BANK AGREEMENT
THIS BANK AGREEMENT, dated as of July 25, 1997 (as amended,
modified or supplemented from time to time, the "Bank Agreement"), is by and
among Grand Court Lifestyles, Inc., a corporation organized and existing under
the laws of the State of Delaware, (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 Series 11, 12%
Debentures due June 30, 2004 (the "Debentures") pursuant to the Company's
Confidential Private Placement Memorandum, as the same may be from time to
time amended (the "Memorandum");
WHEREAS, the Company's private placement of the Debentures
(the "Offering") will terminate on the earlier of (i) the date on which all
the Debentures are sold or (ii) July 31, 1998 (the "Offering Termination
Date");
WHEREAS, subscribers will purchase Debentures 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");
WHEREAS, the Company desires to deliver to the Bank amounts
received by the Company from subscribers for Debentures (each, singly, a
"Purchaser," and, collectively, the "Purchasers"), in payment for the
Debentures, which amounts shall be released to the Company at the Initial
Closing and at each Additional Closing;
WHEREAS, each Purchaser shall be entitled to receive, on a
monthly basis prior to the Closing Date with respect to that Purchaser's
Debentures, distributions representing interest accrued on that Purchaser's
subscription payment at a rate of 12% per annum;
WHEREAS, the Company desires to establish an interest bearing
escrow fund to be called Grand Court Lifestyles, Inc. Series 11 Escrow Fund
Account (the "Fund") with the Bank;
WHEREAS, the Company, for the benefit of the Bank and the
Purchasers, wishes to assign to, and to grant the Bank a security interest in,
certain notes, instruments and
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documents as more fully described below and the Bank is willing to accept such
security interest and assignment upon the terms and conditions hereinafter set
forth; and
WHEREAS, the Company wishes to appoint the Bank as Escrow
Agent, Authenticating Agent, Custodian, Paying Agent, Registrar and Transfer
Agent with respect to the Debentures and the above-mentioned notes,
instruments and documents 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 Debentures
("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 the 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 "Grand Court Lifestyles, Inc. - 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
Debentures 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
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to that Purchaser's Debentures, interest will accrue on that Purchaser's
Subscription Payment at a rate of 12% 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 at 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 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 Conditions of Initial Closing and Additional
Closings. Notwithstanding anything to the contrary in this Bank Agreement, it
is a condition precedent to the Initial Closing and to each Additional Closing
that the Company shall deliver to the Bank Set Aside Purchase Notes in such an
amount, as calculated by the Company, that 80% of the aggregate principal
balance outstanding at maturity of the Set Aside Purchase Notes equals the
principal amount of the Debentures which will be sold at that Initial Closing
or Additional Closing, together with the related Consent and Agreement
pertaining to each such Set Aside Purchase Note and the related Consent,
Assignment and Agreement pertaining to the Purchased Partnership Interest and
the related Financing Statements (as such terms are defined in Section 7
hereof), as provided in Section 7 hereof. 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. As used in this Section 1.4 and elsewhere in
this Bank Agreement, a statement concerning the outstanding principal amount
at maturity of a Set Aside Purchase Note refers to the amount of principal
that would be due at maturity on that Set Aside Purchase Note if all payments
of principal on that Set Aside Purchase Note scheduled to be made prior to
maturity were made when due and none of such payments were deferred by the
obligor thereof with the consent of the Company.
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
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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.
(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 7.10 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 Debentures
have been sold prior thereto. In the event the Offering terminates prior to
July 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 this 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 ten (10) days after the
Bank gives the Company notice that any such
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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 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.
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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 Debentures 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 Debentures. In case any
officer of the Company whose signature shall appear on a Debenture shall cease
to be such officer before the delivery of such Debenture or the issuance of a
new Debenture 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 Debentures as shall
have the Certificate of Authentication endorsed thereon in substantially the
form set forth in the form of Debenture 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 Debentures
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 Debenture shall be conclusive evidence that such
Debenture has been authenticated and delivered under this Bank Agreement. The
Certificate of Authentication on any Debenture 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 Debentures.
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Section 4. Mutilated, Lost, Stolen or Destroyed Debentures.
Subject to applicable law, in the event any Debenture is mutilated, lost,
stolen or destroyed, the Company may authorize the execution and delivery of a
new Debenture of like date, number, maturity and denomination as that
mutilated, lost, stolen or destroyed, provided, however, that in the case of
any mutilated Debenture, such mutilated Debenture shall first be surrendered
to the Company, and in the case of any lost, stolen or destroyed Debenture,
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 bond of
indemnity or otherwise as shall be satisfactory to the Company and the Bank.
The Company may charge the Purchaser of such Debenture 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
Debentures. The Debentures are issuable only as registered Debentures without
coupons in the denomination of $100,000 or any multiple or any fraction
thereof at the sole discretion of the Company. Each Debenture 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 Debentures. Upon surrender for
registration of transfer of any Debenture 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 Debentures in an aggregate principal amount equal
to the unpaid principal amount of such surrendered Debenture, registered in
the name of the designated transferee or transferees. Every Debenture
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 Debenture or his attorney duly authorized in writing.
Notwithstanding the preceding, the Debentures may not be transferred without
an effective registration statement under the Securities Act of 1933 covering
the Debentures 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 Debenture, such
Debenture may be exchanged for other Debentures of any authorized
denominations, in an aggregate principal amount equal to the unpaid principal
amount of such
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surrendered Debenture, upon surrender of the Debenture 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 Debenture 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 Debenture or Debentures which the Debenture owner making
the exchange is entitled to receive. Any Debenture or Debentures issued in
exchange for any Debenture or upon transfer thereof shall be dated the date to
which interest has been paid on such Debenture surrendered for exchange or
transfer, and neither gain nor loss of interest shall result from any such
exchange or transfer. In addition, each Debenture 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 Debenture
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 Debenture 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 Debenture or be effective to transfer any Debenture. All
payments to the person in whose name any Debenture shall be registered shall
be valid and effectual to satisfy and discharge the liability upon such
Debenture to the extent of the sum or sums to be paid.
Section 5.4 Transfer Agent. The Bank shall send executed,
authenticated Debentures to Purchasers on Closing Dates and to subsequent
owners and transferees who are entitled to receive Debentures 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 Debentures, but in all cases in which
Debentures shall be transferred or exchanged hereunder, as a condition to any
such transfer or exchange, the owner of the Debenture shall, prior to the
delivery of any new Debenture 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.
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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 Debentures, 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 in the form included herewith as Exhibit D of
that redemption at least thirty (30) days prior to the date set forth for
redemption. The Bank shall register the cancellation of the whole or a portion
of the redeemed Debentures, as appropriate. In any event, new debentures will
not be issued to reflect the non-redeemed portion of the Debentures. No
interest shall be payable on the redeemed portion of a Debenture from and
after the date of redemption.
(b) In the event the Company should effect a partial
redemption at the option of the Company of the Debentures, the Bank shall (i)
return to the Company Set Aside Purchase Notes selected by the Company in such
an amount that 80% of the aggregate principal balance outstanding at maturity
of such Set Aside Purchase Notes equals the principal amount of the redeemed
portion of the Debentures, (ii) execute and deliver to the Company an
instrument prepared by the Company effecting a release by the Bank of the
existing assignment of the security interest and Purchase Agreement covering
the related Purchased Partnership Interest (as such terms are defined in
Section 7.3(a) hereof), (iii) file with the appropriate governmental
authorities indicated by the Company to the Bank, Financing Statements
delivered by the Company to the Bank recording the termination of the Bank's
security interest and assignment granted under this Bank Agreement, and (iv)
return to the Company the Consent and Agreement described in Section 7.2(c)
hereof, the Consent, Assignment and Agreement described in Section 7.3(c)
hereof relating to such returned Set Aside Purchase Notes and the Purchased
Partnership Interest, respectively. In no event, however, will the Bank
release Set Aside Purchase Notes if the sum of 80% of the aggregate principal
balance outstanding of the Set Aside Purchase Notes would be less than the
principal amount of the Debentures that remain outstanding.
Section 5.7 Mandatory Redemption. The Company shall be
obligated to redeem 100% of the Debentures due June 30, 2004. 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 Debentures.
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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.
(a) Section 6.2 Payment Provisions. The Bank shall pay
interest on Subscription Payments and principal of and interest on the
Debentures to the persons in whose names the Debentures are registered,
subject to the limitations contained in Section 5.6(a) and in accordance with
the terms and provisions of this Bank Agreement and the Debentures, by check
mailed by first class mail to the registered owner of a Debenture 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
Debenture 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 Debentures, interest from the Closing Date through June
30, 2004 on that portion of the Purchaser's Debentures which have not been
redeemed pursuant to Section 5.6 hereof.
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 Debentures. The
provisions of this Section 6.3 shall survive the termination of this Bank
Agreement.
Section 7. The Custodian.
Section 7.1 Appointment. The Company hereby appoints and
designates the Bank as Custodian for the purposes set forth in this Section 7,
and the Bank hereby accepts such appointment.
Section 7.2 Set Aside Purchase Notes.
(a) The Company is the holder of certain Purchase Notes
entered into pursuant to a Purchaser Agreement executed by the respective
Investing Partnership. Under the terms
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of each such Purchase Note and Purchase Agreement, the Company is entitled to
assign each Purchase Note and the Company's right to payments of interest
thereon and the principal amount thereof. Interest and scheduled payments of
principal, where required, shall be paid by the Investing Partnership out of
cash flow received from distributions, if any, from the Operating Partnership.
Any interest and, where required, scheduled payments of principal payable
prior to maturity that are due but unpaid on Purchase Notes shall be deferred
until the maturity of that Purchase Note.
