HomeMy WebLinkAboutBANK OF AMERICA LOAN AGREEMENT
Loan Agreement
Between
Bank of America, N .A.
as Lender,
and
Augusta Canal Authority
as Borrower
As of May 1, 2004
LOAN AGREElvfENT
THIS LOAN AGREEMENT is made and entered into as of the 1 he day of May, 2004, by and
between BANK OF AMERICA, N.A., LENDER, and AUGUSTA CANAL AUTHORITY, BORROWER. In
consideration of the mutual promises, covenants and agreements hereinafter set forth, the parties agree
as follows:
ARTICLE I
PRINCIPLES OF CONSTRUCTION
Section 1.01 Definitions. For the purposes of this Agreement, the following t~rms shall bave
the meanings hereinafter set fmth, unless the context clearly requires otherwise:
"AFFILIATE" means any person or entity directly or indirectly controlling, controlled by, or
under, and under control witll, Borrower.
"A,GREEMENT" means this Loan Agreement as originally exe.cute~ and as from time to time
supplemented, modified or amended pursuant to the applicable provisions hereof.
"BORROWER" means the Augusta Canal Authority.
"BUILDING LAWS" means (a) plat restrictions, all restrictive covenants, building setback lines,
encroachments, ordinances, requirements, conditions and design and building requirements affecting the
Project, and (b) all zoning, flood plain, planning, sub-division, building, health, labor, discrimination,
fire, traffic, safety, wetlands, shoreline and all other governmental or regulatory laws, rules, regulations,
ordinances, statutes, codes and requirements applicable to the Project, including, without limitation, the
Fair Housing Act of 1968, as amended, and the Americans with Disabilities Act of 1990, as amended.
[See 9 6.02]
"CLOSING" means the closing provided for in Article III.
"CODE" means tlle Internal Revenue Code of 1986, as amended and all rules and regulations
issued thereunder.
"COLLATERAL" means the Intergovernmental Agreelnent and the revenues and proceeds
derived tllerefrom by ilie Borrower.
"CONSOLIDATED GOVERNMENT" means the consolidated government of the City of
Augusta and Richmond County, Georgia.
"CONSTRUCTION CONTRACT" means that agreement between tile Consolidated
Government, Atlanta Gas Light Company and Williams Environmental Sel-vices, Inc. as more
particularly described in the Intergovernmental Agreement.
"CONSTRUCTION PERIOD" means tlle period of time beg1nning on the date of tIus
Agreement and ending on a date ten (10) months after tlle date of this Agreement.
1
"EVENT OF DEFAULT" or "DEFAULT" shall have the meaning ascribed to such term in
Section 7.01 of tlUs Agreement.
"FINANCING STATEMENTS" means the UCC Form 1 financing statements and any
continuations iliereof perfecting ilie security interest of the Lender in the Collateral, @ed as required
under the laws of the State of Georgia.
"INDEBTEDNESS" means, ,viili respect to any Person, (a) all items, except items of
shareholders', member's and partners' equity or capital stock or surplus or general contingency or
deferred tax reserves, which in accordance wiili GAAP would be included in detel",inin g total liabilities
as shown on ilie liability side of a balance sheet of such Person, (b) all direct or indirect obligations
secured by any Lien to which any property or asset owned by such Person is subject, whether or not ilie
obligation secured iliereby shall have been assumed, (c) to the extent not oilierwise included, all
obligations of oilier persons or entities which such Person has guaranteed, including but not limited to,
all obligations of such Person consisting of recourse liability wiili respect to accounts receivable sold or
oilielwise disposed of by such Person, (d) to the extent not otherwise included, all Capitalized Lease
Obligations of such Person and all obligations of such Person with respect to leases constituting pall of
a sale andleasebackartangement, and (e) all reimbursement obligations of such Person witIl respect to
outstanding letters of credit.
"INTERGOVERNMENTAL AGREEMENT" means the IntergO\Ternmental Agreement
between the Borrower and the Consolidated Government for ilie work constituting the Project, a copy
of wluch is attached hereto as Exhibit B.
"LENDER" means Bank of America, N.A., its successors and assigns.
"LIEN" means, with respect to any property, any mortgage, lien, pledge, negative pledge,
assignment, charge, security interest, title retention agreement, levy, execution, seizure, attachment,
garnishment, or oilier encumbrance of any kind in respect of such property, whetller or not choate,
vested, or perfected.
"LOAN" means the amounts advanced by Lender to Borrower in accordance with tlle tenus
hereof, and evidenced by the Note. .
"LOAN DOCUMENTS" means, without limitation, this Agreement, tlle Note, the
Intergovernmental Agreement, ilie Financing Statements, all requests for advance, and all other
documents, instruments, certificates, and agreements executed or delivered in connection Witll or
contemplated by this Agreement.
"NOTE" means the promissory note described in Article II hereof, evidencing Borrower's
Indebtedness as the same may hereafter be amended, modified or supplemented.
"OBLIGA TIONS" means all loans, debts, liabilities, obligations or other amounts owing by
Borrower to Lender, related to and arising out of the Loan (whether or not evidenced by any note or
other instrument and whether or not for ilie payment of money), direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising, including, witl10ut limitation, all
interest, fees, charges, expenses, attorneys' fees and accountants' fees chargeable by Lender to Borrower.
2
"PERSON" means any natural person, cOlporation, finn, ass 0 Clat1on, government,
governmental agency or any otller entity and whetller acting in an individual, fiduciary or otller capacity.
