GUARANTY AGREEMENT
This Guaranty Agreement ("Guaranty") is made effective as of March 19,
1999 by ILX Resorts Incorporated, an Arizona corporation ("Guarantor") in favor
of Resort Funding, Inc. a Delaware corporation, its successors and assigns
("Buyer").
Recitals:
A. Buyer and Premiere Development Incorporated, an Arizona corporation
("Seller"), with offices at 0000 Xxxx Xxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx
00000, have entered into a Contract of Sale of Timeshare Receivables with
Recourse ("Agreement") dated March 19, 1999.
B. Buyer has agreed to enter into the Agreement on the inducement and
representation that Guarantor would guaranty Seller's obligations to Buyer under
the Agreement and that Buyer would guaranty Seller's obligations to Buyer
arising in connection with the Agreement, and Guarantor acknowledges that Buyer
would not enter into the Agreement without receiving this Guaranty.
C. Capitalized terms in this Guaranty and not otherwise defined have
the meanings in the Agreement.
In consideration of, and in order to induce Buyer to enter into the
Agreement, Guarantor agrees as follows:
1. RECITALS. The above recitals are true and correct and are
incorporated in this Guaranty by this reference.
2. GUARANTY OF PERFORMANCE. Guarantor absolutely and unconditionally
guaranties the full, complete, and punctual performance by Seller, Los
Abrigados, Club, and each Component Site Developer of all of the Obligations,
terms, and conditions in the Agreement, including without limitation, the
payment of all sums at any time owed by Seller as and when the same shall become
due and payable according to the Agreement, and all losses, costs, expenses, and
reasonable attorneys' fees incurred by reason of the occurrence of an Event of
Default. If Seller, Los Abrigados, Club, or any Component Site Developer fails
to perform any Obligation when required under the Agreement, in each instance
Guarantor immediately shall take such action to cause compliance with the
Agreement, or remedy an Event of Default, including, without limitation, to make
all payments as and when due and payable.
This Guaranty is a continuing guaranty and shall apply to all
Obligations heretofore, contemporaneously, or hereafter existing, and this
Guaranty will not be discharged except by complete performance of the
Obligations. Guarantor's obligation applies irrespective of: (a) the absence of
any attempt to collect from Seller, Los Abrigados, Club, or any Component Site
Developer or any other guarantor; (b) whether any other action has been
instituted or taken to enforce the same; (c) the waiver or consent by Buyer with
respect to any provisions of the Agreement, Purchase Documents, Project
Documents or Related Documents (collectively, "Documents"); (d) the validity or
enforceability of the Guaranty against one or more of any of the other
guarantors; (e) the validity or enforceability of the Documents; or (f) any
other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a guarantor.
3. WAIVER. Guarantor waives and relinquish all rights and remedies
accorded by applicable law to guarantors and agrees not to assert or take
advantage of any such rights or remedies, including without limitation, (a) any
right to require Xxxxx to proceed against Seller, Los Abrigados, Club, any
Component Site Developer, or any other person, or to proceed against or exhaust
any security held by Buyer at any time, or to pursue any other remedy in Buyer's
power before proceeding against Guarantor; (b) any defense that may arise by
reason of the incapacity, lack of authority, death, or disability of any other
person or persons, or the failure of Buyer to file or enforce a claim against
the estate (in administration, bankruptcy, or any other proceeding) of any other
person or persons; (c) diligence, presentment, demand, protest, and notice of
any kind, including, without limitation, notice of the existence, creation, or
incurring of any new or additional indebtedness or obligation, or of any action
or non-action on the part of Seller, Buyer, any endorser or creditor of Seller
or Guarantor, Los Abrigados, Club, any Component Site Developer or on the part
of any other person whomsoever under this or any other instrument in connection
with any Obligation; (d) any defense based on an election of remedies by Buyer,
which destroys or otherwise impairs the subrogation rights of Guarantor or the
right of Guarantor to proceed against Seller, Los Abrigados, Club, or any
Component Site Developer for reimbursement, or both; (e) any duty on the put of
Buyer to disclose to Guarantor any facts Buyer may now or hereafter known about
Seller, Los Abrigados, Club, or any Component Site Developer regardless of
whether Buyer has reason to believe that any such facts materially increase the
risk beyond that which Guarantor intends to assume, or has reason to believe
that such facts are unknown to Guarantor, or has a reasonable opportunity to
communicate such facts to Guarantor, since Guarantor acknowledges that Guarantor
is fully responsible for being and keeping informed of the financial condition
of Seller, and of all circumstances bearing on the risk of non-performance of
any of the Obligations; and (f) any defense arising because of Buyer's election,
in any proceeding instituted under the Federal Bankruptcy Code, of the
application of Section 1111(b)(2) of the Federal Bankruptcy Code.