(b) In order to secure the payment of the Bank's fees and
expenses under this Section 7 and the payment of principal of and interest on
the Debentures, subject to the terms and conditions of Section 7.6 hereof, the
Company hereby grants the Bank a security interest in and assigns to the Bank,
for the benefit of the Bank and the owners of Debentures from time to time,
all of the Purchase Notes, having an aggregate face value of $12,675,000 and
an aggregate balance of principal due at maturity equal to $11,066,000, listed
in Exhibit A hereto (the "Set Aside Purchase Notes") issued by the Investing
Partnerships listed in Exhibit A hereto, and the proceeds thereof. In order to
perfect such security interests, the Company shall deliver to the Bank the Set
Aside Purchase Notes. Upon receipt of each Set Aside Purchase Note, the Bank
shall execute and deliver to the Company a receipt therefor. Notwithstanding
the assignment of the Set Aside Purchase Notes to the Bank, the scheduled
payments of principal payable prior to maturity on certain Set Aside Purchase
Notes so providing and interest payments on all of the Set Aside Purchase
Notes shall be payable directly to the Company until such time as an Event of
Default (as defined in Section 7.6 hereof) shall occur and be continuing. The
parties hereto confirm that payment of interest under a Set Aside Purchase
Note or scheduled payments of principal payable prior to maturity made under
the Set Aside Purchase Notes listed in Exhibit A hereto, as requiring such
scheduled principal payment, will belong to the Company until such time as an
Event of Default shall occur and be continuing. The parties hereto further
confirm that (i) any interest and principal on a Set Aside Purchase Note paid
at the maturity thereof shall belong to the Company so long as an Event of
Default shall not have occurred and be continuing and (ii) any amounts
received by the Company from an Operating Partnership or an Investing
Partnership as repayment of loans or advances made by the Company shall belong
to the Company and will not be used to redeem any portion of the Debentures.
(c) The Company shall deliver to the Bank a Consent and
Agreement in the form of Exhibit B hereto, executed by each Investing
Partnership listed in Exhibit A hereto, under which the Investing Partnership
shall (i) consent to the Company's assignment to the Bank of the Investing
Partnership's Set Aside Purchase Note, (ii) consent to the Company's delivery
of the Investing Partnership's Set Aside Purchase Note to the Bank, and (iii)
agree that upon receiving the Bank's notice of an Event of Default that is
continuing, the Investing Partnership shall pay all sums due under its Set
Aside Purchase Note directly to the Bank. Upon receipt of
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each such Consent and Agreement, the Bank shall execute and deliver to the
Company a receipt therefor.
Section 7.3 Purchased Partnership Interests.
(a) Each Investing Partnership listed in Exhibit A hereto,
in order to secure its payment of the principal of and interest on its Set
Aside Purchase Note, has entered into a Purchase Agreement under which the
Investing Partnership has granted a security interest in that Investing
Partnership's limited partnership interest listed in Exhibit A hereto (a
"Purchased Partnership Interest") in a respective Operating Partnership listed
in Exhibit A hereto (an "Operating Partnership").
(b) In order to secure the payment of the Bank's fees and
expenses under this Section 7 and the payment of principal of and interest on
the Debentures, subject to the terms and conditions of Section 7.6 hereof, the
Company hereby grants the Bank a security interest in and assigns to the Bank,
for the benefit of the Bank and the owners of the Debentures from time to
time, all of the Company's rights, title and interest in and to each Purchase
Agreement listed in Exhibit A hereto, each security interest in a Purchased
Partnership Interest created under any such Purchase Agreement, each such
Purchased Partnership Interest, each allocation and distribution due and
payable or to be made from time to time on such Purchased Partnership
Interest, and the proceeds thereof. In order to perfect such security
interest, the Company shall deliver to the Bank Financing Statements
("Financing Statements") for execution by the Bank. The Bank shall return
promptly those executed Financing Statements for filing by the Company with
the appropriate governmental authorities. the Company hereby agrees to deliver
to the Bank for execution, from time to time, such additional Financing
Statements as must be filed by the Company with such appropriate governmental
authorities in order to continue the perfection of such security interest.
Notwithstanding the assignments, pursuant to this Section 7.3(b), of the
above-mentioned Purchase Agreements, security interests, Purchased Partnership
Interests, and due and payable allocations and distributions on Purchased
Partnership Interests to the Bank, all allocations and distributions on such
Purchased Partnership Interests, if any, in excess of the amounts due and
payable by the Investing Partnership on account of principal and interest on
their respective Purchase Notes shall be payable directly to the respective
Investing Partnership if an event of default shall not have occurred and be
continuing under that Investing Partnership's Set Aside Purchase Note and
shall be payable directly to the Bank for the benefit of the Bank, subject to
Section 7.5(g) and the owners of the Debentures only if the Bank shall
foreclose on the security interest granted pursuant to this Section 7.3(b)
pursuant to Section 7.5(e) hereof.
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(c) The Company shall deliver to the Bank a Consent,
Assignment and Agreement in the form of Exhibit C hereto, executed by each
Investing Partnership and Operating Partnership listed in Exhibit A hereto,
under which the Investing Partnership and Operating Partnership shall (i)
consent to the Company's assignment to the Bank, pursuant to Section 7.3(b)
hereof, of the Purchase Agreement, security interest in the Purchased
Partnership Interest, Purchased Partnership Interest, each allocation and
distribution due and payable or to be made from time to time on the Purchased
Partnership Interest, and the proceeds thereof; (ii) consent to the Company's
delivery of the above-mentioned Financing Statements and the Bank's filing of
the Financing Statements from time to time with the appropriate governmental
authorities; (iii) assign to the Bank all allocations and distributions which
may be due and payable or made from time to time on the Purchased Partnership
Interest (subject to the terms and conditions set forth in this Bank
Agreement) until all outstanding obligations under the Set Aside Purchase Note
which is in default shall have been paid in full (including, without
limitation, all costs of collection, reasonable attorney fees and other fees
and expenses); and (iv) agree that upon foreclosure of the security interest
granted pursuant to Section 7.3(b) hereof, pursuant to Section 7.5(e) hereof,
all allocations and distributions on the Purchased Partnership Interest shall
be paid directly to the Bank, as the assignee of the Company, regardless of
whether the Bank becomes a substituted limited partner in place of the
Investing Partnership in the Operating Partnership but subject to the
limitations in subparagraph (iii) above. Upon receipt of each such Consent,
Assignment and Agreement, the Bank shall execute and deliver to the Company a
receipt therefor.
Section 7.4 Attachment of Security Interests.
Notwithstanding anything to the contrary in this Bank
Agreement, each security interest granted by the Company to the Bank under
this Section 7 shall become effective and shall attach only upon the Company's
delivery to the Bank of the respective Set Aside Purchase Note, and the
related Consent and Agreement and Financing Statements pertaining to that Set
Aside Purchase Note, the related Consent, Assignment and Agreement and related
Financing Statements pertaining to the Purchased Partnership Interest. The
Company shall be obligated to deliver to the Bank only those Set Aside
Purchase Notes selected by the Company, in its sole discretion, in such an
amount that 80% of the aggregate principal balance outstanding at maturity of
the Set Aside Purchase Notes equals the principal amount of the Debentures
which will be sold at the respective Initial Closing or Additional Closing,
together with the Consent and Agreement and Financing Statements pertaining to
that Set Aside Purchase Note, the Consent, Assignment and Agreement and
related Financing Statements pertaining to the Purchased Partnership Interest.
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Section 7.5 Duties of the Bank.
(a) The Bank shall hold the notes, Agreements and
instruments deposited with it for the purposes of this Bank Agreement and for
the benefit of the Bank and of the owners of the Debentures from time to time,
and shall perform all duties imposed upon it by this Bank Agreement until this
Bank Agreement is terminated. The security interests and assignments created
by this Bank Agreement and by each Consent, Assignment and Agreement shall
automatically terminate when all of the Debentures and all amounts payable to
the Bank under this Bank Agreement have been paid in full. Thereupon, the Bank
shall return to the Company the Set Aside Purchase Notes deposited with it
pursuant to Section 7.2(b) hereof and not previously returned to the Company
pursuant to the terms of this Agreement, and shall file with the appropriate
governmental authorities indicated by the Company to the Bank Financing
Statements delivered by the Company to the Bank recording the termination of
the Bank's security interests and assignments granted under this Bank
Agreement and each Consent, Assignment and Agreement.
(b) Upon the occurrence and continuation of an Event of
Default, the Bank shall declare the entire outstanding aggregate principal
balance of all the Debentures plus all accrued interest due and immediately
payable. In addition, the Bank shall promptly notify each Investing
Partnership in writing of the occurrence of such Event of Default in the form
included herewith as Exhibit F. Upon receipt of such notice, each Investing
Partnership shall (i) make all payments of principal and interest on its
respective Set Aside Purchase Note to the Bank.
The Bank shall collect all payments received under the
foregoing security interests and assignments and apply them for the benefit of
the Bank and of the owners of the Debentures firstly to the payment of all
costs of collection, secondly to the payment of the Bank's fees and expenses,
thirdly to the payment of all accrued interest (including, without limitation,
interest accrued after the date of the Event of Default) and next to the
repayment of principal of the Debentures, until all amounts due under the
Debentures shall have been paid in full together with all costs of collection,
fees and expenses.
(c) Upon the occurrence and continuation of an Event of
Default, the Bank shall be entitled to institute action against the Company to
collect payment under the Debentures without any prior requirement to attempt
to collect any funds under the Set Aside Purchase Notes or the related
Purchased Partnership Interests. 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 to collect payment
under this Bank Agreement, without any prior requirement to attempt to collect
any funds under the Set Aside Purchase Notes or the related Purchased
Partnership Interests.
