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Exhibit 10.5
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, VAIL RESORTS, INC., a Delaware 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 Proj
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