LOAN AGREEMENT BY AND BETWEEN THE STATE OF NEW JERSEY, ACTING BY AND THROUGH THE NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION, AND MIDDLESEX WATER COMPANY DATED AS OF NOVEMBER 1, 2006
Exhibit
10.30
BY
AND BETWEEN
THE
STATE OF NEW JERSEY,
ACTING
BY AND THROUGH THE NEW JERSEY
DEPARTMENT
OF ENVIRONMENTAL PROTECTION,
AND
MIDDLESEX
WATER COMPANY
DATED
AS OF NOVEMBER 1, 2006
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ARTICLE
I
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DEFINITIONS
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ARTICLE
II
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REPRESENTATIONS
AND COVENANTS OF BORROWER
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ARTICLE
III
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LOAN
TO BORROWER; AMOUNTS PAYABLE; GENERAL
AGREEMENTS
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SECTION
3.05. Loan Agreement to Survive
Loan
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ARTICLE
IV
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ASSIGNMENT
OF LOAN AGREEMENT AND BORROWER BOND
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ARTICLE
V
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EVENTS
OF DEFAULT AND REMEDIES
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ARTICLE
VI
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MISCELLANEOUS
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NEW
JERSEY ENVIRONMENTAL INFRASTRUCTURE FUND LOAN AGREEMENT
THIS
LOAN AGREEMENT, made
and
entered into as of November 1, 2006, by and between THE STATE OF NEW JERSEY,
acting by and through the New Jersey Department of Environmental Protection,
and
the Borrower (capitalized terms used in this Loan Agreement shall have, unless
the context otherwise requires, the meanings ascribed thereto in Section 1.01
hereof);
WITNESSETH
THAT:
WHEREAS,
the
Borrower has, in accordance with the Regulations, made timely application to
the
State for a Loan to finance a portion of the Cost of the Project;
WHEREAS,
the
State
has approved the Borrower's application for a Loan from Federal Funds, if and
when received by and available to the State, and moneys from repayments of
loans
previously made from such Federal Funds, in the amount of the loan commitment
set forth in Exhibit A-2 attached hereto and made a part hereof to finance
a
portion of the Cost of the Project;
WHEREAS,
the
New
Jersey State Legislature has approved an appropriations act that authorizes
an
expenditure of said proceeds, Federal Funds or related moneys to finance a
portion of the Cost of the Project;
WHEREAS,
the
Borrower, in accordance with the Business Corporation Law and all other
applicable law, will issue a Borrower Bond to the State evidencing said Loan
at
the Loan Closing; and
WHEREAS,
in
accordance with the New Jersey Environmental Infrastructure Trust Act, P.L.
1985, c. 334, as amended, and the Regulations, the Borrower has been awarded
a
Trust Loan for a portion of the Cost of the Project plus, if applicable to
the
Borrower, capitalized interest on the Trust Loan, certain costs of issuance
and
bond insurance premium related thereto.
NOW,
THEREFORE, for
and
in consideration of the award of the Loan by the State, the Borrower agrees
to
complete the Project and to perform under this Loan Agreement in accordance
with
the conditions, covenants and procedures set forth herein and attached hereto
as
part hereof, as follows:
ARTICLE
I
DEFINITIONS
SECTION
1.01. Definitions.
The
following terms as used in this Loan Agreement shall, unless the context clearly
requires otherwise, have the following meanings:
"Administrative
Fee"
means an
annual fee of up to one percent (1.0%) of the initial principal amount of the
Loan or such lesser amount, if any, as may be authorized by any act of the
New
Jersey State Legislature and as the State may approve from time to
time.
"Authorized
Officer"
means,
in the case of the Borrower, any person or persons authorized pursuant to a
resolution of the board of directors of the Borrower to perform any act or
execute any document relating to the Loan, the Borrower Bond or this Loan
Agreement.
"Borrower"
means
the corporation that is a party to and is described in Schedule A to this Loan
Agreement, and its successors and assigns.
"Borrower
Bond"
means
the general obligation bond, note, debenture or other evidence of indebtedness
authorized, executed, attested and delivered by the Borrower to the State and
authenticated, if applicable, on behalf of the Borrower to evidence the Loan,
a
specimen of which is attached hereto as Exhibit D and made a part
hereof.
"Borrowers"
means
any other Local Government Unit or Private Entity (as such terms are defined
in
the Regulations) authorized to construct, operate and maintain Environmental
Infrastructure Facilities that have entered into Loan Agreements with the State
pursuant to which the State will make Loans to such recipients from Federal
Funds.
"Business
Corporation Law"
means
the "New Jersey Business Corporation Act", constituting Chapter 263 of the
Pamphlet Laws of 1968 of the State (codified at N.J.S.A. 14A:1-1 et
seq.),
as the
same may from time to time be amended and supplemented.
"Code"
means
the Internal Revenue Code of 1986, as the same may from time to time be amended
and supplemented, including any regulations promulgated thereunder, any
successor code thereto and any administrative or judicial interpretations
thereof.
"Cost"
means
those costs that are eligible, reasonable, necessary, allocable to the Project
and permitted by generally accepted accounting principles, including Allowances
and Building Costs (as defined in the Regulations), as shall be determined
on a
project-specific basis in accordance with the Regulations as set forth in
Exhibit B hereto, as the same may be amended by subsequent eligible costs as
evidenced by a certificate of an authorized officer of the State.
“Department”
means
the
New Jersey Department of Environmental Protection
"Environmental
Infrastructure Facilities"
means
Water Supply Facilities (as such term is defined in the
Regulations).
"Environmental
Infrastructure System"
means
the Environmental Infrastructure Facilities of the Borrower, including the
Project, described in Exhibit A-1 attached hereto and made a part hereof for
which the Borrower is borrowing the Loan under this Loan Agreement.
"Event
of Default"
means
any occurrence or event specified in Section 5.01 hereof.
“Excess
Project Funds” shall
have the meaning set forth in Section 3.03A hereof.
"Federal
Funds"
means
those funds awarded to the State pursuant to the Clean Water Act (33 U.S.C.
§1251 et
seq.)
or the
Safe Drinking Water Act (42 U.S.C. §300f et
seq.),
as the
same may from time to time be amended and supplemented.
"Loan"
means
the loan made by the State to the Borrower to finance or refinance a portion
of
the Cost of the Project pursuant to this Loan Agreement. For all purposes of
this Loan Agreement, the principal amount of the Loan at any time shall be
the
amount of the loan commitment set forth in Exhibit A-2 attached hereto and
made
a part hereof (such amount being also specified as the initial aggregate
principal amount of the Borrower Bond) less any amount of such principal amount
that has been repaid by the Borrower under this Loan Agreement and less any
adjustment made for low bid or final building costs pursuant to the provisions
of N.J.A.C. 7:22-3.26 and the appropriations act of the New Jersey State
Legislature authorizing the expenditure of moneys to finance a portion of the
Cost of the Project.
"Loan
Agreement"
means
this Loan Agreement, including the Exhibits attached hereto, as it may be
supplemented, modified or amended from time to time in accordance with the
terms
hereof.
"Loan
Agreements"
means
any other loan agreements entered into by and between the State and one or
more
of the Borrowers pursuant to which the State will make Loans to such Borrowers
from Federal Funds.
