Document:

exhibit_10-1.htm

    
      

    

    
      
         

      

      
         

        
          

        

      

      
         

        
           

        

      

    

    
      

    

    

    

    

    Letter
of Credit and Security Agreement

    Dated as
of September 4 2008

    

    Among

    

    Pivotal
Utility Holdings, Inc.,

    as
Borrower,

    

    AGL
Resources Inc.,

    as
Guarantor,

    

    The
Lenders Parties Hereto,

    

    Bank
of America, N.A.,

    as
Administrative Agent,

    

    The
Bank of Tokyo-Mitsubishi UFJ, Ltd.,

    as
Syndication Agent,

    

    and

    

    Bank
of America, N.A.,

    as
Issuing Bank,

    

    relating
to

    

    $39,000,000

    New
Jersey Economic Development Authority

    Gas
Facilities Revenue Bonds, 1996 Series A

    (NUI
Corporation Project)

    

    

    
      

    

    

    
      
        
        

         

      

      
         

        
          

        

      

      
         

      

    

    Table
of Contents

     

                    Section        Heading                                                           Page

     

    
      	
               
      

            	
              Article
      OneDefinitions 

            	
                                                      
      2

            

    

     

    
      	
               
      

            	
              Section
      1.1.Definitions                                                              2     

            

    

    
      	
               
      

            	
              Section
      1.2.Other Definitional Provisions                                                    17

            

    

     

    
      	
               
      

            	
              Article
      TwoIssuance of Letter of Credit; Fees                                                
    18

            

    

     

    
      	
               
      

            	
              Section
      2.1.Amount and Terms of Letter of Credit                                                    
      18

            

    

    
      	
               
      

            	
              Section
      2.2.Reserved                                                               18

            

    

    
      	
               
      

            	
              Section
      2.3.Reserved                                                               18

            

    

    
      	
               
      

            	
              Section
      2.4.Fees                                                                       18

            

    

    
      	
               
      

            	
              Section
      2.5.Participating Interests                                                        
    19

            

    

    
      	
               
      

            	
              Section
      2.6.Additional Payments                                                          
      20

            

    

    
      	
               
      

            	
              Section
      2.7.Capital Adequacy                                                               
      20

            

    

    
      	
               
      

            	
              Section
      2.8.Obligations of Issuing Bank                                                     
      20

            

    

     

    
      	
               
      

            	
              Article
      Three Agreement to Repay Letter of Credit Drawings; Pledged Bonds                             21

            

    

     

    
      	
               
      

            	
              Section
      3.1.Reimbursement                                                            
    21

            

    

    
      	
               
      

            	
              Section
      3.2.Pledge of Bonds                                                           23

            

    

    
      	
               
      

            	
              Section
      3.3.Intentionally Omitted                                                          
      23

            

    

    
      	
               
      

            	
              Section
      3.4.Reinstatement of Letter of Credit                                                      
      23

            

    

    
      	
               
      

            	
              Section
      3.5.Credit for Amount Paid on Bonds                                                    
      24

            

    

    
      	
               
      

            	
              Section
      3.6.Default Rate                                                                 
      24

            

    

    
      	
               
      

            	
              Section
      3.7.Computation of Interest and Fees                                                    
      24

            

    

    
      	
               
      

            	
              Section
      3.8.Payments                                                               24

            

    

    
      	
               
      

            	
              Section
      3.9.Withholding Taxes                                                                     
      25

            

    

    
      	
               
      

            	
              Section
      3.10.Character of Obligations Hereunder                                               28

            

    

    
      	
               
      

            	
              Section
      3.11.ISP98                                                                   
      29

            

    

     

    
      	
               
      

            	
              Article
      Four Conditions Precedent to Issuance of Letter of Credit                                                 
      29

            

    

     

    
      	
               
      

            	
              Section
      4.1.Conditions                                                                                    
      29

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
              Article
      Five Representations and Warranties                                                32

            

    

     

    
      	
               
      

            	
              Section
      5.1.Financial Condition                                                         
      33

            

    

    
      	
               
      

            	
              Section
      5.2.No Change                                                                
      33

            

    

    
      	
               
      

            	
              Section
      5.3.Existence; Compliance with Law                                                   
      33

            

    

    
      	
               
      

            	
              Section
      5.4.Power; Authorization; Enforceable Obligations                                         
      33

            

    

    
      	
               
      

            	
              Section
      5.5.No Legal Bar                                                             
      34

            

    

    
      	
               
      

            	
              Section
      5.6.Litigation                                                                           
      34

            

    

    
      	
               
      

            	
              Section
      5.7.No Default                                                                 
      34

            

    

    
      	
               
      

            	
              Section
      5.8.Ownership of Property; Liens                                                        
      34

            

    

    
      	
               
      

            	
              Section
      5.9.Intellectual Property                                                        
    34

            

    

    
      	
               
      

            	
              Section
      5.10.Taxes                                                                
      34

            

    

    
      	
               
      

            	
              Section
      5.11.Federal Regulations                                                        35

            

    

    
      	
               
      

            	
              Section
      5.12.ERISA                                                               35

            

    

    
      	
               
      

            	
              Section
      5.13.Investment Company Act; Other Regulations                                           35

            

    

    
      	
               
      

            	
              Section
      5.14.Subsidiaries                                                             
      35

            

    

    
      	
               
      

            	
              Section
      5.15.Use of Extensions of Credit                                                   36

            

    

    
      	
               
      

            	
              Section
      5.16.Environmental Matters                                                          36

            

    

    
      	
               
      

            	
              Section
      5.17.Accuracy of Information, etc                                                                                                       
      37

            

    

    
      	
               
      

            	
              Section
      5.18.Solvency                                                                 
      37

            

    

    
      	
               
      

            	
              Section
      5.19.Status of Obligations                                                            
      37

            

    

    
      	
               
      

            	
              Section
      5.20.OFAC                                                               37

            

    

    
      	
               
      

            	
              Section
      5.21.USA Patriot Act                                                             37

            

    

    
      	
               
      

            	
              Section
      5.22.Official Statements, Remarketing Memoranda or Other Offering
      Documents                             
      38

            

    

    
      	
               
      

            	
              Section
      5.23.Indenture and Supplemental Indenture                                             
      38

            

    

    
      	
               
      

            	
              Section
      5.24.Loan Agreement                                                            
      38

            

    

     

    
      	
               
      

            	
              Article
      Six AFFIRMATIVE COVENANTS                                                    38

            

    

     

    
      	
               
      

            	
              Section
      6.1.Financial Statements                                                        38

            

    

    
      	
               
      

            	
              Section
      6.2.Certificates; Other Information                                                      
      39

            

    

    
      	
               
      

            	
              Section
      6.3.Payment of Obligations                                                                  
      40

            

    

    
      	
               
      

            	
              Section
      6.4.Maintenance of Existence; Compliance                                               
      40

            

    

    
      	
               
      

            	
              Section
      6.5.Maintenance of Property; Insurance                                                   
      40

            

    

    
      	
               
      

            	
              Section
      6.6.Inspection of Property; Books and Records; Discussions                                      
      40

            

    

    
      	
               
      

            	
              Section
      6.7.Notices                                                                      
      41

            

    

    
      	
               
      

            	
              Section
      6.8.Environmental Laws                                                        
    41

            

    

    
      	
               
      

            	
              Section
      6.9.Maintenance of Ownership                                                    42

            

    

    
      	
               
      

            	
              Section
      6.10.Certain Obligations                                                        42

            

    

    
      	
               
      

            	
              Section
      6.11.Loan Agreement                                                            
      42

            

    

     

    
      	
               
      

            	
              Article
      Seven Financial and Negative Covenants                                              42

            

    

     

    
      	
               
      

            	
              Section
      7.1.Financial Condition Covenant                                                      
      42

            

    

    
      	
               
      

            	
              Section
      7.2.Liens                                                                 
      42

            

    

    
      	
               
      

            	
              Section
      7.3.Fundamental Changes                                                           
      44

            

    

    
      	
               
      

            	
              Section
      7.4.Disposition of Property                                                         
      44

            

    

    
      	
               
      

            	
              Section
      7.5.Restricted Payments                                                        44

            

    

    
      	
               
      

            	
              Section
      7.6.Amendments to Operative Documents                                               
      45

            

    

    
      	
               
      

            	
              Section
      7.7.Investments                                                             
      45

            

    

    
      	
               
      

            	
              Section
      7.8.Negative Pledge Clauses                                                       
      46

            

    

    
      	
               
      

            	
              Section
      7.9.Clauses Restricting Subsidiary Distributions                                            
      46

            

    

    
      	
               
      

            	
              Section
      7.10.Lines of Business and Hedge Activities                                            46

            

    

    
      	
               
      

            	
              Section
      7.11.Designation of Subsidiaries                                                                
      46

            

    

    
      	
               
      

            	
              Section
      7.12.Tax
      Status                                                              
      47

            

    

    
      	
               
      

            	
              Section
      7.13.Official Statement, Remarketing Memorandum or Other Offering
      Document                                     
      47

            

    

    
      	
               
      

            	
              Section
      7.14.Effectiveness of Certain Negative Covenants                                         
      47

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
              Article
      Eight Pledged Bonds                                                                
      47

            

    

     

    
      	
               
      

            	
              Section
      8.1.The
      Pledge                                                               
      47

            

    

    
      	
               
      

            	
              Section
      8.2.Remedies Upon Default                                                         
      48

            

    

    
      	
               
      

            	
              Section
      8.3.Valid Perfected First Lien                                                       
      49

            

    

    
      	
               
      

            	
              Section
      8.4.Release of Pledged Bonds                                                     
      49

            

    

     

    
      	
               
      

            	
              Article
      Nine Guaranty of Obligations                                                     
      49

            

    

     

    
      	
               
      

            	
              Section
      9.1.The Guaranty                                                            49

            

    

    
      	
               
      

            	
              Section
      9.2.Obligations Unconditional                                                    
    49

            

    

    
      	
               
      

            	
              Section
      9.3.Reinstatement                                                          
  50

            

    

    
      	
               
      

            	
              Section
      9.4.Certain Additional Waivers                                                    51

            

    

    
      	
               
      

            	
              Section
      9.5.Remedies                                                                   
      51

            

    

    
      	
               
      

            	
              Section
      9.6.Guarantee of Payment; Continuing Guarantee                                            51

            

    

     

    
      	
               
      

            	
              Article
      Ten Events of Default; Remedies                                                        
      51

            

    

     

    
      	
               
      

            	
              Section
      10.1.Events of Default                                                          
      51

            

    

    
      	
               
      

            	
              Section
      10.2.Remedies                                                                
      54

            

    

    
      	
               
      

            	
              Section
      10.3.Application of Collections                                                          
      55

            

    

     

    
      	
               
      

            	
              Article
      Eleven The Agent                                                             
      56

            

    

     

    
      	
               
      

            	
              Section
      11.1.Appointment                                                                 
      56

            

    

    
      	
               
      

            	
              Section
      11.2.Delegation of Duties                                                            
      56

            

    

    
      	
               
      

            	
              Section
      11.3.Exculpatory Provisions                                                        
      56

            

    

    
      	
               
      

            	
              Section
      11.4.Reliance by Administrative Agent                                                     
      57

            

    

    
      	
               
      

            	
              Section
      11.5.Notice of Default                                                           
      57

            

    

    
      	
               
      

            	
              Section
      11.6.Non-Reliance on the Administrative Agent and Other
      Lenders                                   
      57

            

    

    
      	
               
      

            	
              Section
      11.7.Indemnification                                                             
      58

            

    

    
      	
               
      

            	
              Section
      11.8.Administrative Agent in Its Individual Capacity                                             
      58

            

    

    
      	
               
      

            	
              Section
      11.9.Successor Administrative Agent                                                59

            

    

    
      	
               
      

            	
              Section
      11.10.Syndication Agent                                                             
      59

            

    

     

    
      	
               
      

            	
              Article
      Twelve Miscellaneous                                                          
      59

            

    

     

    
      	
               
      

            	
              Section
      12.1.Amendments and Waivers                                                        
      59

            

    

    
      	
               
      

            	
              Section
      12.2.Notices                                                                  
      60

            

    

    
      	
               
      

            	
              Section
      12.3.No Waiver; Cumulative Remedies                                                    
      61

            

    

    
      	
               
      

            	
              Section
      12.4.Survival of Representations and Warranties                                          
      61

            

    

    
      	
               
      

            	
              Section
      12.5.Payment of Expenses and Taxes                                                61

            

    

    
      	
               
      

            	
              Section
      12.6.Successors and Assigns; Participations and Assignments                                
      63

            

    

    
      	
               
      

            	
              Section
      12.7.Adjustments; Set-off                                                          
      65

            

    

    
      	
               
      

            	
              Section
      12.8.Counterparts                                                                
      66

            

    

    
      	
               
      

            	
              Section
      12.9.Severability                                                            66

            

    

    
      	
               
      

            	
              Section
      12.10.Integration                                                            66

            

    

    
      	
               
      

            	
              Section
      12.11.Governing Law                                                            
      66

            

    

    
      	
               
      

            	
              Section 12.12.Submission
      To Jurisdiction; Waivers                                             
      66

            

    

    
      	
               
      

            	
              Section 12.13.Acknowledgements                                                           
      67

            

    

    
      	
               
      

            	
              Section 12.14.Confidentiality                                                            
      67

            

    

    
      	
               
      

            	
              Section 12.15.Waivers
      of Jury Trial                                                         
      68

            

    

    
      	
               
      

            	
              Section 12.16.USA
      Patriot Act Notice                                                     
      68

            

    

    
      	
               
      

            	
              Section 12.17Acknowledgement
      and Consent to Supplemental Indenture                                68

            

    

    
      	
               
      

            	
              Section 12.18.Consent
      to Insurance Endorsement

            

    

    

    
      
        
          --

        

         

      

      
         

        
          

        

      

      
         

      

    

    

    Schedules:

    

    Schedule
1.1-Lender Commitments

    Schedule
5.14-Subsidiaries

    Schedule
5.16-Environmental Matters

    Schedule
7.2(i)-Existing Liens

    Schedule
7.8-Agreements Prohibiting or Limiting Liens

    

    Annexes:

    

    Annex
I-Form of Letter of Credit

    Annex
II-Form of Assignment and Acceptance

    Annex
III-Form of Compliance Certificate

    Annex
IV-Form of Endorsement to Bond Insurance Policy

    

    
      
        
          --

        

         

      

      
         

        
          

        

      

      
         

      

    

    

     

    Letter
of Credit and Security Agreement

     

    This
Letter of Credit and Security Agreement, dated as of September 4, 2008 (this
“Agreement”), among
Pivotal Utility Holdings, Inc., a New Jersey corporation (the “Borrower”), AGL Resources
Inc., a Georgia
corporation (the “Guarantor,” and together with
the Borrower, the “Credit
Parties”), the banks and other financial institutions that are parties
hereto (each a “Lender”
and collectively, the “Lenders”), Bank of America,
N.A., a national banking association organized under the laws of the United
States (“Bank of
America”), in its capacity as administrative agent for the Lenders (in
such capacity, the “Administrative Agent”), The
Bank of Tokyo-Mitsubishi UFJ, Ltd., in its capacity as syndication agent for the
Lenders (in such capacity, the “Syndication Agent”), and
Bank of America, N.A., in its capacity as issuing bank of the Letter of Credit
described herein (in such capacity, the “Issuing Bank”).

     

    Witnesseth:

     

    Whereas,
the New Jersey Economic Development Authority (the “Issuer”) has previously
issued its Gas Facilities Revenue Bonds, 1996 Series A (NUI Corporation
Project), in the original aggregate principal amount of $39,000,000 (the “Bonds”), pursuant to a Trust
Indenture, dated as of June 1, 1996 (the “Indenture”), between the
Issuer and the First Union National Bank, as trustee (in such capacity, the
“Original Trustee”),
for the purpose of providing funds to finance a portion of the cost of
acquisition, construction and equipping of certain gas facilities and
functionally related equipment, consisting of supply mains, distribution mains,
service lines, meters and miscellaneous equipment all located in the Counties of
Middlesex and Union, State of New Jersey; and 

     

    Whereas,
the proceeds from the sale of the Bonds were loaned to the Borrower pursuant to
a Loan Agreement, dated as of June 1, 1996 (the “Loan Agreement”), between
the Issuer and the Borrower, pursuant to which the Borrower is obligated to
repay such loan in installments sufficient to pay the debt service when due on
the Bonds; and

     

    Whereas,
the regularly scheduled payments of principal of and interest on the Bonds when
due are insured under a municipal bond insurance policy (the “Bond Insurance Policy”)
issued by Ambac Assurance Corporation (in such capacity, the “Bond Insurer”);
and

     

    Whereas,
as additional security for the Bonds, the Borrower has requested the Issuing
Bank to issue its irrevocable letter of credit in the form of Annex I
attached hereto (the “Letter
of Credit”); and

     

    Whereas,
the First Supplement to Trust Indenture, dated as of September 1, 2008 (the
“Supplemental
Indenture”), between the Issuer and The Bank of New York Mellon, as
successor trustee to the Original Trustee (the “Trustee”), as consented to by
the Bond Insurer, will be executed and delivered in connection with the issuance
of the Letter of Credit, which supplement shall form a part of the Indenture, to
make certain changes necessary to implement a conversion of the interest rate on
the Bonds, to terminate the Second Amended and Restated Standby Bond Purchase
Agreement dated as of June 1, 2005, by and among the Borrower, the banks party
thereto and The Bank of New York, as agent, and to add provisions permitting the
addition of a credit facility and/or a liquidity facility with respect to the
Bonds; and

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Whereas,
it is a condition to the obligation of the Issuing Bank to execute and deliver
the Letter of Credit, and to the obligations of the Lenders to purchase
participating interests in such Letter of Credit, that this Agreement shall have
been executed and delivered by each of the Credit Parties, the Lenders, the
Issuing Bank, the Administrative Agent and the Syndication Agent; 

     

    Now,
Therefore, in consideration of the mutual promises contained herein and other
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

     

    Article
One

     

    

     

    Definitions

     

    Section
1.1.Definitions.  For
the purpose of this Agreement, in addition to capitalized terms defined
elsewhere herein or in the Indenture, the following terms shall have the
following meanings:

     

    “A Drawing”: as
specified in the Letter of Credit, a drawing with respect to the payment, on an
Interest Payment Date, of unpaid interest on the Bonds.

     

    “Administrative
Agent”:  Bank of America, as the administrative agent for the
Lenders under this Agreement and the other Credit Documents, together with any
successors appointed or acting as Administrative Agent as provided in Section
11.9.

     

    “Administrative
Questionnaire”:  an Administrative Questionnaire for the
Facility in a form supplied by the Administrative Agent to the
Lenders.

     

    “Affiliate”:  as to
any Person, any other Person that, directly or indirectly, is in Control of, is
Controlled by, or is under common Control with, such Person.  For
purposes of this definition, “Control” means the power to direct or to cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.

     

    “Agents”:  the
collective reference to the Administrative Agent and the Syndication
Agent.

     

    “Aggregate
Exposure”:  with respect to any Lender at any time, an amount
equal to (a) the aggregate amount of such Lender’s unused Commitment at
such time and (b) the amount of such Lender’s Extensions of Credit then
outstanding.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Aggregate Exposure
Percentage”:  with respect to any Lender at any time, the ratio
(expressed as a percentage) of such Lender’s Aggregate Exposure at such time to
the total Aggregate Exposures of all Lenders at such time.

     

    “Agreement”:  as
defined in the first paragraph of this Agreement.

     

    “Applicable Commitment
Percentage”:  with respect to any Lender at any time, the
ratio  (expressed as a percentage) of such Lender’s Commitment to the
Total Commitments at such time.  

     

    “Applicable L/C Fee
Rate”:  for the Letter of Credit outstanding on any day, the
rate per annum set forth below opposite the Level in effect on such day based on
the Ratings then in effect:

    
      	
              Level

            	 	
              Applicable
      L/C Fee Rate

            	 
	
              Level
      I

            	 	 	0.50	%
	
              Level
      II

            	 	 	0.55	%
	
              Level
      III

            	 	 	0.60	%
	
              Level
      IV

            	 	 	0.70	%
	
              Level
      V

            	 	 	0.90	%
	
              Level
      VI

            	 	 	1.05	%

    

     

    The
Guarantor shall give written notice to the Administrative Agent of each change
to the Ratings affecting the applicable Level in effect, within three (3)
Business Days thereof, and any corresponding change to the Applicable L/C Fee
Rate shall be effective on the date of the relevant change (irrespective of
whether the Guarantor has provided such notice).  Notwithstanding the
foregoing, if AGL Capital Corporation or the Guarantor shall at any time fail to
have in effect such a Rating on its non-credit enhanced senior unsecured
long-term debt, the Guarantor shall seek and obtain (if not already in effect),
within thirty (30) days after such rating first ceases to be in effect, a
corporate credit rating or a bank loan rating from S&P, and the Applicable
L/C Fee Rate shall thereafter be based on such rating in the same manner as
provided herein with respect to AGL Capital Corporation’s or the Guarantor’s
senior non-credit enhanced unsecured long-term debt rating.  During
any period when no such rating exists, the Applicable L/C Fee Rate shall be the
highest percentage shown above.

     

    “Assets”:  any and
all rights, titles and interests in and to any and all assets of a Person,
including all real or personal property, all tangible or intangible property,
and all cash, wherever such assets are situated.

     

    “Assignee”:  as
defined in Section 12.6(c).

     

    “Assignment and
Acceptance”:  an Assignment and Acceptance, substantially in
the form of Annex II.

     

    “Assignor”:  as
defined in Section 12.6(c).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Available
Commitments”:  at any time, an amount equal to (a) the Total
Commitments then in effect, minus (b) the Total Extensions of Credit then
outstanding.

     

    “B Drawing”:  as
specified in the Letter of Credit, a drawing with respect to the payment of the
principal amount of, and the unpaid interest on, the Bonds upon an optional or
mandatory redemption of less than all of such Bonds then
outstanding.

     

    “Bank of
America”:  Bank of America, N.A., a national banking
association, and its successors and assigns.

     

    “Bankruptcy
Law”:  the United States Bankruptcy Code, 11 U.S.C. §§ 101,
et seq., or any similar
Federal or state statute.

     

    “Benefited
Lender”:  as defined in Section 12.7(a).

     

    “Board”:  the Board
of Governors of the Federal Reserve System of the United States (or any
successor).

     

    “Bonds”:  as
defined in the preambles to this Agreement.

     

    “Bond Insurance
Policy”:  as defined in the preambles to this
Agreement.

     

    “Bond Insurer Event of
Default”:  means any of the following with respect to the Bond
Insurer:

     

    (i)Bond
Insurer shall default in any payment or payments or amounts payable by it under
its Bond Insurance Policy, or

     

    (ii)any
material provision of its Bond Insurance Policy relating to the obligation of
Bond Insurer to make payments thereunder at any time for any reason ceases to be
valid and binding on the Bond Insurer in accordance with the terms of its Bond
Insurance Policy or is declared to be null and void, invalid or unenforceable by
a final non-appealable decision of a court or other governmental agency of
appropriate jurisdiction, or the validity or enforceability thereof is contested
by a senior officer of Bond Insurer in writing or by any court or other
governmental agency of appropriate jurisdiction, or Bond Insurer repudiates in
writing its obligations under its Bond Insurance Policy; or

     

    (iii)a
proceeding is instituted in a court having jurisdiction in the premises seeking
an order for relief, rehabilitation, reorganization, conservation, liquidation
or dissolution in respect of the Bond Insurer or for any substantial part of its
property under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or for the appointment of a receiver, liquidator, assignee,
custodian, trustee or sequestrator (or other similar official) and such
proceeding is not terminated for a period of ninety (90) consecutive days or
such court enters an order granting the relief sought in such proceeding or the
Bond Insurer shall institute any such proceeding; or the Bond Insurer shall
commence a voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, shall consent to the entry of an order
for relief in an involuntary case under any such law or shall consent to the
appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian or sequestrator (or other similar official) of the Bond
Insurer or for any substantial part of its property, or shall make a general
assignment for the benefit of creditors.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Bond Insurer”:  as
defined in the preambles to this Agreement.

     

    “Borrower”:  as
defined in the first paragraph of this Agreement.

     

    “Business”:  as
defined in Section 5.16(b).

     

    “Business Day”:  a
day other than (i) a Saturday, Sunday or other day on which commercial
banks in Atlanta, Georgia and New York, New York are authorized or required by
law to close, or (ii) so long as Bank of America, N.A. is the Issuing Bank,
a day on which Bank of America, N.A.’s Scranton, Pennsylvania Letter of Credit
Office is closed for business.

     

    “C Drawing”:  as
specified in the Letter of Credit, a drawing with respect to the payment of the
principal amount of, and interest due on, the Bonds which the Remarketing Agent
has been unable to remarket within the time limits established in the related
Indenture.

     

    “Capital
Stock”:  any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a partnership, limited liability company or
other Person (other than a corporation), and any and all warrants, rights or
options to purchase any of the foregoing.

