PAYMENT GUARANTY AND SUBORDINATION AGREEMENT
PAYMENT GUARANTY AND SUBORDINATION AGREEMENT (as amended from time to time,
this "Guaranty Agreement") dated as of November 23, 1999, is made by Raintree
Resorts International, Inc., a Nevada corporation ("Guarantor"), in favor of
TEXTRON FINANCIAL CORPORATION, a Delaware corporation ("Lender").
PRELIMINARY STATEMENT
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. de X.X. de C.V., a
Mexican limited responsibility 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 (collectively, jointly and
severally, the "Borrower"), having an address at c/o Raintree Resorts
International, Inc., 00000 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000, and
Lender have entered into a certain Loan and Security Agreement dated as of
November 23, 1999, as amended from time to time (the "Loan Agreement"). Pursuant
to the terms and subject to the conditions of the Loan Agreement and the other
Loan Documents, Lender has agreed to lend to the Borrower up to $10,000,000.00
(the "Loan").
Guarantor, through certain of its subsidiaries in which Guarantor holds a
majority ownership interest, owns a majority ownership interest in each of the
Borrower entities, and Guarantor is involved in overseeing the business
operations of the Borrower and the Resorts, and derives material benefit from
such operations.
Lender's agreement to enter into the Loan Agreement and make any Advance is
conditioned, among other things, upon the execution and delivery by Guarantor of
this Guaranty Agreement pursuant to which the Guarantor unconditionally
guaranties payment and performance of the Obligations of Borrower to Lender. The
Guarantor will materially benefit from Lender's making available to the Borrower
the Loan, and has agreed to execute and deliver this Guaranty Agreement, and to
perform in accordance with its terms.
NOW, THEREFORE, in consideration of the premises and in order to induce
Lender to enter into the Loan Documents and to make any Advances, and to secure
the performance and observance by the Guarantor of Borrower's Obligations,
whether now existing or hereafter arising, Guarantor has executed and delivered
this Guaranty Agreement and does hereby agree as follows:
1. Definitions, Etc. The above Preliminary Statement is true and correct
and is incorporated within and made a part of this Guaranty Agreement.
Capitalized terms used herein which are defined in the Loan Agreement shall have
the meanings assigned to them therein, unless the context otherwise requires or
unless otherwise defined herein. Any references to this "Agreement" shall mean
this Guaranty Agreement including all amendments, modifications and supplements
and any exhibits or schedules to any of the foregoing, and shall refer to this
Guaranty Agreement as the same may be in effect at the time such reference
becomes operative. Any references to "Guarantor" shall mean Raintree Resorts
International, Inc., a Nevada corporation.
2. The Guaranty. The Guarantor covenants and agrees as follows:
(a) Guarantor hereby unconditionally and irrevocably guaranties to Lender,
its successors and assigns, the due and punctual payment by Borrower
of all principal, interest, prepayment premiums, late charges, loan
expenses, and all other amounts payable under the Note or the other
Loan Documents, and all Obligations at any time owing under the Loan,
and all costs of collecting amounts due from the Guarantor, including
without limitation reasonable attorneys' and paralegals' fees and
disbursements, when the same shall become due and payable, whether at
maturity, by acceleration or otherwise, including any portion of such
Obligations nominally held by Lender on behalf of those who have
participations or interests therein granted or created by Lender
(collectively, the "Guaranteed Obligations").
