Exhibit 10.3

(Local Currency—Single Jurisdiction)

 

ISDA®

International Swap Dealers Association, Inc.

MASTER AGREEMENT

dated as of October 27, 2008

 

  and   

BRANCH BANKING AND TRUST COMPANY

    

ROANOKE GAS COMPANY

(“Party A”)      (“Party B”)

have entered and/or anticipate entering into one or more transactions (each a
“Transaction”) that are or will be governed by this Master Agreement, which
includes the schedule (the “Schedule”), and the documents and other confirming
evidence (each a “Confirmation”) exchanged between the parties confirming those
Transactions.

Accordingly, the parties agree as follows:—

 

1. Interpretation

 

  (a) Definitions. The terms defined in Section 12 and in the Schedule will have
the meanings therein specified for the purpose of this Master Agreement.

 

  (b) Inconsistency. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant Transaction.

 

  (c) Single Agreement. All Transactions are entered into in reliance on the
fact that this Master Agreement and all Confirmations form a single agreement
between the parties (collectively referred to as this “Agreement”), and the
parties would not otherwise enter into any Transactions.

 

2. Obligations

 

  (a) General Conditions.

 

  (i) Each party will make each payment or delivery specified in each
Confirmation to be made by it, subject to the other provisions of this
Agreement.

 

  (ii)

Payments under this Agreement will be made on the due date for value on that
date in the place of the account specified in the relevant Confirmation or
otherwise pursuant to this Agreement, in freely transferable funds and in the
manner customary for payments in the required currency. Where settlement is by
delivery (that is, other than by payment), such

 

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delivery will be made for receipt on the due date in the manner customary for
the relevant obligation unless otherwise specified in the relevant Confirmation
or elsewhere in this Agreement.

 

  (iii) Each obligation of each party under Section 2(a)(i) is subject to
(1) the condition precedent that no Event of Default or Potential Event of
Default with respect to the other party has occurred and is continuing, (2) the
condition precedent that no Early Termination Date in respect of the relevant
Transaction has occurred or been effectively designated and (3) each other
applicable condition precedent specified in this Agreement.

 

  (b) Change of Account. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.

 

  (c) Netting. If on any date amounts would otherwise be payable:

 

  (i) in the same currency; and

 

  (ii) in respect of the same Transaction,

by each party to the other, then, on such date, each party’s obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by whom the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.

The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation by specifying that subparagraph (ii) above
will not apply to the Transactions identified as being subject to the election,
together with the starting date (in which case subparagraph (ii) above will not,
or will cease to, apply to such Transactions from such date). This election may
be made separately for different groups of Transactions and will apply
separately to each pairing of branches or offices through which the parties make
and receive payments or deliveries.

 

  (d) Default interest; Other Amounts. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section (6c), be required to pay interest
(before as well as after judgment) on the overdue amount to the other party on
demand in the same currency as such overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence or effective designation of an Early Termination Date in respect
of the relevant Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will compensate the other
party on demand if and to the extent provided for in the relevant Confirmation
or elsewhere in this Agreement.

 

3. Representations

Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered
into) that:—

 

  (a) Basic Representations

 

  (i) Status. It is duly organized and validly existing under the laws of the
jurisdiction of its organization or incorporation and, if relevant under such
laws, in good standing;

 

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  (ii) Powers. It has the power to execute this Agreement and any other
documentation relating to this Agreement to which it is a party, to deliver this
Agreement and any other documentation relating to this Agreement that it is
required by this Agreement to deliver and to perform its obligations under this
Agreement and any obligations it has under any Credit Support Document to which
it is a party and has taken all necessary action to authorize such execution,
delivery, and performance;

 

  (iii) No Violation or Conflict. Such execution, delivery, and performance do
not violate or conflict with any law applicable to it, any provision or its
constitutional documents, any order or judgment or any court or other agency of
government applicable to it or any of its assets or any contractual restriction
binding on or affecting it or any of its assets;

 

  (iv) Consents. All governmental and other consents that are required to have
been obtained by it with respect to this Agreement or any Credit Support
Document to which it is a party have been obtained and are in full force and
effect and all conditions of any such consents have been complied with; and

 

  (v) Obligations Binding. Its obligations under this Agreement and any Credit
Support Document to which it is a party constitute its legal, valid and binding
obligations, enforceable in accordance with their respective terms (subject to
applicable bankruptcy, reorganization, insolvency, moratorium or similar laws
affecting creditors’ rights generally and subject, as to enforceability, to
equitable principles of general application (regardless of whether enforcement
is sought in a proceeding in equity or at law)).

 

  (b) Absence of Certain Events. No Event of Default or Potential Event of
Default or, to its knowledge, Termination Event with respect to it has occurred
and is continuing and no such event or circumstance would occur as a result of
its entering into or performing its obligations under this Agreement or any
Credit Support Document to which it is a party.

 

  (c) Absence of Litigation. There is not pending or, to its knowledge,
threatened against it or any its Affiliates any action, suit or proceeding at
law or in equity or before any court, tribunal, governmental body, agency or
official or any arbitrator that is likely to affect the legality, validity or
enforceability against it of this Agreement or any Credit Support Document to
which it is a party or its ability to perform its obligations under this
Agreement or such Credit Support Document.

 

  (d) Accuracy of Specified Information. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.

 

4. Agreements

Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party:—

 

  (a) Furnish Specified Information. It will deliver to the other party any
forms, documents, or certificates specified in the Schedule or any Confirmation
by the date specified in the Schedule or such Confirmation or, if none is
specified, as soon as reasonably practicable.

 

  (b) Maintain Authorizations. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future.

 

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  (c) Comply with Laws. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.

 

5. Events of Default and Termination Events.

 

  (a) Events of Default. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any of the following events constitutes an event of default (an
“Event of Default”) with respect to such party:—

 

  (i) Failure to Pay or Deliver. Failure by the party to make, when due, any
payment under this Agreement or delivery under Section 2(a)(i) or 2(d) required
to be made by it if such failure is not remedied on or before the third Local
Business Day after notice of such failure is given to the party;

 

  (ii) Breach of Agreement. Failure by the party to comply with or perform any
agreement or obligation (other than an obligation to make any payment under this
Agreement or delivery under Section 2(a)(i) or 2(d) or to give notice of
Termination Event) to be complied with or performed by the party in accordance
with this Agreement if such failure is not remedied on or before the thirtieth
day after notice of such failure is given to the party;

 

  (iii) Credit Support Default.

