===============================================================================
NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY
AND
XXXX HAULING and WAREHOUSING SYSTEM, INC.
-----------------------
SERIES J LOAN AGREEMENT
-----------------------
Dated as of June 1, 1995
===============================================================================
The interest of the NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY (the
"Issuer") in this Loan Agreement has been assigned (except for certain rights
expressly reserved by the Issuer) pursuant to the Indenture of Trust dated as of
the date hereof from the Issuer to THE BANK OF NEW YORK (NJ), as trustee (the
"Trustee"), and is subject to the security interest of the Trustee thereunder.
LOAN AGREEMENT
TABLE OF CONTENTS
(This Table of Contents is only for convenience of reference and is
not intended to define, limit or describe the scope or intent of any provisions
of this Loan Agreement.)
Page
----
PARTIES......................................................... 1
PREAMBLES....................................................... 1
ARTICLE I
DEFINITIONS
Section 1.1. Definitions.................................... I-1
Section 1.2. Interpretation and Construction................ I-11
ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES
Section 2.1. Representations and Covenants of the
Issuer........................................ II-1
Section 2.2. Representations and Warranties of the
Company....................................... II-1
Section 2.3. [Intentionally Omitted]........................ 11-6
Section 2.4. Covenants of the Company....................... 11-6
ARTICLE III
ISSUANCE OF THE SERIES J BONDS
Section 3.1. Agreement to Issue the Series J Bonds:
Application of Series J Bond Proceeds......... III-1
Section 3.2. Disbursements from the Project Fund............ III-1
Section 3.3. Furnishing Documents to the Trustee............ III-1
Section 3.4. Special Arbitrage Certifications............... III-1
ARTICLE IV
LOAN PROVISIONS
Section 4.1. Loan of Proceeds............................... IV-1
Section 4.2. Amounts Payable................................ IV-1
Section 4.3. Obligations of Company Unconditional........... IV-2
-i-
ARTICLE V
THE PROJECT
Section 5.1. Disbursements from the Project Fund............ V-1
Section 5.2. Maintenance and Modification of the
Project Facility by the Company............... V-2
Section 5.3. Taxes, Other Governmental Charges and
Utility Charges............................... V-2
Section 5.4. Insurance Required............................. V-3
Section 5.5. Additional Provisions Concerning
Insurance..................................... V-4
Section 5.6. Worker's Compensation.......................... V-4
ARTICLE VI
DAMAGE, DESTRUCTION AND CONDEMNATION
Section 6.1. Damage, Destruction and Condemnation........... VI-1
Section 6.2. Application of Net Proceeds.................... VI-1
Section 6.3. Insufficiency of Net Proceeds.................. VI-2
ARTICLE VII
SPECIAL COVENANTS
Section 7.1. No Warranty of Condition or Suitability
by Issuer..................................... VII-1
Section 7.2. Access to the Project.......................... VII-1
Section 7.3. Further Assurances and Corrective
Instruments................................... VII-1
Section 7.4. Issuer and Company Representatives............. VII-1
Section 7.5. Financing Statements........................... VII-1
Section 7.6. Compliance with Code........................... VII-2
Section 7.7. Further Assurances ............................ VII-2
Section 7.8. [Intentionally Omitted]........................ VII-2
Section 7.9. Annual Certificate............................. VII-2
ARTICLE VIII
PROJECT USERS; MAINTAIN EXISTENCE; MERGE, SELL, TRANSFER;
INDEMNIFICATION; REDEMPTION
Section 8.1. Project Users; Maintain Existence;
Merge, Sell, Transfer........................ VIII-1
Section 8.2. Release and Indemnification Covenants......... VIII-2
Section 8.3. Redemption of Bonds........................... VIII-4
Section 8.4. Issuer to Grant Security Interest to
Trustee....................................... VIII-5
Section 8.5. Indemnification of Trustee..................... VIII-5
-ii-
ARTICLE IX
DEFAULTS AND REMEDIES
Section 9.1. Defaults Defined............................... IX-1
Section 9.2. Trustee's Remedies on Default.................. IX-3
Section 9.3. Issuer's Remedies on Default................... IX-4
Section 9.4. Specific Performance........................... IX-5
Section 9.5. No Remedy Exclusive............................ IX-5
Section 9.6. Agreement to Pay Attorneys' Fees and
Expenses...................................... IX-6
Section 9.7. No Additional Waiver Implied by One
Waiver........................................ IX-6
ARTICLE X
OPTIONS TO TERMINATE AGREEMENT.............................. X-1
ARTICLE XI
MISCELLANEOUS
Section 11.1. Term of Agreement.............................. XI-1
Section 11.2. Notices........................................ XI-1
Section 11.3. Binding Effect................................. XI-1
Section 11.4. Severability................................... XI-1
Section 11.5. Amounts Remaining in Funds..................... XI-1
Section 11.6. Amendments, Changes and Modification........... XI-3
Section 11.7. Execution in Counterparts...................... XI-3
Section 11.8. Applicable Law................................. XI-3
Section 11.9. Captions....................................... XI-3
EXHIBIT A - Project Facility
EXHIBIT B - Form of Requisition
EXHIBIT C - Permitted Encumbrances
EXHIBIT D - Form of Annual Certificate
-iii-
THIS LOAN AGREEMENT is dated as of June 1, 1995, between the NEW JERSEY
ECONOMIC DEVELOPMENT AUTHORITY (the "Issuer"), a public body corporate and
politic constituting an instrumentality of the State of New Jersey and XXXX
HAULING AND WAREHOUSING SYSTEM, INC., a corporation duly organized and validly
existing under the laws of the Commonwealth of Pennsylvania (the "Company").
W I T N E S S E T H:
WHEREAS, the New Jersey Economic Development Authority Act, as amended and
supplemented, N.J.S.A. ss.34:1B-1, et seq. (the "Act"), declares that the
Legislature has determined that Department of Labor and Industry statistics of
recent years indicate a continuing decline in manufacturing employment within
the State which is a contributing factor to the drastic unemployment existing
within the State, which far exceeds the national average, thus adversely
affecting the economy of the State and the prosperity, safety, health and
general welfare of its inhabitants and their standard of living; and that the
availability of financial assistance and suitable facilities are important
inducements to new and varied employment promoting enterprises to locate in the
State, and to existing enterprises to remain and expand in the State; and
WHEREAS, the Issuer 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 Issuer 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 Issuer, to accomplish the purposes of the Act, is empowered
(i) to extend credit or make loans to any person for the planning, designing,
acquiring, constructing, reconstructing, improving, equipping and furnishing of
a project, which credit or loans may be secured by loan and security agreements,
mortgages, leases, and any other instruments, upon such terms and conditions as
the Issuer shall deem reasonable; (ii) to require the inclusion in any mortgage,
lease, contract, loan and security agreement or other instruments, such
provisions for the construction, use, operation and maintenance and financing of
a project as the Issuer may deem necessary or desirable; and (iii) to enter into
contracts with respect to the planning, designing, financing, constructing,
reconstructing, improving, equipping, furnishing, operating and maintaining of a
project, for such consideration and upon such terms and conditions as the Issuer
may determine to be reasonable; and
WHEREAS, as an inducement to the Company to undertake a certain project
consisting of the acquisition and filling of approximately 18.6 acres of
tidewater property (including the cost of off-site mitigation required by
environmental permits), the renovation of an existing building of approximately
36,500 square feet into a refrigerated warehouse and certain additional building
renovations, the performance of certain site improvements, including the
renovation of a collapsed pier, the construction of two marginal piers and
certain paying, grading and filling costs, and the purchase and installation of
machinery and equipment, including container cranes, bulldozers, forklift trucks
and other peripheral equipment for use in the loading and unloading of
oceangoing vessels, all part of a public port facility and property functionally
related and subordinate thereto (the "Project"), said Project to be located in
the City of Gloucester City, County of Camden, New Jersey, the Issuer, in
furtherance of the purposes of the Act, made certain findings and determinations
and preliminarily approved the application of the Company for the financing of
the Project by resolution duly adopted on May 24, 1983 and by further resolution
duly adopted on August 7, 1984 authorized the issuance of its Variable/Fixed
Rate Economic Development Bonds (Xxxx Hauling and Warehousing System, Inc.--1983
Project) in the principal amount of $13,500,000 (the "Series A Bonds") for the
purpose of providing funds for the making of a loan to the Company to finance a
portion of the Project and to enable the Company to refund certain outstanding
bonds; and
WHEREAS, in furtherance of the purposes of the Act, the Issuer heretofore
issued the Series A Bonds for the Company in the City of Gloucester City, Camden
County, New Jersey on August 24, 1984, and loaned the proceeds from the sale
thereof to the Company pursuant to a Loan Agreement dated as of August 1, 1984
between the Issuer and the Company; and
WHEREAS, as a further inducement to the Company to undertake certain
additional costs in connection with the Project and in furtherance of the
purposes of the Act, the Issuer by resolution duly adopted on September 4, 1985
authorized the issuance of its Variable/Fixed Rate Economic Development Bonds
(Xxxx Hauling and Warehousing System, Inc.--1983 Project) in the aggregate
principal amount of $17,500,000, consisting of its Series B Variable/Fixed Rate
Economic Development Bonds (Xxxx Hauling and Warehousing System, Inc.--1983
Project) in the principal amount of $7,500,000 (the "Series B Bonds") and its
Series C Variable/Fixed Rate Economic Development Bonds (Xxxx Hauling and
Warehousing System, Inc.--1983 Project) in the principal amount of $10,000,000
(the "Series C Bonds"), all for the purpose of providing funds for the making of
loans to the Company to finance a portion of the Project; and
WHEREAS, in furtherance of the purposes of the Act, the Issuer heretofore
issued the Series B Bonds for the Company in the City of
0
Xxxxxxxxxx Xxxx, Xxxxxx Xxxxxx, Xxx Xxxxxx, xx December 6, 1985, and loaned the
proceeds from the sale thereof to the Company pursuant to a loan agreement dated
as of November 1, 1985 between the Issuer and the Company; and
WHEREAS, in furtherance of the purposes of the Act, the Issuer heretofore
issued the Series C Bonds for the Company in the City of Gloucester City, Camden
County, New Jersey, on December 30, 1985, and loaned the proceeds from the sale
thereof to the Company pursuant to a loan agreement dated as of December 1, 1985
between the Issuer and the Company; and
WHEREAS, the Company requested an additional loan from the Issuer to refund
the Series C Bonds and, as an inducement to the Company to refund the Series C
Bonds, the Issuer duly adopted an amended final resolution on January 8, 1986
authorizing the issuance of its Economic Development Bonds (Xxxx Hauling and
Warehousing System, Inc.--1983 Project) 11.85% 1986 Series in the aggregate
principal amount of $10,000,000 (the "1986 Series Bonds") and providing for the
securing of the payment of said 1986 Series Bonds by a pledge of moneys to be
received by the Issuer and the assignment of certain rights of the Issuer with
respect to the Project, which pledge and assignment further secured the payment
of the principal of and interest on the 1986 Series Bonds; and
WHEREAS, the Issuer issued the 1986 Series Bonds on February 25, 1986 and
applied the proceeds of the 1986 Series Bonds to make a loan to the Company to
refund the Series C Bonds in accordance with a certain loan agreement between
the Issuer and the Company and a certain indenture of trust between the Issuer
and Bankers Trust Company, as trustee, both dated as of February 1, 1986,
providing, in part, for payments by the Company to the Issuer sufficient to meet
installments of interest and principal on the 1986 Series Bonds; and
WHEREAS, the Company requested an additional loan from the Issuer to refund
the Series A Bonds and the Series B Bonds, and, as an inducement to the Company
to refund the Series A Bonds and the Series B Bonds, the Issuer duly adopted an
amended final resolution on July 1, 1986 authorizing the issuance of its Series
D Senior Mortgage Economic Development Bonds (Xxxx Hauling and Warehousing
System, Inc.--1983 Project) in an aggregate principal amount of $18,750,000
(the "Series D Bonds") and providing for the securing of the payment of said
Series D Bonds by a pledge of moneys to be received by the Issuer and the
assignment of certain rights of the Issuer with respect to the Project, which
pledge and assignment further secured the payment of the principal of and
interest on the Series D Bonds; and
WHEREAS, the Issuer issued the Series D Bonds on September 18, 1986 and
applied the proceeds of the Series D Bonds to make a loan to the Company to
refund the Series A Bonds and the Series B Bonds
3
in accordance with a certain loan agreement between the Issuer and the Company
and a certain indenture of trust between the Issuer and Bankers Trust Company,
as trustee, both dated as of August 1, 1986, providing, in part, for payments by
the Company to the Issuer sufficient to meet installments of interest and
principal on the Series D Bonds; and
WHEREAS, the Company requested an additional loan from the Issuer to
finance certain additional costs in connection with the Project and as a further
inducement to the Company to undertake such costs and in furtherance of the
purposes of the Act, the Issuer duly adopted an amended final resolution on
December 2, 1986 authorizing the issuance of its Series E Senior Mortgage
Economic Development Bonds (Xxxx Hauling and Warehousing System, Inc.--1983
Project) in an aggregate amount not to exceed $8,500,000 (the "Series E Bonds")
and secured the payment of said Series E Bonds by a pledge of moneys to be
received by the Issuer and the assignment of certain rights of the Issuer with
respect to the Project, which pledge and assignment further secured the payment
of the principal of and interest on the Series E Bonds; and
WHEREAS, the Issuer issued the Series E Bonds on December 30, 1986 and
applied the proceeds of the Series E Bonds to make a loan to the Company for the
financing of a portion of the costs of the Project, all in accordance with a
certain loan agreement between the Issuer and the Company and a certain
indenture of trust between the Issuer and Bankers Trust Company, as trustee,
both dated as of December 1, 1986, providing, in part, for payments by the
Company to the Issuer sufficient to meet installments of interest and principal
on the Series E Bonds; and
WHEREAS, the Company thereafter amended the Application, revising certain
aspects thereof to reflect cost overruns incurred with respect to the Project
and requested that the Issuer reconfirm its approval of the project described in
the Application; and
WHEREAS, the Company requested a further loan from the Issuer to finance
certain additional costs in connection with the Project and as a further
inducement to the Company to undertake such additional costs and in furtherance
of the purposes of the Act, the Issuer duly adopted an amended final resolution
on August 4, 1987 (the "August Resolution") authorizing the issuance of its
Series F Economic Development Bonds (Xxxx Hauling and Warehousing System,
Inc.--1983 Project) in an aggregate principal amount not to exceed $9,000,000
(the "Series F Bonds") and providing for the securing of the payment of said
Series F Bonds by a pledge of moneys to be received by the Issuer and the
assignment of certain rights of the Issuer with respect to the Project, which
pledge and assignment further secured the payment of the principal of and
interest on the Series F Bonds; and
4
WHEREAS, the Issuer was thereafter requested and agreed to amend the form
of bonds approved in the August Resolution and to substitute Fidelity Bank,
National Association as trustee in the place of Bankers Trust Company, New York,
New York, and duly adopted an amended final resolution on December 1, 1987
authorizing the amended form of Series F Bonds and the substitution of trustee,
and otherwise ratifying and confirming the August Resolution; and
WHEREAS, the Issuer issued its Variable/Fixed Rate Economic Development
Bonds (Xxxx Hauling and Warehousing System, Inc.--1983 Project), Series F, in
the aggregate principal amount of $9,000,000 on December 24, 1987 and applied
the proceeds of the Series F Bonds to make a loan to the Company for the
financing of a portion of the costs of the Project, all in accordance with a
