SERVICE AGREEMENT
This Service Agreement ("Agreement") is made and entered into
on this 12th day of September, 1995 ("Effective Date") between Orangemen Club
Limited Partnership, a New York limited partnership ("Owner") and Hotel
Syracuse, Inc., a New York Corporation ("Servicer").
ARTICLE 1
THE PROJECT
Section 1.01. The Project. The subject matter of this Agreement is the
rendering of services, as set forth below, from Servicer to Owner at a timeshare
project located on floors 7,8, and 9 of the Hotel Syracuse ("Project").
ARTICLE 2
TERM
Section 2.01. Opening Date. Owner shall open the Project to solicit the
public to purchase timeshare intervals as soon as practicable after the offering
plan for the Project has been accepted by and approval granted by the State of
New York ("Opening Date").
Section 2.02. Term. The term shall commence on the Opening
Date and continue until December 31, 2044 ("Term").
Section 2.03. Extension of Term. The Term of this Agreement
may be extended upon mutual consent by both parties hereto.
ARTICLE 3
SERVICER'S OBLIGATIONS
Section 3.01. Servicer's Obligations. Servicer shall, on
behalf of Owner perform the following services:
(a) Provide appropriate rent free space for marketing and sales
activities as well as a Project member's service desk. A description of the
spaces to be provided hereunder is set forth on Exhibit 3.01.(a).
(b) Provide housekeeping and maintenance services for the Project, as
set forth on Exhibit 5.01.
(c) Provide Project members, timeshare tours, and Interval
International ("I.I.") exchange guests with the same day-use privileges,
afforded to in-house Hotel Syracuse guests, on an ongoing basis. For example,
use of the swimming pool and fitness center as well as food and beverage
discounts, consistent with other projects affiliated with Owner's general
partner.
(d) Provide the use of 15 mid-week rooms and 30 weekend rooms on the
Hotel Syracuse's recently renovated 3rd floor and 6th floor for overnight tour
use until the renovation of the Project has been completed. The Owner shall pay
the airline contract rate for the use of these rooms, as it may vary from time
to time. The current rate is set forth in Exhibit 5.01. All guest rooms not used
by the Owner shall be returned to the Hotel Syracuse's available room inventory
with at least twenty four (24) hours notice, without required payment or penalty
to the Owner.
(e) Place the Project renovated rooms into the Hotel Syracuse inventory
and rent them on an equal basis (when compared to all other available guest
rooms in the Hotel Syracuse) at the highest rate acceptable within the market
place.
(f) Subject to availability and scheduling, provide the use of Coach
MacPherson to assist the marketing and sales functions on behalf of the Owner as
follows:
(1) Assistance in the identification and sales of Tier
One prospects.
(2) Conducting podium presentations in selected, season
ticket holder home markets.
(3) To introduce and act as a liaison between the Owner and
the Syracuse University athletic department, chancellors office, office of
development affairs, alumni office, etc.
(4) To autograph direct mail and make personal
appearances
(5) To sit on the Owner's advisory board.
(6) To authorize photographs and memorabilia and to give
testimonials.
(g) Use its influence to assist the Owner with the negotiation of the
I.I. Agreement.
(h) Provide utility services to the Project.
Section 3.02. Personnel. Servicer shall be the sole judge of the
fitness and qualification of all personnel working for the Servicer at the
Project ("Servicer's Project Personnel") and shall have the sole and absolute
right to hire, supervise, order, instruct, discharge and determine the
compensation, benefits and terms of employment of all Servicer's Project
Personnel. As it relates to the performance of services hereunder by the
Servicer, Owner shall have the right to consult with Servicer and comment upon
the fitness and qualification of Servicer's Project Personnel. All Servicer's
Project Personnel shall be employees of Servicer. Servicer shall also have the
right to use employees of Servicer, Servicer's parent and subsidiary and
affiliated companies, not located at the Project to provide services to the
Project ("Off-Site Personnel"). All expenses, costs (including, but not limited
to, salaries, benefits and severance pay), liabilities and claims which are
related to Servicer's Project Personnel and Off-Site Personnel shall be paid by
Servicer.
