Exhibit 10.2(d)
GUARANTY AGREEMENT
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WHEREAS, the execution of this Guaranty Agreement is a condition to
LEISURE CENTERS LLC-1, a Texas limited liability company ("Borrower"),
borrowing money from BANK UNITED, a federal savings bank ("Lender"), in the
aggregate principal amount of SEVEN MILLION THREE HUNDRED THOUSAND AND
NO/100 DOLLARS ($7,300,000.00), evidenced by that certain Promissory Note
described below.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the undersigned, GRAND COURT LIFESTYLES,
INC., a Delaware corporation(the "Guarantor"), hereby irrevocably and
unconditionally guarantees to Lender the prompt payment and performance of
the Guaranteed Obligations (hereinafter defined), this Guaranty Agreement
being upon the following terms:
1. The term "Guaranteed Obligations," as used herein, consists of:
(a) that certain Promissory Note ("Note") of even date herewith, in the
original principal amount of $7,300,000.00, executed by Borrower and
payable to the order of Lender; (b) interest on any of the indebtedness
described in (a) preceding; (c) any renewal or extension of the
indebtedness described in (a) through (b) preceding, or any part thereof;
(d) all other Obligations of Borrower to Lender under that certain Loan
Agreement ("Loan Agreement") of even date herewith; (e) all other
Obligations of Borrower to Lender under the Loan Documents as that term is
defined in the Loan Agreement; and (f) completion of construction of the
improvements to the Property, as hereinafter defined, in compliance with
the plans and specifications approved by Lender and all applicable zoning
and building codes.
2. This instrument shall be an absolute, continuing, irrevocable,
and unconditional guaranty, of payment and performance and not a guaranty
of collection, and Guarantor shall remain liable on its obligations
hereunder until the payment and performance in full of the Guaranteed
Obligations.
3. If Guarantor becomes liable for any indebtedness owing by
Borrower to Lender by endorsement or otherwise, other than under this
Guaranty Agreement, such liability shall not be in any manner impaired or
affected hereby, and the rights of Lender hereunder shall be cumulative of
any and all other rights that Lender may ever have against Guarantor. The
exercise by Lender of any right or remedy hereunder or under any other
instrument, or at law or in equity, shall not preclude the concurrent or
subsequent exercise of any other right or remedy.
4. In the event of default (and the expiration of any applicable
notice and grace periods and written notice of same from Lender to
Guarantor) by Borrower in payment or performance of the Guaranteed
Obligations, or any part thereof, when such Guaranteed Obligations becomes
due, whether by its terms, by acceleration, or otherwise, Guarantor shall
promptly pay the amount due thereon to Lender upon written demand in lawful
money of the United States and it shall not be necessary for Lender, in
order to enforce such payment by Guarantor, first to institute suit or
exhaust its remedies against Borrower or others liable on such Guaranteed
Obligations, or to enforce any rights against any collateral which shall
ever have been given to secure such Guaranteed Obligations.