certain loan agreement between the Issuer and the Company and a certain
indenture of trust between the Issuer and Fidelity Bank, National Association,
as trustee, both dated as of December 1, 1987, providing, in part, for payments
by the Company to the Issuer sufficient to meet installments of interest and
principal on the Series F Bonds; and
WHEREAS, the Company requested an additional loan from the Issuer to refund
the 1986 Series Bonds and the Series F Bonds and, as an inducement to the
Company to refund such Bonds, the Issuer duly adopted an amended final
resolution on January 7, 1992 authorizing the issuance of its Economic
Development Bonds (Xxxx Hauling and Warehousing System, Inc.--1983 Project),
Series G in the aggregate principal amount of $10,000,000 (the "Series G
Bonds"), and its Economic Development Bonds (Xxxx Hauling and Warehousing
System, Inc.--1983 Project), Series H in the aggregate principal amount of
$9,000,000 (the "Series H Bonds"), and provided for the securing of the payment
of said Series G Bonds and the Series H Bonds by a pledge of moneys to be
received by the Issuer and the assignment of certain rights of the Issuer with
respect to the Project, which pledge and assignment are hereby declared to
further secure the payment of the principal of and interest on the Series G
Bonds and the Series H Bonds; and
WHEREAS, the Issuer issued the Series G Bonds on January 28, 1992 and
applied the proceeds of the Series G Bonds to make a loan to the Company to
refund the 1986 Series Bonds in accordance with a certain loan agreement between
the Issuer and the Company, and a certain indenture of trust between the Issuer
and Mellon Bank, N.A., as trustee, both dated as of January 2, 1992 providing,
in part, for payments by the Company to the Issuer sufficient to meet
installments of interest and principal on the Series G Bonds; and
WHEREAS, the Issuer issued the Series H Bonds on January 28, 1992 and
applied the proceeds of the Series H Bonds to make a loan to the Company to
refund the Series F Bonds in accordance with a certain loan agreement between
the Issuer and the Company, and a certain indenture of trust between the Issuer
and Mellon Bank,
5
N.A., as trustee, both dated as of January 2, 1992, providing, in part, for
payments by the Company to the Issuer sufficient to meet installments of
interest and principal on the Series H Bonds; and
WHEREAS, the Company requested an additional loan from the Issuer to
undertake certain additional costs in connection with the Project and, as an
inducement to the Company to undertake such costs and in furtherance of the
purposes of the Act, the Issuer duly adopted a final resolution on September 7,
1993 authorizing the issuance of its Economic Development Bonds (Xxxx Hauling
and Warehousing System, Inc.--1983 Project), 1993 Series I in the aggregate
principal amount of $5,000,000 (the "Series I Bonds"), and secured the Series I
Bonds by a pledge of moneys to be received by the Issuer and the assignment of
certain rights of the Issuer with respect to the Project, which pledge and
assignment are hereby declared to further secure the payment of the principal of
and interest on the Series I Bonds; and
WHEREAS, the Issuer issued the Series I Bonds on November 10, 1993 and
applied the proceeds of the Series I Bonds to make a loan to the Company for the
financing of a portion of the additional costs in connection with the Project,
all in accordance with a certain loan agreement between the Issuer and the
Company, and a certain indenture of trust between the Issuer and The Bank of New
York (NJ), as trustee, both dated as of November 1, 1993 providing, in part,
for payments by the Company to the Issuer sufficient to meet installments of
interest and principal on the Series I Bonds; and
WHEREAS, the Company has requested an additional loan from the Issuer to
refund the Series I Bonds; and
WHEREAS, the Issuer proposes to issue its Economic Development Revenue
Refunding Bonds (Xxxx Hauling and Warehousing System, Inc.--1983 Project) 1995
Series J in the aggregate principal amount of $5,000,000 (the "Bonds"), and to
secure the Bonds by a pledge of moneys to be received by the Issuer and the
assignment of certain rights of the Issuer with respect to the Project, which
pledge and assignment are hereby declared to further secure the payment of the
principal of and interest on the Bonds; and
WHEREAS, the Issuer proposes to apply the proceeds of the Bonds to make a
loan to the Company to refund the Series I Bonds, all in accordance with a
certain loan agreement (the "Loan Agreement") between the Issuer and the
Company, and a certain indenture of trust (the "Indenture") between the Issuer
and The Bank of New York (NJ) (the "Trustee"), providing, in part, for payments
by the Company to the Issuer sufficient to meet installments of interest and
principal on the Bonds; and
WHEREAS, the Company and the Issuer each have full right and lawful
authority to enter into this Loan Agreement (hereinafter
6
referred to as the "Agreement"), and to perform and observe the provisions
hereof on their respective parts to be performed and observed.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the parties hereto covenant, agree and bind themselves as
follows; provided, that any obligation of the Issuer created by or arising out
of this Loan Agreement shall never constitute a debt or a pledge of the faith
and credit or the taxing power of the State or any political subdivision or
taxing district of the State (other than the Issuer, to the limited extent
provided in the Indenture) but shall be payable solely out of the Trust Estate
(as hereinafter defined), anything herein contained to the contrary by
implication or otherwise notwithstanding:
7
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. All capitalized, undefined terms used herein
shall have the same meanings as used in Article I of the hereinafter defined
Indenture. In addition, the following words and phrases shall have the following
meanings:
"Act" means the New Jersey Economic Development Authority Act, as amended,
N.J.S.A. ss.34:1B-1, et seq. or any successor legislation, and any regulations
and administrative pronouncements promulgated thereunder, as amended and
supplemented.
"Affiliate" means any Person under the control of or in common control or
ownership (direct or indirect) of or with the Company or any Subsidiary or
Affiliate of the Company. For the purposes of this definition and the definition
of Related Party below, "control" shall mean ownership or control (direct or
indirect) of five percent or more of the voting stock of the Person for which
such determination is to be made or the exercise of management control over the
business and affairs of such Person. The term "Affiliate" shall not be deemed
to include any Person any portion of which is owned or held by the Company
solely for investment purposes provided that (i) the Company does not own or
hold more than 49% of such Person and (ii) such Person is not included in the
Company's consolidated financial statements.
"Agreement" or "Loan Agreement" means this Series J Loan Agreement as the
same may be amended, modified or supplemented from time to time in accordance
with its terms.
"Application" means the application for financial assistance of the Company
dated April 28, 1983, submitted to the Issuer, including any amendments thereto
as are on file at the Issuer's offices.
"Assignment" means the Series J Assignment dated the Closing Date by and
between the Issuer, as assignor, and the Trustee, as assignee, assigning,
subject to such reservations as are contained therein, all of the Issuer's
right, title and interest in and to this Agreement and the other Loan Documents,
as the same may be amended, modified or supplemented from time to time.
"Bond" or "Bonds" or "Series J Bond" or "Series J Bonds" means one or more
of the Economic Development Revenue Refunding Bonds (Xxxx Hauling and
Warehousing System, Inc.--1983 Project) 1995 Series J of the Issuer in the
aggregate principal amount of $5,000,000 authorized to be issued pursuant to
the Bond Resolution,
I-1
delivered under and pursuant to the Bond Resolution and Indenture and any bonds
issued in lieu of or in substitution therefor.
"Bond Counsel" with respect to the issuance and delivery of the Bonds means
Xxxxx & Samson, A Professional Corporation, having its office at 0 Xxxxxx Xxxx
Xxxx, Xxxxxxxx, Xxx Xxxxxx 00000, and subsequent thereto, such firm or any other
nationally recognized bond counsel reasonably satisfactory to the Issuer and the
Trustee.
"Bond Fund" means the fund so designated which is established and created
pursuant to Section 5.01 of the Indenture.
"Bond Placement Agreement" means the bond placement agreement dated as of
June 1, 1995 by and among the Issuer, the Company and the Placement Agent,
relating to the placement of the Bonds, as the same may be amended, modified or
supplemented from time to time.
"Bond Resolution" means the resolution of the Issuer adopted on May 9, 1995
and entitled "Amended Final Resolution (Xxxx Hauling and Warehousing System,
Inc.--1983 Project)" authorizing the issuance and sale of the Bonds and the
execution and delivery of this Agreement, the Indenture, the Bond Placement
Agreement, the Assignment and the other Loan Documents and determining other
matters in connection with the Project.
"Bond Year" shall have the meaning ascribed to such term in the Tax
Certificate.
"Business Day" means a day on which the Trustee and banks located in West
Paterson, New Jersey or New York City, New York are open for the purpose of
conducting a commercial banking business.
"Cancellation Date" means the effective date of the Issuer's notice of
cancellation of the Bonds given pursuant to Section 9.3 hereof.
"Cash Flow" of a Person shall mean Net Income of such Person plus
depreciation and other non-cash charges to income plus (or minus) any increase
(or decrease) in deferred taxes.
"Chief Financial Officer" shall mean Xxxxxxx Xxxxxx, the Vice President and
Treasurer of the Company, or such other individual functioning in a
substantially similar capacity on behalf of the Company as the Company shall
designate in a notice to the Trustee from time to time.
"Closing Date" means June 7, 1995 or such other date which shall be the
date of the execution and delivery of this Loan Agreement and the making of the
Loan.
I-2
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor legislation, and the regulations promulgated thereunder, and
including, to the extent not inconsistent with the Code, Treasury Regulations
promulgated under the 1954 Code.
"Collateral" means all of the rights and assets of the Company or any other
Person in which the Issuer or the Trustee is now or hereafter granted a lien or
security interest in order to secure the performance of the Company's
obligations under this Loan Agreement, or any of the Loan Documents, the
obligations of the Issuer hereunder or under the Bonds or the obligations of any
Guarantor under the Guaranty.
"Combined Cash Flow", "Combined Interest Charges", "Combined Net Income"
and "Combined Net Income Before Interest and Taxes" for any period shall mean,
respectively, the Cash Flow, Interest Charges, Net Income and Net Income Before
Interest and Taxes of the Company, its Subsidiaries and Affiliates for such
period, combined in accordance with generally accepted accounting principles
consistently applied.
"Combined Indebtedness" means (i) the Combined Total Assets less (ii) the
total combined stockholders' equity of the Company and its Subsidiaries and
Affiliates plus deferred taxes, each determined in accordance with generally
accepted accounting principles consistently applied, as such combination is
effected in accordance with generally accepted accounting principles
consistently applied as at any date on which the amount thereof shall be
determined.
"Combined Tangible Net Worth" means (i) total combined shareholders' equity
in the Company, its Subsidiaries and Affiliates, determined in accordance with
generally accepted accounting principles consistently applied, as such
combination is effected in accordance with generally accepted accounting
principles consistently applied, less (ii) the aggregate net amount of the
following items to the extent, if any, that they were included in consolidated
assets or deducted from consolidated liabilities in computing shareholders,
equity:
(a) All licenses, patents, copyrights, tradenames, trademarks, franchises,
good will, experimental or organizational expense, unamortized debt discount and
expense, treasury stock and all other assets which under generally accepted
accounting principles are deemed intangible; and
(b) Any write-up of assets (other than current assets written up in
accordance with generally accepted accounting principles consistently applied)
made after January 1, 1984.
I-3
"Combined Total Assets" means the assets of the Company, its Subsidiaries
and Affiliates, combined in accordance with generally accepted accounting
principles consistently applied.
"Company Representative" means the person or persons at the time designated
to act on behalf of the Company by written certificate furnished to the Issuer
and the Trustee containing the signature of such person or persons and signed on
behalf of the Company by its President or any Vice President. Such certificate
may designate an alternate or alternates.
"Cost" with respect to the Project shall be deemed to include all items
permitted to be financed under the provisions of the Act, including, but not
limited to:
(i) all costs which the Issuer or the Company shall be required to
pay under the terms of any contract or contracts for the acquisition,
construction, improving, or equipping of the Project;
(ii) obligations of the Company incurred for labor and materials
(including obligations payable to the Company) in connection with the
acquisition, construction, improving or equipping of the Project,
including reimbursement to the Company for all advances and payments made
in connection with the Project prior to or after delivery of the Bonds;
(iii) the cost of performance or other bonds and any and all types of
insurance that may be necessary or appropriate to have in effect during the
course of construction of the Project;
(iv) the cost of refunding the Series I Bonds;
(v) all costs of engineering and architectural services, including
the costs of the Company for test borings, surveys, estimates, plans and
specifications and preliminary investigations therefor, and for supervising
construction, as well as for the performance of all other duties required
by for consequent to the proper construction of the Project;
(vi) all expenses incurred in connection with the issuance of the
Bonds, including but not limited to, compensation, fees and expenses of the
Issuer and the Trustee including reasonable counsel fees, compensation to
any financial consultant, underwriters or placement agents, legal fees and
expenses, costs of printing and engraving, and recording and filing fees
and costs of title insurance, if any; and
(vii) any sums required to reimburse the Company for advances made by
the Company for any of the above items or for
I-4
any other costs incurred which are properly chargeable to the Project.
"Cumulative Combined Net Income" for any specified period means the sum of
Combined Net Income for each of such periods (subtracting Combined Net Income
for any period in which it is negative, as appropriate).
"Date of Issue" or "Issue Date" shall have the meaning set forth in the Tax
Certificate.
"Debt Service" means, for any Bond Year, the scheduled amount of interest
and amortization of principal payable for that Bond Year with respect to the
Bonds; provided, however, that in determining Debt Service for any Bond Year,
there shall not be taken into account amounts scheduled with respect to any
Bonds (or portion thereof) that have been retired before the beginning of the
Bond Year. The determination of Debt Service on the Bonds shall be made on the
first day of each Bond Year in the manner provided in Section 148(d) of the Code
and the regulations promulgated thereunder.
"Default" means any Default under this Agreement as specified in and
defined by Section 9.1 hereof.
"Distribution Fund" shall have the meaning set forth in Section 2.4(f)
hereof.
"ERISA" means the federal Employee Retirement Income Security Act of 1974,
as amended, and the rules and regulations thereunder.
"Event of Cancellation" means any Event of Cancellation as defined in
Section 9.3(A) hereof.
"Excess Amount" means, as of any payment date, the amount in the Bond Fund
on such date in excess of the amount required for the payment of principal,
accrued interest and premium, if any, on the Bonds due on such date.
"Fiscal Year" means January 1 through December 31.
"Gross Proceeds" shall have the meaning set forth in the Tax Certificate.
"Guarantor" means any of X.X. Xxxxxxxx & Co., Inc., Refrigerated
Distribution Center, Inc., Oregon Avenue Enterprises, Incorporated, Xxxx Cargo
Systems, Inc., The Riverfront Development Corp., CRT, Inc., Xxxxxx Xxxxx Ice,
Inc., Xxxxxxxx Avenue Warehousing Corp., Refrigerated Enterprises, Inc., 000
Xxxxxxxx Xxx., Inc., Dockside International Fish Co., Inc. and Xxxxxx Marine
I-5
Services, Inc. and any other Person required to be a guarantor under the
Guaranty.
"Guaranty" means the Series J Guaranty Agreement dated as of June 1, 1995
among the Guarantors and the Trustee, and any amendments or supplements thereto.
