Exhibit 4.2
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of October 1, 1998 (this
"Agreement"), of GRAND COURT LIFESTYLES, INC., a Delaware corporation (the
"Company"), in favor of the Holders of the Registrable Securities (as such terms
are hereinafter defined).
1. Certain Definitions.
For purposes of this Registration Rights Agreement, the following terms
shall have the following respective meanings.
(a) "Initial Closing Date" means the first date on which
Securities are initially issued.
(b) "Commission" means the Securities and Exchange Commission,
or any other federal agency at the time administering the Exchange Act
or the Securities Act, whichever is the relevant statute for the
particular purpose.
(c) "Effective Time" in the case of (i) an Exchange Offer,
means the time and date as of which the Commission declares the
Exchange Offer Registration Statement effective or as of which the
Exchange Offer Registration Statement otherwise becomes effective and
(ii) a Shelf Registration, means the time and date as of which the
Commission declares the Shelf Registration effective or as of which the
Shelf Registration otherwise becomes effective.
(d) "Exchange Act" means the Securities Exchange Act of 1934,
or any successor thereto, as the same shall be amended form time to
time.
(e) "Exchange Offer" has the meaning assigned thereto in
Section 2(a).
(f) "Exchange Offer Registration Statement" has the meaning
assigned thereto in Section 2(a).
(g) "Exchange Registration" has the meaning assigned thereto
in Section 3(f).
(h) "Final Closing Date" means the last date on which
Securities are initially issued.
(i) "Holder" means each Initial Purchaser for so long as it
owns any Registrable Securities, and such of its respective successors
and assigns who acquire Registrable Securities, directly or indirectly,
from such person or from any successor or assign of such person, in
each case for so long as such person owns any Registrable Securities.
(j) "Indenture" means the Indenture, dated as of October 1,
1998, between the Company and The Bank of New York, as Trustee, as the
same shall be amended from time to time.
(k) "New Securities" has the meaning assigned thereto in
Section 2(a).
(l) "Participant" has the meaning as assigned thereto in
Section 6(a).
(m) "Person" means a corporation, association, partnership,
organization, business, individual, government or political subdivision
thereof or governmental agency.
(n) "Registrable Securities" means the Securities: provided,
however, that such Securities shall cease to be Registrable Securities
when (i) such Securities have been exchanged for New Securities in an
Exchange Offer as contemplated in Section 2(a); (ii) in the
circumstances contemplated by Section 2(b), a registration statement
registering such Securities under the Securities Act has been declared
or becomes effective and such Securities have been sold or otherwise
transferred by the Holder thereof pursuant to such effective
registration statement; (iii) such Securities are sold pursuant to Rule
144 under circumstances in which any legend borne by such Securities
relating to restrictions on transferability thereof, under the
Securities Act or otherwise, is removed or such Securities are eligible
to be sold pursuant to paragraph (k) of Rule 144; or (iv) such
Securities shall cease to be outstanding.
(o) "Registration Expenses" has the meaning assigned thereto
in Section 4.
(p) "Resale Period" means the period beginning on the date the
Shelf Registration becomes effective and ending on the earlier of (i)
the Shelf Registration ceasing to be effective or (ii) the second
anniversary of the Closing Date.
(q) "Restricted Holder" means (i) a Holder that is an
affiliate of the Company within the meaning of Rule 405, (ii) a Holder
who acquires New Securities outside the ordinary course of such
Holder's business, (iii) a Holder who has arrangements or
understandings with any person to participate in the Exchange Offer for
the purpose of distributing New Securities, or (iv) a broker-dealer who
receives Securities for its own account but did not acquire the
Securities as a result of market-making activities or other trading
activities.
(r) "Rule 144," "Rule 405" and "Rule 415" means, in each case,
such rule promulgated under the Securities Act.
(s) "Securities" means the 11% Series A Notes Due December 15,
2005 to be issued under the Indenture and sold by the Company.
(t) "Securities Act" means the Securities Act of 1933, as
amended.
(u) "Shelf Registration" has the meaning assigned thereto in
Section 2(b).
(v) "Trust Indenture Act" means the Trust Indenture Act of
1939, or any successor thereto, and the rules, regulations and forms
promulgated thereunder, all as the same shall be amended from time to
time.
