Document:

Exhibit 10.24(e)

 

FOURTH AMENDMENT TO REAL ESTATE

 

BROKERAGE FRANCHISE AGREEMENT

 

This Fourth Amendment to Real Estate Brokerage Franchise Agreement (this “Fourth Amendment”) is executed this 5th day of June 2007 but shall be retroactively effective as of March 29, 2006 (the “Effective Date”), by and between Prudential Real Estate Affiliates, Inc., a Delaware corporation (“Franchisor”) and Watermark Realty, Inc., a corporation doing business in the State of Florida as Prudential Florida WCI Realty (“Franchisee”) with reference to the following facts:

 

A.        Franchisor and Franchisee are parties to that certain Real Estate Brokerage Franchise Agreement, a Second Amendment to Real Estate Brokerage Franchise Agreement and Renewal Amendment to Real Estate Brokerage Franchise Agreement, each dated March 4, 2004, as well as various subsequent amendments and addenda (the foregoing agreements, as amended, are referred to collectively herein as the “Franchise Agreement”).  Capitalized terms not defined herein are used as defined in the Franchise Agreement.

 

B.         Franchisor has consented to Franchisee’s acquisition of Virginia James Corporation, a Florida corporation which previously did business as Prudential Village Realty (“Village”) in and around the Counties of Charlotte and Sarasota, Florida. Franchisee has completed the acquisition and currently operates the offices acquired from Village (the “Acquired Locations”) as part of its Franchised Business.

 

C.        In connection with Franchisee’s acquisition of Village and the Acquired Locations, Franchisor and Franchisee wish to modify certain provisions of the Franchise Agreement and agree as to certain other modifications to the Franchise Agreement and to other matters as set forth below.

 

NOW, THEREFORE, based upon the foregoing facts, and for other valuable consideration, the receipt and adequacy of which are hereby acknowledged, Franchisor and Franchisee agree that the Franchise Agreement is hereby modified as set forth herein and that this Fourth Amendment constitutes a part of the Franchise Agreement.

 

1.        Continuing Royalties Following Acquisition.

 

(a)       Notwithstanding the provisions of paragraph 6 of that certain Third Amendment to Real Estate Brokerage  Franchise  Agreement executed by Franchisor and Franchisee on June 14, 2005, concerning the calculation of Continuing Royalties following acquisitions by Franchisee, and subject to the additional terms and conditions set forth below, for the remainder of the term of the Franchise Agreement, Franchisor agrees that Franchisee shall pay Continuing Royalties on certain Gross Revenues derived from the Acquired Locations at the rates and in accordance with the other terms set forth  in the existing Franchise Agreement between Franchisor and Franchisee.

 

(b)       In addition to the Continuing Royalties attributable to the Acquired Locations which are payable in accordance with paragraph 1(a) of this Fourth  Amendment, Franchisee hereby agrees to pay to Franchisor a fixed amount of $94,000 per year for each year from 2006 through and

 

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including 2010 (the “Annual Adjustment”). Franchisee has agreed to pay the Annual Adjustment to Franchisor as partial compensation for the reduction in royalty revenues suffered by Franchisor as a result of its consent to Franchisee’s acquisition of Village. The annual adjustment shall be paid by Franchisee on or before January 31 of the year following the year for which such payment is due.  By way of example, the Annual Adjustment payment for 2006 shall be paid no later than January 31, 2007.

 

(c)       If in any calendar· year from 2006 through and including 2010, Franchisee achieves Gross Revenues derived from all Locations operated by Franchisee in Charlotte and Sarasota  Counties, Florida whether now operated or hereafter acquired or established, but excluding any Additional Locations acquired following the Effective Date from other existing franchisees of Franchisor (the “Charlotte/Sarasota Locations”) of less than $2,400,000 (the “Minimum Charlotte/Sarasota GCI”), then the Continuing Royalties payable to Franchisor for that year with respect to the Charlotte/Sarasota Locations shall be calculated and paid based on the table set forth in paragraph 5.02(a) of the Franchise Agreement in lieu of the Continuing Royalties due under paragraphs 1(a) and 1(b) of this Fourth Amendment.  Promptly following the end of any such calendar year in which Franchisee does not achieve the Minimum Charlotte/Sarasota GCI from the Charlotte/Sarasota Locations, then Franchisor shall calculate Franchisee’s actual Continuing Royalty fees due and owing for that calendar year based on the provisions of this paragraph 1(c) and Franchisor shall notify Franchisee of such amount.  The actual amounts paid to Franchisor during the calendar year in accordance with paragraph 1(a) shall be compared to the actual amount due Franchisor for that calendar year in order to calculate the “true-up” amount due from Franchisee and Franchisor.  Within thirty (30) days of such notification, Franchisee shall make full payment of these “true-up” funds to Franchisor.  The Annual Adjustment shall not be payable for any calendar year in which Continuing Royalties due Franchisor from the Charlotte/Sarasota Locations are calculated in accordance with this paragraph 1(c).

