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NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY
AND
XXXX HAULING and WAREHOUSING SYSTEM, INC.
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SERIES G LOAN AGREEMENT
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Dated as of January 2, 1992
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The interest of the NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY (the
"Issuer") in this Loan Agreement has been assigned (except for certain rights
expressly reserved by the Issuer) pursuant to the Indenture of Trust dated as of
the date hereof from the Issuer to MELLON BANK, N.A., as trustee (the
"Trustee"), and is subject to the security interest of the Trustee thereunder.
LOAN AGREEMENT
TABLE OF CONTENTS
(This Table of Contents is only for convenience of reference and is not
intended to define, limit or describe the scope or intent of any provisions of
this Loan Agreement.)
Page
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PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
PREAMBLES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I
DEFINITIONS
Section 1.1. Definitions . . . . . ... . . . . . . . . . . . . . . . . . . .I-1
Section 1.2. Interpretation and Construction . . . . . . . . . . . . . . . I-12
ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES
Section 2.1. Representations and Covenants of the Issuer . . . . . . . . . II-1
Section 2.2. Representations and Warranties of the Company . . . . . . . . II-1
Section 2.3. Tax-Exempt Status of the Bonds . . . . . . . . . . . . . . . .II-6
Section 2.4. Covenants of the Company . . . . . . . . . . . . . . . . . . .II-8
ARTICLE III
ISSUANCE OF THE SERIES G BONDS
Section 3.1. Agreement to Issue the Series G Bonds:
Application of Series G Bond Proceeds . . . . . . . . . . . .III-1
Section 3.2. Disbursements from the Project Fund . . . . . . . . . . . . .III-1
Section 3.3. Furnishing Documents to the Trustee . . . . . . . . . . . . .III-1
Section 3.4. Special Arbitrage Certifications. . . . . . . . . . . . . . .III-1
ARTICLE IV
LOAN PROVISIONS
Section 4.1. Loan of Proceeds . . . . . . . . . . . . . . . . . . . . . . .IV-1
Section 4.2. Amounts Payable . . . . . . . . . . . . . . . . . . . . . . . IV-1
Section 4.3. Obligations of Company Unconditional. . . . . . . . . . . . . IV-2
-i-
ARTICLE V
THE PROJECT
Section 5.1. Disbursements from the Project Fund . . . . . . . . . . . . . .V-1
Section 5.2. Maintenance and Modification of the Project
Facility by the Company . . . . . . . . . . . . . . . . . . . .V-2
Section 5.3. Taxes, Other Governmental Charges and Utility
Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . .V-3
Section 5.4. Insurance Required. . . . . . . . . . . . . . . . . . . . . . .V-4
Section 5.5. Additional Provisions Concerning Insurance. . . . . . . . . . .V-4
Section 5.6. Worker's Compensation . . . . . . . . . . . . . . . . . . . . .V-5
ARTICLE VI
DAMAGE, DESTRUCTION AND CONDEMNATION
Section 6.1. Damage, Destruction and Condemnation . . . . . . . . . . . . .VI-1
Section 6.2. Application of Net Proceeds. . . . . . . . . . . . . . . . . .VI-1
Section 6.3. Insufficiency of Net Proceeds. . . . . . . . . . . . . . . . .VI-2
ARTICLE VII
SPECIAL COVENANTS
Section 7.1. No Warranty of Condition or Suitability by
Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . .VII-1
Section 7.2. Access to the Project . . . . . . . . . . . . . . . . . . . .VII-1
Section 7.3. Further Assurances and Corrective Instruments . . . . . . . .VII-1
Section 7.4. Issuer and Company Representatives. . . . . . . . . . . . . .VII-1
Section 7.5. Financing Statements. . . . . . . . . . . . . . . . . . . . .VII-1
Section 7.6. Compliance with Code. . . . . . . . . . . . . . . . . . . . .VII-2
Section 7.7. Further Assurances. . . . . . . . . . . . . . . . . . . . . .VII-2
Section 7.8. (Intentionally Omitted] . . . . . . . . . . . . . . . . . . .VII-2
Section 7.9. Annual Certificate. . . . . . . . . . . . . . . . . . . . . .VII-2
ARTICLE VIII
PROJECT USERS; MAINTAIN EXISTENCE; MERGE, SELL, TRANSFER;
INDEMNIFICATION; REDEMPTION
Section 8.1. Project Users; Maintain Existence; Merge,
Sell, Transfer . . . . . . . . . . . . . . . . . . . . . . VIII-1
Section 8.2. Release and Indemnification Covenants . . . . . . . . . . . VIII-2
Section 8.3. Redemption of Bonds . . . . . . . . . . . . . . . . . . . . VIII-3
Section 8.4. Issuer to Grant Security Interest to Trustee . . . . . . . VIII-3
Section 8.5. Indemnification of Trustee . . . . . . . . . . . . . . . . VIII-3
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ARTICLE IX
DEFAULTS AND REMEDIES
Section 9.1. Defaults Defined . . . . . . . . . . . . . . . . . . . . . . .IX-1
Section 9.2. Trustee's Remedies on Default . . . . . . . . . . . . . . . . IX-3
Section 9.3. Issuer's Remedies on Default. . . . . . . . . . . . . . . . . IX-3
Section 9.4. Specific Performance. . . . . . . . . . . . . . . . . . . . . IX-5
Section 9.5. No Remedy Exclusive . . . . . . . . . . . . . . . . . . . . . IX-5
Section 9.6. Agreement to Pay Attorneys' Fees and Expenses . . . . . . . . IX-5
Section 9.7. No Additional Waiver Implied by One Waiver. . . . . . . . . . IX-6
ARTICLE X
OPTIONS TO TERMINATE AGREEMENT
ARTICLE XI
MISCELLANEOUS
Section 11.1. Term of Agreement . . . . . . . . . . . . . . . . . . . . . XI-1
Section 11.2. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . XI-1
Section 11.3. Binding Effect. . . . . . . . . . . . . . . . . . . . . . . XI-1
Section 11.4. Severability. . . . . . . . . . . . . . . . . . . . . . . . XI-1
Section 11.5. Amounts Remaining in Funds. . . . . . . . . . . . . . . . . XI-1
Section 11.6. Amendments, Changes and Modification. . . . . . . . . . . . XI-2
Section 11.7. Execution in Counterparts . . . . . . . . . . . . . . . . . XI-2
Section 11.8. Applicable Law. . . . . . . . . . . . . . . . . . . . . . . XI-2
Section 11.9. Captions. . . . . . . . . . . . . . . . . . . . . . . . . . XI-2
-iii-
EXHIBIT A - Project Facility
EXHIBIT B - Form of Requisition
EXHIBIT C - Permitted Encumbrances
EXHIBIT D - Form of Annual Certificate
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THIS LOAN AGREEMENT is dated as of January 2, 1992, between the NEW
JERSEY ECONOMIC DEVELOPMENT AUTHORITY (the "Issuer"), a public body corporate
and politic constituting an instrumentality of the State of New Jersey and XXXX
HAULING AND WAREHOUSING SYSTEM, INC., a corporation duly organized and validly
existing under the laws of the Commonwealth of Pennsylvania (the "Company").
W I T N E S S E T H:
WHEREAS, the New Jersey Economic Development Authority Act, as amended
and supplemented, N.J.S.A. ss.34:1B-1, et seq. (the "Act"), declares that the
Legislature has determined that Department of Labor and Industry statistics of
recent years indicate a continuing decline in manufacturing employment within
the State which is a contributing factor to the drastic unemployment existing
within the State, which far exceeds the national average, thus adversely
affecting the economy of the State and the prosperity, safety, health and
general welfare of its inhabitants and their standard of living; and that the
availability of financial assistance and suitable facilities are important
inducements to new and varied employment promoting enterprises to locate in the
State, and to existing enterprises to remain and expand in the State; and
WHEREAS, the Issuer was created to aid in remedying the aforesaid
conditions and to implement the purposes of the Act, and the Legislature has
determined that the authority and powers conferred upon the Issuer under the Act
and the expenditure of moneys pursuant thereto constitute a serving of a valid
public purpose and that the enactment of the provisions set forth in the Act is
in the public interest and for the public benefit and good and has been so
declared to be as a matter of express legislative determination; and
WHEREAS, the Issuer, to accomplish the purposes of the Act, is
empowered (i) to extend credit or make loans to any person for the planning,
designing, acquiring, constructing, reconstructing, improving, equipping and
furnishing of a project, which credit or loans may be secured by loan and
security agreements, mortgages, leases, and any other instruments, upon such
terms and conditions as the Issuer shall deem reasonable; (ii) to require the
inclusion in any mortgage, lease, contract, loan and security agreement or other
instruments of such provisions for the construction, use, operation and
maintenance and financing of a project as the Issuer may deem necessary or
desirable; and (iii) to enter into contracts with respect to the planning,
designing, financing, constructing, reconstructing, improving, equipping,
furnishing, operating and maintaining of a project, for such consideration and
upon such terms and conditions as the Issuer may determine to be reasonable; and
WHEREAS, as an inducement to the Company to undertake a certain project
consisting of the acquisition and filling of approximately 18.6 acres of
tidewater property (including the cost of off-site mitigation required by
environmental permits), the renovation of an existing building of approximately
36,500 square feet into a refrigerated warehouse and certain additional building
renovations, the performance of certain site improvements, including the
renovation of a collapsed pier, the construction of two marginal piers and
certain paving, grading and filling costs, and the purchase and installation of
machinery and equipment, including container cranes, bulldozers, forklift trucks
and other peripheral equipment for use in the loading and unloading of
ocean-going vessels, all part of a public port facility and property
functionally related and subordinate thereto (the "Project"), said Project to be
located in the City of Gloucester City, County of Camden, New Jersey, the
Issuer, in furtherance of the purposes of the Act, made certain findings and
determinations and preliminarily approved the application of the Company for the
financing of the Project by resolution duly adopted on May 24, 1983 and by
further resolution duly adopted on August 7, 1984 authorized the issuance of its
Variable/Fixed Rate Economic Development Bonds (Xxxx Hauling and Warehousing
System, Inc. - 1983 Project) in the principal amount of $13,500,000 (the "Series
A Bonds") for the purpose of providing funds for the making of a loan to the
Company to finance a portion of the Project and to enable the Company to refund
certain outstanding bonds; and
WHEREAS, in furtherance of the purposes of the Act, the Issuer
heretofore issued the Series A Bonds for the Company in the City of Gloucester
City, Camden County, New Jersey on August 24, 1984, and loaned the proceeds from
the sale thereof to the Company pursuant to a Loan Agreement dated as of August
1, 1984 between the Issuer and the Company; and
WHEREAS as a further inducement to the Company to undertake certain
additional costs in connection with the Project and in furtherance of the
purposes of the Act, the Issuer by resolution duly adopted on September 4, 1985
authorized the issuance of its Variable/Fixed Rate Economic Development Bonds
(Xxxx Hauling and Warehousing System, Inc. - 1983 Project) in the aggregate
principal amount of $17,500,000, consisting of its Series B Variable/Fixed Rate
Economic Development Bonds (Xxxx Hauling and Warehousing System, Inc. - 1983
Project) in the principal amount of $7,500,000 (the "Series B Bonds") and its
Series C Variable/Fixed Rate Economic Development Bonds (Xxxx Hauling and
Warehousing System, Inc. - 1983 Project) in the principal amount of $10,000,000
(the "Series C Bonds"), all for the purpose of providing funds for the
making of loans to the Company to finance a portion of the Project; and
WHEREAS, in furtherance of the purposes of the Act, the Issuer
heretofore issued the Series B Bonds for the Company in the City Of Gloucester
City, Camden County, New Jersey, on December 6, 1985, and loaned the proceeds
from the sale thereof to the Company
pursuant to a loan agreement dated as of November 1, 1985 between the Issuer and
the Company; and
WHEREAS, in furtherance of the purposes of the Act, the Issuer
heretofore issued the Series C Bonds for the Company in the City of Gloucester
City, Camden County, New Jersey, on December 30, 1985, and loaned the proceeds
from the sale thereof to the Company pursuant to a loan agreement dated as of
December 1, 1985 between the Issuer and the Company; and
WHEREAS, the Company requested an additional loan from the Issuer to
refund the Series C Bonds and, as an inducement to the Company to refund the
Series C Bonds, the Issuer duly adopted an amended final resolution on January
8, 1986 authorizing the issuance of its Economic Development Bonds (Xxxx Hauling
and Warehousing System, Inc. - 1983 Project) 11.85% 1986 Series in the aggregate
principal amount of $10,000,000 (the "1986 Series Bonds") and providing for the
securing of the payment of said 1986 Series Bonds by a pledge of moneys to be
received by the Issuer and the assignment of certain rights of the, Issuer with
respect to the Project, which pledge and assignment further secured the payment
of the principal of and interest on the 1986 Series Bonds; and
WHEREAS, the Issuer issued the 1986 Series Bonds on February 25, 1986
and applied the proceeds of the 1986 Series Bonds to make a loan to the Company
to refund the Series C Bonds in accordance with a certain loan agreement between
the Issuer and the Company and a certain indenture of trust between the Issuer
and Bankers Trust Company, as trustee, both dated as of February 1, 1986,
providing, in part, for payments by the Company to the Issuer sufficient to meet
installments of interest and principal on the 1986 Series Bonds; and
WHEREAS, the Company requested an additional loan from the Issuer to
refund the Series A Bonds and the Series B Bonds, and, as an inducement to the
Company to refund the Series A Bonds and the Series B Bonds, the Issuer duly
adopted an amended final resolution on July 1, 1986 authorizing the issuance of
its Series D Senior Mortgage Economic Development Bonds (Xxxx Hauling and
Warehousing System, Inc. - 1983 Project) in an aggregate principal amount Of
$18,750,000 (the "Series D Bonds") and providing for the securing of the payment
of said Series D Bonds by a pledge of moneys to be received by the Issuer and
the assignment of certain rights of the Issuer with respect to the Project,
which pledge and assignment further secured the payment of the principal of and
interest on the Series D Bonds; and
WHEREAS, the Issuer issued the Series D Bonds on September 18, 1986 and
applied the proceeds of the Series D Bonds to make a loan to the Company to
refund the Series A Bonds and the Series B Bonds in accordance with a certain
loan agreement between the Issuer and the Company and a certain indenture of
trust between the Issuer and Bankers Trust Company, as trustee, both dated as of
August 1, 1986, providing, in part, for payments by the Company to
the Issuer sufficient to meet installments of interest and principal on the
Series D Bonds; and
WHEREAS, the Company requested an additional loan from the Issuer to
finance certain additional costs in connection with the Project and as a further
inducement to the Company to undertake such costs and in furtherance of the
purposes of the Act, the Issuer duly adopted an amended final resolution on
December 2, 1986 authorizing the issuance of its Series E Senior Mortgage
Economic Development Bonds (Xxxx Hauling and Warehousing System, Inc. - 1983
Project) in an aggregate amount not to exceed $8,500,000 (the "Series E Bonds")
and secured the payment of said Series E Bonds by a pledge of moneys to be
received by the Issuer and the assignment of certain rights of the Issuer with
respect to the Project, which pledge and assignment further secured the payment
of the principal of and interest on the Series E Bonds; and
WHEREAS, the Issuer issued the Series E Bonds on December 30, 1986 and
applied the proceeds of the Series E Bonds to make a loan to the Company for the
financing of a portion of the costs of the Project, all in accordance with a
certain loan agreement between the Issuer and the Company and a certain
indenture of trust between the Issuer and Bankers Trust Company, as trustee,
both dated as of December 1, 1986, providing, in part, for payments by the
Company to the Issuer sufficient to meet installments of interest and principal
on the Series E Bonds; and
WHEREAS, the Company thereafter amended the Application, revising
certain aspects thereof to reflect cost overruns incurred with respect to the
Project and requested that the Issuer reconfirm its approval of the project
described in the Application; and
WHEREAS, the Company requested a further loan from the Issuer to
finance certain additional costs in connection with the Project and as a further
inducement to the Company to undertake such additional costs and in furtherance
of the purposes of the Act, the Issuer duly adopted an amended final resolution
on August 4, 1987 (the "August Resolution") authorizing the issuance of its
Series F Economic Development Bonds (Xxxx Hauling and Warehousing System, Inc. -
1983 Project) in an aggregate principal amount not to exceed $9,000,000 (the
"Series F Bonds") and providing for the securing of the payment of said Series F
Bonds by a pledge of moneys to be received by the Issuer and the assignment of
certain rights of the Issuer with respect to the Project, which pledge and
assignment further secured the payment of the principal of and interest on the
Series F Bonds; and
WHEREAS, the Issuer was thereafter requested and agreed to amend the
form of bonds approved in the August Resolution and to substitute Fidelity Bank,
National Association as trustee in the place of Bankers Trust Company, New York,
New York, and duly adopted an amended final resolution on December 1, 1987
authorizing the amended form of Series F Bonds and the substitution of trustee,
and otherwise ratifying and confirming the August Resolution; and
WHEREAS, the Issuer issued its Variable/Fixed Rate Economic Development
Bonds (Xxxx Hauling and Warehousing System, Inc. - 1983 Project), Series F, in
the aggregate principal amount of $9,000,000 on December 24, 1987 and applied
the proceeds of the Series F Bonds to make a loan to the Company for the
financing of a portion of the costs of the Project, all in accordance with a
certain loan agreement between the Issuer and the Company and a certain
indenture of trust between the Issuer and Fidelity Bank, National Association,
as trustee, both dated as of December 1, 1987, providing, in part, for payments
by the Company to the Issuer sufficient to meet installments of interest and
principal on the Series F Bonds; and
WHEREAS, the Company has requested an additional loan from the Issuer
to refund the 1986 Series Bonds and the Series F Bonds; and
WHEREAS, the Issuer proposes to issue its Economic Development Bonds
(Xxxx Hauling and Warehousing System, Inc. - 1983 Project) Series G Refunding
(Non-AMT) in the aggregate principal amount of $10,000,000 (the "Bonds") and
proposes to apply the proceeds of the Bonds to make a loan to the Company (the
"Loan") to refund the 1986 Series Bonds, all pursuant to the Act and the Bond
Resolution (as hereinafter defined); and
WHEREAS, the Issuer proposes to issue its Economic Development Bonds
(Xxxx Hauling and Warehousing System, Inc. - 1983 Project) Series H Refunding
(AMT) (the "Series H Bonds") and proposes to apply the proceeds of the Series H
Bonds to make a loan to the Company (the "Series H Loan" and, together with the
Loan, the "Loans") to refund the Series F Bonds, all pursuant to the Act and the
Bond Resolution (as hereinafter defined); and
WHEREAS, the Loan shall be secured by the pledge of payments to be made
by the Company hereunder and by a mortgage lien on the Project Facility, and
shall be guaranteed by X.X. Xxxxxxxx & Co., Inc., Refrigerated Distribution
Center, Inc., Oregon Avenue Enterprises, Incorporated, Xxxx Cargo Systems, Inc.,
The Riverfront Development Corp., CRT, Inc. and any other person required to be
a Guarantor (collectively, the "Guarantor") pursuant to the Guaranty (as such
term is hereinafter defined); and
WHEREAS, the Company and the Issuer each have full right and lawful
authority to enter into this Series G Loan Agreement (hereinafter referred to as
the "Agreement"), and to perform and observe the provisions hereof on their
respective parts to be performed and observed.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, the parties hereto covenant, agree and bind
themselves as follows; provided, that any obligation of the Issuer created by or
arising out of this Agreement shall never constitute a debt or a pledge of the
faith and credit or the taxing power of the Issuer or any political
subdivision or taxing district of the State of New Jersey but shall be payable
solely out of the Trust Estate (as defined in the Indenture), anything herein
contained to the contrary by implication or otherwise notwithstanding:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. All capitalized, undefined terms used herein
shall have the same meanings as used in Article I of the hereinafter defined
Indenture. In addition, the following words and phrases shall have the following
meanings:
"Act" means The New Jersey Economic Development Authority Act, as
amended, N.J.S.A. ss.34:1B-1, et seq. or any successor legislation, and any
regulations and administrative pronouncements promulgated thereunder.
