Exhibit 10.27
[MASTER TRUST LOAN AGREEMENT FOR MIDDLESEX WATER CO. -
PRIVATE FORM]
LOAN AGREEMENT
BY AND BETWEEN
NEW JERSEY ENVIRONMENTAL INFRASTRUCTURE TRUST
AND
MIDDLESEX WATER COMPANY
DATED AS OF NOVEMBER 1, 2004
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TABLE OF CONTENTS
Page
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ARTICLE
I
DEFINITIONS
SECTION 1.01.
Definitions......................................................
ARTICLE II
REPRESENTATIONS AND COVENANTS OF
BORROWER
SECTION 2.01. Representations of
Borrower......................................
SECTION 2.02. Particular Covenants of
Borrower.................................
ARTICLE III
LOAN TO BORROWER; AMOUNTS PAYABLE; GENERAL
AGREEMENTS
SECTION 3.01. Loan; Loan
Term..................................................
SECTION 3.02. Disbursement of Loan
Proceeds....................................
SECTION 3.03. Amounts
Payable..................................................
SECTION 3.04. Unconditional
Obligations........................................
SECTION 3.05. Loan Agreement to Survive Bond
Resolution and Trust Bonds........
SECTION 3.06. Disclaimer of Warranties and
Indemnification.....................
SECTION 3.07. Option to Prepay Loan
Repayments.................................
SECTION 3.08. Priority of Loan and Trust
Loan..................................
SECTION 3.09. Approval of the New Jersey State
Treasurer.......................
ARTICLE IV
ASSIGNMENT OF LOAN AGREEMENT AND BORROWER
BOND
SECTION 4.01. Assignment and Transfer by
State.................................
SECTION 4.02. Assignment by
Borrower...........................................
ARTICLE V
EVENTS OF DEFAULT AND REMEDIES
SECTION 5.01. Events of
Default................................................
SECTION 5.02. Notice of
Default................................................
SECTION 5.03. Remedies on
Default..............................................
SECTION 5.04. Attorneys' Fees and Other
Expenses...............................
SECTION 5.05. Application of
Moneys............................................
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SECTION 5.06. No Remedy Exclusive; Waiver;
Notice..............................
SECTION 5.07. Retention of State's
Rights......................................
ARTICLE VI
MISCELLANEOUS
SECTION 6.01.
Notices..........................................................
SECTION 6.02. Binding
Effect...................................................
SECTION 6.03.
Severability.....................................................
SECTION 6.04. Amendments, Supplements and
Modifications........................
SECTION 6.05. Execution in
Counterparts........................................
SECTION 6.06. Applicable Law and
Regulations...................................
SECTION 6.07. Consents and
Approvals...........................................
SECTION 6.08.
Captions.........................................................
SECTION 6.09. Further
Assurances...............................................
SCHEDULE A.Certain Additional Loan
Agreement Provisions
EXHIBIT A (1) Description of Project and
Environmental Infrastructure
System......................................................A-1-1
(2) Description of
Loan.........................................A-2-1
EXHIBIT B Basis for Determination of
Allowable Project Costs................B-1
EXHIBIT C Estimated Disbursement
Schedule...................................C-1
EXHIBIT D Specimen Borrower
Bond............................................D-1
EXHIBIT E Opinions of Borrower's Bond and
General Counsels..................E-1
EXHIBIT F Additional Covenants and
Requirements.............................F-1
EXHIBIT G General Administrative
Requirements for the State
Environmental Infrastructure Financing
Program..................G-1
EXHIBIT H Form of Continuing Disclosure
Agreement...........................H-1
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NEW JERSEY ENVIRONMENTAL INFRASTRUCTURE TRUST LOAN AGREEMENT
THIS LOAN
AGREEMENT, made and entered into as of this November 1, 2004,
by
and between the NEW JERSEY ENVIRONMENTAL INFRASTRUCTURE TRUST, a public body
corporate and politic with corporate
succession,
and the Borrower
(capitalized
terms used in this Loan Agreement shall have, unless the context otherwise
requires, the meanings set forth in said
Section 1.01);
WITNESSETH THAT:
WHEREAS,
the Trust, in
accordance with the Act, the Bond Resolution and a
financial plan approved by the State
Legislature in
accordance with Sections 22
and 22.1 of the Act, will issue its Trust Bonds on or
prior to the Loan Closing
for the purpose of making the Loan to the Borrower and the Loans to the
Borrowers from the proceeds of the Trust
Bonds to finance a portion of the Costs
of Environmental Infrastructure
Facilities;
WHEREAS,
the Borrower has, in accordance with the Act and the
Regulations,
made timely application to the Trust for a Loan to
finance a portion
of the
Costs of the Project;
WHEREAS,
the State Legislature, in accordance with Sections 20 and 20.1
of
the Act, has in the form of an appropriations act approved a project
priority
list that includes the Project and that
authorizes an expenditure of proceeds of
the Trust Bonds to finance a portion of the
Costs of the Project;
WHEREAS, the Trust has
approved the Borrower's application for a Loan from
available proceeds of the Trust Bonds to finance a
portion of the Costs of the
Project;
WHEREAS,
in accordance
with the applicable Bond Act (as defined in the
Fund Loan Agreement), and the Regulations,
the Borrower has been
awarded a Fund
Loan for a portion of the Costs of the
Project; and
WHEREAS,
the Borrower,
in accordance with the
Act, the Regulations,
the
Business Corporation Law and all other applicable law, will issue a Borrower
Bond to the Trust evidencing said Loan at
the Loan Closing.
