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EXHIBIT 10.165
PREFERRED EQUITIES CORPORATION
EXCLUSIVE SALES AGREEMENT
THIS EXCLUSIVE SALES AGREEMENT ("Agreement") is entered into as of March 8,
1999, by and between Preferred Equities Corporation., a Nevada corporation,
having its principal address at 0000 Xxxxxxxx Xxxx, Xxx Xxxxx, Xxxxxx 00000
("PEC") and Great Escape Marketing, Inc., a Florida corporation having its
principal address at 0000 00xx Xxxxxx Xxxx, #000, Xxxxxxxxx, Xxxxxxx 00000
("Sales Entity").
RECITAL OF FACTS
PEC desires to retain Sales Entity pursuant to the terms and conditions of this
Agreement to engage in Sales of Timeshare at PEC's Sales office located at 0000
Xxxxx xx Xxxxx Xxxxx, Xxxxxxx, Xxxxxxx 00000 ("Sales Office").
Sales Entity desires to be so retained.
For good and valuable consideration the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
1. DEFINITIONS - All capitalized terms used within this Agreement, including all
Exhibits attached hereto and made a part hereof, unless otherwise defined within
this Agreement or any Exhibit attached hereto, shall have the respective
meanings ascribed in the Appendix of Defined Terms attached hereto and made a
part hereof.
2. ENGAGEMENT - In consideration of PEC and Sales Entity entering into this
Agreement and Sales Entity representing that it and all employees engaged by
Sales Entity hold all necessary licenses, PEC hereby engages Sales Entity to
conduct Sales of Timeshare at Sales Office. Sales Entity represents and agrees
that as of the date of and throughout the term of this Agreement, Sales Entity
and all employees of Sales Entity meeting the definition of a broker,
broker-salesperson or transaction broker under The 1998 Florida Statutes Chapter
475, are and will be licensed real estate agents and/or agents for Sales of
Timeshare licensed by the State of Florida and all lesser municipal bodies or
agencies as may be required and Sales Entity and its employees are and will
remain in good standing with all applicable State and all lesser municipal
bodies licensing requirements. Sales Entity further represents and agrees that
it will comply with all applicable laws, policies, rules, regulations and
procedures established by any federal, State or local regulatory agency.
3. BEST EFFORTS - During the term of employment, Sales Entity agrees to: (a)
devote its best efforts to Sales of Timeshare at Sales Office; (b) fully perform
all duties as directed by PEC from time to time; and (c) faithfully and
diligently endeavor to promote the best interests of PEC.
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4. COMPENSATION - PEC shall pay to Sales Entity Sales Commissions at a rate and
at times shown on the Sales Commission Schedule, attached hereto, made a part
hereof and marked Exhibit "A". Sales Commissions shall be calculated on Net
Processed Volume for Contracts meeting Conforming Sales Criteria as shown on
Exhibit "B", attached hereto and made a part hereof. Conforming Sales Criteria
may be modified upon the giving of written notice to Sales Entity by PEC.
Rejection of any such change or modification by Sales Entity shall constitute a
termination of this Agreement pursuant to Paragraph 11.B of this Agreement.
5. EARNED COMMISSIONS - Sales Commissions become Earned Commissions at such time
as (a) all rights of rescission, including but not limited to all State
rescission periods and post-Contract inspection rights, if any, have expired and
(b) not less than fifty percent (50%) of a Contract balance has been paid to PEC
or the total down payment and six (6) contractual payments have been received by
PEC. Advances Against Commissions are subject to Recovery until such time as
Sales Commissions become Earned Commissions.
6. REPAYMENT OF ADVANCES AGAINST COMMISSION - In the event that there is a
default of any kind in a Contract, as determined in the sole discretion of PEC,
prior to the Sales Commission on such defaulted Contract becoming an Earned
Commission, Sales Entity shall repay PEC any Advances Against Commissions paid
by PEC to Sales Entity with respect to such defaulted Contract and PEC may
reduce the Reserve Account for the amount, if any, credited thereto on such
defaulted Contract. PEC shall, without waiving any other right to repayment,
have the right of Recovery for repayment of Advances Against Commissions paid by
PEC to Sales Entity with respect to such defaulted Contracts.
