COMPLETION GUARANTY AGREEMENT
Exhibit
10.5
In
order
to induce XXXXX FARGO BANK, NATIONAL ASSOCIATION, a national banking
association, as Administrative Agent under the Construction Loan Agreement
for
the Lenders therein (hereinafter, together with its successors and assigns,
referred to as the "Bank"),
to
make advances to THE CHALETS AT THE LODGE AT VAIL, LLC, a Colorado limited
liability company (hereinafter referred to as the "Borrower"),
in
connection with a construction loan, pursuant to and in accordance with a
Construction Loan Agreement, dated as of even date herewith, by and between
the
Borrower and the Bank (hereinafter referred to as the "Construction
Loan Agreement")
and
evidenced by one or more promissory notes of even date herewith in the maximum
aggregate principal amount not to exceed $123,000,000 (hereinafter referred
to,
collectively, as the "Note"),
the
undersigned, VAIL RESORTS, INC., a Delaware corporation (hereinafter referred
to
as the "Guarantor"),
hereby agrees as follows pursuant to this Completion Guaranty Agreement (this
"Guaranty"):
1. Subject
to the terms hereof, the Guarantor unconditionally and absolutely guarantees
to
the Bank, following an Event of Default by Borrower, completion of construction
of the Improvements (as defined in the Construction Loan Agreement) in the
manner required by the Construction Loan Agreement, the Note and the other
documents and instruments executed in connection therewith (all of the foregoing
being hereinafter collectively referred to as the "Loan Documents").
Specifically, following an Event of Default under the Loan Documents by Borrower
and written request to Guarantor from Bank for performance hereunder, the
Guarantor agrees:
(a) to
perform, complete, and pay for the construction of the Improvements in
accordance with the Plans and Specifications, as such Plans and Specifications
have been or may be modified or amended from time to time, within the time
period allotted therefor (if any) including all extensions thereof, and to
pay
all costs of said construction and all costs associated therewith if the
Borrower shall fail to perform or complete such work as required by the
Construction Loan Agreement;
(b) provided
that such actions by the Bank are authorized pursuant to the Loan Documents
and
provided Guarantor has failed to perform its obligations pursuant to Paragraph
1(a) hereof and such failure is not cured within thirty (30) days after written
notice from the Bank), to reimburse the Bank for all costs and expenses incurred
by the Bank in taking possession of the property described in the deed of trust
securing the Note (hereinafter referred to as the "Property")
and
constructing the Improvements (whether in whole or in part) in accordance with
the Plans and Specifications as approved at the time the Bank takes possession
of the Property subject to such modifications thereto as Bank shall determine
are reasonably necessary provided that the same shall not materially increase
Guarantor’s obligations hereunder (unless as a result of unforeseen site
conditions which have been confirmed by an engineer reasonably acceptable to
Guarantor), including, without limitation, any sums expended in excess of the
principal amount of the Note and whether or not construction is actually
completed;
(c) if
any
mechanic’s or materialman’s liens should be filed, or should attach, with
respect to the Property by reason of the construction undertaken pursuant to
the
Construction Loan Agreement, to cause the removal of such liens within 45 days
after the recording thereof, or the posting of security against the consequences
of their possible foreclosure and the procurement of title insurance policies
or
endorsements insuring the Bank against the consequences of the foreclosure
or
enforcement of such liens, if the Borrower shall fail to take such
actions;
(d) to
pay
the costs and fees of all contractors, architects and engineers employed by
the
Borrower or the Bank (to the extent permitted under the Loan Documents) to
complete the Improvements if said costs and fees are not paid by the
Borrower;
(e) to
pay
the premiums for all policies of insurance required to be furnished by the
Borrower pursuant to the Construction Loan Agreement if such premiums are not
paid by the Borrower and written request from Lender has been given to Guarantor
in connection with any of the foregoing provisions of this Paragraph 1;
and
(f) to
pay
all of the Bank’s reasonable costs and expenses, including, without limitation,
attorney’s fees, incurred in the enforcement of this Guaranty and the provisions
of the Loan Documents covered by this Guaranty.
