ESCROW AGREEMENT
EPIC VACATION CLUB
This Escrow Agreement is dated for reference purposes December 1, 1998 by
EPIC RESORTS, LLC, a Delaware limited liability company, on behalf of itself and
its subsidiaries and affiliates (collectively and individually "Declarant");
EPIC VACATION CLUB, a Delaware nonprofit corporation ("Club"); and INTERCITY
ESCROW SERVICES, a California corporation, ("Escrow Holder").
1: ASSERTIONS. This Agreement is made with reference to the following facts
and objectives, each of which is a material provision of this Agreement:
1.1 SERVICES. Escrow Holder agrees to provide escrow services to
Declarant and Buyers of Memberships in Club.
1.2 SCOPE. Declarant, Escrow Holder and Declarant's sales agent(s) are
bound by this Escrow Agreement, and each Buyer shall implement the Closing
Conditions in its behalf by signing the Club "Owner Individual Escrow
Instructions" substantially in the form attached hereto as Exhibit A.
1.3 DECLARANT. Declarant acquires Units in Resort Properties which it
leases or transfers to Club for use in the Vacation Ownership Plan.
1.4 CLUB. Club holds and manages the Units for the benefit of its
Owner/Members. Membership in Club includes voting rights to elect directors and
to vote directly on major Club decisions.
1.5 VACATION OWNERSHIP PLAN. Under the Club Vacation Ownership Plan
established by recorded Declarations Declarant has the exclusive right to market
and sell all Memberships in Club and to receive all the proceeds from Membership
sales.
1.6 DECLARATION. Declarant and Club have recorded or will record a
"Declaration of Vacation Ownership Plan (Epic Vacation Club)" ("Declaration")
with respect to each Resort.
1.7 ESCROW ACCOUNT. The Funds associated with the purchase of Memberships
must be placed in an approved escrow account for protection of purchasers until
certain events occur as described below, providing for the release of those
Funds to Declarant ("closing"; see Section 4.2), or the return of those funds
and documents to the purchaser ("no closing"; see Section 4.3).
1.8 TABLE OF CONTENTS.
1: ASSERTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
1.1 Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
1.2 Scope. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
1.3 Declarant. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
1.4 Club . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
1.5 Vacation Ownership Plan. . . . . . . . . . . . . . . . . . . . . . . . . .1
1.6 Declaration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
1.7 Escrow Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
1.8 Table of Contents. . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
2: DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
2.1 Buyer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
2.2 Close and Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
2.3 Closing Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
2.4 Contract Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
2.5 Declarant. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
2.6 Declaration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
2.7 Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
2.8 Sales Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
3: HANDLING FUNDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
3.1 Deposit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
3.2 Escrow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
3.3 Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
3.4 Credit Cards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
4: CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
4.1 Closing Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
4.2 Closing Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
4.3 Release of Funds without a Closing . . . . . . . . . . . . . . . . . . . .5
4.4 Release of Buyer's Funds . . . . . . . . . . . . . . . . . . . . . . . . .6
5: GENERAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
5.1 Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
5.2 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
5.3 Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
5.4 Copies of Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . .6
5.5 Cancellation Charge. . . . . . . . . . . . . . . . . . . . . . . . . . . .6
5.6 Expiration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
5.7 Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
6: SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
EXHIBITS
A Owner Individual Escrow Instructions
B Declarant's Certification
C Compensation to Escrow Company
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2: DEFINITIONS. Unless the context otherwise specifies or requires, the terms
used in this Agreement shall have the meanings set forth in the recorded
Declaration.
2.1 "BUYER" means each person shown as a Buyer, Owner, Member or Purchaser
in a Sales Contract.
2.2 "CLOSE" and "CLOSING" refer to completing the sale of and authorizing
issuance of Memberships to a Buyer, and disbursing the Funds therefrom to
Declarant.
2.3 "CLOSING COSTS" means all costs and expenses of closing a sale, for
example, if applicable: (a) Escrow Holder's fees; (b) postage and handling fees;
and/or (c) filing fees.
2.4 "CONTRACT DOCUMENTS" means, for each Buyer, (a) the Buyer's Sales
Contract and "Owner Individual Escrow Instructions", substantially in the form
of Exhibit A attached hereto, and (b) any written changes to any or all of those
documents if the changes have been signed by the person whose duties are
changed.
2.5 "DECLARANT" means EPIC RESORTS, LLC, a Delaware limited liability
company, or any subsidiary or affiliate of Declarant.
