As filed with the Securities and Exchange Commission on
October 7, 1996
Registration No. ________
=================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM S-11
REGISTRATION STATEMENT
Under
The Securities Act of 1933
____________________
CHARTHOUSE SUITES VACATION OWNERSHIP, INC.
(Exact name of registrant as specified in governing instrument)
250 PATRICK BOULEVARD
BROOKFIELD, WISCONSIN 53045
(414) 792-9201
(Address of principal executive offices)
Jeffrey L. Keierleber
c/o Charthouse Suites Vacation Ownership, Inc.
250 Patrick Boulevard
Brookfield, Wisconsin 53045
(414) 792-9201
(Name and address of agent for service)
Copy to:
Conrad G. Goodkind, Esq.
Quarles & Brady
411 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
(414) 277-5000
____________________
Approximate date of commencement of proposed
sale of the securities to the public:
As soon as practicable after this Registration Statement
becomes effective.
____________________
CALCULATION OF REGISTRATION FEE
=================================================================
Proposed Proposed
Title of maximum maximum Amount of
Securities Amount offering aggregate regis-
being being price per offering tration
registered registered Interest price fee
_________________________________________________________________
Vacation
Investment and
Ownership
Interests 150 $17,000 (A)
Classes A-F Interests $61,000 (F) $4,200,000 $1,273
=================================================================
The registrant hereby amends this registration statement on
such date or dates as may be necessary to delay its effective
date until the registrant shall file a further amendment which
specifically states that this registration statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine. If the filing fee
is calculated pursuant to Rule 457(o) under the Securities Act,
only the title of the class of securities to be registered, the
proposed maximum aggregate offering price for that class of
securities and the amount of registration fee need to appear in
the Calculation of Registration Fee table. Any difference
between the dollar amount of securities registered for such
offerings and the dollar amount of securities sold may be carried
forward on a future registration statement pursuant to Rule 429
under the Securities Act.
=================================================================
<PAGE>
CHARTHOUSE SUITES VACATION OWNERSHIP, INC.
Cross Reference Sheet
Showing location in Prospectus of information required to be
included in Prospectus in response to items of Form S-11.
Item Number and Caption Heading in Prospectus
1. Forepart of Registration Cover Page of Prospectus
Statement and Outside Front
Cover Page of Prospectus
2. Inside Front and Outside Back Outside Back Cover
Cover Pages of Prospectus of Prospectus
3. Summary Information, Risk Summary; Risk Factors
Factors and Ratio of Earnings
to Fixed Charges
4. Determination of Offering Price Determination of
Offering Price
5. Dilution Not Applicable
6. Selling Security Holders Not Applicable
7. Plan of Distribution Plan of Distribution
8. Use of Proceeds Use of Proceeds
9. Selected Financial Data Not Applicable
10. Management's Discussion Not Applicable
and Analysis of Financial
Condition and Results of
Operations
11. General Information as The Company
to Registrant
12. Policy with Respect to The Company
Certain Activities
13. Investment Policies of Registrant Not Applicable
14. Description of Real Estate Description of The
Charthouse Suites Hotel
15. Operating Data Not Applicable
16. Tax Treatment of Registrant Certain Federal Income
Tax
and its Security Holders Considerations; Certain
Florida Tax Matters
17. Market Price of and Not Applicable
Dividends on the Registrant's
Common Equity and Related
Stockholder Matters
18. Description of Registrant's The Interests
Securities
19. Legal Proceedings Legal Matters
20. Security Ownership of Management
Certain Beneficial Owners
and Management
21. Directors and Executive Officers Management
22. Executive Compensation Not Applicable
23. Certain Relationships and Interests of Management
Related Transactions and Affiliates
24. Selection, Management and Interests of Management
Custody of Registrant's and Affiliates
Investments
25. Policies with Respect to Interests of Management
Certain Transactions and Affiliates
26. Limitations of Liability The Interests
27. Financial Statements and Financial Statements and
Information Related Information
28. Interest of Named Experts Experts
and Counsel
29. Disclosure of Commission Liability and Indemni-
Position on Indemnification fication of Officers
for Securities Act Liabilities and Directors
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR
AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE
ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL
OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY
SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF SUCH STATE.
PROSPECTUS Subject to Completion, dated October 7, 1996
_______________
Charthouse
Suites
Vacation
Investment and Ownership
Interests
=================================================================
_________________________________________________________________
__
/ / 150 Charthouse Suites Vacation Investment and Ownership
__ Interests
_________________________________________________________________
__
/ / Charthouse Suites Vacation Investment and Ownership
__ Interests Cost Between $17,000 (A Class Interest) and
$61,000 (F Class Interest) per Interest -- Minimum
Purchase of One Interest
_________________________________________________________________
Holders of Charthouse Suites Vacation Investment and Ownership
Interests (the "Interests") have the rights and responsibilities
as set forth in the Charthouse Suites Vacation License Plan,
including the right to rent or use a certain suite category in
the Charthouse Suites hotel in Clearwater Beach, Florida, for two
weeks of every Spring, Summer, Fall and Winter in each year until
December 31, 2050. See "The Interests."
The Interests are transferable with the consent of the Company,
which will be granted in its reasonable discretion, although the
sale, assignment, or transfer of partial Interests is subject to
certain restrictions. See "The Interests--Transferability of
Interests." If fewer than 76 Interests are sold by December 31,
1997, Charthouse Suites Vacation Ownership, Inc. (the "Company")
has an option to cancel the underlying licenses and return the
entire paid subscription amount, reduced by certain payments and
benefits received, to Investors. There is no minimum
subscription amount. See "Plan of Distribution." Funds will be
escrowed for 10 days pursuant to Chapter 721, Florida Statutes;
otherwise there are no arrangements to place any proceeds in
escrow, trust or a similar arrangement.
_________________________________________________________________
See "RISK FACTORS" for a discussion of certain factors that
should be considered by prospective purchasers.
<PAGE>
_________________________________________________________________
There is no market for the Interests being offered hereunder and
no public market is expected to develop as a result of this
Offering. There can be no assurance that the Interests can be
resold for the Offering price, if at all. Accordingly, Interests
should be purchased only as a long-term investment since Holders
may not be able to sell the Interests in the event of an
emergency or for any other reasons and must also commit to pay
certain annual dues and special assessments, if any.
_________________________________________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
_________________________________________________________________
<PAGE>
Per Interest
Price to the Sales Proceeds to
Public Commissions(1) the Company(2)
A Class - Standard
Studio Suite $ 17,000 $ 1,700 $ 15,300
(36 Interests)
B Class - King Bed
Studio Suite $ 20,000 $ 2,000 $ 18,000
(24 Interests)
C Class - Large
Studio Suite $ 26,500 $ 2,650 $ 23,850
(36 Interests)
D Class - 1 Bedroom
Suite (36 Interests) $ 36,500 $ 3,650 $ 32,850
E Class - 1 Bedroom
Suite (With lanai) $ 39,500 $ 3,950 $ 35,550
(12 Interests)
F Class - Penthouse
- (6 Interests) $ 61,000 $ 6,100 $ 54,900
Total Maximum Offering
(150 Interests) $4,200,000 $420,000 $3,780,000
(1) The Company has agreed to indemnify the Underwriter and
broker-dealers who are selling the Interests on a best
efforts basis against certain liabilities, including
liabilities under the Securities Act of 1933, as amended.
See "Plan of Distribution."
(2) Before deducting offering expenses payable by the Company
estimated at $________.
_________________________________________________________________
The date of this Prospectus is ___________ __, 1996.
<PAGE>
Until ________ all dealers effecting transactions in the
Investments, whether or not participating in this distribution,
may be required to deliver a prospectus. This is in addition to
the obligation of dealers to deliver a prospectus when acting as
Underwriter.
No dealer, salesperson or any other person has been
authorized to give any information or make any representations
other than those contained in this Prospectus and supplemental
literature authorized by the Company and referred to in this
Prospectus, and, if given or made, such information and
representations must not be relied upon. This Prospectus does
not constitute an offer to sell or a solicitation of an offer to
buy any of the securities offered hereby in any state to any
person to whom it is unlawful to make such offer. Neither the
delivery of this Prospectus nor any sale made hereunder shall
under any circumstances create any implication that there has
been no change in the affairs of the Company since the respective
dates at which information is given herein, or the date hereof.
However, if any material change in the affairs of the Company
shall occur during the time when a copy of this Prospectus is
required to be delivered, the Company will amend or supplement
this Prospectus to reflect such change.
<PAGE>
TABLE OF CONTENTS
Page
SUMMARY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . 7
THE COMPANY. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
DESCRIPTION OF THE CHARTHOUSE SUITES HOTEL . . . . . . . . . . . 11
DESCRIPTION OF MASTER LICENSE AGREEMENT. . . . . . . . . . . . . 12
THE INTERESTS. . . . . . . . . . . . . . . . . . . . . . . . . . 12
ANNUAL DUES AND SPECIAL ASSESSMENTS. . . . . . . . . . . . . . . 16
GUARANTEED RENTAL ARRANGEMENT. . . . . . . . . . . . . . . . . . 18
LICENSE PAYMENT OPTIONS. . . . . . . . . . . . . . . . . . . . . 20
DETERMINATION OF OFFERING PRICE. . . . . . . . . . . . . . . . . 20
USE OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . . . . . 21
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . 21
HOW TO SUBSCRIBE . . . . . . . . . . . . . . . . . . . . . . . . 22
SUMMARY OF PROMOTIONAL AND SALES MATERIAL. . . . . . . . . . . . 22
CAPITALIZATION . . . . . . . . . . . . . . . . . . . . . . . . . 22
OPERATION AND OPERATING STRATEGY OF CHARTHOUSE SUITES HOTEL. . . 22
MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
INTERESTS OF MANAGEMENT AND AFFILIATES . . . . . . . . . . . . . 24
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS. . . . . . . . . . . . 25
CERTAIN FLORIDA TAX MATTERS. . . . . . . . . . . . . . . . . . . 35
LIABILITY AND INDEMNIFICATION OF OFFICERS AND DIRECTORS. . . . . 37
LEGAL MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . 38
EXPERTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
FINANCIAL STATEMENTS AND RELATED INFORMATION . . . . . . . . . .F-1
ANNEX A
CHARTHOUSE SUITES VACATION LICENSE PLAN. . . . . . . . . .Annex A-1
ANNEX B
RULES AND REGULATIONS FOR CHARTHOUSE SUITES HOTEL SUITES .Annex B-1
ANNEX C
TIME SHARE PUBLIC OFFERING STATEMENT . . . . . . . . . . .Annex C-1
ANNEX D
SUBSCRIPTION AGREEMENT . . . . . . . . . . . . . . . . . .Annex D-1
ANNEX E
SCHEDULE OF WEEKS. . . . . . . . . . . . . . . . . . . . .Annex E-1
<PAGE>
SUMMARY
Charthouse Suites Vacation Investment and Ownership Interests
The following Summary is qualified in its entirety by
reference to the more detailed information contained elsewhere in
this Prospectus and the Annexes and Exhibits thereto.
Capitalized terms used, but not defined in this Summary, are
defined elsewhere in this Prospectus. Prospective purchasers are
urged to read and evaluate this Prospectus and the Annexes and
Exhibits in their entirety.
Charthouse Suites Vacation Ownership, Inc., a Florida
corporation (the "Company" or "Charthouse"), hereby offers Class
A, Class B, Class C, Class D, Class E, and Class F Interests
(collectively hereafter the "Interests") for sale to investors.
The purchaser of an Interest (a "Holder") will have the right to
rent or use for two specific and consecutive weeks of every
Spring, Summer, Fall, and Winter Season in each year until
December 31, 2050, a category of hotel room or suite
(collectively referred to as suite) of a certain category in the
Charthouse Suites hotel located in Clearwater Beach, Florida. A
Holder will receive rental income from the rental of the hotel
suite through the Charthouse Suites rental pool, if any, or upon
30 days notice to Charthouse, have the right to use one or more
of the eight weeks ("Unit Weeks") each year, or join RCI Travel
and utilize the RCI Travel Vacation Exchange Program to exchange
Unit Weeks at the Charthouse Suites hotel for vacation weeks at
approximately 2,800 RCI affiliated resorts located around the
world.
The Interests The 150 Interests consist of 36
A Interests for $17,000 each, 24
B Interests for $20,000 each, 36
C Interests for $26,500 each, 36
D Interests for $36,500 each, 12
E Interests for $39,500 each, and six
F Interests for $61,000 each. Each
class of Interest entitles an owner
thereof to rental proceeds from the
Charthouse rental pool or, upon request,
use of a corresponding class of Unit
Week in the Charthouse Suites hotel.
See "The Interests."
Charthouse Suites The Charthouse Suites hotel is a four
Hotel story hotel located on Clearwater Bay at
850 Bayway Boulevard, Clearwater Beach,
Florida. The Charthouse Suites hotel is
owned by Decade Properties, Inc. The
hotel consists of 25 hotel rooms and
features a heated swimming pool,
attached marina (which will remain owned
and operated by Decade Properties, Inc.
even after this offering), laundry room,
and access to white sand beaches,
recreation, dining, nightlife and
shopping. See "Description of the
Charthouse Suites Hotel."
The Company The Company has been formed to
facilitate the sale of licenses to use
the Charthouse Suites hotel and has the
right to sell Interests pursuant to a
Master License Agreement between the
Company and Decade Properties, Inc.,
owner of the Charthouse Suites hotel.
Owners of the Interests will not acquire
an ownership or equity interest in the
Company or the Charthouse hotel, but
pursuant to the Charthouse Suites
Vacation License Plan will acquire a
license right to rent or use Unit Weeks
corresponding to a certain category
hotel suite. See "The Company."
The Company's offices are at 250 Patrick
Boulevard, Brookfield, Wisconsin 53045,
Telephone 414-792-9200. The Company is
owned by Jeffrey Keierleber. Affiliates
of the Company will provide management
and consulting services to the Company
and administer the Charthouse rental
pool pursuant to agreements with
Charthouse. See "The Company."
A Interests Rights The ownership of A Interests allows a
Holder use of a standard studio hotel
suite for two weeks in each season until
December 31, 2050. See "The Interests."
B Interests Rights The ownership of B Interests allows a
Holder use of a king bed studio suite
overlooking the marina and Clearwater
Bay for two weeks in each season until
December 31, 2050. See "The Interests."
C Interests Rights The ownership of C Interests allows a
Holder use of a large studio suite
overlooking Clearwater Bay, the marina,
or southern exposure for two weeks in
each season until December 31, 2050.
See "The Interests."
D Interests Rights The ownership of D Interests allows a
Holder use of a large one bedroom suite
overlooking the marina, Clearwater Bay,
the swimming pool, or the southern
exposure for two weeks in each season
until December 31, 2050. See "The
Interests."
E Interests Rights The ownership of E Interests allows a
Holder use of a large one bedroom suite
(with a large lanai) with a view of the
Clearwater Bay for two weeks in each
season until December 31, 2050. See
"The Interests."
F Interests Rights The ownership of F Interests allows a
Holder use of a two bedroom penthouse
suite, with a fully equipped kitchen,
living room, den, dining room, two full
baths (one with a jacuzzi), and a large
balcony overlooking the Charthouse
marina and Clearwater Bay for two weeks
in each season until December 31, 2050.
See "The Interests."
License The licensee's rights obtained by a
Holder upon purchase of the Interests
are set forth in the Charthouse Suites
Vacation License Plan, and the
Charthouse Suites Rules and Regulations
which are set forth as Annex A and B,
respectively. See "The Interests" for a
summary of the Charthouse Suites
Vacation License Plan.
Licensing Payments Investors may pay for the Interests
either in cash upon subscription or in
installments over part of the license
term. If paying by installment, a
minimum of 25% of the purchase price is
due upon acceptance of a subscription
agreement (after any applicable cash
discounts). All initial subscription
payments will be placed in escrow for at
least 10 days. Under the installment
payment program, the remaining balance
on the Interest will be payable in 360
monthly installments before the first
day of each month and the unpaid balance
on each license payment increases by 9%
annually. See "License Payment
Options."
A Holder who chooses to make installment
payments must be current on all
licensing payments and annual dues and,
if any, special assessments, in order to
rent, use or exchange the Unit Week. If
not current on all payments, a Holder
will forfeit all rights to the Unit
Weeks and if such default continues for
more than six months or if there are
more than three defaults of any
duration, the Company may cancel the
Interest pursuant to the terms of the
Charthouse Suites Vacation License Plan.
Upon cancellation for failure to pay, a
Holder will have no further rights to
the hotel or refund for past amounts
paid. See "License Payment Options."
Charthouse Rental Pool Each Holder of Interests will be
automatically placed in the Charthouse
rental pool and upon 30 days written
notice to Charthouse, a Holder may
withdraw any or all of the Holder's
allotted Unit Weeks from the Charthouse
rental pool. A Holder may only withdraw
entire weeks from the Charthouse rental
pool. Under the Charthouse rental pool,
Charthouse will attempt to rent the
suite to others on a daily or weekly
basis and the Holder will share pro rata
in the rentals of all suites that are placed
in the Charthouse rental pool. There is a
fee payable to Decade Properties, Inc.
equal to 5% of the rental revenue, plus
reimbursement of the costs as a common
expense under the Charthouse Suites
Vacation License Plan for operating the
rental pool. See "The Interests -- Use
Options."
Guaranteed Rental As an incentive to early purchasers,
Arrangement or Cash Holders may elect to receive guaranteed
Discount Program rental payments, at varying rates, for
their Unit Weeks for a specified number
of weeks. Under this Guaranteed Rental
Arrangement, Investors who purchase by
[within six months of the Effective Date
of the Registration Statement] may put
six weeks to the Company and receive a
guaranteed rental rate, which varies
depending upon the class of Interest.
Investors purchasing [between six months
and nine months of the Effective Date of
the Registration Statement] may put four
weeks and receive a guaranteed rental
rate, which varies depending upon the
class of Interest. Investors purchasing
between [nine months and one year of the
Effective Date of the Registration
Statement] may put two weeks on the same
terms. Investors purchasing after one
year of the Effective Date of the
Registration Statement are not eligible
to participate in this Guaranteed Rental
Arrangement. See "Guaranteed Rental
Agreement" for a description of the
arrangement, the guaranteed rates, and
certain conditions.
In lieu of the Guaranteed Rental
Arrangement, early Investors may elect
to receive a cash discount to the
subscription price by surrendering
rights to the Guaranteed Rental
Arrangement. Investors purchasing by
[six months of the Effective Date of the
Registration Statement] may elect to
receive a 5% discount from the purchase
price of an Interest. Investors
purchasing between [six months and nine
months of the Effective Date of the
Registration Statement] may elect to
receive a 3% cash discount from the
purchase price of an Interest, Investors
between [nine months and one year of the
Effective Date of the Registration
Statement] may elect to receive a 1-1/2%
discount from the purchase price of an
Interest, and Investors purchasing after
one year of the Effective Date of the
Registration Statement may not
participate in this cash discount
program. See "Guaranteed Rental
Arrangement."
Annual Dues and Holders will be responsible for a
Special Assessments proportionate share of the annual
maintenance and other related costs,
expenses and reserves of the Charthouse
Suites Hotel. For the years ended
December 31, 1996 and 1997, the dues for
each unit week of the Interests (each
Interest has eight Unit Weeks) will be
$175 for Class A Interests, $175 for
Class B Interests, $190 for Class C
Interests, $270 for Class D Interests,
$290 for Class E Interests, and $350 for
Class F Interests. The amount of annual
dues will be set by the Company based
upon the expenses of operating the hotel
and the Charthouse rental pool and
providing services and will be
proportionately allocated to Holders as
set forth in the Charthouse Suites
Vacation License Plan and cannot
increase annually by more than 10% of
the prior year's dues (exclusive of the
allocable percentage of the property tax
and insurance) without an affirmative
vote of Unit Weeks representing a
majority of the Interests. The
Charthouse Suites Vacation License Plan
provides for special assessments under
limited circumstances. In connection
with a vote for increases in annual dues
or special assessments, Decade
Properties, Inc. will vote the Unit Week
for the unissued Interests or the Unit
Weeks for canceled Interests, unless
those Interests are retained by the
Company, in which case Charthouse will
vote the Unit Week. See "Annual Dues
and Special Assessments."
Failure to Pay The Charthouse Suites Vacation License
Annual Dues and Plan provides that a Holder must pay his
Special Assessments or her annual dues (or, if applicable,
special assessments) prior to renting,
using, or exchanging the Unit Week in
the RCI Travel Vacation Exchange
Program. If a Holder has not paid his
or her share of annual dues or special
assessments, Charthouse will have the
right to use, rent, or exchange the
suite and retain all of the proceeds, if
any, and such income, if any, will not
reduce the amount of annual dues
(including special assessments, if any)
owed by the Holder. See "Annual Dues
and Special Assessments."
RCI Membership and Holders may enroll in RCI Travel
Exchange Program Vacation Exchange Program, upon payment
of membership fees to RCI Travel. Upon
purchase of an Interest, the Company
intends to pay the costs of a Holder's
one year subscription in RCI Travel and
any initiation fees. RCI Travel
Vacation Exchange Program allows members
to deposit a week or more of vacation
time from the Charthouse Suites hotel
and request an exchange for a week or
weeks at another participating resort
located around the world. Under RCI
Travel Vacation Exchange Program, a
Holder deposits a week at the Charthouse
Suites hotel, up to 24 months in
advance, and then requests an exchange
from one of the approximately 2,800 RCI
affiliated resorts around the world.
Under this program a Holder may exchange
weeks, whether or not the deposited
Charthouse Suites hotel weeks are used
by another RCI member. RCI Travel
Vacation Exchange Program provides the
opportunity to save Unit Weeks and use
the banked weeks up to two years after
the scheduled start date or, if desired,
up to one year prior to the scheduled
start date. As of the date of this
Prospectus, the cost of membership in
RCI Travel was $67 for one year, $123
for two years, $181 for three years and
$285 for five years. In addition and as
of the date of this prospectus, RCI
charges a $93 exchange fee ($123 for
international exchanges) for each week
deposited into the RCI Travel Vacation
Exchange Program. Under the terms of
the RCI Travel Vacation Exchange
Program, a Holder must have paid his or
her annual dues (and special
assessments, if any) and, if paying for
the Interest on an installment basis,
the Interest license payment to
Charthouse associated with the deposited
week in order to utilize RCI Travel
Vacation Exchange Program. RCI Travel
Vacation Exchange Program is not
affiliated with the Company or any
affiliate of the company. The Company
assumes no liability or responsibility
to RCI's program or performance. RCI
has informed Charthouse that all of the
Unit Weeks will be considered "red"
weeks under the terms of its RCI Travel
Vacation Exchange Program, the most
valuable category and exchangeable for
all red or lower category vacation weeks
or locations. See "The Interests -- Use
Options."
Decade Properties, Decade Properties, Inc., an affiliate of
Inc. the Company, provides property
management and rental pool services
pursuant to an agreement with the
Company. See "Interests of Management
and Affiliates." The property
management agreement provides
substantial penalties if Decade
Properties, Inc. is removed as property
manager or the rental pool agent. See
"Interests of Management and
Affiliates."
Management of The Company, subject to the terms of the
Charthouse Master License Agreement, will be
responsible for management decisions of
the hotel and advertising the hotel. An
advisory committee, composed of Holders
and their representatives, may be
consulted for advisory decisions as to
the operation of Charthouse Suites
hotel. See "Management."
Distributions The Company will not make annual or
other distributions to Holders nor does
the Interest give rise to a distribution
right, although Holders may derive
revenue from renting the suites through
the Charthouse rental pool or otherwise.
There can be no assurance that a Holder
will realize any rental revenue from the
Charthouse rental pool or otherwise.
See "The Interests -- Use Options."
Tax Considerations Tax consequences will vary depending
upon a Holder's use of the Interests,
and deductions for costs of the
Interests, annual dues, and special
assessments, if any, may be limited.
Upon subscription, certain Florida
documentary taxes will be due and
payable. See "Certain Federal Income
Tax Considerations" and "Certain Florida
Tax Considerations."
Lack of Market No market is expected to develop for
trading of the Interests as a result of
this Offering. Holders may sell,
transfer or assign Interests or may
sell, transfer or assign partial
Interests (Unit Weeks), subject to
certain conditions. There can be no
assurances that Interests can be sold at
a profit or at all. See "The Interests-
-Transferability of Interests."
Purchase Under Chapter 721 of the Florida
Cancellation Rights Statutes, a Holder may cancel a
purchase, without penalty or obligation,
within 10 days of signing the
subscription agreement. Under certain
limited conditions, a Holder may also
cancel if the accommodations or
facilities, as promised, are not
available. See "Cancellation Rights."
Minimum Subscriptions There is no requirement that any minimum
number of Interest be sold in the
offering. However, if less than 76
Interests are sold by December 31, 1997,
the Company has the right to cancel the
Interests upon the repayment of the paid
subscription amount to the Holder, less
amounts for certain payments or benefits
received by the Holder. Affiliates of
the Company may purchase Interests
without limitation as to amount. See
"Plan of Distribution."
Use of Proceeds The net proceeds of this Offering will
be used to pay offering costs, the costs
of the Guaranteed Rental Arrangement and
amounts owed to Decade Properties, Inc.
under the Master License Agreement with
the Company. See "Use of Proceeds."
Plan of Offering As of the date of the prospectus, the
Interests are only available for sale in
the states of Florida and Wisconsin.
How to Subscribe In order to purchase Interests, a
subscription agreement (including
acceptance by the Holder of terms and
conditions of the Charthouse Suites
Vacation License Plan, the Charthouse
Suites Rules and Regulations and the
Charthouse Rental Pool Agreement) must
be executed. All subscriptions are
subject to acceptance by the Company.
See "How to Subscribe."
<PAGE>
RISK FACTORS
An investment in Interests involves certain risks and
prospective investors should consider the following factors, in
addition to the factors set forth elsewhere in this Prospectus,
before making an investment decision.
Deductibility of Expenses From Rental. If the Holder of an
Interest rents all or part of the Unit Weeks to a third party,
the extent to which he may deduct expenses incurred in connection
with the renting of such Unit Weeks will depend upon: (1) whether
the rental activity is engaged in with the intent of making a
profit (Section 183 of the Internal Revenue Code of 1986, as
amended ("Code")); (2) whether the expenses are incurred in
connection with the production of income or for the management,
conservation, or maintenance of property held for the production
of income (Code Section 212) or whether the expenses are incurred
in connection with a trade or business (Code Section 162);
(3) whether an Interest is a "dwelling unit" (Code Section 280A);
and (4) whether the rental activity is a "passive activity" (Code
Section 469). See "Certain Federal Income Tax Considerations."
Uncertainty Concerning Separate Contractual Relationships.
The Company believes the Charthouse rental pool and the license
agreement under the Charthouse Suites Vacation License Plan will
create a partnership for federal income tax purposes.
Accordingly, Holders will receive appropriate tax forms showing
their participation in the rental pool income, if any, and the
distributions as if a partnership for tax purposes. This
conclusion is not binding upon the Internal Revenue Service
("IRS"), and, if the IRS challenged such organizational form and
was successful, the Company or a Holder could owe additional
taxes and a Holder's income or loss amounts could be subject to
adjustment or other limitations. See "Certain Federal Income Tax
Considerations."
Expenses For Corporate Investors. Corporations that
purchase Interests, subject to limited exceptions, may not be
able to deduct payments for the Interests, the annual dues or
special assessments, if any. See "Certain Federal Income Tax
Considerations." A corporate Holder which purchases an Interest
solely in lieu of renting hotel rooms for business (and not
social) purposes may, under limited circumstances, be able to
deduct certain expenses but should seek qualified tax counsel
before investing in the Interest. See "Certain Federal Income
Tax Considerations."
Tax Risks. The Interests are subject to various tax risks
and uncertainties, including the treatment of certain purchase
and use options for partial personal use, the limits on
deductions and the application of the Code to the proposed
activities. In addition, the expected tax treatment of various
items, including Code Section 280A, are based on a private ruling
letter request submitted to the IRS on July 16, 1996. There can
be no assurances that the IRS will agree with all or any of the
requested rulings and thus the tax treatment of the issuer
discussed herein could be materially different from that
contemplated by the Company at this time. All potential
purchasers are encouraged to seek qualified tax advice prior to
investing in the Interests. See "Certain Federal Income Tax
Considerations" and "Certain Florida Tax Considerations."
Lack of Tangible Assets. By the purchase of an Interest,
Holders will acquire a license to rent or, upon notice, use the
Charthouse Suites hotel on the terms and conditions of the
Charthouse Suites Vacation License Plan and will not acquire any
real property or a real estate interest in the hotel. In the
event of a catastrophic destruction of the Charthouse Suites
hotel, Holders have no independent security for their Interests
and no management or control over the Company or the hotel, other
than as set forth in the Charthouse Suites Vacation License Plan
and the Chapter 721, Florida Statutes. The Company intends to
purchase insurance to cover the loss or damage to the hotel
although only under certain limited conditions will a Holder have
a right to share directly in the proceeds of insurance policy.
See "The Interests" and the Charthouse Suites Vacation License
Plan attached as Annex A.
Nature of the Hotel Market. The real estate market and the
hotel suite rates in Florida have historically been quite
volatile. Many factors, including the economy, interest rates,
competition, weather patterns and events, transportation costs,
regulation, and others, may affect the ultimate appreciation or
depreciation of the Interests and any income derived from a
Holder's participation in the Charthouse rental pool. The real
estate market, especially the market for seasonal rental
properties, is highly competitive and there can be no assurances
as to any rental income. Further, the value of improved income
producing real property may be affected by a variety of factors,
including the business and management ability of the Company,
state laws regulating the purchase and sale of time share
interests, changes in the real estate tax rates and/or
assessments, adverse changes in general or local economic or
market conditions or in the supply of or demand for properties of
the type owned by the Company, decreases in real personal income,
changes in real estate operating expenses, competitive factors,
fuel shortages, changing consumer habits, demographics or traffic
patterns, condemnation or uninsured losses, potential liabilities
under the Comprehensive Environmental Response Compensation and
Liability Act or other federal and state laws imposing liability
on property owners for environmental contamination, and other
factors that are beyond the control of the Company. Such factors
could effect the resale price and the amount that must be paid
for annual dues or special assessments, if any. See "Annual Dues
and Special Assessments." See "Description of the Charthouse
Suites Hotel."
Absence of Market for Interests. There is not now, nor is
there ever expected to be, any organized market for the
Interests. There can be no assurance that Interests can be
resold for their original purchase price under this Offering, if
at all. Holders of Interests may not be able to sell the
Interests in the event of an emergency or for any other reasons
and the Interests may not be readily accepted as collateral for a
loan. Holders of Interests will also have to continue to pay
annual dues (and special assessments, if any) in order to derive
rental income, use or exchange of the suites and such continuing
obligation could affect the resale price of Interests.
Risks Associated with the Rental Pool. The demand for hotel
suites in Clearwater, Florida, is typically seasonal in nature.
Therefore, certain Unit Weeks are not necessarily of equal value
as those in other seasons and certain Interest classes may have
higher demand and, therefore, higher rental revenue. The Company
believes that the summer season will have the lowest occupancy
and lowest value, in the Charthouse rental pool or otherwise. If
a Holder expects to rent the suite through the Charthouse rental
pool, there can be no assurance of any level of rental pool
revenue. The costs of the rental pool are a common expense and,
therefore, a Holder will pay for the costs of the pool even if
not using the rental pool. A purchaser of a partial Interest
will not have the right to participation in the Charthouse rental
pool, but still will pay for the costs of the Charthouse rental
pool as part of the common expenses. See "Interests."
No Distributions or Dividends. The Interests are not income
producing in that they do not provide for distributions or
dividends. Although a Holder may realize revenue through rental
of a suite or sale of an Interest, the amount of such revenue, if
any, is entirely speculative and, therefore, Holders should not
assume any rate of rental income or resale of an Interest for any
amount. See "The Interests."
RCI Travel Vacation Exchange Program. RCI Travel Vacation
Exchange Program is an independent entity which has no connection
or financial interest in the Charthouse Suites hotel or the
Company. RCI Travel Vacation Exchange Program is a vacation
exchange program offered by RCI Travel. The Company's agreement
with RCI lasts five years and provides for additional extension,
and there can be no assurances that RCI will continue to exist or
renew the agreement with the Company. Charthouse Suites hotel
cannot guarantee that RCI Travel will always accept weeks of
vacation in the Charthouse Suites hotel for trade, nor can
Charthouse Suites hotel assure that RCI Travel will continue to
exist for the entire life of Charthouse or the existence of the
Interests. For these reasons Holders utilizing RCI Travel's
services and the RCI Travel Vacation Exchange Program do so at
their own risk. See "The RCI Travel Vacation Exchange Program."
Incomplete Offering. If fewer than 76 Interests are sold by
December 31, 1997, Charthouse has reserved the right to cancel
this Offering and repurchase all Interests for their initial
subscription price (exclusive of payments of annual dues, special
assessments and Florida documentary taxes) less amounts received
from the Guaranteed Rental Arrangement or renting or use of the
suites or for benefits from using the suites, as set forth in the
Charthouse Suites Vacation License Plan. See "The Interests."
Vote of Unit Weeks. Under the Charthouse Suites Vacation
License Plan, annual dues cannot increase by more than 10% of the
prior year's dues exclusive of the allocable percentage of
property tax and insurance without an affirmative vote of Unit
Weeks representing a majority of the Unit Weeks. Decade
Properties, Inc. will vote all Unit Weeks represented by unsold
Interests or the Unit Weeks. Until at least a majority of Unit
Weeks are represented by Interests other than the Company, the
Company will be able to vote a majority of Unit Weeks and thereby
vote to determine any increases in annual dues, provided however
that such vote would not change the guaranteed level of annual
dues for periods through December 31, 1997. See "Annual Dues."
Reliance on Management. Pursuant to the terms of the
Charthouse Suites Vacation License Plan, Holders have no
authority to control the management and operations of the
Charthouse Suites hotel or the Company. Management and operation
of Charthouse Suites hotel resides solely in the Company and
Decade Properties, Inc., as property manager. In order to
protect the property and the operations, the Company has the
authority to amend Charthouse policies and the Rules and
Regulations governing the Charthouse Suites hotel without a vote
of Holders, provided such amendment is consistent with the terms
of the Charthouse Suites Vacation License Plan. Accordingly,
Holders will have no control over changes in policies of
Charthouse and changes in Charthouse's policies may not fully
serve the interests of all Holders. The Company does intend to
install an Advisory Board composed of Holders, but ultimate
responsibility for policies will be the sole domain of
Charthouse. See "The Company." See Charthouse Suites Vacation
License and Charthouse Suites Rules and Regulations attached as
Annex A and Annex B, respectively.
Absence of Independent Underwriter and Appraiser. No
appraisals or other independent valuations have been obtained for
purposes of determining the value of Interests. The value of the
Interests has been determined solely by the Company on the basis
of its subjective evaluation of marketing considerations. See
"Determination of Offering Price."
Dependence on Key Personnel. The Charthouse Suites hotel
will be controlled by the Company and Decade Properties, Inc.
The loss of the services of Jeffrey Keierleber, sole owner of the
Company and Decade Properties, Inc., could have serious adverse
effects on the operations of Charthouse Suites hotel. See
"Management."
Regulations. At the time of this Offering, the Company
believes that it is in compliance with all applicable Florida
regulations including the time share laws. However, there can be
no assurance that changes in Florida or local law will not
materially affect the operation of Charthouse Suites hotel and
the Charthouse Suites Vacation License Plan and/or the rental
pool agreement. The Company's intended operations and the
Interests will be subject to numerous Florida laws and the
Company believes it has structured the Charthouse Suites Vacation
License Plan to comply with such requirements. Compliance with
the laws or regulations, of any sort, will be a common expense
recovered from Interest Holders as an annual due. See "Annual
Dues."
Americans with Disabilities Act. Under the Americans with
Disabilities Act ("ADA"), all public accommodations are required
to meet certain federal requirements related to physical access
and use by disabled persons. A determination that the Charthouse
Suites hotel is not in compliance with the ADA could result in
imposition of fines, injunctive relief, damages and attorneys'
fees. If the Company was required to make modifications to
comply with the ADA, Charthouse's cash reserves could be depleted
and annual dues could increase significantly, adversely affecting
Holders. A finding of non-compliance could also endanger
Charthouse's ongoing ability to use the rental pool to rent
Interests to non-Holders.
Absence of Operating History of Charthouse. The Company is
a recently formed Florida corporation and has no operating
history. The Company's anticipated operations and business plan
are subject to all of the risks inherent in the establishment of
a new enterprise in a competitive and volatile industry such as
the Florida hotel operations. Holders should carefully consider
their rights and obligations under the Charthouse Suites Vacation
License Plan and Rental Pool Agreement. See "The Company" and
"The Interests."
Lack of Arm's Length Negotiation in the Property Management
and Other Agreements. None of the agreements, including the
Property Management Agreement, were determined by arm's length
negotiations and no independent approval will be sought. The
Property Management Agreement provides substantial liquidated
damages in the event Decade Properties, Inc. is removed as
property manager for the Company. The Charthouse Suites Vacation
License Plan also provides that Holders will reimburse through
their annual dues the costs and fees of the property manager for
its services. See "Interests of Management and Affiliates."
Conflicts of Interests Arising From Benefits to Affiliates
of the Company. Certain affiliated parties will receive an
immediate and substantial financial benefit as a result of sales
of the Interests. The Company intends to use essentially all of
the net proceeds from sale of the Interests to pay offering
expenses, amounts under the Guaranteed Rental Arrangement and
then amounts owed under the Master License Agreement. See "Use
of Proceeds." Affiliates of the Company may also benefit from
the property management agreements, rental fees, and other fees.
See "Interests of Management and Affiliates."
Conflicts of Interest. An affiliate of the Company manages
the Charthouse Suites hotel, pursuant to a property management
agreement with the Company, and will make all operational
decisions. Such Holder will not have a right to change the
policies of the hotel or the Company or remove the property
manager. See "Management."
Resale of Interests. A Holder selling partial Interests
(i.e., Unit Weeks) or their Interest will likely face competition
from the Company as it sells the Interests, including Interests
which have been reacquired. There can be no assurance that a
Holder will be able to sell their Interests at the offering
price, if at all.
THE COMPANY
Charthouse Suites Vacation Ownership, Inc. is a Florida
corporation formed on April 16, 1996. The Company was organized
to facilitate the sale and distribution of the Interests. The
Company has entered into a Master License Agreement and
nonexclusive easement with Decade Properties, Inc., which owns
the Charthouse Suites hotel and related property, to acquire the
right to use the Charthouse Suites hotel, subject to certain
terms and conditions, for a period of approximately 54 years.
The Company has limited financial resources. See "Financial
Statements."
The Company currently has not, and has no plans to, issue
senior securities. The Company plans to borrow money only to the
extent necessary to fund its portion of offering expenses and
fund the operation of the Company in the ordinary course. The
Company does not plan to make loans to other persons, although it
will allow Holders to pay licensing payments on an installment
basis over 300 months. See the "The Interests." The Company
does not plan to invest in securities of other issuers for the
purpose of exercising control. The Company has no plans to
engage in underwriting securities for other issuers and has no
plans to engage in the purchase and sale of investments, except
for those in the ordinary course of maintaining its reserves and
the common maintenance fund. The Company has no plans to offer
securities in exchange for property and has no plans, except
under the limited circumstances described in the Master License
Agreement or Charthouse Suites Vacation License Plan, to
repurchase or reacquire the Interests. The Company owns no real
property and has no plans to acquire real property in the future.
Except as set forth in the Master License Agreement and in
connection with the use of the Charthouse Suites hotel, the
Company does not plan to make investments in real estate or
interests in real estate, real estate mortgages, securities of or
interests in persons primarily engaged in real estate activities,
or investments in other securities. However, subject to the
limitations described in the license agreement underlying the
Interests, the Company has sole control over the policies and
operations of Charthouse and may from time to time consider
expanding the operations and scope of Charthouse Suites hotel and
sell additional Interests or canceled Interests.
Charthouse plans to provide Holders an annual report (which
may contain unaudited financial statements) which describes the
financial condition of Charthouse Suites hotel and the source and
use of annual dues, special assessments, if any, and common
expenses.
DESCRIPTION OF THE CHARTHOUSE SUITES HOTEL
The Charthouse Suites hotel is located in Clearwater Beach,
Florida and has been owned by Decade Properties, Inc. since 1992.
It is a four story hotel overlooking Clearwater Bay, Florida.
Attached to the Charthouse Suites hotel grounds is a marina that
is also owned by Decade Properties, Inc. The Charthouse Suites
hotel contains on its grounds a heated in-ground 20 by 25 foot
pool and laundry facilities, which may be used by Holders. The
hotel's location provides easy access to white sand public
beaches, recreational facilities, restaurants, entertainment and
shopping in Clearwater Beach. Tampa Bay, Florida's airport is
approximately 20 miles away and St. Petersburg's airport is
approximately 12 miles.
The Charthouse Suites hotel is comprised of 25 rooms located
in one four-story building containing an approximate 20,000
enclosed square feet. In addition, the marina has 27 boat slips.
The building and most of its improvements were built in 1971. In
1993, the building was converted to a hotel and was completely
updated and remodeled. The property is rectangular, in shape
contains approximately .66 acres, and is located on the North
side of Bayway Boulevard, Clearwater Beach, Florida. Each suite
contains sleeping accommodations, private bathroom facilities,
and limited cooking facilities. Each suite comes equipped with a
bed, hotel-like furniture, bathroom, and television.
The Charthouse Suites hotel is conveniently located within a
short stroll of a beautiful Clearwater public beach, quaint shops
and restaurants. The hotel is approximately a 90 minute drive
from Walt Disney World and Cypress Gardens and approximately 35
miles from Busch Gardens, Florida.
As of the date of this prospectus, there are no known
environmental contaminations on the Charthouse Suites hotel
properties which would materially affect the value of Interests
or the ability of Holders to rent or use their suites.
DESCRIPTION OF MASTER LICENSE AGREEMENT
The Company will be entitled to sell Interests (and the
corresponding Unit Weeks) under a Master License Agreement with
Decade Properties, Inc. Until an Interest is sold, the Unit
Weeks for the unissued Interests will be voted by Decade
Properties, Inc. for all matters, including votes on increases in
annual dues or special assessments. Upon a default of an
Interest, the Company may elect to continue required payments to
Decade Properties, Inc. or may return the Interest in which case
the Unit Weeks will become the property of Decade Properties,
Inc. If the Unit Weeks or the Interests remain the property of
the Company and upon compliance with regulatory requirements, the
Company may sell the Interests to additional investors, if any.
In addition, Decade Properties, Inc. will retain at least one
week in each season (and up to five Unit Weeks in a leap year)
and will be entitled to vote the Unit Weeks and retain the rental
revenue from the Unit Weeks or use or exchange such Weeks.
Under the Master License Agreement, the Company must make
license payments to Decade Properties, Inc. approximately equal
to the cash proceeds, net of all offering expenses, that the
Company receives from the sale of the Interests. Under the
Master License Agreement, Decade Properties, Inc. is to receive
____% of all sale proceeds, if an Interest is paid in full or, if
paid on the installment basis, 50% of all sale proceeds received
in the first 12 months of a sale and 84% thereafter.
THE INTERESTS
Ownership of an Interest entitles purchasers to the right,
subject to the terms and conditions of the Vacation License
Agreement to rent or use the Charthouse Suites hotel for eight
weeks of each year until December 31, 2050. Holders are entitled
to two consecutive weeks of time for each season (e.g. Spring,
Summer, Fall, and Winter). The Unit Weeks will be assigned
pursuant to the schedule at Annex E and upon subscription a
potential Holder should submit his choices. All Unit Weeks will
be automatically placed in the Charthouse rental pool and have
Charthouse attempt to rent the Unit Weeks and remit net rent
proceeds, if any, to the Holder on a quarterly basis. Holders
will have the right upon 30 days written notice (unless waived by
Charthouse) to use the Unit Weeks or join RCI Travel Vacation
Exchange Program and exchange Unit Weeks in the Charthouse Suites
hotel for another location in a participating RCI resort. The
Holders will not obtain title or any interest in the real
property or improvements thereon. No certificates will be issued
for the Interests.
The Company is offering Interests that in the aggregate will
provide the Holders the right to rental income from the
Charthouse rental pool, if any, or the right to use one of the 25
suites for 48 weeks out of every year. Neither the Company nor
Decade Properties, Inc. intends to offer the suites for sale to
third parties, although they reserve the right to do so and such
sale would be subject to the rights of Holders. Under the terms
of the Master License Agreement, Decade Properties, Inc. will
continue to have the right to use, rent or exchange the remaining
4 weeks (one Unit Week in every season or five total Unit Weeks
in leap years) or sell these Unit Weeks as partial Interests,
upon compliance with legal and regulatory requirements. Decade
Properties, Inc. intends to place the unsold Unit Weeks it
continues to hold in the Charthouse rental pool, although it
reserves the right to sell licenses and exchange these weeks as
well.
Types of Interests Available
Class A-F Interests are being offered by Charthouse. A
description of each Interest is as follows:
A Interest: Ownership of an A Interest allows a Holder use
of a standard studio suite overlooking the marina and Clearwater
Bay for two consecutive weeks in each season until December 31,
2050. There are 36 A Interests available in this offering for a
cost of $17,000 per Interest. The A Interest suites are
approximately 360 square feet in size.
B Interest: Ownership of a B Interest allows a Holder use
of a king bed studio hotel suite overlooking the marina and
Clearwater Bay for consecutive two weeks in each season until
December 31, 2050. There are 24 B Interests available in this
offering for a cost of $20,000 per Interest. The B Interest
suites are approximately 360 square feet in size.
C Interest: Ownership of a C Interest allows a Holder use
of a large studio suite overlooking Clearwater Bay, the marina,
or southern exposure for two consecutive weeks in each season
until December 31, 2050. There are 36 C Interests available in
this offering for a cost of $26,500 per Interest. The C Interest
suites vary and are approximately 430-436 square feet.
D Interest: Ownership of a D Interest allows a Holder use
of a one bedroom, one bathroom suite overlooking the marina,
Clearwater Bay, the swimming pool, or southern exposure for two
consecutive weeks in each season until December 31, 2050. There
are 36 D Interests available in this offering for a cost of
$36,500 per Interest. The D Interest suites vary and are
approximately 638-869 square feet.
E Interest: Ownership of an E Interest allows a Holder use
of a one bedroom suite with one bathroom (with a lanai), and a
view of Clearwater Bay for two consecutive weeks in each season
until December 31, 2050. There are 12 E Interests available in
this offering at a cost of $39,500 per Interest. The E Interest
suites vary and are approximately 815-982 square feet.
F Interest: Ownership of an F Interest allows a Holder use
of the approximately 1,875 square foot, two bedroom penthouse
suite, with a fully equipped kitchen, living room, den, dining
room, two full baths (one with a jacuzzi), and a large private
balcony overlooking Clearwater Bay and marina for two consecutive
weeks in each season until December 31, 2050. There are 6 F
Interests in this offering at a cost of $61,000 per Interest.
At the time of subscription, the Holder will be assigned
eight specific Unit Weeks for the category of the suite
corresponding to the Interests purchased. Preferences will be
considered on a first come first serve basis, but assignment of
Unit Weeks and suites within a class of Interest is in the sole
direction of the Company.
For purposes of the Charthouse Suites Vacation License Plan,
the Winter Season constitutes weeks 46-52 and 1-6, Spring is
weeks 7-19, Summer is weeks 20-32, and Fall is weeks 33-45.
Occupancy shall begin at 4:00 p.m. on the applicable date of the
week and end at 10:00 a.m. on the same day of the immediately
following week.
Use Options
The following summarizes the uses to which Holders, as of
the date of the Prospectus, may utilize their eight weeks of
suite time:
Rental. If a Holder takes no action, Charthouse will seek
to rent their suite through the Charthouse rental pool. Holders
may also withdraw their Unit Weeks from the rental pool and seek
to rent the Unit Weeks to others, either personally or through
rental agents, or utilize the Charthouse rental pool. Unless
waived by the Company, holders must give the Company at least 30
days notice prior to the start of the Unit Week of the desire to
remove their Unit Week from the Charthouse rental pool. Rental
pool proceeds will be allocated proportionately among Holders of
all classes of Interests that have Unit Weeks in the Charthouse
rental pool. Allocation of proceeds shall follow the same formula
as used for allocating Common revenues. The ability of the Charthouse
rental pool to rent pooled weeks will depend on many factors, among
which are seasonal demand, weather conditions, travel patterns
and economic conditions. There is no guarantee that all or any
contributed weeks will be rented or that rental proceeds will be
received. An affiliate of the Company will be paid a rental fee
of 5% of all rental charges collected and one of the common
expenses for Holders is the reimbursement for any costs incurred
in providing services. Alternatively, Holders can contract
individually with an affiliate of the Company, rental agent, for
their individual suite.
