HomeMy WebLinkAboutRecaptured Urban Development Action Grant Loan Fund
Augusta Richmond GA
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FILE NUMBER: J 31 t+ 3
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Recaptured Urban Development Action
Grant (UDAG) LOAN FUND
POLICY MANUAL
PREPARED FOR
AUGUSTA-RICHMOND COUNTY COMMISSION
BY
HOUSING AND NEIGHBORHOOD DEVELOPMENT
MAY 1998
I'~
TABLE OF CONTENTS
PROGRAM ELEMENTS OF THE PLAN
GOALS AND OBJECTIVES.....,..,..............,.,.................................................2
IDENTIFICATION OF FINANCING PROBLEMS WITHIN THE AUGUST A-
:RI CtIMOND COUNTY AREA,...,.,..,.............,.,..."",..........,.,........................4
T ARGJ~TING CRITERIA...........".".,...:.........,...,.,........,...................,.,.,..............,.....4
ADMIN1STRATIVE ELEMENTS OF THE PLAN...................................................5
LOAN ADMINISTRATION ORGANIZATION,...... ..........,................ ....... ...5
STAFF CAPACITY OPERTION OF SIMILAR PROGRAMS......................5
LOAN SELECTION AND APPROVAL PROCESS,.....................................6
J\.1ERIT FACTORS CONSIDERED,.................... ...... .......... .......... .......... .......7
LOAN SERVICING.,...........,.............,........,...,.,.,..................................,.................... 7
ELI G IBLE LOAN RECIPIENTS................."..........,.....,.,....."....................,......,....,. 8
INELIGIBLE LOAN RECIPIENTS.. .........,.",., .,.,.,.".. ,..... .... ..... ........ ......,....., .,."., ,.,8
USE OF LOAN PROCEEDS.. ....,.. ....... ....................................... ......... ....................10
INELICfIBLE LOAN PURPOSES. .................,.. ....., ............ .................................. ...1 0
CREDrr STRUCTURE..... ............................... ......................... ... ..... ........ ......... .... ..11
LOAN JlliCOMMENDA TIONS.... ............ ............ ............ ............................... ...... .14
TYPES OF LOANS TO BE MADE........................................,..............,................. 14
FINANCING POLICIES PLAN. ........... ......................., ....,.. ..... .......... ................ ....14
FINANC:ING POLICIES......................................,................................................ ..16
RELATED ACTIVITIES....... .......,.. ..... .............,.......... ......... ..... ..... ...................... .18
OTHER REQillREMENTS.,.".,.".............".,...............,...............,.,..,............,.......18
AL TElliNG POLICIES PLAN........,.........,., ..........,........ ....,.."......., "....".,... .........19
U.S, DEPARTMENT OF HOUSING & URBAN DEVELOPMENT (HUD)
FACTORS CONSIDERED IN ECONOMIC DEVELOPrvIENT LOANS,19
CREDIT FACTORS CONSIDERED. ..... .....",... ....,.".......... .,..,.,.... ..,.,......., .,........20
TYPES OF SECURITY, GUARANTEED, AND COLLATERAL NEEDED.....20
CDBG PROJECT REQUIREMENTS..,.. ............. ............. ....,.... ...., .......... ......... ...21
DELINQUENT LOANS,."..,.................".,.....,............,.,...........................,."...... .21
COLL:E:CTI ON LOANS............,.,...............,.......................".,...........,.........,...... .21
LOAN .A.MENDMENT REQUEST.....,.......,..,.,.....,.........,..,.".,...........,.,.........,.,22
APPENDICES
RECAPTURED UDAG LOAN FUND - LOAN PROCESS......., ...APPENDIX A
RECAPTURED UDAG LOAN APPLICATION....... .,.............. .APPENDIX B
LOAN AGREEMENT........."..................,..,.",............,.... .APPENDIX C
I.
PROGRAM ELEMENTS OF THE PLAN
Goals and Objectives
The Augusta-Richmond County Commission has a goal to reduce the historically high
unemployment and low income rates in Augusta-Richmond County. In accordance, the Augusta-
Richmond County Commission has created the Augusta-Richmond County Recaptured Urban
Development Action Grant Loan Fund Program to assist eligible areas with the retention,
expansion, and creation of private sector employment opportunities.
The following objectives are to be reached through the creation and availability of the
Recaptured UDAG Loan Fund.
> To retain existing jobs and create new jobs.
> To increase the per capita income of Augusta-Richmond County.
> To increase the tax base of Augusta-Richmond County.
> To overcome specific gaps in local capital markets that inhibit firms from obtaining
~:uitable credit within the Augusta-Richmond County service area.
> To provide employers with capital for start-up and/or expansion of locally owned
businesses in order to stabilize and to diversify the economy within the Augusta-Richmond
County service area.
> To redevelop and/or recycle blighted or vacant land and facilities in order to put them to
productive economic use.
> To assist businesses which are owned and/or operated by women, by minorities, or by
persons who are economically or socially disadvantaged.
> To implement other state and federal economic development loan programs in conjunction
with Recaptured UDAG funds.
> To make available capital for manufacturing and service companies, especially if they
utilize new technologies.
> To achieve economic diversification of area businesses into the field of manufacturing,
construction, and retail and wholesale services in Augusta-Richmond County.
> To utilize the minimum amount of public funds in order to leverage the maximum amount
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of private funds.
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~ To assist eligible neighborhoods in developing local lending programs that will
compliment the Recaptured UDAG funds.
~ To sustain growth and viability of the fund through the identification of potential sources
of additional capital.
These objectives will be met by making loans to prospective entrepreneurs who have not
been able to acquire any financing or complete financing from conventional sources. These loans
will promote the development of new businesses and expansion of existing businesses which will
create a.nd/or retain jobs that would have otherwise been lost in Augusta-Richmond County.
IDENTIFICATION OF FINANCING PROBLEMS WITHIN THE AUGUSTA-
RICHMOND COUNTY AREA
;Based upon experience, the Mayor and Commissioners have identified several gaps in the
local financing environment which have created hardships upon small businesses. These gaps are:
~ Conservative lending practices (such as requiring high equity, desiring short-term loans,
and preference towards existing businesses).
~ High int.erest rates which discourage fmancing.
~ Reluctance to participate/lack of expertise in participating in federal business development
programs.
~ Loans are made to preferred customers, which rarely include smaller businesses.
Recaptured UDAG Loan funds will be a financing entity which will attempt to fill these
gaps making loans of moderate interest rates to small businesses in order to cultivate economic
expansicm, job creation or retention and/or the prevention of business failure. Recaptured UDAG
loans will be made, when possible, in conjunction with other federal programs and with somewhat
more moderate lending practices (somewhat lower equity, longer-term loans, and towards new
business). Other efforts to bridge this gap will include accepting a wider range of credit and
security arrangements, financing potentially failing businesses to retain jobs, and considering
innovative ideas and products.