2.5(a) SUBSIDIARY of Declarant is a company of which the Voting
Power is owned, directly or indirectly, and in the aggregate, more than fifty
percent (50%) by Declarant.
2.5(b) AFFILIATE of Declarant is a company which directly or
indirectly controls, is controlled by, or is under common control of, Declarant.
2.6 "DECLARATION" means the recorded "Declaration of Vacation Ownership
Plan (Epic Vacation Club)," which creates the Vacation Ownership Plan and makes
the respective Resort subject thereto, and establishes the number of Points
allocated to each Resort.
2.7 "FUNDS" means any money, creditor charge card vouchers, and negotiable
instruments received before closing from or on behalf of any Buyer or potential
Buyer.
2.8 "SALES CONTRACT" means a "Vacation Owner Agreement" by which a Buyer
purchases a Membership in Club, and which may be revised from time to time by
Declarant and Club, provided it is not inconsistent with the Declaration and
Governing Documents.
3: HANDLING FUNDS.
3.1 DEPOSIT. All Funds received before Closing from or on behalf of
Buyers or prospective Buyers in connection with the purchase of Memberships must
be promptly placed in an escrow account with Escrow Holder. Escrow Holder shall
promptly deposit all funds in a federally insured account with a federal or
state chartered financial institution.
3.2 ESCROW. Escrow Holder will accept and hold any Funds from or for the
Buyer. The Escrow Holder will handle and deliver such Funds as instructed by
the person who provided
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them and this Escrow Agreement. Escrow Holder has no responsibility for
independently verifying any provisions of any document, except as
specifically required herein.
3.3 AFFILIATES. Escrow Holder, Declarant and Club may enter into
Affiliation Escrow Agreements with licensed escrow companies in states other
than California, if necessary to facilitate closings of sales in such states
and/or if required for compliance with timeshare or real estate sales laws,
regulations and regulatory policies.
3.4 CREDIT CARDS. Payments to Declarant by credit card will be promptly
deposited in Declarant's or Declarant's Broker's Trust Account. A check will
then be drawn upon such Trust Account payable to Escrow Company for the amount
of credit card payments for transactions being transmitted to Escrow Company.
Escrow Company does not process credit card payments.
4: CLOSING.
4.1 CLOSING CONDITIONS. Closing of the escrow for the sale of Memberships
shall not occur, and the Buyer's Funds and any Contract Documents in the
possession of Escrow Holder shall not be delivered by the Escrow Holder
according to paragraph 4.2, until after all of the following have occurred:
4.1(a) CANCELLATION PERIOD. The "cancellation period" or
rescission rights period, prescribed by the state(s) having jurisdiction, has
expired.
4.1(b) NOTICE OF NO CANCELLATION. The Escrow Holder has received a
sworn Certification from Declarant, substantially in the form of Exhibit B
attached hereto, signed by its duly authorized representative, that no
cancellation notice was received during the cancellation period from the Buyer
whose funds are being released, or has been received after expiration of such
period but postmarked on a date within the cancellation period.
4.1(c) DECLARATION. Escrow Holder shall have independently
verified that a Declaration has been recorded and remains in effect against
every Epic Vacation Club Resort for which Memberships are being sold.
4.1(d) TITLE INSURANCE. Escrow Holder shall have received copies
of (i) a recorded Sublease, Lease, or Deed showing title to the leasehold or fee
of a Unit in the Club, and (ii) a Policy of Title Insurance insuring title to
each Unit or Resort-in-Club for the purchase price at the time of acquisition.
Escrow Holder must be satisfied that appropriate blanket lien protections
(subordination, release and/or nondisturbance covenants) are fully in place, and
that the statutory period for recordation of all mechanic's lien claims has
expired or the policy of title insurance includes an endorsement insuring the
Club against mechanic's liens.
4.1(e) RECEIPT. Declarant certifies to Escrow Holder that the
Receipt for Public Report, Disclosure Statement and/or other disclosure
document(s) required by the state(s) having jurisdiction, has been signed by
each Buyer listed on Declarant's Certification when such Certification is
delivered to Escrow Company, and each Receipt was dated with the date that such
disclosure document(s) were received by the Buyer.
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4.1(f) OWNER INSTRUCTIONS. Declarant has provided Escrow Holder
with Owner Escrow Instructions signed by the Buyer, substantially in the form
attached hereto as Exhibit A.