"PROJECT" means that certain work to be conducted in ilie Augusta Third Level Canal which
shall generally consist of all channel improvements, bridges, culverts, gates and appurtenance works as
outlined in tlle "Augusta Canal Third Level Improvement Study" prepared for Augusta by Cranston,
Robertson & Whitehurst, P.c. dated May 1999 (tlle "1999 Plan"), for tllat portion of the Third Level
Canal located between the first railroad trestle soutll/southeast of 7th Street/Twiggs Street and 12th
Street. Such work shall also include additional excavation work necessary to aclueve tlle canal profile
generally as set forth in the 1999 Plan. The work shall include clearing the Augusta Canal of vegetation,
blUsh and trash from 121h Street to approximately 460 feet south/ soutlleast of 71h Street/Twiggs Street
and restoring it.
"SOL VENTII means, as to any Person, tllat such Person has capital sufficient to carty on its
business and transactions in which it is about to engage and is able to pay its debts as tlley mature and
owns property having a value, bOtll at fair valuation and at present fair salable value, greater tllan tlle
amount required to pay its debts.
Section 1.02 Usage. All pronouns and defined terms appearing herein shall be deemed to
include both the singular and plural, and to refer to all genders, unless tlle context clearly requires
otllerwise. The words "hereby", "hereinll, "hereof', "hereunder" and words of similar import shall refer
to this Agreement in its entirety and not to any particular provision or subdivision hereof.
Section 1.03 Hearlings. All references to designated "Articles" or "Sections" ate to the Articles
and Sections of this Agreement as originally executed. All headings are provided for convenience only
and are not intended to limit, expand or otllerwise modify any provision hereof.
ARTICLE II
THE LOAN AND SECURITY
Section 2.01 Loan. Subject to and in accordance with tlle terms and conditions of tllls
Agreement, Lender shall make a Loan to Borrower in tlle principal amount of up to $8,000,000.00. The
Loan shall be evidenced by the Augusta Canal Autllority Revenue Note, Series 2004 of even date
herewith in tlle original pnncipal amount of$8,000,000.00 (the "Note") in tlle form attached hereto as
Exhibit A. The Loan shall not be a general obligation of tlle Borrower but shall be a limited obligation
payable solely from the revenues and proceeds derived by the Borrower from tlle Intergovernmental
Agreement.
Section 2.02 Participation by Other Lenders. Lender shall have tlle right to allow other
banks or financial institutions to buy participation interests in tlle Loan. Borrower agrees to cooperate
witll Lender and such otller lenders or financial institutions to allow such participation.
Section 2.03 Non Taxable Status Dithe Loan. Lender and Borrower acknowledge that tlle
pricing of tlle Loan is based upon tlle fact tllat tlle interest payable by Borrower under the Note is not
. taxable for federal income ta.'I( purposes. If at anytime tlle interest paid under tlle Note is detennined to
be taxable for federal income tax purposes, and such determination becomes final, tllen the rate of
3
interest bome by the Note shall be adjusted as provided for in the Note. This adjustment shall be
effective as of the date that the interest on the Note became taxable.
Section 2.04 Security. To secure the Obligations, Borrower hereby conveys, assigns and grants
a security interest to Lender in all of Borrower's rights, but none of Borrower's obligations, in and to the
Intergovemmental Agreement. Borrower shall cause to be filed in Richmond County, Georgia a
Financing Statement to perfect this security interest.
Borrower warrants that there have been no prior assignments of the Intergovernmental
Agreement; that the Intergovernmental Agreement is a valid, enforceable agreement; that no party
thereto is in default to any other party thereunder and that all covenants, conditions and agreements
have been performed as required therein, except those not due to be performed until after the date
hereof. Borrower has full power and authority to make iliis assignment. Borrower warrants that, it will
not, without any prior written approval of Lender, release, terminate, cancel, modify or amend any of
dle Intergovemmental Agreement in any respect, and any such action by Borrower without sucb
approval by Lender will be invalid and without legal operation or effect Borrower warrants that it will
not sell, pledge, mortgage or otherwise transfer or encumber its interest in the Intergovemmental
Agreement so long as this Loan Agreement is in effect
ARTICLE III
CLOSING AND FUNDING
Section 3.01 Time and Place. The Closing of tl1e Loan shall be held on May 18,2004 at such
place as may be agreed upon by Borrower.and Lender.
Section 3.02 Closing of the Loan. On the date of Closing, Lender shall close the Loan, subject
to the following conditions precedent; provided, however, dtat Lender may waive any of the foregoing
requirements until tl1e initial funding of the Loan or anytime thereafter:
(a) Borrower shall have taken all action and have caused to be duly executed all
documents, agreements, instruments" certificates, authorizations or other
writings required or contemplated by the terms of this Agreement or otherwise
requested by Lender, nIl of which shall be.in form and substance as required by
Lender.
(b) Bon:ower shall be in compliance with all tenns, conditions and covenants hereof
and its representations and warranties shall be true, accurate and complete as of
Closing.
(c) Lender shall have received all documents Lender may request relating to the
existence of Borrower and the Consolidated Government, the authority for, the
,ralidity of and enforceability of this Agreement, the other Loan Documents and
the Intergovernmental Agreement, the authority and incumbency of the officer
executing this Agreement, the other Loan Documents and the
Intergovernmental Agreement and any other matters relevant hereto, nIl in fonn
and substance satisfactory to Lender.
4
(d) Lender shall have received tl1e e>..-penses required to be paid by Borrower
accrued through tl1e Closing Date.
(e) No Event of Default shall have occurred.
