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4-B Rental Pooling and Agency Agreement
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RENTAL POOLING AND AGENCY AGREEMENT
THIS AGREEMENT, dated this day of ___________, 19__, is between
WILDERNESS DEVELOPMENT CORPORATION, a Wisconsin corporation, (the "Company") and
the condominium unit owner whose name and address are set forth below ("Owner",
or one of the "Owners" when referred to collectively with all of the condominium
unit owners that have entered or will enter into this Agreement with the
Company).
RECITALS
WHEREAS, Owner has purchased a certain condominium unit known as Unit
#_______ of the Wilderness Hotel Condominium (the "Unit", or one of the "Units"
when referred to collectively with all of the condominium units to be operated
by the Company pursuant to this Agreement), including an undivided interest in
certain common elements, in a portion of a resort known as Wilderness Hotel &
Resort (the "Wilderness Hotel & Resort"), in Sauk County, Wisconsin, which
houses 133 hotel condominium units (the "Condominium Hotel Project"). Owner
desires to have the Unit managed as a hotel condominium unit by the Company when
Owner is not personally occupying the Unit, which personal use is subject to the
terms of this Agreement. The purpose of this Agreement is to provide for the
proper rental and management of the Unit(s) in connection with the Company's
and/or its affiliate companies' (as defined herein), operation of the entire
Wilderness Hotel & Resort as a resort hotel; and to accommodate this objective
each initial Owner of a Unit is required to enter into this Rental Pooling and
Agency Agreement (the "Agreement") in connection with his/her purchase of a
Unit; and
WHEREAS, the Owner(s) desire to place the Unit in one of seven (7)
different rental pools (the "Rental Pools") segregated pursuant to the Unit
type, as described herein. The Units which comprise each Rental Pool are to be
operated and managed by the Company. The parties hereto desire this Agreement to
establish the seven (7) Rental Pools.
AGREEMENT
In consideration of the foregoing and the mutual covenants contained
herein, the sufficiency of which is hereby acknowledged, the parties agree as
follows:
ARTICLE 1
Creation, Management and Control of the Rental Pools
1.1 Description Of The Rental Pool.
Each Owner and all Transferees of a Unit shall be required to enter
into this Agreement. By the execution of this Agreement, the Company is hereby
appointed agent and attorney-in-fact for the Owner(s) in the rental operation
and management of the Owner's Unit as a hotel accommodation. Under this
Agreement the Owners will share in the net rental income from the rental of all
of the Units participating in that Unit's Rental Pool ("Net Rental Income") .
There are seven (7) specific Rental Pools in the Hotel Condominium Project. Each
individual Rental Pool is made up of similar Units and each Rental Pool is more
particularly described below:
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NAME OF TYPE OF Number of Units in Rental Pool Description
POOL UNIT IN
POOL
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Pool A A, A-1 38 One Room
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Pool B B, B-1 19 One Room/Loft
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Pool C C, C-1 40 One Bedroom
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Pool D D, D-1 20 One Bedroom/Loft
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Pool E E 8 Master Bedroom
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Pool F F 4 Three
Bedroom/Loft
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Pool G G/H 4 One/Two
Bedroom(s)
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1.2 Agency. Owner hereby appoints the Company his exclusive agent for
the proper rental, management and operation of the Unit(s) and the Rental Pools,
and hereby retains the Company to perform all of the services herein
contemplated and the Company hereby agrees to discharge these duties, all in
accordance with the terms and conditions set forth in this Agreement.
1.3 Power and Authority of the Company. The Company shall have full
power and authority to take all actions and to do all things reasonably
necessary or desirable for the proper, efficient and economical management and
operation of all of the Units in the Hotel Condominium Project. The Company
shall determine the marketing and operating programs, policies and procedures to
be followed in connection with the Rental Pools, all in accordance with the
provisions of this Agreement and to the end that the Units will be maintained
and operated in a business like manner with a goal of reasonable profitability.
Except as otherwise specifically provided in Section 1.4, the Company shall have
total discretion and control in all matters relating to the rental and marketing
policies for the Units and for their management, operation and maintenance; and
in connection therewith Owner hereby authorizes and appoints the Company as
his/her attorney-in-fact and agent to execute and deliver on his/her behalf
transient hotel rental arrangements for his/her Unit; to demand, receive and
receipt for the rent payments thereunder; and to exercise all other rights,
powers and authority granted to the Company hereunder, including without
limitation the power and authority to do all of the following:
(a) To operate and manage each of the Units and Rental Pools, and
to enter into agreements with others with respect to such management and
operation, which agreements shall contain such terms, provisions and conditions
as the Company deems, in its absolute discretion, to be advisable and in the
best interest of all of the Owners of Units in the Hotel Condominium Project;
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(b) To acquire, hold, sell, lease or otherwise dispose of any
personal property connected with the Units and the Company's rental operation of
the Units, including the purchase, lease, maintenance, exchange, trade or sale
of such properties at such price, rental amount, for cash, securities or other
property, and upon such terms as the Company deems appropriate;
(c) To make or cause to be made all repairs or to perform or cause
to be performed such maintenance as the Company deems necessary to maintain the
interior walls of the Unit(s) and all furniture furnishings, fixtures, machinery
and operating equipment located in, on or about the Unit(s) in satisfactory
condition for transient hotel rental to third parties;
(d) To maintain or cause to be maintained all common elements of
the Hotel Condominium Project that are used in connection with the rental
operation of the Units in good condition;
(e) To control or cause to be controlled (i) the use and operation
of all the common areas and physical facilities of the Hotel Condominium Project
to assure the efficient rental of the Units (i.e., all housekeeping closets and
hotel supply storage areas), and (ii) the use and operation of all recreational
amenities in the common areas to assure the best use by Owners and guests alike
and to insure maximizing Net Rental Income with the beneficial use of the
recreational amenities;
(f) To arrange for all advertising and promotion of the rental
accommodations of the Hotel Condominium Project, in accordance with other
marketing being done for the benefit of the Wilderness Hotel & Resort, as the
Company deems advisable;
(g) To establish from time to time such rates for third parties'
