Exhibit 4L
LOAN AGREEMENT
NWK3: 352223.02
BY AND BETWEEN
THE STATE OF NEW JERSEY,
ACTING BY AND THROUGH THE NEW JERSEY
DEPARTMENT OF ENVIRONMENTAL PROTECTION,
AND
THE MOUNT XXXXX WATER COMPANY
DATED AS OF NOVEMBER 1, 1998
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TABLE OF CONTENTS
Page
EXHIBIT A (1) Description of Project and Environmental
Infrastructure System A-1-1
(2) Description of Loan A-2-1
EXHIBIT B Basis for Determination of Allowable Project Costs B-1
EXHIBIT C Estimated Disbursement Schedule X-0
XXXXXXX X Xxxxxxxx Xxxxxxxx Xxxx X-0
EXHIBIT E Opinions of Borrower's Bond and General Counsels E-1
EXHIBIT F Additional Covenants and Requirements F-1
EXHIBIT G General Administrative Requirements for the State
Environmental Infrastructure Financing ProgramG-1
-3-
NEW JERSEY ENVIRONMENTAL INFRASTRUCTURE FUND LOAN AGREEMENT
THIS LOAN AGREEMENT, made and entered into as of this 1st
day of November, 1998, by and between THE STATE OF NEW JERSEY,
acting by and through the New Jersey Department of Environmental
Protection, and THE MOUNT XXXXX WATER COMPANY, a corporation duly
created and validly existing under the laws of the State of New
Jersey;
WITNESSETH THAT:
WHEREAS, the Borrower has, in accordance with the
Regulations, made timely application to the State for a Loan to
finance a portion of the Cost of the Project (as each of the
foregoing terms is defined in Section 1.01 hereof; all
capitalized terms used in this Loan Agreement shall have, unless
the context otherwise requires, the meanings set forth in said
Section 1.01);
WHEREAS, the State has approved the Borrower's application
for a Loan from Federal Funds, if and when received by and
available to the State, and moneys from repayments of loans
previously made from such Federal Funds, in an amount not to
exceed Five Million Eight Hundred Ninety-Four Thousand Nine
Hundred Nine Dollars ($5,894,909) to finance a portion of the
Cost of the Project;
WHEREAS, the New Jersey State Legislature has approved an
appropriations act that authorizes an expenditure of said
proceeds, Federal Funds or related moneys to finance a portion of
the Cost of the Project;
WHEREAS, the Borrower, in accordance with the Business
Corporation Law and all other applicable law, will issue a
Borrower Bond to the State evidencing said Loan at the Loan
Closing; and
WHEREAS, in accordance with the New Jersey Environmental
Infrastructure Trust Act, P.L. 1985, c. 334, as amended, and the
Regulations, the Borrower has been awarded a Trust Loan for a
portion of the Cost of the Project plus, if applicable to the
Borrower, capitalized interest on the Trust Loan, certain costs
of issuance and bond insurance premium related thereto.
NOW, THEREFORE, for and in consideration of the award of the
Loan by the State, the Borrower agrees to complete the Project
and to perform under this Loan Agreement in accordance with the
conditions, covenants and procedures set forth herein and
attached hereto as part hereof, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The following terms as used in
this Loan Agreement shall, unless the context clearly requires
otherwise, have the following meanings:
"Administrative Fee" means an annual fee of up to one
percent (1.0%) of the initial principal amount of the Loan or
such lesser amount, if any, as may be authorized by any act of
the New Jersey State Legislature and as the State may approve
from time to time.
"Authorized Officer" means, in the case of the Borrower, any
person or persons authorized pursuant to a resolution of the
board of directors of the Borrower to perform any act or execute
any document relating to the Loan, the Borrower Bond or this Loan
Agreement.
"Borrower" means the corporation that is a party to and is
described in the first paragraph of this Loan Agreement, and its
successors and assigns.
"Borrower Bond" means the general obligation bond, note,
debenture or other evidence of indebtedness authorized, executed,
attested and delivered by the Borrower to the State to evidence
the Loan, a specimen of which is attached hereto as Exhibit D and
made a part hereof.
"Borrowers" means any other Local Government Unit or Private
Entity (as such terms are defined in the Regulations) authorized
to construct, operate and maintain Environmental Infrastructure
Facilities that have entered into Loan Agreements with the State
pursuant to which the State will make Loans to such recipients
from Federal Funds.
"Business Corporation Law" means the "New Jersey Business
Corporation Act", constituting Chapter 263 of the Pamphlet Laws
of 1968 of the State of New Jersey (codified at N.J.S.A. 14A:1-1
et seq.), as the same may from time to time be amended and
supplemented.
"Code" means the Internal Revenue Code of 1986, as the same
may from time to time be amended and supplemented, including any
regulations promulgated thereunder, any successor code thereto
and any administrative or judicial interpretations thereof.
"Cost" means those costs that are eligible, reasonable,
necessary, allocable to the Project and permitted by generally
accepted accounting principles, including Allowances and Building
Costs (as defined in the Regulations), as shall be determined on
a project-specific basis in accordance with the Regulations as
set forth in Exhibit B hereto, as the same may be amended by
subsequent eligible costs as evidenced by a certificate of an
authorized officer of the State.
"Environmental Infrastructure Facilities" means Water Supply
Facilities (as such term is defined in the Regulations).
"Environmental Infrastructure System" means the
Environmental Infrastructure Facilities of the Borrower,
including the Project, described in Exhibit A-1 attached hereto
and made a part hereof for which the Borrower is borrowing the
Loan under this Loan Agreement.
"Event of Default" means any occurrence or event specified
in Section 5.01 hereof.
"Federal Funds" means those funds awarded to the State
pursuant to the Clean Water Act (33 U.S.C. 1251 et seq.) or the
Safe Drinking Water Act (42 U.S.C. 300f et seq.), as the same
may from time to time be amended and supplemented.
"Guarantor" means Elizabethtown Water Company, a New Jersey
corporation.
"Loan" means the loan made by the State to the Borrower to
finance or refinance a portion of the Cost of the Project
pursuant to this Loan Agreement. For all purposes of this Loan
Agreement, the principal amount of the Loan at any time shall be
the amount of the loan commitment set forth in Exhibit A-2
attached hereto and made a part hereof (such amount being also
specified as the initial aggregate principal amount of the
Borrower Bond) less any amount of such principal amount that has
been repaid by the Borrower under this Loan Agreement and less
any adjustment made for low bid or final building costs pursuant
to the provisions of N.J.A.C. 7:22-3.26 and the appropriations
act of the New Jersey State Legislature authorizing the
expenditure of moneys to finance a portion of the Cost of the
Project.
"Loan Agreement" means this Loan Agreement, including the
Exhibits attached hereto, as it may be supplemented, modified or
amended from time to time in accordance with the terms hereof.
"Loan Agreements" means any other loan agreements entered
into by and between the State and one or more of the Borrowers
pursuant to which the State will make Loans to such Borrowers
from Federal Funds.
"Loan Closing" means the date upon which the Borrower shall
deliver its Borrower Bond, as previously authorized, executed and
attested, to the State.
"Loan Repayments" means the repayments of the principal
amount of the Loan payable by the Borrower pursuant to Section
3.03 of this Loan Agreement, including payments payable under the
Borrower Bond, but excluding the Administrative Fee.
"Loan Servicer" means, initially, First Union National Bank,
the loan servicer for the Loan and the Trust Loan, duly appointed
and designated as "Loan Servicer" pursuant to the Loan Servicing
and Trust Bonds Security Agreement dated as of November 1, 1998
by and among the Trust, the State of New Jersey, acting by and
through the Treasurer of the State of New Jersey on behalf of the
New Jersey Department of Environmental Protection, and First
Union National Bank, and any successors as "Loan Servicer" under
such agreement, as the same may be modified, amended or
supplemented from time to time in accordance with its terms.
