Exhibit 10.2

 

GUARANTY OF RECOURSE OBLIGATIONS

FOR VALUE RECEIVED, and to induce BDS III MORTGAGE CAPITAL B LLC, a Delaware
limited liability company, having an address at 280 Park Avenue, 28th Floor
West, New York, New York 10017 (together with its successors and/or assigns,
“Lender”), to lend to BOULDER ROAD LLC, a Colorado limited liability company,
having its principal place of business at 833 W. South Boulder Road, Louisville,
CO 80027 (“Borrower”), the principal sum of SEVENTEEN MILLION AND 00/100 DOLLARS
($17,000,000.00) (the “Loan”), evidenced by that certain Promissory Note (as the
same may be amended, restated, replaced, split or otherwise modified, the
“Note”) and that certain Loan Agreement (as the same may be amended, restated,
replaced or otherwise modified the “Loan Agreement”) and secured by that certain
Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture
Filing (the “Security Instrument”; together with all other documents, agreements
and certificates executed and/or delivered in connection therewith, as the same
may be amended, restated, replaced, supplemented or otherwise modified from time
to time, the “Loan Documents”), Guarantor (defined below) is delivering this
Guaranty (defined below) to Lender.  Capitalized terms not otherwise defined
herein have the meanings set forth in the Loan Agreement.

1.As of this 26th day of April, 2019, the undersigned, GAIA, INC., a Colorado
corporation, having its principal place of business at 833 W. South Boulder
Road, Louisville, CO 80027 (hereinafter referred to as “Guarantor”), hereby
absolutely and unconditionally guarantees to Lender the prompt and unconditional
payment of the Guaranteed Obligations. As used herein, the term “Guaranteed
Obligations” shall mean: (i) all obligations and liabilities of Borrower for
which Borrower shall be personally liable pursuant to Article 12 of the Loan
Agreement, (ii) the Debt,  (iii) all obligations of Gaia International, Inc., a
Colorado corporation (“Tenant”) under that certain Lease Agreement dated April
1, 2019 by and between Tenant and Borrower (the “Gaia Lease”) to pay all rent
and other payments of Tenant under the Lease for a minimum of ten (10) years
from the date thereof, and, all rent and other payments of the Tenant and any
Affiliates of Tenant for any and all other space leased by any of them at the
Property for a minimum of ten (10) years from the date hereof, and (iv) the
payment of rent to the Borrower for any vacant space at the Property at the same
rate paid by Tenant under its Lease (the rental obligations described in clauses
(iii) and (iv) hereof being referred to as the “Tenant Rental Obligations”).

2.Nature of Guaranty.

(a)It is expressly understood and agreed that this is a continuing guaranty and
that the obligations of Guarantor hereunder are and shall be absolute under any
and all circumstances, without regard to the validity, regularity or
enforceability of the Note, the Loan Agreement, the Security Instrument or the
other Loan Documents, a true copy of each of said documents Guarantor hereby
acknowledges having received and reviewed.

(b)This is a guaranty of payment and not of collection and Guarantor shall be a
primary obligor of the Guaranteed Obligations. Upon (i) the Guaranteed
Obligations being incurred by Lender or upon (ii) any Event of Default by
Borrower under the Note, the Loan Agreement, the Security Instrument or the
other Loan Documents or (iii) upon Tenant’s failure to pay any Tenant Rental
Obligations (subject to applicable notice and cure provisions set forth in the
Gaia Lease), Lender may, at its option, proceed directly and at once, without
notice, against Guarantor to collect and recover the full amount of the
liability hereunder or any portion thereof, without proceeding against Borrower
or any other person, or foreclosing upon, selling, or otherwise disposing of or
collecting or applying against any of the mortgaged property or other collateral
for the Loan.  

(c)It is the intent of Guarantor and Lender that the Guaranteed Obligations are
absolute and unconditional under any and all circumstances and that until the
Guaranteed Obligations are paid in full, and not subject to refund or
disgorgement, the Guaranteed Obligations shall not be discharged or released, in
whole or in part, by any act or occurrence that might, but for the provisions of
this Guaranty, be deemed a legal or equitable discharge or release of a
Guarantor.  This Guaranty shall be deemed to be continuing in nature and,
subject to Section 20, shall remain in full force and effect and shall survive
the exercise of any remedy by Lender under the Security Instrument or any of the
other Loan Documents, including, without limitation, any foreclosure or deed in
lieu of foreclosure.