2. Without
in any way limiting the generality of the foregoing, following written request
from Bank for performance by Guarantor hereunder to complete construction of
the
Improvements, Bank shall make available any undisbursed Commitments which are
not subject to legal impairment to disbursement pursuant to a court order,
a
mechanic’s or materialman’s lien, a bankruptcy proceeding or notice to disburser
and which have been designated in the Project Budget for the payment of Project
Costs directly related to the construction of the Improvements. Such funds
shall
be disbursed only upon satisfaction by Guarantor of all requirements for
disbursement set forth in the Construction Loan Agreement and in accordance
with
the disbursement procedures set forth in the Construction Loan Agreement, and
any amendments thereof, except that Guarantor shall not be required to satisfy
Borrower’s requirements set forth in Sections 6.1 (d) and 6.2 (a) and (c)(i),
(or to cure any Events of Default by Borrower in connection with the matters
addressed in those sections) nor shall Guarantor be obligated to repay to Bank
and Lenders the Loans. In connection with Guarantor’s obligations hereunder,
Guarantor shall be entitled to all rights of Borrower under the Construction
Loan Agreement to reallocate the Borrower Contingency Fund so long as Guarantor
has satisfied the requirements set forth in the preceding sentence. In the
event
that Guarantor does not satisfy all of the requirements for disbursement of
Loans set forth hereinabove or does not comply with the disbursement procedures
set forth in the Construction Loan Agreement in any material respect (and such
failure is not cured within ten (10) days after request by Bank), or any
representation warranty or certification made by Guarantor in the Representation
Agreement shall prove to be false or misleading: (i) Bank shall have no further
obligation to disburse any portion of the Commitments to Guarantor; (ii) Bank
may pursue whatever remedies it may have available at law or in equity for
breach of such terms and conditions; and (iii) at Bank’s option, to be exercised
in its sole discretion, Guarantor shall perform the Completion Obligations
at
its sole cost and expense without any right or recourse to any portion of the
Commitments or Bank may complete the Project itself or cause the Project to
be
completed by a third party and charge the entire cost thereof to Guarantor.
In
connection with the Guarantor’s obligations hereunder, whenever it is necessary
for Guarantor to cure an Event of Default in order to satisfy any such
requirement or procedure for disbursements described herein, Guarantor shall
have such time to cure an Event of Default as may be granted by Bank, in its
sole discretion, but in no event less than ten (10) Business Days after
Guarantor receives a request from Bank under Paragraph 1 for performance
hereunder.
3. This
is a
guaranty of performance and not of collection, and the Bank shall not be
required to take any action against the Borrower (other than providing such
notice to Borrower as is required hereunder or by the Construction Loan
Agreement) or resort to any other security given for the performance of the
Borrower’s obligations as a precondition to the obligations of the Guarantor
hereunder. Nothing herein shall constitute a guaranty of repayment of the Loan
by Guarantor.
4. The
Bank,
in its sole discretion, following the delivery of such notice to Borrower as
is
required hereunder or by the Construction Loan Agreement, may proceed to
exercise any right or remedy which the Bank may have under this Guaranty or
the
Representation Agreement without pursuing or exhausting any right or remedy
which it may have against the Borrower, against any other guarantor or against
any other person or entity, and the Bank may proceed to exercise any right
or
remedy which the Bank may have under this Guaranty without regard to any actions
or omissions of the Borrower or any other person or entity.
5. The
Guarantor authorizes the Bank, without notice to the Guarantor and without
impairing the liability of the Guarantor hereunder, to exercise the Bank’s right
to complete construction in accordance with the Construction Loan Agreement
pursuant to the Plans and Specifications, and, subject to Paragraph 1(b), to
add
expenses incurred during the course of such completion to the Borrower’s
principal obligations under the Loan (as defined in the Construction Loan
Agreement). The Guarantor acknowledges that the Bank has no obligation to
exercise such right, and that the Bank is entitled to make expenditures toward
completion without actually completing construction. The Guarantor waives any
claims, rights or defenses resulting from (a) the Bank’s proper exercise of its
right to complete construction, and (b) the Bank’s failure to complete
construction. The Guarantor agrees that appropriate expenses to complete
construction in accordance with Paragraph 1(b) hereof, include, without
limitation, payments to release liens, payments to contractors, laborers,
materialmen and suppliers, purchase of equipment, services of experts, interest
on amounts advanced, and all additional categories of expense, both hard and
soft, set forth on the Project Budget defined in and attached to the
Construction Loan Agreement.
