UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 24, 2022
NEW JERSEY RESOURCES CORPORATION
(Exact Name of registrant as specified in its charter)
New Jersey
001-08359
22-2376465
(State or Other Jurisdiction of Incorporation)
(Commission File Number)
(IRS Employer Identification No.)
1415 Wyckoff Road
Wall, New Jersey
 
 
07719
(Address of Principal Executive Offices)
 
(Zip Code)
(732) 938-1480
(Registrant’s telephone number, including area code)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Trading Symbol(s)
Name of each exchange on which
registered
Common Stock - $2.50 par value
NJR
New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01
Entry into a Material Definitive Agreement.
 
The information included in Item 2.03 of this Current Report on Form 8-K is incorporated by reference into this Item 1.01.

Item 2.03
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
 
On October 24, 2022, New Jersey Natural Gas Company (“NJNG”), a wholly-owned subsidiary of New Jersey Resources Corporation (“NJR”, and together with NJNG, the “Issuers”), and certain institutional investors in the private placement market (the “NJNG Purchasers”) entered into a Note Purchase Agreement (the “NJNG Note Purchase Agreement”), under which NJNG sold to the Purchasers $125,000,000 of NJNG’s 5.47% Senior Notes, Series 2022C, due October 24, 2052 (the “NJNG Series C Notes”).

On October 24, 2022, NJR and certain institutional investors in the private placement market (the “NJR Purchasers”, and together with the NJNG Purchasers, the “Purchasers”) entered into a Note Purchase Agreement (the “NJR Note Purchase Agreement” and, together with the NJNG Note Purchase Agreement, the “Note Purchase Agreements”) providing for the sale to the NJR Purchasers of $50,000,000 of NJR’s 6.14% Senior Notes, Series 2022B, due December 15, 2032 (the “NJR Series B Notes” and together with the NJNG Series C Notes, the “Notes”), with the closing of the transaction to occur on December 15, 2022. The issuance of the NJR Series B Notes is subject to the satisfaction of customary conditions, including continuing compliance with the representations, warranties and covenants of the NJR Note Purchase Agreement.
 
The NJNG Series C Notes are secured by an equal principal amount of NJNG’s First Mortgage Bonds issued under the Amended and Restated Indenture of Mortgage, Deed of Trust and Security dated September 1, 2014 between NJNG and U.S. Bank National Association, as Trustee, as predecessor in interest to U.S. Bank Trust Company, National Association, in its capacity as Trustee, as heretofore amended and supplemented and as further amended and supplemented by the Twelfth Supplemental Indenture dated as of October 1, 2022. Accordingly, the NJNG Series C Notes are secured ratably with NJNG’s First Mortgage Bonds in the collateral pledged to secure such bonds. NJR will not be obligated directly or contingently with respect to the NJNG Series C Notes or the First Mortgage Bonds.

The NJR Series B Notes will be unsecured and guaranteed by certain unregulated subsidiaries of NJR.

The proceeds of the NJNG Series C Notes will be used for general corporate purposes, including, but not limited to, the refinancing or retiring short-term debt and funding capital expenditures. The proceeds of the NJR Series B Notes will be used for general corporate purposes, including, but not limited to future acquisitions, repayment of indebtedness, capital expenditures and working capital.
 
Interest will accrue on the NJNG Series C Notes at 5.47% per annum and will be payable on October 24 and April 24 of each year, beginning on April 24, 2023, and ending on the maturity date of October 24, 2052. Interest will accrue on the NJR Series B Notes at 6.14% per annum and will be payable on June 15 and December 15 of each year, beginning on June 15, 2023, and ending on the maturity date of December 15, 2032. The Issuers may prepay at any time all, or from time to time any part of, the Notes, in an amount not less than $1,000,000 in aggregate principal amount of the Notes then outstanding in the case of a partial prepayment, at 100% of the aggregate principal amount so prepaid together with interest accrued thereon to the date of such prepayment and the make-whole amount (as such term is defined in the Note Purchase Agreements) determined for the prepayment date with respect to such principal amount. The Notes will also be subject to required prepayments upon the occurrence of certain events. The Notes will not be registered under the Securities Act of 1933, as amended (“Securities Act”), or under the securities laws of any jurisdiction. The Notes will be subject to certain restrictions on transfer and may only be sold in transactions exempt from, or not subject to, the registration requirements of the Securities Act.
 
The NJNG Note Purchase Agreement contains customary representations and warranties of NJNG and the Purchasers and also contains customary events of default and certain covenants which will limit NJNG’s ability beyond agreed upon thresholds, to, among other things: (i) incur liens; (ii) make dispositions of assets; (iii) enter into transactions with affiliates; and (iv) merge, consolidate, transfer, sell or lease all or substantially all of the Issuer’s assets. These covenants are subject to a number of important exceptions and qualifications set forth in the NJNG Note Purchase Agreement.

The NJR Note Purchase Agreement contains customary representations and warranties of NJR and the Purchasers and also contains customary events of default and certain covenants which will limit NJR’s ability beyond agreed upon thresholds, to, among other things: (i) incur additional debt (including a covenant which limits the amount of consolidated total debt of NJR at the end of a fiscal quarter to 70% of the consolidated total capitalization of NJR, as those terms are defined in the Note Purchase Agreement, and a covenant limiting priority debt to 20% of NJR’s consolidated total capitalization, as those terms are defined in the Note Purchase Agreement); (ii) incur liens; (iii) make dispositions of assets; (iv) enter into transactions with affiliates; and (v) merge, consolidate, transfer, sell or lease all or substantially all of NJR’s assets. These covenants are subject to a number of important exceptions and qualifications set forth in the NJR Note Purchase Agreement.
 
The foregoing description of the NJNG Note Purchase Agreement is qualified in its entirety by reference to the entire NJNG Note Purchase Agreement attached hereto as Exhibit 4.1 and incorporated herein by reference. The foregoing description of the NJR Note Purchase Agreement is qualified in its entirety by reference to the entire NJR Note Purchase Agreement attached hereto as Exhibit 4.2 and incorporated herein by reference. The foregoing description of the Twelfth Supplemental Indenture is qualified in its entirety by reference to the entire Twelfth Supplemental Indenture attached hereto as Exhibit 4.3 and incorporated herein by reference.
 
The Notes are not registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements and applicable state laws. This Current Report on Form 8-K does not constitute an offer to sell nor a solicitation of an offer to purchase the Notes or any other securities, and shall not constitute an offer, solicitation or sale in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful.

Cautionary Statements Regarding Forward-Looking Statements
 
This filing contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. NJR cautions readers that the assumptions forming the basis for forward-looking statements include many factors that are beyond NJR’s ability to control or estimate precisely, such as estimates of future market conditions and the behavior of other market participants. Words such as “anticipates,” “estimates,” “expects,” “projects,” “intends,” “plans,” “believes,” “may,” “should” and similar expressions may identify forward-looking information and such forward-looking statements are made based upon management’s current expectations and beliefs as of this date concerning future developments and their potential effect upon NJR. There can be no assurance that future developments will be in accordance with management’s expectations or that the effect of future developments on NJR will be those anticipated by management. Forward-looking information in this filing includes, but is not limited to, certain statements regarding the use of proceeds.
 
Additional information and factors that could cause actual results to differ materially from NJR’s expectations are contained in NJR’s filings with the U.S. Securities and Exchange Commission (“SEC”), including NJR’s Annual Reports on Form 10-K and subsequent Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K, and other SEC filings, which are available at the SEC’s web site, http://www.sec.gov. Information included in this filing is representative as of today only and while NJR periodically reassesses material trends and uncertainties affecting NJR’s results of operations and financial condition in connection with its preparation of management’s discussion and analysis of results of operations and financial condition contained in its Quarterly and Annual Reports filed with the SEC, NJR does not, by including this statement, assume any obligation to review or revise any particular forward-looking statement referenced herein in light of future events.
 
Item 9.01
Financial Statements and Exhibits.
 
 
(d)
Exhibits.

Exhibit
Number
Description
 
  
$125,000,000 Note Purchase Agreement, dated as of October 24, 2022, by and among New Jersey Natural Gas Company and the Purchasers party thereto.
 
  
$50,000,000 Note Purchase Agreement, dated as of October 24, 2022, by and among New Jersey Resources Corporation and the Purchasers party thereto.
 
  
Twelfth Supplemental Indenture, dated as of October 1, 2022, by and between New Jersey Natural Gas Company and U.S. Bank Trust Company, National Association, as Trustee.
    
104
Cover page in Inline XBRL format.
 
SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
NEW JERSEY RESOURCES CORPORATION
 
 
Date: October 28, 2022
By:
/s/ Roberto F. Bel
 
 
Roberto F. Bel
 
 
Senior Vice President and Chief Financial Officer


Exhibit 4.1

Execution Version
New Jersey Natural Gas Company
 
$125,000,000 5.47% Senior Notes, Series 2022C, due October 24, 2052
 

Note Purchase Agreement
 
 
Dated as of October 24, 2022
 
TABLE OF CONTENTS
 
(Not a part of the Agreement)

 
Section
Heading
Page
   
SECTION 1.
AUTHORIZATION OF NOTES
 1
   
SECTION 2.
SALE AND PURCHASE OF NOTES AND SECURITY FOR THE NOTES
 1
    
 
Section 2.1.
Sale and Purchase of Notes
 1
 
Section 2.2.
Security for the Notes; First Mortgage Bonds
 1
   
SECTION 3.
 CLOSING 2
   
SECTION 4.
CONDITIONS TO CLOSING
 3
    
 
Section 4.1.
Representations and Warranties
 3
 
Section 4.2.
Performance; No Default
 3
 
Section 4.3.
Compliance Certificates
 3
 
Section 4.4.
Opinions of Counsel
 3
 
Section 4.5.
Purchase Permitted by Applicable Law, Etc.
 4
 
Section 4.6.
Related Transactions
 4
 
Section 4.7.
Payment of Special Counsel Fees
 4
 
Section 4.8.
Private Placement Number
 4
 
Section 4.9.
Changes in Corporate Structure
 4
 
Section 4.10.
Funding Instructions
 4
 
Section 4.11.
Board Approval
 5
 
Section 4.12.
First Mortgage Bonds and Supplemental Indenture
 5
 
Section 4.13.
Proceedings and Documents
 5
   
SECTION 5.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
 5
   
 
Section 5.1.
Organization; Power and Authority
 6
 
Section 5.2.
Authorization, Etc
 6
 
Section 5.3.
Disclosure
 6
 
Section 5.4.
Organization and Ownership of Shares of Subsidiaries
 6
 
Section 5.5.
Financial Statements
 6
 
Section 5.6.
Compliance with Laws, Other Instruments, Etc.
 7
 
Section 5.7.
Governmental Authorizations, Etc.
 7
 
Section 5.8.
Litigation; Observance of Statutes and Orders
 7
 
Section 5.9.
Taxes
 7
 
Section 5.10.
Title to Property; Leases
 8
 
Section 5.11.
 Licenses, Permits, Etc.
 8
 
Section 5.12.
Compliance with ERISA
8

-i-
 
Section 5.13.
Private Offering by the Company
 9
 
Section 5.14.
Use of Proceeds; Margin Regulations
 9
 
Section 5.15.
Existing Debt
 9
 
Section 5.16.
Foreign Assets Control Regulations, Etc
 10
 
Section 5.17.
Status under Certain Statutes
 11
 
Section 5.18.
Environmental Matters
 11
 
Section 5.19.
Perfection of Liens
 11
 
Section 5.20.
First Mortgage Bonds Pari Passu
 12
 
Section 5.21.
No Event of Default
 12
   
SECTION 6.
REPRESENTATIONS OF THE PURCHASERS
 12
   
 
Section 6.1.
Purchase for Investment
 12
 
Section 6.2.
Source of Funds
 12
   
SECTION 7.
INFORMATION AS TO COMPANY
 14
   
 
Section 7.1.
Financial and Business Information
 14
 
Section 7.2.
Officer’s Certificate
 16
 
Section 7.3.
Inspection
 17
 
Section 7.4.
Electronic Delivery
 17
     
SECTION 8.
PREPAYMENT OF THE NOTES
 18
     
 
Section 8.1.
Required Prepayments
 18
 
Section 8.2.
Required Prepayment—Condemnation; Required Sale
 18
 
Section 8.3.
Optional Prepayments with and Without Make-Whole Amount
 19
 
Section 8.4.
Allocation of Partial Prepayments
 19
 
Section 8.5.
Maturity; Surrender, Etc.
 19
 
Section 8.6.
 Purchase of Notes
 19
 
Section 8.7.
Make-Whole Amount for Notes
 20
 
Section 8.8.
Offer to Prepay upon Asset Disposition
 21
 
Section 8.9.
Offer to Prepay in the Event of a Change of Control
 22
     
SECTION 9.
AFFIRMATIVE COVENANTS
 23
     
 
Section 9.1.
Compliance with Laws
 23
 
Section 9.2.
Insurance
 23
 
Section 9.3.
Maintenance of Properties
 23
 
Section 9.4.
Payment of Taxes and Claims
 24
 
Section 9.5.
Corporate Existence, Etc.
 24
 
Section 9.6.
Regulated Nature
 24
 
Section 9.7.
Evidence of Recorded Supplemental Indentures
 24
   
SECTION 10.
NEGATIVE COVENANTS
 24
     
 
Section 10.1.
[Reserved]
 24
 
Section 10.2.
Liens
 24

-ii-
 
Section 10.3.
Restricted Payments
 26
 
Section 10.4.
[RESERVED]
 26
 
Section 10.5.
Sale of Assets, Etc.
 27
 
Section 10.6.
Merger, Consolidation, Etc.
 27
 
Section 10.7.
[RESERVED]
 28
 
Section 10.8.
Limitations on Subsidiaries, Partnerships and Joint Ventures
 28
 
Section 10.9.
Limitation on Certain Leases
 28
 
Section 10.10.
Nature of Business
 28
 
Section 10.11.
Transactions with Affiliates
 29
 
Section 10.12.
[RESERVED]
 29
 
Section 10.13.
Economic Sanctions, Etc
 29
   
SECTION 11.
EVENTS OF DEFAULT
 29
   
SECTION 12.
REMEDIES ON DEFAULT, ETC.
 32
   
 
Section 12.1.
Acceleration
 32
 
Section 12.2.
Other Remedies
 32
 
Section 12.3.
Rescission
 33
 
Section 12.4.
No Waivers or Election of Remedies, Expenses, Etc.
 33
       
SECTION 13.
REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES
 33
       
 
Section 13.1.
Registration of Notes
 33
 
Section 13.2.
Transfer and Exchange of Notes
 34
 
Section 13.3.
Replacement of Notes
 34
       
SECTION 14.
PAYMENTS ON NOTES
 35
       35
 
Section 14.1.
Place of Payment
 35
 
Section 14.2.
Home Office Payment
 35
 
Section 14.3.
FATCA Information
 35
       
SECTION 15.
EXPENSES, ETC.
 35
       
 
Section 15.1.
Transaction Expenses
 36
 
Section 15.2.
Certain Taxes
 36
 
Section 15.3.
Survival
 36
   
SECTION 16.
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT
 36
   
SECTION 17.
AMENDMENT AND WAIVER
 37
   
 
Section 17.1.
Requirements
 37
 
Section 17.2.
Solicitation of Purchasers and Holders of Notes
 37
 
Section 17.3.
Binding Effect, Etc.
 38
 
Section 17.4.
Notes Held by Company, Etc.
 38

-iii-
SECTION 18.
NOTICES
 38
       
SECTION 19.
REPRODUCTION OF DOCUMENTS
 39
       
SECTION 20.
CONFIDENTIAL INFORMATION
 39
       
SECTION 21.
SUBSTITUTION OF PURCHASER
 40
       
SECTION 22.
MISCELLANEOUS
 41
       
 
Section 22.1.
Successors and Assigns
 41
 
Section 22.2.
Submission to Jurisdiction; Waiver of Jury Trial
 41
 
Section 22.3.
Payments Due on Non-Business Days
 41
 
Section 22.4.
Accounting Terms
 42
 
Section 22.5.
Severability
 42
 
Section 22.6.
Construction
 42
 
Section 22.7.
 Counterparts; Electronic Contracting 43
 
Section 22.8.
Governing Law
 43
     
SECTION 23.
APPOINTMENT AND DIRECTION OF COLLATERAL AGENT
 43
       
 
Section 23.1.
Appointment and Authority; Direction
 43
 
Section 23.2.
Limited Agency
 43
 
Section 23.3.
Delegation of Duties
 43
 
Section 23.4.
Exculpatory Provisions
 44
 
Section 23.5.
Reliance by Collateral Agent
 44
 
Section 23.6.
Indemnification
 45
 
Section 23.7.
Duties; Obligations
 45
 
Section 23.8.
Requesting Instructions
 45
 
Section 23.9.
Administrative Actions
 45
 
Section 23.10.
Exercise of Remedies
 45
 
Section 23.11.
Sharing and Application of Proceeds
 46
 
Section 23.12.
Resignation or Termination of Collateral Agent
 46
 
Section 23.13.
Succession of Successor Collateral Agent
 47
 
Section 23.14.
Eligibility of Collateral Agent
 47
 
Section 23.15.
Successor Collateral Agent by Merger
 47
 
Section 23.16.
Compensation and Reimbursement of Collateral Agent
 47
 
Section 23.17.
Self Dealing
 48
 
Section 23.18.
Third Party Beneficiary
 48

-iv-
Attachments to Note Purchase Agreement
     
Schedule A
—
Information Relating to Purchasers
     
Schedule B
—
Defined Terms
     
Schedule 4.9
—
Changes in Corporate Structure
     
Schedule 5.3
—
Disclosure Materials
     
Schedule 5.5
—
Financials
     
Schedule 5.8
—
Certain Litigation
     
Schedule 5.11
—
Patents, Etc.
     
Schedule 5.14
—
Use of Proceeds
     
Schedule 5.15
—
Existing Debt
     
Exhibit 1
—
Form of 5.47% Senior Notes, Series 2022C, due October 24, 2052
     
Exhibit 2
—
Form of Supplemental Indenture

-v-
New Jersey Natural Gas Company
1415 Wyckoff Road
Wall, New Jersey 07719

$125,000,000 5.47% Senior Notes, Series 2022C, due October 24, 2052

 Dated as of October 24, 2022
 
To the Purchasers Listed in
the Attached Schedule A Hereto:
 
Ladies and Gentlemen:
 
New Jersey Natural Gas Company, a New Jersey corporation (the “Company”), agrees with each of you as follows:
 
Section 1.
Authorization of Notes.
 
The Company will authorize the issue and sale of $125,000,000 aggregate principal amount of its 5.47% Senior Notes, Series 2022C, due October 24, 2052 (the “Notes” such term shall also include any such Notes issued in substitution therefor pursuant to Section 13 of this Agreement). The Notes shall be substantially in the form set out in Exhibit 1, with such changes therefrom, if any, as may be approved by the Purchasers and the Company.  Certain capitalized terms used in this Agreement are defined in Schedule B; references to a “Schedule” or an “Exhibit” are, unless otherwise specified, to a Schedule or an Exhibit attached to this Agreement.  References to a “Section” are references to a Section of this Agreement unless otherwise specified.
 
Section 2.
Sale and Purchase of Notes and Security for the Notes.
 
Section 2.1         Sale and Purchase of Notes.  Subject to the terms and conditions of this Agreement, the Company will issue and sell to each Purchaser and each Purchaser will purchase from the Company, at the Closing provided for in Section 3, Notes in the principal amount specified opposite such Purchaser’s name in Schedule A at the purchase price of 100% of the principal amount thereof.  Each Purchaser’s obligations hereunder are several and not joint obligations and no Purchaser shall have any obligation or liability to any Person for the performance or non-performance by any other Purchaser hereunder.
 
Section 2.2        Security for the Notes; First Mortgage Bonds.  (a) The Notes shall be secured by an equal principal amount of First Mortgage Bonds issued by the Company under the Mortgage Indenture to U.S. Bank Trust Company, National Association, as successor in interest to U.S. Bank National Association, as collateral agent for the holders of the Notes.  The First Mortgage Bonds will rank pari passu with all other existing and future first mortgage bonds issued pursuant to the Mortgage Indenture.

(b)         Terms of First Mortgage Bonds.  The First Mortgage Bonds will have the same stated interest rate, interest payment dates, stated maturity and redemption provisions (including Make-Whole Amount, if any), and will be in the same aggregate principal amount, as the Notes.  Payments of the principal of, Make-Whole Amount, if any, and interest on the Notes shall be deemed to satisfy and discharge the Company’s obligation to make such payments on the First Mortgage Bonds.  Principal of, Make-Whole Amount, if any, and interest on the First Mortgage Bonds are payable at the principal office of the Mortgage Trustee in Edison, New Jersey or at the Company’s option at the principal office of the Collateral Agent.
 
(c)         Parallel Payments of Notes and First Mortgage Bonds.  The First Mortgage Bonds shall contain optional and mandatory redemption provisions (including Make-Whole Amount, if any) which correspond to the optional and mandatory prepayment provisions of the Notes.  In addition, the First Mortgage Bonds shall be subject to mandatory redemption if the Company or the Mortgage Trustee is notified that an Event of Default under this Agreement has occurred and is continuing and that the principal amount of all Notes then outstanding has become due and payable in accordance with this Agreement.
 
(1)       In the event the Company elects to or is required to prepay the Notes, in whole or in part, in accordance with the provisions of this Agreement, the Company’s obligations with respect to a principal amount of First Mortgage Bonds equal to the principal amount of such Notes being prepaid will, upon prepayment of such Notes, be satisfied and discharged, and the Collateral Agent shall deliver corresponding First Mortgage Bonds in a principal amount equal to the principal amount of the Notes so prepaid to the Company for further delivery to the Mortgage Trustee for cancellation.
 
(2)         In the event the Company elects to or is required to redeem First Mortgage Bonds in whole or in part, in accordance with the provisions of the Mortgage Indenture, the Company shall prepay a principal amount of the Notes equal to the principal amount of such First Mortgage Bonds being redeemed in accordance with the provisions of Section 8.2 or Section 8.3, as applicable, and the Company’s obligation in respect of First Mortgage Bonds equal to the principal amount of such prepaid Notes will be satisfied and discharged, and the Collateral Agent shall deliver corresponding First Mortgage Bonds in a principal amount equal to the principal amount of such Notes so prepaid to the Company for further delivery to the Mortgage Trustee for cancellation.
 
Section 3.
Closing.
 
The sale and purchase of the Notes to be purchased by the Purchasers shall occur at the offices of ArentFox Schiff LLP, 1185 Sixth Avenue, Suite 3000, New York, New York 10036, at 11:00 a.m., New York, New York time, at a closing (the “Closing”) on October 24, 2022. At the Closing, the Company will deliver to each Purchaser the Notes to be purchased by such Purchaser in the form of a single Note (or such greater number of Notes in denominations of at least $100,000 as such Purchaser may request) dated the date of the Closing and registered in such Purchaser’s name (or in the name of its nominee), against delivery by such Purchaser to the Company or its order of immediately available funds in the amount of the purchase price therefor by wire transfer of immediately available funds for the account of the Company in accordance with the funding instructions provided pursuant to Section 4.10.  If at the Closing the Company shall fail to tender such Notes to any Purchaser as provided above in this Section 3, or any of the conditions specified in Section 4 shall not have been fulfilled to such Purchaser’s satisfaction, such Purchaser shall, at its election, be relieved of all further obligations under this Agreement, without thereby waiving any rights such Purchaser may have by reason of such failure or such nonfulfillment.

-2-
Section 4.
Conditions to Closing.
 
Each Purchaser’s obligation to purchase and pay for the Notes to be sold to such Purchaser at the Closing is subject to the fulfillment to such Purchaser’s satisfaction, prior to or at the Closing, of the following conditions:
 
Section 4.1        Representations and Warranties.  (a) The representations and warranties of the Company in this Agreement shall be true and correct at the time of the Closing, except for any representation or warranty that by its terms speaks as of a particular time, in which case such representation or warranty shall have been correct as of that time, and (b) the representations and warranties of the Company in the Mortgage Indenture (including the Supplemental Indenture) and the First Mortgage Bond Documents to which it is a party shall be correct upon execution and delivery of such First Mortgage Bond Documents at the time of the Closing.
 
Section 4.2         Performance; No Default.  The Company shall have performed and complied with all agreements and conditions contained in this Agreement, the Mortgage Indenture (including the Supplemental Indenture) and the First Mortgage Bond Documents to which it is a party required to be performed or complied with by it prior to or at the Closing, before and after giving effect to the issue and sale of the Notes (and the application of the proceeds thereof as contemplated by Schedule 5.14) and the issue of the First Mortgage Bonds, no Default or Event of Default shall have occurred and be continuing.
 
Section 4.3           Compliance Certificates.
 
(a)         Officer’s Certificate.  The Company shall have delivered to such Purchaser an Officer’s Certificate, dated the date of the Closing, certifying that the conditions specified in Sections 4.1, 4.2 and 4.9 have been fulfilled.
 
(b)         Secretary’s Certificate.  The Company shall have delivered to such Purchaser a certificate of its Secretary, dated the date of the Closing, certifying as to (i) the resolutions attached thereto and other corporate proceedings relating to the authorization, execution and delivery of this Agreement, the Supplemental Indenture, the First Mortgage Bond Documents to which it is a party, the Notes and the First Mortgage Bonds and (ii) the Company’s organizational documents as then in effect.
 
Section 4.4      Opinions of Counsel.  Such Purchaser shall have received opinions in form and substance satisfactory to such Purchaser, dated the date of the Closing (a) from Melissa Abraham, Esq., Assistant General Counsel of the Company and Troutman Pepper Hamilton Sanders LLP, special counsel for the Company, covering the matters set forth in Exhibit 4.4(a) and covering such other matters incident to the transactions contemplated hereby as such Purchaser or special counsel to the Purchasers may reasonably request (and the Company hereby instructs its counsel to deliver such opinion to such Purchaser) and (b) from ArentFox Schiff LLP, special counsel to the Purchasers in connection with such transactions, covering the matters set forth in Exhibit 4.4(b) and covering such other matters incident to such transactions as such Purchaser may reasonably request.

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Section 4.5        Purchase Permitted by Applicable Law, Etc.  On the date of the Closing, such Purchaser’s purchase of Notes shall (a) be permitted by the laws and regulations of each jurisdiction to which such Purchaser is subject, without recourse to provisions (such as Section 1405(a)(8) of the New York Insurance Law) permitting limited investments by insurance companies without restriction as to the character of the particular investment, (b) not violate any applicable law or regulation (including, without limitation, Regulation T, U or X of the Board of Governors of the Federal Reserve System) and (c) not subject such Purchaser to any tax, penalty or liability under or pursuant to any applicable law or regulation.  If requested by such Purchaser, such Purchaser shall have received an Officer’s Certificate certifying as to such matters of fact as such Purchaser may reasonably specify to enable it to determine whether such purchase is so permitted.
 
Section 4.6        Related Transactions.  The Company shall have consummated the sale of the entire principal amount of the Notes scheduled to be sold on the date of the Closing pursuant to this Agreement and delivered the First Mortgage Bonds to the Collateral Agent pursuant to this Agreement and the Supplemental Indenture.
 
Section 4.7          Payment of Special Counsel Fees. Without limiting the provisions of Section 15.1, the Company shall have paid on or before the Closing the reasonable fees, charges and disbursements of the Purchasers’ special counsel referred to in Section 4.4(b) to the extent reflected in a statement of such counsel rendered to the Company at least one Business Day prior to the Closing.
 
Section 4.8         Private Placement Number.  A Private Placement Number issued by CUSIP Global Services (in cooperation with the SVO) shall have been obtained for the Notes.
 
Section 4.9         Changes in Corporate Structure.  Except as specified in Schedule 4.9, the Company shall not have changed its jurisdiction of incorporation or been a party to any merger or consolidation and shall not have succeeded to all or any substantial part of the liabilities of any other entity, at any time following the date of the most recent financial statements referred to in Schedule 5.5.
 
Section 4.10        Funding Instructions.  At least five Business Days prior to the date of the Closing, such Purchaser shall have received written instructions executed by an authorized officer of the Company on letterhead of the Company directing the manner of the payment of funds and setting forth (a) the name and address of the transferee bank, (b) such transferee bank’s ABA number, (c) the account name and number into which the purchase price for the Notes is to be deposited, which account shall be fully opened and able to receive micro deposits in accordance with this Section 4.10 at least five Business Days prior to the date of the Closing and (d) the name and telephone number of the account representative at the Company responsible for (1) verifying receipt of such funds and (2) verifying the information set forth in the instructions.  Each Purchaser has the right, but not the obligation, upon written notice (which may be by email) to the Company, to elect to deliver a micro deposit (less than $51.00) to the account identified in the written instructions no later than two Business Days prior to the date of the Closing. If a Purchaser delivers a micro deposit, a Responsible Officer must verbally verify the receipt and amount of the micro deposit to such Purchaser on a telephone call initiated by such Purchaser prior to the Closing. The Company shall not be obligated to return the amount of the micro deposit, nor will the amount of the micro deposit be netted against the Purchaser’s purchase price of the Notes to be issued at the Closing.

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Section 4.11       Board Approval.  The New Jersey Board of Public Utilities shall have entered an appropriate order authorizing the issuance and sale of the Notes to the Purchasers and the delivery of the First Mortgage Bonds to the Collateral Agent as security for the Notes, upon terms not inconsistent with this Agreement, the Supplemental Indenture, the Notes and the First Mortgage Bonds and such order shall not be subject to appeal.
 
Section 4.12       First Mortgage Bonds and Supplemental Indenture.  (a) All conditions precedent set forth in the Mortgage Indenture with respect to the execution and delivery of the Supplemental Indenture and the issuance of the First Mortgage Bonds shall have been satisfied.
 
(b)        The First Mortgage Bonds, the Supplemental Indenture and the First Mortgage Bond Documents shall have been duly authorized, executed, authenticated in the case of the First Mortgage Bonds and delivered by the respective parties thereto, shall constitute legal, valid and binding contracts and agreements of such parties, and such Purchaser shall have received true, complete, executed copies thereof and a certified copy of the Mortgage Indenture.
 
(c)         The Mortgage Indenture and the Supplemental Indenture shall have been duly recorded as an indenture on real property and duly filed, recorded or indexed as a security interest in personal property so as to constitute a valid, perfected first Lien on all of the Company’s property covered by the Mortgage Indenture and the Supplemental Indenture, all in accordance with applicable law, and the Company shall have caused satisfactory evidence thereof to be furnished to such Purchaser and special counsel to the Purchasers.
 
Section 4.13    Proceedings and Documents.  All corporate and other proceedings in connection with the transactions contemplated by this Agreement and all documents and instruments incident to such transactions shall be satisfactory to such Purchaser and special counsel to the Purchasers, and such Purchaser and special counsel to the Purchasers shall have received all such counterpart originals or certified or other copies of such documents as such Purchaser or special counsel to the Purchasers may reasonably request.
 
Section 5.
Representations and Warranties of the Company.
 
The Company represents and warrants to each Purchaser that:

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Section 5.1       Organization; Power and Authority.  The Company is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, and is duly qualified as a foreign corporation and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  The Company has the corporate power and authority to own or hold under lease the properties it purports to own or hold under lease, to transact the business it transacts and proposes to transact, to execute and deliver this Agreement, the Supplemental Indenture, the First Mortgage Bond Documents to which it is a party, the Notes and the First Mortgage Bonds, and to perform the provisions hereof, thereof and of the Mortgage Indenture.
 
Section 5.2      Authorization, Etc.  This Agreement, the Mortgage Indenture (including the Supplemental Indenture), the First Mortgage Bond Documents to which the Company is a party, the Notes, and the First Mortgage Bonds have been duly authorized by all necessary corporate action on the part of the Company, and this Agreement and the Mortgage Indenture constitute, and upon execution and delivery thereof the Supplemental Indenture, the First Mortgage Bond Documents to which the Company is a party, each Note and each First Mortgage Bond constitutes, a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its respective terms, except as such enforceability may be limited by (a) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (b) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
 
Section 5.3        Disclosure.  The Company, through its agents, Mizuho Securities USA LLC and TD Securities (USA) LLC, has delivered to each Purchaser a copy of an Investor Presentation, dated October 4, 2022 (the “Investor Presentation”), relating to the transactions contemplated hereby.  Except as disclosed in Schedule 5.3, this Agreement, the Supplemental Indenture, the Investor Presentation, the documents, certificates or other writings identified in Schedule 5.3 and the financial statements listed in Schedule 5.5 (collectively, the “Disclosure Documents”), taken as a whole, do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading in light of the circumstances under which they were made.  Except as disclosed in the Disclosure Documents, since September 30, 2021, there has been no change in the financial condition, operations, business or properties of the Company except changes that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.
 
Section 5.4           Organization and Ownership of Shares of Subsidiaries.  The Company has no Subsidiaries.
 
Section 5.5       Financial Statements.  The Company has delivered to each Purchaser copies of the financial statements of the Company listed on Schedule 5.5.  All of said financial statements (including in each case the related schedules and notes) fairly present in all material respects the financial position of the Company as of the respective dates specified in such Schedule and the results of its operations and cash flows for the respective periods so specified and have been prepared in accordance with GAAP consistently applied throughout the periods involved except as set forth in the notes thereto (subject, in the case of any interim financial statements, to normal year-end adjustments).  The Company does not have any Material liabilities that are not disclosed on such financial statements or otherwise disclosed in the Disclosure Documents.

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Section 5.6      Compliance with Laws, Other Instruments, Etc.  Neither the execution and delivery by the Company of this Agreement, the Supplemental Indenture, the First Mortgage Bond Documents to which it is a party, the Notes or the First Mortgage Bonds nor the performance by the Company of this Agreement, the Mortgage Indenture (including the Supplemental Indenture), the First Mortgage Bond Documents to which it is a party, the Notes or the First Mortgage Bonds will (a) contravene, result in any breach of, or constitute a default under, or result in the creation of any Lien (other than the Liens contemplated thereby) in respect of any property of the Company under, any indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease corporate charter or by-laws, or any other Material agreement or instrument to which the Company is bound or by which the Company or any of its properties may be bound or affected, (b) conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority applicable to the Company or (c) violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to the Company
 
Section 5.7        Governmental Authorizations, Etc.  No consent, approval or authorization of, or registration, filing or declaration with, any Governmental Authority is required in connection with the execution and delivery by the Company of this Agreement, the Supplemental Indenture, the First Mortgage Bond Documents to which it is a party, the Notes or the First Mortgage Bonds or the performance by the Company of this Agreement, the Mortgage Indenture (including the Supplemental Indenture), the First Mortgage Bond Documents to which it is a party, the Notes or the First Mortgage Bonds other than such consents, approvals, authorizations, registrations, filings or declarations that have been or will be obtained or made prior to the date of the Closing.
 
Section 5.8         Litigation; Observance of Statutes and Orders.  (a) Except as disclosed in Schedule 5.8, there are no actions, suits or proceedings pending or, to the knowledge of the Company, threatened against or affecting the Company or any property of the Company in any court or before any arbitrator of any kind or before or by any Governmental Authority that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.
 
(b)        The Company is not in default under any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority or is in violation of any applicable law, ordinance, rule or regulation (including, without limitation, ERISA, Environmental Laws or the USA PATRIOT Act) of any Governmental Authority, which default or violation, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.
 
Section 5.9         Taxes.  The Company has filed all income tax returns that are required to have been filed in any jurisdiction, and have paid all taxes shown to be due and payable on such returns and all other taxes and assessments payable by them, to the extent such taxes and assessments have become due and payable and before they have become delinquent, except for any taxes and assessments (a) the amount of which is not, individually or in the aggregate, Material or (b) the amount, applicability or validity of which is currently being contested in good faith by appropriate proceedings and with respect to which the Company has established adequate reserves in accordance with GAAP.  The charges, accruals and reserves on the books of the Company in respect of Federal, state or other taxes for all fiscal periods are adequate.  The Federal income tax liabilities of the Company have been determined by the Internal Revenue Service and paid for all fiscal years up to and including the fiscal year ended September 30, 2020.

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Section 5.10        Title to Property; Leases.  The Company has good and sufficient title related to the ownership of its Material properties, including all such Material properties reflected in the most recent audited balance sheet referred to in Section 5.5 or purported to have been acquired by the Company after said date (except as sold or otherwise disposed of in the ordinary course of business), in each case free and clear of Liens prohibited by this Agreement or the Mortgage Indenture (including the Supplemental Indenture), except for those defects in title and Liens that, individually or in the aggregate, would not have a Material Adverse Effect.  All Material leases are valid and subsisting and are in full force and effect in all material respects.
 
Section 5.11        Licenses, Permits, Etc.  Except as disclosed in Schedule 5.11, the Company owns or possesses all licenses, permits, franchises, authorizations, patents, copyrights, proprietary software, service marks, trademarks, trade names and domain names or rights thereto, that are Material, without known conflict with the rights of others, except for those conflicts that, individually or in the aggregate, would not have a Material Adverse Effect.
 
Section 5.12     Compliance with ERISA.  (a) The Company and each ERISA Affiliate have operated and administered each Plan in compliance with all applicable laws except for such instances of noncompliance as have not resulted in and would not reasonably be expected to result in a Material Adverse Effect.  Neither the Company nor any ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans (as defined in section 3 of ERISA) with respect to any Plan, other than for claims for benefits and funding obligations in the ordinary course, and no event, transaction or condition has occurred or exists with respect to any Plan that would reasonably be expected to result in the incurrence of any such liability under Title I or IV of ERISA or the penalty or excise tax provisions of the Code by the Company or any ERISA Affiliate, or in the imposition of any Lien under section 430 of the Code or section 4068 of ERISA on any of the rights, properties or assets of the Company or any ERISA Affiliate, other than any such liabilities or Liens as would not, individually or in the aggregate, be reasonably expected to result in a Material Adverse Effect.
 
(b)         The present value of the aggregate benefit liabilities under each of the Plans which are subject to Title IV of ERISA (other than Multiemployer Plans), determined as of the end of such Plan’s most recently ended plan year on the basis of the actuarial assumptions specified for funding purposes in such Plan’s most recent actuarial valuation report, did not exceed the aggregate current value, of the assets of such Plans allocable to such benefit liabilities by more than $25,000,000.  The term “benefit liabilities” has the meaning specified in section 4001 of ERISA and the terms “current value” and “present value” have the meanings specified in section 3 of ERISA.
 
(c)         The Company and its ERISA Affiliates have not incurred withdrawal liabilities under section 4201 or 4204 of ERISA (and are not subject to contingent withdrawal liabilities under section 4204) in respect of Multiemployer Plans that, individually or in the aggregate, are reasonably expected to result in a Material Adverse Effect.

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(d)        The accumulated post-retirement benefit obligation (determined as of the last day of the Company’s most recently ended fiscal year in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 715-60, without regard to liabilities attributable to continuation coverage mandated by section 4980B of the Code) of the Company is not reasonably expected to result in a Material Adverse Effect.
 
(e)         The execution and delivery of this Agreement and the issuance and sale of the Notes hereunder will not involve any transaction that is subject to the prohibitions of section 406(a)(1)(A)-(D) of ERISA or in connection with which a tax could be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code.  The representation by the Company in the first sentence of this Section 5.12(e) with respect to each Purchaser is made in reliance upon and subject to the accuracy of such Purchaser’s representation in Section 6.2 as to the sources of the funds used to pay the purchase price of the Notes to be purchased by such Purchaser.
 
Section 5.13       Private Offering by the Company.  Neither the Company nor anyone authorized to act on its behalf has offered the Notes, the First Mortgage Bonds or any similar securities for sale to, or solicited any offer to buy any of the same from, or otherwise approached or negotiated in respect thereof with, any Person other than the Purchasers and not more than 55 other Institutional Investors of the type described in clause (c) of the definition thereof, each of which has been offered the Notes at a private sale for investment.  Neither the Company nor anyone authorized to act on its behalf has taken, or will take, any action that would subject the issuance or sale of the Notes to the registration requirements of section 5 of the Securities Act.
 
Section 5.14       Use of Proceeds; Margin Regulations.  The Company will apply the proceeds of the sale of the Notes hereunder as set forth in Schedule 5.14.  No part of the proceeds from the sale of the Notes hereunder will be used, directly or indirectly, for the purpose of buying or carrying any margin stock within the meaning of Regulation U of the Board of Governors of the Federal Reserve System (12 CFR 221), or for the purpose of buying or carrying or trading in any securities under such circumstances as to involve the Company in a violation of Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a violation of Regulation T of said Board (12 CFR 220).  Margin stock does not constitute more than 25% of the value of the assets of the Company and the Company does not have any present intention that margin stock will constitute more than 25% of the value of such assets.  As used in this Section, the terms “margin stock” and “purpose of buying or carrying” shall have the meanings assigned to them in said Regulation U.
 
Section 5.15       Existing Debt.  (a) Except as described therein, Schedule 5.15 sets forth a complete and correct list of all outstanding Debt of the Company as of June 30, 2022, since which date there has been no Material change in the amounts, interest rates, sinking funds, installment payments or maturities of the Debt of the Company, except as described in Schedule 5.15.  The Company is not in default and no waiver of default is currently in effect, in the payment of any principal or interest on any Debt of the Company and no event or condition exists with respect to any Debt of the Company the outstanding principal amount of which exceeds $10,000,000 that would permit (or that with notice or the lapse of time, or both, would permit) one or more Persons to cause such Debt to become due and payable before its stated maturity or before its regularly scheduled dates of payment.

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(b)      The Company is not a party to, or otherwise subject to any provision contained in, any instrument evidencing Debt of the Company, any agreement relating thereto or any other agreement (including, but not limited to, its charter or other organizational document) which limits the amount of, or otherwise imposes restrictions on the incurring of, Debt of the Company, except as provided in the Mortgage Indenture and any Bank Credit Agreement and as otherwise specifically indicated in Schedule 5.15.
 
Section 5.16         Foreign Assets Control Regulations, Etc.  (a) Neither the Company nor any Controlled Entity (i) is a Blocked Person, (ii) has been notified that its name appears or may in the future appear on a State Sanctions List or (iii) is a target of sanctions that have been imposed by the United Nations or the European Union.
 
(b)        Neither the Company nor any Controlled Entity (i) has violated, been found in violation of, or been charged or convicted under, any applicable U.S. Economic Sanctions Laws, Anti-Money Laundering Laws or Anti-Corruption Laws or (ii) to the Company’s knowledge, is under investigation by any Governmental Authority for possible violation of any U.S. Economic Sanctions Laws, Anti-Money Laundering Laws or Anti-Corruption Laws.
 
(c)          No part of the proceeds from the sale of the Notes hereunder:
 
(i)          constitutes or will constitute funds obtained on behalf of any Blocked Person or will otherwise be used by the Company or any Controlled Entity, directly or indirectly, (A) in connection with any investment in, or any transactions or dealings with, any Blocked Person, (B) for any purpose that would cause any Purchaser to be in violation of any U.S. Economic Sanctions Laws or (C) otherwise in violation of any U.S. Economic Sanctions Laws;
 
(ii)        will be used, directly or indirectly, in violation of, or cause any Purchaser to be in violation of, any applicable Anti-Money Laundering Laws; or
 
(iii)        will be used, directly or indirectly, for the purpose of making any improper payments, including bribes, to any Governmental Official or commercial counterparty in order to obtain, retain or direct business or obtain any improper advantage, in each case which would be in violation of, or cause any Purchaser to be in violation of, any applicable Anti-Corruption Laws.
 
(d)        The Company has established procedures and controls which it reasonably believes are adequate (and otherwise comply with applicable law) to ensure that the Company and each Controlled Entity is and will continue to be in compliance with all applicable U.S. Economic Sanctions Laws, Anti-Money Laundering Laws and Anti-Corruption Laws.

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Section 5.17     Status under Certain Statutes.  The Company is not an “investment company” registered or required to be registered under the Investment Company Act of 1940 or an “affiliated person” of an “investment company” or an “affiliated person” of such “affiliated person” or under the “control” of an “investment company” as such terms are defined in the Investment Company Act of 1940, as amended, and shall not become such an “investment company” or such an “affiliated person” or under such “control.”  The Company is not a “holding company” or a “subsidiary company” of a “holding company,” or an “affiliate” of a “holding company” or of a “subsidiary company” of a “holding company” within the meaning of the Public Utility Holding Company Act of 2005, as amended.  Based upon the immediately preceding sentence, neither the Company nor the issue and sale of the Notes or the issuance of the First Mortgage Bonds pursuant to the Supplemental Indenture is subject to regulation under the Public Utility Holding Company Act of 2005, as amended.  The Company is not subject to the ICC Termination Act of 1995, as amended, or the Federal Power Act, as amended.  The Company is not subject to any Federal or state statute or regulation limiting its ability to incur Debt except for rules and regulations of the New Jersey Board of Public Utilities.
 
Section 5.18     Environmental Matters.  Except as disclosed in Schedule 5.8, the Company does not have knowledge of any claim and has not received any notice of any claim, and no proceeding has been instituted raising any claim against the Company or any of its real properties now or formerly owned, leased or operated by the Company or other assets, alleging any damage to the environment or violation of any Environmental Laws, except, in each case, such as would not reasonably be expected to result in a Material Adverse Effect.  Except as otherwise disclosed in Schedule 5.8:
 
(a)         the Company does not have knowledge of any facts which would give rise to any claim, public or private, of violation of Environmental Laws or damage to the environment emanating from, occurring on or in any way related to real properties now or formerly owned, leased or operated by the Company or to other assets or their use, except, in each case, such as would not reasonably be expected to result in a Material Adverse Effect;
 
(b)         the Company has not stored any Hazardous Materials on real properties now or formerly owned, leased or operated by the Company or disposed of any Hazardous Materials in a manner contrary to any Environmental Laws in each case in any manner that would reasonably be expected to result in a Material Adverse Effect; and
 
(c)      all buildings on all real properties now owned, leased or operated by the Company are in compliance with applicable Environmental Laws, except where failure to comply would not reasonably be expected to result in a Material Adverse Effect.
 
Section 5.19       Perfection of Liens.  (a) Each of the Mortgage Indenture and the Supplemental Indenture has been duly recorded and filed in each place in which such recording or filing is required to protect and preserve the Lien of the Mortgage Indenture and the Supplemental Indenture, as the case may be, in and to the Trust Estate and such Lien constitutes a valid, fully perfected and continuing first priority Lien in and to, all right, title and interest of the Company in the Trust Estate, subject only to Permitted Encumbrances (as defined in the Mortgage Indenture), and all taxes and recording or filing fees required to be paid in connection with the execution, recording or filing of the Mortgage Indenture and the Supplemental Indenture have been duly paid; and

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(b)       The Lien of the Collateral Agent in the First Mortgage Bonds constitutes a valid, fully perfected and continuing first priority Lien, subject only to Permitted Encumbrances (as defined in the Mortgage Indenture).
 
Section 5.20        First Mortgage Bonds Pari Passu.  The Company’s obligations under the Supplemental Indenture and the First Mortgage Bonds rank pari passu in right of payment, without preference or priority, with its obligations under each other series of first mortgage bonds issued and outstanding under the Mortgage Indenture.
 
Section 5.21        No Event of Default.  No “Event of Default” under the Mortgage Indenture exists on the date of execution and delivery of this Agreement or, upon the execution and delivery thereof, the Supplemental Indenture, or will exist immediately after giving effect to the transactions contemplated by this Agreement or the Supplemental Indenture and the applications of the proceeds from the issue and sale of the Notes and the issuance of the First Mortgage Bonds.
 
Section 6.
Representations of the Purchasers.
 
Section 6.1         Purchase for Investment.  Each Purchaser severally represents that it is purchasing the Notes for its own account or for one or more separate accounts maintained by such Purchaser or for the account of one or more pension or trust funds and not with a view to the distribution thereof, provided that the disposition of such Purchaser’s or such pension or trust fund’s property shall at all times be within such Purchaser’s or such pension or trust fund’s control.  Each Purchaser represents that it is an “accredited investor,” as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act.  Each Purchaser understands that the Notes have not been registered under the Securities Act and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available, except under circumstances where neither such registration nor such an exemption is required by law, and that the Company is not required to register the Notes.  Each Purchaser also represents that the Company has made available to it, a reasonable time prior to the consummation of the transactions contemplated hereby, the opportunity to ask questions and receive answers concerning the terms and conditions of the offering of the Notes that it is purchasing or shall purchase and to obtain any additional information which the Company possesses or could acquire without unreasonable effort or expense; provided that the foregoing shall not be construed as limiting the ability of any Purchaser to rely on the representations and warranties contained herein.
 
Section 6.2         Source of Funds.  Each Purchaser severally represents that at least one of the following statements is an accurate representation as to each source of funds (a “Source”) to be used by such Purchaser to pay the purchase price of the Notes to be purchased by such Purchaser hereunder:
 
(a)         the Source is an “insurance company general account” (as the term is defined in the United States Department of Labor’s Prohibited Transaction Exemption (“PTE”) 95-60) in respect of which the reserves and liabilities (as defined by the annual statement for life insurance companies approved by the NAIC (the “NAIC Annual Statement”)) for the general account contract(s) held by or on behalf of any employee benefit plan together with the amount of the reserves and liabilities for the general account contract(s) held by or on behalf of any other employee benefit plans maintained by the same employer (or affiliate thereof as defined in PTE 95-60) or by the same employee organization in the general account do not exceed 10% of the total reserves and liabilities of the general account (exclusive of separate account liabilities) plus surplus as set forth in the NAIC Annual Statement filed with such Purchaser’s state of domicile; or

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(b)       the Source is a separate account that is maintained solely in connection with such Purchaser’s fixed contractual obligations under which the amounts payable, or credited, to any employee benefit plan (or its related trust) that has any interest in such separate account (or to any participant or beneficiary of such plan (including any annuitant)) are not affected in any manner by the investment performance of the separate account; or
 
(c)        the Source is either (i) an insurance company pooled separate account, within the meaning of PTE 90-1 or (ii) a bank collective investment fund, within the meaning of PTE 91-38 and, except as disclosed by such Purchaser to the Company in writing pursuant to this clause (c), no employee benefit plan or group of plans maintained by the same employer or employee organization beneficially owns more than 10% of all assets allocated to such pooled separate account or collective investment fund; or
 
(d)        the Source constitutes assets of an “investment fund” (within the meaning of Part VI of PTE 84-14 (the “QPAM Exemption”)) managed by a “qualified professional asset manager” or “QPAM” (within the meaning of Part VI of the QPAM Exemption), no employee benefit plan’s assets that are managed by the QPAM in such investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same employee organization and managed by such QPAM, represent more than 20% of the total client assets managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a Person controlling or controlled by the QPAM maintains an ownership interest in the Company that would cause the QPAM and the Company to be “related” within the meaning of Part VI(h) of the QPAM Exemption and (i) the identity of such QPAM and (ii) the names of any employee benefit plans whose assets in the investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same employee organization, represent 10% or more of the assets of such investment fund, have been disclosed to the Company in writing pursuant to this clause (d); or
 
(e)          the Source constitutes assets of a “plan(s)” (within the meaning of Part IV(h) of PTE 96-23 (the “INHAM Exemption”)) managed by an “in-house asset manager” or “INHAM” (within the meaning of Part IV(a) of the INHAM Exemption), the conditions of Part I(a), (g) and (h) of the INHAM Exemption are satisfied, neither the INHAM nor a Person controlling or controlled by the INHAM (applying the definition of “control” in Part IV(d)(3) of the INHAM Exemption) owns a 10% or more interest in the Company and (i) the identity of such INHAM and (ii) the name(s) of the employee benefit plan(s) whose assets constitute the Source have been disclosed to the Company in writing pursuant to this clause (e); or

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(f)          the Source is a governmental plan; or
 
(g)        the Source is one or more employee benefit plans, or a separate account or trust fund comprised of one or more employee benefit plans, each of which has been identified to the Company in writing pursuant to this clause (g); or
 
(h)        the Source does not include assets of (i) any employee benefit plan, other than a plan exempt from the coverage of ERISA, or (ii) any “plan” as defined in Section 4975(e)(1) of the Code.
 
As used in this Section 6.2, the terms “employee benefit plan,” “governmental plan,” and “separate account” shall have the respective meanings assigned to such terms in section 3 of ERISA.
 
Section 7.
Information as to Company.
 
Section 7.1          Financial and Business Information.  The Company shall deliver to each holder of Notes that is an Institutional Investor:
 
(a)         Quarterly Statements — within 60 days after the end of each quarterly fiscal period in each fiscal year of the Company (other than the last quarterly fiscal period of each such fiscal year), duplicate copies of:
 
(1)        a balance sheet of the Company as of the end of such quarter, and
 
(2)        statements of income, changes in shareholders’ equity and cash flows of the Company for such quarter and (in the case of the second and third quarters) for the portion of the fiscal year ending with such quarter,
 
setting forth in each case in comparative form the figures for the corresponding periods in the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP applicable to quarterly financial statements generally, and certified by a Senior Financial Officer as fairly presenting, in all material respects, the financial position of the companies being reported on and their results of operations and cash flows, subject to changes resulting from normal year-end adjustments;
 
(b)         Annual Statements — within 120 days after the end of each fiscal year of the Company, duplicate copies of:
 
(1)           a balance sheet of the Company as of the end of such year, and
 
(2)           statements of income, changes in shareholders’ equity and cash flows of the Company, for such year,

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setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP, and accompanied by an opinion thereon (without a “going concern” or similar qualification or exception and without any qualification or exception as to the scope of the audit on which such opinion is based) of independent certified public accountants of recognized national standing, which opinion shall state that such financial statements present fairly, in all material respects, the financial position of the companies being reported upon and their results of operations and cash flows and have been prepared in conformity with GAAP, and that the examination of such accountants in connection with such financial statements has been made in accordance with generally accepted auditing standards, and that such audit provides a reasonable basis for such opinion in the circumstances;
 
(c)         SEC and Other Reports — with reasonable promptness, upon their becoming available, one copy of (1) each financial statement, report, notice or proxy statement sent by the Company to its principal lending banks as a whole (excluding information sent to such banks in the ordinary course of administration of a bank facility, such as information relating to pricing and borrowing availability) or to its public securities holders generally and (2) each regular or periodic report, each registration statement that shall have become effective (without exhibits except as expressly requested by such holder), and each final prospectus and all amendments thereto filed by the Company with the Securities and Exchange Commission, excluding in any event confidential correspondence delivered to the Securities and Exchange Commission;
 
(d)        Notice of Default or Event of Default — with reasonable promptness, and in any event within five days after a Responsible Officer becoming aware of the existence of any Default or Event of Default, a written notice specifying the nature and period of existence thereof and what action the Company is taking or proposes to take with respect thereto;
 
(e)      ERISA Matters — with reasonable promptness, and in any event within five days after a Responsible Officer becoming aware of any of the following, a written notice setting forth the nature thereof and the action, if any, that the Company or an ERISA Affiliate proposes to take with respect thereto:
 
(1)         with respect to any Plan, the occurrence of any reportable event, as defined in section 4043(c) of ERISA and the regulations thereunder, for which notice thereof has not been waived pursuant to such regulations as in effect on the date hereof; or
 
(2)        the taking by the PBGC of steps to institute, or the threatening in writing by the PBGC of the institution of, proceedings under section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or the receipt by the Company or any ERISA Affiliate of a notice from a Multiemployer Plan that such action has been taken by the PBGC with respect to such Multiemployer Plan; or

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(3)       the occurrence of any event or transaction that results in the incurrence of any liability by the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans with respect to any Plan, or in the imposition of any Lien under section 430 of the Code or section 4068 of ERISA or any successor thereto, on any of the rights, properties or assets of the Company or any ERISA Affiliate, if such liability or Lien, taken together with any other such liabilities or Liens then existing, would reasonably be expected to have a Material Adverse Effect; and
 
(f)         Requested Information — with reasonable promptness, such other data and information relating to the business, operations, affairs, financial condition, assets or properties of the Company or relating to the ability of the Company to perform its obligations hereunder, under the Notes, the Mortgage Indenture (including the Supplemental Indenture), the First Mortgage Bond Documents to which the Company is a party and the First Mortgage Bonds, as from time to time may be reasonably requested by any such holder of Notes.
 
Section 7.2          Officer’s Certificate.  Each set of financial statements delivered to a holder of Notes pursuant to Section 7.1(a) or Section 7.1(b) hereof shall be accompanied by a certificate of a Senior Financial Officer setting forth:
 
(a)         Covenant Compliance — the information (including reasonably detailed calculations) required in order to establish whether the Company was in compliance with the requirements of Section 10.2 through Section 10.5, inclusive, and Section 10.9 during the quarterly or annual period covered by the statements then being furnished (including with respect to each such Section, where applicable, the calculations of the maximum or minimum amount, ratio or percentage, as the case may be, permissible under the terms of such Sections, and the calculation of the amount, ratio or percentage then in existence).  In the event that the Company has made an election to measure any financial liability using fair value (which election is being disregarded for purposes of determining compliance with this Agreement pursuant to Section 22.4) as to the period covered by any such financial statement, such Senior Financial Officer’s certificate as to such period shall include a reconciliation from GAAP with respect to such election; and
 
(b)        Event of Default — a statement that such Senior Financial Officer has reviewed the relevant terms hereof, the Mortgage Indenture (including the Supplemental Indenture), and the First Mortgage Bond Documents to which the Company is a party, and has made, or caused to be made, under his or her supervision, a review of the transactions and conditions of the Company from the beginning of the quarterly or annual period covered by the statements then being furnished to the date of the certificate and that such review shall not have disclosed the existence during such period of any condition or event that constitutes a Default or an Event of Default that is continuing as of the end of such quarterly or annual period, as the case may be, and, if any such condition or event then exists (including, without limitation, any such event or condition resulting from the failure of the Company to comply with any Environmental Law), specifying the nature and period of existence thereof and what action the Company shall have taken or proposes to take with respect thereto.

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Section 7.3       Inspection.  The Company shall permit the representatives of each holder of Notes that is an Institutional Investor:
 
(a)         No Default — if no Default under Section 11(b) or an Event of Default then exists, at the expense of such Purchaser or such holder and upon reasonable prior written notice to the Company, to visit the principal executive office of the Company, to discuss the affairs, finances and accounts of the Company with the Company’s officers, and, with the consent of the Company (which consent will not be unreasonably withheld) to visit the other offices and properties of the Company, all at such reasonable times during normal business hours and as often as may be reasonably requested in writing; and
 
(b)        Default — if a Default under Section 11(b) or an Event of Default then exists, at the expense of the Company, upon prior written notice to the Company,  to visit and inspect any of the offices or properties of the Company, to examine all its books of account, records, reports and other papers, to make copies and extracts therefrom, and to discuss its affairs, finances and accounts with its officers and independent public accountants (and by this provision the Company authorizes said accountants to discuss the affairs, finances and accounts of the Company), all at such times during normal business hours and as often as may be requested.
 
Section 7.4        Electronic Delivery.  Financial statements, opinions of independent certified public accountants, other information and Officer’s Certificates that are required to be delivered by the Company pursuant to Sections 7.1(a), (b) or (c) and Section 7.2 shall be deemed to have been delivered if the Company satisfies any of the following requirements with respect thereto:
 
(a)         such financial statements satisfying the requirements of Section 7.1(a) or (b) and related Officer’s Certificate satisfying the requirements of Section 7.2 and any other information required under Section 7.1(c) are delivered to each holder of a Note by e-mail at the e-mail address set forth in Schedule A or as communicated from time to time in a separate writing delivered to the Company;
 
(b)        the Company shall have timely filed such Form 10–Q or Form 10–K, satisfying the requirements of Section 7.1(a) or Section 7.1(b), as the case may be, with the SEC on EDGAR and shall have made such form and the related Officer’s Certificate satisfying the requirements of Section 7.2 available on its home page on the internet, which is located at http://investor.njresources.com/njng-reports.cfm as of the date hereof;
 
(c)       such financial statements satisfying the requirements of Section 7.1(a) or Section 7.1(b) and related Officer’s Certificate(s) satisfying the requirements of Section 7.2 and any other information required under Section 7.1(c) are timely posted by or on behalf of the Company on IntraLinks or on any other similar website to which each holder of Notes has free access; or

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(d)         the Company shall have timely filed any of the items referred to in Section 7.1(c) with the SEC on EDGAR and shall have made such items available on its home page on the internet or on IntraLinks or on any other similar website to which each holder of Notes has free access;
 
provided however, that in no case shall access to such financial statements, other information and Officer’s Certificates be conditioned upon any waiver or other agreement or consent (other than confidentiality provisions consistent with Section 20 of this Agreement); provided further, that in the case of any of clauses (b), (c) or (d), the Company shall have given each holder of a Note prior written notice, which may be by e-mail or in accordance with Section 18, of such posting or filing in connection with each delivery, provided further, that upon request of any holder to receive paper copies of such forms, financial statements, other information and Officer’s Certificates or to receive them by e-mail, the Company will promptly e-mail them or deliver such paper copies, as the case may be, to such holder.
 
Section 8.
Prepayment of the Notes.
 
Section 8.1       Required Prepayments.  Subject to Section 8.2, the Notes shall not be subject to required prepayments.  The entire unpaid principal balance of the Notes shall be due and payable on the stated maturity date thereof.
 
Section 8.2          Required Prepayment—Condemnation; Required Sale.  In the event that, pursuant to the terms of section 8.08 of the Mortgage Indenture, the First Mortgage Bonds are called for redemption, in whole or in part, then the Company shall, (i) at least 30 days and not more than 60 days prior to the redemption date of the First Mortgage Bonds pursuant to section 8.08 of the Mortgage Indenture, give written notice to the Collateral Agent, as the registered holder of the First Mortgage Bonds, and each holder of Notes, of the redemption of all or a portion of the First Mortgage Bonds and the corresponding prepayment of all or a portion of the Notes, and (ii) on the redemption date of the First Mortgage Bonds so called for redemption, prepay the related Notes in an aggregate principal amount equal to the amount of First Mortgage Bonds called for redemption at a prepayment price equal to 100% of the First Mortgage Bonds being redeemed, together with interest accrued thereon to the date of such prepayment, but without any Make-Whole Amount.  The notice described in (i) above shall specify the prepayment date (which shall be a Business Day), the aggregate principal amount of the Notes to be prepaid on such date, the principal amount of each Note held by such holder to be prepaid (determined in accordance with Section 8.4), and the interest to be paid on the prepayment date with respect to such principal amount being prepaid.

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Section 8.3         Optional Prepayments with and Without Make-Whole Amount.  The Company may, at its option, upon notice as provided below, prepay at any time all, or from time to time any part of, the Notes, in an amount not less than $1,000,000 in aggregate principal amount of the Notes then outstanding in the case of a partial prepayment, at 100% of the aggregate principal amount so prepaid together with interest accrued thereon to the date of such prepayment and the Make-Whole Amount, if any, determined for the prepayment date with respect to such principal amount; provided, that at any time on or after April 24, 2052, the Company may, at its option, upon notice as provided below, prepay all or any part of the Notes at 100% of the aggregate principal amount so prepaid together with interest accrued thereon to the date of such prepayment.  The Company will give each holder of Notes written notice of each optional prepayment under this Section 8.3 not less than 30 days and not more than 60 days prior to the date fixed for such prepayment.  Each such notice shall specify such date (which shall be a Business Day), the aggregate principal amount of the Notes to be prepaid on such date, the principal amount of each Note held by such holder to be prepaid (determined in accordance with Section 8.4), and the interest to be paid on the prepayment date with respect to such principal amount being prepaid, and shall be accompanied by a certificate of a Senior Financial Officer as to the estimated Make-Whole Amount, if any, due in connection with such prepayment (calculated as if the date of such notice were the date of the prepayment), setting forth the details of such computation.  Two Business Days prior to such prepayment, the Company shall deliver to each holder of Notes a certificate of a Senior Financial Officer specifying the calculation of such Make-Whole Amount, if any, as of the specified prepayment date.
 
Section 8.4         Allocation of Partial Prepayments.  In the case of each partial prepayment of the Notes pursuant to Section 8.2 or Section 8.3 hereof, the principal amount of the Notes to be prepaid shall be allocated among all of the Notes at the time outstanding in proportion, as nearly as reasonably practicable, to the respective unpaid principal amounts thereof not theretofore called for prepayment.  All partial prepayments or purchases made pursuant to Section 8.6(b), Section 8.8 or Section 8.9 shall be applied only to the Notes of the holders who have elected to participate in such prepayment or purchase.
 
