Document:

Exhibit 10.48

 

MIDDLESEX WATER COMPANY

NOTE

RELATING TO:

THE CONSTRUCTION FINANCING LOAN PROGRAM

OF THE NEW JERSEY INFRASTRUCTURE BANK

(f/k/a NEW JERSEY ENVIRONMENTAL INFRASTRUCTURE
TRUST)

 

	$43,474,714	         August 1, 2018

 

CFP-19-1

 

FOR VALUE RECEIVED,
MIDDLESEX WATER COMPANY, a corporation duly created and validly existing pursuant to the laws of the State (as hereinafter
defined), and its successors and assigns (the “Borrower”), hereby promises to pay to the order of the NEW JERSEY
INFRASTRUCTURE BANK (f/k/a 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 (as hereinafter defined) (the “I-Bank”),
the Principal (as hereinafter defined), together with all unpaid accrued Interest (as hereinafter defined), fees, late charges
and other sums due hereunder, if any, in lawful money of the United States of America, on the Maturity Date (as hereinafter defined)
or the date of any optional prepayment or acceleration in accordance with the provisions of this note (this “Note”).

 

SECTION 1.Definitions.
As used in this Note, unless the context requires otherwise, the following terms shall have the following meanings:

 

“Act”
means the “New Jersey 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 a fee of up to four-tenths of one percent (.40%) of that portion of the Principal identified in clause (i)
of the definition thereof (as set forth in this Section 1), or such lesser amount, if any, as the I-Bank may determine from time
to time.

 

“Anticipated Financing
Program” means the financing program of the I-Bank, pursuant to which the I-Bank will issue its I-Bank Bonds for the
purpose of financing, on a long term basis, the Project and other projects of certain qualifying borrowers.

 

“Anticipated Long
Term Loan” means the long term loan made by the I-Bank to the Borrower from the proceeds of its I-Bank Bonds, as part
of the Anticipated Financing Program.

 

“Appropriation
Condition” means the procedural appropriation by the State for the Project through the inclusion of the Project on the
Project Priority List (which Project Priority List is required pursuant to the Act) in an appropriation amount equal to or greater
than the Principal amount of the Loan then due and payable by the Borrower pursuant to the terms hereof.

 

     

     

    

“Authorized Officer”
means any person authorized by the Borrower or the I-Bank, as the case may be, to perform any act or execute any document relating
to the Loan or this Note.

 

“Borrower Note
Resolution” means the resolution of the Borrower’s Board of Directors adopted on April 24, 2018, as amended and
supplemented from time to time, pursuant to which this Note has been issued, and entitled:.

 

RESOLUTION OF MIDDLESEX WATER COMPANY,
DETERMINING THE FORM AND OTHER DETAILS OF ITS “NOTE RELATING TO THE CONSTRUCTION FINANCING PROGRAM OF THE NEW JERSEY INFRASTRUCTURE
BANK”, TO BE ISSUED IN THE PRINCIPAL AMOUNT OF UP TO $57.0 MILLION, AND PROVIDING FOR THE ISSUANCE AND SALE OF SUCH NOTE
TO THE NEW JERSEY INFRASTRUCTURE BANK, AND AUTHORIZING THE EXECUTION AND DELIVERY OF SUCH NOTE BY MIDDLESEX WATER COMPANY IN FAVOR
OF THE NEW JERSEY INFRASTRUCTURE BANK, ALL PURSUANT TO THE NEW JERSEY INFRASTRUCTURE BANK CONSTRUCTION FINANCING PROGRAM.

 

 

“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 allocable to the Project, as shall be determined on a project-specific basis in accordance with the
Regulations, as further set forth in Exhibit B hereto, (i) as such Exhibit B shall be supplemented by an Authorized Officer of
the I-Bank by means of either a substitute Exhibit B or an additional Exhibit B, such supplement to be implemented concurrently
with the supplement to Exhibit A-1 hereto (as provided in the definition of “Project” as set forth herein), and (ii)
as the then-current Exhibit B may be amended by subsequent changes to eligible costs as evidenced by a certificate of an Authorized
Officer of the I-Bank.

 

“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, for
which the Borrower is receiving the Loan.

 

“Event of Default”
means any occurrence or event specified in Section 6 hereof.

 

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“Fund Portion”
means, on any date, an amount equal to seventy-five percent (75%) of the Principal of the Loan on such date, exclusive of that
portion of the Principal of the Loan that is allocable to the NJDEP Loan Origination Fee, which NJDEP Loan Origination Fee shall
be financed exclusively from the I-Bank Portion.

 

“I-Bank Bonds”
means the revenue bonds of the I-Bank to be issued, as part of the Anticipated Financing Program.

 

“I-Bank Portion”
means, on any date, an amount equal to the aggregate of (i) twenty-five percent (25%) of the Principal of the Loan on such date,
exclusive of that portion of the Principal of the Loan that is allocable to the NJDEP Loan Origination Fee, plus (ii) one hundred
percent (100%) of that portion of the Principal of the Loan that is allocable to the NJDEP Loan Origination Fee.

 

“I-Bank Portion
Interest Rate” means, with respect to each disbursement of proceeds of the I-Bank Portion of the Loan, (a) to the extent
that such disbursement is funded from moneys appropriated to the I-Bank, for the Construction Financing Loan Program of the I-Bank,
pursuant to an appropriations act of the State, the I-Bank Portion Interest Rate shall equal 0.00%, (b) to the extent that such
disbursement is funded from available moneys of the I-Bank that are neither (i) appropriated to the I-Bank as provided by the preceding
clause (a), nor (ii) borrowed from a financial institution pursuant to a line of credit or other similar financial instrument as
provided by the succeeding clause (c), the I-Bank Portion Interest Rate shall equal the interest rate that is published as either
the Thompson Financial TM3 “AAA” Municipal Market Data General Obligation Index (AMT) or the “BVAL” Index
(relating to alternative minimum tax credits) of Bloomberg L.P. (or any subsidiary thereof), (with the particular index that is
used by the I-Bank to be selected by an Authorized Officer of the I-Bank) or, if such indexes are no longer published on such date,
such successor index as may be selected by an Authorized Officer of the I-Bank, in each case for the number of years that corresponds
to the length of time from the date such disbursement is made available to the Borrower by the I-Bank to the Maturity Date, rounding
up to the nearest year, or (c) to the extent that such disbursement is funded from available moneys of the I-Bank borrowed from
a financial institution pursuant to a line of credit or other similar financial instrument, the I-Bank Portion Interest Rate shall
equal the actual rate of interest established by the applicable financial institution pursuant to a competitive or negotiated solicitation
by the I-Bank with respect to such line of credit or other financial instrument.

 

“Interest”
means the interest charged on the outstanding Principal of the Loan at a rate of (a) with respect to the I-Bank Portion of the
Principal, the applicable I-Bank Portion Interest Rate and (b) with respect to the Fund Portion of the Principal, 0.00%, and payable
by the Borrower to the I-Bank (i) on the Maturity Date or (ii) with respect to any optional prepayment or acceleration of the Loan
pursuant to the terms of this Note, on the date of such optional prepayment or acceleration, as the case may be.

 

“Loan”
means the loan of the Principal, made by the I-Bank to the Borrower to finance or refinance a portion of the Cost of the Project,
as evidenced by this Note.

 

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“Loan Disbursement
Requisition” means the requisition, to be executed by an Authorized Officer of the Borrower and approved by the NJDEP,
in a form to be determined by the I-Bank and the NJDEP.

 

“Maturity Date”
means December 31, 2021, or (i) such earlier date as shall be determined by an Authorized Officer of the I-Bank in his or her sole
discretion, which date shall be determined by such Authorized Officer of the I-Bank to be the date of the closing for the Anticipated
Financing Program (subject, in all events, to the rights and remedies of the I-Bank pursuant to, respectively, the provisions of
Section 6 hereof and the provisions of Section 7 hereof in furtherance of the enforcement by the I-Bank of all covenants obligations
of the Borrower hereunder, including, without limitation and in particular, the covenant obligation of the Borrower set forth in
Section 3(a) hereof), or (ii) such later date (subject to the then-applicable limits of the Act) to be determined by an Authorized
Officer of the I-Bank in his or her sole discretion, pursuant to a written certification thereof, as acknowledged and approved
by an Authorized Officer of the Borrower.

 

“NJDEP”
means the New Jersey Department of Environmental Protection.

 

“NJDEP Loan Origination
Fee” means the “NJDEP Fee” as referenced and defined in Exhibit B hereto, which NJDEP Fee is an administrative
fee that is payable by the Borrower to the NJDEP as a portion of the Cost of the Project that has been incurred by the Borrower
for engineering and environmental services provided to the Borrower by the NJDEP.

 

“Principal”
means the principal amount of the Loan, at any time being the lesser of (i) Forty Three Million Four Hundred Seventy Four Thousand
Seven Hundred Fourteen Dollars ($43,474,714), or (ii) the aggregate outstanding amount as shall actually be disbursed to the Borrower
by the I-Bank pursuant to one or more Loan Disbursement Requisitions, which Principal shall be payable by the Borrower to the I-Bank
(i) on the Maturity Date or (ii) with respect to any optional prepayment or acceleration of the Loan pursuant to the terms of this
Note, on the date of such optional prepayment or acceleration, as the case may be.

