Exhibit 10.11(b)
BANK AGREEMENT
THIS BANK AGREEMENT, dated as of October 22, 1996 (as
amended, modified or supplemented from time to time, the "Bank
Agreement"), is by and among Grand Court Lifestyles, Inc., a
Delaware corporation (the "Company") and The Bank of New York
(the "Bank").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company is issuing its Notes Retirement
Financing Notes-IV due March 31, 2002 (the "Notes") pursuant to
the Company's Confidential Private Placement Memorandum, as the
same may be from time to time amended (the "Memorandum"); and
WHEREAS, the Company's private placement of the Notes
(the "Offering") will terminate on the earlier of (i) the date on
which all the Notes are sold or (ii) March 31, 1998 (the
"Offering Termination Date"); and
WHEREAS, subscribers will purchase Notes at a closing
(the "Initial Closing") to be held at such time as the Company
may determine in its discretion and, thereafter, from time to
time (each, singly, an "Additional Closing," and, collectively,
the "Additional Closings"), at the discretion of the Company, on
such day or days as may be determined by the Company, as
subscriptions are received and accepted (hereinafter the date of
the Initial Closing and the date of any Additional Closing are
each referred to as a "Closing Date"); and
WHEREAS, the Company desires to deliver to the Bank
amounts received by the Company from subscribers for Notes (each,
singly, a "Purchaser," and, collectively, the "Purchasers"), in
payment for the Notes, which amounts shall be released to the
Company at the Initial Closing and at each Additional Closing;
and
WHEREAS, each Purchaser shall be entitled to receive,
on a monthly basis prior to the Closing Date with respect to that
Purchaser's Notes, distributions representing interest accrued on
that Purchaser's subscription payment at a rate of 13.125% per
annum; and
WHEREAS, the Company desires to establish an interest
bearing escrow fund to be called the Retirement Financing
Notes-IV Escrow Fund Account (the "Fund") with the Bank; and
WHEREAS, each Purchaser shall be entitled to receive,
on a monthly basis after the Closing Date with respect to that
Purchaser's Notes, interest on his Note at the rate of 13.125%
per annum; and
WHEREAS, the Company wishes to appoint the Bank as
Escrow Agent, Authenticating Agent, Paying Agent, Registrar and
Transfer Agent with respect to the Notes and the Bank is willing
to accept such appointments upon the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing
premises and the mutual covenants herein contained and other good
and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto hereby agree as follows:
Section 1. Escrow Agent.
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Section 1.1 Appointment.
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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.
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The Company shall from time to time deliver amounts
received from Purchasers in payment for the Notes ("Subscription
Payments") to the Bank. The Bank shall deposit the Subscription
Payments in the Fund to be established in the Company's name for
this purpose by the Bank. Subscription Payments delivered for
deposit in the Fund shall be invested in short term certificates
of deposit (including certificates of deposit issued by the
Bank), A-1 commercial paper, P-1 commercial paper, interest
bearing money market accounts, all as specified in writing by the
Company and held in trust for the benefit of Purchasers. In the
event the Company should fail to so specify, Subscription
Payments delivered for deposit in the Fund shall be invested in
the Bank's Deposit Reserve, an interest-bearing account, for the
benefit of the Purchasers. The Bank is not responsible for
interest, losses, taxes or other charges on investments. All
checks delivered to the Bank for deposit in the Fund shall be
payable to the order of "Retirement Financing Notes-IV - Escrow
Account." Concurrently with such delivery, the Company shall
deliver to the Bank a statement of the name, mailing address and
tax identification number of each Purchaser whose Subscription
Payment is being delivered, and a schedule listing the aggregate
Notes and aggregate cumulative Subscription Payments to date
delivered for deposit in the Fund. The Bank shall deposit the
Subscription Payments to reflect multiple beneficiaries in
accordance with 12 CFR 330.4, 330.10. For the purposes of this
Bank Agreement, the Company is authorized to make deposits and
give instructions as to investments of deposits and otherwise, as
contemplated in this Bank Agreement, to the Bank.
