THE MORRIS COUNTY IMPROVEMENT AUTHORITY (Morris County, New Jersey)

Transcription

1 NEW ISSUE BOOK-ENTRY ONLY Dated: Date of Delivery THE MORRIS COUNTY IMPROVEMENT AUTHORITY (Morris County, New Jersey) RATING: Moody s: (See CREDIT RATING herein) Interest on the Series 2011 Bonds (as defined herein) is included in gross income for federal income tax purposes under current law. In the opinion of Inglesino, Pearlman, Wyciskala & Taylor LLC, Bond Counsel to the Authority (as defined herein), under current law interest on the Series 2011 Bonds and any gain on the sale thereof are not includable as gross income under the New Jersey Gross Income Tax Act. See TAX MATTERS herein. $26,715,000 County of Sussex Guaranteed Renewable Energy Program Lease Revenue Bonds, Series 2011A (Federally Taxable) and $985,000 County of Sussex Guaranteed Renewable Energy Program Lease Revenue Note, Series 2011B (Federally Taxable) Due: As shown on the inside front cover The $26,715,000 aggregate principal amount of County of Sussex Guaranteed Renewable Energy Program Lease Revenue Bonds, Series 2011A (Federally Taxable) (the Series 2011A Bonds ) will be issued by The Morris County Improvement Authority (the Authority ) as fully registered bonds. One certificate for each stated maturity of the Series 2011A Bonds will be issued in the principal amount of each such maturity. The Series 2011A Bonds will be registered initially in the name of Cede & Co. ( Cede ), as nominee for The Depository Trust Company ( DTC ), an automated depository for securities and clearing house transactions, which will act as securities depository for the Series 2011A Bonds. Individual purchases of the Series 2011A Bonds will be made in book-entry form (without certificates) in denominations of $5,000 or any integral multiple thereof. See DESCRIPTION OF THE SERIES 2011 BONDS Book-Entry Only System herein. Capitalized terms not defined on this cover page shall have the meanings set forth in this Official Statement. The principal of the Series 2011A Bonds is payable on June 15 in the years and in the amounts set forth on the inside front cover hereof. The Series 2011A Bonds shall be dated and bear interest from their date of delivery, payable on June 15 and December 15 of each year until final maturity (stated or otherwise) commencing on June 15, 2012, at the interest rates per annum set forth on the inside front cover page of this Official Statement. The principal or redemption price, if any, of the Series 2011A Bonds will be payable upon presentation and surrender thereof at the principal corporate trust office of U.S. Bank National Association, Morristown, New Jersey, as trustee, registrar and paying agent (the Trustee, Registrar, and Paying Agent ) for the Series 2011A Bonds. Interest on the Series 2011A Bonds is payable by check or draft of the Paying Agent mailed to the registered owners of the Series 2011A Bonds as of the Record Date, as described herein. Provided DTC or its nominee Cede is the registered owner of the Series 2011A Bonds, payment of the principal, redemption premium, if any, and interest on the Series 2011A Bonds will be made directly to DTC or its nominee, which is obligated to remit such principal, redemption premium and interest to DTC Participants. DTC Participants and Indirect Participants (each as defined herein) will be responsible for remitting such payments to the beneficial owners of the Series 2011A Bonds. See DESCRIPTION OF THE SERIES 2011 BONDS Book-Entry Only System. The $985,000 aggregate principal amount of County of Sussex Guaranteed Renewable Energy Program Lease Revenue Note, Series 2011B (Federally Taxable) (the Series 2011B Note and together with the Series 2011A Bonds, the Series 2011 Bonds ) will be issued by Authority as one fully registered note. One certificate for the stated maturity of the Series 2011B Note will be issued in the principal amount of such maturity. The Series 2011B Note will be registered initially in the name of Cede, as nominee of DTC, which will act as securities depository for the Series 2011B Note. Individual purchases of the Series 2011B Note will be made in book-entry form (without certificates) in denominations of $5,000 or any integral multiple thereof. See DESCRIPTION OF THE SERIES 2011 BONDS Book-Entry Only System. The Series 2011B Note shall be dated and bear interest from its date of delivery and will be payable as to principal and interest on their maturity date, January 15, 2013, at the interest rate per annum set forth on the inside front cover page of this Official Statement. The principal of the Series 2011B Note will be payable upon presentation and surrender thereof at the principal corporate trust office of the Paying Agent for the Series 2011B Note. Interest on the Series 2011B Note is payable by check or draft of the Paying Agent mailed to the registered owners of the Series 2011B Note as of the Record Date, as described herein. Provided DTC or its nominee Cede is the registered owner of the Series 2011B Note, payment of the principal and interest on the Series 2011B Note will be made directly to DTC or its nominee, which is obligated to remit such principal, redemption premium and interest to DTC Participants. DTC Participants and Indirect Participants will be responsible for remitting such payments to the beneficial owners of the Series 2011B Note. See DESCRIPTION OF THE SERIES 2011 BONDS Book-Entry Only System. The Series 2011A Bonds are subject to optional redemption and mandatory sinking fund redemption prior to their stated maturities as more fully described herein. The Series 2011B Note is not subject to optional redemption prior to its stated maturity. See DESCRIPTION OF THE SERIES 2011 BONDS - Optional Redemption and Mandatory Sinking Fund Redemption herein. The Series 2011 Bonds are being issued pursuant to the county improvement authorities law, as amended and supplemented (as codified at N.J.S.A. 40:37A-44 et seq., the Act ), other applicable law, and a bond resolution of the Authority adopted on September 28, 2011, as amended and supplemented by certificates of an Authorized Officer of the Authority to be executed in connection with the issuance of each of the Series 2011A Bonds and the Series 2011B Note (collectively, the Bond Resolution ). The Series 2011A Bonds are being issued to: (i) finance a portion of the costs of the Renewable Energy Projects for each of the Series 2011 Local Units, (ii) reimburse certain Renewable Energy Program development costs paid by the County of Sussex, New Jersey (the County ) and the Authority, (iii) pay certain fees and costs incurred by or for SunLight General Sussex Solar, LLC (the Company ) in connection with the Renewable Energy Program, and (iv) pay the various costs of issuing the Series 2011A Bonds and the Series 2011B Note. The Series 2011B Note is being issued to pay capitalized interest on the Series 2011A Bonds on June 15, 2012 and December 15, A portion of the costs of the Renewable Energy Projects will be provided from certain deferred equity contributed by the Company. See THE RENEWABLE ENERGY PROGRAM and SOURCES AND USES OF SERIES 2011A BONDS AND SERIES 2011B NOTE PROCEEDS herein. The Series 2011 Bonds are special and limited obligations of the Authority, payable as to principal, redemption premium, if any, and interest solely from and secured by the Authority s pledge of the Trust Estate to the Trustee under the Bond Resolution. The Trust Estate includes, without limitation: (i) the Revenues, (ii) payments made by the County under the County Guaranty (as defined herein) and (iii) the Funds and Accounts (except (A) the Administrative Expense Account and the Costs of Issuance Account of the Administrative Fund and (B) the County Security Fund) established under the Bond Resolution and held by the Trustee. The payment of the principal of (including Sinking Fund Installments, if any) and interest on the Series 2011 Bonds (but not any redemption premium) shall be guaranteed by the County pursuant to the County Guaranty. The County has the right, power and obligation to cause the levy of ad valorem taxes upon all the taxable property within the County, without limitation as to rate or amount, if necessary, in order to meet its payment obligations under the County Guaranty. See SECURITY FOR THE SERIES 2011 BONDS herein. THE SERIES 2011 BONDS ARE SPECIAL AND LIMITED OBLIGATIONS OF THE AUTHORITY. NEITHER THE STATE, NOR ANY POLITICAL SUBDIVISION THEREOF (OTHER THAN THE AUTHORITY BUT SOLELY TO THE EXTENT OF THE TRUST ESTATE, AND OTHER THAN THE COUNTY TO THE EXTENT OF THE COUNTY GUARANTY), IS OBLIGATED TO PAY THE PRINCIPAL OF, OR INTEREST ON, THE SERIES 2011 BONDS. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE NOR ANY POLITICAL SUBDIVISION THEREOF (OTHER THAN THE COUNTY TO THE EXTENT OF THE COUNTY GUARANTY) IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, OR INTEREST ON, THE SERIES 2011 BONDS. THE AUTHORITY HAS NO TAXING POWER. This cover page and the inside cover page contain certain information for quick reference only. It is not a summary of the issue. Investors must read the entire Official Statement including all appendices to obtain information essential to making an informed investment decision. The Series 2011 Bonds are offered for delivery when, as and if issued and delivered to the Underwriters, subject to the approving legal opinion of Inglesino, Pearlman, Wyciskala & Taylor, LLC, Parsippany, New Jersey, Bond Counsel to the Authority. Certain legal matters will be passed upon for the Underwriters by their counsel, Gibbons P.C., Newark, New Jersey. Certain legal matters concerning the obligations of the County will be passed upon by Wilentz, Goldman & Spitzer, P.A., Woodbridge, New Jersey, County Bond Counsel. NW Financial Group, LLC, Jersey City, New Jersey, is acting as Financial Advisor to the Authority in connection with the issuance of the Series 2011 Bonds. It is expected that the Series 2011 Bonds will be available for delivery through DTC in New York, New York, and that settlement for the Series 2011 Bonds will occur at the offices of Bond Counsel in Parsippany, New Jersey, on or about December 14, Dated: December 7, 2011

2 THE MORRIS COUNTY IMPROVEMENT AUTHORITY (MORRIS COUNTY, NEW JERSEY) $26,715,000 County of Sussex Guaranteed Renewable Energy Program Lease Revenue Bonds, Series 2011A (Federally Taxable) $15,645,000 Serial Bonds Maturity (June 15) Principal Amount Interest Rate Yield CUSIP * 2013 $ 865, % 1.138% BM ,850, BN ,850, BP ,850, BQ ,850, BR ,845, BS ,845, BT ,845, BU ,845, BV7 $11,070, % Term Bond Due June 15, 2027 Priced at 100% - CUSIP * BW5 $985,000 County of Sussex Guaranteed Renewable Energy Program Lease Revenue Note, Series 2011B (Federally Taxable) Maturity Principal Amount Interest Rate Yield CUSIP * January 15, 2013 $985, % 1.50% BX3 * Registered trademark of American Bankers Association. CUSIP numbers are provided by Standard & Poor s, CUSIP Service Bureau, a division of The McGraw-Hill Companies, Inc. The CUSIP numbers listed above are being provided solely for the convenience of Bondholders only at the time of issuance of the Series 2011 Bonds and the Agency does not make any representation with respect to such numbers or undertake any responsibility for its accuracy now or at any time in the future. The CUSIP number for a specific maturity is subject to being changed after the issuance of the Series 2011 Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part of such maturity as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of certain maturities of the Series 2011 Bonds.

3 THE MORRIS COUNTY IMPROVEMENT AUTHORITY MEMBERS AND PROFESSIONALS MEMBERS John Bonanni, Chairperson and Commissioner Christina Ramirez, Vice Chairperson and Commissioner Glenn Roe, C.C.F.O., Treasurer and Commissioner Ellen M. Sandman, Secretary and Commissioner Frank T. Pinto, Jr., Assistant Secretary and Commissioner AUTHORITY GENERAL COUNSEL Inglesino, Pearlman, Wyciskala & Taylor, LLC Parsippany, New Jersey AUTHORITY BOND COUNSEL Inglesino, Pearlman, Wyciskala & Taylor, LLC Parsippany, New Jersey AUTHORITY FINANCIAL ADVISOR NW Financial Group, LLC Jersey City, New Jersey

4 COUNTY OF MORRIS, NEW JERSEY BOARD OF CHOSEN FREEHOLDERS Freeholder Title Term Expires William J. Chegwidden Freeholder Director December 31, 2012 Douglas R. Cabana Deputy Freeholder Director December 31, 2013 Gene F. Feyl Freeholder December 31, 2012 Ann F. Grossi Freeholder December 31, 2013 Thomas J. Mastrangelo Freeholder December 31, 2013 John J. Murphy Freeholder December 31, 2012 Margaret Nordstrom Freeholder December 31, 2011 CLERK OF THE BOARD OF CHOSEN FREEHOLDERS Diane M. Ketchum COUNTY ADMINISTRATOR John Bonanni COUNTY TREASURER Glenn Roe, C.C.F.O. COUNTY COUNSEL Daniel W. O Mullan, Esq. ADVISORS TO THE COUNTY Drinker Biddle & Reath LLP Bond Counsel Nisivoccia & Company, LLP Auditors Acacia Financial Group, Inc. Financial Advisor

5 COUNTY OF SUSSEX, NEW JERSEY BOARD OF CHOSEN FREEHOLDERS Freeholder Title Term Expires Richard A. Zeoli Freeholder Director December 31, 2012 Susan M. Zellman Deputy Freeholder Director December 31, 2012 Phillip R. Crabb Freeholder December 31, 2011 Parker Space Freeholder December 31, 2013 Richard A. Vohden Freeholder December 31, 2013 CLERK OF THE BOARD OF CHOSEN FREEHOLDERS Elaine A. Morgan COUNTY ADMINISTRATOR John H. Eskilson COUNTY TREASURER Bernard A. Re COUNTY COUNSEL Dennis R. McConnell, Esq. ADVISORS TO THE COUNTY Wilentz, Goldman & Spitzer, P.A. Bond Counsel Nisivoccia & Company LLP Auditors

6 No broker, dealer, salesperson or other person has been authorized by the Authority, the Company or the Underwriters to give any information or to make any representations, other than those contained in this Official Statement, in connection with the offering of the Series 2011 Bonds made hereby and, if given or made, such information or representations must not be relied upon as having been authorized by any of the foregoing. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Series 2011 Bonds in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. Capitalized terms not defined on this page shall have the meanings set forth in this Official Statement and in the Bond Resolution. The information which is set forth herein has been provided by the Authority, the Company and by other sources which are believed to be reliable by the Authority, the Company and the Underwriters, but such information provided by such other sources is not guaranteed as to accuracy or completeness by the Authority, the Company or the Underwriters, and is not intended to be and is not to be construed as a representation by the Authority, the Company or the Underwriters. Certain financial, economic and demographic information concerning the County is contained in Appendices A and B to this Official Statement. Such information has been furnished by the County. Certain general information concerning the Company is contained in Appendix C to this Official Statement. Such information has been furnished by the Company. The Authority, the Underwriters and their respective counsel have not confirmed the accuracy or completeness of information relating to the Company, and the Authority and the Underwriters and their respective counsel disclaim any responsibility for the accuracy or completeness thereof. The Authority s Solar Proposal Evaluation Report contained in Appendix G was prepared by the Sussex County Evaluation Team in connection with the evaluation of the proposals received for the Renewable Energy Projects. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale hereunder shall under any circumstances create any implication that there has been no change in the affairs of the Authority, the County or the Company, since the date hereof or any earlier date as of which any information contained herein is given. This Official Statement is submitted in connection with the sale of the Series 2011 Bonds referred to herein and may not be used, in whole or in part, for any other purpose. IN CONNECTION WITH THE OFFERING, THE UNDERWRITERS MAY OVER ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2011 BONDS OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME WITHOUT PRIOR NOTICE. The Underwriters have provided the following sentence for inclusion in this Official Statement. The Underwriters have reviewed the information in this Official Statement pursuant to their responsibilities to investors under the Federal securities laws, but the Underwriters do not guarantee the accuracy or completeness of such information.

