3l( 63-102-HA(Rev.4T) New Jersey Turnpike Authority Memorandum DATE: TO: October 20, 2011 Philip Espinosa, Acting Director of Law and Donna Manuelli, Chief Financial Officer FROM: Sheri Ann Czajkowski, Assistant Secretary to the Authority SUBJECT: AGENDA ITEM: 306-08-2011 / STATE TRANSPORTATION PROJECTS FUNDING AGREEMENT BETWEEN NJTA AND THE TREASURER OF STATE OF NEW JERSEY Attached please find a copy of the executed above referenced agreement. The original has been retained by the undersigned for the official files. Thank you. Sheri Ann Czajkowski Attachments RECEIVED OCT 2 0 2011 ASSJSTANTSECRETARY STATE TRANSPORTATION PROJECTS FUNDING AGREEMENT BETWEEN THE NEW JERSEY TURNPIKE AUTHORITY AND THE TREASURER OF THE STATE OF NEW JERSEY This STATE TRANSPORTATION PROJECTS FUNDING AGREEMENT (this "Agreement") made thisj^ day of September, 2011, by and between the NEW JERSEY TURNPIKE AUTHORITY (the "Authority") and the TREASURER OF THE STATE OF NEW JERSEY (the "Treasurer"), acting on behalfof the State of New Jersey (the "State"). WITNESSETH: WHEREAS, the Authority is a body corporate and politic of the State organized and existing by virtue ofthe New Jersey Turnpike Authority Act of 1948, constituting Chapter 454 of theLaws ofNewJersey of 1948, as amended andsupplemented (N.J.S.A. 27:23-1 etseq.); and WHEREAS, pursuant to N.J.S.A. 27:23-5.8(b), the Authority is authorized to enter into contracts with the State or the New Jersey Transportation Trust Fund Authority (the "TTFA") providing for the payment bythe Authority to the State orthe TTFA of revenues of the Authority in the amount or amounts that may be set forth in or determined in accordance with such contracts, which amounts are to be used for the development of State transportation projects; and WHEREAS, the Authority and the State now desire to enter into this Agreement requiring the Authority to make payments of its legally available revenues in the General Reserve Fund(as defined herein) to the State in the amounts and on the dates andthe other terms and conditions set forth in this Agreement, which amounts are to be used for the development of State transportation projects. NOW, THEREFORE, the Authority and the State, in consideration of the premises and the mutual covenants and agreements set forth herein, each intending to be legally bound, do hereby agree as follows: ARTICLE I 1.1 Definitions. (a) All terms defined in the introductory paragraph and the recitals to this Agreement shall have the respective meanings set forth therein for all purposes of this Agreement. (b) this Agreement: The following terms shall have the following meanings for all purposes of "Bond Resolution" means the Turnpike Revenue Bond Resolution adopted by the Authority on August 20, 1991, as amended and restated on September 26, 1991, as further amended and restated on November 22, 1991, and as further amended, restated and supplemented from time to time in accordance with its terms. "Bonds" means any bonds ofthe Authority heretofore orhereafter issued and outstanding under and pursuant to the Bond Resolution. "Credit Facility" shall have the meaning given to such term inthe Bond Resolution. "Existing Agreement" means the Second Amendment Constituting the Amended and Restated Agreement Between the New Jersey Turnpike Authority and the Treasurer ofthe State of New Jersey", dated March 27, 2000, by and between the Authority and the Treasurer, as heretofore and hereafter amended and supplemented. "General Reserve Fund" means the General Reserve Fund created and established pursuant to the Bond Resolution. "Qualified Swap" shall have the meaning given tosuch term inthe Bond Resolution. "Revenue Fund" means the Revenue Fund created and established pursuant to the Bond Resolution. "Revenues" means (i) all tolls, revenues, fees, charges, rents, and other income and receipts derived by the Authority from the operation ofthe Turnpike System, (ii) the proceeds of any business interruption relating to the Turnpike System and of any other insurance which insures against loss ofRevenues, and (iii) any other income and receipts ofthe Authority from whatever source derived which are deposited into the Revenue Fund. "Subordinated Indebtedness" means any evidence of indebtedness permitted to be issued bythe Authority pursuant to Section 512 of the Bond Resolution. "Turnpike System" shall have the meaning given tosuch term inthe Bond Resolution. ARTICLE II 2.1 Authority Payments. (a) Commencing on September 30, 2011, the Authority shall, subject to the provisions of subsection (b) ofthis Section 2.1, make payments to the State (or, if and when there is a pledge or an assignment of the State's right to receive such payments in accordance with Section 3.3 of this Agreement, to the TTFA or such other successor authority or instrumentality established by law) on the dates and in the amounts set forth on Schedule A attached hereto and made a part hereof. The payments made by the Authority inaccordance with the preceding sentence shall be used solely for the purposes set forth in Section 2.3 of this Agreement. (b) The obligation of the Authority to make the payments required by subsection (a) ofthis Section 2.1 shall be (i) limited in all respects to the Revenues on deposit in the General Reserve Fund from time to time which are legally available to be used by