Exhibit 10.27
CLUB AFFILIATION AGREEMENT
AGREEMENT made and entered into the 17th day of September, 1997, by and between
INTERVAL INTERNATIONAL, INC., a Florida corporation ("INTERVAL"), with its
principal place of business at 0000 Xxxxxx Xxxxx, Xxxxxxxxx Xxx, Xxxxx, Xxxxxxx
00000, XXX; and Peppertree Resorts Vacation Club, Inc., a North Carolina
corporation ("AFFILIATE"), with its principal place of business at 0 Xxxxx Xxx
Xxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, for the multi-site vacation club
membership program known as PEPPERTREE VACATION CLUB (the "CLUB"). INTERVAL and
AFFILIATE are sometimes referred to as a "Party" or jointly referred to as the
"Parties."
WHEREAS, INTERVAL is engaged in the business of providing and operating an
exchange service to facilitate the exchange of accommodations between owners of
Vacation Interests (as defined herein) at participating resorts (the "INTERVAL
NETWORK");
WHEREAS, AFFILIATE is in the business of developing, managing and/or marketing
the CLUB which is a multi-site vacation club membership program which allows
owners of Vacation Interests in the CLUB to reserve accommodations at one of
several locations included within the CLUB's operations;
WHEREAS, AFFILIATE desires to include all Club Resorts (as defined below) as participants
in the INTERVAL NETWORK; and
WHEREAS, AFFILIATE and INTERVAL contemplate that the operation of the CLUB will
extend to additional locations in the future and they both wish to provide for
the terms and conditions pursuant to which these additional locations will
participate in the INTERVAL NETWORK.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Parties hereto
agree as follows:
A. DEFINITIONS.
For purposes of this Agreement, the following are defined terms:
1. "Approved Club Resorts" means: (a) those resorts (or Units therein)
set forth on Exhibit "A" hereto; and (b) such other resorts (or
Units therein) which are developed, acquired or leased in the future
by AFFILIATE, or otherwise assigned to AFFILIATE, for use in
connection with the CLUB and which are accepted by INTERVAL in
accordance with Section E, Paragraph 1 hereof.
2. "Club Resort" means all resorts (or Units therein) developed,
acquired, leased or assigned for use in connection with the CLUB.
3. "Confirmation" or "Confirmed Exchange" means a written or oral
acknowledgment that an exchange request has been fulfilled by
INTERVAL.
4. "Effective Date" means April 11, 1997.
5. "Exchange Guest" means the individual or individuals who have been
issued a Confirmed Exchange to an Approved Club Resort by INTERVAL.
6. "Individual Member" means any purchaser/owner of a Vacation Interest in the
CLUB properly enrolled in the INTERVAL NETWORK (whether by AFFILIATE,
transfer of membership, acceptance of a membership offer from INTERVAL, or
otherwise). Such individuals shall be described as holding Individual
Membership in INTERVAL. An Individual Member who is current in the payment
of membership fees prescribed by INTERVAL and who is in compliance with all
terms and conditions then in effect is referred to as an Individual Member in
good standing.
7. "Individual Membership Application" means the form or agreement
prescribed by INTERVAL, from time to time, for the enrollment of
Individual Members.
8. "Interval Marks" mean the following, registered or unregistered,
trademarks, service marks or trade names: "Five Star Logo,"
"Flexchange," "GoldCard," "interval," "Interval International,"
"Interval International and Logo," "Interval International Five Star
Award Program," "Interval International Traveler," "Worldex,"
"WorldCard," "WorldCard Preferred" and such other trademarks,
service marks and/or trade names as may at any time be owned or
claimed by INTERVAL, or its associated or related companies.
9. "Member Resort" means any resort which has entered into a written
agreement with INTERVAL to participate in the INTERVAL NETWORK.
10. "Resort Membership Application" means the form or forms completed by
AFFILIATE, or on behalf of AFFILIATE, for application to the
INTERVAL NETWORK, and includes all documents and exhibits and any
and all representations or undertakings, whether written or oral,
given or provided by AFFILIATE, or on AFFILIATE's behalf, to
INTERVAL in connection with this Club Affiliation Agreement, whether
before or after the Effective Date.
11. "Unit" means each hotel room, apartment, villa, suite, or other unit
of accommodation designed for occupancy.
12. "Unit Week" means the use and occupancy of a Unit for a one-week
period. Each Unit, therefore, has available for use and occupancy up
to fifty-two (52) unit weeks per year.
13. "Vacation Interest" means the ownership of or the right to use a
Unit and the amenities and facilities of a Vacation Ownership Resort
for a period of time equivalent to at least one week during any
given year, but not necessarily consecutive years, and which
ownership or right to use extends for a period of at least three
years.
14. "Vacation Ownership Resort" means one or more Units subject to the
same time share or other vacation ownership plan, together with any
other property, or rights to property, appurtenant to those Units.
B. TERM AND RENEWALS.
This Agreement commences upon execution by INTERVAL and continues
thereafter for a period of six (6) years from the Effective Date.
Thereafter, this Agreement will renew for additional periods of six (6)
years each only if each Party gives the other written notice, at least
ninety (90) days prior to the expiration of the initial term or any
subsequent six (6) year renewal term, of its intent to renew.
C. AFFILIATION FEE.
INTERVAL agrees that AFFILIATE shall not be obligated to pay an
affiliation fee to INTERVAL for any Approved Club Resorts.
D. INTERVAL NETWORK.
1. INTERVAL'S DUTIES
INTERVAL will provide:
(a) resort membership in the INTERVAL NETWORK, upon such terms and
conditions as are set forth in this Agreement, for the CLUB
and all Approved Club Resorts;
(b) an exchange program for use by Individual Members in
accordance with the Terms and Conditions of Individual
Membership and Exchange, as amended from time to time by
INTERVAL;
(c) promotional materials for use by AFFILIATE in accordance with
this Agreement, and thereafter, such additional materials as
INTERVAL may make available from time to time at such rates as
INTERVAL may establish for such materials; and
(d) such other benefits, privileges and/or discounts as INTERVAL
may have available from time to time to Individual Members in
good standing.
2. INDIVIDUAL MEMBERSHIP
(a) For all sales of Vacation Interests in the CLUB after the Effective Date of this
Agreement, AFFILIATE agrees to enroll all such purchasers of a Vacation
Interest in the CLUB as Individual Members during the term of this
Agreement. In connection with such enrollment, AFFILIATE agrees to
provide INTERVAL with a completed Individual Membership Application
executed by each purchaser of a Vacation Interest in the CLUB, and the
applicable individual membership fee in the amount and manner as is
mutually agreed upon by the Parties from time to time, subject to the
terms of subparagraph (b) below. Said Individual Membership
Application and individual membership fee shall be forwarded to
INTERVAL no later than thirty (30) days after the execution of a
purchase agreement by said purchaser, regardless of the actual date of
closing or escrow requirements for said purchase.