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(b) Guarantor agrees that the guaranty given hereby is a guaranty of
payment and not of collection, and that its obligations hereunder
shall be primary, absolute and unconditional, irrespective of, and
unaffected by, the Borrower's performance or failure to perform or
satisfy all of its Obligations arising out of the Note and other Loan
Documents, and Guarantor irrevocably waives and agrees not to assert
or take advantage of:
(i) the genuineness, validity, legality, regularity, enforceability
or any future amendment of, or change in, this Guaranty
Agreement, any of the other Loan Documents or any other
agreement, document or instrument to which the Borrower or
Guarantor, or any other guarantors of the Obligations, is or may
be a party;
(ii) the absence of any action to enforce this Guaranty Agreement, any
of the other Loan Documents or any other agreement, document or
instrument to which the Borrower or Guarantor, or any other
guarantors of the Obligations, is a party;
(iii)any right at law, or in equity or otherwise, to require Lender
to institute suit or proceed against the Borrower, any other
guarantors or any other Person, or the Collateral, or to exhaust
any security held by Lender, or to pursue any other remedy in
Lender's power, before proceeding against Guarantor;
(iv) any defense arising by virtue of any statute of limitations, or
based on lack of authority, dissolution or ultra xxxxx action;
(v) notice of the existence, creation or incurring of any new or
additional indebtedness or obligations on the part of the
Borrower;
(vi) the waiver, release, surrender, discharge, indulgence, extension,
modification, renewal, delay, consent, or other action, inaction
or omission by Lender with respect to any of the provisions
hereof or thereof, or with respect to the Borrower, any of the
Obligations or any of the Collateral, whether or not the
Guarantor shall have had notice or knowledge of any of the
foregoing and whether or not Guarantor shall have consented
thereto;
(vii)the existence, value or condition of, or failure of the Lender
to perfect its Lien against, any Collateral, or any action, or
the absence of any action, by the Lender in respect thereof
(including, without limitation, the failure to enforce any Lien
or realize upon all or any portion of the Collateral, or the
release of any Collateral);
(viii) the validity or enforceability of the guaranty of Guarantor or
any other guarantor or surety with respect to the Obligations;
(ix) any claim or defense that the Loan does not constitute a
"Permitted Debt" or that the Loan is otherwise not allowed
pursuant to the provisions of that certain December 5, 1997
Indenture entered by Guarantor (the "Indenture");
(x) any claim or defense that the Loan is not permitted or allowed
pursuant to the provisions of the FINOVA Loan Agreement (as such
term is defined in the Loan Agreement); or
(xi) any other action or circumstance which might otherwise constitute
a legal or equitable discharge or defense of a surety or
guarantor.
(c) To the extent Borrower, Guarantor, or any other Person primarily or
secondarily liable for the Obligations, makes a payment or payments to
Lender, all or any portion of which is subsequently invalidated,
declared to be fraudulent or preferential, set aside or required, for
any of the foregoing reasons or for any other reason, to be waived,
repaid or paid over to a trustee, receiver or any other party under
any bankruptcy or other Debtor Relief Laws, other state or federal
law, common law or rule of equity, then the Guaranteed Obligations or
part thereof that were intended to be satisfied by such payment or
payments shall, to the full extent of all of such payments required to
be waived, repaid, restored or paid over, automatically be revived,
reinstated and continued in full force and effect as if said payment
or payments had not been made, and Guarantor shall again be primarily
liable therefor. The Guarantor's obligations under this Guaranty
Agreement shall not be discharged until the passage of at least
thirteen (13) calendar months from the last date on which occurs the
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full, final and indefeasible payment and performance of the Guaranteed
Obligations; provided, however, that this Guaranty Agreement, and
Guarantor's obligations hereunder, shall continue to be effective or
be reinstated, as the case may be, if at any time payment or
performance of any of the Obligations or Guaranteed Obligations, or
any part thereof, is rescinded or waived or must otherwise be restored
by Lender upon the bankruptcy or other proceeding under any Debtor
Relief Laws of or affecting the Borrower or Guarantor, and shall
continue in full force and effect as long as there exists a right to
rescind, or to compel restoration or waiver, of any payment or
performance of any of the Obligations or Guaranteed Obligations. This
provision shall survive full payment and performance of the Guaranteed
Obligations and remain enforceable by Lender.
(d) If Lender, under applicable law, proceeds to realize its benefits
under any of the Loan Documents giving Lender a Lien upon any
Collateral, whether owned by Borrower or by any other Person, either
by judicial foreclosure or by non-judicial sale or enforcement, Lender
may, at its sole option, determine which of its remedies or rights it
may pursue without affecting any of its rights and remedies under this
Guaranty Agreement. If, in the exercise of any of its rights or
remedies, Lender shall forfeit or lose any of its rights or remedies,
including its right to enter a deficiency judgment against Borrower or
any other Person, whether because of any applicable laws pertaining to
"election of remedies" or the like, Guarantor hereby consents to such
action by Lender and waives any claim based upon any election of
remedies, even if a remedy asserted or action taken by Lender shall
result in a full or partial loss of rights of subrogation, if any,
which Guarantor might otherwise have had. Any election of remedies
which results in the denial or impairment of the right of Lender to
seek a deficiency judgment against Borrower shall not impair
Guarantor's obligation to pay the full amount of the Guaranteed
Obligations to Lender and to perform its obligations under this
Guaranty Agreement.
(e) Guarantor has reviewed, with counsel of its choice, and consents to
the Loan Documents. Guarantor shall be regarded, and shall be in the
same position, as principal debtor with respect to all of the
Guaranteed Obligations.
