SECURITY AGREEMENT
made by
NUI UTILITIES, INC.,
as Grantor
to
CREDIT SUISSE FIRST BOSTON,
Cayman Islands Branch,
as Collateral Agent
-------------------------
Dated as of August 20, 2004
-------------------------
TABLE OF CONTENTS
Page
SECTION 1. Certain Definitions; Rules of Construction........................1
SECTION 2. Pledge and Grant of Security Interest.............................3
SECTION 3. Security for Secured Obligations..................................3
SECTION 4. Grantor Remains Liable............................................3
SECTION 5. Representations and Warranties....................................3
SECTION 6. Further Assurances................................................5
SECTION 7. As to Receivables.................................................6
SECTION 8. Collateral Agent Appointed Attorney-in-Fact.......................7
SECTION 9. Collateral Agent May Perform......................................8
SECTION 10. The Collateral Agent's Duties.....................................8
SECTION 11. Remedies..........................................................8
SECTION 12. Costs; Indemnity..................................................9
SECTION 13. Waivers; Amendments..............................................10
SECTION 14. Notices; Etc.....................................................10
SECTION 15. Survival.........................................................10
SECTION 16. Severability.....................................................11
SECTION 17. Security Interest Absolute; Continuing Security Interest;
Release..........................................................11
SECTION 18. Reinstatement....................................................12
SECTION 19. GOVERNING LAW; TERMS.............................................12
SECTION 20. CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL....................12
SECTION 21. Headings.........................................................13
SECTION 22. Counterparts.....................................................13
SECTION 23. Effectiveness....................................................13
Schedules and Appendices
Schedule 5(b) Filing Office Locations
Schedule 5(c) Places of Business and Locations of Collateral
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This SECURITY AGREEMENT, dated as of August 20, 2004 (this
"Agreement"), is made by NUI UTILITIES, INC., a corporation organized under the
laws of the State of New Jersey (the "Grantor"), to CREDIT SUISSE FIRST BOSTON,
acting through its Cayman Islands Branch, as collateral agent (the "Collateral
Agent") for the Secured Parties (as defined below).
PRELIMINARY STATEMENTS
1. Reference is made to the Credit Agreement, dated as of August 20, 2004
(as amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among the Grantor, the financial institutions from time to
time parties thereto (each, a "Lender" and collectively, the "Lenders") and
Credit Suisse First Boston, acting through its Cayman Islands Branch, as
administrative agent (the "Administrative Agent") for the Lenders.
2. The Grantor's authentication and delivery of this Agreement is a
condition precedent to the making of the extensions of credit contemplated under
the Credit Agreement.
NOW, THEREFORE, in consideration of the foregoing and in order to induce
the Lenders to enter into the Credit Agreement, to make available the Loans and
other extensions of credit (if any), and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
SECTION 1. Certain Definitions; Rules of Construction. For all purposes of
this Agreement, (i) capitalized terms not otherwise defined herein shall have
the meanings set forth in the Credit Agreement and (ii) "include" and
"including" are not limiting, a reference to a law includes any amendment or
modification to such law and any rules or regulations issued thereunder or any
law enacted in substitution or replacement therefore and the other rules of
construction or interpretation set forth in the Credit Agreement shall apply to
the interpretation of this Agreement. Except for the terms defined in this
Agreement or in the Credit Agreement, all terms defined in Article 8 or 9 of the
UCC (as defined below) which are used in this Agreement shall have the meaning
specified in such Articles.
In addition, the following terms shall have the meaning herein specified:
"Administrative Agent" has the meaning given in the preliminary statements
to this Agreement.
"Agreement" has the meaning given in the first paragraph of this Agreement.
"Collateral" has the meaning given in Section 2 of this Agreement.
"Collateral Agent" has the meaning given in the first paragraph of this
Agreement.
"Contract" means any instrument, agreement, invoice or other writing
pursuant to which a Receivable arises or which evidences such Receivable.
"Credit Agreement" has the meaning given in the preliminary statements to
this Agreement.
"Effective Date" means the date, on or after the date that the NJBPU
Approval and the FPSC Approval have been obtained, that the Borrower receives
the proceeds of the Loans under the Credit Agreement.
"Lenders" has the meaning given in the preliminary statements to this
Agreement.
