STATE OF GEORGIA
PROGRAM PARTICIPATION AGREEMENT (CAP PROGRAM)
This Program Participation Agreement ("Agreement") is entered into as of
,
between the GHFA Economic Development Financing, Inc. (the "GHFA EDFI"), a nonprofit
subsidiary of the Georgia Housing and Finance Authority, and a public body corporate and
politic and instrumentality of the State of Georgia, and
, a [TYPE OF FINANCIAL
INSTITUTION] (the "Lender").
RECITALS
WHEREAS, pursuant to an Executive Order passed by the Governor of the State of
Georgia (the "State"), the State has authorized the State of Georgia Department of Community
Affairs ("DCA"), acting by and through the Georgia Housing and Finance Authority ("GHFA"),
to administer the State's Small Business Capital Access Program (the "GCAP Program") created
pursuant to the Small Business Jobs Act of 2010;
WHEREAS, GHFA EDFI has been duly created by GHFA all as provided in the powers
vested in GHFA under O.C.G.A. § 50-26-8 (27) of the Act;
WHEREAS, GHFA EDFI has determined (and the State has previously determined) that
in order to promote economic development and help create jobs for the people of the State, there
is a crucial need to assist in providing access to financing for small businesses that otherwise
might not be able to obtain such financing;
WHEREAS, GHFA EDFI finds that economic development and job creation will best be
promoted in the State through broad-based lender participation in the GCAP Program
administered by GHFA EDFI;
WHEREAS, GHFA EDFI finds that it is in the best interests of the people of the State for
the State to participate in the GCAP Program;
WHEREAS, GHFA EDFI and the Lender desire to set forth the terms and conditions of
the loan loss reserve fund that will apply to loans enrolled under the GCAP Program, all as
herein provided.
NOW, THEREFORE, in consideration of the mutual covenants herein contained, other
good and valuable consideration the receipt and sufficiency of which the parties hereby
acknowledge, and intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
In addition to the words and terms defined elsewhere in the Agreement, each of the
following words and terms as used in the Agreement shall have the following meaning unless the
context or use indicates another or different meaning or intent, and such definition shall be
equally applicable to both the singular and plural forms of the terms as the content may require:
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"Act" means O.C.G.A. § 50-26-1, et seq.
"Affiliate," when describing a relationship with the Lender, shall mean the parent
company of Lender, or any present or future company that controls, is controlled by, or is under
common control with Lender as defined under 12 U.S.C. § 1841(d).
"Borrower" means the recipient of an Eligible Loan filed or to be filed by the Lender for
enrollment under the GCAP Program pursuant to this Agreement.
"Business Purpose" includes, but is not limited to, start-up costs, working capital,
business procurement, franchise fees, equipment, inventory, as well as the purchase,
construction, renovation or tenant improvements of a place of business that is not for passive real
estate investment purposes.
"Claim" means any claim filed by the Lender pursuant to Section 5.3 of this Agreement.
"DCA" means the State of Georgia Department of Community Affairs.
"Eligible Loan" means a loan made by the Lender to a Borrower for which the
representations and warranties set forth in Section 2.2 are true and the amount does not exceed
$5,000,000.
"Enrolled Loan" means an Eligible Loan enrolled by GHFA EDFI in the GCAP Program
pursuant to the terms of Article IV of this Agreement.
"Georgia Open Records Act" means O.C.G.A. § 50-18-70, et seq.
"GCAP Program" means the capital access program created by the State pursuant to the
Small Business Jobs Act of 2010, which is being implemented by GHFA EDFI.
"GHFA" means the Georgia Housing and Finance Authority.
"GHFA Resolution" means the resolution adopted by GHFA on February 2, 2012.
"Principal" is defined (a) for a sole proprietorship, as the proprietor; (b) for a partnership,
as each managing partner and each partner who is a natural person and holds 20% or more of the
ownership interests in the partnership; and (c) for a corporation, limited liability company,
association or a development company, as each director, each of the five most highly
compensated executives, officers, or employees, and each natural person who is a direct or
indirect holder of 20 percent or more of the ownership of stock or stock equivalent of the entity.
"Program" means the Small Business Capital Access Program in which GHFA EDFI has
agreed to participate.
"Reserve Fund" means an interest-bearing administrative account insured by the Federal
Deposit Insurance Corporation, established and owned by GHFA EDFI to account for funds
accumulated pursuant to this Agreement to cover losses sustained by the Lender on Enrolled
Loans made by the Lender.
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"Small Business" means a for-profit or not-for-profit business entity that (a) derives at
least 50 percent of its total revenue from transactions in the State or that has more than 50
percent of its full-time equivalent employees in the State and (b) has 500 or fewer employees.
"State" means the State of Georgia.
"State Small Business Jobs Act of 2010" means the State Small Business Credit Initiative
Act of 2010 (Title III of the Small Business Jobs Act of 2010, Public Law 111-240, 124 Stat.
2568, 2582 (enacted Sept. 27, 2010)).
ARTICLE II
REPRESENTATIONS
Section 2.1. Representations by GHFA EDFI. With respect to any Enrolled Loan,
GHFA EDFI makes the following representations and warranties as of the time of the
enrollment:
(a)
GHFA EDFI is a public body corporate and politic and an instrumentality of the
State duly created as a nonprofit subsidiary of GHFA.
(b)
GHFA EDFI has the necessary power under the GHFA Resolution, and has duly
taken all action on its part required to authorize, execute and deliver this
Agreement. This Agreement when executed will be valid, binding and
enforceable in accordance with its terms. The execution and performance of this
Agreement by GHFA EDFI will not violate or conflict with any instrument by
which GHFA EDFI is bound.
(c)
GHFA EDFI will not impose an eligibility restriction on the enrollment of an
Eligible Loan in the Program based on the geography of the Borrower, except a
requirement that the Borrower be located within the State.
(d)
GHFA EDFI will not impose an employee size restriction of less than 500
employees with respect to a Borrower's eligibility to participate in the Program.
(e)
GHFA EDFI will not impose a restriction on the maximum term of an Enrolled
Loan that is less than 10 years for term loans and 10 years for lines of credit.
(f)
GHFA EDFI will not impose a restriction on the maximum amount of an Enrolled
Loan that is less than $500,000. However, loan amounts greater than $500,000
may be approved by DCA (acting on behalf of GHFA EDFI) on an exception
basis which will be also subject to overall United States Department of Treasury
Guidelines. In approving loans over $500,000, GHFA will consider the overall
public benefit of such loan to include factors such as:
(i)
Number of jobs created and/or retained through the loan;
(ii)
Purpose of loan;\
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(iii)
Location of borrower in low-to-moderate income or underserved areas
targeted by Treasury; and
(iv)
Overall economic benefit of loan.
(g)
GHFA EDFI will not impose a restriction that prevents partial enrollments of
Eligible Loans or lines of credit from being Enrolled Loans.
(h)
GHFA EDFI will not impose a restriction that prevents non-profit entities from
being Borrowers in the Program as and to the extent loans to such entities are not
prohibited under the Constitution of the State.
(i)
GHFA EDFI is compliant and will comply with all applicable statutes, rules and
regulations, including the provisions of the Small Business Jobs Act of 2010.
Section 2.2. Representations by the Lender. With respect to any Eligible Loan that
the Lender files for enrollment under this Agreement, the Lender makes the following
representations and warranties as of the time of each filing:
(a)
The Lender has obtained in writing from the Borrower a certification in the form
of Exhibit 1 containing the following representations and warranties and, based
on knowledge that the Lender has, the Lender has no reason to believe that such
representations and warranties are not true:
(i)
The Borrower is a Small Business.
