DEVELOPMENT AGREEMENT GUARANTY
Exhibit
10.7
This
Development Agreement Guaranty ("Guaranty")
is
made as of March 19, 2007, by VAIL RESORTS, INC., a Delaware corporation
("Guarantor"),
in
favor of ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION, a national banking association,
as Administrative Agent under the Loan Agreement (defined below) for the Lenders
therein (hereinafter, together with its successors and assigns, referred to
as
the "Bank").
FACTUAL
BACKGROUND
A. Guarantor
is executing this Guaranty to induce Bank to make a loan to The Chalets at
the
Lodge at Vail, LLC, a Colorado limited liability company ("Borrower"),
in
the maximum principal amount of $123,000,000.00 (the "Loan").
The
Loan is being made under that certain Construction Loan Agreement of even date
herewith between Bank and Borrower (the "Loan
Agreement").
B. The
Loan
is evidenced by one or more promissory notes of even date herewith (the
"Note").
The
Note is secured by, among other things, that certain Deed of Trust to Public
Trustee, Security Agreement, Financing Statement, Assignment of Rents and Leases
and Fixture Filing of even date herewith (the "Deed
of Trust")
covering certain real and personal property, as therein described (all
collectively, the "Property").
This
Guaranty is one of several loan documents, as defined and designated in the
Loan
Agreement. The loan documents also include the Loan Agreement, the Note, the
Deed of Trust and certain other specified instruments and
agreements.
C. The
Borrower or a related party entered into that certain Front Door Development
Agreement dated effective July 18, 2006, by and between the Town of Vail, and
the Vail Corporation, d/b/a Vail Associates, Inc., as assigned to Borrower
pursuant to an Assignment of Development Agreement dated March 19, 2007 (the
"Town
Development Agreement");
whereby Borrower, as successor in interest to such real property, is, under
the
terms of the Town Development Agreement obligated as part of the development
of
the Property to complete certain on-site and offsite improvements and perform
other obligations, and the completion of certain of those improvements and
the
performance of those obligations is required in connection with the completion
of the Project. The purpose of this Guaranty is for Guarantor to guarantee
Borrower’s satisfaction of its obligations under the Town Development
Agreement.
D. The
obligations that Guarantor is guaranteeing pursuant to this Agreement are part
of the Borrower’s obligations under the Town Development Agreement that are
required to be completed in order to achieve Completion (as defined in the
Loan
Agreement).
E. Each
capitalized term used herein and not otherwise defined has the meaning given
to
such term in the Loan Agreement.
GUARANTY
NOW,
THEREFORE, in consideration of the above recitals, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Guarantor hereby agrees as follows:
1. Subject
to the terms hereof, Guarantor unconditionally and absolutely guarantees to
Bank: (i) the completion of the construction of all of the improvements and
performance of all obligations (the "Improvements")
required to be constructed and performed by Borrower pursuant to the Town
Development Agreement which are a condition to approval of the Project by the
Town or the issuance of certificates of occupancy for the Project, as set forth
in the Town Development Agreement, a copy of which is attached hereto as
Exhibit
A
and
incorporated herein by this reference; (ii) the payment of all monetary
obligations of Borrower under the Town Development Agreement which are a
condition to approval of the Project by the Town or the issuance of certificates
of occupancy for the Project,; and (iii) the satisfaction of all of Borrower’s
other obligations under the Town Development Agreement which are a condition
to
approval of the Project by the Town or the issuance of certificates of occupancy
for the Project (collectively, the "Guaranteed
Obligations").