TARGETING CRITERIA
Due to the limited amount of funds, Augusta-Richmond County will focus its resources
upon areas of Augusta-Richmond County with high unemployment, low per capita income, or
those su1fering from chronic distress. Preference for approval will be to applicants which create
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and retain the largest number of permanent jobs for low and moderate income persons at the
lowest cost per job. All enterprises must be located within specified areas of Augusta-Richmond
County.
ADMINISTRATIVE ELEMENTS OF THE PLAN
LOAN ADMINISTRATION ORGANIZATION
The Recaptured UDAG Loan Fund will be administered by the Augusta-Richmond County
Housing and Neighborhood Development Department (HND) staff or a contracted agency. The
staff w:lll publicize the availability of funds at least 60 days prior to the final date for applications
when a competition is to be held. Management and technical assistance to potential borrowers
will be available from the Housing and Neighborhood Development Department staff or a
contracted agency during the application period. Application packages may be picked up in the
office of the Housing and Neighborhood Development Department. (Appendix A is a sample
applicadon).
Immediately after the application deadline, the HND staff will determine which
applications meet eligibility requirements and are sufficiently complete to score using the adopted
criteria. Loan applications will be submitted as needed to the Housing and Neighborhood Citizens
Advisory Board consisting of private sector individuals, members drawn from the banking
community and from the business community. The Augusta-Richmond County Commission will
be the Executive Board of the fund and will meet at least quarterly to be updated on the progress
and accomplishments of the program. The Citizen Advisory Board will review each proposal as
to its fi.nancial soundness and submit a written subjective evaluation from an underwriting
perspecl:ive.
After consideration of the input from the Citizen Advisory Board, the HND staff will score
and rank the applications. The ranking will then be compared to the funding availability and a
recommendation will be prepared as to which proposal should be approved. A list will be
submitted to the Commission at the next subsequent meeting for their approval.
After approval of the Commission, the successful and unsuccessful applicants will be
properly notified. The notice to successful applicants shall outline the procedures for closing the
loan. Any closing documents needed such as the security agreement, UCC-l, deed to secure debt,
and guarantees will be prepared by our attorney. A loan agreement as outlined in appendix B shall
also be included as closing documentation.
STAFF CAPACITY OPERATION OF SIMILAR PROGRAMS
The HND staff or a contracted agency possesses skills in the areas of business, finance,
marketing, credit analysis, loan packaging, and loan servicing. The staff or a contracted agency
will be in charge of the day-to-day operation of the Recaptured UDAG Loan Fund and will report
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directly to Commission during the quarterly Recaptured UDAG Loan Fund meeting. The staff
or a contracted agency will be responsible for preparing loan summaries for review by the Citizens
Advisory Board as meetings are needed. The staff or a contracted agency will also be responsible
for keeping the minutes of each Citizens Advisory Board and Recaptured UDAG Loan Fund
Board meeting.
LOAN SELECTION AND APPROVAL PROCESS
The HND staff will publicize the availability of loan funds through the news media,
seminars, banks, accountants, chamber of commerce, local business persons, University of
Georgia Business Development Center, CSRA Regional Development Center and the CSRA
Busine~;s League. The HND staff will interview loan applicants and submit their application to
the loan review committee through the following process:
1. The HND staff will meet with applicants to discuss their project. The purpose of the initial
interview is to give the applicant specific information about the loan fund and enable the
staff member to determine whether the business and the project meet the eligibility
requirements of program.
2. Applicants will be given an application to complete and return with a credit report and
personal financial statement. The HND staff member will provide technical assistance in
(;ompleting the application. The HND staff member or a contracted agency will prepare
a comprehensive business plan for all eligible applicants.
3. The HND staff reviews the application to ensure that all eligibility requirements and
conditions have been met by the applicant and analyzes the applicant's ability to carry out
the project successfully and to repay the loan.
4. The HND staff presents the application to the Citizens Advisory Board for their
consideration.
A scoring system has been developed that will allow the staff or a contracted agency to
review the proposals and advise the staff on the financial feasibility of each proposal.
The following are the criteria which will be utilized to evaluate each loan proposal and the
points assigned for each criteria. Each proposal will be scored using this system and the
gross scores should provide a good analysis of the extent to which the proposal furthers
the program goals and objectives. The criteria is as follows:
~ CDBG dollars per low/moderate job created or retained (documentation needed). Score
i!i relative to other applications, and higher if the ratio of dollars per job is low. (0-25
points)
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~ Jobs created in target areas. (0-20 points)
~ Financial feasibility of loan proposal. (0-20 points)
~ Total low/moderate and other jobs created. (Measure of the overall community economic
impact) (0-5 points)
~ Economic impact (other than jobs) in target areas. (0-5 points)
~ Capital/real estate tax base expansion. (0-5 points)
~ New business start. (0-5 points)
~ Potential for CDBG funds to stimulate future development beyond the initial impact. (0-5
points)
~ Minority/women owned businesses. (0-5 points)
~ Low-moderate jobs include training so that job skills will be acquired that would lead to
advancement and/or self-employment. (0-5 points)
MERIT FACTORS TO BE CONSIDERED
~ Increase or retain employment of low and moderate income individuals.
~ ]lmprove the County's tax base by increasing tax ratable property.
~ Assist neighborhood revitalization.
~ Assist opportunities for minority and female owned or operated businesses.
~ Increase desirable trade and commerce.
~ Assist in the revitalization of historic commercial, industrial or mixed-use property.
LOAN SERVICING
The HND staff or a contracted agency is responsible for the administration, monitoring,
and serv icing of loans from the time of loan approval through full repayment. The staff or a
contracted agency will monitor the loan agreement and the borrower's business activities for
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default:; in covenants and will maintain a loan payment schedule, with payments posted as to
principal and interest. Delinquencies in payments will be addressed by telephone, mail or personal
visits from the HND staff or a contracted agency. Delinquencies may be resolved by loan
restrucmring, a moratorium on payments, or other techniques upon approval of the Citizens
Advisory Board. Delinquencies which remain unresolved will be declared a default and
foreclo:;ure procedures will be initiated.
A project calendar system will be maintained on each loan in the portfolio to assure that
valid ha.zard insurance and life insurance is in place as agreed upon, financial statements received,
and UCC-l financing statements are continued every five (5) years as required by law.
ELIGllJLE LOAN RECIPIENTS
Generally, any for-profit corporation, partnership, or sole proprietorship shall be eligible
to apply for financing. This description shall include, and be limited to the following:
· Credit worthy commercial and industrial property owners or tenants who are able to
document the need for funds.
· For-profit institutions, excluding religious or religious sponsored institutions, carry on a
business activity for the purpose of obtaining pecuniary benefit, for its members, in the
operation of their otherwise eligible small business concerns.
· Each applicant will be required to provide a minimum of 10% equity injection into the
project.
· Prior to approval, all candidates for financing shall show evidence of, or provide for
adequate accounting and collection functions, proper receivable and inventory (where
applicable) control functions, and satisfactory billing and collections systems.
