BANK AGREEMENT
THIS BANK AGREEMENT, dated as of May 14, 1997 (as amended,
modified or supplemented from time to time, the "Bank Agreement"), is by and
among Grand Court Lifestyles, Inc., a Delaware corporation (the "Company") and
The Bank of New York (the "Bank").
W I T N E S S E T H:
WHEREAS, the Company is issuing its Retirement Financing
Notes-V due June 30, 2003 (the "Notes") pursuant to the Company's Confidential
Private Placement Memorandum, as the same may be from time to time amended
(the "Memorandum"); and
WHEREAS, the Company's private placement of the Notes (the
"Offering") will terminate on the earlier of (i) the date on which all the
Notes are sold or (ii) May 31, 1998 (the "Offering Termination Date"); and
WHEREAS, subscribers will purchase Notes at a closing (the
"Initial Closing") to be held at such time as the Company may determine in its
discretion and, thereafter, from time to time (each, singly, an "Additional
Closing," and, collectively, the "Additional Closings"), at the discretion of
the Company, on such day or days as may be determined by the Company, as
subscriptions are received and accepted (hereinafter the date of the Initial
Closing and the date of any Additional Closing are each referred to as a
"Closing Date"); and
WHEREAS, the Company desires to deliver to the Bank amounts
received by the Company from subscribers for Notes (each, singly, a
"Purchaser," and, collectively, the "Purchasers"), in payment for the Notes,
which amounts shall be released to the Company at the Initial Closing and at
each Additional Closing; and
WHEREAS, each Purchaser shall be entitled to receive, on a
monthly basis prior to the Closing Date with respect to that Purchaser's
Notes, distributions representing interest accrued on that Purchaser's
subscription payment at a rate of 13.125% per annum; and
WHEREAS, the Company desires to establish an interest
bearing escrow fund to be called the Retirement Financing Notes-V Escrow Fund
Account (the "Fund") with the Bank; and
WHEREAS, each Purchaser shall be entitled to receive, on a
monthly basis after the Closing Date with respect to that Purchaser's Notes,
interest on his Note at the rate of 13.125% per annum; and
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WHEREAS, the Company wishes to appoint the Bank as Escrow
Agent, Authenticating Agent, Paying Agent, Registrar and Transfer Agent with
respect to the Notes and the Bank is willing to accept such appointments upon
the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing premises
and the mutual covenants herein contained and other good and valuable
consideration, receipt of which is hereby acknowledged, the parties hereto
hereby agree as follows:
Section 1. Escrow Agent.
Section 1.1 Appointment. The Company hereby appoints and
designates the Bank as Escrow Agent for the purposes set forth in this Section
1, and the Bank hereby accepts such appointment.
Section 1.2 Escrow. The Company shall from time to time
deliver amounts received from Purchasers in payment for the Notes
("Subscription Payments") to the Bank. The Bank shall deposit the Subscription
Payments in the Fund to be established in the Company's name for this purpose
by the Bank. Subscription Payments delivered for deposit in the Fund shall be
invested in short term certificates of deposit (including certificates of
deposit issued by the Bank), A-1 commercial paper, P-1 commercial paper,
interest bearing money market accounts, all as specified in writing by the
Company and held in trust for the benefit of Purchasers. In the event the
Company should fail to so specify, Subscription Payments delivered for deposit
in the Fund shall be invested in the Bank's Deposit Reserve, an
interest-bearing account, for the benefit of the Purchasers. The Bank is not
responsible for interest, losses, taxes or other charges on investments. All
checks delivered to the Bank for deposit in the Fund shall be payable to the
order of "Retirement Financing Notes-V - Escrow Account." Concurrently with
such delivery, the Company shall deliver to the Bank a statement of the name,
mailing address and tax identification number of each Purchaser whose
Subscription Payment is being delivered, and a schedule listing the aggregate
Notes and aggregate cumulative Subscription Payments to date delivered for
deposit in the Fund. The Bank shall deposit the Subscription Payments to
reflect multiple beneficiaries in accordance with 12 CFR 330.4, 330.10. For
the purposes of this Bank Agreement, the Company is authorized to make
deposits and give instructions as to investments of deposits and otherwise, as
contemplated in this Bank Agreement, to the Bank.