Specifically, after written request to Guarantor from Bank for performance
hereunder, Guarantor agrees that:
(a) following
Borrower’s failure to complete the construction of all or any portion of the
Improvements in accordance with the terms of the Town Development Agreement,
Guarantor shall complete construction of such Improvements, within the time
period allotted therefor (if any) including all extensions thereof, and pay
all
costs of said construction and all costs associated therewith;
(b) following
Borrower’s failure to pay all or any portion of the costs and fees of all
contractors, architects and engineers employed by the Borrower or Bank to
complete construction of all or any portion of the Improvements in accordance
with the terms of the Town Development Agreement, Guarantor shall pay all of
such unpaid costs and fees;
(c) following
Borrower’s failure to pay all or any portion of any monetary obligations of
Borrower under the Town Development Agreement, including, but not limited to,
the traffic impact fee set forth in Section 7 of the Town Development Agreement,
Guarantor shall pay all of such unpaid monetary obligations;
(d) following
Borrower’s failure to satisfy any other obligation of Borrower under the Town
Development Agreement not covered by (a) through (c), Guarantor shall fully
satisfy such obligation, at Guarantor’s sole cost and expense;
(e) provided
Guarantor has failed to perform its obligations pursuant to (a) through (d)
above and such failure is not cured within thirty (30) days after written notice
from the Bank, Guarantor shall reimburse Bank for all costs and expenses
incurred by the Bank in satisfying (whether in whole or in part) any of the
Guaranteed Obligations in accordance with the Town Development Agreement,
including, without limitation, any sums expended in excess of the principal
amount of the Note and whether or not satisfaction of the Guaranteed Obligations
are actually completed; and
(f) Guarantor
shall pay all of the Bank’s reasonable costs and expenses, including, without
limitation, attorney’s fees, incurred in the enforcement of this Guaranty and
the provisions of the Town Development Agreement covered by this
Guaranty.
2. Without
in any way limiting the generality of the foregoing, following written request
from Bank for performance by Guarantor hereunder to satisfy any of the
Guaranteed Obligations, Bank shall make available any undisbursed Commitments
which are not subject to legal impairment to disbursement pursuant to a court
order, a mechanic’s or materialman’s lien, a bankruptcy proceeding or notice to
disburser and which have been designated in the Project Budget for the
satisfaction of such Guaranteed Obligations. Improvements not included in Bank’s
approved Project Budget shall be completed at the sole cost and expense of
the
Guarantor. Such funds shall be disbursed only upon satisfaction by Guarantor
of
all requirements for disbursement set forth in the Loan Agreement and in
accordance with the disbursement procedures set forth in the Loan Agreement,
and
any amendments thereof, except that Guarantor shall not be required to satisfy
Borrower’s requirements set forth in Sections 6.1 (d) and 6.2 (a) and (c)(i),
(or to cure any Events of Default by Borrower in connection with the matters
addressed in those sections) nor shall Guarantor be obligated to repay to Bank
and the Lenders the Loan. In connection with Guarantor’s obligations hereunder,
Guarantor shall be entitled to all rights of Borrower under the Loan Agreement
to reallocate the Contingency Fund so long as Guarantor has satisfied the
requirements set forth in the preceding sentence. In the event that Guarantor
does not satisfy all of the requirements for disbursement set forth hereinabove
or any of the disbursement procedures set forth in the Loan Agreement in any
material respect (and such failure is not cured within ten (10) days after
request by Bank), or any representation warranty or certification made by
Guarantor in the Representation Agreement shall prove to be false or misleading:
(i) Bank shall have no further obligation to disburse any portion of the
Commitments to Guarantor; (ii) Bank may pursue whatever remedies it may have
available at law or in equity for breach of such terms and conditions; and
(iii)
at Bank’s option, to be exercised in its sole discretion, Guarantor shall
perform the Guaranteed Obligations at its sole cost and expense without any
right or recourse to any portion of the Commitments or Bank may complete the
Guaranteed Obligations itself or cause the Guaranteed Obligations to be
completed by a third party and charge the entire cost thereof to Guarantor.
In
connection with the Guarantor’s obligations hereunder, whenever it is necessary
for Guarantor to cure a Borrower Default in order to satisfy any such
requirement or procedure for disbursements described herein, Guarantor shall
have such time to cure a Borrower Default as may be granted by Bank, in its
sole
discretion, but in no event less than ten (10) Business Days after Guarantor
receives a request from Bank under Paragraph 1 for performance
hereunder.
