EXHIBIT 10.4
Page 54
LOAN AGREEMENT
Between
NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY
and
BURLINGTON COAT FACTORY WAREHOUSE
OF NEW JERSEY, INC.
Dated as of August 1, 1995
Page 55
TABLE OF CONTENTS
PAGE
ARTICLE I
BACKGROUND, REPRESENTATIONS AND FINDINGS
Section 1.1. Background . . . . . . . . . . . . . . . . 1
Section 1.2. Definitions. . . . . . . . . . . . . . . . 3
Section 1.3. Borrower Representations . . . . . . . . . 16
Section 1.4. Authority Representations and Findings . . 27
ARTICLE II
ACQUISITION OF PROJECT FACILITIES
Section 2.1. Acquisition of Project Facilities. . . . . 30
Section 2.2. Notices and Permits. . . . . . . . . . . . 30
Section 2.3. Additions and Changes to Project Facilities30
ARTICLE III
FINANCING OF PROJECT
Section 3.1. Issuance of Bonds. . . . . . . . . . . . . 31
Section 3.2. Acquisition Fund . . . . . . . . . . . . . 31
Section 3.3. Disbursements from the Acquisition Fund. . 31
Section 3.4. Establishment of Completion Date.. . . . . 32
Section 3.5. Application of Excess Amounts in
Acquisition Fund . . . . . . . . . . . . . 33
Section 3.6. Bonds Not to Become Arbitrage Bonds. . . . 33
Section 3.7. Restriction on Use of Acquisition Fund . . 33
Section 3.8. Three-Year Expenditure Requirement . . . . 33
Section 3.9. Investment Permitted . . . . . . . . . . . 33
ARTICLE IV
THE LOAN
Section 4.1. The Loan . . . . . . . . . . . . . . . . . 35
Section 4.2. Payment of Loan; Term of Agreement . . . . 35
Section 4.3. Security; Letter of Credit . . . . . . . . 35
Section 4.4. Acceleration of Payment to Redeem Bonds. . 36
Section 4.5. No Defense or Set-Off. . . . . . . . . . . 36
Section 4.6. Assignment of Authority's Rights . . . . . 37
Section 4.7. Opinion of Counsel for Borrower. . . . . . 37
Section 4.8. Opinion of Bond Counsel. . . . . . . . . . 37
Section 4.9. Opinion of Counsel for the Trustee . . . . 38
Section 4.10. Opinion of Counsel for the Bank. . . . . . 38
Section 4.11. Opinion of Counsel for the Escrow Agent. . 38
Section 4.12. Loan and Other Documents . . . . . . . . . 38
Section 4.13. Conditions Subsequent;
Defeasance of Prior Bonds. . . . . . . . . 42
Page 56
ARTICLE V
COVENANTS OF BORROWER
Section 5.1. Financial Statements . . . . . . . . . . . 44
Section 5.2. Preservation of Corporate Existence and
Qualification. . . . . . . . . . . . . . . 45
Section 5.3. Keeping of Records and Books of Account. . 45
Section 5.4. Maintenance of Properties. . . . . . . . . 45
Section 5.5. Maintenance of Licenses. . . . . . . . . . 46
Section 5.6. Further Assurances . . . . . . . . . . . . 46
Section 5.7. Maintenance of Insurance . . . . . . . . . 46
Section 5.8. Payment of Taxes, etc. . . . . . . . . . . 48
Section 5.9. Concerning the Project Facility. . . . . . 48
Section 5.10. Compliance with Code and Treasury
Regulations. . . . . . . . . . . . . . . . 48
Section 5.11. Compliance with Applicable Laws. . . . . . 51
Section 5.12. Environmental Covenant . . . . . . . . . . 51
Section 5.13. Mergers, etc.. . . . . . . . . . . . . . . 51
Section 5.14. Lease or Transfer of Project Facilities. . 53
Section 5.15. Inspection of the Project Facility . . . . 54
Section 5.16. Relocation of the Project Facilities . . . 54
Section 5.17. Annual Certificate . . . . . . . . . . . . 54
Section 5.18. Aggregate Limit. . . . . . . . . . . . . . 55
Section 5.19. Brokerage Fee. . . . . . . . . . . . . . . 55
Section 5.20. Intentionally Omitted. . . . . . . . . . . 55
Section 5.21. Payment of Compensation and Expenses
of Trustee and Placement Agent . . . . . . 55
Section 5.22. Payment of Authority's Fees and Expenses . 55
Section 5.23. Indemnity Against Claims . . . . . . . . . 56
Section 5.24. Damage to or Condemnation of
Project Facilities . . . . . . . . . . . . 57
Section 5.25. Prohibition of Liens . . . . . . . . . . . 58
Section 5.26. Financing Statements . . . . . . . . . . . 59
Section 5.27. Change in Nature of Corporate Activities . 59
Section 5.28. Notice and Certification With Respect
to Bankruptcy Proceedings. . . . . . . . . 59
Section 5.29. Rebate Covenant. . . . . . . . . . . . . . 60
Section 5.30. Continuing Disclosure. . . . . . . . . . . 60
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
Section 6.1. Events of Default; Acceleration. . . . . . 61
Section 6.2. Remedies on Default; Suit Therefor . . . . 63
Section 6.3. No Remedy Exclusive. . . . . . . . . . . . 64
Section 6.4. Agreement to Pay Attorneys' Fees
and Expenses . . . . . . . . . . . . . . . 64
Section 6.5. No Additional Waiver Implied by One Waiver 65
Section 6.6. Other Remedies . . . . . . . . . . . . . . 65
Section 6.7. Waiver . . . . . . . . . . . . . . . . . . 65
Section 6.8. Rights of the Bank . . . . . . . . . . . . 65
Page 57
ARTICLE VII
MISCELLANEOUS
Section 7.1. Limitation of Liability of Authority . . . 66
Section 7.2. Severability . . . . . . . . . . . . . . . 66
Section 7.3. Successors and Assigns . . . . . . . . . . 66
Section 7.4. Enforcement of Certain Provisions by
the Bank . . . . . . . . . . . . . . . . . 66
Section 7.5. Amendments, Etc. . . . . . . . . . . . . . 67
Section 7.6. Execution in Counterparts. . . . . . . . . 67
Section 7.7. Governing Law. . . . . . . . . . . . . . . 67
Section 7.8. No Warranty of Condition or Suitability
by Authority . . . . . . . . . . . . . . . 67
Section 7.9. Adjustments and Additional Costs . . . . . 67
Section 7.10. Reasonable Consent . . . . . . . . . . . . 68
Section 7.11. Amounts Remaining in Bond Fund or
Acquisition Fund . . . . . . . . . . . . . 68
Section 7.12. Receipt of Indenture . . . . . . . . . . . 68
Section 7.13. Headings . . . . . . . . . . . . . . . . . 68
Section 7.14. Waiver of Jury Trial . . . . . . . . . . . 68
Section 7.15. Integration; Entire Agreement. . . . . . . 69
Section 7.16. Survival of Agreements . . . . . . . . . . 69
Section 7.17. Addresses for Notices, Etc.. . . . . . . . 69
EXHIBIT A - Premises Description . . . . . . . . . . . . . . .A-1
EXHIBIT B - Description of Project Facilities. . . . . . . . .B-1
EXHIBIT C - New Jersey Economic Development Authority. . . . .C-1
EXHIBIT D - Description of Machinery and Equipment . . . . . .D-1
EXHIBIT E - Form of Completion Certificate . . . . . . . . . .E-1
Page 58
ARTICLE I
BACKGROUND, REPRESENTATIONS AND FINDINGS
Section 1.1. Background. THIS LOAN AGREEMENT dated as
of the first day of August, 1995, by and between the NEW JERSEY
ECONOMIC DEVELOPMENT AUTHORITY (the "Authority"), a public body
corporate and politic constituting an instrumentality of the State
of New Jersey and BURLINGTON COAT FACTORY WAREHOUSE OF NEW JERSEY,
INC. (the "Borrower"), a corporation organized and existing under
the laws of the State of New Jersey.
WHEREAS, the New Jersey Economic Development Authority
Act, constituting Chapter 80 of the Pamphlet Laws of 1974 of the
State of New Jersey, approved on August 7, 1974, as amended and
supplemented (the "Act"), declares it to be in the public interest
and to be the policy of the State of New Jersey (the "State") to
xxxxxx and promote the economy of the State, increase opportunities
for gainful employment and improve living conditions, assist in the
economic development or redevelopment of political subdivisions
within the State, and otherwise contribute to the prosperity,
health and general welfare of the State and its inhabitants by
inducing manufacturing, industrial, commercial, recreational,
retail, service and other employment promoting enterprises to
locate, remain or expand within the State by making available
financial assistance; and
WHEREAS, the Authority was created to aid in remedying
the aforesaid conditions and to implement the purposes of the Act,
and the Legislature has determined that the authority and powers
conferred upon the Authority under the Act and the expenditure of
moneys pursuant thereto constitute a serving of a valid public
purpose and that the enactment of the provisions set forth in the
Act is in the public interest and for the public benefit and good
and has been so declared to be as a matter of express legislative
determination; and
WHEREAS, the Authority, to accomplish the purposes of the
Act, is empowered to extend credit to such employment promoting
enterprises in the name of the Authority on such terms and
conditions and in such manner as it may deem proper for such
consideration and upon such terms and conditions as the Authority
may determine to be reasonable; and
WHEREAS, the Borrower submitted an application (the
"Original Application") to the Authority for financial assistance
in the principal amount of $10,000,000 for financing a portion of
the costs of a project (the "1985 Project") consisting of the
acquisition of 46.779 acres of land in the Township of Burlington,
Burlington County, New Jersey, the construction of an approximately
500,000 square foot building situate thereon for use as a national
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distribution center for the Borrower's products containing about
25,000 square feet of office space, the equipping of such building
with conveyor systems, rolling racks and automated machinery and
the construction of a parking lot adjacent to such building, and
the Authority, by resolution duly adopted July 3, 1985 in
accordance with the Act, accepted the application of the Borrower
for assistance in financing the 1985 Project; and
WHEREAS, the Authority, by resolution duly adopted
September 4, 1985 in accordance with the Act, authorized the
issuance of not to exceed $10,000,000 aggregate principal amount of
its Economic Development Bonds (Burlington Coat Factory Warehouse
of New Jersey, Inc. - 1985 Project) for the purpose of making a
loan to the Borrower to finance the 1985 Project (the "Original
Loan"); and
WHEREAS, on September 20, 1985 the Authority issued
$10,000,000 of its Economic Development Bonds dated September 1,
1985 to finance the 1985 Project (the "Prior Bonds") pursuant to
the provisions of an Indenture of Trust by and between the
Authority and National Westminster Bank USA, as Trustee, dated as
of September 1, 1985 (the "Prior Indenture"); and
WHEREAS, aforesaid Prior Bonds maturing on or after
September 1, 1996 are subject to redemption prior to maturity, at
the option of the Borrower, on any interest payment date on or
after September 1, 1995; and
WHEREAS, the Borrower is desirous of redeeming
$10,000,000 aggregate principal amount of the Prior Bonds maturing
on or after September 1, 1996 (the "Refunded Bonds") on September
1, 1995; and
WHEREAS, the Borrower, by letter dated May 10, 1995, has
notified the Authority of its intent to redeem the Refunded Bonds
on September 1, 1995 and has requested the Authority's assistance
in the issuance of not to exceed $10,000,000 aggregate principal
amount of bonds to refinance the 1985 Project and to redeem the
Refunded Bonds; and
WHEREAS, on July 11, 1995, the Authority, by resolution
duly adopted (the "Resolution"), authorized the issuance of its
Economic Development Refunding Bonds (Burlington Coat Factory
Warehouse of New Jersey, Inc. - 1995 Project) (the "Refunding
Bonds" or the "Bonds") for the purpose of providing funds for the
Borrower to refinance the 1985 Project and to redeem the Refunded
Bonds (the "Project"); and
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WHEREAS, the Authority has determined to issue the Bonds
concurrently herewith pursuant to the Act, the Resolution and the
Indenture (as hereinafter defined); and
WHEREAS, subject to the redemption of the Refunded Bonds,
the defeasance of the Prior Bonds and the release of all liens
created under the Prior Indenture associated therewith, the Loan
shall be secured by a first mortgage lien on the Premises (as
hereinafter defined), an Assignment of Leases on the Project
Facility (as hereinafter defined), a first priority security
interest in the Machinery and Equipment (as hereinafter defined),
a Guaranty (as hereinafter defined), and such other security
granted by the Borrower in connection with this transaction; and
WHEREAS, the Authority, contemporaneously with the
execution and delivery of this Loan Agreement, shall enter into an
Indenture of Trust dated as of August 1, 1995 (the "Indenture")
wherein the Authority has assigned certain of its rights under this
Loan Agreement to the Trustee for the benefit of the Holders from
time to time of the Bonds; and
WHEREAS, the execution and delivery of this Loan
Agreement have been duly authorized by the parties and all
conditions, acts and things necessary and required by the
Constitution or statutes of the State of New Jersey or otherwise,
to exist, to have happened, or to have been performed precedent to
or in the execution and delivery of this Loan Agreement do exist,
have happened and have been performed.
NOW, THEREFORE, for and in consideration of the premises
and of the mutual representations, covenants and agreements herein
set forth, the Authority and the Borrower, each party binding
itself and its successors and assigns, do mutually promise,
covenant and agree as follows (provided that in the performance of
the agreements of the Authority herein contained any obligation it
may incur for the payment of money shall not be a debt of the State
or any political subdivision thereof, and neither the State nor any
political subdivision thereof shall be liable on any obligation so
incurred, but any such obligation shall be payable solely out of
the revenues or other receipts, funds or moneys to be derived by
the Authority under this Loan Agreement, the Note and the Loan
Documents (as each such term is hereinafter defined):
Section 1.2. Definitions.
(a) The following terms shall have the meanings ascribed
to them in Section 1.1 hereof:
Page 61
Original Application
Prior Bonds
Prior Indenture
Refunded Bonds
(b) The following words and terms as used herein shall
have the following meanings unless the context or use indicates
another or different meaning or intent. Capitalized terms found
herein, but not defined herein shall have the same meanings given
them in the Indenture.
