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FIVE YEAR REVOLVING
CREDIT AGREEMENT

Dated as of August 22, 2006,
 
among
 
SOUTH JERSEY INDUSTRIES, INC.,
as Borrower

and
 
THE SEVERAL LENDERS FROM
TIME TO TIME PARTY HERETO

and
 
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent
 
and
 
BANK OF AMERICA, N.A.,
JPMORGAN CHASE BANK, N.A., and
PNC BANK, N.A.,
As Co-Syndication Agents
 
Arranged by:
 
WACHOVIA CAPITAL MARKETS, LLC,
Sole Lead Arranger and Sole Book Manager

 
 

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TABLE OF CONTENTS
 
       
Page
     
ARTICLE I
 DEFINITIONS
  1
SECTION 1.01
Certain Defined Terms
  1
SECTION 1.02
Computation of Time Periods.
19
SECTION 1.03
Accounting Terms.
19
SECTION 1.04 
Internal References.
19
     
ARTICLE II
LOANS
20
SECTION 2.01
Revolving Loans.
20
SECTION 2.02
Swingline Loans.
20
SECTION 2.03
Procedure for Advances of Loans.
22
SECTION 2.04
Competitive Bid Loans.
24
SECTION 2.05
Fees.
27
SECTION 2.06
Reduction of Commitments.
27
SECTION 2.07
Prepayment of Loans.
28
SECTION 2.08
Increase in Commitment.
29
SECTION 2.09
Evidence of Debt; Notes.
31
SECTION 2.10
Interest Rates.
31
SECTION 2.11
Additional Interest on LIBOR Rate Loans.
33
SECTION 2.12
Interest Rate Determination.
33
SECTION 2.13
Voluntary Conversion of Loans.
34
SECTION 2.14
Increased Costs.
34
SECTION 2.15
Illegality.
35
SECTION 2.16
Nature of Obligations of Lenders Regarding Extensions of Credit;
   
Assumption by the Administrative Agent.
36
SECTION 2.17
Net of Taxes, Etc.
36
SECTION 2.18
Extension of Stated Termination Date.
38
SECTION 2.19
Extension of Stated Expiration Date of Bond L/Cs.
40
SECTION 2.20
Application of Amounts Received Under Related Documents.
40
 
   
ARTICLE III
LETTER OF CREDIT FACILITY
42
SECTION 3.01
L/C Commitment.
42
SECTION 3.02
Procedure for Issuance of Letters of Credit.
42
SECTION 3.03
Commissions and Other Charges.
43
SECTION 3.04
L/C Participations.
43
SECTION 3.05
Reimbursement Obligation of the Borrower.
44
SECTION 3.06
Obligations Absolute.
45
     
ARTICLE IV
CONDITIONS PRECEDENT
47
SECTION 4.01
Conditions Precedent to the Execution and Delivery of this Agreement.
47
SECTION 4.02
Additional Conditions Precedent.
49
SECTION 4.03
Conditions Precedent to Each Tender Advance Revolving Loan.
50
SECTION 4.04
Reliance on Certificates.
50

 
 
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
52
SECTION 5.01
Representations and Warranties of the Borrower.
52
     
ARTICLE VI
COVENANTS OF THE COMPANY
56
SECTION 6.01
Affirmative Covenants.
56
SECTION 6.02 
Negative Covenants.
58
SECTION 6.03
Reporting Requirements.
59
SECTION 6.04
Financial Covenants.
62
     
ARTICLE VII
EVENTS OF DEFAULT
63
SECTION 7.01
Events of Default.
63
SECTION 7.02
Upon an Event of Default.
65
SECTION 7.03
Rights and Remedies Cumulative; Non-Waiver; Etc.
65
     
ARTICLE VIII
PLEDGED BONDS
67
SECTION 8.01
Pledge.
67
SECTION 8.02
Interest on the Bonds.
67
SECTION 8.03
Rights with respect to Pledged Bonds.
67
SECTION 8.04
No Disposition of Pledged Bonds by Borrower.
68
SECTION 8.05
Disposition of Pledged Bonds by Administrative Agent.
68
SECTION 8.06
Valid Perfected First Lien.
68
SECTION 8.07
Release of Pledged Bonds.
69
     
ARTICLE IX
THE ADMINISTRATIVE AGENT
70
SECTION 9.01
Appointment.
70
SECTION 9.02
Delegation of Duties.
70
SECTION 9.03
Exculpatory Provisions.
70
SECTION 9.04
Reliance by Administrative Agent.
71
SECTION 9.05
Notice of Default.
71
SECTION 9.06
Non-Reliance on Administrative Agent and Other Lenders.
71
SECTION 9.07
Indemnification.
72
SECTION 9.08
Administrative Agent in Its Individual Capacity.
72
SECTION 9.09
Successor Administrative Agent.
73
SECTION 9.10
Issuing Lender.
73
SECTION 9.11
Notices; Actions Under Loan Documents.
73
     
ARTICLE X
MISCELLANEOUS
74
SECTION 10.01
Amendments, Etc.
74
SECTION 10.02
Notices, Etc.
74
SECTION 10.03
No Waiver; Remedies.
75
SECTION 10.04
Set-off.
75
SECTION 10.05
Indemnification.
76
SECTION 10.06
Liability of the Lenders.
77
SECTION 10.07
Costs, Expenses and Taxes.
78

 
 
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SECTION 10.08
Binding Effect.
78
SECTION 10.09
Assignments and Participation.
79
SECTION 10.10
Severability.
81
SECTION 10.11
Governing Law.
82
SECTION 10.12
Headings.
82
SECTION 10.13
Submission To Jurisdiction; Waivers.
82
SECTION 10.14
Acknowledgments.
82
SECTION 10.15
Waivers of Jury Trial.
83
SECTION 10.16
Confidentiality.
83
SECTION 10.17
Patriot Act
84
SECTION 10.18
Execution in Counterparts.
84

 

EXHIBITS
   
Exhibit A-1
Form of Revolving Loan Note
Exhibit A-2
Form of Swingline Note
Exhibit A-3
Form of Competitive Bid Note
Exhibit B-1
Form of Competitive Bid Request
Exhibit B-2
Form of Competitive Bid
Exhibit C
Form of Notice of Borrowing
Exhibit D
Form of Notice of Swingline Borrowing
Exhibit E
Form of Notice of Account Designation
Exhibit F
Form of Notice of Conversion
Exhibit G
Form of Opinion of Counsel to the Borrower
Exhibit H
Form of Assignment and Acceptance
Exhibit I
Form of Compliance Certificate
Exhibit J
Form of Extension Letter

SCHEDULES
   
Schedule I
Lenders, Applicable Lending Offices, Commitments and Initial Commitment
Percentages
Schedule II
Ownership
Schedule III
Existing Letters of Credit

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FIVE YEAR
REVOLVING CREDIT AGREEMENT

This FIVE YEAR REVOLVING 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 August 22, 2006, 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 WACHOVIA BANK, NATIONAL
ASSOCIATION, a national banking association organized and existing under the
laws of the United States of America (“Wachovia”), 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 revolving credit loans
to the Borrower and issue or participate in letters of credit for the account of
the Borrower, in an aggregate principal amount of up to $200,000,000 at any one
time outstanding for the repayment of Indebtedness under the Existing Credit
Facilities, general corporate purposes including, without limitation, the
issuance of letters of credit to support certain taxable and tax-exempt bonds,
and 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):
 
“Additional Commitment Lender” has meaning assigned to that term in Section
2.18(d)(ii).
 
“Administrative Agent” has the meaning assigned to that term in the preamble
hereto.
 
“AML and Anti-Terrorist Acts” has the meaning assigned to that term in Section
6.01(m).
 

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“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 ownership of
voting securities, by contract, or otherwise.
 
“Agreement” means this Five Year Revolving 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.
 
“Anniversary Date” has the meaning assigned to that term in Section 2.18(a).
 
“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 Acceptance 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 Margin” means, for Loans made to the Borrower, Utilization Fees and
Facility Fees payable by the Borrower pursuant to Section 2.05, and Letter of
Credit fees and commissions payable by the Borrower pursuant to Section 3.03, on
any date, the rate per annum as set forth below, determined by reference to the
Senior Debt Ratings:
 
Level
 
 
 
Senior Debt Ratings
 
Facility Fee
 
 
 
Applicable Base Rate Margin
 
Applicable LIBOR Margin or Letter of Credit Fee
 
 
 
Utilization Fee
 
I
Greater than or equal to
A-/A3
0.080%
0.00%
0.270%
0.050%
II
BBB+/Baa1
0.100%
0.00%
0.350%
0.050%
III
BBB/Baa2
0.125%
0.00%
0.425%
0.050%
IV
BBB-/Baa3
0.150%
0.00%
0.500%
0.050%
V
Less than BBB-/Baa3
or no rating
0.200%
0.00%
0.700%
0.050%

 
Any change in the Applicable Margin will be effective as of the date on which
the applicable Selected Rating Agency, as the case may be, announces the
applicable change in the Senior Debt Ratings. The Borrower shall notify the
Administrative Agent in writing promptly after becoming aware of any change in
the Senior Debt Ratings.
 

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For purposes of the foregoing, (i) if the Senior Debt Ratings established or
deemed to have been established by the Selected Rating Agencies shall fall
within different “Levels” and the ratings differential is one level, the higher
rating will apply; (ii) if the Senior Debt Ratings established or deemed to have
been established by the Selected Rating Agencies shall fall within different
“Levels” and the ratings differential is two levels or more, the level one below
the higher of the two ratings will apply; (iii) if only one of the Selected
Rating Agencies maintains Senior Debt Ratings, then, notwithstanding anything
herein to the contrary, the rating of such single rating agency will apply until
such time as the second Selected Rating Agency maintains Senior Debt Ratings;
and (iv) if the rating system of Moody’s, S&P or Fitch shall change, or if
Moody’s, S&P or Fitch 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 this definition to reflect such changed rating
system or the unavailability of ratings from Moody’s, S&P or Fitch, and, pending
the effectiveness of any such amendment, the Senior Debt Ratings shall be
determined by reference to the Senior Debt Ratings most recently in effect prior
to such change or cessation.
 
“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;
 
(b) in the case of each LIBOR Rate Loan comprising part of the same Loan, a rate
per annum during each Interest Period equal at all times to the sum of the LIBOR
Base Rate for such Interest Period plus the Applicable LIBOR Margin in effect
from time to time during such Interest Period;
 
(c) in the case of each Swingline Loan, a rate per annum equal for each day that
any such Swingline Loan is outstanding to either (i) the daily LIBOR rate (as
determined by the Administrative Agent) for each such day plus the Applicable
LIBOR Margin or (ii) the Prime Rate, as selected by the Borrower in accordance
with Section 2.03(a)(ii) hereof; and
 
(d) in the case of each Competitive Bid Loan, a rate per annum as determined in
accordance with Section 2.04.
 
“Application” means an application, in the form specified by the Issuing Lender
from time to time, requesting the Issuing Lender to issue a Letter of Credit.
 
“Assignment and Acceptance” means an Assignment and Acceptance executed in
accordance with Section 10.09 in the form attached hereto as Exhibit H.
 
“Bankruptcy Code” means Title 11 of the United States Code, as now constituted
or hereafter amended.
 
“Base Rate” means, for any period, a fluctuating interest rate per annum as
shall be in effect from time to time, which rate per annum shall at all times be
equal to the higher of (i) the rate of interest announced publicly by
Administrative Agent in Charlotte, North Carolina, from time to time, as
Administrative Agent’s Prime Rate; and (ii) 1/2 of one percent per annum above
the Federal Funds Rate in effect from time to time.

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“Base Rate Loan” means all Loans, or portions thereof, bearing interest based on
the Base Rate.
 
“Benefited Lender” has the meaning assigned to that term in Section 10.04(b).
 
“Bonds” means any tax-exempt bonds issued in connection with various projects of
the Borrower or Marina, certain obligations of which are supported by letters of
credit issued hereunder or under the Existing Credit Facilities, and includes,
without limitation, the 2001A Bonds, the 2001B Bonds and the 2006A Bonds.
 
“Bond L/C” means any Letter of Credit issued in support of certain obligations
with respect to any Bonds.
 
“Borrower” has the meaning assigned to that term in the preamble hereto.
 
“Business Day” means a day of the year on which (i) banks are not required or
authorized to close in Charlotte, North Carolina, (ii) the New York Stock
Exchange is not closed, and (iii) with respect to any borrowing, payment or rate
selection of a LIBOR Rate Loan, banks are not required or authorized to close in
Charlotte, North Carolina and on which dealings in Dollars are carried out in
the London interbank market.
 
“Cancellation Date” has the meaning assigned to that term in each Bond L/C.
 
“Capital Lease” means any lease which is required to be capitalized on a balance
sheet of the lessee in accordance with GAAP, consistently applied.
 
“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.
 
“Change in Control” means the occurrence of either of the following: (i) any
entity, person (within the meaning of Section 14(d) of the Securities Exchange
Act of 1934, as amended (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 (x) 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 (y)
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 (ii)
20% or more of the directors of the board of directors of the Borrower fail to
consist of Continuing Directors.

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“Closing Date” means August 22, 2006.
 
“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and the regulations promulgated and rulings issued thereunder.
 
“Commitment” means (i) with respect to the Lenders, the aggregate amount of the
Commitments of the Lenders as set forth on Schedule I, and (ii) with respect to
a Lender, the amount of the Commitment of such Lender as set forth on Schedule
I, as such amounts may be otherwise reduced in accordance with Section 2.06 or
increased pursuant to Section 2.08 or otherwise modified in accordance with
Section 10.09.
 
“Commitments” means the total of the Lenders’ Commitments.
 
“Commitment Percentage” means for each Lender, a fraction (expressed as a
decimal) the numerator of which is the Commitment of such Lender at such time
and the denominator of which are the Commitments of all of the Lenders at such
time. The initial Commitment Percentage of each Lender is set out on Schedule I.
 
“Competitive Bid” means an offer by a Lender to make a Competitive Bid Loan to
the Borrower pursuant to the terms of Section 2.04 hereof.
 
“Competitive Bid Loan” means a loan made by a Lender to the Borrower in its
discretion pursuant to the provisions of Section 2.04 hereof.
 
“Competitive Bid Loan Notes” means the promissory notes of the Borrower in favor
of each Lender evidencing the Competitive Bid Loans made to the Borrower and
substantially in the form of Exhibit A-3, as such promissory notes may be
amended, modified, supplemented or replaced from time to time.
 
“Competitive Bid Rate” means, as to any Competitive Bid made by a Lender to the
Borrower in accordance with the provisions of Section 2.04 hereof, the rate of
interest offered by the Lender making the Competitive Bid.
 
“Competitive Bid Request” means a request by the Borrower for Competitive Bids
in the form of Exhibit B-1.
 
“Competitive Bid Request Fee” means $3,500 for each Competitive Bid Request made
by the Borrower, payable to the Administrative Agent for its account.
 
“Compliance Certificate” means a certificate substantially in the form of
Exhibit I.
 
“Consenting Lender” has the meaning assigned to that term in Section 2.18(d).
 
“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.

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 “Consolidated Total Capitalization” means the sum of (i) Indebtedness of the
Borrower and its Consolidated Subsidiaries, plus (ii) 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.
 
“Current Stated Termination Date” has the meaning assigned to that term in
Section 2.18(c).
 
“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 Base Rate.
 
“Disclosure Documents” means the Borrower’s Annual Report on Form 10-K for the
year ended December 31, 2005, its Quarterly Report on Form 10-Q for the quarter
ended March 31, 2006, 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.
 
“Election Date” shall have the meaning set forth in Section 2.18(b).
 
“Eligible Assignee” means, with respect to any assignment of the rights,
interest and obligations of a Lender hereunder, a Person that is at the time of
such assignment (a) a commercial bank organized or licensed under the laws of
the United States or any state thereof, having combined capital and surplus in
excess of $500,000,000, (b) a commercial bank organized under the laws of any
other country that is a member of the Organization of Economic Cooperation and
Development, or a political subdivision of any such country, having combined
capital and surplus in excess of $500,000,000, (c) a finance company, insurance
company or other financial institution which in the ordinary course of business
extends credit of the type extended hereunder and that has total assets in
excess of $1,000,000,000, (d) a Lender hereunder (whether as an original party
to this Agreement or as the assignee of another

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Lender), (e) an Affiliate or Subsidiary of a Lender (whether as an original
party to this Agreement or as the assignee of another Lender) hereunder that
does not otherwise qualify as an Eligible Assignee provided such Lender
continues to be obligated under this Agreement, (f) the successor (whether by
transfer of assets, merger or otherwise) to all or substantially all of the
commercial lending business of the assigning Lender, or (g) any other Person
that has been approved in writing as an Eligible Assignee by the Administrative
Agent and, if no Default or Event of Default exists and is continuing, by the
Borrower.
 
“Environmental Laws” means any federal, state or local laws, ordinances or
codes, rules, orders, or regulations relating to pollution or protection of the
environment, including, without limitation, laws relating to hazardous
substances, laws relating to reclamation of land and waterways and laws relating
to emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances or wastes
into the environment (including, without limitation, ambient air, surface water,
ground water, land surface or subsurface strata) or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollution, contaminants, chemicals, or industrial,
toxic or hazardous substances or wastes.
 
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.
 
“ERISA Affiliate” means any Person which for purposes of Title IV of ERISA is a
member of the Borrower’s controlled group, or under common control with the
Borrower, within the meaning of Section 414 of the Code, and the regulations
promulgated and rulings issued thereunder.
 
“ERISA Event” means (i) the occurrence of a reportable event, within the meaning
of Section 4043 of ERISA, unless the 30-day notice requirement with respect
thereto has been waived by the PBGC; (ii) the provision by the administrator of
any Plan of a notice of intent to terminate such Plan, pursuant to Section
4041(a)(2) of ERISA (including any such notice with respect to a plan amendment
referred to in Section 404l(e) of ERISA); (iii) the cessation of operations at a
facility in the circumstances described in Section 4062(e) of ERISA; (iv) the
withdrawal by the Borrower or an ERISA Affiliate from a Multiemployer Plan
during a plan year for which it was a “substantial employer” as defined in
Section 4001(a)(2) of ERISA; (v) the failure by the Borrower or any ERISA
Affiliate to make a payment to a Plan required under Section 302 of ERISA, which
results in a lien pursuant to Section 302(f) of ERISA; (vi) the adoption of an
amendment to a Plan requiring the provision of security to such Plan, pursuant
to Section 307 of ERISA; or (vii) the institution by the PBGC of proceedings to
terminate a Plan, pursuant to Section 4042 of ERISA, or the occurrence of any
event or condition which might reasonably constitute grounds under Section 4042
of ERISA for the termination of, or the appointment of a trustee to administer,
a Plan by the PBGC.
 
“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.

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“Event of Default” has the meaning assigned to that term in Section 7.01.
 
“Existing Letters of Credit” shall mean those letters of credit issued under the
Existing Credit Facilities, which shall remain in existence and be deemed to
have been issued under this Agreement pursuant to the terms of Section 3.01(a),
as described on Schedule III attached hereto.
 
 “Existing Credit Facilities” means collectively (i) that certain Three-Year
Revolving Credit Agreement, dated as of August 5, 2004, among the Borrower, the
lenders referred to therein and Wachovia, as administrative agent (as such
agreement has been amended or supplemented from time to time) and (ii) that
certain Amended and Restated Letter of Credit and Reimbursement Agreement, dated
as of September 19, 2002, among Marina, the Borrower, the participating banks
referred to therein and Wachovia, as fronting bank and administrative agent (as
such agreement has been amended or supplemented from time to time).

“Extension” has the meaning assigned to that term in Section 2.18(a).
 
“Extension Condition” has the meaning assigned to that term in Section 2.18(a).
 
“Extension Letter” has the meaning assigned to that term in Section 2.18(a).
 
“Extensions of Credit” means, as to any Lender at any time, an amount equal to
the sum of (a) such Lender’s Commitment Percentage multiplied by the aggregate
principal amount of all Loans then outstanding and (b) such Lender’s Commitment
Percentage multiplied by the aggregate amount of all L/C Obligations then
outstanding.
 
“Facility Fee” has the meaning assigned to that term in Section 2.05(a).

“Federal Funds Rate” means, for any period, a fluctuating interest rate per
annum equal for each day during such period to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Lender of New York, or, if such rate is not so published for any day
which is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
 
“Final Fee Payment Date” means the date all Commitments have been terminated and
all Loans have been paid in full.
 
“Fitch” means Fitch Ratings, Inc.
 
“Fronting Fee” has the meaning assigned to that term in Section 3.03(b).
 