3. This
is a
guaranty of performance of the Town Development Agreement and not of collection
of the Loan, and the Bank shall not be required to take any action against
the
Borrower (other than providing such notice to Borrower as is required hereunder
or by the Loan Agreement) or resort to any other security given for the
performance of the Borrower’s obligations as a precondition to the obligations
of the Guarantor hereunder. Nothing herein shall constitute a guaranty of
repayment of the Loan by Guarantor.
4. Bank,
in
its sole discretion, following the delivery of such notice to Borrower as is
required hereunder or by the Loan Agreement, may proceed to exercise any right
or remedy which the Bank may have under this Guaranty without pursuing or
exhausting any right or remedy which it may have against the Borrower, against
any other guarantor or against any other person or entity, and the Bank may
proceed to exercise any right or remedy which the Bank may have under this
Guaranty without regard to any actions or omissions of the Borrower or any
other
person or entity.
5. The
Guarantor authorizes the Bank, without notice to the Guarantor and without
impairing the liability of the Guarantor hereunder, to exercise the Bank’s right
to complete the Guaranteed Obligations in accordance with this Guaranty, and,
subject to Paragraph 1(e), to add expenses incurred during the course of such
completion to the Borrower’s principal obligations under the Loan (as defined in
Loan Agreement). The Guarantor acknowledges that the Bank has no obligation
to
exercise such right, and that the Bank is entitled to make expenditures toward
completion without actually completing the Guaranteed Obligations. The Guarantor
waives any claims, rights or defenses resulting from (a) the Bank’s proper
exercise of its right to complete the Guaranteed Obligations, and (b) the Bank’s
failure to complete the Guaranteed Obligations.
6. The
obligations of the Guarantor hereunder shall be direct and independent of any
obligations of the Borrower to the Bank and absolute and unconditional
irrespective of the validity, legality or enforceability of any of the Loan
Documents, or any other circumstances (except for those actions of the Bank
in
violation of the Loan Documents or applicable law) which might otherwise
constitute a legal or equitable discharge of a surety or guarantor (including,
without limitation, the finding or conclusions of any proceeding under the
federal Bankruptcy code or of similar present or future federal or state law),
it being agreed that the obligations of the Guarantor hereunder shall not be
discharged except by payment or performance as herein provided.
7. From
and
after the date that Guarantor satisfies the requirements for disbursements
of
Loans as set forth in paragraph 2 hereof, and so long as there shall occur
no
other Event of Default, interest shall accrue on the outstanding principal
balance of the Loans at the LIBOR-Based Rate.
8. Without
limiting the generality of Paragraph 5 above, the Guarantor hereby consents
and
agrees that, at any time and from time to time:
(a) any
action may be taken under any of the Loan Documents in the exercise of any
remedy, power or privilege therein contained (including, without limitation,
the
acceleration of the maturity of the Note) or otherwise with respect thereto,
or
such remedy, power or privilege may be waived, omitted, or not
enforced;
(b) the
time
for the Borrower’s performance of or compliance with any term, covenant or
agreement on its part to be performed or observed under any of the Loan
Documents may be extended, or such performance or compliance waived, or failure
in or departure from such performance or compliance consented to;
(c) any
of
the Loan Documents (except this Guaranty), or any terms thereof may be amended
or modified in any respect (including without limitation, with respect to
interest on the Note); and
(d) the
Guarantor waives any rights it might otherwise have under Colorado Revised
Statutes §§ ▇▇-▇▇-▇▇▇ or ▇▇-▇▇-▇▇▇ (or under any corresponding future
statute or rule of law in any jurisdiction) by reason of any release of fewer
than all of the guarantors of the obligations of the Guarantor hereunder, all
in
such manner and upon such terms as the Bank may deem proper, and without notice
to or further assent from the Guarantor, and all without affecting this Guaranty
or the obligations of the Guarantor hereunder, which shall continue in full
force and effect until all of the obligations of the Guarantor hereunder shall
have been fully paid and performed.
9. The
Guarantor hereby waives notice of acceptance of this Guaranty, presentment,
demand, protest, notice of the occurrence of an event of default under the
Loan
Documents and any other notice of any kind whatsoever, with respect to any
or
all of the obligations of Guarantor hereunder and promptness in making any
claim
or demand hereunder; but no act or omission of any kind shall in any way affect
or impair this Guaranty.