 

“Project”
means the Environmental Infrastructure Facilities of the Borrower which constitutes a project for which the I-Bank is making the
Loan to the Borrower, as further described in Exhibit A-1 hereto; provided, however, that the description of the Project, as set
forth in Exhibit A-1 attached hereto, shall be supplemented by means of either (i) the substitution of a revised and updated Exhibit
A-1 for the current Exhibit A-1 or (ii) the inclusion of an additional Exhibit A-1, in either case, promptly following the certification
for funding by the NJDEP of the remaining components of the Project, as applicable, such supplement to be undertaken by an Authorized
Officer of the I-Bank.

 

“Regulations”
means the rules and regulations, as applicable, now or hereafter promulgated pursuant to 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.

 

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SECTION 2.Representations
of the Borrower. The Borrower represents and warrants to the I-Bank:

 

(a)       Organization. The Borrower:
(i) is a corporation duly created and validly existing under and pursuant to the Constitution and laws of the State, including
the Business Corporation Law; (ii) has full legal right and authority to execute, attest and deliver this Note, to authorize the
authentication of this Note, to sell this Note to the I-Bank, and to perform its obligations hereunder, and (iii) has duly authorized,
approved and consented to all necessary action to be taken by the Borrower for: (A) the issuance of this Note, the authentication
of this Note, the sale thereof to the I-Bank and the due performance of its obligations hereunder and (B) the execution, delivery
and due performance of all certificates and other instruments that may be required to be executed, delivered and performed by the
Borrower in order to carry out and give effect to this Note.

 

(b)       Authority. This Note
has been duly authorized by the Borrower, and duly executed, attested and delivered by Authorized Officers of the Borrower, and
duly authenticated by the trustee or the paying agent pursuant to the Borrower Note Resolution. This Note has been duly sold by
the Borrower to the I-Bank and duly issued by the Borrower and constitutes a legal, valid and binding obligation of the Borrower,
enforceable against the Borrower in accordance with its 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.

 

(c)       Pending
Litigation. There are no proceedings pending or, to the knowledge of the Borrower, threatened against or affecting the Borrower
that, if adversely determined, would adversely affect (i) the condition (financial or otherwise) of the Borrower, (ii) the adoption
of the Borrower Note Resolution, (iii) the ability of the Borrower to satisfy all of its Loan repayment obligations hereunder,
(iv) the authorization, execution, attestation, authentication or delivery of this Note, (v) the issuance of this Note and the
sale thereof to the I-Bank, and (vi) the Borrower’s ability otherwise to observe and perform its duties, covenants, obligations
and agreements under this Note.

 

(d)       Compliance
with Existing Laws and Agreements; Governmental Consent. (i) The authorization, execution, attestation and delivery of this
Note by the Borrower, (ii) the authentication of this Note by the trustee or paying agent pursuant to the Borrower Note Resolution,
(iii) the adoption of the Borrower Note Resolution, (iv) the sale of this Note to the I-Bank, (v) the observation and performance
by the Borrower of its duties, covenants, obligations and agreements hereunder, including, without limitation, the repayment of
the Loan and all other amounts due hereunder, and (vi) the undertaking and completion of the Project, will not (A) 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 ordinance or 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 

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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 are subject. The Borrower has obtained all permits and approvals required to date by any
governmental body or officer for the authorization, execution, attestation, authentication and delivery of this Note, for the sale
of this Note to the I-Bank, for the making, observance and performance by the Borrower of its duties, covenants, obligations and
agreements under this Note, and for the undertaking and completion of the Project.

 

(e)       Reliance.
The Borrower hereby acknowledges that the I-Bank is making the Loan to the Borrower pursuant to the terms hereof in reliance upon
each of the representations of the Borrower set forth in this Section 2.

 

SECTION 3.
Covenants of the Borrower.

 

(a)       Participation
in the Anticipated Financing Program. The Borrower covenants and agrees that it shall undertake and complete in a timely manner
all conditions precedent identified by the I-Bank relating to (i) the participation by the Borrower in the Anticipated Financing
Program and (ii) the qualification by the Borrower for receipt of the Anticipated Long Term Loan.

 

(b)       Pledge.
The Borrower unconditionally and irrevocably promises to make the Loan repayments in accordance with the terms of, and to the extent
provided in, the Borrower Note Resolution for the punctual repayment of the Loan and all other amounts due pursuant to this terms
of this Note.

 

(c)       Disposition
of Environmental Infrastructure System. The Borrower covenants and agrees that it shall not sell, lease, abandon or otherwise
dispose of all or substantially all of its Environmental Infrastructure System without the express written consent of the I-Bank,
which consent may or may not be granted by the I-Bank in its sole discretion.

 

(d)       Financing
With Tax-Exempt Bonds. The Borrower acknowledges, covenants and agrees that it is the intention of the Borrower to finance
the Project on a long term basis with proceeds of I-Bank Bonds now or hereinafter issued, the interest on which is excluded from
gross income for purposes of federal income taxation pursuant to Section 103(a) of the Code (“tax-exempt bonds”). In
furtherance of such long term financing with tax-exempt bonds, the Borrower covenants that, except to the extent expressly permitted
in writing by the I-Bank, the Borrower will not take any action or permit any action to be taken which would result in any of the
proceeds of the Loan being used (directly or indirectly) to make or finance loans to persons other than the Borrower. In addition,
the Borrower covenants and agrees that (i) all of the proceeds of the Loan will be used to pay costs of an exempt facility, within
the meaning of Section 142 of the Code, which were paid and incurred by the Borrower no more than 60 days before the date on which
the I-Bank adopted a declaration of intent with respect to the Project, and (ii) no portion of the Project will be investment property,
within the meaning of Section 148(b) of the Code. The Borrower covenants and agrees that any Costs to be paid or reimbursed with
proceeds of the Loan will result in the expenditure of proceeds under Treasury Regulations

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 §1.148-6(d) and Treasury Regulations
§1.150-2, for costs subject to the allowance for depreciation provided in Section 167 of the Code which are chargeable to
the capital account of the Borrower with respect to such exempt facility.

 

(e)       Operation
and Maintenance of Environmental Infrastructure System. The Borrower covenants and agrees that it shall maintain its Environmental
Infrastructure System in good repair, working order and operating condition, and make all necessary and proper repairs and improvements
with respect thereto.

 

(f)       Records
and Accounts; Inspections. The Borrower covenants and agrees that it shall keep accurate records and accounts for its Environmental
Infrastructure System, separate and distinct from its other records and accounts, which shall be audited annually by an independent
registered certified public accountant and shall be made available for inspection by the I-Bank upon prior written notice. The
Borrower shall permit the I-Bank to inspect the Environmental Infrastructure System.

 

(g)       Insurance.
The Borrower covenants and agrees that it shall maintain insurance policies providing against risk of direct physical loss, damage
or destruction of its Environmental Infrastructure System, in an amount that will satisfy all applicable regulatory requirements.
The Borrower covenants and agrees that it shall include, or cause to be included, the I-Bank as an additional “named insured”
on any certificate of liability insurance procured by the Borrower and by any contractor or subcontractor for the Project.

 

(h)       Reliance.
The Borrower hereby acknowledges that the I-Bank is making the Loan to the Borrower pursuant to the terms hereof in reliance upon
each of the covenants of the Borrower set forth in this Section 3.

 

SECTION 4. Disbursement of the Loan Proceeds;
Amounts Payable; Prepayment; and Late Fee. 

 

(a)       The
I-Bank shall effectuate the Loan to the Borrower by making one or more disbursements to the Borrower promptly after receipt by
the I-Bank of a Loan Disbursement Requisition and the approval of such Loan Disbursement Requisition by an Authorized Officer of
the I-Bank or designee thereof, each such disbursement and the date thereof to be recorded by an Authorized Officer of the I-Bank
on the table attached as Exhibit A-2 hereto; provided, however, that the approval by the I-Bank of any Loan Disbursement Requisition
for disbursement pursuant to the terms hereof shall be subject to the terms, conditions and limitations as set forth in Section
4(b) of this Note. It is expected that the proceeds of the Loan will be disbursed to the Borrower in accordance with Exhibit C
hereto, as Exhibit C shall be supplemented by an Authorized Officer of the I-Bank by means of either a substitute Exhibit C or
an additional Exhibit C, such supplement to be implemented concurrently with the supplement to Exhibit A-1 hereto (as provided
in the definition of “Project” as set forth herein). The latest date upon which the Borrower may submit to the I-Bank
a Loan Disbursement Requisition is the business day immediately preceding the date fixed by the I-Bank for the sale of its bonds
in connection with the Anticipated Financing Program, or such alternative date as shall be identified by the I-Bank for the Borrower
in writing. On the Maturity Date, the Borrower shall 

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repay the Loan to the I-Bank in an amount equal to: (i) the Principal; (ii)
the Interest; (iii) the Administrative Fee, if any; and (iv) any other amounts due and owing pursuant to the provisions of this
Note. The Borrower may prepay the Loan obligations hereunder, in whole or in part, upon receipt of the prior written consent of
an Authorized Officer of the I-Bank. Each payment made to the I-Bank shall be applied to the payment of, first, the Interest then
due and payable, second, the Principal, third, the Administrative Fee, if any, fourth, any late charges, and, finally, any other
amount due pursuant to the provisions of this Note. In the event that the repayment obligation set forth in this Note is received
by the I-Bank later than the Maturity Date, a late fee shall be payable to the I-Bank in an amount equal to the greater of twelve
percent (12%) per annum or the prime rate as published in the Wall Street Journal on the Maturity Date plus one half of one percent
per annum on such late payment from the Maturity Date to the date it is actually paid; provided, however, that any late payment
charges incurred hereunder shall not exceed the maximum interest rate permitted by law. Notwithstanding the provisions of this
Section 4(a) to the contrary, the Borrower hereby acknowledges and agrees that, on the date of issuance of this Note, a disbursement
shall be made and shall be recorded by an Authorized Officer of the I-Bank on the table attached as Exhibit A-2 hereto in the amount
recorded thereon. Such disbursement shall be made for the purpose of funding fifty percent (50%) of the NJDEP Loan Origination
Fee. Such disbursement shall be paid by the I-Bank on behalf of the Borrower directly to the NJDEP in satisfaction of the provisions
hereof.

