executedchesapeakeprivat







EXECUTION VERSION      CHESAPEAKE UTILITIES CORPORATION      $150,000,000      PRIVATE SHELF FACILITY      ______________   PRIVATE SHELF AGREEMENT   ______________      Dated as of October 8, 2015                 





 







TABLE OF CONTENTS      Section  Page         SECTION 1. Authorization of Notes ...................................................................................... 1   SECTION 2. Sale and Purchase of Notes ............................................................................... 2   SECTION 3. Closing .............................................................................................................. 6   Section 3.1 Facility Closings ................................................................................... 6   Section 3.2 Rescheduled Facility Closings .............................................................. 6   SECTION 4. Conditions to Closing ....................................................................................... 6   Section 4.1 Representations and Warranties ............................................................ 7   Section 4.2 Performance; No Default ...................................................................... 7   Section 4.3 Certificates ............................................................................................ 7   Section 4.4 Opinions of Counsel ............................................................................. 7   Section 4.5 Purchase Permitted by Applicable Law, Etc ......................................... 8   Section 4.6 Sale of Notes ......................................................................................... 8   Section 4.7 Payment of Fees .................................................................................... 8   Section 4.8 Private Placement Number ................................................................... 9   Section 4.9 Changes in Corporate Structure ............................................................ 9   Section 4.10 Diversification Event ............................................................................ 9   Section 4.11 Orders .................................................................................................... 9   Section 4.12 Proceedings and Documents ................................................................. 9   SECTION 5. Representations and Warranties of the Company ............................................. 9   Section 5.1 Organization; Power and Authority ...................................................... 9   Section 5.2 Authorization, Etc ............................................................................... 10   Section 5.3 Disclosure ........................................................................................... 10   Section 5.4 Organization and Ownership of Shares of Subsidiaries ..................... 10   Section 5.5 Financial Statements; Material Liabilities .......................................... 11   Section 5.6 Compliance with Laws, Other Instruments, Etc ................................. 11   Section 5.7 Governmental Authorizations, Etc ...................................................... 12   Section 5.8 Litigation; Observance, Statutes and Orders ...................................... 12   Section 5.9 Taxes ................................................................................................... 12   Section 5.10 Title to Property; Leases ..................................................................... 12   Section 5.11 Licenses, Permits, Etc ......................................................................... 13   Section 5.12 Compliance with ERISA ..................................................................... 13     





 







   -ii-      Section 5.13 Private Offering by the Company ....................................................... 14   Section 5.14 Use of Proceeds; Margin Regulations................................................. 14   Section 5.15 Existing Indebtedness ......................................................................... 14   Section 5.16 Foreign Assets Control Regulations, Etc ............................................ 15   Section 5.17 Status under Certain Statutes .............................................................. 16   Section 5.18 Environmental Matters........................................................................ 17   Section 5.19 Notes Rank Pari Passu ........................................................................ 17   Section 5.20 Hostile Tender Offers ......................................................................... 18   SECTION 6. Representations of the Purchasers .................................................................. 18   Section 6.1 Purchase for Investment ...................................................................... 18   Section 6.2 Source of Funds .................................................................................. 18   SECTION 7. Information as to Company ............................................................................ 19   Section 7.1 Financial and Business Information.................................................... 19   Section 7.2 Officer’s Certificate ............................................................................ 22   Section 7.3 Visitation ............................................................................................. 23   Section 7.4 Electronic Delivery ............................................................................. 23   SECTION 8. Payment and Prepayment of the Notes ........................................................... 24   Section 8.1 Required Prepayments; Maturity ........................................................ 24   Section 8.2 Optional Prepayments with Make-Whole Amount ............................. 24   Section 8.3 Allocation of Partial Prepayments ...................................................... 25   Section 8.4 Maturity; Surrender, Etc ..................................................................... 25   Section 8.5 Purchase of Notes ............................................................................... 25   Section 8.6 Make-Whole Amount ......................................................................... 25   Section 8.7 Payments Due on Non-Business Days ................................................ 27   Section 8.8 Offer to Prepay Upon Diversification Event ...................................... 27   SECTION 9. Affirmative Covenants .................................................................................... 28   Section 9.1 Compliance with Laws ....................................................................... 28   Section 9.2 Insurance ............................................................................................. 28   Section 9.3 Maintenance of Properties .................................................................. 28   Section 9.4 Payment of Taxes ................................................................................ 28   Section 9.5 Corporate Existence, Etc ..................................................................... 29   Section 9.6 Books and Records ............................................................................. 29   Section 9.7 Subsidiary Guarantors ......................................................................... 29     





 







   -iii-      SECTION 10. Negative Covenants ........................................................................................ 30   Section 10.1 Transactions with Affiliates ................................................................ 30   Section 10.2 Merger, Consolidation ........................................................................ 31   Section 10.3 Limitations on Indebtedness ............................................................... 31   Section 10.4 Liens and Encumbrances .................................................................... 32   Section 10.5 Sale of Property and Subsidiary Stock................................................ 34   Section 10.6 Line of Business .................................................................................. 35   Section 10.7 Terrorism Sanctions Regulations ........................................................ 35   SECTION 11. Events of Default ............................................................................................ 35   SECTION 12. Remedies on Default, Etc ............................................................................... 37   Section 12.1 Acceleration ........................................................................................ 37   Section 12.2 Other Remedies ................................................................................... 38   Section 12.3 Rescission ........................................................................................... 38   Section 12.4 No Waivers or Election of Remedies, Expenses, Etc ......................... 39   SECTION 13. Registration; Exchange; Substitution of Notes ............................................... 39   Section 13.1 Registration of Notes .......................................................................... 39   Section 13.2 Transfer and Exchange of Notes ......................................................... 39   Section 13.3 Replacement of Notes ......................................................................... 40   SECTION 14. Payments on Notes .......................................................................................... 40   Section 14.1 Place of Payment................................................................................. 40   Section 14.2 Home Office Payment......................................................................... 40   SECTION 15. Expenses, Etc .................................................................................................. 41   Section 15.1 Transaction Expenses .......................................................................... 41   Section 15.2 Survival ............................................................................................... 41   SECTION 16. Survival of Representations and Warranties; Entire Agreement .................... 42   SECTION 17. Amendment and Waiver ................................................................................. 42   Section 17.1 Requirements ...................................................................................... 42   Section 17.2 Solicitation of Holders of Notes ......................................................... 42   Section 17.3 Binding Effect, Etc.............................................................................. 43   Section 17.4 Notes Held by Company, Etc .............................................................. 43   SECTION 18. Notices ............................................................................................................ 44   SECTION 19. Reproduction of Documents ........................................................................... 44   SECTION 20. Confidential Information ................................................................................ 45     





 







   -iv-      SECTION 21. Substitution of Purchaser ................................................................................ 46   SECTION 22. Miscellaneous ................................................................................................. 46   Section 22.1 Successors and Assigns ....................................................................... 46   Section 22.2 Accounting Terms ............................................................................... 46   Section 22.3 Severability ......................................................................................... 47   Section 22.4 Construction, Etc ................................................................................. 47   Section 22.5 Counterparts ........................................................................................ 47   Section 22.6 Governing Law ................................................................................... 47   Section 22.7 Jurisdiction and Process; Waiver of Jury Trial ................................... 47   Section 22.8 Transaction References ....................................................................... 48     





 







   -v-      SCHEDULE A   — Defined Terms    SCHEDULE B  — Information Schedule    SCHEDULE 1  — Form of Note   SCHEDULE 2(d) — Form of Request for Purchase   SCHEDULE 2(f) — Form of Confirmation of Acceptance   SCHEDULE 4.4(a) —  Form of Opinion of Special Counsel for the Company    SCHEDULE 4.4(b) —  Form of Opinion of Delaware Counsel for the Company    SCHEDULE 4.4(c) —  Form of Opinion of Maryland Counsel for the Company   SCHEDULE 4.4(d) —  Form of Opinion of Florida Counsel for the Company   SCHEDULE 4.4(e) —  Form of Opinion of Special Counsel for the Purchasers    SCHEDULE 5.3  —  Disclosure Materials    SCHEDULE 5.4  — Subsidiaries of the Company and Ownership of Subsidiary         Stock    SCHEDULE 5.15 — Existing Indebtedness   SCHEDULE 10.4(e)  — Existing Liens   SCHEDULE 10.6 — Line of Business        





 







      CHESAPEAKE UTILITIES CORPORATION   909 Silver Lake Boulevard   Dover, Delaware 19904      $150,000,000 Private Shelf Facility               Dated as of October 8, 2015   To Prudential Investment Management, Inc. (“Prudential”)   To each other Prudential Affiliate which becomes    bound by this Agreement as hereinafter     provided (each, a “Purchaser” and collectively,    the “Purchasers”):   Ladies and Gentlemen:    CHESAPEAKE UTILITIES CORPORATION, a Delaware corporation (together with any   successor thereto that becomes a party hereto pursuant to Section 10.2, the “Company”), agrees   with each of the Purchasers as follows:    SECTION 1. AUTHORIZATION OF NOTES.    The Company has authorized the issue of its senior promissory notes (the “Notes”, such   term to include any such notes issued in substitution thereof pursuant to Section 13) up to a   maximum aggregate principal amount of $150,000,000, to be dated the date of issue thereof, to   mature, in the case of each Note so issued, no more than 20 years after the date of original   issuance thereof, to have an average life, in the case of each Note so issued, of no more than   20 years after the date of original issuance thereof, to bear interest on the unpaid balance thereof   from the date thereof at the rate per annum, and to have such other particular terms, as shall be   set forth, in the case of each Note so issued, in the Confirmation of Acceptance with respect to   such Note delivered pursuant to Section 2(f), and to be substantially in the form of Schedule 1   attached hereto.  The terms “Note” and “Notes” as used herein shall include each Note delivered   pursuant to any provision of this Agreement and each Note delivered in substitution or exchange   for any such Note pursuant to any such provision.  Notes which have (1) the same final maturity,   (2) the same principal prepayment dates, (3) the same principal prepayment amounts (as a   percentage of the original principal amount of each Note), (4) the same interest rate, (5) the same   interest payment periods and (6) the same date of issuance (which, in the case of a Note issued in   exchange for another Note, shall be deemed for these purposes to be the date on which such   Note’s ultimate predecessor Note was issued), are herein called a “Series” of Notes.  Certain   capitalized and other terms used in this Agreement are defined in Schedule A.  References to a   “Schedule” are references to a Schedule attached to this Agreement unless otherwise specified.      





 







   -2-      References to a “Section” are references to a Section of this Agreement unless otherwise   specified.    SECTION 2. SALE AND PURCHASE OF NOTES.    (a) Facility.  Prudential is willing to consider, in its sole discretion and within   limits which may be authorized for purchase by Prudential Affiliates from time to time,   the purchase of Notes pursuant to this Agreement.  The willingness of Prudential to   consider such purchase of Notes is herein called the “Facility.”  At any time, subject to   the additional limitations in Section 2(b), the aggregate principal amount of Notes stated   in Section 1, minus the aggregate principal amount of Notes purchased and sold pursuant   to this Agreement prior to such time, minus the aggregate principal amount of Accepted   Notes (as hereinafter defined) which have not yet been purchased and sold hereunder   prior to such time, is herein called the “Available Facility Amount” at such time.    NOTWITHSTANDING THE WILLINGNESS OF PRUDENTIAL TO CONSIDER PURCHASES OF   NOTES BY PRUDENTIAL AFFILIATES, THIS AGREEMENT IS ENTERED INTO ON THE   EXPRESS UNDERSTANDING THAT NEITHER PRUDENTIAL NOR ANY PRUDENTIAL   AFFILIATE SHALL BE OBLIGATED TO MAKE OR ACCEPT OFFERS TO PURCHASE NOTES,   OR TO QUOTE RATES, SPREADS OR OTHER TERMS WITH RESPECT TO SPECIFIC   PURCHASES OF THE NOTES, AND THE FACILITY SHALL IN NO WAY BE CONSTRUED AS A   COMMITMENT BY PRUDENTIAL OR ANY PRUDENTIAL AFFILIATE.   (b) Issuance Period.  Notes may be issued and sold pursuant to this   Agreement until the earlier of (1) the third anniversary of the date of this Agreement (or   if such anniversary date is not a Business Day, the Business Day next preceding such   anniversary) and (2) the 30th day after Prudential shall have given to the Company, or the   Company shall have given to Prudential, a written notice stating that it elects to terminate   the issuance and sale of Notes pursuant to this Agreement (or if such 30th day is not a   Business Day, the Business Day next preceding such 30th day).  The period during which   Notes may be issued and sold pursuant to this Agreement is herein called the “Issuance   Period.”   (c) Periodic Spread Information.  Provided no Default or Event of Default   exists, not later than 9:30 a.m. (New York City local time) on a Business Day during the   Issuance Period if there is an Available Facility Amount on such Business Day, the   Company may request by telecopier or telephone, and Prudential will, to the extent   reasonably practicable, provide to the Company on such Business Day (or, if such request   is received after 9:30 a.m. (New York City local time) on such Business Day, on the   following Business Day), information (by telecopier or telephone) with respect to various   spreads at which Prudential Affiliates might be interested in purchasing Notes of different   average lives; provided, however, that the Company may not make such requests more   frequently than once in every five Business Days or such other period as shall be   mutually agreed to by the Company and Prudential.  The amount and content of   information so provided shall be in the sole discretion of Prudential but it is the intent of   Prudential to provide information which will be of use to the Company in determining   whether to initiate procedures for use of the Facility.  Information so provided shall not   constitute an offer to purchase Notes, and neither Prudential nor any Prudential Affiliate     





 







   -3-      shall be obligated to purchase Notes at the spreads specified.  Information so provided   shall be representative of potential interest only for the period commencing on the day   such information is provided and ending on the earlier of the fifth Business Day after   such day and the first day after such day on which further spread information is provided.    Prudential may suspend or terminate providing information pursuant to this Section 2(c)   for any reason, including its determination that the credit quality of the Company has   declined since the date of this Agreement.   (d) Request for Purchase.  The Company may from time to time during the   Issuance Period make requests for purchases of Notes (each such request being a   “Request for Purchase”).  Each Request for Purchase shall be made to Prudential by   telecopier or overnight delivery service, and shall (1) specify the aggregate principal   amount of Notes covered thereby, which shall not be less than $5,000,000 and not be   greater than the Available Facility Amount at the time such Request for Purchase is   made, (2) specify the principal amounts, final maturities, principal prepayment dates and   amounts and interest payment periods (quarterly or semi-annually in arrears) of the Notes   covered thereby, (3) specify the use of proceeds of such Notes, (4) specify the proposed   Closing Day for the purchase and sale of such Notes, which shall be a Business Day   during the Issuance Period not less than 10 days and not more than 25 days after the   making of such Request for Purchase unless otherwise specified in the Request for   Purchase and agreed to in the Confirmation of Acceptance for such Notes, (5) specify the   number of the account and the name and address of the depository institution to which   the purchase prices of such Notes are to be transferred on the Closing for such purchase   and sale, (6) identify each order of a State Commission or other Governmental Authority   necessary or required for the Company to incur the indebtedness to be evidenced by such   Notes, (7) certify that the representations and warranties contained in Section 5 are true   on and as of the date of such Request for Purchase and that there exists on the date of   such Request for Purchase no Event of Default or Default, and (8) be substantially in the   form of Schedule 2(d) attached hereto.  Each Request for Purchase shall be in writing   signed by the Company and shall be deemed made when received by Prudential.   (e) Rate Quotes.  Not later than five Business Days after the Company shall   have given Prudential a Request for Purchase pursuant to Section 2(d), Prudential may,   but shall be under no obligation to, provide to the Company by telephone or telecopier, in   each case between 9:30 a.m. and 1:00 p.m. New York City local time (or such later time   as Prudential may elect) interest rate quotes for the several principal amounts, maturities,   principal prepayment schedules, and interest payment periods of Notes specified in such   Request for Purchase.  Each quote shall represent the interest rate per annum payable on   the proposed outstanding principal balance of such Notes at which a Prudential Affiliate   would be willing to purchase such Notes at 100% of the principal amount thereof.   (f) Acceptance.  Within 30 minutes (or such shorter period as Prudential may   elect) (the “Acceptance Window”) with respect to any interest rate quotes provided   pursuant to Section 2(e), the Company may, subject to Section 2(g), elect to accept such   interest rate quotes as to not less than $5,000,000 aggregate principal amount of the Notes   specified in the related Request for Purchase.  Such election shall be made by an   Authorized Officer of the Company notifying Prudential by telephone or telecopier     





 







   -4-      within the Acceptance Window that the Company elects to accept such interest rate   quotes, specifying the Notes (each such Note being an “Accepted Note”) as to which   such acceptance (an “Acceptance”) relates.  The day the Company notifies Prudential of   an Acceptance with respect to any Accepted Notes is herein called the “Acceptance   Day” for such Accepted Notes.  Any interest rate quotes as to which Prudential does not   receive an Acceptance within the Acceptance Window shall expire, and no purchase or   sale of Notes hereunder shall be made based on such expired interest rate quotes.  Subject   to Section 2(g) and the other terms and conditions hereof, the Company agrees to sell to a   Prudential Affiliate, and Prudential agrees to cause the purchase by a Prudential Affiliate   of, the Accepted Notes at 100% of the principal amount of such Notes.  As soon as   practicable following the Acceptance Day, the Company, Prudential and each Prudential   Affiliate which is to purchase any such Accepted Notes will execute a confirmation of   such Acceptance substantially in the form of Schedule 2(f) attached hereto (a   “Confirmation of Acceptance”).  If the Company should fail to execute and return to   Prudential within three Business Days following the Company’s receipt thereof a   Confirmation of Acceptance with respect to any Accepted Notes, Prudential may at its   election at any time prior to Prudential’s receipt thereof cancel the Closing with respect to   such Accepted Notes by so notifying the Company in writing.   (g) Market Disruption.  Notwithstanding the provisions of Section 2(f), if   Prudential shall have provided interest rate quotes pursuant to Section 2(e) and thereafter   prior to the time an Acceptance with respect to such quotes shall have been notified to   Prudential in accordance with Section 2(f) the domestic market for U.S. Treasury   securities or derivatives shall have closed or there shall have occurred a general   suspension, material limitation, or significant disruption of trading in Securities generally   on the New York Stock Exchange or in the domestic market for U.S. Treasury securities   or derivatives, then such interest rate quotes shall expire, and no purchase or sale of   Notes hereunder shall be made based on such expired interest rate quotes.  If the   Company thereafter notifies Prudential of the Acceptance of any such interest rate quotes,   such Acceptance shall be ineffective for all purposes of this Agreement, and Prudential   shall promptly notify the Company that the provisions of this Section 2(g) are applicable   with respect to such Acceptance.   (h) Fees.   (1) Structuring Fee.  In consideration for the time, effort and expense   involved in the preparation, negotiation and execution of this Agreement, at the   time of the execution and delivery of this Agreement by the Company and   Prudential, the Company will pay to Prudential in immediately available funds a   fee (the “Structuring Fee”) in the amount of $25,000.   (2) Issuance Fee.  The Company will pay to each Purchaser in   immediately available funds a fee (the “Issuance Fee”) on each Closing Day   (other than any Closing Day occurring on or prior to the 60th day following the   date of this Agreement) in an amount equal to 0.125% of the aggregate principal   amount of Notes sold to such Purchaser on such Closing Day.     





