PROPERTY MANAGEMENT AGREEMENT
THIS AGREEMENT, dated _________________, 1996 is by and
between CHARTHOUSE SUITES VACATION OWNERSHIP, INC., a Florida
corporation ("Charthouse") and DECADE PROPERTIES, INC., a
Wisconsin corporation ("DPI").
WHEREAS, Charthouse acquired a license to use, on the terms
and conditions of the license, a hotel comprised of 25 hotel
rooms located in Clearwater, Florida, known as Charthouse Suites
hotel (the "Property"). In connection with the offering of
Vacation Investment and Ownership Interests in the Charthouse,
Charthouse desires to retain DPI to manage the Property on behalf
of Charthouse and the holders of Charthouse Suites Vacation
Investment and Ownership Interests ("Interests") on the terms and
for the compensation set forth below.
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
1. Appointment and Acceptance. Charthouse hereby appoints
and retains DPI to perform the services set forth herein, and DPI
hereby accepts such appointment and employment, subject to the
conditions of this Agreement.
2. Efforts and Conflicts. DPI agrees to use commercially
reasonable and continual efforts to fulfill its obligations
hereunder. Charthouse acknowledges that DPI has been, is, and
will be engaged to perform duties for other entities, including
affiliates of Charthouse and DPI that are similar to those duties
to be performed under this Agreement. Charthouse further
acknowledges that it has no exclusive right to DPI's services.
3. Term of Agreement. This Agreement shall remain in full
force and effect until December 31, 2050. The parties agree that
DPI would not have entered into the Master License Agreement with
Charthouse or created the Charthouse Suites Vacation License Plan
unless this Agreement was entered into for the entire term and,
moreover, DPI would not enter into this Agreement for a lesser
term.
4. Compensation. For services rendered hereunder,
Charthouse shall pay to DPI an amount equal to $2,500 a month
plus reimbursement of its costs. The monthly management fee
amount will be increased on the first day of each year (beginning
January 1, 1997) by the annual increase in the Consumer Price
Index ("CPI") over the previous year, as reported by the
Department of Labor. The parties agree to select another
comparable index, if the Department of Labor ceases to publish
the CPI index.
5. DPI's Authority, Duties and Obligations. During the
term of this Agreement, DPI shall provide the following services
and, in the performance of such services, shall have the
authority indicated to act as agent on behalf of Charthouse:
(a) To manage the Property, including the provision of
services necessary for the maintenance and operation of the
Property customarily performed by managing agents of similar
properties;
(b) To keep the Property in good condition and repair
including, without limitation, interior and exterior
decorating, painting, plumbing, heating, and ventilating
systems, and carpeting; to make or cause to be made and to
supervise repairs and alterations on Charthouse's behalf
required by normal wear and tear; to purchase supplies,
equipment and services and pay all related bills. DPI
agrees to secure the prior approval of Charthouse on all
expenditures in excess of $1,000 for any one item, except
monthly or recurring operating charges and/or emergency
repairs in excess of such maximum if, in the opinion of DPI,
such repairs are necessary to protect the Property from
damage, or to maintain services to the holders of Interests
or their hotel guests.
(c) To hire, discharge and supervise all employees and
independent contractors.
(d) To borrow money in the name of Charthouse provided such
funds are used exclusively for payment of expenses related
to the Property.
(e) To make contracts for electricity, gas, fuel, water,
telephone, vermin extermination, window cleaning, sweeping,
cleaning, ash or rubbish hauling and other services or such
of them as DPI shall deem advisable in is reasonable
opinion.
(f) To carry at Charthouse's expense necessary public
liability insurance with a minimum limit of $1,000,000 in
coverage and workmen's compensation insurance adequate to
protect the interests of the parties hereto; which policies
shall, if possible, be so written as to protect DPI in the
same manner and to the same extent they protect Charthouse
and will name DPI as an additional insured under the policy;
and acquire fire, liability, burglary and theft, steam
boiler, pressure, or any other appropriate insurance.
(g) To pay, on behalf and at the direction of Charthouse,
indebtedness relating to DPI and operating expenses.
(h) To follow the directions of any consultants retained by
Charthouse for the establishment of DPI's procedures and
controls.
(i) To bond by a fidelity bond all of DPI's employees who
are responsible for the handling of money for Charthouse.
(j) To pay all taxes and special assessments for public
improvements now or hereafter assessed or levied against and
on the Property as they become due. Payments may be made in
installments as permitted by the municipality.