"Account" shall mean any account created under the
Indenture;
"Acquisition Fund" shall mean the fund so designated
which is established pursuant to Section 407 of the Indenture;
"Act" shall mean the New Jersey Economic Development
Authority Act, constituting N.J.S.A. Sec.34:1B-1 et seq., as amended,
or any successor legislation, and the regulations promulgated
thereunder;
"Act of Bankruptcy" shall mean the filing of a petition
in bankruptcy (or other commencement of a bankruptcy or similar
proceeding) by or against the Borrower, the Corporate Guarantor or
the Authority under any applicable bankruptcy, insolvency,
reorganization or similar law, now or hereafter in effect;
"Act of Bankruptcy of the Bank" shall occur when the
Bank, as issuer of the Letter of Credit, or any Letter of Credit
Issuer, becomes insolvent or fails to pay its debts generally as
such debts become due or admits in writing its inability to pay any
of its indebtedness or consents to or petitions for or applies to
any authority for the appointment of a receiver, liquidator,
trustee or similar official for itself or for all or any
substantial part of its properties or assets or any such trustee,
receiver, liquidator or similar official is otherwise appointed or
when insolvency, reorganization, arrangement or liquidation
proceedings (or similar proceedings) are instituted by or against
the Bank, or any Letter of Credit Issuer, provided that any such
proceedings brought against the Bank or any Letter of Credit
Issuer, will constitute such an Act of Bankruptcy only if not
dismissed within one hundred twenty (120) days;
"Agreement" or "Loan Agreement" shall mean this Loan
Agreement dated as of August 1, 1995 by and between the Authority
and the Borrower and any amendments hereof and supplements hereto
relating to the Project to be financed from proceeds of the Bonds;
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"Alternate Letter of Credit" shall mean any letter of
credit substituted for the Initial Letter of Credit, including any
renewals or extensions of the Initial Letter of Credit by the
Letter of Credit Issuer, pursuant to and meeting the requirements
of Section 404 of the Indenture;
"Alternate Letter of Credit Issuer" shall mean the issuer
of an Alternate Letter of Credit which meets the standards set
forth in Section 404(d) of the Indenture;
"Application" shall mean the Borrower's letter to the
Authority, dated May 10, 1995, with respect to the Project, and all
attachments, exhibits, correspondence and modifications submitted
in writing to the Authority in connection with said application;
"Article" shall mean a specified article hereof, unless
otherwise indicated;
"Assignment of Leases and Rents" shall mean the
assignment dated as of August 1, 1995, which is made a part of the
Record of Proceedings, executed by the Borrower and assigning to
the Bank the benefits of existing and future leases on the Project
Facility, as the same may be amended from time to time;
"Authority" shall mean the New Jersey Economic
Development Authority, a public body corporate and politic
constituting an instrumentality of the State of New Jersey
exercising governmental functions and any body, board, authority,
agency or political subdivision or other instrumentality of the
State which shall hereafter succeed to the powers, duties and
functions thereof;
"Authorized Authority Representative" shall mean any
individual or individuals duly authorized by the Authority to act
on its behalf pursuant to the Resolution;
"Authorized Borrower Representative" shall mean any
individual or individuals duly authorized by the Borrower to act on
its behalf;
"Bank" shall mean, with respect to the Initial Letter of
Credit, First Fidelity Bank, National Association, issuer of the
irrevocable direct pay Initial Letter of Credit, dated the Issue
Date, with its office located at 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000 and its successors and assigns,
and with respect to an Alternate Letter of Credit, the Alternate
Letter of Credit Issuer;
"Bond" or "Bonds" or "Refunding Bond" or "Refunding
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Bonds" shall mean the Authority's not to exceed $10,000,000
aggregate principal amount of Economic Development Refunding Bonds
(Burlington Coat Factory Warehouse of New Jersey, Inc. - 1995
Project) issued to provide funds to finance the Project,
substantially in the form attached as Exhibit A to the Indenture;
"Bond Counsel" shall mean the law firm of Wilentz,
Xxxxxxx & Xxxxxxx, P.A., 00 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxxxx,
Xxx Xxxxxx or any other nationally recognized bond counsel
acceptable to the Authority, the Trustee and the Letter of Credit
Issuer;
"Bond Fund" shall mean the fund so designated which is
established and created by Section 402 of the Indenture;
"Bond Proceeds" shall mean the amount, including any
accrued interest, paid to the Authority by the Placement Agent
pursuant to the Placement Agreement as the purchase price of the
Bonds, and any interest income earned thereon;
"Bond Year" shall mean the one-year period commencing
September 1 and ending on the following August 31; except that the
first Bond Year shall commence on the Issue Date and end on August
31, 1996;
"Borrower" shall mean Burlington Coat Factory Warehouse
of New Jersey, Inc., a corporation organized and existing under the
laws of the State of New Jersey and its successors and assigns;
"Borrower's Completion Certificate" shall mean the
certificate described in Section 3.4 hereof, executed by the
Borrower in form and substance acceptable to the Authority, wherein
the Borrower certifies as to such matters as the Authority shall
require;
"Business Day" shall mean a day of the year, other than
a Saturday, Sunday or other day on which banks located in the
municipality in which the Principal Offices of the Trustee, the
Paying Agent, the Bond Registrar (as defined in Section 209 of the
Indenture) or the Bank are located are authorized or required by
law to close;
"Code" shall mean the Internal Revenue Code of 1986, as
amended, and the Treasury Regulations and rules promulgated
thereunder;
"Collateral" shall mean all the real property subject to
the lien of the Mortgage and the Assignment of Leases, the
Machinery and Equipment, as well as all those assets of the
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Borrower in which the Authority or the Bank are granted a security
interest and all other real and personal property owned by the
Borrower and pledged, conveyed or in which the Authority or the
Bank are otherwise granted a lien and/or security interest in
connection with the Reimbursement Agreement (as hereinafter
defined) or any other Loan Document;
"Commitment Letter" shall mean the letter dated June 28,
1995 from the Bank to the Borrower confirming the Bank's commitment
to provide the Borrower with an irrevocable direct pay letter of
credit and executed by the Borrower on June 30, 1995;
"Completion Date" shall mean the date of completion of
the 1985 Project as stated in the Borrower's Completion Certificate
described in Section 3.4 hereof;
"Corporate Guarantor" shall mean Burlington Coat Factory
Warehouse Corporation, a corporation of the State of Delaware, the
Borrower's parent corporation;
"Cost" shall mean those items set forth in Section 3(c)
of the Act and all expenses as may be necessary or incident to
acquiring, constructing, installing or restoring the Project;
"Counsel for the Bank" shall mean the law firm of Pepper,
Xxxxxxxx & Xxxxxxx, Philadelphia, Pennsylvania;
"Counsel for the Borrower" shall mean the general counsel
to the Borrower, Xxxx X. Xxxx, Esq.;
"Counsel for the Escrow Agent" shall mean the law firm of
Xxxx and Xxxxx, P.C., Hartford, Connecticut;
"Counsel for the Placement Agent" shall mean the law firm
of Xxxxxxxx, St. Xxxx & Xxxxx, Newark, New Jersey;
"Counsel for the Trustee" shall mean the law firm of Xxxx
and Xxxxx, P.C., Hartford, Connecticut;
"Debt Service" shall mean the scheduled amount of
interest and amortization of principal payable for any Bond Year
with respect to the Bonds as defined in Section 148(d)(3)(D) of the
Code;
"Determination of Taxability" shall be deemed to have
occurred upon the happening of any of the following:
(i) the issuance of a published or private written
ruling of the Internal Revenue Service in which the
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Borrower or any "related person" has participated or with
respect to which the Borrower or "related person" has
been given written notice and the opportunity to
participate, to the effect that the interest payable on
the Bonds is wholly includable in the gross income for
Federal income tax purposes of one or more Ownersthereof;
or
(ii) a final, nonappealable determination by a
court of competent jurisdiction in the United States in a
proceeding with respect to which the Borrower or "related
person" has been given written notice and the opportunity
to participate and defend, to the effect that the
interest payable on the Bonds is wholly includable in the
gross income for Federal income tax purposes of one or
more Owners thereof; or
(iii) the enactment of legislation of the Congress
of the United States with the effect that interest
payable on the Bonds is, or would be, in the opinion of
Bond Counsel, includable in the gross income of the
Owners (except Owners who are "substantial users" or
"related persons" within the meaning of Section 147(a)
of the Code);
"Escrow Agent" shall mean Shawmut Bank Connecticut,
National Association, Hartford, Connecticut or its successor in
interest;
"Escrow Deposit Agreement" shall mean the Escrow Deposit
Agreement dated as of August 1, 1995 pursuant to which proceeds of
the Bonds will be deposited with the Escrow Agent, which proceeds
will be used to redeem the Refunded Bonds;
"Event of Default" shall mean any event of default as
defined in Article VI hereof;
"Financing Statements" shall mean the Uniform Commercial
Code financing statements which are made part of the Record of
Proceedings, executed by the Borrower, as Debtor;
"Funds" shall mean the Acquisition Fund and the Bond Fund
and shall not include the Rebate Fund;
"General Certificate of the Authority" shall mean the
certificate of the Authority which is made a part of the Record of
Proceedings;
"Gross Proceeds" shall have the meaning set forth in
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Section 1.148-1(b) of the Treasury Regulations, presently
including, without limitation:
(a) Sale proceeds, which are amounts actually or
constructively received on the sale (or other disposition) of the
Bonds, excluding amounts included in the issue price used to pay
accrued interest within one (1) year of the date of issuance;
(b) Investment proceeds, which are amounts actually
or constructively received from the investment of sale proceeds or
investment proceeds;
(c) Transferred proceeds, which are proceeds of a
refunded issue that are allocable to a refunding issue at the time
the refunded issue is discharged;
(d) Replacement proceeds, which are amounts
replaced by proceeds of an issue, including amounts held in a
sinking fund, pledged fund, or reserve or replacement fund for an
issue; and
(e) Amounts not otherwise taken into account which
are received as a result of investing the amounts described above;
"Guaranty" or "Guaranty Agreement" shall mean the
guaranty and suretyship agreement dated as of August 1, 1995,
executed and delivered by the Corporate Guarantor to the Bank;
The terms "herein", "hereunder", "hereby", "hereto",
"hereof", and any similar terms, refer to this Loan Agreement; the
term "heretofore" means before the date of execution of this Loan
Agreement; and the term "hereafter" means after the date of
execution of this Loan Agreement;
"Holder", "holder" or "Bondholder" shall mean any person
who shall be the registered owner of any Bond or Bonds;
"Indemnified Parties" shall mean the State, the
Authority, the Bank, the Placement Agent, the Holders, the Trustee,
any person who "controls" the State, the Authority, the Bank, the
Placement Agent, the Holders or the Trustee within the meaning of
Section 15 of the Securities Act of 1933, as amended, and any
member, officer, official, employee or attorney of the Authority,
the State, the Trustee, the Bank, the Placement Agent or the
Holders;
"Indenture" shall mean the Indenture of Trust dated as of
August 1, 1995 by and between the Authority and the Trustee, as the
same may have been from time to time amended, modified or
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supplemented by Supplemental Indentures as permitted thereby;
"Initial Letter of Credit" shall mean the irrevocable
direct pay Letter of Credit dated the Issue Date, in the form of
Annex A attached to the Reimbursement Agreement (as herein
defined), issued by the Bank;
"Issue Date" shall mean August 24, 1995;
"Letter of Credit" shall mean the Initial Letter of
Credit or any Alternate Letter of Credit;
"Letter of Credit Account" shall mean the account so
designated which is established and created as a separate account
within the Bond Fund pursuant to Section 402 of the Indenture;
"Letter of Credit Issuer" shall mean the Bank as issuer
of the Initial Letter of Credit and any issuer of an Alternate
Letter of Credit;
"Letter of Credit Maturity Date" shall mean the date of
expiration of the Initial Letter of Credit which is September 15,
2000, unless extended or renewed, or if the Initial Letter of
Credit has been replaced with an Alternate Letter of Credit, then
the expiration date of the Alternate Letter of Credit;
"Loan" shall mean the issuance of an amount not to exceed
$10,000,000 by the Authority for the purposes of redeeming the
Refunded Bonds;
"Loan Documents" shall mean any or all of this Loan
Agreement, the Indenture, the Mortgage, the Financing Statements,
the Guaranty Agreement, the Placement Agreement, the Assignment of
Leases, the Reimbursement Agreement, the Letter of Credit, the
Escrow Deposit Agreement, any documents securing the Borrower's
obligations under the Loan Agreement, the Indenture and the
Reimbursement Agreement and all documents and instruments executed
in connection therewith and all amendments and modifications
thereto;
"Machinery and Equipment" shall mean the machinery and
equipment listed on Exhibit D attached hereto and incorporated by
this reference herein;
"Mortgage" shall mean the first mortgage lien on and
security interest in the Premises securing the obligations of the
Borrower to the Bank, which Mortgage is made a part of the Record
of Proceedings, executed by the Borrower, as Mortgagor, and given
to the Bank, as Mortgagee;
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"Net Proceeds" shall mean the Bond Proceeds less any
amounts placed in a reasonably required reserve or replacement fund
within the meaning of Section 150(a)(3) of the Code;
"1985 Project" shall mean the acquisition of 46.779 acres
of land in the Township of Burlington, Burlington County, New
Jersey and the construction of an approximately 500,000 square foot
building situate thereon for use as a national distribution center
for the Borrower's products containing about 25,000 square feet of
office space, the equipping of such building with conveyor systems,
rolling racks and automated machinery and the construction of a
parking area adjacent to such building, a portion of such costs
being financed with the proceeds of the Prior Bonds;
"Nonpurpose Investment" shall mean any "investment
property" (within the meaning of Section 148(b)(2) of the Code)
which is (i) acquired with the Gross Proceeds of the Bonds and
(ii) not acquired in order to carry out the governmental purpose of
the Bonds;
"Obligations" shall mean the obligations of the Borrower
created pursuant to the Loan Documents and secured by the
Collateral;
"Original Loan" shall mean the loan from the Authority to
the Borrower in the aggregate principal amount not to exceed
$10,000,000 to pay for a portion of the Costs of the 1985 Project;
"Outstanding", when used with reference to Bonds and as
of any particular date, shall describe all Bonds theretofore and
thereupon being authenticated and delivered except (a) any Bond
canceled by the Trustee or proven to the satisfaction of the
Trustee to have been canceled by the Authority or by any other
Fiduciary, at or before said date, (b) any Bond for payment or
Redemption of which moneys equal to the principal amount or
redemption price thereof, as the case may be, with interest to the
date of maturity or redemption date, shall have theretofore been
deposited with one or more of the Fiduciaries in trust (whether
upon or prior to maturity or the redemption date of such Bond) and,
except in the case of a Bond to be paid at maturity, of which
notice of redemption shall have been given or provided for in
accordance with Article III of the Indenture, (c) any Bond in lieu
of or in substitution for which another Bond shall have been
authenticated and delivered pursuant to Article II of the
Indenture, and (d) any Bond held by the Borrower;
"Paragraph" shall mean a specified paragraph of a
Section, unless otherwise indicated;
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"Permitted Encumbrances" shall mean, as of any particular
time: (i) liens for taxes and assessments not then delinquent or,
provided there is no risk of forfeiture or sale of any of the
Collateral, which are being contested in good faith and for which
reserves have been established by the Borrower which are
satisfactory to the Bank, all in accordance with the provisions of
Section 5.8 of the Reimbursement Agreement; (ii) liens granted
pursuant to the Reimbursement Agreement, the Indenture, the Loan
Agreement, the Mortgage, the Assignment of Leases, the Financing
Statements and the other Loan Documents; (iii) utility access and
other easements and rights of way, restrictions and exceptions that
the Title Insurance Policy insures will not interfere with or
impair the Premises or the Project Facility and previously approved
by and acceptable to the Bank; (iv) liens securing claims or
demands of mechanics and materialmen or other like liens; (v)
purchase money security interests encumbering (A) property other
than the Collateral or (B) property acquired after the date hereof
and otherwise comprising Collateral, provided, however, that the
Bank's lien shall remain in effect with respect to such Collateral
subject only to such purchase money security interest(s); (vi)
those exceptions shown on Schedule B of the Title Insurance Policy
acceptable to the Bank and the Authority; (vii) liens of or
resulting from any litigation or legal proceeding which are being
contested in good faith by appropriate actions or proceedings or
any judgment or award, the time for the appeal or petition for
rehearing of which shall not have expired, or in respect of which
the Borrower shall at any time in good faith be prosecuting an
appeal or proceeding for a review and in respect of which a stay of
execution pending such appeal or proceeding for review shall have
been secured or for which a supersedeas bond has been timely
posted; (viii) minor survey exceptions or minor encumbrances,
easements or reservations, or rights of others for rights-of-way,
utilities and other similar purposes, or zoning or other
restrictions as to the use of real properties which are necessary
for the conduct of the activities of the Borrower or which
customarily exist on properties of corporations engaged in similar
activities and similarly situated and which do not in the aggregate
materially impair the operation of the business of the Borrower;
and (ix) liens in favor of the City of Burlington in connection
with an Urban Development Act Grant (UDAG Grant Number
B-85-AB-34-0262), which liens are subordinate to the lien of and
Mortgage in favor of the Bank;
"Permitted Investments" shall mean those investments
described in Article VI of the Indenture;
"Person" or "Persons" shall mean any individual,
corporation, partnership, joint venture, trust, or unincorporated
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organization, or a governmental agency or any political subdivision
thereof;
"Placement Agent" shall mean First Fidelity Bank, N.A.,
in its capacity as agent in connection with the placement of the
Bonds;
"Placement Agreement" shall mean the Placement Agreement
dated as of August 1, 1995 by and among the Placement Agent, the
Bank, the Authority and the Borrower;
"Premises" shall mean the premises and all improvements
thereon located in the Project Municipality, all as described in
Schedule A to this Loan Agreement and the Mortgage;
"Principal User" shall mean any principal user within the
meaning of Section 1.103-10 of the Treasury Regulations and the
proposed amendments thereto published by the Internal Revenue
Service in the Federal Register on February 21, 1986 or any Related
Person to a Principal User within the meaning of Section 144(a)(3)
of the Code;
"Project" shall mean the refinancing of the 1985 Project
and the redemption of the Refunded Bonds with the proceeds of the
Bonds;
"Project Facility" or "Project Facilities" shall mean the
land, the improvements and the building situate thereon located in
the Project Municipality acquired and constructed by the Borrower,
including any additions, substitutions or replacements which have
been constructed or acquired thereon with the proceeds of the
Refunded Bonds;
"Project Municipality" shall mean the Township of
Burlington, County of Burlington, State of New Jersey;
"Proper Charge" shall mean (i) issuance costs for the
Bonds, including, without limitation, certain attorneys' fees,
printing costs, initial trustee's fees and similar expenses; or
(ii) an expenditure for the Project incurred for the purposes of
redeeming the Refunded Bonds which were issued for the purposes of
acquiring and constructing the 1985 Project;
"Rebate Fund" shall mean the fund so designated which is
established and created pursuant to Section 413 of the Indenture;
"Record of Proceedings" shall mean the Loan Documents,
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certificates, affidavits, opinions and other documentation executed
in connection with the sale of the Bonds and the making of the
Loan;
"Reimbursement Agreement" shall mean the Letter of Credit
Reimbursement Agreement dated as of August 1, 1995, between the
Borrower and the Bank, as the same may be amended from time to time
and filed with the Trustee, under which terms the Bank agrees to
issue the Initial Letter of Credit, and any successor agreement of
the Borrower with a Letter of Credit Issuer under which terms the
Borrower and such Letter of Credit Issuer agree to issue the Letter
of Credit;
"Related Person" shall mean a related person within the
meaning of Section 144(a)(3) or Section 147(a)(2) of the Code, as
is applicable;
"Requisition Form" shall mean the form of requisition
required by Section 3.3 hereof as a condition precedent to the
disbursement of moneys from the Acquisition Fund, in the form which
shall be part of the Record of Proceedings;
"Reserved Rights" shall mean those certain rights of the
Authority under this Loan Agreement to indemnification and to
payments of certain Authority fees and expenses, indemnity
payments, its right to enforce notice and reporting requirements,
restrictions on transfer of ownership, its right to inspect and
audit the books, records and the Project Facilities, of the
Borrower, collection of attorneys' fees, its right to enforce the
Borrower's covenant to comply with applicable Federal tax law, its
rights set forth in the provisions to the granting clause in the
preamble to the Indenture (to the extent not recited herein) and
its right to receive certain notices;
"Resolution" shall mean the resolution duly adopted by
the Authority on July 11, 1995, accepting the Application, making
certain findings and determinations and authorizing the issuance
and sale of the Bonds and determining other matters in connection
with the Project, as the same may be amended or supplemented from
time to time;
"Section" shall mean a specified section hereof, unless
otherwise indicated;
"State" shall mean the State of New Jersey;
"Substantial User" shall mean a substantial user of the
Project Facility or any Related Person to a Substantial User within
the meaning of Section 147(a) of the Code;
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"Tax Certificate" shall mean the certificate executed by
the Borrower in form and substance acceptable to the Authority,
wherein the Borrower certifies as to such matters as the Authority
shall require;
"Term Sheet" shall mean the term sheet dated June 28,
1995 attached to the Commitment Letter from the Bank to the
Borrower and made a part thereof, outlining the terms and
conditions upon which the Letter of Credit is to be issued by the
Bank;
"Test Period Beneficiary" shall mean any Person who was
an owner or Principal User of any facilities being financed by any
issue of tax-exempt facility-related bonds (as defined in Section
144(a)(10)(B) of the Code) at any time during the three-year period
beginning on the later of the date such facilities were placed in
service or the date of such issue;
"Title Insurance Policy" shall mean the title insurance
policy issued pursuant to Xxxxxxxxxx Xx. XX 000000 by Commonwealth
Land Title Insurance Company on the Project Facilities and made
part of the Record of Proceedings;
"Treasury Regulations" shall mean the Income Tax
Regulations promulgated by the Department of Treasury pursuant to
Sections 103 and 141-150 of the Code as the same shall be amended
or supplemented from time to time;
"Trustee" shall mean Shawmut Bank Connecticut, National
Association, a national banking association duly organized and
validly existing and authorized to accept and execute the trusts of
the character set forth in the Indenture under and by virtue of the
laws of the United States of America, with its principal corporate
trust office located in Hartford, Connecticut, or its successor and
assigns in interest of such capacities;
"Yield" shall mean the yield as calculated in the manner
set forth in Section 148 of the Code; thus, yield with respect to
an investment allocated to the Bonds is that discount rate which
produces the same present value when used in computing the present
value of all receipts received and to be received with respect to
investments and the present value of all the payments with respect
to the investments. The yield on the Bonds is that discount rate
which produces the same present value on the date hereof when used
in computing the present value of all payments of principal,
interest and charges for a "qualified guarantee" to be made with
respect to the Bonds and the present value of all of the issue
prices for the Bonds. The issue price for each maturity of the
Bonds is the initial offering price of such Bonds to the public.
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Section 1.3. Borrower Representations. The Borrower
represents and warrants that:
(a) Organization, Powers, etc. It is a corporation
duly organized, created and in good standing under the laws of the
State and in all other jurisdictions in which such qualification is
material to the conduct of its business activities, has the full
corporate power and authority to own its properties and assets and
to carry on its business as now being conducted (and as now
contemplated by the Borrower) and has the power to perform all the
undertakings of the Loan Documents, to borrow hereunder and to
execute and deliver the Loan Documents.
(b) Execution of Loan Documents. The execution,
delivery and performance by the Borrower of the Loan Documents and
other instruments required or contemplated to be delivered by the
Borrower pursuant to this Agreement:
(i) have been duly authorized by all
requisite corporate action;
(ii) do not and will not conflict with or
violate any provision of law, rule or governmental
regulation, any order, decree, writ, injunction,
determination, award or judgment of any court, arbitrator
or other agency of government;
(iii) do not and will not conflict with or
violate any provision of the certificate of incorporation
and by-laws of the Borrower; and
(iv) do not and will not conflict with any
of the terms of, or result in a breach of, or constitute
a default under, or result in the creation or imposition
of any lien or charge upon any assets of the Borrower
pursuant to, any mortgage, indenture, contract, lease,
loan or credit agreement, or other agreement or
instrument to which the Borrower is a party or by which
any of its assets are bound (excepting those liens as are
created by the Loan Documents).
(c) Title to Collateral. Except as described in
Section 3.1(c) of the Reimbursement Agreement, the Borrower has
good and marketable title to the Collateral, free and clear of any
lien or encumbrance except for the Permitted Encumbrances, if any.
Assuming consideration has been given by the Bank and subject to
the defeasance of the Refunded Bonds and the release of all liens
created under the Prior Indenture associated therewith, upon
recording in the appropriate office, the Mortgage will constitute a
Page 74
valid first mortgage lien on the Premises and an assignment of the
leases thereon and upon recording, the Financing Statements will
perfect valid first lien security interests in the Collateral,
other than the Premises.