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Unless the context otherwise requires, any reference herein to a
"Section" or "clause" refers to a Section or clause, as the case may be, of this
Agreement, and the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Section or other subdivision. Unless the context otherwise requires, any
reference to a statute, rule or regulation refers to the same (including any
successor statute, rule or regulation thereto) as it may be amended from time to
time.
2. Registration Under the Securities Act.
(a) Except as set forth in Section 2(b), the Company agrees to
file under the Securities Act a registration statement (the "Exchange
Offer Registration Statement") relating to an offer to exchange (the
"Exchange Offer") any and all of the Securities for a like aggregate
amount of securities issued by the Company, which have the same terms
as the Securities (and are entitled to the benefits of a trust
indenture which has been qualified under the Trust Indenture Act),
except that they have been registered pursuant to an effective
registration statement under the Securities Act, do not contain
restrictions on transfers and do not contain provisions for the
additional interest contemplated in Section 2(c) below (such new
securities hereinafter called "New Securities"). The Company agrees to
use its reasonable best efforts to cause the Exchange Offer
Registration Statement to become effective under the Securities Act on
or before November 15, 1999. The Exchange Offer will be registered
under the Securities Act on the appropriate form and will comply in all
material respects with all applicable tender offer rules and
regulations under the Exchange Act. The Company further agrees to
commence and complete the Exchange Offer reasonably promptly after the
Exchange Offer Registration Statement has become effective for all
Securities that have been properly tendered and not withdrawn on or
prior to the expiration of the Exchange Offer. The Exchange Offer will
be deemed completed only if the New Securities received by Holders
(other than Restricted Holders) in the Exchange Offer for Securities
are, upon receipt, transferable by each such Holder without restriction
imposed thereon by the Securities Act or the Exchange Act and without
material restrictions imposed thereon by the blue sky or securities
laws of a substantial majority of the States of the United States of
America. The Exchange Offer shall be deemed to have been completed upon
the Company having exchanged pursuant to the Exchange Offer, New
Securities for all Securities that have been properly tendered and not
withdrawn before the expiration of the Exchange Offer, which shall be
on a date that is at least 30 days following the commencement of the
Exchange Offer.
(b) If (i) because of any change in law or in applicable
interpretations by the staff of the Commission, the Company is not
permitted to effect the Exchange Offer or (ii) in the case of any
Holder, other than a Restricted Holder, that participates in the
Exchange Offer, such Holder does not receive New Securities on the date
of the exchange that may be sold without restriction under state and
federal securities laws (other than due solely to the status of such
Holder as an affiliate of the Company within the meaning of the
Securities Act), then in addition to or in lieu or conducting the
Exchange Offer contemplated by Section 2(a), the Company shall file
under the Securities Act as promptly as practicable a "shelf"
registration statement providing for the registration of, and the sale
on a continuous or delayed basis by any such Holder of, all of the
Registrable Securities held by such Holder, pursuant to Rule 415 or any
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similar rule that may be adopted by the Commission (the "Shelf
Registration"). The Company agrees to use its reasonable best efforts
to cause the Shelf Registration to become to be declared effective on
or before November 15, 1999 and to keep such Shelf Registration
continuously effective for a period (the "Effectiveness Period")
ending on the earlier of (i) the second anniversary of the Final
Closing Date or (ii) such time as there are no longer any Registrable
Securities outstanding. The Company further agrees to supplement or
make amendments to the Shelf Registration during the Effectiveness
Period, as and when required by the rules, regulations or instructions
applicable to the registration form used for such Shelf Registration
or by the Securities Act or rules and regulations thereunder for shelf
registration, and the Company agrees to furnish to the Holders of the
Registrable Securities copies of any such supplement or amendment
prior to its being used or promptly following its filing with the
Commission. Notwithstanding the foregoing, if the Board of Directors
of the Company determines in good faith that it is in the best
interests of the Company not to disclose the existence of or facts
surrounding any proposed or pending material corporate transaction
involving the Company, the Company may allow the Shelf Registration
Statement to fail to be effective and usable as a result of such
nondisclosure for up to 60 days during the two year period of
effectiveness required by Section 2 hereof, but in no event for any
period in excess of 30 consecutive days.