(f) Lender shall have received a copy of any contracts associated witll the Project,
all in a form and content satisfactory to Lender.
(g) Lender shall have received legal opinions issued by law firms and in form and
content acceptable to Lender opining as to matters with respect to the
Borrower, tl1e Consolidated Government, the enforceability of tl1e Loan
Documents and tl1e Intergovernmental Agreement, the tax exempt status of the
Loan and such other matters as are required by the Lender.
(h) Lender shall have the right to communicate with any person to verify tlle facts
disclosed by the list or by any draw request, or for any other purpose.
Failure by Lender to require compliance in whole or in part with any oftl1e_ conditions
precedent to initial funding described above shall not operate as a waiver or forfeiture tl1ereofunless
expressly waived or forfeited by Lender in writing; and in the absence of such written waiver or
forfeiture Lender may insist upon compliance at any future time during tl1e term of tIus Agreement.
Section 3.03 Further Funding of the Loan. Thll:ty (30) days following Closing, Borrower
may, not more than once a montl1 during tl1e Construction Period, request draws of any portion of the
remaining principal balance available for borrowing under tl1e Loan pursuant and subject to tl1e
following terms and conditions:
(a)
Draws shall only be made for completed work and improvements in an amount
equal to the actual cost of in place labor, materials and equipment, for the
Project.
(b)
Requests for draws in the form attached hereto as Exhibit C must be submitted
in writing to Lender by the Borrower on a Lender approved draw request form
at least two weeks before payment is desired. If requested by Lender, Borrower
shall submit invoices covering the services and materials for which funds are
being requested.
(c)
Lender shall have no obligation to fund any requested draws after tl1e end of tlle
Construction Period or after tl1e occurrence of an Event of Default.
Section 3.04 Post-Construction Requirements. Witllin sixty (60) days of completion of tlle
Project, Borrower shall fmnish Lender with the following:
(a) Certification to Lender by the Borrower tl1at the Project was completed to
Borrower's satisfaction and in accordance with tl1e applicable contract
documents.
5
(b) Satisfactory evidence that all necessary certificates required to be obtained from
any board, agency, or department, governmental or otllerwise, have been
obtained,
Section 3.05 Reporting Requirements. Borrower shall furnish, or cause to be furnished to,
Lender tlle following financial information:
(a) Within 180 days of the Borrower's fiscal year end, tl1e Borrower's annual
audited financial statements.
(b) Within 180 days of tl1e Consolidated Govemment's fiscal year end, tlle
Consolidated Government's annual audited financial statements.
All financial statements called for above shall be prepared in accordance with generally accepted
accounting principles applied on a consistent basis in a form and content acceptable to Lender and by
an independent certified public accountant acceptable to Lender.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
As an inducement to Lender to enter into this Agreement and to make available tlle credit
provided for herein, Borrower represents and warrants to Lender as follows:
Section 4,01. Organization and Oualification. Borrower is an instrumentality and political
subdivision of the State of Georgia and a public corporation duly organized and existing under the laws
of the State of Georgia, and is qualified to do business in all jurisdictioDs in wluch it conducts its
business.
Section 4.02 Authority and No Conflict. The execution and delivery by Borrower of, and tl1e
performance by Borrower of its obligations hereunder and under the Loan Documents and the
Intergovernmental Agreement have been duly autl10rized by all requisite action on ilie part of tl1e
Borrower and do not and will not (i) violate any provision of any law or any judgment, order or ruling of
any court or governmental agency, or (ii) be in conflict witl1, result in a breach of, or constitute, witll
notice or lapse of time or both, a default under any indenture, agreement or otl1er instrument to which
Borrower is a party or by which tl1e Borrower or any of its property is bound or under its organizational
documents.
Section 4.03 No Litigation. There are no pending or ilireatened actions or proceedings before
any court or administrative or governmental agency tllat may adversely affect the financial condition or
business operations of Borrower or tl1e Intergovernmental Agreement other tllan those previously
disclosed by BOl1:0Wer to Lender in writing.
Section 4.04 Financial Statements. Borrower has furnished to Lender financial statement(s)
dated December 31, 2002, (the "Financial Statements"), which Financial Statements ate true and correct
in all material respects and were prepared in accordance wiili generally accepted accounting principles
6
consistently applied and followed tlltoughout the periods involved. Such Financial Stntements fairly and
accurately present tlle financial condition of Borrower as of the date indicated. Since the date of tlle
latest Financial Statements referred to above, tllere has been no material adverse change in tlle finanoo
condition, business, operations or prospects of Borrower, and tllere exists no material contingent
liability or obligation assertable against Borrower that is not identified and disclosed to Lender in the
Financial Stntements.
Section 4.05 Taxes. All federal, state and other tax returns of Borrower required by law to be
filed have been completed in full and have been duly filed, and all taxes, assessments and withh6ldings
shown on such returns or billed to Borrower have been paid, and Borrower maintains adequate reserves
and accruals in respect of all such federal, state and otller taxes, assessments and witlilioldings. There
are no unpaid assessments pending against Borrower for any taxes or witllholdings, and Borrower
knows of no bases therefor.
Section 4.06 Permits. Licenses. etc. Borrower possesses all pennits, memberships, franchises,
contracts, licenses, trademark rights, trade names, and patents necessary to enable it to conduct its
business operations as now conducted, and no consent, permission, autllorization, order or license of
any individual, entity or govemmental authority is necessary in connection withtlle execution, delivery,
performance or enforcement of the Note.
