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TERM LOAN
CREDIT AGREEMENT

Dated as of June 1, 2012,
among
SOUTH JERSEY INDUSTRIES, INC.,
as Borrower,

and
THE SEVERAL LENDERS FROM TIME TO TIME PARTY HERETO,
as Lenders,

and
JPMORGAN CHASE BANK, N.A.,
as a Lender and Administrative Agent

J.P. MORGAN SECURITIES LLC
as Lead Arranger and Sole Book Runner

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TABLE OF CONTENTS

ARTICLE I DEFINITIONS
 
 
SECTION 1.01
Certain Defined Terms.
1

SECTION 1.02
Computation of Time Periods.
16

SECTION 1.03
Accounting Terms and Determinations.
16

SECTION 1.04
Terminology.
17

SECTION 1.05
Use of Defined Terms.
17

 
 
 
ARTICLE II LOANS
 
 
SECTION 2.01
Term Loans.
18

SECTION 2.02
[Reserved].
18

SECTION 2.03
Procedure for Advances of Loans.
18

SECTION 2.04
[Reserved].
19

SECTION 2.05
[Reserved].
19

SECTION 2.06
Termination of Commitments.
19

SECTION 2.07
Prepayment, Repayment and Amortization of Loans.    
19

SECTION 2.08
[Reserved].
19

SECTION 2.09
Evidence of Debt; Notes.
19

SECTION 2.10
Interest Rates.
20

SECTION 2.11
Additional Interest on LIBOR Rate Loans.
22

SECTION 2.12
Interest Rate Determination; Changed Circumstances.
22

SECTION 2.13
Voluntary Conversion of Loans.
23

SECTION 2.14
Increased Costs.
24

SECTION 2.15
Illegality.
25

SECTION 2.16
Nature of Obligations of Lenders; Assumption by the Administrative Agent.
25

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SECTION 2.17
Taxes; Foreign Lenders.    
26

SECTION 2.18
[Reserved].
28

SECTION 2.19
[Reserved].
28

SECTION 2.20
[Reserved].
28

SECTION 2.21
Mitigation Obligations; Replacement of Lenders.
28

SECTION 2.22
Defaulting Lenders.
29

 
 
 
ARTICLE III [RESERVED]
 
30

 
 
 
 
 
 
ARTICLE IV CONDITIONS PRECEDENT
 
31

SECTION 4.01
Conditions Precedent to the Execution and Delivery of this Agreement.
31

 
 
 
ARTICLE V REPRESENTATIONS AND WARRANTIES
 
33

SECTION 5.01
Representations and Warranties of the Borrower.    
33

 
 
 
ARTICLE VI COVENANTS OF THE COMPANY
 
38

SECTION 6.01
Affirmative Covenants.
38

SECTION 6.02
Negative Covenants.
40

SECTION 6.03
Reporting Requirements.
41

SECTION 6.04
Financial Covenants.
43

 
 
 
ARTICLE VII EVENTS OF DEFAULT
 
44

SECTION 7.01
Events of Default.
44

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SECTION 7.02
Upon an Event of Default.
45

SECTION 7.03
Rights and Remedies Cumulative; Non-Waiver; Etc.
45

 
 
 
ARTICLE VIII [Reserved]
 
47

 
 
 
ARTICLE IX THE ADMINISTRATIVE AGENT
 
48

SECTION 9.01
Appointment and Authority.
48

SECTION 9.02
Rights as a Lender.
48

SECTION 9.03
Exculpatory Provisions.
48

SECTION 9.04
Reliance by Administrative Agent.
49

SECTION 9.05
Delegation of Duties.
49

SECTION 9.06
Resignation of Administrative Agent.
49

SECTION 9.07
Non‑Reliance on Administrative Agent and Other Lenders.
50

SECTION 9.08
No Other Duties, etc.
50

 
 
 
ARTICLE X MISCELLANEOUS
 
51

SECTION 10.01
Amendments, Etc.
51

SECTION 10.02
Notices, Etc.
51

SECTION 10.03
No Waiver; Remedies.
51

SECTION 10.04
Set-off.
52

SECTION 10.05
Indemnification.
53

SECTION 10.06
[Reserved].
54

SECTION 10.07
Costs, Expenses and Taxes.
54

SECTION 10.08
[Reserved].
54

SECTION 10.09
Benefit of Agreement.
55

SECTION 10.10
Severability.
57

SECTION 10.11
Governing Law.
58

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SECTION 10.12
Headings.
58

SECTION 10.13
Submission To Jurisdiction; Waivers.
58

SECTION 10.14
Acknowledgments.
58

SECTION 10.15
Waivers of Jury Trial.
59

SECTION 10.16
Confidentiality.
59

SECTION 10.17
Execution in Counterparts.
60

 
 
 
EXHIBITS
 
 
EXHIBIT A
Form of Note
 
EXHIBIT B
Form of Notice of Borrowing
 
EXHIBIT C
Form of Notice of Account Designation
 
EXHIBIT D
Form of Notice of Conversion/Continuation
 
EXHIBIT E
Form of Opinion of Counsel to the Borrower
 
EXHIBIT F
Form of Assignment of Assumption
 
EXHIBIT G
Form of Compliance Certificate
 
EXHIBIT H
Form of Extension Letter
 
 
 
 
SCHEDULES
 
 
Schedule I
Lenders, Applicable Lending Offices, Commitments and Applicable Percentages
 
Schedule II
Ownership
 

    

    

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TERM LOAN CREDIT AGREEMENT

This TERM LOAN CREDIT AGREEMENT (as it may be amended, supplemented or otherwise
modified in accordance with the terms hereof at any time and from time to time,
this “Agreement”) dated as of June 1, 2012, among SOUTH JERSEY INDUSTRIES, INC.,
a New Jersey corporation (the “Borrower”), the several banks and other financial
institutions from time to time parties to this Agreement (each a “Lender” and
collectively, the “Lenders”), and JPMORGAN CHASE BANK, N.A., a national banking
association organized and existing under the laws of the United States of
America (“JPMorgan”), as administrative agent for the Lenders hereunder (in such
capacity, together with its successors and permitted assigns in such capacity,
the “Administrative Agent”).
PRELIMINARY STATEMENTS
WHEREAS, the Borrower has requested that the Lenders make term loans to the
Borrower, in an aggregate principal amount of $20,000,000, for general corporate
purposes including, without limitation, for working capital of the Borrower, its
Subsidiaries or its Affiliates; and
WHEREAS, the Lenders are willing, on the terms and subject to the conditions set
forth in this Agreement, to extend credit under this Agreement as more
particularly hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, the parties agree as follows:

ARTICLE I
DEFINITIONS

Section 1.01 Certain Defined Terms. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):

“Administrative Agent” has the meaning assigned to that term in the preamble
hereto.
“Administrative Agent's Office” means the office of the Administrative Agent
specified in Section 2.10(e).
“AML and Anti-Terrorist Acts” has the meaning assigned to that term in Section
6.01(k).
“Affiliate” means, with respect to any Person, any other Person directly or
indirectly controlling (including but not limited to all directors and officers
of such Person), controlled by, or under direct or indirect common control with
such Person. A Person shall be deemed to control another entity if such Person
possesses, directly or indirectly, the power to direct or cause the direction of
the management and policies of such entity, whether through the

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ownership of voting securities, by contract, or otherwise.
“Agreement” means this Term Loan Credit Agreement, as it may be amended,
supplemented or otherwise modified in accordance with the terms hereof at any
time and from time to time.
“Applicable Base Rate Margin” shall have the meaning set forth in the definition
of Applicable Margin.
“Applicable Law” means all applicable laws, statutes, treaties, rules, codes,
ordinances, regulations, permits, certificates, orders, interpretations,
licenses, and permits of any Governmental Authority and judgments, decrees,
injunctions, writs, orders or like action of any court, arbitrator or other
judicial or quasi-judicial tribunal (including, without limitation, those
pertaining to health, safety, the environment or otherwise).
“Applicable Lending Office” means, with respect to any Lender, the office of
such Lender specified as such opposite its name on Schedule I hereto or in the
Assignment and Assumption pursuant to which it became a Lender, or such other
office of such Lender as such Lender may from time to time specify to the
Borrower and the Administrative Agent.
“Applicable LIBOR Margin” shall have the meaning set forth in the definition of
Applicable Margin.
“Applicable Margin” means, for the applicable interest rate on Loans made to the
Borrower, the rate per annum as set forth in the “Pricing Grid” below,
determined by reference to the Debt Ratings:
Tier
Debt Ratings
Applicable Base Rate Margin
Applicable LIBOR Margin
I
At least A-/A3
—%
1%
II
Less than A-/A3; At least BBB+/Baa1
0.125%
1.125%
III
Less than BBB+/Baa1
0.25%
1.25%

The Applicable Margin shall be adjusted effective on the next Business Day
following any change in the Borrower's Debt Ratings. The Borrower shall notify
the Administrative Agent in writing promptly after becoming aware of any change
in its Debt Ratings.
“Applicable Percentage” means for each Lender, a fraction (expressed as a
decimal) the numerator of which is the aggregate principal amount of the Loans
held by such Lender at such time and the denominator of which is the aggregate
principal amount of all Loans. The Applicable Percentage of each Lender is set
out on Schedule I.
“Applicable Rate” means:
a.in the case of each Base Rate Loan, a rate per annum equal at all times to the
sum of the Base Rate plus the Applicable Base Rate Margin in effect from time to
time; and
b.in the case of each LIBOR Rate Loan comprising part of the same Loan, a

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rate per annum during each Interest Period equal at all times to the sum of the
LIBOR Rate for such Interest Period plus the Applicable LIBOR Margin in effect
from time to time during such Interest Period.
“Approved Fund” means any Fund that is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.
“Arranger” means J.P. Morgan Securities LLC in its capacity as lead arranger and
sole book runner, and its successors and assigns.
“Assignment and Assumption” means an Assignment and Assumption executed in
accordance with Section 10.09 in the form attached hereto as Exhibit F.
“Bankruptcy Event” means, with respect to any Person, such Person becomes the
subject of a bankruptcy or insolvency proceeding, or has had a receiver,
conservator, trustee, administrator, custodian, assignee for the benefit of
creditors or similar Person charged with the reorganization or liquidation of
its business appointed for it, or, in the good faith determination of the
Administrative Agent, has taken any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any such proceeding or appointment,
provided that a Bankruptcy Event shall not result solely by virtue of any
ownership interest, or the acquisition of any ownership interest, in such Person
by a Governmental Authority or instrumentality thereof, provided, further, that
such ownership interest does not result in or provide such Person with immunity
from the jurisdiction of courts within the United States or from the enforcement
of judgments or writs of attachment on its assets or permit such Person (or such
Governmental Authority or instrumentality) to reject, repudiate, disavow or
disaffirm any contracts or agreements made by such Person.
“Base Rate” means, for any day, a rate per annum equal to the greatest of
(a) the Prime Rate in effect on such day, (b) the Federal Funds Rate in effect
on such day plus ½ of 1% and (c) the LIBOR Rate for a one month Interest Period
on such day (or if such day is not a Business Day, the immediately preceding
Business Day) plus 1%, provided that, for the avoidance of doubt, the LIBOR Rate
for any day shall be based on the rate appearing on Reuters Screen LIBOR01 Page
(or on any successor or substitute page of such page) at approximately 11:00
a.m. London time on such day. Any change in the Base Rate due to a change in the
Prime Rate, the Federal Funds Rate or the LIBOR Rate shall be effective from and
including the effective date of such change in the Prime Rate, the Federal Funds
Rate or the LIBOR Rate, respectively
“Base Rate Loan” means all Loans, or portions thereof, bearing interest based on
the Base Rate.
“Board” means the Board of Governors of the Federal Reserve System of the United
States of America.
“Borrower” has the meaning assigned to that term in the preamble hereto.
“Bonds” means any tax-exempt bonds issued in connection with various projects of
the Borrower or its Subsidiaries, certain obligations of which are supported by
letters of credit issued under the Revolving Credit Facility, and includes,
without limitation, the 2001A

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Bonds, the 2001B Bonds and the 2006A Bonds.
“Business Day” means (a) for all purposes other than as set forth in clause (b)
below, any day other than a Saturday, Sunday or legal holiday on which banks in
Chicago, Illinois and New York, New York, are open for the conduct of their
commercial banking business, and (b) with respect to all notices and
determinations in connection with, and payments of principal and interest on,
any LIBOR Rate Loan, or any Base Rate Loan as to which the interest rate is
determined by reference to LIBOR, any day that is a Business Day described in
clause (a) and that is also a day for trading by and between banks in Dollar
deposits in the London interbank market.
“Capital Stock” means, with respect to any Person, any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) equity of such Person,
including any preferred interest, any limited or general partnership interest
and any limited liability company membership interest.
“CERCLA” means the Comprehensive Environmental Response Compensation and
Liability Act, 42 U.S.C. § 9601, et seq., as amended from time to time, and any
regulations promulgated thereunder.
“Change in Control” means the occurrence of either of the following: (a) any
entity, person (within the meaning of Section 14(d) of the Exchange Act) or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act)
which theretofore was beneficial owner (as defined in Rule 13d‑3 under the
Exchange Act) of less than 20% of the Borrower's then outstanding common stock
either (i) acquires shares of common stock of the Borrower in a transaction or
series of transactions that results in such entity, person or group directly or
indirectly owning beneficially 20% or more of the outstanding common stock of
the Borrower, or (ii) acquires, by proxy or otherwise, the right to vote for the
election of directors, for any merger, combination or consolidation of the
Borrower or any of its direct or indirect Subsidiaries, or, for any other matter
or question, more than 20% of the then outstanding voting securities of the
Borrower; or (b) 20% or more of the directors of the board of directors of the
Borrower fail to consist of Continuing Directors.
“Change in Law” means the occurrence, after the date of this Agreement (or with
respect to any Lender, if later, the date on which such Lender becomes a
Lender), of any of the following: (a) the adoption or taking effect of any law,
rule, regulation or treaty, (b) any change in any law, rule, regulation or
treaty or in the administration, interpretation or application thereof by any
Governmental Authority, or (c) the making or issuance of any request, rules,
guideline, requirement or directive (whether or not having the force of law) by
any Governmental Authority; provided however, that notwithstanding anything
herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer
Protection Act and all requests, rules, guidelines, requirements and directives
thereunder, issued in connection therewith or in implementation thereof, and
(ii) all requests, rules, guidelines, requirements and directives promulgated by
the Bank for International Settlements, the Basel Committee on Banking
Supervision (or any successor or similar authority) or the United States or
foreign regulatory authorities, in each case pursuant to Basel III, shall in
each case be deemed to be a “Change in Law” regardless of the date enacted,
adopted, issued or implemented.
“Closing Date” means June 1, 2012.

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“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and the regulations promulgated and rulings issued thereunder.
“Commitment” means (a) with respect to the Lenders, the aggregate amount of the
Commitments of the Lenders as set forth on Schedule I, and (b) with respect to a
Lender, the amount of the Commitment of such Lender as set forth on Schedule I.
“Commitments” means the total of the Lenders' Commitments.
“Compliance Certificate” means a certificate substantially in the form of
Exhibit G.
“Consolidated” means, when used with reference to any accounting term, the
amount described by such accounting term, determined on a consolidated basis in
accordance with GAAP, after elimination of intercompany items.
“Consolidated Total Capitalization” means the sum of (a) Indebtedness of the
Borrower and its Consolidated Subsidiaries, without duplication, plus (b) the
sum of the Capital Stock (excluding treasury stock and capital stock subscribed
for and unissued) and surplus (including earned surplus, capital surplus,
translation adjustment and the balance of the current profit and loss account
not transferred to surplus) accounts of the Borrower and its Consolidated
Subsidiaries appearing on a consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries, in each case prepared as of the date of determination
in accordance with GAAP consistent with those applied in the preparation of the
financial statements referred to in Section 4.01(f), after eliminating all
intercompany transactions and all amounts properly attributable to minority
interests, if any, in the stock and surplus of Subsidiaries.
“Continuing Director” means, with respect to any Person as of any date of
determination, any member of the board of directors of such Person who (a) was a
member of such board of directors on the Closing Date, or (b) was nominated for
election or elected to such board of directors with the approval of a majority
of the Continuing Directors who were members of such board at the time of such
nomination or election.
“Convert”, “Conversion” and “Converted” each refers to a conversion of a Loan of
one Type into a Loan of another Type pursuant to Section 2.13 or the selection
of a new, or the renewal of the same, Interest Period for a LIBOR Rate Loan
pursuant to Section 2.13.
“Credit Party” means the Administrative Agent or any other Lender.
“Debt Ratings” means the ratings determined by a Rating Agency and shall be
based upon the availability of such ratings as follows:
a.The senior unsecured non-credit enhanced debt ratings of Borrower by each
Rating Agency, subject to subsection (A) below.

b.If one, but not both, of the Rating Agencies has a senior unsecured non-credit
enhanced debt rating of Borrower, then the senior unsecured non-credit enhanced
debt rating of the Borrower by either Moody's or S&P, as applicable.

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c.If neither Rating Agency has a senior unsecured non-credit enhanced debt
rating of Borrower, then both the issuer rating assigned to the Borrower by
Moody's and the issuer credit rating assigned to the Borrower by S&P, subject to
subsection (A) below.

d.If none of (a), (b), or (c) above are available, then either the issuer rating
assigned to the Borrower by Moody's or the issuer credit rating assigned to the
Borrower by S&P, as applicable.

e.If none of the above are available, then the Debt Rating (as defined in the
SJG Credit Agreement) of South Jersey Gas, subject to subsection (B) below.

f.For purposes of the foregoing: (A) if the Debt Ratings of the Borrower
established or deemed to have been established by the two Rating Agencies shall
fall within different “Tiers” on the chart set forth in the definition of
Applicable Margin, then (i) in any case where the ratings differential is one
tier, the higher rating will apply and (ii) in any case where the ratings
differential is two tiers or more, the tier one below the higher of the two will
apply; and (B) if the Debt Rating is based upon the Debt Rating (as defined in
the SJG Credit Agreement) of South Jersey Gas pursuant to (e) above, the
applicable Tier shall be one Tier below such Debt Rating.
Notwithstanding anything herein to the contrary, if the rating system of either
Rating Agency shall change, or if either Rating Agency shall cease to be in the
business of rating corporate debt obligations, the Borrower, the Administrative
Agent and the Lenders shall negotiate in good faith to amend the definition of
Debt Ratings to reflect such changed rating system or the unavailability of
ratings from either or both Rating Agencies, and, pending the effectiveness of
any such amendment, the applicable tier shall be determined by reference to the
Debt Ratings of the Borrower most recently in effect prior to such change or
cessation.

“Debtor Relief Laws” means the Bankruptcy Code of the United States of America,
and all other liquidation, conservatorship, bankruptcy, assignment for the
benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect.

“Default” means any event or condition that would constitute an Event of Default
but for the requirement that notice be given or time elapse or both.

“Default Rate” means a per annum rate equal to 2% greater than the Applicable
Rate.

“Defaulting Lender” means any Lender that (a) has failed, within two (2)
Business Days of the date required to be funded or paid, to (i) fund any portion
of its Loans or (ii) pay over to any Credit Party any other amount required to
be paid by it hereunder, unless, in the case of clause (i) above, such Lender
notifies the Administrative Agent in writing that such failure is the result of
such Lender's good faith determination that a condition precedent to funding
(specifically identified and including the particular default, if any) has not
been satisfied, (b) has notified the Borrower or any Credit Party in writing, or
has made a public statement to the effect, that it does not intend or expect to
comply with any of its funding obligations under this Agreement (unless such
writing or public statement indicates that

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such position is based on such Lender's good faith determination that a
condition precedent (specifically identified and including the particular
default, if any) to funding a loan under this Agreement cannot be satisfied) or
generally under other agreements in which it commits to extend credit, (c) has
failed, within three (3) Business Days after request by a Credit Party, acting
in good faith, to provide a certification in writing from an authorized officer
of such Lender that it will comply with its obligations (and is financially able
to meet such obligations) to fund prospective Loans under this Agreement,
provided that such Lender shall cease to be a Defaulting Lender pursuant to this
clause (c) upon such Credit Party's receipt of such certification in form and
substance satisfactory to it and the Administrative Agent, or (d) has become the
subject of a Bankruptcy Event.