(d) Litigation. Except as described in the
Schedule II of the Reimbursement Agreement, there is no action,
suit or proceeding at law or in equity or by or before any
governmental instrumentality or other agency or arbitrator now
pending or, to the knowledge of the Borrower, threatened against or
affecting it or any of its properties or powers which, if adversely
determined, would (i) affect the transactions contemplated hereby,
(ii) affect the validity or enforceability of the Loan Documents,
(iii) affect the ability of the Borrower to perform its obligations
under the Loan Documents, (iv) impair the value of the Collateral,
(v) materially impair the Borrower's right to carry on its business
substantially as is now being conducted, (vi) adversely affect the
validity or the enforceability of the Bonds, the Indenture, the
Loan Agreement and the Loan Documents, (vii) have a material
adverse effect on the Borrower's financial condition or (viii) in
which the relief sought is in excess of $500,000.
(e) Payment of Taxes. The Borrower has filed or
caused to be filed all Federal, State and local tax returns
(including, without limitation, information returns) which are
required to be filed, and has paid or caused to be paid all taxes
as shown on said returns or on any assessment made against the
Borrower or against any of its properties or assets and all other
taxes, fees or other charges imposed on it by any governmental
authority, to the extent that such taxes have become due; and no
tax liens have been filed, and to the knowledge of the Borrower and
no claims have been asserted against the Borrower or any of its
properties or assets with respect to any taxes, fees or charges by
any governmental authority.
(f) No Defaults. The Borrower is not as of the
date hereof in default or noncompliance in the performance,
observance or fulfillment of any of the obligations, covenants or
conditions contained in any material agreement or instrument to
which it is a party or by which it is bound or with respect to any
law, statute, judgment, writ, injunction, decree, rule or
regulation of any court or governmental authority.
(g) Consents. No consent of any other person and
no consent, license, approval or authorization of, or registration,
filing or declaration with, any court or governmental authority, is
or will be necessary to the valid execution, delivery or
performance by the Borrower of any of the Loan Documents.
Page 75
(h) Important Inducement. The availability of the
financial assistance by the Authority as provided herein was an
important inducement to the Borrower to undertake the 1985 Project
and to locate the Project Facility in the State.
(i) Obligations of the Borrower. Each of the Loan
Documents have been duly executed and delivered and constitute
legal, valid and binding obligations of the Borrower enforceable
against it in accordance with their respective terms.
(j) No Untrue Statements. No representation
contained herein or in any Loan Document, and no information,
certification, instrument, agreement, exhibit, report furnished by
or on behalf of the Borrower to the Authority and the Trustee, the
Original Application, or any other document, certificate or
statement furnished to the Trustee and the Authority, by or on
behalf of the Borrower contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make
the statements contained herein and therein not misleading or
incomplete. The Borrower specifically represents that it is not
involved in any litigation of the nature that was required to be
disclosed in the Original Application nor is it the subject of any
investigation or administrative proceeding (of the type that would
have been required to be disclosed in the Original Application)
which has not been disclosed to the Authority. Further, it is
specifically acknowledged by the Borrower that all such statements,
representations and warranties shall be deemed to have been relied
upon by the Authority as an inducement to undertake the Project and
make the Loan and by the Holders as an inducement to purchase the
Bonds and that if any such statements, representations and
warranties were false at the time they were made, the Authority or
the Holders may, in its sole discretion, consider any such
misrepresentation or breach of warranty an Event of Default as
defined in Section 6.1 hereof and exercise the remedies provided
for in this Loan Agreement.
(k) No Subsidiaries. The Borrower (x) has no
subsidiaries and no investment in any other corporation; (y) has no
investment in any partnership, limited partnership or joint
venture; and (z) is not a member or participant in any partnership,
limited partnership or joint venture.
(l) No Action. The Borrower has not taken and will
not take any action and knows of no action that any other Person
has taken or intends to take, which would cause interest income on
the Bonds to be includable in the gross income of the recipients
thereof under the Code.
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(m) Compliance with Laws. The Borrower has
complied in all material respects with all filings, permits,
licenses and other requirements of Federal, State and local laws
necessary to prevent the Borrower from being precluded, by reason
of its failure to comply with any such requirements, from
continuing to conduct its activities as are now being conducted in
the jurisdictions in which it is now conducting activities.
(n) Acquisition/Operation of the Project Facility.
The operation of the Project Facility in the present manner and as
contemplated and described in the Original Application does not
conflict with any current zoning, water, air pollution or other
ordinances, orders, laws or regulations applicable thereto. The
Borrower caused the Project Facility to be acquired in all material
respects in accordance with all Federal, State and local laws or
ordinances (including rules and regulations) relating to zoning,
building, safety and environmental quality. The Borrower will
complete the Project pursuant to the terms of this Agreement and
the Reimbursement Agreement.
(o) Commencement of Project; Proper Charges. The
Borrower has not incurred any expense prior to July 11, 1995 for
which it shall seek reimbursement from the Acquisition Fund, other
than a Proper Charge.
(p) Outstanding Tax-Exempt Bonds. (i) Except for
the Bonds and the Refunded Bonds, which will be redeemed in their
entirety with the Net Proceeds of the Bonds, there is outstanding
no other issue of tax-exempt bonds (including industrial
development bonds) as defined in Section 150(a)(6) of the Code, the
proceeds from the sale of which have been or will be used with
respect to facilities, the Principal User of which is or will be
the Borrower, the Corporate Guarantor or any Principal User of the
Project Facility and which are or will be wholly or partially
located in the Project Municipality.
(ii) The aggregate face amount of the Bonds
when added to the tax-exempt facility-related bonds (as defined in
Section 144(a)(10)(B) of the Code) allocated to the Borrower, the
Corporate Guarantor or any other Test-Period Beneficiary which are
outstanding at the time of the issuance of the Bonds (not including
the Refunded Bonds, or any bond which is to be redeemed from the
Net Proceeds of the Bonds) does not exceed $40,000,000.
(q) Substantial Users. No Person (or any Related
Person within the meaning of Section 144(a)(3) of the Code) who was
a Substantial User of the Project Facility within the meaning of
Section 1.103-8T of the Temporary Treasury Regulations at any time
during the five (5) year period immediately preceding the date
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hereof, and who will receive, directly or indirectly, Bond Proceeds
in an amount equal to five per centum (5%) or more of the face
amount of the Bonds in payment for his interest in the Project
Facility, will be a Substantial User of the Project Facility or a
Related Person at any time during the five (5) year period
beginning on the date of issuance of the Bonds.
(r) Placement in Service. The Project Facilities
were not acquired or placed in service by the Borrower (determined
in accordance with the provisions of Section 103 of the Code and
applicable Treasury Regulations thereunder) more than one (1) year
prior to the date of issuance of the Prior Bonds.
(s) Use of Proceeds. All of the proceeds of the
Bonds will be used for Proper Charges of the Project.
(t) Economic Life. The information contained in
the Tax Certificate and the Internal Revenue Service Form 8038,
setting forth the respective cost, economic life, ADR midpoint
life, if any, under Rev. Proc. 83-35, 1983-1 C.B. 745, as
supplemented and amended from time to time, and guideline life, if
any, under Rev. Proc. 62-21, 1962-2 C.B. 118, as supplemented and
amended from time to time, of each asset constituting the 1985
Project which was financed with the proceeds of the Prior Bonds is
true, accurate and complete.
(u) Average Weighted Maturity of the Bonds. The
average weighted maturity of the Bonds will not exceed 120% of the
remaining useful lives of the assets comprising the Project
Facilities (all determined pursuant to Section 147(b) of the Code
and the rulings promulgated thereunder).
(v) Bonds Not Federally Guaranteed. (A) The
payment of principal or interest with respect to the Bonds is not
guaranteed (in whole or in part) by the United States (or any
agency or instrumentality thereof); (B) a significant portion of
the proceeds of the Bonds will not be (i) used in making loans the
payment of principal or interest with respect to which are to be
guaranteed (in whole or in part) by the United States (or any
agency or instrumentality thereof), or (ii) invested (directly or
indirectly) in Federally insured deposits or accounts as defined in
Section 149(b)(4)(B) of the Code; or (C) the payment of principal
or interest on the Bonds is not otherwise indirectly guaranteed (in
whole or in part) by the United States (or an agency or
instrumentality thereof).
The foregoing provisions of this Section shall not
apply to proceeds of the Bonds being: (x) invested for an initial
Page 78
temporary period until such proceeds are needed for the purpose for
which such issue was issued; (y) invested in obligations issued by
the United States Treasury; or (z) invested in other investments
permitted under Section 149(b)(3) of the Code.
(w) Acquisition of Land. (i) No portion of the
proceeds of the Prior Bonds was used (directly or indirectly) for
the acquisition of land (or an interest therein) to be used for
farming purposes, and (ii) less than 25% of the proceeds of the
Prior Bonds were used (directly or indirectly) for the acquisition
of land (or an interest therein) not described in clause (i).
(x) Environmental Representation. For purposes of
this subsection 1.3(u), "Applicable Environmental Law(s)" shall
mean (i) the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. 9601 et seq.
("CERCLA"); (ii) the Resource Conservation and Recovery Act of
1976, as amended, 42 U.S.C. 6901 et seq. ("RCRA"); (iii) the New
Jersey Industrial Site Recovery Act, as amended, P.L. 1995, C. 139
("ISRA"); (iv) the New Jersey Spill Compensation and Control Act,
as amended, N.J.S.A. 58:10-23.11b et seq. ("Spill Act"); (v) the
New Jersey Underground Storage Tank Act, as amended, N.J.S.A.
58:10A-21 et seq. ("UST"); (vi) the New Jersey Solid Waste
Management Act, as amended, N.J.S.A. 13:1E-1 et seq.; (vii) the New
Jersey Toxic Catastrophe Prevention Act, as amended, N.J.S.A.
13:1K-19 et seq.; (viii) the New Jersey Water Pollution Control
Act, as amended, N.J.S.A. 58:10A-1 et seq; (ix) the Clean Air Act,
as amended, 42 U.S.C. 7401 et seq.; (x) the New Jersey Air
Pollution Control Act, as amended, N.J.S.A. 26:2C-1 et seq.; and
(xi) any and all laws, regulations, and executive orders, both
Federal, State and local, pertaining to pollution or protection of
the environment (including laws, regulations and other requirements
relating to emissions, discharges, releases or threatened releases
of pollutants, contaminants, or hazardous or toxic materials or
wastes into ambient air, surface water, ground water or land, or
otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, or hazardous or toxic material or
wastes), as the same may be amended or supplemented from time to
time. Any capitalized terms mentioned in the following subsections
which are defined in any Applicable Environmental Law shall have
the meanings ascribed to such terms in said laws; provided,
however, that if any of such laws are amended so as to broaden any
term defined therein, such broader meaning shall apply subsequent
to the effective date of such amendment.
(i) To the best knowledge of the Borrower,
Page 79
after due inquiry and diligence, (a) the Borrower has obtained all
permits, licenses and other authorizations which are required with
respect to its businesses, properties and assets under all
Applicable Environmental Laws; (b) he activities, properties and
assets of the Borrower are in compliance with all terms and
conditions of the required permits, licenses and authorizations,
and are also in compliance with all other limitations,
restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in those laws or
contained in any regulation, code, plan, order, decree, judgment,
notice or demand letter issued, entered, promulgated or approved
thereunder; and (c) there are no past or present events,
conditions, circumstances, activities, practices, incidents,
actions or plans which may interfere with, or prevent, continued
compliance on the part of the Borrower, or which may give rise to
any liability on the part of the Borrower, or otherwise form the
basis of any claim, action, suit, proceeding or investigation
against the Borrower, based on or related to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport or handling, or the emission, discharge, release or
threatened release into the environment, of any pollutant,
contaminant, or hazardous or toxic material or waste.
(ii) There have been no claims, litigation,
administrative proceedings, whether actual or threatened, or
judgments or orders, relating to any hazardous substances,
hazardous wastes, discharges, emissions or other forms of pollution
relating in any way to any property or activities of the Borrower,
including without limitation, the Premises or the Project Facility.
(iii) Neither the Borrower nor the Premises or
the Project Facilities are in violation of any Applicable
Environmental Law or subject to any existing, pending or threatened
investigation or inquiry by any governmental authority pertaining
to any Applicable Environmental Law, other than as disclosed in
writing to the Authority prior to the date hereof. The Borrower
shall not cause or permit the Premises or the Project Facilities to
be in violation of, or do anything which would subject the Premises
or the Project Facilities to any remedial obligations under any
Applicable Environmental Law, and shall promptly notify the
Authority and the Bank, in writing, of any existing, pending or
threatened investigation or inquiry by any governmental authority
in connection with any Applicable Environmental Law.
(iv) No friable asbestos, or any asbestos
containing substance deemed hazardous by Federal or State
regulations, has been installed in the Project Facilities other
than as disclosed in writing to the Authority prior to the date
hereof. The Borrower covenants that it will not install in the
Page 80
Project Facilities friable asbestos or any asbestos containing
substance deemed hazardous by Federal or State regulations. In the
event any such materials are found to be present at the Project
Facilities, the Borrower agrees to remove the same promptly upon
discovery at its sole cost and expense.
(v) The Borrower has taken all steps necessary
(which without limitation includes at a minimum all actions
necessary to meet the "all appropriate inquiry" standard set forth
in N.J.S.A. 58:10A-23.11g as amended by ISRA) to determine and has
determined that no Hazardous Substances or Hazardous Wastes have
been disposed of or otherwise released or discharged on or to the
Premises or the Project Facilities other than as disclosed in
writing to the Authority prior to the date hereof. The use which
the Borrower makes of the Project Facilities will not result in the
disposal or other release or discharge of any Hazardous Substance
or Hazardous Waste on or to the Premises or the Project Facilities.
During the term of this Loan Agreement, the Borrower shall take all
steps necessary to determine whether Hazardous Substances or
Hazardous Wastes have been disposed of or otherwise released or
discharged on or to the Premises or the Project Facilities and if
so will remove the same promptly upon discovery at its sole
expense.
The Borrower further represents, warrants, covenants and
agrees as follows:
(vi) None of the real property owned and/or
occupied by the Borrower and located in the State, including
without limitation the Premises and the Project Facilities, has, to
the best of the Borrower's knowledge, ever been used by previous
owners and/or operators nor will be used in the future to (i)
refine, produce, store, handle, transfer, process or transport
Hazardous Substances or Hazardous Wastes; or (ii) generate,
manufacture, refine, transport, treat, store, handle or dispose of
Hazardous Substances or Hazardous Wastes other than as disclosed in
writing to the Authority prior to the date hereof.
(vii) The Borrower has not received any
communication, written or oral, from the State Department of
Environmental Protection, the United States Environmental
Protection Agency, or any other governmental entity concerning any
intentional or unintentional action or omission on the Borrower's
part on the Premises or Project Facilities resulting in the
releasing, spilling, leaking, pumping, pouring, emitting, emptying
or dumping of Hazardous Substances or Hazardous Wastes other than
as disclosed in writing to the Authority prior to the date hereof.
(viii) None of the real property owned and/or
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occupied by the Borrower and located in the State, including
without limitation the Premises and the Project Facilities, has or
is now being used as a Major Facility, as such term is defined in
ISRA, and the Borrower shall not use any such property as a Major
Facility in the future without the prior express written consent of
the Authority and the Bank. If the Borrower ever becomes an owner
or operator of a Major Facility, then the Borrower shall furnish
the State Department of Environmental Protection with all the
information required by N.J.S.A. Sec.58:10-23.11d, and shall duly file
with the Director of the Division of Taxation in the New Jersey
Department of the Treasury a tax report or return, and shall pay
all taxes due therewith, in accordance with N.J.S.A. Sec.58:10-23.11h.
(ix) In connection with the purchase of the
Premises or any other real property located within the State
acquired by the Borrower on or after January 1, 1984, the Borrower
required that the seller of said real property, including the
Premises, comply with the applicable provisions of ISRA (or its
predecessor statute ECRA) and the seller did comply therewith.
(x) The Borrower shall not conduct or cause or
permit to be conducted on the Premises or the Project Facilities
any activity which constitutes an Industrial Establishment, as such
term is defined in ISRA, without the prior express written consent
of the Authority and the Bank. In the event that the provisions of
ISRA become applicable to the Premises or the Project Facilities
subsequent to the date hereof, the Borrower shall give prompt
written notice thereof to the Authority and the Bank and shall take
immediate requisite action to insure full compliance therewith.
The Borrower shall deliver to the Authority and the Bank copies of
all correspondence, notices, reports, and submissions that the
Borrower generates, or sends to or receives from the State
Department of Environmental Protection, in connection with such
ISRA compliance. The Borrower's obligation to comply with ISRA
shall, notwithstanding its general applicability, also specifically
apply to a sale, transfer, closure or termination of operations
associated with any foreclosure action by the Authority, the
Trustee or the Bank.
(xi) No lien has been attached to any revenue
or any personal property owned by the Borrower and located in the
State, including, without limitation, the Premises or the Project
Facilities, as a result of (i) the Administrator of the New Jersey
Spill Compensation Fund expending moneys from said fund to pay for
Damages and/or Cleanup and Removal Costs; or (ii) the Administrator
of the United States Environmental Protection Agency expending
moneys from the Hazardous Substance Superfund for Damages and/or
Response Action Costs. In the event that any such lien is or has
been filed, then the Borrower shall, within thirty (30) days from
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the date that the Borrower is given such notice of such lien (or
within such shorter period of time in the event that the State or
the United States has commenced steps to have the Premises or the
Project Facilities sold), either: (i) pay the claim and remove the
lien from the Premises or Project Facilities; or (ii) furnish (a) a
bond satisfactory to the Authority and the Bank in the amount of
the claim out of which the lien arises, (b) a cash deposit in the
amount of the claim out of which the lien arises, or (c) other
security satisfactory to the Authority and the Bank in an amount
sufficient to discharge the claim out of which the lien arises.
(xii) In the event that the Borrower shall cause
or permit to exist a releasing, spilling, leaking, pumping,
pouring, emitting, emptying or dumping of Hazardous Substances or
Hazardous Wastes, the Borrower shall promptly remove and remediate
such release, spill, leak, pumping, pouring, emission, emptying or
dumping in accordance with the provisions of any Applicable
Environmental Law.
(y) Project Municipality. The Project Facilities
are located wholly within the borders of the Project Municipality
and the Premises are not contiguous with the borders of any portion
of the Project Municipality. The operation of the Project
Facilities is not integrated with any other facility in any
neighboring municipality operated by any Principal User of the
Project Facilities. All of the facilities financed by the Prior
Bonds are located within one state, and neither the Borrower nor
any Related Person is a user of any facility financed by the
proceeds of the Prior Bonds other than the 1985 Project.
(z) No Tenancies. No Principal User of the
Project Facilities is a tenant in any facility in the Project
Municipality, the landlord of which is a Person other than a
Principal User of the Project Facilities.
(aa) No Common Plan of Financing. Subsequent to
thirty-one (31) days prior to the date hereof, the Borrower or any
Related Person (or group of related persons which includes the
Borrower) has not guaranteed, arranged, participated in, assisted
with, borrowed the proceeds of, or leased facilities financed by
obligations issued under Section 103 of the Code by any state or
local governmental unit or any constituted authority empowered to
issue obligations by or on behalf of any state or local
governmental unit other than the Authority. During the period
commencing on the date of issuance of the Bonds and ending
thirty-one (31) days thereafter, there will be no obligations
issued under Section 103 which are guaranteed by the Borrower or
any Related Person (or group of related persons which includes the
Borrower) or which are issued with the assistance or participation
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of, or by arrangement with, the Borrower or any Related Person (or
group of related persons which includes the Borrower) without the
written opinion of Bond Counsel, to the effect that the issuance of
such obligation will not adversely affect their opinion as to
exemption from present Federal income taxes of interest on the
Bonds. Other than the Borrower, the Corporate Guarantor or any
Related Person (or group of related persons including the
Borrower), no person has (i) guaranteed, arranged, participated in,
assisted with the issuance of, or paid any portion of the cost of
the issuance of the Bonds, or (ii) provided any property or any
franchise, trademark or trade name (within the meaning of Code
Section 1253) which is to be used in connection with the Project.