Section 4.07 No Default. There is no event which is, or wluch witll notice or lapse of time or
botll would be, an Event of Default hereunder or under tlle Note.
Section 4.08 Title. Borrower has good and marketable title to all of its properties and assets
including, witllout limitation, tlle properties and assets reflected in the above described Financial
Statements.
Section 4.09 Enforceabili1y of the Loan Documents. The Loan Documents and tlle
Intergovernmental Agreement, to which Borrower is a party, are the legal, valid and binding agreements
of Borrower enforceable against Borrower in accordance witll their tel1nS.
Section 4.10 No Liens or Encumbrances. There are no liens or encumbrances outstanding
against tile Borrower's property otller than tllose previously disclosed by Borrower to Lender in writing.
Section 4.11 Compliance with Laws. To tlle best of its knowledge, the Borrower is in
compliance with all federal, state and local laws, including any environmental laws.
Section 4.12 Loan Tax Exempt. The interest paid on ilie Loan made under this Loan
Agreement is exempt from federal income tax and tlle Borrower shall not knowingly take any action, or
omit to take any action wiiliin its control, which, if talren or omitted, respectively, would cause the
interest on ilie Note to become includable in the gross income, as defined in Section 61 of tlle Code, of
tlle owners tllereof for federal income tax purposes.
Section 4.13 Reliance on Covenants. Each and every covenant contained in this Agreement,
and all such covenants in tlle aggregate, have been and will continue to be (so long as credit remains
outstanding hereunder) relied upon by Lender and are material to its protection, in connection Witll all
credit now or hereafter e},.'tended to Borrower hereunder. Each request for a draw under the Loan shall
7
constitute an affirmation that the representations and warranties of this Article remain true and correct
as of the date tllereof, and, unless Lender is notified to the contrary prior to the disbursement of tlle
requested advance or any portion tllereof, shall constitute an affinnation that the same remain true and
correct on the date of such disbursement.
ARTICLE V
COVENANTS
Section 5,01 Affirmative Covenants. Borrower covenants and agrees tllat, so long as it may
borrow under tlle Note or so long as any indebtedness remains outstanding under the Note, Borrower
shall:
(a) Do all things necessary to maintain tlle tax exempt status of this Loan and the
Note and not do anything tllat would adversely affect such tax exempt status.
(b) Provide Lender in a timely fashion any other information requested by Lender.
(c) Maintain its books, accounts and records in accordance with generally accepted
accounting principles and shall permit any person or entity designated in writing
by Lender to visit and inspect the Project and tile books and financial records
related tllereto, and to make copies tllereof and take extracts tllereD:om.
Cd)
Pay and discharge all taxes, assessments, fees, withholdings and otller
governmental charges or levies imposed upon it or upon its income and profits
or upon any property belonging to it, prior to tlle date on which penalties
attached thereto, unless tlle legality thereof shall be promptly and actively
contested in good faitll by appropriate proceedings.
(e) Maintain its existence in good standing in the State of Georgia and its
qualifications and good standing in all jurisdictions where such qualification is
required under applicable law, and conduct its business in tlle manner in which
it is now conducted subject only to changes made in the ordinary course of
business.
(f) Promptly notify Lender in writing of tlle occurrence of any Event of Default or
of any pending or threatened litigation claiming damages in any amount seeking
relief tllat, if granted, would adversely affect the financial condition or business
operation of Borrower or ilie IntergovemmentalAgreement.
(g) Maintain and keep in force insurance of the types and in amounts customaJ:i1y
carried in lines of business similar to Boo'ower's, including, \vitllout limitation,
fixe, public liability, property damage, and worker's compensation insurance,
which insurance shall be carried witll companies and in amounts reasonable
satisfactory to Lender, and Borrower shall deliver to Lender from time to time
at Lender's request schedules setting forili all insurance tllen in effect and if
8
applicable, certificates showing the Lender as loss payee or an additional insured
thereunder.
Section 5.02 Negative Covenants. Borrower covenants and agrees that, without prior written
consent of Lender, so long as it may borrow under ilie Note or so long asany indebtedness remains
outstanding under the Note, Borrower shall not:
(a) Use any proceeds of tlle Loan except for the pUlposes stated herein.
(/'
I
(b) Merge, consolidate or enter into a partnership or joint venture witll any otller
person or entity or sell, lease, transfer or otIlerwise dispose of all or' any
substantial portion of its assets.
(c) Grant any lien on or in, or otherwise encumber, or permit a lien to exist on the
Collateral, except for liens in favor of Lender and for taxes not yet due and
payable or wluch are being actively contested in good faith by appropriate
proceedings and tllose liens previously disclosed to Lender by Borrower in
w.ri.ting, and shall not enter into anyagreement,iliat would grant a. negative
pledge as to tlle Collateral to any otller entity.
(d) Make any investments otller than any investments arising out of obligations
witll tile United States Govemment.
ARTICLE VI
ADDITIONAL COVENANTS
During tlle term of this Agreement, Borrower shall comply witll each and every one of tlle
following covenants.
Section 6.01 Right ofInspection. Borrower shall permit Lender or its representatives, at any
reasonable time and from time to time, to inspect the Collateral hereunder and to audit, examine and
copy or take abstracts from Borrower's books and records with regard to tl1e Collateral.
Section 6.02 Compliance with Building Laws. Borrower shall cause tlle Project to be
constructed and continuously in complian.ce witll all Building Laws as the same may be amended from
time to time.