"Receivables" means accounts (as defined in Section 9-102(a)(2) of the
UCC).
"Records" means, with respect to any Receivable, all documents, books,
records and other information (including, without limitation, computer programs,
tapes, disks, punch cards, data processing software and related property and
rights but excluding Contracts) relating to such Receivable.
"Secured Obligations" means (a) each and every obligation, covenant and
agreement of the Borrower now or hereafter existing contained in the Credit
Agreement or any other Loan Document, whether for principal, reimbursement
obligations, interest, premium, fees, late charges, expenses or otherwise, and
any amendments or supplements thereto, extensions or renewals thereof or
replacements therefore (and each and every obligation, covenant and agreement of
the Grantor now or hereafter existing contained herein), (b) all Hedging
Obligations of the Borrower contained in any agreement between the Borrower and
the Administrative Agent (or an Affiliate of the Administrative Agent), (c) all
sums advanced in accordance with the Collateral Documents by the Collateral
Agent to protect any of the Collateral purported to be covered thereby, (d) any
amounts paid by any person as to which amounts such person has a right to
reimbursement against the Borrower under the Credit Agreement or hereunder and
(e) amounts paid by the Collateral Agent in preservation of Collateral Agent's
rights or interests in the Collateral in accordance herewith or with the
Collateral Documents, together with interest on the amounts referred to in
clauses (a) through (e) above, such interest to accrue from the 15th day
following written demand delivered to the Grantor for the payment of such
amounts (unless expressly stated otherwise under the Loan Documents or the
agreements referred in clause (b) above) until reimbursement in full at the
interest rate set forth in the Credit Agreement for overdue amounts, in each
case whether direct or indirect, joint or several, absolute or contingent,
liquidated or unliquidated, now or hereafter existing, renewed or restructured,
whether or not from time to time decreased or extinguished and later increased,
created or incurred, and including all indebtedness of the Borrower under any
instrument now or hereafter evidencing or securing any of the foregoing.
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"Secured Parties" means the Lenders, the Administrative Agent (and its
Affiliates in connection with Borrower's Hedging Obligations to such Affiliates,
as the case may be) and the Collateral Agent.
"UCC" means the Uniform Commercial Code of the State of New York.
SECTION 2. Pledge and Grant of Security Interest. As security for the
prompt and complete payment and performance of all Secured Obligations, the
Grantor hereby pledges and hypothecates to the Collateral Agent for the
equitable and ratable benefit of the Secured Parties, and hereby grants to the
Collateral Agent for the equitable and ratable benefit of the Secured Parties,
effective as of the Effective Date, a security interest in, and lien on, all of
the Grantor's right, title and interest, whether now owned, hereafter acquired
or hereafter arising, in and to the following (collectively, the "Collateral"):
(a) all Receivables, other than those due from affiliates of the
Grantor;
(b) all Contracts; and
(c) all cash proceeds of any and all of the foregoing.
SECTION 3. Security for Secured Obligations. This Agreement secures the
prompt and complete payment and performance of all Secured Obligations. Without
limiting the generality of the foregoing, to the extent permitted by applicable
law, this Agreement also secures the payment of all amounts which constitute
part of the Secured Obligations and which would be owed by the Grantor to the
Secured Parties but for the fact that a claim therefor may not be allowable in a
bankruptcy, insolvency, reorganization or similar proceeding involving the
Grantor.
SECTION 4. Grantor Remains Liable. Anything herein to the contrary
notwithstanding, (a) the Grantor shall remain liable under all instruments,
contracts, permits, agreements, licenses and other general intangibles included
in the Collateral to the extent set forth therein to perform all of its duties
and obligations thereunder to the same extent as if this Agreement had not been
executed (and the Grantor agrees to indemnify and hold harmless the Collateral
Agent and the other Secured Parties from and against any and all liabilities for
such performance), (b) the exercise by the Collateral Agent of any of the rights
hereunder shall not release the Grantor from any of its duties or obligations
under any instrument, contract, permit, agreement, license or other general
intangible included in the Collateral, and (c) neither the Collateral Agent nor
any Secured Party shall have any obligation or liability under any instrument,
contract, permit, agreement, license or other general intangible included in the
Collateral by reason of this Agreement, nor shall the Collateral Agent or any
Secured Party be obligated to perform any of the obligations or duties of the
Grantor thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder.
