Document:

Exhibit
10.1

 

Execution
Version

 

 

Elizabethtown
Gas Company

 

$50,000,000
4.02% First Mortgage Bonds, Series 2018A-1, due December 20, 2028

$55,000,000
4.22% First Mortgage Bonds, Series 2018A-2, due December 20, 2033

$150,000,000
4.29% First Mortgage Bonds, Series 2018A-3, due December 20, 2038

$200,000,000
4.37% First Mortgage Bonds, Series 2018A-4, due December 20, 2048

$75,000,000
4.52% First Mortgage Bonds, Series 2018A-5, due December 20, 2058

 

 

 

Bond
Purchase Agreement

 

Dated
as of December 20, 2018

 

 

    	 

    	 

    

	 	Table of Contents	 
	 	 	 
	Section	Heading	Page
	 	 	 
	Section 1.	Authorization of Notes	1
	 	 	 
	Section 1.1.	Authorization of Notes	1
	 	 	 
	Section 2.	Sale and Purchase of Notes	2
	 	 	 
	Section 3.	Closing	2
	 	 	 
	Section 4.	Conditions to the Closing	3
	 	 	 
	Section 4.1.	Representations and Warranties of the Company	3
	Section 4.2.	Performance; No Default	3
	Section 4.3.	Compliance Certificates	3
	Section 4.4.	Opinions of Counsel	4
	Section 4.5.	Purchase Permitted by Applicable Law, Etc	4
	Section 4.6.	Sale of Notes	4
	Section 4.7.	Payment of Special Counsel Fees	4
	Section 4.8.	Private Placement Number	4
	Section 4.9.	Changes in Corporate Structure	4
	Section 4.10.	Funding Instructions	5
	Section 4.11.	UCC Financing Statements and the Supplement	5
	Section 4.12.	Title Policy	5
	Section 4.13.	Proceedings and Documents	5
	 	 	 
	Section 5.	Representations and Warranties of the Company	6
	 	 	 
	Section 5.1.	Organization; Power and Authority	6
	Section 5.2.	Authorization, Etc	6
	Section 5.3.	Disclosure	6
	Section 5.4	Subsidiaries	6
	Section 5.5.	Financial Statements; Material Liabilities	6
	Section 5.6.	Compliance with Laws, Other Instruments, Etc	7
	Section 5.7.	Governmental Authorizations, Etc	7
	Section 5.8.	Litigation; Observance of Statutes and Orders	7
	Section 5.9.	Taxes	7
	Section 5.10.	Title to Property; Leases	8
	Section 5.11.	Licenses, Permits, Etc	8
	Section 5.12.	Compliance with ERISA	8
	Section 5.13.	Private Offering by the Company	9
	Section 5.14.	Use of Proceeds; Margin Regulations	9
	Section 5.15.  	Existing Indebtedness	10
	Section 5.16.	Foreign Assets Control Regulations, Etc	10
	Section 5.17.	Status under Certain Statutes	11
	Section 5.18.	Environmental Matters	11

    	-i-

    	 

    

	Section 5.19.	Lien of Indenture	12
	Section 5.20.	Filings under Indenture	12
	Section 5.21.	Status of Certain Material Agreements	12
	 	 	 
	Section 6.	Representations of the Purchasers	12
	 	 	 
	Section 6.1.	Purchase for Investment	12
	Section 6.2.	Source of Funds	13
	Section 6.3.	Purchaser Status; Experience	14
	Section 6.4.	Access to Information	14
	 	 	 
	Section 7.	Information as to Company	15
	 	 	 
	Section 7.1.	Financial and Business Information	15
	Section 7.2.	Officer’s Certificate	17
	Section 7.3.	Visitation	18
	 	 	 
	Section 8.	Payment and Prepayment of the Notes	18
	 	 	 
	Section 8.1.	Maturity	18
	Section 8.2.	Optional Prepayments with Make-Whole Amount	18
	Section 8.3.	Allocation of Partial Prepayments	19
	Section 8.4.	Maturity; Surrender, Etc	19
	Section 8.5.	Purchase of Notes	19
	Section 8.6.	Make-Whole Amount for the Notes	19
	Section 8.7.	Change in Control	21
	 	 	 
	Section 9.	Affirmative Covenants	22
	 	 	 
	Section 9.1.	Compliance with Law	22
	Section 9.2.	Insurance	23
	Section 9.3.	Maintenance of Properties	23
	Section 9.4.	Payment of Taxes	23
	Section 9.5.	Corporate Existence, Etc	23
	Section 9.6.	Books and Records	23
	Section 9.7.	Compliance with Material Agreements	24
	 	 	 
	Section 10.	Negative Covenants	24
	 	 	 
	Section 10.1.	Transactions with Affiliates	24
	Section 10.2.  	Line of Business	24
	Section 10.3.	Terrorism Sanctions Regulations	24
	Section 10.4.	Non-US Investors	24
	 	 	 
	Section 11.	Events of Default	25
	 	 	 
	Section 12.	Remedies on Default, Etc.	26
	 	 	 
	Section 12.1.	Acceleration	26

    	-ii-

    	 

    

	Section 12.2.	Exercise of Remedies Under Indenture	27
	Section 12.3.	Other Remedies	27
	Section 12.4.	Rescission	27
	Section 12.5.	No Waivers or Election of Remedies, Expenses, Etc	28
	 	 	 
	Section 13.	Payments on Notes	28
	 	 	 
	Section 13.1.	Home Office Payment	28
	 	 	 
	Section 14.	Registration; Exchange; Expenses, Etc	28
	 	 	 
	Section 14.1.	Registration of Notes	28
	Section 14.2.	Transaction Expenses	29
	Section 14.3.	Survival	29
	 	 	 
	Section 15.	Survival of Representations and Warranties; Entire Agreement	29
	 	 	 
	Section 16.	Amendment and Waiver	29
	 	 	 
	Section 16.1.	Requirements	29
	Section 16.2.	Solicitation of Holders of Notes	30
	Section 16.3.	Binding Effect, Etc	30
	Section 16.4.	Notes Held by Company, Etc	31
	 	 	 
	Section 17.	Notices	31
	 	 	 
	Section 18.	Indemnification	31
	 	 	 
	Section 19.	Reproduction of Documents	32
	 	 	 
	Section 20.	Confidential Information	32
	 	 	 
	Section 21.	Miscellaneous	33
	 	 	 
	Section 21.1.	Successors and Assigns	33
	Section 21.2.	Accounting Terms	33
	Section 21.3.  	Severability	33
	Section 21.4.	Construction, Etc	34
	Section 21.5.	Counterparts	34
	Section 21.6.	Governing Law	34
	Section 21.7.	Jurisdiction and Process; Waiver of Jury Trial	34
	Section 21.8.	Payments Due on Non-Business Days	35

    	-iii-

    	 

    

	Schedule A	—	Information Relating to Purchasers
	Schedule B	—	Defined Terms
	Schedule 4.11	—	Collateral Filings
	Schedule 5.5	—	Financial Statements
	Schedule 5.15(a)	—	Existing Indebtedness
	Schedule 5.15(b)	—	Liens not permitted by Indenture
	Schedule 5.15(c)	—	Debt Instruments
	Exhibit A	—	Form of First Supplemental Indenture
	Exhibit 4.4(a)	—	Form of Opinion of Special Counsel for the Company
	Exhibit 10.4	   —   	U.S. Tax Compliance Certificate

    	-iv-

    	 

    

Elizabethtown
Gas Company

1
South Jersey Plaza, Route 54

Folsom,
New Jersey 08037

$50,000,000
4.02% First Mortgage Bonds, Series 2018A-1, due December 20, 2028

$55,000,000
4.22% First Mortgage Bonds, Series 2018A-2, due December 20, 2033

$150,000,000
4.29% First Mortgage Bonds, Series 2018A-3, due December 20, 2038

$200,000,000
4.37% First Mortgage Bonds, Series 2018A-4, due December 20, 2048

$75,000,000
4.52% First Mortgage Bonds, Series 2018A-5, due December 20, 2058

December
20, 2018

To
Each of the Purchasers Listed in

Schedule A Hereto:

Ladies
and Gentlemen:

Elizabethtown
Gas Company, a corporation organized and subsisting under the laws of the State of New Jersey (the “Company”),
agrees with each of the purchasers whose names appear at the end hereof (each, a “Purchaser” and, collectively,
the “Purchasers”) as follows:

Section 1.            Authorization
of Bonds.

Section 1.1. Authorization
of Bonds The Company has authorized and will create a series of its first mortgage bonds in an aggregate principal amount
of $530,000,000 (the “Series 2018A Bonds”) to be issued in five Tranches as follows: (a) 4.02% First Mortgage
Bonds, Series 2018A-1, due December 20, 2028 in the aggregate principal amount of $50,000,000 (the “Series 2018A-1 Bonds”);
(b) 4.22% First Mortgage Bonds, Series 2018A-2, due December 20, 2033 in the aggregate principal amount of $55,000,000 (the “Series
2018A-2 Bonds”); (c) 4.29% First Mortgage Bonds, Series 2018A-3, due December 20, 2038 in the aggregate principal amount
of $150,000,000 (the “Series 2018A-3 Bonds”); (d) 4.37% First Mortgage Bonds, Series 2018A-4, due December
20, 2048 in the aggregate principal amount of $200,000,000 (the “Series 2018A-4 Bonds”); and (e) 4.52% First
Mortgage Bonds, Series 2018A-5, due December 20, 2058 in the aggregate principal amount of $75,000,000 (the “Series 2018A-5
Bonds” and together with the Series 2018A-1 Bonds, the Series 2018A-2 Bonds, the Series 2018A-3 Bonds and the Series
2018A-4 Bonds, the “Bonds”). The Bonds will be issued under and secured by that certain First Mortgage Indenture
dated as of July 2, 2018 (the “Original Indenture”), between the Company and Wilmington Trust, National
Association, as Trustee (the “Trustee”), as supplemented by that certain First Supplemental Indenture dated
as of December 20, 2018 (such First Supplemental Indenture being referred to herein as the “First Supplement”),
which will be substantially in the form attached hereto as Exhibit A. The Original Indenture as so amended and supplemented,
and as further supplemented and amended according to its terms, is herein called the “Indenture.” A copy of
the Original Indenture has been delivered to you. The Bonds shall be issuable in fully registered form only. The Series 2018A-1
Bonds shall mature on December 20, 2028, shall bear interest at the rate of 4.02% per annum payable semiannually, on June 20 and
December 20 of each year and at maturity, commencing on June 20, 2019, shall be subject to redemption as provided in the Indenture
or this Agreement, and shall be in the form established pursuant to the Indenture. The Series 2018A-2 Bonds shall mature on December
20, 2033, shall bear interest at the rate of 4.22% per annum payable semiannually, on June 20 and December 20 of each year and
at maturity, commencing on June 20, 2019, shall be subject to redemption as provided in the Indenture or this Agreement, and shall
be in the form established pursuant to the Indenture. The Series 2018A-3 Bonds shall mature on December 20, 2038, shall bear interest
at the rate of 4.29% per annum payable semiannually, on June 20 and December 20 of each year and at maturity, commencing on June
20, 2019, shall be subject to redemption as provided in the Indenture or this Agreement, and shall be in the form established
pursuant to the Indenture. The Series 2018A-4 Bonds shall mature on December 20, 2048, shall bear interest at the rate of 4.37%
per annum payable semiannually, on June 20 and December 20 of each year and at maturity, commencing on June 20, 2019, shall be
subject to redemption as provided in the Indenture or this Agreement, and shall be in the form established pursuant to the Indenture.
The Series 2018A-5 Bonds shall mature on December 20, 2058, shall bear interest at the rate of 4.52% per annum payable semiannually,
on June 20 and December 20 of each year and at maturity, commencing on June 20, 2019, shall be subject to redemption as provided
in the Indenture or this Agreement, and shall be in the form established pursuant to the Indenture. As permitted by the Indenture,
the Bonds originally issued to you thereunder shall be dated, and bear interest from, the date of their original issue on the
Closing Date.

    	 

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Certain
capitalized and other terms used in this Agreement are defined in Schedule B; and references to a “Schedule”
or an “Exhibit” are, unless otherwise specified, to a Schedule or an Exhibit attached to this Agreement.
Terms used herein but not defined herein shall have the meanings set forth in the Indenture.

Section 2.            Sale and Purchase of Bonds.

Subject
to the terms and conditions of this Agreement, the Company will issue and sell to each Purchaser and each Purchaser will purchase
from the Company, at the Closing, Bonds in the principal amount(s) and in the Tranche(s) specified opposite such Purchaser’s
name in Schedule A at the purchase price of 100% of the principal amount thereof. The Purchasers’ obligations hereunder
are several and not joint obligations, and no Purchaser shall have any liability to any Person for the performance or non-performance
of any obligation by any other Purchaser hereunder.

Section 3.            Closing.

The
sale and purchase of the Bonds to be purchased by each Purchaser thereof shall occur at a closing on December 20, 2018 or on such
other Business Day thereafter on or prior to December 31, 2018 as may be agreed upon by the Company and the Purchasers of
the Bonds (the “Closing”), at the offices of Chapman and Cutler LLP, 111 West Monroe Street, Chicago, Illinois
60603 at 9:00 a.m. Central time. On the Closing Date, the Company will deliver to each Purchaser the Bonds of each Tranche
to be purchased by such Purchaser in the form of a single Bond (or such greater number of Bonds in denominations of at least $100,000
as such Purchaser may request) of such Tranche in the amount purchased, dated the Closing Date and registered in such Purchaser’s
name (or in the name of such Purchaser’s nominee), against delivery by such Purchaser to the Company or its order of immediately
available funds in the amount of the purchase price therefor by wire transfer of immediately available funds for the account of
the Company to an account specified pursuant to Section 4.10 hereof. If, on the Closing Date, the Company shall fail to tender
such Bonds to any Purchaser as provided above in this Section 3, or any of the conditions specified in Section 4 shall
not have been fulfilled to such Purchaser’s reasonable satisfaction, such Purchaser shall, at such Purchaser’s election,
be relieved of all further obligations under this Agreement, without thereby waiving any rights such Purchaser may have by reason
of such failure or such nonfulfillment.

    	-2-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Section 4.            Conditions
to the Closing.

Each
Purchaser’s obligation to purchase and pay for the Bonds to be sold to such Purchaser at the Closing is subject to the fulfillment
to such Purchaser’s reasonable satisfaction, prior to or at the Closing, of the following conditions:

Section 4.1. Representations
and Warranties of the Company. The representations and warranties of the Company in this Agreement shall be correct
when made and at the time of the Closing.

Section 4.2. Performance;
No Default.  The Company shall have performed and complied with all agreements
and conditions contained in each Financing Agreement required to be performed or complied with by the Company prior to or at the
Closing, and after giving effect to the issue and sale of the Bonds (and the application of the proceeds thereof as contemplated
by Section 5.14), no Default or Event of Default shall have occurred and be continuing.

Section 4.3. Compliance
Certificates. The Company shall have performed and complied with all agreements and conditions contained in the Indenture
which are required to be performed or complied with by the Company for the issuance of the Bonds. In addition, on the date of
the Closing the Company shall have delivered the following certificates:

(a) Officer’s
Certificates. The Company shall have delivered to such Purchaser (i) an Officer’s Certificate, dated the date of
the Closing, certifying that the conditions specified in Section 4 of this Agreement with respect to the Closing have been
fulfilled, (ii) copies of all certificates and opinions required to be delivered to the Trustee under the Indenture in connection
with the issuance of the Bonds under the Indenture, in each case, dated the date of the Closing, and (iii) copies of all
certificates and opinions delivered to the Trustee under the Indenture with respect to the execution and delivery of the First
Supplement; and

(b) Secretary’s
Certificate. The Company shall have delivered to such Purchaser a certificate of its Secretary or Assistant Secretary, dated
the date of the Closing, certifying as to the resolutions attached thereto and other corporate proceedings relating to the authorization,
execution and delivery of this Agreement and the Bonds.

    	-3-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Section 4.4. Opinions
of Counsel. Such Purchaser shall have received opinions in form and substance reasonably satisfactory to such Purchaser, dated
the date of the Closing (a) from Cozen O’Connor, counsel for the Company, and, covering the matters set forth
in Exhibit 4.4(a) and covering such other matters incident to the transactions contemplated hereby as such Purchaser
or its counsel may reasonably request and (b) from Chapman and Cutler LLP, the Purchasers’ special counsel in connection
with such transactions, covering such matters incident to such transactions as such Purchaser may reasonably request. The Company
hereby directs its counsel to deliver such opinions and understands and agrees that each Purchaser will and hereby is authorized
to rely on such opinions to the extent set forth therein.

Section 4.5. Purchase
Permitted by Applicable Law, Etc. On the Closing Date, such Purchaser’s purchase of the Bonds 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 hereof.
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 Bonds. Contemporaneously with the Closing, the Company shall sell to each Purchaser and each Purchaser shall purchase the
Bonds to be purchased by it at the Closing as specified in Schedule A.

Section 4.7. Payment
of Special Counsel Fees. Without limiting the provisions of Section 14.2, the Company shall have paid on or before the
Closing the reasonable fees, charges and disbursements of the Purchasers’ special counsel referred to in Section 4.4(b)
to the extent reflected in a statement of such counsel rendered to the Company at least one Business Day prior to the Closing.

