terminating the License Agreement (collectively, the “Purchaser’s Costs” ) and the parties shall be released from all further obligations under this Agreement except for the obligations that survive termination.

 

6.2 Notwithstanding anything contained herein to the contrary, if by March 1, 2006, Seller has met the Pre-Sale Requirement and desires to terminate this Agreement for any reason or no reason, Seller may terminate this Agreement by written notice to Purchaser in which event Seller shall pay to Purchaser Purchaser’s Costs plus Two Million and No/100 Dollars ($2,000,000.00) within ten (10) days after Seller’s election to terminate this Agreement, and, Escrow Agent shall return the Deposit to Purchaser and the parties shall be released from all further obligations under this Agreement except for the obligations that survive termination.

 

ARTICLE VII

SALES AND MARKETING PROGRAM

 

7.1 Seller, at its sole cost and expense, shall conduct a sales and marketing program for the sale of the Units and shall use commercially reasonable efforts to sell Units for purposes of meeting the Pre-Sale Requirement. Seller shall comply with all applicable laws governing sales and marketing of the Units comprising the Hotel Condominium, including without limitation compliance with Chapter 718, Florida Statutes, the guidelines established by various judicial decisions, the Statement of the Commission to Builders and Sellers of Condominiums, Securities Act Release No. 5347 (January 18, 1973), and a series of no-action letters made available to the public by the Securities & Exchange Commission (the “ Commission ”), including without limitation Intrawest Corporation, SEC No. No-Action Letter dated November 8, 2002 and the Commission Guidelines, as hereinafter defined, in connection with the sales and marketing of the Units comprising the Condominium Hotel (the “ Applicable Law ”).

 

4

7.2 Seller shall adhere to the Commission Guidelines, as hereinafter defined, regarding the marketing and sale of Units and Seller acknowledges that the Commission has consistently indicated that in connection with the offering and sale of hotel condominium units and offering of rental programs: (i) no emphasis may be placed on the economic benefits to the purchaser to be derived from the managerial efforts of a third party or from renting the Units; (ii) no statements or representations may be made with regard to the economic or tax benefits of ownership of the Units; (iii) no discussion, suggestion or implication may be made that any pooling arrangements will exist or that Unit Owners will share in the proceeds of any pooling arrangements; (iv) no discussion, suggestion or implication may be made that a Unit Owner must hold the unit available for rental for any part of the year, use an exclusive rental agent or be materially restricted in their occupancy of the Units; and (v) except for stating that “ownership may include the opportunity to place your home in a rental arrangement,” no advertisement or unsolicited offers of any rental services or rental program may be made, and no discussion, suggestion or implication may be made regarding the availability of any rental services or rental program unless such discussion, suggestion or implication is in response to direct questions from a purchaser regarding the rental activity, so that the rental program will not be deemed the sale of a security (collectively the “Commission Guidelines” ).

 

7.3 Seller shall have sole control over all sales and marketing materials utilized by Seller in connection with the sale of the Units comprising portions of the Hotel Condominium. Seller shall make copies of all such sales and marketing materials available to Purchaser for its review and comment; however, Seller shall not be required to modify or amend any sales and marketing materials utilized by Seller. Notwithstanding the foregoing, any information included in such sales and marketing materials that identifies Purchaser or an affiliate of Purchaser or makes reference to any services to be provided by Purchaser or contains a trademark or tradename of Purchaser shall conform in all respects to such information as provided by Purchaser to Seller. To the extent such sales and marketing material refer to Franchisor, such references and any related information shall conform in all respects with the License Agreement and marketing standards adopted by Franchisor. This provision shall survive the Closing.

 

7.4 In accordance with Applicable Law, if a prospective purchaser of a Unit asks direct questions regarding rental activities, Seller shall advise the prospective purchaser of the Rental Program, as hereinafter defined, being offered by Purchaser.

 

7.5 Seller agrees to indemnify and hold Purchaser and each of its affiliated entities, and Franchisor and each of its and their affiliates, managers, members, officers, directors and employees (each an “Indemnified Party” and collectively the “Indemnified Parties” ) harmless from any and all loss, claim, demand, action and liability, including reasonable attorney fees and costs which may arise against any Indemnified Parties by virtue of the failure of Seller and its employees and agents to comply with Applicable Law regarding the marketing and sale of the Units. This indemnification and hold harmless shall include reasonable attorneys’ fees and court costs through all trial and appellate levels which an Indemnified Party may incur in defending itself against any such claims, losses, actions, demands and liabilities and in enforcing the terms of this indemnification and hold harmless provision. This indemnification and hold

 

5

harmless provision shall survive the Closing or termination of this Agreement, shall be continuing and irrevocable and shall continue in force and effect until any and all such claims, losses, actions, demands and liabilities against the Indemnified Parties have been satisfied in full.

