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EXHIBIT 10.16
NONEXCLUSIVE LIMITED ASSIGNMENT
This NONEXCLUSIVE LIMITED ASSIGNMENT ("Assignment") is dated for
reference purposes September 20, 1996 by and between TRENDWEST RESORTS, INC.,
an Oregon corporation ("Trendwest") and RUNNING Y, INC., ("Developer") and
pertains to the Vacation Owner Program known as WORLDMARK, THE CLUB, a
California nonprofit mutual benefit corporation ("Club").
TABLE OF CONTENTS
Article/Section Page
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1: RECITALS.................................................... 2
1.1 Declarant........................................... 2
1.2 Club................................................ 2
1.3 Memberships/Vacation Credits........................ 2
1.4 Trendwest's Rights & Powers......................... 2
1.5 Definitions......................................... 3
2: ASSIGNMENT.................................................. 3
2.1 Annexation.......................................... 3
2.2 Sales Proceeds...................................... 3
2.3 Resales............................................. 3
3: DEVELOPER DUTIES AND ASSUMPTION............................. 3
3.1 Club Assessments.................................... 4
3.2 Declaration......................................... 4
3.3 Property Expenses................................... 4
3.4 Sales Expenses...................................... 4
3.5 Trendwest Fee....................................... 4
3.6 Compliance.......................................... 4
3.7 Legal Review........................................ 4
3.8 Sales Regulation.................................... 4
3.9 Land Use Regulation................................. 4
3.10 Construction and Improvements....................... 5
3.11 Representations and Warranties...................... 5
3.12 Further Interest.................................... 5
3.13 Limited Authority................................... 5
3.14 Complaints.......................................... 5
3.15 Defaults and Remedies............................... 5
4: TRENDWEST SERVICES AND DUTIES............................... 6
4.1 Inspection and Approval............................. 6
4.2 Allocation of Vacation Credits...................... 6
4.3 Sales Regulation.................................... 6
4.4 No Supervision...................................... 6
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Article/Section PAGE
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5: GENERAL PROVISIONS...................................... 6
5.1 Assignment...................................... 6
5.2 Amendment....................................... 7
5.3 Assignment...................................... 7
5.4 Attorney's Fees................................. 7
5.5 Entire Agreement................................ 7
5.6 Headings........................................ 7
5.7 Hold Harmless and Indemnity..................... 7
5.8 Law Applicable.................................. 8
5.9 Legal Effects and Return........................ 8
5.10 Notices......................................... 8
5.11 Severability.................................... 8
5.12 Successors...................................... 8
5.13 Survival........................................ 8
5.14 Termination..................................... 8
5.15 Waiver.......................................... 9
5.16 Word Usage...................................... 9
5.17 Exhibits........................................ 9
6: SIGNATURES.............................................. 9
CONSENT (Of Club)............................................... 10
1: RECITALS. The following Recitals are acknowledged and agreed to by the
parties.
1.1 Declarant. Trendwest is the founder of the Club and the
Declarant under the "Declaration of Vacation Owner Program (WorldMark, The
Club)" ("Declaration") recorded for each Property annexed to the Club and
dedicated to the Vacation Owner Program. Trendwest is also the Manager of the
Club under a Management Agreement dated February 13, 1991.
1.2 Club. The Club is an association of the owners of Memberships
in the Club and the owner or lessee of the various Property to be available to
its Members for resort and recreational use pursuant to the Club Governing
Documents. The Club was formerly known as CLUB ESPRIT.
1.3 Memberships/Vacation Credits. Memberships in Club are sold by
Trendwest to the general public in the form of Vacation Credits, which are
allocated to each Property based on its relative value as a resort in the Club
Vacation Owner Program. A Membership is in perpetuity or for a prescribed term
of years, and constitutes a vacation license, which means a right to use and
occupy Units in the Property available through Club from time to time,
according to the reservation rules.
1.4 Trendwest's Rights and Powers. Under the Declaration Trendwest
has the right to annex additional Property to the Club and to sell for its own
account the Vacation Credits allocated to each Property.