"Indebtedness" means, for any Person, (i) all indebtedness of such Person
for borrowed money or for the deferred purchase price of property, (ii) all
direct or indirect guaranties of such Person in respect of and all obligations
or undertakings (contingent or otherwise) of such Person to purchase or
otherwise acquire, or otherwise to assure a creditor against loss in respect of,
indebtedness of any other Person for borrowed money or for the deferred purchase
price of property and (iii) all other obligations, contingent or otherwise,
which in accordance with generally accepted accounting principles consistently
applied shall be classified upon the obligor's balance sheet as liabilities,
including liabilities secured by any lien on any property owned or acquired by
the obligor or a Subsidiary thereof, whether or not the liabilities secured
thereby shall have been assumed, capitalized leases and all guaranties,
endorsements and other contingent obligations. For purposes of determining the
amount of Indebtedness of a Person, the total amount of Indebtedness of another
Person as to which such Person is obligated described in clause (ii) or (iii)
above, or the total possible payments which such Person may become obligated to
make in respect of a contingent liability, shall be considered Indebtedness of
such Person.
"Indemnified Party" shall have the meaning set forth in Section 8.2(b).
"Indenture" means the Series J Indenture of Trust dated as of June 1, 1995
between the Issuer and the Trustee, pursuant to which the Bonds are authorized
to be issued, and any amendments and supplements thereto.
"Initial Temporary Period" shall have the meaning set forth in the Tax
Certificate.
"Issuer" means the New Jersey Economic Development Authority, a public body
corporate and politic constituting an instrumentality of the State, 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.
"Issuer Representative" means such person or persons at the time designated
by the Issuer to act on its behalf.
"Liens" means any mortgages, pledges, liens or other charges or
encumbrances of any kind (including the charge upon
I-6
property purchased under conditional sale or other title retention agreements)
upon, or any security interest in, any property, real or personal, tangible or
intangible.
"Loan" means the Series J loan in the aggregate principal amount of
$5,000,000 made by the Issuer, as lender, from the proceeds of the sale of the
Series J Bonds, to the Company, as borrower, to provide funds for the refunding
of the Series I Bonds, all in accordance with the terms of this Agreement.
"Loan Documents" means any or all of this Agreement, the Indenture, the
Bond Placement Agreement, the Mortgage, the Guaranty, the Assignment and all
documents, certificates and instruments executed in connection therewith.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Mortgage" means the Series J Mortgage and Security Agreement dated as of
June 1, 1995 from the Company to the Trustee under which the Company grants to
the Trustee a mortgage lien on and a security interest in the Project Facility
to secure payment of the Company's obligations contained in Section 4.2(a)
hereof, and any amendments and supplements thereto.
"Net Proceeds," when used with respect to any insurance proceeds or any
condemnation award, means the amount remaining after deducting all expenses
(including attorneys' fees and disbursements) incurred in the collection of such
proceeds or award from the gross proceeds thereof.
"1954 Code" means the Internal Revenue Code of 1954, as in effect on the
day prior to the effective date of the Code.
"Nonpurpose Obligation" shall have the meaning set forth in the Tax
Certificate.
"Owner" means the person or persons in whose name or names a Bond shall be
registered on the books of the Issuer kept for that purpose in accordance with
the provisions of the Indenture.
"Permitted Encumbrances" means, as of any particular time, (i) those items
shown in Exhibit C hereto, and (ii) any Indebtedness secured by a Lien on the
Project Facility hereafter incurred by the Company or any of its Subsidiaries
and Affiliates in accordance with the provisions of this Agreement.
"Person" or "Persons" means any one or more individuals, corporations,
partnerships, joint ventures, trusts, unincorporated organizations, limited
liability companies, governmental agencies or political subdivisions.
I-7
"Plans" shall have the meaning set forth in Section 2.2(h) hereof.
"Placement Agent" means PaineWebber Incorporated and its successors and
assigns.
"Placement Memorandum" means the placement memorandum distributed in
connection with the placement of the Bonds.
"Prime Rate" means a fluctuating interest rate per annum equal to the rate
published in The Wall Street Journal from time to time as the prime lending
rate; any change in the Prime Rate shall be effective on the date such change is
published in The Wall Street Journal.
"Private Activity Bond" means a private activity bond as defined in Section
141 of the Code.
"Project" means the acquisition and filling of approximately 18.6 acres of
tidewater property (including the cost of off-site mitigation required by
environmental permits), the renovation of an existing building of approximately
36,500 square feet into a refrigerated warehouse and certain additional building
renovations, the performance of certain site improvements, including the
renovation of a collapsed pier, the construction of two marginal piers and
certain paving, grading and filling costs, and the purchase and installation of
machinery and equipment, including container cranes, bulldozers, forklift trucks
and other peripheral equipment for use in the loading and unloading of
ocean-going vessels, all part of a public port facility and property
functionally related and subordinate thereto, all to be located in the Project
Municipality.
"Project Facility" means the marine terminal complex, consisting of land
and improvements existing or to be constructed thereon, and all fixtures and
other personalty affixed thereto, which is or will be owned by the Company and
located in the Project Municipality, the location of which is more fully
described in Exhibit A annexed hereto, including any additions, substitutions
and replacements which have been or will be acquired and constructed thereon.
"Project Fund" means the fund so designated which is established and
created pursuant to Section 5.05 of the Indenture.
"Project Municipality" means the City of Gloucester City, County of Camden,
New Jersey.
"Purchaser" means the purchaser or purchasers of the Series J Bonds, and
their successors and assigns.
I-8
"Rebate Fund" means the fund so designated which is established pursuant to
Section 5.12 of the Indenture.
"Rebate Requirement" shall have the meaning set forth in the Tax
Certificate.
"Related Party" means the Company, any Subsidiary or Affiliate, any Person
controlling the Company or Affiliate and any director or employee of the
Company, any Subsidiary, or any Affiliate.
"Related Person" means a related person within the meaning of Section
103(b)(6)(C) of the 1954 Code.
"Requisition" means a written request for a disbursement from the Project
Fund or the separate trust fund described in Section 6.2 hereof, as the case may
be, signed by a Company Representative, substantially in the form attached
hereto as Exhibit B and satisfactorily completed as contemplated by said form.
"Restricted Payment" means:
(i) The declaration of any dividend on, or the incurrence of any
liability to make any other payment or distribution in respect of, any
shares of the Company, its Subsidiaries or Affiliates (other than one
payable solely in its common shares);
(ii) Any payment or distribution on an account of the purchase,
redemption or other retirement of any shares of the Company, its
Subsidiaries or Affiliates or of any warrant, option or other right to
acquire such shares, or any other payment or distribution made in respect
thereof, either directly or indirectly, except any payment or distribution
on account of (A) the principal of and prepayment charge, if any, on
convertible debt, or (B) the purchase, redemption or other retirement of
shares of the Company, its Subsidiaries or Affiliates in exchange for, or
out of the net cash proceeds received by the Company, its Subsidiaries or
Affiliates from a substantially concurrent sale of, other shares of the
Company, its Subsidiaries or Affiliates; and
(iii) Any payment or distribution on account of the principal and
prepayment charge, if any, with respect to subordinated debt of the
Company, its Subsidiaries or Affiliates other than mandatory sinking fund
or other retirement payments required by the terms thereof, and other than
any working capital line of credit secured by a mortgage.
I-9
The amount of a Restricted Payment in property shall be deemed to be the
greater of its fair market value (as determined by an independent recognized
appraiser) or its net book value.
"Security Ratio" means at any time the value of the property subject to the
lien of the Mortgage, as such value is determined by an appraisal required by
Section 2.4(k) hereof, divided by the sum of (i) the amount (including interest
which has accrued and is being deferred) of Senior Indebtedness, plus (ii) the
amount of the Bonds outstanding, plus (iii) the amount (including interest which
has accrued and is being deferred) of the Indebtedness outstanding to the City
of Gloucester City secured by the mortgages described in Exhibit C hereto.
"Senior Indebtedness" shall have the meaning set forth in Section 2.4(k)
hereof.
"Series I Bonds" means one or more of the Variable/Fixed Rate Economic
Development Bonds (Xxxx Hauling and Warehousing System, Inc.--1983 Project)
1993 Series I of the Issuer in the aggregate principal amount of $5,000,000
which were issued on November 10, 1993, and are being refunded with the
proceeds of the Series J Bonds.
"S & P" means Standard & Poor's Ratings Group.
"State" means the State of New Jersey.
"Subsidiary" means any entity of which at least a majority of the
outstanding stock having by the terms thereof ordinary voting power to elect a
majority of the board of directors of such corporation (irrespective of whether
or not at the time stock of any other class or classes of such corporation shall
have or might have voting power by reason of the happening of any contingencies)
is at the time directly or indirectly owned or controlled by the Company or one
or more of its subsidiaries.
"Substantial User" means a substantial user within the meaning of Section
103(b)(13) of the 1954 Code or Section 147(a) of the Code.
"Tax Certificate" means the Certificate as to Arbitrage and Compliance with
the Internal Revenue Code of 1986 executed and delivered by the Company and the
Issuer on the Date of Issue.
"Taxes" shall have the meaning set forth in Section 5.3 hereof.
"Term of Agreement" means the term of this Agreement as specified in
Section 11.1 hereof.
I-10
"Trustee" means The Bank of New York (NJ), a national banking association,
and its successors and any corporation resulting from or surviving any
consolidation or merger to which it or its successors may be a party and any
successor trustee at the time serving as successor trustee under the Indenture.
"Principal Office" of the Trustee means the address specified in Section 12.04
of the Indenture or such other address as may be designated in writing to the
Issuer and the Company.
"Uniform Commercial Code" means the Uniform Commercial Code, Title 12A of
the New Jersey Statutes, as enacted and in force and effect in the State.
"Yield" shall have the meaning set forth in the Tax Certificate.
Section 1.2. Interpretation and Construction. In this Loan Agreement,
unless the context otherwise requires:
(1) Articles and Sections mentioned by number only are the respective
Articles and Sections of this Loan Agreement so numbered as originally executed;
(2) Words importing a particular gender mean and include every other
gender, words importing the singular number mean and include the plural
number and vice versa;
(3) Words importing persons mean and include firms, associations,
partnerships (including limited partnerships), societies, trusts, public or
private corporations or other legal entities, including public or governmental
bodies, as well as natural persons;
(4) Any headings preceding the texts of the several Articles and Sections
of this Loan Agreement, and any table of contents or marginal notes appended to
copies hereof, shall be solely for convenience of reference and shall not
constitute a part of this Loan Agreement, nor shall they affect its meaning,
construction or effect;
(5) If any clause, provision or section of this Loan Agreement or the
application thereof to any circumstance shall be ruled invalid or unenforceable
by any court of competent jurisdiction, such holding shall not invalidate or
render unenforceable any of the remaining provisions hereof or the application
of such clause, provision or section to circumstances other than those as to
which it is held invalid or unenforceable.
I-11
(6) References herein to the Issuer, the Trustee, the Company and the
Purchaser shall include their respective successors and assigns.
[END OF ARTICLE I]
I-12
ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES
Section 2.1. Representations and Covenants of the Issuer. (a) The
Issuer represents and covenants that:
(1) The Issuer is a public body corporate and politic constituting an
instrumentality of the State duly organized and existing under the laws of the
State. Under the provisions of the Act, the Issuer is authorized to enter into
the transactions contemplated by this Loan Agreement and the Indenture and to
carry out its obligations hereunder and thereunder. The Issuer has been duly
authorized to execute and deliver this Agreement and the Indenture.
(2) The Issuer covenants that it will not pledge the amounts derived
from this Loan Agreement other than as contemplated by the Indenture.
(b) All covenants, stipulations, promises, agreements and obligations
of the Issuer set forth herein shall be deemed to be the covenants,
stipulations, promises, agreements and obligations of the Issuer and not of any
member, officer or employee of the Issuer in his or her individual capacity,
and no recourse shall be had for the payment of the principal or redemption
price of or interest on the Bonds or for any claim based thereon or hereunder
against any member, officer or employee of the Issuer or any person executing
the Bonds.
Section 2. 2. Representations and Warranties of the Company. The
Company represents and warrants that:
(a) Corporate Status. The Company and each of its Subsidiaries and
Affiliates is a duly organized and validly existing corporation in good standing
under the laws of the state of its incorporation. The Company and each of its
Subsidiaries and Affiliates are duly qualified or licensed as foreign
corporations in good standing in every jurisdiction in which the nature of the
respective businesses conducted makes such qualification or licensing necessary.
The Company has no Subsidiary or Affiliate other than as listed in the
definition of the term "Affiliate" set forth in Article I hereof.
(b) Corporate Power and Authority. The Company has the corporate power
and authority to own its property and assets and to transact the business in
which it is engaged or presently proposes to engage. The Company is not in
violation of any provision of its Certificate of Incorporation, as amended. The
Company and each of its Subsidiaries and Affiliates has the corporate power and
authority to execute, deliver, perform its obligations under, and
II-1
consummate the transactions contemplated by this Agreement and the other Loan
Documents to which each is a party; and has taken all necessary corporate action
(including, without limitation, any consent of stockholders required by law or
by its charter or by-laws) to authorize the execution and delivery of this
Agreement and each of the other Loan Documents to which each is a party. This
Agreement and the Loan Documents to which the Company and its Subsidiaries and
Affiliates are parties each constitutes the legal, valid, and binding
obligations of the Company and its Subsidiaries and Affiliates, as applicable,
enforceable in accordance with their terms subject to applicable bankruptcy,
insolvency, or other similar laws relating to creditors' rights generally.
(c) No Litigation. There is no action, suit, proceeding, inquiry, or
investigation pending or, to the knowledge of the Company, threatened against or
affecting the Company, its officers, or any Subsidiary or Affiliate, or any of
their respective properties, by or before any court, arbitrator or governmental,
administrative, or public body or agency, nor to the best knowledge of the
Company is there any basis therefor, which might result in any material adverse
change in the operations, business, property, or assets or in the condition
(financial or otherwise) of the Company and its Subsidiaries and Affiliates or
which involves the possibility of materially adversely affecting the ability of
the Company or any of its Subsidiaries or Affiliates to comply with this
Agreement or any of the other Loan Documents to which the Company or any of its
Subsidiaries or Affiliates is a party, or which would adversely affect, in any
way, the validity or enforceability of the Bonds, this Agreement, any of the
Loan Documents to which the Company or any of its Subsidiaries or Affiliates is
a party, or any agreement or instrument to which the Company is a party, used or
contemplated for use in the consummation of the transactions contemplated
hereby. The Company is not, nor to the knowledge of the Company are any of its
Subsidiaries or Affiliates, in default in any material respect with respect to
any judgment, order, writ, injunction, decree, rule or regulation of any
governmental instrumentality or agency.