the Authority to make such payments, and (ii) a special and limited obligation of the Authority which is subject and subordinate and junior in all respects to the lien and pledge created by the Bond Resolution to secure the payment ofthe principal or redemption price of, and interest on, the Bonds and any Subordinated Indebtedness, the Authority's reimbursement obligations with respect to any Credit Facility and the Authority's payment obligations under any Qualified Swap. 2.2 Authority Budget. The Authority shall annually prepare and deliver to the State or the TTFA or such other successor authority or instrumentality established by law, a copy of the annual budget of the Authority prepared and issued in accordance with Section 710 ofthe Bond Resolution, which budget shall set forth all proposed Authority expenditures for the ensuing calendar year, and shall make all budgetary and other provisions or appropriations necessary, subject to the limitations of subsection (b) of Section 2.1 ofthis Agreement, to provide for and authorize the payments to be made by the Authority pursuant to subsection (a) of Section 2.1 of this Agreement. 2.3 Use of Payments. The State orthe TTFA or such other successor authority or instrumentality established by law, shall use the payments made by the Authority pursuant to subsection (a) ofSection 2.1 of this Agreement solely to pay or provide for the development ofState transportation projects in an effortto further satisfy the overall transportation needs of the State. ARTICLE III 3.1 Enforcement of Authority Obligations. Every obligation assumed by or imposed upon the Authority by this Agreement shall be enforceable by the State or the TTFA or such other successor authority or instrumentality established by law, by appropriate action or proceeding, and the State or the TTFA or such other successor authority or instrumentality established by law, may have and pursue any and all remedies provided by law for the enforcement ofsuch obligation. 3.2 Effect of Breach. Failure on the part of the State or the TTFA or such other successor authority or instrumentality established by law, in any instance or under any circumstance, to observe or fully perform any obligation assumed by or imposed upon itby this Agreement, or by law, shall not make the State or the TTFA or such other successor authority or instrumentality established by law, liable in damages to the Authority or relieve the Authority from making any payments required by subsection (a) of Section 2.1 of this Agreement or from fully performing any other obligation required of it under this Agreement, but the Authority may have and pursue any and all other remedies provided by law for compelling performance by the State or the TTFA or such other successor authority or instrumentality established by law of any such obligation assumed by or imposed upon the State or the TTFA or such other successor authority or instrumentality established by law. 3.3 Pledge or Assignment. Without consent of the Authority, the State may, at any time, pledge or assign all of its rights under the provisions of this Agreement to receive the payments required to be made by the Authority pursuant to subsection (a) of Section 2.1 of this Agreement to the TTFA or such other successor authority or instrumentality established by law, and thereafter this Agreement shall not be terminated, modified or changed by the State or the Authority except in the manner (if any) and subject to the conditions (if any) permitted by the terms and provisions of such pledge or assignment. 3.4 No Effect on Existing Agreement. The execution and delivery of this Agreement shall not in any way amend, modify, terminate or otherwise affect the validity or enforceability of the terms and provisions of the Existing Agreement, which shall remain in full force and effect in accordance with its terms. 3.5 Amendments, Modifications and Supplements. This Agreement may be amended, modified or supplemented only by a written instrument duly authorized and executed by the Authority and the State. Upon request by the Treasurer, the Authority will enter into any amendment or modification to this Agreement which may be reasonably necessary or desirable to facilitate the issuance of bonds, notes or other obligations by the TTFA, including, without limitation, any bonds, notes or other obligations issued by the TTFA under any new bond resolution that may be adopted by the TTFA to implement any new legislation adopted by the State legislature to re-authorize the funding of the TTFA; provided, however, that in no event shall such amendment or modification seek to increase the Authority's payment obligations set forth in subsection (a) of Section 2.1 of this Agreement or to amend, modify or otherwise change in any manner the provisions of subsection (b) of Section 2.1 of this Agreement. 3.6 Execution of Counterparts. This Agreement may be executed in any number of counterparts, each and all of which, when executed by the Authority and the Treasurer, shall be regarded for all purposes as one original and shall constitute and be but one and the same. 3.7 Entire Agreement. This Agreement represents the full and entire agreement and understanding of the parties with respect to the subject matter hereof and supersedes and controls over all prior oral agreements or understandings between the parties relating thereto. 