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1.5 Definitions. Unless the context otherwise requires, the
definitions set forth in the most recently recorded Declaration are hereby
adopted as the definitions herein.
2: ASSIGNMENT. Trendwest hereby assigns to Developer, on a
nonexclusive basis and specifically limited as expressed herein, the following
rights and powers:
2.1 Annexation. Developer may annex to Club the Property described
on Exhibit One attached hereto by conveying or directing conveyance of
marketable fee title in the Property to the Club free of all liens, charges and
encumbrances other than customary restrictions relating to condominiums and
easements for ingress and egress and utilities. Future annexations may be
conveyed to the Club by the written agreement of Running Y and Trendwest in a
form as set forth in Exhibit Two ("Addendum to Nonexclusive Limited
Assignment"). Trendwest reserves the absolute right, in its sole discretion, to
reject the annexation of any property from Developer to the Club. All property
annexed to Club pursuant to this Agreement shall be referred to as the
"Developer Property." Title insurance shall be provided at Developer's expense.
The title policy to be issued shall contain no exceptions other than the
General Exclusions and Exceptions in a standard form title policy and Special
Exceptions consistent with the condition of title. Title shall be conveyed by
Statutory Warrant Deed. All costs of closing, including title insurance, escrow
fees, real estate excise tax, or any other taxes or fees shall be paid by
Developer.
2.2 Right to sell Vacation Credits. Trendwest hereby grants to
Developer the non-exclusive right to market and sell Vacation Credits, subject
to the terms and conditions of this Agreement. Developer may sell for its own
account and retain all of the gross proceeds from the sale of the Vacation
Credits allocated to the Developer Property, subject to payment of the fee set
forth in Section 3.5. Under no circumstances shall Developer sell more Vacation
Credits than have been allocated to the Developer Property.
2.3 Resales. Developer shall be entitled to resell Vacation Credits
originally sold by it if they are repossessed by the Club or by Developer and
still subject to a purchase money security interest in Developer, subject to
reimbursement to the Club for amounts owed to the Club pursuant to such
Vacation Credits. Following expiration of any purchase money security interest
in Developer, Developer has no interest in or claim against such Vacation
Credits.
3: DEVELOPER DUTIES AND ASSUMPTION. Developer hereby assumes the
duties and obligations associated with the limited assignment of rights herein,
specifically, but not limited to, the following:
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3.1 Club Assessments. Developer shall pay to Club all assessments
and other charges levied pursuant to the Club Governing Documents as to all
unsold Vacation Credits allocated to the Developer Property for which Developer
has an interest in the sales proceeds, whether not yet sold or repossessed.
3.2 Declaration. Developer shall record a Declaration with the Club
as Co-Developer, substantially similar to the Declarations recorded by
Trendwest.
3.3 Property Expenses. Developer shall be solely responsible for
all costs and expenses associated with acquisition, construction, remodeling,
furnishing, inspection, appraisal and/or conveying the Developer Property.
3.4 Sales Expenses. Developer shall be solely responsible for all
costs and expenses associated with marketing and selling the Vacation Credits
allocated to the Developer Property, including the costs of advertising and
preparing and printing sales documents and copies of the Governing Documents.
3.5 Trendwest Fee. For its services under and for making this
Assignment, Trendwest shall receive from Developer a fee of three percent (3%)
of the selling price of the Vacation Credits allocated to the Developer
Property, to be paid within twenty (20) days after the month in which the sale
of the Vacation Credits was made.
3.6 Compliance. Developer shall conform its Declaration, sales
documents, representations and relations with Club Members and prospective
Members to the Club Governing Documents and to all applicable laws, ordinances
and regulations.
3.7 Legal Review. If requested by Trendwest, Developer shall obtain
at its own expense and by legal counsel reasonably acceptable to Trendwest,
legal review of its sales and consumer documentation, advertising, and
regulatory filings.