INELIGmLE LOAN RECIPIENTS
· Non-Profit institutions: If the applicant is a charitable institution or other non-profit
enterprise (i.e., churches, etc.)
· Newspapers, publishers, and broadcasting stations: If applicant is a newspaper, magazine,
book publishing company, radio broadcasting company, television broadcasting company,
or similar enterprise. Note: The reason for this prohibition is to avoid the possibility of
ac.cusation of Government infringement on freedom of the press, and the communication
of ideas and information which might tend to influence public opinion. "Similar
enterprises" would include producers of educational, political or sociological firms,
publications, training aids, or other materials, which could mold or influence public
opinion.
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· Gamblers: If any part of the annual gross income (including rental income) of the applicant
(or any of its principal owners) is derived from gambling activities, except in those cases
where an otherwise eligible small business concern obtain less than 1/3 of its annual gross
income (either at loan inception, or during loan term) from:
1. It's income or commissions from the sale of official state lottery tickets under a
state license; or
2. It's gambling activities in those states where such activities are legal within the
state.
· Individuals or organizations who hold real property for sale or investment, except in
designated business improvement districts where property is to be leased to otherwise
eligible business concerns.
· Individuals or organizations who wish to relocate a business: Loan proceeds may not be
used to relocate an existing business, unless the relocation is for a sound business purpose,
such as the following:
1. Consolidating operations in one location;
2. Locating closer to major consumers;
3. A voiding unreasonable burdens upon operation of business at its present location;
or
4. Locating closer to a source of basic materials or transportation facilities.
However, in no event shall loan proceeds be granted for business relocation if the
relocation would result in one of the following:
1. The move would cause serious unemployment in the present location;
2. The move would nullify a labor union contract, or a commitment to negotiate a
collective bargaining agreement; or
3. The move would involve substantial loss or expense to either party to an effective
outstanding lease.
· Applicants with a seriously delinquent credit history will not be accepted.
· All city officials and employees directly involved with the Recaptured UDAG Loan Fund
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Program. Note: Said officials and employe~s can become eligible after leaving office or
program for one (1) year.
· All Citizens Advisory Board members, employees and immediate family members.
USES .oF LOAN PROCEEDS
Proceeds of the loan are to be used in Augusta-Richmond County, Georgia to fInance
development projects, establishment of new businesses and/or the expansion of existing
businesses, creation of employment opportunities and/or retention of existing jobs. To the
maximum extent possible, applicants should use the labor of low-income persons. Loan funds may
be used. for, but not limited to:
~ Business acquisitions, construction, conversion, enlargement, repair, modernization, or
development cost
~ Purchasing and development of land, easements, rights-of-way, building facilities, leases,
.or materials
~ Purchasing of equipment, leasehold improvements, machinery, or supplies
~ jPollution control and abatement
~ Transportation services
)> Start up operating costs, working capital
~ Feasibility studies
Reasonable fees and charges. Authorized fees include loan packaging fees, environmental
clata collection fees, and other professional fees rendered by professionals generally
licensed by individual state or accreditation associations, such as engineers, architects,
lawyers, accountants, and appraisers. The amount of fee will be what is reasonable and
customary in the community or region where the project is located. Any such fees are to
be fully documented.
INELIGIBLE LOAN PURPOSES
Loan proceeds may not be used for the following:
)> For the transfer of ownership unless the loan will keep the business from closing, or
prevent the loss of employment opportunities
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~ For community antenna television services or facilities
~ For any legitimate business activity when more than 10 percent of the annual gross revenue
is derived from legalized gambling activity
~ For any illegal activity
~ For any otherwise eligible project that is in violation of either a Federal, State or Local
environmental protection law or regulation or an enforceable land use restriction unless the
financial assistance required will result in curing or removing the violation
> For any hotels, motels, tourist homes or convention centers
~ For any transit, recreation, or amusement centers
CREDIT STRUCTURE
All opportunities to be favorably considered by the Citizens Advisory Board must have a
well-written and thorough Credit Memorandum with [mancial statements and spread sheets
attached. The Credit Memorandum should include at minimum, the following:
~ BACKGROUND: Include a brief history of the organization (Le., when and where
founded, nature of products or services, sales territory, typical customers, main suppliers,
derivation of revenues and percentages from various products and/or services, and on-
going projects and backlog (if applicable).
~ MANAGEMENT: Include the background of principals and/or owners (including tenure
with the organization, age, educational background, technical background, prior work
experience, credit relationship with their bank, character, competence, depth of
management in general, and major stockholders (if privately held). Discuss job
delineation, availability of back-up, and management succession.
~ MARKET ANALYSIS: Discuss the size/maturity of the market. Is the industry and
its market growing, or is it in the mature phase of its product life cycle? Are there any
cyclical or seasonal influences; regulatory or legal considerations? Discuss competitions
and the applicant's relative strengths/weaknesses. Comment on any competitive
advantages or market niches which the company has. How significant are they?
> LOAN REOUEST: Briefly, detail the amount and purpose of the loan request, along with
the repayment orogram and source of repayment. There should be a repayment of
reduction agreement on practically all loans made.
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~ CREDIT RELATIONSHIPS: Identify other creditor relationships, comment specifically
on the experience of these other creditors and the circumstances surrounding those
previous and/or existing relationships. Include comments on the applicant's relationship
with suppliers. Also, include comments on the credit history of the principle - a formal
credit report may be necessary (including explanations oflate payments).
~ FINANCIAL ANALYSIS: Comment on the company's financial performance to date.
A description of the strength of the credit should be outlined. Include earnings history and
net worth (3 to 5 years, if available), cash flow and pro forma data (projections), fmancial
data on endorsers or guarantors. On loans where the fmancial conditions of the borrower
or guarantor is the strength of the credit, mention his/her net worth (your estimate of it,
not just what is shown on the fmancial statement), his/her liabilities, and the nature of
his/her principal assets. Briefly, mention any contingent liabilities (if significant in relation
to the borrower's net worth). Whenever possible, briefly mention the amount and type of
other fmancing from banks and other like creditors. Also state whether experience has
been satisfactory or not on each.
~ ~COLLATERAL SECURITY: Collateral analysis may include the following:
:lNVENTORY
It Account Receivables Aging
.t Customer list
It Insurability of inventory
" Inventory breakdown
41 Inventory storage requirement
., Potential for obsolescence, perishability, in inventory, etc.
])ERSONAL GUARANTY
.' Completed and current Personal Finance Statement (including contingent liabilities)
· Description of guarantor's personal assets
· Income and debt service capability
OTHER (WHERE APPLICABLE)
· Copy of Lease
· Market value of negotiable securities
· Copy of life insurance policy
· Existing policy loans
· Appraisal of fixed asset
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REPAYMENT RISKS
Comment upon the following:
· What can go wrong for the? The Industry?
· What can go wrong with our loan (volatility of repayment sources)?
· What can we do about it?