 

(d)       If any calendar year from 2006 through and including 2010, Franchisee achieves Gross Revenues derived from the Charlotte/Sarasota Locations in excess of $14,000,000, then the amount of the Annual Adjustment for that calendar year shall be reduced by an amount calculated in accordance with the following formula:  (i) $94,000, multiplied by (ii) a fraction,  the numerator of which shall  be the actual Gross  Revenues derived from the Charlotte/Sarasota  Locations in that calendar year minus $14,000,000, and the denominator of which shall be $14,000,000.  By way of example, if in 2006 the Gross Revenues derived from the Charlotte/Sarasota Locations are $15,400,000, then the numerator of the fraction would be $1,400,000 ($15,400,000 minus $14,000,000), the denominator of the fraction would be $14,000,000, and the resulting percentage would equal 10%.  In this example, the Annual Adjustment for 2006 would therefore be reduced by $9,400 ($94,000 multiplied by 10%) to $84,600. Should Franchisee derive Gross Revenues from the Charlotte/Sarasota Locations in excess of $28,000,000 in any calendar year from 2006 through and including 2010, then no Annual Adjustment payment shall be due from Franchisee to Franchisor for such calendar year.

 

2.         Orlando Protected Territory/Time for Conversion to Exclusive Territory.  Notwithstanding anything to the contrary set forth in that certain First Addendum to the Second Amendment to Real Estate Brokerage Franchise Agreement dated June 14, 2005 (the “2005

 

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Exclusivity Addendum”), Franchisor agrees that the time period for the Orlando Protected Territory and for Franchisee to achieve Gross Revenues in an amount of no less than Ten Million Dollars ($10,000,000) in the Orlando Protected Territory and convert the Orlando Protected Territory to the Orlando Exclusive Territory shall be amended to be thirty-three (33) months, rather than twenty-one (21) months as originally agreed.  Except as otherwise set forth herein, all other provisions of the 2005 Exclusivity Addendum remain in full force and effect.

 

3.         Pensacola Protected Territory/Time for Conversion to Pensacola Exclusive Territory.  Notwithstanding anything to the contrary set forth in the 2005 Exclusivity Addendum, Franchisor agrees that the time period for the Pensacola Protected Territory and for Franchisee to achieve Gross Revenues in an amount of no less than Two Million Dollars ($2,000,000) in the Pensacola Protected and convert the Pensacola Protected Territory to the Pensacola Exclusive Territory shall be amended to be thirty-three (33) months, rather than twenty-one (21) months as originally agreed.  Except as otherwise set forth herein, all other provisions of the 2005 Exclusivity Addendum remain in full force and effect.

 

4.         Indian River/St. Lucie Protected Territory/Time for Conversion to Indian River/St. Lucie Exclusive Territory.  Notwithstanding anything to the contrary set forth in the 2005 Exclusivity Addendum, Franchisor agrees that the  time period for the Indian River/St. Lucie Protected Territory and for Franchisee to achieve Gross Revenues in an amount of no less than Four Million Dollars ($4,000,000) in the Indian River/St. Lucie Protected Territory and convert the Indian River/St. Lucie Protected Territory  to the Indian River/St. Lucie Exclusive Territory shall be amended to be thirty-three (33) months, rather than twenty-one (21) months as originally agreed.  Except as otherwise set forth herein, all other provisions of the 2005 Exclusivity Addendum remain in full force and effect.

 

5.         Confidentiality.  Franchisee acknowledges that Franchisor is willing to enter into this Fourth Amendment subject to the condition that Franchisee maintains the confidentiality of this Fourth Amendment as set forth in this paragraph.  Franchisee agrees that it will maintain the confidentiality of this Fourth Amendment and will not permit the terms hereof or the content of discussions between Franchisee and Franchisor or their representatives related hereto to be disclosed to any parties other than the parties hereto and Franchisee’s officers, shareholders, attorneys and accountants.  Franchisee further agrees that it shall cause any party to which it discloses such information to maintain the confidentiality of such information and not to disclose such information to any parties other than those to whom Franchisee is permitted to make disclosures under this paragraph. The restrictions of this paragraph shall not apply to information which is now in the public domain, or which later enters the public domain, through no action by Franchisee in violation of these confidentiality provisions.  Franchisor acknowledges that this paragraph shall not prohibit Franchisee from making disclosures required by law.  Franchisee agrees however, that prior to making such disclosure it shall provide Franchisor with prompt notice of such requirement and shall cooperate with Franchisor in seeking a protective order waiving such disclosure and obtaining reliable assurance that confidential treatment will be accorded to any confidential information disclosed.