Section 1.3 Interest. During the period (the "Escrow
Period") commencing upon the date that any Purchaser's Subscription Payment
constitutes Cleared Funds (as defined in Section 1.11 hereof) and ending on
the day immediately preceding the Closing Date with respect to that
Purchaser's Notes, interest will accrue on that Purchaser's Subscription
Payment at a rate
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of 13.125% per annum, computed on the basis of a year of 360 days consisting
of 12 thirty day months. Interest shall be payable on the fifteenth day of
each month if such day is a Business Day. If such day is not a Business Day,
then the next Business Day shall be deemed the Interest Payment Date (each, an
"Interest Payment Date"). Four Business Days prior to each such Interest
Payment Date, the Bank shall give the Company written notice of the difference
between the amount of interest which will be payable on Subscription Payments
on such Interest Payment Date and the amount of interest accruing on the Fund
which will be available for such payment on such Interest Payment Date. Not
later than 11:30 a.m. (New York time) on such Interest Payment Date, the
Company shall deposit with the Bank the amount of such difference. On each
Interest Payment Date, the Bank shall pay interest which is due and payable to
the respective Purchasers by mailing its check in the appropriate amount to
each Purchaser by first class mail to the Purchaser's mailing address provided
to the Bank pursuant to Section 1.2 hereof. In the event that the Company
shall default in its payment obligations to the Bank under this Section 1.3,
the Bank shall mail its check in the amount of each Purchaser's pro rata share
of interest earned and paid on the Fund's assets as provided in this Section
1.3. For purposes of this Bank Agreement, "Business Day" shall mean any day
other than a day on which the Bank is authorized to remain closed in New York
City.
Section 1.4 The Initial Closing and Additional Closings.
Upon the scheduling of the Initial Closing and each Additional Closing, the
Company shall give written notice thereof to the Bank not less than one (1)
Business Day prior to the date scheduled for each such closing.
Section 1.5 Cancellation. The Company shall give the Bank
notice of any Purchaser who cancels his Subscription prior to his Closing Date
or whose Subscription Payment was deposited pursuant to Section 1.2 but whose
Subscription is rejected, setting forth the name and mailing address of the
Purchaser and the amount of the rejected or cancelled subscription. As
promptly as practicable thereafter, the Bank shall pay the amount of the
cancelled or rejected subscription from the Fund to the Purchaser whose
Subscription was cancelled or rejected as directed by the Company. Any
interest earned thereon and not theretofore distributed pursuant to Section
1.3 hereof shall be paid to the Purchaser in accordance with Section 1.3
hereof. Payment shall be made by check payable to the Purchaser mailed by the
Bank by first class mail directly to the Purchaser at the mailing address of
the Purchaser.
Section 1.6 Payment. (a) The Bank, at the Initial Closing
and each Additional Closing, upon written instruction from either Xx. Xxxx
Xxxxxxx and Xx. Xxxxxxx X. Xxxxx, as the designated officers of the Company,
shall transfer to the Company or to such third party or parties as may be
directed by Xx. Xxxxxxx or Xx. Xxxxx the Cleared Funds then held in the Fund
by the Bank. Any interest earned thereon and not theretofore distributed in
accordance with Section 1.3 hereof shall be paid to the Purchasers in
accordance with Section 1.3 hereof.
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(b) In the event that the Bank should receive written
instructions, as contemplated in subparagraph (a) above, from any one other
than Xx. Xxxxxxx or Xx. Xxxxx, regardless of whether that person is an
officer, director, employee, agent or representative of the Company, those
instructions are to be deemed to be invalid and contrary to the intent of this
Bank Agreement.
Section 1.7 Fees and Expenses. In addition to the fees set
forth in Section 7.3 hereof, the Bank shall be entitled to an administration
fee as compensation for its services under this Section 1 in the amount of
$5,000 payable (i) upon the execution and delivery of this Bank Agreement and
(ii) subject to an adjustment as provided in the next succeeding sentence of
this Section 1.7, on the first anniversary date of this Bank Agreement,
provided however, that the Bank shall not be entitled to payment of an
administration fee on such first anniversary date if all of the Notes have
been sold prior thereto. In the event the Offering terminates prior to May 31,
1998, the Company shall be entitled to a refund payable ten days after the
Offering Termination Date, of that portion of the administration fee paid to
the Bank on the first anniversary date of the Bank Agreement, in an amount
calculated as the difference between (a) $5,000 and (b) the product of (x)
$5,000 and (y) a fraction, the numerator of which is the number of days
between the first anniversary date of this Bank Agreement and the Offering
Termination Date, inclusive, and the denominator of which is 365. In no event
shall the Bank be entitled to payment of an administration fee, as provided
for in this Section 1.7, following the Offering Termination Date. The Company
shall also pay the Bank $5 for the preparation and execution of each
Purchaser's account including the calculation of interest accrued; $1 for the
preparation of each Purchaser's 1099 tax form; $25 for each investment
transaction in the Fund; $25 for each returned "bounced" check of a Purchaser;
and $500 for each Additional Closing, payable within 10 days after the Bank
gives the Company notice that any such amounts are due and payable.