(ii)
The Borrower is a corporation, partnership, limited liability company,
limited liability partnership, joint venture, sole proprietorship,
cooperative, or other entity, which is authorized to conduct business in the
State, and the proceeds of the loan will be used for a business purpose,
which includes, but is not limited to, start-up costs, working capital,
business procurement, franchise fees, equipment, inventory, lines of
credit, buildings or other real estate improvements for an industrial,
commercial or other business enterprise that is not for Passive Real Estate
Ownership, or any combination thereof, generally within the state as
described below; however, a business purpose shall specifically exclude
acquiring or holding passive investments such as Passive Real Estate
Ownership, the purchase of securities and Lobbying Activities. If
proceeds of the loan are for buildings or other real estate improvements, the
real estate must be located in Georgia. If proceeds of the loan are for
franchise fees, the business for which the fees are paid must be located in
Georgia. If proceeds of the loan are for equipment, the equipment must be
installed or titled in Georgia. If the proceeds of the loan are for start-up
costs, working capital, business procurement, inventory, or any other costs,
the proceeds must be used to directly benefit a business within the state of
Georgia. However, nothing in this Agreement shall prohibit a business from
using the proceeds of the loan to purchase inventory, equipment, or
otherwise making purchases and payments from/to businesses or persons
CAP Program Participation Agreement – 051812.1
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outside of the state of Georgia, provided that the purchases inure to the
benefit of a business located within the state of Georgia. Notwithstanding
anything in this Section, GHFA EDFI reserves the right to approve any loan
through which funds will be expended in a state other than Georgia, and
furthermore may request any and all documents from the borrower
necessary to verify the amount of funds and purpose of funds expended
outside of the state of Georgia.1
(iii)
The proceeds of the Eligible Loan will be used for a Business Purpose.
(iv)
The proceeds of the Eligible Loan will not be used:
1.
To repay delinquent federal or state income taxes unless the
Borrower has a payment plan in place with the relevant taxing
authority;
2.
To repay taxes held in trust or escrow (e.g., payroll or sales taxes);
3.
To reimburse funds owed to any owner, including any equity
injection or injection of capital for the Borrower's continuance;
4.
To purchase any portion of the ownership interest in the Borrower;
or
5.
For activities that relate to acquiring or holding passive
investments, such as commercial real estate ownership and the
purchase of securities; and lobbying activities, as defined in section
3(7) of the Lobbying Disclosure Act of 1995, P.L. 104-65, as
amended.
(v)
The Borrower is not an executive officer, director, or principal shareholder
of the Lender, a member of the immediate family of an executive officer,
director or principal shareholder of the Lender, or a related interest of an
executive officer, director, or principal shareholder of the Lender. For the
purpose of this provision, the terms "executive officer," "director,"
"principal shareholder," "immediate family," and "related interest" shall
refer to the same relationship to the Lender, whether or not the Lender is a
member bank, as the relationship specified for those terms in connection
with member banks in Part 215 of Title 12 of the Code of Federal
Regulations, including amendments to Part 215 which may be made from
time to time.
(vi)
The Borrower is not:
1
Note that all loans to religious non-profits and faith-based organizations must comply with Federal Constitutional
law. All proposed loans to such entities must be pre-cleared with GHFA EDFI.
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(vii)
(b)
1.
a business engaged in speculative activities that develop profits
from fluctuations in price rather than through normal course of
trade, such as wildcatting for oil and dealing in commodities
futures, unless those activities are incidental to the regular
activities of the Borrower and part of a legitimate risk management
strategy to guard against price fluctuations related to the regular
activities of the Borrower;
2.
a business that earns more than half of its annual net revenue from
lending activities; unless the business is a non-bank or non-bank
holding company Community Development Financial Institution
(CDFI);
3.
a business engaged in pyramid sales, where a participant's primary
incentive is based on the sales made by an ever-increasing number
of participants;
4.
a business engaged in activities that are prohibited by federal law
or applicable law in the jurisdiction where the business is located
or conducted, including the production, servicing, or distribution of
otherwise legal products that are to be used in connection with an
illegal activity, such as selling drug paraphernalia or operating a
motel that knowingly permits illegal prostitution; or
5.
a business engaged in gambling enterprises, unless the business
earns less than 33 percent of its annual net revenue from lottery
sales.
No Principal of the Borrower has been convicted of a sex offense against a
minor (as such terms are defined in section 111 of the Sex Offender
Registration and Notification Act (42 U.S.C. § 16911)).
The Lender has provided in writing a certification in the form of Exhibit 2
containing the following representations and warranties:
(i)
The Lender has not made the Eligible Loan in order to place, under the
protection provided by the GCAP Program, prior debt that is not covered
under the GCAP Program and that is or was owed by the Borrower to the
Lender or to an Affiliate of the Lender.
(ii)
The Lender has not made the Eligible Loan as a refinancing of a loan
(other than an existing Enrolled Loan) previously made to the Borrower
by the Lender or an Affiliate of the Lender.
(iii)
The Lender has not made the Eligible Loan to cover the unguaranteed
portion of a US Small Business Administration (SBA) loan, or, to its
knowledge, to cover the unguaranteed portion of a loan guaranteed by any
other federal, state or local government or public entity.
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(iv)
The Lender has disclosed to the Borrower information concerning the
GCAP Program as set forth in the Borrower Enrollment Form attached
hereto as Exhibit 1, has provided to the Borrower any required privacy
notices required by Lender's policies, and has processed the Eligible Loan
in accordance with Lender's "know your customer" and other similar
policies and procedures.
(v)
That no principal of the Lender has been convicted of a sex offense
against a minor (as such terms are defined in section 111 of the Sex
Offender Registration and Notification Act in 42 U.S.C. 16911). For
purposes of this representation and warranty, "principal" is defined as (a)
if a sole proprietorship, the proprietor, (b) if a partnership, each managing
partner and each partner who is a natural person and holds a twenty
percent (20.0%) or more ownership interests in the partnership, and (c) if a
corporation, limited liability company, association or other business entity,
each director, each of the five (5) most highly compensated executives or
officers of the entity, and each natural person who is a direct or indirect
holder of twenty percent (20.0%) or more of the stock or equivalent
ownership interests of such business entity. In addition, the Lender
covenants and agrees that if any principal, as defined above, changes at
any point, Lender will immediately take steps to promptly certify the new
principal. The burden to certify a new principal is upon the Lender and
failure to do so promptly will constitute an event of default under this
Agreement.
(vi)
That the Lender is and shall at all times remain in compliance with the
requirements of section 103.121 of Title 31, U.S.C., which regulation, at a
minimum, requires financial institutions, as that term is defined in section
5312 (a)(2) and (c)(1)(A) of Title 31, U.S.C., to implement reasonable
procedures to verify the identity of any person seeking to open an account,
to the extent reasonable and practicable, maintain records of the
information used to verify the person’s identity, and determine whether
the person appears on any lists of known or suspected terrorists or terrorist
organizations provided to the financial institution by any government
agency.
(vii)
The Lender will implement the plan which it has developed to ensure the
GCAP Program reaches underserved communities.
(viii) That the Lender has fully and truthfully disclosed on its application any
supervisory enforcement action which it is subject to. The Lender further
represents that it will notify GHFA EDFI, in writing, within ten days, if it
becomes subject to an enforcement action. Failure to disclose any and all
enforcement actions issued against Lender may constitute a default under
this agreement.
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ARTICLE III
ESTABLISHMENT OF THE RESERVE FUND
Upon execution of this Agreement, GHFA EDFI shall establish the Reserve Fund (as
defined below) in the name of GHFA EDFI for the purpose of receiving all required premium
charges to be paid by the Lender and the Borrower, and transfers made by GHFA EDFI, pursuant
to Section 5.1. The Reserve Fund shall be titled GHFA Economic Development Financing, Inc.
SSBCI Reserve Fund (the "Reserve Fund"). The Reserve Fund may be serviced or administered
by employees of the State, GHFA EDFI, GHFA, DCA or by an agent duly authorized by the
State to service and administer the Reserve Fund provided that the Lender has been notified of
any such agent. GHFA EDFI shall be the legal owner of the Reserve Fund and have discretion to
select the financial institution that will maintain the Reserve Fund.