(f) This Guaranty Agreement shall remain in full force and effect without
regard to future changes and conditions, including change of law or
any invalidity or irregularity with respect to any of the Obligations
or with respect to the execution and delivery or performance of any of
the Loan Documents; and any attempted revocation of this Guaranty
Agreement by Guarantor shall be ineffective, unless otherwise
expressly provided by law, and, if applicable law provides that any
such revocation is effective, such revocation shall be effective only
if made in writing and only as to Advances thereafter made by Lender
and shall not affect the continuing liability hereunder of the
Guarantor for all of the Guaranteed Obligations theretofore incurred
by, accrued on account of or arising with respect to the Borrower.
This Guaranty Agreement is in addition to, and not in substitution
for, or in reduction of any other guarantees in favor of Lender.
(g) The Guarantor is fully aware of the financial and other condition of
the Borrower and the Resorts. The Guarantor is executing and
delivering this Guaranty Agreement based solely upon its own
independent investigation and in no part upon any representation or
statement of Lender or any agent or representative thereof with
respect thereto. The Guarantor is in a position to obtain and hereby
assumes whole responsibility for obtaining any additional information
concerning Borrower's or the Resorts' financial or other condition as
the Guarantor may deem material to its obligations hereunder, and the
Guarantor is not relying upon, nor expecting the Lender to furnish,
any information concerning the Borrower's or the Resorts' financial or
other condition. The Guarantor hereby knowingly accepts the full range
of risk encompassed within a contract of "continuing guarantees",
which risk includes, without limitation, the possibility that the
Borrower will contract additional indebtedness for which the Guarantor
will be liable hereunder after the Borrower's financial condition or
ability to pay when due its lawful debts has deteriorated.
(h) Guarantor acknowledges receipt of good, valuable and sufficient
consideration for its entering into and performing under this Guaranty
Agreement. Guarantor has an independent obligation hereunder given in
consideration of Lender's agreements pursuant to the Loan Documents,
from which the Guarantor derives continuing material value and
benefit. The Guarantor subjects its separate property to its
obligations hereunder, and agree that recourse may be had against such
separate property to enforce the Guarantor's obligations hereunder.
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3. Certain Waivers by Guarantor. The Guarantor irrevocably waives, to the
fullest extent permitted by law: (a) notice of acceptance hereof, notice of the
extension of credit or the making of Advances from time to time, and of the
creation, existence or acquisition of any of the Guaranteed Obligations; (b)
notice of the amount of the Guaranteed Obligations, or any other indebtedness of
the Borrower to the Lender from time to time outstanding; subject, however, to
Guarantor's right to make written inquiry of the Lender to ascertain the amount
of the Guaranteed Obligations or such other indebtedness from time to time; (c)
notice of adverse change in the Borrower's financial condition or any other fact
which might increase Guarantor's risk; (d) presentment, demand and protest and
notice of presentment, dishonor, notice of intent to accelerate, notice of
acceleration, protest, default, nonpayment, maturity, release, compromise,
settlement, extension or renewal of any or all of the Loan Documents, or any
other instrument, document or agreement; (e) notice of default and all other
notices to which Guarantor might otherwise be entitled; (f) all rights to notice
and a hearing prior to the taking of possession or control by Lender of, or to
Lender's replevy, attachment or levy upon the Collateral or any bond or security
which might be required by any court prior to allowing Lender to exercise any of
its remedies; (g) the benefit of all valuation, appraisal and exemption laws;
(h) the benefit of all provisions of law which are or might be in conflict with
the terms of this Guaranty Agreement or any of the other Loan Documents; and (i)
any defense arising by reason of the cessation from any cause whatsoever of any
of the Obligations of Borrower.
Guarantor agrees that any notice or directive given at any time to the
Lender which is inconsistent with the waivers contained in this Section shall be
void and may be ignored by the Lender, and, in addition, may not be pleaded or
introduced as evidence in any litigation relating to this Guaranty Agreement for
the reason that such pleading or introduction would be at variance with the
written terms of this Guaranty Agreement, unless Lender has specifically agreed
otherwise in writing.
For purposes of the provisions contained herein, Guarantor hereby expressly
waives the benefits of "orden, excusion y division" and of prior judgement,
levy, execution and other rights provided for in Articles 2814, 2815, 2817,
2818, 2820, 2821, 2823, 2827 and 2836 of the Civil Code of the Federal District
of Mexico, and the corresponding articles of the Civil Code of the States of
Xxxxxxxx Roo, Jalisco, and Baja California Sur or of the other states of Mexico,
which articles are not reproduced herein by express declaration of Guarantor
that the contents of said articles are known to it. Guarantor also hereby
irrevocably and expressly waives its rights under the benefits of Articles 2846,
2847, 2848 and 2849 of the Civil Code for the Federal District of Mexico, and
the corresponding articles of the Civil Code of the States of Xxxxxxxx Roo,
Jalisco, and Baja California Sur or of the other states of Mexico, which
articles are not reproduced herein by express declaration of Guarantor that the
contents of said articles are known to it.
