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EXHIBIT 10.5
MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT (this "Agreement") is entered into as of the
28th day of March, 1990, but effective for all purposes as of April 1, 1990, by
and between MASTER ENDLESS ESCAPE CLUB, a Texas non-profit corporation ("Master
Club"), and ASCENSION RESORTS, LTD., a Texas limited partnership ("Manager").
R E C I T A L S
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WHEREAS, Manager is the current owner and developer of six (6)
timeshare/condoshare development resorts, four (4) of which are located in
Texas and are known as Xxxxx Lake Ranch, The Villages, Piney Shores Resort and
Hill Country Resort and two (2) of which are located in Missouri and are known
as Ozark Mountain Resort and Holiday Hills Resort (collectively the "Resorts");
and
WHEREAS, pursuant to that certain Master Club Agreement (so called
herein) dated March 28, 1990, executed by and between Master Club and Ozark
Mountain Resort Club, a Missouri non-profit corporation, Holiday Hills Resort
Club, a Missouri non-profit corporation, The Xxxxx Lake Club, a Texas
non-profit unincorporated association, The Villages Condoshare Association, a
Texas non-profit unincorporated association, The Villages Club, an
unincorporated association, Piney Shores Club, a Texas non-profit
unincorporated association, and Hill Country Resort Condoshare Club, a Texas
non-profit unincorporated association (collectively the "Clubs"), the Master
Club was authorized and appointed by each of the Clubs to arrange for
centralized management of the Resorts and to implement the Program (hereinafter
defined) for the benefit of the Clubs; and
WHEREAS, Manager has created and established a program referred to as
the Endless Escape Program (the "Program") pursuant to which each member of the
Clubs is entitled, at no additional charge, (i) to vacation at each member's
respective Resort more frequently and under certain circumstances, during use
periods not already owned by that member, and (ii) to vacation at the other
Resorts; and
WHEREAS, the Master Club desires to retain the services of Manager to
perform certain supervisory and maintenance functions with regard to the
Resorts;
NOW, THEREFORE, in consideration of the foregoing, and the further
terms, covenants and conditions hereinafter set forth, and for other
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto do hereby covenant and agree as follows:
1. Appointment of Manager. The Master Club does hereby appoint
Manager as its attorney-in-fact and exclusive managing agent for the Resorts.
2. Operation, Maintenance and Financial Administration of the
Resorts. Manager shall make itself available as may be reasonably necessary to
properly fulfill its management duties described as follows:
(a) Manager shall properly and efficiently operate and
maintain the Resorts, pursuant to the terms of the budget established
or ratified by the Board of Directors of the Master Club (the
"Directors") from time to time.
(b) Manager shall, in accordance with such budget, keep
the Resorts clean and in a state of good repair at all times, and
shall order and supervise the completion of non-budgeted alterations,
decorations, improvements and repairs as may be required from time to
time and authorized by the Directors.
(c) On behalf of or for the benefit of the Master Club,
Manager shall be authorized to purchase, lease or otherwise provide
for all furniture and furnishings, maintenance supplies, tools and
equipment, restroom and toilet supplies,
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electrical supplies and light bulbs, paint, stationery, office
supplies and any other items or property incident to the performance
of the obligations herein assumed by Manager, and applicable to the
Resorts, and Manager shall be authorized to charge the Master Club for
any such expenses incurred in connection therewith; all such furniture
and furnishings, maintenance supplies, tools and equipment, restroom
and toilet supplies, electrical supplies and light bulbs, paint,
stationery, office supplies and other items or property shall be the
property of the Master Club and shall be used only in connection with
the Resorts.
(d) On behalf of or for the benefit of the Master Club,
Manager shall be authorized to employ, pay, furnish, train, supervise
and discharge such personnel, either on behalf of or for the benefit
of itself or the Master Club, as may in its sole discretion be
necessary to the performance of its duties hereunder, including, but
not limited to, maintenance employees, domestic employees and such
other employees necessary to the efficient management, operation and
maintenance of the Resorts, and Manager shall be authorized to charge
the Master Club for any such expenses incurred in connection
therewith. Manager shall enter into contracts for such services as it
shall deem advisable or necessary, within such budgetary limits as may
be prescribed by the Directors from time to time; provided, however,
that the Master Club shall approve, and be liable and responsible for,
any such contracts which, by their terms, may be in existence
subsequent to the termination of this Agreement.
