Resort Affiliation Agreement

INTERVAL
INTERNATIONAL
THE QUALITY VACATION EXCHANGE NETWORK


RESORT AFFILIATION AGREEMENT


AGREEMENT made and entered into by and between INTERVAL INTERNATIONAL, INC., a corporation duly organized and existing under the laws of the State of Florida, with its principal place of business at 6262 Sunset Drive, Penthouse One, Miami, Florida 33143, hereinafter referred to as "INTERVAL," and Beartown Development Inc. - --------------------------------------------------------------------------------
(Exact Name of Development Entity) a/an Pennsylvania Corporation
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(Type of Entity and State of Registration)


with a principal place of business at Box 4402, RR#4, Stroudsburg, PA 18360
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hereinafter referred to as "AFFILIATE" AND
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a/an
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(Type of Entity and State of Registration)


with its principal place of business at
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hereinafter referred to as "ASSOCIATION." INTERVAL, AFFILIATE and ASSOCIATION are sometimes collectively referred to as the "Parties."


WHEREAS, INTERVAL is engaged in the business of providing and operating a vacation exchange service to facilitate the exchange of accommodations between owners of Vacation Interests (as defined herein) at participating resorts, hereinafter referred to as the "INTERVAL NETWORK;" and


WHEREAS, AFFILIATE is developing or has developed a resort vacation ownership program known as Oak 'n Spruce Resort
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(NAME OF PROGRAM)


located at Meadow Street, South Lee, MA 01260
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to consist, or consisting, of the units and amenities as described herein, and to be no less than 12 studios, 90 one-bedroom, 29. two-bedroom, and 0 three-bedroom units, hereinafter collectively referred to as the "PROJECT;" and


WHEREAS, ASSOCIATION is an association of owners comprised of individuals who own Vacation Interests at the PROJECT, and ASSOCIATION is or will be responsible for the management of the PROJECT; and


WHEREAS, AFFILIATE and ASSOCIATION desire to include the PROJECT as a participant in the INTERVAL NETWORK.


NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:


A. DEFINITIONS.


Unless a different meaning clearly appears from the context, the following capitalized terms when used in this Agreement shall have the meaning set forth below:


1. "Confirmation" or "Confirmed Exchange" means a written or oral
acknowledgment that an exchange request has been fulfilled by
INTERVAL.


2. "Effective Date" means the date this Agreement was executed by
INTERVAL.


3. "Exchange Guest" means the individual who has been issued a
Confirmed Exchange to the PROJECT by INTERVAL


4. "Individual Member" means any purchaser/owner of a Vacation
Interest at the PROJECT properly enrolled in the INTERVAL NETWORK
(whether by AFFILIATE, transfer of membership, acceptance of a
membership offer from INTERVAL, or otherwise) and "Individual
Membership" shall be construed accordingly. An Individual Member
who is current in the payment of membership fees prescribed by
INTERVAL and who is in compliance with all terms and conditions
then in effect is referred to as an Individual Member in good
standing.


5. "Individual Membership Application" means the form or agreement
prescribed by INTERVAL, from time to time, for the enrollment of
Individual Members.


6. "Marks" mean the following, registered or unregistered, trademarks,
service marks or trade names: "Five Star Logo," "Flexchange,"
"Interval Logo," "Interval International," "Interval International
and Logo," "Interval International Five Star Award Program,"
"Interval International Traveler," "Worldex," "WorldCard,"
"WorldCard Preferred," and such other trademarks, service marks
and/or trade names, as may at any time be owned or claimed by
INTERVAL or any associated or affiliated company.


7. "Member Resort" means any resort which has entered into a written
agreement with INTERVAL to participate in the INTERVAL NETWORK


8. "Resort Membership Application" means the form completed by
AFFILIATE and/or ASSOCIATION, or on behalf of AFFILIATE and/or
ASSOCIATION, for application to the INTERVAL NETWORK, and includes
all documents and exhibits and any and all representations or
undertakings, whether written or oral, given or provided by
AFFILIATE, ASSOCIATION, or on behalf of AFFILIATE or ASSOCIATION,
to INTERVAL in connection with this Agreement, whether before or
after the Effective Date of this Agreement.