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(d) Upon the occurrence and continuation of an Event of
Default, the Bank, in its discretion, is authorized to, but shall not be
required to, proceed in any way legally available to it to liquidate the Set
Aside Purchase Notes and the Purchased Partnership Interests (if the Bank
shall have foreclosed on such Set Aside Purchase Note pursuant to Section
7.5(e) hereof), in each case, but not limited to, the public or private sale
of all or any part thereof upon three (3) days' prior notice to the Company,
free and clear of any claim, lien, charge or encumbrance including, without
limitation, any right of equity of redemption. The Bank shall apply the
proceeds of any such sale firstly to the payment of the expenses of the sale,
secondly to the payment of the Bank's fees and expenses, thirdly to the
payment of accrued interest including accrued interest from and after the
Event of Default, and next to the payment of principal of the Debentures. The
Bank shall not be liable to the Company or its affiliates because of any sale
or the consequences thereof.
(e) While an Event of Default is continuing, if there shall
occur or if there shall have occurred and be continuing an event of default
under any Set Aside Purchase Note, the Bank shall immediately send written
notice of that event of default under that Set Aside Purchase Note to the
maker of that Set Aside Purchase Note. If that event of default is continuing
after the expiration of the grace period, if any, contained in that Set Aside
Purchase Note, the Bank shall immediately foreclose on the security interest
in the related Purchased Partnership Interest by notifying the general partner
of the related Operating Partnership of the foreclosure. The Bank shall send a
notice to the Investing Partnership stating that it is retaining the Purchased
Partnership Interest in discharge of the defaulted Set Aside Purchase Note
pursuant to Section 9-505 of the Uniform Commercial Code and shall request
admission as a substituted limited partner in place of the related Investing
Partnership in that Operating Partnership, subject to the limitations set
forth in Section 7.3(c)(iii) hereof, and to obtaining previous Multi-family
Participation Clearance from the United States Department of Housing and Urban
Development ("HUD 2530 Clearance") with respect to that Operating Partnership,
if required, in satisfaction of that Set Aside Purchase Note (but not of any
Debenture); provided, that during any time period pending obtaining HUD 2530
Clearance, if required, or if HUD 2530 Clearance is required for that
Operating Partnership but cannot be obtained, or if the Bank may not be
admitted as a substituted limited partner in the Operating Partnership for any
reason, the Bank shall nevertheless be entitled to receive all allocations and
distributions from that Operating Partnership as the assignee of the Company
and this Bank Agreement shall operate as an assignment of such allocations and
distributions by the Investing Partnership subject to the limitations set
forth in Section 7.3(c)(iii) hereof. In addition, while an Event of Default is
continuing, if there shall occur or if there shall have occurred and be
continuing an event of default under any Set Aside Purchase Note or under any
Partnership Agreement governing the Operating Partnership related to the
Purchased Partnership Interest, the Bank shall be authorized to exercise any
and all rights and remedies available to it as the holder of the respective
Set Aside Purchase Note, the substituted partner or assignee with respect to
the Purchased
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Partnership Interest in the related Operating Partnership, as well as any
other remedy available under law or equity. The Bank shall apply the proceeds
of its exercise of the above-mentioned rights and remedies firstly to the
payment of all costs of collection, secondly to the payment of the Bank's fees
and expenses, thirdly to the payment of all accrued interest (including,
without limitation, interest accrued after the date of the Event of Default)
and next to repayment of principal of the Debentures, until all amounts due
under the Debentures shall have been paid in full together with all costs of
collection, fees and expenses.
(f) If a default on any payment of principal or interest on
a Set Aside Purchase Note shall occur when no Event of Default is continuing,
then the Company shall immediately give the Bank notice thereof and upon
receiving such notice the Bank shall immediately send written notice of that
event of default under that Set Aside Purchase Note to the maker of that Set
Aside Purchase Note.
(g) If that event of default is continuing after the
expiration of the grace period, if any, contained in that Set Aside Purchase
Note, the Bank shall immediately foreclose on the security interest in the
related Purchased Partnership Interest by notifying the general partner of the
related Operating Partnership of such foreclosure. The Bank shall send a
notice to the Investing Partnership stating that it is retaining the Purchased
Partnership Interest in discharge of the defaulted Set Aside Purchase Note
pursuant to Section 9-505 of the Uniform Commercial Code and shall request
admission as a substituted limited partner in place of the related Investing
Partnership in that Operating Partnership, subject to obtaining HUD 2530
Clearance, if required, in satisfaction of that Set Aside Purchase Note (but
not of any Debenture); provided that during any time period pending obtaining
HUD 2530 Clearance, if required, or if HUD 2530 Clearance is required for that
Operating Partnership but cannot be obtained, the Bank may not be admitted as
a substituted limited partner in the Operating Partnership for any reason, the
Bank shall be entitled nevertheless to receive all allocations and
distributions from that Operating Partnership as the assignee of the Company
and this Bank Agreement shall operate as an assignment of such allocations and
distributions by the Operating Partnership, subject to the limitations in
Section 7.3(c)(iii) hereof. The Bank shall pay over to the Company any amounts
received from the Operating Partnership unless and until an Event of Default
shall occur and be continuing. If and when such Event of Default shall occur
and be continuing, the Bank shall follow the proceedings specified in this
Section 7.5.
(h) The rights and remedies enumerated herein are in
addition to and not in lieu of any other right or remedy available to the Bank
under law or equity, including, without limitation, rights and remedies
available to a secured party under the Uniform Commercial Code; provided,
however, that the Bank shall not be entitled to apply the proceeds of the
foreclosure of any Set Aside Purchase Note or Purchased Partnership Interest
to amounts owing to the Bank or the owners of the Debentures under this Bank
Agreement unless an Event of
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Default shall occur and be continuing. The Bank shall be entitled to exercise
one or more remedies at the same time, all such rights and remedies being
cumulative and not mutually exclusive.
(i) The Company shall remain liable for any deficiency
remaining after the application of proceeds of the foreclosure of any Set
Aside Purchase Note or Purchased Partnership Interest collected by the Bank
including, but not limited to, all actual costs and expenses of collection
(including, without limitation, reasonable attorneys' fees and expenses). If
any funds shall remain in the possession of the Bank after the payment of all
amounts due under the Debentures, all such costs of collection thereof and all
other actual fees and expenses (including without limitation reasonable
attorneys' fees and expenses) of the Bank, the Bank shall deliver such
remaining funds to the Company. The provisions of this Section 7.5(i) shall
survive the termination of this Bank Agreement.
Section 7.6 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 Debenture when the same shall become
due and payable on June 30, 2004, and such default shall
have continued for more than thirty (30) days; or
(ii) the Company defaults in the payment of any part of
the interest on any Debenture when the same shall become due
and payable, and such default shall have continued for more
than fifteen (15) days;
then, the Bank, upon instruction by the owners of at least 50% of the
principal amount of the Debentures, by notice to the Company, or the owners of
at least 75% of the principal amount of the Debentures, by notice to the
Company and to the Bank, may declare the entire principal of and accrued
interest on all Debentures 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 7.7 Sale of Set Aside Purchase Notes.
The Company may from time to time while no Event of Default
shall have occurred and be continuing arrange the sale of one of more Set
Aside Purchase Notes to a third party, subject to the following conditions:
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(i) The Company shall give prompt written notice
thereof to the Bank together with all relevant details of
the proposed transaction.
(ii) Except as provided herein, the Bank shall receive
cash in the amount equal to (x) the sum of 80% of the
principal balance due at maturity of the Set Aside Purchase
Note being sold and (y) an amount sufficient to pay accrued
interest on the pro rata portion of Debentures to be prepaid
pursuant to subparagraph (iv) below.
(iii) Upon receipt of cash as provided in subparagraph
(ii) above, the Bank will apply the proceeds to the pro rata
redemption of the Debentures at par plus payment of accrued
interest thereon. Thereafter, the Bank shall deliver each
Set Aside Purchase Note then sold to the Company, or at the
written request of the Company, to the purchaser, together
with an assignment of security interest and Purchase
Agreement covering the related Purchased Partnership
Interest. Subject to Section 8(b) hereof the Bank shall have
no liability whatsoever to the purchaser or any party hereto
for its actions pursuant to this Section 7.7.
(iv) Notwithstanding the above, the first $1,066,000 of
proceeds received from the sale of one or more of the Set
Aside Purchase Notes or from any other capital transactions
effecting one or more Set Aside Purchase Notes, shall belong
to the Company and shall not be used to redeem any portion
of the Debentures unless so determined by the Company. Upon
receiving notice from the Company of such proposed
transaction, the Bank shall deliver, if requested by the
Company, each Set Aside Purchase Note to be effected by such
transaction to the Company, or at the written request of the
Company, to the purchaser, together with an assignment of
security interest and Purchase Agreement covering the
related Purchased Partnership Interest. Subject to Section
8(b) hereof the Bank shall have no liability whatsoever to
the purchaser or any party hereto for its actions pursuant
to this Section 7.7.
Section 7.8 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 $2,500
as an acceptance fee, payable upon execution and delivery of this Bank
Agreement; and administrative fees, payable annually on the anniversary date
of this Bank Agreement, based upon the aggregate principal amount of
outstanding Debentures ten (10) days prior to the anniversary date, in the
following amounts:
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$ 500,000 to $1,000,000 outstanding................. $ 2,500
$ 1,000,001 to $ 2,000,000 outstanding................ $ 3,000
$ 2,000,001 to $ 3,000,000 outstanding................ $ 4,000
$ 3,000,001 to $ 4,000,000 outstanding................ $ 5,000
$ 4,000,001 to $ 5,000,000 outstanding................ $ 6,000
$ 5,000,001 to $ 6,000,000 outstanding................ $ 7,000
$ 6,000,001,to $ 7,000,000 outstanding................ $ 8,000
$ 7,000,001 to $ 8,000,000 outstanding................ $ 9,000
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 Set Aside
Purchase Notes and the related Purchased Partnership Interests in which the
Bank has a security interest will be available to satisfy the Company's
payment obligations to the Bank under this Section 7.8 only when an Event of
Default has occurred and is continuing. The provisions of this Section 7.8
shall survive the termination of this Bank Agreement.
