Document:

Exhibit 10.6

    
      

    

    Exhibit
      10.6

    

    DEVELOPMENT
      AGREEMENT GUARANTY

    

    This
      Development Agreement Guaranty ("Guaranty")
      is
      made as of March 19, 2007, by THE VAIL CORPORATION, a Colorado corporation
      ("Guarantor"),
      in
      favor of WELLS 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 §§ 13-50-102 or 13-50-103 (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: The
      Vail
      Corporation

    390
      Interlocken Crescent, Suite 1000

    Broomfield,
      CO 80021

    Attention:  Jeffrey
      W. Jones

    Facsimile:  303-404-6404

     

    With
      a
      copy to: Holme
      Roberts & Owen LLP

    1700
      Lincoln Street, Suite 4100

    Denver,
      CO 80203

    Attention:  Robert
      H. Bach, Esq.

    Facsimile:  303-866-0200

     

    If
      to
      Bank: Wells
      Fargo Bank, National Association

    Denver
      Real Estate Group

    4643
      S.
      Ulster, Suite 1400

    Denver,
      CO 80237

    Attention:  Mr.
      John W. McKinny

    Facsimile:  303-741-0867

     

    With
      a
      copy to:  Ryley
      Carlock & Applewhite

    1999
      Broadway, Suite 1800

    Denver,
      CO 80202

    Attention:
      Andrew A. Folkerth, Esq.

    Facsimile:
      303-595-3159

    

     

    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 Development Agreements, 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 Development
      Agreements. 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:

    

    THE
      VAIL
      CORPORATION, 

    a
      Colorado corporation 

    

    By:
      /s/
      Jeffrey W. Jones

    Jeffrey
      W. Jones

    Senior
      Executive Vice President

    

    

    BANK:

    

    WELLS
      FARGO BANK,

    NATIONAL
      ASSOCIATION, 

    a
      national banking association

     

    By:
      /s/
      John W. McKinny

    Name:  John
      W. McKinny

    Title:  
      Senior Vice President

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

        
        

      

    

    EXHIBIT
      A

    

    Town
      Development AgreementExhibit 10.7

    
      

    

    Exhibit
      10.7

     

    DEVELOPMENT
      AGREEMENT GUARANTY

     

    This
      Development Agreement Guaranty ("Guaranty")
      is
      made as of March 19, 2007, by VAIL RESORTS, INC., a Delaware corporation
      ("Guarantor"),
      in
      favor of WELLS 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 §§ 13-50-102 or 13-50-103 (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.

    390
      Interlocken Crescent, Suite 1000

    Broomfield,
      CO 80021

    Attention:  Jeffrey
      W. Jones

    Facsimile:  303-404-6404

     

    With
      a
      copy to: Holme
      Roberts & Owen LLP

    1700
      Lincoln Street, Suite 4100

    Denver,
      CO 80203

    Attention:  Robert
      H. Bach, Esq.

    Facsimile:  303-866-0200

     

    If
      to
      Bank: Wells
      Fargo Bank, National Association

    Denver
      Real Estate Group

    4643
      S.
      Ulster, Suite 1400

    Denver,
      CO 80237

    Attention:  Mr.
      John W. McKinny

    Facsimile:  303-741-0867

     

    

    

    

    

    With
      a
      copy to:  Ryley
      Carlock & Applewhite

    1999
      Broadway, Suite 1800

    Denver,
      CO 80202

    Attention:
      Andrew A. Folkerth, Esq.

    Facsimile:
      303-595-3159

    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/
      Jeffrey W. Jones

    Jeffrey
      W. Jones

    Senior
      Executive Vice President

    

    

    

    BANK:

    

    WELLS
      FARGO BANK, 

    NATIONAL
      ASSOCIATION, 

    a
      national banking association

    

    By:
      /s/
      John W. McKinny

    Name:  John
      W. McKinny

    Title:  
      Senior Vice President

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

        
        

      

    

    EXHIBIT
      A

    

    Town
      Development Agreement

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