Notwithstanding anything herein to the contrary, the Bank shall not charge the
Company for the issuance of checks or wire transfers to make monthly payments
of accrued interest on Subscription Payments. No additional fee will be
payable with respect to wire transfers of and unreturned checks for
Subscription Payments. In addition, the Company shall reimburse the Bank for
other actual out-of-pocket expenses incurred in connection with its
obligations pursuant to this Section 1 (including, but not limited to, actual
expenses for stationery, postage, telephone, telex, wire transfers, telecopy
and retention of records, and reasonable fees and expenses of counsel),
payable within ten (10) days after the Bank gives notice to the Company that
it has incurred such expenses. The obligation to pay such compensation and
reimburse such expenses shall be borne solely by the Company. Amounts held in
the Fund shall not be available to satisfy this obligation or any other
obligation of the Company to the Bank. The provisions of this Section 1.7
shall survive the termination of this Bank Agreement.
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Section 1.8 Termination of Offering. If the Offering should
be terminated, the Company shall promptly so advise the Bank in writing, and
shall authorize and direct the Bank to return the Subscription Payments to the
Purchasers. The Bank thereupon shall return those Subscription Payments to the
extent they have not been distributed per Section 1.6 to the Purchasers from
whom they were received. Any interest earned on the Subscription Payments and
not theretofore distributed pursuant to Section 1.3 hereof shall be paid in
accordance with Section 1.3 hereof. Upon paying such disbursements to the
Purchasers and the Company, the Bank shall be relieved of all of its
obligations and liabilities under this Bank Agreement.
Section 1.9 Form 1099, etc. In compliance with the Internal
Revenue Code of 1986, as amended, the Company shall request that each
Purchaser furnish to the Bank such Purchaser's taxpayer identification number
and a statement certified under penalties of perjury that (a) such taxpayer
identification number is true and correct and (b) the Purchaser is not subject
to withholding of 31% of reportable interest, dividends or other payments.
Section 1.10 Uncollected Funds. In the event that any funds,
including Cleared Funds, deposited in the Fund prove uncollectible after the
funds represented thereby have been released by the Bank pursuant to this Bank
Agreement, the Company shall reimburse the Bank upon request for the face
amount of such check or checks; and the Bank shall, upon instruction from the
Company, deliver the returned checks or other instruments to the Company. This
section shall survive the termination of this Bank Agreement.
Section 1.11 Cleared Funds. For the purpose of this Bank
Agreement, Subscription Payments shall constitute "Cleared Funds" in
accordance with the following:
(a) if paid by wire transfer, such funds shall constitute
Cleared Funds on the date received by the Bank;
(b) if paid by check drawn on a New York Clearing House
Bank, such funds shall constitute Cleared Funds on the second Business Day
following the date received by the Bank; and
(c) if paid by check drawn on any bank other than a New York
Clearing House Bank, such funds shall constitute Cleared Funds on the third
Business Day following the date received by the Bank.
Section 2. Execution. The Notes shall be executed on behalf
of the Company by the manual or facsimile signature of an officer of the
Company. All such facsimile signatures shall have the same force and effect as
if the officer had manually signed the Notes. In case any officer of the
Company whose signature shall appear on a Note shall cease to be such officer
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before the delivery of such Note or the issuance of a new Note following a
transfer or exchange, such signature or such facsimile shall nevertheless be
valid and sufficient for all purposes, the same as if such officer had
remained an officer until delivery.
Section 3. Authenticating Agent.
Section 3.1 Appointment. The Company hereby appoints and
designates the Bank as Authenticating Agent for the purposes set forth in this
Section 3, and the Bank hereby accepts such appointment.
Section 3.2 Authentication. Only such Notes as shall have
the Certificate of Authentication endorsed thereon in substantially the form
set forth in the form of Note attached to the Memorandum, duly executed by the
manual signature of an authorized signatory of the Bank, shall be entitled to
any right or benefit under this Bank Agreement. No Notes shall be valid or
obligatory for any purpose unless and until such Certificate of Authentication
shall have been duly executed by the Bank; and such executed certificate upon
any such Note shall be conclusive evidence that such Note has been
authenticated and delivered under this Bank Agreement. The Certificate of
Authentication on any Note shall be deemed to have been executed by the Bank
if signed by an authorized signatory of the Bank, but it shall not be
necessary that the same person sign the Certificate of Authentication on all
of the Notes.