(b) (i) AFFILIATE agrees to provide INTERVAL with written
notice, on at least a monthly basis, of all purchasers
of Vacation Interests in the CLUB enrolled by AFFILIATE
as Individual Members, pursuant to subparagraph (a)
above, who subsequently rescind their purchase of
Vacation Interests in the CLUB ("Rescinding Members").
(ii) For so long as AFFILIATE is not in breach of this
Agreement, INTERVAL agrees to provide AFFILIATE with a
credit equal to the membership fee paid to INTERVAL less
a ten dollar ($10.00US) processing fee for those
Rescinding Members:
(A) enrolled by AFFILIATE as Individual Members of the
INTERVAL NETWORK within thirty (30) days of their
execution of a purchase agreement for a Vacation
Interest at the Project; and
(B) for whom AFFILATE notified INTERVAL of said
cancellation within sixty (60) days of such Individual
Member's enrollment in the INTERVAL NETWORK.
(iii) Any credit issued by INTERVAL pursuant to this Section
D, Paragraph 2, may be used by AFFILIATE to offset
future individual membership fees owed to INTERVAL with
respect to purchasers of Vacation Interests in the CLUB.
Such credit must be utilized by AFFILIATE within sixty
(60) days of issuance of such credit. Any credit not
utilized within said time period will be forfeited by
AFFILIATE and AFFILIATE acknowledges that in no event
will INTERVAL provide AFFILIATE with a cash refund for
any credit not utilized.
(c) AFFILIATE agrees to provide each purchaser of a Vacation
Interest in the CLUB with a then current version of the
INTERVAL Resort Directory. Such Resort Directory shall be
provided to the purchaser at the time of execution of a
purchase agreement. AFFILIATE agrees to purchase such Resort
Directories from INTERVAL, in minimum quantities of fifty (50)
directories per order, at the price prescribed by INTERVAL,
plus applicable postage charges. Such Resort Directories shall
be shipped to AFFILIATE C.O.D., unless otherwise agreed to by
INTERVAL. Additionally, AFFILIATE shall be entitled to deduct
from the fee payable to INTERVAL pursuant to subparagraph (a)
above the per unit cost paid by AFFILIATE (excluding any
applicable shipping or tax) of a Resort Directory.
3. PRECONSTRUCTION OR RENOVATION
(a) In the event the accommodations or facilities of any Approved Club
Resort are unavailable for occupancy due to construction or renovation,
AFFILIATE will advise each purchaser of a Vacation Interest in the CLUB
prior to enrollment with INTERVAL, that the purchaser will not be
entitled to utilize the INTERVAL NETWORK until his/her Unit Week and
the Approved Club Resort are available for occupancy as reasonably
determined by INTERVAL. An Approved Club Resort shall be deemed
"unavailable for occupancy" until such time as INTERVAL determines in
its good faith judgment that such resort is sufficiently complete to be
desirable for exchange (e.g., Units complete and fully furnished,
amenities available for use, any ongoing construction does not
interfere with the use and enjoyment of completed Units, amenities and
facilities). An Individual Member in good standing who is unable to
use the exchange privilege due to construction and/or renovation at an
Approved Club Resort shall be entitled to use such other benefits,
privileges and discounts as may be afforded to Individual Members from
time to time.
(b) In the event a portion of any Approved Club Resort is under
construction or renovation, AFFILIATE agrees that Exchange
Guests will be accommodated only in completely constructed or
renovated and fully furnished Units, and in Units where use
and enjoyment by the Exchange Guest will not be impaired by
the ongoing construction or renovation at the Approved Club
Resort.
(c) Notwithstanding an Approved Club Resort being unavailable for
occupancy due to construction or renovation, AFFILIATE'S
obligation to enroll all purchasers pursuant to Section D,
Paragraph 2(a) hereof shall not be waived.
4. TERMS AND CONDITIONS
(a) The terms and conditions of the INTERVAL NETWORK, including
but not limited to, the Terms and Conditions of Individual
Membership and Exchange, may be changed by INTERVAL from time
to time in its sole discretion.
(b) AFFILIATE agrees to comply with all procedures reasonably
established by INTERVAL, from time to time, for the operation
of the INTERVAL NETWORK.
5. EXCHANGE ACTIVITY
(a) AFFILIATE agrees to honor all Confirmations made by INTERVAL utilizing
Unit Weeks provided by AFFILIATE or Individual Members to INTERVAL from
time to time. If an Exchange Guest arrives at an Approved Club Resort
and the Unit confirmed by INTERVAL is not available when the Exchange
Guest arrives, AFFILIATE agrees to provide at AFFILIATE's expense
substitute accommodations (of the same or superior size and quality) at
the Approved Club Resort, or AFFILIATE shall provide such substitute
accommodations( of the same or superior size and quality) at a similar
location of comparable quality with amenities and facilities similar to
that available at the Approved Club Resort, for the same time period as
that originally confirmed. Additionally, AFFILIATE shall be
responsible for all expenses incurred by the Exchange Guest and/or
INTERVAL as a result of the confirmed Unit not being available at the
Approved Club Resort, including, without limitation, relocation
expenses. The provisions of this Paragraph shall survive the
expiration or termination of this Agreement.
(b) In the event it is necessary for AFFILIATE to change the
particular Unit into which an Exchange Guest has been
Confirmed, AFFILIATE agrees that the replacement Unit shall be
comparable or superior in all respects (including, without
limitation, the size of Unit, view from the Unit and amenities
available in the Unit) to the Unit into which INTERVAL issued
the Confirmation.
(c) AFFILIATE agrees not to require an Exchange Guest to attend a
sales presentation regarding the CLUB or any Club Resort.
(d) The Parties agree that certain Units at Approved Club Resorts may have
the ability to be divided into separate portions, capable of being
utilized as separate units (the "Lock-Off Units"). In order to be
considered as a separate unit capable of exchange by an Individual
Member, each portion of a Lock-Off Unit must have the prior written
approval of INTERVAL as meeting its quality standards and
requirements. To obtain such written approval, each portion of a
Lock-Off Unit must include at a minimum the following:
(i) Capability of being locked off privately with a soundproof
door (solid core) from the other portion;
(ii) Separate entrance and separate heating and cooling control;
(iii) One bedroom (minimum) and full bath;
(iv) Separate telephone lines;
(v) Microwave, mini-refrigerator, coffee pot, cookery and cooking
utensils;
(vi) Television;
(vii) Sink (wet bar); and
(viii) Dinnerware and Glassware for the number of
individuals the portion of the Lock-Off Unit will
accommodate.