(bb) Aggregation of Issues for Single Project. The
Project Facilities do not share "substantial common facilities",
within the meaning of Section 144(a)(9) of the Code, with any other
facility financed by an outstanding tax-exempt bond.
(cc) Limitation on Expenditures; Principal User.
On the issue date of the Prior Bonds, the sum of the following did
not exceed $10,000,000:
(i) the aggregate amount of any capital
expenditures paid or incurred by the Borrower or other Principal
User of the Project Facilities or any Related Person to the
Borrower or other Principal User of the Project Facilities (other
than those financed out of the proceeds of the Prior Bonds or a
bond referred to in subparagraph (a) above) within the meaning of
Sections 1.103-10(b)(2)(ii) and 1.103-10(d)(2) of the Treasury
Regulations, during the six (6) year period beginning three (3)
years prior to the date of issuance of the Prior Bonds and ending
three (3) years after such date of issuance of the Prior Bonds with
respect to facilities located within each Project Municipality or
"contiguous" or "integrated" facilities located in any adjacent
political jurisdiction;
(ii) the aggregate amount of all capital
expenditures paid or incurred for the three (3) year period prior
to the date of issuance of the Prior Bonds by any Person other than
the Borrower or other Principal User of the Project Facility or a
Related Person to the Borrower or other Principal User of the
Project Facility (e.g., a landlord or other lessor), with respect
to and for the benefit of facilities located within the Project
Municipality or "contiguous" or "integrated" facilities located in
any adjacent political jurisdiction of which a Principal User of
the Project Facility or any Related Person is a Principal User;
(iii) the aggregate face amount of any
outstanding issues of obligations (other than the Prior Bonds)
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exempt from taxation under Section 144(a)(4) of the Code, the
proceeds of which were used primarily with respect to facilities
(i) located within each Project Municipality or "contiguous" or
"integrated" facilities located in any adjacent political
jurisdiction and (ii) the Principal User of which is or will be the
Borrower or any other Principal User of the Project Facilities or
any Related Person; and
(iv) the aggregate principal amount of the
Prior Bonds.
(dd) As of the date hereof, the Borrower and the
Corporate Guarantor, the parent of the Borrower, are the only
Principal Users of the Project.
(ee) The Borrower shall at all times do and perform
all acts and things necessary to be done and performed under the
Loan Documents in order to assure that interest paid on the Bonds
shall, for purposes of Federal income taxation, be excludable from
the gross income of the recipients thereof and exempt from
taxation, except in the event that such recipient is a Substantial
User of the Project Facility or a Related Person thereto.
Section 1.4. Authority Representations and Findings.
The Authority hereby confirms its findings and represents that:
(a) it is a public body corporate and politic
constituting an instrumentality of the State, duly organized and
existing under the laws of the State, particularly the Act. The
Authority is authorized to issue the Bonds in accordance with the
Act and to use the proceeds from the sale of the Bonds to make the
Loan to the Borrower;
(b) the Authority has complied with the provisions
of the Act and has full power and authority pursuant to the Act to
consummate all transactions contemplated by this Loan Agreement,
the Indenture, the Bonds, the Resolution, and any and all other
agreements relating thereto and to issue, sell and deliver the
Bonds as provided herein and in the Indenture;
(c) by the Resolution duly adopted by the Authority
and still in full force and effect, the Authority has duly
authorized the execution, delivery and due performance of this Loan
Agreement, the Indenture and the Bonds and the taking of any and
all actions as may be required on the date hereof on the part of
the Authority to carry out, give effect to and consummate the
transactions contemplated by this Loan Agreement and the Indenture.
All approvals of the Authority necessary in connection with the
foregoing have been received;
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(d) the Bonds have been duly authorized, executed,
issued and delivered and constitute valid and binding special and
limited obligations of the Authority, the principal of, redemption
premium, if any, and interest on which are payable solely from the
revenues and other moneys derived pursuant to this Loan Agreement
and pledged therefor by the Indenture. The Bonds shall not be in
any way a debt or liability of the State or of any political
subdivision thereof, except the Authority, and shall not create or
constitute any indebtedness, liability or obligation of the State
or of any political subdivision thereof, except the Authority,
whether legal, moral or otherwise;
(e) the execution and delivery of the Loan
Agreement and the Bonds, and compliance with the provisions hereof
and thereof, do not conflict with or constitute on the part of the
Authority a violation of the Constitution of the State or a
violation or breach of or default under its by-laws or any statute,
indenture, mortgage, deed of trust, note agreement or other
agreement or instrument to which the Authority is a party or by
which the Authority is bound or, to the knowledge of the Authority,
any order, rule or regulation of any court or governmental agency
or body having jurisdiction over the Authority or any of its
activities or properties. All consents, approvals, authorizations
and orders of governmental or regulatory authorities which are
required to be obtained by the Authority for the consummation of
the transactions contemplated hereby and thereby have been
obtained;
(f) the Authority shall apply the proceeds from the
sale of the Bonds and the revenues derived under this Loan
Agreement for the purposes specified and in the manner provided in
this Loan Agreement;
(g) to the best knowledge of the Authority, there
is no action, suit, proceeding or investigation at law or in
equity, or before or by any court, public board or body pending or
threatened against or affecting the Authority, or any basis
therefor, wherein an unfavorable decision, ruling or finding would
materially adversely affect the transactions contemplated hereby,
or which in any way would materially adversely affect the validity
of the Bonds, the Indenture, the Resolution, this Loan Agreement,
any agreement or instrument to which the Authority is a party and
which is used or contemplated for use in consummation of the
transactions contemplated hereby or the exemption from taxation as
set forth herein; and
(h) any certificate signed by an Authorized
Authority Representative and delivered to the Trustee, Bank,
Borrower, or Placement Agent shall be deemed a representation and
Page 86
warranty by the Authority to the Trustee, Bank, Borrower or
Placement Agent, as the case may be, as to the statements made
therein.
It is specifically understood and agreed that the
Authority makes no representation as to the financial position or
business condition of the Borrower and does not represent or
warrant as to any of the statements, materials (financial or
otherwise), representations or certifications furnished or to be
made and furnished by the Borrower in connection with the sale of
the Bonds, or as to the correctness, completeness or accuracy of
such statements.
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ARTICLE II
ACQUISITION OF PROJECT FACILITIES
Section 2.1. Acquisition of Project Facilities. The
Borrower used the proceeds of the Prior Bonds to finance the
Project Facilities as soon as practicable after the proceeds of the
Prior Bonds became available and that it will use its best efforts
to effectuate the redemption of the Refunded Bonds with the
proceeds of the Bonds as soon as practicable after the proceeds of
the Bonds become available.
Section 2.2. Notices and Permits. The Borrower has
given or caused to be given all notices and comply or cause
compliance with all laws, ordinances, municipal rules and
regulations and requirements of public authorities applying to or
affecting the acquisition and the conduct of the work on the
Project Facilities, and the Borrower will defend and save the
Authority, its members, officers, agents and employees, the Bank,
its officers, agents and employees, and the Trustee, its officers,
agents and employees harmless from all fines due to failure to
comply therewith. The Borrower has procured or has caused to be
procured all permits and licenses necessary for the prosecution of
the acquisition and installation of the Project Facilities.
Section 2.3. Additions and Changes to Project
Facilities. The Borrower may, at its option and at its own cost
and expense, at any time and from time to time, make such
improvements, additions, renovations and changes to the Project
Facilities as it may deem to be desirable for its uses and
purposes, provided that (i) such improvements, additions and
changes shall constitute part of the Project Facilities and be
subject to the liens and security interests created by the
Indenture and this Agreement and (ii) that the Borrower shall not
permit any alienation, removal, demolition, substitution,
improvement, alteration or deterioration of the Project Facilities
or any other act which might materially impair or reduce the
usefulness or value thereof, or the security provided under the
Indenture, without the prior written consent of the Authority and
the Bank. The Borrower shall request in writing that the Bank, in
accordance with the Reimbursement Agreement, shall execute
termination statements for any filings made to perfect the security
interests created by the Indenture and by Section 4.3 of this Loan
Agreement for any fixture or item of equipment permanently removed
from the Project Facilities by the Borrower, provided that any item
of property so removed by the Borrower shall be replaced by other
property of similar value or function.
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ARTICLE III
FINANCING OF PROJECT
Section 3.1. Issuance of Bonds. In order to finance the
Project, the Authority, upon request of the Borrower, shall issue
and sell Bonds up to the maximum aggregate principal amount not to
exceed $10,000,000. The Bonds will be issued under and secured by
the Indenture. The Borrower agrees that its interest in the
Premises and the Project Facilities and its rights hereunder are
and shall be subordinate to the rights of the Trustee under the
Indenture and the Bank under the Reimbursement Agreement, and
agrees to comply with and be bound by all of the provisions thereof
that are binding upon the Authority. The Borrower hereby agrees to
make all payments of the loan (as defined in Section 4.2 hereof)
and other amounts due hereunder to enable the Authority to make all
payments required of it under the Bonds and the Indenture. The
Bonds are special and limited obligations of the Authority, payable
from payments made under the Letter of Credit, which payments are
secured by payments made by the Borrower to the Bank pursuant to
the terms of the Reimbursement Agreement, or from other moneys
available for such purpose under the terms of the Indenture.
Neither the general credit nor the taxing power of the State or any
political subdivision thereof is pledged to the payment of the
Bonds.
Section 3.2. Acquisition Fund. The Net Proceeds of the
Bonds will be deposited with the Escrow Agent to redeem the
Refunded Bonds. Amounts received from the Borrower will be
deposited in the Acquisition Fund established under the Indenture
for payment of Costs associated with the Project upon requisition
as provided in Section 408 of the Indenture and Section 3.3 of this
Loan Agreement. The Borrower agrees that the sums requisitioned
from the Acquisition Fund will be used to pay the Costs associated
with the Project. The Borrower shall have the right to enforce
payments from the Acquisition Fund upon compliance with the
procedures set forth in this Section 3.2 and Section 3.3 herein and
Section 408 of the Indenture; provided that during the continuance
of an Event of Default as defined in the Indenture, the Acquisition
Fund shall be held for the benefit of Holders of the Bonds and the
Bank in accordance with the provisions of the Indenture and the
Loan Documents.
Section 3.3. Disbursements from the Acquisition Fund.
The Authority has, in the Indenture, irrevocably authorized and
directed the Trustee to make payments from the Acquisition Fund to
pay Costs associated with the Project as defined in the Indenture.
The Borrower may direct the Trustee to make such payments directly
to or at the direction of the Borrower without any act by the
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Authority, upon compliance by the Borrower with the requirements of
this Loan Agreement and the Indenture.
(a) The Borrower agrees as a condition precedent to
the disbursement of any portion of the Acquisition Fund to comply
with the terms of this Agreement and the Indenture and to furnish
the Trustee with a Requisition Form substantially in the form set
forth as Exhibit C annexed hereto and incorporated by this
reference herein signed by an Authorized Borrower Representative
and approved by the Bank in writing stating with respect to each
payment made: (i) the requisition number; (ii) the name and address
of the Person to whom payment is to be made by the Trustee or, if
the payment is to be made to the Borrower for a reimbursable
advance, the name and address of the Person to whom such advance
was made together with proof of payment by the Borrower; (iii) the
amount to be paid; (iv) that each obligation for which payment is
sought is a Proper Charge against the Acquisition Fund, is unpaid
or unreimbursed, and has not been the basis of any previously paid
requisition; (v) if such payment is a reimbursement to the Borrower
for costs or expenses incurred by reason of work performed or
supervised by officers or employees of the Borrower or any of its
affiliates, that the amount to be paid does not exceed the actual
cost thereof to the Borrower or any of its affiliates; (vi) that no
uncured Event of Default has occurred under this Loan Agreement or
the Indenture; and (vii) the Borrower has received no written
notice of any lien, right to lien or attachment upon, or other
claim affecting the right to receive payment of, any of the moneys
payable under such Requisition Form to any of the Persons named
therein, or if any of the foregoing has been received, it has been
released or discharged or will be released or discharged upon
payment of the Requisition Form.
Section 3.4. Establishment of Completion Date. On the
Issue Date, the Borrower shall deliver to the Authority, the Bank
and the Trustee, the Borrower's Completion Certificate, the form of
which is annexed hereto as Exhibit E and incorporated by this
reference herein, which shall evidence completion of the 1985
Project and shall be signed by an Authorized Borrower
Representative stating the date of completion of the 1985 Project
and that, as of such date: (i) the 1985 Project has been
completed; (ii) the Cost of all labor, services, materials and
supplies used in the 1985 Project have been paid; (iii) the
Machinery and Equipment necessary for the 1985 Project has been
installed to the Borrower's satisfaction; such Machinery and
Equipment so installed is suitable and sufficient for the efficient
operation of the 1985 Project for the intended purposes and all
costs and expenses incurred in the acquisition and installation of
such Machinery and Equipment have been paid; (iv) the 1985 Project
is being operated as an authorized "project" under the Act and
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substantially as proposed in the Original Application; and (v) all
permits, including a Certificate of Occupancy, necessary for the
utilization of the Premises and the Project Facilities have been
obtained and are in effect.
Section 3.5. Application of Excess Amounts in
Acquisition Fund. (a) Any amounts remaining in the Acquisition
Fund (except for amounts therein sufficient to cover costs of the
Project not then due and payable or not then paid) shall be
transferred to the Bond Fund (as that term is defined in the
Indenture) to be applied by the Trustee in the manner set forth in
Section 402 of the Indenture. The Borrower shall give the Trustee
written investment instructions with respect thereto which would
not result in such funds being invested at a Yield materially
higher than the Yield on the Bonds.
(b) If for any reason the amount in the Acquisition
Fund proves insufficient to pay all Costs of the Project, the
Borrower shall pay the remainder of such Costs.
Section 3.6. Bonds Not to Become Arbitrage Bonds. As
provided in Article VI of the Indenture, the Trustee will invest
moneys held by the Trustee as directed by the Borrower in writing.
The Borrower hereby covenants to the Authority and to the Holders
of the Bonds that, notwithstanding any other provision of this
Agreement or any other instrument, it will neither make nor
instruct the Trustee to make any investment of the Bond Proceeds
which would cause the Bonds to be arbitrage bonds under Section 148
of the Code and the Treasury Regulations promulgated thereunder,
and that it will comply with the requirements of such Section and
Treasury Regulations throughout the term of the Bonds.
Section 3.7. Restriction on Use of Acquisition Fund.
The Borrower (i) shall not use or direct the use of moneys from the
Acquisition Fund in any way, or take or omit to take any other
action, so as to cause the interest on any Bonds to become subject
to Federal income tax, and (ii) shall use all of the Net Proceeds
for Proper Charges of the Project.
Section 3.8. Three-Year Expenditure Requirement. The
Borrower covenants that, within three (3) years of the date of
original delivery and payment for the Prior Bonds, the Borrower
completed the Project Facilities and caused all of the proceeds of
the Prior Bonds to be expended for Costs of the Project Facilities.
Section 3.9. Investment Permitted. Any moneys in the
Bond Fund (as defined in the Indenture) and Acquisition Fund shall
be invested or reinvested by the Trustee upon the written request
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and direction of the Borrower in the manner provided in the Indenture.
Page 92
ARTICLE IV
THE LOAN
Section 4.1. The Loan. The Authority agrees, upon the
terms and subject to the conditions hereinafter set forth, to enter
into this Loan Agreement with the Borrower for the purpose of
undertaking the Project.
Section 4.2. Payment of Loan; Term of Agreement. (a)
The loan to be repaid by the Borrower will be an amount equal to
the principal of, redemption premium (if any) and interest on, the
Bonds (the "Loan"). The Loan shall be repayable by the Borrower in
installments which, as to amounts and due dates, correspond to the
payments of the principal or applicable redemption price of, and
interest on, the Bonds. Such installments of Loan payments shall
be made in immediately available funds and shall be reduced to the
extent that other moneys are available for such purpose in funds
available for payment by the Trustee and a credit in respect
thereof has been granted pursuant to the terms hereof or the terms
of the Indenture. Notwithstanding the preceding paragraph or any
other provision of this Loan Agreement, so long as the Letter of
Credit is in effect, all payments of principal and interest on the
Bonds shall be paid from draws by the Trustee on the Letter of
Credit in accordance with the terms of the Indenture. The
outstanding balance of the Loan shall be reduced by the amount of
any such principal payments made by the Trustee through a draw on
the Letter of Credit. The Borrower shall reimburse the Bank for
moneys drawn on the Letter of Credit in accordance with the terms
of the Reimbursement Agreement.
(b) The Loan Agreement and the respective obligations of
the parties hereto shall remain in full force and effect from the
date of execution and delivery of the Loan Agreement until (i) the
date on which the principal or redemption price of and all interest
on the Bonds and any other expenses of the Authority with respect
to the Bonds shall have been fully paid or provision for the
payment thereof shall have been made pursuant to the Indenture,
(ii) the Borrower shall have fully performed and satisfied all
other covenants, agreements and obligations under the Loan
Agreement and the Reimbursement Agreement and (iii) the Indenture
shall have been released and discharged pursuant to the Indenture,
at which time the Authority shall cancel and release the Loan
Agreement.
Section 4.3. Security; Letter of Credit. Concurrently
with the issuance by the Authority of the Bonds, (a) the Borrower
shall cause the Letter of Credit to be delivered to the Trustee as
security for and as the principal source of payment of the Bonds.
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The Borrower may also from time to time cause the delivery of an
Alternate Letter of Credit in replacement therefor, to the extent
permitted by the terms of the Indenture. So long as any Letter of
Credit is held by the Trustee, all payments of principal and
interest on the Bonds shall be funded from draws on the Letter of
Credit in accordance with Section 404 of the Indenture. The
Borrower shall pay the redemption premium due, if any, required by
an optional redemption in accordance with Section 304(c) of the
Indenture. Credits in the amounts of such draws applied to
payments of principal of or interest on the Bonds will be granted
in respect of installments of the Loan otherwise due under Section
4.2 and 4.4 hereof, to the extent the Bank is reimbursed by or on
behalf of the Borrower for such draws. The Borrower hereby grants
to the Authority a security interest in any moneys, funds or
securities held hereunder or under the Indenture. This Loan
Agreement shall constitute a security agreement for the purposes of
the Uniform Commercial Code ("UCC") as in effect in New Jersey.
Section 4.4. Acceleration of Payment to Redeem Bonds.
As permitted by the Indenture and the Reimbursement Agreement,
whenever the Bonds are subject to optional redemption pursuant to
the Indenture, the Authority will, but only upon request of the
Borrower, direct the Trustee in writing to call the same for
Redemption as provided in the Indenture. Whenever the Bonds are
subject to mandatory redemption pursuant to the Indenture, the
Borrower will cooperate with the Authority and the Trustee in
effecting such Redemption. In the event of any mandatory or
optional redemption of the Bonds, the Borrower will pay or cause to
be paid on or before the date of Redemption an amount equal to the
applicable redemption price as a prepayment of that portion of the
Loan corresponding to the Bonds to be redeemed, together with
applicable redemption premium (if any) and interest accrued to the
date of redemption or will reimburse the Bank for any drawings
under the Letter of Credit for such purposes (exclusive of the
redemption premium) in accordance with the Reimbursement Agreement.