Section 4. Mutilated, Lost, Stolen or Destroyed Notes.
Subject to applicable law, in the event any Note is mutilated, lost, stolen or
destroyed, the Company may authorize the execution and delivery of a new Note
of like date, number, maturity and denomination as that mutilated, lost,
stolen or destroyed, provided, however, that in the case of any mutilated
Note, such mutilated Note shall first be surrendered to the Company, and in
the case of any lost, stolen or destroyed Note, there shall be first furnished
to the Company and the Bank, evidence of the ownership thereof and of such
loss, theft or destruction satisfactory to the Company and the Bank, together
with indemnification through a note of indemnity or otherwise as shall be
satisfactory to the Company and the Bank. The Company may charge the Purchaser
of such Note with any amounts satisfactory to the Company and the Bank and
permitted by applicable law.
Section 5. Registrar and Transfer Agent.
Section 5.1 Appointment. The Company hereby appoints and
designates the Bank as Registrar and Transfer Agent for the purposes set forth
in this Section 5, and the Bank hereby accepts such appointment.
Section 5.2 Registration, Transfer and Exchange of Notes.
The Notes are issuable only as registered Notes without coupons in the
denomination of $100,000 or any
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multiple or any fraction thereof at the sole discretion of the Company. Each
Note shall bear the following restrictive legend: "These securities have not
been registered under the Securities Act of 1933, as amended, and may be
offered and sold or otherwise transferred only if registered pursuant to the
provisions of that Act or if an exemption from registration is available." The
Bank shall keep at its principal corporate trust office a register in which
the Bank shall provide for the registration and transfer of Notes. Upon
surrender for registration of transfer of any Note at such office of the Bank,
the Company shall execute, pursuant to Section 2 hereof, and mail by first
class mail to the Bank, and the Bank shall authenticate, pursuant to Section 3
hereof, and mail by first class mail to the designated transferee, or
transferees, one or more new Notes in an aggregate principal amount equal to
the unpaid principal amount of such surrendered Note, registered in the name
of the designated transferee or transferees. Every Note presented or
surrendered for registration of transfer shall be duly endorsed, or be
accompanied by a written instrument of transfer duly executed, by the holder
of such Note or his attorney duly authorized in writing. Notwithstanding the
preceding, the Notes may not be transferred without an effective registration
statement under the Securities Act of 1933 covering the Notes or an opinion of
counsel satisfactory to the Company and its counsel that such registration is
not necessary under the Securities Act of 1933 (the "Securities Act"). At the
option of the owner of any Note, such Note may be exchanged for other Notes of
any authorized denominations, in an aggregate principal amount equal to the
unpaid principal amount of such surrendered Note, upon surrender of the Note
to be exchanged at the principal corporate trust office of the Bank; provided,
however, that any exchange for denominations other than $100,000 or an
integral multiple thereof shall be at the sole discretion of the Company.
Whenever any Note is so surrendered for exchange, the Company shall execute,
pursuant to Section 2 hereof, and deliver to the Bank, and the Bank shall
authenticate, pursuant to Section 3 hereof, and mail by first class mail to
the designated transferee, or transferees, the Note or Notes which the Note
owner making the exchange is entitled to receive. Any Note or Notes issued in
exchange for any Note or upon transfer thereof shall be dated the date to
which interest has been paid on such Note surrendered for exchange or
transfer, and neither gain nor loss of interest shall result from any such
exchange or transfer. In addition, each Note issued upon such exchange or
transfer shall bear the restrictive legend set forth above unless in the
opinion of counsel to the Company, such legend is not required to ensure
compliance with the Securities Act.
Section 5.3 Owner. The person in whose name any Note shall
be registered shall be deemed and regarded as the absolute owner thereof for
all purposes, and payment of or on account of the principal of or interest on
such Note shall be made only to or upon the order of the registered owner
thereof or his duly authorized legal representative. Such registration may be
changed only as provided in this Section 5, and no other notice to the Company
or the Bank shall affect the rights or obligations with respect to the
transfer of a Note or be effective to transfer any Note. All payments to the
person in whose name any Note shall be registered shall
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be valid and effectual to satisfy and discharge the liability upon such Note
to the extent of the sum or sums to be paid.
Section 5.4 Transfer Agent. The Bank shall send executed,
authenticated Notes to Purchasers on Closing Dates as required and to
subsequent owners and transferees who are entitled to receive Notes pursuant
to the terms of this Bank Agreement, by first class mail.