(e) On behalf of or for the benefit of the Master Club,
Manager shall create and maintain a centralized reservation system for
the Resorts participating in the Program and Manager shall further
administer the Program in accordance with the rules and regulations of
the Program for the benefit of all Resorts.
(f) On behalf of or for the benefit of the Master Club,
Manager shall be authorized to employ, pay and discharge such
professionals and consultants as may in its sole discretion be
necessary to the performance of its duties hereunder, including, but
not limited to, accountants, attorneys or such other professionals or
consultants necessary to the efficient management, operation and
maintenance of the Resorts, and Manager shall be authorized to charge
the Master Club for any such expenses incurred in connection
therewith. Manager shall enter into contracts for such services as it
shall deem advisable or necessary, within such budgetary limits as may
be prescribed by the Directors from time to time; provided, however,
that the Master Club shall approve, and be liable and responsible for,
any such contracts which, by their terms, may be in existence
subsequent to the termination of this Agreement.
(g) On behalf of or for the benefit of the Master Club,
Manager shall compensate in a timely manner all those employed on
behalf of the Master Club and shall promptly pay for all supplies,
merchandise, materials, labor, insurance, or other items ordered,
furnished or used by it or for it in the performance of the duties
assumed hereunder, and Manager shall be authorized to charge the
Master Club any such expenses incurred in connection therewith.
(h) On behalf of and for the benefit of the Master Club,
Manager shall enter into such contracts for water, sewer, electricity,
gas, trash collection, telephone, vermin extermination, guard service
and other necessary services as may be set forth in the budget or
deemed necessary or desirable by the Directors.
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(i) Manager is further authorized to take any and all
further action as may in its sole discretion be necessary or desirable
for the proper maintenance and operation of the Resorts.
3. Insurance, Taxes and Administrative Details.
(a) Manager shall obtain Worker's Compensation Insurance
in accordance with the laws of the State of Texas or Missouri, as
applicable, and Employer's Liability Insurance applicable to and
covering all persons engaged in performance of the work required by
the obligations assumed by Manager hereunder, the cost of which shall
be included in the budget described in subparagraph 2 (a) hereinabove
and paid by the Master Club. Manager will furnish Master Club
certificates evidencing such insurance. In the event that Manager, in
fulfillment of its obligations hereunder, subcontracts for services,
Manager shall include in such subcontract a provision that the
subcontractor shall carry Worker's Compensation Insurance in
accordance with the laws of the State of Texas or Missouri, as
applicable, and Employer's Liability Insurance applicable to and
covering all persons engaged in the performance of said work, and
Manager shall satisfy itself that such insurance is in force at all
times under this Agreement.
(b) Manager shall procure and maintain such public
liability, property damage, fire, employees liability and other
insurance covering such other risks as Manager may in its sole
discretion deem necessary and appropriate, the cost of which shall be
included in the budget described in subparagraph 2(a) hereinabove and
paid by the Master Club.
4. Administration of Assessments and Income.
(a) On behalf of the Master Club, Manager shall send a
monthly xxxx to each member of the Clubs, which xxxx shall set forth
each member's liability for dues, assessments, late charges and other
amounts levied against the members of its respective Club pursuant to
the Declaration of Restrictions, Covenants and Conditions and the
By-Laws of its respective Club. Manager shall receive payment from all
members for such assessments and shall maintain accurate records with
respect thereto. Manager shall have no liability for failing to
collect delinquent assessments or other charges.
(b) On behalf of or for the benefit of the Master Club,
Manager shall collect all income generated from its operation,
management and administration of the Resorts.
(c) Manager shall disburse all funds received from the
members of the Clubs and income generated from the Resorts in
accordance with the budget described in subparagraph 2(a) hereinabove
or pursuant to any special directions of the Directors for the benefit
and on behalf of the Master Club.
5. Financial Records.
(a) Manager shall at all times keep and maintain full,
true and accurate books of account to fully reflect all of the monies
received and paid out under this Agreement, which books and records
shall be open to inspection by authorized representatives of the Master
Club.
(b) Manager shall maintain records showing all of its
receipts and expenditures relating to the Master Club and shall
promptly submit to the Directors a cash receipt and disbursements
statement for the preceding year and a statement indicating the balance
or deficit in the Manager's account for the Master Club on or before
the last day of the second month following the fiscal year end of
Manager during the term hereof.
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(c) If requested by the Directors, Manager shall prepare
and submit to the Directors, on or before the 30th day preceding the
end of the calendar year, a recommended budget for the next year,
showing anticipated receipts and expenditures for such year.