4.1(g) FUNDS. Declarant has delivered to Escrow Holder all Funds
received from a Buyer, which shall be in negotiable form and payable, endorsed
or assigned to Escrow Holder.
4.1(h) POINTS AVAILABLE. Escrow Holder shall have determined that
there are sufficient Points available in the Plan for the sales currently being
closed. Escrow Holder may rely on recorded Declarations for the allocations of
Points to respective Resorts and Units as the Resorts and Units are transferred
to the Club and dedicated to the Plan, and rely on recorded transfers of Units
to verify ownership in the Club.
4.1(i) PRECLOSING. No escrows may close initially, for specified
Home Resorts in jurisdictions which have a preclosing sales requirement, until
Memberships comprised of the required Points can close at the same time.
4.1(j) FURNISHINGS. Escrow Holder shall have received a copy of
evidence of lien free conveyance to Club and installation of Unit furnishings
for each Club Unit. Escrow Holder may rely on certification from Club with
evidence of the transfer attached.
4.2 CLOSING PROCEDURES. To close each sale, Escrow Holder will:
4.2(a) Deliver any closing statement, which may be in the form of
Exhibit One to Exhibit B attached hereto, and any other documents to, and do
anything else reasonably required by, Declarant;
4.2(b) Confirm availability of Funds deposited;
4.2(c) Pay or deliver to Declarant all sums of money received by it
under each sale, not to exceed sums actually received and collected upon by
Escrow Holder, in a time, place and manner reasonably specified by Declarant in
writing.
4.3 RELEASE OF FUNDS WITHOUT A CLOSING.
4.3(a) NOTICE OF CANCELLATION. If a Buyer gives a valid Notice of
Cancellation of the Sales Contract, under any applicable law, Declarant shall
promptly notify Escrow Company, and all of the Buyer's Funds shall be returned
directly to the Buyer within 15 days after the Notice of Cancellation is
received. The Sales Contract shall be marked "canceled" and the original
returned to the Buyer.
4.3(b) TERMINATION OF CONTRACT. If a Buyer or Declarant properly
terminates a Sales Contract pursuant to its terms, or if Declarant or a
prospective Buyer terminates a reservation agreement, all of the Buyer's Funds
shall be delivered in accordance with the Contract or reservation agreement.
The Sales Contract or reservation agreement shall be marked "canceled" and the
original returned to the Buyer.
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4.3(c) BUYER DEFAULT. If a Buyer defaults in the performance of
the Buyer's obligations under the Sales Contract, all the Buyer's Funds and
Sales Contracts shall be delivered in accordance with the Sales Contract and the
Owner Individual Escrow Instructions, substantially as attached hereto as
Exhibit A.
4.3(d) SWORN STATEMENTS. If Declarant fails to provide to Escrow
Holder, within six (6) months after expiration of the cancellation period, any
of those items described in paragraphs 4.1(b), (d), (e), (f), and (g) above,
then all of the Buyer's Funds and Sales Contracts (marked "canceled") shall be
returned to the Buyer within 15 days.
4.3(e) 1 YEAR. If an escrow does not close within one year of the
date Buyer signs its Sales Contract, all funds deposited by a non-defaulting
Buyer shall be promptly refunded upon demand by Buyer.
4.4 RELEASE OF BUYER'S FUNDS. This Escrow Agreement explicitly prohibits
the release of Buyer's Funds from escrow to or for the benefit of Declarant or
Sales Agent or anyone else (except by way of refunds to the Buyer) in any
circumstances other than those set forth in this Article 4.
5: GENERAL MATTERS.
5.1 NOTICE. Any notice from Declarant or Escrow Holder to the Buyer must
be given in writing. If more than one person is listed as the Buyer on Owner
Escrow Instructions, the notice may be given to or received from any one of
them. If the Buyer is a corporation or partnership, the notice may be delivered
or mailed to any officer or partner of the Buyer. Notices must be personally
delivered or mailed by certified or registered mail, postage prepaid, addressed
to the person at the address shown for each on the Buyer's Escrow Instructions.
Any party may change its address by sending written notice of the new address to
the other. All notices are considered given when they are deposited in the U.S.
mail, first class postage prepaid, or when personally delivered to the
recipient.
5.2 INTEREST. Any interest earned on Funds placed with the Escrow Holder
will belong to Declarant.
5.3 INDEMNITY. Declarant agrees to indemnify Escrow Holder for losses it
suffers as a result of performing its duties, except for losses due to Escrow
Holder's negligence or misconduct.