NOW,
THEREFORE,
for and in
consideration of the award of the Loan by the
Trust, 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:
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ARTICLE I
DEFINITIONS
SECTION
1.01. Definitions.
(a) The following
terms as used in this
Loan
Agreement shall, unless the context clearly requires otherwise, have the
following meanings:
"Act"
means the "New
Jersey Environmental Infrastructure Trust Act",
constituting Chapter 334 of the Pamphlet Laws
of 1985 of the State (codified at
N.J.S.A. 58:11B-1 et seq.), as the same may from time to time
be amended and
supplemented.
"Administrative Fee"
means that portion of Interest on the Loan or
Interest on the Borrower Bond payable hereunder as an annual fee of up to
four-tenths of one percent (.40%) of the
initial principal amount of the Loan or
such lesser amount, if any, as may be authorized by any act of the State
Legislature and as the Trust 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.
"Bond
Counsel" means a law firm appointed or approved by the Trust, as
the
case may be, having a reputation
in the field of
municipal law whose
opinions
are generally acceptable by purchasers of
municipal bonds.
"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 Trust and, if
applicable,
authenticated
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 Trust pursuant to which the Trust will make Loans
to such
recipients from moneys on deposit in the
Project Fund,
excluding the Project
Loan Account.
"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.
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"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 Trust.
"Debt
Service Reserve Fund" means the Debt Service Reserve Fund as
defined
in the Bond Resolution.
"Environmental
Infrastructure
Facilities" means
Wastewater
Treatment
Facilities, Stormwater Management
Facilities or Water Supply Facilities (as such
terms are 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.
"Fund
Loan" means the loan
made to the Borrower
by the State, acting
by
and through the New Jersey Department of
Environmental
Protection, pursuant
to
the Fund Loan Agreement dated as of
November 1, 2004 by and between the Borrower
and the State, acting by and through the New
Jersey Department of Environmental
Protection, to finance or refinance a
portion of the Costs of the Project.
"Fund Loan
Agreement"
means the loan
agreement dated as of November 1,
2004 by and between the Borrower and the State, acting by and through the New
Jersey Department of Environmental Protection, regarding the terms and
conditions of the Fund Loan.
"Interest
on the Loan" or "Interest on the Borrower Bond" means the sum
of
(i) the Interest Portion, (ii) the Administrative Fee, and (iii) any late
charges incurred hereunder.
"Interest
Portion" means that
portion of Interest on the Loan or Interest
on the Borrower Bond payable hereunder that is necessary to pay the
Borrower's
proportionate share of interest on the Trust Bonds (i) as
set forth in Exhibit
A-2 hereof under the column heading
entitled "Interest", or (ii) with respect to
any prepayment of Trust Bond Loan
Repayments in
accordance with Section 3.07 or
5.03 hereof, to accrue on any principal amount
of Trust Bond Loan Repayments to
the date of the optional redemption or
acceleration, as the
case may be, of the
Trust Bonds allocable to such prepaid or
accelerated Trust Bond Loan Repayment.
"Loan"
means the loan made by
the Trust to the
Borrower to
finance or
refinance a portion of the Costs of the
Project pursuant to this Loan Agreement.
