exv10w2



 





EXHIBIT 10.2




GUARANTY




     THIS GUARANTY dated as of May 29, 2007, is executed and delivered by ARCHSTONE-SMITH TRUST, a
Maryland real estate investment trust (“Guarantor”), in favor of (a) MORGAN STANLEY SENIOR FUNDING,
INC., in its capacity as Agent (the “Agent”) for the Lenders under that certain Credit Agreement
dated as of May 29, 2007 by and among ARCHSTONE-SMITH OPERATING TRUST (the “Borrower”),
Archstone-Smith Trust, the financial institutions party thereto and their assignees in accordance
therewith (the “Lenders”), and the Agent (as the same may be amended, restated, supplemented or
otherwise modified from time to time in accordance with its terms, the “Credit Agreement”) and (b)
the Lenders.



     WHEREAS, pursuant to the Credit Agreement, the Lenders have made available to the Borrower
certain financial accommodations on the terms and conditions set forth in the Credit Agreement;



     WHEREAS, Guarantor is the direct or indirect parent of the Borrower;



     WHEREAS, the Borrower and Guarantor, though separate legal entities, are mutually dependent on
each other in the conduct of their respective businesses as an integrated operation and have
determined it to be in their mutual best interests to obtain financing from the Agent and the
Lenders through their collective efforts;



     WHEREAS, Guarantor acknowledges that it will receive direct and indirect benefits from the
Agent and the Lenders making such financial accommodations available to the Borrower under the
Credit Agreement and, accordingly, Guarantor is willing to guarantee the Borrower’s obligations to
the Agent and the Lenders on the terms and conditions contained herein; and



     WHEREAS, Guarantor’s execution and delivery of this Guaranty is one of the conditions
precedent to the Agent and the Lenders making, or continuing to make, such financial accommodations
to the Borrower.



     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by Guarantor, Guarantor agrees as follows:



     Section 1. Guaranty. Guarantor hereby absolutely and unconditionally guaranties the
due and punctual payment and performance of all of the following (collectively referred to as the
“Obligations”): (a) all indebtedness and obligations owing by the Borrower to any of the Lenders or
the Agent under or in connection with the Credit Agreement and any other Credit Document, including
without limitation, the repayment of all principal of the Loans made by the Lenders to the Borrower
under the Credit Agreement and the payment of all interest, fees, charges, reasonable attorneys
fees and other amounts payable to any Lender or the Agent thereunder or in connection therewith;
(b) any and all extensions, renewals, modifications, amendments or substitutions of the foregoing;
and (c) all expenses, including, without limitation, reasonable attorneys’ fees and disbursements,
that are incurred by the Lenders or the Agent in the enforcement of any of the foregoing or any
obligation of Guarantor hereunder.



     Section 2. Guaranty of Payment and Not of Collection. This Guaranty is a guaranty of
payment, and not of collection, and a debt of Guarantor for its own account. Accordingly, the
Lenders and the Agent shall not be obligated or required before enforcing this Guaranty against
Guarantor: (a) to pursue any right or remedy the Lenders or the Agent may have against the
Borrower, any other guarantor or any other Person or commence any suit or other proceeding against
the Borrower, any other guarantor or any other Person in any court or other tribunal; (b) to make
any claim in a liquidation or bankruptcy of the Borrower, any other guarantor or any other Person;
or (c) to make demand of the Borrower, any other guarantor or any other Person or to enforce or
seek to enforce or realize upon any collateral security held by the Lenders or the Agent which may
secure any of the Obligations. In this connection, Guarantor hereby waives its right to require any
holder of the Obligations to take action against the Borrower as provided by any Legal Requirement.