 

(b)       Notwithstanding
the provisions of this Note to the contrary with respect to the funding, pursuant to this Section 4, of any Loan Disbursement Requisition
relating to all or any portion of the Project: (i) the Borrower hereby acknowledges and agrees that the I-Bank shall not, and shall
not be required to, commit funds, pursuant to the Construction Financing Loan Program of the I-Bank, to any portion of the Project
until such time as the particular portion of the Project in question has been certified for funding by the NJDEP; (ii) no Loan
Disbursement Requisition shall be approved by the I-Bank for disbursement pursuant to this Section 4 unless and until the portion
of the Project to which such Loan Disbursement Requisition relates has been certified for funding by the NJDEP; (iii) no Loan Disbursement
Requisition shall be approved by the I-Bank for disbursement pursuant to this Section 4 unless and until the Appropriation Condition
has been satisfied to an extent and in an amount that is sufficient to fund, in the aggregate, the particular Loan Disbursement
Requisition in question and all prior Loan Disbursement Requisitions; and (iv) the I-Bank has no obligation pursuant to this Note
to make all or any portion of any Loan Disbursement Requisition disbursement pursuant to the provisions of this Section 4 if the
Borrower lacks the authority to pay interest on this Note in an amount equal to the I-Bank Portion Interest Rate.

 

SECTION 5. 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 whatsoever while any Loan repayments, or any other payments due hereunder, remain unpaid, 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 I-Bank to perform and observe any agreement or any duty, liability or obligation arising out of this Note, or any rights
of set-off, recoupment, abatement or counterclaim that the Borrower might have against the I-Bank or any other party; provided,
however, that payments hereunder shall not constitute a waiver of any such rights.

 

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SECTION 6. Events of
Default. The following events shall constitute an “Event of Default” hereunder: (i) failure by the Borrower to
pay, when due, any and all of its Loan repayment obligations hereunder, and any other payment obligations due hereunder; (ii) failure
by the Borrower to observe and perform any duty, covenant, obligation or agreement on its part to be observed or performed pursuant
to the terms of this Note; (iii) any representation made by the Borrower contained in this Note or in any instrument furnished
in compliance with or with reference to this Note is false or misleading in any material respect; and (iv) 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 Note 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 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.

 

SECTION 7. Remedies
upon Event of Default. Whenever an Event of Default shall have occurred and be continuing pursuant to the terms hereof, the
Borrower hereby acknowledges and agrees to the rights of the I-Bank to take any action permitted or required at law or in equity
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. If an Event of Default shall have occurred, the Borrower hereby acknowledges
and agrees that the I-Bank shall have the right to (i) immediately cease disbursements of the proceeds of the Loan, and/or (ii)
declare all Loan repayments and all other amounts due hereunder to be due and payable immediately without further notice or demand.
The Borrower hereby acknowledges and agrees that no remedy herein is intended to be exclusive, and every remedy shall be cumulative
and in addition to every other remedy given under this Note or now or hereafter existing at law or in equity. The Borrower hereby
further acknowledges and agrees that no delay or omission by the I-Bank to exercise any remedy or right accruing upon any Event
of Default shall impair any such remedy or right or shall be construed to be a waiver thereof, but any such remedy or right may
be exercised as often as may be deemed expedient. The Borrower hereby further acknowledges and agrees that, pursuant to the “New
Jersey Infrastructure Bank Credit Policy”, adopted by the Board of Directors of the I-Bank, and as further amended and supplemented
from time to time (the “Credit Policy”), during such time as an Event of Default has occurred and is continuing hereunder,
the Borrower shall be ineligible for additional financial assistance from the I-Bank, in addition to certain other consequences
set forth in the Credit Policy. The Borrower hereby agrees that upon demand it shall pay to the I-Bank 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 in the collection of Loan repayments or any sum due hereunder or in the enforcement of the observation
or performance of any obligations or agreements of the Borrower upon an Event of Default. Any moneys collected by the I-Bank pursuant
to this Section 7 shall be applied first to pay any attorneys’ fees or other fees and expenses owed by the Borrower.

 

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SECTION 8. Certain Miscellaneous
Provisions. The Borrower hereby acknowledges and agrees as follows: (a) all notices hereunder shall be deemed given when hand
delivered or when mailed by registered or certified mail, postage prepaid, to the Borrower at the following address: Middlesex
Water Company, 1500 Ronson Road, Iselin, New Jersey 08830-0452, Attention: A. Bruce O’Connor, Vice President, Treasurer and
Chief Financial Officer;; and to the I-Bank at the following address: New Jersey Infrastructure Bank, 3131 Princeton Pike, Building
4, Suite 216, Lawrenceville, New Jersey 08648-2201, Attention: Executive Director; (b) this Note shall be binding upon the Borrower
and its successors and assigns; (c) in the event any provision of this Note is 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;
(d) the obligations of the Borrower pursuant to the terms of this Note may not be assigned by the Borrower for any reason, unless
the I-Bank shall have approved said assignment in writing; (e) this Note may not be amended, supplemented or modified without the
prior written consent of the I-Bank; (f) this Note shall be governed by and construed in accordance with the laws of the State;
(g) the Borrower shall, at the request of the I-Bank, execute and deliver such further 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 Note; and (h) whenever the Borrower is required to obtain the determination, approval or consent of the I-Bank
pursuant to the terms hereof, such determination, approval or consent may be either granted or withheld by the I-Bank in its sole
and absolute discretion.

 

 

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intentionally.]

    10 

     

    

IN WITNESS WHEREOF,
the Borrower has caused this Note to be duly executed, sealed and delivered on the date first above written.

 

	 	MIDDLESEX WATER COMPANY
	 	 	 
	 	 	 
	[SEAL]	 	 
	 	By: 	/s/ A. Bruce O’Connor
	ATTEST:	 	A. Bruce O’Connor
	 	 	Vice President, Treasurer
	 	 	And Chief Financial Officer

 

 

 

/s/ Jay L. Kooper

Jay L. Kooper, Esq.

Vice President, General 

Counsel and Secretary

 

 

 

    11 

     

    

EXHIBIT A-1

 

		1)	Name and Address of Local Unit:

 

Middlesex Water Company

500 Ronson Road

Iselin, New Jersey 08830

 

Attention: Richard M. Risoldi, Vice
President Operations

 

		2)	Description of and Rationale for the Project:

 

The project consists of the installation
of a 42 inch diameter cement-lined ductile iron (CLDIP) pipe transmission main beginning at the Carl J. Olsen Water Treatment Plant
within the Township of Edison and terminating at the intersection of Jersey and Durham Avenues within the Borough of Metuchen.
This main will consist of the provision of ~24,512 linear feet of CLDIP and the retention of ~1915 linear feet of existing 42 inch
diameter ductile iron pipe (DIP). The project also includes the installation of two proposed flow control structures comprising
440 linear feet of 30-inch and 170 linear feet of 48-inch DIP at the Water Treatment Plant, and the provision of valves and appurtenances
ancillary to the construction of the transmission main.

 

The existing 48-inch diameter transmission
main from the Water Treatment Plant is the only feed presently capable of supplying potable water to the distribution system. Any
disruption of this transmission main would severely impact the ability to deliver sufficient potable water supply. This project
would create a redundant feed from the plant to the distribution system.

 

The overall project consists of
three (3) building contracts. Zero (0) contracts have previously received authorization to award. This exhibit pertains to contracts
1, 2 and 3 of 3.

 

		3)	Description of the Water Distribution System:

 

The Middlesex Water Company is a
publicly-owned water utility that provides water service to retail customers primarily in eastern Middlesex County. Water services
are furnished to approximately 59,000 retail customers located in an area of approximately 55 square miles of New Jersey in Woodbridge
Township, the Boroughs of Metuchen and Carteret, portions of Edison Township, Borough of South Plainfield, and the City of South
Amboy in Middlesex County; and a small portion of the Township of Clark in Union County.

 

The Company obtains water from both surface
and groundwater sources; however, the principal source of supply is the Delaware and Raritan Canal (owned by the State of New Jersey
and operated as a water resource by the New Jersey Water Supply Authority).