“Disclosure Documents” means the Borrower's Annual Report on Form 10‑K for the
year ended December 31, 2011 and any Current Report on Form 8‑K delivered to the
Lenders at least three (3) Business Days prior to the date of this Agreement.

“Dollar” or “$” means dollars in lawful currency of the United States of
America.
“Electronic Means” shall have the meaning set forth in Section 6.03.
“Employee Benefit Plan” means any employee benefit plan within the meaning of
Section 3(3) of ERISA that is maintained for employees of the Borrower or, in
the case of a Pension Plan or a Multiemployer Plan, maintained or contributed to
by the Borrower or any current or former ERISA Affiliate.
“Environmental Claims” means any and all administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, accusations,
allegations, notices of noncompliance or violation, investigations (other than
internal reports prepared by any Person in the ordinary course of business and
not in response to any third party action or request of any kind) or proceedings
relating in any way to any actual or alleged violation of or liability under any
Environmental Law or relating to any permit issued, or any approval given, under
any such Environmental Law, including, without limitation, any and all claims by
Governmental Authorities for enforcement, cleanup, removal, response, remedial
or other actions or damages, contribution, indemnification cost recovery,
compensation or injunctive relief resulting from Hazardous Materials or arising
from alleged injury or threat of injury to human health or the environment.
“Environmental Judgments and Orders” means all judgments, decrees or orders
arising from or in any way associated with any Environmental Requirements,
whether or not entered upon consent or written agreements with an Environmental
Authority or other entity, and whether or not incorporated in a judgment, decree
or order.
“Environmental Laws” means any and all federal, foreign, state, provincial and
local laws, statutes, ordinances, codes, rules, standards and regulations,
permits, licenses, approvals, interpretations and orders of courts or
Governmental Authorities, relating to the protection of the environment,
including, but not limited to, requirements pertaining to the manufacture,
processing, distribution, use, treatment, storage, disposal, transportation,
handling, reporting, licensing, permitting, investigation or remediation of
Hazardous Materials.
“Environmental Liabilities” means any liabilities, whether accrued, contingent
or

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otherwise, arising from and in any way associated with any Environmental
Requirements.
“Environmental Notices” means notice from any Governmental Authority of possible
or alleged noncompliance with or liability under any Environmental Requirement,
including without limitation any complaints, citations, demands or requests from
any Governmental Authority for correction of any violation of any Environmental
Requirement or any investigations concerning any violation of any Environmental
Requirement.
“Environmental Proceedings” means any judicial or administrative proceedings
arising from or in any way associated with any Environmental Requirement.
“Environmental Releases” means releases as defined in CERCLA or under any
applicable state or local environmental law or regulation.
“Environmental Requirement” means any legal requirement relating to the
environment and applicable to the Borrower or its properties, including but not
limited to any such requirement under CERCLA or similar state legislation and
all federal, state and local laws, ordinances, regulations, orders, writs,
decrees and common law.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.
“ERISA Affiliate” means any Person who together with the Borrower or any of its
Subsidiaries is treated as a single employer within the meaning of Section
414(b), (c), (m) or (o) of the Code.
“Eurocurrency Liabilities” has the meaning specified in Regulation D of the
Board of Governors of the Federal Reserve System, as in effect from time to
time.
“Event of Default” has the meaning assigned to that term in Section 7.01.
“Exchange Act” means the Securities Exchange Act of 1934, as amended from time
to time.
“Excluded Taxes” means, with respect to the Administrative Agent, any Lender or
any other recipient of any payment to be made by or on account of any obligation
of the Borrower hereunder, (a) Taxes imposed on or measured by its overall net
income (however denominated) and gross receipts, capital stock Taxes or
franchise Taxes imposed on it (in lieu of net income Taxes), by the jurisdiction
(or any political subdivision thereof) under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its Applicable Lending Office is located, (b) any branch
profits Taxes imposed by the United States or any similar Tax imposed by any
other jurisdiction in which the Borrower is located, (c) in the case of a
Foreign Lender (other than an assignee pursuant to a request by the Borrower
under Section 2.21(b)), any withholding Tax that is imposed on amounts payable
to such Foreign Lender at the time such Foreign Lender becomes a party hereto
(or designates a new Applicable Lending Office) or is attributable to such
Foreign Lender's failure or inability (other than as a result of a Change in
Law) to comply with Section 2.17(e), except to the extent that such Foreign
Lender (or its assignor, if any) was entitled, at the time of designation of a
new Applicable Lending Office (or assignment), to receive additional amounts
from the Borrower with respect to

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such withholding Tax pursuant to Section 2.17(a), and (d) any Taxes imposed
under FATCA.
“FASB ASC” means the Accounting Standards Codification of the Financial
Accounting Standards Board.
“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with) and any current or future
regulations or official interpretations thereof.
“Federal Funds Rate” means, for any day, the weighted average (rounded upwards,
if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average (rounded upwards, if necessary, to the next 1/100
of 1%) of the quotations for such day for such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by it.
“Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is resident for tax purposes.
For purposes of this definition, the United States, each state thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
“Fund” means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
“GAAP” means generally accepted accounting principles in the United States set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.
“Governmental Action” means all authorizations, consents, approvals, waivers,
exceptions, variances, orders, licenses, exemptions, publications, filings,
notices to and declarations of or with any Governmental Authority, required to
be made by Borrower, other than routine reporting requirements the failure to
comply with which will not affect the validity or enforceability of this
Agreement or any other Loan Document or have a material adverse effect on the
transactions contemplated by this Agreement or any other Loan Document.
“Governmental Authority” means any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
“Hazardous Materials” means any substances or materials (a) which are or become
defined as hazardous wastes, hazardous substances, pollutants, contaminants,
chemical substances or mixtures or toxic substances under any Environmental Law,
(b) which are

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toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic,
mutagenic or otherwise harmful to human health or the environment and are or
become regulated by any Governmental Authority having authority over Borrower or
Borrower's operations, (c) the presence of which require investigation or
remediation under any Environmental Law or common law, (d) the discharge or
emission or release of which requires a permit or license under any
Environmental Law or other governmental approval, (e) which are deemed to
constitute a nuisance or a trespass which pose a health or safety hazard to
Persons or neighboring properties, (f) which consist of underground or
aboveground storage tanks, whether empty, filled or partially filled with any
substance, or (g) which contain, without limitation, asbestos, polychlorinated
biphenyls, urea formaldehyde foam insulation, petroleum hydrocarbons, petroleum
derived substances or waste, crude oil, nuclear fuel, natural gas or synthetic
gas.
“Hedging Obligations” means, with respect to any Person, the obligations of such
Person under any interest rate or currency swap agreement, interest rate or
currency future agreement, interest rate collar agreement, swap agreement (as
defined in 11 U.S.C. § 101), interest rate or currency hedge agreement, and any
put, call or other agreement or arrangement designed to protect such Person
against fluctuations in interest rates or currency exchange rates.
“Indebtedness” means, for any Person, all obligations of such Person which in
accordance with GAAP should be classified on a balance sheet of such Person as
liabilities of such Person, and in any event shall include, without duplication,
all (a) indebtedness for borrowed money, (b) obligations evidenced by bonds,
debentures, notes or other similar instruments, (c) obligations to pay the
deferred purchase price of property or services, (d) obligations as lessee under
leases which shall have been or should be, in accordance with GAAP, recorded as
capital leases, (d) obligations as lessee under operating leases which have been
recorded as off-balance sheet liabilities, (f) obligations under Hedging
Obligations, (g) reimbursement obligations (contingent or otherwise) in respect
of outstanding letters of credit, (h) indebtedness of the type referred to in
clauses (a) through (f) above secured by (or for which the holder of such
indebtedness has an existing right, contingent or otherwise, to be secured by)
any lien or encumbrance on, or security interest in, property (including,
without limitation, accounts and contract rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of such
indebtedness, and (i) obligations under direct or indirect guaranties in respect
of, and obligations (contingent or otherwise) to purchase or otherwise acquire,
or otherwise to assure a creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in clauses (a) through (g) above.
For the avoidance of doubt and notwithstanding anything to the contrary set
forth above, Permitted Commodity Hedging Obligations and Capital Stock,
including Capital Stock having a preferred interest, shall not constitute
Indebtedness for purposes of this Agreement.
“Indemnified Taxes” means Taxes, imposed on or with respect to any payment made
by or on account of any obligation of the Borrower under any Loan Document,
other than Excluded Taxes.
“Indemnitee” has the meaning assigned to that term in Section 10.05.
“Information” has the meaning assigned to that term in Section 10.16.

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“Informational Materials” has the meaning assigned to that term in Section 6.03.
“Interest Period” has the meaning assigned to that term in Section 2.10(b).
“JPMorgan” has the meaning assigned to that term in the preamble hereto.
“Lenders” has the meaning assigned to that term in the preamble hereto, and, in
each case, includes their respective successors and permitted assigns.
“Lending Office” means, as to each Lender, its office located at its address set
forth on Schedule I hereof (or identified on Schedule I hereof as its “Domestic
Lending Office”) or such other office as such Lender may hereafter designate as
its Lending Office by notice to the Borrower, and as to any assignee, the office
of the assignee designated as such in its Assignment and Assumption or such
other office as the assignee may designate as its Lending Office.
“LIBOR” means, with respect to any LIBOR Rate Loan for any Interest Period, the
rate appearing on Reuters Screen LIBOR01 Page (or on any successor or substitute
page of such service, or any successor to or substitute for such service,
providing rate quotations comparable to those currently provided on such page of
such service, as determined by the Administrative Agent from time to time for
purposes of providing quotations of interest rates applicable to deposits in
Dollars in the London interbank market) at approximately 11:00 a.m., London
time, two (2) Business Days prior to the commencement of such Interest Period,
as the rate for deposits in Dollars with a maturity comparable to such Interest
Period. In the event that such rate is not available at such time for any
reason, then “LIBOR” with respect to such LIBOR Rate Loan for such Interest
Period shall be the rate at which deposits in Dollars in an amount equal to
$5,000,000 and for a maturity comparable to such Interest Period are offered by
the principal London office of the Administrative Agent in immediately available
funds in the London interbank market at approximately 11:00 a.m., London time,
two (2) Business Days prior to the commencement of such Interest Period.
“LIBOR Rate” means, with respect to any LIBOR Rate Loan for any Interest Period,
an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of
1%) equal to (a) LIBOR for such Interest Period multiplied by (b) the Statutory
Reserve Rate.
“LIBOR Rate Loan” means all Loans, or portions thereof, bearing interest based
on the LIBOR Rate (other than a Base Rate Loan for which interest is determined
by reference to LIBOR).
“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such asset. For the
purposes of this Agreement, a Person or any of its Subsidiaries shall be deemed
to own, subject to a Lien, any asset that it has acquired or holds subject to
the interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such asset.
“Loan Documents” means this Agreement, the Notes and any other document
evidencing, relating to or securing any Loan, and any other document or
instrument delivered from time to time in connection with this Agreement or the
Notes, as such documents and instruments may be amended or supplemented from
time to time.

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“Loans” means the loans made by the Lenders pursuant to this Agreement.
“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, liabilities (actual or contingent), operations, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries on a consolidated
basis, taken as a whole, (b) the ability of the Borrower to perform its
obligations under this Agreement or any of the other Loan Documents to which the
Borrower is a party or (c) the validity or enforceability against the Borrower
of this Agreement, any of the other Loan Documents to which the Borrower is a
party, or the rights and remedies of the Administrative Agent and the Lenders
hereunder or thereunder.
“Maturity Date” means November 1, 2013.
“MNPI” has the meaning assigned to that term in Section 6.03.
“Moody's” means Moody's Investors Service, Inc., or any successor thereto.
“Multiemployer Plan” means a “Multiemployer plan” as defined in Section
4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is making, or
is accruing an obligation to make, or has accrued an obligation to make
contributions within the preceding five (5) years.
“Note” means the promissory notes of the Borrower in favor of each Lender
evidencing the Term Loans made to the Borrower and substantially in the form of
Exhibit A, as such promissory notes may be amended, modified, supplemented or
replaced from time to time.
“Notice of Account Designation” has the meaning assigned to that term in Section
2.03(c).
“Notice of Borrowing” has the meaning assigned to that term in Section 2.03(a).
“Notice of Conversion/Continuation” has the meaning assigned to that term in
Section 2.13.
“Obligations” means, in each case, whether now in existence or hereafter
arising: (a) the principal of and interest on (including interest accruing after
the filing of any bankruptcy or similar petition) the Loans, (b) all payment and
other obligations owing by the Borrower to any Lender or the Administrative
Agent under any other agreement to which a Lender is a party (or any Affiliate
of a Lender) which is related to and permitted under this Agreement, any of the
other Loan Documents, and (c) all other fees and commissions (including
attorney's fees), charges, indebtedness, loans, liabilities, financial
accommodations, obligations, covenants and duties owing by the Borrower or any
Subsidiary to the Lenders, or the Administrative Agent, in each case under or in
respect of this Agreement, any Note, any of the other Loan Documents of every
kind, nature and description, direct or indirect, absolute or contingent, due or
to become due, contractual or tortious, liquidated or unliquidated, and whether
or not evidenced by any note, and whether or not for the payment of money under
or in respect of this Agreement, any Note or any of the other Loan Documents.

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“OFAC” has the meaning assigned to that term in Section 5.01(t).
“Other Taxes” means all stamp or documentary taxes or any other excise or
property taxes, charges or similar levies imposed or enacted after the date
hereof, payable by the Administrative Agent or a Lender, arising from any
payment made hereunder or under any other Loan Document or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement or any
other Loan Document, other than taxes owed directly by the Borrower to any
Governmental Authority, other than any of the foregoing that constitute Excluded
Taxes.
“Participant” has the meaning assigned to that term in Section 10.09(d).
“Participant Register” has the meaning assigned to that term in Section
10.09(d).
“Patriot Act” has the meaning assigned to that term in Section 5.01(t).
“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.
“Pension Plan” means any Employee Benefit Plan, other than a Multiemployer Plan,
which is subject to the provisions of Title IV of ERISA or Section 412 of the
Code and which (a) is maintained for the employees of the Borrower or any ERISA
Affiliate or (b) has at any time within the preceding six (6) years been
maintained for the employees of the Borrower or any current or former ERISA
Affiliates.
“Permitted Commodity Hedging Obligations” means obligations of the Borrower with
respect to commodity agreements or other similar agreements or arrangements
entered into in the ordinary course of business designed to protect against, or
mitigate risks with respect to, fluctuations of commodity prices to which the
Borrower or any Subsidiary is exposed to in the conduct of its business so long
as (a) the management of the Borrower has determined that entering into such
agreements or arrangements are bona fide hedging activities which comply with
the Borrower's risk management policies and (b) such agreements or arrangements
are not entered into for speculative purposes and are not of a speculative
nature.
“Permitted Indebtedness” means any of the following:
a.Indebtedness of the Borrower under (i) the Revolving Credit Facility, (ii)
that certain Reimbursement Agreement, dated March 15, 2012, among the Borrower,
the banks party thereto, and JPMorgan as issuing bank and administrative agent,
relating to the 2001A Bonds, (iii) that certain Reimbursement Agreement, dated
March 15, 2012, among the Borrower, the banks party thereto, and JPMorgan as
issuing bank and administrative agent, relating to the 2001B Bonds, (iv) that
certain Reimbursement Agreement, dated March 15, 2012, among the Borrower, the
banks party thereto, and JPMorgan as issuing bank and administrative agent,
relating to the 2006A Bonds and (v) that certain Letter of Credit Reimbursement
Agreement, dated December 20, 2007, among the Borrower, the lenders party
thereto, and JPMorgan as issuing lender and administrative agent, as such
agreements may be amended from time to time;

b.Indebtedness under this Agreement;

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c.Indebtedness (other than the type described in clause (d) below) of the
Borrower and its Subsidiaries (other than South Jersey Gas) so long as before
and immediately after the incurrence of such Indebtedness, the Borrower is in
compliance with Section 6.04;

d.Indebtedness of the Borrower under Hedging Obligations covering a notional
amount not to exceed the face amount of outstanding Indebtedness;

e.Indebtedness of South Jersey Gas, under (i) that certain Four-Year Revolving
Credit Agreement, dated as of May 5, 2011, among South Jersey Gas, the lenders
party thereto, and Wells Fargo Bank, National Association, as administrative
agent on behalf of said lenders (as may be amended from time to time, the “SJG
Credit Agreement”), (ii) that certain Reimbursement Agreement, dated as of
August 28, 2008, as may be amended from time to time, between South Jersey Gas
and JPMorgan and (iii) indebtedness under South Jersey Gas's $200,000,000
commercial paper program;

f.Indebtedness of South Jersey Gas under the First Mortgage Notes (as defined in
the SJG Credit Agreement) existing as of the Closing Date, and subsequent First
Mortgage Notes, so long as before and immediately after the incurrence of such
Indebtedness, South Jersey Gas is in compliance with Section 6.04 of the SJG
Credit Agreement;

g.Indebtedness (other than the type described in clause (h) below) of South
Jersey Gas, so long as before and immediately after the incurrence of such
Indebtedness, South Jersey Gas is in compliance with Section 6.04 of the SJG
Credit Agreement;

h.Indebtedness of South Jersey Gas under Hedging Obligations covering a notional
amount not to exceed the face amount of such outstanding Indebtedness; and

i.Permitted Commodity Hedging Obligations.

“Permitted Investments” means, collectively, (a) marketable direct obligations
issued or unconditionally guaranteed by the United States or any agency thereof
maturing within one hundred twenty (120) days from the date of acquisition
thereof, (b) commercial paper maturing no more than one hundred twenty (120)
days from the date of creation thereof and having the highest rating obtainable
from either S&P or Moody's, (c) certificates of deposit or money market deposit
maturing no more than one hundred twenty (120) days from the date of creation
thereof issued by commercial banks incorporated under the laws of the United
States, each having combined capital, surplus and undivided profits of not less
than $500,000,000 and having a rating in the “A” category or better by a
nationally recognized rating agency; provided that the aggregate amount invested
in such certificates of deposit shall not at any time exceed $5,000,000 for any
one such deposit and $10,000,000 for any one such bank, or (d) time deposits
maturing no more than thirty (30) days from the date of creation thereof with
commercial banks or savings banks or savings and loan associations each having
membership either in the FDIC or the deposits of which are insured by the FDIC
and in amounts not exceeding the maximum amounts of insurance thereunder.