7. RESERVE ACCOUNT - A Reserve Account will be established by PEC to which will
be credited the amounts set forth in Paragraph 3. under "Payment of Sales
Commissions" on Exhibit "A", attached hereto. A Minimum Balance set forth in
Exhibit "A" attached hereto shall be attained and maintained throughout the term
of this Agreement in the Reserve Account. PEC may commingle Reserve Account
funds with its other funds. PEC retains the right to adjust the Minimum Balance,
in its sole discretion, according to Sales Entity's production levels. Within
one (1) year following the Termination Date, PEC shall conduct a final
accounting of Sales Entity's Sales activities to determine any and/or all Earned
Commissions less defaulted, canceled and/or non-processed Contracts and shall
pay the net amount, if any, remaining in the Reserve Account to Sales Entity.
8. PREMISES - PEC agrees to provide and maintain the Sales Office, including the
Sales room, and existing office equipment, audio visual equipment, telephones,
computers, facsimiles, copier, typewriter, office supplies, office furniture,
waiting room furniture, signage, as they exist on the date of this Agreement.
Sales related documents, approved advertising, presentation books and
promotional pieces will be made available to Sales Entity as reasonably
requested. The use of telephones and facsimile shall be limited to communication
between Sales Entity and PEC, and Sales Entity shall be solely responsible for
the payment of any additional charges incurred.
One (1) model condominium will be provided by PEC.
9. SALES AND MARKETING - It is understood that Sales Entity will be making use
of suites from time to time at PEC's property in Orlando, Florida to house some
of Sales Entity's prospective purchasers. Sales Entity shall pay to PEC a
refundable rental deposit of $5,600.00 upon the execution of this Agreement in
exchange for a block of twenty (20) suites per night at PEC's resort located in
Orlando, Florida. Sales Entity shall make reservations with respect
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thereto through PEC's reservation system for PEC owners. Sales Entity shall
notify PEC not less than fourteen (14) days prior to the arrival date of any
cancellations. Any canceled reservations for said suites shall become
immediately available for PEC's use. PEC shall provide an invoice to Sales
Entity on Monday of each week for Rent due through the previous Sunday, which
shall be paid no later than 5:00 p.m. Eastern Time on the following Wednesday.
Provided all suites have been reserved and confirmed in accordance with the
terms herein, and provided that Sales Entity has paid for all such suites, the
refundable rental deposit will be returned to Sales Entity upon termination of
this Agreement.
Sales Entity shall provide, maintain and bear all costs associated with Sales
Entity's marketing programs, as approved by PEC, including but not limited to
premiums, gifts and charges incurred, other than for items specifically to be
provided by PEC pursuant to Paragraph 8. of this Agreement. Sales Entity shall
not solicit or sell Timeshares to any persons, appointments for whom have been
arranged by PEC with PEC Sales personnel.
10. ADMINISTRATION - PEC shall verify, process and service any and all Contracts
in accordance with its corporate policies. All customer payments including down
payment and fees shall be payable to PEC or its designee and any such payments
received by Sales Entity or any officer or employee of Sales Entity, shall be
immediately remitted to PEC. Sales Entity may assist in collecting payment of
dishonored checks and similar instruments with the prior approval of PEC. Sales
Entity may also assist in the process of completing incomplete sales materials,
documents and Contracts, with the prior approval of PEC.
11. TERMINATION -
A. This Agreement shall expire on February 28, 2001, ("Termination
Date"), or on such earlier date as called for under this Agreement if terminated
by either party hereto. Payment of Advances Against Commissions will cease as of
the Termination Date and any pending Advances Against Commissions, including
Earned Commissions not yet paid, will be held back to cover all Recoveries. When
all Sales Commissions payable on the Contracts on which Sales Entity is eligible
to receive Sales Commissions have either been withheld as a Recovery or become
Earned Commissions, the remaining balance of any Earned Commissions not yet
withheld as a Recovery shall be paid to Sales Entity. Sales Entity shall be
responsible for repayment to PEC for all Recoveries that exceed previously paid
Earned Commissions.