"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
and of the Bond Resolution.
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"Loan
Agreements"
means any other loan
agreements
entered into by and
between the Trust and one or more of the
Borrowers pursuant to which the Trust
will make Loans to such Borrowers from moneys on deposit in the
Project Fund,
excluding the Project Loan Account, financed with the proceeds of the Trust
Bonds.
"Loan
Closing" means the date upon which the Trust shall issue and
deliver
the Trust Bonds and the Borrower
shall deliver its
Borrower Bond, as previously
authorized, executed, attested and, if
applicable, authenticated, to the Trust.
"Loan
Repayments"
means the sum of (i)
Trust Bond Loan Repayments, (ii)
the Administrative Fee, and (iii) any late
charges incurred hereunder.
"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 Trust to the Borrowers under the Loan
Agreements from moneys on deposit in the
Project Fund,
excluding the Project
Loan Account.
"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.
"Official
Statement" means the Official Statement relating to the
issuance
of the Trust Bonds.
"Preliminary Official
Statement" means the Preliminary Official Statement
relating to the issuance of the Trust
Bonds.
"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 Trust is
permitted to make a loan to the
Borrower pursuant to the Act, the
Regulations and the Bond Resolution, all or a
portion of the Costs of which is financed
or refinanced by the Trust through the
making of the Loan under this Loan
Agreement and which may be identified under
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either the Drinking Water or Clean Water Project Lists
with the Project
Number
specified in Exhibit A-1 attached
hereto.
"Project
Fund" means the Project Fund as defined in the Bond Resolution.
"Project
Loan Account" means the project loan account established on
behalf of the Borrower in the Project Fund in accordance with the Bond
Resolution to finance all or a portion of
the Costs of the Project.
"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., 7:22-6 et seq., 7:22-7 et seq.,
7:22-8 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.
"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 the
Act.
"Trust
Bond Loan Repayments"
means the repayments of the principal amount
of the Loan plus the payment of any premium associated with prepaying the
principal amount of the Loan in accordance with Section 3.07 hereof plus the
Interest Portion.
"Trust
Bonds" means bonds authorized by Section 2.03 of the Bond
Resolution, together with any refunding bonds
authenticated, if applicable, and
delivered pursuant to Section 2.04 of the
Bond Resolution, in
each case issued
in order to finance (i) the portion of the
Loan deposited
in the Project
Loan
Account, (ii) the portion of the Loans
deposited in the
balance of the Project
Fund, (iii) any capitalized interest related to such bonds,
(iv) a portion of
the costs of issuance related to such bonds,
and (v) that
portion of the
Debt
Service Reserve Fund, if any, allocable to the Loan or Loans,
as the case may
be, a portion of which includes the funding
of reserve capacity,
if applicable,
for the Environmental Infrastructure
Facilities of the Borrower or Borrowers, as
the case may be, or to refinance any or all
of the above.
"Trustee"
means, initially, Wachovia 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
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importing persons shall include firms,
associations,
corporations, agencies and
districts. Words importing one gender shall
include the other gender.
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ARTICLE II
REPRESENTATIONS AND COVENANTS OF BORROWER
SECTION
2.01. Representations of Borrower. The Borrower represents for
the
benefit of the Trust, the Trustee and the
holders of the Trust Bonds as follows:
(a)
Organization and
Authority.
--------------------------
(i) The Borrower is a corporation duly created and validly
existing
under
and pursuant to the laws 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 State 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
Trust, 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 Trust, 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
State 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 Trust upon the terms set forth herein; (C)
the
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approval
of the inclusion, if
such inclusion is
deemed necessary in
the
sole
discretion of the Trust, in the Preliminary Official Statement and
the
Official Statement of
all statements and information relating to the
Borrower
set forth in "APPENDIX B" thereto (the "Borrower Appendices")
and
any
amendment thereof or supplement thereto; and (D) 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,
including,
without limitation,
the designation of the Borrower Appendices
portion of
the Preliminary
Official Statement, if
any, as "deemed final"
for the
purposes and within the meaning of Rule 15c2-12 ("Rule 15c2-12")
of the
Securities and Exchange Commission ("SEC") promulgated under the
Securities
Exchange Act of 1934, as amended or supplemented, including any
successor
regulation or statute thereto.