A portion of a Lock-Off Unit which includes the above items
and which has been approved in writing by INTERVAL shall be
referred to as an "Acceptable Lock-Off Portion." An Individual
Member who secures a written reservation for a Lock-Off Unit
may exchange either the entire Lock-Off Unit or one or both
Acceptable Lock-Off Portions, depending on what the Individual
Members wishes to request in exchange. AFFILIATE acknowledges
and agrees that a Lock-Off Unit may in some instances contain
only one Acceptable Lock-Off Portion (i.e., only one portion
of the Lock-Off Unit meets the prescribed standards).
AFFILIATE further agrees that INTERVAL shall be entitled to
use a Lock-Off Unit as an entire unit or as separate
Acceptable Lock-Off Portions, at INTERVAL's sole discretion,
for exchange purposes.
(e) (i) INTERVAL agrees to accept exchange requests from
Individual Members without such Individual Members
actually relinquishing a Unit Week from an Approved
Club Resort at the time of request.
(ii) When INTERVAL receives an exchange request from such an
Individual Member, INTERVAL, acting through its affiliated
company, Interval Resort & Financial Services, Inc. ("IRFS"),
shall use reasonable efforts to verify, based on information
made available to INTERVAL and/or IRFS by the CLUB, that such
Individual Member is in good standing with the CLUB and
otherwise entitled to utilize the INTERVAL NETWORK prior to
issuing a Confirmation to such Individual Member.
(iii) AFFILIATE agrees to provide INTERVAL with comparable Unit
Weeks (in accordance with mutually agreed upon criteria) at
Approved Club Resorts in return for the Unit Weeks confirmed
to Individual Members through the INTERVAL EXCHANGE NETWORK.
Such Unit Weeks provided by AFFILIATE shall be during such
time periods and in such locations as may be reasonably agreed
upon by INTERVAL. It is further agreed that the number of
Unit Weeks owed by one party to the other pursuant to this
subparagraph should not exceed one hundred (100) Unit Weeks,
without the prior written consent of the party owed such Unit
Weeks.
E. AFFILIATE'S PROGRAM.
1. PHASING AND AMENITIES
AFFILIATE agrees that this Agreement encompasses all of the Units,
Unit Weeks, buildings, phases or resorts/hotels now or hereafter
constructed, acquired or leased for use in connection with the CLUB,
including, without limitation, any additional Units or Unit Weeks at
any Vacation Ownership Resorts set forth on Exhibit "A" as of the
Effective Date, which Units or Unit Weeks are acquired or leased by
AFFILIATE or the Club after the Effective Date; provided, however,
that the inclusion of all such Units, Unit Weeks, buildings, phases
or resorts/hotels shall be subject to: (a) AFFILIATE's submission of
all documentation reasonably required by INTERVAL; (b) adherence to
INTERVAL's affiliation standards and criteria in effect at time of
inclusion; and (c) ultimate approval by INTERVAL, which approval
will not be unreasonably withheld. In that connection, AFFILIATE
agrees to submit in a timely manner all such documentation
reasonably required by INTERVAL (including, but not by way of
limitation, a Resort Membership Application and Opinion Letter) for
the CLUB, and each Club Resort (as applicable). The initial Approved
Club Resorts are set forth on Exhibit "A" attached hereto. Exhibit
"A" shall be amended as new Club Resorts are accepted by INTERVAL as
Approved Club Resorts, or as Approved Club Resorts are suspended or
terminated by either Party.
2. REPRESENTATIONS AND WARRANTIES
(a) AFFILIATE represents and warrants that it or the CLUB owns the real
estate and improvements constituting the Approved Club Resorts or that
it has the right to convey use rights to the accommodations,
facilities and amenities comprising the CLUB and each Approved Club
Resort for the term specified in the sales documents provided to
prospective purchasers of Vacation Interests in the CLUB; that the
legal structure of the CLUB is in compliance with all applicable laws
and that the marketing of the CLUB is in compliance with all applicable
laws; that all monies paid by an individual to purchase a Vacation
Interest in the CLUB are placed in escrow or guaranteed by an
independent third party of standing until such time as the purchaser is
granted actual occupancy rights; that the legal structure of the CLUB
guarantees the purchaser the undisturbed use of the Units, amenities
and facilities comprising the CLUB for the duration of the Vacation
Interest purchased; that there are no proceedings pending or threatened
against or affecting AFFILIATE, the CLUB, the Approved Club Resorts, or
individuals or entities related thereto in any court or before any
governmental authority which involves the possibility of adversely
affecting the business or financial condition of AFFILIATE, the CLUB or
the Approved Club Resorts; that execution of this Agreement with
INTERVAL and its performance hereunder is binding upon AFFILIATE and
will not conflict with or result in a breach of any provision of any
other agreement, charter, by-law or other instrument to which
AFFILIATE, the CLUB or the Approved Club Resorts may be bound; and that
AFFILIATE, the CLUB and all Approved Club Resorts are in compliance
with, and will continue to comply with, all applicable laws and
regulations of any jurisdiction where compliance is required.
(b) AFFILIATE further agrees to provide INTERVAL, upon execution of this
Agreement by AFFILIATE, with an opinion letter from a licensed
independent attorney covering those items set forth in Exhibit "B"
attached hereto and made a part hereof for the CLUB and all existing
Club Resorts (as applicable). AFFILIATE understands and agrees that it
will not be entitled to represent the CLUB's participation in the
INTERVAL NETWORK until INTERVAL has received a satisfactory opinion
letter from such licensed independent attorney and has notified
AFFILIATE of same. Additionally, AFFILIATE agrees to provide INTERVAL
with an opinion letter from a licensed independent attorney covering
those items set forth in Exhibit "B" hereto for any Club Resort
constructed or acquired after the Effective Date of this Agreement.
Failure to provide such opinion letters or any material
misrepresentation of the warranties set forth above or any information
set forth in any Resort Membership Application or any supporting
documents provided in connection with this Agreement shall be grounds
for immediate termination of this Agreement by INTERVAL.
(c) AFFILIATE agrees that it will fully and accurately represent
and describe the use of the INTERVAL NETWORK to all
prospective purchasers of Vacation Interests in the CLUB.
