ex10-1.htm


     

     

     

    Exhibit
10.1

     

    


    February
2, 2009

     

    
      Middlesex
Water Company

    

    
      1500
Ronson Road

    

    Iselin,
NJ 08830

    
      Attn:  Mr.
Bruce O’Connor, Chief Financial Officer

    

     

     

    Re:           Uncommitted Line of
Credit

     

     

    Dear Mr.
O’Connor:

     

    We are
pleased to advise you that BANK OF AMERICA, N.A. (the “Lender”) has
established for Middlesex Water Company, a New Jersey corporation (the “Borrower”), an
uncommitted line of credit with aggregate advances (“Loans”) outstanding
thereunder not at any time to exceed Twenty Five  Million Dollars
($25,000,000).  The terms and conditions of the line of credit are as
follows:

     

    Loans

    
      	
              Discretionary:

            	
              All
      Loans under this line of credit shall be at the sole discretion of the
      Lender.  This letter is not a commitment by the Lender to extend
      credit.

            


    

     

    
      	
              Principal:

            	
              The
      outstanding principal of each Loan shall be due and payable on the earlier
      of (a) the maturity date for such Loan agreed to by the Lender and the
      Borrower at time such Loan is made, and (b) the Maturity
    Date.

            


    

     

    
      	
              Interest:

            	
              Each
      Loan shall bear interest at the rate of interest agreed to by the Lender
      and the Borrower at the time such Loan is made.  Accrued and
      unpaid interest on each Loan shall be due and payable on the date that
      such Loan is payable. No Loan shall have a maturity of more than ninety
      (90) days or three months (whichever is longer) after the date
      made.

            


    

     

    
      	
              Maturity
      Date:

            	
              May
      30, 2010.

            


    

     

    
      	
              Requests
      for Loans:

            	
              Any
      request for a Loan must be received by the Lender at the address,
      telephone number or facsimile number listed below the Lender’s signature
      not later than 11:00 a.m., EST time, on the date of the requested Loan
      (which must be a day on which the Lender is open to conduct substantially
      all of its business).

            


    

     

    
      	
              Documentation:

            	
              The
      Loans shall be evidenced by a promissory note satisfactory in form and
      substance to the Lender executed by the Borrower.  The Borrower
      shall execute and deliver to the Lender such other documents as the Lender
      may reasonably request from time to
time.

            


    

     

    


    


    


    


    



    
      
         


      

      
         


        
          

        

      

      
         


      

    


    
      	
              Financial
      Information:

            	
              To
      provide the following financial information and statements in form and
      content acceptable to the Bank, and such additional information as
      requested by the Bank from time to
time.

            


    

    (a)             Within
ninety (90) days of the close of each fiscal year the Borrower’s annual Form
10-K, which shall include, but not be limited to, the consolidated and
consolidating balance sheet, statements of income and retained earnings and cash
flows of the Borrower and its subsidiaries as of the last day of and for such
fiscal year, each such statement to be certified by the chief financial or
accounting officer of the Borrower, in each case as having been prepared in
accordance with GAAP consistently applied and certified by a firm of independent
certified public accountants satisfactory to the Bank;

    


     (b)             Within
forty-five (45) days of the close of each fiscal quarter of the Borrower, the
Borrower’s 10-Q, which shall include, but not be limited to, the consolidated
and consolidating balance sheet, statements of income and retained earnings and
cash flows of the Borrower and its subsidiaries as of the last day of and for
such quarter and for the portion of the fiscal year end then elapsed, each such
statement to be certified by the chief financial or accounting officer of the
Guarantor, in each case as having been prepared in accordance with GAAP
consistently applied.

    


     

    
      	
              Notice:

            	
              The
      Lender hereby notifies the Borrower that pursuant to the requirements of
      the USA Patriot Act (Title III of Pub.L. 107-56 (signed into law October
      26, 2001)) (the “Act”), the
      Lender is required to obtain, verify and record information that
      identifies the Borrower, which information includes the name and address
      of the Borrower and other information that will allow the Lender to
      identify the Borrower in accordance with the
  Act.

            


    

     

    Please
indicate your acknowledgment of the foregoing by signing and returning the
enclosed copy of this letter to the undersigned at the address noted
below.

     

    
      	 
      	
              Very
      truly yours,

               

            
	 
      	
              BANK
      OF AMERICA, N.A.