Section 1.3 Interest.
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During the period (the "Escrow Period") commencing upon
the date that any Purchaser's Subscription Payment constitutes
Cleared Funds (as defined in Section 1.11 hereof) and ending on
the day immediately preceding the Closing Date with respect to
that Purchaser's Notes, interest will accrue on that Purchaser's
Subscription Payment at a rate of 13.125% per annum, computed on
the basis of a year of 360 days consisting of 12 thirty day
months. Interest shall be payable on the fifteenth day of each
month if such day is a Business Day. If such day is not a
Business Day, then the next Business Day shall be deemed the
Interest Payment Date (each, an "Interest Payment Date"). Four
Business Days prior to each such Interest Payment Date, the Bank
shall give the Company written notice of the difference between
the amount of interest which will be payable on Subscription
Payments on such Interest Payment Date and the amount of interest
accruing on the Fund which will be available for such payment on
such Interest Payment Date. Not later than 11:30 a.m. (New York
time) on such Interest Payment Date, the Company shall deposit
with the Bank the amount of such difference. On each Interest
Payment Date, the Bank shall pay interest which is due and
payable to the respective Purchasers by mailing its check in the
appropriate amount to each Purchaser by first class mail to the
Purchaser's mailing address provided to the Bank pursuant to
Section 1.2 hereof. In the event that the Company shall default
in its payment obligations to the Bank under this Section 1.3,
the Bank shall mail its check in the amount of each Purchaser's
pro rata share of interest earned and paid on the Fund's assets
as provided in this Section 1.3. For purposes of this Bank
Agreement, "Business Day" shall mean any day other than a day on
which the Bank is authorized to remain closed in New York City.
Section 1.4 The Initial Closing and
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Additional Closings.
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Upon the scheduling of the Initial Closing and each
Additional Closing, the Company shall give written notice thereof
to the Bank not less than one (1) Business Day prior to the date
scheduled for each such closing.
Section 1.5 Cancellation.
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The Company shall give the Bank notice of any Purchaser
who cancels his Subscription prior to his Closing Date or whose
Subscription Payment was deposited pursuant to Section 1.2 but
whose Subscription is rejected, setting forth the name and
mailing address of the Purchaser and the amount of the rejected
or cancelled subscription. As promptly as practicable
thereafter, the Bank shall pay the amount of the cancelled or
rejected subscription from the Fund to the Purchaser whose
Subscription was cancelled or rejected as directed by the
Company. Any interest earned thereon and not theretofore
distributed pursuant to Section 1.3 hereof shall be paid to the
Purchaser in accordance with Section 1.3 hereof. Payment shall
be made by check payable to the Purchaser mailed by the Bank by
first class mail directly to the Purchaser at the mailing address
of the Purchaser.
Section 1.6 Payment.
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(a) The Bank, at the Initial Closing and each
Additional Closing, upon written instruction from either ▇▇. ▇▇▇▇
▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, as the designated officers of
the Company, shall transfer to the Company or to such third party
or parties as may be directed by ▇▇. ▇▇▇▇▇▇▇ or ▇▇. ▇▇▇▇▇ 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 ▇▇. ▇▇▇▇▇▇▇ or ▇▇. ▇▇▇▇▇, 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.
