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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