"Affiliate" means X.X. Xxxxxxxx & Co., Inc., Refrigerated Distribution
Center, Inc., Oregon Avenue Enterprises, Incorporated, Xxxx Cargo Systems, Inc.,
CRT, Inc., The Riverfront Development Corp., and any other Person under the
control of or in common control or ownership (direct or indirect) of or with the
Company or any Subsidiary or Affiliate of the Company. For the purposes of this
definition and the definition of Related Party below, "control" shall mean
ownership or control (direct or indirect) of five percent or more of the voting
stock of the Person for which such determination is to be made or the exercise
of management control over the business and affairs of such Person.
"Agreement" or "Loan Agreement" means this Series G Loan Agreement as
the same may be amended, modified or supplemented from time to time in
accordance with its terms.
"Application" means the application for financial assistance of the
Company dated April 25, 1983, submitted to the Authority, including any
amendments thereto as are on file at the Authority's offices.
"Assignment" means the Series G Assignment dated the Closing Date by
and between the Issuer, as assignor, and the Trustee, as assignee, assigning,
subject to such reservations as are contained therein, all of the Issuer's
right, title and interest in and to this Agreement and the other Loan Documents,
as the same may be amended, modified or supplemented from time to time.
"Bond" or "Bonds" or "Series G Bond" or "Series G Bonds" means one or
more of the Economic Development Bonds (Xxxx Hauling and Warehousing System,
Inc. - 1983 Project), Series G Refunding (Non-AMT) of the Issuer in the
aggregate principal amount of $10,000,000 authorized to be issued pursuant to
the Bond Resolution, delivered under and pursuant to the Bond Resolution and
Indenture and any bonds issued in lieu of or in substitution therefor.
I-1
"Bond Counsel" with respect to the issuance and delivery of the Bonds
means Xxxxx & Xxxxxx, A Professional Corporation, having its office at 0 Xxxxxx
Xxxx Xxxx, Xxxxxxxx, Xxx Xxxxxx 00000, and subsequent thereto, such firm or any
other nationally recognized bond counsel reasonably satisfactory to the Issuer
and the Trustee.
"Bond Fund" means the fund so designated which is established and
created pursuant to Section 5.01 of the Indenture.
"Bond Purchase Agreement" means the bond purchase agreement dated as of
January 2, 1992 by and between the Issuer, the Company, the Purchaser and
Fidelity Spartan New Jersey Municipal High Yield Fund, as purchaser of the
Series H Bonds, relating to the issuance and sale of the Bonds and the Series H
Bonds, as the same may be amended, modified or supplemented from time to time.
"Bond Resolution" means the resolution of the Issuer adopted on
January 7, 1992 and entitled "Amended Final Resolution" (Xxxx Hauling and
Warehousing System, Inc. - 1983 Project) authorizing the issuance and sale of
the Bonds and the execution and delivery of this Agreement, the Indenture, the
Bond Purchase Agreement, the Assignment, the other Loan Documents and the
Series H Loan Documents and determining other matters in connection with the
Project.
"Bond Year" means the one year period beginning on the day after
expiration of the preceding Bond Year. The first Bond Year begins on the Date
of Issuance and ends on December 31, 1992.
"Business Day" means a day on which the Trustee and banks located in
Pittsburgh are open for the purpose of conducting a commercial banking business.
"Cancellation Date" means the effective date of the Issuer's notice of
cancellation of the Bonds given pursuant to Section 9.3 hereof.
"Cash Flow" of a Person shall mean Net Income of such Person plus
depreciation and other non-cash charges to income plus (or minus) any increase
(or decrease) in deferred taxes.
"Chief Financial Officer" shall mean Xxxxxxx Xxxxxx, the Vice President
and Treasurer of the Company, or such other individual functioning in a
substantially similar capacity on behalf of the Company as the Company shall
designate in a notice to the Trustee from time to time.
"Closing Date" means January 28, 1992 or such other date which shall be
the date of the execution and delivery of this Loan Agreement and the making of
the Loan.
I-2
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor legislation, and the regulations promulgated thereunder.
"Collateral" means all of the rights and assets of the Company or any
other Person in which the Issuer or the Trustee is now or hereafter granted a
lien or security interest in order to secure the performance of the Company's
obligations under this Loan Agreement, or any of the Loan Documents, the
obligations of the Issuer hereunder or under the Bonds or the obligations of any
Guarantor under the Guaranty.
"Combined Cash Flow", "Combined Interest Charges", "Combined Net
Income" and "Combined Net Income Before Interest and Taxes" for any period shall
mean, respectively, the Cash Flow Interest Charges Net Income and Net Income
Before Interest Taxes of the Company, its Subsidiaries and Affiliates for such
period, combined in accordance with generally accepted accounting principles
consistently applied.
"Combined Indebtedness" means (i) the Combined Total Assets less (ii)
the total combined stockholders' equity of the Company and its Subsidiaries and
Affiliates plus deferred taxes, each determined in accordance with generally
accepted accounting principles consistently applied, as such combination is
effective in accordance with generally accepted accounting principles
consistently applied as at any date on which the amount thereof shall be
determined.
"Combined Tangible Net Worth" means (i) total combined shareholders'
equity in the Company, its Subsidiaries and Affiliates, determined in accordance
with generally accepted accounting principles consistently applied, as such
combination is effected in accordance with generally accepted accounting
principles consistently applied, less (ii) the aggregate net amount of the
following items to the extent, if any, that they were included in consolidated
assets or deducted from consolidated liabilities in computing shareholders'
equity:
(a) All licenses, patents, copyrights, tradenames, trademarks,
franchises, good will, experimental or organizational expense, unamortized debt
discount and expense, treasury stock and all other assets which under generally
accepted accounting principles are deemed intangible; and
(b) Any write-up of assets (other than current assets written up in
accordance with generally accepted accounting principles consistently applied)
made after January 1, 1984.
"Combined Total Assets" means the assets of the Company, its
Subsidiaries and Affiliates, combined in accordance with generally accepted
accounting principles consistently applied.
I-3
"Company Representative" means the person or persons at the time
designated to act on behalf of the Company by written certificate furnished to
the Issuer and the Trustee containing the signature of such person or persons
and signed on behalf of the Company by its President or any Vice President. Such
certificate may designate an alternate or alternates.
"Cost" with respect to the Project shall be deemed to include all items
permitted to be financed under the provisions of the Act, including, but not
limited to:
(i) all costs which the Issuer or the Company shall be
required to pay under the terms of any contract or contracts for the
acquisition, construction, improving, or equipping of the Project;
(ii) obligations of the Company incurred for labor and
materials (including obligations payable to the Company) in connection
with the acquisition, construction, improving or equipping of the
Project, including reimbursement to the Company for all advances and
payments made in connection with the Project prior to or after delivery
of the Bonds;
(iii) the cost of performance or other bonds and any and all
types of insurance that may be necessary or appropriate to have in
effect during the course of construction of the Project;
(iv) the cost of refunding the 1986 Series Bonds;
(v) all costs of engineering and architectural services,
including the costs of the Company for test borings, surveys,
estimates, plans and specifications and preliminary investigations
therefor, and for supervising construction, as well as for the
performance of all other duties required by or consequent to the proper
construction of the Project;
(vi) all expenses incurred in connection with the issuance of
the Bonds, including but not limited to, compensation, fees and
expenses of the Issuer and the Trustee including reasonable counsel
fees, compensation to any financial consultant, underwriters or
placement agents, legal fees and expenses, costs of printing and
engraving, and recording and filing fees and costs of title insurance,
if any; and
(vii) any sums required to reimburse the Company for advances
made by the Company for any of the above items or for any other costs
incurred which are properly chargeable to the Project.
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"Cumulative Combined Net Income" for any specified periods means the sum
of Combined Net Income for each of such periods (subtracting Combined Net Income
for any period in which it is negative, as appropriate).
"Date of Issue" or "Issue Date" means the date of issue of the Bonds as
such term is defined in Treasury Regulation ss.1.103-13(b)(6), being the Closing
Date.
"Debt Service" means, for any Bond Year, the scheduled amount of interest
and amortization of principal payable for that Bond Year with respect to the
Bonds; provided, however, that in determining Debt Service for any Bond Year,
there shall not be taken into account amounts scheduled with respect to any
Bonds (or portion thereof) that have been retired before the beginning of the
Bond Year. The determination of Debt Service on the Bonds shall be made on the
first day of each Bond Year in the manner provided in Section 148(d) of the Code
and the regulations promulgated thereunder.
"Default" means any Default under this Agreement as specified in and
defined by Section 9.1 hereof.
"Distribution Fund" shall have the meaning set forth in Section 2.4(f)
hereof.
"ERISA" means the federal Employee Retirement Income Security Act of 1974,
as amended, and the rules and regulations thereunder.
"Event of Cancellation" means any Event of Cancellation as defined in
Section 9.3(A) hereof.
"Excess Amount" means, as of any payment date, the amount in the Bond Fund
on such date in excess of the amount required for the payment of principal,
accrued interest and premium, if any, on the Bonds due on such date.
"Fiscal Year" means January 1 through December 31.
"Gross Proceeds" means:
(a) Original proceeds (as defined in Section 1.148-8T(d)(3) of the
Temporary Income Tax Regulations promulgated under Section 148 of the Code);
(b) Investment proceeds (as defined in Section 1.148-8T(d)(5) of the
Temporary Income Tax Regulations promulgated under Section 148 of the Code);
I-5
(c) Transferred proceeds (as defined in Section 1.148-81(d)(5) of the
Temporary Income Tax Regulations promulgated under Section 148 of the Code);
(d) Amounts treated as proceeds of the issue under Section 1.103-13 (g) of
the Income Tax Regulations promulgated under Section 103(c) of the 1954 Code
(relating to invested sinking funds);
(e) Amounts invested in a reasonably required reserve or replacement fund
(as defined in Section 148(d) of the Code);
(f) Securities or obligations pledged, directly or indirectly, as security
for payment of debt service on the Bonds by the Issuer, a governmental unit of
which the Issuer is a part, the Company, a person or entity that is related to
the Company, or any other substantial beneficiary of the proceeds of the Bonds;
(g) Amounts received with respect to acquired purpose obligations as
defined in Section 1.148-8T (e) (10) of the Temporary Income Tax Regulations
promulgated under Section 148 of the Code;
(h) Other amounts used to pay debt service on the Bonds; and
(i) Other amounts received as a result of investing the amounts described
above with respect to the Bonds.
"Guarantor" means any of X.X. Xxxxxxxx & Co., Inc., Refrigerated
Distribution Center, Inc., Oregon Avenue Enterprises, Incorporated, Xxxx Cargo
Systems, Inc., The Riverfront Development Corp., and CRT, Inc., and any other
Person required to be a guarantor under the Guaranty.
"Guaranty" means the Series G Guaranty Agreement dated as of January 2,
1992 among the Guarantors, the Purchaser and the Trustee, and any amendments or
supplements thereto.
"Indebtedness" means, for any Person, (i) all indebtedness of such Person
for borrowed money or for the deferred purchase price of property, (ii) all
direct or indirect guaranties of such Person in respect of and all obligations
or undertakings (contingent or otherwise) of such Person to purchase or
otherwise acquire, or otherwise to assure a creditor against loss in respect of,
indebtedness of any other Person for borrowed money or for the deferred purchase
price of property and (iii) all other obligations, contingent or otherwise,
which in accordance with generally accepted accounting principles consistently
applied shall be classified upon the obligor's balance sheet as liabilities,
including liabilities secured by any lien on any property owned or acquired by
the obligor or a Subsidiary thereof, whether or not the liabilities secured
thereby shall have been assumed, capitalized
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leases and all guaranties, endorsements and other contingent obligations. For
purposes of determining the amount of Indebtedness of a Person, the total amount
of Indebtedness of another Person as to which such Person is obligated described
in clause (ii) or (iii) above, or the total possible payments which such Person
may become obligated to make in respect of a contingent liability, shall be
considered Indebtedness of such Person.
"Indemnified Party" shall have the meaning set forth in Section 8.2(b).
"Indenture" means the Series G Indenture of Trust dated as of January 2,
1992 between the Issuer and the Trustee, pursuant to which the Bonds are
authorized to be issued, and any amendments and supplements thereto.
"Initial Temporary Period" means the period described in Treasury
Regulation ss.1.103-14(b)(1).
"Issuer" means the New Jersey Economic Development Authority, a public body
corporate and politic constituting an instrumentality of the State, exercising
governmental functions and any body, board, authority, agency or political
subdivision or other instrumentality of the State which shall hereafter succeed
to the powers, duties and functions thereof.
"Issuer Representative" means such person or persons at the time designated
by the Issuer to act on its behalf.
"Liens" means any mortgages, pledges, liens or other charges or
encumbrances of any kind (including the charge upon property purchased under
conditional sale or other title retention agreements) upon, or any security
interest in, any property, real or personal, tangible or intangible.
"Loan" means the Series G loan in the aggregate principal amount of
$10,000,000 made by the Issuer, as lender, from the proceeds of the sale of the
Series G Bonds, to the Company, as borrower, to provide funds for the refunding
of the 1986 Series Bonds the proceeds of which were used to provide funds for
the refunding of the Series C Bonds, the proceeds of the Series C Bonds having
been used to finance a portion of Costs of the Project, all in accordance with
the terms of this Agreement.
