AMENDED AND RESTATED
UNCONDITIONAL GUARANTY AGREEMENT
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THIS UNCONDITIONAL GUARANTY AGREEMENT (this "Guaranty"), dated as
of December 30, 1997, made by INSIGNIA PROPERTIES TRUST, a Maryland real estate
investment trust (the "Guarantor"), in favor of FIRST UNION NATIONAL BANK, a
national banking association, as Administrative Agent for the ratable benefit
of the Agents and the Lenders party to the Credit Agreement dated December 30,
1997 between Insignia Properties, L.P., a Delaware limited partnership, as
Borrower, the Lenders, and the Agents (as amended, modified, restated or
supplemented, the "Credit Agreement").
STATEMENT OF PURPOSE
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Pursuant to the terms of the Credit Agreement, the Lenders have
agreed to extend a certain credit facility to the Borrower in the aggregate
principal amount of up to the Aggregate Commitment. The Guarantor is the
general partner of the Borrower, and all Loans to the borrower will inure,
directly or indirectly, to the benefit of the Guarantor.
In connection with the transactions contemplated by the Credit
Agreement, the Lenders have requested, and the Guarantor has agreed to execute
and deliver, this Guaranty.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth herein, and to induce the Lenders to make available Loans
pursuant to the Credit Agreement, it is agreed as follows:
SECTION 1. Definitions. Capitalized terms used herein (including
the preamble hereof) shall have the meanings assigned to them in the Credit
Agreement, unless the context otherwise requires or unless otherwise defined
herein. References in the Credit Agreement to a "Guaranty Agreement" or herein
to this "Guaranty" shall include and mean this Guaranty, including all
amendments and supplements hereto now or hereafter in effect.
SECTION 2. Guaranty of Obligations of Borrower. The Guarantor
hereby, jointly and severally with any other guarantor, unconditionally
guarantees to the Agents for the ratable benefit of the Agents and the Lenders,
and their respective successors, endorsees, transferees and assigns, the prompt
payment and performance of all Obligations of the Borrower, whether primary or
secondary (whether by way of endorsement or otherwise), whether now existing or
hereafter arising, whether or not from time to time reduced or extinguished
(except by payment thereof) or hereafter increased or incurred, whether or not
recovery may be or hereafter become barred by the statute of limitations,
whether enforceable or unenforceable as against the Borrower, whether or not
discharged, stayed or otherwise affected by any bankruptcy, insolvency or other
similar law or proceeding, whether created directly with the Agents or any
Lender or acquired by the Agents or any Lender through assignment, endorsement
or otherwise, whether matured or unmatured, whether joint or several, as and
when the same become due and payable (whether at maturity or earlier, by reason
of acceleration, mandatory
repayment or otherwise), in accordance with the terms of any such instruments
evidencing any such obligations, including all renewals, extensions or
modifications thereof (all Obligations of the Borrower to the Agents or any
Lender, including all of the foregoing, being hereinafter collectively referred
to as the "Guaranteed Obligations"); provided, that notwithstanding anything to
the contrary contained herein, it is the intention of the Guarantor, the Agents
and the Lenders that, in any proceeding involving the bankruptcy,
reorganization, arrangement, adjustment of debts, relief of debtors,
dissolution or insolvency or any similar proceeding with respect to the
Guarantor or its assets, the amount of the Guarantor's obligations with respect
to the Guaranteed Obligations shall be in, but not in excess of, the maximum
amount thereof not subject to avoidance or recovery by operation of applicable
law governing bankruptcy, reorganization, arrangement, adjustment of debts,
relief of debtors, dissolution, insolvency, fraudulent transfers or conveyances
or other similar laws (including, without limitation, 11 U.S.C. ss.547, ss.548,
ss.550 and other "avoidance" provisions of Title 11 of the United States Code)
applicable in any such proceeding to the Guarantor and this Guaranty
(collectively, "Applicable Insolvency Laws"). To that end, but only in the
event and to the extent that the Guarantor's obligations with respect to the
Guaranteed Obligations or any payment made pursuant to the Guaranteed
Obligations would, but for the operation of the foregoing proviso, be subject
to avoidance or recovery in any such proceeding under Applicable Insolvency
Laws, the amount of the Guarantor's obligations with respect to the Guaranteed
Obligations shall be limited to the largest amount which, after giving effect
thereto, would not, under Applicable Insolvency Laws, render the Guarantor's
obligations with respect to such Guaranteed Obligations unenforceable or
avoidable or otherwise subject to recovery under Applicable Insolvency Laws. To
the extent any payment actually made pursuant to the Guaranteed Obligations
exceeds the limitation of the foregoing proviso and is otherwise subject to
avoidance and recovery in any such proceeding under Applicable Insolvency Laws,
the amount subject to avoidance shall in all events be limited to the amount by
which such actual payment exceeds such limitation and the Guaranteed
Obligations as limited by the foregoing proviso shall in all events remain in
full force and effect and be fully enforceable against the Guarantor. The
foregoing proviso is intended solely to preserve the rights of the Agents
hereunder against the Guarantor in such proceeding to the maximum extent
permitted by Applicable Insolvency Laws and neither the Guarantor, the
Borrower, nor any other Person shall have any right or claim under such proviso
that would not otherwise be available under Applicable Insolvency Laws in such
proceeding.