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In addition to the fees set forth in Section 7.3
hereof, the Bank shall be entitled to an administration fee as
compensation for its services under this Section 1 in the amount
of $5,000 payable (i) upon the execution and delivery of this
Bank Agreement and (ii) subject to an adjustment as provided in
the next succeeding sentence of this Section 1.7, on the first
anniversary date of this Bank Agreement, provided however, that
the Bank shall not be entitled to payment of an administration
fee on such first anniversary date if all of the Notes have been
sold prior thereto. In the event the Offering terminates prior
to March 31, 1998, the Company shall be entitled to a refund
payable ten days after the Offering Termination Date, of that
portion of the administration fee paid to the Bank on the first
anniversary date of the Bank Agreement, in an amount calculated
as the difference between (a) $5,000 and (b) the product of (x)
$5,000 and (y) a fraction, the numerator of which is the number
of days between the first anniversary date of this Bank Agreement
and the Offering Termination Date, inclusive, and the denominator
of which is 365. In no event shall the Bank be entitled to
payment of an administration fee, as provided for in this
Section 1.7, following the Offering Termination Date. The
Company shall also pay the Bank $5 for the preparation and
execution of each Purchaser's account including the calculation
of interest accrued; $1 for the preparation of each Purchaser's
1099 tax form; $25 for each investment transaction in the Fund;
$25 for each returned "bounced" check of a Purchaser; and $500
for each Additional Closing, payable within 10 days after the
Bank gives the Company notice that any such amounts are due and
payable. Notwithstanding anything herein to the contrary, the
Bank shall not charge the Company for the issuance of checks or
wire transfers to make monthly payments of accrued interest on
Subscription Payments. No additional fee will be payable with
respect to wire transfers of and unreturned checks for
Subscription Payments. In addition, the Company shall reimburse
the Bank for other actual out-of-pocket expenses incurred in
connection with its obligations pursuant to this Section 1
(including, but not limited to, actual expenses for stationery,
postage, telephone, telex, wire transfers, telecopy and retention
of records, and reasonable fees and expenses of counsel), payable
within ten (10) days after the Bank gives notice to the Company
that it has incurred such expenses. The obligation to pay such
compensation and reimburse such expenses shall be borne solely by
the Company. Amounts held in the Fund shall not be available to
satisfy this obligation or any other obligation of the Company to
the Bank. The provisions of this Section 1.7 shall survive the
termination of this Bank Agreement.
Section 1.8 Termination of Offering.
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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.
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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.
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In the event that any funds, including Cleared Funds,
deposited in the Fund prove uncollectible after the funds
represented thereby have been released by the Bank pursuant to
this Bank Agreement, the Company shall reimburse the Bank upon
request for the face amount of such check or checks; and the Bank
shall, upon instruction from the Company, deliver the returned
checks or other instruments to the Company. This section shall
survive the termination of this Bank Agreement.
Section 1.11 Cleared Funds.
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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.
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The Notes shall be executed on behalf of the Company by
the manual or facsimile signature of an officer of the Company.
All such facsimile signatures shall have the same force and
effect as if the officer had manually signed the Notes. In case
any officer of the Company whose signature shall appear on a Note
shall cease to be such officer before the delivery of such Note
or the issuance of a new Note following a transfer or exchange,
such signature or such facsimile shall nevertheless be valid and
sufficient for all purposes, the same as if such officer had
remained an officer until delivery.
Section 3. Authenticating Agent.
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Section 3.1 Appointment.
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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.
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Only such Notes as shall have the Certificate of
Authentication endorsed thereon in substantially the form set
forth in the form of Note attached to the Memorandum, duly
executed by the manual signature of an authorized signatory of
the Bank, shall be entitled to any right or benefit under this
Bank Agreement. No Notes shall be valid or obligatory for any
purpose unless and until such Certificate of Authentication shall
have been duly executed by the Bank; and such executed
certificate upon any such Note shall be conclusive evidence that
such Note has been authenticated and delivered under this Bank
Agreement. The Certificate of Authentication on any Note shall
be deemed to have been executed by the Bank if signed by an
authorized signatory of the Bank, but it shall not be necessary
that the same person sign the Certificate of Authentication on
all of the Notes.
Section 4. Mutilated, Lost, Stolen or Destroyed
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Notes.