Section 4.8. Private
Placement Number. A Private Placement Number issued by Standard & Poor’s CUSIP Service Bureau (in cooperation with
the SVO) shall have been obtained for each Tranche of the Bonds.

Section 4.9. Changes
in Corporate Structure. The Company shall not have changed its jurisdiction of incorporation, 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 the most recent financial statements referred to in Schedule 5.5.

    	-4-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Section 4.10. Funding
Instructions. At least three Business Days prior to the date of the Closing, each Purchaser shall have received written instructions
signed by a Responsible Officer on letterhead of the Company setting forth wire instructions for payment of the purchase price
of the Bonds, including (a) the name and address of the transferee bank, (b) such transferee bank’s ABA number
and (c) the account name and number into which the purchase price for the Bonds is to be deposited.

Section 4.11. Execution
and Delivery of First Supplement; Filing and Recording of UCC Financing Statements and the First Supplement. The First Supplement
shall have been duly executed and delivered by the Company and the Trustee. All UCC Financing Statements, the Indenture, the First
Supplement or other instruments with respect thereto as may be necessary shall have been duly filed or recorded (or, in the case
of the First Supplement, duly submitted for recording) in such manner and in such places as is reasonably satisfactory to the
Purchasers (and their special counsel) and the Company and as described in Schedule 4.11 (collectively, the “Collateral
Filings”), and no other instruments shall be required to be filed to establish and perfect the Lien of the Trustee upon
the Mortgaged Property created by the Indenture (including the First Supplement), which can be perfected by filing the Indenture,
the First Supplement or a UCC Financing Statement under the UCC, and the Company shall have delivered satisfactory evidence of
such filings and recordings, except that the Company shall deliver to the Purchasers (and their special counsel) evidence of the
recording of the First Supplement promptly after such recordings are made.

Section 4.12. Title
Policy. On or prior to the date of the Closing, the Company shall have delivered a standard American Land Title Association
2006 Form mortgagee title policy issued by a title insurance company with an AM Best rating of A or better (or a reasonably comparable
rating from another corporation providing similar ratings), naming the Trustee as the insured, insuring that the Indenture constitutes
a Lien on each tract and parcel of land and improvements subject to the Lien of the Indenture having an assessed value of at least
$1,000,000, subject to no Lien thereon prior to the Lien of the Indenture, except Permitted Liens and standard exceptions in an
ALTA title insurance policy, and including typical and applicable endorsements.

Section 4.13. Proceedings
and Documents. All corporate and other proceedings in connection with the transactions contemplated by this Agreement and
all documents and instruments incident to such transactions shall be reasonably satisfactory to each Purchaser and its special
counsel, and each 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. Each Purchaser that so requests shall have
received a copy of the Indenture (together with all amendments and supplements thereto), certified by the Company as of the date
of the Closing, exclusive of property exhibits, recording information and the like.

    	-5-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Section 5.            Representations and Warranties of the Company.

The
Company represents and warrants to each Purchaser that:

Section 5.1. Organization;
Power and Authority. The Company is a corporation duly organized and validly existing under the State of New Jersey and is
in good standing under the laws of the State of New Jersey, and is duly qualified as a foreign corporation and is in good standing
in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to
be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect. The Company has the corporate power and authority to own or hold under lease the properties it purports to own or hold
under lease, to transact the business it transacts and proposes to transact, to execute and deliver each Financing Agreement (and,
in the case of the Indenture, had the corporate power and authority to execute and deliver the Indenture at the time of execution
and delivery thereof) and to perform the provisions hereof and thereof.

Section 5.2. Authorization,
Etc. Each Financing Agreement has been duly authorized by all necessary corporate action on the part of the Company, and each
Financing Agreement constitutes, and upon execution and delivery thereof each Bond will constitute, a legal, valid and binding
obligation of the Company enforceable against the Company in accordance with its respective terms, except as such enforceability
may be limited by (a) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement
of creditors’ rights generally and (b) general principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law).

Section 5.3. Disclosure.
The Company, through its agents, Merrill Lynch, Pierce, Fenner & Smith Incorporated and TD Securities (USA) LLC, has delivered
to you and each other Purchaser a copy of a Confidential Information Memorandum, dated September 2018 (the “Memorandum”),
relating to the Company. The Memorandum fairly describes, in all material respects, the general nature of the business and principal
properties of the Company. This Agreement, the Memorandum, the documents, certificates or other writings delivered to the Purchasers
by or on behalf of the Company in connection with the transactions contemplated hereby and the financial statements listed in
Schedule 5.5, in each case, delivered to the Purchasers prior to the date of this Agreement (this Agreement, the Memorandum
and such documents, certificates or other writings and such financial statements 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 September 19, 2018, there has been no change in the financial condition, operations,
business or properties of the Company except changes that individually or in the aggregate would not reasonably be expected to
have a Material Adverse Effect. There is no fact known to the Company that would reasonably be expected to have a Material Adverse
Effect that has not been set forth herein or in the Disclosure Documents.

Section 5.4. Subsidiaries.
The Company has no Subsidiaries.

Section 5.5. Financial
Statements; Material Liabilities. The Company has delivered to each Purchaser copies of the financial statements of the Company
listed in Schedule 5.5. All of said financial statements (including in each case the related schedules and notes) fairly
present in all material respects the financial position of the Company as of the respective dates specified in such financial
statements and the results of its operations and cash flows for the respective periods so specified and have been prepared in
accordance with GAAP consistently applied throughout the periods involved except as set forth in the notes thereto (subject, in
the case of any interim financial statements, to normal year-end adjustments). The Company does not have any Material liabilities
that are not disclosed on such financial statements or otherwise disclosed in the Disclosure Documents or in Schedule 5.15.

    	-6-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Section 5.6. Compliance
with Laws, Other Instruments, Etc. The execution, delivery and performance by the Company of each Financing Agreement will
not (a) contravene, result in any breach of, or constitute a default under, or result in the creation of any Lien, other
than the Lien created under the Indenture, in respect of any property of the Company, under, any indenture, mortgage, deed of
trust, loan, purchase or credit agreement, lease, corporate charter or bylaws, or any other Material agreement or instrument to
which the Company is bound or by which the Company or any of its properties may be bound or affected, (b) conflict with or
result in a breach of any of the terms, conditions or provisions of any order, judgment, decree, or ruling of any court, arbitrator
or Governmental Authority applicable to the Company, including, without limitation, the Public Order, or (c) violate any
provision of any statute or other rule or regulation of any Governmental Authority applicable to the Company.

Section 5.7. Governmental
Authorizations, Etc. No consent, approval or authorization of, or registration, filing or declaration with, any Governmental
Authority is required in connection with the execution, delivery or performance by the Company of any Financing Agreement, except
for any filing that has already been made or any approval that has already been obtained, including without limitation the Public
Order, or for certain post-Closing filing requirements with the Board of Public Utilities, State of New Jersey, as required by
the Public Order. The period of time for filing an appeal as of right to the Superior Court of New Jersey, Appellate Division
with respect to the Public Order has expired.

Section 5.8. Litigation;
Observance of Statutes and Orders. (a) There are no actions, suits, investigations or proceedings pending or, to the
knowledge of the Company, threatened against or affecting the Company or any property of the Company in any court or before any
arbitrator of any kind or before or by any Governmental Authority that, individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect.

(b) The
Company is not (i) in default under any term of any agreement or instrument to which it is a party or by which it is bound,
(ii) in violation of any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority or (iii) 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), which default or
violation, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.

Section 5.9. Taxes.
The Company has filed all tax returns that are required to have been filed in any jurisdiction, and has paid all taxes shown to
be due and payable on such returns and all other taxes and assessments levied upon it or its properties, assets, income or franchises,
to the extent such taxes and assessments have become due and payable and before they have become delinquent, except for any taxes
and assessments (a) the amount of which is not individually or in the aggregate Material or (b) the amount, applicability
or validity of which is currently being contested in good faith by appropriate proceedings and with respect to which the Company
has established adequate reserves in accordance with GAAP. The Company knows of no basis for any other tax or assessment that
would reasonably be expected to have a Material Adverse Effect. The charges, accruals and reserves on the books of the Company
in respect of federal, state or other taxes for all fiscal periods are adequate. The Company was incorporated in October 2017
and, accordingly, has not had any federal income tax liabilities finally determined (whether by reason of completed audits or
the statute of limitations having run).

    	-7-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Section 5.10. Title
to Property; Leases. The Company has good and sufficient title to its properties that individually or in the aggregate are
Material, including all such properties reflected in the most recent audited balance sheet referred to in Section 5.5 or
purported to have been acquired by the Company after said date (except as sold or otherwise disposed of in the ordinary course
of business), in each case free and clear of Liens (other than the Lien created under the Indenture) prohibited by the Indenture.
To the Company’s knowledge, 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 owns or possesses all licenses, permits, franchises, authorizations, patents, copyrights, proprietary
software, service marks, trademarks and trade names, or rights thereto, that, individually or in the aggregate, are Material to
its business as now being conducted, without known conflict with the rights of others, except for those conflicts that would not
be reasonably expected to have a Material Adverse Effect.

Section 5.12. Compliance
with ERISA. (a) Each Plan, other than any Multiemployer Plan, operated and administered by the Company or any ERISA Affiliate
and each Plan with which the Company or any ERISA Affiliate has a relationship has been operated and administered in compliance
with all applicable laws except for such instances of noncompliance as have not resulted in and would not reasonably be expected
to result in a Material Adverse Effect. Neither the Company nor any ERISA Affiliate has incurred any liability pursuant to Title I
or IV of ERISA or the penalty or excise tax provisions of the Code relating to “employee benefit plans” (as defined
in Section 3 of ERISA), which liability has resulted or would reasonably be expected to result in a Material Adverse Effect,
and no event, transaction or condition has occurred or exists that could 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 liabilities or Liens as would
not be individually or in the aggregate Material.

(b) The
present value of the aggregate benefit liabilities under each of the Plans (other than Multiemployer Plans), determined as of
the end of such Plan’s most recently ended plan year on the basis of the actuarial assumptions specified for funding purposes
in such Plan’s most recent actuarial valuation report, did not exceed the aggregate current value of the assets of such
Plan allocable to such benefit liabilities by more than $10,000,000 in the aggregate for all Plans. The term “benefit liabilities”
has the meaning specified in Section 4001 of ERISA and the terms “current value” and “present value”
have the meanings specified in Section 3 of ERISA.

    	-8-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

(c) The
Company and its ERISA Affiliates have not incurred withdrawal liabilities (and are not subject to contingent withdrawal liabilities)
under Section 4201 or 4204 of ERISA in respect of Multiemployer Plans that individually or in the aggregate are Material.

(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 is not Material.

(e) The
execution and delivery of this Agreement and the issuance and sale of the Bonds 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 each Purchaser’s representation in Section 6.2 as to the sources of the
funds to be used to pay the purchase price of the Bonds to be purchased by such Purchaser.

Section 5.13. Private
Offering by the Company. Neither the Company nor anyone acting on the
Company’s behalf has offered the Bonds or any similar securities for sale to, or solicited any offer to buy any of the same
from, or otherwise approached or negotiated in respect thereof with, any Person other than the Purchasers and not more than forty
(40) other Institutional Investors, each of which has been offered the Bonds in connection with 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 Bonds 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 use the proceeds of the sale of the Bonds to repay debt, including amounts
outstanding under that credit agreement dated as of June 26, 2018 referred to on Schedule 5.15(a), and for general corporate purposes,
and in compliance with all laws referenced in Section 5.16. No part of the proceeds from the sale of the Bonds 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 1% of the value of the assets of the Company, and the Company does not have any present intention that margin stock will
constitute more than 1% 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.

    	-9-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Section 5.15. Existing
Indebtedness. (a) Except as described therein, Schedule 5.15(a) sets forth a complete and correct list of all outstanding
Indebtedness of the Company as of September 30, 2018 (including a description of the obligors and obligees, principal amount outstanding
and collateral therefor, if any, and guaranty thereof, if any), since which date there has been no Material change in the amounts,
interest rates, sinking funds, installment payments or maturities of the Indebtedness of the Company. The Company is not in default
and no waiver of default is currently in effect, in the payment of any principal or interest on any Indebtedness of the Company,
and no event or condition exists with respect to any Indebtedness of the Company, that would permit (or that with notice or the
lapse of time, or both, would 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) Except
as disclosed in Schedule 5.15(b), the Company has not agreed or consented to cause or permit in the future (upon the happening
of a contingency or otherwise) any of its property, whether now owned or hereafter acquired, to be subject to a Lien not permitted
by the Indenture.

(c) The
Company is not a party to, or otherwise subject to any provision contained in, any instrument evidencing Indebtedness of the Company,
any agreement relating thereto or any other agreement (including, but not limited to, its charter or other organizational document)
which limits the amount of, or otherwise imposes restrictions on the incurring of, Indebtedness of the Company, except as specifically
indicated in Schedule 5.15(c).

Section 5.16. Foreign
Assets Control Regulations, Etc. (a) Neither the Company nor any Controlled Entity (i) is a Blocked Person, (ii) has been
notified that its name appears or may in the future appear on a State Sanctions List or (iii) has been notified that it is a target
of sanctions that have been imposed by the United Nations or the European Union.

(b) Neither
the Company nor any Controlled Entity (i) has, to the Company’s knowledge, violated, been found in violation of, or been
charged or convicted under, any applicable U.S. Economic Sanctions Laws, Anti-Money Laundering Laws or Anti-Corruption Laws or
(ii) to the Company’s knowledge, is under investigation by any Governmental Authority for possible violation of any U.S.
Economic Sanctions Laws, Anti-Money Laundering Laws or Anti-Corruption Laws.

(c) No
part of the proceeds from the sale of the Bonds hereunder:

(i) constitutes
or will constitute funds obtained on behalf of any Blocked Person or will otherwise be used by the Company or any Controlled Entity,
directly or indirectly, (A) in connection with any investment in, or any transactions or dealings with, any Blocked Person, (B)
for any purpose that would cause any Purchaser to be in violation of any U.S. Economic Sanctions Laws or (C) otherwise in violation
of any U.S. Economic Sanctions Laws;

(ii) will
be used, directly or indirectly, in violation of, or cause any Purchaser to be in violation of, any applicable Anti-Money Laundering
Laws; or

(iii) will
be used, directly or indirectly, for the purpose of making any improper payments, including bribes, to any official of a Governmental
Authority or commercial counterparty in order to obtain, retain or direct business or obtain any improper advantage, in each case
which would be in violation of, or cause any Purchaser to be in violation of, any applicable Anti-Corruption Laws.

    	-10-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

(d) The
Company has established procedures and controls which it reasonably believes are adequate (and otherwise comply with applicable
law) to ensure that the Company and each Controlled Entity is and will continue to be in compliance with all applicable U.S. Economic
Sanctions Laws, Anti-Money Laundering Laws and Anti-Corruption Laws.

Section 5.17. Status
under Certain Statutes. The Company is not subject to regulation under the Investment Company Act of 1940, as amended, the
Public Utility Holding Company Act of 2005, as amended, the ICC Termination Act of 1995, as amended, nor is the Company subject
to rate regulation under the Federal Power Act, as amended. The Company is a “transmitting utility” as such term is
defined in Section 9-102(a)(80) of the Uniform Commercial Code adopted in the State of New Jersey (N.J.S.A. 12A:9-102(a)(80)).

Section 5.18. Environmental
Matters. (a) The Company has no knowledge of any liability, has not received any notice of any liability, and no proceeding
has been instituted raising any liability against the Company or any of its real properties or other assets now or formerly owned,
leased or operated by the Company, 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) The
Company has no knowledge of any facts which would give rise to any liability, public or private, for violation of Environmental
Laws or damage to the environment emanating from, occurring on or in any way related to real properties now or formerly owned,
leased or operated by the Company or to other assets or their use, except, in each case, such as would not reasonably be expected
to result in a Material Adverse Effect.

(c) The
Company has not stored any Hazardous Materials on real properties now or formerly owned, leased or operated by it nor has it disposed
of any Hazardous Materials in each case in a manner contrary to any Environmental Laws that would reasonably be expected to result
in a Material Adverse Effect.

(d) All
buildings on all real properties now owned, leased or operated by the Company are in compliance with applicable Environmental
Laws, except where failure to comply would not reasonably be expected to result in a Material Adverse Effect.

    	-11-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Section 5.19. Lien
of Indenture. The Indenture (including the First Supplement) constitutes a direct and valid Lien upon all of the properties
and assets of the Company specifically or generally described or referred to in the Indenture as being subject to the Lien thereof,
subject only to Permitted Liens, and will create a similar Lien upon all properties and assets acquired by the Company after the
date hereof which are required to be subjected to the Lien of the Indenture, when acquired by the Company, subject only to the
exceptions referred to in the Indenture and Permitted Liens, and subject, further, as to the real property, to the recordation
of a supplement to the Indenture describing such after-acquired property and, as to personal property, the filing of a financing
statement if necessary with respect to the after-acquired collateral; the descriptions of all such properties and assets contained
in the granting clauses of the Indenture are correct and adequate for the purposes of the Indenture; and the Original Indenture
has been duly recorded, and the First Supplement has been duly submitted for recording, as a mortgage of real estate, and any
required filings with respect to personal property and fixtures subject to the Lien of the Indenture have been duly made in each
place in which such recording or filing is required to protect, preserve and perfect the Lien of the Indenture; and all taxes
and recording and filing fees required to be paid with respect to the execution, recording or filing of the Indenture (including
the First Supplement), the filing of any financing statements related thereto and similar documents and the issuance of the Bonds
have been paid. The Original Indenture has been recorded, and the First Supplement has been duly submitted for recording, in the
real estate recording office in each county listed on Schedule 4.11, which counties collectively include all counties where the
Company owns property subject to the Lien of the Indenture.

