PROPERTY MANAGEMENT AGREEMENT
THIS AGREEMENT, dated _________________, 1997, is by and
between CHARTHOUSE SUITES VACATION OWNERSHIP, INC., a Florida
corporation ("Charthouse") and DECADE PROPERTIES, INC., a
Wisconsin corporation ("DPI").
WHEREAS, Charthouse owns a hotel comprised of 25 hotel rooms
located in Clearwater, Florida, known as Chart House Suites hotel
(the "Property"). In connection with the offering of Vacation
Interests in the Charthouse, Charthouse desires to retain DPI to
manage the Property on behalf of Charthouse and the holders of
Charthouse Vacation 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, 2040. The parties agree that
DPI would not have sold the Property to 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 full reimbursement of all of its costs. The monthly
management fee amount will be increased on the first day of each
year (beginning January 1, 1998) 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 its reasonable
opinion.
(f) To carry, at Charthouse's expense, necessary public
liability insurance with a minimum limit of $1,000,000 in
coverage and worker'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 of 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 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 this 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
