CORPORATE GUARANTEE AND SUBORDINATION AGREEMENT
THIS CORPORATE GUARANTEE AND SUBORDINATION AGREEMENT ("Guarantee") is made
as of November 23, 1998, by and between RAINTREE RESORTS INTERNATIONAL, INC., a
Nevada corporation ("Guarantor") and FINOVA CAPITAL CORPORATION, a Delaware
corporation ("Lender").
W I T N E S S E T H:
WHEREAS, Lender is contemplating entering into a Loan and Security
Agreement (such Loan and Security Agreement, and any and all amendments,
modifications, supplements, riders, exhibits and schedules that are attached
thereto and may hereafter be attached thereto being hereinafter collectively
referred to as the "Agreement") with CR RESORTS CANCUN, S. de X.X. de C.V., a
Mexican limited responsibility corporation with variable capital; CR RESORTS LOS
CABOS, S. de X.X. de C.V., a Mexican limited responsibility corporation with
variable capital; CR RESORTS PUERTO VALLARTA, S. de X.X. de C.V., a Mexican
limited responsibility corporation with variable capital; CORPORACION MEXITUR,
S.A. de C.V., a Mexican corporation with variable capital; CR RESORTS CANCUN
TIMESHARE TRUST, S. de X.X. de C.V., a Mexican limited responsibility
corporation with variable capital; CR RESORTS CABOS TIMESHARE TRUST, S. de X.X.
de C.V., a Mexican limited responsibility corporation with variable capital, and
CR RESORTS PUERTO VALLARTA TIMESHARE TRUST, S. de X.X. de C.V., a Mexican
limited responsibility corporation with variable capital, (individually,
collectively, jointly and severally, "Borrower") to be dated as of the date
hereof, whereby Lender will lend to Borrower the sum of money ("Loan") as
therein set forth, to be evidenced by a promissory note ("Note") as called for
in the Agreement, which Loan is to be secured by the collateral ("Collateral")
described therein; and
WHEREAS, Guarantor is an affiliate of Borrower as set forth in paragraph
4.1(b) of this Guarantee and will benefit from the execution and delivery of the
Agreement by and between Borrower and Lender and the making of the Loan; and
WHEREAS, Lender is willing to enter into the Agreement with, and make the
Loan to, Borrower only if Guarantor agrees for as long as any amounts may be due
and payable by Borrower to Lender pursuant to the Note and/or the Agreement (a)
to guarantee the full, prompt, complete and faithful performance of all the
terms, covenants, conditions and obligations on Borrower's part to be performed
under the Receivables Loan Documents and (b) to subordinate all of Guarantor's
liens, security interests, claims and rights of any kind that they may now have
or hereafter acquire against Borrower and/or Borrower's assets and property, of
any and all kinds, now or hereafter existing ("Borrower's Property") resulting
from Borrower's present and future indebtedness to Guarantor; other than
indebtedness
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created by the Mirror Notes (as defined in the Indenture [hereinafter
defined]; and Guarantor is willing to so agree; and
NOW, THEREFORE, in order to induce Lender to enter into the Agreement with
Borrower and to fund the Loan, and for other good and valuable consideration,
the sufficiency of which is hereby acknowledged, Guarantor hereby
unconditionally covenants and agrees with Lender as follows:
ARTICLE I - GUARANTEE
1.1 Guarantor absolutely and unconditionally, jointly and severally with
any other Obligors (as defined in paragraph 3.1), guarantees the full, prompt,
complete and faithful performance, payment, observance and fulfillment by
Borrower of all the obligations, covenants and conditions on the part of
Borrower to be performed or observed pursuant to the Receivables Loan Documents
("Obligations"), including, but not limited to, the payment of any and all sums
that may become due to Lender from Borrower thereunder, whether Borrower is
liable individually or jointly with others. Guarantor further agrees to pay all
expenses (including reasonable attorneys' fees and legal expenses) paid or
incurred by Lender in endeavoring to collect the Obligations, or any part
thereof, or securing the performance thereof, or in enforcing this Guarantee,
whether or not litigation is instituted.