Section 5.20. Filings
under Indenture. No action that has not already been taken, including any filing, registration, notice or approval, is necessary
or advisable in New Jersey, New York or any other jurisdiction to establish or protect for the benefit of the Trustee and the
Holders of Bonds that the Bonds are secured by the Lien of the Indenture, other than recording the First Supplement in the counties
in New Jersey referred to therein.

Section 5.21. Status
of Certain Material Agreements. No amendment, modification, supplement or other change has been made to the Indenture other
than the First Supplement.

Section 6.            Representations of the Purchasers.

Section 6.1. Purchase
for Investment. Each Purchaser severally represents that it is purchasing the Bonds 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 the property of such Purchaser or such pension or trust fund shall
at all times be within the control of such Purchaser or such pension or trust fund. Each Purchaser understands that the Bonds
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 Bonds. Each Purchaser understands that the
Bonds are being offered and sold in reliance upon specific exemptions from the registration requirements of United States federal
and state securities laws and that the Company is relying upon the truth and accuracy of the representations, warranties, agreements,
acknowledgements and understandings set forth herein in order to determine the applicability of such exemptions and the suitability
of such Purchaser to acquire the Bonds.

    	-12-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Section 6.2. Source
of Funds. Each Purchaser severally represents that at least one of the following statements is an accurate representation
as to each source of funds (a “Source”) to be used by such Purchaser to pay the purchase price of the Bonds
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 (i) an “insurance company pooled separate account,” (within the meaning of PTE 90-1) or (ii) a
“bank collective investment fund” (within the meaning of PTE 91-38) and, except as disclosed by such Purchaser to
the Company in writing pursuant to this clause (c), no employee benefit plan or group of plans maintained by the same employer
or employee organization beneficially owns more than 10% of all assets allocated to such pooled separate account or collective
investment fund; or

(d) the
Source constitutes assets of an “investment fund” (within the meaning of Part VI of PTE 84-14 (the “QPAM
Exemption”)) managed by a “qualified professional asset manager” or “QPAM” (within the meaning
of Part VI of the QPAM Exemption); no employee benefit plan’s assets that are managed by the QPAM in such investment
fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an
“affiliate” (within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same employee
organization and managed by such QPAM, represent more than 20% of the total client assets managed by such QPAM; the conditions
of Part I(c) and (g) of the QPAM Exemption are satisfied; neither the QPAM nor a Person controlling or controlled by the QPAM
maintains an ownership interest in the Company that would cause the QPAM and the Company to be “related” within the
meaning of Part (VI)(h) of the QPAM Exemption and (i) the identity of such QPAM and (ii) the names of any employee benefit
plans whose assets in the investment fund, when combined with the assets of all other employee benefit plans established or maintained
by the same employer or by an affiliate (within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by
the same employee organization, represent 10% or more of the assets of such investment fund, have been disclosed to the Company
in writing pursuant to this clause (d); or

    	-13-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

(e) the
Source constitutes assets of a “plan(s)” (within the meaning of Part IV(h) of PTE 96-23 (the “INHAM
Exemption”)) managed by an “in-house asset manager” or “INHAM” (within the meaning of Part IV(a)
of the INHAM Exemption); the conditions of Part I(a), (g) and (h) of the INHAM Exemption are satisfied; neither the INHAM nor
a Person controlling or controlled by the INHAM (applying the definition of “control” in Part IV(d)(3) of the
INHAM Exemption) owns a 10% or more interest in the Company and (i) the identity of such INHAM and (ii) the name(s)
of the employee benefit plan(s) whose assets constitute the Source have been disclosed to the Company in writing pursuant to this
clause (e); or

(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 “plan assets” of any employee benefit plan, other than a plan exempt from the coverage of
Title I 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 6.3. Purchaser
Status; Experience. Each Purchaser separately represents that such Purchaser is, and on the Closing Date will be, an “accredited
investor” as defined in Rule 501(a) under the Securities Act. Such Purchaser, either alone or together with its representatives,
has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits
and risks of the prospective investment in the Bonds, and has so evaluated the merits and risks of such investment. Such Purchaser
is able to bear the economic risk of an investment in the Bonds and is able to afford a complete loss of such investment.

Section 6.4. Access
to Information. Each Purchaser separately acknowledges that such Purchaser has reviewed the Disclosure Documents and has been
afforded (a) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives
of the Company concerning the terms and conditions of the offering of the Bonds and the risks of investing in the Bonds; (b) access
to information about the Company and its financial condition, results of operations, business, properties, management and prospects
sufficient to enable it to evaluate its investment; and (c) the opportunity to obtain such additional information that the Company
possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with
respect to the investment.

    	-14-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Section 7.            Information as to Company.

Section 7.1. Financial
and Business Information. The Company shall deliver to each Holder of a Bond that is an Institutional Investor:

(a) Quarterly
Statements — within 60 days after the end of each quarterly fiscal period in each fiscal year of the Company (other
than the last quarterly fiscal period of each such fiscal year), duplicate copies of:

(i) a
consolidated balance sheet of the Company and its Subsidiaries as at the end of such quarter, and

(ii) consolidated
statements of income and changes in 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); and provided, further,
that the Company shall be deemed to have made such delivery of such Form 10-Q if it shall have timely made such Form 10-Q
available on “EDGAR” or on, or through a link on, the website of the Company or Parent and shall have given each Institutional
Investor prior notice of such availability on EDGAR or on or through the website of the Company or Parent in connection with each
delivery (such availability and notice thereof being referred to as “Electronic Delivery”);

(b) Annual
Statements — within 120 days after the end of each fiscal year of the Company, duplicate copies of:

(i) a
consolidated balance sheet of the Company and its Subsidiaries, as at the end of such year, and

(ii) consolidated
statements of income and changes in cash flows and 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 thereon 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 Annual Report on Form 10-K for such fiscal year (together with the
Company’s annual report to shareholders, if any, prepared pursuant to Rule 14a-3 under the Exchange Act) prepared in accordance
with the requirements therefor and filed with the SEC shall be deemed to satisfy the requirements of this Section 7.1(b),
and provided, further, that the Company shall be deemed to have made such delivery of such Form 10-K if it shall have
timely made Electronic Delivery thereof;

    	-15-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

(c) SEC
and Other Reports — except for the filings referred to in Section 7.1(a) and (b) above, promptly upon their becoming
available and, to the extent applicable, one copy of (i) each financial statement, report, notice or proxy statement sent
by the Company or any Subsidiary to public securities holders generally, and (ii) each regular or periodic report, each registration
statement (without exhibits except as expressly requested by such Institutional Investor), and each prospectus and all amendments
thereto filed by the Company or any Subsidiary with the SEC and of all press releases and other statements made available generally
by the Company or any Subsidiary to the public concerning developments that are Material, provided that the Company shall
be deemed to have made such delivery of such information if it shall have timely made Electronic Delivery thereof;

(d) Notice
of Default or Event of Default — promptly, and in any event within five Business Days after a Responsible Officer becomes
aware of the existence of any Default or Event of Default or that any Person has given any notice or taken any action with respect
to a claimed default hereunder or that any Person has given any notice or taken any action with respect to a claimed default of
the type referred to in Section 11(f) hereof, a written notice specifying the nature and period of existence thereof and
what action the Company is taking or proposes to take with respect thereto;

(e) ERISA
Matters — promptly, and in any event within ten Business Days after a Responsible Officer becomes 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:

(i) with
respect to any Plan (other than any Multiemployer Plan) that is subject to Title IV of ERISA, 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

    	-16-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

(ii) 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 such 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

(iii) 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 employee benefit 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 liability or Lien, taken together with any other such liabilities or Liens then
existing, would reasonably be expected to have a Material Adverse Effect;

(f) Supplemental
Indentures — promptly, and in any event within five days after the execution and delivery thereof, a copy of any supplement
to the Indenture that the Company from time to time may hereafter execute and deliver which amends the Indenture in any material
respect; and

(g) 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 or relating to the ability of the Company
to perform its obligations hereunder and under the Bonds as from time to time may be reasonably requested by any Holder of a Bond
that is an Institutional Investor or such information regarding the Company required to satisfy the requirements of 17 CFR
§230.144A, as amended from time to time, in connection with any contemplated transfer of the Bonds.

Section 7.2. Officer’s
Certificate. Each set of financial statements delivered to a Holder of a Bond that is an Institutional Investor pursuant to
Section 7.1(a) or Section 7.1(b) shall be accompanied by a certificate of a Senior Financial Officer setting forth:

(a) Covenant
Compliance — (i) the information (including detailed calculations) required in order to establish whether the Company
was in compliance with the requirements of the Indenture during the quarterly or annual period covered by the statements then
being furnished to the extent required to be provided under the Indenture; and (ii) to the extent the Company issued additional
Securities under the Indenture during the period covered by the statements being furnished, any calculations that the Company
provided to the Trustee to show compliance with the Indenture in connection with the issuance of such additional Securities.

    	-17-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

(b) Event
of Default – a statement that such Senior Financial Officer has reviewed the relevant terms hereof and of the Indenture
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 under either the Indenture or this Agreement, 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 Bond that is an Institutional Investor:

(a) No
Default – if no Default or Event of Default then exists, at the expense of such Institutional Investor 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 to the extent they are reasonably available, 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 and is continuing, 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 reasonably
requested.

Section 8.            Payment
and Prepayment of the Bonds.

Section 8.1. Maturity.
As provided therein, the entire unpaid principal balance of each of the Series 2018A Bonds shall be due and payable on the
respective stated maturity dates 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, the Bonds, in an amount not less than 5% of the aggregate principal amount of the Bonds then
outstanding in the case of a partial prepayment, at 100% of the principal amount so prepaid, together with interest accrued thereon
to the date of such prepayment, plus the Make-Whole Amount determined for the prepayment date with respect to such principal amount
of each Bond that is then being so prepaid. The Company will give each Holder of Bonds written notice of each optional prepayment
under this Section 8.2 not less than 30 days and not more than 60 days prior to the date fixed for such prepayment, unless
the Company and the Required Holders agree to another time period pursuant to Section 16. Each such notice shall specify
such date (which shall be a Business Day), the aggregate principal amount of the Bonds to be prepaid on such date, the principal
amount of each Bond held by such Holder to be prepaid (determined in accordance with Section 8.3), and any other information
required to be delivered under the terms of the Indenture, 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 Bonds a certificate of a Senior Financial Officer specifying the calculation of such Make-Whole Amount as of the specified
prepayment date. Notwithstanding the foregoing, (a) the Series 2018A-1 Bonds may be prepaid without paying the Make-Whole Amount,
at the Company’s option, beginning on September 20, 2028, (b) the Series 2018A-2 Bonds may be prepaid without paying the
Make-Whole Amount, at the Company’s option, beginning on September 20, 2033, (c) the Series 2018A-3 Bonds may be prepaid
without paying the Make-Whole Amount, at the Company’s option, beginning on August 20, 2038, (d) the Series 2018A-4 Bonds
may be prepaid without paying the Make-Whole Amount, at the Company’s option, beginning on June 20, 2048 and (e) the Series
2018A-5 Bonds may be prepaid without paying the Make-Whole Amount, at the Company’s option, beginning on June 20, 2058.

    	-18-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Section 8.3. Allocation
of Partial Prepayments.  In the case of each partial prepayment of the Bonds pursuant to the provisions of Section 8.2, the
principal amount of the Bonds to be prepaid shall be allocated among all of the Bonds at the time outstanding in proportion, as
nearly as practicable, to the respective unpaid principal amounts thereof.

Section 8.4. Maturity;
Surrender, Etc. In the case of each prepayment of Bonds pursuant to this Section 8, the principal amount of each Bond
to be prepaid shall mature and become due and payable on the date fixed for such prepayment (which shall be a Business Day), together
with interest on such principal amount accrued to such date and the applicable Make-Whole Amount, if any. From and after such
date, unless the Company shall fail to pay such principal amount when so due and payable, together with the interest and Make-Whole
Amount, if any, as aforesaid, interest on such principal amount shall cease to accrue. Any Bond paid or prepaid in full shall
be surrendered to the Company and cancelled and shall not be reissued, and no Bond shall be issued in lieu of any prepaid principal
amount of any Bond.

Section 8.5. Purchase
of Bonds. The Company will not and will not permit any Affiliate to purchase, redeem, prepay or otherwise acquire, directly
or indirectly, any of the outstanding Bonds except (a) upon the payment or prepayment of the Bonds in accordance with the
terms of this Agreement and the Bonds or (b) pursuant to a written offer to purchase all outstanding Bonds made by the Company
or an Affiliate pro rata to the Holders of the Bonds upon the same terms and conditions. The Company will promptly cancel all
Bonds acquired by it or any Affiliate pursuant to any payment, prepayment or purchase of Bonds pursuant to any provision of this
Agreement and no Bonds may be issued in substitution or exchange for any such Bonds (other than with respect to any principal
amount of any such Bond that was not so purchased, redeemed, prepaid or otherwise acquired).

Section 8.6. Make-Whole
Amount for the Bonds. The term “Make-Whole Amount” means, with respect to any Bond, 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 Bond
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:

    	-19-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

“Called
Principal” means, with respect to any Bond of any Tranche, the principal of such Bond that is to be prepaid pursuant
to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1 or any other
Financing Agreement, as the context requires.

“Discounted
Value” means, with respect to the Called Principal of any Bond, 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 Bonds of such Tranche is payable) equal to the Reinvestment Yield with respect to such Called
Principal.

“Reinvestment
Yield” means, with respect to the Called Principal of any Bond, 0.50% plus the yield to maturity implied by the 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 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 Bond.

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 Bond, 0.50% plus the yield to
maturity implied by the U.S. Treasury constant maturity yields reported, for the latest day for which such yields have been so
reported as of the second Business Day preceding the Settlement Date with respect to such Called Principal, in Federal Reserve
Statistical Release H.15 (or any comparable successor publication) for the U.S. Treasury constant maturity having a term equal
to the Remaining Average Life of such Called Principal as of such Settlement Date. If there is no such U.S. Treasury constant
maturity having a term equal to such Remaining Average Life, such implied yield to maturity will be determined by interpolating
linearly between (1) the U.S. Treasury constant maturity so reported with the term closest to and greater than such Remaining
Average Life and (2) the U.S. Treasury constant maturity so reported with the term closest to and less than such Remaining
Average Life. The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the Bond.

    	-20-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

“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 (i) the principal component of each Remaining Scheduled
Payment with respect to such Called Principal by (ii) 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 Bond, 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 Bond, then the amount of the next succeeding scheduled interest payment will be reduced
by the amount of interest accrued to such Settlement Date and required to be paid on such Settlement Date pursuant to Section 8.2
or Section 12.1, as the context requires.

“Settlement
Date” means, with respect to the Called Principal of any Bond, the date on which such Called Principal is to be prepaid
pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as
the context requires.

Section 8.7. Change
in Control.

(a) Notice
of Change in Control.  The Company will, within 15 Business Days after any Responsible Officer has knowledge of the occurrence
of any Change in Control, give written notice of such Change in Control to each Holder of Bonds. If a Change in Control has occurred,
such notice shall contain and constitute an offer to prepay the Bonds as described in subparagraph (b) of this Section 8.7
and shall be accompanied by the certificate described in subparagraph (e) of this Section 8.7.

(b) Offer
to Prepay Bonds. The offer to prepay Bonds contemplated by subparagraph (a) of this Section 8.7 shall be an offer
to prepay, in accordance with and subject to this Section 8.7, all, but not less than all, of the Bonds held by each holder
(in this case only, “holder” in respect of any Bond registered in the name of a nominee for a disclosed beneficial
owner shall mean such beneficial owner) on a date specified in such offer (the “Proposed Prepayment Date”).
If such Proposed Prepayment Date is in connection with an offer contemplated by subparagraph (a) of this Section 8.7,
such date shall be not less than 20 days and not more than 45 days after the date of such offer (if the Proposed Prepayment
Date shall not be specified in such offer, the Proposed Prepayment Date shall be the 30th day after the date of such offer).

(c) Acceptance;
Rejection. A Holder of Bonds may accept the offer to prepay made pursuant to this Section 8.7 by causing a notice of
such acceptance or rejection to be delivered to the Company at least five Business Days prior to the Proposed Prepayment Date.
A failure by a Holder of Bonds to respond to an offer to prepay made pursuant to this Section 8.7 shall be deemed to constitute
a rejection of such offer by such Holder.

    	-21-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

(d) Prepayment.
Prepayment of the Bonds to be prepaid pursuant to this Section 8.7 shall be at 100% of the principal amount of such Bonds,
together with interest on such Bonds accrued to the date of prepayment. The prepayment shall be made on the Proposed Prepayment
Date.