 

  (1) Failure by the party or any Credit Support Provider of such party to
comply with or perform any agreement or obligation to be complied with or
performed by it in accordance with any Credit Support Document if such failure
is continuing after any applicable grace period has elapsed;

 

  (2) the expiration or termination of such Credit Support Document or the
failing or ceasing of such Credit Support Document to be in full force and
effect for the purpose of this Agreement (in either case other than in
accordance with its terms) prior to the satisfaction of all obligations of such
party under each Transaction to which such Credit Support Document relates
without the written consent of the other party; or

 

  (3) the party or such Credit Support Provider disaffirms, disclaims,
repudiates or rejects, in whole or in part, or challenges the validity of, such
Credit Support Document;

 

  (iv) Misrepresentation. A representation made or repeated or deemed to have
been made or repeated by the party or any Credit Support Provider of such party
in this Agreement or any Credit Support Document proves to have been incorrect
or misleading in any material respect when made or repeated or deemed to have
been made or repeated;

 

  (v) Default under Specified Transaction. The party, any Credit Support
Provider of such party or any applicable Specified Entity of such party
(1) defaults under a Specified Transaction and, after giving effect to any
applicable notice requirement or grace period, there occurs a liquidation of, an
acceleration of obligations under, or an early termination of, that Specified
Transaction, (2) defaults, after giving effect to any applicable notice
requirement or grace period, in making any payment or delivery due on the last
payment, delivery or exchange date of, or any payment on early termination of, a
Specified Transaction (or such default continues for at least three Local
Business Days if there is no applicable notice requirement or grace period) or
(3) disaffirms, disclaims, repudiates or rejects, in whole or in part, a
Specified Transaction (or such action is taken by any person or entity appointed
or empowered to operate it or act on its behalf);

 

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  (vi) Cross Default. If “Cross Default” is specified in the Schedule as
applying to the party, the occurrence or existence of (1) a default, event of
default or other similar condition or event (however described) in respect of
such party, any Credit Support Provider of such party or any applicable
Specified Entity of such party under one or more agreements or instruments
relating to Specified Indebtedness of any of them (individually or collectively)
in an aggregate amount of not less than the applicable Threshold Amount (as
specified in the Schedule) which has resulted in such Specified Indebtedness
becoming, or becoming capable at such time of being declared, due and payable
under such agreements or instruments, before it would otherwise have been due
and payable or (2) a default by such party, such Credit Support Provider or such
Specified Entity (individually or collectively) in making one or more payments
on the due date thereof in an aggregate amount of not less than the applicable
Threshold Amount under such agreements or instruments (after giving effect to
any applicable notice requirement or grace period);

 

  (vii) Bankruptcy. The party, any Credit Support Provider of such party or any
applicable Specified Entity of such party:

(1) is dissolved (other than pursuant to a consolidation, amalgamation or
merger); (2) becomes insolvent or is unable to pay its debts or fails or admits
in writing its inability generally to pay its debts as they become due;
(3) makes a general assignment, arrangement or composition with or for the
benefit of its creditors; (4) institutes or has instituted against it a
proceeding seeking a judgment of insolvency or bankruptcy or any other relief
under any bankruptcy of insolvency law or other similar law affecting creditors
rights, or a petition is presented for its winding-up or liquidation, and, in
the case of any such proceedings or petition instituted or presented against it,
such proceeding or petition (A) results in a judgment of insolvency or
bankruptcy or the entry of an order for relief or the making of an order for its
winding-up or liquidation or (B) is not dismissed, discharged, stayed or
restrained in each case within 30 days of the institution or presentation
thereof; (5) has a resolution passed for its winding-up, official management or
liquidation (other than pursuant to a consolidation, amalgamation, or merger);
(6) seeks or becomes subject to the appointment of an administrator, provisional
liquidator, conservator, receiver, trustee, custodian or other similar official
for it or for all or substantially all its assets; (7) has a secured party take
possession of all or substantially all its assets or has a distress, execution,
attachment, sequestration or other legal process of levied, enforced or sued on
or against all or substantially all its assets and such secured party maintains
possession, or any such process is not dismissed, discharged, stayed or
restrained in each case within 30 days thereafter; (8) causes or is subject to
any event with respect to it which, under the applicable laws of any
jurisdiction, has an analogous effect to any of the events specified (1) to
(7) (inclusive); or (9) takes any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the foregoing acts; or

 

  (viii) Merger Without Assumption. The party or any Credit Support Provider of
such party consolidates or amalgamates with, or merges with or into, or
transfers all or substantially all its assets to, another entity and, at the
time of such consolidation, amalgamation, merger, or transfer:

 

  (1) the resulting, surviving or transferee entity fails to assume all the
obligations of such party or such Credit Support Provider under this Agreement
or any Credit Support Document to which it or its predecessor was a party by
operation of law or pursuant to an agreement reasonably satisfactory to the
other party to this Agreement; or

 

  (2) the benefits of any Credit Support Document fail to extend (without the
consent of the other party) to the performance by such resulting, surviving or
transferee entity of its obligations under this Agreement.

 

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  (b) Termination Events. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any event specified below constitutes an Illegality if the
event is specified in (i) below, and, if specified to be applicable, a Credit
Event Upon Merger if the event is specified pursuant to (ii) below or an
Additional Termination Event if the event is specified pursuant to (iii) below:

 

  (i) Illegality. Due to the adoption of, or any change in, any applicable law
after the date on which a Transaction is entered into, or due to the
promulgation of, or any change in, the interpretation by any court, tribunal or
regulatory authority with competent jurisdiction of any applicable law after
such date, it becomes unlawful (other than as a result of a breach by the party
of Section 4(b)) for such party (which will be the Affected Party):

 

  (1) to perform any absolute or contingent obligation to make a payment or
delivery or to receive a payment or delivery in respect of such Transaction or
to comply with any other material provision of this Agreement relating to such
Transaction; or

 

  (2) to perform, or for any Credit Support Provider of such party to perform,
any contingent or other obligation which the party (or such Credit Support
Provider) has under any Credit Support Document relating to such Transaction;

 

  (ii) Credit Event Upon Merger. If “Credit Event Upon Merger” is specified in
the Schedule as applying to the party, such party (“X”), any Credit Support
Provider of X or any applicable Specified Entity of X consolidates or
amalgamates with, or merges with or into, or transfers all or substantially all
its assets to, another entity and such action does not constitute an event
described in Section 5(a)(viii) but the creditworthiness of the resulting,
surviving or transferee entity is materially weaker than that of X, such Credit
Support Provider or such Specified Entity, as the case may be, immediately prior
to such action (and, in such event, X or its successor or transferee, as
appropriate, will be the Affected Party); or

 

  (iii) Additional Termination Event. If any “Additional Termination Event” is
specified in the Schedule or any Confirmation as applying, the occurrence of
such event (and, in such event, the Affected Party or Affected Parties shall be
as specified for such Additional Termination Event in the Schedule or such
Confirmation).

 

  (c) Event of Default and Illegality. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an Event
of Default.