1.2 Guarantor covenants and agrees absolutely and unconditionally that, in
case of an Event of Default, within five (5) Business Days of the receipt of
written notice from or on behalf of Lender to the effect that there exists such
an Event of Default and of the Obligations which Borrower has failed to pay or
perform, Guarantor will pay in its entirety the entire unpaid principal balance
with accrued and unpaid interest due under the Note and any other sums properly
due and owing to Lender under the Receivables Loan Documents (collectively, the
"Unpaid Amount") in lawful money of the United States to Lender at its offices
at 0000 Xxxx Xxxxxx Xxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxx 00000, or will
provide Lender with evidence of the performance of the Obligation which Borrower
has failed to perform. If Guarantor should fail to pay any sums properly due
Lender hereunder within said five (5) Business Days following receipt of
Lender's request for payment of any such sums, then said sums shall bear
interest at the Default Rate. Further, if Guarantor shall fail to pay such
amount or perform such Obligation, Lender may institute and pursue any action or
proceeding to judgment or final decree and may enforce any such judgment or
final decree against Guarantor and collect in the manner provided by law out of
its property, wherever situated, the monies adjudged or decreed to be payable.
If Guarantor shall pay such amount or perform such Obligation within the time
frame provided in this paragraph 1.2, Lender shall accept such payment or
performance as a cure by Borrower made during the cure periods provided to
Borrower in the Receivables Loan Documents.
1.3 This Guarantee shall not be limited to any particular period of time,
but, rather, shall continue absolutely, unconditionally and irrevocably until
all terms, covenants
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and conditions of the Receivables Loan Documents have been fully and
completely performed by Borrower or otherwise discharged and/or released by
Lender, and Guarantor shall not be released from any duty, obligation or
liability hereunder so long as there is any claim of Lender against Borrower
arising out of the Receivables Loan Documents which has not been performed,
settled or discharged in full, or during any period for which this Guarantee is
continued in effect or reinstated pursuant to paragraph 3.7.
ARTICLE II - SUBORDINATION
2.1 Guarantor, to the extent permitted by Section 4.08 of the Indenture,
subordinates all present and future indebtedness other than the Mirror Notes
(the "Related Indebtedness") owed by Borrower to Guarantor and all liens,
security interests, claims and rights of any kind (the "Related Liens") that
Guarantor may now have or hereafter acquire against Borrower and/or Borrower's
Property resulting from the Related Indebtedness (the Related Indebtedness and
Related Liens are collectively the "Subordinated Indebtedness") shall, to the
extent permitted by Section 4.08 of the Indenture, be subordinate, inferior and
subject to the claims and rights of Lender against Borrower and/or Borrower's
Property under the terms of any of the Receivables Loan Documents whether direct
or contingent or whether now or hereafter created. Unless an Event of Default or
Incipient Default has occurred and is continuing or will exist after giving
effect to such payment, Guarantor may receive, accept and retain for its own
account all payments made on the Subordinated Indebtedness.
2.2 Guarantor will not take any action which will either (a) force the sale
or cause the foreclosure of Borrower's Property in order to satisfy the
Subordinated Indebtedness or (b) affect in any manner any or all of Lender's
liens, security interests, claims or rights of any kind that Lender may now have
or hereafter acquire against Borrower and/or Borrower's Property. Guarantor will
refrain from taking any action which is in any way inconsistent with or in
derogation of this subordination or of the rights of Lender hereunder and
covenants to perform such further acts as necessary or appropriate to give
effect to this subordination. Without limiting the generality of the foregoing,
Guarantor will not assign any portion of the Subordinated Indebtedness, except
expressly subject to the terms of this Guarantee; and Guarantor shall cause all
evidence of the Subordinated Indebtedness to set forth the provisions hereof or
to bear a legend that it is subject hereto.
ARTICLE III - REMEDIES AND RIGHTS OF LENDER
3.1 Lender shall give Guarantor notice in writing of any Event of Default
but neither failure to give, nor defect in, any notice shall extinguish or in
any way affect the obligations of Guarantor hereunder or give rise to any claim
by Guarantor for breach, other than to the extent the periods governing
Guarantor's performance, as set forth in paragraph 1.2, are affected by the
timing of the notice. Except as provided for in paragraph 1.2, neither demand
on, nor the pursuit of any remedies against Borrower, or any guarantor, surety
or insurer of the Obligations or part thereof ("Obligor") shall be required as a
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condition precedent to, and neither the pendency nor the prior termination of
any action, suit or proceeding against the Borrower or any Obligor (whether for
the same or a different remedy) shall bar or prejudice the making of a demand on
Guarantor by Lender and the commencement against Guarantor after such demand of
any action, suit or proceeding, at law or in equity, for the specific
performance of any covenant, or agreement contained in the Receivables Loan
Documents or for the enforcement of any other appropriate legal or equitable
remedy.
