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EXHIBIT 10.4
PAYMENT GUARANTY
This Payment Guaranty ("Guaranty") is made as of May 21, 1998,
by Ambassador X, L.P., a Delaware limited partnership ("Guarantor") in favor of
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION ("BofA"), as the agent
for itself and the lenders ("Lenders") from time to time party to the Credit
Agreement (as hereinafter defined) (in such capacity, the "Agent").
Factual Background
The Lenders intend to make a $155,000,000 unsecured revolver to
term credit facility available to AIMCO Properties L.P., a Delaware limited
partnership (the "Borrower") in accordance with the Credit Agreement (the
"Credit Agreement"), dated as of January 26, 1998, amended as of May 8, 1998
pursuant to that First Amendment to Credit Agreement and as of the date
herewith pursuant to that Second Amendment to Credit Agreement, by and among
Borrower, BofA (as Agent and as a Lender) and the other Lenders from time to
time party thereto. In connection with the Credit Agreement, the Borrower has
obtained this Guaranty from the Guarantor, and the Guarantor has provided this
Guaranty in return for Borrower's payment of a guarantee fee. Capitalized
terms used but not defined herein will have the meanings set forth in the
Credit Agreement. As used herein, the term "Facility" shall refer individually
to each of the credit facilities available to the Borrower under the Credit
Agreement.
Guaranty
1. Guaranty of Loan. Guarantor absolutely, unconditionally
and irrevocably guaranties to Agent and the Lenders the full payment of the
Indebtedness (as hereinafter defined), and unconditionally agrees to pay to
Agent and the Lenders the full amount of the Indebtedness. This is a guaranty
of payment, not of collection. If Borrower defaults in the payment when due of
the Indebtedness or any part of it, Guarantor will in lawful money of the
United States pay to Agent and the Lenders, on demand, all sums due and owing
on the Indebtedness, including all interest, charges, fees and other sums,
costs and expenses.
2. Loan. In this Guaranty, the term "Indebtedness" is
broadly defined to mean and include all primary, secondary, direct, indirect,
fixed and contingent obligations of Borrower to pay principal, interest,
prepayment charges, breakage costs, late charges, loan fees and any other fees,
charges, sums, costs and expenses that may be owing at any time under the Loan
Documents (as such term is defined in the Credit Agreement), and shall include,
without limitation, all liabilities and obligations of the Borrower with
respect to Letters of Credit issued under the Credit Agreement, as any or all
of such obligations may
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from time to time be modified, amended, extended or renewed. If the amount
outstanding under the Indebtedness is determined by a court of competent
jurisdiction or in any arbitration proceeding described in Section 10.17 of the
Credit Agreement, that determination shall be conclusive and binding on
Guarantor, regardless of whether Guarantor was a party to the proceeding in
which the determination was made or not.
3. Rights of Agent and the Lenders. Guarantor authorizes
Agent or any Lender to perform any or all of the following acts at any time in
its sole discretion, all without notice to Guarantor and without affecting
Guarantor's obligations under this Guaranty:
(a) Agent or the Requisite Lenders may alter any terms
of the Indebtedness or any part of it, including renewing, compromising,
extending or accelerating, or otherwise changing the time for payment of, or
increasing or decreasing the rate of interest on, the Indebtedness or any part
of it.
(b) Agent or any Lender may take and hold security for
the Indebtedness or this Guaranty, accept additional or substituted security
for either, and subordinate, exchange, enforce, waive, release, compromise,
fail to perfect and sell or otherwise dispose of any such security in
accordance with the terms of the Indebtedness.
(c) Agent or any Lender may direct the order and manner
of any sale of all or any part of any security now or later to be held for the
Indebtedness or this Guaranty, and Agent or any Lender may also bid at any such
sale.
(d) Agent or any Lender may apply any payments or
recoveries from Borrower, Guarantor or any other source, and any proceeds of
any security, to Borrower's obligations under the Loan Documents in such
manner, order and priority as Agent or such Lender may elect, whether or not
those obligations are guarantied by this Guaranty or secured at the time of the
application.