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Subject to applicable law, in the event any Note is
mutilated, lost, stolen or destroyed, the Company may authorize
the execution and delivery of a new Note of like date, number,
maturity and denomination as that mutilated, lost, stolen or
destroyed, provided, however, that in the case of any mutilated
Note, such mutilated Note shall first be surrendered to the
Company, and in the case of any lost, stolen or destroyed Note,
there shall be first furnished to the Company and the Bank,
evidence of the ownership thereof and of such loss, theft or
destruction satisfactory to the Company and the Bank, together
with indemnification through a note of indemnity or otherwise as
shall be satisfactory to the Company and the Bank. The Company
may charge the Purchaser of such Note with any amounts
satisfactory to the Company and the Bank and permitted by
applicable law.
Section 5. Registrar and Transfer Agent.
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Section 5.1 Appointment.
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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
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Notes.
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The Notes are issuable only as registered Notes without
coupons in the denomination of $100,000 or any multiple or any
fraction thereof at the sole discretion of the Company. Each
Note shall bear the following restrictive legend: "These
securities have not been registered under the Securities Act of
1933, as amended, and may be offered and sold or otherwise
transferred only if registered pursuant to the provisions of that
Act or if an exemption from registration is available." The Bank
shall keep at its principal corporate trust office a register in
which the Bank shall provide for the registration and transfer of
Notes. Upon surrender for registration of transfer of any Note
at such office of the Bank, the Company shall execute, pursuant
to Section 2 hereof, and mail by first class mail to the Bank,
and the Bank shall authenticate, pursuant to Section 3 hereof,
and mail by first class mail to the designated transferee, or
transferees, one or more new Notes in an aggregate principal
amount equal to the unpaid principal amount of such surrendered
Note, registered in the name of the designated transferee or
transferees. Every Note presented or surrendered for
registration of transfer shall be duly endorsed, or be
accompanied by a written instrument of transfer duly executed, by
the holder of such Note or his attorney duly authorized in
writing. Notwithstanding the preceding, the Notes may not be
transferred without an effective registration statement under the
Securities Act of 1933 covering the Notes or an opinion of
counsel satisfactory to the Company and its counsel that such
registration is not necessary under the Securities Act of 1933
(the "Securities Act"). At the option of the owner of any Note,
such Note may be exchanged for other Notes of any authorized
denominations, in an aggregate principal amount equal to the
unpaid principal amount of such surrendered Note, upon surrender
of the Note to be exchanged at the principal corporate trust
office of the Bank; provided, however, that any exchange for
denominations other than $100,000 or an integral multiple thereof
shall be at the sole discretion of the Company. Whenever any
Note is so surrendered for exchange, the Company shall execute,
pursuant to Section 2 hereof, and deliver to the Bank, and the
Bank shall authenticate, pursuant to Section 3 hereof, and mail
by first class mail to the designated transferee, or transferees,
the Note or Notes which the Note owner making the exchange is
entitled to receive. Any Note or Notes issued in exchange for
any Note or upon transfer thereof shall be dated the date to
which interest has been paid on such Note surrendered for
exchange or transfer, and neither gain nor loss of interest shall
result from any such exchange or transfer. In addition, each
Note issued upon such exchange or transfer shall bear the
restrictive legend set forth above unless in the opinion of
counsel to the Company, such legend is not required to ensure
compliance with the Securities Act.
Section 5.3 Owner.
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The person in whose name any Note shall be registered
shall be deemed and regarded as the absolute owner thereof for
all purposes, and payment of or on account of the principal of or
interest on such Note shall be made only to or upon the order of
the registered owner thereof or his duly authorized legal
representative. Such registration may be changed only as
provided in this Section 5, and no other notice to the Company or
the Bank shall affect the rights or obligations with respect to
the transfer of a Note or be effective to transfer any Note. All
payments to the person in whose name any Note shall be registered
shall be valid and effectual to satisfy and discharge the
liability upon such Note to the extent of the sum or sums to be
paid.
Section 5.4 Transfer Agent.
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The Bank shall send executed, authenticated Notes to
Purchasers on Closing Dates as required and to subsequent owners
and transferees who are entitled to receive Notes pursuant to the
terms of this Bank Agreement, by first class mail.
Section 5.5 Charges and Expenses.