Section 6.03 Notification aCClaims by Subcontractors and Materialmen. Borrower shall
advise Lender immediately, and in writing, if Borrower receives any notice, written or oral, from any
laborer, subcontractor or materialman to tile effect that said laborer, subcontractor OI materialman has
not been paid when due for any labor or materials fumished in connection with ilie Project.
Section 6.04 Expenses, Borrower shall pay all reasonable out-of-pocket eA"Penses of Lender
(including, but not limited to, reasonable fees and disbursements of Lender's attorneys, architects and
appraisers) incident to the preparation, execution and delivery of, and the providing of credit under, this
Agreement and tlle Loan Documents, and any amendments or waivers to this Agreement and tlle Loan
9
Documents, during any periods of constmction and thereafter until all Obligations shall have been fully
satisfied. In addition, Borrower shall pay all reasonable out-of-pocket expenses of Lender (including,
but not limited to reasonable fees and disbursements of Lender' attorneys and appraisers) incident to the
protection of ilie rights of Lender under this Agreement, ilie Loan Documents and the
Intergovernmental Agreement and the enforcement of payment of any and all Obligations, whetller by
judicial proceedings or otllerwise. The obligations of Borrower under this Section shall survive payment
and cancellation of tlle Note.
Section 6.05 Compliance With Law. Borrower shall conduct its businesses so as to comply
\vitll all laws and regulations in all jurisdictions in which it may at any time be doing business or wluch
may otllelwise be applicable.
Section 6.06 Additional Documents. Borrower covenants and agrees to execute such oilier
additional documents from time to time as shall be necessary to carry out the intent of the Agreement.
ARTICLE VII
EVENTS OF DEFAULT .,.
Section 7.01 Events of Default. The occurrence of anyone or more of the following shall
constitute an Event of Default:
(a) Borrower shall fail to pay when due (i) any installment of principal or interest
under the Note, or (ii) any otller Obligations for tlle payment of money to
Lender.
(b) Borrower shall fail to perform or observe any tetro, condition, covenant or
other provision contalned in this Agreement, the Note or any Loan Document
and such failure shall continue for more tllan thirty (30) days after written
notice.
(c) Any representation or warranty made in writing by or on behalf of Borrower or
the Consolidated Government herein or in tlle otller Loan Documents or in the
Intergovernmental Agreement or pursuant hereto or thereto, or otllerwise in
connection witll this Agreement, shall prove to have been false or incorrect in
any material respect, or to have omitted to state a material fact required to be
stated tllerein in order to make tlle statements contained therein, in the light of
tlle circumstances under which made, not misleading, on tlle date as of which
made.
(d) Borrower or the Consolidated Government shall be adjudicated a bankmpt or
insolvent, or admit in writing its inability to pay its debts as tlley mature, or
make an assignment for tlle benefit of creditors; or shall apply for or consent to
tlle appointment of a receiver, trustee, or similar officer for it or for all or any
substantial part of its property; or such receiver, trustee or similar officer shall
be appointed without ilie application or consent of Borrower or tlle
Consolidated Government, and such appointment shall continue undiscllarged
10
for a period of sixty (60) days; or Borrower or tlle Consolidated Government
shall institute (by petition, application, answer, consent or otherwise) any
bankruptcy, insolvency, reorganization, arrangement, readjustment of debt,
dissolution, liquidation or similar proceeding relating to it under the laws of any
jurisdiction; or any such proceeding shall be instituted (by petition, application
or otherwise) against Borrower or the Consolidated Government and shall
remain undismissed for a period of sixty (60) days; or any judgment, writ,
wanant of attachment or execution or similar process shall be issued or levied
against tlle Collateral and such judgment, writ, or similar process shall not be
released, vacated or fully bonded within sixty (60) days after its issue or levy.
(e) A final judgment for money not fully covered by insurance in excess of $10,000
shall be rendered against BOl"!ower which constitutes a lien on the Collateral and
if, witIlin iliirty (30) days after entry thereof, such judgment shall not have been
discharged, satisfied or execution tllereof stayed pending appeal, or if, witlun
tllirty (30) days after the expiration of any such stay, such judgment shall not
have been discharged or satisfied.
(f) The Loan Documents, and any security interest created tllerein, are alleged or
deemed to be invalid.
(g) A material adverse change occurs in Borrower's financial condition which
causes Lender to believe tllat tlle prospect of payment or performance of the
Obligations is impaired.
(h) The Consolidated Government shall default on ay of its obligations under the
Intergovernmental Agreement.
(i) The Consolidated Government shall default under any Indebtedness owed to
Lender or any otller Person.
Section 7.02 Remedies on Default. Upon the occurrence of an Event of Default under
Section 7.01 (a), the entire unpaid principal amount of tlle Note, all otller Obligations and all interest
accrued and unpaid tllereon shall automatically become and be forthwith due and payable without
presentment, demand, protest or notice of any kind, all of wluch are hereby eJo.l'ressly waived by
Borrower. Upon the occurrence of any other Event of Default, Lender may declare tlle entire unpaid
principal amount of tlle Note, all otller Obligations and all interest accrued and unpaid tllereon to be
forth'\vitll due and payable, whereupon tlle same shall become immediately due and payable, without
presentment, demand, protest or further notice of any kind, all of which are hereby e>..-pressly waived by
Borrower. Upon tlle occurrence of any Event of Default, Lender may immediately and witllout
expiration of any period of grace, cease funding any proceeds of tlle Loan, enforce payment in whole or
in part, in any priority, of all Obligations whetller under the Note or oilierwise, and exercise any and all
other reJnedies granted to it under tlle Loan Documents, the Intergove1'l1mental Agreement or by law or
in equity including but not limited to recovery of Lender's reasonable attorneysl fees.