transient hotel rental of the Unit(s) as the Company may deem appropriate;
(h) To employ persons, agents and contractors in the rental
operation and management of the Unit(s), including but not limited to,
supervisory managing agents, building management agents, rental agents,
marketing representatives, security personnel and insurance brokers, on such
terms and for such compensation as the Company deems appropriate;
(i) To employ persons to perform legal and independent auditing
services in connection with the rental operation and management of the Units and
to provide services in connection with the preparation and filing of any tax
returns required in connection with the Rental Pools;
(j) To purchase from others such public liability, innkeeper's,
fidelity and other insurance as the Company deems advisable, appropriate or
convenient for the protection of the Units, or the equipment used in connection
with the rental operation of the Units or for any purpose convenient or
beneficial to the rental operation of the Units;
(k) To defend, settle or otherwise dispose of litigation with any
third party relating to the rental operation of the Units;
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(l) To place record title to, or the right to use, the Hotel
Condominium Project's assets (acquired in connection with the rental operation
of the Units) in the name or names of a nominee or nominees for any purpose
convenient or beneficial to the rental operation of the Units;
(m) To incur charges with respect to bank accounts maintained and
expenses relating to the purchase of supplies, materials, equipment or similar
items used in connection with the rental operation of the Units;
(n) To borrow up to an aggregate of $100,000 principal outstanding
at any one time as may be required for the maintenance and operation of the
Units and to secure the repayment of such borrowing by pledging or otherwise
encumbering all or any part of the Gross Room Revenues (as defined in Section
3.1(a)) and to refund, refinance, modify, consolidate or extend the maturity of
any indebtedness created by such borrowing, or any pledge, encumbrance or other
security device, all upon such terms as the Company deems appropriate;
(o) To, at the Company's sole and absolute discretion, lend money
to the Owners as a group; provided, however, that if the Company makes any such
loan or loans, the amount of any such loan shall be treated as a joint liability
of the Owners and shall be repayable upon such terms and conditions and shall
bear interest at such rate of interest as shall be reasonable under the
circumstance;
(p) To enter into such agreements, contracts, documents and
instruments with such parties and to give such receipts, releases and discharges
with respect to all of the foregoing and matters incidental thereto as the
Company may deem advisable, appropriate or convenient; and
(q) Perform any and all other legal acts to ensure the proper
establishment and management of the Units in the Rental Pools.
1.4 Limitations on the Company's Power and Authority. The Company
shall not do any of the following:
(a) Do any act in contravention of this Agreement;
(b) Do any act which would make it impossible to carry on the
rental pooling program contemplated hereunder;
(c) Possess or assign rights in any property acquired in connection
with the rental operation of the Units for other than proper purposes relating
to the rental pooling program;
(d) Permit a creditor who makes a non-recourse loan to the Owners
as a group, or to the Company in connection with its rental operation of the
Units, to have or acquire, at any time as a result of making the loan, any
direct or indirect interests in the profits, capital or property of the rental
pooling program established pursuant to this Agreement, other than as a secured
creditor.
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1.5 General Duty of the Company. The Company agrees to use its best
efforts to manage and control the rental operation of the Units and Rental Pools
and shall devote such time and effort thereto as the Company shall deem
necessary. In connection therewith, the Company shall perform any and all
functions, acts, and things that, in its sole discretion, are reasonably
necessary or desirable for the proper, efficient and economical management and
operation of the Units and for the protection of Owners' and the Company's
interests and rights therein. These duties and responsibilities shall include,
without limitation, the provision of management and sales supervision and
training, and accounting and management control of the Units, and the proper
promotion of the rental accommodations of the Hotel Condominium Project to the
general public.
ARTICLE 2
Use of Condominium Units
2.l Availability. Except as set forth in Section 2.2 below, Owner
shall make his/her Unit available at all times for occupancy by third parties as
hotel rental accommodations in connection with the operation of the Hotel
Condominium Project. Other than as set forth in Section 2.2 below, the Owner
shall not have the right to occupy any Unit in the Hotel Condominium Project,
including the Unit owned by Owner, except upon the same terms and conditions and
subject to the same rules and regulations as the general public. Furthermore,
Owner shall not have the right to rent his Unit to anyone but shall only be
permitted to allow specified guests to occupy his Unit pursuant to Section 2.2
below and all other hotel transient rental arrangements shall be made and
managed by the Company.
2.2 Use by Owner. Owners shall have the right to use the Unit
he/she has purchased or other Units in the Hotel Condominium Project upon the
following terms and conditions:
(a) Personal Use Nights. In addition to all other rights and
obligations available to a Unit Owner, he/she and/or his/her assigns may use any
Unit within an Owner's own Rental Pool for a total of ten (10) nights during any
one (1) calendar year ("Personal Use Nights"). Such Personal Use Nights shall
not be allowed from June 10th through Labor Day. Further, all Personal Use
Nights shall be subject to availability within Owner's own Rental Pool. An
Owner's Personal Use Nights shall be free of any rental charge whatsoever,
except: for any telephone charges; charges to the room during the Owner's stay
at the Wilderness Hotel & Resort; recreation fees or charges at the Wilderness
Hotel & Resort; any extraordinary wear and tear and/or damage to any Unit and/or
the furnishings contained therein; and any other charge or fee not incidental to
actual rental charge normally due from the occupant of a hotel room within the
hotel industry. In the event an Owner owns a Unit for less than a full calendar
year, the number of Personal Use Nights shall be prorated on the basis of ten
(10) Personal Use Nights per 365 days. In the event a Personal Use Night is to
be prorated in any given year, resulting in a number of days containing a
fraction, then the number of Personal Use Nights will be rounded up to the next
highest whole number. Any use shall be subject to the terms of this Agreement
and all rules and regulations of the Hotel Condominium Project and the
Wilderness Hotel & Resort. Notwithstanding anything contained herein to the
contrary, Personal Use Nights must be used during a calendar year or the right
to use the Personal Use Night shall expire on
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December 31 of that certain calendar year. As a result, no Personal Use Nights
can be accumulated from year to year.