AFFILIATE further acknowledges that full and accurate
representation is directly related to consumer satisfaction
with the exchange program.
(d) The Parties represent and warrant that the individuals
executing this Agreement on behalf of INTERVAL and AFFILIATE,
are officers of their respective organizations and duly
authorized to execute this Agreement on behalf of INTERVAL or
AFFILIATE, as the case may be.
3. DISCLOSURE
(a) AFFILIATE agrees to provide either INTERVAL's most recent disclosure
statement and/or the INTERVAL Resort Directory, or such other
publication which contains the complete and then current Terms and
Conditions of Individual Membership and Exchange, to all prospective
purchasers of Vacation Interests in the CLUB prior to their execution
of any contract for purchase. Notwithstanding the foregoing,
AFFILIATE shall provide INTERVAL's most recent disclosure statement if
required by law to do so.
(b) AFFILIATE further agrees to conspicuously include the
following statement, or a statement substantially similar to
the following, in its sales documents:
"This Club has an agreement with Interval International, Inc.
("Interval") of Miami, Florida, wherein Interval has agreed to
provide its Exchange Program to owners of vacation interests
in this Club. Interval is an independently owned and operated
service company. The developer/marketer of this Club is not an
agent for Interval and no representations or promises made by
such developer/marketer, or their agents, are binding on
Interval. Interval's responsibility for representations
regarding Interval's Exchange Program, as well as Interval's
current or future services, is limited to those made in
written materials furnished by Interval."
4. MAINTENANCE OF STANDARDS
(a) AFFILIATE acknowledges the necessity for and agrees to maintain a
program in order to assure the continued high standards of service,
appearance, cleanliness, quality and management as evidenced by the
Approved Club Resorts at time of execution of this Agreement and/or
acceptance of such Club Resort as an Approved Club Resort. AFFILIATE
further agrees to establish a program for the major renovations of the
Units, amenities, common elements and exteriors of the Approved Club
Resorts.
(b) If it should be deemed necessary by INTERVAL, as a result of
consumer complaints regarding the quality of an Approved Club
Resort, to inspect any Approved Club Resort, AFFILIATE shall
provide, without charge, suitable accommodations at the
Approved Club Resort for such INTERVAL representative, subject
to availability.
(c) It shall be considered prima facie evidence of failure to
maintain standards if INTERVAL receives resort evaluations
from Exchange Guests which rate an Approved Club Resort,
and/or the Units, facilities and/or amenities therein, below
the minimum level acceptable for participation in the INTERVAL
NETWORK, as reasonably determined by INTERVAL. INTERVAL will
advise AFFILIATE in writing of the contents of such
evaluations.
5. SALES REPRESENTATIONS
(a) AFFILIATE agrees to incorporate promotional materials
furnished by INTERVAL into its sales program regarding the
CLUB. Additionally, AFFILIATE agrees to fully and accurately
describe the use of the INTERVAL NETWORK to all prospective
purchasers in the CLUB. AFFILIATE further agrees not to make
any representations regarding the services of INTERVAL which
are not included in written materials either provided by
INTERVAL or which have not been approved by INTERVAL in
writing.
(b) AFFILIATE acknowledges and agrees that it will not rely upon
the INTERVAL NETWORK as the primary motivation for its sales.
Individual Membership in INTERVAL shall be represented as an
adjunct service to purchasers of Vacation Interests in the
CLUB.
(c) AFFILIATE further acknowledges and agrees that membership in
INTERVAL will not be offered as an investment interest or in
conjunction with the sale of a security.
(d) AFFILIATE agrees that all sales and marketing related to the CLUB shall
be the responsibility of AFFILIATE. AFFILIATE shall provide INTERVAL
with thirty (30) days prior written notice if any individual or entity
other than AFFILIATE is marketing the CLUB. INTERVAL may, in the
exercise of reasonable business judgment, prohibit such other
individual or entity from representing membership in INTERVAL in
conjunction with its marketing of the CLUB. Additionally, INTERVAL
reserves the right to suspend, indefinitely, AFFILIATE's authority to
represent the INTERVAL NETWORK to prospective purchasers in the event
that repeated complaints arise regarding sales practices related to the
CLUB.
(e) AFFILIATE agrees to immediately indemnify and hold INTERVAL
harmless against all actions, suits, demands, losses,
expenses, costs and fees, including attorneys' fees, and
liabilities of whatever kind and nature incurred by INTERVAL
arising out of or in connection with the sale or marketing of
Vacation Interests in the CLUB. The provisions of this
subparagraph (e) shall survive the expiration or termination
of this Agreement.
6. COLLATERAL MATERIALS
(a) The Resort Membership Applications, plans, renderings, blueprints,
models, designs, addenda, documents or other exhibits submitted by, or
on behalf of, AFFILIATE to INTERVAL contain representations of the
current or future design, configuration, legal structure and marketing
of the CLUB and/or Club Resorts. Such representations are specifically
incorporated into and made a part of this Agreement. Additionally,
AFFILIATE agrees to provide INTERVAL with plans, renderings, models,
designs, addenda or other documents reasonably requested by INTERVAL
with respect to a Club Resort.
(b) AFFILIATE agrees to provide INTERVAL with immediate notice of any
change in the information set forth in the Resort Membership
Applications, plans, renderings, blueprints, models, designs,
documents, addenda or such other exhibits submitted to INTERVAL with
respect to an Approved Club Resort. INTERVAL shall have the right to
terminate this Agreement upon thirty (30) days prior written notice if
there is any material change in such information and such material
change is not cured or resolved to INTERVAL's satisfaction within such
thirty (30) day period. Additionally, AFFILIATE acknowledges and
agrees that it shall be required to submit a legal opinion from a
licensed independent attorney, in a form satisfactory to INTERVAL, in
the event the CLUB will be marketed in areas not specifically addressed
in the legal opinion letter provided pursuant to Section E, Paragraph
2(b).
7. AUDIT INFORMATION
(a) AFFILIATE shall provide INTERVAL with the names, permanent addresses
and telephone numbers, the type of accommodations, Unit Week and unit
number purchased, if applicable, including the date of sale, for all
owners of Vacation Interests in the CLUB on an annual basis as of
December 31 of each year or as requested by INTERVAL in writing
throughout the term of this Agreement. Such information shall be
provided within twenty (20) days of the above-referenced date or within
twenty (20) days of INTERVAL's written request for said information.
AFFILIATE further agrees to provide, within twenty (20) days of
INTERVAL's written request, a list of all Unit numbers in each Approved
Club Resort, as well as the sleeping capacity for each such Unit and a
yearly calendar for such resort, and such other information about the
resort as may be reasonably requested by INTERVAL.