               

            
	 
      	
              By

            	
               /s/
      Lori A. Moylan

            
	 
      	
              Name

            	
               Lori
      A. Moylan

            
	 
      	
              Title

            	
               Senior
      Vice President

            
	 
      	
              Address:
      750 Walnut Street, Cranford, New Jersey
07016

            


    

    
 

     

    Acknowledged
and agreed:

     

    Middlesex
Water Company

    By: /s/ A. Bruce
O’Connor             


    
      Name/Title:
A. Bruce O’Connor-Vice
President andChief Financial
Officer

    

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    


     

    MASTER
PROMISSORY NOTE

     

    


     

    
      	
              $25,000,000

            	
              February
      2, 2009

            
	 
      	 


    

    FOR VALUE
RECEIVED, the undersigned, MIDDLESEX WATER COMPANY, a New Jersey corporation
(the “Borrower”), hereby
promises to pay to the order of BANK OF AMERICA, N.A. (the
“Lender”), at
its office at 750 Walnut Avenue, Cranford, New Jersey 07016 (or at such other
place as the Lender may designate from time to time), in lawful money of the
United States of America and in immediately available funds, the principal
amount of Twenty Five Million Dollars ($25,000,000) or such lesser amount as
shall equal the aggregate unpaid principal amount of the advances (the “Loans”) made by the
Lender to the Borrower under this Master Promissory Note (this “Note”), and to pay
interest on the unpaid principal amount of each such Loan at the rates per annum
and on the dates specified below.

     

    Each Loan
hereunder shall be at the sole discretion of the Lender.  Each Loan
shall have a maturity date and shall bear interest at the rate per annum quoted
to the Borrower by the Lender and accepted by the Borrower prior to the making
of such Loan (which acceptance shall in any event be deemed to occur upon
receipt by the Borrower of the proceeds of any Loan).  Each Loan, and
accrued and unpaid interest thereon, shall be due and payable, on the earlier of
(a) the maturity date of such Loan, or (b) May 30, 2010 (“Maturity
Date”).  No Loan shall have a maturity of more than ninety (90) days
or three months (whichever is longer) after the date made.  No Loan
shall have a maturity beyond the Maturity Date.  The Lender may, if
and to the extent any payment is not made when due hereunder, charge from time
to time against any or all of the Borrower’s accounts with the Lender any amount
so due.

     

    The date,
amount, interest rate, and maturity date of each Loan, and each payment of
principal and interest hereon, shall be recorded by the Lender on its books,
which recordations shall, in the absence of manifest error, be conclusive as to
such matters; provided that the
failure of the Lender to make any such recordation or any error therein shall
not limit or otherwise affect the obligations of the Borrower
hereunder.

     

    The
Borrower may not prepay any Loan in whole or in part without the Lender’s prior
written consent; provided, however, that if any
such prepayment is made the Borrower shall at the time of prepayment compensate
the Lender for any loss, cost, or expense that the Lender incurs as a result of
such prepayment.  In addition, the Borrower shall compensate the
Lender for any loss, cost or expense that the Lender incurs as a result of a
prepayment by reason of acceleration of the indebtedness hereunder.

     

    Interest
shall be computed on the basis of a year of 360 days and the actual days elapsed
(including the first day but excluding the last day).  Overdue
principal and, to the extent permitted by applicable law, interest shall bear
interest, payable upon demand, for each day from and including the due date to
but excluding the date of actual payment at a rate per annum equal to the sum of
2% plus the rate of interest publicly announced by the Lender from time to time
as its prime rate.  The Lender’s prime rate is a rate set by the
Lender based upon various factors including the Lender’s costs and desired
return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below
such announced rate. Whenever any payment under this Note is due on a day that
is not a day the Lender is open to conduct substantially all of its business,
such payment shall be made on the next succeeding day on which the Lender is
open to conduct substantially all of its business, and such extension of time
shall in such case be included in the computation of the payment of
interest.

     

    Each of
the following shall constitute an Event of Default hereunder:  (a) the
Borrower shall fail to pay when due any principal of or interest on any Loan;
(b) a default or event of default shall occur under the terms of any other
indebtedness for which the Borrower or any of its subsidiaries is
liable,