"Loan Term" means the term of this Loan Agreement provided
in Sections 3.01 and 3.03 hereof and in Exhibit A-2 attached
hereto and made a part hereof.
"Loans" means the loans made by the State to the Borrowers
under the Loan Agreements from Federal Funds.
"Master Program Trust Agreement" means that certain Master
Program Trust Agreement dated as of November 1, 1995 by and among
the Trust, the State of New Jersey, United States Trust Company
of New York, as Master Program Trustee thereunder, The Bank of
New York (NJ), in several capacities thereunder, and First
Fidelity Bank, N.A. (predecessor to First Union National Bank),
in several capacities thereunder, as the same may be amended and
supplemented from time to time in accordance with its terms.
"Prime Rate" means the prevailing commercial interest rate
announced by the Loan Servicer from time to time in the State of
New Jersey as its prime lending rate.
"Project" means the Environmental Infrastructure Facilities
of the Borrower described in Exhibit A-1 attached hereto and made
a part hereof, which constitutes a project for which the State is
permitted to make a loan to the Borrower pursuant to the
Regulations, all or a portion of the Cost of which is financed or
refinanced by the State through the making of the Loan under this
Loan Agreement.
"Regulations" means the rules and regulations, as
applicable, now or hereafter promulgated under N.J.A.C. 7:22-3 et
seq., 7:22-4 et seq., 7:22-5 et seq., 7:22-9 et seq. and 7:22-10
et seq., as the same may from time to time be amended and
supplemented.
"State" means the State of New Jersey, acting, unless
otherwise specifically indicated, by and through the New Jersey
Department of Environmental Protection, and its successors and
assigns.
"Trust" means the New Jersey Environmental Infrastructure
Trust, a public body corporate and politic with corporate
succession duly created and validly existing under and by virtue
of P.L. 1985, c. 334, as amended (N.J.S.A. 58:11B-1 et seq.).
"Trust Loan" means the loan made to the Borrower by the
Trust pursuant to the Trust Loan Agreement.
"Trust Loan Agreement" means the loan agreement by and
between the Borrower and the Trust dated as of November 1, 1998
to finance or refinance a portion of the Cost of the Project.
Except as otherwise defined herein or where the context
otherwise requires, words importing the singular number shall
include the plural number and vice versa, and words importing
persons shall include firms, associations, corporations, agencies
and districts. Words importing one gender shall include the
other gender.
ARTICLE II
REPRESENTATIONS AND COVENANTS OF BORROWER
SECTION 2.01. Representations of Borrower. The Borrower
represents for the benefit of the State as follows:
(a) Organization and Authority.
(i) The Borrower is a corporation duly created and
validly existing under and pursuant to the Constitution and
statutes of the State of New Jersey, including the Business
Corporation Law.
(ii) The acting officers of the Borrower who are
contemporaneously herewith performing or have previously
performed any action contemplated in this Loan Agreement
either are or, at the time any such action was performed,
were the duly appointed or elected officers of such Borrower
empowered by applicable New Jersey law and, if applicable,
authorized by resolution of the Borrower to perform such
actions. To the extent any such action was performed by an
officer no longer the duly acting officer of such Borrower,
all such actions previously taken by such official are still
in full force and effect.
(iii) The Borrower has full legal right and authority
and all necessary licenses and permits required as of the
date hereof to own, operate and maintain its Environmental
Infrastructure System, to carry on its activities relating
thereto, to execute, attest and deliver this Loan Agreement
and the Borrower Bond, to sell the Borrower Bond to the
State, to undertake and complete the Project and to carry
out and consummate all transactions contemplated by this
Loan Agreement.
(iv) The Borrower's board of directors has taken all
necessary action to authorize the execution, attestation and
delivery of this Loan Agreement and the Borrower Bond, the
sale of the Borrower Bond to the State and the Borrower's
undertaking and completion of the Project.
(v) The Borrower has duly authorized, approved and
consented to all necessary action to be taken by the
Borrower for: (A) the execution, attestation, delivery and
performance of this Loan Agreement and the transactions
contemplated hereby; (B) the issuance of the Borrower Bond
and the sale thereof to the State upon the terms set forth
herein; and (C) the execution, delivery and due performance
of any and all other certificates, agreements and
instruments that may be required to be executed, delivered
and performed by the Borrower in order to carry out, give
effect to and consummate the transactions contemplated by
this Loan Agreement.
(vi) This Loan Agreement and the Borrower Bond have
each been duly authorized by the Borrower and duly executed,
attested and delivered by Authorized Officers of the
Borrower, and the Borrower Bond has been duly sold by the
Borrower to the State; and assuming that the State has all
the requisite power and authority to authorize, execute,
attest and deliver, and has duly authorized, executed,
attested and delivered, this Loan Agreement, and assuming
further that this Loan Agreement is the legal, valid and
binding obligation of the State, enforceable against the
State in accordance with its terms, each of this Loan
Agreement and the Borrower Bond constitutes a legal, valid
and binding obligation of the Borrower, enforceable against
the Borrower in accordance with its respective terms, except
as the enforcement thereof may be affected by bankruptcy,
insolvency or other laws or the application by a court of
legal or equitable principles affecting creditors' rights;
and the information contained under "Description of Loan" in
Exhibit A-2 attached hereto and made a part hereof is true
and accurate in all respects.
(b) Full Disclosure. There is no fact that the Borrower
has not disclosed to the State in writing on the Borrower's
application for the Loan or otherwise that materially adversely
affects or (so far as the Borrower can now foresee) that will
materially adversely affect the properties, activities, prospects
or condition (financial or otherwise) of the Borrower or its
Environmental Infrastructure System, or the ability of the
Borrower to make all Loan Repayments or otherwise to observe and
perform its duties, covenants, obligations and agreements under
this Loan Agreement and the Borrower Bond.
(c) Pending Litigation. There are no proceedings pending
or, to the knowledge of the Borrower, threatened against or
affecting the Borrower in any court or before any governmental
authority or arbitration board or tribunal that, if adversely
determined, would materially adversely affect (i) the undertaking
or completion of the Project, (ii) the properties, activities,
prospects or condition (financial or otherwise) of the Borrower
or its Environmental Infrastructure System, (iii) the ability of
the Borrower to make all Loan Repayments, (iv) the authorization,
execution, attestation or delivery of this Loan Agreement or the
Borrower Bond, (v) the issuance of the Borrower Bond and the sale
thereof to the State, or (vi) the Borrower's ability otherwise to
observe and perform its duties, covenants, obligations and
agreements under this Loan Agreement and the Borrower Bond, which
proceedings have not been previously disclosed in writing to the
State either in the Borrower's application for the Loan or
otherwise.
(d) Compliance with Existing Laws and Agreements. (i) The
authorization, execution, attestation and delivery of this Loan
Agreement and the Borrower Bond by the Borrower, (ii) the sale of
the Borrower Bond to the State, (iii) the observation and
performance by the Borrower of its duties, covenants, obligations
and agreements hereunder and thereunder, (iv) the consummation of
the transactions provided for in this Loan Agreement and the
Borrower Bond, and (v) the undertaking and completion of the
Project will not (A) other than the lien, charge or encumbrance
created hereby, by the Borrower Bond and by any other outstanding
debt obligations of the Borrower that are at parity with the
Borrower Bond as to lien on, and source and security for payment
thereon from, the revenues of the Borrower's Environmental
Infrastructure System, result in the creation or imposition of
any lien, charge or encumbrance upon any properties or assets of
the Borrower pursuant to, (B) result in any breach of any of the
terms, conditions or provisions of, or (C) constitute a default
under, any existing resolution, outstanding debt or lease
obligation, trust agreement, indenture, mortgage, deed of trust,
loan agreement or other instrument to which the Borrower is a
party or by which the Borrower, its Environmental Infrastructure
System or any of its properties or assets may be bound, nor will
such action result in any violation of the provisions of the
charter or other document pursuant to which the Borrower was
established or any laws, ordinances, injunctions, judgments,
decrees, rules, regulations or existing orders of any court or
governmental or administrative agency, authority or person to
which the Borrower, its Environmental Infrastructure System or
its properties or operations is subject.