“GAAP” means generally accepted accounting principles, as recognized by the
American Institute of Certified Public Accountants and the Financial Accounting
Standards Board, consistently applied and maintained on a consistent basis for
the Borrower and its Consolidated Subsidiaries throughout the period indicated
and consistent with the prior financial practice of the Borrower and its
Consolidated Subsidiaries.
 
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“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, 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 petrochemical or petroleum products, any
flammable materials, explosives, radioactive materials, hazardous materials,
hazardous wastes, hazardous or toxic substances, or related or similar
materials, asbestos or any material containing asbestos, or any other substance
or material as so defined and regulated by any Federal, state or local
environmental law, ordinance, rule, or regulation including, without limitation,
the Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended (42 U.S.C. Sections 9601, et seq.), the Hazardous Materials
Transportation Act, as amended (49 U.S.C. Sections 1801, et seq.), and the
Resource Conservation and Recovery Act, as amended (42 U.S.C. Sections 6901, et
seq.), and the regulations adopted and publications promulgated pursuant
thereto.
 
“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 (i) indebtedness for borrowed money, (ii) obligations evidenced by bonds,
debentures, notes or other similar instruments, (iii) obligations to pay the
deferred purchase price of property or services, (iv) obligations as lessee
under leases which shall have been or should be, in accordance with GAAP,
recorded as capital leases, (v) obligations as lessee under operating leases
which have been recorded as off-balance sheet liabilities, (vi) obligations
under Hedging Obligations, (vii) reimbursement obligations (contingent or
otherwise) in respect of outstanding letters of credit, (viii) indebtedness of
the type referred to in clauses (i) through (vi) 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 (ix) 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

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 respect of, indebtedness or obligations of others of the kinds referred to in
clauses (i) through (vii) above. Notwithstanding anything to the contrary set
forth above, Capital Stock, including Capital Stock having a preferred interest,
shall not constitute Indebtedness for purposes of this Agreement.
 
“Indenture” means any trust indenture executed in connection with the issuance
of any Bonds by the issuer of any Bonds and the trustee with respect to such
Bonds, as the same may be amended, modified or supplemented from time to time.
 
“Information” has the meaning assigned to that term in Section 10.16(b).
 
“Interest Period” has the meaning assigned to that term in Section 2.10(b).
 
“ISP 98” means the International Standby Practices (1998 Revision, effective
January 1, 1999), International Chamber of Commerce Publication No. 590.
 
“Issuing Lender” means Wachovia, in its capacity as issuer of any Letter of
Credit, or any successor thereto.
 
“L/C Commitment” means the aggregate amount of all Commitments under this
Agreement.
 
“L/C Facility” means the letter of credit facility established pursuant to
Article III.
 
“L/C Obligations” means at any time, an amount equal to the sum of (a) the
aggregate undrawn and unexpired amount of the then outstanding Letters of Credit
and (b) the aggregate amount of drawings under Letters of Credit which have not
then been reimbursed pursuant to Section 3.05.
 
“L/C Participants” means the collective reference to all the Lenders other than
the Issuing Lender.
 
“Lenders” has the meaning assigned to that term in the preamble hereto, and, in
each case, includes their respective successors and permitted assigns, and, with
respect to Swingline Loans, the Swingline Lender.
 
“Letters of Credit” has the meaning assigned to that term in Section 3.01(a),
and shall include, unless the context specifies otherwise, all Bond L/Cs.
 
“LIBOR 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 Acceptance pursuant to which it became a Lender (or, if no such
office is specified, its Applicable Lending Office), or such other office of
such Lender as such Lender may from time to time specify to the Borrower and the
Administrative Agent.
 
 
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“LIBOR Base Rate” means with respect to each day during each Interest Period
pertaining to a LIBOR Rate Loan or Competitive Bid Loan, the rate (rounded
upwards, if necessary, to the next higher 1/100th of 1%) appearing on Page 3750
of the Dow Jones Markets Service (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 Dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, as the rate for Dollar
deposits with a maturity comparable to such Interest Period. In the event that
such rate is not available at such time for any reason, then the “LIBOR Base
Rate” with respect to such LIBOR Rate Loan or Competitive Bid Loan for such
Interest Period shall be the rate per annum equal to the rate at which the
principal London office of the Administrative Agent offers to place Dollar
deposits at or about 11:00 a.m., London time, two Business Days prior to the
beginning of such Interest Period with first-class banks in the London interbank
market for delivery on the first day of such Interest Period for the number of
days comprised therein and in an amount comparable to the amount of its LIBOR
Rate Loan or Competitive Bid Loan to be outstanding during such Interest Period.
 
“LIBOR Rate” means, with respect to a LIBOR Rate Loan for the relevant Interest
Period, the sum of (i) the LIBOR Base Rate (rounded upwards, if necessary, to
the next higher 1/100th of 1%) applicable to such Interest Period, plus (ii) the
Applicable LIBOR Margin, to the extent permitted by applicable law.
 
“LIBOR Rate Loan” means all Loans, or portions thereof, bearing interest based
on the LIBOR Rate and, solely for purposes of Section 2.10, shall include
Competitive Bid Loans.
 
“LIBOR Rate Reserve Percentage” of any Lender for each Interest Period for each
LIBOR Rate Loan and Competitive Bid Loan means the reserve percentage
contemplated in Section 2.11 applicable to such Lender during such Interest
Period (or if more than one such percentage shall be so applicable, the daily
average of such percentages for those days in such Interest Period during which
any such percentage shall be so applicable) under Regulation D or other
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental or other
marginal reserve requirement) then applicable to such Lender with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities having
a term equal to such Interest Period.
 
“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 Agreement” means any applicable loan agreement executed in connection with
the issuance of any Bonds by the Borrower or any Subsidiary and the applicable
issuer for such Bonds, as the same may be amended, modified or supplemented from
time to time.
 
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“Loan Documents” means this Agreement, the Notes and any other document
evidencing, relating to or securing any L/C Obligation, Loan or other Extension
of Credit, and any other document or instrument delivered from time to time in
connection with this Agreement, the Notes or the Extensions of Credit, as such
documents and instruments may be amended or supplemented from time to time.
 
“Loans” means the loans made by the Lenders pursuant to this Agreement including
Swingline Loans, Revolving Loans, and Competitive Bid Loans.
 
“Marina” means Marina Energy LLC, a New Jersey limited liability company.
 
“Material Adverse Change” means (a) a materially adverse change in the business,
assets, liabilities (actual or contingent), operations, condition (financial or
otherwise) or prospects of (i) the Borrower or (ii) the Borrower and its
Subsidiaries, taken as a whole, (b) any material impairment of the ability of
the Borrower to perform any of its Obligations under this Agreement, any other
Loan Document or any Related Document or (c) any material impairment of the
rights of, or benefits available to, the Administrative Agent, the Issuing
Lender, the Swingline Lender or the Lenders under this Agreement, any other Loan
Document or any Related Document.
 
 “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, which is subject to Title IV of ERISA and to which the
Borrower or any ERISA Affiliate is making or accruing an obligation to make
contributions, or has within any of the preceding five plan years made or
accrued an obligation to make contributions, such plan being maintained pursuant
to one or more collective bargaining agreements.
 
“Multiple Employer Plan” means a single employer plan, as defined in Section
4001(a)(15) of ERISA, which is subject to Title IV of ERISA and which (i) is
maintained for employees of the Borrower or an ERISA Affiliate and at least one
Person other than the Borrower and its ERISA Affiliates or (ii) was so
maintained and in respect of which the Borrower or an ERISA Affiliate could have
liability under Section 4064 or 4069 of ERISA in the event such plan has been or
were to be terminated.
 
“Non-Consenting Lender” shall have the meaning assigned to that term in Section
2.18(d).
 
“Note” means the collective reference to the Revolving Loan Notes, the Swingline
Note and the Competitive Bid Loan Notes.
 
“Notice of Borrowing” has the meaning assigned to that term in Section
2.03(a)(i)(A)
 
“Notice of Conversion” has the meaning assigned to that term in Section 2.13.
 
“Notice of Extension” has the meaning assigned to that term in Section 2.19.
 
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 “Notice of Swingline Borrowing” has the meaning assigned to that term in
Section 2.03(a)(ii).
 
 “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) the L/C
Obligations, (c) 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 or any Related Document,
and (d) 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, the
Issuing Lender, or the Administrative Agent, in each case under or in respect of
this Agreement, any Note, any Letter of Credit, any of the other Loan Documents
or any of the Related Document 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, any Letter of Credit, any of the other Loan Documents or any Related
Document.
 
“OFAC” has the meaning assigned to that term in Section 5.01(v).
 
“Official Statement” means the “Official Statement” or other applicable offering
document relating to any Bonds, together with the documents incorporated therein
by reference and any supplements or amendments thereto.
 
“Participant” has the meaning assigned to that term in Section 10.09(e).
 
“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.
 
“Permitted Indebtedness” means any of the following:
 
    (1)  Indebtedness under this Agreement;
 
    (2)   Indebtedness (other than the type described in clause (3) below) of
the Borrower and its Subsidiaries (other than South Jersey Gas) in an aggregate
principal amount not to exceed $275,000,000 (inclusive of the type described in
clause (1) above but excluding any non-recourse debt of the Borrower and its
Subsidiaries) at any time outstanding so long as before and immediately after
the incurrence of such Indebtedness, the Borrower is in compliance with Section
6.04;
 
    (3)   Indebtedness of the Borrower under Hedging Obligations covering a
notional amount not to exceed the face amount of outstanding Indebtedness;
 
    (4)   Indebtedness of South Jersey Gas, under that certain Five-Year
Revolving Credit Agreement, dated as of August 3, 2006, among South Jersey Gas,
the lenders party thereto, and Wachovia Bank, National Association, as
administrative agent on behalf of said lenders (as amended to date, the “SJG
Credit Agreement”);
 
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    (5)   Indebtedness of South Jersey Gas under the First Mortgage Notes (as
defined in the SJG Credit Agreement) existing as of August 3, 2006 and as
identified on Schedule IV to the SJG Credit Agreement, 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;
 
    (6)   Indebtedness (other than the type described in clause (7) 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; and
 
    (7)   Indebtedness of South Jersey Gas under Hedging Obligations covering a
notional amount not to exceed the face amount of such outstanding Indebtedness.

    “Permitted Investments”  means (1) noncallable, direct general obligations
of, or obligations the payment of the principal of and interest on which are
unconditionally guaranteed by, the United States of America; (2) bonds,
participation certificates or other obligations of Federal National Mortgage
Association, Government National Mortgage Association and Federal Home Loan
Mortgage Corporation; (3) certificates of deposit, bankers’ acceptances or other
obligations issued by commercial banks which are fully insured by the Federal
Deposit Insurance Corporation or certificates of deposit, bankers’ acceptances
or other deposit obligations issued by commercial banks whose unsecured
obligations are rated in one of the two highest rating categories by Moody’s or
Standard S&P; (4) obligations issued or guaranteed by a state or political
subdivision of a state rated in one of the two highest rating categories by
Moody’s or S&P; or (5) any other investments permitted under this Agreement and
which the Administrative Agent has approved in writing.
 
“Permitted Liens” means, with respect to any Person, any of the following:
 
(1)   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;
 
(2)   Liens arising out of deposits in connection with workers’ compensation,
unemployment insurance, old age pensions or other social security or retirement
benefits legislation;
 
(3)   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;
 
(4)   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;
 
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(5)   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;
 
(6)   Liens securing Permitted Indebtedness of the type described in clauses (2)
and (3) of the definition of “Permitted Indebtedness,” not in excess of
$15,000,000 in the aggregate;
 
(7)   Liens securing Permitted Indebtedness of the type described in clause (5)
of the definition of “Permitted Indebtedness”;
 
(8)   Liens securing Permitted Indebtedness of the type described in clause (6)
of the definition of “Permitted Indebtedness,” not in excess of $12,500,000 in
the aggregate; and
        (9)   Purchase money security interests for the purchase of equipment to
be used in such Person’s business, encumbering only the equipment so purchased,
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.
 
“Plan” means a Single Employer Plan or a Multiple Employer Plan.
 
“Pledge Agreement” means any pledge or security agreement executed in connection
with the issuance of any Bonds by the Borrower, or its Subsidiaries, and the
Administrative Agent, as the same may be amended, modified or supplemented from
time to time.
 
“Pledged Bonds” has the meaning assigned to that term in Section 8.01.  
 
“Prime Rate” means a rate per annum equal to the Administrative Agent’s index or
base rate of interest announced from time to time by the Administrative Agent
(which is not necessarily the lowest rate charged to any customer), changing
when and as such base rate changes.
 
“Purchase Agreement” means any applicable bond purchase agreement executed in
connection with the issuance of any Bonds by the issuer of such Bonds and the
underwriter of such Bonds, as the same may be amended, modified or supplemented
from time to time.
 
“Rated Entity” means the Borrower or any of its Subsidiaries which maintain
senior unsecured, non-credit enhanced debt ratings by any of Moody’s, S&P or
Fitch. If more than one such Person exists, the Rated Entity shall be the
Borrower or any of its Subsidiaries which maintains the lowest senior unsecured,
non-credit enhanced debt rating by any of Moody’s, S&P or Fitch.
 
“Register” has the meaning assigned to that term in Section 10.09(c).
 
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“Related Documents” means, with respect to any series of Bonds, the Bonds and
any applicable Indenture, Loan Agreement, Purchase Agreement, Remarketing
Agreement, Pledge Agreement, Tender Agency Agreement or Official Statement
related thereto.
 
“Remarketing Agreement” means any applicable remarketing agreement executed in
connection with any Bonds by the Borrower or any Subsidiary and the applicable
remarketing agent for such Bonds, as the same may be amended, modified or
supplemented from time to time, and any other agreement pursuant to which such
remarketing agent has agreed to act as such pursuant to the applicable Indenture
for such Bonds.
 
“Required Lenders” means Lenders whose aggregate Commitment Percentages total
more than 50%.
 
“Revolving Loans” means those Base Rate Loans and LIBOR Rate Loans made pursuant
to Section 2.01, including, without limitation, all Tender Advance Revolving
Loans.
 
“Revolving Loan Notes” means the promissory notes of the Borrower in favor of
each Lender evidencing the Revolving Loans made to the Borrower and
substantially in the form of Exhibit A-1, as such promissory notes may be
amended, modified, supplemented or replaced from time to time.
 
“S&P” means Standard & Poor’s Ratings Services, a division of the McGraw-Hill
Companies, Inc., or any successor thereto.
 
“Selected Rating Agencies” means any two of Moody’s, S&P, Fitch or any other
nationally recognized rating agency selected by the Borrower from time to time;
provided that for any such selection to be valid, the Borrower shall have
notified the Administrative Agent of such selection prior to such selection
taking effect and if the Borrower has not notified the Administrative Agent of
any such selection, then the Borrower shall be deemed to have selected Moody’s
and S&P.
 
“Senior Debt Ratings” means the ratings assigned to the senior unsecured,
non-credit enhanced debt of the Rated Entity by the Selected Rating Agencies.
 
“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;
 
(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;
 
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(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, Marina and South Jersey Gas.
 
“Single Employer Plan” means a single employer plan, as defined in Section
4001(a)(15) of ERISA, which is subject to Title IV of ERISA and which (i) is
maintained for employees of the Borrower or an ERISA Affiliate and no Person
other than the Borrower and its ERISA Affiliates or (ii) was so maintained and
in respect of which the Borrower or an ERISA Affiliate could have liability
under Section 4069 of ERISA in the event such plan has been or were to be
terminated.
 
“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.
 
“Stated Expiration Date” means, with respect to each Bond L/C, the earlier of
(i) the second anniversary of the date of the issuance of such Bond L/C (or, if
such day is not a Business Day, the next succeeding Business Day), and (ii) the
Termination Date or such later date to which the Termination Date may be
extended from time to time pursuant to the terms of this Agreement.
 
“Stated Termination Date” means August 22, 2011, or such later date to which the
Stated Termination Date may be extended pursuant to Section 2.18.
 
“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.
 
“Swingline Borrowing” means a borrowing hereunder consisting of Swingline Loans
made to the Borrower.
 
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“Swingline Commitment” means Twenty Million and No/100 Dollars ($20,000,000).
 
“Swingline Facility” means the swingline loan facility established pursuant to
Section 2.02.
 
“Swingline Lender” means Wachovia, in its capacity as swingline lender
hereunder, together with its successors and permitted assigns in such capacity.
 
“Swingline Loan” means the swingline loans made by the Swingline Lender to the
Borrower pursuant to Section 2.02, and all such loans collectively as the
context requires.
 
“Swingline Note” means the promissory note of the Borrower in favor of the
Swingline Lender evidencing the Swingline Loans made to the Borrower and
substantially in the form of Exhibit A-2, as such promissory note may be
amended, modified, supplemented or replaced from time to time.
 
“Taxes” has the meaning assigned to that term in Section 2.17.
 
“Tender Advance Revolving Loan” has the meaning assigned to that term in Section
3.05(b).
 
“Tender Agent” has the meaning assigned to that term in the applicable Indenture
with respect to any Bonds.
 
“Tender Agency Agreement” means any applicable tender agency agreement executed
in connection with any Bonds by the Borrower and the applicable tender agent
with respect to such Bonds, as the same may be amended, modified or supplemented
from time to time.
 
“Tendered Bonds” means Bonds tendered or deemed tendered for purchase, the
purchase price of which was paid by a draw under a Letter of Credit.
 
“Term Drawing” means any drawing under a Bond L/C to pay the purchase price of
Bonds tendered pursuant to the terms of the applicable Indenture.
 
“Termination Date” means the earliest of (a) the Stated Termination Date, (b)
the date of termination by the Borrower of the Commitments in full pursuant to
Section 2.06, and (c) the date of termination of the Commitments pursuant to
Section 7.02(a).
 
“Trustee” means the person or entity serving as trustee for any Bonds under the
applicable Indenture with respect to such Bonds.
 
“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.
 
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“2001B Bonds” means the Thermal Energy Facilities Federally Taxable Revenue
Bonds (Marina Energy, LLC - 2001 Project), Series B in the aggregate principal
amount of $8,600,000, 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.
 
“Utilization Amount” has the meaning assigned to that term in Section 2.05(b).
 
“Utilization Fee” has the meaning assigned to that term in Section 2.05(b).
 
“Wachovia” has the meaning assigned to that term in the preamble hereto.
 
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 and including” and the
words “to” and “until” each means “to but excluding”.
 
SECTION 1.03     Accounting Terms. 
 
All accounting terms not specifically defined herein shall be construed in
accordance with GAAP, except as otherwise stated herein.
 
SECTION 1.04     Internal References. 
 
The words “herein”, “hereof” and “hereunder” and words of similar import, when
used in this Agreement, shall refer to this Agreement as a whole and not to any
provision of this Agreement, and “Article”, “Section”, “subsection”,
“paragraph”, “Exhibit”, “Schedule” and respective references are to this
Agreement unless otherwise specified. References herein or in any Loan Document
to any agreement or other document shall, unless otherwise specified herein or
therein, be deemed to be references to such agreement or document as it may be
amended, modified or supplemented after the date hereof from time to time in
accordance with the terms hereof or of such agreement or document, as the case
may be.
 

 
[End of Article I]
 

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ARTICLE II
LOANS
 
SECTION 2.01     Revolving 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 Commitment Percentage of Revolving Loans to the Borrower from
time to time from the Closing Date to, but not including, the Termination Date,
as requested by the Borrower in accordance with the terms of Sections 2.03(a)(i)
or as set forth in Section 3.05; provided, that (i) the aggregate principal
amount of all outstanding Extensions of Credit (after giving effect to any
amount requested and the application of the proceeds thereof) shall not exceed
the Commitments of the Lenders; and (ii) the principal amount of outstanding
Revolving Loans from any Lender to the Borrower shall not at any time exceed
such Lender’s Commitment less such Lender’s Commitment Percentage multiplied by
the sum of the: (A) L/C Obligations then outstanding, (B) aggregate principal
amount of all Swingline Loans then outstanding, and (C) aggregate principal
amount of all Competitive Bid Loans then outstanding. Each Revolving Loan by a
Lender shall be in a principal amount equal to such Lender’s Commitment
Percentage multiplied by the aggregate principal amount of Revolving Loans being
made on such occasion.
 
(b)   Subject to the terms and conditions hereof, the Borrower may borrow, repay
and reborrow Revolving Loans prior to the Termination Date. In addition, the
Borrower will repay, by means of a reborrowing hereunder or otherwise, each Base
Rate Loan within 365 days of when it was made.
 
(c)   Except as otherwise provided in Section 3.05, Revolving Loans shall be
disbursed in accordance with Section 2.03(d)(i).
 
SECTION 2.02     Swingline Loans.
 
(a)    Availability.
 