Section 7.03 Remedies Cumulative. No right or remedy conferred upon or reserved to
Lender under this Agreement is intended to be exclusive of any other right or remedy, and each a~d
11
every remedy shall be cumulative and in addition to every other light or remedy given hereunder or now
or hereafter existing under any applicable law. Every right and remedy given by this Agreement or by
applicable law to Lender may be exercised from time to time and as often as may be deemed expedient
by Lender.
ARTICLE VIII
MISCELLANEOUS
Section 8.01 Indemnification. Borrower agrees to indemnify Lender from, and hold it
harmless against, any and all liabilities, claims, damages or expenses (including, witl10ut limitation, costs
and expenses of litigation and reasonable attorneys' fees) resulting from any breach by Borrower of any
representation, warranty or covenant contained in dus Agreement or any Loan Document. TIus
indemnification shall survive payment of Borrower's Obligations to Lender and shall continue for so
long as Lender may incur liability for or be harmed by a breach by Borrower of any representation,
warranty or covenant in this Agreement or any Loan Document.
Section 8.02 Entire Agreement. This Agreement embodies the entire agreement and
understanding between the parties hereto and supersedes all prior agreements and understandings
relating to tlle subject matte! hereof.
Section 8.03 No Waiver. No failure to exercise, and no delay in exercising any right, power or
remedy hereunder or under any document delivered pursuant h'ereto shall impair any right, power or
remedy which Lender may have, nor shall any such delay be construed to be a waiver of any of sucll
rights, powers or remedies, or an acquiescence in any breach or default under this Agreement or any
document delivered pursuant hereto, nor shall any waiver of any breach or default of Borrower
hereunder be deemed a waiver of any default or breach subsequently occurring. The rights and
remedies herein specified are cumulative and not exclusive of any rights or remedies which Lender
would otherwise have.
Section 8.04 Survival. All representations, warranties and agreements herein contained on the
part of Bal1:ower shall survive ilie Closing hereunder and all such representations, warranties and
agreements shall be effective as long as any portion of any Obligation remains unpaid.
Section 8.05 Notices. All notices, requests, approvals, consents, demands, and otIler
communication provided for or permitted hereunder shall be in writing, signed by an authorized
representative of tlle sender and addressed to tlle parties at theirrespective addresses set forth below:
Borrower:
Augusta Canal Authority
1450 Greene Street - Suite 400
Augusta, Georgia 30901
Attn: Executive Director
With a copy to:
Augusta, Georgia
Attn: City Administrator
530 Greene Street, Suite 801
Augusta, Georgia 30911
12
Lender:
Bank of America, N.A.
1901 Main Street, 3rd Floor (ZIP 29201)
P.O. Box 448 (ZIP 29202-0448)
Location Code: SC3-240-03-07
Columbia, Soutll Carolina
Attn: Credit Products Office for tlle Augusta Canal Autllority
Any of the parties hereto may change its respective address by notice in writing given to the
otl1er party to this Agreement. Any notice, request, approval, consent, demand or other communication
shall be effective upon tlle first to occur of the following: (i) when personally delivered to the party to
whom such notice, request, appIOval, consent, demand or otller communication is being given, or (ii)
two Business Days after being duly deposited in the United States mails, certified, return receipt
requested.
Section 8.06 Termination. This Agreement shall terminate when all Obligations of Borrower
shall have been discharged in full.
Section 8.07 Severability of Provisions: In case any oileormote of tlle provisioils contained ..
in dus Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way be affected or impaired
tl1ereby.
Section 8.08 Successors and Assigns. TIUs Agreement shall be binding upon and inure to the
benefit of Borrower, Lender and tlleir respective heirs, successors and assigns; provided, however, tllat
Borrower may not assign or transfer its rights to borrow under this Agreement without prior written
consent of Lender.
Section 8.09 Counterparts. This Agreement may be executed in any number of countelparts,
all of which taken togetller shall constitute one agreement, and any party hereto may execute tlus
Agreement by signing any such counterpart
Section 8.10 Choice of Law. This Agreement shall be govemed by and construed in
accordance with the law of tlle State of Georgia.
Section 8.11 Arbitration. The Parties agree to submit any dispute arising out of or otherwise
related to tlle Loan Documents to JAMS for binding arbitration in accordance witll the Federal
Arbitration Act.
Section 8.12 Amendment and Waiver. No provision of tlus Agreement, tlle Mortgages, or the
Note may be amended, modified, supplemented, changed, waived, discharged or terminated, unless
Lender and Borrower consent tllereto in Wli.ting.
13
Section 8.13 Limitation on Interest. No provision of this Agreement or any Note shall
require ilie payment or permit the collection of interest in excess of tlle maximum allowable by law. If
any such excess interest is provided for herein or in any Note, or shall be adjudicated to be so provided
for, then Borrower shall not be obligated to pay such interest in excess of tlle maximum allowable by
law, and tl1e right to demand payment of any such excess interest is hereby waived, any oilier provision
of this Agreement or any Note to the contrary notwitllstanding.
IN WITNESS WHEREOF, tlle parties hereto have caused this Agreement to be duly executed
under seal as of tlle day and year first above written.
LENDER:
BORROWER:
BANK OF AMERICA, N.A.
AUGUSTA CANAL AUTHORITY
By:
~~~~ ~~~~
-K.3.. LL'nrr\,hL4"ST. TIT
As its Chairman
As its:
14
...
