at Infinity Bay Spa & Beach Resort Rental Management Agreement This Rental Management Agreement ( Agreement ) is made and entered by and between:
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1 Infinity Bay Spa & Beach Resort Rental Management Agreement This Rental Management Agreement ( Agreement ) is made and entered by and between: Cascade Capital Group Investments, S.A. de C.V. dba Infinity Bay Spa & Beach Resort West Bay, Roatan, Honduras (US Mailing Address: 220 West 7 th Ave, Eugene, OR 97401) ( Declarant ) And Owner Name(s) Unit # Mailing Address at Infinity Bay Spa & Beach Resort ( Owner ) Contact Person (if different than above) Address Mobile Phone# Home Phone# Office Phone# WHEREAS, Owner is the owner of or has contracted to purchase condominium villa number ( Unit ), which is part of the condominium villas known as Infinity Bay Spa & Beach Resort ( Resort ), which Resort is governed by the Declaration of Covenants, Conditions, Restrictions, Easements, Charges and Management dated September 27, 2007 (the Declaration ); WHEREAS, Declarant, as developer of the condominium villas comprising the Resort, has established a program whereby it, or its delegate, such as a third party operator acting on its behalf, will manage a voluntary rental program being made available to owners of condominium villas within the Resort for transient lodging as part of the Resort operation ( Rental Program ); WHEREAS, Owner desires to (i) make the Unit available for participation in the Rental Program, and (ii) engage the services of Declarant as exclusive rental agent and manager to offer the Unit for rental on the terms and conditions set forth below. NOW, THEREFORE, in consideration of the terms, conditions, and the mutual covenants herein set forth, the parties agree as follows: Section 100. Owner hereby retains Declarant as its sole and exclusive rental agent and manager for purposes of renting the Unit to Resort guests, and Declarant agrees to act as such exclusive rental agent and manager subject to the terms and conditions set forth herein. Except as specifically provided in this Agreement, all decisions concerning the day-to-day operation of the Unit as a transient rental accommodation shall be made by Declarant, including, but not limited to, decisions regarding rental rates, marketing, staffing, maintenance, housekeeping, reservation policies, and collection of rental proceeds. Owner agrees and acknowledges that the names, addresses and telephone numbers of guests who rent the Unit is a privacy issue between Manager and guest and belongs to the Manager and shall not be available for inspection except as required by law. Section 200. All remuneration from the rental of the Unit ( Rental Revenue ) shall be collected through Declarant. The first 18% of the Rental Revenue collected shall be paid to Declarant or its assigns as a management fee for the services to be performed by Declarant under this Agreement. Section 201. Monies shall be deducted from the collected Rental Revenue by Declarant for all expenses incurred during the normal business practices of operating a resort. This includes but is not limited to staffing and labor, taxes, cleaning and other supplies, replacement of broken or worn appliances, linens, tableware, furniture, accessories, art, etc. The expenses and assessments specified in 1 of 5
2 the Declaration relating to the Owner s Unit and obligations thereunder may, at Declarant s option, be paid from Rental Revenue to the extent that Rental Revenue meets or exceeds those expenses. Section 202. Owner is responsible, at its sole cost and expense, to maintain the Unit in a state of rentable condition and repair, in accordance with Declarant s operating standards, as determined by Declarant from time to time in its sole discretion ( Operating Standards ). Owner hereby authorizes Declarant to perform or arrange to have performed any maintenance or repairs Declarant may deem necessary to maintain the Unit in accordance with the Operating Standards and to deduct such costs from the Rental Revenue. The Declarant may create a reserve account ( Reserve Account ) for the Unit to be funded from the Rental Revenue or from the Owner directly and such Reserve Account may be utilized by the Declarant to pay for the costs of capital improvements, maintenance, supply, repair, replacement and refurbishing of the Unit, all furniture, fixtures and equipment ( FF&E ) and operating supplies and equipment therein, as necessary or appropriate (as determined by Declarant in its sole discretion) to maintain the Unit in accordance with the Operating Standards. The Declarant may establish a minimum balance for the Reserve Account, which will not exceed $500, and shall notify the Owner if the Reserve Account ever lacks funds sufficient to maintain the minimum balance and collect from the Owner or from the Rental Revenues the amount necessary to replenish the account to achieve the minimum balance. Section 203. The balance of the remaining Rental Revenue, if any, after all deductions and expenses set forth in this Agreement have been accounted for shall be paid directly to the Owner. These monies shall be paid approximately by each March 1st and September 1st, for the preceding six month period, by company check or wire transfer. Owner acknowledges and agrees that (a) Owner s income from the Rental Program will be based solely on the room rental income generated from the Unit, and WILL NOT be pooled with that of any other Resort unit; and (b) Declarant has not represented or guaranteed, under any circumstances, (i) the level of occupancy and/or rental revenue of the Unit; or (ii) the equal distribution of rentals among all Resort