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No service charge shall be made for any transfer or
exchange of Notes, but in all cases in which Notes shall be
transferred or exchanged hereunder, as a condition to any such
transfer or exchange, the owner of the Note shall, prior to the
delivery of any new Note pursuant to such transfer or exchange,
reimburse the Company and the Bank for their respective actual
out-of-pocket expenses incurred in connection therewith
(including, but not limited to, any tax, fee or other
governmental charge required to be paid with respect to such
transfer or exchange, actual expenses for stationery, postage,
telephone, telex, wire transfers, telecopy and retention of
records, and reasonable fees and expenses of their respective
counsel). The provisions of this Section 5.5 shall survive the
termination of this Bank Agreement.
Section 5.6 Redemption at the Option of the Company.
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(a) Whenever the Company shall effect a redemption at
the option of the Company, at any time in its sole and absolute
discretion, of part or all of the Notes, which shall be without
premium or penalty, the Company shall give written notice thereof
to the Bank at least forty (40) days prior to the date set forth
for redemption, the manner in which redemption shall be effected
and all the relevant details thereof. The Bank shall give
written notice to the Purchasers of that redemption at least
thirty (30) days prior to the date set forth for redemption in
the form included herewith as Exhibit A. The Bank shall register
the cancellation of the whole or a portion of the unredeemed
Notes, as appropriate. In any event, new Notes will not be
issued to reflect the non-redeemed portion of the Notes. No
interest shall be payable on the redeemed portion of a Note from
and after the date of redemption.
(b) The Bank hereby acknowledges that the Company may
effect a redemption at the option of the Company, at any time in
its sole and absolute discretion, of part or all of the Notes
without premium or penalty.
Section 5.7 Mandatory Redemption.
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The Company shall be obligated to redeem 100% of the
Notes due March 31, 2002. When the Company shall effect the
mandatory redemption, the Company shall give written notice
thereof to the Bank at least forty (40) days prior to the date
set forth for redemption, the manner in which redemption shall be
effected and all relevant details thereof. The Bank shall give
written notice to the Purchasers of that redemption at least
thirty (30) days prior to the date set forth for redemption in
the form included herewith as Exhibit B. The Bank shall register
the cancellation of the whole of the redeemed Notes.
Section 6. Paying Agent.
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Section 6.1 Appointment.
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The Company hereby appoints and designates the Bank as
Paying Agent for the purposes set forth in this Section 6, and
the Bank hereby accepts such appointment.
Section 6.2 Payment Provisions.
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(a) The Bank shall pay interest on Subscription
Payments and principal of and interest on the Notes to the
persons in whose names the Notes are registered, subject to the
limitations contained in Section 5.6(a), Section 5.7 and in
accordance with the terms and provisions of this Bank Agreement
and the Notes, by check mailed by first class mail to the
registered owner of a Note at his address as it appears in the
register; provided that not later than 11:30 a.m. (New York time)
on the Interest Payment Date or date on which principal of any
Note is due and payable, the Company shall provide the Bank with
sufficient funds to make those payments.
(b) Each Purchaser shall be entitled to receive with
respect to that Purchaser's Notes, interest from the Closing Date
through March 31, 2002.
Section 6.3 Expenses.
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The Company shall reimburse the Bank for its actual
out-of-pocket expenses incurred in connection with its
obligations pursuant to this Section 6 (including, but not
limited to, actual expenses for stationery, postage, telephone,
telex, wire transfers, telecopy and retention of records),
payable within ten (10) days after the Bank gives notice to the
Company that it has incurred such expenses. The obligation to
pay such compensation and reimburse such expenses shall be borne
solely by the Company. Notwithstanding anything herein to the
contrary, the Bank shall not charge the Company any fees for the
issuance of checks or wire transfers to make payments of interest
on or repayments of principal of the Notes. The provisions of
this Section 6.3 shall survive the termination of this Bank
Agreement.
Section 7. Rights and Duties of Bank.
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Section 7.1 Duties of the Bank.