 

7.6 Purchaser and Seller acknowledge and agree that notwithstanding Purchaser’s review of the sales and marketing materials utilized by the Seller, Purchaser shall have no liability whatsoever to Seller if it is ultimately determined that the sales and marketing materials do not comply with Applicable Law, and such review shall not affect the indemnification obligations of Seller in accordance with Section 7.5.

 

ARTICLE VIII

RENTAL PROGRAM

 

8.1 Purchaser at its sole cost and expense shall develop a rental program which Purchaser will offer to Unit Owners who are interested in participating in a rental program (the “Rental Program” ). Purchaser will submit to Seller for its review and approval, its form of rental program agreement to be utilized by Purchaser for the Rental Program (the “ Rental Program Agreement ”) within forty-five (45) days from the Effective Date. The Rental Program Agreement shall include the economic terms summarized on Exhibit “I” attached hereto and made a part hereof (the “Rental Program Criteria” ). The Rental Program shall comply with Applicable Law and the Rental Program Criteria.

 

8.2 Seller shall have thirty (30) days from receipt of the Rental Program Agreement to review and approve same, which approval shall not be unreasonably withheld, provided the Rental Program Agreement complies with Applicable Law and the Rental Program Criteria. Seller shall submit to Purchaser any comments that Seller may have on the Rental Program Agreement within thirty (30) days of receipt of the Rental Program Agreement. If Seller does not respond, within the thirty (30) day period, the Rental Program shall be deemed approved. If Seller timely provides Purchaser with comments on the Rental Program Agreement, Purchaser shall promptly revise the Rental Program Agreement to address Seller’s comments provided the comments are not inconsistent with Applicable Law and the Rental Program Criteria. If Seller and Purchaser are not able to agree on the form of Rental Program Agreement within thirty (30) days of Purchaser’s receipt of Seller’s comments on the Rental Program Agreement, then in such event, either party may terminate this Agreement by written notice to the other at any time prior to Seller and Purchaser agreeing on the terms of the Rental Program Agreement, in which event, Escrow Agent shall return the Deposit to Purchaser and the parties shall be released from all further obligations under this Agreement except for the obligations that survive termination.

 

8.3 Upon approval of the Rental Program Agreement and until such time as Seller turns over control of the Condominium Association (as hereinafter defined) to the Unit Owners, Purchaser covenants and agrees not to modify or amend the Rental Program Agreement without the consent of Seller, which consent shall not be unreasonably withheld or delayed. Upon creation of the condominium association for the Hotel Condominium (the “ Condominium Association ”) and for so long as Seller controls the Condominium Association, Seller shall cause the Condominium Association to approve the Rental Program Agreement and any amendment or modification to the Rental Program Agreement. This provision shall survive the Closing.

 

6

8.4 In connection with the implementation of the Rental Program contemplated by the Rental Program Agreement, Purchaser covenants and agrees to comply with the Applicable Law.

 

8.5 Purchaser agrees to indemnify and hold Seller and Seller’s members, officers, directors, employees and each of it and their affiliated entities (each a “ Seller Indemnified Party ” and collectively the “ Seller Indemnified Parties ”) harmless from any and all loss, claim, damage, action and liability, including reasonable attorney fees and costs, which may arise against any Seller Indemnified Parties by virtue of the failure of Purchaser and its employees and agents to comply with Applicable Law in connection with the marketing of the Rental Program to purchasers of Units. This indemnification and hold harmless shall include reasonable attorneys’ fees and court costs through all trial and appellate levels which the Seller Indemnified Parties may incur in defending themselves or the Hotel Condominium against any such claims, losses, actions, demands and liabilities and in enforcing the terms of this indemnification and hold harmless provision. This indemnification and hold harmless provision shall survive the Closing or termination of this Agreement, shall be continuing and irrevocable and shall continue in force and effect until any and all such claims, losses, actions, demands and liabilities against the Seller Indemnified Parties and/or the Hotel Condominium have been satisfied in full.

 

8.6 [Intentionally Omitted.]

 

8.7 Purchaser shall submit to Seller for its review and approval all sales and marketing materials utilized by Purchaser in connection with the Rental Program for Seller’s approval, which approval shall not be unreasonably withheld or delayed provided the sales and marketing materials are in compliance with Applicable Law and the Rental Program Agreement approved by Seller. This provision shall survive Closing.

 

8.8 Seller and Purchaser acknowledge and agree that notwithstanding Seller’s review and approval of the sales and marketing materials utilized by the Purchaser and Seller’s approval of the Rental Program Agreement, Seller shall have no liability whatsoever to Purchaser if it is ultimately determined that Purchaser’s sales and marketing materials and/or the Rental Program Agreement do not comply with Applicable Law, and such approvals shall not affect the indemnification obligations of Purchaser in accordance with Section 8.5.