"Loan Documents" means any or all of this Agreement, the Indenture, the
Bond Purchase Agreement, the Mortgage, the Guaranty, the Assignment and all
documents, certificates and instruments executed in connection therewith.
"Moody's" means Xxxxx'x Investors Service, Inc.
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"Mortgage" means the Series G Mortgage and Security Agreement dated as of
January 2, 1992 from the Company to the Trustee under which the Company grants
to the Trustee a mortgage lien on and a security interest in the Project
Facility to secure payment of the Company's obligations contained in Section
4.2(a) hereof, and any amendments and supplements thereto.
"Net Proceeds," when used with respect to any insurance proceeds or any
condemnation award, means the amount remaining after deducting all expenses
(including attorneys' fees and disbursements) incurred in the collection of such
proceeds or award from the gross proceeds thereof.
"1954 Code" means the Internal Revenue Code of 1954, as in effect on the
day prior to the effective date of the Code.
"1986 Series Bonds" means one or more of the Economic Development Bonds
(Xxxx Hauling and Warehousing System, Inc. - 1983 Project), 11.85% 1986 Series
of the Issuer in the aggregate principal amount of $10,000,000 which were issued
on February 25, 1986, and are being refunded with the proceeds of the Series G
Bonds.
"Nonpurpose Obligation" means any evidence of indebtedness that represents
a "nonpurpose investment" within the meaning of Section 1.148-8T(e)(9) of the
Temporary Income Tax Regulations promulgated under Section 148 of the Code.
"Owner" means the person or persons in whose name or names a Bond shall be
registered on the books of the Issuer kept for that purpose in accordance with
the provisions of the Indenture.
"Permitted Encumbrances" means, as of any particular time, (i) those items
shown in Exhibit C hereto, and (ii) any Indebtedness secured by a Lien on the
Project Facility hereafter incurred by the Company or any of its Subsidiaries
and Affiliates in accordance with the provisions of this Agreement.
"Person" or "Persons" means any one or more individuals, corporations,
partnerships, joint ventures, trusts, unincorporated organizations, governmental
agencies or political subdivisions.
"Plans" shall have the meaning set forth in Section 2.2(h) hereof.
"Prime Rate" means a fluctuating interest rate per annum equal to the rate
published in the Wall Street Journal from time to time as the prime lending
rate; any change in the Prime Rate shall be effective on the date such change is
published in the Wall Street Journal.
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"Private Activity Bond" means a private activity bond as defined in Section
141 of the Code.
"Project" means the acquisition and filling of approximately 18.6 acres of
tidewater property (including the cost of off-site mitigation required by
environmental permits), the renovation of an existing building of approximately
36,500 square feet into a refrigerated warehouse and certain additional building
renovations, the performance of certain site improvements, including the
renovation of a collapsed pier, the construction of two marginal piers and
certain paving, grading and filling costs, and the purchase and installation of
machinery and equipment, including container cranes, bulldozers, forklift trucks
and other peripheral equipment for use in the loading and unloading of ocean-
going vessels, all part of a public port facility and property functionally
related and subordinate thereto, all to be located in the Project Municipality.
"Project Facility" means the marine terminal complex, consisting of land
and improvements existing or to be constructed thereon, and all fixtures and
other personalty affixed thereto, which is or will be owned by the Company and
located in the Project Municipality, the location of which is more fully
described in Exhibit A annexed hereto, including any additions, substitutions
and replacements which have been or will be acquired and constructed thereon.
"Project Fund" means the fund so designated which is established and
created pursuant to Section 5.05 of the Indenture.
"Project Municipality" means the City of Gloucester City, County of Camden,
New Jersey.
"Purchaser" means, with respect to the Series G Bonds, Fidelity Aggressive
Tax Free Portfolio and Fidelity Spartan Municipal Income Portfolio, and, with
respect to the Series H Bonds, Fidelity Spartan New Jersey Municipal High Yield
Fund, and their respective successors and assigns.
"Rebate Fund" means the fund so designated which is established pursuant to
Section 5.12 of the Indenture.
"Rebate Requirement" shall have the meaning set forth in Section 5.12(b) of
the Indenture.
"Related Party" means the Company, any Subsidiary or Affiliate, any Person
controlling the Company or Affiliate and any director or employee of the
Company, any Subsidiary, or any Affiliate.
"Related Person" means a related person within the meaning of Section
103(b)(6)(C) of the 1954 Code.
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"Requisition" means a written request for a disbursement from the Project
Fund or the separate trust fund described in Section 6.2 hereof, as the case may
be, signed by a Company Representative, substantially in the form attached
hereto as Exhibit B and satisfactorily completed as contemplated by said form.
"Restricted Payment" means:
(i) The declaration of any dividend on, or the incurrence of any
liability to make any other payment or distribution in respect of, any
shares of the Company, its Subsidiaries or Affiliates (other than one
payable solely in its common shares);
(ii) Any payment or distribution on an account of the purchase,
redemption or other retirement of any shares of the Company, its
Subsidiaries or Affiliates or of any warrant, option or other right to
acquire such shares, or any other payment or distribution made in respect
thereof, either directly or indirectly, except any payment or distribution
on account of (A) the principal of and prepayment charge, if any, on
convertible debt, or (B) the purchase, redemption or other retirement of
shares of the Company, its Subsidiaries or Affiliates in exchange for, or
out of the net cash proceeds received by the Company, its Subsidiaries or
Affiliates from a substantially concurrent sale of, other shares of the
Company, its Subsidiaries or Affiliates; and
(iii) Any payment or distribution on account of the principal and
prepayment charge, if any, with respect to subordinated debt of the
Company, its Subsidiaries or Affiliates other than mandatory sinking fund
or other retirement payments required by the terms thereof, and other than
any working capital line of credit secured by a mortgage.
The amount of Restricted Payment in property shall be deemed to be the
greater of its fair market value (as determined by an independent recognized
appraiser) or its net book value.
"Security Ratio" means at any time the value of the property subject to the
lien of the Mortgage, as such value is determined by an appraisal required by
Section 2.4(k) hereof, divided by the sum of (i) the amount (including interest
which has accrued and is being deferred) of Senior Indebtedness, plus (ii) the
amount of the Bonds outstanding, plus (iii) the amount (including interest which
has accrued and is being deferred) of the Indebtedness outstanding to the City
of Gloucester secured by the mortgages described in Exhibit C hereto.
"Senior Indebtedness" shall have the meaning set forth in Section 2.4(k)
hereof.
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"Series F Bonds" means one or more of the Variable/Fixed Rate Economic
Development Bonds (Xxxx Hauling and Warehousing System, Inc. - 1983 Project),
Series F, of the Issuer in the aggregate principal amount of $9,000,000 which
were issued on December 24, 1987, were used to provide funds for the financing
of a portion of the Costs of the Project, and are being refunded with the
proceeds of the Series H Bonds.
"Series H Agreement" means the Series H Loan Agreement, dated as of January
2, 1992, between the Issuer and the Company, as the same may be amended,
modified or supplemented from time to time in accordance with its terms.
"Series H Assignment" means the Series H Assignment dated the Closing Date
by and between the Issuer, as Assignor, and the Trustee, as Assignee, assigning,
subject to such reservations as are contained therein, all of the Issuer's
right, title and interest in and to the Series H Agreement and the other Series
H Loan Documents, as the same may be amended, modified or supplemented from time
to time.
"Series H Bond" or "Series H Bonds" means one or more of the Economic
Development Bonds (Xxxx Hauling and Warehousing System, Inc. - 1983 Project),
Series H Refunding (AMT) of the Issuer in the aggregate principal amount of
$9,000,000 authorized to be issued pursuant to the Bond Resolution, delivered
under and pursuant to the Bond Resolution and the Series H Indenture and any
bonds issued in lieu of or in substitution therefor.
"Series H Guaranty" means the Series H Guaranty Agreement, dated as of
January 2, 1992, among the Guarantors, the Purchaser and the Trustee, and any
amendments or supplements thereto.
"Series H Indenture" means the Series H Indenture of Trust dated as of
January 2, 1992 between the Issuer and Trustee, pursuant to which the Series H
Bonds are authorized to be issued, and any amendments and supplements thereto.
"Series H Loan" means the Series H Loan in the aggregate principal amount
of $9,000,000 made by the Issuer, as lender, from the proceeds of the sale of
the Series H Bonds, to the Company, as borrower, to provide funds for the
refunding of the Series F Bonds which were used to finance a portion of the
Costs of the Project, all in accordance with the terms of the Series H
Agreement.
"Series H Loan Documents" means any or all of the Series H Agreement, the
Series H Indenture, the Bond Purchase Agreement, the Series H Mortgage, the
Series H Guaranty, the Series H Assignment and all documents, certificates and
instruments executed in connection therewith.
I-11
"Series H Mortgage" means the Mortgage and Security Agreement dated as of
January 2, 1992 from the Company to the Trustee under which the Company grants
to the Trustee a mortgage lien on and a security interest in the Project
Facility to secure payment of the Company's obligations contained in Section
4.2(a) of the Series H Agreement, and any amendments and supplements thereto.
"S & P" means Standard & Poor's Corporation.
"State" means the State of New Jersey.
"Subsidiary" means any entity of which at least a majority of the
outstanding stock having by the terms thereof ordinary voting power to elect a
majority of the board of directors of such corporation (irrespective of whether
or not at the time stock of any other class or classes of such corporation shall
have or might have voting power by reason of the happening of any contingencies)
is at the time directly or indirectly owned or controlled by the Company or one
or more of its subsidiaries.
"Substantial User" means a substantial user within the meaning of Section
103 (b) (13) of the 1954 Code or Section 147 (a) of the Code.
"Taxes" shall have the meaning set forth in Section 5.3 hereof.
"Term of Agreement" means the term of this Agreement as specified in
Section 11.1 hereof.
"Trustee" means Mellon Bank, N.A., a national banking association, and its
successors and any corporation resulting from or surviving any consolidation or
merger to which it or its successors may be a party and any successor trustee at
the time serving as successor trustee under the Indenture.
"Principal Office" of the Trustee means the address specified in Section
12.04 of the Indenture or such other address as may be designated in writing to
the Issuer and the Company.
"Uniform Commercial Code" means the Uniform Commercial Code, Title 12A of
the New Jersey Statutes, as enacted and in force and effect in the State.
"Yield" means that yield which is computed pursuant to Treasury Regulation
ss.1.103-13 (c) except that the yield on the Bonds shall be determined on the
basis of the "issue price." For this purpose, "issue price" shall have the same
meaning given it by Sections 1273(b) and 1274 of the Code.
Section 1.2. Interpretation and Construction. In this Loan Agreement,
unless the context otherwise requires:
I-12
(1) Articles and Sections mentioned by number only are the respective
Articles and Sections of this Loan Agreement so numbered as originally executed;
(2) Words importing a particular gender mean and include every other
gender, and words importing the singular number mean and include the plural
number and vice versa;
(3) Words importing persons mean and include firms, associations,
partnerships (including limited partnerships), societies, trusts, public or
private corporations or other legal entities, including public or governmental
bodies, as well as natural persons;
(4) Any headings preceding the texts of the several Articles and
Sections of this Loan Agreement, and any table of contents or marginal notes
appended to copies hereof, shall be solely for convenience of reference and
shall not constitute a part of this Loan Agreement, nor shall they affect its
meaning, construction or effect;
(5) If any clause, provision or section of this Loan Agreement or the
application thereof to any circumstance shall be ruled invalid or unenforceable
by any court of competent jurisdiction, such holding shall not invalidate or
render unenforceable any of the remaining provisions hereof or the application
of such clause, provision or section to circumstances other than those as to
which it is held invalid or unenforceable.
(6) References herein to the Issuer, the Trustee, the Company and the
Purchaser shall include their respective successors and assigns.
[END OF ARTICLE I]
I-13
ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES
Section 2.1. Representations and Covenants of the Issuer. (a) The Issuer
represents and covenants that:
(1) The Issuer is a public body corporate and politic constituting an
instrumentality of the State duly organized and existing under the laws of the
State. Under the provisions of the Act, the issuer is authorized to enter into
the transactions contemplated by this Loan Agreement and the Indenture and to
carry out its obligations hereunder and thereunder. The Issuer has been duly
authorized to execute and deliver this Agreement and the Indenture.
(2) The Issuer covenants that it will not pledge the amounts derived from
this Loan Agreement other than as contemplated by the Indenture.
(b) All covenants, stipulations, promises, agreements and obligations of
the Issuer set forth herein shall be deemed to be the covenants, stipulations,
promises, agreements and obligations of the Issuer and not of any member,
officer or employee of the Issuer in his or her individual capacity, and no
recourse shall be had for the payment of the principal or redemption price of or
interest on the Bonds or for any claim based thereon or hereunder against any
member, officer or employee of the Issuer or any person executing the Bonds.
Section 2.2. Representations and Warranties of the Company. The Company
represents and warrants that:
(a) Corporate Status. The Company and each of its Subsidiaries and
Affiliates is a duly organized and validly existing corporation in good
standing under the laws of the state of its incorporation. The Company and each
of its Subsidiaries and Affiliates are duly qualified or licensed as foreign
corporations in good standing in every jurisdiction in which the nature of the
respective businesses conducted makes such qualification or licensing necessary.
The Company has no Subsidiary or Affiliate other than as listed in the
definition of the term "Affiliate" set forth in Article I hereof.
(b) Corporate Power and Authority. The Company has the corporate power and
authority to own its property and assets and to transact the business in which
it is engaged or presently proposes to engage. The Company is not in violation
of any provision of its Certificate of Incorporation, as amended. The Company
and each of its Subsidiaries and Affiliates has the corporate power and
authority to execute, deliver, perform its obligations under, and
II-1
consummate the transaction contemplated by this Agreement and the other Loan
Documents to which each is a party; and has taken all necessary corporate action
(including, without limitation, any consent of stockholders required by law or
by its charter or by-laws) to authorized the execution and delivery of this
Agreement and each of the other Loan Documents to which each is a party. This
Agreement and the Loan Documents to which the Company and its Subsidiaries and
Affiliates are parties each constitutes the legal, valid, and binding
obligations of the Company and its Subsidiaries and Affiliates, as applicable,
enforceable in accordance with their terms subject to applicable bankruptcy,
insolvency, or other similar laws relating to creditors' rights generally.
(c) No Litigation. There is no action, suit, proceeding, inquiry, or
investigation pending or, to the knowledge of the Company, threatened against or
affecting the Company, its officers, or any Subsidiary or Affiliate, or any of
their respective properties, by or before any court, arbitrator or governmental,
administrative, or public body or agency, nor to the best knowledge of the
Company is there any basis therefor, which might result in any material adverse
change in the operations, business, property, or assets or in the condition
(financial or otherwise) of the Company and its Subsidiaries and Affiliates or
which involves the possibility of materially adversely affecting the ability of
the Company or any of its Subsidiaries or Affiliates to comply with this
Agreement or any of the other Loan Documents to which the Company or any of its
Subsidiaries or Affiliates is a party, or which would adversely affect, in any
way, the validity or enforceability of the Bonds, this Agreement, any of the
Loan Documents to which the Company or any of its Subsidiaries or Affiliates is
a party, or any agreement or instrument to which the Company is a party, used or
contemplated for use in the consummation of the transactions contemplated
hereby. The Company is not, nor to the knowledge of the Company are any of its
Subsidiaries or Affiliates, in default in any material respect with respect to
any judgment, order, writ, injunction, decree, rule or regulation of any
governmental instrumentality or agency.
(d) No Violation. (i) Neither the execution and delivery of this Agreement
or the Loan Documents, nor the consummation of any of the transactions herein or
therein contemplated, nor the fulfillment of or compliance with the terms and
provisions hereof or thereof, will contravene any provision of any law, statute,
rule or regulation to which the Company or any of its Subsidiaries or Affiliates
is subject or any judgment, decree, license, order, or permit applicable to the
Company or any of its Subsidiaries or Affiliates, or will conflict or be
inconsistent with, or will result in any breach of, any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of any Lien, security interest, charge or encumbrance
whatsoever upon any of the property or assets of the Company or its Subsidiaries
or Affiliates pursuant to
II-2
the terms of any indenture, mortgage, deed of trust, agreement, or other
instrument to which the Company or any of its Subsidiaries or Affiliates is a
party or by which any of them may be bound, or to which any of them may be
subject, or violate any provision of the charter or by-laws of the Company or
any of its Subsidiaries or Affiliates.
(ii) Neither the Company nor any of its Affiliates or Subsidiaries is a
party to any contract or agreement or subject to any charter or other corporate
restriction which materially and adversely affects its business, property,
assets or financial condition. Neither the Company nor any Subsidiary or
Affiliate is a party to, or otherwise subject to any provision contained in, any
instrument evidencing Indebtedness of the Company or such Subsidiary or
Affiliate, any agreement relating thereto, or any other contract or agreement
(including its charter) which restricts or otherwise limits the incurring of the
Indebtedness to be represented by this Agreement and the other Loan Documents.