4. WAIVER OF SUBROGATION. Until all Obligations have fully been
performed and all of Guarantor's obligations under this Guaranty have been
satisfied: (a) Guarantor shall have no equitable right of reimbursement or
subrogation against Seller, Los Abrigados, Club, and each Component Site
Developer by reason of any payments or acts of Guarantor under this Guaranty;
(b) Guarantor waives any right to enforce any remedy which Buyer now has or may
hereafter have against Seller, Los Abrigados, Club, and each Component Site
Developer and further waives any right or remedy which Guarantor now or
hereafter may have against Seller, Los Abrigados, Club, and each Component Site
Developer by reason of any payments or acts of Guarantor under this Guaranty;
and (c) Guarantor waives any benefit of, and any right to participate in, any
security now or hereafter held by Buyer.
5. BANKRUPTCY. So long as any Obligations shall be outstanding,
Guarantor shall not, without the prior written consent of Buyer, commence, or
join with any other person in commencing, any bankruptcy, reorganization, or
insolvency proceeding against Seller, Los Abrigados, Club, and each Component
Site Developer. The obligations of Guarantor under this Guaranty shall not be
altered, limited, or affected by any proceeding, voluntary or involuntary,
involving the bankruptcy, insolvency, receivership, reorganization, liquidation,
or arrangement of Seller, Los Abrigados, Club, and each Component Site Developer
or by any defense which Seller, Los Abrigados, Club, and each Component Site
Developer may have by reason of any order, decree, or decision of any court or
administrative body resulting from any such proceeding. This Guaranty and any
security for this Guaranty shall continue to be effective or be reinstated, as
the case may be, if at any time any performance of any Obligation (including,
without limitation, the payment of any indebtedness of Seller, Los Abrigados,
Club, and each Component Site Developer) is rescinded or must otherwise be
returned by the Buyer or any other person on the bankruptcy, insolvency, or
reorganization of the Seller, Los Abrigados, Club, each Component Site
Developer, any other guarantor or otherwise, all as though such performance had
not occurred.
6. CLAIMS IN BANKRUPTCY. Guarantor shall file in any bankruptcy or
other proceeding in which the filing of claims is required or permitted by law
all claims which Guarantor may have against Seller, Los Abrigados, Club, and
each Component Site Developer relating to any indebtedness of Seller, Los
Abrigados, Club, and each Component Site Developer to Guarantor and will assign
to Buyer all rights of Guarantor thereunder. If Guarantor does not file any such
claim, Buyer, as attorney-in-fact for Guarantor, is authorized to do so in the
name of Guarantor or, in Buyer's discretion, to assign the claim to a nominee
and to cause proof of claim to be filed in the name of Buyer's nominee. The
foregoing power of attorney is coupled with an interest and cannot be revoked.
Buyer or its nominee shall have the sole right to accept or reject any plan
proposed in such proceeding and to take any other action which a party filing a
claim is entitled to do. In all such cases, whether in administration,
bankruptcy, or otherwise, the person or persons authorized to pay such claim
shall pay to Buyer the amount payable on such claim and, to the full extent
necessary for that purpose, Guarantor assigns to Buyer all of Guarantor's rights
to any such payments or distributions to which Guarantor would otherwise be
entitled; provided, however, that Guarantor's obligations under this Guaranty
shall not be satisfied except to the extent that Buyer receives cash by reason
of any such payment or distribution. If Buyer receives anything under the
Agreement other than cash, the same shall be held as collateral for amounts due
under this Guaranty.
7. INTEREST AND COSTS. If Seller or Guarantor fails to pay all or any
portion of any sums due Buyer by Seller under the Agreement ("Indebtedness"), on
demand by Buyer, the amount of such Indebtedness shall thereafter bear interest
at the Default Purchase Rate. Guarantor also shall pay Buyer's reasonable
attorneys' fees and all costs and other expenses which Buyer expends or incurs
in collecting or compromising any such Indebtedness or in enforcing this
Guaranty against Guarantor, whether or not suit is filed, including, without
limitation, all such fees, costs, and expenses incurred in connection with any
insolvency, bankruptcy, reorganization, arrangement, or other similar
proceedings involving Guarantor which in any way affect the exercise by Buyer or
its rights and remedies under this Guaranty. Guarantor's obligation and
liability for all such interest, fees, costs, and expenses shall not be limited
by, and Guarantor shall pay to Buyer all such interest, fees, costs, and
expenses notwithstanding, any agreed limit on the amount of Guarantor's
liability or obligations under this Guaranty.