(b) Unit Inside an Owner's Rental Pool.
In addition to the Owner using ten (10) Personal Use Nights and at
any time during the year, in the event on the day of the Unit Owner's check in,
at 10:30 p.m., each and every Unit in an Owner's Rental Pool is not rented, an
Owner, on a "first come first serve" basis, may rent that Unit for 25% of the
lowest available rental rate for that Unit taking into consideration the time of
year, other discounts being offered and similar considerations. This charge of
25% of lowest available rental rate shall not be considered Gross Room Revenue
for purposes of the Rental Pool. Rather, the sums shall be paid to the Company
as an administrative fee to cover reasonable costs associated with renting the
Unit for that night. Any amount charged to the Owner for his/her occupancy will
be deducted from the Owner's hotel account unless Owner elects to pay upon check
out. In addition to amounts charged Owner for occupancy, Owner shall be charged
for any normal and actual telephone costs or extra ordinary maintenance costs
associated with Owners occupancy.
(c) Unit Outside an Owner's Rental Pool. In addition to the Owner
using the ten (10) Personal Use Nights and at any time during the year, in the
event each and every Unit in an Owner's Rental Pool is rented for a given night,
an Owner may occupy any of the Units in the Hotel Condominium Project at the
lowest available rental rate for that Unit, taking into consideration the time
of year, other discount rates then being offered, and similar considerations.
Seventy-five percent (75%) of the published rental rate is typical of the lowest
available rate given by resort hotels to various types of groups or repetitive
business, except during peak holiday periods. The terms and conditions of an
Owner's reduced rate occupancy of a Unit with respect to reservations,
cancellations and occupancy shall be identical to the terms and conditions
imposed on any other guest of the Wilderness Hotel & Resort. Any amount charged
for an Owner's occupancy will be deducted from Owner's hotel account unless
Owner elects to pay upon check out. In addition to amounts charged Owner for
occupancy, Owner shall be charged for any normal and actual telephone costs or
extra ordinary maintenance costs associated with Owners occupancy.
(d) Restriction on Rental. An Owner, may not rent his/her Unit to
others independent of the Company's rental operation of the Units and the Rental
Pools. Further, an Owner can block off and reserve the use of his/her Unit any
time prior to that Unit being reserved by a member of the general public, but
rate will not be determined until the morning after the Unit Owner's arrival at
the Wilderness Hotel & Resort, unless Owner is using one of his/her ten (10)
Personal Use Nights.
(e) Notification of Intent to Occupy. Owner shall not have the
right to use a Personal Use Night on any specific day pursuant to the terms of
this Agreement unless he/she shall make a reservation with the reservation clerk
for the Wilderness Hotel & Resort and the Unit(s) has not been reserved for
occupancy on such days. Similarly, if an Owner wishes to allow a specified guest
to occupy his/her Unit during all or any of the Owner's Personal Use Nights,
Owner must make a reservation as provided above, together with a written
memorandum signed by Owner stating his consent to the Personal Use Nights being
used by the specified
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guest. Owner may cancel any Personal Use Night reservation seventy-two (72)
hours prior to date of arrival, and pay a Ten Dollar ($10.00) cancellation fee;
provided, however, that if the notice of cancellation is received less than
seventy-two (72) hours prior to the date of arrival, the Owner, for the purposes
of determining the number of Personal Use Nights used, shall be deemed to have
occupied the Unit for the period specified in his/her reservation unless the
Company shall actually obtain a rental of the Unit during that period.
(f) Manner of Use. An Owner's Unit may be occupied on a Personal
Use Night by any Owner or specified guest. Only Owner or his spouse shall be
granted discount rates for their use of other categories of Units in the Hotel
Condominium pursuant to paragraphs 2.2(b) and 2.2(c), and only to the extent
other discount rates are then available to group or repetitive business. At any
time a Unit is used by Owner, his/her spouse, or specified quests, whether being
a Personal Use Night, at a discount rate or otherwise, the user or users shall
comply with all Hotel rules and regulations with respect to their use of the
Unit and Hotel Condominium Project and Wilderness Hotel & Resort facilities. The
Personal Use Nights and/or discount rates, as the case may be, shall be
available to the Owner, spouse, or specified guest on a basis of one per Unit
owned by the Owner. By way of example, an Owner of one Unit using a discount
rate or Personal Use Night shall be entitled to use only one Unit on that
specific night. Any other Unit rented by the Owner spouse or specified guest
shall be at full rack rate.