ARTICLE IV
ENROLLMENT OF LOANS IN PROGRAM
Section 4.1. In General. An Eligible Loan to be filed for enrollment under this
Agreement may be made with the interest rate, fees, and other terms and conditions as the
Lender and Borrower may agree. The Eligible Loan may be in the form of a term loan or a line
of credit, and in the case of a line of credit the amount of the Eligible Loan shall be considered to
be the maximum amount that can be drawn down against the line of credit, unless Lender elects
to enroll only a portion of the line of credit in the GCAP Program, in which case the amount of
the Eligible Loan shall be considered to be the amount filed for enrollment.
Section 4.2. Enrolling a Loan. Only Eligible Loans may be enrolled in the GCAP
Program. In order to enroll an Eligible Loan under the GCAP Program, the Lender shall file the
Eligible Loan for enrollment by delivering to GHFA EDFI the following:
(a)
A copy of Exhibit 2 in completed form bearing the execution signature of an
authorized officer of the Lender.
(b)
Transmittal of the nonrefundable premium charges payable as set forth in Section
5.1 in connection with the loan by the Lender and the Borrower, or evidence
reasonably satisfactory to GHFA EDFI that such transmittal has occurred.
The Lender shall file the Eligible Loan for enrollment within ten (10) business days after
the Lender makes the Eligible Loan; provided, however, that all Eligible Loans proposed to be
made to religious and faith-based organizations must be pre-cleared with GHFA EDFI prior to
the closing and enrollment of same in the GCAP Program. For the purposes of this Agreement,
the date on which the Lender makes an Eligible Loan shall be deemed to be the date on which
the Lender first disburses proceeds of the Eligible Loan to the Borrower, or such earlier date on
which the loan documents have been executed and the Lender has obligated itself to disburse
proceeds of the Eligible Loan. For the purposes of this Agreement, the filing of an Eligible Loan
for enrollment shall be deemed to occur on the date upon which the Lender delivers to GHFA
EDFI via professional courier service, deposit in the U.S. mail first class, postage prepaid,
CAP Program Participation Agreement – 051812.1
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facsimile to GHFA EDFI, or email (or other form of electronic delivery then acceptable to
GHFA EDFI), the documentation or, in the case of delivery by fax or email, a scanned image of
the documentation required by this Section.
Section 4.3. GHFA EDFI Acknowledgement. Upon receipt by GHFA EDFI of the
documentation identified in Section 4.2, GHFA EDFI shall enroll the Eligible Loan unless the
information provided indicates that it is not an Eligible Loan, and shall mail or otherwise deliver
to the Lender, within ten (10) business days of such receipt, an acknowledgement of enrollment,
bearing the execution signature of an authorized representative of GHFA EDFI, including
documentation of the amount being transferred by GHFA EDFI into the Reserve Fund pursuant
to Section 5.1. GHFA EDFI may assign a unique loan identification number to each Enrolled
Loan.
In the event that GHFA EDFI no longer has funds to transfer to the Reserve Fund or does
not have sufficient funds for a transfer matching the Borrower and Lender premium charges,
GHFA EDFI will have no existing or continuing obligation to transfer funds to the Reserve
Fund, GHFA EDFI will inform the Lender of the funds insufficiency, and the Lender may
request that (a) GHFA EDFI accept the deposit of the Borrower and Lender premium charges in
the Reserve Fund, or (b) a refund of the Borrower and Lender premium charges from GHFA
EDFI if such charges have already been deposited in the Reserve Fund, in which case GHFA
EDFI shall promptly refund the same.
Section 4.4. Amount Covered. When filing an Eligible Loan for enrollment, the
Lender may specify an amount to be covered under the GCAP Program that is less than the total
amount of the Eligible Loan. Unless the context clearly requires otherwise, when used in this
Agreement in connection with an Eligible Loan, the words "amount" and "proceeds" shall refer
only to the portion of the Eligible Loan covered under this Agreement.
Section 4.5.
Refinancing Enrolled Loans.
(a)
In the event that an Enrolled Loan is refinanced and the total amount to be
covered under the GCAP Program does not exceed the covered amount of such
Enrolled Loan, the Enrolled Loan, as refinanced, may continue as an Enrolled
Loan and there shall be no additional premium charges payable or transferred into
the Reserve Fund.
(b)
In the event that an Enrolled Loan is refinanced in an amount which exceeds the
amount of such Enrolled Loan, and if the Lender wishes the amount of the
refinanced Enrolled Loan to exceed the amount previously enrolled, the Lender
shall file again such refinanced Enrolled Loan for enrollment pursuant to Section
4.2 with premium payments and transfers to be made into the Reserve Fund based
on the amount of the Enrolled Loan to be covered that exceeds the amount of the
existing Enrolled Loan.
(c)
If the refinancing of an Enrolled Loan under this Section results in the outstanding
balance of an Enrolled Loan being increased, the Lender at the time of the
refinancing shall be deemed to have made, with respect to such refinanced
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Enrolled Loan, the representations and warranties specified for the lender in
Section 2.2.
Section 4.6. Lines of Credit Balances. For the purposes of this Agreement,
fluctuations in the outstanding balance of an Enrolled Loan that is a line of credit, without
increasing the covered amount under the GCAP Program, shall not be deemed to be a
refinancing of such Enrolled Loan.
Section 4.7. Enrollment Period. The enrollment period for Enrolled Loans which are
(a) term loans, shall be the term of such term loans and (b) lines of credit, shall be seven years
(irrespective of the maturity date thereof). Such enrollment periods may be extended as provided
in the Notice of Material Change/Extended Enrollment in the form of Exhibit 3 attached hereto,
but in no event to a date which is ten years beyond the original enrollment date.
Section 4.8. Material Changes to Enrolled Loan/Extended Enrollment. In the
event of a change to the terms of an Enrolled Loan which has the effect of (a) extending the
maturity date, in the case of a term loan, beyond the maturity date thereof, or, in the case of a line
of credit, beyond the seven year period for which it was enrolled, or (b) changing the loan type
from a term loan to a line of credit or vice versa, Lender shall within 90 days of the effective date
of such change, deliver to GHFA EDFI a Notice of Material Change/Extended Enrollment.
Section 4.9. Termination as an Enrolled Loan. If the outstanding balance of an
Enrolled Loan that is not a line of credit is reduced to zero for a period exceeding 60 consecutive
calendar days, that Enrolled Loan shall no longer be considered an Enrolled Loan. If an Enrolled
Loan which is a line of credit has an outstanding balance of zero for a period of seven (7)
consecutive years, it shall no longer be considered an Enrolled Loan; provided, however, that the
Lender may extend such Enrolled Loan for a further enrollment period of up to three (3) years by
notifying GHFA EDFI in writing (in the form of Exhibit 3 hereto) that such Enrolled Loan will
remain enrolled for such additional period.
Section 4.10. No Pledge of Faith, Credit, or Taxing Power. The enrollment of an
Eligible Loan under the GCAP Program shall not pledge the faith, credit, or taxing power of the
State (GHFA EDFI has no taxing power) or the GCAP Program. Any assurances, guarantees, or
other credit enhancements provided under the GCAP Program do not pledge the faith, credit, or
taxing power of the State (GHFA EDFI has no taxing power) or the GCAP Program, and such
enhancements are payable only to the extent of the Reserve Fund.
ARTICLE V
USE OF THE RESERVE FUND
Section 5.1. Payments and Transfers to the Reserve Fund The Lender shall set the
premium charges payable to the Reserve Fund by the Lender and the Borrower in connection
with an Eligible Loan being filed for enrollment with GHFA EDFI pursuant to Section 4.2. The
total amount paid by the Borrower and Lender shall not be less than 2.0% of the amount of the
Enrolled Loan and shall not be greater than 7.0% of the amount of the Enrolled Loan. The
amount paid by the Lender shall be equal to the amount paid by the Borrower. The Lender may
CAP Program Participation Agreement – 051812.1
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recover from the Borrower the cost of the Lender's payment of the premium charges described in
this Section in any manner in which the Lender and Borrower agree. When enrolling an Eligible
Loan under Article IV, GHFA EDFI shall transfer into the Reserve Fund an amount determined
as follows:
(a)
An amount which is equal to the combined amounts paid into the Reserve Fund
by the Borrower and the Lender for each Enrolled Loan.