 

 

    12 

     

    

 

 

EXHIBIT A-2

 

Loan Disbursements

 

 

	Date of Loan

 Disbursement	
        Amount of Disbursement:

        I-Bank Portion
	
        Amount of 

        Disbursement:

        Fund Portion

	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

 

 

 

    13 

     

    

 

 

EXHIBIT B

 

Basis for the Determination of Allowable
Costs

 

The determination of the costs allowable for
assistance from the New Jersey Water Bank is presented below:

 

 

	Cost Classification	 	Application 
Amount	 	 	Allowable

 Amount	 	 	CLP Allowable

Amount	 
	1.  Administrative Expenses	 	$	915,000	 	 	$	1,151,531	 	 	$	1,151,531	 
	2.  Other Costs	 	$	0	 	 	$	0	 	 	$	0	 
	3.  Engineering Fees	 	$	3,660,000	 	 	$	753,710	 	 	$	753,710	 
	4.  Building Costs	 	$	30,500,000	 	 	$	38,384,350	 	 	$	38,384,350	 
	5.  Contingencies	 	$	1,525,000	 	 	$	1,919,218	 	 	$	1,919,218	 
	6.  Planning and Design	 	$	400,000	 	 	$	835,462	 	 	$	835,462	 
	7.  Sub-Total	 	$	37,000,000	 	 	$	43,044,271	 	 	$	43,044,271	 
	8.  DEP Fee (Financed Portion (50%))	 	 	 	 	 	$	430,443	 	 	$	430,443	 
	9.  Total Project Costs	 	$	37,000,000	 	 	$	43,474,714	 	 	$	43,474,714	 
	10. CLP Loan Amount	 	 	 	 	 	 	 	 	 	$	43,474,714	 

 

 

As a result of the review by the New Jersey
Department of Environmental Protection (“DEP”), various line items may have been revised resulting in a change of the
allowable costs for this project. The basis for the determination of the allowable costs is as follows:

 

 

		1.	Administrative Expenses:

 

The total amount requested for this
line item on the application was $915,000. The allowable administrative expense is authorized to be 3% of the total allowable building
costs (Line Item No. 4). Therefore, the amount for the administrative line item is $38,384,350 x 0.03 = $1,151,531.

 

Allowable Administrative Expenses
are $1,151,531.

 

		2.	Other Costs:

 

The amount requested for this line
item on the application was $0. Therefore, the total allowable amount for this line item is $0.

 

Allowable Other Costs are $0.

    14 

     

    

 

		3.	Engineering Fees:

 

The amount requested for this line
item on the application was $3,660,000. Middlesex Water Company will utilize both the services of CDM Smith, Inc. and “in
house” (Force Account) engineering and inspection personnel. The scope of work and costs for CDM Smith’s services are
stipulated within Professional Services Agreement dated March 17, 2014 and subsequent amendments between the Company and CDM Smith
through Change Order No. 6 not to exceed $1,227,560. Work in phases 2 and 3 in the amount of $45,035 and $790,427 are allocated
to the Planning and Design Line Item $835,462 ($45,035 + $790,427). The remaining costs for phases 4, 5 and 6 in the amount of
$392,098 ($1,227,560 - $835,462) are allocated to the Engineering Fees Line Item. In addition, the estimated costs for Force Account
engineering services are $361,612. The sum of these two (2) amounts is $753,710 ($392,098 + $361,612). Documentation regarding
both CDM Smith and Force Account services have been reviewed and approved by the DEP. Therefore,

 

Allowable Engineering Fees are $753,710.

 

		4.	Building Costs:

 

The amount requested for this line
item on the application was $30,500,000. The allowable

amount based upon the low bid received
is $10,634,500 for Contract 1 of 3, $13,825,000 for Contract 2 of 3, $13,924,850 for Contract 3 of 3. The sum of these three (3)
contacts is $38,384,350. Therefore,

 

Green Project Reserve (GPR) Funding:
Green Infrastructure - $0.

	  	     Energy Efficiency- $0.
	 	     Water Efficiency - $0.
	 	     Green Innovative - $0.

 

Allowable Building Costs are $38,384,350.

 

		5.	Contingencies:

 

The amount requested for this line
item on the application was $1,525,000. The allowable amount is authorized to be 5% of the allowable building cost. Therefore,
the allowable amount for this line item is $38,384,350 x 0.05 = $1,919,218.

 

Allowable Contingencies are $1,919,218.

 

		6.	Planning and Design:

 

The amount requested for this line
item on the application was $400,000. The Agreement for Professional Services between Middlesex Water Company and CDM Smith Inc.
dated March 17, 2014 and subsequent amendments in the amount of $835,462 for phases nos. 2 and 3 have been found acceptable by
the DEP.

 

    15 

     

    

Costs for this line item will
be reimbursed based on DEP approval of actual documented project expenses for planning and design services. Therefore,

 

Planning and Design Line Item is
$835,462.

 

		7.	Sub-Total:

 

The total amount applied for was
$37,000,000. The Sub-Total amount based on the low bid received is $43,044,271.

 

		8.	Department Loan Surcharge or Loan Origination Fee:

 

This item represents
the DEP Loan Surcharge or Loan Origination Fee imposed by DEP as a portion of the cost of the project of the borrower. This DEP
Loan Surcharge or Loan Origination Fee is a portion of the cost of the project that has been incurred for engineering and environmental
services provided by DEP for the borrower in connection with, and as a condition precedent to, the inclusion of the project of
the borrower in the SFY2019 New Jersey Water Bank of the New Jersey Infrastructure Bank (the “I-Bank”), 50% of which
will be financed for the Borrower as part of the I-Bank Construction Loan.

 

DEP Fee = $43,044,271 x 2% = $860,886.

 

$860,886 x .50 = $430,443
(financed through the Construction Loan and paid to DEP upon closing of the Construction Loan).

 

		9.	Total Project Costs:

 

The total project costs are
(loan amount + Department Fee) $43,474,714.

 

		10.	CLP Loan Amount:

 

The CLP Loan Amount is $43,474,714.

 

 

    16 

     

    

Exhibit C

 

1. Disbursement Schedule

 

The following is a schedule of the estimated
disbursements for this loan. Disbursements to the Borrower for any given month shall not exceed the amounts indicated below plus
any undisbursed from the previous months.

 

	Year	Month	 	DEP Fee (I-Bank to make payment)	Total       
	 	 	 	 	 
	2018	August	       	*430,443	 
	 	August	 	 	$4,000,000
	 	September	 	 	$4,000,000
	 	October	 	 	$4,000,000
	 	November	 	 	$3,000,000
	 	December	 	 	$3,000,000
	 	 	 	 	 
	2019	January	 	 	$3,000,000
	 	February	 	 	$3,000,000
	 	March	 	 	$3,000,000
	 	April	 	 	$3,000,000
	 	May	 	 	$2,000,000
	 	June	 	 	$2,000,000
	 	July	 	 	$2,000,000
	 	August	 	 	$2,000,000
	 	September	 	 	$2,000,000
	 	October	 	 	$1,000,000
	 	November	 	 	$1,000,000
	 	December	 	 	$1,000,000
	 	 	 	 	 
	2020	January	 	 	$44,271
	 	 	 	 	 
	Total	 	 	$430,443	$43,044,271
	 	 	 	 	 

 

* This represents that portion (50%) of the
DEP Loan Surcharge or Loan Origination Fee that has been financed for the Borrower through the I- Bank Loan. No action is required
on the part of the borrower with respect to the payment to DEP of the DEP Loan Surcharge or Loan Origination Fee. The I-Bank will
address, or already has addressed, the implementation of this disbursement.

    17 

     

    

2.     Project Schedule

 

The Borrower shall expeditiously
initiate and complete the project in accordance with the project schedule which was submitted as part of the loan application repeated
below. Failure to promptly initiate and complete the Project may result in the imposition of sanctions under N.J.A.C. 7:22-3.40
through 3.44 and N.J.A.C. 7:22-4.40 through 4.44. In addition, failure to promptly award all subagreement(s) for building the Project
within 12 months of the date of this loan may result in a limitation on allowable costs as provided by N.J.A.C. 7:22-5.4(d) 4.
This limitation provides that costs incurred under contracts awarded after 12 months from the date of this loan are unallowable
unless a specific extension has been granted by DEP, in the case of a Fund Loan, and the I-Bank, in the case of an I-Bank Loan.