7 TABLE OF CONTENTS - i - Page INTRODUCTION... 1 THE RENEWABLE ENERGY PROGRAM... 4 THE AUTHORITY... 6 THE COMPANY... 7 DESCRIPTION OF THE SERIES 2011 BONDS... 8 General... 8 Optional Redemption... 9 Mandatory Sinking Fund Redemption... 9 No Extraordinary Optional Redemption Notice of Redemption Additional Bonds Book-Entry Only System Discontinuance of Book-Entry Only System SECURITY FOR THE SERIES 2011 BONDS General Company Lease Agreement Local Unit License Agreements County Guaranty Flow of Payments Acceleration SUMMARY OF CERTAIN PROVISIONS FOR THE PROTECTION OF GENERAL OBLIGATION DEBT OF NEW JERSEY MUNICIPALITIES AND COUNTIES Local Bond Law Debt Limits SOURCES AND USES OF SERIES 2011A BONDS AND SERIES 2011B NOTE PROCEEDS DEBT SERVICE SCHEDULE PLEDGE OF THE STATE NOT TO LIMIT POWER OF AUTHORITY OR RIGHTS OF BONDHOLDERS LEGALITY FOR INVESTMENT BANKRUPTCY Municipal Bankruptcy Company Bankruptcy NEGOTIABILITY OF THE SERIES 2011 BONDS SERIES 2011 BONDS NOT A DEBT OF THE STATE OF NEW JERSEY LITIGATION The Authority The Company The Series 2011 Local Units The County TAX MATTERS Notice Pursuant to IRS Circular General... 37

8 Certain United States Federal Income Tax Consequences United States Holders Sale and Retirement of the Series 2011 Bonds Defeasance of the Series 2011 Bonds Backup Withholding and Information Reporting APPROVAL OF LEGALITY CREDIT RATING FINANCIAL ADVISOR UNDERWRITING SECONDARY MARKET DISCLOSURE INDEPENDENT AUDITORS APPENDICES MISCELLANEOUS APPENDIX A - Certain Information Concerning the County... A-1 APPENDIX B - Audited Financial Statements of the County... B-1 APPENDIX C - Certain Information Concerning the Company... C-1 APPENDIX D - Form of Bond Resolution, Power Purchase Agreement, License and Access Agreement, Company Lease Agreement and County Guaranty Agreement... D-1 APPENDIX E - Proposed Form of Approving Legal Opinion... E-1 APPENDIX F - Forms of Continuing Disclosure Agreements... F-1 APPENDIX G - Morris County Improvement Authority (County of Sussex Program) Solar Proposal Evaluation Report... G-1 - ii -

9 OFFICIAL STATEMENT of THE MORRIS COUNTY IMPROVEMENT AUTHORITY (MORRIS, NEW JERSEY) relating to its $26,715,000 County of Sussex Guaranteed Renewable Energy Program Lease Revenue Bonds, Series 2011A (Federally Taxable) and $985,000 County of Sussex Guaranteed Renewable Energy Program Lease Revenue Note, Series 2011B (Federally Taxable) INTRODUCTION This Official Statement, which includes the cover page, the inside cover page, and the Appendices attached hereto, sets forth certain information concerning the offering by The Morris County Improvement Authority (the Authority ), a public body corporate and politic of the State of New Jersey (the State ), of its $26,715,000 aggregate principal amount of County of Sussex Guaranteed Renewable Energy Program Lease Revenue Bonds, Series 2011A (the Series 2011A Bonds ) and its $985,000 County of Sussex Guaranteed Renewable Energy Program Lease Revenue Note, Series 2011B (Federally Taxable) (the Series 2011B Note and together with the Series 2011A Bonds, the Series 2011 Bonds ). The Series 2011 Bonds are to be issued pursuant to the county improvement authorities law, constituting Chapter 183 of the Pamphlet Laws of 1960 of the State, as amended and supplemented (the Act ), other applicable law, and that certain bond resolution of the Authority entitled RESOLUTION AUTHORIZING THE ISSUANCE OF COUNTY OF SUSSEX GUARANTEED RENEWABLE ENERGY PROGRAM LEASE REVENUE NOTES AND BONDS, SERIES 2011 AND ADDITIONAL BONDS OF THE MORRIS COUNTY IMPROVEMENT AUTHORITY adopted on September 28, 2011, as amended and supplemented by a Certificate of an Authorized Officer of the Authority to be executed in connection with the issuance of each of the Series 2011A Bonds and the Series 2011B Note (collectively, the Bond Resolution ). The Series 2011 Bonds are special and limited obligations of the Authority, payable as to principal, redemption premium, if any, and interest solely from and secured by the Authority s pledge of the Trust Estate to the Trustee (as such terms are hereinafter defined) under the Bond Resolution. The Trust Estate includes, without limitation, (i) the Revenues (as defined in the Bond Resolution), (ii) payments made by the County of Sussex, New Jersey (the County ) under the County Guaranty (as hereinafter defined) and (iii) the Funds and Accounts (except the (A) Administrative Expense Account and the Costs of Issuance Account of the Administrative Fund and (B) County Security Fund) defined and established under the Bond Resolution and

10 held by the Trustee. For a full description of the Trust Estate, see SECURITY FOR THE SERIES 2011 BONDS General herein. The Revenues include, without limitation, the Basic Lease Payments (as hereinafter defined) to be made by SunLight General Sussex Solar, LLC (the Company or the Lessee ), a limited liability company created and in good standing under the laws of the State of New Jersey, under that certain Lease Purchase Agreement (Sussex County Renewable Energy Program, Series 2011) dated as of December 1, 2011 (the Company Lease Agreement ), by and between the Authority, as lessor, and the Company, as lessee. In conjunction with the Company Lease Agreement, the Authority will enter into that certain Power Purchase Agreement (Sussex County Renewable Energy Program, Series 2011) with the Company, dated as of December 1, 2011, for the right and obligation to purchase electricity from the Company (the Power Purchase Agreement ), which right and obligation the Authority shall assign to each of the Series 2011 Local Units (as hereinafter defined) under the Local Unit License Agreements (as hereinafter defined). Pursuant to the terms of the Company Lease Agreement, the Company receives certain credits against its obligation to pay the Basic Lease Payments. In particular, the Company receives a credit for, and therefore the Revenues also include, the Power Purchase Price Payments (as hereinafter defined) made by the Series 2011 Local Units to the Trustee for the purchase of electricity under the respective License and Access Agreement (Sussex County Renewable Energy Program, Series 2011), each to be dated as of December 1, 2011, (the Local Unit License Agreements ), by and between each of the respective Series 2011 Local Units, as licensor, and the Authority, as licensee. For a description of the Revenues and the Basic Lease Payments, see SECURITY FOR THE SERIES 2011 BONDS Flow of Payments herein. The payment of the principal of (including Sinking Fund Installments, if any, as defined in the Bond Resolution) and interest on the Series 2011 Bonds (but not any redemption premium) shall be fully, unconditionally, and irrevocably guaranteed by the County pursuant to the County Guaranty under the Act and applicable law. The County has the right, power and obligation to cause the levy of ad valorem taxes upon all the taxable property within the County, without limitation as to rate or amount, if necessary, in order to meet its payment obligations under the County Guaranty. The County Guaranty shall remain in effect until the Series 2011 Bonds have been paid in full. THE SERIES 2011 BONDS ARE SPECIAL AND LIMITED OBLIGATIONS OF THE AUTHORITY. NEITHER THE STATE, NOR ANY POLITICAL SUBDIVISION THEREOF (OTHER THAN THE AUTHORITY BUT SOLELY TO THE EXTENT OF THE TRUST ESTATE, AND OTHER THAN THE COUNTY TO THE EXTENT OF THE COUNTY GUARANTY), IS OBLIGATED TO PAY THE PRINCIPAL OF, OR INTEREST ON, THE SERIES 2011 BONDS. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE NOR ANY POLITICAL SUBDIVISION THEREOF (OTHER THAN THE COUNTY TO THE EXTENT OF THE COUNTY GUARANTY) IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, OR INTEREST ON, THE SERIES 2011 BONDS. THE AUTHORITY HAS NO TAXING POWER

11 See SECURITY FOR THE SERIES 2011 BONDS herein for a more complete description of the pledge of the Trust Estate, including certain provisions of the Bond Resolution, the Company Lease Agreement, the Power Purchase Agreement, the Local Unit License Agreements and the County Guaranty. See also APPENDIX D Form of Bond Resolution, Power Purchase Agreement, License and Access Agreement, Company Lease Agreement and County Guaranty Agreement herein. The Series 2011 Local Units are local governments located in, and including, the County, participating in the County s Renewable Energy Program being implemented through the Authority (the Renewable Energy Program ). The Series 2011A Bonds are being issued to finance, together with the Series 2011B Note and certain deferred equity provided by the Company, the Renewable Energy Projects (as hereinafter defined) for each of the Series 2011 Local Units. For a more complete description of the Renewable Energy Program, see THE RENEWABLE ENERGY PROGRAM herein. The balance of the proceeds of the Series 2011A Bonds are being used to (i) reimburse certain Renewable Energy Program development costs paid by the Authority, (ii) pay certain fees and costs incurred by or for the Company in connection with the Renewable Energy Program, and (iii) pay the various costs of issuing the Series 2011 Bonds. The proceeds of the Series 2011B Note are being used to pay capitalized interest on the Series 2011A Bonds on June 15, 2012 and December 15, See SOURCES AND USES OF SERIES 2011A BONDS AND SERIES 2011B NOTE PROCEEDS herein. In accordance with the Local Authorities Fiscal Control Law, constituting Chapter 313 of the Pamphlet Laws of 1983 of the State, as amended and supplemented (the Local Authorities Fiscal Control Law ), the Local Finance Board, Division of Local Government Services of the Department of Community Affairs of the State (the Local Finance Board ), has reviewed and held a public hearing regarding the issuance of the Series 2011 Bonds and the adoption and execution of the County Guaranty. By resolution adopted August 18, 2011, the Local Finance Board made favorable findings and recommendations with respect to the Series 2011 Bonds and the County Guaranty in accordance with the Local Authorities Fiscal Control Law. The Authority adopted a resolution on October 19, 2011 acknowledging the Authority members review of the Local Finance Board s findings, and each member of the Authority present at such meeting executed a group affidavit dated as of October 19, 2011 to such effect. U.S. Bank National Association, Morristown, New Jersey (the Trustee ) has been appointed to serve as trustee, paying agent and registrar for the Series 2011 Bonds. This Official Statement contains brief descriptions of the Bond Resolution, the County Guaranty, the Company Lease Agreement, the Local Unit License Agreements, and the Power Purchase Agreement (collectively, the Renewable Energy Program Documents ), the Series 2011 Bonds, the Authority, the Company, and the County. See also APPENDIX D Form of Bond Resolution, Power Purchase Agreement, License and Access Agreement, Company Lease Agreement and County Guaranty Agreement herein. Copies of the Renewable Energy Program Documents are on file in the office of the Authority in Morristown, New Jersey, and reference is made to such documents for the provisions relating to, among other things, the terms of and security for the Series 2011 Bonds, the custody and application of the proceeds of the Series 2011 Bonds, the rights and remedies of the holders of the Series 2011 Bonds and the rights, duties and obligations of the Authority, the Series 2011 Local Units, the Company, the County and the Trustee. A brief description of the County and its financial statements are contained in - 3 -

12 Appendices A and B hereto. A brief description of the Company is contained in Appendix C hereto and further description of the Renewable Energy Program and the Sussex County Evaluation Team s report evaluating the Company s proposal is contained in Appendix G hereto. Capitalized words and terms which are used herein which are not ordinarily capitalized and which are not otherwise defined herein shall have the meanings which are assigned to such words and terms in the Bond Resolution. See APPENDIX D - Form of Bond Resolution, Power Purchase Agreement, License and Access Agreement, Company Lease Agreement and County Guaranty Agreement herein. The summaries of and references to all documents, statutes, reports and other instruments which are referred to herein do not purport to be complete, comprehensive or definitive, and each such summary and reference is qualified in its entirety by reference to such document, statute, report or instrument. THE RENEWABLE ENERGY PROGRAM At the direction and with the support of the County, the Authority structured, developed and is in the process of implementing the Renewable Energy Program. The Renewable Energy Program provides for the financing, design, permitting, acquisition, construction, installation, operation and maintenance of renewable energy capital equipment and facilities such as solar panels, wind turbines, and hydro-electric, bio-diesel, geothermal, and bio-mass facilities, including any related electrical modifications or other work required or convenient for the installation of such systems (collectively, the Renewable Energy Projects ) for and on behalf of the County and local governmental units within the County, including without limitation, municipalities, boards of education for school districts, local authorities and any other local government instrumentalities, public bodies or other local government entities (collectively, including the County, the Local Units ). The Renewable Energy Projects procured under the Renewable Energy Program are to be installed on, in, affixed or adjacent to and/or for any Local Unit-controlled buildings, other structures, lands or other properties of the Local Units (collectively, the Local Unit Facilities ). In connection with the financing, design, permitting, acquisition, construction, installation, operation and maintenance of the Renewable Energy Projects, it may be necessary, desirable or convenient to finance, design, permit, acquire, construct, renovate and install certain capital improvements to the Local Unit Facilities, including without limitation, improvements to or replacement of, roofing systems (collectively, the Capital Improvement Projects and together with the Renewable Energy Projects and any Completion Project, the Projects ). The Authority anticipates no Capital Improvement Projects in connection with projects financed by the Series 2011 Bonds on behalf of the Series 2011 Local Units. The primary goal of the Renewable Energy Program is to expand the use of renewable energy sources available and utilized by the Local Units for their Local Unit Facilities, with the attendant environmental and financial benefits (including their contribution toward the State 2011 Energy Master Plan goal of achieving thirty percent (30%) renewable energy sources by 2020), and to reduce the energy-related operating costs of the Local Units for their Local Unit Facilities, all without obligating the Local Units to pay for the debt service on the Authority bonds (in this pool, the Series 2011 Bonds) issued to finance the costs of such Projects