 

ARTICLE IX

BLACKOUT DATES AND USE RESTRICTIONS

 

9.1 Seller and Purchaser acknowledge that no “blackout dates” or similar restrictions will be imposed upon or enforced against the purchasers of individual condominium units comprising portions of the Hotel Condominium provided that the Rental Program Criteria and Rental Program Agreement may provide for monetary incentives or varied rates tied to, among other things, the level of usage of a Unit by its owner during certain periods of the year.

 

9.2 Purchaser and Seller acknowledge that Unit Owners shall be required to comply with the applicable zoning restrictions imposed by the City of Hollywood which are currently being formulated but are anticipated to have restrictions on the number of days in each year that a unit owner may occupy his or her hotel condominium unit.

 

7

ARTICLE X

PRE-OPENING AND MARKETING EXPENSES

 

10.1 Except as provided in Article VI, Purchaser will be solely responsible for all pre-opening and marketing expenses, associated with the pre-opening and the grand opening of the Hotel Condominium, all substantially in accordance with the Pre-Opening Budget, as hereinafter defined.

 

10.2 Purchaser shall submit to Seller for its review and comment Purchaser’s marketing and advertising plan associated with the pre-opening of the Hotel Condominium. Seller shall provide Purchaser with any suggestions and/or comments it may have on Purchaser’s pre-opening marketing plan. Purchaser will incorporate Seller’s suggestions with respect to the pre-opening sales and marketing plan as Purchaser, in its sole discretion, deems appropriate.

 

ARTICLE XI

PROJECT

 

11.1 Seller currently envisions developing the project (the “ Project ”) as a multi-phase project in accordance with the Site Plan consisting of the following elements: (i) phase I of the Project (“ Phase I ”) consisting of the Hotel Condominium which will consist of the renovation of the existing hotel located on a portion of the Land which when renovated will consist of approximately 300 hotel rooms and suites, the resort pool located next to the intracoastal waterway (the “Resort Pool” ) to be owned and operated by a master association (the “Master Association”) , beach access and walkway substantially in accordance with the Plans; (ii) phase II of the Project (“ Phase II ”) is currently envisioned to consist of a newly constructed 27-story Hotel Condominium and related parking garage including ballroom space, meeting space, outdoor function space, restaurant space and laundry facilities; (iii) phase III of the Project (“ Phase III ”) is currently envisioned to consist of between 27 and 50 Villa style hotel units to be constructed in three to four story condominium structures (the “Villas” ) with meeting space on the first floor (the “Villas Meeting Space” ), (iv) an oceanfront beach club (the “Beach Club” ) to be owned and operated by the Master Association; (v) a restaurant located next to the Resort Pool.

 

11.2 The Project is currently envisioned to be developed by Seller substantially in accordance with the Site Plan. Seller may elect to change the Site Plan with respect to all phases other than Phase I and not to construct or proceed with the development with respect to any other phases of the Project other than Phase I.

 

11.3 Purchaser specifically acknowledges that Seller has no obligation to develop any portion of the Project other than Phase I and Seller shall have no liability whatsoever to Purchaser if Seller does not proceed with the development of the Project for any reason whatsoever other than the development of Phase I.

 

11.4 In the event Seller completes Phase III, Purchaser will have the right to use the Villa Meeting Space, at market rates, subject to availability.

 

11.5 Purchaser shall be entitled to lease from Seller’s or affiliate, or the applicable condominium association storage space on the ground floor of the existing residential

 

8

condominium located at 4001 South Ocean Drive for purposes of storing equipment relating to use of the beach by guests of the Hotel Condominium. In the event Purchaser elects to use such storage space it will be responsible for taxes, insurance and maintenance charges reasonably attributable to such space.

 

ARTICLE XII

CONSTRUCTION ISSUES

 

12.1 Construction Activity

 

12.1.1 Purchaser acknowledges that the Hotel Condominium is a part of Phase I of the Project. To the extent that Seller, in its sole discretion, elects to proceed with other phases of the Project, Seller agrees to utilize commercially reasonable efforts to minimize the interference that the construction activities, may have on the operation of the Hotel Condominium including without limitation making commercially reasonable efforts to cause its contractors and subcontractors to minimize dust, construction noise and interference with the operation of the Hotel Condominium. Prior to any construction on any portion of the Project, Seller shall advise Purchaser of the anticipated dates for commencing construction and the proposed protocols to be utilized by Seller to minimize interference with the operation of the Hotel Condominium. Seller covenants and agrees to incorporate into Seller’s construction protocol all reasonably suggestions proposed by Purchaser.