6. Advances by Manager. In the event that the Master Club does
not have sufficient funds to cover such the expenses of operation, maintenance
and administration as are described in paragraphs 2 and 3 hereinabove, Manager
may elect to advance such funds on behalf of the Master Club and treat the same
as an account receivable without prejudice to any other remedy which may be
available to Manager; provided, however, that until receipt of such additional
funds, Manager shall not be responsible for payment of any such expenses, and
Manager shall have no obligations to advance funds to Master Club for any
purpose whatsoever.
7. Compensation to Manager. As compensation for Manager's
services hereunder, Manager is entitled to retain for its own account at the
end of each calendar month during the term of this Agreement an amount equal to
the lesser of (a) fifteen percent (15%) of the Gross Revenues (as defined
hereinbelow) for the preceding month or (b) the amount by which the Gross
Revenues for the preceding month exceed the total of all accrued expenses of
any kind whatsoever ("Expenses") incurred by the Master Club during the
preceding month in performing its duties and obligations under the Master Club
Agreement; provided, however, that, if in any month the compensation paid to
Manager pursuant to this Agreement does not equal fifteen percent (15%) of the
Gross Revenues for the preceding month then an amount equal to the difference
between (x) 15% of the Gross Revenues for such month and (y) the amount of
compensation actually paid to Manager in such month (the "Shortfall") shall be
owed Manager and, in any subsequent month in which the Gross Revenues for such
month are more than sufficient to pay all Expenses as well as compensation to
Manager in the amount of 15% of the Gross Revenues for such month, then
Manager shall be entitled to retain for its own account so much of the excess
Gross Revenues as is necessary to satisfy the Shortfall. As used herein, the
term Gross Revenues shall mean the amount of all dues, assessments, late
charges and any other amounts accrued by Manager from the members of the Club
pursuant to paragraph 4(a) hereinabove, plus, (ii) the amount of income
generated by the Resorts and accrued by Manager pursuant to paragraph 4(b)
hereinabove. Such accruals shall be determined by Manager in its reasonable
discretion using its normal accounting practices.
8. Indemnification. The Master Club shall indemnify, defend and
save Manager, its directors, shareholders, officers, employees and agents,
harmless of and from any and all loss, cost or expense, including reasonable
attorneys' fees, arising out of or directly or indirectly connected with
Manager's operation and maintenance of the Resorts.
9. Term. This Agreement shall become effective on the date hereof
and shall continue in force for a period of ten (10) years, and thereafter from
year to year unless cancelled by Manager or the Master Club by giving notice in
writing of at least sixty (60) days prior to the anniversary date hereof. Upon
termination, the parties hereto shall account to one another with respect to
all matters outstanding as of the date of termination and the Master Club shall
furnish Manager security, satisfactory to Manager, against any outstanding
obligations or liabilities which Manager may have incurred under this
Agreement.
10. Default. Should Manager fail to perform any of the obligations
it has assumed hereunder, and Manager has not cured such failure within ninety
(90) days after the Master Club has provided Manager with written notice
thereof or, if such failure on the part of Manager is not susceptible of being
cured within said ninety (90) day period, should Manager fail to commence
curing
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such failure within said ninety (90) day period or, having commenced to cure
the failure within said ninety (90) day period, should Manager fail to
prosecute or complete the curing of such failure with due diligence and
dispatch, this Agreement shall be terminated and neither Manager nor the Master
Club shall have any continuing obligation one unto the other.
11. Use Agreements. Manager hereby agrees that so long as this
Agreement is in full force and effect, it will not cancel or terminate those
certain agreements (the "Use Agreements") entered into by and between Manager
and each respective Club, which use Agreements provide for the sharing of
certain amenities and recreational facilities owned by Manager located near or
in the vicinity of the respective Resorts.
12. Miscellaneous. This Agreement shall be construed under the
laws of the State of Texas, and may be amended only, by an instrument in
writing signed by Manager and the Master Club.
EXECUTED as of the date first above written.
Manager: Master Club:
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ASCENSION RESORTS, LTD., a MASTER ENDLESS ESCAPE CLUB,
Texas limited partnership a Texas non-profit corporation
By: ASCENSION CAPITAL CORPORATION,
a Texas corporation, By: /s/ XXXXXX XXXXXXXXX
General Partner ------------------------------
Its: President
By: /s/ XXXXXX X. XXXX
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Its: President
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