5. Guarantor hereby agrees that its obligations under this Guaranty
Agreement shall not be released, diminished, impaired, reduced, or affected
by the occurrence of any reason or event, including, without limitation,
one or more of the following events, whether or not with notice to or the
consent of Guarantor: (a) the taking or accepting of collateral as
security for any or all of the Guaranteed Obligations or the release,
surrender, exchange, or subordination of any collateral now or hereafter
securing any or all of the Guaranteed Obligations; (b) any partial release
of the liability of Guarantor hereunder, or the release of any other
guarantor from liability for any or all of the Guaranteed Obligations; (c)
any disability of Borrower, or the dissolution, insolvency, or bankruptcy
of Borrower, Guarantor, or any party at any time liable for the payment of
any or all of the Guaranteed Obligations; (d) any renewal, extension,
modification, waiver, amendment, or rearrangement of any or all of the
Guaranteed Obligations or any instrument, document, or agreement
evidencing, securing, or otherwise relating to any or all of the Guaranteed
Obligations; (e) any adjustment, indulgence, forbearance, waiver, or
compromise that may be granted or given by Lender to Borrower, Guarantor,
or any other party ever liable for any or all of the Guaranteed
Obligations; (f) any neglect, delay, omission, failure, or refusal of
Lender to take or prosecute any action for the collection of any of the
Guaranteed Obligations or to foreclose or take or prosecute any action in
connection with any instrument, document, or agreement evidencing,
securing, or otherwise relating to any or all of the Guaranteed
Obligations; (g) the unenforceability or invalidity of any or all of the
Guaranteed Obligations or any instrument, document, or agreement
evidencing, securing, or otherwise relating to any or all of the Guaranteed
Obligations; (h) any payment by Borrower to Lender is determined by a court
to constitute a paws or if for any other reason Lender is required to
refund such payment or pay the amount thereof to someone else; (i) the
settlement or compromise of any of the Guaranteed Obligations; (j) the
failure of Lender to perfect or continue any security interest or lien
securing any or all of the Guaranteed Obligations; or (k) the failure of
Lender to preserve, protect, maintain, or insure any collateral securing
any or all of the Guaranteed Obligations.
6. Guarantor represents and warrants to Lender as follows:
(a) Guarantor has the power and authority to execute, deliver
and perform its obligations under this Guaranty Agreement and this
Guaranty Agreement constitutes the legal, valid and binding obligation
of Guarantor, enforceable against Guarantor in accordance with its
terms, except as limited by bankruptcy, insolvency, or other laws of
general application relating to the enforcement of creditor's rights.
(b) The execution, delivery, and performance by Guarantor of
this Guaranty Agreement do not and will not violate any law or any
order of any court, governmental authority or arbitrator and do not
and will not conflict with, result in a breach of, or constitute a
default under, or result in the imposition of any lien upon any assets
of Guarantor pursuant to the provisions of any indenture, mortgage,
deed of trust, security agreement, franchise, permit, license, or
other instrument or agreement to which Guarantor or its properties is
bound.
(c) No authorization, approval, or consent of, and no filing or
registration with, any court, governmental authority, or third party
is necessary for the execution, delivery, or performance by Guarantor
of this Guaranty Agreement or the validity or enforceability thereof.
7. Guarantor covenants and agrees that, as long as the Guaranteed
Obligations or any part thereof is outstanding:
(a) Guarantor shall furnish management prepared financial
statements to Lender for each fiscal quarter which statements shall be
due thirty (30) days after the end of each fiscal quarter. Guarantor
shall also furnish to Lender audited annual financial statements
beginning with the fiscal year ending January 31, 1997 containing
balance sheets (reflecting, without limitation, all contingent
liabilities), income statements and statements of changes in financial
position (reflecting, without limitation, cash flow changes) as at the
end of such fiscal year and for the 12-month period then ended, in
each case setting forth in comparative form the figures for the
preceding fiscal year. All financial statements will be prepared in
reasonable detail, and all of the above prepared in accordance with
GAAP, consistently followed and applied and containing only
qualifications acceptable to Lender, in Lender's sole discretion.
Guarantor's financial statements shall be prepared by the authorized
officers of each familiar with and knowledgeable of the information
therein presented and responsible for the supervision of the
preparation of said financial statements for Guarantor.
(b) Within sixty days after the filing of Guarantor's tax
return, Guarantor shall furnish Lender with a copy of Guarantor's
United States income tax return, as filed with the Internal Revenue
Service, together with any and all exhibits and schedules filed in
connection therewith, beginning with the tax year ending January 31,
1997, and continuing annually thereafter.
(c) Guarantor will furnish promptly to Lender written notice of
the occurrence of any default under this Guaranty Agreement or an
Event of Default under the Loan Documents of which Guarantor has
knowledge.
(d) Guarantor will furnish promptly to Lender such additional
information concerning Guarantor as Lender may reasonably request.