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(a) Upon the occurrence and continuation of an Event
of Default, the Bank shall declare the entire outstanding
aggregate principal balance of all the Notes plus all accrued
interest due and immediately payable.
(b) In the event that the Company shall default on its
payment obligations to the Bank under this Bank Agreement, the
Bank shall be entitled to institute action against the Company,
jointly or severally, to collect payment under this Bank
Agreement.
Section 7.2 Events of Default.
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If any of the following events (an "Event of Default")
shall occur and be continuing for any reason whatsoever (and
whether such occurrence shall be voluntary or involuntary or come
about or be effected by operation of law or otherwise):
(i) the Company defaults in the payment of any
part of the principal of any Note when the same shall
become due and payable on March 31, 2002, and such
default shall have continued for more than 30 days; or
(ii) the Company defaults in the payment of any
part of the interest on any Note when the same shall
become due and payable, and such default shall have
continued for more than 15 days;
then, the Bank, upon instruction by the owners of at least 50% of
the principal amount of the Notes, by notice to the Company, or
the owners of at least 75% of the principal amount of the Notes,
by notice to the Company and to the Bank, may declare the entire
principal of and accrued interest on all Notes to become
immediately due and payable at par without presentment, demand,
protest or other notice of any kind, all of which are waived by
the Company.
Section 7.3 Fees and Expenses.
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In addition to the administration fee set forth in
Section 1.7 hereof, the Bank shall be entitled to compensation
for its services under this Section 7 in the amount of $2,500 as
an acceptance fee, payable upon execution and delivery of this
Bank Agreement; and administrative fees, payable annually on the
anniversary date of this Bank Agreement, based upon the aggregate
principal amount of outstanding Notes ten days prior to the
anniversary date, in the following amounts:
$ 500,000 to $ 1,000,000 outstanding $2,500.00
$ 1,000,001 to $ 2,000,000 outstanding $3,000.00
$ 2,000,001 to $ 3,000,000 outstanding $4,000.00
$ 3,000,001 to $ 4,000,000 outstanding $5,000.00
$ 4,000,001 to $ 5,000,000 outstanding $6,000.00
$ 5,000,001 to $ 6,000,000 outstanding $7,000.00
$ 6,000,001 to $ 7,000,000 outstanding $8,000.00
$ 7,000,001 to $ 7,500,000 outstanding $8,500.00
The Company shall reimburse the Bank for its actual out-of-pocket
expenses incurred in connection with its obligations pursuant to
this Section 7 (including, but not limited to, actual expenses
for stationery, postage, telephone, telex, wire transfers,
telecopy, retention of records, and the filing of Financing
Statements, and reasonable fees and expenses of counsel), payable
within ten (10) days after the Bank gives notice to the Company
that it incurred such expenses. The obligation to pay such
compensation and reimburse such expenses shall be borne solely by
the Company. The provisions of this Section 7.3 shall survive
the termination of this Bank Agreement.
Section 7.4 Other Rights and Duties of Bank.
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(a) The Bank need exercise only those rights and need
perform only those duties that are contemplated or specifically
set forth in this Bank Agreement and no others.
(b) Notwithstanding anything herein to the contrary,
the Bank may not be relieved from liability for its own grossly
negligent action, its own grossly negligent failure to act, or
its own willful misconduct except that
(i) This paragraph does not limit the effect of
paragraph (a) of this Section.
(ii) The Bank shall not be liable with respect to
any action it takes or omits to take in good faith in
accordance with a notice received by it pursuant to the
subscription agreements executed by the Purchasers in
connection with the purchase of the Notes.
(c) The Bank may rely on any document believed by it
to be genuine and to have been signed or presented by the proper
person. The Bank need not investigate any fact or matter stated
in the document.
(d) Before the Bank acts or refrains from acting, it
may require an officer's certificate or an opinion of counsel.
The Bank shall not be liable for any action it takes or omits to
take in good faith in reliance on the certificate or opinion.