AUGUSTA CANAL AUTHORITY REVENUE NOTE. SERIES 2004
$8,000,000.00
Augusta, Georgia
May 1, 2004
FOR V ALDE RECEIVED, Augusta Canal Authority (the "Borrower"), herebypromises to
pay to the order of Bank of America, N.A., its successors and assigns (the "Lender"), without setoff,
at 1901 Main Street, Columbia, South Carolina 29201 or such other place as may be designated by
Lender, the principal sum of Eight Million and NOIlOa Dollars ($8,000,000.00) together with
interest computed daily on the outstanding balance hereof at an annual interest rate and in accordance
with the payment schedule indicated below.
Limited Obligation of Borrower:
This Note shall not be a general obligation of the Borrower but shall be a limited obligation
. payable solely from the revenues and proceeds derived by the Borrower from the Intergovernmental .
Agreement between the Borrower and Augusta, Georgia dated as of May 1, 2004.
Interest:
This Note has a variable rate feature. The interest rate on this Note may change from time to
time if the Daily Floating LlBOR (as defined below) changes. Interest shall be computed on the
basis ofthe actual number of days over 360 days per year. Interest on tbis Note shall be calculated
and payable at a variable rate equal to an amount which is 65% of the Daily Floating LIBOR plus
one hundred fifty (150) basis points. The initial interest rate on this Note shall be 2.2% per annum.
For purposes hereof, "Daily Floating LillOR" means the fluctuating rate of interest (rounded
upwards, if necessary to the nearest 1/100 of 1%) appearing on the Telerate Page 3750 (or any
successor page) as the 1 month London interbank offered rate for deposits in United States Dollars at
approximately 11 :00 a.m. (London time) on the second preceding business day, as adjusted from
time to time in Lender's sole discretion forthen~applicable reserve requirements, deposit insurance
assessment rates and other regulatory costs. If for any reason such rate is not available, the tem1
"Daily Floating LIBOR" shall mean the fluctuating rate of interest equal to the rate of interest
(rounded upwards, if necessary to the nearest 1/100 of 1 %) appearing on Reuters Screen LIDO Page
as the 1 month London interbank offered rate for deposits in United States Dollars at approximately
11:00 a.m. (London time) on the second preceding day, as adjusted from time to time in Lender's
sole discretion for then-applicable reserve requirements, deposit insurance assessment rates and other
regulatory costs; provided, however, if more than one rate is specified on Renters Screen LIBO page,
the applicable rate shall be the arithmetic mean of all such rates. Interest will accrue on any non-
banking day at the rate in effect on the immediately preceding banking day. Any change in the
interest rate resulting from a change in the Daily Floating LIBOR will be effective on each day the
Daily Floating LIBOR changes.
P:\ODBIAUk'USl:I Call.1 Autbonlf,2004 Lo.n 2703-15\Nole Revised 5-17-04.doc
If at anytime the interest paid under this Note is determined to be taxable for federal income
tax purposes, and such determination becomes final, then the rate of interest due hereunder shall be
adjusted to a floating rate per annum equal to the prime rate publicly announced by Lender plus fifty
(50) basis points per annum. This adjustment shall be effective as of the date that the interest on the
Note became taxable.
Additionally, ifthe determination of taxability of the Note has the effect of reducing the rate
of return which the Lender could have achieved but for such determination, then the Borrower shall
pay to the Lender, upon demand therefore by the Lender, suc.h additional amounts as the Lender shall
reasonably determine are necessary to compensate the Lender for such reduced rate of return,
together with interest on such amount calculated at the Default Rate (as defined below) from the date
of such' demand until payment in full if such amount is not paid in full within thirty (30) days after
such demand.
In addition to any other remedies available to the Lender, upon the occurrence of Event of
Default (as defined in the Loan Agreement (as defined below)), to the exteilt permitted by lavi, the
rate of interest on the unpaid principal shall be increased, at Lender's discretion, to a floating rate per
annum equal to the prime rate publicly announced by the Lender plus three hundred (300) basis
points (the "Default Rate"). The provisions herein for a Default Rate and a delinquency charge shall
not be deemed to extend the time for any payment hereunder or to constitute a "grace period" giving
the Borrower a right to cure any default. At Lender's option, any accrued arid lll1paid interest, fees or
charges may, for purposes of computing and accruing interest au a daily basis after the due date of
this Note or any installment thereof, be deemed to be a part of the principal balance, and interest
shall accrue on a daily compounded basis after such date at the Default Rate provided in this Note
lll1til the entire outstanding balance of principal and interest is paid in full.
Pavrnent:
Borrower shall pay to Lender the principal and interest according to the following schedule:
Principal Payments: Beginning April 1, 2007 and on each April 1 thereafter until maturity at
April l, 2016, principal payments of $800,000.00 each shall be due and payable.
Accrued Interest Payments: Interest, to the extent accrued, shall be paid by the Borrower
semi-annually, commencing on October l, 2004, and continuing on each April 1 and October 1
thereafter, until the principal amount of this Note has been paid in full. The interest payments to be
made through Aprill, 2006 shall be paid out of Note proceeds.
Final Payment: One (1) final payment of all unpaid principal plus accrued interest shall be
made on Aprill, 2016.
P:\DDB\August. COIlO] AUlhority\2004 Lonn 2703-15\Nole Revised 5-17-04.doc
Prepayment:
Tl1.is Note may be prepaid in whole or in part at any time without penalty; provided, any
prepayment of this Note, whether at the option of the Borrower, by acceleration or othelwise, made
within one (l) year of the date of this Note shall be accompanied by a prepayment premium equal to
one percent (1.0%) of the principal amount prepaid. Any partial prepayment of principal shall be
applied in the inverse order of scheduled maturities of this Note.