4. Waiver of Subrogation, Reimbursement, Etc.
(a) In addition to other waivers contained herein, the Guarantor
irrevocably waives all rights it may have at law or in equity
(including without limitation any law subrogating the Guarantor to the
rights of Lender) to seek contribution, subrogation, indemnification
or any other form of reimbursement from the Borrower, any other
guarantor, or any other Person now or hereafter primarily or
secondarily liable for any of the Obligations, and all claims or
potential claims related thereto, in a bankruptcy proceeding, or other
proceeding under any of the Debtor Relief Laws, or otherwise, for or
in connection with any disbursement made by the Guarantor under or in
connection with this Guaranty Agreement, or otherwise; and Guarantor
further agrees not to contest such waiver in any proceeding; provided,
however, that if and to the extent, if any, that a court of competent
jurisdiction would deem the Guarantor to retain any such rights of
contribution, indemnification, subrogation or reimbursement
notwithstanding such express waiver, all such rights and all claims
based thereon, now or hereafter in existence and however incurred or
acquired, shall be junior and subordinate in right of payment to the
prior and full indefeasible payment and performance in favor of Lender
of the Obligations, and Guarantor agrees that all such rights and all
claims based thereon shall be inchoate, and shall not vest in the
Guarantor or be exercisable until the date which is at least thirteen
(13) calendar months from the last date on which all of the Guaranteed
Obligations shall have been paid in full to Lender and finally
discharged. If any payment shall be made to Guarantor on account of
such reimbursement, contribution, indemnification or subrogation
rights, if any, at any time before the passage of at least thirteen
(13) calendar months from the last date on which all of the Guaranteed
Obligations are paid in full and finally discharged, each amount so
paid shall be received and held by Guarantor in trust for Lender, and
shall forthwith be paid to Lender to be credited and applied against
the Obligations, whether matured or unmatured.
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(b) To the extent, if any, that notwithstanding the waiver of subrogation
contained in Section 4, Guarantor acquires or is deemed to hold by way
of subrogation any rights of Lender against Borrower, any other
guarantor, or any other Person, the rights of Lender to which
Guarantor may be subrogated, if any, shall be accepted by Guarantor
"as is" and without any representation or warranty of any kind by
Lender, express or implied, with respect to the legality, value,
validity or enforceability of any of such rights, or the existence,
availability, value, merchantability or fitness for any particular
purpose of any Collateral, and shall be without recourse to Lender.
5. Demand by Lender. Upon an Event of Default under any of the Loan
Documents, all of the Guaranteed Obligations shall be due and payable by the
Guarantor to Lender, immediately upon Lender's written demand therefor. Payment
by Guarantor shall be made to Lender in immediately available funds at 00
Xxxxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxx Xxxxxx 00000; Attention: Collections, or
at any other address in Providence, Rhode Island, Hartford, Connecticut, or
otherwise that may be specified in writing from time to time by Lender. If
acceleration of the time for payment of the Obligations is stayed, or demand for
payment thereof is precluded upon injunction or the bankruptcy, insolvency or
reorganization of Borrower or Lender is otherwise stayed, enjoined or precluded
from exercising its rights and remedies pursuant to the Loan Documents, then,
the entire amount of the Guaranteed Obligations shall nevertheless be due and
payable by Guarantor to Lender on demand by Lender. If payment in full of the
Guaranteed Obligations is not made to Lender within ten (10) days after demand,
the entire amount of the outstanding Guaranteed Obligations shall bear interest
at the Default Rate specified in the Note Receivable Promissory Note; provided,
however, that notwithstanding any provision hereof or in any other Loan Document
to the contrary, the parties intend that any interest for which the Guarantor is
charged or is obligated to pay shall not exceed the maximum rate or amount of
interest permitted under applicable law.
6. Enforcement of Guaranty. In no event shall Lender have any obligation to
proceed against Borrower, any other guarantor, or any other Person, or any
Collateral before seeking satisfaction from Guarantor. Lender may proceed, prior
or subsequent to, or simultaneously with, the enforcement of Lender's rights
hereunder, to exercise any right or remedy which it may have against any
Collateral as a result of any Lien it may have as security for the Obligations,
or any other right it may have under the Loan Documents, or against any other
guarantor of the Obligations, for all or any portion of the Guaranteed
Obligations.