3.2 Guarantor's liability hereunder is primary, direct and immediate.
Guarantor agrees that neither: (a) the exercise or the failure to exercise by
Lender of any rights or remedies conferred on it under the Receivables Loan
Documents; (b) the recovery of a judgment against Borrower or any Obligor; (c)
the commencement of an action at law or the recovery of a judgment at law
against Borrower or any Obligor and the enforcement thereof through levy,
execution or otherwise; (d) the taking or institution of any other action or
proceeding against Borrower or any Obligor; nor (e) any delay in taking,
pursuing or exercising any of the foregoing actions, rights, powers or remedies
(even though requested by Guarantor) by Lender or anyone acting for Lender shall
extinguish or affect the obligations of Guarantor hereunder except as provided
and solely to the extent set forth in paragraph 3.1, but Guarantor shall be and
remain liable for and until all Obligations shall have been fully paid and/or
performed notwithstanding (i) the previous discharge (total or partial) from
further liability of Borrower or any Obligor or (ii) the existence of any bar
(total, partial or temporary) to the pursuit by Guarantor of any right or claim
to indemnity against Borrower or any Obligor or (iii) any right or claim to be
subrogated to the rights or claims of Lender in and to the Collateral or the
Receivables Loan Documents, or except as provided and solely to the extent set
forth in paragraph 3.1 resulting from any action or failure or omission to act
or delay in acting by Lender or anyone entitled to act in its place.
3.3 If Guarantor shall be dissolved or lose its corporate charter by
forfeiture or otherwise or shall become insolvent or admit in writing its
inability to pay its debts as they mature, or apply for, consent to or acquiesce
in an appointment of a trustee, receiver, liquidator, assignee, sequestrator or
other similar official for itself or any of its property; or, in the absence of
such application, consent or acquiescence, a trustee, receiver, liquidator,
assignee, sequestrator or other similar official is appointed for Guarantor or
for a substantial part of its property and is not discharged within sixty (60)
days thereafter; or any bankruptcy, reorganization, debt arrangement or other
proceeding under any bankruptcy, admiralty or insolvency law or at common law or
in equity, or any dissolution or liquidation proceeding is instituted by
Guarantor, or is instituted against Guarantor and remains for sixty (60) days
thereafter undismissed, then, whether any such event occurs at a time when any
of the Obligations are then due and payable or not, the Unpaid Amount shall
thereupon become due and payable in full, Guarantor will pay to Lender forthwith
in its entirety the Unpaid Amount and any other sums properly due and owing to
Lender under the Receivables Loan Documents as if such Unpaid Amount and other
sums were then due and payable and in any such event Lender, irrespective of
whether any demand shall have been made on Guarantor, Borrower or any Obligor,
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by intervention in or initiation of judicial proceedings relative to Guarantor,
its creditors or its property, may file and prove a claim or claims for such sum
or any portion thereof and for any other sums due under the Receivables Loan
Documents and file such other papers or documents as may be necessary or
advisable in order to have such claim allowed in such judicial proceedings and
to collect and receive any monies or other property payable or deliverable on
any such claim, and to distribute the same; and any receiver, assignee or
trustee in bankruptcy or reorganization is hereby authorized to make such
payments to Lender.
3.4 The benefits, remedies and rights provided or intended to be provided
hereby for Lender are in addition to and without prejudice to any rights,
benefits, remedies or security to which Lender might otherwise be entitled. No
delay or omission on the part of Lender in the exercise of any right or remedy
shall operate as a waiver thereof, and no single or partial exercise by Lender
of any right or remedy shall preclude other or further exercise thereof or the
exercise of any other right or remedy; nor shall any modification or waiver of
any of the provisions of this Guarantee be binding on Lender except as expressly
set forth in writing, duly signed and delivered on behalf of Lender. Except as
provided and solely to the extent set forth in paragraph 3.1, no action of
Lender or failure or omission to act permitted hereunder shall in any way affect
or impair the rights of Lender and the obligations of Guarantor under this
Guarantee.
3.5 Anything else contained herein to the contrary notwithstanding, Lender,
from time to time, whether before or after an Event of Default, without notice
to Guarantor, may take all or any of the following actions without in any manner
affecting or impairing the liability of Guarantor hereunder, and without waiving
any rights which Lender may have, unless expressly waived in writing by Lender:
(a) obtain a security interest in any property to secure any of the Obligations
or any obligation hereunder; (b) retain or obtain the primary or secondary
liability of any party or parties, in addition to Guarantor, with respect to any
of the Obligations; (c) extend the time for payment of the Loan or any
installment thereof or the time for performance of any Obligation, in either
case for any period (whether or not longer than the original term therefor); (d)
release or compromise any liability of Guarantor hereunder or any liability of
any nature of any other party or parties with respect to the Obligations; (e)
resort to Guarantor for payment of any Obligations, whether or not Lender shall
proceed against any other party primarily or secondarily liable on any of the
Obligations or against any Collateral; (f) substitute, exchange or release all
or any part of the Collateral; (g) agree to any amendment, modification or
alteration of any of the Receivables Loan Documents and exercise its rights to
consent to any action or nonaction of Borrower which may violate the covenants
and agreements contained in any of the Receivables Loan Documents, with or
without consideration, on such terms and conditions as may be acceptable to it;
or (h) exercise any of its rights confirmed by the Receivables Loan Documents or
by law.