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    whether
as principal obligor, guarantor, or otherwise having an aggregate principal
amount (including undrawn committed or available amounts and including amounts
owing to all creditors under any combined or syndicated credit arrangement) in
excess of $10,000,000; (c) any representation, warranty, certification, or
statement made or deemed made by the Borrower to the Lender shall prove to have
been incorrect or misleading in any material respect; (d) the Borrower shall
dissolve, liquidate, or terminate its legal existence or shall convey, transfer,
lease, or dispose of (whether in one transaction or a series of transactions)
all or substantially all of its assets to any person or entity; (e) a petition
shall be filed by or against the Borrower or any of its subsidiaries under any
law relating to bankruptcy, reorganization, or insolvency, or (f) the Borrower
or any of its subsidiaries shall make an assignment for the benefit of creditors
or fail generally to pay its debts as they become due, or a receiver, trustee,
or similar official shall be appointed over the Borrower or any of its
subsidiaries or a substantial portion of any of their respective
assets.  If an Event of Default shall have occurred and be continuing,
the Lender may declare the outstanding principal of and accrued and unpaid
interest on this Note, together with all other amounts payable hereunder, to be
immediately due and payable without presentment, protest, demand, or other
notice of any kind, all of which are hereby waived by the Borrower; provided, however, that upon
the occurrence with respect to the Borrower of any event specified in clause (e)
of the preceding sentence, the outstanding principal and accrued and unpaid
interest on this Note, together with all other amounts payable hereunder, shall
become immediately due and payable without presentment, protest, demand, or
other notice of any kind, all of which are hereby waived by the
Borrower.

     

    The
request of the Borrower for any Loan and the receipt by the Borrower of the
proceeds thereof shall be deemed a representation by the Borrower as of the date
of each such request or receipt that no Event of Default has occurred and that
the Borrower is duly authorized to incur such indebtedness
hereunder.

     

    No
failure or delay by the Lender in exercising, and no course of dealing with
respect to, any right, power, or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise of any right, power, or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power, or privilege.  The rights and
remedies of the Lender provided herein shall be cumulative and not exclusive of
any other rights or remedies provided by law.  If any provision of
this Note shall be held invalid or unenforceable in whole or in part, such
invalidity or unenforceability shall not affect the remaining provisions
hereof.  No provision of this Note may be modified or waived except by
a written instrument signed by the Lender and the Borrower.

     

    The
Lender shall incur no liability to the Borrower in acting upon any telephone,
telex, or other communication that the Lender in good faith believes has been
given by an authorized representative of the Borrower.

     

    The
Lender may assign to one or more banks or other entities all or any part of, or
may grant participations to one or more banks or other entities in or to all or
any part of, this Note or any Loan or Loans hereunder.

     

    The
Borrower shall pay on demand all costs and expenses (including reasonable
attorneys’ fees and the allocated costs of internal counsel) incurred by the
Lender in connection with any Event of Default or the enforcement or attempted
enforcement of this Note.

     

    Notwithstanding
anything to the contrary contained herein, the interest paid or agreed to be
paid hereunder shall not exceed the maximum rate of non-usurious interest
permitted by applicable law (the “Maximum
Rate”).  If the Lender shall receive interest in an amount that
exceeds the Maximum Rate, the excessive interest shall be applied to the
principal of this Note or, if it exceeds the unpaid principal, refunded to the
Borrower.  In determining whether the interest contracted for,
charged, or received by the Lender exceeds the Maximum Rate, the Lender may, to
the extent permitted by applicable law, (a) characterize any payment that is not
principal as an expense, fee, or premium rather than interest, (b)

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    exclude
voluntary prepayments and the effects thereof, and (c) amortize, prorate,
allocate, and spread in equal or unequal parts the total amount of interest
throughout the stated term of this Note.

     

    This Note
shall be governed by and construed in accordance with the laws of the State of
New Jersey.  The Borrower hereby submits to the nonexclusive
jurisdiction of the United States District Court and each state court in New
Jersey as determined appropriate by the Lender for the purposes of all legal
proceedings arising out of or relating to this Note. The Borrower irrevocably
waives, to the fullest extent permitted by law, any objection that it may now or
hereafter have to the laying of venue of any such proceeding brought in such a
court and any claim that any such proceeding brought in such a court has been
brought in an inconvenient forum.  The Borrower and the Lender by
acceptance of this Note hereby irrevocably waive any and all right to trial by
jury in any legal proceeding arising out of or relating to this
Note.

     

    THIS NOTE
AND ANY OTHER DOCUMENTS EXECUTED IN CONNECTION HEREWITH REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

     

     

    
      	 
      	 
      
	 
      	
              MIDDLESEX
      WATER COMPANY

            
	 
      	
              By:

            	
              /s/
      A. Bruce O’Connor

            
	 
      	
              Name:

            	
               A.
      Bruce O’Connor

            
	 
      	
              Title:

            	
               Vice
      President and Chief Financial Officer

            
	 
      	 
      


    

    


    


    WITNESS:

    


    Kenneth J.
Quinn