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“Permitted Liens” means, with respect to any Person, any of the following:
a.Liens for taxes, assessments or governmental charges not delinquent or being
contested in good faith and by appropriate proceedings and for which adequate
reserves in accordance with GAAP are maintained on such Person's books;

b.Liens arising out of deposits in connection with workers' compensation,
unemployment insurance, old age pensions or other social security or retirement
benefits legislation;

c.Deposits or pledges to secure bids, tenders, contracts (other than contracts
for the payment of money), leases, statutory obligations, surety and appeal
bonds, and other obligations of like nature arising in the ordinary course of
such Person's business, including, without limitation, deposits and pledges of
funds securing Permitted Commodity Hedging Obligations;

d.Liens imposed by law, such as mechanics', workers', materialmen's, carriers'
or other like liens arising in the ordinary course of such Person's business
which secure the payment of obligations which are not past due or which are
being diligently contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with GAAP are maintained on such Person's
books;

e.Rights of way, zoning restrictions, easements and similar encumbrances
affecting such Person's real property which do not materially interfere with the
use of such property;

f.Liens securing Permitted Indebtedness of the type described in clauses (c) and
(d) of the definition of “Permitted Indebtedness,” not in excess of $25,000,000
in the aggregate;

g.Liens securing Permitted Indebtedness of the type described in clause (f) of
the definition of “Permitted Indebtedness”;

h.Liens securing Permitted Indebtedness of the type described in clause (g) of
the definition of “Permitted Indebtedness,” not in excess of $20,000,000 in the
aggregate; and

i.Purchase money security interests for the purchase of equipment to be used in
such Person's business, encumbering only the equipment so purchased, and the
proceeds thereof, and which secures only the purchase-money Indebtedness
incurred to acquire the equipment so purchased, which Indebtedness qualifies as
Permitted Indebtedness.

“Person” means an individual, partnership, corporation (including, without
limitation, a business trust), joint stock company, limited liability company,
trust, unincorporated association, joint venture or other entity, or a
government or any political subdivision or agency thereof.
“Prime Rate” means the rate of interest per annum publicly announced from time
to time by JPMorgan Chase Bank, N.A. as its prime rate in effect at its
principal office in

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New York City; each change in the Prime Rate shall be effective from and
including the date such change is publicly announced as being effective.
“Private Lenders” means any Lenders that are not Public Lenders.
“Public Lenders” has the meaning assigned to that term in Section 6.03.
“Rating Agency” means S&P and/or Moody's.
“Register” has the meaning assigned to that term in Section 10.09(c).
“Regulatory Change” means, with respect to any Lender, any change effective
after the Closing Date in Applicable Law (including without limitation,
Regulation D of the Board of Governors of the Federal Reserve System) or the
adoption or making after such date of any interpretation, directive or request
applying to a class of banks, including such Lender, of or under any Applicable
Law (whether or not having the force of law and whether or not failure to comply
therewith would be unlawful) by any Governmental Authority or monetary authority
charged with the interpretation or administration thereof or compliance by any
Lender with any request or directive regarding capital adequacy including but
not limited to all requests, rules, guidelines or directives promulgated by the
Bank for International Settlements, the Basel Committee on Banking Supervision
(or any successor or similar authority) or the United States or foreign
regulatory authorities, in each case pursuant to Basel III;  provided, however,
that notwithstanding anything herein to the contrary, the Dodd-Frank Wall Street
Reform and Consumer Protection Act and all requests, rules, guidelines or
directives thereunder or issued in connection therewith, shall be deemed to be a
“Regulatory Change”, regardless of the date enacted, adopted or issued.
“Related Parties” means, with respect to any Person, such Person's Affiliates
and the partners, directors, officers, employees, agents and advisors of such
Person and of such Person's Affiliates.
“Required Lenders” means, at any time, Lenders having Loans representing at
least 50% of the sum of the aggregate outstanding principal amount of all of the
Loans at such time; provided that the Loans held or deemed held by any
Defaulting Lender shall be excluded for purposes of making a determination of
Required Lenders.
“Revolving Credit Facility” means that certain Four-Year Revolving Credit
Agreement, dated as of April 29, 2011, among the Borrower, the lenders referred
to therein and Wells Fargo Bank, National Association, as administrative agent.
“S&P” means Standard & Poor's Ratings Services, a division of the McGraw‑Hill
Companies, Inc., or any successor thereto.
“Significant Subsidiary” means, with respect to any Person, a Subsidiary which
meets any of the following conditions:
a.such Person's and its other Subsidiaries' investments in and advances to the
Subsidiary exceed 10% of the total assets of such Person and its Consolidated
Subsidiaries as of the end of the most recently completed fiscal quarter;

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b.such Person's and its other Subsidiaries' proportionate share (as determined
by ownership interests) of the total assets (after intercompany eliminations) of
the Subsidiary exceeds 10% of the total assets of such Person and its
Consolidated Subsidiaries as of the end of the most recently completed fiscal
quarter;
c.such Person's and its other Subsidiaries' proportionate share (as determined
by ownership interests) in the income from continuing operations before income
taxes, extraordinary items and cumulative effect of changes in accounting
principles of the Subsidiary exceeds 10% of such income of such Person and its
Consolidated Subsidiaries for the most recently completed fiscal quarter; or
d.with respect to the Borrower, such Subsidiaries shall include, without
limitation, South Jersey Gas.
“SJG Credit Agreement” shall have the meaning set forth in the definition of
Permitted Indebtedness.
“Solvent” means, with respect to any Person, that such Person (a) has capital
sufficient to carry on its business and transactions and all business and
transactions in which it is about to engage and is able to pay its debts as they
mature, (b) owns property having a value, both at fair valuation and at present
fair saleable value, greater than the amount required to pay its probable
liabilities (including contingencies), and (c) does not believe that it will
incur debts or liabilities beyond its ability to pay such debts or liabilities
as they mature.
“South Jersey Gas” means South Jersey Gas Company, a New Jersey corporation.
“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject for
eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in
Regulation D of the Board). Such reserve percentages shall include those imposed
pursuant to such Regulation D of the Board. LIBOR Rate Loans shall be deemed to
constitute eurocurrency funding and to be subject to such reserve requirements
without benefit of or credit for proration, exemptions or offsets that may be
available from time to time to any Lender under such Regulation D of the Board
or any comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
“Subsidiary” means, with respect to any Person, any corporation or
unincorporated entity of which more than 50% of the outstanding capital stock
(or comparable interest) having ordinary voting power (irrespective of whether
at the time capital stock (or comparable interest) of any other class or classes
of such corporation or entity shall or might have voting power upon the
occurrence of any contingency) is at the time directly or indirectly owned by
said Person (whether directly or through one of more other Subsidiaries). In the
case of an unincorporated entity, a Person shall be deemed to have more than 50%
of interests having ordinary voting power only if such Person's vote in respect
of such interests comprises more than 50% of the total voting power of all such
interests in the unincorporated entity.

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“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings, assessments, fees or other charges imposed by any Governmental
Authority, including any interest, additions to tax or penalties applicable
thereto.
“Term Loans” means those Base Rate Loans and LIBOR Rate Loans made pursuant to
Section 2.01.
“Termination Event” means except for any such event or condition that could not
reasonably be expected to have a Material Adverse Effect: (a) a “Reportable
Event” described in Section 4043 of ERISA for which the notice requirement has
not been waived by the PBGC, or (b) the withdrawal of the Borrower or any ERISA
Affiliate from a Pension Plan during a plan year in which it was a “substantial
employer” as defined in Section 4001(a)(2) of ERISA, or (c) the termination of a
Pension Plan, the filing of a notice of intent to terminate a Pension Plan or
the treatment of a Pension Plan amendment as a termination, under Section 4041
of ERISA, if the plan assets are not sufficient to pay all plan liabilities, or
(d) the institution of proceedings to terminate, or the appointment of a trustee
with respect to, any Pension Plan by the PBGC, or (e) any other event or
condition which would constitute grounds under Section 4042(a) of ERISA for the
termination of, or the appointment of a trustee to administer, any Pension Plan,
or (f) the imposition of a Lien pursuant to Section 430 of the Code or Section
303 of ERISA, or (g) the partial or complete withdrawal of the Borrower or any
ERISA Affiliate from a Multiemployer Plan if withdrawal liability is asserted by
such plan, or (h) any event or condition which results in the reorganization or
insolvency of a Multiemployer Plan under Sections 4241 or 4245 of ERISA, or
(i) any event or condition which results in the termination of a Multiemployer
Plan under Section 4041A of ERISA or the institution by PBGC of proceedings to
terminate a Multiemployer Plan under Section 4042 of ERISA.
“2001A Bonds” means the Thermal Energy Facilities Revenue Bonds (Marina Energy,
LLC - 2001 Project), Series A in the aggregate principal amount of $20,000,000,
issued pursuant to an Indenture dated as of September 1, 2001, as such Indenture
has been amended or supplemented from time to time.
“2001B Bonds” means the Thermal Energy Facilities Federally Taxable Revenue
Bonds (Marina Energy, LLC - 2001 Project), Series B in the aggregate principal
amount of $25,000,000, issued pursuant to an Indenture dated as of September 1,
2001, as such Indenture has been amended or supplemented from time to time.
“2006A Bonds” means the Thermal Energy Facilities Revenue Bonds (Marina Energy
LLC Project), Series 2006A in the aggregate principal amount of $16,400,000,
issued pursuant to an Indenture dated as of March 1, 2006, as such Indenture has
been amended or supplemented from time to time.
“Type” means a type of Loan, being either a LIBOR Rate Loan or a Base Rate Loan,
as applicable.
“UCC” means the Uniform Commercial Code as in effect in the State of New York,
as amended or modified from time to time.
Section 1.02 Computation of Time Periods. In this Agreement, in the computation
of a period of time from a specified date to a later specified date, the word
“from” means “from

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and including” and the words “to” and “until” each means “to but excluding” and
the word “through” means “to and including”.

Section 1.03 Accounting Terms and Determinations. All accounting terms not
specifically or completely defined herein shall be construed in conformity with,
and all financial data (including financial ratios and other financial
calculations) required to be submitted pursuant to this Agreement shall be
prepared in conformity with GAAP, applied on a consistent basis, as in effect
from time to time and in a manner consistent with that used in preparing the
audited financial statements required by Section 6.03, except as otherwise
specifically prescribed herein. Notwithstanding any other provision contained
herein, all terms of an accounting or financial nature used herein shall be
construed, and all computations of amounts and ratios referred to herein shall
be made, without giving effect to any election under Accounting Standards
Codification 825-10-25 (previously referred to as Statement of Financial
Accounting Standards 159) (or any other Accounting Standards Codification or
Financial Accounting Standard having a similar result or effect) to value any
Indebtedness or other liabilities of the Borrower or any Subsidiary at “fair
value,” as defined therein.

a.Any financial ratios required to be maintained by the Borrower pursuant to
this Agreement shall be calculated by dividing the appropriate component by the
other component, carrying the result to one place more than the number of places
by which such ratio or percentage is expressed herein and rounding the result up
or down to the nearest number (with a rounding-up if there is no nearest
number).

b.Unless otherwise expressly provided herein, (i) references to formation
documents, governing documents, agreements (including the Loan Documents) and
other contractual instruments shall be deemed to include all subsequent
amendments, restatements, extensions, supplements and other modifications
thereto, but only to the extent that such amendments, restatements, extensions,
supplements and other modifications are not prohibited by any Loan Document; and
(ii) references to any Applicable Law shall include all statutory and regulatory
provisions consolidating, amending, replacing, supplementing or interpreting
such Applicable Law.

Section 1.04 Terminology. With reference to this Agreement and each other Loan
Document, unless otherwise specified herein or in such other Loan Document:
(a) the definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined; (b) whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter forms;
(c) the words “include,” “includes” and “including” shall be deemed to be
followed by the phrase “without limitation”; (d) the word “will” shall be
construed to have the same meaning and effect as the word “shall”; (e) any
reference herein to any Person shall be construed to include such Person's
successors and assigns; (f) the words “herein,” “hereof” and “hereunder,” and
words of similar import, shall be construed to refer to this Agreement in its
entirety and not to any particular provision hereof; (g) all references herein
to “Articles,” “Sections,” “Exhibits” and “Schedules” shall be construed to
refer to Articles and Sections of, and Exhibits and Schedules to, this
Agreement; (h) the words “asset” and “property” shall be construed to have the
same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, securities, accounts and contract rights;
(i) the term “documents” includes any and all instruments, documents,
agreements, certificates, notices, reports, financial statements and other
writings, however evidenced, whether in physical or electronic form; and
(j) Section

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headings herein and in the other Loan Documents are included for convenience of
reference only and shall not affect the interpretation of this Agreement or any
other Loan Document.

Section 1.05 Use of Defined Terms. All terms defined in this Agreement shall
have the same meanings when used in any of the other Loan Documents, unless
otherwise defined therein or unless the context shall otherwise require.

[End of Article I]

ARTICLE II
LOANS

Section 2.01 Term Loans.
a.Subject to the terms and conditions of this Agreement, and in reliance upon
the representations and warranties set forth herein, each Lender severally
agrees to make its Applicable Percentage of Term Loans to the Borrower on the
Closing Date, as requested by the Borrower in accordance with the terms of
Section 2.03(a); provided, that (i) the aggregate principal amount of all Term
Loans shall not exceed the Commitments of the Lenders; and (ii) the aggregate
principal amount of each Lender's Term Loans shall not exceed such Lender's
Commitment. The Term Loans of each Lender shall be in a principal amount equal
to such Lender's Applicable Percentage multiplied by the aggregate principal
amount of Term Loans being made on the Closing Date. Amounts repaid or prepaid
in respect of the Term Loans may not be reborrowed.

Section 2.02 [Reserved].

Section 2.03 Procedure for Advances of Loans.
a.     Requests for Borrowing. To request a borrowing, the Borrower shall notify
the Administrative Agent of such request by telephone (a) in the case of a
borrowing of LIBOR Rate Loans, not later than 11:00 a.m., New York City time,
three (3) Business Days before the date of the proposed borrowing or (b) in the
case of a borrowing of Base Rate Loans, not later than 11:00 a.m., New York City
time, one (1) Business Day before the date of the proposed borrowing. Each such
telephonic borrowing request shall be irrevocable and shall be confirmed
promptly by hand delivery or telecopy to the Administrative Agent of a written
notice in the form attached hereto as Exhibit B (a “Notice of Borrowing”) and
signed by the Borrower. Each such telephonic and written Notice of Borrowing
shall specify the following information:

i.the aggregate amount of the requested borrowing;
ii.the date of such borrowing, which shall be a Business Day;
iii.whether such borrowing is to be comprised of Base Rate Loans or a LIBOR Rate
Loans;    
iv.in the case of LIBOR Rate Loans, the initial Interest Period to be applicable
thereto, which shall be a period contemplated by the definition of the term
“Interest Period”; and
v.the location and number of the Borrower's account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.07.

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If no election as to the type of borrowing is specified, then the requested
borrowing shall be comprised of Base Rate Loans. If no Interest Period is
specified with respect to any requested borrowing comprised of LIBOR Rate Loans,
then the Borrower shall be deemed to have selected an Interest Period of one
month's duration. Promptly following receipt of a Notice of Borrowing in
accordance with this Section, the Administrative Agent shall advise each Lender
of the details thereof and of the amount of such Lender's Loan to be made as
part of the requested Borrowing.
b.    Each Notice of Borrowing shall be irrevocable and binding on the Borrower.
In the case of any Borrowing that the related Notice of Borrowing specifies is
to comprise LIBOR Rate Loans, the Borrower shall indemnify the applicable Lender
against any loss, cost or expense incurred by such Lender as a result of any
failure of the Borrower to fulfill on or before the date specified in such
Notice of Borrowing for such Loans, the applicable conditions set forth in
Article IV, including, without limitation, any loss (including loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
redeployment of deposits or other funds acquired by such Lender as part of such
Borrowing.

c.    Disbursement of Loans. Not later than 2:00 p.m. (New York City time) on
the Closing Date, each Lender will make available to the Administrative Agent,
for the account of the Borrower, at the office of the Administrative Agent in
funds immediately available to the Administrative Agent, as applicable, such
Lender's Applicable Percentage multiplied by the Term Loans to be made on the
Closing Date. The Borrower hereby irrevocably authorizes the Administrative
Agent to disburse the proceeds of each borrowing requested pursuant to this
Section 2.03(c) in immediately available funds by crediting or wiring such
proceeds to the deposit account of the Borrower identified in the most recent
notice substantially in the form of Exhibit C hereto (a “Notice of Account
Designation”) delivered by the Borrower to the Administrative Agent or such
other account as may be designated in writing by the Borrower to the
Administrative Agent from time to time. Subject to Section 2.16, the
Administrative Agent shall not be obligated to disburse that portion of the
proceeds of any Term Loan equal to the amount by which any Lender has not made
available to the Administrative Agent its Applicable Percentage of such Term
Loan.

Section 2.04 [Reserved.]

Section 2.05 [Reserved.]

Section 2.06 Termination of Commitments.
The Commitments shall automatically and permanently be reduced to zero on the
Closing Date immediately after giving effect to the making of the Loans.
Section 2.07 Prepayment, Repayment and Amortization of Loans.
a.    Voluntary Prepayments. The Borrower shall have the right to prepay Loans
made to it in whole or in part from time to time without premium or penalty upon
one Business Days' prior written notice to the Administrative Agent; provided,
that (i) LIBOR Rate Loans may only be prepaid on three Business Days' prior
written notice to the Administrative Agent and any prepayment of LIBOR Rate
Loans will be subject to Section 2.12(e) and (ii) each such partial prepayment
of Loans shall be in the minimum principal

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amount of $5,000,000. Amounts prepaid hereunder shall be applied first to Base
Rate Loans until paid in full and second to LIBOR Rate Loans, in direct order of
Interest Period maturities until paid in full, pro rata among all Lenders
holding same.

b.    Repayment. The Borrower shall repay the Term Loans in full in cash on the
Maturity Date, together with all accrued and unpaid interest thereon and any
amount payable to the Lenders pursuant to Section 2.12(e).

Section 2.08 [Reserved].

Section 2.09 Evidence of Debt; Notes.
a.     Evidence of Debt. The date, amount, type, interest rate and duration of
Interest Period (if applicable) of each Loan made by each Lender to the
Borrower, and each payment made on account of the principal thereof, shall be
recorded by such Lender and by the Administrative Agent on its books; provided,
that the failure of such Lender or the Administrative Agent to make any such
recordation or endorsement shall not affect the obligations of the Borrower to
make a payment when due of any amount owing hereunder or under any Note with
respect of the Loans to be evidenced by such Note, and each such recordation or
endorsement shall be conclusive and binding, absent manifest error. In any legal
action or proceeding in respect of this Agreement, the entries made in such
account or accounts shall, in the absence of manifest error, be conclusive
evidence of the existence and amounts of the Obligations of the Borrower therein
recorded. In the event of any conflict between the accounts and records
maintained by any Lender and the accounts and records of the Administrative
Agent in respect of such matters, the accounts and records of the Administrative
Agent shall control in the absence of manifest error.

b.    Notes. The Term Loans made by the Lenders to the Borrower shall be
evidenced, upon request by any Lender, by Notes in a principal amount equal to
the amount of such Lender's Applicable Percentage multiplied by the Commitment
as originally in effect.