3.8 Sales Regulation. Developer shall, at its own expense, comply
completely with, all Federal, state and local subdivision or timeshare sales
regulatory and consumer protection laws, regulations and ordinances, relating
to the annexed property. The Club may join with Developer in its regulatory
filings. Developer shall also pay all direct expenses for registering the
Developer Property in all jurisdictions where the Club is registered by
Trendwest, even if Developer is not selling or advertising there. Such costs
shall include, but not be limited to, filing fees, appraisal and inspection
fees. (See sec. 4.3)
3.9 Land use regulation. Prior to conveyance to the Club, Developer
shall obtain any clearances or permits necessary to allow the use of the
Developer Property as a Club Property.
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3.10 Construction and Improvements. Developer shall complete all
construction, remodeling, improvements and interior furnishing of the Developer
Property, subject to the specifications required by Trendwest, prior to
conveyance to the Club.
3.11 Representations and Warranties of Developer. With respect to
any Developer Property, Developer hereby represents and warrants to Trendwest
and the Club as follows:
a. Compliance with Environmental Laws. Neither the Developer nor any
person (including any previous owner, lessee, sublessor or sublessee) has
generated, handled, used, manufactured, processed, distributed in commerce,
transported, treated, stored, disposed, released (or arranged for the
transportation, treatment or disposal) of petroleum products, hazardous waste,
hazardous chemical or substances, toxic chemicals, chemical substances or
mixtures, pollutants or contaminants on, at or from the Developer Property, or
any other assets or properties owed, leased or subleased or used by the
Developer in the operation of its business or on, at or from any real property
to which any of the above-listed substances from the above-listed assets or
properties were transported, or at or on which they were treated or disposed
that could subject the Developer, Trendwest or the Club to liability under any
provision of law, including without limitation, federal, state local or common
law, in each case as in existence on or after the date the Developer Property
is annexed to the Club.
b. Construction Quality. The Developer Property has been built in
accordance with the plans and specifications approved by Trendwest, and has
been constructed in accordance with all applicable building, fire and
electrical codes and all other governmental regulations applicable to the
Developer Property. All work done in construction of the Developer Property was
completed in a good and workmanlike manner and all materials utilized in such
construction were of good quality. To the best knowledge of the Developer, the
Developer Property is free of any and all material defects.
3.12 No Further Interest. Developer acknowledges that after
conveyance of the Developer Property to the Club, Developer shall have no claim
or interest in the Developer Property, except as may be provided in this
Assignment, and no further claim or interest in Vacation Credits sold by it
after expiration of Developer's purchase money security interest therein.
3.13 Limited Authority. Developer shall not represent or purport to
bind the Club other than through the sale or resale of Vacation Credits in the
ordinary course of business in conformity with the Club Governing Documents.
Developer shall not use the tradename or any service ▇▇▇▇ of the Club other than
in connection with the sale of Vacation Credits allocated by the
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Trendwest's name in any manner, except as it may appear in the Club Governing
Documents.
3.14 Complaints. Developer shall notify Club in writing within five
business days of becoming aware of a material complaint or dissatisfaction by a
Club Member, and deliver to Club therewith any written complaint or
correspondence from a Club Member pertaining to a complaint or dissatisfaction.
The Club is solely responsible for Member relations, but Developer agrees to
assist Club, at Club's reasonable request and direction, in resolving
complaints and dissatisfaction of Members who purchase Vacation Credits from
Developer.
3.15 Defaults and Remedies. Upon the commission of a material
default under this Assignment, or upon the failure to timely pay any amount
required to be paid or reimbursed hereunder, Club may suspend the right of
Developer to sell Vacation Credits until such time as the default or failure to
pay is cured.
4: TRENDWEST DUTIES.
4.1 Inspection and Approval. Trendwest, as Manager of the Club,
must inspect and reasonably approve the quality and harmony of the Developer
Property as Club Property regarding, but not limited to, design, size,
location, amenities (interior, project, and surrounding area) and quality of
construction, which approval must be given in writing prior to conveyance to
the Club.
4.2 Allocation of Vacation Credits. Trendwest, as Manager of the
Club, will determine the allocation of Vacation Credits on the same bases as
Vacation Credits are allocated to Property annexed by Trendwest to the Club.
4.3 Sales Regulation. Trendwest will be responsible (but at
Developer's expense) for registering the Developer Property as part of the Club
offering in all states where the Club is registered by Trendwest.
