1
COMMITTED LINE OF CREDIT NOTE
$10,000,000 , 2000
------------------
FOR VALUE RECEIVED, NEW JERSEY RESOURCES CORPORATION (the "BORROWER"), with an
address at 0000 Xxxxxxx Xxxx, Xxxx, Xxx Xxxxxx 00000, promises to pay to the
order of PNC BANK, NATIONAL ASSOCIATION (the "BANK"), in lawful money of the
United States of America in immediately available funds at its offices located
at Xxx XXX Xxxxx, 000 Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000, or at such
other location as the Bank may designate from time to time, the principal sum of
TEN MILLION DOLLARS ($10,000,000) (the "FACILITY") or such lesser amount as may
be advanced to or for the benefit of the Borrower hereunder, together with
interest accruing on the outstanding principal balance from the date hereof, all
as provided below:
1. ADVANCES. The Borrower may request advances, repay and request
additional advances hereunder until the Expiration Date, subject to the terms
and conditions of this Note and the Loan Documents (as hereinafter defined). The
"EXPIRATION DATE" shall mean January 31, 2001, or such later date as may be
designated by the Bank by written notice from the Bank to the Borrower. The
Borrower acknowledges and agrees that in no event will the Bank be under any
obligation to extend or renew the Facility or this Note beyond the Expiration
Date. The Borrower may request advances hereunder upon giving oral or written
notice to the Bank by 11:00 a.m. (Pittsburgh, Pennsylvania time) (a) on the day
of the proposed advance, in the case of advances to bear interest under the Base
Rate Option (as hereinafter defined) or the As Offered Rate Option (as
hereinafter defined) and (b) three (3) Business Days prior to the proposed
advance, in the case of advances to bear interest under the Libor-Rate Option
(as hereinafter defined), followed promptly thereafter by the Borrower's written
confirmation to the Bank of any oral notice. The aggregate unpaid principal
amount of advances under this Note shall not exceed the face amount of this
Note.
2. RATE OF INTEREST. Each advance outstanding under this Note will bear
interest at a rate or rates per annum as may be selected by the Borrower from
the interest rate options set forth below (each, an "OPTION"):
(i) BASE RATE OPTION. A rate of interest per annum which is at all
times equal to the Prime Rate ("BASE RATE"). For purposes hereof, the term
"PRIME RATE" shall mean the rate publicly announced by the Bank from time to
time as its prime rate. The Prime Rate is determined from time to time by the
Bank as a means of pricing some loans to its borrowers. The Prime Rate is not
tied to any external rate of interest or index, and does not necessarily reflect
the lowest rate of interest actually charged by the Bank to any particular class
or category of customers. If and when the Prime Rate changes, the rate of
interest with respect to any advance to which the Base Rate Option applies will
change automatically without notice to the Borrower, effective on the date of
any such change. There are no required minimum interest periods for advances
bearing interest under the Base Rate Option.
(ii) LIBOR-RATE OPTION. A rate per annum equal to the sum of (A)
the Libor-Rate plus (B) fifty (50) basis points (.5%), for the applicable
Libor-Rate Interest Period.
(iii) AS OFFERED RATE OPTION. A rate of interest per annum, as
offered from time to time by the Bank to the Borrower in its sole discretion, as
the rate at which the Bank would advance funds to the Borrower (the "AS OFFERED
RATE") for the interest period requested (the
2
"AS OFFERED RATE INTEREST PERIOD") in the principal amount requested, which rate
shall not be greater than the Prime Rate (unless the Bank's cost from time to
time of borrowing funds from the Federal Reserve System exceeds the Prime Rate,
in which case the As Offered Rate will equal one-half of one percent above such
cost of funds).
For purposes hereof, the following terms shall have the following meanings:
"BUSINESS DAY" shall mean any day other than a Saturday or Sunday or a
legal holiday on which commercial banks are authorized or required to
be closed for business in Pittsburgh, Pennsylvania.