(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 Trust, 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 Trust 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 Trust,
enforceable against the Trust 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 Trust 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 and any other payments required under this Loan Agreement 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 or any other
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payments required under this Loan
Agreement, (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 Trust, (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 Trust 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 Trust,
(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 Trust, 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
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and delivery of this Loan Agreement and the Borrower
Bond, for the issuance
of
the Borrower Bond and the sale thereof to the Trust, 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 Trust, as
required by Section 9a of the Act, 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
Trust, 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 Trust as described in Exhibit B attached hereto and made a part hereof
(i)
to finance or refinance a portion of the
Costs of the
Borrower's Project;
and
(ii) where applicable, to reimburse the Borrower for a
portion of the Costs of
the Borrower's Project, which portion was paid or incurred
in anticipation of
reimbursement by the Trust 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 Trust is
authorized to make
Loans to the
Borrower pursuant to the Act and the
Regulations.
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<PAGE>
(i)
Official Statement.
The descriptions and information set forth in the
Borrower Appendices, if any, contained in
the Official Statement relating to the
Borrower, its operations and the
transactions
contemplated hereby,
as of the
date of the Official Statement, were and,
as of the date of delivery hereof, are
true and correct in all material respects, and did not and do not contain
any
untrue statement of a material fact or omit to state a material
fact that is
necessary to make the statements contained therein, in light of the
circumstances under which they were made,
not misleading.
(j)
Preliminary
Official Statement. As of the date of the Preliminary
Official Statement, the descriptions and information
set forth in the Borrower
Appendices, if any, contained in the
Preliminary Official Statement relating to
the Borrower, its operations and the
transactions
contemplated hereby (i) were
"deemed final" by the Borrower for the purposes and
within the meaning of Rule
15c2-12 and (ii) were true and correct in all material respects, and did not
contain any untrue statement of a material
fact or omit to state a material fact
necessary to make the statements contained therein, in light of the
circumstances under which they were made,
not misleading.
SECTION
2.02. Particular Covenants of Borrower.
(a)
Promise to Pay. The Borrower unconditionally and irrevocably
promises,
in accordance with the terms of and to the
extent provided in the Borrower Bond
Resolution, to make punctual payment of the
principal and redemption premium, if
any, of the Loan and the Borrower
Bond, the Interest on the Loan, the
Interest
on 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 Trust in the observance and performance of the
respective duties, covenants, obligations
and agreements of the Borrower and the
Trust 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)
Borrower Bond; No Prior Liens. Except for (i) the Borrower Bond,
(ii)
any bonds or notes at parity with the
Borrower Bond and currently outstanding or
issued on the date hereof, (iii) any future bonds or notes of the Borrower
issued under the Borrower Bond Resolution at parity with the
Borrower Bond, and
(iv) any Permitted Encumbrances (as defined in the Borrower Bond
Resolution),
the assets of the Borrower that are subject
to the Borrower Bond
Resolution are
and will be free and clear of any pledge,
lien, charge or encumbrance thereon or
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<PAGE>
with respect thereto prior to, or of equal
rank with, 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 Fund 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)
Exclusion of Interest from Federal Gross Income and Compliance with
----------------------------------------------------------------------
Code.
----
(i) The Borrower
covenants and agrees that it shall not take any
action or
omit to take any
action that
would result in the loss of the
exclusion
of the interest on any Trust Bonds now or hereafter issued from
gross
income for
purposes of federal
income taxation as that status is
governed
by Section 103(a) of the Code.
(ii) The Borrower shall not directly or indirectly use or permit
the
use of any
proceeds of the Trust Bonds (or
amounts replaced with such
proceeds)
or any other funds or take any action or omit to take any
action
that would
cause the Trust Bonds
(assuming solely for
this purpose that
the
proceeds of the Trust Bonds loaned to the Borrower represent all of
the
proceeds of the Trust Bonds) to be "arbitrage bonds" within the
meaning of
Section 148(a) of the Code.
(iii) The Borrower
shall not directly or
indirectly use or
permit
the use of
any proceeds of the Trust Bonds to pay the principal of or the
interest
or redemption premium
on or any other amount in connection with
the
retirement or
redemption of any issue of state or local governmental
obligations ("refinancing of indebtedness"), unless the Borrower
shall (A)
establish
to the satisfaction of
the Trust, prior to
the issuance of the
Trust
Bonds, that such
refinancing
of indebtedness will not adversely
affect the
exclusion from gross
income for federal income tax purposes of
the
interest on the Trust
Bonds, and (B) provide
to the Trust an opinion
of Bond
Counsel to that effect in form and substance satisfactory to the
Trust.