Section 2.10 Interest Rates.
a.     Interest Rates. Subject to the provisions of this Section, at the
election of the Borrower, Loans shall bear interest at (i) the Base Rate plus
the Applicable Base Rate Margin or (ii) the LIBOR Rate plus the Applicable LIBOR
Margin (provided that the LIBOR Rate shall not be available until three (3)
Business Days after the Closing Date unless the Borrower has delivered to the
Administrative Agent a letter in form and substance reasonably satisfactory to
the Administrative Agent indemnifying the Lenders in the manner set forth in
Section 2.12(e) of this Agreement). The Borrower shall select the rate of
interest and Interest Period, if any, applicable to any Loan at the time a
Notice of Borrowing is given or at the time a Notice of Conversion/Continuation
is given pursuant to Section 2.13. Any Loan or any portion thereof as to which
the Borrower has not duly specified an interest rate as provided herein shall be
deemed a Base Rate Loan.

b.    Interest Periods. In connection with each LIBOR Rate Loan, the period
commencing on the date of such LIBOR Rate Loan or the date of the Conversion of
any LIBOR Rate Loan into such a LIBOR Rate Loan and ending on the last day of
the period selected by the Borrower pursuant to the provisions below (“Interest
Period”) and, thereafter, each subsequent period commencing on the last day of
the immediately preceding Interest Period (or such other day as may be selected
by the Borrower in accordance with

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the provisions hereof) and ending on the last day of the period selected by the
Borrower pursuant to the provisions below. The duration of each such Interest
Period shall be 14 days or one, two, three or six months, in each case as the
Borrower may select by notice to the Administrative Agent pursuant to Section
2.03(a)(i)(B); provided, however, that:
i.the Borrower may not select any Interest Period with respect to any Term Loan
that ends after the Maturity Date, and in no event shall an Interest Period of
any Loan extend beyond the Maturity Date;
ii.whenever the last day of any Interest Period would otherwise occur on a day
other than a Business Day, the last day of such Interest Period shall be
extended to occur on the next succeeding Business Day; provided, that if such
extension would cause the last day of such Interest Period to occur in the next
following calendar month, the last day of such Interest Period shall occur on
the next preceding Business Day; and
iii.any Interest Period for a LIBOR Rate Loan which begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the appropriate subsequent calendar month) shall end on the
last Business Day of the appropriate subsequent calendar month; and
iv.no more than eight (8) Interest Periods may be in effect at any time.
    
c. Default Rate. Subject to Section 7.02, immediately upon the occurrence and
during the continuance of an Event of Default, (i) the Borrower shall no longer
have the option to request or convert LIBOR Rate Loans, (ii) all outstanding
LIBOR Rate Loans shall bear interest at a rate per annum of two percent (2%) in
excess of the rate (including the Applicable LIBOR Margin) then applicable to
such LIBOR Rate Loans until the end of the applicable Interest Period and
thereafter at a rate equal to two percent (2%) in excess of the rate (including
the Applicable Base Rate Margin) then applicable to Base Rate Loans, and
(iii) all outstanding Base Rate Loans and other Obligations arising hereunder or
under any other Loan Document shall bear interest at a rate per annum equal to
two percent (2%) in excess of the rate (including the Applicable Base Rate
Margin) then applicable to Base Rate Loans or such other Obligations arising
hereunder or under any other Loan Document. Interest shall continue to accrue on
the Obligations after the filing by or against the Borrower of any petition
seeking any relief in bankruptcy or under any act or law pertaining to
insolvency or debtor relief, whether state, federal or foreign.

d. Interest Payment and Computation. (i) Interest on each Base Rate Loan shall
be due and payable in arrears on the last Business Day of each calendar quarter
commencing June 30, 2012 and on the Maturity Date; and (ii) interest on each
LIBOR Rate Loan shall be due and payable on the last day of each Interest Period
applicable thereto, and if such Interest Period extends over three (3) months,
at the end of each three (3)-month interval during such Interest Period and on
the Maturity Date. All computations of interest for Base Rate Loans when the
Base Rate is determined by the Prime Rate shall be made on the basis of a year
of 365 or 366 days, as the case may be, and actual days elapsed. All other
computations of fees and interest provided hereunder shall be made on the basis
of a 360-day year and actual days elapsed (which results in more fees or
interest, as applicable, being paid than if computed on the basis of a
365/366-day year).

e. Payments. Each payment by the Borrower on account of the principal of or
interest on the Loans or of any fee, commission or other amounts payable to the
Lenders under this Agreement (or any of them) shall be made not later than 1:00
p.m. (New York City time) on the date specified for payment under this Agreement
to the Administrative

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Agent at the office of the Administrative Agent as set forth in Section 10.02
(the “Administrative Agent's Office”) for the account of the Lenders entitled to
such payment in Dollars, in immediately available funds and shall be made
without any set off, counterclaim or deduction whatsoever. Any payment received
after such time but before 2:00 p.m. on such day shall be deemed a payment on
such date for the purposes of Section 7.01, but for all other purposes shall be
deemed to have been made on the next succeeding Business Day. Any payment
received after 2:00 p.m. shall be deemed to have been made on the next
succeeding Business Day for all purposes. Upon receipt by the Administrative
Agent of each such payment, the Administrative Agent shall distribute to each
such Lender at its address for notices set forth herein its pro rata share of
such payment in accordance with the amounts then due and payable to such Lenders
(except as specified below), and shall wire advice of the amount of such credit
to each Lender. Each payment to the Administrative Agent of the Administrative
Agent's fees or expenses shall be made for the account of the Administrative
Agent and any amount payable to any Lender under Sections 2.12(e), 2.14, 2.17,
10.05 or 10.07 shall be paid to the Administrative Agent for the account of the
applicable Lender. If any payment under this Agreement shall be specified to be
made upon a day which is not a Business Day, it shall be made on the next
succeeding day which is a Business Day and such extension of time shall in such
case be included in computing any interest if payable along with such payment.

f. Maximum Rate. In no contingency or event whatsoever shall the aggregate
amount of all amounts deemed interest hereunder or under any of the Notes
charged or collected pursuant to the terms of this Agreement or pursuant to any
of the Notes exceed the highest rate permissible under any Applicable Law which
a court of competent jurisdiction shall, in a final determination, deem
applicable hereto. In the event that such a court determines that the Lenders
have charged or received interest hereunder in excess of the highest applicable
rate, the rate in effect hereunder shall automatically be reduced to the maximum
rate permitted by Applicable Law and the Lenders shall at the Administrative
Agent's option promptly refund to the Borrower any interest received by the
Lenders in excess of the maximum lawful rate or shall apply such excess to the
principal balance of the Obligations. It is the intent hereof that the Borrower
not pay or contract to pay, and that neither the Administrative Agent nor any
Lender receive or contract to receive, directly or indirectly in any manner
whatsoever, interest in excess of that which may be paid by the Borrower under
Applicable Law.

Section 2.11 Additional Interest on LIBOR Rate Loans.
The Borrower shall pay to each Lender, so long as such Lender shall be required
under regulations of the Board of Governors of the Federal Reserve System to
maintain reserves with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities and which are not required on the date of
this Agreement, additional interest on the unpaid principal amount of each LIBOR
Rate Loan of such Lender, from the date of such LIBOR Rate Loan until such
principal amount is paid in full, at the LIBOR Rate, payable on each date on
which interest is payable on such LIBOR Rate Loan. Such additional interest
shall be determined by such Lender and notified to the Borrower through the
Administrative Agent and shall be conclusive, absent manifest error.
Section 2.12 Interest Rate Determination; Changed Circumstances.
a. Interest Rate Determination. The Administrative Agent shall give prompt
notice to the Borrower and the Lenders of the applicable interest rate
determined by the

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Administrative Agent for purposes of Section 2.10.

b. Automatic Conversion. If the Borrower shall fail to (i) select the duration
of any Interest Period for any LIBOR Rate Loans in accordance with the
provisions of Section 2.10(b), (ii) provide a Notice of Conversion/Continuation
with respect to any LIBOR Rate Loans on or prior to 11:00 a.m., New York City
time, on the third Business Day prior to the last day of the Interest Period
applicable thereto, in the case of a Conversion to or in respect of LIBOR Rate
Loans or (iii) satisfy the conditions set forth in Section 2.13 with respect to
a Conversion, the Administrative Agent will forthwith so notify the Borrower and
the Lenders and such LIBOR Rate Loans will automatically, on the last day of the
then existing Interest Period therefor, Convert into Base Rate Loans.

c. Circumstances Affecting LIBOR Rate Availability. If, with respect to any
LIBOR Rate Loans (or a Conversion to or continuation thereof), (i) the
Administrative Agent shall determine (which determination shall be conclusive
and binding, absent manifest error) that Dollar deposits are not being offered
to banks in the London interbank Eurodollar market for the applicable amount and
Interest Period of such Loan, (ii) the Required Lenders notify the
Administrative Agent or the Administrative Agent shall determine (which
determination shall be conclusive and binding absent manifest error) that
reasonable and adequate means do not exist for the ascertaining the LIBOR Rate
for such Interest Period with respect to a proposed LIBOR Rate Loan or (iii) the
Required Lenders shall determine (which determination shall be conclusive and
binding absent manifest error) and notify the Administrative Agent that the
LIBOR Rate for any Interest Period for such LIBOR Rate Loans will not adequately
reflect the cost to such Required Lenders of making, funding or maintaining
their respective LIBOR Rate Loans for such Interest Period, then the
Administrative Agent shall forthwith so notify the Borrower and the Lenders,
whereupon:
i.each LIBOR Rate Loan will automatically, on the last day of the then existing
Interest Period therefor, Convert into a Base Rate Loan, and
ii.the obligation of the Lenders to make, or to Convert Base Rate Loans into,
LIBOR Rate Loans shall be suspended until the Administrative Agent (based on
notice from the Required Lenders) shall notify the Borrower and the Lenders that
the circumstances causing such suspension no longer exist.

d. Laws Affecting LIBOR Rate Availability. If, after the date hereof, the
introduction of, or any change in, any Applicable Law or any change in the
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any of the Lenders (or any of their respective Lending
Offices) with any request or directive (whether or not having the force of law)
of any such Governmental Authority, central bank or comparable agency (including
any Change in Law), shall make it unlawful or impossible for any of the Lenders
(or any of their respective Lending Offices) to honor its obligations hereunder
to make or maintain any LIBOR Rate Loan, such Lender shall promptly give notice
thereof to the Administrative Agent and the Administrative Agent shall promptly
give notice to the Borrower and the other Lenders. Thereafter, until the
Administrative Agent notifies the Borrower that such circumstances no longer
exist, (i) the obligations of the Lenders to make LIBOR Rate Loans, and the
right of the Borrower to convert any Loan or continue any Loan as a LIBOR Rate
Loan shall be suspended and thereafter the Borrower may select only Base Rate
Loans and (ii) if any of the Lenders may not lawfully continue to maintain a
LIBOR Rate Loan to the end of the then current Interest Period applicable

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thereto, the applicable Loan shall immediately be converted to a Base Rate Loan
for the remainder of such Interest Period.

e. Indemnity. The Borrower hereby indemnifies each of the Lenders against any
loss or expense which may arise or be attributable to each Lender's obtaining,
liquidating or employing deposits or other funds acquired to effect, fund or
maintain any Loan (i) as a consequence of any failure by the Borrower to make
any payment when due of any amount due hereunder in connection with a LIBOR Rate
Loan, (ii) due to any failure of the Borrower to borrow, continue or convert on
a date specified therefor in a Notice of Borrowing or Notice of
Conversion/Continuation or (iii) due to any payment, prepayment or conversion of
any LIBOR Rate Loan on a date other than the last day of the Interest Period
therefor. The amount of such loss or expense shall be determined, in the
applicable Lender's reasonable discretion, based upon the assumption that such
Lender funded its Applicable Percentage of the LIBOR Rate Loans in the London
interbank market and using any reasonable attribution or averaging methods which
such Lender deems appropriate and practical. A certificate of such Lender
setting forth the basis for determining such amount or amounts necessary to
compensate such Lender shall be forwarded to the Borrower through the
Administrative Agent and shall be conclusively presumed to be correct absent
manifest error. Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower, the
Administrative Agent and the Lenders contained in this Section shall survive the
payment in full of the Obligations.

Section 2.13 Voluntary Conversion of Loans.    
The Borrower may on any Business Day, by delivering an irrevocable Notice of
Conversion/Continuation (a “Notice of Conversion/Continuation”) in the form of
Exhibit D hereto to the Administrative Agent not later than 11:00 a.m., New York
City time, on the third Business Day prior to the date of the proposed
Conversion, and subject to the provisions of Sections 2.10 and 2.15, Convert all
Loans of one Type made simultaneously into Loans of the other Type; provided,
that any Conversion of any LIBOR Rate Loans into Base Rate Loans shall be made
on, and only on, the last day of an Interest Period for such LIBOR Rate Loans.
Section 2.14 Increased Costs.
a. Increased Costs Generally. If any Change in Law shall:
i.impose, modify or deem applicable any reserve, special deposit, compulsory
loan, insurance charge or similar requirement against assets of, deposits with
or for the account of, or advances, loans or other credit extended or
participated in by, any Lender (except any reserve requirement reflected in the
LIBOR Rate);
ii.subject the Administrative Agent or any Lender to any Taxes (other than (A)
Indemnified Taxes, (B) Excluded Taxes, and (C) Other Taxes) on its loans, loan
principal, letters of credit, commitments, or other obligations, or its
deposits, reserves, other liabilities or capital attributable thereto; or
iii.impose on any Lender or the London interbank market any other condition,
cost or expense affecting this Agreement or LIBOR Rate Loans made by such
Lender;
i.and the result of the foregoing shall be in the aggregate to increase the cost
to the Administrative Agent or such Lender of making, converting into or
maintaining any Loan (or of maintaining its obligation to make any such Loan),
or to reduce the amount of any sum received or receivable by the Administrative
Agent

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or such Lender hereunder (whether of principal, interest or any other amount)
then, upon written request of the Administrative Agent or such Lender, the
Borrower shall promptly pay to the Administrative Agent or any such Lender such
additional amount or amounts as will compensate the Administrative Agent or such
Lender for such additional costs incurred or reduction suffered. Without
prejudice to the survival of any other agreement of the Borrower hereunder, the
agreements and obligations of the Borrower, the Administrative Agent and the
Lenders contained in this Section shall survive the payment in full of the
Obligations.
b. Capital Requirements. If any Lender determines that any Change in Law
affecting such Lender or any lending office of such Lender or such Lender's
holding company, if any, regarding capital or liquidity requirements has or
would have the effect of reducing the rate of return on such Lender's capital or
on the capital of such Lender's holding company, if any, as a consequence of
this Agreement, the Loans made by such Lender to a level below that which such
Lender or such Lender's holding company could have achieved but for such Change
in Law (taking into consideration such Lender's policies and the policies of
such Lender's holding company with respect to capital adequacy or liquidity
requirements), then from time to time upon written request of such Lender the
Borrower shall promptly pay to such Lender such additional amount or amounts as
will compensate such Lender or such Lender's holding company for any such
reduction suffered.

c. Certificates for Reimbursement. A certificate of a Lender setting forth the
amount or amounts necessary to compensate such Lender or its holding company, as
the case may be, as specified in paragraph (a) or (b) of this Section and
delivered to the Borrower shall be conclusive absent manifest error. The
Borrower shall pay such Lender the amount shown as due on any such certificate
within ten (10) days after receipt thereof.

d. Delay in Requests. Failure or delay on the part of any Lender to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender's right to demand such compensation; provided that the Borrower shall not
be required to compensate a Lender pursuant to this Section for any increased
costs incurred or reductions suffered more than nine (9) months prior to the
date that such Lender notifies the Borrower of the Change in Law giving rise to
such increased costs or reductions and of such Lender's intention to claim
compensation therefor (except that if the Change in Law giving rise to such
increased costs or reductions is retroactive, then the nine-month period
referred to above shall be extended to include the period of retroactive effect
thereof).

Section 2.15 Illegality.    
Notwithstanding any other provision of this Agreement, if any Lender shall
notify the Administrative Agent that the introduction of or any change in or in
the interpretation of any law or regulation (in each case made after the date
hereof)(including any Change in Law) makes it unlawful, or any central bank or
other governmental authority asserts that it is unlawful, for any Lender or its
Lending Office to perform its obligations hereunder to make LIBOR Rate Loans, or
to fund or maintain LIBOR Rate Loans hereunder, (a) the obligation of the
Lenders to make, or to Convert Base Rate Loans into, LIBOR Rate Loans shall be
suspended until the Administrative Agent (based on notice from the affected
Lender)

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shall notify the Borrower and the Lenders that the circumstances causing such
suspension no longer exist, and (b) the Borrower shall pay (i) on the last day
of the applicable Interest Period, or (ii) if the failure to prepay immediately
would cause any Lender to be in violation of such law or regulation,
immediately, in full all LIBOR Rate Loans of all Lenders then outstanding,
together with interest accrued thereon and amounts payable pursuant to Section
2.12(e), unless, in either case, the Borrower, within five Business Days of
notice from the Administrative Agent (or such shorter, maximum period of time,
specified by the Administrative Agent, as may be legally allowable), Converts
all LIBOR Rate Loans of all Lenders then outstanding into Base Rate Loans in
accordance with Section 2.13.
Section 2.16 Nature of Obligations of Lenders; Assumption by the Administrative
Agent.
The obligations of the Lenders under this Agreement to make the Loans are
several and are not joint or joint and several. Unless the Administrative Agent
shall have received notice from a Lender prior to the Closing Date that such
Lender will not make available to the Administrative Agent such Lender's ratable
portion of the Term Loans (which notice shall not release such Lender of its
obligations hereunder), the Administrative Agent may assume that such Lender has
made such portion available to the Administrative Agent on the Closing Date in
accordance with this Agreement and the Administrative Agent may, in reliance
upon such assumption, make available to the Borrower on such date a
corresponding amount. If such amount is made available to the Administrative
Agent on a date after such borrowing date, such Lender shall pay to the
Administrative Agent on demand an amount, until paid, equal to the product of
(a) the amount not made available by such Lender in accordance with the terms
hereof, times (b) the daily average Federal Funds Rate (or, if such amount is
not made available for a period of three (3) Business Days after the borrowing
date, the Base Rate) during such period as determined by the Administrative
Agent, times (c) a fraction the numerator of which is the number of days that
elapse from and including the Closing Date to the date on which such amount not
made available by such Lender in accordance with the terms hereof shall have
become immediately available to the Administrative Agent and the denominator of
which is 360. A certificate of the Administrative Agent with respect to any
amounts owing under this Section 2.16 shall be conclusive, absent manifest
error. If such Lender's Applicable Percentage of the Term Loans is not made
available to the Administrative Agent by such Lender within three (3) Business
Days of the Closing Date, the Administrative Agent shall be entitled to recover
such amount made available by the Administrative Agent with interest thereon at
the rate per annum applicable to the Loan hereunder, on demand, from the
Borrower. The failure of any Lender to make available its Applicable Percentage
of any Loan requested by the Borrower shall not relieve it or any other Lender
of its obligation, if any, hereunder to make its Applicable Percentage of such
Loan available on the Closing Date, but no Lender shall be responsible for the
failure of any other Lender to make its Applicable Percentage of such Loan
available on the Closing Date.
Section 2.17 Taxes; Foreign Lenders.
a. Payments Free of Taxes. Any and all payments by or on account of any
obligation of the Borrower hereunder or under any other Loan Document shall be
made free and clear of and without reduction or withholding for any Indemnified
Taxes or Other Taxes; provided that if the Borrower shall be required by
Applicable Law to deduct any Indemnified Taxes or Other Taxes from such
payments, then (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section) the Administrative Agent or the applicable
Lender, as the

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case may be, receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower shall make such deductions and
(iii) the Borrower shall timely pay the full amount deducted to the relevant
Governmental Authority in accordance with Applicable Law.

b. Payment of Other Taxes by the Borrower. Without limiting the provisions of
paragraph (a) above, the Borrower shall timely pay any Other Taxes to the
relevant Governmental Authority in accordance with Applicable Law.

c. Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent and each Lender, within ten (10) days after demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts payable under this Section) paid by the Administrative Agent or such
Lender, as the case may be, and any penalties, interest and reasonable expenses
arising therefrom or with respect thereto, whether or not such Indemnified Taxes
or Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or
liability delivered to the Borrower by a Lender (with a copy to the
Administrative Agent), or by the Administrative Agent on its own behalf or on
behalf of a Lender, shall be conclusive absent manifest error.

d. Evidence of Payments. As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower
shall deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.