     Section 3. Guaranty Absolute. Guarantor guarantees that the Obligations will be paid
strictly in accordance with the terms of the documents evidencing the same, regardless of any Legal
Requirement now or hereafter in



 









 







effect in any jurisdiction affecting any of such terms or the rights of the Agent or the
Lenders with respect thereto. The liability of Guarantor under this Guaranty shall be absolute and
unconditional in accordance with its terms and shall remain in full force and effect without
regard to, and shall not be released, suspended, discharged, terminated or otherwise affected by,
any circumstance or occurrence whatsoever, including without limitation, the following (whether or
not Guarantor consents thereto or has notice thereof):



     (a) (i) any change in the amount, interest rate or due date or other term of any of the
Obligations, (ii) any change in the time, place or manner of payment of all or any portion of the
Obligations, (iii) any amendment or waiver of, or consent to the departure from or other indulgence
with respect to, the Credit Agreement, any other Credit Document, or any other document or
instrument evidencing or relating to any Obligations, or (iv) any waiver, renewal, extension,
addition, or supplement to, or deletion from, or any other action or inaction under or in respect
of, the Credit Agreement, any of the other Credit Documents, or any other documents, instruments or
agreements relating to the Obligations or any other instrument or agreement referred to therein or
evidencing any Obligations or any assignment or transfer of any of the foregoing;



     (b) any lack of validity or enforceability of the Credit Agreement, any of the other Credit
Documents, or any other document, instrument or agreement referred to therein or evidencing any
Obligations or any assignment or transfer of any of the foregoing;



     (c) any furnishing to the Agent or the Lenders of any security for the Obligations, or any
sale, exchange, release or surrender of, or realization on, any collateral security for the
Obligations;



     (d) any settlement or compromise of any of the Obligations, any security therefor, or any
liability of any other party with respect to the Obligations, or any subordination of the payment
of the Obligations to the payment of any other liability of the Borrower;



     (e) any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution,
liquidation or other like proceeding relating to any other guarantor, the Borrower or any other
Person, or any action taken with respect to this Guaranty by any trustee or receiver, or by any
court, in any such proceeding;



     (f) any nonperfection of any security interest or other Lien on any of the collateral securing
any of the Obligations;



     (g) any act or failure to act by the Borrower or any other Person which may adversely affect
Guarantor’s subrogation rights, if any, against the Borrower to recover payments made under this
Guaranty;



     (h) any application of sums paid by the Borrower or any other Person with respect to the
liabilities of the Borrower to the Agent or the Lenders, regardless of what liabilities of the
Borrower remain unpaid;



     (i) any defect, limitation or insufficiency in the borrowing powers of the Borrower or in the
exercise thereof; or



     (j) any other circumstance which might otherwise constitute a defense available to, or a
discharge of, Guarantor hereunder.



     Section 4. Action with Respect to Obligations. The Lenders and the Agent may, at any
time and from time to time, without the consent of, or notice to, Guarantor, and without
discharging Guarantor from its obligations hereunder take any and all actions described in
Section 3 and may otherwise: (a) amend, modify, alter or supplement the terms of any of the
Obligations, including, but not limited to, extending or shortening the time of payment of any of
the Obligations or the interest rate that may accrue on any of the Obligations; (b) amend, modify,
alter or supplement the Credit Agreement or any other Credit Document; (c) sell, exchange, release
or otherwise deal with all, or any part, of any collateral securing any of the Obligations; (d)
release any Person liable in any manner for the payment or collection of the Obligations; (e)
exercise, or refrain from exercising, any rights against the Borrower or any other Person
(including, without limitation, any other guarantor); and (f) apply any sum, by whomsoever paid or
however realized, to the Obligations in such order as the Lenders or the Agent shall elect.



 









 





     Section 5. [Reserved]



     Section 6. Covenants. Guarantor specifically agrees that to the extent Guaranty
Proceeds (as defined in Section 7.3(a) of the Credit Agreement) are distributed to holders
of Public Debt or their respective trustees (as defined in Section 7.3(a) of the Credit
Agreement) pursuant to Section 7.3 of the Credit Agreement, the Obligations will not be
deemed to be reduced by any such distributions and Guarantor shall continue to make payments under
this Guaranty until such time as the Obligations have been paid in full (and the Commitment has
been terminated), after taking into account any such distributions of payments hereunder in report
of Indebtedness other than the Obligations.