8. CUMULATIVE RIGHTS. The amount of Guarantor's liability and all
rights, powers, and remedies of Buyer under this Guaranty and under any other
agreement now or at any time hereafter in force between Buyer and Guarantor,
shall be cumulative and not alternative and such rights, powers, and remedies
shall be in addition to all rights, powers, and remedies given to Buyer by law.
This Guaranty is in addition to and exclusive of the guaranty of any other
guarantor of any indebtedness of Seller to Buyer.
9. INDEPENDENT OBLIGATIONS. The obligations of Guarantor under this
Guaranty are independent of the obligations of Seller, Los Abrigados, Club, and
each Component Site Developer, and, in the event of any default under this
Guaranty, a separate action or actions may be brought and prosecuted against
Guarantor whether or not Seller, Los Abrigados, Club, and each Component Site
Developer are joined therein or a separate action or actions are brought against
Seller, Los Abrigados, Club, or any Component Site Developer. Buyer may maintain
successive actions for other defaults. Buyer's rights under this Guaranty shall
not be exhausted by its exercise of any of its rights or remedies or by any such
action or by any number of successive actions until and unless all Obligations
fully have been performed.
10. SEVERABILITY. 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 the
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Guaranty.
11. SUCCESSORS AND ASSIGNS. This Guaranty shall inure to the benefit of
Buyer, its successors and assigns, and shall bind the heirs, executors,
administrators, personal representatives, successors, and assigns of Guarantor.
This Guaranty may be assigned by Buyer with respect to all or any portion of the
Obligations guarantied by this Guaranty, and when so assigned Guarantor shall be
liable to the assignees under this Guaranty without in any manner affecting the
liability or obligations of Guarantor under this Guaranty.
12. NOTICES. All notices and other communication required or permitted
to be given shall be in writing addressed to the respective party as set forth
below and may be personally served or sent by reputable overnight courier or
U.S. Mail and shall be deemed given: (a) if served in person, when served; (b)
if by reputable overnight courier, on the first business day after delivery to
the courier; or (c) if by U.S. Mail, certified or registered mail, return
receipt requested on the fourth (4th) day after deposit in the mail postage
prepaid. Notices shall be sent to the parties at the following addresses:
(a) To Guarantor:
ILX Resorts Incorporated
0000 Xxxx Xxxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
(b) To Buyer:
Resort Funding, Inc.
Xxx Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxx, Vice President
with copies to:
Resort Funding, Inc.
Xxx Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxx, General Counsel
13. CERTAIN RIGHTS OF BUYER. With or without notice to Guarantor,
Buyer, in Buyer's sole discretion and at any time and from time to time and in
such manner and on such terms as Buyer deems fit, may (a) renew, extend,
accelerate, or otherwise change the time for performance of, or otherwise change
the terms of the Obligations or any part thereof; (b) accept partial performance
of the Obligations; (c) take and hold security for the performance under this
Guaranty or of the Obligations and exchange, enforce, waive, and release any
such security; (d) apply such security and direct the order or manner of sale
thereof as Buyer in its discretion may determine; and (e) settle, release,
compromise, collect, or otherwise liquidate any Obligation or any security
therefor in any manner, without affecting or impairing the obligations of
Guarantor under this Guaranty.
14. FINANCIAL STATEMENTS. Guarantor hereby represents and warrants that
all financial statements of Guarantor delivered to Buyer shall be complete and
correct and present fairly the financial condition of Guarantor as of the date
thereof, and the results of operations for the periods covered by such financial
statements, in accordance with generally accepted accounting principles (or such
other method of preparation approved by Buyer in writing) consistently applied;
and shall disclose all liabilities of Guarantor that we required to be reflected
or reserved against under the accounting method used, whether liquidated or
unliquidated, fixed or contingent; and since the respective dates of such
financial statements, there shall have been no material adverse change in the
financial condition, operations, properties, or prospects of Guarantor.
Guarantor shall have filed all tax returns required to be filed by Guarantor,
and shall have paid all taxes due pursuant to such returns or in respect of any
of its properties (except for any such taxes which are being actively contested
in good faith by appropriate proceedings), and to the best knowledge of
Guarantor, no basis shall exist for additional assessments which have not been
adequately reserved against in the financial statements referred to above or
otherwise disclosed in writing to Buyer. All tax returns submitted to Buyer by
Guarantor shall be true and correct to the best of the knowledge of Guarantor.