"Loan
Closing"
means
the date upon which the Borrower shall deliver its Borrower Bond, as previously
authorized, executed, attested and, if applicable, authenticated, to the
State.
"Loan
Repayments"
means
the sum of (i) the repayments of the principal amount of the Loan payable by
the
Borrower pursuant to Section 3.03(a) of this Loan Agreement and (ii) any late
charges incurred hereunder, but shall not include the Administrative
Fee.
"Loan
Term"
means
the term of this Loan Agreement provided in Sections 3.01 and 3.03 hereof and
in
Exhibit A-2 attached hereto and made a part hereof.
"Loans"
means
the loans made by the State to the Borrowers under the Loan Agreements from
Federal Funds.
"Master
Program Trust Agreement"
means
that certain Master Program Trust Agreement, dated as of November 1, 1995,
by
and among the Trust, the State, United States
Trust
Company of New York, as Master Program Trustee thereunder, The Bank of New
York
(NJ), in several capacities thereunder, and First Fidelity Bank, N.A.
(predecessor to Wachovia Bank, National Association), in several capacities
thereunder, as supplemented by that certain Agreement of Resignation of Outgoing
Master Program Trustee, Appointment of Successor Master Program Trustee and
Acceptance Agreement, dated as of November 1, 2001, by and among United States
Trust Company of New York, as Outgoing Master Program Trustee, State Street
Bank
and Trust Company, N.A. (predecessor to U.S. Bank Trust National Association),
as Successor Master Program Trustee, and the Trust, as the same may be amended
and supplemented from time to time in accordance with its terms.
"Prime
Rate"
means
the prevailing commercial interest rate announced by the Trustee from time
to
time in the State as its prime lending rate.
"Project"
means
the Environmental Infrastructure Facilities of the Borrower described in Exhibit
A-1 attached hereto and made a part hereof, which constitutes a project for
which the State is permitted to make a loan to the Borrower pursuant to the
Regulations, all or a portion of the Cost of which is financed or refinanced
by
the State through the making of the Loan under this Loan Agreement and which
may
be identified under either the Drinking Water or Clean Water Project Lists
with
the Project Number specified in Exhibit A-1 attached hereto.
"Regulations"
means
the rules and regulations, as applicable, now or hereafter promulgated under
N.J.A.C. 7:22-3 et
seq.,
7:22-4
et
seq.,
7:22-5
et
seq.,
7:22-9
et
seq.
and
7:22-10 et
seq.,
as the
same may from time to time be amended and supplemented.
"State"
means
the State of New Jersey, acting, unless otherwise specifically indicated, by
and
through the Department, and its successors and assigns.
"Trust"
means
the New Jersey Environmental Infrastructure Trust, a public body corporate
and
politic with corporate succession duly created and validly existing under and
by
virtue of P.L. 1985, c. 334, as amended (N.J.S.A. 58:11B-1 et
seq.).
"Trust
Loan"
means
the loan made to the Borrower by the Trust pursuant to the Trust Loan
Agreement.
"Trust
Loan Agreement"
means
the loan agreement by and between the Borrower and the Trust dated as of
November 1, 2006 to finance or refinance a portion of the Cost of the
Project.
"Trustee"
means,
initially, U.S. Bank National Association, the Trustee appointed by the Trust
and its successors as Trustee under the Bond Resolution, as provided in Article
X of the Bond Resolution.
(b) In
addition to the capitalized terms defined in subsection (a) of this Section
1.01, certain additional capitalized terms used in this Loan Agreement shall,
unless the context clearly requires otherwise, have the meanings ascribed to
such additional capitalized terms in Schedule
A
attached
hereto and made a part hereof.
(c) Except
as
otherwise defined herein or where the context otherwise requires, words
importing the singular number shall include the plural number and vice versa,
and words importing persons shall include firms, associations, corporations,
agencies and districts. Words importing one gender shall include the other
gender.
ARTICLE
II
REPRESENTATIONS
AND COVENANTS OF BORROWER
SECTION
2.01. Representations of Borrower.
The
Borrower represents for the benefit of the State as follows:
(a) Organization
and Authority.
(i) The
Borrower is a corporation duly created and validly existing under and pursuant
to the Constitution and statutes of the State, including the Business
Corporation Law.
(ii) The
acting officers of the Borrower who are contemporaneously herewith performing
or
have previously performed any action contemplated in this Loan Agreement either
are or, at the time any such action was performed, were the duly appointed
or
elected officers of such Borrower empowered by applicable New Jersey law and,
if
applicable, authorized by resolution of the Borrower to perform such actions.
To
the extent any such action was performed by an officer no longer the duly acting
officer of such Borrower, all such actions previously taken by such officer
are
still in full force and effect.
(iii) The
Borrower has full legal right and authority and all necessary licenses and
permits required as of the date hereof to own, operate and maintain its
Environmental Infrastructure System, to carry on its activities relating
thereto, to execute, attest and deliver this Loan Agreement and the Borrower
Bond, to authorize the authentication of the Borrower Bond, to sell the Borrower
Bond to the State, to undertake and complete the Project and to carry out and
consummate all transactions contemplated by this Loan Agreement.
(iv) The
proceedings of the Borrower's board of directors approving this Loan Agreement
and the Borrower Bond, authorizing the execution, attestation and delivery
of
this Loan Agreement and the Borrower Bond, authorizing the sale of the Borrower
Bond to the State, authorizing the authentication of the Borrower Bond on behalf
of the Borrower and authorizing the Borrower to undertake and complete the
Project, including, without limitation, the Borrower Bond Resolution
(collectively, the "Proceedings"), have been duly and lawfully adopted in
accordance with the Business Corporation Law and other applicable New Jersey
law
at a meeting or meetings that were duly called and held in accordance with
the
Borrower By-Laws and at which quorums were present and acting
throughout.
(v) By
official action of the Borrower taken prior to or concurrent with the execution
and delivery hereof, including, without limitation, the Proceedings, the
Borrower has duly authorized, approved and consented to all necessary action
to
be taken by the Borrower for: (A) the execution, attestation, delivery and
performance of this Loan Agreement and the transactions contemplated hereby;
(B)
the issuance of the
Borrower
Bond and the sale thereof to the State upon the terms set forth herein; and
(C)
the execution, delivery and due performance of any and all other certificates,
agreements and instruments that may be required to be executed, delivered and
performed by the Borrower in order to carry out, give effect to and consummate
the transactions contemplated by this Loan Agreement.
(vi) This
Loan
Agreement and the Borrower Bond have each been duly authorized by the Borrower
and duly executed, attested and delivered by Authorized Officers of the
Borrower, and the Borrower Bond has been duly sold by the Borrower to the State,
duly authenticated by the trustee or paying agent, if applicable, under the
Borrower Bond Resolution and duly issued by the Borrower in accordance with
the
terms of the Borrower Bond Resolution; and assuming that the State has all
the
requisite power and authority to authorize, execute, attest and deliver, and
has
duly authorized, executed, attested and delivered, this Loan Agreement, and
assuming further that this Loan Agreement is the legal, valid and binding
obligation of the State, enforceable against the State in accordance with its
terms, each of this Loan Agreement and the Borrower Bond constitutes a legal,
valid and binding obligation of the Borrower, enforceable against the Borrower
in accordance with its respective terms, except as the enforcement thereof
may
be affected by bankruptcy, insolvency or other laws or the application by a
court of legal or equitable principles affecting creditors' rights; and the
information contained under "Description of Loan" in Exhibit A-2 attached hereto
and made a part hereof is true and accurate in all respects.