Section 7.9 Substitution of Set Aside Purchase Notes.
(a) The Company may from time to time withdraw any one or
more of the Set Aside Purchase Notes (a withdrawn Set Aside Purchase Note
shall be defined for the purposes herein as the "Withdrawn Set Aside Purchase
Note") and replace the Withdrawn Set Aside Purchase Note with any one or more
Purchase Notes of which it is the holder (any such Purchase Note shall be
defined for the purposes herein as the "New Set Aside Purchase Note") so long
as (i) no Event of Default has occurred and is continuing and (ii) the sum of
80% of the aggregate principal balances of the Set Aside Purchase Notes held
by the Bank after the Withdrawn Set Aside Purchase Note is withdrawn and the
New Set Aside Purchase Note is equal to the principal amount of the Debentures
that remain outstanding.
(b) In order to effect the substitution described in Section
7.9(a) hereof, the Company shall deliver to the Bank the New Set Aside
Purchase Note along with the Consent and Agreement as described in Section
7.2(c) hereof, the Financing Statements pertaining to the New Set Aside
Purchase Note, the Consent, Assignment and Agreement as described in Section
7.3(c) hereof, and the related Financing Statements pertaining to the
Purchased Partnership Interest that secures such New Set Aside Purchase Note.
Upon receiving the New Set Aside Purchase Note,
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and the related documents described in the preceding sentence, the security
interest and assignment created by this Bank Agreement, each Consent and
Agreement described in Section 7.2(c) and each Consent, Assignment and
Agreement described in Section 7.3(c) hereof each as relates to the Withdrawn
Set Aside Purchase Note, shall automatically terminate and shall have no
further force or effect. Thereupon, the Bank shall (i) return the Withdrawn
Set Aside Purchase Note to the Company, (ii) execute and deliver to the
Company an instrument prepared by the Company effecting a release by the Bank
of the existing assignment of the security interest and Purchase Agreement
covering the related Purchased Partnership Interest, (iii) file with the
appropriate governmental authorities indicated by the Company to the Bank,
Financing Statements delivered by the Company to the Bank recording the
termination of the Bank's security interest and assignment granted under this
Bank Agreement, and (iv) return to the Company the Consent and Agreement
described in Section 7.2(c) hereof and the Consent, Assignment and Agreement
described in Section 7.3(c) hereof, each as relates to such Withdrawn Set
Aside Purchase Note. The Company will notify the Debenture holders of the
substitution of the Withdrawn Set Aside Purchase Note with the New Set Aside
Purchase Note within sixty (60) days thereof and provide those Debenture
holders with the information pertaining to the New Set Aside Purchase Note
that would have been contained in the Memorandum if the New Set Aside Purchase
Note had been included with the Set Aside Purchase Notes described therein.
(c) After the substitution of the New Set Aside Purchase
Note for the Withdrawn Set Aside Purchase Note, the New Set Aside Purchase
Note shall be deemed to be a Set Aside Purchase Note for all purposes as set
forth in this Bank Agreement.
Section 7.10 Delivery of Set Aside Purchase Notes. The
Company shall deliver the Set Aside Purchase Notes together with the Consent,
Assignment and Agreement required by Section 7.3(c) hereof, and the Consent
and Agreement required by Section 7.2(c) hereof, and the related Financing
Statements as follows:
(a) Original Set Aside Purchase Notes and related original Set
Aside Investor Notes shall be delivered to:
The Bank of New York
0 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxxx Xxxxxxx,
A.V.P., Security Operation
Free Receive Area, 5th Floor.
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No less than ten (10) days prior to the delivery by the
Company to the Bank of the first Set Aside Purchase
Note, the Company shall deliver a schedule in duplicate
form of all Set Aside Purchase Notes and Set Aside
Investor Notes to the Bank at the address set forth in
Section 12 hereof.
(b) Copies of each Set Aside Purchase Note together with the
Consent, Assignment and Agreement required by Section
7.3(c) hereof, and the Consent and Agreement required by
Section 7.2(c) hereof, and the related Financing
Statements shall be delivered by the Company to the Bank
for execution at the address set forth in Section 12
hereof and promptly returned to Company's counsel at the
address as set forth in Section 12 hereof.
Section 7.11 Matured Set Aside Purchase Notes. The Bank
shall return promptly to the Company matured Set Aside Purchase Notes (the
"Matured Set Aside Purchase Notes") after delivery by the Company to the Bank
of sufficient funds to make payment of all principal and interest on the
Debentures being redeemed pursuant to Section 5.6 hereof. In addition to the
return of those Matured Set Aside Purchase Notes, the Bank shall (i) execute
and deliver to the Company an instrument prepared by the Company effecting a
release by the Bank of the existing assignment of the security interest and
Purchase Agreement covering the related Purchased Partnership Interest, (ii)
file with the appropriate governmental authorities indicated by the Company,
financing statements delivered by the Company to the Bank recording the
termination of the Bank's security interest and assignment granted under this
Bank Agreement and (iii) return to the Company the Consent and Agreement
described in Section 7.2(c) hereof and the Consent, Assignment and Agreement
described in Section 7.3(c) hereof, each as relates to such Matured Set Aside
Purchase Note.
Section 8. 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.
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(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
Debentures.
(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 9. No Representations. The Bank makes no
representation as to the validity or adequacy of this Bank Agreement or the
Debentures, or any Set Aside Purchase Note or Purchased Partnership Interest,
in which the Bank has a security interest, or any Financing Statement
delivered to it by the Company or the Bank's filing of any such Financing
Statement with any governmental authority; it shall not be accountable for the
Company's use of the proceeds from the Debentures and it shall not be
responsible for any statement in the Memorandum or in the Debentures other
than its authentication.
Section 10. 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 the Company shall pay the
reasonable 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 10 shall
survive the termination of this Bank Agreement.
-23-
Section 11. 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 11.
(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 Debenture 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 12. 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 or certified
mail, return receipt requested, delivered or sent on the date of the
facsimile, addressed as follows:
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(a) If to the Company:
Grand Court Lifestyles, Inc.
Xxx Xxxxxxxxx Xxxxx
Xxxx Xxx, Xxx Xxxxxx 00000
Facsimile Number: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx
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 Debenture 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
Attention: Xxxx Xxxxx,
Trustee Administration
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 13. 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 14. Prior Agreements; Amendment. This Bank Agreement,
together with each Consent and Agreement and each Consent, Assignment and
Agreement referred to in Section 7 hereof, sets forth the entire agreement of
the parties hereto with respect to the subject
-25-
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 15. 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 16. 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 17. 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 18. 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 of New York 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 of New
York.
(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 F.
-26-
Section 19. 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.
By: /s/ Xxxx Xxxxxxxxxxxx
-----------------------------------
Title: Vice President
THE BANK OF NEW YORK
By: /s/ Xxxx X. Xxxxx
-----------------------------------
Title: Assistant Vice President
EXHIBIT A
to Bank Agreement
1. (a) Investing Partnership: Xxxxxx Associates, a New Jersey limited
partnership
(b) Operating Partnership: Xxxxxxx Apts., Ltd., a Missouri limited
partnership
(c) Set Aside Purchase Note:
(i) Principal Amount: $62,500
(ii) Date of Issue: September 30, 1982
(iii) Original Maturity Date: December 31, 1996
(iv) Extended Maturity
Date: May 31, 2004
(v) Annual Payment of
Principal: NOT REQUIRED
(vi) Total Payments of Principal
deemed made as of
June 30, 1997: NOT APPLICABLE
(vii) Total Scheduled Principal
Payments Prior to
Maturity: NOT APPLICABLE
(viii) Balance of Principal
Due at Maturity: $62,500
(ix) Accrued and Unpaid Interest
as of December 31, 1996: 0
(d) Security Agreement: Purchase Agreement, dated September 30, 1982, by
and among Xxxx Xxxxxxx, Xxxxxxx X. Xxxxx, Woodlands Associates and
Realty Executive Associates ("Sellers") and Xxxxxx Associates, Center
Associates, Grand Associates, and Missouri Associates (Sellers'
respective rights and interests under the Security Agreement have
been transferred and assigned to Grand Court Lifestyles, Inc.).
(e) Purchased Partnership Interest: 24.25% limited partnership interest in
the Operating Partnership
-2-
2. (a) Investing Partnership: Center Associates, a New Jersey limited
partnership
(b) Operating Partnership: Xxxxxxx Apts., Ltd., a Missouri limited
partnership
(c) Set Aside Purchase Note:
(i) Principal Amount: $62,500
(ii) Date of Issue: September 30, 1982
(iii) Original Maturity Date: December 31, 1996
(iv) Extended Maturity
Date: May 31, 2004
(v) Annual Payment of
Principal: NOT REQUIRED
(vi) Total Payments of Principal
deemed made as of
June 30, 1997: NOT APPLICABLE
(vii) Total Scheduled Principal
Payments Prior to Maturity: NOT APPLICABLE
(viii) Balance of Principal
Due at Maturity: $62,500
(ix) Accrued and Unpaid Interest
as of December 31, 1996: 0
(d) Security Agreement: Purchase Agreement, dated September 30, 1982, by
and among Xxxx Xxxxxxx, Xxxxxxx X. Xxxxx, Woodlands Associates and
Realty Executive Associates ("Sellers" and Xxxxxx Associates, Center
Associates, Grand Associates, and Missouri Associates (Sellers'
respective rights and interests under the Security Agreement have
been transferred and assigned to Grand Court Lifestyles, Inc.).