(d) No Violation. (i) Neither the execution and delivery of this
Agreement or the Loan Documents, nor the consummation of any of the
transactions herein or therein contemplated, nor the fulfillment of or
compliance with the terms and provisions hereof or thereof, will contravene any
provision of any law, statute, rule or regulation to which the Company or any of
its Subsidiaries or Affiliates is subject or any judgment, decree, license,
order, or permit applicable to the Company or any of its Subsidiaries or
Affiliates, or will conflict or be inconsistent with, or will result in any
breach of, any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of any Lien,
security interest, charge or encumbrance whatsoever upon any of the property or
assets of the Company or its Subsidiaries or Affiliates pursuant to
II-2
the terms of any indenture, mortgage, deed of trust, agreement, or other
instrument to which the Company or any of its Subsidiaries or Affiliates is a
party or by which any of them may be bound, or to which any of them may be
subject, or violate any provision of the charter or by-laws of the Company or
any of its Subsidiaries or Affiliates.
(ii) Neither the Company nor any of its Affiliates or Subsidiaries
is a party to any contract or agreement or subject to any charter or other
corporate restriction which materially and adversely affects its business,
property, assets or financial condition. Neither the Company nor any Subsidiary
or Affiliate is a party to, or otherwise subject to any provision contained in,
any instrument evidencing Indebtedness of the Company or such Subsidiary or
Affiliate, any agreement relating thereto, or any other contract or agreement
(including its charter) which restricts or otherwise limits the incurring of the
Indebtedness to be represented by this Agreement and the other Loan Documents.
(e) Governmental Approval. No consent or approval of, or filing with,
or exemption by, any governmental or public body or authority is required to
authorize, or is required in connection with the execution, delivery, and
performance of, this Agreement, any of the other Loan Documents, or of any of
the instruments or agreements herein or therein referred to, or the taking of
any action hereby or thereby contemplated. The Company and its Subsidiaries and
Affiliates and the Project Facility are in compliance in all material respects
with all applicable requirements of all federal, state, regional and local laws
and with rules and regulations of federal, state, regional and local
governmental and regulatory bodies. Without limiting the foregoing, the Company
and its Subsidiaries and Affiliates and the Project and Project Facility are in
compliance with all applicable environmental laws, including without limitation
the permits, licenses and approvals issued by the U.S. Army Corps of Engineers
pursuant to the Federal Clean Water Act and the Federal River and Harbors Act
and by the New Jersey Department of Environmental Affairs for waterfront
development, stream encroachment and the grant of riparian rights.
(f) Margin Regulations. Neither the Company nor any of its Subsidiaries
or affiliates is engaged principally in, or as one of its important activities
is involved in, the business of extending credit for the purpose of purchasing
or carrying any Margin Stock (as defined in 12 C.F.R. 221.3(v) or in any
successor provision thereto). The proceeds of the loans made pursuant to the
Loan Agreement will not be used in violation of Regulation U of the Board of
Governors of the Federal Reserve System as from time to time in effect or any
successor thereto.
(g) Financial Condition. The combined comparative balance sheet of the
Company, its Subsidiaries, and its combined
II-3
Affiliates as at December 31, 1994, and the combined comparative statements of
income, changes in financial position and retained earnings of the Company, its
Subsidiaries, and its Affiliates for the fiscal year ending on said date, all
certified by BDO Xxxxxxx, all of which have heretofore been furnished to the
Purchaser, fairly reflect the combined comparative financial condition of the
Company, its Subsidiaries and its Affiliates at the respective dates thereof,
and the results of the operations of the Company, its Subsidiaries, and its
Affiliates for the periods covered thereby. The financial statements included in
the Placement Memorandum (including any related schedules or notes) are true and
correct in all material respects (subject, as to interim statements, to changes
resulting from audits and year-end adjustments) and have been prepared in
conformity with generally accepted accounting principles applied on a consistent
basis throughout the periods involved and show all liabilities, direct and
contingent, of the Company and its consolidated Subsidiaries and Affiliates
required to be shown in accordance with such principles. Since December 31, 1994
there has been no material adverse change in the combined financial condition of
the Company, its Subsidiaries, and its Affiliates from that shown by the balance
sheet as at that date.
(h) Compliance with ERISA. The pension or other employee benefit plans
which are established or maintained by the Company and each of its Subsidiaries
and Affiliates (the "Plans") are in substantial compliance with ERISA; no Plan
is insolvent or in reorganization; no plan has an accumulated or waived funding
deficiency within the meaning of Section 412 of the Code; neither the Company
nor any of its Subsidiaries or Affiliates, nor any ERISA Affiliate, has incurred
any material liability (including any material contingent liability) to or on
account of a Plan pursuant to Section 4062, 4063, 4064, 4201, or 4204 of ERISA
or expects to incur any liability under any of the foregoing Sections on account
of the termination of participation in or contributions to any such Plan; no
proceedings have been instituted to terminate any Plan; no condition exists
which presents a material risk to the Company, any Subsidiary, or any Affiliate,
respectively, of incurring a liability to or on account of a Plan pursuant to
any of the foregoing Sections of ERISA; and no lien imposed under the Code or
ERISA on the assets of the Company or any Affiliate or Subsidiary exists or is
likely to arise on account of any Plan.
(i) Title to Property. To the best of the Company's knowledge, the
Company and its Subsidiaries and Affiliates have good and marketable title to
all their respective properties and assets (i) reflected on the latest combined
balance sheet referred to in Section 2.2(g) and (ii) comprising the Project
Facility (as defined in the Indenture) and the property subject to the Mortgage,
and all such properties and assets are free and clear of Liens, except (A) Liens
disclosed on such balance sheet, (B) materialmen's and mechanic's Liens which do
not materially detract from the value
II-4
or interfere with the present or anticipated business use of the properties
subject thereto, and (C) those Permitted Encumbrances described on Exhibit C
annexed hereto. To the best of the Company's knowledge, upon execution and
delivery of this Agreement and the documents contemplated hereby and upon any
filings or recordings made in connection therewith, the Mortgage will be a valid
lien on the Project Facility subject and subordinate only to Permitted
Encumbrances.
(j) Tax Returns. All tax returns and tax reports of the Company and
each of its former and present Subsidiaries and Affiliates required by law to be
filed have been duly filed, and all taxes, assessments, and other governmental
charges or levies (other than those presently payable without penalty and those
currently being contested in good faith for which adequate reserves have been
established) upon the Company or any of its former or present Subsidiaries and
Affiliates (or any of their properties) which are due and payable have been paid
in full. The charges, accruals and reserves on the books of the Company and its
affiliates in respect of federal income tax for all periods are adequate in the
opinion of the Company.
(k) Disclosure. There is no fact known to the Company which materially
adversely affects or in the future may (so far as the Company can now foresee)
materially adversely affect the business, property, assets, or financial
condition of the Company or any of its Subsidiaries or Affiliates which has not
been set forth in the Loan Documents.
(1) The Project. The Project is included within the definition of a
"project" in the Act and the Company will operate or cause the Project to be
operated as a "project" under the Act.
(m) [Intentionally omitted]
(n) Compliance with Laws. The Company will cause the Project and the
Project Facility to be operated in accordance with the laws, rulings,
regulations, and ordinances of federal and state governmental bodies and the
departments, agencies and political subdivisions thereof. The Company has
obtained or caused to be obtained all requisite approvals or permits or licenses
of the State and of other federal, state, regional and local governmental bodies
for the acquisition, construction, improving, and equipping of the Project and
the operation of the Project Facility, and will obtain or cause to be obtained
any such approvals, permits or licenses as may be required in the future from
time to time.
(o) Information in Application Accurate. All information and data
contained in the Application relating to the Company were true, correct, and
complete in all material respects as of the date thereof. Aside from financial
information relating to the Company, which information has not been updated
since the date of
II-5
submission of the Application, no information has been omitted therefrom which
would make the Application misleading in any material respect, and the
Application does not contain any untrue statement of a material fact and does
not omit to state a material fact necessary in order to make the statements
contained therein not misleading or incomplete.
(p) Inducement. The availability of financial assistance from the
Issuer as provided for herein was an important inducement to the Company to
undertake the Project and to locate the Project in the State.
(q) No Untrue Statements. The representations, statements, and
warranties of the Company set forth in the Application, this Agreement, or any
other Loan Document (1) are true, correct, and complete in all material
respects, (2) do not contain any untrue statement of a material fact, and (3) do
not omit to state a material fact necessary in order to make the statements
contained herein or therein not misleading or incomplete. The Company
understands that all such statements, representations, and warranties have been
relied upon as an inducement by the Issuer to make the Loan and the Purchaser to
purchase the Bonds.
(r) Brokerage Commissions. Except for a placement fee payable to the
Placement Agent, no Person is entitled to receive from the Company or any other
Person any brokerage commission, finder's fee, or similar fee or payment in
connection with the consummation of the transactions contemplated by this
Agreement.
(s) Commencement of Project. Except as otherwise disclosed in the
Application, the Project commenced subsequent to May 24, 1983, the date upon
which the Issuer adopted a resolution preliminarily approving the Project, and
prior to such date neither the Company nor any Related Person commenced or
caused to be commenced any off-site production or entered into an agreement
binding the Company or any Related Person to proceed with the Project.
(t) Prevailing Wages and Affirmative Action. The Company is fully
familiar with the Issuer's Prevailing Wage Regulations and Affirmative Action
Program and has submitted to the Issuer all reports and certificates required to
date pursuant to the Prevailing Wage Regulations and Affirmative Action Program.
Section 2.3. [Intentionally Omitted]
Section 2.4. Covenants of the Company. The Company agrees that, so long
as any of the Bonds are outstanding or any amounts are due under this Agreement
or under any of the Loan Documents, it shall comply and shall cause each of its
Subsidiaries and Affiliates to comply with the following provisions:
II-6
(a) Compliance with Agreement. The Company shall observe and perform
all of its obligations under this Agreement and the Loan Documents to which it
is a party. The Company shall fully and faithfully perform all the duties and
obligations which the Issuer has covenanted and agreed in the Indenture to cause
the Company to perform and any duties and obligations which the Company is
required in the Indenture to perform.
(b) Notice of Default, Litigation, Etc. (i) The Company shall furnish
to the Trustee as soon as possible and in any event within five (5) Business
Days after the discovery by any executive officer of the Company of any Default,
a certificate setting forth the details of such Default, and the action which
the Company proposes to take with respect thereto.
(ii) The Company shall give prompt notice to the Trustee of any
litigation or governmental proceeding pending, involving or, to its knowledge,
threatened against the Company, any Subsidiary or any Affiliate which (A)
involves an uninsured claim or the uninsured portion or deductible of an insured
claim which is over $500,000 or (B) if adversely determined, would have a
material adverse effect on the business or financial condition of the Company,
any Subsidiary, or any Affiliate.
(c) Corporate Existence. The Company covenants that it shall maintain
its corporate existence in good standing under the laws of the Commonwealth of
Pennsylvania, shall cause each of its Subsidiaries and Affiliates to maintain
its corporate existence in good standing under the laws of its respective
jurisdiction of incorporation, and shall maintain, in each jurisdiction where
material to the business of the Company or any of its Subsidiaries and
Affiliates or the maintenance of the Collateral, its and each of their right to
transact business in each jurisdiction in which the nature of its or their
business or the character of the properties which it or they own or lease
requires qualification as a foreign corporation and where failure to so qualify
would permanently preclude the Company or any of its Subsidiaries or Affiliates,
as the case may be, from enforcing its rights with respect to its assets. No
Subsidiary or Affiliate shall be incorporated in any jurisdiction if in the
opinion of the Trustee the laws of such jurisdiction would restrict or otherwise
adversely affect the ability of such Subsidiary or Affiliate to perform its
obligations under the Guaranty. The Company and each Subsidiary and Affiliate
will comply in all material respects with all applicable laws, ordinances,
rules, regulations, and requirements of governmental authorities, except where
the necessity of compliance therewith is contested in good faith by appropriate
proceedings and the effect of non compliance during such contest will not have a
material adverse effect upon the business, properties, or condition, financial
or otherwise, of the Company or any Subsidiary or Affiliate or result in the
imposition of any Lien on the properties of any of them (unless the enforcement
of any
II-7
such Lien has been and continues to be effectively stayed). The Company will and
will cause its Subsidiaries and Affiliates to preserve and keep in full force
and effect all rights, licenses, registrations, and franchises necessary (i) to
the proper conduct of their business or affairs and (ii) to continue to operate
their business as presently operated.
(d) Acquisition, Merger or Consolidation; Sale of Substantially All
Assets. Neither the Company nor any Subsidiary or Affiliate shall sell, lease,
assign, transfer, or otherwise dispose of any assets from and after the date
hereof (i) for less than fair market value or (ii) if the total of the net book
value of all assets sold, leased, or otherwise assigned or disposed of from and
after the date hereof exceeds 25% of total combined assets of the Company and
all of its Subsidiaries and Affiliates, as the case may be. The Company shall
not permit in any event any such event to occur unless the Company has complied
with the provisions of Section 8.1. In addition, in the event of any sale of any
property subject to the lien of the Mortgage or any part thereof, the Company
shall make or set aside in trust for prepayments or payments of Senior
Indebtedness, or if no such Indebtedness is outstanding, the Bonds and any
Indebtedness on a parity with the Bonds incurred in compliance with Section
2.4(h) of this Agreement, in an amount equal to the greater of (x) the
sales price of such property sold or (y) 60% of the appraised fair market value
thereof. Notwithstanding the foregoing, neither the Company nor any Subsidiary
or Affiliate shall sell, lease, or otherwise transfer or dispose of any asset
if, after giving effect to such sale, lease, or other transfer or disposition,
there shall exist any Default.
Neither the Company nor any Subsidiary or Affiliate shall merge or
consolidate with or into or acquire all or substantially all of the assets of
any other Person, provided that the Company or any Subsidiary or Affiliate may
merge or consolidate with or into or acquire all or substantially all of such
assets of another corporation (i) if the acquiring corporation is the Company or
a corporation duly organized in good standing under the laws of a State of the
United States, (ii) if each of the representations and warranties set forth in
paragraphs (a) through (f), inclusive, (h), (i), (j), and (n) of Section 2.2
of this Agreement remains true and correct immediately after giving effect to
such merger, consolidation or asset acquisition, (iii) if the surviving
corporation is not the Company, the surviving corporation expressly assumes all
of the covenants and obligations of its predecessor under this Agreement and
each of the Loan Documents and otherwise in respect of the Bonds, (iv) the
Company or the surviving corporation could immediately after giving effect to
the transaction, incur at least $1.00 of Indebtedness pursuant to Section 2.4(h)
hereof, (v) if the surviving corporation has rated debt securities, such debt
securities are rated by a nationally recognized credit rating agency and such
rating is investment grade
II-8
or better (e.g., if by S & P, "BBB" or better and if by Xxxxx'x, "Baa" or
better), and (vi) the Trustee shall have received an opinion of Bond Counsel to
the effect that such merger, consolidation or acquisition of assets will not
adversely affect the exemption of interest on the Series J Bonds from federal
income taxation, a certificate of the Chief Financial Officer stating that none
of the covenants contained in this Agreement will be violated as a result of
such merger, consolidation or acquisition of assets, and such other agreements,
certificates, opinions, and documents as the Trustee shall have reasonably
requested. Notwithstanding the foregoing, any such transaction must comply in
all respects with the conditions of Section 8.1.
The Company agrees to notify the Purchaser of its intent to merge,
consolidate or acquire assets pursuant to this paragraph at least 10 days prior
to entering into any binding agreements with respect to such acquisition.