7. Benefit of Guaranty. The provisions of this Guaranty Agreement are for
the benefit of Lender and its successors and assigns, and nothing herein
contained shall impair, as between Borrower, on the one hand, and Lender, on the
other hand, the Obligations of Borrower under the Loan Documents. Nothing shall
discharge or satisfy the liability of the Guarantor hereunder except the full,
final and indefeasible payment and performance of the Guaranteed Obligations.
8. Modification of Loans, etc. At any time and from time to time, without
the consent of, or notice to Guarantor, without incurring any liability to
Guarantor and without impairing, limiting or releasing the obligations of
Guarantor under this Agreement, Lender may by action or inaction:
(a) compromise, settle, change or extend the manner, place or terms of
payment of, or renew or alter all or any portion of, any Obligations;
(b) take any action under or with respect to the Loan Documents in the
exercise of any remedy, power or privilege contained therein or
available to Lender at law, equity or otherwise, or waive or refrain
from exercising any such remedies, powers or privileges;
(c) amend or modify in any manner whatsoever any of the Loan Documents
(except this Guaranty Agreement) notwithstanding that such amendment
or modification may result in the Obligations exceeding the aggregate
principal sums set forth in the Loan Documents;
(d) extend, release or waive the Borrower's or any other Person's
performance of, or compliance with, any term, covenant or agreement on
its part to be performed or observed under the Loan Documents, or
waive such performance or compliance or consent to a failure of, or
departure from, such performance or compliance;
(e) sell, retain, exchange, release, dispose of, or otherwise deal with,
any Collateral securing any Obligations;
(f) refuse or fail to enforce any rights or remedies under any Loan
Documents or other instrument or agreement evidencing or securing the
Obligations or waive or modify the obligations of, or extend the time
for performance of, or release, any Person (other than Guarantor) who
may be liable in any manner for the payment or collection of any
amounts owed by Borrower to Lender; or
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(g) apply any sums by whomever paid or however realized to any amounts
owing by Borrower or Guarantor to Lender in such manner as Lender
shall determine in its discretion.
9. Grant of Lien. As security for the payment and performance of the
Guaranteed Obligations, for value received, the Guarantor grants to Lender a
Lien upon, security interest in, and, where applicable, right of set-off
against, any and all deposits, credits, and any and all other property of
Guarantor, now or at any time with or in the possession of or in transit to
Lender.
10. No Marshalling. Guarantor specifically consents and agrees that Lender
shall be under no obligation to Xxxxxxxx any assets in favor of Guarantor or
against or in payment of any or all of the Guaranteed Obligations.
11. Subordination. The Guarantor hereby agrees that, to the extent
permitted by Section 4.08 of the Indenture, effective immediately and without
notice upon the occurrence of an Event of Default, any and all present and
future debts and obligations of the Borrower to Guarantor, or of Guarantor to
any other guarantor, and any liens, security interests, claims and rights
related thereto (collectively, the "Subordinated Indebtedness"), shall
automatically and without the need for any further action by Lender, Borrower or
Guarantor, be waived and postponed in favor of and subordinated to the full,
final and indefeasible payment of the Obligations. As additional security for
this Guaranty Agreement and Guarantor's obligations hereunder, but only to the
extent permitted by Section 4.08 of the Indenture, Guarantor, for value
received, hereby unconditionally assigns to Lender and grants to Lender a
security interest in all of Guarantor's right, title, and interest in and with
respect to the Subordinated Indebtedness. Notwithstanding the foregoing, for so
long as no Event of Default then exists or would result from the making or
receipt of the Subordinated Indebtedness, and for so long as the maker of any
payments with respect to the Subordinated Indebtedness is not then insolvent or
would not be rendered insolvent as a result of making such payment, the
Guarantor may make or receive, as the case may be, payments with respect to the
Subordinated Indebtedness pursuant to regularly scheduled payment terms as may
be approved in advance by Lender in writing.
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 covenant 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
Guaranty Agreement; 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.