Personal Use. A Holder may, upon 30 days written notice to
Charthouse (unless waived), withdraw Unit Weeks from the
Charthouse rental pool, and Holders are free to use, assign,
grant, gift or otherwise use their eight Unit Weeks of reserved
vacation suites and hotel services at the Charthouse Suites
hotel. Pursuant to the Charthouse Suites Vacation License Plan
and the Charthouse Suites Rules and Regulations, Holders are
responsible for the conduct and liable for any resulting damages
or payments due as a result of their use or the use by their
permitted users, including any rental arranged other than through
the Charthouse rental pool. The Holder need not be present at
the Charthouse Suites hotel during the assigned weeks of use if
prior written notice has been received by the Company. See
Charthouse Suites Vacation License Plan and Charthouse Suites
Rules and Regulations attached as Annexes A and B, respectively.
RCI Exchange. Charthouse Suites hotel has qualified as an
affiliated resort of RCI Travel Vacation Exchange Program. As
long as the Holder remains a member of RCI Travel, such Holder
may use the RCI Travel Vacation Exchange Program. Holders may
join RCI Travel for the cost and fees determined by RCI and
obtain the privileges attached to such membership. RCI Travel is
not an affiliate of Charthouse or any of its affiliates and has
not reviewed or passed upon the validity of this Offering. RCI
is a independent entity that facilitates the exchange of vacation
time share interests. Nothing contained in this summary should
be construed as an endorsement or advertisement for this Offering
or the Charthouse Suites hotel by RCI Travel or any of its
affiliates. The Company and its affiliates have no financial or
other interest in RCI Travel.
Under the terms of the agreement with RCI, the RCI Travel
Vacation Exchange Program allows Holders to deposit one or more
weeks of vacation time at the Charthouse Suites hotel into the
RCI Travel Vacation Exchange Program. The deposit may be made
between two weeks and two years before the use of your vacation
week for the Interest. The Holder must pay all annual fees
associated with the deposited week (i.e. annual dues, special
assessments, if any, and, if paying on the installment basis, the
license payment directly to the Charthouse before submitting an
RCI request. Deposited weeks can be withdrawn from RCI Travel
Vacation Exchange Program if the Holder has not made an exchange
against that week and no other RCI member has been assigned the
Holder's Unit Week of Charthouse Suites hotel. After depositing
weeks in RCI Travel Vacation Exchange Program, members may
request use of weeks deposited at any of RCI Travel's
approximately 2,800 worldwide affiliated resorts (as of the date
of the prospectus). Requested weeks must be comparable to that
deposited. All the Charthouse's weeks have been designated "red"
or the most valuable RCI designation. RCI members can request
exchanges for only that period in which their subscription to RCI
Endless Vacation is prepaid. As of the date of this prospectus,
membership in RCI Travel costs $67 for one year, $123 for two
years, $181 for three years and $285 for five years. There is
also a $200 initiation fee which, if charged, will be paid for by
the Company. The Company will also pay the first year membership
fee. As of the date of this prospectus, RCI Travel charges $93
for each domestic exchange and $123 for each international
exchange. Other fees may apply and all fees are determined
solely by RCI Travel. Neither Charthouse nor any of its
affiliates will receive any remuneration from RCI.
In addition, RCI members can obtain RCI Guest Certificates
for non-members to use the exchanged weeks. Guest Certificates
currently cost an additional $40. RCI Travel currently has
approximately 1,700,000 members. The terms and conditions of
membership are defined in the agreement that would be entered
between RCI Travel and its members (such as Holders of the
Interests). Participation in RCI by a Holder is voluntary.
Transferability of Interests
A Holder may transfer his entire Interest without the prior
consent of the Company provided the Holder is current on all
payment of all dues, assessments and installment expenses. An
entire Interest may participate in the Charthouse rental pool.
A Holder may also transfer partial Interests in increments
of one or more weeks with the consent of the Company provided the
Holder is current on all payment of all dues, assessments and
installment expenses. The transferor of a partial Interest must
also make a prepayment of the estimated annual dues (and special
assessments, if any) of one year.
A transferee of partial Interests may not participate in the
Charthouse rental pool. However, the Holder of a partial
interest may enter into a contract with Decade Properties, Inc.
to provide rental services for its own rental program. The
Company reserves the right to specify other terms or conditions
in connection with the transfer of a partial Interest. See
Charthouse Suites Vacation License Plan attached as Annex A.
Cancellation
Each Holder is given the right, pursuant to Chapter 721,
Florida Statutes, to cancel their subscription without any
penalty or obligation within ten days from the date the
subscription agreement is signed or until ten days after receipt
of the Time-Share Public Offering Statement, whichever is later.
A Holder must notify Charthouse in writing of his/her intent to
cancel. The notice of cancellation shall be effective upon the
date sent and shall be sent to Charthouse at 250 Patrick
Boulevard, Brookfield, Wisconsin 53045. Any attempt to obtain a
waiver of the Holder's cancellation rights is unlawful. While
the Holder may execute all closing documents in advance,
Charthouse's use of the subscription amount by Charthouse before
the expiration of the ten day cancellation period is prohibited.
Each Holder may also cancel the License Agreement at any
time after the accommodations or facilities are no longer
available as provided in the Charthouse Suites Vacation License
Plan and the Offering Statement, attached as an Annex C. The
Charthouse Suites Vacation License Plan contemplates that Holders
may have the accommodation unavailable on a temporary basis in
order to facilitate repairs, maintenance or emergencies. Such
events shall not give rise to a right to cancel the Interest.
Under the Charthouse Suites Vacation License Plan, upon
cancellation a Holder will only have the right to receive the
amount of the purchase price actually paid less any benefits
received, rental revenue from the Charthouse rental pool, or
Guaranteed Rental Arrangement payments or discounts. In order to
avoid controversies, the Company will use the following rates for
calculating benefits on a per day basis:
Assumed Benefit Total for
One Unit Week
A Standard Studio $ 65.00 per night $455
B King Bed Studio $ 75.00 per night $525
C Studio $ 85.00 per night $595
D 1 Bedroom $120.00 per night $840
E 1 Bedroom $130.00 per night $910
F Penthouse $175.00 per night $1,225
ANNUAL DUES AND SPECIAL ASSESSMENTS
Each Holder will be responsible for a proportionate share of
the common expenses based upon a formula allocating fixed and
variable costs to their category of suites. For the years ended
December 31, 1996 and 1997 annual dues per unit week will be $175
for A and B Interests, $195 for C Interests, $270 for D
Interests, $290 for E Interests, $350 for F Interests. There are
eight Unit Weeks for each Interest.
Under the Charthouse Suites Vacation License Plan, annual
dues and special assessments (unless assessed against a specific
or group of Holders as set forth in the Charthouse Suites
Vacation License Plan, if any, will be allocated as follows:
Total Per
Total Interest*
Class A Interest 14.5716% .3736%
Class B Interest 11.4284% .4396%
Class C Interest 22.7142% .5824%
Class D Interest 31.2858% .8022%
Class E Interest 11.2858% .8681%
Class F Interest 8.7143% 1.3407%
Total 100%
* Decade Properties, Inc. will bear a proportionate share
of the annual dues and special assessments attributable to any
unsold Interest and the Unit Week not attributable to any
Interest.
Each Holder shall be responsible for a uniform portion of
the Common Expenses.
The amount of annual dues will be set by the Company and
cannot increase annually more than 10% of the prior year's dues,
exclusive of property taxes and insurance, without an affirmative
vote of Holders representing ownership of a majority of Unit
Weeks (including weeks owned by the Company). For purposes of
such a vote, the Company will vote Unit Weeks associated with
unissued Interests or Unit Weeks canceled by the Company. An
advisory committee composed primarily of Holders may be consulted
for advice regarding certain management decisions relevant to
establishing annual dues. The Company will consult the advisory
committee and advisory board for advice purposes only and is not
bound to follow the advice or recommendations offered therefrom.
The Company will maintain separate accounts for operating
and capital expenses. Annual dues shall be based upon the
Charthouse Suites hotel's requirements for all expenses relating
to the operation of Charthouse Suites hotel, such as accounting
costs, front desk costs, maid service and cleaning, maintenance,
repair and replacement of suites and furnishings and all other
costs of operating the vacation ownership program (including the
rental pool). Expenses may also include, among other things, the
following: expenses for cleaning, maintaining, repairing and
replacing furnishings in all suites; any deficit from a previous
period; creation of a reasonable contingency reserve, surplus
and/or sinking fund; payment of real property taxes; and any
other expenses or liabilities which may be incurred in accordance
with the provision for the benefit of the Holders. See
Charthouse Suites Vacation License Plan attached to Annex A.
In addition, Charthouse may levy special assessments, but as
set forth in the Vacation License Plan and generally for the
purpose of defraying unexpected repairs, costs, expenses or
purchases or shortfalls in the collection of assessments from the
Holders. Special assessments must be approved by the vote or
written assent of a majority of Unit Weeks unless (a) the
assessment, other than a special assessment to restore or rebuild
because of damage or destruction to the Charthouse Suites hotel,
(b) does not exceed 5% of the budgeted gross expenses of
Charthouse Suites hotel for the calendar year; (c) the assessment
is a special assessment for the repair or rebuilding of the
Charthouse Suites hotel which does not exceed 10% of the budgeted
gross expenses of the Company for the calendar year in which the
assessment is levied; or (d) the assessment is a special
assessment against a member for the purpose of reimbursing
Charthouse for costs incurred in bringing the Holder into
compliance with the provisions of the governing instruments for
Charthouse Suites hotel. For voting purposes, Charthouse will
vote the Unit Weeks associated with unissued Interests or
retained by the Company.
A Holder will not be allowed to use or receive rental income
from the Charthouse rental pool if he fails to timely pay annual
dues. Under the Charthouse Suites Vacation License Plan,
Charthouse will be allowed to rent the suite and retain all
income. Any income received will not offset annual dues and a
Holder will not be allowed to rent or use the suite until the
complete shortfall, with interest, is paid to the Company.
GUARANTEED RENTAL ARRANGEMENT
The following is condensed information concerning the Guaranteed
Rental Arrangement by Charthouse. Reference to the provisions of
the Guaranteed Rental Arrangement are qualified in their entirety
by reference to the text of the Payment and Guarantee Agreement,
a form of which has been filed as an exhibit to the Registration
Statement of which this Prospectus forms a part.
General
As an incentive for early purchasers, Investors who purchase
an Interest by [6 months after the Effective Date of the
Registration Statement] will receive the right to put six weeks
of their Charthouse Suites hotel use to the Company and receive
the applicable Guaranteed Rental Rate (hereafter "Guaranteed
Rates"). Investors who purchase between [6 months and 1 day and
9 months after the Effective Date of the Registration Statement]
will receive the right to put four weeks over the life of the
Interests to the Company and receive the Guaranteed Rates,
subject to the terms and conditions of the Guaranteed Rental
Arrangement. Investors who purchase between [9 months and 1 day
and one year after the Effective Date of the Registration
Statement] will have the right to put two weeks over the life of
the Interests to the Company and receive the Guaranteed Rates.
Under the terms of the Guaranteed Rental Arrangement, the
Investors put right must be exercised by [five years after the
Effective Date of the Registration Statement] and is subject to
certain terms and conditions. Payments under the incentive
agreement are subject to the terms and conditions of the
Guaranteed Rental Arrangement described below. Investors
purchasing after [one year of the Effective Date of the
Registration Statement] will not be able to participate in the
Guaranteed Rental Arrangement.
Guaranteed Rates
The Company agrees to pay the following rates under the
Guaranteed Rental Arrangement. These rates are the off-season
walk-in rates (as of the date of the Prospectus):
Total Total Total
(Assuming (Assuming (Assuming
Guaranteed Rate Six Weeks) Four Weeks) Two Weeks)
A Standard
Studio $ 65.00 per night $2,730 $1,820 $910
B King Bed
Studio $ 75.00 per night $3,150 $2,100 $1,050
C Large
Studio $ 85.00 per night $4,410 $2,380 $1,190
D 1 Bedroom $120.00 per night $5,040 $3,380 $1,680
E 1 Bedroom $130.00 per night $5,400 $3,640 $1,820
F Penthouse $175.00 per night $7,350 $4,900 $2,450
Holders should not assume that the rental pool will generate
such rates, as the rental pool could return higher or lower
rates, due to factors such as discounts, corporate rental rates,
the 5% rental agent charge, and seasonality.
Terms and Conditions of Guaranteed Rental Arrangement
The Guaranteed Rental Arrangement is subject to the
following terms and conditions:
(1) Holders must give the Company at least 30 days written
notice of their intent to put the weeks pursuant to the
Guaranteed Rental Arrangement. Thereafter, the Holder may not
withdraw the "put" weeks without the consent of the Company.
(2) The Holders must put entire weeks to the Company.
(3) The Company will have the exclusive right to use,
exchange, or rent the suite for the designated weeks and may
collect and retain all revenue arising therefrom.
(4) Unless waived by the Company, no more than five suites
may be put to the Company from all Investors in any one week. In
case more than five suites are put to the Company, the Company
will accept put requests in the order in which written requests
are received. Investors whose put rights are not accepted will
be notified within one week of receipt of a letter request.
(5) All puts must be exercised by [five years after
Effective Date of the Registration Statement].
(6) There must be no action threatened, pending or taken,
which makes the rental pool or the Guaranteed Rental Arrangement,
unlawful or otherwise restricts or prohibits the ability of
Charthouse to use the suite.
(7) Under the terms of the property management agreement,
the rental management fee of 5% will be waived for amounts
received and all amounts shown above are exclusive of the rental
management fee.
(8) Holders must elect whether to accept the Rental
Guarantee or the cash surrender value (described below) at the
time of subscription to purchase the Interests.
Cash Discount Value
The Guaranteed Rental Arrangement allows Investors to elect
to receive cash to be used as payment towards the subscription at
the time of subscription in lieu of the Guaranteed Rental
Arrangement. Under the terms of the Guaranteed Rental
Arrangement, Investors who purchase in the period between
[Effective Date] and [6 months after Effective Date] may elect to
receive a 5% discount on the Subscription Amount in lieu of the
Rental Guarantee Arrangement. Investors who purchase between [6
months & 1 day after the Effective Date and Nine Months after the
Effective Date] may elect to receive a 3% discount on the
Subscription Amount (less any other cash discounts) in lieu of
the Rental Guarantee Arrangement. Investors who purchase between
[9 months & 1 day after Effective Date and one year after
Effective Date] may elect to receive a 1 1/2% discount on the
Subscription Amount (less any other cash discounts) in lieu of
the Rental Guarantee Arrangement.
Cash Discount
5% 3% 1-1/2%
A Standard Studio $ 850 $ 510 $255.00
B King Bed Studio $1,000 $ 600 $300.00
C Large Studio $1,325 $ 795 $397.50
D 1 Bedroom $1,825 $1,095 $547.50
E 1 Bedroom $1,925 $1,185 $592.50
F Penthouse $3,050 $1,830 $915.00
Right to Amend
The Company reserves the right to amend the Guaranteed
Rental Arrangement, provided that any amendment does not reduce
the cash benefit to a Holder.
LICENSE PAYMENT OPTIONS
Holders have the option to pay for their Interests either
by:
Payment in Full. Holders may pay for their Interests in
full at the time of subscription by check or by wire transfer,
which will be placed in escrow for the 10 day statutory period.
Installment Payments. Holders may also pay in installments
over 300 months. Holders utilizing this option must pay at least
25% of the net subscription price (after any discounts) at the
time of acceptance of the subscription and deliver subscription
agreement that states that license payments will be paid before
the first day of each month with an increased license payment of
9% per year on the unpaid balance owing for the Interest. If a
Holder fails to make any payment when due, then such Holder will
be in default and to the extent such default continues will
forfeit all rights, use or otherwise, in the Charthouse Suites
hotel suite. If a Holder is in default on any license payment
for a cumulative period of more than six months or has more than
three events of default (of any duration), the Company may cancel
the Interest pursuant to the terms of the Charthouse Suites
Vacation License Plan. A schedule of required payments will be
provided upon acceptance of subscriptions and after the ten (10)
day cancellation period has been completed.
The Company does not intend to pledge the amounts owed on
the Interests to any lender. A Holder who discontinues payment
for the Interest will forfeit rights to use the hotel suite and
all amounts previously paid as provided above. Charthouse will
notify Holders if their Interest has been canceled and
terminated.
DETERMINATION OF OFFERING PRICE
The offering price per Interest has been determined solely
by the Company on the basis of its subjective considerations of
marketing considerations and has not been calculated based upon
any method considering net worth, earnings, appraisals or other
established investment criteria of value. Accordingly, there can
be no assurance that the Interests offered hereby can be resold
at or in excess of the offering price, if at all. There is no
organized market for the trading of the Interests offered herein
and none is expected to develop.
USE OF PROCEEDS
Assuming that the maximum number of Interests offered hereby
are sold, the gross proceeds from the sale will be approximately
$4,200,000 exclusive of Offering expenses (estimated at
$_________, and sales commissions of $420,000). The Company
believes it has sufficient funds to meet its obligations. Its
sole shareholder intends to invest additional funds in order to
pay offering costs or to fund the Guaranteed Rental Arrangement,
if necessary. Charthouse plans to use all of the remaining net
proceeds of this Offering to pay for the license right pursuant
to the Master License Agreement from Decade Properties, Inc.
PLAN OF DISTRIBUTION
As of the date of this Prospectus, the Interests are
available only for purchase in the States of Florida and
Wisconsin. Retirement plans and individual retirement accounts
may not purchase the Interests.
The Interests are being offered by the Company through
Decade Securities Corporation, an affiliate of the Company, on a
best-efforts basis. The minimum subscription is one Interest,
although the Company reserves the right to issue fractional
Interests. Decade Securities Corporation will receive a
commission of 10% of the gross sales on all sales. Decade
Securities Corporation may authorize certain other broker-dealers
("Soliciting Dealers") who are members of the National
Association of Securities Dealers, Inc. ("NASD") to sell
Interests. In the event of sale by such Soliciting Dealers,
Decade Securities Corporation will pay them from its own
commission a negotiated commission, not to exceed 10% of the
gross proceeds of such sales. These arrangements are set forth
more fully in the Soliciting Dealer Agreement filed as an exhibit
to the Registration Statement of which this Prospectus is a part.
All subscriptions are subject to approval by the Company.
The Company has reserved the right to repurchase all
Interests if at least 76 or more Interests are not sold by
December 31, 1997. The Company is not obligated to exercise this
right. If the Company exercises this right, Holders will be
refunded all of their licensing payments paid to the Company less
any amounts received under the Guaranteed Rental Arrangement
(described below) and amounts received from renting the suite.
Holders will also be refunded any prepayments for annual dues for
periods after December 31, 1997.
The Company has agreed to indemnify Decade Securities Corpo-
ration and the Soliciting Dealers against certain liabilities,
including liabilities under the Securities Act of 1933, provided,
however, that any indemnification by the Company of affiliated
Soliciting Dealers shall be limited to expenses incurred in a
successful adjudication on the merits of each count involving
alleged securities laws violations or in defense of a claim
dismissed with prejudice on the merits by a court of competent
jurisdiction and the court approves indemnification of such
expenses. The Soliciting Dealers have severally agreed to
indemnify the Company against certain such liabilities.
HOW TO SUBSCRIBE
The Interests are being offered by Decade Securities Corpo-
ration, an affiliate of the Company, and by certain Soliciting
Dealers. Decade Securities Corporation and certain Soliciting
Dealers may be compensated with up to 10% commission for each
Interest sold. See "Plan of Distribution."
In order to acquire an Interest, interested parties must
execute a subscription agreement and agree to be bound thereunder
to its terms, the Charthouse Suites Vacation License Plan and the
Charthouse Suites Rules and Regulations adopted by the Company.
All subscribers are subject to the review, approval and
acceptance by the Company, whose decision shall be final. Upon
subscription, a potential purchaser must pay at least 25% of the
net subscription for the Interests, after consideration of all
discounts.
SUMMARY OF PROMOTIONAL AND SALES MATERIAL
Sales materials may be used in connection with this Offering
only when accompanied or preceded by the delivery of this
prospectus. Such sales materials may include a booklet, slides,
films, "fact" sheets, articles, publications, and brochures
describing the Offering, the Company and the Charthouse Suites
hotel. The Company may also provide information, which has been
provided by RCI. The Offering is made only by means of the
Prospectus and the Time-Share Public Offering Statement (attached
as an Annex).
CAPITALIZATION
The following table sets forth the capitalization of the
Company, as of August 31, 1996. The table should be read in
conjunction with the financial statements, including the related
notes thereto, appearing elsewhere in this Prospectus.
Long-Term Debt $ 0
Shareholder's Equity:
Common Stock 100
Paid In Capital 99,900
Retained Earnings 0
$100,000
OPERATION AND OPERATING STRATEGY OF CHARTHOUSE SUITES HOTEL
The Company intends to provide quality hotel services to
Holders of the Interests or the renters in the Charthouse rental
pool. The Company believes that its location in Clearwater Beach
and its competitive licensing payments and annual dues rates will
be attractive to Investors who desire to fix the costs of
vacations, pass a gift to future generations or retain for
possible appreciation, if any.
In order to ensure the comfort and enjoyment of the
Charthouse Suites hotel and its amenities by all Holders, guests
and other allowed users, Charthouse has promulgated certain rules
and regulations. These rules and regulations will not only
preserve the quiet enjoyment of the Charthouse Suites hotel for
all users, but also ensure that the aesthetical appearance of the
Charthouse Suites hotel is generally uniform and in no way
detracting from the value of the user's vacation time or ability
to rent such in the Charthouse rental pool. Certain other
requirements are established in the subscription agreement and
the Charthouse Suites Rules and Regulations attached as Annex B.
MANAGEMENT
Directors and Executive Officers
The following table sets forth certain information with
respect to directors and executive officers of the Company.
Name Age Position with the Company
Jeffrey Keierleber 43 President, Treasurer and Sole
Director
Michael G. Sweet 46 Secretary
The following provides additional information on officers
and others who may provide services to the Company pursuant to
agreements.
Jeffrey Keierleber, (age 43) President, Treasurer and sole
Director of the Company, graduated with a BBA in 1975 and an MBA
in 1977 from the University of Wisconsin system. Since that
time, Mr. Keierleber has worked exclusively in the real estate
field, and has been actively involved in property management,
real estate syndication, investment, acquisitions, liquidations,
limited partnership management and broker/dealer relations. Mr.
Keierleber has been involved in acquisitions of investment
property having a market value of over $150,000,000, and has
assisted in the structuring of more than 35 limited partnerships.
These partnerships have invested in real estate located in the
midwest and the southeast of the United States. Mr. Keierleber
is a licensed real estate broker and securities agent. He is on
the board of directors of the corporate general partner for
various limited partnerships and serves as general partner in
limited partnerships sponsored by affiliates of Decade Companies.
Mr. Keierleber is the sole owner of the Company and is the
president and treasurer of Decade Properties, Inc. He is the
principal and managing general partner of Decade Companies -- a
general partnership.
Michael G. Sweet, (age 46) Secretary, is a Certified Public
Accountant and is the Secretary of Decade Companies. Mr. Sweet
has a BS degree with an accounting major from Marquette
University in Milwaukee. Prior to joining Decade in 1982, Mr.
Sweet spent ten years in public accounting. Among other
certifications, Mr. Sweet holds a Series 27 License as a
Financial and Operations Principal with Decade Securities Corp.
He is a member of both the American Institute of Certified Public
Accountants and the Wisconsin Institute of Certified Public
Accountants.
Steven Cooper (age 50), is a Certified Property Manager and
has served as Vice-President of Decade Properties, Inc. Mr.
Cooper has over 18 years of property management experience and
has had responsibility for over 100 multi-family properties
containing over 22,000 units located in 14 states. During the
seven years prior to joining Decade (in 1989), he served as Vice-
President of Jacques-Miller, Inc. in Nashville, Tennessee from
July 1986 to December 1988, including serving as President of
Harvey Freeman and Sons, Inc. from January 1987 to December 1988;
he was Vice-President of New Homes Management Services Inc. of
Tampa, Florida from September 1982 to May 1986. He received a BS
Degree from Purdue University in Lafayette, Indiana.
Joseph Lawlor (age 30), is the General Manager of Hamlin's
Landing Hotel/Marina in Indian Rocks Beach, Florida and
Charthouse Suites/marina in Clearwater Beach, Florida. He
supervises and manages the day-to-day operations of both Hamlin's
Landing and Charthouse. Mr. Lawlor joined Decade Properties,
Inc. in January 1995 and has more than 8 years experience in the
hotel management and operations field.
R. Wayne Shaw (age 47) is Regional Manager of the Florida
properties for Decade Properties, Inc. In this capacity, he is
responsible for income and expense budgeting and implementation,
supervision and training of on-site management staffs and
inspection of residential acquisitions in the area. Before
joining Decade in November 1988, Mr. Shaw served as
President/Operations Manager of Home America Property Services,
Inc. in Tampa, Florida from 1983 to 1987 where he supervised
operation of 1,500 residential apartment units. He is a member
of the Institute of Real Estate Management (IREM) and he recently
held the position of Director of the Tampa Apartment Association.
Mr. Shaw received an Associates Degree in Business Management
from Lake City Junior College in 1967. He also holds a Florida
real estate license.
Executive Compensation
None of the Company's officers or directors receive any
compensation from the Company.
Advisory Committee
The Company will establish an advisory committee composed of
five to nine Holders which will review the Company's annual dues
and advise on hotel operations. Such advise is solely for the
benefit of the Company and is not binding upon it. Costs of
operating the Advisory Committee will be part of the annual dues.
As of the date of this Prospectus, no members of the committee
have been selected.
INTERESTS OF MANAGEMENT AND AFFILIATES
Services To Be Provided by Decade Properties Inc.
Decade Properties Inc., an affiliate of Decade Companies, is
a licensed real estate broker and is engaged in real estate
management. It will be employed by the Company to provide
property management services of the hotel. The Company has
entered into an agreement with Decade Properties, Inc. for the
management of the Charthouse Suites hotel until December 31, 2050
for a fee of $2,500 a month (such fee to increase by the CPI
index increase on the first of each year beginning January 1,
1997) plus reimbursement of expenses. Decade Properties, Inc.
will also manage the rental pool for a fee equal to 5% of the
rental revenue plus, as part of the annual dues, reimbursement of
its expenses. See "The Interests." Decade Properties, Inc. may
also enter into individual property management agreements with
Holder of partial Interests. The property management agreement
provides for a payment to Decade Properties, Inc. equal to the
present value rate (using an 8% discount rate) of the future
payments to be received in the event Decade Properties, Inc. is
removed as the property manager.
Services Which May be Provided by DPI Construction Corp.
DPI Construction Corp. ("DPIC"), an affiliate of the
Company, is engaged in the general contracting business. The
Company may enter into Agreements with DPIC whereby DPIC will
provide services in connection with renovation and remodeling
work on the Charthouse Suites hotel. Any such services will be
at rates comparable to those charged for comparable services by
unaffiliated contractors in the same geographic area.
Reimbursable Expenses
All expenses of the Company and Charthouse Suites hotel will
be billed directly to and paid by the Company to the extent
practicable. Decade Properties, Inc. and affiliates will be
reimbursed for the cost of goods and materials used by or for the
Company and Charthouse Suites hotel including the following
general functions of the Company: Company operations and
accounting, investor communications, and documentation, legal and
tax services, computer services, risk management, and other
expenses, and other operational and administrative expenses
necessary for the prudent operation of the Company.
Charthouse
The Company will only receive revenue or income from
payments for its Interests, including installments. Under the
Master License Agreement, most of Charthouse's funds will go to
Decade Properties Inc. as payment for rights to use the hotel
suites.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
Set forth below is a summary of certain federal income tax
considerations related to the offering. The discussion is based
on the Internal Revenue Code of 1986, as amended (the "Code"),
and on judicial decisions, U.S. Treasury regulations
("Regulations"), and IRS rulings and other administrative
materials interpreting the Code, all of which are subject to
change.
The discussion below is general and does not address tax
considerations that may be relevant to certain types of
investors. Moreover, taxes other than federal income taxes, such
as foreign, state and local taxes, and federal estate and gift
taxes, may affect a Holder's investment in an Interest. In
addition, controversy and uncertainty exist in many areas of the
federal income tax law which may affect the structure and
operation of the Company and a Holder acquiring and holding an
Interest. Accordingly, there can be no assurance that some of
the views expressed herein will not be challenged by the IRS.
PROSPECTIVE INVESTORS ARE URGED TO CONSULT, AND MUST DEPEND UPON,
THEIR OWN TAX ADVISERS WITH SPECIFIC REFERENCE TO THEIR OWN TAX
SITUATIONS AND POTENTIAL CHANGES IN APPLICABLE LAW, INCLUDING THE
APPLICATION OF STATE AND LOCAL, FOREIGN AND OTHER TAX
CONSIDERATIONS.
Entity Status
In the opinion of tax counsel, the sum of the contractual
relationships between Holders of Licenses and the Company will
likely create a partnership for federal income tax purposes.
Under Section 301.7701-2 of the Regulations, an arrangement
is classified as an organization if there are (1) associates, and
(2) an objective to carry on business for joint profit. Pursuant
to the provisions of the License, the Company will rent the
Interest of each Holder on behalf of such Holder. Profits from
the rental of Interests will be shared proportionately by Holders
of each class of Interest (i.e., net profit from the rental of B
Interests will be shared proportionately by the Holders of B
Interests). Tax counsel believes that the sum of the
relationships created between the Company and Holders of Licenses
causes Holders to be associates. Furthermore, tax counsel
believes that there is a common profit motive between the Holders
of Licenses because net profits are shared proportionately by
Holders of each class of Interests.
If, consistent with tax counsel's opinion, an organization
is created by the sum of the contractual relationships between
the Company and Holders of Licenses, the federal income tax
consequences to a Holder of an Interest will depend on whether
the deemed organization is treated as a partnership or an
association taxable as a corporation. If the organization is
classified as a partnership for federal income tax purposes and
is not a "publicly traded partnership," it will not be subject to
any federal income tax. Instead a Holder will be subject to tax
on his or her allocable share of the organization's income and
gain, and may be entitled to claim his or her allocable share of
the organization's losses. However, deduction of a Holder's
allocable share of loss from a partnership is subject to many
important limitations, a detailed explanation of which is beyond
the scope of this general discussion. Prospective Holders should
consult, and must depend on, their own tax advisor's advice
concerning detailed application of partnership tax rules to their
specific tax situations.
If, contrary to tax counsel's opinion, the deemed
organization is classified as an association taxable as a
corporation or as a "publicly traded partnership," Holders will
be treated as shareholders of a corporation, and (1) the taxable
income of the organization will be subject to the federal income
tax imposed on corporations, (2) items of income, gain, loss and
deduction will not flow through to the Holders to be accounted
for on their individual federal income tax returns, and (3)
distributions, if any, will be treated as corporate distributions
to Holders, some or all of which might be taxable as dividends.
Under Section 301.7701-2 of the Regulations, the
determination of whether an organization is treated as an
association taxable as a corporation or as a partnership depends
on whether the organization possesses the following
characteristics: (1) centralization of management, (2)
continuity of life, (3) free transferability of interests, and
(4) limited liability. An organization that possesses three or
more of these characteristics is treated as an association
taxable as a corporation. An organization that possesses fewer
than three of the characteristics is treated as a partnership
unless there are significant other factors that indicate that the
organization should be treated as an association taxable as a
corporation. Tax counsel believes that the relationships created
between the Company and Holders of Licenses will more probably
than not be characterized as a partnership for federal income tax
purposes because the deemed organization will likely lack the
corporate characteristics of limited liability and continuity of
life. In addition, tax counsel does not believe that there are
significant other factors to indicate that the organization
should be treated as an association taxable as a corporation.
The Company does not intend to seek a ruling from the IRS
that the relationships created by the Licenses create a
partnership rather than an association taxable as a corporation
for federal income tax purposes. No assurance can be given that
the IRS will not successfully challenge the tax status of the
relationship between the Company and the Holders of Licenses in
connection with an audit of the returns of either the Company or
any of the Holders, or that changes in the tax laws will not
significantly modify the statements expressed herein.
Characterization of Interests
The Company intends to request a ruling from the IRS that an
Interest will be characterized as a vacation license rather than
as a conveyance of real property, a lease, or other taxable form.
In a previous, nonbinding administrative ruling, the IRS has
characterized a vacation license as a contract to provide future
services much like that of a hotel reservation, but for a much
longer period of time. In distinguishing a vacation license from
a lease or conveyance of real property, the IRS noted that a
vacation license holder has the right to receive future hotel-
like services and that a vacation license holder generally does
not have a right to occupy specific premises during a
determinable period of time. In contrast, the IRS noted that a
conveyance and a lease both grant a right to occupy a defined
physical area or specific premises for a fixed or determinable
time.
Taxation of Holders
Each Holder will be liable for federal and applicable state
and local income taxes on any income earned by his or her
Interest, and any gain realized on the sale or other disposition
of his or her Interest. If the Interest is disposed of after a
one-year holding period, any resulting gain will be taxed at
capital gain rates, provided the Interest is a capital asset in
the hands of the Holder.
A Holder's right to deduct, and the extent to which he or
she may deduct, expenses associated with ownership of an Interest
will depend on how the Interest is used by the Holder.
Personal Use of Interest
If the Holder makes personal use of his or her Interest, any
expenses incurred in connection with the acquisition and
ownership of the Interest will not be deductible for federal
income tax purposes. In certain circumstances, however, a Holder
may be allowed a deduction for interest expense incurred in
connection with the acquisition of an Interest.
Generally, a Holder who finances the acquisition of an
Interest that will be used for personal purposes will not be
entitled to deduct the interest expense associated with the debt
because such interest will be characterized as "personal
interest" under Section 163(h) of the Code. The interest expense
will not be deductible as "qualified residence interest" under
Section 163(h) of the Code unless an Interest is treated as a
"qualified residence." If an Interest is a vacation license for
income tax purposes, it will not be treated as a "qualified
residence."
If a Holder finances the acquisition of an Interest with
debt qualifying as "home equity indebtedness" under Section
163(h) of the Code, the interest expense associated with such
debt will be deductible for tax purposes. Holders should consult
their own tax advisors in determining whether any debt used to
acquire an Interest is "home equity indebtedness" under the Code.
Rental Arising From Interest
If the Holder rents all or part of his Unit Weeks obtained
through his Interest to a third party, the extent to which he or
she may deduct expenses incurred in connection with the renting
of such Interest will depend upon: (1) whether the rental
activity is engaged in with the intent of making a profit
(Section 183); (2) whether the expenses are incurred in
connection with the production of income or for the management,
conservation, or maintenance of property held for the production
of income (Section 212) or whether the expenses are incurred in
connection with a trade or business (Section 162); (3) whether
the rights obtained under an Interest constitutes a "dwelling
unit" (Section 280A); and (4) whether the rental activity is a
"passive activity" (Section 469).
Section 183
Section 183 of the Code will allow a Holder to deduct losses
incurred in connection with the renting of his or her Unit Weeks
only if the renting of the Unit Weeks is engaged in with the
intent and reasonable expectation that the activity will produce
a taxable profit within a reasonable period of time. If the
rental activity is not engaged in for profit (so-called "hobby
losses"), expenses associated with the activity are deductible
only to the extent of income produced by the activity.
Those expenses, if any, that are deductible even if an
Interest is used for personal use are deductible regardless of
whether they exceed the revenue produced by renting an Interest.
These expenses, however, reduce the amount of hobby income
against which other hobby expenses can be offset. To the extent
there is remaining hobby income after reduction for these
expenses, other expenses may be deducted to the extent of
remaining hobby income. These deductions must be adjusted for
personal use, however, and are subject to the two-percent
limitation on miscellaneous itemized deductions under Section
67(a) of the Code. The Regulations under Section 183 provide
rules for allocation of expenses to the specific categories of
expenses described in this paragraph and adjustment of certain
expenses for personal use.
In determining whether an activity is engaged in for profit,
Section 1.183-2 of the Regulations provides that all facts and
circumstances are to be taken into account and no one factor or
adding up of factors is to be determinative. The Regulations
list nine factors that should normally be taken into account, but
caution that other factors may also be considered. The nine
factors listed in the Regulations are:
1. The manner in which the taxpayer carries on the
activity, i.e., whether it is businesslike, whether complete and
accurate books and records are maintained, and whether it is
carried on in a manner that is substantially similar to
activities of the same nature carried on by others at a profit.
2. The expertise of the taxpayer or his advisors.
3. The time and effort expended by the taxpayer. The fact
that the taxpayer devotes a limited amount of time to an activity
does not necessarily indicate a lack of profit motive where the
taxpayer employs competent and qualified persons to carry on the
activity.
4. The expectation that assets used in the activity may
appreciate in value. If the taxpayer seeks to rely on asset
appreciation as a basis for determining that renting is engaged
in for profit, the holding of an Interest for appreciation and
the renting of it may well be deemed two separate activities,
thereby disallowing any deductions for maintenance and operating
expenses, but allowing deduction of expenses directly
attributable to holding an Interest. However, if the rental
income exceeds the operating, maintenance, and other costs not
directly attributable to the holding of an Interest so as to
reduce the net costs of holding the Interest for appreciation, a
single activity of owning and operating the Interest should be
recognized. The Regulations under Section 183 provide rules for
allocating expenses between activities in circumstances in which
such allocation is required.
5. The success of the taxpayer in carrying on other
similar or dissimilar activities.
6. The taxpayer's history of income or losses with respect
to the activity. A series of losses during the initial or
start-up stage of an activity may not necessarily be an
indication that the activity is not engaged in for profit,
particularly where the realization of profit within a reasonable
time occurs.
7. The amount of occasional profits, if any, which are
earned.
8. The financial status of taxpayer, i.e., whether or not
he or she has substantial income against which operating losses
can be offset, generating a tax benefit, which factor normally
will be adverse to the taxpayer, especially if there are personal
or recreational elements involved.
9. Elements of personal pleasure or recreation. The
presence of personal motives in carrying on of an activity may
indicate that the activity is not engaged in for profit,
especially where there are recreational or personal elements
involved. On the other hand, a profit motivation may be
indicated where an activity lacks any appeal other than profit.
It is not, however, necessary that an activity be engaged in with
the exclusive intention of deriving a profit or with the
intention of maximizing profits. An activity will not fail the
profit motive test merely because the taxpayer has purposes or
motivations other than solely to make a profit. Also, the fact
that the taxpayer derives personal pleasure from engaging in the
activity is not sufficient to cause the activity to be classified
as not engaged in for profit if the activity is in fact engaged
in for profit as evidenced by other factors.
Section 183 creates a presumption in favor of the
determination that the activity is engaged in for profit if a
profit (without regard to operating loss carry forwards) is
realized in three out of five consecutive years. On the other
hand, failure to meet this test apparently does not create a
converse presumption. In order to allow the presumption to work,
a Holder is given an election to postpone the determination of
whether the presumption applies until the end of the fourth
taxable year following the taxable year in which he or she first
purchased his or her Interest and engaged in rental activity. A
Holder should make an election as prescribed in the Regulations
under Section 183 to preserve the ability to take advantage of
this presumption and the delay in determining its application.
However, a Holder should note that the Company makes no
assurances or representations concerning whether a Holder can
expect a profit for renting an Interest within four years.
Tax counsel is unable to opine as to whether the renting of
an Interest is an activity engaged in for profit. The
activities, operation and usage of a particular Holder determine
whether an Interest is held for profit or whether the renting of
an Interest is an activity engaged in for profit.
Sections 162 and 212.
If a Holder establishes that his or her Interest is held
with the intent of making a profit, thereby avoiding the
disallowance rules of Section 183, a Holder will be able to
deduct from income, subject to the limitations discussed below,
the expenses incurred in connection with acquiring, holding and
renting an Interest. Expenses, other than those which are
deductible even if the Interest is used for personal use, must be
reduced proportionately to the extent of the personal use of the
Interest by the Holder.
Under Section 162(a) of the Code, expenses attributable to a
trade or business carried on by a taxpayer may be deducted in
computing adjusted gross income. Similarly, under Section
162(a)(4) of the Code, a taxpayer may deduct from adjusted gross
income expenses relating to the production of income under
Section 212, where such expenses are attributable to property
held for the production of rents or royalties. Thus, if an
Interest is characterized as property held for the production of
rents or royalties, a Holder is entitled to deduct expenses
incurred in connection with acquiring, holding and renting an
Interest from his or her adjusted gross income whether the Holder
uses the Interest in a trade or business or holds the Interest
for the production of income.
There is no judicial or administrative guidance available
concerning what constitutes "property held for the production of
rents and royalties." However, in general legal terms, "rents"
are payments for the use of property and "royalties" are payments
for the use of intangible property. Because of the uncertainty
in this area, there can be no assurance that an Interest will be
characterized as property held for the production of rents and
royalties and that the IRS will not be able successfully to
challenge a Holder's characterization of an Interest as such and
consequently disallow the deduction of certain expenses.
If an Interest is not characterized as property held for the
production of rents or royalties, the deductions of a Holder who
holds an Interest for the production of income under Section 212
will be limited. Although Section 212 allows a deduction for all
expenses incurred in connection with the production or collection
of income and for the management and maintenance of property held
for the production of income, Section 67(b) of the Code
characterizes such expenses as miscellaneous itemized deductions.
Under Section 67(a) of the Code, miscellaneous itemized
deductions are deductible only to the extent that all of an
individual taxpayer's miscellaneous deductions exceed two percent
of his or her adjusted gross income.
This two percent limitation applies only if a Holder
acquires and holds an Interest for the production of income. If
a Holder acquires and holds an Interest for use in a trade or
business, expenses incurred in connection therewith (except to
the extent such expenses are allocated to personal use of the
Holder) are not subject to the two percent limitation. Thus, the
determination of whether an Interest is held for the production
of income under Section 212 or for use in a trade or business has
significant tax consequences. Unfortunately, no bright light
test has been used by the IRS or the courts in making this
determination. Rather, the particular factual situation of a
taxpayer is determinative. Tax counsel is therefore unable to
render an opinion concerning the characterization of a Holder's
Interest. Holders are advised to consult their individual tax
advisors for assistance in making this determination.
Section 280A.
Section 280A of the Code, which applies to a "dwelling unit"
used by a taxpayer as a residence, limits the deduction of
expenses (other than those expenses that are otherwise deductible
even if an Interest is used for personal use) to rental income
from the "dwelling unit." If a "dwelling unit" is not used as a
residence, the taxpayer may use his or her deductions to offset
other income to the extent such expenses exceed rental income.
Section 280A applies to individuals, partnerships, trust,
estates, and S corporations. Section 280A does not apply to a
regular corporation, except in its capacity as a member of a
partnership or S corporation or as a beneficiary of a trust or
estate.
Section 280A also establishes an expense allocation fraction
to be used in apportioning deductions between personal and
business use of a property to which Section 280A applies. The
expense allocation formula permits deduction of the fraction of
the expenses associated with the property (other than those that
are otherwise deductible even if a property is used for personal
use) of which the numerator is the days the property is actually
used for business and the denominator of which is the total of
the days the property is actually used (either for business or
personal use). With respect to time sharing arrangements, all
owners usage is aggregated in determining the numerator and
denominator of the fraction. This allocation formula applies if
a property is used for personal use on even one day. If an
Interest is a "dwelling unit," it is possible that Interests held
by other Holders could be aggregated with the Interest held by a
particular Holder, with the result that even a Holder that never
used an Interest for personal purposes could, nevertheless, have
otherwise deductible expenses reduced pursuant to Section 280A.
Section 280A only applies to "dwelling units." A "dwelling
unit" is defined by the Code and related Regulations as a house,
apartment, condominium, mobile home, boat or similar property,
that provides basic living accommodations such as sleeping space,
toilet and cooking facilities. The Section 280A definition of
"dwelling unit" is broad and characterization of property for
purposes of Section 280A is not affected by local law which
classifies property as other than a "dwelling unit." Although
tax counsel believes an Interest is an intangible asset, namely a
vacation license, the language of Section 280A may be broad
enough to include an Interest within the term "dwelling unit."
Because of the uncertainty in this area, the Company intends to
seek a ruling from the IRS that an Interest and the rights
afforded a Holder under a License do not constitute a "dwelling
unit" under Section 280A. However, no assurances can be given
that the IRS will find that an Interest and related License are
not a "dwelling unit," or that the IRS will rule on the question
at all.
Passive Activity Income and Loss
The Code further limits the deductibility of losses in
certain circumstances by providing that passive activity losses
incurred by an individual, estate, trust, or personal service
corporation or, with modifications, certain closely held
corporations may not be used to offset non-passive activity
income. In general, passive activity losses can be used only to
offset passive activity income, not wages or portfolio income
(such as dividends, interest, annuities and royalties). Any
passive activity losses in excess of passive activity income in
one year may be used to offset passive activity income in future
years. Upon disposition of the investor's entire interest in the
passive activity, all suspended losses from such activity are
specially allowable by reason of the disposition.
In general, a passive activity is one which: (1) is a trade
or business activity in which the taxpayer does not materially
participate; or (2) is a rental activity.
For purposes of the passive loss rules, a taxpayer may have
a trade or business activity even if the taxpayer does not meet
the general standard under Section 162 (discussed previously).
Under Section 1.469-1T(e)(2)(ii) of the Regulations, a trade or
business activity includes an activity that is engaged in for the
production of income. Thus, expenses that are otherwise
deductible under Section 212 of the Code may be subject to
disallowance under the passive activity loss rules.
Trade or business activities are treated as passive unless
the taxpayer materially participates in the activity. Under
Section 469 of the Code, a taxpayer is not treated as materially
participating in an activity unless his or her involvement in the
operation of the activity is regular, continuous, and
substantial. The Regulations interpret this standard by
providing that a taxpayer materially participates in an activity
if and only if the taxpayer meets any one of seven tests. The
first six tests are quantitative, whereas the seventh test
involves a consideration of the facts and circumstances of a
taxpayer's involvement in an activity.
Tax counsel believes that it is very unlikely that a Holder
will be treated as materially participating under any of these
seven tests in any activity associated with a business use of his
or her Interest because, under the terms of the Charthouse Suites
Vacation License Plan, sole authority for the management and
operation of Charthouse Suites hotel resides in the Company.
Therefore, income or loss generated by a Holder's use of his or
her Interest will probably be passive income or loss.
Under the passive loss rules, rental activities are treated
as passive without regard to whether they involve the conduct of
a trade of business or whether the taxpayer has materially
participated. Rental activity is any activity where payments are
principally for the use of tangible property. If an Interest is
a vacation license rather than a real property conveyance, it
initially appears that the renting of an Interest should not be
considered a rental activity because the Interest is not tangible
personal property, but rather an intangible asset. However, the
Regulations provide that where the actual or prospective
customers' payments are principally for the use of tangible
property, the activity is a rental activity, even if payments are
made pursuant to a service contract or other arrangement that is
not denominated as a lease.
There are several exceptions provided by the Regulations to
treatment as a rental activity. They include:
1. The average customer use for such taxable year is
seven days or less.
2. The average period of customer use is 30 days or
less, and significant personal services are
provided by or on behalf of the owner of the
property in connection with making the property
available for use by customers.
3. Extraordinary personal services are provided by or
on behalf of the owner of the property in
connection with making the property available to
customers (i.e. hospitals).
4. The rental activity is incidental to nonrental
activities of the taxpayer.
5. The activity involves customarily making property
available during defined business hours for
nonexclusive use by customers (i.e. golf courses
and health clubs).
6. The activity involves the provision of property to
a pass-through entity or joint venture in which
the taxpayer owns an interest.
7. An activity that involves the rental of a dwelling
unit used by the taxpayer as residence, as
determined under Section 280A, is not a rental
activity.
Under certain of the exceptions, it appears that, if renting of a
Holder's rights under a License were within the meaning of a
rental activity, that it would nevertheless be excluded under the
exceptions. For example, average customer use might be 30 days
or less and significant personal services are provided. It is
unclear, however, how to apply these tests in the context of
time-sharing arrangements as no administrative or judicial
guidance is available.
In the final analysis, it probably does not matter if the
activity is a rental activity or not. In any event, it will be
passive. If it is a rental activity, it is per se passive. If
it is not a rental activity, it will be a passive activity if a
Holder does not materially participate. As previously indicated,
tax counsel believes that it is unlikely that any Holder will
materially participate in any activity connected to his or her
Interest.
"At Risk" Rules
In addition to the above limitations imposed upon the
deductibility of losses Section 465 of the Code further limits
the deductibility of losses by individual taxpayers from a given
activity to the amount which the taxpayer is "at risk" in the
activity. Losses which cannot be deducted by a taxpayer because
of the "at risk" rules may be carried over to subsequent years
until such time as they are allowable. In determining the amount
of loss, if any, disallowed under Section 465, Sections 183 and
280A are applied prior to the application of Section 465 and
Section 469 is applied after any limitation under Section 465 is
determined.
A taxpayer will initially be considered to be "at risk" in
an activity to the extent of (1) the amount of money and the
adjusted basis of other property contributed to the activity by
the taxpayer; (2) amounts borrowed by the taxpayer for use in the
activity, except as described below, provided the taxpayer is
personally liable for the repayment of such borrowed amounts or
has pledged property (other than property used in the activity)
as security for the repayment of such borrowed amounts; and
(3) the taxpayer's share of any "qualified nonrecourse financing"
which is secured by real property used in the activity. A
taxpayer is not considered to be "at risk" to the extent he or
she is protected against loss through nonrecourse financing,
guarantees, stop loss agreements, or similar agreements.