Section 5.5 Charges and Expenses. No service charge shall be
made for any transfer or exchange of Notes, but in all cases in which Notes
shall be transferred or exchanged hereunder, as a condition to any such
transfer or exchange, the owner of the Note shall, prior to the delivery of
any new Note pursuant to such transfer or exchange, reimburse the Company and
the Bank for their respective actual out-of-pocket expenses incurred in
connection therewith (including, but not limited to, any tax, fee or other
governmental charge required to be paid with respect to such transfer or
exchange, actual expenses for stationery, postage, telephone, telex, wire
transfers, telecopy and retention of records, and reasonable fees and expenses
of their respective counsel). The provisions of this Section 5.5 shall survive
the termination of this Bank Agreement.
Section 5.6 Redemption at the Option of the Company.
(a) Whenever the Company shall effect a redemption at the
option of the Company, at any time in its sole and absolute discretion, of
part or all of the Notes, which shall be without premium or penalty, the
Company shall give written notice thereof to the Bank at least forty (40) days
prior to the date set forth for redemption, the manner in which redemption
shall be effected and all the relevant details thereof. The Bank shall give
written notice to the Purchasers of that redemption at least thirty (30) days
prior to the date set forth for redemption in the form included herewith as
Exhibit A. The Bank shall register the cancellation of the whole or a portion
of the unredeemed Notes, as appropriate. In any event, new Notes will not be
issued to reflect the non-redeemed portion of the Notes. No interest shall be
payable on the redeemed portion of a Note from and after the date of
redemption.
(b) The Bank hereby acknowledges that the Company may effect
a redemption at the option of the Company, at any time in its sole and
absolute discretion, of part or all of the Notes without premium or penalty.
Section 5.7 Mandatory Redemption. The Company shall be
obligated to redeem 100% of the Notes due June 30, 2003. When the Company
shall effect the mandatory redemption, the Company shall give written notice
thereof to the Bank at least forty (40) days prior to the date set forth for
redemption, the manner in which redemption shall be effected and all relevant
details thereof. The Bank shall give written notice to the Purchasers of that
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redemption at least thirty (30) days prior to the date set forth for
redemption in the form included herewith as Exhibit B. The Bank shall register
the cancellation of the whole of the redeemed Notes.
Section 6. Paying Agent.
Section 6.1 Appointment. The Company hereby appoints and
designates the Bank as Paying Agent for the purposes set forth in this Section
6, and the Bank hereby accepts such appointment.
Section 6.2 Payment Provisions.
(a) The Bank shall pay interest on Subscription Payments and
principal of and interest on the Notes to the persons in whose names the Notes
are registered, subject to the limitations contained in Section 5.6(a),
Section 5.7 and in accordance with the terms and provisions of this Bank
Agreement and the Notes, by check mailed by first class mail to the registered
owner of a Note at his address as it appears in the register; provided that
not later than 11:30 a.m. (New York time) on the Interest Payment Date or date
on which principal of any Note is due and payable, the Company shall provide
the Bank with sufficient funds to make those payments.
(b) Each Purchaser shall be entitled to receive with respect
to that Purchaser's Notes, interest from the Closing Date through June 30,
2003.
Section 6.3 Expenses. The Company shall reimburse the Bank
for its actual out-of-pocket expenses incurred in connection with its
obligations pursuant to this Section 6 (including, but not limited to, actual
expenses for stationery, postage, telephone, telex, wire transfers, telecopy
and retention of records), payable within ten (10) days after the Bank gives
notice to the Company that it has incurred such expenses. The obligation to
pay such compensation and reimburse such expenses shall be borne solely by the
Company. Notwithstanding anything herein to the contrary, the Bank shall not
charge the Company any fees for the issuance of checks or wire transfers to
make payments of interest on or repayments of principal of the Notes. The
provisions of this Section 6.3 shall survive the termination of this Bank
Agreement.
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Section 7. Rights and Duties of Bank.
Section 7.1 Duties of the Bank.
(a) Upon the occurrence and continuation of an Event of
Default, the Bank shall declare the entire outstanding aggregate principal
balance of all the Notes plus all accrued interest due and immediately
payable.
(b) In the event that the Company shall default on its
payment obligations to the Bank under this Bank Agreement, the Bank shall be
entitled to institute action against the Company, jointly or severally, to
collect payment under this Bank Agreement.
Section 7.2 Events of Default.