"LIBOR-RATE" shall mean, with respect to any advance to which the
Libor-Rate Option applies for the applicable Libor-Rate Interest
Period, the interest rate per annum determined by the Bank by dividing
(the resulting quotient rounded upwards, if necessary, to the nearest
1/100th of 1%) (i) the rate of interest determined by the Bank in
accordance with its usual procedures (which determination shall be
conclusive absent manifest error) to be the eurodollar rate two (2)
Business Days prior to the first day of such Libor-Rate Interest Period
for an amount comparable to such advance and having a borrowing date
and a maturity comparable to such Libor-Rate Interest Period by (ii) a
number equal to 1.00 minus the Libor-Rate Reserve Percentage.
"LIBOR-RATE INTEREST PERIOD" shall mean the period of one (1), two (2),
or three (3) months selected by the Borrower commencing on the date of
disbursement of an advance (or the date of conversion of an advance to
the Libor-Rate Option, as the case may be) and each successive period
selected by the Borrower thereafter; provided, that if a Libor-Rate
Interest Period would end on a day which is not a Business Day, it
shall end on the next succeeding Business Day, unless such day falls in
the succeeding calendar month in which case the Libor-Rate Interest
Period shall end on the next preceding Business Day. In no event shall
any Libor-Rate Interest Period end on a day after the Expiration Date.
"LIBOR-RATE RESERVE PERCENTAGE" shall mean the maximum effective
percentage in effect on such day as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for
determining the reserve requirements (including, without limitation,
supplemental, marginal and emergency reserve requirements) with respect
to eurocurrency funding (currently referred to as "Eurocurrency
liabilities").
The Libor-Rate shall be adjusted with respect to any advance to which the
Libor-Rate Option applies on and as of the effective date of any change in the
Libor-Rate Reserve Percentage. The Bank shall give prompt notice to the Borrower
of the Libor-Rate as determined or adjusted in accordance herewith, which
determination shall be conclusive absent manifest error.
If the Bank determines (which determination shall be final and conclusive) that,
by reason of circumstances affecting the eurodollar market generally, deposits
in dollars (in the applicable amounts) are not being offered to banks in the
eurodollar market for the selected term, or adequate means do not exist for
ascertaining the Libor-Rate, then the Bank shall give notice thereof to the
Borrower. Thereafter, until the Bank notifies the Borrower that the
circumstances giving rise to such suspension no longer exist, (a) the
availability of the Libor-Rate Option shall be suspended, and (b) the interest
rate for all advances then bearing interest under the Libor-Rate Option shall be
converted at the expiration of the then current Libor-Rate Interest Period(s) to
the Base Rate Option.
-2-
3
In addition, if, after the date of this Note, the Bank shall determine (which
determination shall be final and conclusive) that any enactment, promulgation or
adoption of or any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by a governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Bank with any guideline, request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency shall make it unlawful or impossible for the
Bank to make or maintain or fund loans under the Libor-Rate Option, the Bank
shall notify the Borrower. Upon receipt of such notice, until the Bank notifies
the Borrower that the circumstances giving rise to such determination no longer
apply, (a) the availability of the Libor-Rate Option shall be suspended, and (b)
the interest rate on all advances then bearing interest under the Libor-Rate
Option shall be converted to the Base Rate Option either (i) on the last day of
the then current Libor-Rate Interest Period(s) if the Bank may lawfully continue
to maintain advances under the Libor-Rate Option to such day, or (ii)
immediately if the Bank may not lawfully continue to maintain advances under the
Libor-Rate Option.
The foregoing notwithstanding, it is understood that the Borrower may select
different Options to apply simultaneously to different portions of the advances
and may select up to five (5) different interest periods to apply simultaneously
to different portions of the advances bearing interest under the Libor-Rate
Option or As Offered Rate Option. Interest hereunder will be calculated on the
basis of a year of 360 days for the actual number of days elapsed. In no event
will the rate of interest hereunder exceed the maximum rate allowed by law.