 

	EVENT	DATE
	 	 
	Advertisement:	 
	
        Western Transmission Main Contract 01P-13-308-A

        Western Transmission Main Contract 01P-13-308-B

        Western Transmission Main Contract 01P-13-308-C
	
        December 20, 2017

        December 20, 2017

        December 20, 2017

	 	 
	Bid Receipt:	 
	
        Western Transmission Main Contract 01P-13-308-A

        Western Transmission Main Contract 01P-13-308-B

        Western Transmission Main Contract 01P-13-308-C
	
        February 2, 2018

        February 2, 2018

        February 2, 2018

	 	 
	Award:	 
	
        Western Transmission Main Contract 01P-13-308-A

        Western Transmission Main Contract 01P-13-308-B

        Western Transmission Main Contract 01P-13-308-C
	
        March 6, 2018

        March 6, 2018

        March 6, 2018

	 	 
	Issuance of Notice to Proceed:	 
	
        Western Transmission Main Contract 01P-13-308-A

        Western Transmission Main Contract 01P-13-308-B

        Western Transmission Main Contract 01P-13-308-C
	
        March 29, 2018

        March 29, 2018

        March 29, 2018

	 	 
	Completion of Construction:	 
	
        Western Transmission Main Contract 01P-13-308-A

        Western Transmission Main Contract 01P-13-308-B

        Western Transmission Main Contract 01P-13-308-C
	
        January 18, 2020

        January 18, 2020

        January 18, 2020

	 	 
	Initiation of Operation:	 
	
        Western Transmission Main Contract 01P-13-308-A

        Western Transmission Main Contract 01P-13-308-B

        Western Transmission Main Contract 01P-13-308-C
	
        January 18, 2020

        January 18, 2020

        January 18, 2020

	 	 
	Project Performance Certification:	 
	
        Western Transmission Main Contract 01P-13-308-A

        Western Transmission Main Contract 01P-13-308-B

        Western Transmission Main Contract 01P-13-308-C
	
        January 18, 2021

        January 18, 2021

        January 18, 2021

 

    18Exhibit 10.49

 

MIDDLESEX WATER COMPANY

NOTE

RELATING TO:

THE CONSTRUCTION FINANCING LOAN PROGRAM

OF THE NEW JERSEY INFRASTRUCTURE BANK

(f/k/a NEW JERSEY ENVIRONMENTAL INFRASTRUCTURE
TRUST)

 

	$8,656,747	September 12, 2018

 

CFP-1

 

FOR VALUE RECEIVED,
MIDDLESEX WATER COMPANY, a corporation duly created and validly existing pursuant to the laws of the State (as hereinafter
defined), and its successors and assigns (the “Borrower”), hereby promises to pay to the order of the NEW JERSEY
INFRASTRUCTURE BANK (f/k/a 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 (as hereinafter defined) (the “I-Bank”),
the Principal (as hereinafter defined), together with all unpaid accrued Interest (as hereinafter defined), fees, late charges
and other sums due hereunder, if any, in lawful money of the United States of America, on the Maturity Date (as hereinafter defined)
or the date of any optional prepayment or acceleration in accordance with the provisions of this note (this “Note”).

 

SECTION 1.Definitions.
As used in this Note, unless the context requires otherwise, the following terms shall have the following meanings:

 

“Act”
means the “New Jersey 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 a fee of up to four-tenths of one percent (.40%) of that portion of the Principal identified in clause (i)
of the definition thereof (as set forth in this Section 1), or such lesser amount, if any, as the I-Bank may determine from time
to time.

 

“Anticipated Financing
Program” means the financing program of the I-Bank, pursuant to which the I-Bank will issue its I-Bank Bonds for the
purpose of financing, on a long term basis, the Project and other projects of certain qualifying borrowers.

 

“Anticipated Long
Term Loan” means the long term loan made by the I-Bank to the Borrower from the proceeds of its I-Bank Bonds, as part
of the Anticipated Financing Program.

 

“Appropriation
Condition” means the procedural appropriation by the State for the Project through the inclusion of the Project on the
Project Priority List (which Project Priority List is required pursuant to the Act) in an appropriation amount equal to or greater
than the Principal amount of the Loan then due and payable by the Borrower pursuant to the terms hereof.

 

    1 

     

    

“Authorized Officer”
means any person authorized by the Borrower or the I-Bank, as the case may be, to perform any act or execute any document relating
to the Loan or this Note.

 

“Borrower Note
Resolution” means the resolution of the Borrower’s Board of Directors adopted on January 23, 2018, as amended and
supplemented from time to time, pursuant to which this Note has been issued, and entitled:

 

RESOLUTION OF MIDDLESEX WATER COMPANY,
DETERMINING THE FORM AND OTHER DETAILS OF ITS “NOTE RELATING TO THE CONSTRUCTION FINANCING PROGRAM OF THE NEW JERSEY INFRASTRUCTURE
BANK”, TO BE ISSUED IN THE PRINCIPAL AMOUNT OF UP TO $14.0 MILLION, AND PROVIDING FOR THE ISSUANCE AND SALE OF SUCH NOTE
TO THE NEW JERSEY INFRASTRUCTURE BANK, AND AUTHORIZING THE EXECUTION AND DELIVERY OF SUCH NOTE BY MIDDLESEX WATER COMPANY IN FAVOR
OF THE NEW JERSEY INFRASTRUCTURE BANK, ALL PURSUANT TO THE NEW JERSEY INFRASTRUCTURE BANK CONSTRUCTION FINANCING PROGRAM.

 

 

“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 allocable to the Project, as shall be determined on a project-specific basis in accordance with the
Regulations, as further set forth in Exhibit B hereto, (i) as such Exhibit B shall be supplemented by an Authorized Officer of
the I-Bank by means of either a substitute Exhibit B or an additional Exhibit B, such supplement to be implemented concurrently
with the supplement to Exhibit A-1 hereto (as provided in the definition of “Project” as set forth herein), and (ii)
as the then-current Exhibit B may be amended by subsequent changes to eligible costs as evidenced by a certificate of an Authorized
Officer of the I-Bank.

 

“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, for
which the Borrower is receiving the Loan.

 

“Event of Default”
means any occurrence or event specified in Section 6 hereof.

 

    2 

     

    

“Fund Portion”
means, on any date, an amount equal to seventy-five percent (75%) of the Principal of the Loan on such date, exclusive of that
portion of the Principal of the Loan that is allocable to the NJDEP Loan Origination Fee, which NJDEP Loan Origination Fee shall
be financed exclusively from the I-Bank Portion.

 

“I-Bank Bonds”
means the revenue bonds of the I-Bank to be issued, as part of the Anticipated Financing Program.

 

“I-Bank Portion”
means, on any date, an amount equal to the aggregate of (i) twenty-five percent (25%) of the Principal of the Loan on such date,
exclusive of that portion of the Principal of the Loan that is allocable to the NJDEP Loan Origination Fee, plus (ii) one hundred
percent (100%) of that portion of the Principal of the Loan that is allocable to the NJDEP Loan Origination Fee.

 

“I-Bank Portion
Interest Rate” means, with respect to each disbursement of proceeds of the I-Bank Portion of the Loan, (a) to the extent
that such disbursement is funded from moneys appropriated to the I-Bank, for the Construction Financing Loan Program of the I-Bank,
pursuant to an appropriations act of the State, the I-Bank Portion Interest Rate shall equal 0.00%, (b) to the extent that such
disbursement is funded from available moneys of the I-Bank that are neither (i) appropriated to the I-Bank as provided by the preceding
clause (a), nor (ii) borrowed from a financial institution pursuant to a line of credit or other similar financial instrument as
provided by the succeeding clause (c), the I-Bank Portion Interest Rate shall equal the interest rate that is published as either
the Thompson Financial TM3 “AAA” Municipal Market Data General Obligation Index (AMT) or the “BVAL” Index
(relating to alternative minimum tax credits) of Bloomberg L.P. (or any subsidiary thereof), (with the particular index that is
used by the I-Bank to be selected by an Authorized Officer of the I-Bank) or, if such indexes are no longer published on such date,
such successor index as may be selected by an Authorized Officer of the I-Bank, in each case for the number of years that corresponds
to the length of time from the date such disbursement is made available to the Borrower by the I-Bank to the Maturity Date, rounding
up to the nearest year, or (c) to the extent that such disbursement is funded from available moneys of the I-Bank borrowed from
a financial institution pursuant to a line of credit or other similar financial instrument, the I-Bank Portion Interest Rate shall
equal the actual rate of interest established by the applicable financial institution pursuant to a competitive or negotiated solicitation
by the I-Bank with respect to such line of credit or other financial instrument.

 

“Interest”
means the interest charged on the outstanding Principal of the Loan at a rate of (a) with respect to the I-Bank Portion of the
Principal, the applicable I-Bank Portion Interest Rate and (b) with respect to the Fund Portion of the Principal, 0.00%, and payable
by the Borrower to the I-Bank (i) on the Maturity Date or (ii) with respect to any optional prepayment or acceleration of the Loan
pursuant to the terms of this Note, on the date of such optional prepayment or acceleration, as the case may be.

 

“Loan”
means the loan of the Principal, made by the I-Bank to the Borrower to finance or refinance a portion of the Cost of the Project,
as evidenced by this Note.

 

    3 

     

    

“Loan Disbursement
Requisition” means the requisition, to be executed by an Authorized Officer of the Borrower and approved by the NJDEP,
in a form to be determined by the I-Bank and the NJDEP.

 

“Maturity Date”
means June 30, 2022. or (i) such earlier date as shall be determined by an Authorized Officer of the I-Bank in his or her sole
discretion, which date shall be determined by such Authorized Officer of the I-Bank to be the date of the closing for the Anticipated
Financing Program (subject, in all events, to the rights and remedies of the I-Bank pursuant to, respectively, the provisions of
Section 6 hereof and the provisions of Section 7 hereof in furtherance of the enforcement by the I-Bank of all covenants obligations
of the Borrower hereunder, including, without limitation and in particular, the covenant obligation of the Borrower set forth in
Section 3(a) hereof), or (ii) such later date (subject to the then-applicable limits of the Act) to be determined by an Authorized
Officer of the I-Bank in his or her sole discretion, pursuant to a written certification thereof, as acknowledged and approved
by an Authorized Officer of the Borrower.

