COMPLETION GUARANTY AGREEMENTCompletion Guarantee |
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Exhibit
10.4
COMPLETION
GUARANTY AGREEMENT
In
order
to induce WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking
association, as Administrative Agent under the Construction Loan Agreement
for
the Lenders therein (hereinafter, together with its successors and assigns,
referred to as the "Bank"),
to
make advances to THE CHALETS AT THE LODGE AT VAIL, LLC, a Colorado limited
liability company (hereinafter referred to as the "Borrower"),
in
connection with a construction loan, pursuant to and in accordance with a
Construction Loan Agreement, dated as of even date herewith, by and between
the
Borrower and the Bank (hereinafter referred to as the "Construction
Loan Agreement")
and
evidenced by one or more promissory notes of even date herewith in the maximum
aggregate principal amount not to exceed $123,000,000 (hereinafter referred
to,
collectively, as the "Note"),
the
undersigned, THE VAIL CORPORATION, a Colorado corporation (hereinafter referred
to as the "Guarantor"),
hereby agrees as follows pursuant to this Completion Guaranty Agreement (this
"Guaranty"):
1. Subject
to the terms hereof, the Guarantor unconditionally and absolutely guarantees
to
the Bank, following an Event of Default by Borrower, completion of construction
of the Improvements (as defined in the Construction Loan Agreement) in the
manner required by the Construction Loan Agreement, the Note and the other
documents and instruments executed in connection therewith (all of the foregoing
being hereinafter collectively referred to as the "Loan Documents").
Specifically, following an Event of Default under the Loan Documents by Borrower
and written request to Guarantor from Bank for performance hereunder, the
Guarantor agrees:
(a) to
perform, complete, and pay for the construction of the Improvements in
accordance with the Plans and Specifications, as such Plans and Specifications
have been or may be modified or amended from time to time, within the time
period allotted therefor (if any) including all extensions thereof, and to
pay
all costs of said construction and all costs associated therewith if the
Borrower shall fail to perform or complete such work as required by the
Construction Loan Agreement;
(b) provided
that such actions by the Bank are authorized pursuant to the Loan Documents
and
provided Guarantor has failed to perform its obligations pursuant to Paragraph
1(a) hereof and such failure is not cured within thirty (30) days after written
notice from the Bank), to reimburse the Bank for all costs and expenses incurred
by the Bank in taking possession of the property described in the deed of trust
securing the Note (hereinafter referred to as the "Property")
and
constructing the Improvements (whether in whole or in part) in accordance with
the Plans and Specifications as approved at the time the Bank takes possession
of the Property subject to such modifications thereto as Bank shall determine
are reasonably necessary provided that the same shall not materially increase
Guarantor’s obligations hereunder (unless as a result of unforeseen site
conditions which have been confirmed by an engineer reasonably acceptable to
Guarantor), including, without limitation, any sums expended in excess of the
principal amount of the Note and whether or not construction is actually
completed;
(c) if
any
mechanic’s or materialman’s liens should be filed, or should attach, with
respect to the Property by reason of the construction undertaken pursuant to
the
Construction Loan Agreement, to cause the removal of such liens within 45 days
after the recording thereof, or the posting of security against the consequences
of their possible foreclosure and the procurement of title insurance policies
or
endorsements insuring the Bank against the consequences of the foreclosure
or
enforcement of such liens, if the Borrower shall fail to take such
actions;
(d) to
pay
the costs and fees of all contractors, architects and engineers employed by
the
Borrower or the Bank (to the extent permitted under the Loan Documents) to
complete the Improvements if said costs and fees are not paid by the
Borrower;
(e) to
pay
the premiums for all policies of insurance required to be furnished by the
Borrower pursuant to the Construction Loan Agreement if such premiums are not
paid by the Borrower and written request from Lender has been given to Guarantor
in connection with any of the foregoing provisions of this Paragraph 1;
and
(f) to
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 Loan Documents 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 complete construction of
the
Improvements, 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 payment of Project
Costs directly related to the construction of the Improvements. Such funds
shall
be disbursed only upon satisfaction by Guarantor of all requirements for
disbursement set forth in the Construction Loan Agreement and in accordance
with
the disbursement procedures set forth in the Construction 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 Lenders the Loans. In connection with Guarantor’s obligations hereunder,
Guarantor shall be entitled to all rights of Borrower under the Construction
Loan Agreement to reallocate the Borrower 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 of
Loans set forth hereinabove or does not comply with the disbursement procedures
set forth in the Construction 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 Completion Obligations
at
its sole cost and expense without any right or recourse to any portion of the
Commitments or Bank may complete the Project itself or cause the Project 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 an Event of Default in order to satisfy any such
requirement or procedure for disbursements described herein, Guarantor shall
have such time to cure an Event of 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 and not of collection, 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 Construction 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. The
Bank,
in its sole discretion, following the delivery of such notice to Borrower as
is
required hereunder or by the Construction Loan Agreement, may proceed to
exercise any right or remedy which the Bank may have under this Guaranty or
the
Representation Agreement 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 construction in accordance with the Construction Loan Agreement
pursuant to the Plans and Specifications, and, subject to Paragraph 1(b), to
add
expenses incurred during the course of such completion to the Borrower’s
principal obligations under the Loan (as defined in the Construction 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 construction. The Guarantor waives any
claims, rights or defenses resulting from (a) the Bank’s proper exercise of its
right to complete construction, and (b) the Bank’s failure to complete
construction. The Guarantor agrees that appropriate expenses to complete
construction in accordance with Paragraph 1(b) hereof, include, without
limitation, payments to release liens, payments to contractors, laborers,
materialmen and suppliers, purchase of equipment, services of experts, interest
on amounts advanced, and all additional categories of expense, both hard and
soft, set forth on the Project Budget defined in and attached to the
Construction Loan Agreement.
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. In addition, Bank agrees to
forbear pursuit of remedies against Borrower for Events of Default during any
period of time that Guarantor is performing its obligations hereunder and
satisfying the requirements for disbursement of Loans pursuant paragraph 2
hereof.
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 there