Each time a financial statement or tax return is submitted by Guarantor to
Buyer, Guarantor shall be deemed to represent and warrant to Buyer that such
statement or tax return comply with all the requirements and representations set
forth in this paragraph.
15. MISCELLANEOUS.
a. LAW. This Guaranty shall be governed by and construed in accordance
with the laws of the State of New York without regard to the principles of
conflict of laws.
b. ENTIRE AGREEMENT. Except as provided in any other written agreement
now or at any time hereafter in force between Buyer and Guarantor, this Guaranty
shall constitute the entire agreement of Guarantor with Buyer with respect to
the subject matter of this Guaranty, and no representation, understanding,
promise, or condition concerning the subject of this Guaranty shall be binding
on Buyer unless expressed in this Guaranty. This Guaranty may be amended,
terminated, changed, waived, or discharged only by an instrument in writing
signed by Buyer and Guarantor.
c. JOINT AND SEVERAL OBLIGATIONS. The obligations of all persons
signing this Guaranty, if more than one, shall be joint and several.
d. LANGUAGE. When the context and construction so require, all words
used in the singular shall be deemed to have been used in the plural and the
masculine shall include the feminine and neuter and vice versa. "Person"
includes any individual, company, firm, association, partnership, corporation,
trust, or other legal entity of any kind whatsoever.
e. NO WAIVER. No provision of this Guaranty can be waived in whole or
in part, nor can Guarantor be released from Guarantor's obligations under this
Guaranty except by a writing duly executed by an authorized officer of Buyer.
f. AUTHORITY. Buyer need not inquire into the power of Seller or the
authority of its officers or agents acting or purporting to act on its behalf.
g. HEADINGS. Headings are for convenience only and shall have no effect
on the construction or interpretation of this Guaranty.
h. OTHER GUARANTIES. This Guaranty is in addition to, independent of,
and does not supersede, affect, or diminish in any way any other guaranty or
guaranties given by Guarantor to Buyer.
i. JURISDICTION, VENUE, AND APPOINTMENT OF REGISTERED AGENT. ALL
ACTIONS OR PROCEEDINGS ARISING DIRECTLY, INDIRECTLY, OR OTHERWISE IN CONNECTION
WITH OUT OF, RELATED TO, OR FROM THIS GUARANTY SHALL BE LITIGATED, AT BUYER'S
SOLE DISCRETION AND ELECTION, ONLY IN COURTS HAVING A SITUS WITHIN THE COUNTY OF
ONONDAGA, STATE Of NEW YORK OR THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF NEW YORK. GUARANTOR CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY
LOCAL, STATE, OR FEDERAL COURT LOCATED WITHIN SAID COUNTY AND STATE. GUARANTOR
WAIVES ANY RIGHT GUARANTOR MAY HAVE TO TRANSFER OR CHANGE THE VENUE OF ANY
LITIGATION BROUGHT AGAINST GUARANTOR BY BUYER ON THE DOCUMENTS IN ACCORDANCE
WITH THIS PARAGRAPH.
i. WAIVER OF JURY TRIAL. GUARANTOR, AND BUYER BY ITS ACCEPTANCE OF THIS
GUARANTY, WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING BASED ON, OR RELATED TO, THE SUBJECT MATTER OF THIS GUARANTY AND THE
BUSINESS RELATIONSHIP THAT IS BEING ESTABLISHED. THIS WAIVER IS KNOWINGLY,
INTENTIONALLY, AND VOLUNTARILY MADE BY GUARANTOR AND BY BUYER, AND GUARANTOR
ACKNOWLEDGES THAT NEITHER BUYER NOR ANY PERSON ACTING ON BEHALF OF BUYER HAS
MADE ANY REPRESENTATIONS OF FACT TO INCLUDE THIS WAIVER OF TRIAL BY JURY OR HAS
TAKEN ANY ACTIONS WHICH IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. GUARANTOR AND
BUYER ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A
BUSINESS RELATIONSHIP AND THAT GUARANTOR AND BUYER ALREADY HAVE RELIED ON THIS
WAIVER IN THEIR RELATED FUTURE DEALINGS. GUARANTOR AND BUYER FURTHER ACKNOWLEDGE
THAT THEY HAVE BEEN REPRESENTED (OR HAVE HAD THE OPPORTUNITY TO BE REPRESENTED)
IN CONNECTION WITH THIS GUARANTY AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT
LEGAL COUNSEL.
Executed as of the date first above written.
"Guarantor"
ILX Resorts Incorporated
By: /s/ Xxxxxx X. Xxxxxxx
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Title: Chairman
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