PROJECT COST ANALYSIS
Equipment, construction and property acquisition loans shall be supported by industry
standard estimates (i.e. other equipment store estimates, construction cost estimates
based on reference manuals, and property appraisals).
EQillPMENT LOANS
Loans secured by equipment should mature within the lesser of the following:
I. The useful life of the equipment , or
It Seven (7) years
Generally, loans should be no more than the following:
.' 90% of the wholesale cost of the new equipment
.' 85 % of the liquidation value of used equipment
Specialized equipment should be appraised by qualified personnel.
For any equipment of a specialized nature, a higher down payment should be required because of
the limhed market for such equipment.
The cost of equipment should be supported by a copy of the appraisal, purchase order or invoice
and exclusive of the following:
· Transportation cost
· Commissions
The staff or contracted agency officer should verify and evidence that borrower has insurance in
acceptable amounts for the following:
· Property damage insurance on property and equipment to be financed; and
· Full coverage for existing equipment
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LOAN RECOMMENDATIONS
Loan recommendations from HND' s staff or contracted agency officers on why loan is being
recommended to the Citizens Advisory Board.
At minimum, in order to prepare a credit memorandum and process an application, the following
information must be provided by all eligible clients:
· Business Financial Statements
lnterim Report (less 90 days - existing businesses only)
Income statement and balance sheet (last 2 years - existing businesses only)
Financial projection (2 years)
Monthly cash flow statement (first 12 months)
Narrative assumption to financial projections and cash flow analysis
· Owners Information
Personal financial statements
Tax returns (last 2 years)
Resume of key officers, or summary of key officer's business experience
· Brief Projection Description
Business history overview, outline of products or services, marketing and distribution
program, geographic service area
Amount of loan request and itemization of use of proceeds
A source and use statement identifying the project's total cost and source of
finance
· Project Cost Estimates
Two (2) estimates of equipment to be purchased
At least two (2) different contractor estimates on construction projects (if applicable)
Lease Agreement (proposed arrangement) or land/building purchase agreement (if
applicable)
Bank commitment letter (loan participation applicants)
If the business is a franchise, include a copy of the Franchise Agreement, and the
Franchisor's FTC Disclosure Statement
A copy of Articles of Incorporation or Partnership Agreement for corporation or
Partnership
TYPES OF LOANS TO BE MADE
~ DJRECT LOANS: A direct loan may be provided to applicants within the targeted areas
of Augusta-Richmond County if applicant is not able to secure a market rate loan for the
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total financing needed. The maximum amount of loans available is $150,000 at an interest
rate to be established based on the projects I cash flow to be repaid monthly over a term to
exceed twenty (20) years.
> LOAN P ARTICIP A TION: Project funds may be committed to participate in large loans
(usually $150,000 or more) with other fmancing entities (i.e., SBA throughout the
Community Development Impact Area (CDIA). Loans may be made to small businesses
(when needed) to assist them in meeting local injection needs. No more that 10% of the
total fmancing shall be provided from the Recaptured UDAG funds.
The loan is to be repaid in principal and interest in equal monthly installments at a term
no longer that of the longest participating lender (20 Years Maximum). Loans to SBA
assisted activity can only be made if ARC has an adopted method of allocating
administrative costs under which the CDBG expenditures for such costs are not chargeable
to loans made with SBA funds.
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FINANCING POLICIES
The Recaptured UDAG Loan funds will be administered in accordance with the following
policies:
)> The minimum loan amount shall be $25,001 and the maximum loan amount shall be
$150,000.
)> The terms of the loan will be as short as possible, usually no longer than 20 years for fIxed
assets and usually no longer that 10 years for non-fIxed asset loans.
)> Interest rates on loan will normally be fIxed at 2 % above the treasury rate for 1he term at
lhe time the loan is processed.
)> Upon the appro\:,al of the loan, each applicant who receives a loan from the Recaptured
UDAG Loan Fund will be charged a processing fee equal to 1 % of the total amount of the
loan, or $500.00, whichever is greater. This processing fee may be deducted from the
amount to be loaned to the borrower.
)> Attorney fees charged in connection with the loan closing may also be deducted from the
loan amount.
)> The Commission, upon recommendation of the staff or a contracted agency, may modify
the term(s) of this contract or make temporary adjustments to its provisions upon fInding
that the applicant has temporary difficulties that could realistically be resolved by such
actions.
)> In the determination of collateral requirements, the Citizens Advisory Board will take into
c.;)nsideration the merits and potential economic benefIts of each applicant's p~oject. The
financing may be secured by liens or assignments of rights in the assets of the borrowing
company. In order to encourage financial participation by other lenders, the fund I s lien
position may be subordinated to liens securing other Loans made in connection with the
pJoject. Hazard insurance assignments will be required on all collateral securing loans
to the loan fund. The Recaptured UDAG Loan Fund may also require security in the form
of assignment of patents and licenses, the acquisition of other forms of insurance, and such
olher additional security as the administrative board may consider necessary to secure a
loan. Loan requests submitted by security as the administrative board may consider
necessary to secure a loan. Loan requests submitted by closely held corporations,
partnerships, or proprietorships dependent for their continuing success on certain
individuals will ordinarily be expected to provide and assign the loan fund life insurance
all these key persons. Personal guarantees will be required from all principal owners 20 %
or more ownership.
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).- All proceeds from interest payments and principal will be returned to the Recaptured
UDAG Loan fund for additional loans.
).- Whenever feasible, the HND staff or a contracted agency will use other state and federal
funding in lieu of or in conjunction with Recaptured UDAG funds.
).- The HND staff or a contracted agency presents the application to the Citizens Advisory
Board for their consideration. The Committee evaluates the application and makes the
decision, by majority vote, to approve or disapprove the application. The Committee may
make its approval contingent on the applicant's fulfilling certain special conditions.
).- If the Citizens Advisory Board disapproves a loan application, the applicant is so infonned,
and recommendations may be made to the applicant for further action. If the Citizens
Advisory Board approves the loan application, the applicant is also infonned of any special
conditions .
).- After satisfactory resolution of any special conditions, the loan closing is held and funds
are disbursed in accordance with the loan agreement. In addition to the standard closing
documents needed for any closing, such as the Note, Security Agreement, UCC-l, the
Deed to Secure Debt, and guarantees, the staff or a contracted agency shall also obtain a
loan agreement as outlined in Appendix B.
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RELA TED ACTIVITIES
In addition to making loans, the Augusta-Richmond County Housing and Neighborhood
Development Department will aid businesses through the following forms of assistance.
>> Technical and Management Assistance
The HND staff or a contracted agency will assist businesses in obtaining the technical
and management assistance provided by various federal, state, and local government
agencies.
>> Loan Packaging and Referral Service
The HND staff or a contracted agency will assist applicants in packaging loans so as
to encourage private sector fmancial participation. The HND staff or a contracted
agency will also assist small businesses and industries in obtaining fmancing from other
public and private sources whenever feasible.