(c) Any reference herein to a registration statement shall be
deemed to include any document incorporated therein by reference as of
the applicable Effective Time and any reference herein to any
post-effective amendment to a registration statement shall be deemed to
include any document incorporated therein by reference as of a time
after such Effective Time.
3. Registration Procedures.
The following provisions shall apply to registration statements filed
pursuant to Section 2:
(a) At or before the Effective Time of the Exchange Offer or
the Shelf Registration, as the case may be, the Company shall qualify
the Indenture under the Trust Indenture Act.
(b) In connection with the Company's obligations with respect
to the Shelf Registration, if applicable, the Company shall, as soon as
reasonable practicable (or as otherwise specified herein):
(i) prepare and file with the Commission a
registration statement with respect to the Shelf Registration
on any form which may be utilized by the Company and which
shall permit the disposition of the Registrable Securities in
accordance with the intended method or methods thereof, as
specified in writing by the Holders of the Registrable
Securities, and use its reasonable best efforts to cause such
registration statement to become effective as soon as
practicable thereafter;
(ii) prepare and file with the Commission such
amendments and supplements to such registration statement and
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the prospectus included therein as may be necessary to
effect and maintain the effectiveness of such registration
statement for the period specified in Section 2(b) and as
may be required by the applicable rules and regulations of
the Commission and the instructions applicable to the form
of such registration statement, and furnish to the Holders
of the Registrable Securities copies of any such supplement
or amendment simultaneously with or prior to its being used
or filed with the Commission;
(iii) comply in all material respects as to all
matters within the Company's control, with the provisions of
the Securities Act with respect to the disposition of all of
the Registrable Securities covered by such registration
statement in accordance with the intended methods of
disposition by the Holders thereof provided for in such
registration statement;
(iv) promptly notify the selling Holders of
Registrable Securities, the sales or placement agent, if any,
therefor and the managing underwriter or underwriters, if any,
thereof named in the Shelf Registration or a supplement
thereto, and confirm such notice in writing, (A) when such
registration statement or the prospectus included therein or
any prospectus amendment or supplement or post-effective
amendment has been filed, and, with respect to such
registration statement or any post-effective amendment, when
the same has become effective, (B) of the issuance by the
Commission of any stop order suspending the effectiveness of
such registration statement or the initiation or written
threat of any proceedings for that purpose, (C) of the receipt
by the Company of any notification with respect to the
suspension of the qualification of the Registrable Securities
for sale in any jurisdiction or the initiation or written
threat of any proceeding for such purpose, or (D) at any time
when a prospectus is required to be delivered under the
Securities Act, that such registration statement, prospectus,
prospectus amendment or supplement or post-effective amendment
does not conform in all material respects to the applicable
requirements of the Securities Act and the Trust Indenture Act
and the rules and regulations of the Commission thereunder;
(v) use its reasonable best efforts to obtain the
withdrawal of any order suspending the effectiveness of such
registration statement or any post-effective amendment thereto
at the earliest practicable date;
(vi) if requested by any managing underwriter or
underwriters, any placement or sales agent or any Holder of
Registrable Securities, promptly incorporate in a prospectus
supplement or post-effective amendment such information as is
required by the applicable rules and regulations of the
Commission relating to the terms of the sale of such
Registrable Securities, including information with respect to
the principal amount of Registrable Securities being sold by
such Holder or agent or to any underwriters, the name and
description of such Holder, agent or underwriter, the offering
price of such Registrable Securities and any discount,
commission or other compensation payable in respect thereof,
the purchase price being paid therefor by such underwriters
and with respect to any other terms of the offering of the
Registrable Securities to be sold by such Holder or agent or
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to such underwriters; and make all required filings of such
prospectus supplement or post-effective amendment promptly
after notification of the matters to be incorporated in such
prospectus supplement or post-effective amendment;
(vii) furnish to each Holder of Registrable
Securities, each placement or sales agent, if any, therefor,
and each underwriter, if any, thereof an executed copy (or, in
the case of a Holder of Registrable Securities, a conformed
copy) of such registration statement, each such amendment or
supplement thereto (in each case including all exhibits
thereto) and such number of copies of such registration
statement (excluding exhibits thereto) and of the prospectus
included in such registration statement (including each
preliminary prospectus and any summary prospectus), in