 

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3.Subordination. Any Indebtedness of Borrower to Guarantor now or hereafter
existing (including, but not limited to, any rights to subrogation Guarantor may
have as a result of any payment by Guarantor under this Guaranty), together with
any interest thereon, shall be, and such Indebtedness is, hereby subordinated to
the prior payment in full of the Debt (including interest accruing on the Note
after the commencement of a proceeding by or against Borrower under the
Bankruptcy Code, which interest the parties agree shall remain a claim that is
prior and superior to any claim of Guarantor notwithstanding any contrary
practice, custom or ruling in cases under the Bankruptcy Code generally).  After
an Event of Default, Guarantor agrees not to accept any payment or satisfaction
of any kind of Indebtedness of Borrower to Guarantor and hereby agrees to assign
such Indebtedness to Lender, including the right to file proof of claim and to
vote thereon in connection with any such proceeding under the Bankruptcy Code,
including the right to vote on any plan of reorganization.  

4.Costs and Expenses of Collection. Guarantor agrees that, with or without
notice or demand, Guarantor will reimburse Lender, to the extent that such
reimbursement is not made by Borrower, for all reasonable, documented costs and
expenses (including reasonable third party counsel fees and any fees of a
special servicer) incurred by Lender in connection with the collection of the
Guaranteed Obligations or any portion thereof or with the enforcement of this
Guaranty of Recourse Obligations (this “Guaranty”).

5.Lender’s Right to Pay Debt. All moneys available to Lender for application in
payment or reduction of the Debt may be applied by Lender in such manner and in
such amounts and at such time or times and in such order and priority as Lender
may see fit to the payment or reduction of such portion of the Debt as Lender
may elect.

6.Waivers. To the extent permitted by Applicable Law, Guarantor waives: (a) any
defense based upon any legal disability or other defense of Borrower, any other
guarantor or other Person, or by reason of the cessation or limitation of the
liability of Borrower from any cause other than full payment of all sums payable
under the Loan Agreement or any of the other Loan Documents; (b) any defense
based upon any lack of authority of the officers, directors, partners or agents
acting or purporting to act on behalf of Borrower or the sole member of Borrower
or any defect in the formation of Borrower or the sole member of Borrower; (c)
any defense based upon the application by Borrower of the proceeds of the Loan
for purposes other than the purposes represented by Borrower to Lender or
intended or understood by Lender or Guarantor; (d) all rights and defenses
arising out of an election of remedies by Lender; (e) any defense based upon
Lender’s failure to disclose to Guarantor any information concerning Borrower’s
financial condition or any other circumstances bearing on Borrower’s ability to
pay all sums payable under the Loan Agreement or any of the other Loan
Documents; (f) any defense based upon any statute or rule of law which provides
that the obligation of a surety must be neither larger in amount nor in any
other respects more burdensome than that of a principal; (g) any defense based
upon Lender’s election, in any proceeding instituted under the Bankruptcy Code,
of the application of Section 1111(b)(2) of the Bankruptcy Code or any successor
statute; (h) any defense based upon any borrowing or any grant of a security
interest under Section 364 of the Bankruptcy Code; (i) presentment, demand,
protest and notice of any kind; and (j) the benefit of any statute of
limitations affecting the liability of Guarantor hereunder or the enforcement
hereof.  In addition, to the extent permitted by Applicable Law, Guarantor
waives all rights and defenses that Guarantor may have because the Debt is
secured by real property.  This means, among other things:  (1) Lender may
collect from Guarantor without first foreclosing on any real or personal
property collateral pledged by Borrower; and (2) if Lender forecloses on any
real property collateral pledged by Borrower, then (i) the amount of the Debt
may be reduced only by the price for which that collateral is sold at the
foreclosure sale, even if the collateral is worth more than the sale price, and
(ii) Lender may collect from Guarantor even if Lender, by foreclosing on the
real property collateral, has destroyed any right Guarantor may have to collect
from Borrower.  The foregoing sentence is an unconditional and irrevocable
waiver of any rights and defenses Guarantor may have because Borrower’s Debt is
secured by real property.  Finally, Guarantor agrees that the payment of all
sums payable under the Loan Agreement or any of the other Loan Documents or any
part thereof or other act which tolls any statute of limitations applicable to
the Note or the other Loan Documents shall similarly operate to toll the statute
of limitations applicable to Guarantor’s liability hereunder.