If, as tax counsel concludes, an Interest is characterized
as a vacation license, the at-risk rules of Section 465 will not
apply to any activity engaged in by a Holder in connection with
the ownership of an Interest. A vacation license is an
intangible asset. Section 465 applies only to the renting of
Section 1245 property, which generally is limited to tangible
personal property. If an Interest is found to be a conveyance of
real property or a lease, contrary to tax counsel's opinion,
Section 465 would apply and could further limit deduction of
losses by a Holder.
Depreciation/Amortization
Section 167 of the Code allows a depreciation deduction for
property used in a taxpayer's trade or business or for property
held by the taxpayer for the production of income. Under Section
1.167(a)-3 of the Regulations, an intangible asset may be the
subject of a depreciation deduction if the intangible asset has a
limited and ascertainable useful life. Section 197 of the Code
provides that the acquisition cost of certain intangible assets
is amortized over a 15 year period. An Interest is not a
"section 197 intangible."
If an Interest is characterized as a vacation license, an
intangible asset, a Holder who uses his or her Interest in a
trade or business or for the production of income, will be
entitled to a depreciation deduction equal to the acquisition
cost of the Interest. A ratable portion of the acquisition cost
will be deductible each tax year as depreciation, over the life
of the Interest, adjusted each year for any personal use of the
Interest by the Holder. Because the Holder has the right to
terminate the License, the acquisition cost will not include any
amount that has not been paid (or, in the case of an accrual
basis taxpayer, is not yet due and payable).
Section 179 of the Code allows a taxpayer (other than
trusts, estates, and certain noncorporate lessors) to expense
certain depreciable business assets in the year of acquisition by
electing to treat the cost of new property as an expense rather
than as a capital expenditure subject to depreciation. The
deductions for which the election is made are allowed for the tax
year in which the Section 179 property is placed in service and
are in lieu of a depreciation deduction. Generally, a taxpayer
may elect to expense only tangible personal property under
Section 179. Therefore, regardless of whether an Interest is an
intangible vacation license, a conveyance of real property or a
lease, a Holder will not be able to expense acquisition costs
under Section 179.
Alternative Minimum Tax
Taxpayers are subject to an alternative minimum tax ("AMT")
if the AMT exceeds the income tax otherwise payable by the
taxpayer for the year. Due to the complexity of the AMT
calculations, investors should consult with their tax advisers as
to whether the purchase of an Interest might create or increase
their potential AMT liability.
Corporate Investors
Section 183 does not apply to corporate Holders. Section
280A does not apply to corporations not electing Subchapter S
treatment. Section 469 applies only to certain closely held C
corporations and personal service corporations. However,
deduction of expenses associated with the acquisition and
ownership of an Interest by a corporation may be completely
disallowed or substantially restricted.
Section 274(a)(1) of the Code specifically disallows any
deduction relating to an "entertainment facility." Judicial
decisions indicate that any expenses attributable to the upkeep
of such property, or for the continuing enjoyment of the property
(i.e. depreciation, maintenance, insurance, etc.) are
nondeductible, regardless of whether they are attributable to the
business use of the property. In other words, the cases
emphasize that no deduction really means no deduction, even where
facilities are used both for business and entertainment. The
term "entertainment facility" has been broadly interpreted and
tax counsel has advised that it is likely that an Interest will
be held to be an "entertainment facility" within the meaning of
Section 274.
Section 274(e) of the Code does provide for certain
exceptions to the entertainment facility disallowance rule.
Expenses incurred in connection with an entertainment facility,
but that are treated as compensation to an employee, are not
disallowed. Similarly, expenses incurred by a taxpayer that are
directly related to business meetings of the taxpayer's
employees, stockholders, agents or directors are not disallowed.
While this exception will apply to bona fide business meetings
even though some social activities are provided, it will not
apply to meetings which are primarily for social or nonbusiness
purposes rather than for the transaction of the taxpayer's
business.
There are other exceptions to the general rule of
disallowance as well. The discussion contained herein is not a
complete treatise on the ownership of an Interest by a
corporation. There are numerous issues involved in corporate
ownership and corporations should obtain tax advice from their
own counsel before purchasing an Interest.
Future Developments
The President and Congress and various states continue to
discuss and propose additional changes to the tax laws which
could impact the tax consequences to Holders. Holders are urged
to consult with their own tax advisers and counsel.
CERTAIN FLORIDA TAX MATTERS
State and Local Taxes
In addition to the federal income tax considerations
described above, investors should consider potential state and
local tax consequences of the purchase of an Interest.
State and Local Taxes
The discussion below is limited to the state and local taxes
specifically enumerated and is not intended to be a comprehensive
discussion of all state and local tax consequences of the
purchase of an Interest. Prospective investors should consult
with, and must depend upon their own tax advisors for a complete
evaluation of the state and local tax considerations relating to
the purchase of an Interest.
Excise Taxes on Documents.
Excise Tax on Transfers of Real Estate. Under Florida law,
an excise tax is imposed at the rate of 70 cents for each $100 of
consideration paid on deeds and other instruments that transfer
interests in real property . Although the Company has been
advised by the Florida Department of Revenue that an Interest is
not a transfer of an interest in real property under Florida law,
the Florida Department of Revenue (the "Department") has
informally advised tax counsel that this excise tax will apply at
the time of the sale of an Interest and will be imposed on the
subscription price of an Interest (less any sales discounts).
The Company will be required to collect the tax at the time an
Interest is sold. The purchaser of an Interest will be liable
for this excise tax as follows:
Tax Payable
Subscription Price (Exclusive of
Any Discounts)
Class A Interest $17,000 $119.00
Class B Interest 20,000 140.00
Class C Interest 26,500 185.50
Class D Interest 36,500 255.50
Class E Interest 39,500 276.50
Class F Interest 61,000 427.00
Excise Tax on Stock Certificates. Under Florida law, an
excise tax is imposed at the rate of 35 cents on each $100 of
face value on certificates of stock or shares evidencing an
ownership interest in any corporation. The Department has
informally advised tax counsel that this excise tax will be
imposed on the subscription price of an Interest only if the
Subscription Agreement for the Interest is accepted by the
Company in Florida. The Company has advised tax counsel that it
intends to accept all Subscription Agreements for the purchase of
Interests in Wisconsin and therefore, under these circumstances,
the sale of an Interest will not be subject to this excise tax.
Excise Tax on Promissory Notes. Florida also imposes an
excise tax on promissory notes at the rate of 35 cents per $100
of indebtedness evidenced by the promissory note. Therefore, to
the extent the Holder of an Interest elects to pay on an
installment basis for an Interest, this excise tax will be
imposed on the principal amount of the obligation owed by a
Holder. However, the Department has informally advised tax
counsel that this excise tax will be imposed only if the
subscription agreement is executed or delivered in Florida.
Because of the complexity and uncertainty in this area, the
Company has sought a ruling from the Department concerning the
application of the excise taxes described in this section to the
purchase of an Interest by a Holder. However, no assurances can
be given that the Department will rule in accordance with the
informal guidance it has provided to tax counsel and which has
been described herein.
Sales Taxes.
Under state and local law in Florida, a combined sales tax
of eleven percent is imposed on the rental, leasing, letting or
granting of a license for the use of real property or transient
living accommodations located in Pinellas County. The eleven
percent tax is comprised of the following: (1) a Florida state
sales tax of six percent, (2) a local county sales tax of one
percent, and (3) a tourist development tax of four percent.
Because an Interest is treated as a security for state excise tax
purposes and is subject to the excise taxes described above, the
Department has informally advised tax counsel that the purchase
of an Interest will not be subject to the combined sales tax.
For similar reasons, the Department has informally advised tax
counsel that the receipt of reimbursed expenses paid to the
Company by the Holder of an Interest, which will be utilized by
the Company to cover the maintenance and other expenses of the
hotel and for the administration and management of property
associated with the security, are also not subject to the
combined sales tax.
The Department has also advised tax counsel that the rental
of a Holder's allotted eight weeks under the rental pool will be
the rental of transient accommodations subject to the combined
sales tax. Suites, as agent for the Holder of an Interest, will
register as a dealer and remit the applicable combined sales tax
due on receipts from the rental of suites in the rental pool.
Because of the complexity and uncertainty in this area, the
Company has sought a ruling from the Department (1) that the sale
of an Interest and the payment of reimbursed expenses will not be
subject to the combined sales tax, and (2) that Suites, acting as
rental agent, may collect and remit the combined sales tax on
payments collected in connection with the rental of Holders'
suites under the rental pool. However, not assurances can be
given that the Department will rule in accordance with the
informal guidance it has provided to tax counsel and which has
been described herein.
Upon proper notice, a Holder may use one or more of his or
her allotted weeks for personal use. In the opinion of tax
counsel, because the Interests are treated as securities, the
personal use of a suite by a Holder will not be subject to the
combined sales tax. However, the law is uncertain in this area
and no assurance can be given that the Department could not
successfully assert that a Holder is liable for the combined
sales tax on the personal use of a suite. Holders must consult
with, and must depend upon the advice of their own tax advisors.
The Company does not intend to seek a ruling from the Department
that the personal use of a suite for one or more weeks by the
Holder is not subject to the combined sales tax.
Upon proper notice, a Holder may also rent one or more of
his or her allotted weeks to a third party. Tax counsel has
advised that the rental of one or more of a Holder's allotted
eight weeks will be the rental of transient accommodations
subject to the combined sales tax. The Holder will be required
to collect and remit the combined sales tax on the gross rental
proceeds.
LIABILITY AND INDEMNIFICATION OF OFFICERS AND DIRECTORS
Certain indemnification agreements to be entered into with
Charthouse, and the Company's Articles of Incorporation and
Bylaws require the Company to indemnify the director and
officers, among others, against claims and liabilities and
reasonable expenses actually incurred by them in connection with
any such claim or liability by reason of their services in those
or other capacities unless it is established that the act or
omission of the director or officer was material to the matter
giving rise to the proceeding and was committed in bad faith or
was the result of active and deliberate dishonesty, or the
director or officer actually received an improper personal
benefit, or in the case of any criminal proceeding, the director
or officer had reasonable cause to believe that the act or
omission was unlawful.
The Company will enter into indemnification agreements with
each of its officers and directors. The indemnification
agreements will require, among other things, that the Company
indemnify its directors and officers to the fullest extent
permitted by law and advance to the officers and directors all
related expenses, subject to reimbursement if it is subsequently
determined that indemnification is not permitted. Under these
agreements, Charthouse also must indemnify and advance all
expenses incurred by officers and directors seeking to enforce
their rights under the indemnification agreement, and cover
officers and the directors under Charthouse's liability
insurance. Although the form of indemnification agreement offers
substantially the same scope of coverage afforded by provisions
in the Articles and Bylaws, it provides greater assurance to the
director and officers that indemnification will be available
because, as a contract, it cannot be modified unilaterally in the
future by the director or by the Holders to eliminate the rights
it provides.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to director, officers or persons
controlling Charthouse pursuant to the foregoing provisions, the
Company has been informed that in the opinion of the Commission
such indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable. Prior to seeking
court approval for indemnification, Charthouse will cause the
party seeking indemnification to apprise court of the position of
state administrators and the Securities and Exchange Commission
with respect to indemnification for securities laws violations
and to submit to such court the question whether such
indemnification is or is not against public policy as expressed
in the Securities Act (in light of the position of the state
administrators and the Securities and Exchange Commission).
LEGAL MATTERS
Quarles & Brady, Milwaukee, Wisconsin, has passed upon the
validity of the issuance of the Interests offered pursuant to
this Prospectus and on certain tax matters as described under
"Federal Income Tax Considerations." Quarles & Brady has in the
past represented and is presently representing the Company and
Decade Properties, Inc. in certain other matters. Holders should
not consider Quarles & Brady to be their legal counsel with
respect to this Offering or any other related matter, and are
strongly encouraged to seek the advice of qualified and
independent legal counsel with respect to entering any of the
agreements or contracts contemplated by this Offering and any
other related matters, including counsel for the tax
considerations of a purchase of an Interest.
There are currently no pending legal proceedings which would
have a material adverse affect on the Company, nor are there any
proceedings in process or known to be contemplated by any
governmental authority which would have a material effect on the
Company.
EXPERTS
The balance sheet of Charthouse dated as of August 31, 1996
appearing in this Prospectus and Registration Statement has been
audited by Ernst & Young LLP, independent auditors, as set forth
in their report appearing elsewhere herein, and is included in
reliance upon such report given upon the authority of such firm
as experts in accounting and auditing.
<PAGE>
FINANCIAL STATEMENTS AND RELATED INFORMATION
Report of Ernst & Young LLP, Independent Auditors
The Board of Directors
Charthouse Suites Vacation Ownership, Inc.
We have audited the accompanying balance sheet of Charthouse
Suites Vacation Ownership, Inc. (the Company) as of August 31,
1996. This balance sheet is the responsibility of the Company's
management. Our responsibility is to express an opinion on this
balance sheet based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the balance sheet is free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the balance sheet. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
balance sheet presentation. We believe that our audit of the
balance sheet provides a reasonable basis for our opinion.
In our opinion, the balance sheet referred to above presents
fairly, in all material respects, the financial position of the
Company at August 31, 1996, in conformity with generally accepted
accounting principles.
Milwaukee, Wisconsin ERNST & YOUNG LLP
September 24, 1996
<PAGE>
Charthouse Suites Vacation Ownership, Inc.
Balance Sheet
August 31, 1996
Assets
Cash $ 9,733
Prepaid expenses 267
$ 10,000
Shareholder's equity
Common stock, par value $.01 per share,
authorized 100,000 shares,
issued 1,000 shares $ 10
Paid-in capital 99,990
100,000
Less stock subscription receivable 90,000
Total shareholder's equity $ 10,000
See accompanying notes.
<PAGE>
Charthouse Suites Vacation Ownership, Inc.
Notes to Balance Sheet
August 31, 1996
1. Organization, Description of Business and Planned Offering
Charthouse Suites Vacation Ownership, Inc. (the Company) was
formed on April 16, 1996 to facilitate the sale of interests to
rent or use the Charthouse Suites Hotel (the Hotel). The Company
has the right to sell A, B, C, D, E and F Class Interests (the
Interests) pursuant to a Master License Agreement with Decade
Properties, Inc. (Decade, an affiliate of the Company and owner
of the Hotel). Under the Master License Agreement, the Company
must pay Decade license payments approximately equal to the cash
proceeds, net of offering expenses, that the Company receives
upon the sale of the Interests. Purchasers of the Interests will
have the right to use for two specific and consecutive weeks of
every spring, summer, fall and winter season until December 31,
2050, a hotel suite of a certain category in the Hotel. Owners of
the Interests do not acquire an ownership or equity interest in
the Company, but pursuant to the Charthouse Suites Vacation
License Plan will acquire a license right to utilize a suite in
the Hotel.
The Company plans to offer for sale the following Interests:
Number of Price per
Class of Interest Interests Interest
A Interest 36 $17,000
B Interest 24 20,000
C Interest 36 26,500
D Interest 36 36,500
E Interest 12 39,500
F Interest 6 61,000
Assuming the maximum number of Interests are sold, the gross
proceeds from the sale will be approximately $4,200,000 exclusive
of offering expenses. The proceeds raised from the sales of
<PAGE>
Charthouse Suites Vacation Ownership, Inc.
Notes to Balance Sheet (continued)
1. Organization, Description of Business and Planned Offering
(continued)
Interests will be remitted to Decade as payment for amounts owed
under the Master License Agreement with the Company (discussed
below). If fewer than 76 Interests are sold by December 31, 1997,
the Company has an option to cancel the underlying licenses and
return the entire subscription amount, reduced by certain
payments or benefits received, to investors.
Holders of Interests will be required to share in the annual
maintenance and other related costs, expenses and reserves of
providing the Hotel services and property and equipment for their
suite in the Hotel. Holders will be assigned a proportionate
share of such expenses based upon a formula allocating fixed and
variable costs to their class of Interest.
An investor may finance the purchase of an Interest through the
Company by paying at least 25% of the subscription price and
entering into a subscription agreement for the remainder of the
subscription price to be payable in 360 monthly installments with
an increased payment of 9% per year.
Under a Guaranteed Rental Arrangement, developed as an incentive
to early purchasers of Interests, the Company has guaranteed that
investors purchasing Interests within one year of the effective
date of the planned offering will receive guaranteed rental
payments, at varying rates, upon the put of rights to use Hotel
suites to the Company. All puts must be exercised no later than
five years after the effective date of the offering.
Alternatively, investors purchasing Interests within one year of
the effective date of the offering may elect to receive a cash
discount ranging from 1.5% to 5% applicable to the subscription
price by surrendering rights to the Guaranteed Rental
Arrangement.
<PAGE>
Charthouse Suites Vacation Ownership, Inc.
Notes to Balance Sheet (continued)
2. Shareholder's Equity
On April 16, 1996, the Company's sole shareholder entered into a
subscription agreement to purchase 100 shares of the Company's
common stock for $1,000 per share or an aggregate subscription
price of $100,000. As of August 31, 1996, the sole shareholder
had paid $10,000 of the subscribed amount.
3. Transactions with Related Parties
In addition to the related-party transactions summarized above,
affiliates of the Company will provide management and consulting
services to the Company and administer the rental pool pursuant
to agreements with the Hotel.
Decade will be employed by the Company to provide property
management services to the Hotel. The Company has entered into a
Property Management Agreement with Decade whereby Decade will
manage the Hotel until December 31, 2050 for a fee of $2,500 a
month (such fee to increase by the CPI index increase on the
first of each year beginning January 1, 1997) plus reimbursement
of expenses. The Property Management Agreement provides for a
payment to Decade equal to the present value rate of the
remaining future payments to be received in the event Decade is
removed in part or whole, as the property manager.
Holders of the Interests may utilize the Company's rental pool if
they do not want to or cannot use one or more of their allotted
weeks of each year. Decade will manage the rental pool for a fee
equal to 5% of the rental revenue. Interest holders may also seek
to have Decade enter into individual property management
agreements.
DPI Construction Corp. (DPIC), an affiliate of the Company, is
engaged in the general contracting business. The Company may
enter into agreements with DPIC whereby DPIC will provide
services in connection with renovation and remodeling work on the
Hotel.
<PAGE>
Charthouse Suites Vacation Ownership, Inc.
Notes to Balance Sheet (continued)
3. Transactions with Related Parties (continued)
Decade and affiliates will be reimbursed for the actual cost of
goods and materials used by or for the Company, including the
following general functions of the Company: Company operations,
Company accounting, investor communications, investor docu-
mentation, legal services, tax services, computer services, risk
management, Company organizational and offering expenses, and any
other related operational and administrative expenses necessary
for the organization and operation of the Company.
4. Offering Costs
As of August 31, 1996, $100,576 of legal fees had been incurred
related to the planned offering discussed in Note 1. Decade will
pay such costs and be reimbursed by the Company should sufficient
funds become available to break escrow on the planned offering.
The Company will record such amounts at that time.
<PAGE>
ANNEX A
CHARTHOUSE SUITES VACATION LICENSE PLAN
THIS INSTRUMENT PREPARED BY:
Mary Neese Fertl, Esq.
Quarles & Brady
411 East Wisconsin Avenue
Suite 2900
Milwaukee, WI 53202
VACATION LICENSE PLAN
FOR
CHARTHOUSE SUITES
This Vacation License Plan (the "Plan") for Charthouse
Suites is made this ____ day of __________, 1996, by CHARTHOUSE
SUITES VACATION OWNERSHIP, INC., a Florida corporation
("Developer").
WHEREAS, Decade Properties, Inc., (the "Owner") a Wisconsin
corporation, is the owner in fee simple of the real property
described on Exhibit "A" attached hereto (the "Property") and has
entered into a certain Master License Agreement and Non-exclusive
Easement Agreement with the Developer which granted to the
Developer certain rights to use the hotel suites, facilities and
common areas of the Property; and
WHEREAS, the Developer desires to sell Vacation Investment
and Ownership Interests (the "Interests") which shall entitle the
holder to the income arising from rental or, upon the proper
notice, the right to use for eight weeks in each calendar year
(two weeks in each season), a hotel suite of a certain category
in Charthouse Suites located upon the Property, until
December 31, 2050, pursuant to the terms of a Subscription and
Purchase Agreement for Charthouse Suites Vacation Investment and
Ownership Interests between the Developer and the purchaser; and
WHEREAS, the Developer desires to provide for the
preservation of the values and the amenities which are available
for use by the purchasers of Interests, and to this end does
hereby establish this Vacation License Plan as hereinafter set
forth.
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, the Developer hereby declares that
the Property shall be owned, held, used, transferred, sold,
conveyed, demised and occupied subject to the conditions,
covenants, restrictions, easements, reservations, regulations and
burdens hereinafter set forth, until this Plan is terminated as
provided herein.
ARTICLE I
DEFINITIONS
The following words and phrases when used in the Plan
(unless the context should clearly reflect another meaning) shall
have the following meanings:
A. "Advisory Committee" means the board of Licensees
selected by the Developer pursuant to the terms of this Plan.
B. "Annual Assessment" means the share of funds required
for the payment of Common Expenses which is assessed annually
against a Licensee.
C. "Assigned Unit Weeks" means the Unit Weeks assigned to
a Licensee by the Developer pursuant to the Subscription
Agreement executed by such Licensee and the Developer or assigned
by the Managing Entity.
D. "Common Elements" means the hotel suites, the four
story hotel structure, including without limitation the hallways,
elevators, mechanical equipment, heated swimming pool, the
parking areas, and the laundry room.
E. "Common Expenses" means the costs incurred in the
operation of the Resort Facility as more particularly set forth
in this Plan.
F. "Developer" means Charthouse Suites Vacation Ownership,
Inc., its grantees, successors and assigns. A "Licensee" (as
hereinafter defined) shall not by reason of the purchase of a
"License" (as hereinafter defined) be deemed a grantee, successor
or assign of the Developer's rights or obligations under the Plan
unless such Licensee acquires the interests for purposes of
resale or is specifically so designated as a successor or assign
of the Developer's rights or obligations in the respective
instrument of conveyance or other instruments executed by the
Developer. Nothing herein shall be deemed to contradict the
definition of Developer in the Act with regard to the sale of
licenses.
G. "Interest" or "License" means a right to collect
revenues, if any, arising from rental or, upon proper notice, the
right to occupy a certain category of hotel suite in Charthouse
Suites for the Weeks assigned to the Licensee under a
Subscription Agreement, which License if not sooner terminated
shall terminate on December 31, 2050, which right is neither
coupled with a freehold interest nor coupled with an estate for
years with a future interest in a time share property, as
described in the Plan.
H. "Licensee" means a person to whom the Developer has
entered into a Subscription Agreement, his heirs, successors or
assigns.
I. "Managing Entity" means Charthouse Suites Vacation
Ownership, Inc., its grantees, successors or assigns, or such
other entity designated by the Developer from time to time to
serve as such Managing Entity, which party has acknowledged in
writing it has accepted the duties and obligations of serving as
Managing Entity.
J. "Plan" or "Vacation License Plan" means this Vacation
License Plan, as amended from time to time.
K. "Resort Facility" means the property described on
attached Exhibit A, all improvements thereon (including the hotel
suites, the Common Elements and all furniture, furnishings and
fixtures therein) and all easements and rights appurtenant
thereto intended for use in connection therewith. The Resort
Facility does not include the Marina.
L. "Rules and Regulations" means the Rules and Regulations
established and promulgated from time to time by the Managing
Entity with respect to the use of the Resort Facility.
M. "Service Period" means that period of time commencing
at the end of each Unit Week and ending at the beginning of the
next Unit Week to be used by the Managing Entity to clean,
service and maintain a Unit.
N. "Special Assessment" means a share of funds required
for the payment of Common Expenses which from time to time is
assessed against a Licensee in addition to the Annual Assessment.
O. "Unit" means one of the 25 suites in the Resort Facility.
"Units" means more than one Unit.
P. "Unit Week" or "Week" means a period of use of a Unit
which shall consist of seven (7) days. Unit Weeks are computed
as follows:
Unit Week No. 1 is the Seven (7) Days
commencing on the first Friday, Saturday or
Sunday in each calendar year.
Unit Week No. 2 is the Seven (7) Days
succeeding.
Additional Unit Weeks, up to and including
Unit Week No. 52, are computed in a like
manner.
Occupancy shall begin at 4:00 P.M. on the
Start Day and end at 10:00 A.M. on the same
day of the immediately following week. Any
excess days not otherwise assigned shall
remain the property of the Developer.
ARTICLE II
DESCRIPTION OF IMPROVEMENTS AND TIME SHARING PLAN
A. Description of Resort Facility.
The Resort Facility includes a four story hotel
containing 25 suites located at 850 Bayway Boulevard, Clearwater
Beach, Florida, together with certain common amenities, as exist
from time to time, including the heated swimming pool, parking
areas, laundry room and administrative office. The Resort
Facility is owned in fee simple by Decade Properties, Inc. The
Developer is the holder of a Master License and Non-exclusive
Easement which granted to the Developer certain rights to use the
suites and common areas of the Resort Facility. The Developer
has been formed to facilitate the sale of Interests to use the
Resort Facility. The Resort Facility does not include the
Marina.
B. Vacation License Plan.
The Developer shall enter into a License with each
Licensee, whereby such Licensee is granted the right to receive
rental revenue arising from rental of the Units, if any, or, upon
written request, to occupy a particular category of suite for
eight weeks each calendar year (two weeks in each season)
terminating on December 31, 2050. Winter is Weeks 46-52 and 1-6,
Spring is Weeks 7-19, Summer is Weeks 20-32 and Fall is Weeks 33-
45. The Developer and/or Managing Entity shall establish the
annual Schedule in its sole discretion, whose decision as to the
Weeks assigned to a Licensee each calendar year shall be final.
The particular Unit to which the Licensee's Weeks shall be
applicable shall be assigned by the Developer and/or the Managing
Entity in the category of the Class of Interest purchased by the
Licensee. The category of suite that may be used by a Licensee
shall be determined by the Class of Interest purchased by the
Licensee. The Classes of Interests are as follows:
Class A The ownership of A Interests allows the
Interests--Standard Licensee use of a standard studio suite
Studio Suite: with 2 queen sized beds overlooking the
marina and Clearwater Bay, for two weeks
in each season until December 31, 2050.
Units 201, 202, 301, 302, 401 and 402 in
Charthouse Suites Hotel are the suites
applicable to the Class A Interests.
Class B The ownership of B Interests allows the
Interest--King Studio Licensee use of a spacious King Studio
Suite: suite with 1 king sized bed overlooking
the marina and Clearwater Bay, for two
weeks in each season until December 31,
2050. Units 103, 104, 105 and 106 in
Charthouse Suites Hotel are the suites
applicable to the Class B Interests.
Class C The ownership of C Interests allows the
Interests--Large Licensee use of a large studio suite
Studio Suite: with 2 queen sized beds overlooking
Clearwater Bay, the marina or southern
exposure, for two weeks in each season
until December 31, 2050. Units 101,
102, 206, 207, 305 and 306 in Charthouse
Suites Hotel are the suites applicable
to the Class C Interests.
Class D Interests-- The ownership of D Interests allows the
1 Bedroom Suite: Licensee use of a one bedroom suite
overlooking the marina, Clearwater Bay,
the swimming pool or southern exposure
for two weeks in each season until
December 31, 2050. Units 204, 303, 304,
307, 403 and 404 in Charthouse Suites
Hotel are the suites applicable to the
Class D Interests.
Class E Interests-- The ownership of E Interests allows the
1 Bedroom Suite Licensee use of a one bedroom suite with
(with lanai): lanai with a view of Clearwater Bay, for
two weeks in each season until
December 31, 2050. Units 203 and 205 in
Charthouse Suites Hotel are the suites
applicable to the Class E Interests.
Class F Interest-- The ownership of F Interests allows the
Penthouse: Licensee use of a two bedroom penthouse
suite, with a fully equipped kitchen,
living room, den, dining room, two full
baths (one with a jacuzzi), and a large
private balcony overlooking Clearwater
Bay, for two weeks in each season until
December 31, 2050. Unit 405 in
Charthouse Suites Hotel is the suite
applicable to the Class F Interest.
The remainder interest shall be vested in the Developer and the
Owner and their heirs, successors and assigns, as their interests
may appear. A Licensee may be the Licensee of more than one (1)
License or more than one (1) Interest. The Licensee shall be
entitled to the exclusive use of a Unit in the Class of Interest
purchased, the specific Unit to be designated by the Managing
Entity, which use shall only be during the Assigned Unit Weeks
and to no other Unit or during any other Unit Weeks. A Licensee
should expect to occupy different suites available within the
Class of Interest purchased for each of the Licensee's Unit
Weeks. During the Assigned Unit Weeks, the Licensee shall also
have the right to the non-exclusive use of the common areas of
the Resort Facility. A Licensee shall not have the right to the
use of the Resort Facility, except during such Licensee's
Assigned Unit Weeks.
ARTICLE III
MANAGEMENT OF THE RESORT FACILITY
A. Maintenance and Management of the Resort Facility. The
Managing Entity shall manage and operate the Resort Facility.
The Managing Entity shall be responsible for supervising the
maintenance, repair and replacement of the entire Resort
Facility, the costs of which to be a Common Expense. The
Managing Entity may enter into an agreement(s) with such firms or
companies as it may determine to provide certain management,
services and maintenance with respect to the Resort Facility as
the Managing Entity deems advisable and for such period of time
and on such basis as it determines. The fee for such services
shall be deemed a Common Expense and included in the regular
maintenance assessment.
B. Duties of the Managing Entity. The Managing Entity
shall have the following duties:
1. Repair and Maintenance of Resort Facility: The
Managing Entity shall be responsible for supervising the
maintenance, repair and replacement of all of the Resort
Facility.
2. Color Schemes: The Managing Entity shall
determine the interior color scheme, decor and furnishings of
each Unit in the Resort Facility, as well as the proper times for
redecorating and replacements thereof. In addition the Managing
Entity shall determine the color scheme of the buildings and all
exteriors and the interiors thereof and shall be responsible for
the maintenance thereof. The Managing Entity shall maintain and
keep all portions of the Resort Facility managed in a condition
substantially similar to the architectural design or such change
in design as the Developer and Owner may determine from time to
time, unless the Developer and Owner consent in writing to such
structural changes or improvements.
3. Utilities: The Managing Entity shall acquire
water, sewer, garbage disposal, electrical, telephone, gas and
other necessary utility services for the Resort Facility.
4. Insurance: The Managing Entity shall obtain,
maintain and enforce the policies of insurance as obtained by the
Managing Entity from time to time.
5. Rules and Regulations: The Managing Entity shall
make, establish, promulgate, amend and repeal rules and
regulations with respect to the use of Units and the Resort
Facility.
6. Enforcement of Restrictions and Rules: The
Managing Agent shall perform such other acts, whether or not
expressly authorized by the Plan, as may be reasonably necessary
to enforce any of the provisions of the Plan and the Rules and
Regulations, subject to its reasonable discretion.
7. Compliance with Act: The Managing Entity shall
perform all duties of a managing entity to the extent required by
the Laws. In addition to such requirements, the Managing Entity
shall:
(a) Provide, each year, to all Licensees an
itemized Annual Budget which shall include all estimated revenues
and expenses;
(b) Maintain all books and records concerning the
Resort Facility. The books and records, with respect to the
Resort Facility shall be kept separately from any other project
of the Managing Entity. All such books and records shall be
reasonably available for inspection by any Licensee or the
authorized agent of any Licensee.
(c) Maintain among its records and provide to the
Division upon request a complete list of the names and addresses
of all Licensees in the Vacation License Plan. The Managing
Entity shall update this list no less frequently than quarterly;
(d) Make available for inspection by the
Division, the books and records of the Plan upon request of the
Division;
(e) Schedule the occupancy of Units and assign
the Unit Weeks in the Resort Facility to the Licensees in
accordance with their Licenses; and
(f) Perform any and all other functions and
duties which are necessary and proper to maintain, operate and
manage the Resort Facility.
C. Powers and Authority of the Managing Entity.
In addition to such other powers as may be set forth in
the Plan, the Managing Entity shall have the power to do and
perform any and all lawful things which may be authorized,
required or permitted to be done by the Managing Entity under
this Plan or by law and to do and perform any and all acts which
are necessary or proper for or incidental to the operation of the
Resort Facility (the costs of which shall be Common Expenses),
including without limitation:
1. Assessments: To levy assessments on the Licensees
and to enforce payments of such assessments.
2. Right of Entry and Enforcement: To enter upon any
portion of the Resort Facility for the purpose of enforcing by
peaceful means any provisions of this Plan or for the purpose of
maintaining, replacing or repairing any such area if, for any
reason whatsoever, maintenance, replacement or repair is required
thereto.
3. Employment of Agents: To employ the services of
any person or corporation as Manager, or other employees, to, as
may be directed by the Managing Entity, manage, conduct and
perform the business, obligations and duties of the Managing
Entity, and to enter into contracts for such purpose. Such agent
shall have the right to ingress and egress over such portions of
the Resort Facility as is necessary for the performance of such
business, duties and obligations.
4. Employment of Professional Advisors: To employ
professional council and advisors from persons, firms or
corporations as determined by the Managing Entity, such as, but
not limited to, landscape architects, recreation experts,
planners, lawyers and accountants.
5. Miscellaneous: To make and enter into contracts,
leases or concessions.
6. Personal Liability: Neither the Owner, Developer
nor the Managing Entity nor any of their respective officers,
directors or employees shall be personally liable to any Licensee
or to any other party, for any damage, loss or prejudice suffered
or claimed on account of any act, omission, error or negligence
of the Owner, Managing Entity, or Developer or any other
representative or employee of the Managing Entity, Owner, or the
Developer, provided that such person, firm or entity has, upon
the basis of such information as may be possessed by him at such
time, acted in good faith, without willful or intentional
misconduct.
7. Books and Records: To keep separate the books and
records for the Resort Facility.
8. Occupancy: To prohibit occupancy of a Unit in
accordance with applicable law.
9. Charthouse Rental Pool: To operate the Charthouse
rental pool and pay all costs of the rental pool.
ARTICLE IV
ASSESSMENTS FOR COMMON EXPENSES
A. Affirmative Covenant to Pay Expenses.
In order to (1) fulfill the covenants in the Plan; (2)
to preserve the Units and the Resort Facility for the recreation,
safety, welfare and benefit of the Licensees and their invitees,
guests, family members and lessees; and (3) to provide for
improvement, maintenance and preservation of the Units and the
Resort Facility and the services and amenities provided for
herein, there is hereby imposed upon the Licensees, the
affirmative covenant and obligation to pay the Common Expenses as
defined and more particularly set forth in this Plan. The
Managing Entity shall prepare and adopt an Annual Budget setting
forth the Common Expenses for the operation and management of the
Resort Facility.
The Managing Entity shall assess each Licensee in the
Resort Facility its share of the Common Expenses, which share
shall be assessed annually as an Annual Assessment, and the
Managing Entity shall collect said sums. The Assessment shall be
determined as follows: Each Licensee shall be responsible for a
proportionate share of the Common Expenses attributable to the
Unit Weeks which are licensed to the Licensee. It is understood
that the total Common Expenses shall be allocated to the
respective Classes of Interests as follows:
Total Total
Per Interest
Class A Interest -- 14.5716% .3736%
Class B Interest -- 11.4284% .4396%
Class C Interest -- 22.7142% .5824%
Class D Interest -- 31.2858% .8022%
Class E Interest -- 11.2858% .8681%
Class F Interest -- 8.7143% 1.2407%
Total 100%
Each Licensee shall be responsible for a uniform portion of the
Common Expenses allocated to the Class of Interest under such
License, with the numerator being the number of Assigned Unit
Weeks licensed to the Licensee and the denominator being the
total number of Unit Weeks included in that particular class.
For the period through and including December 31, 1997 the
Developer guarantees that the Annual Assessment per Unit Week
shall not exceed the amounts per Class of Interest as set forth
below:
Class A - $175.00
Class B - $175.00
Class C - $190.00
Class D - $270.00
Class E - $290.00
Class F - $350.00
Thereafter, such Annual Assessment shall not increase
annually by more than 10% per annum determined on a compounded
basis (except for the portion of the assessment relating to real
estate taxes and insurance) without the affirmative vote of a
majority in interest of the total Unit Weeks. For purposes of
the vote of Unit Week Holders, Decade Properties, Inc. will be
allowed to vote the Unit Week of unissued Interests or defaulted
Interests. An Advisory Committee as described in subsection C
below may be consulted for advice regarding certain management
decisions relevant to establishing the Annual Assessment. The
Licensee shall not have the right to use of a suite during such
Licensee's assigned Unit Weeks if the Licensee is not current in
the payment of Annual Assessments due by the Licensee as
determined by the Managing Entity. If the Licensee participates
in an Exchange Program, then prior to any transfer of a Unit Week
to which the Licensee is entitled, all assessments which will be
applicable for all periods prior to the Unit Week(s) to be
transferred shall be due and must be paid in full prior to any
transfer. Any transfer without such assessments being paid in
full shall be void and neither the Managing Entity nor the
Developer shall be bound to honor same.
B. Special Assessments. Notwithstanding the foregoing,
each Licensee shall be obligated to pay such Special Assessments
as shall be levied in addition to the Annual Assessments by the
Managing Entity for that year only, as a result of (a)
extraordinary items of expense; (b) nonrecurring capital
expenditures; (c) any sums expended by the Managing Entity for
the repair or replacement of a Unit or the Resort Facility
damaged by a Licensee, its family, guests or any person claiming
by, through or under the Licensee; (d) any sums expended by the
Managing Entity for the addition or alteration of a Unit or the
Resort Facility made by a Licensee in violation of the provisions
of the Plan and/or Rules and Regulations, or (e) such other
reason or basis determined by the Managing Entity in its sole
discretion. Notwithstanding the foregoing, special assessments
arising under subparagraphs (a), (b) and (e) above shall not be
made unless approved by an affirmative vote of a majority in
interest of the total number of Unit Weeks unless (a) such
assessment (other than a special assessment to restore or rebuild
because of damage or destruction to a Unit(s) or to the Resort
Facility) does not exceed 5% of the budgeted gross expenses for
the calendar year; or (b) such assessment is a special assessment
for the repair or rebuilding of a Unit(s) or the Resort Facility
which does not exceed 10% of the budgeted gross expenses for the
calendar year in which the assessment is levied. For purposes of
the vote of Unit Week Holders, the Company will be allowed to
vote the Unit Week of unissued Interests. The Managing Entity
may to the extent possible allocate Special Assessments to the
Licensee applicable when the special assessment is for the
purpose of reimbursing the Managing Entity for costs incurred in
bringing a Licensee or its License into compliance with the
provision of this Plan, the Rules and Regulations, or the
License. In addition special assessments may be levied against
individual Licensees for sums expended for repairs or
replacements relating to damage caused by such Licensee or its
family members, guests, lessees and any sums expended for
violations by a Licensee of the provisions of the Plan, Rules and
Regulations and the License.
C. Advisory Committee. At the Managing Entity's option,
the Managing Entity may appoint from time to time, an Advisory
Committee of Licensees, or officers, directors or principals of
Licensees, consisting of between five and nine members. Advice
may be sought by the Managing Entity from the Advisory Committee
as to the amount of Annual and/or Special Assessments and other
matters with respect to the operation of the Resort Facility as
determined by the Managing Entity. The advice sought from the
Advisory Committee is strictly advisory in nature and the
Managing Entity shall not be bound by advice from the Advisory
Committee.
D. Liability. Until the Licensee relinquishes his License
to the Developer, the record Licensee(s) of each License in the
Resort Facility shall be personally liable, jointly and severally
to the Managing Entity for the payment of the Annual Assessments
or any Special Assessment (hereinafter collectively referred to
as "Assessments") levied by the Managing Entity against the
Licensees and for all costs of collecting such Assessments,
including interest, delinquent assessments and attorneys' fees at
all trial and appellate levels. Until the Licensee relinquishes
his License to the Developer, the Assessments, together with
interest thereon, and the costs of collection, including
attorneys fees at all trial and appellate levels shall be a lien
upon such Licensee's License, but shall not encumber the
property, real or personal of any other person.
E. Cancellation Rights. If the event a Licensee has
cancellation rights under Chapter 721, F.S., in order to
calculate the benefit the amount shall be
Dollar Amount Benefit
Per Night
Interest A $ 65.00
Interest B $ 75.00
Interest C $ 85.00
Interest D $120.00
Interest E $130.00
Interest F $175.00
ARTICLE V
REMEDIES OF ENFORCEMENT
A. Intent of Operation of Plan. It is intended that this
Plan be operated in a manner so that if a Licensee fails to pay
the Assessments (Annual and Special) due by such Licensee
hereunder as they become due, that the Licensee shall be deprived
of use of such Licensee's Unit Weeks until any delinquencies are
paid in full.
B. Enforcement of Plan.
1. The covenants and restrictions herein contained
may be enforced by the Developer or the Managing Entity in any
judicial proceeding seeking any relief recognizable at law or in
equity, including damages, injunction, and other mandatory relief
against any person, persons, firm or entity violating or
attempting to violate any covenant or restriction. The failure
either by the Developer or the Managing Entity to enforce any
covenant or restriction herein contained shall in no event be
deemed a waiver of the right to do so thereafter. The prevailing
party in any such litigation shall be entitled to reasonable
attorneys' fees and court costs, including costs and fees at all
trial and appellate levels.
2. All rights, remedies or relief of whatsoever
nature or kind provided herein in favor of the Developer or the
Managing Entity shall be cumulative and non-exclusive and none
shall exclude, jointly or severally, any other right, remedy or
relief permitted by law or otherwise available to the Developer
or the Managing Entity.
3. In addition to any other remedies which Developer
or Managing Entity may have, in the event a Licensee shall be in
default of any of the provisions of the Plan, the License, or the
Rules and Regulations, the Developer and the Managing Entity may
levy a fine as determined from time to time by the Managing
Entity against such Licensee which shall continue until such
default shall be remedied by the defaulting Licensee.
C. Other Remedies in the Event of Non-payment of
Assessments.
1. In the event a Licensee shall fail to pay any
Assessment after the same becomes due, then during such period of
default, the Licensee will be denied possession of a Unit for
such Licensee's Assigned Unit Weeks. Such denial of use shall
also extend to those parties claiming under the Licensee
(including exchange programs). The Developer shall have the
right to the use or rent of the Unit Weeks for such periods that
the Licensee shall be deprived of use thereof and the Developer
shall be entitled to all income derived therefrom. Any income
received by the Developer, however, shall not reduce the amount
of Assessments owed by the Licensee.
2. Delinquent assessments shall bear interest at the
highest rate permitted by law. In addition, the Managing Entity
may, in its sole discretion, impose an administrative late fee in
an amount not to exceed $25.00 for each delinquent assessment.
3. In addition, in the event a Licensee shall fail to
pay any Assessment and such default continues for more than six
(6) months or there are more than three (3) defaults of any
duration, then the Developer may cancel the License of a
Licensee. Upon cancellation of the Licensee's interest, the
Interest shall belong to the Developer and the Licensee shall
forfeit all payments made previously.
4. If the Licensee remains in possession of the Unit
after his License has been canceled, the Licensee shall pay a
rental fee for the Unit equal to the daily rack rate which is
applicable to the suite in the Class of Interest purchased as
determined by the Managing Entity or the Developer from time to
time.
5. The remedies provided herein shall be non-
exclusive and cumulative and shall not exclude any other remedies
available to the Developer of this Plan, law, the License or
otherwise.
D. Failure of Licensee to Vacate.
In the event any Licensee of a License fails to vacate
a Unit at the expiration of his Assigned Unit Weeks or at such
earlier time as may be fixed by the Rules and Regulations adopted
by the Managing Entity from time to time, he shall be deemed a
"Holdover Licensee." It shall be the responsibility of the
Managing Entity to take such steps as may be necessary to remove
such Holdover Licensee from the Unit and to assist the Licensee
of a License entitled to occupy a subsequent Assigned Unit Week
who may be affected by the Holdover Licensee's failure to vacate,
to find alternative accommodations during such holdover period.
In addition to such other remedies as may be available
to it, the Managing Entity shall secure, at its expense,
alternate accommodations for any Licensee who may not occupy a
Unit during his Assigned Unit Week due to the failure to vacate
of any Holdover Licensee. Such accommodations shall be as near
in value to the Licensee's category of Interest as possible. The
Holdover Licensee shall be charged the rack rate applicable to
such suite for the period of the holdover, the cost of such
alternative accommodations for the Licensee who was not able to
use such Licensee's Unit Week because of the holdover, any other
costs incurred due to such Holdover Licensee's failure to timely
vacate and an administrative fee of Fifty ($50.00) Dollars per
day during his period of holding over. In the event it is
necessary that the Managing Entity contract for a period greater
than the actual period of holding over in order to secure
alternative accommodations as set forth above, the entire period
shall be the responsibility of the Holdover Licensee, although
the Fifty ($50.00) Dollars per day administrative fee shall cease
upon actual vacating by the Holdover Licensee.
The Managing Entity shall submit a bill to the Holdover
Licensee in accordance with this paragraph.
The foregoing provisions shall not abridge the Managing
Entity's right to take such other action as is provided by law or
equity.
ARTICLE VI
GUARANTEE OF ASSESSMENTS
The Developer may guarantee the Common Expenses as may be
permitted by law and, during any such period of guarantee, the
Developer shall not be required to pay any assessments levied
with respect to Unit Weeks owned by the Developer or the Owner,
provided, however, during such period of the Developer's
guarantee, Developer shall be obligated to pay for any amount
required to pay the Common Expenses not receivable from Licensees
of Licenses other than the Developer or the Owner.
ARTICLE VII
COMMON EXPENSES
The following expenses are declared to be Common Expenses
which the Licensees are obligated to pay as provided herein.
A. Maintenance Fees. All expenses for the repair and
upkeep of a Unit for normal wear and tear, repair and replacement
of furniture, fixtures, appliances, carpeting and utilities.
B. Utility Charges. All charges levied for utilities
providing services for any portion of the Resort Facility,
whether they are supplied by a private or public firm. It is
contemplated that this obligation will include all charges for
water, gas, sprinkler systems, sprinkler pumps, telephone, sewer,
sewage pumps, garbage removal, pest control, cable, elevators and
any other type of utility or any other type of service charge.
C. Liability Insurance. The premiums on the policy or
policies of insurance as described in Article IX of this Plan.
D. Fire, Windstorm and Other Casualty Insurance. The
premiums for insurance as described in Article X of this Plan.
E. Destruction of Buildings or Improvements. Any sums
necessary to repair or replace, construct or reconstruct damages
caused by the destruction of any portion of the Resort Facility
by fire, windstorm or other casualty in excess of the insurance
proceeds available with respect to said damage or destruction.
F. Repair, Replacement and Maintenance. All expenses
necessary to keep and maintain, repair and replace any portion of
the Resort Facility, including, but not limited to, personal
property, furniture, fixtures and equipment, in a manner
consistent with the development of the Resort Facility and in
accordance with the covenants and restrictions contained herein
and in conformity with all orders, ordinances, rulings and
regulations of any and all federal, state and city governments
having jurisdiction thereof, as well as the statutes and laws of
the State of Florida and the United States.
G. Operational Expenses. The costs of administration and
operation of the Resort Facility, including but not limited to
accounting costs, employee costs, front desk costs, management
fees, maid service, deficits from any prior period, costs
associated with operating the reservation system and rental pool,
and all other costs of operating the Vacation License Plan.
H. Maintenance Costs under the Non-exclusive Easement.
All costs for maintenance, replacement and repair of Common Areas
due by the Developer under the Non-exclusive Easement granting to
the Developer rights to use certain Common Areas of the Property.
I. Indemnification. Indemnification against any and all
claims, suits, actions, damages and/or causes of action arising
from any personal injury, loss of life, and/or damage to
property, sustained on the Resort Facility and from and against
all costs, counsel fees, expenses and liabilities incurred in
connection with any such claim, the investigation thereof or the
defense of any action or proceeding brought thereon and from and
against any orders, judgments and/or decrees which may be entered
thereon. Included in the foregoing provisions of indemnification
are any expense that the Developer may be compelled to incur in
bringing suit for the purpose of enforcing rights hereunder or
for the purpose of compelling the specific enforcement of the
provisions, conditions and covenants to be kept and performed by
the Licensees.
J. Reserve Funds. Amounts to establish adequate reserve
funds and/or sinking funds for replacement and/or capital
refurbishment and/or capital improvements of all or any portion
of the Resort Facility determined proper and sufficient by the
Managing Entity. Each Licensee acknowledges, understands and
consents that no Licensee shall have any interest, claim or right
to any such reserves.
K. Taxes. Any and all taxes levied or assessed at any and
all times by any and all taxing authorities, including all taxes,
charges, assessments and impositions and liens for public
improvements, special charges and assessments in water drainage
districts and in general, all taxes and tax liens which may be
assessed against the Resort Facility and against any and all
personal property and improvements which are now or which may
hereinafter be placed thereon, including any interest, penalties
or other charges which may be included thereon.
L. Miscellaneous Expenses. The cost of all items or
expenses pertaining to or for the benefit of the Resort Facility
and any improvements now or hereafter located thereon or any part
thereof and the operation of the Vacation License Plan not herein
specifically enumerated.