(b)
GHFA EDFI may limit the maximum loan size of an Enrolled Loan or the
maximum amount GHFA EDFI will transfer to the Reserve Fund with respect to
any one Borrower. Notwithstanding the foregoing, GHFA EDFI shall not limit
the maximum Enrolled Loan size to less than $500,000 nor limit the maximum
amount transferred by GHFA EDFI to the Reserve Fund with respect to any one
Borrower to less than $35,000.
Section 5.2. Ownership, Control and Investments of Reserve Fund. All funds
credited to the Reserve Fund shall be the exclusive property of, and solely controlled by, GHFA
EDFI. GHFA EDFI may not withdraw funds from the Reserve Fund except as provided for in
this Agreement.
Interest or income earned on the funds credited to the Reserve Fund shall be deemed to
be part of the Reserve Fund. GHFA EDFI is authorized to withdraw at any time from the
Reserve Fund up to fifty percent (50%) of the total interest or income that has been credited to
the Reserve Fund since the date of the first Enrolled Loan. Withdrawals authorized under this
section need not be returned to the Reserve Fund.
GHFA EDFI shall, upon reasonable request of the Lender, periodically provide to the
Lender transaction reports indicating the balance in the Reserve Fund, payments and transfers
into the Reserve Fund, withdrawals from the Reserve Fund, and interest or income earned on
funds credited to the Reserve Fund. In addition, the foregoing transaction reports shall be
available to the Lender for inspection at the offices of GHFA EDFI during normal business
hours.
Section 5.3. Claims by Lender to Reserve Fund. If the Lender charges off all or part
of an Enrolled Loan, the Lender may file a Claim with GHFA EDFI by submitting a completed
claim form in the form attached as Exhibit 4 bearing the execution signature of an authorized
officer of the Lender.
Any Claim that is filed under this Agreement shall be filed within 120 days of the action
of the Lender to charge off all or part of the Enrolled Loan. The Lender shall determine when
and how much to charge off of an Enrolled Loan in a manner consistent with its normal method
for making such determinations on business loans which are not Enrolled Loans.
The Lender's Claim may include the amount of principal charged off, plus up to ninety
(90) days' accrued interest, and an amount which represents Lender's customary and reasonable
out-of-pocket expenses incurred in pursuing its collection efforts, including preservation of any
collateral. However, in the event that only a portion of the amount of the Enrolled Loan is
enrolled in the GCAP Program, reimbursement of interest and out-of-pocket expenses will be
CAP Program Participation Agreement – 051812.1
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limited to the ratio of the enrolled portion of the Enrolled Loan to the total amount of the
Enrolled Loan. The Lender shall retain documentation in its files evidencing all expenses for
which a Claim is filed. The amount of principal, accrued interest and out-of-pocket expenses
included in the Claim shall not exceed the principal amount covered under the GCAP Program
upon enrollment.
Section 5.4.
Disbursement of Reserve Fund.
(a)
Notwithstanding the violation of any other provision of this Agreement by the
Lender, upon receipt by GHFA EDFI of a Claim filed by the Lender in
accordance with Section 5.3, GHFA EDFI shall promptly pay, from funds in the
Reserve Fund, the Claim as submitted, except that GHFA EDFI may reject a
Claim when the representations and warranties provided by the Lender in Section
2.2 were known by the Lender to be false when the Eligible Loan became an
Enrolled Loan.
(b)
If there are insufficient funds in the Reserve Fund to cover the entire amount of
the Lender's Claim, GHFA EDFI shall pay to the Lender an amount equal to the
current balance in the Reserve Fund, net of interest to which GHFA EDFI is
entitled to under this Agreement. That payment shall be deemed to satisfy the
Claim made with GHFA EDFI and the Lender shall have no other or further right
to receive any amount from the Reserve Fund with respect to that Claim, provided
that during the two (2) years following the date of such payment, Lender shall be
entitled to claim and receive funds subsequently deposited into the Reserve Fund
(the "Follow-up Claim") on account of such claim so long as the amount of the
Follow-up Claim does not exceed seventy-five (75%) percent of the amount then
on deposit in the Reserve Fund. The Follow-up Claim shall be in the form of
Exhibit 5 attached hereto. Notwithstanding anything to the contrary herein,
nothing in this provision shall limit or constitute a waiver or subrogation of any
rights Lender may have against a Borrower, any other obligor or any collateral
pursuant to the terms of the loan documents between the Borrower and the Lender
relating to the portion of the Claim not paid from the Reserve Fund as a result of
the Reserve Fund having insufficient funds available to fully satisfy the Claim.
Section 5.5.
(a)
Recovery by Lender Subsequent to Claim.
If after payment of a Claim by GHFA EDFI, the Lender recovers from a
Borrower any amount for which payment of the Claim was made, the Lender shall
promptly pay to GHFA EDFI for deposit in the Reserve Fund an amount
recovered equal to the payment received from GHFA EDFI for the Claim, less the
Lender's customary and reasonable out-of-pocket expenses. The Lender shall
retain documentation in its files evidencing those expenses. Notwithstanding
anything to the contrary herein, Lender shall be required to make the foregoing
payment solely to the extent that the amount recovered by Lender from the
Borrower for an Enrolled Loan for which Lender made a Claim, when added to
the payments received by Lender under such Claim, exceeds Lender's loss on
such Enrolled Loan.
CAP Program Participation Agreement – 051812.1
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(b)
For the purposes of this Section and Section 5.4, the Lender's loss on an Enrolled
Loan may include loss of principal up to the enrolled amount and up to ninety
(90) days accrued but unpaid interest on the enrolled principal balance, plus an
amount which represents Lender's documented customary and reasonable out-ofpocket expenses incurred in pursuing its collection efforts with respect to the
enrolled portion of any loan, including preservation of any collateral.
(c)
The Lender's recovery of any amount written-off in connection with any loan that
is not an Enrolled Loan made to a borrower, whether or not such borrower is
participating in the GCAP Program, shall not be paid to GHFA EDFI for deposit
in the Reserve Fund.
Section 5.6.
Subrogation.
(a)
If the payment of a Claim pursuant to Section 5.4 has fully covered the Lender's
loss on an Enrolled Loan, or if the payment of a Claim pursuant to Section 5.4
when combined with any recovery from the Borrower, has fully covered the
Lender's loss, GHFA EDFI, upon its request, shall be subrogated to the rights of
the Lender with respect to any collateral, security or other right of recovery, in
connection with the Enrolled Loan, which has not been realized upon by the
Lender.
(b)
The Lender shall, upon receipt of such request from GHFA EDFI pursuant to
Section 5.6(a) assign to GHFA EDFI any right, title or interest to any collateral,
security, or other right of recovery in connection with the Enrolled Loan. If such
assignment has been made, GHFA EDFI shall not be required to undertake any
obligations of the Lender pursuant to Lender's loan documents, except for any
obligations directly related to the exercise by GHFA EDFI of its assigned rights
of recovery in connection with the Enrolled Loan. The Lender shall provide
GHFA EDFI with all reasonable 'assistance thereafter as GHFA EDFI may
request in proceeding with respect to any such collateral, security or other right of
recovery, except that such reasonable assistance shall not require the Lender to
incur any out-of-pocket expenses. Any funds received by GHFA EDFI as a result
of enforcement actions taken with respect to any such collateral, security or other
right of recovery shall be deposited by GHFA EDFI in the Reserve Fund up to the
amount of the original Claim, less any out-of-pocket expenses incurred by GHFA
EDFI in taking the enforcement actions.
(c)
If GHFA EDFI determines that it desires to exercise its right of subrogation in
connection with an Enrolled Loan, and would be entitled to exercise such right
except for the fact that the Lender's loss has not been fully covered, GHFA EDFI,
at its option, may pay, from funds in the Reserve Fund, an amount sufficient to
cover the Lender's loss, notwithstanding the fact that such payment may cover a
principal amount not covered under the GCAP Program or not included in the
Lender's Claim. Upon making such payment pursuant to this subsection, GHFA
EDFI shall be subrogated to the rights of the Lender in accordance with this
Section.