3. INTEREST RATE ELECTION. Subject to the terms and conditions of this
Note, at the end of each interest period applicable to any advance, the Borrower
may renew the Option applicable to such advance or convert such advance to a
different Option; provided that, during any period in which any Event of Default
(as hereinafter defined) has occurred and is continuing, any advances bearing
interest under the Libor-Rate Option shall, at the Bank's sole discretion, be
converted at the end of the applicable Libor-Rate Interest Period to the Base
Rate Option and the Libor-Rate Option will not be available to Borrower with
respect to any new advances until such Event of Default has been cured by the
Borrower or waived by the Bank. The Borrower shall notify the Bank of each
election of an Option, each conversion from one Option to another, the amount of
the advances then outstanding to be allocated to each Option and where relevant
the interest periods therefor. In the case of converting to the Libor-Rate
Option, such notice shall be given at least three (3) Business Days prior to the
commencement of any Libor-Rate Interest Period. If no notice of conversion or
renewal is timely received by the Bank, the Borrower shall be deemed to have
converted such advance to the Base Rate Option. Any such election shall be
promptly confirmed in writing by such method as the Bank may require. The amount
of advances made, converted or renewed bearing interest at the Libor-Rate Option
for each Libor-Rate Interest Period shall be in integral multiples of $100,000
and not less than $1,000,000.
4. ADVANCE PROCEDURES. A request for advance made by telephone must be
promptly confirmed in writing by such method as the Bank may require. The
Borrower authorizes the Bank to accept telephonic requests for advances, and the
Bank shall be entitled to rely upon the authority of any person providing such
instructions. The Borrower hereby indemnifies and holds the Bank harmless from
and against any and all damages, losses, liabilities, costs and expenses
(including reasonable attorneys' fees and expenses) which may arise or be
created by the acceptance of such telephone requests or making such advances.
The Bank will enter on its books and records, which entry when made will be
presumed correct, the date and amount of
-3-
4
each advance, the interest rate and interest period applicable thereto, as well
as the date and amount of each payment.
5. PAYMENT TERMS. The Borrower shall pay accrued interest on the unpaid
principal balance of this Note in arrears: (a) for the portion of advances
bearing interest under the Base Rate Option, on the first day of each month
during the term hereof, (b) for the portion of advances bearing interest under
the Libor-Rate Option, on the last day of the respective Libor-Rate Interest
Period for such advance, (c) for the portion of advances bearing interest under
the As Offered Rate Option, on the last day of each As Offered Rate Interest
Period, (d) if any Libor-Rate Interest Period or As Offered Rate Interest Period
is longer than three (3) months, then also on the three (3) month anniversary of
such interest period and every three (3) months thereafter, and (e) for all
advances, at maturity, whether by acceleration of this Note or otherwise, and
after maturity, on demand until paid in full. All outstanding principal and
accrued interest hereunder shall be due and payable in full on the Expiration
Date.
If any payment under this Note shall become due on a Saturday, Sunday or public
holiday under the laws of the State where the Bank's office indicated above is
located, such payment shall be made on the next succeeding business day and such
extension of time shall be included in computing interest in connection with
such payment. The Borrower hereby authorizes the Bank to charge the Borrower's
deposit account at the Bank for any payment when due hereunder. Payments
received will be applied to charges, fees and expenses (including attorneys'
fees), accrued interest and principal in any order the Bank may choose, in its
sole discretion.
6. LATE PAYMENTS; DEFAULT RATE. If the Borrower fails to make any payment
of principal, interest or other amount coming due pursuant to the provisions of
this Note by the fifth (5th) Business Day after the date on which such payments
are due and payable, the Borrower also shall pay to the Bank a late charge equal
to five percent (5%) of the amount of such payment (the "LATE CHARGE"). Such
five (5) day period shall not be construed in any way to extend the due date of
any such payment. Upon maturity, whether by acceleration, demand or otherwise,
and at the Bank's option upon the occurrence of any Event of Default (as
hereinafter defined) and during the continuance thereof, this Note shall bear
interest at a rate per annum (based on a year of 360 days and actual days
elapsed) which shall be two percentage points (2%) in excess of the interest
rate in effect from time to time under this Note but not more than the maximum
rate allowed by law (the "DEFAULT RATE"). The Default Rate shall continue to
apply whether or not judgment shall be entered on this Note. Both the Late
Charge and the Default Rate are imposed as liquidated damages for the purposes
of defraying the Bank's expenses incident to the handling of delinquent
payments, but are in addition to, and not in lieu of, the Bank's exercise of any
rights and remedies hereunder, under the other Loan Documents or under
applicable law, and any fees and expenses of any agents or attorneys which the
Bank may employ. In addition, the Default Rate reflects the increased credit
risk to the Bank of carrying a loan that is in default. The Borrower agrees that
the Late Charge and Default Rate are reasonable forecasts of just compensation
for anticipated and actual harm incurred by the Bank, and that the actual harm
incurred by the Bank cannot be estimated with certainty and without difficulty.