Section 8.5         Maturity; Surrender, Etc.  In the case of each prepayment of Notes pursuant to this Section 8, the principal amount of each Note to be prepaid shall mature and become due and payable on the date fixed for such prepayment (which shall be a Business Day), together with interest on such principal amount accrued to such date and the applicable Make-Whole Amount, if any.  From and after such date, unless the Company shall fail to pay such principal amount when so due and payable, together with the interest and Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall cease to accrue.  Any Note paid or prepaid in full shall be surrendered to the Company and cancelled and shall not be reissued, and no Note shall be issued in lieu of any prepaid principal amount of any Note.
 
Section 8.6         Purchase of Notes.  The Company will not, and will not permit any Affiliate to, purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding Notes except (a) upon the payment or prepayment of the Notes in accordance with the terms of this Agreement and the Notes or (b) pursuant to an offer to purchase made by the Company or an Affiliate pro rata to the holders of all Notes at the time outstanding upon the same terms and conditions.  Any such offer shall provide each holder of the Notes with sufficient information to enable it to make an informed decision with respect to such offer and shall remain open for at least 15 Business Days.  If the holders of more than 50% of the principal amount of the Notes then outstanding accept such offer, the Company shall promptly notify the remaining holders of the Notes of such fact and the expiration date for the acceptance by holders of Notes of such offer shall be extended by the number of days necessary to give each such remaining holder at least 10 Business Days from its receipt of such notice to accept such offer.  The Company will promptly cancel all Notes acquired by it or any Affiliate pursuant to any payment, prepayment or purchase of Notes pursuant to any provision of this Agreement and no Notes may be issued in substitution or exchange for any such Notes.

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Section 8.7          Make-Whole Amount for Notes.  The term “Make-Whole Amount” shall mean, with respect to any Note, an amount equal to the excess, if any, of the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of such Note over the amount of such Called Principal, provided that the Make-Whole Amount may in no event be less than zero.  For the purposes of determining the Make-Whole Amount, the following terms have the following meanings:
 
“Called Principal” shall mean, with respect to any Note, the principal of such Note that is to be prepaid pursuant to Section 8.3 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.
 
“Discounted Value” shall mean, with respect to the Called Principal of any Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (applied on the same periodic basis as that on which interest on the Notes is payable) equal to the Reinvestment Yield with respect to such Called Principal.
 
“Reinvestment Yield” shall mean, with respect to the Called Principal of any Note, 0.50% over the yield to maturity implied by the ask-side yield(s) reported as of 10:00 a.m. (New York, New York time) on the second Business Day preceding the Settlement Date with respect to such Called Principal, on the display designated as “Page PX1”  (or such other display as may replace Page PX1) on Bloomberg Financial Markets for the most recently issued actively traded on-the-run U.S. Treasury securities (“Reported”) having a maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date.  If there are no such U.S. Treasury securities Reported having a maturity equal to such Remaining Average Life, then such implied yield to maturity will be determined by (a) converting U.S. Treasury bill quotations to bond equivalent yields in accordance with accepted financial practice and (b) interpolating linearly between the yields Reported for the applicable most recently issued actively traded on-the-run U.S. Treasury securities with the maturities (1) closest to and greater than such Remaining Average Life and (2) closest to and less than such Remaining Average Life.  The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the applicable Note.
 
If such yields are not Reported or the yields Reported as of such time are not ascertainable (including by way of interpolation), then “Reinvestment Yield” means, with respect to the Called Principal of any Note, 0.50% over the yield to maturity implied by the U.S. Treasury constant maturity yields reported, for the latest day for which such yields have been so reported as of the second Business Day preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release H.15 (or any comparable successor publication) for the U.S. Treasury constant maturity having a term equal to the Remaining Average Life of such Called Principal as of such Settlement Date.  If there is no such U.S. Treasury constant maturity having a term equal to such Remaining Average Life, such implied yield to maturity will be determined by interpolating linearly between (1) the U.S. Treasury constant maturity so reported with the term closest to and greater than such Remaining Average Life and (2) the U.S. Treasury constant maturity so reported with the term closest to and less than such Remaining Average Life.  The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the applicable Note.

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“Remaining Average Life” shall mean, with respect to any Called Principal, the number of years obtained by dividing (i) such Called Principal into (ii) the sum of the products obtained by multiplying (a) the principal component of each Remaining Scheduled Payment with respect to such Called Principal by (b) the number of years, computed on the basis of a 360-day year composed of twelve 30-day months and calculated to two decimal places, that will elapse between the Settlement Date with respect to such Called Principal and the scheduled due date of such Remaining Scheduled Payment.
 
“Remaining Scheduled Payments” shall mean, with respect to the Called Principal of any Note, all payments of such Called Principal and interest thereon that would be due after the Settlement Date with respect to such Called Principal and if no payment of such Called Principal were made prior to its scheduled due date, provided that if such Settlement Date is not a date on which interest payments are due to be made under the terms of the Notes, then the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued to such Settlement Date and required to be paid on such Settlement Date pursuant to Section 8.3 or Section 12.1.
 
“Settlement Date” shall mean, with respect to the Called Principal of any Note, the date on which such Called Principal is to be prepaid pursuant to Section 8.3 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.
 
Section 8.8           Offer to Prepay upon Asset Disposition.
 
(a)         Notice and Offer.  In the event of a Transfer where the Company has elected to apply all or a portion of the Net Proceeds Amount of such Transfer as a Debt Prepayment Application pursuant to Section 10.5(b), the Company shall, no later than the 305th day following the date of such Transfer, give written notice of such event (an “Asset Disposition Prepayment Event”) to each holder of Notes.  Such notice shall contain, and shall constitute, an irrevocable offer to prepay a Ratable Portion of the Notes held by such holder on the date (which shall be a Business Day) specified in such notice (the “Asset Disposition Prepayment Date”) which date shall be not less than 30 days and not more than 60 days after such notice.
 
(b)        Acceptance and Payment.  A holder of Notes may accept or reject the offer to prepay pursuant to this Section 8.8 by causing a notice of such acceptance or rejection to be delivered to the Company at least 10 days prior to the Asset Disposition Prepayment Date.  A failure by a holder of the Notes to respond to an offer to prepay made pursuant to this Section 8.8 shall be deemed to constitute a rejection of such offer by such holder.  If so accepted, such offered prepayment in respect of the Ratable Portion of the Notes of each holder that has accepted such offer shall be due and payable on the Asset Disposition Prepayment Date.  Such offered prepayment shall be made at 100% of the aggregate Ratable Portion of the Notes of each holder that has accepted such offer, together with interest on that portion of the Notes then being prepaid accrued to the Asset Disposition Prepayment Date, but without any Make-Whole Amount.  If any holder of a Note rejects or is deemed to have rejected such offer of prepayment, the Company may use the Ratable Portion for such Note for general corporate purposes.

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(c)         Officer’s Certificate.  Each offer to prepay the Notes pursuant to this Section 8.8 shall be accompanied by a certificate, executed by a Senior Financial Officer and dated the date of such offer, specifying: (1) the Asset Disposition Prepayment Date; (2) that such offer is being made pursuant to this Section 8.8 and that the failure by a holder to respond to such offer by the deadline established in Section 8.8(b) shall result in such offer to such holder being deemed rejected; (3) the Ratable Portion of each such Note offered to be prepaid; (4) the interest that would be due on the Ratable Portion of each such Note offered to be prepaid, accrued to the Asset Disposition Prepayment Date; (5) that the conditions of this Section 8.8 have been satisfied and (6) in reasonable detail, a description of the nature and date of the Asset Disposition Prepayment Event giving rise to such offer of prepayment.
 
Section 8.9           Offer to Prepay in the Event of a Change of Control.
 
(a)        Notice of Change of Control.  The Company will, at least 30 days prior to any Change of Control, give written notice of such Change of Control to each holder of the Notes.  Such notice shall contain and constitute an offer to prepay the Notes as described in Section 8.9(c) and shall be accompanied by the certificate described in Section 8.9(f).
 
(b)        Notice of Acceptance of Offer under Section 8.9(a).  If the Company shall at any time receive an acceptance to an offer to prepay Notes under Section 8.9(a) from some, but not all, of the holders of the Notes, then the Company will, within two Business Days after the receipt of such acceptance, give written notice of such acceptance to each other holder of the Notes.
 
(c)        Offer to Prepay Notes.  The offer to prepay Notes contemplated by Section 8.9(a) shall be an offer to prepay, in accordance with and subject to this Section 8.9, all, but not less than all, of the Notes held by each holder (in this case only, “holder” in respect of any Note registered in the name of a nominee for a disclosed beneficial owner shall mean such beneficial owner) at the time of the occurrence of the Change of Control.
 
(d)         Rejection; Acceptance.  A holder of Notes may accept or reject the offer to prepay made pursuant to this Section 8.9 by causing a notice of such acceptance or rejection to be delivered to the Company prior to the prepayment date.  A failure by a holder of Notes to so respond to an offer to prepay made pursuant to this Section 8.9(d) shall be deemed to constitute an acceptance of such offer by such holder.
 
(e)         Prepayment.  Prepayment of the Notes to be prepaid pursuant to this Section 8.9 shall be at 100% of the principal amount of such Notes, together with interest on such Notes accrued to the date of prepayment, but without any Make-Whole Amount.  The prepayment shall be made at the time of occurrence of a Change of Control.

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(f)          Officer’s Certificate.  Each offer to prepay the Notes pursuant to this Section 8.9 shall be accompanied by a certificate, executed by a Responsible Officer of the Company and dated the date of such offer, specifying (i) the proposed prepayment date (which shall be the date of the Change of Control), (ii) that such offer is made pursuant to this Section 8.9, (iii) the principal amount of each Note offered to be prepaid, (iv) the interest that would be due on each Note offered to be prepaid, accrued to the prepayment date, (v) that the conditions of this Section 8.9 have been fulfilled, and (vi) in reasonable detail, the nature and anticipated date of the Change of Control.
 
Section 9.
Affirmative Covenants.
 
So long as any of the Notes are outstanding, the Company covenants that:
 
Section 9.1          Compliance with Laws.  Without limiting Section 10.13, the Company will comply with all laws, ordinances or governmental rules or regulations to which the Company is subject, including, without limitation, ERISA, Environmental Laws, the USA PATRIOT Act and the other laws and regulations that are referred to in Section 5.16, and will obtain and maintain in effect all licenses, certificates, permits, franchises and other governmental authorizations necessary to the ownership of its properties or to the conduct of its businesses, in each case to the extent necessary to ensure that non-compliance with such laws, ordinances or governmental rules or regulations or failures to obtain or maintain in effect such licenses, certificates, permits, franchises and other governmental authorizations would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
 
Section 9.2          Insurance.  The Company will maintain, with financially sound and reputable insurers, insurance with respect to its properties and businesses against such casualties and contingencies, of such types, on such terms and in such amounts (including deductibles, co-insurance and self-insurance, if adequate reserves are maintained with respect thereto) as is customary in the case of entities of established reputations engaged in the same or a similar business and in the same industry and similarly situated.
 
Section 9.3           Maintenance of Properties.  The Company will maintain and keep, or cause to be maintained and kept, its properties in good repair, working order and condition (other than ordinary wear and tear), so that the business carried on in connection therewith may be properly conducted at all times, provided that this Section 9.3 shall not prevent the Company from discontinuing the operation and the maintenance of any of its properties if such discontinuance is desirable in the conduct of its business and the Company has concluded that such discontinuance would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

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Section 9.4        Payment of Taxes and Claims.  The Company will file all income tax or similar tax returns required to be filed in any jurisdiction and pay and discharge all taxes shown to be due and payable on such returns and all other taxes, assessments, governmental charges or levies payable by the Company, to the extent the same have become due and payable and before they have become delinquent, provided that the Company need not pay any such tax, assessment, governmental charge or levy if (1) the amount, applicability or validity thereof is contested by the Company on a timely basis in good faith and in appropriate proceedings, and the Company has established adequate reserves therefor in accordance with GAAP on the books of the Company or (2) the nonpayment of all such taxes, assessments, governmental charges and levies would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
 
Section 9.5         Corporate Existence, Etc.  Subject to Section 10.6, the Company will at all times preserve and keep in full force and effect its corporate existence.  Subject to Sections 10.5 and 10.6, the Company will at all times preserve and keep in full force and effect all rights and franchises of the Company unless, in the good faith judgment of the Company, the termination of or failure to preserve and keep in full force and effect such right or franchise would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
 
Section 9.6          Regulated Nature.  The Company will at all times be and remain a Person that is subject under law to regulation by a public utility commission or other governmental regulatory body with oversight responsibilities for utilities.
 
Section 9.7         Evidence of Recorded Supplemental Indentures.  As soon as commercially practicable and without limiting Section 4.12(c), the Company will seek to obtain evidence of recorded copies of the Supplemental Indenture, and the Company shall cause satisfactory evidence thereof to be promptly furnished to each holder of Notes and special counsel to the holders of Notes.
 
Section 10.        Negative Covenants.
 
So long as any of the Notes are outstanding, the Company covenants that:
 
Section 10.1         [Reserved].
 
Section 10.2       Liens.  The Company will not directly or indirectly create, incur, assume or permit to exist (upon the happening of a contingency or otherwise) any Lien on or with respect to any property or asset (including, without limitation, any document or instrument in respect of goods or accounts receivable) of the Company, whether now owned or held or hereafter acquired, or any income or profits therefrom, or assign or otherwise convey any right to receive income or profits, except:
 
(a)         Liens for taxes, assessments or other governmental charges which are not yet due and payable or the payment of which is not at the time required by Section 9.4;
 
(b)       statutory Liens of landlords and Liens of carriers, warehousemen, mechanics, materialmen and other similar Liens, in each case, incurred in the ordinary course of business for sums not yet due and payable or the payment of which is not at the time required by Section 9.4;

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(c)         Liens (other than any Lien imposed by section 430 of the Code or section 4068 of ERISA or any successor thereto) incurred or deposits made in the ordinary course of business (1) in connection with workers’ compensation, unemployment insurance and other types of social security or retirement benefits, or (2) to secure (or to obtain letters of credit that secure) the performance of tenders, statutory obligations, surety bonds, appeal bonds, bids, leases (other than Capital Leases), performance bonds, purchase, construction or sales contracts, and other similar obligations, in each case not incurred or made in connection with the borrowing of money, the obtaining of advances or credit or the payment of the deferred purchase price of property;
 
(d)         subject to Section 11(k), any attachment or judgment Lien, unless the judgment it secures shall not, within 30 days after the entry thereof, have been discharged or execution thereof stayed pending appeal, or shall not have been discharged within 30 days after the expiration of any such stay;
 
(e)        leases or subleases granted to others, easements, rights-of-way, restrictions and other similar charges or encumbrances or minor survey exceptions, in each case incidental to, and not interfering with, the ordinary conduct of the business of the Company, provided that such Liens do not, in the aggregate, materially detract from the value of such property;
 
(f)          [Reserved];
 
(g)         Liens existing on the date of the Closing and described on Schedule 5.15 hereto (other than Liens on “Excepted Property” of the Company as defined in the Mortgage Indenture as in effect on the date of the Closing);
 
(h)         [Reserved];
 
(i)        any Lien created to secure all or any part of the purchase price, or to secure Debt incurred or assumed to pay all or any part of the purchase price or cost of construction, of property (or any improvement thereon) acquired or constructed by the Company after the date of the Closing, provided that:
 
(1)         any such Lien shall extend solely to the item or items of such property (or improvement thereon) so acquired or constructed and, if required by the terms of the instrument originally creating such Lien, other property (or improvement thereon) which is an improvement to or is acquired for specific use in connection with such acquired or constructed property (or improvement thereon) or which is real property being improved by such acquired or constructed property (or improvement thereon);
 
(2)        the principal amount of the Debt secured by any such Lien shall at no time exceed an amount equal to the lesser of (i) the cost to the Company of the property (or improvement thereon) so acquired or constructed and (ii) the Fair Market Value (as determined in good faith by one or more officers of the Company to whom authority to enter into the subject transaction has been delegated by the board of directors of the Company) of such property (or improvement thereon) at the time of such acquisition or construction; and

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(3)        any such Lien shall be created contemporaneously with, or within 180 days after, the acquisition or construction of such property;
 
(j)          any Lien existing on property of a Person immediately prior to its being consolidated with or merged into the Company, or any Lien existing on any property acquired by the Company at the time such property is so acquired (whether or not the Debt secured thereby shall have been assumed), provided that (1) no such Lien shall have been created or assumed in contemplation of such consolidation or merger or such acquisition of property, and (2) each such Lien shall extend solely to the item or items of property so acquired and, if required by the terms of the instrument originally creating such Lien (i) other property which is an improvement to or is acquired for specific use in connection with such acquired property or (ii) other property that does not constitute property or assets of the Company;
 
(k)        Liens on assets of the Company (other than Liens on “Excepted Property” as defined in the Mortgage Indenture as in effect on the date of the Closing) which Liens secure Debt outstanding as of the date of the Closing under the Mortgage Indenture and any additional Debt that is issued in accordance with Article Two of the Mortgage Indenture (as in effect on the date of the Closing); provided that such additional Debt shall not contain covenants, defaults and other terms and conditions more restrictive than or in addition to those contained in this Agreement;
 
(l)        any Lien renewing, extending or refunding any Lien permitted by paragraphs (g), (i), (j) or (k) of this Section 10.2, provided that (1) the principal amount of Debt secured by such Lien immediately prior to such extension, renewal or refunding is not increased or the maturity thereof reduced, (2) such Lien is not extended to any other property and (3) immediately after such extension, renewal or refunding no Default or Event of Default would exist; and
 
(m)        other Liens not otherwise permitted by paragraphs (a) through (l), inclusive, of this Section 10.2 securing Debt.
 
Section 10.3        Restricted Payments.  (a) The Company will not declare or make or incur any liability to declare or make any Restricted Payment unless immediately after giving effect to such action no Default or Event of Default would exist.
 
(b)         The Company will not declare a Restricted Payment that is not payable within 60 days of such declaration.
 
Section 10.4         [Reserved].

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Section 10.5       Sale of Assets, Etc.  (a) Except as permitted under Section 10.6, the Company will not make any Asset Disposition unless:
 
(1)       in the good faith opinion of the Company, the Asset Disposition is in the best interest of the Company;
 
(2)        immediately after giving effect to the Asset Disposition, no Default or Event of Default would exist; and
 
(3)         immediately after giving effect to the Asset Disposition the Disposition Value of all property that was the subject of any Asset Disposition occurring in the immediately preceding 12 consecutive month period would not exceed 10% of Tangible Assets as of the end of the then most recently ended fiscal year of the Company.
 
(b)         If the Net Proceeds Amount for any Transfer is, within 365 days after such Transfer, (1) applied to a Debt Prepayment Application, (2) applied to or would otherwise constitute a Property Reinvestment Application or (3) applied to any combination of the foregoing clauses (1) and (2), then such Transfer, only for the purpose of determining compliance with subsection (3) of Section 10.5(a) as of a date on or after the Net Proceeds Amount is so applied, shall be deemed not to be an Asset Disposition.
 
Section 10.6      Merger, Consolidation, Etc. The Company will not consolidate with or merge with any other Person or convey, transfer or lease all or substantially all of its assets in a single transaction or series of transactions to any Person, provided that the foregoing restriction does not apply to the consolidation or merger of the Company with, or the conveyance, transfer or lease of all or substantially all of the assets of the Company in a single transaction or series of transactions to, any Person so long as:
 
(a)        the successor formed by such consolidation or the survivor of such merger or the Person that acquires by conveyance, transfer or lease all or substantially all of the assets of the Company as an entirety, as the case may be (the “Successor Corporation”), shall be a solvent Person organized and existing under the laws of the United States or any State thereof (including the District of Columbia);
 
(b)      if the Company is not the Successor Corporation, (1) such Person shall have executed and delivered to each holder of the Notes its assumption of the due and punctual performance and observance of each covenant and condition of this Agreement and the Notes and the Mortgage Indenture (including the Supplemental Indenture), the First Mortgage Bond Documents to which it is a party and the First Mortgage Bonds (pursuant to such agreements or instruments as shall be reasonably satisfactory to the Required Holders), and (2) such Person shall have caused to be delivered to each Purchaser and each holder of the Notes an opinion of inside counsel to the Company, Troutman Pepper Hamilton Sanders LLP or another nationally recognized counsel, or other counsel reasonably satisfactory to the Required Holders, to the effect that all agreements or instruments effecting such assumption are enforceable in accordance with their terms and comply with the terms hereof (subject to bankruptcy, insolvency, fraudulent conveyance or similar laws affecting creditors’ rights generally, and general principles of equity (regardless of whether the application of such principles is considered in a proceeding in equity or at law) and subject to such other customary qualifications and exceptions for legal opinions of this type or as may be reasonably acceptable to the Required Holders); and

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(c)          immediately after giving effect to such transaction, no Default or Event of Default would exist.
 
No such conveyance, transfer or lease of all or substantially all of the assets of the Company shall have the effect of releasing the Company or any Successor Corporation that shall theretofore have become such in the manner prescribed in this Section 10.6 from its liability under this Agreement or the Notes or the Mortgage Indenture (including the Supplemental Indenture), the First Mortgage Bond Documents to which it is a party or the First Mortgage Bonds.
 
Section 10.7        [Reserved].
 
Section 10.8      Limitations on Subsidiaries, Partnerships and Joint Ventures.  The Company will not own or create directly or indirectly any Subsidiaries without the prior written consent of the Required Holders.  Without limiting the foregoing sentence, the Company shall not become or agree to become (a) a general or limited partner in any general or limited partnership, except that the Company may be a limited partner in a Permitted Related Business Opportunity, (b) a member or manager of, or hold a limited liability company interest in, a limited liability company, except that the Company may be a member or manager of, or hold limited liability company interests in a Permitted Related Business Opportunity or (c) a joint venturer or hold a joint venture interest in any joint venture, except that the Company may become a joint venturer in or hold a joint venture interest in any joint venture that is a Permitted Related Business Opportunity.
 
Section 10.9       Limitation on Certain Leases.  The Company will not engage in any off-balance sheet transaction (i.e., the liabilities in respect of which do not appear on the liability side of the balance sheet, with such balance sheet prepared in accordance with GAAP) providing the functional equivalent of borrowed money (including asset securitizations, sale/leasebacks or Synthetic Leases (other than any sale/leaseback transaction or Synthetic Lease entered into, in either case, with respect to meter assets and which transaction is otherwise permitted by this Agreement)) with liabilities in excess, in the aggregate for the Company as of any date of determination, of 5% of the Tangible Assets.
 
For purposes of this Section 10.9, the amount of any lease which is not a Capital Lease is the aggregate amount of minimum lease payments due pursuant to such lease for any non-cancelable portion of its term.
 
Section 10.10       Nature of Business.  The Company will not engage in any business if, as a result, the general nature of the business in which the Company would then be engaged would be substantially and materially changed from the general nature of the business in which the Company is engaged on the date hereof.

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Section 10.11      Transactions with Affiliates.  Except in the case of a Permitted Related Business Opportunity, the Company will not enter into, directly or indirectly, any Material transaction or group of related transactions (including, without limitation, the purchase, lease, sale or exchange of properties of any kind or the rendering of any service) with any Affiliate, except in the ordinary course and pursuant to the reasonable requirements of the Company’s business and upon fair and reasonable terms no less favorable to the Company than would be obtainable in a comparable arm’s-length transaction with a Person not an Affiliate.
 
Section 10.12       [Reserved].
 
Section 10.13      Economic Sanctions, Etc.  The Company will not, and will not permit any Controlled Entity to, (a) become (including by virtue of being owned or controlled by a Blocked Person), own or control a Blocked Person or (b) directly or indirectly have any investment in or engage in any dealing or transaction (including any investment, dealing or transaction involving the proceeds of the Notes) with any Person if such investment, dealing or transaction (i) would cause any holder or any affiliate of such holder to be in violation of, or subject to sanctions under, any law or regulation applicable to such holder, or (ii) is prohibited by or subject to sanctions under any U.S. Economic Sanctions Laws.
 
Section 11.
Events of Default.
 
An “Event of Default” shall exist if any of the following conditions or events shall occur and be continuing:
 
(a)         the Company defaults in the payment of any principal or Make-Whole Amount on any Note when the same becomes due and payable, whether at maturity or at a date fixed for prepayment or by declaration or otherwise; or
 
(b)        the Company defaults in the payment of any interest on any Note for more than five Business Days after the same becomes due and payable; or
 
(c)        the Company defaults in the performance of or compliance with any term contained in Section 9.6, Section 10.2 through Section 10.9, inclusive, or Section 10.13; or
 
(d)         the Company defaults in the performance of or compliance with any term contained herein (other than those referred to in paragraphs (a), (b) and (c) of this Section 11) and such default is not remedied within 30 days after the earlier of (1) a Responsible Officer obtaining actual knowledge of such default and (2) the Company receiving written notice of such default from any holder of a Note (any such written notice to be identified as a “notice of default” and to refer specifically to this paragraph (d) of Section 11); or
 
(e)         any representation or warranty made in writing by or on behalf of the Company or by any officer of the Company in this Agreement or in the Mortgage Indenture (including the Supplemental Indenture) or in any writing furnished in connection with the transactions contemplated hereby or thereby proves to have been false or incorrect in any material respect on the date as of which made; or

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(f)          (1) the Company is in default (as principal or as guarantor or other surety) in the payment of any principal of or premium or make-whole amount or interest on any Debt that is outstanding in an aggregate principal amount of at least $30,000,000 (or its equivalent in the relevant currency of payment) beyond any period of grace provided with respect thereto or (2) the Company is in default in the performance of or compliance with any term of any evidence of any Debt in an aggregate outstanding principal amount of at least $30,000,000 (or its equivalent in the relevant currency of payment) or of any mortgage, indenture or other agreement relating thereto or any other condition exists, and as a consequence of such default or condition such Debt has become, or has been declared (or one or more Persons are entitled to declare such Debt to be), due and payable before its stated maturity or before its regularly scheduled dates of payment or (3) as a consequence of the occurrence or continuation of any event or condition (other than the passage of time or the right of the holder of Debt to convert such Debt into equity interests), (i) the Company has become obligated to purchase or repay Debt before its regular maturity or before its regularly scheduled dates of payment in an aggregate outstanding principal amount of at least $30,000,000 (or its equivalent in the relevant currency of payment) or (ii) one or more Persons have the right to require the Company to purchase or repay such Debt; or
 
(g)       an “Event of Default” under the Mortgage Indenture shall have occurred and be continuing; provided, however, that anything in this Agreement to the contrary notwithstanding, the waiver or cure of such default under the Mortgage Indenture and the rescission and annulment of the consequences thereof under the Mortgage Indenture shall constitute a waiver of the corresponding Event of Default hereunder and a rescission and annulment of the consequences thereof hereunder; or
 
(h)       the Company is in default under the terms of any agreement involving any off-balance sheet transaction (including any asset securitization, sale/leaseback transaction or Synthetic Lease) with obligations in the aggregate thereunder for which the Company may be obligated in an amount in excess of $30,000,000 (or its equivalent in the relevant currency of payment), and such breach, default or event of default consists of the failure to pay (beyond any period of grace permitted with respect thereto) any obligation when due (whether at stated maturity, by acceleration or otherwise) or if such breach or default permits or causes the acceleration of any obligation or the termination of such agreement; or
 
(i)          the Company (1) is generally not paying, or admits in writing its inability to pay, its debts as they become due, (2) files, or consents by answer or otherwise to the filing against it of, a petition for relief or reorganization or arrangement or any other petition in bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency, reorganization, moratorium or other similar law of any jurisdiction, (3) makes an assignment for the benefit of its creditors, (4) consents to the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, (5) is adjudicated as insolvent or to be liquidated or (6) takes corporate action for the purpose of any of the foregoing; or

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(j)        a court or other Governmental Authority of competent jurisdiction enters an order appointing, without consent by the Company, a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, or constituting an order for relief or approving a petition for relief or reorganization or any other petition in bankruptcy or for liquidation or to take advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution, winding-up or liquidation of the Company, or any such petition shall be filed against the Company and such petition shall not be dismissed within 60 days; or
 
(k)         a final judgment or judgments for the payment of money aggregating in excess of $30,000,000 (or its equivalent in the relevant currency of payment) (exclusive of amounts fully covered by valid and collectible insurance in respect thereof subject to customary deductibles) are rendered against one or more of the Company and which judgments are not, within 45 days after entry thereof (or such shorter period as judgment creditors are stayed pursuant to applicable law from executing on such judgment or judgments), bonded, discharged or stayed pending appeal, or are not discharged within 45 days after the expiration of such stay (or such shorter period as judgment creditors are stayed pursuant to applicable law from executing on such judgment or judgments); or
 
(l)          if (1) any Plan shall fail to satisfy the minimum funding standards of ERISA or the Code for any plan year or a waiver of such standards or extension of any amortization period is sought or granted under section 412 of the Code, (2) a notice of intent to terminate any Plan on other than a standard basis shall have been filed with the PBGC by the Company or any ERISA Affiliate or the PBGC shall have notified the Company or any ERISA Affiliate of the institution of proceedings under section 4042 of ERISA to terminate or appoint a trustee to administer any Plan or that a Plan is the subject of any such proceedings, (3) the present value of the aggregate “amount of unfunded benefit liabilities” within the meaning of section 4001(a)(18) of ERISA under all Plans (determined in accordance with Title IV of ERISA as of the end of the most recent Plan year on the basis of the actuarial assumptions specified for funding purposes in the most recent actuarial valuation), shall exceed the aggregate actuarial value of their assets by more than $25,000,000, (4) the Company or any ERISA Affiliate shall have incurred any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans with respect to any Plan, other than for claims for benefits and funding obligations in the ordinary course, (5) the Company or any ERISA Affiliate incurs withdrawal liability with respect to any Multiemployer Plan or (6) the Company or any ERISA Affiliate establishes or amends any employee welfare benefit plan that provides post-employment welfare benefits in a manner that would increase the liability of the Company or any ERISA Affiliate thereunder; and any such event or events described in clauses (1) through (6) above, either individually or together with any other such event or events, would reasonably be expected to have a Material Adverse Effect.
 
As used in Section 11(l), the terms “employee benefit plan” and “employee welfare benefit plan” shall have the respective meanings assigned to such terms in section 3 of ERISA.

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Section 12.
Remedies on Default, Etc.
 
Section 12.1        Acceleration.  (a) If an Event of Default with respect to the Company described in paragraph (i) or (j) of Section 11 (other than an Event of Default described in clause (1) of paragraph (i) or described in clause (6) of paragraph (i) by virtue of the fact that such clause encompasses clause (1) of paragraph (i)) has occurred, all the Notes then outstanding shall automatically become immediately due and payable.
 
(b)         If any other Event of Default has occurred and is continuing, the Required Holders may at any time at its or their option, by notice or notices to the Company, declare all the Notes then outstanding to be immediately due and payable.
 
(c)         If any Event of Default described in paragraph (a) or (b) of Section 11 has occurred and is continuing, any holder or holders of Notes at the time outstanding affected by such Event of Default may at any time, at its or their option, by notice or notices to the Company, declare all the Notes held by it or them to be immediately due and payable.
 
Upon any Note becoming due and payable under this Section 12.1, whether automatically or by declaration, such Note will forthwith mature and the entire unpaid principal amount of such Note, plus (1) all accrued and unpaid interest thereon and (2) the Make-Whole Amount, if any, determined in respect of such principal amount (to the full extent permitted by applicable law) shall all be immediately due and payable, in each and every case without presentment, demand, protest or further notice, all of which are hereby waived.  The Company acknowledges, and the parties hereto agree, that each holder of a Note has the right to maintain its investment in the Notes free from repayment by the Company (except as herein specifically provided for), and that the provision for payment of the Make-Whole Amount by the Company in the event that the Notes are prepaid or are accelerated as a result of an Event of Default, is intended to provide compensation for the deprivation of such right under such circumstances.
 
Section 12.2      Other Remedies.  (a) If any Default or Event of Default has occurred and is continuing, and irrespective of whether any Notes have become or have been declared immediately due and payable under Section 12.1, the holder of any Note at the time outstanding may proceed to protect and enforce the rights of such holder by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein or in any Note, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise.
 
(b)        If any Event of Default has occurred and is continuing and the Notes then outstanding have become due and payable pursuant to Section 12.1, the holders of the Notes may immediately proceed to exercise their rights pursuant to section 10.65 of the Mortgage Indenture (added by section 2.1 of the Supplemental Indenture), to require the redemption of the First Mortgage Bonds and, upon any failure of the Company to so redeem the First Mortgage Bonds, to exercise all rights as beneficial owners of the First Mortgage Bonds under the Mortgage Indenture.

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Section 12.3       Rescission.  At any time after any Notes have been declared due and payable pursuant to clause (b) or (c) of Section 12.1, the Required Holders, by written notice to the Company, may rescind and annul any such declaration and its consequences if (a) the Company has paid all overdue interest on the Notes, all principal of and Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid other than by reason of such declaration, and all interest on such overdue principal and Make-Whole Amount, if any, and (to the extent permitted by applicable law) any overdue interest in respect of the Notes, at the Default Rate, (b) neither the Company nor any other Person shall have paid any amounts which have become due solely by reason of such declaration, (c) all Events of Default and Defaults, other than non-payment of amounts that have become due solely by reason of such declaration, have been cured or have been waived pursuant to Section 17 and (d) no judgment or decree has been entered for the payment of any monies due pursuant hereto or to the Notes.  No rescission and annulment under this Section 12.3 will extend to or affect any subsequent Event of Default or Default or impair any right consequent thereon.
 
Section 12.4       No Waivers or Election of Remedies, Expenses, Etc.  No course of dealing and no delay on the part of any holder of any Note in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice such holder’s rights, powers or remedies.  No right, power or remedy conferred by this Agreement or by any Note upon any holder thereof shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise.  Without limiting the obligations of the Company under Section 15, the Company will pay to the holder of each Note on demand such further amount as shall be sufficient to cover all costs and expenses of such holder incurred in any enforcement or collection under this Section 12, including, without limitation, reasonable attorneys’ fees, expenses and disbursements.
 
Section 13.         Registration; Exchange; Substitution of Notes.
 
Section 13.1        Registration of Notes.  The Company shall cause its transfer agent to keep at its office designated pursuant to Section 13.2 a register for the registration and registration of transfers of Notes.  The name and address of each holder of one or more Notes, each transfer thereof and the name and address of each transferee of one or more Notes shall be registered in such register.  If any holder of one or more Notes is a nominee, then (a) the name and address of the beneficial owner of such Note or Notes shall also be registered in such register as an owner and holder thereof and (b) at any such beneficial owner’s option, either such beneficial owner or its nominee may execute any amendment, waiver or consent pursuant to this Agreement.  Prior to due presentment for registration of transfer, the Person(s) in whose name any Note(s) shall be registered shall be deemed and treated as the owner and holder thereof for all purposes hereof, and the Company shall not be affected by any notice or knowledge to the contrary.  The Company shall give to any holder of a Note that is an Institutional Investor promptly upon request therefor, a complete and correct copy of the names and addresses of all registered holders of Notes.

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Section 13.2        Transfer and Exchange of Notes.  Upon surrender of any Note at the corporate trust office of the Company’s transfer agent, U.S. Bank Trust Company, National Association by mail at U.S. Bank Global Corporate Trust Services, Attention: Transfers — EP-MN-WS2N, 60 Livingston Avenue, St. Paul, Minnesota 55107-2292 or by hand at U.S. Bank Global Corporate Trust Services, Attention: Transfers, 1st Floor, 60 Livingston Avenue, St. Paul, Minnesota 55107-2292, or at such other addresses as may be provided in writing to the holders of the Notes, for registration of transfer or exchange (and in the case of a surrender for registration of transfer, duly endorsed or accompanied by a written instrument of transfer duly executed by the registered holder of such Note or its attorney duly authorized in writing and accompanied by the address for notices of each transferee of such Note or part thereof), within 10 Business Days thereafter, the Company shall execute and deliver, at the Company’s expense (except as provided below), one or more new Notes (as requested by the holder thereof) in exchange therefor, in an aggregate principal amount equal to the unpaid principal amount of the surrendered Note.  Each such new Note shall be payable to such Person as such holder may request and shall be substantially in the form of Exhibit 1.  Each such new Note shall be dated and bear interest from the date to which interest shall have been paid on the surrendered Note or dated the date of the surrendered Note if no interest shall have been paid thereon.  The Company may require payment of a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such transfer of Notes.  Notes shall not be transferred in denominations of less than $100,000, provided that if necessary to enable the registration of transfer by a holder of its entire holding of Notes, a Note may be in a denomination of less than $100,000.  Any transferee, by its acceptance of a Note registered in its name (or the name of its nominee), shall be deemed to have made the representation set forth in Section 6.2.
 
Section 13.3        Replacement of Notes.  Upon receipt by the Company of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Note (which evidence shall be, in the case of an Institutional Investor, notice from such Institutional Investor of such ownership and such loss, theft, destruction or mutilation), and
 
(a)        in the case of loss, theft or destruction, of indemnity reasonably satisfactory to it (provided that if the holder of such Note is, or is a nominee for, an original Purchaser or another holder of a Note with a minimum net worth of at least $50,000,000, such Person’s own unsecured agreement of indemnity shall be deemed to be satisfactory), or
 
(b)          in the case of mutilation, upon surrender and cancellation thereof,
 
within 10 Business Days thereafter, the Company at its own expense shall execute and deliver, in lieu thereof, a new Note, dated and bearing interest from the date to which interest shall have been paid on such lost, stolen, destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or mutilated Note if no interest shall have been paid thereon.

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Section 14.
Payments on Notes.
 
Section 14.1        Place of Payment.  Subject to Section 14.2, payments of principal, Make-Whole Amount, if any, and interest becoming due and payable on the Notes shall be made in New York, New York at the principal office of U.S. Bank Trust Company, National Association in such jurisdiction.  The Company may at any time, by notice to each holder of a Note, change the place of payment of the Notes so long as such place of payment shall be either the principal office of the Company in such jurisdiction or the principal office of a bank or trust company in such jurisdiction.
 
Section 14.2        Home Office Payment.  So long as any Purchaser or its nominee shall be the holder of any Note, and notwithstanding anything contained in Section 14.1 or in such Note to the contrary, the Company will pay all sums becoming due on such Note for principal, Make-Whole Amount, if any, interest and all other amounts due hereunder by the method and at the address specified for such purpose below such Purchaser’s name in Schedule A, or by such other method or at such other address as such Purchaser shall have from time to time specified to the Company in writing for such purpose, without the presentation or surrender of such Note or the making of any notation thereon, except that upon written request of the Company made concurrently with or reasonably promptly after payment or prepayment in full of any Note, such Purchaser shall surrender such Note for cancellation, reasonably promptly after any such request, to the Company at its principal executive office or at the place of payment most recently designated by the Company pursuant to Section 14.1.  Prior to any sale or other disposition of any Note held by any Purchaser or its nominee such Purchaser will, at its election, either endorse thereon the amount of principal paid thereon and the last date to which interest has been paid thereon or surrender such Note to the Company in exchange for a new Note or Notes pursuant to Section 13.2.  The Company will afford the benefits of this Section 14.2 to any Institutional Investor that is the direct or indirect transferee of any Note purchased by any Purchaser under this Agreement and that has made the same agreement relating to such Note as such Purchaser has made in this Section 14.2.
 
Section 14.3        FATCA Information.  By acceptance of any Note, the holder of such Note agrees that such holder will with reasonable promptness duly complete and deliver to the Company, or to such other Person as may be reasonably requested by the Company, from time to time (a) in the case of any such holder that is a United States Person, such holder’s United States tax identification number or other Forms reasonably requested by the Company necessary to establish such holder’s status as a United States Person under FATCA and as may otherwise be necessary for the Company to comply with its obligations under FATCA and (b) in the case of any such holder that is not a United States Person, such documentation prescribed by applicable law (including as prescribed by section 1471(b)(3)(C)(i) of the Code) and such additional documentation as may be necessary for the Company to comply with its obligations under FATCA and to determine that such holder has complied with such holder’s obligations under FATCA or to determine the amount (if any) to deduct and withhold from any such payment made to such holder.  Nothing in this Section 14.3 shall require any holder to provide information that is confidential or proprietary to such holder unless the Company is required to obtain such information under FATCA and, in such event, the Company shall treat any such information it receives as confidential.
 
Section 15.
Expenses, Etc.

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Section 15.1       Transaction Expenses.  Whether or not the transactions contemplated hereby are consummated, the Company will pay the reasonable out-of-pocket costs and expenses incurred in connection with the initial filing of this Agreement and all related documents and financial information, and all subsequent annual and interim filings of documents and financial information related thereto, with the SVO (which costs and expenses shall not exceed $5,000 without the prior written consent of the Company), and all out-of-pocket costs and expenses (including reasonable attorneys’ fees of a special counsel and, if reasonably required, local or other counsel) incurred by the Purchasers or any other holder of a Note in connection with the transactions contemplated hereby and in connection with any amendments, waivers or consents under or in respect of this Agreement, the Notes, the Mortgage Indenture (including the Supplemental Indenture) and the First Mortgage Bonds (whether or not such amendment, waiver or consent becomes effective), including, without limitation: (a) the out-of-pocket costs and expenses incurred in enforcing or defending (or determining whether or how to enforce or defend) any rights under this Agreement, the Notes, the Mortgage Indenture (including the Supplemental Indenture) and the First Mortgage Bonds, or in responding to any subpoena or other legal process or informal investigative demand issued in connection with this Agreement, the Notes, the Mortgage Indenture (including the Supplemental Indenture) and the First Mortgage Bonds, or by reason of being a holder of any Note and (b) the out-of-pocket costs and expenses, including financial advisors’ fees, incurred in connection with the insolvency or bankruptcy of the Company or in connection with any work-out or restructuring of the transactions contemplated hereby, by the Notes, by the Mortgage Indenture (including the Supplemental Indenture) or by the First Mortgage Bonds.  If required by the NAIC, the Company shall obtain and maintain at its own cost and expense a Legal Entity Identifier (LEI).
 
The Company will pay, and will save the Purchasers and each other holder of a Note harmless from, (i) all claims in respect of any fees, costs or expenses, if any, of brokers and finders (other than those retained by such Person), (ii) any and all wire transfer fees that any bank or other financial institution deducts from any payment under such Note to such holder or otherwise charges to a holder of a Note with respect to a payment under such Note and (iii) any judgment, liability, claim, order, decree, fine, penalty, cost, fee, expense (including reasonable attorneys’ fees and expenses) or obligation resulting from the consummation of the transactions contemplated hereby, including the use of the proceeds of the Notes by the Company.
 
Section 15.2        Certain Taxes.  The Company agrees to pay all stamp, documentary or similar taxes or fees which may be payable in respect of the execution and delivery or the enforcement of this Agreement or the execution and delivery (but not the transfer) or the enforcement of any of the Notes in the United States or any other jurisdiction where the Company has assets or of any amendment of, or waiver or consent under or with respect to, this Agreement or of any of the Notes, and to pay any value added tax due and payable in respect of reimbursement of costs and expenses by the Company pursuant to this Section 15, and will save each holder of a Note to the extent permitted by applicable law harmless against any loss or liability resulting from nonpayment or delay in payment of any such tax or fee required to be paid by the Company hereunder.
 
Section 15.3        Survival.  The obligations of the Company under this Section 15 will survive the payment or transfer of any Note, the enforcement, amendment or waiver of any provision of this Agreement or the Notes, and the termination of this Agreement.
 
Section 16.
Survival of Representations and Warranties; Entire Agreement.
 
All representations and warranties contained herein shall survive the execution and delivery of this Agreement and the Notes, the purchase or transfer by any Purchaser of any Note or portion thereof or interest therein and the payment of any Note, and may be relied upon by any subsequent holder of a Note, regardless of any investigation made at any time by or on behalf of any Purchaser or any other holder of a Note.  All statements contained in any certificate or other instrument delivered by or on behalf of the Company pursuant to this Agreement shall be deemed representations and warranties of the Company under this Agreement.  Subject to the preceding sentence, this Agreement and the Notes embody the entire agreement and understanding between the Purchasers and the Company and supersede all prior agreements and understandings relating to the subject matter hereof.

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Section 17.
Amendment and Waiver.
 
Section 17.1        Requirements.  This Agreement and the Notes may be amended, and the observance of any term hereof or of the Notes may be waived (either retroactively or prospectively), with (and only with) the written consent of the Company and the Required Holders, except that (a) no amendment or waiver of any of the provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term (as it is used therein), will be effective as to any Purchaser or holder of a Note unless consented to by such Purchaser or holder in writing and (b) no such amendment or waiver may, without the written consent of each Purchaser or the holder of each Note at the time outstanding affected thereby, (1) subject to the provisions of Section 12 relating to acceleration or rescission, change the amount or time of any prepayment or payment of principal of, or reduce the rate or change the time of payment or method of computation of interest or of the Make-Whole Amount on, the Notes, (2) change the percentage of the principal amount of the Notes the holders of which are required to consent to any such amendment or waiver or (3) amend any of Sections 8, 11(a), 11(b), 12, 17, 20 or 23.
 
Section 17.2         Solicitation of Purchasers and Holders of Notes.
 
(a)        Solicitation.  The Company will provide each holder of the Notes (irrespective of the amount of Notes then owned by it) with sufficient information, sufficiently far in advance of the date a decision is required, to enable such holder to make an informed and considered decision with respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof or of the Notes.  The Company will deliver executed or true and correct copies of each amendment, waiver or consent effected pursuant to the provisions of this Section 17 to each holder of outstanding Notes promptly following the date on which it is executed and delivered by, or receives the consent or approval of, the requisite holders of Notes.
 
(b)         Payment.  The Company will not, directly or indirectly, pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant any security or provide any other credit support, to any holder of a Note as consideration for or as an inducement to the entering into by such holder of any waiver or amendment of any of the terms and provisions hereof unless such remuneration is concurrently paid, or security is concurrently granted or other credit support concurrently provided, on the same terms, ratably to each holder of Notes then outstanding even if such holder did not consent to such waiver or amendment.
 
(c)         Consent in Contemplation of Transfer.  Any consent made pursuant to this Section 17 by a holder of a Note that has transferred a portion or has agreed to transfer all or a portion of its Notes to (i) the Company, (ii) any Affiliate or (iii) any other Person in connection with, or in anticipation of, such other Person acquiring, making a tender offer for or merging with the Company and/or any of its Affiliates and, in each case, has provided or has agreed to provide such written consent as a condition to such transfer shall be void and of no force and effect except solely as to such holder, and any amendments effected or waivers granted or to be effected or granted that would not have been or be so effected or granted but for such consent (and the consents of all other holders of Notes that were acquired under the same or similar conditions) shall be void and of no force or effect except solely as to such holder.

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Section 17.3       Binding Effect, Etc.  Any amendment or waiver consented to as provided in this Section 17 applies equally to all Purchasers and holders of Notes and is binding upon them and upon each future holder of any Note and upon the Company without regard to whether such Note has been marked to indicate such amendment or waiver.  No such amendment or waiver will extend to or affect any obligation, covenant, agreement, Default or Event of Default not expressly amended or waived or impair any right consequent thereon.  No course of dealing between the Company and any Purchaser or holder of any Note nor any delay in exercising any rights hereunder or under any Note shall operate as a waiver of any rights of any Purchaser or holder of such Note.  As used herein, the term “this Agreement” and references thereto shall mean this Agreement as it may from time to time be amended or supplemented.
 
Section 17.4        Notes Held by Company, Etc.  Solely for the purpose of determining whether the holders of the requisite percentage of the aggregate principal amount of Notes then outstanding approved or consented to any amendment, waiver or consent to be given under this Agreement or the Notes, or have directed the taking of any action provided herein or in the Notes to be taken upon the direction of the holders of a specified percentage of the aggregate principal amount of Notes then outstanding, Notes directly or indirectly owned by the Company or any of its Affiliates shall be deemed not to be outstanding.
 
Section 18.
Notices.
 
Except to the extent otherwise provided in Section 7.4, all notices and communications provided for hereunder shall be in writing and sent (a) by telefacsimile if the sender on the same day sends a confirming copy of such notice by a recognized overnight delivery service (charges prepaid), (b) by registered or certified mail with return receipt requested (postage prepaid) or (c) by a recognized overnight delivery service (charges prepaid).  Any such notice must be sent:
 
(1)        if to any Purchaser or its nominee, to such Purchaser or its nominee at the address specified for such communications in Schedule A, or at such other address as such Purchaser or its nominee shall have specified to the Company in writing,
 
(2)          if to any other holder of any Note, to such holder at such address as such other holder shall have specified to the Company in writing, or
 
(3)         if to the Company, to the Company at its address set forth at the beginning hereof to the attention of the Chief Financial Officer of the Company, or at such other address as the Company shall have specified to the holder of each Note in writing.
 
Notices under this Section 18 will be deemed given only when actually received.

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Section 19.
Reproduction of Documents.
 
This Agreement or the Mortgage Indenture (including the Supplemental Indenture), as the case may be, and all documents relating hereto and thereto, including, without limitation, (a) consents, waivers and modifications that may hereafter be executed, (b) documents received by the Purchasers at the Closing (except the Notes themselves) and (c) financial statements, certificates and other information previously or hereafter furnished to any Purchaser or holder of the Notes, may be reproduced by such Purchaser or such holder by any photographic, photostatic, microfilm, microcard, miniature photographic or other similar process and such Purchaser or such holder may destroy any original document so reproduced.  The Company agrees and stipulates that, to the extent permitted by applicable law, any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made by any Purchaser or holder of the Notes in the regular course of business) and any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.  This Section 19 shall not prohibit the Company or any other Purchaser or holder of a Note from contesting any such reproduction to the same extent that it could contest the original, or from introducing evidence to demonstrate the inaccuracy of any such reproduction.
 
Section 20.
Confidential Information.
 
For the purposes of this Section 20, “Confidential Information” shall mean information delivered to any Purchaser by or on behalf of the Company in connection with the transactions contemplated by or otherwise pursuant to this Agreement that is proprietary in nature and that was clearly marked or labeled or otherwise adequately identified when received by such Purchaser as being confidential information of the Company, provided that such term does not include information that (a) was publicly known or otherwise known to such Purchaser prior to the time of such disclosure (provided, however, that to such Purchaser’s actual knowledge, the source of such information was not, at the time of disclosure to such Purchaser, bound by a confidentiality agreement with the Company relating to such information), (b) subsequently becomes publicly known through no act or omission by such Purchaser or any Person acting on such Purchaser’s behalf, (c) otherwise becomes known to such Purchaser other than through disclosure by the Company (provided, however, that to such Purchaser’s actual knowledge, the source of such information was not, at the time of disclosure to such Purchaser, bound by a confidentiality agreement with the Company relating to such information) or (d) constitutes financial statements delivered to such Purchaser under Section 7.1 that are otherwise publicly available.  Each Purchaser will maintain the confidentiality of such Confidential Information in accordance with procedures adopted by such Purchaser in good faith to protect confidential information of third parties delivered to such Purchaser, provided that such Purchaser may deliver or disclose Confidential Information to (1) its directors, officers, trustees, employees, agents, attorneys and affiliates (to the extent such disclosure reasonably relates to the administration of the investment represented by its Notes and such individuals are bound by the terms of this Section 20 or agree to hold confidential the Confidential Information substantially in accordance with the terms of this Section 20), (2) its auditors, financial advisors and other professional advisors who agree to hold confidential the Confidential Information substantially in accordance with the terms of this Section 20, (3) any other holder of any Note, (4) any Institutional Investor to which such Purchaser sells or offers to sell such Note or any part thereof or any participation therein (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 20), (5) any Person from which such Purchaser offers to purchase any security of the Company (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 20), (6) any Federal or state regulatory authority having jurisdiction over such Purchaser, (7) the NAIC or the SVO or, in each case, any similar organization, or any nationally recognized rating agency that requires access to information about such Purchaser’s investment portfolio or (8) any other Person to which such delivery or disclosure may be necessary or appropriate (i) to effect compliance with any law, rule, regulation or order applicable to such Purchaser, (ii) in response to any subpoena or other legal process, (iii) in connection with any litigation to which such Purchaser is a party or (iv) if an Event of Default has occurred and is continuing, to the extent such Purchaser may reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of the rights and remedies under such Purchaser’s Notes and this Agreement (provided with respect to subclauses (i) (except where required disclosure of the purchase of the Notes is to be made to any supervisory or regulatory body during the normal course of its exercise of its regulatory or supervisory function over such Purchaser and consistent with such Purchaser’s usual practice), (ii) and (iii) that, to the extent not prohibited by applicable law, rule, regulation or order, such Purchaser shall use commercially reasonable efforts to notify the Company of such pending disclosure so that the Company may seek a protective order or to pursue such further legal action as may be necessary to preserve the privileged nature and confidentiality of the Confidential Information).  Each holder of a Note, by its acceptance of a Note, will be deemed to have agreed to be bound by and to be entitled to the benefits of this Section 20 as though it were a party to this Agreement.  On reasonable request by the Company in connection with the delivery to any holder of a Note of information required to be delivered to such holder under this Agreement or requested by such holder (other than a holder that is a party to this Agreement or its nominee), such holder will enter into an agreement with the Company embodying the provisions of this Section 20.

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In the event that as a condition to receiving access to information relating to the Company in connection with the transactions contemplated by or otherwise pursuant to this Agreement, any Purchaser or holder of a Note is required to agree to a confidentiality undertaking (whether through IntraLinks, another secure website, a secure virtual workspace or otherwise) which is different from this Section 20, this Section 20 shall not be amended thereby and, as between such Purchaser or such holder and the Company, this Section 20 shall supersede any such other confidentiality undertaking.
 
Section 21.
Substitution of Purchaser.
 
Each Purchaser shall have the right to substitute any one of its Affiliates as the purchaser of the Notes that such Purchaser has agreed to purchase hereunder, by written notice to the Company, which notice shall be signed by both such Purchaser and such Affiliate, shall contain such Affiliate’s agreement to be bound by this Agreement and shall contain a confirmation by such Affiliate of the accuracy with respect to it of the representations set forth in Section 6.  Upon receipt of such notice, wherever the word “Purchaser” is used in this Agreement (other than in this Section 21), such word shall be deemed to refer to such Affiliate in lieu of such Purchaser.  In the event that such Affiliate is so substituted as a purchaser hereunder and such Affiliate thereafter transfers to such Purchaser all of the Notes then held by such Affiliate, upon receipt by the Company of notice of such transfer, wherever the word “Purchaser” is used in this Agreement (other than in this Section 21), such word shall no longer be deemed to refer to such Affiliate, but shall refer to such Purchaser, and such Purchaser shall have all the rights of an original holder of the Notes under this Agreement.

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Section 22.
Miscellaneous.
 
Section 22.1        Successors and Assigns.  All covenants and other agreements contained in this Agreement by or on behalf of any of the parties hereto bind and inure to the benefit of their respective successors and assigns (including, without limitation, any subsequent holder of a Note) whether so expressed or not, except that, subject to Section 10.5, the Company may not assign or otherwise transfer any of its rights or obligations hereunder or under the Notes without the prior written consent of each holder.  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto and their respective successors and assigns permitted hereby) any legal or equitable right, remedy or claim under or by reason of this Agreement.
 
Section 22.2        Submission to Jurisdiction; Waiver of Jury Trial.  (a) The Company hereby irrevocably submits to the non-exclusive jurisdiction of any State of New York court or any Federal court located in New York County, New York, New York for the adjudication of any matter arising out of or relating to this Agreement, and consents to the service of all writs, process and summonses by registered or certified priority or express mail out of any such court or by service of process on the Company at its address to which notices are to be given pursuant to Section 18 hereof and hereby waives any requirement to have an agent for service of process in the State of New York.  Nothing contained herein shall affect the right of any holder of the Notes to serve legal process in any other manner or to bring any proceeding hereunder in any jurisdiction where the Company may be amenable to suit.  The Company hereby irrevocably waives any objection to any suit, action or proceeding in any New York court or Federal court located in New York County, New York, New York on the grounds of venue and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.
 
(b)        THE PARTIES HERETO HEREBY WAIVE TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH RESPECT TO THIS AGREEMENT, THE NOTES OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH OR THEREWITH.
 
Section 22.3       Payments Due on Non-Business Days.  Anything in this Agreement or the Notes to the contrary notwithstanding (but without limiting the requirement in Section 8.5 that the notice of any optional prepayment specify a Business Day as the date fixed for such prepayment), any payment of principal of or Make-Whole Amount, if any, or interest on any Note that is due on a date other than a Business Day shall be made on the next succeeding Business Day without including the additional days elapsed in the computation of the interest payable on such next succeeding Business Day; provided that if the maturity date of any Note is a date other than a Business Day, the payment otherwise due on such maturity date shall be made on the next succeeding Business Day and shall include the additional days elapsed in the computation of interest payable on such next succeeding Business Day.

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Section 22.4      Accounting Terms.  All accounting terms used herein which are not expressly defined in this Agreement have the meanings respectively given to them in accordance with GAAP.  Except as otherwise specifically provided herein, (i) all computations made pursuant to this Agreement shall be made in accordance with GAAP, and (ii) all financial statements shall be prepared in accordance with GAAP; provided, that, if the Company notifies the holders of Notes that the Company requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision, regardless of whether any such notice is given before or after such change in GAAP or in the application thereof (or if the Required Holder(s) notify the Company that the Required Holder(s) request an amendment to any provision hereof for such purposes), then (i) such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith and (ii) the Company shall provide to the holders financial statements and other documents required by this Agreement or requested by any holder setting forth reconciliations between the computations relating to the compliance with the provisions hereof and financial statements provided hereunder made before and after giving effect to such changes in GAAP or the application thereof.  For purposes of determining compliance with this Agreement (including, without limitation, Section 9, Section 10 and the definition of “Debt”), any election by the Company to measure any financial liability using fair value (as permitted by Financial Accounting Standards Board Accounting Standards Codification Topic No. 825-10-25 — Fair Value Option, International Accounting Standard 39 — Financial Instruments: Recognition and Measurement or any similar accounting standard) shall be disregarded and such determination shall be made as if such election had not been made.
 
Section 22.5     Severability.  Any provision of this Agreement 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 any such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by law) not invalidate or render unenforceable such provision in any other jurisdiction.
 
Section 22.6        Construction.  Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant.  Where any provision herein refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person.
 
For the avoidance of doubt, all Schedules and Exhibits attached to this Agreement shall be deemed to be a part hereof.

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Section 22.7     Counterparts; Electronic Contracting.  This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument.  Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto.  The parties agree to electronic contracting and signatures with respect to this Agreement and any other agreement or instrument hereunder (other than the Notes).  Delivery of an electronic signature to, or a signed copy of, this Agreement and any other agreement or instrument hereunder (other than the Notes) by facsimile, email or other electronic transmission shall be fully binding on the parties to the same extent as the delivery of the signed originals and shall be admissible into evidence for all purposes.  Notwithstanding the foregoing, if any Purchaser shall request manually signed counterpart signatures to any agreement or instrument hereunder, the Company hereby agrees to use its reasonable endeavors to provide such manually signed signature pages as soon as reasonably practicable.
 
Section 22.8       Governing Law.  This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would require the application of the laws of a jurisdiction other than such State.
 
Section 23.
Appointment and Direction of Collateral Agent.
 
Section 23.1      Appointment and Authority; Direction.  Each holder of the Notes, by its acceptance thereof, designates and appoints U.S. Bank Trust Company, National Association, as successor in interest to U.S. Bank National Association to act as Collateral Agent for it under this Agreement, and authorizes U.S. Bank Trust Company, National Association, as successor in interest to U.S. Bank National Association, as the Collateral Agent acting on behalf of and for such holder’s benefit, to (a) accept delivery of the First Mortgage Bonds, issued in the name of the Collateral Agent, and to hold the First Mortgage Bonds for the benefit of the holders of the Notes in accordance with this Agreement in a collateral account established by the Collateral Agent, (b) execute and deliver the Collateral Agent Acceptance in connection with the Closing (the “First Mortgage Bond Documents”) and (c) enter into each and all other instruments relating to the security for the Notes and to take such action under the provisions of the this Agreement, the Mortgage Indenture and all other instruments relating hereto and thereto, and to exercise such powers and perform such duties as are expressly delegated to the Collateral Agent by the terms hereof and thereof.
 
Section 23.2     Limited Agency.  Notwithstanding any provision to the contrary set forth elsewhere in this Agreement or any document related hereto, the Collateral Agent shall not have any duties or responsibilities in its capacity as Collateral Agent except those expressly set forth herein or therein, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or the First Mortgage Bond Documents or otherwise exist against the Collateral Agent.
 
Section 23.3        Delegation of Duties.  The Collateral Agent may exercise its powers and execute any of its duties under this Agreement and the First Mortgage Bond Documents by or through employees, agents or attorneys-in-fact and shall be entitled to take and to rely on advice of counsel concerning all matters pertaining to such powers and duties.  The Collateral Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care.  The Collateral Agent may utilize the services of such Persons as the Collateral Agent in its sole discretion may determine, and all reasonable fees and expenses of such Persons shall be borne by the Company.

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Section 23.4      Exculpatory Provisions.  (a) The Collateral Agent or any of its officers, directors, employees, agents, attorneys-in-fact or affiliates shall not be (1) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection with this Agreement or the First Mortgage Bond Documents (except for its or such Person’s personal liability for its own or such Person’s own gross negligence or willful misconduct) or (2) responsible in any manner to any of the holders for any recitals, statements, representations or warranties made by the Company or any officer thereof contained herein or in any First Mortgage Bond Document or in any certificate, report, statement or other document referred to or provided for in, or received by, the Collateral Agent under or in connection with this Agreement or any First Mortgage Bond Document, or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of the First Mortgage Bond Documents or for any failure of the Company to perform its obligations thereunder.  The Collateral Agent shall not be under any obligation to the holders to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, the First Mortgage Bond Documents.
 
(b)       The Collateral Agent shall be deemed to have exercised reasonable care in the custody of any First Mortgage Bonds in its possession if the First Mortgage Bonds are accorded treatment substantially equal to that which it accords its own property.
 
(c)         The Collateral Agent shall not be liable for any action taken, suffered, or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the rights or powers conferred upon it by this Agreement.
 
(d)         In no event shall the Collateral Agent be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit).
 
Section 23.5       Reliance by Collateral Agent.  The Collateral Agent shall be entitled to conclusively rely, and shall be fully protected in relying, upon any writing, resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or facsimile message, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to the Company), independent accountants and other experts selected by the Collateral Agent.  The Collateral Agent shall be fully justified in failing or refusing to take action under this Agreement or the First Mortgage Bond Documents unless it shall first receive such advice or concurrence of the Required Holders and it shall first be indemnified to its reasonable satisfaction by the holders against any and all liability and expense which may be incurred by it by reason of taking, continuing to take or refraining from taking any such action.  The Collateral Agent, in all cases, shall be fully protected in acting, or in refraining from acting, under this Agreement and the First Mortgage Bond Documents if such acting or refraining from acting is in accordance with the provisions hereof, and any action taken or failure to act pursuant hereto shall be binding upon all the holders.

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Section 23.6        Indemnification.  Each holder severally agrees to indemnify the Collateral Agent in its capacity as such (to the extent not reimbursed by the Company (and without limiting the Company’s obligation to do so) within 45 days after the Collateral Agent’s written request therefor), ratably according to its respective share of the outstanding principal amount of the Notes held thereby, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time (including, without limitation, at any time following the payment of the Notes) be imposed on, incurred by or asserted against the Collateral Agent in any way relating to or arising out of actions or omissions of the Collateral Agent specifically required or permitted by this Agreement or by written instructions of the Required Holders, delivered pursuant thereto, provided that no holder shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements to the extent resulting from the Collateral Agent’s own gross negligence or willful misconduct.  The agreements in this Section 23.6 shall survive the payment of the Notes.
 
Section 23.7        Duties; Obligations.  The only duties and obligations which the Collateral Agent shall have are those set forth in this Agreement and in the First Mortgage Bond Documents.
 