Guarantor hereby acknowledges that as part of Lender's consideration for
entering into the Loan, Lender has specifically bargained for the waiver and
relinquishment by Guarantor of all such defenses and Guarantor has had the
opportunity to seek and receive legal advice from skilled legal counsel in the
area of financial transactions of the type reflected in this Guaranty and the
Loan Documents.  Guarantor hereby represents and confirms to Lender that
Guarantor is fully informed regarding, and that Guarantor does thoroughly
understand, (i) the nature of all such

 

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possible defenses, (ii) the circumstances under which those defenses may arise,
(iii) the benefits which those defenses might confer upon Guarantor, and (iv)
the legal consequences to Guarantor of waiving those defenses.  Guarantor
acknowledges that Guarantor has both undertaken the Guaranteed Obligations
hereunder and given its unconditional waiver with the intent that this Guaranty
and all such waivers shall be fully enforceable by Lender, and that Lender has
been induced to enter into this transaction in material reliance upon the
presumed full enforceability thereof.

7.Guaranteed Obligations Not Terminated, Affected or Impaired. Guarantor further
agrees that the validity of this Guaranty and the obligations of Guarantor
hereunder shall in no way be terminated, affected or impaired by reason of any
of the following: (a) the assertion by Lender of any rights or remedies which it
may have under or with respect to the Note, the Loan Agreement, the Security
Instrument, or any of the other Loan Documents against any Person obligated
thereunder, or against the owner of the Property, (b) any failure to file or
record any of such instruments or to take or perfect any security intended to be
provided thereby, (c) the release or exchange of any property covered by the
Security Instrument or other collateral for the Loan, (d) Lender’s failure to
exercise, or delay in exercising, any such right or remedy or any right or
remedy Lender may have hereunder or in respect to this Guaranty, (e) the
commencement of a case under the Bankruptcy Code by or against any person
obligated under the Note, the Loan Agreement, the Security Instrument or the
other Loan Documents, or the death of any Guarantor, (f) any partial or total
transfer or pledge of the interests in Borrower, or in any direct or indirect
owner of Borrower, and/or the reconstitution of Borrower as a result of such
transfer or pledge, regardless of whether any of the foregoing is permitted
under the Loan Documents, or (g) any payment made on the Debt arising under the
Note, the Loan Agreement, the Security Instrument or the other Loan Documents,
whether made by Borrower or Guarantor or any other Person, which is required to
be refunded pursuant to any bankruptcy or insolvency law; it being understood
that no payment so refunded shall be considered as a payment of any portion of
the Debt, nor shall it have the effect of reducing the liability of Guarantor
hereunder.  It is the intention of Borrower and Guarantor that the Guaranteed
Obligations hereunder shall not be discharged except by Guarantor’s performance
of such Guaranteed Obligations (and then only to the extent of such performance)
or upon satisfaction in full and discharge of the Debt which is not subject to
recoupment or similar action.  It is further understood, that if Borrower shall
have taken advantage of, or be subject to the protection of, any provision in
the Bankruptcy Code, the effect of which is to prevent or delay Lender from
taking any remedial action against Borrower, including the exercise of any
option Lender has to declare the Debt due and payable on the happening of any
Event of Default, Lender may, as against Guarantor, nevertheless, declare the
Debt due and payable and enforce any or all of its rights and remedies against
Guarantor provided for herein. In the event that pursuant to any Creditors
Rights Laws or any judgment, order or decision thereunder Lender must rescind or
restore any payment or any part thereof received by Lender in satisfaction of
the Guaranteed Obligations, as set forth herein, any prior release or discharge
from the terms of this Guaranty given to Guarantor by Lender shall be without
effect and this Guaranty shall remain in full force and effect.  