 

“NJDEP”
means the New Jersey Department of Environmental Protection.

 

“NJDEP Loan Origination
Fee” means the “NJDEP Fee” as referenced and defined in Exhibit B hereto, which NJDEP Fee is an administrative
fee that is payable by the Borrower to the NJDEP as a portion of the Cost of the Project that has been incurred by the Borrower
for engineering and environmental services provided to the Borrower by the NJDEP.

 

“Principal”
means the principal amount of the Loan, at any time being the lesser of (i) Eight Million Six Hundred Fifty Six Thousand Seven
Hundred Forty Seven Dollars ($8,656,747), or (ii) the aggregate outstanding amount as shall actually be disbursed to the Borrower
by the I-Bank pursuant to one or more Loan Disbursement Requisitions, which Principal shall be payable by the Borrower to the I-Bank
(i) on the Maturity Date or (ii) with respect to any optional prepayment or acceleration of the Loan pursuant to the terms of this
Note, on the date of such optional prepayment or acceleration, as the case may be.

 

“Project”
means the Environmental Infrastructure Facilities of the Borrower which constitutes a project for which the I-Bank is making the
Loan to the Borrower, as further described in Exhibit A-1 hereto; provided, however, that the description of the Project, as set
forth in Exhibit A-1 attached hereto, shall be supplemented by means of either (i) the substitution of a revised and updated Exhibit
A-1 for the current Exhibit A-1 or (ii) the inclusion of an additional Exhibit A-1, in either case, promptly following the certification
for funding by the NJDEP of the remaining components of the Project, as applicable, such supplement to be undertaken by an Authorized
Officer of the I-Bank.

 

“Regulations”
means the rules and regulations, as applicable, now or hereafter promulgated pursuant to 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.

 

    4 

     

    

SECTION 2.
Representations of the Borrower. The Borrower represents and warrants to the I-Bank:

 

(a)     Organization. The Borrower:
(i) is a corporation duly created and validly existing under and pursuant to the Constitution and laws of the State, including
the Business Corporation Law; (ii) has full legal right and authority to execute, attest and deliver this Note, to authorize the
authentication of this Note, to sell this Note to the I-Bank, and to perform its obligations hereunder, and (iii) has duly authorized,
approved and consented to all necessary action to be taken by the Borrower for: (A) the issuance of this Note, the authentication
of this Note, the sale thereof to the I-Bank and the due performance of its obligations hereunder and (B) the execution, delivery
and due performance of all certificates and other instruments that may be required to be executed, delivered and performed by the
Borrower in order to carry out and give effect to this Note.

 

(b)     Authority. This Note
has been duly authorized by the Borrower, and duly executed, attested and delivered by Authorized Officers of the Borrower, and
duly authenticated by the trustee or the paying agent pursuant to the Borrower Note Resolution. This Note has been duly sold by
the Borrower to the I-Bank and duly issued by the Borrower and constitutes a legal, valid and binding obligation of the Borrower,
enforceable against the Borrower in accordance with its 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.

 

(c)       Pending
Litigation. There are no proceedings pending or, to the knowledge of the Borrower, threatened against or affecting the Borrower
that, if adversely determined, would adversely affect (i) the condition (financial or otherwise) of the Borrower, (ii) the adoption
of the Borrower Note Resolution, (iii) the ability of the Borrower to satisfy all of its Loan repayment obligations hereunder,
(iv) the authorization, execution, attestation, authentication or delivery of this Note, (v) the issuance of this Note and the
sale thereof to the I-Bank, and (vi) the Borrower’s ability otherwise to observe and perform its duties, covenants, obligations
and agreements under this Note.

 

(d)       Compliance
with Existing Laws and Agreements; Governmental Consent. (i) The authorization, execution, attestation and delivery of this
Note by the Borrower, (ii) the authentication of this Note by the trustee or paying agent pursuant to the Borrower Note Resolution,
(iii) the adoption of the Borrower Note Resolution, (iv) the sale of this Note to the I-Bank, (v) the observation and performance
by the Borrower of its duties, covenants, obligations and agreements hereunder, including, without limitation, the repayment of
the Loan and all other amounts due hereunder, and (vi) the undertaking and completion of the Project, will not (A) 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 ordinance or 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 are subject. The Borrower has obtained all permits and approvals required to date by any
governmental body or officer for the authorization, execution, attestation, authentication and delivery of this Note, for the sale
of this Note to the I-Bank, for the making, observance and performance by the Borrower of its duties, covenants, obligations and
agreements under this Note, and for the undertaking and completion of the Project.

 

    5 

     

    

(e)       Reliance.
The Borrower hereby acknowledges that the I-Bank is making the Loan to the Borrower pursuant to the terms hereof in reliance upon
each of the representations of the Borrower set forth in this Section 2.

 

SECTION 3.
Covenants of the Borrower.

 

(a)       Participation
in the Anticipated Financing Program. The Borrower covenants and agrees that it shall undertake and complete in a timely manner
all conditions precedent identified by the I-Bank relating to (i) the participation by the Borrower in the Anticipated Financing
Program and (ii) the qualification by the Borrower for receipt of the Anticipated Long Term Loan.

 

(b)       Pledge.
The Borrower unconditionally and irrevocably promises to make the Loan repayments in accordance with the terms of, and to the extent
provided in, the Borrower Note Resolution for the punctual repayment of the Loan and all other amounts due pursuant to the terms
of this Note.

 

(c)       Disposition
of Environmental Infrastructure System. The Borrower covenants and agrees that it shall not sell, lease, abandon or otherwise
dispose of all or substantially all of its Environmental Infrastructure System without the express written consent of the I-Bank,
which consent may or may not be granted by the I-Bank in its sole discretion.

 

(d)       Financing
With Tax-Exempt Bonds. The Borrower acknowledges, covenants and agrees that it is the intention of the Borrower to finance
the Project on a long term basis with proceeds of I-Bank Bonds now or hereinafter issued, the interest on which is excluded from
gross income for purposes of federal income taxation pursuant to Section 103(a) of the Code (“tax-exempt bonds”). In
furtherance of such long term financing with tax-exempt bonds, the Borrower covenants that, except to the extent expressly permitted
in writing by the I-Bank, the Borrower will not take any action or permit any action to be taken which would result in any of the
proceeds of the Loan being used (directly or indirectly) to make or finance loans to persons other than the Borrower. In addition,
the Borrower covenants and agrees that (i) all of the proceeds of the Loan will be used to pay costs of an exempt facility, within
the meaning of Section 142 of the Code, which were paid and incurred by the Borrower no more than 60 days before the date on which
the I-Bank adopted a declaration of intent with respect to the Project, and (ii) no portion of the Project will be investment property,
within the meaning of Section 148(b) of the Code. The Borrower covenants and agrees that any Costs to be paid or reimbursed with
proceeds of the Loan will result in the expenditure of proceeds under Treasury Regulations §1.148-6(d) and Treasury Regulations
§1.150-2, for costs subject to the allowance for depreciation provided in Section 167 of the Code which are chargeable to
the capital account of the Borrower with respect to such exempt facility.

 

    6 

     

    

(e)       Operation
and Maintenance of Environmental Infrastructure System. The Borrower covenants and agrees that it shall maintain its Environmental
Infrastructure System in good repair, working order and operating condition, and make all necessary and proper repairs and improvements
with respect thereto.

 

(f)       Records
and Accounts; Inspections. The Borrower covenants and agrees that it shall keep accurate records and accounts for its Environmental
Infrastructure System, separate and distinct from its other records and accounts, which shall be audited annually by an independent
registered certified public accountant and shall be made available for inspection by the I-Bank upon prior written notice. The
Borrower shall permit the I-Bank to inspect the Environmental Infrastructure System.

 

(g)       Insurance.
The Borrower covenants and agrees that it shall maintain insurance policies providing against risk of direct physical loss, damage
or destruction of its Environmental Infrastructure System, in an amount that will satisfy all applicable regulatory requirements.
The Borrower covenants and agrees that it shall include, or cause to be included, the I-Bank as an additional “named insured”
on any certificate of liability insurance procured by the Borrower and by any contractor or subcontractor for the Project.

 

(h)       Reliance.
The Borrower hereby acknowledges that the I-Bank is making the Loan to the Borrower pursuant to the terms hereof in reliance upon
each of the covenants of the Borrower set forth in this Section 3.

 

SECTION 4. Disbursement of the Loan Proceeds;
Amounts Payable; Prepayment; and Late Fee. 