(i)   Subject to the terms and conditions of this Agreement, and in reliance
upon the representations and warranties set forth herein, the Swingline Lender
agrees to make Swingline Loans to the Borrower from time to time from the
Closing Date through, but not including, the Termination Date, as requested by
the Borrower in accordance with the terms of Section 2.03(a)(ii); provided, that
(i) the aggregate principal amount of all outstanding Extensions of Credit
(after giving effect to any amount requested and the application of the proceeds
thereof) shall not exceed the Commitments of the Lenders; and (ii) the aggregate
principal amount of all Swingline Loans then outstanding shall not exceed the
Swingline Commitment. Each Lender acknowledges that the aggregate principal
amount of all outstanding Swingline Loans made by the Swingline Lender, when
taken together with the aggregate principal amount of all outstanding Revolving
Loans made by the Swingline Lender, may exceed the Swingline Lender’s
Commitment. Upon and during the continuance of a Default or an Event of Default,
the Borrower shall no longer have the option of requesting Swingline Loans and
the Swingline Lender shall not be obligated to make Swingline Loans. No more
than one (1) Swingline Loan may be made on the same Business Day.
 
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(ii)   Each Swingline Loan shall be in the aggregate principal amount of
$500,000 or any multiple of $100,000 in excess thereof, or such lesser amount as
shall be equal to the aggregate amount of the unborrowed Swingline Commitment on
such date.
 
(iii)   Subject to the terms and conditions hereof, the Borrower may borrow,
repay and reborrow Swingline Loans prior to the Termination Date.
 
(iv)   Swingline Loans shall be disbursed in accordance with Section
2.03(d)(ii).
 
(b)    Maturity. If the Borrower, in accordance with Section 2.03(a)(ii),
chooses that any Swingline Loan bear interest at a rate per annum for each day
that such Swingline Loan is outstanding equal to the daily LIBOR rate (as
determined by the Administrative Agent) for each such day plus the Applicable
LIBOR Margin, then any such Swingline Loan shall be repaid by the Borrower no
later than fourteen (14) days from the date such Swingline Loan was made.
 
(c)   Refunding.
 
(i)   Swingline Loans (including accrued and unpaid interest thereon) shall be
reimbursed fully by the Lenders on demand by the Swingline Lender. Such
reimbursements shall be made by the Lenders in accordance with their respective
Commitment Percentages and shall thereafter be reflected as Revolving Loans of
the Lenders on the books and records of the Administrative Agent; provided, that
no Lender shall be required to reimburse any Swingline Loan if, after giving
effect to such reimbursement, the aggregate principal amount of such Lender’s
Extensions of Credit (other than such Lender’s outstanding Competitive Bid Loans
to the Borrower) outstanding would exceed such Lender’s Commitment. Each Lender
shall fund its respective Commitment Percentage of Revolving Loans as required
to repay Swingline Loans outstanding to the Swingline Lender upon demand by the
Swingline Lender but in no event later than 2:00 p.m. (Charlotte, North Carolina
time) on the next succeeding Business Day after such demand is made. No Lender’s
obligation to fund its respective Commitment Percentage of a Swingline Loan
shall be affected by any other Lender’s failure to fund its Commitment
Percentage of a Swingline Loan, nor shall any Lender’s Commitment Percentage be
increased as a result of any such failure of any other Lender to fund its
Commitment Percentage of a Swingline Loan.
 
          (ii)   The Borrower shall pay to the Swingline Lender on demand the
amount of such Swingline Loans (including accrued and unpaid interest thereon)
to the extent amounts received from the Lenders are not sufficient to repay in
full the outstanding Swingline Loans requested or required to be refunded. In
addition, the Borrower hereby authorizes the Administrative Agent and the
Swingline Lender to charge any account maintained by the Borrower or any
Subsidiary of the Borrower with the Swingline Lender (up to the amount available
therein) in order to immediately pay the Swingline Lender the amount of such
Swingline Loans to the extent amounts received from the Lenders are not
sufficient to repay in full

 
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the outstanding Swingline Loans requested or required to be refunded. If any
portion of any such amount paid to the Swingline Lender shall be recovered by or
on behalf of the Borrower from the Swingline Lender in bankruptcy or otherwise,
the loss of the amount so recovered shall be ratably shared among all the
Lenders in accordance with their respective Commitment Percentages.
 
         (iii)   Each Lender acknowledges and agrees that its obligation to
refund Swingline Loans (including accrued and unpaid interest thereon) in
accordance with the terms of this Section 2.02(c) is absolute and unconditional
and shall not be affected by any circumstance whatsoever, including, without
limitation, the existence of a Default or an Event of Default other than a
Default or Event of Default that the Swingline Lender had actual knowledge of at
the time such Swingline Loan was made. Further, each Lender agrees and
acknowledges that if prior to the refunding of any outstanding Swingline Loans
pursuant to this Section 2.02(c), one of the events described in Section 7.01(e)
shall have occurred, each Lender will, subject to Section 2.02(c)(i), on the
next Business Day, purchase an undivided participating interest in the Swingline
Loan in an amount equal to its Commitment Percentage multiplied by the aggregate
amount of such Swingline Loan. Each Lender will immediately transfer to the
Swingline Lender, in immediately available funds, the amount of its
participation and upon receipt thereof the Swingline Lender will deliver to such
Lender a certificate evidencing such participation dated the date of receipt of
such funds and for such amount. Whenever, at any time after the Swingline Lender
has received from any Lender such Lender’s participating interest in a Swingline
Loan, the Swingline Lender receives any payment on account thereof, the
Swingline Lender will distribute to such Lender its participating interest in
such amount (appropriately adjusted, in the case of interest payments, to
reflect the period of time during which such Lender’s participating interest was
outstanding and funded).
 
(d)   The Swingline Lender may resign at any time by giving written notice
thereof to the Lenders and the Borrower, with any such resignation to become
effective only upon the appointment of a successor Swingline Lender pursuant to
this Section 2.03(d). Upon any such resignation, the Required Lenders shall have
the right to appoint a successor Swingline Lender, which shall be a Lender or an
Eligible Assignee acceptable to the Borrower. If no successor Swingline Lender
shall have been so appointed by the Required Lenders, and shall have accepted
such appointment, within 30 days after the retiring Swingline Lender’s giving of
notice of resignation, then the retiring Swingline Lender may, on behalf of the
Lenders, appoint a successor Swingline Lender, which shall be a Lender or an
Eligible Assignee. Upon the acceptance of any appointment as Swingline Lender
hereunder by a successor Swingline Lender, such successor Swingline Lender shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Swingline Lender.
 
SECTION 2.03 Procedure for Advances of Loans.
 
(a)    Requests for Borrowing.
 
(i)   Revolving Loans.
 
(A) Base Rate Loans. Subject to Section 3.05(b) with respect to Tender Advance
Revolving Loans made on the date of a Term Drawing, by no later than 11:00

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a.m. (Charlotte, North Carolina time) on the Business Day prior to the date of
the Borrower’s request for a borrowing of a Base Rate Loan, the Borrower shall
submit to the Administrative Agent a written notice in the form attached hereto
as Exhibit C (a “Notice of Borrowing”) and otherwise complying in all respects
with Section 4.02 hereof, which such Notice of Borrowing shall set forth (A) the
amount requested and (B) the desire to have such Loans accrue interest at the
Base Rate. A Notice of Borrowing received after 11:00 a.m. (Charlotte, North
Carolina time) shall be deemed received on the next Business Day. The
Administrative Agent shall promptly notify the Lenders of each Notice of
Borrowing.
 
(B) LIBOR Rate Loans. By no later than 11:00 a.m. (Charlotte, North Carolina
time) on the third Business Day prior to the date of the Borrower’s request for
a borrowing, the Borrower shall submit a Notice of Borrowing of a LIBOR Rate
Loan to the Administrative Agent, which such Notice of Borrowing shall otherwise
comply in all respects with Section 4.02 hereof and shall set forth (A) the
amount requested, (B) the desire to have such Loans accrue interest at the LIBOR
Rate and (C) the Interest Period applicable thereto. A Notice of Borrowing
received after 11:00 a.m. (Charlotte, North Carolina time) shall be deemed
received on the next Business Day. The Administrative Agent shall promptly
notify the Lenders of each Notice of Borrowing.
 
(ii)   Swingline Loans. By no later than 1:00 p.m. (Charlotte, North Carolina
time) on the Business Day of the proposed Swingline Loan, the Borrower shall
submit to the Administrative Agent a written notice in the form attached hereto
as Exhibit D (a “Notice of Swingline Borrowing”) and otherwise complying in all
respects with Section 4.02 hereof, which such Notice of Swingline Borrowing
shall specify (A) the date of such borrowing, which shall be a Business Day, (B)
the aggregate amount of such borrowing, and (C) whether such proposed Swingline
Loan will bear interest at a rate per annum for each day that such Swingline
Loan is outstanding at either (I) the daily LIBOR rate (as determined by the
Administrative Agent) for each such day plus the Applicable LIBOR Margin or (II)
the Prime Rate for each such day. A Notice of Swingline Borrowing received after
1:00 p.m. (Charlotte, North Carolina time) shall be deemed received on the next
Business Day. The Administrative Agent shall promptly notify the Lenders of each
Notice of Swingline Borrowing received by the Administrative Agent.
 
(iii)   Competitive Bid Loans. Competitive Bid Loans shall be requested in the
manner provided for in Section 2.04(b).
 
(b)   Each Notice of Borrowing and Notice of Swingline 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.

 
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(c)   Each Revolving Loan shall be in an aggregate principal amount of
$5,000,000 or any multiple of $1,000,000 in excess thereof (except that any such
Revolving Loan may be in the aggregate amount of the unborrowed Commitments on
such date).
 
(d)   Disbursement of Loans.
 
(i)   Revolving Loans. Not later than 2:00 p.m. (Charlotte, North Carolina time)
on the proposed borrowing date or, with respect to Tender Advance Revolving
Loans made on the date of any Term Drawing, not later than 12:00 p.m.
(Charlotte, North Carolina time) on the Business Day immediately following the
date of such Term Drawing, 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 Commitment Percentage multiplied by the Revolving Loans to be made
on such borrowing date or, with respect to Tender Advance Revolving Loans, made
on the Business Day immediately prior to such date. Subject to Section 3.05, the
Borrower hereby irrevocably authorizes the Administrative Agent to disburse the
proceeds of each borrowing requested pursuant to this Section 2.03(d)(i) 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 E 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 Revolving Loan equal to the
amount by which any Lender has not made available to the Administrative Agent
its applicable Commitment Percentage of such Revolving Loan. Revolving Loans to
be made for the purpose of refunding Swingline Loans shall be made by the
Lenders as provided in Section 2.02(c).
 
          (ii)   Swingline Loans. The Swingline Lender shall, before 2:00 p.m.
(Charlotte, North Carolina time) on the date of such Swingline Borrowing, make
available to the Administrative Agent for the account of the Borrower in same
day funds, the proceeds of such Swingline Borrowing. The Borrower hereby
irrevocably authorizes the Administrative Agent to disburse the proceeds of each
Swingline Borrowing requested pursuant to this Section 2.03(d)(ii) in
immediately available funds by crediting or wiring such proceeds to the deposit
account of the Borrower identified in the most recent Notice of Account
Designation or such other account as may be designated in writing by the
Borrower to the Administrative Agent from time to time. The Swingline Loans
shall be included in the Commitments of the Lenders, and each Swingline
Borrowing will reduce correspondingly the amount of the available Commitment of
each Lender on a pro rata basis based on each Lender’s Commitment Percentage.
 
(iii)   Competitive Bid Loans. Competitive Bid Loans shall be disbursed in the
manner provided for in Section 2.04(e).
 
SECTION 2.04     Competitive Bid Loans.
 
(a)   Competitive Bid Loans. Subject to the terms and conditions set forth
herein, the Borrower may, from time to time, during the period from the Closing
Date until the date
 
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occurring seven days prior to the Termination Date, request and each Lender may,
in its sole discretion, agree to make Competitive Bid Loans to the Borrower;
provided, that (i) the sum of the aggregate principal amount of the Lenders’
Extensions of Credit (including the amount set forth in the Competitive Bid
Request) outstanding shall not exceed the Commitments of the Lenders, (ii) the
sum of the aggregate principal amount of Competitive Bid Loans outstanding
(including the amount set forth in the Competitive Bid Request) to the Borrower
shall not exceed 50% of the Commitments of the Lenders, and (iii) if a Lender
makes a Competitive Bid Loan, such Lender’s obligation to make its Commitment
Percentage of any Swingline Loan, L/C Obligation or Revolving Loan shall not be
reduced thereby. No Competitive Bid Loan shall be outstanding for a period in
excess of 6 months.
 
(b)   Competitive Bid Requests. The Borrower may solicit Competitive Bids by
delivery of a Competitive Bid Request to the Administrative Agent by 10:00 a.m.
(Charlotte, North Carolina time), on a Business Day one Business Day prior to
the date of a requested Competitive Bid Loan. A Competitive Bid Request must be
substantially in the form of Exhibit B-1, shall be accompanied by the
Competitive Bid Request Fee and shall specify (I) the date of the requested
Competitive Bid Loan (which shall be a Business Day), (II) the amount of the
requested Competitive Bid Loan and (III) the applicable Interest Period or
Interest Periods requested. The Administrative Agent shall notify the Lenders of
its receipt of a Competitive Bid Request and the contents thereof and invite the
Lenders to submit Competitive Bids in response thereto. The Borrower may not
request a Competitive Bid Loan more frequently than three times every calendar
month.
 
(c)   Competitive Bid Procedure. Each Lender may, in its sole discretion, make
one or more Competitive Bids to the Borrower in response to a Competitive Bid
Request in the form of Exhibit B-2. Each Competitive Bid must be received by the
Administrative Agent not later than 10:00 a.m. (Charlotte, North Carolina time)
three Business Days prior to the date of the requested Competitive Bid Loan;
provided, that should the Administrative Agent, in its capacity as a Lender,
desire to submit a Competitive Bid it shall notify the Borrower of its
Competitive Bid and the terms thereof not later than 15 minutes prior to the
time the other Lenders are required to submit their Competitive Bids. A Lender
may offer to make all or part of the requested Competitive Bid Loan and may
submit multiple Competitive Bids in response to a Competitive Bid Request. Any
Competitive Bid must specify (I) the particular Competitive Bid Request as to
which the Competitive Bid is submitted, (II) the minimum (which shall be not
less than $5,000,000 and integral multiples of $1,000,000 in excess thereof) and
maximum principal amounts of the requested Competitive Bid Loan or Loans which
the Lender is willing to make, (III) the maturity date of the requested
Competitive Bid Loan or Loans which the Lender is willing to make and which
shall not exceed the Termination Date and (IV) the applicable interest rate or
rates and Interest Period or Interest Periods therefor. A Competitive Bid
submitted by a Lender in accordance with the provisions hereof shall be
irrevocable. The Administrative Agent shall promptly notify the Borrower of all
Competitive Bids made and the terms thereof. The Administrative Agent shall send
a copy of each of the Competitive Bids to the Borrower and each of the Lenders
for their respective records as soon as practicable.
 
(d)   Acceptance of Competitive Bids. The Borrower may, in its sole discretion,
subject only to the provisions of this subsection (d), accept or refuse any
Competitive Bid
 
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offered to it. To accept a Competitive Bid, the Borrower shall give oral
notification of its acceptance of any or all such Competitive Bids (which shall
be promptly confirmed in writing) to the Administrative Agent by 12:00 p.m.
(Charlotte, North Carolina time) three Business Days prior to the date of the
requested Competitive Bid Loan; provided, that (I) the failure by the Borrower
to give timely notice of its acceptance of a Competitive Bid shall be deemed to
be a refusal thereof, (II) to the extent Competitive Bids are for comparable
Interest Periods, the Borrower may accept Competitive Bids only in ascending
order of rates, (III) the aggregate amount of Competitive Bids accepted by the
Borrower shall not exceed the principal amount specified in the Competitive Bid
Request, (IV) if the Borrower shall accept a bid or bids made at a particular
Competitive Bid Rate, but the amount of such bid or bids shall cause the total
amount of bids to be accepted by the Borrower to be in excess of the amount
specified in the Competitive Bid Request, then the Borrower shall accept a
portion of such bid or bids in an amount equal to the amount specified in the
Competitive Bid Request less the amount of all other Competitive Bids accepted
with respect to such Competitive Bid Request, which acceptance in the case of
multiple bids at such Competitive Bid Rate, shall be made pro rata in accordance
with the amount of each such bid at such Competitive Bid Rate and (V) no bid
shall be accepted for a Competitive Bid Loan unless such Competitive Bid Loan is
in a minimum principal amount of $5,000,000 and integral multiples of $1,000,000
in excess thereof, except that where a portion of a Competitive Bid is accepted
in accordance with the provisions of clause (IV) of this subsection (d), then in
a minimum principal amount of $500,000 and integral multiples of $100,000 (but
not in any event less than the minimum amount specified in the Competitive Bid),
and in calculating the pro rata allocation of acceptances of portions of
multiple bids at a particular Competitive Bid Rate pursuant to clause (IV) of
this subsection (d), the amounts shall be rounded to integral multiples of
$100,000 in a manner which shall be in the discretion of the Borrower. A notice
of acceptance of a Competitive Bid given by the Borrower in accordance with the
provisions hereof shall be irrevocable. The Administrative Agent shall, not
later than 1:00 p.m. (Charlotte, North Carolina time) three Business Days prior
to the date of such Competitive Bid Loan, notify each bidding Lender whether or
not its Competitive Bid has been accepted (and if so, in what amount and at what
Competitive Bid Rate), and each successful bidder will thereupon become bound,
subject to the other applicable conditions hereof, to make the Competitive Bid
Loan in respect of which its bid has been accepted.
 
(e)   Funding of Competitive Bid Loans. Each Lender which is to make a
Competitive Bid Loan shall, before 2:00 P.M. (Charlotte, North Carolina time) on
the date specified in the Competitive Bid Request, make available to the
Administrative Agent, by deposit of immediately available funds at the office of
the Administrative Agent, for the account of the Borrower in same day funds, the
proceeds of such Competitive Bid Loan. The Borrower hereby irrevocably
authorizes the Administrative Agent to disburse the proceeds of each Competitive
Bid Loan requested pursuant to Section 2.04(b) in immediately available funds by
crediting or wiring such proceeds to the deposit account of the Borrower
identified in the most recent Notice of Account Designation or such other
account as may be designated in writing by the Borrower to the Administrative
Agent from time to time.
 
(f)   Maturity of Competitive Bid Loans. Each Competitive Bid Loan shall mature
and be due and payable in full on the last day of the Interest Period, selected
in accordance
 
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with Section 2.10(b), which date shall not be less than 7 days nor more than the
lesser of (i) 6 months duration, and (ii) the number of days remaining until the
Termination Date, applicable thereto. Unless the Borrower shall give notice to
the Administrative Agent otherwise (or repays such Competitive Bid Loan), or a
Default or Event of Default exists and is continuing, the Borrower shall be
deemed to have requested Revolving Loans from all of the Lenders (in the amount
of the maturing Competitive Bid Loan and accruing interest at the Base Rate),
the proceeds of which will be used to repay such Competitive Bid Loan.
 
SECTION 2.05     Fees.
 
(a)   The Borrower hereby agrees to pay to the Administrative Agent, for the
ratable account of each Lender, a facility fee (the “Facility Fee”) equal to
such Lender’s Commitment multiplied by a rate per annum equal to the “Facility
Fee” under the definition of Applicable Margin from the date hereof to the Final
Fee Payment Date, payable quarterly in arrears on the last day of each March,
June, September and December, commencing September 30, 2006, and on the Final
Fee Payment Date.
 
(b)   The Borrower hereby agrees to pay to the Administrative Agent, for the
ratable account of each Lender, a utilization fee (the “Utilization Fee”), if
the aggregate amount of the outstanding Lenders’ Extensions of Credit is equal
to or greater than fifty percent (50%) of the Commitments of the Lenders,
calculated daily (the calculation of which is known as the “Utilization
Amount”), which Utilization Fee shall be equal to the aggregate amount of the
Utilization Amount multiplied by a rate per annum equal to the “Utilization Fee”
under the definition of Applicable Margin from the date hereof to the Final Fee
Payment Date, payable quarterly in arrears on the last day of each March, June,
September and December, and on the Final Fee Payment Date.
 
(c)   The Borrower hereby agrees to pay such other fees as are specified in that
certain Fee Letter Agreement dated August 9, 2006, among the Borrower, the
Administrative Agent and Wachovia Capital Markets, LLC, a Delaware limited
liability company.
 
SECTION 2.06     Reduction of Commitments.
 