ARTICLE VIII
MANAGEMENT OF RESORT FACILITY
The Managing Entity has entered into a management agreement
with Decade Properties, Inc. to provide management services with
respect to the Resort Facility and the operation of the Vacation
License Plan. The Managing Entity may enter into such other
management agreements as the Managing Entity may determine in its
sole discretion (including agreements with the Developer or its
affiliate(s)), whereby it contracts for management services which
are required to discharge its duties under this Plan and for the
management, operation and maintenance of the Resort Facility and
the Vacation License Plan. All costs associated with such
management, exclusive of the 5% rental pool fee payable to the
rental agent, shall be assessed as a Common Expense against the
Licensees.
ARTICLE IX
LIABILITY INSURANCE
The Managing Entity shall obtain liability insurance with
such coverage and in such amounts as it may determine from time
to time for the purpose of providing liability insurance coverage
for the Resort Facility. Premiums for such insurance shall be
part of the Common Expenses. Such insurance shall also include
public liability, workmen's compensation and hired automobile
coverage.
ARTICLE X
CASUALTY INSURANCE AND DESTRUCTION OF IMPROVEMENTS
A. The Managing Entity shall obtain casualty insurance
with such coverage and in such amounts as it may determine from
time to time for the purpose of providing casualty insurance
coverage for the Resort Facility, including fire and extended
coverage insurance, vandalism and malicious mischief insurance,
all of which insurance shall insure all of the insurable
improvements on and within the Resort Facility, including
personal property owned by the Managing Entity, in a company
acceptable to the Managing Entity in an amount equal to the full
insurable replacement value as determined from time to time by
the Managing Entity. The premiums for such coverage and other
expenses in connection with such insurance shall be charged to
the Licensees as part of the Common Expenses. The company or
companies with which the Managing Entity shall place its
insurance coverage, as provided in this Plan, and the insurance
agent or agents placing such insurance must be authorized to do
business in the State of Florida. Such insurance shall name the
Owner and the Developer as insureds as their respective interests
may appear.
B. Where a loss or damage occurs to any part of the Resort
Facility it shall be obligatory upon the Managing Entity to
repair or restore the damage caused by said loss, subject to the
provisions below.
1. The Managing Entity shall promptly obtain reliable
and detailed estimates of the cost of repairing and
reconstruction of such damaged property for the purpose of
determining whether the available insurance proceeds are
sufficient to pay for the same.
2. If the insurance proceeds are sufficient to pay
for the estimated cost of restoration and repair, the Managing
Entity shall have the right and obligation to cause the damage to
be repaired and restored.
3. If the net proceeds of the insurance are
insufficient to pay for the estimated cost of restoration and
repair (or for the actual cost thereof, if the work has actually
been done), the Managing Entity shall promptly, upon
determination of the deficiency, determine the amount of the
Special Assessment which will be necessary to obtain the
necessary funds to repair and to restore such damaged
improvements. If the Special Assessment is 10% or less of the
budgeted gross expenses for the calendar year in which the
assessment is levied, then the Managing Entity shall levy such
Assessment against the Licensees and shall upon receipt of
adequate funds proceed to have the repairs and reconstruction
completed. Each Licensee shall be responsible for a
proportionate share of the Assessment attributable to the Unit
Weeks which are licensed to the Licensee in the same manner that
the Annual Assessment is allocated.
4. If the Special Assessment exceeds 10% of the
budgeted gross expenses for the calendar year in which the
assessment is levied, then the damage or destruction shall not be
repaired or reconstructed without the affirmative vote of a
majority in interest of the total number of Unit Weeks. If the
affirmative vote is obtained, then the Managing Entity shall levy
such Special Assessment against the Licensees and shall upon
receipt of adequate funds proceed to have the repairs and
reconstruction completed. If the affirmative vote is not
obtained, then in such event and only in such event, the damage
and destruction shall not be repaired and this Plan and all
Licenses shall terminate. The entire insurance proceeds shall be
allocated between the Owner and the holders of the Unit Weeks in
the Resort Facility with the holders of the right to use Unit
Weeks being entitled to that portion of the proceeds equal to a
ratio the numerator of which is the remaining number of years
from the date of the damage to December 31, 2050 and the
denominator is 54. The Owner shall be entitled to the balance of
the proceeds. The proceeds due to the holders of the right to
use Unit Weeks shall be allocated in the percentages and manner
in which Common Expenses are allocated, provided that if a
particular Licensee has not paid the entire purchase price and
all payments for the License, then such Licensee shall have the
option of (a) paying the balance due on such License, in which
event such Licensee shall receive the pro rata share of insurance
proceeds allocated to such Licensee's Unit Weeks as provided
above, or (b) not paying such balance due on the purchase price
of the License, in which event the insurance proceeds allocated
to such Licensee's Unit Weeks shall be paid to the Developer.
C. Notwithstanding any provision to the contrary, during
such time that the Resort Facility or the Unit(s) are
untenantable because of such damage or destruction, the Managing
Entity shall notify the holders of the affected Unit Weeks and
such holders shall not be permitted to use said Unit Weeks. Such
affected holders shall not be entitled to any compensation for
such loss of use, unless the Managing Entity is able to obtain
and does obtain loss of use insurance coverage, in which event
the affected holders shall only be entitled to the portion of
loss of use insurance proceeds applicable to the Unit Weeks in
which the Licensee was not able to occupy a suite because of such
damage or destruction.
ARTICLE XI
CONDEMNATION
The taking of the Resort Facility by condemnation shall
be deemed to be a casualty and the awards for that taking shall
be deemed to be proceeds from insurance on account of the
casualty. Whether the Resort Facility will be continued after
condemnation will be determined in the manner provided for
determining whether damaged property will be reconstructed and
repaired after casualty. For this purpose, the taking by
condemnation shall be deemed to be a casualty. If the Resort
Facility is terminated after condemnation, the proceeds of the
award shall be divided into two (2) portions, one relating to the
respective value of the Units Weeks until December 31, 2050 and
the other portion to the Owner for the value of the Owner's
remainder interest. Such two portions shall be calculated in the
same manner as provided with respect to the allocation and
payment of proceeds in connection with a casualty. The portion
due to the holders of Unit Weeks shall be allocated in the same
manner as provided with respect to a casualty, including the
provisions relating to the requirement that the purchase price
and all License fees be paid in full before a Licensee is
entitled to receive any part of the award. In the event of
taking of any common area of the Resort Facility (not including a
Unit), the Licensees shall have no right to any part of the
award, and the Owner shall be entitled to the entire award.
ARTICLE XII
GRANT OF EASEMENTS AND RESERVATION OF EASEMENTS AND RIGHTS
A. Perpetual Non-Exclusive Easement to Common Areas and
Public Ways.
The driveways, walks and other rights-of-way in the
Resort Facility shall be available for ingress and egress on a
non-exclusive basis from the common areas and publicly dedicated
ways for the Owner, Developer, the Managing Entity, the Licensees
and all of their family members, guests, licensees, lessees and
invitees and all other parties entitled to use any part of the
Property or the Marina during the term of this Plan.
B. Non-exclusive Easement.
The Owner has granted to the Developer a Non-exclusive
Easement for the use and enjoyment of those areas designated as
Common Areas in such Non-exclusive Easement Agreement. The
Licensees shall have the right to use such Common Areas during
their Unit Weeks in accordance with this Plan. The expenses for
the maintenance, replacement and repair of such Common Areas
shall be Common Expenses under this Plan.
ARTICLE XIII
RULES AND REGULATIONS
The use of the Resort Facility shall be subject to such
Rules and Regulations as established and promulgated by the
Managing Entity from time to time. All Licensees shall ensure
compliance during their Unit Weeks.
ARTICLE XIV
AMENDMENTS TO THE PLAN
This Plan may be amended only by the vote of the holders of
a majority in the interest of the total number of Unit Weeks,
including those held by the Developer or Decade Properties, Inc.,
with the consent of the Developer.
ARTICLE XV
TERMINATION
A. Notwithstanding any provision to the contrary, in the
event that less than 76 Interests are sold by the Developer by
December 31, 1997, the Developer has the right to reacquire the
Interests sold by refunding to the Licensees the purchase price
paid by the Licensee less any and all income earned by such
Licensee in connection with the ownership of the Interest or
rentals earned for the assigned Unit Weeks. The Licensees shall
not be entitled to a refund of any Maintenance Fees paid. Upon
such reacquisition, this Plan and the License Agreements shall be
null and void.
B. In the event of the termination of this Plan, the
Resort Facility shall be deemed removed from the provisions of
the Act and all Licenses will be deemed canceled with all
Licensees relinquishing any and all rights under the Plan.
ARTICLE XVI
PARTITION
No Licensee or any other person or entity acquiring any
right, title or interest in a License shall be entitled to seek
or obtain through any legal procedures, judicial partition of the
Resort Facility or sale of the Resort Facility in lieu of
partition. It is understood that the License interest does not
constitute real estate.
ARTICLE XVII
OWNER'S REMAINDER INTEREST
By acceptance of a License subject to this Plan, each
Licensee acknowledges the Owner's remainder interest (the
"Remainder Interest") in that the License to each Licensee
consists of a license which terminates on December 31, 2050 or
such earlier date as provided herein.
The Remainder interest is transferable by the Owner in its
sole and absolute discretion. The holder of the Remainder
interest shall have the following rights under the Declaration:
1. To enforce all provisions of the Declaration against
Licensees, the Managing Entity and the Developer, including, but
not limited to, through an action for specific performance.
2. To be named as an additional insured under all
insurance policies as its interest may appear.
3. To be entitled to share in any award under a
condemnation proceeding as its interest may exist.
4. The consent of the holder of the Remainder Interest
shall be required for any termination of the Plan, any amendment
that adversely affects its interest and any amendment of this
Article.
In any litigation brought by the holder of the Remainder
interest, the holder of the Remainder Interest shall be entitled
to recover its costs and attorneys' fees in the event it is the
successful party, including such costs and fees on appeal.
Notwithstanding the existence of the Remainder Interest, the
Licensees shall be responsible for all Common Expenses and taxes
for the Resort Facility without any right of contribution against
the holder of the Remainder Interest.
ARTICLE XVIII
TRANSFER OF LICENSE AND UNIT WEEKS
Provided that a Licensee is not in default of any provision
of this Vacation License Plan or the License, such Licensee shall
be permitted to sell, transfer or convey such Licensee's entire
Interest and the License without the consent of the Developer or
the Managing Entity, provided (a) that the entire purchase price
and License Fee has been paid in full, (b) all Assessments are
current, (c) the transferee executes such assumption documents
required by the Seller, (d) the transfer, sale, or conveyance
complies with the federal and state securities laws.
After such permitted transfer, sale or conveyance, the
transferring Licensee shall have no further liability for Common
Expenses under this Plan. Provided that a Licensee is not in
default of any provision of this Vacation Plan or the License,
such Licensee may also sell, transfer, or convey partial
Interests (a right to a certain Unit Week) but only with the
prior written consent of the Managing Entity. The Managing
Entity shall be permitted to impose such conditions as the
Managing Entity determines necessary in its sole discretion in
connection with transfers of partial Interests. With respect to
any permitted transfer, prior to such transfer, the name, address
and such other information as requested by the Managing Entity
shall be delivered to the Managing Entity.
ARTICLE XIX
SEVERABILITY
Invalidation of any one of these covenants or restrictions
or any of the terms and conditions herein contained shall in no
way affect any other provision which shall remain in full force
and effect for such period of time as may be permitted by law.
IN WITNESS WHEREOF, this Plan has been executed by
Developer, this _________ day of ____________________, 1996.
Signed, Sealed and Delivered
In the Presence of: CHARTHOUSE SUITES VACATION
OWNERSHIP, INC.
________________________________ BY: __________________________
Print Name: _________________ Print Name: __________________
________________________________
Print Name: ____________________
ACKNOWLEDGMENT
STATE OF ________________)
) SS.
COUNTY OF _______________)
The foregoing instrument was acknowledged before me this
____ day of ___________________________, 1996, by
______________________________, as ________________________, of
CHARTHOUSE SUITES VACATION OWNERSHIP, INC., on behalf of the
corporation. He/she is personally known to be or has produced
_____________________________________ as a type of identification
and who did/did not take an oath.
________________________________
Print Name: ____________________
Notary Public, State of ________
Serial Number, if any: _________
My commission expires: _________
<PAGE>
ANNEX B
RULES AND REGULATIONS FOR CHARTHOUSE SUITES HOTEL SUITES
RULES AND REGULATIONS
FOR
CHARTHOUSE SUITES HOTEL
1. Unless the context clearly indicates otherwise, the term
"Holder," as used in these rules and regulations, shall be
deemed to include not only the purchaser of the Charthouse
Suites Vacation Investment and Ownership Interest, as
defined in the Charthouse Suites Vacation License Plan, but
also each purchaser's family, servants, employees, agents,
renters, lessees, visitors, exchange guests, and licensees.
All capitalized terms used in these rules and regulations
shall have the meanings set forth herein or in the
Charthouse Suites Vacation License Plan.
2. No part of the Charthouse Suites hotel shall be used for any
purpose except hotel, vacation ownership, vacation support
areas, sales and marketing of the Interests, and the common
recreational purposes for which the hotel was designed.
Each hotel room and suite (hereafter collectively a "Suite")
shall be used as accommodations for Holders. The maximum
occupancy for each Suite shall be as follows:
Suite Type Maximum Occupancy
Studio 4
One Bedroom 6
Penthouse 8
3. There shall be no obstruction of the Charthouse Suites hotel
operations by an Holder, nor shall anything be stored in the
Charthouse or affiliated area without the prior written
consent of Charthouse Suites Vacation Ownership, Inc. or the
property manager, except as herein provided.
4. Nothing shall be done or kept in any Suite or in any other
part of the Charthouse hotel which will increase the rate of
insurance on the Charthouse without the prior written
consent of Charthouse Suites Vacation Ownership, Inc. No
Holder shall permit anything to be done or kept in a Suite
or in any other part of the Charthouse which will result in
the cancellation of insurance on any of the foregoing or
which would be in violation of any law.
5. No waste shall be committed of the Charthouse Suites hotel
or affiliated areas. Except with respect to the common
areas permitted by the Charthouse Suites Vacation License
Plan, Holders shall not cause or permit anything to be done
or displayed on the outside of windows or placed on the
outside walls or doors of the Building, and no sign
(including, but not limited to, "for sale" or "for lease"
signs), awning, canopy, shutter, or radio or television
antenna (except for a master antenna system) shall be
affixed or placed upon the exterior walls or doors, roofs or
any part thereof or exposed on or at any window of a Suite,
or in or on any car, truck, recreational vehicle or other
wheeled conveyance located on the Charthouse or any other
related property.
6. Except as otherwise permitted by the Vacation License Plan
(including, but not limited to, guide dogs for the unsighted
or for similar purposes), no animals, livestock or poultry
of any kind shall be permitted or kept in the Charthouse at
any time. Any Holder who violates this rule shall be
assessed a fine of $200 per animal, livestock or poultry for
each day in which the violation exists.
7. No obnoxious or offensive activity shall be carried on in a
Suite or in any other part of the Charthouse, nor shall
anything be done therein, either willfully or negligently,
which may be or become an annoyance or nuisance to any other
Holders. No Holder shall make or permit any disturbing
noises in the Charthouse hotel, nor do or permit anything to
be done that will interfere with the rights, comfort or
convenience of other Holders. No Holder shall play any
musical instrument in the Charthouse hotel, nor give, nor
permit it to be given, vocal or instrumental instruction at
any time; provided, however, Charthouse Suites Vacation
Ownership, Inc. or manager is authorized to permit the
playing of musical instruments in lobbies and other such
areas and facilities as deemed advisable.
8. Except as authorized by the Vacation License Plan, nothing
shall be altered or constructed in or removed from the
Charthouse hotel.
9. Nothing shall be done in any Suite or in any other part of
the Charthouse hotel which will impair the structural
integrity of the Charthouse hotel or which would
structurally change the Charthouse hotel.
10. No clothes, sheets, towels, blankets, laundry or any other
articles shall be hung out of a Suite or be exposed on any
other part of the Charthouse hotel. The Charthouse hotel
shall be kept free and clear of rubbish, debris and other
unsightly materials.
11. No obstructing personal property shall be placed in the
halls or on the staircase landings, nor shall anything be
hung from the windows, terraces, balconies, patios or placed
upon the window sills, nor shall any rugs or mops be shaken
or hung on any of the windows, door, balconies, patios or
terraces. No clothes, sheets, blankets, laundry or any
other kind of articles shall be hung out of a Suite or
exposed to, any other part of the Charthouse. No personal
property shall be permitted on the balconies, terraces or
patios, except that Charthouse Suites Vacation Ownership,
Inc. may place and maintain patio furniture of a uniform
type on balconies, terraces or patios. No Holder may
utilize a grill on the balcony, terrace or patio, as the
case may be.
12. No window, terrace, balcony or patio shall be enclosed or
covered by any awning or otherwise enclosed, except as
permitted by Charthouse Suites Vacation Ownership, Inc. or
manager.
13. No industry, business, trade, occupation or profession of
any kind, commercial, educational or otherwise, designed for
profit or otherwise, shall be conducted, maintained or
permitted on any part of the Charthouse, other than rental
of Suites, use of the Suite as sales offices and for other
business purposes permitted by the Vacation License Plan,
including, but not limited to, those business purposes
related to the common areas.
14. No public hall of the Charthouse shall be decorated or
furnished by any Holder in any matter, except as permitted
by Charthouse Suites Vacation Ownership, Inc. or manager.
15. Subject to the provisions of the Vacation License Plan, each
Holder shall keep any Suite he or she occupies in a good
state of preservation and cleanliness and shall not sweep or
throw or permit to be swept or thrown therefrom, or from the
doors, windows, terraces or balconies thereof, any dirt or
other substance.
16. All radio, television or other electrical equipment of any
kind or nature located in a Suite shall be utilized in
compliance with all rules, regulations, requirements and
recommendations of Charthouse Suites Vacation Ownership,
Inc. and the public authorities having jurisdiction over
Charthouse, and the Holder alone shall be liable for any
damage or injury caused by any electrical equipment
improperly utilized by them in such Suite.
17. The agents of Charthouse Suites Vacation Ownership, Inc. and
any contractor or workman authorized by Charthouse Suites
Vacation Ownership, Inc. or manager may enter any Suite in
Charthouse at any reasonable hour of the day after
notification (except that in case of emergency no
notification shall be required) for the purpose of
inspecting such Suite for the presence of any vermin, insect
or other pests, and for the purpose of taking such measures
as may be necessary to control or exterminate any such
vermin, insects or other pests.
18. Any consent or approval given under these rules and
regulations may be added to, amended or repealed at any time
by resolution of Charthouse Suites Vacation Ownership, Inc.
19. The parking areas shall be used only for parking of
automobiles, motorcycles and other authorized vehicles. No
Holder may park or store boats, trailers, recreational
vehicles or related or similar vehicles at the Charthouse,
except in areas which are specifically designated for such
uses, if any. There is no assurance that parking for such
vehicles will be available. No Holder shall park any
vehicle except in areas authorized for such parking and
Holders shall obey all parking regulations applicable to the
Charthouse. Vehicles improperly parked may be towed at the
Holder's sole cost and expense. No repair, lubrication or
other maintenance of any kind shall take place in the
parking areas and any automobile or motorcycle parked
therein shall at all times be in running order.
20. No Holder shall at any time bring into or keep in their
Suite any flammable, combustible or explosive fluid,
material, chemical or substance.
21. Charthouse Suites Vacation Ownership, Inc. or manager of the
Charthouse shall retain a pass key to each Suite. No Holder
shall alter any lock or install a new lock on any door of a
Suite. All Suites shall be on a master key system to be
administered by Charthouse Suites Vacation Ownership, Inc.
or manager of the Charthouse.
22. The Charthouse may include certain common facilities, such
as a pool. Any use of such facilities shall be subject to
and consistent with all rules and regulations for the use of
such facilities which are promulgated by Charthouse Suites
Vacation Ownership, Inc., which rules and regulations may be
amended or modified from time to time without notice. All
Holders shall be required to abide by said rules and
regulations, and by any rules and regulations for common and
recreational facilities associated with the Charthouse.
Holders shall only have access to the Charthouse during
their confirmed Occupancy Period(s).
23. All window coverings installed as part of the Suites must be
maintained in said windows at all times. All window
coverings shall be determined, installed and maintained by
Charthouse Suites Vacation Ownership, Inc. or manager.
24. Holders shall comply with and conform to all applicable laws
and regulations of the United States and the State of
Florida and with all ordinances, rules and regulations of
Pinellas County, and shall hold Charthouse Suites Vacation
Ownership, Inc., manager and their respective officers and
agents harmless from all fines, penalties, costs or
prosecutions for the violation thereof or noncompliance
therewith.
25. Unless otherwise designated by Charthouse Suites Vacation
Ownership, Inc., the parking spaces will not be assigned,
but are to be used on a first-come first-served basis.
Holders shall be responsible for informing guests of all
parking rules and regulations. No vehicle shall be parked
in such a manner as to impede or prevent ready access to
another parking space, nor shall any vehicle be parked in a
driveway or fire lane. Any Holder who is not residing at a
Suite shall not be entitled to use the parking areas.
26. No Holder shall send any employee of Charthouse Suites
Vacation Ownership, Inc. or manager on any private business
of any Holder.
27. Any complaint regarding the management of the Charthouse
hotel or the actions of any other Holder shall be made in
writing to Charthouse Suites Vacation Ownership, Inc.
28. Bicycles, buggies and wagons shall be stored and parked in
the designated storage areas, and shall not be placed on
balconies or patios, in hallways or other areas of the
Charthouse hotel.
29. All Holders shall abide by the Charthouse Suites Vacation
License Plan, the Bylaws, and these rules and regulations,
as applicable.
30. Skateboards, rollerblades and rollerskates are strictly
prohibited anywhere in the Charthouse hotel.
<PAGE>
ANNEX C
TIME SHARE PUBLIC OFFERING STATEMENT
PUBLIC OFFERING STATEMENT
FOR
CHARTHOUSE SUITES INVESTMENT AND OWNERSHIP INTERESTS
THIS PUBLIC OFFERING STATEMENT CONTAINS IMPORTANT MATTERS TO BE
CONSIDERED IN ACQUIRING A CHARTHOUSE SUITES VACATION INVESTMENT
AND OWNERSHIP INTEREST. THE STATEMENTS CONTAINED HEREIN ARE ONLY
SUMMARY IN NATURE. A PROSPECTIVE PURCHASER SHOULD REFER TO ALL
REFERENCES, EXHIBITS HERETO, CONTRACT DOCUMENTS AND SALES
MATERIALS. YOU SHOULD NOT RELY UPON ORAL REPRESENTATIONS AS
BEING CORRECT. REFER TO THIS DOCUMENT AND ACCOMPANYING EXHIBITS
FOR CORRECT REPRESENTATIONS. THE SELLER IS PROHIBITED FROM
MAKING ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THE
CHARTHOUSE SUITES VACATION LICENSE PLAN, THIS PUBLIC OFFERING
STATEMENT OR THE PROSPECTUS FOR THE CHARTHOUSE SUITES INVESTMENT
AND OWNERSHIP INTERESTS.
<PAGE>
INDEX TO PUBLIC OFFERING STATEMENT
TEXT AND EXHIBITS
TAB # PUBLIC OFFERING STATEMENT
0 Public Offering Statement Text
1 Master License Agreement or Membership
Agreement or Recreational Lease
2 Receipt for Time Share Documents
A1 Declaration of Condominium
A2 Cooperative Documents
A3 Declaration of Covenants and Restrictions
A4 Association Articles of Incorporation
A5 Association By-Laws
A6 Underlying Lease
A7 Management Agreement and Related Contracts
A8 Estimated Operating Budget for Plan and
Schedule of Required Purchasers' Expenses
A9 Floor and Plot Plans
A10 Leases of Facilities to be Used Only by
Purchasers
A11 Leases of Facilities to be Used by Purchasers
and Others
A12 Form of Time Share Period Lease for Leasehold
Offer
A13 Declaration of Servitude of Properties
A14 Statement of Condition
A15 Statement of Inspection
A16 Purchase Contract
A17 Executed Agreement for Escrow Payments
A18 Summary of Restrictions on Use of
Accommodations and Facilities
A19 Other Documents Creating the Time Share Plan
A20 Other Contracts or Leases Signed by Purchasers
A21 Nondisturbance and Notice to Creditors
A22 Notice of Election to be Deemed a Member Resort
A23 Form of Vacation License
<PAGE>
EXHIBIT "O"
CHARTHOUSE SUITES INVESTMENT AND OWNERSHIP INTERESTS
PUBLIC OFFERING STATEMENT TEXT
<PAGE>
INDEX TO PUBLIC OFFERING STATEMENT TEXT
I. PUBLIC OFFERING STATEMENT DEFINITIONS AND
ABBREVIATIONS . . . . . . . . . . . . . . . . . . . . . . 1
II. REQUIRED DISCLOSURES. . . . . . . . . . . . . . . . . . . 4
III. PUBLIC OFFERING STATEMENT TEXT. . . . . . . . . . . . . . 5
A. THE TIME SHARE PLAN . . . . . . . . . . . . . . . . 6
1. The Plan . . . . . . . . . . . . . . . . . . . 6
a. Resort Facility. . . . . . . . . . . . . . 6
b. Common Amenities . . . . . . . . . . . . . 6
2. Common Expenses and Elements of the Plan . . . 9
B. CLUB MEMBERSHIP OR RECREATIONAL LEASE, AS
APPLICABLE. . . . . . . . . . . . . . . . . . . . . 11
C. TERM OF PLAN. . . . . . . . . . . . . . . . . . . . 11
D. RESPONSIBLE ENTITIES. . . . . . . . . . . . . . . . 11
1. The Entities . . . . . . . . . . . . . . . . . 11
2. Judgments and Pending Lawsuits . . . . . . . . 13
E. RESORT/COMPONENT SITE . . . . . . . . . . . . . . . 13
1. The Resort Accommodations and Facilities . . . 13
a. Restrictions on Use. . . . . . . . . . . . 15
(1) Occupancy and Use Restrictions. . . . 15
b. Private Use. . . . . . . . . . . . . . . . 18
c. Rules and Regulations. . . . . . . . . . . 18
2. Phasing. . . . . . . . . . . . . . . . . . . . 18
3. Recreational Facilities. . . . . . . . . . . . 18
4. Financial Arrangements for Promised
Improvements . . . . . . . . . . . . . . . . . 19
5. Utilities. . . . . . . . . . . . . . . . . . . 20
6. Insurance. . . . . . . . . . . . . . . . . . . 20
7. Leasing of Units/Sale of Whole Units . . . . . 22
8. Disclosures Regarding Real Property. . . . . . 22
9. Description of Developer Financing . . . . . . 22
10. Control of Association . . . . . . . . . . . . 22
F. BUDGETS, DUES AND FEES. . . . . . . . . . . . . . . 23
1. Estimated Operating Budgets. . . . . . . . . . 23
G. PURCHASE OF AN OWNERSHIP INTEREST . . . . . . . . . 24
1. Licensee's Right of Cancellation . . . . . . . 24
2. Total Financial Obligation of the Licensee . . 24
3. Status of Title Underlying Each
Resort/Component Site. . . . . . . . . . . . . 25
4. Restrictions Upon Rental or Resale . . . . . . 25
5. Special Risk Factors . . . . . . . . . . . . . 26
H. EXCHANGE PROGRAM OPPORTUNITIES. . . . . . . . . . . 26
I. SERVICE, MAINTENANCE OR RECREATIONAL CONTRACTS
OR LEASES THAT MAY BE CANCELED BY LICENSEES . . . . 27
J. NAME OF THE PERSON WHO WILL OR MAY HAVE THE
RIGHT TO ALTER, AMEND OR ADD TO THE CHARGES
WHICH THE LICENSEE MAY BE SUBJECT AND THE TERMS
AND CONDITIONS UNDER WHICH SUCH ALTERATIONS,
AMENDMENTS OR ADDITIONS MAY BE IMPOSED. . . . . . . 28
K. PROVISIONS FOR ALTERATIONS OF UNITS BY
DEVELOPER . . . . . . . . . . . . . . . . . . . . . 28
L. AMENDMENTS TO THE TIME SHARING PLAN . . . . . . . . 28
M. LIEN ON TIME SHARE LICENSES TO SECURE
ASSESSMENTS . . . . . . . . . . . . . . . . . . . . 29
N. AD VALOREM TAXES. . . . . . . . . . . . . . . . . . 29
O. GUARANTEED RENTAL ARRANGEMENT . . . . . . . . . . . 29
P. TAX CONSIDERATIONS. . . . . . . . . . . . . . . . . 31
<PAGE>
I. PUBLIC OFFERING STATEMENT DEFINITIONS AND ABBREVIATIONS
A. "Act" means Chapter 721, Florida Statutes, as amended
prior to the recordation of these covenants, conditions and
restrictions.
B. "Annual Assessment" means the share of funds required
for the payment of Common Expenses which is assessed annually
against a Licensee by Charthouse Suites Vacation Ownership, Inc.
C. "Articles" means the Articles of Incorporation of
Charthouse Suites Vacation Ownership, Inc.
D. "Assigned Unit" means the Unit of a certain category of
hotel suite assigned to a Licensee by Developer at the time of
conveyance of a Time Share License which such Licensee shall
occupy during the Licensee's "Assigned Unit Week" (as hereinafter
defined).
E. "Assigned Unit Week" means the Unit Week assigned to a
Licensee by the Developer at the time of conveyance of a Time
Share License.
F. "Board" means the Board of Directors of Charthouse
Suites Vacation Ownership, Inc.
G. "By-Laws" means the By-Laws of Charthouse Suites
Vacation Ownership, Inc.
H. "Common Amenities" means those areas not included as
part of the Resort Facility which are to be used by Licensees of
the Resort Facility and other hotel guests. The Common Amenities
shall consist of a swimming pool, administrative office and
laundry facilities. The Common Amenities may be expanded from
time to time in the sole discretion of the Developer in the
manner provided for in the Plan. Licensees of the Resort
Facility shall not acquire any direct ownership in the Common
Amenities, however, the Common Amenities initially provided for
by the Developer, as described herein, shall be leased by
Charthouse Suites Vacation Ownership, Inc. pursuant to the
provisions set forth in the Master License Agreement and
available for reasonable use by Licensees.
I. "Common Areas" means those portions of the Resort
Facility which are not included in the Units and specifically
excludes any portion of the Common Amenities.
J. "Common Expenses" means costs incurred in the operation
of the Resort Facility, the Common Amenities, and Common Areas
and includes:
1. Costs relating to or incurred in the operation,
maintenance, repair or replacement of the Units, the Common
Areas, the Common Amenities, including, but not limited to,
real estate taxes, costs of carrying out the powers and
duties of Charthouse Suites Vacation Ownership, Inc., costs
of fire and extended coverage insurance; and
2. Any other expenses designated as "Common Expenses"
in accordance with applicable law by Charthouse Suites
Vacation Ownership, Inc. in its sole discretion or as set
forth in the Vacation License Plan.
K. "Developer" means Charthouse Suites Vacation Ownership
Inc., a Florida corporation, its grantees, successors and
assigns. A "Licensee" (as hereinafter defined) shall not solely
by reason of the purchase of a "Time Share License" (as
hereinafter defined) by deemed a grantee, successor or assign of
Developer's rights or obligations under the Plan unless such
Licensee acquires the interests for purposes of resale or is
specifically so designated as a successor or assign of
Developer's rights or obligations in the respective instrument of
conveyance or other instruments executed by Developer. Nothing
herein shall be deemed to contradict the definition of Developer
in the Time Share Act with regard to the sale of time share
licenses.
L. "Division" as used herein shall be deemed to mean and
refer to the Division of Florida Land Sales, Condominiums and
Mobile Homes, Department of Business and Professional Regulation.
M. "License" means a right to occupy a time share unit,
terminating on December 31, 2050, which right is neither coupled
with a freehold interest nor coupled with an estate for years
with a future interest in a time share property, as described in
the Plan.
N. "Licensee" means a person to whom the Developer has
conveyed of record a Time Share License, his heirs, successors
and assigns.
O. "Managing Entity" means the person who operates or
maintains the Plan pursuant to Section 721.13(1), F.S.
P. "Plan" or "Vacation License Plan" or "Time Sharing
Plan" means the Charthouse Suites Vacation License Plan, as
amended from time to time.
Q. "Preferred Lender" means a bank, a federal or state
savings and loan association, an insurance company, a security
agreement company, a real estate investment or business trust, a
pension fund, an agency of the United States government, any
other lender generally recognized as an institutional type lender
owning and holding a security agreement encumbering a Time Share
License and includes Developer or its assigns with respect to
security agreements which it holds encumbering a Time Share
License including liens for Annual Assessments.
R. "Resort Facility" means the property described on
Exhibit "A" attached to the Vacation License Plan, and all
improvements thereon (including the Units and the Common Areas
and all furniture, furnishings and fixtures therein) and all
easements and rights appurtenant thereto intended for use in
connection therewith, but shall not include the attached marina
which shall remain the sole and exclusive property of Decade
Properties, Inc., or its grantees, successors, and assigns.
S. "Rules and Regulations" means the Rules and Regulations
of Charthouse Suites Vacation Ownership, Inc.
T. "Service Period" means that period of time designated
by Charthouse Suites Vacation Ownership, Inc. in its sole
discretion, commencing at the end of each Unit Week and ending at
the beginning of the next Unit Week or as necessary to be used by
Charthouse Suites Vacation Ownership, Inc. to clean, service and
maintain a Unit and the Common Areas. The Service Period shall
initially run for six (6) hours from 10:00 a.m. until 4:00 p.m.
however it may be changed by Charthouse Suites Vacation
Ownership, Inc. in its sole discretion provided however that the
Service Period shall not be less than three (3) hours nor more
than seven (7) hours, unless needed for an emergency.
U. "Special Assessment" means a share of funds required
for the payment of Common Expenses which from time to time is
assessed against a Licensee in addition to the Annual Assessment.
V. "Time Share License" or "License" means the ownership
of a time share license which is an estate for years,
terminating on December 31, 2050.
W. "Unit" means a part of the Resort Facility which is
subject to exclusive possession of a licensee.
X. "Unit Week" means a period of use of a Unit which shall
consist of not less than seven (7) days. Unit Weeks are computed
as follows:
Unit Week No. 1 is the Seven (7) Days commencing on the
first Friday, Saturday or Sunday in each year.
Unit Week No. 2 is the Seven (7) Days succeeding.
Additional Unit Weeks, up to and including Unit Week
No. 51, are computed in a like manner.
Unit Week No. 52 contains the Seven (7) Days succeeding
the end of Unit Week No. 51, without regard to the
month or year. Unit Weeks run from 12:00 p.m. on the
first Sunday of the Unit Week to 12:00 p.m. on the last
Saturday of the Unit Week, subject to the service
period as defined in Article I (V) hereof. Any excess
days not otherwise assigned shall remain the property
of the Developer.
II. REQUIRED DISCLOSURES
A. THERE IS A LIEN OR LIEN RIGHT AGAINST EACH CHARTHOUSE
SUITES VACATION INVESTMENT AND OWNERSHIP INTEREST TO SECURE THE
PAYMENT OF ASSESSMENTS OR OTHER EXACTIONS COMING DUE FOR THE USE,
MAINTENANCE, UPKEEP OR REPAIR OF THE RECREATIONAL OR COMMONLY
USED FACILITIES. A LICENSEE'S FAILURE TO MAKE THESE PAYMENTS MAY
RESULT IN CANCELLATION OF THE LICENSE AND THE RIGHT TO USE THE
UNIT.
For a more complete description, please refer to
Article V of the Vacation License Plan attached as Exhibit "A19"
to the Public Offering Statement.
B. THE DEVELOPER HAS THE RIGHT TO RETAIN CONTROL OF
CHARTHOUSE SUITES VACATION OWNERSHIP, INC. EVEN AFTER A MAJORITY
OF THE LICENSES HAVE BEEN SOLD.
For a more complete description of the Developer's
right of control, please refer to Article III of the Vacation
License Plan attached as Exhibit "A19" to the Public Offering
Statement.
C. THE PURCHASE OF A TIME SHARE PERIOD SHOULD BE BASED
UPON ITS VALUE AS A VACATION EXPERIENCE OR FOR SPENDING LEISURE
TIME, AND NOT CONSIDERED FOR PURPOSES OF ACQUIRING AN
APPRECIATING INVESTMENT OR WITH AN EXPECTATION THAT THE TIME
SHARE PERIOD MAY BE RESOLD UNLESS YOU ARE PURCHASING IT AS A
SECURITY.
D. YOU MAY CANCEL THE PURCHASE AGREEMENT WITHOUT ANY
PENALTY OR OBLIGATION WITHIN TEN (10) DAYS FROM THE DATE YOU SIGN
THE CONTRACT, AND UNTIL TEN (10) DAYS AFTER YOU RECEIVE THIS
PUBLIC OFFERING STATEMENT, WHICHEVER IS LATER.
E. IF YOU DECIDE TO CANCEL THE CONTRACT IN THE ALLOWED
CANCELLATION PERIOD, YOU MUST NOTIFY THE DEVELOPER IN WRITING OF
YOUR INTENT TO CANCEL. YOUR NOTICE OF CANCELLATION SHALL BE
EFFECTIVE UPON THE DATE SENT AND SHALL BE SENT TO CHARTHOUSE
SUITES VACATION OWNERSHIP INC., 250 PATRICK BLVD., BROOKFIELD, WI
53045. ANY ATTEMPT TO OBTAIN A WAIVER OF YOUR CANCELLATION
RIGHTS IS UNLAWFUL. WHILE YOU MAY EXECUTE ALL CLOSING DOCUMENTS
IN ADVANCE, THE CLOSING, BEFORE EXPIRATION OF YOUR TEN (10) DAY
CANCELLATION PERIOD, IS PROHIBITED.
F. PURSUANT TO THE ACT, YOU MAY ALSO CANCEL THE CONTRACT
AT ANY TIME AFTER THE ACCOMMODATIONS OR FACILITIES ARE NO LONGER
AVAILABLE AS PROVIDED IN THE PLAN AND THE PUBLIC OFFERING
STATEMENT.
G. THE ACT INCLUDES A RIGHT TO CANCEL IF THE
ACCOMMODATIONS OR FACILITIES ARE NO LONGER AVAILABLE. THE PLAN
CONTEMPLATES THAT UNITS MAY NOT BE AVAILABLE FROM TIME TO TIME IN
ORDER TO MAINTAIN, REPAIR OR UPDATE THE UNITS. IN SUCH EVENT,
AND ON AN INTERIM BASIS TO TIME CHARTHOUSE SUITES VACATION
OWNERSHIP, INC. WILL OBTAIN AT ITS OWN EXPENSE EQUIVALENT
ACCOMMODATIONS FOR A PURCHASER.
H. ANY RESALE OF THIS TIME SHARE LICENSE MUST BE
ACCOMPANIED BY CERTAIN DISCLOSURES IN ACCORDANCE WITH SECTION
721.065, FLORIDA STATUTES.
I. THIS PUBLIC OFFERING STATEMENT CONTAINS IMPORTANT
MATTERS TO BE CONSIDERED IN ACQUIRING A CHARTHOUSE SUITES
VACATION INVESTMENT AND OWNERSHIP INTEREST. THE STATEMENTS
CONTAINED HEREIN ARE ONLY SUMMARY IN NATURE. A PROSPECTIVE
PURCHASER SHOULD REFER TO ALL REFERENCES, EXHIBITS HERETO, THE
PLAN AND SALES MATERIALS. YOU SHOULD NOT RELY UPON ORAL
REPRESENTATIONS AS BEING CORRECT. REFER TO THIS DOCUMENT AND
ACCOMPANYING EXHIBITS FOR CORRECT REPRESENTATIONS. THE SELLER IS
PROHIBITED FROM MAKING ANY REPRESENTATIONS OTHER THAN THOSE
CONTAINED IN THE CONTRACT AND THIS PUBLIC OFFERING STATEMENT.
J. THE PLAN PROVIDES THAT THE DEVELOPER MAY CANCEL IN ITS
SOLE DISCRETION THE CONTRACT IN THE EVENT THAT LESS THAN 76
INTERESTS (OF ANY CLASS) ARE SOLD BY THE DEVELOPER BEFORE
DECEMBER 31, 1997.
III. PUBLIC OFFERING STATEMENT TEXT
This Summary does not purport to be a complete description
of the Charthouse Suites Vacation Investment and Ownership
Interests and is qualified in its entirety by reference to the
more detailed information contained elsewhere in this Public
Offering Statement and the Annexes and Exhibits thereto.
Capitalized terms used, but not defined in this Summary, are
defined elsewhere in this Public Offering Statement. Prospective
purchasers are urged to read and evaluate this Public Offering
Statement and the Annexes and Exhibits in their entirety in order
to weigh fully the merits and risks of an investment in the
Interests.
Charthouse Suites Vacation Ownership, Inc., a Florida
corporation (the "Company" or "Charthouse"), hereby offers Class
A Interests, Class B Interests, Class C Interests, Class D
Interests, Class E Interests, and Class F Interests (collectively
hereafter the "Interests") for sale to purchasers. The purchaser
of an Interest (a "Licensee") will have the right to use for two
specific and consecutive weeks of every Spring, Summer, Fall, and
Winter Season until December 31, 2050, a hotel suite of a certain
category in the Charthouse Suites hotel located in Clearwater
Beach, Florida. The Licensee will have the flexibility to use
one or more of the eight weeks each year, place one or more weeks
in the Charthouse rental pool and receive net earnings arising
from renting hotel suites, if any, or join RCI Travel's Vacation
Exchange Program and utilize the RCI Travel's Vacation Exchange
Program to exchange vacation weeks at the Charthouse Suites hotel
for vacation weeks at approximately 2,800 RCI affiliated resorts
located around the world.
A. THE TIME SHARE PLAN
1. The Plan
The name of the Time Share Plan is Charthouse Suites
Vacation Investment and Ownership Interest, and all
accommodations and facilities are located at 850 Bayway Blvd.,
Clearwater Beach, Florida. The Resort Facility is owned in fee
simple by Decade Properties, Inc., without any outstanding
mortgages. The Developer is the holder of a Master License and
Non-exclusive Easement which granted to the Developer certain
rights to use the hotel room and suites (hereafter ("Suites") and
common areas of the Resort Facility. The Developer has been
formed to facilitate the sale of Interests to use the Resort
Facility. The Resort Facility or common amenities does not
include the marina on the Resort Facility.
The property upon which the accommodations and
facilities are located is divided into two (2) categories as
follows:
a. Resort Facility: The overall project
consists of twenty-five (25) Units contained in one (1) building.
The Resort Facility also includes use of all furniture,
furnishings and fixtures therein. All Units are located upon the
Resort Facility.
b. Common Amenities: There shall be certain
Common Amenities available for use by Licensees in connection
with the Resort Facility. The Common Amenities are those areas
not included as part of the Resort Facility which are to be used
by Licensees of the Resort Facility and Licensees in subsequent
Phases of the development, including the Developer, its
successors and assigns. The Common Amenities shall be located on
the property are described in the Vacation License Plan.
The Developer shall convey to each Licensee by License
the ownership of a time share license which is an estate for
years terminating on December 31, 2050 entitling the Licensee to
occupancy of an Assigned Unit during an Assigned Week, as set
forth in the Plan.
The Developer shall enter into a License with each
Licensee, whereby such Licensee is granted the right to receive
rental revenue from the Charthouse rental pool, if any, and, upon
request, occupy a particular category of suite for eight weeks
each calendar year (two weeks in each season) terminating on
December 31, 2050. Winter is Weeks 46-52 and 1-6, Spring is
Weeks 7-19, Summer is Weeks 20-32 and Fall is Weeks 33-45. The
Developer and/or Managing Entity shall establish the annual
Schedule in its sole discretion, whose decision as to the Weeks
assigned to a Licensee each calendar year shall be final. The
particular Unit to which the Licensee's Weeks shall be applicable
shall be assigned by the Developer and/or the Managing Entity in
the category of the Class of Interest purchased by the Licensee.
The category of suite that may be used by a Licensee shall be
determined by the Class of Interest purchased by the Licensee.
The Classes of Interests are as follows:
Class A Interests-- The ownership of A Interests allows the
Standard Studio Licensee use of a standard studio suite
Suite: with 2 queen sized beds overlooking the
marina and Clearwater Bay, for two weeks
in each season until December 31, 2050.
Units 201, 202, 301, 302, 401 and 402 in
Charthouse Suites Hotel are the suites
applicable to the Class A Interests.
The suites have approximately 364 square
feet.
Class B Interest-- The ownership of B Interests allows the
King Bed Studio Licensee use of a spacious King Studio
Suite: suite with 1 king sized bed overlooking
the marina and Clearwater Bay, for two
weeks in each season until December 31,
2050. Units 103, 104, 105 and 106 in
Charthouse Suites Hotel are the suites
applicable to the Class B Interests.
The suites have approximately 360 square
feet.
Class C Interests-- The ownership of C Interests allows the
Large Studio Suite: Licensee use of a large studio suite
with 2 queen sized beds overlooking
Clearwater Bay, the marina or southern
exposure, for two weeks in each season
until December 31, 2050. Units 101,
102, 206, 207, 305 and 306 in Charthouse
Suites Hotel are the suites applicable
to the Class C Interests. The suites
have approximately between 430 and 436
square feet.
Class D Interests--1 The ownership of D Interests allows the
Bedroom Suite: Licensee use of a one bedroom suite
overlooking the marina, Clearwater Bay,
the swimming pool or southern exposure
for two weeks in each season until
December 31, 2050. Units 204, 303, 304,
307, 403 and 404 in Charthouse Suites
Hotel are the suites applicable to the
Class D Interests. The suites have
approximately between 638 and 869 square
feet.
Class E Interests-- The ownership of E Interests allows the
1 Bedroom Suite Licensee use of a one bedroom suite
(with lanai): with lanai with a view of Clearwater
Bay, for two weeks in each season until
December 31, 2050. Units 203 and 205 in
Charthouse Suites Hotel are the suites
applicable to the Class E Interests.
The suites have approximately between
815 and 982 square feet.
Class F Interest-- The ownership of F Interests allows the
Penthouse: Licensee use of a two bedroom penthouse
suite, with a fully equipped kitchen,
living room, den, dining room, two full
baths (one with a jacuzzi), and a large
private balcony overlooking Clearwater
Bay, for two weeks in each season until
December 31, 2050. Unit 405 in
Charthouse Suites Hotel is the suite
applicable to the Class F Interest. The
suite has approximately 1,875 square
feet.
The remainder interest shall be vested in the Developer. A
Licensee may be the Licensee of more than one (1) License or more
than one (1) Interest. The Licensee shall be entitled to the
exclusive use of a Unit in the Class of Interest purchased, the
specific Unit to be designated by the Managing Entity, which use
shall only be during the Assigned Unit Weeks and to no other Unit
or during any other Unit Weeks. A Licensee should expect to
occupy different suites available within the Class of Interest
purchased for each of the Licensee's Unit Weeks. During the
Assigned Unit Weeks, the Licensee shall also have the right to
the non-exclusive reasonable use of the common areas of the
Resort Facility. A Licensee shall not have the right to the use
of the Resort Facility, except during such Licensee's Assigned
Unit Weeks.
Title to the Resort Facility, and the Common Amenities,
will at all times, be vested in Decade Properties, Inc., its
successors, grantees and assigns. The Developer has obtained the
rights to the Resort Facility, Common Amenities and Common Areas
pursuant to a Master License Agreement (which is attached as an
exhibit). A Licensee may be the Licensee of more than one time
share license. The grant of a License by the Developer of a time
share license shall designate a Unit which the Licensee shall
occupy and a Unit Week during which the Licensee shall occupy his
Unit. The Unit and Unit Week which is designated for use by a
particular Licensee shall be such Licensee's Assigned Unit and
Assigned Unit Week. Such Assigned Unit and Assigned Unit Week
shall be selected by the Licensee. The Licensee shall be
entitled to exclusive use of the Assigned Unit, during the
Assigned Unit Week and to none other, and to the nonexclusive
reasonable use of the Common Amenities in accordance with the
Plan. The Licensee of a time share license shall not have any
right to use any portion of the property not specifically
designated for use by Licensees of time share licenses,
including, but not limited to the marina.
It is to be specifically noted that the Common
Amenities are not included as part of the Resort Facility, and no
Licensee shall acquire any ownership interest therein or in the
marina.
CHARTHOUSE SUITES VACATION OWNERSHIP, INC. is the
governing body for the operation of the Resort Facility and
Common Amenities. Charthouse Suites Vacation Ownership, Inc.
shall have the obligation to maintain, manage, repair and replace
the Common Amenities and such costs will be common expenses. The
legal description of the Common Amenities may be amended by the
Developer provided that such an amendment shall not affect the
legal description of the Resort Facility or any Member Resort
Facility.
The Developer does not plan to develop adjacent
properties as a Resort Facility.
For a more complete description of the Plan, please
refer to Exhibit "A19" to this Public Offering Statement.
2. Common Expenses and Elements of the Plan
The assessment of Common Expenses for management and
maintenance of the Resort Facility is apportioned in accordance
with Article IV of the Vacation License Plan.