(e) Officer’s
Certificate.  Each offer to prepay the Bonds pursuant to this Section 8.7 shall be accompanied by a certificate, executed
by a Senior Financial Officer of the Company and dated the date of such offer, specifying: (i) the Proposed Prepayment Date;
(ii) that such offer is made pursuant to this Section 8.7; (iii) the principal amount of each Bond offered to be
prepaid; (iv) the interest that would be due on each Bond offered to be prepaid, accrued to the Proposed Prepayment Date;
(v) that the conditions of this Section 8.7 have been fulfilled; and (vi) in reasonable detail, the nature and
date or proposed date of the Change in Control.

(f) Effect
on Required Payments. The amount of each payment of the principal of the Bonds made pursuant to this Section 8.7 shall
be applied against and reduce each of the then remaining principal payments due on such Bonds pursuant to Section 8.1 by
a percentage equal to the aggregate principal amount of such Bonds so paid divided by the aggregate principal amount of such Bonds
outstanding immediately prior to such payment.

(g) “Change
in Control” Defined. “Change in Control” means the occurrence of one or more of the following events:

(i) any
sale, lease, exchange or other transfer (in a single transaction or a series of related transactions) of all or substantially
all of the assets of the Company to any Person or “group” (within the meaning of the Exchange Act and the rules of
the SEC thereunder in effect on the Closing Date), or

(ii) the
acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or “group” (within the
meaning of the Exchange Act and the rules of the SEC thereunder as in effect on the Closing Date) of 50% or more of the outstanding
ownership interests of the Company, other than an acquisition by Parent or any direct or indirect wholly-owned Subsidiary of Parent
of such outstanding ownership interests of the Company.

Section 9.            Affirmative
Covenants.

The
Company covenants that so long as any of the Bonds are outstanding:

Section 9.1. Compliance
with Law. Without limiting Section 10.3, 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 reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

    	-22-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

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 tax 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 and
levies in the aggregate would not reasonably be expected to have a Material Adverse Effect.

Section 9.5. Corporate
Existence, Etc. 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 its Subsidiaries
unless, in the good faith judgment of the Company or such Subsidiary, 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, except where any such nonconformity would not reasonably be expected to have a Material Adverse
Effect.

    	-23-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Section 9.7. Compliance
with Material Agreements. The Company will comply in all material respects with the material terms, conditions and provisions
of all Material agreements, except where such noncompliance would not reasonably be expected to have a Material Adverse Effect.

Section 10.            Negative Covenants.

The
Company covenants that so long as any of the Bonds 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 to the Company or such Subsidiary than would be obtainable in a comparable arm’s-length transaction with
a Person not an Affiliate.

Section 10.2. Line
of Business. The Company will not 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 is engaged on the date of this Agreement.

Section 10.3. Terrorism
Sanctions Regulations. The Company will not and will not permit any Controlled Entity (a) to 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, or (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 Bonds)
with any Person if such investment, dealing or transaction (i) would cause any Holder of Bonds to be in violation of or subject
to sanctions under any law or regulation applicable to such Holder, or (ii) is prohibited by or subject to sanctions under any
U.S. Economic Sanctions, or (c) to engage, nor shall any Affiliate of either engage, in any activity that could subject such Person
or any Holder of Bonds 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 10.4. Non-US
Investors. Except as otherwise required by applicable law, the Company agrees that it will not withhold from any applicable
payment to be made to a holder of a Bond that is not a United States Person any tax so long as such holder shall have
delivered to the Company (in such number of copies as shall be requested) on or about the date on which such holder becomes a
holder under this Agreement (and from time to time thereafter upon the reasonable request of the Company), executed copies of
IRS Form W-8BEN or IRS Form W-8BEN-E (or any successor form), as applicable, as well as the applicable U.S. Tax Compliance
Certificate substantially in the form attached as Exhibit 10.4, in both cases correctly completed and executed.

    	-24-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

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 Bond 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 Bond for more than five Business Days after the same becomes due and payable;
or

(c) the
occurrence of any “Event of Default” under the Indenture (other than defaults described in Sections 10.1(a) and 10.1(b)
of the Indenture); or

(d) any
representation or warranty made in writing by or on behalf of the Company or by any officer of the Company in this Agreement,
the Indenture, or in any writing furnished in connection with the transactions contemplated hereby, proves to have been false,
incorrect or misleading in any material respect on the date as of which made; or

(e) the
Company defaults in the performance of or compliance with any term contained herein (other than those referred to in paragraphs
(a), (b) and (c) of this Section 11) and such default is not remedied, in the case of defaults hereunder, within 30 days
after the earlier of (i) a Responsible Officer obtaining actual knowledge of such default and (ii) the Company receiving
written notice of such default from any Holder of a Bond (any such written notice to be identified as a “notice of default”
and to refer specifically to this paragraph (e) of Section 11); or

(f) (i) the
Company or any 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 (other than the Bonds and any other Securities authenticated under the Indenture)
that is outstanding in an aggregate principal amount of at least $50,000,000 beyond any period of grace provided with respect
thereto, or (ii) the Company or any Subsidiary is in default in the performance of or compliance with any term of any instrument,
mortgage, indenture or other agreement relating to any Indebtedness (other than the Bonds and any other Securities authenticated
under the Indenture) in an aggregate principal amount of at least $50,000,000 or any other condition exists, and as a consequence
of such default or condition such Indebtedness has become, or has been declared, due and payable, or (iii) 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), the Company or any Subsidiary has become obligated to purchase or repay Indebtedness
(other than the Bonds and any other Securities authenticated under the Indenture) before its regular maturity or before its regularly
scheduled dates of payment in an aggregate outstanding principal amount of at least $50,000,000; or

    	-25-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

(g) a
final judgment or judgments at any one time outstanding for the payment of money aggregating in excess of $50,000,00 (except to
the extent covered by independent third-party insurance as to which the insurer acknowledges in writing that such judgment or
judgments are covered by such insurance) are rendered against one or more of the Company or any Subsidiary and which judgments
are not, within 30 days after entry thereof, bonded, discharged or stayed pending appeal, or are not discharged within 30 days
after the expiration of such stay; or

(h) if
(i) 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, (ii) a
notice of intent to terminate any Plan shall have been or is reasonably expected to be filed with the PBGC or the PBGC shall have
instituted proceedings under Section 4042 of ERISA 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 may become a subject of any such proceedings, (iii) the aggregate
“amount of unfunded benefit liabilities” (within the meaning of Section 4001(a)(18) of ERISA) for which the Company
or any ERISA Affiliate is obligated under all Plans, determined in accordance with Title IV of ERISA, shall exceed $50,000,000,
(iv) the Company or any ERISA Affiliate shall have incurred or is reasonably expected to incur any liability (other than
for premium payments due to the PBGC) pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating
to employee benefit plans, (v) the Company or any ERISA Affiliate withdraws from any Multiemployer Plan, or (vi) the
Company or any Subsidiary establishes or amends any employee welfare benefit plan that provides post-employment welfare benefits
in a manner that could increase the liability of the Company or any Subsidiary thereunder; provided that any such event
or events described in clauses (i) through (vi) above, either individually or together with any other such event or events, would
reasonably be expected to have a Material Adverse Effect.

As
used in Section 11(h), the terms “employee benefit plan” and “employee welfare benefit plan” shall
have the respective meanings assigned to such terms in Section 3 of ERISA.

Section 12.            Remedies
on Default, Etc.

Section 12.1. Acceleration.
(a) If an Event of Default has occurred with respect to the Company in connection with an “Event of Default”
under Sections 10.1(d) or 10.1(e) of the Indenture, all of the Bonds then outstanding shall automatically become immediately
due and payable.

(b) If
any other Event of Default has occurred and is continuing, any Holder or Holders of more than 50% in aggregate principal amount
of the Bonds at the time outstanding may at any time during the continuation of such Event of Default, at its or their option,
by notice or notices to the Company, declare all of the Bonds then outstanding to be immediately due and payable.

    	-26-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

(c) If
any Event of Default described in paragraph (a) or (b) of Section 11 has occurred and is continuing with respect to any Bonds,
any Holder or Holders of Bonds at the time outstanding affected by such Event of Default may at any time during the continuation
of such Event of Default, at its or their option, by notice or notices to the Company, declare all of the Bonds held by such Holder
or Holders to be immediately due and payable.

Upon
any Bond’s becoming due and payable under this Section 12.1 or Section 10.2 of the Indenture, whether automatically
or by declaration, such Bond will forthwith mature and the entire unpaid principal amount of such Bond, plus (i) all accrued
and unpaid interest thereon (including, but not limited to, interest accrued thereon at the Default Rate) and (ii) 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 Bond has the right to maintain its investment in
the Bonds 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 Bonds 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. Exercise
of Remedies Under Indenture. The Bonds are Outstanding (as defined in the Indenture) Securities under the Indenture, secured
equally and ratably by the Lien of the Indenture without preference or priority over any other series of Outstanding Securities.
All rights and remedies against the Mortgaged Property under the Indenture shall be enforced as provided under the terms of the
Indenture.

Section 12.3. Other
Remedies. Subject to Section 12.2 hereof, if any Default or Event of Default has occurred and is continuing, and irrespective
of whether any Bonds have become or have been declared immediately due and payable under Section 12.1, the Holder of any
Bond 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 Bond, 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 12.4. Rescission.
At any time after any the Bonds have been declared due and payable pursuant to clause (b) or (c) of Section 12.1, the
Holders of more than 50% in aggregate principal amount of the Bonds then outstanding, 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 Bonds, all principal
of and Make-Whole Amount, if any, on any Bonds that are due and payable and are unpaid other than by reason of such declaration,
and all interest on such overdue principal and Make-Whole Amount, if any, and (to the extent permitted by applicable law) any
overdue interest in respect of the Bonds, at the Default Rate, (b) neither the Company nor any other Person shall have paid
any amounts which have become due solely by reason of such declaration, (c) all Events of Default and Defaults, other than
non-payment of amounts that have become due solely by reason of such declaration, have been cured or have been waived pursuant
to Section 16, and (d) no judgment or decree has been entered for the payment of any monies due pursuant hereto or to
any Bonds. 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.

    	-27-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Section 12.5. No
Waivers or Election of Remedies, Expenses, Etc. No course of dealing and no delay on the part of any Holder of any Bond in
exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice such Holder’s rights, powers
or remedies. No right, power or remedy conferred by this Agreement or by any Bond 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 14, the Company will pay to the Holder of each Bond
on demand such further amount as shall be sufficient to cover all reasonable 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.           Payments
on Bonds.

Section 13.1. Home
Office Payment. So long as any Purchaser or its nominee shall be the Holder of any Bond, and notwithstanding anything contained
in the Indenture or in such Bond to the contrary, the Company will pay all sums becoming due on such Bond for principal, Make-Whole
Amount or premium, if any, and interest by the method and at the address specified for such purpose below such Purchaser’s
name in Schedule A, or by such other method or at such other address as such Purchaser shall have from time to time specified
to the Company in writing for such purpose, without the presentation or surrender of such Bond 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 Bond, such Purchaser shall surrender such Bond for cancellation, reasonably promptly after any such request, to the Trustee
at its principal executive office or at the place of payment most recently designated by the Trustee pursuant to the Indenture.
Prior to any sale or other disposition of any Bond 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
Bond to the Company in exchange for a new Bond or Bonds pursuant to Section 3.5 of the Indenture. The Company will afford
the benefits of this Section 13.1 to any Institutional Investor that is the direct or indirect transferee of any Bond purchased
by a Purchaser under this Agreement and that has made the same agreement relating to such Bond as the Purchasers have made in
this Section 13.1.

Section 14.            Registration; Exchange; Expenses, Etc.

Section 14.1. Registration
of Bonds. The Company shall cause the Trustee to keep a register for the registration of Bonds and registration of transfers
of Bonds in accordance with Section 3.5 of the Indenture.

    	-28-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Section 14.2. Transaction
Expenses. Whether or not the transactions contemplated hereby are consummated, the Company will pay all reasonable costs and
expenses (including reasonable attorneys’ fees of one special counsel and, if reasonably required by the Required Holders,
one local or other counsel) incurred (a) by the Purchasers in connection with such transactions, and (b) by the Holders of the
Bonds in connection with any amendments, waivers or consents under or in respect of any Financing Agreement (whether or not such
amendment, waiver or consent becomes effective), including, without limitation: (i) the reasonable costs and expenses incurred
in enforcing or defending (or determining whether or how to enforce or defend) any rights under any Financing Agreement or in
responding to any subpoena or other legal process or informal investigative demand issued in connection with any Financing Agreement,
or by reason of being a Holder of Bonds, (ii) the reasonable 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 by any Financing Agreement and (iii) the reasonable costs and expenses incurred
in connection with the initial filing of any Financing Agreement and all related documents and financial information with the
SVO, provided that such costs and expenses under this clause (iii) shall not exceed $5,000 for each Tranche of the Bonds.
The Company will pay, and will save each Purchaser and each other Holder of a Bond harmless from, 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 Bonds).

Section 14.3. Survival.
The obligations of the Company under this Section 14 will survive the payment or transfer of any Bond, the enforcement, amendment
or waiver of any provision of any Financing Agreement, and the termination of any Financing Agreement.

Section 15.            Survival
of Representations and Warranties; Entire Agreement.

All
representations and warranties contained herein shall survive the execution and delivery of the Financing Agreements, the purchase
or transfer by any Purchaser of any Bond or portion thereof or interest therein and the payment of any Bond, and may be relied
upon by any subsequent Holder of a Bond, regardless of any investigation made at any time by or on behalf of such Purchaser or
any other Holder of a Bond. 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, the Financing Agreements 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 16.            Amendment
and Waiver.

Section 16.1. Requirements.
The Company will not cause or permit the Indenture to change the amount or time of any prepayment or payment of principal of,
or reduce the rate or change the time of payment or method of computation of interest or of the Make-Whole Amount, if any, on
the Bonds as set forth in the Indenture and the Bonds, without the written consent of the Holder of each Bond at the time outstanding
affected thereby. This Agreement and the Bonds may be amended, and the observance of any term hereof or of the Bonds may be waived
(either retroactively or prospectively), with (and only with) the written consent of the Company and the Required Holders, except
that (a) no amendment or waiver of any of the provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term,
will be effective as to any Holder of Bonds unless consented to by such Holder of Bonds in writing, and (b) no such amendment
or waiver may, without the written consent of all of the Holders of Bonds at the time outstanding affected thereby, (i) subject
to the provisions of Section 12 relating to acceleration or rescission, change the amount or time of any prepayment or payment
of principal of, or reduce the rate or change the time of payment or method of computation of interest (if such change results
in a decrease in the interest rate) or of the Make-Whole Amount, if any, on, the Bonds, (ii) change the percentage of the
principal amount of the Bonds the Holders of which are required to consent to any such amendment or waiver, or (iii) amend
any of Sections 8, 10.4, 11(a), 11(b), 12, 16 or 20.

    	-29-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Section 16.2. Solicitation
of Holders of Bonds.

(a) Solicitation.
The Company will provide each Holder of Bonds (irrespective of the amount of Bonds then owned by it) with sufficient information,
sufficiently far in advance of the date a decision is required, to enable such Holder to make an informed and considered decision
with respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof or of the Bonds. The Company
will deliver executed or true and correct copies of each amendment, waiver or consent effected pursuant to the provisions of this
Section 16 to each Holder of outstanding Bonds promptly following the date on which it is executed and delivered by, or receives
the consent or approval of, the requisite Holders of Bonds.

(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 (other than legal fees or other related expenses), or grant any security or provide other credit support,
to any Holder of Bonds as consideration for or as an inducement to the entering into by any Holder of Bonds or any waiver or amendment
of any of the terms and provisions hereof unless such remuneration is concurrently paid, or security is concurrently granted or
other credit support concurrently provided, on the same terms, ratably to each Holder of Bonds then outstanding even if such Holder
did not consent to such waiver or amendment.

(c) Consent
in Contemplation of Transfer. Any consent made pursuant to this Section 16.2 by the Holder of any Bond that has transferred
or has agreed to transfer such Bond to the Company, any Subsidiary or any Affiliate of the Company and has provided or has agreed
to provide such written consent as a condition to such transfer 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 Bonds that were acquired under the same or
similar conditions) shall be void and of no force or effect except solely as to such transferring Holder.

Section 16.3. Binding
Effect, Etc. Any amendment or waiver consented to as provided in this Section 16 applies equally to all Holders of Bonds
and is binding upon them and upon each future Holder of any Bond and upon the Company without regard to whether such Bond 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 the Holder of any Bond nor any delay in exercising any rights hereunder or under any Bond shall operate
as a waiver of any rights of any Holder of such Bond. As used herein, the term “this Agreement” and references
thereto shall mean this Bond Purchase Agreement as it may from time to time be amended or supplemented.

    	-30-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Section 16.4. Bonds
Held by Company, Etc. Solely for the purpose of determining whether the Holders of the requisite percentage of the aggregate
principal amount of Bonds then outstanding approved or consented to any amendment, waiver or consent to be given under this Agreement
or the Bonds, or have directed the taking of any action provided herein or in the Bonds to be taken upon the direction of the
Holders of a specified percentage of the aggregate principal amount of Bonds then outstanding, Bonds directly or indirectly owned
by the Company or any of its Affiliates shall be deemed not to be outstanding.