(e) The Bank may act through agents and shall not be
responsible for the misconduct or negligence of any agent
appointed with due care.
Section 8. No Representations.
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The Bank makes no representation as to the validity or
adequacy of this Bank Agreement or the Notes delivered to it by
the Company; it shall not be accountable for the Company's use of
the proceeds from the Notes and it shall not be responsible for
any statement in the Memorandum or in the Notes other than its
authentication.
Section 9. Indemnification.
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The Company shall indemnify, defend and hold the Bank
harmless from and against any and all loss, damage, liability,
claim and expense, including taxes (other than taxes based on the
income of the Bank) incurred by the Bank arising out of or in
connection with its acceptance or performance of its obligations
under this Bank Agreement, including the legal costs and expenses
of defending itself against any claim or liability in connection
with its performance under this Bank Agreement. The Bank shall
notify the Company promptly of any claim for which it may seek
indemnity. The Company shall defend the claim and the Bank shall
cooperate in the defense. The Bank may have separate counsel and
shall pay the fees and expenses of such counsel. The Company
need not reimburse any expense or indemnify against any loss or
liability incurred by the Bank through gross negligence or bad
faith. The provisions of this Section 9 shall survive the
termination of this Bank Agreement.
Section 10. Replacement of Bank.
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(a) A resignation or removal of the Bank and
appointment of a successor bank shall become effective only upon
the successor bank's acceptance of appointment as provided in
this Section 10.
(b) The Bank may resign by so notifying the Company.
The Company may remove the Bank if:
(i) the Bank is adjudged a bankrupt or an
insolvent;
(ii) a receiver or public officer takes charge of
the Bank or its property; or
(iii) the Bank becomes incapable of acting.
(c) (i) If the Bank resigns or is removed, the
Company shall promptly appoint a successor bank.
(ii) A successor bank shall deliver a written
acceptance of its appointment to the retiring Bank and
the Company. Thereupon the resignation or removal of
the retiring Bank shall become effective and the
successor bank shall have all the rights, powers and
duties of the Bank under this Bank Agreement. The
successor bank shall mail a notice of its succession to
Note owners. Upon payment to the retiring Bank of all
amounts owed to it under this Bank Agreement, the
retiring Bank shall promptly transfer all property held
by it under the terms of this Bank Agreement.
(d) If the Bank consolidates, merges or converts into,
or transfers all or substantially all of its corporate trust
business to, another corporation, the successor corporation
without any further act shall be the successor bank.
Section 11. Notices.
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All notices and other communications pursuant to this
Bank Agreement shall be in writing, subject to the terms of
Section 1.6 hereof, and shall be delivered by hand or sent by
registered, certified, return receipt requested, or first class
mail, or by facsimile, confirmed by writing, delivered by hand or
sent by registered, certified, return receipt requested, or first
class mail delivered or sent on the date of the facsimile,
addressed as follows:
(a) If to the Company:
Grand Court Lifestyles, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
With a copy to:
▇▇▇▇ & Priest LLP
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
(b) If to Note owners:
At the addresses of the registered owners
appearing in the register maintained by the Bank.
(c) If to Bank:
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address as a party shall have last furnished to
the other parties hereto in writing. Any notice provided for
herein shall be deemed to have been given on the date of the
receipt of the notice by hand delivery or of the facsimile or the
third Business Day after the date of mailing, certified mail,
return receipt requested.
Section 12. Choice of Law.
-------------
This Bank Agreement shall be governed by the laws of
the State of New York, without giving effect to the principles of
conflicts of law thereof.
Section 13. Prior Agreements; Amendment.
---------------------------
This Bank Agreement sets forth the entire agreement of
the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements, contracts, promises,
representations, warranties, statements, arrangements and
understandings, if any, among the parties hereto or their
representatives with respect to the subject matter hereof. No
waiver, modification or amendment of any provision, term or
condition hereto shall be valid unless in writing and signed by
all parties hereto, and any such waiver, modification or
amendment shall be valid only to the extent therein set forth.