conformity in all material respects with the applicable
requirements of the Securities Act and the Trust Indenture Act
and the rules and regulations of the Commission thereunder;
and the Company hereby consents to the use of such prospectus
(including any such preliminary or summary prospectus) and any
amendment or supplement thereto by each such Holder and by any
such agent and underwriter, in each case, in the form most
recently provided to such person by the Company in connection
with the offering and sale of the Registrable Securities
covered by the prospectus (including any such preliminary or
summary prospectus) or any supplement or amendment thereto;
and
(viii) use its reasonable best efforts to (A) register
or qualify the Registrable Securities to be included in such
registration statement under such securities laws or blue
sky laws of such United States jurisdictions as any Holder
of such Registrable Securities and each placement or sales
agent, if any, therefor and underwriter, if any, thereof
shall reasonably request, and (B) keep such registrations or
qualifications in effect and comply with such laws so as to
permit the continuance of offers, sales and dealings therein
in such jurisdictions during the period the Shelf
Registration is required to remain effective under Section
2(b) and for so long as may be necessary to enable any such
Holder, agent or underwriter to complete its distribution of
Securities pursuant to such registration statement but in
any event not later than the date through which the Company
is required to keep the Shelf Registration effective
pursuant to Section 2(b); provided, however, that the
Company shall not be required for any such purpose to (1)
qualify as a foreign corporation in any jurisdiction wherein
it would not otherwise be required to qualify but for the
requirements of this Section 3(b)(viii), (2) consent to
general service of process in any such jurisdiction or (3)
make any changes to its certificate of incorporation or
by-laws or any agreement between it and its stockholders.
In case any of the foregoing obligations is dependent upon information
provided or to be provided by a party other than the Company, such obligation
shall be subject to the provision of such information by such party.
(c) In the event that the Company would be required, pursuant
to Section 3(b)(iv)(D), to notify the selling Holders of Registrable
Securities, the placement or sales agent, if any, therefor or the
managing underwriters, if any, thereof named in the Shelf Registration
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or a supplement thereto of the existence of the circumstances
described therein, the Company shall promptly prepare and furnish to
each such Holder, to each placement or sales agent, if any, and to
each such underwriter, if any, a reasonable number of copies of a
prospectus supplemented or amended so that, as thereafter delivered to
purchasers of Registrable Securities, such prospectus shall conform in
all material respects to the applicable requirements of the Securities
Act and the Trust Indenture Act and the rules and regulations of the
Commission thereunder. Each Holder of Registrable Securities agrees
that upon receipt of any notice from the Company, pursuant to
Section 3(b)(iv)(D), such Holder shall forthwith discontinue (and
cause any placement or sales agent or underwriters acting on their
behalf to discontinue) the disposition of Registrable Securities
pursuant to the registration statement applicable to such Registrable
Securities until such Holder (i) shall have received copies of such
amended or supplemented prospectus and, if so directed by the Company,
such Holder shall deliver to the Company (at the Company's expense)
all copies, other than permanent file copies, then in such Holder's
possession of the prospectus covering such Registrable Securities at
the time of receipt of such notice or (ii) shall have received notice
from the Company that the disposition of Registrable Securities
pursuant to the Shelf Registration may continue.
(d) The Company may require each Holder of Registrable
Securities as to which any registration pursuant to Section 2(b) is
being effected to furnish to the Company such information regarding
such Holder and such Holder's intended method of distribution of such
Registrable Securities as the Company may from time to time reasonably
request in writing, but only to the extent that such information is
required in order to comply with the Securities Act. Each such Holder
agrees to notify the Company as promptly as practicable of any
inaccuracy or change in information previously furnished by such Holder
to the Company or of the occurrence of any event in either case as a
result of which any prospectus relating to such registration contains
or would contain an untrue statement of a material fact regarding such
Holder or such Holder's intended method of disposition of such
Registrable Securities required to be stated therein or necessary to
make the statements therein not misleading, and promptly to furnish to
the Company any additional information required to correct and update
any previously furnished information or required so that such
prospectus shall not contain, with respect to such Holder or the
disposition of such Registrable Securities, an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
(e) Until the expiration of two years after the Final Closing
Date, the Company will not, and will not permit any of its "affiliates"
(as defined in Rule 144) to, resell any of the Securities that have
been reacquired by any of them except pursuant to an effective
registration statement under the Securities Act.