(e) No Defaults. No event has occurred and no condition
exists that, upon the authorization, execution, attestation and
delivery of this Loan Agreement and the Borrower Bond, the
issuance of the Borrower Bond and the sale thereof to the State
or the receipt of the amount of the Loan, would constitute an
Event of Default hereunder. Since December 31, 1975 and as of
the date of delivery of this Loan Agreement, the Borrower has not
been, and is not now, in default in the payment of the principal
of or interest on any of its bonds, notes, lease purchase
agreements or other debt obligations. The Borrower is not in
violation of, and has not received notice of any claimed
violation of, any term of any agreement or other instrument to
which it is a party or by which it, its Environmental
Infrastructure System or its properties may be bound, which
violation would materially adversely affect the properties,
activities, prospects or condition (financial or otherwise) of
the Borrower or its Environmental Infrastructure System or the
ability of the Borrower to make all Loan Repayments, to pay all
principal of the Borrower Bond or otherwise to observe and
perform its duties, covenants, obligations and agreements under
this Loan Agreement and the Borrower Bond.
(f) Governmental Consent. The Borrower has obtained all
permits and approvals required to date by any governmental body
or officer for the authorization, execution, attestation and
delivery of this Loan Agreement and the Borrower Bond, for the
issuance of the Borrower Bond and the sale thereof to the State,
for the making, observance and performance by the Borrower of its
duties, covenants, obligations and agreements under this Loan
Agreement and the Borrower Bond and for the undertaking or
completion of the Project and the financing or refinancing
thereof, including, but not limited to, the approval by the New
Jersey Board of Public Utilities (the "BPU") of the issuance by
the Borrower of the Borrower Bond to the State and any other
approvals required therefor by the BPU; and the Borrower has
complied with all applicable provisions of law requiring any
notification, declaration, filing or registration with any
governmental body or officer in connection with the making,
observance and performance by the Borrower of its duties,
covenants, obligations and agreements under this Loan Agreement
and the Borrower Bond or with the undertaking or completion of
the Project and the financing or refinancing thereof. No
consent, approval or authorization of, or filing, registration or
qualification with, any governmental body or officer that has not
been obtained is required on the part of the Borrower as a
condition to the authorization, execution, attestation and
delivery of this Loan Agreement and the Borrower Bond, the
issuance of the Borrower Bond and the sale thereof to the State,
the undertaking or completion of the Project or the consummation
of any transaction herein contemplated.
(g) Compliance with Law. The Borrower:
(i) is in compliance with all laws, ordinances,
governmental rules and regulations to which it is subject,
the failure to comply with which would materially adversely
affect (A) the ability of the Borrower to conduct its
activities or to undertake or complete the Project or (B)
the condition (financial or otherwise) of the Borrower or
its Environmental Infrastructure System; and
(ii) has obtained all licenses, permits, franchises or
other governmental authorizations presently necessary for
the ownership of its properties or for the conduct of its
activities that, if not obtained, would materially adversely
affect (A) the ability of the Borrower to conduct its
activities or to undertake or complete the Project or (B)
the condition (financial or otherwise) of the Borrower or
its Environmental Infrastructure System.
(h) Use of Proceeds. The Borrower will apply the proceeds
of the Loan from the State as described in Exhibit B attached
hereto and made a part hereof (i) to finance or refinance a
portion of the Cost of the Borrower's Project; and (ii) where
applicable, to reimburse the Borrower for a portion of the Cost
of the Borrower's Project, which portion was paid or incurred in
anticipation of reimbursement by the State and is eligible for
such reimbursement under and pursuant to the Regulations, the
Code and any other applicable law. All of such costs constitute
Costs for which the State is authorized to make Loans to the
Borrower pursuant to the Regulations.
SECTION 2.02. Particular Covenants of Borrower.
(a) Promise to Pay. The Borrower unconditionally promises
to make punctual payment of the principal of the Loan and the
Borrower Bond and all other amounts due under this Loan Agreement
and the Borrower Bond according to their respective terms.
(b) Performance Under Loan Agreement. The Borrower
covenants and agrees (i) to comply with all applicable State of
New Jersey and federal laws, rules and regulations in the
performance of this Loan Agreement; (ii) to maintain its
Environmental Infrastructure System in good repair and operating
condition; and (iii) to cooperate with the State in the
observance and performance of the respective duties, covenants,
obligations and agreements of the Borrower and the State under
this Loan Agreement.
(c) Revenue Obligation; No Prior Pledges. The Borrower
shall not be required to make payments under this Loan Agreement
except from the revenues of its Environmental Infrastructure
System and from such other funds of such Environmental
Infrastructure System legally available therefor and from any
other sources pledged to such payment pursuant to subsection (a)
of this Section 2.02. In no event shall the Borrower be required
to make payments under this Loan Agreement from any revenues or
receipts not derived from its Environmental Infrastructure System
or pledged pursuant to subsection (a) of this Section 2.02.
Except for (i) loan repayments required with respect to the Trust
Loan, (ii) the debt service on any future bonds of the Borrower
issued at parity with the Borrower Bond, and (iii) the debt
service on any bonds, notes or evidences of indebtedness of the
Borrower at parity with the Borrower Bond and currently
outstanding or issued on the date hereof, the revenues derived by
the Borrower from its Environmental Infrastructure System, after
the payment of all costs of operating and maintaining the
Environmental Infrastructure System, are and will be free and
clear of any pledge, lien, charge or encumbrance thereon or with
respect thereto prior to, or of equal rank with, the obligation
of the Borrower to make Loan Repayments under this Loan Agreement
and the Borrower Bond, and all corporate or other action on the
part of the Borrower to that end has been and will be duly and
validly taken.
(d) Completion of Project and Provision of Moneys
Therefor. The Borrower covenants and agrees (i) to exercise its
best efforts in accordance with prudent environmental
infrastructure utility practice to complete the Project and to
accomplish such completion on or before the estimated Project
completion date set forth in Exhibit G hereto and made a part
hereof; (ii) to comply with the terms and provisions contained in
Exhibit G hereto; and (iii) to provide from its own fiscal
resources all moneys, in excess of the total amount of loan
proceeds it receives under the Loan and Trust Loan, required to
complete the Project.
(e) Disposition of Environmental Infrastructure System.
Neither the Borrower nor the Guarantor shall permit the
disposition of all or substantially all of the Borrower's
Environmental Infrastructure System, directly or indirectly,
including, without limitation, by means of sale, lease,
abandonment, sale of stock, statutory merger or otherwise
(collectively, a "Disposition"), except on ninety (90) days'
prior written notice to the State, and, in any event, shall not
permit a Disposition unless the Borrower shall, in accordance
with Section 4.02 hereof, assign this Loan Agreement and the
Borrower Bond and its rights and interests hereunder and
thereunder to the purchaser or lessee of the Environmental
Infrastructure System, and such purchaser or lessee shall assume
all duties, covenants, obligations and agreements of the Borrower
under this Loan Agreement and the Borrower Bond.
(f) [Reserved.]
(g) Operation and Maintenance of Environmental
Infrastructure System. The Borrower covenants and agrees that it
shall, in accordance with prudent environmental infrastructure
utility practice, (i) at all times operate the properties of its
Environmental Infrastructure System and any business in
connection therewith in an efficient manner, (ii) maintain its
Environmental Infrastructure System in good repair, working order
and operating condition, and (iii) from time to time make all
necessary and proper repairs, renewals, replacements, additions,
betterments and improvements with respect to its Environmental
Infrastructure System so that at all times the business carried
on in connection therewith shall be properly and advantageously
conducted.