5.4 COPIES OF DOCUMENTS. Declarant will provide Escrow Holder with and/or
pay for copies of title reports, recorded Declarations, blanket liens,
nondisturbance agreements and any other documents required by Escrow Holder to
verify statements made under paragraph 4.1 of this Agreement.
5.5 CANCELLATION CHARGE. Upon a cancellation, Declarant must notify
Escrow Holder within ten (10) days of the date of deciding upon or receiving
notice of cancellation whether to deduct from the Buyer's Funds a reasonable
charge for materials received by the Buyer and not returned, and the amount of
such charge. This charge will not exceed $25.00. If deducted the
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charge will be remitted to Declarant. This can only be done in jurisdictions
where allowed, and if provided for in the Sales Contract.
5.6 EXPIRATION. This Agreement shall expire upon 30 days written notice
from one party to all other parties.
5.7 EXHIBITS. The following Exhibits are attached hereto and incorporated
herein by this reference:
A - Owner Individual Escrow Instructions
B - Declarant's Certification
C - Compensation to Escrow Company
6: SIGNATURES. The individuals applying their signatures to this Agreement
warrant that they are signing in a representative capacity for an entity whose
name is set forth immediately above their signature, and that they have been
expressly authorized to sign the Agreement on behalf of such entity.
This Agreement shall be effective upon the date of the latest signature below.
ESCROW HOLDER: DECLARANT:
Dated December 3, 1998 Dated December 1, 1998
INTERCITY ESCROW SERVICES, EPIC RESORTS, LLC, a Delaware
a California corporation limited liability company
License No. 963-5063
By /s/ Xxxxx Xxxxxx By /s/ Xxxxxx X. Xxxxxxx
--------------------------------- ----------------------------------
Xxxxx Xxxxxx, President Xxxxxx X. Xxxxxxx, Manager
00 Xxxx Xxxxxx Xx., Xxx. 000 0000 Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000 King of Xxxxxxx, XX 00000
CLUB:
Dated December 1, 1998
EPIC VACATION CLUB, a
Delaware nonprofit corporation
By /s/Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx, President
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxx xx Xxxxxxx, XX 00000
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EXHIBIT A
TO ESCROW AGREEMENT
OWNER INDIVIDUAL
ESCROW INSTRUCTIONS
EXHIBIT A
TO ESCROW AGREEMENT
OWNER INDIVIDUAL ESCROW INSTRUCTIONS
EPIC VACATION CLUB
Date _______________ Owner Number _____________ Home Resort ____________________
Points _____________ Term: Perpetual / //or _____ Years / /
To: INTERCITY ESCROW SERVICES, a California corporation ("Escrow Holder").
These Escrow Instructions are entered into by and among Club, Developer and
Owner in connection with (a) the Escrow Agreement dated December 1, 1998, by
and among Club, Developer and Escrow Holder, the material parts of which are
included below, and (b) the Vacation Owner Agreement of the same date, by and
among Club, Developer and Owner. Unless the context otherwise requires,
capitalized words herein shall have the meanings set forth in the
"Declaration of Vacation Ownership Plan (Epic Vacation Club - Palm Springs
Marquis Villas)" recorded __________, 1998, as document no. __________,
Riverside County Recorder, California.
1: CLOSING PROCEDURES. To close each sale, Escrow Holder will (a) DELIVER any
closing statement and any other documents to, and do anything else reasonably
required by Developer; (b) CONFIRM availability of Funds deposited; and (c) PAY
to Developer all the sums of money received by it in connection with this sale,
not to exceed sums actually received and collected upon by Escrow Holder.
2: CLOSING CONDITIONS. Close of escrow for the sale of a Membership shall not
occur, the Membership shall not be issued and Owner's Funds shall not be
released by Escrow Holder (collectively "Close of Escrow"), until after all of
the following have occurred:
2.1 PERIOD. The "rescission period" has expired, which will be midnight
of the third calendar day after Owner sips the Vacation Owner Agreement.
2.2 NO NOTICE. Escrow Holder has determined that no notice of rescission
has been received from Owner within the rescission period or after expiration of
such period and postmarked on a date within the rescission period.
2.3 DECLARATION. Escrow Holder shall have independently verified that a
Club Vacation Ownership Plan Declaration has been recorded and remains in effect
against every Club Resort for which Memberships are being sold.