(e) Guarantor will obtain at any time and from time to time all
authorizations, consents or approvals as shall now or hereafter be
necessary or desirable under all applicable laws or regulations or
otherwise in connection with the execution, delivery and performance
of this Guaranty Agreement and will promptly furnish copies thereof to
Lender.
8. Upon the occurrence of an Event of Default (as defined in the
Loan Agreement), Lender shall have the right to set off and apply against
this Guaranty Agreement or the Guaranteed Obligations or both, without
notice to Guarantor, any and all deposits (general or special, time or
demand, provisional or final) or other sums at any time credited by or
owing from Lender to Guarantor whether or not the Guaranteed Obligations is
then due and irrespective of whether or not Lender shall have made any
demand under this Guaranty Agreement. As security for this Guaranty
Agreement and the Guaranteed Obligations, Guarantor hereby grants Lender a
security interest in all money, instruments, and other property of
Guarantor now or hereafter held by Lender, including, without limitation,
property held in safekeeping. In addition to Lender's right of setoff and
as further security for this Guaranty Agreement and the Guaranteed
Obligations, Guarantor hereby grants Lender a security interest in all
deposits (general or special, time or demand, provisional or final) and all
other accounts of Guarantor now or hereafter on deposit with or held by
Lender and all other sums at any time credited by or owing from Lender to
Guarantor. The rights and remedies of Lender hereunder are in addition to
other rights and remedies (including, without limitation, other rights of
setoff) which Lender may have.
9. All present and future indebtedness of Borrower to Guarantor is
hereby subordinated to the Guaranteed Obligations (except for management
fees paid or to be paid by Borrower to Guarantor for leasing and managing
the property prior to the occurrence and continuance of an Event of Default
under the Loan Documents). All sums paid to Guarantor on account of such
present and future indebtedness shall be held in trust by Guarantor for the
benefit of Lender and upon demand shall forthwith be paid to Lender without
affecting the liability of Guarantor under this Guaranty Agreement. Upon
the request of Lender, Guarantor shall execute, deliver, and endorse to
Lender such documents and instruments as Lender deems reasonably necessary
or appropriate to perfect, preserve, and enforce its rights hereunder.
10. No amendment or waiver of any provision of this Guaranty
Agreement 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
Lender. No failure on the part of Lender to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise hereunder preclude any other or
further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided
by law.
11. If any acknowledgment or new promise, whether by payment of
principal or interest or otherwise and whether by Borrower or Guarantor,
with respect to any of the Guaranteed Obligations shall be made, the
statute of limitations on any of the Guaranteed Obligations shall run from
the date of such acknowledgment or new promise and, if the period of such
statute of limitations shall have expired, such acknowledgement or new
promise shall prevent the operation of such statute of limitations.
12. This Guaranty Agreement is for the benefit of Lender and its
successors and assigns, and in the event of an assignment of the Guaranteed
Obligations, or any part thereof, the rights and benefits hereunder, to the
extent applicable to the Obligations so assigned, may be transferred with
such Obligations. This Guaranty Agreement is binding not only on
Guarantor, but on Guarantor's successors and assigns.
13. Guarantor recognizes that Lender is relying upon this Guaranty
Agreement and the undertaking of Guarantor hereunder in making a loan to
Borrower under the Loan Documents and further recognizes that the execution
and delivery of this Guaranty Agreement is a material inducement to Lender
in entering into the Loan Agreement and the Loan Documents.
14. This Guaranty Agreement is executed and delivered as an incident
to a lending transaction performable in Xxxxxx County, Texas, and shall be
governed by and construed in accordance with the laws of the State of
Texas. Venue in any dispute relating to this Guaranty Agreement, whether
in federal or state court, shall be laid in Xxxxxx County, Texas.
15. Guarantor shall pay on demand all reasonable attorneys' fees and
all other costs and expenses incurred by Lender in connection with the
preparation, enforcement, or collection of this Guaranty Agreement.