Section 4.5. No Defense or Set-Off. The obligations of
the Borrower to make or cause to be made payments of the Loan shall
be absolute and unconditional without defense or set-off by the
Authority under this Agreement or under any other agreement between
the Borrower and the Authority or for any other reason, including
without limitation, failure of the Trustee to present a draft for a
draw on the Letter of Credit or failure of the Bank to make the
required payment pursuant to the terms of the Letter of Credit,
failure to redeem the Refunded Bonds, any acts or circumstances
that may constitute failure of consideration, destruction of or
damage to the Premises or the Project Facilities, commercial
frustration of purpose, or failure of the Authority to perform and
observe any agreement, whether express or implied, or any duty,
Page 94
liability or obligation arising out of or connected with this
Agreement, it being the intention of the parties that the payments
required of the Borrower hereunder will be paid in full when due
without any delay or diminution whatsoever. Repayments of the Loan
and additional sums required to be paid by or on behalf of the
Borrower hereunder shall be received by the Authority or the
Trustee as net sums and the Borrower agrees to pay or cause to be
paid all charges against or which might diminish such net sums.
Section 4.6. Assignment of Authority's Rights. As
security for the payment of the Bonds the Authority will assign to
the Trustee all the Authority's rights under this Agreement (except
the rights of the Authority to receive payments under Sections 5.22
and 5.23 hereof and other Reserved Rights under the Indenture).
The Authority retains the right, jointly and severally with the
Trustee and/or the Bank, to specifically enforce the provisions
contained in the Loan Documents. The Borrower consents to such
assignment and agrees to make or cause to be made payments of the
Loan under Section 4.2 hereof directly to the Bank and Section 4.4
hereof directly to the Trustee without defense or set-off by reason
of any dispute between the Borrower and the Trustee or the Bank.
Section 4.7. Opinion of Counsel for Borrower. On the
Issue Date, the Authority, the Trustee, the Bank and the Placement
Agent shall have received the opinion of Counsel for the Borrower
addressed to them and satisfactory in form and substance to Bond
Counsel, Counsel for the Trustee, Counsel for the Bank and Counsel
for the Placement Agent to the effect that, inter alia: (i) the
Loan Documents have been duly executed and delivered by the
Borrower and the Corporate Guarantor, as applicable, and constitute
the valid and binding obligations of the Borrower and the Corporate
Guarantor, as applicable, enforceable in accordance with their
respective terms, except to the extent that the enforceability of
such documents may be limited by bankruptcy, insolvency,
reorganization or other laws affecting creditors' rights generally,
and (ii) all of the Bond Proceeds will be used for Proper Charges;
and containing any other provisions deemed necessary and proper and
otherwise in form and substance satisfactory to the Bank and its
ounsel.
Section 4.8. Opinion of Bond Counsel. On the Issue
Date, the Authority, the Bank, the Placement Agent and the Trustee
shall have received the opinion of Bond Counsel to the effect that,
inter alia :
(a) interest income on the Bonds is not includable
in gross income under the Code except for those tax consequence set
forth therein;
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(b) interest income on the Bonds is not includable
as gross income under the New Jersey Gross Income Tax Act (P.L.
1976, Chapter 47);
(c) the offering of the Bonds is not required to be
registered under the Securities Act of 1933, as amended, or under
the rules and regulations promulgated thereunder; and
(d) the Bonds have been duly authorized and issued
under the provisions of the Indenture, the Resolution and the Act.
Section 4.9. Opinion of Counsel for the Trustee. On the
Issue Date, the Authority, the Bank and the Placement Agent shall
have received an opinion of Counsel for the Trustee, addressed to
them and satisfactory in form and substance to Bond Counsel stating
that the Trustee is lawfully empowered, authorized and duly
qualified to serve as Trustee and to perform the provisions of and
to accept the trusts contemplated by the Indenture, and the Trustee
has duly authorized the acceptance of the trusts contemplated by
the Indenture.
Section 4.10. Opinion of Counsel for the Bank. On the
Issue Date, the Authority, the Trustee and the Placement Agent
shall have received an opinion of Counsel for the Bank, addressed
to them and satisfactory in form and substance to Bond Counsel,
Counsel for the Trustee and Counsel for the Placement Agent stating
that the Letter of Credit has been duly authorized and delivered
and constitutes a valid and binding obligation of the Bank.
Section 4.11. Opinion of Counsel for the Escrow Agent.
On the Issue Date, the Authority, the Trustee, the Bank and the
Placement Agent shall have received an opinion of counsel for the
Escrow Agent, addressed to them and satisfactory in form and
substance to Bond Counsel and Counsels for the Trustee and
Placement Agent stating that the Escrow Agent is lawfully
empowered, authorized and duly qualified to serve as Escrow Agent
and to perform the provisions of and to accept the trusts
contemplated by the escrow deposit agreement, and the Escrow Agent
has duly authorized the acceptance of the trusts contemplated by
the escrow deposit agreement.
Section 4.12. Loan and Other Documents. On the Issue
Date, the Authority, the Bank and the Trustee shall have also
received:
(a) the Loan Documents duly executed by the
respective parties thereto;
(b) the Letter of Credit and Reimbursement
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Agreement providing for the terms of repayment of all draws under
the Letter of Credit duly executed by the Borrower;
(c) a certificate in form and substance
satisfactory to the Authority and the Bank, to the effect that the
Project Facilities are not within a special flood hazard area, as
described in the Flood Disaster Protection Act of 1973 and the
National Flood Insurance Act of 1968, or a certification from the
Project Municipality to that effect. Should the Project Facilities
be located in a special flood hazard area as designated by the
Secretary of Housing and Urban Development, the Borrower shall
furnish the Bank with a flood insurance policy in the lesser of (i)
the amount of the Letter of Credit or (ii) the maximum amount
obtainable under the National Flood Insurance Act, naming the
Authority and the Bank as insureds, together with a receipted xxxx
for the premium. Thereafter, the Borrower shall furnish the Bank
with a renewal flood insurance policy on the anniversary date of
such policy;
(d) secretary's certificates of the Borrower and
Corporate Guarantor, to which are attached certified true copies of
(w) the articles of incorporation of the Borrower and Corporate
Guarantor and all amendments thereto, certified by the Secretary of
State of the state of their incorporation, (x) the By-Laws of the
Borrower and Corporate Guarantor and all amendments thereto, (y)
appropriate resolutions and shareholder consents of the Borrower
and Corporate Guarantor authorizing the transactions contemplated
by this Loan Agreement and (z) incumbency certificates as to
officers, and any amendments thereto;
(e) a good standing certificate issued by the
appropriate official of the state in which the Borrower and
Corporate Guarantor are incorporated, which identifies all the
dates on which the Borrower's and Corporate Guarantor's articles of
incorporation and amendments thereto were filed; and a good
standing certificate issued by the appropriate official of those
states in which the Borrower and Corporate Guarantor are qualified
as foreign corporations, and in which such qualification is
material to the conduct of their respective businesses;
(f) evidence that the security interest to be
granted to the Bank in the personal property of the Borrower
constitutes a first-priority lien and security interest, including,
without limitation, any appropriate State and county UCC searches,
judgment searches and tax liens searches against the Borrower and
Corporate Guarantor;
(g) evidence that all applicable consents,
licenses, permits and approvals for the use and occupancy of the
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Premises and Project Facilities have been obtained from all
governmental agencies or public utility companies having
jurisdiction with respect thereto including, to the extent
applicable, but not limited to: all environmental approvals
(including, without limitation, written evidence of the State
Department of Environmental Protection certifying as to the proper
authorized closure and/or removal of underground storage tanks);
approvals for sewer, water, gas, electric and other utilities; a
final certificate of occupancy; all zoning, site plan and/or
subdivision approvals. All of such approvals and permits shall be
legally valid and shall remain in full force and effect throughout
the term of the Letter of Credit. In the event that any of such
approvals is invalidated, rescinded or suspended by any
governmental agencies or court of competent jurisdiction, the Bank
shall not be obligated to issue the Letter of Credit;
(h) if the Premises were acquired by the Borrower
on or after January 1, 1984, evidence from the Borrower or
Corporate Guarantor as to compliance with or non-applicability of
the Environmental Cleanup Responsibility Act (now known as the
Industrial Site Recovery Act) including an Affidavit of Borrower or
Corporate Guarantor to the State Department of Environmental
Protection supporting such nonapplicability letter;
(i) all fees required to be paid to the Bank and
the Trustee under any of the Loan Documents;
(j) the fees and disbursements of Counsel for the
Bank;
(k) the title insurance binder (the "Binder")
committing to insure the Mortgage in an amount up to the amount of
the Letter of Credit, excepting all the Permitted Encumbrances, if
any, issued by a company licensed by the State, in form, substance
and amounts satisfactory to the Bank, naming the Authority, the
Trustee and the Bank, as additional insureds, together with proof
of full payment of all fees and premiums for said Binder. Within
thirty (30) days after the Issue Date, the Borrower shall furnish
the Trustee and the Bank or cause the Trustee and the Bank to be
furnished with a Title Insurance Policy insuring the aforesaid
first lien interest referenced in (l) below;
(l) ALTA (as hereinafter defined) Standard title
policy on the form currently in use in the State at the time of the
issuance of the Letter of Credit in the amount of the Letter of
Credit, reinsuring with direct access agreements and/or co-insured
in amounts and with title insurance companies reasonably acceptable
to the Bank, insuring that the Mortgage is a valid first lien
mortgage on the Premises, subject only to those exceptions, whether
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of record or otherwise that have been previously approved by the
Bank;
(m) a current boundary and location survey of the
Premises acceptable to the Bank, its counsel and the title insurer,
prepared by a licensed New Jersey surveyor acceptable to the Bank,
its counsel and the title insurer, which survey shall be prepared
in accordance with the requirements set forth by the Bank and shall
be certified to the Bank and the title insurer;
(n) a Guaranty Agreement from the Corporate
Guarantor providing for the unconditional irrevocable guaranty of
the obligations of the Borrower under the Loan Documents, which
Guaranty Agreement shall contain substantially the same financial
and other covenants as exist in the revolving credit agreement
between the Borrower and National City Bank as presently in effect,
which covenants may be modified from time to time with the prior
written consent of the Bank in accordance with the terms of the
Reimbursement Agreement;
(o) subject to the defeasance of the Prior Bonds
and the release of all liens created under the Prior Indenture
associated therewith, a mortgage and security agreement
constituting a valid first lien on the Premises including, but not
limited to all real estate fixtures located and attached to the
Premises, as security for the obligations of the Borrower under the
Letter of Credit;
(p) subject to the defeasance of the Prior Bonds
and the release of all liens created under the Prior Indenture
associated therewith, a security interest creating a valid first
priority interest on the Machinery and Equipment;
(q) Financing Statements as may be deemed
reasonably necessary by the Bank or its counsel so as to perfect a
valid first priority lien in favor of the Bank with regard to all
personalty, furniture, furnishings, fixtures, building materials
and equipment owned by the Borrower now or hereinafter located at
or affixed to the Premises and the Machinery and Equipment;
(r) an Assignment of Leases providing for the
assignment by the Borrower to the Bank of all its right, title and
interest in and to any leases, tenancy agreements or any other
rental arrangements with respect to the Premises or Project
Facilities;
(s) true copies of insurance policies and
certificates of insurance in form and substance acceptable to the
Trustee and the Bank evidencing the insurance coverage on the
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Premises and Project Facilities as required by the Loan Agreement
and Reimbursement Agreement and appropriate liability coverage and
hazard insurance on land improvements, buildings and the Machinery
and Equipment naming the Trustee and the Bank, as applicable, loss
payees, mortgagee, and an additional insured together with proof of
payment of the first year's premiums;
(t) a Hazardous Substances Certificate and
Indemnity Agreement pursuant to which the Borrower and the
Corporate Guarantor agree to indemnify the Bank for any and all
environmental liability which the Bank may incur by virtue of
issuing the Letter of Credit;
(u) a written certification of an architect or
engineer selected by the Bank stating that the Project Facilities
located at the Premises (i) are structurally sound, (ii) show no
signs of structural distress, and (iii) have a remaining life span
for current or proposed usage well in excess of the term of the
Letter of Credit. All deficiencies which said architect or
engineer may deem to be material shall be corrected by the
Borrower, at its own cost and expense, prior to closing to the
satisfaction of the Bank and said architect/engineer. The cost of
such inspection report shall be borne by the Borrower;
(v) a capital expenditures certificate, in form and
substance satisfactory to Bond Counsel, setting forth the amounts
of all expenditures described in Section 1.3(z). One such
certificate shall be delivered for the Borrower and each Principal
User;
(w) the Tax Certificate, in form and substance
satisfactory to Bond Counsel;
(x) a Secondary Market Disclosure Certificate
evidencing the Borrower's and the Corporate Guarantor's
certification to comply with the provisions of Rule 15c2-12(b)(5)
of the Securities and Exchange Commission as long as this Loan
Agreement is in effect and the Bonds remain Outstanding; and
(y) and any and all other documents which may be
reasonably required by the Authority and the Bank or as set forth
in Section 4.1 of the Reimbursement Agreement.
Section 4.13. Conditions Subsequent; Defeasance of Prior
Bonds. Upon the redemption of the Refunded Bonds, the defeasance
of the Prior Bonds and the release and discharge of all liens under
the Prior Indenture associated therewith pursuant to and in
accordance with the provisions of Section 9.1 of the Prior
Indenture, the Borrower shall provide written documentation of the
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cancellation, discharge and release of all liens and security
interests granted to the Authority and the Prior Trustee and
securing the Prior Bonds and the proper recordation of the
documents pursuant to which such liens have been satisfied and
released. The Borrower, the Prior Trustee and the Authority shall
execute and deliver to the Bank copies of such instruments as shall
be required to evidence the discharge and satisfaction of such
liens and security interests.
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ARTICLE V
COVENANTS OF BORROWER
The Borrower covenants and agrees, so long as this
Agreement shall remain in effect, as follows:
Section 5.1. Financial Statements.
(a) Annual Report: as soon as available and in any
event within 105 days after the end of each fiscal year, the
Borrower will submit or cause to be submitted annual audited
consolidated financial statements for the Corporate Guarantor and
its consolidated subsidiaries (including the Borrower) to the
Trustee during the term of this Agreement and to the Bank during
the term of the Letter of Credit including therein the balance
sheet of the Corporate Guarantor and its consolidated subsidiaries
as of the end of such fiscal year and the statements of operations
of the Corporate Guarantor and its consolidated subsidiaries for
such fiscal year, setting forth in comparative form the
corresponding figures for the preceding fiscal year, prepared in
accordance with GAAP consistently applied, all in reasonable detail
and in each case duly certified by independent certified public
accountants of recognized standing acceptable to the Bank, and
bythe chief financial or chief accounting officer of the Corporate
Guarantor, together with a certificate of said accounting firm
stating that, in the statements of the Corporate Guarantor and its
consolidated subsidiaries (including the Borrower) for such fiscal
year, it did not discover that an Event of Default (or an event
which, with notice or the lapse of time or both, would constitute
an Event of Default) had occurred at any time during such fiscal
year, or, if an Event of Default (or such other event) did occur,
the nature thereof; and (iii) a certificate of the chief financial
or chief accounting officer of the Borrower and Corporate Guarantor
stating that such officer does not have any knowledge that an Event
of Default (or an event which, with notice or the lapse of time or
both, would constitute an Event of Default) exists, a statement of
the nature thereof and the actions which the Borrower and Corporate
Guarantor propose to take with respect thereto.
(b) Quarterly Report: as soon as available and in
any event within sixty (60) days after the end of each of the first
three (3) quarters of each fiscal year of the Corporate Guarantor
and its consolidated subsidiaries (including the Borrower), the
Borrower shall submit or cause to be submitted by the Corporate
Guarantor, during the term of the Letter of Credit, management
prepared consolidated financial statements, including a balance
sheet, income statement and cash flow statement prepared in
accordance with GAAP, in form and substance satisfactory to the
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Bank for the period commencing at the end of the previous fiscal
year and ending with the end of such quarter, to the Trustee during
the term of this Agreement and to the Bank during the term of the
Letter of Credit.
(c) The Borrower shall submit or cause to be
submitted by the Corporate Guarantor to the Bank within 105 days
after the end of the Fiscal Year annual management letters of the
Borrower or Corporate Guarantor from the independent certified
public accountants of the Corporate Guarantor.
(d) At the times referred to above, the Borrower
shall submit or cause to be submitted by the Corporate Guarantor to
the Trustee and the Bank "no default" certificates showing the
calculations evidencing compliance with the financial covenants
contained in the Reimbursement Agreement and executed by an
Authorized Borrower Representative showing that the Borrower and
Corporate Guarantor are in compliance with all covenants and
agreements in this Loan Agreement.
(e) SEC Reports. Promptly after sending or filing,
the Borrower shall submit or cause to be submitted by the Corporate
Guarantor, copies of all proxy statements, financial statements and
other notices and reports to the Trustee and the Bank when the
Corporate Guarantor sends to its shareholders as well as copies of
all regular, annual, periodic and special reports and all
Registration Statements filed with the Securities and Exchange
Commission or similar government authority or with any national
security exchange succeeding to the functions of the Securities and
Exchange Commission (other than those on Form S-8), including,
without limitation, Forms 10Q and 10K.
Section 5.2. Preservation of Corporate Existence and
Qualification. The Borrower shall preserve and maintain its
corporate existence, rights, franchises and privileges in its
jurisdiction of incorporation, qualify and remain qualified as a
foreign corporation in each jurisdiction in which such
qualification is material to the conduct of its business in view of
its activities and operations and the ownership or lease of its
properties, and comply with all provisions of its Certificate of
Incorporation and By-Laws.
Section 5.3. Keeping of Records and Books of Account.
The Borrower shall keep adequate records and books of account
reflecting all of its financial transactions regarding the Project
Facilities.
Section 5.4. Maintenance of Properties. The Borrower
shall maintain and preserve all of its properties, necessary or
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useful in the proper conduct of its activities, in good working
order and condition, ordinary wear and tear excepted and from time
to time will make or will cause to be made, all needed and proper
repairs, renewals, replacements, betterments and improvements
thereto.
Section 5.5. Maintenance of Licenses. The Borrower
shall maintain and keep in effect licensing, know-how and similar
agreements necessary in the proper conduct of its activities.
Section 5.6. Further Assurances. The Borrower shall
do, execute, acknowledge and deliver or cause to be done, executed,
acknowledged and delivered all such further instruments, acts,
deeds, and assurances as may be reasonably requested by the Bank
and the Authority for the purpose of carrying out the provisions
and intent of the Reimbursement Agreement, this Loan Agreement and
any of the Loan Documents.
Section 5.7. Maintenance of Insurance.
(a) The Borrower agrees to insure the Project
Facility and Collateral or cause such to be insured with insurance
companies licensed to do business in the State, in such amounts as
indicated herein or in such amounts, manner and against such loss,
damage and liability (including liability to third parties), as is
customary with companies in the same or similar business and
located in the same or similar areas, and to pay the premiums
thereon. The form and amount of each insurance policy issued
pursuant to this Section 5.7 shall be satisfactory to the Authority
and the Bank.
(b) Each insurance policy issued pursuant to this
Section 5.7 shall name the Borrower, the Trustee and the Bank as
insureds, as applicable, as their interests may appear.