6. The
obligations of the Guarantor hereunder shall be direct and independent of any
obligations of the Borrower to the Bank and absolute and unconditional
irrespective of the validity, legality or enforceability of any of the Loan
Documents, or any other circumstances (except for those actions of the Bank
in
violation of the Loan Documents or applicable law) which might otherwise
constitute a legal or equitable discharge of a surety or guarantor (including,
without limitation, the finding or conclusions of any proceeding under the
federal Bankruptcy code or of similar present or future federal or state law),
it being agreed that the obligations of the Guarantor hereunder shall not be
discharged except by payment or performance as herein provided.
7. From
and
after the date that Guarantor satisfies the requirements for disbursements
of
Loans as set forth in paragraph 2 hereof, and so long as there shall occur
no
other Event of Default, interest shall accrue on the outstanding principal
balance of the Loans at the LIBOR-Based Rate. In addition, Bank agrees to
forbear pursuit of remedies against Borrower for Events of Default during any
period of time that Guarantor is performing its obligations hereunder and
satisfying the requirements for disbursement of Loans pursuant paragraph 2
hereof.
8. Without
limiting the generality of Paragraph 5 above, the Guarantor hereby consents
and
agrees that, at any time and from time to time:
(a) any
action may be taken under any of the Loan Documents in the exercise of any
remedy, power or privilege therein contained (including, without limitation,
the
acceleration of the maturity of the Note) or otherwise with respect thereto,
or
such remedy, power or privilege may be waived, omitted, or not
enforced;
(b) the
time
for the Borrower’s performance of or compliance with any term, covenant or
agreement on its part to be performed or observed under any of the Loan
Documents may be extended, or such performance or compliance waived, or failure
in or departure from such performance or compliance consented to;
(c) any
of
the Loan Documents (except this Guaranty), or any terms thereof may be amended
or modified in any respect (including without limitation, with respect to
interest on the Note); and
(d) the
Guarantor waives any rights it might otherwise have under Colorado Revised
Statutes §§ 00-00-000 or 00-00-000 (or under any corresponding future
statute or rule of law in any jurisdiction) by reason of any release of fewer
than all of the guarantors of the obligations of the Guarantor hereunder, all
in
such manner and upon such terms as the Bank may deem proper, and without notice
to or further assent from the Guarantor, and all without affecting this Guaranty
or the obligations of the Guarantor hereunder, which shall continue in full
force and effect until all of the obligations of the Guarantor hereunder shall
have been fully paid and performed.
9. The
Guarantor hereby waives notice of acceptance of this Guaranty, presentment,
demand, protest, notice of the occurrence of an event of default under the
Loan
Documents and any other notice of any kind whatsoever, with respect to any
or
all of the obligations of Guarantor hereunder and promptness in making any
claim
or demand hereunder; but no act or omission of any kind shall in any way affect
or impair this Guaranty.
10. The
Guarantor hereby represents and warrants as follows:
(a) The
Guarantor is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction indicated in the first paragraph hereof
and
has all requisite power and authority, corporate or otherwise, to conduct its
business, to own its properties and to execute and deliver, and to perform
all
of its obligations under, this Guaranty.
(b) The
execution, delivery and performance of this Guaranty by Guarantor will not
(i)
require any consent or approval of any person, (ii) violate any provision of
any
law, rule, regulation, order, writ, judgment, injunction, decree, determination
or award presently in effect having applicability to the Guarantor, or (iii)
result in a breach of or constitute a default under any indenture or loan or
credit agreement or any other agreement, lease or instrument to which the
Guarantor is a party or by which Guarantor or its properties may be bound or
affected; and the Guarantor is not in default under any such law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
or
any such indenture, agreement, lease or instrument.