units participating in the Rental Program even if the units are of the same unit type or classification as the Unit. Section 204. The following amenities and services are required to be available within the Unit and/or for renters of the Unit at all times during the Term: 1. Electricity 2. Water 3. Satellite (cable) television service 4. Internet service 5. Telephone service 6. Air conditioning service 7. Interior pest control service 8. Room supplies, garbage & maintenance 9. Maid service 10. Laundry service (as required) All costs and expenses related to the above amenities and services shall be borne solely by the Owner and may be deducted and paid by Declarant from the Rental Revenue. Section 205. Declarant shall repair or replace any of the furnishings or accessories that are damaged due to the actions of renters using funds from the Reserve Account or the Rental Revenues. In the event there is a lack of sufficient funds in the Reserve Account or from the received Rental Revenues, Declarant shall have no responsibility to repair or replace any such furnishings or accessories until Declarant has received sufficient funds from Owner or from Rental Revenues. In the event that Declarant is able to recover monies from a guest causing said damage, those funds will be applied to the repair or replacement of damaged furnishings or accessories. Replacement items may not be the same in color, brand or conformity, but will be of like quality. Section 206. Room rates shall be set by Declarant or its assigns at its sole discretion as may seem reasonable from time to time and as may be borne by the current competing markets. Discounts, comps and specials shall be at the sole discretion of Declarant. Declarant may also promulgate, adopt, amend and enforce rules and regulations as it deems advisable for the use and occupancy of the Unit. 2 of 5
3 Section 207. Reservations will be processed on a first come, first served basis. Owner is requested to make their reservations for occupancy of the Unit at least six months in advance. Owner shall be given all possible preference for use of the Unit, but Owner understands and agrees that its rights to use the Unit shall be subject to and contingent upon any confirmed reservations for the Unit. While bookings made prior to Owner s request will be honored, every effort will be made by management to relocate prior reservation holders in order to accommodate Owner s request for use of the Unit. If Owner s Unit is unavailable for use during any period requested by Owner, Owner acknowledges and agrees that Owner may have to rent another unit at the Resort, subject to availability, at the best available rate applicable at the time of the requested reservation. Section 208. Declarant shall diligently promote and do everything reasonable to maintain and operate the Rental Program with the highest possible occupancy and occupancy rates. Declarant shall maintain, staff and operate the Rental Program designed to offer the Unit for rental to others in a fair and equitable rental rotation with the other Resort units participating in the Rental Program. It is acknowledged by both parties that guest and renter preference will always take precedence regarding the priority in which a Resort unit, including the Unit, is rented. Section 209. Owner agrees to promptly provide Declarant with a copy of any executed listing agreement for the sale of the Unit, and any executed contract to sell the Unit, which contemplates closing to occur during the term of this Agreement. It is acknowledged that the Unit may not be available to be shown to prospective buyers and real estate agents during any period of Unit occupancy by third party guests. The Owner, or its agent, must make prior arrangements and give prior notice to Declarant of any attempt to show or access the Unit. Section 210. Term. This Agreement shall be in effect upon the date the last party executes the Agreement herein below and shall remain in effect for a term of two (2) years ( Initial Term ). This Agreement shall be automatically renewed for additional and successive two (2) year terms unless canceled by either party upon at least six (6) months written notice prior to the end of the Initial Term, or any renewal term in effect. For purposes of this Agreement, Term shall include the Initial Term and any renewal terms. Notwithstanding the foregoing, if the Unit is rented at the time the Term is scheduled to expire, the Term shall automatically be extended for such period of time as is reasonably necessary to complete such occupancy period. Section 211. This Agreement may be terminated by either party for cause, after written notice to the other party and not less than thirty (30) days opportunity to cure. Further, Declarant may also terminate this Agreement without cause at any time upon not less than ninety (90) days prior written notice to the Owner. No termination of this Agreement, for whatever reason, shall cancel any confirmed reservations with rental guests to the extent that such reservations were made prior to notice of termination for dates that would otherwise be within the remaining Term of this Agreement. Further, no termination, for any reason, shall relieve Owner of the obligation to pay Declarant in accordance with this Agreement for rental guests procured by Declarant prior to notice of termination for rental of the Unit occurring on a date after termination hereof. Section 212. Owner shall not store or leave any personal items in the Unit, other than in an owner storage locker approved by Declarant in its sole discretion, and Declarant shall not have any liability for any personal items left or stored by Owner in the Unit. Section 213. This Agreement shall be governed by and is in accordance with the laws of Roatan, Bay Islands, Honduras. In the event there is litigation regarding nonpayment of management fees or any other issue pertaining to this Agreement, venue and jurisdiction shall exclusively lie in Roatan, Bay Islands, Honduras. Section 214. If Owner rents his or her Unit in breach of this Agreement and such breach is discovered by Declarant in advance of the period for such prohibited rental of the Unit, Declarant, in its sole discretion, shall be entitled to not honor any rental reservation made in violation of this Agreement. If Owner rents his or her Unit in breach of this Agreement, then in addition to any other remedies 3 of 5
