GUARANTY AGREEMENT
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GUARANTY AGREEMENT
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THIS GUARANTY AGREEMENT, dated as of the I day of
, 1981, is by and between the City ofCI'earwater,
lor~da, a muniCipal corporation dUly organized and existing
nder the laws of the State of Florida (herein called "City"),
PACT, Inc., a corporation not-far-profit organized and existing
under 'llaw of the S,ta te of Florida (herein called "PACT") and
~ tr" C{!erft c av0 lA:tvl " as lender and holder of the
ortgage notes un er t e ocuments aescribed in the Commitment
Letter attached hereto as Exhibit A (the "Financing Documents")
(the "Lender").
WIT N E SSE T H
WHEREAS, arrangements have been made for ~~e issuance
and sale, pursuant to the aforesaid Financing Documents, by PACT,
of Mortgage Notes in the aggregate principal amount of not
exceeding $5,500,000 (herein called the "Notes"); and
WHEREAS, the proceeds of the sale of the Notes will be
used to pay part of the cost of constructing upon land owned by
PACT a performing arts facility (the "Project") which will be
made available to community groups from time to time by ~~e City
under a Facility Use Agreement (herein called the "Use
Agreement") as 4 part of the City's public recreation program;
and .
WHEREAS, the City will have a residual beneficial
interest in the performing arts facility pursuant to the
Financing Documents; and
WHEREAS, the City desires that PACT issue and sell the
Notes and apply the proceeds for ~~e purpose described above and,
in order to provide an inducement to PACT to issue and sell the
Notes and an inducement to the purchase of the Notes by all who
shall at any time become holders thereof, the Ci ty is will ing to
enter into this Guaranty Agreement;
NOW, THEREFORE, in consideration of the premises and
other good and val uable consideration, the Ci ty i PACT and the
Lender do hereby covenant and agree with each other as follows:
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ARTICLE I
REPRESENTATIONS OF THE CITY
Section 1.1 The City hereby represents and warrants
that it is a municipal corporation duly organized and existing
under the laws of the State of Florida, has full power and
authority to enter into and perform this Guaranty Agreement and
has duly authorized this Guaranty Agreement by proper official
action.
ARTICLE II
COVENANTS AND AGREEMENTS
Section 2.1 Subject to the provisions hereof, the City
hereby unconditionally and irrevocably guarantees 'to the Lender
(a) ~~e full and prompt payment of the principal of and premium,
if any, on each Note when and as the same shall become due,
whether at the stated maturity thereof, by acceleration, call for
redemption or otherwise, and (b) the full and prompt. paymen t of
interest On each Note when and as ~~e same shall become due. The
City further agrees, in the event of any failure of PACT to make
such payments when due, to make such payments to the Lender pro-
vided however, that the maximum amount which the City shall be
obligated to pay at any time and from time to time hereunder
shall never exceed the sum of (a) One Million Dollars
($1,000,000) (the "Principal Component") and (b) the total
in terest paymen ts which would nave been due by the Ci ty if it had
borrowed One Million Dollars ($1,000,000) on the date of issue of
the Notes at an interest rate equal to the Actuarial Interest
Rate (hereinafter defined) on the Notes, and had repaid such loan
on the dates and in the amounts of the ac tual payrnen ts mad e to
the Lender hereunder, applying the hypothetical repayments first
to accrued interest and ~~en to principal (the "Interest.
Componen t"). The Actuarial Interest Rate shall be the yield on
the Notes computed in accordance with proposed U. S. Treasury
Regulation Section 1.103-13 as proposed on January 1, 1978. If,
after the City shall have made any payments to the Lender
hereunder, PACT shall restore all or any part of such amount to
the City pursuant to the Use Agreement, the amount of such
restoration shall restore the maximum amount due hereunder by an
equal dollar amount. All payments by ~~e City under this
Guaranty Agreement shall be made in lawful money of the United
States of ~~erica.