(b) Full
Disclosure.
There
is no fact that the Borrower has not disclosed to the State in writing on the
Borrower's application for the Loan or otherwise that materially adversely
affects or (so far as the Borrower can now foresee) that will materially
adversely affect the properties, activities, prospects or condition (financial
or otherwise) of the Borrower or its Environmental Infrastructure System, or
the
ability of the Borrower to make all Loan Repayments or otherwise to observe
and
perform its duties, covenants, obligations and agreements under this Loan
Agreement and the Borrower Bond.
(c) Pending
Litigation.
There
are no proceedings pending or, to the knowledge of the Borrower, threatened
against or affecting the Borrower in any court or before any governmental
authority or arbitration board or tribunal that, if adversely determined, would
materially adversely affect (i) the undertaking or completion of the Project,
(ii) the properties, activities, prospects or condition (financial or otherwise)
of the Borrower or its Environmental Infrastructure System, (iii) the ability
of
the Borrower to make all Loan Repayments, (iv) the authorization, execution,
attestation or delivery of this Loan Agreement or the Borrower Bond, (v) the
issuance of the Borrower Bond and the sale thereof to the State, (vi) the
adoption of the Borrower Bond Resolution, or (vii) the Borrower's ability
otherwise to observe and perform its duties, covenants, obligations and
agreements under this Loan Agreement and the Borrower Bond, which proceedings
have not been previously disclosed in writing to the State either in the
Borrower's application for the Loan or otherwise.
(d) Compliance
with Existing Laws and Agreements.
(i) The
authorization, execution, attestation and delivery of this Loan Agreement and
the Borrower Bond by the
Borrower,
(ii) the authentication of the Borrower Bond by the trustee or paying agent
under the Borrower Bond Resolution, as the case may be, and the sale of the
Borrower Bond to the State, (iii) the adoption of the Borrower Bond Resolution,
(iv) the observation and performance by the Borrower of its duties, covenants,
obligations and agreements hereunder and thereunder, (v) the consummation of
the
transactions provided for in this Loan Agreement, the Borrower Bond Resolution
and the Borrower Bond, and (vi) the undertaking and completion of the Project
will not (A) other than the lien, charge or encumbrance created hereby, by
the
Borrower Bond, by the Borrower Bond Resolution and by any other outstanding
debt
obligations of the Borrower that are at parity with the Borrower Bond as to
lien
on, and source and security for payment thereon from, the revenues of the
Borrower's Environmental Infrastructure System, result in the creation or
imposition of any lien, charge or encumbrance upon any properties or assets
of
the Borrower pursuant to, (B) result in any breach of any of the terms,
conditions or provisions of, or (C) constitute a default under, any existing
resolution, outstanding debt or lease obligation, trust agreement, indenture,
mortgage, deed of trust, loan agreement or other instrument to which the
Borrower is a party or by which the Borrower, its Environmental Infrastructure
System or any of its properties or assets may be bound, nor will such action
result in any violation of the provisions of the charter or other document
pursuant to which the Borrower was established or any laws, ordinances,
injunctions, judgments, decrees, rules, regulations or existing orders of any
court or governmental or administrative agency, authority or person to which
the
Borrower, its Environmental Infrastructure System or its properties or
operations is subject.
(e) No
Defaults.
No
event has occurred and no condition exists that, upon the authorization,
execution, attestation and delivery of this Loan Agreement and the Borrower
Bond, the issuance of the Borrower Bond and the sale thereof to the State,
the
adoption of the Borrower Bond Resolution or the receipt of the amount of the
Loan, would constitute an Event of Default hereunder. The Borrower is not in
violation of, and has not received notice of any claimed violation of, any
term
of any agreement or other instrument to which it is a party or by which it,
its
Environmental Infrastructure System or its properties may be bound, which
violation would materially adversely affect the properties, activities,
prospects or condition (financial or otherwise) of the Borrower or its
Environmental Infrastructure System or the ability of the Borrower to make
all
Loan Repayments, to pay all other amounts due hereunder or otherwise to observe
and perform its duties, covenants, obligations and agreements under this Loan
Agreement and the Borrower Bond.
(f) Governmental
Consent.
The
Borrower has obtained all permits and approvals required to date by any
governmental body or officer for the authorization, execution, attestation
and
delivery of this Loan Agreement and the Borrower Bond, for the issuance of
the
Borrower Bond and the sale thereof to the State, for the adoption of the
Borrower Bond Resolution, for the making, observance and performance by the
Borrower of its duties, covenants, obligations and agreements under this Loan
Agreement and the Borrower Bond and for the undertaking or completion of the
Project and the financing or refinancing thereof, including, but not limited
to,
if required, the approval by the New Jersey Board of Public Utilities (the
"BPU") of the issuance by the Borrower of the Borrower Bond to the State and
any
other approvals required therefor by the BPU; and the Borrower has complied
with
all applicable provisions of law requiring any notification, declaration, filing
or registration with any governmental body or officer in connection with the
making, observance and performance by the Borrower of its duties,
covenants,
obligations and agreements under this Loan Agreement and the Borrower Bond
or
with the undertaking or completion of the Project and the financing or
refinancing thereof. No consent, approval or authorization of, or filing,
registration or qualification with, any governmental body or officer that has
not been obtained is required on the part of the Borrower as a condition to
the
authorization, execution, attestation and delivery of this Loan Agreement and
the Borrower Bond, the issuance of the Borrower Bond and the sale thereof to
the
State, the undertaking or completion of the Project or the consummation of
any
transaction herein contemplated.
(g) Compliance
with Law.
The
Borrower:
(i) is
in
compliance with all laws, ordinances, governmental rules and regulations to
which it is subject, the failure to comply with which would materially adversely
affect (A) the ability of the Borrower to conduct its activities or to undertake
or complete the Project, (B) the ability of the Borrower to make the Loan
Repayments and to pay all other amounts due hereunder, or (C) the condition
(financial or otherwise) of the Borrower or its Environmental Infrastructure
System; and
(ii) has
obtained all licenses, permits, franchises or other governmental authorizations
presently necessary for the ownership of its properties or for the conduct
of
its activities that, if not obtained, would materially adversely affect (A)
the
ability of the Borrower to conduct its activities or to undertake or complete
the Project, (B) the ability of the Borrower to make the Loan Repayments and
to
pay all other amounts due hereunder, or (C) the condition (financial or
otherwise) of the Borrower or its Environmental Infrastructure
System.
(h) Use
of
Proceeds.
The
Borrower will apply the proceeds of the Loan from the State as described in
Exhibit B attached hereto and made a part hereof (i) to finance or refinance
a
portion of the Cost of the Borrower's Project; and (ii) where applicable, to
reimburse the Borrower for a portion of the Cost of the Borrower's Project,
which portion was paid or incurred in anticipation of reimbursement by the
State
and is eligible for such reimbursement under and pursuant to the Regulations,
the Code and any other applicable law. All of such costs constitute Costs for
which the State is authorized to make Loans to the Borrower pursuant to the
Regulations.
SECTION
2.02. Particular Covenants of
Borrower.
(a) Promise
to Pay.