Notwithstanding the foregoing, the Company shall have the right at any
time and from time to time to (i) merge or consolidate any Subsidiary or
Affiliate with or into it (provided the Company is the surviving corporation) or
with or into any other Subsidiary or Affiliate, or (ii) acquire substantially
all of the assets, or cause any other Subsidiary or Affiliate to acquire
substantially all of the assets, of any Subsidiary or Affiliate (other than the
Company), without regard to the provisions of the immediately preceding
paragraph of this Section 2.4(d), but subject to the provisions of Section 8.1.
(e) Financial Statements; Inspections. (i) The Company shall deliver to
the Trustee and the Purchaser (A) as soon as available but in any event within
120 days after the end of each Fiscal Year a combined and combining comparative
statement of income, reconciliation of capital accounts and related balance
sheets for the Company, its Subsidiaries and its Affiliates for such year
prepared in conformity with generally accepted accounting principles
consistently applied and in reasonable detail (such combined statements to be
audited and certified by an accounting firm with an unqualified opinion and such
combining statements to be unaudited and certified by the Chief Financial
Officer, (B) as soon as available but in any event within 60 days after the end
of each of the first three fiscal quarters of each Fiscal Year, a combined
comparative statement of income, reconciliation of capital accounts, and related
balance sheet for such quarter and for the period from the beginning of the then
fiscal year to the end of such quarter, prepared in accordance with generally
accepted accounting principles consistently applied (subject to year-end
adjustments) and in reasonable detail (all of which shall be unaudited and
certified by the Chief Financial Officer, whose certificate shall be
satisfactory to the Trustee) for the Company, its Subsidiaries, and its
Affiliates, (C) upon request, copies of all such regular or periodic reports,
which are available for
II-9
public inspection, which the Company may be required to file with any federal or
state department, bureau, commission, or agency, (D) such other financial data
as the Trustee may reasonably request and which is reasonably available to the
Company, and (E) copies of any statements, notices, certificates, and other
information required to be furnished to the Issuer under this Agreement,
including without limitation Section 7.9 hereof, on the date such information is
required to be so furnished. In addition, the Company shall deliver within 90
days after the end of each of the first three fiscal quarters of each Fiscal
Year combining statements for any such reporting period during which the
Company's investment in any Subsidiary or Affiliate shall account for 15% or
more of Combined Tangible Net Worth or 15% or more of combined sales and
revenues, such combining statements to be unaudited and certified by the Chief
Financial Officer. All financial statements specified in clauses (A) and (B)
above shall be furnished in combined comparative form for the Company, its
Subsidiaries, and its Affiliates with comparative figures for the corresponding
period in the preceding year, and shall be accompanied by a certificate signed
by the Chief Financial Officer, with appropriate documentation substantiating
all financial calculations, stating that there exists no Default or, if any such
Default exists, stating the nature thereof and what action the Company proposes
to take with respect thereto.
(ii) The Company shall permit, and shall cause each of its
Subsidiaries and Affiliates to permit, any Person designated by the Issuer, the
Trustee or the Purchaser, at their own expense, to visit and inspect the
properties of the Company and each of its Subsidiaries and Affiliates and to
examine the books and records, including financial records of the Company, its
Subsidiaries and Affiliates, and make copies or extracts thereof, and to discuss
the affairs, finances, and accounts of the Company, its Subsidiaries and
Affiliates, with its and their officers, at such reasonable times as the Issuer
or the Trustee may reasonably request.
(f) Restricted Payments. Neither the Company nor any of its
Subsidiaries or Affiliates shall make any Restricted Payment or set aside any
funds therefor unless, after giving effect thereto, the aggregate of such
Restricted Payments for all such purposes subsequent to the Closing Date would
not exceed the sum (as in effect from time to time, hereinafter referred to as
the "Distribution Fund") of (i) 50% of the Company's Cumulative Combined Net
Income subsequent to December 31, 1991 so long as the Company's Combined
Tangible Net Worth is greater than $31,051,000, (ii) the aggregate of the net
cash proceeds received by the Company from any issuance or sale of capital
shares of the Company subsequent to the Closing Date, and (iii) the aggregate of
the net cash proceeds received by the Company from any issuance of any
Indebtedness of the Company which has been converted into capital shares of the
Company subsequent to the Closing Date, which amount shall be added to the
Distribution Fund only after such conversion.
II-10
Notwithstanding the foregoing, the Company may acquire its own capital shares
for an aggregate amount from and after the Closing date equal to the greater of
(x) the sum of (i) 25% of the Cumulative Combined Net Income of the Company
subsequent to December 31, 1991, plus (ii) $500,000, or (y) the amount then
available under the Distribution Fund, which amount shall be charged to the
Distribution Fund. No Restricted Payment may be made in other than cash or
securities which are actively traded on a nationally recognized public market
and have a readily ascertainable market value (which value shall be the amount
of such Restricted Payment), unless the Company shall have received a report
from an independent recognized appraiser as to the fair value of the property to
be distributed or transferred, in which case the amount of such Restricted
Payment shall be deemed to be the greater of its fair value (as determined by
such appraiser) or its net book value on the books of the Company.
Notwithstanding any of the foregoing provisions of this paragraph, neither the
Company nor any Subsidiary or Affiliate shall make any Restricted Payment if at
the time or after giving effect thereto, there shall exist any Default.
(g) Maintenance of Combined Tangible Net Worth. The Company shall at
all times maintain a Combined Tangible Net Worth of (i) not less than
$31,051,000, plus 50% of the Company's Aggregate Combined Net Income at the end
of each fiscal year subsequent to the fiscal year ending December 31, 1991 and
(ii) not less than 25% of Combined Long Term Indebtedness but in no event less
than $31,051,000.
(h) Limitation of Total Indebtedness. Neither the Company nor any of
its Subsidiaries or Affiliates shall incur additional Indebtedness if, at the
time such Indebtedness is incurred and after giving effect thereto and to any
concurrent reduction of Indebtedness, Combined Indebtedness would exceed 400% of
Combined Tangible Net Worth.
(i) Times Interest Earned. The ratio of (i) the Company's Combined Net
Income Before Interest and Taxes to (ii) the Company's Combined Interest Charges
calculated as of the end of each fiscal quarter beginning December 31, 1991 for
the period including such quarter and the immediately prior three fiscal
quarters, combined, will be at least 1.35 for each of said periods.
(j) Cash Flow. The Combined Cash Flow of the Company shall not be less
than $7,000,000 at the end of any Fiscal Year commencing January 1, 1991.
(k) Limitation on Primary Debt. After the date hereof, neither the
Company nor any Subsidiary or Affiliate shall incur additional Indebtedness
having a Lien on the Project Facility or any part thereof senior to any lien
securing the Series J Bonds or the obligations of the Company or any Subsidiary
or Affiliate under
II-11
this Agreement or any of the Loan Documents. After the date hereof, neither the
Company nor any Subsidiary or Affiliate shall incur additional Indebtedness
having a Lien on the Project Facility or any part thereof of equal priority with
any lien securing the Series J Bonds or the obligations of the Company or any
Subsidiary or Affiliate under this Agreement or any of the Loan Documents (all
of such Indebtedness, together with any indebtedness incurred pursuant to the
preceding sentence whether now outstanding or hereafter incurred being referred
to as "Senior Indebtedness") if, at the time it is incurred and after giving
effect thereto, (i) the Security Ratio would be less than 2.2 to 1; provided
that no additional Senior Indebtedness (including interest which has accrued
and is being deferred) shall be incurred without providing to the Trustee an
appraisal performed not more than two years prior to such incurrence by an
independent appraiser of recognized standing of the value of the property
subject to the lien of the Mortgage; or (ii) if, at the time of or after giving
effect to the incurrence of such Indebtedness, there shall exist any Default.
Prior to the incurrence of any Senior Indebtedness by the Company or any
Subsidiary or Affiliate, the Company shall furnish to the Trustee a certificate
of the Chief Financial Officer demonstrating in reasonable detail compliance by
the Company and such Subsidiary or Affiliate with the provisions of this Section
2.4(k). In connection with the incurrence of Senior Indebtedness meeting the
requirements of this Section 2.4(k), the Trustee, at the written direction of
the Company, shall execute and deliver a subordination of the Mortgage or a
parity agreement with respect to the Mortgage, provided that no such agreement
shall amend or modify any provisions of the Mortgage, but only the priority
thereof.
(l) Investments in Subsidiaries and Affiliates, Etc. Neither the
Company nor any Subsidiary or Affiliate shall purchase any capital stock or
other security issued by, make any loan, advance, or extension of credit to,
purchase any of the business or integral part of the business of, or otherwise
make any investment in, any Subsidiary, Affiliate, or any other Person if,
immediately before or after giving effect thereto, there shall exist any
Default.
(m) Compliance with ERISA. The Company and each of its Subsidiaries and
Affiliates shall meet all minimum funding requirements applicable to any Plans
which are subject to ERISA or to Section 412 of the Code and will at all times
comply in all material respects with the provisions of ERISA and Section 412 of
the Code which are applicable to the Plans. Neither the Company nor any
Subsidiary or Affiliate will permit any event or condition to exist which would
permit any of the Plans which is not a multi-employer plan to be terminated
under circumstances which would cause the lien provided for in Section 4068 of
ERISA to attach to the assets of the Company or any Subsidiary or Affiliate.
Promptly after the occurrence of a "reportable event", as defined in Section
4043 of ERISA, or after the Company or a Subsidiary or Affiliate
II-12
receives notice that the Pension Benefit Guarantee Corporation has instituted or
intends to institute termination proceedings with respect to any Plan, and prior
to the termination of any Plan by the administrator thereof, the Company shall
notify the Trustee and provide such documentation, data and other information
with respect thereto as the Trustee may reasonably request.
(n) Transactions with Related Parties. Neither the Company nor any
Subsidiary or Affiliate shall engage in or effect any transactions with any
Related Party (other than the Company) on a basis less favorable to the Company
or such Subsidiary or Affiliate, as the case may be, than would be the case if
such transaction had been effected with a Person which was not a Related Party.
[END OF ARTICLE II]
II-13
ARTICLE III
ISSUANCE OF THE SERIES J BONDS
Section 3.1. Agreement to Issue the Series J Bonds: Application of
Series J Bond Proceeds. In order to provide funds to finance a portion of the
Cost of the Project, the Issuer, concurrently with the execution of this
Agreement, will issue, sell, and deliver the Series J Bonds. The Issuer will
deposit the net proceeds of the Series J Bonds with the Trustee to be applied to
refund the Series I Bonds.
Section 3.2. Disbursements from the Project Fund. The Issuer has, in
the Indenture, authorized and directed the Trustee to disburse the Series J Bond
proceeds on the Closing Date from the Series J Account within the Project Fund
to refund the Series I Bonds. The Trustee shall not make any disbursement from
the Project Fund until the Company shall have provided the Trustee with a
Requisition and the other documents required by Section 5.1 of this Agreement.
Section 3.3. Furnishing Documents to the Trustee. The Company agrees to
cause such Requisitions to be directed to the Trustee as may be necessary to
effect payments out of the Project Fund in accordance with Section 3.2 hereof.
Section 3.4. Special Arbitrage Certifications. The Issuer covenants not
to cause or direct any moneys on deposit in any fund or account to be used in a
manner which would cause the Bonds to be classified as "arbitrage bonds" within
the meaning of Section 148 of the Code, and the Company certifies and covenants
to and for the benefit of the Issuer and the Owners of the Bonds that so long as
there are any Bonds Outstanding, moneys on deposit in any fund or account in
connection with the transactions contemplated herein, whether such moneys were
derived from the proceeds of the sale of the Bonds or from any other sources,
will not be used in a manner which will cause the Bonds to be classified as
"arbitrage bonds" within the meaning of Section 148 of the Code.
[END OF ARTICLE III]
III-1
ARTICLE IV
LOAN PROVISIONS
Section 4.1. Loan of Proceeds. The Issuer agrees, upon the terms and
conditions contained in this Agreement and the Indenture, to make a loan to the
Company in the principal amount of FIVE MILLION DOLLARS ($5,000,000), equal to
the proceeds received by the Issuer from the sale of the Series J Bonds. Such
proceeds shall be disbursed to or on behalf of the Company as provided in
Section 3.3 hereof.
Section 4.2. Amounts Payable.
(a) The Company hereby covenants and agrees to repay the Loan, as
follows: on or before the Business Day preceding any interest payment date for
the Series J Bonds or any other date that any payment of interest, premium, if
any, or principal is required to be made in respect of the Series J Bonds
pursuant to the Indenture, until the principal of, premium, if any, and interest
on the Series J Bonds shall have been fully paid or provision for the payment
thereof shall have been made in accordance with the Indenture, in immediately
available funds, a sum which, together with any moneys available for such
payment in the Bond Fund, will enable the Trustee to pay the amount payable on
such date as principal of (whether at maturity or upon redemption or
acceleration or otherwise), premium, if any, and interest on the Series J Bonds
as provided in the Indenture.
It is understood and agreed that all payments payable by the Company
under subsection (a) of this Section 4.2 are assigned by the Issuer to the
Trustee for the benefit of the Owners of the Bonds. The Company assents to such
assignment. The Issuer hereby directs the Company and the Company hereby agrees
to pay to the Trustee at the Principal Office of the Trustee all payments
payable by the Company pursuant to this subsection. Payments by the Company to
the Trustee as aforesaid or as otherwise required pursuant to this Agreement or
the other Loan Documents shall be sufficient to discharge the obligation of the
Company with respect to the amounts so paid, and the Company shall not be liable
to the Issuer, the Owners or to any other party by reason of the failure of the
Trustee to remit such amounts to the Owners, or otherwise to apply such amounts,
as provided in the Indenture.
(b) The Company will also pay the reasonable expenses of the Issuer
related to the issuance of the Series J Bonds, including the payment on the
Closing Date of a fee equal to $12,500. The Company shall also pay on the
Closing Date the fees and expenses of Bond Counsel, of counsel to the Purchaser
and of counsel to the Trustee.
IV-1
(c) The Company will also pay the reasonable fees and expenses of the
Trustee under the Indenture and all other amounts which may be payable to the
Trustee under Section 9.02 of the Indenture, such amounts to be paid directly to
the Trustee for the Trustee's own account as and when such amounts become due
and payable.
(d) In the event the Company should fail to make any of the payments
required in this Section 4.2, the item or installment so in default shall
continue as an obligation of the Company until the amount in default shall have
been fully paid, and the Company agrees to pay the same with interest thereon,
to the extent permitted by law, from the date when such payment was due, at the
rate set forth in the Series J Bonds.