(e) Governmental Approval. No consent or approval of, or filing with, or
exemption by, any governmental or public body or authority is required to
authorize, or is required in connection with the execution, delivery, and
performance of, this Agreement, any of the other Loan Documents, or of any of
the instruments or agreements herein or therein referred to, or the taking of
any action hereby or thereby contemplated. The Company and its Subsidiaries and
Affiliates and the Project Facility are in compliance in all material respects
with all applicable requirements of all federal, state, regional and local laws
and with rules and regulations of federal, state, regional and local
governmental and regulatory bodies. Without limiting the foregoing, the Company
and its Subsidiaries and Affiliates and the Project and Project Facility are in
compliance with all applicable environmental laws, including without limitation
the permits, licenses and approvals issued by the U.S. Army Corps of Engineers
pursuant to the Federal Clean Water Act and the Federal River and Harbors Act
and by the New Jersey Department of Environmental Affairs for waterfront
development, stream encroachment and the grant of riparian rights.
(f) Margin Regulations. Neither the Company nor any of its Subsidiaries or
Affiliates is engaged principally in, or as one of its important activities is
involved in, the business of extending credit for the purpose of purchasing or
carrying any Margin Stock (as defined in 12 C.F.R. 221.3(v) or in any successor
provision thereto). The proceeds of the loans made pursuant to the Loan
Agreement will not be used in violation of Regulation U of the Board of
Governors of the Federal Reserve System as from time to time in effect or any
successor thereto.
(g) Financial Condition. The combined comparative balance sheet of the
Company, its Subsidiaries, and its combined
II-3
Affiliates as at December 31, 1990, and the combined comparative statements of
income, changes in financial position and retained earnings of the Company, its
Subsidiaries, and its Affiliates for the fiscal year ending on said date, all
certified by Xxxxxxxx & Co., and the unaudited combined balance sheet of the
Company, its Subsidiaries and its combined Affiliates as at September 30, 1991,
and the combined comparative financial statements of income, changes in
financial position and retained earnings of the Company, its Subsidiaries and
its Affiliates for the nine months ending on such date, all of which have
heretofore been furnished to the Purchaser, fairly reflect the combined
comparative financial condition of the Company, its Subsidiaries and its
Affiliates at the respective dates thereof, and the results of the operations of
the Company, its Subsidiaries, and its Affiliates for the periods covered
thereby. The financial statements included in the Application or otherwise
supplied to the Issuer or the Purchaser (including any related schedules or
notes) are true and correct in all material respects (subject, as to interim
statements, to changes resulting from audits and year-end adjustments) and have
been prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved and show all
liabilities, direct and contingent, of the Company and its consolidated
Subsidiaries and Affiliates required to be shown in accordance with such
principles. Since September 30, 1991 there has been no material adverse change
in the combined financial condition of the Company, its Subsidiaries, and its
Affiliates from that shown by the balance sheet as at that date.
(h) Compliance with ERISA. The pension or other employee benefit plans
which are established or maintained by the Company and each of its Subsidiaries
and Affiliates (the "Plans") are in substantial compliance with ERISA; no Plan
is insolvent or in reorganization; no plan has an accumulated or waived funding
deficiency within the meaning of Section 412 of the Code; neither the Company
nor any of its Subsidiaries or Affiliates, nor any ERISA Affiliate, has incurred
any material liability (including any material contingent liability) to or on
account of a Plan pursuant to Section 4062, 4063, 4064, 4201, or 4204 of ERISA
or expects to incur any liability under any of the foregoing Sections on account
of the termination of participation in or contributions to any such Plan; no
proceedings have been instituted to terminate any Plan; no condition exists
which presents a material risk to the Company, any Subsidiary, or any Affiliate,
respectively, of incurring a liability to or on account of a Plan pursuant to
any of the foregoing Sections of ERISA; and no lien imposed under the Code or
ERISA on the assets of the Company or any Affiliate or Subsidiary exists or is
likely to arise on account of any Plan.
(i) Title to Property. To the best of the Company's knowledge, the Company
and its Subsidiaries and Affiliates have good and marketable title to all their
respective properties and assets (i) reflected on the latest combined balance
sheet referred
II-4
to in Section 2.2(g) and (ii) comprising the Project Facility (as defined in the
Indenture) and the property subject to the Mortgage, and all such properties and
assets are free and clear of Liens, except (A) Liens disclosed on such balance
sheet, (B) materialmen's and mechanic's Liens which do not materially detract
from the value or interfere with the present or anticipated business use of the
properties subject thereto, (C) those Permitted Encumbrances described on
Exhibit C annexed hereto. To the best of the Company's knowledge, upon execution
and delivery of this Agreement and the documents contemplated hereby and upon
any filings or recordings made in connection therewith, the Mortgage will be a
valid lien on the Project Facility subject and subordinate only to such
imperfections of title or encumbrances as are shown on Exhibit C.
(j) Tax Returns. All tax returns and tax reports of the Company and each of
its former and present Subsidiaries and Affiliates required by law to be filed
have been duly filed, and all taxes, assessments, and other governmental charges
or levies (other than those presently payable without penalty and those
currently being contested in good faith for which adequate reserves have been
established) upon the Company or any of its former or present Subsidiaries and
Affiliates (or any of their properties) which are due and payable have been paid
in full. The charges, accruals and reserves on the books of the Company and its
affiliates in respect of federal income tax for all periods are adequate in the
opinion of the Company.
(k) Disclosure. There is no fact known to the Company which materially
adversely affects or in the future may (so far as the Company can now foresee)
materially adversely affect the business, property, assets, or financial
condition of the Company or any of its Subsidiaries or Affiliates which has not
been set forth in the Loan Documents.
(l) The Project. The Project is included within the definition of a
"project" in the Act and the Company will operate or cause the Project Facility
to be operated as a "project" under the Act.
(m) [Intentionally Omitted]
(n) Compliance with Laws. The Company will cause the Project and the
Project Facility to be operated in accordance with the laws, rulings,
regulations, and ordinances of federal and state governmental bodies and the
departments, agencies and political subdivisions thereof. The Company has
obtained or caused to be obtained all requisite approvals or permits or licenses
of the State and of other federal, state, regional and local governmental bodies
for the acquisition, construction, improving, and equipping of the Project and
the operation of the Project Facility, and will
II-5
obtain or cause to be obtained any such approvals, permits or licenses as may
be required in the future from time to time.
(o) Information in Application Accurate. All information and data contained
in the Application relating to the Company were true, correct, and complete in
all material respects as of the date thereof. Aside from financial information
relating to the Company, which information has not been updated since the date
of submission of the Application, no information has been omitted therefrom
which would make the Application misleading in any untrue material respect, and
the Application does not contain any untrue statement of a material fact and
does not omit to state a material fact necessary in order to make the statements
contained therein not misleading or incomplete.
(p) Inducement. The availability of financial assistance from the Issuer as
provided for herein was an important inducement to the Company to undertake the
Project and to locate the Project in the State.
(q) No Untrue Statements. The representations, statements, and warranties
of the Company set forth in the Application, this Agreement, or any other Loan
Document (1) are true, correct, and complete in all material respects, (2) do
not contain any untrue statement of a material fact, and (3) do not omit to
state a material fact necessary in order to make the statements contained herein
or therein not misleading or incomplete. The Company understands that all such
statements, representations, and warranties have been relied upon as an
inducement by the Issuer to make the Loan and the Purchaser to purchase the
Bonds.
(r) Brokerage Commissions. No Person is entitled to receive from the
Company or any other Person any brokerage commission, finder's fee, or similar
fee or payment in connection with the consummation of the transactions
contemplated by this Agreement.
(s) Commencement of Project. Except as otherwise disclosed in the
Application, the Project commenced subsequent to May 24, 1983, the date upon
which the Authority adopted a resolution preliminarily approving the Project,
and prior to such date neither the Company nor any Related Person commenced or
caused to be commenced any off-site production or entered into an agreement
binding the Company or any Related Person to proceed with the Project.
(t) Prevailing Wages and Affirmative Action. The Company is fully familiar
with the Issuer's Prevailing Wage Regulations and Affirmative Action Program and
has submitted to the Issuer all reports and certificates required to date
pursuant to the Prevailing Wage Regulations and Affirmative Action Program.
II-6
Section 2.3. Tax-Exempt Status of the Bonds. The Company hereby represents,
covenants and warrants that:
(a) The Project did not reach a degree of completion which permitted
operation at substantially the level for which it was designed, and the Project
was not, in fact, operated at substantially the level for which it was designed
(determined in accordance with the provisions of Section 103(b) of the 1954 Code
and Treas. Reg. ss.1.103-8(a)(5)) more than one year prior to the date of
issuance of the Series F Bonds.
(b) No Person who was a Substantial User of the Project at any time during
the five year period immediately preceding the date hereof, and who will
receive, directly or indirectly, proceeds of the Bonds in an amount equal to 5%
or more of the face amount of the Bonds, in payment for his interest in the
Project, will be a Substantial User of the Project at any time during the five
year period beginning on the Date of Issue of the Bonds.
(c) (i) The entire proceeds from the sale of the Bonds will be used to
refund the 1986 Series Bonds on the Date of Issue, all of the proceeds of which
were used to refund the Series C Bonds. At least 90% of the proceeds from the
sale of the Series C Bonds and investment earnings thereon were expended for
Costs of the Project relating to the acquisition or construction after May 23,
1983 of docks or wharves which are part of a public port facility (i.e., a port
facility which is available for use by members of the general public or for use
by common carriers or charter carriers which serve members of the general
public) or to acquire or construct lands, buildings or other property which are
functionally related and subordinate to such facility within the meaning of
Section 103(b)(4)(D) of the 1954 Code.
(ii) The entire proceeds from the sale of the Series H Bonds will be used
to refund the Series F Bonds, at least 95% of the proceeds from the sale of
which, and investment earnings thereon, were expended for Costs of the Project
relating to the acquisition or construction after May 23, 1983 of docks or
wharves which are part of a public port facility (i.e., a port facility which is
available for use by members of the general public or for use by common carriers
or charter carriers which serve members of the general public) or to acquire or
construct lands, buildings or other property which are functionally related and
subordinate to such facility within the meaning of Section 103(b)(4)(D) of the
1954 Code. Of the remaining 5% of such proceeds, not more than 2% of the
proceeds from the sale of the Series F Bonds were used to finance issuance costs
with respect to the Series F Bonds.
(iii) No portion of the proceeds from the sale of the Series C Bonds, the
1986 Series Bonds or the Series F Bonds was used to provide a facility the
primary purpose of which is retail food and beverage services, automobile sales
or service, or the
II-7
provision of recreation or entertainment, and no portion of the proceeds of the
Series C Bonds, the 1986 Series Bonds or the Series F Bonds was used to provide
any private or commercial golf course, country club, massage parlor, tennis
club, skating facility (including rollerskating, skateboard and ice skating),
racquet sports facility (including any handball or racquetball court), hot tub
facility, suntan facility, racetrack, airplane, skybox or other private luxury
box, health club facility, facility primarily used for gambling or store the
principal business of which is the sale of alcoholic beverages for consumption
off premises. Less than 25% of the proceeds of the Series C Bonds, the 1986
Series Bonds and the Series F Bonds was used for the acquisition of land (or any
interest therein) to be used for nonfarming purposes.
(iv) None of the proceeds of the Series C Bonds, the 1986 Series Bonds or
the Series F Bonds were used for the acquisition of any property (or an interest
therein) unless the first use of such property was pursuant to such acquisition.
(d) The average weighted maturity of the Bonds and of the Series H Bonds
will not exceed 120% of the useful lives of the assets comprising the Project
(all determined pursuant to the Code and the rulings promulgated thereunder),
and the Company shall deliver a letter of its accountants to that effect on the
Closing Date.
(e) The Bonds and the Series H Bonds are not and shall not become directly
or indirectly federally guaranteed. Bonds will be considered to be "federally
guaranteed" if the payment of principal or interest with respect to such bonds
is guaranteed (in whole or in part) by the United States (or any agency or
instrumentality thereof) or 5% or more of the proceeds of the bonds are used in
making loans or the payment of principal or interest with respect to which are
guaranteed or invested (directly or indirectly) in federally insured deposits or
accounts.
(f) The information contained in Internal Revenue Form 8038 prepared in
connection with the issuance of the Bonds is true, accurate and complete. The
Company acknowledges that Form 8038 was prepared by Xxxxx & Xxxxxx from
information provided by the Company or its accountants, and that the Company or
its accountants are responsible for the accuracy of Form 8038. The Company will
hold harmless the Issuer, the Trustee, the Purchaser and Bond Counsel, against
any and all consequences of any inaccuracy, omission or misrepresentation in
Form 8038.
(g) Promptly after the Company first becomes aware of any Determination of
Taxability (as defined in the Indenture), the Company shall give written notice
thereof to the Issuer and the Trustee.
II-8
Section 2.4. Covenants of the Company. The Company agrees that, so long as
any of the Bonds are outstanding or any amounts are due under this Agreement or
under any of the Loan Documents, it shall comply and shall cause each of its
Subsidiaries and Affiliates to comply with the following provisions:
(a) Compliance with Agreement. The Company shall observe and perform all of
its obligations under this Agreement and the Loan Documents to which it is a
party. The Company shall fully and faithfully perform all the duties and
obligations which the Issuer has covenanted and agreed in the Indenture to cause
the Company to perform and any duties and obligations which the Company is
required in the Indenture to perform.
(b) Notice of Default, Litigation, Etc. (i) The Company shall furnish to
the Trustee as soon as possible and in any event within five (5) Business Days
after the discovery by any executive officer of the Company of any Default, a
certificate setting forth the details of such Default, and the action which the
Company proposes to take with respect thereto.
(ii) The Company shall give prompt notice to the Trustee of any litigation
or governmental proceeding pending, involving or, to its knowledge, threatened
against the Company, any Subsidiary or any Affiliate which (A) involves an
uninsured claim or the uninsured portion or deductible of an insured claim which
is over $500,000 or (B) if adversely determined, would have a material adverse
effect on the business or financial condition of the Company, any Subsidiary, or
any Affiliate.
(c) Corporate Existence. The Company covenants that it shall maintain its
corporate existence in good standing under the laws of the Commonwealth of
Pennsylvania, shall cause each of its Subsidiaries and Affiliates to maintain
its corporate existence in good standing under the laws of its respective
jurisdiction of incorporation, and shall maintain, in each jurisdiction where
material to the business of the Company or any of its Subsidiaries and
Affiliates or the maintenance of the Collateral, its and each of their right to
transact business in each jurisdiction in which the nature of its or their
business or the character of the properties which it or they own or lease
requires qualification as a foreign corporation and where failure to so qualify
would permanently preclude the Company or any of its Subsidiaries or Affiliates,
as the case may be, from enforcing it rights with respect to its assets. No
Subsidiary or Affiliate shall be incorporated in any jurisdiction if in the
opinion of the Trustee the laws of such jurisdiction would restrict or otherwise
adversely affect the ability of such Subsidiary or Affiliate to perform its
obligations under the Guaranty. The Company and each Subsidiary and Affiliate
will comply in all material respects with all applicable laws, ordinances,
rules, regulations, and requirements of governmental authorities, except where
the necessity of
II-9
compliance therewith is contested in good faith by appropriate proceedings and
the effect of non-compliance during such contest will not have a material
adverse effect upon the business, properties, or condition, financial or
otherwise, of the Company or any Subsidiary or Affiliate or result in the
imposition of any Lien on the properties of any of them (unless the enforcement
of any such Lien has been and continues to be effectively stayed). The Company
will and will cause its Subsidiaries and Affiliates to preserve and keep in full
force and effect all rights, licenses, registrations, and franchises necessary
(i) to the proper conduct of their business or affairs and (ii) to continue to
operate their business as presently operated.
(d) Acquisition. Merger or Consolidation; Sale of Substantially All
Assets. Neither the Company nor any Subsidiary or Affiliate shall sell, lease,
assign, transfer, or otherwise dispose of any assets from and after the date
hereof (i) for less than fair value or (ii) if the total of the net book value
of all assets sold, leased, or otherwise assigned or disposed of from and after
the date hereof exceeds 25% of total combined assets of the Company and all of
its Subsidiaries and Affiliates, as the case may be. The Company shall not
permit in any event any such event to occur unless the Company has complied with
the provisions of Section 8.1. In addition, in the event of any sale of any
property subject to the lien of the Mortgage or any part thereof, the Company
shall make or set aside in trust for prepayments or payments of Senior
Indebtedness, or if no such Indebtedness is outstanding, the Bonds and any
Indebtedness on a parity with the Bonds incurred in compliance with Section
2.4(h) of this Agreement, in an amount equal to the greater of (x) the sales
price of such Property sold or (y) 60% of the appraised fair market value
thereof. Notwithstanding the foregoing, neither the company nor any Subsidiary
or Affiliate shall sell, lease, or otherwise transfer or dispose of any asset
if, after giving effect to such sale, lease, or other transfer or disposition,
there shall exist any Default.