12. Representations and Warranties. Guarantor represents and warrants to
Lender as follows:
(a) that Guarantor shall, through certain of its subsidiaries in which
Guarantor holds a majority ownership interest, continue to own a
majority ownership interest in each of the Borrower entities,
(b) This Guaranty Agreement has been executed and delivered by Guarantor
and constitutes a legal, valid and binding obligation of Guarantor,
enforceable in accordance with its terms;
(c) The execution, delivery and performance of this Guaranty Agreement
does not and will not violate any provision of law or administrative
regulation, any order of any court or other agency of government, any
provision of any indenture, agreement or other instrument to which
Guarantor is a party (specifically including the FINOVA Loan Agreement
and the Indenture), or by which Guarantor or any of the Guarantor's
properties or assets is bound, and is not and will not be in conflict
with, result in a breach of or constitute (with due notice and/or
lapse of time) a default under any such indenture, agreement or other
instrument, and is not and will not result in the creation or
imposition of any lien, charge or encumbrance of any nature whatsoever
upon any of the properties or assets of Guarantor except as expressly
provided in this Guaranty Agreement;
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(d) Except as disclosed on Exhibit A hereto, there are no actions, suits
or proceedings at law or in equity or by or before the Mexican
regulatory authorities or any other governmental or administrative
instrumentality or arbitration board or other agency or any
investigation of any of Guarantor's affairs or any of the Guarantor's
properties or rights which involve the possibility of materially and
adversely affecting the Resorts, or all or any portion of the
Collateral, or other properties, businesses, profits, prospects or
conditions of Guarantor, or if adversely determined, which would
materially affect Guarantor's ability to perform its obligations under
this Guaranty Agreement;
(e) No Default or Event of Default exists under any Loan Document, and
Guarantor is not in default in any material respect under any
agreement or other instrument to which it is a party or by which it
may be bound, specifically including the FINOVA Loan Agreement and the
Indenture;
(f) Guarantor does not require, nor does the identity or nature of
Guarantor's businesses or properties, or any relationship between
Guarantor and the Borrower or any other Person or any circumstance in
connection with the execution, delivery or performance of this
Guaranty Agreement, require, any consent, approval or authorization
of, or filing, registration or qualification, with, any governmental
or administrative authority on the part of Guarantor, as a condition
to the execution, delivery or performance of this Guaranty Agreement;
(g) All tax returns required to be filed as of the date hereof by
Guarantor in any jurisdiction have been filed, and all taxes,
assessments, fees and other governmental charges against Guarantor or
upon any of its property, income or franchises, which are due and
payable as of the date hereof, have been paid;
(h) As of the date of this Guaranty Agreement and after giving effect
hereto and to the full potential Obligations which the Borrower could
incur under the Loan Documents, and the full potential extent of the
Guaranteed Obligations, the fair saleable value of Guarantor's assets
exceeds its liabilities, Guarantor is meeting current liabilities as
they mature, Guarantor has sufficient capital invested in the Resorts
and any other business in which it is engaging, and Guarantor has not
incurred debts beyond its ability to pay same as they mature;
(i) The financial statements of Guarantor previously delivered to the
Lender are true and correct in all material respects, fairly present
Guarantor's financial condition, and no material adverse change has
occurred in the financial conditions reflected therein since the
respective dates thereof;
(j) As of the date of this Guaranty Agreement, the Guarantor's obligations
hereunder are not subject to any claims, counterclaims, offsets or
defenses against Lender or Borrower; and
(k) The Guarantor, on behalf of itself and its Affiliates, represents and
warrants to Lender that the Loan is "Permitted Debt" (as such term is
defined in the Indenture) and that as of the date hereof there exists
no Default or Event of Default (as the foregoing two terms are defined
in the Indenture) under the Indenture. Guarantor covenants with Lender
that (a) as and when required by the Indenture, the Guarantor shall
cause the Issuers (as such term is 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 (b) it will not amend or modify the
Indenture without the prior written consent of Lender and any such
amendment or modification to the Indenture made without the prior
written consent of Lender shall not be binding upon Lender. Guarantor
further agrees to cause Issuer to promptly (but in any event within
three (3) days after Issuer's receipt of same) supply Lender with a
true and complete copy of any notice sent to Issuers under Section
6.01 of the Indenture, or any other notice alleging a default by the
Issuer under the Indenture.
13. Certain Financial Matters.
(a) Guarantor shall immediately give Lender written notice of any material
adverse change in its financial condition, including but not limited
to, litigation commenced, tax liens filed, defaults claimed under any
indebtedness or borrowed money, or proceedings commenced pursuant to
any Debtor Relief Laws with respect to Guarantor, or an event of
default under either the FINOVA Loan or the Indenture.
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(b) Until payment in full of all the Guaranteed Obligations, Guarantor
will, at its expense, within one hundred twenty (120) days after the
end of each calendar year, furnish Lender with copies of federal (and
if applicable, state) tax returns (or, if not filed within such one
hundred twenty (120) day period, then, when filed) and personal
financial statements, prepared in accordance with United States
generally accepted accounting principles on a basis consistently
applied or in a manner acceptable to Lender. Additionally, Guarantor
will, at its expense, execute, acknowledge and deliver all such
instruments and take all such action as Lender from time to time may
reasonably request in order to ensure to Lender the benefits of this
Guaranty Agreement; provided any such instruments and actions do not
impose any material obligations on Guarantor not otherwise
contemplated herein.