SECTION 3. Nature of Guaranty. The Guarantor agrees that this
Guaranty is a continuing, unconditional guaranty of payment and performance and
not of collection, and that its obligations under this Guaranty shall be
primary, absolute and unconditional, irrespective of, and unaffected by:
(a) the genuineness, validity, regularity, enforceability or any
future amendment of, or change in, the Credit Agreement or any
other Loan Document or any other agreement, document or
instrument to which the Borrower is or may become a party;
(b) the absence of any action to enforce this Guaranty, the Credit
Agreement or any other Loan Document or the waiver or consent
by the Agents or any Lender with respect to any of the
provisions of this Guaranty, the Credit Agreement or any other
Loan Document;
(c) the existence, value or condition of, or failure by the Agents
to perfect their Lien against, any security for or other
guaranty of the Guaranteed Obligations or any action,
or the absence of any action, by the Agents or any Lender in
respect of such security or guaranty (including, without
limitation, the release of any such security or guaranty); or
(d) any other action or circumstances which might otherwise
constitute a legal or equitable discharge or defense of a
surety or guarantor;
it being agreed by the Guarantor that, subject to the proviso in Section 2
hereof, its obligations under this Guaranty shall not be discharged until the
final and indefeasible payment and performance, in full, of the Guaranteed
Obligations and the termination of the Commitments. To the extent permitted by
law, the Guarantor expressly waives all rights it may now or in the future have
under any statute, or at law or in equity, or otherwise, to compel the Agents
or any Lender to proceed in respect of the Guaranteed Obligations against the
Borrower or any other party or against any security for or other guaranty of
the payment and performance of the Guaranteed Obligations before proceeding
against, or as a condition to proceeding against, the Guarantor. To the extent
permitted by law, the Guarantor further expressly waives and agrees not to
assert or take advantage of any defense based upon the failure of the Agents or
any Lender to commence an action in respect of the Guaranteed Obligations
against the Borrower, any other guarantor or any other party or any security
for the payment and performance of the Guaranteed Obligations. The Guarantor
agrees that any notice or directive given at any time to the Agents or any
Lender which is inconsistent with the waivers in the preceding two sentences
shall be null and void and may be ignored by the Agents or Lender, and, in
addition, may not be pleaded or introduced as evidence in any litigation
relating to this Guaranty for the reason that such pleading or introduction
would be at variance with the written terms of this Guaranty, unless the Agents
and the Required Lenders have specifically agreed otherwise in writing. The
foregoing waivers are of the essence of the transaction contemplated by the
Loan Documents and, but for this Guaranty and such waivers, the Agents and
Lenders would decline to enter into the Credit Agreement.
SECTION 4. Demand by the Agents. In addition to the terms set forth
in Section 3, and in no manner imposing any limitation on such terms, if all or
any portion of the then outstanding Guaranteed Obligations under the Credit
Agreement are declared to be immediately due and payable, then the Guarantor
shall, upon demand in writing therefor by the Agents to the Guarantor, pay all
or such portion of the outstanding Guaranteed Obligations then declared due and
payable. Payment by the Guarantor shall be made to the Agents, to be credited
and applied upon the Guaranteed Obligations, in immediately available Dollars
to an account designated by the Agents or at the address referenced herein for
the giving of notice to the Agents or at any other address that may be
specified in writing from time to time by the Agents.
SECTION 5. Waivers. In addition to the waivers contained in Section
3, the Guarantor, to the extent permitted by law, waives and agrees that it
shall not at any time insist upon, plead or in any manner whatever claim or
take the benefit or advantage of, any appraisal, valuation, extension,
marshalling of assets or redemption laws, or exemption, whether now or at any
time hereafter in force, which may delay, prevent or otherwise affect the
performance by the Guarantor of its obligations under, or the enforcement by
the Agents or the Lenders of, this Guaranty. The Guarantor further hereby
waives diligence, presentment, demand, protest and notice of whatever kind or
nature with respect to any of the Guaranteed Obligations and waives the benefit
of all provisions of law which are or might be in conflict with the terms of
this Guaranty. The Guarantor represents, warrants
and agrees that its obligations under this Guaranty are not and shall not be
subject to any counterclaims, offsets or defenses of any kind against the
Agents, the Lenders or the Borrower whether now existing or which may arise in
the future.