(h) Records and Accounts. The Borrower shall keep accurate
records and accounts for its Environmental Infrastructure System
(the "System Records"). Such System Records shall be part of the
annual audit of the general records of the Guarantor. Such
System Records and general records of the Guarantor shall be made
available for inspection by the State at any reasonable time upon
prior written notice, and a copy of such annual audit, including
all written comments and recommendations, shall be furnished to
the State within 150 days of the close of the fiscal year being
so audited or, with the consent of the State, such additional
period as may be provided by law.
(i) Inspections; Information. The Borrower shall permit
the State and any party designated by the State, at any and all
reasonable times during construction of the Project and
thereafter upon prior written notice, to examine, visit and
inspect the property, if any, constituting the Project and to
inspect and make copies of any accounts, books and records,
including (without limitation) its records regarding receipts,
disbursements, contracts, investments and any other matters
relating thereto and to its financial standing, and shall supply
such reports and information as the State may reasonably require
in connection therewith.
(j) Insurance. The Borrower shall maintain or cause to be
maintained, in force, insurance policies with responsible
insurers or self-insurance programs providing against risk of
direct physical loss, damage or destruction of its Environmental
Infrastructure System at least to the extent that similar
insurance is usually carried by utilities constructing, operating
and maintaining Environmental Infrastructure Facilities of the
nature of the Borrower's Environmental Infrastructure System,
including liability coverage, all to the extent available at
reasonable cost but in no case less than will satisfy all
applicable regulatory requirements.
(k) Cost of Project. The Borrower certifies that the
building cost of the Project, as listed in Exhibit B hereto and
made a part hereof, is a reasonable and accurate estimation
thereof, and it will supply to the State a certificate from a
licensed professional engineer authorized to practice in the
State of New Jersey stating that such building cost is a
reasonable and accurate estimation and that the useful life of
the Project exceeds twenty (20) years from the expected date of
the Loan Closing.
(l) Delivery of Documents. Concurrently with the delivery
of this Loan Agreement (as previously authorized, executed and
attested) at the Loan Closing, the Borrower will cause to be
delivered to the State each of the following items:
(i) an opinion of the Borrower's bond counsel
substantially in the form of Exhibit E hereto; provided,
however, that the State may permit portions of such opinion
to be rendered by general counsel to the Borrower and may
permit variances in such opinion from the form set forth in
Exhibit E if such variances are acceptable to the State;
(ii) counterparts of this Loan Agreement as previously
executed and attested by the parties hereto;
(iii) copies of those resolutions finally adopted by
the board of directors of the Borrower and requested by the
State, including, without limitation, resolutions of the
Borrower authorizing the execution, attestation and delivery
of this Loan Agreement and the execution, attestation, sale
and delivery of the Borrower Bond to the State, and
certified copies of orders of the BPU approving the issuance
by the Borrower of the Borrower Bond to the State and
setting forth any other approvals required therefor by the
BPU; and
(iv) the certificates of insurance coverage as required
pursuant to the terms of Section 3.06(c) hereof and such
other certificates, documents, opinions and information as
the State may require in Exhibit F hereto, if any.
(m) Execution and Delivery of Borrower Bond. Concurrently
with the delivery of this Loan Agreement at the Loan Closing, the
Borrower shall also deliver to the State the Borrower Bond, as
previously executed and attested.
(n) Notice of Material Adverse Change. The Borrower shall
promptly notify the State of any material adverse change in the
properties, activities, prospects or condition (financial or
otherwise) of the Borrower or its Environmental Infrastructure
System, or in the ability of the Borrower to make all Loan
Repayments and otherwise to observe and perform its duties,
covenants, obligations and agreements under this Loan Agreement
and the Borrower Bond.
(o) Continuing Representations. The representations of the
Borrower contained herein shall be true at the time of the
execution of this Loan Agreement and at all times during the term
of this Loan Agreement.
(p) Additional Covenants and Requirements. No later than
the Loan Closing and, if necessary, in connection with the making
of the Loan, additional covenants and requirements have been
included in Exhibit F hereto and made a part hereof. Such
covenants and requirements may include, but need not be limited
to, the maintenance of specified levels of Environmental
Infrastructure System rates, the issuance of additional debt of
the Borrower and the transfer of revenues and receipts from the
Borrower's Environmental Infrastructure System. The Borrower
agrees to observe and comply with each such additional covenant
and requirement, if any, included in Exhibit F hereto.
ARTICLE III
LOAN TO BORROWER; AMOUNTS PAYABLE; GENERAL AGREEMENTS
SECTION 3.01. Loan; Loan Term. The State hereby agrees to
make the Loan as described in Exhibit A-2 hereof and to disburse
proceeds of the Loan to the Borrower in accordance with Section
3.02 and Exhibit C hereof, and the Borrower hereby agrees to
borrow and accept the Loan from the State upon the terms set
forth in Exhibit A-2 attached hereto and made a part hereof;
provided, however, that the State shall be under no obligation to
make the Loan if (a) at the Loan Closing, the Borrower does not
deliver to the State a Borrower Bond and such other documents
required under Section 2.02(l) hereof, or (b) an Event of Default
has occurred and is continuing under this Loan Agreement.
Although the State intends to disburse proceeds of the Loan to
the Borrower at the times and up to the amounts set forth in
Exhibit C to pay a portion of the Cost of the Project, due to
unforeseen circumstances there may not be sufficient Federal
Funds on deposit on any date to make the disbursement in such
amount. Nevertheless, the Borrower agrees that the aggregate
principal amount set forth in Exhibit A-2 hereto shall constitute
the initial principal amount of the Loan (as the same may be
adjusted downward in accordance with the definition thereof), and
the State shall have no obligation thereafter to loan any
additional amounts to the Borrower.
The Borrower shall have no legal or equitable interest in
the Federal Funds received by and available to the State or in
moneys from repayments of loans previously made from Federal
Funds by the State.
The Borrower shall use the proceeds of the Loan strictly in
accordance with Section 2.01(h) hereof.
The payment obligations created under this Loan Agreement
and the obligations to pay the principal of and other amounts due
under the Borrower Bond are each direct, general, irrevocable and
unconditional obligations of the Borrower payable from any source
legally available to the Borrower.
SECTION 3.02. Disbursement of Loan Proceeds. (a) The State
shall disburse Federal Funds earmarked for the Loan to the
Borrower in accordance with the terms hereof. Before each and
every disbursement of the proceeds of the Loan by the State to
the Borrower, the Borrower shall in accordance with the
procedures set forth in the Regulations submit to the State a
requisition executed by an Authorized Officer of the Borrower.
(b) The State shall not be under any obligation to disburse
any Loan proceeds to the Borrower under this Loan Agreement,
unless:
(i) the Loan Closing shall have occurred on the date
established therefor by the State;
(ii) there shall be Federal Funds available from time
to time to fund the Loan, as determined solely by the State;
(iii) in accordance with the "New Jersey Environmental
Infrastructure Trust Act", P.L. 1985, c. 334, as amended
(N.J.S.A. 58:11B-1 et seq.), and the Regulations, the
Borrower shall have timely applied for, shall have been
awarded and, prior to or simultaneously with the Loan
Closing, shall have closed a Trust Loan for a portion of the
Allowable Costs (as defined in such regulations) of the
Project in an amount not in excess of the amount of
Allowable Costs of the Project covered by the Loan from the
State, plus the amount of: (i) capitalized interest during
the Project construction period, if any, (ii) the cost of
funding reserve capacity for the Project, if any, as well as
that portion of the Debt Service Reserve Fund (as defined in
the Trust Loan Agreement) attributable to the cost of
funding such reserve capacity for the Project, and (iii)
certain issuance expenses related thereto, including, if
applicable, a municipal bond insurance policy premium;
(iv) the Borrower shall have on hand or otherwise
available moneys to pay for the greater of (A) that portion
of the total cost of the Project that is not eligible to be
funded from the Loan or the Trust Loan, or (B) that portion
of the total cost of the Project that exceeds the actual
amounts of the loan commitments made by the State and the
Trust, respectively, for the Loan and the Trust Loan; and
(v) no Event of Default nor any event that, with the
passage of time or service of notice or both, would
constitute an Event of Default shall have occurred and be
continuing hereunder.