e. Status of Lenders. Any Foreign Lender that is entitled to an exemption from
or reduction of withholding tax under the law of the jurisdiction in which the
Borrower is resident for tax purposes, or any treaty to which such jurisdiction
is a party, with respect to payments hereunder or under any other Loan Document
shall deliver to the Borrower (with a copy to the Administrative Agent), at the
time or times prescribed by Applicable Law or reasonably requested by the
Borrower or the Administrative Agent, such properly completed and executed
documentation prescribed by Applicable Law as will permit such payments to be
made without withholding or at a reduced rate of withholding. In addition, any
Lender, if requested by the Borrower or the Administrative Agent, shall deliver
such other documentation prescribed by Applicable Law or reasonably requested by
the Borrower or the Administrative Agent as will enable the Borrower or the
Administrative Agent to determine whether or not such Lender is subject to
backup withholding or information reporting requirements. Without limiting the
generality of the foregoing, in the event that the Borrower is a resident for
tax purposes in the United States, any Foreign Lender shall deliver to the
Borrower and the Administrative Agent (in such number of copies as shall be
requested by the recipient) on or prior to the date on which such Foreign Lender
becomes a Lender under this Agreement (and from time to time thereafter upon the
request of the Borrower or the Administrative Agent, but only if such Foreign
Lender is legally entitled to do so), whichever of the following is applicable:
i.duly completed copies of Internal Revenue Service Form W-8BEN

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claiming eligibility for benefits of an income tax treaty to which the United
States is a party,
ii.duly completed copies of Internal Revenue Service Form W-8ECI,
iii.in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under section 881(c) of the Code, (A) a certificate to the
effect that such Foreign Lender is not (I) a “bank” within the meaning of
section 881(c)(3)(A) of the Code, (II) a “10 percent shareholder” of the
Borrower within the meaning of section 881(c)(3)(B) of the Code, or (III) a
“controlled foreign corporation” described in section 881(c)(3)(C) of the Code
and (B) duly completed copies of Internal Revenue Service Form W-8BEN, or
iv.any other form prescribed by Applicable Law as a basis for claiming exemption
from or a reduction in United States Federal withholding tax duly completed
together with such supplementary documentation as may be prescribed by
Applicable Law to permit the Borrower to determine the withholding or deduction
required to be made.

f. FATCA. If a payment made to a Lender under any Loan Document would be subject
to United States Federal withholding Tax imposed by FATCA if such Lender were to
fail to comply with the applicable reporting requirements of FATCA (including
those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such
Lender shall deliver to the Borrower and the Administrative Agent at the time or
times prescribed by law and at such time or times reasonably requested by the
Borrower or the Administrative Agent such documentation prescribed by applicable
law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such
additional documentation reasonably requested by the Borrower or the
Administrative Agent as may be necessary for the Borrower and the Administrative
Agent to comply with their obligations under FATCA and to determine that such
Lender has complied with such Lender's obligations under FATCA or to determine
the amount to deduct and withhold from such payment. Solely for purposes of this
Section 2.17(f), “FATCA” shall include any amendments made to FATCA after the
date of this Agreement.
    
g. Indemnification by the Lenders. Each Lender shall severally indemnify the
Administrative Agent, within ten (10) days after demand therefor, for (i) any
Indemnified Taxes or Other Taxes attributable to such Lender (but only to the
extent that the Borrower has not already indemnified the Administrative Agent
for such Indemnified Taxes or Other Taxes and without limiting the obligation of
the Borrower to do so), (ii) any Taxes attributable to such Lender's failure to
comply with the provisions of Section 10.09(d) relating to the maintenance of a
Participant Register and (iii) any Excluded Taxes attributable to such Lender,
in each case, that are payable or paid by the Administrative Agent in connection
with any Loan Document, and any reasonable expenses arising therefrom or with
respect thereto, whether or not such Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to any Lender by the Administrative Agent
shall be conclusive absent manifest error. Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing
to such Lender under any Loan Document or otherwise payable by the
Administrative Agent to the Lender from any other source against any amount due
to the Administrative Agent under this Section 2.17(g).

h. Treatment of Certain Refunds. If the Administrative Agent or a Lender
determines, in its reasonable discretion, that it has received a refund of any
Taxes or Other

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Taxes as to which it has been indemnified by the Borrower or with respect to
which the Borrower has paid additional amounts pursuant to this Agreement, it
shall promptly after the receipt of such refund pay to the Borrower an amount
equal to such refund (but only to the extent of indemnity payments made, or
additional amounts paid, by the Borrower under this Agreement with respect to
the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket
expenses of the Administrative Agent or such Lender, as the case may be, and
without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund); provided that the Borrower, upon the
request of the Administrative Agent or such Lender, agrees to repay the amount
paid over to the Borrower (plus any penalties, interest or other charges imposed
by the relevant Governmental Authority) to the Administrative Agent or such
Lender in the event the Administrative Agent or such Lender is finally required
to repay such refund to such Governmental Authority. This paragraph shall not be
construed to require the Administrative Agent or any Lender to make available
its tax returns (or any other information relating to its taxes which it deems
confidential) to the Borrower or any other Person.

i. Survival. Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower, the
Administrative Agent and the Lenders contained in this Section shall survive the
payment in full of the Obligations.

j. USA Patriot Act Notice; Compliance. In order for the Administrative Agent to
comply with the USA Patriot Act of 2001 (Public Law 107-56), prior to any Lender
or Participant that is organized under the laws of a jurisdiction outside of the
United States of America becoming a party hereto, the Administrative Agent may
request, and such Lender or Participant shall provide to the Administrative
Agent, its name, address, tax identification number and/or such other
identification information as shall be necessary for the Administrative Agent to
comply with federal law.

Section 2.18 [Reserved].

Section 2.19 [Reserved].

Section 2.20 [Reserved].

Section 2.21 Mitigation Obligations; Replacement of Lenders.
a. Designation of a Different Applicable Lending Office. If any Lender requests
compensation under Section 2.14, or requires the Borrower to pay any additional
amount to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 2.17, then such Lender shall use reasonable efforts to
designate a different lending office for funding or booking its Loans hereunder
or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to Section
2.14 or Section 2.17, as the case may be, in the future and (ii) would not
subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender. The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment.
    
b. Replacement of Lenders. If any Lender requests compensation under
Section 2.14, or if the Borrower is required to pay any additional amount to any
Lender or

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any Governmental Authority for the account of any Lender pursuant to Section
2.17, or if any Lender is a Defaulting Lender hereunder, then the Borrower may,
at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in, and
consents required by, Section 10.09), all of its interests, rights and
obligations under this Agreement and the related Loan Documents to an assignee
that shall assume such obligations (which assignee may be another Lender, if a
Lender accepts such assignment provided that such Lender is not a Defaulting
Lender at the time of such assignment); provided that:
i.the Borrower shall have paid to the Administrative Agent the assignment fee
specified in Section 10.09;
ii.such Lender shall have received payment of an amount equal to the outstanding
principal of its Loans, accrued interest thereon, accrued fees and all other
amounts payable to it hereunder and under the other Loan Documents (including
any amounts under Section 2.12(e) as if such assignment was a payment) from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts);
iii.in the case of any such assignment resulting from a claim for compensation
under Section 2.14 or payments required to be made pursuant to Section 2.17,
such assignment will result in a reduction in such compensation or payments
thereafter; and
iv.such assignment does not conflict with Applicable Law.

A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.

Section 2.22 Defaulting Lenders.
Notwithstanding anything to the contrary contained in this Agreement, if any
Lender becomes a Defaulting Lender, then, until such time as such Lender is no
longer a Defaulting Lender, to the extent permitted by applicable law, such
Defaulting Lender's right to approve or disapprove any amendment, waiver or
consent with respect to this Agreement shall be restricted as set forth in the
definition of Required Lenders.

[End of Article II]

ARTICLE III
[RESERVED]

[End of Article III]

ARTICLE IV
CONDITIONS PRECEDENT

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Section 4.01 Conditions Precedent to the Execution and Delivery of this
Agreement.    
The obligation of the Lenders to execute and deliver this Agreement and to make
Loans on the Closing Date is subject to the conditions precedent that the
Administrative Agent (and the Lenders, if applicable) shall have received on or
before the Closing Date, the following, each dated such date, in form and
substance reasonably satisfactory to the Administrative Agent and the Lenders,
with copies for each Lender:
a.    Agreement. Receipt by the Administrative Agent of counterparts of this
Agreement, duly executed by the Borrower, the Administrative Agent and the
Lenders;
b.    Secretary's Certificate. Receipt by the Administrative Agent of (i) a
certificate of the secretary or assistant secretary of the Borrower, as
applicable, dated the Closing Date and certifying (A) that attached thereto is a
true and complete copy of the certificate of incorporation and all amendments
thereto of the Borrower, certified as of a recent date by the appropriate
Governmental Authority in its jurisdiction of organization, (B) that attached
thereto is a true and complete copy of the bylaws of the Borrower in effect on
the Closing Date and at all times since a date prior to the date of the
resolutions described in clause (C) below, (C) that attached thereto is a true
and complete copy of resolutions or consents, as applicable, duly adopted by the
board of directors of the Borrower authorizing, as applicable, the execution,
delivery and performance of this Agreement and that such resolutions have not
been modified, rescinded or amended and are in full force and effect, (D) that
the organizational documents of the Borrower have not been amended since the
date of the last amendment thereto shown on the certificate of good standing
attached thereto, and (E) as to the incumbency and specimen signature of each
officer of the Borrower executing this Agreement and any other document
delivered in connection herewith on its behalf; and (ii) a certificate of
another officer as to the incumbency and specimen signature of such secretary or
assistant secretary executing the certificate pursuant to (A) above;
c.    Officer's Certificate. Receipt by the Administrative Agent of a
certificate from the Borrower, executed on its behalf by the chief executive
officer or chief financial officer of the Borrower, as applicable, in form
reasonably satisfactory to the Administrative Agent, to the effect that, as of
the Closing Date, all representations and warranties of the Borrower contained
in this Agreement and the other Loan Documents are true and correct in all
material respects (except for representations and warranties qualified by
materiality, which shall be true and correct); that the Borrower is not in
violation or aware of any event that would have a Material Adverse Effect on the
business or operation as reflected in the Disclosure Documents; that the
Borrower is not in violation of any of the covenants contained in this Agreement
and the other Loan Documents in any material respect; that, after giving effect
to the transactions contemplated by this Agreement, no Default or Event of
Default has occurred and is continuing; and that the Borrower has satisfied each
of the conditions precedent set forth in this Section 4.01;
d.    Consents. Receipt by the Administrative Agent of a written representation
from the Borrower that (i) all governmental, shareholder, member, partner and
third party consents and approvals necessary or, in the reasonable opinion of
the Administrative Agent, desirable, in connection with the transactions
contemplated hereby have been received and are in full force and effect and (ii)
no condition or requirement of law exists which could reasonably be likely to
restrain, prevent or impose any material adverse condition on the

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transactions contemplated hereby;
e.    Proceedings. Receipt by the Administrative Agent of a certificate from the
Borrower certifying that no action, proceeding, investigation, regulation or
legislation has been instituted, or, to the Borrower's knowledge, threatened or
proposed before any court, government agency or legislative body to enjoin,
restrain or prohibit, or to obtain damages in respect of, or which is related to
or arises out of this Agreement or any other Loan Documents or the consummation
of the transactions contemplated hereby or thereby or which, in the
Administrative Agent's reasonable determination could reasonably be expected to
result in any such prohibition or a Material Adverse Effect on the Borrower,
South Jersey Gas and the Borrower's other Subsidiaries, taken as a whole;
f.    Financial Statements. Receipt by the Administrative Agent of the
Disclosure Documents and financial statements required pursuant to Section 6.03,
which demonstrate, in the Administrative Agent's reasonable judgment, together
with all other information then available to the Administrative Agent, that the
Borrower can repay its debts and satisfy its other obligations as and when they
become due, and can comply with the financial covenants contained in this
Agreement;
g.    Good Standing Certificate. Receipt by the Administrative Agent of a
certificate of good standing for the Borrower, dated on or immediately prior to
the Closing Date, from the Secretary of State of the State of New Jersey;
h.    Fees. Receipt by the Administrative Agent and the Lenders of the fees set
forth or referenced in this Agreement and any other accrued and unpaid fees,
expenses or commissions due hereunder (including, without limitation, legal fees
and expenses of counsel to the Administrative Agent), and to any other Person
such amount as may be due thereto in connection with the transactions
contemplated hereby, including all taxes, fees and other charges related to the
Loan Documents, in each case which are invoiced on or prior to the Closing Date;
i.    Note. If requested by any Lender, a Note, payable to the order of such
Lender, duly completed and executed by the Borrower;
j.    Opinions. Opinions of Cozen O'Connor, counsel to the Borrower, in
substantially the form of Exhibit E hereto, and as to such other matters as the
Administrative Agent and the Lenders may reasonably request, addressed to the
Administrative Agent and the Lenders;
k.    Other. Receipt by the Administrative Agent of all other opinions,
certificates and instruments in connection with the transactions contemplated by
this Agreement reasonably satisfactory in form and substance to the Required
Lenders.
[End of Article IV]

ARTICLE V
REPRESENTATIONS AND WARRANTIES

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Section 5.01 Representations and Warranties of the Borrower.

The Borrower hereby represents and warrants as follows:
a. Each of the Borrower and its Subsidiaries is an entity duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, as applicable and is duly qualified to do
business in, and is in good standing in, all other jurisdictions where the
nature of its business or the nature of property owned or used by it makes such
qualification necessary, except where such failure would not result in a
Material Adverse Effect. Each of the Borrower and its Subsidiaries has all
requisite corporate (or other applicable) powers and authority to own or lease
and operate its properties and to carry on its business as now conducted and as
proposed to be conducted.

b. The execution, delivery and performance by the Borrower and, where
applicable, each Subsidiary of this Agreement, each Loan Document to which it is
a party are within the Borrower's or such Subsidiary's corporate (or other
applicable) powers, have been duly authorized by all necessary corporate (or
other applicable) action, do not contravene (i) the Borrower's or such
Subsidiary's certificate of incorporation (or other applicable formation
document or operating agreement), (ii) any law, rule or regulation applicable to
the Borrower or such Subsidiary or (iii) any contractual or legal restriction
binding on or affecting the Borrower or such Subsidiary, and will not result in
or require the imposition of any lien or encumbrance on, or security interest
in, any property (including, without limitation, accounts or contract rights) of
the Borrower or its Subsidiaries, except as provided in this Agreement and any
other the Loan Document.
c. No Governmental Action is required for the execution or delivery by the
Borrower or its Subsidiaries of this Agreement, any other Loan Document to which
it is a party or for the performance by the Borrower or its Subsidiaries of its
obligations under this Agreement, any other Loan Document to which it is a party
other than those which have previously been duly obtained, are in full force and
effect, are not subject to any pending or, to the knowledge of the Borrower,
threatened appeal or other proceeding seeking reconsideration and as to which
all applicable periods of time for review, rehearing or appeal with respect
thereto have expired.

d.     This Agreement and each Loan Document to which the Borrower or any
Subsidiary is a party is a legal, valid and binding obligation of the Borrower
or Subsidiary party thereto, enforceable against the Borrower or applicable
Subsidiary in accordance with its terms subject to the effect of bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium and other similar
laws of general application affecting rights and remedies of creditors
generally.

e.    Except as disclosed in the Disclosure Documents, there is no pending or,
to the Borrower's knowledge, threatened action or proceeding (including, without
limitation, any proceeding relating to or arising out of Environmental Laws)
affecting the Borrower or any of its Subsidiaries before any court, governmental
agency or arbitrator that has a reasonable possibility of resulting in a
Material Adverse Effect.

f.     The audited consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries, as at December 31, 2011, and the related consolidated
statements of income, retained earnings and cash flows of the Borrower and its
Consolidated

--------------------------------------------------------------------------------

Subsidiaries for the fiscal year then ended, copies of which have been furnished
to the Administrative Agent and each Lender, fairly present in all material
respects the financial condition of the Borrower and its Consolidated
Subsidiaries as at such dates and the results of the operations of the Borrower
and its Consolidated Subsidiaries for the periods ended on such dates, all in
accordance with GAAP consistently applied. Since December 31, 2011, there has
been no Material Adverse Effect, or material adverse change in the facts and
information regarding such entities as represented to the Closing Date.

g.     The making of Loans and the use of the proceeds thereof will comply with
all provisions of Applicable Law and regulation in all material respects.

h.     Neither the Borrower nor any Subsidiary of the Borrower is an “investment
company” or a company “controlled” by an “investment company”, within the
meaning of the Investment Company Act of 1940, as amended.

i.     Intentionally Deleted.

j.     Neither the Borrower nor its Subsidiaries is engaged in the business of
extending credit for the purpose of buying or carrying margin stock (within the
meaning of Regulation U issued by the Board of Governors of the Federal Reserve
System), and no proceeds of any Loan will be used to buy or carry any margin
stock or to extend credit to others for the purpose of buying or carrying any
margin stock.

k.     Compliance with ERISA as follows:
i.The Borrower and each ERISA Affiliate are in compliance with all applicable
provisions of ERISA, the Code and the regulations and published interpretations
thereunder with respect to all Employee Benefit Plans except where a failure to
so comply could not reasonably be expected to have a Material Adverse Effect.
Each Employee Benefit Plan that is intended to be qualified under Section 401(a)
of the Code has been determined by the Internal Revenue Service to be so
qualified, and each trust related to such plan has been determined to be exempt
under Section 501(a) of the Code except for such plans that have not yet
received determination letters but for which the remedial amendment period for
submitting a determination letter has not yet expired or, if the remedial
amendment period has expired, where a determination letter submission was timely
made. No liability has been incurred by the Borrower or any ERISA Affiliate
which remains unsatisfied for any taxes or penalties with respect to any
Employee Benefit Plan or any Multiemployer Plan except for a liability that
could not reasonably be expected to have a Material Adverse Effect;
ii.Except where failure of any of the following representations to be correct
could not reasonably be expected to have a Material Adverse Effect, no Pension
Plan has been terminated, nor has any unpaid minimum required contributions (as
defined in Section 430 of the Code) (without regard to any waiver granted under
Section 430 of the Code), nor has any funding waiver from the Internal Revenue
Service been received or requested with respect to any Pension Plan, nor has the
Borrower or any ERISA Affiliate failed to make any contributions or to pay any
amounts due and owing as required by Section 430 of the Code, Section 303 of
ERISA or the terms of any Pension Plan prior to the due dates of such
contributions under Section 430 of the Code or Section 303 of ERISA, nor has
there been any event requiring any disclosure under Section 4041(c)(3)(C) or
4063(a) of ERISA with respect to any Pension Plan;
iii.Except where the failure of any of the following representations to

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be correct could not reasonably be expected to have a Material Adverse Effect,
neither the Borrower nor any ERISA Affiliate has: (A) engaged in a nonexempt
prohibited transaction described in Section 406 of the ERISA or Section 4975 of
the Code; (B) incurred any liability to the PBGC which remains outstanding other
than the payment of premiums and there are no premium payments which are due and
unpaid; or (C) failed to make a required contribution or payment to a
Multiemployer Plan;
iv.No Termination Event has occurred or is reasonably expected to occur;
v.Except where the failure of any of the following representations to be correct
could not reasonably be expected to have a Material Adverse Effect, no
proceeding, claim (other than a benefits claim in the ordinary course of
business), lawsuit and/or investigation is existing or, to the knowledge of the
Borrower, threatened concerning or involving any (A) employee welfare benefit
plan (as defined in Section 3(1) of ERISA) currently maintained or contributed
to by the Borrower or any ERISA Affiliate, (B) Pension Plan or (C) Multiemployer
Plan.