SECTION 5. Representations and Warranties. The Grantor represents and
warrants as follows:
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(a) The Grantor is a corporation duly formed solely under the laws of the
State of New Jersey and no other state or jurisdiction and is validly existing
and in good standing thereunder. The Grantor is in compliance with and not in
default under any and all applicable laws and material contractual obligations,
except as would not individually or in the aggregate, have a Material Adverse
Effect. The execution, delivery and performance by the Grantor of this Agreement
are within its power, have been duly authorized by all necessary action and do
not contravene in any material respect its charter, bylaws or other
organizational agreements, or, except as would not individually or in the
aggregate have a Material Adverse Effect, any applicable law or contractual
obligation binding on or affecting the Grantor or any of its properties or
assets. This Agreement has been duly executed and delivered by the Grantor and
constitutes a legal, valid and binding agreement of the Grantor enforceable in
accordance with its terms except to the extent that the enforceability thereof
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws generally affecting creditors' rights and by equitable
principles (regardless of whether enforcement is sought at equity or at law).
(b) This Agreement creates a valid security interest in the Collateral,
securing the payment of the Secured Obligations. The Grantor is a "registered
organization" as defined in Article 9 of the UCC and, for purposes of such
article, is "located" in the State of New Jersey. Upon the filing of the
financing statements in the public offices set forth on Schedule 5(b) attached
hereto, the security interests granted or purported to be granted hereby in the
Collateral shall be perfected to the extent any such security interest may be
perfected by the filing of a financing statement.
(c) On the date hereof: (i) the principal place of business and chief
executive office (or, if the Grantor has, and has had, only one place of
business, the place of business) of the Grantor for the five years preceding the
date of this Agreement, the office where the Grantor keeps all Records (and its
other records concerning Receivables and other Collateral), and the originals of
all chattel paper that evidences Receivables, and each other place of business
of the Grantor, are located at the addresses specified on Schedule 5(c) attached
hereto; (ii) no Receivable in excess of $25,000 is evidenced by a promissory
note, other instrument or chattel paper; (iii) except as set forth on Schedule
5(c), the Grantor does not conduct, and at no time during the past five years
has conducted, any business under any name or trade name other than its proper
corporate name, which is the name set forth in the first paragraph of this
Agreement; (iv) the taxpayer identification number, and jurisdiction of
organization identification number (if any), are set forth in Schedule 5(c); and
(v) except as set forth in Schedule 5(c), the Grantor has not changed (including
by way of merger and consolidation as well as any changes in the form, nature or
jurisdiction of organization) its name, identity or corporate structure in any
way within the past five years.
(d) The Grantor is the legal and beneficial owner of the Collateral in
existence on the Effective Date and will be the legal and beneficial owner of
the Collateral thereafter acquired, free and clear of any Encumbrance, except
for Encumbrances of the type set forth in clauses (i), (ii), (iv) or (xi) of the
definition of "Permitted Encumbrances" (as such term is defined in the Credit
Agreement). Other than
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the Permitted Encumbrances referred to in the preceding sentence, the Grantor
has not pledged, assigned, sold, granted a security interest in, or otherwise
conveyed any of the Collateral. On the Effective Date, the Grantor is not aware
of any judgment or tax lien filings against it (nor of any other Encumbrance
against the Collateral of the type set forth in clause (ii) or (iv) of the
definition of "Permitted Encumbrances"). The Grantor has not authorized the
filing of, and is not aware of any filing of, any financing statement or other
document or record similar in effect covering all or any part of the Collateral
in any recording office, except such as may have been filed in favor of the
Collateral Agent relating to this Agreement or the other Collateral Documents.
(e) Except for the filings and actions described in Section 5(b) hereof, no
consent of any other Person and no authorization, approval or other action by,
and no notice to or filing with, any Governmental Authority is required (i) for
the grant by the Grantor of the lien and security interest granted hereby or for
the execution, delivery or performance of this Agreement by the Grantor, (ii)
for the validity, perfection or maintenance of the lien and security interest
created hereby, in each case, except for security interests that cannot be
perfected by filing under the UCC or (iii) for the exercise by the Collateral
Agent of the rights provided for in this Agreement or the remedies in respect of
the Collateral pursuant to this Agreement, except also for those which have been
duly obtained or made and, in the case of the maintenance of perfection, for the
filing of continuation statements under the UCC.