SECTION 3.03. Amounts Payable. (a) The Borrower shall
repay the Loan at zero-interest in principal installments payable
to the Loan Servicer semiannually on February 1 and August 1,
commencing August 1, 2000, in accordance with the schedule set
forth in Exhibit A-2 attached hereto and made a part hereof, as
the same may be amended or modified by the State, in particular,
without limitation, to make any adjustments to the amount of the
Loan in accordance with the definition thereof; provided,
however, that the amount of any reduction in the principal amount
of the Loan pursuant to N.J.A.C. 7:22-3.26 shall be credited to
the principal payments set forth in Exhibit A-2 in inverse order
of their maturity. The obligations of the Borrower under the
Borrower Bond shall be deemed to be amounts payable under this
Section 3.03. Each payment made to the Loan Servicer pursuant to
the Borrower Bond shall be deemed to be a credit against the
corresponding obligation of the Borrower under this Section 3.03,
and any such payment made to the Loan Servicer shall fulfill the
Borrower's obligation to pay such amount hereunder and under the
Borrower Bond. Each payment made to the Loan Servicer pursuant
to this Section 3.03 shall be applied to the principal of the
Loan.
(b) In addition to the principal payments on the Loan
required by subsection (a) of this Section 3.03, the Borrower
shall pay a late charge for any such payment that is received by
the Loan Servicer later than the tenth (10th) day following its
due date in an amount equal to the greater of twelve percent
(12%) per annum or the Prime Rate plus one half of one percent
per annum on such late payment from its due date to the date
actually paid; provided, however, that such late charge payable
on the Loan shall not be in excess of the maximum interest rate
permitted by law.
(c) In addition to the Loan Repayments payable under
subsections (a) and (b) of this Section 3.03, the Borrower shall
pay one-half of the Administrative Fee, if any, to the Loan
Servicer semiannually on each February 1 and August 1, commencing
February 1, 1999 or such later date as the State authorizes,
during the term of the Loan.
SECTION 3.04. Unconditional Obligations. The obligation of
the Borrower to make the Loan Repayments and all other payments
required hereunder and the obligation to perform and observe the
other duties, covenants, obligations and agreements on its part
contained herein shall be absolute and unconditional, and shall
not be abated, rebated, set-off, reduced, abrogated, terminated,
waived, diminished, postponed or otherwise modified in any manner
or to any extent whatsoever while any Loan Repayments remain
unpaid, for any reason, regardless of any contingency, act of
God, event or cause whatsoever, including (without limitation)
any acts or circumstances that may constitute failure of
consideration, eviction or constructive eviction, the taking by
eminent domain or destruction of or damage to the Project or
Environmental Infrastructure System, commercial frustration of
the purpose, any change in the laws of the United States of
America or of the State of New Jersey or any political
subdivision of either or in the rules or regulations of any
governmental authority, any failure of the State to perform and
observe any agreement, whether express or implied, or any duty,
liability or obligation arising out of or connected with the
Project or this Loan Agreement, or any rights of set-off,
recoupment, abatement or counterclaim that the Borrower might
otherwise have against the State, the Loan Servicer or any other
party or parties; provided, however, that payments hereunder
shall not constitute a waiver of any such rights. The Borrower
shall not be obligated to make any payments required to be made
by any other Borrowers under separate Loan Agreements.
SECTION 3.05. Loan Agreement to Survive Loan. The Borrower
acknowledges that its duties, covenants, obligations and
agreements set forth in Sections 3.06(a) and (b) hereof shall
survive the payment in full of the Loan.
SECTION 3.06. Disclaimer of Warranties and
Indemnification. (a) The Borrower acknowledges and agrees that:
(i) the State does not make any warranty or representation,
either express or implied, as to the value, design, condition,
merchantability or fitness for particular purpose or fitness for
any use of the Environmental Infrastructure System or the Project
or any portions thereof or any other warranty or representation
with respect thereto; (ii) in no event shall the State or its
agents be liable or responsible for any incidental, indirect,
special or consequential damages in connection with or arising
out of this Loan Agreement or the Project or the existence,
furnishing, functioning or use of the Environmental
Infrastructure System or the Project or any item or products or
services provided for in this Loan Agreement; and (iii) during
the term of this Loan Agreement and to the fullest extent
permitted by law, the Borrower shall indemnify and hold the State
harmless against, and the Borrower shall pay any and all,
liability, loss, cost, damage, claim, judgment or expense of any
and all kinds or nature and however arising and imposed by law,
which the State may sustain, be subject to or be caused to incur
by reason of any claim, suit or action based upon personal
injury, death or damage to property, whether real, personal or
mixed, or upon or arising out of contracts entered into by the
Borrower, the Borrower's ownership of the Environmental
Infrastructure System or the Project, or the acquisition,
construction or installation of the Project.
(b) It is mutually agreed by the Borrower and the State
that the State and its commissioners, officers, agents, servants
or employees shall not be liable for, and shall be indemnified
and saved harmless by the Borrower in any event from, any action
performed under this Loan Agreement and any claim or suit of
whatsoever nature, except in the event of loss or damage
resulting from their own negligence or willful misconduct.
(c) In connection with its obligation to provide the
insurance required under Section 2.02(j) hereof: (i) the
Borrower shall include, or cause to be included, the State and
its employees and officers as additional "named insureds" on (A)
any certificate of liability insurance procured by the Borrower
(or other similar document evidencing the liability insurance
coverage procured by the Borrower) and (B) any certificate of
liability insurance procured by any contractor or subcontractor
for the Project, and from the latter of the date of the Loan
Closing or the date of the initiation of construction of the
Project until the date the Borrower receives the written
certificate of Project completion from the State, the Borrower
shall maintain said liability insurance covering the State and
said employees and officers in good standing; and (ii) the
Borrower shall include the State as an additional "named insured"
on any certificate of insurance providing against risk of direct
physical loss, damage or destruction of the Environmental
Infrastructure System, and during the Loan Term the Borrower
shall maintain said insurance covering the State in good standing.
The Borrower shall provide the State with a copy of each of
any such original, supplemental, amendatory or reissued
certificates of insurance (or other similar documents evidencing
the insurance coverage) required pursuant to this Section 3.06(c).
SECTION 3.07. Option to Prepay Loan Repayments. The
Borrower may prepay the Loan Repayments, in whole or in part,
upon not less than ninety (90) days' prior written notice to the
State; provided, however, that any such full or partial
prepayment may only be made (i) if the Borrower is not then in
arrears on its Trust Loan, (ii) if the Borrower is
contemporaneously making a full or partial prepayment of the
Trust Loan such that, after the prepayment of the Loan and the
Trust Loan, the Trust gives its consent required under Section
3.07(iii) of the Trust Loan Agreement, and (iii) upon the prior
written approval of the State. Prepayments shall be applied to
the principal payments on the portion of the Loan to be prepaid
in inverse order of their maturity.
SECTION 3.08. Priority of Loan and Trust Loan. (a) The
Borrower hereby agrees that, to the extent allowed by law,
including, without limitation, the appropriations act of the New
Jersey State Legislature authorizing the expenditure of Trust
bond proceeds to finance a portion of the Cost of the Project,
any loan repayments then due and payable on the Borrower's Trust
Loan, including, without limitation, any administrative fees and
any late payment charges then due and payable under the Trust
Loan Agreement, shall be satisfied by the Borrower before any
Loan Repayments then due and payable hereunder on the Loan shall
be satisfied by the Borrower.