Under the Plan, the Managing Entity shall assess each
Licensee in the Resort Facility its share of the Common Expenses,
which share shall be assessed annually as an Annual Assessment,
and the Managing Entity shall collect said sums. The Assessment
shall be determined as follows: Each Licensee shall be
responsible for a proportionate share of the Common Expenses
attributable to the Unit Weeks which are licensed to the
Licensee. It is understood that the total Common Expenses shall
be allocated to the respective Classes of Interests as follows:
Total
Total of Category Per Interest
Class A Interest - 14.5716% .3736%
Class B Interest - 11.4284% .4396%
Class C Interest - 22.7142% .5824%
Class D Interest - 31.2858% .8022%
Class E Interest - 11.2858% .8681%
Class F Interest - 8.7143% 1.3407%
Total 100%
Each License shall be responsible for a uniform portion of the
Common Expenses allocated to the Class of Interest under such
License, with the numerator being the number of Assigned Unit
Weeks licensed to the Licensee and the denominator being the
total number of Unit Weeks included in that particular class.
For the period through and including December 31, 1997 the
Developer guarantees that the Annual Assessment per Unit Week
shall not exceed the amounts per Class of Interest as set forth
below:
Class A - $175.00
Class B - $175.00
Class C - $190.00
Class D - $270.00
Class E - $290.00
Class F - $350.00
Thereafter, such Annual Assessment shall not increase
annually by more than 10% per annum determined on a compounded
basis (except for the portion of the assessment relating to real
estate taxes and insurance) without the affirmative vote of a
majority in interest of the total Unit Weeks. An Advisory
Committee as described in subsection C below may be consulted for
advice regarding certain management decisions relevant to
establishing the Annual Assessment. The Licensee shall not have
the right to use of a suite during such Licensee's assigned Unit
Weeks if the Licensee is not current in the payment of Annual
Assessments due by the Licensee as determined by the Managing
Entity. If the Licensee participates in an Exchange Program,
then prior to any transfer of a Unit Week to which the Licensee
is entitled, all assessments which will be applicable for all
periods prior to the Unit Week(s) to be transferred shall be due
and must be paid in full prior to any transfer. Any transfer
without such assessments being paid in full shall be void and
neither the Managing Entity nor the Developer shall be bound to
honor the transfer.
For a more complete description of the manner in which the
undivided interest of each Licensee has been determined and the
apportionment of Common Expenses, please refer to Articles II,
IV, and VII of the Vacation License Plan attached as Exhibit
"A19" to this Public Offering Statement.
As set forth in the Plan, Common Expenses include
indemnification for the Developer against any and all claims,
suits, actions, damages and/or causes of action arising from any
personal injury, loss of life, and/or damage to property,
sustained on the Resort Facility and from and against all costs,
counsel fees, expenses and liabilities incurred in connection
with any such claim, the investigation thereof or the defense of
any action or proceeding brought thereon and from and against any
orders, judgments and/or decrees which may be entered thereon.
Included in the foregoing provisions of indemnification are any
expense that the Developer may be compelled to incur in bringing
suit for the purpose of enforcing rights hereunder or for the
purpose of compelling the specific enforcement of the provisions,
conditions and covenants to be kept and performed by the
Licensees.
B. CLUB MEMBERSHIP OR RECREATIONAL LEASE, AS APPLICABLE
The Common Amenities are available pursuant to the Master
License Agreement, and, specifically, there are no other
recreational leases or club memberships associated with this
Vacation License Plan, nor is there any person, firm or entity,
other than Charthouse Suites Vacation Ownership, Inc. (for
maintenance purposes), reserving the right to collect any fee or
other payment for use of the facilities.
C. TERM OF PLAN
The interests being conveyed in the Resort Facility shall be
a time share license which is an estate for years terminating on
December 31, 2050. Notwithstanding any provision to the
contrary, in the event that less than 76 Interests are sold by
the Developer by December 31, 1997, the Developer or Charthouse
Suites Vacation Ownership, Inc. has the right to reacquire the
Interests sold by refunding to the Licensees the purchase price
paid by the Licensee less any and all income earned by such
Licensee in connection with the ownership of the Interest or
rentals earned for the assigned Unit Weeks less benefits for use
of the suite. The Plan states assumed benefits. The Licensees
shall not be entitled to a refund of any Maintenance Fees paid.
Upon such reacquisition, this Plan and the License Agreements
shall be null and void.
In the event of the termination of this Plan, the Resort
Facility shall be deemed removed from the provisions of the Act
and all Licenses will be deemed canceled with all Licensees
relinquishing any and all rights under the Plan.
D. RESPONSIBLE ENTITIES
1. The Entities
The rights and obligations inherent in the management
of the Resort Facility is vested in CHARTHOUSE SUITES VACATION
OWNERSHIP, INC., a Florida corporation, organized pursuant to the
provisions of Florida Statutes. The address for Charthouse
Suites Vacation Ownership, Inc. is 250 Patrick Blvd., Brookfield,
WI 53045. Charthouse Suites Vacation Ownership, Inc. is
responsible for the maintenance and operation of Charthouse
Suites Vacation Investment and Ownership Interests. Charthouse
Suites Vacation Ownership, Inc. is also responsible for the
operation, management and maintenance of the Common Amenities and
may also become responsible, pursuant to the terms and conditions
of the Plan, for operation, maintenance and management of
additional properties (Member Resorts) as described herein.
The Vacation License Plan provides that Charthouse
Suites Vacation Ownership, Inc. may enter into a Management
Agreement with a management company in order to confer on another
management entity, responsibility for management and operation of
the Resort Facility, Common Amenities and/or any Member Resort
Facility.
Charthouse Suites Vacation Ownership, Inc. has entered
into a Management Agreement with DECADE PROPERTIES, INC., a
Wisconsin corporation, whose address is 250 Patrick Blvd.,
Brookfield, WI 53045. A copy of the Management Agreement is
attached to this Public Offering Statement as Exhibit "A7". The
Management Agreement shall commence on the date the
Nondisturbance and Notice to Creditors is recorded and shall
continue for a period of 54 years. There are substantial
penalties in the event Decade Properties, Inc. is removed as a
property manager.
The duties of the Developer or Charthouse Suites
Vacation Ownership, Inc. shall include, but are not limited to:
a. Management and maintenance of all
accommodations and facilities;
b. Collection of all assessments for Common
Expenses;
c. Providing each year to all Licensees an
itemized Annual Budget, which shall include
all receipts and expenditures of Common
Expenses;
d. Maintenance of all books and records
concerning the Vacation License Plan on the
premises of the accommodations or facilities
of the Plan and making all such books and
records reasonably available for inspection
by any Licensee;
e. Arranging for an annual independent audit of
all the books and financial records of the
Vacation License Plan by a certified public
accountant in accordance with generally
accepted auditing standards as defined by the
rules of the Board of Accountancy of the
Department of Business and Professional
Regulation; and
f. Making available for inspection by the
Division any books and records of the
Vacation License Plan upon the request of the
Division.
The compensation payable to the managing entity by
Licensees in Charthouse Suites Vacation Investment and Ownership
Interests shall be equal to $2,500 per month plus reimbursement
of expenses incurred by providing services. Increases in
compensation may take place annually pursuant to agreement in
writing between Charthouse Suites Vacation Ownership, Inc. and
managing entity, which is based on the increases in CPI index.
The Developer reserves the right, in its sole
discretion, to create an owners association or a separate
Condominium, Homeowners or other similar Association to manage
the Resort. In such case, the Resort Facility shall be operated
and managed by the newly created association.
The name of the Developer is CHARTHOUSE SUITES VACATION
OWNERSHIP, INC., 250 Patrick Blvd., Brookfield, WI 53045. This
is the first time share development for Charthouse Suites
Vacation Ownership, Inc. or its affiliates.
The Chief Executive and Operating Officer for the
Developer is Jeffrey Keierleber. Mr. Keierleber is responsible
for overall operations, management and control of the
development. Mr. Keierleber has had extensive experience in the
real estate industry, including both development and marketing.
2. Judgments and Pending Lawsuits
There are no judgments or pending suits against the
Developer, Charthouse Suites Vacation Ownership, Inc. or the
Managing Entity which are material to the Vacation License Plan.
E. RESORT/COMPONENT SITE
1. The Resort Accommodations and Facilities
As previously indicated, the Resort Facility consists
of one (1) building, containing a total of twenty-five (25) hotel
rooms ("Units"). Each Interest has the right to eight (8) Unit
Weeks. There will be eight (8) time share licensees which
represent for each Unit. With respect to the Resort Facility,
there shall be a total of one hundred fifty (150) time share
periods sold. This offering is limited to time share licenses in
the Resort Facility.
The Developer shall enter into a License with each
Licensee, whereby such Licensee is granted the right to receive
rental revenue, if any, and occupy a particular category of suite
for eight weeks each calendar year (two weeks in each season)
terminating on December 31, 2050. Winter is Weeks 46-52 and 1-6,
Spring is Weeks 7-19, Summer is Weeks 20-32 and Fall is Weeks 33-
45. The Developer and/or Managing Entity shall establish the
annual Schedule in its sole discretion, whose decision as to the
Weeks assigned to a Licensee each calendar year shall be final.
The particular Unit to which the Licensee's Weeks shall be
applicable shall be assigned by the Developer and/or the Managing
Entity in the category of the Class of Interest purchased by the
Licensee. The category of suite that may be used by a Licensee
shall be determined by the Class of Interest purchased by the
Licensee. The Classes of Interests are as follows:
Class A Interests-- The ownership of A Interests allows the
Standard Studio Licensee use of a standard studio suite
Suite: with 2 queen sized beds overlooking the
marina and Clearwater Bay, for two weeks
in each season until December 31, 2050.
Units 201, 202, 301, 302, 401 and 402 in
Charthouse Suites Hotel are the suites
applicable to the Class A Interests.
Class B Interest-- The ownership of B Interests allows the
King Studio Suite: Licensee use of a spacious King Studio
suite with 1 king sized bed overlooking
the marina and Clearwater Bay, for two
weeks in each season until December 31,
2050. Units 103, 104, 105 and 106 in
Charthouse Suites Hotel are the suites
applicable to the Class B Interests.
Class C Interests-- The ownership of C Interests allows the
Large Studio Suite: Licensee use of a large studio suite
with 2 queen sized beds overlooking
Clearwater Bay, the marina or southern
exposure, for two weeks in each season
until December 31, 2050. Units 101,
102, 206, 207, 305 and 306 in Charthouse
Suites Hotel are the suites applicable
to the Class C Interests.
Class D Interests--1 The ownership of D Interests allows the
Bedroom Suite: Licensee use of a one bedroom suite
overlooking the marina, Clearwater Bay,
the swimming pool or southern exposure
for two weeks in each season until
December 31, 2050. Units 204, 303, 304,
307, 403 and 404 in Charthouse Suites
Hotel are the suites applicable to the
Class D Interests.
Class E Interests-- The ownership of E Interests allows the
1 Bedroom Suite Licensee use of a one bedroom suite with
(with lanai): lanai with a view of Clearwater Bay, for
two weeks in each season until
December 31, 2050. Units 203 and 205 in
Charthouse Suites Hotel are the suites
applicable to the Class E Interests.
Class F Interest-- The ownership of F Interests allows the
Penthouse: Licensee use of a two bedroom penthouse
suite, with a fully equipped kitchen,
living room, den, dining room, two full
baths (one with a jacuzzi), and a large
private balcony overlooking Clearwater
Bay, for two weeks in each season until
December 31, 2050. Unit 405 in
Charthouse Suites Hotel is the suite
applicable to the Class F Interest.
a. Restrictions on Use
Licensees may be denied access to their Units upon
failure to pay assessments (annual or special, if any) in
accordance with the provisions of Section 721.13(6)(a), Florida
Statutes or for failure to pay for their Interests on a timely
basis.
(1) Occupancy and Use Restrictions
(a) The Units shall be transient resort
occupancy only. No trade, business, profession or other type of
commercial activity may be conducted in any Unit except for any
Units which are used by Developer for models, sales offices,
construction offices, storage or related uses. Each Licensee
shall have the exclusive right to use and occupy his Assigned
Unit during the Assigned Unit Week assigned to such Licensee
subject to the provisions of the Plan.
(b) Presently, a Licensee may not keep
a pet in his Unit, nor shall a Licensee keep any other animals,
livestock or poultry in his Unit, nor may any of the same be
raised, bred or kept upon the Common Areas or any portion of the
Resort Facility. Charthouse Suites Vacation Ownership, Inc.
shall have the authority in the future to adopt rules and
regulations permitting the keeping of pets.
(c) A Licensee shall not permit or
suffer anything to be done or kept in its Unit which will
increase the insurance rates on its Unit or the Common Areas
which will obstruct or interfere with the rights or other
Licensees or Charthouse Suites Vacation Ownership, Inc. or the
Managing Entity.
(d) No Licensee shall annoy other
Licensees by unreasonable noises or otherwise and no Licensee
shall commit or permit to be committed any nuisance or immoral or
illegal act in its Unit or on the Common Areas.
(e) In the event of damage to or
destruction of any Unit, the furnishings of any Unit or the
Common Area caused by a Licensee or the family members, guests,
invitees, lessees or licensees of a Licensee, such Licensee shall
be liable for the cost of necessary repairs and reconstruction to
restore the Unit, furnishings and/or Common Area to its original
condition and the cost thereof shall be a lien in accordance with
the terms provided for herein.
(f) No Licensee (with the exception of
Developer, for so long as Developer is a Licensee) shall display
any sign, advertisement or notice of any type on the exterior of
its Unit, the Common Areas or at any window or other part of its
Unit or on any personal property located therein; no Licensee
shall erect any exterior antennae or aerials upon its Unit or the
Common Areas; and no Licensee shall cause anything to project out
of any window, door, porch or balcony except as may be approved
in writing by Charthouse Suites Vacation Ownership, Inc. (except
as installed as of the date the Plan is recorded or except as
thereafter installed by Developer).
(g) A Licensee (excluding Developer,
for so long as Developer is a Licensee) shall not be permitted to
keep any boat, trailer, truck, camper, van in excess of twenty
(20) feet long, recreational vehicle or other vehicle which is
not a private passenger car on any portion of the Resort Facility
and any such vehicle shall be removed at the expense of the
Licensee responsible therefor. The use of parking spaces may be
further regulated and limited by the Rules and Regulations
promulgated by Charthouse Suites Vacation Ownership, Inc.
(h) No clothesline or other similar
device shall be allowed on any portion of the Resort Facility and
no clothes, sheets, blankets, laundry, rugs or any kind of
article shall be dried, aired, beaten or dusted by extending same
from the windows, doors, porches or balconies of a Unit.
(i) Each Licensee shall keep its Unit
in a good state of preservation and cleanliness and shall not
sweep or throw or permit to be swept or thrown therefrom or from
the doors, windows, porch or balcony thereof any dirt or other
substances.
(j) Waterclosets and other water
apparatus on the Resort Facility shall not be used for any
purposes other than those for which they were constructed. A
Licensee shall pay for any damage to a Unit, its contents and/or
the Common Areas because of the misuse of waterclosets or other
apparatus in its Unit. Liability for any damage to a Unit caused
by the moving or carrying of any article on the Resort Facility
shall be borne by the Licensee responsible or the presence of
such article. A Licensee shall be liable for the expense of any
maintenance, repair or replacement of any real or personal
property rendered necessary by his act, neglect or carelessness,
or by that of any member of his family, or his or their guests,
employees, agents, licensees, or lessees. Such liability shall
include any increase in fire insurance rates occasioned by use,
misuse, occupancy or abandonment of a Unit or the Common Areas
and shall also include the cost of repairing broken windows. A
Licensee shall also be liable for any personal injuries caused by
his negligent acts or those of any member of his family, or his
or their guests, employees, agents, licensees or lessees.
Nothing herein contained, however, shall be construed so as to
modify any waiver by insurance companies of rights of
subrogation.
(k) No Licensee shall use or permit to
be brought into any Unit, porch or balcony any inflammable oils
or fluids such as gasoline, kerosene, naphtha, benzine or other
explosives or articles deemed extra hazardous to life, limb or
property.
(l) Charthouse Suites Vacation
Ownership, Inc. will retain a passkey to each Unit. No Licensee
shall alter any lock or install a new lock on any door leading
into its Unit without the prior written consent of Charthouse
Suites Vacation Ownership, Inc. If such consent is given, the
Licensee shall provide Charthouse Suites Vacation Ownership, Inc.
with a key for the use of Charthouse Suites Vacation Ownership,
Inc. In the event Charthouse Suites Vacation Ownership, Inc. is
not provided with a key to the Unit, the Licensee shall pay the
cost incurred by Charthouse Suites Vacation Ownership, Inc. in
gaining entrance to its Unit.
(m) No Licensee shall cook or barbecue
on any porch or balcony. Only lawn furniture is permitted on
porches and balconies. The hanging of articles of any type on
the porch or balcony railings is not permitted.
(n) A Licensee may not make or cause to
be made any structural modifications to its Unit (except those
modifications which exist as of the date the Plan is recorded or
as made by Developer) without Charthouse Suites Vacation
Ownership, Inc.'s prior written consent, which consent may be
withheld for any reason.
(o) There are no restrictions
prohibiting children in the Resort Facility or the Common
Amenities, however, parents shall be required to supervise
children at all times.
b. Private Use: The Units and the Common Areas
are not for the use and enjoyment of the public, but are
expressly reserved for the reasonable private use and reasonable
enjoyment of the Developer, Charthouse Suites Vacation Ownership,
Inc., the Managing Entity, the Licensees, guests, invitees and
lessees in accordance with the Plan.
c. Rules and Regulations: Charthouse Suites
Vacation Ownership, Inc. shall impose rules and regulations
regulating the use and enjoyment of the Units and the Common
Areas. The rules and regulations so promulgated shall in all
respects be consistent with the use covenants set forth in the
Vacation License Plan and with the architectural and
beautification concept presently existing. Charthouse Suites
Vacation Ownership, Inc. may modify, alter, amend and rescind
such rules and regulations, provided such modifications,
alterations, amendments and rescissions are consistent with the
use covenants set forth herein.
A copy of the initial Rules and Regulations
adopted by Charthouse Suites Vacation Ownership, Inc. is attached
hereto as Exhibit "A18" to this Public Offering Statement.
2. Phasing
The construction, finishing and equipping of the Resort
Facility and Common Amenities is complete.
It is not the present intent of the Developer to
develop additional properties which are located either adjacent
to or contiguous with the Resort Facility and/or the Common
Amenities as shown on Exhibit "A9".
3. Recreational Facilities
Those portions of the property designated as Common
Amenities are not included as part of the Resort Facility,
however, are to be used and occupied on a mutual and non-
exclusive basis by Licensees in the Resort Facility and Licensees
in previously or subsequently created developments. No Licensee
shall acquire any exclusive possessory interest in the Common
Amenities. All Common Amenities shall be managed by Charthouse
Suites Vacation Ownership, Inc.
The following is a description of the recreational and
other commonly used facilities referred to above:
a. Swimming Pool
(1) Location: As shown on the Plot Plan as
set forth on Exhibit "A9" to the Public
Offering Statement
(2) Approximate size: 546 sq. ft.
(3) Approximate depth: 3-5 feet
(4) Maximum capacity: 20 persons
(5) The swimming pool is heated.
b. Administrative Office
(1) Location: As shown on the Plot Plan as
set forth on Exhibit "A9" to the Public
Offering Statement
(2) Approximate size: 1325 sq. ft.
(3) Maximum capacity: 3 persons
c. Laundry Room
(1) Location: As shown on the Plot Plan as
set forth on Exhibit "A9" to the Public
Offering Statement
(2) Approximate size: 170 sq. ft.
(3) Maximum capacity: 3 persons
There are no facilities which are not built.
As previously indicated, the Common Amenities are not
included as part of the Resort Facility, and no Licensee shall
acquire any ownership interest therein. Title to the Common
Amenities is vested in the Developer. The use rights of a
Licensee in the Common Amenities shall be an estate for years,
terminating on December 31, 2050. For a more complete
description of the terms of such ownership, control and
management by Charthouse Suites Vacation Ownership, Inc., please
refer to Articles II, III, IV and VII of the Plan attached as
Exhibit "A19" to this Public Offering Statement.
The Developer is unable at this time to itemize each
and every item of personal property to be used in connection with
the common facilities. The minimum amount of expenditure that
the Developer or Association will commit to purchase personal
property for the Common Amenities shall be zero ($0.00).
4. Financial Arrangements for Promised Improvements
All accommodations and facilities are presently
complete.
5. Utilities
The manner in which the utilities and other services
are to be provided and the person or entity furnishing them are
as follows:
a. Electricity: Florida Power Corporation
b. Solid waste disposal: City of Clearwater
c. Sewer and water: City of Clearwater
d. Storm drainage: Natural gravity flow
e. Garbage disposal: City of Clearwater
f. Telephone: Florida Telephone
6. Insurance
Insurance is or will be maintained on the Resort
Facility and Common Amenities by Charthouse Suites Vacation
Ownership, Inc. Coverage shall include all risk, property
damage, flood and personal injury insurance. All buildings shall
be adequately covered to insure full replacement cost. The
responsibility for maintaining all required insurance shall be
that of Charthouse Suites Vacation Ownership, Inc. Insurance
policies will be maintained, naming the Developer and Charthouse
Suites Vacation Ownership, Inc. as their interests may appear.
Premiums for payment of such insurance shall be paid by
Charthouse Suites Vacation Ownership, Inc. and charged as part of
the Common Expense. Insurance covering the replacement cost of
all improvements located within each Unit will also be maintained
by Charthouse Suites Vacation Ownership, Inc.
For a further description of the terms and conditions
of the required insurance coverage, please refer to Articles IX
and X of the Vacation License Plan. Insurance policies will be
made reasonably available for inspection by Licensees or their
agents in accordance with law.
a. Loss to Property
Where a loss or damage occurs to any part of the Resort
Facility it shall be obligatory upon the Managing Entity to
repair or restore the damage caused by said loss, subject to the
provisions below.
The Managing Entity shall promptly obtain reliable and
detailed estimates of the cost of repairing and reconstruction of
such damaged property for the purpose of determining whether the
available insurance proceeds are sufficient to pay for the same.
If the insurance proceeds are sufficient to pay for the
estimated cost of restoration and repair, the Managing Entity
shall have the right and obligation to cause the damage to be
repaired and restored.
If the net proceeds of the insurance are insufficient
to pay for the estimated cost of restoration and repair (or for
the actual cost thereof, if the work has actually been done), the
Managing Entity shall promptly, upon determination of the
deficiency, determine the amount of the Special Assessment which
will be necessary to obtain the necessary funds to repair and to
restore such damaged improvements. If the Special Assessment is
10% or less of the budgeted gross expenses for the calendar year
in which the assessment is levied, then the Managing Entity shall
levy such Assessment against the Licensees and shall upon receipt
of adequate funds proceed to have the repairs and reconstruction
completed. Each Licensee shall be responsible for a
proportionate share of the Assessment attributable to the Unit
Weeks which are licensed to the Licensee in the same manner that
the Annual Assessment is allocated.
If the Special Assessment exceeds 10% of the budgeted
gross expenses for the calendar year in which the assessment is
levied, then the damage or destruction shall not be repaired or
reconstructed without the affirmative vote of a majority in
interest of the total number of Unit Weeks. If the affirmative
vote is obtained, then the Managing Entity shall levy such
Special Assessment against the Licensees and shall upon receipt
of adequate funds proceed to have the repairs and reconstruction
completed. If the affirmative vote is not obtained, then in such
event and only in such event, the damage and destruction shall
not be repaired and this Plan and all Licenses shall terminate.
The entire insurance proceeds shall be allocated between the
Owner and the holders of the Unit Weeks in the Resort Facility
with the holders of the right to use Unit Weeks being entitled to
that portion of the proceeds equal to a ratio the numerator of
which is the remaining number of years from the date of the
damage to December 31, 2050 and the denominator is 64. The Owner
shall be entitled to the balance of the proceeds. The proceeds
due to the holders of the right to use Unit Weeks shall be
allocated in the percentages and manner in which Common Expenses
are allocated, provided that if a particular Licensee has not
paid the entire purchase price and all payments for the License,
then such Licensee shall have the option of (a) paying the
balance due on such License, in which event such Licensee shall
receive the pro rata share of insurance proceeds allocated to
such Licensee's Unit Weeks as provided above, or (b) not paying
such balance due on the purchase price of the License, in which
event the insurance proceeds allocated to such Licensee's Unit
Weeks shall be paid to the Developer.
Notwithstanding any provision to the contrary, during
such time that the Resort Facility or the Unit(s) are
untenantable because of such damage or destruction, the Managing
Entity shall notify the holders of the affected Unit Weeks and
such holders shall not be permitted to use said Unit Weeks. Such
affected holders shall not be entitled to any compensation for
such loss of use, unless the Managing Entity is able to obtain
and does obtain loss of use insurance coverage, in which event
the affected holders shall only be entitled to the portion of
loss of use insurance proceeds applicable to the Unit Weeks in
which the Licensee was not able to occupy a suite because of such
damage or destruction.
7. Leasing of Units/Sale of Whole Units
Other than operating the Charthouse rental pool, the
Developer's present plan does not include a program of leasing
units rather than selling time share licenses, however, this
shall not preclude the Developer from leasing or renting Units or
time share periods.
The Developer does not intend to offer whole Units in
addition to Time Share Units,however, this shall not preclude the
Developer from offering whole Units as part of future
development.
8. Disclosures Regarding Real Property
To the best knowledge, information and belief of the
Developer, there are no unusual and material circumstances,
features and characteristics of the property other than as set
forth in this Public Offering Statement.
There are no properties offered by the Developer for
use by the Licensees which are neither owned by them or leased to
them, Charthouse Suites Vacation Ownership, Inc., or any entity
controlled by the Licensees.
9. Description of Developer Financing
The Developer will be providing financing to all
qualified Licensees, subject to terms to be agreed upon between
the individual Licensee and Developer for up to seventy-five
(75%) percent of the purchase price, for a term of up to thirty
(30) years, with increased licensing payment not to exceed the
maximum rate interest allowed under Florida law. In the event of
any change in any such financing, same shall be deemed not to be
a material change to this Offering Statement.
10. Control of Association
THE DEVELOPER HAS THE RIGHT TO RETAIN CONTROL OF
Charthouse Suites Vacation Ownership, Inc. AFTER A MAJORITY OF
THE LICENSES HAVE BEEN SOLD.
For a more complete description of the Developer's
right of control, please refer to the Vacation License Plan
attached as Exhibit "A19" to the Public Offering Statement.
F. BUDGETS, DUES AND FEES
1. Estimated Operating Budgets
The Estimated Operating Budget for the Resort Facility
and the Common Amenities is attached as Exhibit "A8" to this
Public Offering Statement. Based upon the Estimated Operating
Budget, each Licensee shall be required to pay, as a Licensee,
for each time share license owned the annual sum of set forth in
the Estimated Operating Budget. There shall be a single
Estimated Operating Budget for the Resort Facility, and for the
Common Amenities. The Developer has undertaken to guarantee the
assessments for the Resort Facility and Common Amenities during
the current fiscal year commencing as of January 1, 1996 through
December 31, 1997. In this regard, the Developer shall guarantee
that assessments during the guarantee period shall not be made
against any Licensee of a time Share License, other than the
Developer, exclusive of real estate taxes, as set forth in the
Estimated Operating Budget.
For the period through and including December 31, 1997
the Developer guarantees that the Annual Assessment per Unit Week
shall not exceed the amounts per Class of Interest as set forth
below:
Class A - $175.00
Class B - $175.00
Class C - $190.00
Class D - $270.00
Class E - $290.00
Class F - $350.00
Under December 31, 1997, the Developer will pay all
expenses in excess of the amounts collectible from Unit Licensees
pursuant to Section 721.05(x)(5), Florida Statutes.
Pursuant to the Vacation License Plan, Charthouse
Suites Vacation Ownership, Inc. has the authority to alter or
amend charges for which the Licensee may be liable. This right
includes the right of Charthouse Suites Vacation Ownership, Inc.
to increase the Estimated Budget for the Resort Facility and
Common Amenities from year to year (unless otherwise guaranteed
by the Developer as set forth herein) and the right to make
special assessments from time to time.
G. PURCHASE OF AN OWNERSHIP INTEREST
1. Licensee's Right of Cancellation
Each Licensee is given the right, pursuant to Florida
Statutes, Chapter 721, to cancel the License Agreement without
any penalty or obligation within ten (10) days from the date the
License Agreement is signed and until ten (10) days after receipt
of the Public Offering Statement, whichever is later. Licensee
must notify the Developer in writing of his/her intent to cancel.
The Notice of cancellation shall be effective upon the date sent
and shall be sent to the Developer at 250 Patrick Blvd.,
Brookfield, WI 53045. Any attempt to obtain a waiver of the
Licensee's cancellation rights is unlawful. While the Licensee
may execute all closing documents in advance, the closing, as
evidenced by the delivery of the Deed, before the expiration of
the ten (10) day cancellation period is prohibited.
Each Licensee may also cancel the License Agreement at
any time after the accommodations or facilities are no longer
available as provided in the Vacation Plan and this Public
Offering Statement. In such event, the Vacation Plan provides
that a Licensee will receive the price of their Interest
(exclusive of assessments) less any benefits received. The
Vacation License Plan contemplates that purchasers may have the
accommodation or facility unavailable on a temporary basis in
order to facilitate repairs, maintenance, or emergencies. Such
events shall not give rise to a right to cancel.
2. Total Financial Obligation of the Licensee
There are no closing expenses to a Licensee, exclusive
of state taxes.
In connection with the purchase of a Time Share
License, the Licensee shall be subject to the following financial
obligations:
a. Payment of the purchase price as indicated in
the License Agreement, together with finance charges in the event
the purchase price is financed in whole or in part.
b. Maintenance fees as set forth in the Plan
attached as Exhibit "A19" to this Public Offering Statement.
c. Exchange membership fees pursuant to the
separate exchange agreement to be entered into between the
Licensee and the exchange company in the event Licensee elects to
become a member of the exchange program.
d. Unless included in the Common Expenses,
property taxes charged to each Licensee with respect to each time
share license owned.
e. Sales and document taxes imposed by the
Florida Department of Revenue.
f. The only additional charges to which a
Licensee shall be subject are reoccurring maintenance fees and
special assessments pursuant to the Plan, property taxes, and
exchange membership fees.
3. Status of Title Underlying Each Resort/Component
Site
Title to the Resort Facility and title to the Common
Amenities is vested in the Developer. Title to the property is
free and clear, subject to a utility easement as recorded in
Official Records Book 435, at Page ___ of the Public Records of
Pinnelas County, Florida.
A nondisturbance and Notice to Creditors, in the form
attached as Exhibit "A21" to this Public Offering Statement, will
be filed in the Public Records of Pinnelas County, Florida,
setting forth the legal description of the Resort Facility. Such
Nondisturbance and Notice shall be effective as to all persons,
firms or entities acquiring rights or claims against the Resort
Facility and shall notify all persons, firms and entities that
such property has been dedicated for use by Licensees in the
Resort Facility, as well as Licensees in all Member Resort
Facilities. All persons, firms or entities acquiring rights in
the Resort Facility or the Common Amenities, subsequent to the
date of such notice, shall be specifically subject to all terms,
conditions and provisions of the Vacation License Plan relating
to such Common Amenities.
Other than as set forth above, there are no other
liens, defects, judgments or other encumbrances affecting title
to the Resort Facility or Common Amenities.
4. Restrictions Upon Rental or Resale
There are restrictions upon the sale, lease or transfer
of time share periods.
UNLESS PURCHASING AS A SECURITY UNDER THE SECURITIES
LAWS, THE PURCHASE OF A TIME SHARE PERIOD SHOULD BE BASED UPON
ITS VALUE AS A VACATION EXPERIENCE OR FOR SPENDING LEISURE TIME,
AND NOT CONSIDERED FOR PURPOSES OF ACQUIRING AN APPRECIATING
INVESTMENT OR WITH AN EXPECTATION THAT THE TIME SHARE PERIOD MAY
BE RESOLD.
Provided that a Licensee is not in default of any
provision of this Vacation License Plan or the License, such
Licensee shall be permitted to sell, transfer or convey such
Licensee's entire Interest and the License without the consent of
the Developer or the Managing Entity, provided (a) that the
entire purchase price and License Fee has been paid in full, (b)
all Assessments are current, (c) the transferee executes such
assumption documents required by the Seller, (d) the transfer,
sale, or conveyance complies with the federal and state
securities laws.
After such permitted transfer, sale or conveyance, the
transferring Licensee shall have no further liability for Common
Expenses under this Plan. Provided that a Licensee is not in
default of any provision of this Vacation Plan or the License,
such Licensee may also sell, transfer, or convey partial
Interests (a right to a certain Unit Week) but only with the
prior written consent of the Managing Entity. The Managing
Entity shall be permitted to impose such conditions as the
Managing Entity determines necessary in its sole discretion in
connection with transfers of partial Interests. With respect to
any permitted transfer, prior to such transfer, the name, address
and such other information as requested by the Managing Entity
shall be delivered to the Managing Entity.
5. Special Risk Factors
a. The future value of timeshare interests is
very uncertain; do not count on appreciation.
b. Resale of your interest or Unit Weeks may be
subject to the Developer's paying the cost of the Interest. You
should check your contract for such restrictions and also note
whether your contract or any other obligation would affect your
right to sell your Interest.
c. You should consider the competition which you
may experience from the Developer in attempting to resell your
interest and the possibility that real estate brokers may not be
interested in listing your Interest or Unit.
H. EXCHANGE PROGRAM OPPORTUNITIES
The Developer has entered into an Agreement with RCI'
for the purpose of providing a reciprocal exchange program. The
Licensee should note that all representations concerning the
exchange program are solely those of RCI' and not those of the
Developer and, further, that RCI' is an independent company not
affiliated or connected with the Developer in any way. Developer
has agreed to pay to RCI', on behalf of Licensee, the first
year's exchange membership dues. All future membership or
exchange dues assessed by RCI' shall be the sole responsibility
of Licensee. The participation by Licensee in the exchange
program is voluntary on the part of Licensee.
Licensees may enroll in RCI Travel's Vacation Exchange
Program, upon payment of membership fees to RCI Travel. Upon
subscription, the Company intends to pay the costs of a
Licensee's one year subscription in RCI Travel. RCI Travel's
Vacation Exchange Program allows members to deposit a week or
more of vacation time at the Charthouse Suites hotel and request
an exchange for a week or weeks at another participating resort
located around the world. Under the RCI program, a Licensee
deposits a week at the Charthouse Suites hotel, up to 24 months
in advance, and then requests an exchange from one of the
approximately 2,800 RCI affiliated resorts around the world.
Under this program a Licensee may exchange weeks, whether or not
the deposited Charthouse Suites hotel weeks are used by another
RCI member. RCI Travel's Vacation Exchange Program provides the
opportunity to save vacation time and use the banked weeks up to
two years after the scheduled start date or, if desired, up to
one year prior to the scheduled start date. As of the date of
this Prospectus, the cost of membership in RCI Travel was $67 for
one year, $123 for two years, $181 for three years and $285 for
five years. In addition, RCI charges a $93 exchange fee ($123
for international exchanges) for each week deposited into the RCI
Travel's Vacation Exchange Program. Under the terms of the RCI
Travel's Vacation Exchange Program, a Licensee must have paid his
or her annual dues and license payment to Charthouse associated
with the deposited week in order to utilize RCI's Vacation
Exchange Program. RCI Travel's Vacation Exchange Program is not
affiliated with the Company or any affiliate of the company. The
Company assumes no liability or responsibility to RCI's program
or performance.
If a Licensee becomes a member of RCI Travel, that
Licensee, subject to certain terms established by RCI Travel,
will have the opportunity to enjoy extra vacation time at RCI
affiliated resorts at a low cost ($39 as of the date of this
Prospectus) without exchanging a vacation week at the Charthouse
or may participate in discount programs on leisure travel,
including airfares, rental cars, cruises and hotels.
I. SERVICE, MAINTENANCE OR RECREATIONAL CONTRACTS OR
LEASES THAT MAY BE CANCELED BY LICENSEES
Presently, there are no service, maintenance or
recreational contracts or leases that may be canceled by
Licensees, however, this shall not preclude the Developer or
Charthouse Suites Vacation Ownership, Inc. from entering into
such contracts at a future time.
J. NAME OF THE PERSON WHO WILL OR MAY HAVE THE RIGHT TO
ALTER, AMEND OR ADD TO THE CHARGES WHICH THE LICENSEE
MAY BE SUBJECT AND THE TERMS AND CONDITIONS UNDER WHICH
SUCH ALTERATIONS, AMENDMENTS OR ADDITIONS MAY BE
IMPOSED
The Developer, its successors and assigns may have the
right to alter, amend or add to the charges to which Licensee may
be subject. Such right will exist if additional Common Amenities
are added pursuant to the terms of the Plan. The addition of
additional Common Amenities may increase a Licensee's maintenance
expenses. A Licensee's expense may also be increased if property
taxes increase pursuant to reoccurring appraisal and assessment
of the property. Exchange membership fees to which the Licensee
may be subject may increase pursuant to the terms and conditions
of the separate exchange membership agreement executed between
the Licensee and the exchange company. For a more complete
description of the terms under which the Developer may alter,
amend or add to the charges to which a Licensee may be subject
and the terms and conditions under which such alterations,
amendments, or additions may be imposed, please refer to Articles
II, III, IV, and VII of the Vacation License Plan attached as
Exhibit "A19" to this Public Offering Statement.
K. PROVISIONS FOR ALTERATIONS OF UNITS BY DEVELOPER
There are no provisions for alterations of Units by
Developer.
L. AMENDMENTS TO THE TIME SHARING PLAN
1. So long as the Developer has a right to appoint
all officers and directors of the Board, as provided for in the
Plan, any Amendments may be made by the Developer alone, which
Amendment shall be signed by the Developer and need not be joined
in by any other party (including, but not limited to, the right
to alter the boundaries of the Common Amenities), provided,
however, that such Amendment shall not materially and adversely
affect any Licensee's property rights.
2. Except for a Developer's Amendment, as provided
for herein, the Plan may be amended only by the consent of a
majority of all Licensees of the Resort Facility. Except for an
Amendment made by the Developer, pursuant to the terms hereof, no
Amendment of the Plan shall change the configuration or size of
any Unit in any material fashion or materially alter or modify
the appurtenances to such Unit, unless all of the record
Licensees of the time share license affecting such Unit and all
of the Preferred Lenders of record holding Security Agreement on
said time share license shall consent in writing thereto. Any
such amendment shall be voted on at a special meeting of the
affected Licensees and their consent thereto shall be evidenced
by a certificate joined in and executed by such Licensees and all
affected Preferred Lenders and recorded in the same manner as an
amendment provided in paragraph A of Article XIV of the Vacation
License Plan.
M. LIEN ON TIME SHARE LICENSES TO SECURE ASSESSMENTS
THERE IS A LIEN OR LIEN RIGHT AGAINST EACH TIME SHARE
PERIOD TO SECURE THE PAYMENT OF ASSESSMENTS OR OTHER EXACTIONS
COMING DUE FOR THE USE, MAINTENANCE, UPKEEP OR REPAIR OF THE
RECREATIONAL OR COMMONLY USED FACILITIES. A LICENSEE'S FAILURE
TO MAKE THESE PAYMENTS MAY RESULT IN CANCELLATION OF THE LICENSE.
For a more complete description of the terms and
conditions under which liens may be imposed, please refer to the
Vacation License Plan attached as Exhibit "A" to this Public
Offering Statement.
N. AD VALOREM TAXES
Failure by some time share license Licensees to pay ad
valorem taxes may result in additional financial burdens for
those who have paid their taxes in order to prevent a tax
certificate being sold against the entire time share unit.
O. GUARANTEED RENTAL ARRANGEMENT
The following is condensed information concerning the
Guaranteed Rental Arrangement by Charthouse. Reference to the
provisions of the Guaranteed Rental Arrangement are qualified in
their entirety by reference to the text of the Payment and
Guarantee Agreement, a form of which has been filed as an exhibit
to the Public Offering Statement.
General
The Company guarantees that Licensees who purchase an
Interest by [6 months after the Effective Date of the Public
Offering Statement] will receive the right to put six weeks of
their Charthouse Suites hotel use to the Company and receive the
applicable Guaranteed Rental Rate (hereafter "Guaranteed Rates").
Under the terms of the Guaranteed Rental Arrangement, the
Licensees put right must be exercised by [five years after the
Effective Date of the Public Offering Statement] and is subject
to certain terms and conditions. Licensees who purchase between
[6 months & 1 day and 9 months after the Effective Date of the
Public Offering Statement] will receive the right to put four
weeks over the life of the Interests to the Company and receive
the Guaranteed Rates, subject to the terms and conditions of the
Guaranteed Rental Arrangement. Licensees who purchase between [9
months & 1 day and one year after the Effective Date of the
Registration Statement] will have the right to put two weeks over
the life of the Interests to the Company and receive the
Guaranteed Rates, subject to the terms and conditions of the
Guaranteed Rental Arrangement. Licensees purchasing after [one
year of the Effective Date] will not be able to participate in
the Guaranteed Rental Arrangement.
Guaranteed Rates
The Company agrees to pay the following rates under the
Guaranteed Rental Arrangement. These rates are the off-season
walk-in rates (as of the date of the Prospectus):
Guaranteed Rate Total
(Assuming Six Weeks)
A-Standard Studio $ 65.00 per night $2,730
B-King Studio $ 75.00 per night $3,150
C-Studio $ 85.00 per night $4,410
D-1 Bedroom $120.00 per night $5,040
E-1 Bedroom $130.00 per night $5,460
F-Penthouse $175.00 per night $7,350
Licensees should not assume that the Charthouse rental pool
will generate such rates, as the rental pool could return higher
or lower rates, due to among other things, discounts, corporate
rental rates, the 5% rental agent charge, and seasonality.
Terms and Conditions of Guaranteed Rental Arrangement
The Guaranteed Rental Arrangement is subject to the
following terms and conditions:
(1) Licensees must give the Company at least 30 days
written notice of their intent to put the weeks pursuant to the
Guaranteed Rental Arrangement. Thereafter, the Licensee may not
withdraw the "put" weeks without the consent of the Company.
(2) The Licensees must put entire weeks to the Company.
(3) The Company will have the exclusive right to use,
exchange, or rent the suite for the designated weeks and may
collect and retain all revenue arising therefrom.
(4) Subject to the Company's waiving such condition, no
more than 5 suites may be put to the Company from all Licensees
in any one week. In case more than 5 suites are put to the
Company, the Company will accept put requests in the order in
which written requests are received. Licensees whose put rights
are not accepted will be notified within one week of receipt of a
letter request.
(5) All puts must be exercised by [five years after
Effective Date].
(6) There must be no action threatened, pending or taken,
which makes the rental pool or the Guaranteed Rental Arrangement,
unlawful or otherwise restricts or prohibits the ability of
Charthouse to use the suite.
(7) Under the terms of the property management agreement,
the rental management fee of 5% will be waived for amounts
received and all amounts shown above are exclusive of the rental
management fee.
(8) Licensees must elect whether to accept the Rental
Guarantee or the cash surrender value (described below at the
time of subscription to purchase the Interests).
Cash Surrender Value
The Guaranteed Rental Arrangement allows Licensees to elect
to receive cash to be used as payment towards the subscription at
the time of subscription instead of utilizing the Guaranteed
Rental Arrangement. Under the terms of the Guaranteed Rental
Arrangement, Licensees who purchase in the period between
[Effective Date] and [6 months after Effective Date] may elect to
receive a 5% discount on the net Subscription Amount in lieu of
the Rental Guarantee Arrangement. Licensees who purchase between
[6 months & 1 day after the Effective Date and Nine Months after
the Effective Date] may elect to receive a 3% discount on the net
Subscription Amount in lieu of the Rental Guarantee Arrangement.
Licensees who purchase between [9 months & 1 day after Effective
Date and one year after Effective Date] may elect to receive a 1
1/2% discount on the net Subscription Amount in lieu of the Rental
Guarantee Arrangement.
Right to Amend
The Company reserves the right to amend the Guaranteed
Rental Arrangement, provided that any amendment does not reduce
the cash benefit to a Licensee.
P. TAX CONSIDERATIONS
The tax considerations of the purchase of an Interest
will depend on the nature and structure of the Company's
operations, on the particular circumstances of each Licensee, and
the then applicable federal tax principles. Moreover, taxes
other than federal income taxes, such as foreign, state and local
taxes, and federal estate and gift taxes, may affect a Licensee's
investment in an Interest. In addition, controversy and
uncertainty exist in many areas of the federal income tax law
which may affect the structure and operation of the Company and a
Licensee acquiring and holding an Interest.
PROSPECTIVE LICENSEES ARE URGED TO CONSULT, AND MUST DEPEND UPON,
THEIR OWN TAX ADVISERS WITH SPECIFIC REFERENCE TO THEIR OWN TAX
SITUATIONS AND POTENTIAL CHANGES IN APPLICABLE LAW, INCLUDING THE
APPLICATION OF STATE AND LOCAL, FOREIGN AND OTHER TAX
CONSIDERATIONS.
<PAGE>
ANNEX D
SUBSCRIPTION AGREEMENT
SUBSCRIPTION AND PURCHASE AGREEMENT
FOR CHARTHOUSE SUITES VACATION
INVESTMENT AND OWNERSHIP INTERESTS
This Agreement is made on the date set forth below by and
between Charthouse Suites Vacation Ownership, Inc., a Florida
corporation, hereinafter referred to as "Charthouse," whose
executive office address is 250 Patrick Boulevard, Brookfield,
Wisconsin 53045, and the undersigned buyer(s), hereinafter
referred to as "Purchaser":
Name of Purchaser and Principal Contact (See paragraph 3 of the
attached terms and conditions):
________________________________________________
Purchaser _____________________________________
(sign)
Name of Purchaser _____________________________
(written or typed)
Address _______________________________________
City, State ___________________________________
Zip ___________________________________________
Telephone (Day) _______________________________
Telephone (Night) _____________________________
Fax No. _______________________________________
Social Security Number or
Tax Identification Number* ____________________
________________________________________________
________________________________________________
Purchaser
(If more than one) ____________________________
(sign)
Name of Purchaser _____________________________
(written or typed)
Address _______________________________________
City, State ___________________________________
Zip ___________________________________________
Telephone (Day) _______________________________
Telephone (Night) _____________________________
Fax No. _______________________________________
Social Security Number or
Tax Identification Number* ____________________
________________________________________________
* Under penalties of perjury, the Purchaser certifies (1) that
the number shown as his or her taxpayer identification number or
Social Security number is his or her correct taxpayer
identification number and (2) that he or she is not subject to
backup withholding either because he or she had not been notified
that he or she is subject to backup withholding as a result of a
failure to report all interest and dividends or because the
Internal Revenue Service has notified him or her that he or she
is no longer subject to backup withholding.
Title to be Held
____ Individual ____ Partnership ____ Joint Tenants With
Right of Survivorship
____ Corporation ____ Trust ____ Tenants in Common
____ Other: ______________________ ____ Marital Survivorship
Property
Class of Interest and Purchase Price (Check one or more):
A (Standard Studio Suite $17,000) _____
B (King Studio Suite $20,000) _____
C (Large Studio Suite $26,500) _____
D (1 Bedroom Suite $36,500) _____
E (1 Bedroom Suite with Lanai $39,500) _____
F (Penthouse $61,000) _____
Weeks Selected (Must be 2 consecutive weeks):
First Choice:
Winter ___________ Spring ________
Summer ___________ Fall __________
Second Choice:
Winter ___________ Spring ________
Summer ___________ Fall __________
Third Choice:
Winter ___________ Spring ________
Summer ___________ Fall __________
Total Purchase Price. Purchaser agrees to pay the total
purchase price for the Charthouse Suites Vacation Investment and
Ownership Interest ("Interest") in Charthouse as follows:
a. Purchase Price of Interest
(from above) $_____
b. If applicable, Cash Discount
Applied as part of Down Payment $_____
c. Net Purchase Price $_____
d. Total Minimum Down Payment Due --
25% of Net Balance $_____
e. Florida State Taxes Due on
Subscription ($.70 per $100 of
Net Purchase Price) $_____
f. Florida State Documentary Taxes
(If Paying by Installments and
the Subscription Agreement is
Signed in Florida) ($.35 of Net
Purchase Price) $_____
g. Total Due Upon Subscription
(Total of lines d, e, f) $_____
h. Total Remaining Owned for Interests $_____
Purchaser's total obligation includes the purchase price of the
Interest and Annual Dues (and special assessments, if any). Upon
acceptance of the subscription, Charthouse will send a letter
setting forth dates and amounts for annual due payments and, if
the Purchase pays on an installment basis, the amount of monthly
payments. In the year of closing, Purchaser shall be responsible
for the prorated portion of the Annual Dues based upon the actual
closing date. For purposes of compliance with the Real Estate
Settlement Procedures Act and regulations promulgated thereunder,
the following constitutes Charthouse's GOOD FAITH ESTIMATE of
closing costs to be paid by Purchaser, exclusive of state taxes,
at closing: $0.00.
If purchase of the above described property is being financed by
the Seller, Licensee hereby acknowledges receipt of the following
Truth-In Lending Disclosure. The Interests have an annual
percentage cost of 9%.