13 In order to implement the Renewable Energy Program, the Authority will apply a portion of the proceeds of the Series 2011A Bonds (together with all of the proceeds of the Series 2011B Note to pay capitalized interest on the Series 2011A Bonds) to finance the respective Renewable Energy Projects on the respective Local Unit Facilities, all as set forth in Exhibit B (i.e., photovoltaic panel and electrical system upgrades), and Exhibit A (the roofs, ground and parking lots for twenty-seven (27) Renewable Energy Projects located at twenty (20) public facilities) to the License and Access Agreement (a form of which is attached hereto in Appendix D) for each of the following thirteen (13) participating Local Units, or other qualifying Local Units if necessary(the Series 2011 Local Units ): (i) Fredon Township and Town of Newton (collectively, the Municipal Series 2011 Local Units ); and (ii) (iii) Byram Township School District, Frankford Board of Education, Franklin Borough Board of Education, Green Township Board of Education, Hardyston Board of Education, High Point Regional School District, Kittatinny Regional School District and Newton Board of Education (collectively, the Board of Education Series 2011 Local Units ); and County, Sussex County Community College and Sussex County Technical School (the County Series 2011 Local Units ); Pursuant to the Local Unit License Agreement with each Series 2011 Local Unit, the Authority and/or its assignees have the right and obligation to (i) access the Local Unit Facilities of each such Series 2011 Local Unit, most particularly their roofs, parking area and/or grounds and electrical systems (the Local Unit License ), (ii) finance, design, permit, acquire, construct, install, operate and maintain the Renewable Energy Projects on, in, affixed or adjacent to, or for the benefit of such Local Unit Facilities, (iii) receive the right to the renewable energy produced from the Renewable Energy Projects financed by the Series 2011 Bonds, and (iv) sell all or a portion of the renewable energy produced from such Renewable Energy Projects through the Authority to the respective Series 2011 Local Units, pursuant to an assignment (under each Local Unit License Agreement) from the Authority to the Series 2011 Local Units of the Power Purchase Agreement. Under the competitive contracting provisions of the Local Public Contracts Law constituting, Chapter 198 of the Pamphlet Laws of 1971 of the State, as amended and supplemented (the Local Public Contracts Law ), the Authority has procured the services of the Company to design, permit, acquire, construct, install, operate and maintain the Renewable Energy Projects for the Local Unit Facilities of (i) the Municipal Series 2011 Local Units and (ii) the County Series 2011 Local Units. The Company has secured rights to access these Local Unit Facilities from the rights and obligations set forth in the Local Unit License Agreements of such respective Series 2011 Local Units, all of which rights and obligations have been assigned from the Authority to the Company pursuant to the terms of the Company Lease Agreement. The funding for such Renewable Energy Projects shall be provided (i) to the Company in the amount of 70% of each requisition on a requisition basis from a portion of the proceeds of the Series 2011 Bonds and (ii) by the Company in the amount of 30% of each requisition through its in-kind equity contribution discussed herein

14 Under the competitive contracting provisions of the Public Schools Contracts Law constituting Chapter 114 of the Pamphlet Laws of 1977 of the State, as amended and supplemented (the Public Schools Contracts Law and together with the Local Public Contracts Law, the Contract Law ), the Authority has procured the services of the Company to design, permit, acquire, construct, install, operate and maintain the Renewable Energy Projects for the Local Unit Facilities of the Board of Education Series 2011 Local Units. The Company has secured rights to access these Local Unit Facilities from the rights and obligations set forth in the Local Unit License Agreements of such respective Series 2011 Local Units, all of which rights and obligations have been assigned from the Authority to the Company pursuant to the terms of the Company Lease Agreement. The funding for such Renewable Energy Projects shall be provided to the Company (i) to the Company in the amount of 70% of each requisition on a requisition basis from a portion of the proceeds of the Series 2011 Bonds and (ii) by the Company in the amount of 30% of each requisition through its in-kind equity contribution discussed herein. In accordance with the terms of the Power Purchase Agreement, the Company shall sell to the Authority, for a term of fifteen (15) years, unless extended in accordance with then applicable law, the renewable energy generated from the Renewable Energy Projects for the Series 2011 Local Units for a fixed price of cents per kilowatt hour, as escalated annually by 3% in accordance with the terms thereof (the Power Purchase Price ), which Authority right and obligation to purchase and pay (the Power Purchase Price Payments ) for such renewable energy shall be assigned severally, not jointly, to the Series 2011 Local Units as part of the Local Unit License Agreements. The Power Purchase Price fixed under the Power Purchase Agreement shall be based, in part, upon the Authority s assignment in the Company Lease Agreement, as nominal owner of the Renewable Energy Projects for State law purposes, to assign to the Company all of the Authority s rights to the Solar Renewable Energy Certificates (the SRECs ) generated by the Renewable Energy Projects for the Series 2011 Local Units. The structure of the Renewable Energy Program, summarized above, is intended to provide the Series 2011 Local Units with a Power Purchase Price below their existing and anticipated cost of electricity for the term of their Local Unit License Agreements. According to the report prepared by the County s consulting team dated October 24, 2011, on file with the Authority and attached hereto as Appendix G, in particular Attachment 3 thereto, the average annual nominal savings on solar energy purchased by the Series 2011 Local Units participating in the Renewable Energy Program equals or exceeds 28%. THE AUTHORITY The Authority was created in accordance with the provisions of the Act and by ordinance of the County Board of Chosen Freeholders duly adopted on April 10, The Authority is a public body corporate and politic, constituting a political subdivision of the State, and was established as an instrumentality exercising public and essential governmental functions to provide for the public convenience, benefit and welfare and shall have perpetual succession. Under the terms of the Act, the Authority has the power, among others, to (i) acquire, construct, renovate and install any Public Facility as such term is defined in the Act, including the Projects for the Series 2011 Local Units, (ii) issue its bonds, notes or other - 6 -

15 obligations to finance or refinance the costs of such Public Facilities, including the Series 2011 Bonds, and (iii) purchase bonds, bond anticipation notes or other notes or obligations of the Authority out of any funds available therefor. The Authority is governed by a five member Board of Commissioners appointed by the County Board of Chosen Freeholders. The current Commissioners and officers are set forth below: MEMBER TITLE EXPIRATION OF CURRENT TERM John Bonanni Chairperson and Commissioner February 1, 2012 Christina Ramirez Vice Chairperson and Commissioner February 1, 2013 Glenn Roe Treasurer and Commissioner February 1, 2016 Ellen M. Sandman Secretary and Commissioner February 1, 2014 Frank T. Pinto, Jr. Assistant Secretary and Commissioner February 1, 2015 The officers of the Authority are appointed by the members of the Authority. The Chairperson, Treasurer, and Assistant Secretary of the Authority are also employees of the County. Inglesino, Pearlman, Wyciskala & Taylor, LLC, Parsipanny, New Jersey, is General Counsel and Bond Counsel to the Authority. The Financial Advisor to the Authority for the Series 2011 Bonds is NW Financial Group, LLC. In addition the joint venture team of (a) Gabel Associates, of Highland Park, New Jersey, and (b) Birdsall Services Group, of Cranford, New Jersey, provided a full range of energy consulting and engineering services to the Authority. THE COMPANY SunLight General Sussex Solar, LLC (the Company ) is a limited liability company created and in good standing under the laws of the State of New Jersey. It is a wholly-owned subsidiary of SunLight General Sussex Holdings, LLC ( Holdco ), which is the Company s only member. Holdco is organized to take advantage of the investment tax credit, the related Treasury Department Grant Program and accelerated depreciation Federal tax benefits under the Internal Revenue Code, which the County is unable to use. Holdco has no responsibility for the Company s obligations although Holdco has pledged its membership interest in and to the Company to the Authority under a pledge agreement in order to secure the Company s obligation to make the $1,500,000 million cash equity contribution to the County Security Fund from the 1603 grant to be obtained from the Renewable Energy Projects of the Series 2011 Bonds, or from other funds available to the Company. The Company has no responsibility for Holdco s obligations. Further, the Company has no obligations other than those associated with the Projects for the Series 2011 Local Units as set forth in the Renewable Energy Program Documents. The Company is a special purpose entity, formed for the purpose of contracting with the Authority to design and build the Projects for the Series 2011 Local Units, operate and maintain the Projects for the Series 2011 Local Units, lease certain properties and obtain certain rights related to the Renewable Energy Projects from the Authority pursuant to a lease arrangement as set forth in the Company Lease Agreement, and sell the renewable energy from the Renewable - 7 -

16 Energy Projects through the Authority to the Series 2011 Local Units, all as contemplated by the Renewable Energy Program Documents. See THE RENEWABLE ENERGY PROGRAM herein. The Company s principal assets and liabilities are the rights and obligations under the Renewable Energy Program Documents with the Authority. Pursuant to the Company Lease Agreement, the Company is obligated to deposit certain security with the Trustee, for the benefit of the County, to secure the Company s performance and payment under the Company Lease Agreement. While on deposit with the Trustee, this security is held solely for the benefit of the County and is neither included in the Trust Estate nor otherwise pledged to the Holders. The Company is managed by SunLight General Capital Management, LLC. Pursuant to the Company Lease Agreement, the Company is obligated to pledge certain revenues to the Authority to secure the Company s performance and payment under the Company Lease Agreement. The Company is contracting with Power Partners MasTec, LLC to design and construct the Projects for the Series 2011 Local Units. The Company will operate the Renewable Energy Projects for the Series 2011 Local Units, either directly or through one or more operations and maintenance contractors. Summary descriptions of Holdco and Power Partners MasTec, LLC are included as Appendix C to this Official Statement. Further information regarding the Company and the Renewable Energy Projects is included in Appendix G to this Official Statement, which information has been prepared by the Sussex County Evaluation Team in connection with the evaluation of proposals received for the Renewable Energy Projects. General DESCRIPTION OF THE SERIES 2011 BONDS The Series 2011A Bonds shall be dated and bear interest from their date of delivery, payable on June 15 and December 15 of each year until final maturity (stated or otherwise) commencing on June 15, 2012, at the interest rates per annum set forth on the inside front cover page of this Official Statement. The Series 2011A Bonds are scheduled to mature on June 15 in the years also set forth on the inside front cover page of this Official Statement. The Series 2011B Note shall be dated and bear interest from its date of delivery and will be payable as to principal and interest on their maturity date, January 15, 2013, at the interest rate per annum set forth on the inside front cover page of this Official Statement. The Series 2011 Bonds will be issued as fully registered book-entry bonds/notes, and registered in the name of Cede & Co. ( Cede ), as nominee for The Depository Trust Company, New York, New York ( DTC ), which will act as securities depository for the Series 2011 Bonds under its book-entry only system (the DTC Book-Entry Only System ). An individual purchaser may purchase a Series 2011 Bond in book-entry form (without certificates) in denominations of $5,000, or any integral multiple thereof. Provided DTC, or its nominee Cede, is the registered owner of the Series 2011 Bonds, the principal, redemption premium, if any, of, and interest on, the Series 2011 Bonds will be paid to DTC or Cede, as its nominee. See DESCRIPTION OF THE SERIES 2011 BONDS Book-Entry Only System herein. In the event the Series 2011 Bonds are no longer subject to the DTC Book-Entry Only System, the - 8 -

17 principal of and redemption premium, if any, on the Series 2011 Bonds will be payable upon surrender of the respective Series 2011 Bonds at a designated corporate trust office of the Paying Agent. Interest on the Series 2011A Bonds will then be paid by check or bank draft mailed by the Paying Agent to the registered owner thereof as of the June 1 and December 1 preceding any interest payment date at their addresses on file with the Bond Registrar. Interest on the Series 2011B Note will then be paid by check or bank draft mailed by the Paying Agent to the registered owner thereof as of January 1, 2013 at their addresses on file with the Bond Registrar. Optional Redemption The Series 2011A Bonds maturing on or before June 15, 2021 shall not be subject to redemption prior to their respective maturity dates. The Series 2011A Bonds maturing on and after June 15, 2022 shall be subject to optional redemption by the Authority prior to their respective maturity dates, on or after June 15, 2021, upon notice as herein described, either in whole or in part at any time in any order of maturity as the Authority shall determine and within a single maturity by lot, at a Redemption Price equal to one hundred percent (100%) of the principal amount to be redeemed, plus interest accrued to the date of redemption. Pursuant to the terms of the County Guaranty Agreement, under certain circumstances, the County may direct the Authority to utilize this otherwise discretionary optional redemption feature set forth above. To the extent the Company causes an Event of Default, as defined under the Company Lease Agreement, to occur and such Event of Default requires the County to make a payment of the principal of and interest on the Series 2011A Bonds under the County Guaranty, so long as the County is not in default under the County Guaranty Agreement, the County has the right to cause the Authority to refund all or a portion of the Series 2011A Bonds. To the extent the County were to exercise this right prior to the first optional call date of June 15, 2021, the County would be required to cause the Authority to defease the Series 2011A Bonds in accordance with Article XII of the Bond Resolution, in which case the Series 2011A Bonds would not be called for redemption until such first optional call date of June 15, See TAX MATTERS - Defeasance of the Series 2011A Bonds herein for a discussion of the tax implications in the event of a defeasance of the Series 2011A Bonds. date. The Series 2011B Note shall not be subject to optional redemption prior to its maturity Mandatory Sinking Fund Redemption The Series 2011A Bonds maturing on June 15, 2027 are subject to mandatory redemption prior to their stated maturities, through selection by the Trustee and upon the giving of notice as provided by the Bond Resolution, by payment of the following Sinking Fund Installments on June 15 of each year set forth in the table below, at a Redemption Price equal to one hundred percent (100%) of the principal amount to be redeemed, plus interest accrued to the date of redemption

18 Date Principal Amount June 15, 2022 $1,845,000 June 15, ,845,000 June 15, ,845,000 June 15, ,845,000 June 15, ,845,000 June 15, ,845,000 Final Maturity. No Extraordinary Optional Redemption The Series 2011 Bonds shall not be subject to extraordinary optional redemption in whole or in part, prior to their respective maturity dates. Notice of Redemption When the Series 2011A Bonds have been selected for redemption pursuant to any provision of the Bond Resolution, the Trustee shall give written notice of the redemption of such Series 2011A Bonds in the name of the Authority, which notice shall set forth: (i) the date fixed for redemption, (ii) the Redemption Price to be paid, (iii) the designated office of the Paying Agent at which redemption will occur, (iv) the CUSIP numbers on the Series 2011A Bonds to be redeemed, (v) if less than all of such Series 2011A Bonds shall be called for redemption, the distinctive numbers and letters, if any, of such Series 2011A Bonds to be redeemed, (vi) in the case of Series 2011A Bonds to be redeemed in part only, the portion of the principal amount thereof to be redeemed, and (vii) except with respect to a mandatory sinking fund redemption, that such redemption is conditioned upon there being on deposit with the Trustee on the date designated for redemption moneys sufficient for the payment of the Redemption Price and the accrued interest to the redemption date. Such notice shall further state that on the redemption date there shall become due and payable the Redemption Price of all Series 2011A Bonds to be redeemed, together with interest accrued thereon to the redemption date, and that, from and after such date, interest thereon shall cease to accrue. If any Series 2011A Bond is to be redeemed in part only, the notice of redemption that relates to such Series 2011A Bond shall state also that on or after the redemption date, upon surrender of such Series 2011A Bond, the Holder thereof shall be entitled to a new Series 2011A Bond or Series 2011A Bonds, bearing interest at the same rate and in aggregate principal amount equal to the unredeemed portion of such Series 2011A Bond. The notice required to be given by the Trustee shall be sent by first class mail to the registered Holders of the Series 2011A Bonds to be redeemed, at their addresses as they appear on the Bond registration books of the Authority, not less than thirty (30) nor more than forty-five (45) days prior to the redemption date. The failure to give notice of the redemption of any Series 2011A Bond or portion thereof to the registered Holder of such Series 2011A Bonds shall not affect the validity of the proceedings for the redemption of any Series 2011A Bonds for which notice of redemption has been given in accordance with the provisions of the Bond Resolution