OTHER REQUIREMENTS
>> ~Civil Rights
No applicant or potential applicant is to be denied a loan on the basis of race, color,
national origin, age, religion, sex or handicap. This is to be assured through minority
representation on the Citizens Advisory Board and through an outreach program
including the following elements:
>> Notice of Recaptured UDAG Loan Funds availability is to be given to:
a. Community minority leaders or organizations
b. Community women leaders or organizations
c. Local radio and television stations that provide public servIce
announcements
d. Area newspapers
To assure that borrowers will not discriminate against employees or applicants for
employment on the basis of race, color, national origin, age, religion, sex, or handicap,
applicants will submit information concerning their civil rights status and involvement in
any complaints, lawsuits or other charges of discrimination and information concerning the
racial composition of their work force. Applicants will also be required to provide a
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statement of compliance with all applicable state and federal civil rights laws and
regulations .
The Recaptured UDAG Loan Fund will have direct minority representation on its Citizens
Advisory Board to assure that minority groups are included in the process of establishing
and administering lending practices.
>> Environmental Considerations
All projects to be considered for funding will adhere to environmental performance
standards. No project will be approved which produces an insurmountable harmful
alteration of the environment.
>> ,Flood Hazard Insurance
Borrowers will obtain the required flood hazard insurance, which must be applied for
prior to loan closing or disbursement if necessary.
>> j\ccess for the Handicapped
Applicants must comply with all requirements for providing adequate access to the
handicapped if covered under the American's with Disabilities Act as amended (ADA).
>> )~eporting Requirements
The staff or a contracted agency will submit an annual report to the Mayor and County
Commissioners.
ALTERING POLICIES /PLAN
This plan for the Recaptured UDAG Loan Fund cannot be altered without consent of a
majority vote of the Mayor and Commission in an open meeting.
U .S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD) FACTORS
CONSIDERED IN ECONOMIC DEVELOPMENT LOANS
In consideration to whom HND or the contracted agency will make loans, from the fund,
the applicant(s) proposed loan should result in one or more of the following:
"-
I. Increase or retain employment
19
2. Improve the Augusta-Richmond County's taxbase by increasing tax rateable
property
3. Assist neighborhood revitalization
4. Assist opportunities for minority and female-owned or operated businesses
5. Increase desirable trade and commerce
6. Assist in the rehabilitation of historic commercial, industrial, or mixed-use property
CRED][T FACTORS CONSIDERED
1. 'Willingness and ability to pay is required.
2. :~o loans are made in cases where state, local or federal tax liens, or back taxes exist.
3. lPersonal and business credit history must be good. Previous credit delinquency is not
necessarily disqualifying, if accounts have been re-established in credit-worthy condition,
and the ability to repay is apparent.
4. Soundness of the existing or proposed business enterprise will be considered (i.e., available
cash flow must be evident).
TYPES OF SECURITY, GUARANTEE, AND COLLATERAL NEEDED
1. Personal and business guarantees of loans are required.
2. Chattel mortgages, liens, and mortgages are taken or placed to provides collateral of the
greatest possible security.
3. The security interest (collateral position) of the Recaptured UDAG Loan Fund Program
may be made subordinate to the interest of other lenders (i.e., banks or the SBA) in order
to secure total project fmancing.
4. Face value of life insurance on asset loans.
CDBG FIROJECT REQUIREMENTS
20
HND staff or a contracted agency shall make a Necessary and Appropriate Determination on all
private for-profit business before assistance is provided.
HND Staff or a contracted agency will determine eligibility of the assistance based on the federal
national objectives - benefit to low and moderate income area, creation or retention of jobs for low
and moderate income persons, or elimination of slum and blight.
· For each business assisted under low and moderate area benefit, the HND staff or a
contracted agency shall maintain documentation of boundaries of the service area and
income data on the service area.
· For each business assisted under job creation for low and moderate income persons or job
:retention for low and moderate income persons, the HND staff or a contracted agency shall
complete and maintain job creation forms or job retention forms. In addition, HND staff
I)r a contracted agency shall maintain documentation verifying that in the absence of CDBG
assistance, the jobs would be lost.
· For all jobs, HND staff or a contracted agency shall maintain, or have access to
documentation on family-size and household income for each person holding a job. This
documentation must be applicable to the holder before the assistance was provided HND
~;taff or a contracted agency shall report on job creation /retention to Augusta-Richmond
County Commission on a quarterly basis.
· For each business assisted under addressing - slum and blight on an area basis, HND staff
or a contracted agency shall maintain records on the boundary of the area, and a
description of the conditions which qualify the area. For each business assisted under
addressing slum and blight on a spot basis, HND staff or a contracted agency shall
maintain records on the description of the specific blight or physical decay being treated.
DELINQUENT LOANS
PJI delinquent loans will be serviced by the HND staff or a contracted agency. A
delinquent loan is considered delinquent 45 days after loan payment is due. A late charge (4% of
any insta.llment of principal and/or interest) may be charged at the discretion of the HND staff or
contracted agency if payment is not received by HND staff or contracted agency 15 days after such
installme:nt is due.
COLLECTION LOANS
All loans that have been turned over to a collection attorney will be serviced by the
21
attorney and not HND's staff or a contracted agency loan officers.
LOAN AMENDMENT REQUEST
Any request from borrowers seeking changes to the initial loan terms (i.e., moratorium on
loan payments, loan assumptions, etc.) shall be approved by a quorum of the Commission. The
borrower shall provide HND staff or the contracted agency with detailed supporting information
(business and personal).
22
(APPENDIX ~)
Recaptured UDAG LOAN FUND
Loan Process
The folic wing items will be needed to process your loan request:
'1. Personal Financial Statement
:~. Fiscal year end Financial Statements for the previous three years
:~. Current Financial Statements, no older that 90 days for the current year
4. Financial Statements for the previous three years of all affiliates, includes any
businesses' principals have ownership in
~;. Two years projections with narrative (Form Enclosed)
6. Monthly Cash Flow Projection for the first year (Start Up Only)
(Form Enclosed)
7. Tax Returns for the past three years for all principals.
8. History of Business.
9. Resume of Manager/Owner
10. Sales contract (if real estate or business being purchased)
11. Copy of Lease if premises are leased
12. Construction Bid or Contract on site improvements
13. Copy of Vendor quotes showing Machinery, Equipment, Fumiture or Fixtures to be purchased
14. Copy of Franchise Agreement
15. Copy of Articles of Incorporation (if applicable).
16. Statement by applicant describing business ability and why applicant thinks business will
succeed
23
(APPENDIX B)
AUGUSTA-RICHMOND COUNTY
Recaptured Urban Development Action Grant (UDAG)
LOAN FUND APPLICATION
I. REQUEST
Date
Amount of Loan Request $
Terms Requested
II. GENERAL INFORMATION
Name ofBI)ITower
Operating Name (If Different)
Address of Project
City
County
State
Zip
Phone # (H)
(W)
o Corporation
o Partnership
o Proprietorship
How Long (?)