(f) In connection with the Company's obligations with respect
to the registration of New Securities as contemplated by Section 2(a)
(the "Exchange Registration"), if applicable, the Company shall, as
soon as reasonably practicable (or as otherwise specified):
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(i) prepare and file with the Commission such
amendments and supplements to the Exchange Offer Registration
Statement and the prospectus included therein as may be
necessary to effect and maintain the effectiveness thereof for
the periods and purposes contemplated in Section 2(a) hereof
and as may be required by the applicable rules and regulations
of the Commission and the instructions applicable to the form
of the Exchange Offer Registration Statement, and promptly
provide each broker-dealer holding New Securities with such
number of copies of the prospectus included therein (as then
amended or supplemented), in conformity in all material
respects with the requirements of the Securities Act and the
Trust Indenture Act and the rules and regulations of the
Commission thereunder, as such broker-dealer reasonably may
request for use in connection with resales of New Securities;
(ii) for a period of 180 days from the date on which
the Exchange Offer Registration Statement is declared
effective (the "180 Day Period"), promptly notify each
broker-dealer that has requested or received copies of the
prospectus included in the Exchange Offer Registration
Statement, and confirm such advice in writing, (A) when any
prospectus amendment or supplement or post-effective amendment
to the Exchange Offer Registration Statement has been filed,
and, with respect to any post-effective amendment to the
Exchange Offer Registration Statement, when the same has
become effective, (B) of the issuance by the Commission of any
stop order suspending the effectiveness of the Exchange Offer
Registration Statement or the initiation or threatening of any
proceedings for that purpose, (C) of the receipt by the
Company of any notification with respect to the suspension of
the qualification of the New Securities for sale in any United
States jurisdiction or the initiation or threatening in
writing of any proceeding for such purpose, or (D) at any time
when a prospectus is required to be delivered under the
Securities Act, that the Exchange Offer Registration
Statement, prospectus, prospectus amendment or supplement or
post-effective amendment does not conform in all material
respects to the applicable requirements of the Securities Act
and the Trust Indenture Act and the rules and regulations of
the Commission thereunder.
(iii) in the event that the Company would be
required, pursuant to Section 3(f)(ii)(D), to notify any
broker-dealers holding New Securities, promptly prepare and
furnish to each such Holder a reasonable number of copies of a
prospectus supplemented or amended so that, as thereafter
delivered to purchasers of such New Securities, such
prospectus shall conform in all material respects to the
applicable requirements of the Securities Act and the Trust
Indenture Act and the rules and regulations of the Commission
thereunder or notify such broker-dealers that the offer and
sale of New Securities pursuant to the Exchange Offer
Registration Statement may continue;
(iv) use its reasonable best efforts to obtain the
withdrawal of any order suspending the effectiveness of the
Exchange Offer Registration Statement or any post-effective
amendment thereto at the earliest practicable date;
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(v) use its reasonable best efforts to register or
qualify the New Securities under the securities laws or blue
sky laws of such jurisdictions as are contemplated by
Section 2(a) no later than the commencement of the Exchange
Offer, provided, however, that the Company shall not be
required for any such purpose to (1) qualify as a foreign
corporation in any jurisdiction wherein it would not
otherwise be required to qualify but for the requirements of
this Section 3(f)(v), (2) consent to general service of
process in any such jurisdiction or (3) make any changes to
its certificate of incorporation or by-laws or any agreement
between it and its stockholders; and
(vi) make generally available to its security holders
as soon as practicable but no later than eighteen months after
the effective date of such registration statement, an earning
statement of the Company and its subsidiaries complying with
Section 11(a) of the Securities Act (including, at the option
of the Company, Rule 158 thereunder).