Section 3.03. Hotel Policies. Servicer shall determine the terms of
guest admittance to the Hotel Syracuse, establish room rates, and use of rooms
for commercial purposes.
Section 3.04. Operating Statement. Servicer shall prepare and furnish
Owner, on or before the twentieth (20th) day of the fiscal month immediately
following the close of a fiscal month, with a detailed operating statement
setting forth the results of the Project's operations as they relate to the
services provided herein. Within ninety (90) days after the end of each fiscal
year, Servicer shall furnish Owner with a detailed operating statement setting
forth the results of the Project's operations for the fiscal year.
Section 3.05. Accounting Standards. Servicer shall maintain the books
and records reflecting the operations of the Project as they relate to the
services provided herein in accordance with the accounting practices of Servicer
in conformity with generally accepted accounting practices consistently applied
and shall adopt and follow the fiscal accounting periods utilized by Servicer in
its normal course of business. The Project level generated accounting records
reflecting detailed day-to-day transactions of the Project's operations, shall
be kept by Servicer at the Project or at Servicer's corporate headquarters, or
at such other location as Servicer shall reasonably determine.
Section 3.06. Permits and Licenses. Servicer shall assist Owner in
obtaining the various permits and licenses required to operate the Project in
accordance with the terms of this Agreement.
Section 3.07. Owner Meetings. The Servicer shall meet with Owner
monthly, or more often if required, to review and discuss the previous and
future month's operating statement, cash flow, budget, capital expenditures,
important personnel matters and the general concerns of Owner and Servicer
("Monthly Meeting"). Except to the extent otherwise mutually agreed upon by
Owner and Servicer, all Monthly Meetings shall be held at the Project.
ARTICLE 4
OWNER'S OBLIGATIONS
Section 4.01. Owner's Obligations. During the Term, Owner
shall have the obligations set forth below:
(a) Limited Partnership Agreement. Owner shall comply with all the
terms and conditions of the Limited Partnership Agreement ("LP Agreement") and
keep the LP Agreement in full force and effect from the Effective Date through
the remainder of the Term. Nothing in this Agreement shall be interpreted in a
manner which would relieve Owner of any of its obligations under the LP
Agreement;
(b) Licenses and Permits. Owner shall obtain and maintain, with
Servicer's assistance and cooperation, all governmental permissions, licenses
and permits necessary to enable Servicer to operate the Project in accordance
with the terms of this Agreement and the LP Agreement;
(c) Insurance. Owner shall procure and maintain throughout the Term
appropriate insurance coverage on the Project;
(d) Operating Funds. Owner shall provide all funds necessary to operate
the Project in accordance with the terms of this Agreement and the LP Agreement;
(e) Capital Funds. Owner shall expend such amounts for renovation
programs, furnishings, equipment and ordinary Project capital replacement items
as are required from time to time to (a) maintain the Project in good order and
repair; (b) comply with the standards referred to in the LP Agreement; and (c)
comply with governmental regulations and orders;
(f) Payments to Servicer. Owner shall promptly pay to Servicer all
amounts due Servicer under this Agreement;
(g) Owner's Representative. Owner shall appoint a representative to
represent Owner in all matters relating to this Agreement and/or the Project
("Owner's Representative"). Servicer shall have the right to deal solely with
the Owner's Representative on all such matters. Servicer may rely upon
statements and representations of Owner's Representative as being from and
binding upon Owner. Owner may change its Owner's Representative from time to
time by providing written notice to Servicer. Owner shall cause the Owner's
Representative to attend all Monthly Meetings; and,
(h) Quiet and Peaceable Service. Owner shall ensure that Servicer is
able to peaceably and quietly service the Project in accordance with the terms
of this Agreement, free from molestation, eviction and disturbance by Owner or
by any other person or persons claiming by, through or under Owner. Owner shall
undertake and prosecute all reasonable and appropriate actions, judicial or
otherwise, required to assure such quiet and peaceable operations by Servicer.