l.     The Borrower and its Subsidiaries have filed all Tax returns (Federal,
state and local) required to be filed and paid all Taxes due, including interest
and penalties, except to the extent that the Borrower or any such Subsidiary is
diligently contesting any such Taxes in good faith and by appropriate
proceedings, and for which adequate reserves for payment thereof have been
established.

m.     No event has occurred or is continuing which constitutes a Default or an
Event of Default, or which constitutes, or which with the passage of time or
giving of notice or both would constitute, a default or event of default by the
Borrower or Subsidiary thereof under any material agreement or contract,
judgment, decree or order by which the Borrower or any of its respective
properties may be bound or which would require the Borrower or Subsidiary
thereof to make any payment thereunder prior to the scheduled maturity date
therefor, where such default could reasonably be expected to result in a
Material Adverse Effect.

n.     As of the Closing Date, the Borrower and each of its Subsidiaries will be
Solvent.

o.     As of the Closing Date, the capitalization of the Borrower and each
Significant Subsidiary of the Borrower consists of the Capital Stock,
authorized, issued and outstanding, of such classes and series, with or without
par value, described on Schedule II hereto. All such outstanding Capital Stock
has been duly authorized and validly issued and is fully paid and nonassessable.
Except as set forth in the Disclosure Documents, there are no outstanding
warrants, subscriptions, options, securities, instruments or other rights of any
type or nature whatsoever, which are convertible into, exchangeable for or
otherwise provide for or permit the issuance of, Capital Stock of the Borrower
or any Subsidiary of the Borrower or are otherwise exercisable by any Person.

p.     The Borrower and each Subsidiary of the Borrower has good and marketable
title to all material assets and other property purported to be owned by it.

q.     None of the properties or assets of the Borrower is subject to any Lien,

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except Permitted Liens.

r.     All written information, reports and other papers and data produced by or
on behalf of the Borrower and furnished to the Administrative Agent and the
Lenders in connection with the matters covered by this Agreement were, at the
time the same were so furnished, complete and correct in all material respects.
No document furnished or written statement made to the Administrative Agent or
the Lenders by the Borrower in connection with the negotiation, preparation or
execution of this Agreement or any other Loan Documents contains or will contain
any untrue statement of a fact material to the creditworthiness of the Borrower
or its Subsidiaries or omits or will omit to state a fact necessary in order to
make the statements contained therein not misleading.

s.     The performance of this Agreement and the transactions contemplated
herein will not affect the status of any Bonds as being exempt from Federal
income tax under the Code.

t.     None of the Borrower, any Subsidiary, or any Affiliate of the Borrower:
(i) is a person named on the list of Specially Designated Nationals or Blocked
Persons maintained by the U.S. Department of the Treasury's Office of Foreign
Assets Control (“OFAC”) available at
http://www.treas.gov/offices/enforcement/ofac/index.shtml, or as otherwise
published from time to time; (ii) is (A) an agency of the government of a
country, (B) an organization controlled by a country, or (C) a person resident
in a country that is subject to a sanctions program identified on the list
maintained by OFAC and available at
http://www.treas.gov/offices/enforcement/ofac/index.shtml, or as otherwise
published from time to time, as such program may be applicable to such agency,
organization or person; or (iii) derives any of its assets or operating income
from investments in or transactions with any such country, agency, organization
or person; and none of the proceeds from the Loan will be used to finance any
operations, investments or activities in, or make any payments to, any such
country, agency, organization, or person. The Lenders hereby notify the Borrower
that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L.
107-56) (signed into law October 26, 2001) (the “Patriot Act”), they are
required to obtain, verify and record information that identifies the Borrower,
which information includes the name and address of the Borrower and other
information that will allow the Lenders to identify the Borrower in accordance
with the Patriot Act.

u.     Except as disclosed in the Disclosure Documents or to the extent that the
resulting violation or liability would not reasonably be expected to result
individually or in the aggregate, in a Material Adverse Effect, all properties
now or in the past owned, leased or operated by the Borrower and each Subsidiary
thereof now or in the past do not contain, and to their knowledge have not
previously contained, any Hazardous Materials in amounts or concentrations which
(A) constitute or constituted a violation of applicable Environmental Laws or
(B) could give rise to liability under applicable Environmental Laws.

v.     Except as disclosed in the Disclosure Documents or to the extent that the
resulting violation or liability would not reasonably be expected to result
individually or in the aggregate, in a Material Adverse Effect, to the knowledge
of the Borrower and its Subsidiaries, the Borrower and each Subsidiary thereof
and such properties and all operations conducted in connection therewith are in
compliance, and have been in compliance, with all applicable Environmental Laws,
and there is no contamination at, under or about such

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properties or such operations which could interfere with the continued operation
of such properties or impair the fair saleable value thereof.

w.     Except as disclosed in the Disclosure Documents or to the extent that the
resulting violation or liability would not reasonably be expected to result
individually or in the aggregate, in a Material Adverse Effect, neither the
Borrower nor any Subsidiary thereof has received any written or verbal notice of
violation, alleged violation, non-compliance, liability or potential liability
regarding environmental matters, Hazardous Materials, or compliance with
Environmental Laws, nor does the Borrower or any Subsidiary thereof have
knowledge or reason to believe that any such notice will be received or is being
threatened.

x.     Except as disclosed in the Disclosure Documents or to the extent that the
resulting violation or liability would not reasonably be expected to result
individually or in the aggregate, in a Material Adverse Effect, to the knowledge
of the Borrower and its Subsidiaries, Hazardous Materials have not been disposed
of, on or transported to or from the properties now or in the past owned, leased
or operated by the Borrower or any Subsidiary thereof in violation of, or in a
manner or to a location which could give rise to liability under, Environmental
Laws, nor have any Hazardous Materials been generated, treated, stored or
disposed of at, on or under any of such properties in violation of, or in a
manner that could give rise to liability under, any applicable Environmental
Laws.

y.     Except as disclosed in the Disclosure Documents or to the extent that the
resulting violation or liability would not reasonably be expected to result
individually or in the aggregate, in a Material Adverse Effect, no judicial
proceedings or governmental or administrative action is pending, or, to the
knowledge of the Borrower, threatened, under any Environmental Law to which the
Borrower or any Subsidiary thereof is or will be named as a potentially
responsible party with respect to such properties or operations conducted in
connection therewith, nor are there any consent decrees or other decrees,
consent orders, administrative orders or other orders, or other administrative
or judicial requirements outstanding under any Environmental Law with respect to
the Borrower, any Subsidiary thereof or such properties or such operations that
could reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.

z.     Except as disclosed in the Disclosure Documents or to the extent that the
resulting violation or liability would not reasonably be expected to result
individually or in the aggregate, in a Material Adverse Effect, there has been
no release, or to the Borrower's knowledge, threat of release, of Hazardous
Materials at or from properties owned, leased or operated by the Borrower or any
Subsidiary, now or in the past, in violation of or in amounts or in a manner
that could give rise to liability under Environmental Laws.

[End of Article V]

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ARTICLE VI
COVENANTS OF THE COMPANY

Section 6.01 Affirmative Covenants.
Until the Obligations have been finally and indefeasibly paid and satisfied in
full, the Borrower will, and will cause each of its Subsidiaries, unless the
Required Lenders shall otherwise consent in writing, to:
a.Preservation of Existence, Etc. Preserve and maintain, and cause each of its
Subsidiaries to preserve and maintain, its corporate or company, as applicable,
existence, material rights (statutory and otherwise) and franchises, and take
such other action as may be necessary or advisable to preserve and maintain its
right to conduct its business in the states where it shall be conducting its
business, except where failure to do so does not result in, or could not
reasonably be expected to have, a Material Adverse Effect.

b.Maintenance of Properties, Etc. Maintain, and cause each of its Subsidiaries
to maintain, good and marketable title to all of its properties which are used
or useful in the conduct of its business, and preserve, maintain, develop and
operate, and cause each of its Subsidiaries to preserve, maintain, develop and
operate, in substantial conformity with all laws and material contractual
obligations, all such properties in good working order and condition, ordinary
wear and tear excepted, except where such failure would not result in a Material
Adverse Effect.

c.Ownership. Cause the Borrower to own, at all times, 100% of the Capital Stock
having voting rights of South Jersey Gas.

d.Compliance with Material Contractual Obligations, Laws, Etc. Comply, and cause
each of its Subsidiaries to comply, with the requirements of all material
contractual obligations and all applicable laws, rules, regulations and orders,
the failure to comply with which could reasonably be expected to result in a
Material Adverse Effect, such compliance to include, without limitation, paying
before the same become delinquent all Taxes, assessments and governmental
charges imposed upon it or upon its property except to the extent diligently
contested in good faith and by appropriate proceedings and for which adequate
reserves for the payment thereof have been established, and complying with the
requirements of all applicable Environmental Laws, and other health and safety
matters.

e.Insurance. Maintain, and cause each of its Subsidiaries to maintain, insurance
with financially sound and reputable insurance companies or associations in such
amounts and covering such risks as are usually carried by companies engaged in
the same or similar businesses and similarly situated.

f.Visitation Rights; Keeping of Books. At any reasonable time and from time to
time, upon reasonable advance notice, permit the Administrative Agent or any of
the Lenders or any agents or representatives thereof, to examine and make copies
of and abstracts from the records and books of account of, and visit the
properties of, the Borrower and any of its Subsidiaries, and to discuss the
affairs, finances and accounts of the Borrower and any of its Subsidiaries with
any of their respective officers or directors and with their respective

--------------------------------------------------------------------------------

independent certified public accountants and keep proper books of record and
account, in which full and correct entries shall be made of all financial
transactions and the assets and liabilities of the Borrower in accordance with
GAAP, consistent with the procedures applied in the preparation of the financial
statements referred to in Section 5.01(f) hereof.

g.Transactions with Affiliates. Conduct, and cause each of its Subsidiaries to
conduct, all transactions otherwise permitted under this Agreement with any of
its Affiliates on terms that are fair and reasonable and no less favorable to
the Borrower or such Subsidiary than it would obtain in a comparable
arm's‑length transaction with a Person not an Affiliate.

h.Use of Proceeds. Use the proceeds of the facility created by this Agreement
solely for general corporate purposes, including, without limitation, working
capital needs of the Borrower, or its Subsidiaries.

i.Loan Documents. Perform and comply in all material respects with each of the
provisions of each Loan Document to which it is a party.

j.Risk Management. Perform and comply in all material respects, and require its
Subsidiaries to perform and comply in all material respects, with any risk
management policies developed by the Borrower, including such policies, if
applicable, related to (i) the retail and wholesale inventory distribution and
trading procedures and (ii) dollar and volume limits.

k.OFAC Compliance. Comply with any obligations that it may have under the
Patriot Act, all laws and executive orders administered by OFAC and all
regulations promulgated and executive orders having the force of law issued
pursuant thereto, as amended or supplemented from time to time (collectively,
“AML and Anti-Terrorist Acts”). In the event that the Borrower becomes aware
that it is not in compliance with any applicable AML and Anti-Terrorist Acts,
the Borrower shall notify the Administrative Agent and diligently take all
actions required thereunder to become compliant.

l.Further Assurances. At the expense of the Borrower, promptly execute and
deliver, or cause to be promptly executed and delivered, all further instruments
and documents, and take and cause to be taken all further actions, that may be
reasonably necessary or that the Required Lenders through the Administrative
Agent may reasonably request, to enable the Lenders and the Administrative Agent
to enforce the terms and provisions of this Agreement and the Loan Documents and
to exercise their rights and remedies hereunder. In addition, the Borrower will
use all reasonable efforts to duly obtain Governmental Actions required from
time to time on or prior to such date as the same may become legally required,
and thereafter to maintain all such Governmental Actions in full force and
effect, except where such failure would not result in a Material Adverse Effect.

m.Compliance with ERISA. (i) Except where the failure to so comply could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, (x) comply with applicable provisions of ERISA and the
regulations and published interpretations thereunder with respect to all
Employee Benefit Plans, (y) not take any action or fail to take action the
result of which could reasonably be expected to result in a liability

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to the PBGC or to a Multiemployer Plan, (z) not participate in any prohibited
transaction that could result in any civil penalty under ERISA or tax under the
Code and (zz) operate each Employee Benefit Plan in such a manner that will not
incur any tax liability under Section 4980B of the Code or any liability to any
qualified beneficiary as defined in Section 4980B of the Code and (ii) furnish
to the Administrative Agent upon the Administrative Agent's request such
additional information about any Employee Benefit Plan as may be reasonably
requested by the Administrative Agent.

n.Environmental Notices. The Borrower shall furnish to the Administrative Agent,
on behalf of the Lenders prompt written notice of all Environmental Liabilities,
pending, threatened or anticipated Environmental Proceedings, Environmental
Notices, Environmental Judgments and Orders, and Environmental Releases at, on,
in, under or in any way affecting its properties or, to the extent the Borrower
has actual notice thereof, any adjacent property, and all facts, events or
conditions that could lead to any of the foregoing; provided that the Borrower
shall not be required to give such notice unless it reasonably believes that any
of the foregoing, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect.

o.Environmental Matters. Except where it could not reasonably be expected to
have a Material Adverse Effect, the Borrower will not use, produce, manufacture,
process, generate, store, dispose of, manage at, or ship or transport to or from
its properties any Hazardous Materials other than as disclosed to the Lenders in
writing at or prior to the Closing Date except for (i) Hazardous Materials used,
produced, manufactured, processed, generated, stored, disposed of or managed in
the ordinary course of business in material compliance with all applicable
Environmental Requirements or (ii) other Hazardous Materials the unlawful
handling, discharge or disposal of which, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.

p.Environmental Release. Upon becoming aware of the occurrence of an
Environmental Release that could reasonably be expected to have a Material
Adverse Effect, the Borrower will promptly investigate the extent of, and comply
in all material respects with all applicable Federal, state and local statutes,
rules, regulations, orders and other provisions of law relating to Hazardous
Materials, air emissions, water discharge, noise emission and liquid disposal,
and other environmental, health and safety matters, other than those the
noncompliance with which would not have a Material Adverse Effect.

Section 6.02 Negative Covenants.
Until all of the Obligations have been finally and indefeasibly paid and
satisfied in full, the Borrower will not, and will not cause or permit any of
its Subsidiaries, without the written consent of the Required Lenders, to:
a.Liens, Etc. Except as permitted in Section 6.02(c), create, incur, assume, or
suffer to exist, or permit any of its Subsidiaries to create, incur, assume, or
suffer to exist, any Lien other than Permitted Liens.

b.Indebtedness. Create or suffer, or permit any Subsidiary to create or suffer,
to exist any Indebtedness except for Permitted Indebtedness.

c.Obligation to Ratably Secure. Except as permitted by Section 6.02(a), create

--------------------------------------------------------------------------------

or suffer to exist, or permit any of its Subsidiaries to create or suffer to
exist, any Lien other than a Permitted Lien, in each case to secure or provide
for the payment of Indebtedness, unless, on or prior to the date thereof, the
Borrower shall have (i) pursuant to documentation reasonably satisfactory to the
Administrative Agent and Required Lenders, equally and ratably secured the
Obligations of the Borrower under this Agreement by a Lien acceptable to the
Administrative Agent and Required Lenders, and (ii) caused the creditor or
creditors, as the case may be, in respect of such Indebtedness to have entered
into an intercreditor agreement in form, scope and substance reasonably
satisfactory to the Administrative Agent and the Required Lenders.

d.Mergers, Etc. Merge or consolidate with or into any Person, or permit any of
its Subsidiaries to do so, except that (i) any Subsidiary of the Borrower may
merge or consolidate with or into, any other Subsidiary of the Borrower and (ii)
any Subsidiary of the Borrower may merge or consolidate with and into the
Borrower; provided, that the Borrower is the surviving corporation; provided,
further, that in each case, immediately after giving effect to such proposed
transaction, no Event of Default or Default would exist.

e.Sale of Assets, Etc. Sell, transfer, lease, assign or otherwise convey or
dispose, or permit any Subsidiary to sell, transfer, lease, assign or otherwise
convey or dispose, of assets (whether now owned or hereafter acquired), in any
single transaction or series of transactions, whether or not related having an
aggregate book value in excess of 10% of the Consolidated assets of the Borrower
and its Consolidated Subsidiaries, except for dispositions of capital assets in
the ordinary course of business as presently conducted.

f.Restricted Investments. Other than in the ordinary course of business (i) make
or permit to exist any loans or advances to, or any other investment in, any
Person except for investments in Permitted Investments, or (ii) acquire any
assets or property of any other Person.

g.New Business. Permit the Borrower or any of its Subsidiaries to enter into any
business, in any material respect, which is not similar to that existing on the
Closing Date.

h.Distributions. Pay any dividends on or make any other distributions in respect
of any Capital Stock or redeem or otherwise acquire any such Capital Stock
without in each instance obtaining the prior written consent of the Required
Lenders; provided, that (i) any Subsidiary of the Borrower may pay regularly
scheduled dividends or make other distributions to the Borrower; and (ii) if no
Default or Event of Default exists or would result therefrom, the Borrower may
pay distributions or dividends in either cash or Capital Stock or may redeem or
otherwise acquire Capital Stock.

i.Constituent Documents, Etc. Change in any material respect the nature of its
certificate of incorporation, bylaws, or other similar documents, or accounting
policies or accounting practices (except as required or permitted by the
Financial Accounting Standards Board or GAAP).

j.Fiscal Year. Change its Fiscal Year.

