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5 <br /> construction by the Project Completion Date. The Project Construction Covenant shall <br /> also include provisions in favor of Seller that require the Property to be developed by <br /> Purchaser or any successor or assign of Purchaser (as permitted under this Agreement) <br /> in accordance with the Plans and Specs (as defined in Section 4(e) below) and that the <br /> quality of construction of the Project shall be satisfactory to meet the quality standards <br /> established by the selected Hotel Franchise (as defined in Section 4(d) below). The <br /> Project Construction Covenant shall include a prohibition on conveyance of the <br /> Property, except in connection with financing needed to complete the Project, until the <br /> Project has been constructed and operation of the Project has reached Stabilization. As <br /> used in this Agreement and the Project Construction Covenant, the term Stabilization <br /> shall mean that the Project has been operated at an average level of seventy percent <br /> (70%) occupancy for a three (3) consecutive month period. <br /> f. Remedies for Default under the Protect Construction Covenant. <br /> The Project Construction Covenant shall include provisions for Seller remedies in the <br /> event of Purchaser's material breach of the Project Construction Covenant. Such <br /> remedies shall include provisions substantially the same as the following, unless <br /> otherwise agreed to by the parties: <br /> (i) Purchaser shall pay to Seller on demand liquidated damages <br /> in an amount to be determined by the parties during the Feasibility Period. The Project <br /> Construction Covenant shall also include the following additional provisions: the parties <br /> understand and agree that the Seller's ability to obtain value for the Property is <br /> conditioned upon the development and construction of the Project in accordance with <br /> this Agreement, and that it would be impracticable and extremely difficult to fix the <br /> actual damages sustained as a result of the failure of Purchaser develop and construct <br /> the Project in accordance with this Agreement including the Project Construction <br /> Covenant; as a result, the parties agree that Seller shall have the right to recover the <br /> liquidated damages in the amounts set forth herein, which amount the parties agree are <br /> a reasonable estimate of the damage to the Seller, and are intended to fairly measure <br /> the loss to the Seller and are not punitive in nature; and this liquidated damages amount <br /> shall be a lien on the Property for Seller's benefit; or <br /> (ii) On or before the date that Purchaser commences construction <br /> of the Project, Seller shall have the right to repurchase the Property for the Purchase <br /> Price in the event that Purchaser fails to timely commence construction of the Project <br /> (subject to the force majeure provisions of the Project Construction Covenant) or <br /> Purchaser's other material breach of the Project Construction Covenant provisions prior <br /> to such commencement of construction. If Seller exercises such option, then Purchaser <br /> shall pay all excise taxes in connection with such transfer; the deed will be in the same <br /> form as used to convey the Property to Purchaser; Purchaser shall assign to Seller, <br /> without representation or warranty, all assignable permits, contracts, and plans and <br /> specifications associated with the Project; and no additional encumbrances shall exist <br /> on title other than those that existed when title transferred to Purchaser. <br /> i= r.- <br /> -3- <br /> 50939068.4 <br />