(c) Such insurance coverage shall include:
(i) mortgage title insurance in an amount
not less than the stated amount of the Letter of
Credit insuring that title to the Premises is
marketable and insurable at regular rates, with no
exceptions other than those approved by the Bank and
Counsel for the Bank and that the Mortgage is a
valid first mortgage lien. Such policy shall be
issued by a title insurance company acceptable to
the Bank and in a form approved by the American Land
Title Association ("ALTA"), subject to the approval
of the Bank and shall include affirmative coverage
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against all future liens which might take priority
over the Mortgage; and
(ii) fire, hazard and "All-Risk"
insurance, including extended coverage for flood and
earthquake, together with vandalism, malicious
mischief and Replacement Cost endorsements
(non-reporting form), covering the Project
Facilities which shall be in an amount not less than
100% of the agreed upon fully insurable replacement
value of the Project Facilities on a completed value
basis by an insurer satisfactory to the Bank, so
written and endorsed as to make losses, if any,
payable to the Bank as Mortgagee and/or Lender/Loss
Payee, as applicable; and
(iii) flood insurance, as described in
Section 4.11(c), if the Project Facility is located
in an area designated by the United States
Department of Housing and Urban Development as being
subject to a special flood hazard in the maximum
amount of flood insurance available through the
Federal Flood Insurance Program for the improvements
located on the Premises, naming the Bank as the
mortgagee and/or Lender/Loss Payee; and
(iv) comprehensive general public
liability insurance, including XCU coverage, Broad
Form Endorsement, protective liability coverage on
operations of independent contractors engaged in
construction, blanket contractual liability
insurance, completed operations and products
liability coverage against any and all liability of
the Borrower or claims of liability of the Borrower
arising out of, occasioned by or resulting from any
bodily injury, death, personal injury and property
damage liability with limits of liability in minimum
amounts of $1,000,000 per person per occurrence,
$3,000,000 aggregate per occurrence and $1,000,000
aggregate property damage; and
(v) Excess/Umbrella Liability Insurance
on a "follow form" basis with a minimum limit of
liability of $10,000,000 for the Premises.
(d) The insurance policies or endorsements shall
cover the entire Project Facilities and shall provide that the
coverage will not be reduced, canceled or not renewed without
thirty (30) days prior written notice to the Bank. The Borrower
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shall provide the Authority and the Bank with certificates from the
insurers at closing, and evidence of renewal or replacement of
policies required to be maintained by this Section shall be
provided to the Bank and the Trustee on behalf of the Authority at
least ten (10) days prior to the expiration of any such policy.
The Borrower may furnish, instead of original or duplicate
policies, certificates of blanket coverage provided the Project
Facilities are identified and specifically allocated amounts are
shown.
Section 5.8. Payment of Taxes, etc. The Borrower will
promptly pay and discharge or cause to be promptly paid and
discharged all taxes, assessments and governmental charges or
levies imposed upon it or in respect of any of its property and
assets before the same shall become in default, as well as all
lawful claims which, if unpaid, might become a lien or charge upon
such property and assets or any part thereof, except such that are
contested in good faith by the Borrower with diligence and
continuity by appropriate proceedings for which the Borrower has
maintained adequate reserves satisfactory to the Bank.
Section 5.9. Concerning the Project Facility. The
Borrower shall operate or cause the Project Facility to be operated
as an authorized project for a purpose and use as provided for
under the Act until the expiration or earlier termination of this
Loan Agreement. The Project Facility is of a character included
within the definition of "project" in the Act, and its estimated
cost was $20,000,000. The Borrower operates the Project Facility
substantially in the form represented in the Original Application
and will neither (a) materially alter the operation of the Project
Facility without the prior written consent of the Authority and the
Bank, nor (b) cause a change in the use of the Project Facility
such that the Bonds would cease to be qualified small issue bonds
(within the meaning of Section 144(a) of the Code).
Section 5.10. Compliance with Code and Treasury
Regulations. (a) The Borrower shall at all times do and perform
all acts and things necessary or desirable in order to assure that
interest paid on the Bonds shall, for the purposes of Federal
income taxation, be excludable from the gross income of the
recipients thereof and exempt from such taxation, except in the
event that such recipient is a Substantial User or Related Person
to a Substantial User.
For purposes of this Section, any and all actions of any
Principal User of the Project Facilities or any Related Person to
any such Principal User shall be deemed to be actions of the
Borrower. In addition, any and all actions to be undertaken by the
Borrower or by any other Person as to which the Authority must,
Page 106
pursuant to the terms hereof, consent or approve in advance, shall
be deemed to be the actions of the Borrower or such other Person
(and not the actions of the Authority).
(b) The Borrower shall not permit at any time or
times any of the Gross Proceeds to be used, directly or indirectly,
to acquire any Investment Property (within the meaning of Section
148(b)(2) of the Code) the acquisition of which would cause the
Bonds to be "arbitrage bonds" for the purposes of Section 148 of
the Code. The Borrower shall utilize the Bond Proceeds so as to
satisfy the reasonable expectations of the Borrower set forth in
the Tax Certificate delivered as part of the Record of Proceedings.
The Borrower further agrees to comply with the provisions of 603(d)
of the Indenture.
(c) The Borrower shall use the Bond Proceeds for
the Project in the manner and as specifically set forth in the Tax
Certificate furnished to Bond Counsel and the Authority. The
Borrower shall not expend the Bond Proceeds on assets other than
those listed in the Tax Certificate without the express written
consent of Bond Counsel.
(d) In the event the Borrower does not spend the
Gross Proceeds of the Bonds or any other Gross Proceeds within the
six (6) month period after the date of issuance, the Borrower shall
direct the Trustee in writing to rebate to the United States on
behalf of the Authority (i) the excess of (A) the aggregate amount
earned on all Non-Purpose Investments in which Gross Proceeds are
invested (other than (i) investments attributable to an excess
described herein and (ii) the amount earned on a bona fide Debt
Service fund and amounts earned on such amounts, if allocated to
the bona fide Debt Service fund in each Bond Year, but only if the
gross earnings on such fund for such Bond Year are less than
$100,000), over (B) the amount which would have been earned if all
Non-Purpose Obligations (valued at fair market value at the time
the investment becomes a Non-Purpose Investment) had been invested
at a Yield equal to the Yield on the Bonds, plus (ii) any income
attributable to the excess described in clause (i) above. Each
year, on the anniversary date of the issuance of the Bonds, the
Borrower shall determine the amount of the rebate due to the United
States on behalf of the Authority and shall promptly pay such
amount to the Trustee for deposit in the Rebate Fund.
For each investment of Gross Proceeds in a Non-Purpose
Investment, the Borrower shall direct the Trustee to record the
following information which shall be provided by the Borrower to
the Trustee: purchase date, purchase price, fair market value,
face amount, stated interest rate, any accrued interest due on its
purchase date, frequency of interest payments, disposition date,
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disposition price, any accrued interest due on the disposition date
and Yield to maturity as calculated by the Borrower. The Yield to
Maturity for an Investment presently means that discount rate,
based on a compounding frequency the same as the Bonds' (or such
other compounding permitted by the Code), which when used to
determine the present value, on the purchase date of such
investment or the date on which the investment becomes a
Non-Purpose Investment, whichever is later, of all payments of
principal and interest on such investment gives an amount equal to
the fair market value of such investment including accrued interest
due on such date. Any moneys held by the Trustee in its capacity
as Trustee (other than moneys held in the Letter of Credit Account
of the Bond Fund) shall be invested and reinvested by the Trustee
solely as directed in writing by the Borrower in accordance with
the provisions of the Indenture. The Trustee may make any and all
such investments through its own investment department. In making
investments, the Trustee shall rely upon written direction of
Borrower and is hereby relieved of any and all liability with
respect to making, redeeming and selling such investments in
accordance with the directions of the Borrower.
The rebate shall be paid in installments which shall be
made at least once every five (5) years from the date of issuance
of the Bonds. The first such installment shall be due to the
United States on behalf of the Authority not later than sixty (60)
days after the end of the fifth (5th) year following the date of
issuance of the Bonds and shall be in an amount which ensures that
at least ninety percent (90%) of the amount described above with
respect to the Bonds is paid. Each subsequent payment shall be
made not later than five (5) years after the date the preceding
payment was due. Within sixty (60) days after the retirement of
the Bonds, the Borrower shall direct the Trustee in writing to pay
to the United States on behalf of the Authority one hundred percent
(100%) of the aggregate amount due with respect to the Bonds not
theretofore paid.
At the (i) maturity of the Bonds, (ii) if the Bonds are
redeemed prior to maturity, the date on which the Bonds are
redeemed, (iii) each year, on the anniversary date of the issuance
of the Bonds, and (iv) any other date that may be required by the
Code (the "Computation Date"), the Borrower shall determine the
amount of the rebate payable to the United States on behalf of the
Authority and shall promptly deliver written notice of such amount
and the detailed basis of calculation therefor to the Authority and
the Trustee. On each Computation Date, if such amount of rebate
payable exceeds the amount then on deposit in the Rebate Fund such
amount of rebate payable shall be transferred by the Trustee at the
written direction of the Borrower from the Bond Fund to the Rebate
Fund until such amount is paid as a rebate to the United States.
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If there is not a sufficient amount in the Bond Fund for such
transfer, the Borrower shall promptly pay to the Trustee, from
other sources, the amount necessary to make up such deficiency.
Any determination of the rebate amounts or transfers required by
this Section 5.10 shall be the sole responsibility of the Borrower
and the Trustee shall be entitled to rely upon any such
determination.
Except as may be permitted pursuant to Section 148(c) of
the Code (relating to certain temporary periods for investment), at
no time during the term of the Bonds shall the amount invested by
the Borrower in Non-Purpose Obligations with a Yield higher than
the Yield on the Bonds exceed 150% of the Debt Service on the Bonds
for the Bond Year. The aggregate amount invested in Non-Purpose
Obligations shall be promptly and appropriately reduced as the
outstanding principal of the Bonds is reduced.
Section 5.11. Compliance with Applicable Laws. The
Borrower shall operate and maintain the Project Facilities in
accordance with all applicable Federal, State, county and municipal
laws, ordinances, rules and regulations now in force or that may be
enacted hereafter including, but not limited to ERISA, the
Americans with Disabilities Act and Applicable Environmental Laws,
workers' compensation, sanitary, safety, non-discrimination and
zoning laws, ordinances, rules and regulations as shall be binding
upon the Borrower and which might adversely affect its activities
or financial condition.
Section 5.12. Environmental Covenant. The Borrower
shall not permit any action to occur which would be in direct
violation of any and all applicable Federal, State, county and
municipal laws, ordinances, rules and regulations now in force or
hereinafter enacted, including Applicable Environmental Laws, the
regulations of the Authority and the regulations of the Department
of Environmental Protection.
The Borrower shall give immediate written notice, in the
manner provided in Section 7.17 hereof, to the Authority, the Bank,
and the Trustee of any inquiry, notices of investigation or any
similar communication from the Department of Environmental
Protection and the United States Department of Environmental
Protection regarding violation of any Applicable Environmental
Laws.
Section 5.13. Mergers, etc. (a) The Borrower will not
merge into or consolidate with or into, or sell, assign, lease or
otherwise dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to any Person without the prior
Page 109
express written consent of the Authority and the Bank and in
accordance with the following:
(b) If at any time during the period the Bonds are
outstanding, the Borrower, any Principal User of the Project
Facility or any Related Person thereto proposes (i) to merge or
consolidate with any person, firm or corporation owning or
occupying facilities located wholly or partly within the Project
Municipality, or (ii) to gain control of any such person, firm or
corporation, or (iii) to acquire a greater than fifty percent (50%)
ownership interest of any such person, firm or corporation (whether
by ownership of stock or otherwise), or (iv) to assume or guarantee
liabilities incurred in connection with any facility located wholly
or partly within the Project Municipality owned or occupied by any
such person, firm or corporation, or (v) to enter into any exchange
of property for stock or stock for property pursuant to a plan of
reorganization with any such person, firm or corporation, or (vi)
to enter into any transaction with any such person, firm or
corporation the result of which shall be to cause such person, firm
or corporation to become a Principal User of the Project Facility
or a Related Person to the Borrower or any such Principal User, the
Borrower shall, prior to the taking of any of the foregoing
proposed actions, deliver to the Authority and the Bank, and upon
request thereof, any Holder of any Bond an opinion of nationally
recognized bond counsel to the effect that the proposed action will
not violate the provisions of Sections 5.13 and 5.18 hereof nor in
any way cause the interest on the Bonds to become includable in the
gross income of the Holders of the Bonds for Federal income tax
purposes except in the event such holder is a Substantial User or a
Related Person thereto; and provided further that, (vii) the
Borrower causes the proposed surviving, resulting or transferee
company to furnish the Authority with a Change of Ownership
Information Form; (viii) the net worth of the surviving, resulting
or transferee company following the merger, consolidation or
transfer is equal to or greater than the net worth of the Borrower
immediately preceding the merger, consolidation or transfer; (ix)
any litigation or investigations in which the surviving, resulting
or transferee company or its officers and directors are involved,
and any court, administrative or other orders to which the
surviving, resulting or transferee company or its officers and
directors are subject, relate to matters arising in the ordinary
course of business; (x) the surviving, resulting or transferee
company assumes in writing the obligations of the Borrower under
this Agreement and the Reimbursement Agreement; and (xi) after the
merger, consolidation or transfer, the Project Facility shall be
operated as an authorized project under the Act. [Notwithstanding
anything else to the contrary herein, the Borrower shall still be
required to obtain the written consent of the Bank prior to the
effectiveness of any transaction enumerated herein and the
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satisfaction by the Borrower of the conditions set forth above
shall in no way be deemed to constitute the consent of the Bank.]
(c) The Borrower shall, during the period
commencing on the Issue Date of the Bonds and continuing for three
(3) years thereafter, maintain or cause to be maintained separate
books and records with respect to the Project Facilities and any
and all other facilities located wholly or partly within the
Project Facility Municipality of which the Borrower, any Principal
User of the Project Facilities or any Related Person thereto is a
Principal User, which books and records shall be sufficient to
indicate the nature of any and all capital expenditures with
respect to the Project Facilities and such other facilities.
(d) The Borrower shall cause any Principal User of
the Project Facilities and any Related Person thereto to comply
with all of the provisions of this Section as to its own operations
or space at the Project site or in the Project Municipality.
(e) The Authority has elected that the provisions
of Section 144(a)(4) of the Code shall be applicable with respect
to the Bonds. In order to effectuate and to continue such election
in full force and effect so long as the Bonds shall remain
outstanding, the Borrower agrees to take such actions as may from
time to time be required by applicable law or regulation in
connection therewith.
Section 5.14. Lease or Transfer of Project Facilities.
The Borrower shall not lease, sublease, sell or otherwise dispose
of any possessory interest in whole or part of the Project
Facilities without the prior express written consent of the
Authority and the Bank. In the event that the Borrower leases or
subleases the Project Facilities or any portion thereof, the
Borrower and the proposed lessee shall submit to the Authority and
the Bank an application for project occupants in the form currently
in use by the Authority and a copy of the lease. Leasing,
subleasing or an assignment of leases that would affect the
excludability of interest paid on the Bonds from Federal gross
income taxation under the Code or that would impair the ability of
the Borrower to operate or cause the Project Facilities to be
operated as an authorized project under the Act, shall not be
permitted. The Authority may review the proposed lease and
application to determine if it tends to further the public purposes
for which the Authority was created, and if the Authority
determines that the lease would not promote these purposes, it may
disapprove the proposed lease.
In making the determination described above, the
Authority may consider, among other criteria, (i) if the proposed
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occupancy complies with the conditions specified in the Act for the
Authority's assistance to "projects" as defined in the Act; (ii) if
the proposed occupancy is consistent with the provisions respecting
tax-exempt qualified small issue bond financings set forth in
Section 144 of the Code; and (iii) if the proposed lease will
result in the loss of employment for a substantial number of New
Jersey workers by reason of relocating the business of the lessee
from one part of the State to another or for any other reason.
If the Authority fails to deliver notice of either
approval or disapproval of a proposed lease within twenty (20) days
from the day the Authority receives a proposed lease, including all
of the information identified above and such other information as
the Authority may reasonably require, the proposed lease shall be
deemed to be approved by the Authority; provided further that the
Borrower shall still be required to obtain the affirmative consent
of the Bank. The Borrower shall promptly send a copy of each
executed lease to the Authority and the Bank.
Section 5.15. Inspection of the Project Facility. The
Borrower agrees that the Authority and the Bank, and their duly
authorized agents or representatives shall have the right, at all
reasonable times and upon prior reasonable notice, to enter upon
and to examine and inspect the Project Facility. The Authority,
the Trustee and the Bank, and their respective officers and agents
shall also be permitted, at all reasonable times and upon prior
notice, to examine the books and records of the Borrower with
respect to the Project Facility, to discuss its affairs, finances
and accounts with any of its officers or directors and to make
copies or abstracts thereof.
Section 5.16. Relocation of the Project Facilities. The
Borrower covenants and agrees that during the term of this Loan
Agreement it will not relocate the Project Facility or a
substantial number of its employees to another location either
within or without the State without first obtaining the prior
express written consent of the Authority and the Bank.
Section 5.17. Annual Certificate. On each anniversary
date of the Loan, the Borrower shall furnish to the Authority, the
Bank, and the Trustee the following:
(a) A certificate indicating whether or not the
Borrower is aware of any condition, event or act which constitutes
an Event of Default, or which would constitute an Event of Default
with the giving of notice or the passage of time, or both, under
any of the Loan Documents.
Page 112
(b) A written description of the present use of the
Project Facilities, including a report from every entity that
leases or occupies space at the Project Facilities and the number
of persons employed by the lessee, as applicable, and a description
of any anticipated material change in the use of the Project
Facilities or in the number of employees employed at the Project
Facilities.
(c) The Borrower shall also furnish to the
Authority upon request, which request shall not be made more
frequently than once a year, an employment report on a form to be
supplied by the Authority.
Section 5.18. Aggregate Limit. The Borrower shall not
allow the aggregate face amount of any outstanding issue or issues
of tax-exempt facility-related bonds within the meaning of Section
144(a)(10)(B) of the Code (including the face amount of the Bonds)
allocable to any Test-Period Beneficiary (not including as
outstanding any issue which is to be redeemed from the Net Proceeds
of any such issue) to exceed $40,000,000.
Section 5.19. Brokerage Fee. The Authority and the
Bank shall not be liable to the Borrower for any brokerage fee,
finders fee, or loan servicing fee and the Borrower shall hold the
Authority harmless from any such fees or claims.
Section 5.20. Intentionally Omitted.
Section 5.21. Payment of Compensation and Expenses of
Trustee and Placement Agent. Except to the extent payment is
otherwise provided from the Acquisition Fund, the Borrower will pay
the Trustee's (and any other paying agent's or authenticating
agent's) reasonable compensation and expenses under the Indenture,
including, but not limited to, reasonable attorneys' fees and all
costs of redeeming Bonds thereunder. The Borrower will also pay
the reasonable compensation of the Placement Agent for the
performance of its duties and services under the Placement
Agreement.
Section 5.22. Payment of Authority's Fees and Expenses.
Except to the extent payment is provided from the Acquisition Fund,
the Borrower will pay the Authority's standard administration fee
and all reasonable expenses (other than day-to-day operating
expenses of the Authority), including legal fees, incurred by the
Authority in connection with the issuance of the Bonds and the
performance by the Authority of its functions and duties under this
Agreement and the Indenture. The Authority's standard
administration fees in respect of this Agreement is $25,000 payable
upon the execution and delivery of this Agreement.