Section 23.8      Requesting Instructions.  The Collateral Agent may at any time request directions in writing from the holders as to any course of action or other matter relating to the performance of its duties under this Agreement and the First Mortgage Bond Documents and the holders shall promptly comply with such request.  Directions given to the Collateral Agent by the Required Holders shall be binding on each of the holders.
 
Section 23.9        Administrative Actions.  The Collateral Agent shall have the right to take such actions, or omit to take such actions, hereunder and under the First Mortgage Bond Documents not inconsistent with the written instructions of the requisite holders or the terms of the First Mortgage Bond Documents and this Agreement, including without limitation actions the Collateral Agent deems necessary or appropriate to perfect or continue the perfection of the Liens on the First Mortgage Bonds for the benefit of the holders or to protect the First Mortgage Bonds.  Except as provided above and as otherwise provided pursuant to applicable law, the Collateral Agent shall have no duty as to the collection or protection of the First Mortgage Bonds or any income thereon, nor as to the preservation of rights against prior parties, nor as to the preservation of rights pertaining to the First Mortgage Bonds beyond the safe custody of any First Mortgage Bonds in the Collateral Agent’s possession.
 
Section 23.10      Exercise of Remedies.  Except as otherwise provided in Section 23.9, the Collateral Agent shall only be authorized to take such actions under the First Mortgage Bond Documents and to enforce or prepare to enforce the remedies available under such First Mortgage Bond Documents as are approved in a written notice by the Required Holders; provided, however, that no notice to release First Mortgage Bonds shall be effective unless signed by all of the holders.  In furtherance of the foregoing, the Collateral Agent agrees to make such demands and give such notices under the First Mortgage Bond Documents as may be requested by, and to take such action to enforce the First Mortgage Bond Documents and to foreclose upon, collect and dispose of the First Mortgage Bonds or any portion thereof as may be directed by the Required Holders; provided, however, that the Collateral Agent shall not be required to take any action that is in its opinion contrary to law or the terms of this Agreement or the First Mortgage Bond Documents and the Collateral Agent shall not be required to take any action unless indemnified in accordance with the provisions of Section 23.6 hereof.

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Section 23.11      Sharing and Application of Proceeds.  The holders agree all amounts owing with respect to the Notes shall be secured pro rata by the Collateral Agent without distinction.  Upon any realization upon the First Mortgage Bonds by the Collateral Agent, the holders agree that the proceeds thereof shall be applied (i) first, to the payment of expenses incurred by and amounts owed to the Collateral Agent with respect to maintenance and protection of the First Mortgage Bonds and of expenses incurred with respect to the sale of or realization upon any of the First Mortgage Bonds or the perfection, enforcement or protection of the rights of the holders (including reasonable attorneys’ fees and expenses of every kind); (ii) second, equally and ratably to the payment of all amounts of interest on the Notes, according to the aggregate amounts thereof owing to each holder; (iii) third, equally and ratably to the payment of all amounts of principal on the Notes according to the aggregate amounts thereof owing to each holder; (iv) fourth, equally and ratably to the payment of all Make-Whole Amounts according to the aggregate amounts thereof owing to each holder; (v) fifth, equally and ratably to the payment of other amounts then due to the holders under this Agreement (including but not limited to all fees and expenses) with amounts prorated, if necessary, based on the aggregate amounts thereof then owing to each holder, and (vi) sixth, the balance, if any, shall be returned to the Company.
 
Section 23.12     Resignation or Termination of Collateral Agent.  The Collateral Agent may resign as Collateral Agent upon not less than 60 days’ written notice to each of the holders (with a copy to the Company), such resignation to take effect upon the acceptance by a successor Collateral Agent of its appointment as the Collateral Agent hereunder.  In addition, the Required Holders may remove the Collateral Agent, with or without cause, each at any time by giving written notice thereof to the Collateral Agent, such resignation to take effect upon the acceptance by a successor Collateral Agent of its appointment as the Collateral Agent hereunder.  Upon any such resignation or removal, the Required Holders shall have the right to appoint a successor Collateral Agent which meets the eligibility requirements of Section 23.14.  If no successor Collateral Agent shall have been so appointed and shall have accepted such appointment in writing within 60 days after the retiring Collateral Agent’s giving of notice of resignation or its removal, then any holder or the retiring Collateral Agent (unless the Collateral Agent is being removed), on behalf of the holders, may petition at the expense of the Company a court of competent jurisdiction for the appointment of a successor Collateral Agent.  Such court shall, after such notice as it may deem proper, appoint a successor Collateral Agent meeting the qualifications specified in Section 23.14.  The holders of the Notes hereby consent to such petition and appointment so long as such criteria are met.  Upon acceptance of appointment as Collateral Agent, such successor shall thereupon and forthwith succeed to and become vested with all the rights, powers and privileges, immunities and duties of the retiring Collateral Agent, and the retiring Collateral Agent, upon the signing, transferring and setting over to such successor Collateral Agent all rights, moneys and other collateral held by it in its capacity as Collateral Agent, shall be discharged from its duties and obligations hereunder.  After any retiring Collateral Agent’s resignation or removal as Collateral Agent, the provisions of this Section 23, shall inure to its benefit as to any actions taken or omitted to be taken by it while it acted as Collateral Agent.

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Section 23.13     Succession of Successor Collateral Agent.  Any successor Collateral Agent appointed hereunder shall execute, acknowledge and deliver to the holders and the predecessor Collateral Agent an instrument accepting such appointment, and thereupon such successor Collateral Agent, without any further act, deed, conveyance or transfer, shall become vested with the title to the First Mortgage Bonds, and with all the rights, powers, duties and obligations of the predecessor Collateral Agent in the First Mortgage Bonds and the First Mortgage Bond Documents, with like effect as if originally named as Collateral Agent herein.
 
Upon the request of any such successor Collateral Agent, however, the holders and the predecessor Collateral Agent shall promptly execute and deliver such instruments of conveyance and further assurance reflecting terms consistent with the terms of this Agreement and the First Mortgage Bond Documents then in effect and do such other things as may reasonably be required for more fully and certainly vesting and confirming in such successor Collateral Agent its interest in the First Mortgage Bonds and all such rights, powers, duties and obligations of the predecessor Collateral Agent hereunder, and the predecessor Collateral Agent shall also promptly assign and deliver to the successor Collateral Agent any First Mortgage Bonds which may then be in its possession.  The Company, to the extent requested by any holder of the Notes or the Collateral Agent shall procure any and all documents, conveyances or instruments and execute the same, to the extent required, in order to reflect the transfer to the successor Collateral Agent.
 
Section 23.14      Eligibility of Collateral Agent.  Any successor Collateral Agent shall be (a) a state or national bank or trust company in good standing, organized under the laws of the United States of America or of any state, having capital, surplus and undivided profits aggregating at least $500,000,000 and subject to supervision or examination by a Federal or state banking authority and (b) authorized under the laws of the jurisdiction of its incorporation or organization to assume the functions of the Collateral Agent, if there be such a bank or trust company willing and able to accept the duties hereunder upon reasonable and customary terms.
 
Section 23.15      Successor Collateral Agent by Merger.  Any corporation into which the Collateral Agent may be merged or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which the Collateral Agent shall be a party, or any state or national bank or trust company in any manner succeeding to the corporate trust business of the Collateral Agent as a whole or substantially as a whole, if eligible as provided in Section 23.14, shall be the successor of the Collateral Agent hereunder without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything to the contrary contained herein notwithstanding.
 
Section 23.16       Compensation and Reimbursement of Collateral Agent.  The Company agrees:
 
(a)         to pay to the Collateral Agent all of its out-of-pocket expenses in connection with the preparation, execution and delivery of this Agreement and the First Mortgage Bond Documents and the transactions contemplated hereby, including but not limited to the reasonable charges and disbursements of its special counsel;

-47-
(b)        to pay to the Collateral Agent from time to time reasonable compensation for all services rendered by it hereunder;
 
(c)        to reimburse the Collateral Agent upon its request for all reasonable expenses, disbursements and advances incurred or made by the Collateral Agent in accordance with any provision of this Agreement (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as shall have been caused by its own gross negligence or willful misconduct; and
 
(d)       to indemnify the Collateral Agent for, and to hold it harmless against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs or disbursements of any kind whatsoever imposed on, incurred by or asserted against the Collateral Agent without gross negligence or willful misconduct on its part, at any time (including without limitation, at any time following the payment of the Notes), arising out of or in connection with this Agreement or any First Mortgage Bond Document or any action taken or omitted by it thereunder or in connection therewith, including, but not limited to, the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder, and any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs or disbursements of any kind whatsoever or claims arising out of its possession or control, of the First Mortgage Bonds.
 
Notwithstanding any other provision of this Agreement or the First Mortgage Bond Documents, the Collateral Agent shall in all cases be fully justified in failing or refusing to act hereunder unless it shall be indemnified to its satisfaction by the Company or, to the extent it is not satisfactorily indemnified by the Company, the holders of the Notes against any and all liability and expense that may be incurred by it by reason of taking or continuing to take any such action.
 
Section 23.17      Self Dealing.  In the event that a holder serves as the Collateral Agent, such holder acting in its capacity as such shall have the same rights and powers under this Agreement and the Notes as any other holder and may exercise or refrain from exercising the same as though it were not the Collateral Agent.  Without limiting the generality of the foregoing, the Collateral Agent or any holding company, trust company or corporation in or with which the Collateral Agent or the Collateral Agent’s stockholders may be interested or affiliated, or any officer or director of the Collateral Agent, or of any other such entity, or any agent appointed by the Collateral Agent, may have commercial relations or otherwise deal with any of the holders, or with any other corporation having relations with any of the holders, and with any other entity, whether or not affiliated with the Collateral Agent.
 
Section 23.18       Third Party Beneficiary.  The Collateral Agent is hereby deemed a third party beneficiary of Section 23 of this Agreement.

-48-
The execution hereof by the Purchasers shall constitute a contract between the Company and the Purchasers for the uses and purposes and on the terms hereinabove set forth.

 
Very truly yours,
   
 
New Jersey Natural Gas Company
   
 
By
/s/ Daniel Sergott
   
Name:
Daniel Sergott
   
Title:
Treasurer

[Signature Page to Note Purchase Agreement]

The foregoing is hereby agreed
to as of the date hereof.

 
Banner Life Insurance Company
      
 
By:
Legal & General Investment Management
   
America, Inc., its Investment Manager

 
By:
/s/ Edward Wood 
 

Name: Edward Wood
 

Title:
 Head of Private Credit Investment, North America

 
Legal and General Assurance Society Limited
     
 
By:
Legal & General Investment Management
   
America, Inc., its Investment Manager

 
By:
 /s/ Edward Wood 
 

Name: Edward Wood
 

Title:
 Head of Private Credit Investment, North America  

[Signature Page to Note Purchase Agreement]

The foregoing is hereby agreed
to as of the date hereof.

 
Massachusetts Mutual Life Insurance Company
   
 
By:
Empower Capital Management, LLC, as Investment Manager

 
By:
/s/ Ward Argust
 
Name:
 Ward Argust
 
Title:
 Authorized Signatory

[Signature Page to Note Purchase Agreement]

The foregoing is hereby agreed
to as of the date hereof.

 
RBC Life Insurance Company
     
 
By:
 /s/ Rino D’Onofrio
 
Name:
Rino D’Onofrio
 
Title:
President & CEO
     
 
By:
 /s/ Michael Logan
 
Name:
Michael Logan
 
Title:
Vice President, Investments, Insurance

[Signature Page to Note Purchase Agreement]

The foregoing is hereby agreed
to as of the date hereof.

 
American Family Life Insurance Company
    
 
By:
/s/ David L. Voge
 
Name:
David L. Voge
 
Title:
Director Private Markets

[Signature Page to Note Purchase Agreement]

The foregoing is hereby agreed
to as of the date hereof.

 
CMFG Life Insurance Company
     
 
By:
MEMBERS Capital Advisors, Inc., as Investment Advisor

 
By:
 /s/ Stan J. Van Aartsen
 
Name:
Stan J. Van Aartsen
 
Title:
Managing Director, Investments

 
American Memorial Life Insurance Company
   
 
By:
MEMBERS Capital Advisors, Inc., as Investment Advisor
     
 
By:
/s/ Stan J. Van Aartsen
 
Name:
Stan J. Van Aartsen
 
Title:
Managing Director, Investments

 
Union Security Insurance Company
     
 
By:
MEMBERS Capital Advisors, Inc., as Investment Advisor
     
 
By:
/s/ Stan J. Van Aartsen
 
Name:
Stan J. Van Aartsen
 
Title:
Managing Director, Investments

[Signature Page to Note Purchase Agreement]

The foregoing is hereby agreed
to as of the date hereof.

 
The State Life Insurance Company
     
 
By:
American United Life Insurance Company
 
Its:
Agent

 
By:
/s/ Craig Lehman
 
Name:
Craig Lehman
 
Title:
VP, Fixed Income Securities

[Signature Page to Note Purchase Agreement]

The foregoing is hereby agreed
to as of the date hereof.

 
United Farm Family Life Insurance Company
    
 
By:
/s/ Michael Lucado
 
Name:
Michael Lucado
 
Title:
Portfolio Manager

Signature Page to Note Purchase Agreement

Information Relating to Purchasers
 
 
Name and Address of Purchaser
Principal
Amount of Notes to be Purchased
     
 
Legal and General Assurance Society Limited
c/o Legal & General Investment Management America, Inc.
71 South Wacker Drive, Suite 800
Chicago, IL 60606
Attn: Private Credit
 
$30,000,000
(1)
Payments of principal and interest by wire transfer of immediately available funds to:
 
Wire instructions redacted and provided to the Company under separate cover.
 
(2)
Address all notices of payments and written confirmations of such wire transfers:
 
Legal and General Investment Management America, Inc.
71 South Wacker Drive, Suite 800
Chicago, IL 60606
Attn: Investment Operations
Email: LGIMAPCOperations@lgima.com and LGIMPrivateCreditIGUS@lgim.com
 
(3)
Address for electronic deliveries: LGIMPrivateCreditIGUS@lgim.com
 
(4)
Address for all other communications:
 
Legal and General Investment Management America, Inc.
71 South Wacker Drive, Suite 800
Chicago, IL 60606
Attn: Private Credit Team
Tel: 1-312-964-3059 / 1-312-585-0385
Email: LGIMPrivateCreditIGUS@lgim.com
 
(5)
Address for physical delivery of the Note:
 
Delivery instructions redacted and provided to Company under separate cover.
 
(6)
Nominee: None
 
(7)
U.S. Tax Identification Number: Redacted and provided to Company under separate cover

Schedule A
(to Note Purchase Agreement)

 
Name and Address of Purchaser
Principal
Amount of Notes to be Purchased
     
 
Banner Life Insurance Company
c/o Legal & General Investment Management America, Inc.
71 South Wacker Drive, Suite 800
Chicago, IL 60606
Attn: Private Credit
 
$10,000,000
(1)
Payments of principal and interest by wire transfer of immediately available funds to:
 
Wire instructions redacted and provided to the Company under separate cover.
 
(2)
Address all notices of payments and written confirmations of such wire transfers:
 
Legal and General Investment Management America, Inc.
71 South Wacker Drive, Suite 800
Chicago, IL 60606
Attn: Investment Operations
Email: LGIMAPCOperations@lgima.com and LGIMPrivateCreditIGUS@lgim.com
 
(3)
Address for electronic deliveries: LGIMPrivateCreditIGUS@lgim.com
 
(4)
Address for all other communications:
 
Legal and General Investment Management America, Inc.
71 South Wacker Drive, Suite 800
Chicago, IL 60606
Attn: Private Credit Team
Tel: 1-312-964-3059 / 1-312-585-0385
Email: LGIMPrivateCreditIGUS@lgim.com
 
(5)
Address for physical delivery of the Note:
 
Delivery instructions redacted and provided to Company under separate cover.
 
(6)
Nominee: None
 
(7)
U.S. Tax Identification Number: Redacted and provided to Company under separate cover

A-2
 
Name and Address of Purchaser
Principal
Amount of Notes to be Purchased
     
 
Massachusetts Mutual Life Insurance Company
c/o Great-West Capital Management, LLC
8525 East Orchard Road, 1T3
Greenwood Village, CO 80111
 
$26,000,000
(1)
All payments shall be made by wire transfer of immediately available funds to:
 
Wire instructions redacted and provided to the Company under separate cover.
 
(2)
Address for all notices and communications relating to payments:
 
Massachusetts Mutual Life Insurance Company
MM Investment Operations E415
1295 State Street
Springfield, MA 01111
Attn: Janelle Tarantino
With advice of payment to: MMIncomeTeam@MassMutual.com
 
copy to:
 
Massachusetts Mutual Life Insurance Company
c/o Great-West Lifeco Global Private Debt Group
330 University Avenue – U2
Toronto, Ontario M5G 1R8
Canada
Email:  debt_reporting@canadalife.com
 
(3)
Address for all other notices and communications:
 
Massachusetts Mutual Life Insurance Company
c/o Great-West Lifeco Global Private Debt Group
330 University Avenue – U2
Toronto, Ontario M5G 1R8
Canada
Email:  debt_reporting@canadalife.com
 
(4)
Address for physical delivery of the Note:
 
Delivery instructions redacted and provided to Company under separate cover.
 
(5)
Nominee: None
 
(6)
U.S. Tax Identification Number: Redacted and provided to Company under separate cover

A-3
 
Name and Address of Purchaser
Principal
Amount of Notes to be Purchased
     
 
RBC Life Insurance Company
6880 Financial Drive, Tower 1, Floor 9
Mississauga, Ontario, Canada, L5N 7Y5
 
$20,000,000
(1)
Payments of principal and interest by wire transfer of immediately available funds to:
 
Wire instructions redacted and provided to the Company under separate cover.
 
(2)
Address for all notices and communications relating to payments:
 
Manager Investment Operations
6880 Financial Drive, Tower 1, Floor 9
Mississauga, Ontario, Canada, L5N 7Y5
Fax: 905-286-4756
Email: rbcisettlements@rbc.com
 
(3)
Address for all other notices and communications:
 
Andrew Smith
Director Private Placements
6880 Financial Drive, Tower 1, Floor 9
Mississauga, Ontario, Canada, L5N 7Y5
Fax: 905-286-4756
Email: andrew.smith@rbc.com
 
(4)
Address for physical delivery of the Note:
 
Delivery instructions redacted and provided to Company under separate cover.
 
(5)
Nominee: None
 
(6)
Tax Identification Number: Redacted and provided to Company under separate cover

A-4
 
Name and Address of Purchaser
Principal
Amount of Notes to be Purchased
     
 
American Family Life Insurance Company
6000 American Parkway
Madison, WI 53783
Attn: Investment Division – Private Placements
 
$10,500,000
(1)
All payments on or in respect of the Note shall be made by Federal Funds Wire Transfer to:
 
Wire instructions redacted and provided to the Company under separate cover.
 
(2)
Address for all notices:
 
American Family Life Insurance Company
6000 American Parkway
Madison, WI 53783-0001
Attn: Investment Division-Private Placements
Email: dvoge@amfam.com; privateplacements@amfam.com and dkrebsba@amfam.com
 
(3)
Address for notices regarding audit confirmations:
 
American Family Life Insurance Company
6000 American Parkway
Madison, WI 53783-0001
Attn: Private Placements
Email: dvoge@amfam.com; privateplacements@amfam.com and dkrebsba@amfam.com
 
(4)
Address for physical delivery of the Note:
 
Delivery instructions redacted and provided to Company under separate cover.
 
(5)
Nominee: ELL & CO. nominee for American Family Life Insurance Company
 
(6)
U.S. Tax Identification Number: Redacted and provided to Company under separate cover

A-5
 
Name and Address of Purchaser
Principal
Amount of Notes to be Purchased
     
 
American Family Life Insurance Company
6000 American Parkway
Madison, WI 53783
Attn: Investment Division – Private Placements
 
$2,000,000
(1)
All payments on or in respect of the Note shall be made by Federal Funds Wire Transfer to:
 
Wire instructions redacted and provided to the Company under separate cover.
 
(2)
Address for all notices:
 
American Family Life Insurance Company
6000 American Parkway
Madison, WI 53783-0001
Attn: Investment Division-Private Placements
Email: dvoge@amfam.com; privateplacements@amfam.com and dkrebsba@amfam.com
 
(3)
Address for notices regarding audit confirmations:
 
American Family Life Insurance Company
6000 American Parkway
Madison, WI 53783-0001
Attn: Private Placements
Email: dvoge@amfam.com; privateplacements@amfam.com and dkrebsba@amfam.com
 
(4)
Address for physical delivery of the Note:
 
Delivery instructions redacted and provided to Company under separate cover.
 
(5)
Nominee: ELL & CO. nominee for American Family Life Insurance Company
 
(6)
U.S. Tax Identification Number: Redacted and provided to Company under separate cover

A-6
 
Name and Address of Purchaser
Principal
Amount of Notes to be Purchased
     
 
American Family Life Insurance Company
6000 American Parkway
Madison, WI 53783
Attn: Investment Division – Private Placements
 
$500,000
(1)
All payments on or in respect of the Note shall be made by Federal Funds Wire Transfer to:
 
Wire instructions redacted and provided to the Company under separate cover.
 
(2)
Address for all notices:
 
American Family Life Insurance Company
6000 American Parkway
Madison, WI 53783-0001
Attn: Investment Division-Private Placements
Email: dvoge@amfam.com; privateplacements@amfam.com and dkrebsba@amfam.com
 
(3)
Address for notices regarding audit confirmations:
 
American Family Life Insurance Company
6000 American Parkway
Madison, WI 53783-0001
Attn: Private Placements
Email: dvoge@amfam.com; privateplacements@amfam.com and dkrebsba@amfam.com
 
(4)
Address for physical delivery of the Note:
 
Delivery instructions redacted and provided to Company under separate cover.
 
(5)
Nominee: ELL & CO. nominee for American Family Life Insurance Company
 
(6)
U.S. Tax Identification Number: Redacted and provided to Company under separate cover

A-7
 
Name and Address of Purchaser
Principal
Amount of Notes to be Purchased
     
 
American Family Life Insurance Company
6000 American Parkway
Madison, WI 53783
Attn: Investment Division – Private Placements
 
$500,000
(1)
All payments on or in respect of the Note shall be made by Federal Funds Wire Transfer to:
 
Wire instructions redacted and provided to the Company under separate cover.
 
(2)
Address for all notices:
 
American Family Life Insurance Company
6000 American Parkway
Madison, WI 53783-0001
Attn: Investment Division-Private Placements
Email: dvoge@amfam.com; privateplacements@amfam.com and dkrebsba@amfam.com
 
(3)
Address for notices regarding audit confirmations:
 
American Family Life Insurance Company
6000 American Parkway
Madison, WI 53783-0001
Attn: Private Placements
Email: dvoge@amfam.com; privateplacements@amfam.com and dkrebsba@amfam.com
 
(4)
Address for physical delivery of the Note:
 
Delivery instructions redacted and provided to Company under separate cover.
 
(5)
Nominee: ELL & CO. nominee for American Family Life Insurance Company
 
(6)
U.S. Tax Identification Number: Redacted and provided to Company under separate cover

A-8
 
Name and Address of Purchaser
Principal
Amount of Notes to be Purchased
     
 
American Family Life Insurance Company
6000 American Parkway
Madison, WI 53783
Attn: Investment Division – Private Placements
 
$500,000
(1)
All payments on or in respect of the Note shall be made by Federal Funds Wire Transfer to:
 
Wire instructions redacted and provided to the Company under separate cover.
 
(2)
Address for all notices:
 
American Family Life Insurance Company
6000 American Parkway
Madison, WI 53783-0001
Attn: Investment Division-Private Placements
Email: dvoge@amfam.com; privateplacements@amfam.com and dkrebsba@amfam.com
 
(3)
Address for notices regarding audit confirmations:
 
American Family Life Insurance Company
6000 American Parkway
Madison, WI 53783-0001
Attn: Private Placements
Email: dvoge@amfam.com; privateplacements@amfam.com and dkrebsba@amfam.com
 
(4)
Address for physical delivery of the Note:
 
Delivery instructions redacted and provided to Company under separate cover.
 
(5)
Nominee: ELL & CO. nominee for American Family Life Insurance Company
 
(6)
U.S. Tax Identification Number: Redacted and provided to Company under separate cover

A-9
 
Name and Address of Purchaser
Principal
Amount of Notes to be Purchased
     
 
American Family Life Insurance Company
6000 American Parkway
Madison, WI 53783
Attn: Investment Division – Private Placements
 
$2,000,000
(1)
All payments on or in respect of the Note shall be made by Federal Funds Wire Transfer to:
 
Wire instructions redacted and provided to the Company under separate cover.
 
(2)
Address for all notices:
 
American Family Life Insurance Company
6000 American Parkway
Madison, WI 53783-0001
Attn: Investment Division-Private Placements
Email: dvoge@amfam.com; privateplacements@amfam.com and dkrebsba@amfam.com
 
(3)
Address for notices regarding audit confirmations:
 
American Family Life Insurance Company
6000 American Parkway
Madison, WI 53783-0001
Attn: Private Placements
Email: dvoge@amfam.com; privateplacements@amfam.com and dkrebsba@amfam.com
 
(4)
Address for physical delivery of the Note:
 
Delivery instructions redacted and provided to Company under separate cover.
 
(5)
Nominee: ELL & CO. nominee for American Family Life Insurance Company
 
(6)
U.S. Tax Identification Number: Redacted and provided to Company under separate cover

A-10
 
Name and Address of Purchaser
Principal
Amount of Notes to be Purchased
     
 
CMFG Life Insurance Company
DS-PrivatePlacements@cunamutual.com
$5,000,000
     
(1)
All payments on account of the Note held by such purchaser shall be made by wire transfer of immediately available funds for credit to:
 
Wire instructions redacted and provided to the Company under separate cover.
 
(2)
Email address for all notices of payment, wires, audit confirmations, compliance and financials:
 
DS-PrivatePlacements@cunamutual.com
 
(3)
Email address for all legal communications:
 
DS-PrivatePlacements@cunamutual.com and mcalegal@cunamutual.com
 
(4)
Address for physical delivery of the Note:
 
Delivery instructions redacted and provided to Company under separate cover.
 
(5)
Nominee: TURNKEYS & CO
 
(6)
U.S. Tax Identification Number:  Redacted and provided to Company under separate cover

A-11
 
Name and Address of Purchaser
Principal
Amount of Notes to be Purchased
     
 
American Memorial Life Insurance Company
DS-PrivatePlacements@cunamutual.com
 
$5,000,000
(1)
All payments on account of the Note held by such purchaser shall be made by wire transfer of immediately available funds for credit to:
 
Wire instructions redacted and provided to the Company under separate cover.
 
(2)
Email address for all notices of payment, wires, audit confirmations, compliance and financials:
 
DS-PrivatePlacements@cunamutual.com
 
(3)
Email address for all legal communications:
 
DS-PrivatePlacements@cunamutual.com and mcalegal@cunamutual.com
 
(4)
Address for physical delivery of the Note:
 
Delivery instructions redacted and provided to Company under separate cover.
 
(5)
Nominee: Windyseas & CO
 
(6)
U.S. Tax Identification Number:  Redacted and provided to Company under separate cover

A-12
 
Name and Address of Purchaser
Principal
Amount of Notes to be Purchased
     
 
Union Security Insurance Company
DS-PrivatePlacements@cunamutual.com
 
$2,000,000
(1)
All payments on account of the Note held by such purchaser shall be made by wire transfer of immediately available funds for credit to:
 
Wire instructions redacted and provided to the Company under separate cover.
 
(2)
Email address for all notices of payment, wires, audit confirmations, compliance and financials:
 
DS-PrivatePlacements@cunamutual.com
 
(3)
Email address for all legal communications:
 
DS-PrivatePlacements@cunamutual.com and mcalegal@cunamutual.com
 
(4)
Address for physical delivery of the Note:
 
Delivery instructions redacted and provided to Company under separate cover.
 
(5)
Nominee: WINDYRIVERS & CO
 
(6)
U.S. Tax Identification Number:  Redacted and provided to Company under separate cover

A-13
 
Name and Address of Purchaser
Principal
Amount of Notes to be Purchased
     
 
The State Life Insurance Company
One American Square, Suite 1017
Post Office Box 368
Indianapolis, IN 46206
 
$10,000,000
(1)
All payments shall be made in immediately available funds by wire transfer to the following bank account:
 
Wire instructions redacted and provided to the Company under separate cover.
 
(2)
Address for all notices:
 
American United Life Insurance Company
Attn: Mike Bullock, Securities Department
One American Square, Suite 1017
Post Office Box 368
Indianapolis, IN 46206
Email: mike.bullock@oneamerica.com
 
(3)
Address for physical delivery of the Note:
 
Delivery instructions redacted and provided to Company under separate cover.
 
(4)
Nominee: None
 
(5)
U.S. Tax Identification Number:          Redacted and provided to Company under separate cover

A-14
 
Name and Address of Purchaser
Principal
Amount of Notes to be Purchased
     
 
United Farm Family Life Insurance Company
225 S. East Street
Indianapolis, IN 46202
 
$1,000,000
(1)
All payments shall be made by bank wire transfer of immediately available funds to:
 
Wire instructions redacted and provided to the Company under separate cover.
 
(2)
Address for all notices and communications, including notices with respect to payments and written confirmation of each such payment:
 
United Farm Family Life Insurance Company
225 S. East Street
Indianapolis, IN 46202
Attn: Investment Accounting Department
Email: Michael.Lucado@infb.com and InvestmentAccounting@infarmbureau.com
 
(3)
Address for physical delivery of the Note:
 
Delivery instructions redacted and provided to Company under separate cover.
 
(4)
Nominee: None
 
(5)
Tax Identification Number: Redacted and provided to Company under separate cover

A-15
Defined Terms
 
As used herein, the following terms have the respective meanings set forth below or set forth in the Section hereof following such term:
 
“Affiliate” shall mean, (a) at any time, and with respect to any Person, any other Person that at such time directly or indirectly through one or more intermediaries Controls, or is Controlled by, or is under common Control with, such first Person and (b) any Person beneficially owning or holding, directly or indirectly, 10% or more of any class of equity or Voting Stock of the Company or any Person of which the Company beneficially own or hold, in the aggregate, directly or indirectly, 10% or more of any class of equity or Voting Stock.  As used in this definition, “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of Voting Stock, by contract or otherwise.  Unless the context otherwise clearly requires, any reference to an “Affiliate” is a reference to an Affiliate of the Company.
 
“Agreement” shall mean this Note Purchase Agreement, including all Schedules and Exhibits attached to this Agreement, as it may be amended, restated, supplemented or otherwise modified from time to time.
 
“Anti-Corruption Laws” shall mean any law or regulation in a U.S. or any non-U.S. jurisdiction regarding bribery or any other corrupt activity, including but not limited to the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act 2010.
 
“Anti-Money Laundering Laws” shall mean any law or regulation in a U.S. or any non-U.S. jurisdiction regarding money laundering, drug trafficking, terrorist-related activities or other money laundering predicate crimes, including but not limited to the Currency and Foreign Transactions Reporting Act of 1970 (otherwise known as the Bank Secrecy Act) and the USA PATRIOT Act.
 
“Asset Disposition” shall mean any Transfer except any Transfer made in the ordinary course of business and involving only property that is either (1) inventory held for sale or (2) equipment, fixtures, supplies or materials no longer required in the operation of the business of the Company or that is obsolete.
 
“Asset Disposition Prepayment Date” is defined in Section 8.8(a).
 
“Asset Disposition Prepayment Event” is defined in Section 8.8(a).
 
“Bank Credit Agreements” shall mean the Second Amended and Restated Credit Agreement by and among the Company, PNC Bank, National Association, as Administrative Agent, the banks party thereto, and JPMorgan Chase Bank, N.A., Wells Fargo Bank, National Association and Mizuho Bank, Ltd., as Syndication Agents, dated as of September 2, 2021, as the same may be amended, restated, increased, refinanced, replaced or otherwise modified or any successor thereto.
 
Schedule B
(to Note Purchase Agreement)

“Blocked Person” shall mean (a) a Person whose name appears on the list of Specially Designated Nationals and Blocked Persons published by OFAC, (b) a Person, entity, organization, country or regime that is blocked or a target of sanctions that have been imposed under U.S. Economic Sanctions Laws or (c) a Person that is an agent, department or instrumentality of, or is otherwise beneficially owned by, controlled by or acting on behalf of, directly or indirectly, any Person, entity, organization, country or regime described in clause (a) or (b).
 
“Business Day” shall mean (a) for purposes of Section 8.7 only, any day other than a Saturday, a Sunday or a day on which commercial banks in New York, New York are required or authorized to be closed and (b) for the purposes of any other provision of this Agreement, any day other than a Saturday, a Sunday or a day on which commercial banks in Wall, New Jersey or New York, New York are required or authorized to be closed.
 
“Capital Lease” shall mean, at any time, a lease with respect to which the lessee is required concurrently to recognize the acquisition of an asset and the incurrence of a liability in accordance with GAAP.
 
“Change of Control” shall mean an event or series of events by which New Jersey Resources Corporation shall cease to own 100% of the issued and outstanding common stock of the Company and 51% of the Voting Stock of the Company.
 
“Closing” is defined in Section 3.
 
“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and the rules and regulations promulgated thereunder from time to time.
 
“Collateral Agent” shall mean the party identified as collateral agent for the holders of the Notes in Section 2.2(a).
 
“Company” shall mean New Jersey Natural Gas Company, a New Jersey corporation, or any Successor Corporation.
 
“Confidential Information” is defined in Section 20.
 
“Control” is defined in the definition of “Affiliate.”  “Controlled” and “Controlling” shall have meanings correlative to the foregoing.
 
“Controlled Entity” shall mean (a) any of the Subsidiaries of the Company and any of their or the Company’s respective Controlled Affiliates and (b) if the Company has a parent company, such parent company and its Controlled Affiliates.
 
“Debt” as to any Person at any time, shall mean, without duplication, any and all indebtedness, obligations or liabilities (whether matured or unmatured, liquidated or unliquidated, direct or indirect, absolute or contingent, or joint or several) of such Person for or in respect of: (a) borrowed money, (b) amounts raised under or liabilities in respect of any note purchase or acceptance credit facility, (c) reimbursement obligations (contingent or otherwise) under any letter of credit, currency swap agreement, interest rate swap, cap, collar or floor agreement or other interest rate or currency exchange rate management device, (d) any other transaction (including forward sale or purchase agreements, Capital Leases, Synthetic Leases and conditional sales agreements) having the commercial effect of a borrowing of money entered into by such Person to finance its operations or capital requirements (but not including trade payables and accrued expenses incurred in the ordinary course of business which are not represented by a promissory note or other evidence of indebtedness and which are not more than 30 days past due), (e) the net indebtedness, obligations and liabilities of such Person under any Hedging Contract to the extent constituting “indebtedness,” as determined in accordance with GAAP, adjusted downward dollar for dollar for any related margin collateral account balances maintained  by such Person, (f) any Guaranty of any Hedging Contract described in the immediately preceding clause (e), (g) any Guaranty of Debt for borrowed money, (h) any Hybrid Security described in clause (a) of the definition of Hybrid Security or (i) the mandatory repayment obligation of the issuer of any Hybrid Security described in clause (b) of the definition of Hybrid Security.
 
B-2
“Debt Prepayment Application” shall mean, with respect to any Transfer of property, the application by the Company of cash in an amount equal to the Net Proceeds Amount with respect to such Transfer to pay Senior Debt of the Company (other than Senior Debt owing to any Affiliate and Senior Debt in respect of any revolving credit or similar credit facility providing the Company with the right to obtain loans or other extensions of credit from time to time, except to the extent that in connection with such payment of Senior Debt the availability of credit under such credit facility is permanently reduced by an amount not less than the amount of such proceeds applied to the payment of such Senior Debt); provided that in the course of making such application the Company shall offer to prepay each outstanding Note in accordance with Section 8.8 in a principal amount that equals the Ratable Portion for such Note.
 
“Default” shall mean an event or condition the occurrence or existence of which would, with the lapse of time or the giving of notice or both, become an Event of Default.
 
“Default Rate” as of any date shall mean, with respect to the Notes, that rate of interest that is the greater of (a) 2.00% per annum over the rate of interest specified in the first paragraph of such Note, or (b) 2.00% per annum over the rate of interest publicly announced by PNC Bank, National Association as its “base” or “prime” rate.
 
“Disclosure Documents” is defined in Section 5.3.
 
“Disposition Value” shall mean, at any time, with respect to any property, the book value thereof, valued at the time of such disposition in good faith by the Company.
 
“Distribution” shall mean, in respect of any corporation, association or other business entity: (a) dividends or other distributions or payments on capital stock or other equity interests of such corporation, association or other business entity (except distributions in such stock or other equity interests); and (b) the redemption or acquisition of such stock or other equity interests (except when solely in exchange for such stock or other equity interests) unless made, contemporaneously, from the net proceeds of a sale of such stock or other equity interests.
 
“Environmental Laws” shall mean any and all Federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including but not limited to those related to Hazardous Materials.
 
B-3
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.
 
“ERISA Affiliate” shall mean any trade or business (whether or not incorporated) that is treated as a single employer together with the Company under Section 414 of the Code.
 
“Event of Default” is defined in Section 11.
 
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
 
“Fair Market Value” shall mean, at any time and with respect to any property, the sale value of such property that would be realized in an arm’s-length sale at such time between an informed and willing buyer and an informed and willing seller (neither being under a compulsion to buy or sell).
 
“FATCA” shall mean (i) sections 1471 through 1474 of the Code, as of the date hereof (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), together with any current or future regulations or official interpretations thereof, (ii) any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the United States of America and any other jurisdiction, which (in either case) facilitates the implementation of the foregoing clause (a), and (iii) any agreements entered into pursuant to section 1471(b)(1) of the Code.
 
“First Mortgage Bond Documents” is defined in Section 23.1.
 
“First Mortgage Bonds” shall mean the series of first mortgage bonds designated the “First Mortgage Bonds, Series NNN due 2052” issued by the Company pursuant to the Mortgage Indenture, as security for the Notes.
 
“GAAP” shall mean generally accepted accounting principles as in effect from time to time in the United States of America.
 
“Gas Business” shall mean the business of generating, manufacturing, purchasing, transmitting, distributing, selling and/or supplying gas and any by‑products thereof as a public utility.
 
“Governmental Authority” shall mean
 
(a)           the government of
 
(1)          the United States of America or any State or other political subdivision thereof, or
 
B-4
(2)          any jurisdiction in which the Company conducts all or any part of its business, or which asserts jurisdiction over any properties of the Company, or
 
(b)           any entity exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, any such government.
 
“Governmental Official” shall mean any governmental official or employee, employee of any government‑owned or government‑controlled entity, political party, any official of a political party, candidate for political office, official of any public international organization or anyone else acting in an official capacity.
 
“Guaranty” shall mean, with respect to any Person, any obligation (except the endorsement in the ordinary course of business of negotiable instruments for deposit or collection) of such Person guaranteeing or in effect guaranteeing any Debt, dividend or other obligation of any other Person in any manner, whether directly or indirectly, including, without limitation, obligations incurred through an agreement, contingent or otherwise, by such Person: (a) to purchase such Debt or obligation or any property constituting security therefor; (b) to advance or supply funds (1) for the purchase or payment of such Debt or obligation, or (2) to maintain any working capital or other balance sheet condition or any income statement condition of any other Person or otherwise to advance or make available funds for the purchase or payment of such Debt or obligation; (c) to lease properties or to purchase properties or services primarily for the purpose of assuring the owner of such Debt or obligation of the ability of any other Person to make payment of such Debt or obligation; or (d) otherwise to assure the owner of such Debt or obligation against loss in respect thereof.  In any computation of the Debt or other liabilities of the obligor under any Guaranty, the Debt or other obligations that are the subject of such Guaranty shall be assumed to be direct obligations of such obligor.
 
“Hazardous Materials” shall mean any and all pollutants, toxic or hazardous wastes or any other substances that might pose a hazard to health or safety, the removal of which may be required or the generation, manufacture, refining, production, processing, treatment, storage, handling, transportation, transfer, use, disposal, release, discharge, spillage, seepage or filtration of which is or shall be restricted, prohibited or penalized by any applicable law (including, without limitation, asbestos, urea formaldehyde foam insulation and polychlorinated biphenyls, petroleum, petroleum products, lead based paint, radon gas or similar restricted, prohibited or penalized substances).
 
“Hedging Contract” shall mean any transaction entered into by the Company with respect to hedging or trading of gas contracts or other commodity, hedging contracts of any kind, or any derivatives or other similar financial instruments of the Company.
 
“holder” shall mean, with respect to any Note, the Person in whose name such Note is registered in the register maintained by the Company pursuant to Section 13.1.
 
“Hybrid Security” shall mean any of the following: (a) beneficial interests issued by a trust which constitutes a Subsidiary of the Company or any Restricted Subsidiary, substantially all of the assets of which trust are unsecured Debt of the Company or any Restricted Subsidiary of the Company or any Restricted Subsidiary or proceeds thereof, and all payments of which Debt are required to be, and are, distributed to the holders of beneficial interests in such trust promptly after receipt by such trust, or (b) any shares of capital stock or other equity interest that, other than solely at the option of the issuer thereof, by their terms (or by the terms of any security into which they are convertible or exchangeable) are, or upon the happening of an event or the passage of time would be, required to be redeemed or repurchased, in whole or in part, or have, or upon the happening of an event or the passage of time would have, a redemption or similar payment.
 
B-5
“Inactive Subsidiary” shall mean, at any time, any Subsidiary of any Person, which Subsidiary (a) does not conduct any business or have operations and (b) does not have total assets with a net book value, as of any date of determination, in excess of $100,000.
 
“INHAM Exemption” is defined in Section 6.2(e).
 
“Institutional Investor” shall mean (a) any original purchaser of a Note, (b) any holder of a Note holding (together with one or more of its affiliates) more than 5% of the aggregate principal amount of any Notes then outstanding, (c) any bank, trust company, savings and loan association or other financial institution, any pension plan, any investment company, any insurance company, any broker or dealer, or any other similar financial institution or entity, regardless of legal form and (d) any Related Fund of any holder of any Note.
 
“Investment” shall mean any investment, made in cash or by delivery of property, by the Company (a) in any Person, whether by acquisition of stock, Debt or other obligation or security, or by loan, Guaranty, advance, capital contribution or otherwise or (b) in any property.
 
“Investor Presentation” is defined in Section 5.3.
 
“Lien” shall mean, with respect to any Person, any mortgage, lien, pledge, charge, security interest, or other encumbrance, or any interest or title of any vendor, lessor, lender or other secured party to or of such Person under any conditional sale or other title retention agreement or Capital Lease or Synthetic Lease, upon or with respect to any property or asset of such Person (including in the case of stock, stockholder agreements, voting trust agreements and all similar arrangements).
 
“Make-Whole Amount” is defined in Section 8.7.
 
“Material” shall mean material in relation to the business, operations, affairs, financial condition, assets or properties of the Company, taken as a whole.
 
“Material Adverse Effect” shall mean a material adverse effect on (a) the business, operations, affairs, financial condition, assets or properties of the Company, taken as a whole, or (b) the ability of the Company to perform its obligations under this Agreement and the Notes, (c) the validity or enforceability of this Agreement or the Notes, (d) the ability of the Company to perform its obligations under the Mortgage Indenture or the First Mortgage Bonds, or (e) the validity or the enforceability of the Mortgage Indenture or the First Mortgage Bonds.
 
“Mortgage Indenture” shall mean the Amended and Restated Indenture of Mortgage, Deed of Trust and Security Agreement, dated September 1, 2014, between the Company and the Mortgage Trustee, as supplemented and amended by the First Supplemental Indenture dated as of April 1, 2015, the Second Supplemental Indenture dated as of June 21, 2016, the Third Supplemental Indenture dated as of May 1, 2018, the Fourth Supplemental Indenture dated as of April 1, 2019, the Fifth Supplemental Indenture dated as of July 17, 2019, the Sixth Supplemental Indenture dated as of August 1, 2019, the Seventh Supplemental Indenture dated as of June 1, 2020, the Eighth Supplemental Indenture dated as of July 1, 2020, the Ninth Supplemental Indenture dated as of September 1, 2020, the Tenth Supplemental Indenture dated as of October 1, 2021 between the Company and the Mortgage Trustee, and the Eleventh Supplemental Indenture dated as of May 1, 2022 between the Company and the Mortgage Trustee, as further supplemented and amended by the Supplemental Indenture, and as further supplemented and amended from time to time.
 
B-6
“Mortgage Trustee” shall mean U.S. Bank Trust Company, National Association, as successor in interest to U.S. Bank National Association, as trustee under the Mortgage Indenture.
 
“Multiemployer Plan” shall mean any Plan that is a “multiemployer plan” (as such term is defined in Section 4001(a)(3) of ERISA) with respect to which the Company or any ERISA Affiliate has any liability.
 
“NAIC” shall mean the National Association of Insurance Commissioners or any successor thereto.
 
“NAIC Annual Statement” is defined in Section 6.2(a).
 
“Net Proceeds Amount” shall mean, with respect to any Transfer of any property by any Person, an amount equal to the difference of
 
(a)          the aggregate amount of the consideration (valued at the Fair Market Value of such consideration at the time of the consummation of such Transfer) received by such Person in respect of such Transfer, minus
 
(b)          all ordinary and reasonable out-of-pocket costs and expenses actually incurred by such Person in connection with such Transfer.
 
“Net Tangible Assets” shall mean the amount shown as total assets on the Company’s balance sheet, less (a) intangible assets including, but without limitation, such items as goodwill, trademarks, trade names, patents, unamortized debt discount and expense and certain regulatory assets, and (b) appropriate adjustments, if any, on account of minority interests.  Net Tangible Assets shall be determined in accordance with GAAP and practices applicable to the type of business in which the Company is engaged and approved by the independent accountants regularly retained by the Company, and may be determined as of a date not more than 60 days prior to the happening of the event for which such determination is being made.
 
“New Jersey Resources Corporation” shall mean New Jersey Resources Corporation, a New Jersey corporation.
 
“Notes” is defined in Section 1.
 
B-7
“OFAC” shall mean the Office of Foreign Assets Control of the United States Department of the Treasury.
 
“OFAC Sanctions Program” shall mean any economic or trade sanction that OFAC is responsible for administering and enforcing.  A list of OFAC Sanctions Programs may be found at http://www.treasury.gov/resource-center/sanctions/Programs/Pages/Programs.aspx.
 
“Officer’s Certificate” shall mean a certificate of a Senior Financial Officer or of any other officer of the Company whose responsibilities extend to the subject matter of such certificate.
 
“PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and defined in ERISA or any successor thereto.
 
“Permitted Related Business Opportunity” shall mean any transaction with another Person (other than any Inactive Subsidiary of New Jersey Resources Corporation) involving business activities or assets reasonably related or complementary to the business of the Company as conducted at Closing or as may be conducted pursuant to Section 10.10, including, without limitation, the management and marketing of storage, capacity and transportation of gas and other forms of energy, the generation, transmission or storage of gas and other forms of energy, or the access to gas and energy transmission lines, and business initiatives for the conservation and efficiency of gas and energy.
 
“Person” shall mean an individual, partnership, corporation, limited liability company, association, trust, unincorporated organization or a government or agency or political subdivision thereof.
 
“Plan” shall mean an “employee benefit plan” (as defined in section 3(3) of ERISA), other than a Multiemployer Plan, subject to Title I of ERISA that is maintained, or to which contributions are required to be made, by the Company or any ERISA Affiliate, or any prior “employee benefit plan” as to which the Company or any ERISA Affiliate has any liability.
 
“property” or “properties” shall mean, unless otherwise specifically limited, real or personal property of any kind, tangible or intangible, choate or inchoate.
 
“Property Reinvestment Application” shall mean, with respect to any Transfer of property, the application of an amount equal to the Net Proceeds Amount with respect to such Transfer to the acquisition by the Company of operating assets of the Company to be used in the principal business of the Company.
 
“PTE” is defined in Section 6.2(a).
 
“Purchaser” or “Purchasers” shall mean each of the purchasers whose signatures appear at the end of this Agreement and such Purchaser’s successors and assigns (so long as any such assignment complies with Section 13.2); provided, however, that any Purchaser of a Note that ceases to be the registered holder or a beneficial owner (through a nominee) of such Note as the result of a transfer thereof pursuant to Section 13.2 shall cease to be included within the meaning of “Purchaser” of such Note for the purposes of this Agreement upon such transfer.
 
B-8
“QPAM Exemption” is defined in Section 6.2(d).
 
“Ratable Portion” for any Note shall mean an amount equal to the product of (a) the Net Proceeds Amount from a Transfer being applied to a Debt Prepayment Application pursuant to Section 10.5(b) multiplied by (b) a fraction, the numerator of which is the aggregate outstanding principal amount of such Note and the denominator of which is the aggregate outstanding principal amount of all Senior Debt of the Company (other than Senior Debt owing to any Affiliate).
 
“Related Fund” shall mean, with respect to any holder of any Note, any fund or entity that (a) invests in securities or bank loans and (b) is advised or managed by such holder, the same investment advisor as such holder or by an Affiliate of such holder or such investment advisor.
 
“Required Holders” shall mean, at any time, the holders of more than 50% in principal amount of the Notes at the time outstanding (exclusive of Notes then owned by the Company or any of its Affiliates).
 
“Responsible Officer” shall mean any Senior Financial Officer and any other officer of the Company with responsibility for the administration of the relevant portion of this Agreement.
 
“Restricted Payment” shall mean any Distribution in respect of the Company, including, without limitation, any Distribution resulting in the acquisition by the Company of securities that would constitute treasury stock.  For purposes of this Agreement, the amount of any Restricted Payment made in property shall be the greater of (a) the Fair Market Value of such property (determined in good faith by the Board of Directors (or equivalent governing body) of the Person making such Restricted Payment) and (b) the net book value thereof on the books of such Person, in each case determined as of the date on which such Restricted Payment is made.
 
“Securities Act” shall mean the Securities Act of 1933, as amended from time to time and the rules and regulations promulgated thereunder from time to time in effect.
 
“Senior Debt” shall mean any Debt of the Company other than Debt that is in any manner subordinated in right of payment or security in any respect to the Debt evidenced by the Notes.
 
“Senior Financial Officer” shall mean the chief financial officer, principal accounting officer, treasurer or comptroller of the Company.
 
“Source” is defined in Section 6.2.
 
“Standard & Poor’s” shall mean S&P Global Ratings and any successor thereto.
 
“State Sanctions List” shall mean a list that is adopted by any state Governmental Authority within the United States of America pertaining to Persons that engage in investment or other commercial activities in Iran or any other country that is a target of economic sanctions imposed under U.S. Economic Sanctions Laws.
 
“Subsidiary” shall mean, as to any Person, any corporation, association, or other business entity in which such Person or one or more of its Subsidiaries or such Person and one or more of its Subsidiaries owns sufficient Voting Stock to enable it or them (as a group) ordinarily, in the absence of contingencies, to elect a majority of the directors (or Persons performing similar functions) of such entity, and any partnership or joint venture if more than a 50% interest in the profits or capital thereof is owned by such Person or one or more of its Subsidiaries or such Person and one or more of its Subsidiaries (unless such partnership or joint venture can and does ordinarily take major business actions without the prior approval of such Person or one or more of its Subsidiaries).  Unless the context otherwise clearly requires, any reference to a “Subsidiary” is a reference to a Subsidiary of the Company.
 
B-9
“Supplemental Indenture” shall mean the Twelfth Supplemental Indenture to the Mortgage Indenture, entered into between the Company and the Mortgage Trustee, pursuant to which the First Mortgage Bonds shall have been issued, in substantially the form set out in Exhibit 2.
 
“SVO” shall mean the Securities Valuation Office of the NAIC or any successor to such Office.
 
“Synthetic Lease” shall mean any lease transaction under which the parties intend that (a) the lease will be treated as an “operating lease” by the lessee pursuant to Statement of Financial Accounting Standards No. 13, as amended, or appropriate successor thereto, and (b) the lessee will be entitled to various tax benefits ordinarily available to owners (as opposed to lessees) of like property.
 
“Tangible Assets” shall mean, as of any date of determination, the total assets of the Company that would be shown as assets on a balance sheet of the Company as of such time in accordance with GAAP after subtracting therefrom the aggregate amount of all intangible assets of the Company, including, without limitation, all goodwill, franchises, licenses, patents, trademarks, trade name, copyrights, service marks and brand names.
 
“Transfer” shall mean, with respect to any Person, any transaction in which such Person sells, conveys, transfers or leases (as lessor) any of its property.  For purposes of determining the application of the Net Proceeds Amount in respect of any Transfer, the Company may designate any Transfer as one or more separate Transfers each yielding a separate Net Proceeds Amount.  In any such case, (a) the Disposition Value of any property subject to each such separate Transfer and (b) the amount of Tangible Assets attributable to any property subject to each such separate Transfer shall be determined by ratably allocating the aggregate Disposition Value of, and the aggregate Tangible Assets attributable to, all property subject to all such separate Transfers to each such separate Transfer on a proportionate basis.
 
“Trust Estate” shall mean substantially all operating properties and franchises (other than excepted property, such as cash in hand, chooses in action, securities, rent, and certain materials, supplies, appliances and vehicles) that the Company currently owns or that it will acquire in the future, subject to certain permitted encumbrances and any pre-existing Liens at the time of such acquisition, that serve as collateral under the Mortgage Indenture.
 
“USA PATRIOT Act” shall mean United States Public Law 107-56, Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.
 
B-10
“U.S. Economic Sanctions Laws” shall mean those laws, executive orders, enabling legislation or regulations administered and enforced by the United States pursuant to which economic sanctions have been imposed on any Person, entity, organization, country or regime, including the Trading with the Enemy Act, the International Emergency Economic Powers Act, the Iran Sanctions Act, the Sudan Accountability and Divestment Act and any other OFAC Sanctions Program.
 
“Voting Stock” shall mean any securities of any class of a Person whose holders are entitled under ordinary circumstances to vote for the election of directors of such Person (or Persons performing similar functions) irrespective of whether at the time securities of any other class shall have or might have voting power by reason of the happening of any contingency.

B-11
Changes in Corporate Structure

None.

Schedule 4.9
(to Note Purchase Agreement)

Disclosure Materials
 
The Annual Report of New Jersey Natural Gas Company for the fiscal year ended September 30, 2021 and the Quarterly Reports of New Jersey Natural Gas Company for the quarters ended December 31, 2021, March 31, 2022 and June 20, 2022 which are located at https://investor.njresources.com/financials/njng-financial-reports/default.aspx.
 
The Current Reports on Form 8-K of New Jersey Resources Corporation dated as of November 3, 2021, June 1, 2022 and September 6, 2022.

Schedule 5.3
(to Note Purchase Agreement)

Financials
 
NEW JERSEY NATURAL GAS COMPANY
 
Annual Reports for each of the Fiscal Years Ended September 30, 2017 through September 30, 2021, which are located at https://investor.njresources.com/financials/njng-financial-reports/default.aspx.

Schedule 5.5
(to Note Purchase Agreement)

Certain Litigation

None.
 
Schedule 5.8
(to Note Purchase Agreement)

Patents, Etc. 

None.

Schedule 5.11
(to Note Purchase Agreement)

Use of Proceeds

The Company will apply the proceeds of the sale of the Notes for general corporate purposes, including, but not limited to, refinancing or retiring short-term debt and funding capital expenditures.

Schedule 5.14
(to Note Purchase Agreement)

Existing Debt

June 30, 2022

First Mortgage Bonds
  
Rate
Maturity date
  
Principal
Amount
  
Series OO
  
3.00%
8/1/2041
  
$
46,500,000
  
Series PP
  
3.15%
4/15/2028
  
$
50,000,000
  
Series QQ
  
3.58%
3/13/2024
  
$
70,000,000
  
Series RR
  
4.61%
3/13/2044
  
$
55,000,000
  
Series SS
  
2.82%
4/15/2025
  
$
50,000,000
  
Series TT
  
3.66%
4/15/2045
  
$
100,000,000
  
Series UU
  
3.63%
6/21/2046
  
$
125,000,000
  
Series VV
  
4.01%
5/11/2048
  
$
125,000,000
  
Series WW
  
3.50%
4/1/2042
  
$
10,300,000
  
Series XX
  
3.38%
4/1/2038
  
$
10,500,000
  
Series YY
  
2.45%
4/1/2059
  
$
15,000,000
  
Series ZZ
  
3.76%
7/17/2049
  
$
100,000,000
  
Series AAA
  
3.86%
7/17/2059
  
$
85,000,000
  
Series BBB
  
2.75%
8/1/2039
  
$
9,545,000
  
Series CCC
  
3.00%
8/1/2043
  
$
41,000,000
  
Series DDD
  
3.13%
6/30/2050
  
$
50,000,000
  
Series EEE
  
3.13%
7/23/2050
  
$
50,000,000
  
Series FFF
  
3.33%
7/23/2060
  
$
25,000,000
  
Series GGG
  
2.87%
9/1/2050
  
$
25,000,000
  
Series HHH
  
2.97%
9/1/2060
  
$
50,000,000
  
Series III
  
2.97%
10/30/2051
  
$
50,000,000
  
Series JJJ
  
3.07%
10/28/2061
  
$
50,000,000
  
Series LLL
  
4.37%
5/27/2037
  
$
50,000,000
  
Series MMM
  
4.71%
5/27/2052
  
$
50,000,000
  
                 
Sub-Total First Mortgage Bonds
      
$
1,292,845,000
  
                 
Capital lease obligation-Meters
  
Various dates
  
$
31,895,000
  
                 
Commercial Paper
            
-
  
                 
Less: Debt Issuance Costs
      
$
(10,461,000
)
                 
Total New Jersey Natural Gas Debt
      
$
1,314,279,000
  

Schedule 5.15
(to Note Purchase Agreement)

Form of Note
 
New Jersey Natural Gas Company
 
5.47% Senior Note, Series 2022C, due October 24, 2052

No. 2022CR-[__]
$[____________]
[_________ __], 20[__]
PPN: 645869 K*8

For value received, the undersigned, New Jersey Natural Gas Company (herein called the “Company”), a corporation organized and existing under the laws of the State of New Jersey, hereby promises to pay to ________________, or registered assigns, the principal sum of ________________ Dollars on October 24, 2052 (the “Maturity Date”), with interest (computed on the basis of a 360‑day year of twelve 30‑day months) (a) on the unpaid balance thereof at the rate of 5.47% per annum from the date hereof, payable semiannually, on the twenty-fourth day of April and October in each year, commencing with the April 24th or October 24th next succeeding the date hereof, and on the Maturity Date, until the principal hereof shall have become due and payable, and (b) to the extent permitted by law on any overdue payment (including any overdue prepayment) of principal, any overdue payment of interest and any overdue payment of any Make-Whole Amount (as defined in the Note Purchase Agreement referred to below), payable semiannually as aforesaid (or, at the option of the registered holder hereof, on demand), at a rate per annum from time to time equal to the Default Rate (as defined in the Note Purchase Agreement referred to below).
 
Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are to be made in lawful money of the United States of America at the office of U.S. Bank Trust Company, National Association designated pursuant to the Note Purchase Agreement or at such other place as the Company shall have designated by written notice to the holder of this Note as provided in the Note Purchase Agreement referred to below.
 
This Note is one of a series of 5.47% Senior Notes (herein called the “Notes”) issued pursuant to the Note Purchase Agreement dated as of October 24, 2022 (as from time to time amended, the “Note Purchase Agreement”), between the Company and the respective Purchasers named therein and is entitled to the benefits thereof. Each holder of this Note will be deemed, by its acceptance hereof, (1) to have agreed to the confidentiality provisions set forth in Section 20 of the Note Purchase Agreement and (2) to have made the representation set forth in Section 6.2 of the Note Purchase Agreement.  Unless otherwise indicated, capitalized terms used in this Note shall have the respective meanings ascribed to such terms in the Note Purchase Agreement.
 
This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender of this Note for registration of transfer, duly endorsed, or accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee. Prior to due presentment for registration of transfer, the Company may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company will not be affected by any notice to the contrary.
 
Exhibit 1
(to Note Purchase Agreement)

This Note is subject to prepayment, in whole or from time to time in part, at the times and on the terms specified in the Note Purchase Agreement, but not otherwise.
 
If an Event of Default occurs and is continuing, the principal of this Note may be declared or otherwise become due and payable in the manner, at the price (including any applicable Make-Whole Amount) and with the effect provided in the Note Purchase Agreement.
 
This Note shall be construed and enforced in accordance with, and the rights of the Company and the holder of this Note shall be governed by, the laws of the State of New York excluding the choice of law principles of the law of such State that would require the application of the laws of a jurisdiction other than such State.
 
 
New Jersey Natural Gas Company
     
 
By:
 
 
Name:
 
Title:

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Form of Supplemental Indenture


MORTGAGE

NEW JERSEY NATURAL GAS COMPANY

To

U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
As Trustee


TWELFTH SUPPLEMENTAL INDENTURE

Dated as of October 1, 2022


Supplemental to Amended and Restated Indenture of Mortgage,
Deed of Trust and Security Agreement Dated as of September 1, 2014,
As Supplemented and Amended


Prepared by: Eric A. Koontz Record and Return to:
Richard Reich, Esq.

Troutman Pepper Hamilton Sanders LLP
NJR Service Corporation

600 Peachtree Street, NE, Suite 3000
1415 Wyckoff Road

Atlanta, GA 30308
Wall, New Jersey 07719
 
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MORTGAGE
 
TWELFTH SUPPLEMENTAL INDENTURE, dated as of October 1, 2022, between NEW JERSEY NATURAL GAS COMPANY, a corporation organized and existing under the laws of the State of New Jersey (hereinafter called the “Company”), having its principal office at 1415 Wyckoff Road, Wall, New Jersey, and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as successor in interest to U.S. BANK NATIONAL ASSOCIATION, a national banking association (hereinafter called the “Trustee”), having a principal office at 333 Thornall Street, 4th Floor, Edison, New Jersey 08837, as Trustee under the Amended and Restated Indenture of Mortgage, Deed of Trust and Security Agreement hereinafter mentioned.
 