     

    “Cash
Equivalents”:  (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition; (b)
certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of six months or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
laws of the United States or any state thereof having combined capital and
surplus of not less than $500,000,000; (c) commercial paper of an issuer rated
at least A-1 by S&P or P-1 by Moody’s, or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating agencies
cease publishing ratings of commercial paper issuers generally, and maturing
within six months from the date of acquisition; (d) repurchase obligations of
any Lender or of any commercial bank satisfying the requirements of clause (b)
of this definition, having a term of not more than 30 days, with respect to
securities issued or fully guaranteed or insured by the United States
government; (e) securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States, by any political subdivision or taxing authority of any
such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least A
by S&P or A2 by Moody’s; (f) securities with maturities of six months
or less from the date of acquisition backed by standby Letter of Credit issued
by any Lender or any commercial bank satisfying the requirements of clause (b)
of this definition; or (g) shares of money market mutual or similar funds which
invest exclusively in assets satisfying the requirements of clauses (a) through
(f) of this definition. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Closing
Date”:  the date of this Agreement as set forth in the first
paragraph of this Agreement.

     

    “Code”:  the
Internal Revenue Code of 1986, as amended from time to time, including all
applicable regulations thereunder whether proposed, temporary or final,
including regulations issued and proposed pursuant to the statutory predecessor
of the Code, and, in addition, all official rulings and judicial determinations
applicable to the Bonds under the Code and under any successor provisions to the
relevant provisions of the Code or regulations.

     

    “Commitment”:  as
to any Lender, the obligation of such Lender to purchase participating interests
pursuant to Section 2.5 of this Agreement in Letter of Credit issued
pursuant to this Agreement in an aggregate maximum face amount not to exceed the
amount set forth under the heading “Commitment” opposite such Lender’s name on
Schedule 1.1 or in the Assignment and Acceptance pursuant to which such Lender
has become a party hereto, as the same may be changed from time to time pursuant
to the terms hereof.  

     

    “Commonly Controlled
Entity”:  an entity, whether or not incorporated, that is under
common control with the Borrower and/or the Guarantor within the meaning of
Section 4001 of ERISA or is part of a group that includes the Borrower and/or
the Guarantor and that is treated as a single employer under Section 414 of
the Code.

     

    “Compliance
Certificate”:  a certificate duly executed by a Responsible
Officer substantially in the form of Annex III.

     

    “Conduit
Lender”:  any special purpose corporation organized and
administered by any Lender for the purpose of extending credit otherwise
required to be made by such Lender and designated by such Lender in a written
instrument, subject to the consent of the Administrative Agent and the Borrower
(which consent by the Borrower shall not be unreasonably withheld or delayed);
provided, that the
designation by any Lender of a Conduit Lender shall not relieve the designating
Lender of any of its obligations to purchase participations in Letter of Credit
under this Agreement if, for any reason, its Conduit Lender fails to purchase
such participations in Letter of Credit, and the designating Lender (and not the
Conduit Lender) shall have the sole right and responsibility to deliver all
consents, amendments and waivers required or requested under this Agreement with
respect to its Conduit Lender, and provided, further, that no
Conduit Lender shall (a) be entitled to receive any greater amount pursuant to
Sections 2.6, 2.7, and 2.8 than the designating Lender would have been entitled
to receive in respect of the Extensions of Credit made by such Conduit Lender or
(b) be deemed to have any Commitment.

     

    “Consolidated Net
Worth”:  at any date, the aggregate amount of Capital Stock,
minority interests, and other equity accounts (including, without limitation,
retained earnings, paid in capital and accumulated other comprehensive income or
loss (but without giving effect to any non-cash pension and other
post-retirement benefits liability adjustments recorded in accordance with
GAAP)) of the Guarantor and the other Group Members at such date determined on a
consolidated basis in accordance with GAAP.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Consolidated Total
Debt”:  at any date, the aggregate principal amount of all
Indebtedness of the Guarantor and the other Group Members at such date
(excluding Indebtedness of the type described in clause (k) of the definition of
the term Indebtedness), determined on a consolidated basis in accordance with
GAAP.

     

    “Continuing
Directors”:  the directors of the Guarantor on the Closing Date
and each other director, if, in each case, such other director’s nomination for
election to the board of directors of the Guarantor is recommended by at least a
majority of the then Continuing Directors.

     

    “Contractual
Obligation”:  as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is
bound.

     

    “Credit
Documents”:  collectively, this Agreement, any applications
submitted to the Issuing Bank by either Credit Party in respect of the Letter of
Credit, the Indenture, the Supplemental Indenture and each other agreement,
instrument, or document evidencing, guaranteeing, or securing the obligations of
either of the Credit Parties pursuant to this Agreement.

     

    “Credit
Facility”:  any letter of credit, line of credit, insurance
policy, guaranty or other agreement constituting a credit enhancement or
liquidity facility which is issued by a bank, trust company, savings and loan
association or other institutional lender, insurance company or surety company
for the benefit of the holder of any Indebtedness in order to provide a source
of funds for the payment of all or any portion of a Credit Party’s payment
obligations under such Indebtedness.

     

    “Credit
Parties”:  together, the Borrower and the
Guarantor.

     

    “D Drawing”:  as
specified in the Letter of Credit, a drawing with respect to the payment
(whether at maturity, upon acceleration following an event of default, or upon
redemption, of the Bonds as a whole), of the total unpaid principal of, and
unpaid interest on, all of the Bonds.

     

    “Date of
Issuance”:  with respect to the Letter of Credit issued
pursuant to this Agreement, the date of issuance and delivery of such Letter of
Credit by the Issuing Bank.

     

    “Default”:  any of
the events specified in Section 10.1, whether or not any requirement for
the giving of notice, the lapse of time, or both, has been
satisfied.

     

    “Disposition”:  with
respect to any property, any sale, lease, sale and leaseback, assignment,
conveyance, transfer or other disposition thereof.  The terms “Dispose” and “Disposed of” shall have
correlative meanings.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Dollars” and “$”:  dollars in
lawful currency of the United States.

     

    “Eligible
Assignee”:  (i) a Lender; and (ii) any other Person (other than
a natural Person) approved by the Administrative Agent, the Issuing Bank and,
unless (x) such Person is taking delivery of an assignment in connection with
physical settlement of a credit derivatives transaction or (y) an Event of
Default has occurred and is continuing, by the Borrower (each such approval not
to be unreasonably withheld or delayed).  If the consent of the
Borrower to an assignment or to an Eligible Assignee is required hereunder, the
Borrower shall be deemed to have given its consent ten Business Days after the
date notice thereof has actually been delivered by the assigning Lender (through
the Administrative Agent) to the Borrower, unless such consent is expressly
refused by the Borrower prior to such tenth Business Day.

     

    “Environmental
Laws”:  any and all foreign, Federal, state, local or municipal
laws, rules, orders, regulations, statutes, ordinances, codes, decrees,
requirements of any Governmental Authority or other Requirements of Law
(including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
as now or may at any time hereafter be in effect.

     

    “ERISA”:  the
Employee Retirement Income Security Act of 1974, as amended from time to
time.

     

    “Event of
Default”:  any of the events specified in Section 10.1, provided that any requirement
for the giving of notice, the lapse of time, or both, has been
satisfied.

     

    “Expiration
Date”:  with respect to the Letter of Credit issued pursuant to
this Agreement, the date the Letter of Credit expires in accordance with its
terms.

     

    “Extensions of
Credit”:  as to any Lender at any time, an amount equal to such
Lender’s Applicable Commitment Percentage of the L/C Obligations then
outstanding.

     

    “Facility”:  the
$39,576,986 letter of credit facility being made available to the Borrower
pursuant to this Agreement.

     

    “Funding
Office”:  the office of the Administrative Agent specified in
Section 12.2 or such other office as may be specified from time to time by
the Administrative Agent as its funding office by written notice to the Borrower
and the Lenders.

     

    “GAAP”:  those
accounting principles, standards and practices generally accepted in the United
States as in effect from time to time.

     

    “Governmental
Approvals”:  any authorizations, consents, approvals, licenses,
rulings, permits, certifications, exemptions, filings or registrations by or
with any Governmental Authority.

     

    “Governmental
Authority”:  any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance
Commissioners).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Governing
Body”:  when used with respect to any Person, its board of
directors, board of trustees, or other board, committee or group of individuals
in which the powers of a board of directors or board of trustees is vested
generally or for the specific matters under consideration.

     

    “Government
Issuer”:  any federal, state or municipal corporation or
political subdivision thereof or any instrumentality of any of the foregoing
empowered to issue obligations on behalf thereof.

     

    “Government
Obligations”:  direct obligations of, or obligations the
principal of and interest on which are unconditionally guaranteed by, the United
States of America, including evidences of a direct ownership interest in future
interest or principal payments on obligations issued or guaranteed by the United
States of America, which obligations are held in a custody account by a
custodian pursuant to the terms of a custody agreement.

     

    “Group
Members”:  the collective reference to the Guarantor, the
Borrower and their respective Restricted Subsidiaries.  

     

    “Guarantee
Obligation”:  as to any Person (the “guaranteeing person”), any
obligation of (a) the guaranteeing person or (b) another Person (including any
bank under any letter of credit) to induce the creation of which the
guaranteeing person has issued a reimbursement, counterindemnity or similar
obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the “primary obligations”)
of any other third Person (the “primary obligor”) in any manner, whether
directly or indirectly, including any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (1) for the purchase or payment of any such primary obligation or
(2) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in respect
thereof; provided,
however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business.  The amount of any Guarantee Obligation of any guaranteeing
person shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person’s
maximum reasonably anticipated liability in respect thereof as determined by the
Guarantor in good faith.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Guarantor”:  as
defined in the first paragraph of this Agreement.

     

    “Hedge
Agreements”:  all interest rate swaps, caps or collar
agreements or similar arrangements dealing with interest rates or currency
exchange rates or the exchange of nominal interest obligations, either generally
or under specific contingencies, and all commodity price protection agreements,
or any other hedging arrangements.

     

    “Hybrid
Securities”:  any trust preferred securities, or deferrable
interest subordinated debt with a maturity of at least 20 years, which provides
for the optional or mandatory deferral of interest or distributions, issued by
the Guarantor or AGL Capital Corporation, or any business trusts, limited
liability companies, limited partnerships or similar entities (i) substantially
all of the common equity, general partner or similar interests of which are
owned (either directly or indirectly through one or more wholly owned
Subsidiaries) at all times by the Guarantor or AGL Capital Corporation or any
Subsidiaries, (ii) that have been formed for the purpose of issuing such
securities or deferrable interest subordinated debt, and (iii) substantially all
the assets of which consist of (A) subordinated debt of the Guarantor or AGL
Capital Corporation or any Subsidiary, and (B) payments made from time to time
on the subordinated debt.

     

    “Indebtedness”:  of
any Person at any date, without duplication, (a) all indebtedness of such Person
for borrowed money, (b) all obligations of such Person for the deferred purchase
price of property or services (other than trade payables incurred in the
ordinary course of such Person’s business that are not more than 90 days past
due unless being contested in good faith and for which any reserves required by
GAAP have been provided), (c) all obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments, (d) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and remedies
of the seller or lender under such agreement in the event of default are limited
to repossession or sale of such property), (e) all capital lease (within the
meaning of GAAP) obligations of such Person, (f) all Securitization Facility
Attributed Debt, (g) all obligations of such Person, contingent or otherwise, as
an account party or applicant under or in respect of acceptances, Letter of
Credit, surety bonds or similar arrangements, (h) the liquidation value of all
mandatorily redeemable preferred Capital Stock of such Person, (i) all Guarantee
Obligations of such Person in respect of obligations of the kind referred to in
clauses (a) through (h) above, (j) all obligations of the kind referred to in
clauses (a) through (i) above secured by (or for which the holder of such
obligation has an existing right, contingent or otherwise, to be secured by) any
Lien on property (including accounts and contract rights) owned by such Person,
whether or not such Person has assumed or become liable for the payment of such
obligation, (k) all obligations of such Person in respect of Hedge Agreements
and (l) all Off-Balance Sheet Liabilities.  The Indebtedness of any
Person shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such Person
is liable therefor as a result of such Person’s ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness expressly provide that such Person is not liable
therefor.  Notwithstanding the foregoing, obligations of any Person
with respect to Park and Loan Transactions shall not be considered
Indebtedness.

     

    “Indenture”:  as
specified in the preambles to this Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Interest Payment
Date”:  as defined in the Indenture.

     

    “Insolvency”:  with
respect to any Multiemployer Plan, the condition that such Plan is insolvent
within the meaning of Section 4245 of ERISA.

     

    “Intellectual
Property”:  the collective reference to all rights, priorities
and privileges relating to intellectual property, whether arising under United
States, multinational or foreign laws or otherwise, including copyrights,
copyright licenses, patents, patent licenses, trademarks, trademark licenses,
technology, know-how and processes, and all rights to sue at law or in equity
for any infringement or other impairment thereof, including the right to receive
all proceeds and damages therefrom.

     

    “Investments”:  as
defined in Section 7.7.

     

    “Issuers”:  as
defined in the preambles to this Agreement.

     

    “Issuing
Bank”:  Bank of America, N.A. in its capacity as issuer of the
Letter of Credit issued pursuant to this Agreement.

     

    “L/C Fee Payment
Date”:  for the Letter of Credit issued pursuant to this
Agreement, the last day of each March, June, September and December so long as
such Letter of Credit remains in effect, and the date of expiration or
cancellation of such Letter of Credit.

     

    “L/C
Obligations”:  at any time, an amount equal to the sum of (a)
the then undrawn and unexpired amount of the Letter of Credit and (b) the
aggregate amount of drawings under the Letter of Credit that has not then been
reimbursed by the Borrower or the Guarantor pursuant to Section
3.1.

     

    “L/C
Participants”:  the collective reference to all Lenders other
than the Issuing Bank.

     

    “Lender
Affiliate”:  (a) any Affiliate of any Lender, (b) any Person
that is administered or managed by any Lender and that is engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar
extensions of credit in the ordinary course of its business and (c) with respect
to any Lender which is a fund that invests in commercial loans and similar
extensions of credit, any other fund that invests in commercial loans and
similar extensions of credit and is managed or advised by the same investment
advisor as such Lender or by an Affiliate of such Lender or investment
advisor.

     

    “Lenders”:  as
defined in the first paragraph of this Agreement.

     

    “Letter of
Credit”:  as defined in the preambles to this
Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Level I”, “Level II”, “Level III”, “Level IV”, “Level V” and “Level VI”:  the
respective Level set forth below, as determined by the Ratings then in
effect:

    
      	
              Level

            	 	
              S&P
      Rating

            	 	 	
              Moody’s
      Rating

            	 
	
              Level
      I

            	 	
              A
      or higher

            	 	 	
              A2
      or higher

            	 
	
              Level
      II

            	 	 	A-	 	 	 	A3	 
	
              Level
      III

            	 	
              BBB+

            	 	 	
              Baa1

            	 
	
              Level
      IV

            	 	
              BBB

            	 	 	
              Baa2

            	 
	
              Level
      V

            	 	
              BBB-

            	 	 	
              Baa3

            	 
	
              Level
      VI

            	 	
              BB+
      or below

            	 	 	
              Ba1
      or below

            	 

    

     

    provided that if on any day
the Ratings of the Rating Agencies do not coincide for any rating category and
the Level differential is (x) one level, then the higher Rating will be the
applicable Level; (y) two levels, the Level at the midpoint will be the
applicable Level; and (z) more than two levels, the higher/highest of the
intermediate Levels will be the applicable Level.

     

    “Lien”:  any
mortgage, pledge, lien, hypothecation, security interest or other charge,
encumbrance, or other arrangement in the nature of a security interest in
property to secure the payment or performance of Indebtedness or other
obligations of any Person; provided, however, the term
“Lien” shall not mean any easements, rights-of-way, zoning restrictions, leases,
sub-leases, licenses, sublicenses, other restrictions on the use of property,
defects in title to property or other similar encumbrances. 

     

    “Loan
Agreement”:  as specified in the preambles to this
Agreement.

     

    “Material Adverse
Effect”:  a material adverse effect on (a) the business,
property, operations or condition (financial or otherwise) of the Guarantor and
its Restricted Subsidiaries taken as a whole, (b) the validity or
enforceability of this Agreement or any of the other Credit Documents or the
rights or remedies of the Administrative Agent, the Issuing Bank or the Lenders
hereunder or thereunder, or (c) the ability of either of the Credit Parties
to perform obligations on its part under the Credit Documents.

     

    “Materials of Environmental
Concern”:  any gasoline or petroleum (including crude oil or
any fraction thereof) or petroleum products or any hazardous or toxic
substances, materials or wastes, defined or regulated as such in or under any
Environmental Law, including asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.

     

    “Moody’s”:  Moody’s
Investors Service, Inc. and its successors.

     

    “Multiemployer
Plan”:  a Plan that is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.

     

    “Obligations”:  the
collective reference to the (i) all Reimbursement Obligations (including
interest accruing at the then applicable rate provided in this Agreement after
the maturity of the Reimbursement Obligations and after the filing of any
petition in bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding, relating to the Borrower or the Guarantor, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding),
and (ii) all expense reimbursement and indemnity payments, and all other
obligations and liabilities of the Borrower and the Guarantor to the
Administrative Agent, the Issuing Bank, or any Lender, whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred pursuant to this Agreement, any other Credit Document, or any
other document made, delivered or given in connection herewith or therewith
(including all fees, charges and disbursements of counsel to the Administrative
Agent, the Issuing Bank, or to any Lender that are required to be paid pursuant
hereto).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Off-Balance Sheet
Liabilities”:  as to any Person (i) any repurchase obligation
or liability of such Person with respect to notes or accounts receivable sold by
such Person, (ii) any liability of such Person under any sale and leaseback
transactions that do not create a liability on the balance sheet of such Person,
(iii) any liability of such Person under any so-called “synthetic” lease
transaction and (iv) any obligation under any other transaction which is the
functional equivalent of, or takes the place of, a borrowing but which does not
constitute a liability on the balance sheet of such Person.

     

    “Officer’s
Certificate”:  a certificate signed, in the case of the
Borrower or the Guarantor, by a Responsible Officer of the Borrower or the
Guarantor, as the case may be, or if delivered by any other Person, signed by
the chief executive or chief financial officer of such Person, in either case
whose authority to execute such certificate shall be evidenced to the
satisfaction of the Administrative Agent.  When an Officer’s
Certificate is required hereunder to set forth matters relating to any Credit
Party or other Group Member, such Officer’s Certificate may be given in reliance
upon another certificate, or other certificates, and supporting materials, if
any, provided by any duly authorized officer of the applicable Group
Member.

     

    “Operative
Documents”:  as specified in Section 4.1(a)
hereof.

     

    “Opinion of Bond
Counsel”:  an opinion in writing signed by an attorney or firm
of attorneys experienced in the field of municipal bonds whose opinions are
generally accepted by purchasers of municipal bonds.

     

    “PBGC”:  the
Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title
IV of ERISA (or any successor).

     

    “Park and Loan
Transactions”:  any tariff transaction offered by pipelines or
other storage facilities, where the pipelines or other storage facilities allow
the customers to park gas on or borrow gas from the pipelines or other storage
facilities in one period and reclaim gas from or repay gas to the pipelines or
other storage facilities in a subsequent period. 

     

    “Participant”:  as
defined in Section 12.6(b).

     

    “Permitted
Acquisitions”:  as defined in Section 7.7(e).

     

    “Person”:  an
individual, company (including a limited liability company), corporation, firm,
partnership, joint venture, undertaking, association, organization, trust, state
or agency of a state (in each case whether or not having a separate legal
personality).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Plan”:  at a
particular time, any employee benefit plan that is covered by ERISA and in
respect of which the Borrower or the Guarantor or any Commonly Controlled Entity
is (or, if such plan were terminated at such time, would under Section 4069 of
ERISA be deemed to be) an “employer” as defined in Section 3(5) of
ERISA.

     

    “Pledged Bond
Collateral”:  as defined in Section 8.1.

     

    “Pledged
Bonds”:  as defined in Section 3.2.

     

    “Prime Rate” means, on any
day, the per annum rate of interest in effect for such day as publicly announced
from time to time by Bank of America, N.A. as its “Prime Rate,” such rate being
the rate of interest most recently announced within Bank of America, N.A. at its
principal office as its “Prime Rate,” with the understanding that Bank of
America, N.A.’s “Prime Rate” is one of Bank of America, N.A.’s base rates and
serves as the basis upon which effective rates of interest are calculated for
those loans making reference thereto, and is evidenced by the recording thereof
after its announcement in such internal publication or publications as Bank of
America, N.A. may designate.  Any change in Bank of America, N.A.’s
“Prime Rate” as announced by Bank of America, N.A. shall take effect at the
opening of business on the day specified in the public announcement of such
change.

     

    “Properties”:  as
defined in Section 5.16(a).

     

    “Rating
Agencies”:  together, S&P and Moody’s. 

     

    “Ratings”:  the
ratings of the Rating Agencies applicable to the long-term, non-credit enhanced
senior unsecured debt of the Guarantor, as announced by the Rating
Agencies.

     

    “Register”:  as
defined in Section 12.6(d).

     

    “Regulation
U”:  Regulation U of the Board, as the same may be in effect
from time to time, and any successor regulations.

     

    “Regulatory
Body”:  any federal, state or local government, department,
agency, authority or instrumentality and any other public or private
organization, including accrediting bodies, having regulatory jurisdiction and
authority over any Credit Party or any other Group Member or their respective
property or operations.

     

    “Reimbursement
Obligations”:  collectively, all reimbursement payments
required to be made by the Borrower pursuant to Section 3.1, and any other
amounts paid by the Issuing Bank under the Letter of Credit, all fees payable
with respect to the Letter of Credit, and all interest payable in respect of
such reimbursement payments pursuant to the terms of this Agreement and the
other Credit Documents.

     

    “Remarketing
Agent”:  as defined in the Indenture.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Remarketing
Agreement”:  the Remarketing Agreement dated as of the date
hereof between the Borrower and the Remarketing Agent, as defined in the
Indenture.

     

    “Reorganization”:  with
respect to any Multiemployer Plan, the condition that such plan is in
reorganization within the meaning of Section 4241 of ERISA.

     

    “Reportable
Event”:  any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the thirty day notice period is
waived under Sections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC Reg.
§ 4043.

     

    “Required
Lenders”:  at any time, the holders of more than 50% of the
total Aggregate Exposure of all Lenders at such time.

     

    “Requirement of
Law”:  as to any Person, the articles or certificate of
incorporation or organization, by-laws, partnership agreement, limited liability
company agreement, operating agreement, management agreement, or other
organizational or governing documents of such Person, and any constitution,
decree, judgment, legislation, order, ordinance, regulation, rule, statute or
treaty, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.

     

    “Responsible
Officer”:  the chief executive officer, president, chief
financial officer, treasurer or controller of the Guarantor or the Borrower, as
the case may be, but in any event, with respect to financial matters, the chief
financial officer or treasurer of the Guarantor.

     

    “Restricted
Payments”:  as defined in Section 7.5.

     

    “Restricted
Subsidiary”:  any Subsidiary other than an Unrestricted
Subsidiary.

     

    “Revolving Credit
Agreement”:  the Credit Agreement dated as of August 31, 2006,
by and among the Guarantor, AGL Capital Corporation, the lenders parties
thereto, and SunTrust Bank, as administrative agent, as the same may have been,
or may hereafter be, amended, restated, supplemented or otherwise modified and
in effect.

     

    “SEC”:  the
Securities and Exchange Commission, any successor thereto and any analogous
Governmental Authority.

     

    “S&P”:  Standard
& Poor’s Ratings Group and its successors.

     

    “Securitization Facility Attributed
Debt”:  at any time, the aggregate net outstanding amount
theretofore paid to any of the Group Members (without duplication) in respect of
securitization assets (whether accounts receivable, general intangibles,
instruments, documents, chattel paper or other similar assets) sold or
transferred in connection with any securitization financing program established
by any of the Group Members in respect of such securitization assets (it being
the intent of the parties that such Securitization Facility Attributed Debt at
any time outstanding approximate as closely as possible the principal amount of
Indebtedness that would be outstanding at such time under such financing program
if the same were structured as a secured lending arrangement rather than a sale
or securitization arrangement).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Single Employer
Plan”:  any Plan that is covered by Title IV of ERISA, but that
is not a Multiemployer Plan.

     

    “Solvent”:  when
used with respect to any Person, means that, as of any date of determination,
(a) the sum of the assets of such Person will, as of such date, exceed the sum
of the liabilities of such Person as of such date, (b) such Person will be able
to pay its debts as they mature and (c) such Person has sufficient capital to
conduct its business.  For purposes of this definition, (i) “debt”
means liability on a “claim”, and (ii) “claim” means any (x) right to payment,
whether or not such a right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal equitable,
secured or unsecured or (y) right to an equitable remedy for breach of
performance if such breach gives rise to a right to payment, whether or not such
right to an equitable remedy is reduced to judgment, fixed, contingent, matured
or unmatured, disputed, undisputed, secured or unsecured.