Neither the Company nor any Subsidiary or Affiliate shall merge or
consolidate with or into or acquire all or substantially all of the assets of
any other Person, provided that the Company or any Subsidiary or Affiliate may
merge or consolidate with or into or acquire all or substantially all of such
assets of another corporation (i) if the acquiring corporation is the Company or
a corporation duly organized in good standing under the laws of a State of
the United States, (ii) if each of the representations and warranties set forth
in paragraphs (a) through (f), inclusive, (h), (i), (j), and (n) of Section
2.2 of this Agreement remains true and correct immediately after giving effect
to such merger, consolidation or asset acquisition, (iii) if the surviving
corporation is not the Company, the surviving corporation expressly assumes all
of the covenants and obligations of its predecessor under this Agreement and
each of the Loan Documents and otherwise
II-10
in respect of the Bonds, (iv) the Company or the surviving corporation could
immediately after giving effect to the transaction, incur at least $1.00 of
Indebtedness pursuant to Section 2.4(h) hereof, (v) if the surviving corporation
has rated debt securities, such debt securities are rated by a nationally
recognized credit rating agency and such rating is investment grade or better
(e.g., if by S & P, "BBB" or better and if by Xxxxx'x, "Baa" or better), and
(vi) the Trustee shall have received an opinion of Bond Counsel to the effect
that such merger, consolidation or acquisition of assets will not adversely
affect the exemption of interest on the Series G Bonds from federal income
taxation, a certificate of the Chief Financial Officer stating that none of the
covenants contained in this Agreement will be violated as a result of such
merger, consolidation or acquisition of assets, and such other agreements,
certificates, opinions, and documents as the Trustee shall have reasonably
requested. Notwithstanding the foregoing, any such transaction must comply in
all respects with the conditions of Section 8.1. The Company agrees to notify
the Purchaser of its intent to merge, consolidate or acquire assets pursuant to
this paragraph at least 10 days prior to entering into any binding agreements
with respect to such acquisition.
Notwithstanding the foregoing, the Company shall have the right at any
time and from time to time to (i) merge or consolidate any Subsidiary or
Affiliate with or into it (provided the Company is the surviving corporation) or
with or into any other Subsidiary or Affiliate, or (ii) acquire substantially
all of the assets, or cause any other Subsidiary or Affiliate to acquire
substantially all of the assets, of any Subsidiary or Affiliate (other than the
Company), without regard to the provisions of the immediately preceding
paragraph of this Section 2.4(d), but subject to the provisions of Section 8.1.
(e) Financial Statements; Inspections. (i) The Company shall deliver to
the Trustee and the Purchaser (A) as soon as available but in any event within
120 days after the end of each Fiscal Year a combined and combining
comparative statement of income, reconciliation of capital accounts and related
balance sheets for the Company, its Subsidiaries and its Affiliates for such
year prepared in conformity with generally accepted accounting principles
consistently applied and in reasonable detail (such combined statements to be
audited and certified by an accounting firm acceptable to the Trustee with an
unqualified opinion and such combining statements to be unaudited and certified
by the Chief Financial Officer, whose certificate shall be satisfactory to the
Trustee), (B) as soon as available but in any event within 60 days after the end
of each of the first three fiscal quarters of each Fiscal Year, a combined
comparative statement of income, reconciliation of capital accounts, and related
balance sheet for such quarter and for the period from the beginning of the then
fiscal year to the end of such quarter, prepared in accordance with generally
accepted accounting principles consistently applied
II-11
(subject to year-end adjustments) and in reasonable detail (all of which shall
be unaudited and certified by the Chief Financial Officer, whose certificate
shall be satisfactory to the Trustee) for the Company, its Subsidiaries, and its
Affiliates, (C) upon request, copies of all such regular or periodic reports,
which are available for public inspection, which the Company may be required to
file with any federal or state department, bureau, commission, or agency, (D)
such other financial data as the Trustee or the Purchaser may reasonably request
and which is reasonably available to the Company, and (E) copies of any
statements, notices, certificates, and other information required to be
furnished to the Issuer under this Agreement, including without limitation
Section 7.9 hereof, on the date such information is required to be so
furnished. In addition, the Company shall deliver within 90 days after the end
of each of the first three fiscal quarters of each Fiscal Year combining
statements for any such reporting period during which the Company's investment
in any Subsidiary or Affiliate shall account for 15% or more of Combined
Tangible Net Worth or 15% or more of combined sales and revenues, such combining
statements to be unaudited and certified by the Chief Financial Officer, whose
certificate shall be satisfactory to the Trustee and the Purchaser. All
financial statements specified in clauses (A) and (B) above shall be furnished
in combined comparative form for the Company, its Subsidiaries, and its
Affiliates with comparative figures for the corresponding period in the
preceding year, and shall be accompanied by a certificate signed by the Chief
Financial Officer, with appropriate documentation substantiating all financial
calculations, stating that there exists no Default or, if any such Default
exists, stating the nature thereof and what action the Company proposes to take
with respect thereto.
(ii) The Company shall permit, and shall cause each of its Subsidiaries
and Affiliates to permit, any Person designated by the Issuer, the Trustee or
the Purchaser, at their own expense, to visit and inspect the properties of the
Company and each of its Subsidiaries and Affiliates and to examine the books and
records, including financial records of the Company, its Subsidiaries and
Affiliates, and make copies or extracts thereof, and to discuss the affairs,
finances, and accounts of the Company, its Subsidiaries and Affiliates, with its
and their officers, at such reasonable times as the Issuer or the Trustee may
reasonably request.
(f) Restricted Payments. Neither the Company nor any of its
Subsidiaries or Affiliates shall make any Restricted Payment or set aside any
funds therefor unless, after giving effect thereto, the aggregate of such
Restricted Payments for all such purposes subsequent to the Closing Date would
not exceed the sum (as in effect from time to time, hereinafter referred to as
the "Distribution Fund") of (i) 50% of the Company's Cumulative Combined Net
Income subsequent to December 31, 1991 so long as the Company's Combined
Tangible Net Worth is greater than $31,051,000, (ii) the aggregate of the net
cash proceeds received by the Company
II-12
from any issuance or sale of capital shares of the Company subsequent to the
Closing Date, and (iii) the aggregate of the net cash proceeds received by the
Company from, any issuance of any Indebtedness of the Company which has been
converted into capital shares of the Company subsequent to the Closing Date,
which amount shall be added to the Distribution Fund only after such conversion.
Notwithstanding the foregoing, the Company may acquire its own capital shares
for an aggregate amount from and after the Closing date equal to the greater of
(x) the sum of (i) 25% of the Cumulative Combined Net Income of the Company
subsequent to December 31, 1991, plus (ii) $500,000, or (y) the amount then
available under the Distribution Fund, which amount shall be charged to the
Distribution Fund. No Restricted Payment may be made in other than cash or
securities which are actively traded on a nationally recognized public market
and have a readily ascertainable market value (which value shall be the amount
of such Restricted Payment), unless the Company shall have received a report
from an independent recognized appraiser as to the fair value of the property to
be distributed or transferred, in which case the amount of such Restricted
Payment shall be deemed to be the greater of its fair value (as determined by
such appraiser) or its net book value on the books of the Company.
Notwithstanding any of the foregoing provisions of this paragraph, neither the
Company nor any Subsidiary or Affiliate shall make any Restricted Payment if at
the time or after giving effect thereto, there shall exist any Default.
(g) Maintenance of Combined Tangible Net Worth. The Company shall at
all times maintain a Combined Tangible Net Worth of (i) not less than
$31,051,000, plus 50% of the Company's Aggregate Combined Net Income at the end
of each fiscal year subsequent to the fiscal year ending December 31, 1991 and
(ii) not less than 25% of Combined Long Term Indebtedness but in no event less
than $31,051,000.
(h) Limitation of Total Indebtedness. Neither the Company nor any of
its Subsidiaries or Affiliates shall incur additional Indebtedness if, at the
time such Indebtedness is incurred and after giving effect thereto and to any
concurrent reduction of Indebtedness, Combined Indebtedness would exceed 400% of
Combined Tangible Net Worth.
(i) Times Interest Earned. The ratio of (i) the Company's Combined Net
Income Before Interest and Taxes to (ii) the Company's Combined Interest Charges
calculated as of the end of each fiscal quarter beginning December 31, 1991 for
the period including such quarter and the immediately prior three fiscal
quarters, combined, will be at least 1.35 for each of said periods.
(j) Cash Flow. The Combined Cash Flow of the Company shall not be less
than $7,000,000 at the end of any Fiscal Year commencing January 1, 1991.
II-13
(k) Limitation on Primary Debt. After the date hereof, neither the
Company nor any Subsidiary or Affiliate shall incur additional Indebtedness
having a Lien on the Project Facility or any part thereof senior to any lien
securing the Series G Bonds or the obligations of the Company or any Subsidiary
or Affiliate under this Agreement or any of the Loan Documents, provided that
the Company or any Subsidiary or Affiliate may incur such senior indebtedness in
an aggregate amount of up to $5,000,000 without regard to any limitation or
requirements otherwise stated under this Section 2.4(k), provided there shall
not exist any Default. After the date hereof, neither the Company nor any
Subsidiary or Affiliate shall incur additional Indebtedness having a Lien on the
Project Facility or any part thereof of equal priority with any lien securing
the Series G Bonds or the obligations of the Company or any Subsidiary or
Affiliate under this Agreement or any of the Loan Documents (all of such
Indebtedness, together with any indebtedness incurred pursuant to the preceding
sentence whether now outstanding or hereafter incurred being referred to as
"Senior Indebtedness") other than the Liens created by the Series H Loan
Documents if, at the time it is incurred and after giving effect thereto, (i)
the Security Ratio would be less than 2.2 to 1; provided that no additional
Senior Indebtedness (including interest which has accrued and is being deferred)
shall be incurred without providing to the Trustee and to the Purchaser an
appraisal performed not more than two years prior to such incurrence by an
independent appraiser of recognized standing of the value of the property
subject to the lien of the Mortgage; or (ii) if, at the time of or after giving
effect to the incurrence of such Indebtedness, there shall exist any Default.
Prior to the incurrence of any Senior Indebtedness by the Company or any
Subsidiary or Affiliate, the Company shall furnish to the Trustee and the
Purchaser a certificate of the Chief Financial Officer demonstrating in
reasonable detail compliance by the Company and such Subsidiary or Affiliate
with the provisions of this Section 2.4(k). In connection with the incurrence of
Senior Indebtedness meeting the requirements of this Section 2.4(k), the Trustee
shall execute and deliver a subordination of the Mortgage or a parity agreement
with respect to the Mortgage, provided that no such agreement shall amend or
modify any provisions of the Mortgage, but only the priority thereof.
(l) Investments in Subsidiaries and Affiliates, Etc. Neither the
Company nor any Subsidiary or Affiliate shall purchase any capital stock or
other security issued by, make any loan, advance, or extension of credit to,
purchase any of the business or integral part of the business of, or otherwise
make any investment in, any Subsidiary, Affiliate, or any other Person if,
immediately before or after giving effect thereto, there shall exist any
Default.
(m) Compliance with ERISA. The Company and each of its Subsidiaries and
Affiliates shall meet all minimum funding
II-14
requirements applicable to any Plans which are subject to ERISA or to Section
412 of the Code and will at all times comply in all material respects with the
provisions of ERISA and Section 412 of the Code which are applicable to the
Plans. Neither the Company nor any Subsidiary or Affiliate will permit any event
or condition to exist which would permit any of the Plans which is not a
multi-employer plan to be terminated under circumstances which would cause the
lien provided for in Section 4068 of ERISA to attach to the assets of the
Company or any Subsidiary or Affiliate. Promptly after the occurrence of a
"reportable event", as defined in Section 4043 of ERISA, or after the Company or
a Subsidiary or Affiliate receives notice that the Pension Benefit Guarantee
Corporation has instituted or intends to institute termination proceedings with
respect to any Plan, and prior to the termination of any Plan by the
administrator thereof, the Company shall notify the Trustee and provide such
documentation, data and other information with respect thereto as the Trustee
may reasonably request.
(n) Transactions with Related Parties. Neither the company nor any
Subsidiary or Affiliate shall engage in or effect any transactions with any
Related Party (other than the Company) on a basis less favorable to the Company
or such Subsidiary or Affiliate, as the case may be, than would be the case if
such transaction had been effected with a Person which was not a Related Party.
[END OF ARTICLE II]
II-15
ARTICLE III
ISSUANCE OF THE SERIES G BONDS
Section 3.1. Agreement to Issue the Series G Bonds: Application of
Series G Bond Proceeds. In order to provide funds to finance a portion of the
Cost of the Project, the Issuer, concurrently with the execution of this
Agreement, will issue, sell, and deliver the Series G Bonds. The Issuer will
deposit the net proceeds of the Series G Bonds with the Trustee to be applied to
refund the 1986 Series Bonds.
Section 3.2. Disbursements from the Project Fund. The Issuer has, in
the Indenture, authorized and directed the Trustee to disburse the Series G Bond
proceeds on the closing Date from the Series G Account within the Project Fund
to refund the 1986 Series Bonds. The Trustee shall not make any disbursement
from the Project fund until the Company shall have provided the Trustee with a
Requisition and the other documents required by Section 5.1 of this Agreement.
Section 3.3 Furnishing documents to the Trustee. The Company agrees to
cause such Requisitions to be directed to the Trustee as may be necessary to
effect payments out of the Project fund in accordance with Section 3.2 hereof.
Section 3.4. Special Arbitrage Certifications. The Issuer covenants not
to cause or direct any moneys on deposit in any fund or account to be used in a
manner which would cause the Bonds or the series H Bonds to be classified as
"arbitrage bonds" within the meaning of Section 148 of the Code, and the Company
certifies and covenants to and for the benefit of the Issuer and the Owners of
the Bonds that so long as there are any Bonds Outstanding, moneys on deposit in
any fund or account in connection with the transactions contemplated herein,
whether such moneys were derived from the proceeds of the sale of the Bonds or
from any other sources, will not be used in a manner which will cause the Bonds
or the Series H Bonds to be classified as "arbitrage bonds" within the meaning
of Section 148 of the Code.
[END OF ARTICLE III]
III-1
ARTICLE IV
LOAN PROVISIONS
Section 4.1. Loan of Proceeds. The Issuer agrees, upon the terms and
conditions contained in this Agreement and the Indenture, to make a loan to the
Company in the principal amount of TEN MILLION DOLLARS ($10,000,000), equal to
the proceeds received by the Issuer from the sale of the Series G Bonds. Such
proceeds shall be disbursed to or on behalf of the Company as provided in
Section 3.3 hereof.
Section 4.2. Amounts Payable.
(a) The Company hereby covenants and agrees to repay the Loan, as
follows: on or before the Business Day preceding any interest payment date for
the Series G Bonds or any other date that any payment of interest, premium, if
any, or principal is required to be made in respect of the Series G Bonds
pursuant to the Indenture, until the principal of, premium, if any, and interest
on the Series G Bonds shall have been fully paid or provision for the payment
thereof shall have been made in accordance with the Indenture, in immediately
available funds, a sum which, together with any moneys available for such
payment in the Bond Fund, will enable the Trustee to pay the amount payable on
such date as principal of (whether at maturity or upon redemption or
acceleration or otherwise), premium, if any, and interest on the Series G Bonds
as provided in the Indenture.
It is understood and agreed that all payments payable by the Company
under subsection (a) of this Section 4.2 are assigned by the Issuer to the
Trustee for the benefit of the Owners of the Bonds. The Company assents to such
assignment. The Issuer hereby directs the Company and the Company hereby agrees
to pay to the Trustee at the Principal Office of the Trustee all payments
payable by the Company pursuant to this subsection. Payments by the Company to
the Trustee as aforesaid or as otherwise required pursuant to this Agreement or
the other Loan Documents shall be sufficient to discharge the obligation of the
Company with respect to the amounts so paid, and the Company shall not be liable
to the Issuer, the Owners or to any other party by reason of the failure of the
Trustee to remit such amounts to the Owners, or otherwise to apply such
amounts, as provided in the Indenture.