WHEREAS, the Company has heretofore executed and delivered to the Trustee its Amended and Restated Indenture of Mortgage, Deed of Trust and Security Agreement, dated as of September 1, 2014 (the “Amended and Restated Indenture” and, as originally executed or as the same may from time to time be supplemented, modified or amended by any supplemental indenture entered into pursuant to the provisions thereof, the “Indenture”), to secure the payment of the principal of and the interest and premium (if any) on all Bonds at any time issued and outstanding thereunder, and to declare the terms and conditions upon which Bonds are to be issued thereunder; and
 
WHEREAS, the Amended and Restated Indenture completely restated and amended the Indenture of Mortgage and Deed of Trust, dated April 1, 1952, as heretofore supplemented and amended (the “Original Indenture”) without any interruption of the Lien of the Original Indenture; and
 
WHEREAS, Bonds in the aggregate principal amount of $10,300,000, originally issued under and in accordance with the terms of the Original Indenture, as supplemented and amended, as a series designated “First Mortgage Bonds, Series II due 2023,” herein sometimes called “2023 Series II Bonds,” were designated as Existing Bonds in Section 3.01 of the Indenture, provided that such 2023 Series II Bonds have since been retired by the Company and replaced with the 2042 Series WW Bonds (as hereinafter defined); and
 
WHEREAS, Bonds in the aggregate principal amount of $10,500,000, originally issued under and in accordance with the terms of the Original Indenture, as supplemented and amended, as a series designated “First Mortgage Bonds, Series JJ due 2024,” herein sometimes called “2024 Series JJ Bonds,” were designated as Existing Bonds in Section 3.02 of the Indenture, provided that such 2024 Series JJ Bonds have since been retired by the Company and replaced with the 2038 Series XX Bonds (as hereinafter defined); and
 
WHEREAS, Bonds in the aggregate principal amount of $15,000,000, originally issued under and in accordance with the terms of the Original Indenture, as supplemented and amended, as a series designated “First Mortgage Bonds, Series KK due 2040,” herein sometimes called “2040 Series KK Bonds,” were designated as Existing Bonds in Section 3.03 of the Indenture, provided that such 2040 Series KK Bonds have since been retired by the Company and replaced with the 2059 Series YY Bonds (as hereinafter defined); and
 
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WHEREAS, Bonds in the aggregate principal amount of $125,000,000, originally issued under and in accordance with the terms of the Original Indenture, as supplemented and amended, as a series designated “First Mortgage Bonds, Series LL due 2018,” herein sometimes called “2018 Series LL Bonds,” were designated as Existing Bonds in Section 3.04 of the Indenture, which 2018 Series LL Bonds have since been paid at maturity by the Company; and
 
WHEREAS, Bonds in the aggregate principal amount of $9,545,000, originally issued under and in accordance with the terms of the Original Indenture, as supplemented and amended, as a series designated “First Mortgage Bonds, Series MM due 2027,” herein sometimes called “2027 Series MM Bonds,” were designated as Existing Bonds in Section 3.05 of the Indenture, provided that such 2027 Series MM Bonds have since been retired by the Company and replaced with the 2039 Series BBB Bonds (as hereinafter defined); and
 
WHEREAS, Bonds in the aggregate principal amount of $41,000,000, originally issued under and in accordance with the terms of the Original Indenture, as supplemented and amended, as a series designated “First Mortgage Bonds, Series NN due 2035,” herein sometimes called “2035 Series NN Bonds,” were designated as Existing Bonds in Section 3.06 of the Indenture, provided that such 2035 Series NN Bonds have since been retired by the Company and replaced with the 2043 Series CCC Bonds (as hereinafter defined); and
 
WHEREAS, Bonds in the aggregate principal amount of $46,500,000, originally issued under and in accordance with the terms of the Original Indenture, as supplemented and amended, as a series designated “First Mortgage Bonds, Series OO due 2041,” herein sometimes called “2041 Series OO Bonds,” have been designated as Existing Bonds in Section 3.07 of the Indenture and are outstanding at the date hereof and secured by the Indenture; and
 
WHEREAS, Bonds in the aggregate principal amount of $50,000,000, originally issued under and in accordance with the terms of the Original Indenture, as supplemented and amended, as a series designated “First Mortgage Bonds, Series PP due 2028,” herein sometimes called “2028 Series PP Bonds,” have been designated as Existing Bonds in Section 3.08 of the Indenture and are outstanding at the date hereof and secured by the Indenture; and
 
WHEREAS, Bonds in the aggregate principal amount of $70,000,000, originally issued under and in accordance with the terms of the Original Indenture, as supplemented and amended, as a series designated “First Mortgage Bonds, Series QQ due 2024,” herein sometimes called “2024 Series QQ Bonds,” have been designated as Existing Bonds in Section 3.09 of the Indenture and are outstanding at the date hereof and secured by the Indenture; and
 
WHEREAS, Bonds in the aggregate principal amount of $55,000,000, originally issued under and in accordance with the terms of the Original Indenture, as supplemented and amended, as a series designated “First Mortgage Bonds, Series RR due 2044,” herein sometimes called “2044 Series RR Bonds,” have been designated as Existing Bonds in Section 3.10 of the Indenture and are outstanding at the date hereof and secured by the Indenture; and
 
WHEREAS, the Amended and Restated Indenture provides that, subject to certain exceptions not presently relevant, such changes in or additions to the provisions of the Indenture (terms used herein having the meanings assigned thereto in the Amended and Restated Indenture except as herein expressly modified) may be made to add to the covenants and agreements of the Company in the Indenture contained other covenants and agreements thereafter to be observed by the Company; and to provide for the creation of any series of Bonds, designating the series to be created and specifying the form and provisions of the Bonds of such series as in the Indenture provided or permitted; and
 
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WHEREAS, the Indenture further provides that the Company and the Trustee may enter into indentures supplemental to the Indenture to assign, convey, mortgage, pledge, transfer and set over unto the Trustee and to subject to the lien of the Indenture additional property of the Company; and
 
WHEREAS, pursuant to the Amended and Restated Indenture as amended by the First Supplemental Indenture, dated as of April 1, 2015, between the Company and the Trustee, the Company determined to amend certain provisions of the Amended and Restated Indenture and to create an eleventh and a twelfth series of Bonds under the Indenture, known as (i) “First Mortgage Bonds, Series SS due 2025,” herein sometimes called “2025 Series SS Bonds,” and (ii) “First Mortgage Bonds, Series TT due 2045,” herein sometimes called “2045 Series TT Bonds,” respectively; and
 
WHEREAS, pursuant to the Amended and Restated Indenture as amended by the Second Supplemental Indenture, dated as of June 21, 2016, between the Company and the Trustee, the Company determined to amend certain provisions of the Amended and Restated Indenture and to create a thirteenth series of Bonds under the Indenture, known as “First Mortgage Bonds, Series UU due 2046,” herein sometimes called “2046 Series UU Bonds”; and
 
WHEREAS, pursuant to the Amended and Restated Indenture as amended by the Third Supplemental Indenture, dated as of May 1, 2018, between the Company and the Trustee, the Company determined to amend certain provisions of the Amended and Restated Indenture and to create a fourteenth series of Bonds under the Indenture, known as “First Mortgage Bonds, Series VV due 2048,” herein sometimes called “2048 Series VV Bonds”; and
 
WHEREAS, pursuant to the Amended and Restated Indenture as amended by the Fourth Supplemental Indenture, dated as of April 1, 2019, between the Company and the Trustee, the Company determined to amend certain provisions of the Amended and Restated Indenture and to create a fifteenth, a sixteenth and a seventeenth series of Bonds under the Indenture, known as (i) “First Mortgage Bonds, Series WW due 2042,” herein sometimes called “2042 Series WW Bonds,” (ii) “First Mortgage Bonds, Series XX due 2038,” herein sometimes called “2038 Series XX Bonds,” and (iii) (ii) “First Mortgage Bonds, Series YY due 2059,” herein sometimes called “2059 Series YY Bonds,” respectively; and
 
WHEREAS, pursuant to the Amended and Restated Indenture as amended by the Fifth Supplemental Indenture, dated as of July 1, 2019, between the Company and the Trustee, the Company determined to amend certain provisions of the Amended and Restated Indenture and to create an eighteenth and nineteenth series of Bonds under the Indenture, known as (i) “First Mortgage Bonds, Series ZZ due 2049,” herein sometimes called “2049 Series ZZ Bonds,” and (ii) “First Mortgage Bonds, Series AAA due 2059,” herein sometimes called “2059 Series AAA Bonds,” respectively; and
 
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WHEREAS, pursuant to the Amended and Restated Indenture as amended by the Sixth Supplemental Indenture, dated as of August 1, 2019, between the Company and the Trustee, the Company determined to amend certain provisions of the Amended and Restated Indenture and to create a twentieth and twenty-first series of Bonds under the Indenture, known as (i) “First Mortgage Bonds, Series BBB due 2039,” herein sometimes called “2039 Series BBB Bonds” (to replace the 2027 Series MM Bonds) and (ii) “First Mortgage Bonds, Series CCC due 2043,” herein sometimes called “2043 Series CCC Bonds” (to replace the 2035 Series NN Bonds), respectively; and
 
WHEREAS, pursuant to the Amended and Restated Indenture as amended by the Seventh Supplemental Indenture, dated as of June 1, 2020, between the Company and the Trustee, the Company determined to amend certain provisions of the Amended and Restated Indenture and to create a twenty-second series of Bonds under the Indenture, known as “First Mortgage Bonds, Series DDD due 2050,” herein sometimes called “2050 Series DDD Bonds”; and
 
WHEREAS, pursuant to the Amended and Restated Indenture as amended by the Eighth Supplemental Indenture, dated as of July 1, 2020, between the Company and the Trustee, the Company determined to amend certain provisions of the Amended and Restated Indenture and to create a twenty-third and twenty-fourth series of Bonds under the Indenture, known as (i) “First Mortgage Bonds, Series EEE due 2050,” herein sometimes called “2050 Series EEE Bonds” and (ii) “First Mortgage Bonds, Series FFF due 2060,” herein sometimes called “2060 Series FFF Bonds,” respectively; and
 
WHEREAS, pursuant to the Amended and Restated Indenture as amended by the Ninth Supplemental Indenture, dated as of September 1, 2020, between the Company and the Trustee, the Company determined to amend certain provisions of the Amended and Restated Indenture and to create a twenty-fifth and twenty-sixth series of Bonds under the Indenture, known as (i) “First Mortgage Bonds, Series GGG due 2050,” herein sometimes called “2050 Series GGG Bonds” and (ii) “First Mortgage Bonds, Series HHH due 2060,” herein sometimes called “2060 Series HHH Bonds,” respectively; and
 
WHEREAS, pursuant to the Amended and Restated Indenture as amended by the Tenth Supplemental Indenture, dated as of October 1, 2021, between the Company and the Trustee, the Company determined to amend certain provisions of the Amended and Restated Indenture and to create a twenty-seventh and twenty-eighth series of Bonds under the Indenture, known as (i) “First Mortgage Bonds, Series III due 2051,” herein sometimes called “2051 Series III Bonds” and (ii) “First Mortgage Bonds, Series JJJ due 2061,” herein sometimes called “2061 Series JJJ Bonds,” respectively; and
 
WHEREAS, pursuant to the Amended and Restated Indenture as amended by the Eleventh Supplemental Indenture, dated as of May 1, 2022, between the Company and the Trustee, the Company determined to amend certain provisions of the Amended and Restated Indenture and to create a twenty-ninth and thirtieth series of Bonds under the Indenture, known as (i) “First Mortgage Bonds, Series LLL due 2037,” herein sometimes called “2037 Series LLL Bonds” and (ii) “First Mortgage Bonds, Series MMM due 2052,” herein sometimes called “2052 Series MMM Bonds,” respectively; and
 
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WHEREAS, (i) the 2025 Series SS Bonds were issued in and are currently outstanding under the Indenture in the aggregate principal amount of $50,000,000, (ii) the 2045 Series TT Bonds were issued in and are currently outstanding under the Indenture in the aggregate principal amount of $100,000,000, (iii) the 2046 Series UU Bonds were issued in and are currently outstanding under the Indenture in the aggregate principal amount of $125,000,000, (iv) the 2048 Series VV Bonds were issued in and are currently outstanding under the Indenture in the aggregate principal amount of $125,000,000, (v) the 2042 Series WW Bonds were issued in and are currently outstanding under the Indenture in the aggregate principal amount of $10,300,000, (vi) the 2038 Series XX Bonds were issued in and are currently outstanding under the Indenture in the aggregate principal amount of $10,500,000, (vii) the 2059 Series YY Bonds were issued in and are currently outstanding under the Indenture in the aggregate principal amount of $15,000,000, (viii) the 2049 Series ZZ Bonds were issued in and are currently outstanding under the Indenture in the aggregate principal amount of $100,000,000, (ix) the 2059 Series AAA Bonds were issued in and are currently outstanding under the Indenture in the aggregate principal amount of $85,000,000, (x) the 2039 Series BBB Bonds were issued in and are currently outstanding under the Indenture in the aggregate principal amount of $9,545,000, (xi) the 2043 Series CCC Bonds were issued in and are currently outstanding under the Indenture in the aggregate principal amount of $41,000,000, (xii) the 2050 Series DDD Bonds were issued in and are currently outstanding under the Indenture in the aggregate principal amount of $50,000,000, (xiii) the 2050 Series EEE Bonds were issued in and are currently outstanding under the Indenture in the aggregate principal amount of $50,000,000, (xiv) the 2060 Series FFF Bonds were issued in and are currently outstanding under the Indenture in the aggregate principal amount of $25,000,000, (xv) the 2050 Series GGG Bonds were issued in and are currently outstanding under the Indenture in the aggregate principal amount of $25,000,000, (xvi) the 2060 Series HHH Bonds were issued in and are currently outstanding under the Indenture in the aggregate principal amount of $50,000,000, (xvii) the 2051 Series III Bonds were issued in and are currently outstanding under the Indenture in the aggregate principal amount of $50,000,000, (xviii) the 2061 Series JJJ Bonds were issued in and are currently outstanding under the Indenture in the aggregate principal amount of $50,000,000, (xix) the 2037 Series LLL Bonds were issued in and are currently outstanding under the Indenture in the aggregate principal amount of $50,000,000 and (xx) the 2052 Series MMM Bonds were issued in and are currently outstanding under the Indenture in the aggregate principal amount of $50,000,000; and
 
WHEREAS, the Company will enter into a Note Purchase Agreement dated as of October 24, 2022 (the “Note Purchase Agreement”) with the Purchasers identified in Schedule A attached thereto, pursuant to which the Company will issue its senior notes designated “5.47% Senior Notes, Series 2022C, due 2052” in the aggregate principal amount of $125,000,000 (the “Series 2022C Senior Notes due 2052”); and
 
WHEREAS, the Company has duly determined to create a thirty-first series of Bonds under the Indenture, to be known as “First Mortgage Bonds, Series NNN due 2052” herein sometimes called “2052 Series NNN Bonds,” to be delivered and pledged to U.S. Bank Trust Company, National Association, as successor in interest to U.S. Bank National Association, as collateral agent (the “Collateral Agent”) pursuant to the Note Purchase Agreement for the benefit and security of the holders of the Series 2022C Senior Notes due 2052, all as herein provided and as provided in the Note Purchase Agreement, and to add to the covenants and agreements contained in the Indenture, the covenants and agreements hereinafter set forth; and 
 
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WHEREAS, the Company, in the exercise of the powers and authority conferred upon and reserved to it under the provisions of the Indenture and pursuant to appropriate resolutions of its Board of Directors, has duly resolved and determined to make, execute and deliver to the Trustee a Twelfth Supplemental Indenture in the form hereof for the purposes herein provided; and
 
WHEREAS, all conditions and requirements necessary to make this Twelfth Supplemental Indenture a valid, binding and legal instrument have been done, performed and fulfilled and the execution and delivery hereof have been in all respects duly authorized.
 
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
 
That NEW JERSEY NATURAL GAS COMPANY, by way of further assurance and in consideration of the premises and of the acceptance by the Trustee of the trusts hereby created and of One Dollar to it duly paid by the Trustee at or before the ensealing and delivery of these presents, the receipt whereof is hereby acknowledged, and in order to secure the payment of principal of and any premium which may be due and payable on and the interest on all Bonds at any time issued and outstanding under the Indenture according to their tenor and effect, and the performance and observance by the Company of all the covenants and conditions herein and therein contained, has granted, bargained, sold, warranted, aliened, remised, released, conveyed, assigned, transferred, mortgaged, pledged, set over and confirmed, and by these presents does grant, bargain, sell, warrant, alien, remise, release, convey, assign, transfer, mortgage, pledge, set over and confirm, unto the Trustee, and to its successors in the trust, and to it and its assigns forever, and has granted and does hereby grant thereunto a security interest in, all of the property, real, personal and mixed, now owned by the Company and situated in the Counties of Burlington, Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset and Sussex in the State of New Jersey, or wherever situate (except Excepted Property and property released from the lien of the Indenture by the terms of the Indenture) and also all of the property, real, personal and mixed, hereafter acquired by the Company wherever situate (except Excepted Property and property released from the lien of the Indenture by the terms of the Indenture), including both as to property now owned and property hereafter acquired, without in any way limiting or impairing the enumeration of the same, the scope and intent of the foregoing or of any general or specific description contained in the Indenture, the following:
 
I.
FRANCHISES
 
All and singular, the franchises, grants, permits, immunities, privileges and rights of the Company owned and held by it at the date of the execution hereof or hereafter acquired for the construction, maintenance, and operation of the gas plants and systems now or hereafter subject to the lien hereof, as well as all certificates, franchises, grants, permits, immunities, privileges, and rights of the Company used or useful in the operation of the property now or hereafter mortgaged hereunder, including all and singular the franchises, grants, permits, immunities, privileges, and rights of the Company granted by the governing authorities of any municipalities or other political subdivisions and all renewals, extensions and modifications of said certificates, franchises, grants, permits, privileges, arid rights or any of them.
 
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II.
GAS DISTRIBUTION SYSTEMS AND RELATED PROPERTY
 
All gas generating plants, gas storage plants and gas manufacturing plants of the Company, all the buildings, erections, structures, generating and purifying apparatus, holders, engines, boilers, benches, retorts, tanks, instruments, appliances, apparatus, facilities, machinery, fixtures, and all other property used or provided for use in the generation, manufacturing and purifying of gas, together with the land on which the same are situated, and all other lands and easements, rights-of-way, permits, privileges, and sites forming a part of such plants or any of them or occupied, enjoyed or used in connection therewith.
 
All gas distribution or gas transmission systems of the Company, all buildings, erections, structures, generating and purifying apparatus, holders, engines, boilers, benches, retorts, tanks, pipe lines, connections, service pipes, meters, conduits, tools, instruments, appliances, apparatus, facilities, machinery, fixtures, and all other property used or provided for use in the construction, maintenance, repair or operations of such distribution or transmission systems, together with all the certificates, rights, privileges, rights-of-way, franchises, licenses, easements, grants, liberties, immunities, permits of the Company, howsoever conferred or acquired, under, over, or upon any private property or any public streets or highways within as well as without the corporate limits of any municipal corporation.  Without limiting the generality of the foregoing, there are expressly included the gas distribution or gas transmission systems located in the Counties of Burlington, Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset and Sussex in the State of New Jersey, and in the following municipalities in said State and Counties: Aberdeen Township (formerly Matawan Township), Allenhurst Borough, City of Asbury Park, Atlantic Highlands Borough, Avon By the Sea Borough, Barnegat Light Borough, Barnegat Township (formerly named Union Township), Bay Head Borough, Beach Haven Borough, Beachwood Borough, Belmar Borough, Berkeley Township, Boonton Town, Boonton Township, Bradley Beach Borough, Brick Township, Brielle Borough, Colts Neck Township, Deal Borough, Denville Township, Dover Town, Dover Township, Eagleswood Township, East Brunswick Township, Eatontown Borough, Englishtown Borough, Fair Haven Borough, Farmingdale Borough, Franklin Township in Somerset County, Freehold Borough, Freehold Township, Hanover Township, Harvey Cedars Borough, Hazlet Township, Highlands Borough, Holmdel Township, Hopatcong Borough, Howell Township, Interlaken Borough, Island Heights Borough, Jackson Township, Jefferson Township, Keansburg Borough, Keyport Borough, Lacey Township, Lakehurst Borough, Lakewood Township, Lavallette Borough, Lincoln Park Borough, Little Egg Harbor Township, Little Silver Borough, Loch Arbour Village, Long Beach Township, Long Branch City, Manalapan Township, Manasquan Borough, Manchester Township, Mantoloking Borough, Marlboro Township, Matawan Borough, Middletown Township, Milltown Borough, Mine Hill Township, Monmouth Beach Borough, Monroe Township, Montville Township, Morris Plains Borough, Mount Arlington Borough, Mount Olive Township, Mountain Lakes Borough, Neptune City Borough, Neptune Township, Netcong Borough, New Brunswick City, North Brunswick Township, Ocean Township in Monmouth County, Ocean Township in Ocean County, Ocean Gate Borough, Oceanport Borough, Old Bridge Township (formerly named Madison Township), Parsippany-Troy Hills Township, Pine Beach Borough, Point Pleasant Borough, Point Pleasant Beach Borough, Randolph Township, Red Bank Borough, Rockaway Borough, Rockaway Township, Roxbury Township, Rumson Borough, Sayreville Borough, Sea Bright Borough, Sea Girt Borough, Seaside Heights Borough, Seaside Park Borough, Ship Bottom Borough, Shrewsbury Borough, Shrewsbury Township, South Belmar Borough, South Brunswick Township, South River Borough, South Toms River Borough, Spring Lake Borough, Spring Lake Heights Borough, Stafford Township, Surf City Borough, Tinton Falls Borough (formerly named New Shrewsbury Borough), Tuckerton Borough, Union Beach Borough, Union Township, Victory Gardens Borough, Wall Township, Washington Township in Burlington County, Washington Township in Morris County, West Long Branch Borough, West Milford Township and Wharton Borough.
 
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III.
CONTRACTS
 
All of the Company’s right, title and interest in and under all contracts, licenses or leases for the purchase of gas, either in effect at the date of execution hereof or hereafter made and any extension or renewal thereof.
 
TOGETHER WITH ALL AND SINGULAR the tenements, hereditaments and appurtenances belonging or in anywise appertaining to the Trust Estate, or any part thereof, with the reversion or reversions, remainder and remainders, rents, issues, income and profits thereof, and all the right, title, interest and claim whatsoever, at law or in equity, which the Company now has or which it may hereafter acquire in and to the Trust Estate and every part and parcel thereof,
 
TO HAVE AND TO HOLD the Trust Estate and all and singular the lands, properties, estates, rights, franchises, privileges and appurtenances hereby mortgaged, conveyed, pledged or assigned, or intended so to be, together with all the appurtenances thereto appertaining, unto the Trustee and its successors and assigns forever;
 
SUBJECT, HOWEVER, as to property hereby conveyed, to Permitted Encumbrances;
 
BUT IN TRUST, NEVERTHELESS, under and subject to the terms and conditions hereafter set forth, for the equal and proportionate use, benefit, security and protection of each and every person who may be or become the holders of the Bonds hereby secured without preference, priority or distinction as to the lien or otherwise of one Bond over or from the others by reason of priority in the issue or negotiation thereof, or by reason of the date of maturity thereof, or otherwise (except as any sinking, amortization, improvement, renewal or other analogous fund, established in accordance with the provisions of the Indenture, may afford additional security for the Bonds of any particular series), and for securing the observance and performance of all the terms, provisions and conditions of the Indenture.
 
THIS INDENTURE FURTHER WITNESSETH, that the Company has agreed and covenanted, and hereby does agree and covenant, with the Trustee and its successors and assigns and with the respective holders from time to time of the Bonds, or any thereof, as follows:
 
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ARTICLE I
 
CERTAIN AMENDMENTS OF INDENTURE
 
§ 1.1.     The Indenture be and it hereby is amended in the following respects, the section numbers specified below being the sections of the Indenture in which such amendments occur:
 
§ 1.02.    The following definitions be and they hereby are added at the end of § 1.02:
 
“(rrrrr)  “Twelfth Supplemental Indenture” shall mean the Twelfth Supplemental Indenture, dated as of October 1, 2022, supplemental to the Indenture.”
 
“(sssss)  “2052 Series NNN Bond” shall mean one of the First Mortgage Bonds, Series NNN due 2052, issued hereunder.”
 
§ 2.11.    The following be and it hereby is added at the end of § 2.11:
 
“No charge except for taxes or governmental charges shall be made against any holder of any 2052 Series NNN Bond for the exchange, transfer or registration of transfer thereof.”
 
§ 8.08.    The period at the end of the first paragraph of § 8.08 be and it hereby is deleted and the following words and figures be and they hereby are added thereto:
 
“, and the 2052 Series NNN Bonds shall be redeemed at the redemption price specified in § 10.66.”
 
ARTICLE II
 
2052 SERIES NNN BONDS
 
§ 2.1.     There shall be a thirty-first series of Bonds under the Indenture, known as and entitled “First Mortgage Bonds, Series NNN due 2052” or “First Mortgage Bonds, Series NNN” (herein and in the Indenture referred to as the “2052 Series NNN Bonds”), and the form thereof shall contain suitable provisions with respect to the matters hereinafter in this Section specified and shall in other respects be substantially as set forth in Exhibit A to the Indenture.
 
The aggregate principal amount of 2052 Series NNN Bonds which may be authenticated and delivered and outstanding under the Indenture is $125,000,000.
 
The 2052 Series NNN Bonds shall be payable to the Collateral Agent, and shall be nontransferable except to a successor of the Collateral Agent, in accordance with the Note Purchase Agreement.
 
E-2-10
The 2052 Series NNN Bonds shall bear interest at the rate of 5.47% per annum, computed on the basis of a 360-day year of twelve 30-day months, until the principal thereof is paid or made available for payment, and shall mature on October 24, 2052, subject to prior redemption as described herein; provided that any principal, Make-Whole Amount (as defined in the Note Purchase Agreement), and any such installment of interest which is overdue shall bear interest at a rate of interest that is the greater of (i) 7.47% per annum or (ii) 2.00% per annum over the rate of interest publicly announced by PNC Bank, National Association as its “base” or “prime” rate (to the extent that payment of such interest is enforceable under applicable law).
 
The 2052 Series NNN Bonds shall be in the form of registered Bonds without coupons of denominations of $1,000 and any integral multiple thereof which may be authorized by the Company, the issue of a registered Bond without coupons in any such denomination to be conclusive evidence of such authorization.  Any 2052 Series NNN Bonds shall be dated (i) as of the semi-annual interest payment date (as specified in the first paragraph of the 2052 Series NNN Bonds) next preceding the date on which such 2052 Series NNN Bonds shall be authenticated, unless such 2052 Series NNN Bonds are authenticated before April 24, 2023, in which case such 2052 Series NNN Bonds shall be dated October 24, 2022 or, (ii) if such date of authentication shall be an interest payment date, such 2052 Series NNN Bonds shall be dated such interest payment date; provided, however, that, if at the time of authentication of any 2052 Series NNN Bonds interest is in default on the 2052 Series NNN Bonds, such 2052 Series NNN Bonds shall be dated as of the interest payment date to which interest has previously been paid or made available for payment on the 2052 Series NNN Bonds.  All 2052 Series NNN Bonds shall bear interest from their respective dates, such interest to be payable, upon the terms of and otherwise in accordance with the 2052 Series NNN Bonds, on each date on which interest shall from time to time be payable on the Series 2022C Senior Notes due October 24, 2052; provided, that the obligation of the Company to make payments with respect to the principal of, Make-Whole Amount, if any, and interest on the 2052 Series NNN Bonds shall be fully or partially, as the case may be, satisfied and discharged to the extent that at the time any such payment shall be due, the then due principal of, Make-Whole Amount, if any, and interest on any of the Series 2022C Senior Notes due October 24, 2052 shall have been fully or partially paid from payments made by the Company under the Note Purchase Agreement.  The principal of, Make-Whole Amount, if any, and interest on the 2052 Series NNN Bonds shall be payable at the principal office of the Trustee, in Edison, New Jersey, or, at the option of the Company, at the “principal office” (as indicated pursuant to the Note Purchase Agreement) of the Collateral Agent, in any coin or currency of the United States of America which at the time of payment shall be legal tender for the payment of public and private debts.
 
Notwithstanding any other provision of the Indenture or of the 2052 Series NNN Bonds, payments of the principal of, Make-Whole Amount, if any, and interest on any 2052 Series NNN Bond may be made directly to the registered holder thereof without presentation or surrender thereof or the making of any notation thereon if there shall be filed with the Trustee a Certificate of the Company to the effect that such registered holder (or the person for whom such registered holder is a nominee) and the Company have entered into a written agreement that payment shall be so made; provided, however, that before such registered holder transfers or otherwise disposes of any 2052 Series NNN Bond, such registered holder will, at its election, either endorse thereon (or on a paper annexed thereto) the principal amount thereof redeemed and the last date to which interest has been paid thereon or make such Bond available to the Company at the principal office of the Trustee for the purpose of making such endorsement thereon.
 
E-2-11
The 2052 Series NNN Bonds shall be subject to redemption at the option of the Company or otherwise, and shall be subject to mandatory redemption, in the manner provided in the applicable provisions of Article Ten of the Indenture, as amended by Article III of this Twelfth Supplemental Indenture.
 
The 2052 Series NNN Bonds shall be excluded from the benefits of, and shall not be subject to redemption through the operation of, a Mandatory Sinking Fund pursuant to § 11.02 of the Indenture.
 
Notwithstanding the provisions of § 10.02 or any other provision of the Indenture, the selection of 2052 Series NNN Bonds to be redeemed shall, in case fewer than all of the outstanding 2052 Series NNN Bonds are to be redeemed, be made by the Trustee pro rata (to the nearest multiple of One Thousand Dollars ($1,000)) among the registered holders of the 2052 Series NNN Bonds in proportion, as nearly as practicable, to the respective unpaid principal amounts of 2052 Series NNN Bonds registered in the names of such holders, with adjustments, to the extent practicable, to compensate for any prior redemption not made exactly in such proportion (or otherwise as may be specified by a written order signed by the registered holders of all outstanding 2052 Series NNN Bonds).
 
The definitive 2052 Series NNN Bonds may be issued in the form of engraved Bonds or Bonds printed or lithographed on steel engraved borders or Bonds in typed form on normal bond paper.  Subject to the foregoing provisions of this Section and the provisions of § 2.11 of the Indenture, all definitive 2052 Series NNN Bonds shall be fully exchangeable for other Bonds of the same series, of like aggregate principal amounts, and, upon surrender to the Trustee at its principal office, shall be exchangeable for other Bonds of the same series of a different authorized denomination or denominations, as requested by the holder surrendering the same.  The Company will execute, and the Trustee shall authenticate and deliver, registered Bonds without coupons, whenever the same shall be required for any such exchange.
 
§ 2.2.      2052 Series NNN Bonds in the aggregate principal amount of $125,000,000 may forthwith upon the execution and delivery of this Twelfth Supplemental Indenture, or from time to time thereafter, be executed by the Company and delivered to the Trustee, and shall thereupon be authenticated and delivered by the Trustee upon compliance by the Company with the provisions of Articles Four, Five or Six of the Indenture, without awaiting the filing or recording of this Twelfth Supplemental Indenture.  No additional 2052 Series NNN Bonds shall be issued under Article Four, Five or Six of the Indenture without the consent in writing of the holders of all the outstanding 2052 Series NNN Bonds.
 
ARTICLE III
 
REDEMPTION OF THE 2052 SERIES NNN BONDS
 
§ 3.1.      The following § 10.65 and § 10.66 be and they hereby are added to Article Ten of the Indenture:
 
E-2-12
“§ 10.65.    The 2052 Series NNN Bonds shall be subject to redemption as follows: payments of principal of, Make-Whole Amount, if any, and interest on the 2052 Series NNN Bonds shall be made to the Collateral Agent to redeem 2052 Series NNN Bonds in such amounts as shall be necessary, in accordance with the provisions of the Note Purchase Agreement, to provide funds under the Note Purchase Agreement to (a) make, when due, payment at maturity (including, without limitation, maturity upon acceleration of the Series 2022C Senior Notes due October 24, 2052) and (b) make, when due, any prepayment required or permitted by the Series 2022C Senior Notes due October 24, 2052 in connection with any prepayment of the Series 2022C Senior Notes due October 24, 2052; provided, however, that the obligation of the Company to make any redemption payments under this Section shall be fully or partially, as the case may be, satisfied and discharged to the extent that at any time such payment shall be due, the then due payment at maturity or redemption payment on any of the Series 2022C Senior Notes due October 24, 2052 shall have been fully or partially made from payments made by the Company on the Notes under the Note Purchase Agreement; provided, further, however, that any principal, Make-Whole Amount, and any interest which is overdue shall bear interest at a rate of interest that is the greater of (i) 7.47% per annum or (ii) 2.00% per annum over the rate of interest publicly announced by PNC Bank, National Association as its “base” or “prime” rate (to the extent that payment of such interest is enforceable under applicable law).  Terms used and not defined in this Section and in Section 10.66 shall have the respective meanings given to them in the Twelfth Supplemental Indenture.”
 
“§ 10.66.         In the case of the redemption of 2052 Series NNN Bonds out of moneys deposited with the Trustee pursuant to § 8.08, such 2052 Series NNN Bonds shall, upon compliance with provisions of § 10.02, and subject to the provisions of § 2.1 of the Twelfth Supplemental Indenture, be redeemable at the principal amounts thereof, together with interest accrued thereon to the date fixed for redemption, without premium or Make-Whole Amount.”
 
ARTICLE IV
 
MISCELLANEOUS
 
§ 4.1.     The Company is lawfully seized and possessed of all the real estate, franchises and other property described or referred to in the Indenture (except properties released from the lien of the Indenture pursuant to the provisions thereof) as presently mortgaged, subject to the exceptions stated therein, such real estate, franchises and other property are free and clear of any lien prior to the lien of the Indenture except as set forth in the Granting Clauses of the Indenture and the Company has good right and lawful authority to mortgage the same as provided in and by the Indenture.
 
§ 4.2.    The Trustee assumes no duties, responsibilities or liabilities by reason of this Twelfth Supplemental Indenture other than as set forth in the Indenture, and this Twelfth Supplemental Indenture is executed and accepted by the Trustee subject to all the terms and conditions of its acceptance of the trust under the Indenture, as fully as if said terms and conditions were herein set forth at length.
 
E-2-13
§ 4.3.    The terms used in this Twelfth Supplemental Indenture shall have the meanings assigned thereto in the Indenture.  Reference by number in this Twelfth Supplemental Indenture to Articles or Sections shall be construed as referring to Articles or Sections contained in the Indenture, unless otherwise stated.
 
§ 4.4.     As amended and modified by this Twelfth Supplemental Indenture, the Indenture is in all respects ratified and confirmed and the Indenture and this Twelfth Supplemental Indenture shall be read, taken and construed as one and the same instrument.
 
§ 4.5.      Neither the approval by the Board of Public Utilities of the State of New Jersey of the execution and delivery of this Twelfth Supplemental Indenture nor the approval by said Board of the issue of any Bonds under the Indenture shall in any way be construed as the approval by said Board of any other act, matter or thing which requires approval of said Board under the laws of the State of New Jersey; nor shall approval by said Board of the issue of any Bonds under the Indenture bind said Board or any other public body or authority of the State of New Jersey having jurisdiction in the premises in any future application for the issue of Bonds under the Indenture or otherwise.
 
§ 4.6.      This Twelfth Supplemental Indenture may be executed in any number of counterparts and all said counterparts executed and delivered each as an original shall constitute but one and the same instrument.

E-2-14
NEW JERSEY NATURAL GAS COMPANY HEREBY DECLARES THAT IT HAS READ THIS TWELFTH SUPPLEMENTAL INDENTURE, HAS RECEIVED A COMPLETELY FILLED-IN TRUE COPY OF IT WITHOUT CHARGE AND HAS SIGNED THIS TWELFTH SUPPLEMENTAL INDENTURE ON THE DATE CONTAINED IN ITS ACKNOWLEDGEMENT HEREOF.
 
IN WITNESS WHEREOF, NEW JERSEY NATURAL GAS COMPANY has caused these presents to be signed in its corporate name by its President, a Vice President or its Treasurer and its corporate seal to be hereunto affixed and attested by its Secretary or an Assistant Secretary, and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as successor in interest to U.S. Bank National Association in evidence of its acceptance of the trust hereby created, has caused these presents to be signed in its corporate name by one of its Vice Presidents.
 
 
NEW JERSEY NATURAL GAS COMPANY
     
 
By:
   
Name:  Daniel Sergott
   
Title:   Treasurer

[Corporate Seal]
  
   
ATTEST:
  
   

 
Name:  Tejal K. Mehta
  
Title:   Corporate Secretary
  

E-2-15
 
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee
     
 
By:
   
Name: Christopher E. Golabek
   
Title:  Vice President

ATTEST:
  
   

 
Name:  Paul D. O’Brien
  
Title:  Vice President
  

E-2-16
STATE OF NEW JERSEY )

) SS:
COUNTY OF MONMOUTH )

BE IT REMEMBERED that on this ___ day of October, 2022, before me, the subscriber, an Attorney-at-Law of the State of New Jersey, and I hereby certify that I am such an Attorney-at-Law as witness my hand, personally appeared Tejal K. Mehta to me known who, being by me duly sworn according to law, on his oath, does depose and make proof to my satisfaction that he is the Corporate Secretary of NEW JERSEY NATURAL GAS COMPANY, the grantor or mortgagor in the foregoing Supplemental Indenture named; that he well knows the seal of said corporation; that the seal affixed to said Supplemental Indenture is the corporate seal of said corporation, and that it was so affixed in pursuance of resolutions of the Board of Directors of said corporation; that Daniel Sergott is Treasurer of said corporation; that he saw said Daniel Sergott, as such Treasurer, affix said seal thereto, sign and deliver said Supplemental Indenture, and heard him declare that he signed, sealed and delivered the same as the voluntary act and deed of said corporation, in pursuance of said resolutions, and that this deponent signed his name thereto, at the same time, as attesting witness.

 
 
Name:  Tejal K. Mehta
 
Title:    Corporate Secretary

Subscribed and sworn to before me,
an Attorney-at-Law of the State of
New Jersey, at Wall, New Jersey,
the day and year aforesaid.
 

 
Name: 
Melissa Abraham
   
 
Attorney-at-Law of the
 
State of New Jersey

E-2-17
ACKNOWLEDGEMENT
 
STATE OF NEW JERSEY
)

) ss:
COUNTY OF MIDDLESEX )
 
I HEREBY CERTIFY that on this ___ of October, 2022, before me, a Notary Public for the state aforesaid, personally appeared Christopher E. Golabek, known to me or satisfactorily proven to be the Person whose name is subscribed to the Twelfth Supplemental Indenture dated as of October 1, 2022, who acknowledged that he is an authorized signatory for U.S. Bank Trust Company, National Association, as successor in interest to U.S. Bank National Association, a national banking association, as Trustee; that he has been duly authorized to execute, and has executed, such instrument on its behalf for the purposes therein set forth; and that the same is its act and deed. 
 
IN WITNESS WHEREOF, I have set my hand and Notarial Seal, the day and year first above written.

 
  Paul D. O’Brien
 
Notary Public
 
My commission expires on ______________


E-2-18
Exhibit 4.2

Execution Version

New Jersey Resources Corporation

$50,000,000 6.14% Senior Notes, Series 2022B, due December 15, 2032

Note Purchase Agreement
 
Dated as of October 24, 2022
 
TABLE OF CONTENTS
 
 
Page
   
SECTION 1.AUTHORIZATION OF NOTES
1
 
Section 1.1.
Authorization of Notes
1
   
SECTION 2.SALE AND PURCHASE OF NOTES; GUARANTY
1
 
Section 2.1.
Sale and Purchase of Notes
1
 
Section 2.2.
Guaranty Agreement
1
   
SECTION 3.EXECUTION AND CLOSING
2
   
SECTION 4. CONDITIONS TO CLOSING
2
 
Section 4.1.
Representations and Warranties
2
 
Section 4.2.
Performance; No Default
2
 
Section 4.3.
Compliance Certificates
2
 
Section 4.4.
Guaranty Agreement
3
 
Section 4.5.
Opinions of Counsel
3
 
Section 4.6.
Purchase Permitted by Applicable Law, Etc
3
 
Section 4.7.
Sale of Other Notes
4
 
Section 4.8.
Payment of Special Counsel Fees
4
 
Section 4.9.
Private Placement Number
4
 
Section 4.10.
Changes in Corporate Structure
4
 
Section 4.11.
Funding Instructions
4
 
Section 4.12.
Debt Rating
4
 
Section 4.13.
Proceedings and Documents
5
   
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
5
 
Section 5.1.
Organization; Power and Authority
5
 
Section 5.2.
Authorization, Etc
5
 
Section 5.3.
Disclosure
5
 
Section 5.4.
Organization and Ownership of Shares of Subsidiaries
6
 
Section 5.5.
Financial Statements
6
 
Section 5.6.
Compliance with Laws, Other Instruments, Etc
6
 
Section 5.7.
Governmental Authorizations, Etc
7
 
Section 5.8.
Litigation; Observance of Statutes and Orders
7
 
Section 5.9.
Taxes
7
 
Section 5.10.
Title to Property; Leases
8
 
Section 5.11.
Licenses, Permits, Etc
8
 
Section 5.12.
Compliance with ERISA
8
 
Section 5.13.
Private Offering by the Company
9
 
Section 5.14.
Use of Proceeds; Margin Regulations
9
 
Section 5.15.
Existing Debt
9
 
Section 5.16.
Foreign Assets Control Regulations, Etc
10
 
Section 5.17.
Status under Certain Statutes
11

-i-
TABLE OF CONTENTS
(continued)

     
Page
       
 
Section 5.18.
Environmental Matters
11
 
Section 5.19.
Notes Rank Pari Passu
12
   
SECTION 6. REPRESENTATIONS OF THE PURCHASERS
12
 
Section 6.1.
Purchase for Investment
12
 
Section 6.2.
Source of Funds
12
   
SECTION 7. INFORMATION AS TO COMPANY
14
 
Section 7.1.
Financial and Business Information
14
 
Section 7.2.
Officer’s Certificate
17
 
Section 7.3.
Inspection
17
   
SECTION 8. PREPAYMENT OF THE NOTES
18
 
Section 8.1.
Maturity; Required Prepayments
18
 
Section 8.2.
Optional Prepayments with Make-Whole Amount
18
 
Section 8.3.
Allocation of Partial Prepayments
19
 
Section 8.4.
Maturity; Surrender, Etc
19
 
Section 8.5.
Purchase of Notes
19
 
Section 8.6.
Make-Whole Amount for Notes
19
 
Section 8.7.
Offer to Prepay upon Asset Disposition
21
   
SECTION 9. AFFIRMATIVE COVENANTS
22
 
Section 9.1.
Compliance with Law
22
 
Section 9.2.
Insurance
22
 
Section 9.3.
Maintenance of Properties
22
 
Section 9.4.
Payment of Taxes and Claims
22
 
Section 9.5.
Corporate Existence, Etc
23
 
Section 9.6.
Ownership of Subsidiaries
23
 
Section 9.7.
Guaranty Agreement
23
 
Section 9.8.
New Jersey Natural Gas Regulated Nature
25
 
Section 9.9.
Notes to Rank Pari Passu
25
 
Section 9.10.
Ratings on the Notes
25
   
SECTION 10. NEGATIVE COVENANTS
26
 
Section 10.1.
Leverage Ratio
26
 
Section 10.2.
Limitation on Priority Debt
26
 
Section 10.3.
Liens
26
 
Section 10.4.
Restricted Payments
29
 
Section 10.5.
Restrictions on Dividends of Subsidiaries, Etc
29
 
Section 10.6.
Sale of Assets, Etc
29
 
Section 10.7.
Merger, Consolidation, Etc
30
 
Section 10.8.
Disposal of Ownership of a Restricted Subsidiary
31

-ii-
TABLE OF CONTENTS
(continued)

     
Page
       
 
Section 10.9.
Limitations on Subsidiaries, Partnerships and Joint Ventures
31
 
Section 10.10.
[Reserved]
32
 
Section 10.11.
Nature of Business
32
 
Section 10.12.
Transactions with Affiliates
32
 
Section 10.13.
Designation of Restricted and Unrestricted Subsidiaries
32
 
Section 10.14.
Economic Sanctions, Etc
33
   
SECTION 11. EVENTS OF DEFAULT
33
   
SECTION 12. REMEDIES ON DEFAULT, ETC
36
 
Section 12.1.
Acceleration
36
 
Section 12.2.
Other Remedies
37
 
Section 12.3.
Rescission
37
 
Section 12.4.
No Waivers or Election of Remedies, Expenses, Etc
37
   
SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES
37
 
Section 13.1.
Registration of Notes
37
 
Section 13.2.
Transfer and Exchange of Notes
38
 
Section 13.3.
Replacement of Notes
38
   
SECTION 14. PAYMENTS ON NOTES
39
 
Section 14.1.
Place of Payment
39
 
Section 14.2.
Home Office Payment
39
 
Section 14.3.
FATCA Information
39
   
SECTION 15. EXPENSES, ETC
39
 
Section 15.1.
Transaction Expenses
40
 
Section 15.2.
Certain Taxes
40
 
Section 15.3.
Survival
40
   
SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT
40
   
SECTION 17. AMENDMENT AND WAIVER
41
 
Section 17.1.
Requirements
41
 
Section 17.2.
Solicitation of Purchasers and Holders of Notes
41
 
Section 17.3.
Binding Effect, Etc
42
 
Section 17.4.
Notes Held by Company, Etc
42
   
SECTION 18. NOTICES
42
   
SECTION 19. REPRODUCTION OF DOCUMENTS
43

-iii-
TABLE OF CONTENTS
(continued)

 
Page
   
SECTION 20. CONFIDENTIAL INFORMATION
44
   
SECTION 21. SUBSTITUTION OF PURCHASER
45
   
SECTION 22. MISCELLANEOUS
45
 
Section 22.1.
Successors and Assigns
45
 
Section 22.2.
Submission to Jurisdiction; Waiver of Jury Trial
45
 
Section 22.3.
Payments Due on Non-Business Days
46
 
Section 22.4.
Accounting Terms
46
 
Section 22.5.
Severability
46
 
Section 22.6.
Construction
47
 
Section 22.7.
Counterparts; Electronic Contracting
47
 
Section 22.8.
Governing Law
47

-iv-
Attachments to Note Purchase Agreement:
 
Schedule A
—
Information Relating to Purchasers
     
Schedule B
—
Defined Terms
     
Schedule 5.3
—
Disclosure Materials
     
Schedule 5.4
—
Subsidiaries of the Company and Ownership of Subsidiary Stock
     
Schedule 5.5
—
Financials
     
Schedule 5.8
—
Certain Litigation
     
Schedule 5.11
—
Patents, Etc.
     
Schedule 5.15
—
Existing Debt
     
Exhibit 1
—
Form of 6.14% Senior Notes, Series 2022B, due December 15, 2032
     
Exhibit 2
—
Form of Subsidiary Guaranty Agreement

-v-
New Jersey Resources Corporation
1415 Wyckoff Road
Wall, New Jersey 07719
 
$50,000,000 6.14% Senior Notes, Series 2022B, due December 15, 2032

Dated as of October 24, 2022
 
To Each of the Purchasers Listed in
Schedule A Hereto:
 
Ladies and Gentlemen:
 
New Jersey Resources Corporation, a New Jersey corporation (the “Company”), agrees with each of you as follows:
 
Section 1.
Authorization of Notes.
 
Section 1.1.          Authorization of Notes.  The Company will authorize the issue and sale of $50,000,000 aggregate principal amount of its 6.14% Senior Notes, Series 2022B, due December 15, 2032 (as amended, restated or otherwise modified from time to time pursuant to Section 17, the “Notes”, such term to include any such notes issued in substitution therefor pursuant to Section 13).  The Notes shall be substantially in the form set out in Exhibit 1, with such changes therefrom, if any, as may be approved by the Purchasers and the Company.  Certain capitalized and other terms used in this Agreement are defined in Schedule B.  References to a “Schedule” or an “Exhibit” are references to a Schedule or Exhibit, as applicable, attached to this Agreement unless otherwise specified.  References to a “Section” are references to a Section of this Agreement unless otherwise specified.
 
Section 2.
Sale and Purchase of Notes; Guaranty.
 
Section 2.1.         Sale and Purchase of Notes.  Subject to the terms and conditions of this Agreement, the Company will issue and sell to each Purchaser and each Purchaser will purchase from the Company, at the Closing provided for in Section 3, Notes in the principal amount specified opposite such Purchaser’s name in Schedule A at the purchase price of 100% of the principal amount thereof.  The Purchasers’ obligations hereunder are several and not joint obligations and no Purchaser shall have any obligation or liability to any Person for the performance or non-performance of any obligation by any other Purchaser hereunder.
 
Section 2.2.        Guaranty Agreement.  The obligations of the Company hereunder and under the Notes are absolutely, unconditionally and irrevocably guaranteed by each Restricted Subsidiary existing on the Execution Date (as defined below) and each other Subsidiary from time to time required to guaranty the Notes pursuant to Section 9.7 (each a “Guarantor” and, collectively, the “Guarantors”), pursuant to that certain Subsidiary Guaranty Agreement dated as of the Execution Date (as the same may be amended, supplemented, restated or otherwise modified from time to time, the “Guaranty Agreement”) substantially in the form of Exhibit 2, and subject to the provisions of Section 9.7(c).
 
Section 3.
Execution and Closing.
 
The execution and delivery of this Agreement shall occur on October 24, 2022 (the “Execution Date”).  The sale and purchase of the Notes to be purchased by each Purchaser shall occur at the offices of ArentFox Schiff LLP, 1185 Sixth Avenue, Suite 3000, New York, New York 10036 at 11:00 a.m., New York, New York time (the “Closing”), on December 15, 2022 (the “Closing Date”).  At the Closing, the Company will deliver to each Purchaser the Notes to be purchased by such Purchaser in the form of a single Note (or such greater number of Notes in denominations of at least $100,000 as such Purchaser may request) dated the Closing Date and registered in such Purchaser’s name (or in the name of its nominee), against delivery by such Purchaser to the Company or its order of immediately available funds in the amount of the purchase price therefor by wire transfer of immediately available funds for the account of the Company in accordance with the funding instructions provided pursuant to Section 4.11.  If at the Closing the Company shall fail to tender the Notes to any Purchaser to be purchased by such Purchaser as provided above in this Section 3, or any of the conditions specified in Section 4 shall not have been fulfilled to such Purchaser’s satisfaction, such Purchaser shall, at its election, be relieved of all further obligations under this Agreement, without thereby waiving any rights such Purchaser may have by reason of such failure or such nonfulfillment.
 
Section 4.
Conditions to Closing.
 
Each Purchaser’s obligation to purchase and pay for the Notes to be sold to such Purchaser at the Closing is subject to the fulfillment to such Purchaser’s satisfaction, prior to or at the Closing, of the following conditions:
 
Section 4.1.          Representations and Warranties.  (a) The representations and warranties of the Company in this Agreement shall be true and correct as of the Execution Date and at the time of the Closing, except for such representations and warranties as of a specified date (which representations and warranties shall be correct in all material respects as of such specified date).
 
(b)          The representations and warranties of each Guarantor in the Guaranty Agreement shall be correct as of the Execution Date and at the time of the Closing, except for such representations and warranties as of a specified date (which representations and warranties shall be correct in all material respects as of such specified date).
 
Section 4.2.          Performance; No Default.  The Company and each Guarantor shall have performed and complied with all agreements and conditions contained in this Agreement or in the Guaranty Agreement, as applicable, required to be performed or complied with by it prior to or at the Closing.  Since the Execution Date until the Closing, before and after giving effect to the issue and sale of the Notes (and the application of the proceeds thereof as contemplated by Section 5.14), no Default or Event of Default shall have occurred and be continuing.
 
Section 4.3.          Compliance Certificates.
 
- 2 -
(a)          Officer’s Certificate.  (1) The Company shall have delivered to such Purchaser an Officer’s Certificate, dated the Closing Date, certifying that the conditions specified in Sections 4.1, 4.2 and 4.10 have been fulfilled.
 
(2)         Each Guarantor shall have delivered to such Purchaser an Officer’s Certificate, dated the Closing Date, certifying that the conditions specified in Section 4.1(b) and 4.2 have been fulfilled.
 
(3)          A duly authorized Senior Financial Officer shall execute and deliver to each such Purchaser an Officer’s Certificate dated the Closing Date stating that such officer has reviewed the provisions of this Agreement and setting forth the information and computations (in sufficient detail) required to establish whether after giving effect to the issuance of the Notes and after giving effect to the application of the proceeds thereof, the Company is in compliance with the requirements of Section 10.1 on such date.
 
(b)         Secretary’s Certificate.  (1) The Company shall have delivered to such Purchaser a certificate of its Secretary, dated the Closing Date, certifying as to (i) the resolutions attached thereto and other corporate proceedings relating to the authorization, execution and delivery of the Notes and this Agreement and (ii) the Company’s organizational documents then in effect.
 
(2)         Each Guarantor shall have delivered to such Purchaser a certificate of its Secretary, dated the Closing Date, certifying as to (i) the resolutions attached thereto and other corporate or similar proceedings relating to the authorization, execution and delivery of the Guaranty Agreement and (ii) such Guarantor’s organizational documents then in effect.
 
Section 4.4.         Guaranty Agreement.  The Guaranty Agreement shall have been duly authorized, executed and delivered by each Guarantor and shall be in full force and effect and such Purchaser shall have received a duly executed copy thereof.
 
Section 4.5.        Opinions of Counsel.  Such Purchaser shall have received opinions in form and substance satisfactory to such Purchaser, dated the Closing Date (a) from Melissa Abraham, Esq., Assistant General Counsel of the Company, and of Troutman Pepper Hamilton Sanders LLP, special counsel for the Company and the Guarantors, covering the matters set forth in Exhibit 4.5(a) and covering such other matters incident to the transactions contemplated hereby as such Purchaser or special counsel to the Purchasers may reasonably request (and the Company hereby instructs its counsel to deliver such opinion to such Purchaser) and (b) from ArentFox Schiff LLP, special counsel to the Purchasers of the Notes, in connection with such transactions, substantially in the form set forth in Exhibit 4.5(b) and covering such other matters incident to such transactions as such Purchaser may reasonably request.
 
Section 4.6.         Purchase Permitted by Applicable Law, Etc.  On the Closing Date, such Purchaser’s purchase of Notes shall (a) be permitted by the laws and regulations of each jurisdiction to which such Purchaser is subject, without recourse to provisions (such as Section 1405(a)(8) of the New York Insurance Law) permitting limited investments by insurance companies without restriction as to the character of the particular investment, (b) not violate any applicable law or regulation (including, without limitation, Regulation T, U or X of the Board of Governors of the Federal Reserve System) and (c) not subject such Purchaser to any tax, penalty or liability under or pursuant to any applicable law or regulation which law or regulation was not in effect on the Execution Date.  If requested by such Purchaser, such Purchaser shall have received an Officer’s Certificate certifying as to such matters of fact as such Purchaser may reasonably specify to enable it to determine whether such purchase is so permitted.
 
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Section 4.7.          Sale of Other Notes.  Contemporaneously with the Closing the Company shall sell to each other Purchaser and each other Purchaser shall purchase the Notes as specified in Schedule A.
 
Section 4.8.          Payment of Special Counsel Fees.  Without limiting the provisions of Section 15.1, the Company shall have paid on or before the Closing the reasonable fees, charges and disbursements of special counsel to the Purchasers referred to in Section 4.5(b) to the extent reflected in a statement of such counsel rendered to the Company at least one Business Day prior to the Closing.
 
Section 4.9.          Private Placement Number.  A Private Placement Number issued by CUSIP Global Services (in cooperation with the SVO) shall have been obtained for the Notes.
 
Section 4.10.       Changes in Corporate Structure.  The Company shall not have changed its jurisdiction of incorporation or been a party to any merger or consolidation and shall not have succeeded to all or any substantial part of the liabilities of any other entity at any time following the date of the most recent financial statements referred to in Schedule 5.5.
 
Section 4.11.        Funding Instructions.  At least five Business Days prior to the Closing Date, such Purchaser shall have received written instructions executed by an authorized officer of the Company on letterhead of the Company directing the manner of the payment of funds and setting forth (a) the name and address of the transferee bank, (b) such transferee bank’s ABA number, (c) the account name and number into which the purchase price for the applicable Notes is to be deposited, which account shall be fully opened and able to receive micro deposits in accordance with this Section 4.11 at least five Business Days prior to Closing Date and (d) the name and telephone number of the account representative at the Company responsible for (1) verifying receipt of such funds and (2) verifying the information set forth in the instructions.  Each Purchaser has the right, but not the obligation, upon written notice (which may be by email) to the Company, to elect to deliver a micro deposit (less than $51.00) to the account identified in the written instructions no later than two Business Days prior to Closing Date. If a Purchaser delivers a micro deposit, a Responsible Officer must verbally verify the receipt and amount of the micro deposit to such Purchaser on a telephone call initiated by such Purchaser prior to the Closing. The Company shall not be obligated to return the amount of the micro deposit, nor will the amount of the micro deposit be netted against the Purchaser’s purchase price of the Notes to be issued at the Closing.
 
Section 4.12.        Debt Rating.  The Company shall have delivered, or caused to be delivered, to such Purchaser, (a) a Private Rating Letter issued by an Acceptable Rating Agency setting forth the initial Debt Rating for the Notes and (b) the related Private Rating Rationale Report with respect to such Debt Rating.
 
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Section 4.13.        Proceedings and Documents.  All corporate and other proceedings in connection with the transactions contemplated by this Agreement and all documents and instruments incident to such transactions shall be satisfactory to such Purchaser and special counsel to the Purchasers, and such Purchaser and special counsel to the Purchasers shall have received all such counterpart originals or certified or other copies of such documents as such Purchaser or special counsel to the Purchasers may reasonably request.
 
Section 5.
Representations and Warranties of the Company.
 
The Company represents and warrants to each Purchaser on the Execution Date and on the Closing Date that:
 
Section 5.1.          Organization; Power and Authority.  The Company is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, and is duly qualified as a foreign corporation and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  The Company has the corporate power and authority to own or lease the properties it purports to own or lease, to transact the business it transacts and proposes to transact, to execute and deliver this Agreement and the Notes and to perform the provisions hereof and thereof.
 
Section 5.2.        Authorization, Etc.  (a) This Agreement and the Notes have been duly authorized by all necessary corporate action on the part of the Company, and this Agreement constitutes, and upon execution and delivery thereof each Note will constitute, a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by (1) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (2) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
 
(b)         The Guaranty Agreement has been duly authorized by all necessary corporate or other action on the part of each Guarantor, and the Guaranty Agreement constitutes a legal, valid and binding obligation of each Guarantor enforceable against each Guarantor in accordance with its terms, except as such enforceability may be limited by (1) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (2) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
 
Section 5.3.        Disclosure.  The Company, through its agents, Mizuho Securities USA LLC and TD Securities (USA) LLC, has delivered to each Purchaser a copy of an Investor Presentation, dated October 4, 2022 (the “Investor Presentation”), relating to the transactions contemplated hereby.  Except as disclosed in Schedule 5.3, this Agreement, the Investor Presentation, the documents, certificates or other writings identified in Schedule 5.3 and the financial statements listed in Schedule 5.5 (collectively, the “Disclosure Documents”), taken as a whole, do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading in light of the circumstances under which they were made.  Except as disclosed in the Disclosure Documents, since September 30, 2021 there has been no change in the financial condition, operations, business or properties of the Company, any of its Restricted Subsidiaries or New Jersey Natural Gas except changes that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.
 
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Section 5.4.       Organization and Ownership of Shares of Subsidiaries.  (a) Schedule 5.4 is (except as noted therein) complete and correct lists of (i) the Company’s Subsidiaries as of the Closing Date, showing, as to each Subsidiary, the correct name thereof, the jurisdiction of its organization, the percentage of shares of each class of its capital stock or similar equity interests outstanding owned by the Company and each other Subsidiary and whether or not such Subsidiary is a Restricted Subsidiary, an Inactive Subsidiary and/or a Regulated Entity and (ii) the Company’s directors and executive officers.
 
(b)          All of the outstanding shares of capital stock or similar equity interests of each Restricted Subsidiary and New Jersey Natural Gas shown in Schedule 5.4 as being owned by the Company and its Subsidiaries have been validly issued, are fully paid and nonassessable and are owned by the Company or another Subsidiary free and clear of any Lien (except as otherwise disclosed in Schedule 5.4).
 
(c)         Each Restricted Subsidiary identified in Schedule 5.4 and New Jersey Natural Gas is a corporation or other legal entity duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, and is duly qualified as a foreign corporation or other legal entity and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  Each such Restricted Subsidiary and New Jersey Natural Gas has the corporate or other power and authority to own or lease the properties it purports to own or lease, to transact the business it transacts and proposes to transact and, in the case of each Restricted Subsidiary that is a Guarantor, to execute and deliver the Guaranty Agreement and to perform the provisions thereof.
 
Section 5.5.        Financial Statements.  The Company has delivered to each Purchaser copies of the consolidated financial statements of the Company and its Subsidiaries listed in Schedule 5.5.  All of said financial statements (including in each case the related schedules and notes) fairly present in all material respects the consolidated financial position of the Company and its Subsidiaries as of the respective dates specified in such Schedule and the consolidated results of their operations and cash flows for the respective periods so specified and have been prepared in accordance with GAAP consistently applied throughout the periods involved except as set forth in the notes thereto (subject, in the case of any interim financial statements, to normal year-end adjustments). The Company and its Subsidiaries did not have, on the date of such financial statements, any Material liabilities that are not disclosed on such financial statements or otherwise disclosed in the Disclosure Documents.
 
Section 5.6.         Compliance with Laws, Other Instruments, Etc.  The execution, delivery and performance by the Company of this Agreement and the Notes and the execution and delivery by each Guarantor of the Guaranty Agreement will not (a) contravene, result in any breach of, or constitute a default under, or result in the creation of any Lien in respect of any property of the Company, any Restricted Subsidiary or New Jersey Natural Gas under, any indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease, corporate charter or by-laws, or any other Material agreement or instrument to which the Company, any Restricted Subsidiary or New Jersey Natural Gas is bound or by which the Company, any Restricted Subsidiary or New Jersey Natural Gas or any of their respective properties may be bound or affected, (b) conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority applicable to the Company, any Restricted Subsidiary or New Jersey Natural Gas or (c) violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to the Company, any Restricted Subsidiary or New Jersey Natural Gas.
 
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Section 5.7.        Governmental Authorizations, Etc.  No consent, approval or authorization of, or registration, filing or declaration with, any Governmental Authority is required to be done or made, as the case may be, by the Company or any Guarantor in connection with the execution, delivery or performance by (a) the Company of this Agreement or the Notes or (b) any Guarantor of the Guaranty Agreement, in each case, other than such consents, approvals, authorizations, registrations, filings or declarations that have been obtained or made prior to the Closing Date.
 
Section 5.8.        Litigation; Observance of Statutes and Orders.  (a) Except as disclosed in Schedule 5.8, there are no actions, suits or proceedings pending or, to the knowledge of the Company, threatened against or affecting the Company, any Restricted Subsidiary or New Jersey Natural Gas or any property of the Company, any Restricted Subsidiary or New Jersey Natural Gas in any court or before any arbitrator of any kind or before or by any Governmental Authority that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.
 
(b)          None of the Company, any Restricted Subsidiary or New Jersey Natural Gas is in default under any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority or is in violation of any applicable law, ordinance, rule or regulation (including, without limitation, ERISA (with respect to any Plan), Environmental Laws or the USA PATRIOT Act) of any Governmental Authority, which default or violation, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.
 
Section 5.9.         Taxes.  The Company and its Subsidiaries have filed all income tax returns that are required to have been filed in any jurisdiction, and have paid all taxes shown to be due and payable on such returns and all other taxes and assessments payable by them, to the extent such taxes and assessments have become due and payable and before they have become delinquent, except for any taxes and assessments (a) the amount of which is not, individually or in the aggregate, Material or (b) the amount, applicability or validity of which is currently being contested in good faith by appropriate proceedings and with respect to which the Company or a Subsidiary, as the case may be, has established adequate reserves in accordance with GAAP.  The charges, accruals and reserves on the books of the Company and its Subsidiaries in respect of Federal, state or other taxes for all fiscal periods are adequate.  The Federal income tax liabilities of the Company and its Subsidiaries have been determined by the Internal Revenue Service and paid for all fiscal years up to and including the fiscal year ended September 30, 2020.
 
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Section 5.10.       Title to Property; Leases.  The Company, its Restricted Subsidiaries and New Jersey Natural Gas have good and sufficient title related to the ownership of their respective Material properties, including all such Material properties reflected in the most recent audited balance sheet referred to in Section 5.5 or purported to have been acquired by the Company, any Restricted Subsidiary or New Jersey Natural Gas after said date (except as sold or otherwise disposed of in the ordinary course of business or otherwise to the extent not prohibited hereunder), in each case free and clear of Liens prohibited by this Agreement, except for those defects in title and Liens that, individually or in the aggregate, would not have a Material Adverse Effect.  All Material leases are valid and subsisting and are in full force and effect in all material respects.
 
Section 5.11.       Licenses, Permits, Etc.  Except as disclosed in Schedule 5.11, the Company, its Restricted Subsidiaries and New Jersey Natural Gas own or possess all licenses, permits, franchises, authorizations, patents, copyrights, proprietary software, service marks, trademarks, trade names and domain names or rights thereto, that are Material, without known conflict with the rights of others, except for those conflicts that, individually or in the aggregate, would not have a Material Adverse Effect.
 