 

6. Early Termination

 

  (a) Right to Terminate Following Event of Default. If at any time an Event of
Default with respect to a party (the “Defaulting Party”) has occurred and is
then continuing, the other party (the “Non-defaulting Party”) may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all outstanding Transactions. If, however,
“Automatic Early Termination” is specified in the Schedule as applying to a
party, then an Early Termination Date in respect of all outstanding Transactions
will occur immediately upon the occurrence with respect to such party of an
Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6) or, to the
extent analogous thereto, (8), and as of the time immediately preceding the
institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such part of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).

 

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  (b) Right to Terminate Following Termination Event.

 

  (i) Notice. If a Termination Event occurs, an Affected Party will, promptly
upon becoming aware of it, notify the other party, specifying the nature of that
Termination Event and each Affected Transaction and will also give such other
information about the Termination Event as the other party may reasonably
require.

 

  (ii) Two Affected Parties. If an Illegality under Section 5(b)(i)(1) occurs
and there are two Affected Parties, each party will use all reasonable efforts
to reach agreement within 30 days after notice thereof is given under
Section 6(b)(i) on action to avoid that Termination Event.

 

  (iii) Right to Terminate. If:

 

  (1) an agreement under Section 6(b)(ii) has not be effected with respect to
all Affected Transactions within 30 days after an Affected Party gives notice
under Section 6(b)(i); or

 

  (2) an Illegality other than that referred to in 6(b)(ii), a Credit Event Upon
Merger or an Additional Termination Event occurs,

either party in the case of Illegality, an Affected Party in the case of an
Additional Termination Event if there is more than one Affected Party, or the
party which is not the Affected Party in the case of a Credit Event Upon Merger
or an Additional Termination Event if there is only one Affected Party may, by
not more than 20 days notice to the other party and provided that the relevant
Termination Event is then continuing, designate a day not earlier than the day
such notice is effective as an Early Termination Date in respect of all Affected
Transactions.

 

  (c) Effect of Designation.

 

  (i) If notice designating an Early Termination Date is given under
Section 6(a) or (b), the Early Termination Date will occur on the date so
designated, whether or not the relevant Event of Default or Termination Event is
then continuing.

 

  (ii) Upon the occurrence or effective designation of an Early Termination
Date, no further payments or deliveries under Section 2(a)(i) or 2(d) in respect
of the Terminated Transactions will be required to be made, but without
prejudice to the other provisions of this Agreement. The amount, if any, payable
in respect of an Early Termination Date shall be determined pursuant to
Section 6(e).

 

  (d) Calculations.

 

  (i) Statement. On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, each party will make the calculations
on its part, if any, contemplated by Section 6(e) and will provide to the other
party a statement (1) showing, in reasonable detail, such calculations
(including all relevant quotations and specifying any amount payable under
Section 6(e)) and (2) giving details of the relevant account to which any amount
payable to it is to be paid. In the absence of written confirmation from the
source of a quotation obtained in determining a Market Quotation, the records of
the party obtaining such quotation will be conclusive evidence of the existence
and accuracy of such quotation.

 

  (ii) Payment Date. An amount calculated as being due in respect of any Early
Termination Date under Section 6(e) will be payable on the day that notice of
the amount payable is effective (in the case of an Early Termination Date, which
is designated or occurs as a result of an Event of Default) and on the day which
is two Local Business Days after the day on which notice of the amount payable
is effective (in the case of an Early Termination Date which is designated as a
result of a Termination Event). Such amount will be paid together with (to the
extent permitted under applicable law) interest thereon (before as well as after
judgement), from (and including) the relevant Early Termination Date to (but
excluding) the date such amount is paid, at the Applicable Rate. Such interest
will be calculated on the basis of daily compounding and the actual number of
days elapsed.

 

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  (e) Payments on Early Termination. If an Early Termination Date occurs, the
following provisions shall apply based on the parties’ election in the Schedule
of a payment measure, either “Market Quotation” or “Loss,” and a payment method,
either the “First Method” or the “Second Method.” If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that “Market Quotation” or the “Second Method,” as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.

 

  (i) Events of Default. If the Early Termination Date results from an Event of
Default:—

 

  (1) First Method and Market Quotation. If the First Method and Market
Quotation apply, the Defaulting Party will pay to the Non-defaulting Party the
excess, if a positive number, of (A) the sum of the Settlement Amount
(determined by the Non-defaulting Party) in respect of the Terminated
Transactions and the Unpaid Amounts owing to the Non-defaulting Party over
(B) the Unpaid Amounts owing to the Defaulting Party.

 

  (2) First Method and Loss. If the First Method and Loss apply, the Defaulting
Party will pay to the Non-defaulting Party, if a positive number, the
Non-defaulting Party’s Loss in respect of this Agreement.

 

  (3) Second Method and Market Quotations. If the Second Method and Market
Quotation apply, an amount will be payable equal to (A) the sum of the
Settlement Amount (determined by the Non-defaulting Party) in respect of the
Terminated Transactions and Unpaid Amounts owing to the Non-defaulting Party
less (B) the Unpaid Amounts owing to the Defaulting Party. If that amount is a
positive number, the Defaulting Party will pay it to the Non-defaulting Party;
if it is a negative number, the Non-defaulting Party will pay the absolute value
of that amount to the Defaulting Party.

 

  (4) Second Method and Loss. If the Second Method and Loss apply, an amount
will be payable equal to the Non-defaulting Party’s Loss in respect of this
Agreement. If that amount is a positive number, the Defaulting Party will pay it
to the Non-defaulting Party; if it is a negative number, the Non-defaulting
Party will pay the absolute value of that amount to the Defaulting Party.

 

  (ii) Termination Events. If the Early Termination Date results from a
Termination Event:—

 

  (1) One Affected Party. If there is one Affected Party, the amount payable
will be determined in accordance with Section 6(e)(i)(3), if Market Quotation
applies, or Section 6(e)(i)(4), if Loss applies, except that, in either case,
references to the Defaulting Party and to the Non-defaulting Party will be
deemed to be references to the Affected Party and the party which is not the
Affected Party, respectively, and, if Loss applies and fewer than all the
Transactions are being terminated, Loss shall be calculated in respect of all
Terminated Transactions.

 

  (2) Two Affected Parties. If there are two Affected Parties:—

 

  (A) if Market Quotation applies, each party will determine a Settlement Amount
in respect of the Terminated Transactions, and an amount will be payable equal
to (I) the sum of (a) one-half of the difference between the Settlement Amount
of the party with the higher Settlement Amount (“X”) and the Settlement Amount
of the party with the lower Settlement Amount (“Y”) and (b) the Unpaid Amounts
owing to X less (II) the Unpaid Amounts owing to Y; and

 

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  (B) If Loss applies, each party will determine its Loss in respect of this
Agreement (or, if fewer than all the Transactions are being terminated, in
respect of all Terminated Transactions) and an amount will be payable equal to
one-half of the difference between the Loss of the party with the higher Loss
(“X”) and the Loss of the party with the lower Loss (“Y”).