ARTICLE 3
Compensation of the Company
3.1 Management Fee. Owner shall pay the Company a "Management Fee"
of thirty five percent (35%) of the Gross Room Revenues allocated to his/her
Hotel account. "Gross Room Revenues" are all revenues and income actually
received from the rental of all of the Units, whether on cash or credit, less
cash and credit refunds; sales and rooms taxes collected from guests or
customers; insurance proceeds other than from rent or business interruption
insurance; gains on the sale or disposition of equipment used in the rental
pooling operations; any reversal of any contingency or sales or room tax
reserve; and any commissions received from booking ground tours or other
miscellaneous income generated in connection with the Company's operation of the
Rental Pools. Gross Room Revenues shall not include revenues from the other
operations of the Hotel Condominium Project such as food, beverages, meeting
space, vending machines and coin operated gaming machines, all of which shall be
provided by the Company and/or its Affiliates and all proceeds of which shall
flow to the Company and/or its Affiliates which provided the service.
3.2 Overhead Expenses. The Management Fee shall be deemed in part
to constitute reimbursement to the Company for costs and expenses incurred by
the Company for services which are performed by personnel located at its
corporate headquarters, which services include executive supervision,
management, consulting, policy making, corporate finance, personnel and employee
relations and benefit administration, legal services, research and development
not otherwise allocated among specific matters in the Company's operation, and
the services of its technical, operational and marketing experts making periodic
inspection and consultation visits to the Hotel Condominium Project.
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3.3 Extraordinary Direct Expenses. In addition to the Management
Fee, Owners shall reimburse the Company for any extraordinary direct expenses
incurred by it in connection with its operation and management of the Units.
Extraordinary direct expenses shall include, but not be limited to, expenses
incurred by the Company for travel, telephone, entertainment, legal and
accounting services, and the like, to the extent the expense is outside the
ordinary course of business, all of which shall be documented as relating
directly to the Company's performance of its obligations under this Agreement.
3.4 Compensation Treated as Expense. All compensation due to the
Company, including the Management Fee and direct extraordinary expense
reimbursement, shall be treated as a Room Operating Expense and charged
proportionately to each Owner's Hotel account according to the provisions of
Section 4.2(c). The Management Fee and direct extraordinary expense
reimbursement shall be payable to the Company monthly in arrears.
ARTICLE 4
Sharing of Revenues and Expenses
4.1 Rental Pool.
(a) Proposed Rent. The Company, in its sole discretion, shall
charge a fair, reasonable and competitive rental rate for the Unit(s), taking
into consideration the Unit's location, its conveniences and amenities and the
size of the Unit and the Wilderness Hotel & Resort's class and atmosphere. The
rent schedule for all Units in the Hotel Condominium Project shall be published
on a regular basis and, except for rental adjustments made at the Company's
discretion for group or long-term occupancy, and reduced-rate or complimentary
accommodations granted at the Company's discretion for purposes the Company
deems advisable and to the benefit of the Hotel Condominium Project, the rent
charged for the Units in the Hotel Condominium Project shall be in accordance
with the rates so published.
(b) Revenue Allocation. The Gross Room Revenues received from all
of the Units shall be pooled according to the Rental Pool breakdown and the
Company shall allocate monthly to Owner's Hotel account an amount equal to the
Gross Room Revenues of the Unit's Rental Pool for the prior month divided by the
number of Units in the Rental Pool.
4.2 Operating Expenses.
(a) Room Operating Expenses. The "Room Operating Expenses"
generally include all costs, charges and expenses attributable to the operation
of all of the Units in a specific Rental Pool and each separate Rental Pool as
hotel accommodations, including without limitation the compensation paid to the
Company pursuant to Sections 3.2 and 3.4; the salaries, payroll rates and
employee benefits of all Hotel Condominium Project personnel providing services
in connection with the rental operation of the Units (i.e., managers, assistant
managers, bookkeepers, reservation clerks, maids and room service employees, and
the like); costs of linen and laundry service; costs of guest supplies;
advertising and promotional expenses, including salaries, payroll rates and
employee benefits of sales personnel; reasonable travel expenses of the
Company's personnel; costs of office supplies
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and equipment, including postage and long distance telephone charges; fees and
commissions paid to travel agents and hotel representatives; any and all
reserves required to replace any improvements at the Hotel Condominium Project,
credit card commissions; bad debt losses; expenses of repair, maintenance and
refurbishment of office, reception, housekeeping and maintenance areas; expenses
of repair, maintenance and refurbishment of Unit furnishings, fixtures,
equipment and household items; costs of utilities; that certain access and use
fee to be paid pursuant to that certain access and use agreement dated
____________ by and between the Association and the Company and its affiliated
entities (the "Access and Use Agreement"); computer bookkeeping and accounting
expenses; and fees for legal and other professional services. The Room Operating
Expenses also include the cost of thorough periodic cleaning and repair of the
Units and their furnishings, which maintenance, cleaning and repair shall be
done by the Company to the extent feasible on a rotating basis so as to maintain
all Units in proper condition for their rental use. Room Operating Expenses do
not include the charge for fire, casualty and liability insurance purchased
through the Association; Association charges, fees and assessments; property
taxes, or mortgage payments attributable to any Unit, all of which each Owner
shall pay directly or through the Association.
(b) Shared Expenses. Though Room Operating Expenses shall not
include any portion of the operating expenses of the Hotel Condominium Project
that are attributable to the commercial operations in the Hotel Condominium
Project and/or by Wilderness Hotel & Resort (i.e., the operation of food
beverage and conference facilities, and the like), certain costs, charges and
expenses will be incurred by the Company that are attributable to the Unit
rental operations and the other commercial operations in the Hotel Condominium
Project, including but not limited to the operation, maintenance, repair and
replacement of the recreational and public areas (including parking facilities)
of the Wilderness Hotel & Resort. The Company shall conclusively allocate to
Room Operating Expenses, in a reasonably equitable manner, a portion of such
shared expenses.