If any of the following events (an "Event of Default") shall
occur and be continuing for any reason whatsoever (and whether such occurrence
shall be voluntary or involuntary or come about or be effected by operation of
law or otherwise):
(i) the Company defaults in the payment of any part of
the principal of any Note when the same shall become due and
payable on June 30, 2003, and such default shall have
continued for more than 30 days; or
(ii) the Company defaults in the payment of any part of
the interest on any Note when the same shall become due and
payable, and such default shall have continued for more than
15 days;
then, the Bank, upon instruction by the owners of at least 50% of the
principal amount of the Notes, by notice to the Company, or the owners of at
least 75% of the principal amount of the Notes, by notice to the Company and
to the Bank, may declare the entire principal of and accrued interest on all
Notes to become immediately due and payable at par without presentment,
demand, protest or other notice of any kind, all of which are waived by the
Company.
Section 7.3 Fees and Expenses. In addition to the
administration fee set forth in Section 1.7 hereof, the Bank shall be entitled
to compensation for its services under this Section 7 in the amount of $2,500
as an acceptance fee, payable upon execution and delivery of this Bank
Agreement; and administrative fees, payable annually on the anniversary date
of
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this Bank Agreement, based upon the aggregate principal amount of outstanding
Notes ten days prior to the anniversary date, in the following amounts:
$ 500,000 to $ 1,000,000 outstanding............. $2,500.00
$ 1,000,001 to $ 2,000,000 outstanding............. $3,000.00
$ 2,000,001 to $ 3,000,000 outstanding............. $4,000.00
$ 3,000,001 to $ 4,000,000 outstanding............. $5,000.00
$ 4,000,001 to $ 5,000,000 outstanding............. $6,000.00
$ 5,000,001 to $ 6,000,000 outstanding............. $7,000.00
$ 6,000,001 to $ 7,000,000 outstanding............. $8,000.00
$ 7,000,001 to $ 7,500,000 outstanding............. $8,500.00
The Company shall reimburse the Bank for its actual out-of-pocket expenses
incurred in connection with its obligations pursuant to this Section 7
(including, but not limited to, actual expenses for stationery, postage,
telephone, telex, wire transfers, telecopy, retention of records, and the
filing of Financing Statements, and reasonable fees and expenses of counsel),
payable within ten (10) days after the Bank gives notice to the Company that
it incurred such expenses. The obligation to pay such compensation and
reimburse such expenses shall be borne solely by the Company. The provisions
of this Section 7.3 shall survive the termination of this Bank Agreement.
Section 7.4 Other Rights and Duties of Bank.
(a) The Bank need exercise only those rights and need
perform only those duties that are contemplated or specifically set forth in
this Bank Agreement and no others.
(b) Notwithstanding anything herein to the contrary, the
Bank may not be relieved from liability for its own grossly negligent action,
its own grossly negligent failure to act, or its own willful misconduct except
that
(i) This paragraph does not limit the effect of
paragraph (a) of this Section.
(ii) The Bank shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
notice received by it pursuant to the subscription agreements
executed by the Purchasers in connection with the purchase of the
Notes.
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(c) The Bank may rely on any document believed by it to be
genuine and to have been signed or presented by the proper person. The Bank
need not investigate any fact or matter stated in the document.
(d) Before the Bank acts or refrains from acting, it may
require an officer's certificate or an opinion of counsel. The Bank shall not
be liable for any action it takes or omits to take in good faith in reliance
on the certificate or opinion.
(e) The Bank may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
Section 8. No Representations. The Bank makes no
representation as to the validity or adequacy of this Bank Agreement or the
Notes delivered to it by the Company; it shall not be accountable for the
Company's use of the proceeds from the Notes and it shall not be responsible
for any statement in the Memorandum or in the Notes other than its
authentication.
Section 9. Indemnification. The Company shall indemnify,
defend and hold the Bank harmless from and against any and all loss, damage,
liability, claim and expense, including taxes (other than taxes based on the
income of the Bank) incurred by the Bank arising out of or in connection with
its acceptance or performance of its obligations under this Bank Agreement,
including the legal costs and expenses of defending itself against any claim
or liability in connection with its performance under this Bank Agreement. The
Bank shall notify the Company promptly of any claim for which it may seek
indemnity. The Company shall defend the claim and the Bank shall cooperate in
the defense. The Bank may have separate counsel and shall pay the fees and
expenses of such counsel. The Company need not reimburse any expense or
indemnify against any loss or liability incurred by the Bank through gross
negligence or bad faith. The provisions of this Section 9 shall survive the
termination of this Bank Agreement.
Section 10. Replacement of Bank.
(a) A resignation or removal of the Bank and appointment of
a successor bank shall become effective only upon the successor bank's
acceptance of appointment as provided in this Section 10.
(b) The Bank may resign by so notifying the Company. The
Company may remove the Bank if:
(i) the Bank is adjudged a bankrupt or an insolvent;
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(ii) a receiver or public officer takes charge of the
Bank or its property; or
(iii) the Bank becomes incapable of acting.