If the amount payable is a positive number, Y will pay it to X; if it is a
negative number, X will pay the absolute value of that amount to Y.

 

  (iii) Adjustment for Bankruptcy. In circumstances where an Early Termination
Date occurs because “Automatic Early Termination” applies in respect of a party,
the amount determined under this Section 6(e) will be subject to such
adjustments as are appropriate and permitted by law to reflect any payments or
deliveries made by one party to the other under this Agreement (and retained by
such other party) during the period from the relevant Early Termination Date to
the date for payment determined under Section 6(d)(ii).

 

  (iv) Pre-Estimate. The parties agree that if Market Quotation applies an
amount recoverable under this Section 6(e) is a reasonable pre-estimate of loss
and not a penalty. Such amount is payable for the loss of bargain and the loss
of protection against future risks and except as otherwise provided in this
Agreement neither party will be entitled to recover any additional damages as a
consequence of such losses.

 

7. Transfer

Neither this Agreement nor any interest or obligation in or under this Agreement
may be transferred (whether by way of security or otherwise) by either party
without the prior written consent of the other party, except that:—

 

  (a) a party may make such a transfer of this Agreement pursuant to a
consolidation amalgamation with, or merger with or into, or transfer of all or
substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and

 

  (b) a party may make such a transfer of all or any part of its interest in any
amount payable to it from a Defaulting Party under Section 6(e).

Any purported transfer that is not in compliance with this Section will be void.

 

8. Miscellaneous

 

  (a) Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supercedes
all oral communication and prior writings with respect thereto.

 

  (b) Amendments. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidence by a
facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.

 

  (c) Survival of Obligations. Without Prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.

 

  (d) Remedies Cumulative. Except as provided in this Agreement, the rights,
powers, remedies, and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies, and privileges provided by law.

 

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  (e) Counterparts and Confirmations.

 

  (i) This Agreement (and each amendment, modification, and waiver in respect of
it) may be executed and delivered in counterparts (including by facsimile
transmission), each of which will be deemed an original.

 

  (ii) The parties intend that they are legally bound by the terms of each
Transaction from the moment they agree to those terms (whether orally or
otherwise). A Confirmation shall be entered into as soon as practicable and may
be executed and delivered in counterparts (including by facsimile transmission)
or be created by an exchange of telexes or by an exchange of electronic messages
on an electronic messaging system, which in each case will be sufficient for all
purposes to evidence a binding supplement to this Agreement. The parties will
specify therein or through another effective means that any such counterpart,
telex or electronic message constitutes a Confirmation.

 

  (f) No Waiver of Rights. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.

 

  (g) Headings. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.

 

9. Expenses

A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees,
incurred by such other party by reason of the enforcement and protection of its
rights under this Agreement or any Credit Support Document to which the
Defaulting Party is a party or by reason of the early termination of any
Transaction, including, but not limited to, costs of collection.

 

10. Notices

 

  (a) Effectiveness. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:—

 

  (i) if in writing and delivered in person or by courier, on the date it is
delivered;

 

  (ii) if sent by telex, on the date the recipient’s answerback is received;

 

  (iii) if sent by facsimile transmission, on the date that transmission is
received by a responsible employee of the recipient in legible form (it being
agreed that the burden of proving receipt will be on the sender and will not be
met by a transmission report generated by the sender’s facsimile machine);

 

  (iv) if sent by certified or registered mail (airmail, if overseas) or the
equivalent (return receipt requested), on the date that mail is delivered or its
delivery is attempted; or

 

  (v) if sent by electronic messaging system, on the date that electronic
message is received,

unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local

 

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Business Day or that communication is delivered (or attempted) or received, as
applicable, after the close of business on a Local Business Day, in which case
that communication shall be deemed given and effective on the first following
day that is a Local Business Day.

 

  (b) Change of Addresses. Either party may by notice to the other change the
address, telex, or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.

 

11. Governing Law and Jurisdiction

 

  (a) Governing Law. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.

 

  (b) Jurisdiction. With respect to any suit, action, or proceedings relating to
this Agreement (“Proceedings”), each party irrevocably:—

 

  (i) submits to the jurisdiction of the English courts, if this Agreement is
expressed to be governed by English law, or to the non-exclusive jurisdiction of
the courts of the State of New York and the United States District Court located
in the Borough of Manhattan in New York City, if this Agreement is expressed to
be governed by the laws of the State of New York; and

 

  (ii) waives any objection which it may have at any time to the laying of venue
of any Proceedings brought in any such court, waives any claim that such
Proceedings have been brought in an inconvenient forum and further waives the
right to object, with respect to such Proceedings, that such court does not have
any jurisdiction over such party.

Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments Act 1982 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.

 

  (c) Waiver of Immunities. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and assets
(irrespective of their use or intended use), all immunity on the grounds of
sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgement) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.

 

12. Definitions

As used in this Agreement:—

“Additional Termination Event” has the meaning specified in Section 5(b).

“Affected Party” has the meaning specified in Section 5(b).

“Affected Transactions” means (a) with respect to any Termination Event
consisting of an Illegality, all Transactions affected by the occurrence of such
Termination Event and (b) with respect to any other Termination Event, all
Transactions.

“Affiliate” means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, “control” of
any entity or person means ownership of a majority of the voting power of the
entity or person.

 

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“Applicable Rate” means:—

 

  (a) in respect of obligations payable or deliverable (or which would have been
but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;

 

  (b) in respect of an obligation to pay an amount under Section 6(e) of either
party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;

 

  (c) in respect of all other obligations payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default
Rate; and

 

  (d) in all other cases, the Termination Rate.

“Consent” includes a consent, approval, action, authorization, exemption,
notice, filing, registration or exchange control consent.

“Credit Event Upon Merger” has the meaning specified in Section 5(b).

“Credit Support Document” means any agreement or instrument that is specified as
such in this Agreement.

“Credit Support Provider” has the meaning specified in the Schedule.

“Default Rate” means a rate per annum equal to the cost (without proof or
evidence of any actual costs) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.

“Defaulting Party” has the meaning specified in Section 6(a).

“Early Termination Date” means the date determined in accordance with
Section 6(a) or 6(b)(iii).

“Event of Default” has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.

“Illegality” has the meaning specified in Section 5(b).

“Law” includes any treaty, law, rule, or regulation “lawful” and “unlawful” will
be construed accordingly.

“Local Business Day” means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located, (c) in
relation to any notice or other communication, including notice contemplated
under Section 5(a)(i), in the city specified in the address for notice provided
by the recipient and, in the case of a notice contemplated by Section 2(b), in
the place where the relevant new account is to be located and (d) in relation to
Section5 (a)(v)(2), in the relevant locations for performance with respect to
such Specified Transaction.

