BANK AGREEMENT
THIS BANK AGREEMENT, dated as of November 6, 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 or New York (the "Bank").
WITNESSETH:
WHEREAS, the Company is issuing its Retirement Financing Notes-VI due
April 15, 2001 (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) December 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, front 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 he called the Retirement Financing Notes-VI 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-VI - 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. 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 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
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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 payab1e 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.
(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.
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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 I 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 December 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.
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
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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, ctc. 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 signatures 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 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.
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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 ad 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 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
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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 be valid and effectual
to satisfy and discharge the liability upon such Note to the extent of the sum
or sums to be paid.
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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 April 15, 2001. 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 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.
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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 April 15, 2001.
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.
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.
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(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
April 15, 2001, 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 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
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
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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.
(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.
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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;
(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.
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(d) If the Bank consolidates, merges or converts into, or transfers
al1 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.
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
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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, contract, 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.
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.
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[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/ Xxxx X. Xxxxx
--------------------------------- -------------------------------
Name: Xxxxxxx X. Xxxxx Name: Xxxx X. Xxxxx
--------------------------- ------------------------
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-VI
To holders of Grand Court Lifestyles, Inc. (the "Company") 13.125%
Retirement Financing Notes-VI due April 15, 2001 (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 __________, 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-VI
To holders of Grand Court, Lifestyles, Inc. (the "Company") 13.125%
Retirement Financing Notes-VI due April 15, 2001 (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______________________, 1997, the Company will redeem and pay off on
April 15, 2001 (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 - VI SUMMARY
OFFERING $6,000,000
13.125% NOTES DUE APRIL 15, 2001
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 April 15, 2001
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 - VI SUMMARY
28 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