 







   -5-      (3) Delayed Delivery Fee.  If the closing of the purchase and sale of   any Accepted Note is delayed for any reason (other than in the case where all   conditions in Section 4 have been satisfied and a Purchaser fails to purchase its   Accepted Notes) beyond the original Closing Day for such Accepted Note, the   Company will pay to each Purchaser which shall have agreed to purchase such   Accepted Note on the Cancellation Date or actual closing date of such purchase   and sale a fee (the “Delayed Delivery Fee”) calculated as follows:   (BEY - MMY) X DTS/360 X PA    where “BEY” means Bond Equivalent Yield, i.e., the bond equivalent yield per   annum of such Accepted Note; “MMY” means Money Market Yield, i.e., the   yield per annum on a commercial paper investment of the highest quality selected   by Prudential on the date Prudential receives notice of the delay in the closing for   such Accepted Note having a maturity date or dates the same as, or closest to, the   Rescheduled Closing Day or Rescheduled Closing Days for such Accepted Note   (a new alternative investment being selected by Prudential each time such closing   is delayed); “DTS” means Days to Settlement, i.e., the number of actual days   elapsed from and including the original Closing Day with respect to such   Accepted Note (in the case of the first such payment with respect to such   Accepted Note) or from and including the date of the next preceding payment (in   the case of any subsequent delayed delivery fee payment with respect to such   Accepted Note) to but excluding the date of such payment; and “PA” means   Principal Amount, i.e., the principal amount of the Accepted Note for which such   calculation is being made.  In no case shall the Delayed Delivery Fee be less than   zero.  Nothing contained herein shall obligate any Purchaser to purchase any   Accepted Note on any day other than the Closing Day for such Accepted Note, as   the same may be rescheduled from time to time in compliance with Section 3.2.   (4) Cancellation Fee.  If the Company at any time notifies Prudential   in writing that the Company is canceling the closing of the purchase and sale of   any Accepted Note, or if Prudential notifies the Company in writing under the   circumstances set forth in the last sentence of Section 2(f) or the penultimate   sentence of Section 3.2 that the closing of the purchase and sale of such Accepted   Note is to be canceled, or if the closing of the purchase and sale of such Accepted   Note is not consummated on or prior to the last day of the Issuance Period (the   date of any such notification, or the last day of the Issuance Period, as the case   may be, being the “Cancellation Date”), the Company will pay to each Purchaser   which shall have agreed to purchase such Accepted Note no later than one day   after the Cancellation Date in immediately available funds an amount (the   “Cancellation Fee”) calculated as follows:   PI X PA    where “PI” means Price Increase, i.e., the quotient (expressed in decimals)   obtained by dividing (a) the excess of the ask price (as determined by Prudential)   of the Hedge Treasury Note(s) on the Cancellation Date over the bid price (as     





 







   -6-      determined by Prudential) of the Hedge Treasury Notes(s) on the Acceptance Day   for such Accepted Note by (b) such bid price; and “PA” has the meaning in   Section 2(h)(3).  The foregoing bid and ask prices shall be as reported by   TradeWeb LLC (or, if such data for any reason ceases to be available through   TradeWeb LLC, any publicly available source of similar market data).  Each price   shall be based on a U.S. Treasury security having a par value of $100.00 and shall   be rounded to the second decimal place.  In no case shall the Cancellation Fee be   less than zero.   SECTION 3. CLOSING.    Section 3.1 Facility Closings.  Not later than 11:30 a.m. (New York City local time)   on the Closing Day for any Accepted Notes, the Company will deliver to each Purchaser listed   in the Confirmation of Acceptance relating thereto at the offices of Schiff Hardin LLP, 666   Fifth Avenue, Suite 1700, New York, NY 10103, Attention:  Mark A. Sternberg or at such   other place pursuant to the directions of Prudential, the Accepted Notes to be purchased by   such Purchaser in the form of one or more Notes in authorized denominations as such   Purchaser may request for each Series of Accepted Notes to be purchased on the Closing Day,   dated the Closing Day and registered in such Purchaser’s name (or in the name of its nominee),   against payment of the purchase price thereof by transfer of immediately available funds for   credit to the Company’s account specified in the Request for Purchase of such Notes.  Each   Shelf Closing is referred to as a “Closing.”   Section 3.2 Rescheduled Facility Closings.  If the Company fails to tender to any   Purchaser the Accepted Notes to be purchased by such Purchaser on the scheduled Closing   Day for such Accepted Notes as provided above in Section 3.1, or any of the conditions   specified in Section 4 shall not have been fulfilled by the time required on such scheduled   Closing Day, the Company shall, prior to 1:00 p.m., New York City local time, on such   scheduled Closing Day notify Prudential (which notification shall be deemed received by each   Purchaser) in writing whether (a) such closing is to be rescheduled (such rescheduled date to be   a Business Day during the Issuance Period not less than one Business Day and not more than   10 Business Days after such scheduled Closing Day (the “Rescheduled Closing Day”)) and   certify to Prudential (which certification shall be for the benefit of each Purchaser) that the   Company reasonably believes that it will be able to comply with the conditions set forth in   Section 4 on such Rescheduled Closing Day and that the Company will pay the Delayed   Delivery Fee in accordance with Section 2(h)(3) or (b) such closing is to be canceled.  In the   event that the Company shall fail to give such notice referred to in the preceding sentence,   Prudential (on behalf of each Purchaser) may at its election, at any time after 1:00 p.m., New   York City local time, on such scheduled Closing Day, notify the Company in writing that such   closing is to be canceled.  Notwithstanding anything to the contrary appearing in this   Agreement, the Company may not elect to reschedule a closing with respect to any given   Accepted Notes on more than one occasion, unless Prudential shall have otherwise consented   in writing      





 







   -7-      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 for such Notes is subject to the fulfillment to such Purchaser’s   satisfaction, prior to or at such Closing, of the following conditions:    Section 4.1 Representations and Warranties.  The representations and warranties   of the Company in this Agreement shall be correct when made and at the applicable Closing   (except to the extent of changes caused by the transactions herein contemplated); provided that,   with respect to such Closing, the Company shall be permitted to make additions and deletions   to either Schedule 5.4 or Schedule 5.15 after the date of this Agreement but prior to such   Closing, so long as (a) the Company shall have provided updated copies of the relevant   Schedules to such Purchaser in the related Request for Purchase and (b) any such additions or   deletions are in all respects satisfactory to such Purchaser as a condition to such Closing   (excluding any additions or deletions to Schedule 5.4 that modify the representations set forth   in Section 5.4 which additions or deletions shall be deemed to be satisfactory to the Purchasers   provided that the Company is in compliance with Section 10.5 as of the date of such Closing).   Section 4.2 Performance; No Default.  The Company shall have performed and   complied with all agreements and conditions contained in this Agreement required to be   performed or complied with by it prior to or at such Closing.  From the date of this Agreement   to such Closing, assuming that Sections 9 and 10 are applicable from the date of this   Agreement, before and after giving effect to the issue and sale of the Notes at such Closing   (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 Certificates.    (a) Officer’s Certificate.  The Company shall have delivered to such   Purchaser an Officer’s Certificate, dated the date of such Closing, certifying that the   conditions specified in Sections 4.1, 4.2, 4.9 and 4.10 have been fulfilled.    (b) Secretary’s Certificate.  The Company shall have delivered to such   Purchaser a certificate of its Secretary or Assistant Secretary, dated the date of such   Closing, certifying as to (1) the resolutions attached thereto and other corporate   proceedings and governmental approvals, if any, relating to the authorization, execution   and delivery of such Notes and this Agreement, (2) the Company’s organizational   documents as then in effect and (3) the names and true signatures of the officers of the   Company authorized to sign this Agreement and the Notes and the other documents to be   delivered hereunder; provided, that, in lieu of the delivery of any item required by clause   (1), (2) or (3) above, for any Closing, the Company may certify that there has been no   change to such item since the date on which a certificate in respect of such item was most   recently delivered to such Purchaser under this Section 4.3; and   (c)  A good standing certificate for the Company from the Secretary of   Delaware dated of a recent date prior to such Closing and such other evidence of the   status of the Company as such Purchaser may reasonably request.     





 







   -8-      Section 4.4 Opinions of Counsel.  Such Purchaser shall have received opinions in   form and substance satisfactory to such Purchaser, dated the date of such Closing (a) from   Baker & Hostetler LLP, counsel for the Company, substantially in the form set forth in   Schedule 4.4(a) and covering such other matters incident to the transactions contemplated   hereby as such Purchaser or its counsel may reasonably request (and the Company hereby   instructs its counsel to deliver such opinion to the Purchasers), (b) from Parkowski, Guerke and   Swayze, Delaware counsel for the Company, substantially in the form set forth in Schedule   4.4(b) and covering such other matters incident to the transactions contemplated hereby as such   Purchaser or its counsel may reasonably request (and the Company hereby instructs its   Delaware counsel to deliver such opinion to the Purchasers), (c) from Venable LLP, Maryland   counsel for the Company, substantially in the form set forth in Schedule 4.4(c) and covering   such other matters incident to the transactions contemplated hereby as such Purchaser or its   counsel may reasonably request (and the Company hereby instructs its Maryland counsel to   deliver such opinion to the Purchasers), (d) from Gunster, Yoakley & Steward, P.A., Florida   counsel for the Company, substantially in the form set forth in Schedule 4.4(d) and covering   such other matters incident to the transactions contemplated hereby as such Purchaser or its   counsel may reasonably request (and the Company hereby instructs its Florida counsel to   deliver such opinion to the Purchasers and (e) from Schiff Hardin LLP, the Purchasers’ special   counsel in connection with such transactions, substantially in the form set forth in Schedule   4.4(e) and covering such other matters incident to such transactions as such Purchaser may   reasonably request.   Section 4.5 Purchase Permitted by Applicable Law, Etc.  On the date of such   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, which law or   regulation was not in effect on the date of this Agreement.  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 such Purchaser to determine whether such   purchase is so permitted.    Section 4.6 Sale of Notes.     (a) Such Purchaser shall have received the Note(s) to be purchased by such   Purchaser at such Closing.   (b) Contemporaneously with such Closing, the Company shall sell to each   other Purchaser and each other Purchaser shall purchase the Notes to be purchased by it   at such Closing as specified in the applicable Confirmation of Acceptance.    Section 4.7 Payment of Fees.       





 







   -9-      (a) Without limiting Section 15.1, the Company shall have paid to Prudential   and each Purchaser on or before such Closing any fees due it pursuant to or in connection   with this Agreement, including any Structuring Fee due pursuant to Section 2(h)(1), any   Issuance Fee due pursuant to Section 2(h)(2) and any Delayed Delivery Fee due pursuant   to Section 2(h)(3).   (b) Without limiting Section 15.1, the Company shall have paid on or before   the date of this Agreement and the date of such Closing the fees, charges and   disbursements of the Purchasers’ special counsel referred to in Section 4.4(e) to the   extent reflected in a statement of such counsel rendered to the Company at least one   Business Day prior to such date.   Section 4.8 Private Placement Number.  A Private Placement Number issued by   Standard & Poor’s CUSIP Service Bureau (in cooperation with the SVO) shall have been   obtained for such Notes.    Section 4.9 Changes in Corporate Structure.  The Company shall not have   changed its jurisdiction of incorporation or organization, as applicable, or been a party to any   merger or consolidation or succeeded to all or any substantial part of the liabilities of any other   entity, at any time following the date of this Agreement, except for any such transaction where   the Company is (a) in compliance with Section 10.2 and (b) the surviving or acquiring   corporation.   Section 4.10 Diversification Event.  No Diversification Event shall have occurred.   Section 4.11 Orders.  Such Purchaser shall have received complete and correct   copies of the orders identified in the applicable Request for Purchase which orders shall be   satisfactory to such Purchaser and, on the date of such Closing, shall be final and in full force   and effect.  No appeal, review or contest of either thereof shall be pending on the date of such   Closing, and, as of the date of such Closing, the time for appeal or to seek review or   reconsideration of such orders shall have expired.  Any conditions contained in either order   shall have been satisfied to such Purchaser’s reasonable satisfaction.   Section 4.12 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 reasonably satisfactory to such Purchaser and   its special counsel, and such Purchaser and its special counsel shall have received all such   counterpart originals or certified or other copies of such documents as such Purchaser or such   special counsel may reasonably request.    SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.   On the date of this Agreement and on the date of each Closing, the Company represents   and warrants to each Purchaser 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     





 







   -10-      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 currently 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.  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 (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.  This Agreement and the documents, certificates or other   writings (including the financial statements provided pursuant to the terms hereof) delivered to   the Purchasers by or on behalf of the Company in connection with the transactions   contemplated hereby and identified in Schedule 5.3 (this Agreement and such documents,   certificates or other writings and such financial statements delivered to each Purchaser prior to   the applicable Closing being referred to, collectively, as 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 the end   of the most recent fiscal year for which audited financial statements have been furnished, there   has been no change in the financial condition, operations, business or properties of the   Company or any Subsidiary except changes that would not, individually or in the aggregate,   reasonably be expected to have a Material Adverse Effect.     Section 5.4 Organization and Ownership of Shares of Subsidiaries.    (a) Schedule 5.4 is (except as noted therein) a complete and correct list of the   Company’s Subsidiaries, showing, as to each Subsidiary, the name thereof, the   jurisdiction of its organization, and the percentage of shares of each class of its capital   stock or similar equity interests outstanding owned by the Company and each other   Subsidiary.    (b) All of the outstanding shares of capital stock or similar equity interests of   each Subsidiary shown in Schedule 5.4 as being owned by the Company and its   Subsidiaries have been validly issued, are fully paid and non-assessable and are owned by   the Company or another Subsidiary free and clear of any Lien that is prohibited by this   Agreement.    (c) Each Subsidiary is a corporation or other legal entity duly organized,   validly existing and, where applicable, in good standing under the laws of its jurisdiction     





 







   -11-      of organization, and is duly qualified as a foreign corporation or other legal entity and,   where applicable, 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 Subsidiary has the corporate or other power   and authority to own or hold under lease the properties it purports to own or hold under   lease and to transact the business it transacts and currently proposes to transact.    Section 5.5 Financial Statements; Material Liabilities.  The Company has   delivered to each Purchaser of Accepted Notes copies of the following financial statements   identified by a principal financial officer of the Company: (a) consolidated balance sheets of   the Company and its Subsidiaries as at December 31 in each of the three fiscal years of the   Company most recently completed prior to the date as of which this representation is made or   repeated to such Purchaser (other than fiscal years completed within 120 days prior to such   date for which audited financial statements have not been released) and consolidated   statements of income, stockholders’ equity and cash flows of the Company and its Subsidiaries   for each such year, all reported on by independent public accountants of recognized national   standing and (b) a consolidated balance sheet of the Company and its Subsidiaries as at the end   of the quarterly period, if any, most recently completed prior to such date and after the end of   such fiscal year (other than quarterly periods completed within 60 days prior to such date for   which financial statements have not been released) and the comparable quarterly period in the   preceding fiscal year and consolidated statements of income, stockholders’ equity and cash   flows for the periods from the beginning of the fiscal years in which such quarterly periods are   included to the end of such quarterly periods, prepared by the Company.  All of such 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 thereof and the consolidated results of their operations and cash flows for the   respective periods indicated 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 audits and normal year-end adjustments).  The   Company and its Subsidiaries do not have any Material liabilities that are not 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 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 or any Subsidiary under, any indenture,   mortgage, deed of trust, loan, purchase or credit agreement, lease, corporate charter or by-laws,   shareholders agreement or any other Material agreement or instrument to which the Company   or any Subsidiary is bound or by which the Company or any Subsidiary 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 or any Subsidiary, (c) violate   any provision of any statute or other rule or regulation of any Governmental Authority   applicable to the Company or any Subsidiary or (d) contravene, result in any breach of, or   constitute a default under any indenture, mortgage, deed of trust, loan, purchase or credit   agreement, lease, shareholders agreement or any other agreement or instrument to which the     





 







   -12-      Company or any Subsidiary is bound or by which the Company or any Subsidiary or any of   their respective properties may be bound or affected if such contravention, breach or default   could reasonably be expected to result in any liability to any Purchaser.   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, delivery or performance by the Company of this   Agreement or the Notes, other than (a) routine filings after the date of this Agreement with the   SEC and/or state Blue Sky authorities, if any, and (b) those orders identified in the applicable   Request for Purchase, which orders have been duly issued, are final and in full force and effect,   no appeal, review or contest thereof is pending and the time for appeal or to seek review or   reconsideration thereof has expired or which form a part of notice filings to be filed after the   applicable Closing.     Section 5.8 Litigation; Observance, Statutes and Orders.   (a) There are no actions, suits, investigations or proceedings pending or, to the   best knowledge of the Company, threatened against or affecting the Company or any   Subsidiary or any property of the Company or any Subsidiary in any court or before any   arbitrator of any kind or before or by any Governmental Authority that would,   individually or in the aggregate, reasonably be expected to have a Material Adverse   Effect.   (b) Neither the Company nor any Subsidiary is (1) in violation of any order,   judgment, decree or ruling of any court, arbitrator or Governmental Authority or (2) in   violation of any applicable law, ordinance, rule or regulation of any Governmental   Authority (including, without limitation, Environmental Laws, the USA PATRIOT Act   or any of the other laws and regulations that are referred to in Section 5.16), in each case,   which violation would, individually or in the aggregate, reasonably be expected to have a   Material Adverse Effect.   Section 5.9 Taxes.  The Company and its Subsidiaries have filed all tax returns that   to the knowledge of the Company 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, individually or in the aggregate, is not 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 U.S. federal income tax liabilities of the   Company and its Subsidiaries have been finally determined (whether by reason of completed   audits or the statute of limitations having run) for all fiscal years up to and including the fiscal   year ended December 31, 2011.   Section 5.10 Title to Property; Leases.  The Company and its Subsidiaries have   good and sufficient title to their respective Material properties, including all such properties   reflected in the most recent audited balance sheet referred to in Section 5.5 (except as sold or     





 







   -13-      otherwise disposed of in the ordinary course of business) or purported to have been acquired by   the Company or any Subsidiary after such 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,   except for defects in title 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.  The Company and its Subsidiaries own or   possess all licenses, permits, franchises, authorizations, patents, copyrights, proprietary   software, service marks, trademarks and trade 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, individually or in the aggregate,   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 Plans, and no event, transaction or   condition has occurred or exists that would, individually or in the aggregate, reasonably   be expected to result in the incurrence of any such liability by the Company or any   ERISA Affiliate, or in the imposition of any Lien on any of the rights, properties or assets   of the Company or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA   or to section 430(k) of the Code or to any such penalty or excise tax provisions under the   Code or federal law or section 4068 of ERISA or by the granting of a security interest in   connection with the amendment of a Plan, other than such penalties, excise taxes,   liabilities or Liens that would not, individually or in the aggregate, reasonably be   expected to result in a Material Adverse Effect.    (b) The present value of the aggregate benefit liabilities under each of the   Plans (other than Multiemployer Plans), determined as of December 31, 2014, which as   of the date of this Agreement was 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   actuarial valuation report, did not exceed the aggregate current value of the assets of such   Plan allocable to such benefit liabilities by more than $15,066,120 in the case of any   single Plan and by more than $16,304,539 in the aggregate for all Plans and such   amounts, together with any increases therein occurring after December 31, 2014, would   not reasonably be expected to result in a Material Adverse Effect.  The term “benefit   liabilities” has the meaning specified in section 4001 of ERISA and the terms “current   value” and “present value” have the meaning specified in section 3 of ERISA.   (c) The Company and its ERISA Affiliates have not incurred, and do not   presently expect to incur, withdrawal liabilities under section 4201 or 4204 of ERISA in   respect of Multiemployer Plans that would, individually or in the aggregate, reasonably   be expected to result in a Material Adverse Effect.      