“Loss” means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, an amount that party reasonably
determines in good faith to be its total losses and costs (or gain, in which
case expressed as a negative number) in connection with this Agreement or that
Terminated Transaction or group of Terminated Transactions, as the case may be,
including any loss of bargain, cost of

 

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funding or, at the election of such party but without duplication, loss or cost
incurred as a result of its terminating, liquidating, obtaining or
reestablishing any hedge or related trading position (or any gain resulting from
any of them). Loss includes losses and costs (or gains) in respect of any
payment or delivery required to have been made (assuming satisfaction of each
applicable condition precedent) on or before the relevant Early Termination Date
and not made, except, so as to avoid duplication, if Section 6(e)(i)(l) or
(3) or 6(e)(ii)(2)(A) applies. Loss does not include a party’s legal fees and
out-of-pocket expenses referred to under Section 9. A party will determine its
Loss as of the relevant Early Termination Date, or, if that is not reasonably
practicable, as of the earliest date thereafter as is reasonably practicable. A
party may (but need not) determine its Loss by reference to quotations of
relevant rates or prices from one or more leading dealers in the relevant
markets.

“Market Quotation” means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with respect to the obligations of such party) and the quoting Reference
Market-maker to enter into a transaction (the “Replacement Transaction”) that
would have the effect of preserving for such party the economic equivalent of
any payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such Terminated Transaction
or group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have been required after that date. For this
purpose, Unpaid Amounts in respect of the Terminated Transaction or group of
Terminated Transactions are to be excluded but, without limitation, any payment
or delivery that would, but for the relevant Early Termination Date, have been
required (assuming satisfaction of each applicable condition precedent) after
that Early Termination Date is to be included. The Replacement Transaction would
be subject to such documentation as such party and the Reference Market-maker
may, in good faith, agree. The party making the determination (or its agent)
will request each Reference Market-maker to provide its quotation to the extent
reasonably practicable as of the same date and time (without regard to different
time zones) on or as soon as reasonably practicable after the relevant Early
Termination Date. The day and time as of which those quotations are to be
obtained will be selected in good faith by the party obliged to make a
determination under Section 6(e), and, if each party is so obliged, after
consultation with the other. If more than three quotations are provided, the
Market Quotation will be the arithmetic mean of the quotations, without regard
to the quotations having the highest and lowest values. If exactly three such
quotations are provided, the Market Quotation will be the quotation remaining
after disregarding the highest and lowest quotations. For this purpose, if more
than one quotation has the same highest value or lowest value, then one of such
quotation shall be disregarded. If fewer than three quotations are provided, it
will be deemed that the Market Quotation in respect of such Terminated
Transaction or group of Terminated Transactions cannot be determined.

“Non-default Rate” means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it) if
it were to fund the relevant amount.

“Non-defaulting Party” has the meaning specified in Section 6(a).

“Potential Event of Default” means any event which, with the giving of notice or
the lapse or time of both, would constitute an Event of Default.

“Reference Market-makers” means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.

“Scheduled Payment Date” means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.

 

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“Set-off” means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.

“Settlement Amount” means, with respect to a party and any Early Termination
Date, the sum of:—

 

  (a) the Market Quotations (whether positive or negative) for each Terminated
Transaction or group of Terminated Transactions for which a Market Quotation is
determined; and

 

  (b) such party’s Loss (whether positive or negative and without reference to
any Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not (in
the reasonable belief of the party making the determination) produce a
commercially reasonable result.

“Specified Entity” has the meaning specified in the Schedule.

“Specified Indebtedness” means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.

“Specified Transaction” means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable Specified Entity of such party) and the other party to
this Agreement (or any Credit Support Provider of such other party or any
applicable Specified Entity of such other party) which is a rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any combination of
these transactions and (c) any other transaction identified as a Specified
Transaction in this Agreement or the relevant confirmation.

“Termination Transactions” means with respect to an Early Termination Date
(a) if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in effect
immediately before the effectiveness of the notice designating that Early
Termination Date (or, if “Automatic Early Termination” applies, immediately
before that Early Termination Date).

“Termination Event” means an Illegality or, if specified to be applicable, a
Credit Event Upon Merger or an Additional Termination Event.

“Termination Rate” means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.

“Unpaid Amounts” owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for
Section 2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under
Section 2(a)(i) which was (or would have been but for Section 2(a)(iii))
required to be settled by delivery to such party on or prior to such Early
Termination Date and which has not been so settled as at such Early Termination
Date, an amount equal to the fair market value of that which was (or would have
been) required to be delivered as of the originally scheduled date for delivery,
in each case together with (to the extent permitted under applicable law)
interest, in the currency

 

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of such amounts, from (and including) the date such amounts or obligations were
or would have been required to have been paid or performed to (but excluding)
such Early Termination Date, at the Applicable Rate. Such amounts of interest
will be calculated on the basis of daily compounding and the actual number of
days elapsed. The fair market value of any obligation referred to in clause
(b) above shall be reasonably determined by the party obliged to make the
determination under Section 6(e) or, if each party is so obliged, it shall be
the average of the fair market values reasonably determined by both parties.

 

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IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.

 

BRANCH BANKING AND TRUST COMPANY      ROANOKE GAS COMPANY By:   

/s/ Michael Justice

     By:  

/s/ John Williamson III

Name:    Michael Justice      Name:   John Williamson III Title:    Vice
President      Title:   President & CEO

 

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(Local Currency—Single Jurisdiction)

 

ISDA®

International Swaps and Derivatives Association, Inc.

SCHEDULE

to the

Master Agreement

dated as of October 27, 2008

between

 

  and   

BRANCH BANKING AND TRUST COMPANY

    

ROANOKE GAS COMPANY

(“Party A”)      (“Party B”)

Part 1. Termination Provisions.

 

(a) “Specified Entity” means in relation to Party A for the purpose of:

Section 5(a)(v), none

Section 5(a)(vi), none

Section 5(a)(vii), none

Section 5(b)(ii), none

and in relation to Party B for the purpose of:

Section 5(a)(v), any Affiliate of Party B

Section 5(a)(vi), any Affiliate of Party B

Section 5(a)(vii), any Affiliate of Party B

Section 5(b)(ii), any Affiliate of Party B

 

(b) “Specified Transaction” will have the meaning specified in Section 12 of
this Agreement unless another meaning is specified here: no other meaning is
specified.

 

(c) The “Cross Default” provisions of Section 5(a)(vi) will not apply to Party A
and will apply to Party B.

With respect to Party B, “Cross Default” is amended by inserting the following
at the end of Section 5(a)(vi): “or (3) any default, event of default or other
similar condition or event (however described) under any Financial Agreement (as
described in the Schedule).

 

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If such provisions apply, “Specified Indebtedness” will have the meaning
specified in Section 12 of this Agreement unless another meaning is specified
here: no other meaning is specified.