SECTION 6. Further Assurances.(a) The Grantor agrees that from time to
time, at the expense of the Grantor, the Grantor will promptly execute and
deliver all further instruments and documents, and take all further action that
may be necessary, or that the Collateral Agent may reasonably request, in order
to perfect and protect any pledge, assignment or security interest granted or
purported to be granted hereby or to enable the Collateral Agent to exercise and
enforce its rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, the Grantor will: (i) if any
Collateral shall be evidenced by a promissory note or other instrument or
chattel paper and such Collateral has a value in excess of $25,000, promptly
give the Collateral Agent notice thereof, and if thereafter requested to do so
by the Collateral Agent, deliver to the Collateral Agent hereunder such note or
instrument or chattel paper, in pledge, duly indorsed and accompanied by duly
executed instruments of transfer or assignment, all in form and substance
reasonably satisfactory to the Collateral Agent, provided, however, that, if no
Event of Default or Potential Default has occurred and is continuing, the
Collateral Agent will return any such promissory note or other instrument or
chattel paper to the Grantor in connection with the repayment, enforcement or
settlement of such promissory note or other instrument or chattel paper promptly
after request from the Grantor; and (ii) execute, or otherwise authenticate (as
necessary) and file, with a copy thereof to the Collateral Agent, such financing
or continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary, or as the Collateral Agent may reasonably request,
in order to perfect and preserve the pledge, security interest and lien granted
or purported to be granted hereby.
(b) The Grantor hereby authorizes the Collateral Agent to execute and file
one or more financing statements, continuation statements, amendments,
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memorandums or other records with the applicable Governmental Authority for the
purpose of perfecting, confirming, continuing, enforcing or protecting the
security interest and lien granted by this Agreement with respect to the
Collateral, without the signature of the Grantor, and naming the Grantor as
debtor and the Collateral Agent as Secured Party (in each case, to the extent
permitted by applicable law). A photocopy or other reproduction of this
Agreement or any security agreement or financing statement covering the
Collateral or any part thereof shall be sufficient as a financing statement
where permitted by applicable law.
(c) The Grantor will at its expense furnish to the Collateral Agent from
time to time, statements and schedules further identifying and describing (in
reasonable detail) the Collateral and such other reports and information in
connection with the Collateral as the Collateral Agent may reasonably request.
SECTION 7. As to Receivables.(a) The Grantor shall not change its name
or jurisdiction of organization without giving at least thirty (30) days prior
written notice thereof to the Administrative Agent and the Collateral Agent;
provided, however, that in no event shall the Grantor change its jurisdiction of
organization to a jurisdiction outside the continental United States. The
Grantor shall keep its chief executive office and the office where it keeps all
Records (and its other records concerning the Receivables and other Collateral),
and the original copies of all chattel paper, at the location therefor specified
in Section 5(c) hereof or, upon 10 days prior written notice to the Collateral
Agent, at any other location in a jurisdiction (within the continental United
States) where all actions required by Section 6 hereof to protect, preserve and
maintain the lien and security interest created hereby and the priority thereof
shall have been taken with respect to the Receivables. The Grantor will hold and
preserve such records, and chattel paper and will permit representatives of the
Collateral Agent at any time during normal business hours to inspect, copy
and/or make abstracts from such records, and chattel paper.
(b) Except as otherwise provided in this subsection (b), the Grantor shall
continue to collect, at its own expense, all amounts due or to become due to the
Grantor in respect of the Collateral, and shall do so, in all material respects,
in accordance with applicable laws, rules and regulations, with reasonable care
and diligence, and in accordance with the Grantor's credit and collection
policies and practices relating to Contracts and Receivables. The Grantor shall
give the Collateral Agent prompt notice of any material change to such credit
and collections policies and practices after the Effective Date. In connection
with such collections, the Grantor may take (and following the occurrence of and
during the continuance of an Event of Default at the Collateral Agent's
direction shall take) such action as the Grantor may deem necessary or advisable
(or following the occurrence of and during the continuance of an Event of
Default, such action as the Collateral Agent may deem necessary) to enforce
collection of the Receivables and amounts due under any Receivable. The Grantor
agrees and confirms that, if directed to do so by the Collateral Agent during
the continuation of an Event of Default, it will notify each party to a Contract
and each account debtor or obligor under the Receivables of the assignment
thereof to the Collateral Agent, and will instruct each of them that all
payments due or to become due and all amounts payable to the Grantor
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thereunder shall, until such time as no Event of Default exists, be made to an
account specified by the Collateral Agent.