9. "Unit" means each apartment, villa, suite, or other unit of
accommodation designed for occupancy.


10. "Unit Week" means the use and occupancy of a Unit for a one-week
period. Each Unit, therefore, has available for use and occupancy
up to fifty-two (52) Unit Weeks per year.


11. "Vacation Interest" means the ownership of or the tight to use a
Unit and the amenities and facilities of a Vacation Ownership
Resort for at least one week during any given year, but not
necessarily consecutive years, and which extends for a period of at
least three years.


12. "Vacation Ownership Resort" means one or more Units subject to the
same time share or other vacation ownership plan, together with any
other property, or rights to property, appurtenant to those Units.


B. TERM AND RENEWALS.


The initial term of this Agreement is for six (6) years from the Effective Date. Thereafter, this Agreement will automatically renew for additional periods often (10) years each unless a Party gives to the other Parties written notice, at least ninety (90) days prior to the expiration of the initial term of this Agreement or any subsequent renewal term, of its intent not to renew. In the event any Party chooses not to renew this Agreement, said notice of non-renewal shall apply only to the Party giving said notice, and the Agreement shall continue and be in full force and effect as it relates to all Parties who did not serve a notice of non-renewal.


C. AFFILIATION FEE.


AFFILIATE agrees to pay an affiliation fee of $ 0 on or before ______________________. Upon execution of this Agreement by INTERVAL, such fee is non-refundable.


D. INTERVAL NETWORK


1. INTERVAL'S DUTIES.


INTERVAL will provide:


(a) resort membership for the PROJECT in the INTERVAL NETWORK upon
such terms and conditions as are set forth in this Agreement;


(b) an exchange program for use by Individual Members in
accordance with the Terms and Conditions of Individual
Membership and Exchange, as amended from time to time by
INTERVAL;


(c) promotional materials for use by AFFILIATE in accordance with
this Agreement, and thereafter, such additional materials as
INTERVAL may make available from time to time at such rates as
INTERVAL may establish for such materials;


(d) such other benefits, privileges and/or discounts as INTERVAL
may have available from time to time to Individual Members in
good standing.


2. INDIVIDUAL MEMBERSHIP.


(a) For all sales of Vacation Interests at the PROJECT subsequent
to the Effective Date of this Agreement, AFFILIATE shall
provide INTERVAL with a completed Individual Membership
Application executed by each purchaser of a Vacation Interest
at the PROJECT and the applicable 1 year membership fee
prescribed by INTERVAL or its designated representative. Such
Individual Membership Application and fee shall be provided to
INTERVAL no later than thirty (30) days after the execution of
a purchase agreement by said purchaser, regardless of the
actual date of dosing or escrow requirements for said
purchase.


(b) All Individual Membership fees due under this Agreement shall
be delivered to INTERVAL in accordance with the fees schedule
then in effect, without set-off or deduction. In the event
AFFILIATE or ASSOCIATION receive renewal fees for Individual
Membership, said funds shall be forwarded to INTERVAL without
set-off or deduction upon receipt of such fees by AFFILIATE or
ASSOCIATION.


(c) [intentionally omitted]


(d) For each quarter, commencing with the quarter following the
expiration of the second anniversary of the Effective Date of
this Agreement, in which there are less than two hundred (200)
Individual Members in good standing with INTERVAL, INTERVAL
may assess AFFILIATE a service fee of five hundred dollars
($500.00) per quarter. INTERVAL shall invoice AFFILIATE at the
end of each three month period in which the service fee is
payable. AFFILIATE agrees to pay INTERVAL within fifteen (15)
days after receipt of such statement.