 

6.      Incorporation of  Franchise  Agreement.  All other terms and conditions of the Franchise Agreement not specifically modified hereby shall remain in full force and effect.

 

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7.         Counterparts.  This Fourth Amendment may be executed in two or more counterparts and with facsimile signatures, each of which shall be deemed an original, but all of which when taken together will constitute one and the same instrument.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Fourth Amendment to be executed as of the first date indicated above.

 

	
 
    	
FRANCHISEE:
    
	
 
    	
Watermark   Realty, Inc.,
    
	
 
    	
A Florida corporation
    
	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Rei Mesa
    	
 
    
	
 
    	
 
    	
 
    	
Rei Mesa
    
	
 
    	
 
    	
Its:
    	
President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
FRANCHISOR:
    
	
 
    	
Prudential Real Estate   Affiliates, Inc.
    
	
 
    	
a Delaware corporation
    
	
 
    	
 
    
	
 
    	
 
    	
 
    	
/s/ Laurie Keenan
    	
 
    
	
 
    	
 
    	
By:
    	
Laurie Keenan
    
	
 
    	
 
    	
Its:  
    	
President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
/s/ David S. Beard
    	
 
    
	
 
    	
 
    	
By:
    	
David S. Beard
    
	
 
    	
 
    	
Its:
    	
Vice President,   Corporate 

Counsel and Assistant   Secretary
    
							

 

5Exhibit 10.24(f)

 

FIFTH AMENDMENT

TO REAL ESTATE BROKERAGE FRANCHISE AGREEMENT

 

 

This Fifth Amendment to Real Estate Brokerage Franchise Agreement (“Fifth Amendment”) is made and entered into as of December 27, 2007 (the “Effective Date”), by and between Prudential Real Estate Affiliates, Inc., a Delaware corporation (“Franchisor”), and Watermark Realty, Inc., a Delaware corporation, doing business in the State of Florida as Prudential Florida WCI Realty (“Franchisee”), with reference to the following facts:

 

A.        Franchisor and Franchisee are parties to  that certain  Real  Estate  Brokerage Franchise Agreement, a Second Amendment to Real Estate Brokerage Franchise Agreement and Renewal Amendment to Real Estate Brokerage Franchise Agreement, each dated March 4, 2004, as well as various subsequent amendments and addenda (the foregoing agreements, as amended, are referred to collectively herein as the “Franchise Agreement”).  Capitalized terms not defined herein are used as defined in the Franchise Agreement.

 

B.        Franchisor and Franchisee wish to modify certain provisions of the Franchise Agreement and agree as to certain other modifications to the Franchise Agreement and to other matters as set forth below.

 

NOW, THEREFORE, in consideration of the above recitals, and for other valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, Franchisor and Franchisee agree as follows:

 

AGREEMENT

 

1.         Continuing Royalty.  Notwithstanding anything to the contrary set forth in that certain Third Amendment to Real Estate Brokerage Franchise Agreement (the “Third Amendment”), executed and made effective by Franchisor and Franchisee as of June 14, 2005, Franchisor hereby agrees that should Franchisor grant to any franchisee in the System with comparable or smaller-size Gross Revenues which results in such franchisee paying an cumulative Continuing Royalty rate less than the Continuing Royalty rate set forth in paragraph 1 of the Third Amendment, then in such event, Franchisor agrees, automatically and without demand by Franchisee, to adjust the overall effective Continuing Royalty rate payable by Franchisee to match such lower effective Continuing Royalty rate for so long as such lower effective Continuing Royalty rate is applicable.  As used herein, the phrase “Continuing Royalty rate” means only the actual contractual Continuing Royalty rate and does not include conversion assistance, royalty fee waivers or credits or similar concessions granted by Franchisor. Upon the request of Franchisee, but no more than once in any Anniversary Year, Franchisor shall certify to Franchisee that the cumulative Continuing Royalty rate utilized by Franchisor in such calculation is the equal to the lowest cumulative Continuing Royalty rate charged by Franchisor to any franchisee in its Network with comparable or smaller-size Gross Revenues.  Such certification shall be made by the Chairman or President of Franchisor.  In addition, such certification shall notify Franchisee of any modifications to Franchisee’s Continuing Royalty

 

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rate schedule necessary as of the date of the certification to comply with the provisions of this paragraph 1 of this Fifth Amendment.  Should Franchisor fail to provide a certification as requested,  such failure shall not be a material breach of the New Franchise Agreement, but Franchisor shall provide such certificate to Franchisee within ten (10) business days following a written demand therefor.  The foregoing paragraph is intended to supersede in its entirety the existing paragraph 2 of the Third Amendment.