(b) The Borrower hereby acknowledges that in the event the
Borrower fails or is unable to pay promptly to the Trust in full
any loan repayments on the Trust Loan, then any Loan Repayments
paid by the Borrower on the Loan under this Loan Agreement and
received by the Loan Servicer during the time of any such loan
repayment deficiency under the Trust Loan Agreement shall first
be applied by the Loan Servicer to satisfy such Trust Loan
Agreement loan repayment deficiency as a credit against the
obligations of the Borrower to make loan repayments of that
portion of interest under the Trust Loan Agreement that is
allocable to the interest payable on the Trust Bonds (as defined
in the Trust Loan Agreement) and to make payments of that portion
of interest under the bond issued by the Borrower to the Trust
that is allocable to the interest payable on the Trust Bonds,
second, to the extent available, to make loan repayments of
principal under the Trust Loan Agreement and payments of
principal on the bond issued by the Borrower to the Trust
pursuant to the Trust Loan Agreement, third, to the extent
available, to the payment of the administrative fee payable under
the Trust Loan Agreement and to make payments of that portion of
interest under the bond issued by the Borrower to the Trust that
is allocable to the administrative fee payable under the Trust
Loan Agreement, fourth, to the extent available, to the payment
of late charges payable under the Trust Loan Agreement and to
make payments of that portion of interest under the bond issued
by the Borrower to the Trust that is allocable to the late
charges payable under the Trust Loan Agreement, and, finally, to
the extent available, to make Loan Repayments on the Loan.
(c) The Borrower hereby further acknowledges that any Loan
Repayments paid by the Borrower on the Loan under this Loan
Agreement shall be applied (i) according to Section 3(c) of the
Loan Servicing and Trust Bonds Security Agreement (as defined in
the definition of Loan Servicer herein) and (ii) according to the
provisions of the Master Program Trust Agreement.
ARTICLE IV
ASSIGNMENT OF LOAN AGREEMENT AND BORROWER BOND
SECTION 4.01. Assignment and Transfer by State. The
Borrower hereby approves and consents to any assignment or
transfer of this Loan Agreement and the Borrower Bond that the
State deems to be necessary in connection with the environmental
infrastructure loan program of the State under the Regulations.
SECTION 4.02. Assignment by Borrower. Neither this Loan
Agreement nor the Borrower Bond may be assigned by the Borrower
(except to the Guarantor, which shall occur pursuant to N.J.S.A.
14A:10-5.1 or such successor provision, upon notice to the State)
for any reason, unless the following conditions shall be
satisfied: (i) the State shall have approved said assignment in
writing; (ii) the assignee shall have expressly assumed in
writing the full and faithful observance and performance of the
Borrower's duties, covenants, obligations and agreements under
this Loan Agreement and, to the extent permitted under applicable
law, the Borrower Bond; and (iii) immediately after such
assignment, the assignee shall not be in default in the
observance or performance of any duties, covenants, obligations
or agreements of the Borrower under this Loan Agreement or the
Borrower Bond.
ARTICLE V
EVENTS OF DEFAULT AND REMEDIES
SECTION 5.01. Events of Default. If any of the following
events occur, it is hereby defined as and declared to be and to
constitute an "Event of Default":
(a) failure by the Borrower to pay, or cause to be paid,
any Loan Repayment required to be paid hereunder when due, which
failure shall continue for a period of fifteen (15) days;
(b) failure by the Borrower to pay, or cause to be paid,
any late charges incurred hereunder or any portion thereof when
due or to observe and perform any duty, covenant, obligation or
agreement on its part to be observed or performed under this Loan
Agreement, other than as referred to in subsection (a) of this
Section 5.01 or other than the obligations of the Borrower
contained in Section 2.02(d)(ii) hereof and in Exhibit F hereto,
which failure shall continue for a period of thirty (30) days
after written notice, specifying such failure and requesting that
it be remedied, is given to the Borrower by the State, unless the
State shall agree in writing to an extension of such time prior
to its expiration; provided, however, that if the failure stated
in such notice is correctable but cannot be corrected within the
applicable period, the State may not unreasonably withhold its
consent to an extension of such time up to 120 days from the
delivery of the written notice referred to above if corrective
action is instituted by the Borrower within the applicable period
and diligently pursued until the Event of Default is corrected;
(c) any representation made by or on behalf of the Borrower
contained in this Loan Agreement, or in any instrument furnished
in compliance with or with reference to this Loan Agreement or
the Loan, is false or misleading in any material respect;
(d) a petition is filed by or against the Borrower under
any federal or state bankruptcy or insolvency law or other
similar law in effect on the date of this Loan Agreement or
thereafter enacted, unless in the case of any such petition filed
against the Borrower such petition shall be dismissed within
thirty (30) days after such filing and such dismissal shall be
final and not subject to appeal; or the Borrower shall become
insolvent or bankrupt or shall make an assignment for the benefit
of its creditors; or a custodian (including, without limitation,
a receiver, liquidator or trustee) of the Borrower or any of its
property shall be appointed by court order or take possession of
the Borrower or its property or assets if such order remains in
effect or such possession continues for more than thirty (30)
days;
(e) the Borrower shall generally fail to pay its debts as
such debts become due; and
(f) failure of the Borrower to observe or perform such
additional duties, covenants, obligations, agreements or
conditions as are required by the State and specified in Exhibit
F attached hereto and made a part hereof.
SECTION 5.02. Notice of Default. The Borrower shall give
the State prompt telephonic notice of the occurrence of any Event
of Default referred to in Section 5.01(d) or (e) hereof and of
the occurrence of any other event or condition that constitutes
an Event of Default at such time as any senior administrative or
financial officer of the Borrower becomes aware of the existence
thereof.
SECTION 5.03. Remedies on Default. Whenever an Event of
Default referred to in Section 5.01 hereof shall have occurred
and be continuing, the State shall have the right to take
whatever action at law or in equity may appear necessary or
desirable to collect the amounts then due and thereafter to
become due hereunder or to enforce the observance and performance
of any duty, covenant, obligation or agreement of the Borrower
hereunder.
In addition, if an Event of Default referred to in Section
5.01(a) hereof shall have occurred and be continuing, the State
shall, to the extent allowed by applicable law, have the right to
declare all Loan Repayments and all other amounts due hereunder
(including, without limitation, payments under the Borrower Bond)
to be immediately due and payable, and upon notice to the
Borrower the same shall become due and payable without further
notice or demand.
SECTION 5.04. Attorneys' Fees and Other Expenses. The
Borrower shall on demand pay to the State the reasonable fees and
expenses of attorneys and other reasonable expenses (including,
without limitation, the reasonably allocated costs of in-house
counsel and legal staff) incurred by the State in the collection
of Loan Repayments or any other sum due hereunder or in the
enforcement of the observation or performance of any other
duties, covenants, obligations or agreements of the Borrower upon
an Event of Default.
SECTION 5.05. Application of Moneys. Any moneys collected
by the State pursuant to Section 5.03 hereof shall be applied (a)
first, to pay any attorneys' fees or other fees and expenses owed
by the Borrower pursuant to Section 5.04 hereof, (b) second, to
the extent available, to pay principal due and payable on the
Loan, (c) third, to the extent available, to pay any other
amounts due and payable hereunder, and (d) fourth, to the extent
available, to pay principal on the Loan and other amounts payable
hereunder as such amounts become due and payable.
SECTION 5.06. No Remedy Exclusive; Waiver; Notice. No
remedy herein conferred upon or reserved to the State is intended
to be exclusive, and every such remedy shall be cumulative and
shall be in addition to every other remedy given under this Loan
Agreement or now or hereafter existing at law or in equity. No
delay or omission to exercise any right, remedy or power accruing
upon any Event of Default shall impair any such right, remedy or
power or shall be construed to be a waiver thereof, but any such
right, remedy or power may be exercised from time to time and as
often as may be deemed expedient. In order to entitle the State
to exercise any remedy reserved to it in this Article V, it shall
not be necessary to give any notice other than such notice as may
be required in this Article V.