The
Borrower unconditionally promises, in accordance with the terms of and to the
extent provided in the Borrower Bond Resolution, to make punctual payment of
the
principal of the Loan and the Borrower Bond and all other amounts due under
this
Loan Agreement and the Borrower Bond according to their respective
terms.
(b) Performance
Under Loan Agreement; Rates.
The
Borrower covenants and agrees (i) to comply with all applicable State and
federal laws, rules and regulations in the performance of this Loan Agreement;
(ii) to maintain its Environmental Infrastructure System in good repair and
operating condition; (iii) to cooperate with the State in the observance and
performance of
the
respective duties, covenants, obligations and agreements of the Borrower and
the
State under this Loan Agreement; and (iv) to establish, levy and collect rents,
rates and other charges for the products and services provided by its
Environmental Infrastructure System, which rents, rates and other charges shall
be at least sufficient to comply with all covenants pertaining thereto contained
in, and all other provisions of, any bond resolution, trust indenture or other
security agreement, if any, relating to any bonds, notes or other evidences
of
indebtedness issued or to be issued by the Borrower, including without
limitation rents, rates and other charges, together with other available moneys,
sufficient to pay the principal of and Interest on the Borrower Bond, plus
all
other amounts due hereunder.
(c) Revenue
Obligation; No Prior Pledges.
The
Borrower shall not be required to make payments under this Loan Agreement except
from the revenues of its Environmental Infrastructure System and from such
other
funds of such Environmental Infrastructure System legally available therefor
and
from any other sources pledged to such payment pursuant to subsection (a) of
this Section 2.02. In no event shall the Borrower be required to make payments
under this Loan Agreement from any revenues or receipts not derived from its
Environmental Infrastructure System or pledged pursuant to subsection (a) of
this Section 2.02. Except for (i) loan repayments required with respect to
the
Trust Loan, (ii) the debt service on any future bonds or notes of the Borrower
issued at parity with the Borrower Bond under the Borrower Bond Resolution,
and
(iii) the debt service on any bonds, notes or evidences of indebtedness of
the
Borrower at parity with the Borrower Bond under the Borrower Bond Resolution
and
currently outstanding or issued on the date hereof, the revenues derived by
the
Borrower from its Environmental Infrastructure System, after the payment of
all
costs of operating and maintaining the Environmental Infrastructure System,
are
and will be free and clear of any pledge, lien, charge or encumbrance thereon
or
with respect thereto prior to, or of equal rank with, the obligation of the
Borrower to make Loan Repayments under this Loan Agreement and the Borrower
Bond, and all corporate or other action on the part of the Borrower to that
end
has been and will be duly and validly taken.
(d) Completion
of Project and Provision of Moneys Therefor.
The
Borrower covenants and agrees (i) to exercise its best efforts in accordance
with prudent environmental infrastructure utility practice to complete the
Project and to accomplish such completion on or before the estimated Project
completion date set forth in Exhibit G hereto and made a part hereof; (ii)
to
comply with the terms and provisions contained in Exhibit G hereto; and (iii)
to
provide from its own fiscal resources all moneys, in excess of the total amount
of loan proceeds it receives under the Loan and Trust Loan, required to complete
the Project.
(e) See
Section 2.02(e) as set forth in Schedule A attached hereto, made a part hereof
and incorporated in this Section 2.02(e) by reference as if set forth in full
herein.
(f) Reserved.
(g) Operation
and Maintenance of Environmental Infrastructure System.
The
Borrower covenants and agrees that it shall, in accordance with prudent
environmental infrastructure utility practice, (i) at all times operate the
properties of its Environmental Infrastructure System and any business in
connection therewith in an efficient manner, (ii)
maintain
its Environmental Infrastructure System in good repair, working order and
operating condition, and (iii) from time to time make all necessary and proper
repairs, renewals, replacements, additions, betterments and improvements with
respect to its Environmental Infrastructure System so that at all times the
business carried on in connection therewith shall be properly and advantageously
conducted.
(h) Records
and Accounts.
The
Borrower shall keep accurate records and accounts for its Environmental
Infrastructure System (the "System Records") separate and distinct from its
other records and accounts (the "General Records"). Such System Records shall be
audited annually by an independent certified public accountant, which may be
part of the annual audit of the General Records of the Borrower. Such System
Records and General Records shall be made available for inspection by the State
at any reasonable time upon prior written notice, and a copy of such annual
audit(s) therefor, including all written comments and recommendations of such
accountant, shall be furnished to the State within 150 days of the close of
the
fiscal year being so audited or, with the consent of the State, such additional
period as may be provided by law.
(i) Inspections;
Information.
The
Borrower shall permit the State and any party designated by the State, at any
and all reasonable times during construction of the Project and thereafter
upon
prior written notice, to examine, visit and inspect the property, if any,
constituting the Project and to inspect and make copies of any accounts, books
and records, including (without limitation) its records regarding receipts,
disbursements, contracts, investments and any other matters relating thereto
and
to its financial standing, and shall supply such reports and information as
the
State may reasonably require in connection therewith.
(j) Insurance.
The
Borrower shall maintain or cause to be maintained, in force, insurance policies
with responsible insurers or self-insurance programs providing against risk
of
direct physical loss, damage or destruction of its Environmental Infrastructure
System at least to the extent that similar insurance is usually carried by
utilities constructing, operating and maintaining Environmental Infrastructure
Facilities of the nature of the Borrower's Environmental Infrastructure System,
including liability coverage, all to the extent available at reasonable cost
but
in no case less than will satisfy all applicable regulatory
requirements.
(k) Cost
of Project.
The
Borrower certifies that the building cost of the Project, as listed in Exhibit
B
hereto and made a part hereof, is a reasonable and accurate estimation thereof,
and it will supply to the State a certificate from a licensed professional
engineer authorized to practice in the State stating that such building cost
is
a reasonable and accurate estimation and that the useful life of the Project
exceeds the maturity date of the Borrower Bond.
(l) Delivery
of Documents.
Concurrently with the delivery of this Loan Agreement (as previously authorized,
executed and attested) at the Loan Closing, the Borrower will cause to be
delivered to the State each of the following items:
(i) an
opinion of the Borrower's bond counsel substantially in the form of Exhibit
E
hereto; provided, however, that the State may permit portions of such opinion
to
be rendered by general counsel to the Borrower and may permit variances in
such
opinion from the form set forth in Exhibit E if such variances are acceptable
to
the State;
(ii) counterparts
of this Loan Agreement as previously executed and attested by the parties
hereto;
(iii) copies
of
those resolutions finally adopted by the board of directors of the Borrower
and
requested by the State, including, without limitation, (A) the resolution of
the
Borrower authorizing the execution, attestation and delivery of this Loan
Agreement, (B) the Borrower Bond Resolution, as amended and supplemented as
of
the date of the Loan Closing, authorizing the execution, attestation,
authentication, sale and delivery of the Borrower Bond to the State, (C) the
resolution of the Borrower confirming the details of the sale of the Borrower
Bond to the State, each of said resolutions of the Borrower being certified
by
an Authorized Officer of the Borrower as of the date of the Loan Closing, (D)
the resolution of the BPU approving the issuance by the Borrower of the Borrower
Bond to the State and setting forth any other approvals required therefor by
the
BPU, if applicable, and (E) any other Proceedings; and
(iv) the
certificates of insurance coverage as required pursuant to the terms of Section
3.06(c) hereof and such other certificates, documents, opinions and information
as the State may require in Exhibit F hereto, if any.