(a)   Voluntary.
 
(i)   Subject to Section 2.07(b)(i) and (ii), upon at least three Business Days’
notice, the Borrower shall have the right to permanently terminate or reduce the
aggregate unused amount of the Commitments at any time or from time to time;
provided, that (a) each partial reduction shall be in an aggregate amount at
least equal to $10,000,000 and in integral multiples of $1,000,000 in excess
thereof, and (b) no reduction shall be made which would reduce the Commitment to
an amount less than the sum of the then outstanding Extensions of Credit. Any
reduction in (or termination of) the Commitments shall be permanent and may not
be reinstated.
 
(ii)   Subject to Section 2.07(b)(iii), upon at least three Business Days’
notice, the Borrower shall have the right to permanently terminate or reduce the
aggregate unused amount of the Swingline Commitment at any time or from time to
time; provided, that (a) each partial reduction shall be in an aggregate amount
at least equal to $1,000,000 and in
 
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integral multiples of $1,000,000 in excess thereof, and (b) no reduction shall
be made which would reduce the Swingline Commitment to an amount less than the
sum of the then outstanding Swingline Loans. Any reduction in (or termination
of) the Swingline Commitment shall be permanent and may not be reinstated.
 
(b)   Mandatory.
 
(i)   On the Termination Date, the Commitments shall automatically and
permanently be reduced to zero.
 
(ii)   On the Current Stated Termination Date, the Commitments of Non-Consenting
Lenders shall automatically and permanently be reduced to zero.
 
SECTION 2.07     Prepayment of Loans.
 
(a)   Voluntary Prepayments. The Borrower shall have the right to prepay Loans
(other than Competitive Bid 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 10.07(b), (ii)
each such partial prepayment of Loans (other than Swingline Loans) shall be in
the minimum principal amount of $10,000,000, and (iii) each such partial
prepayment of Swingline Loans shall be in a minimum principal amount of $500,000
(or such lesser amount that may be outstanding at any such time). Amounts
prepaid hereunder shall be applied first to Swingline Loans until paid in full,
second to Base Rate Loans until paid in full, and third to LIBOR Rate Loans
until paid in full, in direct order of Interest Period maturities, pro rata
among all Lenders holding same. The Borrower may not prepay Competitive Bid
Loans.
 
(b)   Mandatory Prepayments.
 
(i)   If at any time the amount of the Extensions of Credit exceed the
Commitments, the Borrower shall immediately make a principal payment to the
Administrative Agent for the ratable accounts of the Lenders in an amount
necessary together with (i) accrued interest to the date of such prepayment on
the principal amount repaid or prepaid and (ii) in the case of prepayments of
LIBOR Rate Loans, any amount payable to the Lenders pursuant to Section
10.07(b), so that the Extensions of Credit do not exceed the Commitments. Any
payments made under this Section 2.07(b)(i) shall be applied first to Swingline
Loans until paid in full, second to Base Rate Loans until paid in full, third to
LIBOR Rate Loans in direct order of Interest Period maturities until paid in
full and fourth to Competitive Bid Loans, pro rata among all Lenders holding
same.
 
(ii)   On each date on which the Commitment is decreased pursuant to Section
2.06, the Borrower shall pay or prepay to the Administrative Agent for the
ratable accounts of the Lenders such principal amount of the outstanding Loans
as shall be necessary, together with (i) accrued interest to the date of such
prepayment on the principal amount repaid or prepaid and (ii) in the case of
prepayments of LIBOR Rate Loans, any amount payable to the Lenders pursuant to
Section 10.07(b), so that the aggregate amount of the Lenders’ Extensions of
Credit does not exceed the Commitments. Any payments made under this Section
2.07(b)(ii) shall be applied first to Swingline Loans until paid in full, second
to Base Rate Loans until paid in full, third to LIBOR Rate Loans in direct order
of Interest Period maturities until paid in full and fourth to Competitive Bid
Loans, pro rata among all Lenders holding same.
 
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(iii)   On each date on which the Swingline Commitment is reduced pursuant to
Section 2.06(b), the Borrower shall pay or prepay to the Administrative Agent
for the ratable accounts of the Lenders or prepay such principal amount
outstanding of Swingline Loans, together with accrued interest to the date of
such prepayment on the principal amount repaid or prepaid, if any, as may be
necessary so that after such payment the aggregate unpaid principal amount of
Swingline Loans does not exceed the amount of the Swingline Commitment as then
reduced.
 
(iv)   On the Termination Date, the Borrower shall pay to the Administrative
Agent for the ratable accounts of the Lenders, the principal amount of all Loans
then outstanding, together with (i) accrued interest to the date of such payment
on the principal amount repaid and (ii) in the case of prepayments of LIBOR Rate
Loans, any amount payable to the Lenders pursuant to Section 10.07(b).
 
(v)   Notwithstanding anything set forth herein to the contrary, prior to or
simultaneously with the receipt of proceeds related to the remarketing of Bonds
purchased pursuant to one or more Term Drawings, the Borrower shall directly, or
through the applicable Remarketing Agent or Tender Agent on behalf of the
Borrower, repay or prepay (as the case may be) then-outstanding Tender Advance
Revolving Loans (in the order in which they were made), and then other
outstanding Obligations hereunder, by paying to the Administrative Agent for the
pro rata share of the Banks an amount equal to the sum of (i) the aggregate
principal amount of the Bonds remarketed plus (ii) all accrued interest on the
principal amount of Tender Advance Revolving Loans and/or other Obligations so
repaid or prepaid plus (iii) in the case of prepayments of LIBOR Rate Loans, any
amount payable to the Banks in respect thereof pursuant to Section 10.07(b).
 
SECTION 2.08     Increase in Commitment. 
 
(a)   The Borrower may increase the aggregate amount of the Commitments by an
amount not greater than $100,000,000 (any such increase, a “Commitment
Increase”) by designating either one or more of the existing Lenders (each of
which, in its sole discretion, may determine whether and to what degree to
participate in such Commitment Increase) or one or more Eligible Assignees
reasonably acceptable to the Administrative Agent that at the time agree, in the
case of any existing Lender to increase its Commitment (an “Increasing Lender”)
and, in the case of any other Eligible Assignee (an “Additional Lender”), to
become a party to this Agreement. The sum of the increases in the Commitments of
the Increasing Lenders pursuant to this Section 2.08 plus the Commitments of the
Additional Lenders upon giving effect to the Commitment Increase shall not in
the aggregate exceed the amount of the Commitment Increase or be less than
$10,000,000 in the aggregate and integral multiples of $5,000,000 in excess
thereof. The Borrower shall provide prompt notice of any proposed Commitment
Increase pursuant to this Section 2.08 the Administrative Agent, which shall
promptly provide a copy of such notice to the Lenders.
 

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(b)   Any Commitment Increase shall become effective upon (A) the receipt by the
Administrative Agent of (i) an agreement in form and substance satisfactory to
the Administrative Agent signed by the Borrower, each Increasing Lender and each
Additional Lender, setting forth the new commitments and Commitment Percentage
of each such Lender and setting forth the agreement of each Additional Lender to
become a party to this Agreement and to be bound by all the terms and provisions
hereof binding upon each Lender, and (ii) such evidence of appropriate corporate
authorization on the part of the Borrower with respect to the Commitment
Increase and such opinions of counsel for the Borrower with respect to the
Commitment Increase as the Administrative Agent may reasonably request, (B) the
funding by each Increasing Lender and Additional Lender of the Loan(s) to be
made by each such Lender described in paragraph (c) below, (C) receipt by the
Administrative Agent of the reasonable fees and expenses of the Administrative
Agent and Lenders associated with such Commitment Increase, and (D) receipt by
the Administrative Agent of a certificate (the statements contained in which
shall be true) of a duly authorized officer of the Borrower stating that both
before and after giving effect to such Commitment Increase (i) no Default or
Event of Default has occurred and is continuing, and (ii) all representations
and warranties made by the Borrower in this Agreement are true and correct in
all material respects as of the date of the Commitment Increase.
 
(c)   If any Loans are outstanding upon the effective date of any Commitment
Increase, each Increasing Lender and each Additional Lender shall provide funds
to the Administrative Agent in the manner described in Section 2.03(d) in an
amount equal to the product of (x) the aggregate outstanding principal amount of
such Loans (other than Competitive Bid Loans and Swingline Loans), expressed as
a percentage of the aggregate Commitments (calculated, in each case, immediately
after such Commitment Increase) and (y) in the case of an Increasing Lender,
such Increasing Lender’s Commitment Increase and, in the case of an Additional
Lender, such Additional Lender’s Commitment. The funds so provided by any such
Lender shall be deemed to be a Loan or Loans made by such Lender on the date of
such Commitment Increase, with such Loan(s) being in (A) in an amount equal to
the product of (x) the aggregate outstanding principal amount of each Loan
(other than Competitive Bid Loans and Swingline Loans) expressed as a percentage
of the aggregate Commitments (calculated, in each case, immediately prior to
such Commitment Increase) and (y) in the case of an Increasing Lender, such
Increasing Lender’s Commitment Increase and, in the case of an Additional
Lender, such Additional Lender’s Commitment and (B) of the same Type(s) and
having the same Interest Periods(s) as each Loan described in the preceding
clause (A), such that after giving effect to such Commitment Increase and the
Loan made on the date of such Commitment Increase, each Loan outstanding
hereunder shall consist of Loans made ratably by all of the Lenders (after
giving effect to such Commitment Increase). The Borrower shall pay to the
Administrative Agent any amounts payable pursuant to Section 10.07(b) in
connection with such Commitment Increase.
 
(d)   Notwithstanding any provision contained herein to the contrary, from and
after the date of any Commitment Increase and the making of any Loans on such
date pursuant to paragraph (c) above, all calculations and payments of Facility
Fees, Utilization Fees and of interest on the Loans comprising any Loan shall
take into account the actual Commitment of each Lender (including the Additional
Lender) and the principal amount outstanding of each Loan made by each such
Lender during the relevant period of time.

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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 on its books; provided, that the failure of such Lender
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.
 
(b)   Revolving Loan Notes. The Revolving Loans made by the Lenders to the
Borrower shall be evidenced, upon request by any Lender, by the Revolving Loan
Notes in a principal amount equal to the amount of such Lender’s Commitment
Percentage multiplied by the Commitment as originally in effect.
 
(c)   Swingline Note. The Swingline Loans made by the Swingline Lender to the
Borrower shall be evidenced, upon request by the Swingline Lender, by a
Swingline Note in a principal amount equal to the Swingline Commitment.
 
(d)   Competitive Bid Loan Notes. The Competitive Bid Loans made by the Lenders
to the Borrower shall be evidenced, upon request by the Lender or Lenders making
such Competitive Bid Loan, by a Competitive Bid Loan Notes in a principal amount
equal to the Competitive Bid Loan advanced under such Competitive Bid Request.
 
SECTION 2.10     Interest Rates.
 
(a)   Interest Rate Options. Subject to the provisions of this Section 2.10, the
aggregate unpaid principal balance of each Loan shall bear interest at the
Applicable Rate. Any Loan or any portion thereof as to which this Agreement
specifies no Applicable Rate or as to which the Borrower has not duly specified
an interest rate as provided in this Agreement shall be deemed a Base Rate Loan.
 
(b)   Interest Periods. In connection with each LIBOR Rate Loan, the Borrower,
by giving notice at the times described in Section 2.03(a)(i)(B), shall elect an
interest period (each, an “Interest Period”) to be applicable to such LIBOR Rate
Loan, which Interest Period shall be a period of fourteen (14) days, one (1)
month, two (2) months, three (3) months, or six (6) months; provided, that:
 
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(i)   the Interest Period shall commence on the date of advance of or conversion
to any LIBOR Rate Loan and, in the case of immediately successive Interest
Periods, each successive Interest Period shall commence on the date on which the
next preceding Interest Period expires;
 
(ii)   the Borrower may not select any Interest Period that ends after the
Termination Date;
 
(iii)   Interest Periods commencing on the same date for LIBOR Rate Loans
comprising part of the same Loan shall be of the same duration;
 
(iv)   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;
 
(v)   with respect to LIBOR Rate Loans, if any Interest Period begins on a day
for which there is no numerically corresponding day in the calendar month at the
end of such Interest Period, such Interest Period shall end on the last Business
Day of such calendar month; and
 
(vi)   no more than eight (8) Interest Periods may be in effect at any time.
 
(c)   Default Rate. Subject to Section 7.02, upon the occurrence and during the
continuance of an Event of Default, (i) the Borrower shall no longer have the
option to request LIBOR Rate Loans, (ii) all outstanding LIBOR Rate Loans shall
bear interest at a rate per annum equal to the Default Rate, (iii) all
outstanding Base Rate Loans and Swingline Loans shall bear interest at a rate
per annum equal to the Default Rate, and (iv) all outstanding Competitive Bid
Loans shall bear interest at a rate per annum equal to the Default Rate.
Interest shall continue to accrue on the Notes 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. (A) Interest on each Base Rate Loan and
Swingline Loan shall be payable in arrears on the last Business Day of each
calendar quarter commencing September 30, 2006, provided, however, that interest
on each Swingline Loan bearing interest at the rate described in Section
2.03(a)(ii)(C)(I) shall be payable in arrears on the date such Swingline Loan is
repaid; and (B) interest on each LIBOR Rate Loan shall be 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. All interest rates, fees and commissions provided
hereunder shall be computed on the basis of a 360-day year and assessed for the
actual number of days elapsed; provided, that interest on each Base Rate Loan
and Swingline Loan that is based on the Prime Rate shall be computed on the
basis of a 365-day or 366-day year, as applicable, and assessed for the actual
number of days elapsed.
 
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(e)   Payments. The Borrower shall make each payment hereunder not later than
12:00 noon (Charlotte, North Carolina time) on the day when due in lawful money
of the United States of America to the Administrative Agent at its address
referred to in Section 10.02 in same day funds. The Administrative Agent shall
distribute any such payments received by it for the account of any other Person
to the appropriate recipient promptly following receipt thereof.
 
(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 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 and Competitive Bid Loan of such Lender, from the date of such LIBOR
Rate Loan and Competitive Bid Loan until such principal amount is paid in full,
at an interest rate per annum equal at all times to the remainder obtained by
subtracting (i) the LIBOR Rate for the Interest Period for such LIBOR Rate Loan
or Competitive Bid Loan, from (ii) the rate obtained by dividing such LIBOR Rate
by a percentage equal to 100% minus the LIBOR Rate Reserve Percentage of such
Lender for such Interest Period, payable on each date on which interest is
payable on such LIBOR Rate Loan or Competitive Bid Loan. Such additional
interest shall be determined by such Lender and notified to the Borrower through
the Administrative Agent.

SECTION 2.12     Interest Rate Determination.
 
(a)   The Administrative Agent shall give prompt notice to the Borrower and the
Lenders of the applicable interest rate determined by the Administrative Agent
for purposes of Section 2.10.
 
(b)   If, with respect to any LIBOR Rate Loans and Competitive Bid Loan, (i) the
Required Lenders notify the Administrative Agent that the LIBOR Rate for any
Interest Period for such LIBOR Rate Loans or Competitive Bid Loan will not
adequately reflect the cost to such Required Lenders of making, funding or
maintaining their respective LIBOR Rate
 
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Loans or Competitive Bid Loan for such Interest Period or (ii) the Required
Lenders notify the Administrative Agent or the Administrative Agent determines
that adequate and fair means do not exist for ascertaining the applicable
interest rate on the basis provided for in the definition of LIBOR Rate, the
Administrative Agent shall forthwith so notify the Borrower and the Lenders,
whereupon:
 
(i)   each LIBOR Rate Loan or Competitive Bid 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.
 
(c)   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 with respect to any LIBOR Rate
Loans on or prior to 11:00 a.m., Charlotte, North Carolina 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.
 
SECTION 2.13     Voluntary Conversion of Loans. 
 
The Borrower may on any Business Day, by delivering an irrevocable Notice of
Conversion (a “Notice of Conversion”) in the form of Exhibit F hereto to the
Administrative Agent not later than 11:00 a.m., Charlotte, North Carolina time,
on the third Business Day prior to the date of the proposed Conversion, and
subject to the provisions of Sections 2.10, 2.15 and 4.03, 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)   If, due to either (i) the introduction of or any change (other than any
change by way of imposition or increase of reserve requirements, in the case of
LIBOR Rate Loans or Competitive Bid Loans, included in the LIBOR Rate Reserve
Percentage) in or in the interpretation of any law or regulation or (ii) the
compliance with any guideline or request from any central bank or other
governmental authority (whether or not having the force of law), in any case,
promulgated, implemented or occurring on or after the date hereof, there shall
be any increase in the cost to any Lender of agreeing to make or making, funding
or maintaining LIBOR Rate Loans or Competitive Bid Loans, then the Borrower
shall from time to time, upon demand by such Lender (with a copy of such demand
to the Administrative Agent), pay to such Lender additional amounts sufficient
to compensate such Lender for such
 
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increased cost. Each Lender agrees to notify the Borrower of any such increased
costs as soon as reasonably practicable after determining that such increased
cost is applicable to LIBOR Rate Loans or Competitive Bid Loans hereunder. A
certificate as to the amount of such increased cost, submitted to the Borrower
and the Administrative Agent by such Lender, shall be conclusive and binding for
all purposes, absent manifest error.
 
(b)   If any Lender determines that compliance with any law or regulation or any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law), in any case promulgated, implemented
or occurring on or after the date hereof, affects or would affect the amount of
capital required or expected to be maintained by any such Lender or any
corporation controlling any such Lender and that the amount of such capital is
increased by or based upon the existence of such Lender’s Commitment hereunder
and other Commitments of this Type, then, upon demand by any such Lender, as the
case may be (with a copy of such demand to the Administrative Agent), the
Borrower shall immediately pay to such Lender, as the case may be, from time to
time as specified by such Lender, additional amounts sufficient to compensate
such Lender, or such corporation in the light of such circumstances, for any
difference in the rate of return of any such Lender to the extent that such
Lender, as the case may be, reasonably determines such increase in capital to be
allocable to the existence of such Lender’s Commitment hereunder, as the case
may be. Each Lender agrees to notify the Borrower of any such additional amount
as soon as reasonably practicable after the any Lender makes such determination.
A certificate as to such amounts submitted to the Borrower and the
Administrative Agent by such Lender shall be conclusive and binding for all
purposes, absent manifest error.
 
SECTION 2.15 I    llegality. 
 
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 makes it unlawful, or any central
bank or other governmental authority asserts that it is unlawful, for any Lender
or its LIBOR Lending Office to perform its obligations hereunder to make LIBOR
Rate Loans or Competitive Bid Loans, or to fund or maintain LIBOR Rate Loans or
Competitive Bid Loans hereunder, (i) the obligation of the Lenders to make
Competitive Bid Loans, (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 affected Lender) shall notify the
Borrower and the Lenders that the circumstances causing such suspension no
longer exist, and (iii) the Borrower shall pay (x) on the last day of the
applicable Interest Period, or (y) 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 and Competitive Bid Loans of all Lenders then
outstanding, together with interest accrued thereon and amounts payable pursuant
to Section 10.07(b), 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 or Competitive Bid Loans of all Lenders then
outstanding into Base Rate Loans in accordance with Section 2.13.
 
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SECTION 2.16     Nature of Obligations of Lenders Regarding Extensions of
Credit; Assumption by the Administrative Agent.
 
The obligations of the Lenders under this Agreement to make the Loans and issue
or participate in Letters of Credit are several and are not joint or joint and
several. Unless the Administrative Agent shall have received notice from a
Lender prior to a proposed borrowing date that such Lender will not make
available to the Administrative Agent such Lender’s ratable portion of the
amount to be borrowed on such date (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
proposed borrowing 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 such borrowing 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 Commitment Percentage of such borrowing is not
made available to the Administrative Agent by such Lender within three (3)
Business Days of such borrowing 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 Commitment
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 Commitment
Percentage of such Loan available on such borrowing date, but no Lender shall be
responsible for the failure of any other Lender to make its Commitment
Percentage of such Loan available on the borrowing date.
 
SECTION 2.17     Net of Taxes, Etc. 
 