SECTION 8. Collateral Agent Appointed Attorney-in-Fact. The Grantor
irrevocably makes, constitutes and appoints the Collateral Agent (and all
officers, employees or agents designated by the Collateral Agent) as the
Grantor's true and lawful agent and attorney-in-fact, and in such capacity the
Collateral Agent shall have the right, with power of substitution for the
Grantor and in the Grantor's name or otherwise, for the use and benefit of the
Collateral Agent and the Secured Parties, upon the occurrence and during the
continuance of an Event of Default (a) to receive, endorse, assign and/or
deliver any and all notes, acceptances, checks, drafts, money orders or other
evidences of payment relating to the Collateral or any part thereof; (b) to
demand, collect, receive payment of, give receipt for and give discharges and
releases of all or any of the Collateral; (c) to sign the name of the Grantor on
any invoice or xxxx of lading relating to any of the Collateral; (d) to send
verifications of Receivables to any account debtor; (e) to commence and
prosecute any and all suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect or otherwise realize on all or any of
the Collateral or to enforce any rights in respect of any Collateral; (f) to
settle, compromise, compound, adjust or defend any actions, suits or proceedings
relating to all or any of the Collateral; (g) to notify, or to require the
Grantor to notify, account debtors to make payment directly to the Collateral
Agent; and (h) to use, sell, assign, transfer, pledge, make any agreement with
respect to or otherwise deal with all or any of the Collateral, and to do all
other acts and things necessary to carry out the purposes of this Agreement, as
fully and completely as though the Collateral Agent were the absolute owner of
the Collateral for all purposes; provided, however, that nothing herein
contained shall be construed as requiring or obligating the Collateral Agent or
any Secured Party to make any commitment or to make any inquiry as to the nature
or sufficiency of any payment received by the Collateral Agent or any Secured
Party, or to present or file any claim or notice, or to take any action with
respect to the Collateral or any part thereof or the moneys due or to become due
in respect thereof or any property covered thereby, and no action taken or
omitted to be taken under this Section by the Collateral Agent or any Secured
Party with respect to the Collateral or any part thereof shall give rise to any
defense, counterclaim or offset in favor of the Grantor or to any claim or
action against the Collateral Agent or any Secured Party except to the extent
any such action or omission constitutes gross negligence or willful misconduct
on the part of the Collateral Agent or such Secured Party, as applicable. It is
understood and agreed that the appointment of the Collateral Agent as the agent
and attorney-in-fact of the Grantor for the purposes set forth above is coupled
with an interest and is irrevocable. The provisions of this Section shall in no
event relieve the Grantor of any of its obligations hereunder or under any other
Loan Document with respect to the Collateral or any part thereof or impose any
obligation on the Collateral Agent or any Secured Party to proceed in any
particular manner with respect to the Collateral or any part thereof, or in any
way limit the exercise by the Collateral Agent or any Secured Party of any other
or further right which it may have on the date of this Agreement or hereafter,
whether hereunder, under any other Loan Document, by law or otherwise.
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SECTION 9. Collateral Agent May Perform. If an Event of Default has
occurred and is continuing and either the Grantor has failed to perform
hereunder or under any instrument, contract, permit, license, agreement or other
general intangible included in the Collateral, the Collateral Agent may itself
perform, or cause performance of, such agreement, and the reasonable expenses of
the Collateral Agent incurred in connection therewith shall be payable by the
Grantor in accordance with Section 12 hereof. The Collateral Agent shall use its
good faith efforts to give reasonable prior or contemporaneous notice to the
Grantor in connection with the exercise by the Collateral Agent of its rights
under this Section; provided that the failure to give any such notice shall not
limit the Collateral Agent's right to exercise any such right or expose the
Collateral Agent to any liability hereunder.