(m) Execution
and Delivery of Borrower Bond.
Concurrently with the delivery of this Loan Agreement at the Loan Closing,
the
Borrower shall also deliver to the State the Borrower Bond, as previously
executed, attested and, if applicable, authenticated.
(n) Notice
of Material Adverse Change.
The
Borrower shall promptly notify the State of any material adverse change in
the
properties, activities, prospects or condition (financial or otherwise) of
the
Borrower or its Environmental Infrastructure System, or in the ability of the
Borrower to make all Loan Repayments and otherwise to observe and perform its
duties, covenants, obligations and agreements under this Loan Agreement and
the
Borrower Bond.
(o) Continuing
Representations.
The
representations of the Borrower contained herein shall be true at the time
of
the execution of this Loan Agreement and at all times during the term of this
Loan Agreement.
(p) Additional
Covenants and Requirements.
(i) No
later than the Loan Closing and, if necessary, in connection with the making
of
the Loan, additional covenants and requirements have been included in Exhibit
F
hereto and made a part hereof. Such covenants and requirements may include,
but
need not be limited to, the maintenance of specified levels of Environmental
Infrastructure System rates, the issuance of additional debt of the Borrower
and
the transfer of revenues and receipts from the Borrower's Environmental
Infrastructure System. The Borrower agrees to observe and comply with each
such
additional covenant and requirement, if any, included in Exhibit F hereto.
(ii)
Additional defined terms, covenants, representations and requirements have
been
included in Schedule A attached hereto and made a part hereof. Such additional
defined terms, covenants, representations and requirements are incorporated
in
this Loan Agreement by reference thereto as if set forth in full herein and
the
Borrower
hereby agrees to observe and comply with each such additional term, covenant,
representation and requirement included in Schedule A as if the same were set
forth in its entirety where reference thereto is made in this Loan
Agreement.
ARTICLE
III
LOAN
TO BORROWER; AMOUNTS PAYABLE; GENERAL AGREEMENTS
SECTION
3.01. Loan; Loan Term.
The
State hereby agrees to make the Loan as described in Exhibit A-2 hereof and
to
disburse proceeds of the Loan to the Borrower in accordance with Section 3.02
and Exhibit C hereof, and the Borrower hereby agrees to borrow and accept the
Loan from the State upon the terms set forth in Exhibit A-2 attached hereto
and
made a part hereof; provided, however, that the State shall be under no
obligation to make the Loan if (a) at the Loan Closing, the Borrower does not
deliver to the State a Borrower Bond and such other documents required under
Section 2.02(l) hereof, or (b) an Event of Default has occurred and is
continuing under this Loan Agreement. Although the State intends to disburse
proceeds of the Loan to the Borrower at the times and up to the amounts set
forth in Exhibit C to pay a portion of the Cost of the Project, due to
unforeseen circumstances there may not be sufficient Federal Funds on deposit
on
any date to make the disbursement in such amount. Nevertheless, the Borrower
agrees that the aggregate principal amount set forth in Exhibit A-2 hereto
shall
constitute the initial principal amount of the Loan (as the same may be adjusted
downward in accordance with the definition thereof), and the State shall have
no
obligation thereafter to loan any additional amounts to the
Borrower.
The
Borrower shall have no legal or equitable interest in the Federal Funds received
by and available to the State or in moneys from repayments of loans previously
made from Federal Funds by the State.
The
Borrower shall use the proceeds of the Loan strictly in accordance with Section
2.01(h) hereof.
The
payment obligations created under this Loan Agreement and the obligations to
pay
the principal of and other amounts due under the Borrower Bond are each direct,
general, irrevocable and unconditional obligations of the Borrower payable
from
any source legally available to the Borrower in accordance with the terms of
and
to the extent provided in the Borrower Bond Resolution.
SECTION
3.02. Disbursement of Loan Proceeds.
(a) The
State shall disburse Federal Funds earmarked for the Loan to the Borrower in
accordance with the terms hereof. Before each and every disbursement of the
proceeds of the Loan by the State to the Borrower, the Borrower shall in
accordance with the procedures set forth in the Regulations submit to the State
a requisition executed by an Authorized Officer of the Borrower.
(b) The
State
shall not be under any obligation to disburse any Loan proceeds to the Borrower
under this Loan Agreement, unless:
(i) the
Loan
Closing shall have occurred on the date established therefor by the
State;
(ii) there
shall be Federal Funds available from time to time to fund the Loan, as
determined solely by the State;
(iii) in
accordance with the "New Jersey Environmental Infrastructure Trust Act", P.L.
1985, c. 334, as amended (N.J.S.A. 58:11B-1 et
seq.),
and
the Regulations, the Borrower shall have timely applied for, shall have been
awarded and, prior to or simultaneously with the Loan Closing, shall have closed
a Trust Loan for a portion of the Allowable Costs (as defined in such
Regulations) of the Project in an amount not in excess of the amount of
Allowable Costs of the Project financed by the Loan from the State, plus the
amount of: (i) capitalized interest during the Project construction period,
if
any, (ii) the cost of funding reserve capacity for the Project, if any, as
well
as that portion of the Debt Service Reserve Fund (as defined in the Trust Loan
Agreement) attributable to the cost of funding such reserve capacity for the
Project, and (iii) certain issuance expenses related thereto, including, if
applicable, a municipal bond insurance policy premium;
(iv) the
Borrower shall have on hand moneys to pay for the greater of (A) that portion
of
the total cost of the Project that is not eligible to be funded from the Loan
or
the Trust Loan, or (B) that portion of the total cost of the Project that
exceeds the actual amounts of the loan commitments made by the State and the
Trust, respectively, for the Loan and the Trust Loan; and
(v) no
Event
of Default nor any event that, with the passage of time or service of notice
or
both, would constitute an Event of Default shall have occurred and be continuing
hereunder.
SECTION
3.03. Amounts Payable.
(a) The
Borrower shall repay the Loan at zero-interest in principal installments payable
to the Trustee semiannually on the Principal Payment Dates, in accordance with
the schedule set forth in Exhibit A-2 attached hereto and made a part hereof,
as
the same may be amended or modified by the State, in particular, without
limitation, to make any adjustments to the amount of the Loan in accordance
with
the definition thereof; provided, however, that the amount of any reduction in
the principal amount of the Loan pursuant to N.J.A.C. 7:22-3.26 shall be
credited to the principal payments set forth in Exhibit A-2 in inverse order
of
their maturity. The obligations of the Borrower under the Borrower Bond shall
be
deemed to be amounts payable under this Section 3.03. Each payment made to
the
Trustee pursuant to the Borrower Bond shall be deemed to be a credit against
the
corresponding obligation of the Borrower under this Section 3.03, and any such
payment made to the Trustee shall fulfill the Borrower's obligation to pay
such
amount hereunder and under the Borrower Bond. Each payment made to the Trustee
pursuant to this Section 3.03 shall be applied to the principal of the
Loan.
(b) In
addition to the principal payments on the Loan required by subsection (a) of
this Section 3.03, the Borrower shall pay a late charge for any such payment
that is received by the Trustee later than the tenth (10th) day following its
due date in an amount equal to the greater of twelve percent (12%) per annum
or
the Prime Rate plus one half of one percent per annum on
such
late
payment from its due date to the date actually paid; provided, however, that
such late charge payable on the Loan shall not be in excess of the maximum
interest rate permitted by law.