B. This Agreement may be terminated by either party at any time and for
any or no reason by giving thirty (30) days written notice to the other party in
which case the Termination Date shall be upon the expiration of the thirty (30)
days following the giving of such written notice.
C. In the event of a breach by Sales Entity of the representations or
agreements contained in Paragraph 2. hereof, or the failure of Sales Entity to
properly remit funds to PEC in accordance with Paragraph 10. hereof, PEC may
terminate the Agreement immediately by written notice to Sales Entity.
12. CONFIDENTIALITY - Sales Entity agrees not to disclose, either during or
subsequent to the term of this Agreement, any confidential information and trade
secrets of PEC, including any and all customer lists, marketing plans or
strategies. It is further understood and agreed that Sales Entity's use of the
names and/or addresses and/or telephone numbers of PEC's customers
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and/or other customer prospects, whether supplied by PEC or secured by Sales
Entity during Sales Entity's engagement with PEC, for any purpose other than the
furtherance of PEC's business is a breach of this Agreement. Sales Entity
further agrees not to directly or indirectly attempt to persuade any salesperson
to leave PEC's employ.
13. INDEMNIFICATION - Sales Entity hereby covenants and agrees to indemnify and
hold PEC, its affiliates and all directors, officers and employees thereof (the
"Indemnities") harmless from any and all lawsuits, claims, demands and
liabilities resulting in judgment against the Indemnities in favor of any
prospective purchasers of Timeshare solicited or procured By Sales Entity, where
such claim, demand, liability or judgment arises, or is claimed to arise out of,
by reason of, or in connection with any violation by Sales Entity and/or any or
all employees engaged by Sales Entity, of any applicable law, ordinance, rule,
regulation, or order of competent public authority, and/or obligations assumed
by Sales Entity under this Agreement, including the obligations to abide by the
Code of Ethics, regulations and operating rules and procedures promulgated from
time to time by PEC, its affiliates or subsidiaries, or as the result of Sales
Entity's negligence and/or willful misconduct. Sales Entity also agrees to
indemnify and hold the Indemnities harmless from all reasonable attorney fees,
costs and expenses incurred by an Indemnity in defending against any such
lawsuits, claims, demands and liabilities.
PEC shall indemnify and hold Sales Entity harmless from all reasonable attorney
fees, costs and expenses incurred by Sales Entity that Sales Entity might incur
in defense of Sales Entity for suit(s) brought by third parties against Sales
Entity based on the willful misconduct of PEC.
14. PROHIBITED ACTS - With respect to the Sales contemplated by this Agreement,
Sales Entity will not publish or cause to be published by any means, any
advertising, radio or television commercials, brochures, flyers or other written
materials or sales scripts without prior written approval of PEC. Sales Entity
will not use any contracts, documents, form letters or any other collateral
material of any type that has not been approved in writing or provided to Sales
Entity by PEC.
15. INDEPENDENT CONTRACTOR - Sales Entity and PEC agree that Sales Entity's
relationship to PEC under the terms of this Agreement is that of independent
contractor and that Sales Entity is in no way to be construed as a servant,
partner, trustee, employee, joint venturer or co-venturer of PEC or any other
signatory to this Agreement.
16. GENERAL PROVISIONS -
A. This Agreement shall be interpreted in accordance with the
laws of the State of Florida.
B. Sales Entity agrees at all times to conform its and its
employees' conduct to PEC's Code of Ethics, a copy of which
Sales Entity acknowledges having received.
C. Either party's failure to enforce any provision of this
Agreement shall not in any way be construed as a waiver of any
such provision, or prevent that party thereafter from
enforcing each and every other provision of this Agreement.
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D. The provisions of this Agreement are severable, and if any one
or more provisions are determined to be judicially
unenforceable, in whole or in part, the remaining provisions
shall nevertheless be binding and enforceable.
E. The headings set forth in this Agreement are for convenience
only and shall not be used in interpreting this Agreement.