19 Additional Bonds The Authority does not presently anticipate issuing any Series of Additional Bonds under the Bond Resolution, as the Company is anticipated to fund any cost overruns of the Renewable Energy Projects for the Series 2011 Local Units under the Company Lease Agreement. The initial financing pool for the Renewal Energy Program has been, and any additional tranches of bonds for further Authority Renewable Energy Programs shall be, issued under separate Authority bond resolutions. Thereafter, upon the Authority s adoption of a Supplemental Resolution and the amendment of the Company Lease Agreement to adjust and conform the Basic Lease Payment amounts to the principal of and interest on any Series of Additional Bonds, and further, upon compliance with the laws and procedures applicable for issuance of any series of Authority bonds, then one or more Series of Additional Bonds of the Authority may be authorized to be issued pursuant to and in accordance with the terms of the Act either to (i) refund any Bonds (including Additional Bonds) of the Authority, or (ii) raise funds for any Completion Project. After the issuance of the Series 2011 Bonds, and after the authentication and delivery by the Trustee upon original issuance of any Series of Additional Bonds (collectively, the Bonds ), all Additional Bonds shall for all purposes of the Bond Resolution be deemed to constitute Bonds, shall be entitled to the pledge of the Trust Estate provided by the Bond Resolution, and shall have equal rank with the Outstanding Series 2011 Bonds and any Series of Outstanding Additional Bonds previously authenticated and delivered, if any, and such Additional Bonds shall be entitled to the security and benefit of such pledge and of the provisions of the Bond Resolution. Book-Entry Only System The following description of DTC, and the procedures and record keeping with respect to beneficial ownership interests in the Series 2011 Bonds, payment of principal, interest and other payments on the Series 2011 Bonds to Direct Participants, Indirect Participants or Beneficial Owners, confirmation and transfer of beneficial ownership interests in such Series 2011 Bonds and other related transactions by and between DTC, the Direct Participants, the Indirect Participants and the Beneficial Owners is based solely on information provided by DTC, and the Authority, the Company and the Underwriters assume no responsibility therefor. Accordingly, no representations can be made concerning these matters and neither the Direct Participants, the Indirect Participants nor the Beneficial Owners should rely on the following information with respect to such matters but should instead confirm the same with DTC or the Direct Participants or the Indirect Participants, as the case may be. Information concerning DTC and the Book- Entry Only System has been obtained from DTC and is not guaranteed as to accuracy or completeness by, and is not to be construed as a representation of, the Authority, the Company and the Underwriters. DTC will act as the initial securities depository for the Series 2011 Bonds. The Series 2011 Bonds will be issued as fully-registered securities registered in the name of Cede (DTC s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered bond certificate will be issued for each maturity of the Series 2011 Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC

20 DTC, the world s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a banking organization within the meaning of the New York Banking Law, a member of the Federal Reserve System, a clearing corporation within the meaning of the New York Uniform Commercial Code, and a clearing agency registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non- U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC s participants ( Direct Participants ) deposit with DTC. DTC also facilitates the post-trade settlement among computerized book-entry transfers and pledges between Direct Participants accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ( DTCC ). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ( Indirect Participants ). DTC has a Standard & Poor s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. Purchases of Series 2011 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2011 Bonds on DTC s records. The ownership interest of each actual purchaser of each Series 2011 Bond ( Beneficial Owner ) is in turn to be recorded on the Direct and Indirect Participants records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Series 2011 Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Series 2011 Bonds, except in the event that use of the book-entry system for the Series 2011 Bonds is discontinued. To facilitate subsequent transfers, all Series 2011 Bonds deposited by Direct Participants with DTC are registered in the name of DTC s partnership nominee, Cede, or such other name as may be requested by an authorized representative of DTC. The deposit of the Series 2011 Bonds with DTC and their registration in the name of Cede or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2011 Bonds; DTC s records reflect only the identity of the Direct Participants to whose accounts such Series 2011 Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to

21 Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices shall be sent to DTC. If less than all of the Series 2011 Bonds within a maturity are being redeemed, DTC s practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed. Neither DTC nor Cede (nor any other DTC nominee) will consent or vote with respect to any matter related to the Series 2011 Bonds unless authorized by a Direct Participant in accordance with DTC s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Authority as soon as possible after the record date. The Omnibus Proxy assigns Cede s consenting or voting rights to those Direct Participants to whose accounts the Series 2011 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal, redemption premium, if any, and interest payments on the Series 2011 Bonds will be made to Cede, or such other nominee as may be requested by an authorized representative of DTC. DTC s practice is to credit Direct Participants accounts, upon DTC s receipt of funds and corresponding detail information from the Authority or the Paying Agent on payable dates in accordance with their respective holdings shown on DTC s records. Payments by Direct Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in street name, and will be the responsibility of such Participant and not of DTC, the Authority or its Paying Agent, if any, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal, redemption premium, if any, and interest to Cede (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Authority or its Paying Agent, if any, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of the Direct and Indirect Participants. DTC may discontinue providing its services as securities depository with respect to the Series 2011 Bonds at any time by giving reasonable notice to the Authority or its Paying Agent, if any. Under such circumstances, in the event that a successor securities depository is not obtained, physical Series 2011 Bonds are required to be printed and delivered. The Authority may decide to discontinue use of the system of book-entry only transfers through DTC (or a successor securities depository). In such event, physical Series 2011 Bonds will be printed and delivered to the Beneficial Owners. The information in this section concerning DTC and DTC s book-entry system has been obtained from DTC, but the Authority, the Company and the Underwriters take no responsibility for the accuracy thereof. THE AUTHORITY OR THE TRUSTEE WILL HAVE NO RESPONSIBILITY OR OBLIGATION, EITHER SINGULARLY OR JOINTLY, TO DIRECT PARTICIPANTS, TO INDIRECT PARTICIPANTS, OR TO ANY BENEFICIAL OWNER WITH RESPECT TO (I) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC, CEDE, ANY DIRECT PARTICIPANT, OR ANY INDIRECT PARTICIPANT; (II) ANY NOTICE THAT IS

22 PERMITTED OR REQUIRED TO BE GIVEN TO THE OWNERS OF THE SERIES 2011 BONDS UNDER THE BOND RESOLUTION; (III) THE SELECTION BY DTC OR ANY DIRECT PARTICIPANT OF ANY PERSON TO RECEIVE PAYMENT IN THE EVENT OF A PARTIAL REDEMPTION OF THE SERIES 2011 BONDS; (IV) THE PAYMENT BY DTC OR ANY DIRECT PARTICIPANT OR INDIRECT PARTICIPANT OF ANY AMOUNT WITH RESPECT TO THE PRINCIPAL OR REDEMPTION PREMIUM, IF ANY, OR INTEREST DUE WITH RESPECT TO THE SERIES 2011 BONDS; (V) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC AS THE OWNER OF SERIES 2011 BONDS; OR (VI) ANY OTHER MATTER. Discontinuance of Book-Entry Only System In the event that the Book-Entry Only System is discontinued, the following provisions would apply. The Trustee shall keep the registration books for the Series 2011 Bonds at its principal corporate trust office. Subject to the further conditions contained in the Bond Resolution, the Series 2011 Bonds may be transferred or exchanged for one or more Series 2011 Bonds in different authorized denominations upon surrender thereof at the principal corporate trust office of the Trustee by the registered owners or their duly authorized attorneys. Upon surrender of any Series 2011 Bonds to be transferred or exchanged, the Trustee shall record the transfer or exchange in its registration books, and shall authenticate and deliver new Series 2011 Bonds appropriately registered and in appropriate authorized denominations. During the fifteen (15) days immediately preceding the date of mailing of any notice of redemption or any time following the mailing of any notice of redemption, the Trustee shall not be required to effect or register any transfer or exchange of any Series 2011 Bond which has been selected for such redemption. The Authority and the Trustee shall be entitled to treat the registered owners of the Series 2011 Bonds, as their names appear in the registration books as of the appropriate dates, as the owners of such Series 2011 Bonds for all purposes under the Bond Resolution. No transfer or exchange made other than as described above and in the Bond Resolution shall be valid or effective for any purposes under the Bond Resolution. General SECURITY FOR THE SERIES 2011 BONDS The Series 2011 Bonds are special and limited obligations of the Authority. As the sole security for the payment of the principal and redemption premium, if any, of and the interest on the Bonds, including the Series 2011 Bonds, and as security for the observance and performance of any other duty, covenant, obligation or agreement of the Authority under the Bond Resolution, the Authority has pledged the Trust Estate to the Trustee pursuant to the Bond Resolution. Such pledge was valid and binding from the time when the pledge was made, and the Trust Estate was immediately subject to the lien of such pledge without any physical delivery thereof or further act and regardless of whether held by the Trustee, and the lien of such pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the Authority, irrespective of whether such parties have notice thereof. The provisions of the Bonds and the Bond Resolution are deemed to be and do constitute contracts by and among the Authority, the Trustee and the registered owners, from time to time,

23 of the Bonds, and the security interest which is granted and the pledge which is made in the Bond Resolution and the duties, covenants and agreements which are set forth in the Bond Resolution to be performed on behalf of the Authority and the Trustee shall be for the equal and ratable benefit, protection and security of the registered owners of any and all Bonds, including the Series 2011 Bonds and the Series 2011B Note, all of which, regardless of the time or times of their issuance or maturity, shall be of equal rank without preference, priority or distinction as to lien or otherwise of any of the Bonds over any other thereof, except as expressly provided in or pursuant to the terms of the Bond Resolution. For a description of the Authority s authority to issue Additional Bonds, see DESCRIPTION OF THE SERIES 2011 BONDS Additional Bonds herein. For a form of the Bond Resolution, see APPENDIX D Form of Bond Resolution, Power Purchase Agreement, License and Access Agreement, Company Lease Agreement and County Guaranty Agreement herein. The Trust Estate includes all right, title and interest of the Authority in, to and under (i) the Revenues, (ii) all moneys payable by the County under the County Guaranty, (iii) all moneys and securities held in any Funds and Accounts established under the Bond Resolution (except for moneys or securities held in (A) the Administrative Expense Account and the Costs of Issuance Account of the Administrative Fund and (B) the County Security Fund), (iv) the Company Lease Agreement, but only to the extent necessary to enforce the payment of Revenues owed by the Company thereunder, which excludes all of the Authority s obligations thereunder, the Reserved Rights, and the Authority s rights to the Projects for the Series 2011 Local Units and (v) any other amounts received from any other source by or on behalf of the Authority and pledged by the Authority as security for the payment of the Bonds, including the Series 2011 Bonds, all of which as shall have been pledged by the Authority to the Trustee pursuant to Section 1.04 of the Bond Resolution as security for the payment of the principal, redemption premium, if any, and interest on the Bonds, including the Series 2011 Bonds. The Revenues include (i) all Basic Lease Payments made by the Company under the Company Lease Agreement, together with all Power Purchase Price Payments made by the Series 2011 Local Units to the Trustee, (ii) those Additional Lease Payments related to the Purchase Option Price or the Mandatory Purchase Price made by the Company under the Company Lease Agreement, (iii) any investment income which is derived from the investment of any funds which are held by the Trustee pursuant to the terms of the Bond Resolution and which are deposited in the Funds and Accounts established under the Bond Resolution; provided, however, that Revenues shall not include the investment income on moneys or securities held in (A) the Administrative Expense Account and the Costs of Issuance Account of the Administrative Fund and (B) the County Security Fund, and (iv) any other amounts received from any other source by or on behalf of the Authority, the Company, the County, the Series 2011 Local Units, the Trustee or the Paying Agent, whereby such amounts are directed or permitted to be applied to the payment of the principal of, redemption premium, if any, and interest on the Bonds, including the Series 2011 Bonds. THE SERIES 2011 BONDS ARE SPECIAL AND LIMITED OBLIGATIONS OF THE AUTHORITY. NEITHER THE STATE, NOR ANY POLITICAL SUBDIVISION THEREOF (OTHER THAN THE AUTHORITY BUT SOLELY TO THE EXTENT OF THE TRUST ESTATE, AND OTHER THAN THE COUNTY TO THE EXTENT OF THE COUNTY GUARANTY), IS OBLIGATED TO PAY THE PRINCIPAL OF, OR

24 INTEREST ON, THE SERIES 2011 BONDS. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE NOR ANY POLITICAL SUBDIVISION THEREOF (OTHER THAN THE COUNTY TO THE EXTENT OF THE COUNTY GUARANTY) IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, OR INTEREST ON, THE SERIES 2011 BONDS. THE AUTHORITY HAS NO TAXING POWER. Company Lease Agreement The following is a summary of certain provisions of the Company Lease Agreement. The summary does not purport to be complete and comprehensive and reference is made to a form of the Company Lease Agreement which is included in Appendix D hereto. All capitalized terms used in this subsection and not otherwise defined shall have the meaning ascribed to such terms in the Company Lease Agreement. Under the Company Lease Agreement, the Company is obligated to commence construction of the first Project by no later than June 15, 2012, to proceed diligently and to complete the Projects on or before December 15, 2012, unless such date is extended due to Force Majeure or an Event of Default under a Local Unit License by a Series 2011 Local Unit. Prior to the issuance of the Series 2011 Bonds, the Company shall enter into an engineering, procurement and construction contract with Power Partners MasTec, LLC for the design, engineering and construction of the Projects financed by the Series 2011 Bonds. Under the terms of the Company Lease Agreement, the Company is required to make Basic Lease Payments to the Trustee. A substantial portion of the revenue to the Company used to make the Basic Lease Payments consists of the sale of SRECs generated by the Renewable Energy Projects for the Series 2011 Local Units. The Principal Portion of Basic Lease Payments shall be due on each Basic Lease Payment Date in the amount of principal due and payable on the Bonds, including the Series 2011A Bonds, on the immediately succeeding Principal Payment Date, with respect to regularly scheduled Principal Payment Dates, all as set forth on Exhibit A-3 Regular to the Company Lease Agreement, (except for the January 15, 2013 payment, where the Basic Lease Payment Date and the Principal Payment Date for the Series 2011B Note shall be the same date). The Interest Portion of Basic Lease Payments shall be due on each Basic Lease Payment Date in the amount of interest due and payable on the Bonds, including the Series 2011A Bonds, on the immediately succeeding Interest Payment Date, with respect to regularly scheduled Interest Payment Dates (except for the January 15, 2013 payment, where the Basic Lease Payment Date and the Interest Payment Date for the Series 2011B Note shall be the same date), all as set forth on Exhibit A-3 Regular to the Company Lease Agreement. The Basic Lease Payment Dates have been established as any date set forth in Exhibit A- 3 Regular to the Company Lease Agreement and designated as a Basic Lease Payment Date, which for the Interest Portion and Principal Portion of any Basic Lease Payment, shall be a day five (5) months prior (i.e., each January 15 and July 15, commencing January 15, 2013) to any regularly scheduled Interest Payment Date for the Series 2011A Bonds (i.e., each June 15 and December 15, commencing June 15, 2012); provided that the interest payable on the Series 2011A Bonds on June 15, 2012 and December 15, 2012 shall be paid from the proceeds of the Series 2011B Note deposited in the Capitalized Interest Account of the Debt Service Fund, and