CAP Program Participation Agreement – 051812.1
13
Section 5.7. Non-Enrolled Loans to Borrowers. In the event that a Lender has
outstanding (a) an Enrolled Loan with a Borrower, and (b) other credit, including the unenrolled
portion of an Enrolled loan, not covered by the GCAP Program with the same Borrower, the
Enrolled Loan shall be deemed to be subordinate to the other credit not covered by the GCAP
Program.
ARTICLE VI
REPORTING
Section 6.1. Annual Summary Reports. On or before the 30th day of the month
following the end of each calendar year, the Lender shall submit to GHFA EDFI a report of all
Enrolled Loans and the outstanding balances of such Enrolled Loans, including any amount from
private sources, the current balance of the Reserve Fund, charge-offs and recoveries on Enrolled
Loans in the immediately preceding calendar year. In addition, the Lender agrees to provide
such supplemental information and/or to provide the reports contemplated in this Section 6.1
above and Section 6.4 below at such alternative times, as may be required in order for GHFA
EDFI to remain in compliance with supplemental or modified Treasury reporting requirements
relating to the GCAP Program. The Lender may combine the report or reports required in this
Section with other reports required in this Article.
Section 6.2.
[Reserved.]
Section 6.3. Late Reporting. If a report required under Article VI is not filed within
thirty (30) calendar days beyond the required due date therefor, GHFA EDFI may conduct an
inspection of the Lender's files pursuant to Section 10.3, with the reasonable costs thereof to be
borne by the Lender.
Section 6.4. Forms. Reports required under this Article shall be substantially in the
form(s) of Exhibit 6 attached hereto.
ARTICLE VII
WITHDRAWAL OF EXCESS RESERVE FUNDS
Section 7.1. If reports filed pursuant to Article VI indicate that for the immediately
preceding twenty-four (24) month period the balance in the Reserve Fund continually exceeded
the aggregate outstanding balance of all Enrolled Loans, GHFA EDFI may withdraw from the
Reserve Fund an amount not greater than the amount by which the Reserve Fund balance
exceeded the aggregate outstanding balance of all Enrolled Loans as of the most recent report,
unless the Lender has provided to GHFA EDFI adequate documentation that at some time during
such twenty-four (24) month period the aggregate outstanding balance of all Enrolled Loans
exceeded the balance then in the Reserve Fund.
CAP Program Participation Agreement – 051812.1
14
ARTICLE VIII
TERMINATION
Section 8.1. GHFA EDFI may, in its sole discretion, terminate its obligations under
this Agreement to enroll Eligible Loans under the GCAP Program. The termination shall be
applicable on the effective date specified in the notice of termination, except that the termination
shall not apply to any Eligible Loan which is made on or before the date on which the notice of
termination is received by the Lender. Any terminations under this Section shall be prospective
only, and shall not apply to any Enrolled Loans existing prior to the date of any such termination
by GHFA EDFI, except that if a previously Enrolled Loan is refinanced, the amount covered
under the GCAP Program shall not be increased beyond the covered amount of the previously
Enrolled Loan.
Section 8.2. If GHFA EDFI has terminated its obligations under this Agreement in
accordance with Section 8.1, GHFA EDFI may withdraw the balance of the Reserve Fund once
there are no Enrolled Loans under the GCAP Program.
Section 8.3. Notwithstanding GHFA EDFI's termination of its obligation to enroll
Eligible Loans under the GCAP Program, the Lender's obligation to submit reports pursuant to
Article VI shall continue as long as the Lender is pursuing recovery efforts with respect to
Enrolled Loans.
ARTICLE IX
PLEDGE OF THE RESERVE FUND
GHFA EDFI pledges the funds in the Reserve Fund to be available to pay Claims
pursuant to Section 5.3. GHFA EDFI further pledges that the Lender shall have a first security
interest in the funds in the Reserve Fund to pay Claims pursuant to Section 5.3 and GHFA EDFI
will not encumber or pledge the funds to any other party. This pledge does not, however,
diminish the ownership or control of the Reserve Fund granted to GHFA EDFI in Section 5.2,
and it shall not affect GHFA EDFI's right to withdraw funds from the Reserve Fund pursuant to
Section 5.2, Article VII or Article VIII.
ARTICLE X
MISCELLANEOUS
Section 10.1. Amendments to Agreement. This Agreement may only be amended
upon the written consent of both GHFA EDFI and the Lender; provided, however, that GHFA
EDFI reserves the absolute right, with at least thirty (30) days prior written notice to the Lender,
to amend in writing any provision of this Agreement as and to the extent needed to comply (as
reasonably determined by GHFA EDFI) with any and all requirements of Treasury relating to the
Allocated Funds. However, in the absence of the consent of the Lender, no such amendment
shall be applicable to Enrolled Loans made prior to the effective date of the amendment.
CAP Program Participation Agreement – 051812.1
15
Section 10.2. Information. The Lender shall provide GHFA EDFI with the information
regarding its participation in the GCAP Program as GHFA EDFI may reasonably require.
Section 10.3. Inspection of Files. Upon notice to the Lender, GHFA EDFI may inspect
the files of the Lender relating to any loans enrolled under the GCAP Program, during normal
business hours of the Lender. GHFA EDFI will not copy or extract any information from such
files unless the information is eligible for protection from disclosure pursuant to applicable
federal or state statutes, in which case GHFA EDFI agrees to invoke the confidentiality
provisions of the statute or if such information cannot be protected, the consent of the Borrower
has been obtained. Notwithstanding the foregoing, this Section is not intended to limit or
preclude the ability of GHFA EDFI to exercise its right of subrogation, to withdraw funds from
the Reserve Fund pursuant to Section 7.2, or to defend itself in any legal action commenced
against GHFA EDFI by the Lender or any Borrower.
Section 10.4. U.S. Treasury Inspector General. The Lender agrees to make available
to the Inspector General for the United States Department of the Treasury all books and records
related to Enrolled Loans, subject to the Right to Financial Privacy Act (12 U.S.C. § 3401 et
seq.), including, without limitation, detailed loan records.
Section 10.5. External Audit. GHFA EDFI may select an outside auditor to audit not
more often than annually the Lender's files for loans and other documents under the GCAP
Program. GHFA EDFI shall be responsible for the expenses and costs of the outside auditor
under this Section; provided, however, that GHFA EDFI reserves the right to recover any costs
and expenses incurred in connection with an audit if an actionable event of fraud, violation of
law or willful misconduct are discovered. GHFA EDFI shall use its best efforts to coordinate its
audit of the Lender's files with other states' capital access programs in which the Lender
participates, and, upon GHFA EDFI's request therefore, the Lender shall provide a listing of the
other state capital access programs in which the Lender participates.
Section 10.6. Compliance with Applicable Law. The Lender shall comply with all
applicable state and federal laws, rules and regulations.
Section 10.7. Limitation of Rights. This Agreement shall be for the exclusive benefit
of the Lender and GHFA EDFI, and shall not be construed to give any other person any legal or
equitable right, remedy or claim with respect to the Agreement.
Section 10.8. Severability. If any clause, provision or section of this Agreement is held
illegal or invalid by any court, the invalidity shall not affect any of the remaining clauses,
provisions or sections of this Agreement and this Agreement shall be construed and enforced as
if the illegal or invalid clause, provision or section had not been in the Agreement.
Section 10.9. Notices. All notices, certificates, requests or other communications shall
be deemed given when delivered by messenger, by professional courier service or by registered
or certified mail postage prepaid, return receipt requested, facsimile (with confirmation or receipt
and delivery retained by the sender), email or other form of electronic delivery then acceptable
by GHFA EDFI, addressed as follows:
CAP Program Participation Agreement – 051812.1
16
If to GHFA EDFI:
GHFA Economic Development Financing, Inc.
c/o Georgia Department of Community Affairs
Attention: SSBCI Program Manager
60 Executive Park South, NE
Atlanta, Georgia 30329
Facsimile No. (404) 679-0563
If to the Lender:
Section 10.10. Binding Effect. This Agreement shall inure to the benefit of and shall be
binding upon the parties and their respective successors and assigns.