(iv) The Borrower shall not directly or indirectly use or permit
the
use of any
proceeds of the Trust
Bonds to reimburse
the Borrower for
an
expenditure with respect to a Costs of the Borrower's Project paid by the
Borrower
prior to the issuance of the Trust Bonds, unless (A) the
allocation
by the Borrower of the proceeds of the Trust Bonds to reimburse
such
expenditure complies
with the requirements
of Treasury
Regulations
ss.1.150-2
necessary to enable the reimbursement allocation to be treated
as an
expenditure
of the proceeds of the Trust Bonds for purposes of
applying
Sections 103 and
141-150, inclusive,
of the Code,
or (B) such
proceeds
of the Trust Bonds will be used for
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<PAGE>
refinancing of
indebtedness that was
used to pay Costs of the Borrower's
Project or
to reimburse
the Borrower
for expenditures with respect to
Costs of
the Borrower's Project paid by the Borrower prior to the
issuance
of such
indebtedness in
accordance with a
reimbursement
allocation for
such
expenditures
that complies with the requirements of Treasury
Regulations ss.1.150-2.
(v) The Borrower shall
not directly or indirectly use or permit the
use of any
proceeds of the Trust Bonds to pay any Costs of the Borrower's
Project
that does not
constitute
a "capital expenditure" within the
meaning of
Treasury Regulations ss.1.150-1.
(vi) The Borrower
shall not use the
proceeds of the Trust Bonds
(assuming
solely for this
purpose that the proceeds of the Trust Bonds
loaned to
the Borrower represent
all of the proceeds of
the Trust Bonds)
in any
manner that would cause the Trust Bonds to be considered
"federally
guaranteed" within the
meaning of Section 149(b) of the Code or "hedge
bonds"
within the meaning of Section 149(g) of the Code.
(vii) The Borrower shall not issue any debt obligations that (A)
are
sold at
substantially
the same time as the
Trust Bonds and
finance or
refinance
the Loan made to the Borrower, (B) are sold pursuant to the
same
plan of
financing as the Trust Bonds and finance or
refinance the Loan
made to
the Borrower, and (C)
are reasonably
expected to be paid
out of
substantially the same
source of funds as the
Trust Bonds and finance or
refinance
the Loan made to the Borrower.
(viii) Neither the
Borrower nor any
"related party" (within the
meaning of
Treasury Regulations
ss.1.150-1) shall purchase Trust Bonds in
an amount
related to the amount of the Loan.
(ix) The Borrower will not issue or permit to be issued
obligations
that will
constitute
an "advance
refunding" of the
Borrower Bond within
the
meaning of Section
149(d)(5) of the Code without the express written
consent of
the Trust, which
consent may only be
delivered by the Trust
after the
Trust has received notice from the Borrower of such
contemplated
action
no later than sixty (60) days prior to any such contemplated
action,
and which consent is in the sole discretion of the Trust.
(x) See Section
2.02(f)(x)
as set forth in
Schedule A attached
hereto,
made a part hereof and
incorporated in this Section 2.02(f)(x) by
reference
as if set forth in full herein.
(xi) No "gross
proceeds" of the Trust
Bonds held by the
Borrower
(other
than amounts in a "bona fide debt service fund") will be held in a
"commingled fund" (as
such terms are
defined in Treasury Regulations
ss.1.148-1(b)).
(xii) Based upon all of the objective facts and circumstances in
existence
on the date of
issuance of the Trust
Bonds used to finance the
Project,
(A) within six months
of the date of issuance of the Trust Bonds
used to
finance the Project, the Borrower will incur a substantial
binding
obligation
to a third party to expend on the Project at least five
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<PAGE>
percent
(5%) of the "net sale
proceeds" (within the meaning of
Treasury
Regulations
ss.1.148-1) of the Loan used to finance the Project (treating
an
obligation
as not being
binding if it is
subject to contingencies
within the
control of the Borrower, the Trust or a "related party" (within
the
meaning of Treasury
Regulations
ss.1.150-1)), (B)
completion of the
Project
and the allocation to
expenditures of the
"net sale proceeds" of
the Loan
used to finance the Project will proceed with due diligence,
and
(C) all of
the proceeds of the
Loan used to finance
the Project
(other
than
amounts deposited
into the Debt Service
Reserve Fund
allocable to
that
portion of the Loan
used to finance
reserve capacity,
if any) and
investment
earnings thereon will be spent prior to the period ending three
(3) years
subsequent
to the date of
issuance of the Trust
Bonds used to
finance
the Project.