(c) Allocation. The Company shall allocate monthly to Owner's Hotel
account an amount equal to the aggregate of all Room Operating Expenses
attributable to the Owner's Rental Pool divided by the number of Units in the
Owner's Rental Pool.
4.3 Distributions or Assessments.
(a) Distributions. "Net Rental Income" shall be the amount of Gross
Room Revenues remaining in Owner's Hotel account after deducting his share of
the Room Operating Expenses. Within 30 days after the end of each calendar
quarter, the Company shall make distributions to Owner of his Net Rental Income,
less any deduction made pursuant to Sections 2.2(a) and 2.2(b) for Owner's
occupancy and less any deductions made pursuant to Section 4.4 for Association
fees, charges and assessments. The Company may also retain from these quarterly
distributions an amount that it deems reasonably necessary to maintain an
adequate working capital reserve, which reserved amount from all Units shall
never exceed $200,000.
(b) Assessments. If Owner's share of the Gross Room Revenues for
any month is less than his/her share of the Room Operating Expenses, or if there
is a negative
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balance in his/her Hotel account after deducting any Owner occupancy or
Association charges and any capital reserve amount, the Company shall assess the
Owner for the deficit amount, which assessment shall be payable promptly upon
Owner's receipt of the billing. If Owner shall fail to pay the deficit
assessment within 30 days after the billing date, Owner shall be charged a late
fee equal to interest on the assessed amount from the expiration of such 30 day
period until paid in full at the published prime rate at Firstar Bank plus 4
percentage points. All future Net Rental Income attributable to the Unit shall
be retained by the Company until all deficit assessments plus interest are paid
in full. Furthermore, to secure payment of all sums due the Company hereunder,
the Company shall have a lien on the Owner's Unit, all interests of Owner
therein, all revenues produced therefrom and Owner's furniture and equipment
located therein. Upon demand by the Company, Owner shall execute such documents
as the Company deems necessary to evidence and record such lien.
4.4 Payment of Association Charges, Assessments and Fees. For the
convenience of Owner and to facilitate the operation of the Wilderness Hotel
Condominium Association (the "Association"), Owner hereby authorizes the Company
to pay to the Association out of Owner's quarterly distributable income all fees
and unpaid charges and assessments due from Owner to the Association. If, in the
sole discretion of the Company, the Association shall fail to maintain the
common elements of the Hotel Condominium Project in such condition as to promote
and enhance the rental of the Units, the Company may withhold from the sums
payable to the Association, and expend such sums as are necessary to maintain
and repair the common elements so as so to promote and enhance the rental of the
Units. Maintenance includes security and protection for the lives and property
of the Owners and rental guests.
ARTICLE 5
Accounting
5.1 Books of Account. The Company, and any persons or entity
performing any of the Company's duties hereunder, shall keep complete books and
records covering the rental operations of the Units, and an ownership register
showing the names and addresses of each Owner and the number of Units held by
each of them, all of which shall be maintained at the Company's corporate
headquarters. Owner shall have the right of access to and inspection of these
books and records at all reasonable times. The Company shall cause the books and
records to be kept in accordance with accounting principles customary to the
hotel industry, applied in a consistent manner and reflecting all rental
transactions, including specifically all transactions relating to Room Operating
Expenses and to the rental or occupancy of the Units.
5.2 Accounting Reports. Promptly after the end of each calendar
year, the Company shall deliver to Owner an audited annual report containing a
complete statement of income and expenses for the Rental Pool rental operations
for that calendar year, together with a statement showing the amounts allocated
to or against the Owner's Hotel account during such year, all as certified to by
a certified public accountant selected by the Company. The cost of the
preparation of these statements shall be charged proportionately to Owner as
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a Room Operating Expense. The Company shall also prepare annually a rental
operations budget for the ensuing 12 month's income and expenses, a copy of
which shall be furnished to Owner upon receipt of his written request.
ARTICLE 6
Taxes, Insurance and Banking
6.1 Taxes. The Company shall not be liable for any federal or state
income or corporate excise taxes attributable to income earned by, or paid to,
Owner under this agency arrangement, or Owner's ad valorem personal and real
property taxes. The Company will, however, collect and pay to the appropriate
entity any sales tax or room tax assessed and levied by any governmental body,
which tax shall be added separately to the room rate and collected in addition
to the room rental charges.
6.2 Insurance. To the extent not already provided by the
Association, the Company shall obtain and maintain such public liability,
property damage, automobile, innkeepers, garagemens, casualty and other
insurance in such amounts and upon such terms as the Company shall deem
advisable. Owner(s) and/or the Association on behalf of the Owners shall be
named as an additional insured. The Company also may obtain and maintain an
insurance policy covering the Furnishings (as defined in Section 9.1) in all the
Units. The premiums paid for these insurance policies shall be charged
proportionately to the Owner(s) as Room Operating Expenses.
6.3 Banking. The Company shall cause all funds from the rental
operation of the Units to be deposited in a separate bank account or accounts as
shall be determined by the Company. All withdrawals therefrom shall be made upon
checks signed by any person authorized by the Company to sign them.
ARTICLE 7
Board of Directors
7.1 Board of Directors. The Owners shall select, at their annual
meeting of the Association, three (3) of their number to act as the Board of
Directors (the "Board") and to interact with the Company in the operation of the
Rental Pools and to discuss with the Company any suggestions the Owners may have
given the Board in connection with Hotel Condominium Project matters generally.
An executive officer of the Company and the Hotel Condominium Project general
manager shall meet with the Board at least quarterly at the Hotel Condominium
Project upon the request of the Board. The actions of the Board shall be
advisory only and not binding, and nothing herein shall be construed as giving
the Owners, either collectively or individually, any right to control or to
interfere in any manner with the Company's operation of the Units or the Hotel
Condominium Project. Any and all
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complaints, suggestions and comments of any Owner shall be directed to the
Company by and through the Board.