Net Worth and Other Tests. The undersigned acknowledges
receipt of the prospectus and the Florida Time-Share Public
Offering Statement and understands that all license payments for
the Interests and Annual Dues (including Special Assessments)
payments must be made on a timely basis. The undersigned also
acknowledges that he has sufficient resources to pay all amounts
and no need for liquidity in the Interest and understands that a
purchase of an Interest involves risks including the loss of all
amounts paid, and that he or she has the following net worth
(exclusive of home, home furnishings and automobiles) (check
one):
__________ (under $30,000)
__________ ($30,001 to $50,000)
__________ ($50,001 to $100,000)
__________ (more than $100,000)
The undersigned also acknowledges that he is in a financial
position to realize the benefits and net worth to sustain risks
inherent in the purchase of an Interest.
Name of Soliciting Dealer Selling Interest ______________________
Address ____________________________________________________
Telephone Number ___________________________________________
Name of Registered Representative _______________________________
(signature)
Name of Registered Representative _______________________________
(written or typed)
Soliciting Dealer Authorized Signature __________________________
CHARTHOUSE SUITES VACATION OWNERSHIP, INC.,
a Florida corporation
By: _____________________________
As its: _________________________
Date: ___________________________
Weeks Accepted: Winter _______ Spring ________
Summer _______ Fall __________
If acquiring the Charthouse Suites Vacation Investment and
Ownership Interest(s) in the appropriate time period (within one
year of the initial prospectus date) and qualifying for the
Guaranteed Rental Arrangement, the Purchaser elects the
following: (select one)
__________ Guaranteed Rental Arrangement Payments
(Right to Put Weeks to Charthouse for a
guaranteed rate)
__________ Cash Discount (Applied to Purchase
Price)
ADDITIONAL TERMS TO THE SUBSCRIPTION AGREEMENT
1. Ownership Interest Purchased. Purchaser hereby agrees
to purchase and Charthouse hereby agrees to sell to Purchaser an
Interest in Charthouse more fully described in the Charthouse
Suites Vacation License Plan and the prospectus. The Interest is
not a right to an equity or ownership interest in Charthouse.
2. Owner of the Underlying Fee. The "owner of the
underlying fee" is Decade Properties, Inc., a Wisconsin
corporation, whose address is 250 Patrick Avenue, Brookfield,
Wisconsin, 53045. Decade Properties, Inc. has entered into a
Master License Agreement with Charthouse whereby Charthouse has
acquired the right to sell Interests in the Charthouse Hotel.
3. Charthouse Suites Vacation Investment and Ownership
Interests. As more specifically described in the prospectus and
the Charthouse Suites Vacation License Plan, the Charthouse hotel
is subject to a license plan known as the Charthouse Suites
Vacation License Plan ("Charthouse Plan"). Pursuant to the
Charthouse Plan, holder will acquire no legal or beneficial
interest in the Charthouse hotel, marina or any affiliates of
Charthouse and agrees to abide by and be subject to the terms and
conditions of the Charthouse Plan.
By Purchaser's execution of this Agreement, Purchaser
further agrees to abide by the rules, regulations and
restrictions imposed upon Purchaser by the Agreement, as the same
may be amended from time to time, a copy of which is attached
hereto as Exhibit B of the prospectus. By execution of this
Agreement, Purchaser also hereby designates the person set forth
above as Purchaser's Principal Contact for purposes of receiving
notices on behalf of Purchaser. Purchaser hereby appoints
Purchaser's Principal Contact and all successors thereto as
Purchaser's agent and attorney in-fact for the purposes set forth
herein.
4. License Payments. If Purchaser cannot pay the entire
subscription price, Purchaser agrees to cooperate with all
reasonable requests made by Charthouse in connection with
evaluating Purchaser's ability to pay license payments on an
installment basis, and Purchaser shall furnish to Charthouse upon
request such financial information as Charthouse may from time to
time reasonably request.
5. Furnishings. The suites will have furniture,
appliances, equipment and accent furnishings substantially
similar or of equal quality to those shown in the model and on
the plans and specifications. Since the models and the materials
are for display purposes only, Charthouse reserves the right to
make substitutions, in its sole discretion, of material of equal
or better quality, as determined in its sole discretion.
6. Purchaser's Default. Upon Purchaser's default or
breach of any term or condition of this Agreement, all sums paid
hereunder by Purchaser shall be retained by Charthouse as
liquidated and agreed damages, and not as a penalty, and the
parties hereto shall be relieved from all obligations hereunder.
The parties agree that the damages that may result from a breach
of this Agreement are uncertain and difficult to ascertain, and
that the agreed upon amount is a reasonable estimate of probable
damages. In connection with any litigation arising out of this
Agreement, Charthouse or its affiliates shall be entitled to
recover all costs incurred, including reasonable attorneys' fees,
through and including all appellate levels.
7. Charthouse's Election to Cancel. As set forth in the
Charthouse Plan, Charthouse reserves the right to terminate this
Agreement by refunding amounts paid hereunder less certain
amounts received by a purchaser (including benefits associated
with the use under the Charthouse Plan) if Charthouse does not
sell 76 Interests by December 31, 1997. All notices herein
required shall be in writing and shall be served on the parties
at the address following their names. The mailing of a notice by
mail, shall be sufficient notice.
8. Closing and Title Except as Set Forth in the Charthouse
Plan. Charthouse warrants that title to the Interest is free and
clear of all encumbrances except taxes and assessments for the
year of closing. The closing will be at such time and place as
shall be specified by Charthouse or by mail, if authorized by
Charthouse. Purchaser, on or prior to closing, shall execute any
necessary documents.
9. Modifications and Changes. Charthouse reserves the
right to make changes in the proposed documents and modifications
to the organizational documents, including the Charthouse Plan
and specifications as may be necessary to conform to applicable
government requirements or to expedite the sale of Interests;
provided, however, that any such amendments, additions, or
changes shall not adversely diminish the Interest of or increase
any obligations of Purchaser to any material degree. Purchaser
agrees that any amendments, additions, or changes so made shall
be at the discretion of Charthouse.
10. Deposit. Purchaser is entitled to a receipt for the
deposit upon request. In the event Purchaser cancels this
Agreement during the 10-day cancellation period, Charthouse will
refund to the Purchaser the total amount of all payments made by
the Purchaser under the Agreement, reduced by the proportion of
any contract benefits the Purchaser has actually received under
the Agreement, if any, prior to the effective date of
cancellation; however, in no event shall the failure to return a
prospectus be deemed a contract benefit. The refund shall be
made within twenty (20) days after receipt of notice of
cancellation, or within five (5) days after receipt of funds from
the Purchaser's cleared check, whichever is later. Any interest
generated by the funds deposited in any account shall be paid to
and retained by Charthouse.
11. Annual Dues. Purchaser understands and agrees that in
accordance with the rules and regulations of Charthouse,
Purchaser will be responsible for Purchaser's share of any and
all expenses incurred in the operation of Charthouse, including
special assessments, if any. The estimated Annual Dues are set
forth in the prospectus. Annual Dues will be prorated over the
calendar year in the year of closing based upon the actual
closing date and must be paid in accordance with the Schedule set
forth in the Vacation Plan and Exhibit 1.
12. Agreement. Except as set forth herein, this Agreement
may not be modified or amended except by a writing signed by both
Purchaser and Charthouse. All the terms and provisions of this
Agreement shall survive the closing. Time is of the essence
hereunder, particularly where the obligation to pay money is
concerned. If this Agreement is executed outside of the sales
office of Charthouse located in Brookfield, Wisconsin, it shall
constitute an offer by Purchaser to Charthouse, and shall in all
events be subject to acceptance by Charthouse in Charthouse's
discretion at Charthouse's offices in Brookfield, Wisconsin.
Purchaser authorizes Charthouse or its authorized agent
to insert or change Unit numbers wherever necessary to conform
with the Vacation Plan and to make any changes, insertions or
deletions in this Agreement; provided, however, that any changes
in such documents shall be of an administrative nature only and
shall not materially or adversely alter the reasonable
expectations of Purchaser without Purchaser's consent first being
given in writing.
13. Exchange Program. Pursuant to an agreement, Charthouse
has become a "corporate participant" of Resort Condominiums
International, Inc. ("RCI [registered trademark]"), an Indiana
corporation, whose address is One RCI Plaza, 3502 Woodview Trace,
P.O. Box 80229, Indianapolis, Indiana 46280-0229. This
RCI [registered trademark] agreement presently allows club
members to exchange to other RCI [registered trademark] resorts.
During the term of the agreement, Charthouse may at any time and
from time to time enter into an agreement with other providers of
alternative vacation experiences. The RCI [registered trademark]
agreement is for a five year term. Charthouse has the option, at
its election, to extend the term of the RCI [registered
trademark] agreement for up to two additional five (5) year
terms. Charthouse makes no commitment to extend or to renew the
RCI [registered trademark] agreement for any particular length of
time. Neither Charthouse nor RCI [registered trademark] is
obligated to renew the agreement. Upon termination or expiration
of the RCI [registered trademark] agreement, Charthouse, in its
sole discretion, may enter into another agreement of short or
long duration with RCI [registered trademark] or with another
provider of exchange services so that members will have the
opportunity to avail themselves of alternative vacation
opportunities through the duration of Charthouse Plan. There can
be no assurance, however, that Charthouse will be successful in
doing so. Under such circumstances, members may contact
RCI [registered trademark] or another provider of exchange
services directly to establish individual exchange privileges.
There can be no assurance, however, that an individual club
member will be able to satisfy the terms and conditions then
required by RCI [registered trademark] or another provider of
exchange services to participate individually in the
RCI [registered trademark] or other exchange program. If neither
Charthouse nor the individual member is successful in
establishing an agreement with RCI [registered trademark] or
another provider of exchange services, the ability of an
individual club member to request future exchanges outside of the
Charthouse Plan will cease. Charthouse makes no representations
regarding any exchange company or other provider of alternative
vacation experiences, and any and all representations set forth
within the brochures and other literature and documents of an
exchange company or such other provider are the sole
representations of such exchange company or other provider.
14. Charthouse's Representations. Charthouse represents
that the use of the accommodations and facilities of the
Charthouse suites hotel is limited solely to the personal use of
the Purchaser, his approved guests, invitees, exchangers and
renters and for authorized uses by corporations or other similar
entities owning Interests. Purchase and use of Ownership
Interests for commercial purposes is expressly prohibited. This
Agreement contains the entire understanding between the
PurchaserS and Charthouse relating to the purchase and sale of
the Interest described herein. PURCHASERS SHOULD ALSO
UNDERSTAND, HOWEVER, THAT SINCE THERE CAN BE NO ASSURANCE AS TO
THIS FEDERAL INCOME TAX TREATMENT, AS WELL AS THE FACT THAT
ACTUAL TAX RESULTS WILL DEPEND UPON A PURCHASER'S PARTICULAR
CIRCUMSTANCES (INCLUDING, AMONG OTHER FACTORS, WHETHER OR NOT THE
PURCHASER ITEMIZES DEDUCTIONS ON THE PURCHASER'S FEDERAL INCOME
TAX RETURN OR WHETHER THE PURCHASER ALREADY OWNS AN EXISTING
VACATION HOME), CHARTHOUSE MAKES NO REPRESENTATIONS AS TO THE
INCOME TAX CONSEQUENCES OF THE PURCHASE, USE OR EXCHANGE OF ANY
INTEREST AND RELATED RIGHTS AND APPURTENANCES OR AS TO THE
DEDUCTIBILITY OF RELATED EXPENSES SUCH AS INTEREST, TAXES AND
DEPRECIATION. EACH PURCHASER SHOULD CONSULT HIS OWN TAX ADVISOR
AS TO THESE ISSUES. AN INTEREST SHOULD NOT BE PURCHASED IN
RELIANCE UPON ANY PARTICULAR KIND OF TAX CONSEQUENCES.
15. Purchaser's Representations. Purchaser represents that
Purchaser is not purchasing an Interest with the intent or desire
to become a legal domiciliary of the State of Florida or any
political subdivision thereof, and Purchaser hereby waives,
releases and remises any such intent or desire. Purchaser also
represents that the Interest is not intended to be and shall not
at any time become the Purchaser'S principal dwelling, which
Purchaser shall maintain at all times in another location.
Purchaser also represents to Charthouse and the title insurer, if
any, that Purchaser has full authority and capacity to enter into
this Agreement in the manner set forth on the first page hereof.
Purchaser further understands that Charthouse is under no
obligation to associate any additional resorts with Charthouse
Plan. It is the express intent of the parties that the terms of
this paragraph shall survive the closing of this Agreement.
16. Radon Gas. Radon is a naturally occurring radioactive
gas that, when it has accumulated in a building in sufficient
quantities, may present health risks to persons who are exposed
to it over time. Levels of radon that exceed federal and state
guidelines have been found in buildings in Florida. Additional
information regarding radon and radon testing may be obtained
from your county public health unit.
17. Warranty Limitation. EXCEPT FOR THOSE WARRANTIES
REQUIRED BY CHAPTER 714, FLORIDA STATUTES, CHARTHOUSE MAKES NO
WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, AND CHARTHOUSE HEREBY
DISCLAIMS ANY AND ALL WARRANTIES, INCLUDING BUT NOT LIMITED TO
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, WITH RESPECT TO THE CONSTRUCTION OF THE UNITS
AND THE COMMON ELEMENTS AND WITH RESPECT TO THE PERSONAL PROPERTY
LOCATED WITHIN THE UNITS OR ON THE PROPERTY, AND THE INTEREST
HOLDERS ASSUME ALL RISK AND LIABILITY RESULTING FROM THE USE OF
THIS PROPERTY.
18. Governing Law and Severability. THIS AGREEMENT SHALL
BE GOVERNED UNDER AND INTERPRETED AND ENFORCED IN ACCORDANCE WITH
THE INTERNAL LAWS OF THE STATE OF WISCONSIN. THE PARTIES HEREBY
WAIVE ANY RIGHT THEY MAY HAVE UNDER ANY APPLICABLE LAW TO A TRIAL
BY JURY WITH RESPECT TO ANY SUIT OR LEGAL ACTION WHICH MAY BE
COMMENCED BY OR AGAINST ANOTHER PARTY CONCERNING THE
INTERPRETATION, CONSTRUCTION, VALIDITY, ENFORCEMENT OR
PERFORMANCE OF THIS AGREEMENT OR ANY OTHER AGREEMENT OR
INSTRUMENT EXECUTED IN CONNECTION WITH THIS AGREEMENT. Wherever
possible, each provision of this Agreement shall be interpreted
in such a manner as to be effective and valid under applicable
law, but if any provision of this Agreement shall be prohibited
by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
19. Rental Pool. The undersigned agrees that Charthouse
may forward the rental proceeds, if any, on a quarterly basis to
the address shown on its records. Charthouse may amend the terms
of the Rental Pool upon a vote of all Unit Weeks outstanding.
20. YOU MAY CANCEL THIS AGREEMENT WITHOUT ANY PENALTY OR
OBLIGATION WITHIN TEN (10) DAYS FROM THE DATE YOU SIGN THE
CONTRACT, AND UNTIL TEN (10) DAYS AFTER YOU RECEIVE THIS PUBLIC
OFFERING STATEMENT, WHICHEVER IS LATER.
IF YOU DECIDE TO CANCEL THE CONTRACT, YOU MUST NOTIFY CHARTHOUSE
IN WRITING OF YOUR INTENT TO CANCEL. YOUR NOTICE OF CANCELLATION
SHALL BE EFFECTIVE UPON THE DATE SENT AND SHALL BE SENT TO:
CHARTHOUSE SUITES VACATION OWNERSHIP, INC., AT 250 PATRICK BLVD.,
SUITE 140, BROOKFIELD, WI 53045. ANY ATTEMPT TO OBTAIN A WAIVER
OF YOUR CANCELLATION RIGHTS IS UNLAWFUL. WHILE YOU MAY EXECUTE
ALL CLOSING DOCUMENTS IN ADVANCE, THE CLOSING, AS EVIDENCED BY
DELIVERY OF THE DEED OR OTHER DOCUMENT, BEFORE EXPIRATION OF YOUR
TEN (10) DAY CANCELLATION PERIOD, IS PROHIBITED.
YOU MAY ALSO CANCEL THIS CONTRACT AT ANY TIME AFTER THE
ACCOMMODATIONS OR FACILITIES ARE NO LONGER AVAILABLE AS PROVIDED
IN THIS CONTRACT AND THE PUBLIC OFFERING STATEMENT.
The following notice is taken substantially from 16 C.F.R.
433.2(b):
Notice
Any holder of this document is subject to all claims and
defenses which the debtor could assert against the seller of
goods and services (if any) obtained with the proceeds hereof.
Recovery hereunder by the debtor shall not exceed amounts paid by
the debtor hereunder.
Charthouse does not believe that applicable law requires the
above notice to be included in this document and reserves the
right not to include such notice in any future document from or
with any borrower.
<PAGE>
ANNEX E
SCHEDULE OF WEEKS
Each purchase of an Interest entitles the Holder to two
consecutive weeks for each season at the Charthouse Suites hotel.
Seasons as set forth in the Charthouse Suites Vacation License
Plan are defined as follows: Winter is weeks 46-52 and 1-6,
Spring is weeks 7-19, Summer is weeks 20-32 and Winter is weeks
33-45. As of the date of this prospectus, the occupancy period
for Holders begins and ends on Sundays. Pursuant to the
Charthouse Suites Vacation License Plan, weeks may begin with the
first Friday, Saturday or Sunday of each calendar year and the
Company shall establish the annual schedule. Occupancy shall
begin at 4:00 p.m. on the start day and cease at 10:00 a.m. on
that following same day of the next week. The tentative
schedules for 1996, 1997 and 1998 are contained in the following
tables. Interest Holders will obtain weeks in an order of
request and Company will strive to meet all the requests, but
there can be no assurances the requested weeks will be available.
Any unassigned weeks shall be rented, traded, and/or assigned at
the sole discretion of the Company.
<PAGE>
1996
Week Number Sunday to Sunday
1 Jan 7 - Jan 14
2 Jan 14 - Jan 21
3 Jan 21 - Jan 28
4 Jan 28 - Feb 4
5 Feb 4 - Feb 11
6 Feb 11 - Feb 18
7 Feb 18 - Feb 25
8 Feb 25 - Mar 3
9 Mar 3 - Mar 10
10 Mar 10 - Mar 17
11 Mar 17 - Mar 24
12 Mar 24 - Mar 31
13 Mar 31 - Apr 7
14 Apr 7 - Apr 14
15 Apr 14 - Apr 21
16 Apr 21 - Apr 28
17 Apr 28 - May 5
18 May 5 - May 12
19 May 12 - May 19
20 May 19 - May 26
21 May 26 - Jun 2
22 Jun 2 - Jun 9
23 Jun 9 - Jun 16
24 Jun 16 - Jun 23
25 Jun 23 - Jun 30
26 Jun 30 - Jul 7
27 Jul 7 - Jul 14
28 Jul 14 - Jul 21
29 Jul 21 - Jul 28
30 Jul 28 - Aug 4
31 Aug 4 - Aug 11
32 Aug 11 - Aug 18
33 Aug 18 - Aug 25
34 Aug 25 - Sep 1
35 Sep 1 - Sep 8
36 Sep 8 - Sep 15
37 Sep 15 - Sep 22
38 Sep 22 - Sep 29
39 Sep 29 - Oct 6
40 Oct 6 - Oct 13
41 Oct 13 - Oct 20
42 Oct 20 - Oct 27
43 Oct 27 - Nov 3
44 Nov 3 - Nov 10
45 Nov 10 - Nov 17
46 Nov 17 - Nov 24
47 Nov 24 - Dec 1
48 Dec 1 - Dec 8
49 Dec 8 - Dec 15
50 Dec 15 - Dec 22
51 Dec 22 - Dec 29
52 Dec 29 - Jan 5
53 --
<PAGE>
1997
Week Number Sunday to Sunday
1 Jan 5 - Jan 12
2 Jan 12 - Jan 19
3 Jan 19 - Jan 26
4 Jan 26 - Feb 2
5 Feb 2 - Feb 9
6 Feb 9 - Feb 16
7 Feb 16 - Feb 23
8 Feb 23 - Mar 2
9 Mar 2 - Mar 9
10 Mar 9 - Mar 16
11 Mar 16 - Mar 23
12 Mar 23 - Mar 30
13 Mar 30 - Apr 6
14 Apr 6 - Apr 13
15 Apr 13 - Apr 20
16 Apr 20 - Apr 27
17 Apr 27 - May 4
18 May 4 - May 11
19 May 11 - May 18
20 May 18 - May 25
21 May 25 - Jun 1
22 Jun 1 - Jun 8
23 Jun 8 - Jun 15
24 Jun 15 - Jun 22
25 Jun 22 - Jun 29
26 Jun 29 - Jul 6
27 Jul 6 - Jul 13
28 Jul 13 - Jul 20
29 Jul 20 - Jul 27
30 Jul 27 - Aug 3
31 Aug 3 - Aug 10
32 Aug 10 - Aug 17
33 Aug 17 - Aug 24
34 Aug 24 - Aug 31
35 Aug 31 - Sep 7
36 Sep 7 - Sep 14
37 Sep 14 - Sep 21
38 Sep 21 - Sep 28
39 Sep 28 - Oct 5
40 Oct 5 - Oct 12
41 Oct 12 - Oct 19
42 Oct 19 - Oct 26
43 Oct 26 - Nov 2
44 Nov 2 - Nov 9
45 Nov 9 - Nov 16
46 Nov 16 - Nov 23
47 Nov 23 - Nov 30
48 Nov 30 - Dec 7
49 Dec 7 - Dec 14
50 Dec 14 - Dec 21
51 Dec 21 - Dec 28
52 Dec 28 - Jan 4
53 --
<PAGE>
1998
Week Number Sunday to Sunday
1 Jan 4 - Jan 11
2 Jan 11 - Jan 18
3 Jan 18 - Jan 25
4 Jan 25 - Feb 1
5 Feb 1 - Feb 8
6 Feb 8 - Feb 15
7 Feb 15 - Feb 22
8 Feb 22 - Mar 1
9 Mar 1 - Mar 8
10 Mar 8 - Mar 15
11 Mar 15 - Mar 22
12 Mar 22 - Mar 29
13 Mar 29 - Apr 5
14 Apr 5 - Apr 12
15 Apr 12 - Apr 19
16 Apr 19 - Apr 26
17 Apr 26 - May 3
18 May 3 - May 10
19 May 10 - May 17
20 May 17 - May 24
21 May 24 - May 31
22 May 31 - Jun 7
23 Jun 7 - Jun 14
24 Jun 14 - Jun 21
25 Jun 21 - Jun 28
26 Jun 28 - Jul 5
27 Jul 5 - Jul 12
28 Jul 12 - Jul 19
29 Jul 19 - Jul 26
30 Jul 26 - Aug 2
31 Aug 2 - Aug 9
32 Aug 9 - Aug 16
33 Aug 16 - Aug 23
34 Aug 23 - Aug 30
35 Aug 30 - Sep 6
36 Sep 6 - Sep 13
37 Sep 13 - Sep 20
38 Sep 20 - Sep 27
39 Sep 27 - Oct 4
40 Oct 4 - Oct 11
41 Oct 11 - Oct 18
42 Oct 18 - Oct 25
43 Oct 25 - Nov 1
44 Nov 1 - Nov 8
45 Nov 8 - Nov 15
46 Nov 15 - Nov 22
47 Nov 22 - Nov 29
48 Nov 29 - Dec 6
49 Dec 6 - Dec 13
50 Dec 13 - Dec 20
51 Dec 20 - Dec 27
52 Dec 27 - Jan 3
53 --
<PAGE>
<TABLE>
<CAPTION>
CHARTHOUSE SUITES SCHEDULE OF WEEKS
A B C D E F
1 Bdrm 2 Bdrm
Standard Studio King Studio Large Studio 1 Bdrm Suite w/ Lanai Penthouse
Season Week 201 202301 202301 402 103 104105 106 206207 305306 101102 204403 404304 303307 205 203 405
<S> <S> <C> <C><C> <C><C> <C> <C> <C><C> <C> <C><C> <C><C> <C><C> <C><C> <C><C> <C><C> <C> <C> <C>
W 1
I 2 X X X
N 3
T 4 X X X X
E 5
R 6 X X X X
Ends
Approx.
Feb. 15
<S> <S> <C> <C><C> <C><C> <C> <C> <C><C> <C> <C><C> <C><C> <C><C> <C><C> <C><C> <C><C> <C> <C> <C>
S 7 X X X X
P 8
R 9 X X X X
I 10
N 11 X X X X
G 12
13 X X X X
14
Ends 15
Approx. 16
May 15 17 X X Z
18
19 X X X X
<S> <S> <C> <C><C> <C><C> <C> <C> <C><C> <C> <C><C> <C><C> <C><C> <C><C> <C><C> <C><C> <C> <C> <C>
S 20 X X X
U 21
M 22 X X X X
M 23
E 24 X X X X
R 25
26 X X X X
27
Ends 28 X X X
Approx. 29
Aug. 15 30 X X X
<S> <S> <C> <C><C> <C><C> <C> <C> <C><C> <C> <C><C> <C><C> <C><C> <C><C> <C><C> <C><C> <C> <C> <C>
31
32 X X X
F 33 X X X X
A 34
L 35 X X X
L 36
37 X X X
38
Ends 39 X X X X
Approx. 40
Nov. 15 41 X X X
42
43 X X X X
44
45 X X X X
<S> <S> <C> <C><C> <C><C> <C> <C> <C><C> <C> <C><C> <C><C> <C><C> <C><C> <C><C> <C><C> <C> <C> <C>
W 46 X X X
I 47
N 48 X X X X
T 49
E 50 X X X
R 51
52 X X X
Cont.
</TABLE>
<PAGE>
No person is authorized in connection with any Offering made
hereby to give any information or to make any representation not
contained in this Prospectus, an if given or made, such
information or representation must not be relied upon as have
been authorized by the Company or by any security other than the
Interests offered hereby, nor does it constitute an offer to sell
or a solicitation of an offer to buy any of the securities
offered hereby to any person in any jurisdiction in which it is
unlawful to make such an offer or solicitation to such person.
Neither the delivery of this Prospectus nor any sale made
hereunder shall under any circumstances create any implication
that the information contained herein is correct as of any date
subsequent to the date hereof.
______________
SUMMARY OF TABLE OF CONTENTS
Summary. . . . . . . . . . . . . . . . . . . . . . . . .1
Risk Factors . . . . . . . . . . . . . . . . . . . . . .7
The Company. . . . . . . . . . . . . . . . . . . . . . 10
Description of the Charthouse Suites Hotel . . . . . . 10
The Interests. . . . . . . . . . . . . . . . . . . . . 11
Guaranteed Rental Arrangement. . . . . . . . . . . . . 14
License Payment Options. . . . . . . . . . . . . . . . 16
Annual Dues. . . . . . . . . . . . . . . . . . . . . . 17
Determination of Offering Price. . . . . . . . . . . . 17
Use of Proceeds. . . . . . . . . . . . . . . . . . . . 18
Description of Master License Agreement. . . . . . . . 18
Plan of Distribution . . . . . . . . . . . . . . . . . 18
Summary of Promotional and Sales Material. . . . . . . 20
How to Subscribe . . . . . . . . . . . . . . . . . . . 20
Capitalization . . . . . . . . . . . . . . . . . . . . 20
Management's Discussion and Analysis of
Financial Condition. . . . . . . . . . . . . . . . . 20
Operation of Charthouse Suites Hotel . . . . . . . . . 21
Management . . . . . . . . . . . . . . . . . . . . . . 21
Interests of Management and Affiliates . . . . . . . . 23
Florida Regulations. . . . . . . . . . . . . . . . . . 23
Certain Federal Income Tax Considerations. . . . . . . 23
Liability and Indemnification of Officers
and Directors. . . . . . . . . . . . . . . . . . . . 33
Legal Matters. . . . . . . . . . . . . . . . . . . . . 33
Experts. . . . . . . . . . . . . . . . . . . . . . . . 34
Available Information. . . . . . . . . . . . . . . . . 34
Financial Statements and Related Information . . . . . 35
Annex A. . . . . . . . . . . . . . . . . . . . .Annex A-1
Annex B. . . . . . . . . . . . . . . . . . . . .Annex B-1
Annex C. . . . . . . . . . . . . . . . . . . . .Annex C-1
Annex D. . . . . . . . . . . . . . . . . . . . .Annex D-1
Annex E. . . . . . . . . . . . . . . . . . . . .Annex E-1
<PAGE>
CHARTHOUSE VACATION OWNERSHIP
150
Class A-F Interests
___________
PROSPECTUS
___________
_____________ ___, 1996
<PAGE>
PART II -- INFORMATION NOT REQUIRED IN PROSPECTUS
Item 30. Other Expenses of Issuance and Distributions
Set forth below is a current estimate of the approximate
amount of the fees and expenses (other than sales
commissions) payable by the Registrant in connection with
the issuance and distribution of the Interests:
Type of Fee Amount
Registration Fee $ 1,448
NASD Filing Fee 750
Florida Time Share Filing Fee 3,600
Printing and Engraving (estimate) 15,000
Legal Fees (estimate)
Accounting Fees (estimate)
Blue Sky Fees and Expense (estimate) 5,000
Miscellaneous Fees ______________
Total $
Item 31. Sales to Special Parties
None.
Item 32. Recent Sale of Unregistered Securities
None
Item 33. Indemnification of Directors and Officers
The Company's Officers and Directors are and will be
indemnified, to the fullest extent permitted under Florida
law, against certain liabilities pursuant to the Articles
and Bylaws of the Company, certain indemnification
agreements to be entered into with the Company, and the
Articles and Bylaws require the Company to indemnify the
Directors and Officers, among others, against claims and
liabilities and reasonable expenses actually incurred by
them in connection with any such claim or liability by
reason of their services in those or other capacities unless
it is established that the act or omission of the director
or officer was material to the matter giving rise to the
proceeding and was committed in bad faith or was the result
of active and deliberate dishonesty, or the director or
officer actually received an improper personal benefit, or
in the case of any criminal proceeding, the director or
officer had reasonable cause to believe that the act or
omission was unlawful.
The Company will enter into indemnification agreements
with each of the Company's officers and the directors. The
indemnification agreements will require, among other things,
that Charthouse indemnify its Directors and Officers to the
fullest extent permitted by law and advance to the officers
and director all related expenses, subject to reimbursement
if it is subsequently determined that indemnification is not
permitted. Under these agreements, Charthouse also must
indemnify and advance all expenses incurred by officers and
the directors seeking to enforce their rights under the
indemnification agreement, and cover officers and the
directors under the Company's liability insurance, if any.
Although the form of indemnification agreement offers
substantially the same scope of coverage afforded by
provisions in the Articles and Bylaws, it provides greater
assurance to the directors and officers that indemnification
will be available because, as a contract, it cannot be
modified unilaterally in the future by the directors or to
eliminate the rights it provides.
Insofar as indemnification for liabilities arising
under the Securities Act of 1933, as amended (the
"Securities Act"), may be permitted to directors or officers
or persons controlling the Company pursuant to the foregoing
provisions, the Company has been informed that in the
opinion of the Securities and Exchange Commission (the
"Commission") such indemnification is against public policy
as expressed in the Securities Act and is therefore
unenforceable.
Item 34. Treatment of Proceeds from Interests being Registered
Not Applicable.
Item 35. Financial Statements and Exhibits
A. Financial statements included in the Prospectus and
incorporated herein by reference to section titled
"FINANCIAL STATEMENTS AND RELATED INFORMATION."
B. Exhibits - see exhibit index on pages following
signature page of this registration statement which
index is incorporated herein by reference.
Item 36. Undertakings
(a) The Company hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the
registration statement (or the most recent post-
effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the
information set forth in the registration statement;
(iii) To include any material information with
respect to the plan of distribution not previously
disclosed in the registration statement or any material
change to such information in the registration
statement.
(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment
shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) That all post-effective amendments shall comply
with the applicable forms, rules and regulations of the
Commission in effect at the time such post-effective
amendments are filed.
(4) To remove from registration by means of a post-
effective amendment any of the Interests being registered
which remain unsold at the termination of the Offering.
(b) The Company undertakes to send to each Holder at least
on an annual basis a detailed statement of any transactions with
the Company and its affiliates, and of fees, commissions,
compensation and other benefits paid, or accrued to the Company
and its affiliates for the calendar year completed, showing the
amount paid or accrued to each recipient and the services
performed.
(c) The Company undertakes to provide to the Holders the
financial statements required by Form 10-K for the first full
fiscal year of operations of Company and to send to Holders,
within 45 days after the close of each quarterly fiscal period,
the information specified by the Form 10-Q, if such report is
required to be filed with the Commission.
(d) The Company undertakes to file a sticker supplement
pursuant to Rule 424(c) under the Act during the distribution
period describing each property not identified in the prospectus
at such time as there arises a reasonable probability that such
property will be acquired and to consolidate all such stickers
into a post-effective amendment filed at least once every three
months, with the information contained in such amendment provided
simultaneously to the existing Holders. Each sticker supplement
should disclose all compensation and fees received by the Company
and its affiliates in connection with any such acquisition. The
post-effective amendment shall include audited financial
statements meeting the requirements of Rule 3-14 of Regulation S-
X only for properties acquired during the distribution period.
(e) The Company also undertakes to file, after the end of
the distribution period, a current report on Form 8-K containing
the financial statements and any additional information required
by Rule 3-14 of Regulation S-X, to reflect each commitment (i.e.,
the signing of a binding purchase agreement) made after the end
of the distribution period involving the use of 10% or more (on a
cumulative basis) of the net proceeds of the Offering and to
provide the information contained in such report to the Holders
at least once each quarter after the distribution period of the
Offering has ended.
(f) Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to the Company and its
affiliates and controlling persons of Company pursuant to the
foregoing provisions, or otherwise, Company has been advised that
in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the even that a claim for
indemnification against such liabilities (other than the payment
by Company of expenses incurred or paid by a Company and its
affiliates or controlling person of the Company in the successful
defense of any action, suit or proceeding) is asserted by such
Company and its affiliate or controlling person in connection
with the securities being registered, Company will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-11 and has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized, the
City of Brookfield, State of Wisconsin, on October 4, 1996.
CHARTHOUSE SUITES VACATION
OWNERSHIP, INC.
By /s/ Jeffrey Keierleber
Jeffrey Keierleber
President and Sole Director
Pursuant to the requirements of the Securities Act of 1933
this registration statement has been signed by the following
persons in the capacities and on the dates indicated above.
/s/ Jeffrey L. Keierleber
Jeffrey Keierleber
President and Sole Director
/s/ Michael G. Sweet
Michael G. Sweet
Secretary
<PAGE>
CHARTHOUSE SUITES VACATION OWNERSHIP, INC.
* * * * *
EXHIBIT INDEX
TO
REGISTRATION STATEMENT ON FORM S-11
Sequentially
Exhibit Numbered
Number Description Page
1.1 Underwriting Agreement
1.2 Soliciting Dealer Agreement
3.1 Specimen of Certificates for Interests*
3.2 Charthouse Suites Vacation Ownership,
Inc. Articles of Incorporation
3.3 Charthouse Suites Vacation Ownership,
Inc. By-laws
4.1 Subscription and Purchase Agreement
(attached as an Annex)
4.2 Charthouse Suites Vacation License
Plan (attached as an Annex)
4.3 Charthouse Suites Rules and Regulations
(attached as an Annex)
4.4 Florida Time Share Public Offering
Statement (attached as an Annex)
5 Opinion re: Legality of Interests*
10.1 Property Management Agreement
10.2 Nondisturbance and Notice to Creditors
10.3 Guaranteed Rental Arrangement Agreement
10.4 Master License Agreement
10.5 RCI Agreement*
10.6 Schedule of Weeks (attached as an Annex)
10.7 Escrow Agreement between Associated
Bank Milwaukee and Charthouse Suites
Vacation Ownership, Inc.*
10.8 Non-Exclusive Easement
23.1 Consent of Ernst & Young*
23.2 Consent of Quarles & Brady*
*To be filed
<PAGE>
UNDERWRITING AGREEMENT
Decade Securities Corp.
250 Patrick Boulevard
Brookfield, WI 53045 ____________ , 1996
RE: Charthouse Suites Vacation Ownership, Inc. Offering of
Charthouse Suites Vacation Investment and Ownership
Interests
Ladies and Gentlemen:
Charthouse Vacation Ownership, Inc. (the "Company"), hereby
confirms prior negotiations with Decade Securities Corp.
regarding employment of the Company for the offering and sale to
selected persons acceptable to Company, upon the terms and
subject to the conditions set forth herein and in the Prospectus,
of up to 150 Charthouse Suites Vacation Investment and Ownership
Interests (the "Interests").
Decade Securities Corp. will hereinafter be called
"Underwriter" (whether or not Decade Securities Corp. engages
other Underwriter(s) or broker-dealer(s)).
As used in this Agreement, the following terms shall have
the following meanings:
1. Act -- The Securities Act of 1933, as amended.
2. Affiliate -- (a) Any person directly or indirectly
controlling, controlled by or under common control with another
person; (b) any person owning or controlling 10% or more of the
outstanding voting securities of such other person; (c) any
officer, director or partner of such person, and (d) if such
other person is an officer, director or partner, any enterprise
for which such person acts in any such capacity.
3. Affiliate Sale -- The sale of Interests to employees of
Decade Companies or an Affiliate which will be made net of the up
to 10% sales commission.
4. Blue Sky Application -- Any application, document,
information or other paper, executed by the Company and filed in
any State in order to register the Interests under the state's
securities laws.
5. Commission -- The Securities and Exchange Commission.
6. Effective Date -- The date upon which the Registration
Statement is declared effective by the Commission.
7. Interest -- The Charthouse Suites vacation investment
and ownership interest, whether Class A, B, C, D, E, or F,
offered for sale by the Company.
8. Holders -- All persons who purchase an Interest and who
agree to be bound by the provisions of the License Agreement, and
such other instruments as the Company may require, as well as any
assignee thereof.
9. NASD -- The National Association of Securities Dealers,
Inc. in Washington, D.C.
10. Company -- Decade Charthouse Vacation Ownership, Inc.,
a Florida corporation.
11. Prospectus -- The prospectus included in the
Registration Statement filed with the Commission, pursuant to
which the Company will offer Interests to the public, as the same
may be amended or supplemented from time to time.
12. Registration Statement -- The registration statement
filed with the Commission on Form S-11 including a form of
preliminary Prospectus for registration of the Interests to be
offered to the public under the Act, and any and all amendments
thereto, including, without limitation, exhibits and financial
statements when the Registration Statement becomes effective and,
in the event of any amendments or supplements after the Effective
Date, such Prospectus as so amended or supplemented.
13. Sales Literature -- Any written, audio or audiovisual
material prepared by the Company, the Underwriter or any
Soliciting Dealer and approved by the NASD and Florida Time Share
Bureau for use in conjunction with the offer or sale of the
Interests.
14. Soliciting Dealers -- Broker/dealers that are members
of the NASD and that entered into a Soliciting Dealer Agreement
with Decade Securities Corp.
15. Underwriter -- Decade Securities Corp., a licensed
broker/dealer and member of the NASD, and the managing dealer in
the distribution of Interests.
I
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Underwriter that:
1. The Company is duly organized and validly existing as a
corporation under the laws of the State of Florida, and will have,
at the time of the Registration Statement referred to herein is
effective, the power and authority to conduct business as described
in the Prospectus under the laws of the State of Florida.
2. The Interests shall have the characteristics as set forth
in the Registration Statement.
3. There will be available for inspection by the
Underwriter, upon your request at any reasonable time, copies of
all material contracts to which the Company is a party.
4. The Company has prepared and filed with the Commission,
a Registration Statement on Form S-11 (including a form of
preliminary Prospectus) for registration of the Interests to be
offered to the public under the Act and will so prepare and file
amendments thereto (including amended forms of preliminary
Prospectus). The Company will use its best efforts to cause the
Registration Statement to become effective as soon as possible. A
copy of such Registration Statement will be made available to the
Underwriter.
5. When the Registration Statement becomes effective, it and
the accompanying Prospectus, will comply in all material respects
with the requirements of the Act and with the rules and regulations
of the Commission promulgated thereunder; provided, however, the
Company makes no representations or warranties as to information
contained or omitted from the Registration Statement or the
Prospectus, in reliance upon information furnished to the Company
by the Underwriter specifically for inclusion therein.
6. The Company's capitalization is as set forth in the
Registration Statement and Prospectus. The offer and sale of the
Interests has been duly and validly authorized by the Company and
the Interests will conform to the description thereof contained in
the Prospectus.
7. Except as contemplated in the Registration Statement and
the Prospectus, since the respective dates as of which information
is therein given (a) the Company has not incurred any liability or
obligations, direct or contingent, and has not entered into any
material transactions, not in the ordinary course business, (b)
there has not been any material adverse change in its financial
position, (c) the business and operations of the Company have not
been materially interfered with by strike, fire, flood, accident or
other calamity (whether or not insured), and (d) no material legal
or governmental proceedings domestic or foreign, affecting the
Company or the transactions contemplated by this Agreement have
been instituted or, to the knowledge of the Company, are
threatened.
8. The person or persons who have signed this Agreement on
behalf of the Company are duly authorized to so sign, and this
Agreement is a valid, legal and binding agreement of the Company
enforceable in accordance with their respective terms.
9. The financial statements set forth in the Registration
Statement and the Prospectus fairly represent the financial
position of the Company as of the date thereof and since the dates
of such financial statements, there has been no material adverse
change in the financial position of the Company, except as
contemplated in the Prospectus.
10. The certified public accountants who certified the
financial statements filed with the Commission as part of the
Registration Statement and the financial statements incorporated in
the Prospectus, and who, as experts, may certify or review other
information of a financial or accounting nature contained in the
Registration Statement and the Prospectus, are independent public
accountants as required by the Act and the Rules and Regulations
thereunder.
11. Except as set forth in this Agreement, the Company shall
not be required to pay any finder's or origination fees. The
Company will indemnify and hold the Underwriter harmless from and
against any and all other expenses, costs, losses, damages and
liabilities to which the Underwriter becomes subject by reason of
any claim for finder's, origination or other compensation for
service with respect to the bringing about of this Agreement.
12. There are no contracts or other documents required to be
filed by the Act or the Rules and Regulations of the Commission
thereunder as exhibits to the Registration Statement which have not
been so filed, or which will not be so filed prior to the Effective
Date.
13. All of the foregoing representations, agreements and
warranties shall survive delivery of the payment for all of the
Interests covered by this Agreement.
The Underwriter hereby represents and warrants to the Company
that:
1. No subscription agreement will be taken without the prior
delivery of a copy of the preliminary Prospectus and no accepted
subscription agreement, as confirmation of sale, will be returned
to any person confirming his or her purchase unless a copy of the
Prospectus has been delivered to any person who is expected to
receive such accepted subscription agreement as confirmation of the
sale, at least 48 hours prior to mailing the accepted subscription
agreement.
2. It has delivered and will deliver a copy of the latest
preliminary Prospectus on file with the Securities and Exchange
Commission to the address given in the written request of any
person for a preliminary Prospectus between the filing date and a
reasonable time prior to the Effective Date of the Registration
Statement to which such Prospectus relates, except that the
furnishing of Prospectuses in any State where such furnishing would
be unlawful under the laws of such State, shall not be required.
3. During the period between the Effective Date of the
Registration Statement and the later of either the termination of
the distribution of the securities or the expiration of the 90-day
period under section 4(3) of the Act, the Underwriter shall mail a
copy of the Prospectus to the address given in the written request
of any person for a copy of the Prospectus relating to the
Interests except that the furnishing of Prospectuses in any State
where such furnishing would be unlawful under the laws of such
State shall not be required.
4. It has made and will make available: (a) a copy of the
preliminary Prospectus relating to the Interests to each of its
associated persons who was expected, prior to the Effective Date,
to solicit customers' orders for such Interests before the making
of any such solicitation by such associated persons and (b) a copy
of any amended preliminary Prospectus to each such associated
person promptly after the filing thereof.
5. It will make available a copy of the Prospectus relating
to the Interests to each of its associated persons who is expected,
after the Effective Date, to solicit customers' orders for such
securities prior to the making of any such solicitation by such
associated persons.
6. It will assure that all Soliciting Dealers are promptly
furnished with sufficient copies, as requested by them, of each
preliminary Prospectus, each amended preliminary Prospectus, and
the Prospectus to enable them to comply with paragraphs (b), (c),
(d) and (e) of Rule 15c2-8 of the Securities Exchange Act of 1934.
7. It will assure that Soliciting Dealers are furnished
reasonable quantities of the Prospectus relating to the Interests,
as requested by such Soliciting Dealers, in order to enable such
Soliciting Dealers to comply with the Prospectus delivery
requirement of section 5(b)(1) and (2) of the Securities Act of
1933.
8. It has reasonable grounds to believe and does believe,
based upon the information made available to it by the Company
through the Registration Statement and other materials, that all
material facts are adequately and accurately disclosed and provide
a basis for evaluating the offering of Interests.
(a) The Underwriter represents that in determining the
adequacy of the disclosed facts, it has obtained information on
material facts relating at a minimum to the following:
(i) items of compensation to the Company and
Affiliates and to entities not affiliated with the Company;
(ii) the physical property of the Charthouse and the
description thereof; and
(iii) tax aspects of the offering;
(iv) the financial stability and experience of the
Company; and
(v) risk factors associated with the Interests,
including potential conflicts of interest.
9. The Underwriter represents and warrants that it shall not
be required to pay any finder's or origination fees. The
Underwriter will indemnify and hold the Company harmless from and
against any and all other expenses, costs, losses, damages and
liabilities to which the Company may become subject by reason of
any claim for finder's, origination or other compensation for
service with respect to the bringing about of this Agreement.
10. All of the foregoing representations, agreements, and
warranties shall survive delivery of the payment for all of the
Interests covered by this Agreement.
II
EMPLOYMENT OF THE UNDERWRITER
Upon the foregoing representation, agreements and warranties
and subject to the terms and conditions of this Agreement:
1. (a) The Company hereby employs the Underwriter as its
exclusive agent to effect sales of up to 150 Interests as set forth
in the prospectus. The Underwriter agrees to use its best efforts
as agent to sell all of the Interests subject to the terms,
provisions and conditions of the Agreement, during the period
commencing with the receipt of the written notice of the Effective
Date of the Registration Statement and ending: (i) on the second
anniversary of the Effective Date; (ii) upon sale of all of the
Interests; or (iii) at such earlier date as the Company shall
designate by notice to you in writing, unless the parties agree to
extend such period of time.
2. The Interests shall be offered to the public at the price
set forth in the Prospectus.
3. Each person desiring to purchase an Interest will be
required to complete and execute a subscription agreement and a
signature page, and to return them together with a check payable to
the order of "Charthouse Vacation Ownership, Inc." or "Associated
Bank," as escrow agent, in the amount of the purchase price of such
Interests and any other documents that may be required or advisable
under state securities laws or by the Company. The Underwriter or
such Soliciting Dealer shall ascertain that each subscription
agreement and each signature page sent in by a prospective
purchaser of Interests have been completed and executed by such
prospective purchaser and that each check has been written as
stated above and shall then forward such subscription agreement,
such signature page and such check to the Company at the
aforementioned address. In the event a subscriber's check is made
payable other than as specified above, Underwriter shall
immediately return the same to the subscriber. The Underwriter
shall make provisions for its own receipt of any and all checks
delivered to a Soliciting Dealer, by the end of the next business
day following Soliciting Dealer's receipt thereof.
Within 48 hours after receipt of the subscription documents by
the Company:
(a) the Company will either accept or reject the
proposed purchaser as a Holder, it being understood that the
Company reserves the right to reject the tender of any signature
page and to reject all tenders; and
(b) such investor's check will either be deposited by
the Company into the escrow account or returned to the Holder in
the event of acceptance or rejection, respectively. Should the
Company determine to accept the tender of the signature page, the
Company will promptly advise the Underwriter of such action. If
the Company rejects the tender of the signature page, it will
promptly notify the Underwriter in writing of the determination.
Nothing contained in the foregoing paragraph shall be
construed to impose upon the Company the responsibility of assuring
that prospective Holder meet the suitability standards contained in
the Prospectus or to relieve you or any Soliciting Dealer of the
responsibility of complying with Section 2 of the Rules of Fair
Practice of the NASD. In recommending an investment in the
Company, the Underwriter (or, if applicable, Soliciting Dealer)
shall:
(a) have reasonable grounds to believe, on the basis of
information obtained from the participant concerning his investment
objectives, other investments, financial situation and needs, and
any other information known by the Underwriter that:
(i) the participant is or will be in a financial
position appropriate to enable him to realize to a significant
extent the benefits described in the Prospectus, including use of
the Charthouse hotel;
(ii) the participant has a fair market net worth
sufficient to sustain the risks inherent in the program, including
loss of investment and lack of liquidity; and
(iii) the program is otherwise suitable for the
participant.
Prior to executing a purchase transaction in this Offering,
the Underwriter (or, if applicable, Soliciting Dealer) shall inform
the prospective purchaser of all pertinent facts relating to the
liquidity and marketability of the program during the term of the
Company. The Underwriter (or, if applicable, Soliciting Dealer)
shall further maintain in its files documents disclosing the basis
upon which the determination of suitability was reached as to each
participant.