Section 5.12.       Compliance with ERISA.  (a) The Company and each ERISA Affiliate have operated and administered each Plan in compliance with all applicable laws except for such instances of noncompliance as have not resulted in and would not reasonably be expected to result in a Material Adverse Effect.  Neither the Company nor any ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans (as defined in Section 3 of ERISA) with respect to any Plan, other than for claims for benefits and funding obligations in the ordinary course, and no event, transaction or condition has occurred or exists with respect to any Plan that would reasonably be expected to result in the incurrence of any such liability under Title I or IV of ERISA or the penalty or excise tax provisions of the Code by the Company or any ERISA Affiliate, or in the imposition of any Lien under Section 430 of the Code or Section 4068 of ERISA on any of the rights, properties or assets of the Company or any ERISA Affiliate,  other than any such liabilities or Liens as would not, individually or in the aggregate, be reasonably expected to result in a Material Adverse Effect.
 
(b)        The present value of the aggregate benefit liabilities under each of the Plans which are subject to Title IV of ERISA (other than Multiemployer Plans), determined as of the end of such Plan’s most recently ended plan year on the basis of the actuarial assumptions specified for funding purposes in such Plan’s most recent actuarial valuation report, did not exceed the aggregate current value of the assets of such Plans allocable to such benefit liabilities by more than $25,000,000.  The term “benefit liabilities” has the meaning specified in Section 4001 of ERISA and the terms “current value” and “present value” have the meanings specified in Section 3 of ERISA.
 
(c)        The Company and its ERISA Affiliates have not incurred withdrawal liabilities under Section 4201 or 4204 of ERISA (and are not subject to contingent withdrawal liabilities under Section 4204) in respect of Multiemployer Plans that, individually or in the aggregate, are reasonably expected to result in a Material Adverse Effect.
 
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(d)        The accumulated post-retirement benefit obligation (determined as of the last day of the Company’s most recently ended fiscal year in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 715-60, without regard to liabilities attributable to continuation coverage mandated by Section 4980B of the Code) of the Company, its Restricted Subsidiaries and New Jersey Natural Gas is not reasonably expected to result in a Material Adverse Effect.

(e)       The execution and delivery of this Agreement and the issuance and sale of the Notes hereunder will not involve any transaction that is subject to the prohibitions of Section 406(a)(1)(A)-(D) of ERISA or in connection with which a tax could be imposed pursuant to Section 4975(c)(1)(A)‑(D) of the Code.  The representation by the Company in the first sentence of this Section 5.12(e) with respect to each Purchaser is made in reliance upon and subject to the accuracy of such Purchaser’s representation in Section 6.2 as to the sources of the funds used to pay the purchase price of the Notes to be purchased by such Purchaser.
 
Section 5.13.       Private Offering by the Company.  Neither the Company nor anyone authorized to act on its behalf has offered the Notes or the Guaranty Agreement or any similar securities for sale to, or solicited any offer to buy any of the same from, or otherwise approached or negotiated in respect thereof with, any Person other than the Purchasers and not more than 55 other Institutional Investors of the type described in clause (c) of the definition thereof, each of which has been offered the Notes and the Guaranty Agreement at a private sale for investment.  Neither the Company nor anyone authorized to act on its behalf has taken, or will take, any action that would subject the issuance or sale of the Notes or the execution and performance of the Guaranty Agreement to the registration requirements of Section 5 of the Securities Act.
 
Section 5.14.      Use of Proceeds; Margin Regulations.  The Company will apply the proceeds of the sale of the Notes for general corporate purposes, including, but not limited to future acquisitions, repayment of indebtedness, capital expenditures and working capital.  No part of the proceeds from the sale of the Notes hereunder will be used, directly or indirectly, for the purpose of buying or carrying any margin stock within the meaning of Regulation U of the Board of Governors of the Federal Reserve System (12 CFR 221), or for the purpose of buying or carrying or trading in any securities under such circumstances as to involve the Company in a violation of Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a violation of Regulation T of said Board (12 CFR 220).  Margin stock does not constitute more than 25% of the value of the consolidated assets of the Company and its Subsidiaries and the Company does not have any present intention that margin stock will constitute more than 25% of the value of such assets.  As used in this Section, the terms “margin stock” and “purpose of buying or carrying” shall have the meanings assigned to them in said Regulation U.
 
Section 5.15.       Existing Debt.  (a) Except as described therein, Schedule 5.15 sets forth a complete and correct list of all outstanding Debt of the Company, its Restricted Subsidiaries and New Jersey Natural Gas as of June 30, 2022, since which date there has been no Material change in the amounts, interest rates, sinking funds, installment payments or maturities of the Debt of the Company, its Restricted Subsidiaries or New Jersey Natural Gas, except as described in Schedule 5.15.  None of the Company, any Restricted Subsidiary or New Jersey Natural Gas is in default in the payment of any principal or interest on any Debt of the Company, such Restricted Subsidiary or New Jersey Natural Gas and no event or condition exists with respect to any Debt of the Company, any Restricted Subsidiary or New Jersey Natural Gas the outstanding principal amount of which exceeds $10,000,000 that would permit (or that with notice or the lapse of time, or both, would permit) one or more Persons to cause such Debt to become due and payable before its stated maturity or before its regularly scheduled dates of payment.
 
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(b)          Neither the Company nor any Subsidiary is a party to, or otherwise subject to any provision contained in, any instrument evidencing Debt of the Company or such Subsidiary, any agreement relating thereto or any other agreement (including, but not limited to, its charter or other organizational document) which limits the amount of, or otherwise imposes restrictions on the incurring of, Debt of the Company or any Guarantor, except as provided in any Bank Credit Agreement and as otherwise specifically indicated in Schedule 5.15.
 
Section 5.16.        Foreign Assets Control Regulations, Etc.
 
(a)         Neither the Company nor any Controlled Entity (i) is a Blocked Person, (ii) has been notified that its name appears or may in the future appear on a State Sanctions List or (iii) is a target of sanctions that have been imposed by the United Nations or the European Union.
 
(b)         Neither the Company nor any Controlled Entity (i) has violated, been found in violation of, or been charged or convicted under, any applicable U.S. Economic Sanctions Laws, Anti-Money Laundering Laws or Anti-Corruption Laws or (ii) to the Company’s knowledge, is under investigation by any Governmental Authority for possible violation of any U.S. Economic Sanctions Laws, Anti-Money Laundering Laws or Anti-Corruption Laws.
 
(c)          No part of the proceeds from the sale of the Notes hereunder:
 
(i)          constitutes or will constitute funds obtained on behalf of any Blocked Person or will otherwise be used by the Company or any Controlled Entity, directly or indirectly, (A) in connection with any investment in, or any transactions or dealings with, any Blocked Person, (B) for any purpose that would cause any Purchaser to be in violation of any U.S. Economic Sanctions Laws or (C) otherwise in violation of any U.S. Economic Sanctions Laws;
 
(ii)        will be used, directly or indirectly, in violation of, or cause any Purchaser to be in violation of, any applicable Anti-Money Laundering Laws; or
 
(iii)       will be used, directly or indirectly, for the purpose of making any improper payments, including bribes, to any Governmental Official or commercial counterparty in order to obtain, retain or direct business or obtain any improper advantage, in each case which would be in violation of, or cause any Purchaser to be in violation of, any applicable Anti-Corruption Laws.
 
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(d)         The Company has established procedures and controls which it reasonably believes are adequate (and otherwise comply with applicable law) to ensure that the Company and each Controlled Entity is and will continue to be in compliance with all applicable U.S. Economic Sanctions Laws, Anti-Money Laundering Laws and Anti-Corruption Laws.
 
Section 5.17.      Status under Certain Statutes.  Neither the Company nor any Subsidiary is an “investment company” registered or required to be registered under the Investment Company Act of 1940 or an “affiliated person” of an “investment company” or an “affiliated person” of such “affiliated person” or under the “control” of an “investment company” as such terms are defined in the Investment Company Act of 1940, as amended, and shall not become such an “investment company” or such an “affiliated person” or under such “control.”  Neither the Company nor any Subsidiary is a “holding company” or a “subsidiary company” of a “holding company,” or an “affiliate” of a “holding company” or of a “subsidiary company” of a “holding company” within the meaning of the Public Utility Holding Company Act of 2005, as amended.  Based upon the immediately preceding sentence, neither the Company nor the issue and sale of the Notes is subject to regulation under the Public Utility Holding Company Act of 2005, as amended.  Neither the Company nor any Subsidiary is subject to the ICC Termination Act of 1995, as amended, or the Federal Power Act, as amended.  Neither the Company nor any Subsidiary (other than New Jersey Natural Gas) is subject to any Federal or state statute or regulation limiting its ability to incur Debt.
 
Section 5.18.     Environmental Matters.  Except as disclosed in Schedule 5.8, none of the Company, any Restricted Subsidiary or New Jersey Natural Gas has actual knowledge of any claim or has received any written notice of any claim, and no proceeding has been instituted raising any claim against the Company, any of its Restricted Subsidiaries or New Jersey Natural Gas or any of their respective real properties now or formerly owned, leased or operated by any of them or other assets, alleging any damage to the environment or violation of any Environmental Laws, except, in each case, such as would not reasonably be expected to result in a Material Adverse Effect.  Except as otherwise disclosed in Schedule 5.8:
 
(a)         none of the Company, any Restricted Subsidiary or New Jersey Natural Gas has actual knowledge of any facts which would give rise to any claim, public or private, of violation of Environmental Laws or damage to the environment emanating from, occurring on or in any way related to real properties now or formerly owned, leased or operated by any of them or to other assets or their use, except, in each case, such as would not reasonably be expected to result in a Material Adverse Effect;
 
(b)         none of the Company, any of its Restricted Subsidiaries or New Jersey Natural Gas has stored any Hazardous Materials on real properties now or formerly owned, leased or operated by any of them or has disposed of any Hazardous Materials in a manner contrary to any Environmental Laws in each case in any manner that would reasonably be expected to result in a Material Adverse Effect; and
 
(c)        all buildings on all real properties now owned, leased or operated by the Company, any of its Restricted Subsidiaries or New Jersey Natural Gas are in compliance with applicable Environmental Laws, except where failure to comply would not reasonably be expected to result in a Material Adverse Effect.
 
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Section 5.19.      Notes Rank Pari Passu.  The obligations of the Company under this Agreement and the Notes rank at least pari passu in right of payment with all other unsecured Senior Debt (actual or contingent) of the Company, including, without limitation, all unsecured Senior Debt of the Company described in Schedule 5.15 hereto.
 
Section 6.
Representations of the Purchasers.
 
Section 6.1.       Purchase for Investment.  Each Purchaser severally represents that it is purchasing the Notes for its own account or for one or more separate accounts maintained by such Purchaser or for the account of one or more pension or trust funds and not with a view to the distribution thereof, provided that the disposition of such Purchaser’s or such pension or trust fund’s property shall at all times be within such Purchaser’s or such pension or trust fund’s control.  Each Purchaser represents that it is an “accredited investor,” as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act.  Each Purchaser understands that the Notes have not been registered under the Securities Act and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available, except under circumstances where neither such registration nor such an exemption is required by law, and that the Company is not required to register the Notes.  Each Purchaser also represents that the Company has made available to it, a reasonable time prior to the consummation of the transactions contemplated hereby, the opportunity to ask questions and receive answers concerning the terms and conditions of the offering of the Notes that it is purchasing or shall purchase and to obtain any additional information which the Company possesses or could acquire without unreasonable effort or expense; provided that the foregoing shall not be construed as limiting the ability of any Purchaser to rely on the representations and warranties contained herein and in the Guaranty Agreement.
 
Section 6.2.         Source of Funds.  Each Purchaser severally represents that at least one of the following statements is an accurate representation as to each source of funds (a “Source”) to be used by such Purchaser to pay the purchase price of the Notes to be purchased by such Purchaser hereunder:
 
(a)         the Source is an “insurance company general account” (as the term is defined in the United States Department of Labor’s Prohibited Transaction Exemption (“PTE”) 95-60) in respect of which the reserves and liabilities (as defined by the annual statement for life insurance companies approved by the NAIC (the “NAIC Annual Statement”)) for the general account contract(s) held by or on behalf of any employee benefit plan together with the amount of the reserves and liabilities for the general account contract(s) held by or on behalf of any other employee benefit plans maintained by the same employer (or affiliate thereof as defined in PTE 95-60) or by the same employee organization in the general account do not exceed 10% of the total reserves and liabilities of the general account (exclusive of separate account liabilities) plus surplus as set forth in the NAIC Annual Statement filed with such Purchaser’s state of domicile; or
 
(b)         the Source is a separate account that is maintained solely in connection with such Purchaser’s fixed contractual obligations under which the amounts payable, or credited, to any employee benefit plan (or its related trust) that has any interest in such separate account (or to any participant or beneficiary of such plan (including any annuitant)) are not affected in any manner by the investment performance of the separate account; or
 
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(c)          the Source is either (1) an insurance company pooled separate account, within the meaning of PTE 90-1 or (2) a bank collective investment fund, within the meaning of PTE 91-38 and, except as disclosed by such Purchaser to the Company in writing pursuant to this clause (c), no employee benefit plan or group of plans maintained by the same employer or employee organization beneficially owns more than 10% of all assets allocated to such pooled separate account or collective investment fund; or
 
(d)        the Source constitutes assets of an “investment fund” (within the meaning of Part VI of PTE 84-14 (the “QPAM Exemption”)) managed by a “qualified professional asset manager” or “QPAM” (within the meaning of Part VI of the QPAM Exemption), no employee benefit plan’s assets that are managed by the QPAM in such investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same employee organization and managed by such QPAM, represent more than 20% of the total client assets managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a Person controlling or controlled by the QPAM maintains an ownership interest in the Company that would cause the QPAM and the Company to be “related” within the meaning of Part VI(h) of the QPAM Exemption and (i) the identity of such QPAM and (ii) the names of any employee benefit plans whose assets in the investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same employee organization, represent 10% or more of the assets of such investment fund, have been disclosed to the Company in writing pursuant to this clause (d); or
 
(e)        the Source constitutes assets of a “plan(s)” (within the meaning of Part IV(h) of PTE 96-23 (the “INHAM Exemption”)) managed by an “in-house asset manager” or “INHAM” (within the meaning of Part IV(a) of the INHAM Exemption), the conditions of Part I(a), (g) and (h) of the INHAM Exemption are satisfied, neither the INHAM nor a Person controlling or controlled by the INHAM (applying the definition of “control” in Part IV(d)(3) of the INHAM Exemption) owns a 10% or more interest in the Company and (1) the identity of such INHAM and (2) the name(s) of the employee benefit plan(s) whose assets constitute the Source have been disclosed to the Company in writing pursuant to this clause (e); or
 
(f)          the Source is a governmental plan; or
 
(g)         the Source is one or more employee benefit plans, or a separate account or trust fund comprised of one or more employee benefit plans, each of which has been identified to the Company in writing pursuant to this clause (g); or
 
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(h)         the Source does not include assets of (i) any employee benefit plan, other than a plan exempt from the coverage of ERISA, or (ii) any “plan” as defined in Section 4975(e)(1) of the Code.
 
As used in this Section 6.2, the terms “employee benefit plan,” “governmental plan,” and “separate account” shall have the respective meanings assigned to such terms in Section 3 of ERISA.
 
Section 7.
Information as to Company.
 
Section 7.1.          Financial and Business Information.  The Company shall deliver to each Purchaser and each holder of Notes that is an Institutional Investor:
 
(a)         Quarterly Statements — within 60 days after the end of each quarterly fiscal period in each fiscal year of the Company (other than the last quarterly fiscal period of each such fiscal year), duplicate copies of:
 
(1)          a consolidated and consolidating balance sheet of the Company and its Subsidiaries and New Jersey Natural Gas and its Subsidiaries (if any) as at the end of such quarter, and
 
(2)        consolidated and consolidating statements of income and cash flows of the Company and its Subsidiaries and New Jersey Natural Gas and its Subsidiaries (if any) for such quarter and (in the case of the second and third quarters) for the portion of the fiscal year ending with such quarter,
 
setting forth in each case in comparative form the figures for the corresponding periods in the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP applicable to quarterly financial statements generally, and certified by a Senior Financial Officer as fairly presenting, in all material respects, the financial position of the companies being reported on and their results of operations and cash flows, subject to changes resulting from normal year-end adjustments, provided that delivery within the time period specified above of copies of the Company’s Quarterly Report on Form 10‑Q prepared in compliance with the requirements therefor and filed with the U.S. Securities and Exchange Commission shall be deemed to satisfy the requirements of this Section 7.1(a), and provided, further, that the Company shall be deemed to have made such delivery of such Form 10‑Q if it shall have timely made such Form 10‑Q available on “EDGAR” and on its home page on the worldwide web (at the Execution Date located at: http//www.njresources.com under “Investor Relations – Financial Reports”) and shall have given such holder prompt notice of such availability on EDGAR and on its home page in connection with each delivery (such availability and notice thereof being referred to as “Electronic Delivery”);
 
(b)          Annual Statements — within 120 days after the end of each fiscal year of the Company, duplicate copies of:
 
(1)          a consolidated and consolidating balance sheet of the Company and its Subsidiaries and New Jersey Natural Gas and its Subsidiaries (if any) as at the end of such year, and
 
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(2)        consolidated and consolidating statements of income and cash flows of the Company and its Subsidiaries and New Jersey Natural Gas and its Subsidiaries (if any), for such year,
 
setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP, with such consolidated financial statements accompanied by an opinion thereon (without a “going concern” or similar qualification or exception and without any qualification or exception as to the scope of the audit on which such opinion is based) of independent certified public accountants of recognized national standing, which opinion shall state that such financial statements present fairly, in all material respects, the financial position of the companies being reported upon and their results of operations and cash flows and have been prepared in conformity with GAAP, and that the examination of such accountants in connection with such financial statements has been made in accordance with generally accepted auditing standards, and that such audit provides a reasonable basis for such opinion in the circumstances, provided that the delivery within the time period specified above of the Company’s Annual Report on Form 10‑K for such fiscal year (together with the Company’s annual report to shareholders, if any, prepared pursuant to Rule 14a‑3 under the Exchange Act) prepared in accordance with the requirements therefor and filed with the U.S. Securities and Exchange Commission shall be deemed to satisfy the requirements of this Section 7.1(b), and provided, further, that the Company shall be deemed to have made such delivery of such Form 10‑K if it shall have timely made Electronic Delivery thereof;
 
(c)        SEC and Other Reports — with reasonable promptness, upon their becoming available, one copy of (1) each financial statement, report, notice or proxy statement sent by the Company, any Restricted Subsidiary or New Jersey Natural Gas to its principal lending banks as a whole (excluding information sent to such banks in the ordinary course of administration of a bank facility, such as information relating to pricing and borrowing availability) or to its public securities holders generally and (2) each regular or periodic report, each registration statement that shall have become effective (without exhibits except as expressly requested by such holder), and each final prospectus and all amendments thereto filed by the Company, any Restricted Subsidiary or New Jersey Natural Gas with the U.S. Securities and Exchange Commission, excluding in any event confidential correspondence delivered by any of the foregoing Persons to the U.S. Securities and Exchange Commission; provided that the Company shall be deemed to have made such delivery of such reports, registration statements, prospectuses and amendments if it shall have timely made Electronic Delivery thereof.
 
(d)         Notice of Default or Event of Default — with reasonable promptness, and in any event within five days after a Responsible Officer becoming aware of the existence of any Default or Event of Default, a written notice specifying the nature and period of existence thereof and what action the Company is taking or proposes to take with respect thereto;
 
(e)        ERISA Matters — with reasonable promptness, and in any event within five days after a Responsible Officer becoming aware of any of the following, a written notice setting forth the nature thereof and the action, if any, that the Company or an ERISA Affiliate proposes to take with respect thereto:
 
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(1)          with respect to any Plan, the occurrence of any reportable event, as defined in Section 4043(c) of ERISA and the regulations thereunder, for which notice thereof has not been waived pursuant to such regulations as in effect on the Execution Date; or
 
(2)        the taking by the PBGC of steps to institute, or the threatening in writing by the PBGC of the institution of, proceedings under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or the receipt by the Company or any ERISA Affiliate of a notice from a Multiemployer Plan that such action has been taken by the PBGC with respect to such Multiemployer Plan; or
 
(3)          the occurrence of any event or transaction that results in the incurrence of any liability by the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans with respect to any Plan, or in the imposition of any Lien under Section 430 of the Code or Section 4068 of ERISA, or any successor thereto, on any of the rights, properties or assets of the Company or any ERISA Affiliate, if such liability or Lien, taken together with any other such liabilities or Liens then existing, would reasonably be expected to have a Material Adverse Effect;
 
(f)         Unrestricted Subsidiaries — at such time as either (1) the aggregate amount of the total assets of all Unrestricted Subsidiaries (for this purpose, excluding New Jersey Natural Gas) exceeds 10% of the consolidated total assets of the Company and its Subsidiaries determined in accordance with GAAP or (2) one or more Unrestricted Subsidiaries (for this purpose, excluding New Jersey Natural Gas) account for more than 10% of the consolidated gross revenues of the Company and its Subsidiaries determined in accordance with GAAP, and within the respective periods provided in paragraphs (a) and (b) above, financial statements of the character and for the dates and periods as in said paragraphs (a) and (b) covering each Unrestricted Subsidiary (or groups of Unrestricted Subsidiaries on a consolidated basis, excluding New Jersey Natural Gas) together with consolidating statements reflecting eliminations or adjustments required in order to reconcile such financial statements to the corresponding consolidated financial statements of the Company and its Subsidiaries delivered pursuant to paragraphs (a) and (b) above; provided, that to the extent that the financial statements required by paragraphs (a) and (b) above shall already provide such consolidating financial information for such Unrestricted Subsidiaries or group of Unrestricted Subsidiaries (or such Unrestricted Subsidiary or group of Unrestricted Subsidiaries represent one or more reportable segments, and the footnotes to the financial statements required by paragraphs (a) and (b) include consolidating information with respect to such segment or segments in a manner substantially consistent with Note 17 to the Company’s Annual Report on Form 10-K for the year ended September 30, 2021 and Note 14 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022), then this paragraph (f) shall not be applicable;
 
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(g)        Debt Rating — promptly following the occurrence thereof, notice of any change in the Debt Rating for the Notes (to the extent such Debt Rating is not a public rating); and
 
(h)          Requested Information — with reasonable promptness, such other data and information relating to the business, operations, affairs, financial condition, assets or properties of the Company, any of its Restricted Subsidiaries or New Jersey Natural Gas (including, but without limitation, actual copies of the Company’s Form 10-Q and Form 10-K) or relating to the ability of the Company to perform its obligations hereunder and under the Notes as from time to time may be reasonably requested by any such Purchaser or holder of Notes.
 
Section 7.2.        Officer’s Certificate.  Each set of financial statements delivered to a Purchaser or a holder of Notes pursuant to Section 7.1(a) or Section 7.1(b) shall be accompanied by a certificate of a Senior Financial Officer setting forth (which, in the case of Electronic Delivery of any such financial statements, shall be by separate concurrent delivery of such certificate to each holder of Notes):
 
(a)         Covenant Compliance — the information (including reasonably detailed calculations) required in order to establish whether the Company was in compliance with the requirements of Section 10.1 and Section 10.2 during the quarterly or annual period covered by the statements then being furnished (including with respect to each such Section, where applicable, the calculations of the maximum or minimum amount, ratio or percentage, as the case may be, permissible under the terms of such Sections, and the calculation of the amount, ratio or percentage then in existence).  In the event that the Company or any Subsidiary has made an election to measure any financial liability using fair value (which election is being disregarded for purposes of determining compliance with this Agreement pursuant to Section 22.4) as to the period covered by any such financial statement, such Senior Financial Officer’s certificate as to such period shall include a reconciliation from GAAP with respect to such election; and
 
(b)         Event of Default — a statement that such Senior Financial Officer has reviewed the relevant terms hereof and has made, or caused to be made, under his or her supervision, a review of the transactions and conditions of the Company and its Subsidiaries from the beginning of the quarterly or annual period covered by the statements then being furnished to the date of the certificate and that such review shall not have disclosed the existence during such period of any condition or event that constitutes a Default or an Event of Default that is continuing as of the end of such quarterly or annual period, as the case may be, and, if any such condition or event then exists (including, without limitation, any such event or condition resulting from the failure of the Company or any Subsidiary to comply with any Environmental Law), specifying the nature and period of existence thereof and what action the Company shall have taken or proposes to take with respect thereto.
 
Section 7.3.          Inspection.  The Company shall permit the representatives of each Purchaser and each holder of Notes that is an Institutional Investor:
 
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(a)          No Default — if no Default under Section 11(b) or an Event of Default then exists, at the expense of such Purchaser or such holder and upon reasonable prior written notice to the Company, to visit the principal executive office of the Company, to discuss the affairs, finances and accounts of the Company, its Restricted Subsidiaries and New Jersey Natural Gas with the Company’s officers, and, with the consent of the Company (which consent will not be unreasonably withheld) to visit the other offices and properties of the Company, each Restricted Subsidiary and New Jersey Natural Gas, all at such reasonable times during normal business hours and as often as may be reasonably requested in writing; and
 
(b)         Default — if a Default under Section 11(b) or an Event of Default then exists, at the expense of the Company, upon prior written notice to the Company, to visit and inspect any of the offices or properties of the Company, any Restricted Subsidiary or New Jersey Natural Gas, to examine all their respective books of account, records, reports and other papers, to make copies and extracts therefrom, and to discuss their respective affairs, finances and accounts with their respective officers and independent public accountants (and by this provision the Company authorizes said accountants to discuss the affairs, finances and accounts of the Company, its Restricted Subsidiaries and New Jersey Natural Gas), all at such times during normal business hours and as often as may be requested.
 
Section 8.             Prepayment of the Notes.
 
Section 8.1.         Maturity; Required Prepayments.  As provided therein, the entire unpaid principal balance of each Note shall be due and payable on the stated maturity date thereof.  The Notes shall not be subject to required prepayments.
 
Section 8.2.         Optional Prepayments with Make-Whole Amount.  The Company may, at its option, upon notice as provided below, prepay at any time all, or from time to time any part of, the Notes, in an amount not less than $1,000,000 in aggregate principal amount of the Notes then outstanding in the case of a partial prepayment, at 100% of the aggregate principal amount so prepaid together with interest accrued thereon to the date of such prepayment and the Make-Whole Amount, if any, determined for the prepayment date with respect to such principal amount; provided that, any time on or after September 15, 2032, the Company may, at its option, upon notice as provided below, prepay all or any part of the Notes at 100% of the aggregate principal amount so prepaid together with interest accrued thereon to the date of such prepayment.  The Company will give each holder of Notes to be prepaid pursuant to this Section 8.2 written notice of such optional prepayment under this Section 8.2 not less than 30 days and not more than 60 days prior to the date fixed for such prepayment.  Each such notice shall specify such date (which shall be a Business Day), the aggregate principal amount of the Notes to be prepaid on such date, the principal amount of each Note held by such holder to be prepaid (determined in accordance with Section 8.3), and the interest to be paid on the prepayment date with respect to such principal amount being prepaid, and shall be accompanied by a certificate of a Senior Financial Officer as to the estimated Make-Whole Amount due in connection with such prepayment (calculated as if the date of such notice were the date of the prepayment), setting forth the details of such computation.  Two Business Days prior to such prepayment, the Company shall deliver to each holder of Notes to be prepaid pursuant to this Section 8.2 a certificate of a Senior Financial Officer specifying the calculation of such Make-Whole Amount as of the specified prepayment date.
 
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Section 8.3.         Allocation of Partial Prepayments.  In the case of each partial prepayment of the Notes pursuant to Section 8.2 hereof, the principal amount of the Notes to be prepaid shall be allocated among all of the Notes at the time outstanding in proportion, as nearly as reasonably practicable, to the respective unpaid principal amounts thereof not theretofore called for prepayment.  All partial purchases of the Notes made pursuant to Section 8.5(b) and partial prepayments of the Notes made pursuant to Section 8.7 shall be applied only to the Notes of the holders who have elected to participate in such purchase or prepayment of the Notes.
 
Section 8.4.         Maturity; Surrender, Etc.  In the case of each prepayment of Notes pursuant to this Section 8, the principal amount of each Note to be prepaid shall mature and become due and payable on the date fixed for such prepayment (which shall be a Business Day), together with interest on such principal amount accrued to such date and the applicable Make-Whole Amount, if any.  From and after such date, unless the Company shall fail to pay such principal amount when so due and payable, together with the interest and Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall cease to accrue.  Any Note paid or prepaid in full shall be surrendered to the Company and cancelled and shall not be reissued, and no Note shall be issued in lieu of any prepaid principal amount of any Note.
 
Section 8.5.          Purchase of Notes.  The Company will not, and will not permit any Affiliate to, purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding Notes except (a) upon the payment or prepayment of the Notes in accordance with the terms of this Agreement and the Notes or (b) pursuant to an offer to purchase made by the Company or an Affiliate pro rata to the holders of all Notes at the time outstanding upon the same terms and conditions.  Any such offer shall provide each holder with sufficient information which, in the opinion of the Company, when taken together with information with respect to the Company and its Subsidiaries that may be available on the website of the U.S. Securities and Exchange Commission (presently www.sec.gov), would enable such holder to make an informed decision with respect to such offer, and shall remain open for at least 15 Business Days.  If the holders of more than 50% of the principal amount of the Notes then outstanding accept such offer, the Company shall promptly notify the remaining holders of the Notes of such fact and the expiration date for the acceptance by holders of Notes of such offer shall be extended by the number of days necessary to give each such remaining holder at least 10 Business Days from its receipt of such notice to accept such offer.  The Company will promptly cancel all Notes acquired by it or any Affiliate pursuant to any payment, prepayment or purchase of Notes pursuant to any provision of this Agreement and no Notes may be issued in substitution or exchange for any such Notes.
 
Section 8.6.       Make-Whole Amount for Notes.  The term “Make-Whole Amount” shall mean, with respect to any Note, an amount equal to the excess, if any, of the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of such Note over the amount of such Called Principal, provided that the Make-Whole Amount may in no event be less than zero.  For the purposes of determining the Make-Whole Amount, the following terms have the following meanings:
 
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“Called Principal” shall mean, with respect to any Note, the principal of such Note that is to be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.
 
“Discounted Value” shall mean, with respect to the Called Principal of any Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (applied on the same periodic basis as that on which interest on the Notes is payable) equal to the Reinvestment Yield with respect to such Called Principal.
 
“Reinvestment Yield” shall mean, with respect to the Called Principal of any Note, 0.50% over the yield to maturity implied by the ask-side yield(s) reported as of 10:00 a.m. (New York, New York time) on the second Business Day preceding the Settlement Date with respect to such Called Principal, on the display designated as “Page PX1”  (or such other display as may replace Page PX1) on Bloomberg Financial Markets for the most recently issued actively traded on-the-run U.S. Treasury securities (“Reported”) having a maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date.  If there are no such U.S. Treasury securities Reported having a maturity equal to such Remaining Average Life, then such implied yield to maturity will be determined by (a) converting U.S. Treasury bill quotations to bond equivalent yields in accordance with accepted financial practice and (b) interpolating linearly between the yields Reported for the applicable most recently issued actively traded on-the-run U.S. Treasury securities with the maturities (1) closest to and greater than such Remaining Average Life and (2) closest to and less than such Remaining Average Life.  The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the applicable Note.
 
If such yields are not Reported or the yields Reported as of such time are not ascertainable (including by way of interpolation), then “Reinvestment Yield” means, with respect to the Called Principal of any Note, 0.50% over the yield to maturity implied by the U.S. Treasury constant maturity yields reported, for the latest day for which such yields have been so reported as of the second Business Day preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release H.15 (or any comparable successor publication) for the U.S. Treasury constant maturity having a term equal to the Remaining Average Life of such Called Principal as of such Settlement Date.  If there is no such U.S. Treasury constant maturity having a term equal to such Remaining Average Life, such implied yield to maturity will be determined by interpolating linearly between (1) the U.S. Treasury constant maturity so reported with the term closest to and greater than such Remaining Average Life and (2) the U.S. Treasury constant maturity so reported with the term closest to and less than such Remaining Average Life.  The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the applicable Note.
 
“Remaining Average Life” shall mean, with respect to any Called Principal, the number of years obtained by dividing (i) such Called Principal into (ii) the sum of the products obtained by multiplying (a) the principal component of each Remaining Scheduled Payment with respect to such Called Principal by (b) the number of years, computed on the basis of a 360-day year composed of twelve 30-day months and calculated to two decimal places, that will elapse between the Settlement Date with respect to such Called Principal and the scheduled due date of such Remaining Scheduled Payment.
 
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“Remaining Scheduled Payments” shall mean, with respect to the Called Principal of any Note, all payments of such Called Principal and interest thereon that would be due after the Settlement Date with respect to such Called Principal and if no payment of such Called Principal were made prior to its scheduled due date, provided that if such Settlement Date is not a date on which interest payments are due to be made under the terms of the Notes, then the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued to such Settlement Date and required to be paid on such Settlement Date pursuant to Section 8.2 or Section 12.1.
 
“Settlement Date” shall mean, with respect to the Called Principal of any Note, the date on which such Called Principal is to be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.
 
Section 8.7.          Offer to Prepay upon Asset Disposition.
 
(a)          Notice and Offer.  In the event of a Transfer where the Company has elected to apply all or a portion of the Net Proceeds Amount of such Transfer as a Debt Prepayment Application pursuant to Section 10.6(b), the Company shall, no later than the 305th day following the date of such Transfer, give written notice of such event (an “Asset Disposition Prepayment Event”) to each holder of Notes.  Such notice shall contain, and shall constitute, an irrevocable offer to prepay a Ratable Portion of the Notes held by such holder on the date (which shall be a Business Day) specified in such notice (the “Asset Disposition Prepayment Date”) which date shall be not less than 30 days and not more than 60 days after such notice.
 
(b)          Acceptance and Payment.  A holder of Notes may accept or reject the offer to prepay pursuant to this Section 8.7 by causing a notice of such acceptance or rejection to be delivered to the Company at least 10 days prior to the Asset Disposition Prepayment Date.  A failure by a holder of the Notes to respond to an offer to prepay made pursuant to this Section 8.7 shall be deemed to constitute a rejection of such offer by such holder.  If so accepted, such offered prepayment in respect of the Ratable Portion of the Notes of each holder that has accepted such offer shall be due and payable on the Asset Disposition Prepayment Date.  Such offered prepayment shall be made at 100% of the aggregate Ratable Portion of the Notes of each holder that has accepted such offer, together with interest on that portion of the Notes then being prepaid accrued to the Asset Disposition Prepayment Date, but without any Make-Whole Amount.  If any holder of a Note rejects or is deemed to have rejected such offer of prepayment, the Company may use the Ratable Portion for such Note for general corporate purposes.
 
(c)          Officer’s Certificate.  Each offer to prepay the Notes pursuant to this Section 8.7 shall be accompanied by a certificate, executed by a Senior Financial Officer and dated the date of such offer, specifying: (1) the Asset Disposition Prepayment Date; (2) that such offer is being made pursuant to this Section 8.7 and that the failure by a holder to respond to such offer by the deadline established in Section 8.7(b) shall result in such offer to such holder being deemed rejected; (3) the Ratable Portion of each such Note offered to be prepaid; (4) the interest that would be due on the Ratable Portion of each such Note offered to be prepaid, accrued to the Asset Disposition Prepayment Date; (5) that the conditions of this Section 8.7 have been satisfied and (6) in reasonable detail, a description of the nature and date of the Asset Disposition Prepayment Event giving rise to such offer of prepayment.
 
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Section 9.
Affirmative Covenants.
 
From the Execution Date until the Closing Date and thereafter, so long as any of the Notes are outstanding, the Company covenants that:
 
Section 9.1.          Compliance with Law.  The Company will, and will cause each of its Subsidiaries to, comply with all laws, ordinances or governmental rules or regulations to which each of them is subject, including, without limitation, ERISA (with respect to any Plan), Environmental Laws, the USA PATRIOT Act and the other laws and regulations that are referred to in Section 5.16, and will obtain and maintain in effect all licenses, certificates, permits, franchises and other governmental authorizations necessary to the ownership of their respective properties or to the conduct of their respective businesses, in each case to the extent necessary to ensure that non-compliance with such laws, ordinances or governmental rules or regulations or failures to obtain or maintain in effect such licenses, certificates, permits, franchises and other governmental authorizations would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
 
Section 9.2.        Insurance.  The Company will, and will cause each of its Restricted Subsidiaries and New Jersey Natural Gas to, maintain, with financially sound and reputable insurers, insurance with respect to their respective properties and businesses against such casualties and contingencies, of such types, on such terms and in such amounts (including deductibles, co-insurance and self-insurance, if adequate reserves are maintained with respect thereto) as is customary in the case of entities of established reputations engaged in the same or a similar business and in the same industry and similarly situated.
 
Section 9.3.          Maintenance of Properties.  The Company will, and will cause each of its Restricted Subsidiaries and New Jersey Natural Gas to, maintain and keep, or cause to be maintained and kept, their respective properties in good repair, working order and condition (other than ordinary wear and tear), so that the business carried on in connection therewith may be properly conducted at all times, provided that this Section shall not prevent the Company, any Restricted Subsidiary or New Jersey Natural Gas from discontinuing the operation and the maintenance of any of its properties if such discontinuance is desirable in the conduct of its business and the Company has concluded that such discontinuance would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
 
Section 9.4.          Payment of Taxes and Claims.  The Company will, and will cause each of its Subsidiaries to, file all income tax or similar tax returns required to be filed in any jurisdiction and pay and discharge all taxes shown to be due and payable on such returns and all other taxes, assessments, governmental charges or levies payable by any of them, to the extent the same have become due and payable and before they have become delinquent, provided that neither the Company nor any Subsidiary need pay any such tax, assessment, governmental charge or levy if (1) the amount, applicability or validity thereof is contested by the Company or such Subsidiary on a timely basis in good faith and in appropriate proceedings, and the Company or a Subsidiary has established adequate reserves therefor in accordance with GAAP on the books of the Company or such Subsidiary or (2) the nonpayment of all such taxes, assessments, governmental charges and levies would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
 
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Section 9.5.         Corporate Existence, Etc.  Subject to Sections 10.6 through 10.8, inclusive, (a) the Company will at all times preserve and keep in full force and effect its corporate existence, and (b) the Company will at all times preserve and keep in full force and effect the corporate existence of each of its Restricted Subsidiaries and New Jersey Natural Gas (unless merged into the Company or a Wholly‑Owned Restricted Subsidiary) and all rights and franchises of the Company, its Restricted Subsidiaries and New Jersey Natural Gas unless, in the good faith judgment of the Company, the termination of or failure to preserve and keep in full force and effect such corporate existence, right or franchise would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
 
Section 9.6.         Ownership of Subsidiaries.  The Company shall at all times own (a) 100% of the issued and outstanding common stock of New Jersey Natural Gas and 51% or more of the issued and outstanding Voting Stock of New Jersey Natural Gas and (b) subject to Sections 10.6, 10.7 and 10.8, 51% or more of the issued and outstanding Voting Stock of each Guarantor.
 
Section 9.7.         Guaranty Agreement.  (a) The Company shall promptly, and in any event within 15 Business Days after (1) the formation or acquisition of a new Restricted Subsidiary (other than a Regulated Entity), (2) the occurrence of any other event creating a new Restricted Subsidiary (other than a Regulated Entity), (3) the designation of an Unrestricted Subsidiary (other than a Regulated Entity) as a Restricted Subsidiary or (4) an Unrestricted Subsidiary or a Regulated Entity becoming or being a guarantor or co‑obligor in respect of any Bank Credit Agreement, cause such Subsidiary to execute and deliver a supplement to the Guaranty Agreement (a “Guaranty Supplement”) in the form of Exhibit A to the Guaranty Agreement.
 
(b)          Within 15 days of the delivery by any Subsidiary of a Guaranty Supplement pursuant to Section 9.7(a), the Company shall cause such Subsidiary to deliver to each Purchaser and each holder of Notes:
 
(1)          such documents and evidence with respect to such Subsidiary as any Purchaser or holder may reasonably request in order to establish the existence and good standing of such Subsidiary and evidence that the Board of Directors of such Subsidiary has adopted resolutions authorizing the execution and delivery of such Guaranty Supplement and the guaranty of the Notes;
 
(2)          evidence of compliance with such Subsidiary’s outstanding Debt instruments in the form of (i) a compliance certificate from such Subsidiary to the effect that such Subsidiary is in compliance with all terms and conditions of its outstanding Debt instruments, (ii) consents or approvals of the holder or holders of any evidence of Debt or security, and/or (iii) amendments of agreements pursuant to which any evidence of Debt or security may have been issued, all as may be reasonably deemed necessary by the Purchasers or the holders of Notes to permit the execution and delivery of such Guaranty Supplement by such Subsidiary;
 
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(3)          an opinion of counsel to the effect that (i) such Subsidiary is a corporation or other business entity, duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, has the corporate or other power and the authority to execute and deliver such Guaranty Supplement and to perform the Guaranty Agreement, (ii) the execution and delivery of such Guaranty Supplement and performance of the Guaranty Agreement has been duly authorized by all necessary action on the part of such Subsidiary, such Guaranty Supplement has been duly executed and delivered by such Subsidiary and the Guaranty Agreement constitutes the legal, valid and binding contract of such Subsidiary enforceable against such Subsidiary in accordance with its terms, subject to bankruptcy, insolvency, fraudulent conveyance or similar laws affecting creditors’ rights generally, and general principles of equity (regardless of whether the application of such principles is considered in a proceeding in equity or at law), (iii) the execution and delivery of such Guaranty Supplement and the performance by such Subsidiary of the Guaranty Agreement do not conflict with or result in any breach of any of the provisions of or constitute a default under or result in the creation of a Lien upon any of the property of such Subsidiary pursuant to the provisions of any law, order, rule or regulation, its charter documents or any agreement or other instrument known to such counsel to which such Subsidiary is a party to or by which such Subsidiary may be bound, and (iv) no approval, consent or withholding of objection on the part of, or filing, registration or qualification with, any Governmental Authority, Federal or state, is necessary in connection with the lawful execution and delivery of such Guaranty Supplement by such Subsidiary or the performance of the Guaranty Agreement by such Subsidiary, which opinion may contain such assumptions and qualifications as are reasonably acceptable to the Required Holders; and
 
(4)          all other documents and showings reasonably requested by the Purchasers or the holders of Notes in connection with the execution and delivery of such Guaranty Supplement, which documents shall be reasonably satisfactory in form and substance to such Purchasers and holders and their special counsel, and each Purchaser and holder of Notes shall have received a copy (executed or certified as may be appropriate) of all of the foregoing legal documents.
 
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(c)          If at any time pursuant to the terms and conditions of each Bank Credit Agreement  any Guarantor is discharged and released from its Guaranty of Debt under such Bank Credit Agreement and if (i) such Guarantor is not a co-obligor under such Bank Credit Agreement or a co-obligor or guarantor under any other Bank Credit Agreement, (ii) immediately preceding the release of such Guarantor from its Guaranty of the Debt under this Agreement and the Notes and after giving effect thereto, no Default or Event of Default will have existed or would exist, (iii) any fees or other consideration are given to the lenders under each such Bank Credit Agreement to obtain such discharge and release, each holder of a Note shall have received such fees or other consideration on a pro rata basis in proportion to the respective outstanding principal amount of such Debt under such Bank Credit Agreement and the outstanding principal amount of such holder’s Notes or, prior to the Closing, the principal amount of Notes to be purchased by such Purchaser pursuant to Schedule A hereto (it being understood that any fees or other consideration paid to any lender under any Bank Credit Agreement (including, without limitation, any new Bank Credit Agreement) in order to obtain an extension to the term or an increase in the amount of the commitments to lend under such Bank Credit Agreement, or as a part of establishing such new Bank Credit Agreement, shall not be included as part of any fees or other consideration covered by this sentence, notwithstanding that such extension, increase or Bank Credit Agreement, including such new Bank Credit Agreement, may contain a discharge or release of a Guarantor), and (iv) the Company shall have delivered to each Purchaser and each holder of Notes an Officer’s Certificate certifying that the conditions specified in clauses (i) and (ii) above have been satisfied, then, upon receipt by the Purchasers and holders of Notes of such Officer’s Certificate, such Guarantor will be discharged and released, automatically and without the need for any further action, from its obligations under its Guaranty of the Debt under this Agreement and the Notes.  Without limiting the foregoing, for purposes of further assurance, each of the Purchasers and each of the holders of the Notes agrees to provide to the Company and such Guarantor, if reasonably requested by the Company or such Guarantor and at the Company’s expense, written evidence of such discharge and release signed by such Purchaser and holder.
 
Section 9.8.          New Jersey Natural Gas Regulated Nature.  The Company will at all times cause New Jersey Natural Gas to be and remain a Person that is subject under law to regulation by a public utility commission or other governmental regulatory body with oversight responsibilities for utilities.
 
Section 9.9.          Notes to Rank Pari Passu.  The Company will ensure that its payment obligations under this Agreement and the Notes will at all times rank at least pari passu in right of payment with all other unsecured Senior Debt (actual or contingent) of the Company.
 
Section 9.10.         Rating on the Notes.
 
(a)          The Company shall at all times maintain a Debt Rating for the Notes from an Acceptable Rating Agency; provided, that, if the applicable Acceptable Rating Agency (i) ceases providing a Debt Rating for the Notes without having provided the Company with at least 60 days advance notice (other than as a result of the Company failing to pay applicable fees and expenses or failing to reasonably cooperate with the Acceptable Rating Agency) (the earlier of the date notice is provided to the Company or, if no notice is provided, the date the Acceptable Rating Agency ceases providing the Debt Rating, a “Ratings Withdrawal Event”), or (ii) ceases to qualify as an Acceptable Rating Agency (the date of such event, a “Ratings Agency Event” and, together with a Ratings Withdrawal Event, a “Ratings Termination Event”), then the Company shall use its commercially reasonable efforts to obtain a new Debt Rating for the Notes from an Acceptable Rating Agency as soon as practicable and, in any event, on or before the 60th day following the Ratings Termination Event or, if the Company diligently pursues a new Debt Rating but is unable to do so by the 60th day following the Ratings Termination Event, such period shall be extended for an additional 30 days.
 
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(b)          At any time that the Debt Rating maintained pursuant to clause (a) above is not a public rating, the Company will provide to each holder of a Note (x) at least annually (on or before each anniversary of the date of the Closing) and (y) promptly upon any change in such Debt Rating, an updated Private Rating Letter evidencing such Debt Rating and an updated Private Rating Rationale Report with respect to such Debt Rating.  In addition to the foregoing information and any information specifically required to be included in any Private Rating Letter or Private Rating Rationale Report (as set forth in the respective definitions thereof), if the SVO or any other Governmental Authority having jurisdiction over any holder of any Notes from time to time requires any additional information with respect to the Debt Rating of the Notes, the Company shall use commercially reasonable efforts to procure such information from the Acceptable Rating Agency.
 
Section 10.          Negative Covenants.
 
From the Execution Date until the Closing Date and thereafter, so long as any of the Notes are outstanding, the Company covenants that:
 
Section 10.1.         Leverage Ratio.  The Company will not permit, as of the end of any fiscal quarter of the Company, the ratio of Consolidated Total Debt to Consolidated Total Capitalization to exceed 0.70 to 1.00; provided that, if the Company is not in compliance with the requirements of Section 9.10 at any time, the ratio of Consolidated Total Debt to Consolidated Total Capitalization shall be reduced to 0.65 to 1.00 until the date a new Debt Rating complying with the requirements of Section 9.10 is delivered to the holders of Notes.
 
Section 10.2.        Limitation on Priority Debt.  The Company will not permit, as of the end of any fiscal quarter of the Company, Priority Debt to exceed an amount equal to 20% of Consolidated Total Capitalization.
 
Section 10.3.         Liens.  The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly create, incur, assume or permit to exist (upon the happening of a contingency or otherwise) any Lien on or with respect to any property or asset (including, without limitation, any document or instrument in respect of goods or accounts receivable) of the Company or any such Restricted Subsidiary, whether now owned or held or hereafter acquired, or any income or profits therefrom, or assign or otherwise convey any right to receive income or profits, except:
 
(a)          Liens for taxes, assessments or other governmental charges which are not yet due and payable or the payment of which is not at the time required by Section 9.4;
 
(b)        statutory Liens of landlords and Liens of carriers, warehousemen, mechanics, materialmen and other similar Liens, in each case, incurred in the ordinary course of business for sums not yet due and payable or the payment of which is not at the time required by Section 9.4;
 
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(c)          Liens (other than any Lien imposed by Section 430 of the Code or Section 4068 of ERISA or any successor thereto) incurred or deposits made in the ordinary course of business (1) in connection with workers’ compensation, unemployment insurance and other types of social security or retirement benefits, (2) to secure (or to obtain letters of credit that secure) the performance of tenders, statutory obligations, surety bonds, appeal bonds, bids, leases (other than Capital Leases), performance bonds, purchase, construction or sales contracts, and other similar obligations, in each case not incurred or made in connection with the borrowing of money, the obtaining of advances or credit or the payment of the deferred purchase price of property or (3) in connection with required margin collateral account deposits made in the ordinary course in connection with Hedging Contracts permitted by this Agreement;
 
(d)        subject to Section 11(j), any attachment or judgment Lien, unless the judgment it secures shall not, within 30 days after the entry thereof, have been discharged or execution thereof stayed pending appeal, or shall not have been discharged within 30 days after the expiration of any such stay;
 
(e)         leases or subleases granted to others, easements, rights-of-way, restrictions and other similar charges or encumbrances or minor survey exceptions, in each case incidental to, and not interfering with, the ordinary conduct of the business of the Company or any of its Restricted Subsidiaries, provided that such Liens do not, in the aggregate, materially detract from the value of such property;
 
(f)          Liens on property or assets of any Restricted Subsidiary securing Debt owing to the Company or to a Wholly-Owned Restricted Subsidiary;
 
(g)          Liens existing on the Execution Date and described in Schedule 5.15;
 
(h)       Liens on accounts receivable owned by Securitization Subsidiaries that are Restricted Subsidiaries and incurred pursuant to Receivables Securitization Transactions;
 
(i)          any Lien created to secure all or any part of the purchase price, or to secure Debt incurred or assumed to pay all or any part of the purchase price or cost of construction, of property (or any improvement thereon) acquired or constructed by the Company or a Restricted Subsidiary after the Execution Date, provided that:
 
(1)          any such Lien shall extend solely to the item or items of such property (or improvement thereon) so acquired or constructed and, if required by the terms of the instrument originally creating such Lien, other property (or improvement thereon) which is an improvement to or is acquired for specific use in connection with such acquired or constructed property (or improvement thereon) or which is real property being improved by such acquired or constructed property (or improvement thereon);
 
(2)          the principal amount of the Debt secured by any such Lien shall at no time exceed an amount equal to the lesser of (i) the cost to the Company or such Restricted Subsidiary of the property (or improvement thereon) so acquired or constructed and (ii) the Fair Market Value (as determined in good faith by one or more officers of the Company to whom authority to enter into the subject transaction has been delegated by the board of directors of the Company) of such property (or improvement thereon) at the time of such acquisition or construction;
 
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(3)          any such Lien shall be created contemporaneously with, or within 180 days after, the acquisition or construction of such property; and
 
(4)          the aggregate principal amount of all Debt secured by such Liens shall be permitted by the limitation set forth in Section 10.1 if tested on the date such Lien is created and not as of the end of the immediately preceding fiscal quarter of the Company;
 
(j)          any Lien existing on property of a Person immediately prior to its being consolidated with or merged into the Company or a Restricted Subsidiary or its becoming a Subsidiary, or any Lien existing on any property acquired by the Company or any Restricted Subsidiary at the time such property is so acquired (whether or not the Debt secured thereby shall have been assumed), provided that (1) no such Lien shall have been created or assumed in contemplation of such consolidation or merger or such Person becoming a Subsidiary or such acquisition of property, (2) each such Lien shall extend solely to the item or items of property so acquired and, if required by the terms of the instrument originally creating such Lien (i) other property which is an improvement to or is acquired for specific use in connection with such acquired property or (ii) other property that does not constitute property or assets of the Company or any of its Restricted Subsidiaries and (3) the aggregate amount of all Debt secured by such Liens shall be permitted by the limitation set forth in Section 10.1 if tested on the date of such event and not as of the end of the immediately preceding fiscal quarter of the Company;
 
(k)          any Lien renewing, extending or refunding any Lien permitted by paragraphs (g), (i) or (j) of this Section 10.3, provided that (1) the principal amount of Debt secured by such Lien immediately prior to such extension, renewal or refunding is not increased or the maturity thereof reduced, (2) such Lien is not extended to any other property and (3) immediately after such extension, renewal or refunding no Default or Event of Default would exist (provided that, with respect to Sections 10.1 and 10.2, calculation of compliance therewith shall be made as of the date of determination under this Section 10.3(k) and not as of the end of the immediately preceding fiscal quarter of the Company; and
 
(l)          other Liens not otherwise permitted by paragraphs (a) through (k), inclusive, of this Section 10.3 securing Debt, provided that the Debt secured by such Liens shall be permitted by the limitations set forth in Sections 10.1 and 10.2 if tested on the date such Lien is created and not as of the end of the immediately preceding fiscal quarter of the Company.
 
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Notwithstanding the foregoing, the Company will not, and will not permit any Subsidiary to, grant or incur (upon the happening of a contingency or otherwise) (i) any Lien securing any Debt incurred by the Company or any Subsidiary under any Bank Credit Agreement (other than cash collateral for letter of credit obligations upon the termination of any Bank Credit Agreement with respect to letters of credit issued under any Bank Credit Agreement that remain outstanding after such termination, and customary Liens and set-off rights and similar types of Liens incurred in the ordinary course of business pursuant to deposit or custody agreements and hedging transactions (whether as currency or interest rate swaps, caps, floors, collars or other interest rate or currency exchange management devices, or otherwise)), in each case whether arising under any Bank Credit Agreement, by operation of law, or otherwise, but not any other Debt of the Company, unless the Notes shall also be secured by such Lien on a pari passu basis pursuant to documentation, including an intercreditor agreement, in form and substance satisfactory to the Required Holders, with all parties entitled to the benefit of such Liens, or with the agent for such parties if such agent is the secured party of record with regard to such granted or created Lien and (ii) any Lien on or with respect to the Voting Stock of New Jersey Natural Gas owned by the Company or any Subsidiary.
 
Section 10.4.        Restricted Payments.  (a)  The Company will not, and will not permit any Restricted Subsidiary to, declare or make or incur any liability to declare or make any Restricted Payment unless immediately after giving effect to such action no Default or Event of Default would exist (provided that, with respect to Sections 10.1 and 10.2, calculation of compliance therewith shall be made as of the date of determination under this Section 10.4 and not as of the end of the immediately preceding fiscal quarter of the Company).
 
(b)          The Company will not, and will not permit any Restricted Subsidiary to, declare a Restricted Payment that is not payable within 60 days of such declaration.
 
Section 10.5.       Restrictions on Dividends of Subsidiaries, Etc.  The Company will not, and will not permit any Restricted Subsidiary to, enter into any agreement which would restrict any Restricted Subsidiary’s ability or right to pay dividends to, or make advances to or investments in, the Company or, if such Restricted Subsidiary is not directly owned by the Company, the “parent” Restricted Subsidiary of such Restricted Subsidiary; provided that the foregoing shall not apply to restrictions and conditions imposed by law, this Agreement, any Bank Credit Agreement or any other document or instrument governing Debt not prohibited by this Agreement so long as such restrictions and conditions in such other document or instrument are no more restrictive with respect to such Restricted Subsidiary than the restrictions in any Bank Credit Agreement as in effect on the Execution Date.
 
Section 10.6.        Sale of Assets, Etc.  (a) Except as permitted under Section 10.7 and Section 10.8, the Company will not, and will not permit any of its Restricted Subsidiaries to, make any Asset Disposition unless:
 
(1)          in the good faith opinion of the Company, the Asset Disposition is in the best interest of the Company or such Restricted Subsidiary;
 
(2)          immediately after giving effect to the Asset Disposition, no Default or Event of Default would exist (provided that, with respect to Sections 10.1 and 10.2, calculation of compliance therewith shall be made as of the date of determination under this Section 10.6 and not as of the end of the immediately preceding fiscal quarter of the Company); and
 
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(3)          immediately after giving effect to the Asset Disposition the Disposition Value of all property that was the subject of any Asset Disposition occurring in the immediately preceding 12 consecutive month period would not exceed 10% of Consolidated Tangible Assets as of the end of the then most recently ended fiscal year of the Company.
 
(b)         If the Net Proceeds Amount for any Transfer is, within 365 days after such Transfer, (1) applied to a Debt Prepayment Application, (2) applied to or would otherwise constitute a Property Reinvestment Application or (3) applied to any combination of the foregoing clauses (1) and (2), then such Transfer, only for the purpose of determining compliance with subsection (3) of Section 10.6(a) as of a date on or after the Net Proceeds Amount is so applied, shall be deemed not to be an Asset Disposition.
 
Section 10.7.       Merger, Consolidation, Etc.  The Company will not, and will not permit any Restricted Subsidiary to, consolidate with or merge with any other Person or convey, transfer or lease all or substantially all of its assets in a single transaction or series of transactions to any Person (except that a Restricted Subsidiary may (x) consolidate with or merge with, or convey, transfer or lease all or substantially all of its assets in a single transaction or series of transactions to, the Company or another Restricted Subsidiary or any other Person so long as such Restricted Subsidiary is the surviving Person and (y) convey, transfer or lease all of its assets in compliance with the provisions of Section 10.6 or Section 10.8), provided that the foregoing restriction does not apply to the consolidation or merger of the Company with, or the conveyance, transfer or lease of all or substantially all of the assets of the Company in a single transaction or series of transactions to, any Person so long as:
 
(a)          the successor formed by such consolidation or the survivor of such merger or the Person that acquires by conveyance, transfer or lease all or substantially all of the assets of the Company as an entirety, as the case may be (the “Successor Corporation”), shall be a solvent Person organized and existing under the laws of the United States or any State thereof (including the District of Columbia);
 
(b)          if the Company is not the Successor Corporation, (1) such Person shall have executed and delivered to each Purchaser and holder of the Notes its assumption of the due and punctual performance and observance of each covenant and condition of this Agreement and the Notes (pursuant to such agreements or instruments as shall be reasonably satisfactory to the Required Holders), (2) such Person shall have caused to be delivered to each Purchaser and each holder of the Notes an opinion of inside counsel to the Company, Troutman Pepper Hamilton Sanders LLP or another nationally recognized counsel, or other counsel reasonably satisfactory to the Required Holders, to the effect that all agreements or instruments effecting such assumption are enforceable in accordance with their terms and comply with the terms hereof (subject to bankruptcy, insolvency, fraudulent conveyance or similar laws affecting creditors’ rights generally, and general principles of equity (regardless of whether the application of such principles is considered in a proceeding in equity or at law) and subject to such other customary qualifications and exceptions for legal opinions of this type or as may be reasonably acceptable to the Required Holders) and (3) each Guarantor shall have reaffirmed, in writing, its obligations under the Guaranty Agreement; and
 
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(c)        immediately after giving effect to such transaction, no Default or Event of Default would exist (provided that, with respect to Sections 10.1 and 10.2, calculation of compliance therewith shall be made as of the date of determination under this Section 10.7 and not as of the end of the immediately preceding fiscal quarter of the Company).
 
No such conveyance, transfer or lease of all or substantially all of the assets of the Company shall have the effect of releasing the Company or any Successor Corporation that shall theretofore have become such in the manner prescribed in this Section 10.7 from its liability under this Agreement or the Notes.
 
For all purposes under this Agreement, in connection with any division or plan of division under Delaware law (or any comparable event under a different jurisdiction’s laws): (a) if any asset, right, obligation or liability of any Person becomes the asset, right, obligation or liability of a different Person, then it shall be deemed to have been transferred from the original Person to the subsequent Person; provided that, if the original Person is a Restricted Subsidiary, the subsequent Person must also be a Restricted Subsidiary unless (i) the requirements of Section 10.6 or Section 10.8, as applicable, are satisfied in connection with such Transfer, or (ii) such Person would be permitted to be an Unrestricted Subsidiary under Section 10.13 and the requirements of Section 10.13 are satisfied to designate such Person an Unrestricted Subsidiary, and (b) if any new Person comes into existence, such new Person shall be deemed to have been organized on the first date of its existence by the holders of its equity interests at such time; provided that, if any Restricted Subsidiary undergoes a division or plan of division under Delaware law (or any comparable event under a different jurisdiction’s laws), any new Person which comes into existence as a result of such event shall be a Restricted Subsidiary unless (i) such formation would constitute a Transfer and the requirements of Section 10.6 or Section 10.8, as applicable, are satisfied in connection with such Transfer, or (ii) such Person would be permitted to be an Unrestricted Subsidiary under Section 10.13 and the requirements of Section 10.13 are satisfied to designate such Person an Unrestricted Subsidiary.
 
Section 10.8.       Disposal of Ownership of a Restricted Subsidiary.  Subject to Section 10.7, the Company will not, and will not permit any Restricted Subsidiary to, sell or otherwise dispose of any shares of Restricted Subsidiary Stock, nor will the Company permit any such Restricted Subsidiary to issue, sell or otherwise dispose of any shares of its own Restricted Subsidiary Stock, provided that the foregoing restrictions do not apply to:
 
(a)          the issue of directors’ qualifying shares by any such Restricted Subsidiary;
 
(b)          any such Transfer of Restricted Subsidiary Stock constituting a Transfer described in clause (a) of the definition of “Asset Disposition”; and
 
(c)        the Transfer of the Restricted Subsidiary Stock of a Restricted Subsidiary owned by the Company and its other Subsidiaries; provided that such Transfer satisfies the requirements of Section 9.6 and Section 10.6.
 
Section 10.9.        Limitations on Subsidiaries, Partnerships and Joint Ventures.  The Company will not, and will not permit any of its Restricted Subsidiaries to, own or create directly or indirectly any Restricted Subsidiaries other than (a) any Restricted Subsidiary which is a Regulated Entity, (b) any Restricted Subsidiary which is a Guarantor on the Execution Date and (c) any Restricted Subsidiary formed after the Execution Date that becomes a Guarantor under the Guaranty Agreement pursuant to Section 9.7.  The Company shall not, and shall not permit any Restricted Subsidiary to, become or agree to become (1) a general or limited partner in any general or limited partnership, except that the Company may be a general or limited partner in any Subsidiary and any Restricted Subsidiary may be a general or limited partner in any other Subsidiary and except that the Company and its Restricted Subsidiaries may be a limited partner in a Permitted Related Business Opportunity, (2) a member or manager of, or hold a limited liability company interest in, a limited liability company, except that the Company may be a member or manager of, or hold limited liability company interests in, its Subsidiaries and Restricted Subsidiaries may be members or managers of, or hold limited liability company interests in, other Subsidiaries and except that the Company and its Restricted Subsidiaries may be members or managers of, or hold limited liability company interests in a Permitted Related Business Opportunity or (3) a joint venturer or hold a joint venture interest in any joint venture, except that the Company and its Restricted Subsidiaries may become a joint venturer in or hold a joint venture interest in any joint venture that is a Permitted Related Business Opportunity.
 
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Section 10.10.      [Reserved].
 
Section 10.11.      Nature of Business.  The Company will not, and will not permit any of its Restricted Subsidiaries to, engage in any business if, as a result, the general nature of the business in which the Company and its Restricted Subsidiaries, taken as a whole, would then be engaged would be substantially and materially changed from the general nature of the business in which the Company and its Restricted Subsidiaries are engaged on the Execution Date.
 
Section 10.12.    Transactions with Affiliates.  Except in the case of a Permitted Related Business Opportunity, the Company will not, and will not permit any Restricted Subsidiary to, enter into, directly or indirectly, any Material transaction or group of related transactions (including, without limitation, the purchase, lease, sale or exchange of properties of any kind or the rendering of any service) with any Affiliate (other than the Company, a Restricted Subsidiary or New Jersey Natural Gas), except in the ordinary course and pursuant to the reasonable requirements of the Company’s or such Restricted Subsidiary’s business and upon fair and reasonable terms no less favorable to the Company or such Restricted Subsidiary than would be obtainable in a comparable arm’s-length transaction with a Person not an Affiliate.
 