(a)   All payments made by the Borrower under this Agreement shall be made free
and clear of, and without deduction or withholding for or on account of, any
present or future income, stamp or other taxes, levies, imposts, duties,
charges, fees, deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any Governmental Authority, excluding, in the
case of the Administrative Agent and each Lender, taxes imposed on its overall
net income, and franchise taxes imposed on it by the jurisdiction under the laws
of which the Administrative Agent or such Lender (as the case may be) is
organized or any political subdivision thereof and, in the case of each Lender,
taxes imposed on its overall net income, and franchise taxes imposed on it by
the jurisdiction of such Lender’s Applicable Lending Office or any political
subdivision thereof (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as “Taxes”).
If any Taxes are required to be withheld from any amounts
 
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payable to the Administrative Agent or any Lender hereunder, the amounts so
payable to the Administrative Agent or such Lender shall be increased to the
extent necessary to yield to the Administrative Agent or such Lender (after
payment of all Taxes) interest or any such other amounts payable hereunder at
the rates or in the amounts specified in this Agreement. Whenever any Taxes are
payable by the Borrower, as promptly as possible thereafter the Borrower shall
send to the Administrative Agent for its own account or for the account of such
Lender, a certified copy of an original official receipt received by the
Borrower showing payment thereof. If the Borrower fails to pay any Taxes when
due to the appropriate taxing authority or fails to remit to the Administrative
Agent the required receipts or other required documentary evidence, the Borrower
shall indemnify the Administrative Agent and the Lenders for any incremental
taxes, interest or penalties that may become payable by the Administrative Agent
or any Lender as a result of any such failure. The agreements in this Section
shall survive the termination of this Agreement and the payment of the
obligations hereunder and all other amounts payable hereunder.
 
(b)   Each Lender that is not incorporated under the laws of the United States
of America or a state thereof agrees that it will deliver to the Borrower and
the Administrative Agent on or before the latter of the date hereof and the date
such Lender becomes a Lender (i) two duly completed copies of United States
Internal Revenue Service Form W-8BEN or W-8ECI or successor applicable form, as
the case may be. Each such Lender also agrees to deliver to the Borrower and the
Administrative Agent two further copies of said Form W-8BEN or W-8ECI, or
successor applicable forms or other manner of certification, as the case may be,
on or before the date that any such form previously delivered expires or becomes
obsolete or after the occurrence of any event requiring a change in the most
recent form previously delivered by it to the Borrower, and such extensions or
renewals thereof as may reasonably be requested by the Borrower or the
Administrative Agent, unless in any such case an event (including, without
limitation, any change in treaty, law or regulation) has occurred prior to the
date on which any such delivery would otherwise be required which renders all
such forms inapplicable or which would prevent such Lender from duly completing
and delivering any such form with respect to it and such Lender so advises the
Borrower and the Administrative Agent. Such Lender shall certify that it is
entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes and that it is entitled to
an exemption from United States backup withholding tax.
 
(c)   If any Lender shall request compensation for costs pursuant to this
Section 2.17, (i) such Lender shall make reasonable efforts (which shall not
require such Lender to incur a loss or unreimbursed cost or otherwise suffer any
disadvantage deemed by it to be significant) to make within thirty (30) days an
assignment of its rights and delegation and transfer of its obligations
hereunder to another of its offices, branches or affiliates, if such assignment
would reduce such costs in the future, (ii) the Borrower may with the consent of
the Required Lenders, which consent shall not be unreasonably withheld, secure a
substitute bank to replace such Lender which substitute bank shall, upon
execution of a counterpart of this Agreement and payment to such Lender of any
and all amounts due under this Agreement, be deemed to be a Lender hereunder
(any such substitution referred to in clause (ii) shall be accompanied by an
amount equal to any loss or reasonable expense incurred by such Lender as a
result of such substitution); provided, that this Section 2.17(c) shall not be
construed as limiting the liability of the Borrower to indemnify or reimburse
such Lender for any costs or expenses the Borrower is required hereunder to
indemnify or reimburse.
 

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SECTION 2.18     Extension of Stated Termination Date. 
 
(a)   The Borrower may, by sending written request in substantially the form of
Exhibit J (an “Extension Letter”) to the Administrative Agent (in which case the
Administrative Agent shall promptly deliver a copy to each of the Lenders), no
earlier than seventy-five (75) days and no later than twenty (20) days prior to
any annual anniversary of the Closing Date (each an “Anniversary Date”), request
that the Lenders extend the Stated Termination Date to the day that is one year
after the then existing Stated Termination Date (each such request being
referred to herein as an “Extension”); provided, that such Extension shall only
take effect if Lenders holding at least 51% of the aggregate Commitments as of
the applicable Election Date advise the Administrative Agent as required herein
of their agreement to participate in such Extension (the “Extension
Condition”).  The Stated Termination Date may be extended pursuant to this
Section 2.18 on up to two occasions; provided that, in no event shall the Stated
Termination Date extend beyond August 22, 2013.
 
(b)   Each Lender, acting in its sole discretion, shall, by notice to the
Administrative Agent given no later than fifteen (15) days after the receipt
of any applicable Extension Letter by the Administrative Agent (each an
“Election Date”), advise the Administrative Agent in writing whether or not such
Lender agrees to such Extension.  The election of any Lender to agree to any
Extension shall not obligate any other Lender to so agree.  The failure of any
Lender to respond to a request for an Extension prior to the applicable Election
Date shall be deemed to be a decision by such Lender not to extend the Stated
Termination Date.
 
(c)   If the Extension Condition shall not have been satisfied as of the
applicable Election Date, then the Commitments shall terminate on the then
existing Stated Termination Date (the Stated Termination Date in effect
immediately after the receipt by the Administrative Agent of an Extension Letter
but prior to the Extension so requested in such Extension Letter taking effect
shall be referred to herein as the "Current Stated Termination Date") and all
Loans then outstanding (together with accrued interest thereon and any other
amounts owing under the Loan Documents) shall be due and payable on the Current
Stated Termination Date, subject to any additional requested Extension permitted
pursuant to this Section 2.18.
 
(d)   If the Extension Condition shall have been satisfied as of any
applicable Election Date, then the Borrower shall notify the Administrative
Agent within two (2) Business Days of such Election Date as to whether (i) the
Extension will take effect as of such Election Date or (ii) despite satisfaction
of the Extension Condition, such Extension will not take effect, in which case
the Commitments shall terminate on the Current Stated Termination Date and all
Loans then outstanding (together with accrued interest thereon and any other
amounts owing under the Loan Documents) shall be due and payable on the Current
Stated Termination Date.  If the Borrower fails to notify the Administrative
Agent within two (2) Business Days as required by the immediately preceding
sentence, then the Borrower shall be deemed to have elected for such Extension
to take effect as of the applicable Election Date.  If an Extension takes effect
pursuant to either of the first two sentences of this Section 2.18(d), such
Extension shall be deemed to have taken effect solely as to those Lenders

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(each, a “Consenting Lender”) that shall have agreed to the requested Extension
on or prior to the applicable Election Date and, as to such Consenting Lenders,
the Stated Termination Date shall be the date that is one year after the Current
Stated Termination Date, subject to any additional Extension agreed upon
pursuant to this Section 2.18.  If an Extension becomes effective as to some and
not all of the Lenders (each Lender who shall not have agreed to the Extension
as of the Election Date, a “Non-Consenting Lender”), then:
 
(i)   subject to clause (ii) of this Section 2.18(d), the Commitment of each
Non-Consenting Lender shall terminate on the Stated Termination Date in effect
prior to such Extension taking effect, and all Loans and other amounts payable
hereunder to such Non-Consenting Lender shall become due and payable on the
Stated Termination Date in effect prior to such Extension taking effect and,
on the Stated Termination Date in effect prior to such Extension taking
effect, the aggregate Commitments of the Lenders hereunder shall be reduced by
the aggregate Commitments of the Non-Consenting Lenders so terminated on such
Stated Termination Date;
 
(ii)   the Borrower may, at its own expense, on or prior to the Stated
Termination Date in effect prior to such Extension taking effect, require any
Non-Consenting Lender to transfer and assign without recourse or representation
(except as to title and the absence of Liens created by it) (in accordance with
and subject to the restrictions contained in Section 10.09) all of such
Non-Consenting Lender’s interests, rights and obligations under the Loan
Documents (including with respect to any L/C Obligations) to one or more banks
or other financial institutions (which may include any Lender) (each, an
“Additional Commitment Lender”), provided, that (A) such Additional Commitment
Lender, if not already a Lender hereunder, shall be subject to the approval of
the Administrative Agent (not to be unreasonably withheld or delayed), (B) such
assignment shall become effective no later than the Stated Termination Date in
effect prior to such Extension taking effect and (C) the Additional Commitment
Lender shall pay to such Non-Consenting Lender in immediately available funds on
the effective date of such assignment the principal of and interest accrued to
the date of payment on the Loans made by such Non-Consenting Lender hereunder
and all other amounts accrued for such Non-Consenting Lender's account or owed
to it hereunder; and
 
(iii)    in all cases, each Non-Consenting Lender shall be required to maintain
its original Commitment up to the Stated Termination Date in effect prior to
such Extension taking effect.
 
(e)   Notwithstanding the foregoing, no extension of the Stated Termination Date
shall become effective unless, on the Anniversary Date, the conditions set forth
in Section 4.02 shall be satisfied and the Administrative Agent shall have
received a certificate to that effect dated the Anniversary Date and executed by
the chief executive officer or chief financial officer of the Borrower.
 

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SECTION 2.19     Extension of Stated Expiration Date of Bond L/Cs. 
 
Unless each Bond L/C outstanding pursuant hereto shall have expired in
accordance with its terms on the Cancellation Date, at least ninety (90) days
before the Stated Expiration Date of any Bond L/C, the Borrower may request the
Issuing Lender, with the consent of all the Lenders, by notice to the
Administrative Agent in writing (each such request being irrevocable) to extend
for a 364-day period the Stated Expiration Date for such Bond L/C. If the
Borrower shall make such a request, then the Administrative Agent shall promptly
notify the Lenders thereof, and if the Issuing Lender and all of the Lenders, in
their sole discretion, elect to extend the Stated Expiration Date for such Bond
L/C then in effect, the Administrative Agent shall deliver to the Borrowers a
notice (herein referred to as a “Notice of Extension”) designating the date to
which the Stated Expiration Date for such Bond L/C will be extended and the
conditions of such consent (including, without limitation, conditions relating
to legal documentation and the consent of the applicable Trustee). If all such
conditions are satisfied and such extension of the Stated Expiration Date for
such Bond L/C shall be effective, thereafter all references in this Agreement to
the Stated Expiration Date for such Bond L/C shall be deemed to be references to
the date designated as such in such legal documentation. Any date to which the
Stated Expiration Date for such Bond L/C has been extended in accordance with
this Section 2.19 may be extended in like manner. Failure of the Administrative
Agent to deliver a Notice of Extension as herein provided within thirty (30)
days of a request by the Borrower to extend such Stated Expiration Date for such
Bond L/C shall constitute an election by the Issuing Lender and the Lenders not
to extend the Stated Expiration Date for such Bond L/C.
 
SECTION 2.20     Application of Amounts Received Under Related Documents. 
 
Upon receipt by the Issuing Lender from time to time of any amount pursuant to
the terms of any Related Document (other than pursuant to the terms of this
Agreement), the Issuing Lender shall promptly deliver to the Administrative
Agent any such amount. Upon receipt by the Administrative Agent of any such
amount, the Administrative Agent shall distribute such amounts as follows:
 
First:    To the Issuing Lender in an amount equal to any draw under the Bond
L/Cs not reimbursed in full by the Borrower pursuant to the terms hereof on the
date of such distribution;
 
Second:    To the Issuing Lender (for its own account), the Administrative Agent
(for its own account) and the Lenders, pro rata, in an amount equal to the
commissions and fees due and payable hereunder to the Issuing Lender, the
Administrative Agent and the Lenders on the date of such distribution and in
respect of Bond L/Cs;
 
Third:     To the Lenders, pro rata, in an amount equal to the interest due and
payable on any Tender Advance Revolving Loan outstanding hereunder on the date
of such distribution;
 
Fourth:    To the Lenders, pro rata, in an amount equal to the principal due and
payable on any Tender Advance Revolving Loan outstanding hereunder on the date
of such distribution;
 
Fifth:     To the Issuing Lender (for its own account) and the Administrative
Agent (for its own account), in an amount equal to any amount due and payable to
the Issuing Lender and the Administrative Agent in their capacities as such
pursuant to Section 10.07 hereof on the date of such distribution;

 
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Sixth:     To the Lenders, pro rata, in an amount equal to any amount due and
payable to the Lenders pursuant to Section 10.07 hereof on the date of such
distribution; and
 
Seventh:   To the Issuing Lender (for its own account), the Administrative Agent
(for its own account) and the Lenders, pro rata, for any other Obligations not
described above due and payable hereunder to such Persons on the date of such
distribution.
 

 
[End of Article II]
 

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ARTICLE III
LETTER OF CREDIT FACILITY
 
SECTION 3.01     L/C Commitment.
 
(a)   Subject to the terms and conditions of this Agreement, the Issuing Lender,
in reliance on the agreements of the other Lenders set forth in Section 3.04(a),
agrees to issue letters of credit (“Letters of Credit”) for the account of the
Borrower or the Borrower’s Subsidiaries on any Business Day from the Closing
Date to, but not including, the date that is ninety (90) days prior to the
Termination Date in such form as may be approved from time to time by the
Issuing Lender; provided, that the Issuing Lender shall have no obligation to
issue any Letter of Credit if, after giving effect to such issuance, the
aggregate principal amount of outstanding Extensions of Credit would exceed the
Commitments. The Existing Letters of Credit shall be deemed to have been issued
pursuant hereto, and from and after the Closing Date shall be subject to, and
governed by, the terms and conditions hereof.
 
(b)   Each Letter of Credit shall (i) be denominated in Dollars in a minimum
amount of $100,000, (ii) be a letter of credit issued to support obligations of
the Borrower or any of its Subsidiaries, contingent or otherwise, incurred in
the ordinary course of business, (iii) (A) expire on a date not later than five
(5) Business Days prior to the Termination Date, (B) have a term not exceeding
two years, (C) and otherwise reasonably satisfactory to the Issuing Lender, and
(iv) be subject to the Uniform Customs and/or ISP 98, as set forth in the
Application or as determined by the Issuing Lender and, to the extent not
inconsistent therewith, the laws of the State of New York. The Issuing Lender
shall not at any time be obligated to issue any Letter of Credit hereunder if
such issuance would conflict with, or cause the Issuing Lender or any L/C
Participant to exceed any limits imposed by, any Applicable Law. References
herein to “issue” and derivations thereof with respect to Letters of Credit
shall also include extensions or modifications of any existing Letters of
Credit, unless the context otherwise requires.
 
SECTION 3.02     Procedure for Issuance of Letters of Credit. 
 
The Borrower may from time to time request that the Issuing Lender issue a
Letter of Credit by delivering to the Issuing Lender at the Administrative
Agent’s Office an Application therefor, completed to the reasonable satisfaction
of the Issuing Lender, and such other certificates, documents and other papers
and information as the Issuing Lender may reasonably request. Upon receipt of
any Application, the Issuing Lender shall process such Application and the
certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and shall,
subject to Section 3.01 and Article IV, promptly issue the Letter of Credit
requested thereby (but in no event shall the Issuing Lender be required to issue
any Letter of Credit earlier than two (2) Business Days after its receipt of the
Application therefor and all such other certificates, documents and other papers
and information relating thereto) by issuing the original of such Letter of
Credit to the beneficiary thereof or as otherwise may be agreed by the Issuing
Lender and the Borrower. The Issuing Lender shall promptly furnish to the
Borrower a copy of such Letter of Credit and promptly notify each Lender of the
issuance and upon request by any Lender, furnish to such Lender a copy of such
Letter of Credit and the amount of such Lender’s L/C Participation therein.
 
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SECTION 3.03     Commissions and Other Charges.
 
(a)  The Borrower shall pay to the Administrative Agent, for the account of the
Issuing Lender and the L/C Participants, a letter of credit commission with
respect to each Letter of Credit (other than Bond L/Cs) in an amount equal to
the product of (i) the average daily maximum amount available to be drawn during
the relevant quarter under such Letter of Credit and (ii) the Applicable LIBOR
Margin (determined on a per annum basis). Such commission shall be payable
quarterly in arrears on the last Business Day of each calendar quarter and on
the Termination Date commencing on the last Business Day of the calendar quarter
in which such Letter of Credit is issued. The Administrative Agent shall,
promptly following its receipt thereof, distribute to the Issuing Lender and the
L/C Participants all commissions received pursuant to this Section 3.03(a) in
accordance with their respective Commitment Percentages.
 
(b)   In addition to the foregoing commission, the Borrower shall pay to the
Administrative Agent, for the account of the Issuing Lender, a fronting fee with
respect to each Letter of Credit issued on or after the Closing Date in an
amount equal to the product of (i) the face amount of such Letter of Credit and
(ii) 10 basis points (0.100%) (the “Fronting Fee”). Such Fronting Fee shall be
payable in arrears on the last Business Day of each calendar quarter and on the
Termination Date for each day such Letter of Credit is issued and outstanding.
 
(c)   In addition to the foregoing fees and commissions, the Borrower shall pay
or reimburse the Issuing Lender for such normal and customary costs and expenses
as are incurred or charged by the Issuing Lender in issuing, effecting payment
under, transferring, amending or otherwise administering any Letter of Credit,
including, without limitation, an amount equal to $100 per draw with respect to
any Bond L/C.
 
SECTION 3.04     L/C Participations.
 
(a)   The Issuing Lender irrevocably agrees to grant and hereby grants to each
L/C Participant, and, to induce the Issuing Lender to issue Letters of Credit
hereunder, each L/C Participant irrevocably agrees to accept and purchase and
hereby accepts and purchases from the Issuing Lender, on the terms and
conditions hereinafter stated, for such L/C Participant’s own account and risk
an undivided interest equal to such L/C Participant’s Commitment Percentage in
the Issuing Lender’s obligations and rights under and in respect of each Letter
of Credit issued (or deemed issued) hereunder and the amount of each draft paid
by the Issuing Lender thereunder. Each L/C Participant unconditionally and
irrevocably agrees with the Issuing Lender that, if a draft is paid under any
Letter of Credit for which the Issuing Lender is not reimbursed in full by the
Borrower through a Revolving Loan or otherwise in accordance with the terms of
this Agreement, such L/C Participant shall pay to the Issuing Lender upon demand
at the Issuing Lender’s address for notices specified herein an amount equal to
such L/C Participant’s Commitment Percentage multiplied by the amount of such
draft, or any part thereof, which is not so reimbursed.
 

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(b)   Upon becoming aware of any amount required to be paid by any L/C
Participant to the Issuing Lender pursuant to Section 3.04(a) in respect of any
unreimbursed portion of any payment made by the Issuing Lender under any Letter
of Credit, the Issuing Lender shall notify each L/C Participant of the amount
and due date of such required payment and such L/C Participant shall pay to the
Issuing Lender the amount specified on the applicable due date. If any such
amount is paid to the Issuing Lender after the date such payment is due, such
L/C Participant shall pay to the Issuing Lender on demand, in addition to such
amount, the product of (i) such amount, times (ii) the daily average Federal
Funds Rate (or Base Rate, if such amount is not paid within three Business Days
of demand) as determined by the Administrative Agent during the period from and
including the date such payment is due to the date on which such payment is
immediately available to the Issuing Lender, times (iii) a fraction the
numerator of which is the number of days that elapse during such period and the
denominator of which is 360. A certificate of the Issuing Lender with respect to
any amounts owing under this Section 3.04(b) shall be conclusive in the absence
of manifest error. With respect to payment to the Issuing Lender of the
unreimbursed amounts described in this Section 3.04(b), if the L/C Participants
receive notice that any such payment is due (A) prior to 1:00 p.m. (Charlotte,
North Carolina time) on any Business Day, such payment shall be due that
Business Day, and (B) after 1:00 p.m. (Charlotte, North Carolina time) on any
Business Day, such payment shall be due on the following Business Day.
 
(c)   Whenever, at any time after the Issuing Lender has made payment under any
Letter of Credit and has received from any L/C Participant its Commitment
Percentage of such payment in accordance with this Section 3.04, the Issuing
Lender receives any payment related to such Letter of Credit (whether directly
from the Borrower or otherwise) including, without limitation, payments made
pursuant to Section 3.03, or any payment of interest on account thereof, the
Issuing Lender will distribute to such L/C Participant its pro rata share
thereof; provided, that in the event that any such payment received by the
Issuing Lender shall be required to be returned by the Issuing Lender, such L/C
Participant shall return to the Issuing Lender the portion thereof previously
distributed by the Issuing Lender to it.
 
SECTION 3.05     Reimbursement Obligation of the Borrower. 
 
(a)    Letters of Credit.
 
(i)    Except as otherwise provided in Section 3.05(b), in the event of any
drawing under any Letter of Credit, the Borrower agrees to reimburse (either
with the proceeds of a Revolving Loan as provided for in this Section 3.05(a) or
with funds from other sources), in same day funds, the Issuing Lender on each
date on which the Issuing Lender notifies the Borrower of the date and amount of
a draft paid under any such Letter of Credit for the amount of (x) such draft so
paid and (y) any amounts referred to in Section 3.03(c) incurred by the Issuing
Lender in connection with such payment.
 