(e) Purchased Partnership Interest: 24.25% limited partnership interest in
the Operating Partnership
-3-
3. (a) Investing Partnership: Grand Associates,, a New Jersey limited
partnership
(b) Operating Partnership: Xxxxxxx Apts., Ltd., a Missouri limited
partnership
(c) Set Aside Purchase Note:
(i) Principal Amount: $62,500
(ii) Date of Issue: September 30, 1982
(iii) Original Maturity Date: December 31, 1996
(iv) Extended Maturity
Date: May 31, 2004
(v) Annual Payment of Principal: NOT REQUIRED
(vi) Total Payments of Principal
deemed made as of
June 30, 1997: NOT APPLICABLE
(vii) Total Scheduled Principal
Payments Prior to Maturity: NOT APPLICABLE
(viii) Balance of Principal
Due at Maturity: $62,500
(ix) Accrued and Unpaid Interest
as of December 31, 1996: 0
(d) Security Agreement: Purchase Agreement, dated September 30, 1982, by
and among Xxxx Xxxxxxx, Xxxxxxx X. Xxxxx, Woodlands Associates and
Realty Executive Associates ( "Sellers" ) and Xxxxxx Associates,
Center Associates, Grand Associates and Missouri Associates (Sellers'
respective rights and interests under the Security Agreement have
been transferred and assigned to Grand Court Lifestyles, Inc.).
(e) Purchased Partnership Interest: 24.25% limited partnership interest in
the Operating Partnership
-4-
4. (a) Investing Partnership: Missouri Associates, a New Jersey limited
partnership
(b) Operating Partnership: Xxxxxxx Apts., Ltd., a Missouri limited
partnership
(c) Set Aside Purchase Note:
(i) Principal Amount: $62,500
(ii) Date of Issue: September 30, 1982
(iii) Original Maturity Date: December 31, 1996
(iv) Extended Maturity
Date: May 31, 2004
(v) Annual Payment of
Principal: NOT REQUIRED
(vi) Total Payments of Principal
deemed made as of
June 30, 1997: NOT APPLICABLE
(vii) Total Scheduled Principal
Payments Prior to Maturity: NOT APPLICABLE
(viii) Balance of Principal Due
at Maturity: $62,500
(ix) Accrued and Unpaid Interest
as of December 31, 1996: 0
(d) Security Agreement: Purchase Agreement, dated September 30,
1982, by and among Xxxx Xxxxxxx, Xxxxxxx X. Xxxxx, Woodlands
Associates and Realty Executive Associates ("Sellers") and
Xxxxxx Associates, Center Associates, Grand Associates and
Missouri Associates (Sellers' respective rights and
interests under the Security Agreement have been transferred
and assigned to Grand Court Lifestyles, Inc.).
(e) Purchased Partnership Interest: 24.25% limited partnership interest in
the Operating Partnership
-5-
5. (a) Investing Partnership: Brushcreek Associates, a New Jersey limited
partnership
(b) Operating Partnership: Sunny Slope Apartments, Ltd., a Missouri limited
partnership
(c) Set Aside Purchase Note:
(i) Principal Amount: $72,500
(ii) Date of Issue: July 30, 1982
(iii) Original Maturity Date: December 31, 1996
(iv) Extended Maturity
Date: May 31, 2004
(v) Annual Payment of
Principal: NOT REQUIRED
(vi) Total Payments of Principal
deemed made as of
June 30, 1997: NOT APPLICABLE
(vii) Total Scheduled Principal
Payments Prior to Maturity: NOT APPLICABLE
(viii) Balance of Principal
Due at Maturity: $72,500
(ix) Accrued and Unpaid Interest
as of December 31, 1996: 0
(d) Security Agreement: Purchase Agreement, dated July 30, 1982, by and
among Xxxx Xxxxxxx, Xxxxxxx X. Xxxxx, Woodlands Associates and Realty
Executive Associates ("Sellers") and Brushcreek Associates, Xxxxxxxxx
Associates, Xxxxx Place Associates and Xxxxx Associates (Sellers'
respective rights and interests under the Security Agreement have
been transferred and assigned to Grand Court Lifestyles, Inc.).
(e) Purchased Partnership Interest: 24.25% limited partnership interest in
the Operating Partnership
-6-
6. (a) Investing Partnership: Xxxxxxxxx Associates, a New Jersey limited
partnership
(b) Operating Partnership: Sunny Slope Apartments, Ltd., a Missouri
limited partnership
(c) Set Aside Purchase Note:
(i) Principal Amount: $72,500
(ii) Date of Issue: July 30, 1982
(iii) Original Maturity Date: December 31, 1996
(iv) Extended Maturity
Date: May 31, 2004
(v) Annual Payment of
Principal: NOT REQUIRED
(vi) Total Payments of Principal
deemed made as of
June 30, 1997: NOT APPLICABLE
(vii) Total Scheduled Principal
Payments Prior to Maturity: NOT APPLICABLE
(viii) Balance of Principal
Due at Maturity: $72,500
(ix) Accrued and Unpaid Interest
as of December 31, 1996: 0
(d) Security Agreement: Purchase Agreement, dated July 30, 1982, by and
among Xxxx Xxxxxxx, Xxxxxxx X. Xxxxx, Woodlands Associates and Realty
Executive Associates ("Sellers") and Brushcreek Associates, Xxxxxxxxx
Associates, Xxxxx Place Associates and Xxxxx Associates (Sellers'
respective rights and interests under the Security Agreement have
been transferred and assigned to Grand Court Lifestyles, Inc.).
(e) Purchased Partnership Interest: 24.25% limited partnership interest in
the Operating Partnership
-7-
7. (a) Investing Partnership: Xxxxx Place Associates, a New Jersey limited
partnership
(b) Operating Partnership: Sunny Slope Apartments, Ltd., a Missouri limited
partnership
(c) Set Aside Purchase Note:
(i) Principal Amount: $72,500
(ii) Date of Issue: July 30, 1982
(iii) Original Maturity Date: December 31, 1996
(iv) Extended Maturity
Date: May 31, 2004
(v) Annual Payment of
Principal: NOT REQUIRED
(vi) Total Payments of Principal
deemed made as of
June 30, 1997: NOT APPLICABLE
(vii) Total Scheduled Principal
Payments Prior to Maturity: NOT APPLICABLE
(viii) Balance of Principal
Due at Maturity: $72,500
(ix) Accrued and Unpaid Interest
as of December 31, 1996: 0
(d) Security Agreement: Purchase Agreement, dated July 30, 1982, by and
among Xxxx Xxxxxxx, Xxxxxxx X. Xxxxx, Woodlands Associates and Realty
Executive Associates ("Sellers") and Brushcreek Associates, Xxxxxxxxx
Associates, Xxxxx Place Associates and Xxxxx Associates (Sellers'
respective rights and interests under the Security Agreement have
been transferred and assigned to Grand Court Lifestyles, Inc.).
(e) Purchased Partnership Interest: 24.25% limited partnership interest in
the Operating Partnership
-8-
8. (a) Investing Partnership: Xxxxx Associates, a New Jersey limited
partnership
(b) Operating Partnership: Sunny Slope Apartments, Ltd., a Missouri limited
partnership
(c) Set Aside Purchase Note:
(i) Principal Amount: $72,500
(ii) Date of Issue: July 30, 1982
(iii) Original Maturity Date: December 31, 1996
(iv) Extended Maturity
Date: May 31, 2004
(v) Annual Payment of
Principal: NOT REQUIRED
(vi) Total Payments of Principal
deemed made as of
June 30, 1997: NOT APPLICABLE
(vii) Total Scheduled Principal
Payments Prior to Maturity: NOT APPLICABLE
(viii) Balance of Principal
Due at Maturity: $72,500
(ix) Accrued and Unpaid Interest
as of December 31, 1996: 0
(b) Security Agreement: Purchase Agreement, dated July 30, 1982, by and
among Xxxx Xxxxxxx, Xxxxxxx X. Xxxxx, Woodlands Associates and Realty
Executive Associates ("Sellers") and Brushcreek Associates, Xxxxxxxxx
Associates, Xxxxx Place Associates and Xxxxx Associates (Sellers'
respective rights and interests under the Security Agreement have
been transferred and assigned to Grand Court Lifestyles, Inc.).
(c) Purchased Partnership Interest: 24.25% limited partnership interest in
the Operating Partnership
-9-
9. (a) Investing Partnership: Kansas Associates, a New Jersey limited
partnership
(b) Operating Partnership: Jewel Crest, Ltd., a Kansas limited partnership
(c) Set Aside Purchase Note:
(i) Principal Amount: $100,000
(ii) Date of Issue: November 3, 1982
(iii) Original Maturity Date: December 31, 1996
(iv) Extended Maturity
Date: May 31, 2004
(v) Annual Payment of
Principal: NOT REQUIRED
(vi) Total Payments of Principal
deemed made as of
June 30, 1997: NOT APPLICABLE
(vii) Total Scheduled Principal
Payments Prior to Maturity: NOT APPLICABLE
(viii) Balance of Principal
Due at Maturity: $100,000
(ix) Accrued and Unpaid Interest
as of December 31, 1996: 0
(d) Security Agreement: Purchase Agreement, dated November 3, 1982, by and
among Xxxx Xxxxxxx, Xxxxxxx X. Xxxxx, Woodlands Associates and Realty
Executive Associates ("Sellers") and Kansas Associates, Wyandotte
Associates, Worth Associates and Cipal Associates (Sellers'
respective rights and interests under the Security Agreement have
been transferred and assigned to Grand Court Lifestyles, Inc.).