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Section 2.2 The obligations of the City hereunder are
payable solely from funds derived by the City from sources other
than ad valorem taxation and legally available for such purpose
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which are on deposit from time to time in the general fund of the
City (hereinafter called "Non-Ad Valorem Funds"). The City
hereby reserves the right to hereafter from time to time pledge
and encumber by lien all or any part of such funds for the
payment of obligations of the City, prior and superior to its
agreement to pay under this agreement. The obligation of the
City hereunder does not constitute a general indebtedness of the
Ci ty or a pledge of the Ci ty' s full faith or cred it wi thin the
meaning of any constitutional or statutory provision or
limitation. The ad valorem taxing power of the City is not
pledged hereunder and neither the Lender, PACT, shall ever have
the right to compel the exerCIse of the ad valorem taxing power
of the City for performance of the City's obligations hereunder.
Section 2.3 Pursuant to due notice from the Lender, the
City '",ill set up and appropriate in the annual budget of the City
for expenditure in each of the years during which the Notes will
be outstand ing and unpaid, from the Non-Ad Valorem Fund s of the
City, sufficient amounts of such Non-Ad Valorem Funds of the City
to make the payments guaranteed hereunder. Such covenant and
agreement on the part of the City to budget and appropriate such
amounts of Non-Ad Valorem Funds shall be cumulative, and shall
continue until such Non-Ad Valorem Funds in amounts sufficient to
make all required payments shal~ have been budgeted, appropriated
and actually paid to the Lender.
Section 2.~ The City covenants and agrees to take all
action and pursue all such legal remedies which may'be available
to it to'ensure ~~at sufficient Non-Ad Valorem Funds will be
available to fulfill the City's agreements hereunder.
Section 2.5 The obligation of the City under this
Agreemen t shall be ab sol ute and uncond i tional and shall remain in
full force and effect until all Notes are no longer outstanding.
Except as so provided, such obligation shall not be affected,
mod ified or impaired upon ~~e happening from time to time of any
event, including without limitation any of the fOllowing, whether
or not such event shall occur with notice to, or the consent of,
the City:
(al ~~e waiver, surrender, compromise, settlement,
discharge, release or termination of any or all of the
obligations, covenants or agreements of PACT contained in the
Financing COcuments or in the Notes;
(b) the failure to give notice to the City of the
occurrence of a default under this Guaranty Agreement or an event
of default under the terms and provisions of the Financing
COcumen ts;
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(c) The transfer, assignment or mortgaging or the pur-
ported transfer, assignment or mortgaging of all or any part of
the interest of PACT or the City in the Project or any failure of
title with respect to PACT's or the City's interest in the Pro-
ject;
(d) the waiver, surrender, compromise, settlement,
release or termination of PACT's obligations, covenants or
agreemen ts con tained in the Use Ag.reemen t;
(e) the waiver, surrender, compromise, settlement,
release or termination of any of the obligations, covenants or
agreements of the City under the Use Agreement;
(f) the extension of the time for payment of any prin-
cipal of, premium, if any, or interest owing or payable on any
Note or of the time for performance of any obligation, covenant
or agreement under or arising out of the Use Agreement or the
Financing Documents or any extension or renewal of either
thereo f;
(g) the modification or amendment (whether material or
otherwise) of any obligation, covenant or agreement set forth in
the Use Agreemen t, the No te s or the Fin anc ing Doc umen ts ;
(h) the taking o~ the omission of any action referred
to in the Use Agreement or the Financing Documents or of any
action under this Guaranty Agreement;
(i) any failure, omission, delay or lack of diligence
on the part of PACT or the Lender in the enforcement, assertion
or exercise of any right, power or Lender conferred on PACT or
the Lender under the Use Agreement or the Financing Documents, 01:'
conferred on the Lender in this Guaranty Agreement, or the inabi-
lity of PACT or the Lender to enforce any provision of the Use
Agreement or the Financing Documents or this Guaranty Agreement
for any other reason , or any other act or omission on the part of
PACT, or t11e Lender.