Section 17.            Notices.

Except
for Electronic Deliveries, 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 a recognized overnight delivery service (charges prepaid),
or (b) by registered or certified mail with return receipt requested (postage prepaid), or (c) by a recognized overnight
delivery service (with charges prepaid). Any such notice must be sent:

(i) if
to any Purchaser or its nominee, to such Purchaser or nominee at the address specified for such communications in Schedule A,
or at such other address as such Purchaser or nominee shall have specified to the Company in writing;

(ii) if
to any other Holder of any Bond, to such Holder at such address as such Holder shall have specified to the Company in writing;

(iii) if
to the Company, to the Company at its address set forth at the beginning hereof to the attention of Treasurer, or at such other
address as the Company shall have specified to the Holder of each Bond in writing; or

(iv) if
to the Trustee, to Wilmington Trust, National Association, 1100 North Market Street, Wilmington, Delaware 19890 or at such other
address as the Trustee shall have specified to the Company and each other party hereto in writing.

Notices
under this Section 17 will be deemed given only when actually received.

Section 18.            Indemnification.

The
Company hereby agrees to indemnify and hold the Purchasers harmless from, against and in respect of any and all loss, liability
and reasonable expense (including reasonable attorneys’ fees) arising from any misrepresentation or nonfulfillment of any
undertaking on the part of the Company under this Agreement. The indemnification obligations of the Company under this Section 18
shall survive the execution and delivery of this Agreement, the delivery of the Bonds to the Purchasers and the consummation of
the transactions contemplated herein.

    	-31-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Section 19.            Reproduction
of Documents.

This
Agreement and all documents relating thereto, including, without limitation, (a) consents, waivers and modifications that
may hereafter be executed, (b) documents received by any Purchaser at the Closing (except the Bonds themselves), and (c) financial
statements, certificates and other information previously or hereafter furnished to any Purchaser, may be reproduced by such Purchaser
by any photographic, photostatic, electronic, digital, or other similar process and such Purchaser 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 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 Holder of Bonds 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 any Purchaser
or Holder of a Bond by or on behalf of the Company or any Subsidiary in connection with the transactions contemplated by or otherwise
pursuant to this Agreement or the Bonds that is proprietary in nature and that was clearly marked or labeled or otherwise adequately
identified when received by such Purchaser or Holder as being confidential information of the Company or such Subsidiary, provided
that such term does not include information that (a) was publicly known or otherwise known to such Purchaser or Holder prior
to the time of such disclosure without an obligation of confidentiality, (b) subsequently becomes publicly known through
no act or omission by such Purchaser or Holder or any person acting on such Purchaser’s or Holder’s behalf, (c) otherwise
becomes known to such Purchaser or Holder other than through disclosure by the Company or any Subsidiary or (d) constitutes
financial statements delivered to such Purchaser or Holder under Section 7.1 of this Agreement that are otherwise publicly
available. Each Purchaser and Holder will maintain the confidentiality of such Confidential Information in accordance with procedures
adopted by such Purchaser or Holder in good faith to protect confidential information of third parties delivered to such Purchaser
or Holder and shall use such information only for purposes of monitoring its investment in the Bonds, provided that such Purchaser
or Holder may deliver or disclose Confidential Information to (i) its directors, trustees, officers, employees, agents, attorneys
and affiliates (to the extent such disclosure reasonably relates to the administration of the investment represented by the Bonds
and who agree to hold confidential the Confidential Information substantially in accordance with the terms of this Section 20),
(ii) its financial advisors and other professional advisors who agree to hold confidential the Confidential Information substantially
in accordance with the terms of this Section 20, (iii) any other Holder of any Bond, (iv) any Institutional Investor
to which it sells or offers to sell such Bond or any part thereof or any participation therein (if such Person has agreed in writing
prior to its receipt of such Confidential Information to be bound by the provisions of this Section 20), (v) 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 the provisions of this Section 20), (vi) any federal or state or provincial
regulatory authority having jurisdiction over such Purchaser or Holder, (vii) the NAIC or the SVO or, in each case, any similar
organization, or any nationally recognized rating agency that requires access to information about such Purchaser’s or Holder’s
investment portfolio, or (viii) any other Person to which such delivery or disclosure may be necessary or appropriate (w) to
effect compliance with any law, rule, regulation or order applicable to such Purchaser or Holder, (x) in response to any
subpoena or other legal process, (y) in connection with any litigation to which such Purchaser or Holder is a party or (z) if
an Event of Default has occurred and is continuing, to the extent such Purchaser or Holder 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
or Holder’s Bonds and this Agreement. Each Holder of a Bond, by its acceptance of a Bond, 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 Bond of information required to be delivered to such
Holder under this Agreement or requested by such Holder (other than a Holder that is a party to this Agreement or its nominee),
such Holder will enter into an agreement with the Company embodying the provisions of this Section 20.

    	-32-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Section 21.            Miscellaneous.

Section 21.1. 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
Bond) whether so expressed or not; provided, however, the provisions of Section 7 hereof and any other provision of this
Agreement that relates only to Institutional Investors shall only apply to Institutional Investors.

Section 21.2. 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 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 the covenants set out in any Financing Agreement, any election by the Company
to measure an item of Indebtedness using fair value (as permitted by Accounting Standard Codification Topic No. 825-10-25
– Recognition, subsection Fair Value Option or any similar accounting standard) shall be disregarded and such
determination shall be made by valuing indebtedness at 100% of the outstanding principal thereof, unless otherwise provided in
such Financing Agreement.

Section 21.3. 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.

    	-33-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Section 21.4. 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.

For
the avoidance of doubt, all Schedules and Exhibits attached to this Agreement shall be deemed to be a part hereof.

Section 21.5. 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 21.6. 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 21.7. 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 Bonds. 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.

(b) The
Company consents to process being served by or on behalf of any Holder of Bonds in any suit, action or proceeding of the nature
referred to in Section 21.7(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 17 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
(i) shall be deemed in every respect effective service of process upon it in any such suit, action or proceeding and (ii) 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 to be received as evidenced by a delivery receipt furnished by the United
States Postal Service or any reputable commercial delivery service.

    	-34-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

(c) Nothing
in this Section 21.7 shall affect the right of any Holder of a Bond to serve process in any manner permitted by law, or limit
any right that the Holders of any of the Bonds 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 Bonds or any other document
executed in connection herewith or therewith.

Section 21.8. Payments
Due on Non-Business Days. Anything in this Agreement or the Bonds to the contrary notwithstanding (but without limiting the
requirement in Section 8.4 that the notice of any optional prepayment specify a Business Day as the date fixed for such prepayment),
any payment of principal of or Make-Whole Amount or interest on any Bond that is due on a date other than a Business Day shall
be made on the next succeeding Business Day without including the additional days elapsed in the computation of the interest payable
on such next succeeding Business Day; provided that if the maturity date of any Bond is a date other than a Business Day, the
payment otherwise due on such maturity date shall be made on the next succeeding Business Day and shall include the additional
days elapsed in the computation of interest payable on such next succeeding Business Day.

* * * * *

    	-35-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

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,
	 	 	 
	 	Elizabethtown
    Gas Company
	 	 	 
	 	By:	/s/ Brian
    MacLean
	 	Name: 	Brian MacLean
	 	Its:	President

 

[Corporate
Seal]

	 	 	 
	Attest
	 	 	 
	By:	/s/
    Ann T. Anthony	 
	Name: 	Ann
    T. Anthony	 
	Its:	Secretary	 

    	-36-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Accepted
as of the date first written above.

	 	 	 
	 	The
    Lincoln National Life Insurance Company
	 	 	 
	 	By:	Macquarie
    Investment Management Advisers, 
	 	 	a
    series of Macquarie Investment Management 

    Business Trust, Attorney in Fact
	 	 	Fact
	 	 	 
	 	By:	/s/
    Alex Alston
	 	Name: 	Alex
    Alston
	 	Title:	Senior
    Vice President
	 	 	 
	 	Lincoln
    National Reinsurance Company (Barbados)
    Limited
	 	 	 
	 	By:	Macquarie
    Investment Management Advisers, 
	 	 	a
    series of Macquarie Investment Management 

    Business Trust,  Attorney in Fact
	 	 	 
	 	By:	/s/
    Alex Alston
	 	Name: 	Alex
    Alston
	 	Title:	Senior
    Vice President

 

 

    	-37-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Accepted
as of the date first written above.

	 	 	 
	 	The
    Northwestern Mutual Life Insurance Company
	 	 	 
	 	By:	Northwestern
    Mutual Investment Management
	 	 	Company,
    LLC, its investment advisor
	 	 	 
	 	By:	/s/
    Bradley T. Kunath
	 	Name: 	Bradley
    T. Kunath
	 	Title:	Managing
    Director
	 	 	 
	 	The
    Northwestern Mutual Life Insurance 

    Company for its Group Annuity Separate
    Account
	 	 	 
	 	By:	/s/
    Bradley T. Kunath
	 	Name:	Bradley
    T. Kunath
	 	Title:	Authorized
    Representative

    	-38-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Accepted as
of the date first written above.

	 	 	 
	 	Pacific
    Life Insurance Company
	 	 	 
	 	By:	/s/
    Matthew A. Levene
	 	Name:	Matthew
    A. Levene
	 	Title:	Assistant
    Vice President
	 	 	 
	 	By:	/s/
    Violet Osterberg
	 	Name: 	Violet
    Osterberg
	 	Title:	Assistant
    Secretary

    	-39-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Accepted
as of the date first written above

	 	 	 
	 	Teachers
    Insurance and Annuity Association of America
	 	 	 
	 	By:	Nuveen Alternatives
    Advisors LLC,
	 	 	its investment
    manager
	 	 	 
	 	By:	/s/
    Jeffrey Hughes
	 	Name: 	Jeffrey
    Hughes
	 	Title:	Director

    	-40-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Accepted
as of the date first written above

	 	 	 
	 	Minnesota
    Life Insurance Company
	 	Catholic
    Financial Life
	 	Catholic
    United Financial
	 	 	 
	 	By:	Securian
    Asset Management, Inc.
	 	 	 
	 	By:	/s/
    David Kuplic
	 	Name: 	David
    Kuplic
	 	Title:	President

    	-41-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Accepted
as of the date first written above

	 	 	 
	 	Manulife
    Life Insurance Company
	 	 	 
	 	By:	/s/
    Akira Okada
	 	Name: 	Akira
    Okada
	 	Title:	Head
    of Investments
	 	 	 
	 	Manufacturers
    Life Reinsurance Limited
	 	 	 
	 	By:	/s/
    Tatsuya Oshiro
	 	Name:	Tatsuya
    Oshiro
	 	Title:	Co-Head
    of Investments,
	 	 	Manulife
    General Account Investments 
	 	 	(Singapore)
    Pte. Ltd.
	 	 	as
    investment manager of
	 	 	Manufacturers
    Life Reinsurance Limited

    	-42-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Accepted
as of the date first written above

	 	 	 
	 	American
    United Life Insurance Company
	 	 	 
	 	By:	/s/
    David Weisenburger
	 	Name: 	David
    Weisenburger
	 	Title:	VP,
    Fixed Income Securities
	 	 	 
	 	The
    State Life Insurance Company
	 	 	 
	 	By:	American
    United Life Insurance Company
	 	Its:	Agent
	 	 	 
	 	By:	/s/
    David Weisenburger
	 	Name:	David
    Weisenburger
	 	Title:	VP,
    Fixed Income Securities
	 	 	 
	 	Pioneer
    Mutual Life Insurance Company
	 	 	 
	 	By:	American
    United Life Insurance Company
	 	Its:	Agent
	 	 	 
	 	By:	/s/
    David Weisenburger
	 	Name:	David
    Weisenburger
	 	Title:	VP,
    Fixed Income Securities
	 	 	 
	 	United
    Farm Family Life Insurance Company
	 	 	 
	 	By:	American
    United Life Insurance Company
	 	Its:	Agent
	 	 	 
	 	By:	/s/
    David Weisenburger
	 	Name:	David
    Weisenburger
	 	Title:	VP,
    Fixed Income Securities

    	-43-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Accepted
as of the date first written above

	 	 	 
	 	State
    Farm Life Insurance Company
	 	 	 
	 	By:	/s/
    Julie Hoyer
	 	Name: 	Julie
    Hoyer
	 	Title:	Investment
    Executive
	 	 	 
	 	By:	/s/
    Rebekah L. Holt
	 	Name:	Rebekah
    L. Holt
	 	Title:	Investment
    Professional
	 	 	 
	 	State
    Farm Life and Accident Assurance Company
	 	 	 
	 	By:	/s/
    Julie Hoyer
	 	Name:	Julie
    Hoyer
	 	Title:	Investment
    Executive
	 	 	 
	 	By:	/s/
    Rebekah L. Holt
	 	Name:	Rebekah
    L. Holt
	 	Title:	Investment
    Professional
	 	 	 
	 	State
    Farm Insurance Companies Employee Retirement Trust
	 	 	 
	 	By:	/s/
    Julie Hoyer
	 	Name:	Julie
    Hoyer
	 	Title:	Investment
    Executive
	 	 	 
	 	By:	/s/
    Rebekah L. Holt
	 	Name:	Rebekah
    L. Holt
	 	Title:	Investment
    Professional

    	-44-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Accepted
as of the date first written above

	 	 	 
	 	Allianz
    Life Insurance Company of North America
	 	 	 
	 	By:	Allianz
    Global Investors U.S. LLC
	 	 	As
    the authorized signatory and investment manager
	 	 	 
	 	By:	/s/
    Lawrence Halliday
	 	Name: 	Lawrence
    Halliday
	 	Title:	Managing
    Director

    	-45-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Accepted
as of the date first written above

	 	 	 
	 	The
    Guardian Life Insurance Company of America
	 	 	 
	 	By:	/s/
    Brian Keating
	 	Name: 	Brian
    Keating
	 	Title:	Managing
    Director
	 	 	 
	 	Berkshire
    Life Insurance Company of America
	 	 	 
	 	By:	/s/
    Brian Keating
	 	Name:	Brian
    Keating
	 	Title:	Managing
    Director
	 	 	 
	 	The
    Guardian Insurance & Annuity Company, Inc.
	 	 	 
	 	By:	/s/
    Brian Keating
	 	Name:	Brian
    Keating
	 	Title:	Managing
    Director

    	-46-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Accepted
as of the date first written above

	 	 	 
	 	MONY
    Life Insurance Company
	 	 	 
	 	By:	/s/
    Philip E. Passafiume
	 	Name: 	Philip
    E. Passafiume
	 	Title:	Director,
    Fixed Income
	 	 	 
	 	Protective
    Life Insurance Company
	 	 	 
	 	By:	/s/
    Philip E. Passafiume
	 	Name:	Philip
    E. Passafiume
	 	Title:	Director,
    Fixed Income

    	-47-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Accepted
as of the date first written above

	 	 	 
	 	Genworth
    Life Insurance Company
	 	 	 
	 	By:	/s/
    Stuart Stepetin
	 	Name: 	Stuart
    Stepetin
	 	Title:	Investment
    Officer
	 	 	 
	 	Genworth
    Life Insurance Company of New York
	 	 	 
	 	By:	/s/
    Stuart Stepetin
	 	Name:	Stuart
    Stepetin
	 	Title:	Investment
    Officer

    	-48-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Accepted
as of the date first written above

	 	 	 
	 	Nationwide
    Life Insurance Company
	 	 	 
	 	By:	/s/
    Jason M. Comisar
	 	Name: 	Jason
    M. Comisar
	 	Title:	Authorized
    Signatory

    	-49-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Accepted
as of the date first written above

	 	 	 
	 	Ameritas
    Life Insurance Corp.
	 	Ameritas
    Life Insurance Corp. of New York
	 	 	 
	 	By:	Ameritas
    Investment Partners Inc., as Agent
	 	 	 
	 	By:	/s/
    Tina Udell
	 	Name: 	Tina
    Udell
	 	Title:	Vice
    President & Managing Director

    	-50-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Accepted
as of the date first written above

	 	 	 
	 	AXA
    Equitable Life Insurance Company
	 	 	 
	 	By:	/s/
    Amy Judd
	 	Name: 	Amy
    Judd
	 	Title:	Investment
    Officer

    	-51-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Accepted
as of the date first written above

	 	 	 
	 	Life
    Insurance Company of the Southwest
	 	 	 
	 	By:	/s/
    Ken Weliczka
	 	Name: 	Ken
    Weliczka
	 	Title:	Head
    of Private Placements
	 	 	Sentinel
    Asset Management, Inc.