          (ii)    Except as otherwise provided in Section 3.05(b), unless the
Borrower shall immediately notify the Issuing Lender that the Borrower intends
to reimburse the Issuing Lender for any such drawing under any Letter of Credit
from other sources or funds, the Borrower shall be deemed to have timely given a
Notice of Borrowing to the

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Administrative Agent requesting that the Lenders make a Revolving Loan bearing
interest at the Base Rate on such date in the amount of (x) such draft so paid
and (y) any amounts referred to in Section 3.03(c) incurred by the Issuing
Lender in connection with such payment, and the Lenders shall make a Revolving
Loan bearing interest at the Base Rate in such amount, and, notwithstanding
anything in this Agreement to the contrary, the proceeds of which shall be
applied to reimburse the Issuing Lender for the amount of the related drawing
and costs and expenses. If the Borrower has elected to pay the amount of any
such drawing from other sources or funds and shall fail to reimburse the Issuing
Lender as provided in this Section 3.05(a), the unreimbursed amount of such
drawing shall bear interest at the rate which would be payable on any
outstanding Base Rate Loans which were then overdue from the date such amounts
become payable (whether at stated maturity, by acceleration or otherwise) until
payment in full.
 
(b)   Bond L/Cs.
 
(i)   If the Issuing Lender shall make any payment under a Bond L/C in response
to a Term Drawing and, on the date of such payment, the conditions precedent set
forth in Section 4.03 shall have been fulfilled, then, unless the Borrower shall
immediately notify the Issuing Lender that the Borrower intends to reimburse the
Issuing Lender for any such drawing under such Bond L/C from other sources or
funds, the Borrower shall be deemed to have timely given a Notice of Borrowing
to the Administrative Agent requesting that the Lenders make a Revolving Loan to
the Borrower equal to the principal amount of the Bonds purchased with the
proceeds of such Term Drawing (each such Revolving Loan being a “Tender Advance
Revolving Loan”). Each Tender Advance Revolving Loan shall bear interest,
initially at the Base Rate and shall be deemed to be a Base Rate Loan, and
thereafter at the Base Rate or the LIBOR Rate, as selected by the Borrower in
accordance with Section 2.13. Notwithstanding anything to the contrary set forth
in this Agreement, principal of each Tender Advance Revolving Loan, together
with all accrued interest thereon, shall be due and payable on the earliest to
occur of (i) the Termination Date, (ii) the date on which the applicable Pledged
Bonds are redeemed or cancelled, (iii) the date on which the applicable Pledged
Bonds are remarketed and (iv) the date on which the applicable Letter of Credit
is replaced by a substitute letter of credit. To the extent that the
Administrative Agent receives interest payable on account of any Pledged Bonds
such interest received shall be applied and credited first against accrued and
unpaid interest on the Tender Advance Revolving Loan that financed the Term
Drawing in respect of which such Pledged Bonds were purchased.
 
(c)   Each Lender acknowledges and agrees that its obligation to fund a
Revolving Loan, including any Tender Advance Revolving Loan, in accordance with
this Section 3.05 and to reimburse the Issuing Lender for any draft paid under a
Letter of Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including, without limitation, the existence of a
Default or an Event of Default other than a Default or Event of Default that the
Issuing Lender had actual knowledge of at the time of the issuance of such
Letter of Credit.
 
SECTION 3.06     Obligations Absolute.  
 
     The Borrower’s obligations under this Article III (including, without
limitation, the Obligations) shall be absolute and unconditional under any and
all circumstances and

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irrespective of any set-off, counterclaim or defense to payment which the
Borrower may have or have had against the Issuing Lender or any beneficiary of a
Letter of Credit or any other Person. The Borrower also agrees that the Issuing
Lender and the L/C Participants shall not be responsible for, and the Borrower’s
reimbursement obligation under Section 3.05 shall not be affected by, among
other things, the validity or genuineness of documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged, or any dispute between or among the Borrower and any
beneficiary of any Letter of Credit or any other party to which such Letter of
Credit may be transferred or any claims whatsoever of the Borrower against any
beneficiary of such Letter of Credit or any such transferee, except for such
matters caused by the Issuing Lender’s gross negligence or willful misconduct.
The Issuing Lender shall not be liable for any error, omission, interruption or
delay in transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions caused by the Issuing Lender’s gross negligence or willful misconduct.
The Borrower agrees that any action taken or omitted by the Issuing Lender under
or in connection with any Letter of Credit or the related drafts or documents,
if done in the absence of gross negligence or willful misconduct and in
accordance with the standards of care specified in ISP 98 or the Uniform
Customs, as the case may be, and, to the extent not inconsistent therewith, the
UCC, shall be binding on the Borrower and shall not result in any liability of
the Issuing Lender or Lenders.
 
 
[End of Article III]
 

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ARTICLE IV
CONDITIONS PRECEDENT
 
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
issue Letters of Credit and to make Loans 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, the
Issuing Lender and the Lenders;
 
      (b)   Secretary’s Certificate. Receipt by the Administrative Agent of (A)
a certificate of the secretary or assistant secretary of the Borrower, as
applicable, dated the Closing Date and certifying (1) 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, (2) that attached
thereto is a true and complete copy of the by-laws 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 (3) below, (3) 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, (4) 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 (5) 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 (B) 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 chief executive officer or chief financial officer of the
Borrower, as applicable, in form and substance 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, correct and complete; that the Borrower is
not in violation or aware of any event that would cause a Material Adverse
Change in 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; 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;

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      (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
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, would prohibit the extension of
Letters of Credit or could reasonably be expected to result in any such
prohibition or a Material Adverse Change on the Borrower, Marina, South Jersey
Gas Company 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 organization of
the Borrower and from all states in which the Borrower is required to obtain a
certificate of good standing or like certificate due to the nature of its
operations in such state;
 
      (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;
 
      (i)   Notice required by Section 4.02. Receipt by the Administrative Agent
of the notice required under Section 4.02;
 
      (j)   Note. If requested by any Lender, a Note, payable to the order of
such Lender, duly completed and executed by the Borrower;

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      (k)   Opinions. Opinions of Cozen O’Connor, counsel to the Borrower, in
substantially the form of Exhibit G 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, and, in connection with the issuance of
any Bond L/C, other opinions or comfort letters from bond counsel for the
applicable Bonds in such form as is reasonably acceptable to the Administrative
Agent;
 
      (l)   Existing Credit Facilities. Receipt by the Administrative Agent of
confirmation acceptable to the Administrative Agent that all Indebtedness under
the Existing Credit Facilities (except for the Existing Letters of Credit), has
been, or will be simultaneously, terminated and indefeasibly paid in full;
 
      (m)   Appointment of Remarketing Agent. With respect to the issuance of
each Bond L/C, evidence that the Remarketing Agent for the applicable Bonds
relating to such Bond L/C has acknowledged and accepted in writing its
appointment as Remarketing Agent with respect to such Bonds; and
 
      (n)   Other. Receipt by the Administrative Agent of all other opinions,
certificates and instruments in connection with the transactions contemplated by
this Agreement satisfactory in form and substance to the Required Lenders.
 
SECTION 4.02     Additional Conditions Precedent.  
 
    The obligation of the Lenders and the Issuing Lender to (i) make Loans and
issue Letters of Credit, including, without limitation, the making of any Loans,
the incurring of any L/C Obligations or the issuance of any Letters of Credit on
the Closing Date, (ii) Convert a Base Rate Loan into a LIBOR Rate Loan or from a
LIBOR Rate Loan into another LIBOR Rate Loan, (iii) issue the Letters of Credit
upon Application therefor, or (iv) extend the Stated Termination Date, shall be
subject to the further conditions precedent that on the date of such Conversion,
issuance or Extension of the Stated Termination Date, as the case may be:
 
      (a)   The Administrative Agent shall have received a Notice of Borrowing,
Application or Extension Letter, as the case may be, signed by duly authorized
officer of the Borrower, dated such date, stating that:
 
(i)   The representations and warranties of the Borrower contained in Section
5.01 of this Agreement are true and correct on and as of the date of the
issuance of such Letter of Credit or the making of such Loan or other Extension
of Credit, Conversion, or Extension of the Stated Termination Date, as
applicable, as though made, Converted, issued or extended, as applicable, on and
as of such date, both before and after giving effect to the issuance of such
Letter of Credit, Loan, Extension of Credit, Conversion, or Extension of the
Stated Termination Date, as applicable, and to the application of the proceeds
thereof; and
 
(ii)   Since December 31, 2005, there has been no Material Adverse Change,
provided, however, that this clause (ii) shall not be applicable to any issuance
of a Letter of Credit or making of a Loan or other Extension of Credit,
Conversion, or Extension of the Stated Termination Date occurring on a date
after the Closing Date; and
 

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(iii)   No event has occurred and is continuing, or would result from the
issuance of such Letter of Credit, the making of such Loan or other Extension of
Credit, Conversion, or Extension of the Stated Termination Date, as applicable,
or the application of the proceeds thereof, as the case may be, which
constitutes a Default or an Event of Default.
 
(b)   The Administrative Agent shall have received such other approvals,
opinions or documents as the Administrative Agent may reasonably request.
 
Unless the Borrower shall have previously advised the Administrative Agent in
writing that one or more of the statements contained in clauses (a)(i) through
(a)(iii) above are not true and correct, the Borrower shall be deemed to have
represented and warranted that, on the date of any Loan or other Extension of
Credit, Conversion, issuance of the Letter of Credit or Extension of the Stated
Termination Date, as applicable, the above statements are true.
 
SECTION 4.03     Conditions Precedent to Each Tender Advance Revolving Loan.
 
The obligation of the Lenders to make each Tender Advance Revolving Loan shall
be subject to the condition precedent that, on the date of the related Term
Drawing, the following statements shall be true:
 
(a)   The representations and warranties contained in Section 5.01 of this
Agreement are true and correct on and as of the date of such Tender Advance
Revolving Loan as though made on and as of such date, both before and after
giving effect to such Tender Advance Revolving Loan and to the application of
the proceeds thereof;
 
(b)   The Bonds to be purchased with the proceeds of the applicable Term Drawing
relating to such Tender Advance Revolving Loan shall simultaneously be pledged
in accordance with the applicable Indenture and Pledge Agreement and Article
VIII hereof; and
 
(c)   No event has occurred and is continuing, or would result from such Tender
Advance Revolving Loan or the application of the proceeds thereof, which
constitutes a Default or an Event of Default.
 
    Unless the Borrower shall have previously advised the Lenders in writing
that one or more of the statements contained in clauses (a) and (c) above is no
longer true the Obligors shall be deemed to have represented and warranted, on
the date of any Tender Advance Revolving Loan made by the Banks hereunder, that
on such date the above statements are true.
 
SECTION 4.04     Reliance on Certificates. 
 
    Each of the Lenders, the Issuing Lender and the Administrative Agent shall
be entitled to rely conclusively upon the certificates delivered from time to
time by officers of the Borrower as to the names, incumbency, authority and
signatures of the respective Persons named therein until such time as the
Administrative Agent may receive a replacement
 
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certificate, in form acceptable to the Administrative Agent, from an officer of
the Borrower identified to the Administrative Agent as having authority to
deliver such certificate, setting forth the names and true signatures of the
officers and other representatives of the Borrower thereafter authorized to act
on its behalf.
 
[End of Article IV]

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ARTICLE V
REPRESENTATIONS AND WARRANTIES
 
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 Change. 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 and each
Related Document to which it is a party are within the Borrower’s or
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 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 or Related Document.
 
(c)   No Governmental Action is required for the execution or delivery by the
Borrower or its Subsidiaires of this Agreement, any other Loan Document or any
Related 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 or any Related 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 and Related 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.
 

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(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 Change.
 
(f)   The audited consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries, as at December 31, 2005, 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, and the unaudited
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as
at June 30, 2006, and the related consolidated statements of income, retained
earnings and cash flows of the Borrower and its Consolidated Subsidiaries for
the six (6) months 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, subject, solely in the case of unaudited
consolidated balance sheets, to normal year end adjustments. Since December 31,
2005, there has been no Material Adverse Change, or material adverse change in
the facts and information regarding such entities as represented to the Closing
Date.
 
(g)  The issuance of, and the existence of, the Letters of Credit, the making of
Loans and the other Extensions of Credit 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 drawing on the Letters of Credit, any Loan or
any other Extension of Credit 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)   No ERISA Event has occurred or is reasonably expected to occur with
respect to any Plan which reasonably could be expected to result in a Material
Adverse Change. Since the actuarial valuation date specified in the most recent
Schedule B (Actuarial Information) to the annual report of Plans maintained by
the Borrower (Form 5500 Series), if any, (i) there has been no Material Adverse
Change in the funding status of the Plans referred to therein and (ii) no
“prohibited transaction” has occurred with respect thereto. Neither the Borrower
nor any of its respective ERISA Affiliates has incurred nor reasonably expects
to incur any material withdrawal liability under ERISA to any Multiemployer
Plan.

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(l)   Except as set forth in the Disclosure Documents, the Borrower and its
Subsidiaries are in compliance 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 non-compliance with which would not
result in a Material Adverse Change (taking into consideration all fines,
penalties and sanctions that may be imposed because of such non-compliance) or
on the ability of the Borrower to perform its obligations under this Agreement
or any other Loan Document to which the Borrower is a party. Except as set forth
in the Disclosure Documents, neither the Borrower nor any of its respective
Subsidiaries has received from any Governmental Authority any notice of any
material violation of any such statute, rule, regulation, order or provision.
 
(m)   The Borrower and its Subsidiaries have filed all tax returns (Federal,
state and local) required to be filed and paid all taxes shown thereon to be
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.
 
(n)   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
therefore, where such default could reasonably be expected to result in a
Material Adverse Change.
 
(o)   As of the Closing Date, the Borrower and each of its Subsidiaries will be
Solvent.
 
(p)   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 are 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.
 
(q)   The Borrower and each Subsidiary of the Borrower has good and marketable
title to all assets and other property purported to be owned by it.
 
(r)   None of the properties or assets of the Borrower is subject to any Lien,
except Permitted Liens.
 
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(s)   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 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.
 
(t)   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.
 
(u)   All Bonds have been duly authorized, authenticated, issued and delivered
and are the legal, valid and binding obligations of the issuer of such Bonds,
and are not in default.
 
(v)   The Borrower is not listed on the specially Designated Nationals and
Blocked Persons List maintained by the Office of Foreign Asset Control,
Department of the Treasury (“OFAC”) pursuant to Executive Order No. 13224, 66
Fed. Reg. 49079 (Sept. 25, 2001), and/or any other list maintained pursuant to
any of the rules and regulations of OFAC or pursuant to any other applicable
Executive Orders or otherwise subject to sanction under an OFAC implemented
regulation.
 

 
[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 and the Commitments terminated, 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 Change.
 
(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 Change.
 
(c)   Ownership. Cause the Borrower to own, at all times, 100% of the Capital
Stock having voting rights of Marina and 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 Change, 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 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.
 
(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

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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 the following purposes: (i) on the Closing Date, the
repayment in full of all loans or reimbursement obligations under the Existing
Credit Facilities; and (ii) on and after the Closing Date, general corporate
purposes, including, with out limitation, issuance of Letters of Credit to
support certain taxable and tax-exempt bonds, and working capital needs of the
Borrower, its Subsidiaries or, in the case of Bond L/Cs, Subsidiaries of the
Borrower.
 
(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)   Redemption or Defeasance of Bonds. Use its best efforts to cause the
applicable Bond L/C to be surrendered for cancellation to the Issuing Lender
upon redemption or defeasance of all of the applicable Bonds for which such Bond
L/C was issued.
 
(l)   Registration of Bonds. Cause all Bonds which it acquires, or which it has
had acquired for its account, to be registered forthwith in accordance with the
applicable Indenture and Pledge Agreement and Article VIII hereof.
 
(m)   OFAC Compliance. Comply with any obligations that it may have under the
USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001),
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.

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(n)   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 Change.
 
SECTION 6.02     Negative Covenants. 
 
Until all of the Obligations have been finally and indefeasibly paid and
satisfied in full and the Commitments terminated, 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.
 
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(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 which is not substantially 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)   Compliance with ERISA. (i) Permit to exist any “accumulated funding
deficiency” (as defined in Section 412(a) of the Code), unless such deficiency
exists with respect to a Multiple Employer Plan or Multiemployer Plan and the
Borrower has no control over the reduction or elimination of such deficiency,
(ii) terminate, or permit any ERISA Affiliate to terminate, any Plan of the
Borrower or such ERISA Affiliate so as to result in any material liability of
the Borrower or ERISA Affiliate to the PBGC, or (iii) permit to exist any
occurrence of any reportable event (within the meaning of Section 4043 of
ERISA), or any other event or condition, which presents a material risk of a
termination by the PBGC of any Plan of the Borrower or such ERISA Affiliate and
such a material liability of the Borrower or ERISA Affiliate to the PBGC.
 
(j)   Constituent Documents, Etc. Change in any material respect the nature of
its certificate of incorporation, by-laws, or other similar documents, or
accounting policies or accounting practices (except as required or permitted by
the Financial Accounting Standards Board or GAAP).
 
(k)   Fiscal Year. Change its Fiscal Year.
 
(l)   Certain Tax Matters. Invest, or cause the investment of, the proceeds of
any Bonds supported by a Bond L/C in any way that would violate the Code or
cause such Bonds to be “arbitrage bonds” or knowingly take any action or omit to
take any action if such action or omission would adversely affect the exclusion
of interest on such Bonds from the gross income of the holders thereof for
federal income tax purposes.
 
SECTION 6.03     Reporting Requirements.
 
    So long as any Lender shall have any Commitment 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:
 
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(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 I, of the chief financial
officer or the treasurer of the Borrower (A) demonstrating and certifying
compliance by the Borrower with the covenants set forth in Section 6.04 and (B)
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 I, of the chief financial officer or the
treasurer of the Borrower (A) demonstrating and certifying compliance by the
Borrower with the covenants set forth in Section 6.04 and (B) 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)   as soon as possible and in any event within five (5) days after receipt
thereof by the Borrower or any of its ERISA Affiliates from the PBGC copies of
each notice received by the Borrower or such ERISA Affiliate of the PBGC’s
intention to terminate any Plan of the Borrower or such ERISA Affiliate or to
have a trustee appointed to administer any such Plan;
 
(e)   as soon as possible and in any event within five (5) days after receipt
thereof by the Borrower or any ERISA Affiliate from a Multiemployer Plan
sponsor, a copy of each notice received by the Borrower or such ERISA Affiliate
concerning the imposition of withdrawal liability in the amount of at least
$1,000,000 pursuant to Section 4202 of ERISA in respect of which the Borrower or
such ERISA Affiliate is reasonably expected to be liable;
 
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(f)   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 (A) of the type described in Section 5.01(e) or (B)
for which the Administrative Agent or the Lenders will be entitled to indemnity
under Section 10.05;
 
(g)   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;
 
(h)   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;
 
(i)   from time to time and promptly upon each request, information with respect
to the Borrower as a Lender may request in order to comply with the USA Patriot
Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001); and
 
(j)   as soon as possible and in any event within fifteen (15) days after the
occurrence of each ERISA Event, a statement of the chief financial officer of
the Borrower setting forth details of such ERISA Event and the action which the
Borrower has taken and proposes to take with respect thereto.
 
    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.

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SECTION 6.04     Financial Covenants.
 
    So long as any Lender shall have any Commitment 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, maintain at the end of each fiscal quarter a ratio of
Indebtedness to Consolidated Total Capitalization of the Borrower and its
Consolidated Subsidiaries of not more than 0.65 to 1.0.
 

 
[End of Article VI]

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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 any Related Document or by or
on behalf of the Borrower or any Subsidiary (or any of their officers) in
connection with this Agreement, any Loan Document or any Related Document shall
prove to have been incorrect in any material respect when made or deemed made;
or
 
(c)   The Borrower shall fail 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 (l), Section 6.03 or Section
6.04, or (ii) the Borrower shall fail 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 $15,000,000, 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

 
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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 $15,000,000
(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 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 or any Related 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)   Any ERISA Event shall have occurred with respect to a Plan and, thirty
(30) days after notice thereof shall have been given to the Borrower by the
Administrative Agent or any Lender, (i) such ERISA Event shall still exist and
(ii) such ERISA Event is reasonably likely to result in a liability or lien in
excess of $15,000,000 against the Borrower or any ERISA Affiliate; or
 
(i)   The Borrower or any Affiliate thereof as employer under a Multiemployer
Plan shall have made a complete or partial withdrawal from such Multiemployer
Plan and the plan sponsor of such Multiemployer Plan shall have notified such
withdrawing employer that such employer has incurred a withdrawal liability in
an annual amount exceeding $5,000,000; or
 
(j)   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
 
(k)   An “Event of Default” or “Default” under the SJG Credit Agreement; or
 
(l)   Any “Event of Default” under and as defined in any applicable Indenture or
Related Document.
 