25 any regularly scheduled Principal Payment Date for the Series 2011A Bonds (i.e., each June 15), respectively, or if either of such days is not a Business Day, the first Business Day prior to such date. Except for the credits to be received by the Company, including the Power Purchase Price Payments made by the Series 2011 Local Units to the Trustee under their respective Local Unit License Agreements, the obligation of the Company, as Lessee, to make Lease Payments (including Basic Lease Payments) in full and when due under the Company Lease Agreement shall be absolute and unconditional in all events, including without limitation any circumstance regarding the Projects, regardless of whether any such event shall be foreseen or otherwise, and regardless of whether any such event shall occur by accident or otherwise. See SECURITY FOR THE SERIES 2011 BONDS Flow of Payments herein. The Company, as Lessee, has further acknowledged and irrevocably covenanted under the Company Lease Agreement that the terms of the Company Lease Agreement create a valid and binding obligation of the Company, as Lessee, to make Lease Payments (including Basic Lease Payments) from any available source under all circumstances. As the initial County Security Fund Requirement is $1,500,000, the Company is obligated to deposit certain security with the Trustee no later than the earlier of (i) ninety (90) days after completion of the Series 2011 Local Unit projects or (ii) March 15, 2013, for the sole benefit of the County to secure the Company s performance and payment under the Company Lease Agreement. After the first year of operations of the Company (assuming receipt of Section 1603 Grant proceeds by the Company and elimination of the County Deficiency Amount (as defined in the Company RFP)), the funds in the County Security Fund shall be moved to the Debt Service Fund (utilized as a credit to debt service on the Series 2011 Bonds) and be invested in Investment Securities held by the Trustee or another financial institution deemed acceptable by the County. In the event that the Series 2011 Bonds are not issued by December 22, 2011 (the date stated by the Company as the time required for the Company to obtain the Section 1603 Grant), the $1,500,000 held in the County Security Fund will be released to the Company immediately after the first year of Company operations provided that the County Deficiency Amount has been eliminated. All moneys are required to be on deposit with the Trustee, in the County Security Fund, and such security is held solely for the benefit of the County and is neither included in the Trust Estate nor otherwise pledged to the Holders. To the extent Additional Bonds are authorized under the Bond Resolution, one of the conditions precedent to issuance of any such Series of Additional Bonds is an amendment and supplement to the Company Lease Agreement, including, as applicable, the Basic Lease Payment schedule, to reflect any increased principal of and interest due on any Series of Additional Bonds issued to fund all or a portion of a Completion Project (which the Authority is under no obligation to issue, as the Company is obligated to fund any Renewable Energy Project cost overruns). Basic Lease Payments made by the Company and received by the Trustee shall be deposited in the Revenue Account of the Revenue Fund. After any such funds have been on deposit for one hundred twenty-three (123) consecutive days in the Revenue Account within the Revenue Fund, and have not been withdrawn or recaptured by or on behalf of the Company or its

26 other creditors, the Trustee shall transfer such funds to the Aged Account within the Revenue Fund. On or prior to each Interest Payment Date, the Trustee shall transfer from moneys on deposit in the Aged Account within the Revenue Fund to the Interest Account in the Debt Service Fund the amount that, together with the amounts, if any, already on deposit in the Interest Account and the amounts, if any, on deposit in the Capitalized Interest Account and designated for use on such Interest Payment Date pursuant to the Bond Resolution or a Supplemental Resolution, is equal in the aggregate to the interest due and payable on the Outstanding Bonds, including the Outstanding Series 2011 Bonds, on such Interest Payment Date. On or prior to each Principal Payment Date, the Trustee shall transfer from moneys on deposit in the Aged Account within the Revenue Fund to the Principal Account in the Debt Service Fund the amount that, together with the amounts, if any, already on deposit in the Principal Account, is equal in the aggregate to the principal, Sinking Fund Installment or Redemption Price due and payable on the Outstanding Bonds, including the Outstanding Series 2011 Bonds, on such Principal Payment Date. The Underwriters and Authority make no representation of the Company s ability to make payments under the Company Lease Agreement. For further information about the Company see THE COMPANY and APPENDIX C - Certain Information Concerning the Company. Local Unit License Agreements The following is a summary of certain provisions of the Local Unit License Agreements. The summary does not purport to be complete and comprehensive and reference is made to a form of the Local Unit License Agreements which is included in Appendix D hereto. All capitalized terms used in this subsection and not otherwise defined shall have the meaning ascribed to such terms in the Local Unit License Agreements. Under the Renewable Energy Program, and specifically, the respective Local Unit License Agreements, the Series 2011 Local Units are required to pay the Power Purchase Price, through Power Purchase Price Payments made by or on behalf of such Series 2011 Local Units, directly to the Trustee. The Power Purchase Price has been established by the Company and the Authority pursuant to the Power Purchase Agreement for a minimum term of fifteen (15) years, subject to the terms of the Power Purchase Agreement. The Authority s right and obligation to purchase the renewable energy produced from the Renewable Energy Project located on the Local Unit Facility of each such respective Series 2011 Local Unit (i) commences severally but not jointly once the installation of the Projects, for such Series 2011 Local Unit, on their Local Unit Facility, has been completed by or on behalf of the Company in accordance with mutually agreed upon Plans and Specifications therefor, and (ii) has been assigned to each respective Series 2011 Local Unit under their Local Unit License Agreements. Pursuant to the Company Lease Agreement, the Company has until December 15, 2012 (as such date may be extended for Force Majeure or a Series 2011 Local Unit Event of

27 Default) to complete the installation of all Projects for the Series 2011 Local Units. Accordingly there are different Power Purchase Price Payment commencement dates (the Commencement Dates ) for the various Series 2011 Local Units, but all shall be obligated to commence such payments no later than January , assuming the Company completes its Project installation obligations on a timely basis (as such date may be extended for Force Majeure or a Series 2011 Local Unit Event of Default). Under the Local Unit License Agreements, the Series 2011 Local Units are obligated to pay the Power Purchase Price, through Power Purchase Price Payments made to the Trustee, in full and on time, without regard to set-off or any other rights they might assert against the Authority or the Trustee for any reason, which rights against the Company, the Authority or the Trustee are waived by the Series 2011 Local Units. Upon receipt, the Trustee shall deposit the Power Purchase Price Payments in the Revenue Account of the Revenue Fund, and the Company shall receive a credit to its Basic Lease Payments owed under the Company Lease Agreement. After any such funds deposited in the Revenue Account within the Revenue Fund have been on deposit for one hundred twenty-three (123) consecutive days in the Revenue Account within the Revenue Fund, and have not been withdrawn or recaptured by or on behalf of the Company or its other creditors, the Trustee shall transfer such funds to the Aged Account within the Revenue Fund, where such funds are available to pay the principal of, redemption premium, if any, and interest on the Outstanding Bonds, including the Series 2011 Bonds. See SECURITY FOR THE SERIES 2011 BONDS Company Lease Agreement above. The following chart sets forth the expected percentage of revenue from the following sources for the Company s payment of the Basic Lease Payments to the Trustee, which shall be applied by the Trustee to the payment of debt service on the Series 2011 Bonds: (1) the annual revenue from Power Purchase Price Payments scheduled to be made by the respective Series 2011 Local Units under the Power Purchase Agreement and their Local Unit License Agreements, assuming (i) no interruptions in service, (ii) the Company is able to produce and sell the full guaranteed amount of renewable energy as set forth in the Power Purchase Agreement, and (iii) the Series 2011 Local Units make Power Purchase Price Payments for, all of such amount of electricity; (2) Company revenue from the tax benefits related to the Projects for the Series 2011 Local Units; and (3) Company revenue from the sale of SRECs and other revenue available to the Company

28 Source of Basic Lease Payments Power Purchase Price Payments: 24.6% Fredon Township 0.2% Town of Newton 0.7 Byram Township School District 1.7 Frankford Board of Education 1.4 Franklin Borough Board of Education 0.8 Green Township Board of Education 0.6 Hardyston Township Board of Education 2.4 High Point Regional School District 1.6 Kittatinny Regional School District 1.3 Newton Board of Education 2.4 County of Sussex 2.6 Sussex County Community College 3.7 Sussex County Technical School 5.4 Company Revenue: 75.4% Tax Credits/Benefits 27.2% SREC Revenue 48.2 Total: 100% Source: Gabel Associates. The Company has the right under the Renewable Energy Program Documents to change the sizing of the Renewable Energy Projects, within the parameters of the Company Proposal (as such term is defined in the Bond Resolution), for and with the consent of each affected Series 2011 Local Unit (and the Authority s consent) as the Company proceeds with the development of each Renewable Energy Project. Any such changes may alter the allocation of the relative Power Purchase Price Payment set forth in the above chart. To the extent the Company causes an Event of Default to occur as defined under the Company Lease Agreement prior to the expiration of its original fifteen (15) year term, or any subsequent period of extension, and the nature of such Event of Default (including, without limitation, the failure of the Company to make all Basic Lease Payments thereunder on time and in full) causes the termination of the Company Lease Agreement and the Power Purchase Agreement, the Local Unit License Agreements shall continue in full force and effect, with the following changes, which shall not require amendment or supplement thereof or thereto, but which changes shall be in place automatically upon the termination of the Company Lease Agreement and the Power Purchase Agreement. In such event, instead of paying the Power Purchase Price to the Trustee for the credit and benefit of the Company under the Company Lease Agreement (such amount being defined as the Gross Substitute Power Purchase Price, payable for the benefit of the Authority as the owner of the Renewable Energy Projects), the Series 2011 Local Units shall pay the Trustee a lower adjusted Power Purchase Price (defined as the Net Substitute Power Purchase Price thereunder), reflecting the payment of certain administrative fees and the costs of operating and maintaining their Renewable Energy Projects for the balance of the original fifteen (15) year or extended term. No assurance can be given that

29 either the Gross Substitute Power Purchase Price or the aggregate Net Substitute Power Purchase Price will be sufficient to make scheduled payments of debt service on the Series 2011 Bonds. County Guaranty The following is a summary of certain provisions of the County Guaranty. The summary does not purport to be complete and comprehensive and reference is made to a form of the County Guaranty which is included in Appendix D hereto. All capitalized terms used in this subsection and not otherwise defined shall have the meaning ascribed to such terms in the County Guaranty. The payment of the principal of (including Sinking Fund Installments, if any) and interest on the Series 2011 Bonds (but not any redemption premium), and the interest thereon, shall be fully, unconditionally, and irrevocably guaranteed by the County pursuant to the County Guaranty. The County has the right, power and obligation to cause the levy of ad valorem taxes upon all the taxable property within the County, without limitation as to rate or amount, if necessary, in order to meet its payment obligations under the County Guaranty. On August 17, 2011, the County finally adopted that certain guaranty ordinance (the County Guaranty Ordinance ) entitled GUARANTY ORDINANCE OF THE COUNTY OF SUSSEX, NEW JERSEY, SECURING THE MORRIS COUNTY IMPROVEMENT AUTHORITY S COUNTY OF SUSSEX GUARANTEED RENEWABLE ENERGY PROGRAM LEASE REVENUE BONDS (COUNTY OF SUSSEX PROGRAM), SERIES 2011 (FEDERALLY TAXABLE) IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $50,000, Pursuant to the terms of that County Guaranty Ordinance and Section 37 of the Act (N.J.S.A. 40:37A-80), the County and the Authority are scheduled to enter into that certain County Guaranty Agreement (Sussex County Renewable Energy Program, Series 2011) to be dated as of December 1, 2011, (the County Guaranty Agreement ). In accordance with the terms of the County Guaranty Ordinance, the County Guaranty Agreement, and the Bond Resolution, an authorized officer of the County shall execute a guaranty certificate (the County Guaranty Certificate, and together with the County Guaranty Ordinance and the County Guaranty Agreement, the County Guaranty ) within each Series 2011 Bond for each maturity thereof. The County Guaranty Certificate shall state that the County is fully, irrevocably and unconditionally liable for the payment, when due (whether at stated maturity or earlier on any Sinking Fund Installment due date or date of redemption or acceleration), of the principal of (including mandatory Sinking Fund Installments, if any) and the interest on the Series 2011 Bond, and, if necessary, the County shall levy ad valorem taxes upon all the taxable property within the County, without limitation as to rate or amount, in order to make such payments. The County Guaranty shall be for the benefit of both Series of Series 2011 Bonds. If, thirty (30) days prior to any Interest Payment Date or Principal Payment Date, the amounts that are on deposit in the Aged Account of the Revenue Fund established under the Bond Resolution are insufficient to provide for the payment of the principal of (including Sinking Fund Installments, if any, but not redemption premiums) and/or interest on the Series 2011 Bonds that are due and payable on such payment dates, the Trustee shall notify the County s Chief Financial Officer on such day of the amounts that are necessary to provide for the payment of the principal of and/or interest on the Series 2011 Bonds (the Deficiency )

30 Pursuant to the Act, payments of redemption premium are not permitted to be made by the County under the County Guaranty. The County shall be obligated to make payment of the Deficiency to the Trustee no later than one (1) business day prior to the Interest Payment Date or the Principal Payment Date, as applicable, of the Series 2011 Bonds. Notwithstanding any other provision of the County Guaranty Agreement, failure by the Trustee to give the County notice as provided herein shall not relieve the County of its obligations to make payment under the terms of the County Guaranty. When notice has been provided, as described above, the County shall take all necessary actions to make payment of the Deficiency to the Trustee as provided above. Such actions shall include the adoption of an emergency appropriation or an emergency temporary appropriation and the funding of such appropriation in accordance with the requirements of the Local Budget Law (N.J.S.A. 40A:4A-1 et seq.), the levy of ad valorem taxes on all taxable property in the County, without limitation as to rate or amount, or any other actions that are legally permitted to be taken to meet the requirements of such County Guaranty (including the adoption of a bond ordinance pursuant to the provisions of the Local Bond Law). The County is required to make payments under the County Guaranty, if, for any reason, the Trustee should have insufficient funds on hand in the Debt Service Fund one (1) business day prior to any Interest Payment Date or Principal Payment Date to make the full and timely payment of the principal (including Sinking Fund Installments, if any, but not including redemption premiums) and interest on the Series 2011 Bonds due on such dates, regardless of whether any of the following events occur: (i) any default under the Company Lease Agreement due to the Company s failure to pay all of its Basic Lease Payments on the respective Basic Lease Payment Dates, or otherwise, and/or (ii) any default or termination of the Local Unit License Agreements due to the Series 2011 Local Unit s failure to make all Power Purchase Price Payments (including, as applicable, the payment of the Net Substitute Power Purchase Price), or otherwise. To the extent the Company causes an Event of Default, as defined under the Company Lease Agreement, to occur and such Event of Default requires the County to make a payment under the County Guaranty, the County has the option under the County Guaranty Agreement to provide sufficient funding with the Trustee and cause the Authority to redeem or defease all or a portion of the Series 2011 Bonds in accordance with the terms of the Bond Resolution. See, DESCRIPTION OF THE SERIES 2011 BONDS Optional Redemption herein. For more information on the County, see APPENDIX A Certain Information Concerning the County and APPENDIX B Audited Financial Statements of the County herein. For a description of County Guaranty, see APPENDIX D Form of Bond Resolution, Power Purchase Agreement, License and Access Agreement, Company Lease Agreement and County Guaranty Agreement herein. Flow of Payments Assuming the Company has successfully installed all the Renewable Energy Projects for the Series 2011 Local Units at their respective Local Unit Facilities, the following is a brief description of the flow of payments from the various Renewable Energy Program participants