ARTICLE 8
Term
8.1 Term.
(a) Commencement. The agency created under this Agreement shall
commence on the date hereof and, except as provided in subsection (b) below,
shall continue indefinitely.
(b) Termination. (i) At any time after 20 years following the date
the first completed Unit is placed under the Company's rental management
pursuant to this Agreement as entered into by one of the Owners (the "First
Management Date"), the Owners may, as a group, terminate this Agreement as
entered into by each of them if at a meeting called for the purpose of such
termination, the motion is passed by a two-thirds vote of all of the Owners.
Such termination shall be effective at the end of the third full calendar month
following such meeting. A meeting for the purposes of terminating this Agreement
by all Owners may be called by the Condominium Association or by Owners owning
more than one third of the Units in the Hotel Condominium Project. THE OWNERS,
BY THEIR EXECUTION OF THIS AGREEMENT, HEREBY ACKNOWLEDGE AND AGREE THAT THE
TWENTY (20) YEAR TERM OF THIS AGREEMENT IS COMMERCIALLY REASONABLE. IN THE EVENT
THE TWENTY (20) YEAR TERM IS EVER DETERMINED TO BE COMMERCIALLY UNREASONABLE,
THEN THE TERM OF THIS AGREEMENT SHALL BE MODIFIED TO A TERM DEEMED TO BE
COMMERCIALLY REASONABLE AND THE REMAINDER OF THIS AGREEMENT SHALL NOT BE
MODIFIED AND SHALL REMAIN IN FULL FORCE AND EFFECT. FURTHER, THE OWNER, BY
HIS/HER EXECUTION OF THIS AGREEMENT, ACKNOWLEDGES AND AGREES THAT HE/SHE HAS
RECEIVED ADEQUATE CONSIDERATION FROM THE COMPANY AND ITS AFFILIATES BY VIRTUE OF
THE BENEFITS AND RIGHTS RECEIVED UNDER THE ACCESS AND USE AGREEMENT.
(ii) At any time after 3 years following the first management date,
the Company may, for any reason, upon 90 days prior written notice to Owner,
withdraw as agent hereunder and thereby terminate this Agreement. Such
withdrawal and termination may be given to Owner individually or to all of the
Owners, and shall be effective at the expiration of the 90 day notice period.
(iii) This Agreement shall automatically terminate, as to a
specific Owner only, upon the bankruptcy, insolvency or dissolution of an Owner,
or upon the death of Owner provided, however, that (A) if Owner is two or more
people owning a Unit as Joint tenants or tenants by the entirety, then this
Agreement shall terminate upon the death or bankruptcy of the last surviving
tenant; and (B) if Owner is two or more people or entities owning a Unit as
tenants in common, then this Agreement shall terminate upon the death,
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bankruptcy, insolvency or dissolution of the persons or entities owning more
than a 50% interest in the Unit on a cumulative basis.
(iv) This Agreement shall automatically terminate, as to a specific
Owner, upon the conveyance or other transfer of Owner's title to his Unit,
whether by sale to a third party, foreclosure by a mortgagee or otherwise.
(v) Any termination of this Agreement shall be subject to any then
existing Unit rental reservations. An Owner shall receive a refund of his pro
rata share of the balance in the reserve accounts established, if any, pursuant
to Sections 4.3 and 9.3.
(vi) In the event the Owners terminate this Agreement by a vote of
the Owners pursuant to paragraph 8.1(b)(i), then the consideration granted to
the Owners as described herein (i.e., the rights and benefits granted the Owners
under the Access and Use Agreement) shall be rescinded and of no further force
and effect. In that event, all Owners, their successors or assigns shall have no
further rights to use the amenities at the Wilderness Hotel & Resort.
ARTICLE 9
Furniture and Fixtures Reserve
9.1 Maintenance of Furnishings. During the term of this Agreement
the Unit's interior, the furniture, furnishings, fixtures, equipment and
household items (collectively the "Furnishings") and the limited common
elements, including utility and plumbing systems located within Owner's Unit,
shall be maintained by the Company as it deems appropriate for the Unit's use as
a hotel accommodation. The cost and expense of replacement or repair of the
Unit's interior, its limited common elements or the Furnishings that may be
lost, stolen, damaged or destroyed during any third party's rental of the Units
shall be a Room Operating Expense.
9.2 Ownership of Furnishing. In connection with Owner's purchase of
the Unit, he obtained an original Furnishings package containing the number,
type and quality of Furnishings for the Unit that meet the standards established
by the Company for all the Units in the Hotel Condominium Project. These
original Furnishings and all replacement Furnishings for the Unit shall remain
Owner's separate property. To maintain the Unit's suitability for hotel rental,
Owner may not alter his Unit as initially furnished without the prior written
consent of the Company.
9.3 Furnishings Reserve. A common reserve of $300,000 will be
established by the Company from which repairs and maintenance of Furnishings
will be paid as needed and without regard to individual Owner's contributions
thereto. This common reserve will be initially funded through a monthly charge
equal to four percent of Gross Room Revenues, to be proportionately charged to
each Owner's Hotel account as a Room Operating Expense. Once established, the
reserve funds shall be replenished as needed through assessments charged by the
Company, in a reasonably equitable manner, to each Owner as an additional Room
Operating Expense. Similarly, if the Company determines that the reserve is
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inadequate at any time to maintain the quality of the Units as hotel
accommodations, the additional needed funds will be assessed to each Owner as an
additional Room Operating Expense.