(e) AFFILIATE agrees to provide each purchaser of a Vacation
Interest at the PROJECT with a then current version of the
INTERVAL Resort Directory. Such Resort Directory shall be
provided to the purchaser at the time of execution of a
purchase agreement. AFFILIATE agrees to purchase such Resort
Directories from INTERVAL, in minimum quantities of fifty (50)
directories per order, at the price prescribed by INTERVAL,
plus applicable postage and shipping charges and taxes. Such
Resort Directories shall be shipped to AFFILIATE C.O.D.,
unless otherwise agreed to by INTERVAL. AFFILIATE shall be
entitled to deduct from the membership fee payable to INTERVAL
pursuant to sub-paragraph (a) above the per unit cost paid by
AFFILIATE (excluding any applicable shipping charges and
taxes) for a Resort Directory.


3. PRECONSTRUCTION OR RENOVATION.


(a) In the event the PROJECT's Units, amenities or facilities are
unavailable for occupancy due to construction or renovation,
AFFILIATE will advise each purchaser of a Vacation Interest at
the PROJECT, prior to enrollment with INTERVAL, that said
purchaser will not be entitled to utilize the INTERVAL NETWORK
until his/her Unit Week and the PROJECT are available for
occupancy as reasonably determined by INTERVAL The PROJECT
shall be deemed "unavailable for occupancy" until such time as
INTERVAL determines in its good faith judgment that the
PROJECT is sufficiently complete to be desirable for exchange
(e.g., Units complete and fully furnished, amenities available
for use, and remaining construction does nor interfere with
the use and enjoyment of completed Units, amenities and
facilities). An Individual Member in good standing who is
unable to use the exchange privilege due to construction
and/or renovation at the PROJECT shall be entitled to use such
other benefits, privileges and discounts as may be afforded to
Individual Members from time to time.


(b) In the event a portion of the PROJECT is. under construction
or renovation, AFFILIATE and/or ASSOCIATION agree that
Exchange Guests will be accommodated only in completely
renovated and fully furnished Units, and in Units where use
and enjoyment by the Exchange Guest will not be impaired by
the ongoing construction or renovation at the PROJECT.


(c) Notwithstanding the PROJECT's Units, amenities, or facilities
being unavailable for occupancy due to construction or
renovation, AFFILIATE'S obligation to enroll all purchasers
pursuant to Section D. Paragraph 2(a) of this Agreement shall
not be waived.


4. TERMS AND CONDITIONS.


(a) The terms and conditions of the INTERVAL NETWORK, including
but not limited to, the Terms and Conditions of Individual
Membership and Exchange, may be changed by INTERVAL from time
to time in its sole discretion.


(b) AFFILIATE and/or ASSOCIATION agree to comply with all
procedures reasonably established by INTERVAL, from time to
time, for the operation of the INTERVAL NETWORK.


5. EXCHANGE ACTIVITY.


(a) AFFILIATE and/or ASSOCIATION agree to honor all Confirmations
made by INTERVAL utilizing Unit Weeks relinquished by
Individual Members, as well as Unit Weeks provided by
AFFILIATE to INTERVAL in accordance with Section E, Paragraph
4 and such other Unit Weeks at the PROJECT as may be provided
by AFFILIATE and/or ASSOCIATION to INTERVAL from time to time.
If an Exchange Guest arrives at the PROJECT and the Unit
confirmed by INTERVAL is not available, AFFILIATE and/or
ASSOCIATION agree to provide at their expense substitute
accommodations (of the same or superior size and quality) at
the PROJECT, or they shall provide such substitute
accommodations (of the same or superior size and quality) at a
similar location of comparable quality with amenities and
facilities similar to that available at the PROJECT for the
same time period as that originally confirmed. Additionally,
AFFILIATE and/or ASSOCIATION shall be responsible for all
expenses incurred by the Exchange Guest or INTERVAL as a
result of the confirmed Unit not being available at the
PROJECT, including, without limitation, relocation expenses
and INTERVAL's standard administrative charge which is
currently one hundred U.S. dollars ($100.00). The provisions
of this Paragraph shall survive the expiration or termination
of this Agreement.