8.Certain Acknowledgements. Guarantor warrants and acknowledges that: (a) Lender
would not make the Loan but for this Guaranty; (b) there are no conditions
precedent to the effectiveness of this Guaranty and this Guaranty shall be in
full force and effect and binding on Guarantor regardless of whether Lender
obtains other collateral or any guaranties from others or takes any other action
contemplated by Guarantor; (c) Guarantor has established adequate means of
obtaining from sources other than Lender, on a continuing basis, financial and
other information pertaining to Borrower’s financial condition, the Property and
Borrower’s activities relating thereto, and the status of Borrower’s performance
of obligations under the Loan Documents, and Guarantor agrees to keep adequately
informed from such means of any facts, events or circumstances which might in
any way affect Guarantor’s risks hereunder and Lender has not made any
representation to Guarantor as to any such matters; (d) the most recent
financial statements of Guarantor previously delivered to Lender have been
prepared in accordance with GAAP (consistently applied) and fairly present in
all material respects the financial condition of Guarantor as of the respective
dates thereof, and no material adverse change has occurred in the financial
condition of Guarantor since the respective dates thereof; (e) Guarantor will
not, without the prior written consent of Lender, sell, lease, assign (other
than a collateral assignment), transfer or otherwise dispose all or
substantially all of Guarantor’s assets, other than in the ordinary course of
Guarantor’s business; and (f) Guarantor will not cause or consent to any action
or failure to act that would result in Borrower failing to be at all times a
“single purpose entity” as described in Article 6 of the Loan Agreement.

 

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9.Guarantor’s Representations, Warranties and Covenants. Guarantor hereby
warrants, represents and covenants to Lender that:

(a)Guarantor is duly organized and existing and in good standing under the laws
of the state in which such entity is organized.  Guarantor is currently
qualified or licensed (as applicable) and shall remain qualified or licensed to
do business in each jurisdiction in which the nature of its business requires it
to be so qualified or licensed, except where the failure to be so qualified or
licensed would not have a material adverse effect on Guarantor’s financial
condition.

(b) The execution and delivery by Guarantor of the Loan Documents to which
Guarantor is a party has been duly authorized and the Loan Documents to which
Guarantor is a party constitute valid and binding obligations of Guarantor,
enforceable against Guarantor in accordance with their terms, except as such
enforcement may be limited by bankruptcy, insolvency, moratorium or other laws
affecting the enforcement of creditors’ rights, or by the application of rules
of equity.

(c) The execution, delivery and performance by Guarantor of each of the Loan
Documents to which Guarantor is a party do not violate any provision of any
Applicable Law to which Guarantor is subject or result in any breach or default
under any material contract, obligation, indenture or other instrument to which
Guarantor is a party or by which Guarantor is bound.

(d) There are no pending or, to Guarantor’s knowledge, threatened actions,
claims, investigations, suits or proceedings before any Governmental Authority
which would reasonably be expected to have a material adverse effect on the
financial condition or operations of Guarantor, Borrower and the Property, taken
as a whole.

(e) As of the date hereof, there are no pending assessments by any Governmental
Authority of Guarantor’s income tax payable with respect to any open tax year.

(f) None of the transactions contemplated by the Loan Documents will be or have
been made with an actual intent to hinder, delay or defraud any present or
future creditors of Borrower or Guarantor, and Borrower and Guarantor, on the
date hereof, will have received fair and reasonably equivalent value in good
faith for the continued grant of the liens or security interests effected by the
Loan Documents.  As of the date hereof, Borrower and Guarantor, taken as a
whole, are, and immediately after giving effect to the Loan will be,
Solvent.  As of the date hereof, Borrower and Guarantor, taken as a whole, are
able to pay their debts as they become due.

(g) As of the date hereof and continuing thereafter for the term of the Loan,
the representations and warranties set forth in Sections 5.5 (but with respect
to Guarantor on a consolidated basis for purposes of clause (a)), 5.7, 5.8, 5.21
(with respect to all federal and material state, county, municipal and city
income, personal property and other taxes and tax returns), 5.28 and 5.29 of the
Loan Agreement are true and correct with respect to Guarantor, it being
understood that wherever the term “Borrower” is used in each the foregoing
sections it shall be deemed to be “Guarantor”, provided that the representations
and covenants contained in Sections 5.28 and 5.29 shall not apply to any Person
that owns a direct or indirect interest in any Publicly Traded Restricted Party.