ARTICLE 10
Assignment
10.1 Consent to Assignment. The Owner shall not assign this
Agreement without the written consent of the Company. The Company may, from time
to time, without Owner's consent, assign all or a substantial amount of its
duties, functions and discretions under this Agreement to any recognized hotel
management chain, an affiliate entity of the Company, or to a business entity
specifically formed to operate the Hotel Condominium Project.
10.2 Agency With Transferee. Upon the sale or other disposition of
the Unit, the transferee of the Unit may negotiate a new rental pooling and
agency agreement (the "New Agreement") with the Company. If the New Agreement is
on substantially the same terms as this Agreement, the parties shall be free to
enter into the New Agreement. If however, the New Agreement is upon terms that
differ from the terms of this Agreement, the Company shall not enter into the
New Agreement until it has received a consent to the New Agreement from
two-thirds of the Owners. To obtain the Owners' consent, the Company shall
deliver to each Owner a written request for the Owner's consent, which request
shall identify the terms in the New Agreement that differ from this Agreement.
Each Owner shall be deemed to have consented to the New Agreement unless, within
15 days after the Company delivers the request, the Owner delivers to the
Company a written denial of consent to the New Agreement. If more than one third
of the Owners deliver to the Company a denial of consent to the New Agreement,
the Company shall not enter into the New Agreement with the transferee. The
purpose of the consent provision is solely to preclude the Company from
gradually changing the terms and conditions of this Agreement without Owners
approval.
ARTICLE 11
Miscellaneous
11.1 Competing or Related Businesses. The Company (and any person
or entity affiliated with the Company, including any officer or director of the
Company or of any such affiliated entity) and Owner may acquire real properties
for their own account, or engage in the acquisition, development, operation or
management of real estate on behalf of other partnerships, joint ventures,
corporations or other business ventures formed by them or in which they may have
an interest, including without limitation, business ventures similar to, related
to or in direct or indirect competition with the rental operations of the Hotel
Condominium Project. Owner shall not have any right by virtue of this Agreement
in or to such other business ventures or income or profits derived therefrom.
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11.2 Conflicts of Interest.
(a) Additional Employment. The fact that Owner or the Company, or
any person or entity affiliated or related thereto, is employed by, or is
directly or indirectly interested in or affiliated or connected with, any
person, firm or corporation (a) employed by the Company, in connection with the
Unit rental operations, to render or perform management or other services of any
kind, or (b) from or to whom the Company may buy, sell, lease or otherwise
acquire or dispose of any property which the Hotel Condominium Project, in
connection with the Unit rental operations, may have or desire to have an
interest in, shall not prohibit the Company from employing such person, firm or
corporation, or from otherwise dealing with the same. Owner shall not have any
rights in or to any income or profits derived from any such employment or other
dealings by any such person, firm or corporation. It is expressly understood,
however, that any such employment or other dealings shall be on terms not less
favorable to the Unit rental operations than the terms for comparable services
or transactions reasonably available from unrelated persons, firms or
corporation.
(b) Conflicts Within Hotel Management. The Company will act as
agent for the Owners under this Agreement. During the development stage of the
Units, the Company will control the board of directors of the Association. The
Company intends to enter into a contract with the Association for the
management, operation and maintenance of the common areas controlled by the
Association. The Affiliates of the Company will own and operate the Wilderness
Hotel & Resort. The officers and directors of the Company are also officers or
directors of Wild Golf, Inc., Wilderness Hotel & Resort, Inc. and XXXXXX, Inc.
and have been involved directly with the development and promotion of the
Wilderness Hotel & Resort and may be involved, directly or indirectly, in the
operation of the Units. Accordingly, the Company may have conflicts of interest
with regard to: (1) its services to be performed for the Owners under this
Agreement and for the Association under a common areas management agreement; (2)
the remuneration to be paid for providing such services; (3) its relationship as
manager of the common areas for the Association, and its initial control of the
board of directors of the Association; and (4) the manner in which the
obligations of the Wilderness Hotel & Resort management and the Association have
to one another are performed.
(c) Conflicts Within Wilderness Hotel & Resort. Wilderness Hotel &
Resort, Inc., Wild Golf, Inc. and XXXXXX, Inc. (collectively the "Affiliates")
currently operate and perform management services for the Wilderness Hotel &
Resort. The Company and its Affiliates intend to develop, market and manage, in
the future, other hotels, condominiums, or hotel-condominium projects, to
organize condominium or homeowners' associations for the operation of such
projects, to designate its employees as temporary directors for such
associations and to act as rental agent and managers for the owners of units in
such projects. The existing Wilderness Hotel & Resort and future projects at the
Wilderness Hotel & Resort will be in competition with the Units for rental
accommodation.
(d) Company Policies. The Company and its Affiliates have adopted
the following policies with respect to the conflicts of interest set forth
above, however, these policies may be varied if circumstances change:
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(i) Transactions Within Hotel Management. The Company will provide
rental management services for the Units under this Agreement. The Company
intends to enter into a management agreement with the Association to provide
management services for the common areas of the Units and intends to enter into
the Access and Use Agreement with Owners to provide Owners with certain access
and use of the Wilderness Hotel & Resort recreational facilities. It is the
policy of the Company that the Company's operation of the Units and the common
areas and its, or any Affiliate's, relationship with the Owners or the
Association, will be on terms no less favorable to the Owners or the Association
than the terms pursuant to which such operations or relationships with unrelated
persons or entities are or could be conducted.
(ii) Competition by Affiliates Within Wilderness Resort. The
Company, Wilderness Hotel & Resort, Inc., Wild Golf, Inc. and Xxxxxx, Inc.
intend to cooperate with each other in providing appropriate accommodations for
prospective transient hotel tenants. The Units, together with all other
condominium Units built in the future will be given a fair exposure to
prospective transient hotel tenants that contact the Company for reservations.