(b) In the event it is necessary for AFFILIATE or ASSOCIATION to
change the particular Unit into which an Exchange Guest has
been Confirmed, AFFILIATE and ASSOCIATION agree that the
replacement Unit shall be comparable or superior in all
respects (including, without limitation, the size of the Unit,
view from the Unit and amenities available in the Unit) to the
Unit into which INTERVAL issued the Confirmation.


(c) AFFILIATE agrees not to require any Exchange Guests to attend
a sales presentation regarding the PROJECT.


(d) AFFILIATE and ASSOCIATION agree not to participate in any
system or arrangement of exchange with any other Vacation
Ownership Resort during the term of this Agreement and any
renewals thereof


(e) AFFILIATE agrees that during the term of this Agreement or any
renewals thereof, the INTERVAL NETWORK will be the only
exchange program represented to prospective purchasers of
Vacation Interests at the PROJECT. AFFILIATE and ASSOCIATION
further agree that the INTERVAL NETWORK will be the only
exchange program recommended or otherwise promoted to owners
of Vacations Interests at the PROJECT. Additionally, AFFILIATE
and ASSOCIATION agree that the INTERVAL NETWORK shall be
utilized for all exchange requests, both internal and
external. Notwithstanding the foregoing~ this Paragraph shall
not be construed to prohibit an owner of a Vacation Interest
at the PROJECT from utilizing an exchange program other than
the INTERVAL NETWORK, if such individual had been previously
enrolled in another exchange program prior to the PROJECT's
initial affiliation with INTERVAL.


E. AFFILIATE'S PROGRAM.


1. PHASING AND AMENITIES.


(a) The PROJECT is included as a Member Resort with the mutual
understanding that a material condition for the PROJECT's
continued participation in the INTERVAL NETWORK is AFFILIATE's
strict adherence to the completion and availability of Units
and amenities as set forth in the attached Addendum.


(b) This Agreement encompasses all of the Units, buildings or
phases now or hereafter constructed where the PROJECT is
located or adjacent thereto. The inclusion of any additional
Units, buildings or phases, however, shall be subject to
adherence to the standards and criteria for resort membership
in effect at the time of inclusion.


2. REPRESENTATIONS AND WARRANTIES.


(a) AFFILIATE represents and warrants that it owns the real estate
and improvements constituting the PROJECT, or that AFFILIATE
has the contractual right to convey use tights in the PROJECT;
that the legal structure of the PROJECT is in compliance with
all applicable laws and that the marketing of the PROJECT is
in compliance with all applicable laws; that all monies paid
by an individual to purchase a Vacation Interest at the
PROJECT are placed in escrow or guaranteed by an independent
third party of standing until such time as the purchaser is
granted actual occupancy rights; that the legal structure of
the PROJECT guarantees the purchaser the undisturbed use of
the Units, amenities and facilities comprising the PROJECT for
the duration of the Vacation Interest purchased; that there
are no proceedings pending or threatened against or affecting
AFFILIATE or individuals or entities related thereto in any
court or before any governmental authority which involves the
possibility of adversely affecting the business or financial
condition of AFFILIATE or the PROJECT; that execution of this
Agreement and its performance hereunder is binding upon
AFFILIATE and will not conflict with or result in a breach of
any provision of any other agreement, charter, bylaw or other
instrument to which AFFILIATE or the PROJECT may be bound; and
that AFFILIATE has and will continue to comply with all
applicable laws and regulations of any jurisdiction where
compliance is required.