SECTION 6. Benefits of Guaranty. The provisions of this Guaranty
are for the benefit of the Agents and the Lenders and their respective
successors, transferees, endorsees and assigns, and nothing herein contained
shall impair, as between the Borrower, the Agents and the Lenders, the
obligations of the Borrower under the Loan Documents. In the event all or any
part of the Guaranteed Obligations are transferred, endorsed or assigned by the
Agents or any Lender to any Person or Persons, any reference to the "Agents",
or "Lender" herein shall be deemed to refer equally to such Person or Persons.
SECTION 7. Modification of Loan Documents etc. If the Agents or the
Lenders shall at any time or from time to time, with or without the consent of,
or notice to, the Guarantor:
(a) change or extend the manner, place or terms of payment of, or
renew or alter all or any portion of, the Guaranteed
Obligations;
(b) take any action under or in respect of the Loan Documents in
the exercise of any remedy, power or privilege contained
therein or available to it at law, in equity or otherwise, or
waive or refrain from exercising any such remedies, powers or
privileges;
(c) amend or modify, in any manner whatsoever, the Loan Documents;
(d) extend or waive the time for performance by the Guarantor, any
other guarantor, the Borrower or any other Person of, or
compliance with, any term, covenant or agreement on its part
to be performed or observed under a Loan Document (other than
this Guaranty), or waive such performance or compliance or
consent to a failure of, or departure from, such performance
or compliance;
(e) take and hold security or collateral for the payment of the
Guaranteed Obligations or sell, exchange, release, dispose of,
or otherwise deal with, any property pledged, mortgaged or
conveyed, or in which the Agents or the Lenders have been
granted a Lien, to secure any Debt of the Borrower to the
Agents or the Lenders;
(f) release anyone who may be liable in any manner for the payment
of any amounts owed by the Guarantor, any other guarantor or
the Borrower to the Agents or any Lender;
(g) modify or terminate the terms of any intercreditor or
subordination agreement pursuant to which claims of other
creditors of the Guarantor, any other guarantor or the
Borrower are subordinated to the claims of the Agents or any
Lender; or
(h) apply any sums by whomever paid or however realized to any
amounts owing by the Guarantor, any other guarantor or the
Borrower to the Agents or any Lender in such manner as the
Agents or any Lender shall determine in its reasonable
discretion;
then neither the Agents nor any Lender shall incur any liability to the
Guarantor as a result thereof, and no such action shall impair or release the
obligations of the Guarantor under this Guaranty.
SECTION 8. Reinstatement. The Guarantor agrees that, if any payment
made by the Borrower or any other Person applied to the Obligations is at any
time annulled, set aside, rescinded, invalidated, declared to be fraudulent or
preferential or otherwise required to be refunded or repaid or the proceeds of
any collateral are required to be refunded by the Agents or any Lender to the
Borrower, its estate, trustee, receiver or any other party, including, without
limitation, the Guarantor, under any Applicable Law or equitable cause, then,
to the extent of such payment or repayment, the Guarantor's liability hereunder
(and any Lien securing such liability) shall be and remain in full force and
effect, as fully as if such payment had never been made, and, if prior thereto,
this Guaranty shall have been canceled or surrendered (and if any Lien or
collateral securing the Guarantor's liability hereunder shall have been
released or terminated by virtue of such cancellation or surrender), this
Guaranty (and such Lien) shall be reinstated in full force and effect, and such
prior cancellation or surrender shall not diminish, release, discharge, impair
or otherwise affect the obligations of the Guarantor in respect of the amount
of such payment (or any Lien securing such obligation).
SECTION 9. Remedies.
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(a) Upon the occurrence and continuance of any Event of Default,
with the consent of the Required Lenders, the Agents may, or upon the request
of the Required Lenders, the Agents shall, enforce against the Guarantor its
obligations and liabilities hereunder and exercise such other rights and
remedies as may be available to the Agents hereunder, under the Loan Documents
or otherwise.
(b) No right or remedy herein conferred upon the Agents is intended
to be exclusive of any other right or remedy contained herein or in any other
Loan Document or otherwise, and every such right or remedy contained herein and
therein or now or hereafter existing at law, or in equity, or by statute, or
otherwise shall be cumulative. The Required Lenders may instruct the Agents to
pursue, or refrain from pursuing, any remedy available to the Agents at such
times and in such order as the Required Lenders shall determine, and the
Required Lenders election as to such remedies shall not impair any remedies
against the Guarantor not then exercised. In addition, any election of remedies
which results in the denial or impairment of the right of the Agents to seek a
deficiency judgment against the Borrower shall not impair the Guarantor's
obligation to pay the full amount of the Guaranteed Obligations.
SECTION 10. Miscellaneous.