(c) In
addition to the Loan Repayments payable under subsections (a) and (b) of this
Section 3.03, the Borrower shall pay one-half of the Administrative Fee, if
any,
to the Trustee semiannually on each Principal Payment Date, commencing with
the
first Principal Payment Date subsequent to the Loan Closing.
SECTION
3.03A. Amounts on Deposit in Project Loan Account after Completion of Draw
Schedule. (a)
If,
on the date which is one hundred eighty (180) days following the final date
for
which a disbursement of Loan proceeds is scheduled to be made pursuant to
Exhibit C hereto, any amounts remain on deposit in the Borrower’s Project Loan
Account, the Borrower must provide to the Trust and the Department a certificate
of an Authorized Officer of the Borrower (i) stating that the Borrower has
not
yet completed the Project, (ii) stating that the Borrower intends to complete
the Project, (iii) setting forth the amount of remaining Loan Proceeds required
to complete the Project, and (iv) providing a revised draw schedule, in a form
similar to Exhibit C hereto and approved by the Department.
(b) If,
on
the date which is one hundred eighty (180) days following the final date for
which a disbursement of Loan proceeds is scheduled to be made pursuant to a
revised draw schedule certified to the Trust and the Department in accordance
with Section 3.03A(a) hereof, any amounts remain on deposit in the Borrower’s
Project Loan Account, the Borrower must provide to the Trust and the Department
a certificate of an Authorized Officer of the Borrower (i) stating that the
Borrower has not yet completed the Project, (ii) stating that the Borrower
intends to complete the Project, (iii) setting forth the amount of remaining
Loan Proceeds required to complete the Project, and (iv) providing a revised
draw schedule, in a form similar to Exhibit C hereto and approved by the
Department.
(c) If
the
Borrower fails to provide the certificate described in paragraphs (a) or (b)
of
this Section 3.03A, when due, or if such certificate states that the Borrower
does not require all or any portion of the amount on deposit in the Project
Loan
Account to complete the Project, such amounts on deposit in the Project Loan
Account which are not certified by an Authorized Officer of the Borrower as
being required to complete the Project (“Excess Project Funds”) shall be applied
as follows:
(i) If
the
Excess Project Funds are less than or equal to the greater of (A) $250,000
or
(B) the amount of Loan Repayments due from the Borrower to the Trust in the
next
succeeding calendar year, the Excess Project Funds shall be applied by the
Trust
toward the Borrower’s obligation to make the Loan Repayments next coming due;
or
(ii) If
the
Excess Project Funds are greater than the greater of (A) $250,000 or (B) the
amount of Loan Repayments due from the Borrower to the Trust in the next
succeeding calendar year, the Excess Project Funds shall be applied by the
Trust
as a prepayment of the Borrower’s Loan Repayments, and shall be applied to the
principal payments (including premium, if any) on the Loan in inverse order
of
their maturity.
SECTION
3.04. Unconditional Obligations.
The
obligation of the Borrower to make the Loan Repayments and all other payments
required hereunder and the obligation to perform and observe the other duties,
covenants, obligations and agreements on its part contained herein shall be
absolute and unconditional, and shall not be abated, rebated, set-off, reduced,
abrogated, terminated, waived, diminished, postponed or otherwise modified
in
any manner or to any extent whatsoever while any Loan Repayments remain unpaid,
for any reason, regardless of any contingency, act of God, event or cause
whatsoever, including (without limitation) any acts or circumstances that may
constitute failure of consideration, eviction or constructive eviction, the
taking by eminent domain or destruction of or damage to the Project or
Environmental Infrastructure System, commercial frustration of the purpose,
any
change in the laws of the United States of America or of the State or any
political subdivision of either or in the rules or regulations of any
governmental authority, any failure of the State to perform and observe any
agreement, whether express or implied, or any duty, liability or obligation
arising out of or connected with the Project or this Loan Agreement, or any
rights of set-off, recoupment, abatement or counterclaim that the Borrower
might
otherwise have against the State, the Trustee or any other party or parties;
provided, however, that payments hereunder shall not constitute a waiver of
any
such rights. The Borrower shall not be obligated to make any payments required
to be made by any other Borrowers under separate Loan Agreements.
SECTION
3.05. Loan Agreement to Survive Loan.
The
Borrower acknowledges that its duties, covenants, obligations and agreements
set
forth in Sections 3.06(a) and (b) hereof shall survive the payment in full
of
the Loan.
SECTION
3.06. Disclaimer of Warranties and
Indemnification.
(a) The
Borrower acknowledges and agrees that: (i) the State does not make any warranty
or representation, either express or implied, as to the value, design,
condition, merchantability or fitness for particular purpose or fitness for
any
use of the Environmental Infrastructure System or the Project or any portions
thereof or any other warranty or representation with respect thereto; (ii)
in no
event shall the State or its agents be liable or responsible for any incidental,
indirect, special or consequential damages in connection with or arising out
of
this Loan Agreement or the Project or the existence, furnishing, functioning
or
use of the Environmental Infrastructure System or the Project or any item or
products or services provided for in this Loan Agreement; and (iii) to the
fullest extent permitted by law, the Borrower shall indemnify and hold the
State
harmless against, and the Borrower shall pay any and all, liability, loss,
cost,
damage, claim, judgment or expense of any and all kinds or nature and however
arising and imposed by law, which the State may sustain, be subject to or be
caused to incur by reason of any claim, suit or action based upon personal
injury, death or damage to property, whether real, personal or mixed, or upon
or
arising out of contracts entered into by the Borrower, the Borrower's ownership
of the Environmental Infrastructure System or the Project, or the acquisition,
construction or installation of the Project.
(b) It
is
mutually agreed by the Borrower and the State that the State and its
commissioners, officers, agents, servants or employees shall not be liable
for,
and shall be indemnified and saved harmless by the Borrower in any event from,
any action performed under this Loan Agreement and any claim or suit of
whatsoever nature, except in the event of loss or damage resulting from their
own negligence or willful misconduct.
(c) In
connection with its obligation to provide the insurance required under Section
2.02(j) hereof: (i) the Borrower shall include, or cause to be included, the
State and its employees and officers as additional "named insureds" on (A)
any
certificate of liability insurance procured by the Borrower (or other similar
document evidencing the liability insurance coverage procured by the Borrower)
and (B) any certificate of liability insurance procured by any contractor or
subcontractor for the Project, and from the later of the date of the Loan
Closing or the date of the initiation of construction of the Project until
the
date the Borrower receives the written certificate of Project completion from
the State, the Borrower shall maintain said liability insurance covering the
State and said employees and officers in good standing; and (ii) the Borrower
shall include the State as an additional "named insured" on any certificate
of
insurance providing against risk of direct physical loss, damage or destruction
of the Environmental Infrastructure System, and during the Loan Term the
Borrower shall maintain said insurance covering the State in good
standing.
The
Borrower shall provide the State with a copy of each of any such original,
supplemental, amendatory or reissued certificates of insurance (or other similar
documents evidencing the insurance coverage) required pursuant to this Section
3.06(c).