Notwithstanding the foregoing provisions, Underwriter (or, if
applicable, Soliciting Dealer) shall not execute any transaction in
the Company in a discretionary account without prior written
approval of the transaction by the customer.
4. The total payments made to all dealers, including the
Underwriter and Soliciting Dealers in connection with the offering,
will not exceed 10% of the gross proceeds of the offering including
expenses in connection with due diligence activities.
5. The Underwriter shall have the right to associate with
such other underwriters or broker-dealers as it may determine, who
shall be members of the NASD (the "Soliciting Dealers"). Such
Soliciting Dealers shall become parties hereto by executing a
Soliciting Dealer Agreement, in which event, the term "Underwriter"
shall be construed as Decade Securities Corp., and such Soliciting
Dealers, and in such event Decade Securities Corp. shall be the
Managing Dealer.
6. This Agreement and the Company's obligations hereunder
may be canceled upon 60 days' written notice without liability on
the part of the Company. Notice of such cancellation shall be
given to the Underwriter at its principal place of business.
III
FURTHER AGREEMENTS OF THE COMPANY
The Company agrees, at its expense and without expense to the
Underwriter, as follows:
1. To make available and to continue to make available and
supply such financial statements and other information to and as
may be required by the Commission or the proper public bodies in
the statues in which the Interests may be registered for sale.
2. As soon as the Company is informed thereof, to orally
advise the Underwriter as follows:
(a) when the Registration Statement becomes effective;
(b) when any post-effective amendment to the
Registration Statement becomes effective;
(c) of any request of the Commission for amendments to
the Registration Statement or related Prospectus or for additional
information;
(d) of the issuance by the commission of any stop order
suspending the effectiveness of the Registration Statement or of
the initiation of any proceedings for that purpose; and
(e) of any material adverse change in its financial
position or operating condition and of any development materially
affecting the Company or rendering untrue or misleading any
material statement in the Registration Statement or Prospectus.
3. To make every reasonable effort to prevent the issuance
of any stop order suspending the effectiveness of the Registration
Statement, and, if such stop order is entered at any time, the
Company shall use its best efforts to obtain withdrawal of the same
at the earliest possible moment.
4. To make available to the Underwriter (a) prior to the
Effective Date, copies of such preliminary Prospectus filed with
the Commission bearing in red ink the statement required by the
rules of the commission, (b) on and from time to time after the
Effective Date, copies of the Prospectus and, if applicable, of any
amended or supplemented Prospectus; and (c) as soon as they are
available and from time to time thereafter, copies of each
Prospectus prepared for the purpose of permitting compliance with
Section 10 of the Act and, if applicable, of any amended or
supplemented Prospectus; and the number of copies to be delivered
in each such case will be such as the Underwriter may reasonably
request.
5. To make available for your inspection, one executed copy
of the Registration Statement, including all exhibits and
amendments thereto.
6. For the period after the Effective Date during which the
Prospectus is required by law to be used, if any change shall have
occurred as a result of which the Prospectus includes an untrue
statement of a material fact or omits to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading, forthwith
to prepare and make available to the Underwriter supplements or an
amended Prospectus correcting the untrue statements or supplying
the omission.
7. In the event that revisions of the Prospectus pursuant to
the provisions of Section 10 of the Act shall become necessary, to
the Prospectus, to file copies thereof with the Commission, and to
make available copies of the amended, supplemented, or revised
Prospectus to the Underwriter.
8. To use its best efforts in causing the Interest covered
by this Agreement to be registered for sale on terms consistent
with those stated in the effective Registration Statement under the
so-called Blue Sky Laws in such states as may be agreed upon.
9. If applicable, to issue to its Holders financial
statements prepared by an independent certified public accountant
and to make the same available to the Underwriter at least
annually.
IV
INDEMNITY PROVISIONS
1. The Company agrees to indemnify, defend, and hold each
Underwriter (including specifically such Underwriter added as
provided in Article II hereof), and each person, if any, who
controls any such Underwriter within the meaning of Section 15 of
the Act, free and harmless from and against any losses, claims,
damages, liabilities or expenses (including reasonable legal or
other expenses incurred by each such Underwriter and controlling
person in connection with defending any such claims or liabilities,
whether or not resulting in any liability to such Underwriter or to
any controlling person), to which such Underwriter or controlling
person may become subject under the Act or otherwise insofar as
such losses, claims, damages, liabilities, or expenses or actions
in respect thereof arise out of or are based upon (a) any untrue
statement or alleged untrue statement of material fact contained in
(i) the Registration Statement or any post-effective amendment
thereof (or supplement to the Prospectus), (ii) any Sales
Literature, or (iii) any Blue Sky Application, or (b) the omission
or alleged omission to state in the Registration Statement or any
post-effective amendment thereof or in any Sales Literature or in
any Blue Sky Application, a material fact required to be stated
therein or necessary to make the statements therein not misleading,
or (c) any untrue statements or alleged untrue statements of a
material fact contained in any preliminary Prospectus, if used
prior to the Effective Date, or in the Prospectus (if applicable,
as amended or as supplemented if the Company shall have filed with
the Commission any amendment thereof or supplement thereto), or the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading; and will reimburse each Underwriter
and Soliciting Dealer and each such controlling person for any
legal or other expenses reasonably incurred by such Underwriter,
Soliciting Dealer or such controlling person in connection with
investigating or defending any such loss, claim, damage, liability
or action, provided, however, that the Company will not be liable
in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in
reliance upon and in conformity with information furnished to the
Company by or on behalf of any Underwriter or any Soliciting Dealer
specifically for use with reference to such Underwriter or such
Soliciting Dealer in the preparation of the Registration Statement
or any such post-effective amendment thereof or any such Blue Sky
Application or any such preliminary Prospectus or the Prospectus or
any such amendment thereof or supplement thereto. The foregoing
indemnity agreement is subject to the condition that, insofar as it
relates to any untrue statement, alleged untrue statement, omission
or alleged omission made in any preliminary Prospectus (or the
Prospectus) but eliminated or remedied in the Prospectus (or in any
amendment thereof or supplement thereto), such indemnity agreement
shall not inure to the benefit of any Underwriter or any Soliciting
Dealer from whom the person asserting any loss, liability, claim or
damage purchased the Interest which is the subject thereof (or to
the benefit of any person who controls such Underwriter or such
Soliciting Dealer), if a copy of the Prospectus (or of the
Prospectus as so amended or supplemented) was not sent or given to
such person at or prior to the time the subscription of such person
was accepted by the Company. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
2. The foregoing indemnity of the Company in favor of the
Underwriter shall not be deemed to protect the Underwriter against
any liability to the Company or its Holders to which the
Underwriter would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance of
their duties, or by reason of their reckless disregard of their
obligations and duties under this Agreement.
3. The Underwriter agrees to give the Company an opportunity
to participate in the defense or preparation of the defense of any
action brought against any such Underwriter or controlling person
of such Underwriter to enforce any such claim or liability, and the
Company shall have the right so to participate. The agreement is
the Company under the foregoing indemnity is expressly conditioned
upon notice of any such action having been sent by such Underwriter
or controlling person, as the case may be, to the Company, by
letter (addressed to the principal place of business of the
Company), promptly after the commencement of such action against
such Underwriter or controlling person, such notice either being
accompanied by copies of papers served or filed in connection with
such action or by a statement of the nature of the action to the
extent known to such Underwriter. Failure to notify the Company
within a reasonable time of any such action shall relieve the
Company of its respective liabilities under the foregoing
indemnity, but failure to notify the Company as herein provided
shall not relieve it from any liability which it may have to any
Underwriter or controlling person other than on account of the
indemnity agreement contained in this Section.
4. The Underwriter and, if applicable, Soliciting Dealer
jointly and severally likewise agree to indemnify and hold harmless
the Company against any losses, claims, damages or liabilities to
which the Company becomes subject under the Act or otherwise
insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon (a) any untrue
statement or alleged untrue statement of a material fact contained
in (i) the Registration Statement or any post-effective amendment
thereof or (ii) any Blue Sky Application, or amendments thereto or
(b) the omission or alleged omission to state in the Registration
Statement or any post-effective amendment thereof, a material fact
required to be stated therein or necessary to make the statements
therein not misleading resulting from the use of information
furnished to the Company by the Underwriter for use in the
preparation of the Registration Statement or in any amendment or
amendments to the Registration Statement or in any Blue Sky
Application; or (c) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary
Prospectus, if used prior to the Effective Date or in the
Prospectus (as amended or as supplemented, if the Company shall
have filed any amendment thereof or supplement thereto) or the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading; in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon
and in conformity with written information furnished to the Company
by or on behalf of such Soliciting Dealer in the preparation of the
Registration Statement or any such post-effective amendment thereof
or any such Blue Sky Application or any such preliminary Prospectus
or the Prospectus or any such amendment thereof or supplement
thereto; and will reimburse any legal or other expense reasonably
incurred by the Company in connection with investigating or
defending any such loss, claim, damage, liability or action. This
indemnity agreement will be in addition to any liability which such
Underwriter or such Soliciting Dealer may otherwise have.
5. The Company agrees to give each Underwriter an
opportunity to participate in the defense or preparation of the
defense of any action brought against the Company or such persons
to enforce any such claim or liability, and such Underwriter shall
have the right so to participate. The agreement of such
Underwriter under the foregoing indemnity is expressly conditioned
upon notice of any such action having been sent by the Company to
such Underwriter (by letter or by telegram addressed as in this
Agreement hereinafter provided for), promptly after the
commencement of such action against the Company, such notice either
being accompanied by copies of papers served or filed in connection
with such action or by a statement of the nature of the action to
the extent known to the Company. Failure to notify such
Underwriter of any action shall relieve such Underwriter of its
liability under the foregoing indemnity, but failure to notify such
Underwriter as herein provided shall not relieve such Underwriter
from any liability which such Underwriter may have to the Company
or the Holders otherwise than on account of the indemnity agreement
contained in this Article.
6. The provisions of this Article shall not in any way
prejudice any right or rights which any Underwriter may have
against the Company or the Company may have against any Underwriter
under any statute other than the Act, at common law, or otherwise.
V
PAYMENT OF EXPENSES
The Company agrees, at its own expense and without expense to
the Underwriter, to pay all costs and expenses incident to this
Agreement, including, but without limitation, all expenses in
connection with the preparation, printing and filing of the
Registration Statement or any post-effective amendment thereof,
together with all exhibits; to pay all filing fees and costs,
charges or disbursements connected with the issue and delivery of
the Interests covered by this Agreement; and to pay all reasonable
expenses incurred in connection with the registration of the
Interests under the securities or Blue Sky Laws of the states
agreed upon.
VI
PUBLIC OFFERING
The Underwriter agrees to make a public offering of the
Interests covered by this Agreement as soon after the Effective
Date as is advisable in accordance with and as set forth in the
Registration Statement. If applicable, such public offering will
be made through Soliciting Dealers as described herein.
VII
CONDITIONS PRECEDENT TO THE OBLIGATIONS
OF THE UNDERWRITER
It is understood that the obligations of the Underwriter
hereunder shall be conditioned upon:
1. The approval of counsel for the Underwriter of: the form
and content of the Registration Statement; the organization and
present legal status of the Company; and the legality and validity
of the authorization and sale of Interests to be offered hereunder,
which approval shall not be unreasonably withheld.
2. The performance by the Company of all the obligations on
its part to be performed hereunder and the truth, completeness, and
accuracy of all statements and representations contained herein or
any financial statements furnished hereunder.
3. The fact that no substantial claims shall be made or
legal action for substantial amounts be instituted or reasonable
basis therefor be discovered against the Company.
4. The fact that the Registration Statement shall become
effective on such later date as may be agreed upon, and that no
amendment to the Registration Statement shall have been filed to
which the Underwriter shall have reasonably objected after having
received reasonable notice; and that no stop order suspending the
effectiveness of the Registration Statement shall have been issued
and no proceedings for that purpose shall have been threatened or
instituted.
VIII
MISCELLANEOUS
This Agreement shall inure to the benefit of, and be binding
upon, the Underwriter (including specifically, such Underwriter as
may be added as provided in Article II hereof), the Company and its
successors, and the term "successors" as used in this Agreement
shall not include any purchaser, as such purchaser, of any of the
Interests. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person other than the
persons mentioned in the preceding sentence any legal or equitable
right, remedy or claim under or in respect of this Agreement, or
any provisions herein contained, this Agreement and all conditions
and provisions hereof being intended to be, and being, for the sole
exclusive benefit of such person and for the benefit of no other
persons, except that the warranties, indemnities and agreements of
the Company contained herein shall also be for the benefit of any
persons, if any, who control any Underwriter within the meaning of
Section 15 of the Act, and except that the indemnification by the
Underwriter shall be for the benefit of the Company and such
persons as shall have signed the Registration Statement.
IX
MARKET
Any termination of this Agreement pursuant to this Article
shall be without liability of the Company to Underwriter or the
Soliciting Dealers, except as otherwise provided herein, and
without liability on the Underwriter's part or the part of the
Soliciting Dealers to the Company.
Any notice referred to above may be given at the Company's
principal place of business in writing, orally or by telephone, and
if orally or by telephone, shall be immediately confirmed in
writing.
X
NOTICE
Any notice required or permitted to be given hereunder may be
given orally or in writing by depositing the same in the United
States Mail postage prepaid, addressed as follows:
To the Underwriter: Decade Securities Corp.
250 Patrick Boulevard
Brookfield, Wisconsin 53045
To the Company: Charthouse Suites Vacation
Ownership, Inc.
250 Patrick Boulevard
Brookfield, Wisconsin 53045
with a copy to: Conrad G. Goodkind, Esq.
Quarles & Brady
411 East Wisconsin Avenue
Milwaukee, Wisconsin 53202-4497
If the foregoing correctly sets forth our understanding,
please indicate your acceptance thereof in the space provided for
such purpose. This letter, upon its acceptance, will set forth the
entire agreement between us and no representations, warranties,
understandings, or agreements not herein specifically set forth
shall be implied therefrom.
Very truly yours,
Charthouse Suites Vacation
Ownership, Inc.
By: /s/ Jeffrey Keierleber
Jeffrey Keierleber,
President
The foregoing agreement is hereby confirmed and accepted as of the
date first above written.
DECADE SECURITIES CORP.
By: ____________________________
President
150 Charthouse Suites Vacation Investment
and Ownership Interests
DECADE CHARTHOUSE VACATION OWNERSHIP, INC.
SOLICITING DEALER AGREEMENT
Decade Securities Corp. (the "Dealer Manager"), as Dealer
Manager/Underwriter for Charthouse Suites Vacation Ownership,
Inc., a Wisconsin corporation ("Charthouse") invites you to
become a soliciting dealer ("Soliciting Dealer") in an offering
of up to 150 Charthouse Suites Vacation Investment and Ownership
Interests (the "Interests") pursuant to the terms and conditions
set forth in the Prospectus dated _______________, 1996 (the
"Prospectus") included herewith. The interests are more
particularly described in the Prospectus, additional copies of
which will be supplied in reasonable quantities upon request.
The terms and conditions of this invitation and Agreement are as
follows:
1. Offer and Sale of Interests. The Soliciting Dealer
represents that it only will offer and sell the Interests in
conformity with federal and state securities laws to persons who
are bona fide residents of those states in which the Interests
may legally be offered and sold and only at the price, in the
amounts and on the terms set forth in Charthouse's current
Prospectus.
2. Investor Suitability. The Soliciting Dealer represents
that in recommending the purchase of Interests to potential
purchasers: (1) it will have reasonable grounds to believe (on
the basis of information obtained from the potential purchaser
concerning his or her investment objectives, other investments,
financial situation and needs, and other information available to
it) that the potential purchaser is or will be in a financial
position appropriate to enable him or her to realize to a
significant extent the benefits described in the Prospectus, that
the potential purchaser has a fair market net worth sufficient to
sustain the risks inherent in an investment, and that the
Interests are otherwise suitable for the potential purchaser; (2)
it will maintain in its files documents disclosing the basis on
which the determination of suitability was reached as to each
purchaser; and (3) it or a person associated with it will, prior
to accepting subscriptions for the Interests, inform prospective
purchasers of all pertinent facts relating to the liquidity and
marketability of the Interests during the term of the investment.
The Soliciting Dealer further represents that it will not
purchase Interests on behalf of a discretionary account without
the prior written approval of the transaction by the purchaser.
3. Due Diligence Investigation. The Soliciting Dealer
has, or will have, prior to its participation in the offering,
reasonable grounds to believe that all material facts are
adequately and accurately disclosed in the Prospectus and provide
a basis for evaluating Charthouse, including information relating
to items of compensation, benefits to purchasers, tax aspects,
conflicts of interest, risk factors, and pertinent documents and
reports. The Soliciting Dealer further acknowledges that the
Dealer Manager is an affiliate of Charthouse, and therefore the
Soliciting Dealer cannot rely on the Dealer Manager's due
diligence investigation with respect to the offering.
4. Preliminary Prospectus. The Soliciting Dealer agrees
to use the "Preliminary Prospectus" supplied by the Dealer
Manager in conformity with the provisions of federal and state
securities laws. In particular (and without limiting the
generality of the foregoing), the Soliciting Dealer shall accept
no funds or executed subscriptions until the Interests may be
legally sold.
5. Selling Commissions. The Soliciting Dealer will be
allowed a commission of up to seven percent (7%), and other non-
cash compensation as specified on Exhibit A, with respect to all
Interests sold by the Soliciting Dealer. Such payments shall be
made to the Soliciting Dealer by the Dealer Manager promptly
after the Dealer Manager receives its commissions and dealer
manager fee from Charthouse. Such payments will not be made
until the earlier of (i) the sale of 76 Interests (which have not
been rescinded) or (ii) 180 days after the Effective Date of the
Registration Statement for the Interests. The Soliciting Dealer
agrees to comply with the Rules of Fair Practice of the National
Association of Securities Dealers, Inc., and will not grant any
concessions, discounts or other reallowances which are not
permitted by under such provisions. The Dealer Manager will also
pay the incentive compensation set forth on Exhibit A.
6. Status of Soliciting Dealer. The Soliciting Dealer
agrees to purchase the Interests for its customers only through
the Dealer Manager, and all such purchasers shall only be made
upon orders already received by the Soliciting Dealer from its
customers. In all sales of Charthouse's Interests to the public,
the Soliciting Dealer shall confirm to such purchasers that it is
acting as agent for another.
7. Delivery of Funds. The Soliciting Dealer will promptly
(by noon of the next business day following receipt of the funds)
transmit to the Dealer Manager all funds received from
prospective purchasers of Interests and a completed Subscription
Agreement for each sale which will set forth the name, address,
and social security or federal tax identification number of each
purchaser,, the number of Interests subscribed for, and, if there
is to be more than one registered owner, whether the purchasers
are acting in joint tenancy or otherwise. The Soliciting Dealer
shall report, in writing, to the Dealer Manager upon request, the
number of Charthouse's Interests which have been sold and the
number of persons who have purchased such Interests from the
Soliciting Dealer. Each subscription may be rejected by
Charthouse or the Dealer Manager, and if rejected, all funds paid
will be returned to the purchaser within one business day after
rejection. In such event, the Soliciting Dealer will be notified
accordingly by the Dealer Manager.
8. Payment. Payment for Charthouse's Interests shall
accompany all confirmations and applications and shall be in
clearing house funds delivered to the Dealer Manager. All checks
and other orders for payment of money shall be made payable to
the Decade Charthouse Vacation Ownership, Inc.
9. Soliciting Dealer's Undertakings. No person is
authorized to make any representations concerning the Interests
except those contained in Charthouse's then current Prospectus.
The Soliciting Dealer will not sell any Interest pursuant to this
Agreement unless a copy of the Prospectus is furnished to each
purchaser prior to the acceptance of the purchaser's
subscription. The Soliciting Dealer agrees not to use any
supplemental sales literature of any kind without the prior
written approval of the Dealer Manager, unless the literature is
furnished by the Dealer Manager for such purpose. In offering
and selling the Interests, the Soliciting Dealer will rely solely
on the representations contained in Charthouse's Prospectus.
10. Failure of Order. If any order is rejected or if any
payment is received which proves insufficient or worthless, any
compensation paid to the Soliciting Dealer shall be returned
either by the Soliciting Dealer's remittance in cash or by a
charge against the account of the Soliciting Dealer, as the
Dealer Manager may elect.
11. Representations and Agreements of Soliciting Dealer.
By accepting this Agreement, the Soliciting Dealer represents
that it is registered as a broker-dealer under the Securities
Exchange Act of 1934, as amended, is a member in good of the
National Association of Securities Dealers, Inc., is licensed as
a broker-dealer in one or more states in which the Interests may
legally be sold and will maintain such registration, membership
and licenses throughout the term of this Agreement. The
Soliciting Dealer also represents that it will only offer and
sell Charthouse's Interests in compliance with all federal, state
and regulatory agency laws and regulations to bona fide residents
of those states in which the Interests may legally be sold and in
which the Soliciting Dealer, and its representatives making
offers and sales, are licensed. The Soliciting Dealer shall not
be entitled to any compensation during any period in which its
registration with the Securities and Exchange Commission, or its
or its representative's membership with the National Association
of Securities Dealers Inc. or license in a state where a sale
occurred has been suspended or terminated.
12. Indemnification:
(a) At the time of the offering, the Dealer
Manager shall have caused Charthouse to indemnify and
hold harmless each Soliciting Dealer (other than the
Dealer Manager), and each person, if any, who controls
(within the meaning of Securities Act of 1933, as
amended (the "Act") the Soliciting Dealer, against any
loss, claim, damage, liability or expense (including
attorneys' fees and litigation costs) to which the
Soliciting Dealer, or such controlling person, may be
subject under the Act or under any other statute or
common law or otherwise, insofar as such loss, claim,
damage, liability or expense (or any action in respect
thereof) arises out of or is based upon (1) any act or
omission by Charthouse in connection with the offer or
sale of Interests, which act or omission constitutes,
or is alleged to constitute a violation of the Act or
such statute, common law or otherwise, or (ii) any
untrue statement or alleged untrue statement of a
material fact contained in the Prospectus (including
any amendment or supplement thereto) relating to
Corporation or the omission or the alleged omission to
state therein a material fact necessary in order to
make the statements therein, in light of the
circumstances under which they were made, not
misleading; provided, however, that Charthouse shall be
liable in any such case to the extent that any such
loss, claim, damage, liability or expense arises out of
or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in the
Prospectus, or such amendment or supplement thereto, in
reliance upon and in conformity with written
information furnished to the Dealer Manager or
Corporation by any Soliciting Dealer.
(b) The Dealer Manager agrees to indemnify and
hold harmless, the Soliciting Dealer, and such person,
if any, who controls (within the meaning of the Act)
the Soliciting Dealer, against any loss, claim, damage,
liability or expense (including attorneys' fees and
costs of litigation) to which the Soliciting Dealer, or
such controlling person, may become subject under the
Act or under any other statute or common law or
otherwise insofar as such loss, claim, damage,
liability or expense (or any action in respect thereof)
arises out of or is based upon (i) any act or omission
by the Dealer Manager in connection with the offer or
sale of Interests, which act or omission constitutes or
is alleged to constitute, a violation of the Act or
such statute, common law or otherwise; and (ii) any
untrue statement or alleged untrue statement of a
material fact contained in the Prospectus (including
any amendment or supplement thereto) or the omission or
alleged omission to state therein a material fact
necessary in order to make the statements therein, in
light of the circumstances under which they were made,
not misleading which is made or omitted in reliance
upon and in conformity with written information
furnished to Charthouse by the Dealer Manager.
(c) The Soliciting Dealer hereby agrees to
indemnify and hold harmless the Dealer Manager and
Charthouse and each person, if any, who controls any
of them (within the meaning of the Act) from and
against any and all loss, claims, damages or
liabilities to which the Dealer Manager or Corporation
may become subject under the Act, or otherwise, insofar
as such loss, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based
upon (i) information contained in the Prospectus to the
extent such information is supplied by the Soliciting
Dealer to the Dealer Manager or Corporation for
inclusion therein; (ii) any alleged misrepresentations
or omissions to state material facts in connection with
statements made by the Soliciting Dealer or the
Soliciting Dealer's salespersons orally or by other
means or (iii) any material breach or inaccuracy in any
representation or warranty made by the Soliciting
Dealer herein; and the Soliciting Dealer will reimburse
Charthouse and Dealer Manager for any legal or other
expenses reasonably incurred in connection with Dealer
Manager shall, after receiving notice of commencement
of any action upon it or Charthouse and any proceeding
in respect of which indemnity may be sought by
Charthouse or the Dealer Manager hereunder, notify the
Soliciting Dealer within 10 days in writing of the
commencement thereof. In case any such action be
brought against Charthouse or the Dealer Manger, the
Dealer Manger shall notify the Soliciting Dealer of the
commencement thereof and the Soliciting Dealer shall be
entitled to participate in (and, in the extent the
Soliciting Dealer shall wish, to direct) the defense
thereof at the Soliciting Dealer's own expense, but
such defense shall be conducted by counsel satisfactory
to Charthouse and the Dealer Manager. If the
Soliciting Dealer shall fail to provide such defense,
Charthouse or the Dealer Manager may defend such action
at the Soliciting Dealer's cost and expense. The
Soliciting Dealer's obligation under this
indemnification agreement shall remain operative and in
full force and effect, regardless of any termination or
cancellation of this Agreement, or any investigation by
any party.
(d) The indemnity agreement between the Dealer
Manager and each Soliciting Dealer shall remain
operative and in full force and effect, regardless of
any termination or cancellation of the Dealer Manager
Agreement or Soliciting Dealer's Agreement, or any
investigation by any party.
13. Reports and Notices. The Dealer Manager agrees that
for so long as any of the Interests are outstanding, it will
furnish or cause to be furnished to the Soliciting Dealer (i)
such documents, reports and information as are furnished by
Charthouse to its members (such documents, reports and
information to be so furnished at the same time that they are
furnished to the members).
14. Survival. All representations, warranties and
covenants herein shall survive the execution and delivery hereof
and should not be affected by any investigation made by any
party.
15. Notices Hereunder. Any notice under this Agreement
shall be given or confirmed in writing, delivered personally or
sent by certified mail, postage pre-paid, addressed as specified
in this Section:
Notices to Dealer Manager: Decade Securities
Corporation
250 Patrick Boulevard
Brookfield, WI 53045
Attn.: Michael G. Sweet
and copy to: Conrad G. Goodkind, Esq.
Quarles & Brady
411 E. Wisconsin Avenue
Milwaukee, WI 53202
Notices to Soliciting Dealer:
To the Address indicated under the Soliciting
Dealer's Signature appearing on the last page
of this Agreement.
16. Applicable Law. This Agreement shall be governed by
the internal laws of the State of Wisconsin.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the ____ day of ________________, 1996.
DECADE SECURITIES CORP.,
Dealer Manager
By: __________________________
Its: _________________________
______________________________
(name of Soliciting Dealer)
By: __________________________
Its: _________________________
______________________________
(Soliciting Dealer's Street
Address or Post Office Box)
______________________________
(Soliciting Dealer's City,
State and Zip Code)
______________________________
(Tax Identification No. of
Soliciting Dealer)
<PAGE>
EXHIBIT A
As Incentive Compensation a representative of a Soliciting
Dealer may earn the following Incentive Compensation:
If a representative sells 5 Interests, such representative
will have the right to (a) use of a one unit week at Charthouse
Suites Hotel in Clearwater, Florida, (b) submit the one week
hotel suite in the RCI Travel Vacation Exchange Program and in
accordance with the terms and, upon payment of all RCI fees,
select a week at a participating resort, or (c) receive a cash
payment equal to the Guaranteed Rental Rate described in the
Charthouse Suites Vacation Ownership, Inc. prospectus for the
Interests. For purposes of this Incentive Compensation, the
Dealer Manager will select the category of Charthouse hotel
suite, in its discretion, but intends to consider the type of
class of Interests sold by the representative in selecting such
category.
If a representative sells 8 - 9 Interests, such
representative will have the right to (a) two unit weeks at
Charthouse Suites Hotel, (b) submit the two week hotel suite in
the RCI Travel Vacation Exchange Program and, in accordance with
the terms and upon payment of all RCI fees, select two weeks at a
participating resort, or (c) receive a cash payment equal to the
Guaranteed Rental Rate described in the Charthouse prospectus for
the Interests. For purposes of this Incentive Compensation, the
Dealer Manager will select the category of Charthouse hotel
suite, in its discretion, but intends to consider the type of
class of Interests sold by the representative in selecting such
category.
If a representative sells 10 or more Interests, such
representative will have the right to (a) three unit weeks at
Charthouse Suites Hotel, (b) submit the three week hotel suite in
the RCI Travel Vacation Exchange Program and, in accordance with
the terms and upon payment of all RCI fees, select three weeks at
a participating resort, or (c) receive a cash payment equal to
the Guaranteed Rental Rate described in the Charthouse prospectus
for the Interests. For purposes of this Incentive Compensation,
the Dealer Manager will select the category of Charthouse hotel
suite, in its discretion, but intends to consider the type of
class of Interests sold by the representative in selecting such
category.
ARTICLES OF INCORPORATION
OF
CHARTHOUSE SUITES VACATION OWNERSHIP, INC.
I, the undersigned natural person, acting as incor-
porator of a corporation under the Florida Business Corporation
Act, adopt the following Articles of Incorporation for such
corporation:
ARTICLE I
Name
The name of the corporation is Charthouse Suites
Vacation Ownership, Inc.
ARTICLE II
Principal Office and Mailing Address
The address of the principal office of the corporation
is 250 Patrick Boulevard, Suite 140, Brookfield, Wisconsin 53045-
5864, and the mailing address of the corporation is the same.
ARTICLE III
Purposes
The purposes for which the corporation is organized are
to engage in any lawful activity within the purposes for which a
corporation may be organized under the Florida Business Corpora-
tion Act, Chapter 607 of the Florida Statutes.
ARTICLE IV
Capital Stock
The aggregate number of shares which the corporation
shall have authority to issue is Ten Thousand (10,000) shares,
consisting of one class only, designated as "Common Stock," of
the par value of One Cent ($.01) per share.
ARTICLE V
Right to Purchase Own Shares
The corporation shall have the right to acquire its own
shares from time to time, upon such terms and conditions as the
Board of Directors shall fix.
ARTICLE VI
Registered Office and Agent
The address of the initial registered office of the
corporation is 222 Lakeview Avenue, Fourth Floor, West Palm
Beach, Palm Beach County, Florida 33402-3188, and the name of its
initial registered agent at such address is Florida-Lawdock, Inc.
ARTICLE VII
Incorporator
The name and address of the incorporator is Walter J.
Skipper, 411 East Wisconsin Avenue, Suite 2550, Milwaukee, WI
53202-4497.
Executed this 15th day of April, 1996.
/s/ Walter J. Skipper
Walter J. Skipper, Incorporator
<PAGE>
STATE OF WISCONSIN )
) SS
COUNTY OF MILWAUKEE )
This instrument was acknowledged before me on the 15th
day of April, 1996, by Walter J. Skipper.
/s/ Cynthia Z. Jorgensen
Cynthia Z. Jorgensen
Notary Public, State of Wisconsin
My Commission Expires: 2/14/99
<PAGE>
CERTIFICATE OF ACCEPTANCE OF DESIGNATED REGISTERED AGENT AND
REGISTERED OFFICE FOR SERVICE OF PROCESS.
In compliance with Section 48.091, Florida Statutes, the
following is submitted:
1. That Charthouse Suites Vacation Ownership, Inc.,
desiring to organize under the laws of the State of Florida, has
named Florida-Lawdock, Inc., located at 222 Lakeview Avenue,
Fourth Floor, West Palm Beach, County, Florida 33402-3188, as its
agent to accept service of process within Florida.
By: /s/ Walter J. Skipper
Walter J. Skipper, Incorporator
Dated: April 15, 1996
2. That, having been named to accept service of process
for the above-stated corporation, at the place designated in this
Certificate, I hereby agree to act in this capacity and agree to
comply with the provisions of Chapter 48.091, F.S., relative to
keeping open said office.
FLORIDA-LAWDOCK, INC.
By: /s/ Cynthia Z. Jorgensen
Cynthia Z. Jorgensen
Assistant Secretary of Florida-
Lawdock, Inc.
Dated: April 15, 1996
BYLAWS
OF
CHARTHOUSE SUITES VACATION OWNERSHIP, INC.
ADOPTED
April 16, 1996
<PAGE>
TABLE OF CONTENTS
ARTICLE I. OFFICES
1.01 Principal and Business Offices . . . . . . . . 1
1.02 Registered Office . . . . . . . . . . . . . . . 1
ARTICLE II. SHAREHOLDERS
2.01 Annual Meeting . . . . . . . . . . . . . . . . 1
2.02 Special Meeting . . . . . . . . . . . . . . . . 1
2.03 Place of Meeting . . . . . . . . . . . . . . . 1
2.04 Notice of Meeting . . . . . . . . . . . . . . . 2
2.05 Closing of Transfer Books or Fixing
of Record Date . . . . . . . . . . . . . . . 2
2.06 Voting Records . . . . . . . . . . . . . . . . 2
2.07 Quorum . . . . . . . . . . . . . . . . . . . . 3
2.08 Conduct of Meetings . . . . . . . . . . . . . . 3
2.09 Proxies . . . . . . . . . . . . . . . . . . . . 3
2.10 Voting of Shares . . . . . . . . . . . . . . . 3
2.11 Voting of Shares by Certain Holders . . . . . . 4
(a) Other Corporations . . . . . . . . . . . . 4
(b) Legal Representatives and Fiduciaries . . 4
(c) Receiver . . . . . . . . . . . . . . . . . 4
(d) Pledgees . . . . . . . . . . . . . . . . . 4
(e) Subsidiaries . . . . . . . . . . . . . . . 4
ARTICLE III. BOARD OF DIRECTORS
3.01 General Powers and Number . . . . . . . . . . . 5
3.02 Tenure and Qualifications . . . . . . . . . . . 5
3.03 Regular Meetings . . . . . . . . . . . . . . . 5
3.04 Special Meetings . . . . . . . . . . . . . . . 5
3.05 Meetings by Telephone or Other
Communication Technology. . . . . . . . . . . 5
3.06 Notice of Meetings . . . . . . . . . . . . . . 6
3.07 Quorum . . . . . . . . . . . . . . . . . . . . 6
3.08 Manner of Acting . . . . . . . . . . . . . . . 6
3.09 Conduct of Meetings . . . . . . . . . . . . . . 6
3.10 Vacancies . . . . . . . . . . . . . . . . . . . 7
3.11 Compensation . . . . . . . . . . . . . . . . . 7
3.12 Presumption of Assent . . . . . . . . . . . . . 7
3.13 Committees . . . . . . . . . . . . . . . . . . 7
ARTICLE IV. OFFICERS
4.01 Number . . . . . . . . . . . . . . . . . . . . 8
4.02 Election and Term of Office . . . . . . . . . . 8
4.03 Removal . . . . . . . . . . . . . . . . . . . . 8
4.04 Vacancies . . . . . . . . . . . . . . . . . . . 8
4.05 President . . . . . . . . . . . . . . . . . . . 8
4.06 Vice Presidents . . . . . . . . . . . . . . . . 9
4.07 Secretary . . . . . . . . . . . . . . . . . . . 9
4.08 Treasurer . . . . . . . . . . . . . . . . . . . 9
4.09 Assistant Secretaries and Assistant Treasurers 10
4.10 Other Assistants and Acting Officers . . . . . 10
4.11 Salaries . . . . . . . . . . . . . . . . . . . 10
ARTICLE V. CONTRACTS, LOANS, CHECKS AND DEPOSITS
5.01 Contracts . . . . . . . . . . . . . . . . . . . 10
5.02 Loans . . . . . . . . . . . . . . . . . . . . . 11
5.03 Checks, Drafts, etc. . . . . . . . . . . . . . 11
5.04 Deposits . . . . . . . . . . . . . . . . . . . 11
5.05 Voting of Securities Owned by this Corporation 11
ARTICLE VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER
6.01 Certificate for Shares . . . . . . . . . . . . 12
6.02 Facsimile Signatures and Seal . . . . . . . . . 12
6.03 Signature by Former Officers . . . . . . . . . 12
6.04 Transfer of Shares . . . . . . . . . . . . . . 12
6.05 Restrictions on Transfer . . . . . . . . . . . 13
6.06 Lost, Destroyed or Stolen Certificates . . . . 13
6.07 Consideration for Shares . . . . . . . . . . . 13
6.08 Stock Regulations . . . . . . . . . . . . . . . 13
ARTICLE VII. WAIVER OF NOTICE
ARTICLE VIII. UNANIMOUS CONSENT WITHOUT A MEETING
ARTICLE IX. INDEMNIFICATION
ARTICLE X. SEAL
ARTICLE XI. AMENDMENTS
11.01 By Shareholders . . . . . . . . . . . . . . . . . . 14
11.02 By Directors . . . . . . . . . . . . . . . . . . . . 14
11.03 Implied Amendments . . . . . . . . . . . . . . . . . 15
ARTICLE XII. STOCK TRANSFER RESTRICTION
<PAGE>
ARTICLE I. OFFICES
1.01. Principal and Business Offices. The corporation
may have such principal and other business offices, either within
or without the State of Florida, as the Board of Directors may
designate or as the business of the corporation may require from
time to time.
1.02. Registered Office. The registered office of the
corporation required by the Florida Business Corporation Act to
be maintained in the State of Florida may be, but need not be,
identical with the principal office in the State of Florida. The
address of the registered office may be changed from time to time
by the Board of Directors or, if within the county, by the regis-
tered agent. The business office of the registered agent of the
corporation shall be identical to such registered office.
ARTICLE II. SHAREHOLDERS
2.01. Annual Meeting. The annual meeting of the
shareholders shall be held on April 1 in each year, or at such
other time and date as may be fixed by or under the authority of
the Board of Directors, for the purpose of electing directors and
for the transaction of such other business as may come before the
meeting. If the day fixed for the annual meeting shall be a
legal holiday in the State of Florida, such meeting shall be held
on the next succeeding business day. If the election of
directors shall not be held on the day designated herein, or
fixed as herein provided, for any annual meeting of the
shareholders, or at any adjournment thereof, the Board of
Directors shall cause the election to be held at a special
meeting of the shareholders as soon thereafter as conveniently
may be.
2.02. Special Meeting. Special meetings of the share-
holders, for any purpose or purposes, unless otherwise prescribed
by statute, may be called by the President or the Board of Direc-
tors or by the person designated in the written request of the
holders of not less than one-tenth of all shares of the corpora-
tion entitled to vote at the meeting.
2.03. Place of Meeting. The Board of Directors may
designate any place, either within or without the State of
Florida, as the place of meeting for any annual meeting or for
any special meeting called by the Board of Directors. A waiver
of notice signed by all shareholders entitled to vote at a
meeting may designate any place, whether within or without the
State of Florida, as the place for the holding of such meeting.
If no designation is made, or if a special meeting be otherwise
called, the place of meeting shall be the principal business
office of the corporation in the State of Florida or such other
suitable place in the county of such principal office as may be
designated by the person calling such meeting, but any meeting
may be adjourned to reconvene at any place designated by vote of
a majority of the shares represented thereat.
2.04. Notice of Meeting. Written notice stating the
place, day and hour of the meeting and, in case of a special
meeting, the purpose or purposes for which the meeting is called,
shall be delivered not less than ten (10) days (unless a longer
period is required by law or the Articles of Incorporation) nor
more than sixty (60) days before the date of the meeting, either
personally or by mail, by or at the direction of the President,
the Secretary, or the person(s) calling the meeting, to each
shareholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when depos-
ited in the United States mail, addressed to the shareholder at
his or her address as it appears on the stock record books of the
corporation, with postage thereon prepaid.
2.05. Closing of Transfer Books or Fixing of Record
Date. For the purpose of determining shareholders entitled to
notice of or to vote at any meeting of shareholders, or any
adjournment thereof, or shareholders entitled to receive payment
of any dividend, or in order to make a determination of share-
holders for any other proper purpose, the Board of Directors may
provide that the stock transfer books shall be closed for a
stated period but not to exceed, in any case, sixty (60) days.
If the stock transfer books shall be closed for the purpose of
determining shareholders entitled to notice of or to vote at a
meeting of shareholders, such books shall be closed for at least
ten (10) days immediately preceding such meeting. In lieu of
closing the stock transfer books, the Board of Directors may fix
in advance a date as the record date for any such determination
of shareholders, such date in any case to be not more than sixty
(60) days and, in case of a meeting of shareholders, not less
than ten (10) days prior to the date on which the particular
action, requiring such determination of shareholders, is to be
taken. If the stock transfer books are not closed and no record
date is fixed for the determination of shareholders entitled to
notice of or to vote at a meeting of shareholders, or share-
holders entitled to receive payment of a dividend, the close of
business on the date on which notice of the meeting is mailed or
on the date on which the resolution of the Board of Directors
declaring such dividend is adopted, as the case may be, shall be
the record date for such determination of shareholders. When a
determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this section, such
determination shall be applied to any adjournment thereof except
where the determination has been made through the closing of the
stock transfer books and the stated period of closing has
expired.
2.06. Voting Records. Voting records shall be
prepared in accordance with Section 607.0720 of the Florida
Business Corporation Act.
2.07. Quorum. Except as otherwise provided in the
Articles of Incorporation, a majority of the shares entitled to
vote, represented in person or by proxy, shall constitute a
quorum at a meeting of shareholders but in no event shall a
quorum consist of less than one-third of the shares entitled to
vote at the meeting. When a specified item of business is re-
quired to be voted on by a class or series of stock, a majority
of the shares of such class or series shall constitute a quorum
for the transaction of such item of business by that class or
series. If a quorum is present, the affirmative vote of the
majority of the shares represented at the meeting and entitled to
vote on the subject matter shall be the act of the shareholders
unless the vote of a greater number or voting by classes is re-
quired by the Florida Business Corporation Act or the Articles of
Incorporation. If less than a quorum is represented at a meet-
ing, a majority of the shares so represented may adjourn the
meeting from time to time without further notice. At such
adjourned meeting at which a quorum shall be present or repre-
sented, any business may be transacted which might have been
transacted at the meeting as originally noticed. The share-
holders present at a duly organized meeting may continue to
transact business until adjournment, notwithstanding the with-
drawal of enough shareholders to leave less than a quorum.
2.08. Conduct of Meetings. The President, or in the
President's absence, a Vice President in the order provided under
Section 4.08, and in their absence, any person chosen by the
shareholders present shall call the meeting of the shareholders
to order and shall act as chairman of the meeting, and the Secre-
tary shall act as secretary of all meetings of the shareholders,
but, in the absence of the Secretary, the presiding officer may
appoint any other person to act as secretary of the meeting.
2.09. Proxies. At all meetings of shareholders, a
shareholder entitled to vote may vote in person or by proxy
appointed in writing by the shareholder or by his duly authorized
attorney-in-fact. Such proxy shall be filed with the Secretary
before or at the time of the meeting. Unless otherwise provided
in the proxy or Section 607.0722 of the Florida Business Corpora-
tion Act, a proxy may be revoked at any time before it is voted,
either by written notice filed with the Secretary or the acting
secretary of the meeting or by oral notice given by the share-
holder to the presiding officer during the meeting. The presence
of a shareholder who has filed a proxy shall not of itself con-
stitute a revocation. No proxy shall be valid after eleven
months from the date of its execution, unless otherwise provided
in the proxy. The Board of Directors shall have the power and
authority to make rules as to the validity and sufficiency of
proxies.
2.10. Voting of Shares. Each outstanding share shall
be entitled to one vote on each matter submitted to a vote at a
meeting of shareholders, except to the extent that the voting
rights of the shares of any class or classes are enlarged, lim-
ited or denied by the Articles of Incorporation.
2.11. Voting of Shares by Certain Holders.
(a) Other Corporations. Shares standing in the
name of another corporation, domestic or foreign, may
be voted either in person or by proxy, by the president
of such corporation or any other officer appointed by
such president. A proxy executed by any principal
officer of such other corporation or assistant thereto
shall be conclusive evidence of the signer's authority
to act, in the absence of express notice to this corpo-
ration, given in writing to the Secretary of this
corporation, of the designation of some other person by
the board of directors or the bylaws of such other
corporation.
(b) Legal Representatives and Fiduciaries.
Shares held by an administrator, executor, guardian,
conservator, or assignee for creditors may be voted by
such person, either in person or by proxy. Shares
standing in the name of a trustee may be voted by him
or her, either in person or by proxy, but no trustee
shall be entitled to vote shares held by him or her
without a transfer of such shares into his or her name.
Shares standing in the name of a fiduciary may be voted
by him or her, either in person or by proxy. A proxy
executed by a fiduciary, shall be conclusive evidence
of the signer's authority to act, in the absence of
express notice, given in writing to the Secretary, that
such manner of voting is prohibited or otherwise
directed by the document creating the fiduciary
relationship.
(c) Receiver. Shares standing in the name of a
receiver may be voted by such receiver, and shares held
by or under the control of a receiver may be voted by
such receiver without the transfer thereof into his or
her name if authority to do so is contained in an
appropriate court order by which such receiver was
appointed.
(d) Pledgees. A shareholder whose shares are
pledged shall be entitled to vote such shares in person
or by proxy, until the shares have been transferred
into the name of the pledgee, and thereafter the
pledgee or his or her nominee shall be entitled to vote
the shares so transferred.
(e) Subsidiaries. Shares of the corporation's
own stock owned by another corporation, the majority of
the voting stock of which is owned or controlled by it,
shall not be voted, directly or indirectly, at any
meeting; and such shares shall not be counted in
determining the total number of outstanding shares at
any given time.
ARTICLE III. BOARD OF DIRECTORS
3.01 General Powers and Number. The business and
affairs of the corporation shall be managed by its Board of
Directors. The number of directors of the corporation shall be
one (1). The number of directors may be increased or decreased
from time to time by amendment to this Section adopted by the
shareholders or the Board of Directors but no decrease shall have
the effect of shortening the term of an incumbent director.
3.02. Tenure and Qualifications. Each director shall
hold office until the next annual meeting of shareholders and
until the director's successor shall have been elected, or until
his or her prior death, resignation or removal. Any director or
the entire Board of Directors may be removed from office, with or
without cause, by affirmative vote of a majority of the outstand-
ing shares entitled to vote for the election of such director, or
Board of Directors. A director may resign at any time by filing
a written resignation with the Secretary of the corporation.
Directors need not be residents of the State of Florida or share-
holders of the corporation.
3.03. Regular Meetings. A regular meeting of the
Board of Directors shall be held, without other notice than this
bylaw, immediately after the annual meeting of shareholders, and
each adjourned session thereof. The place of such regular
meeting shall be the same as the place of the meeting of
shareholders which precedes it, or such other suitable place as
may be announced at such meeting of shareholders. The Board of
Directors may provide, by resolution, the time and place, either
within or without the State of Florida, for the holding of
additional regular meetings without other notice than such
resolution.
3.04. Special Meetings. Special meetings of the Board
of Directors may be called by or at the request of the President
or any two directors. The persons calling any special meeting of
the Board of Directors may fix any place, either within or with-
out the State of Florida, as the place for holding any special
meeting of the Board of Directors called by them, and if no other
place is fixed the place of meeting shall be the principal busi-
ness office of the corporation in the State of Florida.
3.05 Meetings By Telephone or Other Communication
Technology. (a) Any or all directors may participate in a
regular or special meeting or in a committee meeting of the Board
of Directors by, or conduct the meeting through the use of,
telephone or any other means of communication by which either:
(i) all participating directors may simultaneously hear each
other during the meeting or (ii) all communication during the
meeting is immediately transmitted to each participating
director, and each participating director is able to immediately
send messages to all other participating directors.
(b) If a meeting will be conducted through the use of
any means described in paragraph (a), all participating directors
shall be informed that a meeting is taking place at which
official business may be transacted. A director participating in
a meeting by any means described in paragraph (a) is deemed to be
present in person at the meeting.
3.06. Notice of Meetings. Notice of each meeting of
the Board of Directors (unless otherwise provided in or pursuant
to Section 3.03) shall be given by written notice delivered per-
sonally or by first-class mail or given by telephone or telegram
to each director at his or her business or home address or at
such other address as such director shall have designated in
writing filed with the Secretary, in each case not less than 48
hours prior thereto. If mailed, such notice shall be deemed to
be delivered when deposited in the United States mail so
addressed, with postage thereon prepaid. If notice be given by
telegram, such notice shall be deemed to be delivered when the
telegram is delivered to the telegraph company; if by telephone,
at the time the call is completed. The attendance of a director
at a meeting shall constitute a waiver of notice of such meeting,
except where a director attends a meeting and objects thereat to
the transaction of any business because the meeting is not
lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting
of the Board of Directors need be specified in the notice or
waiver of notice of such meeting.
3.07. Quorum. A majority of the number of directors
as provided in Section 3.01 shall constitute a quorum for the
transaction of business at any meeting of the Board of Directors,
but a majority of the directors present (though less than such
quorum) may adjourn the meeting from time to time without further
notice.
3.08. Manner of Acting. The act of the majority of
the directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors, unless the act of a
greater number is required by the Florida Business Corporation
Act, the corporation's Articles of Incorporation or these Bylaws.