In case of any of the foregoing obligations is dependent upon
information provided or to be provided by a party other than the
Company, such obligation shall be subject to the provision of such
information.
4. Registration Expenses.
The Company agrees to bear and to pay or cause to be paid promptly upon
request being made therefor all expenses incident to the Company's performance
of or compliance with this Agreement, including (a) all Commission and any NASD
registration and filing fees and expenses, (b) all fees and expenses in
connection with the qualification of the Securities or New Securities for
offering and sale under the state securities and blue sky laws referred to in
Section 3(b)(viii) and Section 3(f)(v) hereof, including reasonable fees and
disbursements of one counsel for the placement or sales agent or underwriters,
if any, in connection with such qualifications, (c) all expenses relating to the
preparation, printing, distribution and reproduction of each registration
statement required to be filed hereunder, each prospectus included therein or
prepared for distribution pursuant hereto, each amendment or supplement to the
foregoing, the certificates representing the Securities and all other documents
relating hereto, (d) fees and expenses of the Trustee under the Indenture, and
of any escrow agent or custodian, (e) internal expenses (including all salaries
and expenses of the Company's officers and employees performing legal or
accounting duties), (f) fees, disbursements and expenses of counsel and
independent certified public accountants of the Company (including the expenses
of any opinions or "cold comfort" letters required by or incident to such
performance and compliance) and (g) fees, expenses and disbursements of any
other persons, including special experts, retained by the Company in connection
with such registration (collectively, the "Registration Expenses"). To the
extent that any Registration Expenses are incurred, assumed or paid by any
Holder of Registrable Securities or any placement or sales agent therefor or
underwriter thereof, the Company shall reimburse such person for the full amount
of the Registration Expenses so incurred, assumed or paid promptly after receipt
of a documented request therefor. Notwithstanding the foregoing, the Holders of
the Registrable Securities being registered shall pay all agency fees and
commissions and underwriting discounts and commissions attributable to the sale
of such Registrable Securities and the fees and disbursements of any counsel or
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other advisors or experts retained by such Holders (severally or jointly), other
than the counsel and experts specifically referred to above.
5. Representations and Warranties.
The Company represents and warrants to, and agrees with, the Holders
from time to time of Registrable Securities that:
(a) Each registration statement covering Registrable
Securities and each prospectus (including any preliminary or summary
prospectus) contained therein or furnished pursuant to Section 3(c) or
Section 3(f) hereof and any further amendments or supplements to any
such registration statement or prospectus, when it becomes effective or
is filed with the Commission, as the case may be, and, in the case of
an underwritten offering of Registrable Securities, at the time of the
closing under the underwriting agreement relating thereto, will conform
in all material respects to the applicable requirements of the
Securities Act and the Trust Indenture Act and the rules and
regulations of the Commission thereunder and will not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and during the 180 Day Period and subject to Section 2(b)
hereof, other than from (i) such time as a notice has been given to
Holders of Registrable Securities pursuant to Section 3(b)(iv)(B) or
(D) or Section 3(f)(ii)(B) or (D) hereof until (ii) such time as the
Company furnishes an amended or supplemented prospectus pursuant to
Section 3(c) or Section 3(f)(iii) hereof or such time as the Company
provides notice that offers and sales pursuant to the Exchange Offer
Registration Statement or the Shelf Registration, as the case may be,
may continue, each such registration statement, and each prospectus
(including any summary prospectus) contained therein or furnished
pursuant to Section 3(b) or Section 3(f) hereof, as then amended or
supplemented, will conform in all material respects to the applicable
requirements of the Securities Act and the Trust Indenture Act and the
rules and regulations of the Commission thereunder; provided, however,
that this representation and warranty shall not apply to any statements
or omissions made in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of a Holder of
Registrable Securities or any underwriter expressly for use therein.
(b) Any documents incorporated by reference in any prospectus
referred to in Section 5(a) hereof, when they become or became
effective or are or were filed with the Commission, as the case may be,
will conform or conformed in all material respects to the requirements
of the Securities Act or Exchange Act, as applicable, and none of such
documents will contain or contained an untrue statement of a material
fact or will omit or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Company
by a Holder of Registrable Securities or any underwriter expressly for
use therein.