ARTICLE 5
SERVICE FEE
Section 5.01. Service Fee. On the fifteenth (15th) day of each fiscal
month after the Opening Date, Servicer shall be entitled to receive and shall be
paid a fee for services provided herein in the (i) amount set forth on Schedule
5.01. and (ii) amount equal to four percent (4%) of the gross revenue generated
from the converted guest room rentals (floors 7,8 and 9) at the Project. The
parties agree that the fee paid to Servicer pursuant to subsection (i) shall be
adjusted annually to correspond with relative increases in the consumer price
index.
ARTICLE 6
CLAIMS AND LIABILITY
Section 6.01. Claims and Liability. Owner and Servicer mutually agree
for the benefit of each other to look only to the appropriate insurance
coverages in effect pursuant to this Agreement in the event any demand, claim,
action, damage, loss, liability or expense occurs as a result of injury to
person or damage to property regardless whether any such demand, claim, action,
damage, loss, liability or expense is caused or contributed to, by or results
from the negligence of Owner or Servicer or their subsidiaries, affiliates,
employees, directors, officers, agents or independent contractors and regardless
whether the injury to person or damage to property occurs in and about the
Project or elsewhere as a result of the performance of this Agreement.
Section 6.02. Survival. The provisions of this Article 6 shall survive
any cancellation, termination or expiration of this Agreement and shall remain
in full force and effect until such time as the applicable statute of limitation
shall cut off all demands, claims, actions, damages, losses, liabilities or
expenses which are the subject of the provisions of this Article.
ARTICLE 7
CLOSURE, EMERGENCIES AND DELAYS
Section 7.01. Events of Force Majeure. If at any time during the Term
of this Agreement it becomes necessary, in the Owner's or Servicer's opinion, to
cease operation of the Project or the Hotel Syracuse respectively in order to
protect the health, safety and welfare of the members, guests and/or employees
of the Project or the Hotel Syracuse for reasons beyond the reasonable control
of the Owner or Servicer, such as, but not limited to, acts of war,
insurrection, civil strife and commotion, labor unrest, governmental regulations
and orders, shortage or lack of adequate supplies or lack of skilled or
unskilled employees, contagious illness, catastrophic events or acts of God
("Force Majeure"), then in such event or similar events Owner or Servicer may
close and cease operation of all or any part of the Project or the Hotel
Syracuse, reopening and commencing operation when Owner or Servicer deems that
such may be done without jeopardy to the Project or the Hotel Syracuse, the
members, guests and employees.
Servicer and Owner agree, except as otherwise provided herein, that the
time within which a party is required to perform an obligation under this
Agreement shall be extended for a period of time equivalent to the period of
delay caused by an event of Force Majeure.
ARTICLE 8
CONDEMNATION AND CASUALTY
Section 8.01. Condemnation. If the Project is taken in any eminent
domain, expropriation, condemnation, compulsory acquisition or similar
proceeding by a competent authority, this Agreement shall automatically
terminate as of the date of taking or condemnation. Any compensation for the
taking or condemnation of the physical facility comprising the Project shall be
paid to Owner. Servicer, however, with the full cooperation of Owner, shall have
the right to file a claim with the appropriate authorities for the loss of
service fee income for the remainder of the Term and any extension thereof
because of the condemnation or taking. If only a portion of the Project is so
taken and the taking does not make it unreasonable or imprudent, in Servicer's
and Owner's opinion, to operate the remainder as a Project of the type
immediately preceding such taking, this Agreement shall not terminate. Any
compensation shall be used, however, in whole or in part, to render the Project
a complete and satisfactory architectural unit of the same type and class as it
was immediately preceding such taking or condemnation.