Section 10.13.    Designation of Restricted and Unrestricted Subsidiaries.  (a) Subject to Section 10.13(b), the Company may designate any Subsidiary to be a Restricted Subsidiary and may designate any Restricted Subsidiary to be an Unrestricted Subsidiary by giving written notice to each holder of Notes that the Board of Directors of the Company has made such designation, provided, however, that no Subsidiary may be designated a Restricted Subsidiary and no Restricted Subsidiary may be designated an Unrestricted Subsidiary unless, at the time of such action and after giving effect thereto, (1) solely in the case of a Restricted Subsidiary being designated an Unrestricted Subsidiary, such Restricted Subsidiary being designated an Unrestricted Subsidiary shall not have any continuing Investment in the Company or any other Restricted Subsidiary and (2) no Default or Event of Default shall have occurred and be continuing (provided that, with respect to Sections 10.1 and 10.2, calculation of compliance therewith shall be made as of the date of determination under this Section 10.13 and not as of the end of the immediately preceding fiscal quarter of the Company).  Any Restricted Subsidiary which has been designated an Unrestricted Subsidiary and which has then been redesignated a Restricted Subsidiary, in each case in accordance with the provisions of the first sentence of this Section 10.13, shall not at any time thereafter be redesignated an Unrestricted Subsidiary without the prior written consent of the Required Holders.  Any Unrestricted Subsidiary which has been designated a Restricted Subsidiary and which has then been redesignated an Unrestricted Subsidiary, in each case in accordance with the provisions of the first sentence of this Section 10.13, shall not at any time thereafter be redesignated a Restricted Subsidiary without the prior written consent of the Required Holders.  If the Company enters into any credit facility or note purchase agreement (or any amendment thereof) after the Execution Date and New Jersey Natural Gas shall be designated as a “restricted subsidiary” thereunder, then the Company shall, within 10 Business Days of its entering into such credit facility or note purchase agreement (or any amendment thereof), designate New Jersey Natural Gas as a Restricted Subsidiary under this Agreement.  If the Company enters into any credit facility or note purchase agreement (or any amendment thereof) after the Execution Date and New Jersey Natural Gas shall be subjected to any negative covenants of the type included in this Section 10 of such credit facility or note purchase agreement, then and in any such event the Company shall give written notice thereof to each holder not later than 30 days following the date of execution of any such agreement or amendment.  Effective on the date of execution of any such agreement or amendment, such additional covenant that is included in such agreement or amendment and any related definitions shall be deemed to have been incorporated herein.  The Company further covenants to promptly execute and deliver at its expense (including, without limitation, the fees and expenses of counsel for the holders) an amendment to this Agreement in form and substance satisfactory to the Required Holders evidencing the amendment of this Agreement to include such additional covenant.
 
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(b)        The Company will cause each Subsidiary that is designated as a Restricted Subsidiary in Schedule 5.4 on the Execution Date to at all times remain a Restricted Subsidiary.
 
Section 10.14.     Economic Sanctions, Etc.  The Company covenants that it will not, and will not permit any Controlled Entity to, (a) become (including by virtue of being owned or controlled by a Blocked Person), own or control a Blocked Person or (b) directly or indirectly have any investment in or engage in any dealing or transaction (including any investment, dealing or transaction involving the proceeds of the Notes) with any Person if such investment, dealing or transaction (i) would cause any holder or any affiliate of such holder to be in violation of, or subject to sanctions under, any law or regulation applicable to such holder, or (ii) is prohibited by or subject to sanctions under any U.S. Economic Sanctions Laws.
 
Section 11.
Events of Default.
 
An “Event of Default” shall exist if any of the following conditions or events shall occur and be continuing:
 
(a)          the Company defaults in the payment of any principal or Make-Whole Amount on any Note when the same becomes due and payable, whether at maturity or at a date fixed for prepayment or by declaration or otherwise; or
 
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(b)          the Company defaults in the payment of any interest on any Note for more than five Business Days after the same becomes due and payable; or
 
(c)         the Company defaults in the performance of or compliance with any term contained in any of Section 9.6 through Section 9.8, inclusive, Section 10.1 through Section 10.9, inclusive, or Section 10.14; or
 
(d)         the Company defaults in the performance of or compliance with any term contained herein (other than those referred to in paragraphs (a), (b) and (c) of this Section 11 and other than Section 9.10) and such default is not remedied within 30 days after the earlier of (1) a Responsible Officer obtaining actual knowledge of such default and (2) the Company receiving written notice of such default from any holder of a Note (any such written notice to be identified as a “notice of default” and to refer specifically to this paragraph (d) of Section 11); or
 
(e)         any representation or warranty made in writing by or on behalf of the Company or any Guarantor or by any officer of the Company or any Guarantor in this Agreement, the Guaranty Agreement or in any writing furnished in connection with the transactions contemplated hereby proves to have been false or incorrect in any material respect on the date as of which made; or
 
(f)         (1) the Company or any Significant Subsidiary is in default (as principal or as guarantor or other surety) in the payment of any principal of or premium or make-whole amount or interest on any Debt that is outstanding in an aggregate principal amount of at least $30,000,000 (or its equivalent in the relevant currency of payment) beyond any period of grace provided with respect thereto or (2) the Company or any Significant Subsidiary is in default in the performance of or compliance with any term of any evidence of any Debt in an aggregate outstanding principal amount of at least $30,000,000 (or its equivalent in the relevant currency of payment) or of any mortgage, indenture or other agreement relating thereto or any other condition exists, and as a consequence of such default or condition such Debt has become, or has been declared (or one or more Persons are entitled to declare such Debt to be), due and payable before its stated maturity or before its regularly scheduled dates of payment or (3) as a consequence of the occurrence or continuation of any event or condition (other than the passage of time or the right of the holder of Debt to convert such Debt into equity interests), (i) the Company or any Significant Subsidiary has become obligated to purchase or repay Debt before its regular maturity or before its regularly scheduled dates of payment in an aggregate outstanding principal amount of at least $30,000,000 (or its equivalent in the relevant currency of payment) or (ii) one or more Persons have the right to require the Company or any Significant Subsidiary so to purchase or repay such Debt; or
 
(g)         the Company or any Significant Subsidiary is in default under the terms of any agreement involving any off‑balance sheet transaction (including any asset securitization, sale/leaseback transaction or Synthetic Lease) with obligations in the aggregate thereunder for which the Company or any Significant Subsidiary may be obligated in an amount in excess of $30,000,000 (or its equivalent in the relevant currency of payment), and such breach, default or event of default consists of the failure to pay (beyond any period of grace permitted with respect thereto) any obligation when due (whether at stated maturity, by acceleration or otherwise) or if such breach or default permits or causes the acceleration of any obligation or the termination of such agreement; or
 
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(h)         the Company or any Significant Subsidiary described in clauses (b) or (c)  of the definition thereof (1) is generally not paying, or admits in writing its inability to pay, its debts as they become due, (2) files, or consents by answer or otherwise to the filing against it of, a petition for relief or reorganization or arrangement or any other petition in bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency, reorganization, moratorium or other similar law of any jurisdiction, (3) makes an assignment for the benefit of its creditors, (4) consents to the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, (5) is adjudicated as insolvent or to be liquidated or (6) takes corporate action for the purpose of any of the foregoing; or
 
(i)        a court or other Governmental Authority of competent jurisdiction enters an order appointing, without consent by the Company or any of its Significant Subsidiaries, a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, or constituting an order for relief or approving a petition for relief or reorganization or any other petition in bankruptcy or for liquidation or to take advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution, winding-up or liquidation of the Company or any of its Significant Subsidiaries, or any such petition shall be filed against the Company or any of its Significant Subsidiaries and such petition shall not be dismissed within 60 days; or
 
(j)        a final judgment or judgments for the payment of money aggregating in excess of $30,000,000 (or its equivalent in the relevant currency of payment) (exclusive of amounts fully covered by valid and collectible insurance in respect thereof subject to customary deductibles) are rendered against one or more of the Company and its Significant Subsidiaries and which judgments are not, within 45 days after entry thereof (or such shorter period as judgment creditors are stayed pursuant to applicable law from executing on such judgment or judgments), bonded, discharged or stayed pending appeal, or are not discharged within 45 days after the expiration of such stay (or such shorter period as judgment creditors are stayed pursuant to applicable law from executing on such judgment or judgments); or
 
(k)         (1) default shall occur under the Guaranty Agreement to which a Significant Subsidiary described in clause (b) of the definition thereof is a party, and such default shall continue beyond the period of grace, if any, allowed with respect thereto, or (2) the Guaranty Agreement shall cease to be in full force and effect for any reason whatsoever, including, without limitation, a determination by any Governmental Authority or court that such agreement is invalid, void or unenforceable or any Guarantor shall contest or deny in writing the validity or enforceability of the Guaranty Agreement; or
 
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(l)          if (1) any Plan shall fail to satisfy the minimum funding standards of ERISA or the Code for any plan year or a waiver of such standards or extension of any amortization period is sought or granted under Section 412 of the Code, (2) a notice of intent to terminate any Plan on other than a standard basis shall have been filed with the PBGC by the Company or any ERISA Affiliate or the PBGC shall have notified the Company or any ERISA Affiliate of the institution of proceedings under Section 4042 of ERISA to terminate or appoint a trustee to administer any Plan or  that a Plan is the subject of any such proceedings, (3) the present value of the aggregate “amount of unfunded benefit liabilities” within the meaning of Section 4001(a)(18) of ERISA under all Plans (determined in accordance with Title IV of ERISA, as of the end of the most recent Plan year on the basis of the actuarial assumptions specified for funding purposes in the most recent actuarial valuation), shall exceed the aggregate actuarial value of their assets by more than $25,000,000, (4) the Company or any ERISA Affiliate shall have incurred any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans with respect to any Plan, other than for claims for benefits and funding obligations in the ordinary course, (5) the Company or any ERISA Affiliate incurs withdrawal liability with respect to any Multiemployer Plan or (6) the Company or any ERISA Affiliate establishes or amends any employee welfare benefit plan that provides post-employment welfare benefits in a manner that would increase the liability of the Company or any ERISA Affiliate thereunder; and any such event or events described in clauses (1) through (6) above, either individually or together with any other such event or events, would reasonably be expected to have a Material Adverse Effect.
 
As used in Section 11(l), the terms “employee benefit plan” and “employee welfare benefit plan” shall have the respective meanings assigned to such terms in Section 3 of ERISA.
 
Section 12.
Remedies on Default, Etc.
 
Section 12.1.        Acceleration.  (a) If an Event of Default with respect to the Company described in paragraph (h) or (i) of Section 11 (other than an Event of Default described in clause (1) of paragraph (h) or described in clause (6) of paragraph (h) by virtue of the fact that such clause encompasses clause (1) of paragraph (h)) has occurred, all the Notes then outstanding shall automatically become immediately due and payable.
 
(b)          If any other Event of Default has occurred and is continuing, the Required Holders may at any time at its or their option, by notice or notices to the Company, declare all the Notes then outstanding to be immediately due and payable.
 
(c)          If any Event of Default described in paragraph (a) or (b) of Section 11 has occurred and is continuing, any holder or holders of Notes at the time outstanding affected by such Event of Default may at any time, at its or their option, by notice or notices to the Company, declare all the Notes held by it or them to be immediately due and payable.
 
Upon any Note becoming due and payable under this Section 12.1, whether automatically or by declaration, such Note will forthwith mature and the entire unpaid principal amount of such Note, plus (1) all accrued and unpaid interest thereon (including, but not limited to, interest accrued thereon at the Default Rate) and (2) the Make-Whole Amount, if any, determined in respect of such principal amount (to the full extent permitted by applicable law) shall all be immediately due and payable, in each and every case without presentment, demand, protest or further notice, all of which are hereby waived.  The Company acknowledges, and the parties hereto agree, that each holder of a Note has the right to maintain its investment in the Notes free from repayment by the Company (except as herein specifically provided for), and that the provision for payment of the Make-Whole Amount by the Company in the event that the Notes are prepaid or are accelerated as a result of an Event of Default, is intended to provide compensation for the deprivation of such right under such circumstances.
 
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Section 12.2.       Other Remedies.  If any Default or Event of Default has occurred and is continuing, and irrespective of whether any Notes have become or have been declared immediately due and payable under Section 12.1, the holder of any Note at the time outstanding may proceed to protect and enforce the rights of such holder by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein, in any Note or in the Guaranty Agreement, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise.
 
Section 12.3.       Rescission.  At any time after any Notes have been declared due and payable pursuant to clause (b) or (c) of Section 12.1, the Required Holders, by written notice to the Company, may rescind and annul any such declaration and its consequences if (a) the Company has paid all overdue interest on the Notes, all principal of and Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid other than by reason of such declaration, and all interest on such overdue principal and Make-Whole Amount, if any, and (to the extent permitted by applicable law) any overdue interest in respect of the Notes, at the Default Rate, (b) neither the Company nor any other Person shall have paid any amounts which have become due solely by reason of such declaration, (c) all Events of Default and Defaults, other than non-payment of amounts that have become due solely by reason of such declaration, have been cured or have been waived pursuant to Section 17 and (d) no judgment or decree has been entered for the payment of any monies due pursuant hereto or to the Notes.  No rescission and annulment under this Section 12.3 will extend to or affect any subsequent Event of Default or Default or impair any right consequent thereon.
 
Section 12.4.        No Waivers or Election of Remedies, Expenses, Etc.  No course of dealing and no delay on the part of any holder of any Note in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice such holder’s rights, powers or remedies.  No right, power or remedy conferred by this Agreement, the Guaranty Agreement or by any Note upon any holder thereof shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise.  Without limiting the obligations of the Company under Section 15, the Company will pay to the holder of each Note on demand such further amount as shall be sufficient to cover all costs and expenses of such holder incurred in any enforcement or collection under this Section 12, including, without limitation, reasonable attorneys’ fees, expenses and disbursements.
 
Section 13.
Registration; Exchange; Substitution of Notes.
 
Section 13.1.        Registration of Notes.  The Company shall keep at its principal executive office a register for the registration and registration of transfers of Notes.  The name and address of each holder of one or more Notes, each transfer thereof and the name and address of each transferee of one or more Notes shall be registered in such register.  If any holder of one or more Notes is a nominee, then (a) the name and address of the beneficial owner of such Note or Notes shall also be registered in such register as an owner and holder thereof and (b) at any such beneficial owner’s option, either such beneficial owner or its nominee may execute any amendment, waiver or consent pursuant to this Agreement.  Prior to due presentment for registration of transfer, the Person in whose name any Note shall be registered shall be deemed and treated as the owner and holder thereof for all purposes hereof, and the Company shall not be affected by any notice or knowledge to the contrary.  The Company shall give to any holder of a Note that is an Institutional Investor promptly upon request therefor, a complete and correct copy of the names and addresses of all registered holders of Notes.
 
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Section 13.2.        Transfer and Exchange of Notes.  Upon surrender of any Note at the principal executive office of the Company for registration of transfer or exchange (and in the case of a surrender for registration of transfer, duly endorsed or accompanied by a written instrument of transfer duly executed by the registered holder of such Note or its attorney duly authorized in writing and accompanied by the address for notices of each transferee of such Note or part thereof), within 10 Business Days thereafter, the Company shall execute and deliver, at the Company’s expense (except as provided below), one or more new Notes (as requested by the holder thereof) in exchange therefor, in an aggregate principal amount equal to the unpaid principal amount of the surrendered Note.  Each such new Note shall be payable to such Person as such holder may request and shall be substantially in the form of Exhibit 1.  Each such new Note shall be dated and bear interest from the date to which interest shall have been paid on the surrendered Note or dated the date of the surrendered Note if no interest shall have been paid thereon.  The Company may require payment of a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such transfer of Notes.  Notes shall not be transferred in denominations of less than $100,000, provided that if necessary to enable the registration of transfer by a holder of its entire holding of Notes, one Note may be in a denomination of less than $100,000.  Any transferee, by its acceptance of a Note registered in its name (or the name of its nominee), shall be deemed to have made the representation set forth in Section 6.2.
 
Section 13.3.       Replacement of Notes.  Upon receipt by the Company of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Note (which evidence shall be, in the case of an Institutional Investor, notice from such Institutional Investor of such ownership and such loss, theft, destruction or mutilation), and
 
(a)         in the case of loss, theft or destruction, of indemnity reasonably satisfactory to it (provided that if the holder of such Note is, or is a nominee for, an original Purchaser or another holder of a Note with a minimum net worth of at least $50,000,000, such Person’s own unsecured agreement of indemnity shall be deemed to be satisfactory), or
 
(b)         in the case of mutilation, upon surrender and cancellation thereof,
 
within 10 Business Days thereafter, the Company at its own expense shall execute and deliver, in lieu thereof, a new Note, dated and bearing interest from the date to which interest shall have been paid on such lost, stolen, destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or mutilated Note if no interest shall have been paid thereon.
 
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Section 14.
Payments on Notes.
 
Section 14.1.        Place of Payment.  Subject to Section 14.2, payments of principal, Make-Whole Amount, if any, and interest becoming due and payable on the Notes shall be made in New York, New York at the principal office of U.S. Bank Trust Company, National Association in such jurisdiction.  The Company may at any time, by notice to each holder of a Note, change the place of payment of the Notes so long as such place of payment shall be either the principal office of the Company in such jurisdiction or the principal office of a bank or trust company in such jurisdiction.
 
Section 14.2.       Home Office Payment.  So long as any Purchaser of the Notes or its nominee shall be the holder of any Note, and notwithstanding anything contained in Section 14.1 or in such Note to the contrary, the Company will pay all sums becoming due on such Note for principal, Make-Whole Amount, if any, and interest by the method and at the address specified for such purpose below such Purchaser’s name in Schedule A with respect to the Notes, or by such other method or at such other address as such Purchaser shall have from time to time specified to the Company in writing for such purpose, without the presentation or surrender of such Note or the making of any notation thereon, except that upon written request of the Company made concurrently with or reasonably promptly after payment or prepayment in full of any Note, such Purchaser shall surrender such Note for cancellation, reasonably promptly after any such request, to the Company at its principal executive office or at the place of payment most recently designated by the Company pursuant to Section 14.1.  Prior to any sale or other disposition of any Note held by any Purchaser or its nominee such Purchaser will, at its election, either endorse thereon the amount of principal paid thereon and the last date to which interest has been paid thereon or surrender such Note to the Company in exchange for a new Note or Notes pursuant to Section 13.2.  The Company will afford the benefits of this Section 14.2 to any Institutional Investor that is the direct or indirect transferee of any Note purchased by any Purchaser under this Agreement and that has made the same agreement relating to such Note as such Purchaser has made in this Section 14.2.
 
Section 14.3.       FATCA Information.  By acceptance of any Note, the holder of such Note agrees that such holder will with reasonable promptness duly complete and deliver to the Company, or to such other Person as may be reasonably requested by the Company, from time to time (a) in the case of any such holder that is a United States Person, such holder’s United States tax identification number or other forms reasonably requested by the Company necessary to establish such holder’s status as a United States Person under FATCA and as may otherwise be necessary for the Company to comply with its obligations under FATCA and (b) in the case of any such holder that is not a United States Person, such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation as may be necessary for the Company to comply with its obligations under FATCA and to determine that such holder has complied with such holder’s obligations under FATCA or to determine the amount (if any) to deduct and withhold from any such payment made to such holder.  Nothing in this Section 14.3 shall require any holder to provide information that is confidential or proprietary to such holder unless the Company is required to obtain such information under FATCA and, in such event, the Company shall treat any such information it receives as confidential.
 
Section 15.
Expenses, Etc.
 
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Section 15.1.        Transaction Expenses.  Whether or not the transactions contemplated hereby are consummated, the Company will pay the reasonable out-of-pocket costs and expenses incurred in connection with the initial filing of this Agreement and all related documents and financial information, and all subsequent annual and interim filings of documents and financial information related thereto, with the SVO, (which costs and expenses shall not exceed $5,000 without the prior written consent of the Company) and all out-of-pocket costs and expenses (including reasonable attorneys’ fees of a special counsel and, if reasonably required, local or other counsel) incurred by the Purchasers or any other holder of a Note in connection with the transactions contemplated hereby and in connection with any amendments, waivers or consents under or in respect of this Agreement, the Notes or the Guaranty Agreement (whether or not such amendment, waiver or consent becomes effective), including, without limitation: (a) the out-of-pocket costs and expenses incurred in enforcing or defending (or determining whether or how to enforce or defend) any rights under this Agreement, the Notes or the Guaranty Agreement or in responding to any subpoena or other legal process or informal investigative demand issued in connection with this Agreement, the Notes or the Guaranty Agreement, or by reason of being a holder of any Note and (b) the out-of-pocket costs and expenses, including financial advisors’ fees, incurred in connection with the insolvency or bankruptcy of the Company or any Subsidiary or in connection with any work-out or restructuring of the transactions contemplated hereby, by the Notes and by the Guaranty Agreement.  If required by the NAIC, the Company shall obtain and maintain at its own cost and expense a Legal Entity Identifier (LEI).
 
The Company will pay, and will save the Purchasers and each other holder of a Note harmless from, (i) all claims in respect of any fees, costs or expenses, if any, of brokers and finders (other than those retained by such Person), (ii) any and all wire transfer fees that any bank or other financial institution deducts from any payment under such Note to such holder or otherwise charges to a holder of a Note with respect to a payment under such Note and (iii) any judgment, liability, claim, order, decree, fine, penalty, cost, fee, expense (including reasonable attorneys’ fees and expenses) or obligation resulting from the consummation of the transactions contemplated hereby, including the use of the proceeds of the Notes by the Company.
 
Section 15.2.        Certain Taxes.  The Company agrees to pay all stamp, documentary or similar taxes or fees which may be payable in respect of the execution and delivery or the enforcement of this Agreement or any Guaranty Agreement or the execution and delivery (but not the transfer) or the enforcement of any of the Notes in the United States or any other jurisdiction where the Company or any Guarantor has assets or of any amendment of, or waiver or consent under or with respect to, this Agreement or of any of the Notes, and to pay any value added tax due and payable in respect of reimbursement of costs and expenses by the Company pursuant to this Section 15, and will save each holder of a Note to the extent permitted by applicable law harmless against any loss or liability resulting from nonpayment or delay in payment of any such tax or fee required to be paid by the Company hereunder.
 
Section 15.3.       Survival.  The obligations of the Company under this Section 15 will survive the payment or transfer of any Note, the enforcement, amendment or waiver of any provision of this Agreement, the Notes or the Guaranty Agreement, and the termination of this Agreement or the Guaranty Agreement.
 
Section 16.          Survival of Representations and Warranties; Entire Agreement.
 
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All representations and warranties contained herein shall survive the execution and delivery of this Agreement and the Notes, the purchase or transfer by any Purchaser of any Note or portion thereof or interest therein and the payment of any Note, and may be relied upon by any subsequent holder of a Note, regardless of any investigation made at any time by or on behalf of any Purchaser or any other holder of a Note.  All statements contained in any certificate or other instrument delivered by or on behalf of the Company pursuant to this Agreement shall be deemed representations and warranties of the Company under this Agreement.  Subject to the preceding sentence, this Agreement, the Guaranty Agreement and the Notes embody the entire agreement and understanding between the Purchasers and the Company and supersede all prior agreements and understandings relating to the subject matter hereof.
 
Section 17.
Amendment and Waiver.
 
Section 17.1.        Requirements.  This Agreement and the Notes may be amended, and the observance of any term hereof or of the Notes may be waived (either retroactively or prospectively), with (and only with) the written consent of the Company and the Required Holders, except that (a) no amendment or waiver of any of the provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term (as it is used therein), will be effective as to any Purchaser or holder of a Note unless consented to by such Purchaser or holder in writing and (b) no such amendment or waiver may, without the written consent of each Purchaser and the holder of each Note at the time outstanding affected thereby, (1) subject to the provisions of Section 12 relating to acceleration or rescission, change the amount or time of any prepayment or payment of principal of, or reduce the rate or change the time of payment or method of computation of interest or of the Make-Whole Amount on, the Notes, (2) change the percentage of the principal amount of the Notes the holders of which are required to consent to any such amendment or waiver or the principal amount of the Notes that the Purchasers are to purchase pursuant to Section 2 upon satisfaction of the conditions to Closing that appear in Section 4 or (3) amend any of Sections 8, 11(a), 11(b), 12, 17 or 20.
 
Section 17.2.        Solicitation of Purchasers and Holders of Notes.
 
(a)         Solicitation.  The Company will provide each Purchaser and each holder of the Notes (irrespective of the amount of Notes then owned by it) with sufficient information, sufficiently far in advance of the date a decision is required, to enable such Purchaser and such holder to make an informed and considered decision with respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof or of the Notes or the Guaranty Agreement.  The Company will deliver executed or true and correct copies of each amendment, waiver or consent effected pursuant to the provisions of this Section 17 or the Guaranty Agreement to each holder of outstanding Notes promptly following the date on which it is executed and delivered by, or receives the consent or approval of, the requisite Purchasers or holders of Notes.
 
(b)         Payment.  The Company will not, directly or indirectly, pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant any security or provide any other credit support, to any holder of Notes as consideration for or as an inducement to the entering into by such holder of any waiver or amendment of any of the terms and provisions hereof or of the Guaranty Agreement unless such remuneration is concurrently paid, or security is concurrently granted or other credit support concurrently provided, on the same terms, ratably to each holder of Notes then outstanding even if such holder did not consent to such waiver or amendment.
 
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(c)          Consent in Contemplation of Transfer.  Any consent made pursuant to this Section 17 or the Guaranty Agreement by a holder of a Note that has transferred a portion or has agreed to transfer all or a portion of its Notes to (i) the Company, (ii) any Subsidiary or any other Affiliate or (iii) any other Person in connection with, or in anticipation of, such other Person acquiring, making a tender offer for or merging with the Company and/or any of its Affiliates and, in each case, has provided or has agreed to provide such written consent as a condition to such transfer shall be void and of no force and effect except solely as to such holder, and any amendments effected or waivers granted or to be effected or granted that would not have been or be so effected or granted but for such consent (and the consents of all other holders of Notes that were acquired under the same or similar conditions) shall be void and of no force or effect except solely as to such holder.
 
Section 17.3.        Binding Effect, Etc.  Any amendment or waiver consented to as provided in this Section 17 or the Guaranty Agreement applies equally to all Purchasers and holders of Notes and is binding upon them and upon each future holder of any Note and upon the Company without regard to whether such Note has been marked to indicate such amendment or waiver.  No such amendment or waiver will extend to or affect any obligation, covenant, agreement, Default or Event of Default not expressly amended or waived or impair any right consequent thereon.  No course of dealing between the Company and any Purchaser or holder of any Note nor any delay in exercising any rights hereunder or under any Note or the Guaranty Agreement shall operate as a waiver of any rights of any Purchaser or holder of such Note.  As used herein, the term “this Agreement” and references thereto shall mean this Agreement as it may from time to time be amended or supplemented.
 
Section 17.4.       Notes Held by Company, Etc.  Solely for the purpose of determining whether the holders of the requisite percentage of the aggregate principal amount of Notes then outstanding approved or consented to any amendment, waiver or consent to be given under this Agreement, the Guaranty Agreement or the Notes, or have directed the taking of any action provided herein or in the Guaranty Agreement or the Notes to be taken upon the direction of the holders of a specified percentage of the aggregate principal amount of Notes then outstanding, Notes directly or indirectly owned by the Company or any of its Affiliates shall be deemed not to be outstanding.
 
Section 18.
Notices.
 
Except to the extent otherwise provided in Section 7 with respect to Electronic Delivery, all notices and communications provided for hereunder shall be in writing and sent (a) by telefacsimile if the sender on the same day sends a confirming copy of such notice by a recognized overnight delivery service (charges prepaid), (b) by registered or certified mail with return receipt requested (postage prepaid) or (c) by a recognized overnight delivery service (charges prepaid).  Any such notice must be sent:
 
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(1)          if to any Purchaser or its nominee, to such Purchaser or its nominee at the address specified for such communications in Schedule A, or at such other address as such Purchaser or its nominee shall have specified to the Company in writing,
 
(2)          if to any other holder of any Note, to such holder at such address as such other holder shall have specified to the Company in writing, or
 
(3)          if to the Company, to the Company at its address set forth at the beginning hereof to the attention of the Chief Financial Officer of the Company, or at such other address as the Company shall have specified to the holder of each Note in writing.
 
Notices under this Section 18 will be deemed given only when actually received.
 
Section 19.
Reproduction of Documents.
 
This Agreement and all documents relating hereto, including, without limitation, (a) consents, waivers and modifications that may hereafter be executed, (b) documents received by the Purchasers on the Execution Date or the holders of Notes at the Closing (except the Notes themselves) and (c) financial statements, certificates and other information previously or hereafter furnished to any Purchaser or holder of the Notes, may be reproduced by such Purchaser or such holder by any photographic, photostatic, microfilm, microcard, miniature photographic or other similar process and such Purchaser or such holder may destroy any original document so reproduced.  The Company agrees and stipulates that, to the extent permitted by applicable law, any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made by any Purchaser or holder of the Notes in the regular course of business) and any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.  This Section 19 shall not prohibit the Company or any other Purchaser or holder of a Note from contesting any such reproduction to the same extent that it could contest the original, or from introducing evidence to demonstrate the inaccuracy of any such reproduction.
 
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Section 20.
Confidential Information.
 
For the purposes of this Section 20, “Confidential Information” shall mean information delivered to any Purchaser by or on behalf of the Company or any Subsidiary in connection with the transactions contemplated by or otherwise pursuant to this Agreement that is proprietary in nature and that was clearly marked or labeled or otherwise adequately identified when received by such Purchaser as being confidential information of the Company or such Subsidiary, provided that such term does not include information that (a) was publicly known or otherwise known to such Purchaser prior to the time of such disclosure (provided, however, that to such Purchaser’s actual knowledge, the source of such information was not, at the time of disclosure to such Purchaser, bound by a confidentiality agreement with the Company or its Subsidiaries relating to such information), (b) subsequently becomes publicly known through no act or omission by such Purchaser or any Person acting on such Purchaser’s behalf, (c) otherwise becomes known to such Purchaser other than through disclosure by the Company or any Subsidiary (provided, however, that to such Purchaser’s actual knowledge, the source of such information was not, at the time of disclosure to such Purchaser, bound by a confidentiality agreement with the Company or its Subsidiaries relating to such information) or (d) constitutes financial statements delivered to such Purchaser under Section 7.1 that are otherwise publicly available.  Each Purchaser will maintain the confidentiality of such Confidential Information in accordance with procedures adopted by such Purchaser in good faith to protect confidential information of third parties delivered to such Purchaser, provided that such Purchaser may deliver or disclose Confidential Information to (1) its directors, officers, trustees, employees, agents, attorneys and affiliates (to the extent such disclosure reasonably relates to the administration of the investment represented by its Notes and such individuals are bound by the terms of this Section 20 or agree to hold confidential the Confidential Information substantially in accordance with the terms of this Section 20), (2) its auditors, financial advisors and other professional advisors who agree to hold confidential the Confidential Information substantially in accordance with the terms of this Section 20, (3) any other holder of any Note, (4) any Institutional Investor to which such Purchaser sells or offers to sell such Note or any part thereof or any participation therein (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 20), (5) any Person from which such Purchaser offers to purchase any security of the Company (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 20), (6) any Federal or state regulatory authority having jurisdiction over such Purchaser, (7) the NAIC or the SVO or, in each case, any similar organization, or any nationally recognized rating agency that requires access to information about such Purchaser’s investment portfolio or (8) any other Person to which such delivery or disclosure may be necessary or appropriate (i) to effect compliance with any law, rule, regulation or order applicable to such Purchaser, (ii) in response to any subpoena or other legal process, (iii) in connection with any litigation to which such Purchaser is a party or (iv) if an Event of Default has occurred and is continuing, to the extent such Purchaser may reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of the rights and remedies under such Purchaser’s Notes, this Agreement or the Guaranty Agreement (provided with respect to subclauses (i) (except where required disclosure of the purchase of the Notes is to be made to any supervisory or regulatory body during the normal course of its exercise of its regulatory or supervisory function over such Purchaser and consistent with such Purchaser’s usual practice), (ii) and (iii) that, to the extent not prohibited by applicable law, rule, regulation or order, such Purchaser shall use commercially reasonable efforts to notify the Company of such pending disclosure so that the Company may seek a protective order or to pursue such further legal action as may be necessary to preserve the privileged nature and confidentiality of the Confidential Information).  Each holder of a Note, by its acceptance of a Note, will be deemed to have agreed to be bound by and to be entitled to the benefits of this Section 20 as though it were a party to this Agreement.  On reasonable request by the Company in connection with the delivery to any holder of a Note of information required to be delivered to such holder under this Agreement or requested by such holder (other than a holder that is a party to this Agreement or its nominee), such holder will enter into an agreement with the Company embodying the provisions of this Section 20.
 
In the event that as a condition to receiving access to information relating to the Company or its Subsidiaries in connection with the transactions contemplated by or otherwise pursuant to this Agreement, any Purchaser or holder of a Note is required to agree to a confidentiality undertaking (whether through IntraLinks, another secure website, a secure virtual workspace or otherwise) which is different from this Section 20, this Section 20 shall not be amended thereby and, as between such Purchaser or such holder and the Company, this Section 20 shall supersede any such other confidentiality undertaking.
 
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Section 21.
Substitution of Purchaser.
 
Each Purchaser shall have the right to substitute any one of its Affiliates as the purchaser of the Notes that such Purchaser has agreed to purchase hereunder, by written notice to the Company, which notice shall be signed by both such Purchaser and such Affiliate, shall contain such Affiliate’s agreement to be bound by this Agreement and shall contain a confirmation by such Affiliate of the accuracy with respect to it of the representations set forth in Section 6.  Upon receipt of such notice, wherever the word “Purchaser” is used in this Agreement (other than in this Section 21), such word shall be deemed to refer to such Affiliate in lieu of such Purchaser with respect to the Notes so purchased by such Affiliate.  In the event that such Affiliate is so substituted as a purchaser hereunder and such Affiliate thereafter transfers to such Purchaser all of the Notes then held by such Affiliate, upon receipt by the Company of notice of such transfer, wherever the word “Purchaser” is used in this Agreement (other than in this Section 21), such word shall no longer be deemed to refer to such Affiliate, but shall refer to such Purchaser, and such Purchaser shall have all the rights of an original holder of the Notes under this Agreement.
 
Section 22.          Miscellaneous.
 
Section 22.1.          Successors and Assigns.  All covenants and other agreements contained in this Agreement by or on behalf of any of the parties hereto bind and inure to the benefit of their respective successors and assigns (including, without limitation, any subsequent holder of a Note) whether so expressed or not, except that, subject to Section 10.7, the Company may not assign or otherwise transfer any of its rights or obligations hereunder or under the Notes without the prior written consent of each holder.  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto and their respective successors and assigns permitted hereby) any legal or equitable right, remedy or claim under or by reason of this Agreement.
 
Section 22.2.          Submission to Jurisdiction; Waiver of Jury Trial.  (a) The Company hereby irrevocably submits to the non-exclusive jurisdiction of any State of New York court or any Federal court located in New York County, New York, New York for the adjudication of any matter arising out of or relating to this Agreement, and consents to the service of all writs, process and summonses by registered or certified priority or express mail out of any such court or by service of process on the Company at its address to which notices are to be given pursuant to Section 18 hereof and hereby waives any requirement to have an agent for service of process in the State of New York.  Nothing contained herein shall affect the right of any holder of the Notes to serve legal process in any other manner or to bring any proceeding hereunder in any jurisdiction where the Company may be amenable to suit.  The Company hereby irrevocably waives any objection to any suit, action or proceeding in any New York court or Federal court located in New York County, New York, New York on the grounds of venue and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.
 
- 45 -
(b)          THE PARTIES HERETO HEREBY WAIVE TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH RESPECT TO THIS AGREEMENT, THE NOTES OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH OR THEREWITH.
 
Section 22.3.      Payments Due on Non-Business Days.  Anything in this Agreement or the Notes to the contrary notwithstanding (but without limiting the requirement in Section 8.4 that the notice of any prepayment specify a Business Day as the date fixed for such prepayment), any payment of principal of or Make-Whole Amount, if any, or interest on any Note that is due on a date other than a Business Day shall be made on the next succeeding Business Day without including the additional days elapsed in the computation of the interest payable on such next succeeding Business Day; provided that if the maturity date of any Note is a date other than a Business Day, the payment otherwise due on such maturity date shall be made on the next succeeding Business Day and shall include the additional days elapsed in the computation of interest payable on such next succeeding Business Day.
 
Section 22.4.       Accounting Terms.  All accounting terms used herein which are not expressly defined in this Agreement have the meanings respectively given to them in accordance with GAAP.  Except as otherwise specifically provided herein, (i) all computations made pursuant to this Agreement shall be made in accordance with GAAP, and (ii) all financial statements shall be prepared in accordance with GAAP.  Notwithstanding the foregoing, (a) if at any time any change in GAAP or in the application of GAAP would affect the computation of any financial ratio or requirement set forth in this Agreement, and either the Company or the Required Holders shall so request, the holders of Notes and the Company shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Holders); provided that, until so amended, such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change in GAAP shall have become effective, (b) each financial ratio or requirement set forth in this Agreement shall be computed (i) to exclude any change to lease accounting rules from those in effect pursuant to Accounting Standards Codification 840 (Leases) and other related lease accounting guidance as in effect on February 16, 2018 and (ii) using the methodology for the recognition of investment tax credits for solar generation projects used by the Company in the fiscal year ending September 30, 2019 and (c) the Company shall provide to the holders of Notes, concurrently with the delivery of the financial statements required under this Agreement and as reasonably requested by any holder of Notes hereunder, a reconciliation between the calculation of any such financial ratio or requirement made before and after giving effect to such changes in GAAP or the application thereof described in the foregoing clauses (a) and (b).  For purposes of determining compliance with this Agreement (including, without limitation, Section 9, Section 10 and the definition of “Debt”), any election by the Company to measure any financial liability using fair value (as permitted by Financial Accounting Standards Board Accounting Standards Codification Topic No. 825-10-25 – Fair Value Option, International Accounting Standard 39 – Financial Instruments: Recognition and Measurement or any similar accounting standard) shall be disregarded and such determination shall be made as if such election had not been made.
 
Section 22.5.       Severability.  Any provision of this Agreement 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 any such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by law) not invalidate or render unenforceable such provision in any other jurisdiction.
 
- 46 -
Section 22.6.      Construction.  Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant.  Where any provision herein refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person.
 
For the avoidance of doubt, all Schedules and Exhibits attached to this Agreement shall be deemed to be a part hereof.
 
Section 22.7.       Counterparts; Electronic Contracting.  This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument.  Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto.  The parties agree to electronic contracting and signatures with respect to this Agreement, the Guaranty Agreement and any other agreement and instrument hereunder (other than the Notes).  Delivery of an electronic signature to, or a signed copy of, this Agreement, the Guaranty Agreement and any other agreement or instrument delivered hereunder (other than the Notes) by facsimile, email or other electronic transmission shall be fully binding on the parties to the same extent as the delivery of the signed originals and shall be admissible into evidence for all purposes.  Notwithstanding the foregoing, if any Purchaser shall request manually signed counterpart signatures to any agreement or instrument hereunder, the Company hereby agrees to use its reasonable endeavors to provide such manually signed signature pages as soon as reasonably practicable.
 
Section 22.8.        Governing Law.  This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would require the application of the laws of a jurisdiction other than such State.
 
(Remainder of Page Left Intentionally Blank)
 
- 47 -
The execution hereof by the Purchasers shall constitute a contract between the Company and the Purchasers for the uses and purposes and on the terms hereinabove set forth.
 
 
Very truly yours,
     
 
New Jersey Resources Corporation
     
 
By:
 /s/
Daniel Sergott
 
Name:
Daniel Sergott
 
Title:
Treasurer

[Signature Page to Note Purchase Agreement]

The foregoing is hereby agreed
to as of the date hereof.
    
     
 
Brighthouse Life Insurance Company Chesapeake Employers’ Insurance Company Metropolitan Life Insurance Company, on behalf of Metropolitan Life Insurance Company Separate Account 894 Allianz Life Insurance Company of North America
     
 
By: Voya Investment Management Co. LLC, as Agent
     
     
 
By:
 /s/
Joshua A. Winchester
 
Name:
Joshua A. Winchester
 
Title:
Senior Vice President
     
 
Voya Private Credit Trust Fund-Goldman Sachs
 
Voya Private Credit Trust Fund
     
 
By: Voya Investment Trust Co., as Trustee
     
 
By:
 /s/
Joshua A. Winchester
 
Name:
Joshua A. Winchester
 
Title:
Senior Vice President

[Signature Page to Note Purchase Agreement]

The foregoing is hereby agreed
    
to as of the date hereof.
    
     
 
CoBank, ACB
     
 
By:
 /s/
 Matthew Leatherman
 
Name:
Matthew Leatherman
 
Title:
Executive Director

[Signature Page to Note Purchase Agreement]

The foregoing is hereby agreed
    
to as of the date hereof.
    
     
 
Enact Mortgage Insurance Corporation
     
 
By:
 /s/
Wm. Stuart Shepetin
 
Name:
Wm. Stuart Shepetin
 
Title:
Investment Officer

[Signature Page to Note Purchase Agreement]

The foregoing is hereby agreed
    
to as of the date hereof.
    
     
 
CSAA Insurance Exchange
     
 
By: Nuveen Alternatives Advisors LLC, a Delaware limited liability company, its investment manager
     
 
By:
 /s/
Matthew W. Smith
 
Name:
Matthew W. Smith
 
Title:
Senior Director

 
Independent Life Insurance Company
     
 
By: Nuveen Alternatives Advisors LLC, a Delaware limited liability company, its investment manager
     
 
By:
 /s/
Mattew W. Smith
 
Name:
Matthew W. Smith
 
Title:
Senior Director

[Signature Page to Note Purchase Agreement]

The foregoing is hereby agreed
    
to as of the date hereof.
    
     
 
Southern Farm Bureau Life Insurance Company
     
 
By:
 /s/
Bradley Blakney
 
Name:
Bradley Blakney
 
Title:
Portfolio Manager

[Signature Page to Note Purchase Agreement]

Information Relating to Purchasers
 
Name and Address of Purchaser
Principal
Amount of Notes to be Purchased

Allianz Life Insurance Company of North America
5780 Powers Ferry Road NW, Suite 300
Atlanta, GA 30327
$7,000,000

(1)
All payments on account of the Note held by such purchaser shall be made by wire transfer of immediately available funds for credit to:

Wire instructions redacted and provided to the Company under separate cover.

(2)
Address for all communications and notices:

Allianz Life Insurance Company of North America
Voya Investment Management Co. LLC
5780 Powers Ferry Road NW, Suite 300
Atlanta, GA 30327-4347
Attn: Private Placements
Fax: (770) 690-5342
Email: Private.Placements@voya.com and Mark.Guffin@voya.com

(3)
Address for physical delivery of the Note:

Delivery instructions redacted and provided to Company under separate cover.

(4)
Nominee: MAC & CO., LLC

(5)
U.S. Tax Identification Number: Redacted and provided to Company under separate cover.

Schedule A
(to Note Purchase Agreement)

 
Name and Address of Purchaser
Principal
Amount of Notes to be Purchased
 
Brighthouse Life Insurance Company
5780 Powers Ferry Road NW, Suite 300
Atlanta, GA 30327
$5,000,000

(1)
All payments on account of the Note held by such purchaser shall be made by wire transfer of immediately available funds for credit to:

Wire instructions redacted and provided to the Company under separate cover.

(2)
Address for all notices relating to payments and audit confirmations:

BNYM Mellon Asset Servicing
11486 Corporate Blvd., Suite 200
Orlando, FL 32817-8371
Attn: Operations/Settlements
Email: VoyaIMPCOperations@voya.com

(3)
Address for all other communications and notices:

Voya Investment Management Co. LLC
5780 Powers Ferry Road NW, Suite 300
Atlanta, GA 30327-4347
Attn: Private Placements
Fax: (770) 690-5342
Email: Private.Placements@voya.com and Mark.Guffin@voya.com

(4)
Address for physical delivery of the Note:

Delivery instructions redacted and provided to Company under separate cover.

(5)
Nominee: None

(6)
U.S. Tax Identification Number: Redacted and provided to Company under separate cover.

A-2
 
Name and Address of Purchaser
Principal
Amount of Notes to be Purchased
 
Voya Investment Trust Co., as Trustee for the Voya Private Credit Trust Fund – Goldman            Sachs
5780 Powers Ferry Road NW, Suite 300
Atlanta, GA 30327
$3,000,000

(1)
All payments on account of the Note held by such purchaser shall be made by wire transfer of immediately available funds for credit to:

Wire instructions redacted and provided to the Company under separate cover.

(2)
Address for all notices relating to payments and audit confirmations:

BNYM Mellon Asset Servicing
11486 Corporate Blvd., Suite 200
Orlando, FL 32817-8371
Attn: Operations/Settlements
Email: VoyaIMPCOperations@voya.com

(3)
Address for all other communications and notices:

Voya Investment Trust Co.
5780 Powers Ferry Road NW, Suite 300
Atlanta, GA 30327-4347
Attn: Private Placements
Fax: (770) 690-5342
Email: Private.Placements@voya.com and Mark.Guffin@voya.com

(4)
Address for physical delivery of the Note:

Delivery instructions redacted and provided to Company under separate cover.

(5)
Nominee: None

(6)
U.S. Tax Identification Number: Redacted and provided to Company under separate cover.

A-3
Name and Address of Purchaser
Principal
Amount of Notes to be Purchased
Voya Investment Trust Co., as Trustee for the Voya Private Credit Trust Fund
5780 Powers Ferry Road NW, Suite 300
Atlanta, GA 30327
$4,000,000

(1)
All payments on account of the Note held by such purchaser shall be made by wire transfer of immediately available funds for credit to:

Wire instructions redacted and provided to the Company under separate cover.

(2)
Address for all notices relating to payments and audit confirmations:

BNYM Mellon Asset Servicing
11486 Corporate Blvd., Suite 200
Orlando, FL 32817-8371
Attn: Operations/Settlements
Email: VoyaIMPCOperations@voya.com

(3)
Address for all other communications and notices:

Voya Investment Trust Co.
5780 Powers Ferry Road NW, Suite 300
Atlanta, GA 30327-4347
Attn: Private Placements
Fax: (770) 690-5342
Email: Private.Placements@voya.com and Mark.Guffin@voya.com

(4)
Address for physical delivery of the Note:

Delivery instructions redacted and provided to Company under separate cover.

(5)
Nominee: None

(6)
U.S. Tax Identification Number: Redacted and provided to Company under separate cover.

A-4
 
Name and Address of Purchaser
Principal
Amount of Notes to be Purchased
 
Chesapeake Employers’ Insurance Company
5780 Powers Ferry Road NW, Suite 300
Atlanta, GA 30327
$1,000,000

(1)
All payments on account of the Note held by such purchaser shall be made by wire transfer of immediately available funds for credit to:

Wire instructions redacted and provided to the Company under separate cover.

(2)
Address for all notices relating to payments and audit confirmations:

BNYM Mellon Asset Servicing
11486 Corporate Blvd., Suite 200
Orlando, FL 32817-8371
Attn: Operations/Settlements
Email: VoyaIMPCOperations@voya.com

(3)
Address for all other communications and notices:

Voya Investment Management Co. LLC
5780 Powers Ferry Road NW, Suite 300
Atlanta, GA 30327-4347
Attn: Private Placements
Fax: (770) 690-5342
Email: Private.Placements@voya.com and Mark.Guffin@voya.com

(4)
Address for physical delivery of the Note:

Delivery instructions redacted and provided to Company under separate cover.

(5)
Nominee: CUDD & CO. LLC

(6)
U.S. Tax Identification Number: Redacted and provided to Company under separate cover.

A-5
 
Name and Address of Purchaser
Principal
Amount of Notes to be Purchased
 
Metropolitan Life Insurance Company Separate Account 894
5780 Powers Ferry Road NW, Suite 300
Atlanta, GA 30327
$1,000,000

(1)
All payments on account of the Note held by such purchaser shall be made by wire transfer of immediately available funds for credit to:

Wire instructions redacted and provided to the Company under separate cover.

(2)
Address for all notices relating to payments and audit confirmations:

BNYM Mellon Asset Servicing
11486 Corporate Blvd., Suite 200
Orlando, FL 32817-8371
Attn: Operations/Settlements
Email: VoyaIMPCOperations@voya.com

(3)
Address for all other communications and notices:

Voya Investment Management Co. LLC
5780 Powers Ferry Road NW, Suite 300
Atlanta, GA 30327-4347
Attn: Private Placements
Fax: (770) 690-5342
Email: Private.Placements@voya.com and Mark.Guffin@voya.com

(4)
Address for physical delivery of the Note:

Delivery instructions redacted and provided to Company under separate cover.

(5)
Nominee: None

(6)
U.S. Tax Identification Number: Redacted and provided to Company under separate cover.

A-6
 
Name and Address of Purchaser
Principal
Amount of Notes to be Purchased
 
CoBank, ACB
6340 S. Fiddlers Green Circle
Greenwood Village, CO 80111
$15,000,000
 

(1)
All payments shall be made by wire transfer of immediately available funds to:

Wire instructions redacted and provided to the Company under separate cover.

(2)
Address for notices and communications related to operational matters (including repayments and funding):

Primary Contact:
Beth Johnson
6340 S. Fiddlers Green Circle
Greenwood Village, CO 80111
Telephone: (303) 740-4347

Secondary Contact:
Ron Cummings
6340 S. Fiddlers Green Circle
Greenwood Village, CO 80111
Telephone: (303) 740-6447

via email to: LOANADMINNOTICES@COBANK.COM

(3)
Address for notices and communications relating to compliance matters and financial statements:

Valerie Webster
6340 S. Fiddlers Green Circle
Greenwood Village, CO 80111
Telephone: (303) 740-4366
Email: vwebster@cobank.com and PEUcredit@cobank.com

(4)
Address for all other notices and communications:

Primary Contact:
Matthew Leatherman
6340 S. Fiddlers Green Circle
Greenwood Village, CO 80111
Telephone: (303) 694-5990
Email: mleatherman@cobank.com

A-7
Secondary Contact:
Valerie Webster
6340 S. Fiddlers Green Circle
Greenwood Village, CO 80111
Telephone: (303) 740-4366
Email: vwebster@cobank.com

(5)
Address for physical delivery of the Note:

Delivery instructions redacted and provided to Company under separate cover.

(6)
Nominee: None

(7)
U.S. Tax Identification Number: Redacted and provided to Company under separate cover.

A-8
Name and Address of Purchaser
Principal
Amount of Notes to be Purchased
Enact Mortgage Insurance Corporation
3001 Summer Street, 4th Floor
Stamford, CT 06905
$6,000,000

(1)
All payments on or in respect of the Notes shall be made by wire transfer of immediately available funds to:

Wire instructions redacted and provided to the Company under separate cover.

(2)
Address for notices with respect to corporate actions, including payments and prepayments and written confirmation of each such payment or prepayment, including interest payment and prepayment, redemptions, premiums, make wholes, and fees:

Genworth Financial, Inc.
Account: Enact Mortgage Insurance Corporation
3001 Summer Street
Stamford, CT 06905
Attn: Trade Operations
Telephone: (203) 708-3300
Fax: (203) 708-3308

With a copy by email to: GNWInvestmentsOperations@genworth.com

Additional copy (solely for notices with respect to payments and written confirmation of each payment) to:

The Bank of New York
Income Collection Department
P.O. Box 392002
Pittsburgh, PA 15251
Attn: Income Collection Department
Ref:       GEMIC / GEMIC / 142675 / PPN: 646025 F*2, 6.14% Senior Notes, Series
2022B, due December 15, 2032
P&I Contact: Jason Miller – (412) 234-1680
Fax: (804) 662-7777

And by email to: treasppbkoffice@genworth.com and
ppservicing@BNYmellon.com

(3)
Address for all other notices and communications:

Genworth Financial, Inc.
Account: Enact Mortgage Insurance Corporation
3001 Summer Street, 4th Floor
Stamford, CT 06905
Attn: Private Placements
Telephone: (203) 708-3300
Fax: (203) 708-3308

With a copy by email to: GNW.privateplacements@genworth.com

A-9
(4)
Address for physical delivery of the Notes:

Delivery instructions redacted and provided to Company under separate cover.

(5)
Nominee: HARE & CO., LLC

(6)
U.S. Tax Identification Number: Redacted and provided to Company under separate cover.

A-10

Name and Address of Purchaser
Principal
Amount of Notes to be Purchased
CSAA Insurance Exchange
3055 Oak Road
Walnut Creek, California 94597
$3,000,000

(1)
All payments on or in respect of the Note shall be made in immediately available funds on the due date by electronic funds transfer, through the Automated Clearing House System, to the account provided by separate cover to the Company

(2)
Address for all notices with respect payments and prepayments of the Note:

CSAA Insurance Exchange
c/o Nuveen Alternatives Advisors LLC
8500 Andrew Carnegie Boulevard
Charlotte, NC  28262
Attn: Private Placements
Telephone: (704) 988-4349 (Ho Young Lee)
Facsimile: (704) 988-4916
Email:
NuveenPrivatePlacements@nuveen.com
 
 hoyoung.lee@nuveen.com

With a copy to:

Northern Trust Company
Attn: Trade Securities Processing
333 South Wabash Avenue, 32nd Floor
Chicago, IL 60604

and

CSAA Insurance Exchange
3055 Oak Road
Walnut Creek, California 94597
Email: investments@csaa.com
Email: Investmentacctg@csaa.com

Contemporaneous written confirmation of any electronic funds transfer shall be sent to the above addresses setting forth (1) the full name, private placement number, interest rate and maturity date of the Notes, (2) allocation of payment between principal, interest, Make-Whole Amount, other premium or any special payment and (3) the name and address of the bank from which such electronic funds transfer was sent.

A-11
(3)
Address for all notices and communications, including notices with respect to payments and prepayments:

CSAA Insurance Exchange

c/o Nuveen Alternatives Advisors LLC
8500 Andrew Carnegie Boulevard
Charlotte, NC  28262
Attn: Private Placements
Telephone: (704) 988-4349 (Ho Young Lee)
Facsimile: (704) 988-4916
Email: NuveenPrivatePlacements@nuveen.com
 
 hoyoung.lee@nuveen.com

With a copy to:

Nuveen Alternatives Advisors LLC
8500 Andrew Carnegie Boulevard
Charlotte, NC 28262-8500
Attn: Legal Department
Attn: Trevor Sanford, Associate General Counsel
E-mail: trevor.sanford @nuveen.com
Telephone: (704) 988-4092
 
(212) 916-4000 (General Number)

(4)
All Servicer Reports (or the equivalent) shall be delivered electronically to:

Email: NuveenPrivatePlacements@nuveen.com
 
 DL_Valuations-PrivateABS@tiaa.org
 
(5)
Address for physical delivery of the Note:

Delivery instructions redacted and provided to Company under separate cover.

(6)
Nominee: None

(7)
U.S. Tax Identification Number: Redacted and provided to Company under separate cover.

A-12

Name and Address of Purchaser
Principal
Amount of Notes to be Purchased
Independent Life Insurance Company
135 W. Bay St., Suite 500
Jacksonville, Florida 32202
$2,000,000
(1)
All payments on or in respect of the Note shall be made in immediately available funds on the due date by electronic funds transfer, through the Automated Clearing House System, to the account provided by separate cover to the Company.

(2)
Address for all notices with respect payments and prepayments of the Note:

Independent Life Insurance Company
c/o Nuveen Alternatives Advisors LLC
8500 Andrew Carnegie Boulevard
Charlotte, NC  28262
Attn: Private Placements
Telephone: (704) 988-4349 (Ho Young Lee)
Facsimile: (704) 988-4916
Email: NuveenPrivatePlacements@nuveen.com
 
 hoyoung.lee@nuveen.com

With a copy to:

U.S. Bank
Attn: Physical Processing
1555 N. River Center Drive, Suite 302
Milwaukee, WI 53212

and

Independent Life Insurance Company
135 W. Bay St., Suite 500
Jacksonville, FL 32202
Attn: Donald J. Herrema & J. Todd Hagely
Email:
 dherrema@independent.life

thagely@independent.life

Contemporaneous written confirmation of any electronic funds transfer shall be sent to the above addresses setting forth (1) the full name, private placement number, interest rate and maturity date of the Notes, (2) allocation of payment between principal, interest, Make-Whole Amount, other premium or any special payment and (3) the name and address of the bank from which such electronic funds transfer was sent.

A-13
(3)
Address for all notices and communications, including notices with respect to payments and prepayments:

Independent Life Insurance Company
c/o Nuveen Alternatives Advisors LLC
8500 Andrew Carnegie Boulevard
Charlotte, NC  28262
Attn: Private Placements
Telephone: (704) 988-4349 (Ho Young Lee)
Facsimile: (704) 988-4916
Email: NuveenPrivatePlacements@nuveen.com
 
 hoyoung.lee@nuveen.com

With a copy to:

Nuveen Alternatives Advisors LLC
8500 Andrew Carnegie Boulevard
Charlotte, NC 28262-8500
Attn: Legal Department
Attn: Trevor Sanford, Associate General Counsel
E-mail: trevor.sanford @nuveen.com
Telephone: (704) 988-4092
 
 (212) 916-4000 (General Number)

(4)
All Servicer Reports (or the equivalent) shall be delivered electronically to:

Email: NuveenPrivatePlacements@nuveen.com
 
 DL_Valuations-PrivateABS@tiaa.org
  
(5)
Address for physical delivery of the Note:

Delivery instructions redacted and provided to Company under separate cover.

(6)
Nominee: None

(7)
U.S. Tax Identification Number: Redacted and provided to Company under separate cover.

A-14
Name and Address of Purchaser
Principal
Amount of Notes to be Purchased
Southern Farm Bureau Life Insurance Company
1401 Livingston Lane
Jackson, MS 39213
$3,000,000
 

(1)
All payments shall be made by wire transfer of immediately available funds to:

Wire instructions redacted and provided to the Company under separate cover.

(2)
Address for notices related to scheduled payments:

The Northern Trust Company
Attention: Income Collections
801 S. Canal St.
Chicago, IL 60607
ICPHYS@ntrs.com

Copy to: Inv_Acctg-pp@sfbli.com and SFBLICRecon@clearwateranalytics.com

(3)
Address for audit confirmation requests:

Alice.Agner@sfbli.com
PrivatePlacements@sfbli.com

(4)
Address for all other communications, including waivers, amendments, consents and financial information:

Attention: Securities Management
PrivatePlacements@sfbli.com

(5)
Address for physical delivery of the Note:

Delivery instructions redacted and provided to Company under separate cover.

(6)
Nominee: Ell & Co, F/B/O Southern Farm Bureau Life Insurance Company

(7)
U.S. Tax Identification Number: Redacted and provided to Company under separate cover.

A-15
Defined Terms
 
As used herein, the following terms have the respective meanings set forth below or set forth in the Section hereof following such term:
 
“Acceptable Rating Agency” shall mean (a) Fitch, Moody’s, S&P, DBRS/Morningstar or Kroll, or (b) any other credit rating agency that is recognized as a nationally recognized statistical rating organization by the SEC and approved by the Required Holders, so long as, in each case, any such credit rating agency described in clause (a) or (b) above continues to be a nationally recognized statistical rating organization recognized by the SEC and is approved as a “Credit Rating Provider” (or other similar designation) by the NAIC.
 
“Affiliate” shall mean, (a) at any time, and with respect to any Person, any other Person that at such time directly or indirectly through one or more intermediaries Controls, or is Controlled by, or is under common Control with, such first Person and (b) any Person beneficially owning or holding, directly or indirectly, 10% or more of any class of equity or Voting Stock of the Company or any Subsidiary or any Person of which the Company and its Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly, 10% or more of any class of equity or Voting Stock.  As used in this definition, “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of Voting Stock, by contract or otherwise.  Unless the context otherwise clearly requires, any reference to an “Affiliate” is a reference to an Affiliate of the Company.
 
“Agreement” shall mean this Note Purchase Agreement, including all Schedules and Exhibits attached to this Agreement, as it may be amended, restated, supplemented or otherwise modified from time to time.
 
“Anti-Corruption Laws” shall mean any law or regulation in a U.S. or any non-U.S. jurisdiction regarding bribery or any other corrupt activity, including, but not limited to the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act 2010.
 
“Anti-Money Laundering Laws” shall mean any law or regulation in a U.S. or any non-U.S. jurisdiction regarding money laundering, drug trafficking, terrorist-related activities or other money laundering predicate crimes, including but not limited to the Currency and Foreign Transactions Reporting Act of 1970 (otherwise known as the Bank Secrecy Act) and the USA PATRIOT Act.
 
“Asset Disposition” shall mean any Transfer except:
 
(a)         any
 
(1)         Transfer from a Restricted Subsidiary to the Company or a Wholly-Owned Restricted Subsidiary; and
 
(2)          Transfer from the Company to a Wholly-Owned Restricted Subsidiary;
 
Schedule B
(to Note Purchase Agreement)

so long as immediately before and immediately after the consummation of any such Transfer and after giving effect thereto, no Default or Event of Default shall exist (provided that, with respect to Sections 10.1 and 10.2, calculation of compliance therewith shall be made as of any date of determination hereof and not as of the end of the immediately preceding fiscal quarter of the Company); and
 
(b)          any Transfer made in the ordinary course of business and involving only property that is either (1) inventory held for sale or (2) equipment, fixtures, supplies or materials no longer required in the operation of the business of the Company or any of its Restricted Subsidiaries or that is obsolete.
 
“Bank Credit Agreement” shall mean (i) that certain Second Amended and Restated Credit Agreement by and among New Jersey Resources Corporation, each of the guarantors party thereto, with the several lenders party thereto, PNC Bank, National Association, as Administrative Agent, JPMorgan Chase Bank, N.A., Wells Fargo Bank, National Association and Mizuho Bank, Ltd., as Syndication Agents, and U.S. Bank National Association, Bank of America, N.A., TD Bank, N.A. and The Bank of Nova Scotia, as Documentation Agents. PNC Capital Markets LLC, JPMorgan Chase Bank, N.A., Wells Fargo Securities, LLC and Mizuho Bank, Ltd., as Joint Lead Arrangers, dated as of September 2, 2021, (ii) that certain Term Loan Credit Agreement by and among New Jersey Resources Corporation, each of the guarantors party thereto and PNC Bank National Association, as lender, dated as of February 8, 2022, or (iii) any other primary credit facility for the Company, in each case as the same may be amended, restated, increased, refinanced, replaced or otherwise modified or any successor thereto.
 
“Blocked Person” shall mean (i) a Person whose name appears on the list of Specially Designated Nationals and Blocked Persons published by OFAC, (ii) a Person, entity, organization, country or regime that is blocked or a target of sanctions that have been imposed under U.S. Economic Sanctions Laws or (iii) a Person that is an agent, department or instrumentality of, or is otherwise beneficially owned by, controlled by or acting on behalf of, directly or indirectly, any Person, entity, organization, country or regime described in clause (i) or (ii).
 
“Business Day” shall mean (a) for purposes of Section 8.6 only, any day other than a Saturday, a Sunday or a day on which commercial banks in New York, New York are required or authorized to be closed and (b) for the purposes of any other provision of this Agreement, any day other than a Saturday, a Sunday or a day on which commercial banks in Wall, New Jersey or New York, New York are required or authorized to be closed.
 
“Capital Lease” shall mean, at any time, a lease with respect to which the lessee is required concurrently to recognize the acquisition of an asset and the incurrence of a liability in accordance with GAAP.
 
“Closing” is defined in Section 3.
 
“Closing Date” is defined in Section 3.
 
“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and the rules and regulations promulgated thereunder from time to time.
 
B-2
“Company” shall mean New Jersey Resources Corporation, a New Jersey corporation, or any Successor Corporation.
 
“Confidential Information” is defined in Section 20.
 
“Consolidated Shareholders’ Equity” shall mean, as of any date of determination, the sum of the amounts under the headings “Common Shareholders’ Equity” and “Preferred Shareholders’ Equity” on the balance sheet, prepared in accordance with GAAP, for the Company, its Restricted Subsidiaries and New Jersey Natural Gas on a consolidated basis.
 