3.6 Guarantor shall not be released or discharged, either in whole or in
part, by Lender's failure or delay to perfect or continue the perfection of any
security interest in any
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property which secures the Obligations of Borrower or of any Obligor to
Lender, or to protect the property covered by such security interest. Guarantor
waives any rights or defenses which may arise as a result of errors or omissions
in connection with the administration of the Loan by Lender, except for gross
negligence or bad faith.
3.7 Guarantor agrees that if at any time all or any part of any payment
theretofore applied by Lender to any of the Obligations is or must be rescinded
or returned by Lender for any reason whatsoever (including, without limitation,
the insolvency, bankruptcy or reorganization of Borrower) such Obligations, for
the purpose of this Guarantee, to the extent that such payment is or must be
rescinded or returned, shall be deemed to have continued in existence,
notwithstanding such application by Lender, and this Guarantee shall continue to
be effective or be reinstated, as the case may be, as to such Obligations, all
as though such application by Lender had not been made.
3.8 Notwithstanding any payment or performance by Guarantor pursuant to
this Guarantee, Guarantor hereby waives and releases any right of reimbursement
and any right to be subrogated to any rights of Lender against Borrower.
Guarantor acknowledges that the foregoing waiver and release has been
specifically bargained for by Lender and has been relied upon by Lender in
ascribing value to this Guarantee, which reliance was a condition precedent to
Lender's willingness to extend the Loan to Borrower. Guarantor expressly waives
any defenses to the enforcement of this Guarantee, to any rights of Lender
created or granted hereby or to the recovery by Lender against Borrower,
Guarantor or any other Obligor of any deficiency after judicial or nonjudicial
foreclosure or sale, even though such a foreclosure or sale may impair the
subrogation rights of Guarantor or otherwise prevent Guarantor from obtaining
reimbursement or contribution from Borrower or any other Obligor.
3.9 Guarantor hereby expressly waives and relinquishes any duty on the part
of Lender (should any such duty exist) to disclose to Guarantor any matter, fact
or thing related to the business, operations or condition (financial or
otherwise) of Borrower or its affiliates or subsidiaries or their properties,
whether now known or hereafter known by Lender during the life of this
Guarantee. The execution and delivery of this Guarantee is based solely on the
independent investigation of Guarantor and in no part upon any representation or
statement of Lender with respect thereto. Guarantor warrants that he/she/it is
fully aware of the financial condition of Borrower, has adequate means to obtain
such information from Borrower on a continuing basis, and is not relying on
Lender to provide such information either now or in the future, but assumes full
responsibility to obtain such information. This Guarantee shall in no way be
limited or impaired by any change in the business structure of Borrower.
3.10 It is not necessary for Lender to inquire into the powers of Borrower
or its officers, directors, partners or agents purporting to act on its behalf,
and the Obligations are hereby guaranteed notwithstanding the lack of power or
authority on the part of Borrower or anyone acting on its behalf to incur the
Obligations.
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ARTICLE IV - GUARANTOR'S WARRANTIES AND COVENANTS
4.1 Guarantor represents and warrants to Lender that:
(a) Guarantor is a corporation duly organized and now existing in good
standing under the laws of its state of incorporation as shown on the
signature page hereof and is duly qualified and in good standing and
authorized to do business in all jurisdictions wherein the location and
nature of the properties used or business, as the same is presently or
proposed to be conducted, makes such qualification necessary;
(b) Guarantor wholly owns all of the issued and outstanding shares of stock
in Raintree Resorts Canada, LLC, Raintree Resorts International Canada Ltd.