(e) Purchased Partnership Interest: 24.25% limited partnership interest in
the Operating Partnership
-10-
10. (a) Investing Partnership: Wyandotte Associates, a New Jersey limited
partnership
(b) Operating Partnership: Jewel Crest, Ltd., a Kansas limited partnership
(c) Set Aside Purchase Note:
(i) Principal Amount: $100,000
(ii) Date of Issue: November 3, 1982
(iii) Original Maturity Date: December 31, 1996
(iv) Extended Maturity
Date: May 31, 2004
(v) Annual Payment of
Principal: NOT REQUIRED
(vi) Total Payments of Principal
deemed made as of
June 30, 1997: NOT APPLICABLE
(vii) Total Scheduled Principal
Payments Prior to Maturity: NOT APPLICABLE
(viii) Balance of Principal
Due at Maturity: $100,000
(ix) Accrued and Unpaid Interest
as of December 31, 1996: 0
(d) Security Agreement: Purchase Agreement, dated November 3, 1982, by and
among Xxxx Xxxxxxx, Xxxxxxx X. Xxxxx, Woodlands Associates and Realty
Executive Associates ("Sellers") and Kansas Associates, Wyandotte
Associates, Worth Associates and Cipal Associates (Sellers'
respective rights and interests under the Security Agreement have
been transferred and assigned to Grand Court Lifestyles, Inc.).
(e) Purchased Partnership Interest: 24.25% limited partnership interest in
the Operating Partnership
-11-
11. (a) Investing Partnership: Worth Associates, a New Jersey limited
partnership
(b) Operating Partnership: Jewel Crest, Ltd., a Kansas limited partnership
(c) Set Aside Purchase Note:
(i) Principal Amount: $100,000
(ii) Date of Issue: November 3, 1982
(iii) Original Maturity Date: December 31, 1996
(iv) Extended Maturity
Date: May 31, 2004
(v) Annual Payment of
Principal: NOT REQUIRED
(vi) Total Payments of Principal
deemed made as of
June 30, 1997: NOT APPLICABLE
(vii) Total Scheduled Principal
Payments Prior to Maturity: NOT APPLICABLE
(viii) Balance of Principal
Due at Maturity: $100,000
(ix) Accrued and Unpaid Interest
as of December 31, 1996: 0
(d) Security Agreement: Purchase Agreement, dated November 3, 1982, by and
among Xxxx Xxxxxxx, Xxxxxxx X. Xxxxx, Woodlands Associates and Realty
Executive Associates ("Sellers") and Kansas Associates, Wyandotte
Associates, Worth Associates and Cipal Associates (Sellers'
respective rights and interests under the Security Agreement have
been transferred and assigned to Grand Court Lifestyles, Inc.).
(e) Purchased Partnership Interest: 24.25% limited partnership interest in
the Operating Partnership
-12-
12. (a) Investing Partnership: Cipal Associates, a New Jersey limited
partnership
(b) Operating Partnership: Jewel Crest, Ltd., a Kansas limited partnership
(c) Set Aside Purchase Note:
(i) Principal Amount: $100,000
(ii) Date of Issue: November 3, 1982
(iii) Original Maturity Date: December 31, 1996
(iv) Extended Maturity
Date: May 31, 2004
(v) Annual Payment of
Principal: NOT REQUIRED
(vi) Total Payments of Principal
deemed made as of
June 30, 1997: NOT APPLICABLE
(vii) Total Scheduled Principal
Payments Prior to Maturity: NOT APPLICABLE
(viii) Balance of Principal
Due at Maturity: $100,000
(ix) Accrued and Unpaid Interest
as of December 31, 1996: 0
(d) Security Agreement: Purchase Agreement, dated November 3, 1982, by and
among Xxxx Xxxxxxx, Xxxxxxx X. Xxxxx, Woodlands Associates and Realty
Executive Associates ("Sellers") and Kansas Associates, Wyandotte
Associates, Worth Associates and Cipal Associates (Sellers'
respective rights and interests under the Security Agreement have
been transferred and assigned to Grand Court Lifestyles, Inc.).
(e) Purchased Partnership Interest: 24.25% limited partnership interest in
the Operating Partnership
-13-
13. (a) Investing Partnership: Millville Associates-I, a New Jersey limited
partnership
(b) Operating Partnership: BOS Associates, a New Jersey limited
partnership
(c) Set Aside Purchase Note:
(i) Principal Amount: $495,000
(ii) Date of Issue: May 12, 1982
(iii) Original Maturity Date: December 31, 1996
(iv) Extended Maturity
Date: May 31, 2004
(v) Annual Payment of
Principal: NOT REQUIRED
(vi) Total Payments of Principal
deemed made as of
June 30, 1997: $95,000
(vii) Total Scheduled Principal
Payments Prior to Maturity: $95,000
(viii) Balance of Principal
Due at Maturity: $400,000
(ix) Accrued and Unpaid Interest
as of December 31, 1996: $285,171
(d) Security Agreement: Purchase Agreement, dated May 12, 1982, by and
among Xxxx Xxxxxxx, Xxxxxxx X. Xxxxx, Xxxxxx Xxxxxxx, Xxxxxx Xxxxxxx
and Xxxxxxx X. Xxxxxx ("Sellers"), and BOS Associates (Sellers'
respective rights and interests under the Security Agreement have
been transferred and assigned to Grand Court Lifestyles, Inc.).
(e) Purchased Partnership Interest: 24.75% limited partnership interest in
the Operating Partnership
-14-
14. (a) Investing Partnership: Millville Associates-II, a New Jersey limited
partnership
(b) Operating Partnership: BOS Associates, a New Jersey limited partnership
(c) Set Aside Purchase Note:
(i) Principal Amount: $495,000
(ii) Date of Issue: May 12, 1982
(iii) Original Maturity Date: December 31, 1996
(iv) Extended Maturity
Date: May 31, 2004
(v) Annual Payment of
Principal: NOT REQUIRED
(vi) Total Payments of Principal
deemed made as of
June 30, 1997: $95,000
(vii) Total Scheduled Principal
Payments Prior to Maturity $95,000
(viii) Balance of Principal
Due at Maturity: $400,000
(ix) Accrued and Unpaid Interest
as of December 31, 1996: $285,171
(d) Security Agreement: Purchase Agreement, dated May 12, 1982, by and
among Xxxx Xxxxxxx, Xxxxxxx X. Xxxxx, Xxxxxx Xxxxxxx, Xxxxxx Xxxxxxx
and Xxxxxxx X. Xxxxxx ("Sellers"), and BOS Associates (Sellers'
respective rights and interests under the Security Agreement have
been transferred and assigned to Grand Court Lifestyles, Inc.).
(e) Purchased Partnership Interest: 24.75% limited partnership interest in
the Operating Partnership
-15-
15. (a) Investing Partnership: Millville Associates-III, a New Jersey limited
partnership
(b) Operating Partnership BOS Associates, a New Jersey limited partnership
(c) Set Aside Purchase Note:
(i) Principal Amount: $495,000
(ii) Date of Issue: May 12, 1982
(iii) Original Maturity Date: December 31, 1996
(iv) Extended Maturity
Date: May 31, 2004
(v) Annual Payment of
Principal: NOT REQUIRED
(vi) Total Payments of Principal
deemed made as of
June 30, 1997: $95,000
(vii) Total Scheduled Principal
Payments Prior to Maturity: $95,000
(viii) Balance of Principal
Due at Maturity: $400,000
(ix) Accrued and Unpaid Interest
as of December 31, 1996: $285,171
(d) Security Agreement: Purchase Agreement, dated May 12, 1982, by and
among Xxxx Xxxxxxx, Xxxxxxx X. Xxxxx, Xxxxxx Xxxxxxx, Xxxxxx Xxxxxxx
and Xxxxxxx X. Xxxxxx ("Sellers"), and BOS Associates (Sellers'
respective rights and interests under the Security Agreement have
been transferred and assigned to Grand Court Lifestyles, Inc.).
(e) Purchased Partnership Interest: 24.75% limited partnership interest in
the Operating Partnership
-16-
16. (a) Investing Partnership: Millville Associates-IV, a New Jersey limited
partnership
(b) Operating Partnership: BOS Associates, a New Jersey limited partnership
(c) Set Aside Purchase Note:
(i) Principal Amount: $495,000
(ii) Date of Issue: May 12, 1982
(iii) Original Maturity Date: December 31, 1996
(iv) Extended Maturity
Date: May 31, 2004
(v) Annual Payment of
Principal: NOT REQUIRED
(vi) Total Payments of Principal
deemed made as of
June 30, 1997: $95,000
(vii) Total Scheduled Principal
Payments Prior to Maturity: $95,000
(viii) Balance of Principal
Due at Maturity: $400,000
(ix) Accrued and Unpaid Interest
as of December 31, 1996: $285,171
(d) Security Agreement: Purchase Agreement, dated May 12, 1982, by and
among Xxxx Xxxxxxx, Xxxxxxx X. Xxxxx, Xxxxxx Xxxxxxx, Xxxxxx Xxxxxxx
and Xxxxxxx X. Xxxxxx ("Sellers"), and BOS Associates (Sellers'
respective rights and interests under the Security Agreement have
been transferred and assigned to Grand Court Lifestyles, Inc.).