(h) Guarantor shall keep and maintain or will cause to be kept and maintained
proper and accurate books and records reflecting the financial affairs of
Guarantor.  Lender shall have the right from time to time during normal business
hours upon reasonable prior written notice to Guarantor to examine such books
and records at the office of Guarantor or other Person maintaining such books
and records and to make such copies or extracts thereof as Lender shall desire.

10.Financial Covenants of Guarantor. So long as the Loan and any of the
obligations set forth in the Loan Documents remain outstanding, Guarantor shall
maintain (i) a minimum Net Worth (as defined herein) (excluding the Property and
the Loan) of not less than $8,000,000 and (ii) Liquidity (as defined herein) of
no less than $2,000,000 (the above items, (i)  and (ii), collectively, the
“Minimum Financial Criteria”).  

As used herein:

 

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“Net Worth” shall mean total assets of Guarantor minus total liabilities of
Guarantor, on a consolidated basis as calculated in accordance with GAAP.

 

“Liquidity” shall mean (a) Cash and Cash Equivalents of Guarantor and
(b) marketable securities of Guarantor, each on a consolidated basis and valued
in accordance with GAAP.

 

“Cash and Cash Equivalents” shall mean all (A) cash and (B) any of the
following: (x) marketable direct obligations issued or unconditionally
guaranteed by the United States Government or issued by an agency thereof and
backed by the full faith and credit of the United States; (y) marketable direct
obligations issued by any state of the United States of America or any political
subdivision of any such state or any public instrumentality thereof which, at
the time of acquisition, has one of the two highest ratings obtainable from any
two (2) of Standard & Poor’s Corporation, Moody’s Investors Service, Inc. or
Fitch Investors (or, if at any time no two of the foregoing shall be rating such
obligations, then from such other nationally recognized rating services as may
be acceptable to Lender) and is not listed for possible down-grade in any
publication of any of the foregoing rating services; (z) domestic certificates
of deposit or domestic time deposits or repurchase agreements issued by any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia having combined capital and surplus of
not less than $1,000,000,000.00, which commercial bank has a rating of at least
either AA or such comparable rating from Standard & Poor’s Corporation or
Moody’s Investors Service, Inc., respectively; (aa) any funds deposited or
invested by Guarantor or its subsidiaries in accounts maintained with Lender and
which are not held in escrow for, or pledged as security for, any obligations of
Guarantor or Borrower pursuant to the Loan Documents; (bb) money market funds
having assets under management in excess of $2,000,000,000.00 and/or (cc) any
unrestricted stock, shares, certificates, bonds, debentures, notes or other
instrument which constitutes a “security” under the Security Act of 1933 (other
than Guarantor, Borrower and/or any of their affiliates) which are freely
tradable on any nationally recognized securities exchange.

 

11.Financial Condition and Reports. So long as the Debt remain outstanding
(other than, following the termination of the Loan Agreement and all other Loan
Documents, contingent indemnification obligations as to which no claim has been
made), Guarantor shall provide or make available to Lender (i) within ninety
(90) days after the end of each fiscal year the audited , consolidated financial
statements of Guarantor and its subsidiaries, including (A) a consolidated
balance sheet for the period then ended, a consolidated income statement for the
period covered thereby, (B) a consolidated statement of cash flow and (C) a
consolidated statement of change in financial position, which financial
statements shall be prepared in accordance with GAAP, together with a
certificate of Guarantor that (i) the Minimum Financial Criteria continues to be
satisfied (including Guarantor’s calculation of Guarantor’s Net Worth and
Liquidity), and (ii) that such financial statements fairly present, in all
material respects, the consolidated financial condition of Guarantor and its
subsidiaries as at the dates indicated and the consolidated results of their
operations and their cash flows for the periods indicated. Guarantor agrees that
all financial statements shall not contain any misrepresentation or omission of
a material fact which would make such financial statements inaccurate,
incomplete or otherwise misleading in any material respect.

Furthermore, each legal entity obligated on this Guaranty hereby authorizes
Lender to order and obtain, from a credit reporting agency of Lender’s choice, a
third-party credit report on such legal entity and individual.