Date Established
o New
o Existing
Type of Business
III. ECONOMIC IMPACT
A. # LowlModerate Income Jobs To Be Created
# LowlModerate Income Jobs To Be Retained
B. Community Project: If the project does not meet the job requirements, attach a separate justification for
qualification.
1
IV. USE OF PROCEEDS
Land Acquisition
Land Improvements
ConstructionlRenovation Cost(s)
Purchase Machinery and Equipment
Purchase Existing Land & Building
Purchase Furniture and Fixtures
Working Capital
Inventory
Debt Consolidation
Professional Fees
Interim Interest
Other
$
$
$
$
$
$
$
$
$
$
$
$
$
% $
% $
% $
% $
100% $
TOTAL PROJECT COST
V. SOURCES OF FUNDS
TOTAL SOURCES OF FUNDS
(20% Cash injection requiredfor start up business).
VI. COLLA TI:RAL
The collatE:ral offered to secure this loan is as follows:
(Examples: Automobile, land, property, life insurance policy (Cash Surrender Value)}
(1)
$
(2)
$
(3)
$
TOTAL COLLATERAL OFFERED
$
Guarantees/Life Insurance/Other:
Personal and business guarantees required
2
VII. INDEBTEDNESS
Furnish tlrelollowing information on all installment debt owed by the business or in relation
to the business:
To Whom Amount Date Balance Amount Matures Security
VIII. TELL US ABOUT
YOURSELF
YOUR SPOUSE
Name:
Social Security #
Social Security #
Age
Date of Birth
Age
Date of Birth
EMPLOYMENT
Employer's Name
Employer's Name
Address
Address
YOURSELF
YOUR SPOUSE
Telephone#( )
Telephone#( )
How Long Employed?
How Long Employed?
Position
Position
Monthly Incom(~
Monthly Income
Do You: Own Your Home? 0 Yes 0 No
Rent? 0 Yes
ONo
3
Name & Address of Mortgage Company:
IX. BANKING RELATIONSHIP
NAME OF BANK ADDRESS TYPE OF
ACCOUNT
X. CLIENT DATA
Minority Group (Check One)
o
o
o
o
o
Black! African American
~.1exican
Puerto Rican
Cuban American
Other
o . American Indian
o Eskimo & Aleut
o Asian American
o Other Minority .
.0 Non-Minority
Gender:
o Male 0 Female
Number of Dependents:
Marital Status:
o Single
o Widowed
o Married 0 Divorced
o Separated
Education:
GRADUATE DIPlOMAI
NAME ADDRESS YES/NO DEGREE
HIGH
SCHOOL
TECHNICAL
SCHOOL
COLLEGE
4
GRADUATE :I
SCHOOL
XI. BUSINESS INFORMATION
New/Start Up Business:
Propose:d location of Business
I
Equity Capital:
Cash $
Type of Assistance desired
Property Value
Amount of Loan desired for Proposed Venture of Business
Existing: Businesses:
Do you own a business?
Business Type (Check One)
o Franl:;hise
o Dealership
o Distributionship
o Licensee
o Independent
DYes (If yes, fill out Business Information Section)
o No (If No, Proposed Percentage of Ownership)
# Employees
Total
Minority
Paid
Non-Minority
Gross Receipts
Year-to-date
Last year 19
2-years ago
3-years ago
5
Was business founded by present owner? I:l Yesl:l No
If no, how was ownership of this business acquired:
I:l New Start I:l Spin-off I:l Buyout acquisition
I:l Merger/combination
I:l Joint Venture
I:l
Other
Do you own location? I:l Yes
UNo, LeaselRent Per Month $
I:l No
XII. MANAGEMENT/OWNERSHIP
List all proprietors, partners, officers, directors, and holders of stock,
100% ownership must be shown *:
Name
Social Security #
Complete Address
NOTE: Percentage must total 1000/0
XIII. BANKING RELATIONSHIP
Name of Current
Banlc
Addft:~ss :
Bankl~r's Name:
Phone #
6
XIV. AGREEMENTS
The applicant agrees, to the maximum extent possible, to use labor of low-income
per:;ons. The applicant certifies that neither they nor members of their families hold any
legal or financial interest in the Augusta-Richmond County Commission, nor does any
Commission member own any legal or financial interest or influence with the applicant.
The undersigned assures that it does not and/or will at all time comply with Title VI of
the Civil Rights Act of 1964. "Nondiscrimination in Federally Assisted Programs," (42
U.S.C. 2000d-2000d-4) and that it will not discriminate on the basis of race, color,
religion, national origin, age, physical or mental handicap, sex or marital status with
respect to its day to day operations. The applicant certifies by signing that the proposed
business is located within Augusta-Richmond County, Georgia. The applicant certifies
that the financing they are requesting is not available from other federal, state, or private
sectm programs. The applicant certifies that those facilities under its ownership, lease or
supervision which will be utilized in the accomplishment of the project noted above, are
not listed on the Environmental Protection Agency's (EP A) List of Violating Facilities.
The undersigned will notify Augusta-Richmond County of the receipt of any
communication from EP A of activity that the facility is under consideration for listing on
the Violating Facilities list.
XV. CERTIFICATION
The undersigned hereby certifies that all information contained above and in exhibits
attached hereto are true and complete to the best knowledge and belief of the applicant
and are submitted for the purpose of inducing Augusta-Richmond County to consider
his/her financial request. This also certifies that Augusta-Richmond County, Housing
and :"l'eighborhood Development Department staff is authorized to check the applicant's
credit and employment history and to ask questions about their experiences with the
applicant for the purposes of considering the financial assistance requested in this
application. Whether or not the financial assistance herein applied for is approved,
applicant agrees to pay for the cost of any survey, title or mortgage examinations,
appraisals, etc., performed by non-Augusta-Richmond County personnel with consent of
the applicant.
APPLICANT SHALL IMMEDIATELY NOTIFY THE AUGUSTA-RICHMOND
COUNTY HOUSING AND NEIGHBORHOOD DEVELOPMENT DEPARTMENT OF
ANY CHANGE(S) IN OR ADDITION TO THE INFORMATION ABOVE.
BY:
Applicant's
Signature
Signature
TITLE:
ATTEST:
(SEAL)
TITLE:
7
(APPENDIX C)
LOAN AGREEMENT
THIS AGREEMENT, made as of the
199-, by and between
(hereinafter referred to as "Borrower"), and
organized and existing under the Laws of the State of Georgia
(hereinafter referred to as "Lender");
WITNESSETH
WHEREAS, Borrower desires to acquire funds for leasehold improvements, purchase of machinery, equipment fumiture, and
fixtures, an j the refinance of existing debt
WHEREAS, Lender has agreed upon the tenns set forth herein to lend Borrower the amount of
. (the "Loan") for the purposes set forth above; and
WHEREAS, Borrower and Lender wish to enter into this Agreement in order to more particularly set forth the tenns and conditions
of the Loan to be extended to Borrower by Lender;
NOW, THEREFORE, for the mutual covenants herein contained and other valuable consideration, the receipt and adequacy
whereof are hereby acknowledged, Borrower and Lender hereby convenant and agree as follows:
(1) Status of Borrower. Borrower does hereby certify to Lender that, as of the date of this Agreement, Borrower has full power
and authority to consummate the transactions contemplated by this Agreement
(2) Loar Documents: Borrower has duly authorized, executed and delivered to Lender its Note (hereinafter referred to as the
"Note") of e'/en date herewith, in the principal amount of . The
indebtednes 5 evidenced by the Note is secured by a security deed, security agreement, UCC-1, UCC-2, and personal guaranties.