“Consolidated Tangible Assets” shall mean, as of any date of determination, the total assets of the Company, its Restricted Subsidiaries and New Jersey Natural Gas that would be shown as assets on a consolidated balance sheet of the Company, its Restricted Subsidiaries and New Jersey Natural Gas as of such time determined on a consolidated basis in accordance with GAAP after subtracting therefrom the aggregate amount of all intangible assets of the Company, its Restricted Subsidiaries and New Jersey Natural Gas, including, without limitation, all goodwill, franchises, licenses, patents, trademarks, trade name, copyrights, service marks and brand names.
 
“Consolidated Total Capitalization” shall mean, as of any date of determination, the sum of (a) Consolidated Total Debt and (b) Consolidated Shareholders’ Equity.
 
“Consolidated Total Debt” shall mean, as of any date of determination, without duplication, the total of all Debt of the Company, its Restricted Subsidiaries and New Jersey Natural Gas determined on a consolidated basis in accordance with GAAP.
 
For purposes of determining “Consolidated Total Debt,” there shall be excluded from any such determination Debt of Securitization Subsidiaries that are Restricted Subsidiaries (but not Debt of the Company, any other Restricted Subsidiary or New Jersey Natural Gas) incurred pursuant to Receivables Securitization Transactions in an amount for principal and accrued and unpaid interest not to exceed $100,000,000 in the aggregate.
 
“Control” is defined in the definition of “Affiliate”, “Controlling” and “Controlled” shall have the meanings correlative thereto.
 
“Controlled Entity” shall mean (i) any of the Subsidiaries of the Company and any of their or the Company’s respective Controlled Affiliates and (ii) if the Company has a parent company, such parent company and its Controlled Affiliates.
 
“DBRS/Morningstar” shall mean DBRS, Inc., or, if applicable, its successor.
 
B-3
“Debt” as to any Person at any time, shall mean, without duplication, any and all indebtedness, obligations or liabilities (whether matured or unmatured, liquidated or unliquidated, direct or indirect, absolute or contingent, or joint or several) of such Person for or in respect of: (a) borrowed money, (b) amounts raised under or liabilities in respect of any note purchase or acceptance credit facility, (c) reimbursement obligations (contingent or otherwise) under any letter of credit, currency swap agreement, interest rate swap, cap, collar or floor agreement or other interest rate or currency exchange rate management device, (d) any other transaction (including forward sale or purchase agreements, Capital Leases, Synthetic Leases and conditional sales agreements) having the commercial effect of a borrowing of money entered into by such Person to finance its operations or capital requirements (but not including trade payables and accrued expenses incurred in the ordinary course of business which are not represented by a promissory note or other evidence of indebtedness and which are not more than 30 days past due), (e) the net indebtedness, obligations and liabilities of such Person under any Hedging Contract to the extent constituting “indebtedness,” as determined in accordance with GAAP, adjusted downward dollar for dollar for any related margin collateral account balances maintained by such Person, (f) any Guaranty of any Hedging Contract described in the immediately preceding clause (e), (g) any Guaranty of Debt for borrowed money, (h) any Hybrid Security described in clause (a) of the definition of Hybrid Security or (i) the mandatory repayment obligation of the issuer of any Hybrid Security described in clause (b) of the definition of Hybrid Security.
 
“Debt Prepayment Application” shall mean, with respect to any Transfer of property, the application by the Company of cash in an amount equal to the Net Proceeds Amount with respect to such Transfer to pay Senior Debt of the Company (other than Senior Debt owing to any Subsidiary or Affiliate and Senior Debt in respect of any revolving credit or similar credit facility providing the Company with the right to obtain loans or other extensions of credit from time to time, except to the extent that in connection with such payment of Senior Debt the availability of credit under such credit facility is permanently reduced by an amount not less than the amount of such proceeds applied to the payment of such Senior Debt); provided that in the course of making such application the Company shall offer to prepay each outstanding Note in accordance with Section 8.7 in a principal amount that equals the Ratable Portion for such Note.
 
“Debt Rating” shall mean the debt rating of the Notes as determined from time to time by any Acceptable Rating Agency.
 
“Default” shall mean an event or condition the occurrence or existence of which would, with the lapse of time or the giving of notice or both, become an Event of Default.
 
“Default Rate” as of any date shall mean, with respect to the Notes, that rate of interest that is the greater of (a) 2.00% per annum over the rate of interest specified in the first paragraph of such Note, or (b) 2.00% per annum over the rate of interest publicly announced by U.S. Bank National Association in New York, New York as its “base” or “prime” rate.
 
“Disclosure Documents” is defined in Section 5.3.
 
“Disposition Value” shall mean, at any time, with respect to any property:
 
(a)        in the case of property that does not constitute Subsidiary Stock, the book value thereof, valued at the time of such disposition in good faith by the Company, and
 
(b)       in the case of property that constitutes Subsidiary Stock, an amount equal to that percentage of book value of the assets of the Subsidiary that issued such stock as is equal to the percentage that the book value of such Subsidiary Stock represents of the book value of all of the outstanding capital stock of such Subsidiary (assuming, in making such calculations, that all securities convertible into such capital stock are so converted and giving full effect to all transactions that would occur or be required in connection with such conversion) determined at the time of the disposition thereof, in good faith by the Company.
 
B-4
“Distribution” shall mean, in respect of any corporation, association or other business entity: (a) dividends or other distributions or payments on capital stock or other equity interests of such corporation, association or other business entity (except distributions in such stock or other equity interests); and (b) the redemption or acquisition of such stock or other equity interests (except when solely in exchange for such stock or other equity interests) unless made, contemporaneously, from the net proceeds of a sale of such stock or other equity interests.
 
“Electronic Delivery” is defined in Section 7.1(a).
 
“Environmental Laws” shall mean any and all Federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including but not limited to those related to Hazardous Materials.
 
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.
 
“ERISA Affiliate” shall mean any trade or business (whether or not incorporated) that is treated as a single employer together with the Company under Section 414 of the Code.
 
“Event of Default” is defined in Section 11.
 
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
 
“Execution Date” is defined in Section 3.
 
“Fair Market Value” shall mean, at any time and with respect to any property, the sale value of such property that would be realized in an arm’s-length sale at such time between an informed and willing buyer and an informed and willing seller (neither being under a compulsion to buy or sell).
 
“FATCA” shall mean (i) Sections 1471 through 1474 of the Code, as of the Execution Date (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), together with any current or future regulations or official interpretations thereof, (ii) any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the United States of America and any other jurisdiction, which (in either case) facilitates the implementation of the foregoing clause (i), and (iii) any agreements entered into pursuant to Section 1471(b)(1) of the Code.
 
“Fitch” shall mean Fitch, Inc. or, if applicable, its successor.
 
“GAAP” shall mean generally accepted accounting principles as in effect from time to time in the United States of America.
 
B-5
“Governmental Authority” shall mean
 
(c)          the government of
 
(1)        the United States of America or any State or other political subdivision thereof, or
 
(2)          any jurisdiction in which the Company or any Subsidiary conducts all or any part of its business, or which asserts jurisdiction over any properties of the Company or any Subsidiary, or
 
(d)      any entity exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, any such government.
 
“Governmental Official” shall mean any governmental official or employee, employee of any government-owned or government-controlled entity, political party, any official of a political party, candidate for political office, official of any public international organization or anyone else acting in an official capacity.
 
“Guarantor” is defined in Section 2.2.
 
“Guaranty” shall mean, with respect to any Person, any obligation (except the endorsement in the ordinary course of business of negotiable instruments for deposit or collection) of such Person guaranteeing or in effect guaranteeing any Debt, dividend or other obligation of any other Person in any manner, whether directly or indirectly, including, without limitation, obligations incurred through an agreement, contingent or otherwise, by such Person:
 
(a)          to purchase such Debt or obligation or any property constituting security therefor;
 
(b)          to advance or supply funds (1) for the purchase or payment of such Debt or obligation or (2) to maintain any working capital or other balance sheet condition or any income statement condition of any other Person or otherwise to advance or make available funds for the purchase or payment of such Debt or obligation;
 
(c)        to lease properties or to purchase properties or services primarily for the purpose of assuring the owner of such Debt or obligation of the ability of any other Person to make payment of the Debt or obligation; or
 
(d)        otherwise to assure the owner of such Debt or obligation against loss in respect thereof.
 
In any computation of the Debt or other liabilities of the obligor under any Guaranty, the Debt or other obligations that are the subject of such Guaranty shall be assumed to be direct obligations of such obligor.
 
“Guaranty Agreement” is defined in Section 2.2.
 
B-6
“Guaranty Supplement” is defined in Section 9.7(a).
 
“Hazardous Materials” shall mean any and all pollutants, toxic or hazardous wastes or any other substances that might pose a hazard to health or safety, the removal of which may be required or the generation, manufacture, refining, production, processing, treatment, storage, handling, transportation, transfer, use, disposal, release, discharge, spillage, seepage or filtration of which is or shall be restricted, prohibited or penalized by any applicable law (including, without limitation, asbestos, urea formaldehyde foam insulation and polychlorinated biphenyls, petroleum, petroleum products, lead based paint, radon gas or similar restricted, prohibited or penalized substances).
 
“Hedging Contract” shall mean any transaction entered into by the Company, any of its Restricted Subsidiaries or New Jersey Natural Gas with respect to hedging or trading of gas contracts or other commodity, hedging contracts of any kind, or any derivatives or other similar financial instruments of the Company, its Restricted Subsidiaries and New Jersey Natural Gas.
 
“holder” shall mean, with respect to any Note, the Person in whose name such Note is registered in the register maintained by the Company pursuant to Section 13.1, provided, however, that if such Person is a nominee, then for the purposes of Sections 7, 12, 17.2 and 18 and any related definitions in this Schedule B, “holder” shall mean the beneficial owner of such Note whose name and address appears in such register.
 
“Hybrid Security” shall mean any of the following: (a) beneficial interests issued by a trust which constitutes a Subsidiary of the Company or any Guarantor substantially all of the assets of which trust are unsecured Debt of the Company or any Guarantor or any Subsidiary of the Company or any Guarantor or proceeds thereof, and all payments of such Debt are required to be, and are, distributed to the holders of beneficial interests in such trust promptly after receipt by such trust or (b) any shares of capital stock or other equity interests that, other than solely at the option of the issuer thereof, by their terms (or by the terms of any security into which they are convertible or exchangeable) are, or upon the happening of an event or the passage of time would be, required to be redeemed or repurchased, in whole or in part, or have, or upon the happening of an event or the passage of time would have, a redemption or similar payment.
 
“Inactive Subsidiary” shall mean, at any time, any Subsidiary of any Person, which Subsidiary (a) does not conduct any business or have operations and (b) does not have total assets with a net book value, as of any date of determination, in excess of $100,000.
 
“INHAM Exemption” is defined in Section 6.2(e).
 
“Institutional Investor” shall mean (a) any original purchaser of a Note, (b) any holder of a Note holding (together with one or more of its affiliates) more than $2,000,000 of the aggregate principal amount of the Notes then outstanding, (c) any bank, trust company, savings and loan association or other financial institution, any pension plan, any investment company, any insurance company, any broker or dealer, or any other similar financial institution or entity, regardless of legal form and (d) any Related Fund of any holder of any Note.
 
B-7
“Investment” shall mean any investment, made in cash or by delivery of property, by any Person (a) in any other Person, whether by acquisition of stock, Debt or other obligation or security, or by loan, Guaranty, advance, capital contribution or otherwise or (b) in any property.
 
“Investor Presentation” is defined in Section 5.3.
 
“Kroll” shall mean Kroll Bond Rating Agency, LLC or, if applicable, its successor.
 
“Lien” shall mean, with respect to any Person, any mortgage, lien, pledge, charge, security interest or other encumbrance, or any interest or title of any vendor, lessor, lender or other secured party to or of such Person under any conditional sale or other title retention agreement or Capital Lease or Synthetic Lease, upon or with respect to any property or asset of such Person (including in the case of stock, stockholder agreements, voting trust agreements and all similar arrangements).
 
“Make-Whole Amount” is defined in Section 8.6.
 
“Material” shall mean material in relation to the business, operations, affairs, financial condition, assets or properties of the Company, its Restricted Subsidiaries and New Jersey Natural Gas, taken as a whole.
 
“Material Adverse Effect” shall mean a material adverse effect on (a) the business, operations, affairs, financial condition, assets or properties of the Company, its Restricted Subsidiaries and New Jersey Natural Gas, taken as a whole, or (b) the ability of the Company to perform its obligations under this Agreement and the Notes, or (c) the ability of any Guarantor which is a Significant Subsidiary described in clause (b) of the definition thereof to perform its obligations under the Guaranty Agreement or (d) the validity or enforceability of this Agreement, the Notes or the Guaranty Agreement.
 
“Moody’s” shall mean Moody’s Investor Service, Inc. or, if applicable, its successor.
 
“Multiemployer Plan” shall mean any Plan that is a “multiemployer plan” (as such term is defined in Section 4001(a)(3) of ERISA) with respect to which the Company or any ERISA Affiliate has any liability.
 
“NAIC” shall mean the National Association of Insurance Commissioners or any successor thereto.
 
“NAIC Annual Statement” is defined in Section 6.2(a).
 
 
“Net Proceeds Amount” shall mean, with respect to any Transfer of any property by any Person, an amount equal to the difference of
 
(a)        the aggregate amount of the consideration (valued at the Fair Market Value of such consideration at the time of the consummation of such Transfer) received by such Person in respect of such Transfer, minus
 
(b)         all ordinary and reasonable out-of-pocket costs and expenses actually incurred by such Person in connection with such Transfer.
 
B-8
“New Jersey Natural Gas” shall mean New Jersey Natural Gas Company, a corporation organized and existing under the laws of the State of New Jersey, which corporation is a wholly‑owned Subsidiary of the Company.
 
“Notes” is defined in Section 1.1.
 
“OFAC” shall mean the Office of Foreign Assets Control of the United States Department of the Treasury.
 
“OFAC Sanctions Program” shall mean any economic or trade sanction that OFAC is responsible for administering and enforcing.  A list of OFAC Sanctions Programs may be found at http://www.treasury.gov/resource-center/sanctions/Programs/Pages/Programs.aspx.
 
“Officer’s Certificate” shall mean a certificate of a Senior Financial Officer or of any other officer of the Company or Guarantor, as applicable, whose responsibilities extend to the subject matter of such certificate.
 
“PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and defined in ERISA or any successor thereto.
 
“Permitted Related Business Opportunity” shall mean any transaction with another Person (other than any Inactive Subsidiary of the Company) involving business activities or assets reasonably related or complementary to the business of the Company, its Restricted Subsidiaries and New Jersey Natural Gas as conducted on the Execution Date or as may be conducted pursuant to Section 10.11, including, without limitation, the management and marketing of storage, capacity and transportation of gas and other forms of energy, the generation, transmission or storage of gas and other forms of energy, or the access to gas and energy transmission lines, and business initiatives for the conservation and efficiency of gas and energy.
 
“Person” shall mean an individual, partnership, corporation, limited liability company, association, trust, unincorporated organization or a government or agency or political subdivision thereof.
 
“Plan” shall mean an “employee benefit plan” (as defined in Section 3(3) of ERISA), other than a Multiemployer Plan, subject to Title I of ERISA that is maintained, or to which contributions are required to be made, by the Company or any ERISA Affiliate, or any prior “employee benefit plan” as to which the Company or any ERISA Affiliate has any liability.
 
“Priority Debt” shall mean (without duplication) the sum of (a) unsecured Debt of Restricted Subsidiaries and indebtedness, obligations and liabilities of Restricted Subsidiaries constituting Debt pursuant to clause (e) of the definition of Debt in this Agreement other than (1) Debt owed to the Company or a Wholly-Owned Restricted Subsidiary, (2) Debt outstanding at the time such Person became a Subsidiary provided that such Debt shall not have been incurred in contemplation of such Person becoming a Subsidiary and (3) unsecured Debt of a Guarantor under (i) the Guaranty Agreement and (ii) other Guaranties of Debt of the Company permitted to exist pursuant to Section 10.1 and (b) Debt of the Company secured by a Lien and Debt of any of its Restricted Subsidiaries secured by a Lien, in each case, other than Liens permitted by paragraphs (a) through (k) of Section 10.3.
 
B-9
“Private Rating Letter” shall mean a letter issued by an Acceptable Rating Agency in connection with any private debt rating for the Notes, which (a) sets forth the Debt Rating for the Notes, (b) refers to the Private Placement Number issued by Standard & Poor’s CUSIP Global Service in respect of the Notes, (c) addresses the likelihood of payment of both principal and interest on the Notes (which requirement shall be deemed satisfied if either (x) such letter includes confirmation that the rating reflects the Acceptable Rating Agency’s assessment of the Company’s ability to make timely payment of principal and interest on the Notes or a similar statement or (y) such letter is silent as to the Acceptable Rating Agency’s assessment of the likelihood of payment of both principal and interest and does not include any indication to the contrary), (d) includes such other information describing the relevant terms of the Notes as may be required from time to time by the SVO or any other Governmental Authority having jurisdiction over any holder of any Notes and (e) shall not be subject to confidentiality provisions or other restrictions which would prevent or limit the letter from being shared with the SVO or any other Governmental Authority having jurisdiction over any holder of any Notes.
 
“Private Rating Rationale Report” shall mean, with respect to any Private Rating Letter, a report issued by the Acceptable Rating Agency in connection with such Private Rating Letter setting forth an analytical review of the Notes explaining the transaction structure, methodology relied upon, and, as appropriate, analysis of the credit, legal, and operational risks and mitigants supporting the assigned Private Rating for the Notes, in each case, on the letterhead of the Acceptable Rating Agency or its controlled website and generally consistent with the work product that an Acceptable Rating Agency would produce for a similar publicly rated security and otherwise in form and substance generally required by the SVO or any other Governmental Authority having jurisdiction over any holder of any Notes from time to time. Such report shall not be subject to confidentiality provisions or other restrictions which would prevent or limit the report from being shared with the SVO or any other Governmental Authority having jurisdiction over any holder of any Notes.
 
“property” or “properties” shall mean, unless otherwise specifically limited, real or personal property of any kind, tangible or intangible, choate or inchoate.
 
“Property Reinvestment Application” shall mean, with respect to any Transfer of property, the application of an amount equal to the Net Proceeds Amount with respect to such Transfer to the acquisition by the Company or any Restricted Subsidiary of operating assets of the Company or any Restricted Subsidiary to be used in the principal business of the Company or such Restricted Subsidiary.
 
“Purchaser” or “Purchasers” shall mean each of the purchasers whose signatures appear at the end of this Agreement and such Purchaser’s successors and assigns (so long as any such assignment complies with Section 13.2); provided, however, that any Purchaser of a Note that ceases to be the registered holder or a beneficial owner (through a nominee) of such Note as the result of a transfer thereof pursuant to Section 13.2 shall cease to be included within the meaning of “Purchaser” of such Note for the purposes of this Agreement upon such transfer.
 
“PTE” is defined in Section 6.2(a).
 
“QPAM Exemption” is defined in Section 6.2(d).
 
B-10
“Ratable Portion” for any Note shall mean an amount equal to the product of (a) the Net Proceeds Amount from a Transfer being applied to a Debt Prepayment Application pursuant to Section 10.6(b) multiplied by (b) a fraction, the numerator of which is the aggregate outstanding principal amount of such Note and the denominator of which is the aggregate outstanding principal amount of all Senior Debt of the Company (other than Senior Debt owing to any Affiliate).
 
“Receivables Securitization Transaction” shall mean any transaction pursuant to which the Company or any Restricted Subsidiary Transfers accounts receivable to a Securitization Subsidiary and such Securitization Subsidiary incurs Debt in connection with the purchase of such accounts receivable and grants a security interest in such accounts receivable as collateral security for such Debt; provided that such Debt is non-recourse to the Company and the other Restricted Subsidiaries other than with respect to representations, warranties and indemnities entered into by the Company or the applicable Restricted Subsidiary in connection with such transaction that are customary in non-recourse securitization of receivables transactions.
 
“Regulated Entity” shall mean any Person that is subject under law to any of the laws, rules or regulations respecting the financial, organizational or rate regulation of electric companies, public utilities or public utility holding companies.
 
“Related Fund” shall mean, with respect to any holder of any Note, any fund or entity that (a) invests in securities or bank loans and (b) is advised or managed by such holder, the same investment advisor as such holder or by an Affiliate of such holder or such investment advisor.
 
“Required Holders” shall mean, at any time, (i) prior to the Closing, the Purchasers and (ii) on or after the Closing, the holders of more than 50% in principal amount of the Notes at the time outstanding (exclusive of Notes then owned by the Company or any of its Affiliates).
 
“Responsible Officer” shall mean any Senior Financial Officer and any other officer of the Company with responsibility for the administration of the relevant portion of this Agreement.
 
“Restricted Payment” shall mean any Distribution in respect of the Company or any Restricted Subsidiary (other than on account of capital stock or other equity interests of a Restricted Subsidiary owned legally and beneficially by the Company or another Restricted Subsidiary), including, without limitation, any Distribution resulting in the acquisition by the Company or any Restricted Subsidiary of securities that would constitute treasury stock.  For purposes of this Agreement, the amount of any Restricted Payment made in property shall be the greater of (a) the Fair Market Value of such property (determined in good faith by the Board of Directors (or equivalent governing body) of the Person making such Restricted Payment) and (b) the net book value thereof on the books of such Person, in each case determined as of the date on which such Restricted Payment is made.
 
“Restricted Subsidiary” shall mean each Subsidiary that is either (a) designated as a Restricted Subsidiary in Schedule 5.4 or (b) designated as a Restricted Subsidiary by the Board of Directors of the Company in accordance with Section 10.13.
 
“Restricted Subsidiary Stock” shall mean Subsidiary Stock of any Restricted Subsidiary.
 
B-11
“Securities Act” shall mean the Securities Act of 1933, as amended from time to time and the rules and regulations promulgated thereunder from time to time in effect.
 
“Securitization Subsidiary” shall mean any Restricted Subsidiary that (a) has been created for the sole purpose and business of purchasing and owning the accounts receivable of the Company or any other Restricted Subsidiary, (b) has no Debt outstanding other than Debt incurred in connection with the purchase of such accounts receivable and (c) does not, and by the terms of its organizational documents or contractual obligations to which it or its property is then bound cannot, own or hold any other assets or participate in any other business or incur any other Debt.
 
“Senior Debt” shall mean any Debt of the Company other than Debt that is in any manner subordinated in right of payment or security in any respect to the Debt evidenced by the Notes.
 
“Senior Financial Officer” shall mean the chief financial officer, principal accounting officer, treasurer or comptroller of the Company.
 
“Significant Subsidiary” shall mean at any time, without duplication, (a) each Guarantor, (b) each Restricted Subsidiary (including any Guarantor) that would at such time constitute a “significant subsidiary” (as such term is defined in Regulation S-X of the U.S. Securities and Exchange Commission as in effect on the Execution Date) of the Company and (c) New Jersey Natural Gas.
 
“Source” is defined in Section 6.2.
 
“S&P” shall mean S&P Global Ratings or, if applicable, its successor.

“State Sanctions List” shall mean a list that is adopted by any state Governmental Authority within the United States of America pertaining to Persons that engage in investment or other commercial activities in Iran or any other country that is a target of economic sanctions imposed under U.S. Economic Sanctions Laws.

“Subsidiary” shall mean, as to any Person, any corporation, association or other business entity in which such Person or one or more of its Subsidiaries or such Person and one or more of its Subsidiaries owns sufficient Voting Stock to enable it or them (as a group) ordinarily, in the absence of contingencies, to elect a majority of the directors (or Persons performing similar functions) of such entity, and any partnership or joint venture if more than a 50% interest in the profits or capital thereof is owned by such Person or one or more of its Subsidiaries or such Person and one or more of its Subsidiaries (unless such partnership or joint venture can and does ordinarily take major business actions without the prior approval of such Person or one or more of its Subsidiaries).  Unless the context otherwise clearly requires, any reference to a “Subsidiary” is a reference to a Subsidiary of the Company.
 
“Subsidiary Stock” shall mean, with respect to any Person, the stock (or any options or warrants to purchase stock or other securities exchangeable for or convertible into stock) of any Subsidiary of such Person.
 
“Successor Corporation” is defined in Section 10.7(a).
 
B-12
“SVO” shall mean the Securities Valuation Office of the NAIC or any successor to such Office.
 
“Synthetic Lease” shall mean any lease transaction under which the parties intend that (a) the lease will be treated as an “operating lease” by the lessee pursuant to Statement of Financial Accounting Standards No. 13, as amended, or appropriate successor thereto, and (b) the lessee will be entitled to various tax benefits ordinarily available to owners (as opposed to lessees) of like property.
 
“Transfer” shall mean, with respect to any Person, any transaction in which such Person sells, conveys, transfers or leases (as lessor) any of its property, including, without limitation, Subsidiary Stock.
 
“Unrestricted Subsidiary” shall mean each Subsidiary that is either (a) designated as an Unrestricted Subsidiary in Schedule 5.4 or (b) designated an Unrestricted Subsidiary by the Board of Directors of the Company in accordance with Section 10.13.  For the avoidance of doubt, any Subsidiary which has not been designated as either a Restricted Subsidiary or Unrestricted Subsidiary shall be deemed to be an Unrestricted Subsidiary.
 
“USA PATRIOT Act” shall mean United States Public Law 107-56, Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.
 
“U.S. Economic Sanctions Laws” shall mean those laws, executive orders, enabling legislation or regulations administered and enforced by the United States pursuant to which economic sanctions have been imposed on any Person, entity, organization, country or regime, including the Trading with the Enemy Act, the International Emergency Economic Powers Act, the Iran Sanctions Act, the Sudan Accountability and Divestment Act and any other OFAC Sanctions Program.
 
“Voting Stock” shall mean any securities of any class of a Person whose holders are entitled under ordinary circumstances to vote for the election of directors of such Person (or Persons performing similar functions) irrespective of whether at the time securities of any other class shall have or might have voting power by reason of the happening of any contingency.
 
“Wholly-Owned Restricted Subsidiary” shall mean, at any time, any Restricted Subsidiary 100% of all of the equity interests (except directors’ qualifying shares) and voting interests of which are owned by any one or more of the Company and the Company’s other Wholly-Owned Restricted Subsidiaries at such time.
 
B-13
Disclosure Materials
 
Annual Report on Form 10-K of New Jersey Resources Corporation for the year ended September 30, 2021.

Quarterly Reports on Form 10-Q of New Jersey Resources Corporation for the fiscal quarters ended December 31, 2021, March 31, 2022 and June 30, 2022.

Current Reports on Form 8-K of New Jersey Resources Corporation filed with the SEC on September 9, 2021, September 27, 2021, November 3, 2021, November 15, 2021, December 8, 2021, January 31, 2022, February 11, 2022, June 1, 2022, June 13, 2022, June 27, 2022, September 6, 2022 and September 20, 2022.

Schedule 5.3
(to Note Purchase Agreement)

Subsidiaries of the Company and Ownership of Subsidiary Stock
 
Subsidiary
Jurisdiction of Incorporation/
Formation
Percentage Ownership %
Shareholder
Status
Regulated
New Jersey Natural Gas Company
New Jersey
100
New Jersey Resources Corporation
Unrestricted
Yes
NJR Energy Services Company
New Jersey
100
New Jersey Resources Corporation
Restricted
No
NJR Retail Holdings Corporation
New Jersey
100
New Jersey Resources Corporation
Restricted
No
NJR Home Services Company
New Jersey
100
NJR Retail Holdings Corporation
Restricted
No
NJR Plumbing Services, Inc.
New Jersey
90
NJR Home Services Company
Restricted
No
NJR Energy Investments Corporation
New Jersey
100
New Jersey Resources Corporation
Restricted
No
NJR Storage Holdings Company
Delaware
100
NJR Midstream Holdings Corporation
Restricted
No
NJR Steckman Ridge Storage Company
Delaware
100
NJR Storage Holdings Company
Unrestricted
No
NJR Retail Company
New Jersey
100
NJR Retail Holdings Corporation
Restricted
No
Commercial Realty and Resources Corp.
New Jersey
100
NJR Retail Holdings Corporation
Restricted
No
NJR Midstream Holdings Corporation
New Jersey
100
NJR Energy Investments Corporation
Restricted
No
Phoenix Fuel Management Company
New Jersey
100
NJR Retail Holdings Corporation
Restricted
No
NJR Clean Energy Ventures Corporation
New Jersey
100
New Jersey Resources Corporation
Restricted
No

Schedule 5.4
(to Note Purchase Agreement)

Subsidiary
Jurisdiction of Incorporation/
Formation
Percentage Ownership %
Shareholder
Status
Regulated
NJR Clean Energy Ventures II Corporation
New Jersey
100
NJR Clean Energy Ventures Corporation
Restricted
No
Bernards Solar, LLC
New Jersey
100
NJR Clean Energy Ventures II Corporation
Restricted
No
NJR Clean Energy Ventures III Corporation
New Jersey
100
NJR Clean Energy Ventures II Corporation
Restricted
No
NJR Midstream Company
New Jersey
100
NJR Midstream Holdings Corporation
Inactive
Unrestricted
No
Adelphia Gateway, LLC
Delaware
 
100
NJR Midstream Company
 
Unrestricted
No
Leaf River Energy Center LLC
Delaware
100
NJR Midstream Company
Unrestricted
No
LR Finance, LLC
Delaware
100
Leaf River Energy Center LLC
Unrestricted
No
NJR Service Corporation
New Jersey
100
New Jersey Resources Corporation
Inactive Restricted
No
AR Solar LLC
New York
100
NJR Clean Energy Ventures III Corporation
Unrestricted
No
Canal Road Solar Partners, LLC
Delaware
100
NJR Clean Energy Ventures III Corporation
Unrestricted
No
Canoe Brook Solar Partners, LLC
Delaware
100
NJR Clean Energy Ventures III Corporation
Unrestricted
No
Cleanlight Energy, LLC
Delaware
100
NJR Clean Energy Ventures III Corporation
Unrestricted
No
Greenville Road Solar, LLC
Rhode Island
100
NJR Clean Energy Ventures III Corporation
Unrestricted
No
Howard Lane Solar, LLC
Rhode Island
100
NJR Clean Energy Ventures III Corporation
Unrestricted
No
Maybrook Solar LLC
New York
100
NJR Clean Energy Ventures III Corporation
Unrestricted
No
NJ Oak Solar, LLC
Delaware
100
NJR Clean Energy Ventures III Corporation
Unrestricted
No
CP East Hampton Solar I, LLC
Connecticut
100
NJR Clean Energy Ventures III Corporation
Unrestricted
No
CP East Hampton Solar II, LLC
Connecticut
100
NJR Clean Energy Ventures III Corporation
Unrestricted
No

S-5.4-2
Directors and Officers of the Company

 
Board of Directors
  
Officers
    
           
 
Donald L. Correll (Chairman)
  
Stephen D. Westhoven
  
President and Chief Executive Officer
 
Gregory E. Aliff
  
Roberto F. Bel
  
Senior Vice President and Chief Financial Officer
 
James H. DeGraffenreidt, Jr.
  
Amy Cradic
  
Senior Vice President and Chief Operating Officer, Non-Utility Businesses, Strategy and External Affairs
 
Robert B. Evans
  
Tejal Mehta
  
Corporate Secretary and Assistant General Counsel
 
M. Susan Hardwick
  
Richard Reich
  
Senior Vice President and General Counsel
 
Jane M. Kenny
  
Jacqueline K. Shea
  
Vice President and Chief Information Officer
 
Thomas C. O’Connor
  
David Johnson
  
Vice President, Corporate Business Development
 
Sharon C. Taylor
  
James W. Kent
  
Vice President, Corporate Risk Management
 
David A. Trice
  
Robert Pohlman
  
Vice President, Clean Energy Ventures and Corporate Strategy
 
Stephen D. Westhoven
  
Daniel Sergott
  
Treasurer
 
George R. Zoffinger
        

S-5.4-3
Financials
 
Consolidated financial statements contained in the Annual Report on Form 10-K of New Jersey Resources Corporation for the fiscal year ended September 30, 2021.

Consolidated financial statements contained in the Company’s Quarterly Report on Form 10-Q for the fiscal quarters ended December 31, 2021, March 31, 2022 and June 30, 2022.

Schedule 5.5
(to Note Purchase Agreement)
 
Certain Litigation
 
None.
 
Schedule 5.8
(to Note Purchase Agreement)

Patents, Etc.
 
None.

Schedule 5.11
(to Note Purchase Agreement)

Existing Debt
 
The following is a list of all outstanding Indebtedness of the Company, its Restricted Subsidiaries and New Jersey Natural Gas Company as of June 30, 2022 (unless otherwise indicated).


 A.
THE COMPANY
 

1.   Senior Notes
  
Rate
  
Maturity Date
  
Principal Amount
  
               
Unsecured Senior Notes
  
3.25%

9/17/22
  
$
50,000,000
  
Unsecured Senior Notes
  
3.20%

8/18/23
  
$
50,000,000
  
Unsecured Senior Notes
  
3.48%

11/7/24
  
$
100,000,000
  
Unsecured Senior Notes
  
3.54%

8/18/26
  
$
100,000,000
  
Unsecured Senior Notes
  
3.96%

6/8/28
  
$
100,000,000
  
Unsecured Senior Notes
  
3.29%

7/17/29
  
$
150,000,000
  
Unsecured Senior Notes
  
3.50%

7/23/30
  
$
130,000,000
  
Unsecured Senior Notes
  
3.13%

9/1/31
  
$
120,000,000
  
Unsecured Senior Notes
  
3.60%

7/23/32
  
$
130,000,000
  
Unsecured Senior Notes
  
3.25%

9/1/33
  
$
80,000,000
  
Unsecured Senior Notes
  
4.38%

6/23/27
  
$
110,000,000
  
                 
Less: Debt Issuance Cost
           
$ 
(3,712,000
)
                 
             
$
1,116,288,000
  


2.
Bank Credit Agreement: As of June 30, 2022, the Company had $370,350,000 of Notes Payable to Banks, including $220,350,000 under the credit agreement described in clause (i) of “Bank Credit Agreements”, and $150,000,000 under that certain Term Loan by and among NJR, the guarantors thereto and PNC Bank, National Association, as Lender, dated as of February 8, 2022 (“Term Loan Agreement”).


3.
Letters of Credit: The Company has outstanding letters of credit issued pursuant to the Bank Credit Agreement in an aggregate amount of $15,322,787.

Schedule 5.15
(to Note Purchase Agreement)


 B.
New Jersey Natural Gas Company
 
First Mortgage Bonds
  
Rate
  
Maturity date
  
Principal Amount
  
               
Series OO
  
3.00%

8/1/2041
  
$
46,500,000
  
Series PP
  
3.15%

4/15/2028
  
$
50,000,000
  
Series QQ
  
3.58%

3/13/2024
  
$
70,000,000
  
Series RR
  
4.61%

3/13/2044
  
$
55,000,000
  
Series SS
  
2.82%

4/15/2025
  
$
50,000,000
  
Series TT
  
3.66%

4/15/2045
  
$
100,000,000
  
Series UU
  
3.63%

6/21/2046
  
$
125,000,000
  
Series VV
  
4.01%

5/11/2048
  
$
125,000,000
  
Series WW
  
3.50%

4/1/2042
  
$
10,300,000
  
Series XX
  
3.38%

4/1/2038
  
$
10,500,000
  
Series YY
  
2.45%

4/1/2059
  
$
15,000,000
  
Series ZZ
  
3.76%

7/17/2049
  
$
100,000,000
  
Series AAA
  
3.86%

7/17/2059
  
$
85,000,000
  
Series BBB
  
2.75%

8/1/2039
  
$
9,545,000
  
Series CCC
  
3.00%

8/1/2043
  
$
41,000,000
  
Series DDD
  
3.13%

6/30/2050
  
$
50,000,000
  
Series EEE
  
3.13%

7/23/2050
  
$
50,000,000
  
Series FFF
  
3.33%

7/23/2060
  
$
25,000,000
  
Series GGG
  
2.87%

9/1/2050
  
$
25,000,000
  
Series HHH
  
2.97%

9/1/2060
  
$
50,000,000
  
Series III
  
2.97%

10/30/2051
  
$
50,000,000
  
Series JJJ
  
3.07%

10/28/2061
  
$
50,000,000
  
Series LLL
  
4.37%

5/27/2037
  
$
50,000,000
  
Series MMM
  
4.71%

5/27/2052
  
$
50,000,000
  
                 
Sub-Total First Mortgage Bonds
           
$
1,292,845,000
  
                 
Capital lease obligation-Meters
      
Various dates
  
$
31,895,000
  
                 
Commercial Paper
           
$
-
  
                 
Less: Debt Issuance Costs
           
$
(10,461,000
)
Total New Jersey Natural Gas Debt
      
$
1,314,279,000
  


C.
Clean Energy Ventures

Solar Asset Financing Obligation
  
$
118,714,000
  
         
Total Clean Energy Ventures Long-term Debt
  
$
118,714,000
  


D.
Derivative Instruments

The Company is subject primarily to commodity price risk due to fluctuations in the market price of natural gas, Solar Renewable Energy Credits (“SRECs”) and electricity. To manage this risk, the Company enters into a variety of derivative instruments including, but not limited to, futures contracts, physical forward contracts, financial options and swaps to economically hedge the commodity price risk associated with its existing and anticipated commitments to purchase and sell natural gas, SRECs and electricity. In addition, the Company is exposed to foreign currency and interest rate risk and may utilize foreign currency derivatives to hedge Canadian dollar denominated natural gas purchases and/or sales and interest rate derivatives to reduce exposure to fluctuations in interest rates. All of these types of contracts are accounted for as derivatives, unless the Company elects NPNS, which is done on a contract-by-contract election. Accordingly, all of the financial and certain of the Company's physical derivative instruments are recorded at fair value on the Unaudited Condensed Consolidated Balance Sheets.

NJR Energy Services Company (“NJRES”) chooses not to designate its financial commodity and physical forward commodity derivatives as accounting hedges or to elect Normal Purchase/Normal Sale (“NPNS”). The changes in the fair value of these derivatives are recorded as a component of natural gas purchases or operating revenues, as appropriate for NJRES, on the Unaudited Condensed Consolidated Statements of Operations as unrealized gains or losses. For NJRES at settlement, realized gains and losses on all financial derivative instruments are recognized as a component of natural gas purchases and realized gains and losses on all physical derivatives follow the presentation of the related unrealized gains and losses as a component of either natural gas purchases or operating revenues.

NJRES also enters into natural gas transactions in Canada and, consequently, is exposed to fluctuations in the value of Canadian currency relative to the U.S. dollar. NJRES may utilize foreign currency derivatives to lock in the exchange rates associated with natural gas transactions denominated in Canadian currency. The derivatives may include currency forwards, futures, or swaps and are accounted for as derivatives. These derivatives are typically used to hedge demand fee payments on pipeline capacity, storage and natural gas purchase agreements.
As a result of NJRES entering into transactions to borrow natural gas, commonly referred to as “park and loans,” an embedded derivative is recognized relating to differences between the fair value of the amount borrowed and the fair value of the amount that will ultimately be repaid, based on changes in the forward price for natural gas prices at the borrowed location over the contract term. This embedded derivative is accounted for as a forward sale in the month in which the repayment of the borrowed natural gas is expected to occur, and is considered a derivative transaction that is recorded at fair value on the Unaudited Condensed Consolidated Balance Sheets, with changes in value recognized in current period earnings.

Expected production of SRECs is hedged through the use of forward and futures contracts. All contracts require the Company to physically deliver SRECs through the transfer of certificates as per contractual settlement schedules. NJRES recognizes changes in the fair value of these derivatives as a component of operating revenues. Upon settlement of the contract, the related revenue is recognized when the SREC is transferred to the counterparty.

S-5.15-3
Changes in fair value of New Jersey Natural Gas’ (“NJNG”) financial commodity derivatives are recorded as a component of regulatory assets or liabilities on the Unaudited Condensed Consolidated Balance Sheets. The Company elects NPNS accounting treatment on all physical commodity contracts that NJNG entered into on or before December 31, 2015, and accounts for these contracts on an accrual basis. Accordingly, physical natural gas purchases are recognized in regulatory assets or liabilities on the Unaudited Condensed Consolidated Balance Sheets when the contract settles and the natural gas is delivered. The average cost of natural gas is charged to expense in the current period earnings based on the basic gas supply service (“BGSS”) factor times the therm sales. Effective for contracts executed on or after January 1, 2016, NJNG no longer elects NPNS accounting treatment on a portfolio basis. However, since NPNS is a contract-by-contract election, where it makes sense to do so, NJNG can and may elect to treat certain contracts as normal. Because NJNG recovers these amounts through future BGSS rates as increases or decreases to the cost of natural gas in NJNG’s tariff for natural gas service, the changes in fair value of these contracts are deferred as a component of regulatory assets or liabilities on the Unaudited Condensed Consolidated Balance Sheets.

The Company elects NPNS accounting treatment on Power Purchase Agreement (“PPA”) contracts executed by Clean Energy Ventures that meet the definition of a derivative and accounts for the contract on an accrual basis. Accordingly, electricity sales are recognized in revenues throughout the term of the PPA as electricity is delivered. NPNS is a contract-by-contract election and where it makes sense to do so, the Company can and may elect to treat certain contracts as normal.

The following table presents the fair value of the Company's derivative assets and liabilities recognized on the Unaudited Condensed Consolidated Balance Sheets as of March 31, 2022:

      
Derivatives at Fair Value
  
   
June 30, 2022
    
September 30, 2021
  
(Thousands)
Balance Sheet Location
  
Assets
    
Liabilities
    
Assets
    
Liabilities
  
Derivatives not designated as hedging instruments:
                        
NJNG Distribution:
                          
Physical commodity contracts
Derivatives - current
  
$
18
    
$
14
    
$
36
    
$
16
  
Financial commodity contracts
Derivatives - current
    
70
      
10,209
      
2,046
      
13
  
                                   
NJRES:
                                  
Physical commodity contracts
Derivatives - current
    
3,075
      
20,038
      
2,818
      
24,592
  

Derivatives - noncurrent
    
460
      
20,570
      
333
      
13,237
  
Financial commodity contracts
Derivatives - current
    
17,108
      
28,538
      
30,226
      
62,521
  

Derivatives - noncurrent
    
6,012
      
799
      
3,068
      
260
  
Foreign currency contracts
Derivatives - current
    
7
      
3
      
125
      
3
  

Derivatives - noncurrent
    
-
      
-
      
2
      
-
  
                                   
Total fair value of derivatives
    
$
26,750
    
$
80,171
    
$
38,654
    
$
100,642
  

S-5.15-4
Form of Note
 
New Jersey Resources Corporation
 
6.14% Senior Note, Series 2022B, due December 15, 2032
 
No. R2022B-[__] [__________ __], 20[__]
$[____________] PPN: 646025 F*2

For Value Received, the undersigned, New Jersey Resources Corporation (herein called the “Company”), a corporation organized and existing under the laws of the State of New Jersey, hereby promises to pay to [________________], or registered assigns, the principal sum of [________________] Dollars (or so much thereof as shall not have been prepaid) on December 15, 2032 (the “Maturity Date”), with interest (computed on the basis of a 360-day year of twelve 30‑day months) (a) on the unpaid balance hereof at the rate of 6.14% per annum from the date hereof, payable semi-annually, on the fifteenth day of June and December in each year, commencing with the June 15th or December 15th next succeeding the date hereof, and on the Maturity Date, until the principal hereof shall have become due and payable, and (b) to the extent permitted by law, (x) on any overdue payment of interest and (y) during the continuance of an Event of Default, on such unpaid balance and on any overdue payment of any Make-Whole Amount, at a rate per annum from time to time equal to the greater of (i) 8.14% or (ii) 2.00% over the rate of interest publicly announced by U.S. Bank National Association from time to time in New York, New York as its “base” or “prime” rate, payable semi-annually as aforesaid (or, at the option of the registered holder hereof, on demand).
 
Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are to be made in lawful money of the United States of America at the principal offices of U.S. Bank Trust Company, National Association in New York, New York or at such other place as the Company shall have designated by written notice to the holder of this Note as provided in the Note Purchase Agreement referred to below.
 
This Note is one of a series of Senior Notes (herein called the “Notes”) issued pursuant to the Note Purchase Agreement dated as of October 24, 2022 (as from time to time amended, the “Note Purchase Agreement”), between the Company and the respective Purchasers named therein and is entitled to the benefits thereof.  Each holder of this Note will be deemed, by its acceptance hereof, (1) to have agreed to the confidentiality provisions set forth in Section 20 of the Note Purchase Agreement and (2) to have made the representation set forth in Section 6.2 of the Note Purchase Agreement.  Unless otherwise indicated, capitalized terms used in this Note shall have the respective meanings ascribed to such terms in the Note Purchase Agreement.
 
This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender of this Note for registration of transfer, duly endorsed, or accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee.  Prior to due presentment for registration of transfer, the Company may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company will not be affected by any notice to the contrary.

Exhibit 1
(to Note Purchase Agreement)

This Note is subject to optional prepayment, in whole or from time to time in part, at the times and on the terms specified in the Note Purchase Agreement, but not otherwise.
 
If an Event of Default occurs and is continuing, the principal of this Note may be declared or otherwise become due and payable in the manner, at the price (including any applicable Make-Whole Amount) and with the effect provided in the Note Purchase Agreement.
 
This Note shall be construed and enforced in accordance with, and the rights of the Company and the holder of this Note shall be governed by, the laws of the State of New York excluding the choice of law principles of the law of such State that would require the application of the laws of a jurisdiction other than such State.
 
 
New Jersey Resources Corporation
     
 
By
  
   
Name:
   
Title:

E-1-2
Form of Subsidiary Guaranty Agreement
 
Subsidiary Guaranty Agreement
 
Re:          Senior Notes
of
New Jersey Resources Corporation
 
This Subsidiary Guaranty Agreement dated as of October 24, 2022 (this “Guaranty”) is entered into on a joint and several basis by each of the undersigned, together with any entity which may become a party hereto by execution and delivery of a Subsidiary Guaranty Supplement in substantially the form set forth as Exhibit A hereto (a “Guaranty Supplement”) (which parties are hereinafter referred to individually as a “Guarantor” and collectively as the “Guarantors”).
 
Recitals
 
A.       Each Guarantor is a direct or indirect subsidiary of New Jersey Resources Corporation, a corporation organized under the laws of the State of New Jersey (the “Company”).
 
B.        The Company is concurrently herewith entering into that certain Note Purchase Agreement dated as of October 24, 2022 (as the same may be amended, supplemented, restated or otherwise modified from time to time, the “Note Purchase Agreement”) between the Company and the respective Purchasers named therein, providing for, among other things, the issue and sale by the Company to the Purchasers (as defined therein) of $50,000,000 aggregate principal amount of its 6.14% Senior Notes, Series 2022B, due December 15, 2032 (the “Notes”). The Purchasers together with their respective successors and assigns are collectively referred to herein as the “Holders.”
 
C.         The Purchasers have required as a condition of their purchase of the Notes that the Company cause each of the undersigned to enter into this Guaranty and, upon (1) the formation or acquisition of a new Restricted Subsidiary (other than a Regulated Entity), (2) the occurrence of any other event creating a new Restricted Subsidiary (other than a Regulated Entity), (3) the designation of an Unrestricted Subsidiary (other than a Regulated Entity) as a Restricted Subsidiary or (4) an Unrestricted Subsidiary or a Regulated Entity becoming or being a guarantor or co‑obligor in respect of the Bank Credit Agreement, to cause each such Subsidiary to execute a Guaranty Supplement, in each case in order to induce the Purchasers to purchase the Notes and thereby benefit the Company and its Subsidiaries by providing funds to the Company for the repayment of existing debt and for its general corporate purposes.
 
Now, therefore, as required by Section 4.4 of the Note Purchase Agreement and in consideration of the premises and other good and valuable consideration, the receipt and sufficiency whereof are hereby acknowledged, each Guarantor does hereby covenant and agree, jointly and severally, as follows:
 
Section 1.          Definitions.
 
Exhibit 2
(to Note Purchase Agreement)

Capitalized terms used herein shall have the meanings set forth in the Note Purchase Agreement unless otherwise defined herein.
 
Section 2.          Guaranty of Notes and Note Purchase Agreement.
 
(a)         Each Guarantor jointly and severally does hereby irrevocably, absolutely and unconditionally guarantee unto the Holders:  (1) the full and prompt payment of the principal of, Make-Whole Amount, if any, and interest on the Notes from time to time outstanding, as and when such payments shall become due and payable whether by lapse of time, upon redemption or prepayment, by extension or by acceleration or declaration or otherwise (including, to the extent permitted by applicable law, interest due on overdue payments of principal, Make-Whole Amount, if any, or interest at the rate set forth in the Notes) in Federal or other immediately available funds of the United States of America which at the time of payment or demand therefor shall be legal tender for the payment of public and private debts, (2) the full and prompt performance and observance by the Company of each and all of the obligations, covenants and agreements required to be performed or owed by the Company under the terms of the Notes and the Note Purchase Agreement and (3) the full and prompt payment, upon demand by any Holder of all costs and expenses, legal or otherwise (including reasonable attorneys’ fees), if any, as shall have been expended or incurred in the protection or enforcement of any rights, privileges or liabilities in favor of the Holders under or in respect of the Notes and the Note Purchase Agreement, or under this Guaranty or in any consultation or action in connection therewith or herewith.
 
(b)         To the extent that any Guarantor shall make a payment hereunder (a “Payment”) which, taking into account all other Payments previously or concurrently made by any of the other Guarantors, exceeds the amount which such Guarantor would otherwise have paid if each Guarantor had paid the aggregate obligations satisfied by such Payment in the same proportion as such Guarantor’s “Allocable Amount” (as hereinafter defined) in effect immediately prior to such Payment bore to the Aggregate Allocable Amount (as hereinafter defined) of all of the Guarantors in effect immediately prior to the making of such Payment, then such Guarantor shall be entitled to contribution and indemnification from, and be reimbursed by, each of the other Guarantors for the amount of such excess, pro rata based upon their respective Allocable Amounts in effect immediately prior to such Payment.
 
As of any date of determination, (1) the “Allocable Amount” of any Guarantor shall be equal to the maximum amount which could then be claimed by the Holders under this Guaranty without rendering such claim voidable or avoidable under Section 548 of Chapter 11 of the United States Bankruptcy Code (11 U.S.C. Sec. 101 et. seq.) or under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar statute or common law; and (2) the “Aggregate Allocable Amount” shall be equal to the sum of each Guarantor’s Allocable Amount.
 
This clause (b) is intended only to define the relative rights of the Guarantors, and nothing set forth in this clause (b) is intended to or shall impair the obligations of the Guarantors, jointly and severally, to pay any amounts to the Holders as and when the same shall become due and payable in accordance herewith.
 
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Each Guarantor acknowledges that the rights of contribution and indemnification hereunder shall constitute an asset in favor of any Guarantor to which such contribution and indemnification is owing.
 
Section 3.          Guaranty of Payment and Performance.
 
This is an irrevocable, absolute and unconditional guarantee of payment and performance and each Guarantor hereby waives, to the fullest extent permitted by law, any right to require that any action on or in respect of any Note or the Note Purchase Agreement be brought against the Company or any other Person or that resort be had to any direct or indirect security for the Notes or for this Guaranty or any other remedy.  Any Holder may, at its option, proceed hereunder against any Guarantor in the first instance to collect monies when due, the payment of which is guaranteed hereby, without first proceeding against the Company or any other Person and without first resorting to any direct or indirect security for the Notes or for this Guaranty or any other remedy.  The liability of each Guarantor hereunder shall in no way be affected or impaired by any acceptance by any Holder of any direct or indirect security for, or other guaranties of, any Debt, liability or obligation of the Company or any other Person to any Holder or by any failure, delay, neglect or omission by any Holder to realize upon or protect any such guarantees, Debt, liability or obligation or any notes or other instruments evidencing the same or any direct or indirect security therefor or by any approval, consent, waiver, or other action taken, or omitted to be taken by any such Holder.
 
The covenants and agreements on the part of the Guarantors herein contained shall take effect as joint and several covenants and agreements, and references to the Guarantors shall take effect as references to each of them and none of them shall be released from liability hereunder by reason of this Guaranty ceasing to be binding as a continuing security on any other of them.
 
Section 4.          General Provisions Relating to this Guaranty.
 
(a)          Each Guarantor hereby consents and agrees that any Holder or Holders from time to time, with or without any further notice to or assent from any other Guarantor may, without in any manner affecting the liability of any Guarantor under this Guaranty, and upon such terms and conditions as any such Holder or Holders may deem advisable:
 
(1)        extend in whole or in part (by renewal or otherwise), modify, change, compromise, release or extend the duration of the time for the performance or payment of any Debt, liability or obligation of the Company or of any other Person (including, without limitation, any other Guarantor) secondarily or otherwise liable for any Debt, liability or obligation of the Company on the Notes, or waive any Default or Event of Default with respect thereto, or waive, modify, amend or change any provision of the Note Purchase Agreement or any other agreement or waive this Guaranty; or
 
(2)          sell, release, surrender, modify, impair, exchange or substitute any and all property, of any nature and from whomsoever received, held by, or for the benefit of, any such Holder as direct or indirect security for the payment or performance of any Debt, liability or obligation of the Company or of any other Person (including, without limitation, any other Guarantor) secondarily or otherwise liable for any Debt, liability or obligation of the Company on the Notes; or
 
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(3)       settle, adjust or compromise any claim of the Company against any other Person (including, without limitation, any other Guarantor) secondarily or otherwise liable for any Debt, liability or obligation of the Company on the Notes.
 
Each Guarantor hereby ratifies and confirms any such extension, renewal, change, sale, release, waiver, surrender, exchange, modification, amendment, impairment, substitution, settlement, adjustment or compromise and that the same shall be binding upon it, and hereby waives, to the fullest extent permitted by law, any and all defenses, counterclaims or offsets which it might or could have by reason thereof, it being understood that such Guarantor shall at all times be bound by this Guaranty and remain liable hereunder.
 
(b)          Each Guarantor hereby waives, to the fullest extent permitted by law:
 
(1)        notice of acceptance of this Guaranty by the Holders or of the creation, renewal or accrual of any liability of the Company, present or future, or of the reliance of such Holders upon this Guaranty (it being understood that every Debt, liability and obligation described in Section 2 hereof shall conclusively be presumed to have been created, contracted or incurred in reliance upon the execution of this Guaranty);
 
(2)          demand of payment by any Holder from the Company or any other Person (including, without limitation, any other Guarantor) indebted in any manner on or for any of the Debt, liabilities or obligations hereby guaranteed; and
 
(3)         presentment for the payment by any Holder or any other Person of the Notes or any other instrument, protest thereof and notice of its dishonor to any party thereto and to such Guarantor.
 
The obligations of each Guarantor under this Guaranty and the rights of any Holder to enforce such obligations by any proceedings, whether by action at law, suit in equity or otherwise, shall not be subject to any reduction, limitation, impairment or termination, whether by reason of any claim of any character whatsoever or otherwise and shall not be subject to any defense, set-off, counterclaim (other than any compulsory counterclaim), recoupment or termination whatsoever.
 
(c)        The obligations of the Guarantors hereunder shall be binding upon the Guarantors and their successors and assigns, and shall remain in full force and effect irrespective of:
 
(1)      the genuineness, validity, regularity or enforceability of the Notes and the Note Purchase Agreement or any other agreement or any of the terms of any thereof, the continuance of any obligation on the part of the Company or any other Person on or in respect of the Notes or under the Note Purchase Agreement or any other agreement or the power or authority or the lack of power or authority of the Company to issue the Notes or the Company to execute and deliver the Note Purchase Agreement or any other agreement or of any Guarantor to execute and deliver this Guaranty or to perform any of its obligations hereunder or the existence or continuance of the Company or any other Person as a legal entity; or
 
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(2)         any default, failure or delay, willful or otherwise, in the performance by the Company, any Guarantor or any other Person of any obligations of any kind or character whatsoever under the Notes, the Note Purchase Agreement, this Guaranty or any other agreement; or
 
(3)        any creditors’ rights, bankruptcy, receivership or other insolvency proceeding of the Company, any Guarantor or any other Person or in respect of the property of the Company, any Guarantor or any other Person or any merger, consolidation, reorganization, dissolution, liquidation, the sale of all or substantially all of the assets of or winding up of the Company, any Guarantor or any other Person; or
 
(4)         impossibility or illegality of performance on the part of the Company, any Guarantor or any other Person of its obligations under the Notes, the Note Purchase Agreement, this Guaranty or any other agreements; or
 
(5)          in respect of the Company or any other Person, any change of circumstances, whether or not foreseen or foreseeable, whether or not imputable to the Company or any other Person, or other impossibility of performance through fire, explosion, accident, labor disturbance, floods, droughts, embargoes, wars (whether or not declared), civil commotion, acts of God or the public enemy, delays or failure of suppliers or carriers, inability to obtain materials, action of any Federal or state regulatory body or agency, change of law or any other causes affecting performance, or any other force majeure, whether or not beyond the control of the Company or any other Person and whether or not of the kind hereinbefore specified; or
 
(6)        any attachment, claim, demand, charge, Lien, order, process, encumbrance or any other happening or event or reason, similar or dissimilar to the foregoing, or any withholding or diminution at the source, by reason of any taxes, assessments, expenses, Debt, obligations or liabilities of any character, foreseen or unforeseen, and whether or not valid, incurred by or against the Company, any Guarantor or any other Person or any claims, demands, charges or Liens of any nature, foreseen or unforeseen, incurred by the Company, any Guarantor or any other Person, or against any sums payable in respect of the Notes or under the Note Purchase Agreement or this Guaranty, so that such sums would be rendered inadequate or would be unavailable to make the payments herein provided; or
 
(7)         any order, judgment, decree, ruling or regulation (whether or not valid) of any court of any nation or of any political subdivision thereof or any body, agency, department, official or administrative or regulatory agency of any thereof or any other action, happening, event or reason whatsoever which shall delay, interfere with, hinder or prevent, or in any way adversely affect, the performance by the Company, any Guarantor or any other Person of its respective obligations under or in respect of the Notes, the Note Purchase Agreement, this Guaranty or any other agreement; or
 
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(8)          the failure of any Guarantor to receive any benefit from or as a result of its execution, delivery and performance of this Guaranty; or
 
(9)        any failure or lack of diligence in collection or protection, failure in presentment or demand for payment, protest, notice of protest, notice of default and of nonpayment, any failure to give notice to any Guarantor of failure of the Company, any Guarantor or any other Person to keep and perform any obligation, covenant or agreement under the terms of the Notes, the Note Purchase Agreement, this Guaranty or any other agreement or failure to resort for payment to the Company, any Guarantor or to any other Person or to any other guaranty or to any property, security, Liens or other rights or remedies; or
 
(10)       the acceptance of any additional security or other guaranty, the advance of additional money to the Company or any other Person, the renewal or extension of the Notes or amendments, modifications, consents or waivers with respect to the Notes, the Note Purchase Agreement, or any other agreement, or the sale, release, substitution or exchange of any security for the Notes; or
 
(11)       any merger or consolidation of the Company, any Guarantor or any other Person into or with any other Person or any sale, lease, transfer or other disposition of any of the assets of the Company, any Guarantor or any other Person to any other Person, or any change in the ownership of any shares or other equity interests of the Company, any Guarantor or any other Person; or
 
(12)       any defense whatsoever that:  (i) the Company or any other Person might have to the payment of the Notes (including, principal, Make-Whole Amount, if any, or interest), other than payment thereof in Federal or other immediately available funds or (ii) the Company or any other Person might have to the performance or observance of any of the provisions of the Notes, the Note Purchase Agreement, or any other agreement, whether through the satisfaction or purported satisfaction by the Company or any other Person of its debts due to any cause such as bankruptcy, insolvency, receivership, merger, consolidation, reorganization, dissolution, liquidation, winding-up or otherwise; or
 
(13)       any act or failure to act with regard to the Notes, the Note Purchase Agreement, this Guaranty or any other agreement or anything which might vary the risk of any Guarantor or any other Person; or
 
(14)       any other circumstance which might otherwise constitute a defense available to, or a discharge of, any Guarantor or any other Person in respect of the obligations of any Guarantor or other Person under this Guaranty or any other agreement;
 
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provided that the specific enumeration of the above-mentioned acts, failures or omissions shall not be deemed to exclude any other acts, failures or omissions, though not specifically mentioned above, it being the purpose and intent of this Guaranty and the parties hereto that the obligations of each Guarantor shall be absolute and unconditional and shall not be discharged, impaired or varied except by the payment of the principal of, Make-Whole Amount, if any, and interest on the Notes in accordance with their respective terms whenever the same shall become due and payable as in the Notes provided, at the place specified in and all in the manner and with the effect provided in the Notes and the Note Purchase Agreement, as each may be amended or modified from time to time.  Without limiting the foregoing, it is understood that repeated and successive demands may be made and recoveries may be had hereunder as and when, from time to time, the Company shall default under or in respect of the terms of the Notes or the Note Purchase Agreement and that notwithstanding recovery hereunder for or in respect of any given default or defaults by the Company under the Notes or the Note Purchase Agreement, this Guaranty shall remain in full force and effect and shall apply to each and every subsequent default.
 
(d)         All rights of any Holder under this Guaranty shall be considered to be transferred or assigned at any time or from time to time upon the transfer of any Note held by such Holder whether with or without the consent of or notice to the Guarantors under this Guaranty or to the Company.
 
(e)          To the extent of any payments made under this Guaranty, the Guarantors shall be subrogated to the rights of the Holder or Holders upon whose Notes such payment was made, but each Guarantor covenants and agrees that such right of subrogation and any and all claims of such Guarantor against the Company, any endorser or other Guarantor or against any of their respective properties shall be junior and subordinate in right of payment to the prior indefeasible final payment in cash in full of all of the Notes and satisfaction by the Company of its obligations under the Note Purchase Agreement and by the Guarantors of their obligations under this Guaranty, and the Guarantors shall not take any action to enforce such right of subrogation, and the Guarantors shall not accept any payment in respect of such right of subrogation, until all of the Notes and all amounts payable by the Guarantors hereunder have indefeasibly been finally paid in cash in full and all of the obligations of the Company under the Note Purchase Agreement and of the Guarantors under this Guaranty have been satisfied.  Notwithstanding any right of any Guarantor to ask, demand, sue for, take or receive any payment from the Company, all rights, Liens and security interests of each Guarantor, whether now or hereafter arising and howsoever existing, in any assets of the Company shall be and hereby are subordinated to the rights, if any, of the Holders in those assets.  No Guarantor shall have any right to possession of any such asset or to foreclose upon any such asset, whether by judicial action or otherwise, unless and until all of the Notes and the obligations of the Company under the Note Purchase Agreement shall have been paid in cash in full and satisfied.
 
(f)          Each Guarantor agrees that to the extent the Company or any other Person makes any payment on any Note, which payment or any part thereof is subsequently invalidated, voided, declared to be fraudulent or preferential, set aside, recovered, rescinded or is required to be retained by or repaid to a trustee, receiver, or any other Person under any bankruptcy code, common law, or equitable cause, then and to the extent of such payment, the obligation or the part thereof intended to be satisfied shall be revived and continued in full force and effect with respect to the Guarantors’ obligations hereunder, as if said payment had not been made.  The liability of the Guarantors hereunder shall not be reduced or discharged, in whole or in part, by any payment to any Holder from any source that is thereafter paid, returned or refunded in whole or in part by reason of the assertion of a claim of any kind relating thereto, including, but not limited to, any claim for breach of contract, breach of warranty, preference, illegality, invalidity or fraud asserted by any account debtor or by any other Person.
 
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(g)          No Holder shall be under any obligation:  (1) to marshall any assets in favor of the Guarantors or in payment of any or all of the liabilities of the Company under or in respect of the Notes, the Note Purchase Agreement or the obligations of the Guarantors hereunder or (2) to pursue any other remedy that the Guarantors may or may not be able to pursue themselves and that may lighten the Guarantors’ burden, any right to which each Guarantor hereby expressly waives.
 
Section 5.          Representations and Warranties of the Guarantors.
 
Each Guarantor represents and warrants to each Holder that:
 
(a)        Such Guarantor is a corporation or other legal entity duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, and is duly qualified as a foreign corporation or other legal entity and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
 
(b)         Each subsidiary of such Guarantor is a corporation or other legal entity duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, and is duly qualified as a foreign corporation or other legal entity and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  Each subsidiary of such Guarantor has the power and authority to own or lease the properties it purports to own or lease and to transact the business it transacts and proposes to transact.
 