     Section 7. Waiver. Guarantor, to the fullest extent permitted by applicable law,
hereby waives notice of acceptance hereof or any presentment, demand, protest or notice of any
kind, and any other act or thing, or omission or delay to do any other act or thing, which in any
manner or to any extent might vary the risk of Guarantor or which otherwise might operate to
discharge Guarantor from its obligations hereunder.



     Section 8. Inability to Accelerate Loan. If the Agent and/or the Lenders are
prevented from demanding or accelerating payment thereof by reason of any automatic stay or
otherwise, the Agent and/or the Lenders shall be entitled to receive from Guarantor, upon demand
therefor, the sums which otherwise would have been due had such demand or acceleration occurred.



     Section 9. Reinstatement of Obligations. Guarantor agrees that this Guaranty shall
continue to be effective or be reinstated, as the case may be, with respect to any Obligations if
at any time payment of any such Obligations is rescinded or otherwise must be restored by the Agent
and/or the Lenders upon the bankruptcy or reorganization of the Borrower or Guarantor or otherwise.



     Section 10. Subrogation. Until all of the Obligations shall have been indefeasibly
paid in full, Guarantor shall not have any right of subrogation and Guarantor hereby waives any
right to enforce any remedy which the Agent and/or the Lenders now have or may hereafter have
against the Borrower, and Guarantor hereby waives any benefit of, and any right to participate in,
any security or collateral given to the Agent and the Lenders to secure payment or performance of
any of the Obligations.



     Section 11. Payments Free and Clear. All sums payable by Guarantor hereunder,
whether of principal, interest, fees, expenses, premiums or otherwise, shall be paid in full,
without set-off or counterclaim or any deduction or withholding whatsoever (including any
withholding tax or liability imposed by any Governmental Authority, or any Legal Requirement
promulgated thereby), and if Guarantor is required by such Legal Requirement or by such
Governmental Authority to make any such deduction or withholding, Guarantor shall pay to the Agent
and the Lenders such additional amount as will result in the receipt by the Agent and the Lenders
of the full amount payable hereunder had such deduction or withholding not occurred or been
required.



     Section 12. Set-off. In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, each Lender is hereby authorized by
Guarantor, at any time or from time to time, without notice to Guarantor or to any other Person,
any such notice being hereby expressly waived, but subject to receipt of Agent’s prior written
consent, to set-off and to appropriate and to apply any and all deposits (general or special,
including, but not limited to, indebtedness evidenced by certificates of deposit, whether matured
or unmatured) and any other indebtedness at any time held or owing by such Lender or any Affiliate
of such Lender, to or for the credit or the account of Guarantor against and on account of any of
the Obligations then due and owing after the expiration of any applicable grace periods. Guarantor
agrees, to the fullest extent it may effectively do so under applicable law, that any holder of a
participation in a Note, whether or not acquired pursuant to the applicable provisions of the
Credit Agreement, may exercise rights of setoff or counterclaim and other rights with respect to
such participation as fully as if such holder of a participation were a direct creditor of
Guarantor in the amount of such participation.



     Section 13. Subordination. Guarantor hereby expressly covenants and agrees for the
benefit of the Agent and the Lenders that all obligations and liabilities of the Borrower to
Guarantor of whatever description, including without limitation, all intercompany receivables of
Guarantor from the Borrower (collectively, the “Junior Claims”) shall be subordinate and junior in
right of payment to all Obligations. If an Event of Default shall have occurred and



 









 







be continuing, then Guarantor shall not accept any direct or indirect payment (in cash,
property, securities by setoff or otherwise) from the Borrower on account of or in any manner in
respect of any Junior Claim until all of the Obligations have been indefeasibly paid in full.