3.09. Conduct of Meetings. The Chairman of the Board
or the President shall call meetings of the Board of Directors to
order and shall chair the meeting. The Secretary of the cor-
poration shall act as secretary of all meetings of the Board of
Directors, but in the absence of the Secretary, the presiding
officer may appoint any assistant secretary or any director or
other person present to act as secretary of the meeting.
3.10. Vacancies. Any vacancy occurring in the Board
of Directors, including a vacancy created by an increase in the
number of directors, may be filled until the next succeeding
annual election by the affirmative vote of a majority of the
directors then in office, though less than a quorum of the Board
of Directors, provided, that in case of a vacancy created by
removal of a director(s), the shareholders shall have the right
to fill such vacancy at the same meeting or any adjournment
thereof.
3.11. Compensation. The Board of Directors, by affir-
mative vote of a majority of the directors then in office, and
irrespective of any personal interest of any of its members, may
establish reasonable compensation of all directors for services
to the corporation as directors, officers or otherwise, and the
manner and time of payment thereof, or may delegate such autho-
rity to an appropriate committee. The Board of Directors also
shall have authority to provide for or to delegate authority to
an appropriate committee to provide for reasonable pensions, dis-
ability or death benefits, and other benefits or payments, to
directors, officers and employees and to their estates, families,
dependents or beneficiaries on account of prior services rendered
by such directors, officers and employees to the corporation.
3.12. Presumption of Assent. A director who is
present at a meeting of the Board of Directors or a committee
thereof of which he is a member at which action on any corporate
matter is taken shall be presumed to have assented to the action
taken unless his dissent shall be entered in the minutes of the
meeting or unless he shall file his written dissent to such
action with the person acting as the secretary of the meeting
before the adjournment thereof or shall forward such dissent by
registered mail to the Secretary of the corporation immediately
after the adjournment of the meeting. Such right to dissent
shall not apply to a director who voted in favor of such action.
3.13. Committees. The Board of Directors, by resolu-
tion adopted by the affirmative vote of a majority of the number
of directors as provided in Section 3.01, may designate one or
more committees, each committee to consist of at least one (1)
director elected by the Board of Directors, which to the extent
provided in said resolution as initially adopted, and as there-
after supplemented or amended by further resolution adopted by a
like vote, shall have and may exercise, when the Board of Direc-
tors is not in session, the powers of the Board of Directors in
the management of the business and affairs of the corporation,
except action in respect to dividends to shareholders, election
of the principal officers or the filling of vacancies in the
Board of Directors or committees created pursuant to this sec-
tion. The Board of Directors may elect one or more of its mem-
bers as alternate members of any such committee who may take the
place of any absent member or members at any meeting of such
committee, upon request by the President or upon request by the
chairman of such meeting. Each such committee shall fix its own
rules governing the conduct of its activities and shall make such
reports to the Board of Directors of its activities as the Board
of Directors may request.
ARTICLE IV. OFFICERS
4.01. Number. The principal officers shall be a
President, one or more Vice Presidents (the number and designa-
tions to be determined by the Board of Directors), a Secretary,
and a Treasurer, each of whom shall be elected by the Board of
Directors. Any two or more offices may be held by the same
person. The Board of Directors may designate one of the Vice
Presidents as the Executive Vice President. Such other officers
and assistant officers as may be deemed necessary may be elected
or appointed by the Board of Directors or the President.
4.02. Election and Term of Office. The officers to be
elected by the Board of Directors shall be elected annually by
the Board of Directors at the first meeting of the Board of
Directors held after each annual meeting of the shareholders. If
the election of officers shall not be held at such meeting, such
election shall be held as soon thereafter as conveniently may be.
Each officer shall hold office until his successor shall have
been duly elected or until his prior death, resignation or
removal.
4.03. Removal. Any officer or agent may be removed by
the Board of Directors whenever in its judgment the best inter-
ests of the corporation will be served thereby, but such removal
shall be without prejudice to the contract rights, if any, of the
person so removed. Election or appointment shall not of itself
create contract rights.
4.04. Vacancies. A vacancy in any principal office
because of death, resignation, removal, disqualification or
otherwise, shall be filled by the Board of Directors for the
unexpired portion of the term.
4.05. President. The President shall be the principal
executive officer and, subject to the control of the Board of
Directors, shall in general supervise and control all of the
business and affairs of the corporation. He or she shall preside
at all meetings of the shareholders and of the Board of Direc-
tors. The President shall have authority, subject to such rules
as may be prescribed by the Board of Directors, to appoint such
agents and employees of the corporation as he or she shall deem
necessary, to prescribe their powers, duties and compensation,
and to delegate authority to them. Such agents and employees
shall hold office at the discretion of the President. The Presi-
dent shall have authority to sign, execute and acknowledge, on
behalf of the corporation, all deeds, mortgages, bonds, stock
certificates, contracts, leases, reports and all other documents
or instruments necessary or proper to be executed in the course
of the corporation's regular business, or which shall be autho-
rized by resolution of the Board of Directors; and, except as
otherwise provided by law or the Board of Directors, the
President may authorize any Vice President or other officer or
agent of the corporation to sign, execute and acknowledge such
documents or instruments in his or her place and stead. In
general he shall perform all duties incident to the office of
President and such other duties as may be prescribed by the Board
of Directors from time to time.
4.06. Vice Presidents. In absence of the President,
or in the event of the President's death, inability or refusal to
act, or in the event for any reason it shall be impracticable for
the President to act personally, the Vice President (or in the
event there be more than one Vice President, the Vice Presidents
in the order designated by the Board of Directors, or in the
absence of any designation, then in the order of their election)
shall perform the duties of the President, and when so acting,
shall have all the powers of and be subject to all the restric-
tions upon the President. Any Vice President may sign, with the
Secretary or Assistant Secretary, certificates for shares of the
corporation; and shall perform such other duties and have such
authority as from time to time may be delegated or assigned to
him or her by the President or the Board of Directors. The exe-
cution of any instrument of the corporation by any Vice President
shall be conclusive evidence, as to third parties, of the Vice
President's authority to act in the stead of the President.
4.07. Secretary. The Secretary shall: (a) keep the
minutes of the meetings of the shareholders and of the Board of
Directors in one or more books provided for that purpose; (b) see
that all notices are duly given in accordance with the provisions
of these Bylaws or as required by law; (c) be custodian of the
corporate records and of the seal of the corporation, if any, and
see that the seal of the corporation, if any, is affixed to all
documents which are authorized to be executed on behalf of the
corporation under its seal; (d) keep or arrange for the keeping
of a register of the post office address of each shareholder
which shall be furnished to the Secretary by such shareholder;
(e) sign with the President, or a Vice President, certificates
for shares of the corporation, the issuance of which shall have
been authorized by resolution of the Board of Directors; (f) have
general charge of the stock transfer books of the corporation;
and (g) in general perform all duties incident to the office of
Secretary and have such other duties and exercise such authority
as from time to time may be delegated or assigned to him or her
by the President or by the Board of Directors.
4.08. Treasurer. The Treasurer shall: (a) have
charge and custody of and be responsible for all funds and secu-
rities of the corporation; (b) receive and give receipts for
moneys due and payable to the corporation from any source whatso-
ever, and deposit all such moneys in the name of the corporation
in such banks, trust companies or other depositaries as shall be
selected in accordance with the provisions of Section 5.04; and
(c) in general perform all of the duties incident to the office
of Treasurer and have such other duties and exercise such other
authority as from time to time may be delegated or assigned to
him or her by the President or by the Board of Directors.
4.09. Assistant Secretaries and Assistant Treasurers.
There shall be such number of Assistant Secretaries and Assistant
Treasurers as the Board of Directors or President from time to
time authorize. The Assistant Secretaries may sign with the
President or a Vice President certificates for shares of the
corporation the issuance of which shall have been authorized by a
resolution of the Board of Directors. The Assistant Secretaries
and Assistant Treasurers, in general, shall perform such duties
and have such authority as from time to time shall be delegated
or assigned to them by the Secretary or the Treasurer, respec-
tively, or by the President or the Board of Directors.
4.10. Other Assistants and Acting Officers. The Board
of Directors and the President shall have the power to appoint
any person to act as assistant to any officer, or as agent for
the corporation in the officer's stead, or to perform the duties
of such officer whenever for any reason it is impracticable for
such officer to act personally, and such assistant or acting
officer or other agent so appointed by the Board of Directors or
President shall have the power to perform all the duties of the
office to which that person is so appointed to be assistant, or
as to which he or she is so appointed to act, except as such
power may be otherwise defined or restricted by the Board of
Directors or President.
4.11. Salaries. Salaries may be paid to the principal
officers of the corporation at the discretion of the Board of
Directors, and if so paid, shall be fixed from time to time by
the Board of Directors or by a duly authorized committee thereof,
and no officer shall be prevented from receiving such salary by
reason of the fact that such officer is also a director of the
corporation.
ARTICLE V. CONTRACTS, LOANS, CHECKS
AND DEPOSITS
5.01. Contracts. The Board of Directors may authorize
any officer or officers, agent or agents, to enter into any con-
tract or execute or deliver any instrument in the name of and on
behalf of the corporation, and such authorization may be general
or confined to specific instances. No contract or other transac-
tion between the corporation and one or more of its directors or
any other corporation, firm, association, or entity in which one
or more of its directors are directors or officers or are finan-
cially interested, shall be either void or voidable because of
such relationship or interest or because such director or direc-
tors are present at the meeting of the Board of Directors or a
committee thereof which authorizes, approves or ratifies such
contract or transaction or because the votes of the interested
director(s) are counted for such purpose, if (1) the fact of such
relationship or interest is disclosed or known to the Board of
Directors or committee which authorizes, approves or ratifies the
contract or transaction by a vote or consent sufficient for the
purpose without counting the votes or consents of such interested
directors; or (2) the fact of such relationship or interest is
disclosed or known to the shareholders entitled to vote and they
authorize, approve or ratify such contract or transaction by vote
or written consent; or (3) the contract or transaction is fair
and reasonable to the corporation. Common or interested direc-
tors may be counted in determining the presence of a quorum at a
meeting of the Board of Directors or a committee thereof which
authorizes, approves or ratifies such contract or transaction.
5.02. Loans. No indebtedness for borrowed money shall
be contracted on behalf of the corporation and no evidences of
such indebtedness shall be issued in its name unless authorized
by or under the authority of a resolution of the Board of Direc-
tors. Such authorization may be general or confined to specific
instances.
5.03. Checks, Drafts, etc. All checks, drafts or
other orders for the payment of money, notes or other evidences
of indebtedness issued in the name of the corporation, shall be
signed by such officer(s), employee(s) or agents of the corpora-
tion and in such manner as shall from time to time be determined
by or under the authority of a resolution of the Board of Direc-
tors.
5.04. Deposits. All funds of the corporation not
otherwise employed shall be deposited from time to time to the
credit of the corporation in such banks, trust companies or other
depositaries as may be selected by or under the authority of a
resolution of the Board of Directors.
5.05. Voting of Securities Owned by this Corporation.
Subject always to the specific directions of the Board of Direc-
tors, (a) any shares or other securities issued by any other
corporation and owned or controlled by this corporation may be
voted at any meeting of security holders of such other corpora-
tion by the President of this corporation if he or she is pres-
ent, or in the President's absence, by any Vice President of this
corporation who may be present, and (b) whenever, in the judgment
of the President, or in the President's absence, of any Vice
President, it is desirable for this corporation to execute a
proxy or written consent in respect to any shares or other secur-
ities issued by any other corporation and owned by this corpora-
tion, such proxy or consent shall be executed in the name of this
corporation by the President or one of the Vice Presidents of
this corporation, without necessity of any authorization by the
Board of Directors, affixation of corporate seal or countersigna-
ture or attestation by another officer. Any person or persons
designated in the manner above stated as the proxy or proxies of
this corporation shall have full right, power and authority to
vote the shares or other securities issued by such other corpora-
tion and owned by this corporation the same as such shares or
other securities might be voted by this corporation.
ARTICLE VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER
6.01. Certificate for Shares. Certificates represent-
ing shares of the corporation shall be in such form, consistent
with law, as shall be determined by the Board of Directors. Such
certificates shall be signed by the President or a Vice President
and by the Secretary or an Assistant Secretary. All certificates
for shares shall be consecutively numbered or otherwise identi-
fied. The name and address of the person to whom the shares
represented thereby are issued, with the number of shares and
date of issue, shall be entered on the stock transfer books of
the corporation. All certificates surrendered to the corporation
for transfer shall be cancelled and no new certificate shall be
issued until the former certificate for a like number of shares
shall have been surrendered and cancelled, except as provided in
Section 6.06.
6.02. Facsimile Signatures and Seal. The seal of the
corporation, if the corporation has elected to have a seal, on
any certificates for shares may be a facsimile. The signatures
of the President or a Vice President and the Secretary or Assis-
tant Secretary upon a certificate may be facsimiles if the cer-
tificate is manually signed on behalf of a transfer agent or a
registrar, other than the corporation itself or an employee of
the corporation.
6.03. Signature by Former Officers. If an officer,
who has signed or whose facsimile signature has been placed upon
any certificate for shares, shall have ceased to be such officer
before such certificate is issued, the certificate may be issued
by the corporation with the same effect as if that person were
such officer at the date of its issue.
6.04. Transfer of Shares. Prior to due presentment of
a certificate for shares for registration of transfer, the corpo-
ration may treat the registered owner of such shares as the per-
son exclusively entitled to vote, to receive notifications and
otherwise to have and exercise all the rights and power of an
owner. Where a certificate for shares is presented to the corpo-
ration with a request to register for transfer, the corporation
shall not be liable to the owner, or any other person suffering
loss as a result of such registration of transfer if (a) there
were on or with the certificate the necessary endorsements, and
(b) the corporation had no duty to inquire into adverse claims or
has discharged any such duty. The corporation may require rea-
sonable assurance that said endorsements are genuine and effec-
tive and in compliance with such other regulations as may be
prescribed by or under the authority of the Board of Directors.
6.05. Restrictions on Transfer. The face or reverse
side of each certificate representing shares shall bear a con-
spicuous notation of any restriction imposed by the corporation
upon the transfer of such shares.
6.06. Lost, Destroyed or Stolen Certificates. Where
the owner claims that his or her certificate for shares has been
lost, destroyed or wrongfully taken, a new certificate shall be
issued in place thereof if the owner (a) so requests before the
corporation has notice that such shares have been acquired by a
bona fide purchaser, and (b) if required by the corporation,
files with the corporation a sufficient indemnity bond, and (c)
satisfies such other reasonable requirements as may be prescribed
by or under the authority of the Board of Directors.
6.07. Consideration for Shares. The shares of the
corporation may be issued for such consideration as shall be
fixed from time to time by the Board of Directors, provided that
any shares having a par value shall not be issued for a consider-
ation less than the par value thereof. The consideration to be
paid for shares may be paid in whole or in part, in money, in
other property, tangible or intangible, or in labor or services
actually performed for the corporation. When payment of the
consideration for which shares are to be issued shall have been
received by the corporation, such shares shall be deemed to be
fully paid and nonassessable by the corporation. No certificate
shall be issued for any share until such share is fully paid.
6.08. Stock Regulations. The Board of Directors shall
have the power and authority to make all such rules and regula-
tions not inconsistent with the statutes of the State of Florida
as it may deem expedient concerning the issue, transfer and
registration of certificates representing shares of the corpora-
tion.
ARTICLE VII. WAIVER OF NOTICE
Whenever any notice whatever is required to be given
under the provisions of the Florida Business Corporation Act or
under corresponding provisions of the corporation's Articles of
Incorporation or Bylaws, a waiver thereof in writing, signed at
any time, whether before or after the time of the meeting, by the
person or persons entitled to such notice, shall be deemed equiv-
alent to the giving of such notice. Such waiver by a shareholder
in respect of any matter of which notice is required under any
provision of the Florida Business Corporation Act shall contain
the same information as would have been required to be included
in such notice under any applicable provisions of said Law,
except that the time and place of meeting need not be stated.
ARTICLE VIII.
UNANIMOUS CONSENT WITHOUT A MEETING
Any action required by the Articles of Incorporation or
these Bylaws or any provision of the Florida Business Corporation
Act, to be taken at a meeting, or any other action which may be
taken at a meeting, may be taken without a meeting if a consent
in writing setting forth the action so taken shall be signed by
all of the shareholders, directors or members of a committee
thereof entitled to vote with respect to the subject matter
thereof and such consent shall have the same force and effect as
a unanimous vote.
ARTICLE IX.
INDEMNIFICATION
The corporation shall indemnify all directors and offi-
cers to the fullest extent now or hereafter permitted by the
Florida Statutes. This bylaw shall not limit the rights of such
persons or other persons to indemnification as provided or per-
mitted as a matter of law, under the Florida Statutes or other-
wise.
ARTICLE X.
SEAL
The corporation shall have no seal.
ARTICLE XI.
AMENDMENTS
11.01. By Shareholders. These Bylaws may be altered,
amended or repealed and new Bylaws may be adopted by the share-
holders by affirmative vote of not less than a majority of the
shares present or represented at an annual or special meeting of
the shareholders at which a quorum is in attendance.
11.02. By Directors. These Bylaws may also be
altered, amended or repealed and new Bylaws may be adopted by the
Board of Directors by affirmative vote of a majority of the
number of directors present at any meeting at which a quorum is
in attendance; but no bylaw adopted by the shareholders shall be
amended or repealed by the Board of Directors if the bylaw so
adopted so provides.
11.03. Implied Amendments. Any action taken or autho-
rized by the shareholders or by the Board of Directors, which
would be inconsistent with the Bylaws then in effect but is taken
or authorized by affirmative vote of not less than the number of
shares or the number of directors required to amend the Bylaws so
that the Bylaws would be consistent with such action, shall be
given the same effect as though the Bylaws had been temporarily
amended or suspended so far, but only so far, as is necessary to
permit the specific action so taken or authorized.
ARTICLE XII.
STOCK TRANSFER RESTRICTION
In the event the corporation makes a valid election,
pursuant to sec. 1362 of the Internal Revenue Code of 1986, or any
successor provision thereto, to be treated as an S Corporation,
no shareholder of the corporation shall, without the written
consent of shareholders holding more than fifty percent (50%) of
the outstanding stock of the corporation, transfer any shares of
stock to any person who, by reason of being a shareholder of the
corporation, will cause a termination of the corporation's elec-
tion to be treated as an S Corporation.
PROPERTY MANAGEMENT AGREEMENT
THIS AGREEMENT, dated _________________, 1996 is by and
between CHARTHOUSE SUITES VACATION OWNERSHIP, INC., a Florida
corporation ("Charthouse") and DECADE PROPERTIES, INC., a
Wisconsin corporation ("DPI").
WHEREAS, Charthouse acquired a license to use, on the terms
and conditions of the license, a hotel comprised of 25 hotel
rooms located in Clearwater, Florida, known as Charthouse Suites
hotel (the "Property"). In connection with the offering of
Vacation Investment and Ownership Interests in the Charthouse,
Charthouse desires to retain DPI to manage the Property on behalf
of Charthouse and the holders of Charthouse Suites Vacation
Investment and Ownership Interests ("Interests") on the terms and
for the compensation set forth below.
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
1. Appointment and Acceptance. Charthouse hereby appoints
and retains DPI to perform the services set forth herein, and DPI
hereby accepts such appointment and employment, subject to the
conditions of this Agreement.
2. Efforts and Conflicts. DPI agrees to use commercially
reasonable and continual efforts to fulfill its obligations
hereunder. Charthouse acknowledges that DPI has been, is, and
will be engaged to perform duties for other entities, including
affiliates of Charthouse and DPI that are similar to those duties
to be performed under this Agreement. Charthouse further
acknowledges that it has no exclusive right to DPI's services.
3. Term of Agreement. This Agreement shall remain in full
force and effect until December 31, 2050. The parties agree that
DPI would not have entered into the Master License Agreement with
Charthouse or created the Charthouse Suites Vacation License Plan
unless this Agreement was entered into for the entire term and,
moreover, DPI would not enter into this Agreement for a lesser
term.
4. Compensation. For services rendered hereunder,
Charthouse shall pay to DPI an amount equal to $2,500 a month
plus reimbursement of its costs. The monthly management fee
amount will be increased on the first day of each year (beginning
January 1, 1997) by the annual increase in the Consumer Price
Index ("CPI") over the previous year, as reported by the
Department of Labor. The parties agree to select another
comparable index, if the Department of Labor ceases to publish
the CPI index.
5. DPI's Authority, Duties and Obligations. During the
term of this Agreement, DPI shall provide the following services
and, in the performance of such services, shall have the
authority indicated to act as agent on behalf of Charthouse:
(a) To manage the Property, including the provision of
services necessary for the maintenance and operation of the
Property customarily performed by managing agents of similar
properties;
(b) To keep the Property in good condition and repair
including, without limitation, interior and exterior
decorating, painting, plumbing, heating, and ventilating
systems, and carpeting; to make or cause to be made and to
supervise repairs and alterations on Charthouse's behalf
required by normal wear and tear; to purchase supplies,
equipment and services and pay all related bills. DPI
agrees to secure the prior approval of Charthouse on all
expenditures in excess of $1,000 for any one item, except
monthly or recurring operating charges and/or emergency
repairs in excess of such maximum if, in the opinion of DPI,
such repairs are necessary to protect the Property from
damage, or to maintain services to the holders of Interests
or their hotel guests.
(c) To hire, discharge and supervise all employees and
independent contractors.
(d) To borrow money in the name of Charthouse provided such
funds are used exclusively for payment of expenses related
to the Property.
(e) To make contracts for electricity, gas, fuel, water,
telephone, vermin extermination, window cleaning, sweeping,
cleaning, ash or rubbish hauling and other services or such
of them as DPI shall deem advisable in is reasonable
opinion.
(f) To carry at Charthouse's expense necessary public
liability insurance with a minimum limit of $1,000,000 in
coverage and workmen's compensation insurance adequate to
protect the interests of the parties hereto; which policies
shall, if possible, be so written as to protect DPI in the
same manner and to the same extent they protect Charthouse
and will name DPI as an additional insured under the policy;
and acquire fire, liability, burglary and theft, steam
boiler, pressure, or any other appropriate insurance.
(g) To pay, on behalf and at the direction of Charthouse,
indebtedness relating to DPI and operating expenses.
(h) To follow the directions of any consultants retained by
Charthouse for the establishment of DPI's procedures and
controls.
(i) To bond by a fidelity bond all of DPI's employees who
are responsible for the handling of money for Charthouse.
(j) To pay all taxes and special assessments for public
improvements now or hereafter assessed or levied against and
on the Property as they become due. Payments may be made in
installments as permitted by the municipality.
(k) To pay all costs of data processing and/or computer
processing charges in connection with the accounting and
controls established by Charthouse or the holders of
Interests.
(l) To maintain and operate the Property, including,
without limitation, repairmen, gardeners, janitors, security
personnel, electricians, and carpenters, provided that DPI
shall not be responsible for the actions and omissions of
such personnel and contractors.
(m) To perform such other services as may be reasonably
directed by Charthouse in the diligent management of the
Property.
(n) DPI shall comply with all laws, rules, and regulations
applicable to the performance of its obligations under this
Agreement. DPI shall take such action as shall be necessary
to comply promptly with all orders and requirements
affecting the Property or the performance of its obligations
and activities under this Agreement from any governmental
entity having jurisdiction over the Property or DPI's
activities with respect to the Property. Notwithstanding
the foregoing to the contrary, DPI shall not take compliance
action under this subparagraph if Charthouse requests DPI in
writing to contest any such order or requirement and agrees
to reimburse DPI for all fees and expenses incurred by DPI
in connection with such contest. Upon such request and
agreement, DPI shall use its best efforts to contest such
order or requirement. DPI shall obtain reimbursement for
all fees and costs incurred in connection with such contest
from Charthouse.
6. Records and Reports. DPI will furnish such information
(including occupancy reports) as may be requested by Charthouse
from time to time with respect to the financial, physical or
operational condition of the Property.
7. Reimbursement of Expenses. In addition to the
compensation payable under Paragraph 4, Charthouse shall
reimburse DPI for the costs including all goods, materials and
services used for or by Charthouse, and for all expenses of DPI
on behalf of Charthouse and directly relating to the prudent
operation of the Property and all services provided to residents
or licensees of the Property, including site bookkeeping services
and operating the Charthouse rental pool. In the case of
services performed by employees of DPI, the reimbursable costs
shall be based upon consideration of the time actually spent by
such employees in performing such services as supported by time
records multiplied by a rate established by DPI to cover the
costs directly related to the employment of such persons;
however, such amounts charged to Charthouse will not exceed those
which Charthouse generally would be required to pay to
independent parties for comparable services in the area in which
the Property is located. The amount of reimbursable expenses
shall not include amounts for time spent by the President of DPI.
8. Termination. The parties hereby agree that an integral
component of the Charthouse Suites Vacation License Plan and this
Agreement is the right of DPI to manage the Property pursuant to
this Agreement. As a result, the parties agree that DPI can only
be terminated for cause and then upon the entire payment in cash
to DPI by the successor, the third party or Charthouse of the
present value amount of the future compensation to be paid to the
Charthouse under this Agreement. For purposes of calculating the
present value amount, the parties agree to use a 8% discount rate
over the remaining term of this Agreement.
9. Entire Agreement, Amendments. This Agreement
constitutes the entire understanding between the parties hereto
with respect to the subject matter hereof. The rights and
obligations specified herein are intended to be construed as
separate and independent from any other prior, contemporaneous or
subsequent agreements among the parties hereto. No amendment or
modification of the Agreement will be valid unless made by
supplemental agreement in writing.
10. Assignability. The rights under this Agreement may be
assigned and the duties hereunder may be delegated by DPI without
the consent of Charthouse provided that such delegation shall not
relieve DPI of its obligations to Charthouse hereunder.
11. Severability. If any provision of this Agreement shall
be held to be invalid, unenforceable or illegal in any
jurisdiction under any circumstances for any reason, (i) such
provision shall be reformed to the minimum extent necessary to
cause such provision to be valid, enforceable and legal and
preserve the original intent of the parties, or (ii) if such
provision cannot be so reformed, such provision shall be severed
from this Agreement. Such holding shall not affect or impair the
validity, enforceability or legality of such provision in any
other jurisdiction or under any other circumstances. Neither
such holding nor such reformation or severance shall affect or
impair the legality, validity or enforceability of any other
provisions of this Agreement to the extent that such other
provision is not itself actually in conflict with any applicable
law.
12. Choice of Law. This Agreement shall, in all respects,
be governed by, and construed in accordance with, the internal
laws of the State of Florida.
13. Titles and Headings. All titles and headings have been
inserted solely for the convenience of the parties and are not
intended to be a part of this Agreement or to affect its meaning
or interpretation.
DECADE PROPERTIES, INC. CHARTHOUSE SUITES VACATION
OWNERSHIP, INC.
By: __________________________ By: __________________________
Jeffrey Keierleber, Jeffrey Keierleber,
President President
THIS INSTRUMENT PREPARED BY AND AFTER
RECORDING SHOULD BE RETURNED TO:
Mary Neese Fertl, Esq.
Quarles & Brady
411 East Wisconsin Avenue
Suite 2900
Milwaukee, Wisconsin 53202-4497
NONDISTURBANCE AND NOTICE TO CREDITORS
THIS NONDISTURBANCE AND NOTICE shall be effective as to all
persons, firms or entities acquiring rights or claims against the
following described property subsequent to the date hereof:
(SEE EXHIBIT "A" ATTACHED HERETO AND MADE A PART HEREOF)
1. YOU ARE HEREBY NOTIFIED that the aforementioned
property has been submitted to a certain Vacation License Plan
for Charthouse Suites, a copy of which is available from
Charthouse Suites Vacation Ownership, Inc. (the "Plan"). All
persons, firms or entities acquiring rights in the subject
property referenced herein, subsequent to the date hereof, shall
be specifically subject to all terms, conditions and provisions
of such Plan, and hereby subordinate all such right, title and
interest to the terms thereof. This Notice to Creditors shall be
binding upon all persons, firms and entities, and their
successors and assigns, acquiring rights in the subject property,
subsequent to the date hereof, and shall be for the benefit of
all Licensees of any Licenses, their successors and assigns, and
the Developer as defined in the Plan.
2. If the party seeking enforcement is not in default of
its obligations, this instrument may be enforced by both the
Seller/Developer and any Licensee of the Plan.
3. This instrument shall be effective as between the
Licensee and any of the undersigned despite any rejection or
cancellation of the License Agreement between the Licensee and
Developer during bankruptcy proceedings of the Developer.
4. So long as any of the undersigned has any interest in
the accommodations, facilities or Plan, each of the undersigned
will fully honor all the rights of the Licensees in and to the
Plan, will honor the Licensees' right to cancel their License
Agreements and receive appropriate refunds, and will comply with
all other applicable requirements of Chapter 721, Florida
Statutes, and rules promulgated thereunder.
DATED: _______________________, 1996.
DECADE PROPERTIES, INC.
a Wisconsin Corporation
250 Patrick Boulevard
Suite 140
Brookfield, WI 53045
BY:________________________________
Print Name:_____________________
STATE OF ________________________ )
) SS.
COUNTY OF _______________________ )
The foregoing instrument was acknowledged before me this
__________ day of ___________________________, 1996, by
__________________________, as ________________________, of
Decade Properties, Inc., on behalf of the corporation. He/She is
personally know to me or has produced ________________________ as
a type of identification and who did/did not take an oath.
___________________________________
Print Name:________________________
Notary Public, State of:___________
Serial Number, if any:_____________
My commission expires:
_____________________________
GUARANTEED RENTAL ARRANGEMENT
This Agreement is made this _____ day of __________, 1996 by
Charthouse Suites Vacation Ownership, Inc. ("Charthouse").
RECITALS
WHEREAS, as an incentive, Charthouse, in order to induce
persons to purchase Charthouse Suites Vacation Investment and
Ownership Interests ("Interests"), is willing to allow holders, who
purchase within a certain period of time, the right to put a
certain number of weeks of a holder's right to use the Charthouse
Suites Hotel, located in Clearwater Beach, Florida, to Charthouse,
in return for receiving certain guaranteed rates, on the terms and
conditions herein.
NOW, THEREFORE, Charthouse agrees as follows:
1. Definitions:
Effective Date Effective Date shall mean the date
the Securities and Exchange
Commission declares the Charthouse
Registration Statement for the
Interests effective.
Guaranteed Rental Rate Guaranteed Rental Rate shall mean:
Class A Interest-Standard Studio Suite $ 75.00
Class B Interest-King Studio Suite $ 75.00
Class C Interest-Large Studio Suite $ 85.00
Class D Interest-1 Bedroom $120.00
Class E Interest-1 Bedroom Suite (with lanai) $130.00
Class F Interest-Penthouse $175.00
2. Guaranteed Put Weeks. Charthouse agrees that:
(a) Holders who purchase Interests within six months of the
Effective Date (and do not cancel their subscription)
will receive the right to put six (6) weeks to
Charthouse, on the terms and conditions herein, ("Put")
and receive the Guaranteed Rental Rate or in the
alternative may elect to receive the Cash Discount Amount
set forth in Section 5(a) of this Agreement.
(b) Holders who purchase Interests between six months and one
day and nine months of the Effective Date (and do not
cancel their subscription) will receive the right to put
four (4) weeks to Charthouse, on the terms and conditions
herein ("Put"), and receive the Guaranteed Rental Rate or
in the alternative may elect to receive the Cash Discount
set forth in Section 5(b) of this Agreement.
(c) Holders who purchase Interests between nine months and
one day and one year of the Effective Date (and do not
cancel their subscription) will receive the right to put
two (2) weeks to Charthouse, on the terms and conditions
herein ("Put"), and receive the Guaranteed Rental Rate or
receive the Cash Discount set forth in Section 5(c) of
this Agreement.
3. Put Procedures. In order to exercise the Put (described in
Section 2), a holder must:
(a) give Charthouse written notice of their intent to
exercise the Put at least 30 days prior to the beginning
of the unit week desired to be Put;
(b) Put the entire unit week to Charthouse;
(c) exercise the Put within 5 years after the Effective Date;
(d) be current with all license payments (if paying by
installment), annual dues, and special assessment, if
any, for the Interest.
Provided that, notwithstanding the foregoing, Charthouse
may reject the Put if it has received 5 requests for the
requested unit week (Charthouse will accept requests in
the order of receipt). Furthermore, this guarantee is
conditioned upon there being no action threatened,
pending or taken, which makes the Charthouse Rental Pool
or the Guaranteed Rental Arrangement illegal, or
otherwise restricts or prohibits the ability of
Charthouse to use the unit week.
4. Consequence of Exercise. Charthouse agrees to forward the
funds from the Guaranteed Rental Arrangement within 60 days of
its acceptance of the Put. Upon the acceptance of the Put,
Charthouse will have the exclusive right to use, exchange, or
rent the suite and may collect and retain all revenue arising
from its use or rent of the suite. A holder may not withdraw
a Put request without Charthouse's consent.
5. Cash Discount. In place of the Guaranteed Rental Arrangement,
a holder may elect to receive the following Cash Discount
Amount on the subscription price.
(a) Holders who purchase Interests within six months of the
Effective Date (and do not cancel their subscription) may
elect to receive a Cash Discount of 5% from the price of
the Interest.
(b) Holders who purchase Interests between six months and one
day and nine months of the Effective Date (and do not
cancel their subscription) may elect to receive a Cash
Discount of 3% from the price of the Interest.
(c) Holders who purchase Interests between nine months and
one day and one year of the Effective Date (and do not
cancel their subscription) may elect to receive a Cash
Discount of 1-1/2% from the price of the Interest.
6. Annual Dues and Licensing Payments. Nothing in this Agreement
shall change a holder's responsibilities to pay license
payments, annual dues or special assessments. Charthouse may
elect to retain the proceeds from the Guaranteed Rental
Arrangement and apply the funds against past due license or
annual dues.
7. Amendment. Charthouse may amend this Agreement, provided that
any amend-ment does not reduce the cash benefit to be received
by a holder.
Agreed to as of the date set
forth above.
________________________________
Charthouse Suites Vacation
Ownership, Inc.
Its: ___________________________
MASTER LICENSE AGREEMENT
This Master Vacation License Agreement (the "Agreement") is
made this _____ day of __________, 1996, by and among Decade
Properties, Inc., a Wisconsin corporation ("DPI"), and Charthouse
Suites Vacation Ownership, Inc., a Florida corporation
("Charthouse").
WHEREAS, DPI is the owner in fee simple of the real property
described on Exhibit A attached hereto, which includes the
Charthouse Suites Hotel (the "Property"), and pursuant to the
terms and conditions set forth below, will enter into this
Agreement to license use of the Charthouse Suites Hotel and the
services noted herein on the terms and conditions specified
herein; and
WHEREAS, by this Agreement the parties seek to implement the
general principle that Charthouse will have the right to sell
Charthouse Suites Vacation Investment and Ownership Interests
("Interests"), as described in both the Charthouse Suites
Vacation License Plan, dated __________, 1996, and the
prospectus, as may be amended from time to time, for the
Interests, and furthermore, that DPI will be taxed for receipt of
funds under this Agreement only upon the earlier of the date of
receipt of cash from Charthouse in payment of its obligations
hereunder or the date whereby services pursuant to this Agreement
are provided to Charthouse.
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, the parties agree to allow Charthouse
use of the Property, as specified below.
I. Assignment of Master License
1.1. DPI will have the right to sole exclusive use or
rental of the Property until Charthouse indicates that it intends
to sell an Interest at which point the 8 unit weeks of a
particular category of hotel suite for the respective category or
type Interest will be reserved for the specific Unit Weeks (as
defined in the Charthouse Suites Vacation License Plan) provided
that DPI retains the exclusive use of the specific suites on the
dates shown on Exhibit B (which total 4-5 weeks a year for each
hotel suite). At such time DPI receives a notice from
Charthouse, DPI will reserve a hotel suite of the category
specified in a written notice from Charthouse, and Charthouse
agrees to pay DPI for the use of the hotel suite and the services
provided herein on the terms set forth in Section 1.4. DPI also
agrees to provide services to Charthouse and be compensated for
such services, as set forth in the Property Management Agreement,
dated __________, 1996.
1.2. Charthouse agrees not to sell Interests during the
weeks identified as DPI weeks on Exhibit B, which shall remain
the sole property of DPI, provided, however, that DPI reserves
the right to allow Charthouse to sell rental or use of the hotel
suite for such unit weeks at its sole discretion or to exchange
such weeks for other weeks with DPI's permission, which may be
withheld for any reason. Charthouse agrees that it will acquire
no rights to use or occupy the marina on the Property.
1.3. Upon the sale of an Interest, DPI agrees to assist
Charthouse in complying with the terms of the Charthouse Suites
Vacation License Plan, dated __________, 1996.
1.4. Upon receipt of a notice that Charthouse intends to
sell an Interest, Charthouse agrees to pay DPI for the license
and services offered herein in accordance with the terms shown on
Exhibit C attached hereto.
II. Maintenance Obligation
2.1. DPI agrees to be responsible for the maintenance,
repair and replacement of the Property, including the Charthouse
Suites Hotel, and to maintain the Property at its current or
superior state. DPI will also provide front desk and reservation
services. Charthouse agrees to pay for its pro rata share of the
costs of maintenance, repair, replacement and common expenses,
based upon Unit Weeks as set forth in the Charthouse Suites
Vacation License Plan or such other agreements. Charthouse
agrees to operate the Property in accordance with the Rules and
Regulations. Such Rules and Regulations may be amended with the
consent of DPI, which shall not be unreasonably withheld.
Charthouse may also obtain, maintain and enforce policies of
insurance on the Property.
III. Termination
3.1. Notwithstanding any provision in any instrument, in
the event that less than 76 Interests, of any type, are sold by
Charthouse as of December 31, 1997, DPI shall have the right to
cancel this Agreement and refund amounts in accordance with
Exhibit C attached hereto.
3.2. This Agreement shall also terminate upon the earlier
of:
a. December 31, 2050; or
b. the date when Interests are held by no one other
than DPI or an affiliate, provided that this provision shall
not become effective until at least one Interest has been
purchased by a person other than DPI.
IV. Partition
4.1. No party or any other person or entity acquiring any
right, title or interest in a License shall be entitled to seek
or obtain, through any legal procedures, judicial partition of
the Property or sale of the Property in lieu of partition. It is
understood that the License interest does not constitute real
estate.
V. DPI's Interest
5.1. DPI's remainder interest is all interests in the
property, excluding the license granted to Charthouse to use the
Property pursuant to this Agreement which terminates on December
31, 2050 or such earlier date as provided above (the "Remainder
Interest").
5.2. The Remainder Interest is transferable by DPI in its
sole and absolute discretion. The holder of the Remainder
Interest shall have the following rights under the Agreement:
a. To enforce all provisions of the Agreement against
holders of Interests and Charthouse, including, but not
limited to, through an action for specific performance.
b. To be named as an additional insured under all
insurance policies as its interest may appear.
c. To be entitled to share in any award under a
condemnation proceeding as its interest may exist.
d. The consent of the holder of the Remainder
Interest shall be required for any termination of the Plan,
any amendment that adversely affects its interests and any
amendment of this Article.
5.3. In any litigation brought by the holder of the
Remainder Interest, the holder of the Remainder Interest shall be
entitled to recover its costs and attorneys' fees in the event it
is the successful party, including such costs and fees on appeal.
5.4. Notwithstanding the existence of the Remainder
Interest, the Licensees shall be responsible for all Common
Expenses and taxes for the Property without any right of
contribution against the holder of the Remainder Interest.
5.5. Except for the right to occupy hotel suites and
receive the services offered hereunder, no license or rights
under any other trademark, trade name, or trade dress or any
other property right of DPI is granted by this Agreement.
VI. Amendment and Non-Waiver
6.1. This Agreement may not be altered or amended nor any
rights hereunder be waived, except by an instrument in writing
executed by the party or parties to be charged with such
amendment or waiver.
6.2. No waiver of any term, provision or condition of this
Agreement or failure to exercise any right, power or remedy or
failure to enforce any provision of this Agreement, in any one or
more instances, shall be deemed to be a further or continuing
waiver of any such term, provision or condition or as a waiver of
any other term, provision or condition or enforcement right of
this Agreement or deemed to be an impairment of any right, power
or remedy or acquiescence to any breach.
VII. Miscellaneous
7.1. This Agreement and the transactions contemplated
hereby shall be construed in accordance with and governed by the
internal laws of the State of Florida.
7.2. This Agreement and the documents referred to herein
constitute the entire understanding of the parties hereto with
respect to the subject matter hereof, superseding all
negotiations, prior discussions and prior agreements and
understandings relating to such subject matter.
7.3. Charthouse may not assign its rights or delegate any
of its duties under this Agreement without prior written consent
of DPI. This Agreement shall be binding upon, and shall inure to
the benefit of, the parties hereto and their respective
successors and assigns. Nothing contained in this Agreement,
express or implied, is intended to confer upon any third party
any benefits, rights or remedies.
7.4. If any provision of this Agreement shall be held to be
invalid, unenforceable or illegal in any jurisdiction under any
circumstances for any reason, (i) such provision shall be
reformed to the minimum extent necessary to cause such provision
to be valid, enforceable and legal land preserve the original
intent of the parties, or (ii) if such provision cannot be so
reformed, such provision shall be severed from this Agreement.
Such holding shall not affect or impair the validity,
enforceability or legality of such provision in any other
jurisdiction or under any other circumstances. Neither such
holding nor such reformation or severance shall affect or impair
the legality, validity or enforceability of any other provisions
of this Agreement to the extent that such other provision is not
itself actually in conflict with any applicable law.
7.5. All titles and headings have been inserted solely for
the convenience of the parties and are not intended to be a party
of this Agreement or to affect its meaning or interpretation.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be executed by their duly authorized officers as of this _____
day of __________, 1996.
DECADE PROPERTIES, INC.
By: ____________________________
Its: ___________________________
CHARTHOUSE SUITES VACATION
OWNERSHIP, INC.
By: ____________________________
Its: ___________________________
<PAGE>
EXHIBIT A
CHARTHOUSE SUITES HOTEL REAL PROPERTY DESCRIPTION
<PAGE>
EXHIBIT B
DECADE PROPERTIES, INC. RETAINED WEEKS
<PAGE>
EXHIBIT C
PAYMENT TERMS
Upon sale of an Interest (and after the 10 day cancellation
period has passed) Charthouse agrees to pay DPI the following
amounts within 10 days of receipt of any payments for any
Interests (as set forth in the prospectus):
(1) If an Interest is paid in full [73]% of the amounts
received by Charthouse; or
(2) If payments are made on an installment basis, 50% of
all Interest payments received by Charthouse within 12
months of when DPI has initially sold the Interest, and
thereafter 84% of all Interest payments received by
Charthouse. If Charthouse desires to retain an
Interest even after a Holder has defaulted on his
payments, Charthouse shall be required to pay DPI 84%
of the minimum payment for an Interest, based upon its
normal installment payment.
This document was drafted by and after
recording should be returned to:
Mary Neese Fertl, Esq.
Quarles & Brady
411 East Wisconsin Avenue
Suite 2900
Milwaukee, WI 53202
NON-EXCLUSIVE EASEMENT
NON-EXCLUSIVE EASEMENT made and entered into as of the ____
day of __________, 1996 by DECADE PROPERTIES, INC., a Wisconsin
corporation ("Grantor") and CHARTHOUSE SUITES VACATION OWNERSHIP,
INC., a Florida corporation ("Grantee").
RECITALS:
WHEREAS, the Grantor is the owner of the real estate located
in Pinellas County, Florida legally described on attached Exhibit
A (the "Property");
WHEREAS, the Grantee has acquired from the Grantor a right
to use certain suites in the Charthouse Suites Hotel pursuant to
a certain Master License Agreement dated _______________, 1996;
and
WHEREAS, the Grantor has also agreed to grant to the Grantee
a non-exclusive easement for use and enjoyment of certain common
areas as described herein.
NOW, THEREFORE, in consideration of the sum of TEN AND
NO/100 DOLLARS ($10.00) and other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, it is hereby agreed as follows:
1. Grant of Easement. The Grantor hereby grants,
bargains, sells, conveys and transfers unto the Grantee a non-
exclusive easement for the use and enjoyment of certain common
areas as described in Paragraph 2 below of the Property (the
"Common Areas"), subject to the terms of this Agreement, from the
date hereof until December 31, 2050, unless sooner terminated as
provided in this Agreement. It is understood that the Grantee
may grant to the holders of Vacation Ownership Interests in the
Charthouse Suites pursuant to License Agreements executed between
the Grantee and such holders, rights to the use and enjoyment of
said Common Areas. Such rights may be used by such holders of
Vacation Ownership Interests, their respective families, guests,
invitees, tenants, contract vendees and such other persons to
whom the Grantee may from time to time, extend the privilege of
use and enjoyment of the Common Areas. It is understood the
Grantor reserves for itself, its successors and assigns and all
other users of the Charthouse Suites Hotel and Marina the right
to the use and enjoyment of the Common Areas in common with the
Grantee and the holders of Vacation Ownership Interests.
2. Common Areas. The Grantee shall only have the right to
use and enjoyment of those areas designated as Common Areas. The
Common Areas shall consist of the areas described on attached
Exhibit B and no other areas of the Property. The Grantee shall
have no right to enter upon or the right of use and enjoyment of
any area or other part of the Property except as designated as a
Common Area on Exhibit B attached hereto or to which the Grantee
has been granted any other rights of use thereof pursuant to the
Master License. It is understood that the Marina is not a part
of the Common Areas and the Grantee shall have no rights
whatsoever with respect to the Marina.
3. Repairs, Maintenance and Replacements. The Common
Areas shall be maintained in good, clean, sanitary, and operating
condition and in compliance and in conformity with all applicable
laws, ordinances, rules and regulations whatsoever. All
maintenance, replacement and repair required hereunder shall at
all times be completed and performed in a first-class workmanlike
manner. All costs of maintenance, repair and replacements shall
be divided among the parties having the right to control the use
of the various hotel suites in the Property with each category of
suite being responsible for the following percentages:
Class A 14.5716%
Class B 11.4284%
Class C 22.7142%
Class D 31.2858%
Class E 11.2858%
Class F 8.7143%
The percentage share of said expenses allocated to the particular
class of suite shall be divided between the Grantor and the
Grantee based on the party who has the right to control the
particular weeks in the particular class of suite.
4. Indemnity. The Grantee hereby agrees to indemnify and
hold harmless the Grantor and its successors and assigns from any
and all suits, actions, causes of action, liabilities, claims,
damages or judgments arising out of the use and enjoyment of the
Common Areas by the Grantee or by others claiming by, through or
under the Grantee, including without limitation court costs and
reasonable attorneys' fees.
5. Termination. It is understood that this Agreement and
the rights granted to the Grantee hereunder shall immediately
terminate on the earlier of the following events:
A. The termination of the Master License Agreement;
B. The default by the Grantee in payment and
performance of all of the provisions of this
Agreement, which default is not cured within
thirty (30) days after written notice of such
default is given by the Grantor; or
C. December 31, 2050.
Upon such termination, all rights of the Grantee under this
Agreement shall terminate, provided that Grantee's
indemnification responsibilities under Paragraph 4 above shall
continue and survive said termination.
6. Attorney Fees. If any party hereto shall seek legal
recourse to enforce or effectuate the performance of this
Agreement, the prevailing party shall be entitled to recover all
costs and expenses of enforcement, including without limitation,
reasonable attorney fees and court costs.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
GRANTOR:
DECADE PROPERTIES, INC.
Witnesses:
________________________________ By: __________________________
________________________________
GRANTEE:
CHARTHOUSE SUITES VACATION
OWNERSHIP, INC.
Witnesses:
________________________________ By: __________________________
________________________________
ACKNOWLEDGMENT
STATE OF ______________ )
) ss
COUNTY OF _____________ )
The foregoing instrument was acknowledged before me this ___
day of __________ 1996 by _________________________ as
_________________________ of Decade Properties, Inc. on behalf of
said corporation. He/She is personally known to me or has
produced _______________ as identification and who (did/did not)
take an oath.
________________________________
Notary Public
State of _______________________
My Commission expires: _________
ACKNOWLEDGMENT
STATE OF ______________ )
) ss
COUNTY OF _____________ )
The foregoing instrument was acknowledged before me this ___
day of __________ 1996 by _________________________ as
_________________________ of Charthouse Suites Vacation
Ownership, Inc. on behalf of said corporation. He/She is
personally known to me or has produced _______________ as
identification and who (did/did not) take an oath.
________________________________
Notary Public
State of _______________________
My Commission expires: _________
<PAGE>
EXHIBIT A
(LEGAL DESCRIPTION)
<PAGE>
EXHIBIT B
COMMON AREAS
1. Pool and Pool Area.
2. All grounds (exclusive of the hotel building) except the
marina.
3. All driveways and parking areas located upon the Property.
4. All elevators, hallways and stairways within the hotel
building.
5. The laundry room and facilities.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Financial Data Schedule for Charthouse Suites Vacation Ownership, Inc.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> AUG-31-1996
<PERIOD-END> AUG-31-1996
<CASH> 9,733
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 10,000
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 10,000
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 10,000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 10,000
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