(c) The compliance by the Company with all of the provisions
of this Agreement and the consummation of the transactions herein
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contemplated will not contravene any provision of applicable law or
the certificate of incorporation or by-laws of the Company or, except
to the extent that any such contravention would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole,
any indenture or instrument relating to indebtedness for money
borrowed or any agreement to which the Company is a party or any
order, rule, regulation or decree of any court or governmental agency
or authority located in the United States having jurisdiction over the
Company or any property of the Company; and, to the best knowledge of
the Company, no consent, authorization or order of, or filing or
registration with, any court or governmental agency or authority is
required for the consummation by the Company of the transactions
contemplated by this Agreement, except the registration under the
Securities Act contemplated hereby, qualification of the Indenture
under the Trust Indenture Act and such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or blue sky laws.
(d) This Agreement has been duly authorized, executed and
delivered by the Company.
6. Indemnification.
(a) Indemnification by the Company. In connection with a Shelf
Registration, the Company agrees to indemnify and hold harmless each of
the Holders of Registrable Securities included in such Shelf
Registration and each person, if any, who controls any such Holder
within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act (each, a "Participant"), from and
against any and all losses, claims, damages and liabilities (including,
without limitation, any legal or other expenses reasonably incurred in
connection with defending or investigating any such action or claim)
caused by any untrue statement or alleged untrue statement of a
material fact contained in such Shelf Registration (as amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto), or caused by any omission or alleged omission to
state therein a material fact necessary to make the statements therein
in the light of the circumstances under which they were made not
misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information furnished
to the Company in writing by any Holder expressly for use therein;
provided, however, that, the indemnity agreement contained in this
subsection (a) shall not inure to the benefit of any Participant on
account of any such losses, claims, damages or liabilities (or actions
in respect thereof) arising from the sale of the Registrable Securities
by or through such Holder to any person if a copy of the final
prospectus as it then may be amended or supplemented (exclusive of the
incorporated documents) shall not have been given or sent to such
person with or prior to the written confirmation of the sale involved
to the extent that the final prospectus as so amended or supplemented
would have cured the defect in such document giving rise to such
losses, claims, damages or liabilities.
(b) Indemnification by Participants. Each Participant agrees,
severally and not jointly, to indemnify and hold harmless the Company,
its directors, its officers and each person, if any, who controls the
Company within the meaning of either Section 15 of the Securities Act
or Section 20 of the Exchange Act to the same extent as the foregoing
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indemnity from the Company to such Participant, but only with reference
to information furnished to the Company in writing by a Holder or a
Holder controlled by such Participant expressly for use in the Shelf
Registration or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity may be sought pursuant to Section 6(a) or (b), such
person (the "indemnified party") shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying party") in
writing. The indemnifying party shall be entitled to participate in
such proceeding and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense
thereof with counsel reasonably satisfactory to the indemnified party
and, upon such assumption, shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any
indemnified party shall have the right to retain its own counsel, but
the fees and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or
(ii) the named parties to any such proceeding (including any impleaded
parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between
them. It is understood that the indemnifying party shall not, in
respect of the legal expenses of any indemnified party in connection
with any proceeding or related proceedings in the same jurisdiction, be
liable for the fees and expenses of more than one separate firm (in
addition to any local counsel) for all such indemnified parties and
that all such fees and expenses shall be reimbursed as they are
incurred. The indemnifying party shall not be liable for any settlement
of any proceeding effected without its written consent, but if settled
with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from
and against any loss or liability by reason of such settlement or
judgment. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending
or threatened proceeding in respect of which any indemnified party is
or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on
claims that are the subject matter of such proceeding.
(d) The indemnity provisions contained in this Section 6 and
the representations, warranties and other statements of the Company
contained in this Agreement shall remain operative and in full force
and effect regardless of (i) any termination of this Agreement, or (ii)
any investigation made by or on behalf of any Holder or any participant
controlling any Holder or by or on behalf of the Company, its officers
or directors or any person controlling the Company.