The Note and all other documents are sometimes hereinafter collectively referred to as the "Loan Documents" and are incorporated
into this Agmement by reference.
(3) Warranties of Borrower. Borrower hereby warrants to Lender as follows:
(a) TIlat this Agreement and the Loan Documents are in all respect legal, valid, binding and enforceable according to their
tenns, subject to the bankruptcy laws and other laws of debtor relief and grant to Lender a valid and enforceable lien against the
property dl~scribed in the security agreement.
(b) That the consummation of the transactions hereby contemplated and the performance of the obligations of Borrower under
and by virtue of the Loan Documents will not result in any violation of, breach of, or constitute a default under any mortgage, security
deed, deed of trust, lease, bank loan, credit agreement, assignment, any other security instrument, or any other instrument or
agreement to which Borrower may be bound or affected.
(c) That there are no actions, suits or proceedings pending or to the knowledge of Borrower, threatened, against or affecting
Borrowers, or any of Borrower's property, either real or personal, or involving the validity or enforceability of any of the ~oan
Documents or the priority of the lien or security interest thereof, at law or in equity, or before or by any governmental authority, and
Borrower is not in default with respect to any order, writ, injunction, decree or demand of any court of any governmental authority.
(d) That Borrower has no knowledge of any violations or notices of violation of any federal law or any law of any state, any
county or municipal ordinance or any order or requirement of any governmental authority having jurisdiction affecting the Borrower,
Borrower's property or the conduct of Borrower's business.
(e) That the facilities and equipment of Borrower's business are not prohibited by and will comply with governmental laws,
ordinances, regulations, and requirements which are applicable and are not prohibited by and will comply with the standards and
regulations of appropriate supervising boards of fire underwriters and similar agencies.
(fj That the Borrower's place of business in Richmond County, Georgia, is not now damaged as a result of any fire, explosion,
accident or other casualty.
(g) That there is no default of Borrower under the Loan Documents or this Agreement, and no event has occurred and is
continuing which, with notice or the passage of time or either, would constitute a default under any thereof,
(h) Borrower's financial statements heretofore delivered to Lender correctly represent the financial condition of Borrower.
(4) Covenants of Borrower: Borrower hereby covenants and agrees with Lender as follows:
(a,1 To permit and commit no default under the terms of the Loan Documents or this Agreement.
(b) To pay before they shall become past due all taxes for which Borrower is liable; provided, however, that Borrower shall
be permitted to withhold the payment of any taxes which Borrower is actively contesting in good faith for so long as such
non-payment does not have a materially adverse effect on the priority of Lender's security for this Loan. In the event Borrower shall
contest the payment of any taxes against it, Borrower shall give Lender prompt notice of such fact and shall keep lender informed as
2
.
to the pro~ ress of such proceedings.
(c) To keep Borrower's equipment and properties in good repair and operating condition, and when necessary, to make such
renewals, replacements and improvements to Borrowers' equipment and property so that Borrower's business may be carried on at
all times in a proper and efficient manner consistent with prudent business management
(d) no supply Lender with evidence by , that the borrower has created a minimum of ----..: jobs, which
evidence shall consist of copies of Fonn 941 filed with the Intemal Revenue Service and such other documentation as Lender shall
require.
(e) To comply with the Civil Rights Act of 1964 and any amendments thereto and the regulations issued by the Department of
Commerce, in implementation of the Civil Rights Act of 1964, designated as Part 8 of Subtitle A of Title 15 of the Code of Federal
Regulatiomi, and any amendments thereto. Borrower shall supply to Lender upon request, and within a reasonable time, assurance
in fonn and content satisfactory to Lender of Borrower's compliance with this section.
(1) To comply with the provisions of Section 112 of Public Law 92-65, amending the Public Works and Economic
Development Act of 1965 and the rules and regulations issued pursuant thereto. In addition, Borrower agrees to secure the
compliance or to cooperate actively with Lender to secure the compliance of others doing business with Borrower with said law
regulations. Said law and regulations provide that no person shall, because of race, color, national origin or sex, be excluded from
participation, be denied the benefits of or be otherwise subjected to discrimination under any program or activity for which federal
financial as~;istance has been provided. Borrower assure Lender that the provisions of this section shall be incorporated into
agreements contracts or other documents which Borrower may enter into in the future so that such provisions shall be binding upon
Borrower's ~Irantees, assignees, transferees, lessees, or successors in interest to the business of Borrower. Borrower shall supply to
Lender, pronptly upon request, assurance in fonn and content satisfactory to Lender of Borrower's compliance with this section.
(g) To obtain at Borrower's expense, such insurance as Lender may reasonably require, including but not limited to, the following:
(1) Hazard Insurance - fire and extended coverage insurance and such other hazard insurance as Lender may require, all
property of Borrower which is of an insurable character, showing Lender as loss payee as its interest may appear, with standard
non-contribuong mortgage clauses and standard subrogation clauses, such insurance to be such amounts (which in any event shall
be great enough to prevent Borrower from being a co-insurer) and fonn and issued by such companies as shall be approved by
Lender. The. originals of such policies (together with appropriate endorsements thereto, evidence of payment of premiums thereon
3
.
and written agreement by insurer or insurers therein to give Lender ten (10) days prior written notice of intention to cancel) shall be
promptly dHlivered to Lender; such insurance to be in force, immediately upon execution of this Agreement and to be kept in full force
and effect at all times thereafter until the payment in full of the indebtedness evidenced by the Note.
(2) Public Uability and Workmen's Compensation Insurance - a certificate from an insurance company indicating that
Borrower and all contractors with Borrower are covered by public liability and workmen's compensation insurance in an amount
customary in similar situations or as required by law.
(t1) To pay all costs of closing the Loan and all expenses of Lender with respect thereto, including but not limited to,
advances, recording expenses, taxes, fees of Lender's counsel, and similar items, and to allow all closing papers, loan documents
and other le~al matters to be subject to the approval of Lender's counsel prior to execution by any of the parties.
(I) To pennit Lender and its representative and agents to enter upon the Borrower's property at any reasonable time and to
inspect sam3 and to cooperate with Lender and its representatives and agents during such inspection. There shall be a reasonable
span of time between each inspection and Borrowers shall be given reasonable notice of each such inspection.