16. Except as herein provided, Guarantor hereby waives promptness,
diligence, demand of payment, notice of acceptance of this Guaranty
Agreement, presentment, notice of protest, notice of dishonor, notice of
the incurring by Borrower of additional Obligations, and all other notices
and demands with respect to the Guaranteed Obligations and this Guaranty
Agreement.
17. Guarantor acknowledges that this Guaranty Agreement is executed
in connection with the Loan Agreement and that Guarantor is aware of the
Obligations of Borrower and the terms thereunder. Guarantor agrees that
Lender may exercise any and all rights granted to it under the Loan
Documents without affecting the validity or enforceability of this Guaranty
Agreement.
18. Guarantor subordinates all claims, dirct or indirect, absolute
or contingent, against Borrower arising from or relating to this Guaranty
Agreement or Guarantor's performance hereunder to the rights of Lender
to collect the Guaranteed Obligations. Without limiting the foregoing,
Guarantor subordinates all rights of reimbursement, exoneration,
indemnification and/or contribution from Borrower for any payment by
Guarantor under this Guaranty to the right of Lender to collect the
Guaranteed Obligations, and agrees not to institute any action or to
attempt to collect from the Borrower any such claim or claims until such
time as the Guaranteed Obligations are paid in full. Guarantor waives
all right of subrogation to the claims of Lender which may otherwise
arise from such payment until such time as the Guaranteed Obligations
have been paid in full.
19. Guarantor hereby expressly waives any right to trial by jury in
any action or legal proceeding arising out of or relating to the Loan
Documents on the transactions contemplated thereby or hereby.
20. Guarantor acknowledges and agrees that the consideration received
and to be received by Guarantor as a result of Borrower and Lender entering
into the Loan Documents and Guarantor executing and delivering this
Guaranty Agreement is fair, reasonable and/or adequate consideration, and
such liability and obligation and the Loan Documents has benefitted or may
reasonably be expected to benefit Guarantor directly or indirectly.
21. Notwithstanding the provisions of Sections 51.003, 51.004, and
51.005 of the Texas Property Code (as same may be amended from time to
time), and to the extent permitted by law, Guarantor agrees that Lender
shall be entitled to seek a deficiency judgment from Borrower and Guarantor
and any other party obligated on the Note or guaranty of the Note equal to
the difference between the amount owing on the Note and the amount for
which the property described in the Deed of Trust ("Property") was sold
pursuant to a judicial or nonjudicial foreclosure sale (if Lender elects to
foreclose the Property).
Guarantor expressly recognizes that this Section shall constitute a
waiver of the above cited provisions of the Texas Property Code which would
otherwise permit Borrower and Guarantor and other persons against whom
recovery of the deficiency is sought or Guarantor independently (even
absent the initiation of deficiency proceedings against him) to present
competent evidence of the fair market value of the Property as of the date
of foreclosure and offset against any deficiency the amount by which the
foreclosure sale price is determined to be less than the fair market value.
Guarantor further recognizes and agrees that this waiver will create
an irrebuttable presumption that the foreclosure sale price is equal to the
fair market value of the Property for purposes of calculating deficiencies
owed by the Borrower and Guarantor, other borrowers on the Note, guarantors
and others against whom recovery of a deficiency is sought.