11.3 Notices. All notices, demands and communications given
pursuant to this Agreement shall be deemed sufficiently given if personally
served or mailed by registered or certified mail, return receipt requested, and
addressed as follows, or to such other address as a party may from time to time
designate in writing:
To the Company: Wilderness Development Corporation
000 X. Xxxxx Xxxxxx
Xxxxxxxxx Xxxxx, XX 00000
With a Copy to: Attorney Xxxxxxx X. Xxxxxxx
and Attorney Xxxxxxx X. Xxxxxxx
Xxxxxxx & Xxxxxxx, S.C.
000 Xxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxx, XX 00000
To Owner: To Owner's address as set forth below.
Any notice given hereunder by mail shall be deemed delivered when deposited in
the United States mails, postage prepaid.
11.4 Liability of the Company; Indemnification. The Company shall
not be liable to Owner for the performance of any act or for its failure to act
so long as it is not guilty of fraud, gross negligence or willful misconduct in
such performance or failure. The Owners of all the Units shall indemnify the
Company, any employee or agent of the Company, and any Hotel Condominium Project
employee or agent, against any loss or threat of loss as a result of any claim
or legal proceeding relating to the performance or nonperformance of any act
concerning the operation of the Rental Pools; provided, however, that with
respect to the subject matter of the claim or legal proceeding, the party
against whom the claim is made or legal proceeding is directed was not guilty of
fraud, gross negligence or willful misconduct in such performance or
nonperformance. The
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indemnification authorized by this section 11.4 shall include payment of (a)
reasonable attorney's fees or their expenses incurred in settling any claim or
threatened action or incurred in any finally adjudicated legal proceeding; and
(b) the removal of any liens affecting any property of the indemnitee. All
indemnification shall be made from the proceeds of the rental operation of the
Units and Owner shall not be personally liable to any indemnitee.
11.5 Owner's Acknowledgments. By the execution hereof, Owner and
the Company intend to create an agency relationship between the Company, as an
independent contractor, and the Owner. The parties do not intend the agency
relationship hereby created to be a partnership or joint venture between
themselves, and the Owner does not intend this Agreement to create a partnership
or joint venture among all or any number of the Owners. If, however, this
Agreement is deemed to create a partnership for income tax purposes and if the
Management Fee paid by Owner to the Company pursuant to Section 3.2 hereof is
not deductible by Owner for income tax purposes because such Management Fee is
characterized as partnership distributions, then before any income of the
partnership created by this Agreement is allocated to Owner, such income shall
be first allocated to the Company to the extent of any such Management Fee paid
to the Company and characterized as a partnership distribution. Owner
acknowledges that the Rental Pools established pursuant to this Agreement is a
speculative venture and there is no guaranty, in fact or by implication, that
Owner shall receive any, or any specific, sum of money in any given period of
time on account of his entry into this Agreement.
11.6 No Transfer of Interest in Real Estate. Ownership of the Unit
is and shall continue to be held by Owner and shall not result in any transfer
of any ownership interest or right to the Company or any other party. The agency
established pursuant to this Agreement is for the purpose of establishing a
Rental Pool program for the Units and Owner has granted to the Company only the
limited right to rent the Unit and pool the income derived therefrom, as
described herein.
11.7 Entire Agreement and Amendments. This Agreement constitutes
the entire understanding between the parties with respect to the subject matter
hereof. Amendments to this Agreement that (a) are of an inconsequential nature
and do not affect the rights of the Owners in any material respect, or (b) are,
in the opinion of counsel to the Company, necessary to prevent the Owners or the
Company from being in any manner subject to adverse income tax consequences not
intended by the parties in negotiating the provisions of this Agreement, may be
made by the Company through use of the power of attorney granted in Section 1.1
above. Any amendment made pursuant to subsection (b) of the preceding sentence
shall be deemed effective as of the date of this Agreement. Except as provided
in the foregoing sentences, this Agreement may only be amended or terminated by
written instrument duly authorized and executed pursuant to all requisite
authorization on the part of all of the parties hereto.
11.8 Successors and Assigns. Subject to the provisions of Section
10, all of the terms and conditions of this Agreement shall be binding upon and
shall inure to the benefit of the Company and Owner, their respective personal
representatives, successors and assigns.
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11.9 Captions and Pronouns. The captions and headings of the
various sections of this Agreement are for convenience only and are not to be
construed as modifying in any way the scope or intent of the provisions hereof.
Wherever the context requires or permits, the singular shall include the plural,
the plural shall include the singular, and the masculine, feminine and neuter
shall be freely interchangeable. If this Agreement shall be signed by more than
one person as Owner, all obligations hereunder on the part of Owner to be
observed and performed shall be joint and severable.
11.10 Provisions Severable. The unenforceability or invalidity of
any provision or provisions hereof shall not render any other provision or
provisions herein contained unenforceable or invalid.
11.11 Governing Law. This Agreement and its application shall be
construed under and governed by the laws of the State of Wisconsin.
EXECUTED as of the date first above written.
THE COMPANY:
WILDERNESS DEVELOPMENT CORPORATION,
a Wisconsin corporation
ATTEST:
By:_________________________ By:________________________________
Secretary President
OWNER:
___________________________________
(Signature)
___________________________________
(Signature)
Unit No. __________________________________
Purchase Price $____________________________
EIN or Social
Security Number _________________________
Name (Print) ______________________________
Name (Print) ______________________________
Street Address ____________________________
City State, Zip Code ______________________
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