 







   -14-      (d) The expected postretirement 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 and its Subsidiaries is not Material.    (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 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 to each   Purchaser in the first sentence of this Section 5.12(e) 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 to be 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   acting on its behalf has offered the Notes or any similar Securities for sale to, or solicited any   offer to buy the Notes or any similar Securities from, or otherwise approached or negotiated in   respect thereof with, any Person other than the Purchasers and other Institutional Accredited   Investors, each of which has been offered the Notes at a private sale for investment.  Neither   the Company nor anyone acting 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 or to the registration requirements of any Securities or blue sky laws of any   applicable jurisdiction.    Section 5.14 Use of Proceeds; Margin Regulations.  The Company will apply the   proceeds of the sale of the Notes as set forth in the applicable Request for Purchase.  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 5% 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 5%   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 Indebtedness.   (a) Neither the Company nor any of its Subsidiaries has outstanding any   Indebtedness except as permitted by Section 10.3.  Neither the Company nor any   Subsidiary is in default and no waiver of default is currently in effect, in the payment of   any principal or interest on any Indebtedness of the Company or such Subsidiary and no   event or condition exists with respect to any Indebtedness of the Company or any   Subsidiary that would permit (or that with notice or the lapse of time, or both, would     





 







   -15-      permit) one or more Persons to cause such Indebtedness to become due and payable   before its stated maturity or before its regularly scheduled dates of payment.    (b) Neither the Company nor any Subsidiary is a party to, or otherwise subject   to any provision contained in, any instrument evidencing Indebtedness of the Company   or such Subsidiary, any agreement relating thereto or any other agreement (including, but   not limited to, its charter or any other organizational document) that limits the amount of,   or otherwise imposes restrictions on the incurring of, Indebtedness of the Company,   except as disclosed in Schedule 5.15.    Section 5.16 Foreign Assets Control Regulations, Etc.   (a) Neither the Company nor any Controlled Entity is (1) a Person whose   name appears on the list of Specially Designated Nationals and Blocked Persons   published by the Office of Foreign Assets Control, United States Department of the   Treasury (“OFAC”) (an “OFAC Listed Person”) (2) an agent, department, or   instrumentality of, or is otherwise beneficially owned by, controlled by or acting on   behalf of, directly or indirectly, (i) any OFAC Listed Person or (ii) any Person, entity,   organization, foreign country or regime that is subject to any OFAC Sanctions Program,   or (3) otherwise blocked, subject to sanctions under or engaged in any activity in   violation of other United States economic sanctions, including but not limited to, the   Trading with the Enemy Act, the International Emergency Economic Powers Act,   CISADA or any similar law or regulation with respect to Iran or any other country, the   Sudan Accountability and Divestment Act, any OFAC Sanctions Program, or any   economic sanctions regulations administered and enforced by the United States or any   enabling legislation or executive order relating to any of the foregoing (collectively,   “U.S. Economic Sanctions”) (each OFAC Listed Person and each other Person, entity,   organization and government of a country described in clause (1), clause (2) or clause (3),   a “Blocked Person”).  Neither the Company nor any Controlled Entity has been notified   that its name appears or may in the future appear on a state list of Persons that engage in   investment or other commercial activities in Iran or any other country that is subject to   U.S. Economic Sanctions.    (b) No part of the proceeds from the sale of the Notes hereunder 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, (1) in connection with   any investment in, or any transactions or dealings with, any Blocked Person, or (2)   otherwise in violation of U.S. Economic Sanctions.    (c) Neither the Company nor any Controlled Entity, within the last five years,   (1) has been found in violation of, charged with, or convicted of, money laundering, drug   trafficking, terrorist-related activities or other money laundering predicate crimes under   the Currency and Foreign Transactions Reporting Act of 1970 (otherwise known as the   Bank Secrecy Act), the USA PATRIOT Act or any other United States law or regulation   governing such activities (collectively, “Anti-Money Laundering Laws”) or any U.S.   Economic Sanctions violations, (2) to the Company’s actual knowledge after making due   inquiry, is under investigation by any Governmental Authority for possible violation of     





 







   -16-      Anti-Money Laundering Laws or any U.S. Economic Sanctions violations, (3) has been   assessed civil penalties under any Anti-Money Laundering Laws or any U.S. Economic   Sanctions, or (4) has had any of its funds seized or forfeited in an action under any Anti-   Money Laundering Laws.  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 reasonably be expected to   continue to be in compliance with all applicable current and future Anti-Money   Laundering Laws and U.S. Economic Sanctions.    (d) (1) Neither the Company nor any Controlled Entity, within the last   five years, (i) has been charged with, or convicted of bribery or any other anti-corruption   related activity under any applicable law or regulation in a U.S. or any non-U.S. country   or jurisdiction, including but not limited to, the U.S. Foreign Corrupt Practices Act and   the U.K.  Bribery Act 2010 (collectively, “Anti-Corruption Laws”), (ii) to the   Company’s actual knowledge after making due inquiry, is under investigation by any   U.S. or non-U.S. Governmental Authority for possible violation of Anti-Corruption   Laws, (iii) has been assessed civil or criminal penalties under any Anti-Corruption Laws   or (iv) has been or is the target of sanctions imposed by the United Nations or the   European Union;    (2) To the Company’s actual knowledge after making due inquiry,   neither the Company nor any Controlled Entity has, within the last five years, directly or   indirectly offered, promised, given, paid or authorized the offer, promise, giving or   payment of anything of value to a Governmental Official or commercial counterparty for   the purposes of:  (i) influencing any act, decision or failure to act by a Governmental   Official in his or her official capacity or such commercial counterparty, (ii) inducing a   Governmental Official to do or omit to do any act in violation of the Governmental   Official’s lawful duty, or (iii) inducing a Governmental Official or a commercial   counterparty to use his or her influence with a government or instrumentality to affect   any act or decision of such government or entity; in each case in order to obtain, retain or   direct business or to otherwise secure an improper advantage in violation of any   applicable law or regulation or which would cause any holder to be in violation of any   law or regulation applicable to such holder; and    (3) No part of the proceeds from the sale of the Notes hereunder will   be used, directly or indirectly, for 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.  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   reasonably be expected to continue to be in compliance with all applicable current and   future Anti-Corruption Laws.    Section 5.17 Status under Certain Statutes.  The Company is not an “investment   company” or a company “controlled” by an “investment company,” within the meaning of the   Investment Company Act of 1940, as amended.  The Company is not a “holding company” or   a “subsidiary company” or an “affiliate” of a “holding company” within the meaning of the     





 







   -17-      Energy Policy Act of 2005, and is not a “public utility” within the meaning of the Federal   Power Act, as amended.  By purchasing the Notes, no Purchaser will be (a) a “public utility   company,” a “holding company” or an “affiliate” of a “holding company” or a “subsidiary   company” of a “holding company” within the meaning of the Energy Policy Act of 2005, (b) a   “transmitting utility” or an “electric utility” within the meaning of the Federal Power Act, as   amended, (c) a “public utility” or an “electric utility” under Delaware law, Florida law,   Maryland law or the law of any other state or (d) subject to the jurisdiction of the FERC, the   Public Service Commission of the State of Delaware, the Public Service Commission of the   State of Florida or any other commission or Person in any other state.   Section 5.18 Environmental Matters.     (a) Neither the Company nor any Subsidiary has actual knowledge of any   claim or has received any notice of any claim and no proceeding has been instituted   asserting any claim against the Company or any of its Subsidiaries or any of their   respective real properties or other assets now or formerly owned, leased or operated by   any of them, 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.    (b) Neither the Company nor any Subsidiary has actual knowledge of any   facts which would reasonably be expected to 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, individually or in the aggregate, reasonably be expected to result in a Material   Adverse Effect.    (c) Neither the Company nor any Subsidiary has stored any Hazardous   Materials on real properties now or formerly owned, leased or operated by any of them in   a manner which is contrary to any Environmental Law that would, individually or in the   aggregate, reasonably be expected to result in a Material Adverse Effect.    (d) Neither the Company nor any Subsidiary has disposed of any Hazardous   Materials in a manner which is contrary to any Environmental Law that would,   individually or in the aggregate, reasonably be expected to result in a Material Adverse   Effect.    (e) All buildings on all real properties now owned, leased or operated by the   Company or any Subsidiary are in compliance with applicable Environmental Laws,   except where failure to comply could not, individually or in the aggregate, reasonably be   expected to result in a Material Adverse Effect.   Section 5.19 Notes Rank Pari Passu.  The obligations of the Company under this   Agreement and the Notes rank pari passu in right of payment with all other unsecured senior   Indebtedness (actual or contingent) of the Company.     





 







   -18-      Section 5.20 Hostile Tender Offers.  None of the proceeds of the sale of any Notes   will be used to finance a Hostile Tender Offer.   SECTION 6. REPRESENTATIONS OF THE PURCHASERS.    Section 6.1 Purchase for Investment.  Each Purchaser severally represents that   (a) 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   their property shall at all times be within such Purchaser’s or their control and (b) it is an   “accredited investor” as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the   Securities Act (an “Institutional Accredited Investor”).  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.    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    (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 the 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      





 







   -19-      (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 (1) the identity of such QPAM and (2) 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    (h) the Source does not include assets of any employee benefit plan, other   than a plan exempt from the coverage of ERISA.    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 a Note that is an Institutional Investor:      





 







   -20-      (a) Quarterly Statements — within 60 days (or such shorter period as is the   earlier of (x) 15 days greater than the period applicable to the filing of the Company’s   Quarterly Report on Form 10-Q (the “Form 10-Q”) with the SEC regardless of whether   the Company is subject to the filing requirements thereof and (y) the date by which such   financial statements are required to be delivered under any Material Credit Facility or the   date on which such corresponding financial statements are delivered under any Material   Credit Facility if such delivery occurs earlier than such required delivery date) 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 balance sheet of the Company and its Subsidiaries   as at the end of such quarter, and    (2) consolidated statements of income, stockholders’ equity and cash   flows of the Company and its Subsidiaries, 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 year-end adjustments, provided that delivery within the time   period specified above of copies of the Company’s Form 10-Q prepared in compliance   with the requirements therefor and filed with the SEC shall be deemed to satisfy the   requirements of this Section 7.1(a);    (b) Annual Statements — within 120 days (or such shorter period as is the   earlier of (x) 15 days greater than the period applicable to the filing of the Company’s   Annual Report on Form 10-K (the “Form 10-K”) with the SEC regardless of whether the   Company is subject to the filing requirements thereof and (y) the date by which such   financial statements are required to be delivered under any Material Credit Facility or the   date on which such corresponding financial statements are delivered under any Material   Credit Facility if such delivery occurs earlier than such required delivery date) after the   end of each fiscal year of the Company, duplicate copies of,   (1) a consolidated balance sheet of the Company and its Subsidiaries   as at the end of such year,    (2) consolidated statements of income, stockholders’ equity and cash   flows of the Company and its Subsidiaries for such year, and   (3) consolidating balance sheets and statements of income of the   Company and its Subsidiaries 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, and accompanied by an opinion     





 







   -21-      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 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 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 Securities Exchange Act of 1934) prepared in accordance with the requirements   therefor and filed with the SEC, shall be deemed to satisfy the requirements of this   Section 7.1(b);    (c) Audit Reports — promptly upon receipt thereof, one copy of each other   report submitted to the Company or any Subsidiary by independent accountants in   connection with any annual, interim or special audit made by them of the books of the   Company or any Subsidiary;   (d) SEC and Other Reports — promptly upon their becoming available, one   copy of (1) each financial statement, report, notice or proxy statement sent by the   Company or any Subsidiary 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 prospectus and all amendments thereto (other than   registration statements on Form S-8 and any corresponding prospectus) filed by the   Company or any Subsidiary with the SEC;    (e) Notice of Default or Event of Default — promptly, 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;    (f) Report on Proceedings — promptly upon the Company’s making public   information with respect to (1) any proposed or pending investigation of it or any   Subsidiary by any Governmental Authority, or (2) any court or administrative   proceeding, that in either case would reasonably be expected to have a Material Adverse   Effect, a notice specifying its nature and the action the Company is taking with respect   thereto;   (g) ERISA Matters — promptly, and in any event within 10 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:      





 







   -22-      (1) with respect to any Plan, 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 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) any event, transaction or condition that could result 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 Plans, or in the imposition of any Lien on any of the rights, properties or assets   of the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA or   such penalty or excise tax provisions, if such penalty, excise tax, liability or Lien,   taken together with any other such liabilities or Liens then existing, would   reasonably be expected to have a Material Adverse Effect;    (h) Annual Regulatory Reports — promptly upon their becoming available,   copies of each annual report required to be filed by the Company or any Subsidiary with   any of the State Commissions or with the FERC;    (i) Resignation or Replacement of Auditors — within 10 days following the   date on which the Company’s independent auditors resign or the Company elects to   change independent auditors, as the case may be, notification thereof, together with such   supporting information as the Required Holders may request; and   (j) 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 any of its Subsidiaries (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 holder of a Note.   Section 7.2 Officer’s Certificate.  Each set of financial statements delivered to a   holder of a Note pursuant to Section 7.1(a) or Section 7.1(b) shall be accompanied by a   certificate of a Senior Financial Officer:    (a) Covenant Compliance — setting forth the information from such financial   statements that is required in order to establish whether the Company was in compliance   with the requirements of Section 10 during the quarterly or annual period covered by the   statements then being furnished, (including with respect to each such provision that   involves mathematical calculations, the information from such financial statements that is   required to perform such calculations) and detailed calculations of the maximum or   minimum amount, ratio or percentage, as the case may be, permissible under the terms of     





 







   -23-      such Section, 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 22.2) 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 — certifying 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 or, if any such condition or event existed or   exists 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 Visitation.  The Company shall permit the representatives of each   holder of a Note that is an Institutional Investor:    (a) No Default — if no Default or Event of Default then exists, at the expense   of such holder and upon reasonable prior notice to the Company, to visit the principal   executive office of the Company, to discuss the affairs, finances and accounts of the   Company and its Subsidiaries 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 and each Subsidiary, all at such reasonable times and as often   as may be reasonably requested in writing; and    (b) Default — if a Default or Event of Default then exists, at the expense of   the Company to visit and inspect any of the offices or properties of the Company or any   Subsidiary, 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 and its Subsidiaries), all at such times and as often   as may be requested.    Section 7.4 Electronic Delivery.  Financial statements, opinions of independent   certified public accountants, other information and Officers’ Certificates that are required to be   delivered by the Company pursuant to Sections 7.1(a), (b) or (d) 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 are   delivered to each holder of a Note by e-mail;      





 







   -24-      (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://chpk.com as of the date of this Agreement;    (c) such financial statements satisfying the requirements of Section 7.1(a) or   Section 7.1(b) and related Officer’s Certificate satisfying the requirements of Section 7.2   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    (d) the Company shall have filed any of the items referred to in Section 7.1(d)   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 Purchaser and   each holder of Notes has free access;    provided however, that in the case of any of clauses (b), (c) or (d), upon the request of any holder   of a Note that is an Institutional Investor to receive written notice of posting and/or paper copies   of such forms, financial statements and Officer’s Certificates, (1) the Company shall give such   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, and (2) the Company will promptly e-   mail such documents or deliver such paper copies, as the case may be, to such holder.  Each   holder of Notes that is an Institutional Investor shall be solely responsible for requesting delivery   to it or maintaining its copies of such documents.    SECTION 8. PAYMENT AND PREPAYMENT OF THE NOTES.    Section 8.1 Required Prepayments; Maturity.     Each Series of Notes shall be subject to required prepayments, if any, set forth in the   Notes of such Series, provided that upon any partial prepayment of the Notes of any Series   pursuant to Section 8.2, the principal amount of each required prepayment of the Notes of such   Series becoming due under this Section 8.1 on and after the date of such prepayment shall be   reduced in the same proportion as the aggregate unpaid principal amount of the Notes of such   Series is reduced as a result of such prepayment.   As provided therein, the entire unpaid principal balance of each Note shall be due and   payable on the Maturity Date thereof.   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, any Series of Notes, in an amount not less than $1,000,000 (and integral multiples   of $100,000 in excess thereof) of the aggregate principal amount of such Series of Notes then   outstanding in the case of a partial prepayment, at 100% of the principal amount so prepaid,   and the Make-Whole Amount determined for the prepayment date with respect to such   principal amount.  The Company will give each holder of the Series of Notes to be prepaid   written notice of each optional prepayment under this Section 8.2 not less than 10 days and not   more than 60 days prior to the date fixed for such prepayment unless the Company and the     





 







   -25-      Required Holders agree to another time period pursuant to Section 17.  Each such notice shall   specify such date (which shall be a Business Day), the aggregate principal amount of the Series   of 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 the Series of Notes to be   prepaid a certificate of a Senior Financial Officer specifying the calculation of such Make-   Whole Amount as of the specified prepayment date.    Section 8.3 Allocation of Partial Prepayments.  In the case of any partial   prepayment of the Notes of any Series pursuant to any required prepayments, if any, set forth   in the Notes of such Series or Section 8.2, the principal amount of the Notes of such Series to   be prepaid shall be allocated among all of the Notes of such Series at the time outstanding in   proportion, as nearly as practicable, to the respective unpaid principal amounts thereof not   theretofore called for prepayment.    Section 8.4 Maturity; Surrender, Etc.  In the case of each optional prepayment of   Notes of any Series 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, 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 of any Series except (a) upon the payment or prepayment of the Notes of   such Series in accordance with this Agreement and the Notes of such Series or (b) pursuant to   an offer to purchase made by the Company or an Affiliate pro rata to the holders of all Notes of   such Series at the time outstanding upon the same terms and conditions.  Any such offer shall   provide each holder of a Note of such Series with sufficient information to enable it to make an   informed decision with respect to such offer, and shall remain open for at least 20 Business   Days.  If the holders of more than 25% of the principal amount of the Notes of such Series then   outstanding accept such offer, the Company shall promptly notify the remaining holders of   Notes of such Series of such fact and the expiration date for the acceptance by holders of Notes   of such Series of such offer shall be extended by the number of days necessary to give each   such remaining holder at least five 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 this Agreement and no Notes may   be issued in substitution or exchange for any such Notes.    Section 8.6 Make-Whole Amount.      