Section 4.3. Obligations of Company Unconditional. The obligations of
the Company to make the payments required in Section 4.2 hereof and, to perform
and observe the other agreements contained herein shall be absolute and
unconditional and shall not be subject to any defense or any right of setoff,
counterclaim or recoupment arising out of any breach by the Issuer or the
Trustee of any obligation to the Company, whether hereunder or otherwise, or out
of any indebtedness or liability at any time owing to the Company by the Issuer
or the Trustee, and, until such time as the principal of, premium, if any, and
interest on the Series J Bonds shall have been fully paid or provision for the
payment thereof shall have been made in accordance with the Indenture, the
Company (i) will not suspend or discontinue any payments provided for in Section
4.2 hereof, (ii) will perform and observe all other agreements contained in this
Agreement and (iii) except as provided in Article X hereof, will not terminate
the Term of Agreement for any cause, including, without limiting the generality
of the foregoing, the occurrence of any acts or circumstances that may
constitute failure of consideration, eviction or constructive eviction,
destruction of or damage to the Project Facility, the taking by eminent domain
of title to or temporary use of any or all of the Project Facility, commercial
frustration of purpose, any change in the tax or other laws of the United States
of America or of the State or any political subdivision of either thereof or any
failure of the Issuer or the Trustee to perform and observe any agreement,
whether express or implied, or any duty, liability or obligation arising out of
or connected with this Agreement. Nothing contained in this Section shall be
construed to release the Issuer from the performance of any of the agreements on
its part herein contained, and in the event the Issuer or the Trustee should
fail to perform any such agreement on its part, the Company may institute such
action against the Issuer or the Trustee as the Company may deem necessary to
compel performance so long as such action does not abrogate the obligations of
the Company contained in the first sentence of this Section.
[END OF ARTICLE IV]
IV-2
ARTICLE V
THE PROJECT
Section 5.1. Disbursements from the Project Fund. (a) In the Indenture,
the Issuer has authorized and directed the Trustee to make disbursements from
the Project Fund as required by this Agreement. Disbursement of the entire
$5,000,000 of proceeds from the sale of the Series J Bonds shall be made from
the Series J Account to refund the Series I Bonds, upon receipt by the Trustee
of a requisition signed by a Company Representative stating with respect to such
disbursement to be made: (1) that it is requisition no. 1; (2) that payment is
to be made to the Trustee of the Series I Bonds; (3) that the amount to be paid
is $5,000,000; and (4) that on the date thereof there has not occurred any act
which, with the giving of notice or passage of time, or both, would constitute a
Default.
(b) The Company further agrees that as a condition precedent to the
disbursement from the Project Fund on the Closing Date of the entire proceeds of
the Series J Bonds to be used to refund the Series I Bonds, there shall be
furnished to the Trustee, in writing, unless waived by the Purchaser, the
following:
(1) evidence of fee and mortgage title insurance, in form and substance
satisfactory to the Issuer;
(2) proof that the insurance required to be maintained pursuant to
Section 5.4 is in full force and effect and that all premiums have been paid;
(3) proof of flood insurance as required in Section 5.4(c);
(4) verification evidencing that all permits, consents, approvals and
agreements required by all governmental boards and bureaus have been secured and
remain in full force and effect;
(5) such evidence as the Issuer or the Trustee may require to
demonstrate exemption from or compliance with all applicable building, zoning,
health and safety laws, ordinances and regulations; and
(6) such other additional documents, financing statements, affidavits
or certificates of the Company or any other person or entity as the Issuer or
the Trustee may reasonably request.
(c) The Company hereby agrees that it shall pay all costs incurred by
the Company or the Trustee in making such disbursement from the Project Fund. In
making any such disbursements
V-1
from the Project Fund, the Trustee may conclusively rely on such requisitions
and other documents delivered to it and the Trustee shall be relieved of all
liability with respect to the making of such disbursements if made in accordance
with the foregoing.
Section 5.2. Maintenance and Modification of the Project Facility by
the Company. (a) The Company shall operate and maintain the Project Facility in
accordance with all applicable governmental laws, ordinances, approvals, rules
and regulations and requirements, including, but not limited to, zoning,
sanitary, pollution, environmental and safety ordinances, laws and rules and
regulations promulgated thereunder and in accordance with the terms of the
riparian grant from the State of New Jersey to the Company dated December 22,
1983 as recorded January 23, 1984, in Deed Book 3947, Page 279 in the Office of
the Camden County Register of Deeds.
(b) The Company shall (1) maintain, preserve and keep the Project
Facility or cause the Project Facility to be maintained, preserved and kept in
good repair, working order and condition, (2) from time to time, make or cause
to be made all necessary and proper repairs, replacements and renewals thereto
and (3) from time to time, make such substitutions, additions, modifications and
improvements as may be necessary and as shall not impair the structural
integrity, operating efficiency and economic value of the Project Facility. Any
alterations, replacements, renewals or additions made pursuant to this Section
shall become and constitute a part of the Project Facility and shall be
performed in accordance with Section 5.2(a).
(c) The Company shall operate or cause the Project 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 Agreement.
(d) [Intentionally Omitted]
(e) The Company shall not remove, relocate, discontinue the use of or
sell, fail to restore, or otherwise dispose of any part of the Project except as
may be permitted pursuant to Section 8.1 hereof.
(f) The Company shall not relocate the Project or any part thereof
outside the State.
Section 5.3. Taxes, Other Governmental Charges and Utility Charges.
(a) The Company covenants that it and each of its Subsidiaries and Affiliates
shall duly and punctually pay all taxes, assessments (including deficiency
assessments), and governmental charges or levies of any kind whatsoever
("Taxes") imposed on it or on its respective income or profits or on any of its
respective properties or assets, including, without limiting
V-2
the generality of the foregoing, any taxes levied upon the Project Facility
which, if not paid, will become a Lien or charge upon the Project Facility or
upon any payment pursuant to this Agreement, prior to the date on which
penalties attach thereto. The Company shall also pay all utility, water and
sewer rents, and other charges incurred in connection with the Project Facility
and all assessments and charges lawfully made by any governmental body for
public improvements that may be secured by a Lien on the Project Facility.
(b) The Company may, at its own expense and in its own name and in good
faith, contest any such taxes, assessments, and other charges, provided that
such contest shall not result in a lien being placed on the Project Facility or
any part thereof or result in the Project Facility being subject to loss or
forfeiture, and further provided that the Company gives notice in writing of
such contest to the Issuer and the Trustee. Nothing herein shall preclude the
Company, at its own expense and in its own name and behalf, from applying for
any tax exemption allowed by the federal government, the State, or any political
subdivision which grants or may grant such tax exemption.
Section 5.4. Insurance Required. The Company shall obtain and maintain
insurance on the Project Facility and all parts thereof and operations conducted
therein and thereon in such manner and against such loss, damage and liability,
including liability to third parties, as is customary with property owners in
the same or similar business in the State. Without limiting the generality of
the foregoing sentence, such insurance shall include, without limitation:
(a) Public liability insurance insuring against any and all liability
or claims of liability arising out of, occasioned by, or resulting from any
accident or otherwise resulting in or about the Project Facility, in a minimum
amount of $5,000,000 for the death of or bodily injury to one person, $5,000,000
for the death of or bodily injury in any one accident or occurrence and
$5,000,000 for loss or damage to the property of any Person or Persons,
provided, however, that in the event the Company is unable at any time to obtain
such insurance in such amounts, the failure of the Company to obtain such
insurance shall not constitute a Default hereunder so long as its obtains such
insurance in such lesser amounts as is available;
(b) Property damage and broad form fire and extended coverage insurance
with respect to the Project Facility and insurance insuring against such other
hazards, casualties and contingencies as the Issuer may require, which insurance
shall provide coverage at replacement cost and with no provisions for
coinsurance penalties and shall be in an amount equal to the lesser of (i)
$40,000,000, or (ii) the aggregate outstanding principal balance of the Loan and
all Senior Indebtedness; and
V-3
(c) If the Project Facility is required to be insured pursuant to the
Flood Disaster Protection Act of 1973 or the National Flood Insurance Act of
1968, and the regulations promulgated thereunder, flood insurance with respect
to the Project Facility in an amount not less than $5,000,000 or the maximum
limit of coverage available, whichever amount is less.
Section 5.5. Additional Provisions Concerning Insurance. (a) Any
insurance required hereunder shall be written by insurance companies authorized
or licensed to do business in the State and shall be on such forms and written
by such companies as shall be approved by the Issuer. Such insurance coverage
may be effected under overall blanket or excess coverage policies of the Company
provided that the Company shall not be deemed to be a co-insurer thereunder.
Each insurance policy maintained pursuant to this Agreement shall contain a
provision to the effect that such policy shall not be canceled or altered unless
the Trustee is notified at least fifteen (15) days prior to such cancellation or
alteration. At least thirty (30) days prior to the expiration of any such
policy, the Company shall furnish evidence satisfactory to the Trustee that such
policy has been renewed or replaced or is no longer required by this Agreement.
(b) Each insurance policy maintained pursuant to this Agreement and
providing insurance against loss of or damage to property shall be written or
endorsed so as to name the Trustee as an additional insured as its interests may
appear and to have the proceeds thereof payable directly to the Trustee as loss
payee. Each policy providing public liability coverage shall be written or
endorsed so as to name the Trustee as an additional insured.
(c) Duplicate copies of any insurance policies and evidence of renewal
or replacement thereof shall promptly be furnished to the Trustee for its
records. Evidence of the payment of the first year's premiums on such policies
shall be delivered to the Trustee on the Closing Date. Thereafter, the Company
shall deliver to the Trustee evidence of the payment of all additional premiums
prior to the expiration or renewal dates of all such policies.
(d) In the event of loss or damage to the Project Facility, the Net
Proceeds of any insurance provided hereunder shall be deposited with the Trustee
and applied as set forth in Article VI hereof, and in the event of a public
liability occurrence, the Net Proceeds of any insurance provided hereunder shall
be applied towards satisfaction of such liability.
Section 5.6. Worker's Compensation. The Company shall comply with the
laws of the State relating to Worker's Compensation and similar worker's
protection laws.
[END OF ARTICLE V]
V-4
ARTICLE VI
DAMAGE, DESTRUCTION AND CONDEMNATION
Section 6.1. Damage, Destruction and Condemnation. Unless the Company
shall have exercised its option to terminate this Agreement pursuant to the
provisions of paragraphs (A) or (B) of Article X hereof, if prior to full
payment of the Series J Bonds (or prior to provision for payment thereof having
been made in accordance with the provisions of the Indenture) (i) the Project or
any portion thereof is destroyed (in whole or in part) or is damaged by fire or
other casualty or (ii) title to or any interest in, or the temporary use of, the
Project or any part thereof shall be taken under the exercise of the power of
eminent domain by any governmental body or by any person, firm or corporation
acting under governmental authority, the Company shall be obligated to continue
to pay the amounts specified in Section 4.2 hereof.
Section 6.2. Application of Net Proceeds. The Net Proceeds of any
insurance proceeds or condemnation award resulting from any event described in
Section 6.1 hereof shall be immediately deposited in a separate trust fund to be
held by the Trustee. All Net Proceeds so deposited shall be applied in one or
more of the following ways as shall be elected by the Company in a written
notice to the Trustee, which notice shall be received by the Trustee within 60
days after the receipt by the Company or the Trustee, as the case may be, of the
Net Proceeds:
(a) To the prompt repair, restoration, modification or improvement of
the Project Facility, and the Issuer has, in the Indenture, authorized and
directed the Trustee to make disbursements from such separate trust fund for
such purposes. Such disbursements shall be made by the Trustee only upon receipt
of Requisitions therefor. Any balance of the Net Proceeds remaining after such
work has been completed shall be transferred into the Bond Fund to be applied in
accordance with subsection (b) of this Section, or if the Bonds have been fully
paid (or provision for payment thereof has been made in accordance with the
provisions of the Indenture), any balance remaining in such separate trust fund
shall be paid in accordance with Section 6.11 of the Indenture.
(b) To the redemption at par of the Bonds, pro rata in proportion to
their respective then outstanding principal balances, on the earliest
practicable redemption date as specified in a written notice by the Company to
the Trustee, provided that no part of such Net Proceeds may be applied for such
redemption unless (1) all of the Bonds are to be redeemed in accordance with the
Indenture upon termination of this Agreement pursuant to clauses (A) or (B) of
Article X hereof or (2) in the event that less than all of the Bonds are to be
redeemed, the Company shall furnish to the Trustee a certificate of a Company
Representative stating that
VI-I
(i) the property forming the part of the Project Facility that was damaged or
destroyed by such casualty or was taken by such condemnation proceedings is not
essential to the use, operation or possession of the Project by the Company or
(ii) the Project Facility has been repaired, restored, modified or improved to
operate as designed.
(c) If the Company elects to repair, restore, modify or improve the
Project Facility or pay the cost thereof and fails to do so diligently, the
Issuer or the Trustee may (but shall be under no obligation to) do so on behalf
of the Company and recover the reasonable costs thereof from the Company, less
the amount, if any, collected from Net Proceeds on account of such costs. No
such payment by the Trustee or the Issuer shall affect or impair any rights of
the Issuer hereunder or of the Trustee or the Owners under the Indenture arising
as a result of such failure by the Company.
(d) If the Company fails to give the notice required under subsection
(a) of this Section within the specified time period, the Issuer or the Trustee,
upon notice to the other and to the Company, may direct the Company to take
either of the actions therein described and the Company shall be obligated to
take such action.
Section 6.3. Insufficiency of Net Proceeds. If the Net Proceeds are
insufficient to pay in full the cost of any repair, restoration, modification or
improvement referred to in Section 6.2(a) hereof, the Company will nonetheless
complete the work and will pay any cost in excess of the amount of the Net
Proceeds held by the Trustee. The Company agrees that if by reason of any such
insufficiency of the Net Proceeds, the Company shall make any payments pursuant
to the provisions of this Section 6.3, the Company shall not be entitled to any
reimbursement therefor from the Issuer, the Trustee or the Owners, nor shall the
Company be entitled to any diminution of the amounts payable under Section 4.2
hereof.
[END OF ARTICLE VI]
VI-2
ARTICLE VII
SPECIAL COVENANTS
Section 7.1. No Warranty of Condition or Suitability by Issuer. THE
ISSUER MAKES NO WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO THE PROJECT OR THE
CONDITION THEREOF, OR THAT THE PROJECT WILL BE SUITABLE FOR THE PURPOSES OR
NEEDS OF THE COMPANY. THE ISSUER MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, THAT THE COMPANY WILL HAVE QUIET AND PEACEFUL POSSESSION OF THE
PROJECT. THE ISSUER MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED,
WITH RESPECT TO THE MERCHANTABILITY, CONDITION OR WORKMANSHIP OF ANY PART OF THE
PROJECT OR ITS SUITABILITY FOR THE COMPANY'S PURPOSES.
Section 7.2. Access to the Project. The Company agrees that the Issuer,
the Trustee, the Purchaser and their duly authorized agents, attorneys, experts,
engineers, accountants and representatives shall have the right to inspect the
Project at all reasonable times and on reasonable notice. The Issuer, the
Trustee and their duly authorized agents shall also be permitted, at all
reasonable times, to examine the books and records of the Company with respect
to the Project.
Section 7.3. Further Assurances and Corrective Instruments. The Issuer
and the Company agree that they will, from time to time, execute, acknowledge
and deliver, or cause to be executed, acknowledged and delivered, such
supplements hereto and such further instruments as may reasonably be required
for carrying out the expressed intention of this Agreement and the other Loan
Document.
Section 7.4. Issuer and Company Representatives. Whenever under the
provisions of this Agreement the approval of the Issuer or the Company is
required or the Issuer or the Company is required to take some action at the
request of the other, such approval or such request shall be given for the
Issuer by an Issuer Representative and for the Company by a Company
Representative. The Trustee shall be authorized to act on any such approval or
request.