SECTION
3.07. Option to Prepay Loan Repayments.
The
Borrower may prepay the Loan Repayments, in whole or in part, upon not less
than
ninety (90) days' prior written notice to the State; provided, however, that,
with respect to any prepayment other than those required by Section 3.03A
hereof, any such full or partial prepayment may only be made (i) if the Borrower
is not then in arrears on its Trust Loan, (ii) if the Borrower is
contemporaneously making a full or partial prepayment of the Trust Loan such
that, after the prepayment of the Loan and the Trust Loan, the Trust gives
its
consent required under Section 3.07(iii) of the Trust Loan Agreement, and (iii)
upon the prior written approval of the State. Prepayments shall be applied
to
the principal payments on the portion of the Loan to be prepaid in inverse
order
of their maturity.
SECTION
3.08. Priority of Loan and Trust Loan.
(a) The
Borrower hereby agrees that, to the extent allowed by law, including, without
limitation, the appropriations act of the New Jersey State Legislature
authorizing the expenditure of Trust bond proceeds to finance a portion of
the
Cost of the Project, or the Borrower Bond Resolution, any loan repayments then
due and payable on the Borrower's Trust Loan, including, without limitation,
any
administrative fees and any late payment charges then due and payable under
the
Trust Loan Agreement, shall be satisfied by the Borrower before any Loan
Repayments then due and payable hereunder on the Loan shall be satisfied by
the
Borrower.
(b) The
Borrower hereby acknowledges that in the event the Borrower fails or is unable
to pay promptly to the Trust in full any loan repayments on the Trust Loan,
then
any Loan Repayments paid by the Borrower on the Loan under this Loan Agreement
and received by the Trustee during the time of any such loan repayment
deficiency under the Trust Loan Agreement shall be applied by the Trustee
first
to
satisfy such Trust Loan Agreement loan repayment deficiency as a credit against
the obligations of the Borrower to make loan repayments of that portion of
interest under the Trust Loan Agreement that is allocable to the interest
payable on the Trust Bonds (as defined in the Trust Loan Agreement) and to
make
payments of that portion of interest under the bond or note issued by the
Borrower to the Trust that is allocable to the interest
payable
on the Trust Bonds, second,
to the
extent available, to make loan repayments of principal under the Trust Loan
Agreement and payments of principal on the bond or note issued by the Borrower
to the Trust pursuant to the Trust Loan Agreement, third,
to the
extent available, to the payment of the administrative fee payable under the
Trust Loan Agreement and to make payments of that portion of interest under
the
bond or note issued by the Borrower to the Trust that is allocable to the
administrative fee payable under the Trust Loan Agreement, fourth,
to the
extent available, to the payment of late charges payable under the Trust Loan
Agreement and to make payments of that portion of interest under the bond or
note issued by the Borrower to the Trust that is allocable to the late charges
payable under the Trust Loan Agreement, and finally,
to the
extent available, to make Loan Repayments on the Loan.
(c) The
Borrower hereby further acknowledges that any Loan Repayments paid by the
Borrower on the Loan under this Loan Agreement shall be applied according to
the
provisions of the Master Program Trust Agreement.
SECTION
3.09. Approval of the New Jersey State
Treasurer.
The
Borrower and the State hereby acknowledge that prior to or simultaneously with
the Loan Closing the New Jersey State Treasurer, in satisfaction of the
requirements of Section 9a of the Act, issued the “Certificate of the New Jersey
State Treasurer Regarding the Approval of the Trust Loan and the Fund Loan” (the
“Treasurer’s Certificate”). Pursuant to the terms of the Treasurer’s
Certificate, the New Jersey State Treasurer approved the Loan and the terms
and
conditions thereof as established by the provisions of this Loan
Agreement.
ARTICLE
IV
ASSIGNMENT
OF LOAN AGREEMENT AND BORROWER BOND
SECTION
4.01. Assignment and Transfer by
State.
The
Borrower hereby approves and consents to any assignment or transfer of this
Loan
Agreement and the Borrower Bond that the State deems to be necessary in
connection with the environmental infrastructure loan program of the State
under
the Regulations.
SECTION
4.02. Assignment by Borrower.
Neither
this Loan Agreement nor the Borrower Bond may be assigned by the Borrower for
any reason, unless the following conditions shall be satisfied: (i) the State
shall have approved said assignment in writing; (ii) the assignee shall have
expressly assumed in writing the full and faithful observance and performance
of
the Borrower's duties, covenants, obligations and agreements under this Loan
Agreement and, to the extent permitted under applicable law, the Borrower Bond;
and (iii) immediately after such assignment, the assignee shall not be in
default in the observance or performance of any duties, covenants, obligations
or agreements of the Borrower under this Loan Agreement or the Borrower
Bond.
ARTICLE
V
EVENTS
OF DEFAULT AND REMEDIES
SECTION
5.01. Events of Default.
If any
of the following events occur, it is hereby defined as and declared to be and
to
constitute an "Event of Default":
(a) failure
by the Borrower to pay, or cause to be paid, any Loan Repayment required to
be
paid hereunder when due, which failure shall continue for a period of fifteen
(15) days;
(b) failure
by the Borrower to make, or cause to be made, any required payments of
principal, redemption premium, if any, and interest on any bonds, notes or
other
obligations of the Borrower issued under the Borrower Bond Resolution (other
than the Loan and the Borrower Bond) or otherwise secured by all or a portion
of
the property pledged under the Borrower Bond Resolution, after giving effect
to
the applicable grace period;
(c) failure
by the Borrower to pay, or cause to be paid, any late charges incurred hereunder
or any portion thereof when due or to observe and perform any duty, covenant,
obligation or agreement on its part to be observed or performed under this
Loan
Agreement, other than as referred to in subsection (a) of this Section 5.01
or
other than the obligations of the Borrower contained in Section 2.02(d)(ii)
hereof and in Exhibit F hereto, which failure shall continue for a period of
thirty (30) days after written notice, specifying such failure and requesting
that it be remedied, is given to the Borrower by the State, unless the State
shall agree in writing to an extension of such time prior to its expiration;
provided, however, that if the failure stated in such notice is correctable
but
cannot be corrected within the applicable period, the State may not unreasonably
withhold its consent to an extension of such time up to 120 days from the
delivery of the written notice referred to above if corrective action is
instituted by the Borrower within the applicable period and diligently pursued
until the Event of Default is corrected;
(d) any
representation made by or on behalf of the Borrower contained in this Loan
Agreement, or in any instrument furnished in compliance with or with reference
to this Loan Agreement or the Loan, is false or misleading in any material
respect;
(e) a
petition is filed by or against the Borrower under any federal or state
bankruptcy or insolvency law or other similar law in effect on the date of
this
Loan Agreement or thereafter enacted, unless in the case of any such petition
filed against the Borrower such petition shall be dismissed within thirty (30)
days after such filing and such dismissal shall be final and not subject to
appeal; or the Borrower shall become insolvent or bankrupt or shall make an
assignment for the benefit of its creditors; or a custodian (including, without
limitation, a receiver, liquidator or trustee) of the Borrower or any of its
property shall be appointed by court order or take possession of the Borrower
or
its property or assets if such order remains in effect or such possession
continues for more than thirty (30) days;
(f) the
Borrower shall generally fail to pay its debts as such debts become due;
and
(g) failure
of the Borrower to observe or perform such additional duties, covenants,
obligations, agreements or conditions as are required by the State and specified
in Exhibit F attached hereto and made a part hereof.