(b) AFFILIATE further agrees to provide INTERVAL with written
notice of any resale, foreclosure or other transfer of
ownership of any Vacation Interest in the CLUB upon AFFILIATE,
or it agents, becoming aware of same. Additionally, AFFILIATE
agrees to provide INTERVAL with prompt written notice in the
event any Individual Member rescinds his/her purchase of a
Vacation Interest in the CLUB.
(c) INTERVAL shall have the right to inspect the CLUB's sales and
ownership records, upon reasonable notice during normal
business hours, where such records may be kept.
8. CHARGES
(a) AFFILIATE agrees to impose the responsibility to pay any bed
tax, transient occupancy tax, VAT or similar tax levied by any
governmental body on the Individual Member who relinquishes a
Unit Week from an Approved Club Resort which is to be occupied
by an Exchange Guest.
(b) AFFILIATE acknowledges and agrees that the Exchange Guests shall be
responsible for all personal charges (e.g., telephone calls and meals),
as well as for any damage to the accommodations or a Club Resort's
amenities or facilities that they or their guests cause. Consequently,
AFFILIATE agrees that INTERVAL shall not be liable, and AFFILIATE
hereby releases INTERVAL from liability, for any loss incurred or
damage to the accommodations, facilities or amenities at a Club Resort
caused by an Exchange Guest or his invitees.
(c) AFFILIATE agrees to provide all Exchange Guests with the same rights
and privileges as those afforded to owners of Vacation Interests in the
CLUB. Additionally, AFFILIATE agrees that there shall be no fees
charged to Exchange Guests for use of any of the amenities or
facilities of the Approved Club Resorts or for any services relating to
the use and occupancy of the Unit Week including, but not limited to,
surcharges for electricity or air-conditioning or fees for the weekly
cleaning of the Unit or for gratuities, other than as specifically set
forth herein or in a Resort Membership Application for an Approved Club
Resort or as otherwise approved in writing by INTERVAL.
9. INSURANCE
AFFILIATE shall procure and maintain throughout the term of this
Agreement and any renewals hereof, at its sole cost and expense, a
protection and indemnity liability policy or policies, including
coverage for bodily injury, property damage, personal and
advertising injury occurring in connection with the CLUB, AFFILIATE
or any Club Resort, including all Approved Club Resorts. The policy
or policies shall have a standard thirty (30) day cancellation
clause and be in the minimum amount of One Million Dollars
($1,000,000.00) combined single limit for each occurrence. AFFILIATE
shall cause AFFILIATE, the CLUB, each Club Resort, including
Approved Club Resorts, INTERVAL, and its officers, directors,
employees, representatives and agents to be named insureds under the
policy or policies. AFFILIATE further represents that coverage shall
extend to INTERVAL's Exchange Guests and their invitees. AFFILIATE
shall deliver to INTERVAL a certificate of insurance evidencing the
aforesaid within thirty (30) days of AFFILIATE's execution of this
Agreement and annually upon renewal of the policy or policies. The
certificate and policy or policies shall further provide that no
less than thirty (30) days prior written notice will be given to
INTERVAL in the event of cancellation, material change, alteration
or amendment of the policy or policies.
F. USE OF NAME, LOGOS, SERVICE MARKS AND MATERIALS.
1. USE IN PROMOTIONAL MATERIALS
(a) INTERVAL agrees that AFFILIATE shall have the right to indicate in its
promotional materials that the CLUB and all Approved Club Resorts are
Member Resorts of INTERVAL. Additionally, AFFILIATE shall be entitled
to use in its promotional materials the Interval name and logo, and
such other Interval Marks that INTERVAL has advised AFFILIATE in
writing that it may use. INTERVAL, however, expressly prohibits the
use of any material describing or offering the services of INTERVAL
without first obtaining its prior written approval. INTERVAL further
reserves the right to prohibit the making of representations or the use
of material which, in the judgment of INTERVAL, do not accurately
reflect INTERVAL and the INTERVAL NETWORK.
(b) AFFILIATE acknowledges and agrees that INTERVAL is the owner
or licensee of the Interval Marks and agrees to observe such
reasonable requirements with respect to service xxxx and
trademark registrations as INTERVAL may require from time to
time, including without limitation, affixing an "(R)" adjacent
to all such registered marks in any and all uses thereof.
(c) Any use of the INTERVAL name and logo or any other Interval
Marks which INTERVAL has authorized AFFILIATE to use in
writing must fully and prominently disclose that AFFILIATE is
an independent organization and not affiliated with INTERVAL,
except as provided by this Agreement. AFFILIATE further
acknowledges and agrees that any goodwill associated with the
use of the INTERVAL name and logo or any other Interval Marks
shall inure directly and exclusively to INTERVAL.
2. RESTRICTIONS ON USE
(a) The rights arising under this Agreement are exclusive to the CLUB.
AFFILIATE shall not use the INTERVAL name and logo or any other
Interval Xxxx or otherwise make any reference to its participation in
the INTERVAL NETWORK in its promotional material in conjunction with
any other resort other than the Approved Club Resorts. AFFILIATE
further agrees not to use the names or photographs of other resorts
participating in the INTERVAL NETWORK in AFFILIATE's promotional
material without obtaining the prior written consent of INTERVAL and
such other resort. Notwithstanding the foregoing, this subparagraph
shall not be construed to prohibit AFFILIATE from using the names or
photographs of the Approved Club Resorts without INTERVAL's prior
written consent.
(b) AFFILIATE agrees that it will not, directly or indirectly,
register or attempt to register any of the Interval Marks or
any name or xxxx which is similar or likely to be confused
with the Interval Marks.
G. SALE, LEASE OR ASSIGNMENT.
1. AFFILIATE agrees to provide INTERVAL with sixty (60) days prior
written notice of its intent to sell or lease the CLUB (or a portion
thereof in bulk) or an Approved Club Resort (or a portion thereof in
bulk), or to assign this Agreement, to any third party.