(m)   A Change in Control shall occur.

 
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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:
 
(a)   Acceleration; Termination of Credit Facility. (i) Declare the principal of
and interest on the L/C Obligations, 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 (including, without limitation, all L/C Obligations,
whether or not the beneficiaries of the then outstanding Letters of Credit shall
have presented the documents required thereunder), 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,
(ii) terminate the Commitment and any right of the Borrower to request Letters
of Credit, Loans or other Extensions of Credit thereunder; provided, that upon
the occurrence of an Event of Default specified in Section 7.01(e), the
Commitments shall be automatically terminated and 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, (iii) by notice to the Borrower,
declare the obligation of the Issuing Bank to amend or extend any Bond L/Cs to
be terminated, whereupon the same shall forthwith terminate, (iv) give notice
(or, in the case of the Administrative Agent, cause the Issuing Lender to give
notice) to the applicable Trustee for each series of Bonds then outstanding (A)
directing a mandatory purchase of the Bonds as provided in the applicable
sections of the applicable Indenture, (B) that the interest component of the
Bond L/Cs will not be reinstated, and/or (C) as provided in the applicable
Indenture to declare the principal of all related Bonds then outstanding to be
immediately due and payable.
 
(b)   Letters of Credit. With respect to all Letters of Credit with respect to
which presentment for honor shall not have occurred at the time of an
acceleration pursuant to Section 7.02(a), require the Borrower at such time to
deposit in a cash collateral account with the Administrative Agent an amount
equal to the aggregate then undrawn and unexpired amount of such Letters of
Credit. Amounts held in such cash collateral account shall be applied by the
Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay the
other Obligations. After all such Letters of Credit shall have expired or been
fully drawn upon, and all Obligations shall have been paid in full, the balance,
if any, in such cash collateral account shall be returned to the Borrower.
 
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

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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 Default.
 
 
[End of Article VII]
 

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ARTICLE VIII
PLEDGED BONDS
 
SECTION 8.01     Pledge. 
 
    The Borrower hereby pledges, assigns, hypothecates and transfers to the
Administrative Agent for the benefit of the Lenders all of the Borrower's right,
title and interest in and to all Tendered Bonds as delivered from time to time
by the holders thereof which were not remarketed on the applicable date the
Tendered Bonds were tendered by the holders thereof and for which a Term Drawing
was made by the Issuing Lender (the “Pledged Bonds”), and hereby grants to the
Administrative Agent for the benefit of the Lenders a first lien on, and
security interest in, its right, title and interest in and to each of the
Pledged Bonds, the interest thereon and all proceeds thereof, as collateral
security for the prompt and complete payment when due from time to time by the
Borrower (by acceleration, at stated maturity or otherwise) of all obligations
to the Administrative Agent, the Issuing Lender and the Lenders hereunder. The
Borrower hereby authorizes the Tender Agent for such Pledged Bonds to deliver or
cause to be delivered to the Administrative Agent or its designated agent, and
registered in the name of the Tender Agent, or such other Person as the
Administrative Agent shall elect, as pledgee, all Pledged Bonds. The Pledged
Bonds shall upon payment of the related Tender Advance Revolving Loan in
accordance with this Agreement be released and delivered to the Tender Agent as
provided in the applicable Indenture, Pledge Agreement and Tender Agency
Agreement and the Administrative Agent shall take all actions necessary to
effectuate such release and delivery. The Pledged Bonds and the proceeds thereof
shall serve as security for the payment and performance when due of all Tender
Advance Revolving Loans made with respect to such Pledged Bonds. The Borrower
shall deliver, or cause to be delivered, the Pledged Bonds to the Tender Agent
or to another pledge agent designated by the Administrative Agent immediately
upon receipt thereof or, in the case of Pledged Bonds held under a book-entry
system administered by The Depository Trust Company, New York, New York (or any
other clearing corporation), the Borrower shall cause the Pledged Bonds to be
reflected on the records of the Depository Trust Company (or such other clearing
corporation) as a position held by the Administrative Agent (or a pledge agent
acceptable to the Administrative Agent) as a Depository Trust Company
participant (or a participant in such other clearing corporation) and the
Administrative Agent (or its pledge agent) shall reflect on its records that the
Pledged Bonds are owned beneficially by the Borrower subject to the pledge in
favor of the Administrative Agent.
 
SECTION 8.02     Interest on the Bonds. 
 
    If, while the Administrative Agent or its designated agent holds Pledged
Bonds, the Borrower shall receive any interest payment in respect of such
Pledged Bonds, the Borrower agrees to accept the same as agent for the
Administrative Agent and to hold the same in trust on behalf of the
Administrative Agent and to deliver the same forthwith to the Administrative
Agent. All sums of money so paid in respect of such Pledged Bonds that received
by the Borrower and paid to the Administrative Agent, or that shall be received
directly by the Administrative Agent (or its designated agent), shall be
credited as provided in Section 3.05(b)(i).
 
SECTION 8.03     Rights with respect to Pledged Bonds. 
 
    The Administrative Agent shall not be liable for failure to realize upon the
Pledged Bonds or any collateral security or guarantee therefor, or any part
thereof, or for any delay in

 
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so doing, nor shall it be under any obligation to take any action whatsoever
with regard thereto. If an “Event of Default” has occurred and is continuing
under the Indenture under which the Pledged Bonds were issued, the
Administrative Agent may (or shall at the request of the Required Lenders)
thereafter without notice exercise all rights, privileges or options pertaining
to any Pledged Bonds as if it were the absolute owner thereof, upon such terms
and conditions as it may determine, all without liability except to account to
the Borrower for property actually received by it. In addition to the rights and
remedies granted to it in this Agreement and in any other instrument or
agreement securing, evidencing or relating to any of the reimbursement
obligations hereunder, the Administrative Agent or its designated agent shall be
entitled to exercise all the rights and remedies of a secured party under the
Uniform Commercial Code of the State of New York. The Borrower shall be liable
for the deficiency if the proceeds of any sale or other disposition of the
Pledged Bonds and collateral security granted to the Administrative Agent in
connection herewith are insufficient to pay all Tender Advance Revolving Loans
and amounts related thereto with respect to such Pledged Bonds and to which the
Administrative Agent, the Issuing Lender and the Lenders are entitled, and for
the reasonable fees of any attorneys employed by the Administrative Agent to
collect such deficiency. The Administrative Agent shall have no duty to exercise
any of the aforesaid rights, privileges or options and shall not be responsible
for any failure to do so or delay in so doing.
 
SECTION 8.04     No Disposition of Pledged Bonds by Borrower. 
 
    Except as contemplated herein, without the prior written consent of the
Administrative Agent, the Borrower agrees that it will not sell, assign,
transfer, exchange, or otherwise dispose of, or grant any option with respect
to, the Pledged Bonds, nor will it create, incur or permit to exist any pledge,
lien, mortgage, hypothecation, security interest, charge, option or any other
encumbrance with respect to any of the Pledged Bonds, or any interest therein,
or any proceeds thereof, except for the lien and security interest provided for
by this Agreement and the Indenture under which the Pledged Bonds were issued.
 
SECTION 8.05     Disposition of Pledged Bonds by Administrative Agent. 
 
    The Borrower further agrees to do or cause to be done all such other
reasonable acts and things as may be necessary to make any disposition or sale
of any portion or all of the Pledged Bonds by the Administrative Agent permitted
by this Agreement valid and binding and in compliance with applicable law, all
at the Borrower’s expense.
 
SECTION 8.06     Valid Perfected First Lien. 
 
    The Borrower covenants that the pledge, assignment and delivery of the
Pledged Bonds under this Agreement will create a valid, perfected, first
priority security interest in all right, title or interest of the Borrower in or
to such Pledged Bonds and the proceeds thereof, subject to no prior pledge,
lien, mortgage, hypothecation, security interest, charge, option or encumbrance
or to any agreement purporting to grant to any third party a security interest
in the property or assets of the Borrower which would include the Pledged Bonds
and the proceeds thereof. The Borrower covenants and agrees that it will defend
the Administrative Agent’s right, title and security interest in and to the
Pledged Bonds and the proceeds thereof against the claims and demands of all
persons whomsoever.

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SECTION 8.07     Release of Pledged Bonds. 
 
    Pledged Bonds, or such portion thereof, shall be released from the security
interest created under this Agreement to the extent of and upon satisfaction in
accordance with this Agreement of the Tender Advance Revolving Loans and amounts
related thereto with respect to such Pledged Bonds.
 
 
[End of Article VIII]
 

 

 

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ARTICLE IX
THE ADMINISTRATIVE AGENT

SECTION 9.01     Appointment. 
 
    Each Lender hereby irrevocably designates and appoints Wachovia as the
Administrative Agent of such Lender and the Issuing Lender under this Agreement,
the other Loan Documents and all Related Documents, and each such Lender and the
Issuing Lender irrevocably authorizes Wachovia, as the Administrative Agent for
such Lender and the Issuing Lender, to take such action on its behalf under the
provisions of this Agreement, the other Loan Documents and the Related Documents
and to exercise such powers and perform such duties as are expressly delegated
to the Administrative Agent by the terms of this Agreement, the other Loan
Documents and the Related Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Administrative Agent shall not have any duties
or responsibilities, except those expressly set forth herein, in the Loan
Documents and in the Related Documents, or any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement, any other Loan
Document or any Related Documents or otherwise exist against the Administrative
Agent.
 
SECTION 9.02     Delegation of Duties. 
 
    The Administrative Agent may execute any of its duties under this Agreement,
any Letter of Credit, the other Loan Documents or any Related Document by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
 
SECTION 9.03     Exculpatory Provisions. 
 
    Neither the Administrative Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be (i) liable for any
action lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement, any other Loan Document or any Related Document
(except in the case of gross negligence or willful misconduct as determined by a
court of competent jurisdiction) or (ii) responsible in any manner to any of the
Lenders for any recitals, statements, representations or warranties made by the
Borrower or any officer thereof contained in this Agreement, any other Loan
Document or any Related Document or in any certificate, report, statement or
other document referred to or provided for in, or received by the Administrative
Agent under or in connection with, this Agreement, any other Loan Document or
any Related Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or the Letters of Credit, any
other Loan Document or any Related Document or for any failure of the Borrower
or its Subsidiaries to perform its obligations hereunder or thereunder. The
Administrative Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the

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observance or performance of any of the agreements contained in, or conditions
of, this Agreement, any other Loan Document or any Related Document, or to
inspect the properties, books or records of the Borrower.
 
SECTION 9.04     Reliance by Administrative Agent. 
 
    The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Borrower), independent accountants and other experts
selected by the Administrative Agent. The Administrative Agent may deem and
treat the payee of any evidence of indebtedness in respect of any Extension of
Credit, or other indebtedness hereunder as the owner thereof for all purposes
unless a written notice of assignment, negotiation or transfer thereof shall
have been filed with the Administrative Agent. The Administrative Agent shall be
fully justified in failing or refusing to take any action under this Agreement,
any Letter of Credit, any Loan Document or any Related Document unless it shall
first receive such advice or concurrence of the Required Lenders (unless all of
the Lenders’ action is required hereunder) as it deems appropriate or it shall
first be indemnified to its satisfaction by the Lenders against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Administrative Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this
Agreement, the Loan Documents or any Related Document in accordance with a
request of the Required Lenders (unless all of the Lenders’ action is required
hereunder), and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders.
 
SECTION 9.05     Notice of Default. 
 
    The Administrative Agent shall not be deemed to have knowledge or notice of
the occurrence of any Event of Default hereunder unless the Administrative Agent
has received notice from a Lender or the Borrower referring to this Agreement,
describing such Event of Default and stating that such notice is a “notice of
default”. In the event that the Administrative Agent receives such a notice, the
Administrative Agent shall give notice thereof to the Lenders. The
Administrative Agent shall take such action with respect to such Event of
Default as shall be reasonably directed by the Required Lenders; provided, that
unless and until the Administrative Agent shall have received such directions,
the Administrative Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Event of Default as it
shall deem advisable in the best interests of the Issuing Lender and the
Lenders.
 
SECTION 9.06     Non-Reliance on Administrative Agent and Other Lenders. 
 
    Each Lender expressly acknowledges that neither the Administrative Agent nor
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates has made any representations or warranties to it and that no act by
the Administrative Agent hereinafter taken, including any review of the affairs
of the Borrower, shall be deemed to constitute any

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representation or warranty by the Administrative Agent to any Lender. Each
Lender represents to the Administrative Agent that it has, independently and
without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Borrower and made its
own decision to enter into this Agreement. Each Lender also represents that it
will, independently and without reliance upon the Administrative Agent or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement, the Loan
Documents and the Related Documents and to make such investigation as it deems
necessary to inform itself as to the business, operations, property, financial
and other condition and creditworthiness of the Borrower. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
the Administrative Agent hereunder, the Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, condition (financial
or otherwise), prospects or creditworthiness of the Borrower which may come into
the possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.
 
SECTION 9.07     Indemnification. 
 
    The Lenders agree to indemnify the Administrative Agent in its capacity as
such (to the extent not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so), ratably according to the respective
amounts of their Commitments, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the termination of the
Letters of Credit or Commitment) be imposed on, incurred by or asserted against
the Administrative Agent in any way relating to or arising out of this
Agreement, the Letters of Credit, any of the other Loan Documents or any of the
Related Documents, or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by the Administrative Agent under or in connection with any of the
foregoing; provided, that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the
Administrative Agent’s gross negligence or willful misconduct. The agreements in
this Section shall survive the termination of this Agreement, the Letters of
Credit, the Loans, the other Extensions of Credit and the payment of all amounts
payable hereunder.
 
SECTION 9.08     Administrative Agent in Its Individual Capacity. 
 
    The Administrative Agent and its affiliates may make loans to, accept
deposits from and generally engage in any kind of business with, the Borrower as
though the Administrative Agent was not the Administrative Agent hereunder. With
respect to its interest in the L/C Obligations, the Loans, the other Extensions
of Credit and any other amounts 

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owed to it hereunder, the Administrative Agent shall have the same rights and
powers under this Agreement as any Lender and may exercise the same as though it
were not the Administrative Agent, and the terms “Lender” and “Lenders” shall
include the Administrative Agent in its individual capacity.
 
SECTION 9.09       Successor Administrative Agent. 
 
    The Administrative Agent may resign as Administrative Agent upon ten (10)
days’ notice to the Lenders and the Borrower. If the Administrative Agent shall
resign as Administrative Agent under this Agreement, then the Required Lenders,
with the consent of the Borrower, shall appoint from among the Lenders a
successor agent for the Lenders, whereupon such successor agent shall succeed to
the rights, powers and duties of the Administrative Agent, and the term
“Administrative Agent” shall mean such successor agent effective upon its
appointment, and the former Administrative Agent’s rights, powers and duties as
Administrative Agent shall be terminated, without any other or further act or
deed on the part of such former Administrative Agent or any of the parties to
this Agreement. After any retiring Administrative Agent’s resignation as
Administrative Agent, the provisions of this Section shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was Administrative
Agent under this Agreement. In the event the Administrative Agent resigns
pursuant to this Section 9.09, the Administrative Agent shall also resign in its
capacity as Issuing Lender and Swingline Lender.
 
SECTION 9.10     Issuing Lender. 
 
    Each Lender hereby acknowledges that the provisions of this Article IX shall
apply to the Issuing Lender in its capacity as such; in the same manner, as such
provisions are expressly stated to apply to the Administrative Agent.
 
SECTION 9.11     Notices; Actions Under Loan Documents. 
 
    All notices received by the Issuing Lender pursuant to this Agreement, any
other Loan Document or any Related Document shall be promptly delivered by the
receiving party to the Administrative Agent, for distribution to the Lenders,
and any notices, reports or other documents received by the Administrative Agent
pursuant to this Agreement shall be promptly delivered to the Issuing Lender and
the Lenders. The Issuing Lender hereby agrees not to amend or waive any
provision or consent to the amendment or waiver of any Loan Document without the
consent of the Required Lenders (or, to the extent required pursuant to Section
10.01, all of the Lenders).
 
 
[End of Article IX]
 

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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, except
as otherwise provided in Section 2.18, no such waiver and no such amendment,
supplement or modification shall, without the written consent of all the Lenders
(a) extend the Stated Expiration Date, the Termination Date or the maturity of
any Loan or unreimbursed drawing, 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 or change the amount of any
Lender’s Commitment, 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(e) 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, (e) forgive principal,
interest, fees or other amounts payable hereunder, (f) release the Pledged Bonds
or any portion thereof except in accordance with the terms of Article VIII, or
(g) waive any requirement for the release of collateral.
 
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.
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

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The Administrative Agent or the Issuing Lender:

Wachovia Bank, National Association
301 South College Street
One Wachovia Center, NC-5562, TW-15
Charlotte, North Carolina 28288-0760
Attention: Lawrence P. Sullivan
Telecopy No.: (704) 383-6647
 
With a copy to:
 
Wachovia Bank, National Association
201 South College Street
Charlotte, North Carolina 28288-0680
Attention: Agency Services
Telecopy No.: (704) 383-0288
 
With a copy to:
 
Alston & Bird LLP
101 South Tryon Street
Suite 4000
Charlotte, North Carolina 28280-4000
Attention: Paul S. Donohue, Esq.
Telecopy No.: (704) 444-1111
 
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, the Issuing Lender 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.
 
SECTION 10.04     Set-off.
 
(a)   Upon the occurrence and during the continuance of any Event of Default,
the Administrative Agent and each Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set-off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at 

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any time owing by the Administrative Agent or such Lender 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, irrespective of whether
or not the Administrative Agent or such Lender shall have made any demand
hereunder and although such obligations may be contingent or unmatured.
 
(b)   If any Lender (a “Benefited Lender”) shall at any time receive any payment
of all or part of the L/C Obligations, Loans, other Extensions of Credit or
other obligations of the Borrower to it hereunder (such Lender’s “Borrower
Obligations”), or interest thereon, or receive any collateral in respect thereof
(whether voluntarily or involuntarily, by set-off, pursuant to events or
proceedings of the nature referred to in Section 7.01(e), or otherwise), in a
greater proportion than any such payment to or collateral received by any other
Lender, if any, in respect of such other Lender’s Borrower Obligations, or
interest thereon, such Benefited Lender shall purchase for cash from the other
Lenders such portion of each such other Lender’s Borrower Obligations, or shall
provide such other Lenders with the benefits of any such collateral, or the
proceeds thereof, as shall be necessary to cause such Benefited Lender to share
the excess payment or benefits of such collateral or proceeds ratably with each
of the Lenders; provided, that if all or any portion of such excess payment or
benefits is thereafter recovered from such Benefited Lender, such purchase shall
be rescinded, and the purchase price and benefits returned, to the extent of
such recovery, but without interest. The Borrower agrees that each Lender so
purchasing a portion of another Lender’s Borrower Obligations may exercise all
rights of payment (including, without limitation, rights of set-off) with
respect to such portion as fully as if such Lender were the direct holder of
such portion.
 
(c)   The Administrative Agent and each Lender agree promptly to notify the
Borrower after any such set-off and application referred to in subsection (a)
above; provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of the Administrative Agent
and each Lender under this Section 10.04 are in addition to other rights and
remedies (including, without limitation, other rights of set-off) which the
Administrative Agent and each Lender may have.
 
SECTION 10.05     Indemnification. 
 
    The Borrower hereby indemnifies and holds the Issuing Lender, the
Administrative Agent, the Swingline Lender and each Lender harmless from and
against any and all claims, damages, losses, liabilities, costs and expenses
which such party may incur or which may be claimed against such party by any
Person:
 
(a)   by reason of any inaccuracy or alleged inaccuracy in any material respect,
or any untrue statement or alleged untrue statement of any material fact, or by
reason of the omission or alleged omission to state therein a material fact
necessary to make such statements, in the light of the circumstances under which
they were made, not misleading, in each case relating to any of the Loan
Documents and Related Documents and the transactions contemplated thereby, the
Disclosure Documents or in any manner, whether direct or indirect, related to
this Agreement; or

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(b)   by reason of or in connection with the execution, delivery or performance
of this Agreement, the other Loan Documents or any Related Document, or any
transaction contemplated by this Agreement, the other Loan Documents or any
Related Document, other than as specified in subsection (c) below; or
 
(c)   by reason of or in connection with the execution and delivery or transfer
of, or payment or failure to make payment under this Agreement, the Letters of
Credit, any other Loan Document or any Related Document; provided, that the
Borrower shall not be required to indemnify any such party pursuant to this
Section 10.05(c) for any claims, damages, losses, liabilities, costs or expenses
to the extent caused by (i) the Issuing Lender’s willful misconduct or gross
negligence in determining whether documents presented under the Letters of
Credit comply with terms of the Letters of Credit or (ii) the Issuing Lender’s
willful or grossly negligent failure to make lawful payment under the Letters of
Credit after the presentation to it of a certificate strictly complying with the
terms and conditions of the Letters of Credit.
 