and Canarias Future, SL; Raintree Resorts Canada, LLC owns Raintree Resorts
Holdings ULC: Raintree Resorts International Canada Ltd. owns Whiski Xxxx
Resorts Ltd. and Northface Realty Co. Ltd; Whiski Xxxx Resorts Ltd. owns
Whistler Rental Accommodation Center Ltd.; Canarias Future, SL owns CR
Resorts Parent Nominee Holding, LLC; Canarias Future, SL and CR Resorts
Parent Nominee Holding, LLC own CR Resorts Capital, S. de X.X. de C.V. and
CR Resorts Holding, S. de X.X. de C.V.; CR Resorts Capital, S. de X.X. de
C.V. and CR Resorts Parent Nominee Holding, LLC own CR Resorts Remainder
Company, S. de X.X. de C.V.; CR Resorts Holding, S. de X.X. de C.V. owns
Timeshare Nominee Holding, LLC; CR Resorts Holding, S. de X.X. de C.V. and
Timeshare Nominee Holding, LLC own Top Acquisition Sub, S. de X.X. de C.V.;
Top Acquisition Sub, S. de X.X. de C.V. and Timeshare Nominee Holding, LLC
own Desarollos Turisticos Xxxxxx, S. de X.X. de C.V., CR Resorts Cancun, S.
de X.X. de C.V., CR Resorts Cabos, S. de X.X. de C.V.; and CR Resorts
Puerto Vallarta, S. de X.X. de C.V.; CR Resorts Cancun S. de X.X. de C.V.
owns CR Resorts Cancun Timeshare Trust S. de X.X. de C.V.; CR Resort Los
Cabos, S. de X.X. de C.V. owns CR Resorts Cabos Timeshare Trust, S. de X.X.
de C.V.; CR Resorts Puerto Vallarta, S. de X.X. de C.V. owns CR Resorts
Puerto Vallarta Timeshare Trust, S. de X.X. de C.V.; Desarollos Turisticos
Xxxxxx, S. de X.X. de C.V. owns Corporacion Mexitur, S. de X.X. de C.V.,
Desarollos Turisticos Integrales Cozumel, S. de X.X. de C.V., 67.85% of
Club Xxxxxx, S.A. de C.V., Servicios Turisticos Integrales Cobamex, S. de
X.X. de C.V. and 50% of Corporacion Habitacional Mexicana, S. de X.X. de
C.V.
(c) Guarantor has the corporate power and authority to execute and deliver
this Guarantee and carry on its businesses as currently conducted and the
execution, delivery and performance by Guarantor of this Guarantee have
been duly authorized by all necessary corporate action; no consent of
stockholders is required therefor; and the execution and delivery of, the
consummation of the transactions contemplated in, and compliance by
Guarantor with any of the terms and provisions of, this Guarantee, to the
Knowledge of Guarantor, do not and will not conflict with or contravene any
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law, rule, regulation, judgment, order or decree of any government,
governmental instrumentality or court having jurisdiction over Guarantor or
its Affiliates or any of their activities or properties or conflict with,
or result in any default under the Charter or Articles or Certificate of
Incorporation, as amended, or the By-Laws of Guarantor and its Affiliates,
or any material indenture, mortgage, chattel mortgage, deed of trust,
conditional sales contract, charter, bank loan or credit agreement
(including, but not limiting the generality of the foregoing, that certain
Indenture, dated December 5, 1997 by and among Guarantor (under its former
name "Club Xxxxxx Resorts, Inc.", a Nevada corporation), CR Resorts Capital
S de X.X. de C.V., a Mexican variable capital stock limited liability
company, and IBJ Xxxxxxxx Bank Trust Company, as trustee [the
"Indenture"]), or any other material agreement or instrument of any kind to
which Guarantor or any of its Affiliates is a party or by which Guarantor,
its Affiliates or their properties may be bound or affected, except for
those as to which consents have been obtained by Guarantor and are in full
force and effect;
(d) Neither the execution and delivery by Guarantor of this Guarantee nor
any of the transactions by Guarantor contemplated hereby requires the
consent, approval, order or authorization of, or registration with, or the
giving of notice to, any United States federal or state, or any foreign
(including without limitation, Mexican), governmental authority, except
such consents as have been obtained by Guarantor and are in full force and
effect;
(e) This Guarantee has been duly executed and delivered by Guarantor and
constitutes a legal, valid and binding obligation of Guarantor enforceable
against it in accordance with its terms;
(f) To the Knowledge of Guarantor there is no action, litigation or other
proceeding pending or threatened against Guarantor before any court,
arbitrator or administrative agency which may have a materially adverse
effect on the assets, business, or financial condition of Guarantor or
which would prevent, hinder or jeopardize the performance by Guarantor
under this Guarantee;
(g) Guarantor shall maintain its corporate existence and right to carry on
operations and acquire, maintain and renew all rights, contracts, powers,
privileges, leases, lands, sanctions and franchises necessary or useful in
the conduct of its business operations;
(h) Guarantor is fully familiar with all of the covenants, terms and
conditions of the Receivables Loan Documents;
(i) Guarantor shall not make nor is permitted to make any Distributions
(defined below), except that in the event there exists no Event of Default