 







   -26-      “Make-Whole Amount” means, 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” means, with respect to any Note, the principal of such Note that is to   be prepaid pursuant to Section 8.2 or Section 8.8 or has become or is declared to be immediately   due and payable pursuant to Section 12.1, as the context requires.    “Discounted Value” means, 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” means, 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   City 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   ask-side 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 (i) the U.S. Treasury   constant maturity so reported with the term closest to and greater than such Remaining Average   Life and (ii) 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.      





 







   -27-      “Remaining Average Life” means, with respect to any Called Principal, the number of   years obtained by dividing (a) such Called Principal into (b) the sum of the products obtained by   multiplying (1) the principal component of each Remaining Scheduled Payment with respect to   such Called Principal by (2) 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” means, 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 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 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 8.4 or   Section 12.1.    “Settlement Date” means, 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 Section 8.8 or has become   or is declared to be immediately due and payable pursuant to Section 12.1, as the context   requires.    Section 8.7 Payments Due on Non-Business Days.  Anything in this Agreement or   the Notes to the contrary notwithstanding, (a) subject to clause (b), any payment of interest on   any Note that is due on a date that is not 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; and (b) any payment of principal of or Make-   Whole Amount on any Note (including principal due on the Maturity Date of such Note) that is   due on a date that is not a Business Day 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 8.8 Offer to Prepay Upon Diversification Event.  If, at any time, the   aggregate net book value of all assets that are used in the regulated utilities business segments   of the Company and its Subsidiaries is less than 50% of Consolidated Total Assets (a   “Diversification Event”), each holder of any of the Notes then outstanding may elect, at its   option, by written notice to the Company, to declare the outstanding Notes held by such holder   to be due and payable on the next Business Day after the 30th day following such notice (the   “Diversification Event Prepayment Date”).  Upon such election by any holder of the Notes,   the Company will pay the aggregate principal amount of such holder’s Notes on the   Diversification Event Prepayment Date, together with interest accrued to the Diversification   Event Prepayment Date on such principal amount, and an amount equal to the Make-Whole   Amount, if any, applicable to such payment.  Upon the occurrence of a Diversification Event,   the Company shall deliver to each holder of the outstanding Notes a notice that such event has   occurred and the reason or reasons for such occurrence.  Two Business Days prior to the   Diversification Event Prepayment Date, the Company shall deliver to each holder of Notes a     





 







   -28-      certificate of a Senior Financial Officer specifying the calculation of such Make-Whole   Amount as of the Diversification Event Prepayment Date.   SECTION 9. AFFIRMATIVE COVENANTS.    The Company covenants that so long as any of the Notes are outstanding:    Section 9.1 Compliance with Laws.  Without limiting Section 10.7, 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, 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, individually   or in the aggregate, reasonably be expected to have a Material Adverse Effect.    Section 9.2 Insurance.  The Company will, and will cause each of its Subsidiaries   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 similarly situated.    Section 9.3 Maintenance of Properties.  The Company will, and will cause each of   its Subsidiaries 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 or any Subsidiary 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, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.    Section 9.4 Payment of Taxes.  The Company will, and will cause each of its   Subsidiaries to, file all income or similar tax returns required to be filed in any jurisdiction and   to 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, charge or levy if (a) 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 (b) the nonpayment of all such taxes, assessments, charges or levies   would not, individually or in the aggregate, reasonably be expected to have a Material Adverse   Effect.      





 







   -29-      Section 9.5 Corporate Existence, Etc.  Subject to Section 10.2, the Company will   at all times preserve and keep its corporate existence in full force and effect.  Subject to   Sections 10.2 and 10.5, the Company will at all times preserve and keep in full force and effect   the corporate existence of each of its Subsidiaries (unless merged into the Company or a   Wholly-Owned Subsidiary) and all rights and franchises of the Company and its Subsidiaries   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,   individually or in the aggregate, have a Material Adverse Effect.    Section 9.6 Books and Records.  The Company will, and will cause each of its   Subsidiaries to, maintain proper books of record and account in conformity with GAAP and all   applicable requirements of any Governmental Authority having legal or regulatory jurisdiction   over the Company or such Subsidiary, as the case may be.  The Company will, and will cause   each of its Subsidiaries to, keep books, records and accounts which, in reasonable detail,   accurately reflect all transactions and dispositions of assets.  The Company and its Subsidiaries   have devised a system of internal accounting controls sufficient to provide reasonable   assurances that their respective books, records, and accounts accurately reflect all transactions   and dispositions of assets and the Company will, and will cause each of its Subsidiaries to,   continue to maintain such system.    Section 9.7 Subsidiary Guarantors.  The Company will cause each of its   Subsidiaries that guarantees or otherwise becomes liable at any time, whether as a borrower or   an additional or co-borrower or otherwise, for or in respect of any Indebtedness under any   Material Credit Facility to concurrently therewith:    (a) enter into an agreement in form and substance satisfactory to the Required   Holders providing for the guaranty by such Subsidiary, on a joint and several basis with   all other such Subsidiaries, of (1) the prompt payment in full when due of all amounts   payable by the Company pursuant to the Notes (whether for principal, interest, Make-   Whole Amount or otherwise) and this Agreement, including, without limitation, all   indemnities, fees and expenses payable by the Company thereunder and (2) the prompt,   full and faithful performance, observance and discharge by the Company of each and   every covenant, agreement, undertaking and provision required pursuant to the Notes or   this Agreement to be performed, observed or discharged by it (a “Subsidiary   Guaranty”); and    (b) deliver the following to each holder of a Note:    (1) an executed counterpart of such Subsidiary Guaranty;    (2) a certificate signed by an authorized responsible officer of such   Subsidiary containing representations and warranties on behalf of such Subsidiary   to the same effect, mutatis mutandis, as those contained in Sections 5.1, 5.2, 5.6   and 5.7 of this Agreement (but with respect to such Subsidiary and such   Subsidiary Guaranty rather than the Company);      





 







   -30-      (3) all documents as may be reasonably requested by the Required   Holders to evidence the due organization, continuing existence and good standing   of such Subsidiary and the due authorization by all requisite action on the part of   such Subsidiary of the execution and delivery of such Subsidiary Guaranty and   the performance by such Subsidiary of its obligations thereunder; and    (4) an opinion of counsel reasonably satisfactory to the Required   Holders covering such matters relating to such Subsidiary and such Subsidiary   Guaranty as the Required Holders may reasonably request.    (c) If at any time, pursuant to the terms and conditions of any Material Credit   Facility, a Subsidiary Guarantor is discharged and released from its guaranty of   Indebtedness under such Material Credit Facility and (1) such Subsidiary Guarantor is no   longer a borrower or an additional or co-borrower under such Material Credit Facility or   a guarantor, borrower or additional or co-borrower under any other Material Credit   Facility and (2) the Company shall have delivered to each holder of a Note an Officer’s   Certificate certifying that (i) the conditions specified in clause (1) above have been   satisfied and (ii) immediately before the release of such Subsidiary Guarantor from its   Subsidiary Guaranty and after giving effect thereto, no Default or Event of Default shall   have existed or would exist, then, upon receipt by the holders of Notes of such Officer’s   Certificate, such Subsidiary Guarantor will be discharged and released, automatically and   without the need for any further action, from its obligations under its Subsidiary   Guaranty; provided that, if in connection with any release of a Subsidiary Guarantor from   its guaranty of Indebtedness under such Material Credit Facility any fee or other   consideration (excluding any repayment of the principal or interest or payment of any   pre-existing prepayment of similar repayment fee under such Material Credit Facility in   connection with such release) is paid or given to any holder of Indebtedness under such   Material Credit Facility in connection with such release, each holder of a Note shall   receive equivalent consideration on a pro rata basis (determined, in respect of revolving   credit facilities, based upon the commitment in effect thereunder rather than amounts   outstanding thereunder) in connection with such Subsidiary Guarantor’s release from its   Subsidiary Guaranty.  Without limiting the foregoing, for purposes of further assurance,   each holder of a Note agrees to provide to the Company and such Subsidiary Guarantor,   if reasonably requested by the Company or such Subsidiary Guarantor and at the   Company’s expense, written evidence of such discharge and release signed by such   Purchaser or holder.   SECTION 10. NEGATIVE COVENANTS.    The Company covenants that so long as any of the Notes are outstanding:   Section 10.1 Transactions with Affiliates.  The Company will not, and will not   permit any Subsidiary to, enter into directly or indirectly any Material transaction or Material   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 or another Subsidiary), except pursuant to the reasonable requirements of the   Company’s or such Subsidiary’s business and upon fair and reasonable terms no less favorable     





 







   -31-      to the Company or such Subsidiary than would be obtainable in a comparable arm’s-length   transaction with a Person not an Affiliate; provided that the foregoing restriction shall not   apply to the payment or grant of reasonable compensation, benefits and indemnities to any   director or officer of the Company or any Subsidiary.  Notwithstanding the foregoing, nothing   in this Section 10.1 shall restrict transactions with any Affiliate that have been approved by or   are entered into pursuant to any orders or decisions of any Governmental Authority having   jurisdiction over the Company or any of its Subsidiaries.   Section 10.2 Merger, Consolidation.  The Company will not, and will not permit   any Subsidiary to, be a party to any merger or consolidation or sell, lease or otherwise transfer   all or substantially all of its assets in a single transaction or series of transactions, provided that   the Company may merge or consolidate with, or sell all or substantially all of its assets to,   another Person if all of the following conditions are met:   (a) the surviving or acquiring entity is a solvent corporation or limited   liability company organized and existing under the laws of the United States or any State   thereof (including the District of Columbia);    (b) the surviving or acquiring corporation or limited liability company, if not   the Company, shall have executed and delivered to each Purchaser and each holder of a   Note its assumption of the due and punctual performance and observance of each   covenant and condition of this Agreement and the Notes; and    (c) immediately before and immediately after giving effect to such   transaction, the surviving or acquiring corporation or limited liability company would be   in compliance with Section 10.3 (provided that, in the case of Section 10.3(a), all   Indebtedness is determined as of such time and not as of the last day of the immediately   preceding fiscal quarter) and no Default or Event of Default shall have occurred and be   continuing;   provided, further, that any Subsidiary may merge or consolidate with or into the Company, any   other Subsidiary or any other Person so long as (1) immediately before and immediately after   giving effect to such transaction, the Company would be in compliance with Section 10.3   (provided that, in the case of Section 10.3(a), all Indebtedness is determined as of such time and   not as of the last day of the immediately preceding fiscal quarter), (2) at the time of such   transaction and immediately after giving effect thereto, no Default or Event of Default shall have   occurred and be continuing, (3) in any merger or consolidation involving the Company, the   Company shall be the surviving or continuing corporation and (4) in any merger or consolidation   involving any Subsidiary and any other Person (other than the Company or another Subsidiary),   (i) such Subsidiary shall be the surviving or continuing entity or (ii) such other Person shall   become a Subsidiary as of the effective time of the merger or consolidation.    No such sale, lease or other transfer of all or substantially all of the assets of the   Company shall have the effect of releasing the Company or any successor corporation or limited   liability company that shall have become such in the manner prescribed in this Section 10.2 from   its liability under this Agreement or the Notes.     





 







   -32-      Section 10.3 Limitations on Indebtedness.     (a) The Company will not, as of the last day of each fiscal quarter of the   Company, permit the aggregate principal amount of all outstanding secured and   unsecured Funded Indebtedness of the Company and secured and unsecured Current and   Funded Indebtedness of Subsidiaries (excluding Indebtedness owed by a Subsidiary to   the Company or a Wholly-Owned Subsidiary) to exceed 65% of Total Capitalization.   (b) The Company will not, at any time, permit the aggregate principal amount   of (1) outstanding Purchase Money Indebtedness of the Company and its Subsidiaries,   plus (2) outstanding Indebtedness secured by Liens permitted pursuant to Sections 10.4(i)   and (j) and (3) outstanding unsecured Current or Funded Indebtedness of Subsidiaries   (excluding (i) the FPU Indebtedness and (ii) Current or Funded Indebtedness owed by a   Subsidiary to the Company or a Wholly-Owned Subsidiary) to exceed 20% of Total   Capitalization.   For the avoidance of doubt, this Section 10.3 does not prohibit the Company from   creating, incurring, becoming liable for or guaranteeing any Current Indebtedness.   Section 10.4 Liens and Encumbrances.  The Company will not, and will not permit   any Subsidiary to, cause or permit or agree or consent to cause or permit in the future (upon the   happening of a contingency or otherwise), any of its property, whether now owned or   subsequently acquired, to be subject to a Lien except:   (a) Liens securing the payment of taxes, assessments or governmental charges   or levies or the demands of suppliers, mechanics, materialmen, repairmen, carriers,   warehousers, landlords and other like Persons, provided that payment thereof is not at the   time required by Section 9.4;   (b) Liens incurred or deposits made in the ordinary course of business (1) in   connection with worker’s compensation, unemployment insurance, social security and   other like laws, (2) to secure the performance of letters of credit, bids, tenders, sales   contracts, leases, statutory obligations, surety, appeal and performance bonds and other   similar obligations or (3) to secure Permitted Commodity Hedging Obligations, in each   case not incurred in connection with the borrowing of money, the obtaining of advances   or the payment of the deferred purchase price of property;   (c) attachment, judgment and other similar Liens arising in connection with   court proceedings, provided that (1) execution and other enforcement are effectively   stayed, (2) all claims which the Liens secure are being actively contested in good faith   and by appropriate proceedings, (3) adequate book reserves have been established with   respect thereto, and (4) the owning company’s right to use its property is not materially   adversely affected thereby;   (d) Liens on property of a Subsidiary, provided that they secure only   obligations owing to the Company or a Wholly-Owned Subsidiary;     





 







   -33-      (e) the Liens existing at the date of this Agreement which are set forth in   Schedule 10.4(e) and any renewal, extension or refunding of any such Lien, provided that   in the case of any such renewal, extension or refunding (1) the principal amount of   Indebtedness 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 before and after such renewal, extension or   refunding, no Default or Event of Default shall have occurred and be continuing;   (f) non-exclusive licenses, leases or subleases granted to other Persons in the   ordinary course of business and not interfering in any material respect with the business   of the Company and its Subsidiaries;   (g) customary bankers’ Liens and rights of setoff arising, in each case, by   operation of law and incurred on deposits made in the ordinary course of business;   (h) Liens securing Purchase Money Indebtedness of the Company or a   Subsidiary, provided that (1) the Purchase Money Indebtedness secured by such Liens is   then permitted by Section 10.3 (provided that, in the case of Section 10.3(a), all   Indebtedness is determined as of the date of the incurrence of such Lien and not as of the   last day of the immediately preceding fiscal quarter) and (2) no such Lien shall extend to   or cover any property not originally subject thereto, other than improvements to the   property originally subject thereto;   (i) (1) any Lien existing on property of a Person immediately prior to its   being consolidated with or merged into the Company or a Subsidiary or its becoming a   Subsidiary, or any Lien existing on any property acquired by the Company or a   Subsidiary at the time such property is so acquired (whether or not the Indebtedness   secured thereby shall have assumed), provided that (i) any Indebtedness secured by such   Liens is then permitted by Section 10.3 (provided that, in the case of Section 10.3(a), all   Indebtedness is determined as of the date of such consolidation or merger, such Person   becoming a Subsidiary or such acquisition, as applicable, and not as of the last day of the   immediately preceding fiscal quarter), (ii) no such Lien shall have been created in   contemplation of such consolidation or merger or such Person’s becoming a Subsidiary   or such acquisition of property and (iii) no such Lien shall extend to or cover any   property not originally subject thereto, other than improvements to the property originally   subject thereto and (2) any renewal, extension or refunding of any Lien in Section   10.4(i)(1), provided that in the case of any such renewal, extension or refunding (i) the   principal amount of Indebtedness secured by such Lien immediately prior to such   extension, renewal or refunding is not increased or the maturity thereof reduced, (ii) such   Lien is not extended to any other property and (iii) immediately before and after such   renewal, extension or refunding, no Default or Event of Default shall have occurred and   be continuing; and   (j) other Liens not otherwise permitted by paragraphs (a) through (i),   inclusive, of this Section 10.4 securing Indebtedness of the Company or its Subsidiaries,   provided, that the Indebtedness secured by such Liens is then permitted by Section 10.3   (provided that, in the case of Section 10.3(a), all Indebtedness is determined as of the date     





 