 

(a)       The
I-Bank shall effectuate the Loan to the Borrower by making one or more disbursements to the Borrower promptly after receipt by
the I-Bank of a Loan Disbursement Requisition and the approval of such Loan Disbursement Requisition by an Authorized Officer of
the I-Bank or designee thereof, each such disbursement and the date thereof to be recorded by an Authorized Officer of the I-Bank
on the table attached as Exhibit A-2 hereto; provided, however, that the approval by the I-Bank of any Loan Disbursement Requisition
for disbursement pursuant to the terms hereof shall be subject to the terms, conditions and limitations as set forth in Section
4(b) of this Note. It is expected that the proceeds of the Loan will be disbursed to the Borrower in accordance with Exhibit C
hereto, as Exhibit C shall be supplemented by an Authorized Officer of the I-Bank by means of either a substitute Exhibit C or
an additional Exhibit C, such supplement to be implemented concurrently with the supplement to Exhibit A-1 hereto (as provided
in the definition of “Project” as set forth herein). The latest date upon which the Borrower may submit to the I-Bank
a Loan Disbursement Requisition is the business day immediately preceding the date fixed by the I-Bank for the sale of its bonds
in connection with the Anticipated Financing Program, or such alternative date as shall be identified by the I-Bank for the Borrower
in writing. On the Maturity Date, the Borrower shall repay the Loan to the I-Bank in an amount equal to: (i) the Principal; (ii)
the Interest; (iii) the Administrative Fee, if any; and (iv) any other amounts due and owing pursuant to the provisions of this
Note. The Borrower may prepay the Loan obligations hereunder, in whole or in part, upon receipt of the prior written consent of
an Authorized Officer of the I-Bank. Each payment made to the I-Bank shall be applied to the payment of, first, the Interest then
due and payable, second, the Principal, third, the Administrative Fee, if any, fourth, any late charges, and, finally, any other
amount due pursuant to the provisions of this Note. In the event that the repayment obligation set forth in this Note is received
by the I-Bank later than the Maturity Date, a late fee shall be payable to the I-Bank in an amount equal to the greater of twelve
percent (12%) per annum or the prime rate as published in the Wall Street Journal on the Maturity Date plus one half of one percent
per annum on such late payment from the Maturity Date to the date it is actually paid; provided, however, that any late payment
charges incurred hereunder shall not exceed the maximum interest rate permitted by law. Notwithstanding the provisions of this
Section 4(a) to the contrary, the Borrower hereby acknowledges and agrees that, on the date of issuance of this Note, a disbursement
shall be made and shall be recorded by an Authorized Officer of the I-Bank on the table attached as Exhibit A-2 hereto in the amount
recorded thereon. Such disbursement shall be made for the purpose of funding fifty percent (50%) of the NJDEP Loan Origination
Fee. Such disbursement shall be paid by the I-Bank on behalf of the Borrower directly to the NJDEP in satisfaction of the provisions
hereof.

 

    7 

     

    

(b)       Notwithstanding
the provisions of this Note to the contrary with respect to the funding, pursuant to this Section 4, of any Loan Disbursement Requisition
relating to all or any portion of the Project: (i) the Borrower hereby acknowledges and agrees that the I-Bank shall not, and shall
not be required to, commit funds, pursuant to the Construction Financing Loan Program of the I-Bank, to any portion of the Project
until such time as the particular portion of the Project in question has been certified for funding by the NJDEP; (ii) no Loan
Disbursement Requisition shall be approved by the I-Bank for disbursement pursuant to this Section 4 unless and until the portion
of the Project to which such Loan Disbursement Requisition relates has been certified for funding by the NJDEP; (iii) no Loan Disbursement
Requisition shall be approved by the I-Bank for disbursement pursuant to this Section 4 unless and until the Appropriation Condition
has been satisfied to an extent and in an amount that is sufficient to fund, in the aggregate, the particular Loan Disbursement
Requisition in question and all prior Loan Disbursement Requisitions; and (iv) the I-Bank has no obligation pursuant to this Note
to make all or any portion of any Loan Disbursement Requisition disbursement pursuant to the provisions of this Section 4 if the
Borrower lacks the authority to pay interest on this Note in an amount equal to the I-Bank Portion Interest Rate.

 

SECTION 5. 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 whatsoever while any Loan repayments, or any other payments due hereunder, remain unpaid, 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 I-Bank to perform and observe any agreement or any duty, liability or obligation arising out of this Note, or any rights
of set-off, recoupment, abatement or counterclaim that the Borrower might have against the I-Bank or any other party; provided,
however, that payments hereunder shall not constitute a waiver of any such rights.

 

    8 

     

    

SECTION 6. Events of
Default. The following events shall constitute an “Event of Default” hereunder: (i) failure by the Borrower to
pay, when due, any and all of its Loan repayment obligations hereunder, and any other payment obligations due hereunder; (ii) failure
by the Borrower to observe and perform any duty, covenant, obligation or agreement on its part to be observed or performed pursuant
to the terms of this Note; (iii) any representation made by the Borrower contained in this Note or in any instrument furnished
in compliance with or with reference to this Note is false or misleading in any material respect; and (iv) 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 Note 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 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.

 

SECTION 7. Remedies
upon Event of Default. Whenever an Event of Default shall have occurred and be continuing pursuant to the terms hereof, the
Borrower hereby acknowledges and agrees to the rights of the I-Bank to take any action permitted or required at law or in equity
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. If an Event of Default shall have occurred, the Borrower hereby acknowledges
and agrees that the I-Bank shall have the right to (i) immediately cease disbursements of the proceeds of the Loan, and/or (ii)
declare all Loan repayments and all other amounts due hereunder to be due and payable immediately without further notice or demand.
The Borrower hereby acknowledges and agrees that no remedy herein is intended to be exclusive, and every remedy shall be cumulative
and in addition to every other remedy given under this Note or now or hereafter existing at law or in equity. The Borrower hereby
further acknowledges and agrees that no delay or omission by the I-Bank to exercise any remedy or right accruing upon any Event
of Default shall impair any such remedy or right or shall be construed to be a waiver thereof, but any such remedy or right may
be exercised as often as may be deemed expedient. The Borrower hereby further acknowledges and agrees that, pursuant to the “New
Jersey Infrastructure Bank Credit Policy”, adopted by the Board of Directors of the I-Bank, and as further amended and supplemented
from time to time (the “Credit Policy”), during such time as an Event of Default has occurred and is continuing hereunder,
the Borrower shall be ineligible for additional financial assistance from the I-Bank, in addition to certain other consequences
set forth in the Credit Policy. The Borrower hereby agrees that upon demand it shall pay to the I-Bank 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 in the collection of Loan repayments or any sum due hereunder or in the enforcement of the observation
or performance of any obligations or agreements of the Borrower upon an Event of Default. Any moneys collected by the I-Bank pursuant
to this Section 7 shall be applied first to pay any attorneys’ fees or other fees and expenses owed by the Borrower.

 

    9 

     

    

SECTION 8. Certain Miscellaneous
Provisions. The Borrower hereby acknowledges and agrees as follows: (a) all notices hereunder shall be deemed given when hand
delivered or when mailed by registered or certified mail, postage prepaid, to the Borrower at the following address: Middlesex
Water Company, 1500 Ronson Road, Iselin, New Jersey 08830-0452, Attention: A. Bruce O’Connor, Vice President, Treasurer and
Chief Financial Officer; and to the I-Bank at the following address: New Jersey Infrastructure Bank, 3131 Princeton Pike, Building
4, Suite 216, Lawrenceville, New Jersey 08648-2201, Attention: Executive Director; (b) this Note shall be binding upon the Borrower
and its successors and assigns; (c) in the event any provision of this Note is 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;
(d) the obligations of the Borrower pursuant to the terms of this Note may not be assigned by the Borrower for any reason, unless
the I-Bank shall have approved said assignment in writing; (e) this Note may not be amended, supplemented or modified without the
prior written consent of the I-Bank; (f) this Note shall be governed by and construed in accordance with the laws of the State;
(g) the Borrower shall, at the request of the I-Bank, execute and deliver such further 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 Note; and (h) whenever the Borrower is required to obtain the determination, approval or consent of the I-Bank
pursuant to the terms hereof, such determination, approval or consent may be either granted or withheld by the I-Bank in its sole
and absolute discretion.

 

 

[The remainder of this page has been left blank
intentionally.]

    10 

     

    

IN WITNESS WHEREOF,
the Borrower has caused this Note to be duly executed, sealed and delivered on the date first above written.

 

	 	MIDDLESEX WATER COMPANY
	 	 	 
	 	 	 
	[SEAL]	 	 
	 	By: 	/s/ A. Bruce O’Connor
	ATTEST:	 	A. Bruce O’Connor
	 	 	Vice President, Treasurer
	 	 	And Chief Financial Officer

 

 

/s/ Jay L. Kooper

Jay L. Kooper, Esq.

Vice President, General 

Counsel and Secretary

 

 

 

    11 

     

    

EXHIBIT A-1

 

		1)	Name and Address of Local Unit:

 

Middlesex Water Company

500 Ronson Road

Iselin, New Jersey 08830

 

Attention: Richard M. Risoldi, Vice
President Operations

 

		2)	Description of the Project:

 

The project consists of replacing
18,300 LF 8-inch diameter cast iron mains with cement mortar-lined ductile iron pipe, replacing 536 service lines, installing 616
meter pits and associated fittings and appurtenances. The project area is within the Avenel section of Woodbridge Township. Cement
mortar lining of the pipe interior is intended to inhibit the corrosive effects of the conveyed water on the piping systems. On
the other hand, unlined pipe is subject to tuberculation (an accumulation of ferric oxide) which would manifest as reduction of
the carrying capacity of the pipe and reduced pressure and volume. Customers would be impacted by a reduction of the system’s
ability to deliver sufficient water to fight fires and the concomitant increase in pumping costs in order to overcome the resistance
to flow presented by the aforementioned accumulations. Water quality would suffer, as the increase in ferric oxide will manifest
as aesthetic degradation of the water at “end-of-tap” and at high enough levels, may cause a threat to public health.