3.8 Effective Date of this Agreement. ThisAgreement shall be in effectfrom the date first above written. The obligation of the Authority to make the payments required to be made by the Authority pursuant to subsection (a) of Section 2.1 of this Agreement shall terminate when all such payments have been made. 3.9 Severability of Invalid Provisions. If any one or more of the covenants or agreements of the Authority or the State set forth in this Agreement should be contrary to law, then such covenant or covenants, or agreement or agreements, shall be deemed severable from the remaining covenants and agreements, and shall in no way affectthe validityof the other provisions of this Agreement. [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] [SIGNATURE PAGE TO FOLLOW] IN WITNESS WHEREOF, the Authority and the Treasurer have caused this Agreement to be duly executed and delivered as of the day and yearfirst above written. NEW JERSEY TURNPIKE AUTHORITY By: VERONIQUE HAKIM Executive Director TREASURER, STATE OF NEW JERSEY P. SIDAMON-IERISTOFF o H-> © © © © © © >-» © © h-»©0©i—»©o©i—»©©©•-*©©© H-> © © I—* t—> I—»K-* I—»)—» I—' h-»>—> H-» I—» I—» I—»>—»l—»l—» I—' © © © © © © © p p © p © © © © © © © p ©0©©0©©©©©©0©©0©©©©© ©©©©©©©©©©oo©©©©©©©© ©©©©©ooo©©©o©©©©©©©© © ©©©©©0©©©©©0©©0©©©©0 OOMOOWMMOOMMOOMOOOOMOOOOMMWW !_i ,_»,_> ©O©0©0©©©©©©©©©0©©©© o I o ft 03 NJTA CM of August 30, 2011 (rescheduled for 09/07/2011) AGENDA ITEM NO.: 306-08-2011 New Jersey Turnpike Authority MEMORANDUM Date: August 25, 2011 To: Veronique Hakim, Executive Director From: Donna Manuelli, Chief Financial Officer Subject Authorization to enter into State Transportation Projects Funding Agreement between the New Jersey Turnpike Authority and the Treasurer of the State of New Jersey In 2008, the Board of Commissioners authorized the Authority to contribute $1.25 billion to the Access to Region's Core ("ARC") Tunnel project. Specifically, the Authority was scheduled to make annual payments of $195 million to New Jersey Transit for the calendar years 2012 - 2017, and $80 million for calendar year 2018. Earlier this year, the ARC Tunnel project was canceled. For calendar years 2010 and 2011, the Board of Commissioners approved Authority budgets which made $100 million available for annual contributions to the New Jersey Department of Transportation ("NJDOT") for feeder road projects. On January6, 2011, Governor Chris Christie proposed a new Transportation Capital Plan (TCP). The five-year TCP addresses vital statewide transportation projects. Funding for the TCP includes, among other sources, annual cash contributions from the Authority. The Authority will make contributions to the Treasurer of the State of New Jersey to support statewide transportation projects according to the schedule below. State Fiscal Year (July 1 through June NJTA Contribution 30 2012 2013 2014 2015 2016 $229 $324 $324 $324 $324 million million million million million The $324 million contributions are the sum of the $195 million per year the Authority had committed to remit to New Jersey Transit for cancelled ARC Tunnel, the $100 million annual payment the Authority had been making to NJDOT for feeder road capital payments, and an additional $29 million per year. For the State's Fiscal Year 2012 ("FY12"), which is from July 1, 2011 through June 30, 2012, the Authority will remit $229 million to the State. Because the Authority was scheduled to begin its ARC payments to New Jersey Transit in calendar year 2012, the Authority is projected to have about only half of the $195 million payment available for the State's FY2012. Thus, the Authority's contribution for the State's FY12 is $95 million less than the subsequent fiscal years. The term of the agreement, which matches the 5-year TCP term, is from July 1, 2011 through June 30, 2016. Under the agreement, the Authority is scheduled to make quarterly payments to the Treasurer of the State of New Jersey in the following amounts -- $30 million each on September 30, 2011 and December 31, 2011, $84.5 million each on March 31, 2012 and June 30, 2012, and $81 million each quarter thereafter until June 30, 2016. Payments are to be made from only legally available revenues in the General Reserve Fund, and are subordinate to the payments required to be made to the Authority's bondholders and all other payments required to be made under the Authority's General Bond Resolution. This agreement will be in addition to any NJTA CM of August 30, 2011 (rescheduled for 09/07/2011) AGENDA ITEM NO.: 306-08-2011 Agenda Item 306-08-2011 Funding Agreement Page 2 other existing agreements the Authority has with the State, including the existing State Payment Agreement with the Treasurer of the State of New Jersey and the Feeder Road Maintenance Agreement with NJDOT. Authorization is respectfully requested to allow the Executive Director to enter into the subject agreement on substantially the same terms as described above. Authorization is further requested to permit the Executive Director to take all necessary steps to terminate the Authority's agreement with New Jersey Transit regarding the canceled ARC Tunnel project. SUBMITTED BY: ' iTjUXJUt n W*w /Donna Manuelff, Chief financial Officer CERTIFIED FOR CONSIDERATION: Veronique Hakim, Executive Director