   -34-      of the incurrence of such Lien and not as of the last day of the immediately preceding   fiscal quarter) and provided further that, notwithstanding the foregoing, the Company   will not, and will not permit any of its Subsidiaries to, secure any Indebtedness   outstanding under or pursuant to any Material Credit Facility pursuant to this Section   10.4(j) unless and until the Notes (and any guaranty delivered in connection therewith)   shall concurrently be secured equally and ratably with such Indebtedness pursuant to   documentation reasonably acceptable to the Required Holders in substance and in form,   including, without limitation, an intercreditor agreement and opinions of counsel to the   Company and/or any such Subsidiary, as the case may be, from counsel that is reasonably   acceptable to the Required Holders.   Section 10.5 Sale of Property and Subsidiary Stock.   (a) The Company will not, and will not permit any Subsidiary to, except in   the ordinary course of business, sell, lease, transfer or otherwise dispose of any of its   assets (not including Excluded Assets); provided that the foregoing restriction does not   apply to the sale of assets for a cash consideration to a Person other than an Affiliate, if   all of the following conditions are met:   (1) the amount of such assets (valued at net book value), together with   all other assets of the Company and Subsidiaries previously disposed of (other   than in the ordinary course of business) as permitted by this Section 10.5(a) and   the assets of any Subsidiary disposed of as permitted by Section 10.5(b)(2) during   the fiscal year in which the disposition occurs does not exceed 10% of   Consolidated Total Assets as of the end of the fiscal year then most recently   ended; provided that assets, as so valued, may be sold in excess of 10% of   Consolidated Total Assets in any fiscal year if either (i) within one year of such   sale, the proceeds from the sale of such assets are used, or committed by the   Company’s Board of Directors to be used, to acquire other assets of at least   equivalent value and earning power, or (ii) with the written consent of the holders   of the Notes, the proceeds from sale of such assets are used immediately upon   receipt to prepay pro rata the Notes of all Series under Section 8.2 and other   senior Funded Indebtedness of the Company; and   (2) in the opinion of the Company’s Board of Directors, the sale is for   fair value and is in the best interest of the Company; and   (3) immediately before and immediately after the consummation of the   sale, and after giving effect thereto, no Default or Event of Default would exist.   For the purpose of this paragraph (a), any transfer by the Company of any assets of its   Florida division and the propane assets of Sharp Energy and Sharpgas located in Florida   to FPU at a time when FPU is a Wholly-Owned Subsidiary shall be deemed to be in the   ordinary course of business.   (b) The Company will not, and will not permit any Subsidiary to, dispose of   its investment in any Subsidiary, and the Company will not, and will not permit any     





 







   -35-      Subsidiary to, issue or transfer any shares of a Subsidiary’s capital stock or any other   Securities exchangeable or convertible into such Subsidiary’s stock (such stock and other   Securities being called “Subsidiary Stock”), if the effect would be to reduce the direct or   indirect proportionate interest of the Company in the outstanding Subsidiary Stock of the   Subsidiary whose shares are the subject of the transaction, provided that these restrictions   do not apply to (1) the issue of directors’ qualifying shares or (2) the sale for a cash   consideration to a Person other than an Affiliate of the entire investment of the Company   and its other Subsidiaries (i) in any Excluded Assets or (ii) in any other Subsidiary   provided the Company would be permitted to dispose of all of the assets of such other   Subsidiary at the time in compliance with the conditions specified in clauses (1), (2) and   (3) of Section 10.5(a).   Section 10.6 Line of Business.  The Company will not, and will not permit any   Subsidiary to, engage in any business if, as a result, the general nature of the business in which   the Company and its Subsidiaries, taken as a whole, would then be engaged would be   substantially changed from the general nature of the business in which the Company and its   Subsidiaries, taken as a whole, are engaged on the date of this Agreement as described in   Schedule 10.6.   Section 10.7 Terrorism Sanctions Regulations.  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 any Person that is the target of   sanctions imposed by the United Nations or by the European Union, (b) directly or indirectly to   have any investment in or engage in any dealing or transaction (including, without limitation,   any investment, dealing or transaction involving the proceeds of the Notes) with any Person if   such investment, dealing or transaction (1) would cause any holder to be in violation of any   law or regulation applicable to such holder, or (2) is prohibited by or subject to sanctions under   any U.S. Economic Sanctions, or (c) engage, nor shall any Affiliate of either engage, in any   activity that could subject such Person or any holder to sanctions under CISADA or any similar   law or regulation with respect to Iran or any other country that is subject to U.S. Economic   Sanctions.   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, if any, 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 7.1(e) or Section 10 (other than Section 10.1); or      





 







   -36-      (d) the Company or any Subsidiary Guarantor defaults in the performance of   or compliance with any term contained herein (other than those referred to in Sections   11(a), (b) and (c)) or in any Subsidiary Guaranty 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 Section 11(d)); or    (e) (1) 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 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 it was made, or (2) any   representation or warranty made in writing by or on behalf of any Subsidiary Guarantor   or by any officer of such Subsidiary Guarantor in any Subsidiary Guaranty or any writing   furnished in connection with such Subsidiary Guaranty proves to have been false or   incorrect in any material respect on the date as of which it was 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 Indebtedness that is outstanding in an aggregate   principal amount of at least $15,000,000 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 Indebtedness in an   aggregate outstanding principal amount of at least $15,000,000 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 Indebtedness has become, or has been   declared (or one or more Persons are entitled to declare such Indebtedness 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 Indebtedness to convert such   Indebtedness into equity interests), (i) the Company or any Significant Subsidiary has   become obligated to purchase or repay Indebtedness before its regular maturity or before   its regularly scheduled dates of payment in an aggregate outstanding principal amount of   at least $15,000,000, or (ii) one or more Persons have the right to require the Company or   any Significant Subsidiary so to purchase or repay such Indebtedness; or    (g) the Company or any Significant Subsidiary (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      





 







   -37-      (h) 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    (i) one or more final judgments or orders for the payment of money   aggregating in excess of $15,000,000, including, without limitation, any such final order   enforcing a binding arbitration decision, are rendered against one or more of the   Company and its Significant Subsidiaries and which judgments are not, within 60 days   after entry thereof, bonded, discharged or stayed pending appeal, or are not discharged   within 60 days after the expiration of such stay;    (j) if (1) any Plan shall fail to satisfy the minimum funding standards of   ERISA or the Code for any plan year or part thereof 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 shall have been filed with the PBGC or the   PBGC shall have instituted proceedings under ERISA section 4042 to terminate or   appoint a trustee to administer any Plan or the PBGC shall have notified the Company or   any ERISA Affiliate that a Plan will become a subject of any such proceedings, (3) 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, shall exceed an amount that could reasonably be expected to have a Material   Adverse Effect, (4) the Company or any ERISA Affiliate shall have incurred or is   reasonably expected to incur 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, (5) the   Company or any ERISA Affiliate withdraws from any Multiemployer Plan, or (6) the   Company or any Subsidiary establishes or amends any Plan that provides post-   employment welfare benefits in a manner that would increase the liability of the   Company or any Subsidiary 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; or    (k) any Subsidiary Guaranty shall cease to be in full force and effect other   than a Subsidiary Guaranty that has been released in accordance with Section 9.7(c), any   Subsidiary Guarantor or any Person acting on behalf of any Subsidiary Guarantor shall   contest in any manner the validity, binding nature or enforceability of any Subsidiary   Guaranty, or the obligations of any Subsidiary Guarantor under any Subsidiary Guaranty   are not or cease to be legal, valid, binding and enforceable in accordance with the terms   of such Subsidiary Guaranty.      





 







   -38-      SECTION 12. REMEDIES ON DEFAULT, ETC.    Section 12.1 Acceleration.   (a) If an Event of Default with respect to the Company described in Section   11(g) or (h) (other than an Event of Default described in clause (1) of Section 11(g) or   described in clause (6) of Section 11(g) by virtue of the fact that such clause encompasses   clause (1) of Section 11(g)) 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 Section 11(a) or (b) 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 Notes becoming due and payable under this Section 12.1, whether   automatically or by declaration, such Notes will forthwith mature and the entire unpaid principal   amount of such Notes, plus (x) all accrued and unpaid interest thereon (including, but not limited   to, interest accrued thereon at the applicable Default Rate) and (y) the Make-Whole Amount   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 a 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.  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 Subsidiary Guaranty, 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 Section 12.1(b) or (c), 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     





 







   -39-      (to the extent permitted by applicable law) any overdue interest in respect of the Notes, at the   applicable 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, any Subsidiary Guaranty   or 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(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.    Section 13.2 Transfer and Exchange of Notes.  Upon surrender of any Note to the   Company at the address and to the attention of the designated officer (all as specified in   Section 18(3)), for registration of transfer or exchange (and in the case of a surrender for   registration of transfer accompanied by a written instrument of transfer duly executed by the   registered holder of such Note or such holder’s attorney duly authorized in writing and   accompanied by the relevant name, address and other information 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) of the same Series as such surrendered Note in exchange     





 







   -40-      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 Schedule 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 of a Series, one Note of such Series 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 at the address   and to the attention of the designated officer (all as specified in Section 18(3)) 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 or a Qualified Institutional Buyer, 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 of the same Series as such lost, stolen, destroyed or mutilated 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.    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 PNC Bank, NA 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 becoming due hereunder by the     





 







   -41-      method and at the address specified for such purpose below such Purchaser’s name in such   Purchaser’s Confirmation of Acceptance, 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 a 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 of the same Series   as such Note being sold or otherwise disposed of 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 a Purchaser under this Agreement and that has made the   same agreement relating to such Note as the Purchasers have made in this Section 14.2.    SECTION 15. EXPENSES, ETC.    Section 15.1 Transaction Expenses.  Whether or not the transactions contemplated   hereby are consummated, the Company will pay all costs and expenses (including reasonable   attorneys’ fees of a special counsel and, if reasonably required by the Required Holders, local   or other counsel) incurred by the Purchasers and each other holder of a Note in connection with   such transactions and in connection with any amendments, waivers or consents under or in   respect of this Agreement, any Subsidiary Guaranty or the Notes (whether or not such   amendment, waiver or consent becomes effective) within 15 Business Days after the   Company’s receipt of any invoice therefor, including, without limitation: (a) the costs and   expenses incurred in enforcing or defending (or determining whether or how to enforce or   defend) any rights under this Agreement, any Subsidiary Guaranty or the Notes or in   responding to any subpoena or other legal process or informal investigative demand issued in   connection with this Agreement, any Subsidiary Guaranty or the Notes, or by reason of being a   holder of any Note, (b) the 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 and by   the Notes and any Subsidiary Guaranty and (c) the costs and expenses incurred in connection   with the initial filing of this Agreement and all related documents and financial information   with the SVO provided, that such costs and expenses under this clause (c) shall not exceed   $1,500 per Series of Notes.  In the event that any such invoice is not paid within 15 Business   Days after the Company’s receipt thereof, interest on the amount of such invoice shall be due   and payable at the Default Rate commencing with the 16th Business Day after the Company’s   receipt thereof until such invoice has been paid.  The Company will pay, and will save each   Purchaser and each other holder of a Note harmless from, (1) all claims in respect of any fees,   costs or expenses, if any, of brokers and finders (other than those, if any, retained by a   Purchaser or other holder in connection with its purchase of the Notes) and (2) any and all wire   transfer fees that any bank 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.      





 







   -42-      Section 15.2 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, any Subsidiary Guaranty 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 such 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 Notes and any Subsidiary   Guaranties embody the entire agreement and understanding between each Purchaser 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), only with the written consent of the Company and the Required Holders, except   that:    (a) no amendment or waiver of any of Sections 1, 2, 3, 4, 5, 6 or 21, or any   defined term (as it is used therein), will be effective as to any Purchaser unless consented   to by such Purchaser in writing;    (b) (1) with the written consent of Prudential (and without the consent of any   other holder of Notes), the provisions of Section 2 may be amended or waived (except   insofar as any such amendment or waiver would affect any rights or obligations with   respect to the purchase and sale of Notes which shall have become Accepted Notes prior   to such amendment or waiver), and (2) with the written consent of all of the Purchasers   which shall have become obligated to purchase Accepted Notes of any Series (and not   without the written consent of all such Purchasers), any of the provisions of Sections 2   and 4 may be amended or waived insofar as such amendment or waiver would affect only   rights or obligations with respect to the purchase and sale of the Accepted Notes of such   Series or the terms and provisions of such Accepted Notes; and   (c) no amendment or waiver may, without the written consent of each   Purchaser and the holder of each Note at the time outstanding, (1) subject to 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 (i) interest on the Notes or (ii) the Make-Whole Amount, (2) change the   percentage of the principal amount of the Notes the holders of which are required to     





 







   -43-      consent to any amendment or waiver, or (3) amend any of Sections 8, 11(a), 11(b), 12, 17   or 20.    Section 17.2 Solicitation of Holders of Notes.    (a) Solicitation.  The Company will provide each holder of a Note 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 or any Subsidiary Guaranty, unless such proposed amendment, waiver or   consent relates only to a specific Series of Accepted Notes which have not yet been   purchased, in which case such information will only be required to be delivered to the   Purchasers which shall have become obligated to purchase Accepted Notes of such   Series.  The Company will deliver executed or true and correct copies of each   amendment, waiver or consent effected pursuant to this Section 17 or any Subsidiary   Guaranty to each holder of a Note 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 other credit support, to any holder of a Note or   any such Purchaser described in Section 17.2(a) as consideration for or as an inducement   to the entering into by such holder or such Purchaser of any waiver or amendment of any   of the terms and provisions hereof or of any Subsidiary Guaranty or any Note 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 a Note and   any such Purchaser even if holder did not consent to such waiver or amendment.    (c) Consent in Contemplation of Transfer.  Any consent given pursuant to this   Section 17 or any Subsidiary Guaranty by a holder of a Note that has transferred or has   agreed to transfer its Note to the Company or any other Person in connection with such   consent shall be void and of no force or 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 would not 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 any Subsidiary Guaranty applies equally to all 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 a Note   and no delay in exercising any rights hereunder or under any Note or Subsidiary Guaranty shall   operate as a waiver of any rights of any Purchaser or holder of such Note.      





 







   -44-      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, any Subsidiary Guaranty or the Notes, or have directed the taking of any action   provided herein or in any Subsidiary Guaranty 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 7.4, all notices and communications   provided for hereunder shall be in writing and sent (a) by telecopy if the sender on the same day   sends a confirming copy of such notice by an internationally recognized overnight delivery   service (charges prepaid), (b) by registered or certified mail with return receipt requested   (postage prepaid), or (c) by an internationally recognized overnight delivery service (charges   prepaid).  Any such notice must be sent:    (1) if to any Purchaser or its nominee, to such Purchaser or nominee at   the address specified for such communications in its Confirmation of Acceptance,   or at such other address as such Purchaser or 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, 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.    Notwithstanding anything to the contrary in this Section 18, any communication pursuant   to Section 2 shall be made by the method specified for such communication in Section 2, and   shall be effective to create any rights or obligations under this Agreement only if, in the case of a   telephone communication, an Authorized Officer of the party conveying the information and of   the party receiving the information are parties to the telephone call, and in the case of a   telecopier communication, the communication is signed by an Authorized Officer of the party   conveying the information, addressed to the attention of an Authorized Officer of the party   receiving the information, and in fact received at the telecopier terminal the number of which is   listed for the party receiving the communication in Schedule B or at such other telecopier   terminal as the party receiving the information shall have specified in writing to the party   sending such information.   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     





 







   -45-      any Purchaser at any Closing (except the Notes themselves), and (c) financial statements,   certificates and other information previously or hereafter furnished to any Purchaser or any other   holder of a Note, may be reproduced by such Purchaser or holder by any photographic,   photostatic, electronic, digital, or other similar process and such Purchaser or 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 such Purchaser or holder 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” means information   delivered to Prudential or 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 Prudential or 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 Prudential or such Purchaser prior to the time of such   disclosure, (b) subsequently becomes publicly known through no act or omission by Prudential   or such Purchaser or any Person acting on such Prudential’s or Purchaser’s behalf, (c) otherwise   becomes known to Prudential or such Purchaser other than through disclosure by the Company   or any Subsidiary or (d) constitutes financial statements delivered to Prudential or such   Purchaser under Section 7.1 that are otherwise publicly available.  Each of Prudential and each   Purchaser will maintain the confidentiality of such Confidential Information in accordance with   procedures adopted by Prudential or such Purchaser in good faith to protect confidential   information of third parties delivered to Prudential or such Purchaser, provided that Prudential or   such Purchaser may deliver or disclose Confidential Information to (1) its directors, officers,   employees, agents, attorneys, trustees and affiliates (to the extent such disclosure reasonably   relates to the administration of the investment represented by its Notes), (2) its auditors, financial   advisors and other professional advisors who agree to hold confidential the Confidential   Information substantially in accordance with this Section 20, (3) any other holder of any Note,   (4) any Institutional Investor to which it 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 this Section 20), (5) any Person from which it 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 this Section 20), (6) any federal or state regulatory   authority having jurisdiction over Prudential or 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 Prudential’s or 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 Prudential or such Purchaser, (ii)   in response to any subpoena or other legal process, (iii) in connection with any litigation to     





 







   -46-      which Prudential or such Purchaser is a party or (iv) if an Event of Default has occurred and is   continuing, to the extent Prudential or 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 any Subsidiary Guaranty.    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 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, Prudential or 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 Prudential or 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 or another   Purchaser or any one of such other Purchaser’s Affiliates (a “Substitute Purchaser”) as the   purchaser of the Notes that it has agreed to purchase hereunder, by written notice to the   Company, which notice shall be signed by both such Purchaser and such Substitute Purchaser,   shall contain such Substitute Purchaser’s agreement to be bound by this Agreement and shall   contain a confirmation by such Substitute Purchaser of the accuracy with respect to it of the   representations set forth in Section 6.  Upon receipt of such notice, any reference to such   Purchaser in this Agreement (other than in this Section 21), shall be deemed to refer to such   Substitute Purchaser in lieu of such original Purchaser.  In the event that such Substitute   Purchaser is so substituted as a Purchaser hereunder and such Substitute Purchaser thereafter   transfers to such original Purchaser all of the Notes then held by such Substitute Purchaser, upon   receipt by the Company of notice of such transfer, any reference to such Substitute Purchaser as   a “Purchaser” in this Agreement (other than in this Section 21), shall no longer be deemed to   refer to such Substitute Purchaser, but shall refer to such original Purchaser, and such original   Purchaser shall again 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.    Section 22.2 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, (a) all computations     





 







   -47-      made pursuant to this Agreement shall be made in accordance with GAAP, and (b) all financial   statements shall be prepared in accordance with GAAP.  For purposes of determining   compliance with this Agreement (including, without limitation, Section 9, Section 10 and the   definition of “Indebtedness”), 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 22.3 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 22.4 Construction, Etc.  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.    Section 22.5 Counterparts.  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.    Section 22.6 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 permit the   application of the laws of a jurisdiction other than such State.    Section 22.7 Jurisdiction and Process; Waiver of Jury Trial.    (a) The Company irrevocably submits to the non-exclusive jurisdiction of any   New York State or federal court sitting in the Borough of Manhattan, The City of New   York, over any suit, action or proceeding arising out of or relating to this Agreement or   the Notes.  To the fullest extent permitted by applicable law, the Company irrevocably   waives and agrees not to assert, by way of motion, as a defense or otherwise, any claim   that it is not subject to the jurisdiction of any such court, any objection that it may now or   hereafter have to the laying of the venue of any such suit, action or proceeding brought in   any such court and any claim that any such suit, action or proceeding brought in any such   court has been brought in an inconvenient forum.      