     

    “Stated
Amount”:  as specified in the Letter of Credit.

     

    “Subsidiary”:  as
to any Person, a corporation, partnership, limited liability company or other
entity of which shares of stock or other ownership interests having ordinary
voting power (other than stock or such other ownership interests having such
power only by reason of the happening of a contingency) to elect a majority of
the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by such Person.  Unless otherwise qualified, all references to a
“Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary
or Subsidiaries of either or both of the Borrower and the
Guarantor.

     

    “Supplemental
Indenture”:  as defined in the preambles to this
Agreement.

     

    “Syndication
Agent”:  as defined in the first paragraph of this
Agreement.

     

    “Termination
Date”:  the earlier of:  (i) September 6, 2010,
or (ii) the date of any termination of the Facility pursuant to Section
10.2.

     

    “Total
Capitalization”:  at any date, the sum of Consolidated Net
Worth and Consolidated Total Debt of the Group Members at such date, determined
on a consolidated basis in accordance with GAAP.

     

    “Total
Commitments”:  at any time, the aggregate amount of the
Commitments of all Lenders then in effect.  The Total Commitments as
of the Closing Date are $39,576,986.

     

    “Total Extensions of
Credit”:  at any time, the aggregate amount of the Extensions
of Credit of all Lenders outstanding at such time.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Transferee”:  any
Assignee or Participant.

     

    “Trustee”:  as
defined in the preambles to this Agreement.

     

    “Unrestricted
Subsidiary”:  any Subsidiary which (i) is designated as an
Unrestricted Subsidiary in accordance with Section 7.11, and (ii) has not
incurred any Indebtedness that is guaranteed or otherwise supported by the
credit of the Guarantor, the Borrower or any other of their respective
Restricted Subsidiaries (but excluding any such guarantee or other credit
support arrangement pursuant to which the liability of such guarantor or credit
support provider is limited to loan amounts advanced by another Person against
inventory claimed (by rights or claims of offset, ownership or similar claim) by
such guarantor or credit support provider, and such guarantor or credit support
provider is entitled to receive a pro rata interest in such inventory
corresponding to the amounts paid in respect of such inventory).

     

    “Wholly Owned
Subsidiary”:  as to any Person, any other Person all of the
Capital Stock of which (other than directors’ qualifying shares required by law)
is owned by such Person directly and/or through other Wholly Owned
Subsidiaries.

     

    Section
1.2.Other Definitional
Provisions.  (a) Unless otherwise specified therein, all
terms defined in this Agreement shall have the defined meanings when used in the
other Credit Documents or any certificate or other document made or delivered
pursuant hereto or thereto.

     

    (b)As
used herein and in the other Credit Documents, and any certificate or other
document made or delivered pursuant hereto or thereto, (i) accounting terms
relating to any Group Member not defined in Section 1.1 and accounting terms
partly defined in Section 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP; provided, however, that for purposes of
determining compliance with the covenants contained in Article Seven all
accounting terms herein shall be interpreted and all accounting determinations
hereunder shall be made in accordance with GAAP as in effect on the date of this
Agreement and applied on a basis consistent with the application used in the
financial statements referred to in Section 5.1, (ii) the words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without
limitation”, (iii) the word “incur” shall be construed to mean incur, create,
issue, assume, become liable in respect of or suffer to exist (and the words
“incurred” and “incurrence” shall have correlative meanings), (iv) the words
“asset” and “property” shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, Capital Stock, securities, revenues, accounts, leasehold
interests and contract rights, and (v) references to agreements or other
Contractual Obligations shall, unless otherwise specified, be deemed to refer to
such agreements or Contractual Obligations as amended, supplemented, restated or
otherwise modified from time to time.

     

    (c)The
words “hereof”, “herein” and “hereunder” and words of similar import, when used
in this Agreement, shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and references herein to any Sections,
Schedules and Exhibits are to the Sections, Schedules or Exhibits of this
Agreement unless otherwise specified.

     

    (d)The
meanings given to terms defined herein shall be equally applicable to both the
singular and plural forms of such terms.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Article
Two

     

    

     

    Issuance
of Letter of Credit; Fees

     

    Section 2.1.Amount and Terms of Letter of
Credit.  The Issuing Bank agrees, in reliance on the agreements
of the Lenders in Section 2.5 and on the terms and subject to the conditions
hereinafter set forth, to issue the Letter of Credit to the Trustee (i) in
an amount not to exceed $39,000,000 (the “Principal Component”), plus
an amount equal to the sum of 45 days’ interest on the Bonds, computed at a
rate of 12% per annum based on a year of 365 days, notwithstanding the
actual rate borne from time to time by the Bonds (the “Interest Component”) and
(ii) expiring on September 6, 2010, unless otherwise cancelled, terminated
or extended.  

     

    Section 2.2.Reserved.  

     

    Section 2.3.Reserved.   

     

    Section 2.4.Fees.

     

    (a)Letter of Credit
Fees.  The Borrower hereby agrees to pay fees in respect of
this Facility and the Letter of Credit as follows:

     

    (i)On
each L/C Fee Payment Date, the Borrower shall pay to the Administrative Agent,
for the ratable account of the Lenders, a non-refundable fee equal to the
Applicable L/C Fee Rate multiplied by the maximum aggregate Stated Amount of the
Letter of Credit for the quarterly period (or portion thereof) then ended;
and

     

    (ii)On
each L/C Fee Payment Date, the Borrower shall pay to the Issuing Bank a
non-refundable issuance fee for the Letter of Credit outstanding during the
quarterly period (or portion thereof) then ended in the amounts separately
agreed by the Credit Parties and the Issuing Bank.

     

    Amounts
payable under this Section 2.4(a) shall be payable in immediately available
funds in arrears based on a 360-day year and the actual number of days
elapsed.

     

    (b)Drawing Fees.  The
Borrower hereby agrees to pay to the Issuing Bank, upon each drawing by a
Trustee under a Letter of Credit, the sum of $125 or such other amount as shall
at the time of such drawing be the charge which the Issuing Bank is making for
drawings on a similar Letter of Credit.

     

    (c)Transfer Fees. The Borrower
hereby agrees to pay to the Issuing Bank, upon each transfer of a Letter of
Credit in accordance with its terms, such amount as shall at the time of such
transfer be the charge which the Issuing Bank is making for transfers of a
similar Letter of Credit.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (d)Other Letter of Credit
Fees.  The Borrower agrees to pay the Issuing Bank’s customary
transaction charges, including wire charges and service charges, on any account
established with the Issuing Bank in order to perform its obligations under this
Agreement and the Letter of Credit.

     

    (e)Other Fees.  The
Borrower shall pay to the Administrative Agent (i) for its own account, the
annual agency fees from time to time as agreed to by the Borrower and the
Administrative Agent, and (ii) for the account of the Lenders, upfront fees
payable on the Closing Date in an amount equal to 0.05% of each Lender’s
Commitment as set forth herein.

     

    Section 2.5.Participating
Interests.  Each Lender severally and not jointly agrees with
the Issuing Bank that, upon the issuance of the Letter of Credit, it shall
automatically purchase and be deemed to have purchased from the Issuing Bank an
undivided percentage participating interest, to the extent of such Lender’s
Applicable Commitment Percentage, in the Letter of Credit issued by, and all
Reimbursement Obligations owed to, the Issuing Bank in connection with the
Letter of Credit, up to a total amount not to exceed such Lender’s
Commitment.  On any failure by the Borrower or the Guarantor to pay
any Reimbursement Obligation in connection with the Letter of Credit at the time
required in Article Three, or if the Issuing Bank is required at any time to
return to the Borrower or the Guarantor or to a trustee, receiver, liquidator,
custodian or other Person any portion of any payment by the Borrower or the
Guarantor of any Reimbursement Obligation in connection with the Letter of
Credit, the Issuing Bank shall promptly give notice of same to each L/C
Participant, and the Issuing Bank shall have the right to require each L/C
Participant to fund its participation in such Reimbursement
Obligation.  Each L/C Participant shall pay to the Issuing Bank an
amount equal to such L/C Participant’s Applicable Commitment Percentage of such
unpaid or returned Reimbursement Obligation not later than the Business Day it
receives notice from the Issuing Bank to such effect, if such notice is received
before 2:00 p.m., or not later than the following Business Day if such notice is
received after 2:00 p.m.  If an L/C Participant fails to pay timely
such amount to the Issuing Bank, it shall also pay to the Issuing Bank interest
on such amount accrued from the date payment of such amount was made by the
Issuing Bank to the date of such payment by the L/C Participant at a rate per
annum equal to the Prime Rate in effect for each such day and only after such
payment shall such L/C Participant be entitled to receive its Applicable
Commitment Percentage of each payment received on the relevant Reimbursement
Obligation (including interest paid thereon).  The several obligations
of the L/C Participant to the Issuing Bank hereunder shall be absolute,
irrevocable and unconditional under any and all circumstances whatsoever and
shall not be subject to any set-off, counterclaim or defense to payment any L/C
Participant may have or have had against the Borrower, the Guarantor, the
Issuing Bank, the Administrative Agent, or any other Lender or other Person
whatsoever, including without limitation, any defense based on the failure of
the demand for payment under the Letter of Credit to conform to the terms of
such Letter of Credit or the legality, validity, regularity or enforceability of
the Letter of Credit, and including without limitation, those resulting from the
Issuing Bank’s own simple or contributory negligence.  Without
limiting the generality of the foregoing, such obligations shall not be affected
by any Default, Event of Default or Bond Insurer Event of Default, and each
payment by an L/C Participant hereunder shall be made without any offset,
abatement, withholding or reduction whatsoever.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section 2.6.Additional
Payments.  If any change in any law or regulation or in the
interpretation thereof by any court or administrative or governmental authority
charged with the administration thereof, or in generally accepted accounting
principles, shall either (i) impose, modify or deem applicable any reserve,
special deposit or similar requirement against the Letter of Credit issued by
the Issuing Bank or subject to any participation by any Lender, or
(ii) impose on the Issuing Bank or any Lender any other condition relating,
directly or indirectly, to this Agreement, the Letter of Credit, and the result
of any event referred to in the preceding clause (i) or (ii) shall be to
increase the cost to the Issuing Bank or any Lender of issuing or maintaining,
or participating in, the Letter of Credit or its obligations with respect
thereto, then upon demand by the Issuing Bank or such Lender, as the case may
be, the Borrower hereby agrees to pay promptly to the Issuing Bank or such
Lender, as the case may be, from time to time as specified by the Issuing Bank
or such Lender, as the case may be, such additional amounts as shall be
sufficient to compensate the Issuing Bank or such Lender, as the case may be,
for such increased cost.  A certificate of the Issuing Bank or such
Lender, as the case may be, claiming compensation under this section and setting
forth the additional amount or amounts to be paid to it hereunder shall be
conclusive absent manifest error.  In determining any such amount, the
Issuing Bank or such Lender, as the case may be, may use any reasonable
averaging and attribution methods.

     

    Section 2.7.Capital
Adequacy.  If, after the date of this Agreement, the Issuing
Bank or any Lender shall have determined that the adoption or implementation of
any applicable law, rule or regulation regarding capital adequacy, or any change
therein, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by the Issuance Bank or
such Lender, as the case may be, with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on the Issuing Bank’s or such Lender’s capital, with respect to this
Agreement, or the Letter of Credit or participations in the Letter of Credit, or
otherwise, as a consequence of its obligations hereunder and under or with
respect to the Letter of Credit to a level below that which the Issuing Bank or
such Lender, as the case may be, could have achieved but for such adoption,
change or compliance (taking into consideration its policies with respect to
capital adequacy) by an amount deemed by the Issuing Bank or such Lender, as the
case may be, to be material, then from time to time, promptly upon demand by the
Issuing Bank, the Borrower hereby agrees to pay such additional amount or
amounts as will compensate the Issuing Bank or such Lender, as the case may be,
for such reduction.  A certificate of the Issuing Bank or such Lender,
as the case may be, claiming compensation under this section and setting forth
the additional amount or amounts to be paid to it hereunder shall be conclusive
absent manifest error.  In determining any such amount, the Issuing
Bank or such Lender, as the case may be, may use any reasonable averaging and
attribution methods.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section 2.8.Obligations of Issuing
Bank.  Notwithstanding anything to the contrary contained
herein:

     

    (a)the
Issuing Bank shall not have any obligation to issue the Letter of Credit
if:

     

    (i)any
order, judgment or decree of any Governmental Authority or arbitrator shall by
its terms purport to enjoin or restrain the Issuing Bank from issuing such
Letter of Credit, or any law applicable to the Issuing Bank or any request or
directive (whether or not having the force of law) from any Governmental
Authority with jurisdiction over the Issuing Bank shall prohibit, or request
that the Issuing Bank refrain from, the issuance of Letter of Credit generally
or the Letter of Credit in particular or shall impose upon the Issuing Bank with
respect to the Letter of Credit any restriction, reserve or capital requirement
(for which the Issuing Bank is not otherwise compensated hereunder) not in
effect on the Closing Date, or shall impose upon the Issuing Bank any
unreimbursed loss, cost or expense that was not applicable on the Closing Date
and which the Issuing Bank in good faith deems material to it; and

     

    (ii)the
issuance of such Letter of Credit would violate one or more documented policies
of the Issuing Bank generally applicable to customers of the Issuing Bank
similar to the Borrower or the Guarantor;

     

    (b)the
Issuing Bank shall not have any obligation to amend the Letter of Credit
if:  (i) the Issuing Bank would have no obligation at such time
to issue such Letter of Credit in its amended form under the terms hereof; or
(ii) the beneficiary of the Letter of Credit does not accept the proposed
amendment to the Letter of Credit; and

     

    (c)the
Issuing Bank shall act on behalf of all L/C Participants with respect to the
Letter of Credit and the documents associated therewith, and the Issuing Bank
shall have all of the benefits and immunities:  (i) provided to
the Administrative Agent in Article Eleven with respect to any acts taken or
omissions suffered by the Issuing Bank in connection with the Letter of Credit
and the documents pertaining thereto as fully as if the term “Administrative
Agent” as used in Article Eleven included the Issuing Bank with respect to such
acts or omissions; and (ii) as additionally provided herein with respect to
the Issuing Bank.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Article
Three

     

    

     

    Agreement
to Repay Letter of Credit Drawings; Pledged Bonds

     

    Section 3.1.Reimbursement.  The
Borrower hereby agrees as follows:

     

    (a)The
Borrower shall pay or cause to be paid to the Issuing Bank (or, to the extent
the L/C Participants have funded their respective participations in such
drawing, to the Administrative Agent on behalf of such L/C Participants and
the Issuing Bank) immediately after payment is made under the Letter of Credit
pursuant to any “A Drawing” an amount equal to the amount of such
“A Drawing” under such Letter of Credit.

     

    (b)The
Borrower shall pay or cause to be paid (i) to the Issuing Bank (or, to the
extent the L/C Participants have funded their respective participations in
such drawing, to the Administrative Agent on behalf of such
L/C Participants and the Issuing Bank) immediately after payment is made
under the Letter of Credit pursuant to any “B Drawing” with respect to the
payment of principal due on the Bonds, an amount equal to the amount of such
“B Drawing” under such Letter of Credit, and (ii) to the Issuing Bank
(or, to the extent the L/C Participants have funded their respective
participations in such drawing, to the Administrative Agent on behalf of such
L/C Participants and the Issuing Bank) after payment is made under the
Letter of Credit pursuant to any “C Drawing” with respect to the payment of
principal due on the Bonds, an amount equal to the amount of such
“C Drawing” under such Letter of Credit.  Amounts due with
respect to any “C Drawing” shall be due and payable on the date which is
the earliest of (i) 367 days from the date of such drawing,
(ii) the stated expiration date of the Letter of Credit, or (iii) the
date on which the Bonds have been successfully remarketed and the remarketing
proceeds have been deposited and paid to the Bank according to the provisions of
the related Indenture.

     

    (c)The
Borrower shall pay or cause to be paid to the Issuing Bank (or, to the extent
the L/C Participants have funded their respective participations in such
drawing, to the Administrative Agent on behalf of such L/C Participants and
the Issuing Bank) immediately after any payment is made under the Letter of
Credit pursuant to any “B Drawing” or “C Drawing” with respect to the
payment of interest due on the Bonds, an amount equal to the amount of such
“B Drawing” or “C Drawing” used to pay interest on the
Bonds.

     

    (d)The
Borrower shall pay or cause to be paid to the Issuing Bank (or, to the extent
the L/C Participants have funded their respective participations in such
drawing, to the Administrative Agent on behalf of such L/C Participants and
the Issuing Bank) immediately after any payment is made under the Letter of
Credit pursuant to any “D Drawing” with respect to the payment (whether at
maturity or upon the acceleration or redemption of the Bonds as a whole) of the
total unpaid principal of and interest on the Bonds, an amount equal to such
amount so paid under such Letter of Credit.

     

    (e)The
Borrower shall pay or cause to be paid to the Issuing Bank (or, to the extent
the L/C Participants have funded their respective participations in the
respective amounts, to the Administrative Agent on behalf of such
L/C Participants and the Issuing Bank) interest on any and all amounts
required to be paid as provided in this Section 3.1 from and after the due
date thereof until payment in full, payable on demand, at the Prime Rate plus 2%
per annum; provided that, interest on any and all amounts required to be paid
with respect to any “C Drawing” under Section 3.1(b) above shall
accrue from the date of such drawing at the Prime Rate plus 2% per annum and
shall be payable in arrears on the first day of each month and on the date of
reimbursement of such “C Drawing.”  If any payment under the
Letter of Credit with respect to an “A Drawing,” a “B Drawing,” a
“C Drawing” or a “D Drawing” shall be reimbursed on the same date such
payment is made by the Issuing Bank, no interest shall be payable on the
reimbursed amount.

     

    (f)So
long as any of the Bonds remain outstanding, if the Issuing Bank is not timely
reimbursed for amounts drawn on the Letter of Credit for payment of regularly
scheduled principal and interest on the Bonds, the Administrative Agent, on
behalf of the Issuing Bank and the Lenders, may direct the applicable Trustee to
present a claim under the Bond Insurance Policy in accordance with the claims
procedures set forth in the Supplemental Indenture, and the Administrative Agent
and the Issuing Bank will cooperate with such Trustee and the Bond Insurer to
assign and subrogate their right to payment from the applicable Issuer to the
Bond Insurer upon payment of such claim.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section 3.2.Pledge of
Bonds.  As security for the payment of the obligations of the
Borrower pursuant to Section 3.1(b) above and as more fully described in
Article Eight hereof, the Borrower has pledged to the Administrative Agent, for
the benefit of the Issuing Bank and the Lenders, and granted to the
Administrative Agent, for the benefit of the Issuing Bank and the Lenders, a
security interest in, all its rights, title and interests in and to all Bonds
delivered (or, in the case of Bonds held under a book-entry system, reflected on
the records of such Bonds as more fully described in Article Eight hereof) to
the Issuing Bank in connection with “C Drawings” (herein called “Pledged
Bonds”).  Any amounts from time to time owing to the Issuing
Bank and the Lenders pursuant to Section 3.1(b) above may be prepaid
(i) at any time by the Borrower on one Business Day’s notice stating the
amount to be prepaid (which shall be $5,000 or an integral multiple thereof) and
(ii) at any time on behalf of the Borrower on one Business Day’s notice
from the Borrower directing the Issuing Bank to deliver or to cause the
applicable Trustee to deliver (or, in the case of Bonds held under a book-entry
system, reflected on the records of such Bonds as more fully described in
Article Eight hereof) a specified principal amount of Pledged Bonds held by or
on behalf of the Issuing Bank for sale.  Upon payment to the Issuing
Bank and the Lenders of the amounts to be prepaid pursuant to
Section 3.1(b) above, together with accrued interest, to the date of such
prepayment on the amount to be prepaid, the outstanding obligations of the
Borrower under Section 3.1(b) above shall be reduced by the amount of such
prepayment, interest shall cease to accrue on the amount prepaid and the
Administrative Agent shall release (or shall be deemed to have released) from
the pledge and security interest created hereunder a principal amount of Pledged
Bonds equal to the amount of such prepayment.  Such Bonds shall be
delivered to the Borrower on payment to the Issuing Bank and the Lenders as
aforesaid or to the Tender Agent for sale pursuant to the
Indenture.  Notwithstanding the foregoing, no prepayment of amounts
owing to the Issuing Bank and the Lenders pursuant to Section 3.1(b) may be
made, and no Pledged Bonds shall be released, during the period commencing two
Business Days prior to an interest payment date with respect to the Bonds and
ending at the close of business on such interest payment date.

     

    Section
3.3.Intentionally Omitted.

     

    Section 3.4.Reinstatement of Letter of
Credit.  After any “A Drawing” or “C Drawing,” the
obligation of the Issuing Bank to honor demands for payment under the Letter of
Credit with respect to payment of interest (but not principal) on the Bonds will
automatically and immediately be reinstated up to the total amount specified
therein, upon the terms and conditions set forth in such Letter of Credit; provided, however, that in
no event shall such Letter of Credit be reinstated following any drawing under
such Letter of Credit pertaining to the payment of the principal of or interest
on the Bonds as a result of the acceleration or redemption of the
Bonds.  Upon the reimbursement of the Issuing Bank by the Borrower in
accordance with Section 3.1(b) hereof and the release by the Administrative
Agent, on behalf of the Issuing Bank and the Lenders pursuant to
Section 3.2 hereof, of any Pledged Bonds, the obligation of the Issuing
Bank to honor demands for payment under such Letter of Credit with respect to
payment of the principal of the Bonds will be automatically and immediately
reinstated up to the total amount specified therein upon the terms and
conditions set forth in such Letter of Credit.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section 3.5.Credit for Amount Paid on
Bonds.  The Borrower shall (i) receive a credit against
its obligation under this Agreement to reimburse payments of interest pursuant
to Section 3.1(c) above to the extent of any amounts actually paid to or
for the benefit of the Issuing Bank and the Lenders in respect of the interest
due on any Pledged Bonds and (ii) receive a credit against its
Reimbursement Obligations under this Agreement pursuant to Section 3.1(b)
above to the extent of any amounts actually paid to or for the benefit of the
Issuing Bank and the Lenders in respect of the principal due on any Pledged
Bonds.

     

    Section 3.6.Default Rate.  If
payment of any Reimbursement Obligation or any other amounts to be paid by the
Borrower under this Agreement is not made when due after the expiration of any
grace period applicable to such payment, such Reimbursement Obligation and any
such amount shall bear interest until such Reimbursement Obligation or other
amount then due is paid in full, which the Borrower agrees to pay on demand, at
a rate per annum equal to the Prime Rate plus an additional 2% per annum.

     

    Section 3.7.Computation of Interest and
Fees.  Interest and fees payable hereunder shall be computed on
the basis of a 360-day year and the actual number of days elapsed.  If
the date specified for any payment hereunder is not a Business Day, such payment
shall be made on the next following Business Day, and interest shall be paid at
the rate provided for herein on any such payment to the Business Day on which
such payment is actually made.

     

    Section 3.8.Payments.  (a) All
payments of Reimbursement Obligations and all interest, fees and other amounts
payable by the Borrower under the Credit Documents (excluding any payments to be
made directly to the Issuing Bank or any Lender under Section 2.6 or 2.7) shall
be made by the Borrower to the Issuing Bank or to the Administrative Agent, for
the benefit of the Lenders and the Issuing Bank entitled to such payments, as
provided herein, in immediately available funds on the due date thereof no later
than 2:00 P.M. in the account designated by the Issuing Bank or the
Administrative Agent, as the case may be, or such other location as the Issuing
Bank or the Administrative Agent may designate in writing to the Borrower, free
and clear of any defenses, rights of set-off, counterclaim, recoupment or
withholding.  Any payments received by the Administrative Agent from
the Borrower after the time specified in the preceding sentence shall be deemed
to have been received on the next Business Day.  The Administrative
Agent will, on the same day each payment is received or deemed to have been
received in accordance with this Section 3.8, cause to be distributed like funds
to the Issuing Bank and each Lender owed any amount hereunder for which such
payment was received by the Administrative Agent, pro rata based on the
respective amounts then owing to each Lender. 