10. The
Guarantor hereby represents and warrants as follows:
(a) The
Guarantor is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction indicated in the first paragraph hereof
and
has all requisite power and authority, corporate or otherwise, to conduct its
business, to own its properties and to execute and deliver, and to perform
all
of its obligations under, this Guaranty.
(b) The
execution, delivery and performance of this Guaranty by Guarantor will not
(i)
require any consent or approval of any person, (ii) violate any provision of
any
law, rule, regulation, order, writ, judgment, injunction, decree, determination
or award presently in effect having applicability to the Guarantor, or (iii)
result in a breach of or constitute a default under any indenture or loan or
credit agreement or any other agreement, lease or instrument to which the
Guarantor is a party or by which Guarantor or its properties may be bound or
affected; and the Guarantor is not in default under any such law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
or
any such indenture, agreement, lease or instrument.
(c) This
Guaranty constitutes a legal, valid and binding obligation of the Guarantor
enforceable against Guarantor in accordance with its terms, except as limited
by
applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other laws or equitable principles relating to or affecting
the
rights of creditors and general principles of equity.
(d) There
are
no actions, suits or proceedings pending or, to the knowledge of the Guarantor,
threatened against or affecting it or any of its assets before any court or
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, which, if determined adversely to the Guarantor, would
have
a material adverse effect on any of his financial condition, properties, or
operations.
(e) No
authorization, consent, approval, license, exemption of or filing or
registration with any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, is or will be necessary
to the valid execution, delivery or performance by the Guarantor of this
Guaranty.
11. No
failure or delay on the part of the Bank in exercising any right, power or
remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy
hereunder. No amendment, modification, termination, or waiver of any provision
of this Guaranty nor consent to any departure by the Guarantor therefrom, shall
in any event be effective unless the same shall be in writing and signed by
the
Bank (and Guarantor as to any modification or amendment of this Guaranty),
and
then such waiver or consent shall be effective only in the specific instance
and
for the specific purpose for which given. No notice or demand on the Guarantor
in any case shall entitle the Guarantor to any other or further notice or demand
in similar or other circumstances.
12. All
notices, requests, demands, statements, authorizations, approvals, directions
and other communications provided for herein shall be given or made in writing
and shall be deemed sufficiently given or served for all purposes as of the
date
(i) when hand delivered (provided that delivery shall be evidenced by a receipt
executed by or on behalf of the addressee), (ii) one (1) Business Day after
being sent by reputable overnight courier service (with delivery evidenced
by
written receipt), or (iii) with a simultaneous delivery by one of the shall
mean
in clause (i) or (ii) above, by facsimile, when sent, with confirmation and
a
copy sent by first class mail, in each case addressed to the intended recipient
at the address specified below; or, as to any party, at such other address
as
shall be designated by such party in a notice to each other party hereto.
Guarantor shall only be required to send notices, requests, demands, statements,
authorizations, approvals, directions and other communications to Bank on behalf
of all of the Lenders.
If
to
Guarantor: Vail
Resorts, Inc.
▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
With
a
copy to: Holme
▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇
▇. ▇▇▇▇, Esq.
Facsimile: 303-866-0200
If
to
Bank: ▇▇▇▇▇
Fargo Bank, National Association
Denver
Real Estate Group
▇▇▇▇
▇.
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention: ▇▇.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
With
a
copy to: ▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Facsimile:
▇▇▇-▇▇▇-▇▇▇▇
Facsimile: 303-634-2020
Bank
or
Guarantor may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications.
13. The
Guarantor hereby waives and agrees not to assert or take advantage of any duty
on the part of the Bank to disclose to the Guarantor any facts Bank may now
or
hereafter know about the Borrower, regardless of whether the Bank has reason
to
believe that any such facts materially increase the risk beyond that which
the
Guarantor intends to assume or has reason to believe that such facts are unknown
to the Guarantor or has a reasonable opportunity to communicate such facts
to
the Guarantor, it being understood and agreed that the Guarantor is fully
responsible for being and keeping informed of the financial condition of the
Borrower and of any and all circumstances bearing the risk of non-payment on
any
obligations hereby guaranteed.