(c)         This Guaranty has been duly authorized by all necessary action on the part of such Guarantor, and this Guaranty constitutes a legal, valid and binding obligation of such Guarantor enforceable against such Guarantor in accordance with its terms, except as such enforceability may be limited by (1) applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (2) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
 
(d)       The execution, delivery and performance by such Guarantor of this Guaranty will not (1) contravene, result in any breach of, or constitute a default under, or result in the creation of any Lien in respect of any property of such Guarantor or any of its subsidiaries which are Restricted Subsidiaries under any indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease, organizational document or any other agreement or instrument to which such Guarantor or any of its subsidiaries which are Restricted Subsidiaries is bound or by which such Guarantor or any of its subsidiaries or any of their respective properties may be bound or affected, (2) conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment, decree, or ruling of any court, arbitrator or Governmental Authority applicable to such Guarantor or any of its subsidiaries which are Restricted Subsidiaries or (3) violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to such Guarantor or any of its subsidiaries which are Restricted Subsidiaries.
 
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(e)      No consent, approval or authorization of, or registration, filing or declaration with, any Governmental Authority is required in connection with the execution, delivery or performance by such Guarantor of this Guaranty other than such consents, approvals, authorizations, registrations, filings or declarations that have been obtained or made prior to the date such Guarantor enters into this Guaranty.
 
(f)       (1) Except as disclosed in Schedule 5.8 to the Note Purchase Agreement or otherwise disclosed in writing to the Holders, there are no actions, suits or proceedings pending or, to the knowledge of such Guarantor, threatened against or affecting such Guarantor or any of its subsidiaries which are Restricted Subsidiaries or any property of such Guarantor or any of its subsidiaries which are Restricted Subsidiaries in any court or before any arbitrator of any kind or before or by any Governmental Authority that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.
 
(2)          Neither such Guarantor nor any of its subsidiaries which are Restricted Subsidiaries is in default under any term of any agreement or instrument to which it is a party or by which it is bound, or any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority or is in violation of any applicable law, ordinance, rule or regulation (including, without limitation, ERISA (with respect to any Plan), Environmental Laws or the USA PATRIOT Act) of any Governmental Authority, which default or violation, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.
 
(g)        Such Guarantor and its subsidiaries have filed all income tax returns that are required to have been filed in any jurisdiction, and have paid all taxes shown to be due and payable on such returns and all other taxes and assessments payable by them, to the extent such taxes and assessments have become due and payable and before they have become delinquent, except for any taxes and assessments (1) the amount of which is not, individually or in the aggregate, material to the business, operations, affairs, financial condition, assets or properties of such Guarantor and its subsidiaries taken as a whole (herein in this Section 5, “Material”) or (2) the amount, applicability or validity of which is currently being contested in good faith by appropriate proceedings and with respect to which such Guarantor or one of its subsidiaries, as the case may be, has established adequate reserves in accordance with GAAP.  The charges, accruals and reserves on the books of such Guarantor and its subsidiaries in respect of Federal, state or other taxes for all fiscal periods are adequate in accordance with GAAP.  The Federal income tax liabilities of such Guarantor and its subsidiaries have been determined by the Internal Revenue Service and paid for all fiscal years up to and including the fiscal year ended September 30, 2020.
 
(h)          Such Guarantor and its subsidiaries which are Restricted Subsidiaries have good and sufficient title related to the ownership of their respective Material properties, including all such properties reflected in the most recent audited consolidated balance sheet furnished to the Holders pursuant to the Note Purchase Agreement or purported to have been acquired by such Guarantor after said date (except as sold or otherwise disposed of in the ordinary course of business), in each case free and clear of Liens prohibited by the Note Purchase Agreement, except for those defects in title and Liens that, individually or in the aggregate, would not have a Material Adverse Effect.  All Material leases to which such Guarantor is a party are valid and subsisting and are in full force and effect in all material respects.
 
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(i)          Except as disclosed in Schedule 5.11 to the Note Purchase Agreement or otherwise disclosed in writing to the Holders, such Guarantor and those of its subsidiaries which are Restricted Subsidiaries own or possess all licenses, permits, franchises, authorizations, patents, copyrights, proprietary software, service marks, trademarks, trade names and domain names or rights thereto, that are Material, without known conflict with the rights of others, except for those conflicts that, individually or in the aggregate, would not have a Material Adverse Effect.
 
(j)          (1)        Such Guarantor and each ERISA Affiliate have operated and administered each Plan in compliance with all applicable laws except for such instances of noncompliance as have not resulted in and would not reasonably be expected to result in a Material Adverse Effect.  Neither such Guarantor nor any ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans (as defined in Section 3 of ERISA) with respect to any Plan, other than for claims for benefits and funding obligations in the ordinary course, and no event, transaction or condition has occurred or exists with respect to any Plan that would reasonably be expected to result in the incurrence of any such liability under Title I or IV of ERISA or the penalty or excise tax provisions of the Code by such Guarantor or any ERISA Affiliate, or in the imposition of any Lien under Section 430 of the Code or Section 4068 of ERISA on any of the rights, properties or assets of such Guarantor or any ERISA Affiliate,  other than any such liabilities or Liens as would not, individually or in the aggregate, be reasonably expected to result in a Material Adverse Effect.
 
(2)         The present value of the aggregate benefit liabilities under each of the Plans which are subject to Title IV of ERISA (other than Multiemployer Plans), determined as of the end of such Plan’s most recently ended plan year on the basis of the actuarial assumptions specified for funding purposes in such Plan’s most recent actuarial valuation report, did not exceed the aggregate current value of the assets of such Plans allocable to such benefit liabilities by more than $25,000,000.  The term “benefit liabilities” has the meaning specified in Section 4001 of ERISA and the terms “current value” and “present value” have the meanings specified in Section 3 of ERISA.
 
(3)        Such Guarantor and its ERISA Affiliates have not incurred withdrawal liabilities under Section 4201 or 4204 of ERISA (and are not subject to contingent withdrawal liabilities under Section 4204) in respect of Multiemployer Plans that, individually or in the aggregate, are reasonably expected to result in a Material Adverse Effect.
 
(4)         The accumulated post-retirement benefit obligation (determined as of the last day of the Company’s most recently ended fiscal year in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 715-60, without regard to liabilities attributable to continuation coverage mandated by Section 4980B of the Code) of such Guarantor, the Restricted Subsidiaries and New Jersey Natural Gas is not reasonably expected to result in a Material Adverse Effect.
 
(5)        The execution and delivery of this Guaranty will not involve any transaction that is subject to the prohibitions of Section 406(a)(1)(A)-(D) of ERISA or in connection with which a tax could be imposed pursuant to Section 4975(c)(1)(A)-(D) of the Code.  The representation by such Guarantor in the first sentence of this Section 5(j)(5) is made in reliance upon and subject to the accuracy of each Holder’s representation in Section 6.2 of the Note Purchase Agreement as to the source of the funds to be used to pay the purchase price of the Notes to be purchased by such Holder.
 
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(k)        Neither such Guarantor nor any of its subsidiaries is an “investment company” registered or required to be registered under the Investment Company Act of 1940 or an “affiliated person” of an “investment company” or an “affiliated person” of such “affiliated person” or under the “control” of an “investment company” as such terms are defined in the Investment Company Act of 1940, as amended, and shall not become such an “investment company” or such an “affiliated person” or under such “control.”  Neither such Guarantor nor any of its subsidiaries is a “holding company” or a “subsidiary company” of a “holding company,” or an “affiliate” of a “holding company” or of a “subsidiary company” of a “holding company” within the meaning of the Public Utility Holding Company Act of 2005, as amended.  Based upon the immediately preceding sentence, such Guarantor is not subject to regulation under the Public Utility Holding Company Act of 2005, as amended.  Neither such Guarantor nor any of its subsidiaries is subject to the ICC Termination Act of 1995, as amended, or the Federal Power Act, as amended.  Neither such Guarantor nor any of its subsidiaries is subject to any Federal or state statute or regulation limiting its ability to incur Debt.
 
(l)         Except as otherwise disclosed in Schedule 5.8 to the Note Purchase Agreement or otherwise disclosed in writing to the Holders, neither such Guarantor nor any of its subsidiaries which are Restricted Subsidiaries has actual knowledge of any claim or has received any written notice of any claim, and no proceeding has been instituted raising any claim against such Guarantor or any of its subsidiaries which are Restricted Subsidiaries or any of their respective real properties now or formerly owned, leased or operated by any of them or other assets, alleging any damage to the environment or violation of any Environmental Laws, except, in each case, such as would not reasonably be expected to result in a Material Adverse Effect.  Except as otherwise disclosed in Schedule 5.8 to the Note Purchase Agreement or otherwise disclosed in writing to the Holders:
 
(1)         neither such Guarantor nor any of its subsidiaries which are Restricted Subsidiaries has knowledge of any facts which would give rise to any claim, public or private, of violation of Environmental Laws or damage to the environment emanating from, occurring on or in any way related to real properties now or formerly owned, leased or operated by any of them or to other assets or their use, except, in each case, such as would not reasonably be expected to result in a Material Adverse Effect;
 
(2)         neither such Guarantor nor any of its subsidiaries which are Restricted Subsidiaries has stored any Hazardous Materials on real properties now or formerly owned, leased or operated by any of them or has disposed of any Hazardous Materials in a manner contrary to any Environmental Laws in each case in any manner that would reasonably be expected to result in a Material Adverse Effect; and
 
(3)          all buildings on all real properties now owned or operated by the Guarantor or any of its subsidiaries are in compliance with applicable Environmental Laws, except where failure to comply would not reasonably be expected to result in a Material Adverse Effect.
 
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(m)        Such Guarantor is solvent, has capital not unreasonably small in relation to its business or any contemplated or undertaken transaction and has assets having a value both at fair valuation and at present fair salable value greater than the amount required to pay its debts as they become due and greater than the amount that will be required to pay its probable liability on its existing debts as they become absolute and matured.  Such Guarantor does not intend to incur, or believe or should have believed that it will incur, debts beyond its ability to pay such debts as they become due.  Such Guarantor will not be rendered insolvent by the execution and delivery of, and performance of its obligations under, this Guaranty.  Such Guarantor does not intend to hinder, delay or defraud its creditors by or through the execution and delivery of, or performance of its obligations under, this Guaranty.
 
(n)          The obligations of such Guarantor under this Guaranty rank at least pari passu in right of payment with all other unsecured Senior Debt of such Guarantor, including without limitation, all unsecured Senior Debt of such Guarantor described in Schedule 5.15 to the Note Purchase Agreement.
 
Section 6.          Amendments, Waivers and Consents.
 
(a)          This Guaranty may be amended, and the observance of any term hereof may be waived (either retroactively or prospectively), with (and only with) the written consent of each Guarantor and the Required Holders, except that (1) no amendment or waiver of any of the provisions of Sections 3, 4 or 5, or any defined term (as it is used therein), will be effective as to any Holder unless consented to by such Holder in writing, and (2) no such amendment or waiver may, without the written consent of each Holder, (i) change the percentage of the principal amount of the Notes the Holders of which are required to consent to any such amendment or waiver or (ii) amend Section 2 or this Section 6.
 
(b)         The Guarantors will provide each Holder (irrespective of the amount of Notes then owned by it) with sufficient information, sufficiently far in advance of the date a decision is required, to enable such Holder to make an informed and considered decision with respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof.  The Guarantors will deliver executed or true and correct copies of each amendment, waiver or consent effected pursuant to the provisions of this Section 6 to each Holder promptly following the date on which it is executed and delivered by, or receives the consent or approval of, the requisite Holders.
 
(c)         No Guarantor will directly or indirectly pay or cause to be paid any remuneration, whether by way of fee or otherwise, or grant any security, to any Holder as consideration for or as an inducement to the entering into by such Holder of any waiver or amendment of any of the terms and provisions hereof unless such remuneration is concurrently paid, or security is concurrently granted, on the same terms, ratably to each Holder even if such Holder did not consent to such waiver or amendment.
 
(d)         Any consent made pursuant to this Section 6 by a Holder that has transferred a portion or has agreed to transfer all or a portion of its Notes to such Guarantor, any subsidiary or any affiliate of such Guarantor and has provided or has agreed to provide such written consent as a condition to such transfer shall be void and of no force and effect except solely as to such Holder, and any amendment effected or waivers granted or to be effected or granted that would not have been or be so effected or granted but for such consent (and the consents of all other Holders that were acquired under the same or similar conditions) shall be void and of no force and effect except solely as to such Holder.
 
E-2-12
(e)        Any amendment or waiver consented to as provided in this Section 6 applies equally to all Holders of Notes affected thereby and is binding upon them and upon each future holder and upon the Guarantors.  No such amendment or waiver will extend to or affect any obligation, covenant or agreement not expressly amended or waived or impair any right consequent thereon.  No course of dealing between the Guarantors and any Holder nor any delay in exercising any rights hereunder shall operate as a waiver of any rights of any Holder.  As used herein, the term “this Guaranty” and references thereto shall mean this Guaranty as it may from time to time be amended or supplemented.
 
(f)         Solely for the purpose of determining whether the Holders of the requisite percentage of the aggregate principal amount of Notes then outstanding approved or consented to any amendment, waiver or consent to be given under this Guaranty, Notes directly or indirectly owned by any Guarantor or any subsidiaries or Affiliates of any Guarantor shall be deemed not to be outstanding.
 
Section 7.          Notices.
 
All notices and communications provided for hereunder shall be in writing and sent (a) by telefacsimile if the sender on the same day sends a confirming copy of such notice by a recognized overnight delivery service (charges prepaid), (b) by registered or certified mail with return receipt requested (postage prepaid) or (c) by a recognized overnight delivery service (charges prepaid).  Any such notice must be sent:
 
(1)       if to a Purchaser or its nominee, to such Purchaser or its nominee at the address specified for such communications in Schedule A to the Note Purchase Agreement to which such Purchaser is a party, or at such other address as such Purchaser or its nominee shall have specified to any Guarantor in writing,
 
(2)       if to any other Holder, to such Holder at such address as such Holder shall have specified to any Guarantor in writing, or
 
(3)         if to any Guarantor, to such Guarantor c/o the Company at its address set forth at the beginning of the Note Purchase Agreement to the attention of the Chief Financial Officer of the Company, or at such other address as such Guarantor shall have specified to the Holders in writing.
 
Notices under this Section 7 will be deemed given only when actually received.

E-2-13
Section 8.          Miscellaneous.
 
(a)          No remedy herein conferred upon or reserved to any Holder is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Guaranty now or hereafter existing at law or in equity.  No delay or omission to exercise any right or power accruing upon any default, omission or failure of performance hereunder shall impair any such right or power or shall be construed to be a waiver thereof but any such right or power may be exercised from time to time and as often as may be deemed expedient.  In order to entitle any Holder to exercise any remedy reserved to it under this Guaranty, it shall not be necessary for such Holder to physically produce its Note in any proceedings instituted by it or to give any notice, other than such notice as may be herein expressly required.
 
(b)          The Guarantors will pay all sums becoming due under this Guaranty by the method and at the address specified for such purpose for such Holder, in the case of a Holder that is a Purchaser, on Schedule A to the Note Purchase Agreement to which such Purchaser is a party or by such other method or at such other address as any Holder shall have from time to time specified to the Guarantors or the Company on behalf of the Guarantors in writing for such purpose, without the presentation or surrender of this Guaranty or any Note.
 
(c)         Any provision of this Guaranty 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 any such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by law) not invalidate or render unenforceable such provision in any other jurisdiction.
 
(d)        If the whole or any part of this Guaranty shall be now or hereafter become unenforceable against any one or more of the Guarantors for any reason whatsoever or if it is not executed by any one or more of the Guarantors, this Guaranty shall nevertheless be and remain fully binding upon and enforceable against each other Guarantor as if it had been made and delivered only by such other Guarantors.
 
(e)         This Guaranty shall be binding upon each Guarantor and its successors and assigns and shall inure to the benefit of each Holder and its successors and assigns so long as its Notes remain outstanding and unpaid.
 
(f)        This Guaranty may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument.  Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto.  The parties agree to electronic contracting and signatures with respect to this Guaranty and any other agreement and instrument hereunder.  Delivery of an electronic signature to, or a signed copy of, this Guaranty and any other agreement and instrument hereunder by facsimile, email or other electronic transmission shall be fully binding on the parties to the same extent as the delivery of the signed originals and shall be admissible into evidence for all purposes.  Notwithstanding the foregoing, if any Purchaser shall request manually signed counterpart signatures this Guaranty and any other agreement and instrument hereunder, the Guarantors hereby agree to use their reasonable endeavors to provide such manually signed signature pages as soon as reasonably practicable.
 
(g)          This Guaranty shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would require the application of the laws of a jurisdiction other than such State.
 
E-2-14
(h)        Each Guarantor hereby irrevocably submits to the non-exclusive jurisdiction of any State of New York court or any Federal court located in New York County, New York, New York for the adjudication of any matter arising out of or relating to this Guaranty, and consents to the service of all writs, process and summonses by registered or certified mail out of any such court or by service of process on such Guarantor at its address to which notices are to be given pursuant to Section 7 hereof and hereby waives any requirement to have an agent for service of process in the State of New York.  Nothing contained herein shall affect the right of any Holder to serve legal process in any other manner or to bring any proceeding hereunder in any jurisdiction where such Guarantor may be amenable to suit.  Each Guarantor hereby irrevocably waives any objection to any suit, action or proceeding in any New York court or Federal court located in New York County, New York, New York on the grounds of venue and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.
 
(i)        Each Guarantor hereby waives trial by jury in any action brought on or with respect to this Guaranty or any other document executed in connection herewith.
 
[Remainder of Page Left Intentionally Blank]
 
E-2-15
          IN WITNESS WHEREOF, the undersigned has caused this Guaranty to be duly executed by an authorized representative as of the date first written above.
 
 
NJR Retail Holdings Corporation
     
 
By:
  
 
Name:
Roberto F. Bel
 
Title:
Senior Vice President, Chief Financial Officer, Treasurer and Secretary
     
 
NJR Retail Company
     
 
By:
  
 
Name:
Roberto F. Bel
 
Title:
Senior Vice President, Chief Financial Officer, Treasurer and Secretary
     
 
NJR Home Services Company
     
 
By:
  
 
Name:
Roberto F. Bel
 
Title:
Senior Vice President, Chief Financial Officer, Treasurer and Secretary
   
 
NJR Plumbing Services, Inc.
     
 
By:
  
 
Name:
Roberto F. Bel
 
Title:
Senior Vice President, Chief Financial Officer, Treasurer and Secretary
   
 
NJR Service Corporation
     
 
By:
  
 
Name:
Roberto F. Bel
 
Title:
Senior Vice President and Chief Financial Officer

E-2-16
 
Phoenix Fuel Management Company
     
 
By:
  
 
Name:
Roberto F. Bel
 
Title:
Senior Vice President, Chief Financial Officer, Treasurer and Secretary
     
 
NJR Energy Investments Corporation
     
 
By:
  
 
Name:
Roberto F. Bel
 
Title:
Senior Vice President and Chief Financial Officer
     
 
NJR Clean Energy Ventures Corporation
     
 
By:
  
 
Name:
Roberto F. Bel
 
Title:
Senior Vice President and Chief Financial Officer
     
 
Commercial Realty and Resources Corp.
     
 
By:
  
 
Name:
Roberto F. Bel
 
Title:
President, Chief Financial Officer, Treasurer and Secretary
     
 
NJR Midstream Holdings Corporation
     
 
By:
  
 
Name:
Roberto F. Bel
 
Title:
Senior Vice President and Chief Financial Officer

E-2-17
 
NJR Energy Services Company
     
 
By:
  
 
Name:
Roberto F. Bel
 
Title:
Senior Vice President and Chief Financial Officer
     
 
NJR Clean Energy Ventures II Corporation
     
 
By:
  
 
Name:
Roberto F. Bel
 
Title:
Senior Vice President and Chief Financial Officer
     
 
NJR Storage Holdings Company
     
 
By:
  
 
Name:
Roberto F. Bel
 
Title:
Senior Vice President and Chief Financial Officer
     
 
NJR Clean Energy Ventures III Corporation
     
 
By:
  
 
Name:
Roberto F. Bel
 
Title:
Senior Vice President and Chief Financial Officer
     
 
Bernards Solar, LLC
     
 
By:
NJR Clean Energy Ventures II Corporation, its Sole Member
     
 
By:
  
 
Name:
Roberto F. Bel
 
Title:
Senior Vice President and Chief Financial Officer

E-2-18
Guaranty Supplement
 
To the Holders (as defined in the hereinafter
defined Guaranty Agreement)
 
Ladies and Gentlemen:
 
Whereas, New Jersey Resources Corporation, a corporation organized under the laws of the State of New Jersey (the “Company”), in order to refinance existing indebtedness and provide funding for general corporate purposes, has issued to the Purchasers $50,000,000 aggregate principal amount of its 6.14% Senior Notes, Series 2022B, due December 15, 2032 (the “Notes”), pursuant to a Note Purchase Agreement dated as of October 24, 2022 (“Note Purchase Agreement”) between the Company and the respective Purchasers named therein.  Capitalized terms used herein shall have the meanings set forth in the hereinafter defined Guaranty Agreement unless herein defined or the context shall otherwise require.
 
Whereas, as a condition precedent to their purchase of the Notes, the Purchasers required that from time to time certain Subsidiaries of the Company enter into that certain Subsidiary Guaranty Agreement dated as of October 24, 2022 attached hereto as Exhibit 1 (as amended, supplemented, restated or otherwise modified from time to time, the “Guaranty Agreement”) as security for the Notes.
 
Pursuant to Section 9.7(a) of the Note Purchase Agreement, the Company has agreed to cause the undersigned, [____________], a [corporation] organized under the laws of [______________] (the “Additional Guarantor”), to join in the Guaranty Agreement.  In accordance with the requirements of the Guaranty Agreement, the Additional Guarantor desires to amend the definition of Guarantor (as the same may have been heretofore amended) set forth in the Guaranty Agreement attached hereto so that at all times from and after the date hereof, the Additional Guarantor shall be jointly and severally liable as set forth in the Guaranty Agreement for the obligations of the Company under the Notes and the Note Purchase Agreement to the extent and in the manner set forth in the Guaranty Agreement.
 
The undersigned is the duly elected [____________] of the Additional Guarantor, a Subsidiary of the Company, and is duly authorized to execute and deliver this Guaranty Supplement to each of you.  The execution by the undersigned of this Guaranty Supplement shall evidence such Additional Guarantor’s consent to and acknowledgment and approval of the terms set forth herein and in the Guaranty Agreement and its agreement to be bound by the covenants, terms and provisions of the Guaranty Agreement as a Guarantor thereunder and by such execution the Additional Guarantor shall be deemed to have made in favor of the Holders the representations and warranties set forth in Section 5 of the Guaranty Agreement.
 
E-2-19
Upon execution of this Guaranty Supplement, the Guaranty Agreement shall be deemed to be amended as set forth above.  Except as amended herein, the terms and provisions of the Guaranty Agreement are hereby ratified, confirmed and approved in all respects.
 
Any and all notices, requests, certificates and other instruments (including the Notes) may refer to the Guaranty Agreement without making specific reference to this Guaranty Supplement, but nevertheless all such references shall be deemed to include this Guaranty Supplement unless the context shall otherwise require.
 
Dated:  _________________, 20__.
  
   
 
[Name of Additional Guarantor]
     
 
By:
  
 
Its:
  

E-2-20
Exhibit 1 to Guaranty Supplement

Guaranty Agreement

[See attached]


E-2-21
Exhibit 4.3

MORTGAGE

NEW JERSEY NATURAL GAS COMPANY

To

U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
As Trustee


TWELFTH SUPPLEMENTAL INDENTURE

Dated as of October 1, 2022

Supplemental to Amended and Restated Indenture of Mortgage,
Deed of Trust and Security Agreement Dated as of September 1, 2014,
As Supplemented and Amended


Prepared by:
 Eric A. Koontz Record and Return to: Richard Reich, Esq.

Troutman Pepper Hamilton Sanders LLP

NJR Service Corporation

600 Peachtree Street, NE, Suite 3000
1415 Wyckoff Road

Atlanta, GA 30308
Wall, New Jersey 07719

1
MORTGAGE
 
TWELFTH SUPPLEMENTAL INDENTURE, dated as of October 1, 2022, between NEW JERSEY NATURAL GAS COMPANY, a corporation organized and existing under the laws of the State of New Jersey (hereinafter called the “Company”), having its principal office at 1415 Wyckoff Road, Wall, New Jersey, and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as successor in interest to U.S. BANK NATIONAL ASSOCIATION, a national banking association (hereinafter called the “Trustee”), having a principal office at 333 Thornall Street, 4th Floor, Edison, New Jersey 08837, as Trustee under the Amended and Restated Indenture of Mortgage, Deed of Trust and Security Agreement hereinafter mentioned.
 
WHEREAS, the Company has heretofore executed and delivered to the Trustee its Amended and Restated Indenture of Mortgage, Deed of Trust and Security Agreement, dated as of September 1, 2014 (the “Amended and Restated Indenture” and, as originally executed or as the same may from time to time be supplemented, modified or amended by any supplemental indenture entered into pursuant to the provisions thereof, the “Indenture”), to secure the payment of the principal of and the interest and premium (if any) on all Bonds at any time issued and outstanding thereunder, and to declare the terms and conditions upon which Bonds are to be issued thereunder; and
 
WHEREAS, the Amended and Restated Indenture completely restated and amended the Indenture of Mortgage and Deed of Trust, dated April 1, 1952, as heretofore supplemented and amended (the “Original Indenture”) without any interruption of the Lien of the Original Indenture; and
 
WHEREAS, Bonds in the aggregate principal amount of $10,300,000, originally issued under and in accordance with the terms of the Original Indenture, as supplemented and amended, as a series designated “First Mortgage Bonds, Series II due 2023,” herein sometimes called “2023 Series II Bonds,” were designated as Existing Bonds in Section 3.01 of the Indenture, provided that such 2023 Series II Bonds have since been retired by the Company and replaced with the 2042 Series WW Bonds (as hereinafter defined); and
 
WHEREAS, Bonds in the aggregate principal amount of $10,500,000, originally issued under and in accordance with the terms of the Original Indenture, as supplemented and amended, as a series designated “First Mortgage Bonds, Series JJ due 2024,” herein sometimes called “2024 Series JJ Bonds,” were designated as Existing Bonds in Section 3.02 of the Indenture, provided that such 2024 Series JJ Bonds have since been retired by the Company and replaced with the 2038 Series XX Bonds (as hereinafter defined); and

2
WHEREAS, Bonds in the aggregate principal amount of $15,000,000, originally issued under and in accordance with the terms of the Original Indenture, as supplemented and amended, as a series designated “First Mortgage Bonds, Series KK due 2040,” herein sometimes called “2040 Series KK Bonds,” were designated as Existing Bonds in Section 3.03 of the Indenture, provided that such 2040 Series KK Bonds have since been retired by the Company and replaced with the 2059 Series YY Bonds (as hereinafter defined); and
 
WHEREAS, Bonds in the aggregate principal amount of $125,000,000, originally issued under and in accordance with the terms of the Original Indenture, as supplemented and amended, as a series designated “First Mortgage Bonds, Series LL due 2018,” herein sometimes called “2018 Series LL Bonds,” were designated as Existing Bonds in Section 3.04 of the Indenture, which 2018 Series LL Bonds have since been paid at maturity by the Company; and
 
WHEREAS, Bonds in the aggregate principal amount of $9,545,000, originally issued under and in accordance with the terms of the Original Indenture, as supplemented and amended, as a series designated “First Mortgage Bonds, Series MM due 2027,” herein sometimes called “2027 Series MM Bonds,” were designated as Existing Bonds in Section 3.05 of the Indenture, provided that such 2027 Series MM Bonds have since been retired by the Company and replaced with the 2039 Series BBB Bonds (as hereinafter defined); and
 
WHEREAS, Bonds in the aggregate principal amount of $41,000,000, originally issued under and in accordance with the terms of the Original Indenture, as supplemented and amended, as a series designated “First Mortgage Bonds, Series NN due 2035,” herein sometimes called “2035 Series NN Bonds,” were designated as Existing Bonds in Section 3.06 of the Indenture, provided that such 2035 Series NN Bonds have since been retired by the Company and replaced with the 2043 Series CCC Bonds (as hereinafter defined); and
 
WHEREAS, Bonds in the aggregate principal amount of $46,500,000, originally issued under and in accordance with the terms of the Original Indenture, as supplemented and amended, as a series designated “First Mortgage Bonds, Series OO due 2041,” herein sometimes called “2041 Series OO Bonds,” have been designated as Existing Bonds in Section 3.07 of the Indenture and are outstanding at the date hereof and secured by the Indenture; and

3
WHEREAS, Bonds in the aggregate principal amount of $50,000,000, originally issued under and in accordance with the terms of the Original Indenture, as supplemented and amended, as a series designated “First Mortgage Bonds, Series PP due 2028,” herein sometimes called “2028 Series PP Bonds,” have been designated as Existing Bonds in Section 3.08 of the Indenture and are outstanding at the date hereof and secured by the Indenture; and
 
WHEREAS, Bonds in the aggregate principal amount of $70,000,000, originally issued under and in accordance with the terms of the Original Indenture, as supplemented and amended, as a series designated “First Mortgage Bonds, Series QQ due 2024,” herein sometimes called “2024 Series QQ Bonds,” have been designated as Existing Bonds in Section 3.09 of the Indenture and are outstanding at the date hereof and secured by the Indenture; and
 
WHEREAS, Bonds in the aggregate principal amount of $55,000,000, originally issued under and in accordance with the terms of the Original Indenture, as supplemented and amended, as a series designated “First Mortgage Bonds, Series RR due 2044,” herein sometimes called “2044 Series RR Bonds,” have been designated as Existing Bonds in Section 3.10 of the Indenture and are outstanding at the date hereof and secured by the Indenture; and
 
WHEREAS, the Amended and Restated Indenture provides that, subject to certain exceptions not presently relevant, such changes in or additions to the provisions of the Indenture (terms used herein having the meanings assigned thereto in the Amended and Restated Indenture except as herein expressly modified) may be made to add to the covenants and agreements of the Company in the Indenture contained other covenants and agreements thereafter to be observed by the Company; and to provide for the creation of any series of Bonds, designating the series to be created and specifying the form and provisions of the Bonds of such series as in the Indenture provided or permitted; and
 
WHEREAS, the Indenture further provides that the Company and the Trustee may enter into indentures supplemental to the Indenture to assign, convey, mortgage, pledge, transfer and set over unto the Trustee and to subject to the lien of the Indenture additional property of the Company; and
 
WHEREAS, pursuant to the Amended and Restated Indenture as amended by the First Supplemental Indenture, dated as of April 1, 2015, between the Company and the Trustee, the Company determined to amend certain provisions of the Amended and Restated Indenture and to create an eleventh and a twelfth series of Bonds under the Indenture, known as (i) “First Mortgage Bonds, Series SS due 2025,” herein sometimes called “2025 Series SS Bonds,” and (ii) “First Mortgage Bonds, Series TT due 2045,” herein sometimes called “2045 Series TT Bonds,” respectively; and

4
WHEREAS, pursuant to the Amended and Restated Indenture as amended by the Second Supplemental Indenture, dated as of June 21, 2016, between the Company and the Trustee, the Company determined to amend certain provisions of the Amended and Restated Indenture and to create a thirteenth series of Bonds under the Indenture, known as “First Mortgage Bonds, Series UU due 2046,” herein sometimes called “2046 Series UU Bonds”; and
 
WHEREAS, pursuant to the Amended and Restated Indenture as amended by the Third Supplemental Indenture, dated as of May 1, 2018, between the Company and the Trustee, the Company determined to amend certain provisions of the Amended and Restated Indenture and to create a fourteenth series of Bonds under the Indenture, known as “First Mortgage Bonds, Series VV due 2048,” herein sometimes called “2048 Series VV Bonds”; and
 
WHEREAS, pursuant to the Amended and Restated Indenture as amended by the Fourth Supplemental Indenture, dated as of April 1, 2019, between the Company and the Trustee, the Company determined to amend certain provisions of the Amended and Restated Indenture and to create a fifteenth, a sixteenth and a seventeenth series of Bonds under the Indenture, known as (i) “First Mortgage Bonds, Series WW due 2042,” herein sometimes called “2042 Series WW Bonds,” (ii) “First Mortgage Bonds, Series XX due 2038,” herein sometimes called “2038 Series XX Bonds,” and (iii) (ii) “First Mortgage Bonds, Series YY due 2059,” herein sometimes called “2059 Series YY Bonds,” respectively; and
 
WHEREAS, pursuant to the Amended and Restated Indenture as amended by the Fifth Supplemental Indenture, dated as of July 1, 2019, between the Company and the Trustee, the Company determined to amend certain provisions of the Amended and Restated Indenture and to create an eighteenth and nineteenth series of Bonds under the Indenture, known as (i) “First Mortgage Bonds, Series ZZ due 2049,” herein sometimes called “2049 Series ZZ Bonds,” and (ii) “First Mortgage Bonds, Series AAA due 2059,” herein sometimes called “2059 Series AAA Bonds,” respectively; and
 
WHEREAS, pursuant to the Amended and Restated Indenture as amended by the Sixth Supplemental Indenture, dated as of August 1, 2019, between the Company and the Trustee, the Company determined to amend certain provisions of the Amended and Restated Indenture and to create a twentieth and twenty-first series of Bonds under the Indenture, known as (i) “First Mortgage Bonds, Series BBB due 2039,” herein sometimes called “2039 Series BBB Bonds” (to replace the 2027 Series MM Bonds) and (ii) “First Mortgage Bonds, Series CCC due 2043,” herein sometimes called “2043 Series CCC Bonds” (to replace the 2035 Series NN Bonds), respectively; and

5
WHEREAS, pursuant to the Amended and Restated Indenture as amended by the Seventh Supplemental Indenture, dated as of June 1, 2020, between the Company and the Trustee, the Company determined to amend certain provisions of the Amended and Restated Indenture and to create a twenty-second series of Bonds under the Indenture, known as “First Mortgage Bonds, Series DDD due 2050,” herein sometimes called “2050 Series DDD Bonds”; and
 
WHEREAS, pursuant to the Amended and Restated Indenture as amended by the Eighth Supplemental Indenture, dated as of July 1, 2020, between the Company and the Trustee, the Company determined to amend certain provisions of the Amended and Restated Indenture and to create a twenty-third and twenty-fourth series of Bonds under the Indenture, known as (i) “First Mortgage Bonds, Series EEE due 2050,” herein sometimes called “2050 Series EEE Bonds” and (ii) “First Mortgage Bonds, Series FFF due 2060,” herein sometimes called “2060 Series FFF Bonds,” respectively; and
 
WHEREAS, pursuant to the Amended and Restated Indenture as amended by the Ninth Supplemental Indenture, dated as of September 1, 2020, between the Company and the Trustee, the Company determined to amend certain provisions of the Amended and Restated Indenture and to create a twenty-fifth and twenty-sixth series of Bonds under the Indenture, known as (i) “First Mortgage Bonds, Series GGG due 2050,” herein sometimes called “2050 Series GGG Bonds” and (ii) “First Mortgage Bonds, Series HHH due 2060,” herein sometimes called “2060 Series HHH Bonds,” respectively; and
 
WHEREAS, pursuant to the Amended and Restated Indenture as amended by the Tenth Supplemental Indenture, dated as of October 1, 2021, between the Company and the Trustee, the Company determined to amend certain provisions of the Amended and Restated Indenture and to create a twenty-seventh and twenty-eighth series of Bonds under the Indenture, known as (i) “First Mortgage Bonds, Series III due 2051,” herein sometimes called “2051 Series III Bonds” and (ii) “First Mortgage Bonds, Series JJJ due 2061,” herein sometimes called “2061 Series JJJ Bonds,” respectively; and
 
WHEREAS, pursuant to the Amended and Restated Indenture as amended by the Eleventh Supplemental Indenture, dated as of May 1, 2022, between the Company and the Trustee, the Company determined to amend certain provisions of the Amended and Restated Indenture and to create a twenty-ninth and thirtieth series of Bonds under the Indenture, known as (i) “First Mortgage Bonds, Series LLL due 2037,” herein sometimes called “2037 Series LLL Bonds” and (ii) “First Mortgage Bonds, Series MMM due 2052,” herein sometimes called “2052 Series MMM Bonds,” respectively; and

6
WHEREAS, (i) the 2025 Series SS Bonds were issued in and are currently outstanding under the Indenture in the aggregate principal amount of $50,000,000, (ii) the 2045 Series TT Bonds were issued in and are currently outstanding under the Indenture in the aggregate principal amount of $100,000,000, (iii) the 2046 Series UU Bonds were issued in and are currently outstanding under the Indenture in the aggregate principal amount of $125,000,000, (iv) the 2048 Series VV Bonds were issued in and are currently outstanding under the Indenture in the aggregate principal amount of $125,000,000, (v) the 2042 Series WW Bonds were issued in and are currently outstanding under the Indenture in the aggregate principal amount of $10,300,000, (vi) the 2038 Series XX Bonds were issued in and are currently outstanding under the Indenture in the aggregate principal amount of $10,500,000, (vii) the 2059 Series YY Bonds were issued in and are currently outstanding under the Indenture in the aggregate principal amount of $15,000,000, (viii) the 2049 Series ZZ Bonds were issued in and are currently outstanding under the Indenture in the aggregate principal amount of $100,000,000, (ix) the 2059 Series AAA Bonds were issued in and are currently outstanding under the Indenture in the aggregate principal amount of $85,000,000, (x) the 2039 Series BBB Bonds were issued in and are currently outstanding under the Indenture in the aggregate principal amount of $9,545,000, (xi) the 2043 Series CCC Bonds were issued in and are currently outstanding under the Indenture in the aggregate principal amount of $41,000,000, (xii) the 2050 Series DDD Bonds were issued in and are currently outstanding under the Indenture in the aggregate principal amount of $50,000,000, (xiii) the 2050 Series EEE Bonds were issued in and are currently outstanding under the Indenture in the aggregate principal amount of $50,000,000, (xiv) the 2060 Series FFF Bonds were issued in and are currently outstanding under the Indenture in the aggregate principal amount of $25,000,000, (xv) the 2050 Series GGG Bonds were issued in and are currently outstanding under the Indenture in the aggregate principal amount of $25,000,000, (xvi) the 2060 Series HHH Bonds were issued in and are currently outstanding under the Indenture in the aggregate principal amount of $50,000,000, (xvii) the 2051 Series III Bonds were issued in and are currently outstanding under the Indenture in the aggregate principal amount of $50,000,000, (xviii) the 2061 Series JJJ Bonds were issued in and are currently outstanding under the Indenture in the aggregate principal amount of $50,000,000, (xix) the 2037 Series LLL Bonds were issued in and are currently outstanding under the Indenture in the aggregate principal amount of $50,000,000 and (xx) the 2052 Series MMM Bonds were issued in and are currently outstanding under the Indenture in the aggregate principal amount of $50,000,000; and
 
WHEREAS, the Company will enter into a Note Purchase Agreement dated as of October 24, 2022 (the “Note Purchase Agreement”) with the Purchasers identified in Schedule A attached thereto, pursuant to which the Company will issue its senior notes designated “5.47% Senior Notes, Series 2022C, due 2052” in the aggregate principal amount of $125,000,000 (the “Series 2022C Senior Notes due 2052”); and

7
WHEREAS, the Company has duly determined to create a thirty-first series of Bonds under the Indenture, to be known as “First Mortgage Bonds, Series NNN due 2052” herein sometimes called “2052 Series NNN Bonds,” to be delivered and pledged to U.S. Bank Trust Company, National Association, as successor in interest to U.S. Bank National Association, as collateral agent (the “Collateral Agent”) pursuant to the Note Purchase Agreement for the benefit and security of the holders of the Series 2022C Senior Notes due 2052, all as herein provided and as provided in the Note Purchase Agreement, and to add to the covenants and agreements contained in the Indenture, the covenants and agreements hereinafter set forth; and 
 
WHEREAS, the Company, in the exercise of the powers and authority conferred upon and reserved to it under the provisions of the Indenture and pursuant to appropriate resolutions of its Board of Directors, has duly resolved and determined to make, execute and deliver to the Trustee a Twelfth Supplemental Indenture in the form hereof for the purposes herein provided; and
 
WHEREAS, all conditions and requirements necessary to make this Twelfth Supplemental Indenture a valid, binding and legal instrument have been done, performed and fulfilled and the execution and delivery hereof have been in all respects duly authorized.
 
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
 
That NEW JERSEY NATURAL GAS COMPANY, by way of further assurance and in consideration of the premises and of the acceptance by the Trustee of the trusts hereby created and of One Dollar to it duly paid by the Trustee at or before the ensealing and delivery of these presents, the receipt whereof is hereby acknowledged, and in order to secure the payment of principal of and any premium which may be due and payable on and the interest on all Bonds at any time issued and outstanding under the Indenture according to their tenor and effect, and the performance and observance by the Company of all the covenants and conditions herein and therein contained, has granted, bargained, sold, warranted, aliened, remised, released, conveyed, assigned, transferred, mortgaged, pledged, set over and confirmed, and by these presents does grant, bargain, sell, warrant, alien, remise, release, convey, assign, transfer, mortgage, pledge, set over and confirm, unto the Trustee, and to its successors in the trust, and to it and its assigns forever, and has granted and does hereby grant thereunto a security interest in, all of the property, real, personal and mixed, now owned by the Company and situated in the Counties of Burlington, Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset and Sussex in the State of New Jersey, or wherever situate (except Excepted Property and property released from the lien of the Indenture by the terms of the Indenture) and also all of the property, real, personal and mixed, hereafter acquired by the Company wherever situate (except Excepted Property and property released from the lien of the Indenture by the terms of the Indenture), including both as to property now owned and property hereafter acquired, without in any way limiting or impairing the enumeration of the same, the scope and intent of the foregoing or of any general or specific description contained in the Indenture, the following:

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I.
FRANCHISES
 
All and singular, the franchises, grants, permits, immunities, privileges and rights of the Company owned and held by it at the date of the execution hereof or hereafter acquired for the construction, maintenance, and operation of the gas plants and systems now or hereafter subject to the lien hereof, as well as all certificates, franchises, grants, permits, immunities, privileges, and rights of the Company used or useful in the operation of the property now or hereafter mortgaged hereunder, including all and singular the franchises, grants, permits, immunities, privileges, and rights of the Company granted by the governing authorities of any municipalities or other political subdivisions and all renewals, extensions and modifications of said certificates, franchises, grants, permits, privileges, arid rights or any of them.
 
II.
GAS DISTRIBUTION SYSTEMS AND RELATED PROPERTY
 
All gas generating plants, gas storage plants and gas manufacturing plants of the Company, all the buildings, erections, structures, generating and purifying apparatus, holders, engines, boilers, benches, retorts, tanks, instruments, appliances, apparatus, facilities, machinery, fixtures, and all other property used or provided for use in the generation, manufacturing and purifying of gas, together with the land on which the same are situated, and all other lands and easements, rights-of-way, permits, privileges, and sites forming a part of such plants or any of them or occupied, enjoyed or used in connection therewith.
 
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All gas distribution or gas transmission systems of the Company, all buildings, erections, structures, generating and purifying apparatus, holders, engines, boilers, benches, retorts, tanks, pipe lines, connections, service pipes, meters, conduits, tools, instruments, appliances, apparatus, facilities, machinery, fixtures, and all other property used or provided for use in the construction, maintenance, repair or operations of such distribution or transmission systems, together with all the certificates, rights, privileges, rights-of-way, franchises, licenses, easements, grants, liberties, immunities, permits of the Company, howsoever conferred or acquired, under, over, or upon any private property or any public streets or highways within as well as without the corporate limits of any municipal corporation.  Without limiting the generality of the foregoing, there are expressly included the gas distribution or gas transmission systems located in the Counties of Burlington, Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset and Sussex in the State of New Jersey, and in the following municipalities in said State and Counties: Aberdeen Township (formerly Matawan Township), Allenhurst Borough, City of Asbury Park, Atlantic Highlands Borough, Avon By the Sea Borough, Barnegat Light Borough, Barnegat Township (formerly named Union Township), Bay Head Borough, Beach Haven Borough, Beachwood Borough, Belmar Borough, Berkeley Township, Boonton Town, Boonton Township, Bradley Beach Borough, Brick Township, Brielle Borough, Colts Neck Township, Deal Borough, Denville Township, Dover Town, Dover Township, Eagleswood Township, East Brunswick Township, Eatontown Borough, Englishtown Borough, Fair Haven Borough, Farmingdale Borough, Franklin Township in Somerset County, Freehold Borough, Freehold Township, Hanover Township, Harvey Cedars Borough, Hazlet Township, Highlands Borough, Holmdel Township, Hopatcong Borough, Howell Township, Interlaken Borough, Island Heights Borough, Jackson Township, Jefferson Township, Keansburg Borough, Keyport Borough, Lacey Township, Lakehurst Borough, Lakewood Township, Lavallette Borough, Lincoln Park Borough, Little Egg Harbor Township, Little Silver Borough, Loch Arbour Village, Long Beach Township, Long Branch City, Manalapan Township, Manasquan Borough, Manchester Township, Mantoloking Borough, Marlboro Township, Matawan Borough, Middletown Township, Milltown Borough, Mine Hill Township, Monmouth Beach Borough, Monroe Township, Montville Township, Morris Plains Borough, Mount Arlington Borough, Mount Olive Township, Mountain Lakes Borough, Neptune City Borough, Neptune Township, Netcong Borough, New Brunswick City, North Brunswick Township, Ocean Township in Monmouth County, Ocean Township in Ocean County, Ocean Gate Borough, Oceanport Borough, Old Bridge Township (formerly named Madison Township), Parsippany-Troy Hills Township, Pine Beach Borough, Point Pleasant Borough, Point Pleasant Beach Borough, Randolph Township, Red Bank Borough, Rockaway Borough, Rockaway Township, Roxbury Township, Rumson Borough, Sayreville Borough, Sea Bright Borough, Sea Girt Borough, Seaside Heights Borough, Seaside Park Borough, Ship Bottom Borough, Shrewsbury Borough, Shrewsbury Township, South Belmar Borough, South Brunswick Township, South River Borough, South Toms River Borough, Spring Lake Borough, Spring Lake Heights Borough, Stafford Township, Surf City Borough, Tinton Falls Borough (formerly named New Shrewsbury Borough), Tuckerton Borough, Union Beach Borough, Union Township, Victory Gardens Borough, Wall Township, Washington Township in Burlington County, Washington Township in Morris County, West Long Branch Borough, West Milford Township and Wharton Borough.

III.
CONTRACTS

All of the Company’s right, title and interest in and under all contracts, licenses or leases for the purchase of gas, either in effect at the date of execution hereof or hereafter made and any extension or renewal thereof.
 
TOGETHER WITH ALL AND SINGULAR the tenements, hereditaments and appurtenances belonging or in anywise appertaining to the Trust Estate, or any part thereof, with the reversion or reversions, remainder and remainders, rents, issues, income and profits thereof, and all the right, title, interest and claim whatsoever, at law or in equity, which the Company now has or which it may hereafter acquire in and to the Trust Estate and every part and parcel thereof,

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TO HAVE AND TO HOLD the Trust Estate and all and singular the lands, properties, estates, rights, franchises, privileges and appurtenances hereby mortgaged, conveyed, pledged or assigned, or intended so to be, together with all the appurtenances thereto appertaining, unto the Trustee and its successors and assigns forever;
 
SUBJECT, HOWEVER, as to property hereby conveyed, to Permitted Encumbrances;
 
BUT IN TRUST, NEVERTHELESS, under and subject to the terms and conditions hereafter set forth, for the equal and proportionate use, benefit, security and protection of each and every person who may be or become the holders of the Bonds hereby secured without preference, priority or distinction as to the lien or otherwise of one Bond over or from the others by reason of priority in the issue or negotiation thereof, or by reason of the date of maturity thereof, or otherwise (except as any sinking, amortization, improvement, renewal or other analogous fund, established in accordance with the provisions of the Indenture, may afford additional security for the Bonds of any particular series), and for securing the observance and performance of all the terms, provisions and conditions of the Indenture.
 
THIS INDENTURE FURTHER WITNESSETH, that the Company has agreed and covenanted, and hereby does agree and covenant, with the Trustee and its successors and assigns and with the respective holders from time to time of the Bonds, or any thereof, as follows:

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ARTICLE I
 
CERTAIN AMENDMENTS OF INDENTURE
 
§ 1.1.    The Indenture be and it hereby is amended in the following respects, the section numbers specified below being the sections of the Indenture in which such amendments occur:
 
§ 1.02. The following definitions be and they hereby are added at the end of § 1.02:
 
“(rrrrr) “Twelfth Supplemental Indenture” shall mean the Twelfth Supplemental Indenture, dated as of October 1, 2022, supplemental to the Indenture.”

“(sssss) “2052 Series NNN Bond” shall mean one of the First Mortgage Bonds, Series NNN due 2052, issued hereunder.”
 
§ 2.11. The following be and it hereby is added at the end of § 2.11:
 
“No charge except for taxes or governmental charges shall be made against any holder of any 2052 Series NNN Bond for the exchange, transfer or registration of transfer thereof.”
 
§ 8.08. The period at the end of the first paragraph of § 8.08 be and it hereby is deleted and the following words and figures be and they hereby are added thereto:
 
“, and the 2052 Series NNN Bonds shall be redeemed at the redemption price specified in § 10.66.”
 
ARTICLE II
 
2052 SERIES NNN BONDS
 
§ 2.1.     There shall be a thirty-first series of Bonds under the Indenture, known as and entitled “First Mortgage Bonds, Series NNN due 2052” or “First Mortgage Bonds, Series NNN” (herein and in the Indenture referred to as the “2052 Series NNN Bonds”), and the form thereof shall contain suitable provisions with respect to the matters hereinafter in this Section specified and shall in other respects be substantially as set forth in Exhibit A to the Indenture.
 
The aggregate principal amount of 2052 Series NNN Bonds which may be authenticated and delivered and outstanding under the Indenture is $125,000,000.

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The 2052 Series NNN Bonds shall be payable to the Collateral Agent, and shall be nontransferable except to a successor of the Collateral Agent, in accordance with the Note Purchase Agreement.
 
The 2052 Series NNN Bonds shall bear interest at the rate of 5.47% per annum, computed on the basis of a 360-day year of twelve 30-day months, until the principal thereof is paid or made available for payment, and shall mature on October 24, 2052, subject to prior redemption as described herein; provided that any principal, Make-Whole Amount (as defined in the Note Purchase Agreement), and any such installment of interest which is overdue shall bear interest at a rate of interest that is the greater of (i) 7.47% per annum or (ii) 2.00% per annum over the rate of interest publicly announced by PNC Bank, National Association as its “base” or “prime” rate (to the extent that payment of such interest is enforceable under applicable law).
 
The 2052 Series NNN Bonds shall be in the form of registered Bonds without coupons of denominations of $1,000 and any integral multiple thereof which may be authorized by the Company, the issue of a registered Bond without coupons in any such denomination to be conclusive evidence of such authorization.  Any 2052 Series NNN Bonds shall be dated (i) as of the semi-annual interest payment date (as specified in the first paragraph of the 2052 Series NNN Bonds) next preceding the date on which such 2052 Series NNN Bonds shall be authenticated, unless such 2052 Series NNN Bonds are authenticated before April 24, 2023, in which case such 2052 Series NNN Bonds shall be dated October 24, 2022 or, (ii) if such date of authentication shall be an interest payment date, such 2052 Series NNN Bonds shall be dated such interest payment date; provided, however, that, if at the time of authentication of any 2052 Series NNN Bonds interest is in default on the 2052 Series NNN Bonds, such 2052 Series NNN Bonds shall be dated as of the interest payment date to which interest has previously been paid or made available for payment on the 2052 Series NNN Bonds.  All 2052 Series NNN Bonds shall bear interest from their respective dates, such interest to be payable, upon the terms of and otherwise in accordance with the 2052 Series NNN Bonds, on each date on which interest shall from time to time be payable on the Series 2022C Senior Notes due October 24, 2052; provided, that the obligation of the Company to make payments with respect to the principal of, Make-Whole Amount, if any, and interest on the 2052 Series NNN Bonds shall be fully or partially, as the case may be, satisfied and discharged to the extent that at the time any such payment shall be due, the then due principal of, Make-Whole Amount, if any, and interest on any of the Series 2022C Senior Notes due October 24, 2052 shall have been fully or partially paid from payments made by the Company under the Note Purchase Agreement.  The principal of, Make-Whole Amount, if any, and interest on the 2052 Series NNN Bonds shall be payable at the principal office of the Trustee, in Edison, New Jersey, or, at the option of the Company, at the “principal office” (as indicated pursuant to the Note Purchase Agreement) of the Collateral Agent, in any coin or currency of the United States of America which at the time of payment shall be legal tender for the payment of public and private debts.

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Notwithstanding any other provision of the Indenture or of the 2052 Series NNN Bonds, payments of the principal of, Make-Whole Amount, if any, and interest on any 2052 Series NNN Bond may be made directly to the registered holder thereof without presentation or surrender thereof or the making of any notation thereon if there shall be filed with the Trustee a Certificate of the Company to the effect that such registered holder (or the person for whom such registered holder is a nominee) and the Company have entered into a written agreement that payment shall be so made; provided, however, that before such registered holder transfers or otherwise disposes of any 2052 Series NNN Bond, such registered holder will, at its election, either endorse thereon (or on a paper annexed thereto) the principal amount thereof redeemed and the last date to which interest has been paid thereon or make such Bond available to the Company at the principal office of the Trustee for the purpose of making such endorsement thereon.
 
The 2052 Series NNN Bonds shall be subject to redemption at the option of the Company or otherwise, and shall be subject to mandatory redemption, in the manner provided in the applicable provisions of Article Ten of the Indenture, as amended by Article III of this Twelfth Supplemental Indenture.
 
The 2052 Series NNN Bonds shall be excluded from the benefits of, and shall not be subject to redemption through the operation of, a Mandatory Sinking Fund pursuant to § 11.02 of the Indenture.
 
Notwithstanding the provisions of § 10.02 or any other provision of the Indenture, the selection of 2052 Series NNN Bonds to be redeemed shall, in case fewer than all of the outstanding 2052 Series NNN Bonds are to be redeemed, be made by the Trustee pro rata (to the nearest multiple of One Thousand Dollars ($1,000)) among the registered holders of the 2052 Series NNN Bonds in proportion, as nearly as practicable, to the respective unpaid principal amounts of 2052 Series NNN Bonds registered in the names of such holders, with adjustments, to the extent practicable, to compensate for any prior redemption not made exactly in such proportion (or otherwise as may be specified by a written order signed by the registered holders of all outstanding 2052 Series NNN Bonds).
 
The definitive 2052 Series NNN Bonds may be issued in the form of engraved Bonds or Bonds printed or lithographed on steel engraved borders or Bonds in typed form on normal bond paper.  Subject to the foregoing provisions of this Section and the provisions of § 2.11 of the Indenture, all definitive 2052 Series NNN Bonds shall be fully exchangeable for other Bonds of the same series, of like aggregate principal amounts, and, upon surrender to the Trustee at its principal office, shall be exchangeable for other Bonds of the same series of a different authorized denomination or denominations, as requested by the holder surrendering the same.  The Company will execute, and the Trustee shall authenticate and deliver, registered Bonds without coupons, whenever the same shall be required for any such exchange.

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§ 2.2.     2052 Series NNN Bonds in the aggregate principal amount of $125,000,000 may forthwith upon the execution and delivery of this Twelfth Supplemental Indenture, or from time to time thereafter, be executed by the Company and delivered to the Trustee, and shall thereupon be authenticated and delivered by the Trustee upon compliance by the Company with the provisions of Articles Four, Five or Six of the Indenture, without awaiting the filing or recording of this Twelfth Supplemental Indenture.  No additional 2052 Series NNN Bonds shall be issued under Article Four, Five or Six of the Indenture without the consent in writing of the holders of all the outstanding 2052 Series NNN Bonds.
 
ARTICLE III
 
REDEMPTION OF THE 2052 SERIES NNN BONDS
 
§ 3.1.    The following § 10.65 and § 10.66 be and they hereby are added to Article Ten of the Indenture:
 
“§ 10.65.    The 2052 Series NNN Bonds shall be subject to redemption as follows: payments of principal of, Make-Whole Amount, if any, and interest on the 2052 Series NNN Bonds shall be made to the Collateral Agent to redeem 2052 Series NNN Bonds in such amounts as shall be necessary, in accordance with the provisions of the Note Purchase Agreement, to provide funds under the Note Purchase Agreement to (a) make, when due, payment at maturity (including, without limitation, maturity upon acceleration of the Series 2022C Senior Notes due October 24, 2052) and (b) make, when due, any prepayment required or permitted by the Series 2022C Senior Notes due October 24, 2052 in connection with any prepayment of the Series 2022C Senior Notes due October 24, 2052; provided, however, that the obligation of the Company to make any redemption payments under this Section shall be fully or partially, as the case may be, satisfied and discharged to the extent that at any time such payment shall be due, the then due payment at maturity or redemption payment on any of the Series 2022C Senior Notes due October 24, 2052 shall have been fully or partially made from payments made by the Company on the Notes under the Note Purchase Agreement; provided, further, however, that any principal, Make-Whole Amount, and any interest which is overdue shall bear interest at a rate of interest that is the greater of (i) 7.47% per annum or (ii) 2.00% per annum over the rate of interest publicly announced by PNC Bank, National Association as its “base” or “prime” rate (to the extent that payment of such interest is enforceable under applicable law).  Terms used and not defined in this Section and in Section 10.66 shall have the respective meanings given to them in the Twelfth Supplemental Indenture.”

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“§ 10.66.    In the case of the redemption of 2052 Series NNN Bonds out of moneys deposited with the Trustee pursuant to § 8.08, such 2052 Series NNN Bonds shall, upon compliance with provisions of § 10.02, and subject to the provisions of § 2.1 of the Twelfth Supplemental Indenture, be redeemable at the principal amounts thereof, together with interest accrued thereon to the date fixed for redemption, without premium or Make-Whole Amount.”
 
ARTICLE IV
 
MISCELLANEOUS
 
§ 4.1.     The Company is lawfully seized and possessed of all the real estate, franchises and other property described or referred to in the Indenture (except properties released from the lien of the Indenture pursuant to the provisions thereof) as presently mortgaged, subject to the exceptions stated therein, such real estate, franchises and other property are free and clear of any lien prior to the lien of the Indenture except as set forth in the Granting Clauses of the Indenture and the Company has good right and lawful authority to mortgage the same as provided in and by the Indenture.
 
§ 4.2.     The Trustee assumes no duties, responsibilities or liabilities by reason of this Twelfth Supplemental Indenture other than as set forth in the Indenture, and this Twelfth Supplemental Indenture is executed and accepted by the Trustee subject to all the terms and conditions of its acceptance of the trust under the Indenture, as fully as if said terms and conditions were herein set forth at length.
 
§ 4.3.     The terms used in this Twelfth Supplemental Indenture shall have the meanings assigned thereto in the Indenture.  Reference by number in this Twelfth Supplemental Indenture to Articles or Sections shall be construed as referring to Articles or Sections contained in the Indenture, unless otherwise stated.
 
§ 4.4.   As amended and modified by this Twelfth Supplemental Indenture, the Indenture is in all respects ratified and confirmed and the Indenture and this Twelfth Supplemental Indenture shall be read, taken and construed as one and the same instrument.
 
§ 4.5.     Neither the approval by the Board of Public Utilities of the State of New Jersey of the execution and delivery of this Twelfth Supplemental Indenture nor the approval by said Board of the issue of any Bonds under the Indenture shall in any way be construed as the approval by said Board of any other act, matter or thing which requires approval of said Board under the laws of the State of New Jersey; nor shall approval by said Board of the issue of any Bonds under the Indenture bind said Board or any other public body or authority of the State of New Jersey having jurisdiction in the premises in any future application for the issue of Bonds under the Indenture or otherwise.

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§ 4.6.    This Twelfth Supplemental Indenture may be executed in any number of counterparts and all said counterparts executed and delivered each as an original shall constitute but one and the same instrument.

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NEW JERSEY NATURAL GAS COMPANY HEREBY DECLARES THAT IT HAS READ THIS TWELFTH SUPPLEMENTAL INDENTURE, HAS RECEIVED A COMPLETELY FILLED-IN TRUE COPY OF IT WITHOUT CHARGE AND HAS SIGNED THIS TWELFTH SUPPLEMENTAL INDENTURE ON THE DATE CONTAINED IN ITS ACKNOWLEDGEMENT HEREOF.
 
IN WITNESS WHEREOF, NEW JERSEY NATURAL GAS COMPANY has caused these presents to be signed in its corporate name by its President, a Vice President or its Treasurer and its corporate seal to be hereunto affixed and attested by its Secretary or an Assistant Secretary, and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as successor in interest to U.S. Bank National Association in evidence of its acceptance of the trust hereby created, has caused these presents to be signed in its corporate name by one of its Vice Presidents.
NEW JERSEY NATURAL GAS COMPANY




By: 
 /s/ Daniel Sergott


Name:
Daniel Sergott


Title:
Treasurer

[Corporate Seal]




ATTEST:




/s/ Tejal K. Mehta

Name:
Tejal K. Mehta

Title:
Corporate Secretary


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U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION, as Trustee
     
 
By:
/s/ Christopher E. Golabek
   
Name:
Christopher E. Golabek
   
Title: 
Vice President

ATTEST:
    

   
/s/ Paul D. O’Brien
 
Name: 
Paul D. O’Brien
   
Title: 
Vice President    

19
STATE OF NEW JERSEY )
 
 ) SS:
COUNTY OF MONMOUTH )
 
BE IT REMEMBERED that on this 13th day of October, 2022, before me, the subscriber, an Attorney-at-Law of the State of New Jersey, and I hereby certify that I am such an Attorney-at-Law as witness my hand, personally appeared Tejal K. Mehta to me known who, being by me duly sworn according to law, on his oath, does depose and make proof to my satisfaction that he is the Corporate Secretary of NEW JERSEY NATURAL GAS COMPANY, the grantor or mortgagor in the foregoing Supplemental Indenture named; that he well knows the seal of said corporation; that the seal affixed to said Supplemental Indenture is the corporate seal of said corporation, and that it was so affixed in pursuance of resolutions of the Board of Directors of said corporation; that Daniel Sergott is Treasurer of said corporation; that he saw said Daniel Sergott, as such Treasurer, affix said seal thereto, sign and deliver said Supplemental Indenture, and heard him declare that he signed, sealed and delivered the same as the voluntary act and deed of said corporation, in pursuance of said resolutions, and that this deponent signed his name thereto, at the same time, as attesting witness.

 
/s/ Tejal K. Mehta
 
Name:
Tejal K. Mehta
 
Title:
Corporate Secretary

Subscribed and sworn to before me,
an Attorney-at-Law of the State of
New Jersey, at Wall, New Jersey,
the day and year aforesaid.





/s/ Melissa Abraham
Name:
Melissa Abraham
   
 
Attorney-at-Law of the
 
State of New Jersey

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ACKNOWLEDGEMENT
 
STATE OF NEW JERSEY )
 
 ) ss:
COUNTY OF MIDDLESEX )
 
I HEREBY CERTIFY that on this 13th day of October, 2022, before me, a Notary Public for the state aforesaid, personally appeared Christopher E. Golabek, known to me or satisfactorily proven to be the Person whose name is subscribed to the Twelfth Supplemental Indenture dated as of October 1, 2022, who acknowledged that he is an authorized signatory for U.S. Bank Trust Company, National Association, as successor in interest to U.S. Bank National Association, a national banking association, as Trustee; that he has been duly authorized to execute, and has executed, such instrument on its behalf for the purposes therein set forth; and that the same is its act and deed. 
 
IN WITNESS WHEREOF, I have set my hand and Notarial Seal, the day and year first above written.

 
/s/ Paul D. O’Brien
 
Paul D. O’Brien
 
Notary Public
 
My commission expires on
6/11/25


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