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Section 6.03 Reporting Requirements.
So long as any Term Loans shall be outstanding hereunder or the Borrower shall
have any obligation to pay any amount to the Administrative Agent or any Lender
hereunder, the Borrower will, unless the Required Lenders shall otherwise
consent in writing, provide to the Administrative Agent:
a.as soon as available and in any event within sixty (60) days after the end of
each of the first three quarters of each fiscal year of the Borrower, a
consolidated and consolidating balance sheet of the Borrower and its
Consolidated Subsidiaries as at the end of such quarter and consolidated and
consolidating statements of income, retained earnings and cash flows of the
Borrower and its Consolidated Subsidiaries for the period commencing at the end
of the previous fiscal year and ending with the end of such quarter, all in
reasonable detail and duly certified by the chief financial officer or the
treasurer of the Borrower as fairly presenting in all material respects the
financial condition of the Borrower and its Consolidated Subsidiaries as at such
date and the results of operations of the Borrower and its Consolidated
Subsidiaries for the periods ended on such date, except for normal year end
adjustments, all in accordance with GAAP consistently applied (for purposes
hereof delivery of the Borrower's appropriately completed Form 10‑Q will be
sufficient in lieu of delivery of such consolidated balance sheet and
consolidated statements of income, retained earnings and cash flows), together
with a Compliance Certificate, in the form of Exhibit G, of the chief financial
officer or the treasurer of the Borrower (i) demonstrating and certifying
compliance by the Borrower with the covenants set forth in Section 6.04 and (ii)
stating that no Event of Default or Default has occurred and is continuing or,
if an Event of Default or Default has occurred and is continuing, a statement as
to the nature thereof and the action which the Borrower has taken and proposes
to take with respect thereto;

b.as soon as available and in any event within one hundred five (105) days after
the end of each fiscal year of the Borrower, a copy of the annual report for
such year for the Borrower and its Consolidated Subsidiaries, containing
consolidated and consolidating financial statements for such year certified by,
and accompanied by an unqualified opinion of, independent public accountants
reasonably acceptable to the Administrative Agent (for purposes hereof, delivery
of the Borrower's appropriately completed Form 10‑K will be sufficient in lieu
of delivery of such financial statements), together with a Compliance
Certificate, in the form of Exhibit G, of the chief financial officer or the
treasurer of the Borrower (i) demonstrating and certifying compliance by the
Borrower with the covenants set forth in Section 6.04 and (ii) stating that no
Event of Default or Default has occurred and is continuing or, if an Event of
Default or Default has occurred and is continuing, a statement as to the nature
thereof and the action which the Borrower has taken and proposes to take with
respect thereto;

c.as soon as possible and in any event within five (5) days after the occurrence
of each Event of Default and each Default known to the Borrower, a statement of
the chief financial officer of the Borrower setting forth details of such Event
of Default or Default and the action which the Borrower has taken and proposes
to take with respect thereto;

d.upon the Borrower obtaining knowledge of the following, the Borrower will give
written notice to the Administrative Agent promptly (and in any event within ten
Business Days) of any of the following: (i) any unfavorable determination letter
from the Internal Revenue Service regarding the qualification of an Employee
Benefit Plan under

--------------------------------------------------------------------------------

Section 401(a) of the Code (along with a copy thereof); (ii) all notices
received by the Borrower or any ERISA Affiliate of the PBGC's intent to
terminate any Pension Plan or to have a trustee appointed to administer any
Pension Plan; (iii) all notices received by the Borrower or any ERISA Affiliate
from a Multiemployer Plan sponsor concerning the imposition or amount of
withdrawal liability in the amount of at least $1,000,000 pursuant to Section
4202 of ERISA; and (iv) the Borrower or any ERISA Affiliate has filed or intends
to file a notice of intent to terminate any Pension Plan under a distress
termination within the meaning of Section 4041(c) of ERISA;

e.as soon as possible and in any event within five (5) days after the Borrower
becomes aware of the occurrence thereof, notice of all actions, suits,
proceedings or other events (i) of the type described in Section 5.01(e) or (ii)
for which the Administrative Agent or the Lenders will be entitled to indemnity
under Section 10.05;

f.as soon as possible and in any event within five (5) days after the sending or
filing thereof, copies of all material reports that the Borrower sends to any of
its security holders, and copies of all reports and registration statements
which the Borrower or any of its Subsidiaries files with the Securities and
Exchange Commission or any national securities exchange;

g.as soon as possible and in any event within five (5) days after requested,
such other information respecting the business, properties, assets, liabilities
(actual or contingent), results of operations, prospects, condition or
operations, financial or otherwise, of the Borrower or any Subsidiary thereof as
any Lender through the Administrative Agent may from time to time reasonably
request;

h.from time to time and promptly upon each request, information with respect to
the Borrower as a Lender may reasonably request in order to comply with the
Patriot Act; and

i.    promptly, upon knowledge of any change in the Debt Rating, a certificate
stating that the Debt Rating has changed with evidence of the new Debt Rating.
Information required to be delivered pursuant to this Section 6.03 shall be
deemed to have been delivered if such information shall have been posted by the
Borrower on an Intralinks or similar site to which the Administrative Agent has
been granted access or shall be available on the website of the Securities and
Exchange Commission at http://www.sec.gov and the Borrower shall have notified
the Administrative Agent of the availability of all Form 10-Q and Form 10-K
reports; provided that, if requested by the Administrative Agent or any Lender,
the Borrower shall deliver a paper copy of such information to the
Administrative Agent or such Lender. Information required to be delivered
pursuant to this Section 6.03 may also be delivered by electronic communications
pursuant to procedures reasonably approved by the Administrative Agent.
The Borrower hereby acknowledges that (a) the Administrative Agent and/or the
Arranger will make available to the Lenders materials and/or information
provided by or on behalf of the Borrower hereunder that have been approved by
the Borrower in writing including via electronic transmission (collectively,
“Informational Materials”) by posting the Informational Materials on SyndTrak
Online or another similar electronic means

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(collectively, the “Electronic Means”) and (b) certain prospective Lenders
(“Public Lenders”) may not wish to receive material non-public information
(within the meaning of the United States federal securities laws, “MNPI”) with
respect to the Borrower or its Affiliates or any of their respective securities,
and who may be engaged in investment and other market-related activities with
respect to such entities' securities. Lenders will assume that all Informational
Materials, other than publicly available Informational Materials filed pursuant
to the Exchange Act or posted on Borrower's website, include MNPI. The Borrower
hereby agrees that in the event any Informational Materials will not contain
MNPI, Borrower will notify Administrative Agent in writing (except with respect
to Informational Materials filed pursuant to the Exchange Act, or posted on
Borrower's website, which shall be deemed public) and the Borrower shall be
deemed to have authorized the Administrative Agent and the Lenders to treat such
Informational Materials as not containing any MNPI (although it may be sensitive
and proprietary) with respect to the Borrower or its securities for purposes of
United States Federal and state securities laws (provided, however, that to the
extent such Informational Materials constitute Information, such Information
shall be treated as set forth in Section 10.16 hereof). Before distribution of
any Informational Materials (a) to prospective Private Lenders, Borrower shall
provide the Administrative Agent with written authorization (including email)
authorizing the dissemination of the Informational Materials and (b) to
prospective Public Lenders, Borrower shall provide the Administrative Agent with
written authorization (including email) authorizing the dissemination of the
Informational Materials and confirming, to the Borrower's knowledge, the absence
of MNPI therefrom.
Section 6.04 Financial Covenants.
So long as the Borrower shall have any obligation to pay any amount to the
Administrative Agent or any Lender hereunder, the Borrower will, unless the
Required Lenders shall otherwise consent in writing, maintain at the end of each
fiscal quarter a ratio of Indebtedness of the Borrower and its Subsidiaries on a
consolidated basis to Consolidated Total Capitalization of not more than 0.65 to
1.0.

[End of Article VI]

ARTICLE VII
EVENTS OF DEFAULT
Section 7.01 Events of Default.    
Each of the following events should they occur and be continuing shall
constitute an “Event of Default”:
a.The Borrower shall fail to pay (i) any amount of principal when the same
becomes due and payable or (ii) any interest, fees or any other amount payable
hereunder within five (5) Business Days of when the same becomes due and
payable; or

b.Any representation or warranty made by or on behalf of the Borrower or any
Subsidiary in this Agreement, any Loan Document or by or on behalf of the
Borrower or any Subsidiary (or any of their officers) in connection with this
Agreement, any Loan

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Document shall prove to have been incorrect in any material respect when made or
deemed made; or

c.The Borrower shall fail (i) to perform or observe any term, covenant or
agreement contained in Section 6.01(a), (c), (e), (g), (h), (i) or (j), Section
6.02(a), (b), (c), (d), (e), (f), (g), (h), or (j), Section 6.03 or Section
6.04, or (ii) to perform or observe any other term, covenant or agreement
contained in this Agreement (other than obligations specifically set forth
elsewhere in this Section 7.01) on its part to be performed or observed if the
failure to perform or observe such other term, covenant or agreement, shall
remain unremedied for thirty (30) days after written notice thereof shall have
been given to the Borrower by the Administrative Agent or any Lender; or

d.The Borrower or any Significant Subsidiary thereof shall fail to pay any
principal of or premium or interest on any Indebtedness (other than Indebtedness
incurred under this Agreement) thereof in the aggregate (for all such Persons)
in excess of $25,000,000, when the same becomes due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise), and
such failure shall continue after the applicable grace period, if any, specified
in the agreement or instrument relating to such Indebtedness; or any other event
shall occur or condition shall exist under any agreement or instrument relating
to any such Indebtedness and shall continue after the applicable grace period,
if any, specified in such agreement or instrument, if the effect of such event
or condition is to accelerate, or to permit the acceleration of, the maturity of
such Indebtedness; or any such Indebtedness shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof; or

e.The Borrower or any Significant Subsidiary thereof shall generally not pay its
debts as such debts become due, or shall admit in writing its inability to pay
its debts generally, or shall make a general assignment for the benefit of
creditors, or any proceeding shall be instituted by or against the Borrower or a
Significant Subsidiary thereof seeking to adjudicate it a bankrupt or insolvent,
or seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee,
custodian or other similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted against it (but not
instituted by it), such proceeding shall remain undismissed or unstayed for a
period of forty-five (45) days, any of the actions sought in such proceeding
(including, without limitation, the entry of an order for relief against, or the
appointment of a receiver, trustee, custodian or other similar official for, it
or for any substantial part of its property) shall occur or the Borrower or a
Significant Subsidiary thereof shall consent to or acquiesce in any such
proceeding; or the Borrower or a Significant Subsidiary thereof shall take any
corporate action to authorize any of the actions set forth above in this
subsection (e); or

f.Any judgments or orders for the payment of money in excess of $25,000,000 (in
the aggregate) shall be rendered against the Borrower or any Significant
Subsidiary thereof and either (i) enforcement proceedings shall have been
commenced by any creditor upon any such judgment or order or (ii) there shall be
any period of ten (10) consecutive days during which a stay of enforcement of
any such judgment or order, by reason of a

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pending appeal or otherwise, shall not be in effect; or

g.The obligations of the Borrower or any Subsidiary under this Agreement, any
other Loan Document shall become unenforceable, or the Borrower or any
Subsidiary, or any court or governmental or regulatory body having jurisdiction
over the Borrower or any Subsidiary, shall so assert in writing or the Borrower
or any Subsidiary shall contest in any manner the validity or enforceability
thereof; or

h.The occurrence of a Termination Event; or

i.Any Governmental Approval shall be rescinded, revoked, otherwise terminated,
or amended or modified in any manner which is materially adverse to the
interests of the Lenders and the Administrative Agent; or

j.An “Event of Default” or “Default” under the SJG Credit Agreement; or

k.A Change in Control shall occur.

Section 7.02 Upon an Event of Default.    
Upon the occurrence of an Event of Default, with the consent of the Required
Lenders, the Administrative Agent may, or upon the request of the Required
Lenders, the Administrative Agent shall, by notice to the Borrower, declare the
principal of and interest on the Loans, the Notes and the other Obligations
(except for Hedging Obligations, which shall be governed by the terms and
conditions of the documents controlling such obligations) at the time
outstanding, and all other amounts owed to the Lenders and to the Administrative
Agent under this Agreement, to be forthwith due and payable, whereupon the same
shall immediately become due and payable without presentment, demand, protest or
other notice of any kind, all of which are expressly waived, anything in this
Agreement to the contrary notwithstanding; provided, that upon the occurrence of
an Event of Default specified in Section 7.01(e), all Obligations (except for
Hedging Obligations, which shall be governed by the terms and conditions of the
documents controlling such obligations) shall automatically become due and
payable without presentment, demand, protest or other notice of any kind, all of
which are expressly waived, anything in this Agreement or in any other Loan
Document to the contrary notwithstanding,.
Section 7.03 Rights and Remedies Cumulative; Non-Waiver; Etc.
The enumeration of the rights and remedies of the Administrative Agent and the
Lenders set forth in this Agreement is not intended to be exhaustive, and the
exercise by the Administrative Agent and the Lenders of any right or remedy
shall not preclude the exercise of any other rights or remedies, all of which
shall be cumulative, and shall be in addition to any other right or remedy given
hereunder or that may now or hereafter exist in law or in equity or by suit or
otherwise. No delay or failure to take action on the part of the Administrative
Agent or any Lender in exercising any right, power or privilege shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right,
power or privilege preclude other or further exercise thereof or the exercise of
any other right, power or privilege or shall be construed to be a waiver of any
Event of Default. No course of dealing between the Borrower, the Administrative
Agent and the Lenders or their respective agents or employees shall be effective
to change, modify or discharge any provision of this Agreement or any of the
other Loan Documents or to constitute a waiver of any Event of

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Default.
[End of Article VII]

ARTICLE VIII
[Reserved]

[End of Article VIII]

ARTICLE IX
THE ADMINISTRATIVE AGENT
Article 9.01 Appointment and Authority.
Each of the Lenders hereby irrevocably designates and appoints JPMorgan to act
on its behalf as the Administrative Agent hereunder and under the other Loan
Documents and authorizes the Administrative Agent to take such actions on its
behalf and to exercise such powers as are delegated to the Administrative Agent
by the terms hereof or thereof, together with such actions and powers as are
reasonably incidental thereto. The provisions of this Article are solely for the
benefit of the Administrative Agent and the Lenders, and neither the Borrower
nor any Subsidiary thereof shall have rights as a third party beneficiary of any
of such provisions.
Article 9.02 Rights as a Lender.
The Person serving as the Administrative Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent and the term
“Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the
context otherwise requires, include the Person serving as the Administrative
Agent hereunder in its individual capacity. Such Person and its Affiliates may
accept deposits from, lend money to, act as the financial advisor or in any
other advisory capacity for and generally engage in any kind of business with
the Borrower or any Subsidiary or other Affiliate thereof as if such Person were
not the Administrative Agent hereunder and without any duty to account therefor
to the Lenders.
Article 9.03 Exculpatory Provisions.
The Administrative Agent shall not have any duties or obligations except those
expressly set forth herein and in the other Loan Documents. Without limiting the
generality of the foregoing, the Administrative Agent:
a.shall not be subject to any fiduciary or other implied duties, regardless of
whether a Default has occurred and is continuing;

b.shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that the Administrative Agent
is required to exercise as directed in writing by the Required Lenders (or such
other number or percentage of the

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Lenders as shall be expressly provided for herein or in the other Loan
Documents), provided that the Administrative Agent shall not be required to take
any action that, in its opinion or the opinion of its counsel, may expose the
Administrative Agent to liability or that is contrary to any Loan Document or
applicable law, including for the avoidance of doubt any action that may be in
violation of the automatic stay under any Debtor Relief Law or that may effect a
forfeiture, modification or termination of property of a Defaulting Lender in
violation of any Debtor Relief Law.

c.shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to the Borrower or any of its Affiliates that
is communicated to or obtained by the Person serving as the Administrative Agent
or any of its Affiliates in any capacity.

The Administrative Agent shall not be liable for any action taken or not taken
by it (i) with the consent or at the request of the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Section 10.01) or (ii) in the absence of its own
gross negligence or willful misconduct as determined by a court of competent
jurisdiction by final nonappealable judgment. The Administrative Agent shall be
deemed not to have knowledge of any Default unless and until notice describing
such Default is given to the Administrative Agent by the Borrower or a Lender.
The Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document or (v) the satisfaction
of any condition set forth in Article IV or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to the
Administrative Agent.
Section 9.04 Reliance by Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing (including any electronic
message, Internet or intranet website posting or other distribution) believed by
it to be genuine and to have been signed, sent or otherwise authenticated by the
proper Person. The Administrative Agent also may rely upon any statement made to
it orally or by telephone and believed by it to have been made by the proper
Person, and shall not incur any liability for relying thereon. In determining
compliance with any condition hereunder to the making of a Loan that by its
terms must be fulfilled to the satisfaction of a Lender, the Administrative
Agent may presume that such condition is satisfactory to such Lender unless the
Administrative Agent shall have received notice to the contrary from such Lender
prior to the making of such Loan. The Administrative Agent may consult with
legal counsel (who may be counsel for the Borrower), independent accountants and
other experts selected by it, and shall not be liable for any action taken or
not taken by it in accordance with the advice of any such counsel, accountants
or experts.

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Section 9.05 Delegation of Duties.
The Administrative Agent may perform any and all of its duties and exercise its
rights and powers hereunder or under any other Loan Document by or through any
one or more sub-agents appointed by the Administrative Agent. The Administrative
Agent and any such sub-agent may perform any and all of its duties and exercise
its rights and powers by or through their respective Related Parties. The
exculpatory provisions of this Article shall apply to any such sub-agent and to
the Related Parties of the Administrative Agent and any such sub-agent, and
shall apply to their respective activities in connection with the syndication of
the facilities created under this Agreement as well as activities as Agent.
Section 9.06 Resignation of Administrative Agent.
The Administrative Agent may at any time give notice of its resignation to the
Lenders and the Borrower. Upon receipt of any such notice of resignation, the
Required Lenders shall have the right, in consultation with the Borrower, to
appoint a successor, which shall be a bank with an office in the United States,
or an Affiliate of any such bank with an office in the United States. If no such
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Administrative Agent
gives notice of its resignation, then the retiring Administrative Agent may on
behalf of the Lenders appoint a successor Administrative Agent meeting the
qualifications set forth above provided that if the Administrative Agent shall
notify the Borrower and the Lenders that no qualifying Person has accepted such
appointment, then such resignation shall nonetheless become effective in
accordance with such notice and (a) the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents (except that in the case of any collateral security held by the
Administrative Agent on behalf of the Lenders or the under any of the Loan
Documents, the retiring Administrative Agent shall continue to hold such
collateral security until such time as a successor Administrative Agent is
appointed) and (b) all payments, communications and determinations provided to
be made by, to or through the Administrative Agent shall instead be made by or
to each Lender directly, until such time as the Required Lenders appoint a
successor Administrative Agent as provided for above in this Section. Upon the
acceptance of a successor's appointment as Administrative Agent hereunder, such
successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring (or retired) Administrative Agent, and the
retiring Administrative Agent shall be discharged from all of its duties and
obligations hereunder or under the other Loan Documents (if not already
discharged therefrom as provided above in this Section). The fees payable by the
Borrower to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrower and such
successor. After the retiring Administrative Agent's resignation hereunder and
under the other Loan Documents, the provisions of this Article and Section 10.05
shall continue in effect for the benefit of such retiring Administrative Agent,
its sub-agents and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while the retiring Administrative
Agent was acting as Administrative Agent.
Section 9.07 Non‑Reliance on Administrative Agent and Other Lenders.
Each Lender acknowledges that it has, independently and without reliance upon
the

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Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document or any related
agreement or any document furnished hereunder or thereunder.
Section 9.08 No Other Duties, etc.
Anything herein to the contrary notwithstanding, none of the syndication agents,
documentation agents, co-agents, book runner, lead manager, arranger or lead
arranger listed on the cover page or signature pages hereof shall have any
powers, duties or responsibilities under this Agreement or any of the other Loan
Documents, except in its capacity, as applicable, as the Administrative Agent or
a Lender hereunder.
[End of Article IX]

ARTICLE X
MISCELLANEOUS

Section 10.01 Amendments, Etc.
No amendment or waiver of any provision of this Agreement, nor consent to any
departure by the Borrower therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Required Lenders and the Borrower,
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided, no such waiver and no
such amendment, supplement or modification shall, (a) extend the Maturity Date
or the maturity of any Loan, or reduce the rate or extend the time of payment of
interest in respect thereof, or reduce any fee payable to any Lender hereunder
or extend the time for the payment thereof, in each case without the written
consent of all the Lenders, (b) amend, modify or waive any provision of this
Section 10.01 or Section 10.09(d) or reduce the percentage specified in the
definition of Required Lenders, or consent to the assignment or transfer by the
Borrower of any of its rights and obligations under this Agreement, in each case
without the written consent of all the Lenders, (c) amend, modify or waive any
provision of Article IX without the written consent of the Administrative Agent,
(d) waive, modify or eliminate any of the conditions precedent specified in
Article IV, in each case without the written consent of all the Lenders or (e)
forgive principal, interest, fees or other amounts payable hereunder without the
written consent of all the Lenders.
Section 10.02 Notices, Etc.
All notices and other communications provided for hereunder shall be in writing
(including telegraphic communication) and mailed, telecopied, telegraphed or
delivered as follows:
The Borrower:
South Jersey Industries, Inc.