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(a) Entire Agreement; Amendments. This Guaranty, together with the
other Loan Documents, constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior agreements with
respect to the subject matter hereof and may not be amended or supplemented
except by a writing signed by the Guarantor and the Agents, consented to by
such Lenders as required by Section 12.9 of the Credit Agreement.
(b) Headings. Titles and captions of sections and subsections in
this Guaranty are for convenience of reference only, and neither limit or
amplify the provisions of this Guaranty.
(c) Notices. All notices and communications hereunder shall be
given in accordance with Section 12.1 of the Credit Agreement.
(d) Binding Effect. This Guaranty shall bind the Guarantor and
shall inure to the benefit of the Agents and Lenders and their respective
successors and assigns. The Guarantor may not assign this Guaranty or delegate
any of its duties hereunder, other than in connection with the merger of the
Guarantor into such other Person as permitted by Section 9.5 of the Credit
Agreement.
(e) Non-Waiver. The failure of the Agents or any Lender to enforce
any right or remedy hereunder, or promptly to enforce any such right or remedy,
shall not constitute a waiver thereof, nor give rise to any estoppel against
the Agents or any Lender, nor excuse the Guarantor from its obligations
hereunder. Any waiver of any such right or remedy by the Lenders must be in
writing and signed by the Required Lenders.
(f) Governing Law. This Guaranty shall be governed by and construed
and enforced in accordance with the laws of the State of South Carolina,
without reference to the conflicts or choice of law principles thereof.
(g) Consent to Jurisdiction. The Guarantor hereby irrevocably
consents to the personal jurisdiction of the state and federal courts located
in Greenville County, South Carolina, in any action, claim or other proceeding
arising out of any dispute in connection with this Guaranty, any rights or
obligations hereunder, or the performance of such rights and obligations. The
Guarantor hereby irrevocably consents to the service of a summons and complaint
and other process in any action, claim or proceeding brought by the Agents or
any Lender in connection with this Guaranty, any rights or obligations
hereunder, or the performance of such rights and obligations, on behalf of
itself or its property, by registered or certified mail, return receipt
requested, otherwise in the manner referenced in Section 10(c). Nothing in this
Section 10(g) shall affect the right of the Agents or any Lender to serve legal
process in any other manner permitted by Applicable Law or affect the right of
the Agents or any Lender to bring any action or proceeding against the
Guarantor or its properties in the courts of any other jurisdictions.
(h) Waiver of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, THE AGENTS, EACH LENDER AND THE GUARANTOR HEREBY IRREVOCABLY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR OTHER
PROCEEDING ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS GUARANTY, ANY
RIGHTS OR OBLIGATIONS HEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND
OBLIGATIONS.
(i) Limitation of Liability. Neither the Agents, the Lenders nor
any Affiliate thereof shall have any liability with respect to, and THE
Guarantor hereby waives, releases and agrees not to xxx upon, any claim for any
special, indirect, punitive, exemplary or consequential damages suffered by the
Guarantor in connection with, arising out of, or in any way related to this
Guaranty and the other
Loan Documents, the transactions contemplated herein or therein, or any act,
omission or event occurring in connection herewith or therewith.
11. No Subrogation. Notwithstanding any payment or payments by the
Guarantor hereunder, or any set-off or application of funds of the Guarantor by
the Administrative Agent or any Lender, or the receipt of any amounts by the
Administrative Agent or any Lender with respect to any of the Guaranteed
Obligations, the Guarantor shall not be entitled to be subrogated to any of the
rights of the Agents or any Lender against the Borrower or any other guarantor
or against any collateral security held by the Administrative Agent or any
Lender for the payment of the Guaranteed Obligations nor shall the Guarantor
seek any reimbursement from the Borrower or any other guarantor in respect of
payments made by the Guarantor in connection with the Guaranteed Obligations,
until all amounts owing to the Agents and the Lenders on account of the
Guaranteed Obligations are paid in full and the Commitments are terminated. If
any amount shall be paid to the Guarantor on account of such subrogation rights
at any time when all of the Guaranteed Obligations shall not have been paid in
full, such amount shall be held by the Guarantor in trust for the
Administrative Agent, segregated from other funds of the Guarantor, and shall,
forthwith upon receipt by the Guarantor, be turned over to the Administrative
Agent in the exact form received by the Guarantor (duly endorsed by the
Guarantor to the Administrative Agent, if required) to be applied against the
Guaranteed Obligations, whether matured or unmatured, in such order as set
forth in the Credit Agreement.
IN WITNESS WHEREOF, the Guarantor has executed and delivered this
Guaranty under seal as of the date first above written.
INSIGNIA PROPERTIES TRUST
By:
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Name:
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Title:
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[CORPORATE SEAL]
ATTEST:
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Secretary