(e) Purchased Partnership Interest: 24.75% limited partnership interest in
the Operating Partnership
-17-
17. (a) Investing Partnership: Vine Hill Associates, a New Jersey limited
partnership
(b) Operating Partnership: Walnut Associates, a New Jersey limited
partnership
(c) Set Aside Purchase Note:
(i) Principal Amount: $1,920,000
(ii) Date of Issue: December 29, 1982
(iii) Original Maturity Date: December 31, 1996
(iv) Extended Maturity
Date: May 31, 2004
(v) Annual Payment of
Principal: $20,000
(vi) Total Payments of Principal
deemed made as of
June 30, 1997: $48,000
(vii) Total Scheduled Principal
Payments Prior to Maturity: $260,000
(viii) Balance of Principal
Due at Maturity: $1,660,000
(ix) Accrued and Unpaid Interest
as of December 31, 1996: $2,448,566
(d) Security Agreement: Purchase Agreement, dated December 29, 1982, by and
among Xxxx Xxxxxxx, Xxxxxxx X. Xxxxx, Xxxxxx Xxxxxxx, Xxxxx Xxxx,
Xxxxxxx Xxxxx, Xxxxxx Xxxxxxxxx, Xxxxxx Xxxxxxx and Xxxxxx Xxxxxx
("Sellers") and Walnut Associates (Sellers respective rights and
interests under the Security Agreement have been transferred and
assigned to Grand Court Lifestyles, Inc.).
(e) Purchased Partnership Interest: 99% limited partnership interest in the
Operating Partnership
-18-
18. (a) Investing Partnership: Delaware River Associates, a New Jersey limited
partnership
(b) Operating Partnership: Bethlehem Associates, a New Jersey limited
partnership
(c) Set Aside Purchase Note:
(i) Principal Amount: $2,200,000
(ii) Date of Issue: October 25, 1982
(iii) Original Maturity Date: December 31, 1996
(iv) Extended Maturity
Date: May 31, 2004
(v) Annual Payment of
Principal: NOT REQUIRED
(vi) Total Payments of Principal
deemed made as of
June 30, 1997: $420,000
(vii) Total Scheduled Principal
Payments Prior to Maturity: $420,000
(viii) Balance of Principal
Due at Maturity: $1,780,000
(ix) Accrued and Unpaid Interest
as of December 31, 1996: $1,292,267
(d) Security Agreement: Purchase Agreement, dated October 25, 1982, by and
among Xxxx xxxxxxx, Xxxxxxx X. Xxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx Xxxx,
Xxxx Xxxxxx, Xxxxx Xxxxxxxx, Xxxxxxx Xxxxxx and Xxxxxx Xxxxxx
("Sellers") and Delaware Associates (Sellers' respective rights and
interests under the Security Agreement have been transferred and
assigned to Grand Court Lifestyles, Inc.).
(e) Purchased Partnership Interest: 99% limited partnership interest in the
Operating Partnership
-19-
19. (a) Investing Partnership Woodlands Associates, a New Jersey limited
partnership
(b) Operating Partnership: Xxxx Xxxxx Apts., Ltd., a Texas limited
partnership
(c) Set Aside Purchase Note:
(i) Principal Amount: $2,785,000
(ii) Date of Issue: December 21, 1982
(iii) Original Maturity Date: December 31, 1996
(iv) Extended Maturity
Date: May 31, 2004
(v) Annual Payment of
Principal: NOT REQUIRED
(vi) Total Payments of Principal
deemed made as of
June 30, 1997: NOT APPLICABLE
(vii) Total Scheduled Principal
Payments Prior to Maturity: NOT APPLICABLE
(viii) Balance of Principal
Due at Maturity: $2,785,000
(ix) Accrued and Unpaid Interest
as of December 31, 1996: $2,849,207
(d) Security Agreement: Purchase Agreement, dated December 21, 1982, by and
among Xxxx Xxxxxxx, Xxxxxxx X. Xxxxx, Xxxx Xxxxxxx III, J&B
Management Corp., Xxxxxxx X. Xxxxxxx, Xxxxxx Realty Company, Xxxxxx
X. Xxxxxx, Xxxxx Xxxxxx, Xxxxxxx X. Xxxxxx and Tangelo Associates
("Sellers") and Woodlands Associates (Sellers' respective rights and
interests under the Security Agreement have been transferred and
assigned to Grand Court Lifestyles, Inc.).
(e) Purchased Partnership Interest: 99% limited partnership interest in the
Operating Partnership
-20-
20. (a) Investing Partnership: Xxxxxx Barre Associates, a New Jersey limited
partnership
(b) Operating Partnership: Hanover Associates, Ltd., a New York limited
partnership
(c) Set Aside Purchase Note:
(i) Principal Amount: $2,850,000
(ii) Date of Issue: December 29, 1982
(iii) Original Maturity Date: December 31, 1996
(iv) Extended Maturity
Date: May 31, 2004
(v) Annual Payment of
Principal: NOT REQUIRED
(vi) Total Payments of Principal
deemed made as of
June 30, 1997: $550,000
(vii) Total Scheduled Principal
Payments Prior to Maturity: $550,000
(viii) Balance of Principal
Due at Maturity: $2,300,000
(ix) Accrued and Unpaid Interest
as of December 31, 1996: $1,660,241
(d) Security Agreement: Purchase Agreement, dated October 29, 1982, by and
among Xxxx Xxxxxxx, Xxxxxxx X. Xxxxx, Xxxx Xxxxxxxxx, Xxxxxx Xxxxxxx,
Xxxxxx Xxxxxxxxxx, Xxxxxx Xxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx Xxxxxxxx,
Xxxxxxxx Xxxxxxxx, Xxxxxxx August, Xxxxx Xxxxxxx and Xxxx Xxxxxxxx
("Sellers") and Hanover Associates (Sellers' respective rights and
interests under the Security Agreement have been transferred and
assigned to Grand Court Lifestyles, Inc.).
(e) Purchased Partnership Interest: 99% limited partnership interest in the
Operating Partnership
EXHIBIT B
TO BANK AGREEMENT
[Form of Consent and Agreement]
CONSENT AND AGREEMENT
[pursuant to Section 7.2(c)]
THIS CONSENT AND AGREEMENT, dated as of ______________, 19__,
is by and between [name of Investing Partnership] (the "Investing Partnership"),
Grand Court Lifestyles, Inc. (the "Company"), and The Bank of New York (the
"Bank").
W I T N E S S E T H:
WHEREAS, the Company and the Bank have entered into that
certain Bank Agreement of even date herewith (the "Bank Agreement"); and
WHEREAS, Section 7.2(c) of the Bank Agreement provides for
the execution of this Consent and Agreement by the parties hereto;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained and other good and valuable consideration,
receipt of which is hereby acknowledged, the parties hereto hereby convent and
agree as follows:
Section 1. Consents. The Investing Partnership hereby
consents to (i) the Company's assignment to the Bank, pursuant to Section
7.2(c) of the Bank Agreement, of the Investing Partnership's Set Aside
Purchase Note; and (ii) The Company's delivery of the Investing Partnership's
Set Aside Purchase Note to the Bank. The Bank hereby acknowledges that
interest may be deferred until the maturity of that Set Aside Purchase Note.
Section 2. Agreements. The Investing Partnership hereby
agrees that upon receiving the Bank's notice of an Event of Default, the
Investing Partnership shall pay all sums due under its Set Aside Purchase Note
directly to the Bank.
Section 3. Notices. All notices and other communications
pursuant or relating to this Consent and Agreement shall be in writing and
shall be delivered by hand or sent by registered or certified mail, return
receipt requested, or by facsimile, confirmed by writing delivered by hand or
sent by registered or certified mail, return receipt requested, delivered or
sent on the date of the facsimile, addressed as follows:
-2-
(a) If to the Investing Partnership:
_______________________________
_______________________________
_______________________________
(b) If to the Company:
Grand Court Lifestyles, Inc.
Xxx Xxxxxxxxx Xxxxx
Xxxx Xxx, Xxx Xxxxxx 00000
Facsimile Number: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx
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.
If to Bank:
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile Number: (000) 000-0000
Attention: Xxxx Xxxxx,
Trustee Administration
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 4. Choice of Law. This Consent and 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 5. Successors. This Consent and Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
-3-
Section 6. Counterparts. This Consent and 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 7. Definitions. All terms used in this Consent and
Agreement and not otherwise defined herein shall have the meanings ascribed to
them in the Bank Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Consent and Agreement as of the date first above written.
[Name of Investing Partnership]
By:
-------------------------------------
GRAND COURT LIFESTYLES, INC.