 







   -48-      (b) The Company consents to process being served by or on behalf of any   holder of a Note in any suit, action or proceeding of the nature referred to in Section   22.7(a) by mailing a copy thereof by registered or certified mail (or any substantially   similar form of mail), postage prepaid, return receipt requested, to it at its address   specified in Section 18 or at such other address of which such holder shall then have been   notified pursuant to said Section.  The Company agrees that such service upon receipt   (1) shall be deemed in every respect effective service of process upon it in any such suit,   action or proceeding and (2) shall, to the fullest extent permitted by applicable law, be   taken and held to be valid personal service upon and personal delivery to it.  Notices   hereunder shall be conclusively presumed received as evidenced by a delivery receipt   furnished by the United States Postal Service or any reputable commercial delivery   service.    (c) Nothing in this Section 22.7 shall affect the right of any holder of a Note   to serve process in any manner permitted by law, or limit any right that any holder of a   Note may have to bring proceedings against the Company in the courts of any appropriate   jurisdiction or to enforce in any lawful manner a judgment obtained in one jurisdiction in   any other jurisdiction.    (d) 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 22.8 Transaction References.  Upon prior written consent by the Company,   Prudential may (a) refer to its role in establishing the Facility, as well as the identity of the   Company and the maximum aggregate principal amount of the Notes and the date on which the   Facility was established, on its internet site or in marketing materials, press releases, published   “tombstone” announcements or any other print or electronic medium and (b) display the   Company’s corporate logo in conjunction with any such.   *   *   *   *   *     





 







If you are in agreement with the foregoing, please sign the form of agreement on a   counterpart of this Agreement and return it to the Company, whereupon this Agreement shall   become a binding agreement between you and the Company.   Very truly yours,   CHESAPEAKE UTILITIES CORPORATION   Name: Beth W. Cooper   Title: Senior Vice President and Chief Financial   Officer   [Signature Page to Private Shelf Agreement]    





 







This Agreement is hereby   accepted and agreed to as   of the date hereof.   PRUDENTIAL INV ISTMENT MANAGEMENT, INC.   By:   ______   Vice President   ESignature Page to Private Shelf Agreementi    





 







   SCHEDULE A   (to Note Purchase Agreement)   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:    “Acceptance” is defined in Section 2(f).   “Acceptance Day” is defined in Section 2(f).   “Acceptance Window” is defined in Section 2(f).   “Accepted Note” is defined in Section 2(f).   “Affiliate” means, at any time, (a) 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, (b) with respect to the Company, shall   include any Person beneficially owning or holding, directly or indirectly, 5% or more of any   class of voting or equity interests 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,   5% or more of any class of voting or equity interests and (c) with respect to Prudential, shall   include any managed account, investment fund or other vehicle for which Prudential or any   Prudential Affiliate acts as investment advisor or portfolio manager.  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   securities, 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” means this Private Shelf Agreement, including all Schedules attached to   this Agreement, as it may be amended, restated, supplemented or otherwise modified from time   to time among the Company, Prudential and the Purchasers dated as of October 8, 2015.    “Anti-Corruption Laws” is defined in Section 5.16(d)(1).    “Anti-Money Laundering Laws” is defined in Section 5.16(c).    “Authorized Officer” means (a) in the case of the Company, its chief executive officer,   its chief financial officer, any other Person authorized by the Company to act on behalf of the   Company and designated as an “Authorized Officer” of the Company in Schedule B attached   hereto or any other Person authorized by the Company to act on behalf of the Company and   designated as an “Authorized Officer” of the Company for the purpose of this Agreement in an   Officer’s Certificate executed by the Company’s chief executive officer or chief financial officer   and delivered to Prudential, and (b) in the case of Prudential, any officer of Prudential designated   as its “Authorized Officer” in Schedule B or any officer of Prudential designated as its   “Authorized Officer” for the purpose of this Agreement in a certificate executed by one of its   Authorized Officers or a lawyer in its law department.  Any action taken under this Agreement   on behalf of the Company by any individual who on or after the date of this Agreement shall     





 







   A-2      have been an Authorized Officer of the Company and whom Prudential in good faith believes to   be an Authorized Officer of the Company at the time of such action shall be binding on the   Company even though such individual shall have ceased to be an Authorized Officer of the   Company, and any action taken under this Agreement on behalf of Prudential by any individual   who on or after the date of this Agreement shall have been an Authorized Officer of Prudential   and whom the Company in good faith believes to be an Authorized Officer of Prudential at the   time of such action shall be binding on Prudential even though such individual shall have ceased   to be an Authorized Officer of Prudential.   “Available Facility Amount” is defined in Section 2(a).   “Blocked Person” is defined in Section 5.16(a).    “Business Day” means (a) for the purposes of Section 8.6 only, any day other than a   Saturday, a Sunday or a day on which commercial banks in New York City are required or   authorized to be closed, (b) for the purpose of Section 2 only, a day on which Prudential is open   for business and (c) 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 New York, New York or   Dover, Delaware are required or authorized to be closed.    “Cancellation Date” is defined in Section 2(h)(iv).   “Cancellation Fee” is defined in Section 2(h)(iv).   “CISADA” means the Comprehensive Iran Sanctions, Accountability and Divestment   Act, as amended from time to time.    “Closing” is defined in Section 3.1.    “Closing Day” means, with respect to any Accepted Note, the Business Day specified   for the closing of the purchase and sale of such Accepted Note in the Confirmation of   Acceptance for such Accepted Note, provided that (a) if the Company and the Purchaser which is   obligated to purchase such Accepted Note agree on an earlier Business Day for such closing   (which day may not be less than five Business Days prior to the Acceptance Day for such   Accepted Note), the “Closing Day” for such Accepted Note shall be such earlier Business Day,   and (2) if the closing of the purchase and sale of such Accepted Note is rescheduled pursuant to   Section 3.2, the Closing Day for such Accepted Note, for all purposes of this Agreement except   references to “original Closing Day” in Section 2(h)(3), shall mean the Rescheduled Closing Day   with respect to such Accepted Note.   “Code” means the Internal Revenue Code of 1986, as amended from time to time, and   the rules and regulations promulgated thereunder from time to time.    “Company” means Chesapeake Utilities Corporation, a Delaware corporation or any   successor that becomes such in the manner prescribed in Section 10.2.    “Confidential Information” is defined in Section 20.      





 







   A-3      “Confirmation of Acceptance” is defined in Section 2(f).   “Consolidated Net Worth” means as of any date, the sum of the amounts that would be   shown on a consolidated balance sheet of the Company and its Subsidiaries at such date for (a)   capital stock, (b) capital surplus and (c) stockholders’ equity.   “Consolidated Total Assets” means as of any date the aggregate amount at which the   assets of the Company and its Subsidiaries would be shown on a consolidated balance sheet at   such date.   “Controlled Entity” means (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.  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 securities, by   contract or otherwise.    “Current Indebtedness” with respect to any Person, means all liabilities for borrowed   money and all liabilities secured by any Lien existing on property owned by that Person (whether   or not those liabilities have been assumed) which, in either case, are payable on demand or   within one year from their creation, plus the aggregate amount of Guaranties by that Person of all   such liabilities of other Persons, except: (1) any liabilities which are renewable or extendible at   the option of the debtor to a date more than one year from the date of creation thereof; and (2)   any liabilities which, although payable within one year, constitute principal payments on   indebtedness expressed to mature more than one year from the date of its creation.   “Default” means 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” means, with respect to any Note, that rate of interest that is the greater of   (a) 2.00% per annum above the rate of interest stated in clause (a) of the first paragraph of such   Note or (b) 2.00% over the rate of interest publicly announced by PNC Bank, NA in Pittsburgh,   Pennsylvania as its “base” or “prime” rate.    “Delayed Delivery Fee” is defined in Section 2(h)(3).   “Disclosure Documents” is defined in Section 5.3.    “Diversification Event” is defined in Section 8.8.   “Diversification Event Prepayment Date” is defined in Section 8.8.   “EDGAR” means the SEC’s Electronic Data Gathering, Analysis and Retrieval System   or any successor SEC electronic filing system for such purposes.   “Energy Policy Act of 2005” means the Energy Policy Act of 2005, as amended from   time to time.     





 







   A-4      “Environmental Laws” means 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 having the force of law relating to   pollution and the protection of the environment or the release of any Hazardous Materials into   the environment.    “ERISA” means 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” means 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” means the Securities Exchange Act of 1934, as amended from time to   time.   “Excluded Assets” means (a) each of the following Subsidiaries or the assets of any of   the following Subsidiaries: Sharp Water, Inc.; BravePoint, Inc.; Skipjack, Inc.; Eastern Shore   Real Estate, Inc.; aQuality Company, Inc.; Peninsula Pipeline Company, Inc.; Peninsula Energy   Services Company, Inc.; and Chesapeake OnSight Services, LLC and (b) any Subsidiary that the   Company may create or acquire after the date of this Agreement which is not (1) a “public utility   company,” a “holding company” or an “affiliate” of a “holding company” or a “subsidiary   company” of a “holding company” within the meaning of the Energy Policy Act of 2005 or (2) a   “transmitting utility” within the meaning of the Federal Power Act, as amended.   “Facility” is defined in Section 2(a).   “FERC” means the Federal Energy Regulatory Commission or a successor thereto.   “Financing Lease” means any lease which is shown or is required to be shown in   accordance with GAAP as a liability on a balance sheet of the lessee thereunder.   “Financing Lease Obligation” means the obligation of the lessee under a Financing   Lease.  The amount of a Financing Lease Obligation at any date is the amount at which the   lessee’s liability under the Financing Lease would be required to be shown on its balance sheet at   such date.   “Form 10-K” is defined in Section 7.1(b).    “Form 10-Q” is defined in Section 7.1(a).    “FPU” means Florida Public Utilities Company, a Florida corporation.    “FPU Indebtedness” means FPU’s 9.08% First Mortgage Bonds due June 1, 2022,   which Indebtedness is described on Schedule 5.15.     





 







   A-5      “Funded Indebtedness” with respect to any Person, means without duplication: (a) its   liabilities for borrowed money, other than Current Indebtedness; (b) liabilities secured by any   Lien existing on property owned by the Person (whether or not those liabilities have been   assumed); (c) the aggregate amount of Guaranties by the Person, other than Guaranties which   constitute Current Indebtedness; and (d) its Financing Lease Obligations.   “GAAP” means generally accepted accounting principles as in effect from time to time   in the United States of America.    “Governmental Authority” means    (a) the government of    (1) the United States of America or any state or other political   subdivision thereof, or    (2) any other 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    (b) any entity exercising executive, legislative, judicial, regulatory or   administrative functions of, or pertaining to, any such government.    “Governmental Official” means 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” with respect to any Person, means all guaranties of, and all other obligations   which in effect guaranty, any indebtedness, dividend or other obligation of any other Person (the   “primary obligor”) in any manner (except any indebtedness or other obligation of any   Subsidiary or any Funded Indebtedness of the Company), including obligations incurred through   an agreement, contingent or otherwise, by such Person:   (a) to purchase such indebtedness or obligation or any property constituting   security therefor;   (b) to advance or supply funds   (1) for the purchase or payment of such indebtedness or obligation, or    (2) to maintain working capital or any balance sheet or income   statement condition;   (3) to lease property, or to purchase Securities or other property or   services, primarily for the purpose of assuring the owner of such indebtedness or   obligation of the ability of the primary obligor to make payment of the   indebtedness or obligation; or     





 







   A-6      (4) otherwise to assure the owner of such indebtedness or obligation,   or the primary obligor, against loss;   but excluding endorsements in the ordinary course of business of negotiable instruments for   deposit or collection.   The amount of any Guaranty shall be deemed to be the maximum amount for which such   Person may be liable, upon the occurrence of any contingency or otherwise, under or by virtue of   the Guaranty.   “Hazardous Materials” means any and all pollutants, toxic or hazardous substances or   other materials that have been determined by a Governmental Authority to pose a hazard to   human health and safety, or are regulated as a pollutant, contaminant, petroleum product, coal   combustion residual, manufactured gas plant residual, toxic substance, hazardous substance,   hazardous material or hazardous waste including, but not limited to, asbestos, urea formaldehyde   foam insulation, polychlorinated biphenyls, petroleum, petroleum products, lead based paint,   radon gas, or similar restricted or prohibited substances.    “Hedge Treasury Note(s)” means, with respect to any Accepted Note, the United States   Treasury Note or Notes whose duration (as determined by Prudential) most closely matches the   duration of such Accepted Note.   “holder” means, 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, 8.8, 12, 17.2 and   18 and any related definitions in this Schedule A, “holder” shall mean the beneficial owner of   such Note whose name and address appears in such register.    “Hostile Tender Offer” means, with respect to the use of proceeds of any Note, any   offer to purchase, or any purchase of, shares of capital stock of any corporation or equity   interests in any other entity, or Securities convertible into or representing the beneficial   ownership of, or rights to acquire, any such shares or equity interests, if such shares, equity   interests, Securities or rights are of a class which is publicly traded on any securities exchange or   in any over-the-counter market, other than purchases of such shares, equity interests, Securities   or rights representing less than 5% of the equity interests or beneficial ownership of such   corporation or other entity for portfolio investment purposes, and such offer or purchase has not   been duly approved by the board of directors of such corporation or the equivalent governing   body of such other entity prior to the date on which the Company makes the Request for   Purchase of such Note.   “Indebtedness” means Current Indebtedness and Funded Indebtedness.   “INHAM Exemption” is defined in Section 6.2(e).    “Institutional Accredited Investor” is defined in Section 6.1(b).   “Institutional Investor” means (a) any 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     





 







   A-7      principal amount of the Notes of any Series 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.    “Issuance Fee” is defined in Section 2(h)(2).   “Issuance Period” is defined in Section 2(b).   “Lien” means any interest in property securing an obligation owed to, or a claim by, a   Person other than the owner of the property, whether the interest is based on common law,   statute or contract (including the security interest lien arising from a mortgage, encumbrance,   pledge, conditional sale or trust receipt or a lease, consignment or bailment for security   purposes).  The term “Lien” shall not include minor reservations, exceptions, encroachments,   easements, rights-of-way, covenants, conditions, restrictions and other minor title exceptions   affecting property, provided that they do not constitute security for a monetary obligation.  For   the purposes of this Agreement, the Company or a Subsidiary shall be deemed to be the owner of   any property which it has acquired or holds subject to a Financing Lease or a conditional sale   agreement or other arrangement pursuant to which title to the property has been retained by or   vested in some other Person for security purposes, and such retention or vesting shall be deemed   to be a Lien.   “Make-Whole Amount” is defined in Section 8.6.    “Material” means material in relation to the business, operations, affairs, financial   condition, assets or properties of the Company and its Subsidiaries taken as a whole.    “Material Adverse Effect” means a material adverse effect on (a) the business,   operations, affairs, financial condition, assets or properties of the Company and its Subsidiaries   taken as a whole, (b) the ability of the Company to perform its obligations under this Agreement   and the Notes, (c) the ability of any Subsidiary Guarantor to perform its obligations under its   Subsidiary Guaranty, or (d) the validity or enforceability of this Agreement, the Notes or any   Subsidiary Guaranty.    “Material Credit Facility” means, as to the Company and its Subsidiaries,   (a) each of the agreements in respect of the Indebtedness set forth on   Schedule 5.15 including any renewals, extensions, amendments, supplements,   restatements, replacements or refinancing thereof; and   (b) any other agreement(s) creating or evidencing indebtedness for borrowed   money entered into on or after the date of this Agreement by the Company or any   Subsidiary, or in respect of which the Company or any Subsidiary is an obligor or   otherwise provides a guarantee or other credit support (“Credit Facility”), in a principal   amount outstanding or available for borrowing equal to or greater than $25,000,000 (or   the equivalent of such amount in the relevant currency of payment, determined as of the   date of the closing of such facility based on the exchange rate of such other currency);     





 







   A-8      and if no Credit Facility or Credit Facilities equal or exceed such amounts, then the   largest Credit Facility shall be deemed to be a Material Credit Facility.    “Maturity Date” is defined in the first paragraph of each Note.    “Multiemployer Plan” means any Plan that is a “multiemployer plan” (as such term is   defined in section 4001(a)(3) of ERISA).    “NAIC” means the National Association of Insurance Commissioners or any successor   thereto.    “Notes” is defined in Section 1.    “OFAC” is defined in Section 5.16(a).    “OFAC Listed Person” is defined in Section 5.16(a).    “OFAC Sanctions Program” means 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” means 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” means the Pension Benefit Guaranty Corporation referred to and defined in   ERISA or any successor thereto.    “Permitted Commodity Hedging Obligation” means obligations of the Company with   respect to commodity agreements or other similar agreements or arrangements entered into in the   ordinary course of business designed to protect against, or mitigate risks with respect to,   fluctuations of commodity prices to which the Company or any Subsidiary is exposed to in the   conduct of its business so long as (a) the management of the Company has determined that   entering into such agreements or arrangements are bona fide hedging activities which comply   with the Company’s risk management policies and (b) such agreements or arrangements are not   entered into for speculative purposes and are not of a speculative nature.   “Person” means an individual, partnership, corporation, limited liability company,   association, trust, unincorporated organization, business entity or Governmental Authority.    “Plan” means an “employee benefit plan” (as defined in section 3(3) of ERISA) subject   to Title I of ERISA that is or, within the preceding five years, has been established or   maintained, or to which contributions are or, within the preceding five years, have been made or   required to be made, by the Company or any ERISA Affiliate or with respect to which the   Company or any ERISA Affiliate has any liability.   “property” or “properties” means, unless otherwise specifically limited, real or   personal property of any kind, tangible or intangible, choate or inchoate.      





 







   A-9      “Prudential” is defined in the addressee line to this Agreement.   “Prudential Affiliate” means any Affiliate of Prudential.   “PTE” is defined in Section 6.2(a).    “Purchaser” is defined in the addressee line to this Agreement.    “Purchase Money Indebtedness” means Indebtedness of the Company or any   Subsidiary which is secured by a Lien on property of the Company or such Subsidiary which   either existed at the time of the original acquisition of the property by the Company or such   Subsidiary or was granted or retained in connection with the acquisition or improvement of the   property by the Company or such Subsidiary in order to facilitate the financing of such   acquisition or improvement.   “Qualified Institutional Buyer” means any Person who is a “qualified institutional   buyer” within the meaning of such term as set forth in Rule 144A(a)(1) under the Securities Act.    “QPAM Exemption” is defined in Section 6.2(e).    “Related Fund” means, 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.    “Request for Purchase” is defined in Section 2(d).   “Required Holders” means, at any time 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).    “Rescheduled Closing Day” is defined in Section 3.2.   “Responsible Officer” means any Senior Financial Officer and any other officer of the   Company with responsibility for the administration of the relevant portion of this Agreement.    “SEC” means the Securities and Exchange Commission of the United States, or any   successor thereto.    “Securities” or “Security” shall have the meaning specified in section 2(1) of the   Securities Act.    “Securities Act” means 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 Financial Officer” means the chief financial officer, principal accounting   officer, treasurer or comptroller of the Company.    “Series” is defined in Section 1.     