“Threshold Amount” means with respect to Party A, not applicable. Threshold
Amount means with respect to Party B: $0.

 

(d) The “Credit Event Upon Merger” provisions of Section 5(b)(ii) will not apply
to Party A and will apply to Party B.

 

(e) The “Automatic Early Termination” provision of Section 6(a) will not apply
to Party A and will not apply to Party B.

 

(f) “Payments on Early Termination”. For the purpose of Section 6(e) of this
Agreement:

 

  (i) Market Quotation method will apply.

 

  (ii) the Second Method will apply.

 

(g) “Additional Termination Event” will apply. The following shall constitute an
Additional Termination Event: If Party A, for any reason, ceases to be a party
to the Credit Support Documents described in Part 4(c) of this Schedule. For the
purpose of foregoing Termination Event, the Affected Party shall be Party B.

Part 2. Tax Provisions

 

(a) Tax Representations.

 

  (i) Party A represents at all times hereunder that (A) it is a corporation
organized under the laws of the State of North Carolina, and (B) it is a United
States resident for United States federal income tax purposes.

 

  (ii) Party B represents at all times hereunder that (A) it is organized or
formed under the laws of a state within the United States, and (B) it is (or, if
Party B is disregarded for United States federal income tax purposes, its
beneficial owner is) a United States resident for United States federal income
tax purposes.

 

(b) Tax Forms.

 

  (i) Each party agrees to deliver to the other party the tax forms specified
below with respect to it at the following times: before the first Payment Date
under this Agreement, promptly upon reasonable demand by the other party; and
promptly upon learning that any such form previously provided by the party has
become obsolete or incorrect.

 

  (A) Tax forms to be delivered by Party A: None specified.

 

  (B) Tax forms to be delivered by Party B:

A correct, complete and duly executed U.S. Internal Revenue Service Form W-9 (or
successor thereto) that eliminates U.S. federal backup withholding tax on
payments to Party B under this Agreement.

 

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  (ii) In addition, each party agrees to deliver to the other party, upon
reasonable demand by such other party, any other tax form that may be required
or reasonably requested in writing in order to allow such other party to make a
payment under this Agreement (or under any Credit Support Document) without any
deduction or withholding for or on account of any tax imposed by any government
or other taxing authority in respect of any such payment (other than a stamp,
registration, documentation or similar tax), or with such deduction or
withholding at a reduced rate, which form shall be correct, complete and duly
executed.

 

  (C) Withholding Tax Liability. A breach of a representation under paragraph
(a) above, or a failure to deliver a required tax form in accordance with
paragraph (b) above, by a party hereunder (the “defaulting payee”) may result in
a tax liability on the part of the other party (the “payor”), as required by the
United States Internal Revenue Code and regulations thereunder, for withholding
or backup withholding on any payment by the payor to the defaulting payee under
this Agreement (or under any Credit Support Document), including a liability to
remit to the U.S. Treasury Department the required amount of withholding and to
pay interest and penalties to the U.S. Treasury Department for amounts not
withheld.

Accordingly, if any such breach or failure by the defaulting payee results in
any such tax liability, then (i) any amount so withheld and remitted to the U.S.
Treasury Department shall discharge the payor’s obligation under this Agreement
(or under any Credit Support Document) to pay to the defaulting payee the
portion of any payment so withheld and remitted (with the payor having no
obligation to “gross up” any of its payments for such withheld amounts), and
(ii) if any tax liability resulting from the defaulting payee’s breach or
failure is assessed directly against the payor in respect of any amounts not
withheld, the defaulting payee shall indemnify the payor on demand for the
amount of such tax liability (including interest and penalties). However, any
such breach or failure by the defaulting payee shall not be an “Event of
Default” or a “Potential Event of Default” under this Agreement unless the
defaulting payee fails to so indemnify the payor.

Part 3. Agreement to Deliver Documents.

For the purpose of Section 4(a) of this Agreement, each party agrees to deliver
the following documents, as applicable:

 

Party required to deliver document

 

Form/Document/Certificate

 

Date by which to be delivered

 

Covered by Section 3(d)
Representation

Party B   Certified copy of [Board Resolutions/Action by directors/
partners/members/managers] authorizing this agreement   Upon execution of this
agreement   Yes Party B   Incumbency Certificates certifying names, signatures
and authority of [officers/partners/members/managers] signing this agreement  
Upon execution of this agreement   Yes Parties A&B   Any form or certificate
reasonably requested by either Party   Upon request   Yes Party B   Credit
Support Document   Upon execution of this agreement   Yes

 

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Part 4. Miscellaneous.

 

(a) Addresses for Notices. For the purpose of Section 10(a) of this Agreement,
all notices to a party shall, with respect to any particular Transaction, be
sent to its address, telex number or facsimile number specified in the relevant
Confirmation (or as specified below if not specified in the relevant
Confirmation), provided that any notice under Section 5 or 6 of this Agreement,
and any notice under this Agreement not related to a particular Transaction,
shall be sent to a party at its address specified below:

 

To Party A:

Address:

 

200 West 2nd Street 17tb Floor

Winston-Salem, NC 27101

Attention:

  R. Kevin Randal

Facsimile No.:

  (336) 733-2883 Telephone No.: (336) 733-2853

Electronic Messaging System Details:

  rrandal@bbandt.com

Address for notices or communications to Party B:

Address:

 

PO Box 13007

Roanoke, 24030

Attention:

  John Williamson III,

Facsimile No.:   540-777-2636 Telephone No.: 540-777-3842

Electronic Messaging System Details:   howard_Lyon@rgcresources.com

 

(b) “Calculation Agent.” The Calculation Agent is Party A, unless otherwise
specified in a Confirmation in relation to the relevant Transaction.

 

(c) “Credit Support Document.” In relation to Party B, means any guarantee,
security agreement, mortgage, deed of trust, pledge agreement, credit agreement,
or any other agreement or document currently in effect or entered into in the
future, that by its terms guarantees, secures, collateralizes or otherwise
supports the performance of any of Party B’s obligations to Party A under this
Agreement (the “Obligations”).

 

(d) “Credit Support Provider” Any individual or entity named or specified in a
Credit Support Document who is obligated to secure, collateralize, guarantee or
otherwise support Party B’s performance of its Obligations.

 

(e) “Governing Law.” This Agreement will be governed by and construed in
accordance with the laws of the State of New York (without reference to the
conflict of laws provisions thereof).

 

(f) “Netting of Payments.” Subparagraph (ii) of Section 2(c) of this Agreement
will not apply to the following Transactions or groups of Transactions (in each
case starting from the date of this Agreement): No Transactions specified.

 

(g) “Affiliate” will have the meaning specified in Section 12 of this Agreement
unless another meaning is specified here: no other meaning is specified.

Part 5. Other Provisions.