Accordingly, the
proceeds of the Loan
deposited in
the
Project Loan Account
used to finance the Project will be eligible for
the 3-year
arbitrage temporary period since the expenditure
test, time
test
and due diligence test, as set forth in Treasury Regulations
ss.1.148-2(e)(2), will be satisfied.
(xiii) The weighted
average maturity of the Loan does not exceed
120% of
the average
reasonably
expected economic life of the Project
financed
or refinanced
with the Loan,
determined
in the same manner
as
under
Section 147(b) of the Code. Accordingly, the term of the Loan will
not be
longer than is reasonably necessary for the governmental
purposes
of the
Loan within the meaning of Treasury Regulations
ss.1.148-1(c)(4).
For
purposes of this
subsection and
subsection (h) of this Section 2.02,
quoted terms shall have the meanings
given thereto by Section 148 of the
Code,
including, particularly, Treasury Regulations ss.ss.1.148-1 through
1.148-11,
inclusive, as supplemented or amended,
to the extent
applicable to the
Trust
Bonds, and any successor Treasury
Regulations applicable to the Trust Bonds.
(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.
--------------------
(i) The Borrower shall
keep accurate
records and accounts
for its
Environmental
Infrastructure System
specifically relating to the Project
(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
Trust at
any reasonable time upon prior written notice, and a copy of
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<PAGE>
such
annual audit(s) therefor, including all written comments and
recommendations of such accountant, shall be furnished to the Trust
within
150 days
of the close of the fiscal year being so audited or, with the
consent of
the Trust, such additional period as may be provided by law.
(ii) Unless
otherwise
advised
in writing by the Trust, in
furtherance of the covenant of the Borrower contained in subsection
(f) of
this
Section 2.02 not to cause the Trust Bonds to be arbitrage
bonds, the
Borrower
shall keep, or cause to be kept, accurate records of each
investment
it makes in any
"nonpurpose
investment"
acquired with, or
otherwise
allocated to,
"gross proceeds" of the Trust Bonds not
held by
the
Trustee and each
"expenditure" it makes allocated to "gross proceeds"
of the
Trust Bonds.
Such records shall include the purchase price,
including
any constructive "payments" (or in the case of a "payment"
constituting a deemed
acquisition of a "nonpurpose investment" (e.g., a
"nonpurpose
investment" first
allocated to "gross proceeds" of the Trust
Bonds
after it is actually
acquired because it is
deposited in a sinking
fund for
the Trust Bonds)),
the "fair market
value" of the
"nonpurpose
investment" on the
date first allocated
to the "gross
proceeds" of the
Trust
Bonds, nominal
interest rate,
dated date,
maturity date, type
of
property,
frequency of periodic payments, period of compounding, yield to
maturity,
amount actually or constructively received on disposition (or
in
the case
of a "receipt" constituting a deemed disposition of a
"nonpurpose
investment" (e.g., a
"nonpurpose
investment" that ceases to be allocated
to the
"gross proceeds"
of the Trust Bonds
because it is removed
from a
sinking
fund for the
Trust Bonds)), the "fair market value" of the
"nonpurpose
investment" on the
date it ceases
to be allocated to the
"gross
proceeds" of the Trust
Bonds, the purchase
date and disposition
date of
the "nonpurpose
investment"
and evidence of the "fair market
value" of
such property on the
purchase date and disposition date (or
deemed
purchase
or disposition date) for each such "nonpurpose
investment". The
purchase date, disposition date and the date of
determination of "fair market value" shall be the date on which a
contract
to
purchase or sell the "nonpurpose investment" becomes binding, i.e.,
the
trade
date rather than the settlement date. For purposes of the
calculation of purchase price and disposition price, brokerage or selling
commissions,
administrative
expenses or
similar expenses shall not
increase
the purchase price of an item and shall not
reduce the amount
actually
or constructively received upon disposition of an item, except
to
the extent
such costs constitute "qualified administrative costs".