    	-52-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Accepted
as of the date first written above

	 	 	 
	 	United
    of Omaha Life Insurance Company
	 	 	 
	 	By:	/s/ Justin
    P. Kavan
	 	Name: 	Justin P.
    Kavan
	 	Title:	Senior Vice
    President
	 	 	 
	 	Mutual
    of Omaha Insurance Company
	 	 	 
	 	By:	/s/ Justin
    P. Kavan
	 	Name:	Justin P.
    Kavan
	 	Title:	Senior Vice
    President

    	-53-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Accepted
as of the date first written above

	 	 	 
	 	Thrivent
    Financial for Lutherans
	 	 	 
	 	By:	/s/ Christopher
    Patton
	 	Name: 	Christopher
    Patton
	 	Title:	Managing
    Director

    	-54-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Accepted
as of the date first written above

	 	 	 
	 	RGA
    Reinsurance Company
	 	 	 
	 	By:	/s/ Amy Gibson
	 	Name: 	Amy Gibson
	 	Title:	Vice President

    	-55-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Accepted
as of the date first written above

	 	 	 
	 	Athene
    Annuity and Life Company
	 	 	 
	 	By:	Athene Asset
    Management LLC, its investment adviser
	 	 	 
	 	By:	/s/ Roger
    D. Fors
	 	Name: 	Roger D.
    Fors
	 	Title:	Senior Vice
    President, Fixed Income
	 	 	 
	 	Athene
    Annuity & Life Assurance Company
	 	 	 
	 	By:	Athene Asset
    Management LLC, its investment adviser
	 	 	 
	 	By:	/s/ Roger
    D. Fors
	 	Name:	Roger D.
    Fors
	 	Title:	Senior Vice
    President, Fixed Income
	 	 	 
	 	ReliaStar
    Life Insurance Company
	 	 	 
	 	By:	Voya Investment
    Management LLC, its investment adviser
	 	By:	Athene Asset
    Management LLC, its sub-adviser
	 	 	 
	 	By:	/s/ Roger
    D. Fors
	 	Name:	Roger D.
    Fors
	 	Title:	Senior Vice
    President, Fixed Income

    	-56-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Accepted
as of the date first written above

	 	 	 
	 	American
    Equity Investment Life Insurance Company
	 	 	 
	 	By:	Jeffrey A.
    Fossell
	 	Name: 	Jeffrey A.
    Fossell
	 	Title:	Authorized
    Signatory  

    	-57-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Accepted
as of the date first written above.

	 	 	 
	 	Horace
    Mann Life Insurance Company
	 	 	 
	 	By:	Guggenheim
    Partners Investment Management,

 LLC, as Advisor
	 	 	 
	 	By:	/s/
    Kevin Robinson
	 	Name: 	Kevin
    Robinson
	 	Title:	Attorney-in-Fact
	 	 	 
	 	Wilton
    Reassurance Company 
	 	 	 
	 	By:	Guggenheim
    Partners Investment Management, 

LLC, as Advisor
	 	 	 
	 	By:	/s/
    Kevin Robinson
	 	Name:	Kevin
    Robinson
	 	Title:	Attorney-in-Fact
	 	 	 

    	-58-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Accepted
as of the date first written above

	 	 	 
	 	LifeCare
    Assurance Company
	 	ICI
    Mutual Insurance Company
	 	Guarantee
    Trust Life Insurance Company
	 	Best
    Meridian Insurance Company
	 	National
    Teachers Associates Life Insurance Co.
	 	National
    American Insurance Company
	 	Puritan
    Life Insurance Company of America
	 	 	 
	 	By:	Asset
    Allocation and Management LLC
	 	 	 
	 	By:	/s/ John
    Schaefer
	 	Name: 	John Schaefer
	 	Title:	CEO

    	-59-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Accepted
as of the date first written above.

	 	 	 
	 	The
    Standard Fire Insurance Company
	 	 	 
	 	By:	/s/
    David D. Rowland
	 	Name: 	David
    D. Rowland
	 	Title:	Executive
    Vice President

    	-60-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Accepted
as of the date first written above.

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

acting as Investment Advisor
	 	 	 
	 	By:	/s/
    Jason Micks
	 	Name: 	Jason
    Micks
	 	Title:	Director
    II, Investments

    	-61-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Accepted
as of the date first written above.

	 	 	 
	 	Modern
    Woodmen of America
	 	 	 
	 	By:	/s/
    Aaron R. Birkland
	 	Name: 	Aaron
    R. Birkland
	 	Title:	Portfolio
    Manager, Private Placements
	 	 	 
	 	By:	/s/
    Christopher M. Cramer
	 	Name:	Christopher
    M. Cramer
	 	Title:	Manager,
    Fixed Income

    	-62-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Accepted
as of the date first written above.

	 	 	 
	 	Southern
    Farm Bureau Life Insurance Company
	 	 	 
	 	By:	/s/
    David Divin
	 	Name: 	David
    Divin
	 	Title:	Senior
    Portfolio Manager

    	-63-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Accepted
as of the date first written above.

	 	 	 
	 	Standard
    Insurance Company
	 	 	 
	 	By:	/s/
    Chris Beaulieu
	 	Name: 	Chris
    Beaulieu
	 	Title:	AVP,
    Investments

    	-64-

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

Accepted
as of the date first written above.

	 	 	 
	 	MEMIC
    Indemnity Company
	 	 	 
	 	By:	Conning,
    Inc., as Investment Manager
	 	 	 
	 	By:	/s/
    Samuel Otchere
	 	Name: 	Samuel
    Otchere
	 	Title:	Director

    	-65-

    	 

    

	Elizabethtown
    Gas Company	Bond
    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:

“Affiliate”
means, at any time, and with respect to any Person, (a) any other Person that at such time directly or indirectly through
one or more intermediaries Controls, or is Controlled by, or is under common Control with, such first Person, and (b) any
other Person beneficially owning or holding, directly or indirectly, 10% or more of any class of voting or equity interests of
such first Person or any Subsidiary of such first Person or any Person of which such first Person and its Subsidiaries beneficially
own or hold, in the aggregate, directly or indirectly, 10% or more of any class of voting or equity interests. Unless the context
otherwise clearly requires, any reference to an “Affiliate” is a reference to an Affiliate of the Company.

“Agreement”
is defined in Section 16.3.

“Anti-Corruption
Laws” means any law or regulation in a U.S. or any non-U.S. jurisdiction regarding bribery or any other corrupt activity,
including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act 2010.

“Anti-Money
Laundering Laws” means any law or regulation in a U.S. or any non-U.S. jurisdiction regarding money laundering, drug
trafficking, terrorist-related activities or other money laundering predicate crimes, including the Currency and Foreign Transactions
Reporting Act of 1970 (otherwise known as the Bank Secrecy Act) and the USA PATRIOT Act.

“Blocked
Person” means (a) a Person whose name appears on the list of Specially Designated Nationals and Blocked Persons
published by OFAC, (b) a Person, entity, organization, country or regime that is blocked or a target of sanctions that have
been imposed under U.S. Economic Sanctions Laws or (c) a Person that is an agent, department or instrumentality of, or is
otherwise beneficially owned by, controlled by or acting on behalf of, directly or indirectly, any Person, entity, organization,
country or regime described in clause (a) or (b).

“Bonds”
is defined in Section 1.1.

“Business
Day” means for the purposes of any 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 Folsom, New Jersey are required or authorized to be closed.

“Called
Principal” is defined in Section 8.6.

“Capital
Lease” means, at any time, a lease with respect to which the lessee is required concurrently to recognize the acquisition
of an asset and the incurrence of a liability in accordance with GAAP.

Schedule
B

(to Bond Purchase Agreement)

    	 

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

“Change
in Control” is defined in Section 8.7(g).

“CISADA”
means the Comprehensive Iran Sanctions, Accountability and Divestment Act.

“Closing”
is defined in Section 3.

“Closing
Date” is the date of the Closing.

“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.

“Collateral
Filings” is defined in Section 4.11.

“Company”
is defined in the first paragraph of this Agreement.

“Confidential
Information” is defined in Section 20.

“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.

“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.

“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 that rate of interest that is the greater of (i) 2% per annum above the rate of interest stated in
the Bonds of such Tranche or (ii) 2% over the rate of interest publicly announced by Bank of America, N.A. in New York, New
York as its “base” or “prime” rate; provided, however, in no event with the rate of interest on a Bond,
including any Default Rate, be greater than 10% per annum.

“Discounted
Value” is defined in Section 8.6.

“Disclosure
Documents” is defined in Section 5.3.  

“Electronic
Delivery” is defined in Section 7.1(a).

“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 relating to pollution
and the protection of the environment or the release of any materials into the environment, including but not limited to those
related to Hazardous Materials.

    	B-2

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

“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.

“Financing
Agreements” means this Agreement, the Indenture (including without limitation the First Supplement) and the Bonds.

“First
Supplement” is defined in Section 1.1.

“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

(i) the
United States of America or any State or other political subdivision thereof, or

(ii) 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.

“Hazardous
Material” means any and all pollutants, toxic or hazardous wastes that might pose a hazard to health and safety, the
removal of which may be required or the generation, manufacture, refining, production, processing, treatment, storage, handling,
transportation, transfer, use, disposal, release, discharge, spillage, seepage or filtration of which is or shall be restricted,
prohibited or penalized by any applicable Environmental Law including, but not limited to, asbestos, urea formaldehyde foam insulation,
polychlorinated biphenyls, petroleum, petroleum products, lead based paint, radon gas or similar restricted, prohibited or penalized
substances.

“Holder”
is defined in the Indenture.

“Indebtedness”
with respect to any Person means, at any time, without duplication,

    	B-3

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

(a) its
liabilities for borrowed money and its redemption obligations in respect of mandatorily redeemable Preferred Stock;

(b) its
liabilities for the deferred purchase price of property acquired by such Person (excluding accounts payable arising in the ordinary
course of business but including all liabilities created or arising under any conditional sale or other title retention agreement
with respect to any such property);

(c) (i)
all liabilities appearing on its balance sheet in accordance with GAAP in respect of Capital Leases and (ii) all liabilities
which would appear on its balance sheet in accordance with GAAP in respect of synthetic leases assuming such synthetic leases
were accounted for as Capital Leases;

(d) all
liabilities for borrowed money secured by any Lien with respect to any property owned by such Person (whether or not it has assumed
or otherwise become liable for such liabilities);

(e) all
liabilities in respect of letters of credit or instruments serving a similar function issued or accepted for such Person’s
account by banks and other financial institutions (whether or not representing obligations for borrowed money);

(f) the
aggregate swap termination value of all swap contracts of such Person, and

(g) any
guaranty of such Person with respect to liabilities of a type described in any of clauses (a) through (f) hereof.

Indebtedness
of any Person shall include all obligations of such Person of the character described in clauses (a) through (g) to the extent
such Person remains legally liable in respect thereof notwithstanding that any such obligation is deemed to be extinguished under
GAAP.

“Indenture”
is defined in Section 1.1.

“INHAM
Exemption” is defined in Section 6.2(e).

“Institutional
Investor” means (a) any Purchaser of a Bond, (b) any Holder of a Bond holding (together with one or more of
its affiliates) more than 5% of the aggregate principal amount of the Bonds then outstanding, (c) any Holder of a Bond that
is a bank, trust company, savings and loan association or other financial institution, a pension plan, an investment company,
an insurance company, a broker or dealer, or another similar financial institution or entity, regardless of legal form, and (d) any
Related Fund of any Holder of any Bond referred to in clauses (a) through (c) above.

“Lien”
is defined in the Indenture.

“Make-Whole
Amount” is defined in Section 8.6.

    	B-4

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

“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, the Bonds or the Indenture or (c) the validity or enforceability of any Financing Agreement.

“Memorandum”
is defined in Section 5.3.

“Mortgaged
Property” is defined in the Indenture.

“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.

“NAIC
Annual Statement” is defined in Section 6.2(a).

“OFAC”
means the Office of Foreign Assets Control of the United States Department of the Treasury.

“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.

“Original
Indenture” is defined in Section 1.1.

“Parent”
means South Jersey Industries, Inc.

“PBGC”
means the Pension Benefit Guaranty Corporation referred to and defined in ERISA or any successor thereto.

“Permitted
Lien” is defined in the Indenture.

“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 may have any liability.

    	B-5

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

“Preferred
Stock” means any class of capital stock of a Person that is preferred over any other class of capital stock (or similar
equity interests) of such Person as to the payment of dividends or the payment of any amount upon liquidation or dissolution of
such Person.

“property”
or “properties” means, unless otherwise specifically limited, real or personal property of any kind, tangible
or intangible, choate or inchoate.

“Proposed
Prepayment Date” is defined in Section 8.7(b).

“PTE”
is defined in Section 6.2(a).

“Public
Order” means order of the Board of Public Utilities, State of New Jersey, Docket No. GF18050512, dated June 22, 2018.

“Purchaser”
is defined in the first paragraph of this Agreement.

“QPAM
Exemption” is defined in Section 6.2(d).

“Reinvestment
Yield” is defined in Section 8.6.

“Related
Fund” means, with respect to any Holder of any Bond, 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.

“Remaining
Average Life” is defined in Section 8.6.

“Remaining
Scheduled Payments” is defined in Section 8.6.

“Required
Holders” means, at any time, the Holders of more than 50% in principal amount of the Bonds at the time outstanding (exclusive
of Bonds then owned by the Company or any of its Affiliates).

“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”
is defined in the Indenture.

“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.

    	B-6

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

“Senior
Financial Officer” means the principal financial officer or the treasurer of the Company.

“Series
2018A Bonds” is defined in Section 1. 

“Series
2018A-1 Bonds” is defined in Section 1.

“Series
2018A-2 Bonds” is defined in Section 1.

“Series
2018A-3 Bonds” is defined in Section 1.

“Series
2018A-4 Bonds” is defined in Section 1.

“Series
2018A-5 Bonds” is defined in Section 1.

“Settlement
Date” is defined in Section 8.6.

“Source”
is defined in Section 6.2. 

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

“Subsidiary”
means, as to any Person, any other Person in which such first Person or one or more of its Subsidiaries or such first Person
and one or more of its Subsidiaries owns sufficient equity or voting interests to enable it or them (as a group) ordinarily, in
the absence of contingencies, to elect a majority of the directors (or Persons performing similar functions) of such second Person,
and any partnership or joint venture if more than a 50% interest in the profits or capital thereof is owned by such first Person
or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries (unless such partnership or joint
venture can and does ordinarily take major business actions without the prior approval of such Person or one or more of its Subsidiaries).
Unless the context otherwise clearly requires, any reference to a “Subsidiary” is a reference to a Subsidiary of the
Company.

“SVO”
means the Securities Valuation Office of the NAIC or any successor to such Office.

“Tranche”
means the Series 2018A-1 Bonds, the Series 2018A-2 Bonds, the Series 2018A-3 Bonds, the Series 2018A-4 Bonds, or the Series
2018A-5 Bonds, as the context requires.

“Trustee”
is defined in Section 1.1.

“UCC”
means, the Uniform Commercial Code as enacted and in effect from time to time in the state whose laws are treated as applying
to the Mortgaged Property.

    	B-7

    	 

    

	Elizabethtown
    Gas Company	Bond
    Purchase Agreement

 

“UCC
Financing Statements” shall mean any financing statements required or permitted to be filed in accordance with the UCC.

“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 Laws” means those laws, executive orders, enabling legislation or regulations administered and enforced
by the United States pursuant to which economic sanctions have been imposed on any Person, entity, organization, country or regime,
including the Trading with the Enemy Act, the International Emergency Economic Powers Act, the Iran Sanctions Act, the Sudan Accountability
and Divestment Act, each as amended from time to time, and any other OFAC Sanctions Program.

    	B-8Exactus DEF14C

 

Exhibit
4.1

  

EXACTUS, INC.

2018 EQUITY INCENTIVE PLAN

 

1. Scope of Plan;
Definitions.

 

(a)
This 2018 Equity Incentive Plan (the “Plan”) is
intended to advance the interests of Exactus, Inc. (the
“Company”) and its Related Corporations by enhancing
the ability of the Company to attract and retain qualified
employees, consultants, Officers and directors, by creating
incentives and rewards for their contributions to the success of
the Company and its Related Corporations. This Plan will provide to
(a) Officers and other employees of the Company and its Related
Corporations opportunities to purchase common stock (“Common
Stock”) of the Company pursuant to Options granted hereunder
which qualify as incentive stock options (“ISOs”) under
Section 422(b) of the Internal Revenue Code of 1986 (the
“Code”), (b) directors, Officers, employees and
consultants of the Company and Related Corporations opportunities
to purchase Common Stock in the Company pursuant to options granted
hereunder which do not qualify as ISOs (“Non-Qualified
Options”); (c) directors, Officers, employees and consultants
of the Company and Related Corporations opportunities to receive
shares of Common Stock of the Company which normally are subject to
restrictions on sale (“Restricted Stock”); (d)
directors, Officers, employees and consultants of the Company and
Related Corporations opportunities to receive grants of stock
appreciation rights (“SARs”); and (e) directors,
Officers, employees and consultants of the Company and Related
Corporations opportunities to receive grants of restricted stock
units (“RSUs”). ISOs, Non-Discretionary Options and
Non-Qualified Options are referred to hereafter as
“Options.” Options, Restricted Stock, RSUs and SARs are
sometimes referred to hereafter collectively as “Stock
Rights.” Any of the Options and/or Stock Rights may in the
Board of Directors or Compensation Committee’s discretion be
issued in tandem to one or more other Options and/or Stock Rights
to the extent permitted by law.

 

(b)
For purposes of the Plan, capitalized words and terms shall have
the following meaning:

 

“Board”
means the board of directors of the Company.

 

 “Chairman”
means the chairman of the Board.