Section 8.02. Casualty. In the event of a fire or other casualty, Owner
shall comply with the terms of the LP Agreement and this Agreement.
ARTICLE 9
TERMINATION RIGHTS
Section 9.01. Bankruptcy and Dissolution. If either party is
voluntarily or involuntarily dissolved or declared bankrupt, or insolvent, or if
a company enters into liquidation whether compulsory or voluntary otherwise than
for the purpose of amalgamation or reconstruction, or compounds with its
creditors, or has a receiver appointed over all or any part of its assets, or
passes title in lieu of foreclosure, the other party may terminate this
Agreement immediately upon serving notice to the other party, without liability
on the part of the terminating party.
Section 9.02. Breach. If either party, during the Term of this
Agreement, commits a breach of this Agreement by failing to keep, perform or
observe any covenant, obligation or agreement required to be kept, performed or
observed by such party under the terms of this Agreement, and the defaulting
party fails to remedy or correct such breach within thirty (30) days after
receipt of notice of such breach from the non-defaulting party, then the
non-defaulting party may terminate this Agreement, without prejudice to its
right to seek damages or other remedies available to it at law or in equity, at
the expiration of such thirty (30) day period; provided, however, that if the
breach is non-monetary and is of a nature that it cannot reasonably be remedied
or corrected within such thirty (30) day period, then such thirty (30) day
period shall be deemed to be extended for such additional period as may
reasonably be required to remedy or correct the same if the party committing the
breach promptly commences to remedy the breach upon receipt of the other party's
notice and continues therewith with due diligence.
Section 9.03. Employment Solicitation Restriction Upon Termination. The
parties agree that neither they nor their affiliates, subsidiaries, or their
successors shall solicit the employment of any employee of the other at any time
during the term of this Agreement without the other's prior written approval.
ARTICLE 10
GENERAL PROVISIONS
Section 10.01. Authorization. Owner and Servicer represent and warrant
to each other that their respective corporations have full power and authority
to execute this Agreement and to be bound by and perform the terms hereof. On
request, each party shall furnish the other evidence of such authority.
Section 10.02. Relationship. Servicer and Owner shall not be construed
as joint venturers or partners of each other by reason of this Agreement and
neither shall have the power to bind or obligate the other except as set forth
in this Agreement.
Section 10.03. Further Actions. Owner and Servicer agree to execute all
contracts, agreements and documents and to take all actions necessary to comply
with the provisions of this Agreement and the intent hereof.
Section 10.04. Successors and Assigns. Owner's consent shall not be
required for Servicer to assign any of its rights, interests or obligations as
Servicer hereunder to any parent, subsidiary or affiliate of Servicer provided
that any such assignee agrees to be bound by the terms and conditions of this
Agreement. The acquisition of Servicer or its parent company by a third party
shall not constitute an assignment of this Agreement by Servicer and this
Agreement shall remain in full force and effect between Owner and Servicer.
Except as herein provided, Servicer shall not assign any of its obligations
hereunder without the prior written consent of Owner, which shall not be
unreasonably withheld or delayed. Owner shall be deemed to have consented to
such an assignment of this Agreement if Owner has not notified Servicer in
writing to the contrary within fifteen (15) days after Owner has received
Servicer's request for Owner's consent to an assignment. Servicer shall have the
right to pledge or assign its right to receive the service fees hereunder
without the prior written consent of Owner. In the event of any such pledge or
assignment, Owner shall have no right of set off, counterclaim or defense of
payment against assignee. Owner's sole remedy for breach of Servicer's
obligations under this Agreement shall be suit for damages or specific
performance against Servicer.
Owner shall have the right to assign this Agreement to the person or
entity which has obtained title to the Project. Except as hereinabove provided,
Owner shall not have the right to assign this Agreement.
