Pre-Effective Amendment to Registration Statement for Securities of a Real Estate Company — Form S-11
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-11/A Pre-Effective Amendment 19 59K
8: EX-3.A Articles of Incorporation 1 8K
9: EX-3.B Bylaws 15± 61K
10: EX-3.C Organizational Consent of Directors 3± 12K
2: EX-4.A Construction and Sales Agreement 11± 44K
3: EX-4.B Rental Pooling and Agency Agreement 19± 79K
4: EX-4.C Preliminary Price List 1 6K
13: EX-8 Opinion re: Tax Matters 2± 11K
5: EX-10.A Draft Condominium Declaration 28± 123K
6: EX-10.B Draft Articles of Incorporation 3± 12K
7: EX-10.C Draft Bylaws 12± 42K
11: EX-10.D Draft Management and Use Agreement 9± 34K
12: EX-10.E Use and Access Agreement 5± 22K
14: EX-17 Unit Description 2 15K
15: EX-18 Economic Model and Information 17 57K
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 does not intend to hold the Unit for
his/her exclusive personal use, but rather 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 first-class 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 intending to offer their
Unit(s) for rent or lease, 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:
Name of Type of Unit Number of Units in Description
Pool in Pool Rental Pool
Pool A A, A-1 38 One Room
Pool B B, B-1 19 One
Room/Loft
Pool C C, C-1 40 One Bedroom
Pool D D, D-1 20 One
Bedroom/Loft
Pool E E 8 Master
Bedroom
Pool F F 4 Three
Bedroom/Loft
Pool G G/H 4 One/Two
Bedroom(s)
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 first-class
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;
(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 a first-class condition as a prestigious
resort hotel;
(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;
(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.
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 the Unit for a total of ten (10) nights during any one (1) calendar
year within an Owner's own Rental Pool ("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. 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 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 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.
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 into seven (7) different Rental Pools and
the Company shall allocate monthly to Owner's Hotel account an amount
equal to the Gross Room Revenues of the Unit 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 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 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 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
Advisory Board
7.1 Advisory Board. The Owners shall select, at their annual
meeting of the Association, five of their number to act as an advisory
group (the "Advisory Board") to the Company in the operation of the Rental
Pools and to discuss with the Company any suggestions the Owners may have
given the Advisory 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 Advisory Board at
least quarterly at the Hotel Condominium Project upon the request of the
Advisory Board. The actions of the Advisory 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 complaints, suggestions and
comments of any Owner shall be directed to the Company by and through the
Advisory 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
Advisory Board 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, 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, 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
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.
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 WILBAR, 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 WILBAR, 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:
(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 Wilbar, 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
511 E. Adams Street
Wisconsin Dells, WI 53965
With a Copy to: Attorney Timothy C. Sweeney
and Attorney Patrick S. Sweeney
Sweeney & Sweeney, S.C.
440 Science Drive, 4th Floor
Madison, WI 53711
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 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.
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
thereof. 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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