##### 



REVOLVING CREDIT AGREEMENT
BY AND AMONG
 ENERGYSOUTH, INC.,
as Borrower,
 and
 REGIONS BANK, as agent,
 and
 REGIONS BANK, AMSOUTH BANK,
WACHOVIA BANK, NATIONAL ASSOCIATION,
AND
GULF FEDERAL BANK,
as Lenders
 $20,000,000.00
 January 31, 2005




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REVOLVING CREDIT AGREEMENT
  W I T N E S S E T H:
    ARTICLE 1.
DEFINITIONS OF TERMS
  Section 1.1.
 Section 1.2.
 Section 1.3.
 Section 1.4.




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##### 



Section 1.5.
 Section 1.6.
 Section 1.7.
 Section 1.8.
 Section 1.9.
 Section 1.10.
 Section 1.11.
 Section 1.12. 
 Section 1.13. 
 Section 1.14. 
 Section 1.15.
 Regions Bank
    
    
    
    
    
    $
    8,800,000.00AmSouth Bank
    
    
    
    
    
    $
    6,800,000.00Wachovia Bank
    
    
    
    
    
    $
    3,900,000.00Gulf Federal Bank
    
    
    
    
    
    $
    500,000.00
 Section 1.16.
 2




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##### 



Section 1.17. 
 Section 1.18. 
 Section 1.19. 
 Section 1.20. 
 Section 1.21. 
 Section 1.22.  The Wall Street Journal
 Section 1.23. 
 Section 1.24. 
 Section 1.25. 
 Section 1.26. 
 Section 1.27. 
 3




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##### 



Section 1.28. 
     Section 1.29. 
 Regions Bank
    
    
    
    
    
    
    44.0
    %
    
    
    (.44
    )AmSouth Bank
    
    
    
    
    
    
    34.0
    %
    
    
    (.34
    )Wachovia Bank
    
    
    
    
    
    
    19.5
    %
    
    
    (.195
    )Gulf Federal Bank
    
    
    
    
    
    
    2.5
    %
    
    
    (.025
    )
 Section 1.30. 
 Section 1.31. 
 Section 1.32. 
 Section 1.33. 
 Section 1.34. 
 Section 1.35. 
 4




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##### 



Section 1.36. 
 Section 1.37. 
 Section 1.38. 
 Section 1.39. 
 Section 1.40. 
 Section 1.41. 
 Section 1.42.
 Section 1.43.
    ARTICLE
2.
 THE REVOLVING LOANS
 Section 2.1. Revolving Commitments
 5




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##### 



Section 2.2. Advances
 Request for Advance A @
 Notice Irrevocable
 Funding
 Section 2.3. Settlements
   Section 2.4. Commitment Fees
 6




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##### 



Section 2.5. Termination or Reduction of Commitment by Borrower
 Section 2.6. Use of Proceeds
 ARTICLE
3.
 NOTE AND NOTE PAYMENTS
 Section 3.1. Note A @ Exhibit A
 Section 3.2. Interest Rate
 Section 3.3. Principal Payments
 Payment of the Note
 7




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##### 



Principal Payments on the Note
 Section 3.4. Payment of Interest on the Note
 Section 3.5. Manner and Application of Payments
 Section 3.6. Application of Payments
 Section 3.7. Taxes
    Section 3.8. Indemnity
 8




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##### 



ARTICLE
4.
 CONDITIONS PRECEDENT
 Section 4.1. Initial Advance
 Note
 Resolutions of Borrower
 Officers Certificate of Borrower
 Section 4.2. All Advances
 No Defaults
 Compliance with Agreement
 Request for Advance Exhibit B
 Representations and Warranties
 9




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##### 



Bankruptcy Proceedings
 ARTICLE
5.
 REPRESENTATIONS AND WARRANTIES
  Section 5.1. Organization and Good Standing
 Section 5.2. Authorization and Power
 Section 5.3. No Conflicts or Consents
 Section 5.4. Enforceable Obligations
 Section 5.5. No Default
 Section 5.6. Use of Proceeds; Margin Stock A @ A @ A @
 10




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##### 



Section 5.7. Taxes
 ARTICLE
6.
 COVENANTS
  Section 6.1. Financial Information
 Section 6.2. Additional Financial Information
 Section 6.3. Payment of Taxes and Other Indebtedness
 Section 6.4. Maintenance of Existence and Rights; Conduct of Business
 Section 6.5. Compliance with Material Agreements
 11




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##### 



Section 6.6. Minimum Stockholders Equity Plus Minority Interest
 Section 6.7. Leverage Ratio
 Section 6.8. Debt/Earnings Ratio A @
 Section 6.9. Reporting Requirements
 Section 6.10. Mobile Gas Service Corporation
 Section 6.11. Due on Sale Provision
 ARTICLE
7.
 EVENTS OF DEFAULT
 Section 7.1. Events of Default
  12




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##### 



Section 7.2. Remedies Upon Event of Default
 13




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##### 



ARTICLE 8.
 THE AGENT: PARTICIPATIONS
 Section 8.1. Appointment and Authorization A @ A @
 Section 8.2. Agents Fees
 Section 8.3. Documents
 Section 8.4. Resignation or Removal of Agent
 14