 

2.         Confidentiality. Franchisee acknowledges that Franchisor is willing to enter into this Fifth Amendment subject to the condition that Franchisee maintains the confidentiality of this Fifth Amendment as set forth in this paragraph.  Franchisee agrees that it will maintain the confidentiality of this Fifth Amendment and will not permit the terms hereof or the content of discussions between Franchisee and Franchisor or their representatives related hereto to be disclosed to any parties other than the parties hereto and Franchisee’s officers, shareholders, attorneys and accountants.  Franchisee further agrees that it shall cause any party to which it discloses such information to maintain the confidentiality of such information and not to disclose such information to any parties other than those to whom Franchisee is permitted to make disclosures under this paragraph.  The restrictions of this paragraph shall not apply to information which is now in the public domain, or which later enters the public domain, through no action by Franchisee in violation of these confidentiality provisions.  Franchisor acknowledges that this paragraph shall not prohibit Franchisee from making disclosures required by law.  Franchisee agrees however, that prior to making such disclosure it shall provide Franchisor with prompt notice of such requirement and shall cooperate with Franchisor in seeking a protective order waiving such disclosure and obtaining reliable assurance that confidential treatment will be accorded to any confidential information disclosed.

 

3.         Entire Agreement.  The Franchise Agreement, as amended by this Fifth Amendment, constitutes the entire agreement between the parties hereto with respect to the matters set forth herein and therein; all other understandings or representations, whether oral or written, having been incorporated herein and therein, are otherwise superseded.  The parties agree that the terms and conditions of this Fifth Amendment supersede inconsistent terms of the Franchise Agreement, that the Franchise Agreement is modified as set forth herein, and that this Fifth Amendment constitutes a part of the Franchise Agreement. All of the terms and conditions of the Franchise Agreement not specifically modified herein shall remain in full force and effect.

 

4.          Governing Law.  This Fifth Amendment shall be governed by the laws of the State of California.

 

5.         Titles for Convenience.  Article and paragraph titles used in this Fifth Amendment are for convenience only and shall not be deemed to affect the meaning or construction of any of the terms, provisions, covenants or conditions of this Fifth Amendment.

 

6.         Acknowledgment.  Franchisor’s and Franchisee’s representatives do hereby acknowledge that they have carefully read this Fifth Amendment, that they have obtained or have had the opportunity to obtain, the advice of counsel in connection with entering into this Fifth Amendment, that they understand the nature of this Fifth Amendment and its consequences, and that they intend to comply herewith and be bound hereby.

 

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7.         Counterparts.  This Fifth Amendment may be executed in multiple counterparts and with facsimile signatures, each of which shall be deemed an original, but all of which when taken together will constitute one and the same instrument.

 

IN WITNESS WHEREOF Franchisor and Franchisee have caused this Fifth Amendment to be executed on the date first set forth above.

 

	
 
    	
FRANCHISEE:
    
	
 
    	
 
    
	
 
    	
WATERMARK   REALTY, INC.
    
	
 
    	
a Delaware corporation
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/
    	
Rei Mesa
    	
 
    
	
 
    	
 
    	
 
    	
Rei Mesa
    
	
 
    	
Its:
    	
 
    	
President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
FRANCHISOR:
    
	
 
    	
 
    
	
 
    	
PRUDENTIAL REAL ESTATE   AFFILIATES, INC.
    
	
 
    	
a Delaware corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Laurie K. Keenan
    	
 
    
	
 
    	
 
    	
 Laurie K. Keenan
    
	
 
    	
Its: 
    	
 President
    
	
 
    	
 
    	
 
    
	
 
    	
By: 
    	
/s/ David S.Beard
    	
 
    
	
 
    	
 
    	
 David S.Beard
    
	
 
    	
Its: 
    	
 Vice President,   Corporate Counsel
    
	
 
    	
 
    	
 and Assistant   Secretary
    
						

 

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