(c) (i) If the Bank resigns or is removed, the Company shall
promptly appoint a successor bank.
(ii) A successor bank shall deliver a written
acceptance of its appointment to the retiring Bank and the
Company. Thereupon the resignation or removal of the
retiring Bank shall become effective and the successor bank
shall have all the rights, powers and duties of the Bank
under this Bank Agreement. The successor bank shall mail a
notice of its succession to Note owners. Upon payment to the
retiring Bank of all amounts owed to it under this Bank
Agreement, the retiring Bank shall promptly transfer all
property held by it under the terms of this Bank Agreement.
(d) If the Bank consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor bank.
Section 11. Notices. All notices and other communications
pursuant to this Bank Agreement shall be in writing, subject to the terms of
Section 1.6 hereof, and shall be delivered by hand or sent by registered,
certified, return receipt requested, or first class mail, or by facsimile,
confirmed by writing, delivered by hand or sent by registered, certified,
return receipt requested, or first class mail delivered or sent on the date of
the facsimile, addressed as follows:
(a) If to the Company:
Grand Court Lifestyles, Inc.
Xxx Xxxxxxxxx Xxxxx
Xxxx Xxx, Xxx Xxxxxx 00000
Facsimile Number: (000) 000-0000
Attention: Xxxxx Xxxxxxx, Esq.
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With a copy to:
Xxxx & Priest LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile Number: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
(b) If to Note owners:
At the addresses of the registered owners appearing
in the register maintained by the Bank.
(c) If to Bank:
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile Number: (000) 000-0000
or at such other address as a party shall have last furnished to the other
parties hereto in writing. Any notice provided for herein shall be deemed to
have been given on the date of the receipt of the notice by hand delivery or
of the facsimile or the third Business Day after the date of mailing,
certified mail, return receipt requested.
Section 12. Choice of Law. This Bank Agreement shall be
governed by the laws of the State of New York, without giving effect to the
principles of conflicts of law thereof.
Section 13. Prior Agreements; Amendment. This Bank Agreement
sets forth the entire agreement of the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements, contracts,
promises, representations, warranties, statements, arrangements and
understandings, if any, among the parties hereto or their representatives with
respect to the subject matter hereof. No waiver, modification or amendment of
any provision, term or condition hereto shall be valid unless in writing and
signed by all parties hereto, and any such waiver, modification or amendment
shall be valid only to the extent therein set forth.
Section 14. Successors. This Bank Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
-15-
Section 15. Enforceability. Any provision of this Bank
Agreement which may by determined by competent authority to be prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 16. Counterparts. This Bank Agreement may be
executed in any number of counterparts, each of which shall be an original,
but all of which together shall constitute one instrument.
Section 17. Use of The Bank of New York Name.
(a) No printed or other material in any language, including
prospectuses, notices, reports, and promotional materials which mentions the
Bank by name or the rights, powers, or duties of the Bank under this Bank
Agreement shall be issued by any of the other parties hereto, or on such
party's behalf, without the prior written consent of the Bank.
(b) Notwithstanding the above, the Bank hereby consents to
the use of its name and its rights, powers and duties under this Bank
Agreement in the Memorandum and any notices and reports required under
applicable Federal and state securities laws in connection therewith. In
addition, the Bank hereby consents to the use of its name and its rights,
powers, and duties under this Bank Agreement in the promotional material
included herewith as Exhibit C.
[INTENTIONALLY LEFT BLANK]
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Section 18. Definitions. All terms used in this Bank
Agreement and not otherwise defined herein shall have the meanings ascribed to
them in the Memorandum.
IN WITNESS WHEREOF, the parties hereto have executed this
Bank Agreement as of the date first above written.
GRAND COURT LIFESTYLES, INC. THE BANK OF NEW YORK
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxxxxx
----------------------------- -------------------------------
Name: Xxxxxxx X. Xxxxx Name: Xxxxx X. Xxxxxxx
----------------------- -------------------------
Title: President Title: Assistant Vice President
----------------------- -------------------------
EXHIBIT A
TO BANK AGREEMENT
[FORM OF NOTICE]
Notice of Voluntary Redemption
of
Grand Court Lifestyles, Inc.