     

    (b)If at
any time funds received by the Administrative Agent and the Issuing Bank are
insufficient to pay fully all Reimbursement Obligations then due and payable
hereunder, such funds shall be applied (i) first, towards payment of those
Reimbursement Obligations representing interest and fees then due and payable
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due and payable to such parties, and
(ii) second, towards payment of all remaining Reimbursement Obligations,
ratably among the parties entitled thereto in accordance with the amounts then
due and payable to such parties.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (c)If any
Lender shall, by exercising any right of set-off or counterclaim or otherwise,
obtain payment in respect of any Reimbursement Obligations that would result in
such Lender receiving payment of a greater proportion of the aggregate amount of
its Reimbursement Obligations than the proportion received by any other Lender,
then the Lender receiving such greater proportion shall purchase (for cash at
face value) participations in the Reimbursement Obligations of other Lenders to
the extent necessary so that the benefit of all such payments shall be shared by
the Lenders ratably in accordance with the aggregate amount of Reimbursement
Obligations; provided, that (i) if any such participations are purchased and all
or any portion of the payment giving rise thereto is recovered, such
participations shall be rescinded and the purchase price restored to the extent
of such recovery, without interest, and (ii) the provisions of this Section
3.8(c) shall not be construed to apply to any payment made by the Borrower
pursuant to and in accordance with the express terms of this Agreement or any
payment obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Reimbursement Obligations to any assignee or
participant other than to the Borrower, the Guarantor or any other Group Member
or their Affiliates.  The Borrower consents to the foregoing and
agrees, to the extent it may effectively do so under applicable law, that any
Lender acquiring a participation pursuant to the foregoing arrangements may
exercise against the Borrower rights of set-off and counterclaim with respect to
such participation as fully as if such Lender were a direct creditor of the
Borrower in the amount of such participation.

     

    (d)Unless
the Administrative Agent shall have received notice from the Borrower prior to
the date on which any payment is due to the Issuing Bank or the Administrative
Agent for the account of the Lenders or the Issuing Bank hereunder that the
Borrower will not make such payment, the Administrative Agent may assume that
the Borrower has made such payment on such date in accordance herewith and may,
in reliance upon such assumption, distribute to the Lenders or the Issuing Bank,
as the case may be, the amount or amounts due.  In such event, if the
Borrower has not in fact made such payment, then each of the Lenders or the
Issuing Bank, as the case may be, severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender or Issuing Bank with interest thereon, for each day from and including
the date such amount is distributed to it to but excluding the date of payment
to the Administrative Agent, at the rate determined by the Administrative Agent
in accordance with banking industry rules on interbank
compensation.

     

    (e)If any
Lender shall fail to make any payment required to be made by it hereunder, then
the Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Administrative
Agent for the account of such Lender to satisfy such Lender’s obligations under
such Sections until all such unsatisfied obligations are fully
paid.

     

    Section 3.9.Withholding
Taxes.  (a) Payments Free of
Withholding.  Except as otherwise required by law, each payment
by either Credit Party to the Issuing Bank, any Lender or the Administrative
Agent under this Agreement or any other Credit Document shall be made without
withholding for or on account of any present or future taxes imposed by or
within the jurisdiction in which such Credit Party is incorporated, any
jurisdiction from which such Credit Party makes any payment, or (in each case)
any political subdivision or taxing authority thereof or therein, excluding, in
the case of the Issuing Bank, any Lender and the Administrative Agent, the
following taxes:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (i)taxes
imposed on, based upon, or measured by such Lender’s, the Issuing Bank’s or the
Administrative Agent’s net income or profits, and branch profits, franchise and
similar taxes imposed on it;

     

    (ii)taxes
imposed on such Lender, the Issuing Bank or the Administrative Agent as a result
of a present or former connection between the taxing jurisdiction and such
Lender, the Issuing Bank or Administrative Agent, or any affiliate thereof, as
the case may be, other than a connection resulting solely from the transactions
contemplated by this Agreement;

     

    (iii)taxes
imposed as a result of the transfer by such Lender, the Issuing Bank or the
Administrative Agent of its interest in this Agreement or any other Credit
Document or a designation by such Lender, the Issuing Bank or the Administrative
Agent of a new lending office (other than taxes imposed as a result of any
change in treaty, law or regulation after such transfer of such Lender’s, the
Issuing Bank’s or the Administrative Agent’s interest in this Agreement or any
other Credit Document or designation of a new lending office);

     

    (iv)taxes
imposed by the United States of America (or any political subdivision thereof or
tax authority therein) upon any Lender, the Issuing Bank or the Administrative
Agent organized under the laws of a jurisdiction outside of the United States,
except to the extent that such tax is imposed as a result of any change in
applicable law, regulation or treaty after the date hereof, in the case of each
Lender, the Issuing Bank or the Administrative Agent originally a party hereto
or, in the case of any Lender becoming a party hereto after the Closing Date,
after the date on which it becomes a Lender; or

     

    (v)taxes
which would not have been imposed but for (a) the failure of any Lender, Issuing
Bank, or the Administrative Agent, as the case may be, to provide (x) the
applicable forms prescribed by the Internal Revenue Service, as required by this
Section 3.9, or (y) any other form, certification, documentation or proof which
is reasonably requested by either Credit Party, or (b) a determination by a
taxing authority or a court of competent jurisdiction that a form,
certification, documentation or other proof provided by such Lender, the Issuing
Bank or the Administrative Agent to establish an exemption from such tax,
assessment or other governmental charge is false;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (all such
present or future taxes, excluding only the taxes described in the preceding
clauses (i) through (v), being hereinafter referred to as “Indemnified
Taxes”).  If any such withholding is so required, the
applicable Credit Party shall make the withholding, pay the amount withheld to
the appropriate governmental authority before penalties attach thereto or
interest accrues thereon and forthwith pay such additional amount as may be
necessary to ensure that the net amount actually received by each Lender, the
Issuing Bank and the Administrative Agent is free and clear of such Indemnified
Taxes (including Indemnified Taxes on such additional amount) and is equal to
the amount that such Lender, the Issuing Bank or the Administrative Agent (as
the case may be) would have received had withholding of any Indemnified Tax not
been made.  If the applicable Credit Party pays any Indemnified Taxes,
or any penalties or interest in connection therewith, it shall deliver official
tax receipts evidencing the payment or certified copies thereof, or other
evidence of payment if such tax receipts have not yet been received by the
applicable Credit Party (with such tax receipts to be delivered within fifteen
(15) days after being actually received), to the Lender, the Issuing Bank or the
Administrative Agent on whose account such withholding was made (with a copy to
the Administrative Agent if not the recipient of the original) within fifteen
(15) days of such payment.  If the Administrative Agent or the Issuing
Bank or any Lender pays any Indemnified Taxes, or any penalties or interest in
connection therewith, the applicable Credit Party shall reimburse the
Administrative Agent or the Issuing Bank or Lender for the payment on
demand.  Such Lender, Issuing Bank or the Administrative Agent shall
make written demand on the applicable Credit Party for reimbursement hereunder
no later than ninety (90) days after the earlier of (i) the date on which such
Lender, the Issuing Bank or the Administrative Agent makes payment of the
Indemnified Taxes, penalties and interest, and (ii) the date on which the
relevant taxing authority or other governmental authority makes written demand
upon such Lender, the Issuing Bank or the Administrative Agent for payment of
the Indemnified Taxes, penalties and interest.  Any such demand shall
describe in reasonable detail such Indemnified Taxes, penalties or interest,
including the amount thereof if then known to such Lender, the Issuing Bank, or
the Administrative Agent, as the case may be. 

     

    (b)U.S. Withholding Tax
Exemptions.  Upon the written request of the Borrower or the
Administrative Agent, each Lender or the Issuing Bank that is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code) shall
submit to the Borrower and the Administrative Agent, promptly after such
request, two duly completed and signed copies of either Form W-8BEN or any
successor form (entitling such Lender or the Issuing Bank to a complete
exemption from withholding under the Code on all amounts to be received by such
Lender or the Issuing Bank, including fees, pursuant to the Credit Documents) or
Form W-8ECI or any successor form (relating to all amounts to be received by
such Lender or the Issuing Bank, including fees, pursuant to the Credit
Documents) of the United States Internal Revenue Service, and any other form of
the United States Internal Revenue Service reasonably necessary to accomplish
exemption from withholding obligations or to facilitate the Administrative
Agent’s performance under this Agreement.  Thereafter and from time to
time, each such Lender or the Issuing Bank shall submit to the Borrower and the
Administrative Agent such additional duly completed and signed copies of such
forms (or such successor forms as shall be adopted from time to time by the
relevant United States taxing authorities) as may be required under then-current
United States law or regulations to avoid United States withholding taxes on
payments in respect of all amounts to be received by such Lender or the Issuing
Bank, including fees, pursuant to the Credit Documents.  Upon the
request of the Borrower, each Lender or the Issuing Bank that is a United States
person shall submit to the Borrower a certificate to the effect that it is such
a United States person and is exempt from information reporting under Section
6049 of the Code and backup withholding under Section 3406 of the Code.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (c)Inability of Lender to Submit
Forms.  If any Lender or the Issuing Bank determines in good
faith, as a result of any change in applicable law, regulation or treaty, or in
any official application or interpretation thereof, that (i) it is unable to
submit to the Borrower or Administrative Agent any form or certificate that such
Lender or the Issuing Bank is obligated to submit pursuant to paragraph (b) of
this Section 3.9, (ii) it is required to withdraw or cancel any such form or
certificate previously submitted, or (iii) any such form or certificate
otherwise becomes ineffective or inaccurate, such Lender or the Issuing Bank
shall promptly notify the Borrower and Administrative Agent of such fact, and
the Lender or the Issuing Bank shall to that extent not be obligated to provide
any such form or certificate and will be entitled to withdraw or cancel any
affected form or certificate, as applicable. 

     

    (d)Refund of
Taxes.  If any Lender, the Issuing Bank or the Administrative
Agent becomes aware that it has received a refund of any Indemnified Tax with
respect to which either Credit Party has paid any amount pursuant to paragraph
(a) of this Section 3.9, such Lender, the Issuing Bank or the Administrative
Agent shall pay the amount of such refund (including any interest received with
respect thereto) to the applicable Credit Party within fifteen (15) days after
receipt thereof.  A Lender, the Issuing Bank, or the Administrative
Agent shall provide, at the sole cost and expense of the applicable Credit
Party, such assistance as the applicable Credit Party may reasonably request in
order to obtain such a refund; provided, however, that neither the
Administrative Agent nor any Lender or the Issuing Bank shall in any event be
required to disclose any information to either Credit Party with respect to the
overall tax position of the Administrative Agent or the Issuing Bank or such
Lender.

     

    Section 3.10.Character of Obligations
Hereunder.  Each Credit Party agrees for the benefit of the
Administrative Agent, the Issuing Bank and each Lender that, notwithstanding any
provision of any other Operative Document, the obligations of the Borrower and
the Guarantor under this Agreement and each other Credit Document shall be
absolute, unconditional and irrevocable and shall be performed strictly in
accordance with the terms of this Agreement and each applicable other Credit
Document under all circumstances whatsoever (other than the defense of final,
indefeasible payment in accordance with this Agreement), including, without
limitation, the following circumstances:

     

    (a)any
lack of validity or enforceability of any of the Credit Documents;

     

    (b)any
amendment or waiver of or any consent to depart from all or any of the
provisions of any of the Credit Documents;

     

    (c)the
existence of any claim, set-off, defense or other right either Credit Party may
have or claim at any time against a beneficiary of the Letter of Credit (or any
person for whom a beneficiary may be acting), the Issuing Bank, any Lender or
any other Person, whether in connection with this Agreement, another Operative
Document or any unrelated transaction;

     

    (d)any
statement or any other document presented under a Letter of Credit proving to be
forged, fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (e)payment
by the Issuing Bank under a Letter of Credit against presentation to the Issuing
Bank of a draft or certificate that does not comply with the terms of the Letter
of Credit; or

     

    (f)any
other act or omission to act or delay of any kind by the Issuing Bank, any
Lender or any other Person or any other event or circumstance whatsoever that
might, but for the provisions of this Section 3.10, constitute a legal or
equitable discharge of either Credit Party’s obligations hereunder or any other
Credit Document.

     

    Neither
the Administrative Agent, the Issuing Bank, nor the Lenders shall have any
liability or responsibility by reason of or in connection with the issuance or
transfer of the Letter of Credit or any payment or failure to make any payment
thereunder (irrespective of any of the circumstances referred to above), or any
error, omission, interruption, loss or delay in transmission or delivery of any
draft, notice or other communication under or relating to the Letter of Credit
(including any document required to make a drawing thereunder), any error in
interpretation of technical terms or any consequence  arising from
causes beyond the control of the Issuing Bank; provided, that the foregoing
shall not be construed to excuse the Issuing Bank from liability to the Borrower
to the extent of any actual direct damages (as opposed to special, indirect
(including claims for lost profits or other consequential damages), or punitive
damages, claims in respect of which are hereby waived by the Borrower to the
extent permitted by applicable law) suffered by the Borrower that are caused by
the Issuing Bank’s failure to exercise due care when determining whether drafts
or other documents presented under a Letter of Credit comply with the terms
thereof.  The parties hereto expressly agree, that in the absence of
gross negligence or willful misconduct on the part of the Issuing Bank (as
finally determined by a court of competent jurisdiction), the Issuing Bank shall
be deemed to have exercised due care in each such determination.  In
furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented that appear on their
face to be in substantial compliance with the terms of a Letter of Credit, the
Issuing Bank may, in its sole discretion, either accept and make payment upon
such documents without responsibility for further investigation, regardless of
any notice or information to the contrary, or refuse to accept and make payment
upon such documents if such documents are not in strict compliance with the
terms of such Letter of Credit.

     

    Section 3.11.ISP98.  Unless
otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of
Credit is issued, the Letter of Credit shall be subject to the International
Standby Practices 1998 (“ISP98”), International
Chamber of Commerce Publication No. 590, and as to matters not governed by
ISP98, shall be governed by and construed in accordance with the laws of the
State of New York.

     

    Article
Four

     

    

     

    Conditions
Precedent to Issuance of Letter of Credit

     

    Section 4.1.Conditions.  The
Issuing Bank will issue the Letter of Credit on the date the Bonds are
remarketed and sold to the purchaser(s) thereof, provided that (i) all of
the following conditions are met as of each such date to the satisfaction of the
Administrative Agent on behalf of the Lenders and (ii) such request for
issuance occurs not later than September 4, 2008:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (a)Delivery of the Bonds and Operative
Documents.  This Agreement, the Indenture and Supplemental
Indenture with respect to the Bonds, the Tender Agent Agreement (if a Tender
Agent Agreement is required pursuant to the Indenture or Supplemental Indenture)
with respect to the Bonds, the Bond Insurance Policy, and the Remarketing
Agreement with respect to the Bonds (collectively, the “Operative Documents”) shall
have been executed and delivered by the parties thereto, each in form and
substance satisfactory to the Administrative Agent and the Issuing
Bank.  The Administrative Agent shall have received an executed or
conformed copy of each of the applicable Operative Documents.

     

    (b)No Material Adverse
Change.  Since December 31, 2007, no events or conditions
have occurred or changed or exists that have had or could reasonably be expected
to have a Material Adverse Effect.

     

    (c)No
Litigation.  There shall be no actions, suits or proceedings or
any governmental investigations or arbitrations, in each case pending or, to the
knowledge of either Credit Party, threatened against or affecting it or its
properties, or any Restricted Subsidiaries or their respective properties,
before any courts or arbitrators or governmental departments, commissions,
boards, bureaus, agencies or instrumentalities which, if determined adversely to
such Credit Parties or Restricted Subsidiaries, either singly or taken together,
could reasonably be expected to have a Material Adverse Effect.

     

    (d)No Default.  On
each Date of Issuance, both before and after giving effect to the issuance of
the Letter of Credit and the Operative Documents, there shall exist no Default
or Event of Default.

     

    (e)Representations and
Warranties.  On each Date of Issuance and after giving effect
to the issuance of the Letter of Credit and the Operative Documents, all
representations and warranties of the Credit Parties contained herein, in the
other Operative Documents or otherwise made in writing in connection herewith,
shall be true and correct in all material respects with the same force and
effect as though such representations and warranties had been made on and as of
such date.

     

    (f)Credit Parties’
Certificate.  There shall have been delivered to the
Administrative Agent a certificate of a Responsible Officer of each Credit
Party, dated as of each Date of Issuance, to the effect that:

     

    (i)since
December 31, 2007, no events or conditions have occurred or changed or
exist that have had or could reasonably be expected to have a Material Adverse
Effect;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (ii)there
are no actions, suits or proceedings, or any governmental investigations or
arbitrations, in each case pending or, to the knowledge of either Credit Party,
threatened against or affecting it or its properties, or any Restricted
Subsidiaries or their respective properties, before any courts or arbitrators or
governmental departments, commissions, boards, bureaus, agencies or
instrumentalities which, if determined adversely to such Credit Parties or
Restricted Subsidiaries, either singly or taken together, could reasonably be
expected to have a Material Adverse Effect;

     

    (iii)on
the Date of Issuance, both before and after giving effect to the issuance of the
Letter of Credit and the related Operative Documents, there shall exist no
Default or Event of Default;

     

    (iv)on
the Date of Issuance, both before and after giving effect to the issuance of the
Letter of Credit and the related Operative Documents, all representations and
warranties of the Credit Parties contained herein, in the other Operative
Documents or otherwise made in writing in connection herewith shall be true and
correct in all material respects with the same force and effect as though such
representations and warranties had been made on and as of such date;
and

     

    (v)all of
the conditions to the issuance of the Letter of Credit specified in this
Section 4.1 have been satisfied as of such date.

     

    (g)Opinion of Credit Parties’
Counsel.  There shall have been delivered to the Administrative
Agent an opinion of Kilpatrick Stockton LLP, in its capacity as counsel to the
Credit Parties, dated the Closing Date and addressed to the Administrative
Agent, the Issuing Bank and the Lenders, which opinion shall be in form and
substance satisfactory to the Administrative Agent and the Issuing Bank and
shall cover such matters as the Administrative Agent and the Issuing Bank may
reasonably request.

     

    (h)Opinion of Bond
Counsel.  There shall have been delivered to the Administrative
Agent opinions (or signed copies of such opinions together with satisfactory
reliance letters) from McCarter & English, LLP, dated as of the Date of
Issuance of the Bonds, addressed to the Administrative Agent, the Issuing Bank
and the Lenders and in form and substance satisfactory to the Administrative
Agent and the Issuing Bank, to the effect that the Supplemental Indenture is a
legal, valid and binding obligation of the Issuer and that as of the Date of
Issuance, the execution and delivery of the Supplemental Indenture will not
adversely affect the exclusion from gross income of interest on the Bonds under
existing statutes, regulations and rulings, and covering such other matters as
the Administrative Agent and the Issuing Bank may reasonably
request.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (i)Organizational
Documents.  The Credit Parties shall have delivered to the
Administrative Agent at or prior to the issuance of the Letter of Credit the
following for each Credit Party:

     

    (i)a copy
of its certificate or articles of incorporation, together with a certificate of
existence/authorization, certified by the Secretary of State of the State of
such Credit Party’s organization;

     

    (ii)a
copy of its bylaws as then in effect, as certified by the secretary or assistant
secretary of such Credit Party;

     

    (iii)a
copy of the resolution or resolutions of its board of directors authorizing the
execution and delivery of this Agreement and the other Operative Documents to
which it is a party, as certified by the secretary or assistant secretary of
such Credit Party; and

     

    (iv)an
incumbency certificate from the secretary or assistant secretary of such Credit
Party setting forth the specimen signatures of its officers executing this
Agreement and the other Operative Documents to which it is a party.

     

    (j)Other
Documents.  There shall have been delivered to the
Administrative Agent such other information, documents, instruments, approvals
(and if requested by the Administrative Agent, certified duplicates of executed
copies thereof) or opinions as the Administrative Agent and the Issuing Bank may
reasonably request.

     

    (k)Documentation and
Proceedings.  All corporate and legal proceedings and all
instruments in connection with the transactions contemplated by this Agreement
and the other Operative Documents shall be satisfactory in form and substance to
the Administrative Agent and the Issuing Bank and the Administrative Agent and
the Issuing Bank shall have received all information and copies of all
documents, including records of corporate proceedings, governmental approvals
and incumbency certificates which it may have reasonably requested in connection
with the transactions contemplated by this Agreement and the other Operative
Documents, such documents where appropriate to be certified by proper
officers.

     

    (l)Payment of Fees and
Expenses.  All fees payable to the Issuing Bank and the Lenders
as of the Date of Issuance, and all fees and expenses of the Administrative
Agent, including the fees and expenses of counsel for the Administrative Agent,
shall have been paid in full.

     

    Article
Five

     

    

     

    Representations
and Warranties

     

    To induce
the Administrative Agent, the Issuing Bank, and the Lenders to enter into this
Agreement and to issue or participate in the Letter of Credit, each of the
Credit Parties hereby jointly and severally represents and warrants to the
Administrative Agent, the Issuing Bank, and each Lender that:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section 5.1.Financial
Condition.  The audited consolidated balance sheets of the
Guarantor as at December 31, 2007, and the related consolidated statements of
income, retained earnings and cash flows for the fiscal year ended on such date,
reported on by and accompanied by an unqualified report from
PricewaterhouseCoopers LLP, fairly present in all material respects the
consolidated financial condition of the Guarantor as at such date, and the
consolidated results of its operations and its consolidated cash flows for the
fiscal year then ended.  All such financial statements, including the
related schedules and notes thereto, have been prepared in accordance with GAAP
applied consistently throughout the periods involved (except as approved by the
aforementioned firm of accountants and disclosed
therein).  

     

    Section 5.2.No Change.  Since
December 31, 2007, no event or condition has occurred or changed that has had or
could reasonably be expected to have a Material Adverse Effect. 

     

    Section 5.3.Existence; Compliance with
Law.  Each Credit Party and other Group Member (a) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has the power and authority, and the legal
right, to own and operate its property, to lease the property it operates as
lessee and to conduct the business in which it is currently engaged, (c) is duly
qualified as a foreign corporation and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of property or the conduct
of its business requires such qualification except to the extent that the
failure to comply therewith could not, in the aggregate, reasonably be expected
to have a Material Adverse Effect and (d) is in compliance with all Requirements
of Law except to the extent that such non-compliance, singly or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.

     

    Section 5.4.Power; Authorization; Enforceable
Obligations.  Each Credit Party has the power and authority,
and the legal right, to make, deliver and perform the Credit Documents and the
other Operative Documents to which it is a party and, in the case of the
Borrower, to obtain extensions of credit hereunder.  Each Credit Party
has taken all necessary organizational action to authorize the execution,
delivery and performance of the Credit Documents and the other Operative
Documents to which it is a party and, in the case of the Borrower, to authorize
the Extensions of Credit on the terms and conditions of this
Agreement.  No authorization or approval of, filing with, notice to or
other act by or in respect of, any Governmental Authority or any other Person is
required in connection with the extensions of credit hereunder or with the
execution, delivery, performance, validity or enforceability of this Agreement
or any of the Credit Documents and the other Operative Documents, other than any
such consents, authorizations, filings and notices which have been duly obtained
or made and are in full force and effect.  Each Credit Document and
each other Operative Document has been duly executed and delivered on behalf of
each Credit Party party thereto.  This Agreement constitutes, and each
other Credit Document and the other Operative Documents upon execution will
constitute, a legal, valid and binding obligation of each Credit Party party
thereto, enforceable against each such Credit Party in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors’ rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law). 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section 5.5.No Legal Bar.  The
execution, delivery and performance of this Agreement and the other Credit
Documents and the other Operative Documents, the issuance of Letter of Credit,
the Extensions of Credit hereunder and the use of the proceeds thereof will not
violate any Requirement of Law or any material Contractual Obligation of either
Credit Party or their respective Subsidiaries and will not result in, or
require, the creation or imposition of any Lien on any of their respective
properties or revenues pursuant to any Requirement of Law or any such
Contractual Obligation.  No Requirement of Law or Contractual
Obligation applicable to either Credit Party or any of their respective
Subsidiaries could reasonably be expected to have a Material Adverse Effect.

     

    Section 5.6.Litigation.  No
litigation, arbitration or administrative proceeding of or before any arbitrator
or Governmental Authority is pending or, to the knowledge of either Credit
Party, threatened (i) against either Credit Party or any of their respective
Subsidiaries to restrain the entry by either Credit Party into, the enforcement
of or exercise of any rights by the Lenders, the Issuing Bank, or the
Administrative Agent under, or the performance or compliance by either Credit
Party with any obligations under, this Agreement or the other Credit Documents
or other Operative Documents, or (ii) against either Credit Party or any of
their Subsidiaries which has had or would reasonably be expected to have a
Material Adverse Effect. 

     

    Section 5.7.No Default.  No
Default or Event of Default has occurred and is continuing. 

     

    Section 5.8.Ownership of Property;
Liens.  Each Group Member has title in fee simple to, or a
valid leasehold interest in, all its real property which is material to the
operation of such Group Member’s business, and good title to, or a valid
leasehold interest in, all its other property which is material to the operation
of such Group Member’s business, and none of such property is subject to any
Lien except as permitted by Section 7.2. 

     

    Section 5.9.Intellectual
Property.  (i) Each Group Member owns, or is licensed to use,
all Intellectual Property necessary for the conduct of its business as currently
conducted; (ii) no material claim has been asserted and is pending by any Person
challenging or questioning the use of any Intellectual Property or the validity
or effectiveness of any Intellectual Property, nor does either Credit Party know
of any valid basis for any such claim and (iii) the use of Intellectual Property
which is material to the operation of each Group Member’s business does not
infringe on the rights of any Person in any material respect. 