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or Incipient Default, both before and after taking into account the making
of such Distribution, Guarantor shall be permitted to make preferred stock
dividends on Guarantor's preferred stock reflected in Guarantor's balance
sheet delivered to Lender prior to the date hereof and pay reasonable
bonuses, salary, other compensation and fees at normal and customary rates
for services actually rendered, without the prior written consent of
Lender; the term "Distributions" refers to any distribution, advance,
payment or loan to any shareholder, officer, director, member, partner or
Affiliate of Guarantor including, but not limited to cash dividends,
bonuses, salary or other compensation and management fees;
(j) Guarantor shall maintain a Adjusted Net Worth of not less than the
amount set forth below, which shall be subject to a quarterly test by the
Lender; to this end, the Guarantor agrees to provide Lender within time
period and in the form set forth in the Agreement, the financial statements
and other financial information and reports concerning Guarantor; for
purposes of this Agreement the term (i) Adjusted Net Worth shall mean, with
respect to any date of determination, Guarantor's consolidated net worth as
determined in accordance with GAAP, minus noncash currency exchange gains
to the extent that such gains increased net worth and plus noncash currency
exchange losses to the extent that such losses reduced net worth, and (ii)
"GAAP" shall mean generally accepted accounting principles as in effect
from time to time in the United States, consistently applied, throughout
the period involved and with the prior periods, which shall include the
official interpretations thereof by the Financial Accounting Standards
Board or any successor thereto.
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Test Date: Net Worth Covenant at all Times Following the
Closing of Guarantor's Acquisition of River
Club
(In US Dollars)
3/31/99 9,500,000
6/30/99 4,500,000
9/30/99 7,300,000
12/31/99 2,000,000
3/31/00 9,300,000
6/30/00 7,300,000
9/30/00 12,300,000
12/31/00 9,900,000
3/31/01 and each quarter 13,000,000
thereafter
Test Date: Net Worth Covenant at all Times Prior to the
Closing of Guarantor's Acquisition of River
Club
(In US Dollars)
3/31/99 1,200,000
6/30/99 (1,500,000)
9/30/99 (3,800,000)
12/31/99 (7,114,000)
3/31/00 (2,000,000)
6/30/00 (1,000,000)
9/30/00 1,400,000
12/31/00 2,000,000
3/31/01 and each quarter 7,000,000
thereafter
For purposes hereof, the River Club shall mean that certain resort known as
River Club located in Telluride, Colorado. It is understood that Guarantor
has no obligation to acquire River Club.
(k) On the final day of each fiscal quarter of Guarantor, commencing with
the fiscal quarter ending March 31, 1999 and on the final day of each
fiscal year of Guarantor, commencing with the fiscal year ending December
31, 1999 the sum of (i) the total of Guarantor's consolidated costs and
expenses for commissions and selling relating to the retail sales of
time-share interests, use rights, memberships and fraction ownership
interests and (ii) the total of Guarantor's consolidated general and
administrative expenses, (the costs and expenses
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described in clauses (i) and (ii) hereinafter the "SGA Expenses") shall not
exceed the amount set forth below of the gross proceeds of Guarantor's
consolidated processed sales of retail time-share interests, use rights,
memberships and fractional ownership interests for the same period (each net of
cancellations of such sales) ("Net Sales"). The foregoing covenant shall be
tested quarterly based upon Guarantor's total aggregate SGA Expenses and Net
Sales for the immediately preceding three (3) month period and annually based
upon Guarantor's total aggregate SGA Expenses and Net Sales for the immediately
preceding twelve (12) month period.
Test Date: Covenant at all Times Prior to the Closing of Guarantor's
Acquisition of River Club 3/31/99 through 12/31/99 68% 3/31/00 and
thereafter 55%
Test Date: Covenant at all Times Following the Closing of Guarantor's
Acquisition of River Club 3/31/99 and at all times thereafter 55%
(l) Guarantor is not a party to any contract, agreement, indenture or
instrument or subject to any charter or other corporate restriction which
individually or in the aggregate might materially adversely affect its
financial condition, business, or operations or which would in any way
jeopardize the ability of Guarantor to perform under this Guarantee;
(m) Guarantor was not induced to give this Guarantee by the fact that there
are or may be other Obligors; and
(n) Guarantor will promptly notify Lender if any action, litigation or
other proceeding becomes pending or, to Guarantor's Knowledge, threatened
before any arbitration tribunal, court, governmental agency or
administrative body against Borrower, which might materially adversely
affect the business or financial condition of Guarantor, or the ability of
Guarantor to perform its obligations under this Guarantee.