(c) This
Guaranty constitutes a legal, valid and binding obligation of the Guarantor
enforceable against Guarantor in accordance with its terms, except as limited
by
applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other laws or equitable principles relating to or affecting
the
rights of creditors and general principles of equity.
(d) There
are
no actions, suits or proceedings pending or, to the knowledge of the Guarantor,
threatened against or affecting it or any of its assets before any court or
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, which, if determined adversely to the Guarantor, would
have
a material adverse effect on any of his financial condition, properties, or
operations.
(e) No
authorization, consent, approval, license, exemption of or filing or
registration with any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, is or will be necessary
to the valid execution, delivery or performance by the Guarantor of this
Guaranty.
11. No
failure or delay on the part of the Bank in exercising any right, power or
remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy
hereunder. No amendment, modification, termination, or waiver of any provision
of this Guaranty nor consent to any departure by the Guarantor therefrom, shall
in any event be effective unless the same shall be in writing and signed by
the
Bank (and Guarantor as to any modification or amendment of this Guaranty),
and
then such waiver or consent shall be effective only in the specific instance
and
for the specific purpose for which given. No notice or demand on the Guarantor
in any case shall entitle the Guarantor to any other or further notice or demand
in similar or other circumstances.
12. All
notices, requests, demands, statements, authorizations, approvals, directions
and other communications provided for herein shall be given or made in writing
and shall be deemed sufficiently given or served for all purposes as of the
date
(i) when hand delivered (provided that delivery shall be evidenced by a receipt
executed by or on behalf of the addressee), (ii) one (1) Business Day after
being sent by reputable overnight courier service (with delivery evidenced
by
written receipt), or (iii) with a simultaneous delivery by one of the shall
mean
in clause (i) or (ii) above, by facsimile, when sent, with confirmation and
a
copy sent by first class mail, in each case addressed to the intended recipient
at the address specified below; or, as to any party, at such other address
as
shall be designated by such party in a notice to each other party hereto.
Guarantor shall only be required to send notices, requests, demands, statements,
authorizations, approvals, directions and other communications to Bank on behalf
of all of the Lenders.
If
to
Guarantor: Vail
Resorts, Inc.
000
Xxxxxxxxxxx Xxxxxxxx, Xxxxx 0000
Xxxxxxxxxx,
XX 00000
Attention: Xxxxxxx
X. Xxxxx
Facsimile: 000-000-0000
With
a
copy to: Holme
Xxxxxxx & Xxxx LLP
0000
Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx,
XX 00000
Attention: Xxxxxx
X. Xxxx, Esq.
Facsimile: 303-866-0200
If
to
Bank: Xxxxx
Fargo Bank, National Association
Denver
Real Estate Group
0000
X.
Xxxxxx, Xxxxx 0000
Xxxxxx,
XX 00000
Attention: Xx.
Xxxx X. XxXxxxx
Facsimile: 000-000-0000
With
a
copy to: Xxxxx
Xxxxxxx & Xxxxxxxxxx
0000
Xxxxxxxx, Xxxxx 0000
Xxxxxx,
XX 00000
Attention:
Xxxxxx X. Xxxxxxxx, Esq.
Facsimile:
000-000-0000
Bank
or
Guarantor may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications.
13. The
Guarantor hereby waives and agrees not to assert or take advantage of any duty
on the part of the Bank to disclose to the Guarantor any facts Bank may now
or
hereafter know about the Borrower, regardless of whether the Bank has reason
to
believe that any such facts materially increase the risk beyond that which
the
Guarantor intends to assume or has reason to believe that such facts are unknown
to the Guarantor or has a reasonable opportunity to communicate such facts
to
the Guarantor, it being understood and agreed that the Guarantor is fully
responsible for being and keeping informed of the financial condition of the
Borrower and of any and all circumstances bearing the risk of non-payment on
any
obligations hereby guaranteed.