     

    Section 5.10.Taxes.  Each Group
Member has filed or caused to be filed all Federal, state and other material tax
returns that are required to be filed and has paid all taxes shown to be due and
payable on said returns or on any assessments made against it or any of its
property and all other taxes, fees or other charges imposed on it or any of its
property by any Governmental Authority (other than any the amount or validity of
which are currently being contested in good faith by appropriate proceedings and
with respect to which reserves in conformity with GAAP have been provided on the
books of the relevant Group Member); no tax Lien has been filed, and, to the
knowledge of the Credit Parties, no claim is being asserted, with respect to any
such tax, fee or other charge. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section 5.11.Federal
Regulations.  No part of the proceeds of any Extensions of
Credit hereunder will be used in any manner which violates Regulation U as now
and from time to time hereafter in effect or for any purpose that violates the
provisions of the Regulations of the Board.  If requested by any
Lender, the Issuing Bank, or the Administrative Agent, the Borrower will furnish
to the Administrative Agent and each Lender a statement to the foregoing effect
in conformity with the requirements of Regulation U.  After
application of the proceeds of all Extensions of Credit hereunder, less than 25%
of the assets of the Credit Parties and their Subsidiaries consist of “margin
stock” (as defined in Regulation U). 

     

    Section 5.12.ERISA.  Neither a
Reportable Event nor an “accumulated funding deficiency” (within the meaning of
Section 412 of the Code or Section 302 of ERISA) has occurred during the
five-year period prior to the date on which this representation is made or
deemed made with respect to any Plan, each Plan has satisfied the minimum
funding standard applicable to the Plan (as determined pursuant to
Section 412 of the Code and Section 302 of ERISA) for each plan year
during such period, and, to the knowledge and belief of the Credit Parties, each
Plan has complied in all material respects with the applicable provisions of
ERISA and the Code except where non-compliance, either singly or in the
aggregate, could not reasonably be expected to have a Material Adverse
Effect.  No termination of a Single Employer Plan has occurred, and no
Lien in favor of the PBGC or a Plan has arisen, during such five-year
period.  The present value of all accrued benefits under each Single
Employer Plan (based on those assumptions used to fund such Plans) did not, as
of the last annual valuation date prior to the date on which this representation
is made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits by an amount that could reasonably be expected to have a
Material Adverse Effect.  Neither Credit Party nor any Commonly
Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan that has resulted or could reasonably be expected to result
in a liability or loss under ERISA, and neither Credit Party nor any Commonly
Controlled Entity would become subject to any liability or loss under ERISA if
such Credit Party or any such Commonly Controlled Entity were to withdraw
completely from all Multiemployer Plans as of the valuation date most closely
preceding the date on which this representation is made or deemed made, in any
case where, either singly or in the aggregate, the aggregate amount of loss or
liability could not reasonably be expected to have a Material Adverse Effect.

     

    Section 5.13.Investment Company Act; Other
Regulations.  No Credit Party is an “investment company”, or a
company “controlled” by an “investment company”, within the meaning of the
Investment Company Act of 1940, as amended.  No Credit Party is
subject to regulation under any Requirement of Law (other than Regulation X of
the Board) that limits its ability to obtain Extensions of Credit under this
Agreement. 

     

    Section 5.14.Subsidiaries.  As
of the Closing Date, (a) Schedule 5.14 sets forth the name and jurisdiction of
incorporation of each Subsidiary of each Credit Party and, as to each such
Subsidiary, the percentage of each class of Capital Stock owned by either Credit
Party, and whether such Subsidiary is then a Restricted Subsidiary or
Unrestricted Subsidiary, and (b) except as set forth on Schedule 5.14, there are
no outstanding subscriptions, options, warrants, calls, rights or other
agreements or commitments (other than stock performance grants granted to
employees or directors and directors’ qualifying shares) of any nature relating
to any Capital Stock of either Credit Party, the Borrower or any of their
respective Subsidiaries. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section 5.15.Use of Extensions of Credit.  The
Letter of Credit and other Extensions of Credit pursuant to this Agreement shall
be used solely to support the Borrower’s payment obligations in respect of the
Bonds.

     

    Section 5.16.Environmental
Matters.  Except (i) as may be disclosed on Schedule 5.16, or
(ii) as, either singly or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect: 

     

    (a)the
facilities and properties owned, leased or operated by either Credit Party or
their respective Subsidiaries (the “Properties”) do not contain,
and have not previously contained, any Materials of Environmental Concern in
amounts or concentrations or under circumstances that constitute or constituted
a violation of, or could give rise to liability under, any Environmental
Law;

     

    (b)neither
the Credit Parties nor any of their respective Subsidiaries has received or is
aware of any notice of violation, alleged violation, non-compliance, liability
or potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Properties or the business operated
by any of them (the “Business”), nor does either
of the Credit Parties have knowledge or reason to believe that any such notice
will be received or is being threatened;

     

    (c)Materials
of Environmental Concern have not been transported or disposed of from the
Properties in violation of, or in a manner or to a location that could give rise
to liability under, any Environmental Law, nor have any Materials of
Environmental Concern been generated, treated, stored or disposed of at, on or
under any of the Properties in violation of, or in a manner that could give rise
to liability under, any applicable Environmental Law;

     

    (d)no
judicial proceeding or governmental or administrative action is pending or, to
the knowledge of either Credit Party, threatened, under any Environmental Law to
which either Credit Party or their respective Subsidiaries is or will be named
as a party with respect to the Properties or the Business, nor are there any
consent decrees or other decrees, consent orders, administrative orders or other
orders, or other administrative or judicial requirements outstanding under any
Environmental Law with respect to the Properties or the Business;

     

    (e)there
has been no release or threat of release of Materials of Environmental Concern
at or from the Properties, or arising from or related to the operations in
connection with the Properties or otherwise in connection with the Business, in
violation of or in amounts or in a manner that could give rise to liability
under Environmental Laws;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (f)the
Properties and all operations at the Properties are in compliance, and have in
the last five years been in compliance, with all applicable Environmental Laws,
and there is no contamination at, under or about the Properties or violation of
any Environmental Law with respect to the Properties or the Business;
and

     

    (g)no
Group Member has assumed any liability of any other Person under Environmental
Laws.

     

    Section 5.17.Accuracy of Information,
etc.  No statement or information contained in this Agreement,
any other Credit Document or other Operative Document, or any other document,
certificate or written statement furnished by any Credit Party or other
statement made or furnished by a Responsible Officer of any Credit Party, in
each case to the Administrative Agent, the Issuing Bank, or the Lenders, or any
of them, for use in connection with the transactions contemplated by this
Agreement or the other Credit Documents or other Operative Documents, contained
as of the date such statement, information, document or certificate was so
furnished, any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements contained herein or therein not
misleading.  There is no fact known to either Credit Party that could
reasonably be expected to have a Material Adverse Effect that has not been
expressly disclosed herein, in the other Credit Documents or other Operative
Documents, or in any other documents, certificates and statements furnished to
the Administrative Agent, the Issuing Bank and the Lenders for use in connection
with the transactions contemplated hereby and by the other Credit Documents.

     

    Section 5.18.Solvency.  Each
Credit Party is, and after giving effect to the incurrence of all Obligations
being incurred in connection herewith, will be and will continue to be, Solvent.

     

    Section 5.19.Status of
Obligations.  The respective obligations of the Credit Parties
in respect of the Reimbursement Obligations and all other Obligations under this
Agreement, respectively, constitute senior, unsubordinated, direct obligations
of such Credit Parties and rank pari passu with such Credit Parties’ other
senior, unsubordinated, unsecured obligations. 

     

    Section 5.20.OFAC.  No Credit
Party (i) is a person whose property or interest in property is blocked or
subject to blocking pursuant to Section 1 of Executive Order 13224 of September
23, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit,
Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)), (ii)
engages in any dealings or transactions prohibited by Section 2 of such
executive order, or is otherwise associated with any such person in any manner
violative of Section 2, or (iii) is a person on the list of Specially Designated
Nationals and Blocked Persons or subject to the limitations or prohibitions
under any other U.S. Department of Treasury’s Office of Foreign Assets Control
regulation or executive order. 

     

    Section 5.21.USA Patriot
Act.  Each Credit Party is in compliance, in all material
respects, with (i) the Trading with the Enemy Act, as amended, and each of
the foreign assets control regulations of the United States Treasury Department
(31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation
or executive order relating thereto, and (ii) the Uniting And Strengthening
America By Providing Appropriate Tools Required To Intercept And Obstruct
Terrorism (USA Patriot Act of 2001, Title III of Pub. L. 107-56, as
amended).  No Extensions of Credit will be used, directly or
indirectly, for any payments to any governmental official or employee, political
party, official of a political party, candidate for political office, or anyone
else acting in an official capacity, in order to obtain, retain or direct
business or obtain any improper advantage, in violation of the United States
Foreign Corrupt Practices Act of 1977, as amended

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section 5.22.Official Statements, Remarketing
Memoranda or Other Offering Documents.  The information
relating to the Bonds, the other Operative Documents, the Borrower, the
Guarantor and the other Group Members and their properties contained in any
Official Statement, supplement to an Official Statement, Remarketing Memorandum
or other offering documents used in connection with the conversion of the
interest rate on the Bonds and subsequent remarketing of the Bonds is, and any
supplement or amendment thereof authorized by the Borrower or the Guarantor
shall be, accurate in all material respects for the purposes for which its use
is, was, or shall be, authorized; and such information does not, and any such
supplements or amendments thereof shall not, contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements made therein, in the light of the circumstances under which they are
or were made, not misleading.

     

    Section 5.23.Indenture and Supplemental
Indenture.  The Indenture and the Supplemental Indenture are in
full force and effect.  No provision of the Supplemental Indenture is
in violation or contravention of any provision of the Indenture (except as
consented to by the Bond Insurer or the Bondholders for the Bonds, as required
by Indenture) or would constitute a Default or Event of Default under the
Indenture.

     

    Section 5.24.Loan
Agreement.  The representations and warranties made by the
Borrower as set forth in the Loan Agreement, all of which are incorporated in
this Agreement by this reference with the same effect as though set forth in
full herein, are true and correct as of the date of this Agreement and as of the
Date of Issuance of the Letter of Credit.

     

    Article
Six

     

    

     

    Affirmative
Covenants

     

    Each
Credit Party hereby jointly and severally agrees that, so long as any
Commitments remain in effect, the Letter of Credit remains outstanding or other
amount is owing to any Lender, the Issuing Bank, or the Administrative Agent
hereunder, each Credit Party shall and shall cause each other Group Member
to:

     

    Section 6.1.Financial
Statements.  Furnish to the Administrative Agent for delivery
to the Lenders:

     

    (a)as
soon as available, but in any event within 90 days after the end of each
fiscal year of the Guarantor, a copy of (i) the audited consolidated
balance sheet of the Borrower and its consolidated Subsidiaries, (ii) the
audited consolidated balance sheet of the Guarantor and its consolidated
Subsidiaries and a copy of the separate unaudited balance sheet (or, if audited
financial statements are otherwise prepared or required to be prepared for such
Unrestricted Subsidiary, audited balance sheet) of each Unrestricted Subsidiary,
in each case as at the end of such year, and (iii) the related audited (or,
in the case of any Unrestricted Subsidiary for which audited statements are not
required by this Section 6.1(a), unaudited) consolidated statements of income
and of cash flows for the Borrower and the Guarantor, respectively, for such
year, setting forth in each case in comparative form the figures for the
previous year, reported on for such fiscal year without a “going concern” or
like qualification or exception, or qualification arising out of the scope of
the audit, by the Borrower’s and the Guarantor’s independent certified public
accountants of nationally recognized standing; and

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b)as
soon as available, but in any event not later than 45 days after the end of each
of the first three quarterly periods of each fiscal year of the Guarantor (other
than the last fiscal quarter of each fiscal year), a copy of (i) the
unaudited consolidated balance sheet of the Borrower and its consolidated
Subsidiaries, (ii) the unaudited consolidated balance sheet of the
Guarantor and its consolidated Subsidiaries, and a copy of the separate
unaudited consolidated balance sheet of each Unrestricted Subsidiary, in each
case as at the end of such quarter, and (iii) the related unaudited
statements of income and of cash flows for the Borrower and the Guarantor,
respectively, for such quarter and the portion of the fiscal year through the
end of such quarter, setting forth in each case in comparative form the figures
for the previous year, certified by a Responsible Officer as having been
prepared in accordance with GAAP (subject to normal year-end audit
adjustments).

     

    All such
financial statements shall be complete and correct in all material respects and
shall be prepared in reasonable detail and in accordance with GAAP applied
consistently throughout the periods reflected therein and with prior periods
(except as approved by such accountants or officer, as the case may be, and
disclosed therein and except for the omission of footnotes in the quarterly
financial statements).

     

    Section 6.2.Certificates; Other
Information.  Furnish to the Administrative Agent for delivery
to the Lenders (or, in the case of clause (d), to the relevant
Lender):

     

    (a)concurrently
with the delivery of any financial statements pursuant to Section 6.1, (i) a
certificate of a Responsible Officer stating that, to the best of each such
Responsible Officer’s knowledge, each Credit Party during such period has
observed or performed all of its covenants and other agreements, and satisfied
every condition, contained in this Agreement and the other Credit Documents to
which it is a party to be observed, performed or satisfied by it, and that such
Responsible Officer has obtained no knowledge of any Default or Event of Default
except as specified in such certificate, and (ii) a Compliance Certificate
containing all information and calculations necessary for determining compliance
by each Group Member with the provisions of this Agreement referred to therein
as of the last day of the fiscal quarter or fiscal year of the Guarantor, as the
case may be;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b)(i)
prompt notice to the Administrative Agent of any failure by the Guarantor or the
Borrower to file with the SEC any annual report on Form 10-K or quarterly report
on Form 10-Q on or before the date such report is required to be filed pursuant
to SEC regulations, and (ii) within five days after the same is filed, notice to
the Administrative Agent of the filing of any such annual report on Form 10-K or
quarterly report on Form 10-Q that had not previously been filed by the
Guarantor or the Borrower as described in the preceding clause (i), and the
availability to the Lenders of such filing through electronic
access;

     

    (c)within
five days after the same is filed, notice to the Administrative Agent of the
filing by the Guarantor or the Borrower with the SEC of any proxy statement, and
the availability to the Lenders of such filing through electronic access;
and

     

    (d)promptly,
such additional financial and other information as any Lender may from time to
time reasonably request.

     

    Section 6.3.Payment of
Obligations.   Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
Federal, state and other material taxes and other material obligations of
whatever nature, except where the amount or validity thereof is currently being
contested in good faith by appropriate proceedings and reserves in conformity
with GAAP with respect thereto have been provided on the books of the relevant
Group Member.

     

    Section 6.4.Maintenance of Existence;
Compliance.  (a) (i)
Preserve, renew and keep in full force and effect its organizational existence
and (ii) take all reasonable action to maintain all rights, privileges and
franchises necessary or desirable in the normal conduct of its business, except,
in each case, as otherwise permitted by Section 7.3 and except, in the case of
clause (ii) above, to the extent that failure to do so could not reasonably
be expected to have a Material Adverse Effect; and (b) comply with all
Contractual Obligations and Requirements of Law except to the extent that
failure to comply therewith would not, in the aggregate, reasonably be expected
to have a Material Adverse Effect.

     

    Section 6.5.Maintenance of Property;
Insurance.  (a)  Keep all property useful and
necessary in its business in good working order and condition, ordinary wear and
tear excepted and (b) maintain insurance (either with financially sound
insurance companies or through self-insurance) on all its property in at least
such amounts and against at least such risks (but including in any event public
liability and business interruption) as are usually insured against in the same
general area by companies engaged in the same or a similar
business.

     

    Section 6.6.Inspection of Property; Books and
Records; Discussions.  (a) Keep proper books of records and
account in respect of the Guarantor, the Borrower, and their respective
Subsidiaries in which full, true and correct entries in conformity with GAAP and
all Requirements of Law shall be made of all dealings and transactions in
relation to their business and activities and (b) permit representatives of
the Administrative Agent or any Lender to visit and inspect any of its
properties and examine and make abstracts from any of its books and records
during normal business hours and, if no Event of Default has occurred and is
continuing, upon reasonable notice and as often as may reasonably be desired and
to discuss their respective businesses, operations, properties and financial and
other condition with their respective officers and employees and with their
independent certified public accountants; provided, that unless an Event of
Default has occurred and is continuing, the Administrative Agent and the Lenders
shall use their reasonable efforts to coordinate any such visits or inspections
so as to minimize disruption of the conduct of their respective businesses, as
applicable.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section 6.7.Notices.  Promptly
give notice to the Administrative Agent and each Lender of:

     

    (a)the
occurrence of any Default or Event of Default;

     

    (b)the
following events, at such time as a Responsible Officer has knowledge thereof;
any (i) default or event of default under any material Contractual Obligation of
any of the Guarantor, the Borrower, or their respective Subsidiaries or (ii)
litigation or governmental proceeding that may exist at any time between any of
the Guarantor, the Borrower, or their respective Subsidiaries and any
Governmental Authority, and (iii) the occurrence of any Reportable Event with
respect to any Plan, a failure to make any required contribution to a Plan, the
creation of any Lien in favor of the PBGC or a Plan or any withdrawal from, or
the termination, Reorganization or Insolvency of, any Multiemployer Plan or the
institution of proceedings or the taking of any other action by the PBGC or the
Guarantor, the Borrower or any Commonly Controlled Entity or any Multiemployer
Plan with respect to the withdrawal from, or the termination, Reorganization or
Insolvency of, any Plan, that in any of the foregoing cases (i) through (iii)
singly or in the aggregate, could reasonably be expected to result in
liabilities, losses or claims to the Group Members in an aggregate amount in
excess of $100,000,000; and

     

    (c)any
change in, or withdrawal or suspension of, the Ratings of which the Guarantor or
the Borrower has received written notification or of which the Guarantor or the
Borrower becomes aware of the public announcement thereof.

     

    Section 6.8.Environmental
Laws.  (a) Comply in all material respects with, and
contractually require compliance in all material respects by all tenants and
subtenants, if any, with, all applicable Environmental Laws, and obtain and
comply in all material respects with and maintain, and contractually require
that all tenants and subtenants obtain and comply in all material respects with
and maintain, any and all licenses, approvals, notifications, registrations or
permits required by applicable Environmental Laws except where such
non-compliance would not reasonably be expected to have a Material Adverse
Effect.

     

    (b)Conduct
and complete in all material respects all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and comply in a timely manner in all material respects with
all lawful orders and directives of all Governmental Authorities regarding
Environmental Laws.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section 6.9.Maintenance of
Ownership.  In the case of the Guarantor, own 100% of the
Capital Stock of the Atlanta Gas Light Company, Chattanooga Gas Company,
Virginia Natural Gas, Inc., AGL Capital Corporation, and the
Borrower.

     

    Section 6.10.Certain
Obligations.  Each Credit Party shall use its reasonable best
efforts to cause each of the Tender Agent and the Remarketing Agent at all times
to comply with the terms of the Operative Documents to which it is a
party.

     

    Section 6.11.Loan
Agreement.  The Borrower agrees to timely perform and observe
all covenants and requirements of the Borrower as set forth in the Loan
Agreement, all of which are incorporated in this Agreement by this reference
with the same effect as though set forth in full herein.

     

    Article
Seven

     

    

     

    Financial
and Negative Covenants

     

    Each
Credit Party hereby jointly and severally agrees that, during the term of this
Agreement, and so long as the Commitments remain in effect, the Letter of Credit
remains outstanding, or other amount is owing to any Lender or the
Administrative Agent hereunder, each Credit Party shall not, and shall not
permit any of the other Group Members to, directly or indirectly:

     

    Section 7.1.Financial Condition
Covenant.  Permit the ratio of Consolidated Total Debt to Total
Capitalization to be greater than 0.70:1.00 as of the end of any fiscal month of
the Guarantor (as determined by the Guarantor based on its internal fiscal
month-end consolidated balance sheet prepared not later than ten (10) days
following the end of such fiscal month) or at the end of any fiscal quarter of
the Guarantor (as reflected on the consolidated financial statements delivered
to the Lenders pursuant to Section 6.1).  For purposes of the
foregoing, to the extent Consolidated Total Debt includes outstanding amounts
under Hybrid Securities, then a portion of the amount of such Hybrid Securities
not to exceed a total of 15% of Total Capitalization may be excluded from
Consolidated Total Debt.

     

    Section 7.2.Liens.  Create,
incur, assume or suffer to exist any Lien upon any of its property, whether now
owned or hereafter acquired, except:

     

    (a)Mechanics’,
materialmen’s, carriers’, and other similar Liens arising in the ordinary course
of business that are not overdue for a period longer than 30 days or that are
being contested in good faith by appropriate proceedings;

     

    (b)Pledges
or deposits in connection with workers’ compensation, unemployment insurance,
and other social security legislation;

     

    (c)Liens
for taxes not yet due or that are being contested in good faith by appropriate
proceedings, provided that adequate reserves with respect thereto are maintained
on the consolidated books of the Guarantor in conformity with GAAP;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (d)Liens
in respect of judgments or awards pending appeal so long as execution is not
levied thereunder, and Liens in favor of plaintiff or defendant in any action
before a court or a tribunal as security for costs or expenses where such action
is being prosecuted or defended in the bona fide interest of the Guarantor or
any other Group Member;

     

    (e)Liens
on deposits to secure, or any Lien otherwise securing, the performance of bids,
trade contracts (other than for borrowed money), leases, statutory obligations,
surety bonds, appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business;

     

    (f)Liens
on any fixed or capital assets to secure the purchase of or the cost of
construction or improvement of such fixed or capital assets or to secure
Indebtedness incurred solely for the purpose of financing the acquisition,
construction or improvement of such fixed or capital assets (including Liens
securing capital lease obligations); provided, that (i) such Lien secures
Indebtedness which on the date incurred and after giving pro forma effect
thereto is permitted under Section 7.1, (ii) such Lien attaches to such
asset concurrently or within 90 days after the acquisition, improvement or
completion of the construction thereof; (iii) such Lien does not extend to
any other asset of any Group Member; and (iv) the Indebtedness secured by
such Lien does not exceed the cost of acquiring, constructing or improving such
fixed or capital assets;

     

    (g)Liens
(x) outstanding on or over any Assets acquired after the Closing Date, (y) in
existence at the date of such acquisition and not created in contemplation
thereof, and (z) where the principal amount secured thereby is not increased
over the amount so secured and outstanding at the time of such acquisition
(other than in the case of Liens for a fluctuating balance facility, by way of
utilization of that facility within the limits applicable thereto at the time of
acquisition);

     

    (h)Liens
constituted by a right of set off, or rights over a margin call account, or any
form of cash collateral, or any similar arrangement, in any such case for
obligations incurred in respect of any Hedge Agreements, as renewed or extended
upon the renewal or extension or refinancing or replacement of the obligations
secured thereby;

     

    (i)Liens
existing on the Closing Date and set forth on Schedule 7.2(i) as renewed,
extended, refinanced or replaced, provided that such renewal, extension,
refinancing, or replacement does not cover any other Assets or increase the
obligations secured thereby;

     

    (j)Liens
on the property of a Person existing at the time such Person is merged into or
consolidated with the Guarantor or any other Group Member and not incurred in
contemplation with such merger or consolidation; and

     

    (k)Liens
created or outstanding on Assets of the Guarantor or other Group Members,
provided that the aggregate outstanding principal, capital and nominal amounts
secured by all Liens created or outstanding as permitted under clauses (f)
through (j) above and this clause (k) shall not at any time exceed 10% of
Consolidated Net Worth.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section 7.3.Fundamental
Changes.  Merge, consolidate or amalgamate, or liquidate, wind
up or dissolve itself (or suffer any liquidation or dissolution), or Dispose of
all or substantially all of its property or business, except that so long as no
Default or Event of Default has occurred and is continuing or would result
therefrom:

     

    (a)any
entity may be merged or consolidated with or into the Guarantor (provided that
the Guarantor shall be the continuing or surviving corporation) or any other
Restricted Subsidiary of the Guarantor (provided that such Restricted Subsidiary
shall be the continuing or surviving corporation); and

     

    (b)any
Restricted Subsidiary of the Guarantor may Dispose of any or all of its Assets
(i) to the Guarantor or any other Restricted Subsidiary of the Guarantor (upon
voluntary liquidation or otherwise) or (ii) pursuant to a Disposition permitted
by Section 7.4 and may thereafter liquidate, wind up or dissolve.