2. Within thirty (30) days after receipt by INTERVAL of such written
notice from AFFILIATE, INTERVAL shall have the option to either:
(a) Consent to the assignment of this Agreement to such third
party if such sale or lease is in fact consummated. Concurrent
with the consummation of such sale or lease, AFFILIATE shall
cause such third party to agree in writing, in form and
substance satisfactory to INTERVAL, to perform under this
Agreement. An executed copy of such assumption agreement shall
be promptly delivered to INTERVAL. Notwithstanding the
foregoing, the sale or lease of the CLUB, or an Approved Club
Resort, or the assignment of this Agreement, and the agreement
of such third party to perform under the terms of this
Agreement, shall not relieve AFFILIATE of its obligation to
perform under the terms of this Agreement as it relates to the
CLUB and such Approved Club Resorts not subject to the sale,
lease or assignment; or
(b) Notify AFFILIATE of its intent to terminate this Agreement, which
notice of termination shall establish the date of termination ninety
(90) days after the date of receipt by INTERVAL of AFFILIATE's original
notice. If AFFILIATE shall not have consummated such sale, lease or
assignment by the established termination date to the third party named
in the original notice to INTERVAL, then the termination notice sent to
AFFILIATE shall be null and void, and this Agreement shall continue in
full force and effect.
3. The voluntary or involuntary sale, assignment, transfer or other
disposition of a controlling interest in AFFILIATE, the CLUB or an
Approved Club Resort (i.e., the possession, directly or indirectly,
of the power to direct the management and sales of the CLUB, whether
through ownership of stock, by contract or otherwise) shall be
deemed a sale or lease and shall be subject to the provisions set
forth in Paragraphs 1 and 2 of this Section G.
4. Subject to the foregoing paragraphs of this Section G, this
Agreement shall inure to the benefit of and be binding upon the
Parties hereto and their respective successors and assigns.
H. COVENANTS.
1. AFFILIATE agrees that it will at all times refrain from interfering
with or otherwise impairing the relationship between INTERVAL and
its members, including, but not limited to Individual Members and
Member Resorts.
2. (a) So long as INTERVAL continues to provide exchange services to
Individual Members, AFFILIATE agrees not to solicit, directly or
indirectly, nor to assist any third party, directly or indirectly, in
the solicitation of, Individual Members for membership or participation
in any exchange program or system of exchange other than the INTERVAL
NETWORK. Notwithstanding the foregoing, this paragraph shall not be
construed to allow AFFILIATE to solicit Individual Members or to assist
in the solicitation of Individual Members for membership or
participation in any other exchange program or system of exchange in
the event INTERVAL is required to suspend exchange privileges due to
AFFILIATE's failure to comply with the provisions of Section D,
Paragraph 5(a) of this Agreement.
(b) AFFILIATE has represented that it has an existing contractual
relationship with Resort Condominiums International, Inc.
("RCI"), pursuant to which AFFILIATE has agreed to solicit
purchasers of fixed-week intervals for membership or
participation in RCI's exchange program. AFFILIATE has also
represented, however, that it will not be actively offering or
marketing fixed-week and Club-based intervals at the same Club
Resort. Based on such representations, INTERVAL agrees that
AFFILIATE's solicitation of purchasers of fixed-week intervals
for membership or participation in RCI's exchange program
shall not be construed as a breach of this Section H,
Paragraph 2.
3. (a) AFFILIATE agrees that during the term of this Agreement
and for a period of one (1) year after this Agreement expires
or is terminated for any reason, AFFILIATE shall not, directly
or indirectly, without INTERVAL's prior written consent, hire,
employ or pay any person who was employed or paid by INTERVAL
during the term of this Agreement; or directly or indirectly
induce any such person to terminate or alter his/her
relationship with INTERVAL.
(b) INTERVAL agrees that during the term of this Agreement and for
a period of one (1) year after this Agreement expires or is
terminated for any reason, INTERVAL shall not, directly or
indirectly, without AFFILIATE's prior written consent, hire,
employ or pay any person who was employed or paid by AFFILIATE
during the term of this Agreement; or directly or indirectly
induce any such person to terminate or alter his/her
relationship with INTERVAL.
4. The provisions of this Section H shall survive the expiration or termination
of this Agreement.
I. SUSPENSION AND TERMINATION.
1. SUSPENSION
(a) In the event that AFFILIATE is in violation of any provision of this
Agreement, INTERVAL shall have the right, without prejudice to its
right to terminate this Agreement, to: (i) immediately suspend
processing of new memberships, Individual Membership renewals, the
exchange use of the INTERVAL NETWORK by Individual Members, and the
right of AFFILIATE to represent the INTERVAL NETWORK to prospective
purchasers of Vacation Interests in the CLUB; and/or (ii) impose such
other conditions as INTERVAL deems reasonably necessary.
(b) If INTERVAL determines, in the exercise of its reasonable
business judgment, that the continued operation of AFFILIATE,
the CLUB and/or an Approved Club Resort are in jeopardy,
INTERVAL shall have the right to suspend further performance
under this Agreement until such time as INTERVAL receives
satisfactory written assurances that the continued operation
of the CLUB, the Approved Club Resort and/or AFFILIATE are not
in jeopardy.
(c) If bankruptcy proceedings are filed by or against a Party, then
AFFILIATE (in the case bankruptcy proceedings are filed by or against
NTERVAL) or INTERVAL (in the case bankruptcy proceedings are filed by
or against AFFILIATE) may suspend all further performance of this
Agreement until such bankrupt Party assumes or rejects this Agreement
and adequate assurance of future performance by the bankrupt Party is
provided to the non-bankrupt Party. Any such suspension of further
performance by the non-bankrupt Party pending the bankrupt Party's
assumption or rejection will not be a breach of this Agreement and will
not affect the non-bankrupt Party's rights to pursue or enforce any of
its rights under this Agreement or otherwise.
(d) Notwithstanding the foregoing, in the event AFFILIATE and the
CLUB regain active status in the INTERVAL NETWORK, AFFILIATE
shall be obligated to enroll, as members of INTERVAL, all
purchasers of Vacation Interests in the CLUB while it was in a
suspended status.
2. TERMINATION
(a) This Agreement may be terminated by a Party immediately upon notice in
writing if:
(i) the other Party shall become insolvent; or
(ii) the other Party shall make an assignment for the benefit of
creditors.
(b) In the event that either Party defaults in the performance of
any of the provisions of this Agreement and fails to rectify
such default within thirty (30) days after receipt of written
notice specifying such default, or such additional period of
time as may be reasonably required to cure such default, this
Agreement may be terminated upon written notice to the
defaulting Party.
(c) INTERVAL shall have the right to terminate this Agreement upon
thirty (30) days prior written notice to AFFILIATE, in the
event that less than one hundred twenty-five (125) Individual
Members are enrolled within one year of the Effective Date, or
less than two hundred fifty (250) Individual Members are
enrolled within two years of the Effective Date.
(d) A pending merger between INTERVAL's parent company, CUC
International, Inc., and a third party has been announced and
it is acknowledged that said merger may result in the same
corporate entity owning both INTERVAL and RCI. In the event
that the ownership of both INTERVAL and RCI is vested in the
same corporate entity as a result of such merger, then
AFFILIATE may terminate its affiliation with INTERVAL upon
sixty (60) days' written notice to INTERVAL.