(b) ASSOCIATION represents and warrants that there are no
proceedings pending or threatened against or affecting
ASSOCIATION or individuals related thereto in any court or
before any governmental authority which involves the
possibility of adversely affecting the business or financial
condition of ASSOCIATION or the PROJECT; that execution of
this Agreement with INTERVAL and its performance hereunder is
binding upon ASSOCIATION and will not conflict with or result
in a breach of any provision of any other agreement, charter,
by-law or other instrument to which ASSOCIATION may be bound;
and that ASSOCIATION has and will continue to comply with all
applicable laws and regulations of any jurisdiction where
compliance is required.


(c) AFFILIATE and/or ASSOCIATION, as the case may be, represent
and warrant that they currently maintain and will continue to
maintain, at their sole cost and expense, a protection and
indemnity liability policy, including coverage for bodily
injury, property damage, personal and advertising injury
occurring on or about the PROJECT or in connection with the
PROJECT. Said policy shall afford minimum protection of not
less than One Million Dollars ($1,000,000) combined single
limit coverage for each occurrence. AFFILIATE and/or
ASSOCIATION shall cause INTERVAL and its officers, directors,
employees, agents and representatives to be named insureds
under the policy. A certificate showing such insurance in
force shall be delivered to INTERVAL within thirty (30) days
of the Effective Date of this Agreement, and upon any renewal
or replacement of the policy. Said certificate shall further
provide that not less than thirty (30) days prior written
notice be given to INTERVAL in the event of cancellation,
material change, alteration or amendment of the policy.


(d) AFFILIATE agrees to provide INTERVAL with an opinion letter
from a licensed independent attorney coveting those items set
forth in Exhibit "A", attached hereto and made a part hereof,
upon execution of this Agreement by AFFILIATE. AFFILIATE
further understands and agrees that it will not be entitled to
represent its participation in the INTERVAL NETWORK until
INTERVAL has received a satisfactory opinion letter from such
licensed independent attorney and has notified AFFILIATE of
same. Failure to provide such opinion letter, or any material
misrepresentation of the representations and warranties set
forth above or any information set forth in this Agreement,
the Resort Membership Application or any supporting documents,
shall be grounds for immediate termination of this Agreement
by INTERVAL.


(e) The Parties represent and warrant that the individuals
executing this Agreement on behalf of INTERVAL, AFFILIATE and
ASSOCIATION, are officers of their respective organizations
and duly authorized to execute this Agreement on behalf of
INTERVAL, AFFILIATE or ASSOCIATION, as the case may be.


3. DISCLOSURE.


(a) AFFILIATE agrees to provide either INTERVAL's most recent
disclosure statement and/or the INTERVAL Resort Directory, or
such other publication which contains the complete and then
current Terms and Conditions of Individual Membership and
Exchange, to all prospective purchasers of Vacation Interests
at the PROJECT prior to their execution of any contract for
purchase. Notwithstanding the foregoing~ AFFILIATE shall
provide INTERVAL's most recent disclosure statement if
required by law to do so.


(b) AFFILIATE further agrees to conspicuously include the
following statement, or a statement substantially similar to
the following, in its sales documents:


"This Resort has an agreement with Interval International,
Inc. ("Interval") of Miami, Florida, wherein Interval has
agreed to provide its Exchange Program to owners of vacations
interests at this Resort. Interval is an independently owned
and operated service company. The developer! marketer of this
Resort is not an agent for Interval and no representations or
promises made by such developer/marketer, or their agents, are
binding on Interval. Interval's responsibility for
representations regarding Interval's Exchange Program, as well
as Interval's current or future services, is limited to those
made in written materials furnished by Interval."


4. RESERVE ACCOMMODATIONS.


(a) AFFILIATE agrees to make available as reserve accommodations
for INTERVAL's exclusive use _____ studios, ____ one-bedroom,
1 two-bedroom, and ____ three-bedroom Units at the PROJECT
each week of the year commencing within one hundred twenty
(120) days after INTERVAL determines that the PROJECT is
available for occupancy and continuing thereafter for a period
of two years.


(b) AFFILIATE shall provide INTERVAL with a schedule of the Unit
Weeks reserved for INTERVAL's exclusive use for the current
calendar ...