(e) Agent or any Lender may release Borrower of its
liability for the Indebtedness or any part of it.
(f) Agent or any Lender may substitute, add or release
any one or more Guarantors, other guarantors or endorsers.
(g) In addition to the Indebtedness, Agent or any
Lender may extend other credit to Borrower, and may take and hold security for
the credit so extended, all without affecting Guarantor's liability under this
Guaranty.
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4. Guaranty to be Absolute. Guarantor expressly agrees that
until the Indebtedness is paid and performed in full and each and every term,
covenant and condition of this Guaranty is fully performed, Guarantor shall not
be released by or because of:
(a) Any act or event which might otherwise discharge,
reduce, limit or modify Guarantor's obligations under this Guaranty;
(b) Any waiver, extension, modification, forbearance,
delay or other act or omission of Agent or any Lender, or its failure to
proceed promptly or otherwise as against Borrower, Guarantor or any security;
(c) Any action, omission or circumstance that might
increase the likelihood that Guarantor may be called upon to perform under this
Guaranty or that might affect the rights or remedies of Guarantor as against
Borrower;
(d) Any dealings occurring at any time between Borrower
and Agent or any Lender, whether relating to the Indebtedness or otherwise; or
(e) Any action of Agent or any Lender described in
Section 3 above.
Guarantor hereby acknowledges that absent this Section 4,
Guarantor might have a defense to the enforcement of this Guaranty as a result
of one or more of the foregoing acts, omissions, agreement, waivers or matters.
Guarantor hereby expressly waives and surrenders any defense to its liability
under this Guaranty based upon any of the foregoing acts, omissions,
agreements, waivers or matters. It is the purpose and intent of this Guaranty
that the obligations of Guarantor under it shall be absolute and unconditional
under any and all circumstances.
5. Guarantor's Waivers. Guarantor waives:
(a) All statutes of limitations as a defense to any
action or proceeding brought against Guarantor by Agent or any Lender, to the
fullest extent permitted by law;
(b) Any right it may have to require Agent or any
Lender to proceed against Borrower, proceed against or exhaust any security
held from Borrower, or pursue any other remedy in Agent's or any Lender's power
to pursue;
(c) Any defense based on any claim that Guarantor's
obligations exceed or are more burdensome than those of Borrower;
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(d) Any defense based on: (i) any legal disability of
Borrower, (ii) any release, discharge, modification, impairment or limitation
of the liability of Borrower to Agent or any Lender from any cause, whether
consented to by Agent or any Lender or arising by operation of law or from any
bankruptcy or other voluntary or involuntary proceeding, in or out of court,
for the adjustment of debtor-creditor relationships ("Insolvency Proceeding"),
and (iii) any rejection or disaffirmance of the Indebtedness, or any part of
it, or any security held for it, in any such Insolvency Proceeding;
(e) Any defense based on any action taken or omitted by
Agent or any Lender in any Insolvency Proceeding involving Borrower, including
any election to have Agent's or that Lender's claim allowed as being secured,
partially secured or unsecured, any extension of credit by Lender to Borrower
in any Insolvency Proceeding, and the taking and holding by Agent or any Lender
of any security for any such extension of credit;
(f) All presentments, demands for performance, notices
of nonperformance, protests, notices of protest, notices of dishonor, notices
of acceptance of this Guaranty and of the existence, creation, or incurring of
new or additional indebtedness, and demands and notices of every kind except
for any demand or notice by Agent or any Lender to Guarantor expressly provided
for in Section 1;
(g) Any defense based on or arising out of any defense
that Borrower may have to the payment or performance of the Indebtedness or any
part of it; and
(h) Any defense based on or arising out of any action
of Agent or any Lender described in Sections 3 or 4 above.