(iii) Within thirty
(30) days of the last day of the fifth and each
succeeding
fifth "bond year" (which, unless otherwise advised by the
Trust,
shall be the five-year period ending on the date five years
subsequent
to the date
immediately preceding
the date of issuance of the
Trust
Bonds and each succeeding fifth "bond year") and within
thirty (30)
days of
the date the last bond that is part of the Trust Bonds is
discharged
(or on any other
periodic basis requested in writing by the
Trust),
the Borrower shall (A) calculate, or cause to be calculated,
the
"rebate
amount" as of the "computation date" or "final computation date"
attributable to any "nonpurpose investment" made by the Borrower and (B)
remit the
following to the
Trust: (1) an amount
of money that when added
to
the "future value" as of the "computation date" of any previous
payments
made to the
Trust on account of rebate equals the "rebate
amount",
(2) the calculations
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<PAGE>
supporting
the "rebate amount" attributable to any "nonpurpose investment"
made by
the Borrower allocated to "gross proceeds" of the Trust Bonds,
and
(3) any
other information
requested by the Trust
relating to
compliance
with
Section 148 of the Code (e.g., information related to any
"nonpurpose
investment" of the
Borrower for purposes of application of the "universal
cap").
(iv) The Borrower
covenants and agrees that it will account for
"gross
proceeds" of the Trust
Bonds, investments
allocable to the
Trust
Bonds
and expenditures of "gross proceeds" of the Trust Bonds in
accordance
with Treasury Regulations ss.1.148-6. All allocations of "gross
proceeds"
of the Trust Bonds to expenditures will be recorded on the
books
of the
Borrower kept in
connection with the
Trust Bonds no later than 18
months
after the later of the date the particular Costs of the Borrower's
Project is
paid or the date the
portion of the project
financed by the
Trust Bonds is
placed in service. All allocations of proceeds of the Trust
Bonds to
expenditures will be
made no later than the date that is 60 days
after the
fifth anniversary of
the date the Trust Bonds are issued or the
date 60
days after the
retirement of the
Trust Bonds, if
earlier. Such
records
and accounts will include the particular Cost paid, the date of
the
payment and the party to whom the payment was made.
(i)
Inspections;
Information. The Borrower shall permit the Trust and the
Trustee and any party designated by any of such parties, 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 Trust
and the Trustee 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) Costs
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 Trust 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 Trust and the Trustee each of the
following items:
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<PAGE>
(i) an opinion of the Borrower's bond counsel substantially in the
form of
Exhibit E hereto;
provided, however, that the Trust 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, in the opinion of the Trust, such variances are not to the
material
detriment of the interests of the holders of the Trust Bonds;
(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 Trust, 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 Trust,
(C) the resolution of the
Borrower,
if any, confirming the
details of the sale of the Borrower Bond
to the
Trust, (D) the
resolution of the Borrower, if any, declaring its
official
intent to reimburse expenditures for the Costs of the Project
from the
proceeds of the Trust
Bonds, each of said resolutions of the
Borrower
being certified by an Authorized
Officer of the
Borrower as of
the date
of the Loan Closing,
(E) the resolution of the BPU approving the
issuance
by the Borrower of the Borrower Bond to the Trust and setting
forth any
other approvals required therefor by the BPU, if applicable,
and
(F) any
other Proceedings;
(iv) if the Loan is being made to reimburse the Borrower for all or
a portion of the Costs of the Borrower's Project or to refinance
indebtedness or
reimburse the Borrower for the repayment of indebtedness
previously
incurred by the Borrower to finance all or a portion of
the
Costs of
the Borrower's
Project, an opinion of
Bond Counsel, in form and
substance
satisfactory to the Trust, to the effect that such
reimbursement
or
refinancing will not
adversely affect the
exclusion from gross income
for
federal income tax purposes of the interest on the Trust Bonds;
and
(v) the certificates of insurance coverage as required pursuant to
the
terms of Section 3.06(d) hereof and such other certificates,
documents,
opinions and
information as the Trust 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 Trust the Borrower Bond, as
previously executed, attested and, if
applicable, authenticated, upon the receipt of a written
certification of
the
Trust that a portion of the net
proceeds of the Trust
Bonds shall be
deposited
in the Project Loan Account simultaneously with the delivery of the
Borrower
Bond.