Alternatively, in the event this Section is determined by a court of
competent jurisdiction to be unenforceable, the following shall be the
basis for the finder of fact's determination of fair market value of the
Property as of the date of foreclosure sale in proceedings governed by
Sections 51.003, 51.004, and 51.005 of the Texas Property Code (as amended
from time to time):
(a) The Property shall be valued in an "as is" condition as of
the date of the foreclosure sale, without any assumption or
expectation that the Property will be repaired or improved in any
manner before a resale of the Property after foreclosure;
(b) The valuation shall be based upon an assumption that the
foreclosure purchaser desires a prompt resale of the Property for cash
promptly (but no later than twelve months) following the foreclosure
sale;
(c) All reasonable closing costs customarily borne by the seller
in a commercial real estate transaction should be deducted from the
gross fair market value of the Property, including, without
limitation, brokerage commissions, title insurance, a survey of the
Property, tax prorations, attorney's fees, and marketing costs;
(d) The gross fair market value of the Property shall be further
discounted to account for any estimated holding costs associated with
maintaining the Property pending sale, including, without limitation,
utilities expenses, property management fees, taxes, and assessments
(to the extent not accounted for in (c) above) and other maintenance
fees; and
(e) Any expert opinion testimony given or considered with a
determination of the fair market value of the Property must be given
by persons having at least five years experience in appraising
property similar to the Property and who have conducted and prepared a
complete written appraisal of the Property taking into consideration
the factors set forth above.
22. To the maximum extent not prohibited by law, any controversy,
dispute or claim arising out of, in connection with, or relating to this
Agreement, including but not limited to any claim based on or arising from
an alleged tort or an alleged breach of any agreement contained in this
Agreement, shall, at the request of any party hereto (either before or
after the commencement of judicial proceedings), be settled by arbitration
pursuant to Title 9 of the United States Code, which the parties hereto
acknowledge and agree applies to the transaction involved herein, and in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association (the "AAA"). In any such arbitration proceeding:
(i) all statutes of limitations which would otherwise be applicable shall
apply; and (ii) the proceeding shall be conducted in Houston, Texas, by a
single arbitrator, if the amount in controversy is $1 Million or less, or
by a panel of three arbitrators if the amount in controversy is over $1
Million. All arbitrators shall be selected by the process of appointment
from a panel pursuant to Section 13 of the AAA Commercial Arbitration Rules
and each arbitrator shall have AAA acknowledged expertise in the subject
matter of the controversy, dispute or claim. Any award rendered in any
such arbitration proceeding shall be final and binding, and judgment upon
any such award may be entered in any court having jurisdiction.
If Guarantor or Lender files a proceeding in any court to resolve any
such controversy, dispute or claim, such action shall not constitute a
waiver of the right of such party or a bar to the right of any other
party to seek arbitration under the provisions of this Section of that
or any other claim, dispute or controversy, and the court shall, upon
motion of any party to the proceeding, direct that such controversy,
dispute or claim be arbitrated in accordance with this Section.
Notwithstanding any of the foregoing, the parties hereto agree that no
arbitrator or panel of arbitrators shall possess or have the power to (i)
assess punitive damages, (ii) dissolve, rescind or reform (except that the
arbitrator may construe ambiguous terms) this Agreement, (iii) enter
judgment on the debt evidenced by the above-described Note, (iv) exercise
equitable powers or issue or enter any equitable remedies or (v) allow
discovery of attorney/client privileged information. The Commercial
Arbitration Rules of the AAA are hereby modified to this extent for the
purpose of arbitration of any dispute, controversy or claim arising out of,
in connection with, or relating to this Agreement. The parties further
agree to waive, each to the other, any claims for punitive damages, and
agree that neither an arbitrator nor any court shall have the power to
assess punitive damages.
No provision of, or in the exercise of any rights under, this Section
shall limit or impair the right of Lender before, during or after any
arbitration proceeding to: (i) exercise self-help remedies such as setoff
or repossession; (ii) foreclose (judicially or otherwise) any lien on or
security interest in the Property described in the Loan Agreement; or (iii)
obtain emergency relief from a court of competent jurisdiction to prevent
the dissipation, damage, destruction, transfer, hypothecation, pledging or
concealment of assets or of collateral securing the Note or this Guaranty.
Such emergency relief may be in the nature of, but is not limited to:
prejudgment attachments, garnishments, sequestrations, appointments of
receivers, or other emergency injunctive relief to preserve the status quo.