     

    Section
7.4.Disposition of
Property.  Dispose of any of its Assets, whether now owned or
hereafter acquired, or, in the case of the Guarantor or any of its Restricted
Subsidiaries, issue or sell any shares of such Restricted Subsidiary’s Capital
Stock to any Person, except:

     

    (a)Dispositions
of obsolete or worn out property in the ordinary course of
business;

     

    (b)sales
of inventory in the ordinary course of business;

     

    (c)Dispositions
permitted by Section 7.3(b)(i);

     

    (d)sales
or issuances of any Restricted Subsidiary’s Capital Stock to the Guarantor or to
any Restricted Subsidiary of the Guarantor; and

     

    (e)the
Disposition of other Assets, the aggregate net book value of which, when
combined with all such other Assets sold, leased, transferred or otherwise
disposed of since June 30, 2006, would not exceed 20% of the Guarantor’s
consolidated Assets at the end of the preceding fiscal quarter (including the
fourth fiscal quarter) of the Guarantor for which financial statements have most
recently been delivered to the Administrative Agent pursuant to
Section 6.1

     

    Section
7.5.Restricted
Payments.  Declare or pay any dividend (other than dividends
payable solely in common stock of the Person making such dividend) on, or make
any payment on account of, or set apart assets for a sinking or other analogous
fund for, the purchase, redemption, defeasance, retirement or other acquisition
of, any Capital Stock of any Group Member, whether now or hereafter outstanding,
or make any other distribution in respect thereof, either directly or
indirectly, whether in cash or property or in obligations of any Group Member
(collectively, “Restricted
Payments”), except that:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (a)any
Restricted Subsidiary may make Restricted Payments to the Guarantor or to any
Restricted Subsidiary of the Guarantor or to any third-party investors in any
Restricted Subsidiary of the Guarantor;

     

    (b)so
long as no Event of Default shall have occurred and be continuing or would
result by virtue thereof, the Guarantor may pay dividends on shares of its
Capital Stock; and

     

    (c)so
long as no Event of Default shall have occurred and be continuing or would
result by virtue thereof, the Guarantor may buy back any outstanding shares of
its Capital Stock.

     

    Section
7.6.Amendments to
Operative Documents.  Amend, modify, or waive any of its rights
under any of the Operative Documents in a manner materially adverse to either
Credit Party or to the Issuing Bank or the Lenders, except with the prior
written consent of the Administrative Agent.

     

    Section
7.7.Investments.  Make
any advance, loan, extension of credit (by way of guaranty or otherwise) or
capital contribution to, or purchase any Capital Stock, bonds, notes, debentures
or other debt securities of, or any assets constituting a business unit of, or
make any other investment in, any Person (all of the foregoing, “Investments”),
except:

     

    (a)extensions
of trade credit in the ordinary course of business;

     

    (b)investments
in Cash Equivalents;

     

    (c)Guarantee
Obligations otherwise permitted by this Agreement;

     

    (d)loans
and advances to employees of any Group Member in the ordinary course of business
(including for travel, entertainment and relocation expenses) in an aggregate
amount for all Group Members not to exceed $2,000,000 at any one time
outstanding;

     

    (e)other
Investments made by the Guarantor or its Restricted Subsidiaries (other than the
Borrower) subsequent to June 30, 2006 where such Investments consist of
purchases of, or other investments in, the Capital Stock or other equity or
ownership interests, assets, obligations or other interests in, Subsidiaries,
joint ventures, or other Persons, in each case that are engaged principally in
the business of purchasing, gathering, compression, transportation,
distribution, exploration, production, processing or storage of natural gas, or
asset management with respect to the foregoing (the foregoing collectively
referred to as “Permitted
Acquisitions”); and

     

    (f)$150,000,000
in respect of Investments other than those described in the preceding clause
(e).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section
7.8.Negative Pledge
Clauses.  Except for the agreements listed on Schedule 7.8,
enter into or suffer to exist or become effective any agreement that prohibits
or limits the ability of any Group Member to create, incur, assume or suffer to
exist any Lien upon any of its property or revenues, whether now owned or
hereafter acquired, other than (a) this Agreement and the other Credit Documents
and (b) any agreements governing any purchase money Liens or capital lease
obligations otherwise permitted hereby (in which case, any prohibition or
limitation shall only be effective against the assets financed
thereby).

     

    Section
7.9.Clauses Restricting
Subsidiary Distributions.  Enter into or suffer to exist or
become effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary of the Guarantor to (a) make Restricted Payments in
respect of any Capital Stock of such Restricted Subsidiary held by, or pay any
Indebtedness owed to, the Guarantor or any other Restricted Subsidiary of the
Guarantor, (b) make loans or advances to, or other Investments in, the Borrower
or any other Restricted Subsidiary of the Guarantor or (c) transfer any of its
assets to the Guarantor or any other Restricted Subsidiary of the Guarantor,
except for such encumbrances or restrictions existing under or by reason of (i)
any restrictions with respect to a Restricted Subsidiary imposed pursuant to an
agreement that has been entered into in connection with the Disposition of all
or substantially all of the Capital Stock or assets of such Restricted
Subsidiary (in which case, any restriction shall only be effective against such
Capital Stock or assets), and (ii) any agreements with joint venture partners in
connection with joint ventures permitted by this Agreement.

     

    Section
7.10.Lines of
Business and Hedge
Activities.  (a)  With respect to the Guarantor and
each Subsidiary (other than AGL Capital Corporation), enter into any business,
either directly or through any Subsidiary, except for (i) those businesses in
which the Guarantor and its Subsidiaries (other than AGL Capital Corporation)
and its existing joint ventures are engaged on the date of this Agreement, (ii)
that are reasonably related to the businesses referred to in the preceding
clause (i), or (iii) that are being undertaken by comparable companies in the
natural gas industry, (b) with respect to AGL Capital Corporation, enter into
any business, except for that in which AGL Capital Corporation is engaged on the
Closing Date, or (c) with respect to the Guarantor, the Borrower, and each other
Group Member, enter into any Hedge Agreement except in the ordinary course of
their business and consistent with industry practices.

     

    Section
7.11.Designation of
Subsidiaries.  Designate or redesignate any Unrestricted
Subsidiary as a Restricted Subsidiary, or designate or redesignate any
Restricted Subsidiary as an Unrestricted Subsidiary, unless (a) the Guarantor
shall have given not less than ten (10) days’ prior written notice to the
Lenders that the Board of Directors of the Guarantor has made such
determination, (b) at the time of such designation or redesignation, and
immediately after giving effect thereto, no Default or Event of Default would
exist, (c) in the case of the designation of a Restricted Subsidiary as an
Unrestricted Subsidiary and after giving effect thereto, (i) such Unrestricted
Subsidiary so designated shall not, directly, or indirectly, hold or own any
Indebtedness or Capital Stock of the Guarantor or any Restricted Subsidiary, and
(ii) such designation shall be deemed a sale of assets and shall be permitted by
the provisions of Section 7.4, (d) in the case of the designation of an
Unrestricted Subsidiary as a Restricted Subsidiary and after giving effect
thereto, all outstanding Indebtedness and all existing Liens of such Restricted
Subsidiary so designated shall be permitted within the applicable limitations of
Sections 7.1 and 7.2, (e) in the case of the designation of a Restricted
Subsidiary as an Unrestricted Subsidiary, such Restricted Subsidiary shall not
at any time after the date of this Agreement have previously been designated as
an Unrestricted Subsidiary more than once, and (f) in the case of the
designation of an Unrestricted Subsidiary as a Restricted Subsidiary, such
Unrestricted Subsidiary shall not at any time after the date of this Agreement
have previously been designated as a Restricted Subsidiary more than
once.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section
7.12.Tax
Status.  Take any action or omit to take any action that, if
taken or omitted, would adversely affect the excludability of interest on the
Bonds from the gross income of the holders thereof for purposes of federal
income taxation.

     

    Section
7.13.Official
Statement, Remarketing Memorandum or Other Offering
Document.  Include in any offering document for the Bonds any
information concerning the Issuing Bank that is not supplied in writing, or
otherwise approved, by the Issuing Bank expressly for inclusion
therein.

     

    Section
7.14.Effectiveness of
Certain Negative Covenants.  Notwithstanding anything to the
contrary set forth herein, to the extent that any of the restrictions set forth
in Section 7.2 or Section 7.7 of this Agreement may conflict with or be
prohibited by Section 7.8 or Section 7.9 of the Revolving Credit Agreement, then
any such restrictions in Section 7.2 or Section 7.7 of this Agreement shall be
of no force or effect under this Agreement, until such time as (i) the
Revolving Credit Agreement ceases to be in effect, or (ii) Section 7.8
and/or Section 7.9 of the Revolving Credit Agreement or the related Schedules
are amended, waived, or otherwise modified so as to eliminate any such conflict
or prohibition.

     

    Article
Eight

     

    

     

    Pledged
Bonds

     

    Section
8.1.The
Pledge.  The Borrower hereby pledges, assigns, hypothecates,
transfers, and delivers to the Administrative Agent, for the benefit of the
Issuing Bank and the Lenders, all its right, title and interest to, and hereby
grants to the Administrative Agent, for the benefit of the Issuing Bank and the
Lenders, a first lien on, and security interest in, all right, title and
interest of the Borrower in and to the following (hereinafter collectively
called the “Pledged Bond
Collateral”):

     

    (a)all
Pledged Bonds;

     

    (b)all
income, earnings, profits, interest, premium or other payments in whatever form
in respect of the Pledged Bonds; and

     

    (c)all
proceeds (cash and non-cash) arising out of the sale, exchange, collection,
enforcement or other disposition of all or any portion of the Pledged
Bonds.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    The
Pledged Bond Collateral shall serve as security for the payment and performance
when due of the Reimbursement Obligations.  The Borrower shall
deliver, or cause to be delivered, the Pledged Bonds to the Administrative
Agent, for the benefit of the Issuing Bank and the Lenders, or to a 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 (“DTC”), New York, New York
(or any other clearing corporation), the Borrower shall cause the Pledged Bonds
to be reflected on the records of DTC (or such other clearing corporation) as a
position held by the Administrative Agent (or a pledge agent acceptable to the
Administrative Agent) as a DTC 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
8.2.Remedies Upon
Default.  If any Event of Default shall have occurred and be
continuing, the Administrative Agent, without demand of performance or other
demand, advertisement or notice of any kind (except the notice specified below
of time and place of public or private sale) to or upon the Borrower or any
other person (all and each of which demands, advertisements and/or notices are
hereby expressly waived), may forthwith collect, receive, appropriate and
realize upon the Pledged Bond Collateral, or any part thereof, and/or may
forthwith sell, assign, give option or options to purchase, contract to sell or
otherwise dispose of and deliver said Pledged Bond Collateral, or any part
thereof, in one or more parcels at public or private sale or sales, at any
exchange, broker’s board or at any of the Administrative Agent’s offices or
elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk, with the right to the Administrative Agent upon
any such sale or sales, public or private, to purchase the whole or any part of
said Pledged Bond Collateral so sold, free of any right or equity of redemption
in the Borrower, which right or equity is hereby expressly waived or
released.  In the event that any Pledged Bonds are sold or otherwise
transferred by the Administrative Agent and the Letter of Credit relating to
such Pledged Bonds will not be reinstated following such sell or transfer, the
Administrative Agent agrees that it will provide notice to the purchasers or
transferees of such Pledged Bonds that the then-current rating on such Pledged
Bonds will not be maintained.  The Administrative Agent shall apply
the net proceeds of any such collection, recovery, receipt, appropriation,
realization or sale, after deducting all reasonable costs and expenses of every
kind incurred therein or incidental to the care, safekeeping or otherwise of any
and all of the Pledged Bond Collateral or in any way relating to the rights of
the Administrative Agent hereunder, including reasonable attorneys’ fees and
legal expenses, to the payment in whole or in part of the Reimbursement
Obligations in such order as the Administrative Agent may elect, the Borrower
remaining liable for any deficiency remaining unpaid after such application, and
only after so applying such net proceeds and after the payment by the
Administrative Agent of any other amount required by any provision of law,
including, without limitation, Section 9-504(l)(c) of the Uniform
Commercial Code, need the Administrative Agent account for the surplus, if any,
to the Borrower.  The Borrower agrees that the Administrative Agent
need not give more than ten (10) days notice of the time and place of any public
sale or of the time after which a private sale or other intended disposition is
to take place and that such notice is reasonable notification of such
matters.  No notification need be given to the Borrower if it has
signed after Default a statement renouncing or modifying any right to
notification of sale or other intended disposition.  In addition to
the rights and remedies granted to the Administrative Agent in this Agreement
and in any other instrument or agreement securing, evidencing or relating to any
of the Reimbursement Obligations, the Administrative Agent shall have all the
rights and remedies of a secured party under the Uniform Commercial Code in
effect in the State of New York at that time.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section
8.3.Valid Perfected
First Lien.  The Borrower covenants that the pledge, assignment
and delivery of the Pledged Bond Collateral hereunder will create a valid,
perfected, first priority security interest in all right, title or interest of
the Borrower in or to such Pledged Bond Collateral, 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 Bond Collateral.  The Borrower covenants and
agrees that it will defend the Administrative Agent’s right, title and security
interest in and to the Pledged Bond Collateral and the proceeds thereof against
the claims and demands of all persons whomsoever.

     

    Section
8.4.Release of Pledged
Bonds.  Pledged Bonds shall be released from the security
interest created hereunder upon satisfaction of the Reimbursement Obligations
with respect to such Pledged Bonds as provided herein.

     

    Article
Nine

     

    Guaranty
of Obligations

     

    Section
9.1.The
Guaranty.  The Guarantor hereby guarantees to each Lender, the
Issuing Bank, and the Administrative Agent, as primary obligor and not as
surety, the prompt payment of all Reimbursement Obligations in full when due
(whether at stated maturity, by acceleration, as a mandatory cash
collateralization or otherwise) strictly in accordance with the terms
thereof.  The Guarantor hereby further agree that if any of the
Reimbursement Obligations are not paid in full when due (whether at stated
maturity, by acceleration, as a mandatory cash collateralization or otherwise),
the Guarantor will promptly pay the same, without any demand or notice
whatsoever, and that in the case of any extension of time of payment or renewal
of any of the Reimbursement Obligations, the same will be promptly paid in full
when due (whether at extended maturity, by acceleration, as a mandatory cash
collateralization or otherwise) in accordance with the terms of such extension
or renewal.

     

    Section
9.2.Obligations
Unconditional.  The obligations of the Guarantor under
Section 9.1 are absolute and unconditional, irrespective of the value,
genuineness, validity, regularity or enforceability of any of the Credit
Documents or any other agreement or instrument referred to therein, or any
substitution, release, impairment or exchange of any other guarantee of or
security for any of the Reimbursement Obligations, and, to the fullest extent
permitted by applicable law, irrespective of any other circumstance whatsoever
which might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor, it being the intent of this Section 9.1 that the
obligations of the Guarantor hereunder shall be absolute and unconditional under
any and all circumstances.  The Guarantor agrees that it shall have no
right of subrogation, indemnity, reimbursement or contribution against the
Borrower or any other Person for amounts paid under this Article Nine until such
time as the Reimbursement Obligations have been paid in full.  Without
limiting the generality of the foregoing, it is agreed that, to the fullest
extent permitted by law, the occurrence of any one or more of the following
shall not alter or impair the liability of the Guarantor hereunder, which shall
remain absolute and unconditional as described above:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (a)at any
time or from time to time, without notice to the Guarantor, the time for any
performance of or compliance with any of the Reimbursement Obligations shall be
extended, or such performance or compliance shall be waived;

     

    (b)any of
the acts mentioned in any of the provisions of any of the Credit Documents,
shall be done or omitted;

     

    (c)the
maturity of any of the Reimbursement Obligations shall be accelerated, or any of
the Reimbursement Obligations shall be modified, supplemented or amended in any
respect, or any right under any of the Credit Documents shall be waived or any
other guarantee of any of the Reimbursement Obligations or any security therefor
shall be released, impaired or exchanged in whole or in part or otherwise dealt
with;

     

    (d)any
Lien granted to, or in favor of, the Administrative Agent, the Issuing Bank or
any Lenders as security for any of the Reimbursement Obligations shall fail to
attach or be perfected; or

     

    (e)any of
the Reimbursement Obligations shall be determined to be void or voidable
(including, without limitation, for the benefit of any creditor of the
Guarantor) or shall be subordinated to the claims of any Person (including,
without limitation, any creditor of the Guarantor).

     

    With
respect to its obligations hereunder, the Guarantor hereby expressly waives
diligence, presentment, demand of payment, protest and all notices whatsoever,
and any requirement that the Administrative Agent, the Issuing Bank, or any
Lender exhaust any right, power or remedy or proceed against any Person under
any of the Credit Documents or against any other Person under any other
guarantee of, or security for, any of the Reimbursement
Obligations.

     

    Section
9.3.Reinstatement.  The
obligations of the Guarantor under this Article Nine shall be automatically
reinstated if and to the extent that for any reason any payment by or on behalf
of any Person in respect of the Reimbursement Obligations is rescinded or must
be otherwise restored by any holder of any of the Reimbursement Obligations,
whether as a result of any proceedings in bankruptcy or reorganization or
otherwise, and the Guarantor agrees that it will indemnify the Administrative
Agent, the Issuing Bank, and each Lender on demand for all reasonable costs and
expenses (including, without limitation, fees and expenses of counsel) incurred
by the Administrative Agent, the Issuing Bank, or such Lender in connection with
such rescission or restoration, including any such costs and expenses incurred
in defending against any claim alleging that such payment constituted a
preference, fraudulent transfer or similar payment under any bankruptcy,
insolvency or similar law.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section
9.4.Certain Additional
Waivers.  The Guarantor agrees that it shall have no right of
recourse to security for the Reimbursement Obligations, except through the
exercise of rights of subrogation pursuant to Section 9.2.

     

    Section
9.5.Remedies.  The
Guarantor agrees that, to the fullest extent permitted by law, as between the
Guarantor, on the one hand, and the Administrative Agent, the Issuing Bank, and
the Lenders, on the other hand, the Reimbursement Obligations may be declared to
be forthwith due and payable as provided in Section 10.2 (and shall be deemed to
have become automatically due and payable in the circumstances provided in said
Section 10.2) for purposes of Section 9.1 notwithstanding any stay, injunction
or other prohibition preventing such declaration (or preventing the
Reimbursement Obligations from becoming automatically due and payable) as
against any other Person and that, in the event of such declaration (or the
Reimbursement Obligations being deemed to have become automatically due and
payable), the Reimbursement Obligations (whether or not due and payable by any
other Person) shall forthwith become due and payable by the Guarantor for
purposes of Section 9.1.  

     

    Section
9.6.Guarantee of
Payment; Continuing Guarantee.  The guarantee in this Article
Nine is a guaranty of payment and not of collection, is a continuing guarantee,
and shall apply to all Reimbursement Obligations whenever arising.

     

    Article
Ten

     

    

     

    Events
of Default; Remedies

     

    Section
10.1.Events of
Default.  Each of the following (each an “Event of Default”) shall
constitute an Event of Default for purposes of this Agreement:

     

    (a)the
occurrence of a “Default” or an “Event of Default” as described and defined in
any of the Operative Documents; or

     

    (b)the
Borrower shall fail to pay any principal of any Reimbursement Obligation when
due in accordance with the terms hereof; or the Borrower shall fail to pay any
fees or interest on any Reimbursement Obligation, or any other amount payable
hereunder or under any other Credit Document, within five (5) days after any
such interest, fees or other amount becomes due in accordance with the terms
hereof; or

     

    (c)any
representation or warranty made or deemed made by any Credit Party herein or in
any other Credit Document or that is contained in any certificate, document or
financial or other statement furnished by it at any time under or in connection
with this Agreement or any such other Credit Document shall prove to have been
inaccurate in any material respect on or as of the date made or deemed made;
or

     

    (d)any
Credit Party shall default in the observance or performance of any agreement
contained in clause (i) or (ii) of Section 6.4(a) (with respect to the Guarantor
and the Borrower only), Section 6.7(a), Section 6.9 or Article 7 of this
Agreement; or

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (e)any
Credit Party shall default in the observance or performance of any other
agreement contained in this Agreement or any other Credit Document (other than
as provided in paragraphs (a) through (c) of this Section), and such default
shall continue unremedied for a period of 30 days after the earlier of (i)
knowledge thereof by any Responsible Officer of any Credit Party or (ii) notice
to the Borrower from the Administrative Agent or the Required Lenders;
or

     

    (f)any
Group Member shall (i) default in making any payment of any principal of any
Indebtedness (including any Guarantee Obligation, but excluding the
Reimbursement Obligations) on the scheduled or original due date with respect
thereto; or (ii) default in making any payment of any interest on any such
Indebtedness beyond the period of grace or notice and cure, if any, provided in
any instrument or agreement under which such Indebtedness was created; or (iii)
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 the maturity of such
Indebtedness; or any such Indebtedness shall be declared due and payable, or be
required to be prepaid or redeemed (other than by a regularly scheduled required
prepayment or redemption), purchased or defeased, or an offer to prepay, redeem,
purchase or defease such Indebtedness shall be required to be made, in each case
prior to the scheduled maturity thereof by reason of such event or condition;
provided, that a
default, event or condition described in clause (i), (ii) or (iii) of this
paragraph (e) shall not at any time constitute an Event of Default unless, at
such time, one or more defaults, events or conditions of the type described in
clauses (i), (ii) and (iii) of this paragraph (e) shall have occurred and be
continuing with respect to Indebtedness the total principal amount of which
exceeds in the aggregate $100,000,000 (which, in the case of Indebtedness
arising under any Hedge Agreement, shall be determined as the amount, if any,
that would then be payable by the Group Member thereunder if such Hedge
Agreement were to be terminated as a result of default by such Group Member);
or

     

    (g)(i)
any Group Member shall commence any case, proceeding or other action (A) under
any existing or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an
order for relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts, or (B) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or any
substantial part of its assets, or any Group Member shall make a general
assignment for the benefit of its creditors; or (ii) there shall be commenced
against any Group Member any case, proceeding or other action of a nature
referred to in clause (i) above that (A) results in the entry of an order for
relief or any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 90 days; or (iii) there shall be
commenced against any Group Member any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar process
against all or any substantial part of its assets that results in the entry of
an order for any such relief that shall not have been vacated, discharged, or
stayed or bonded pending appeal within 90 days from the entry thereof; or (iv)
any Group Member shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth in clause
(i), (ii), or (iii) above; or (v) any Group Member shall generally not, or shall
be unable to, or shall admit in writing its inability to, pay its debts as they
become due; or

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (h)(i)
any Person shall engage in any “prohibited transaction” (as defined in Section
406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) any
“accumulated funding deficiency” (as defined in Section 302 of ERISA), whether
or not waived, shall exist with respect to any Plan, any Plan shall have failed
to satisfy the minimum funding standard (as determined pursuant to
Section 412 of the Code and Section 302 of ERISA) for a plan year, or
any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Guarantor, the Borrower or any Commonly Controlled Entity, (iii) a Reportable
Event shall occur with respect to, or proceedings shall commence to have a
trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of the
Required Lenders, likely to result in the termination of such Plan for purposes
of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for purposes
of Title IV of ERISA, (v) the Borrower or any Commonly Controlled Entity
shall, or in the reasonable opinion of the Required Lenders is likely to, incur
any liability in connection with a withdrawal from, or the Insolvency or
Reorganization of, a Multiemployer Plan or (vi) any other event or condition
shall occur or exist with respect to a Plan; and in each case in clauses (i)
through (vi) above, such event or condition, together with all other such events
or conditions, if any, results in liabilities of the Group Members in respect
thereof in excess of $100,000,000; or

     

    (i)one or
more judgments or decrees shall be entered against any Group Member involving in
the aggregate liabilities (not paid or not fully covered by insurance as to
which the relevant insurance company has acknowledged coverage) of $100,000,000
or more, and all such judgments or decrees shall not have been vacated,
discharged, stayed or bonded pending appeal within 30 days from the entry
thereof; or

     

    (j)the
guarantee contained in Article Nine of this Agreement shall cease, for any
reason, to be in full force and effect or the Guarantor or the Borrower shall so
assert; or

     

    (k)(i) any
“person” or “group” (as such terms are used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) shall become
the “beneficial owner” (as defined in Rules 13(d)-3 and 13(d)-5 under the
Exchange Act), directly or indirectly, of more than 30% of the outstanding
common stock of the Guarantor or (ii) the board of directors of the
Guarantor shall cease to consist of a majority of Continuing Directors;
or

     

    (l)any
“Event of Default” as defined in the Revolving Credit Agreement shall exist or
have occurred, or

     

    (m)receipt
of notice that any of the Bonds has become subject to mandatory redemption or
special mandatory redemption pursuant to the terms of the
Indenture.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section
10.2.Remedies.  Upon the
existence or occurrence, of any Event of Default as provided in Section 10.1
then, and in any such event, (A) if such event is an Event of Default specified
in Section 10.1(g) with respect to the Borrower, automatically any Commitments
shall immediately terminate and the Reimbursement Obligations (with accrued fees
and interest thereon) and all other amounts owing under this Agreement and the
other Credit Documents (including all amounts of L/C Obligations, whether or not
the beneficiaries of the Letter of Credit shall have presented the documents
required thereunder) shall immediately become due and payable, and (B) if such
event is any other 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 (i) declare any
Commitments to be terminated forthwith, whereupon the Commitments shall
immediately terminate, and (ii) declare the Reimbursement Obligations (with
accrued fees and interest thereon) and all other amounts owing under this
Agreement and the other Credit Documents (including all amounts of L/C
Obligations, whether or not the beneficiaries of the Letter of Credit shall have
presented the documents required thereunder) to be due and payable forthwith,
whereupon the same shall immediately become due and payable.  In
addition, upon the existence or occurrence of any Event of Default of any kind,
the Administrative Agent may, or upon the request of the Required Lenders shall
(x) notify, or cause the Issuing Bank to notify, the Trustee as to the
existence or occurrence of such Event of Default and direct the Trustee to
accelerate payment of the Bonds, and (y) exercise any and all other
remedies contained in this Agreement or in any other Credit Document or
otherwise available under applicable law.