 

12.1.2 Seller agrees to indemnify and hold each of the Indemnified Parties harmless from and against any and all loss, claim, demand, action and liability which may arise against the Indemnified Parties as a result of claims by Unit Owners, the Condominium Association or the Master Association, including reasonable attorney fees, against the Indemnified Parties as a result of any construction activities of Seller in connection with the construction of Phase II or Phase III. This indemnification and hold harmless shall include reasonable attorneys’ fees and court costs through all trial and appellate levels which the Indemnified Parties may incur in defending itself against any such claims, losses, actions, demands and liabilities and in enforcing the terms of this indemnification and hold harmless provision. This indemnification and hold harmless provision shall survive the Closing or termination of this Agreement, shall be continuing and irrevocable and shall continue in force and effect until any and all such claims, losses, actions, demands and liabilities against the Indemnified Parties have been satisfied in full.

 

12.2 Parking . Purchaser acknowledges that valet parking will be required for the entire Project which shall be provided by the Master Association, the cost of which shall be included in the operating expenses of the Master Association. Seller covenants and agrees to provide, through the Master Association, one valet parking space for each of the Units. Purchaser shall be entitled to charge guests of the Hotel Condominium market rate charges for use of the valet parking.

 

12.3 Until such time as required for construction and/or the Intracoastal Club is developed, if at all, Purchaser shall have the right to utilize that area designated on Exhibit “J” as temporary function space for use in connection with the operation of the Hotel Condominium (the “Temporary Function Space” ) at no charge. The Temporary Function Space shall consist

 

9

of a four thousand square foot tent on a hard surface to be provided by Seller. Prior to use of the Temporary Function Space, Purchaser shall provide Seller evidence that Purchaser has obtained general liability insurance in an amount not less than $2,000,000 naming Seller as an additional named insured. Seller shall relocate the Temporary Function Space at its sole expense to another location on the Land in the event the existing Temporary Function Space is needed for construction or is to be sold to an unaffiliated third party. Any such relocation shall provide for Purchaser’s continuous access to appropriate function space of the same square footage during normal hours of operation. Purchaser shall be required to maintain the Temporary Function Space at its sole cost and expense. Seller’s obligation to provide the Temporary Function Space will end upon (i) the completion of Phase III and Seller making the Villas Meeting Space available to Purchaser as provided in Section 11.4 or (ii) the sale of the Land such that Seller no longer owns any property associated with the Project on which the Temporary Function Space may be located provided Seller, its successor or assign, shall have granted an easement or otherwise agreed to make available to Purchaser, for so long as Purchaser owns the Hotel Unit, a portion of the Land of sufficient size such that the Temporary Function Space may be located and operated thereon by Purchaser. This provision shall survive the Closing contemplated by this Agreement.

 

ARTICLE XIII

NAME OF THE PROJECT

 

13.1 Seller has the sole right to name the Hotel Condominium and the other aspects of the Project as Seller may determine in Seller’s sole and absolute discretion, subject to complying with the requirements of the License Agreement.

 

ARTICLE XIV

MASTER ASSOCIATION

 

14.1 Seller currently envisions creating a Master Association which will own and operate the Beach Club and, if constructed, the Intracoastal Club, the common areas and other amenities associated with Project as well as other properties (collectively the “ Master Association Properties ”). Within one hundred twenty (120) days from the Effective Date, Seller shall submit to Purchaser for its review and comments the proposed documents creating the Master Association (the “Master Association Documents” ). Purchaser shall have thirty (30) days from receipt of the Master Association Documents to provide Seller with any comments regarding the Master Association Documents. Seller shall give due consideration for Purchaser’s comments on the Master Association Documents, however, Seller shall not be obligated to incorporate any of Purchaser’s suggested changes to the Master Association Documents. The Master Association Documents shall require the Master Association to maintain the Master Association Properties in a manner consistent with the franchise standards adopted from time to time by Franchisor (the “ Franchise Standards ”) for so long as the License Agreement, as same may be amended, modified and extended, is in effect, except the Master Association shall not be required to utilize Franchisor’s trademark in connection with the operation of the Master Association Properties.

 

10

ARTICLE XV

MANAGEMENT OF BEACH CLUB

 

15.1 Seller shall provide Purchaser with the right of first offer to operate and manage the Beach Club on behalf of the Master Association. Prior to entering into a management agreement with any other party with respect to the Beach Club, Seller shall first attempt to negotiate a management agreement with Purchaser with respect to the management of the Beach Club on behalf of the Master Association. If Seller and Purchaser are not able to reach an agreement on the terms of managing the Beach Club within thirty (30) days after the commencement of discussions regarding the management of the Beach Club, Seller shall be free to negotiate a management agreement with respect to the Beach Club with any other party; provided, that before entering into a management agreement with any other party, Seller shall offer Purchaser the opportunity to enter into a management agreement on the same terms and conditions offered by such third party. Purchaser shall have five (5) business days to notify Seller of its acceptance of such offer. If Purchaser fails to accept such offer within such