 

(a) Confirmations. Upon receipt thereof, Party B shall examine the terms of each
Confirmation sent by Party A, and unless Party B objects to the terms within two
(2) Business Days after receipt of that Confirmation, those terms shall be
deemed accepted and correct absent manifest error, in which case that
Confirmation will be sufficient to form a binding supplement to this Agreement
notwithstanding Section 8(e)(ii) of this Agreement. Failure by Party A to send a
Confirmation or of Party B to respond within such period shall not affect the
validity or enforceability of such Transaction.

 

(b) Default Rate. In the event there is a definition of “Default Rate” in a
Financial Agreement, then Default Rate as defined in Part 12 of this Agreement
is replaced by the definition of “Default Rate” in such Financial Agreement (and
if there is more than one such definition, the Default Rate shall be the greater
of such rates so long as such rate does not violate applicable law). Such
definition of “Default Rate” shall remain in effect notwithstanding the
satisfaction of any obligation or promise to pay money under such Financial
Agreement or termination or cancellation of such Financial Agreement.

 

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(c) Right of Offset. In addition to any other rights of offset set forth in the
Agreement, in the event of any occurrence or designation of an Early Termination
Date which results in any positive value to this Agreement or any such
Transaction which would otherwise be payable to Party B, Party A shall have the
right, at its sole option and election, and, without exclusion to any of its
other remedies, to apply all or any part of any such positive value resulting
from the occurrence or designation of an Early Termination Date to Party B’s
obligations and liabilities under this Agreement and under any of the Credit
Support Documents, as Party A desires in its sole and absolute discretion.

 

(d) Recording. Each party and any of its Affiliates may electronically record
any of its telephone conversations of its trading and marketing personnel with
the other party or with any of the other party’s Affiliates’ trading or
marketing personnel in connection with this Agreement or any Transaction (or any
potential Transaction), and any such recordings may be submitted in evidence in
any Proceeding to establish any matters pertinent to this Agreement or any
Transaction (or any potential Transaction).

 

(e) Obligations Secured. Party B hereby acknowledges and agrees that its
obligations and liabilities in respect of this Agreement are secured by the real
and personal property collateral provided by Party B pursuant to the Credit
Support Documents referred to in Part 4(c) of the Schedule to this Agreement.

 

(f) Additional Representations of Party B. For purposes only of representations
of or by Party B made in and deemed repeated pursuant to Section 3 of the
Agreement, Section 3 of the Agreement is hereby amended by adding additional
subparagraphs to said Section 3, which subparagraphs shall be lettered (e), (f),
(g), (h), (i) and (j), respectively, and shall read as follows:

“(e) Non-Reliance. For any Relevant Agreement: (i) it acts as principal and not
as agent, (ii) it acknowledges that the other party acts only at arm’s length
and is not its agent, broker, advisor or fiduciary in any respect, and any
agency, brokerage, advisory or fiduciary services that the other party (or any
of its affiliates) may otherwise provide to the party (or to any of its
affiliates) excludes the Relevant Agreement, (iii) it is relying solely upon its
own evaluation of the Relevant Agreement (including the present and future
results, consequences, risks, and benefits thereof, whether financial,
accounting, tax, legal, or otherwise) and upon advice from its own professional
advisors, (iv) it understands the Relevant Agreement and those risks, has
determined they are appropriate for it, and willingly assumes those risks, and
(v) it has not relied and will not be relying upon any evaluation or advice
(including any recommendation, opinion, or representation) from the other party,
its affiliates or the representatives or advisors of the other party or its
affiliates (except representations expressly made in the Relevant Agreement or
an opinion of counsel required thereunder).

“Relevant Agreement” means this Agreement, each Transaction, each Confirmation,
any Credit Support Document, and any agreement (including any amendment,
modification, transfer or early termination) between the parties relating to any
of the foregoing.

“(f) Evaluation and Understanding. Each party is capable of evaluating and
understanding the structure, terms, conditions and risks of that Transaction. It
is also capable of assuming and assumes the financial and other miscellaneous
risks of the transaction.”

“(g) ERISA. It is not (i) an employee benefit plan as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or a
plan as defined in Section 4975(e)(1) of the Internal Revenue Code of 1986, as
amended (the “Code”), subject to Title I of ERISA or Section 4975 of the Code,
or a plan as so defined but which is not subject to Title I of ERISA or
Section 4975 of the Code but is subject to another law materially similar to
Title I of ERISA or Section 4975 of the Code (each of which, an “ERISA Plan”),
(ii) a person or entity acting on behalf of an ERISA Plan, or (iii) a person or
entity the assets of which constitute assets of an ERISA Plan.”

“(h) Line of Business. Party B has entered into this Agreement (including each
Transaction evidenced hereby) in conjunction with its line of business or the
financing of its business.”

 

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“(i) Eligible Contract Participant. Party B is an “eligible contract
participant” as defined by Section 1a(12) of the Commodity Exchange Act (7
U.S.C. 1a), as amended by the Commodity Futures Modernization Act of 2000.

“(j) Swap Agreement. This Agreement, any Credit Support Document to which Party
B is a party, and each Transaction and related Confirmation constitutes a “swap
agreement” within the meaning of the Part 35 Regulations of the Commodity
Futures Trading Commission.”

 

(g) Additional Agreement of Party B. For purposes only of the agreements and
covenants to be performed and observed by Party B pursuant to and in accordance
with the provisions of the Agreement, Section 4 of the Agreement is hereby
amended by adding an additional subparagraph thereto, which subparagraph shall
be lettered (d) and shall read as follows:

“(d) Covenants of Financial Agreements.

(i) Party B shall provide Party A at all times hereunder with the same covenant
protection as Party A (or any Affiliate of Party A) requires of Party B under
Financial Agreements. Therefore, in addition to the Cross Default provisions of
this Agreement, and notwithstanding the satisfaction of any obligation or
promise to pay money to Party A (or any Affiliate of Party A) under any
Financial Agreement, or the termination or cancellation of any Financial
Agreement, Party B hereby agrees to perform, comply with and observe for the
benefit of Party A hereunder all affirmative and negative covenants contained in
each Financial Agreement applicable to Party B (excluding any obligation or
promise to pay money under any Financial Agreement) at any time Party B has any
obligation (whether absolute or contingent) under this Agreement.

(ii) For purposes hereof: (A) the affirmative and negative covenants of each
Financial Agreement applicable to Party B (together with related definitions and
ancillary provisions, but in any event excluding any obligation or promise to
pay money under any Financial Agreement) are incorporated (and upon execution of
any future Financial Agreement, shall automatically be incorporated) by
reference herein (mutatis mutandis); (B) if other lenders or creditors are
parties to any Financial Agreement, then references therein to the lenders or
creditors shall be deemed references to Party A; and (C) for any covenant
applying only when any loan, other extension of credit, obligation or commitment
under the Financial Agreement is outstanding, that covenant shall be deemed to
apply hereunder at any time Party B has any obligation (whether absolute or
contingent) under this Agreement.