4.2 The provisions of Sections 4.09, 4.11, 4.12, 4.17 and 4.19 of the
Indenture (the foregoing Sections are collectively called the "Financial
Covenants") are by this reference incorporated herein as if fully set forth in
this Agreement. The Guarantor represents, warrants and covenants to the Lender
that Guarantor shall not, and shall not permit any of its Affiliates to,
directly or indirectly, take, or fail to take, any action that would result in a
violation of its Financial Covenants.
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4.3 The Guarantor on behalf of itself and its Affiliates represents and
warrants to the Lender that the Loan is a Permitted Debt (as defined in the
Indenture) and that as of the date hereof there exists no Default or Event of
Default (as the foregoing two (2) terms are defined in the Indenture) under the
Indenture. Guarantor covenants with Lender that (i) as and when required by the
Indenture, the Guarantor shall cause the Issuers (as defined in the Indenture)
to supply the Lender with true and complete copies of all reports,
certifications, notices or demands given by the Issuers under the Indenture
(including, but not limiting the generality of the foregoing, materials required
by Sections 4.03, 4.04, 4.21, 7.06, and Article 8 of the Indenture), and (ii) it
will not amend or modify the Indenture without the prior written consent of the
Lender and any such amendment or modification to the Indenture made without the
prior written consent of Lender shall not be binding upon Lender or affect the
Financial Covenants. The Financial Covenants shall not be deemed amended by any
amendments or modifications to the Indenture made without the prior written
consent of Lender. Further, the Guarantor agrees to cause the Issuer to promptly
(but in any event within three (3) days after the Issuer's receipt of the same)
supply the Lender with a true and complete copy of any notice sent to the
Issuers under Section 6.01 of the Indenture, or any other notice alleging a
default by the Issuers under the Indenture.
ARTICLE V - MISCELLANEOUS PROVISIONS
5.1 All the covenants, stipulations, promises and agreements contained in
this Guarantee by or on behalf of Guarantor are for the benefit of Lender and
its successors or assigns and shall bind Guarantor and its successors and
assigns. Lender, without notice of any kind, may sell, assign or transfer the
Receivables Loan Documents and/or its interest in all or in part of the
Collateral, and in such event each and every immediate and successive assignee
or transferee thereof shall have the right to enforce this Guarantee, by suit or
otherwise, for the benefit of such assignee or transferee as fully as if such
assignee or transferee were herein by name specifically given such rights,
powers and benefits. Guarantor hereby agrees for the benefit of any such
assignee or transferee that their respective obligations hereunder shall not be
subject to any reduction, abatement, defense, set-off, counterclaim or
recoupment for any reason whatsoever.
5.2 Any notice or demand which by any provision of this Guarantee is
required or permitted to be given by Lender to Guarantor or by Guarantor to
Lender shall be deemed to have been sufficiently given for all purposes upon
personal delivery or three (3) days after mailing by first-class mail, postage
prepaid, to Guarantor or Lender at their respective addresses set forth after
their respective signatures below or at such other address as set forth in a
written notice given pursuant hereto.
5.3 Terms used and not otherwise defined herein shall have the same
meanings given thereto in the Agreement. The term "Knowledge of Guarantor" used
herein, shall mean the actual, current Knowledge of the Chief Executive Officers
of Guarantor.
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5.4 Guarantor hereby expressly waives: (a) notice of the acceptance by
Lender of this Guarantee; (b) except as provided in paragraph 1.2 notice of the
existence, creation or nonpayment of all or any of the Obligations; (c) except
as provided in paragraph 1.2 presentment, demand, notice or dishonor, protest,
and all other notices whatsoever; (d) all diligence in collection or protection
of or realization on the Obligations or any thereof, any obligation hereunder,
or any security for or guaranty of any of the foregoing; and (e) any and all
suretyship defenses and defenses in the nature thereof, including, without
limitation, the benefits of the provisions of Section 12-1641 et seq. of the
Arizona Revised Statutes and Rule 17(f) of the Arizona Rules of Civil Procedure
and all other laws of similar import.
5.5 THIS GUARANTEE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF ARIZONA. FOR PURPOSES OF THIS SECTION 5.5, THIS
GUARANTEE SHALL BE DEEMED TO BE PERFORMED AND MADE IN THE STATE OF ARIZONA.