Section 10.05. Notices. All notices or other communications provided
for in this Agreement shall be in writing and shall be either hand delivered,
delivered by certified mail, postage prepaid, return receipt requested,
delivered by an overnight delivery service, or delivered by facsimile machine
(with an executed original sent the same day by an overnight delivery service),
addressed to the respective party. Notices shall be deemed delivered on the date
that is four (4) calendar days after the notice is deposited in the U.S. mail
(not counting the mailing date) if sent by certified mail, or, if hand
delivered, on the date the hand delivery is made, or if delivered by facsimile
machine, on the date the transmission is made. If given by an overnight delivery
service, the notice shall be deemed delivered on the next business day following
the date that the notice is deposited with the overnight delivery service.
Section 10.06. Waivers. No failure or delay by Servicer or Owner to
insist upon the strict performance of any covenant, agreement, term or condition
of this Agreement, or to exercise any right or remedy consequent upon the breach
thereof, shall constitute a waiver of any such breach or any subsequent breach
of such covenant, agreement, term or condition. No covenant, agreement, term, or
condition of this Agreement and no breach thereof shall be waived, altered or
modified except by written instrument. No waiver of any breach shall affect or
alter this Agreement, but each and every covenant, agreement, term and condition
of this Agreement shall continue in full force and effect with respect to any
other then existing or subsequent breach thereof.
Section 10.07. Changes. Any change to or modification of this Agreement
including, without limitation, any change in the application of this Agreement
to the Project, must be evidenced by a written document signed by both parties
hereto.
Section 10.08. Captions. The captions for each Article and Section are
intended for convenience only.
Section 10.09. Severability. If any of the terms and provisions hereof
shall be held invalid or unenforceable, such invalidity or unenforceability
shall not affect any of the other terms or provisions hereof. If, however, any
material part of a party's rights under this Agreement shall be declared invalid
or unenforceable, (specifically including Servicer's right to receive its
service fees) the party whose rights have been declared invalid or unenforceable
shall have the option to terminate this Agreement upon thirty (30) days written
notice to the other party, without liability on the part of the terminating
party.
Section 10.10. Interest. Any amount payable to Servicer or Owner by the
other which has not been paid when due shall accrue interest at two percentage
points (2%) over the published base rate of interest charged by Citibank, N.A.,
New York, New York, to borrowers on ninety (90) day unsecured commercial loans,
as the same may be changed from time to time.
Section 10.11. Third Party Beneficiary. This Agreement is exclusively
for the benefit of the parties hereto and it may not be enforced by any party
other than the parties to this Agreement and shall not give rise to liability to
any third party other than the authorized successors and assigns of the parties
hereto.
Section 10.12. Brokerage. Servicer and Owner represent and warrant to
each other that neither has sought the services of a broker, finder or agent in
this transaction, and neither has employed, nor authorized, any other person to
act in such capacity. Servicer and Owner each hereby agrees to indemnify and
hold the other harmless from and against any and all claims, loss, liability,
damage or expenses (including reasonable attorneys' fees) suffered or incurred
by the other party as a result of a claim brought by a person or entity engaged
or claiming to be engaged as a finder, broker or agent by the indemnifying
party.
Section 10.13. Survival of Covenants. Any covenant, term or provision
of this Agreement which, in order to be effective, must survive the termination
of this Agreement, shall survive any such termination.
Section 10.14. Estoppel Certificate. Servicer and Owner agree to
furnish to the other party, from time to time upon request, an estoppel
certificate in such reasonable form as the requesting party may request stating
whether there have been any defaults under this Agreement known to the party
furnishing the estoppel certificate and such other information relating to the
Project as may be reasonably requested.
Section 10.15. Other Agreements. Except to the extent as may now or
hereafter be specifically provided, nothing contained in this Agreement shall be
deemed to modify any other agreement between Owner and Servicer with respect to
the Project or any other property.