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##### 



Section 8.5. Responsibility of Agent
   Section 8.6. Notices of Event of Default
 15




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##### 



Section 8.7. Sale or Assignment
 Section 8.8. Catch-All
 Section 8.9. Corporate Power
 Section 8.10. Credit Analysis A @ A @
 Section 8.11. Administration of Loan
 ARTICLE 9.
 MISCELLANEOUS
 Section 9.1. Accounting Terms
 Section 9.2. Waiver
 16




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##### 



Section 9.3. Payment of Expenses
 Section 9.4. Notices
 (a)
    
    Borrower:
    
    EnergySouth, Inc.Post Office Box 2607Mobile, Alabama 36652Attention: Charles P. HuffmanTelecopier No.: (251) 476-1745(b)
    
    Agent:
    
    Regions BankPost Office Drawer 2527Mobile, Alabama 36622Attention: Douglas E. RehmTelecopier No.: (251) 690-1020(c)
    
    Lenders:
    
    Regions BankPost Office Drawer 2527Mobile, Alabama 36622Attention: Douglas E. RehmTelecopier No.: (251) 690-1020AmSouth BankPost Office Drawer 1628Mobile, Alabama 36633-1625Attention: Lawrence G. Ford, Jr.Telecopier No.: (251) 438-8377SouthTrust BankPost Office Box 1508Mobile, Alabama 36633
 17




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##### 



Attention: Todd HendersonTelecopier No.: (251) 431-9256Gulf Federal BankMobile, AlabamaAttention:Telecopier No.: (251)
  Section 9.5. Governing Law
 Section 9.6. Confidentiality
 Section 9.7. Non-Liability of Lenders
 Section 9.8. No Joint Venture
 Section 9.9. Binding Effect
 18




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##### 



Section 9.10. Entirety
 Section 9.11. Headings
 Section 9.12. No Third Party Beneficiary
 Section 9.13. Multiple Counterparts
  BORROWER:
    
    ENERGYSOUTH, INC.By:
    
    /s/ John S. DavisJOHN S. DAVISPresident and Chief Executive OfficerBy:
    
    /s/ Charles HuffmanCHARLES HUFFMANSenior Vice President and Chief Financial
Officer
 19




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AGENT:
    
    REGIONS BANK, as Agent for Lenders pursuant to the terms hereofBy:
    
    /s/ Douglas E. RehmDOUGLAS E. REHMIts Vice PresidentLENDERS:
    
    REGIONS BANKBy:
    
    /s/ Douglas E. RehmDOUGLAS E. REHMIts Vice PresidentAMSOUTH BANKBy:
    
    /s/ Russ FordIts Senior Vice PresidentWACHOVIA BANK, NATIONAL ASSOCIATION, successor by
merger to SouthTrust BankBy:
    
    /s/ P.Todd HendersonP. Todd HendersonIts Vice PresidentGULF FEDERAL BANKBy:
    
    /s/ Marvin BoydIts President and CEO
  
 20




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Exhibit A
 REVOLVING CREDIT NOTE
 $20,000,000.00
    
    January 31, 2005
Mobile, Alabama
 Borrower Agent
 Revolving Credit Agreement
 Principal Payments and Prepayments
 Payment of the Note
 Optional Principal Prepayments on the Note
 Payment of Interest on the Note
 Manner and Application of Payments
 21




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##### 



ENERGYSOUTH, INC.By:
    /s/ John S. DavisJOHN S. DAVISPresident and Chief Executive Officer By:
    /s/ Charles HuffmanCHARLES HUFFMANSenior Vice President and Chief Financial
Officer 22




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Exhibit B
 REQUEST FOR ADVANCE
 REVOLVING CREDIT AGREEMENT
BETWEEN REGIONS BANK, AS AGENT, AND
ENERGYSOUTH, INC.
DATED JANUARY 31, 2005
   1.
    
    There is no default on the part of Borrower under the Credit Agreement or any
other agreement between Borrower and Lenders and no event has occurred and is
continuing which constitutes an Event of Default or which, with notice of the passage
of time, or both, could constitute a Default or Event of Default under the provisions
of the Credit Agreement.2.
    
    All representations and warranties set forth in the Credit Agreement are true
and correct as of this date.3.
    
    Borrower is in compliance with all of the covenants set forth in the Credit
Agreement, including, without limitation, the financial covenants set forth in Article
6 of the Credit Agreement.
  Date:
    
    EnergySouth, Inc.By:Its
 23




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AGENT AGREEMENT
  W I T N E S S E T H:
     Agent Fee
 Waiver
  BORROWER:
    ENERGYSOUTH, INC.By:
    /s/ John S. DavisJOHN S. DAVISPresident and Chief Executive Officer 24




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By:
    /s/ Charles HuffmanCHARLES HUFFMANSenior Vice President and Chief Financial
Officer BANK:
    REGIONS BANKBy:
    /s/ Douglas E. RehmDOUGLAS E. REHMIts Vice President 25