SECTION
5.02. Notice of Default.
The
Borrower shall give the State prompt telephonic notice of the occurrence of
any
Event of Default referred to in Section 5.01(d) or (e) hereof and of the
occurrence of any other event or condition that constitutes an Event of Default
at such time as any senior administrative or financial officer of the Borrower
becomes aware of the existence thereof.
SECTION
5.03. Remedies on Default.
Whenever an Event of Default referred to in Section 5.01 hereof shall have
occurred and be continuing, the State shall have the right to take whatever
action at law or in equity may appear necessary or desirable to collect the
amounts then due and thereafter to become due hereunder or to enforce the
observance and performance of any duty, covenant, obligation or agreement of
the
Borrower hereunder.
In
addition, if an Event of Default referred to in Section 5.01(a) hereof shall
have occurred and be continuing, the State shall, to the extent allowed by
applicable law, have the right to declare all Loan Repayments and all other
amounts due hereunder (including, without limitation, payments under the
Borrower Bond) to be immediately due and payable, and upon notice to the
Borrower the same shall become due and payable without further notice or
demand.
SECTION
5.04. Attorneys' Fees and Other
Expenses.
The
Borrower shall on demand pay to the State the reasonable fees and expenses
of
attorneys and other reasonable expenses (including, without limitation, the
reasonably allocated costs of in-house counsel and legal staff) incurred by
the
State in the collection of Loan Repayments or any other sum due hereunder or
in
the enforcement of the observation or performance of any other duties,
covenants, obligations or agreements of the Borrower upon an Event of
Default.
SECTION
5.05. Application of Moneys.
Any
moneys collected by the State pursuant to Section 5.03 hereof shall be applied
(a) first
to pay
any attorneys' fees or other fees and expenses owed by the Borrower pursuant
to
Section 5.04 hereof, (b) second,
to the
extent available, to pay principal due and payable on the Loan, (c) third,
to the
extent available, to pay any other amounts due and payable hereunder, and (d)
fourth,
to the
extent available, to pay principal on the Loan and other amounts payable
hereunder as such amounts become due and payable.
SECTION
5.06. No Remedy Exclusive; Waiver;
Notice.
No
remedy herein conferred upon or reserved to the State is intended to be
exclusive, and every such remedy shall be cumulative and shall be in addition
to
every other remedy given under this Loan Agreement or now or hereafter existing
at law or in equity. No delay or omission to exercise any right, remedy or
power
accruing upon any Event of Default shall impair any such right, remedy or power
or shall be construed to be a waiver thereof, but any such right, remedy or
power may be exercised from time to time and as often as may be deemed
expedient. In order to entitle the State to exercise any remedy reserved to
it
in this Article V, it shall not be necessary to give any notice other than
such
notice as may be required in this Article V.
SECTION
5.07. Retention of State's Rights.
Notwithstanding any assignment or transfer of this Loan Agreement pursuant
to
the provisions hereof, or anything else to the contrary contained herein, the
State shall have the right upon the occurrence of an Event of Default to take
any action, including (without limitation) bringing an action against the
Borrower at law or in equity, as the State may, in its discretion, deem
necessary to enforce the obligations of the Borrower to the State pursuant
to
Section 5.03 hereof.
ARTICLE
VI
MISCELLANEOUS
SECTION
6.01. Notices.
All
notices, certificates or other communications hereunder shall be sufficiently
given and shall be deemed given when hand delivered or mailed by registered
or
certified mail, postage prepaid, to the Borrower at the address specified in
Exhibit A-1 attached hereto and made a part hereof and to the State and the
Trustee at the following addresses:
(a) State:
New
Jersey Department of Environmental Protection
Municipal
Finance and Construction Element
000
Xxxx
Xxxxx Xxxxxx - 0xx Xxxxx
Xxxxxxx,
Xxx Xxxxxx 00000-0000
Attention:
Assistant Director
New
Jersey Department of the Treasury
Office
of
Public Finance
Xxxxx
Xxxxxx Xxxxxx - 0xx Xxxxx
Xxxxxxx,
Xxx Xxxxxx 00000-0000
Attention:
Director
(b) Trustee:
U.S.
Bank
National Association
00
Xxxxx
Xxxxxx, 0xx
Xxxxx
Xxxxxxxxxx,
Xxx Xxxxxx 00000
Attention:
Corporate Trust Department
Any
of
the foregoing parties may designate any further or different addresses to which
subsequent notices, certificates or other communications shall be sent by notice
in writing given to the others.
SECTION
6.02. Binding Effect.
This
Loan Agreement shall inure to the benefit of and shall be binding upon the
State
and the Borrower and their respective successors and assigns.
SECTION
6.03. Severability.
In the
event any provision of this Loan Agreement shall be held illegal, invalid or
unenforceable by any court of competent jurisdiction, such holding shall not
invalidate, render unenforceable or otherwise affect any other provision
hereof.
SECTION
6.04. Amendments, Supplements and
Modifications.
This
Loan Agreement may not be amended, supplemented or modified without the prior
written consent of the State and the Borrower.
SECTION
6.05. Execution in Counterparts.
This
Loan Agreement may be executed in several counterparts, each of which shall
be
an original and all of which shall constitute but one and the same
instrument.
SECTION
6.06. Applicable Law and Regulations.
This
Loan Agreement shall be governed by and construed in accordance with the laws
of
the State, including the Regulations, which Regulations are, by this reference
thereto, incorporated herein as part of this Loan Agreement.
SECTION
6.07. Consents and Approvals.
Whenever the written consent or approval of the State shall be required under
the provisions of this Loan Agreement, such consent or approval may only be
given by the State.
SECTION
6.08. Captions.
The
captions or headings in this Loan Agreement are for convenience only and shall
not in any way define, limit or describe the scope or intent of any provisions
or sections of this Loan Agreement.
SECTION
6.09. Further Assurances.
The
Borrower shall, at the request of the State, authorize, execute, attest,
acknowledge and deliver such further resolutions, conveyances, transfers,
assurances, financing statements and other instruments as may be necessary
or
desirable for better assuring, conveying, granting, assigning and confirming
the
rights, security interests and agreements granted or intended to be granted
by
this Loan Agreement and the Borrower Bond.
IN
WITNESS WHEREOF, the
State
and the Borrower have caused this Loan Agreement to be executed, sealed and
delivered as of the date first above written.
|
THE
STATE OF NEW JERSEY,
|
||
|
ACTING
BY AND THROUGH THE
|
||
|
NEW
JERSEY DEPARTMENT OF
|
||
|
ENVIRONMENTAL
PROTECTION
|
||
|
[SEAL]
|
||
|
/s/
|
Xxxx
X. Xxxxxxx
|
|
|
ATTEST:
|
Xxxx
X. Xxxxxxx
|
|
|
Commissioner,
Department of
|
||
|
Environmental
Protection
|
||
/s/
Xxxxxxx X. Xxxx, Xx.
Xxxxxxx
X. Xxxx, Xx. P.E., P.P.
Assistant
Director,
Municipal
Finance and Construction Element,
Department
of Environmental Protection
|
MIDDLESEX
WATER COMPANY
|
||
|
[SEAL]
|
||
|
/s/
|
Xxxxxx
X. Xxxx
|
|
|
ATTEST:
|
Authorized
Officer
|
|
/s/
Xxxxxxx
X. Xxxxx
Authorized
Officer
G-1