4.4 No Supervision. Trendwest shall have no right, power or
obligation to assist, supervise or control financial terms, manner or means by
which Developer develops the Developer Property.
5: GENERAL PROVISIONS.
5.1 Agency. Nothing in this Assignment shall be construed as
constituting a partnership between, or joint venture by, the parties hereto, or
constitute either party the agent or employee of the other.
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5.2 Amendment. No supplement, modification or amendment of this
Assignment shall be binding unless in a writing executed by each of the parties.
5.3 Assignment. This Assignment is personal between the parties,
and neither party may sell, assign, transfer, or hypothecate any rights or
interests created under this Assignment without the express written consent of
the other party. Any purported sale, assignment, transfer, or hypothecation of
any such rights or interests of any party without such consent shall be void.
5.4 Attorneys' Fees. Upon a material default or commission of a
tort hereunder by one party, the other party shall be entitled to attorney fees
and costs reasonably incurred in connection with such default or tort, whether
or not legal or arbitration proceedings are undertaken. Should any action or
proceeding be commenced between the parties hereto concerning this Assignment
or their rights and duties hereunder, the party prevailing in such action or
proceeding shall be entitled to actual attorneys' fees and costs in such action
or proceeding. Each party shall bear its own costs, expenses, and attorney
fees incurred in negotiating, preparing, and signing this Assignment.
5.5 Entire Agreement. This Assignment, the Club Governing
Documents, and all documents signed at the same time and/or specifically
referred to herein constitute the complete, exclusive and final expression of
the agreement between the parties pertaining to the subject matter contained
herein, and no party has made or relied on any oral representations or
assurances not contained herein. This Assignment supersedes all prior and
contemporaneous agreements, representations, and understandings of the parties;
and it may not be contradicted by evidence of any prior or contemporaneous
agreement. No extrinsic evidence whatsoever may be introduced in any
proceeding concerning the terms of this Assignment. There is no representation
or inference that Developer will be able to annex additional Property to the
Club.
5.6 Headings. The paragraph or section headings or titles in this
Assignment are for convenience and reference only and do not in any way modify,
interpret, or construe the intent of the parties or affect any of the
provisions of this Assignment.
5.7 Hold Harmless and Indemnity. Each of the parties agrees to
hold the other party harmless and indemnify the other party from and against
any and all loss, cost, damage or liability which the other party may incur or
sustain as a result of any action by such party or for any breach by such party
of any warranty or representation contained in this Assignment, or for any
misrepresentation or material omission in the representations herein, or for
any violation of any applicable law, ordinance or regulation, whether by
neglect or willful act
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and whether by a party or its agents, contractors, or employees. Such
indemnification shall include, among other costs, administrative costs, civil
penalties, attorneys' fees and costs of appeal, settlement or defense, and the
obligation to undertake or assume the defense of any claim.
5.8 Law Applicable. This Assignment and its interpretation,
construction, and enforcement, shall be governed by the laws of the State of
Oregon.
5.9 Legal Effects and Return. No representation, warranty or
recommendation is made by any party or its respective agent or attorney
regarding the legal sufficiency or effect, financial return, or tax
consequences of any transaction contemplated under this Assignment to any
individual or specific entity, and each party acknowledges it has been advised
to submit this Assignment to independent legal counsel before signing it. There
shall be no presumption in favor of or against any party with regard to which
party arranged for initial drafting of this Assignment.
5.10 Notices. Any notice required or desired to be given hereunder
shall be deemed given if personally delivered, properly sent by facsimile
transmission, or ninety-six (96) hours after mailing (first class postage
prepaid, return receipt requested), to the parties at the following addresses,
or at such other addresses as may be given by proper notice:
5.10(a) TRENDWEST: TRENDWEST RESORTS, INC., ▇▇▇▇▇ ▇.▇. ▇▇▇▇
▇▇., ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇; facsimile transmittal (▇▇▇) ▇▇▇-▇▇▇▇.
5.10(b) DEVELOPER: Running Y, Inc., ▇▇▇ ▇. ▇▇▇ ▇▇., ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇; facsimile transmittal (▇▇▇) ▇▇▇-▇▇▇▇.