Page 113
Section 5.23. Indemnity Against Claims. In the exercise
of the powers of the Authority, the Bank, or the Trustee hereunder,
including (without limiting the foregoing) the application of
moneys, the investment of funds and disposition of the Project
Facilities upon the occurrence of an Event of Default, neither the
Authority, the Bank, the Trustee nor their members, directors,
officers, employees or agents shall be accountable to the Borrower
for any action taken or omitted by any of them in good faith and
with the belief that it is authorized or within the discretion or
rights or powers conferred hereunder or under the Indenture. The
Authority, the Bank, the Trustee and their members, directors,
officers, employees and agents shall be protected in acting upon
any paper or document believed to be genuine, and any of them may
conclusively rely upon the advice of counsel and may (but need not)
require further evidence of any fact or matter before taking any
action. No recourse shall be had by the Borrower for any claims
based hereon or on the Indenture against any member, director,
officer, employee or agent of the Authority, the Bank, or the
Trustee alleging personal liability on the part of such person
unless such claims are based upon the bad faith, fraud, deceit,
gross negligence or willful misconduct of such person. As such,
the Borrower shall indemnify and hold harmless the Authority, any
person who "controls" the Authority within the meaning of Section
15 of the Securities Act of 1933, as amended, the Bank, the Trustee
and each member, director, officer, employee, attorney and agent of
the Authority, the Bank or the Trustee (collectively the
"Indemnified Parties") against any and all claims, losses, damages
or liabilities, joint and several, to which the Indemnified Parties
become subject, insofar as such losses, claims, damages or
liabilities (including all costs, expenses and reasonable counsel
fees incurred in investigating or defending such claim) (or actions
in respect thereof) suffered by any of the Indemnified Parties
caused by, relating to, arising directly or indirectly out of,
resulting from or in any way connected to the Project Facility or
the Project or are based upon any other act or omission in
connection with (a) the condition, use, possession, conduct,
management, planning, design, acquisition, construction,
installation, financing or sale of the Project Facility or any part
thereof; or (b) any untrue statement of a material fact contained
in information submitted or to be submitted to the Indemnified
Parties by the Borrower with respect to the transactions
contemplated hereby; or (c) any omission of a material fact
necessary to be stated therein in order to make such statement to
the Indemnified Parties not misleading or incomplete unless the
losses, damages or liabilities arise from the gross negligence or
willful misconduct of the person to be indemnified. In the event
any claim is made or action brought against an Indemnified Party,
except for claims or actions brought which arise from the gross
negligence or willful misconduct of any such person, the
Page 114
Indemnified Party may direct the Borrower to assume the defense of
the claim and any action brought thereon and pay all reasonable
expenses (including attorneys' fees) incurred therein; or such
Indemnified Party may assume the defense of any such claim or
action, the reasonable cost (including attorneys' fees) of which
shall be paid by the Borrower upon written request of the
Indemnified Party to the Borrower, provided, that if the Authority,
the Bank or the Trustee assumes such defense, no settlement of any
such claim or action shall be made without the consent of the
Borrower, which consent shall not be unreasonably withheld. The
Borrower may engage its own counsel to participate in the defense
of any such action. The defense of any such claim shall include
the taking of all actions necessary or appropriate thereto. The
Borrower shall not be liable for any settlement of any such action
effected without Borrower's consent, but if settled with the
consent of the Borrower, or if there is a final judgment for the
claimant on any such action, the Borrower agrees to indemnify and
hold harmless the Indemnified Parties from and against any loss or
liability by reason of such settlement or judgment.
The indemnification provisions of this Section 5.23 shall
survive the termination of this Loan Agreement and the other Loan
Documents.
Section 5.24. Damage to or Condemnation of Project
Facilities. In the event of damage, destruction or condemnation of
part or all of the Project Facilities, the Borrower shall notify
the Trustee and the Bank not later than five (5) days after the
occurrence of such event (the "Initial Notice") and the following
provisions shall apply:
(a) In the event of any partial damage, destruction
or condemnation of the Project Facilities in an amount aggregating
less than $5,000,000, the Borrower shall apply the proceeds from
any payment or award related thereto to reconstruct, repair or
restore the Project Facility to a substantially equivalent
condition or value existing immediately prior to such event or to a
condition of at least an equivalent value in accordance with the
provisions of Section 407 of the Indenture.
(b) In the event the Borrower shall not or shall
fail to commence to repair, replace or reconstruct the Project
Facility within sixty (60) days after the Initial Notice to the
Trustee and the Bank when such proceeds aggregate less than
$5,000,000 or in the event such proceeds exceed in the aggregate
$5,000,000, the Bank shall have the option to (i) apply such
proceeds to the costs of repair, reconstruction and restoration of
the Project Facilities to a substantially equivalent condition or
value existing immediately prior to such event or to a condition of
Page 115
at least an equivalent value, in which case such funds shall be
deposited with the Trustee in the Acquisition Fund in accordance
with Section 407 of the Indenture; or (ii) use such proceeds to
reduce any outstanding principal balance of unreimbursed draws
under the Letter of Credit and remit the balance to the Borrower;
or (iii) retain such proceeds (up to the amount of the Borrower's
obligations to the Bank under the Letter of Credit and the
documents executed in connection therewith) as cash collateral for
the Borrower's obligations under the Letter of Credit; or (iv)
redeem Bonds from moneys from the Letter of Credit pursuant to
Section 301(b) of the Indenture and apply the amount of such net
proceeds of any insurance, casualty or condemnation award to
reimburse the Bank for any draw on the Letter of Credit, but only
to the extent of any such proceeds. The Bank shall notify the
Trustee and the Borrower in writing of its election within seventy
(70) days after the Initial Notice from the Borrower of such event.
(c) Funds disbursed to pay the cost of repair,
reconstruction and restoration of the Project Facilities shall be
paid in accordance with the Bank's standard construction loan
disbursement conditions and requirements and as set forth in the
Reimbursement Agreement and in accordance with Section 3.3 hereof
and Section 408 of the Indenture.
(d) the Borrower shall cooperate and consult with
the Bank in all matters pertaining to the settlement or
adjudication of any insurance claims and all claims and demands for
damages on account of any taking or condemnation of the Project
Facility or pertaining to the settlement, compromising or
arbitration of any claim on account of any damage or destruction of
the Project Facility. In no event shall the Borrower voluntarily
settle, or consent to the settlement of, any insurance claim equal
to or greater than $2,500,000 with relation to the Project Facility
or any proceedings arising out of any condemnation of the Project
Facility without the prior written consent of the Bank, which
consent shall not be unreasonably withheld.
(e) Damage to, destruction of or condemnation of
all or a portion of the Project Facilities shall not terminate the
Agreement, or cause any abatement of or reduction in the payments
to be made by the Borrower or otherwise affect the respective
obligations of the Authority or the Borrower, except as set forth
in this Loan Agreement.
Section 5.25. Prohibition of Liens. The Borrower shall
not create, or suffer to be created by any other person any lien or
charge upon the Acquisition Fund or the Project Facilities or any
part thereof or upon the rents, contributions, charges, receipts or
revenues therefrom, without the consent of the Authority and the
Page 116
Bank, provided that nothing in this Agreement shall limit the right
of the Borrower to enforce payments from the Acquisition Fund
pursuant to Section 408 of the Indenture. The Borrower further
agrees to pay or cause to be discharged or make adequate provision
to satisfy and discharge, within thirty (30) days after the same
shall become due, any such lien or charge and also all lawful
claims or demands for labor, materials, supplies or other charges
which, if unpaid, might be or become a lien upon the Acquisition
Fund, the Project Facilities or any part thereof or the revenues or
income therefrom. Nothing in this Section shall require the
Borrower to pay or cause to be discharged or make provision for any
such lien or charge so long as the validity thereof shall be
diligently contested in good faith and by appropriate proceedings
so long as the Acquisition Fund, the Project Facilities or any part
thereof are not subject to loss or forfeiture. The Authority shall
cooperate with the Borrower in any such contest and shall cooperate
with the Borrower with respect to obtaining any necessary releases
of liens or other encumbrances on the Project Facilities.
Section 5.26. Financing Statements. The Borrower shall,
at the Borrower's own expense, cause financing statements under the
New Jersey Uniform Commercial Code to be filed in the places
required by law in order to perfect the security interests created
or contemplated by Section 4.3 hereof naming the Bank as secured
party. From time to time, as reasonably requested by the Holder of
any Bond, but not more often than once each year, the Borrower
shall furnish to the Trustee an opinion of counsel setting forth
what actions, if any, should be taken by the Borrower to preserve
such security interest and/or the Trustee to preserve the right,
title and interest of the Trustee in and to the trust estate
created under the Indenture. The Borrower shall execute and file
or cause to be executed and filed all further instruments as shall
be required by law to preserve such security interest, and shall
furnish satisfactory evidence to the Trustee and the Bank of the
filing and refiling of such instruments.
Section 5.27. Change in Nature of Corporate Activities.
The Borrower shall not make any material change in the nature of
its corporate activities; provided that this covenant shall not
prevent the Borrower from engaging in additional corporate
activities not otherwise prohibited by this Agreement, the Code or
the Act.
Section 5.28. Notice and Certification With Respect to
Bankruptcy Proceedings. The Borrower shall promptly notify the
Trustee and the Bank in writing of the occurrence of any of the
following events and shall keep the Trustee and the Bank informed
of the status of any petition in bankruptcy filed (or bankruptcy or
similar proceeding otherwise commenced) against the Borrower: (i)
Page 117
application by the Borrower for or consent by the Borrower to the
appointment of a receiver, trustee, liquidator or custodian or the
like of itself or of its property, or (ii) is not generally paying
its debts as they become due, or (iii) general assignment by the
Borrower for the benefit of creditors, or (iv) adjudication of the
Borrower as a bankrupt or insolvent, or (v) commencement by the
Borrower of a voluntary case under the United States Bankruptcy
Code or filing by the Borrower of a voluntary petition or answer
seeking reorganization of the Borrower, an arrangement with
creditors of the Borrower or an order for relief or seeking to take
advantage of any insolvency law or filing by the Borrower of an
answer admitting the material allegations of an insolvency
proceeding, or action by the Borrower for the purpose of effecting
any of the foregoing, (vi) if without the application, approval or
consent of the Borrower, a proceeding shall be instituted in any
court of competent jurisdiction, under any law relating to
bankruptcy, insolvency, reorganization or relief of debtors,
seeking in respect of the Borrower an order for relief or an
adjudication in bankruptcy, reorganization, dissolution, winding
up, liquidation, a composition or arrangement with creditors, a
readjustment of debts, the appointment of a trustee, receiver,
liquidator or custodian or the like of the Borrower or of all or
any substantial part of its assets, or other relief in respect
thereof under any bankruptcy or insolvency law.
Except where expressly provided to the contrary, all
covenants in this Article shall be given independent effect so that
if a particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception to,
or be otherwise within the limitations of, another covenant shall
not avoid the occurrence of an Event of Default or default if such
action is taken or condition exists.
Section 5.29. Rebate Covenant. The Borrower shall
calculate or cause to be calculated the rebate requirement and
shall pay to the Trustee at such times as required under the Code
an amount equal to the rebate requirement for deposit by the
Trustee into the Rebate Fund. To the extent the amounts on deposit
in the Rebate Fund as of any date of computation are not sufficient
to meet the rebate requirement, the Borrower shall immediately pay
the amounts necessary to the Trustee for deposit in the Rebate Fund
in accordance with the provisions of Section 413 of the Indenture.
Section 5.30. Continuing Disclosure. The Borrower shall
provide or cause to be provided by the Corporate Guarantor all of
the information described in Section 515 of the Indenture relating
to compliance with the provisions of Rule 15c2-12(b)(5) of the
Securities and Exchange Commission.
Page 118
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
Section 6.1. Events of Default; Acceleration. Each of
the following events is hereby defined as, and is declared to be
and to constitute, an "Event of Default" hereunder:
(a) Failure by the Borrower to make or cause to be made
any payment required to be made under Section 4.2 or 4.4 on or
before the date the same is due; or
(b) Failure or refusal by the Borrower to observe or
comply with any of its other covenants hereunder and such failure
or refusal shall continue for a period of ninety (90) days after
written notice thereof has been given to the Borrower and the
Letter of Credit Issuer by the Authority or the Trustee; provided
that (i) if such failure is of such nature that it can be corrected
but not within ninety (90) days, it will not be an Event of Default
so long as prompt corrective action is instituted and is diligently
pursued and the Letter of Credit Issuer consents to such extension
or is not required to consent thereto pursuant to the Reimbursement
Agreement, which consent may not be unreasonably withheld, and (ii)
if such failure results in the interest on the Bonds becoming
subject to Federal income taxation and the Bonds are redeemed as a
result thereof in accordance with their terms, such failure shall
not constitute an Event of Default, and provided further, however,
that failure of the Borrower to comply with the covenant contained
in Section 5.31 hereof shall not constitute an Event of Default; or
(c) The Borrower shall (i) apply for or consent to the
appointment of a receiver, trustee, liquidator or custodian or the
like of itself or of its property, or (ii) admit in writing its
inability to pay its debts generally as they become due, or (iii)
make a general assignment for the benefit of creditors, or (iv) be
adjudicated a bankrupt or insolvent, or (v) commence a voluntary
case under the United States Bankruptcy Code, or file a voluntary
petition or answer seeking reorganization, an arrangement with
creditors or an order for relief, or seeking to take advantage of
any insolvency law or file an answer admitting the material
allegations of a petition filed against it in any bankruptcy,
reorganization, or insolvency proceeding, or action shall be taken
by it for the purpose of effecting any of the foregoing, or (vi) if
without the application, approval or consent of the Borrower, a
proceeding shall be instituted in any court of competent
jurisdiction, under any law relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking in respect of the
Borrower an order for relief or an adjudication in bankruptcy,
reorganization, dissolution, winding up, liquidation, a composition
Page 119
or arrangement with creditors, a readjustment of debts, the
appointment of a trustee, receiver, liquidator or custodian or the
like of the Borrower or of all or any substantial part of its
assets, or other like relief in respect thereof under any
bankruptcy or insolvency law, and, if such proceeding is being
contested by the Borrower in good faith, the same shall (A) result
in the entry of an order for relief or any such adjudication or
appointment or (B) remain unvacated, undismissed, undischarged,
unstayed or unbonded for a period of ninety (90) days; or
(d) For any reason the Bonds are declared due and
payable by acceleration in accordance with Section 902 of the
Indenture; or
(e) If the Trustee receives written notice from the
Letter of Credit Issuer that an Event of Default as defined in the
Reimbursement Agreement has occurred and is continuing and
directing the Trustee to accelerate the Bonds; or
(f) If the Trustee receives written notice from the
Letter of Credit Issuer following a drawing under the Letter of
Credit for interest on Bonds which remain Outstanding after the
application of the proceeds of such drawing, that the Letter of
Credit will not be reinstated with respect to such interest; or
(g) The transfer of title to or possession of the
Project Facilities or any part thereof (in one or more
transactions) for any reason without prior express written consent
of the Authority and the Bank as provided in Section 5.14 hereof;
or
(h) The voluntary close of business or voluntary
cessation of operations of the Borrower at the Project Facilities
for a continuous period in excess of one-hundred twenty (120) days;
or
(i) Any material misrepresentation or warranty by or on
behalf of the Borrower contained in this Agreement or in any
report, certificate, financial instrument or other instrument
furnished in connection with the Loan Agreement shall prove to be
false or misleading;
then and in each and every such case the Trustee, upon receipt of
written notice or actual knowledge, as the case may be, by notice
in writing to the Borrower, may, in accordance with the Indenture,
with the consent of the Letter of Credit Issuer, so long as the
Letter of Credit is still in effect and the Letter of Credit Issuer
has not defaulted in its obligations thereunder, if such Event of
Default has not been cured and shall, at the direction of the
Page 120
Letter of Credit Issuer so long as the Letter of Credit is in
effect and the Letter of Credit Issuer has not defaulted in its
obligations thereunder, declare all sums which the Borrower is
obligated to pay under this Loan Agreement to be due and payable
immediately, and upon any such declaration the same shall become
and shall be immediately due and payable, anything in this Loan
Agreement contained to the contrary notwithstanding. In case the
Trustee shall have proceeded to enforce any right under this Loan
Agreement and such proceedings shall have been discontinued or
abandoned for any reason or shall have been determined adversely to
the Trustee, then and in every such case the Borrower, the
Authority and the Trustee shall be restored respectively to their
several positions and rights hereunder, and all rights, remedies
and powers of the Borrower, the Authority and its assignee or the
Trustee shall continue as though no proceeding had been taken.
Section 6.2. Remedies on Default; Suit Therefor.
(a) The Borrower covenants that, in case it shall fail
to pay or cause to be paid any sum payable by or on behalf of the
Borrower under Section 4.2 or 4.4 as and when the same shall become
due and payable, whether at maturity or by acceleration or
otherwise, or in the event the Authority or the Letter of Credit
Issuer declares an Event of Default then, upon demand of the
Trustee, the Borrower will pay to the Trustee the whole amount of
the Loan that then shall have become due and payable under such
Sections; and, in addition thereto, such further amount as shall be
sufficient to cover the reasonable costs and expenses of
collection, including a reasonable compensation to the Trustee, its
agents and counsel, and any reasonable expenses or liability
incurred by the Authority or the Trustee or the Letter of Credit
Issuer. In case Borrower shall fail forthwith to pay such amounts
upon such demand, the Trustee shall be entitled and empowered, as
more particularly set forth in the Indenture, to institute any
actions or proceedings at law or in equity for the collection of
the sums so due and unpaid, and may prosecute any such action or
proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Borrower and collect in the
manner provided by law out of the property of the Borrower the
moneys adjudged or decreed to be payable.
(b) In case there shall be pending proceedings for the
bankruptcy or for the reorganization of the Borrower under the
Federal bankruptcy laws or any other applicable law, or in case a
receiver or trustee shall have been appointed for the benefit of
the creditors or the property of the Borrower, the Trustee shall be
entitled and empowered as more particularly set forth in the
Indenture, by intervention in such proceedings or otherwise, to
Page 121
file and prove a claim or claims for the whole amount of the Loan,
including interest owing and unpaid in respect thereof, and, in
case of any judicial proceedings, to file such proofs of claim and
other papers or documents as may be necessary or advisable in order
to have the claims of the Trustee allowed in such judicial
proceedings relative to the Borrower, its creditors, or its
property, and to collect and receive any moneys or other property
payable or deliverable on any such claims, and to distribute the
same after the deduction of its charges and expenses. Any
receiver, assignee or trustee in bankruptcy or reorganization is
hereby authorized to make such payments to the Authority or the
Trustee, and to pay to the Authority or the Trustee any amount due
it for reasonable compensation and expenses, including counsel fees
incurred by it up to the date of such distribution.
(c) In addition to the above remedies, if the Borrower
commits a breach, or threatens to commit a breach of this
Agreement, the Authority shall have the right and remedy, without
posting bond or other security, to have the provisions of this
Agreement specifically enforced by any court having equity
jurisdiction, it being acknowledged and agreed that any such breach
or threatened breach will cause irreparable injury to the Authority
and that money damages will not provide an adequate remedy
therefor.
Section 6.3. No Remedy Exclusive. No remedy herein
conferred or reserved to the Authority or the Trustee is intended
to be exclusive of any other available remedy or remedies, but each
and every such remedy shall be cumulative and shall be in addition
to every other remedy given under this Loan Agreement or now or
hereafter existing at law or in equity or by statute. No delay or
omission to exercise any right or power occurring upon any default
shall impair any such right or power or shall be construed to be a
waiver thereof, but any such right or power may be exercised from
time to time and as often as may be deemed expedient. In order to
entitle the Authority or the Trustee to exercise any remedy
reserved to either of them in this Article, it shall not be
necessary to give notice, other than such notice as may be required
in this Article.