    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 and Article III and the termination of
the Commitment.
 
SECTION 10.06     Liability of the Lenders. 
 
    The Borrower assumes all risks of the acts or omissions of each beneficiary
or transferee of the Letters of Credit with respect to their use of the Letters
of Credit. None of the Issuing Lender, the Administrative Agent, the Lenders nor
any of their respective officers or directors shall be liable or responsible
for: (a) the use which may be made of the Letters of Credit or any acts or
omissions of each beneficiary or transferee in connection therewith; (b) the
validity, sufficiency or genuineness of documents, or of any endorsement
thereon, even if such documents should prove to be in any or all respects
invalid, insufficient, fraudulent or forged; (c) payment by the Issuing Lender
against presentation of documents which do not comply with the terms of the
Letters of Credit, including failure of any documents to bear any reference or
adequate reference to the Letters of Credit; or (d) any other circumstances
whatsoever in making or failing to make payment under the Letters of Credit,
except that the Borrower shall have a claim against the Issuing Lender and the
Issuing Lender shall be liable to the Borrower, to the extent of any direct, as
opposed to consequential, damages suffered by the Borrower which the Borrower
proves were caused by (i) the Issuing Lender’s willful misconduct or gross
negligence in determining whether documents presented under the Letters of
Credit are genuine or comply with the terms of the Letters of Credit or (ii) the
Issuing Lender’s willful or grossly negligent failure, as determined by a court
of competent jurisdiction, to make lawful payment under the Letters of Credit
after the presentation to it of a certificate strictly complying with the terms
and conditions of the Letters of Credit. In furtherance and not in limitation of
the foregoing, the Issuing Lender may accept original or facsimile (including
telecopy) certificates presented under the Letters of Credit that appear on
their face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary.

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SECTION 10.07     Costs, Expenses and Taxes.
 
(a)   The Borrower agrees to pay on demand all costs and expenses in connection
with the preparation, issuance, delivery, filing, recording, and administration
of this Agreement, the Letters of Credit, the Loans, the other Extensions of
Credit and any other documents which may be delivered in connection with this
Agreement, including, without limitation, the reasonable fees and out-of-pocket
expenses of counsel for the Administrative Agent and the Issuing Lender incurred
in connection with the preparation and negotiation of this Agreement, the
Letters of Credit, the Loans, the other Extensions of Credit and any document
delivered in connection therewith and all costs and expenses incurred by the
Administrative Agent (and, in the case of clause (iii) or (iv) below, any
Lender) (including reasonable fees and out of pocket expenses of counsel) in
connection with (i) the transfer, drawing upon, change in terms, maintenance,
renewal or cancellation of this Agreement, the Letters of Credit, the Loans and
the other Extensions of Credit, (ii) 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, any other Loan Document or
any Related Document, (iii) the enforcement of, or protection of rights under,
this Agreement, any other Loan Document or any Related Document (whether through
negotiations, legal proceedings or otherwise), (iv) any action or proceeding
relating to a court order, injunction, or other process or decree restraining or
seeking to restrain the Issuing Lender from paying any amount under the Letters
of Credit or (v) any waivers or consents or amendments to or in respect of this
Agreement, the Letters of Credit, the Loans or the other Extensions of Credit
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 Letters of
Credit, the Loans, the other Extensions of Credit or any of such other
documents, and agree to save the Issuing Lender, 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.
 
(b)   If any payment of principal of, or Conversion of, any LIBOR Rate Loan is
made other than on the last day of the Interest Period for such LIBOR Rate Loan,
as a result of a payment or Conversion pursuant to Section 7.02 or for any other
reason, the Borrower shall, upon demand by any Lender (with a copy of such
demand to the Administrative Agent), pay to the Administrative Agent for the
account of such Lender any amounts required to compensate such Lender for any
additional losses, costs or expenses which it may reasonably incur as a result
of such payment or Conversion, including, without limitation, any loss
(including loss of anticipated profits), cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by any
Lender to fund or maintain such LIBOR Rate Loan.
 
SECTION 10.08     Binding Effect. 
 
    This Agreement shall become effective when it shall have been executed and
delivered by the Borrower and the Issuing Lender, the Administrative Agent and
the Lenders and thereafter shall (a) be binding upon the Borrower, its
successors and assigns, and (b) inure to the benefit of and be enforceable by
the Lenders and each of their respective successors, assigns and permitted
transferees; provided, that the Borrower may not assign all or any part of its
rights or obligations under this Agreement without the prior written consent of
the Lenders.
 
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SECTION 10.09     Assignments and Participation.
 
(a)   Each Lender may assign to one or more Eligible Assignees all or a portion
of its rights and obligations under this Agreement and the Loan Documents
(including, without limitation, all or a portion of its Commitment and the
Extensions of Credit owing to it); provided, that (i) the Borrower (unless a
Default or an Event of Default shall have occurred and be continuing) shall have
consented to such assignment (such consent not to be unreasonably withheld or
delayed) by signing the Assignment and Acceptance referred to in clause (iii)
below, (ii) each such assignment shall be in a minimum amount of $5,000,000 (or,
if less, the entire amount of such Lender’s Commitment) and be of a constant,
and not a varying, percentage of all of the assigning Lender’s rights and
obligations under this Agreement and the Loan Documents and (iii) the parties to
each such assignment shall execute and deliver to the Administrative Agent, for
its acceptance and recording in the Register (as defined in Section 10.09(c)),
an Assignment and Acceptance, together with a processing and recordation fee of
$3,500, payable by the assigning Lender or the Eligible Assignee, as agreed upon
by such parties. Upon such execution, delivery, acceptance and recording, from
and after the effective date specified in each Assignment and Acceptance, (x)
the Eligible Assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder
and (y) the Lender assignor thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations under
this Agreement (and, in the case of an Assignment and Acceptance covering all or
the remaining portion of an assigning Lender’s rights and obligations under this
Agreement, such Lender shall cease to be a party hereto). Notwithstanding
anything to the contrary contained in this Agreement, any Lender may at any time
assign all or any portion of the Extensions of Credit owing to it to any
Affiliate of such Lender. No such assignment referred to in the preceding
sentence, other than to an Affiliate of such Lender consented to by the Borrower
(such consent not to be unreasonably withheld or delayed), shall release the
assigning Lender from its obligations hereunder. Nothing contained in this
Section 10.09 shall be construed to relieve the Issuing Lender of any of its
obligations under the Letters of Credit.
 
(b)   By executing and delivering an Assignment and Acceptance, the Lender
assignor thereunder and the Eligible Assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement, any other Loan Document or any Related Document or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement or any other Loan Document or any other instrument or document
furnished pursuant hereto; (ii) such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Borrower or the performance or observance by the Borrower of any of its
obligations under this Agreement, any other Loan Document or any Related
Document or any other instrument or document furnished pursuant hereto or
thereto; (iii) such Eligible Assignee confirms that it has received a copy of
this Agreement, together with copies of the financial statements referred to in
Section 5.01(f) and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such
 

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Eligible Assignee will, independently and without reliance upon the
Administrative Agent, such assigning Lender or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement; (v) such Eligible Assignee appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to it by the terms hereof,
together with such powers as are reasonably incidental thereto; and (vi) such
Eligible Assignee agrees that it will perform in accordance with their terms all
of the obligations which by the terms of this Agreement are required to be
performed by it as a Lender.
 
(c)   The Administrative Agent shall maintain at its address referred to in
Section 10.02 a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names and addresses of the
Lenders and the Commitment of, and principal amount of the Extensions of Credit
owing to, each Lender from time to time (the “Register”). The entries in the
Register shall be conclusive and binding for all purposes, absent manifest
error, and the Borrower, the Administrative Agent, the Issuing Lender and the
Lenders may treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by the Borrower or any Lender at any reasonable time and from
time to time upon reasonable prior notice.
 
(d)   Upon its receipt of an Assignment and Acceptance executed by an assigning
Lender and an Eligible Assignee, the Administrative Agent shall, if such
Assignment and Acceptance has been completed and is in substantially the form of
Exhibit H hereto, and has been signed by the Borrower (if the Borrower’s consent
is required), (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice of
such recordation to the Borrower.
 
(e)   Each Lender may sell participations to one or more banks, financial
institutions or other entities (a “Participant”) in all or a portion of its
rights and obligations under this Agreement and the Loan Documents (including,
without limitation, all or a portion of its Commitment and the Extensions of
Credit owing to it); provided, that (i) such Lender’s obligations under this
Agreement (including, without limitation, its Commitment to the Borrower
hereunder) 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 pursuant to
which any Lender may grant such a participating interest shall provide that such
Lender shall retain the sole right and responsibility to enforce the obligations
of the Borrower hereunder including, without limitation, the right to approve
any amendment, modification or waiver of any provision of this Agreement;
provided, that such participation agreement may provide that such Lender will
not agree to any modification, amendment or waiver of this Agreement which would
(a) waive, modify or eliminate any of the conditions precedent specified in
Article IV, (b) increase or extend the Commitments of the Lenders or subject the
Lenders to any additional obligations, (c) forgive principal, interest, fees or
other amounts payable hereunder or reduce the rate at which interest or any fee
is calculated, (d) postpone any date fixed for any payment of principal,
interest, fees or other amounts payable hereunder, (e) change the Commitment
Percentage or the number of Lenders which shall be required for the Lenders or
any of them to take any action hereunder, or (f) amend this Section 10.09(e).

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(f)   Any Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 10.09 and in
accordance with Section 10.16, disclose to the Eligible Assignee or Participant
or proposed Eligible Assignee or Participant, any Information relating to the
Borrower furnished to such Lender by or on behalf of the Borrower;
provided, that prior to any such disclosure, the Eligible Assignee or
Participant or proposed Eligible Assignee or Participant shall agree to preserve
the confidentiality of any confidential information relating to the Borrower
received by it from such Lender and use it only for purposes of this Agreement,
the Loan Documents, the Related Documents and the transactions contemplated
hereby and thereby, or for any other reason, directly or indirectly, relating to
this Agreement; provided, further, that the Eligible Assignee or Participant or
proposed Eligible Assignee or Participant may disclose any such information to
the extent such disclosure is required by law or requested by any regulatory
authority.
 
(g)   Anything in this Section 10.09 to the contrary notwithstanding, any Lender
may assign and pledge all or any portion of its Commitment and the Extensions of
Credit and other obligations owing to it to any Federal Reserve Lender (and its
transferees) as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any Operating Circular issued by
such Federal Reserve Lender. No such assignment shall release the assigning
Lender from its obligations hereunder.
 
(h)   If any Lender shall make any demand for payment under Section 2.15, then
within thirty (30) days after any such demand, the Borrower may, with the
approval of the Administrative Agent (which approval shall not be unreasonably
withheld) and provided, that no Event of Default or Default shall then have
occurred and be continuing, demand that such Lender assign in accordance with
this Section 10.09 to one or more Eligible Assignees designated by the Borrower
all (but not less than all) of such Lender’s Commitment and the Extensions of
Credit and other obligations owing to it within the period ending on such 30th
day. If any such Eligible Assignee designated by the Borrower shall fail to
consummate such assignment on terms reasonably acceptable to such Lender, or if
the Borrower shall fail to designate any such Eligible Assignees for all or part
of such Lender’s Commitment or Extensions of Credit, then such demand by the
Borrower shall become ineffective; it being understood for purposes of this
subsection (h) that such assignment shall be conclusively deemed to be on terms
reasonably acceptable to such Lender, and such Lender shall be compelled to
consummate such assignment to an Eligible Assignee designated by the Borrower,
if such Eligible Assignee (i) shall agree to such assignment by entering into an
Assignment and Acceptance in substantially the form of Exhibit H hereto with
such Lender and (ii) shall offer compensation to such Lender in an amount equal
to all amounts then owing by the Borrower to such Lender hereunder, whether for
principal, interest, fees, costs or expenses (other than the demanded payment
referred to above and payable by the Borrower as a condition to the Borrower’s
right to demand such assignment), or otherwise.
 
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.
 
 

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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;
 
(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;
 
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(b)   neither the Administrative Agent, the Issuing Lender nor any Lender has a
fiduciary relationship to the Borrower, and the relationship between the
Administrative Agent, the Issuing Lender 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,
the Issuing Lender 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, the Issuing Lender 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.
 
(a)   Each of the Administrative Agent, the Issuing Lender 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, directly
or indirectly, relating to this Agreement, except that Information may be
disclosed (i) to its and its Affiliates’ directors, officers, employees and
agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential); (ii) to the extent requested by any regulatory
authority; (iii) to the extent required by Applicable Law; (iv) to any other
party to this Agreement; (v) in connection with the exercise of any remedies
hereunder or any suit, action or proceeding relating to this Agreement or the
enforcement of rights hereunder; (vi) subject to an agreement containing
provisions substantially the same as those of this Section, to (x) any Eligible
Assignee of or Participant in, or any prospective Eligible Assignee of or
Participant in, any of its rights or obligations under this Agreement or (y) any
direct or indirect contractual counterparty or prospective counterparty (or such
contractual counterparty’s or prospective counterparty’s professional advisor)
to any credit derivative transaction relating to obligations of the Borrower;
(vii) with the written consent of the Borrower; (viii) to the extent such
Information becomes publicly available other than as a result of a breach of
this Section or (ix) becomes available to the Administrative Agent or any Lender
on a nonconfidential basis from a source other than the Borrower and such source
is not known by the Administrative Agent or such Lender to be in violation of a
duty of confidentiality; or (x) to the National Association of Insurance
Commissioners or any other similar organization.
 
(b)   The Administrative Agent and the Lenders may disclose the existence of
this Agreement and information about this Agreement to market data collectors,
similar service providers to the lending industry, and service providers to the
Administrative Agent and the Lenders in connection with the administration and
management of this Agreement, the other Loan Documents, the Commitments, and the
Extensions of Credit; provided, however, that information disclosed by the
Administrative Agent or any Lender to any such market

 
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data collectors or similar service providers shall be of a type generally
provided to such Persons in other transactions. For the purposes of this Section
10.16, “Information” means all non-public information received from the Borrower
relating to the Borrower or its business. Notwithstanding anything herein to the
contrary, Information, for purposes of this Section 10.16, shall not include,
and the Administrative Agent and each Lender may disclose to any and all
Persons, without limitation of any kind, any information with respect to the
U.S. federal income tax treatment and U.S. federal income tax structure of the
transactions contemplated hereby and all materials of any kind (including
opinions or other tax analyses) that are provided to the Administrative Agent or
such Lender relating to such tax treatment and tax structure.
 
(c)   Any Person required to maintain the confidentiality of Information as
provided in this Section 10.16 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 Issuing
Lender, the Lenders and the 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 10.17     Patriot Act
 
Each of the Administrative Agent, the Issuing Lender and the Lenders hereby
notifies 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)), it is 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 such Lender or the Agent, as applicable, to identify the
Borrower in accordance with such Act.

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]
 
 

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their respective duly authorized officers as of the
date first above written.
 
 
SOUTH JERSEY INDUSTRIES, INC.
 
By:   /s/ David A. Kindlick       
Name: David A. Kindlick
                        Title:    Vice President & Chief Financial Officer

 
 

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WACHOVIA BANK, NATIONAL ASSOCIATION, 
as Administrative Agent, as Issuing Lender, as Swingline Lender and as a Lender
 
By:        /s/ Lawrence P. Sullivan       
Name:   Lawrence P. Sullivan
Title:     Director

 

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THE BANK OF AMERICA, N.A.,
as a Lender
 
By:        /s/  Michael Striger       
Name:   Michael Striger
Title:     Vice President 

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PNC BANK, N.A.,
as a Lender
 
By:        /s/ Denise D. Killen       
Name:   Denise D. Killen
Title:     Senior Vice President

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JPMORGAN CHASE BANK, N.A.,
as a Lender
 
By:       /s/ Harold V. Garrity, III       
Name:  Harold V. Garrity, III
Title:    Vice President

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CITIZENS BANK OF PENNSYLVANIA,
as a Lender
 
By:      /s/ Derrick R. Davis       
Name:  Derrick R. Davis
Title:    Senior Vice President

 

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CITIBANK, F.S.B.,
as a Lender
 
By:         /s/  Barrett D. Bencivenga       
Name:   Barrett D. Bencivenga
Title:     Senior Vice President

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THE BANK OF NEW YORK,
as a Lender
 
By:      /s/ Richard Fronapfel 
Name:  Richard Fronapfel
Title:    Vice President

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COMMERCE BANK, N.A.,
as a Lender
 
By: /s/ Daniel R. Vereb       
Name:Daniel R. Vereb
Title: Vice President

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SCHEDULE I

LENDERS AND APPLICABLE LENDING OFFICES,
COMMITMENTS AND INITIAL COMMITMENT PERCENTAGES

Lender and Applicable
Lending Office
Commitment
Initial Commitment Percentage
Wachovia Bank, National Association
One Wachovia Center
201 South College Street
Charlotte, North Carolina 28288-0680
Attn: Agency Services
Telephone: (704) 374-2698
Facsimile: (704) 383-0288
 
$35,000,000.00
17.50%
Bank of America, N.A.
GCIB Credit Services
70 Batterson Park
Farmington, CT 06032
Attn: Elaine V. Davis
Telephone: (860) 409-5886
Facsimile: (617) 310-2713
 
$32,000,000.00
16.00%
JPMorgan Chase Bank, N.A.
695 Route 46 West
Fairfield, New Jersey 07004
Attn: Alice Shanahan
Telephone: (973) 439-5034
Facsimile: (973) 439-5014
 
$32,000,000.00
$16.00%

PNC Bank, N.A.
500 First Avenue
Pittsburgh, Pennsylvania 15219
Attn: Marc Accamando
Telephone: (412) 768-7647
Facsimile: (412) 768-4586
 
$32,000,000.00
16.00%

 
I-1
 

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The Bank of New York
One Wall Street, 19th Floor
New York, New York 10286
Attn: Lisa Williams
Telephone: (212) 635-7535
Facsimile: (212) 635-7552
 
$18,000,000.00
9.00%
Citibank, F.S.B.
210 West Lexington Drive
Glendale, California 91203
Attn: Gohar Karapetyan
Telephone: (818) 662-2618
Facsimile: (866) 692-2322
 
$18,000,000.00
9.00%
Citizens Bank of Pennsylvania
CML Operations
RDC 160
One Citizens Drive
Riverside, Rhode Island 19103
Attn: Karen Hazard
Telephone: (401) 734-5297
Facsimile: (401) 734-5385
 
$18,000,000.00
9.00%
Commerce Bank, N.A.
1701 Route 70 East
Cherry Hill, New Jersey 08034
Attn: Daniel R. Vereb, VP
Telephone: (856) 751-4296
Facsimile: (856) 751-6884
 
$15,000,000.00
7.50%

 
I-2

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SCHEDULE II

OWNERSHIP

Entity Name
Owner
Ownership
Classification
of Interest
South Jersey Industries, Inc.
(the “Borrower”)
Public
100%
 
Common Equity
Marina Energy LLC
Borrower
100%
Membership Interest
South Jersey Gas Company
Borrower
100%
Common Equity
South Jersey Energy Company
Borrower
100%
Common Equity
South Jersey Resources Group, LLC
Borrower
100%
Membership Interest

 

II-1
 
 
 

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SCHEDULE III
 
EXISTING LETTERS OF CREDIT
 
 
 
LETTER OF CREDIT NO.
ISSUE DATE
EXPIRATION DATE
FACE AMOUNT
BENEFICIARY
SM218851
3/16/2006
3/15/2007
$16,588,713.00
Commerce Bank (Trustee)
SM418226
9/20/2001
9/19/2007
$20,295,890.41
Commerce Bank (Trustee)
SM418227
9/20/2001
9/19/2007
$25,462,328.77
Commerce Bank (Trustee)
SM216897
11/21/2005
11/30/2006
$2,500,000
PJM Interconnection, LLC
SM205837
11/21/2003
8/10/2007
$100,000
PSE&G
SM204235
7/30/2003
8/31/2007
$200,000
Atlantic City Electric Company

III-1