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1 South Jersey Plaza
Folsom, New Jersey 08037
Attention: Stephen H. Clark
Telecopy No.: (609) 561-8225
With a copy to:
Cozen O'Connor
The Atrium
1900 Market Street
Philadelphia, Pennsylvania 19103

Attention: Richard J. Busis, Esq.
Telecopy No.: (215) 665-2013

The Administrative Agent:

JPMorgan Chase Bank, N.A.
10 S. Dearborn Street
Floor 7, Mail Code IL1-0010
Chicago, IL 60603
Attention: Joyce King
Facsimile: 888-292-9533
Telephone: 312-385-7025
Email: Joyce.P.King@jpmchase.com

With a copy, except with respect to the Borrowing Request and any Interest
Election Request, to:

JPMorgan Chase Bank, N.A.

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10 S. Dearborn Street
Floor 9, Mail Code IL1-0090
Chicago, IL 60603
Attention: John Zur
Facsimile: 312-732-1762
Telephone: 312-732-1754
Email: John.E.Zur@jpmorgan.com

With a copy, except with respect to the Borrowing Request and any Interest
Election Request, to:

JPMorgan Chase Bank, N.A.
10 S. Dearborn Street
Floor 9, Mail Code IL1-0874
Chicago, IL 60603
Attention: Lisa Tverdek
Facsimile: 312-325-3238
Telephone: 312-325-3150
Email: Lisa.Tverdek@jpmorgan.com
and if to any Lender, at its address or telecopy number set forth on Schedule I
hereto; or, as to each party, at such other address as shall be designated by
such party in a written notice to the other parties. All such notices and
communications shall, when mailed, be effective three (3) days after being
deposited in the mails or when sent by telecopy or telex or delivered to the
telegraph company, respectively, addressed as previously aforesaid.
Section 10.03 No Waiver; Remedies.
No failure on the part of the Administrative Agent or any Lender to exercise,
and no delay in exercising, any right hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.

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Section 10.04 Set‑off.
a.If an Event of Default shall have occurred and be continuing, the
Administrative Agent, each Lender and each of their respective Affiliates is
hereby authorized at any time and from time to time, to the fullest extent
permitted by Applicable Law, to set off and apply any and all deposits (general
or special, time or demand, provisional or final, in whatever currency) at any
time held and other obligations (in whatever currency) at any time owing by the
Administrative Agent, such Lender or any such Affiliate to or for the credit or
the account of the Borrower against any and all of the obligations of the
Borrower now or hereafter existing under this Agreement or any other Loan
Document to such Lender, irrespective of whether or not such Lender shall have
made any demand under this Agreement or any other Loan Document and although
such obligations of the Borrower may be contingent or unmatured or are owed to a
branch or office of such Lender different from the branch or office holding such
deposit or obligated on such indebtedness. The rights of each Lender and their
respective Affiliates under this Section are in addition to other rights and
remedies (including other rights of setoff) that the Administrative Agent, such
Lender or their respective Affiliates may have. Each Lender agrees to notify the
Borrower and the Administrative Agent promptly after any such setoff and
application; provided that the failure to give such notice shall not affect the
validity of such setoff and application.

b.If any Lender shall, by exercising any right of setoff or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of
its Loans or other obligations hereunder resulting in such Lender receiving
payment of a proportion of the aggregate amount of its Loans and accrued
interest thereon or other such obligations greater than its pro rata share
thereof as provided herein, then the Lender receiving such greater proportion
shall (i) notify the Administrative Agent of such fact, and (ii) purchase (for
cash at face value) participations in the Loans and such other obligations of
the other Lenders, or make such other adjustments as shall be equitable, so that
the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans and other amounts owing them; provided that:
i.if any such participations are purchased and all or any portion of the payment
giving rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest; and
ii.the provisions of this paragraph shall not be construed to apply to (A) any
payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement, or (B) any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Loans to any assignee or participant, other than to the Borrower or any
Subsidiary thereof (as to which the provisions of this paragraph shall apply).
The Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of setoff and counterclaim with respect to such participation as
fully as if such Lender were a direct creditor of the Borrower in the amount of
such participation.

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Section 10.05 Indemnification.
The Borrower shall indemnify the Administrative Agent (and any sub-agent
thereof), Arranger, each Lender, and each Related Party of any of the foregoing
Persons (each such Person being called an “Indemnitee”) against, and hold each
Indemnitee harmless from, and shall pay or reimburse any such Indemnitee for,
any and all losses, claims (including, without limitation, any Environmental
Claims or civil penalties or fines assessed by OFAC), damages, liabilities and
related reasonable out-of-pocket expenses (including the fees, charges and
disbursements of any counsel for any Indemnitee), incurred by any Indemnitee or
asserted against any Indemnitee by any third party or by the Borrower arising
out of, in connection with, or as a result of (a) the execution or delivery of
this Agreement, any other Loan Document or any agreement or instrument
contemplated hereby or thereby, the performance by the parties hereto of their
respective obligations hereunder or thereunder or the consummation of the
transactions contemplated hereby or thereby, (b) any Loan or the use or proposed
use of the proceeds therefrom, (c) any actual or alleged presence or Release of
Hazardous Materials on or from any property owned or operated by the Borrower or
any Subsidiary thereof, or any Environmental Claim related in any way to the
Borrower or any Subsidiary, (d) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory, whether brought by a third party or by the
Borrower or any Subsidiary thereof, and regardless of whether any Indemnitee is
a party thereto, or (e) any claim (including, without limitation, any
Environmental Claims or civil penalties or fines assessed by the U.S. Department
of the Treasury's Office of Foreign Assets Control), investigation, litigation
or other proceeding (whether or not the Administrative Agent or any Lender is a
party thereto) and the prosecution and defense thereof, arising out of or in any
way connected with the Loans, this Agreement, any other Loan Document, or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby, including without limitation, reasonable
attorneys and consultant's fees, provided that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses (x) are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of an Indemnitee or (y) result from a claim
brought by the Borrower or any Subsidiary thereof against an Indemnitee for
breach in bad faith of such Indemnitee's obligations hereunder or under any
other Loan Document, if the Borrower or such Subsidiary has obtained a final and
nonappealable judgment in its favor on such claim as determined by a court of
competent jurisdiction.
Nothing in this Section 10.05 is intended to limit the Borrower's obligations
contained in Article II. Without prejudice to the survival of any other
obligation of the Borrower hereunder, the indemnities and obligations of the
Borrower contained in this Section 10.05 shall survive the payment in full of
amounts payable pursuant to Article II.
Section 10.06 [Reserved].

Section 10.07 Costs, Expenses and Taxes.
The Borrower agrees to pay on demand all reasonable costs and expenses in
connection with the preparation, issuance, delivery, filing, recording, and
administration of this Agreement, the Loans and any other documents which may be
delivered in connection

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with this Agreement, including, without limitation, the reasonable fees and
out‑of‑pocket expenses of counsel for the Administrative Agent incurred in
connection with the preparation and negotiation of this Agreement, the Loans,
and any document delivered in connection therewith and all reasonable costs and
expenses incurred by the Administrative Agent (and, in the case of clause (c) or
(d) below, any Lender) (including reasonable fees and out of pocket expenses of
counsel) in connection with (a) with the use of Intralinks Inc., SyndTrak or
other similar information transmission systems in connection with the Loan
Documents, (b) the transfer, drawing upon, change in terms, maintenance, renewal
or cancellation of this Agreement and the Loans, (c) any and all amounts which
the Administrative Agent or any Lender has paid relative to the Administrative
Agent's or such Lender's curing of any Event of Default resulting from the acts
or omissions of the Borrower under this Agreement or any other Loan Document,
(d) the enforcement of, or protection of rights under, this Agreement, any other
Loan Document (whether through negotiations, legal proceedings or otherwise) or
(e) any waivers or consents or amendments to or in respect of this Agreement or
the Loans requested by the Borrower. In addition, the Borrower shall pay any and
all stamp and other Taxes and fees payable or determined to be payable in
connection with the execution, delivery, filing and recording of this Agreement,
the Loans, or any of such other documents, and agrees to save the Administrative
Agent and the Lenders harmless from and against any and all liabilities with
respect to or resulting from any delay in paying or omission to pay such Taxes
and fees. Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower, the
Administrative Agent and the Lenders contained in this Section shall survive the
payment in full of the Obligations.
Section 10.08 [Reserved.]

Section 10.09 Benefit of Agreement.
a.Successors and Assigns Generally. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that the Borrower may not assign
or otherwise transfer any of its rights or obligations hereunder without the
prior written consent of the Administrative Agent and each Lender and no Lender
may assign or otherwise transfer any of its rights or obligations hereunder
except (i) to an assignee in accordance with the provisions of paragraph (b) of
this Section, (ii) by way of participation in accordance with the provisions of
paragraph (d) of this Section or (iii) by way of pledge or assignment of a
security interest subject to the restrictions of paragraph (f) of this Section
(and any other attempted assignment or transfer by any party hereto shall be
null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby, Participants to the extent
provided in paragraph (d) of this Section and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent and
the Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.

b.Assignments by Lenders. Any Lender may at any time assign to one or more
assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Loans at the time owing to it); provided that
any such assignment shall be subject to the following conditions:

i.Minimum Amounts.

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A.in the case of an assignment of the entire remaining amount of the assigning
Lender's Loans at the time owing to it or in the case of an assignment to a
Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be
assigned; and
B.in any case not described in paragraph (b)(i)(A) of this Section, the
aggregate principal outstanding balance of the Loans of the assigning Lender
subject to each such assignment (determined as of the date the Assignment and
Assumption with respect to such assignment is delivered to the Administrative
Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of
the Trade Date) shall not be less than $5,000,000, unless each of the
Administrative Agent and, so long as no Event of Default has occurred and is
continuing, the Borrower otherwise consents (each such consent not to be
unreasonably withheld or delayed); provided that the Borrower shall be deemed to
have given its consent five (5) Business Days after the date written notice
thereof has been delivered by the assigning Lender (through the Administrative
Agent) unless such consent is expressly refused by the Borrower prior to such
fifth (5th) Business Day;
ii.Proportionate Amounts. Each partial assignment shall be made as an assignment
of a proportionate part of all the assigning Lender's rights and obligations
under this Agreement with respect to the Loan assigned;
iii.Required Consents. No consent shall be required for any assignment except to
the extent required by paragraph (b)(i)(B) of this Section and, in addition:
A.the consent of the Borrower (such consent not to be unreasonably withheld)
shall be required unless (I) an Event of Default has occurred and is continuing
at the time of such assignment or (II) such assignment is to a Lender, an
Affiliate of a Lender or an Approved Fund; provided, that the Borrower shall be
deemed to have consented to any such assignment unless it shall object thereto
by written notice to the Administrative Agent within five (5) Business Days
after having received notice thereof; and
B.the consent of the Administrative Agent (such consent not to be unreasonably
withheld or delayed) shall be required for assignments if such assignment is to
a Person that is not a Lender, an Affiliate of such Lender or an Approved Fund
with respect to such Lender.
iv.Assignment and Assumption. The parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Assumption, together with
a processing and recordation fee of $3,500 for each assignment (provided, that
only one such fee will be payable in connection with simultaneous assignments to
two or more Approved Funds by a Lender), and the assignee, if it is not a
Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire.
v.No Assignment to Certain Persons. No such assignment shall be made to (A) the
Borrower or any of the Borrower's Affiliates or Subsidiaries or (B) to any
Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a
Lender hereunder, would constitute any of the foregoing Persons described in
this clause (B).
vi.No Assignment to Natural Persons. No such assignment shall be made to a
natural person.

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to paragraph (c) of this Section, from and after the effective date specified in
each Assignment and Assumption, the assignee thereunder shall be a party to this
Agreement and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations

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of a Lender under this Agreement, and the assigning Lender thereunder shall, to
the extent of the interest assigned by such Assignment and Assumption, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Assumption covering all of the assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to be a party hereto)
but shall continue to be entitled to the benefits of Sections 2.12, 2.14, 2.17,
2.21, 10.05 and 10.07 with respect to facts and circumstances occurring prior to
the effective date of such assignment. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
paragraph shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (d) of this Section.
c.Register. The Administrative Agent, acting solely for this purpose as an agent
of the Borrower, shall maintain at one of its offices, a copy of each Assignment
and Assumption delivered to it and a register for the recordation of the names
and addresses of the Lenders, and principal amounts of the Loans owing to, each
Lender pursuant to the terms hereof from time to time (the “Register”). The
entries in the Register shall be conclusive, and the Borrower, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrower and any Lender (but
only to the extent of entries in the Register that are applicable to such
Lender), at any reasonable time and from time to time upon reasonable prior
notice.

d.Participations. Any Lender may at any time, without the consent of, or notice
to, the Borrower or the Administrative Agent, sell participations to any Person
(other than a natural person or the Borrower or any of the Borrower's Affiliates
or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender's
rights and/or obligations under this Agreement (including all or a portion of
the Loans owing to it); provided that (i) such Lender's obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Borrower, the Administrative Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement.

Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver or modification described in Section
10.01 that directly affects such Participant and could not be effected by a vote
of the Required Lenders. Subject to paragraph (e) of this Section, the Borrower
agrees that each Participant shall be entitled to the benefits of Sections 2.12,
2.17 and 2.21 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (b) of this Section. To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 10.04 as though it were a Lender. Each Lender that sells a participation
shall, acting solely for this purpose as an agent of the Borrower, maintain a
register on which it enters the name and address of each Participant and the
principal amounts (and stated interest) of each Participant's interest in the
Loans or other obligations under the Loan Documents (the “Participant
Register”); provided that no Lender

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shall have any obligation to disclose all or any portion of the Participant
Register (including the identity of any Participant or any information relating
to a Participant's interest in any Loans or its other obligations under any Loan
Document) to any Person except to the extent that such disclosure is necessary
to establish that such Loan or other obligation is in registered form under
Section 5f.103-1(c) of the United States Treasury Regulations. The entries in
the Participant Register shall be conclusive absent manifest error, and such
Lender shall treat each Person whose name is recorded in the Participant
Register as the owner of such participation for all purposes of this Agreement
notwithstanding any notice to the contrary. For the avoidance of doubt, the
Administrative Agent (in its capacity as Administrative Agent) shall have no
responsibility for maintaining a Participant Register.
e.Limitations upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Sections 2.17 and 2.21 than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant is made with the Borrower's prior written consent. No Participant
shall be entitled to the benefits of Section 2.17 unless the Borrower is
notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 2.17 as though
it were a Lender.

f.Certain Pledges. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including without limitation any pledge or
assignment to secure obligations to a Federal Reserve Bank; provided that no
such pledge or assignment shall release such Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.

Section 10.10 Severability.
Any provision of this Agreement which is prohibited, unenforceable or not
authorized in any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition, unenforceability or non‑authorization without
invalidating the remaining provisions hereof or affecting the validity,
enforceability or legality of such provision in any other jurisdiction.
Section 10.11 Governing Law.
This agreement shall be governed by, and construed in accordance with, the laws
of the state of New York.
Section 10.12 Headings.
Section headings in this Agreement are included herein for convenience of
reference only and shall not constitute a part of this Agreement for any other
purpose.
Section 10.13 Submission To Jurisdiction; Waivers.
The Borrower hereby irrevocably and unconditionally:
a.submits for itself and its property in any legal action or proceeding relating
to this Agreement and the other Loan Documents to which it is a party, or for
recognition and enforcement of any judgment in respect thereof, to the
non‑exclusive general jurisdiction of the Courts of the State of New York, the
courts of the United States of America for the Southern District of New York,
and appellate courts from any thereof;

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b.consents that any such action or proceeding may be brought in such courts and
waives any objection that it may now or hereafter have to the venue of any such
action or proceeding in any such court or that such action or proceeding was
brought in an inconvenient court and agrees not to plead or claim the same;

c.agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the Borrower at its
address set forth in Section 10.02 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto; and

d.agrees that nothing herein shall affect the right to effect service of process
in any other manner permitted by law or shall limit the right to sue in any
other jurisdiction.

This Section 10.13 shall not be construed to confer a benefit upon, or grant a
right or privilege to, any Person other than the parties hereto.

Section 10.14 Acknowledgments.

The Borrower hereby acknowledges:
a.it has been advised by counsel in the negotiation, execution and delivery of
this Agreement and other Loan Documents;

b.neither the Administrative Agent nor any Lender has a fiduciary relationship
to the Borrower, and the relationship between the Administrative Agent and any
Lender, on the one hand, and the Borrower on the other hand, is solely that of
debtor and creditor; and

c.no joint venture exists between the Borrower and the Administrative Agent or
any Lender.

Section 10.15 Waivers of Jury Trial.
To the fullest extent permitted by Applicable Law, each of the Borrower, the
Administrative Agent and the Lenders hereby irrevocably and unconditionally
waives trial by jury in any legal action or proceeding relating to this
Agreement or any other Loan Document and for any counterclaim therein. This
Section 10.15 shall not be construed to confer a benefit upon, or grant a right
or privilege to, any person other than the parties hereto.
Section 10.16 Confidentiality.
Each of the Administrative Agent and the Lenders agrees to maintain the
confidentiality of the Information (as defined below) and use it only for
purposes of this Agreement, the Loan Documents and the transactions contemplated
hereby and thereby, or for any other reason relating to this Agreement, except
that Information may be disclosed (a) to its Affiliates and to its and its
Affiliates' respective partners, directors, officers, employees, agents,
advisors and other representatives for the purpose of evaluating, negotiating or
entering into transactions contemplated hereby (it being understood that the

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Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by, or required to be disclosed to,
any rating agency, or regulatory or similar authority purporting to have
jurisdiction over it (including any self-regulatory authority, such as the
National Association of Insurance Commissioners), (c) to the extent required by
Applicable Laws or regulations or by any subpoena or similar legal process,
(d) to any other party hereto, (e) in connection with the exercise of any
remedies under this Agreement or under any other Loan Document or any action or
proceeding relating to this Agreement or any other Loan Document or the
enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to
(i) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement, or
(ii) any actual or prospective counterparty (or its advisors) to any swap or
derivative transaction relating to the Borrower and its obligations, (g) with
the consent of the Borrower, (h) to Gold Sheets and other similar bank trade
publications, such information to consist of deal terms and other information
customarily found in such publications, or (i) to the extent such Information
(A) becomes publicly available other than as a result of a breach of this
Section or (B) becomes available to the Administrative Agent, any Lender or any
of their respective Affiliates on a nonconfidential basis from a source other
than the Borrower and such source is not known by the Person receiving such
Information to be in violation of this Section 10.16 or (j) to governmental
regulatory authorities in connection with any regulatory examination of the
Administrative Agent or any Lender or in accordance with the Administrative
Agent's or any Lender's regulatory compliance policy if the Administrative Agent
or such Lender deems necessary for the mitigation of claims by those authorities
against the Administrative Agent or such Lender or any of its subsidiaries or
affiliates. For purposes of this Section, “Information” means all information
received from or on behalf of the Borrower or any Subsidiary thereof relating to
the Borrower or any Subsidiary thereof or any of their respective businesses,
other than any such information that is available to the Administrative Agent or
any Lender on a nonconfidential basis without breach of this Section 10.16 prior
to disclosure by the Borrower or any Subsidiary thereof; provided that, in the
case of information received from the Borrower or any Subsidiary thereof after
the date hereof, such information is clearly identified at the time of delivery
as confidential. Any Person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information. Each of the Administrative Agent,
the Lenders and Participants shall promptly notify the Borrower of its receipt
of any subpoena or similar process or authority, unless prohibited therefrom by
the issuing Person.
Section 10.18 Execution in Counterparts.
This Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement.
[SIGNATURE PAGES FOLLOW]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their

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respective authorized officers as of the day and year first above written.

JPMORGAN CHASE BANK, N.A.,
as Administrative Agent and as a Lender

By:     /s/ John E. Zur III            
Name: John E. Zur III
Title: Authorized Officer

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SOUTH JERSEY INDUSTRIES, INC.

By:     /s/ Stephen H. Clark            
Name: Stephen H. Clark
Title: Treasurer