7. PREPAYMENT. The Borrower shall have the right to prepay at any time and
from time to time, in whole or in part, without penalty, any advance hereunder
which is accruing interest under the Base Rate Option or the As Offered Rate
Option with an interest period of 7 days or less. If the Borrower prepays
(whether voluntary, on default or otherwise) all or any part of any advance
which is accruing interest under the Libor-Rate Option or under the As Offered
Rate Option with an interest period in excess of 7 days on other than the last
day of the applicable
-4-
5
Libor-Rate Interest Period or As Offered Rate Interest Period, as the case may
be, the Borrower shall pay to the Bank, on demand therefor, all amounts due
pursuant to paragraph 8 below, including the Cost of Prepayment, if any.
8. YIELD PROTECTION. The Borrower shall pay to the Bank, on written demand
therefor, together with the written evidence of the justification therefor, all
direct costs incurred, losses suffered or payments made by Bank by reason of any
change in law or regulation or its interpretation imposing any reserve, deposit,
allocation of capital, or similar requirement (including without limitation,
Regulation D of the Board of Governors of the Federal Reserve System) on the
Bank, its holding company or any of their respective assets. In addition, the
Borrower agrees to indemnify the Bank against any liabilities, losses or
expenses (including loss of margin, any loss or expense sustained or incurred in
liquidating or employing deposits from third parties, and any loss or expense
incurred in connection with funds acquired to effect, fund or maintain any
advance (or any part thereof) bearing interest under the Libor-Rate Option or
the As Offered Rate Option with an interest period in excess of 7 days) which
the Bank sustains or incurs as a consequence of either (i) the Borrower's
failure to make a payment on the due date thereof, (ii) the Borrower's
revocation (expressly, by later inconsistent notices or otherwise) in whole or
in part of any notice given to Bank to request, convert, renew or prepay any
advance, or (iii) the Borrower's payment, prepayment or conversion of any
advance bearing interest under the Libor-Rate Option or under the As Offered
Rate Option with an interest period in excess of 7 days on a day other than the
last day of the applicable Libor-Rate Interest Period or As Offered Rate
Interest Period, as the case may be, including but not limited to the Cost of
Prepayment. "COST OF PREPAYMENT" means an amount equal to the present value, if
positive, of the product of (a) the difference between (i) the yield, on the
beginning date of the applicable interest period, of a U.S. Treasury obligation
with a maturity similar to the applicable interest period minus (ii) the yield,
on the prepayment date, of a U.S. Treasury obligation with a maturity similar to
the remaining maturity of the applicable interest period, and (b) the principal
amount to be prepaid, and (c) the number of years, including fractional years
from the prepayment date to the end of the applicable interest period. The yield
on any U.S. Treasury obligation shall be determined by reference to Federal
Reserve Statistical Release H.15(519) "Selected Interest Rates". For purposes of
making present value calculations, the yield to maturity of a similar maturity
U.S. Treasury obligation on the prepayment date shall be deemed the discount
rate. The Cost of Prepayment shall also apply to any payments made after
acceleration of the maturity of this Note. The Bank's determination of an amount
payable under this paragraph shall, in the absence of manifest error, be
conclusive and shall be payable on demand.