Section 7.5. Financing Statements. The Company agrees to execute and
file or cause to be executed and filed any and all financing statements or
amendments thereof or continuation statements necessary to perfect and continue
the perfection of the security interests granted in the Mortgage and the
Indenture. Within three months of the expiration date of any financing
statements or continuation statements, the Company shall furnish to the Trustee
evidence satisfactory to the Trustee that such filing has taken place. The
Company shall pay all reasonable costs of the preparation and filing of such
instruments.
VII-1
Section 7.6. Compliance with Code. The Company shall at all times do
and perform all acts and things permitted by law and 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 holders of
the Bonds, except in the event that any such holder is a Substantial User or
Related Person thereto. For purposes of this Section 7.6, any and all actions of
any Related Person shall be deemed to be actions of the Company. In addition,
any and all actions to be undertaken by the Company or by any other person as to
which the Issuer or the Trustee must, pursuant to the terms hereof, consent or
approve in advance, shall be deemed to be the actions of the Company or such
other person (and not the actions of the Issuer or the Trustee). The Company
shall cause any Related Person to comply with all of the provisions of this
Section as to its own operations. A breach of this Section 7.6 shall not
constitute a Default but shall be governed by the provisions of Section 3.01 of
the Indenture.
Section 7.7. Further Assurances. The Issuer and the Company shall, from
time to time, execute, acknowledge and deliver, or cause to be executed,
acknowledged and delivered, such supplements hereto and such further instruments
as may reasonably be required for carrying out the intention of or facilitating
the performance of this Loan Agreement and the other Loan Documents.
Section 7.8. [Intentionally Omitted]
Section 7.9. Annual Certificate. On each anniversary hereof, the
Company shall furnish to the Issuer, with a copy to the Trustee, the following:
(a) a certificate indicating whether or not the Company is aware of any
condition, event or act which constitutes a Default, or which would constitute a
Default with the giving of notice or passage of time, under any of the Loan
Documents;
(b) a written description of the present use of the Project and a
description of any anticipated material change in the use of the Project or in
the number of employees employed at the Project, and
(c) a report from every entity that leases or occupies space at the
Project indicating the number of persons the entity employs at the Project in
the form annexed hereto as Exhibit D.
[END OF ARTICLE VII]
VII-2
ARTICLE VIII
PROJECT USERS; MAINTAIN EXISTENCE; MERGE, SELL, TRANSFER;
INDEMNIFICATION; REDEMPTION
Section 8.1. Project Users; Maintain Existence; Merge, Sell, Transfer.
(a) Upon the request of the Issuer from time to time, the Company shall
cause a Project Occupant Information Form to be submitted to the Issuer by every
prospective lessee, sublessee or lease assignee of all or any part of the
Project. The Company shall not permit any such leasing, subleasing or assigning
of leases of all or any part of the Project that would impair the excludability
of interest paid on the Series J Bonds from the gross income of the Owners
thereof for purposes of federal income taxation, or that would impair the
ability of the Company to assure the continued operation of the Project, or
would cause the Project not to be operated, as an authorized project under the
Act.
(b) The Company shall maintain its existence as a legal entity and
shall not sell, assign, transfer or otherwise dispose of the Project or
substantially all of its assets. The Company may merge with or into or
consolidate with another entity, and the Project or this Agreement may be
transferred without violating this Section 8.1(b) provided (i) the Company
causes the proposed surviving, resulting or transferee company to furnish the
Issuer with a Change of Ownership Information Form; (ii) 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 Company immediately
preceding the merger, consolidation or transfer; (iii) 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; (iv) the merger, consolidation or transfer shall not impair the
excludability of interest paid on the Series J Bonds from the gross income of
the Owners thereof for purposes of federal income taxation pursuant to an
opinion of Bond Counsel; (v) the surviving, resulting or transferee company
assumes in writing the obligations of the Company under this Agreement and the
Loan Documents, and (vi) after the merger, consolidation or transfer the Project
shall be operated as an authorized project under the Act.
(c) The obligations of the Company under this Section 8.1 shall be in
addition to its obligations under Section 2.4(d).
VIII-1
Section 8.2. Release and Indemnification Covenants.
(a) The Issuer, the members, agents, servants, officers or employees
thereof, the Trustee and the Purchaser shall not be liable for (1) any loss,
damage or injury to, or death of, any person occurring at or about or resulting
from any defect in the Project Facility, (2) any damage or injury to the persons
or property of the Company or any user of the Project Facility, or their
officers, agents, servants or employees, or any other person who may be about
the Project Facility, caused by an act of negligence of any person (other than
the Issuer or its members, officers, agents, servants and employees, the Trustee
and the Purchaser, as the case may be), or (3) any costs, expenses or damages
incurred as a result of any lawsuit commenced because of action taken in good
faith by the Issuer in connection with the Project and the Project Facility, and
the Company shall and does hereby indemnify, protect, defend and hold harmless
the Issuer, the members, agents, servants, officers or employees thereof, the
Trustee and the Purchaser from and against any and all losses, damages,
injuries, costs or expenses (including reasonable attorneys fees) and from and
against any and all claims, demands, suits, actions or other proceedings
whatsoever, brought by any person or entity whatsoever and arising or
purportedly arising from any of the foregoing.
(b) The Company shall and does hereby indemnify, protect, defend and
hold harmless the Issuer, the State and every agency of the State, the Trustee,
any Person who controls the Issuer, the State or any agency of the State or the
Trustee (within the meaning of Section 15 of the Securities Act of 1933, as
amended) and any member, officer, director, official, employee and attorney of
the Issuer, the State and every agency of the State and the Trustee (each an
"Indemnified Party"), from and against any and all losses, damages, injuries,
costs or expenses (including reasonable attorneys fees) and from and against any
and all claims, demands, suits, actions or other proceedings whatsoever, brought
by any person or entity whatsoever (except the Company) and arising or
purportedly arising from this Agreement, the Indenture or the Bonds or from the
performance of the Indenture.
(c) The Company agrees to and hereby does indemnify and hold harmless
the Indemnified Parties and the Purchaser from and against any and all losses,
claims, damages, liabilities, costs or expenses, including reasonable attorneys'
fees suffered or incurred by any of the Indemnified Parties or the Purchaser and
caused by, relating to, arising out of, resulting from or in any way connected
with (i) the condition, use, possession, conduct, management, planning, design,
acquisition, construction, installation, financing (in the case of financing, as
to the Indemnified Parties only) or sale of the Project or any part thereof
including without limitation the Indemnified Matters referenced in the next
paragraph; (ii) any untrue statement or alleged untrue statement of
VIII-2
a material fact contained in the Application or any other information submitted
or to be submitted by or on behalf of the Company to the Indemnified Parties or
the Trustee in connection with the transactions contemplated hereby or the
issuance and purchase of the Bonds; or (iii) any omission or alleged omission of
a material fact necessary to be stated thereon in order to make such statements
to the Indemnified Party not misleading or incomplete.
(d) The Company covenants and agrees, at its sole cost and expense, to
indemnify, protect and save the Indemnified Parties and the Purchaser (the
"Indemnitees") harmless against and from any and all damages, losses,
liabilities, obligations, penalties, claims, litigation, demands, defenses,
judgments, suits, proceedings, costs, disbursements or expenses (including,
without limitation, attorneys' and experts' reasonable fees and disbursements)
of any kind or of any nature whatsoever (collectively, the "Indemnified
Matters") which may at any time be imposed upon, incurred by or asserted or
awarded against Indemnitees and arising from or out of:
(1) any hazardous materials, as defined under any Laws as defined
below, on, in, under or affecting all or any portion of the property subject to
the Mortgage or any surrounding areas (but in the case of hazardous materials
in surrounding areas, only if the source of such materials is or is alleged to
be the Company or the property subject to the Mortgage), or
(2) the enforcement of this paragraph or the assertion by the Company
of any defense to its obligations hereunder (except the successful defense of
actual performance not subject to further appeal), whether any of such matters
arise before or after the Closing Date or before or after foreclosure of the
Mortgage or other taking of title to the Company's interest in all or any
portion of the mortgaged property by Indemnitees or any affiliate of
Indemnitees. Indemnified Matter shall include, without limitation, all of the
following: (i) the costs of removal of any and all hazardous materials from all
or any portion of the property or any surrounding areas (except that the
indemnity provided for under this paragraph shall not cover the costs of such
removal unless either (a) such removal is required by any federal or state law,
regulation or regulatory agency ("Laws") or (b) any present or future use,
operation, development, construction, alteration or reconstruction of all or any
portion of the mortgaged property is or would be conditioned in any way upon, or
is or would be limited in any way until the completion of, such removal in
accordance with any Laws), (ii) additional costs required to take necessary
precautions as required by law to protect against the release of hazardous
materials on, in, under or affecting the mortgaged property into the air, any
body of water, any other public domain
VIII-3
or any surrounding areas and (iii) costs incurred to comply, in connection with
all or any portion of the mortgaged property or any surrounding areas, with all
applicable Laws with respect to hazardous materials. If any Indemnitee or any
affiliate of an Indemnitee takes title to the Company's interest in the
mortgaged property at a foreclosure sale, at a sale pursuant to a power of sale
under the Mortgage or by deed in lieu of foreclosure or otherwise, then the
indemnity provided for under this paragraph shall not apply to hazardous
materials which are initially placed on, in or under all or any portion of the
mortgaged property after the date Indemnitee or such affiliate so takes title to
such interest in the Property. At any time during the six months prior to any
such foreclosure sale, sale pursuant to a power of sale under the Mortgage or by
deed in lieu of foreclosure or otherwise by which any Indemnitee or affiliate
takes title to such interest in the mortgage property, such Indemnitee or
affiliate shall have the right, at its sole discretion and at the Company's sole
cost and expense, to have performed an environmental site assessment of the
mortgaged property to determine whether any hazardous materials are present.
(e) In case any action shall be brought against one or more of the
Indemnified Parties or the Purchaser based upon any of the above and in respect
of which indemnity may be sought against the Company, such Indemnified Parties
or the Purchaser shall promptly notify the Company in writing, and the Company
shall assume the defense thereof, including the employment of counsel
satisfactory to the Indemnified Parties, the payment of all expenses and the
right to negotiate and consent to settlement. Any one or more of the Indemnified
Parties or the Purchaser shall have the right to employ separate counsel at the
Company's expense in any such action and to participate in the defense thereof.
The Company shall not be liable for any settlement of any such action effected
without its consent, but if settled with the consent of the Company or if there
be a final judgment for the claimant in any such action, the Company shall
discharge the liability and indemnify and hold harmless the Indemnified Parties
and the Purchaser from and against any loss or liability by reason of such
settlement or judgment. The provisions of this Section 8.2 shall survive the
repayment of the Bonds.
Section 8.3. Redemption of Bonds. The Company shall have and is hereby
granted the option to cause all or a portion of the Bonds to be redeemed at the
times, at the prices and in the manner permitted by the Indenture. The Issuer,
at the request of the Company, shall forthwith take all steps (other than the
payment of the money required for such redemption) necessary under the
applicable redemption provisions of the Indenture to effect redemption of all or
part of the Outstanding Bonds, as may be specified by the Company, on the date
established for such redemption.
VIII-4
Section 8.4. Issuer to Grant Security Interest to Trustee. The parties
hereto agree that pursuant to the Indenture, the Issuer shall assign to the
Trustee, in order to secure payment of the Bonds, all of the Issuer's right,
title, and interest in and to this Agreement, except for certain of the Issuer's
rights as are expressly reserved pursuant to the granting clauses of the
Indenture.
Section 8.5. Indemnification of Trustee. The Company shall and hereby
agrees to indemnify the Trustee for, and hold the Trustee harmless against, any
loss, liability or expense (including the costs and expenses of defending
against any claim of liability) incurred without gross negligence or willful
misconduct by the Trustee and arising out of or in connection with its acting as
Trustee under the Indenture, the Mortgage or any other Loan Document.
[END OF ARTICLE VIII]
VIII-5
ARTICLE IX
DEFAULTS AND REMEDIES
Section 9.1. Defaults Defined. The following shall be "Defaults" under
this Agreement and the term "Default" shall mean, whenever it is used in this
Agreement, any one or more of the following events:
(a) Failure by the Company to pay any amount required to be paid under
subsection (a) of Section 4.2 hereof when due.
(b) Failure by the Company or any of its Subsidiaries or Affiliates to
observe and perform any covenant, condition or agreement on its part to be
observed or performed under this Agreement or the other Loan Documents, other
than as referred to in Section 9.1(a) or 9.1(1), for a period of ninety (90)
days after it first becomes known to any officer of the Company.
(c) The occurrence of a Default under the Indenture or any other Loan
Document.
(d) [Intentionally omitted]
(e) If any warranty or representation by or on behalf of the Company
contained in this Agreement, the Indenture, the Bond Placement Agreement, the
Loan Documents, the Guaranty or in any instrument or certificate furnished in
compliance with same proves false or misleading in any material respect as of
the time it was made.
(f) Failure by the Company or any of its Subsidiaries or Affiliates to
make one or more payments due with respect to aggregate Indebtedness exceeding
$500,000 within any applicable periods for cure; or if any event shall occur
or any condition shall exist, the effect of which event or condition is to cause
more than $500,000 of aggregate Indebtedness or other securities of the Company
or any Subsidiary or Affiliate to become due or subject to mandatory redemption
or repurchase before its (or their) stated maturity or before its (or their)
regularly scheduled dates of payment, redemption or purchase.
(g) If a custodian, receiver or liquidator is appointed for the Company
or any Subsidiary or Affiliate or the Company or any Subsidiary or Affiliate is
adjudicated bankrupt or insolvent; or an order of relief is entered under the
Federal Bankruptcy Code against the Company or any Subsidiary or Affiliate or
any of its property is sequestered by court order and the order remains in
effect for more than 60 days; or a petition is filed is against the Company or
Subsidiary or Affiliate under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt,
IX-1
dissolution or liquidation law of any Jurisdiction, whether now or subsequently
in effect, and is not dismissed within 60 days after filing.
(h) If the Company or any Subsidiary or Affiliate commences a voluntary
case or files a petition in voluntary bankruptcy or seeking relief under any
provision of the Federal Bankruptcy Code or any other bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, dissolution or
liquidation law of any jurisdiction, whether now or subsequently in effect; or
consents to the filing of any petition against it under any such law; or applies
for or consents to the appointment of or taking possession by a custodian,
receiver, trustee or liquidator of the Company or any Subsidiary or Affiliate or
of all or any part of its property; or makes an assignment for the benefit of
its creditors; or admits in writing its inability to pay its debt generally as
they become due.
(i) Any of the Loan Documents shall not be, or shall cease to be, the
legal, valid, binding and enforceable obligations of each of the parties thereto
in accordance with its terms, or any of the Loan Documents shall not be or shall
cease to be in full force and effect.
(j) There shall exist any Subsidiary or Affiliate which has not, within
90 days after becoming a Subsidiary or Affiliate, duly authorized, executed and
delivered to the Trustee, a counterpart of the Guaranty or a document evidencing
its agreement to be bound by the Guaranty which is the legal, valid, binding and
enforceable obligation of such Subsidiary or Affiliate in accordance with its
terms.