3. EFFECT OF TERMINATION
(a) In the event that this Agreement is terminated due to
AFFILIATE's failure to maintain the INTERVAL standards as
required by Section E, Paragraph 4 of this Agreement, INTERVAL
may suspend the exchange privileges of Individual Members, but
shall not be responsible for the reimbursement of any
Individual Membership fees previously paid to INTERVAL by
AFFILIATE.
(b) In the event this Agreement is terminated for any cause which in
INTERVAL's judgment will not impair the desirability or availability of
the Approved Club Resorts, INTERVAL may continue to provide its
exchange services to Individual Members until the expiration of the
current year of each such membership. All such Individual Members in
good standing shall be entitled to full benefits of Individual
Membership during that year. At the expiration of said year, INTERVAL
shall have the option of whether to allow renewals of said Individual
Memberships.
(c) AFFILIATE and INTERVAL agree to continue honoring all Confirmations
into the Approved Club Resorts made prior to termination of this
Agreement, as well as all Confirmations issued to Individual Members
prior to termination. Additionally, AFFILIATE agrees to honor all
Confirmations into Approved Club Resorts (even though such
Confirmations are issued after termination of this Agreement) in
accordance with Section D, Paragraph 5 for so long as Individual
Members elect to renew their membership with INTERVAL and INTERVAL
continues to provide exchange services to same.
(d) AFFILIATE expressly waives any claim or demand it may have for
refund of any affiliation fee or Individual Membership fees
(including any renewal fees) paid to INTERVAL prior to
termination of this Agreement.
(e) Upon termination or expiration of this Agreement, AFFILIATE
shall immediately discontinue: (i) representing the INTERVAL
NETWORK to purchasers; (ii) utilizing all INTERVAL materials
and equipment and shall return same to INTERVAL within thirty
(30) days thereafter; and (iii) utilizing all advertising
materials which contain the INTERVAL name, logos or any other
INTERVAL Marks or otherwise associate the CLUB and Approved
Club Resorts with INTERVAL.
(f) The provisions of this Paragraph 3 shall survive the
expiration or termination of this Agreement and shall continue
to govern the relationship between the Parties.
J. REMEDIES.
1. A Party shall be entitled to damages which it has incurred and injunctive or
other equitable relief for any violation by any other Party of the provisions
of this Agreement. In no event, however, shall either party be liable to the
other party for incidental, special or consequential damages. In addition,
the prevailing Party may recover all costs, including reasonable attorneys'
fees, incurred in such action or any appeal thereto or in otherwise obtaining
compliance with the terms of this Agreement, whether or not such matter
proceeds to the filing of a complaint. The Parties further agree that the
time of entitlement as to such fees and costs shall be the point at which
breach or default by the other occurs. The provisions of this Paragraph
shall survive the expiration or termination of this Agreement, and nothing
herein shall be construed to restrict the right to institute proceedings at
law or equity to obtain injunctive or other relief on account of any default
hereunder, whether or not a Party has exercised its rights to terminate this
Agreement.
2. The remedies set forth in this Agreement are not exclusive, and the
election of one remedy shall not prohibit the pursuit of other
available remedies.
K. INDEMNIFICATION.
1. INTERVAL agrees that it will protect, save, keep harmless and indemnify
AFFILIATE against and from any and all claims, demands, judgments, damages,
suits, losses, penalties, expenses, costs and liabilities of any kind or
nature whatsoever, including, but not limited to, reasonable attorneys' fees,
arising directly or indirectly out of a breach of this Agreement by INTERVAL,
its affiliates, officers, directors, employees, agents and representatives,
or the failure of INTERVAL to provide its exchange program to Individual
Members in accordance with its published terms and conditions.
Notwithstanding the foregoing, AFFILIATE acknowledges and agrees that
INTERVAL's total liability pursuant to this Paragraph shall be limited to the
fees paid to INTERVAL by AFFILIATE pursuant to this Agreement.
2. AFFILIATE agrees that it will protect, save, keep harmless and indemnify
INTERVAL against and from any and all claims, demands, judgments, damages,
suits, losses, penalties, expenses, costs and liabilities of any kind or
nature whatsoever, including, but not limited to, reasonable attorneys' fees,
arising directly or indirectly out of or in connection with: (a) a breach of
this Agreement by AFFILIATE, or its officers, directors, representatives,
agents, brokers, salespersons, associates or employees; (b) the negligence or
intentional misconduct of AFFILIATE, or its officers, directors,
representatives, agents, brokers, salespersons, associates or employees; or
(c) the operation/management of the CLUB and/or Club Resorts, including, but
not limited to, any claims made against INTERVAL for personal or bodily
injury occurring at any Club Resort.
3. The provisions of this Section K shall survive the expiration or termination
of this Agreement.
L. MISCELLANEOUS.
1. All notices provided for by this Agreement shall be deemed given if
in writing and delivered by hand, air express, or by registered or
certified mail, return receipt requested, to the addresses set forth
on page one of this Agreement or to such other address as may be
specified in accordance with this procedure.
2. Time shall be of the essence as to all provisions of this Agreement.
3. Should any part of this Agreement be declared invalid or
unenforceable for any reason, it shall be adjusted rather than
voided, if possible, to achieve the intent of the Parties. Any
invalidity resulting from the length of a period of time shall be
considered reduced to a period of time which would cure such
invalidity. In any event, the invalidity of any provision of this
Agreement, shall not affect any other provision of this Agreement
which shall be deemed valid and enforceable to the greatest extent
possible.
4. This Agreement shall be construed under the laws of the State of
Florida. The Parties acknowledge and agree that the Courts of Dade
County, Florida have proper and exclusive jurisdiction over the
Parties and the subject matter hereof in any legal action brought by
AFFILIATE against INTERVAL and, likewise, the Courts of Buncombe
County, North Carolina shall have proper and exclusive jurisdiction
over the Parties and the subject matter hereof in any legal action
brought by INTERVAL against AFFILIATE.
5. This Agreement is exclusively between and for the benefit of
INTERVAL and AFFILIATE. Nothing herein shall be construed to make
any purchaser, Exchange Guest, Individual Member, participating
resort or other individual or entity, a third party beneficiary to
this Agreement.