SECTION 5.07. Retention of State's Rights. Notwithstanding
any assignment or transfer of this Loan Agreement pursuant to the
provisions hereof, or anything else to the contrary contained
herein, the State shall have the right upon the occurrence of an
Event of Default to take any action, including (without
limitation) bringing an action against the Borrower at law or in
equity, as the State may, in its discretion, deem necessary to
enforce the obligations of the Borrower to the State pursuant to
Section 5.03 hereof.
ARTICLE VI
MISCELLANEOUS
SECTION 6.01. Notices. All notices, certificates or other
communications hereunder shall be sufficiently given and shall be
deemed given when hand delivered or mailed by registered or
certified mail, postage prepaid, to the Borrower at the address
specified in Exhibit A-1 attached hereto and made a part hereof
and to the State and the Loan Servicer at the following addresses:
(a) State:
New Jersey Department of Environmental Protection
Municipal Finance and Construction Element
000 Xxxx Xxxxx Xxxxxx 0xx Xxxxx
Xxxxxxx, Xxx Xxxxxx 00000-0000
Attention: Assistant Director
New Jersey Department of the Treasury
Office of Public Finance
Xxxxx Xxxxxx Xxxxxx 0xx Xxxxx
Xxxxxxx, Xxx Xxxxxx 00000-0000
Attention: Director
(b) Loan Servicer:
First Union National Bank
000 Xxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attention: Corporate Trust Department
Any of the foregoing parties may designate any further or
different addresses to which subsequent notices, certificates or
other communications shall be sent by notice in writing given to
the others.
SECTION 6.02. Binding Effect. This Loan Agreement shall
inure to the benefit of and shall be binding upon the State and
the Borrower and their respective successors and assigns.
SECTION 6.03. Severability. In the event any provision of
this Loan Agreement shall be held illegal, invalid or
unenforceable by any court of competent jurisdiction, such
holding shall not invalidate, render unenforceable or otherwise
affect any other provision hereof.
SECTION 6.04. Amendments, Supplements and Modifications.
This Loan Agreement may not be amended, supplemented or modified
without the prior written consent of the State and the Borrower.
SECTION 6.05. Execution in Counterparts. This Loan
Agreement may be executed in several counterparts, each of which
shall be an original and all of which shall constitute but one
and the same instrument.
SECTION 6.06. Applicable Law and Regulations. This Loan
Agreement shall be governed by and construed in accordance with
the laws of the State of New Jersey, including the Regulations,
which Regulations are, by this reference thereto, incorporated
herein as part of this Loan Agreement.
SECTION 6.07. Consents and Approvals. Whenever the written
consent or approval of the State shall be required under the
provisions of this Loan Agreement, such consent or approval may
only be given by the State.
SECTION 6.08. Captions. The captions or headings in this
Loan Agreement are for convenience only and shall not in any way
define, limit or describe the scope or intent of any provisions
or sections of this Loan Agreement.
SECTION 6.09. Further Assurances. The Borrower shall, at
the request of the State, authorize, execute, attest, acknowledge
and deliver such further resolutions, conveyances, transfers,
assurances, financing statements and other instruments as may be
necessary or desirable for better assuring, conveying, granting,
assigning and confirming the rights, security interests and
agreements granted or intended to be granted by this Loan
Agreement and the Borrower Bond.
[Signature Page]
IN WITNESS WHEREOF, the State and the Borrower have caused
this Loan Agreement to be executed, sealed and delivered as of
the date first above written.
THE STATE OF NEW JERSEY,
ACTING BY AND THROUGH THE
NEW JERSEY DEPARTMENT OF
ENVIRONMENTAL PROTECTION
[SEAL]
By:________________________
ATTEST: Xxxxxx X. Xxxxx, Xx.
Commissioner,
Department of
Environmental Protection
_____________________________
Xxxxxxxx X. Xxxxxx, P.E., P.P.
Assistant Director,
Municipal Finance and Construction Element,
Department of Environmental Protection
[SEAL] THE MOUNT XXXXX WATER
COMPANY
ATTEST:
By:________________________
Authorized Officer
_____________________________
Authorized Officer
Approval of New Jersey State
Treasurer
By:________________________
Xxxxx X. XxXxxxxxxxx,
Xx.
New Jersey State
Treasurer
A-1-1
EXHIBIT A-1
Description of Project and Environmental Infrastructure System
X-0-0
XXXXXXX X-0
Description of Loan
B-1
EXHIBIT B
Basis for Determination of Allowable Project Costs
C-1
EXHIBIT C
Estimated Disbursement Schedule
D-31
EXHIBIT D
Specimen Borrower Bond
(To be supplied by Borrower's
bond counsel in substantially the following form)
IMPORTANT NOTE: The next two pages set forth the form of
the Borrower Bond prepared by the Trust's Bond Counsel for
municipal/county Borrowers. Although the Trust recognizes that
each corporate Borrower has its own bond form as required
pursuant to its Borrower Bond Resolution, please incorporate in
the bond form the pertinent information from this
municipal/county bond form (e.g., include the concept of
principal amount or lesser amount under Section 3.01, reference
to payments to the Loan Servicer, disbursement process,
unconditional nature, prepayment, security and date).
SEE IMPORTANT NOTE ON PRIOR PAGE
FOR VALUE RECEIVED, The Mount Xxxxx Water Company, a
corporation duly created and validly existing under the
Constitution and laws of the State of New Jersey (the
"Borrower"), hereby promises to pay to the order of the State of
New Jersey (the "State") the principal amount of Five Million
Eight Hundred Ninety-Four Thousand Nine Hundred Nine Dollars
($5,894,909), or such lesser amount as shall be determined in
accordance with Section 3.01 of the Loan Agreement (as
hereinafter defined), at the times and in the amounts determined
as provided in the Loan Agreement, plus any other amounts due and
owing under the Loan Agreement at the times and in the amounts as
provided therein. The Borrower irrevocably pledges its full
faith and credit for the punctual payment of the principal of,
and all other amounts due under, this Borrower Bond and the Loan
Agreement according to their respective terms.
This Borrower Bond is issued pursuant to the Loan Agreement
dated as of November 1, 1998 by and between the State, acting by
and through the New Jersey Department of Environmental
Protection, and the Borrower (the "Loan Agreement"), and is
issued in consideration of the loan made thereunder (the "Loan")
and to evidence the payment obligations of the Borrower set forth
in Section 3.03(a) thereof. Payments under this Borrower Bond
shall, except as otherwise provided in the Loan Agreement, be
made directly to the Loan Servicer (as defined in the Loan
Agreement) for the account of the State. This Borrower Bond is
subject to assignment or endorsement in accordance with the terms
of the Loan Agreement. All of the terms, conditions and
provisions of the Loan Agreement are, by this reference thereto,
incorporated herein as part of this Borrower Bond.
Pursuant to the Loan Agreement, disbursements shall be made
by the State to the Borrower upon receipt by the State of
requisitions from the Borrower executed and delivered in
accordance with the requirements set forth in Section 3.02 of the
Loan Agreement.
This Borrower Bond is entitled to the benefits and is
subject to the conditions of the Loan Agreement. The obligations
of the Borrower to make the payments required hereunder shall be
absolute and unconditional, without any defense or right of
set-off, counterclaim or recoupment by reason of any default by
the State under the Loan Agreement or under any other agreement
between the Borrower and the State or out of any indebtedness or
liability at any time owing to the Borrower by the State or for
any other reason.
This Borrower Bond is subject to optional prepayment under
the terms and conditions, and in the amounts, provided in Section
3.07 of the Loan Agreement. To the extent allowed by applicable
law, this Borrower Bond may be subject to acceleration under the
terms and conditions, and in the amounts, provided in Section
5.03 of the Loan Agreement.
To the extent provided by law, this Borrower Bond is junior
and subordinate in all respects to any bonds of the Borrower
issued on even date herewith to the New Jersey Environmental
Infrastructure Trust as to lien on, and source and security for
payment from, the revenues of the Borrower.
IN WITNESS WHEREOF, the Borrower has caused this Borrower
Bond to be duly executed, sealed and delivered as of this 15th
day of October, 1998.