(k) To pay all costs of data processing and/or computer
processing charges in connection with the accounting and
controls established by Charthouse or the holders of
Interests.
(l) To maintain and operate the Property, including,
without limitation, repairmen, gardeners, janitors, security
personnel, electricians, and carpenters, provided that DPI
shall not be responsible for the actions and omissions of
such personnel and contractors.
(m) To perform such other services as may be reasonably
directed by Charthouse in the diligent management of the
Property.
(n) DPI shall comply with all laws, rules, and regulations
applicable to the performance of its obligations under this
Agreement. DPI shall take such action as shall be necessary
to comply promptly with all orders and requirements
affecting the Property or the performance of its obligations
and activities under this Agreement from any governmental
entity having jurisdiction over the Property or DPI's
activities with respect to the Property. Notwithstanding
the foregoing to the contrary, DPI shall not take compliance
action under this subparagraph if Charthouse requests DPI in
writing to contest any such order or requirement and agrees
to reimburse DPI for all fees and expenses incurred by DPI
in connection with such contest. Upon such request and
agreement, DPI shall use its best efforts to contest such
order or requirement. DPI shall obtain reimbursement for
all fees and costs incurred in connection with such contest
from Charthouse.
6. Records and Reports. DPI will furnish such information
(including occupancy reports) as may be requested by Charthouse
from time to time with respect to the financial, physical or
operational condition of the Property.
7. Reimbursement of Expenses. In addition to the
compensation payable under Paragraph 4, Charthouse shall
reimburse DPI for the costs including all goods, materials and
services used for or by Charthouse, and for all expenses of DPI
on behalf of Charthouse and directly relating to the prudent
operation of the Property and all services provided to residents
or licensees of the Property, including site bookkeeping services
and operating the Charthouse rental pool. In the case of
services performed by employees of DPI, the reimbursable costs
shall be based upon consideration of the time actually spent by
such employees in performing such services as supported by time
records multiplied by a rate established by DPI to cover the
costs directly related to the employment of such persons;
however, such amounts charged to Charthouse will not exceed those
which Charthouse generally would be required to pay to
independent parties for comparable services in the area in which
the Property is located. The amount of reimbursable expenses
shall not include amounts for time spent by the President of DPI.
8. Termination. The parties hereby agree that an integral
component of the Charthouse Suites Vacation License Plan and this
Agreement is the right of DPI to manage the Property pursuant to
this Agreement. As a result, the parties agree that DPI can only
be terminated for cause and then upon the entire payment in cash
to DPI by the successor, the third party or Charthouse of the
present value amount of the future compensation to be paid to the
Charthouse under this Agreement. For purposes of calculating the
present value amount, the parties agree to use a 8% discount rate
over the remaining term of this Agreement.
9. Entire Agreement, Amendments. This Agreement
constitutes the entire understanding between the parties hereto
with respect to the subject matter hereof. The rights and
obligations specified herein are intended to be construed as
separate and independent from any other prior, contemporaneous or
subsequent agreements among the parties hereto. No amendment or
modification of the Agreement will be valid unless made by
supplemental agreement in writing.
10. Assignability. The rights under this Agreement may be
assigned and the duties hereunder may be delegated by DPI without
the consent of Charthouse provided that such delegation shall not
relieve DPI of its obligations to Charthouse hereunder.
11. Severability. If any provision of this Agreement shall
be held to be invalid, unenforceable or illegal in any
jurisdiction under any circumstances for any reason, (i) such
provision shall be reformed to the minimum extent necessary to
cause such provision to be valid, enforceable and legal and
preserve the original intent of the parties, or (ii) if such
provision cannot be so reformed, such provision shall be severed
from this Agreement. Such holding shall not affect or impair the
validity, enforceability or legality of such provision in any
other jurisdiction or under any other circumstances. Neither
such holding nor such reformation or severance shall affect or
impair the legality, validity or enforceability of any other
provisions of this Agreement to the extent that such other
provision is not itself actually in conflict with any applicable
law.
12. Choice of Law. This Agreement shall, in all respects,
be governed by, and construed in accordance with, the internal
laws of the State of Florida.
13. Titles and Headings. All titles and headings have been
inserted solely for the convenience of the parties and are not
intended to be a part of this Agreement or to affect its meaning
or interpretation.
DECADE PROPERTIES, INC. CHARTHOUSE SUITES VACATION
OWNERSHIP, INC.
By: __________________________ By: __________________________
Xxxxxxx Xxxxxxxxxx, Xxxxxxx Xxxxxxxxxx,
President President