14. The
Guarantor will file all claims against the Borrower in any bankruptcy or other
similar proceedings in which the filing of claims is required by law upon any
indebtedness of the Borrower to the Guarantor and will assign to the Bank all
rights of the Guarantor thereunder. In all such cases, whether in
administration, bankruptcy or otherwise, the person or persons authorized to
pay
such claim shall pay to the Bank the full amount thereof and to the full extent
necessary for that purpose, the Guarantor hereby assigns to the Bank all of
the
Guarantor’s rights to any such payments or distributions to which the Guarantor
would otherwise be entitled; provided that the Bank shall thereafter be
obligated to deliver to Guarantor any payments or distributions so received
by
the Bank in excess of the amounts due from Guarantor to the Bank
hereunder.
15. Except
to
the extent permitted by the Loan Agreement, to the extent that the Guarantor
receives any payments, distributions or any other consideration with respect
to
any shares, debentures or partnership interests of the Borrower however
described, the Guarantor shall immediately pay over and deliver such payments,
distributions or other consideration to the Bank to the extent that such
payments, distributions or other consideration were made in contravention of
the
Loan Documents.
16. By
execution hereof, the Guarantor certifies to the Bank that the Guarantor has
received a copy of the Construction Loan Agreement and all other Loan Documents
in execution form and represents that Guarantor is knowledgeable of the contents
thereof.
17. Wherever
possible each provision of this Guaranty shall be interpreted in such manner
as
to be effective and valid under applicable law, but if any provision of this
Guaranty shall be prohibited by or invalid under such law, such provision shall
be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this
Guaranty.
18. The
Guarantor hereby represents and agrees that this is a continuing guaranty and
(a) shall remain in full force and effect until the Loan has been repaid in
full and the Commitments terminated or until such time as the Project reaches
Completion (as defined in the Construction Loan Agreement), so long as
sufficient Loan funds remain available under the Loan Budget to cover all of
the
punch list items remaining to be completed and thereupon Bank shall provide
written confirmation to Guarantor of termination hereof in such form as is
reasonably requested by Guarantor, (b) shall be governed by, and construed
in
accordance with, the laws of the State of Colorado, (c) shall be binding upon
the Guarantor, its successors, and assigns, and (d) shall inure to the
benefit of and be enforceable by the Bank and its respective successors,
transferees and assigns. Without limiting the generality of the foregoing clause
(d), the Bank may assign or otherwise transfer the Note held by it to any other
person or entity, and such subsequent holder of the Note shall thereupon become
vested with all the powers and rights in respect thereof granted to the Bank
herein or otherwise.
19. The
Guarantor shall furnish to the Bank as and when required by the Construction
Loan Agreement the financial statements required to be furnished by the
Guarantor.
20. The
Guarantor shall indemnify and hold the Bank harmless from any loss, cost, claim
or expense (including, without limitation, attorneys’ fees) suffered by the Bank
as the result of a claim by third party arising from any failure by the Borrower
to return any xxxxxxx money deposits made by purchasers under the Purchase
Contracts (as defined in the Construction Loan Agreement) as required by the
terms of such Purchase Contracts. Guarantor’s liability under this Paragraph 20
is in addition to the sums referenced in Paragraph 1 above.
21. Both
the
Guarantor and the Bank hereby waives any right to jury trial of any claim,
cross-claim or counter-claim relating to or arising out of or in connection
with
this Guaranty.
22. FOR
PURPOSES OF ANY ACTIONS RELATING TO THIS GUARANTY, THE GUARANTOR AND THE BANK
CONSENT TO THE PERSONAL JURISDICTION OF THE STATE AND FEDERAL COURTS OF THE
STATE OF COLORADO.
23. This
Guaranty may be executed in any number of counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument.
[REMAINDER
OF PAGE INTENTIONALLY BLANK]
SIGNED
AND DELIVERED as of the 19th
day of
March, 2007.
GUARANTOR:
VAIL
RESORTS, INC.,
a
Delaware corporation
By:
/s/
Xxxxxxx X. Xxxxx
Xxxxxxx
X. Xxxxx
Senior
Executive Vice President
BANK:
XXXXX
FARGO BANK,
NATIONAL
ASSOCIATION,
a
national banking association
By:
/s/
Xxxx X. XxXxxxx
Name: Xxxx
X. XxXxxxx
Title:
Senior Vice President