Retirement Financing Notes-V
To holders of Grand Court Lifestyles, Inc. (the "Company")
13.125% Retirement Financing Notes-V due June 30, 2003 (the "Notes"):
Notice is hereby given by The Bank of New York (the "Bank"),
as paying agent for the Notes, that, pursuant to the voluntary redemption
provision of Section 5.6 of the Bank Agreement between the Company and the
Bank, dated May 14, 1997, the Company has elected to redeem and pay off on
__________________________________ (the "Redemption Date") [all] [a portion
of] the above mentioned Notes then outstanding, in accordance with the terms
of the Notes, and that [all] [a portion of] the Notes are called for
redemption on the Redemption Date.
The redemption price on the Redemption Date shall be
$_______. Interest on the Notes so redeemed shall cease from and after the
Redemption Date.
Dated: [month] [day], [year]
---------- ----- ------
The Bank of New York
EXHIBIT B
TO BANK AGREEMENT
[FORM OF NOTICE]
Notice of Mandatory Redemption
of
Grand Court Lifestyles, Inc.
Retirement Financing Notes-V
To holders of Grand Court, Lifestyles, Inc. (the "Company")
13.125% Retirement Financing Notes-V due June 30, 2003 (the "Notes"):
Notice is hereby given by The Bank of New York (the "Bank"),
as paying agent for the Notes, that, pursuant to the mandatory redemption
provision of Section 5.7 of the Bank Agreement between the Company and the
Bank, dated May 14, 1997, the Company will redeem and pay off on June 30, 2003
(the "Redemption Date") 100% of the above mentioned Notes, in accordance with
the terms of the Notes, and that 100% of the Notes are called for redemption
on the Redemption Date.
Interest on the Notes so redeemed shall cease from and after
the Redemption Date.
Dated: [month] [day], [year]
---------- ----- ------
The Bank of New York
EXHIBIT C
TO BANK AGREEMENT
GRAND COURT LIFESTYLES, INC.
RETIREMENT FINANCING NOTES - V SUMMARY
OFFERING $7,500,000
13.125% NOTES DUE JUNE 30, 2003
INVESTMENT OBJECTIVE
13.125% Paid Monthly on the 15th of each month backed by the full faith and
credit of Grand Court Lifestyles, Inc.
RETURN OF PRINCIPAL
100% on June 30, 2003
THE INVESTMENTS
Denominations of $100,000 or any multiple or fraction thereof at the discretion
of the Company. All investors must be accredited investors.
PAYING AGENT & CUSTODIAN
The Bank of New York is authenticating agent, registrar, transfer
agent and paying agent of the Notes. The Bank of New York does not guarantee
or otherwise provide credit support for the Notes.
TAX IMPLICATIONS
All income is considered portfolio income; can be used for employee
benefit plans, IRAs and Keoghs.
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GRAND COURT LIFESTYLES, INC.
RETIREMENT FINANCING NOTES - V SUMMARY
===============================================================================
27 Continuous Years of Successful Operation
Developed Partnerships Which Own and/or Operate Over 20,000 Apartments
Average Occupancy Rate of Over 90%
A Certified Net Worth in Excess of $30 Million
RISKS
INVESTORS SHOULD BE AWARE OF RISK FACTORS WHICH MAY AFFECT THE COMPANY'S
ABILITY TO SERVICE THE DEBT ON THE NOTES. THE NOTES WILL BE UNSECURED
OBLIGATIONS OF GRAND COURT LIFESTYLES, INC. THE NOTES ARE EFFECTIVELY
SUBORDINATED TO CERTAIN SECURED INDEBTEDNESS OF THE COMPANY. MARKET CONDITIONS
MAY REDUCE THE COMPANY'S CASH FLOW, THEREBY ADVERSELY AFFECTING GRAND COURT
LIFESTYLES, INC.'S ABILITY TO MAKE INTEREST AND PRINCIPAL PAYMENTS.
RISKS AFFECTING AN INVESTMENT IN THE NOTES ARE MORE FULLY DESCRIBED IN THE
"RISK FACTORS" SECTION OF THE PRIVATE PLACEMENT MEMORANDUM.
The offering will be made in compliance with relevant state
securities laws and Regulation D promulgated by the Securities and
Exchange Commission under the Securities Act of 1933, as amended.
Interested persons should be informed that there are significant
risks in this transaction and that they should review the private
placement memorandum prior to making a decision to invest. This
material is for use by broker-dealers, attorneys, accountants,
investment counsel and qualified prospective investors. This material
may not be reproduced or recirculated. THIS SUMMARY DOES NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY A
SECURITY, WHICH MAY BE MADE ONLY BY DELIVERY OF THE PRIVATE PLACEMENT
MEMORANDUM.
GRAND COURT LIFESTYLES, INC.
XXX XXXXXXXXX XXXXX
XXXX XXX, XXX XXXXXX 00000
(000) 000-0000 or (000) 000-0000