7. Rule 144.
The Company covenants to the Holders of Registrable Securities that the
Company shall use its reasonable best efforts to timely file the reports
required to be filed by it under the Exchange Act or the Securities Act
(including the reports under Section 13 and 15(d) of the Exchange Act referred
to in subparagraph (c)(1) of rule 144 adopted by the Commission under the
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Securities Act) and the rules and regulations adopted by the Commission
thereunder, all to the extent required from time to time to enable such Holder
to sell Registrable Securities without registration under the Securities Act
within the limitations of the exemption provided by Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or any similar or
successor rule or regulation hereafter adopted by the Commission. Upon the
request of any Holder of Registrable Securities in connection with that Holder's
sale pursuant to Rule 144, the company shall deliver to such Holder a written
statement as to whether it has complied with such requirements.
8. Remedies
The Company agrees that monetary damages (including Additional Amounts
contemplated hereby) would not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of this Agreement and hereby agrees
to waive the defense in any action for specific performance that a remedy at law
would be adequate.
9. Miscellaneous.
(a) No Inconsistent Agreements. The Company represents,
warrants, covenants and agrees that is has not granted, and shall not
grant, registration rights with respect to Registrable Securities which
would be inconsistent with the terms contained in this Agreement.
(b) Notices. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly given if (a)
delivered personally, (b) mailed, first class mail with postage
prepaid, (c) sent by next-day or overnight mail or delivery or (d) sent
by telecopy or telegram, as follows:
(i) If to Holders:
At the address of such Holder as it
appears in the security register
maintained pursuant to the Indenture.
(ii) If to the Company at:
Grand Court Lifestyles, Inc.
Xxx Xxxxxxxxx Xxxxx
Xxxx Xxx, Xxx Xxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Secretary
or, in each case, at such other address as may be specified in writing to the
other parties hereto.
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(c) Parties in Interest. All the terms and provisions of this
Agreement shall be binding upon, shall inure to the benefit of and
shall be enforceable by the Company and the Holders of Registrable
Securities and their respective successors and assigns. In the event
that any transferee of any Holder of Registrable Securities shall
acquire Registrable Securities, in any manner, whether by gift,
bequest, purchase, operation of law or otherwise, such transferee
shall, without any further writing or action of any kind, be deemed a
party hereto for all purposes and such Registrable Securities shall be
held subject to all of the terms of this Agreement, and by taking and
holding such Registrable Securities such transferee shall be entitled
to receive the benefits of, and be conclusively deemed to have agreed
to be bound by and to perform, all of the applicable terms and
provisions of this Agreement.
(d) Survival. The respective indemnities, agreements,
representations, warranties and each other provision set forth in this
Agreement or made pursuant hereto shall remain in full force and effect
regardless of any investigation (or statement as to the results
thereof) made by or on behalf of the Company, any officer, director or
agent of the Company, any Holder of Registrable Securities, any
director, officer or partner of such Holder, any agent or underwriter
or any director, officer or partner thereof, or any controlling person
of any of the foregoing, and shall survive delivery of and payment for
the Registrable Securities and the transfer and registration of
Registrable Securities by such Holder and the consummation of an
Exchange Offer.
(e) LAW GOVERNING. THIS REGISTRATION RIGHTS AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE
OF NEW YORK.
(f) Headings. the descriptive headings of the several Sections
and paragraphs of this Agreement are inserted for convenience only, do
not constitute a part of this Agreement and shall not affect in any way
the meaning or interpretation of this Agreement.
(g) Entire Agreement: Amendments. This Agreement and the other
writings referred to herein (including the Indenture) or delivered
pursuant hereto which from a part hereof contain the entire
understanding of the parties with respect to its subject matter. This
Agreement supersedes all prior agreements and understandings between
the parties with respect to its subject matter. This Agreement may be
amended and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively
or prospectively) only by a written instrument duly executed by the
Company and the Holders of at least a majority in aggregate principal
amount of the Registrable Securities at the time outstanding. Each
holder of any Registrable Securities at the time or thereafter
outstanding shall be bound by any amendment or waiver effected pursuant
to this Section 8(g), whether or not any notice, writing or marking
indicating such amendment or waiver appears on such Registrable
Securities or is delivered to such Holder.
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Agreed to as of the date referred to above.
GRAND COURT LIFESTYLES, INC.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
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