4 available to Declarant under this Agreement or pursuant to applicable law, Owner shall pay to Declarant one hundred percent (100%) of the then-current rental rate for the Unit as published by the Declarant or its agent from time to time during the period of Owner s rental of the Unit in violation of this Agreement as liquidated damages, but not as a penalty ( Rental Damages ). The parties agree that the amount of damages suffered by Declarant in the event of Owner s rental in breach of this Agreement would be difficult to quantify and to avoid protracted litigation to determine such damages, the parties have agreed to the measure provided herein for any rental of the Unit by Owner in breach of this Agreement. Declarant shall have the right to require Owner to (i) pay Declarant any such Rental Damages or (ii) permit Declarant to recoup such Rental Damages from the Rental Revenues, as Declarant shall determine in its reasonable business judgment. Section 280. Assignability. The Declarant shall have the right to assign this contract to another entity for the purpose of managing the resort. The Owner shall not have the right to assign this Agreement. The Declarant may also subcontract all portions of its duties and powers under this Agreement. Section 300. Notices. Any notice required or permitted to be given by this Agreement (excluding Declarant s provision of semi-annual statements, communications concerning Owner s reservation requests, and any billings of Owner in accordance with this Agreement) must be given or made in writing by either (i) personal delivery; (ii) reputable overnight delivery service, like FedEx or DHL, charges prepaid; (iii) certified or registered mail, postage prepaid with receipt requested; or (iv) e- mail message; in each case using the addresses as provided above. Section 301. Owner shall indemnify, defend and save harmless Declarant, its delegate, such as a third party operator acting on its behalf, and their respective shareholders, directors, officers, members, managers, agents, representatives, successors and assigns, against all claims, demands, damages, costs and expenses of whatever kind of nature, including reasonable attorneys fees, in connection with any action taken by or on behalf of Declarant under this Agreement, except in such cases where Declarant is adjudged to have been grossly negligence or engaged in willful misconduct in the performance of its duties under this Agreement. The foregoing right of indemnification shall be in addition to and not exclusive of all other rights and remedies to which Declarant may be entitled under this Agreement. The terms of this Section 301 shall survive the expiration or termination of this Agreement. Section 302. If a court or arbitrator of competent jurisdiction determines any term or provision of this Agreement to be invalid, the remainder of this Agreement and the enforceability thereof (including the enforceability of such term or provision to other circumstances) shall not be affected thereby, and each remaining terms and conditions shall be valid and enforceable to the fullest extent permitted by law, provided that the fundamental purposes of this Agreement are not rendered incapable of being fulfilled due to the invalidity of any such provision, whereupon this Agreement shall terminate. Section 303. All of the terms and provisions of this Agreement, whether so expressed or not, shall be binding upon, and inure to the benefit of, and be enforceable by Declarant and Owner and their respective heirs, successors, legal representatives, executors and permitted assigns. Section 304. This Agreement may be executed in one (1) or more counterparts, all of which shall be considered one (1) and the same agreement, and shall become effective when one (1) or more counterparts shall have been signed by each party and delivered to each other party. This Agreement may be executed and delivered by transmission of a file in.pdf or similar format. Upon such delivery, each signature shall be deemed to have the same effect as if the original signature had been delivered to the other parties hereto. Section 305. The parties agree that this Agreement shall be fairly interpreted in accordance with its terms without any strict construction in favor or against any party, and any ambiguity shall not be construed against the drafting party. 4 of 5
5 Section 306. This Agreement constitutes the entire agreement between the parties relating to the subject matter contained herein, and it supersedes and replaces any and all prior agreements and understandings, whether written or oral, relating to the subject matter hereof, including any prior rental management agreements between Owner and Declarant or Declarant s parents, affiliates or subsidiaries. This Agreement may not be modified other than by a written instrument signed by the parties. This agreement is entered into by signature hereto: Owner Owner Declarant 5 of 5
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