(k) There shall occur a foreclosure with respect to any of the
following mortgages, as amended and supplemented:
(i) Mortgage dated March 15, 1984 between the Company and the City
of Gloucester City,
(ii) Mortgage dated April 18, 1984 between the Company and the City
of Gloucester City,
(iii) Mortgage dated August 22, 1984 between the Company and the
City of Gloucester City,
(iv) Mortgage and Security Agreement dated as of August 1, 1986
between the Company and Bankers Trust Company, as trustee,
(v) Mortgage and Security Agreement dated as of December 1, 1986
between the Company and Bankers Trust Company, as trustee,
IX-2
(vi) Mortgage and Security Agreement dated as of January 2, 1992
between the Company and Mellon Bank, N.A., as trustee (Series G),
(vii) Mortgage and Security Agreement dated as of January 2, 1992
between the Company and Mellon Bank, N.A., as trustee (Series H), or
(viii) Mortgage and Security Agreement dated as of March 15, 1994
between the Company and 000 Xxxxxxxx Xxx., Inc., jointly and severally,
and The Bank of New York (NJ).
(1) Failure by the Company or any of its Subsidiaries or Affiliates to
observe and perform the covenant set forth in Section 2.4(d).
Section 9.2. Trustee's Remedies on Default. Whenever any Default
referred to in Section 9.1 hereof shall have happened and be continuing, the
Trustee may (subject in the case of the Trustee to its mandatory obligations
upon the occurrence of certain Defaults) take one or any combination of the
following remedial steps:
(a) If the Trustee has declared the Bonds immediately due and payable
pursuant to Section 8.02 of the Indenture, by written notice to the Company,
declare an amount equal to all amounts then due and payable on the Bonds,
whether by acceleration of maturity (as provided in the Indenture) or otherwise,
to be immediately due and payable as liquidated damages under this Agreement and
not as a penalty, whereupon the same shall become immediately due and payable;
(b) Have reasonable access to and inspect, examine and make copies of
the books and records and any and all accounts, data and income tax and other
tax returns of the Company during regular business hours of the Company if
reasonably necessary in the opinion of the Trustee; or
(c) Take whatever action at law or in equity may appear necessary or
desirable to collect the amounts then due and thereafter to become due, or to
enforce performance and observance of any obligation, agreement or covenant of
the Company under this Agreement, the Indenture and the Loan Documents.
(d) Exercise any and all rights and remedies of a creditor or secured
party under the Uniform Commercial Code or other applicable law.
Any amounts collected pursuant to action taken under this Section shall
be paid into the Bond Fund and applied in accordance with the provisions of the
Indenture. The rights specified in this Section 9.2 are in addition to, and not
in limitation of, any other
IX-3
obligations of the Company which may arise upon a default or acceleration in
respect of the Bonds, including without limitation, under Section 4.2 hereof.
Section 9.3. Issuer's Remedies on Default.
(A) The occurrence of a Default referred to in Section 9.1(b) or 9.1(e)
hereof (other than a default resulting from a breach of the covenant contained
in Section 2.4(e) hereof) shall constitute an Event of Cancellation hereunder,
and at any time thereafter during the continuance of such Event of Cancellation,
the Issuer may, by written notice in accordance with the provisions of Section
11.2 hereof to the Trustee, call and cancel the Series J Bonds. The Trustee and
any assigns and the Company hereby expressly agree that the Series J Bonds may
be called and canceled by the Issuer in the manner provided above, and upon the
Cancellation Date specified in the notice from the Issuer, which shall be at
least 30 and no more than 60 days after the giving of such notice, the Series J
Bonds will be called and canceled, and the Trustee may, at its option, declare
the obligations evidenced by this Agreement immediately due and payable. The
Trustee will deliver the Series J Bonds to the Issuer for cancellation upon the
Cancellation Date, but even if such delivery does not occur, the Series J Bonds
will be considered canceled and of no further force or effect on the
Cancellation Date.
Subject to the provisions of Section 9.4 hereof, the remedies set
forth in this Section 9.3 are the sole and exclusive remedies of the Issuer in
the event of an occurrence of an Event of Cancellation as set forth herein.
(B) Upon the Cancellation Date, this Agreement will evidence the
indebtedness from the Company to the Trustee and the Bondholders and, in the
event the payment obligations hereunder are not accelerated by the Trustee as
hereinabove provided, all of the terms of this Agreement, including the interest
rate and payment terms herein specified, will control the obligations of the
Company to the Trustee and the Bondholders except that from the Cancellation
Date, the per annum interest rate will remain __% for a period of six (6)
months, after which the interest rate will change to the greater of (i) two
percent (2%) in excess of the Prime Rate, or (ii) the quotient obtained by
dividing ________% by the difference between one (1) and the highest marginal
federal income tax rate at the time in effect. The Issuer will no longer be a
party to the transaction and shall have no further rights with respect thereto
and shall be released of any and all debts, liabilities and obligations to any
other party under this Agreement, the Series J Bonds or any other Loan Document.
The Issuer and the Trustee will execute and deliver to each other such other
documents and agreements as the other may reasonably request in order to
evidence the cancellation of the Series J Bonds and the withdrawal of the Issuer
from the transaction.
IX-4
(C) Upon cancellation of the Series J Bonds pursuant to the provisions
hereof, the Issuer hereby agrees that the Trustee shall automatically be vested
with all of the Issuer's right, title and interest in and to the Loan Documents.
Any amounts remaining in the Bond Fund on the Cancellation Date after the
deduction therefrom of amounts which may be due the Issuer pursuant to the terms
of this Agreement are hereby assigned to the Trustee to be disbursed in
accordance with the Indenture.
(D) In the event that there is a dispute among any of the parties
concerning the right of the Issuer to cancel the Series J Bonds pursuant to the
provisions of this Section 9.3, the Company will nevertheless comply with all of
the terms of this Agreement as hereinabove amended and make all payments
required hereunder from and after the Cancellation Date directly to the Trustee
at the new interest rate. If a court of competent jurisdiction determines
finally that the Issuer's attempted cancellation of the Series J Bonds violated
the terms of this Agreement, the Series J Bonds will be reinstated in accordance
with the final order of the court, but until such final order is made, the
Company will continue to comply with the terms of this Agreement as hereinabove
amended. Any overpayment by the Company will be returned to it by the Trustee
upon reinstatement of the Series J Bonds.
Section 9.4. Specific Performance. In addition to the rights and
remedies provided for in Section 9.2 hereof, if the Company commits a breach or
threatens to commit a breach of any of the provisions of this Agreement, the
Indenture or the Loan Documents, the Issuer and the Trustee shall each have the
right, without posting bond or other security, to seek injunctive relief or
specific performance, it being acknowledged and agreed that any such breach or
threatened breach will cause irreparable injury to the Issuer and the Trustee
and that money damages will not provide an adequate remedy.
Any amounts collected pursuant to action taken under this Section shall
be paid into the Bond Fund and applied in accordance with the provisions of the
Indenture.
Section 9.5. No Remedy Exclusive. Subject to Section 9.02 of the
Indenture, no remedy herein conferred upon or reserved to the Issuer 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 Agreement or now or hereafter existing at
law or in equity. No delay or omission to exercise any right or power accruing
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 Issuer or
the Trustee to exercise any remedy reserved to it in this Article, it shall not
be necessary to give any notice, other than such notice as may be
IX-5
required in this Article. Such rights and remedies as are given the Issuer
hereunder shall also extend to the Trustee, and the Trustee and the Owners of
the Bonds, subject to the provisions of the Indenture, shall be entitled to the
benefit of all covenants and agreements herein contained.
Section 9.6. Agreement to Pay Attorneys' Fees and Expenses. In the
event the Company should default under any of the provisions of this Agreement
and the Issuer should employ attorneys or incur other expenses for the
collection of payments required hereunder or the enforcement of performance or
observance of any obligation or agreement on the part of the Company herein
contained, the Company agrees that it will on demand therefor pay to the Issuer
the reasonable fee of such attorneys and such other expenses so incurred by the
Issuer.
Section 9.7. No Additional Waiver Implied by One Waiver. In the event
any agreement contained in this Agreement should be breached by either party and
thereafter waived by the other party, such waiver shall be limited to the
particular breach so waived and shall not be deemed to waive any other breach
hereunder.
[END OF ARTICLE XX]
XX-0
ARTICLE X
OPTIONS TO TERMINATE AGREEMENT
The Company shall have, and is hereby granted, the option to terminate
its obligations under this Agreement at any time if any of the events set forth
below shall occur:
(A) The Project shall have been damaged or destroyed (1) to such extent
that it cannot, in the Company's reasonable judgment, be reasonably restored
within a period of six (6) months to the condition thereof immediately preceding
such damage or destruction, and (2) to such extent that the Company is thereby
prevented, in the Company's reasonable judgment, from carrying on its normal
operations at the Project for a period of six (6) months or more.
(B) Title to, or the temporary use for a period of six (6) months or
more of, all or substantially all the Project, or such part thereof as shall
materially interfere, in the Company's reasonable judgment, with the operation
of the Project for the purpose for which the Project is designed, shall have
been taken under the exercise of the power of eminent domain by any governmental
body or by any person, firm or corporation acting under governmental authority
(including such a taking or takings as results in the Company being thereby
prevented from carrying on its normal operations at the Project for a period of
six (6) months or more).
(C) Changes which the Company cannot reasonably control or overcome in
the economic availability of materials, supplies, labor, equipment and other
properties and things necessary for the efficient operation of the Project for
the purposes contemplated by this Agreement shall have occurred, or
technological or other changes shall have occurred which in the reasonable
judgment of the Company render the continued operation of the Project uneconomic
for such purposes.
(D) As a result of any changes in the Constitution of the State or the
Constitution of the United States of America or of legislative or administrative
action (whether state or federal) or by final decree, judgment or order of any
court or administrative body (whether state or federal) entered after the
contest thereof by the Company in good faith, this Agreement shall have become
void or unenforceable or impossible of performance in accordance with the intent
and purposes of the parties as expressed in this Agreement, or unreasonable
burdens or excessive liabilities shall have been imposed on the Company in
respect to the Project, including, without limitation, federal, state or other
ad valorem, property, income or other taxes not being imposed on the date of
this Agreement. To exercise such option, the Company shall within
X-1
ninety (90) days following the event authorizing such termination, give written
notice to the Issuer and the Trustee and shall specify therein the date of
redemption of Bonds pursuant to Section 3.01 of the Indenture, which date shall
be the next interest payment date in respect of the Bonds for which the required
notice of redemption can practicably be given. In accordance with the terms of
the Indenture, the Company shall make arrangements for the Trustee to give the
required notice of redemption. In order to exercise such option, the Company
shall pay, or cause to be paid, on or prior to the applicable redemption date,
to the Trustee, an amount equal to the sum of the following:
(1) An amount of money which, when added to the amount then on deposit
and available in the Bond Fund, will be sufficient to retire and redeem all the
Outstanding Bonds on the earliest possible redemption date after notice as
provided in the Indenture, including, without limitation, the principal amount
thereof, all interest to accrue to said redemption date, and the applicable
redemption premium, if any, plus
(2) An amount of money equal to the Trustee's fees and expenses under
the Indenture accrued and to accrue until such final payment and redemption of
the Bonds, plus
(3) An amount of money equal to the Issuer's fees and expenses under
this Agreement accrued and to accrue until such final payment and redemption
of the Bonds.
[END OF ARTICLE X]
X-2
ARTICLE XI
MISCELLANEOUS
Section 11.1. Term of Agreement. This Agreement shall remain in full
force and effect from the date hereof to and including such time as all of the
Series J Bonds and the fees and expenses of the Issuer and the Trustee and all
amounts payable hereunder shall have been fully paid or provision made for such
payment.
Section 11.2. Notices. All notices, certificates or other
communications hereunder shall be sufficiently given and shall be deemed given
when delivered or mailed by first class mail or by registered or certified
mail, postage prepaid, addressed as follows: if to the Issuer, to 000 Xxxxx
Xxxxxx Xxxxxx, Xxxxxxx Xxxxx One -- CN 990, Xxxxxxx, Xxx Xxxxxx 00000,
Attention: Executive Director; if to the Trustee, to The Bank of New York (NJ),
000 Xxxxx Xxxx Xxxx, Xxxx Xxxxxxxx, Xxx Xxxxxx 00000, Attention: Corporate Trust
Department; to the Company, to Xxxx Hauling and Warehousing System, Inc., X.X.
Xxx 0000, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention: Xx. Xxxxxxx Xxxxxx, Vice
President; and if to the Purchaser, to Xxxx Xxxxxxx Advisors, 000 Xxxxxxxxxxx
Xxxxxx, 0xx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000. A duplicate copy of each notice,
certificate or other communication given hereunder by the Issuer or the Company
shall also be given to the Trustee. The Issuer, the Company, the Trustee and the
Purchaser may, by written notice given hereunder, designate any further or
different addresses to which subsequent notices, certificates or other
communications shali be sent.
Section 11.3. Binding Effect. This Agreement shall inure to the benefit
of and shall be binding upon the Issuer, the Company, the Trustee, the Owners of
the Bonds and their respective successors and assigns, subject, however, to the
limitations contained in Section 2.1(b) hereof.
Section 11.4. Severability. In the event any provision of this
Agreement shall be held invalid or unenforceable by any court of competent
jurisdiction, such holding shall not invalidate or render unenforceable any
other provision hereof.
Section 11.5. Amounts Remaining in Funds. Subject to the provisions of
Section 5.12 of the Indenture, it is agreed by the parties hereto that any
amounts remaining in the Bond Fund, the Project Fund, or any other fund created
under the Indenture upon expiration or earlier termination of this Agreement, as
provided in this Agreement, after payment in full of the Bonds (or provision for
payment thereof having been made in accordance with the provisions of the
Indenture), the fees and expenses of the Trustee in accordance with the
Indenture and all amounts which may be due under the Bond Placement Agreement,
the Mortgage, any Loan Document
[CONTINUED ON PAGE XI-2]
XI-1
or the Guaranty, shall belong to and be paid to the Company by the Trustee.
Section 11. 6. Amendments, Changes and Modification. Subsequent to the
issuance of Bonds and prior to their payment in full (or provision for the
payment thereof having been made in accordance with the provisions of the
Indenture), and except as otherwise herein expressly provided this Agreement may
not be effectively amended, changed, modified, altered or terminated without the
written consent of the Trustee in accordance with the provisions of the
Indenture.
Section 11.7. Execution in Counterparts. This Agreement may be
simultaneously executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same instrument.
Section 11.8. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State.
Section 11.9. Captions. The captions and headings in this Agreement are
for convenience only and in no way define, limit or describe the scope or intent
of any provisions or Sections of this Agreement.
IN WITNESS WHEREOF, the Issuer has caused this Agreement to be executed
in its name and the Company has caused this Agreement to be executed in its name
all as of the date first above written.
ATTEST: NEW JERSEY ECONOMIC DEVELOPMENT
AUTHORITY
/s/ Xxxxx X. Xxxxxxx, Xx By: /s/ Xxxxx X. Franini
------------------------ ---------------------
Xxxxx X. Xxxxxxx, Xx. Xxxxx X. Franini
Assistant Secretary Executive DiVector
[SEAL)
ATTEST: XXXX HAULING AND WAREHOUSING
SYSTEM, INC.
/s/ Xxxx Xxxxx By: /s/ Xxxxxxx Xxxxxx
----------------------- ---------------------------
Xxxx Xxxxx, Secretary Xxxxxxx Xxxxxx,
Vice President
XI-2