31 that are available to pay the principal of, redemption premium, if any, and interest on the Series 2011 Bonds. County Guaranty payments, if any are made, are not permitted under the Act to be applied to redemption premiums. For a description of the Bond Resolution and the County Guaranty, see APPENDIX D Form of Bond Resolution, Power Purchase Agreement, License and Access Agreement, Company Lease Agreement and County Guaranty Agreement herein. Every six (6) months, on Basic Lease Payment Dates (i.e., each January 15 and July 15) commencing January 15, 2013, that have been established to occur five (5) months prior to the Interest Payment Dates (i.e., each June 15 and December 15) and the Principal Payment Dates (i.e., each June 15) of the Series 2011A Bonds, the Company is required to make its Interest Portion and Principal Portion Basic Lease Payments to the Trustee. See Sections 305 and 306 of the Company Lease Agreement. The Basic Lease Payment schedule set forth in Exhibit A-3 Regular to the Company Lease Agreement is identical to the scheduled debt service amounts due on the Series 2011A Bonds, except that the Basic Lease Payments come due five (5) months prior to the scheduled debt service payment dates on the Series 2011A Bonds and the interest payments due on June 15, 2012 and December 15, 2012 will be made from proceeds of the Series 2011B Note deposited in the Capitalized Interest Account. Although the Basic Lease Payment schedule sets forth the gross amount of Basic Lease Payments owed by the Company, Sections 305 and 306 of the Company Lease Agreement also provide that the actual Basic Lease Payments made by the Company on each Basic Lease Payment Date shall be net of the various credits described below, if and when the funds giving rise to such credits have been received by the Trustee. The Trustee, upon receipt of such Basic Lease Payments from the Company and as directed by Sections 5.05(1)(a) and 5.11 of the Bond Resolution, shall deposit the funds in the Revenue Account of the Revenue Fund and invest the funds in Investment Obligations, pending disbursement. After such monies have been on deposit for one hundred twenty-three (123) consecutive days in the Revenue Account within the Revenue Fund, and have not been withdrawn or recaptured by or on behalf of the Company or its other creditors, the Trustee shall pursuant to Section 5.05(1)(c) of the Bond Resolution transfer such funds to the Aged Account within the Revenue Fund. On or prior to each Interest Payment Date, the Trustee shall, pursuant to Section 5.05(2) of the Bond Resolution, transfer, from moneys on deposit in the Aged Account within the Revenue Fund to the Interest Account in the Debt Service Fund, the amount that, together with the amounts, if any, already on deposit in the Interest Account and the amounts, if any, on deposit in the Capitalized Interest Account and designated for use on such Interest Payment Date pursuant to the Bond Resolution or Supplemental Resolution, is equal in the aggregate to the interest due and payable on the Outstanding Bonds on such Interest Payment Date. Subsection (3) requires a similar transfer, but from the Principal Account in the Debt Service Fund, on each Principal Payment Date, in order to pay the aggregate amount of principal (or Sinking Fund Installment or Redemption Price, if applicable) due and payable on the Outstanding Bonds on such Principal Payment Date. The Trustee shall withdraw both the interest due on the Outstanding Bonds on each such Interest Payment Date from the funds in the Interest Account and the Capitalized Interest Account, if so designated, of the Debt Service Fund (Section 5.06(1)(a) of the Bond Resolution),

32 and the principal (including Sinking Fund Installments, if any) also due on the Outstanding Bonds on each such Principal Payment Date from the funds in the Principal Account of the Debt Service Fund (Section 5.06(2)(a) of the Bond Resolution), and pay such amounts over to the Paying Agent. The same bank is acting as both Trustee and Paying Agent for the Series 2011 Bonds. The Bond Resolution also authorizes the completion of the payment process, where the Paying Agent pays the principal of and interest on the Bonds on such respective Principal Payment Dates and Interest Payment Dates from the funds so received. Sections 5.06(1)(b) and 2(b) of the Bond Resolution require that the County receive certain advance notification of any Deficiency and the possible need for a draw on the County Guaranty as follows. If, by 9:00 a.m. Eastern Standard Time or Eastern Daylight Time, as applicable, thirty (30) days prior to any Interest or Principal Payment Date, the Trustee has determined that there are insufficient funds in the Interest or Principal Accounts in the Debt Service Fund (after taking into account any moneys earmarked for transfer therein from the Revenue Fund and all other amounts available under the Bond Resolution for transfer into the Interest or Principal Accounts in the Debt Service Fund) to pay the full amount of interest and/or principal (including Sinking Fund Installments) due and owing on such Bonds on such Interest or Principal Payment Date, the Trustee shall immediately notify the Authority, the Company, the County and the Paying Agent of such Deficiency. The Trustee shall continue to notify such entities of any continuing Deficiency on a weekly basis, with the final notification being 9:00 a.m. Eastern Standard Time or Eastern Daylight Time, as applicable, on the Interest or Principal Payment Date. The County shall satisfy any such Deficiency remaining as of 10:00 a.m. Eastern Standard Time or Eastern Daylight Time, as applicable, on any such Interest or Principal Payment Date, by immediately making a payment under the County Guaranty (in accordance with the terms of the County Guaranty Agreement, if not already made) in the amount of any Deficiency, in immediately available funds to the Trustee for deposit in the Interest or Principal Accounts in the Debt Service Fund. Such moneys shall be transferred from the Trustee to the Paying Agent and applied by the Paying Agent to the payment to Holders as of the Record Date of such interest and principal (including any Sinking Fund Installment) or Redemption Price, as applicable, due on such Bonds on such Interest or Principal Payment Date in accordance with the terms of the Bond Resolution. The Authority and the Trustee shall enforce the provisions of the County Guaranty to the extent the County fails, for whatever reason, to perform its obligations thereunder. Although the Company is obligated, as set forth above, to pay the full amount of Basic Lease Payments on each Basic Lease Payment Date, the Company is entitled to several credits, some recurring, and others that may occur infrequently or only once. The following briefly describes the recurring credits, such as those for Power Purchase Payments made by the Series 2011 Local Units, for interest earned on amounts on deposit in the Revenue Account of the Revenue Fund, and for a sweep of funds remaining in the Aged Account of the Revenue Fund after debt service has been paid. For a description of the credit provisions relating to the Base Lease Payments under the Company Lease Agreement, see APPENDIX D Form of Bond Resolution, Power Purchase Agreement, License and Access Agreement, Company Lease Agreement and County Guaranty Agreement herein

33 Pursuant to Section 6.4 of the Power Purchase Agreement, the Company shall, based on on-site meters the Company installs as part of the Projects, provide the Series 2011 Local Units with monthly billing information for the electricity (i) provided to their Local Unit Facilities from the Renewable Energy Projects installed on the roofs or parking facilities of such Local Unit Facilities, and (ii) sold to the Series 2011 Local Units at the pre-established Power Purchase Price rate, plus escalation. A copy of such billing information shall be supplied to the Trustee. Under Section 5.1(c)(i) of the applicable Local Unit License Agreements, the Series 2011 Local Units are obligated to make their monthly Power Purchase Price Payments to the Trustee, on behalf of the Company, in a timely manner and without set-off or other reduction. The Company acknowledges, under the Power Purchase Agreement, that the obligation of the Series 2011 Local Units to make such Power Purchase Price Payments for their respective Local Unit Facilities is several, and not joint. The Company receives a credit against the Basic Lease Payment owed on each Basic Lease Payment Date for all Power Purchase Price Payments made by the Series 2011 Local Units from the preceding Basic Lease Payment Date (or the Commencement Date at the outset) through and including ten (10) Business Days prior to any such Basic Lease Payment Date, all as provided in Section 302(a) of the Company Lease Agreement. In accordance with Section 5.05(1)(a) of the Bond Resolution, the Trustee is required to notify the Company of the aggregate amount of these Series 2011 Local Unit Power Purchase Price Payments available as a credit both thirty (30) days prior to each Basic Lease Payment Date, and one (1) Business Day after the ten (10) day cut off period described above. Power Purchase Price Payments received after the ten (10) day cut off period are deemed to have been received one (1) Business Day after any such Basic Lease Payment Date, and are therefore available as a credit to Basic Lease Payments due from the Company on the following Basic Lease Payment Date. In addition, Section 5.11(3) of the Bond Resolution requires the Trustee to transfer the interest earned on monies in the Revenue Account of the Revenue Fund, no less frequently than once a month, to the Aged Account of the Revenue Fund. Section 310(b) of the Company Lease Agreement provides the Company with a credit in the amount of such earnings, plus interest earned thereon as of any such Basic Lease Payment Date, against the next due Interest Portion of Basic Lease Payments due and owing from the Company, and if not fully applied, against the next due Principal Portion of Basic Lease Payments due and owing from the Company, and if still not fully applied or if additional interest earnings are on deposit in the Aged Account, against the next due future Interest Portion, and then Principal Portion, of Basic Lease Payments until fully applied. The Trustee, pursuant to Section 5.05(1)(a) of the Bond Resolution, shall notify the Company in writing (with a copy to the Authority), within ten (10) Business Days after each Basic Lease Payment Date, of the amount of such interest earnings credit available to the Company as of the next Basic Lease Payment Date. On the Business Day following an Interest Payment Date and a Principal Payment Date for all Outstanding Bonds, including the Series 2011 Bonds, Section 5.05(4) of the Bond Resolution directs the Trustee to transfer any monies remaining on deposit in the Aged Account of the Revenue Fund, FIRST, to the County, as reimbursement for the County to the extent of any draw on their County Guaranty, if applicable, and SECOND, into the Interest Account of the Debt Service Fund to pay the next due interest on such Bonds, and then the Principal Account of

34 the Debt Service Fund to pay the next due principal of (including Sinking Fund Installments, if any) such Bonds. The Trustee is further required to promptly notify the Company that such transferred amounts shall be a credit against their Interest Portion, and then Principal Portion, of Basic Lease Payments next due. With regard to the recurring credits against Basic Lease Payments owed by the Company under the Company Lease Agreement, as set forth above, the Company will be apprised of (i) the Revenue Account investment earnings credit almost a full six (6) months prior to the Company s next Basic Lease Payment Date, (ii) the Aged Account sweep transfer and credit almost one (1) month prior to their Basic Lease Payment Date, and (iii) the aggregate of all Power Purchase Price Payments as of ten (10) Business Days prior to any scheduled Basic Lease Payment Date (with an initial notice of five (5) months worth of Power Purchase Price Payments to be made by the Trustee a full thirty (30) days prior to the Company s Basic Lease Payment Date). The non-recurring, or infrequent, credits against Basic Lease Payments, set forth in the definition thereof in the Company Lease Agreement and the Bond Resolution, owed by the Company under the Company Lease Agreement, are for the following: (i) Excess amounts remaining in the Project Fund, once all Projects have been installed and certifications have been executed by the Series 2011 Local Units (either directly or through a construction manager), on a form acknowledged by the Authority, to the effect that such Project installation is in conformity with the Plans and Specifications mutually agreed upon among the Company, the Authority and the Local Unit prior to the onset of acquisition, construction and installation of the Projects; (ii) Partial Release of the County Security Fund, if any, held by the Trustee as a non-pledged Fund to fund any shortfall in otherwise available funds to make Basic Lease Payments or to reimburse the County in the event of a draw on the County Guaranty, when the amount in the County Security Fund exceeds the debt service owed on all Outstanding Series 2011 Bonds (plus a Series of Additional Bonds, if so designated by Supplemental Resolution); (iii) Optional, partial pre-payments of Basic Lease Payments by the Company (the Basic Lease Payment obligation is eliminated in the event of a full pre-payment); (iv) Payments to the Trustee in an amount sufficient to pay the principal of, redemption premium, if any, and interest on all of the Outstanding Bonds allocable to the Renewable Energy Projects or other payments required pursuant to Section 3.7(a)(iv)(A) of the Local Unit License Agreements for each Series 2011 Local Unit upon the revocation of their Local Unit Licenses; and (v) The net proceeds of any condemnation or insurance award

35 Acceleration The Series 2011 Bonds are subject to acceleration prior to their stated maturities upon the occurrence of certain Events of Default under and as defined in the Bond Resolution, at the times and in the manner set forth in the Bond Resolution. For a description of the Events of Default and acceleration provisions under the Renewable Energy Program Documents, see APPENDIX D Form of Bond Resolution, Power Purchase Agreement, License and Access Agreement, Company Lease Agreement and County Guaranty Agreement herein. SUMMARY OF CERTAIN PROVISIONS FOR THE PROTECTION OF GENERAL OBLIGATION DEBT OF NEW JERSEY MUNICIPALITIES AND COUNTIES The following is a summary of certain provisions of New Jersey law relating to the protection of general obligation debt of New Jersey municipalities and counties. This summary does not purport to be a full and complete statement of all of the provisions referred to herein, and the cited statutes should be read in full for a complete understanding of all of said provisions. Local Bond Law The Local Bond Law (N.J.S.A. 40A:2-1 et. seq.). The Local Bond Law generally governs the issuance of bonds and notes by local units to finance certain capital improvements and appropriations. The Local Bond Law requires that bonds must mature within the statutory period of usefulness of the projects bonded and that bonds be retired in serial installments. A 5% cash down payment is generally required toward the financing of capital expenditures. Debt Limits Debt Limits. The net authorized debt of all local units which are municipalities in the State of New Jersey is generally limited by statute to an amount equal to 3.5% of its equalized valuation basis. The equalized valuation basis of the local unit is set by statute as the average for the last three years of the sum of the equalized value of all taxable real property and improvements and certain Class II railroad property within its boundaries, as annually determined by the State Department of the Treasury, Division of Taxation. Certain categories of debt are permitted by statute to be deducted for purposes of computing the statutory debt limit. Exemption To Debt Limits. Extensions of Credit. The debt limit of a local unit may be exceeded with the approval of the Local Finance Board, and as permitted by other statutory exceptions. If all or any part of a proposed debt authorization would exceed its debt limit, the Local Unit must apply to the Local Finance Board for an extension of credit. If the Local Finance Board determines that a proposed debt authorization would not materially impair the ability of a Local Unit to meet its obligations or to provide essential services, and the Local Finance Board makes other statutory determinations, approval is granted

36 School Debt. In the State of New Jersey, in a Type II school district without a Board of School Estimate, school debt authorized by the board of education must be approved by the registered voters of the school district. When the amount authorized exceeds the school district s limit, the district may use the municipality s share of available borrowing capacity upon approval of the proposed debt by the State Commissioner of Education and the Local Finance Board, and subsequently by the registered voters of the district. School debt of a Type I school district is authorized by a Board of School Estimate and the governing body of a local unit. The Local Budget Law (N.J.S.A. 40A:4-1, et seq.) The foundation of the New Jersey local finance system is the annual budget. Every local unit must adopt an operating budget in the form required by the Division of Local Government Services, Department of Community Affairs, State of New Jersey (the Division ). Items of revenue and appropriation are regulated by law and must be certified by the Director of the Division (the Director ) prior to final adoption of the budget. The Local Budget Law requires each local unit to appropriate sufficient funds for payment of current debt service, and the Director is required to review the adequacy of such appropriations. The Director has no authority over individual operating appropriations, unless a specific amount is required by law, but the review focusing on anticipated revenues serves to protect the solvency of all local units. The budgets of local units must be in balance; i.e., total anticipated revenues must equal total appropriations. If in any year a Local Unit s expenditures exceed (or are less than) its realized revenues for that year, then such deficit (excess) must be raised (accounted for) in the succeeding year s budget. Real Estate Taxes. The same general principal that revenue cannot be anticipated in a budget in excess of that realized in the preceding year applies to property taxes. The Local Budget Law (N.J.S.A. 40A:4-29) provides that the maximum which may be anticipated is the sum produced by the multiplication of the amount of delinquent taxes unpaid and owing to the Local Unit on the first day of the current fiscal year by the percentage of collection of delinquent taxes for the year immediately preceding the current fiscal year. The Local Budget Law (N.J.S.A. 40A:4-41) also provides with regard to current taxes that receipts from the collection of taxes levied or to be levied in the municipality, or in the case of a county for general county purposes and payable in the fiscal year, shall be anticipated in an amount which is not in excess of the percentage of taxes levied and payable during the next preceding fiscal year which was received in cash by the last day of such preceding fiscal year. This provision requires that an additional amount (the Reserve for Uncollected Taxes ) be added to the tax levy required to balance the budget so that when the percentage collected of the prior year s tax levy is applied to the combined total, the product will at least be equal to the tax levy required to balance the budget. The Reserve for Uncollected Taxes is calculated to be the levy required to balance a local unit s budget multiplied by the prior year s percentage of uncollected taxes (or a lesser percentage)