9. OTHER LOAN DOCUMENTS. This Note is issued in connection with a letter
agreement or loan agreement between the Borrower and the Bank dated on or before
the date hereof, and the other agreements and documents executed in connection
therewith or referred to therein, the terms of which are incorporated herein by
reference (as amended, modified or renewed from time to time, collectively the
"LOAN DOCUMENTS"), and is secured by the property described in the Loan
Documents (if any) and by such other collateral as previously may have been or
may in the future be granted to the Bank to secure this Note.
10. EVENTS OF DEFAULT. The occurrence of any of the following events will
be deemed to be an "EVENT OF DEFAULT" under this Note: (i) the nonpayment of any
principal, interest or other indebtedness under this Note when due; (ii) the
occurrence of any event of default or default and the lapse of any notice or
cure period under any Loan Document or any other debt, liability or obligation
to the Bank of the Borrower; (iii) the filing by or against the Borrower of any
proceeding in bankruptcy, receivership, insolvency, reorganization, liquidation,
conservatorship or similar proceeding (and, in the case of any such proceeding
instituted against the Borrower,
-5-
6
such proceeding is not dismissed or stayed within 30 days of the commencement
thereof, provided that the Bank shall not be obligated to advance additional
funds during such period); (iv) any assignment by the Borrower for the benefit
of creditors, or any levy, garnishment, attachment or similar proceeding is
instituted against any property of the Borrower held by or deposited with the
Bank; (v) a default with respect to any other indebtedness of the Borrower for
borrowed money, if the effect of such default is to cause or permit the
acceleration of such debt; (vi) the commencement of any foreclosure or
forfeiture proceeding, execution or attachment against any collateral securing
the obligations of the Borrower to the Bank; (vii) the entry of a nonappealable
final judgment against the Borrower reasonably likely to have a material adverse
effect on the Borrower's ability to perform its obligations to the Bank
hereunder or otherwise, and the failure of the Borrower to discharge the
judgment within ten days of the entry thereof; (viii) any material adverse
change in the Borrower's business, assets, operations, financial condition or
results of operations; (ix) the Borrower ceases doing business as a going
concern; (x) any representation or warranty made by the Borrower to the Bank in
any Loan Document, or any other documents now or in the future evidencing or
securing the obligations of the Borrower to the Bank, is false, erroneous or
misleading in any material respect; or (xi) the Borrower's failure to observe or
perform any covenant or other agreement with the Bank contained in any Loan
Document or any other documents now or in the future evidencing or securing the
obligations of the Borrower to the Bank.
Upon the occurrence of an Event of Default: (a) the Bank shall be under no
further obligation to make advances hereunder; (b) if an Event of Default
specified in clause (iii) or (iv) above shall occur, the outstanding principal
balance and accrued interest hereunder together with any additional amounts
payable hereunder shall be immediately due and payable without demand or notice
of any kind; (c) if any other Event of Default shall occur, the outstanding
principal balance and accrued interest hereunder together with any additional
amounts payable hereunder, at the Bank's option and without demand or notice of
any kind, may be accelerated and become immediately due and payable; (d) at the
Bank's option, this Note will bear interest at the Default Rate from the date of
the occurrence of the Event of Default; and (e) the Bank may exercise from time
to time any of the rights and remedies available under the Loan Documents or
under applicable law.
11. RIGHT OF SETOFF. In addition to all liens upon and rights of setoff
against the Borrower's money, securities or other property given to the Bank by
law, the Bank shall have, with respect to the Borrower's obligations to the Bank
under this Note and to the extent permitted by law, a contractual possessory
security interest in and a contractual right of setoff against, and the Borrower
hereby assigns, conveys, delivers, pledges and transfers to the Bank all of the
Borrower's right, title and interest in and to, all of the Borrower's deposits,
moneys, securities and other property now or hereafter in the possession of or
on deposit with, or in transit to, the Bank or any other direct or indirect
subsidiary of PNC Bank Corp., whether held in a general or special account or
deposit, whether held jointly with someone else, or whether held for safekeeping
or otherwise, excluding, however, all IRA, Xxxxx, and trust accounts. Every such
security interest and right of setoff may be exercised without demand upon or
notice to the Borrower. Every such right of setoff shall be deemed to have been
exercised immediately upon the occurrence of an Event of Default hereunder
without any action of the Bank, although the Bank may enter such setoff on its
books and records at a later time.