F. The rights and obligations under this Agreement shall inure to
the benefit of and shall be binding upon the parties'
respective heirs, successors and permitted assigns. Sales
Entity may not assign its respective benefits or duties under
this Agreement.
G. Reference to either gender shall apply to both genders.
17. NOTICE - All notices required hereunder shall be given by prepaid,
registered or certified air mail, return receipt requested:
If to PEC or its affiliates: 0000 Xxxxxxxx Xxxx
Xxx Xxxxx, Xxxxxx 00000
Attention: Xxxxx X. XxXxxxxxx
Copy to: Xxx X. Xxxxxx
If to Sales Entity: 0000 00xx Xxxxxx Xxxx, #000
Xxxxxxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
18. ENTIRE AGREEMENT - This Agreement, the Appendix of Defined Terms and
Exhibits "A" and "B", constitutes the entire Agreement between PEC and Sales
Entity relating to this subject matter and supersedes all prior or simultaneous
representations, discussions, negotiations and Agreements, whether written or
oral. No PEC representative, other than the signatory to this Agreement or his
successor in interest as Executive Vice President and Chief Operating Officer,
has any authority to agree to anything contrary to the terms and conditions set
forth in this Agreement. Any amendment or modification of this Agreement must be
in writing. No oral waiver, amendment or modification will be effective under
any circumstances.
THIS AGREEMENT IS ENTERED INTO AS OF THE DATE FIRST APPEARING HEREIN.
GREAT ESCAPE PREFERRED EQUITIES
MARKETING, INC. CORPORATION
By: /s/ XXXX XXXXXXXX By: /s/ XXXXX X. XXXXXXXXX
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Xxxx Xxxxxxxx Xxxxx X. XxXxxxxxx
Director of Operations Executive Vice President and
Chief Operating Officer
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APPENDIX OF DEFINED TERMS
Advance(s) Against Commission(s) - means all payments of Sales Commissions paid
by PEC in accordance with the Sales Commission Schedule attached hereto and
marked Exhibit "A".
Agreement- means this Exclusive Sales Agreement entered into by and between PEC
and Sales Entity.
Code of Ethics - means Preferred Equities Corporation Code of Ethics used by
PEC.
Conforming Sales Criteria - means the criteria shown on Exhibit "B", attached
hereto.
Contract(s) - means a PEC approved Sales agreement for Sale of Timeshare at
PEC's Timeshare resort located in Orlando, Florida, entered into by and between
Sales Entity on behalf of PEC and a customer, evidencing the Sale of Timeshare,
that meets all Conforming Sales Criteria and includes all documents required by
Paragraph A of Exhibit "B", attached hereto.
Earned Commission - defined in Paragraph 5. of this Agreement.
Net Processed Volume - means the sum of Sales prices on processed Contracts
entered into by Sales Entity on behalf of PEC meeting the Conforming Sales
Criteria, less any authorized discounts and/or authorized waivers of interest or
other fees to be charged to a customer(s) pursuant to the terms and conditions
of a Contract.
Recovery(ies) -means deduction by PEC of any amounts due pursuant to Paragraph
6. of this Agreement from the next payable Advance Against Commission due to
Sales Entity.
Rent - means $40.00 per unit per night at PEC's Timeshare resort located in
Orlando, Florida.
Reserve Account - means a non-segregated account maintained by PEC in which the
percent of Net Processed Volume set forth in Exhibit "A", attached hereto, shall
be held to cover the cost of Contract cancellations following Termination Date.
Sale(s) - means sales of PEC's Timeshare products at the Sales Office as
evidenced by a Contract.
Sales Commission(s) - means commissions paid on Sales in accordance with Exhibit
"A" attached hereto. Sales Commissions are determined on Net Processed Volume
for Contracts meeting Conforming Sales Criteria, are subject to Recovery, and
are not earned until such time as a Sale Commission becomes an Earned
Commission.
Sales Commission Schedule - means the schedule of Sales Commissions shown on
Exhibit "A" attached hereto.
State - means the state of Florida.
Timeshare(s) - means Preferred Equities Corporation's and its subsidiaries'
timeshare products registered in Florida.