Section 10.16. Periods of Time. Whenever any determination is to be
made or action is to be taken on a date specified in this Agreement, if such
date shall fall on a Saturday, Sunday or legal holiday under the laws of the
state of New York, then in such event said date shall be extended to the next
day which is not a Saturday, Sunday or legal holiday.
Section 10.17. Preparation of Agreement. This Agreement shall not be
construed more strongly against either party regardless of who is responsible
for its preparation.
Section 10.18. Exhibits. All exhibits attached hereto are incorporated
herein by reference and made a part hereof as if fully rewritten or reproduced
herein.
Section 10.19. Jurisdiction. The parties to this Agreement agree that
in the event any legal action is commenced hereunder, personal jurisdiction and
venue shall be in the Supreme Court for the State of New York for the County of
Onondaga.
Section 10.20. Attorneys' Fees and other Costs. The parties to this
Agreement shall bear their own attorneys' fees in relation to negotiating and
drafting this Agreement. Should Owner or Servicer engage in litigation to
enforce their respective rights pursuant to this Agreement, the prevailing party
shall have the right to indemnity by the non-prevailing party for an amount
equal to the prevailing party's reasonable attorneys' fees, court costs and
expenses arising therefrom.
IN WITNESS WHEREOF, the parties set their hands the date above first
written.
ORANGEMEN CLUB LIMITED
PARTNERSHIP HOTEL SYRACUSE, INC.
By its General Partner
SYRACUSE PROJECT INCORPORATED
By: /S/ XXXXXX X. XXXXXXX By: /S/ ILLEGIBLE
----------------------------- ------------------------
Title: Chairman Title: President
EXHIBIT 3.01(a)
OFFICE SPACE
Pursuant to Section 3.01(a), the Servicer shall provide Owner with the following
described space at the Hotel Syracuse:
1. Sales Office
2. Service Desk
3. Telemarketing Office
4. Such other space as may be mutually agreed upon for signage and the like. The
parties agree that any signage placed in the areas set forth herein or in the
Hotel is subject to the express permission of the Hotel Syracuse, Inc., which
permission shall not be unreasonably withheld.
EXHIBIT 5.01.
FEES & SERVICES
1. Administrative Fee. The fee referred to in Section 5.01.(ii)
is in an amount equal to four percent (4%) of the gross
revenue generated from the converted guest room rentals
(floors 7, 8 and 9) at the Project. The services included
are: the administration of the reservation function, the
check-in and check-out at the front desk, supplying van
drivers and xxxx staff. In addition, the fee shall include
security, use of pool and pool attendants, and use of all
guest facilities customarily enjoyed by Hotel Syracuse guests.
2. Guest Room Incidentals. All guest room incidentals shall be
charged to the guest room on a consumption basis. Each room
must set up credit for these charges on par with other Hotel
Syracuse guests. These charges must be settled at the time of
check-out. Incidentals include pay TV, movies, telephone
usage, room service, food and beverage charges, laundry and
dry cleaning, and all other charges which are customarily
billed to Hotel Syracuse guests.
3. Housekeeping. The first year's cost for housekeeping shall be
$18.50/day/room. The services provided for housekeeping are:
room cleaning, linen and xxxxx laundering, garbage disposal,
and guest amenities.
4. Maintenance. Requested maintenance shall be billed at the
rate of $15.00/hour for labor plus the actual costs for
materials.
5. Utilities. Owner shall pay for utilities in an amount based
on the square footage of the Project and the sales area at the
prevailing rate. The payment for utilities shall not commence
until the Project and sales areas are operational.
6. `Cost to Book'. If a reservation is booked through Radisson, a six
percent (6%) reservation fee shall be charged. If a reservation is
booked through a travel agent, a ten percent (10%) fee shall be
charged. If a reservation is booked through both Radisson and a travel
agent, a sixteen percent (16%) fee shall be charged. Direct call-ins
shall have no fee.
7. Parking. The current cost is three dollars ($3.00)/day/room.
8. Airline Rate. The current rate is $32.00.