6. Waivers of Subrogation and Other Rights.
(a) During the existence of an Event of Default by
Borrower, Agent or any Lender, without prior notice to or consent of Guarantor,
may elect to: (i) foreclose either judicially or nonjudicially against any real
or personal property security it may hold for the Indebtedness, (ii) accept a
transfer of any such security in lieu of foreclosure, (iii) compromise or
adjust the Indebtedness or any part of it or make any other accommodation with
Borrower or Guarantor, or (iv) exercise any other remedy against Borrower or
any security. No such action by Agent or any Lender shall release or limit the
liability of Guarantor, who shall remain liable under this Guaranty after the
action, even if the effect of the action is to deprive Guarantor of any
subrogation rights, rights of indemnity, or other rights to collect
reimbursement from Borrower for any sums paid to Agent or any Lender, whether
contractual or arising by operation of law or otherwise. Guarantor expressly
agrees that under no circumstances shall it be deemed to have any right, title,
interest or claim in or to any real or personal property to be held by Agent or
any Lender or any third party after any foreclosure or transfer in lieu of
foreclosure of any security for the Indebtedness.
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(b) Regardless of whether Guarantor may have made any
payments to Lender, Guarantor hereby waives: (i) all rights of subrogation, all
rights of indemnity, and any other rights to collect reimbursement from
Borrower for any sums paid to Agent or any Lender, whether contractual or
arising by operation of law (including the United States Bankruptcy Code or any
successor or similar statute) or otherwise, (ii) all rights to enforce any
remedy that Lender may have against Borrower, and (iii) all rights to
participate in any security now or later to be held by Agent or any Lender for
the Indebtedness, in each case until the full and indefeasible payment and
performance of all Indebtedness, and all obligations of the Guarantors
hereunder.
(c) Guarantor waives all rights and defenses arising
out of an election of remedies by the Agent or any Lender, even though that
election of remedies may affect Guarantor's rights of subrogation and
reimbursement against the Borrower by the operation of law or otherwise. In
addition, Guarantor waives all rights and defenses that Guarantor may have
because the Borrower's indebtedness is secured by real property. This means,
among other things:
(1) Agent and the Lenders may collect from Guarantor
without first foreclosing on any real or personal property collateral pledged
by the Borrower.
(2) If Agent forecloses on any real property collateral
pledged by the Borrower:
(A) The amount of the indebtedness 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.
(B) Agent and the Lenders may collect from
Guarantor even if Agent or any Lender, by foreclosing on the real property
collateral, has destroyed or affected any right Guarantor may have to collect
from the Borrower.
This is an unconditional and irrevocable waiver of any rights and
defenses Guarantor may have because the Borrower's indebtedness is secured by
real property.
7. Revival and Reinstatement. If Agent or any Lender is
required to pay, return or restore to Borrower or any other person any amounts
previously paid on the Indebtedness because of any Insolvency Proceeding of
Borrower, any stop notice or any other reason, the obligations of Guarantor
shall be reinstated and revived and the rights of Agent and such Lender shall
continue with regard to such amounts, all as though they had never been paid.
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8. Information Regarding Owner. Before signing this
Guaranty, Guarantor investigated the financial condition and business
operations of Borrower and such other matters as Guarantor deemed appropriate
to assure itself of Borrower's ability to discharge its obligations under the
Loan Documents. Guarantor assumes full responsibility for that due diligence,
as well as for keeping informed of all matters that may affect Borrower's
ability to pay and perform its obligations to the Agent and the Lenders.
Neither Agent nor any Lender has any duty to disclose to Guarantor any
information which such party may have or receive about Borrower's financial
condition, business operations, or any other circumstances bearing on its
ability to perform.