Section 10.11. Reports of Regulatory Agencies. The Lender consents to the transmittal
to GHFA EDFI, by any financial institutions regulatory agency of the federal or state
governments, any information directly relating to the Lender's participation in the GCAP
Program. To the extent permitted by law, including, without limitation, Georgia's Open Records
Act, GHFA EDFI shall hold any information acquired pursuant to this Section confidential
Section 10.12. No Personal Liability. No member, officer or employee of GHFA EDFI,
including any person executing this Agreement, shall be liable personally under this Agreement
or subject to any personal liability for any reason relating to the execution of this Agreement or
the GCAP Program.
Section 10.13. Collateral. Except upon the exercise of GHFA EDFI's right of
subrogation as set forth in Section 5.6, GHFA EDFI shall have no legal or equitable interest in
any collateral, security, or other right of recovery in connection with any loan enrolled in the
GCAP Program and, thus, GHFA EDFI's consent is not necessary for any amendment to the
Lender's loan documents. Moreover, no provision in this Agreement shall be construed to
prohibit or restrict the Lender's authority, in its sole discretion, to modify the terms or conditions
of an Enrolled Loan in a manner that does not conflict with this Agreement. This Section shall
not, however, permit Lender to modify its obligation to make payments to the Reserve Fund
pursuant to Section 5.5.
Section 10.14. Due Diligence. Within the context of the objectives of the GCAP
Program, the Lender agrees to exercise the same degree of care and diligence in the making and
collection of the Enrolled Loans as it does in the making and collection of other business loans in
the ordinary course of Lender's business.
Section 10.15. Captions. The captions in this Agreement are of convenience only and in
no way limit the scope of intent of any provision of this Agreement.
Section 10.16. Interpretation. This Agreement shall be governed by and interpreted in
accordance with the laws of the State.
CAP Program Participation Agreement – 051812.1
17
Section 10.17. Entire Agreement. This Agreement and its exhibits and any documents
referred to herein constitute the complete understanding of the parties and merge and supersede
any and all other discussions, agreements and understandings, either oral or written, between the
parties with respect to the subject matter hereof.
[Signatures on following page]
CAP Program Participation Agreement – 051812.1
18
WITNESS the due execution hereof as a document under seal, as of the date first written
above.
GHFA ECONOMIC DEVELOPMENT
FINANCING, INC.
By:
Print Name:
Title:
[INSERT LENDER'S LEGAL NAME]
By:
Print Name:
Title:
CAP Program Participation Agreement – 051812.1
19
STATE OF GEORGIA
GEORGIA CAPITAL ACCESS PROGRAM
EXHIBIT 1 – BORROWER CERTIFICATION AND ENROLLMENT FORM
BORROWER CERTIFICATION
Please complete this form for all loans enrolled in an SSBCI program.
These assurances reference Section 3005(e)(7) and Section 3011(c)(2) of the Small Business
Jobs Act of 2010.
Legal name of borrower:
The borrower hereby certifies the following to the lender:
1. The Borrower is a corporation, partnership, limited liability company, limited liability
partnership, joint venture, sole proprietorship, cooperative, or other entity, which is
authorized to conduct business in the State, and the proceeds of the loan will be used for a
business purpose, which includes, but is not limited to, start-up costs, working capital,
business procurement, franchise fees, equipment, inventory, lines of credit, buildings or
other real estate improvements for an industrial, commercial or other business enterprise that
is not for Passive Real Estate Ownership, or any combination thereof, generally within the
state as described below; however, a business purpose shall specifically exclude acquiring or
holding passive investments such as Passive Real Estate Ownership, the purchase of
securities and Lobbying Activities as defined in Section 3(7) of the Lobbying Disclosure Act
of 1995, P.L. 104-65, as amended. If proceeds of the loan are for buildings or other real estate
improvements, that the real estate is located in Georgia. If proceeds of the loan are for
franchise fees, that the business for which the fees are paid is located in Georgia. If proceeds
of the loan are for equipment, that the equipment is installed or titled in Georgia. If the
proceeds of the loan are for start-up costs, working capital, business procurement, inventory, or
any other costs, that the proceeds are used to directly benefit a business within the state of
Georgia.
2. The loan or investment proceeds will not be used to:
a. repay a delinquent federal or state income taxes unless the Borrower has a payment
plan in place with the relevant taxing authority; or
b. repay taxes held in trust or escrow (e.g., payroll or sales taxes); or
c. reimburse funds owed to any owner, including any equity injection or injection of
capital for the Borrower's continuance; or
d. to purchase any portion of the ownership interest in the Borrower.
CAP Program Participation Agreement – 051812.1
20
3. The borrower or investee is not:
a. an executive officer, director, or principal shareholder of the Lender; or
b. a member of the immediate family of an executive officer, director or principal
shareholder of the lenders; or
c. a related interest of an such executive officer, director, principal shareholder, or
member of the immediate family.
For the purpose of these three restrictions, the terms "executive officer," "director,"
"principal shareholder," "immediate family," and "related interest" refer to the same
relationship to a Lender as the relationship described in Part 215 of Title 12 of the Code
of Federal Regulations, or any successor to such part.
4. The borrower is not:
a. a business engaged in speculative activities that develop profit from fluctuations in
price rather than through normal course of trade, such as wildcatting for oil and
dealing in commodities futures, unless those activities are incidental to the regular
activities of the business and part of a legitimate risk management strategy to guard
against price fluctuations related to the regular activities of the business; or
b. a business that earns more than half of its annual net revenue from lending
activities; unless the business is a non-bank or non-bank holding company
Community Development Financial Institution (CDFI); or
c. a business engaged in pyramid sales, where a participant's primary incentive is
based on the sales made by an ever-increasing number of participants; or
d. a business engaged in activities that are prohibited by federal law or applicable law
in the jurisdiction where the business is located or conducted. (Included in these
activities is the production, servicing, or distribution of otherwise legal products
that are to be used in connection with an illegal activity, such as selling drug
paraphernalia or operating a motel that knowingly permits illegal prostitution); or
e. a business engaged in gambling enterprises, unless the business earns less than 33%
of its annual net revenue from lottery sales.
(Continued on the Next Page)
CAP Program Participation Agreement – 051812.1
21
As required by Section 3011(c)(2) of the Small Business Jobs Act of 2010, the Borrower hereby
certifies to the GHFA EDFI that the Principals of the Borrower have not been convicted of a sex
offense against a minor (as such terms are defined in section 111 of the Sex Offender
Registration and Notification Act (42 U.S.C. 16911)). For the purposes of this Certification,
Principal means the following: if a sole proprietorship, the proprietor; if a partnership, each
partner2; if a corporation, limited liability company, association or a development company, each
director, each of the five most highly compensated executives, officers, or employees of the
entity, and each direct or indirect holder of twenty percent (20%) or more of the ownership stock
or stock equivalent of the entity.
Legal Name:
By:______________________________________
Authorized Signatory
Name:
Title:
Date:
2
Including Limited Partners
CAP Program Participation Agreement – 051812.1
22
BORROWER ENROLLMENT FORM
Name of Borrower:
Borrower's Trade Name (D/B/A), if applicable:
*
*If Doing Business under another name, please include the County where your Trade Name was
registered pursuant to O.C.G.A. 10-1-490:
Address of Borrower:
Will loan proceeds be used at the above address?
Yes
No
If no, what is the address where the loan proceeds will be used?