2.4 RESORT TITLE INSURANCE. Escrow Holder shall have received a copy of a
policy of title insurance insuring fee title to each Resort in Developer,
subject to a sublease to the Club from Developer for a term of at least as long
as the term of the Memberships being sold, and Escrow Holder must be satisfied
that appropriate blanket lien protections (subordination, nondisturbance, and
release covenants) are fully in place.
2.5 POINTS. Escrow Holder shall have determined that there are sufficient
Points available in the Vacation Ownership Plan and at the Home Resort for this
sale, as allocated to the
Home Resort by a recorded Declaration, and as confirmed by Club ownership or
leasehold of completed Units in adequate numbers.
2.6 MECHANIC'S LIENS. The statutory period for recordation of all
mechanic's lien claims against the Home Resort has expired or the Club is
provided a policy of title insurance with an endorsement insuring the Club
against mechanic's liens.
2.7 PRECLOSING. No escrows may close initially until Memberships
comprised of at least _________ Points can close at the same time.
2.8 FURNISHINGS. Escrow Holder shall have received a copy of evidence of
lien - free conveyance to Club and installation of Unit furnishings for each
Club Unit.
3: EXPIRATION. If this escrow does not close within one year of the date of
this Agreement, all Funds depositedby a non-defaulting Owner shall be promptly
refunded upon demand by Owner.
4: TITLE. Unless otherwise specified below, the Membership will be held as
sole and separate property by an individual Owner, and in joint tenancy by two
or more Owners. Title to the Membership shall be vested in Owner as its name
appears next to its signature, and as (check one): joint tenants ( ); community
property ( ); tenants in common ( ); sole and separate property ( );
partnership ( ); trust ( ); corporation( ); other ( ) (describe).
OWNER: Date:
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Signature Signature
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Name(s) Address
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City State Zip Phone
DEVELOPER & CLUB: ESCROW HOLDER (Received and
Date: Acknowledged) Date:
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EPIC RESORTS - PALM SPRINGS INTERCITY ESCROW SERVICES, a
MARQUIS VILLAS, LLC, and California corporation
EPIC VACATION CLUB Escrow Lic. No. 963-5063
By By
------------------------------------ ---------------------------------
, Authorized Agent Xxxxx Xxxxxx, President
0000 Xxxxx Xxxxxx, Xxxxx 000 16 Crow Canyon Court, Suite 200
King of Prussia, PA 19406 Xxx Xxxxx, Xxxxxxxxxx 00000
Phone: (000) 000-0000 Phone: (000) 000-0000
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DECLARANT'S CERTIFICATION
EPIC RESORTS, LLC, a Delaware limited liability company ("Declarant")
hereby certifies as to the purchases of Memberships by any Buyers whose names
appear on the list attached hereto as Exhibit One that no cancellation notice
was received from the Buyer during the cancellation period shown in such
Buyer's Owner Individual Escrow Instructions, or has been received after
expiration of such cancellation period and postmarked on a date within the
cancellation period. If a Buyer's Funds have been deposited with Escrow
Holder and such Buyer has duly canceled, such is also certified on Exhibit
One.
Executed under penalty of perjury at __________, on ____________, 19__.
EPIC RESORTS, LLC, a Delaware limited
liability company
By
-------------------------------
, Authorized Agent
Signed and sworn to before me _________________, 19__.
------------------------------------
Notary Public
[seal]
EXHIBIT B
TO ESCROW AGREEMENT
COMPENSATION TO ESCROW COMPANY
FEE SCHEDULE - EPIC VACATION CLUB
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MONTHLY ADMINISTRATIVE FEE
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INCLUDES GENERAL PROGRAM ADMINISTRATION
AND OVERSIGHT, ONGOING MONITORING OF
PROPERTY OWNERSHIP / VESTING AND LIEN
STATUS, MAINTENANCE OF CREDIT / INTERVAL $600.00
BALANCES, PROVISION OF WEEKLY CREDIT /
INTERVAL SUMMARIES, AND MONTHLY REPORT
OF OPEN ESCROWS.
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SALE ESCROW FEE
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NUMBER OF ESCROWS PER WEEKLY CLOSING Fee Per
BATCH Closed
Escrow
-------
1 TO 50 $ 35.00
51 TO 100 30.00
OVER 100 25.00
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MISCELLANEOUS FEES & CHARGES
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CANCELLATION FEE (PER ESCROW) $ 20.00
RETURNED ITEM FEE (PER CHECK) 10.00
WIRE TRANSFER FEE (PER WIRE) 15.00
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EXHIBIT C
TO ESCROW AGREEMENT