37 Miscellaneous Revenues. The Local Budget Law (N.J.S.A. 40A:4-26) provides that no miscellaneous revenue from any source shall be included as an anticipated revenue in the budget in an amount in excess of the amount actually realized in cash from the same source during the next preceding fiscal year, unless the Director shall determine upon application by the governing body that the facts clearly warrant the expectation that such excess amount will actually be realized in cash during the fiscal year and shall certify such determination in writing to the local unit. No budget or amendment thereof shall be adopted unless the Director shall have previously certified his approval thereof with the exception of the inclusion of categorical grantsin-aid contracts for their face amount with an offsetting appropriation. CAP Limitations. A Statute passed in 1976, as amended (N.J.S.A. 40A: et seq.) commonly known as the Cap Law, imposed limitations on increases in municipal appropriations subject to various exceptions. On August 20, 1990, the Governor signed into law P.L. 1990, c.89, which revised and made permanent the Cap Law. While the revised Cap Law is more restrictive on the ability of a municipality to increase its overall appropriations, the payment of debt service is an exception from this limitation. The Cap formula is somewhat complex, but basically, it permits a municipality to increase its overall appropriations by 2.5% or the Index Rate, whichever is less. The Index Rate is the rate of annual percentage increase in the Implicit Price Deflator for State and Local Government purchases of goods and services computed by the U.S. Department of Commerce. Exceptions to the limitations imposed by the Cap Law also exist for other things including capital expenditures; extraordinary expenses approved by the Local Finance Board for implementation of an interlocal services agreement; expenditures mandated as a result of certain emergencies; and certain expenditures for services mandated by law. Additionally, legislation constituting P.L. 2007, c.62, effective April 3, 2007, imposes a 4% cap on the tax levy of a municipality, county, fire district or solid waste collection district, with certain exceptions and subject to a number of adjustments. The exclusions from the limit include increases required to be raised for debt service and certain lease payments to county improvement authorities, increases to replace certain lost state aid, increases in certain pension contributions, increases in the reserve for uncollected taxes required for municipalities, and certain increases in health care costs over 4%. The Local Finance Board may approve waivers for certain extraordinary costs identified by the statute, and voters may approve increases above 4% not otherwise permitted by a vote of 60% of the voters voting on a public question. This legislation has now been amended by P.L. 2010, c. 44, approved July 13, 2010 and applicable to the next local budget year following enactment to limit tax levy increases for those local units to 2% with exceptions only for capital expenditures including debt service, increases in pension contributions and accrued liability for pension contributions in excess of 2%, certain healthcare increases, extraordinary costs directly related to a declared emergency and amounts approved by a simple majority of voters voting at a special election. Chapter 44 eliminates the process for obtaining waivers for additional spending under the tax levy limitation

38 Neither the tax levy limitation nor the Cap Law limits the obligation of a municipality to levy ad valorem taxes upon all taxable real property within that municipality to pay debt service on its bonds or notes. For municipalities, the levy cap is in addition to the existing appropriation cap; both cap laws must be met. Deferral of Current Expenses. A local unit may make emergency appropriations after the adoption of a budget and the determination of the tax rate, but only to meet unforeseen pressing needs to protect or promote public health, safety, morals or welfare, or to provide temporary housing or public assistance. With limited exceptions set forth below, such appropriations must be included in full in the following year s budget. If such emergency appropriations exceed 3% of the adopted operating budget, consent of the Director is required (N.J.S.A. 40A:4-46, -47, -49). The exceptions are certain enumerated quasi-capital projects such as ice, snow, and flood damage to streets, roads and bridges, which may be amortized over three years, and tax map preparation, revision of ordinances, and master plan preparations, which may be amortized over five years (N.J.S.A. 40A:4-55, -55.3). Under the CAP Law, emergency resolutions aggregating less than 3% of the previous year s final current operating appropriations may be raised in that portion of the budget outside its limitations if approved by at least two-thirds of the members of the governing body and the Director. Emergency resolutions that aggregate more than 3% of the previous year s final current operating appropriations must be raised within its limitations. Emergency resolutions for debt service, capital improvements, the County s share of Federal or State grants and other statutorily permitted items are outside its limitation. Budget Transfers. Budget transfers provide a degree of flexibility and afford a control mechanism. Transfers between major appropriation accounts are prohibited until the last two months of the year. Subaccounts (line items) within an appropriation are not subject to the same year-end transfer restriction; however, they are subject to internal review and approval. Capital Budget. In accordance with the Local Budget Law, each local unit must adopt and annually revise a capital program budget. The capital budget, when adopted, does not constitute the approval or appropriation of funds, but sets forth a plan of the possible capital expenditures which the Local Unit may contemplate over a period of up to six years. Expenditures for capital purposes may be made either by ordinances adopted by the governing body of a local unit setting forth the items and the method of financing or from the annual operating budget if the items were detailed. Operation of Utilities. Municipal public utilities are supported, in addition to the general taxing power upon real property, by the revenues generated by the respective operations of the utilities

39 For each utility, there is established a separate budget. The anticipated revenues and appropriations for each utility are set forth in the separate budget. The budget is required to be balanced and to fully provide for debt service. The regulations regarding anticipation of revenue and deferral of charges apply equally to the budgets of the utilities. Deficits or anticipated deficits in utility operations which cannot be provided for from utility surplus, if any, are required to be raised in the current or operating budget. Local Fiscal Affairs Law (N.J.S.A. 40A:5-1, et seq.). This law regulates the non-budgetary financial activities of local governments. The chief financial officer of a local unit must file annually with the Director a verified statement of the financial condition of the local unit. The statements of the County are on file with the Clerk. An independent examination of a local unit s financial statements must be performed annually by a licensed registered municipal accountant. The audit, conforming to the Division s Requirements of Audit, includes recommendations for improvement of a local unit s financial procedures and must be filed with the Clerk within six months after the close of its fiscal year and, within five days thereafter, a certified duplicate copy must be filed in the office of the Director (N.J.S.A. 40A:5-6). The filing date of an audit may be extended by the Director upon a showing of good cause. A synopsis of the audit report, together with all recommendations made, must be published in a local newspaper within 30 days of its completion (N.J.S.A. 40A:5-7)

40 SOURCES AND USES OF SERIES 2011A BONDS AND SERIES 2011B NOTE PROCEEDS The sources and uses of funds will be as follows: Sources of Funds Principal Amount of Series 2011A Bonds $26,715, Principal Amount of Series 2011B Note 985, Company In-Kind Equity Contribution (1) 7,818, Cash (2) 1,500, TOTAL SOURCES OF FUNDS $37,018, Uses of Funds Project Fund (3) $33,318, Debt Service Fund (4) 983, Administrative Fund (5) 1,216, County Security Fund 1,500, TOTAL USES OF FUNDS $37,018, (1) The Company has agreed to make a deferred equity contribution upon the issuance of the Series 2011 Bonds. Such contribution is further described in the Company Lease Agreement. In particular, requisitions for Renewable Energy Project costs will be paid 70% from Series 2011A Bond proceeds, and 30% by or on behalf of the Company. (2) The Cash equity contribution shall be funded no later than the earlier of (i) ninety (90) days after completion of the Series 2011 Local Unit projects or (ii) March 15, (3) Such costs include monies for the Cost of the Projects, along with payment of certain Renewable Energy Program Costs to the Company. $25,500,000 shall be derived from the Series 2011A Bond proceeds and the balance shall be derived from the Company in-kind equity contribution. (4) The proceeds of the Series 2011B Note shall be deposited into the Capitalized Interest Account of the Debt Service Fund and applied, together with any interest earned thereon, if any, to the payment of the interest payable on the Series 2011A Bonds on June 15, 2012 and December 15, (5) Such costs include the Underwriter s discount and legal, rating, printing, financial advisory and fiduciary expenses incurred in connection with the issuance of the Series 2011 Bonds, as well as monies to reimburse the County and the Authority for a portion of, and to pay to third parties a portion of, the Renewable Energy Program development costs, plus the Authority s initial Administrative Fee

41 DEBT SERVICE SCHEDULE The following tables set forth the debt service requirements, including Sinking Fund Installments, in each Bond Year of the Series 2011 Bonds, consisting of the Series 2011A Bonds and the Series 2011B Note: Bond Year Series 2011A Bonds ended June 15 Principal Interest * Total Debt Service ** $ 493, $ 493, $ 865, , ,845, ,850, , ,820, ,850, , ,791, ,850, , ,752, ,850, , ,706, ,845, , ,647, ,845, , ,588, ,845, , ,525, ,845, , ,459, ,845, , ,391, ,845, , ,300, ,845, , ,209, ,845, , ,118, ,845, , ,027, ,845,000 91, ,936, Total $26,715,000 $9,900, $36,615, Bond Year Series 2011B Note ended June 15 Principal Interest * Total Debt Service ** 2013 $985,000 $16, $1,001, Total $985,000 $16, $1,001, * The proceeds of the Series 2011B Note shall be earmarked, together with any interest earned thereon, if any, to the payment of the interest payable on the Series 2011A Bonds on June 15, 2012 and December 15, ** Totals may not add due to rounding. PLEDGE OF THE STATE NOT TO LIMIT POWER OF AUTHORITY OR RIGHTS OF BONDHOLDERS The Act sets forth the pledge and agreement of the State that it will not limit or alter the rights vested by the Act in the Authority to fulfill the terms of any agreements made with holders of obligations of the Authority or in any way impair the rights and remedies of such holders, until such obligations, together with the interest thereon, with interest on any unpaid installments of interest, and all costs and expenses in connection with any action or proceedings by or on behalf of such holders, are fully met and discharged

42 LEGALITY FOR INVESTMENT The Act provides that (i) the State and all public officers, municipalities, counties, political subdivisions and public bodies, and agencies thereof; (ii) all banks, trust companies, savings banks and institutions, building and loan associations, savings and loan associations, investment companies, and other persons carrying on a banking business, all insurance companies, insurance associations and other persons carrying on an insurance business, which banks, trust companies, and other such institutions are organized and existing under the laws of the State; and (iii) all executors, administrators, guardians, trustees and other fiduciaries acting under the laws of the State, may legally invest any sinking funds, monies or other funds belonging to them or within their control in obligations of authorities created pursuant to the Act and such obligations will be authorized security for any and all public deposits. Municipal Bankruptcy BANKRUPTCY The undertakings of the Authority and the County should be considered with reference to Chapter 9 of the United States Bankruptcy Code of 1978, as amended (the Bankruptcy Code ), 11 U.S.C. Section 901 to 946. Under Chapter 9 of the Bankruptcy Code, a municipality, a political subdivision or a public agency or instrumentality of the State that is insolvent or unable to pay its debts as they become due may file a petition in a United States Bankruptcy Court (the Bankruptcy Court ) to adjust its debts. Chapter 9 of the Bankruptcy Code does not permit such entity to liquidate its assets and distribute the proceeds of its assets to its creditors. Chapter 9 of the Bankruptcy Code permits a financially distressed public entity to seek protection from its creditors by staying the commencement or continuation of certain actions against such public entity while it formulates and negotiates a plan of adjustment of its debts which can be binding on a dissenting minority of creditors if it is acceptable to the majority of creditors. Should the Authority or the County file a petition in the Bankruptcy Court under Chapter 9 of the Bankruptcy Code prior to the payment in full of the principal of and interest on the Series 2011 Bonds, the holders of the Series 2011 Bonds would be considered creditors and would be bound by the Authority s or County s plan of adjustment of its debt. Reference should also be made to N.J.S.A. 52:27-40 et seq. which provides that any political subdivision of the State as defined therein has the power to file a petition with the Bankruptcy Court under the Bankruptcy Code provided the political subdivision has obtained approval of the Local Finance Board. Section 903 of the Bankruptcy Code, 11 U.S.C. Section 903, specifically provides that Chapter 9 of the Bankruptcy Code does not limit or impair the power of a state to control, by legislation or otherwise, a municipality of or in such state in the exercise of the political or governmental powers of such municipality; provided, however, that a state law prescribing a method of composition of indebtedness of the municipality may not bind any creditor that does not consent to such composition and that a judgment entered under such state law may not bind a creditor that does not consent to such composition. THE ABOVE REFERENCES TO THE BANKRUPTCY CODE ARE NOT TO BE CONSTRUED AS AN INDICATION THAT THE AUTHORITY OR THE COUNTY EXPECTS TO RESORT TO THE PROVISIONS OF SUCH BANKRUPTCY CODE OR

43 THAT, IF IT DID, SUCH ACTION WOULD BE APPROVED BY THE LOCAL FINANCE BOARD, OR THAT ANY PROPOSED PLAN WOULD INCLUDE A DILUTION OF THE SOURCES OF PAYMENT OF AND SECURITY FOR THE SERIES 2011 BONDS. Company Bankruptcy The Interest Portion and the Principal Portion of the Basic Lease Payments payable by the Company under the Company Lease Agreement and constituting Revenues that are part of the Trust Estate pledged by the Authority to the Trustee as security for the Series 2011 Bonds under the Bond Resolution, are scheduled for payment five (5) months prior to the interest coming due, and the principal (or Sinking Fund Installment, if any) maturing on the Series 2011 Bonds in accordance with Exhibit A-3 to the Company Lease Agreement. Should the Company file (or be the subject of an involuntary filing of) a petition for bankruptcy under the Bankruptcy Code, this prior payment structure minimizes the risk that the Basic Lease Payments, previously applied by the Trustee to pay debt service on the Series 2011 Bonds to the Bondholders, will be recaptured from such Bondholders by the Company, as a debtor in possession, or a bankruptcy trustee, in either case as an avoidable property transfer under Section 547(b) of the Bankruptcy Code. The filing of any such bankruptcy petition by or against the Company results in the imposition of an automatic stay in accordance with Section 362(a) of the Bankruptcy Code, thereby precluding, for a time, the Authority or the Trustee from enforcing any remedies against the Company should it fail to make full and timely Basic Lease Payments under the Company Lease Agreement. Filing a petition may allow the Company under Section 365 of the Bankruptcy Code to reject the Company Lease Agreement. A Chapter 11 petition could also be converted to a Chapter 7 liquidation, or the Company could file for the same relief directly, in which case the Company s assets would be liquidated by a bankruptcy trustee, the bankruptcy trustee may have the right to reject the Company Lease Agreement causing the Company to cease making Basic Lease Payments under the Company Lease Agreement, and the creditors recovery against the Company would be limited to their pro rata share of monies realized from liquidation. Any of these options available to, or to be imposed upon, the Company, could adversely affect the Company s ability to make Basic Lease Payments on time and in full in accordance with the terms of the Company Lease Agreement. In such instance, the Trustee is obligated to pursue the other Revenues constituting a portion of the Trust Estate for payment of the principal of (including Sinking Fund Installments) and interest on the Series 2011 Bonds, including the County Guaranty. Pursuant to the Act, payments for redemption premium, if any, cannot be made from payments under the County Guaranty. See SECURITY FOR THE SERIES 2011 BONDS County Guaranty herein. NEGOTIABILITY OF THE SERIES 2011 BONDS Section 24 of the Act (N.J.S.A. 40:37A-67) provides that any bond or obligation issued pursuant to the Act shall be fully negotiable within the meaning and for all purposes of the negotiable instruments law of the State of New Jersey and each holder or owner of such bond or other obligation, or of any coupon appurtenant thereto, by accepting such bond or coupon shall