Borrower’s Current number of Employees:
Borrower’s Number of employees from affiliates (if applicable):
Borrower’s Estimate of jobs retained by reason of this loan:
(Jobs which would be lost if not for this loan)
Borrower’s Estimate of jobs created by reason of this loan:
Borrower’s Annual Net Revenues based on the most recent fiscal year:
Year the current owners began operating the business (e.g. 2001):
Borrower, hereby grants permission to the Lender to share confidential information with the
GHFA EDFI or its appointed agents limited to: (a) the name and address of the Borrower,
(b) primary activity of the Borrower, (c) recent annual revenues, (d) amount of the Eligible
Loan to the Borrower enrolled in the GCAP Program, (e) interest rate applicable to the
Enrolled Loan, (f) number of employees of the Borrower and (g) estimated number of jobs
to be added and retained by the Borrower by reason of the GCAP loan.
(Continued on the Next Page)
CAP Program Participation Agreement – 051812.1
23
Voluntary Disclosure of Gender, Ethnicity, and Veteran Status
This section of the enrollment form may be voluntarily completed by the Borrower in order to
assist GHFA EDFI with tracking the effectiveness of the GCAP Program in reaching certain
groups. It is not mandatory and the failure to complete this section will not affect the eligibility
of the loan for enrollment in the GCAP Program.
Is this business female-owned (51% or more ownership)? (Check one):
Yes
No
Decline to answer
Is this business minority-owned (51% or more ownership)? (Check one):
Yes
No
Declined to answer
Ethnicity (Check as many that apply):
White
Other:
Asian-American
African-American
Declined to answer
American Indian
Hispanic
Is this business veteran-owned (51% or more ownership)? (Check one):
Yes
No
Declined to answer.
The borrower hereby certifies that all the above information is true and accurate to the best of his
or her knowledge, and further covenants that it shall deliver prompt notice to Lender and the
State of any inaccuracies that it discovers.
Borrower's Name:
Authorized Signature: ___________________________________
Printed Name:
Title:
Date:
CAP Program Participation Agreement – 051812.1
24
Privacy Notice
Georgia Open Records Act Notice:
Under the Georgia Open Records Act, all public records of entities deemed agencies under
Georgia law, including GHFA EDFI, are required to be open for a personal inspection by any
citizen of Georgia at a reasonable time and place, except those which by order of a court of the
Georgia or by law are prohibited or specifically exempted from being open to inspection by the
general public. The persons in charge of such records shall not refuse this privilege to any
citizen. Under the Georgia Open Records Act, public disclosure shall not be required for records
that are, among other exemptions:
(a)
Specifically required by the federal government to be kept confidential; or
(b)
An individual's social security number, mother's birth name, credit card information,
debit card information, bank account information, financial data or information, and insurance or
medical information in all records, and if technically feasible at reasonable cost, day and month
of birth, which shall be redacted prior to disclosure of any record requested pursuant to the
Georgia Open Records Act; provided, however, that such information shall not be redacted from
such records if the person or entity requesting such records requests such information in a
writing signed under oath by such person or a person legally authorized to represent such entity
which states that such person or entity is gathering information as a representative of a news
media organization for use in connection with news gathering and reporting; and provided,
further, that such access shall be limited to social security numbers and day and month of birth.
CAP Program Participation Agreement – 051812.1
25
STATE OF GEORGIA
GEORGIA CAPITAL ACCESS PROGRAM
EXHIBIT 2 — LOAN FILING FORM AND LENDER CERTIFICATION
LOAN FILING FORM
Lender Information
Lender Name:
Lender EIN:
Lender Loan #:
Borrower Information
Name of Borrower:
Address of Borrower:
Zip Code:
County:
Census Tract:
NAICS Code (6 Digit):
Primary Business Activity of Borrower:
Loan Information
GCAP Loan Number (if applicable):
Total Loan Amount:
Enrolled/Covered Loan Amount:
Loan Term: from
to
Interest rate at time of Enrollment:
Loan Type (Please check one):
(i.e. 6.0%)
Term
Line of Credit
Does Borrower Currently Have any Other Loans with Lender:
CAP Program Participation Agreement – 051812.1
Yes
No
26
Date of Initial Disbursement (or Booking Date for Line of Credit):
Please Indicate Loan Purpose:
Borrower-Lender Fees
Borrower Fees: Percent (%):
Lender Fees: Percent (%):
$ Amount:
$ Amount:
Date Borrower/Lender Fees Deposited to GCAP Reserve Account (dd/mm/yy):
The lender hereby certifies that all the above information is true and accurate to the best of his or
her knowledge, and further covenants that it shall deliver prompt notice to GHFA EDFI of any
inaccuracies that it discovers.
Lender's Name:
Authorized Signature:
____________________________________
Printed Name & Title:
Date:
STATE USE ONLY
APPROVED
NOT APPROVED*
Has Fee Been Deposited?:
Date of Deposit:
GCAP Matching Payment:
Yes
No
Signed:
_____
Printed Name & Title:
Date:
GCAP Loan Number:
*Please indicate reason for denial:
CAP Program Participation Agreement – 051812.1
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LENDER CERTIFICATION
Please complete this form for every loan enrolled in an SSBCI program.
This Assurance is referenced by Section 3005(e)(7) of the Small Business Jobs Act of 2010.
Legal name of lender:
The Lender hereby certifies to the Participating State the following:
1. The loan or investment has not been made in order to place under the protection of the
approved state program prior debt that is not covered under the approved state program
and that is or was owed by the borrower to the lender or to an affiliate of the lender.
2. The loan or investment is not a refinancing of a loan or investment previously made to
that borrower by the lender or an affiliate of the lender.
3. The lender is not attempting to enroll the unguaranteed portions of the SBA-guaranteed
loans.
Legal Name:
By:______________________________________
Authorized Signatory
Name:
Title:
Date:
CAP Program Participation Agreement – 051812.1
28
STATE OF GEORGIA
SMALL BUSINESS CAPITAL ACCESS PROGRAM
EXHIBIT 3 - NOTICE OF MATERIAL CHANGE /EXTENDED ENROLLMENT
1. GCAP Loan # (if applicable):
2. Lender Name:
3. Lender EIN:
4. Lender Loan #:
5. Name of Borrower / Loan:
6. Effective Date of Change:
Loan has been changed to:
The Maturity date of
Term Loan
Line of Credit
has been extended to
Extensions
For extensions of maturity date and/or for lines of credit which have had a zero outstanding
balance for 7 years, complete items 7-10 in order to extend enrollment period:
7. Date of Initial Disbursement (or booking date for line of credit):
8. Original Maturity Date of Line / Term Loan:
9. Scheduled Expiration Date of Original Enrollment Period:
10. New Expiration Date of Extended Enrollment Period:
Lender's Legal Name:
Authorized Signatory:
Name & Title:
Email:
Phone:
Date:
CAP Program Participation Agreement – 051812.1
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STATE OF GEORGIA
SMALL BUSINESS CAPITAL ACCESS PROGRAM
EXHIBIT 4 - CLAIM FORM
1. Name of Lender:
2. Lender EIN:
3. Lender Loan #:
4. GCAP Loan # (if applicable):
5. Name of Borrower:
6. Original Amount of Enrolled Loan:
7. Outstanding Balance of Enrolled Loan (Immediately prior to charge-off):
8. Claim Details:
(b)
Principal:
(c)
Accrued Interest (up to 90 days):
(d)
Customary & Reasonable Out-of-pocket Expenses:
(e)
Total Amount of Claim (Not to Exceed Original Amount Enrolled):
The completed Claim Form, along with proof that the above Enrolled Loan has been charged off,
should be submitted to:
SSBCI Program Manager
60 Executive Park South, NE
Atlanta, Georgia 30329
OR
CAP Program Participation Agreement – 051812.1
Fax To:
(404) 679-0563
Attn: SSBCI Program Manager
30
The Lender hereby certifies that all of the above statements are true and accurate to the
best of its knowledge and furthermore represents that it has substantially complied with sections
5.3-5.6 and 10.14 of the Program Participation Agreement in making this claim.