5.6 GUARANTOR HEREBY AGREES THAT ALL ACTIONS OR PROCEEDINGS INITIATED BY
GUARANTOR AND ARISING DIRECTLY OR INDIRECTLY OUT OF THIS GUARANTEE SHALL BE
LITIGATED IN THE MARICOPA COUNTY, ARIZONA SUPERIOR COURT, OR THE UNITED STATES
DISTRICT COURT FOR THE DISTRICT OF ARIZONA. GUARANTOR HEREBY EXPRESSLY SUBMITS
AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING
COMMENCED BY LENDER IN ANY OF SUCH COURTS, TO THE EXTENT SUCH COURTS WOULD NOT
HAVE HAD JURISDICTION ABSENT SUCH CONSENT, AND HEREBY WAIVES PERSONAL SERVICE OF
THE SUMMONS AND COMPLAINT, OR OTHER PROCESS OR PAPERS ISSUED THEREIN, AND AGREES
THAT SERVICE OF SUCH SUMMONS AND COMPLAINT OR OTHER PROCESS OR PAPERS MAY BE
MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO GUARANTOR AT THE ADDRESS TO
WHICH NOTICES ARE TO BE SENT PURSUANT TO SECTION 5.2. GUARANTOR WAIVES ANY CLAIM
THAT PHOENIX, ARIZONA OR THE DISTRICT OF ARIZONA IS AN INCONVENIENT FORUM OR AN
IMPROPER FORUM BASED ON LACK OF VENUE. SHOULD GUARANTOR, AFTER BEING SO SERVED,
FAIL TO APPEAR OR ANSWER TO ANY SUMMONS, COMPLAINT, PROCESS OR PAPERS SO SERVED
WITHIN THE NUMBER OF DAYS PRESCRIBED BY LAW AFTER THE MAILING THEREOF, GUARANTOR
SHALL BE DEEMED IN DEFAULT AND AN ORDER AND/OR JUDGMENT MAY BE ENTERED BY LENDER
AGAINST GUARANTOR AS DEMANDED OR PRAYED FOR IN SUCH SUMMONS, COMPLAINT, PROCESS
OR PAPERS. THE EXCLUSIVE CHOICE OF FORUM FOR GUARANTOR SET FORTH IN THIS SECTION
5.6 SHALL NOT BE DEEMED TO PRECLUDE THE ENFORCEMENT, BY LENDER, OF ANY JUDGMENT
OBTAINED IN ANY OTHER FORUM OR THE TAKING, BY LENDER, OF ANY ACTION TO ENFORCE
THE SAME IN ANY OTHER APPROPRIATE
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JURISDICTION, AND GUARANTOR HEREBY WAIVES THE RIGHT TO COLLATERALLY ATTACK
ANY SUCH JUDGMENT OR ACTION.
5.7 LENDER AND GUARANTOR ACKNOWLEDGE AND AGREE THAT ANY CONTROVERSY WHICH
MAY ARISE UNDER THIS GUARANTEE OR WITH RESPECT TO THE TRANSACTION CONTEMPLATED
HEREBY WOULD BE BASED UPON DIFFICULT AND COMPLEX ISSUES AND, THEREFORE, THE
PARTIES AGREE THAT ANY LAWSUIT ARISING OUT OF ANY SUCH CONTROVERSY SHALL BE
TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.
Initials: GUARANTOR /s/ DYB LENDER /s/ RRH
5.8 Any provision of this Guarantee which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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[SIGNATURE PAGE/CORPORATE GUARANTEE AND SUBORDINATION AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Guarantee as of
the date first hereinabove written, and acknowledge receipt of a copy hereof.
"Guarantor" "Lender"
RAINTREE RESORTS INTERNATIONAL, INC. FINOVA CAPITAL CORPORATION,
a Nevada corporation a Delaware corporation
By: /s/ XXXXXXX X. XXXX By: /s/ XXXXXXX XXXXXX
Name: Xxxxxxx X. Xxxx Name: Xxxxxxx Xxxxxx
Title: Chairman Title:Sr. Vice President
X Check here to confirm that Section 5.7 has been initialed.
X Check here to confirm that Section 5.7 has been initialed.
Federal Tax Identification No:
76-0549149
Address: Address:
00000 Xxxxxxxx Xxxxx 0000 Xxxx Xxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000 Xxxxxxxxxx, Xxxxxxx 00000
Attention: /s/ XXXXXXX X. XXXX Attention: Vice President -
International Resort Finance
With a copy to: With a copy to:
Akin,Gump,Strauss,Hauser&Feld L.L.P. 0000 Xxxx Xxxxxx Xxxxxx Xxxx, Xxxxx 000
1900 Pennzoil Place - Xxxxx Xxxxx Xxxxxxxxxx, Xxxxxxx 00000
000 Xxxxxxxxx Xxxxxx Attention: Vice President - Group
Xxxxxxx, Xxxxx 00000 Counsel
Attention: Xxxxxx X. Xxxxxx, Esq.
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