 

“Change
of Control” means the occurrence of any of the following
events: (i) the consummation of the sale or disposition by the
Company of all or substantially all of the Company’s assets
in a transaction which requires shareholder approval under
applicable state law; or (ii) the consummation of a merger or
consolidation of the Company with any other corporation, other than
a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto
continuing to represent (eitherby remaining outstanding or by being
converted into voting securities of the surviving entity or its
parent) at least 50% of the total voting power represented by the
voting securities of the Company or such surviving entity or its
parent outstanding immediately after such merger or
consolidation.

 

“Code”
shall have the meaning given to it in Section 1(a).

 

“Common
Stock” shall have the meaning given to it in Section
1(a).

 

“Company”
shall have the meaning given to it in Section 1(a).

 

 

-1-

 

 

“Compensation
Committee” means the compensation committee of the Board, if
any, which shall consist of two or more members of the Board, each
of whom shall be both an “outside director” within the
meaning of Section 162(m) of the Code and a “non-employee
director” within the meaning of Rule 16b-3.  All
references in this Plan to the Compensation Committee shall mean
the Board when (i) there is no Compensation Committee or (ii) the
Board has retained the power to administer this Plan.

 

“Disability”
means “permanent and total disability” as defined in
Section 22(e)(3) of the Code or successor statute.

 

“Disqualifying
Disposition” means any disposition (including any sale) of
Common Stock underlying an ISO before the later of (i) two years
after the date of employee was granted the ISO or (ii) one year
after the date the employee acquired Common Stock by exercising the
ISO.

 

“Exchange
Act” shall mean the Securities Exchange Act of
1934.

 

“Fair
Market Value” shall be determined as of the last Trading Day
before the date a Stock Right is granted and shall
mean:

 

(1)       
the closing price on the principal market if the Common Stock is
listed on a national securities exchange or any market operated by
the OTC Markets Group, Inc. (or any successor) (any the
“Principal Market”).

 

(2)       
if no closing prices are available from the Principle Market, then
the average bid and asked price for the Company’s shares on
the Principal Market;

 

(3)      
if there are no prices available under clauses (1) or (2), then
Fair Market Value shall be based upon the average closing bid and
asked price as determined following a polling of all dealers making
a market in the Company’s Common Stock; or

 

(4)       if
there is no regularly established trading market for the
Company’s Common Stock or if the Company’s Common Stock
is listed, quoted or reported under clauses (1) or (2) but it
trades sporadically rather than every day, the Fair Market Value
shall be established by the Board or the Compensation Committee
taking into consideration all relevant factors including the most
recent price at which the Company’s Common Stock was
sold.

 

“ISO”
shall have the meaning given to it in Section 1(a).

 

“Non-Discretionary
Options” shall have the meaning given to it in Section
1(a).

 

“Non-Qualified
Options” shall have the meaning given to it in Section
1(a).

 

“Officers”
means a person who is an executive officer of the Company and is
required to file ownership reports under Section 16(a) of the
Exchange Act.

 

“Options”
shall have the meaning given to it in Section 1(a).

 

“Plan”
shall have the meaning given to it in Section 1(a).

 

 

-2-

 

 

“Related
Corporations” shall mean a corporation which is a subsidiary
corporation with respect to the Company within the meaning of
Section 424(f) of the Code.

 

“Restricted
Stock” shall have the meaning contained in Section
1(a).

 

“RSU”
shall have the meaning given to it in Section 1(a).

 

“SAR”
shall have the meaning given to it in Section 1(a).

 

“Securities
Act” means the Securities Act of 1933.

 

“Stock
Rights” shall have the meaning given to it in Section
1(a).

 

“Trading
Day” shall mean a day on which the New York Stock Exchange is
open for business.

 

This Plan is intended to comply in all respects
with Rule 16b-3 (“Rule 16b-3”) and its successor rules
as promulgated under Section 16(b) of the Exchange Act for
participants who are subject to Section 16 of the Exchange Act. To
the extent any provision of the Plan or action by the Plan
administrators fails to so comply, it shall be deemed null and void
to the extent permitted by law and deemed advisable by the Plan
administrators. Provided, however,
such exercise of discretion by the Plan administrators shall not
interfere with the contract rights of any grantee. In the event
that any interpretation or construction of the Plan is required, it
shall be interpreted and construed in order to ensure, to the
maximum extent permissible by law, that such grantee does not
violate the short-swing profit provisions of Section 16(b) of the
Exchange Act and that any exemption available under Rule 16b-3 or
other rule is available.

 

2. Administration of the
Plan.

 

(a)
The Plan may be administered by the entire Board or by the
Compensation Committee. Once appointed, the Compensation Committee
shall continue to serve until otherwise directed by the Board. A
majority of the members of the Compensation Committee shall
constitute a quorum, and all determinations of the Compensation
Committee shall be made by the majority of its members present at a
meeting. Any determination of the Compensation Committee under the
Plan may be made without notice or meeting of the Compensation
Committee by a writing signed by all of the Compensation Committee
members. Subject to ratification of the grant of each Stock Right
by the Board (but only if so required by applicable state law), and
subject to the terms of the Plan, the Compensation Committee shall
have the authority to (i) determine the employees of the Company
and Related Corporations (from among the class of employees
eligible under Section 3 to receive ISOs) to whom ISOs may be
granted, and to determine (from among the class ofindividuals and
entities eligible under Section 3 to receive Non-Qualified Options,
Restricted Stock, RSUs and SARs) to whom Non-Qualified Options,
Restricted Stock, RSUs and SARs may be granted; (ii) determine when
Stock Rights may be granted; (iii) determine the exercise prices of
Stock Rights other than Restricted Stock and RSUs, which shall not
be less than the Fair Market Value; (iv) determine whether each
Option granted shall be an ISO or a Non-Qualified Option; (v)
determine when Stock Rights shall become exercisable, the duration
of the exercise period and when each Stock Right shall vest; (vi)
determine whether restrictions such as repurchase options are to be
imposed on shares subject to or issued in connection with Stock
Rights, and the nature ofsuch restrictions, if any, and (vii)
interpret the Plan and promulgate and rescind rules and regulations
relating to it. The interpretation and construction by the
Compensation Committee of any provisions of the Plan or of any
Stock Right granted under it shall be final, binding and conclusive
unless otherwise determined by the Board. The Compensation
Committee may from time to time adopt such rules and regulations
for carrying out the Plan as it may deem best.

 

 

-3-

 

 

No
members of the Compensation Committee or the Board shall be liable
for any action or determination made in good faith with respect to
the Plan or any Stock Right granted under it. No member of the
Compensation Committee or the Board shall be liable for any act or
omission of any other member of the Compensation Committee or the
Board or for any act or omission on his own part, including but not
limited to the exercise of any power and discretion given to him
under the Plan, except those resulting from his own gross
negligence or willful misconduct.

 

(b)
The Compensation Committee may select one of its members as its
chairman and shall hold meetings at such time and places as it may
determine. All references in this Plan to the Compensation
Committee shall mean the Board if no Compensation Committee has
been appointed. From time to time the Board may increase the size
of the Compensation Committee and appoint additional members
thereof, remove members (with or without cause) and appoint new
members in substitution therefor, fill vacancies however caused or
remove all members of the Compensation Committee and thereafter
directly administer the Plan.

 

(c)
Stock Rights may be granted to members of the Board, whether such
grants are in their capacity as directors, Officers or consultants.
All grants of Stock Rights to members of the Board shall in all
other respects be made in accordance with the provisions of this
Plan applicable to other eligible persons. Members of the Board who
are either (i) eligible for Stock Rights pursuant to the Plan or
(ii) have been granted Stock Rights may vote on any matters
affecting the administration of the Plan or the grant of any Stock
Rights pursuant to the Plan.

 

(d) In addition to such other rights of
indemnification as he may have as a member of the Board, and with
respect to administration of the Plan and the granting of Stock
Rights under it, each member of the Board and of the Compensation
Committee shall be entitled without further act on his part to
indemnification from the Company for all expenses (including
advances of litigation expenses, the amount of judgment and the
amount of approved settlements made with a view to the curtailment
of costs of litigation) reasonably incurred by him in connection
with or arising out of any action, suit or proceeding, including
any appeal thereof, with respect to the administration of the Plan
or the granting of Stock Rights under it in which he may be
involved by reason of his being or having been a member of the
Board or the Compensation Committee, whether or not he continues to
be such member of the Board or the Compensation Committee at the
time of the incurring of such expenses; provided, however,
that such indemnity shall be subject to the limitations contained
in any Indemnification Agreement between the Company and the Board
member or Officer. The foregoing right of indemnification shall
inure to the benefit of the heirs, executors or administrators of
each such member of the Board or the Compensation Committee and
shall be in addition to all other rights to which such member of
the Board or the Compensation Committee would be entitled to as a
matter of law, contract or otherwise.

 

(e)
The Board may delegate the powers to grant Stock Rights to Officers
to the extent permitted by the laws of the Company’s state of
incorporation.

 

3. Eligible Employees and
Others.  ISOs may be
granted to any employee of the Company or any Related Corporation.
Those Officers and directors of the Company who are not employees
may not be granted ISOs under the Plan. Subject to compliance with
Rule 16b-3 and other applicable securities laws, Non-Qualified
Options, Restricted Stock, RSUs and SARs may be granted to any
director (whether or not an employee), Officers, employees or
consultants of the Company or any Related Corporation. The
Compensation Committee may take into consideration a
recipient’s individual circumstances in determining whether
to grant an ISO, a Non-Qualified Option, Restricted Stock, RSUs or
a SAR. Granting of any Stock Right to any individual or entity
shall neither entitle that individual or entity to, nor disqualify
him from participation in, any other grant of Stock
Rights.

 

 

-4-

 

 

4. Common
Stock. The Common Stock subject
to Stock Rights shall be authorized but unissued shares of Common
Stock, par value $0.0001, or shares of Common Stock reacquired by
the Company in any manner, including purchase, forfeiture or
otherwise. The aggregate number of shares of Common Stock which may
be issued pursuant to the Plan is 9,500,000, less any Stock Rights
previously granted or exercised subject to adjustment as provided
in Section 14. Any such shares may be issued under ISOs,
Non-Qualified Options, Restricted Stock, RSUs or SARs, so long as
the number of shares so issued does not exceed the limitations in
this Section. If any Stock Rights granted under the Plan shall
expire, terminate, forfeit or are cancelled for any reason or shall
cease for any reason to be exercisable in whole or in part without
the delivery of shares of Common Stock, or if the Company shall
reacquire any unvested shares, or if any Stock Rights or shares of
Common Stock are tendered to pay the exercise price of any Stock
Rights then the shares covered by such expiration, termination,
forfeiture, cancelation, reacquisition, or tender to pay the
exercise price will again become available for grants under the
Plan.

 

5. Granting of Stock
Rights.

 

(a) The date of grant of a Stock Right under the
Plan will be the date specified by the Board or Compensation
Committee at the time it grants the Stock
Right; provided, however,
that such date shall not be prior to the date on which the Board or
Compensation Committee acts to approve the grant. The Board or
Compensation Committee shall have the right, with the consent of
the optionee, to convert an ISO granted under the Plan to a
Non-Qualified Option pursuant to Section 17.

 

(b)
The Board or Compensation Committee shall grant Stock Rights to
participants that it, in its sole discretion, selects. Stock Rights
shall be granted on such terms as the Board or Compensation
Committee shall determine except that ISOs shall be granted on
terms that comply with the Code and regulations
thereunder.

 

(c)
A SAR entitles the holder to receive, as designated by the Board or
Compensation Committee, cash or shares of Common Stock, value equal
to (or otherwise based on) the excess of: (a) the Fair Market Value
of a specified number of shares of Common Stock at the time of
exercise over (b) an exercise price established by the Board or
Compensation Committee. The exercise price of each SAR granted
under this Plan shall be established by the Compensation Committee
or shall be determined by a method established by the Board or
Compensation Committee at the time the SAR is granted, provided the
exercise price shall not be less than 100% of the Fair Market Value
of a share of Common Stock on the date of the grant of the SAR, or
such higher price as is established by the Board or Compensation
Committee. A SAR shall be exercisable in accordance with such terms
and conditions and during such periods as may be established by the
Board or Compensation Committee. Shares of Common Stock delivered
pursuant to the exercise of a SAR shall be subject to such
conditions, restrictions and contingencies as the Board or
Compensation Committee may establish in the applicable SAR
agreement or document, if any. The Board or Compensation Committee,
in its discretion, may impose such conditions, restrictions and
contingencies with respect to shares of Common Stock acquired
pursuant to the exercise of each SARas the Board or Compensation
Committee determines to be desirable. A SAR under the Plan shall be
subject to such terms and conditions, not inconsistent with the
Plan, as the Board or Compensation Committee shall, in its
discretion, prescribe. The terms and conditions of any SAR to any
grantee shall be reflected in such form of agreement as is
determined by the Board or Compensation Committee. A copy of such
document, if any, shall be provided to the grantee, and the Board
or Compensation Committee may condition the granting of the SAR on
the grantee executing such agreement.

 

 

-5-

 

 

(d) An RSU gives the grantee the right to receive
a number of shares of the Company’s Common Stock on
applicable vesting or other dates. Delivery of the RSUs may be
deferred beyond vesting as determined by the Board or Compensation
Committee. RSUs shall be evidenced by an RSU agreement in the form
determined by the Board or Compensation
Committee. With respect to
an RSU, which becomes non-forfeitable due to the lapse of time, the
Compensation Committee shall prescribe in the RSU agreement the
vesting period. With respect to the granting of the RSU, which
becomes non-forfeitable due to the satisfaction of certain
pre-established performance-based objectives imposed by the Board
or Compensation Committee, the measurement date of whether such
performance-based objectives have been satisfied shall be a date no
earlier than the first anniversary of the date of the RSU. A
recipient who is granted an RSU shall possess no incidents of
ownership with respect to such underlying Common Stock, although
the RSU agreement may provide for payments in lieu of dividends to
such grantee.

 

(e)
Notwithstanding any provision of this Plan, the Board or
Compensation Committee may impose conditions and restrictions on
any grant of Stock Rights including forfeiture of vested Options,
cancellation of Common Stock acquired in connection with any Stock
Right and forfeiture of profits.

 

(f)
The Options and SARs shall not be exercisable for a period of more
than 10 years from the date of grant.  

 

6. Sale of
Shares. The shares underlying
Stock Rights granted to any Officers, director or a beneficial
owner of 10% or more of the Company’s securities registered
under Section 12 of the Exchange Act shall not be sold, assigned or
transferred by the grantee until at least six months elapse from
the date of the grant thereof.

 

7. ISO Minimum Option
Price and Other Limitations.

 

(a)
The exercise price per share relating to all Options granted under
the Plan shall not be less than the Fair Market Value per share of
Common Stock on the last trading day prior to the date of such
grant. For purposes of determining the exercise price, the date of
the grant shall be the later of (i) the date of approval by the
Board or Compensation Committee or the Board, or (ii) for ISOs, the
date the recipient becomes an employee of the Company. In the case
of an ISO to be granted to an employee owning Common Stock which
represents more than 10% of the total combined voting power of all
classes of stock of the Company or any Related Corporation, the
price per share shall not be less than 110% of the Fair Market
Value per share of Common Stock on the date of grant and such ISO
shall not be exercisable after the expiration of five years from
the date of grant.

 

(b)
In no event shall the aggregate Fair Market Value (determined at
the time an ISO is granted) of Common Stock for which ISOs granted
to any employee are exercisable for the first time by such employee
during any calendar year (under all stock option plans of the
Company and any Related Corporation) exceed $100,000.
 

 

8. Duration of Stock
Rights. Subject to earlier
termination as provided in Sections 3, 5, 9, 10 and 11, each Option
and SAR shall expire on the date specified in the original
instrument granting such Stock Right (except with respect to any
part of an ISO that is converted into a Non-Qualified Option
pursuant to Section 17), provided, however,
that such instrument must comply with Section 422 of the Code with
regard to ISOs and Rule 16b-3 with regard to all Stock Rights
granted pursuant to the Plan to Officers, directors and 10%
shareholders of the Company.

 

 

-6-

 

 

9. Exercise of Options
and SARs; Vesting of Stock Rights. Subject to the provisions of Sections 3 and 9
through 13, each Option and SAR granted under the Plan shall be
exercisable as follows:

 

(a)
The Options and SARs shall either be fully vested and exercisable
from the date of grant or shall vest and become exercisable in such
installments as the Board or Compensation Committee may
specify.

 

(b)
Once an installment becomes exercisable it shall remain exercisable
until expiration or termination of the Option and SAR, unless
otherwise specified by the Board or Compensation
Committee.

 

(c)
Each Option and SAR or installment, once it becomes exercisable,
may be exercised at any time or from time to time, in whole or in
part, for up to the total number of shares with respect to which it
is then exercisable.

 

(d) The Board or Compensation Committee shall have
the right to accelerate the vesting date of any installment of any
Stock Right; provided that
the Board or Compensation Committee shall not accelerate the
exercise date of any installment of any Option granted to any
employee as an ISO (and not previously converted into a
Non-Qualified Option pursuant to Section 17) if such acceleration
would violate the annual exercisability limitation contained in
Section 422(d) of the Code as described in Section
7(b).