 







   A-10      “Shelf Closing” means, with respect to any Series of Notes, the closing of the sale and   purchase of such Series of Notes.   “Significant Subsidiary” means any Subsidiary which is a “significant subsidiary” (as   defined in Article I, Rule 1-02 of Regulation S-X, promulgated under the Securities Act) of the   Company.   “Source” is defined in Section 6.2.    “State Commissions” means the Delaware, Florida and Maryland public utilities   commissions or other bodies which regulate the rates of the Company or its Subsidiaries as a   natural gas distribution company or otherwise.   “Structuring Fee” is defined in Section 2(h)(1).   “Subsidiary” means any corporation organized under the laws of any State of the United   States of America, which conducts the major portion of its business in and makes the major   portion of its sales to Persons located in the United States of America, and not less than 80% of   the total combined voting power of all classes of Voting Stock, and 80% of all other equity   Securities, of which shall, at the time as of which any determination is being made, be owned by   the Company either directly or through Subsidiaries.  Unless the context otherwise clearly   requires, any reference to a “Subsidiary” is a reference to a Subsidiary of the Company.   “Subsidiary Guarantor” means each Subsidiary that has executed and delivered a   Subsidiary Guaranty.    “Subsidiary Guaranty” is defined in Section 9.7(a).    “Subsidiary Stock” is defined in Section 10.5(b).   “Substitute Purchaser” is defined in Section 21.    “SVO” means the Securities Valuation Office of the NAIC or any successor to such   Office.    “Total Capitalization” means at any date, the aggregate amount at that date, as   determined on a consolidated basis, of the Funded Indebtedness of the Company and its   Subsidiaries, plus Consolidated Net Worth.   “USA PATRIOT Act” means 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” is defined in Section 5.16(a).    “Voting Stock” means Securities, the holders of which are ordinarily, in the absence of   contingencies, entitled to elect the corporate directors (or Persons performing similar functions).     





 







   A-11      “Wholly-Owned Subsidiary” means any Subsidiary whose financial results are   consolidated with the financial results of the Company, and all of the equity Securities of which   (except director’s qualifying shares) are owned by the Company and/or one or more Wholly-   Owned Subsidiaries of the Company.     





 







   SCHEDULE B   (to Private Shelf Agreement)   INFORMATION SCHEDULE    PRUDENTIAL INVESTMENT MANAGEMENT, INC.           (1) All payments to Prudential shall be made by wire   transfer of immediately available funds for credit to:              JPMorgan Chase Bank   New York, NY   ABA No.:  021-000-021        Account No.:  304232491   Account Name:  PIM Inc. - PCG             (2) Address for all notices relating to payments:            Prudential Investment Management, Inc.   c/o The Prudential Insurance Company of America   Investment Operations Group   Gateway Center Two, 10th Floor   100 Mulberry Street   Newark, NJ 07102-4077              Attention:  Manager           (3) Address for all other communications and notices:            Prudential Investment Management, Inc.   c/o Prudential Capital Group   [Regional Office]              Attention:  Managing Director           (4) Recipient of telephonic prepayment notices:            Manager, Trade Management Group            Telephone:  (973) 367-3141      Facsimile:   (888) 889-3832           (5) Tax Identification No.:  22-2540245                                 





 







   B-2      (6) Authorized Officers:        Ric E. Abel   Managing Director    Prudential Capital Group    2200 Ross Avenue   Suite 4300   Dallas, TX 75201      Telephone:  (214) 720-6272   Facsimile:   (214) 720-6297   Matthew A. Baker   Vice President   Prudential Capital Group    2200 Ross Avenue   Suite 4300   Dallas, TX 75201      Telephone:  (214) 720-6253   Facsimile:   (214) 720-6222      Julia B. Buthman   Managing Director   Prudential Capital Group    2200 Ross Avenue   Suite 4300   Dallas, TX 75201      Telephone:  (214) 720-6273   Facsimile:   (214) 720-6299      Richard P. Carrell   Vice President   Prudential Capital Group    2200 Ross Avenue   Suite 4300   Dallas, TX 75201      Telephone:  (214) 720-6287   Facsimile:   (214) 720-6297   Brien F. Davis   Vice President   Prudential Capital Group    2200 Ross Avenue   Suite 4300   Dallas, TX 75201      Telephone:  (214) 720-6256   Facsimile:   (214) 720-6299      Randall M. Kob   Managing Director   Prudential Capital Group   2200 Ross Avenue   Suite 4300   Dallas, TX 75201      Telephone:  (214) 720-6210   Facsimile:   (214) 720-6201      Christopher L. Halloran   Vice President   Prudential Capital Group    2200 Ross Avenue   Suite 4300   Dallas, TX 75201      Telephone:  (214) 720-6235   Facsimile:   (214) 720-6222   Brian E. Lemons   Vice President    Prudential Capital Group   2200 Ross Avenue   Suite 4300   Dallas, TX 75201      Telephone:  (214) 720-6276   Facsimile:   (214) 720-6222                       





 







   B-3      Timothy M. Laczkowski   Vice President   Prudential Capital Group    2200 Ross Avenue   Suite 4300   Dallas, TX 75201      Telephone:  (214) 720-6275   Facsimile:   (214) 720-6299   Brian N. Thomas   Managing Director   Prudential Capital Group   2200 Ross Avenue   Suite 4300   Dallas, TX 75201      Telephone:  (214) 720-6216   Facsimile:   (214) 720-6222      Ingrida Soldatova   Vice President   Prudential Capital Group    2200 Ross Avenue   Suite 4300   Dallas, TX 75201      Telephone:  (214) 720-6230   Facsimile:   (214) 720-6297      Wendy A. Carlson   Managing Director   Prudential Capital Group    2200 Ross Avenue   Suite 4300   Dallas, TX 75201      Telephone:  (214) 720-6229   Facsimile:   (214) 720-6297      Ty Bowman   Vice President   Prudential Capital Group   2200 Ross Avenue   Suite 4300   Dallas, TX 75201      Telephone:  (214) 720-6263   Facsimile:   (214) 720-6297              





 







   B-4         Authorized Officers for Company      Thomas E. Mahn   Treasurer   Chesapeake Utilities Corporation   909 Silver Lake Boulevard   Dover, Delaware 19904      Telephone:  302-736-7656   Facsimile:  302-734-6750             Beth W. Cooper   Senior Vice President & Chief Financial   Officer   Chesapeake Utilities Corporation   909 Silver Lake Boulevard   Dover, Delaware 19904      Telephone:  302-734-6022   Facsimile:   302-734-6750           





 







   SCHEDULE 1   (to Private Shelf Agreement)   FORM OF NOTE   CHESAPEAKE UTILITIES CORPORATION   [__.__]% SENIOR NOTE, SERIES [__], DUE [________ __, 20__]      NO. [_____]    PPN[______________]   ORIGINAL PRINCIPAL AMOUNT:   ORIGINAL ISSUE DATE:   INTEREST RATE:   INTEREST PAYMENT DATES:   FINAL MATURITY DATE:   PRINCIPAL PREPAYMENT DATES AND AMOUNTS:   FOR VALUE RECEIVED, the undersigned, CHESAPEAKE UTILITIES CORPORATION (herein   called the “Company”), a corporation organized and existing under the laws of the State of   Delaware, hereby promises to pay to ____________, or registered assigns, the principal sum of   _____________________ DOLLARS [on the Final Maturity Date specified above (or so much   thereof as shall not have been prepaid),] [, payable on the Principal Prepayment Dates and in the   amounts specified above, and on the Final Maturity Date specified above in an amount equal to   the unpaid balance of the principal hereof,] with interest (computed on the basis of a 360-day   year of twelve 30-day months) (a) on the unpaid balance hereof at the Interest Rate per annum   specified above, payable on each Interest Payment Date specified above and on the Final   Maturity Date specified above, commencing with the Interest Payment Date next succeeding the   date hereof, until the principal hereof shall have become due and payable, and (b) to the extent   permitted by law, (1) on any overdue payment of interest and (2) 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 (the “Default Rate”) from time to time equal to the greater of (i)   2.00% over the Interest Rate specified above or (ii) 2.00% over the rate of interest publicly   announced by PNC Bank, NA from time to time in Pittsburgh, Pennsylvania as its “base” or   “prime” rate, payable on each Interest Payment Date 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 office of   PNC Bank, NA 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 Private Shelf Agreement, dated as of October 8, 2015 (as from time to time amended, the   “Note Purchase Agreement”), between the Company, Prudential Investment Management, Inc.   and each Prudential Affiliate, which becomes party thereto and is entitled to the benefits thereof.    Each holder of this Note will be deemed, by its acceptance hereof, to have (i) agreed to the   confidentiality provisions set forth in Section 20 of the Note Purchase Agreement and (ii) made     





 







   S-1-2      the representations set forth in Section 6.1 and 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 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.    [The Company will make required prepayments of principal on the dates and in the   amounts specified in the Note Purchase Agreement.]  [This Note is [also] 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 law of the State of New York   excluding choice-of-law principles of the law of such State that would permit the application of   the laws of a jurisdiction other than such State.                CHESAPEAKE UTILITIES CORPORATION             By                       Its                





 







   SCHEDULE 2(d)   (to Private Shelf Agreement)   FORM OF REQUEST FOR PURCHASE   REQUEST FOR PURCHASE   CHESAPEAKE UTILITIES CORPORATION   Reference is made to the Private Shelf Agreement (as amended from time to time, the   “Agreement”), dated as of October 8, 2015, between Chesapeake Utilities Corporation, a   Delaware corporation (the “Company”), on the one hand, and Prudential Investment   Management, Inc. (“Prudential”) and each Prudential Affiliate which becomes party thereto, on   the other hand.  Capitalized terms used and not otherwise defined herein shall have the respective   meanings specified in the Agreement.   Pursuant to Section 2(d) of the Agreement, the Company hereby makes the following   Request for Purchase:      1. Aggregate principal amount of   the Notes covered hereby   (the “Notes”)  ...................  $__________1         2. Individual specifications of the Notes:      Principal   Amount   Final   Maturity   Date   Principal   Prepayment   Dates and   Amounts   Interest   Payment   Period              [___] in arrears      3. Use of proceeds of the Notes:      4. Proposed day for the closing of the purchase and sale of the Notes:      5. The purchase price of the Notes is to be transferred to:   Name and Address   and ABA Routing  Number of   Number of Bank  Account                                                         1   Minimum principal amount of $5,000,000.     





 







   S-2(d)-2      6. The Company certifies that the following are the only orders of a State   Commission or other Governmental Authority necessary or required for the Company to incur   the indebtedness to be evidenced by the Notes:   _______________________________________________________________   _______________________________________________________________   7. The Company certifies that (a) the representations and warranties contained in   Section 5 of the Agreement are true on and as of the date of this Request for Purchase and (b)   from the date of the Agreement to the date of this Request for Purchase assuming that Sections 9   and 10 of the Agreement were applicable from the date of the Agreement, no Event of Default or   Default exists as of the date hereof.   8. The Issuance Fee to be paid pursuant to the Agreement will be paid by the   Company on the closing date.   [9. Attached as Annex I hereto are updated Schedules, pursuant to Section 4.1 of the   Agreement. – if necessary]      Dated:   CHESAPEAKE UTILITIES CORPORATION      By ______________________________    Authorized Officer     





 







   SCHEDULE 2(f)   (to Private Shelf Agreement)   FORM OF CONFIRMATION OF ACCEPTANCE   CONFIRMATION OF ACCEPTANCE   Reference is made to the Private Shelf Agreement (as amended from time to time, the   “Agreement”), dated as of October 8, 2015 between Chesapeake Utilities Corporation, a   Delaware corporation (the “Company”), on the one hand, and Prudential Investment   Management, Inc. (“Prudential”) and each Prudential Affiliate which becomes party thereto, on   the other hand.  All terms used herein that are defined in the Agreement have the respective   meanings specified in the Agreement.   Prudential or the Prudential Affiliate which is named below as a Purchaser of Notes   hereby confirms the representations as to such Notes set forth in Section 6 of the Agreement, and   agrees to be bound by the provisions of the Agreement applicable to the Purchasers and holders   of the Notes.   Pursuant to Section 2(f) of the Agreement, an Acceptance with respect to the   following Accepted Notes is hereby confirmed:   I. Accepted Notes:  Aggregate principal amount $__________________      (A) (a) Name of Purchaser:    (b) Principal amount:    (c) Final maturity date:    (d) Principal prepayment dates and amounts:    (e) Interest rate:    (f) Interest payment period:  [_______] in arrears    (g) Payment and notice instructions:   As set forth on attached     Purchaser Schedule      (B) (a) Name of Purchaser:    (b) Principal amount:    (c) Final maturity date:    (d) Principal prepayment dates and amounts:    (e) Interest rate:    (f) Interest payment period:  [_______] in arrears    (g) Payment and notice instructions:   As set forth on attached     Purchaser Schedule      [(C), (D)  same information as above.]      II. Closing Day:         III. Issuance Fee:        





 







   S-2(f)-2      CHESAPEAKE UTILITIES CORPORATION            By:  ________________________________   Name:  _____________________________   Title:  ______________________________   Dated:  _____________________________         [PRUDENTIAL INVESTMENT     MANAGEMENT, INC.]            By ______________________________    Vice President         [PRUDENTIAL AFFILIATE]            By ______________________________    Vice President         [ATTACH PURCHASER SCHEDULES]        





 







      SCHEDULE 4.4(a)   (to Private Shelf Agreement)   FORM OF OPINION OF SPECIAL COUNSEL   FOR THE COMPANY   [BAKER & HOSTETLER LLP]      [Date of Closing]   [Purchasers]    Ladies and Gentlemen:   We have acted as special counsel for Chesapeake Utilities Corporation, a Delaware   corporation (the “Company”), in connection with the Private Shelf Agreement, dated as of   October 8, 2015, between the Company and each of you (the “Note Agreement”), pursuant to   which the Company has issued on the date hereof its [__.__]% Senior Notes, Series [_] due   [_________ __, 20__] in the aggregate principal amount of $[________] (the “Notes”).  Unless   otherwise defined herein, capitalized terms used herein have the respective meanings specified in   the Note Agreement.  This letter is being delivered to each of you pursuant to Section 4.4(a) of   the Note Agreement and with the understanding that each of you is purchasing the Notes in   reliance on the opinions expressed herein.   In rendering the opinions set forth herein, we have reviewed (i) the Note Agreement, (ii)   the Notes and (iii) such corporate records, certificates and other documents, and such questions   of law, as we have deemed necessary or appropriate for the purposes of this opinion.     We have assumed that all signatures are genuine (other than, in the case of the Note   Agreement and the Notes, those of the Company), that all documents submitted to us as originals   are authentic and that all copies of documents submitted to us conform to the originals.  We also   have assumed:   (i) as to factual matters, the accuracy of the warranties and representations   contained in  the Note Agreement, including the representations of the Purchasers in   Section 6.1 of the Note Agreement and in the certificates delivered by officers of the   Company pursuant to Section 4.3 of the Note Agreement;    (ii) that any authorization, consent, approval, exemption or other action by, or   notice to or filing with, any court, administrative or governmental body that is required   for the execution and delivery of the Note Agreement and the Notes or the consummation   of the transactions contemplated thereby in accordance with the terms thereof (other than   to the extent addressed in paragraph 6 below) has been duly obtained or made or shall be   timely and duly obtained or made;   (iii) that, other than to the extent addressed in paragraph 7 below, the execution   and delivery of the Note Agreement and the Notes, the offering, issuance and sale of the   Notes and the consummation by the Company of the transactions contemplated in the   Note Agreement and the Notes in accordance with the terms thereof do not violate or     





 







   S-4.4(a)-2   contravene any statute, law, rule or regulation or any judgment, order, decree or permit   issued by any court, arbitrator or governmental or regulatory authority; and    (iv) that the Note Agreement is a binding and enforceable agreement of each   party thereto other than the Company.    We have made no investigation for the purpose of verifying these assumptions.   Where statements in this opinion, if any, are qualified by the expression “known to us,”   such statements refer to the actual knowledge, but not constructive or imputed knowledge, of the   attorneys in our firm who have given substantive attention to the transaction that is the subject of   this opinion, without any representation or implication that any inquiry has been made with   respect to such statements.   Based on the foregoing, and subject to the qualifications and assumptions set forth herein,   we are of the opinion that, insofar as the law of the State of New York, the Delaware General   Corporation Law (the “DGCL”) and the Federal law of the United States of America are   concerned:   1. The Company is a corporation duly incorporated, validly existing and in   good standing under the laws of the State of Delaware.     2. The Company has the corporate power and authority to execute, deliver   and perform its obligations under the Note Agreement and the Notes.    3. The Note Agreement and the Notes have been duly authorized by all   requisite corporate action and duly executed and delivered by authorized officers of the   Company and constitute the valid and binding obligations of the Company, enforceable   against the Company in accordance with their terms, subject to bankruptcy, insolvency,   fraudulent transfer, reorganization, moratorium, and other similar laws of general   applicability relating to or affecting creditors’ rights and to general equity principles.   4. It is not necessary in connection with the offer, issuance, sale and delivery   of the Notes to the Purchasers under the circumstances contemplated by the Note   Agreement to register the Notes under the Securities Act of 1933, as amended, or to   qualify an indenture in respect of the Notes under the Trust Indenture Act of 1939, as   amended.   5. Neither the issuance and the sale of the Notes by the Company nor the use   of the proceeds thereof as described in the Note Agreement violates Regulation X of the   Board of Governors of the Federal Reserve System or will cause any Purchaser to violate   Regulation T or U of the Board of Governors of the Federal Reserve System to the extent   it may be subject thereto.   6. No consent, approval, authorization or other action by or filing with any   governmental agency or instrumentality of the State of New York or the United States of   America or under the DGCL is required on the part of the Company for the execution and   delivery of the Note Agreement and the Notes or for the consummation by the Company     





 