(b) The Company will also pay the reasonable expenses of the Issuer
related to the issuance of the Series G Bonds, including the payment on the
Closing Date of a fee equal to $25,000. The Company shall also pay on the
Closing Date the fees and expenses of Bond Counsel, of counsel to the Purchaser
and of counsel to the Trustee with respect to the 1986 Series Bonds.
IV-1
(c) The Company will also pay the reasonable fees and expenses of the
Trustee under the Indenture and all other amounts which may be payable to the
Trustee under Section 9.02 of the Indenture, such amounts to be paid directly to
the Trustee for the Trustee's own account as and when such amounts become due
and payable.
(d) In the event the Company should fail to make any of the payments
required in this Section 4.2, the item or installment so in default shall
continue as an obligation of the Company until the amount in default shall have
been fully paid, and the Company agrees to pay the same with interest thereon,
to the extent permitted by law, from the date when such payment was due, at the
rate set forth in the Series G Bonds.
Section 4.3. Obligations of Company Unconditional. The obligations of
the Company to make the payments required in Section 4.2 hereof and to perform
and observe the other agreements contained herein shall be absolute and
unconditional and shall not be subject to any defense or any right of setoff,
counterclaim or recoupment arising out of any breach by the Issuer or the
Trustee of any obligation to the Company, whether hereunder or otherwise, or out
of any indebtedness or liability at any time owing to the Company by the Issuer,
the Trustee or the Purchaser, and, until such time as the principal of, premium,
if any, and interest on the Series G Bonds shall have been fully paid or
provision for the payment thereof shall have been made in accordance with the
Indenture, the Company (i) will not suspend or discontinue any payments provided
for in Section 4.2 hereof, (ii) will perform and observe all other agreements
contained in this Agreement and (iii) except as provided in Article X hereof,
will not terminate the Term of Agreement for any cause, including, without
limiting the generality of the foregoing, the occurrence of any acts or
circumstances that may constitute failure of consideration, eviction or
constructive eviction, destruction of or damage to the Project Facility, the
taking by eminent domain of title to or temporary use of any or all of the
Project Facility, commercial frustration of purpose, any change in the tax or
other laws of the United States of America or of the State or any political
subdivision of either thereof or any failure of the Issuer or the Trustee to
observe any agreement, whether express or implied, or any duty, liability or
obligation arising out of or connected with this Agreement. Nothing contained in
this Section shall be construed to release the Issuer from the performance of
any of the agreements on its part herein contained, and in the event the Issuer
or the Trustee should fail to perform any such agreement on its part, the
Company may institute such action against the Issuer or the Trustee as the
Company may deem necessary to compel performance so long as such action does not
abrogate the obligations of the Company contained in the first sentence of this
Section.
[END OF ARTICLE IV]
IV-2
ARTICLE V
THE PROJECT
Section 5.1. Disbursements from the Project Fund. (a) In the Indenture,
the Issuer has authorized and directed the Trustee to make disbursements from
the Project Fund as required by this Agreement. Disbursement of the entire
$10,000,000 of proceeds from the sale of the Series G Bonds shall be made from
the Series G Account to refund the 1986 Series Bonds, upon receipt by the
Trustee of a requisition signed by a Company Representative stating with respect
to such disbursement to be made: (1) that it is requisition no. 1; (2) that
payment is to be made to the Trustee of the 1986 Series Bonds; (3) that the
amount to be paid is $10,000,000; (4) that each obligation mentioned therein has
been properly incurred after May 24, 1983, is a proper charge, is unpaid or
unreimbursed, and has not been the basis of any previous disbursement; and (5)
that on the date thereof there has not occurred any act which, with the giving
of notice or passage of time, or both, would constitute a Default.
(b) The Company further agrees that as a condition precedent to the
disbursement from the Project Fund on the Closing Date of the entire proceeds of
the Series G Bonds to be used to refund the 1986 Series Bonds, there shall be
furnished to the Trustee, in writing, unless waived by the Purchaser, the
following:
(1) evidence of fee and mortgage title insurance, in form and substance
satisfactory to the Issuer, the Purchasers and the Trustee;
(2) proof that the insurance required to be maintained pursuant to
Section 5.4 is in full force and effect and that all premiums have been paid;
(3) proof of flood insurance as required in Section 5.4(c);
(4) verification evidencing that all permits, consents, approvals and
agreements required by all governmental boards and bureaus have been secured and
remain in full force and effect;
(5) such evidence as the Issuer, the Purchaser or the Trustee may
require to demonstrate exemption from or compliance with all applicable
building, zoning, health and safety laws, ordinances and regulations; and
(6) such other additional documents, financing statements, affidavits
or certificates of the Company or any other person or entity as the Issuer, the
Purchaser or the Trustee may reasonably request.
V-1
(c) The Company hereby agrees that it shall pay all costs incurred by
the Company or the Trustee in making such disbursement from the Project Fund. In
making any such disbursements from the Project Fund, the Trustee may rely on
such requisitions and other documents delivered to it and the Trustee shall be
relieved of all liability with respect to the making of such disbursements if
made in accordance with the foregoing.
Section 5.2. Maintenance and Modification of the Project Facility by
the Company. (a) The Company shall operate and maintain the Project Facility in
accordance with all applicable governmental laws, ordinances, approvals, rules
and regulations and requirements, including, but not limited to, zoning,
sanitary, pollution, environmental and safety ordinances, laws and rules and
regulations promulgated thereunder and in accordance with the terms of the
riparian grant from the State of New Jersey to the Company dated December 22,
1983 as recorded January 23, 1984, in Deed Book 3947, Page 279 in the Office of
the Camden County Register of Deeds.
(b) The Company shall (1) maintain, preserve and keep the Project
Facility or cause the Project Facility to be maintained, preserved and kept in
good repair, working order and condition, (2) from time to time, make or cause
to be made all necessary and proper repairs, replacements and renewals thereto
and (3) from time to time, make such substitutions, additions, modifications and
improvements as may be necessary and as shall not impair the structural
integrity, operating efficiency and economic value of the Project Facility. Any
alterations, replacements, renewals or additions made pursuant to this Section
shall become and constitute a part of the Project Facility and shall be
performed in accordance with Section 5.2(a).
(c) The Company shall operate or cause the Project to be operated as an
authorized project for a purpose and use as provided for under the Act until the
expiration or earlier termination of this Agreement.
(d) The Company shall not relocate the Project or any part thereof out
of the State.
(e) The Company shall not remove, relocate, discontinue the use of or
sell, fail to restore, or otherwise dispose of any part of the Project Facility
except as may be permitted pursuant to Section 8.1 hereof.
(f) The Company shall cause to be performed a supplemental
environmental site assessment to supplement the Preliminary Environmental Site
Assessment performed by EEC Environmental Inc. dated January 27, 1992. Such
supplemental assessment shall be performed by an independent environmental
consultant reasonably accepted to the Purchaser and shall include
V-2
a review of currently available federal, state and local governmental and
regulatory information with respect to releases or threats of release of oil
or hazardous materials (as such terms are defined in applicable federal, state
and local laws and regulations) which may affect the Project Facility and with
respect to compliance of the Project Facility with regulations governing storage
of such oil or hazardous materials. In addition, such supplemental assessment
shall include subsurface investigation of the Project Facility, and related
testing of soil and groundwater, as deemed necessary in the reasonable judgment
of the environmental consultant to determine whether the Project Facility has
been affected by any release or threat of release of oil or hazardous materials.
Such supplemental assessment shall be completed reasonably promptly and, in any
event, within six months of the date of issuance of the Series G Bonds. In the
event such supplemental assessment determines that the Project Facility has been
affected by any such release or threat of release, the Company shall promptly
cause such actions to be taken as may be required by applicable federal, state
or local laws and regulations, including without limitation any giving of notice
or remedial action or response action, as the case may be. The Company shall
provide a copy of the supplemental assessment to the Purchaser promptly upon its
receipt by the Company, and shall give prompt notice to the Purchaser of all
actions to be taken by the Company in response to such supplemental assessment
and the estimated costs thereof.
Section 5.3. Taxes, Other Governmental Charges and Utility Charges. (a)
The Company covenants that it and each of its subsidiaries and Affiliates shall
duly and punctually pay all taxes, assessments (including deficiency
assessments), and governmental charges or levies of any kind whatsoever
("Taxes") imposed on it or on its respective income or profits or on any of its
respective properties or assets, including, without limiting the generality of
the foregoing, any taxes levied upon the Project Facility which, if not paid,
will become a Lien or charge upon the Project Facility or upon any payment
pursuant to this Agreement, prior to the date on which penalties attach thereto.
The Company shall also pay all utility, water and sewer rents, and other charges
incurred in connection with the Project Facility and all assessments and charges
lawfully made by any governmental body for public improvements that may be
secured by a Lien on the Project Facility.
(b) The Company may, at its own expense and in its own name and in good
faith, contest any such taxes, assessments, and other charges, provided that
such contest shall not result in a lien being placed on the Project Facility or
any part thereof or result in the Project Facility being subject to loss or
forefeiture, and further provided that the Company gives notice in writing of
such contest to the Issuer and the Trustee. Nothing herein shall preclude the
Company, at its own expense and in its own name and behalf, from applying for
any tax exemption allowed by the federal
V-3
government, the State, or any political subdivision which grants or may grant
such tax exemption.
Section 5.4. Insurance Required. The Company shall obtain and maintain
insurance on the Project Facility and all parts thereof and operations conducted
therein and thereon in such manner and against such loss, damage and liability,
including liability to third parties, as is customary with property owners in
the same or similar business in the State. Without limiting the generality of
the foregoing sentence, such insurance shall include, without limitation:
(a) Public liability insurance insuring against any and all liability
or claims of liability arising out of, occasioned by, or resulting from any
accident or otherwise resulting in or about the Project Facility, in a minimum
amount of $5,000,000 for the death of or bodily injury to one person, $5,000,000
for the death of or bodily injury in any one accident or occurrence and
$5,000,000 for loss or damage to the property of any Person or Persons,
provided, however, that in the event the Company is unable at any time to obtain
such insurance in such amounts, the failure of the Company to obtain such
insurance shall not constitute a Default hereunder so long as its obtains such
insurance in such lesser amounts as is available;
(b) Property damage and broad form fire and extended coverage insurance
with respect to the Project Facility and insurance insuring against such other
hazards, casualties and contingencies as the Issuer and the Purchaser may
require, which insurance shall provide coverage at replacement cost and with no
provisions for coinsurance penalties and shall be in an amount equal to,
initially, $25,000,000, and within 30 days after the Closing Date, the lesser of
(i) $40,000,000, or (ii) the aggregate outstanding principal balance of the Loan
and all Senior Indebtedness; and
(c) If the Project Facility is required to be insured pursuant to the
Flood Disaster Protection Act of 1973 or the National Flood Insurance Act of
1968, and the regulations promulgated thereunder, flood insurance with respect
to the Project Facility in an amount not less than $10,000,000 or the maximum
limit of coverage available, whichever amount is less.
Section 5.5. Additional Provisions Concerning Insurance. (a) Any
insurance required hereunder shall be written by insurance companies authorized
or licensed to do business in the State and shall be on such forms and written
by such companies as shall be approved by the Issuer and the Purchaser. Such
insurance coverage may be effected under overall blanket or excess coverage
policies of the Company provided that the Company shall not be deemed to be a
co-insurer thereunder. Each insurance policy maintained pursuant to this
Agreement shall contain a provision to the effect that such
V-4
policy shall not be cancelled or altered unless the Trustee is notified at least
fifteen (15) days prior to such cancellation or alteration. At least thirty (30)
days prior to the expiration of any such policy, the Company shall furnish
evidence satisfactory to the Trustee that such policy has been renewed or
replaced or is no longer required by this Agreement.
(b) Each insurance policy maintained pursuant to this Agreement and
providing insurance against loss of or damage to property shall be written or
endorsed so as to name the Trustee as an additional insured as its interests may
appear and to have the proceeds thereof payable directly to the Trustee as loss
payee. Each policy providing public liability coverage shall be written or
endorsed so as to name the Trustee as an additional insured.
(c) Duplicate copies of any insurance policies and evidence of renewal
or replacement thereof shall promptly be furnished to the Trustee for its
records. Evidence of the payment of the first year's premiums on such policies
shall be delivered to the Trustee on the Closing Date. Thereafter, the Company
shall deliver to the Trustee evidence of the payment of all additional premiums
prior to the expiration or renewal dates of all such policies.
(d) In the event of loss or damage to the Project Facility, the Net
Proceeds of any insurance provided hereunder shall be deposited with the
Trustee and applied as set forth in Article VI hereof, and in the event of a
public liability occurrence, the Net Proceeds of any insurance provided
hereunder shall be applied towards satisfaction of such liability.
Section 5.6. Worker's Compensation. The Company shall comply with the
laws of the State relating to Worker's Compensation and similar worker's
protection laws.
[END OF ARTICLE V]
V-5
ARTICLE VI
DAMAGE, DESTRUCTION AND CONDEMNATION
Section 6.1. Damage, Destruction and Condemnation. Unless the company
shall have exercised its option to terminate this Agreement pursuant to the
provisions of paragraphs (A) or (B) of Article X hereof, if prior to full
payment of the Series G Bonds (or prior to provision for payment thereof having
been made in accordance with the provisions of the Indenture) (i) the Project or
any portion thereof is destroyed (in whole or in part) or is damaged by fire or
other casualty or (ii) title to or any interest in, or the temporary use of, the
Project or any part thereof shall be taken under the exercise of the power of
eminent domain by any governmental body or by any person, firm or corporation
acting under governmental authority, the Company shall be obligated to continue
to pay the amounts specified in Section 4.2 hereof.
Section 6.2. Application of Net Proceeds. The Net Proceeds of any
insurance proceeds or condemnation award resulting from any event described in
Section 6.1 hereof shall be immediately deposited in a separate trust fund to be
held by the Trustee. All Net Proceeds so deposited shall be applied in one or
more of the following ways as shall be elected by the Company in a written
notice to the Trustee, which notice shall be received by the Trustee within 60
days after the receipt by the company or the Trustee, as the case may be, of the
Net Proceeds:
(a) To the prompt repair, restoration, modification or improvement of
the Project Facility, and the Issuer has, in the Indenture, authorized and
directed the Trustee to make disbursements from such separate trust fund for
such purposes. Such disbursements shall be made by the Trustee only upon
receipt of Requisitions therefor. Any balance of the Net Proceeds remaining
after such work has been completed shall be transferred into the Bond fund to be
applied in accordance with subsection (b) of this Section, or if the Bonds have
been fully paid (or provisions for payment thereof has been made in accordance
with the provisions of the Indenture), any balance remaining in such separate
trust fund shall be paid in accordance with Section 6.11 of the Indenture.
(b) To the redemption at par of the Bonds and the Series H Bonds, pro
rata in proportion to their respective then outstanding principal balances, on
the earliest practicable redemption date as specified in a written notice by the
Company to the Trustee, provided that no part of such Net Proceeds may be
applied for such redemption unless (1) all of the Bonds are to be redeemed in
accordance with the Indenture upon termination of this Agreement pursuant to
clauses (A) or (B) of Article X hereof or (2) in the event that less than all of
the Bonds are to be redeemed, the Company shall furnish to the Trustee a
certificate of a Company
VI-1
Representative stating that (i) the property forming the part of the Project
Facility that was damaged or destroyed by such casualty or was taken by such
condemnation proceedings is not essential to the use, operation or possession of
the Project by the Company or (ii) the Project Facility has been repaired,
restored, modified or improved to operate as designed.
(c) If the Company elects to repair, restore, modify or improve the
Project Facility or pay the cost thereof and fails to do so diligently, the
Issuer or the Trustee may (but shall be under no obligation to) do so on behalf
of the Company and recover the reasonable costs thereof from the company, less
the amount, if any, collected from Net Proceeds on account of such costs. No
such payment by the Trustee or the Issuer shall affect or impair any rights of
the Issuer hereunder or of the Trustee or the Owners under the Indenture arising
as a result of such failure by the Company.
(d) If the Company fails to give the notice required under subsection
(a) of this Section within the specified time period, the Issuer or the Trustee,
upon notice to the other and to the Company, may direct the Company to take
either of the actions therein described and the Company shall be obligated to
take such action.
(e) Notwithstanding the foregoing the Net Proceeds from a certain
action pending in the Superior Court of New Jersey Law Division, Camden County,
Docket No. L-8037-90, and entitled "State of New Jersey, by the Commissioner of
Transportation, Plaintiff x. Xxxx Hauling and Warehousing System, Inc., a
corporation of Pennsylvania, et al., Defendants" shall be paid directly to the
Company and shall not be subject to the provisions of Paragraphs (a) through (d)
of this Section 6.2.