     Section 14. Avoidance Provisions. It is the intent of Guarantor, the Agent and the
Lenders that in any Proceeding, Guarantor’s maximum obligation hereunder shall equal, but not
exceed, the maximum amount which would not otherwise cause the obligations of Guarantor hereunder
(or any other obligations of Guarantor to the Agent and the Lenders) to be avoidable or
unenforceable against Guarantor in such Proceeding as a result of applicable law, including without
limitation, (a) Section 548 of the Bankruptcy Code of 1978, as amended (the “Bankruptcy Code”) and
(b) any state fraudulent transfer or fraudulent conveyance act or statute applied in such
Proceeding, whether by virtue of Section 544 of the Bankruptcy Code or otherwise. The applicable
laws under which the possible avoidance or unenforceability of the obligations of Guarantor
hereunder (or any other obligations of Guarantor to the Agent and the Lenders) shall be determined
in any such Proceeding are referred to as the “Avoidance Provisions”. Accordingly, to the extent
that the obligations of Guarantor hereunder would otherwise be subject to avoidance under the
Avoidance Provisions, the maximum Obligations for which Guarantor shall be liable hereunder shall
be reduced to that amount which, as of the time any of the Obligations are deemed to have been
incurred under the Avoidance Provisions, would not cause the obligations of Guarantor hereunder (or
any other obligations of Guarantor to the Agent and the Lenders), to be subject to avoidance under
the Avoidance Provisions. This Section is intended solely to preserve the rights of the Agent and
the Lenders hereunder to the maximum extent that would not cause the obligations of Guarantor
hereunder to be subject to avoidance under the Avoidance Provisions, and neither Guarantor nor any
other Person shall have any right or claim under this Section as against the Agent and the Lenders
that would not otherwise be available to such Person under the Avoidance Provisions.



     Section 15. Information. Guarantor assumes all responsibility for being and keeping
itself informed of the financial condition of the Borrower and of all other circumstances bearing
upon the risk of nonpayment of any of the Obligations and the nature, scope and extent of the risks
that Guarantor assumes and incurs hereunder, and agrees that none of the Agent or any Lender shall
have any duty whatsoever to advise Guarantor of information regarding such circumstances or risks.



     Section 16. Governing Law. THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED
IN AND TO BE PERFORMED ENTIRELY WITHIN THAT STATE.



     Section 17. JURISDICTION, VENUE. GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND AGREES AND CONSENTS THAT SERVICE OF PROCESS MAY BE
MADE UPON IT IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF THIS GUARANTY OR ANY OF THE OTHER
CREDIT DOCUMENTS BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, RETURN
RECEIPT REQUESTED, TO GUARANTOR AT THE ADDRESS SET FORTH AFTER ITS SIGNATURE. GUARANTOR HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS GUARANTY OR ANY OF THE OTHER CREDIT DOCUMENTS IN THE COURTS OF THE STATE OF NEW YORK
LOCATED IN NEW YORK COUNTY, OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK, AND HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIMS THAT ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. GUARANTOR (A) AGREES TO
DESIGNATE AND MAINTAIN AN AGENT FOR SERVICE OF PROCESS IN THE STATE OF NEW YORK IN CONNECTION WITH
ANY SUCH SUIT, ACTION OR PROCEEDING AND TO DELIVER TO THE AGENT EVIDENCE THEREOF AND (B)
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH
SUIT, ACTION OR PROCEEDING BY PROVIDING SUCH SERVICE OF PROCESS TO SUCH AGENT FOR SERVICE OF
PROCESS. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT OR THE LENDERS TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST GUARANTOR IN ANY JURISDICTION OR TO SERVE PROCESS IN ANY
MANNER PERMITTED BY APPLICABLE LAW. GUARANTOR HEREBY IRREVOCABLY AGREES



 









 







THAT ANY SUIT, ACTION OR PROCEEDING AGAINST THE AGENT OR ANY LENDER ARISING OUT OF OR IN
CONNECTION WITH THIS GUARANTY OR THE OTHER CREDIT DOCUMENTS SHALL BE BROUGHT AND MAINTAINED IN THE
COURTS OF THE STATE OF NEW YORK LOCATED IN NEW YORK COUNTY, OR THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK.



     Section 18. Loan Accounts. The Agent may maintain books and accounts setting forth
the amounts of principal, interest and other sums paid and payable with respect to the Obligations,
and in the case of any dispute relating to any of the outstanding amount, payment or receipt of
Obligation or otherwise, the entries in such account shall be binding upon Guarantor as to the
outstanding amount of such Obligations and the amounts paid and payable with respect thereto absent
manifest error. The failure of the Agent to maintain such books and accounts shall not in any way
relieve or discharge Guarantor of any of its obligations hereunder.