44 be conclusively deemed to have agreed that such bond, obligation or coupon is and shall be fully negotiable within the meaning and for all purposes of said negotiable instruments law. SERIES 2011 BONDS NOT A DEBT OF THE STATE OF NEW JERSEY The Series 2011 Bonds shall not in any way be a debt, liability or obligation of the State or any political subdivision thereof, except the Authority, but solely to the extent of the Trust Estate and its application in accordance with the terms of the Bond Resolution, and except the County, to the extent of the County Guaranty. The Authority LITIGATION There is no litigation pending or threatened involving the Authority that would materially impair the financial status of the Authority, or affect the issuance, sale or delivery of the Series 2011 Bonds or the valid execution, delivery or performance by the Authority of or under the Renewable Energy Program Documents to which the Authority is a party. The Company There is no litigation pending or threatened involving the Company that would materially impair the financial status of the Company, or affect the valid execution, delivery or performance by the Company of or under the Renewable Energy Program Documents to which the Company is a party. The Series 2011 Local Units The Authority is not aware of any litigation pending or threatened involving the Series 2011 Local Units that would materially impair the valid execution, delivery or performance by the Series 2011 Local Units of or under the Renewable Energy Program Documents to which each such respective Series 2011 Local Unit is a party, including their Local Unit License Agreement. The County There is no controversy or litigation of any nature now pending or threatened against the County, restraining or enjoining the adoption, execution or delivery of the County Guaranty or in any way contesting or affecting the validity of the County Guaranty, or any proceedings of the County taken with respect to the adoption, execution or delivery thereof or existence or powers of the County related to the adoption, execution and delivery of the County Guaranty, or wherein an adverse decision would have a material adverse impact on the financial position of the County or its ability to pay or to provide for payment under the County Guaranty

45 TAX MATTERS Notice Pursuant to IRS Circular 230 The discussion below is not intended or written by the Authority or Bond Counsel to be used, and cannot be used by any person, for the purpose of avoiding tax penalties that might be imposed under federal tax laws. This discussion is provided to support an offering of the Series 2011 Bonds and accordingly, is written in support of the promotion or marketing of the Series 2011 Bonds. Each taxpayer should seek advice based on the taxpayer s particular circumstances from an independent tax advisor concerning the potential tax consequences of an investment in the Series 2011 Bonds. General Interest on the Series 2011 Bonds is included in gross income for federal income tax purposes under current law. The Internal Revenue Code of 1986, as amended (the Code ) contains a number of provisions relating to the taxation of securities such as the Series 2011 Bonds (including but not limited to the tax treatment of and accounting for interest, premium, original issue discount and market discount thereon, gain from the sale, exchange or other disposition thereof and withholding and backup withholding tax on income therefrom) that may affect the taxation of certain owners, depending on their particular tax situations. Owners of the Series 2011 Bonds should consult their own tax advisors as to the particular federal income tax consequences of their ownership of the Series 2011 Bonds. In the opinion of Inglesino, Pearlman, Wyciskala & Taylor, LLC, Bond Counsel to the Authority, under current law, interest on the Series 2011 Bonds and any gain on the sale thereof are not includable as gross income under the New Jersey Gross Income Tax Act. The discussion of tax matters in this Official Statement applies only in the case of purchasers of the Series 2011 Bonds at original issuance and at the respective prices indicated on the inside cover page hereof. It does not address any other tax consequences such as, among others, the consequences of the existence of any market discount to subsequent purchasers of the Series 2011 Bonds. Certain United States Federal Income Tax Consequences The following is a summary of the principal United States federal income tax consequences of ownership of the Series 2011 Bonds. It deals only with Series 2011 Bonds held as capital assets by initial purchasers, and not with special classes of holders, such as dealers in securities or currencies, banks, tax-exempt organizations, life insurance companies, persons that hold Series 2011 Bonds that are a hedge or that are hedged against currency risks or that are part of a straddle or conversion transaction, or persons whose functional currency is not the U.S. dollar. The summary is based on the Code, its legislative history, existing and proposed regulations thereunder, published rulings and court decisions, all as currently in effect and all subject to change at any time, perhaps with retroactive effect

46 The following summary does not address the tax treatment of Series 2011 Bonds acquired by partnerships (or other entities that are treated as partnerships for United States federal income tax purposes). Federal income tax and withholding tax treatment of income and gain recognized by a partnership generally depends, in substantial part, on the characteristics and tax circumstances of the partners in the partnership. Prospective purchasers of the Series 2011 Bonds that are partnerships should consult their own tax advisors regarding these matters. United States Holders Payments of Interest. Interest on the Series 2011 Bonds will be taxable to a United States Holder (as defined below) as ordinary income at the time it is received or accrued, depending on the holder s method of accounting for tax purposes in accordance with generally applicable principles. A United States Holder for purposes of this discussion is a beneficial owner of a Series 2011 Bond for U.S. federal income tax law purposes and (i) a citizen or resident of the United States, (ii) a corporation which is created or organized in or under the laws of the United States or of any political subdivision thereof, (iii) an estate the income of which is subject to United States federal income taxation regardless of its source, or (iv) a trust if (A) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust or (B) the trust was in existence on August 10, 1996 and properly elected to continue to be treated as a U.S. person. The term Non-U.S. Holder refers to any beneficial owner of a Series 2011 Bond who or which is not a United States Holder or a partnership or other entity that is treated as a partnership for United States federal income tax purposes. Sale and Retirement of the Series 2011 Bonds United States Holders of the Series 2011 Bonds will recognize gain or loss on the sale, redemption, retirement or other disposition of such Series 2011 Bonds. The gain or loss is measured by the difference between the amount realized on the disposition of a Series 2011 Bond and the United States Holder s adjusted tax basis in the Series 2011 Bond. Such gain or loss will be capital gain or loss and will be long-term capital gain or loss if at the time of disposition such Series 2011 Bond has been held for more than one year. Defeasance of the Series 2011 Bonds If the Authority defeases any of the Series 2011 Bonds, such Series 2011 Bonds may be deemed to be retired and reissued for federal income tax purposes as a result of the defeasance. In such event, a Holder of a Series 2011 Bond would recognize gain or loss on the Series 2011 Bond at the time of defeasance. Backup Withholding and Information Reporting Information reporting will apply to payments of interest made by the Authority to United States Holders, and to the proceeds of the sale or other disposition of the Series 2011 Bonds with respect to certain non-corporate United States Holders, and backup withholding may apply

47 unless the recipient of such payment supplies a taxpayer identification number, certified under penalties of perjury, as well as certain other information or otherwise establishes an exemption from backup withholding. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against that owner s U.S. federal income tax liability provided the required information is furnished to the Internal Revenue Service. Prospective purchasers of the Series 2011 Bonds should consult their own tax advisors concerning the consequences described above, as well as other consequences, in their particular circumstances, of ownership of the Series 2011 Bonds, under the Code and the laws of any other taxing jurisdiction. ALL POTENTIAL PURCHASERS OF THE SERIES 2011 BONDS SHOULD CONSULT WITH THEIR TAX ADVISORS IN ORDER TO UNDERSTAND THE IMPLICATIONS OF THE CODE. APPROVAL OF LEGALITY All legal matters incident to the authorization, issuance, sale and delivery of the Series 2011 Bonds are subject to the approval of Inglesino, Pearlman, Wyciskala & Taylor, LLC, Parsippany, New Jersey, Bond Counsel to the Authority, whose approving legal opinion will be delivered with the Series 2011 Bonds, substantially in the form annexed hereto as Appendix E. CREDIT RATING Moody s Investors Service, Inc. ( Moody s ) has assigned the Series 2011A Bonds the rating of Aa2 (negative outlook). Such rating reflects only the view of such organization, and an explanation of the significance of such rating may be obtained only from Moody s. There is no assurance that such rating will be retained for any given period of time or that such rating will not be revised downward entirely by the Moody s if in their judgment circumstances so warrant. Any such downward revision or withdrawal of such rating may have an adverse effect on the market price of the Series 2011 Bonds. Moody s is in the process of completing its negative outlook review, and none of the County, the Authority, the Underwriters nor the Company can predict the outcome of that review, and any subsequent effect on the market pricing of the Series 2011 Bonds. FINANCIAL ADVISOR NW Financial Group, LLC, Jersey City, New Jersey, has served as financial advisor to the Authority with respect to this transaction (the Financial Advisor ). The Financial Advisor is not obligated to undertake, and has not undertaken, either to make an independent verification of or to assume responsibility for the accuracy, completeness, or fairness of the information contained in this Official Statement or in the appendices hereto. The Financial Advisor is an independent firm and is not engaged in the business of underwriting, trading, or distributing municipal securities or other public securities

48 UNDERWRITING The Series 2011 Bonds are being purchased from the Authority by RBC Capital Markets, LLC, as senior managing underwriter on behalf of itself and its co-managing underwriters (the Underwriter ) as set forth in that certain Bond Purchase Agreement dated December 7, 2011 (the Bond Purchase Agreement ) between the Underwriter and the Authority, and acknowledged and accepted by the Company. The Bond Purchase Agreement provides that the purchase price of the Series 2011A Bonds is $26,593, (representing the principal amount of the Series 2011A Bonds, less an Underwriter's discount in the amount of $121,607.26). The Bond Purchase Agreement provides that the purchase price of the Series 2011B Note is $980, (representing the principal amount of the Series 2011B Note, less an Underwriter's discount in the amount of $4,483.74). The obligation of the Underwriter to make such purchase is subject to certain additional terms and conditions set forth in the Bond Purchase Agreement, to the approval of certain legal matters by counsel, and to certain other conditions. The Underwriter intends to offer the Series 2011 Bonds at the rates and prices shown on the inside front cover hereof, which rates and prices may be changed from time to time by the Underwriter. The Underwriter may offer and sell the Series 2011 Bonds to certain dealers (including dealers depositing bonds into investment trusts) and certain dealer banks acting as agents at prices lower or yields higher than the public offering prices or yields stated on the inside front cover hereof. SECONDARY MARKET DISCLOSURE Pursuant to the requirements of Rule 15c2-12 (the Rule ) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, the County and the Company will each deliver concurrently with the delivery of the Series 2011 Bonds a Continuing Disclosure Agreement with the Authority and the Trustee in substantially the forms annexed hereto as Appendix F (each, a Continuing Disclosure Agreement and together, the Continuing Disclosure Agreements ). The County and the Company have each covenanted for the benefit of Bondholders, in accordance with the provisions of the respective Continuing Disclosure Agreement, to provide or cause to be provided, in accordance with the requirements of the Rule, certain financial information and operating data to the Municipal Securities Rulemaking Board (as defined in each Continuing Disclosure Agreement). The County, the Authority and the Company have each also covenanted in their respective Continuing Disclosure Agreements to provide notices of the occurrence of certain enumerated events. A failure by the County, the Authority or the Company to comply with the provisions of the respective Continuing Disclosure Agreements will not constitute a default under the Series 2011 Bonds, and holders and beneficial owners are limited to the remedies set forth in the Continuing Disclosure Agreements. However, failure by any of the County, the Authority or the Company to comply with its Continuing Disclosure Agreement must be reported in accordance with the Rule and must be considered by any broker or dealer before recommending the purchase or sale of Series 2011 Bonds in the secondary market. Consequently, such failure may adversely affect the transferability and liquidity of the Series 2011 Bonds and their market price

49 The County has never failed to fully satisfy the requirements of an undertaking previously executed by the County pursuant to the Rule in connection with a prior issue of bonds of the County. The Authority has never failed to fully satisfy the requirements of an undertaking previously executed by the Authority pursuant to the Rule in connection with a prior issue of bonds of the Authority. This is the first undertaking signed by the Company pursuant to the Rule. INDEPENDENT AUDITORS The financial statements of the County as of December 31, 2010, included in Appendix B to this Official Statement, have been audited by Nisivoccia & Company LLP, independent certified public accountants, as stated in their report appearing in Appendix B to this Official Statement. APPENDICES Appendix A to this Official Statement consists of certain general information concerning the County which has been provided by the County from public documents of the County and from other public or official documents or publications which are referred to therein. The Authority, the Company and the Underwriters have not confirmed the accuracy or completeness of said information, and the Authority, the Company and the Underwriters disclaim any responsibility for the accuracy and completeness thereof. Appendix B to this Official Statement consists of certain financial information concerning the County. The Authority, the Company and the Underwriters have not confirmed the accuracy or completeness of said information, and the Authority, the Company and the Underwriters disclaim any responsibility for the accuracy and completeness thereof. Appendix C to this Official Statement consists of certain general information concerning the Company that has been provided the Company. The Authority and the Underwriters have not confirmed the accuracy or completeness of said information, and the Authority and the Underwriters disclaim any responsibility for the accuracy and completeness thereof. Appendix D to this Official Statement consists of the forms of the following Renewable Energy Program Documents: the Bond Resolution, the Power Purchase Agreement, the Company Lease Agreement, a License and Access Agreement and the County Guaranty Agreement. Each has been provided by Bond Counsel to the Authority. The Underwriters have not confirmed the accuracy or completeness of said information, and the Underwriter disclaims any responsibility for the accuracy and completeness thereof. Appendix E of this Official Statement consists of the form of approving legal opinion of Inglesino, Pearlman, Wyciskala & Taylor, LLC, Bond Counsel to the Authority. Copies of such opinion will be available at the time of delivery of the Series 2011 Bonds. Appendix F of this Official Statement consists of the forms of Continuing Disclosure Agreements to be entered into by the County and the Company, respectively, with the Authority and the Trustee

50 Appendix G of this Official Statement consists of the Solar Proposal Evaluation Report dated October 24, 2011, which information has been prepared by the Sussex County Evaluation Team in connection with the evaluation of proposals received for the Renewable Energy Projects. Further information regarding the Authority s solar procurement process may be found at The Company and the Underwriters have not confirmed the accuracy or completeness of said information, and the Company and the Underwriters disclaim any responsibility for the accuracy and completeness thereof. MISCELLANEOUS The references herein to the Act, the Bond Resolution, and the other Renewable Energy Program Documents are brief outlines of certain provisions thereof. Such outlines do not purport to be complete and reference is made to the Act, the Bond Resolution, and the other Renewable Energy Program Documents for full and complete statements of such provisions. These documents may be inspected at the principal corporate trust office of the Trustee. Any statements which are contained in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended as such and not as representations of fact. All estimates and assumptions herein have been made on the best information available and are believed to be reliable but no representations whatsoever are made that such estimates or assumptions are correct or will be realized. This Official Statement is not to be construed as a contract or agreement between the Authority and the purchasers or holders of the Series 2011 Bonds. The execution and delivery of this Official Statement have been duly authorized by the Authority. THE MORRIS COUNTY IMPROVEMENT AUTHORITY By: /s/ John Bonanni John Bonanni, Chairman Dated: December 7,

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