 

The overall project consists of
one (1) building contract. Zero (0) contracts have previously received authorization to award. This exhibit pertains to contract
1 of 1.

 

		3)	Description of the Water Distribution System:

 

The Middlesex Water Company is a
publicly-owned water utility that provides water service to retail customers primarily in eastern Middlesex County. Water services
are furnished to approximately 59,000 retail customers located in an area of approximately 55 square miles of New Jersey in Woodbridge
Township, the Boroughs of Metuchen and Carteret; portions of Edison Township, Borough of South Plainfield, and the City of South
Amboy in Middlesex County; and a small portion of the Township of Clark in Union County.

 

 

    12 

     

    

 

 

EXHIBIT A-2

 

Loan Disbursements

 

 

	Date of Loan 

Disbursement	
        Amount of 

Disbursement:

        I-Bank Portion
	
        Amount of 

        Disbursement:

        Fund Portion

	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

 

 

 

    13 

     

    

 

EXHIBIT B

 

Basis for the Determination of Allowable
Costs

 

The determination of the costs allowable for
assistance from the New Jersey Water Bank is presented below:

 

	Cost Classification	 	Application
  Amount	 	 	Allowable

 Amount	 	 	CLP 
 Allowable 
 Amount	 
	 	 	 	 	 	 	 	 	 	 
	1.  Administrative Expenses	 	$	258,000	 	 	$	224,088	 	 	$	224,088	 
	2.  Other Costs	 	$	0	 	 	$	0	 	 	$	0	 
	3.  Engineering Fees	 	$	1,032,000	 	 	$	424,622	 	 	$	424,622	 
	4.  Building Costs	 	$	8,600,000	 	 	$	7,469,590	 	 	$	7,469,590	 
	5.  Contingencies	 	$	430,000	 	 	$	373,480	 	 	$	373,480	 
	6.  Planning and Design	 	$	880,000	 	 	$	79,257	 	 	$	79,257	 
	7.  Sub-Total	 	$	11,200,000	 	 	$	8,571,037	 	 	$	8,571,037	 
	8.  DEP Fee (Financed Portion (50%))	 	 	 	 	 	$	85,710	 	 	$	85,710	 
	9.  Total Project Costs	 	$	11,200,000	 	 	$	8,656,747	 	 	$	8,656,747	 
	10. CLP Loan Amount	 	 	 	 	 	 	 	 	 	$	8,656,747	 

 

 

 

As a result of the review by the New Jersey
Department of Environmental Protection (“DEP”), various line items may have been revised resulting in a change of the
allowable costs for this project. The basis for the determination of the allowable costs is as follows:

 

		1.	Administrative Expenses:

 

The total amount requested for this
line item on the application was $258,000. The allowable administrative expense is authorized to be 3% of the total allowable building
costs (Line Item No. 4). Therefore, the amount for the administrative line item is $7,469,590 x 0.03 = $224,088.

 

Allowable Administrative Expenses
are $224,088.

 

 

		2.	Other Costs:

 

The amount requested for this line
item on the application was $0. Therefore, the total allowable amount for this line item is $0.

 

Allowable Other Costs are $0.

    14 

     

    

		3.	Engineering Fees:

 

The amount requested for this line
item on the application was $1,032,000. Middlesex Water Company will utilize both the services of Gannett Fleming and Middlesex
Water Company’s engineering and inspection personnel (force account). The contractual costs for Gannett Fleming’s services
are $166,622.48 (includes Change Order No. 1 issued 27 November 2017. The costs for Middlesex Water Company’s force account
work was estimated at $258,000. The scope of work and costs for utilizing these services has been reviewed and approved. Therefore,

 

Allowable Engineering Fees are $424,622.

 

4.     Building
Costs:

 

The amount requested for this line
item on the application was $8,600,000. The total allowable building costs based upon the low bid received is $5,719,590 and an
additional $1,750,000 for materials. Therefore, the total building costs are $5,719,590 + $1,750,000 = $7,469,590. Therefore,

 

Green Project Reserve (GPR) Funding:
Green Infrastructure - $0.

	  	  Energy Efficiency- $0.
	 	  Water Efficiency - $0.
	 	  Green Innovative - $0.

 

Allowable Building Costs are $7,469,590.

 

		5.	Contingencies:

 

The amount requested for this line
item on the application was $430,900. The allowable amount is authorized to be 5% of the allowable building cost. Therefore, the
allowable amount for this line item is $7,469,590 x 0.05 = $373,480.

 

Allowable Contingencies are $373,480.

 

		6.	Planning and Design:

 

The amount requested for this line
item on the application was $880,000. The Department has reviewed the Agreement dated April 21, 2017 between Middlesex Water Company
and Gannett Fleming for ‘Survey and Design Plans’ stipulating the amount of $79,257, which has been found to be acceptable.

 

Costs for this line item will
be reimbursed based on DEP approval of actual documented project expenses for planning and design services. Therefore

 

Planning and Design Line Item is
$79,257.

 

    15 

     

    

		7.	Sub-Total:

 

The total amount applied for was
$11,200,000. The subtotal line item amount based upon the low bid award is $8,571,037.

 

		8.	DEP Loan Surcharge or Loan Origination Fee:

 

This item represents the DEP Loan
Surcharge or Loan Origination Fee imposed by DEP as a portion of the cost of the project of the borrower. This DEP Loan Surcharge
or Loan Origination Fee is a portion of the cost of the project that has been incurred for engineering and environmental services
provided by DEP for the borrower in connection with, and as a condition precedent to, the inclusion of the project of the borrower
in the SFY2019 Financing Program of the Trust, 50% of which will be financed for the Borrower as part of the Trust Construction
Loan.

 

DEP Fee = $8,571,037 x 2% = $171,420

 

$171,420 x 0.50 = $85,710,
(financed through the Construction Loan and paid to DEP upon closing of the Construction Loan)

 

		9.	Total Project Costs:

 

The total project costs are
(loan amount + DEP Fee) $8,656,747.

 

10.   The CLP Loan Amount:

 

The CLP Loan
Amount is $8,656,747.

 

 

 

    16 

     

    

 

 

EXHIBIT C

1. Disbursement Schedule

 

The following is a schedule of the estimated
disbursements for this loan. Disbursements to the Borrower for any given month shall not exceed the amounts indicated below plus
any undisbursed from the previous months.

 

 

	Year	Month	 	 	DEP Fee (I-Bank

 to make 

payment)	Total      
	 	 	 	 	 	 
	2018	September	 	 	*85,710	 
	 	September	 	 	 	$1,200,000
	 	October	 	 	 	$2,000,000
	 	November	 	 	 	$2,000,000
	 	December	 	 	 	$1,000,000
	 	 	 	 	 	 
	2019	January	 	 	 	$500,000
	 	February	 	 	 	$500,000
	 	March	 	 	 	$500,000
	 	April	 	 	 	$500,000
	 	May	 	 	 	$371,037
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	Total	 	 	 	$85,710	$8,571,037

  

 

 

* This represents that portion (50%) of the
Department Loan Surcharge or Loan Origination Fee that has been financed for the Borrower through the I-Bank Loan. No action is
required on the part of the borrower with respect to the payment to the Department of the Department Loan Surcharge or Loan Origination
Fee. The I-Bank will address, or already has addressed, the implementation of this disbursement.

 

    17 

     

    

2. Project Schedule

 

The Borrower shall expeditiously
initiate and complete the project in accordance with the project schedule which was submitted as part of the loan application repeated
below. Failure to promptly initiate and complete the Project may result in the imposition of sanctions under N.J.A.C. 7:22-3.40
through 3.44 and N.J.A.C. 7:22-4.40 through 4.44. In addition, failure to promptly award all subagreement(s) for building the Project
within 12 months of the date of this loan may result in a limitation on allowable costs as provided by N.J.A.C. 7:22-5.4(d) 4.
This limitation provides that costs incurred under contracts awarded after 12 months from the date of this loan are unallowable
unless a specific extension has been granted by DEP, in the case of a Fund Loan, and the I-Bank, in the case of an I-Bank Loan.

 

	EVENT	DATE
	 	 
	Advertisement:	 
	1225001-028	April 17, 2018
	     	     
	 	 
	Bid Receipt:	 
	1225001-028	May 30, 2018
	     	     
	 	 
	Award:	 
	1225001-028	June 18, 2018
	     	     
	 	 
	Issuance of Notice to Proceed:	 
	1225001-028	June 26, 2018
	     	     
	 	 
	Completion of Construction:	 
	1225001-028	April 30, 2019
	     	     
	 	 
	Initiation of Operation:	 
	1225001-028	April 30, 2019
	     	     
	 	 
	Project Performance Certification:	 
	1225001-028	April 30, 2020

 

 

 

    18

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