Section 6.4. Agreement to Pay Attorneys' Fees and
Expenses. In the event the Borrower should default under any of
the provisions of this Loan Agreement and either the Authority, the
Trustee or the Bank shall require and employ attorneys or incur
other expenses for the collection of payments due or to become due
or for the enforcement or performance or observance of any
obligation or agreement on the part of the Borrower herein
Page 122
contained, the Borrower agrees that it will on demand therefor pay
to the Authority, the Trustee or the Bank the reasonable fees of
such attorneys and such other expenses so incurred by the
Authority, the Trustee or the Bank whether or not suit be brought.
Section 6.5. No Additional Waiver Implied by One Waiver.
In the event any agreement contained in this Loan Agreement should
be breached by any party and thereafter waived by any other party,
such waiver shall be limited to the particular breach so waived and
shall not be deemed to waive any other breach hereunder.
Section 6.6. Other Remedies. Whenever all sums which
the Borrower is obligated to pay under this Agreement shall have
been declared to be immediately due and payable, the Trustee, as
assignee of the Authority, shall be entitled to any one or more of
the remedies as set forth in Article IX of the Indenture and any
such power may be exercised from time to time as often may be
deemed expedient.
Section 6.7. Waiver. The Borrower expressly waives any
right of redemption on or after the date of foreclosure with
respect to the Project Facilities that it may otherwise have under
the laws of the State. The Borrower hereby waives and relinquishes
the benefits of any present or future law exempting the Project
Facilities from attachment, levy or sale on execution, or any part
of the proceeds arising from the sale thereof, and all benefits of
stay of execution or other process.
Section 6.8. Rights of the Bank. So long as (a) the
Letter of Credit is in full force and effect and there is no
default thereunder and (b) the Bank has not improperly refused or
failed to honor a payment request under the Letter of Credit, the
Bank shall have the sole right and power to take, make, give or
withhold any consent to any amendment, substitution or release of
any of the Mortgage, the Assignment of Leases or the property
subject to the lien or interests created therein and (except for
the right of the Authority to declare an Event of Default and to
exercise its other remedies hereunder) to exercise all rights and
remedies provided for herein, in the Indenture, or in the other
Loan Documents with respect to the Collateral.
Page 123
ARTICLE VII
MISCELLANEOUS
Section 7.1. Limitation of Liability of Authority. In
the event of any default by the Authority hereunder, the liability
of the Authority to the Borrower shall be enforceable only out of
its interest in the Project Facilities and under this Agreement and
there shall be no other recourse for damages by the Borrower
against the Authority, its officers, members, agents and employees,
or any of the property now or hereafter owned by it or them.
Section 7.2. Severability. If any provision hereof is
found by a court of competent jurisdiction to be prohibited or
unenforceable, it shall be ineffective only to the extent of such
prohibition or unenforceability, and such prohibition or
unenforceability shall not invalidate the balance of such provision
to the extent it is not prohibited or unenforceable, nor invalidate
the other provisions hereof, all of which shall be liberally
construed in order to effect the provisions of this Agreement.
Section 7.3. Successors and Assigns.
(a) The provisions of the Loan Documents shall be
binding upon and inure to the benefit of the parties thereto and
their respective successors and permitted assigns, except that the
Borrower or Corporate Guarantor may not assign the Commitment and
the other Loan Documents or any of its obligations, liabilities,
rights or benefits thereunder without the prior written consent of
the Bank, which the Bank may withhold in its absolute discretion.
(b) Without limiting any other rights of the Bank
under applicable law, the Bank may at any time grant to one or more
banks or other institutions or entities participating interests in
the credit facility made or to be made to the Borrower under the
Loan Document.
Subject to the foregoing, this Agreement shall be binding
upon, and shall inure to the benefit of, the parties hereto and
their respective successors and assigns, and the terms "Authority",
"Borrower" and "Trustee" shall, where the context requires, include
the respective successors and assigns of such persons. No
assignment pursuant to this Section shall release the Borrower from
its obligations under this Agreement.
Section 7.4. Enforcement of Certain Provisions by the
Bank. The Bank is hereby explicitly recognized as a third party
beneficiary of this Agreement.
Page 124
Section 7.5. Amendments, Etc. No amendment,
modification, termination or waiver of any provision of the Loan
Documents, and no consent to any departure therefrom by the
Borrower or the Corporate Guarantor or any other party thereto,
shall in any event be effective unless the same shall be in writing
and signed by the Bank and the Trustee, as assignee of the
Authority, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which
given; however, the financial covenants contained in the
Reimbursement Agreement and the Guaranty Agreement may be amended
with the prior written consent of the Bank and the consent of the
Authority, the Trustee and the Bondholders thereto shall not be
required. No notice to or demand on the Borrower or the Corporate
Guarantor in any case shall entitle the Borrower or the Corporate
Guarantor to any other or further notice or demand in similar or
other circumstances.
Section 7.6. Execution in Counterparts. This Loan
Agreement and the other Loan Documents may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which shall be deemed to be an original and
all of which (taken together) shall constitute one and the same
agreement.
Section 7.7. Governing Law. This Loan Agreement and the
other Loan Documents shall be governed by, and construed in
accordance with, the internal laws of the State (without giving
effect to principles of conflicts of law), except to the extent
that the perfection and enforcement of any lien are required to be
governed by the law of the State in which the property subject to
such lien is located.
Section 7.8. No Warranty of Condition or Suitability by
Authority. The Authority makes no warranty, either express or
implied, as to the condition of the Project Facilities or any part
thereof or that they will be suitable for the Borrower's purposes
or needs. The Borrower acknowledges and agrees that the Authority
is not a dealer in property of such kind, and that the Authority
has not made, and does not hereby make, any representation or
warranty or covenant with respect to the merchantability, fitness
for a particular purpose, condition or suitability of the Project
Facilities in any respect or in connection with or for the purposes
and uses of the Borrower or its tenants.
Section 7.9. Adjustments and Additional Costs. The
Borrower agrees to pay all charges and costs which are required and
whenever required in connection with the Authority's acquisition of
the Project Facilities and in connection with the conveyance of the
Project Facilities from the Authority to the Borrower.
Page 125
Section 7.10. Reasonable Consent. Any and all consents
required to be given, pursuant to this Loan Agreement or any of the
Loan Documents, by the Authority, the Bank, or the Trustee shall be
based on a reasonable standard other than when the Trustee is
acting upon the direction of any of the parties pursuant to any of
the Loan Documents, except that any consent to any sale, transfer,
other lien or encumbrance on the Collateral shall be in the sole
discretion of the Bank.
Section 7.11. Amounts Remaining in Bond Fund or
Acquisition Fund. It is agreed by the parties hereto that any
amounts remaining in the Bond Fund or Acquisition Fund, after
payment in full of the Bonds (or provision for payment thereof
having been made in accordance with the provisions of the
Indenture) and of the fees, charges and expenses of the Trustee and
the Authority in accordance with the Indenture, shall upon release
of the Indenture pursuant to Section 1101 thereof, be paid first by
the Trustee to the Bank to the extent of any unreimbursed drawings
under the Letter of Credit, or any other obligations owing by the
Borrower to the Bank under the Reimbursement Agreement and any
remaining moneys shall belong to and be paid to the Borrower by the
Trustee as overpayment of the Loan.
Section 7.12. Receipt of Indenture. The Borrower hereby
acknowledges that it has received an executed copy of the Indenture
and is familiar with its provisions, and agrees that it will take
all such actions as are required or contemplated of it under the
Indenture to preserve and protect the rights of the Trustee and of
the Bondholders thereunder and that it will not take any action
which would cause a default thereunder. Any redemption of Bonds
prior to maturity shall be effected as provided in the Indenture.
The Borrower agrees to comply with the provisions of Section 702 of
the Indenture.
Section 7.13. Headings. The captions or headings in
this Agreement are for convenience of reference only and shall not
control or affect the meaning or construction of any provision
hereof.
Section 7.14. Waiver of Jury Trial. The Borrower hereby
waives any and all rights that it may now or hereafter have under
the laws of the United States of America or any state, to a trial
by jury of any and all issues arising either directly or indirectly
in any action or proceeding between the Authority, the Trustee or
the Bank or their successors and assigns, out of or in any way
connected with the Loan and the other Loan Documents. It is
intended that said waiver shall apply to any and all defenses,
rights, and/or counterclaims in any action or proceeding.
Page 126
Section 7.15. Integration; Entire Agreement. This Loan
Agreement and the other Loan Documents and other instruments and
documents to be delivered hereunder and thereunder, are intended by
the parties hereto and thereto to be an integrated contract, which
together contain the entire understandings of the parties with
respect to the subject matter contained herein. This Loan
Agreement and the other Loan Documents supersede all prior
agreements and understandings between the parties with respect to
such subject matter, whether written or oral.
Section 7.16. Survival of Agreements. All agreements,
covenants, representations and warranties made herein shall survive
the delivery of the Letter of Credit.
Section 7.17. Addresses for Notices, Etc.. All notices
requests, demands, directions and other communications provided for
hereunder or under any other Loan Document shall be sufficient if
made in writing and delivered personally (including by Federal
Express or other recognized courier), if mailed by certified mail,
return receipt requested, or if telecopied, to the applicable party
at the addresses indicated below:
If to the Authority:
New Jersey Economic Development Authority
Capital Place One
CN 990
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Attention: Executive Director
Telecopier Number: (000) 000-0000
If to the Borrower:
Burlington Coat Factory Warehouse
of New Jersey, Inc.
0000 Xxxxx 000
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Chief Accounting Officer
(telecopies sent to (000) 000-0000)
- with duplicate copies to-
Xxxx X. Xxxx, Esq., general counsel,
at the above address and telecopier number
and
Burlington Coat Factory Warehouse Corporation
Page 127
0000 Xxxxx 000
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: President
(telecopies sent to (000) 000-0000)
If to the Bank:
First Fidelity Bank, N.A.
000 Xxxxx Xxxxx Xxxxxx - XXX000
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Vice President
Telecopier Number: (000) 000-0000
or, as to each party, at such other address as shall be designated
by such party in a written notice to each other party complying as
to delivery with the terms of the Loan Documents. All notices,
requests, demands, directions and other communications shall (if
delivered personally) be effective when delivered or (if mailed)
three (3) days after having been deposited in the mail, addressed
as aforesaid.
Page 128
IN WITNESS WHEREOF, the parties hereto, intending to be
legally bound, have caused this Agreement to be executed and
delivered as of the date first written above.
[SEAL] NEW JERSEY ECONOMIC
DEVELOPMENT AUTHORITY
ATTEST:
By:___________________
XXXXX X. XXXXXXX, XX., XXXXX X. XXXXXXXX,
Assistant Secretary Executive Director
ATTEST: BURLINGTON COAT FACTORY
WAREHOUSE OF NEW JERSEY, INC.
By:___________________
XXXXXX X. XXXXXXX, XX., XXXX X. XXXXX,
Assistant Secretary Vice President
Page 129
EXHIBIT A
Premises Description
ALL THAT CERTAIN tract or parcel of land and premises
situate, lying and being in the Township of Burlington, County of
Burlington and State of New Jersey, bounded and described as
follows:
COMMENCING at a monument in the Southeasterly right-of-
way line of X.X. Xxxxx Xxxxxxx Xxxxx 000 (103 feet wide), said
monument being on the Municipal boundary line between the Township
of Xxxxxxxx and the Township of Burlington in the County of
Burlington, State of New Jersey and corner to Block 160.01, Lot
1.01 in the Township of Xxxxxxxx and running;
(1) along said Municipal boundary line (being the same
as the line of said Lot 1.01), South 05 degrees 56 minutes 01
seconds East, 1,722.05 feet to a monument on said Municipal
boundary line and common corner to Block 160.01, Lots 1.01 and 5.01
in the Township of Xxxxxxxx and Xxxxx 000, Xxx 0 in the Township of
Burlington; thence
(2) along said Xxx 0, Xxxxx 000, Xxxxx 00 degrees 56
minutes 58 seconds West, 259.53 feet to a monument corner to same;
thence
(3) still along said Xxx 0, Xxxxx 00 degrees 42 minutes
19 seconds West, 1,203.81 feet to a monument in the line of Xxxxx
000, Xxx 00, Xxxxxxxx xx Xxxxxxxxxx; thence
(4) along said Xxx 00, Xxxxx 00 degrees 26 minutes 36
seconds East, 1,339.17 feet to a monument corner to said Lot 12 in
the Southeasterly right-of-way line of X.X. Xxxxx Xxxxxxx Xxxxx
000; thence
(5) along said Southeasterly right-of-way line, North 70
degrees 46 minutes 50 seconds East, 1,299.66 feet to the point and
place of beginning.
CONTAINING within said bounds 47.348 acres.
BEING shown and designated as Xxx 0, Xxxxx 000, Xxxxx 30
on the current Tax Map of the Township of Burlington.
BEING the same land and premises which became vested in
Burlington Coat Factory Warehouse of New Jersey, Inc., a New Jersey
Corporation by the following:
A-1
Page 130
EXHIBIT A (continued)
Premises Description
(a) As to part by Deed from Blue Grass Lawn Farms, a
Partnership by Xxxx X. Xxxx and Xxxxx X. Xxxx, his wife, sole
partners, dated December 31, 1985, recorded January 2, 1986 in Deed
Book 3122 page 159.
(b) As to part by Deed from Xxxxx X. Xxxxxxx and Xxxxxxx
X. Xxxxxxx, his wife, dated December 30, 1985, recorded January 2,
1986 in Deed Book 3122 page 164.
ALSO BEING the same land and premises which became vested
in Burlington Coat Factory Warehouse of New Jersey, Inc., a New
Jersey Corporation by Deed from Burlington Coat Factory Warehouse
of New Jersey, Inc., a New Jersey Corporation, dated December 31,
1985, recorded January 2, 1986 in Deed Book 3122 at page 168, and
corrected by a Deed of Correction dated February 13, 1987, recorded
June 12, 1987 in Deed Book 3421 at page 181.
A-2
Page 131
EXHIBIT B
Description of Project Facilities
The 46.779 acres of land and an approximately 450,000
square foot building situate thereon located at 0000 Xxxxx 000,
Xxxxxxxx xx Xxxxxxxxxx, Xxxxxx of Burlington, New Jersey which
houses the national distribution center for Borrower's products,
including the administrative functions of Borrower and the
equipment in such building consisting of conveyor systems, rolling
racks and automated machinery and a parking area adjacent to such
facility.
B-1
Page 132
Requisition Ref. No. _____
EXHIBIT C
NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY
(BURLINGTON COAT FACTORY WAREHOUSE OF
NEW JERSEY, INC. - 1995 PROJECT)
REQUISITION REF. NO. _______
I, the undersigned _________________ [insert title] of
Burlington Coat Factory Warehouse of New Jersey, Inc. (the
"Borrower"), DO HEREBY CERTIFY that I am an Authorized Borrower
Representative duly designated by the Borrower to execute and
deliver this certificate on behalf of the Borrower. I DO HEREBY
FURTHER CERTIFY pursuant to and in accordance with the terms of a
Loan Agreement between the New Jersey Economic Development
Authority (the "Authority") and the Borrower, dated as of
___________, 1995 (the "Loan Agreement") as follows:
1. This requisition is Requisition No. _______.
2. The name and address of the person, firm or
corporation to whom payment is due is:
____________________________
____________________________
____________________________
[If such payment is to be made to the Borrower for a
reimbursable advance, insert the name and address of the person,
firm or corporation to whom such advance was made together with
proof of payment by the Borrower.]
3. The amount to be paid to such person, firm or
corporation named in paragraph (2) above is $______________.
4. Each obligation, item of cost or expense mentioned
herein has been properly incurred, is a Proper Charge against the
Acquisition Fund, is unpaid or unreimbursed, and has not been the
basis of any previously paid requisition.
C-1
Page 133
Requisition Ref. No. _________
5. If such payment is a reimbursement to the Borrower
for costs or expenses incurred by reason of work performed or
supervised by officers or employees of the Borrower or any of its
affiliates, such amount mentioned herein to be paid does not exceed
the actual cost thereof to the Borrower or any of its affiliates.
6. No uncured Event of Default has occurred under the
Loan Agreement or the Indenture.
7. The Borrower has received no written notice of any
lien, right to lien or attachment upon, or other claim affecting
the right to receive payment of, any of the moneys payable under
this Requisition to any of the persons, firms or corporations named
herein, or if any of the foregoing has been received, it has been
released or discharged or will be released or discharged upon
payment of this Requisition.
Capitalized terms used herein and not otherwise defined
shall have the meanings ascribed to such terms in the Loan
Agreement.
DATED: BURLINGTON COAT FACTORY WAREHOUSE
OF NEW JERSEY, INC.
__________________________________
AUTHORIZED BORROWER REPRESENTATIVE
Name:
Title:
The undersigned, on behalf of First Fidelity Bank,
National Association hereby approves the above Requisition.
DATED: FIRST FIDELITY BANK, NATIONAL
ASSOCIATION
_________________________________
AUTHORIZED BANK REPRESENTATIVE
Name:
Title:
C-2
Page 134
EXHIBIT D
Description of Machinery and Equipment
Belt Roller System, including:
Store Dump
Cross Dock
Flatwear Processing
Hanging Opening
Empty Tote System
Store Jump
Flatwear Processing
Shipping System
Trash Conveyors
Sorter Platform
Case Sealer
Automatic Sealer
Recirculation Loop
Rail System including:
Monorail PS-1
Monorail PS-2
Monorail PS-4
Monorail PS-5
Monorail PS-6
Monorail PS-7
Free Rail System
Mezanine Structure
CSC 2000 Tilt Tray Flat Sorter:
6 induction stations for merchandisers
1 auto induction for carton packing
324 Store Parking Chutes
HLS 6000 - 105 Hanging Garment Sorter:
1 Semi automatic induction for merchandiser
254 Store parking locations
D-1
Page 135
EXHIBIT E
FORM OF COMPLETION CERTIFICATE
New Jersey Economic Development Authority
Xxxxxxx Xxxxx Xxx
Xxxxxxx, Xxx Xxxxxx 00000
Pursuant to Section 3.4 of the Loan Agreement by and
between the Authority and the Borrower dated as of August 1, 1995
(the "Loan Agreement"), the undersigned, an Authorized Borrower
Representative (all undefined terms used herein shall have the same
meaning ascribed to them in the Loan Agreement), as of the date
hereof, certifies that:
(i) the 1985 Project was completed as of June __,
1988;
(ii) as of such date referenced in (i) above, the
Cost of all labor, services, materials and
supplies used in the 1985 Project have been
paid;
(iii) all machinery and equipment necessary for the
1985 Project has been installed to the
Borrower's satisfaction; such machinery and
equipment so installed is suitable and
sufficient for the efficient operation of the
1985 Project for the intended purposes and all
costs and expenses, if any, incurred in the
acquisition and installation of such machinery
and equipment have been paid;
(iv) the 1985 Project is being operated as an
authorized "project" under the Act and
substantially as proposed in the Original
Application of the Borrower; and
(v) all permits, including a Certificate of
Occupancy, necessary for the utilization of the
1985 Project have been obtained and are in
effect.
E-1
Page 000
XXXXXXXXXX XXXX XXXXXXX XXXXXXXXX
XX XXX XXXXXX, INC.
By:______________________________
Authorized Borrower
Representative
Dated: August 24, 1995
E-2
Page 137