14. No Waiver. No forbearance or delay on Lender's part in declaring any
default, in giving any notice or making any demand, or in exercising or
enforcing any right hereunder or under any Loan Document, shall constitute or
give rise to a waiver or release by Lender, or limit or impair Lender's right to
declare any default, give any notice or make any demand, or exercise or enforce
any right or remedy hereunder or under any of the Loan Documents, without notice
or demand, or prejudice Lender's rights as against Guarantor in any respect.
15. Assignment. Lender may assign, participate or transfer any of its
rights under this Guaranty Agreement and any instrument evidencing all or any
part of the Obligations, and the holder of such rights or instruments shall
nevertheless be entitled to the benefits of this Guaranty Agreement. No such
assignment shall increase or diminish Guarantor's obligations hereunder. The
consent of Guarantor shall not be required for any such assignment and failure
to give notice shall not affect the validity or enforceability of any assignment
of this Guaranty Agreement or Lender's rights, or subject Lender to any
liability. If Lender shall elect to effectuate an assignment, participation or
transfer as contemplated herein, then Guarantor shall not be obligated to pay
any expense in connection with any such assignment, participation or transfer.
16. Miscellaneous.
(a) This Guaranty Agreement shall be binding upon Guarantor and its heirs,
successors and assigns, and shall inure to the benefit of, and be
enforceable by, Lender and its successors and assigns. None of the
terms or provisions of this Agreement may be waived, altered, modified
or amended, except by a written instrument duly signed for and on
behalf of Lender and Guarantor.
(b) This Guaranty Agreement may be executed in any number of separate
counterparts, each of which shall, collectively and separately,
constitute one agreement.
(c) The use of any gender herein shall include all genders. The singular
shall include the plural and vice versa.
(d) All notices or demands hereunder shall be in writing and shall be sent
by registered or certified mail, return receipt requested, or by a
nationally recognized overnight courier service. Notices shall be
deemed received when deposited in a United States post office mail box
or with such nationally recognized courier service, postage prepaid,
properly addressed to the Guarantor, or the Lender, as the case may
be, at the respective mailing addresses set forth in the Loan
Agreement, or to such other addresses as the Guarantor or the Lender
may from time to time specify in writing.
(e) The section titles contained in this Guaranty Agreement are intended
only to provide convenient reference and shall be without substantive
meaning or content of any kind whatsoever.
17. Material Inducement. Guarantor and Lender acknowledge and agree that
the Guarantor's waivers and consents contained in this Guaranty Agreement are a
material inducement to Lender to make the Loan and to engage in the transactions
contemplated by the Loan Documents, and that, but for this Guaranty Agreement
and such waivers and consents, Lender would decline to make the Loan.
18. Expenses. Guarantor agrees to pay all expenses incurred by Lender in
connection with the evaluation, protection, assertion, or enforcement of its
rights under this Guaranty Agreement, including, without limitation, court
costs, audit expenses, collection charges, and attorneys' and paralegals' fees
and disbursements, including, but not limited to costs of any appeal.
19. Relief from Automatic Stay, etc. To the fullest extent permitted by
law, in the event the Borrower or Guarantor shall make application for or seek
relief or protection under the United States federal bankruptcy code
("Bankruptcy Code") or any other United States or Mexican Debtor Relief Laws, or
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in the event that any involuntary petition is filed against the Borrower or
Guarantor under such Code or other Debtor Relief Laws, and not dismissed with
prejudice within forty-five (45) days, the automatic stay provisions of Section
362 of the Bankruptcy Code are hereby modified as to Lender to the extent
necessary to implement the provisions hereof permitting set-off and the filing
of financing statements or other instruments or documents; and Lender shall
automatically and without demand or notice (each of which is hereby waived) be
entitled to immediate relief from any automatic stay imposed by Section 362 of
the Bankruptcy Code or otherwise, on or against the exercise of the rights and
remedies otherwise available to Lender as provided in the Loan Documents. In
addition, in the event relief is sought by or against Guarantor under the
Bankruptcy Code, Guarantor agrees not to seek, directly or indirectly, in any
ensuing bankruptcy proceeding, any extension of the exclusivity period otherwise
available to a debtor under the Bankruptcy Code, including, without limitation,
the exclusivity period provided for under Section 1121(b) of the Bankruptcy
Code. Guarantor agrees not to contest the validity or enforceability of this
Section.