14. The
Guarantor will file all claims against the Borrower in any bankruptcy or other
similar proceedings in which the filing of claims is required by law upon any
indebtedness of the Borrower to the Guarantor and will assign to the Bank all
rights of the Guarantor thereunder. In all such cases, whether in
administration, bankruptcy or otherwise, the person or persons authorized to
pay
such claim shall pay to the Bank the full amount thereof and to the full extent
necessary for that purpose, the Guarantor hereby assigns to the Bank all of
the
Guarantor’s rights to any such payments or distributions to which the Guarantor
would otherwise be entitled; provided that the Bank shall thereafter be
obligated to deliver to Guarantor any payments or distributions so received
by
the Bank in excess of the amounts due from Guarantor to the Bank
hereunder.
15. Except
to
the extent permitted by the Loan Agreement, to the extent that the Guarantor
receives any payments, distributions or any other consideration with respect
to
any shares, debentures or partnership interests of the Borrower however
described, the Guarantor shall immediately pay over and deliver such payments,
distributions or other consideration to the Bank to the extent that such
payments, distributions or other consideration were made in contravention of
the
Loan Documents.
16. By
execution hereof, the Guarantor certifies to the Bank that the Guarantor has
received a copy of the Town Development Agreement, the Loan Agreement and all
other Loan Documents in execution form and represents that Guarantor is
knowledgeable of the contents thereof.
17. Wherever
possible each provision of this Guaranty shall be interpreted in such manner
as
to be effective and valid under applicable law, but if any provision of this
Guaranty shall be prohibited by or invalid under such law, such provision shall
be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this
Guaranty.
18. The
Guarantor hereby represents and agrees that this is a continuing guaranty and
(a) shall remain in full force and effect until such time as all of
Guaranteed Obligations are satisfied or the Loan has been repaid in full, (b)
shall be governed by, and construed in accordance with, the laws of the State
of
Colorado, (c) shall be binding upon the Guarantor, its successors, and assigns,
and (d) shall inure to the benefit of and be enforceable by the Bank and its
respective successors, transferees and assigns. Without limiting the generality
of the foregoing clause (d), the Bank may assign or otherwise transfer the
Note
held by it to any other person or entity, and such subsequent holder of the
Note
shall thereupon become vested with all the powers and rights in respect thereof
granted to the Bank herein or otherwise.
19. The
Guarantor shall furnish to the Bank as and when required by the Construction
Loan Agreement the financial statements required to be furnished by the
Guarantor.
20. The
Guarantor shall indemnify and hold the Bank harmless from any loss, cost, claim
or expense (including, without limitation, attorneys’ fees) suffered by the Bank
as the result of a claim by third party arising from any failure by the Borrower
or the Guarantor to satisfy Borrower’s obligations under the Town Development
Agreement. Guarantor’s liability under this Paragraph 20 is in addition to the
sums referenced in Paragraph 1 above.
21. Both
the
Guarantor and the Bank hereby waives any right to jury trial of any claim,
cross-claim or counter-claim relating to or arising out of or in connection
with
this Guaranty.
22. FOR
PURPOSES OF ANY ACTIONS RELATING TO THIS GUARANTY, THE GUARANTOR AND THE BANK
CONSENT TO THE PERSONAL JURISDICTION OF THE STATE AND FEDERAL COURTS OF THE
STATE OF COLORADO.
23. This
Guaranty may be executed in any number of counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument.
[REMAINDER
OF PAGE INTENTIONALLY BLANK]
SIGNED
AND DELIVERED as of the date first above written.
GUARANTOR:
VAIL
RESORTS, INC., a Delaware corporation
By:
/s/
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇
Senior
Executive Vice President
BANK:
▇▇▇▇▇
FARGO BANK,
NATIONAL
ASSOCIATION,
a
national banking association
By:
/s/
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇
▇. ▇▇▇▇▇▇▇
Title:
Senior Vice President
EXHIBIT
A
Town
Development Agreement