THE MOUNT XXXXX WATER
COMPANY
[SEAL]
By:_______________________
ATTEST: _____________
_______________________
By:_______________________
_______________ _____________
E-35
EXHIBIT E
Opinions of Borrower's Bond and General Counsels
See Closing Item No. 11.04
[LETTERHEAD OF COUNSEL TO BORROWER]
November 5, 0000
Xxxxx xx Xxx Xxxxxx
Department of Environmental Protection
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Ladies and Gentlemen:
I have acted as counsel to The Mount Xxxxx Water Company, a
corporation duly organized and validly existing under the laws of
the State of New Jersey (the "Borrower"), which has entered into
a Loan Agreement (as hereinafter defined) with the State of New
Jersey, acting by and through the New Jersey Department of
Environmental Protection (the "State"), and have acted as such in
connection with the authorization, execution, attestation and
delivery by the Borrower of its Loan Agreement and Borrower Bond
(as hereinafter defined) pursuant to the New Jersey Business
Corporation Act, P.L. 1968, c. 263, as amended (the "Business
Corporation Law"), and resolutions of the Board of Directors of
the Borrower adopted on ________, 1998 (the "Resolutions"). All
capitalized terms used but not defined herein shall have the
meanings ascribed to such terms in the Loan Agreement.
In so acting, I have examined the Constitution and laws of
the State of New Jersey, including, without limitation, the
Business Corporation Law, and the certificate of incorporation
and by-laws of the Borrower. I have also examined originals, or
copies certified or otherwise identified to my satisfaction, of
the following:
(a) the Loan Agreement dated as of November 1, 1998 (the
"Loan Agreement") by and between the State and the Borrower;
(b) the Resolutions and the proceedings of the Board of
Directors of the Borrower relating to the undertaking and
completion of the Project;
(c) the Borrower Bond dated as of October 15, 1998 (the
"Borrower Bond") issued by the Borrower to the State to evidence
the Loan; and
(d) the proceedings of the Board of Directors of the
Borrower, including, without limitation, the Resolutions,
relating to the authorization of the Borrower Bond and the sale,
execution, attestation and delivery thereof to the State (the
Loan Agreement and the Borrower Bond are referred to herein
collectively as the "Loan Documents").
I have also examined and relied upon originals, or copies
certified or otherwise authenticated to my satisfaction, of such
other records, documents, certificates and other instruments, and
have made such investigation of law as in my judgment I have
deemed necessary or appropriate, to enable me to render the
opinions expressed below.
I am of the opinion that:
1. The Borrower is a corporation duly created and validly
existing under and pursuant to the Constitution and statutes of
the State of New Jersey, including the Business Corporation Law,
with the legal right to carry on the business of its
Environmental Infrastructure System as currently being conducted
and as proposed to be conducted.
2. The Borrower has full legal right and authority to
execute, attest and deliver the Loan Documents, to sell the
Borrower Bond to the State, to observe and perform its duties,
covenants, obligations and agreements under the Loan Documents
and to undertake and complete the Project.
3. The acting officers of the Borrower who are
contemporaneously herewith performing or have previously
performed any action contemplated in the Loan Agreement are, and
at the time any such action was performed were, the duly
appointed or elected officers of the Borrower empowered by
applicable New Jersey law and authorized by resolution of the
Borrower to perform such actions.
4. The proceedings of the Borrower's Board of Directors
(i) approving the Loan Documents, (ii) authorizing their
execution, attestation and delivery on behalf of the Borrower,
(iii) with respect to the Borrower Bond only, authorizing its
sale by the Borrower to the State, (iv) authorizing the Borrower
to consummate the transactions contemplated by the Loan
Documents, (v) authorizing the Borrower to undertake and complete
the Project, and (vi) authorizing the execution and delivery of
all other certificates, agreements, documents and instruments in
connection with the execution, attestation and delivery of the
Loan Documents, have each been duly and lawfully adopted and
authorized in accordance with applicable law, including, without
limitation, the Business Corporation Law.
5. The Loan Documents have been duly authorized, executed,
attested and delivered by the Authorized Officers of the Borrower
and the Borrower Bond has been duly sold by the Borrower to the
State; and assuming in the case of the Loan Agreement that the
State has the requisite power and authority to authorize,
execute, attest and deliver, and has duly authorized, executed,
attested and delivered, the Loan Agreement, the Loan Documents
constitute the legal, valid and binding obligations of the
Borrower, enforceable against the Borrower in accordance with
their respective terms, subject, however, to the effect of, and
to restrictions and limitations imposed by or resulting from,
bankruptcy, insolvency, moratorium, reorganization or other
similar laws affecting creditors' rights generally. No opinion
is rendered as to the availability of any particular remedy.
6. The authorization, execution, attestation and delivery
of the Loan Documents by the Borrower and, in the case of the
Borrower Bond only, the sale thereof to the State, the
observation and performance by the Borrower of its duties,
covenants, obligations and agreements thereunder, the
consummation of the transactions contemplated therein, and the
undertaking and completion of the Project do not and will not (i)
other than the lien, charge or encumbrance created by the Loan
Documents and by any other outstanding debt obligations of the
Borrower that are at parity with the Borrower Bond as to lien on,
and source and security for payment thereon from, the revenues of
the Borrower, result in the creation or imposition of any lien,
charge or encumbrance upon any properties or assets of the
Borrower pursuant to, (ii) result in any breach of any of the
terms, conditions or provisions of, or (iii) constitute a default
under, any outstanding debt or lease obligation, trust agreement,
indenture, mortgage, deed of trust, loan agreement or other
instrument to which the Borrower is a party or by which the
Borrower, its Environmental Infrastructure System or any of its
properties or assets may be bound, nor will such action result in
any violation of the provisions of the charter or other document
pursuant to which the Borrower was established or any laws,
ordinances, injunctions, judgments, decrees, rules, regulations
or existing orders of any court or governmental or administrative
agency, authority or person to which the Borrower, its
Environmental Infrastructure System or its properties or
operations is subject.
7. All approvals, consents or authorizations of, or
registrations of or filings with, any governmental or public
agency, authority or person required to date on the part of the
Borrower in connection with the authorization, execution,
attestation, delivery and performance of the Loan Documents, the
sale of the Borrower Bond and the undertaking and completion of
the Project have been obtained or made.
8. There is no litigation or other proceeding pending or,
to my knowledge, after due inquiry, threatened in any court or
other tribunal of competent jurisdiction (either State or
federal) (i) questioning the creation, organization or existence
of the Borrower, (ii) questioning the validity, legality or
enforceability of the Resolutions, the Loan or the Loan
Documents, (iii) questioning the undertaking or completion of the
Project, (iv) otherwise challenging the Borrower's ability to
consummate the transactions contemplated by the Loan or the Loan
Documents, or (v) that, if adversely decided, would have a
materially adverse impact on the financial condition of the
Borrower.
9. Other than its bond dated as of October 15, 1998 issued
to the New Jersey Environmental Infrastructure Trust, the
Borrower has no bonds, notes or other debt obligations
outstanding that are superior or senior to the Borrower Bond as
to lien on, and source and security for payment thereof from, the
revenues of the Borrower.
I hereby authorize XxXxxxxx & English, LLP, acting as bond
counsel to the State in connection with the Loan, and the
Attorney General of the State of New Jersey, acting as general
counsel to the State in connection with the Loan, to rely on this
opinion as if I had addressed this opinion to them in addition to
you.
Very truly yours,
F-39
EXHIBIT F
Additional Covenants and Requirements
Guaranty of Loan:
The repayment of the Loan will be guaranteed by the
Guarantor pursuant to the terms and conditions as set forth in
that certain Guaranty made and delivered as of November 1, 1998
by the Guarantor, a copy of which is attached hereto.
G-40
EXHIBIT G
General Administrative Requirements for the
State Environmental Infrastructure Financing Program