(n) Notice
of Material Adverse Change. The Borrower shall promptly
notify
the Trust 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
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<PAGE>
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)
Continuing Disclosure
Covenant. To the
extent that the Trust, in its
sole discretion, determines, at any time prior to the
termination of the Loan
Term, that the Borrower is a material
"obligated person", as the term "obligated
person" is defined in Rule 15c2-12,
with materiality being determined by the
Trust pursuant to criteria established, from time to time, by the Trust in
its
sole discretion and set forth in a bond
resolution or official
statement of the
Trust, the Borrower hereby covenants that it will authorize
and provide to the
Trust, for inclusion in any preliminary
official statement or official statement
of the Trust, all statements and information relating to the Borrower
deemed
material by the Trust for the purpose of
satisfying Rule 15c2-12 as well as Rule
10b-5 promulgated pursuant to the
Securities Exchange Act of 1934, as amended or
supplemented, including any successor regulation or statute thereto ("Rule
10b-5"), including certificates and written representations of the Borrower
evidencing its compliance with Rule 15c2-12 and Rule 10b-5;
and the Borrower
hereby further covenants that the Borrower shall execute and deliver the
Continuing Disclosure Agreement, in substantially the form attached
hereto as
Exhibit H, with such revisions thereto prior to execution and
delivery thereof
as the Trust shall determine to be necessary,
desirable or
convenient, in its
sole discretion, for the purpose of
satisfying Rule 15c2-12 and the purposes and
intent thereof, as Rule 15c2-12, its purposes and intent may hereafter be
interpreted from time to time by the SEC or
any court of competent jurisdiction;
and pursuant to the terms and provisions of
the Continuing Disclosure Agreement,
the Borrower shall thereafter provide on-going disclosure with respect to all
statements and information relating to the Borrower in satisfaction of the
requirements set forth in Rule 15c2-12 and Rule 10b-5, including, without
limitation, the provision of certificates
and written
representations
of the
Borrower evidencing its compliance with
Rule 15c2-12 and Rule 10b-5.
(q)
Additional
Covenants and Requirements. (i) No later than the Loan
Closing and, if necessary, in connection with the Trust's
issuance of the Trust
Bonds or 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, the use by or on behalf of the
Borrower of
certain proceeds of the Trust Bonds as
such use relates to the exclusion from
gross income for federal income tax
purposes of the interest on any Trust Bonds,
the transfer of revenues and receipts from the Borrower's Environmental
Infrastructure System, compliance with Rule 15c2-12,
Rule 10b-5 and any
other
applicable federal or State securities laws,
and matters in connection with the
appointment of the Trustee under the Bond
Resolution and any successors thereto.
The Borrower hereby 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
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<PAGE>
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.
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<PAGE>
ARTICLE III
LOAN TO BORROWER; AMOUNTS PAYABLE; GENERAL AGREEMENTS
SECTION
3.01. Loan; Loan Term. The Trust 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 Trust
upon the terms set
forth in Exhibit A-2 attached hereto and
made a part hereof; provided, however,
that the Trust shall be under no
obligation to make the
Loan if (a) at the Loan
Closing, the Borrower does not deliver to the Trust 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 the Bond Resolution or this Loan
Agreement. Although the Trust 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 Costs of the Project,
due to unforeseen
circumstances there
may
not be a sufficient amount on deposit in the Project
Fund on any date to
make
the disbursement in such amount. Nevertheless, the Borrower agrees that the
amount actually deposited in the Project Loan
Account at the Loan Closing plus
the Borrower's allocable share of (i) certain costs of issuance and
underwriter's discount for all Trust Bonds issued to finance the Loan; (ii)
capitalized interest during the Project
construction period, if applicable; and
(iii) that portion of the Debt Service
Reserve Fund
attributable to the cost of
funding reserve capacity for the Project,
if applicable,
shall constitute
the
initial principal amount of the Loan (as the same
may be adjusted
downward in
accordance with the definition thereof), and neither the Trust nor the
Trustee
shall have any obligation thereafter to loan any additional amounts to the
Borrower.
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 the
Borrower Bond,
Interest on the Borrower
Bond 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 Trustee, as the
agent
of the Trust, shall disburse the amounts on
deposit in the Project Loan Account
to the Borrower upon receipt of a
requisition executed
by an Authorized Of