(j) the dissolution, sale or other disposition of all
or substantially all the assets, liquidation, the marshalling of
assets and liabilities, receivership, insolvency, assignment for
the benefit of creditors, bankruptcy, reorganization, arrange-
ment, adjustment composition or other similar proceedings
affecting PACT or the City under the Use Agreement or the
Financing Documents or any of the assets of either of them, or
any allegation or contest of the validity of this Guaranty
Agreemen t or the Use Agreemen t;
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(k) to the extent permitted by law, any event or action
tha t wo uld, in the absence of this clause, resul t in the release
or discharge by operation of law of the City from the performance
or observance of any obligation, covenant or agreement contained
in this Guaranty Agreement.
Section 2.6 The City waives notice of the issuance of
the Notes and notice from the Lender acceptance and reliance on
this Guaranty Agreement. The City also waives presentment, demand
for payment, protest and notice of non-payment or dishonor and
all other notices and demands whatsoever relating to the Notes.
Section 2.7 No set-off, counterclaim, reduction or
diminution of an Obligation, or any defense of any kind or nature
(other than performance by the City of its obligations hereunder)
which PACT may have or assert or which the City may have or
assert against PACT or the Lender shall be available hereunder to
the City against the Lender.
Section 2.8 Whenever the Lender shall declare an even t
of defalllt under .the Financing Cocuments, the Lender shall give
notice to the City of any anticipated deficiency in payments
maturing principal of and premium, if any, and interest on the
Notes, such notice to be given not later than thirty day prior to
the due dae hereunder, and the City agrees to fulfill its Obliga-
tions under this Article II with respect to sllch deficiency by
payment of the sum required when dlle.
Section 2.9 PACT agrees that all of the covenants and
agreemen ts made by it in the Financ ing Cocumen ts for the benefi t
of the holders of the Notes shall also be incorporated herein by
reference and are made for the benefi t of the Ci ty, and the Ci ty
shall have the right to enforce sllch covenants and agreements in
the same manner as the Lender may so enforce them llnder the
Financing Coc1.llllen ts. However, no defalll t by PACT herellnder shall
be available to the City as a set-off, cou.nterclaim, redllction or
diminlltion of the City's Obligations to the Lender herellnder, or
available as a defense of any kind or nature to the City against
the Lende:::-.
Section 2.10 Whenever the City shall have made any
payments to the Lender herellnder, the City shall become sllbro-
gated to the rights of a holder of the Nates under the Firyancing
Doc1.llllents to the extent of such payments, and PACT agrees to pec-
form and carry out for the benefit of the City all of its obliga-
tions and duties to Lender llnder the Financing Cocuments. The
City's right of repayment shall be jllnior and subordinate to the
rights of the cities of Largo and Dllnedin and Pinellas County to
the repayment llnder similar Gllaranty Agreements.
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ARTICLE III
DEFAULT AND REMEDIES
Section 3.1 The Lendershall have the right, power and
authority.to do all things it deems necessary or advisable to
enforce the provisions of this Guaranty Agreement and protect the
interest of the and, in the event of a default in payment of the
principal of or premil.llll, if any, on any Note when and as the same
shall become due, whether at the stated maturity thereof, by
acceleration, call for redemption or otherwise, or in the event
of a defaul t in the payment of any in terest on any Note when and
as the same shall become due, the Lender may institute or appear
in such appropriate judicial proceedings as the Lender shall deem
most effectual to protect and enforce any of its rights whether
for the specific enforcement of any covenant or agreement in this
Guaranty Agreement or in aid of the exerc ise of any power granted
herein, or to enforce any other proper remedy. Without limiting
the generality of the foregoing, in the event of a default in
payment of the principal of, premium, if any, or interest on any
Note when due, the Lender may institute a judicial proceeding for
the collection of the sums so due and unpaid, and may prosecute
such proceed ing to judgmen t or final decree, and may en force !:.he
same against the City.
Section 3.2 No remedy conferred upon or reset'ved to the
Lender herein is intended to be exclusive of any other available
remedy or remedies, but each and every such remedy shall be cumu-
lative and shall be in addition to every other remedy given under
this Guaranty Agreement or now or hereafter existing at law or in
equity.