Miscellaneous:
This Note is the "Note" as such term is defined in that certain Loan Agreement dated of
even date (as amended, modified or restated, the "Loan Agreement") between Lender and
Bon'ower. The terms of the Loan Agreement are incorporated herein by reference. Capitalized
terms used, but not defined, in this Note shall have the meanings ascribed to such terms in the
Loan Agreement.
To the extent permitted by law, a delinquency charge may be imposed in an' amount 110t to
exceed four percent (4%) of the unpaid portion of any payment that is more than fifteen days late.
The 4% delinquency charge may be imposed not only with respect to regular installments of
principal or interest or principal and interest, but also with respect to any other payment in default
under this Note (other than a previous delinquency charge), including without limitation a single
payment of principal due at the maturity of this Note. In the event any installment, or portion
thereof, is not paid in a timely manner, subsequent payments will be applied first to the past due
balance (wl1.ich shall not include any previous delinquency charges), specifically to the oldest
maturing installment, and a separate delinquency charge will be imposed for each payment that
becomes due until the default is cured.
Should the indebtedness represented by this Note or any part thereofbeplaced in the hands of
attorneys for collection, the Borrower agrees to pay, in addition to the principal and interest due and
payable hereon, all costs of collecting this Note, including reasonable attorney's fees and expenses.
The Borrower (and any other person becoming obligated hereunder) hereby waives
presentment, demand, dishonor, protest, notice for payment, notice of non-payment, notice of
default, notice of compromise or surrender and any other demand or notice whatsoever in cOlmection
with payment oft11.is Note. In addition to all other remedies provided in the Loan Documents, upon
the occurrence of an Event of Default, Lender may, at its option, declare all sums due hereunder
immediately due and payable. Failure to accelerate the debt evidenced hereby by reason of the
occurrence of an event of default, or the acceptance of a past due payment of interest or principal,
shall not be construed as a novation or a waiver of the right of the Lender to thereafter insist upon
strict compliance with the terms hereof without previous notice of such intention being given to the
Borrower.
P:\DDB\Augusla Cannl AUtllOrity\2004 Loan 2703-1SINole Revised S-17-04,doc
This Note shall be construed in accordance with and be governed by the laws of the State of
Georgia. The Borrower agrees to submit any dispute arising out of or otherwise related to the Note
to JAMS for binding arbitration in accordance with the Federal Arbitration Act. In the event that at
any time any payment of interest provided for hereunder shall be required to be made at a rate which
exceeds the highest rate pennitted by applicable law, such highest legal rate shall be substituted for
the rate of interest provided herein.
P:\DDBV\ugllSt:l CDlIDJ AuUlority12004 LOD1I2703-ISINote Revised S-17-04.doc
SIGNATURE PAGE TO
AUGUSTA CANAL AUTHORITY REVENUE NOTE, SERIES 2004
IN WITNESS WHEREOF, the Borrower has caused this instrument to be executed by and
through its duly authorized officer as of the day and year first above written.
BORROWER:
AUGUSTA CANAL AUTHORITY
~~~~
'Q..? VJo.~ TiT
AI; its: ~i"'~
Atta,,:,~-e d't/~
-ea..~ C, 4l4r-
AI; Its: 'Se~
P:\DDB\Augusta Canal Authority\2004 Lonn 2703-1 S\Note Revised S-14-04.doc
< >,
VALIDATION CERTIFICATE
STATE OF GEORGIA
COUNTY OF RICHMOND
The undersigned Clerk of the Superior Court of Richmond County, Georgia HEREBY
CER TIFillS that the foregoing Augusta Canal Authority Revenue Note, Series 2004 was confirmed
and validated by judgment of the Superior Court of Richmond County, Georgia rendered on the 11th
day of May, 2004, Civil Action File No. 2004-RCCV-466 that no intervention or objection was filed
thereto and that no appeal has been taken therefrom.
IN WITNESS WHEREOF, I have caused tins Certificate to be executed by the use ofmy
facsimile signature and have caused a facsimile of the official'seal of said Court to be affixed hereto.
(SEAL)
P:\DDB\Au~'US1ll Canal Authority\2004 Loan 2703-J5\Note Revised 5-17-Q4,doc
fiR BURNSIDE WALL LLP
IIlD ATTORNEYS AT LAW
James B, Wall, pc.
James W, Ellison
Thomas R. Burnside, III
Mark B, Williamson
454 Greene St.
PO. Box 2125
Augusta, Georgia 30903
Telephone:(706) 722-0768
Facsimile: (706) 722-5984
www.burnsidewall.com
Thomas R. Burnside, Jr.
(1938-2007)
Robert C. Daniel, Jr.
(1943-1993 )
May 2, 2007
Mr. Stephen E. Shepard
City Attorney
701 Greene Street
Augusta, Georgia 30901
RE: Loan Agreement with Bank of America
Dear Steve:
Pursuant to your request, I am enclosing executed copies of the Augusta Canal Authority
Revenue Note with the Bank of America, together with an executed copy of the Loan Agreement
between the Bank of America and the Augusta Canal Authority dated as of May 1,2004.
I am also forwarding copies of these to the Clerk's office to be sure that a copy of these
are on file with the City as well.
With best personal regards, I am
/'
/
( J~
~~" -'...
J
JBW /sjp
Enclosures
cc: Ms. Lena Bonner, Clerk