6. The failure of either Party to exercise any power given it hereunder or to
insist upon strict compliance with the terms of this Agreement shall not
constitute a waiver of that Party's right to demand exact compliance with the
terms hereof. Waiver by a Party of any particular default by the other shall
not affect or impair its rights with respect to any subsequent defaults of
the same or of a different kind; nor shall any delay or omission by a Party
to exercise any rights arising from any default affect or impair its right as
to such default or any future default. Further, no custom or course of
dealings of the parties at variance with the terms hereof shall constitute a
waiver of that Party's right to demand later compliance.
7. The Parties hereby acknowledge and agree that their relationship is
that of independent contractor, nothing in this Agreement nor the
relationship between the Parties hereto shall be construed to create
a partnership, joint venture or agency relationship. Neither Party
shall have the power or authority to bind or obligate the other or
to incur liability for the other.
8. This Agreement shall be construed without regard to any presumption
or other rule requiring construction against the Party causing this
Agreement to be drafted.
9. The headings and captions in this Agreement are for convenience only and
shall not be referred to in the interpretation of this Agreement.
10. This Agreement may be executed in counterparts, each of which shall
be deemed an original but all of which taken together shall
constitute one and the same Agreement.
11. In the event of doubt or discrepancy between the English text of
this Agreement and the text of this Agreement in other languages,
the English text shall prevail. AFFILIATE, by signing below, hereby
acknowledges receipt of a copy of this Agreement in the English
language.
12. This Agreement contains the entire agreement of the Parties with
respect to the subject matter hereof, and supersedes any oral or
written representation, inducement or promise not contained herein
and may not be modified, except in writing signed by the Party
against whom enforcement is sought.
IN WITNESS WHEREOF, the Parties have hereunto set their hands and seals.
PEPPERTREE RESORTS VACATION CLUB, INC.
By:__/s/____________________________
Authorized Officer
Name: Xxxx XxXxxxxxx
Title: Senior Vice President
Accepted in Miami, Florida this 17th day of September, 1997.
INTERVAL INTERNATIONAL, INC.
By:__/s/____________________________
Xxxxx X. Xxxx
President and
Chief Executive Officer
g:\legal\wpfiles\pepptree\caa5.doc
EXHIBIT "A"
APPROVED CLUB RESORTS
Unit
Resort Name Address Configuration
Peppertree Xxxxxx Valley Xxxxx Farm Road 2 Bedroom
Xxxxxx Valley, N.C.
Peppertree Atlantic Beach 000 X. Xx. Xxxxx Xxxx 1-, 2-, and 3-Bedroom
Atlantic Beach, N.C.
Blue Ridge Village Xxxxx 0, Xxx 000, Xxx. 000 1-,2-, and 3-Bedroom
Banner Elk, N.C.
Peppertree By The Sea 000 Xxxxx Xxxxx Xxxx. 1- and 2-Bedroom
N. Myrtle Beach, S.C.
Peppertree Outer Banks 0 Xxxx Xx., X.X. Xxx 0000 1-, 2-, and 3-Bedroom
Beach Club Kill Devil Hills, N.C.
Peppertree Laurel Point 805 Ski Mountain Rd. 2-Bedroom
Gatlinburg, TN.
Peppertree Asheville One Holiday Inn Dr. Effy, 1-Bedroom
Vacation Club Asheville, NC
Peppertree Fontana Hwy. NC 28 2-Bedroom
Village Fontana Dam, NC
Peppertree Ocean Club 0000 X. Xxxxx Xxxx. Effy, 1-, 2-, and 0-
X. Xxxxxx Xxxxx, XX Bedroom
Peppertree Sandpebble 000 Xxxxxxxx Xxx. 1- and 2-Bedroom
Beach Club Garden City, SC
EXHIBIT "A" (CONTINUED)
APPROVED CLUB RESORTS (CONTINUED)
Unit
Resort Name Address Configuration
----------- ------- -------------
Peppertree Sands 000 Xxxxx Xxxxx Xxxx. 1- and 2-Bedroom
N. Myrtle Beach, SC
Peppertree Sea 000 Xxxxxxxx Xxxxxx 2-Bedroom
Mystique Garden City, SC
Peppertree Tamarack E10037 Xanadu Rd. 1- and 2-Bedroom
Wisconsin Dells, WI
EXHIBIT "B"
OPINION LETTER REQUIREMENTS
The following must be addressed in an Opinion Letter from an independent
licensed attorney (qualified to render an opinion with respect to the laws and
regulations of the relevant jurisdictions) pursuant to Section E, Paragraph 2(b)
of the Club Affiliation Agreement:
1. The name of the entity (or entities) that owns title to the property which
is the subject of the Club Affiliation Agreement, including what entity
owns the underlying land, the units and the amenities and facilities of
each of the Club Resorts, and the relationship of such entity (or
entities) to AFFILIATE (if other than AFFILIATE).
2. A complete description of AFFILIATE's interest in the real estate (and improvements
thereon) which is the subject of the Club Affiliation Agreement (e.g. leasehold
interest) if AFFILIATE does not hold fee title.
3. A complete description of the type of vacation ownership interests that
will be conveyed to purchasers (e.g., fee title or contractual occupancy
rights for a term of years), and the name of the entity conveying fee
title, or, as the case may be, contractual occupancy rights, to purchasers
in the CLUB and the relationship of such entity to AFFILIATE (if other
than AFFILIATE).
4. Confirmation that the legal structure of the CLUB is in compliance with
all applicable local, state, and federal laws and regulations where Club
Resorts are located.
5. Confirmation that the marketing of the CLUB is in compliance with all
applicable local, state, and federal laws and regulations, where the CLUB
will be marketed, as well as a statement of where the CLUB will be
marketed.
6. Whether or not purchase monies are escrowed or guaranteed by an independent third
party of standing (e.g., a bank, trust company, or attorney) until the purchaser
receives occupancy rights. If so, by whom and when are such monies released.
7. A description of how the legal structure of the CLUB provides purchasers
with the undisturbed use of the units, amenities and facilities comprising
the CLUB for the duration of the vacation ownership interest purchased.
The Opinion Letter should describe, at a minimum, the legal protection
afforded a purchaser in the event of:
(a) AFFILIATE's failure to complete Club Resorts or otherwise perform under its
agreement with a purchaser;
(b) bankruptcy or insolvency of AFFILIATE or the CLUB;
(c) a default under any existing encumbrance on Club Resorts;
(d) recordation of mortgages or liens against Club Resorts subsequent to the
conveyance or transfer of the vacation ownership interest to a purchaser; and
(e) sale of the underlying fee of Club Resorts.
8. Confirmation that the person (including the person's name and title)
executing the Club Affiliation Agreement has the authority to bind
AFFILIATE.