(iii) Notwithstanding the foregoing, if the incorporation herein of any
provision by reference from any Financial Agreement would result in the
violation of Party B of the terms of that Financial Agreement or be in violation
of any law, rule or regulation (as interpreted by any court of competent
jurisdiction), then this Agreement shall not incorporate that provision.

“Financial Agreement” means each existing or future agreement or instrument
relating to any loan or extension of credit from Party A (or any Affiliate of
Party A) to Party B (whether or not anyone else is a party thereto) including,
without limitation, the Credit Support Documents, as the same exists when
executed and without regard to: (i) any termination or cancellation thereof or
Party A ceasing to be a party, thereto (whether as a result of repayment thereof
or otherwise), or (ii) or unless consented to in writing by Party A (or such
Affiliate of Party A as may be party to such Financial Agreement), any
amendment, modification, addition, waiver or consent thereto or thereof.

 

(h) Change of Account. Any account designated by a party pursuant to
Section 2(b) shall be in the same legal and tax jurisdiction as the original
account, or shall not otherwise result in any withholding or other taxes under
this Agreement or any Transaction.

 

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(i) Waiver of Right to Trial by Jury. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
AND ALL RIGHTS TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

(j) Scope of Agreement. Any Specified Transaction now existing or hereafter
entered into between the parties (whether or not evidenced by a Confirmation)
which constitutes (i) a swap, cap, collar, floor or option on interest rates in
which the transaction is denominated U.S. Dollars, (ii) any other interest rate
derivatives transaction denominated in U.S. Dollars, (iii) any option on or with
respect to any of the foregoing, or (iv) any combination of any of the
foregoing, shall constitute a “Transaction” under this Agreement and shall be
subject to, governed by, and construed in accordance with the terms of this
Agreement, unless the confirming document(s) for that Specified Transaction
provide(s) otherwise. For any such Specified Transaction not evidenced by a
Confirmation, Section 2(a)(i) of this Agreement is amended to read as follows:
“(i) Each party will make each payment or delivery to be made by it under each
Transaction, as specified in each Confirmation (or otherwise in accordance with
the terms of that Transaction if not evidenced by a Confirmation), subject to
the other provisions of this Agreement.” In addition, any Specified Transaction
between the parties evidenced by a Confirmation that by its terms specifies that
it is subject to or governed by this Agreement (or an ISDA Master Agreement
between the parties), whether entered into before, on or after the date of this
Agreement, shall constitute a Transaction under this Agreement and shall be
subject to, governed by, and construed in accordance with the terms of this
Agreement.

 

(k) Transfer. Notwithstanding anything contained in Section 7 of this Agreement,
if Party A’s rights in any loan or extension of credit under any Financial
Agreement are sold, assigned or otherwise transferred to any purchaser, assignee
or transferee to which Party A may lawfully make such sale, assignment or
transfer, then Party A may transfer without recourse its rights and obligations
in or under this Agreement (and any Credit Support Document) to any such
purchaser, assignee or transferee, provided that Party B is provided with
written notice of such transfer and a written acknowledgement of the purchaser,
assignee or transferee stating that it has acquired such rights and obligations
of Party A and is bound by the terms of this Agreement (and any Credit Support
Document) as Party A’s successor hereunder (and thereunder).

 

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(l) Independent Obligations. (i) Although Party B may be entering into one or
more Transactions under this Agreement to hedge against the interest expense of,
or other risk associated with, an existing or future loan or other financing,
this Agreement and each Transaction shall be an independent obligation of Party
B separate and apart from any such loan or other financing, and therefore:
(A) each party’s obligations under this Agreement or any Transaction shall not
be contingent on whether any loan or other financing closes, is outstanding or
is repaid, in whole or in part, at any time; (B) subject to paragraph
(ii) below, any repayment, acceleration, satisfaction, discharge or release of,
and any amendment, modification or waiver with respect to, any loan or other
financing, whether in whole or in part, at any time, shall not in any way affect
this Agreement, any Transaction or either party’s obligations under this
Agreement or any Transaction; (C) payments that become due under this Agreement
or any Transaction shall be due whether or not (1) the Notional Amount of any
Transaction at any time is different from the principal amount of any loan or
other financing, (2) the Termination Date of any Transaction occurs before or
after the maturity date of any loan or other financing, or (3) any other terms
of any loan or other financing are different from the terms of this Agreement or
any Transaction; (D) nothing in this Agreement or in any Confirmation is
intended to be, nor shall anything herein or therein be construed as, a
prepayment penalty, charge or premium for purposes of any loan or other
financing, nor shall any terms of any loan or other financing be deemed a waiver
of or otherwise impair any amount due or that may become due under this
Agreement or under any Transaction; (E) if Party B at any time receives from
Party A (or any of its affiliates) any payoff statement or other written
statement regarding any loan or other financing, nothing in such statement shall
be deemed to apply to this Agreement or any Transaction except as otherwise
expressly provided in that statement and then only to the extent so provided;
and (F) if at any time any existing or future collateral or other credit support
secures or otherwise supports both this Agreement (or any Transaction hereunder)
and any loan or other financing (whether this Agreement or any Transaction
hereunder is specifically identified in the collateral or credit support
documents, or instead is referred to therein generically), then such collateral
or other credit support shall continue to secure or otherwise support Party B’s
obligations under this Agreement (or any Transaction hereunder) until such time
as all such obligations of Party B are completely satisfied notwithstanding any
repayment, acceleration, satisfaction, discharge or release of any such loan or
other financing.

(ii) Nothing in paragraph (i) above shall be construed as impairing or limiting:
any set-off rights; any cross default, credit support default or other
provisions contained in this Agreement or any Confirmation to the extent such
provisions refer to any repayment or acceleration of any loan or other
financing; any rights or obligations under any Credit Support Documents; or any
obligations of Party B under any covenant incorporated in this Schedule by
reference from any loan or other financing (provided that any amendment,
modification or waiver executed and delivered by Party A in writing with respect
to any such covenant shall be deemed to apply hereunder to that covenant as so
incorporated unless otherwise expressly provided in such writing).

 

(m) Notice by Facsimile Transmission. Section 10(a) is hereby amended by
deleting the parenthetical “(except that a notice or other communication under
Section 5 or 6 may not be given by facsimile transmission or electronic
messaging system)”.

 

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IN WITNESS WHEREOF, the parties have executed this Schedule by their duly
authorized signatories as of the date hereof.

 

BRANCH BANKING AND TRUST COMPANY      ROANOKE GAS COMPANY By:   

/s/ Michael Justice

     By:  

/s/ John Williamson III

Name:    Michael Justice      Name:   John Williamson III Title:    Vice
President      Title:   President & CEO

 

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