12. MISCELLANEOUS. All notices, demands, requests, consents, approvals and
other communications required or permitted hereunder must be in writing (except
as may be agreed otherwise above with respect to borrowing requests) and will be
effective upon receipt. Such notices and other communications may be
hand-delivered, sent by facsimile transmission with
-6-
7
confirmation of delivery and a copy sent by first-class mail, or sent by
nationally recognized overnight courier service, to the addresses for the Bank
and the Borrower set forth above or to such other address as either may give to
the other in writing for such purpose. No delay or omission on the Bank's part
to exercise any right or power arising hereunder will impair any such right or
power or be considered a waiver of any such right or power, nor will the Bank's
action or inaction impair any such right or power. No modification, amendment or
waiver of any provision of this Note nor consent to any departure by the
Borrower therefrom will be effective unless made in a writing signed by the
Bank. The Borrower agrees to pay on demand, to the extent permitted by law, all
costs and expenses incurred by the Bank in the enforcement of its rights in this
Note and in any security therefor, including without limitation reasonable fees
and expenses of the Bank's counsel. If any provision of this Note is found to be
invalid by a court, all the other provisions of this Note will remain in full
force and effect. The Borrower and all other makers and indorsers of this Note
hereby forever waive presentment, protest, notice of dishonor and notice of
non-payment. The Borrower also waives all defenses based on suretyship or
impairment of collateral. If this Note is executed by more than one Borrower,
the obligations of such persons or entities hereunder will be joint and several.
This Note shall bind the Borrower and its heirs, executors, administrators,
successors and assigns, and the benefits hereof shall inure to the benefit of
the Bank and its successors and assigns; provided, however, that the Borrower
may not assign this Note in whole or in part without the Bank's written consent
and the Bank at any time may assign this Note in whole or in part.
This Note has been delivered to and accepted by the Bank and will be deemed to
be made in the State where the Bank's office indicated above is located. THIS
NOTE WILL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE BANK AND THE
BORROWER DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE WHERE THE BANK'S
OFFICE INDICATED ABOVE IS LOCATED, EXCLUDING ITS CONFLICT OF LAWS RULES. The
Borrower hereby irrevocably consents to the exclusive jurisdiction of any state
or federal court in the county or judicial district where the Bank's office
indicated above is located; provided that nothing contained in this Note will
prevent the Bank from bringing any action, enforcing any award or judgment or
exercising any rights against the Borrower individually, against any security or
against any property of the Borrower within any other county, state or other
foreign or domestic jurisdiction. The Borrower acknowledges and agrees that the
venue provided above is the most convenient forum for both the Bank and the
Borrower. The Borrower waives any objection to venue and any objection based on
a more convenient forum in any action instituted under this Note.
13. WAIVER OF JURY TRIAL. THE BORROWER IRREVOCABLY WAIVES ANY AND ALL RIGHTS THE
BORROWER MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM OF ANY
NATURE RELATING TO THIS NOTE, ANY DOCUMENTS EXECUTED IN CONNECTION WITH THIS
NOTE OR ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH DOCUMENTS. THE BORROWER
ACKNOWLEDGES THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.
THE BORROWER ACKNOWLEDGES THAT IT HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE WAIVER OF JURY TRIAL, AND HAS BEEN ADVISED BY COUNSEL
AS NECESSARY OR APPROPRIATE.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-7-
8
WITNESS the due execution of this Committed Line of Credit Note as a document
under seal, as of the date first written above, with the intent to be legally
bound hereby.
WITNESS / ATTEST: NEW JERSEY RESOURCES
CORPORATION
By: (SEAL)
----------------------------------- --------------------------
Name: Name:
------------------------------ ------------------------------
Title: Title:
----------------------------- -----------------------------
-8-