In the event that applicable law prohibits the submission of a
particular controversy, dispute or claim arising out of or in connection
with this Guaranty or the transactions contemplated herein to arbitration,
Guarantor and Lender agree that any actions or proceedings in connection
therewith shall be tried and litigated only in the state and federal courts
located in the jurisdiction in which the Property is located or any other
court in which Lender shall initiate legal or equitable proceedings that
has subject matter jurisdiction over the matter in controversy. Guarantor
and Lender, to the extent permitted by applicable law, waive any right to
assert the doctrine of forum non-conveniens or to object to venue to the
extent of any proceeding is brought in accordance with this paragraph.
23. In addition to the foregoing, Guarantor shall be liable for any
loss, damage or cost resulting from the following: (A) Fraud or intentional
misrepresentation by Borrower, Guarantor or any other guarantor in
connection with obtaining the loan evidenced by the Note or in complying
with the obligations under the Note, this Guaranty Agreement, the Deed of
Trust, and any Loan Documents. In which event, the "loss" shall be deemed
to include, but not be limited to, any loss of sums owing under the Note,
the Deed of Trust and any other Loan Documents; (B) Failure to remit to
Lender insurance proceeds, condemnation awards, or other sums or payments
attributable to the Property in accordance with the provisions of the Deed
of Trust, except to the extent that Borrower did not have the legal right,
because of a bankruptcy, receivership, or similar judicial proceeding, to
direct disbursement of such sums or payments; (C) Following the occurrence
of and during the continuance of any Event of Default, failure to remit to
Lender or otherwise apply all Income from the Property (as hereinafter
defined) to (i) principal and interest under the Note, (ii) payment of
utilities, taxes and assessments, and (iii) ground rents, if any, on the
Property as they become due and payable, (for purposes of this Section 23,
the term "Income from the Property" shall mean all rents, profits, issues,
products and income of the Property (including any received or collected by
or on behalf of Borrower after an Event of Default has occurred and during
its continuance, except to the extent that Borrower did not have the legal
right, because of a bankruptcy, receivership or similar judicial
proceeding, to direct the disbursement of such sums); (D) Removal of any
personalty or fixtures constituting a portion of the Property unless
replaced by an item of equal or greater value; (E) Failure to pay or bond
around any valid mechanics', materialman's or similar lien claimants' liens
arising from work performed or materials furnished in connection with the
Property prior to any sale or foreclosure thereof; (F) Failure to deliver
to Lender following and during the continuance of an Event of Default and
upon demand by Lender, all security deposits received by Borrower in
connection with the Property, subject to the rights of tenants under
tenants' leases; (G) Any waste of or damage to the Property caused by the
wilful or wanton acts or omissions of Borrower or its agents, or any
deferred maintenance of the Property caused by the inaction of Borrower in
which case the "loss" shall be deemed to include all costs of repair,
replacement or rehabilitation of the Property less the balance in any
replacement reserve accounts, (for purposes of this Section 23, "DEFERRED
MAINTENANCE" shall mean a failure to maintain the Property in good repair
(reasonable wear and tear excepted) by failing to replace and/or repair
improvements, fixtures, and appliances as needed to maintain the Property
in good repair (reasonable wear and tear excepted) and the equivalent of
its original condition, (reasonable wear and tear excepted); and (H) any
obligation of Borrower, Guarantor and/or any other guarantor arising under
Section 2.4 of the Deed of Trust and/or that certain Certificate and
Indemnification Regarding Hazardous Substances (the "ENVIRONMENTAL
INDEMNITY AGREEMENT") executed by Borrower and Guarantor and dated of even
date herewith, in which event the "loss" shall include all obligations of
Borrower and Guaral Indemnity Agreement.
EXECUTED as of this the 29th day of January, 1997.
GUARANTOR:
GRAND COURT LIFESTYLES, INC.
By: /s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx, Senior Vice President
AGREED and ACCEPTED:
BANK UNITED
By: /s/ Xxxxx Xxxxx
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Xxxxx Xxxxx
Vice President