Section 6.3. Insufficiency of Net Proceeds. If the Net Proceeds are
insufficient to pay in full the cost of any repair, restoration, modification or
improvement referred to in Section 6.2(a) hereof, the Company will nonetheless
complete the work and will pay any cost in excess of the amount of the Net
Proceeds held by the Trustee. The Company agrees that if by reason of any such
insufficiency of the Net Proceeds, the Company shall make any payments pursuant
to the provisions of this Section 6.3, the Company shall not be entitled to any
reimbursement therefor from the Issuer, the Trustee or the Owners, nor shall the
Company be entitled to any diminution of the amounts payable under Section 4.2
hereof.
[END OF ARTICLE VI]
VI-2
ARTICLE VII
SPECIAL COVENANTS
Section 7.1. No Warranty of Condition or Suitability by Issuer. THE
ISSUER MAKES NO WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO THE PROJECT OR THE
CONDITION THEREOF, OR THAT THE PROJECT WILL BE SUITABLE FOR THE PURPOSES OR
NEEDS OF THE COMPANY. THE ISSUER MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, THAT THE COMPANY WILL HAVE QUIET AND PEACEFUL POSSESSION OF THE
PROJECT. THE ISSUER MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED,
WITH RESPECT TO THE MERCHANTABILITY, CONDITION OR WORKMANSHIP OR ANY PART OF THE
PROJECT OR ITS SUITABILITY FOR THE COMPANY'S PURPOSES.
Section 7.2. Access to the Project. The Company agrees that the Issuer,
the Trustee, the Purchaser and their duly authorized agents, attorneys, experts,
engineers, accountants and representatives shall have the right to inspect the
Project at all reasonable times and on reasonable notice. The Issuer, the
Trustee and their duly authorized agents shall also be permitted, at all
reasonable times, to examine the books and records of the Company with respect
to the Project.
Section 7.3. Further Assurances and Corrective Instruments. The Issuer
and the Company agree that they will, from time to time, execute, acknowledge
and deliver, or cause to be executed, acknowledged and delivered, such
supplements hereto and such further instruments as may reasonably be required
for carrying out the expressed intention of this Agreement and the other Loan
Document.
Section 7.4. Issuer and Company Representatives. Whenever under the
provisions of this Agreement the approval of the Issuer or the Company is
required or the Issuer or the Company is required to take some action at the
request of the other, such approval or such request shall be given for the
Issuer by an Issuer Representative and for the Company by a Company
Representative. The Trustee shall be authorized to act on any such approval or
request.
Section 7.5. Financing Statements. The Company agrees to execute and
file or cause to be executed and filed any and all financing statements or
amendments thereof or continuation statements necessary to perfect and continue
the perfection of the security interests granted in the Mortgage and the
Indenture. Within three months of the expiration date of any financing
statements or continuation statements, the Company shall furnish to the Trustee
evidence satisfactory to the Trustee that such filing has taken place. The
Company shall pay all reasonable costs of the preparation and filing of such
instruments.
VII-1
Section 7.6. Compliance with Code. The Company shall at all times do
and perform all acts and things permitted by law and necessary or desirable in
order to assure that interest paid on the Bonds shall for the purposes of
federal income taxation be excludable from the gross income of the holders of
the Bonds, except in the event that any such holder is a Substantial User or
Related Person thereto. For purposes of this Section 7.6, any and all actions of
any Related Person shall be deemed to be actions of the Company. In addition,
any and all actions to be undertaken by the Company or by any other person as to
which the Issuer or the Trustee must, pursuant to the terms hereof, consent or
approve in advance, shall be deemed to be the actions of the Company or such
other person (and not the actions of the Issuer or the Trustee). The Company
shall cause any Related Person to comply with all of the provisions of this
Section as to its own operations. A breach of this Section 7.6 shall not
constitute a Default but shall be governed by the provisions of Section 3.01 of
the Indenture.
Section 7.7. Further Assurances. The Issuer and the Company shall, from
time to time, execute, acknowledge and deliver, or cause to be executed,
acknowledged and delivered, such supplements hereto and such further instruments
as may reasonably be required for carrying out the intention of or facilitating
the performance of this Loan Agreement and the other Loan Documents.
Section 7.8. [Intentionally Omitted]
Section 7.9. Annual Certificate. On each anniversary hereof, the
Company shall furnish to the Issuer, with copies to the Purchaser and the
Trustee, the following:
(a) a certificate indicating whether or not the Company is aware of any
condition, event or act which constitutes a Default, or which would constitute a
Default with the giving of notice or passage of time, under any of the Loan
Documents;
(b) a written description of the present use of the Project and a
description of any anticipated material change in the use of the Project or in
the number of employees employed at the Project, and
(c) a report from every entity that leases or occupies space at the
Project indicating the number of persons the entity employs at the Project in
the form annexed hereto as Exhibit E.
[END OF ARTICLE VII]
VII-2
ARTICLE VIII
PROJECT USERS; MAINTAIN EXISTENCE; MERGE, SELL, TRANSFER;
INDEMNIFICATION; REDEMPTION
Section 8.1. Project Users; Maintain Existence; Merge, Sell, Transfer.
(a) Upon the request of the Issuer from time to time, the Company shall
cause a Project Occupant Information Form to be submitted to the Issuer by every
prospective lessee, sublessee or lease assignee of all or any part of the
Project. The Company shall not permit any such leasing, subleasing or assigning
of leases of all or any part of the Project that would impair the excludability
of interest paid on the Series G Bonds from the gross income of the Owners
thereof for the purposes of federal income taxation, or that would impair the
ability of the Company to operate the Project, or would cause the Project not to
be operated, as an authorized project under the Act.
(b) The Company shall maintain its existence as a legal entity and
shall not sell, assign, transfer, or otherwise dispose of the Project or
substantially all of its assets. The Company may merge with or into or
consolidate with another entity, and the Project or this Agreement may be
transferred without violating this Section 8.1(b) provided (i) the Company
causes the proposed surviving, resulting or transferee company to furnish the
Issuer with a Change of Ownership Information Form: (ii) the net worth of the
surviving, resulting or transferee company following the merger, consolidation
or transfer is equal to or greater than the net worth of the Company immediately
preceding the merger, consolidation or transfer; (iii) any litigation or
investigations in which the surviving, resulting or transferee company or its
officers and directors are involved, and any court, administrative or other
orders to which the surviving, resulting or transferee company or its officers
and directors are subject, relate to matters arising in the ordinary course of
business; (iv) the merger, consolidation or transfer shall not impair the
excludability of interest paid on the Series G Bonds from the gross income of
the Owners thereof for purposes of federal income taxation pursuant to an
opinion of Bond Counsel; (v) the survivng, resulting or transferee company
assumes in writing the obligations of the Company under this Agreement and the
Loan Documents, and (vi) after the merger, consolidation or transfer the Project
shall be operated as an authorized project under the Act.
(c) The obligations of the Company under this Section 8.1 shall be in
addition to its obligations under Section 2.4(d).
VIII-1
Section 8.2. Release and Indemnification Covenants.
(a) The Issuer, the members, agents, servants, officers or employees
thereof, the Trustee and the Purchaser shall not be liable for (1) any loss,
damage or injury to, or death of, any person occurring at or about or resulting
from any defect in the Project Facility, (2) any damage or injury to the persons
or property of the Company or any user of the Project Facility, or their
officers, agents, servants or employees, or any other person who may be about
the Project Facility, caused by an act of negligence of any person (other than
the Issuer or its members, officers, agents, servants and employees, the Trustee
and the Purchaser, as the case may be), or (3) any costs, expenses or damages
incurred as a result of any lawsuit commenced because of action taken in good
faith by the Issuer in connection with the Project and the Project Facility, and
the Company shall and does hereby indemnify, protect, defend and hold harmless
the Issuer, the members, agents, servants, officers or employees thereof, the
Trustee and the Purchaser from and against any and all losses, damages,
injuries, costs or expenses (including reasonable attorneys fees) and from and
against any and all claims, demands, suits, actions or other proceedings
whatsoever, brought by any person or entity whatsoever arising or purportedly
arising from any of the foregoing.
(b) The Company shall and does hereby indemnify, protect, defend and
hold harmless the Issuer, the State and every agency of the State, the Trustee,
any Person who controls the Issuer, the State or any agency of the State or the
Trustee (within the meaning of Section 15 of the Securities Act of 1933, as
amended) and any member, officer, director, official, employee and attorney of
the Issuer, the State and every agency of the State and the Trustee (each an
"Indemnified Party"), from and against any and all losses, damages, injuries,
costs or expenses (including reasonable attorneys fees) and from and against any
and all claims, demands, suits, actions or other proceedings whatsover, brought
by any person or entity whatsoever (except the Company) and arising or
purportedly arising fom this Agreement, the Indenture or the Bonds or from the
performance of the Indenture.
(c) The Company agrees to and hereby does indemnify and hold harmless
the Indemnified Parties and the Purchaser from and against any and all losses,
claims, damages, liabilities, costs or expenses, including reasonable attorneys'
fees suffered or incurred by any of the Indemnified Parties or the Purchaser and
caused by, relating to, arising out of, resulting from or in any way connected
with (i) the condition, use, possession, conduct, management, planning, design,
acquisition, construction, installation, financing (in the case of financing, as
to the Indemnified Parties only) or sale of the Project or any part thereof
including without limitation the Indemnified Matters referenced in the next
paragraph; (ii) any untrue statement or alleged untrue statement of
VIII-2
a material fact contained in the Application or any other information submitted
or to be submitted by or on behalf of the Company to the Indemnified Parties or
the Trustee in connection with the transactions contemplated hereby or the
issuance and purchase of the Bonds; or (iii) any omission or alleged omission of
a material fact necessary to be stated thereon in order to make such statements
to the Indemnified Party not misleading or incomplete.
(d) The Company covenants and agrees, at its sole cost and expense, to
indemnify, protect and save the Indemnified Parties and the Purchaser (the
"Indemnitees") harmless against and from any and all damages, losses,
liabilities, obligations, penalties, claims, litigation, demands, defenses,
judgments, suits, proceedings, costs, disbursements or expenses (including,
without limitation, attorneys' and experts' reasonable fees and disbursements)
of any kind or of any nature whatsoever (collectively, the "Indemnified
Matters") which may at any time be imposed upon, incurred by or asserted or
awarded against Indemnitees and arising from or out of:
(1) any hazardous materials, as defined under any Laws as defined
below, on, in, under or affecting all or any portion of the property subject to
the Mortgage or any surrounding areas (but in the case of hazardous materials in
surrounding areas, only if the source of such materials is or is alleged to be
the Company or the mortgaged property), or
(2) the enforcement of this paragraph or the assertion by the Company
of any defense to its obligations hereunder (except the successful defense of
actual performance not subject to further appeal),
whether any of such matters arise before or after the Closing Date or before or
after foreclosure of the Mortgage or other taking of title to the Company's
interest in all or any portion of the mortgaged property by Indemnitees or any
affiliate of Indemnitees. Indemnified Matter shall include, without
limitation, all of the following: (i) the costs of removal of any and all
hazardous materials from all or any portion of the property or any surrounding
areas (except that the indemnity provided for under this paragraph shall not
cover the costs of such removal unless either (a) such removal is required by
any federal or state law, regulation or regulatory agency ("Laws") or (b) any
present or future use, operation, development, construction, alteration or
reconstruction of all or any portion of the mortgaged property is or would be
conditioned in any way upon, or is or would be limited in any way until the
completion of, such removal in accordance with any Laws), (ii) additional costs
required to take necessary precautions as required by law to protect against
the release of hazardous materials on, in, under or affecting the mortgaged
property into the air, any body of water, any other public domain
VIII-3
or any surrounding areas and (iii) costs incurred to comply, in connection with
all or any portion of the mortgaged property or any surrounding areas, with all
applicable Laws with respect to hazardous materials. If any Indemnitee or any
affiliate of an Indemnitee takes title to the Company's interest in the
mortgaged property at a foreclosure sale, at a sale pursuant to a power of sale
under the Mortgage or by deed in lieu of foreclosure or otherwise, then the
indemnity provided for under this paragraph shall not apply to hazardous
materials which are initially placed on, in or under all or any portion of the
mortgaged property after the date Indemnitee or such affiliate so takes title to
such interest in the Property. At any time during the six months prior to any
such foreclosure sale, sale pursuant to a power of sale under the Mortgage or by
deed in lieu of foreclosure or otherwise by which any Indemnitee or affiliate
takes title to such interest in the mortgage property, such Indemnitee or
affiliate shall have the right, at its sole discretion and at the Company's sole
cost and expense, to have performed an environmental site assessment of the
mortgaged property to determine whether any hazardous materials are present.
(e) In case any action shall be brought against one or more of the
Indemnified Parties or the Purchaser based upon any of the above and in respect
of which indemnity may be sought against the Company, such Indemnified Parties
or the Purchaser shall promptly notify the Company in writing, and the Company
shall assume the defense thereof, including the employment of counsel
satisfactory to the Indemnified Parties, the payment of all expenses and the
right to negotiate and consent to settlement. Any one or more of the Indemnified
Parties or the Purchaser shall have the right to employ separate counsel at the
Company's expense in any such action and to participate in the defense thereof.
The Company shall not be liable for any settlement of any such action effected
without its consent, but if settled with the consent of the Company or if there
be a final judgment for the claimant in any such action, the Company shall
discharge the liability and indemnify and hold harmless the Indemnified Parties
and the Purchaser from and against any loss or liability by reason of such
settlement or judgment. The provision of this Section 8.2 shall survive the
repayment of the Bonds.
Section 8.3. Redemption of Bonds. The Company shall have and is hereby
granted the option to cause all or a portion of the Bonds to be redeemed at the
times, at the prices and in the manner permitted by the Indenture. The Issuer,
at the request of the Company, shall forthwith take all steps (other than the
payment of the money required for such redemption) necessary under the
applicable redemption provisions of the Indenture to effect redemption of all or
part of the Outstanding Bonds, as may be specified by the Company, on the date
established for such redemption.
Section 8.4. Issuer to Grant Security Interest to Trustee. The parties
hereto agree that pursuant to the Indenture,
VIII-4
the Issuer shall assign to the Trustee, in order to secure payment of the Bonds,
all of the Issuer's right, title, and interest in and to this Agreement, except
for certain of the Issuer's rights as are expressly reserved pursuant to the
granting clauses of the Indenture.
Section 8.5. Indemnification of Trustee. The Company shall be and hereby
agrees to indemnify the Trustee for, and hold the Trustee harmless against, any
loss, liability or expense (including the costs and expenses of defending
against any claim of liability) incurred without gross negligence or willful
misconduct by the Trustee and arising out of or in connection with its acting as
Trustee under the Indenture, the Mortgage or any other Loan Document.
VIII-5
ARTICLE IX
DEFAULTS AND REMEDIES
Section 9.1. Defaults Defined. The following shall be "Defaults" under this
Agreement and the term "Default" shall mean, whenever it is used in this
Agreement, any one or more of the following events:
(a) Failure by the Company to pay any amount required to be paid under
subsection (a) of Section 4.2 hereof when due.
(b) Failure by the Company or any of its Subsidiaries or Affiliates to
observe and perform any covenant, condition or agreement on its part to be
observed or performed under this Agreement or the other Loan Documents, other
than as referred to in Section 9.1 (a) or 9.1 (l), for a period of ninety (90)
days after it first becomes known to any officer of the Company.
(c) The occurrence of a Default under the Indenture or any other Loan
Document.
(d) The occurrence of a Default under the Series H Agreement or the other
Series H Loan Documents.
(e) If any warranty or representation by or on behalf of the Company
contained in this Agreement, the Indenture, the Bond Purchase Agreement, the
Loan Documents, the Guaranty, the Series H Loan Documents or in any instrument
or certificate furnished in compliance with same proves false or misleading in
any material respect as of the time it was made.
(f) Failure by the Company or any of its Subsidiaries or Affiliates to make
one or more payments due with respect to aggregate Indebtedness exceeding
$500,000 within any applicable periods for cure; or if any event shall occur or
any condition shall exist, the effect of which event or condition is to cause
more than $500,000 of aggregate Indebtedness or other securities of the Company
or any Subsidiary of Affiliate to become due or subject to mandatory redemption
or repurchase before its (or their) stated maturity or before its (or their)
regularly scheduled dates of payment, redemption or purchase.
(g) If a custodian, receiver or liquidator is appointed for the Company or
any Subsidiary or Affiliate or the Company or any Subsidiary or Affiliate is
adjudicated bankrupt or insolvent; or an order or relief is entered under the
Federal Bankruptcy Code against the Company or any Subsidiary or Affiliate or
any of its property is sequestered by court order and the order remains in
effect for more than 60 days; or a petition is filed is against the Company or
Subsidiary or Affiliate under any bankruptcy,
IX-1
reorganization, arrangement, insolvency, readjustment of debt, dissolution or
liquidation law of any jurisdiction, whether now or subsequently in effect, and
is not dismissed within 60 days after filing.