9. Subordination. Any rights of Guarantor, whether now
existing or later arising, to receive payment on account of any indebtedness
(including interest) owed to it by Borrower or any Subsidiary thereof or to
receive any payment from Borrower or any such Subsidiary other than those
payments or distributions permitted under Sections 7.9(b) and 7.10 of the
Credit Agreement shall at all times be subordinate as to lien and time of
payment and in all other respects to the full and prior repayment of the
Indebtedness. Guarantor shall not be entitled to enforce or receive payment of
any sums hereby subordinated until the Indebtedness has been paid and performed
in full and any such sums received in violation of this Guaranty shall be
received by Guarantor in trust for the Agent and the Lenders.
10. Financial Information. Guarantor shall keep true and
correct financial books and records, using generally accepted accounting
principles consistently applied, or such other accounting principles as the
Requisite Lenders in their reasonable judgment may find acceptable from time to
time. Guarantor represents, warrants and covenants to Agent and the Lenders
that all financial information with respect to the Guarantor delivered or to be
delivered to Agent and the Lenders by the Borrower with respect to Guarantor
under Section 6.1 of the Credit Agreement is or shall be true and correct and
fairly presents or will fairly present the financial position of the Guarantor
for the applicable period. Guarantor shall promptly provide Agent and the
Lenders with any additional audited financial information that Guarantor may
obtain, and such other information concerning its affairs and properties as
Agent or any Lender may reasonably request, including, without limitation,
signed copies of any tax returns if requested by Agent or the Lenders.
11. Guarantor's Representations and Warranties. Guarantor
represents and warrants that:
(a) All financial statements delivered to Agent or the
Lenders were or will be prepared in accordance with generally accepted
accounting principles, or such other accounting principles as may be acceptable
to the Requisite Lenders at the time of their preparation, consistently
applied;
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(b) There has been no material adverse change in
Guarantor's financial condition since the dates of the statements most recently
furnished to Agent and the Lenders; and
(c) All representations and warranties given on behalf
of or with respect to Guarantor contained in Article V of the Credit Agreement
and in any other Loan Document or certification made in connection with the
Credit Agreement are true and correct.
12. Covenants of Guarantor. Guarantor covenants and agrees
that it shall comply with and perform all covenants given on behalf of or with
respect to Guarantor (whether expressly or as a Subsidiary) contained in
Articles VI and VII of the Credit Agreement and in all other Loan Documents.
13. Intentionally Omitted.
14. Reference and Arbitration.
(a) Mandatory Arbitration. Any controversy or claim
between or among the parties, including those arising out of or relating to
this Guaranty or the Loan Documents and any claim based on or arising from an
alleged tort, shall at the request of any party be determined by arbitration.
The arbitration shall be conducted in Los Angeles, California, in accordance
with the United States Arbitration Act (Title 9, U.S. Code), notwithstanding
any choice of law provision in this Guaranty, and under the Commercial Rules of
the American Arbitration Association (the "AAA"). The arbitrator(s) shall give
effect to statutes of limitation in determining any claim. Any controversy
concerning whether an issue is arbitrable shall be determined by the
arbitrator(s). Judgment upon the arbitration award may be entered in any court
having jurisdiction. The institution and maintenance of an action for judicial
relief or pursuit of a provisional or ancillary remedy shall not constitute a
waiver of the right of any party, including the plaintiff, to submit the
controversy or claim to arbitration if any other party contests such action for
judicial relief.
(b) Provisional Remedies, Self-Help and Foreclosure.
No provision of this Section 14 shall limit the right of any party to exercise
self-help remedies such as setoff, foreclosure against or sale of any real or
personal property collateral or security, or to obtain provisional or ancillary
remedies from a court of competent jurisdiction before, after, or during the
pendency of any arbitration.
15. Authorization; No Violation. Guarantor is authorized to
execute, deliver and perform under this Guaranty, which is a valid, binding,
and enforceable obligation of Guarantor in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium, or similar laws affecting creditor's rights generally. The
execution, delivery and performance of this Guaranty are not in
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violation of any applicable law, regulation or ordinance, or any order or
ruling of any court or governmental agency applicable to the Guarantor. The
Guaranty does not conflict with, or constitute a breach or default under, any
agreement to which Guarantor is a party.