Section 14. Successors.
----------
This Bank Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors
and permitted assigns.
Section 15. Enforceability.
--------------
Any provision of this Bank Agreement which may by
determined by competent authority to be prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
Section 16. Counterparts.
------------
This Bank Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of
which together shall constitute one instrument.
Section 17. Use of The Bank of New York Name.
--------------------------------
(a) No printed or other material in any language,
including prospectuses, notices, reports, and promotional
materials which mentions the Bank by name or the rights, powers,
or duties of the Bank under this Bank Agreement shall be issued
by any of the other parties hereto, or on such party's behalf,
without the prior written consent of the Bank.
(b) Notwithstanding the above, the Bank hereby
consents to the use of its name and its rights, powers and duties
under this Bank Agreement in the Memorandum and any notices and
reports required under applicable Federal and state securities
laws in connection therewith. In addition, the Bank hereby
consents to the use of its name and its rights, powers, and
duties under this Bank Agreement in the promotional material
included herewith as Exhibit C.
[INTENTIONALLY LEFT BLANK]
Section 18. Definitions.
-----------
All terms used in this Bank Agreement and not otherwise
defined herein shall have the meanings ascribed to them in the
Memorandum.
IN WITNESS WHEREOF, the parties hereto have executed
this Bank Agreement as of the date first above written.
GRAND COURT LIFESTYLES, INC. THE BANK OF NEW YORK
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------ ----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: President Title: Assistant Vice President
EXHIBIT A
TO BANK AGREEMENT
[FORM OF NOTICE]
NOTICE OF VOLUNTARY REDEMPTION
------------------------------
OF
GRAND COURT LIFESTYLES, INC.
Retirement Financing Notes-IV
To holders of Grand Court Lifestyles, Inc. (the
"Company") 13.125% Retirement Financing ▇▇▇▇▇-▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇,
▇▇▇▇ (▇▇▇ "Notes"):
NOTICE is hereby given by The Bank of New York (the
"Bank"), as paying agent for the Notes, that, pursuant to the
voluntary redemption provision of Section 5.6 of the Bank
Agreement between the Company and the Bank, dated _____________,
1996, the Company has elected to redeem and pay off on
__________________________________ (the "Redemption Date") [all]
[a portion of] the above mentioned Notes then outstanding, in
accordance with the terms of the Notes, and that [all] [a portion
of] the Notes are called for redemption on the Redemption Date.
The redemption price on the Redemption Date shall be
$_______. Interest on the Notes so redeemed shall cease from and
after the Redemption Date.
Dated: [month] [day], [year]
------- ----- ------
THE BANK OF NEW YORK
EXHIBIT B
TO BANK AGREEMENT
[FORM OF NOTICE]
NOTICE OF MANDATORY REDEMPTION
------------------------------
OF
GRAND COURT LIFESTYLES, INC.
Retirement Financing Notes-IV
To holders of Grand Court, Lifestyles, Inc. (the
"Company") 13.125% Retirement Financing ▇▇▇▇▇-▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇,
▇▇▇▇ (▇▇▇ "Notes"):
NOTICE is hereby given by The Bank of New York (the
"Bank"), as paying agent for the Notes, that, pursuant to the
mandatory redemption provision of Section 5.6 of the Bank
Agreement between the Company and the Bank, dated
_______________________, 1996, the Company will redeem and pay
off on March 31, 2002 (the "Redemption Date") 100% of the above
mentioned Notes, in accordance with the terms of the Notes, and
that 100% of the Notes are called for redemption on the
Redemption Date.
Interest on the Notes so redeemed shall cease from and
after the Redemption Date.
Dated: [month] [day], [year]
------- ----- ------
THE BANK OF NEW YORK
EXHIBIT C
TO BANK AGREEMENT
DRAFT OF PROMOTIONAL MATERIALS
TO BE USED IN CONNECTION WITH
RETIREMENT FINANCING NOTES-IV