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EXHIBIT "A"
SALES COMMISSION SCHEDULE
A. Sales Commission Rate
Upon PEC approving a Contract entered into by Sales Entity on behalf of PEC,
Sales Entity, subject to Recovery, will receive a Sales Commission of
forty-eight percent (48%) of the Net Processed Volume of each Contract.
B. Payment of Sales Commissions
Sales Commissions will be paid in accordance with the following schedule:
1. Thirty percent (30%) of Net Processed Volume of a Contract will be
paid to Sales Entity as an Advance Against Commission on the Friday
following the week in which the rescission period for a Contract has
passed and PEC has processed the Contract;
2. Fifteen percent (15%) of Net Processed Volume of a Contract will be
paid to Sales Entity as an Advance Against Commission on the 15th day
of the month following receipt and posting of the first Contract
payment;
3. On the 15th day of the month following receipt and posting of the
second Contract payment, three percent (3%) of the Net Processed Volume
of a Contract will be deposited in a Reserve Account until such time as
a minimum balance of such Reserve Account, initially set at $90,000.00
("Minimum Balance") is attained and maintained. At all times that the
Reserve Account contains the Minimum Balance, the three percent (3%) of
the Net Processed Volume will be paid to Sales Entity after the receipt
and posting by PEC of the second Contract payment.
C. All Sales Commissions will be paid to Sales Entity via wire transfer to
Nations Bank N.A. Florida, account number 003661096900, routing number
000000000, at Sales Entity's expense to be deducted from Advances Against
Commissions.
D. All Sales Commissions paid or payable to Sales Entity are subject to
Recovery until such time as Sales Commissions become Earned Commissions.
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EXHIBIT "B"
CONFORMING SALES CRITERIA
A. Documents Required.
The following documents for each Contract must be completed by Sales
Entity:
1. Contract;
2. Notice of Nonrepresentation (Agency Disclosure);
3. Receipt for Public Offering Statement;
4. Purchaser's Understanding & Acknowledgement form;
5. Credit Application for Membership;
6. Floor Plan;
7. W-9 for US citizens; W-8 for foreign citizens;
8. HUD Documents, including Good Faith Estimate, Servicing
Disclosure Statement, Settlement Statement;
9. Verification Sheet;
10. Mortgage, if applicable;
11. Note, if applicable;
12. RBC Card Application, if applicable; and
13. RCI Application, if applicable.
The documents that are necessary to complete a Contract evidencing a Sale vary
from time to time; therefore, it is the responsibility of Sales Entity to
understand and complete the appropriate paperwork required in and by the State
of Florida.
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B. Contract Term.
10 Years on financed balances over $10,000
8 Years (any balance)
7 Years (any balance)
5 Years (any balance)
3 Years (any balance)
1 Year (Associate Program)
C. Payments and Interest Rates.
7, 8 and 10 year terms 10% Down Payment 15.5% Interest
15% Down Payment 14.5% Interest
20% Down Payment 14.0% Interest
25% Down Payment 13.5% Interest
5 year terms 10% Down Payment 14.5% Interest
15% Down Payment 14.0% Interest
20% Down Payment 13.5% Interest
25% Down Payment 13.0% Interest
3 year terms 50% Down Payment 5.0% Interest
The minimum acceptable monthly payment on any Contract is $60.00 per month.
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D. Discounts.
1. Up to a five percent (5%) discount is allowed on new sales
only (not upgrades) for existing timeshare owners with RCI or
II affiliation; Camp Coast to Coast members; Ramada Business
Card holders; Cendant affiliated frequent traveler programs;
AARP members and AAA members. A memo outlining specifically
how a new Contract qualifies, with proof attached, is required
to obtain this discount. Sales Commissions will be held until
the memo is accepted by Sales Management.
2. There is NO discount for an all cash payment; however, an
owner who pays off a credit balance in full prior to the first
due date will not be charged interest.
E. Rescission Rights.
The rescission period is defined by Florida statute. Deviation from the
State-mandated rescission period cannot be waived.
F. Payment of Certain Fees.
The payment of maintenance fees, document preparation fees and/or RCI
dues cannot be waived.
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