     

    If
presentment for honor of the Letter of Credit shall not have occurred at the
time of an acceleration pursuant to this Section 10.2, the Borrower shall
at such time deposit in a cash collateral account opened by the Administrative
Agent an amount equal to the then undrawn and unexpired amount of the Letter of
Credit.  Amounts held in such cash collateral account shall be applied
by the Administrative Agent to the payment of amounts drawn under such Letter of
Credit, and the unused portion thereof after the Letter of Credit shall have
expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the Borrower hereunder and under the other Credit
Documents.  After the Letter of Credit shall have expired or been
fully drawn upon, all Reimbursement Obligations shall have been satisfied and
all other obligations of the Borrower hereunder and under the other Credit
Documents shall have been paid in full, the balance, if any, in such cash
collateral account shall be returned to the Borrower (or such other Person as
may be lawfully entitled thereto).  Except as expressly provided above
in this Section, presentment, demand, protest and all other notices of any kind
are hereby expressly waived by the Borrower.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    No remedy
herein conferred or reserved is intended to be exclusive of any other available
remedy or remedies, but each and every such remedy shall be cumulative and shall
be in addition to every other remedy given under this Agreement or any other
Operative Document now or hereafter existing at law or in equity or by
statute.  No delay or omission to exercise any right or power accruing
upon any default, omission or failure of performance hereunder shall impair any
such right or power or shall be construed to be a waiver thereof, but any such
right or power may be exercised from time to time and as often as may be deemed
expedient.  In order to exercise any remedy reserved to the
Administrative Agent, the Issuing Bank or the Lenders in this Agreement, it
shall not be necessary to give any notice, other than such notice as may be
herein expressly required.  In the event any provision contained in
this Agreement should be breached by any party hereto and thereafter duly waived
by any other party hereto so empowered to act, such waiver shall be limited to
the particular breach so waived and shall not be deemed to waive any other
breach hereunder.  No waiver, amendment, release or modification of
this Agreement shall be established by conduct, custom or course of dealing, but
solely by an instrument in writing duly executed by the parties thereunto duly
authorized by this Agreement.

     

    Notwithstanding
anything to the contrary set forth in this Section 10.2, so long as any
series of Bonds is outstanding and no Bond Insurer Event of Default shall have
occurred and continue to exist with respect to such series of Bonds, then none
of the Administrative Agent, the Issuing Bank or any other Lender shall be
entitled to enforce or direct the enforcement of any rights or remedies pursuant
to the Indenture or Loan Agreement to call such series of Bonds for mandatory
tender for purchase or for payment or reimbursement by the applicable Authority
or the Borrower of any amounts representing principal of, or interest on, any
such series of Bonds, or bring any action, suit or proceeding against the
Borrower under this Agreement for reimbursement or other payment of any amounts
due in respect of principal of, or interest on, any such series of Bonds, in any
such case, except (i) in connection with a direction being given to the
applicable Trustee for acceleration of the maturity of such series of Bonds as
provided in this Section 10.2, or (ii) the making of any claim under
the Bond Insurance Policy in respect of such principal or interest payment as
provided in Section 3.1.

     

    Section
10.3.Application of
Collections.  After the exercise of remedies provided for in
this Agreement or the other Credit Documents (or after the Reimbursement
Obligations with respect to the outstanding Letter of Credit have automatically
been required to be cash collateralized), any amounts received on account of the
Reimbursement Obligations shall be applied by the Administrative Agent in the
following order:

     

    (a)First,
to payment of that portion of the Reimbursement Obligations constituting fees,
indemnities, expenses and other amounts payable to the Administrative Agent or
the Issuing Bank in its capacity as such;

     

    (b)Second,
to payment of that portion of the Reimbursement Obligations constituting fees,
indemnities, and other amounts (other than principal and interest) payable to
the Lenders, ratably among them in proportion to the amounts described in this
clause Second payable to them;

     

    (c)Third,
to payment of that portion of the Reimbursement Obligations constituting accrued
and unpaid interest and fees payable in respect of the outstanding Letter of
Credit, ratably among the Lenders in proportion to their respective amounts
described in this clause Third held by them;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (d)Fourth,
to payment of that portion of the Reimbursement Obligations constituting unpaid
reimbursement obligations with respect to payments made under the Letter of
Credit, and for cash collateralization of the outstanding Letter of Credit,
ratably among the Lenders in proportion to the respective amounts described in
this clause Fourth held by them; and

     

    (e)Last,
the balance, if any, after all of the Reimbursement Obligations have been
indefeasibly paid in full, to the Borrower or to any other Persons lawfully
entitled thereto, or as otherwise required by applicable law.

     

    Amounts
used for cash collateralization of the aggregate undrawn amount of the Letter of
Credit pursuant to clause Fourth shall be applied to satisfy drawings under the
Letter of Credit as such drawings occur.  If any amounts remain on
deposit as cash collateral after the Letter of Credit has either been fully
drawn or expired, such remaining amount shall be applied to the other
Reimbursement Obligations, if any, in the order set forth above.

     

    Article
Eleven

     

    

     

    The
Agent

     

    Section
11.1.Appointment.  Each
Lender hereby irrevocably designates and appoints Bank of America, N.A. as the
Administrative Agent for such Lender under this Agreement and the other Credit
Documents, and each such Lender irrevocably authorizes the Administrative Agent,
in such capacity, to take such action on its behalf under the provisions of this
Agreement and the other Credit Documents and to exercise such powers and perform
such duties as are expressly delegated to the Administrative Agent by the terms
of this Agreement and the other Credit 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, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any other Credit Document or otherwise exist
against the Administrative Agent

     

    Section
11.2.Delegation of
Duties.  The Administrative Agent may execute any of its duties
under this Agreement and the other Credit Documents 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
11.3.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 or any other Credit Document
(except to the extent that any of the foregoing are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from its or such Person’s own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any Credit Party or any officer thereof
contained in this Agreement or any other Credit 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 or any
other Credit Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Credit Document or
for any failure of any Credit Party a party thereto 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 observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Credit Document, or to inspect the properties, books or
records of any Credit Party.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section
11.4.Reliance by
Administrative Agent.  The Administrative Agent shall be
entitled to rely, and shall be fully protected in relying, upon any instrument,
writing, resolution, notice, consent, certificate, affidavit, letter, 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 counsel to the Guarantor or the Borrower), independent accountants
and other experts selected by the Administrative Agent.  The
Administrative Agent may deem and treat the Lender as the owner of such Lender’s
rights and interests hereunder for all purposes unless a written notice of
assignment 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 or any other Credit Document
unless it shall first receive such advice or concurrence of the Required Lenders
(or, if so specified by this Agreement, all Lenders) as it deems appropriate or
it shall first be indemnified to its satisfaction by the Lenders against any and
all liability and expense that 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 and the other Credit Documents in accordance with a request of the
Required Lenders (or, if so specified by this Agreement, all Lenders), and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all the Lenders and all assignees thereof.

     

    Section
11.5.Notice of
Default.  The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default unless
the Administrative Agent has received notice from a Lender, the Guarantor or the
Borrower referring to this Agreement, describing such Default or 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 Default or Event of Default as
shall be reasonably directed by the Required Lenders (or, if so specified by
this Agreement, all 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 Default or Event of
Default as it shall deem advisable in the best interests of the
Lenders.

     

    Section
11.6.Non-Reliance on
the 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 have
made any representations or warranties to it and that no act by the
Administrative Agent hereafter taken, including any review of the affairs of a
Credit Party or any affiliate of a Credit Party, shall be deemed to constitute
any 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
Credit Parties and their affiliates and made its own decision to make its
Extension of Credit hereunder and 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 and the other Credit 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 Credit Parties and
their affiliates.  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 any Credit Party or any affiliate of a Credit Party that may
come into the possession of the Administrative Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section
11.7.Indemnification.  The
Lenders agree to indemnify the Administrative Agent in its capacity as such (to
the extent not reimbursed by the Guarantor or the Borrower and without limiting
the obligation of the Guarantor or the Borrower to do so), ratably according to
their respective Aggregate Exposure Percentages in effect on the date on which
indemnification is sought under this Section (or, if indemnification is sought
after the date upon which the Commitments shall have terminated and the
Extensions of Credit outstanding shall have been terminated and paid in full, as
applicable, ratably in accordance with such Aggregate Exposure Percentages
immediately prior to such date), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses, claims, demands, causes of action or disbursements of any kind
whatsoever (whether or not an Indemnitee is a party to any such action, suit,
demand, cause of action, etc.) that may at any time (whether before or after the
termination and payment of the Extensions of Credit) be imposed on, incurred by
or asserted against the Administrative Agent in any way relating to or arising
out of, the Commitments, this Agreement, any of the other Credit 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 that are found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from the Administrative Agent’s gross
negligence or willful misconduct.  The agreements in this Section
shall survive the termination and payment of the Extensions of Credit and all
other amounts payable hereunder.

     

    Section
11.8.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, any Credit Party as though the Administrative Agent
were not acting in such capacity.  With respect to the Letter of
Credit issued or participated in by it, the Administrative Agent shall have the
same rights and powers under this Agreement and the other Credit Documents 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 as a Lender hereunder.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section
11.9.Successor
Administrative Agent.  The Administrative Agent may resign as
Administrative Agent upon 10 days’ notice to the Lenders and the
Borrower.  If the Administrative Agent shall resign as Administrative
Agent under this Agreement and the other Credit Documents, then the Required
Lenders shall appoint from among the Lenders a successor agent for the Lenders,
which successor agent shall (unless an Event of Default shall have occurred and
be continuing) be subject to approval by the Borrower (which approval shall not
be unreasonably withheld or delayed), 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 such
appointment and approval, 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 or any holders of the Reimbursement
Obligations.  If no successor agent has accepted appointment as
Administrative Agent by the date that is 10 days following a retiring
Administrative Agent’s notice of resignation, the retiring Administrative
Agent’s resignation shall nevertheless thereupon become effective, and the
Lenders shall assume and perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
agent as provided for above.  After any retiring Administrative
Agent’s resignation as Administrative Agent, the provisions of this Article
Eleven 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 and the other
Credit Documents

     

    Section
11.10.Syndication
Agent.  The Syndication Agent shall have no duties,
responsibilities or liabilities hereunder in its capacity as such.

     

    Article
Twelve

     

    

     

    Miscellaneous

     

    Section
12.1.Amendments and
Waivers.  Neither this Agreement, any other Credit Document,
nor any terms hereof or thereof may be amended, supplemented or modified except
in accordance with the provisions of this Section 12.1.  The Required
Lenders and each Credit Party (any required response to the matters described in
clauses (a) or (b) of this Section 12.1 not to be unreasonably delayed by any
party) party to the relevant Credit Document may, or, with the written consent
of the Required Lenders, the Administrative Agent and each Credit Party (any
required response to the matters described in clauses (a) or (b) of this Section
12.1 not to be unreasonably delayed by any party) party to the relevant Credit
Document may, from time to time, (a) enter into written amendments, supplements
or modifications hereto and to the other Credit Documents for the purpose of
adding any provisions to this Agreement or the other Credit Documents or
changing in any manner the rights of the Lenders or of the Credit Parties
hereunder or thereunder or (b) waive, on such terms and conditions as the
Required Lenders or the Administrative Agent, as the case may be, may specify in
such instrument, any of the requirements of this Agreement or the other Credit
Documents or any Default or Event of Default and its consequences; provided, however, that no
such waiver and no such amendment, supplement or modification shall
(i) forgive any principal amount of any Reimbursement Obligation, extend
the expiry date of the Letter of Credit or the scheduled date for payment of any
other Reimbursement Obligation, reduce the stated rate of any interest or fee
payable hereunder, or increase the amount or extend the expiration date of any
Lender’s Commitment, in each case without the written consent of each Lender
directly affected thereby; (ii) eliminate or reduce the voting rights of any
Lender under this Section 12.1 without the written consent of such Lender; (iii)
reduce any percentage specified in the definition of Required Lenders, consent
to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement and the other Credit Documents, release the
Guarantor from its obligations under Article Nine of this Agreement, or alter
the pro rata treatment of the Lenders in respect of their respective funding
obligations or payments for the account of the Lenders in accordance with their
respective percentages, in any such case, without the written consent of all
Lenders; (iv) amend, modify or waive any provision of Article Eleven without the
written consent of the Administrative Agent (or, to the extent any such
provision affects the Issuing Bank, the Issuing Bank); or (v) amend, modify
or waive any provision of Article Two, or otherwise affect the rights or
duties of the Issuing Bank hereunder or under any Credit Document or any other
documents relating thereto, without the written consent of the Issuing
Bank.  Any such waiver and any such amendment, supplement or
modification shall apply equally to each of the Lenders and shall be binding
upon the Credit Parties, the Lenders, and the Administrative
Agent.  In the case of any waiver, the Credit Parties, the Lenders and
the Administrative Agent shall be restored to their former position and rights
hereunder and under the other Credit Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section
12.2.Notices.  All
notices, requests and demands to or upon the respective parties hereto to be
effective shall be in writing (including by telecopy), and, unless otherwise
expressly provided herein, shall be deemed to have been duly given or made when
delivered, or three Business Days after being deposited in the mail, postage
prepaid, or, in the case of telecopy notice, when received, addressed as follows
in the case of the Guarantor, the Borrower, the Administrative Agent, and the
Issuing Bank, and as set forth in an Administrative Questionnaire delivered to
the Administrative Agent in the case of the Lenders, or to such other address as
may be hereafter notified by the respective parties hereto:

     

    To the
Borrower:Pivotal Utility Holdings, Inc.

    Ten
Peachtree Place NE, Suite 1000

    Atlanta,
Georgia  30309

    Attention:  Treasurer

    Telecopy:  (404)
584-3589

    Telephone:  (404)
584-3582

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    To the
Guarantor:AGL Resources Inc.

    Ten
Peachtree Place NE, Suite 1000

    Atlanta,
Georgia  30309

    Attention:  Treasurer

    Telecopy:  (404)
584-3589

    Telephone:  (404)
584-3582

     

    To the
Administrative Agent:Bank of America, N.A.

    Agency
Management

    NC1-001-15-14

    101 N.
Tryon Street, 15th Floor

    Charlotte,
North Carolina  28255

    Attention:  Maria
A. McClain

    Telecopy
Number:  (704) 409-0913

     

    To the
Issuing Bank:Bank of America, N.A.

    MC:
PA6-580-02-30

    One Fleet
Way

    Scranton,
Pennsylvania  18507

    Attention:  Michael
Grizzanti, VP, Operations Manager

    Telecopy
Number:  (570) 330-4214

    Email:  michael.a.grizzanti@bankofamerica.com

     

    To any
other Lender:the address set forth in the Administrative

    Questionnaire
or the Assignment and Acceptance

    Agreement
executed by such Lender

     

    provided that any notice,
request or demand to or upon the Administrative Agent or the Lenders shall not
be effective until received.

     

    Section
12.3.No Waiver;
Cumulative Remedies.  No failure to exercise and no
delay in exercising, on the part of the Administrative Agent, the Issuing Bank,
or any Lender, any right, remedy, power or privilege hereunder or under the
other Credit Documents shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, remedy, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege.  The rights, remedies, powers and
privileges herein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.

     

    Section
12.4.Survival of
Representations and Warranties.  All representations and
warranties made hereunder, in the other Credit Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of all
Extensions of Credit hereunder and for a period of one year after the
indefeasible payment in full of all Obligations and the termination of this
Agreement and the other Credit Documents.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section
12.5.Payment of
Expenses and Taxes.  The Borrower agrees (a) to pay or
reimburse the Administrative Agent for all its reasonable out-of-pocket costs
and expenses incurred in connection with the development, preparation and
execution of, and any amendment, supplement or modification to, this Agreement
and the other Credit Documents and any other documents prepared in connection
herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including the reasonable fees and
disbursements of counsel to the Administrative Agent and filing and recording
fees and expenses, with statements with respect to the foregoing to be submitted
to the Borrower prior to the Closing Date (in the case of amounts to be paid on
the Closing Date) and from time to time thereafter on a quarterly basis or such
other periodic basis as the Administrative Agent shall deem appropriate,
(b) to pay or reimburse the Issuing Bank for all its costs and expenses in
connection with the issuance of the Letter of Credit and any modifications or
amendments thereof, (c) to pay or reimburse each Lender, the Issuing Bank,
and the Administrative Agent for all its costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Agreement, the other Credit Documents and any such other documents, including
the fees and disbursements of counsel (including the allocated fees and expenses
of in-house counsel) to each Lender and of counsel to the Administrative Agent,
(d) to pay, indemnify, and hold each Lender, the Issuing Bank, and the
Administrative Agent harmless from, any and all recording and filing fees and
any and all liabilities with respect to, or resulting from any delay in paying,
stamp, excise and other taxes, if any, that may be payable or determined to be
payable in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Credit Documents and any such other documents, and
(e) to pay, indemnify, and hold each Lender, the Administrative Agent, the
Issuing Bank and their respective officers, directors, employees, affiliates,
agents and controlling persons (each, an “Indemnitee”) harmless from
and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, the other Credit Documents and
any such other documents, including any of the foregoing relating to the use of
the Letter of Credit or the violation of, noncompliance with or liability under,
any Environmental Law applicable to the operations of any Group Member or any of
their Properties and the reasonable fees and expenses of legal counsel in
connection with claims, actions or proceedings by any Indemnitee against any
Credit Party under any Credit Document (all the foregoing in this clause (d),
collectively, the “Indemnified
Liabilities”), provided, that the Borrower
shall have no obligation hereunder to any Indemnitee with respect to Indemnified
Liabilities to the extent such Indemnified Liabilities are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of such
Indemnitee.  Without limiting the foregoing, and to the extent
permitted by applicable law, the Borrower agrees not to assert and to cause its
Subsidiaries not to assert, and hereby waives and agrees to cause its
Subsidiaries to waive, all rights for contribution or any other rights of
recovery with respect to all claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature, under or
related to Environmental Laws, that any of them might have by statute or
otherwise against any Indemnitee.  All amounts due under this Section
12.5 shall be payable not later than 10 days after written demand
therefor.  Statements payable by the Borrower pursuant to this Section
12.5 shall be submitted to the Treasurer, AGL Resources Inc. (Telephone
No. 404/584-3582) (Telecopy No. 404/584-3589), at the address of the
Borrower set forth in Section 12.2, or to such other Person or address as may be
hereafter designated by the Borrower in a written notice to the Administrative
Agent.  The agreements in this Section 12.5 shall survive repayment of
the Reimbursement Obligations and all other amounts payable
hereunder.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section
12.6.Successors and
Assigns; Participations and Assignments.  (a) This Agreement
shall be binding upon and inure to the benefit of the Borrower, the Guarantor,
the Lenders, the Issuing Bank, the Administrative Agent, all future holders of
any Extensions of Credit and their respective successors and assigns, except
that neither the Borrower nor the Guarantor may assign or transfer any of its
rights or obligations under this Agreement without the prior written consent of
the Issuing Bank and each Lender.

     

    (b)Any
Lender other than any Conduit Lender may, without the consent of the Borrower,
in accordance with applicable law, at any time sell to one or more banks,
financial institutions or other entities (each, a “Participant”) participating
interests in any Extensions of Credit made by such Lender, any Commitment of
such Lender and any other Reimbursement Obligations and other interests of such
Lender hereunder and under the other Credit Documents.  In the event
of any such sale by a Lender of a participating interest to a Participant, such
Lender’s obligations under this Agreement to the other parties to this Agreement
shall remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any Extensions of
Credit and other Reimbursement Obligations for all purposes under this Agreement
and the other Credit Documents, and the Borrower and the Administrative Agent
shall continue to deal solely and directly with such Lender in connection with
such Lender’s rights and obligations under this Agreement and the other Credit
Documents.  In no event shall any Participant under any such
participation have any right to approve any amendment or waiver of any provision
of any Credit Document, or any consent to any departure by any Credit Party
therefrom, except to the extent that such amendment, waiver or consent would
reduce the principal of, or interest on, any Extensions of Credit or any fees
payable hereunder, postpone the date of the final maturity of any Extensions of
Credit or release the Guarantor from its obligations under Article Nine of this
Agreement, in each case to the extent subject to such
participation.  The Borrower agrees that if amounts outstanding under
this Agreement and any Extensions of Credit and other Reimbursement Obligations
are due or unpaid, or shall have been declared or shall have become due and
payable upon the occurrence of an Event of Default, each Participant shall, to
the maximum extent permitted by applicable law, be deemed to have the right of
setoff in respect of its participating interest in amounts owing under this
Agreement to the same extent as if the amount of its participating interest were
owing directly to it as a Lender under this Agreement, provided that, in purchasing
such participating interest, such Participant shall be deemed to have agreed to
share with the Lenders the proceeds thereof as provided in Section 12.7(a) as
fully as if it were a Lender hereunder.  The Borrower also agrees that
each Participant shall be entitled to the benefits of Sections 2.6, 2.7 and 3.9
with respect to its participation in the Commitments and any Extensions of
Credit and other Reimbursement Obligations outstanding from time to time as if
it was a Lender; provided that, in the case of
Section 3.9, such Participant shall have complied with the requirements of said
Section and provided,
further, that no Participant shall be entitled to receive any greater
amount pursuant to any such Section than the transferor Lender would have been
entitled to receive in respect of the amount of the participation transferred by
such transferor Lender to such Participant had no such transfer occurred. Each
Lender selling participations (other than the sale of participations to a Lender
Affiliate) shall use its commercially reasonable efforts to provide prompt
notice to the Borrower and the Administrative Agent of such participations and
of the identity of the purchasers of such participations; provided that no delay or
failure of such notice to be so given shall affect the validity of such
sale.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (c)Any
Lender may assign to one or more Eligible Assignees (each an “Assignee”) all or a portion
of its rights and obligations under this Agreement (including all or a portion
of its Commitment and any Extensions of Credit and other Reimbursement
Obligations at the time owing to it); provided that (i) except
in the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitment and any Extensions of Credit at the time owing to it or in
the case of an assignment to a Lender or a Lender Affiliate, the aggregate
amount of the Commitment (which for this purpose includes any Extensions of
Credit outstanding thereunder) of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Acceptance with respect
to such assignment is delivered to the Administrative Agent) shall not be less
than $5,000,000, unless each of the Administrative Agent and the Borrower
otherwise consents to such lesser amount, (iii) each partial assignment
shall be made as an assignment of a proportionate part of all the assigning
Lender’s rights and obligations under this Agreement with respect to any
Extensions of Credit or the Commitment assigned and (iv) the parties to
each assignment shall execute and deliver to the Administrative Agent an
Assignment and Acceptance, together with a processing and recordation fee of
$3,500, and such Assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an administrative questionnaire.  Upon (i) the
execution and delivery of the Assignment and Acceptance by the assigning Lender
and such Assignee, (ii) acceptance and recording thereof by the Administrative
Agent pursuant to paragraph (c) of this Section, (iii) consent thereof from the
Borrower to the extent required pursuant to this clause (c) and (iv) if such
Assignee is not a United States person (as such term is defined in Section
7701(a)(30) of the Code), compliance by such Person with Section 3.9, from and
after the effective date specified in each Assignment and Acceptance, such
Assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations of a
Lender under this Agreement, and the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Acceptance, be released
from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2,6, 2.7, 3.9 and
12.5).  Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this paragraph shall
be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (c) of
this Section.

     

    (d)The
Administrative Agent shall, on behalf of the Borrower, maintain at its address
referred to in Section 12.2 a copy of each Assignment and Acceptance delivered
to it and a register (the “Register”) for the
recordation of the names and addresses of the Lenders and the Commitment of, and
the principal amount of any Extensions of Credit owing to, each Lender from time
to time.  The entries in the Register shall be conclusive, in the
absence of manifest error, and the Borrower, each other Credit Party, the
Administrative Agent, the Issuing Bank, and the Lenders shall treat each Person
whose name is recorded in the Register as the owner of any Extensions of Credit
and other Reimbursement Obligations for all purposes of this
Agreement.  Any assignment of any Extensions of Credit and other
Reimbursement Obligations shall be effective only upon appropriate entries with
respect thereto being made in the Register.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (e)Upon
its receipt of an Assignment and Acceptance executed by an assigning Lender, an
Assignee and any other Person whose consent is required by Section 12.6(c),
together with payment to the Administrative Agent of a registration and
processing fee of $3,500, the Administrative Agent shall (i) promptly accept
such Assignment and Acceptance and (ii) record the information contained therein
in the Register on the effective date determined pursuant thereto.