SECTION 10. The Collateral Agent's Duties. The powers conferred on the
Collateral Agent hereunder are solely to protect its interest in the Collateral
and shall not impose any duty upon it to exercise any such powers. Except for
the safe custody of any Collateral in its physical possession and the accounting
for moneys actually received by it hereunder, the Collateral Agent shall have no
duty as to any Collateral or as to the taking of any necessary steps to preserve
rights against prior parties or any other rights pertaining to any Collateral
and no such duties shall be implied as arising hereunder. The Collateral Agent
shall be deemed to have exercised reasonable care in the custody and
preservation of any Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which it accords or would accord its own
property and no such duties shall be implied as arising hereunder.
Notwithstanding any provision of this Agreement to the contrary, the Collateral
Agent shall not be required to make any request, demand or determination, take
or omit to take any action or do any other discretionary function to be done by
it under this Agreement unless it has been directed to do so in writing by the
Administrative Agent (acting at the direction of the Required Lenders or all
Lenders, as applicable).
SECTION 11. Remedies. If any Event of Default shall have occurred and be
continuing:
(a) The Collateral Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party upon a
default under the Uniform Commercial Code as in effect in any relevant
jurisdiction the laws of which govern the perfection of the relevant
security interests hereunder to enforce this Agreement and the security
interests contained herein, and also may, (i) require the Grantor to, and
the Grantor hereby agrees that it will at its expense and upon request of
the Collateral Agent forthwith, assemble all or part of the Collateral as
directed by the Collateral Agent and make it available to the Collateral
Agent at a place to be designated by the Collateral Agent which is
reasonably convenient to both parties and (ii) without notice, except as
specified below, sell the Collateral or any part thereof in one or more
parcels at public or private sale, at any of the Collateral Agent's offices
or elsewhere, for cash, on credit or for future delivery, and upon such
other
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terms as the Collateral Agent may deem commercially reasonable. The Grantor
agrees that to the extent a notice of sale shall be required by law, at
least ten days notice to the Grantor of the time and place of any public
sale or the time after which any private sale is to be made shall
constitute reasonable notification. The Collateral Agent shall not be
obligated to make any sale of Collateral regardless of whether a notice of
sale shall have been given. The Collateral Agent may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned.
(b) Any cash held by the Collateral Agent as Collateral and all cash
proceeds received by the Collateral Agent in respect of any sale of,
collection from, or other realization upon all or any part of, the
Collateral may in the discretion of the Collateral Agent be held by the
Collateral Agent as security for, and may then or at any time thereafter be
applied in whole or in part by the Collateral Agent for the benefit of the
Secured Parties against, performance of all or any part of the Secured
Obligations in accordance with the terms of the Credit Agreement. Any
excess of such cash or cash proceeds and interest accrued thereon held by
the Collateral Agent and remaining after payment in full of the principal
of and interest on any Loans and Fees payable under the Credit Agreement
(and any other Obligation for which demand for payment has been made or
which is otherwise then due and payable) shall be paid over to the Grantor
or to whomsoever may be lawfully entitled to receive such excess.