16. Additional and Independent Obligations. Guarantor's
obligations under this Guaranty are in addition to its obligations under any
future guaranties, each of which shall remain in full force and effect until it
is expressly modified or released in a writing signed by Agent and consented to
by the Lenders. Guarantor's obligations under this Guaranty are independent of
those of Borrower on the Indebtedness. Agent or the Lenders may bring a
separate action, or commence a separate arbitration proceeding against
Guarantor without first proceeding against Borrower, any other person or any
security that Agent or any Lender may hold, and without pursuing any other
remedy. None of Agent's or any Lender's rights under this Guaranty shall be
exhausted by any action by Agent or any Lender until the Indebtedness has been
paid and performed in full in cash.
17. No Waiver; Consents; Cumulative Remedies. Each waiver by
Agent or the Lenders must be in writing, and no waiver shall be construed as a
continuing waiver. No waiver shall be implied from Agent's or any Lender's
delay in exercising or failure to exercise any right or remedy against
Borrower, Guarantor or any security. Consent by Agent or the Lenders to any
act or omission by Borrower or Guarantor shall not be construed as a consent to
any other or subsequent act or omission, or as a waiver of the requirement for
Agent's or the Lenders' consent to be obtained in any future or other instance.
All remedies of Agent and each Lender against Borrower and Guarantor are
cumulative.
18. No Release. Except as otherwise provided in Section 1,
Guarantor shall not be released, in whole or in part, from its obligations
under this Guaranty except by a writing signed by Agent and all the Lenders.
19. Heirs, Successors and Assigns; Participations. The terms
of this Guaranty shall bind and benefit the heirs, legal representatives,
successors and assigns of Agent, the Lenders and Guarantor; provided, however,
that Guarantor may not assign this Guaranty, or assign or delegate any of its
rights or obligations under this Guaranty, without the prior written consent of
Agent in each instance. Without notice to or the consent of Guarantor, Agent
and any Lender may disclose any and all information in its possession
concerning Guarantor, this Guaranty and any security for this Guaranty to any
actual or prospective purchaser of any securities issued or to be issued by
Agent or such Lender, and to any actual or prospective purchaser or assignee of
any participation or other interest in the Indebtedness and this Guaranty.
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20. Notices.
(a) Delivery. All notices, requests and other communications
provided for hereunder shall be in writing (including, unless the context
expressly otherwise provides, telegraphic, telex, facsimile transmission or
cable communication) and mailed, telegraphed, telexed or delivered to its
address specified on the signature pages hereof, or to such other address as
shall be designated by such party in a written notice to the other party.
(b) Receipt. All such notices and communications shall, when
transmitted by overnight delivery, telegraphed, telecopied by facsimile,
telexed or cabled, be effective when delivered for overnight delivery or to the
telegraph company, transmitted by telecopier, confirmed by telex answerback or
delivered to the cable company, respectively, or if delivered, upon delivery.
(c) Reliance. Agent and each Lender shall be entitled to rely
on the authority of any person purporting to be a person authorized by
Guarantor to give such notice, and neither Agent nor any Lender shall have any
liability to Guarantor or any other person on account of any action taken or
not taken by Agent or such Lender in reliance upon such telephonic or facsimile
notice. The obligation of Guarantor hereunder shall not be affected in any way
or to any extent by any failure by Lender to receive written confirmation of
any telephonic or facsimile notice or the receipt by Agent or a Lender of a
confirmation which is at variance with the terms understood by Agent or such
Lender to be contained in the telephonic or facsimile notice.
21. Rules of Construction. In this Guaranty, the word
"Borrower" includes both the named Borrower and any other person who at any
time assumes or otherwise becomes primarily liable for all or any part of the
obligations of the named Borrower on the Indebtedness. The word "person"
includes any individual, company, trust or other legal entity of any kind. If
this Guaranty is executed by more than one person, the word "Guarantor"
includes all such persons. The word "include(s)" means "include(s), without
limitation," and the word "including" means "including, but not limited to."