U) To furnish to Lender all instruments, documents, certificates, business plans, appraisals, insurance, reports and
agreements and each and every other document and instrument required to be furnished to Lender by the tenns of the Loan
Documents or this Agreement.
(k) To do and execute all and such further lawful and reasonable acts, conveyances and assurances for the better and
more effective carrying out of the intents and purposes of this Agreement, including using the proceeds of the loan in a timely
manner.
(I) To provide Lender with financial infonnation concerning Borrowers in fonn and frequency satisfactory to Lender, which
shall include, but not be limited to, annual financial statements of the Borrower (including a balance sheet and profit and loss
statements) certified to by the Borrower.
(m) To pay to Lender a late charge of 4% of any installment of principal and/or interest not received by Lender within 15
days after such installment is due.
5. Default - An event of default shall be deemed to have occurred hereunder if
(a) Any default or event of default occurs under any of the Loan Documents; or
(b) Borrower breach or fail to perfonn, observe or meet any covenant or condition of the Loan Document or this
4
'.
. ".
Agreement; or
(c) Any warranties made herein or in any of the Loan Documents shall be breached by Borrower or shall prove to be false
or misleading; or
:d) Any lien for labor, material, taxes or otherwise shall be filed against the property of Borrowers which is not discharged,
released by bonding, or otherwise disposed of in such fashion as is acceptable to Lender within 15 days of the filing N
thereot, or
(e) Any suit shall be filed against Borrower which, if adversely determined, could substantially impair the ability of Borrower
to perform each and every one of its obligation under and by virtue of the Loan Documents or this Agreement; or
m A levy be made under any process on, or a receiver be appointed for, any property of Borrower; or
(!~) Borrower commits any act of bankruptcy or any proceedings under bankruptcy laws or other laws of general application
to creditors be brought by or against Borrower; or
(i1) In any legal proceeding, Borrower are adjudicated to be insolvent or unable to pay its debts as they become due; or
(i) Borrower omit to do any act or any event occurs as a result of which any obligation of Borrower, not arising hereunder,
may be declared immediately due and payable by the holder thereof, which declaration could substantially impair the
ability of Borrower to perform pursuant to this Agreement or the Loan Documents; or
Q) Lender shall reasonably suspect the occurrence of one or more of the above said events of default and Borrower, upon
request of Lender, shall fail to provide evidence reasonably satisfactory to Lender that such events or events of default
have not in fact, occurred.
(6) Remedies of I.ender - Upon the occurrence of an event of default under this Agreement or any of the Loan Documents,
Lender shall, at its option, be entitled to proceed to exercise any, all or any combination of the following remedies:
(a) Borrower agrees that the occurrence of such event of default shall constitute a default under each of the Loan Documents
and this Agreement, thereby entitling Lender to exercise any of the various remedies therein provided, including but not limited to, the
acceleration of the indebtedness evidenced by the Note and the exercise of the power of sale under same, or the foreclosure of the
mortgage and cumulatively to exercise all other rights, options and privileges provided by law.
(b) Borrower agrees, upon the request of Lender, to permit Lender:
(1) To perform or cause to be performed any and all work and labor necessary to preserve and protect the property
5
!
.- ~
described in the Security Agreement
(7) Application for Loan - Borrower affirms that all of the representations made and facts presented by Borrower in its Revolving
Loan Fund Application to Lender are, as of the date of this Agreement, true, accurate and correct and Borrowers acknowledge that
they shall continue to be bound by all agreements and certifications made by Borrowers in said Revolving Loan Application, all of
which is incorporated herein by reference and which shall survive the closing of the Loan.
(8) Rights of Third Parties - All conditions of ,the obligations of Lender hereunder, are imposed solely and exclusively for the
benefit of lender and its successors and assigns and no other person shall have standing to require satisfaction of such conditions in
accordance with their terms. In particular, Lender makes no representations and assumes no obligations as third parties. In this
connection, Borrower agrees to and shall indemnify Lender from any liability, claim or losses resulting from the disbursement of the
Loan proceeds.
(9) Relationship of Parties - No express or implied term, provision 16H or condition of the Loan Documents or this Agreement
shall, or shelll be deemed, to constitute Borrower and Lender as partners or joint ventures.
(10) Evidence of Satisfaction of Conditions - Any condition of this Agreement which requires the submission of evidence of the
.
existence or non-existence of a specified fact or facts, implies as a condition the existence or non-existence, as the case may be, or
such fact or facts, and Lender shall, at all times, be free independently to establish to its own satisfaction and in its absolute discretion
such existence or non-existence.
(11) Assgnment - Borrower may not assign this Agreement or any of its rights or obligations hereunder or under the Loan
Documents without the prior written consent of lender.
(12) Successors and Assigns Included in Parties - Whenever in this Agreement, one of the parties is named or referred to, the
legal representatives, successors and assigns of such parties shall be included and all covenants and agreements contained in this
Agreement by or on behalf of Borrower or Lender shall bind and inure to the benefit of their respective heirs, legal representatives,
successors and assigns, as the case by be, whether so expressed or not, subject to the provisions of Section 11 hereinabove.
(13) Headings - The headings of the sections of this Agreement are for the convenience of reference only, and are not to be
considered a part hereof and shall not limit or otherwise effect any of the terms hereof.
(14) Invalid Provisions to Effect no Others - If fulfillment of any provision hereof or any transaction related hereto, at the time
performance ,)f such provision or transaction shall be due, shall involve transcending the limit of validity prescribed by law, ipso facto
6
~ ..
, !oo
the obligation to be fulfilled shall be reduced to the limit of such validity; and if any clause or provision herein contained operates or
would prospectively operate to invalidate this Agreement in whole or in part, then such clause or provision only shall be held for
naught, a~; though not herein contained, and the remainder of this Agreement shall remain operative and in full force and effect.
(15) Amendments - Neither this Agreement nor any provision hereof may be changed, waived, discharged or terminated orally,
but only b:1 an instrument in writing signed by the party against whom enforcement of the change, waiver, discharge or terminate is
sought.
(16) Counterparts - This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an
original and all of which shall comprise but a single instrument.
(17) Governing Law - This Agreement is made under and shall be governed by and construed pursuant to the laws of the State of
Georgia.
(18) NOjices - All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed given
when mailed by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
If to Borrower.
If to Lender.
(19) Borrowl~r agrees to cooperate in the correction of any errors in the closing documents.
The Borrower and the Lender may, by notice given to all parties to this agreement, designate any further or different addresses to
which subsequent notices, certificates or other communications shall be sent.
7
'.
~
'. .
~"
IN WITNESS WHEREOF, Borrower and Lender have hereunto executed these presents on the date first above written.
Borrower.
BY:
As its President
ATTEST:
As its Secretary
(Corporate Seal)
Augusta-Richmond County:
BY:
ATTEST:
(Seal)
Signed, Sealed & Deliverd
In The Present at
8