20. Waiver of Jury Trial. TO THE FULLEST EXTENT NOT PROHIBITED BY
APPLICABLE LAW WHICH CANNOT BE WAIVED, THE GUARANTOR HEREBY KNOWINGLY,
VOLUNTARILY, INTENTIONALLY AND IRREVOCABLY WAIVES ANY AND ALL RIGHT TO A TRIAL
BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND OR CLARIFY ANY RIGHT,
POWER, REMEDY OR DEFENSE ARISING OUT OF OR RELATED TO THIS GUARANTY AGREEMENT,
THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREIN OR THEREIN,
WHETHER SOUNDING IN TORT OR CONTRACT OR OTHERWISE, OR WITH RESPECT TO ANY COURSE
OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS
OF ANY PARTY; AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED
BEFORE A JUDGE AND NOT BEFORE A JURY. THE GUARANTOR FURTHER WAIVES ANY RIGHT TO
SEEK TO CONSOLIDATE ANY SUCH LITIGATION IN WHICH A JURY TRIAL HAS BEEN WAIVED
WITH ANY OTHER LITIGATION IN WHICH A JURY TRIAL CANNOT OR HAS NOT BEEN WAIVED.
FURTHER, GUARANTOR HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF LENDER,
INCLUDING LENDER'S COUNSEL, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT LENDER
WOULD NOT, IN THE EVENT OF SUCH LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT
TO JURY TRIAL PROVISION. THE GUARANTOR ACKNOWLEDGES THAT THE PROVISIONS OF THIS
SECTION ARE A MATERIAL INDUCEMENT TO LENDER'S ACCEPTANCE OF THIS GUARANTY
AGREEMENT AND THE OTHER LOAN DOCUMENTS.
21. Governing Law. This Guaranty Agreement and the obligations arising
hereunder shall be governed by, and construed in accordance with, the laws of
the State of Rhode Island (exclusive of its choice-of-laws principles)
applicable to contracts made and performed in such state, and any applicable
laws of the United States of America and the Guarantor hereby expressly submits
to the jurisdiction of such courts for the purpose of any such legal proceedings
and expressly waives for such purpose any other preferential jurisdiction by
reason of present or future domicile or otherwise. Guarantor consents to
personal jurisdiction before the Circuit Court in and for Providence County,
Rhode Island and the United States District Court for the District of Rhode
Island. Guarantor waives any objection which they may now or hereafter have to
venue in Providence County, Rhode Island of any suit, action or proceeding
arising out of or relating to this Guaranty Agreement or the obligations created
hereunder and further waive any claim that Providence County, Rhode Island is
not a convenient forum for any such suit, action or proceeding. Notwithstanding
anything to the contrary provided in this Guaranty Agreement or any other Loan
Document, to the greatest extent permitted under United States and Mexican law,
Guarantor expressly waives any and all claims to jurisdiction in Mexico.
22. Severability, Etc. If any provision of this Guaranty Agreement or the
application thereof to any Person or circumstance shall, to any extent, be
illegal, invalid or unenforceable, the remainder of this Guaranty Agreement or
the application of such provision to Persons or circumstances other than those
as to which it is illegal, invalid or unenforceable, as the case may be, shall
not be affected, and each provision of this Guaranty Agreement shall be legal,
valid and enforceable to the fullest extent permitted by law. The illegality,
invalidity or unenforceability of any provision of this Guaranty Agreement in
any jurisdiction shall not affect the legality, validity or enforceability
thereof in any other jurisdiction. Any right or remedy granted herein or in any
Loan Document is separate, distinct and cumulative and not exclusive of any
other right or remedy granted herein or in any Loan Document or provided by law
or in equity; and all of the same may be exercised concurrently, independently
or successively by Lender in its discretion. Any forbearance on the part of
Lender in exercising any right or remedy shall not constitute a waiver of or
preclude the exercise of such right or remedy. Lender shall not be deemed by any
act or omission to have waived any right or remedy or any default unless such
waiver is in writing and signed by Lender, and then only to the extent
specifically set forth in such writing.
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IN WITNESS WHEREOF, the Guarantor has caused this Guaranty Agreement to be
duly executed as of the first date appearing above.
GUARANTOR:
Raintree Resorts International,
Inc., a Nevada corporation
____________________________ By:_______________________________
Witness Name:
[SEAL]
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STATE OF _________________)
COUNTY OF ________________)
The foregoing instrument was acknowledged before me this ______ of
________________, by _______________________________, as_______________________
of Raintree Resorts International, Inc., a Nevada corporation, on behalf of the
corporation. He/She is personally known to me.
__________________________________
Notary Public
(SEAL)
My Commission Expires:_________________________
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EXHIBIT A
PENDING LITIGATION
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