5.11 Severability. If any provision of this Assignment is held to be
unenforceable, invalid or illegal by any arbitrator or court of competent
jurisdiction, such shall not affect the remainder of this Assignment.
5.12 Successors. Subject to Section 5.3 regarding assignment, this
Assignment shall be binding upon and benefit the heirs, legal representatives,
successors, and assigns of the parties.
5.13 Survival. All provisions, covenants, and warranties hereunder
shall survive the conveyance of the Developer Property to the Club.
5.14 Termination. This Agreement shall be terminable by either party
within thirty (30) days of written notice given to the other party by certified
mail, return receipt requested, directed to the address set forth in paragraph
5.10 above, as amended.
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5.15 Waiver. No waiver of enforcement or breach of any of the
provisions of this Assignment shall be deemed, or shall constitute, a waiver of
any other provisions, whether or not similar, nor shall any waiver constitute a
continuing waiver. No waiver shall be binding unless in writing and signed by
the person making the waiver.
5.16 Word usage. Unless the context clearly otherwise requires, (a)
the plural and singular numbers or the masculine, feminine and neuter genders
shall each be deemed to include the others; (b) "shall", "will", or "agrees"
are mandatory, and "may" is permissive; (c) "or" is not exclusive; and (d)
"including" is not limiting.
5.17 Exhibit. The following Exhibits are attached hereto and
incorporated herein by this reference:
Exhibit One - DEVELOPER PROPERTY DESCRIPTION
Exhibit Two - ADDENDUM TO NONEXCLUSIVE LIMITED ASSIGNMENT
6: SIGNATURES. The individuals applying their signatures to this
Assignment warrant that they are signing for themselves individually, or if
signing in a representative capacity for a person or entity whose name is set
forth immediately above their signature, and that they have been expressly
authorized to sign the Assignment on behalf of such person or entity.
Signed effective the date first above written.
TRENDWEST: DEVELOPER:
TRENDWEST RESORTS, INC., RUNNING Y, INC.,
an Oregon Corporation an Oregon Corporation
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President ▇▇▇▇▇ ▇▇▇▇▇▇, President
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EXHIBIT ONE
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DEVELOPER PROPERTY DESCRIPTION
That Certain real Property located in the City of (in unincorporated Klamath
county), County of Klamath, described as follows: ▇▇▇ ▇▇, ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇, according to the official plat recorded August 2, 1996, on file in the
office of the Klamath County Clerk, and all improvements located thereon;
located in the County of Klamath, State of Oregon.
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EXHIBIT TWO
ADDENDUM TO
NONEXCLUSIVE LIMITED ASSIGNMENT
This Addendum is to the Nonexclusive Limited Assignment between
Trendwest Resorts and RUNNING Y, INC., dated September 20, 1996.
This Addendum is made pursuant to the Annexation section of that
Assignment (Sec. 2.1). It is agreed between Trendwest Resorts and Eagle Crest
properties that the following described property shall be annexed into
WorldMark, The Club under the terms of the above referenced assignment.
That certain real property located in the County of Deshutes, Oregon,
described as follows: Condominiums ___________, inclusive, as set forth
on that certain plan entitled "Condominium Plan of ___________________
Condominiums" ("Plan") consisting of ___________ (___) sheets recorded
on ___________, 19__, in Book _____ of Maps at pages _____,
______________ County Records, _____, which constitute a condominium
plan for the _________________ Condominium Project ("Project"), which is
located on the land described as Parcel _____ as shown on the "Final Map
of ______________ ("Map") consisting of ________ (___) sheets recorded
on ___________, 19__, in Book _____ of Maps at Pages _____,
_____________________ County Records, _______________.
The persons applying their signatures to this Addendum are signing in a
representative capacity for the entity whose name is set forth immediately
above their signature, and that they have been expressly authorized to sign
the Addendum on behalf of such entity.
TRENDWEST RESORTS: RUNNING Y, INC.:
TRENDWEST RESORTS, INC., RUNNING Y, INC.,
an Oregon Corporation an Oregon Corporation
By By
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President ▇▇▇▇▇ ▇▇▇▇▇▇, President