   S-4.4(a)-3   of the transactions contemplated thereby, or the performance of its obligations   thereunder, in accordance with the terms thereof.   7. The execution and delivery of the Note Agreement and the Notes, the   offering, issuance and sale of the Notes and the consummation by the Company of the   transactions contemplated thereby, and the performance of its obligations thereunder, in   accordance with the terms thereof (i) do not violate the DGCL, any New York or Federal   statute, law, rule or regulation to which the Company is subject, or the usury laws of the   State of New York or (ii) do not conflict with, breach the terms, conditions or provisions   of, or constitute a default under, violate, or result in the creation of any Lien upon any of   the properties or assets of the Company pursuant to (A) the Amended and Restated   Certificate of Incorporation or Amended and Restated Bylaws of the Company or (B) any   of the instruments or agreements listed on Schedule 5.15 of the Note Agreement.   The foregoing opinion is subject to the following qualifications:   (a) We express no opinion as to:   (i) waivers of the rights to object to venue or other rights or benefits   bestowed by operation of law;   (ii) provisions for liquidated damages and penalties, penalty interest   and interest on interest, it being understood that the provisions of Sections 8.2 and   12 of the Note Agreement are not excluded under this clause (ii);    (iii) provisions purporting to require a prevailing party in a dispute to   pay attorneys’ fees and expenses, or other costs, to a non-prevailing party;   (iv) provisions purporting to supersede equitable principles, including   provisions requiring amendments and waivers to be in writing;   (v) provisions purporting to make a party’s determination conclusive;   or   (vi) exclusive jurisdiction or venue provisions.   (b) We express no opinion with regard to (i) any state securities or Blue Sky   laws, (ii) any commodities, insurance or tax laws or (iii) the Employee Retirement   Income Security Act of 1974, or any comparable state laws.   (c) Except as addressed in paragraphs 5 and 7(i), we express no opinion as to   any legal requirements or restrictions applicable to the Purchasers.   (d) Our opinions in paragraphs 6 and 7(i) above are limited to laws and   regulations normally applicable to transactions of the type contemplated by the Note   Agreement and do not extend to laws or regulations relating to, or to licenses, permits,   approvals and filings necessary for, the conduct of the business of the Company or any of     





 







   S-4.4(a)-4   its subsidiaries, including, without limitation, any environmental or public utilities laws   or regulations.   We do not express any opinion herein on any laws other than the laws of the State of   New York, the DGCL and the Federal law of the United States.    This letter is given solely for your benefit as a Purchaser of Notes and for the benefit of   any other person or entity to whom you may transfer any of the Notes.  It may not be relied upon   by any other person or entity and, except with respect to regulatory authorities exercising   jurisdiction over any of you (which shall be deemed to include the National Association of   Insurance Commissioners), this opinion may not be disclosed to any other person or entity   without our written consent.   Very truly yours        





 







      SCHEDULE 4.4(b)   (to Private Shelf Agreement)   FORM OF OPINION OF DELAWARE COUNSEL   FOR THE PURCHASERS   [PARKOWSKI, GUERKE & SWAYZE, P.A.]   [Date of Closing]   [Purchasers]    Ladies and Gentlemen:   We have acted as special Delaware counsel for Chesapeake Utilities Corporation (the   “Company”) in connection with the Private Shelf Agreement, dated as of October 8, 2015,   between the Company and each of you (the “Note Agreement”), pursuant to which the   Company has issued today [__.__]% Senior Notes, Series [_] due [_______ __, 20__] of the   Company in the aggregate principal amount of $[_________] (the “Notes”).  All terms used   herein that are defined in the Note Agreement have the respective meanings specified in the Note   Agreement.  This letter is being delivered to each of you in satisfaction of the condition set forth   in Section 4.4(b) of the Note Agreement and with the understanding that each of you is   purchasing the Notes in reliance on the opinions expressed herein.   In this connection, we have examined such certificates of public officials, certificates of   officers of the Company and copies certified to our satisfaction of corporate documents and   records of the Company and of other papers, and have made such other investigations, as we   have deemed relevant and necessary as a basis for our opinion hereinafter set forth.  We have   relied upon such certificates of public officials and of officers of the Company with respect to the   accuracy of material factual matters contained therein which were not independently established.    With respect to the opinions expressed in paragraph 3 below, we have also relied upon the   representations made by each of you in Sections 6.1 and 6.2 of the Note Agreement.   Based on the foregoing, it is our opinion that:   a. The Company has the corporate power and authority to carry on the   business as now being conducted.   b. The execution and delivery of the Note Agreement and the Notes, the   offering, issuance and sale of the Notes and fulfillment of and compliance with the   respective provisions of the Note Agreement and the Notes will not require any   authorization, consent, approval, exemption or other action by or notice to or filing with   any Delaware court, Delaware administrative or Delaware governmental body (other than   the State of Delaware Public Service Commission (the “Commission”) and routine   filings after the date hereof with the SEC and/or State Blue Sky authorities) pursuant to,   any Delaware applicable law (including any securities or Blue Sky law), statute, rule or   regulation of the State of Delaware.  The Commission has duly entered Order No.   ______, dated _________ __, 20__, in PSC Docket No. ______.  Said order is final and   in full force and effect, no appeal, review or contest thereof is pending.  It is our opinion   that no further action by the Commission is a requirement to execution and delivery of     





 







   S-4.4(b)-2      the Note Agreement or the Notes or the offering, issuance or sale of the Notes or the   fulfillment of compliance with the requisite provisions of the Note Agreement and the   Notes.   Our opinions may not be relied upon by any person or entity other than each of you,   transferees of each of you and Schiff Hardin LLP, your special counsel, in connection with the   matters referred to herein.   Our opinions are limited to the laws of the State of Delaware.    Sincerely yours,   [PARKOWSKI, GUERKE & SWAYZE, P.A.]         BY:_____________________________      [William A. Denman, Esq.]        





 







   SCHEDULE 4.4(c)   (to Private Shelf Agreement)   FORM OF OPINION OF MARYLAND COUNSEL   FOR THE COMPANY   [VENABLE LLP]      [Date of Closing]   [Purchasers]    Ladies and Gentlemen:   We have acted as special Maryland regulatory counsel for Chesapeake Utilities   Corporation (the “Company”) in connection with the Private Shelf Agreement, dated as of   October 8, 2015, between the Company and each of you (the “Note Agreement”), pursuant to   which the Company has issued today [__.__]% Senior Notes, Series [_] due [_________ __,   20__] of the Company in the aggregate principal amount of $[___________] (the “Notes”).  All   terms used herein that are defined in the Note Agreement have the respective meanings specified   in the Note Agreement.  This letter is being delivered to each of you with the understanding that   each of you is purchasing the Notes in reliance on the opinions expressed herein.   In rendering the opinions set forth herein, we have reviewed (i) a certificate executed by   an officer of the Company, dated as of the date hereof (the “Officer’s Certificate”), and (ii)   such corporate records and other documents, and such questions of law, as we have deemed   necessary or appropriate for purposes of this opinion.  We assumed that all signatures are   genuine, that all documents submitted to us as originals are authentic and that all copies of   documents submitted to us conform to the originals.  As to any facts material to this opinion   which we did not independently establish or verify, we have relied solely upon the Officer’s   Certificate (attached hereto as Exhibit A).     Based on the foregoing and assuming approval of the subject transaction by the Delaware   Public Service Commission in PSC Docket No. ______, it is our opinion that:   Maryland law requires the Company to provide prior written notice to the Public Service   Commission of Maryland prior to the issuance and sale of the Notes.  The Company filed its   written notice (Commission Mail Log reference number [______]) and the Public Service   Commission of Maryland noted the transaction through a letter order dated [_______ __, 20_].    The fulfillment of and compliance with the respective provisions of the Note Agreement and the   Notes do not require any further authorization, consent, approval, exemption or other action by   or further notice to or filing with any Maryland state administrative or governmental body,   including, without limitation, the Public Service Commission of Maryland, pursuant to any   applicable law (including any securities or Blue Sky law), statute, rule, regulation or other   requirement of the State of Maryland.   Our opinion may not be relied upon by any person or entity other than each of you,   transferees of each of you and Schiff Hardin LLP your special counsel in connection with the   matters referred to herein, and neither this opinion nor this opinion letter may be circulated,   quoted, or relied upon by any other person for any other purpose without our prior written     





 







   S-4.4(c)-2   consent (except to regulatory authorities having jurisdiction over you, including the National   Association of Insurance Commissioners).   Very truly yours,         [Brian M. Quinn]        





 







   SCHEDULE 4.4(d)   (to Private Shelf Agreement)      FORM OF OPINION OF FLORIDA COUNSEL   FOR THE COMPANY   [GUNSTER, YOAKLEY & STEWARD, P.A.]   [Date of Closing]   [Purchasers]    Ladies and Gentlemen:      We have acted as special Florida counsel for Chesapeake Utilities Corporation (the   “Company”) in connection with the Private Shelf Agreement, dated as of October 8, 2015,   between the Company and each of you (the “Note Agreement”), pursuant to which the   Company has issued today [__.__]% Senior Notes due [________ __, 20__], of the Company,   which in the aggregate are in the principal amount of $[_________] (the “Notes”).  All terms   used herein that are defined in the Note Agreement have the respective meanings specified in the   Note Agreement.  This letter is being delivered to each of you in satisfaction of the condition set   forth in Section 4.4(d) of the Note Agreement and with the understanding that each of you is   purchasing the Notes in reliance on the opinions expressed herein.   In this connection, we have examined such certificates of public officials, certificates of   officers of the Company and copies certified to our satisfaction of corporate documents and   records of the Company and of other papers, and have made such other investigations, as we   have deemed relevant and necessary as a basis for our opinion hereinafter set forth. We have   relied upon such certificates of public officials and of officers of the Company with respect to the   accuracy of material factual matters contained therein which were not independently established.   Based on the foregoing, it is our opinion that:   a. The Company is qualified to do business and is in good standing under the   laws of the State of Florida.   b. The execution and delivery of the Note Agreement and the Notes, the   issuance and sale of the Notes and fulfillment of and compliance with the respective   provisions of the Note Agreement and the Notes will not require any authorization,   consent, approval, exemption or other action by or notice to or filing with any court,   administrative or governmental body (other than the Public Service Commission of the   State of Florida) pursuant to any applicable law, statute, rule or regulation of the State of   Florida.  The Public Service Commission of the State of Florida has duly entered Order   No. __________, dated _________ __, 20__, in Docket No. ______, [refer also to any   subsequent annual orders – each of] which order is final and in full force and effect, no   appeal, review or contest thereof is pending and the time for appeal or to seek review or   reconsideration thereof has expired and no further action by the Public Service   Commission of the State of Florida is a requirement to execution and delivery of the Note   Agreement or the Notes or the issuance or sale of the Notes or the fulfillment of   compliance with the requisite provisions of the Note Agreement and the Notes.     





 







   S-4.4(d)-2      Our opinion may not be relied upon by any person or entity other than each of you,   transferees of each of you and Schiff Hardin LLP your special counsel in connection with the   matters referred to herein.   Our opinion is limited to the laws of the State of Florida.   Sincerely,           By:              [Beth Keating, Esquire         GUNSTER, YOAKLEY & STEWARD, P.A.            850.521.1706 (office direct)]        





 







   SCHEDULE 4.4(e)   (to Private Shelf Agreement)   FORM OF OPINION OF SPECIAL COUNSEL   TO THE PURCHASERS   The closing opinion of Schiff Hardin LLP, special counsel to the Purchasers, called for   by Section 4.4(e) of the Agreement, shall be dated the date of such Closing and addressed to the   Purchasers, shall be satisfactory in form and substance to the Purchasers and shall be to the effect   that:   1. The Company is a corporation validly existing and in good standing under the   laws of the State of Delaware.    2. The Agreement and the Notes being delivered on the date hereof constitute the   legal, valid and binding contracts of the Company, enforceable against the Company in   accordance with its terms.   3. The issuance, sale and delivery of the Notes being delivered on the date hereof   under the circumstances contemplated by this Agreement do not, under existing law, require   the registration of such Notes under the Securities Act or the qualification of an indenture   under the Trust Indenture Act of 1939, as amended.   The opinion of Schiff Hardin LLP shall also state that the opinions of Baker & Hostetler   LLP, Parkowski, Guerke and Swayze, Venable LLP and Gunster, Yoakley & Steward, P.A. are   satisfactory in scope and form to Schiff Hardin LLP and that, in their opinion, the Purchasers are   justified in relying thereon.    In rendering the opinion set forth in paragraph 1 above, Schiff Hardin LLP may rely, as   to matters referred to in paragraph 1, solely upon an examination of Amended and Restated    Articles of Incorporation certified by, and a certificate of good standing of the Company from,   the Secretary of State of the State of Delaware.  The opinion of Schiff Hardin LLP is limited to   the laws of the State of New York and the federal laws of the United States.   With respect to matters of fact upon which such opinion is based, Schiff Hardin LLP may   rely on appropriate certificates of public officials and officers of the Company and upon   representations of the Company and the Purchasers delivered in connection with the issuance and   sale of the Notes.     





 







   SCHEDULE 5.3   (to Private Shelf Agreement)   DISCLOSURE MATERIALS      None, other than the Company’s public filings with the SEC.        





 







   SCHEDULE 5.4   (to Private Shelf Agreement)   SUBSIDIARIES OF THE COMPANY AND OWNERSHIP   OF SUBSIDIARY STOCK       Name Jurisdiction of Organization Owner   Ownership   Percentage   Eastern Shore Natural Gas Company Delaware Chesapeake Utilities Corporation 100%   Sharp Energy, Inc. Delaware Chesapeake Utilities Corporation 100%   Sharpgas, Inc. Delaware Sharp Energy, Inc. 100%   Xeron, Inc. Mississippi Chesapeake Utilities Corporation 100%   Peninsula Energy Services Company, Inc. Delaware Chesapeake Utilities Corporation 100%   Peninsula Pipeline Company, Inc. Delaware Chesapeake Utilities Corporation 100%   Florida Public Utilities Company Florida  Chesapeake Utilities Corporation 100%   Flo-Gas Corporation Florida Florida Public Utilities Company 100%   Chesapeake Service Company Delaware Chesapeake Utilities Corporation 100%   Skipjack, Inc. Delaware Chesapeake Service Company 100%   Chesapeake Investment Company Delaware Chesapeake Service Company 100%   Eastern Shore Real Estate, Inc. Delaware Chesapeake Service Company 100%   Chesapeake OnSight Services, LLC Delaware Chesapeake Utilities Corporation 100%   Sandpiper Energy, Inc. Delaware Chesapeake Utilities Corporation 100%   Eight Flags Energy, LLC Delaware Chesapeake OnSight Services,   LLC   100%   Austin Cox Home Services, Inc. Delaware Chesapeake Utilities Corporation 100%   Grove Energy, Inc. Delaware Chesapeake Utilities Corporation 100%   Aspire Energy of Ohio, LLC Delaware Chesapeake Utilities Corporation 100%   Sharp Water, Inc. (Inactive) Delaware Chesapeake Utilities Corporation 100%   aQuality Company, Inc. (Inactive) Delaware Chesapeake Utilities Corporation 100%        





 







   SCHEDULE 5.15   (to Private Shelf Agreement)   EXISTING INDEBTEDNESS   1. Note Purchase Agreement, dated September 5, 2013, regarding $20,000,000 3.73%   Series A, Senior Unsecured Notes, due December 16, 2028 and $50,000,000 3.88%   Series B, Senior Unsecured Notes, due May 15, 2029   2. Note Agreement, dated June 29, 2010, as amended by First Amendment June 20, 2011,   regarding $29,000,000 5.68% Series A, Senior Unsecured Notes, due June 30, 2026 and   $7,000,000 6.43% Series B, Senior Unsecured Notes, due May 2, 2028   3. Note Agreement, dated October 31, 2008, as amended, regarding $30,000,000 5.93%   Senior Unsecured Notes, due October 31, 2023     4. Note Agreement, dated October 18, 2005, as amended, regarding $20,000,000 5.50%   Senior Unsecured Notes, due October 12, 2020     5. Note Agreement, dated October 31, 2002, as amended, regarding $30,000,000 6.64%   Senior Unsecured Notes, due October 31, 2017     6. Indenture of Mortgage and Deed of Trust, dated September 1, 1942, between Florida   Public Utilities Company and the trustee, for the First Mortgage Bonds, all supplemental   indentures thereto and the First Colony Bond Purchase Agreement.     7. Letter Agreement, dated September 26, 2003, between Chesapeake Utilities Corporation   and PNC Bank, National Association, as amended     8. Loan Agreement, dated September 12, 2002, between Chesapeake Utilities Corporation   and Bank of America, N.A., as amended.     9. Revolving Credit Agreement dated December 29, 2014, between Chesapeake Utilities   Corporation and Citizens Bank, National Association.     10. Capacity, Supply and Operating Agreement and Capital Lease Obligation, dated May 21,   2013, between Sandpiper Energy, Inc. and Eastern Gas and Water Investment Company,   LLC due May 1, 2019.      11. Consulting Agreement, dated February 5, 2013, between Flo-Gas Corporation and Glades   Gas Co., Inc. due February 15, 2018.     12. Credit Agreement, dated October 8, 2015 (as amended, restated, extended, supplemented   or otherwise modified from time to time), by and among Chesapeake Utilities   Corporation, a Delaware corporation, the lenders party thereto, and PNC Bank, National   Association, as administrative agent, swing loan lender and issuing lender.        





 







   SCHEDULE 10.4(e)   (to Private Shelf Agreement)   EXISTING LIENS   The FPU Indebtedness is secured by the Indenture of Mortgage and Deed of Trust. dated as of   September 1, 1942, as amended, supplemented and modified, by the Company, in favor of U.S.   Bank National Association (successor to the original trustees), as trustee.   Capacity, Supply and Operating Agreement and Capital Lease Obligation, dated May 21, 2013,   between Sandpiper Energy, Inc. and Eastern Gas and Water Investment Company, LLC due May   1, 2019.         





 







   SCHEDULE 10.6   (to Private Shelf Agreement)   LINE OF BUSINESS      Chesapeake Utilities Corporation is a diversified energy company engaged in natural gas   distribution, transmission and marketing, electricity distribution, propane distribution and   wholesale marketing, and other related services   Recent developments:    The Company’s acquisition of Gatherco, Inc. by merger into the Company’s wholly-   owned subsidiary, Aspire Energy of Ohio, LLC, added natural gas gathering services, liquids   processing and natural gas supply to local distributors to its line of business.     The Company is developing a natural gas combined heat and power plant to be operated   on Amelia Island, Florida by its wholly-owned subsidiary, Eight Flags Energy, LLC.            47093-0000   CH2\16131450.7