SECTION 12. Costs; Indemnity. The Grantor hereby agrees to pay within 30
days following demand to the Collateral Agent the amount of any and all
reasonable expenses, including the reasonable fees, disbursements and other
reasonable charges of its counsel and, upon the occurrence and during the
continuation of an Event of Default, of any experts or agents, which the
Collateral Agent may incur in connection with (i) the administration of this
Agreement (including the customary fees and charges of the Collateral Agent for
any audits conducted by it or on its behalf with respect to the Receivables upon
the occurrence and during the continuation of an Event of Default), (ii) the
custody or preservation of, or the sale of, collection from or other realization
upon any of the Collateral, (iii) the exercise, enforcement or protection of any
of the rights of the Collateral Agent hereunder or (iv) the failure of the
Grantor to perform or observe any of the provisions hereof. Without limitation
of its indemnification obligations under the other Loan Documents, the Grantor
agrees to indemnify the Collateral Agent, its affiliates and their respective
officers, directors, employees, advisors, agents and the control persons (each,
an "Indemnitee") against, and hold each of them harmless from, any and all
losses, claims, damages, liabilities and related expenses, including reasonable
fees, disbursements and other charges of counsel, incurred by or asserted
against any of them arising out of, in any way connected with, or as a result
of, the execution, delivery or performance of this Agreement or any claim,
litigation, investigation or proceeding relating hereto or to the Collateral,
whether or not any Indemnitee is a party thereto; provided that such indemnity
shall not, as to any Indemnitee, be available to the extent
9
that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee or such Indemnitee's agents or affiliates. Any such amounts
payable as provided hereunder shall be additional Secured Obligations secured
hereby and by the other Collateral Documents. Notwithstanding any other
provision of this Agreement, neither the Collateral Agent nor any other
Indemnitee shall be liable for any damages arising from the use by others of
information or other materials obtained through electronic, telecommunications
or other information transmission systems or for any indirect, special, punitive
or consequential damages in connection with its activities hereunder or related
to the Collateral. The provisions of this Section shall remain operative and in
full force and effect regardless of the termination of this Agreement or any
other Loan Document, the consummation of the transactions contemplated hereby,
the repayment of any of the Loans, the invalidity or unenforceability of any
term or provision of this Agreement or any other Loan Document, or any
investigation made by or on behalf of the Collateral Agent or any Lender. All
amounts due under this Section shall be payable on written demand therefor.
SECTION 13. Waivers; Amendments. No failure or delay of the Collateral
Agent in exercising any power or right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Collateral Agent hereunder, and
of the Collateral Agent, the Agent and the Lenders under the other Loan
Documents, are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No notice to or demand on the Grantor in any case
shall entitle the Grantor to any other or further notice or demand in similar or
other circumstances. No waiver of any provisions of this Agreement or consent to
any departure by the Grantor therefrom shall in any event be effective unless
the same shall be permitted by the next succeeding sentence, and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given. Neither this Agreement nor any provision hereof may be
waived, amended or modified except (i) pursuant to an agreement or agreements in
writing entered into by the Collateral Agent and the Grantor and (ii) with any
consent required under Section 9.1 of the Credit Agreement.
SECTION 14. Notices; Etc. All notices and other communications provided for
hereunder shall be given and shall be effective as provided in Section 9.3 of
the Credit Agreement. All such notices and other communications to the
Collateral Agent shall be directed to the address of the Administrative Agent.
SECTION 15. Survival. All agreements, statements, representations and
warranties made by the Grantor herein or in any certificate or other instrument
delivered by the Grantor or on its behalf under this Agreement shall be
considered to have been relied upon by the Collateral Agent and the Secured
Parties and shall survive the making of the Loans and the execution and delivery
of this Agreement and the other Loan Documents regardless of any investigation
made by the Collateral Agent or any Secured Party or on their behalf.
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SECTION 16. Severability. Any provision hereof that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof and without affecting the validity or enforceability
of any provision in any other jurisdiction. The parties shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
SECTION 17. Security Interest Absolute; Continuing Security Interest;
Release.(a) All rights of the Collateral Agent hereunder, the security
interest and lien granted hereby, and all obligations of the Grantor hereunder
shall be absolute and unconditional irrespective of (i) any lack of validity or
enforceability of the Credit Agreement, any other Loan Document, any agreement
with respect to any of the Secured Obligations or any other agreement or
instrument relating to any of the foregoing, (ii) any change in the time, manner
or place of payment of, or in any other term of, all or any of the Secured
Obligations, other than as expressly provided in any amendment or waiver hereof
or any consent to any departure herefrom, (iii) any exchange, release or
non-perfection of any Encumbrance on other collateral, or any release or
amendment or waiver of or consent under or departure from any guarantee,
securing or guaranteeing all or any of the Secured Obligations, or (iv) any
other circumstance that might otherwise constitute a defense available to, or a
discharge of, the Grantor in respect of the Secured Obligations or this
Agreement (other than the indefeasible payment in full of all of the Secured
Obligations).