12.[Intentionally Omitted]

13.No Consent. Guarantor further covenants that this Guaranty shall remain and
continue in full force and effect as to any modification, extension or renewal
of the Note, the Loan Agreement, the Security Instrument, or any of the other
Loan Documents, that Lender shall not be under a duty to protect, secure or
insure any security or lien provided by the Security Instrument or other such
collateral, and that other indulgences or forbearance may be granted under any
or all of such documents, all of which may be made, done or suffered without
notice to, or further consent of, Guarantor.

14.Notices. As a further inducement to Lender to make the Loan and in
consideration thereof, Guarantor further covenants and agrees (a) that in any
action or proceeding brought by Lender against Guarantor on this Guaranty,
Guarantor shall and does hereby waive trial by jury, and Lender, by acceptance
of this Guaranty, hereby waives trial by jury in any action brought by Lender
against Guarantor on this Guaranty, (b) Guarantor will

 

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maintain a place of business or an agent for service of process in the State of
New York and give prompt notice to Lender of the address of such place of
business and of the name and address of any new agent appointed by it, as
appropriate, (c) the failure of Guarantor’s agent for service of process to give
it notice of any service of process will not impair or affect the validity of
such service or of any judgment based thereon, (d) if, despite the foregoing,
there is for any reason no agent for service of process of Guarantor available
to be served, and if Guarantor at that time has no place of business in the
State of New York then Guarantor irrevocably consents to service of process by
registered or certified mail, postage prepaid, to it at its address given in or
pursuant to the first paragraph hereof, Guarantor hereby waiving personal
service thereof, (e) Guarantor initially and irrevocably designates Corporation
Service Company, with offices on the date hereof at 1180 Avenue of the Americas,
Suite 210, New York, NY 10036-8401, to receive for and on behalf of Guarantor
service of process in the State of New York with respect to this Guaranty, (f)
with respect to any claim or action arising hereunder, Guarantor (i) irrevocably
submits to the nonexclusive jurisdiction of the courts of the State of New York
and the United States District Court located in New York County, and appellate
courts from any thereof, and (ii) irrevocably waives any objection which it may
have at any time to the laying on venue of any suit, action or proceeding
arising out of or relating to this Guaranty brought in any such court,
irrevocably waives any claim that any such suit, action or proceeding brought in
any such court has been brought in an inconvenient forum, and (g) nothing in
this Guaranty will be deemed to preclude Lender from bringing an action or
proceeding with respect hereto in any other jurisdiction.

15.Successors and Assigns. Each reference herein to Lender shall be deemed to
include its successors and assigns, to whose favor the provisions of this
Guaranty shall also inure.  Each reference herein to Guarantor shall be deemed
to include the successors and assigns of Guarantor, all of whom shall be bound
by the provisions of this Guaranty.

16.Entire Agreement. All understandings, representations and agreements
heretofore had with respect to this Guaranty are merged into this Guaranty which
alone fully and completely expresses the agreement of Guarantor and Lender.

17.Counterparts. This Guaranty may be executed in one or more counterparts by
some or all of the parties hereto, each of which counterparts shall be an
original and all of which together shall constitute a single agreement of
Guaranty.  The failure of any party hereto to execute this Guaranty, or any
counterpart hereof, shall not relieve the other signatories from their
obligations hereunder.

18.Amendments. This Guaranty may not be modified, amended, waived, extended,
changed, discharged or terminated orally or by any act or failure to act on the
part of Lender or Guarantor, but only by an agreement in writing signed by the
party against whom enforcement of any modification, amendment, waiver,
extension, change, discharge or termination is sought.

19.Governing Law. This Guaranty shall be deemed to be a contract entered into
pursuant to the laws of the State of New York and shall in all respects be
governed, construed, applied and enforced in accordance with applicable federal
law and the laws of the State of New York, without reference or giving effect to
any choice of law doctrine.

 

 

 

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IN WITNESS WHEREOF, Guarantor has duly executed this Guaranty of Recourse
Obligations as of the day and year first above written.

GUARANTOR:

GAIA, INC., a Colorado corporation

 

 

 

By: /S/ Paul Tarell

 

       Name: Paul Tarell

       Title: Chief Financial Officer

 

 

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