 

10. Termination of
Employment. Subject to any
greater restrictions or limitations as may be imposed by the Board
or Compensation Committee or by a written agreement, if an optionee
ceases to be employed by the Company and all Related Corporations
other than by reason of death or Disability, no further
installments of his Options shall vest or become exercisable, and
his Options shall terminate as provided for in the grant or on the
day one year after the day of the termination of his employment
(except three months for ISOs), whichever is earlier, but in no
event later than on their specified expiration dates. Employment
shall be considered as continuing uninterrupted during any bona
fide leave of absence (such as those attributable to illness,
military obligations or governmental service) provided that the
period of such leave does not exceed 90 days or, if longer, any
period during which such optionee’s right to re-employment is
guaranteed by statute. A leave of absence with the written approval
of the Board shall not be considered an interruption of employment
under the Plan, provided that such written approval contractually
obligates the Company or any Related Corporation to continue the
employment of the optionee after the approved period of absence.
ISOs granted under the Plan shall not be affected by any change of
employment within or among the Company and Related Corporations so
long as the optionee continues to be an employee of the Company or
any Related Corporation.

 

11. Death;
Disability. Unless otherwise
determined by the Board or Compensation Committee or by a written
agreement:

 

(a)
If the holder of an Option or SAR ceases to be employed by the
Company and all Related Corporations by reason of his death, any
Options or SARs held by the optionee may be exercised to the extent
he could have exercised it on the date of his death, by his estate,
personal representative or beneficiary who has acquired the Options
or SARs by will or by the laws of descent and distribution, at any
time prior to the earlier of: (i) the Options’ or SARs’
specified expiration date or (ii) one year (except three months for
an ISO) from the date of death.

 

 

-7-

 

 

(b)
If the holder of an Option or SAR ceases to be employed by the
Company and all Related Corporations, or a director or Director
Advisor can no longer perform his duties, by reason of his
Disability, any Options or SARs held by the optionee may be
exercised to the extent he could have exercised it on the date of
termination due to Disability until the earlier of (i) the
Options’ or SARs’ specified expiration date or (ii) one
year from the date of the termination.

 

12. Assignment, Transfer
or Sale.

 

(a)
No ISO granted under this Plan shall be assignable or transferable
by the grantee except by will or by the laws of descent and
distribution, and during the lifetime of the grantee, each ISO
shall be exercisable only by him, his guardian or legal
representative.

 

(b)
Except for ISOs, all Stock Rights are transferable subject to
compliance with applicable securities laws and Section 6 of this
Plan.

 

13. Terms and Conditions
of Stock Rights. Stock Rights
shall be evidenced by instruments (which need not be identical) in
such forms as the Board or Compensation Committee may from time to
time approve. Such instruments shall conform to the terms and
conditions set forth in Sections 5 through 12 hereofand may contain
such other provisions as the Board or Compensation Committee deems
advisable which are not inconsistent with the Plan. In granting any
Stock Rights, the Board or Compensation Committee may specify that
Stock Rights shall be subject to the restrictions set forth herein
with respect to ISOs, or to such other termination and cancellation
provisions as the Board or Compensation Committee may determine.
The Board or Compensation Committee may from time to time confer
authority and responsibilityon one or more of its own members
and/or one or more Officers of the Company to execute and deliver
such instruments. The proper Officers of the Company are authorized
and directed to take any and all action necessary or advisable from
time to time to carry out the terms of such
instruments.

 

14. Adjustments Upon
Certain Events.

 

(a) Subject to any required action by the
shareholders of the Company, the number of shares of Common Stock
covered by each outstanding Stock Right, and the number of shares
of Common Stock which have been authorized for issuance under the
Plan but as to which no Stock Rights have yet been granted or which
have been returned to the Plan upon cancellation or expiration of a
Stock Right, as well as the price per share of Common Stock(or
cash, as applicable) covered by each such outstanding Option or
SAR, shall be proportionately adjusted for any increases or
decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend,
combination or reclassification of Common Stock, or any other
increase or decrease in the number of issued shares of Common Stock
effected without receipt of consideration by the
Company; provided, however,
that conversion of any convertible securities of the Company or the
voluntary cancellation whether by virtue of a cashless exercise of
a derivative security of the Company or otherwise shall not be
deemed to have been “effected without receipt of
consideration.”  Such adjustment shall be made by the
Board or Compensation Committee, whose determination in that
respect shall be final, binding and conclusive.  Except as
expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock
of any class, shall affect, and no adjustment by reason thereof
shall be made with respect to, the number or price of shares of
Common Stock subject to a Stock Right. No adjustments shall be made
for dividends or other distributions paid in cash or in property
other than securities of the Company.

 

 

-8-

 

 

(b)
In the event of the proposed dissolution or liquidation of the
Company, the Board or Compensation Committee shall notify each
participant as soon as practicable prior to the effective date of
such proposed transaction.  To the extent it has not been
previously exercised, a Stock Right will terminate immediately
prior to the consummation of such proposed action.

 

(c)
In the event of a merger of the Company with or into another
corporation, or a Change of Control, each outstanding Stock Right
shall be assumed (as defined below) or an equivalent option or
right substituted by the successor corporation or a parent or
subsidiary of the successor corporation.  In the event that
the successor corporation refuses to assume or substitute for the
Stock Rights, the participants shall fully vest in and have the
right to exercise their Stock Rights as to which it would not
otherwise be vested or exercisable.  If a Stock Right becomes
fully vested and exercisable in lieu of assumption or substitution
in the event of a merger or sale of assets, the Board or
Compensation Committee shall notify the participant in writing or
electronically that the Stock Right shall be fully vested and
exercisable for a period of at least 15 days from the date of such
notice, and any Options or SARs shall terminate one minute prior to
the closing of the merger or sale of assets.
  

 

For the purposes of this Section 14(c), the Stock
Right shall be considered “assumed” if, following the
merger or Change of Control, the option or right confers the right
to purchase or receive, for each share of Common Stock subject to
the Stock Right immediately prior to the merger or Change of
Control, the consideration (whether stock, cash, or other
securities or property) received in the merger or Change of Control
by holders of Common Stock for each share held on the effective
date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares); provided, however,
that if such consideration received in the merger or Change of
Control is not solely common stock of the successor corporation or
its parent, the Board or Compensation Committee may, with the
consent of the successor corporation, provide for the consideration
to be received upon the exercise of the Stock Right, for each share
of Common Stock subject to the Stock Right, to be solely common
stock of the successor corporation or its parent equal in Fair
Market Value to the per share consideration received by holders of
Common Stock in the merger or Change of
Control.

 

(d)
Notwithstanding the foregoing, any adjustments made pursuant to
Section 14(a), (b) or (c) with respect to ISOs shall be made only
after the Board or Compensation Committee, after consulting with
counsel for the Company, determines whether such adjustments would
constitute a “modification” of such ISOs (as that term
is defined in Section 424(h) of the Code) or would cause any
adverse tax consequences for the holders of such ISOs.  If the
Board or Compensation Committee determines that such adjustments
made with respect to ISOs would constitute a modification of such
ISOs it may refrain from making such adjustments.

 

(e)
No fractional shares shall be issued under the Plan and the
optionee shall receive from the Company cash in lieu of such
fractional shares.

 

 

-9-

 

 

15. Means of Exercising
Stock Rights.

 

(a)
An Option or SAR (or any part or installment thereof) shall be
exercised by giving written notice to the Company at its principal
office address. Such notice shall identify the Stock Right being
exercised and specify the number of shares as to which such Stock
Right is being exercised, accompanied by full payment of the
exercise price therefor (to the extent it is exercisable in cash)
either (i) in United States dollars by check or wire transfer; or
(ii) at the discretion of the Board or Compensation Committee,
through delivery of shares of Common Stock having a Fair Market
Value equal as of the date of the exercise to the cash exercise
price of the Stock Right; or (iii) at the discretion of the Board
or Compensation Committee, by any combination of (i) and (ii)
 above. If the Board or Compensation Committee exercises its
discretion to permit payment of the exercise price of an ISO by
means of the methods set forth in clauses (ii) or  (iii)
 of the preceding sentence, such discretion need not  be
exercised in writing at the time of the grant of the Stock Right in
question. The holder of a Stock Right shall not have the rights of
a shareholder with respect to the shares covered by his Stock Right
until the date of issuance of a stock certificate to him for such
shares. Except as expressly provided above in Section 14 with
respect to changes in capitalization and stock dividends, no
adjustment shall be made for dividends or similar rights for which
the record date is before the date such stock certificate is
issued.

 

(b)
Each notice of exercise shall, unless the shares of Common Stock
are covered by a then current registration statement under the
Securities Act, contain the holder’s acknowledgment in form
and substance satisfactory to the Company that (i) such shares are
being purchased for investment and not for distribution or resale
(other than a distribution or resale which, in the opinion of
counsel satisfactory to the Company, may be made without violating
the registration provisions of the Securities Act), (ii) the holder
has been advised and understands that (1) the shares have not been
registered under the Securities Act and are “restricted
securities” within the meaning of Rule 144 under the
Securities Act and are subject to restrictions on transfer and (2)
the Company is under no obligation to register the shares under the
Securities Act or to take any action which would make available to
the holder any exemption from such registration, and (iii) such
shares may not be transferred without compliance with all
applicable federal and state securities laws. Notwithstanding the
above, should the Company be advised by counsel that issuance of
shares should be delayed pending registration under federal or
state securities laws or the receipt of an opinion that an
appropriate exemption therefrom is available, the Company may defer
exercise of any Stock Right granted hereunder until either such
event has occurred.

 

16. Term, Termination and
Amendment.
 

 

(a)
This Plan was adopted by the Board.  This Plan may be approved
by the Company’s shareholders, which approval is required for
ISOs.

 

(b)
The Board may terminate the Plan at any time.  Unless sooner
terminated, the Plan shall terminate 10 years from the date the
Board adopts the Plan.  No Stock Rights may be granted under
the Plan once the Plan is terminated.  Termination of the Plan
shall not impair rights and obligations under any Stock Right
granted while the Plan is in effect, except with the written
consent of the grantee.

 

 

-10-

 

 

(c) The Board at any time, and from time to time,
may amend the Plan.  Provided, however,
except as provided in Section 14 relating to adjustments in Common
Stock, no amendment shall be effective unless approved by the
shareholders of the Company to the extent (i) shareholder approval
is necessary to satisfy the requirements of Section 422 of the Code
or (ii) required by the rules of the principal national securities
exchange or trading market upon which the Company’s Common
Stock trades. Rights under any Stock Rights granted before
amendment of the Plan shall not be impaired by any amendment of the
Plan, except with the written consent of the
grantee.

 

(d) The Board at any time, and from time to time,
may amend the terms of any one or more Stock
Rights; provided, however,
that the rights under the Stock Right shall not be impaired by any
such amendment, except with the written consent of the
grantee.

 

17. Conversion of ISOs
into Non-Qualified Options; Termination of ISOs. The Board or Compensation Committee, at the
written request of any optionee, may in its discretion take such
actions as may be necessary to convert such optionee’s ISOs
(or any installments or portions of installments thereof) that have
not been exercised on the date of conversion into Non-Qualified
Options at any time prior to the expiration of such ISOs,
regardless of whether the optionee is an employee of the Company or
a Related Corporation at the time of such conversion.
 Provided, however,
the Board or Compensation Committee shall not reprice the Options
or extend the exercise period or reduce the exercise price of the
appropriate installments of such Options without the approval of
the Company’s shareholders. At the time of such conversion,
the Board or Compensation Committee (with the consent of the
optionee) may impose such conditions on the exercise of the
resulting Non-Qualified Options as the Board or Compensation
Committee in its discretion may determine, provided that such
conditions shall not be inconsistent with this Plan. Nothing in the
Plan shall be deemed to give any optionee the right to have such
optionee’s ISOs converted into Non-Qualified Options, and no
such conversion shall occur until and unless the Board or
Compensation Committee takes appropriate action. The Compensation
Committee, with the consent of the optionee, may also terminate any
portion of any ISO that has not been exercised at the time of such
termination.

 

18. Application of
Funds. The proceeds received by
the Company from the sale of shares pursuant to Options or SARS (if
cash settled) granted under the Plan shall be used for general
corporate purposes.

 

19. Governmental
Regulations. The
Company’s obligation to sell and deliver shares of the Common
Stock under this Plan is subject to the approval of any
governmental authority required in connection with the
authorization, issuance or sale of such shares.

 

20. Withholding of
Additional Income Taxes. In
connection with the granting, exercise or vesting of a Stock Right
or the making of a Disqualifying Disposition the Company, in
accordance with Section 3402(a) of the Code, may require the
optionee to pay additional withholding taxes in respect of the
amount that is considered compensation includable in such
person’s gross income.

 

To
the extent that the Company is required to withhold taxes for
federal income tax purposes as provided above, if any optionee may
elect to satisfy such withholding requirement by (i) paying the
amount of the required withholding tax to the Company; (ii)
delivering to the Company shares of its Common Stock (including
shares of Restricted Stock) previously owned by the optionee; or
(iii) having the Company retain a portion of the shares covered by
an Option exercise. The number of shares to be delivered to or
withheld by the Company times the Fair Market Value of such shares
shall equal the cash required to be withheld.

 

 

-11-

 

 

21. Notice to Company of
Disqualifying Disposition. Each
employee who receives an ISO must agree to notify the Company in
writing immediately after the employee makes a Disqualifying
Disposition of any Common Stock acquired pursuant to the exercise
of an ISO. If the employee has died before such stock is sold, the
holding periods requirements of the Disqualifying Disposition do
not apply and no Disqualifying Disposition can occur
thereafter.

 

22. Continued
Employment. The grant of a
Stock Right pursuant to the Plan shall not be construed to imply or
to constitute evidence of any agreement, express or implied, on the
part of the Company or any Related Corporation to retain the
grantee in the employ of the Company or a Related Corporation, as a
member of the Company’s Board or in any other capacity,
whichever the case may be.

 

23. Governing Law;
Construction. The validity and
construction of the Plan and the instruments evidencing Stock
Rights shall be governed by the laws of the Company’s state
of incorporation. In construing this Plan, the singular shall
include the plural and the masculine gender shall include the
feminine and neuter, unless the context otherwise
requires.

 

24. (a) Forfeiture of Stock
Rights Granted to Employees or Consultants. Notwithstanding any other provision of this
Plan, and unless otherwise provided for in a Stock Rights
Agreement, all vested or unvested Stock Rights granted to employees
or consultants shall be immediately forfeited at the discretion of
the Board if any of the following events occur:

 

(1)
Termination of the relationship with the grantee for cause
including, but not limited to, fraud, theft, dishonesty and
violation of Company policy;

 

(2)
Purchasing or selling securities of the Company in violation of the
Company’s insider trading guidelines then in
effect;

 

(3)
Breaching any duty of confidentiality including that required by
the Company’s insider trading guidelines then in
effect;

 

(4)
Competing with the Company;

 

(5)
Being unavailable for consultation after leaving the
Company’s employment if such availability is a condition of
any agreement between the Company and the grantee;

 

(6)
Recruitment of Company personnel after termination of employment,
whether such termination is voluntary or for cause;

 

(7)
Failure to assign any invention or technology to the Company if
such assignment is a condition of employment or any other
agreements between the Company and the grantee; or

 

(8)
A finding by the Board that the grantee has acted disloyally and/or
against the interests of the Company.

 

(b) Forfeiture of Stock
Rights Granted to Directors.
 Notwithstanding any other provision of this Plan, and unless
otherwise provided for in a Stock Rights Agreement, all vested or
unvested Stock Rights granted to directors shall be immediately
forfeited at the discretion of the Board if any of the following
events occur:

 

(1)
Purchasing or selling securities of the Company in violation of the
Company’s insider trading guidelines then in
effect;

 

 

-12-

 

 

(2)
Breaching any duty of confidentiality including that required by
the Company’s insider trading guidelines then in
effect;

 

(3)
Competing with the Company;

 

(4)
Recruitment of Company personnel after ceasing to be a
director;

or

(5)
A finding by the Board that the grantee has acted disloyally and/or
against the interests of the Company.

 

The
Company may impose other forfeiture restrictions which are more or
less restrictive and require a return of profits from the sale of
Common Stock as part of said forfeiture provisions if such
forfeiture provisions and/or return of provisions are contained in
a Stock Rights Agreement.

 

(c) Profits on the Sale of
Certain Shares; Redemption.
 If any of the events specified in Section 24(a) or (b) of the
Plan occur within one year from the date the grantee last performed
services for the Company in the capacity for which the Stock Rights
were granted (the “Termination Date”) (or such
longer period required by any written agreement), all profits
earned from the sale of the Company’s securities, including
the sale of shares of common stock underlying the Stock Rights,
during the two-year period commencing one year prior to the
Termination Date shall be forfeited and immediately paid by the
grantee to the Company.  Further, in such event, the Company
may at its option redeem shares of common stock acquired upon
exercise of the Stock Right by payment of the exercise price to the
grantee.  To the extent that another written agreement with
the Company extends the events in Section 24(a) or (b) beyond one
year following the Termination Date, the two-year period shall be
extended by an equal number of days.  The Company’s
rights under this Section 24(c) do not lapse one year form the
Termination Date but are contract rights subject to any appropriate
statutory limitation period.

 

 

 

 

-13-

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