Section 3.3 Each and every even t of defaul t under the
Financing Documents shall give rise to a separate cause of action
hereunder, and separate suits may be brought hereunder as each
cause of action arises. In the event of such a defaul t, the
Lender Shall have the right to proceed fit'st and directly against
the City under this Guaranty Agreement without proceeding against
any other person or exhausting any other t'emedies which it may
have and without t'esorting to any other sec.uri ty held by PACT at'
the Lender.
Section 3.4 The City agrees to 'pay all costs, expenses
and fees, including all t'easonable attorneys' fees, which may be
incurred by the Lender in enforcing Ot' attempting to enfot'ce this
Guaranty Agreement or protecting the rights of the Lender, if
any, hereunder following any default on the pat't of the City
hereunder, whether the same shall be enforced by suit or
otherWise, provided the Lendet' is the prevailing party.
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Section 3.5 No delay or omission to exercise any right
or power accruing upon any default, omission or failure of per-
formance hereunder shall impair any such right or power or shall
be construed to be a waiver thereof, but any such right or power
may be exercised from time to time and as often as may be deemed
expedient.
ARTICLE IV
GENERAL
Section 4.1 The obligations of the City under this
Guaranty Agreement shall arise absolutely and unconditionally
upon the issue, sale and delivery of the Notes or any installment
thereof. This Guaranty Agreement is executed subsequent to the
execution of the Use Agreement and is separate and independent of
the Use Agreement. Any modification, limitation or discharge of
the City's liability under the Use Agreement arising out of or by
virtue of any bankruptcy, arrangement, reorganization or similar
proceeding shall not modify, limit, discharge or otherwise affect
the liability of the City under this Guaranty ,~reement in any
manner whatsoever.
Section 4.2 All moneys recoyered by the Lender pur-
suant to this Guaranty Agreement (other than those provided for
in Section 3.4 hereof) shall be applied solely to the payment of
the principal of, premium, if any, and interest on, the Notes in
accordance with the Financing Documents. This Guaranty Agreement
is entered in to by the Ci ty for the .benefi t of the Lender may be
enforced by or on Lender only by the Lender in accordance with
the provisions of this Guaranty Agreement. This Guaranty
Agreement shall not be deemed to create any right in, or to be in
whole or in part for ~~e benefit of any person other than, the
Lender, the City, PACT, and their permitted successors and
assigns.
Section 4.3 This Guaranty Agreement (a) constitutes the
entire agreement, and supersedes all prior agreements and
understandings, both written and oral, among the parties with
respect to the subject matter hereof; (b) may be executed in
several co un terparts, each of which shall be deemed an orig inal,
but all of which together shall constitute one and the same
instrument; (c) may be modified only by an instrument in writing
signed by the duly authorized representatives of the parties and
only if the modification is made for the same purposes and in
accordance with the same requirements as apply for the entering
into of amendements to the Financing Documents; and (d) shall be
governed in all respects, including validity, interpretation and
effect, by, and shall be enforceable in accordance with, the laws
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of the State of Florida. If any provision of this Guaranty Agreement shall
be held to be invalid by any court of competent jurisdiction, the invalidity of
such provision shall not affect any of the remaining provisions. Without in any
way limiting the generality of the next preceding sentence, in the event that
that portion hereof which requires the City to make any payments designated
herein as an "Interest Component" (as defined in Section 2. 1 hereof) is declared
by a court of competent jurisdiction to be invalid or unenforceable, then, in
such event, the invalidity or unenforceability thereof shall not affect any. of the
remaining provisions hereof, including, without liInitation, the obligation of the
City to make any payments designated herein as the "Principal Component"
(as defined in Section 2. 1 hereof).
IN WITNESS WHEREOF, the parties hereto have caused this Guaranty
Agreement to be executed in their names and behalf and their corporate seals
to be affixed hereto and attested by their duly authorized officers, as of the
date first above written.
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By
City
ger
form &
Attest:
c{~ L~
City Clerk
::CT>~
0d Presi nt
:;;~~/~
Secretary
(Corporate Seal)
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(SEAL)
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Accepted this L--- day of
1981.
(!i- "".hit ~ ~)~~~ ~
(Len erJ
BY#~~
Its: ("" J/ 0
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ATTEST:
Its:
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