Authorized Signature:
Name and Title (Printed):
Email:
(i.e. John Smith, President)
Phone:
Date:
FOR STATE USE ONLY
Claim Amount:
Authorized Claim Amount:
Signed: __________________________________
Name & Title:
Date:
CAP Program Participation Agreement – 051812.1
31
STATE OF GEORGIA
SMALL BUSINESS CAPITAL ACCESS PROGRAM
EXHIBIT 5 — FOLLOW-UP CLAIM FORM
The Special Claim Form is used when the Reserve Fund has insufficient funds to pay a claim.
1. Name of Lender:
2. Lender EIN:
3. Lender Loan #:
4. GCAP Loan #:
5. Name of Borrower/Loan:
6. Amount of Original Claim:
7. Date of Original Claim:
8. Amount Paid on Original Claim:
9. Follow-up Claim Amount (Subtract 8. from 6.):
The completed Claim Form should be submitted to:
SSBCI Program Manager
60 Executive Park South, NE
Atlanta, Georgia 30329
OR
Fax To:
(404) 679-0563
Attn: SSBCI Program Manager
The Lender hereby certifies that all of the above statements are true and accurate to the
best of its knowledge and furthermore represents that it has substantially complied with sections
5.3-5.6 and 10.14 of the Program Participation Agreement in making this claim.
Authorized Signature:
Name and Title (Printed):
Email:
(i.e. John Smith, President)
Phone:
CAP Program Participation Agreement – 051812.1
Date:
32
STATE OF GEORGIA
SMALL BUSINESS CAPITAL ACCESS PROGRAM
EXHIBIT 6 — LOAN RENEWAL FORM
Lender Information
Borrower Information
Lender Name:
Name of Borrower:
Lender EIN:
Address of Borrower (including Zip Code):
Lender Loan #:
Loan Information
Original Loan Amount:
New Loan Term: from
Loan Type:
Term
Increased Loan Amount to be Covered:
to
Previous Loan Amount Covered:
Line of Credit
Current Outstanding Balance:
New Total Covered Loan Amount:
The Lender hereby certifies that all the above information is true and accurate to the best of his
or her knowledge.
Lender's Name:
Authorized Signature:
____________________________________
Printed Name & Title:
Date:
STATE USE ONLY
APPROVED
Amount Authorized/Guaranteed:
CAP Fee Amount:
Has Fee Been Deposited?
Yes
Date of Deposit:
NOT APPROVED*
*Please indicate reason for denial:
No
Signed:
Printed Name & Title:
Date:
CAP Program Participation Agreement – 051812.1
33
STATE OF GEORGIA
SMALL BUSINESS CAPITAL ACCESS PROGRAM
EXHIBIT 7 – ANNUAL REPORTING REQUIREMENTS AND FORM
GHFA EDFI is required by the U.S. Treasury Department to report annually on the status
of all SSBCI programs authorized under the Small Business Jobs Act of 2010. In order to do so,
GHFA EDFI requires that the Lender and Borrower agree to provide the following information
in connection with any and all loans enrolled in an approved Georgia SSBCI program, including
but not limited to the Georgia Capital Access Program (GCAP), the Georgia Small Business
Credit Guarantee Program (SBCG), and the Georgia Funding for Community Development
Financial Institutions Program (CDFI), both the Direct Lending CDFI program and the
Originator & Servicer CDFI program.
I.
REPORTING REQUIREMENTS
The following information is required to be provided cumulatively by the borrower and
lender, for each enrolled loan, on an annual basis:
Required Lender Information
1.
2.
Lender’s Name
Lender’s (EIN)
Required Borrower Information
3.
4.
5.
6.
7.
8.
9.
10.
Borrower’s Census Tract
Borrower’s Zip Code (principal location in Georgia)
Borrower’s Annual Revenues in the last fiscal year
Borrower’s Full Time Equivalent (FTE) employees
Borrower’s NAICS Code (6 digit)
Borrower’s Year of Incorporation
Borrower’s estimated number of jobs created as a result of the loan
Borrower’s Estimated Number of Jobs Retained as a result of the loan
Required Loan Information
11.
12.
13.
14.
15.
Individual Loan ID # (unique to Lender)
Total Principal Loaned/Guaranteed
Portion of Total Principal from Non-private Sources
Date of Initial Disbursement
For CAP loans, the insurance premiums paid by:
i. the borrower;
ii. the lender; and
iii. the Participating State;
CAP Program Participation Agreement – 051812.1
34
16.
17.
18.
19.
For [CDFI?] loans in which GHFA EDFI is participating, the amount of the
participation
For [SBCG?] loans guaranteed by GHFA EDFI:
i. the amount of loan guarantee provided by the SBBCI recipient; and
ii. the amount of funds set aside by GHFA EDFI to cover the loan
guarantee
For loans for which GHFA EDFI provides collateral support:
i. the amount of collateral support provided; and
ii. the amount of funds set aside by GHFA EDFI to cover the collateral
support obligation
Additional Private Financing Occurring After the loan closing3
The following information is required to be provided cumulatively by the borrower and
lender, for each SBCG enrolled loan, on a quarterly basis:
Required Lender Information
1.
Lender’s Name
2.
Lender’s (EIN)
Required Borrower Information
3.
Borrower’s Name
4.
Borrower’s Zip Code
Required Loan Information
5.
Individual Loan ID #
6.
Total Principal Guaranteed
7.
Amount of Principal Payments to Date
8.
Remaining Balance to Date
9.
Total Interest Payments to Date
3
Required for every previously closed SSBCI loan if the total cumulative private financing generated by all approved SSBCI
programs fails to reach a 10:1 leveraging ratio.
CAP Program Participation Agreement – 051812.1
35
II.
DUE DATES
Annual Reports must be submitted for the entire term of the loan. Below are the due dates
for each Annual Report:
Report for period ending on:
Due Date:
December 31, 2012
January 31, 2013
December 31, 2013
January 31, 2014
December 31, 2014
January 31, 2015
December 31, 2015
January 31, 2016
December 31, 2016
January 31, 2017
Quarterly Reports must be submitted for each SBCG loan. Below are the due dates for
each Quarterly Report:
Report for period covering:
January 1, 2012 through March 31, 2012
April 1, 2012 through June 30, 2012
July 1, 2012 through September 30, 2012
October 1, 2012 through December 31, 2012
January 1, 2013 through March 31, 2013
April 1, 2013 through June 30, 2013
July 1, 2013 through September 30, 2013
October 1, 2013 through December 31, 2013
January 1, 2014 through March 31, 2014
April 1, 2014 through June 30, 2014
July 1, 2014 through September 30, 2014
October 1, 2014 through December 31, 2014
January 1, 2015 through March 31, 2015
April 1, 2015 through June 30, 2015
July 1, 2015 through September 30, 2015
October 1, 2015 through December 31, 2015
January 1, 2016 through March 31, 2016
April 1, 2016 through June 30, 2016
July 1, 2016 through September 30, 2016
October 1, 2016 through December 31, 2016
CAP Program Participation Agreement – 051812.1
Due Date:
April 15, 2012
July 15, 2012
October 15, 2012
January 15, 2013
April 15, 2013
July 15, 2013
October 15, 2013
January 15, 2014
April 15, 2014
July 15, 2014
October 15, 2014
January 15, 2015
April 15, 2015
July 15, 2015
October 15, 2015
January 15, 2016
April 15, 2016
July 15, 2016
October 15, 2016
January 15, 2017
36
STATE OF GEORGIA
SMALL BUSINESS CAPITAL ACCESS PROGRAM
ANNUAL REPORTING FORM
Loan ID #
Lender Information
Name:
EIN:
Borrower Information
Name:
Address:
Zip Code:
NAICS:
FTE Employees:
Jobs Created:
Incorporation Date:
Census Tract:
Jobs Retained:
Loan Information
Total Principal Loaned/Guaranteed:
Amount of Total Loan from Non-Private Sources:
Date of Initial Disbursement:
Additional Financing After Closing:
Lender:
For CAP Loans ONLY – Insurance Premiums paid by
Borrower:
State:
For SBCG Loans ONLY
Amount Guaranteed by Recipient:
Amount Set Aside by State:
For CDFI Loans ONLY
Amount of State Participation:
37
ATL 18374469v9