(h) If the Company or any Subsidiary or Affiliate commences a voluntary
case or files a petition in voluntary bankruptcy where seeking relief under any
provision of the Federal Bankruptcy Code or any other bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, dissolution or
liquidation law of any jurisdiction, whether now or subsequently in effect; or
consents to the filing of any petition against it under any such law; or applies
for or consents to the appointment of or taking possession by a custodian,
receiver, trustee or liquidator of the Company or any Subsidiary or Affiliate or
of all or any part of its property; or makes an assignment for the benefit of
its creditors; or admits in writing its inability to pay its debt generally as
they become due.
(i) Any of the Loan Documents shall not be, or shall cease to be, the
legal, valid, binding and enforceable obligations of each of the parties thereto
in accordance with its terms, or any of the Loan Documents shall not be or shall
cease to be in full force and effect.
(j) There shall exist any Subsidiary or Affiliate which has not, within 90
days after becoming a Subsidiary or Affiliate, duly authorized, executed and
delivered to the Trustee, a counterpart of the Guaranty or a document evidencing
its agreement to be bound by the Guaranty which is the legal, valid, binding and
enforceable obligation of such Subsidiary or Affiliate in accordance with its
terms.
(k) There shall occur a foreclosure with respect to any of the following
mortgages, as amended and supplemented:
(i) Mortgage dated March 15, 1984 between the Company and the City of
Gloucester City,
(ii) Mortgage dated April 18, 1984 between the Company and the City of
Gloucester City,
(iii) Mortgage dated August 22, 1984 between the Company and the City
of Gloucester City.
(iv) Mortgage and Security Agreement dated as of August 1, 1986
between the Company and Bankers Trust Company, as trustee.
(v) Mortgage and Security Agreement dated as of December 1, 1986
between the Company and Bankers Trust Company, as trustee, or
IX-2
(vi) The Series H Mortgage.
(l) Failure by the Company or any of its Subsidiaries or Affiliates to
observe and perform the covenant set forth in Section 2.4 (d).
Section 9.2. Trustee's Remedies on Default. Whenever any Default referred
to in Section 9.1 hereof shall have happened and be continuing, the Trustee may
(subject in the case of the Trustee to its mandatory obligations upon the
occurrence of certain Defaults) take one or any combination of the following
remedial steps:
(a) If the Trustee has declared the Bonds immediately due and payable
pursuant to Section 8.02 of the Indenture, by written notice to the Company,
declare an amount equal to all amounts then due and payable on the Bonds,
whether by acceleration of maturity (as provided in the Indenture) or otherwise,
to be immediately due and payable as liquidated damages under this Agreement and
not as a penalty, whereupon the same shall become immediately due and payable;
(b) Have reasonable access to and inspect, examine and make copies of the
books and records and any and all accounts, data and income tax and other tax
returns of the Company during regular business hours of the Company if
reasonably necessary in the opinion of the Trustee; or
(c) Take whatever action at law or in equity may appear necessary or
desirable to collect the amounts then due and thereafter to become due, or to
enforce performance and observance of any obligation, agreement or covenant of
the Company under this Agreement, the Indenture and the Loan Documents.
(d) Exercise any and all rights and remedies of a creditor or secured party
under the Uniform Commercial Code or other applicable law.
Any amounts collected pursuant to action taken under this Section shall be
paid into the Bond Fund and applied in accordance with the provisions of the
Indenture. The rights specified in this Section 9.2 are in addition to, and not
in limitation of, any other obligations of the Company which may arise upon a
default or acceleration in respect of the Bonds, including without limitation,
under Section 4.2 hereof.
Section 9.3. Issuer's Remedies on Default.
(A) The occurrence of a Default referred to in Section 9.1 (b) or 9.1(e)
hereof (other than a default resulting from a breach of the covenant contained
in Section 2.4 (e) hereof) shall constitute an Event of Cancellation hereunder,
and at any time
IX-3
thereafter during the continuance of such Event of Cancellation, the Issuer may,
by written notice in accordance with the provisions of Section 11.2 hereof to
the Trustee, call and cancel the Series G Bonds. The trustee and any assigns and
the Company hereby expressly agree that the Series G Bonds may be called and
cancelled by the Issuer in the manner provided above, and upon the Cancellation
Date specified in the notice from the Issuer, which shall be at least 30 and no
more than 60 days after the giving of such notice, the Series G Bonds will be
called and cancelled, and the Trustee may, at its option, declare the
obligations evidenced by this Agreement immediately due and payable. The Trustee
will deliver the Series G Bonds to the Issuer for cancellation upon the
Cancellation Date, but even if such delivery does not occur, the Series G Bonds
will be considered cancelled and of no further force or effect on the
Cancellation Date.
Subject to the provisions of Section 9.4. hereof, the remedies set forth in
this Section 9.3 are the sole and exclusive remedies of the Issuer in the event
of an occurrence of an Event of Cancellation as set forth herein.
(B) Upon the Cancellation Date, this Agreement will evidence the
indebtedness from the Company to the Trustee and the Bondholders and, in the
event the payment obligations hereunder are not accelerated by the Trustee as
hereinabove provided, all of the terms of this Agreement, including the interest
rate and payment terms herein specified, will control the obligations of the
Company to the Trustee and the Bondholders except that from the Cancellation
Date, the per annum interest rate will remain 8.4% for a period of six (6)
months, after which the interest rate will change to the greater or (i) two
percent (2%) in excess of the Prime Rate, or (ii) the quotient obtained by
dividing 8.4% by the difference between one (1) and the highest marginal federal
income tax rate at the time in effect. The issuer will no longer be a party to
the transaction and shall have no further rights with respect thereto and shall
be released of any and all debts, liabilities and obligations to any other party
under this Agreement, the Series G Bonds or any other Loan Document. The Issuer
and the Trustee will execute and deliver to each other such other documents and
agreements as the other may reasonably request in order to evidence the
cancellation of the Series G Bonds and the withdrawal of the Issuer from the
transaction.
(C) Upon cancellation of the Series G Bonds pursuant to the provisions
hereof, the Issuer hereby agrees that the Trustee shall automatically be vested
with all of the Issuer's right, title and interest in and to the Loan Documents.
Any amounts remaining in the Bond Fund on the Cancellation Date after the
deduction therefrom of amounts which may be due the Issuer pursuant to the terms
of this Agreement are hereby assigned to the Trustee to be disbursed in
accordance with the Indenture.
IX-4
(D) In the event that there is a dispute among any of the parties
concerning the right of the Issuer to cancel the Series G Bonds pursuant to the
provisions of this Section 9.3, the Company will nevertheless comply with all of
the terms of this Agreement as hereinabove amended and make all payments
required hereunder from and after the Cancellation Date directly to the Trustee
at the new interest rate. If a court of competent jurisdiction determines
finally that the Issuer's attempted cancellation of the Series G Bonds violated
the terms of this Agreement, the Series G Bonds will be reinstated in accordance
with the final order of the court, but until such final order is made, the
Company will continue to comply with the terms of this Agreement as hereinabove
amended. Any overpayment by the Company will be returned to it by the Trustee
upon reinstatement of the Series G Bonds.
Section 9.4. Specific Performance. In addition to the rights and remedies
provided for in Section 9.2 hereof, if the Company commits a breach or threatens
to commit a breach of any of the provisions of this Agreement, the Indenture or
the Loan Documents, the Issuer and the Trustee shall each have the right,
without posting bond or other security, to seek injunctive relief or specific
performance, it being acknowledged and agreed that any such breach or threatened
breach will cause irreparable injury to the Issuer and the Trustee and that
money damages will not provide an adequate remedy.
Any amounts collected pursuant to action taken under this Section shall be
paid into the Bond Fund and applied in accordance with the provisions of the
Indenture.
Section 9.5. No Remedy Exclusive. Subject to Section 9.02 of the
Indenture, no remedy herein conferred upon or reserved to the Issuer or the
Trustee is intended to be exclusive of any other available remedy or remedies,
but each and every such remedy shall be cumulative and shall be in addition to
every other remedy given under this Agreement or now or hereafter existing at
law or in equity. No delay or omission to exercise any right or power accruing
upon any Default shall impair any such right or power or shall be construed to
be a waiver thereof, but any such right or power may be exercised from time to
time and as often as may be deemed expedient. In order to entitle the Issuer or
the Trustee to exercise any remedy reserved to it in this Article, it shall not
be necessary to give any notice, other than such notice as may be required in
this Article. Such rights and remedies as are given to the Issuer hereunder
shall also extend to the Trustee, and the Trustee and the Owners of the Bonds,
subject to the provisions of the Indenture, shall be entitled to the benefit of
all covenants and agreements herein contained.
Section 9.6. Agreement to Pay Attorneys' Fees and Expenses. In the event
the Company should default under any of the provisions of this Agreement and the
Issuer should employ attorneys
IX-5
or incur other expenses for the collection of payments required hereunder or the
enforcement of performance or observance of any obligation or agreement on the
part of the Company herein contained, the Company agrees that it will on demand
therefor pay to the Issuer the reasonable fee of such attorneys and such other
expenses so incurred by the Issuer.
Section 9.7. No Additional Waiver Implied by one Waiver. In the event any
agreement contained in this Agreement should be breached by either party and
thereafter waived by the other party, such waiver shall be limited to the
particular breach so waived and shall not be deemed to waive any other breach
hereunder.
IX-6
ARTICLE X
OPTIONS TO TERMINATE AGREEMENT
The Company shall have, and is hereby granted, the option to terminate its
obligations under this Agreement if any of the events set forth below shall
occur:
(A) The Project shall have been damaged or destroyed (1) to such extent
that it cannot, in the Company's reasonable judgment, be reasonably restored
within a period of six (6) months to the condition thereof immediately preceding
such damage or destruction, and (2) to such extent that the Company is thereby
prevented, in the Company's reasonable judgment, from carrying on its normal
operations at the Project for a period of six (6) months or more.
(B) Title to, or the temporary use for a period of six (6) months or more
of, all or substantially all the Project, or such part thereof as shall
materially interfere, in the Company's reasonable judgment, with the operation
of the Project for the purpose for which the Project is designed, shall have
been taken under the exercise of the power of eminent domain by any governmental
body or by any person, firm or corporation acting under governmental authority
(including such a taking or takings as results in the Company being thereby
prevented from carrying on its normal operations at the Project for a period of
six (6) months or more).
(C) Changes which the Company cannot reasonably control or overcome in the
economic availability of materials, supplies, labor, equipment and other
properties and things necessary for the efficient operation of the Project for
the purposes contemplated by this Agreement shall have occurred, or
technological or other changes shall have occurred which in the reasonable
judgment of the Company render the continued operation of the Project uneconomic
for such purposes.
(D) As a result of any changes in the Constitution of the State or the
Constitution of the United States of America or of legislative or administrative
action (whether state or federal) or by final decree, judgment or order of any
court or administrative body (whether state or federal) entered after the
contest thereof by the Company in good faith, this Agreement shall have become
void or unenforceable or impossible of performance in accordance with the intent
and purposes of the parties as expressed in this Agreement, or unreasonable
burdens or excessive liabilities shall have been imposed on the Company in
respect to the Project, including, without limitation, federal, state or other
ad valorem, property, income or other taxes not being imposed on the date of
this Agreement. To exercise such option, the Company shall within
X-1
ninety (90) days following the event authorizing such termination, give written
notice to the Issuer and the Trustee and shall specify therein the date of
redemption of Bonds pursuant to Section 3.01 of the Indenture, which date shall
be the next interest payment date in respect of the Bonds for which the required
notice of redemption can practicably be given. In accordance with the terms of
the indenture, the Company shall make arrangements for the Trustee to give the
required notice of redemption. In order to exercise such option, the Company
shall pay, or cause to be paid, on or prior to the applicable redemption date,
to the Trustee, an amount equal to the sum of the following:
(1) An amount of money which, when added to the amount then on deposit and
available in the Bond Fund, will be sufficient to retire and redeem all the
Outstanding Bonds on the earliest possible redemption date after notice as
provided in the Indenture, including, without limitation, the principal amount
thereof, all interest to accrue to said redemption date, and the applicable
redemption premium, if any, plus
(2) An amount of money equal to the Trustee's fees and expenses under the
Indenture accrued and to accrue until such final payment and redemption of the
Bonds, plus
(3) An amount of money equal to the Issuer's fees and expenses under this
Agreement accrued and to accrue until such final payment and redemption of the
Bonds.
In addition, the Company shall simultaneously exercise its option to
terminate its obligations under the Series H Agreement in accordance with
Article X thereof.
[END OF ARTICLE X]
X-2
ARTICLE XI
MISCELLANEOUS
Section 11.1. Term of Agreement. This Agreement shall remain in full force
and effect from the date hereof to and including such time as all of the Series
G Bonds and the fees and expenses of the Issuer and the Trustee and all amounts
payable hereunder shall have been fully paid or provision made for such payment.
Section 11.2. Notices. All notices, certificates or other communications
hereunder shall be sufficiently given and shall be deemed given when delivered
or mailed by registered or certified mail, postage prepaid, addressed as
follows: if to the Issuer, to 000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxx Xxxxx One -- CN
990, Xxxxxxx, Xxx Xxxxxx 00000, Attention: Executive Director; if to the
Trustee, to Mellon Bank, N.A., One Mellon Bank Center, Room 3440, Xxxxxxxxxx,
Xxxxxxxxxxxx 00000, Attention: Corporate Trust Division; if to the Company, to
Xxxx Hauling and Warehousing System, Inc., X.X. Xxx 0000, Xxxxxxxxxxxx,
Xxxxxxxxxxxx 00000, Attention: Xx. Xxxxxxx Xxxxxx, Vice President; and if to the
Purchasers, to Fidelity Aggressive Tax Free Portfolio and Fidelity Spartan
Municipal Income Portfolio c/o Fidelity Management and Research Company, Inc.,
00 Xxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xx. Xxxxx Xxxxxx.
A duplicate copy of each notice, certificate or other communication given
hereunder by the Issuer or the Company shall also be given to the Trustee. The
Issuer, the Company, the Trustee and the Purchaser may, by written notice given
hereunder, designate any further or different addresses to which subsequent
notices, certificates or other communications shall be sent.
Section 11.3. Binding Effect. This Agreement shall inure to the benefit of
and shall be binding upon the Issuer, the Company, the Trustee, the Owners of
the Bonds and their respective successors and assigns, subject, however, to the
limitations contained in Section 2.1(b) hereof.
Section 11.4. Severability. In the event any provision of this Agreement
shall be held invalid or unenforceable by any court of competent jurisdiction,
such holding shall not invalidate or render unenforceable any other provision
hereof.
Section 11.5. Amounts Remaining in Funds. Subject to the provisions of
Section 5.12 of the Indenture, it is agreed by the parties hereto that any
amounts remaining in the Bond Fund, the Project Fund, or any other fund created
under the Indenture upon expiration or earlier termination of this Agreement and
the Series H Agreement, as provided in this Agreement, after payment in full of
the Bonds (or provision for payment thereof having been
XI-1
all amounts which may be due under the Bond Purchase Agreement, the Mortgage,
any Loan Document, the Guaranty or any Series H Loan Document, shall belong to
and be paid to the Company by the Trustee.
Section 11.6. Amendments, Changes and Modification. Subsequent to the
issuance of Bonds and prior to their payment in full (or provision for the
payment thereof having been made in accordance with the provisions of the
Indenture), and except as otherwise herein expressly provided, this Agreement
may not be effectively amended, changed, modified, altered or terminated without
the written consent of the Trustee in accordance with the provisions of the
Indenture.
Section 11.7. Execution in Counterparts. This Agreement may be
simultaneously executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same instrument.
Section 11.8. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State.
Section 11.9. Captions. The captions and headings in this Agreement are for
convenience only and in no way define, limit or describe the scope or intent of
any provisions or Sections of this Agreement.
IN WITNESS WHEREOF, the Issuer has caused this Agreement to be executed in
its name and the Company has caused this Agreement to be executed in its name
all as of the date first above written.
ATTEST: NEW JERSEY ECONOMIC DEVELOPMENT
AUTHORITY
/s/ Xxxxx X. Xxxxxxx, Xx. By: /s/ Xxxx X. Xxxxxxxx
------------------------- ------------------------
Xxxxx X. Xxxxxxx, Xx., Xxxx X. Xxxxxxxx
Asst. Sec. Chief Financial Officer
[SEAL]
ATTEST: XXXX HAULING AND WAREHOUSING
SYSTEM, INC.
/s/ Xxxx Xxxxx By: /s/ Xxxxxxx Xxxxxx
------------------------- ------------------------
Xxxx Xxxxx Xxxxxxx Xxxxxx