     Section 19. Waiver of Remedies. No delay or failure on the part of the Agent or the
Lenders in the exercise of any right or remedy it may have against Guarantor hereunder or otherwise
shall operate as a waiver thereof, and no single or partial exercise by the Agent or the Lenders of
any such right or remedy shall preclude other or further exercise thereof or the exercise of any
other such right or remedy.



     Section 20. Successors and Assigns. Each reference herein to the Agent or the
Lenders shall be deemed to include such Person’s respective successors and assigns (including, but
not limited to, any holder of the Obligations) in whose favor the provisions of this Guaranty also
shall inure, and each reference herein to Guarantor shall be deemed to include the Guarantor’s
successors and assigns, upon whom this Guaranty also shall be binding. The Lenders and the Agent
may, in accordance with the applicable provisions of the Credit Agreement, assign, transfer or sell
any Obligation, or grant or sell participation in any Obligations, to any Person or entity without
the consent of, or notice to, Guarantor and without releasing, discharging or modifying Guarantor’s
obligations hereunder. Guarantor hereby consents to the delivery by the Agent or any Lender to any
assignee, transferee or participant of any financial or other information regarding the Borrower or
Guarantor. Guarantor may not assign or transfer its obligations hereunder to any Person.



     Section 21. Amendments. This Guaranty may not be amended except as provided in the
Credit Agreement.



     Section 22. Payments. All payments made by Guarantor pursuant to this Guaranty shall
be made in Dollars, in immediately available funds to the Agent at its address set forth in the
Credit Agreement, not later than 12:00 noon, New York, New York time on the date one (1) Business
Day after demand therefor.



     Section 23. Notices. All notices, requests and other communications hereunder shall
be in writing and shall be given as provided in the Credit Agreement. Guarantor’s address for
notice is set forth below its signature hereto.



     Section 24. Severability. In case any provision of this Guaranty shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.



     Section 25. Headings. Section headings used in this Guaranty are for convenience
only and shall not affect the construction of this Guaranty.



     Section 26. Definitions. (a) For the purposes of this Guaranty:



     “Proceeding” means any of the following: (i) a voluntary or involuntary case
concerning Guarantor shall be commenced under the Bankruptcy Code or any other applicable
bankruptcy laws; (ii) a custodian (as defined in the Bankruptcy Code or any other applicable
bankruptcy laws) is appointed for, or takes charge of, all or any substantial part of the property
of Guarantor; (iii) any other proceeding under any applicable law, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, winding-up or composition for adjustment of debts, whether
now or hereafter in effect, is commenced relating to Guarantor; (iv) Guarantor is adjudicated
insolvent or bankrupt; (v) any order of relief or other order approving any such case or proceeding
is entered by a court of competent jurisdiction;



 









 




(vi) Guarantor makes a general assignment for the benefit of creditors; (vii) Guarantor shall
fail to pay, or shall state that it is unable to pay, or shall be unable to pay, its debts
generally as they become due; (viii) Guarantor shall call a meeting of its creditors with a view to
arranging a composition or adjustment of its debts; (ix) Guarantor shall by any act or failure to
act indicate its consent to, approval of or acquiescence in any of the foregoing; or (x) any
corporate action shall be taken by Guarantor for the purpose of effecting any of the foregoing.




     (b) Capitalized terms not otherwise defined herein are used herein with the respective
meanings given them in the Credit Agreement.



     Section 27. WAIVER OF JURY TRIAL. GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING RELATING TO THIS GUARANTY AND FOR ANY
COUNTERCLAIM THEREIN.



     IN WITNESS WHEREOF, Guarantor has duly executed and delivered this Guaranty as of the date and
year first written above.



ARCHSTONE-SMITH TRUST




By: /s/ Michael R. Berman

Name: Michael R. Berman

Title: Group Vice President




Address:

9200 E. Panorama Circle

Suite 400

Englewood, Colorado 80112

Attention: Corporate Finance