By:
-------------------------------------
Title:
THE BANK OF NEW YORK
By:
-------------------------------------
Title:
EXHIBIT C
TO BANK AGREEMENT
[Form of Consent, Assignment and Agreement]
CONSENT, ASSIGNMENT AND AGREEMENT
[pursuant to Section 7.3(c)
THIS CONSENT, ASSIGNMENT AND AGREEMENT, dated as of
___________, 19__, is by and among [name of Investing Partnership] (the
"Investing Partnership") [name of Operating Partnership] (the "Operating
Partnership"), Grand Court Lifestyles, Inc. ("The Company"), and The Bank of
New York (the "Bank")
W I T N E S S E T H:
WHEREAS, the Company and the Bank have entered into that
certain Bank Agreement of even date herewith (the "Bank Agreement"); and
WHEREAS, Section 7.3(c) of the Bank Agreement provides for
the execution of this Consent, Assignment and Agreement by the parties hereto;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained and other good and valuable consideration,
receipt of which is hereby acknowledged, the parties hereto hereby consent and
agree as follows:
Section 1. Consents, Assignments and Agreements with Respect
to Purchased Partnership Interests. The Investing Partnership and the
Operating Partnership in which the Investing Partnership owns a Purchased
Partnership interest hereby (i) consent to the Company's assignment to the
Bank of the Purchase Agreement, security interest in the Purchased Partnership
Interest, Purchased Partnership Interest, all allocations and distributions
which may be due and payable or made from time to time on such Purchased
Partnership Interest, and the proceeds thereof, relating to the Investing
Partnership's Set Aside Purchase Note; (ii) consent to the Company's delivery
to the Bank of Financing Statements and to the Bank's filing of such Financing
Statements with the appropriate governmental authorities in order to perfect
and to continue the perfection of the Bank's security interest in the Purchase
Agreement, security interest in the Purchased Partnership Interest, Purchased
Partnership Interest allocations and distributions which may be due and
payable from time to time on the Purchased Partnership Interest; (iii) subject
to the terms and conditions of the Bank Agreement, assign to the Bank all
allocations and distributions which shall be due and payable or made from time
to time on the Purchased Partnership Interest, and the proceeds thereof, until
all outstanding obligations under the Set Aside Purchase Note, if such be in
default, have been paid in full (including, without limitation, all costs of
collection, reasonable attorneys' fees and other fees and expenses); and (iv)
subject to the terms and conditions of the Bank Agreement, agree that upon
foreclosure of the security interest in the Purchased Partnership Interest all
allocations and distributions made on the Purchased Partnership Interest shall
by paid directly to the Bank, as the assignee of the
-2-
Company, regardless of whether the Bank becomes a substituted limited partner
in the Operating Partnership in place of the Investing Partnership.
Section 2. Representations of the Operating Partnership. The
Operating Partnership hereby agrees to keep a copy of this Consent, Assignment
and Agreement with its business records.
Section 3. Agreement of the Operating Partnership. The
Operating Partnership hereby agrees to admit the Bank as a substituted limited
partner in place of the Investing Partnership in the Operating Partnership
upon the Bank's foreclosure on the security interest in the Purchased
Partnership Interest and written request, subject to the limitations in
Section 1(iii) hereof, the Bank's obtaining HUD 2530 Clearance and the rights
of the Investing Partnership under Section 9.505 of the Uniform Commercial
Code.
Section 4. Amendment to Operating Partnership Agreement.
Upon substitution of the Bank for the Investing Partnership as a limited
partner in the Operating Partnership pursuant to the Bank Agreement and this
Consent, Assignment and Agreement, this Consent, Assignment and Agreement
shall constitute an amendment to the partnership agreement of the Operating
Partnership, and the Bank shall not be liable for the obligations of any
predecessor which has assigned the Purchased Partnership Interest to make any
contributions to the Operating Partnership.
Section 5. Further Assurances and Power of Attorney. Each of
the parties hereto shall, from time to time, upon request of a party hereto,
duly execute, acknowledge and deliver or cause to be duly executed,
acknowledged and delivered, all such further instruments and documents
reasonably requested by a party to effectuate the intent and purposes of this
Consent, Assignment and Agreement. Notwithstanding the foregoing, this
Consent, Assignment and Agreement shall constitute an irrevocable power of
attorney coupled with an interest for the Bank to execute and file a
certificate of amendment to the certificate of limited partnership of the
Operating Partnership or any other document or instrument in order to
effectuate the intent and purposes of this Consent, Assignment and Agreement;
provided, however, that the Bank may not be substituted as a partner of the
Operating Partnership unless such substitution is permitted under the Uniform
Commercial Code and HUD 2530 Clearance, if required, has been obtained.
Section 6. Notices. All notices and other communications
pursuant or relating to this Consent, Assignment and Agreement shall be in
writing and shall be delivered by hand or sent by registered or certified
mail, return receipt requested, or by facsimile, confirmed by writing
delivered by hand or sent by registered or certified mail, return receipt
requested, delivered or sent on the date of the facsimile, addressed as
follows:
-3-
(a) If to the Investing Partnership:
--------------------------------
--------------------------------
--------------------------------
(b) If to the Operating Partnership:
--------------------------------
--------------------------------
--------------------------------
(c) If to The Company:
Grand Court Lifestyles, Inc.
Xxx Xxxxxxxxx Xxxxx
Xxxx Xxx, Xxx Xxxxxx 00000
Facsimile Number: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx
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.
If to Bank:
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile Number: (000) 000-0000
Attention: Xxxx Xxxxx,
Trustee Administration
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.
-4-
Section 7. Choice of Law. This Consent, Assignment and
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 8. Successors. This Consent, Assignment and
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
Section 9. Counterparts. This Consent, Assignment and
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 10. Definitions. All terms used in this Consent,
Assignment and Agreement and not otherwise defined herein shall have the
meanings ascribed to them in the Bank Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Consent, Assignment and Agreement as of the date first above written.
[Name of Investing Partnership]
By:___________________________
[Name Of Operating Partnership]
By:__________________________
GRAND COURT LIFESTYLES, INC.
By:__________________________
Title:
THE BANK OF NEW YORK
By:__________________________
Title:
EXHIBIT D
TO BANK AGREEMENT
[FORM OF NOTICE]
Notice of Voluntary Redemption
of
Grand Court Lifestyles, Inc.
12% Debentures -- Series 11
To holders of Grand Court Lifestyles, Inc. (the "Company")
12% Debentures due June 30, 2004 -- Series 11 (the "Debentures"):
Notice is hereby given by The Bank of New York (the "Bank"),
as paying agent for the Debentures, that, pursuant to the voluntary redemption
provision of Section 5.6 of the Bank Agreement between the Company and the
Bank, dated [month] [day], [year], the Company has elected to redeem and pay
off on [month] [day], [year] (the "Redemption Date") [all] [a portion of] the
above mentioned Debentures then outstanding, in accordance with the terms of
the Debentures, and that [all] [a portion of] the Debentures are called for
redemption on the Redemption Date.
The redemption price on the Redemption Date shall be
$_______. Interest on the Debentures so redeemed shall cease from and after
the Redemption Date.
Dated: [month] [day], [year]
The Bank of New York
[FORM OF NOTICE]
Notice of Mandatory Redemption
of
Grand Court Lifestyles, Inc.
12% Debentures -- Series 11
To holders of Grand Court Lifestyles, Inc. (the "Company")
12% Debentures due June 30, 2004 -- Series 11 (the "Debentures"):
Notice is hereby given by The Bank of New York (the "Bank"),
as paying agent for the Debentures, that, pursuant to the mandatory redemption
provision of Section 5.7 of the Bank Agreement between the Company and the
Bank, dated [month] [day], [year], the Company will redeem and pay off on June
30, 2004 (the "Redemption Date") 100% of the above mentioned Debentures, in
accordance with the terms of the Debentures, and that 100% of the Debentures
are called for redemption on the Redemption Date.
Interest on the Debentures so redeemed shall cease from and
after the Redemption Date.
Dated: [month] [day], [year]
The Bank of New York
EXHIBIT E
TO BANK AGREEMENT
[FORM OF NOTICE]
Notice of Event of Default
by
Grand Court Lifestyles, Inc.
on payment of principal on
12% Debentures -- Series 11
To ________________ Associates (the "Partnership"):
Notice is hereby given that when payment of principal came
due and payable on Grand Court Lifestyles, Inc. (the "Company") 12% Debentures
due June 30, 2004 -- Series 11 (the "Debentures") the Company defaulted in the
payment of such principal and such default has continued for more than thirty
(30) days (the "Default"). The Default qualifies as an Event of Default under
the Bank Agreement between the Company and The Bank of New York (the "Bank"),
dated [month] [day], [year] (the "Bank Agreement"). Pursuant to Section 2 of
the Consent and Agreement between the Partnership, the Company and the Bank,
dated the same date as the Bank Agreement, an Event of Default requires the
Partnership to make all payments of principal and interest on its purchase
note, executed in connection with its acquisition of its interest in
[operating partnership] and pledged to the Bank by the Company as collateral
for the Debentures, directly to the Bank.
Dated: [month] [day], [year]
The Bank of New York
EXHIBIT F
TO BANK AGREEMENT
GRAND COURT LIFESTYLES, INC.
DEBENTURES SERIES XI SUMMARY
OFFERING $8,000,000 12% DEBENTURES DUE JUNE 30, 2004
COLLATERALIZATION
Purchase Notes in the principal amount of up to $11,066,000 will be
set aside as collateral. The Company shall deliver to the Bank of New York as
collateral Purchase Notes in such an amount that the sum of 80% of the
principal amount of such Purchase Notes equals or exceeds the principal amount
of the Debentures sold and outstanding.
INVESTMENT OBJECTIVE
12% 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, 2004
The Debentures may be redeemed by the Company, in whole or in part,
in its sole discretion, without penalty or premium at any time prior to
maturity.
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 Debentures and it is custodian of the Purchase
Notes and documents governing the Partnership interests which secure the
Purchase Notes. The Bank of New York does not guarantee or otherwise provide
credit support for the Debentures.
TAX IMPLICATIONS
All income is considered portfolio income; can be used for employee
benefit plans, IRAs and Keoghs.
GRAND COURT LIFESTYLES, INC.
DEBENTURE SERIES XI SUMMARY
================================================================================
GRAND COURT LIFESTYLES, INC.
27 Continuous Years of Successful Operation
Developed Partnerships Which Own and 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 DEBENTURES, INCLUDING BUT NOT LIMITED TO, A
DEFAULT ON THE PURCHASE NOTES BY THE MAKERS THEREOF THAT SERVE AS COLLATERAL
FOR THE DEBENTURES, AND MARKET CONDITIONS WHICH MAY REDUCE THE COMPANY'S CASH
FLOW, THEREBY ADVERSELY AFFECTING THE COMPANY'S ABILITY TO MAKE INTEREST AND
PRINCIPAL PAYMENTS.
RISKS AFFECTING AN INVESTMENT IN THE DEBENTURES 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