When the context and construction so require, all words used in the singular
shall be deemed to have been used in the plural and vice versa. No listing of
specific instances, items or matters in any way limits the scope or generality
of any language of this Guaranty. All headings appearing in this Guaranty are
for convenience only and shall be disregarded in construing this Guaranty.
22. Governing Law. This Guaranty shall be governed by, and
construed in accordance with, the laws of the State of Colorado, without regard
to its choice of law rules.
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23. Costs and Expenses. If any lawsuit or arbitration is
commenced which arises out of, or which relates to this Guaranty, the Loan
Documents or the Indebtedness, the prevailing party shall be entitled to
recover from each other party such sums as the court or arbitrator may adjudge
to be reasonable attorneys' fees (including allocated costs for services of
in-house counsel) in the action or proceeding, in addition to costs and
expenses otherwise allowed by law. In all other situations, including any
Insolvency Proceeding, Guarantor agrees to pay all of the Agent's and each
Lender's costs and expenses, including attorneys' fees (including allocated
costs for services of the Agent's and each Lender's in-house counsel) which may
be incurred in any effort to collect or enforce the Indebtedness or any part of
it or any term of this Guaranty. Without limiting any rights of the Agent or
Lenders under the Credit Agreement, all amounts of any kind due and payable
under this Guaranty (whether for principal, interest, and other costs under the
Indebtedness, or for costs, fees, and expenses for which the Guarantors are
directly responsible hereunder, or otherwise) shall accrue interest from the
time the Agent or the Lenders make demand therefor hereunder until paid in full
in cash to such Agent or the Lenders at the Base Rate, as defined in the Credit
Agreement, plus three (3%) percentage points, except to the extent that any
such amounts are then accruing interest under the Indebtedness, in which case
such Base Rate plus 3% interest rate shall not be applied if the effect would
be to compound the interest to which such obligations are subject to under the
Indebtedness.
24. Covenant. Each Guarantor hereby agrees that it will make
dividend payments on its outstanding preferred stock with its excess cash to
the extent such cash is not required by the Guarantor for its business,
consistent with prudent business practices and its cash requirements.
25. Integration; Modifications. This Guaranty (a) integrates
all the terms and conditions mentioned in or incidental to this Guaranty, (b)
supersedes all oral negotiations and prior writings with respect to its subject
matter, and (c) is intended by Guarantor, Agent and the Lenders as the final
expression of the agreement with respect to the terms and conditions set forth
in this Guaranty and as the complete and exclusive statement of the terms
agreed to by Guarantor, Agent and the Lenders. No representation,
understanding, promise or condition shall be enforceable against any party
hereto unless it is contained in this Guaranty. This Guaranty may not be
modified except in a writing signed by both Agent (with the consent of the
Requisite Lenders) and Guarantor. No course of prior dealing, usage of trade,
parol or extrinsic evidence of any nature shall be used to supplement, modify
or vary any of the terms hereof. As between Agent and the Lenders only,
nothing contained in this Guaranty shall alter the rights and obligations among
Agent and the Lenders set forth in the Credit Agreement.
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26. Miscellaneous. The illegality or unenforceability of one
or more provisions of this Guaranty shall not affect any other provision. Time
is of the essence in the performance of this Guaranty by Guarantor.
[Rest of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the undersigned has executed and delivered
this Guaranty as of the date on the first page.
Guarantor:
AMBASSADOR X, L.P.,
a Delaware limited partnership
By: Ambassador X, Inc.,
a Delaware corporation
By: /s/ XXXXX XXXXXXXXX
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Name:
-------------------------
Its:
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Address Where Notices to Guarantor are to be
Sent:
0000 Xxxxx Xxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Address Where Notices to Agent are to
be Sent:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
000 Xxxxx Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Att'n: Manager - Unit #1357
Addresses Where Notices to the
Lenders
are to be sent:
Per the Credit Agreement
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