(b) This Agreement shall create a continuing security interest in the
Collateral and shall (i) remain in full force and effect until the principal of
and accrued interest on the Loans (and any other Secured Obligation for which
demand for payment has been made or which is otherwise then due and payable)
shall have been repaid in full, (ii) be binding upon the Grantor, its successors
and assigns; provided, that the Grantor may not transfer or assign any or all of
its rights or obligations hereunder except as provided in Section 9.5 of the
Credit Agreement and (iii) inure to the benefit of, and be enforceable by, the
Collateral Agent, the Secured Parties and their respective successors,
transferees and permitted assigns. Without limiting the generality of the
foregoing clause (iii), any Secured Party may assign or otherwise transfer all
or any portion of its rights in the Secured Obligations to the extent and in the
manner provided in the Credit Agreement and such assignee shall thereupon become
vested with all the benefits in respect thereof granted to such Secured Party
herein or otherwise. Upon the payment of in full the principal of and accrued
interest on the Loans (and any other Secured Obligation for which demand for
payment has been made or which is otherwise then due and payable), the security
interest granted hereby shall terminate and all rights to the Collateral shall
revert to the Grantor. Upon such termination, the Collateral Agent will, at the
Grantor's expense, execute (or otherwise authenticate) and deliver to the
Grantor such documents or records as the Grantor shall reasonably request to
evidence such termination and/or transfer to the Grantor any Collateral (or
rights or interests therein) in the Collateral Agent's possession or under its
control.
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(c) If the Grantor requests the release of the security interest and lien
hereof on any Collateral to be sold or otherwise disposed of in a transaction
permitted under the terms of the Credit Agreement and delivers to the Collateral
Agent a certificate to the effect that such sale or other disposition and the
application of the proceeds thereof will comply with the terms of the Credit
Agreement, then the Collateral Agent, if satisfied in good faith that such
certificate is delivered in accordance with the terms of this Section, shall
without the consent of any Lender, execute and deliver all such instruments,
releases, financing statements or other agreements, and take all such further
actions, as the Grantor may reasonably request (and at the Grantor's expense),
which are necessary to effectuate the release of such Collateral substantially
simultaneously with or at any time after the completion of such sale or other
disposition.
SECTION 18. Reinstatement. This Agreement shall continue to be effective or
be reinstated, as the case may be, if at any time any amount received by the
Collateral Agent in respect of the Secured Obligations is rescinded or must
otherwise be restored or returned by the Collateral Agent upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Grantor or upon
the appointment of any intervenor or conservator of, or trustee or similar
official for, the Grantor or any substantial part of its assets, or otherwise,
all as though such payments had not been made.
SECTION 19. GOVERNING LAW; TERMS. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK EXCEPT TO THE
EXTENT THAT THE CREATION, VALIDITY OR PERFECTION OF THE SECURITY INTEREST
HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
SECTION 20. CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL. EACH PARTY
HERETO (i) IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY NEW YORK
STATE COURT OR FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN, NEW YORK CITY
IN ANY ACTION ARISING OUT OF THIS AGREEMENT, (ii) AGREES THAT ALL CLAIMS IN SUCH
ACTION MAY BE DECIDED IN SUCH COURT, (iii) WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM AND (iv) CONSENTS TO THE
SERVICE OF PROCESS BY MAIL. A FINAL JUDGMENT IN ANY SUCH ACTION SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS. NOTHING HEREIN SHALL
AFFECT THE RIGHT OF ANY PARTY TO SERVE LEGAL PROCESS IN ANY MANNER PERMITTED BY
LAW OR AFFECT ITS RIGHT TO BRING ANY ACTION IN ANY OTHER COURT. EACH PARTY
HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY.
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SECTION 21. Headings. Article and Section headings used herein and
preliminary statements are for convenience of reference only, are not part of
this Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
SECTION 22. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
signature page by facsimile transmission shall be as effective as delivery of a
manually executed counterpart.
SECTION 23. Effectiveness. Notwithstanding anything in this Agreement to
the contrary, this Agreement shall not become effective until the occurrence of
the Effective Date.
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IN WITNESS WHEREOF, the Grantor has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
NUI UTILITIES, INC.
By:/s/ Xxxxxx X. Xxxxxxxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxxxxxxx
Title:President
Agreed and Accepted:
CREDIT SUISSE FIRST BOSTON,
acting through its Cayman Islands Branch
By:/s/ Xxxx X. Xxxxx
----------------------------------------
Name: Xxxx X. Xxxxx
Title:Managing Director
By:/s/ S. Xxxxxxx Xxx
----------------------------------------
Name: S. Xxxxxxx Xxx
Title:Director