     

    (f)For
avoidance of doubt, the parties to this Agreement acknowledge that the
provisions of this Section 12.6 concerning assignments relate only to absolute
assignments, and that such provisions do not prohibit pledges or collateral
assignments creating security interests to secure such Lender’s obligations,
including any pledge or assignment by a Lender to any Federal Reserve Bank
pursuant to Regulation A of the Board and any operating circular issued by
the Board or any Federal Reserve Bank or other applicable laws or regulations;
provided that
(i) no such Lender shall be relieved of its obligations hereunder as a
result of any such pledge or collateral assignment, and (ii) no such
pledgee or collateral assignee shall be considered a “Lender” hereunder or be
entitled to require the Lender effecting such pledge or collateral assignment to
take or omit to take any action hereunder.

     

    (g)Each
of the Borrower, the Guarantor, each Lender, the Issuing Bank, and the
Administrative Agent hereby confirms that it will not institute against a
Conduit Lender or join any other Person in instituting against a Conduit Lender
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding under any state bankruptcy or similar law, for one year and one day
after the payment in full of the latest maturing commercial paper note issued by
such Conduit Lender; provided,
however, that each Lender designating any Conduit Lender hereby agrees to
indemnify, save and hold harmless each other party hereto for any loss, cost,
damage or expense arising out of its inability to institute such a proceeding
against such Conduit Lender during such period of forbearance.

     

    Section
12.7.Adjustments;
Set-off.  (a) Except to the extent that this Agreement
expressly provides for payments to be allocated to a particular Lender or to the
Lenders under the Facility, if any Lender (a “Benefitted Lender”) shall,
at any time after the Reimbursement Obligations hereunder shall immediately
become due and payable pursuant to Section 10.2, receive any payment of all or
part of the Reimbursement Obligations owing to it, 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 10.1(g), or
otherwise), in a greater proportion than any such payment to or collateral
received by any other Lender, if any, in respect of the Reimbursement
Obligations owing to such other Lender, such Benefitted Lender shall purchase
for cash from the other Lenders a participating interest in such portion of the
Reimbursement Obligations owing to each such other Lender, or shall provide such
other Lenders with the benefits of any such collateral, as shall be necessary to
cause such Benefitted Lender to share the excess payment or benefits of such
collateral ratably with each of the Lenders; provided, however, that if
all or any portion of such excess payment or benefits is thereafter recovered
from such Benefitted Lender, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but without
interest.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b)In
addition to any rights and remedies of the Lenders provided by law, each Lender
shall have the right, unless they have agreed to the contrary, without prior
notice to the Borrower or the Guarantor, any such notice being expressly waived
by the Borrower and the Guarantor to the extent permitted by applicable law,
upon any amount becoming due and payable by the Borrower and the Guarantor
hereunder (whether at the stated maturity, by acceleration or otherwise), to set
off and appropriate and apply against such amount any and all deposits (general
or special, time or demand, provisional or final), in any currency, and any
other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Lender or any branch or agency thereof to or for the
credit or the account of the Borrower or the Guarantor, as the case may
be.  Each Lender agrees promptly to notify the Borrower and the
Administrative Agent after any such setoff and application made by such Lender,
provided that the
failure to give such notice shall not affect the validity of such setoff and
application.

     

    Section
12.8.Counterparts.  This
Agreement may be executed by one or more of the parties to this Agreement on any
number of separate counterparts, and all of said counterparts taken together
shall be deemed to constitute one and the same instrument.  Delivery
of an executed signature page of this Agreement by facsimile transmission shall
be effective as delivery of a manually executed counterpart hereof.  A
set of the copies of this Agreement signed by all the parties shall be lodged
with the Borrower and the Administrative Agent.

     

    Section
12.9.Severability.  Any
provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

     

    Section
12.10.Integration.  This
Agreement and the other Credit Documents represent the entire agreement of the
Borrower, the Guarantor, the Administrative Agent, the Issuing Bank, and the
Lenders with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent, the Issuing Bank, or any Lender relative to the subject matter hereof not
expressly set forth or referred to herein or in the other Credit
Documents.

     

    Section
12.11.Governing
Law.  This Agreement and the rights and obligations of the
parties under this Agreement shall be governed by, and construed and interpreted
in accordance with, the law of the State of New York.

     

    Section 12.12.Submission To Jurisdiction;
Waivers.  Each of
the Borrower and the Guarantor hereby irrevocably and
unconditionally:

     

    (a)submits
for itself and its property in any legal action or proceeding relating to this
Agreement and the other Credit Documents to which it is a party, or for
recognition and enforcement of any judgment in respect thereof, to the exclusive
general jurisdiction of the courts of the State of New York, the courts of the
United States 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 or the Guarantor, as the
case may be, at its address set forth in Section 12.2 or at such other
address of which the Administrative Agent shall have been notified pursuant
thereto;

     

    (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; and

     

    (e)waives,
to the maximum extent not prohibited by law, any right it may have to claim or
recover in any legal action or proceeding referred to in this Section any
special, exemplary, punitive or consequential damages.

     

    Section 12.13.Acknowledgements.  Each of the
Borrower and the Guarantor hereby acknowledges that:

     

    (a)it has
been advised by counsel in the negotiation, execution and delivery of this
Agreement and the other Credit Documents;

     

    (b)none
of the Administrative Agent, the Issuing Bank, or any Lender has any fiduciary
relationship with or duty to the Borrower or the Guarantor arising out of or in
connection with this Agreement or any of the other Credit Documents, and the
relationship between Administrative Agent, the Issuing Bank, and the Lenders, on
one hand, and the Borrower and the Guarantor, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and

     

    (c)no
joint venture is created hereby or by the other Credit Documents or otherwise
exists by virtue of the transactions contemplated hereby among the Lenders or
among the Borrower, the Guarantor, the Issuing Bank and the
Lenders.

     

    Section 12.14.Confidentiality.  Each of the
Administrative Agent, the Issuing Bank and each Lender agrees to keep
confidential all non-public information provided to it by any Credit Party
pursuant to this Agreement that is designated by such Credit Party as
confidential; provided
that nothing herein shall prevent the Administrative Agent, the Issuing Bank, or
any Lender from disclosing any such information (a) to the Administrative
Agent, the Issuing Bank, any other Lender or any Lender Affiliate,
(b) subject to an agreement to comply with the provisions of this Section,
to any actual or prospective Assignee or Participant or any direct or indirect
counterparty to any Hedge Agreement (or any professional advisor to such
counterparty), (c) to its employees, directors, agents, attorneys,
accountants, consultants and other representatives and professional advisors or
those of any of its affiliates, (d) upon the request or demand of any
Governmental Authority, (e) in response to any order of any court or other
Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (f) if requested or required to do so in connection with any
litigation or similar proceeding, (g) that has been publicly disclosed, (h) to
the National Association of Insurance Commissioners or any similar organization
or any nationally recognized rating agency that requires access to information
about a Lender’s investment portfolio in connection with ratings issued with
respect to such Lender, or (i) in connection with the exercise of any remedy
hereunder or under any other Credit Document.  Notwithstanding the
foregoing, the parties agree that this Agreement does not limit the ability of
any party hereto (or any employee, representative, or other agent of such party)
to disclose to any Person the tax treatment or tax structure of the financing
transactions evidenced by this Agreement; provided, however, the foregoing is
not intended to waive the attorney-client privilege or any other privileges,
including the tax advisor privilege under Section 7525 of the
Code.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section 12.15.Waivers of
Jury Trial.  Each of the Borrower, the Guarantor, the
Administrative Agent, the Issuing Bank, and the Lenders hereby irrevocably and
unconditionally waives trial by jury in any legal action or proceeding relating
to this Agreement or any other Credit Document and for any counterclaim
therein.

     

    Section 12.16.USA Patriot Act
Notice.  Each of the Lenders, the Issuing Bank, and the
Administrative Agent hereby notifies the Borrower and the Guarantor that
pursuant to the requirements of the USA Patriot Act (Title III of Pub. L.
107-56, as amended), it is required to obtain, verify and record information
that identifies the Borrower and the Guarantor, which information includes the
names and addresses of the Borrower and the Guarantor and any other information
that will allow such Lender, the Issuing Bank, or the Administrative Agent, as
applicable, to identify the Borrower and the Guarantor in accordance with such
Act.

     

    Section 12.17Acknowledgement and Consent to
Supplemental Indenture.  Each of the Administrative Agent, the
Issuing Bank, and the other Lenders (i) acknowledges and consents to, and
agrees to be bound by, the provisions of Article II of the Supplemental
Indenture as the same are applicable to the Administrative Agent, the Issuing
Bank and the other Lenders, and (ii) agrees that the Bond Insurer and the
other parties to the Supplemental Indenture shall be entitled to rely upon the
last paragraph of Section 10.2 herein and this Section 12.17 as third
party beneficiaries of the provisions thereof and hereof.  So long as
no Bond Insurer Event of Default shall have occurred and continues to exist,
this Section 12.17 and the last paragraph of Section 10.2 herein shall
not be amended, supplemented or modified without the prior written consent of
the Bond Insurer.

     

     

    
      
        
          --

        

         

      

      
         

        
          

        

      

      
         

      

    

    

     

    Section 12.18.Consent to Insurance
Endorsement.  Each of the Administrative Agent, the Issuing
Bank and the other Lenders further consents to the issuance by the Bond Insurer
of an endorsement to the Bond Insurance Policy in the form attached hereto as
Annex IV.

     

    In
Witness Whereof, the parties hereto have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officers as of the
day and year first above written.

    
      	
               
      

            	
              Pivotal
      Utility Holdings, Inc.,

            

    

    
      	
               
      

            	
                as
      Borrowers

            

    

     

    
      	
               
      

            	
              By:

            

    

    
      	
               
      

            	
              Name:

            

    

    
      	
               
      

            	
              Title:

            

    

     

    
      	
               
      

            	
              AGL
      Resources Inc.,

            

    

    
      	
               
      

            	
                as
      Guarantor

            

    

     

    
      	
               
      

            	
              By:

            

    

    
      	
               
      

            	
              Name:

            

    

    
      	
               
      

            	
              Title:

            

    

    

    
      
        
          (Signature
Page to Letter of Credit and Security Agreement)

        

         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              Bank
      of America, N.A.

            

    

    
      	
               
      

            	
                as
      Administrative Agent, Issuing Bank and a
Lender

            

    

     

    
      	
               
      

            	
              By:

            

    

    
      	
               
      

            	
              Name:

            

    

    
      	
               
      

            	
              Title:

            

    

    
      
        
          (Signature
Page to Letter of Credit and Security Agreement)

          

        

         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              The
      Bank of Tokoyo-Mitsubishi UFJ, Ltd., New York
  Branch,

            

    

    
      	
               
      

            	
                as
      Syndication Agent and a Lender

            

    

     

    
      	
               
      

            	
              By:

            

    

    
      	
               
      

            	
              Name:

            

    

    
      	
               
      

            	
              Title:

            

    

     

    
      	
               
      

            	
              By:

            

    

    
      	
               
      

            	
              Name:

            

    

    
      	
               
      

            	
              Title:

            

    

    

    

    
      
        
          (Signature
Page to Letter of Credit and Security Agreement)

          

        

         

      

      
         

        
          

        

      

      
         

      

    

    Schedule
1.1

    

    Lender
Commitments

    
      	
              Lender

            	
              Commitment

            
	
              Bank
      of America, N.A.

            	
              $19,788,493

            
	
              The
      Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch

            	
               

              $19,788,493

            
	 
      	 
      
	
              Total

            	
              $39,576,986

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Schedule
5.14

    

    Subsidiaries

    

     

    
      	
              Name

            	
              Jurisdiction

              of

              Organization

            	 	
              %
      of Capital Stock owned by AGL Resources Inc. or its
      Subsidiaries

            	 
	
              AGL
      C&I Energy Services, Inc.

            	
              Delaware

            	 	 	100	%
	
              AGL
      Capital Corporation

            	
              Nevada

            	 	 	100	%
	
              AGL
      Capital Trust I

            	
              Delaware

            	 	 	100	%
	
              AGL
      Capital Trust II

            	
              Delaware

            	 	 	100	%
	
              AGL
      Investments, Inc.

            	
              Georgia

            	 	 	100	%
	
              AGL
      Macon Holdings, Inc.

            	
              Georgia

            	 	 	100	%
	
              AGL
      Networks, LLC

            	
              Delaware

            	 	 	100	%
	
              AGL
      Resources Inc. Political Action Committee, Inc.

            	
              Georgia

            	 	
              100%-Nonprofit
      Corporation

            	 
	
              AGL
      Resources Private Foundation Inc.

            	
              Georgia

            	 	
              100%-Nonprofit
      Corporation

            	 
	
              AGL
      Rome Holdings, Inc.

            	
              Georgia

            	 	 	100	%
	
              AGL
      Services Company

            	
              Georgia

            	 	 	100	%
	
              Atlanta
      Gas Light Company

            	
              Georgia

            	 	 	100	%
	
              Chattanooga
      Gas Company

            	
              Tennessee

            	 	 	100	%
	
              Compass
      Energy Consulting, LLC

            	
              Virginia

            	 	 	100	%
	
              Compass
      Energy Gas Services, LLC

            	
              Virginia

            	 	 	100	%
	
              Compass
      Energy Services, Inc.

            	
              Virginia

            	 	 	100	%
	
              Customer
      Care Services, Inc.

            	
              Georgia

            	 	 	100	%
	
              Employee
      Care Program, Inc.

            	
              Georgia

            	 	
              100%-Nonprofit
      Corporation

            	 
	
              Energy
      Risk Insurance Services Company

            	
              British
      Virgin Islands

            	 	 	100	%
	
              Georgia
      Gas Company

            	
              Georgia

            	 	 	100	%
	
              Georgia
      Natural Gas Company

            	
              Georgia

            	 	 	100	%
	
              Global
      Energy Resources Insurance Corporation

            	
              Hawaii

            	 	 	100	%
	
              Golden
      Triangle Storage, Inc.

            	
              Delaware

            	 	 	100	%
	
              HPMT,
      Kft.

            	
              Hungary

            	 	 	100	%
	
              Jefferson
      Island Storage & Hub, LLC

            	
              Delaware

            	 	 	100	%
	
              Magnolia
      Enterprise Holdings, Inc.

            	
              Georgia

            	 	 	100	%
	
              NUI
      Capital Corp.

            	
              Florida

            	 	 	100	%
	
              NUI
      Corporation

            	
              New
      Jersey

            	 	 	100	%
	
              NUI
      Energy Brokers, Inc.

            	
              Delaware

            	 	 	100	%
	
              NUI
      Energy, Inc.

            	
              Delaware

            	 	 	100	%
	
              NUI
      Hungary, Inc.

            	
              Delaware

            	 	 	100	%
	
              NUI
      International, Inc.

            	
              Delaware

            	 	 	100	%
	
              NUI
      Sales Management, Inc.

            	
              Delaware

            	 	 	100	%
	
              NUI
      Saltville Storage, Inc.

            	
              Delaware

            	 	 	100	%
	
              NUI
      Service, Inc.

            	
              New
      Jersey

            	 	 	100	%
	
              OAS
      Group, Inc.

            	
              New
      Jersey

            	 	 	100	%
	
              Pivotal
      Energy Services, Inc.

            	
              Georgia

            	 	 	100	%
	
              Pivotal
      Jefferson Island Storage & Hub, LLC

            	
              Delaware

            	 	 	100	%
	
              Pivotal
      LNG, Inc.

            	
              Delaware

            	 	 	100	%
	
              Pivotal
      Propane of Virginia, Inc.

            	
              Delaware

            	 	 	100	%
	
              Pivotal
      Storage, Inc.

            	
              Delaware

            	 	 	100	%
	
              Pivotal
      Utility Holdings, , Inc.

            	
              New
      Jersey

            	 	 	100	%
	
              Sequent
      Energy Canada Corp.

            	
              Delaware

            	 	 	100	%
	
              Sequent
      Energy Management, L.P.

            	
              Georgia

            	 	 	100	%
	
              Sequent
      Energy Marketing, L.P.

            	
              Georgia

            	 	 	100	%
	
              Sequent
      Energy Services Inc.

            	
              Delaware

            	 	 	100	%
	
              Sequent
      Holdings, LLC

            	
              Georgia

            	 	 	100	%
	
              Sequent,
      LLC

            	
              Georgia

            	 	 	100	%
	
              Southeastern
      LNG, Inc.

            	
              Georgia

            	 	 	100	%
	
              SouthStar
      Energy Services LLC

            	
              Delaware

            	 	 	70	%
	
              T.I.C.
      Enterprises, LLC

            	
              Delaware

            	 	 	100	%
	
              Trustees
      Investments, Inc.

            	
              Georgia

            	 	 	100	%
	
              Virginia
      Gas Company

            	
              Delaware

            	 	 	100	%
	
              Virginia
      Natural Gas, Inc.

            	
              Virginia

            	 	 	100	%

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Schedule
5.16

    

    Environmental
Matters

     

    
      	
               
      

            	
              1.Manufactured
      Gas Plants.

            

    

     

    Georgia.  Atlanta
Gas Light Company (“AGLC”) is required to
investigate possible environmental contamination at manufactured gas plants (I)
and, if necessary, clean up any contamination.  AGLC has been
associated with ten MGP sites in Georgia and three in Florida.  Based
on investigations to date, cleanup has either already occurred or is likely at
most of these sites.  As of June 30, 2006, the remediation program in
Georgia was approximately 100% complete, with the exception of ground water
conditions.  As reported in Holdings Quarterly Report on Form 10-Q for the
quarter ended June 30, 2006, the projected costs of the remaining
remediation at these sites are estimated to be $25 million, with additional
future costs for the Florida sites in the range of $7 million to
$11 million.  

     

    New Jersey.  In New
Jersey, Pivotal Utility Holdings, Inc. (f/k/a NUI Utilities, Inc.) (“PUHI”), the utility
subsidiary of NUI Corporation (“NUI”) owns five properties
where former MGPs were operated.  A sixth MGP site, formerly operated by
Elizabethtown Gas, a division of PUHI, operating in New Jersey (“ETG”), is now owned by a
church.  

     

    Five of
the six sites in New Jersey are under a Memorandum Agreement (MOA), and the
sixth site is subject to an Administration Consent Order (ACO) with the New
Jersey Department of Environmental Protection (NJDEP).  The MOAs and
ACO require PUHI to investigate on-site contamination, and if required by the
NJDEP, investigate off-site impacts as well.  Various investigation
and cleanup investigations have been conducted and are progressing slowly, but
cleanups are likely at most sites.  Based upon our review of these sites to
date, the likely estimated cost range to address the New Jersey MGP sites is
$61 million to $119 million.  These cost ranges are
estimates.

     

    ETG’s
prudently incurred remediation costs for the New Jersey properties have been
authorized by the New Jersey Board of Public Utilities to be recoverable in
rates through ETG’s Remediation Adjustment Clause.  As a result, ETG has
recorded a regulatory asset of approximately $63 million, inclusive of
interest, as a regulatory asset, reflecting both recorded future costs and
accrued interest.  PUHI has also recovered a portion of MGP remediation
costs incurred in New Jersey from the company’s insurance carriers.

     

    Other
States.  Outside of New Jersey, NUI Corporation owns, or
previously owned, ten properties located in the states of North Carolina, South
Carolina, Pennsylvania, New York and Maryland on which MGPs were operated by NUI
or by other parties in the past.  Two sites (Athens, Pennsylvania;
Reidsville, North Carolina) have been sold to third parties, who have agreed to
indemnify NUI against environmental liabilities. 

     

    Of these
ten sites, only one site (Elizabeth City, North Carolina) has had any regulatory
activity over the past ten years.  The Elizabeth City site is subject to an
Administrative Consent Order with the North Carolina Department of Environment
and Natural Resources (“NCDENR”), dated
October 31, 2001, and under such order, the Company has been directed by
the NCDENR to enter the formal site investigation stage. 

     

    Currently,
there is only limited information available to assess the potential
environmental liability associated with these non-New Jersey sites, and the
liability for these sites will remain an uncertainty until a more vigorous
environmental assessment is performed.  Regarding the Elizabeth City site,
experience at other similar sites suggests that the costs for remediation of
this site will likely range from $10 to $20 million. There is one other
site in North Carolina where investigation and remediation is probable, although
no regulatory order exists and there is not currently any basis to reasonably
estimate the costs of such actions. For the remaining sites, no basis for
liability has been asserted. 

     

    NUI Environmental
Reserves:  Although the actual total cost of future
environmental investigation and remediation efforts cannot be reasonably
estimated, we have recorded on an undiscounted basis a total reserve of
approximately $70 million, which we believe represents the probable minimum
amount we may expend over the next 30 years. Of this reserve, approximately
$61 million relates to remediation of the New Jersey MGP properties and
approximately $9 million relates to remediation of the MGP properties
located outside the state of New Jersey.

     

    
      	
               
      

            	
              2.AGLC
      Pipeline Replacement.

            

    

     

    On
January 8, 1998, the Georgia Public Service Commission (“GPSC”) issued procedures and
set a schedule for hearings regarding alleged pipeline safety violations. 
On July 21, 1998, the GPSC approved a settlement between AGLC and the staff
of the GPSC that details a 10-year pipeline replacement program (“PRP”) for approximately
2,300 miles of cast iron and bare steel pipe.  October 1, 2004 marked
the beginning of the seventh year of the original 10-year PRP.

     

    On
June 10, 2005, AGLC and the GPSC entered into a Settlement Agreement that,
among other things, extends AGLC’s PRP by five years to require that all
replacements be completed by December 2013, with the timing of such
replacements to be subsequently determined through discussions with GPSC staff.
Under the Settlement Agreement, rates charged to customers will remain unchanged
through April 30, 2010, but AGLC will recognize reduced base rate revenues
of $5 million on an annual basis through April 30, 2010. The five-year
total reduction in recognized base rate revenues of $25 million will be
applied to the amount of costs incurred to replace pipe and subsequently
recovered from customers.

     

    For a
further description of environmental and pipeline replacement matters, see the
AGL Resources’ 10-K filings.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Schedule
7.2(i)

    

    Existing
Liens

    

     

    None

     

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Schedule
7.8

    

    Agreements
Prohibiting or Limiting Liens

     

    1.Indenture,
dated December 1, 1989, as amended, between Atlanta Gas Light Company and
The Bank of New York Mellon, as successor trustee, pursuant to which Atlanta Gas
Light Company issued its medium term notes.

     

    2.Agreements
pursuant to which Pivotal Utility Holdings Inc. (f/k/a NUI Utilities, Inc.)
issued $39.0 million Variable Rate Bonds, due June 1,
2026:

     

    (a)Loan
Agreement, dated June 1, 1996, between NUI Utilities, Inc. (f/k/a NUI
Corporation) and New Jersey Economic Development Authority.

     

    3.Loan
Agreement, dated May 1, 2007, between Pivotal Utility Holdings, Inc. (f/k/a
NUI Utilities, Inc. and NUI Corporation) and New Jersey Economic Development
Authority, as amended by that certain First Amendment to Loan Agreement, dated
June 1, 2008, pursuant to which NUI Utilities issued $54.6 million bonds
due June 1, 2032.

     

    4.Loan
Agreement, dated December 1, 1998, between NUI Utilities, Inc. (f/k/a NUI
Corporation) and New Jersey Economic Development Authority, pursuant to which
NUI Utilities issued $40.0 million 5.25% bonds due November 1,
2033.

     

    5.Loan
Agreement, dated April 1, 2005, between Pivotal Utility Holdings, Inc. and
Brevard County, FL, as amended by that certain First Amendment to Loan
Agreement, dated June 1, 2008, pursuant to which Pivotal Utility Holdings, Inc.
issued $20 million bonds due October 1, 2024.

     

    6.Loan
Agreement, dated April 1, 2005, between Pivotal Utility Holdings, Inc. and
Jersey Economic Development Authority, as amended by that certain First
Amendment to Loan Agreement, dated June 1, 2008, pursuant to which Pivotal
Utility Holdings, Inc. issued $46.5 million bonds due October 1,
2022.

     

    7.Letter
of Credit and Security Agreement, dated as of June 5, 2008, by and among Pivotal
Utility Holdings, Inc., AGL Resources Inc., the Lenders party thereto and
SunTrust Bank.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Annex I

    

    Form
of Letter of Credit

    Irrevocable
Letter of Credit

    

    

    September
4, 2008

    

    Letter of
Credit No._____________

     

    The Bank
of New York Mellon,

    as Trustee and Tender
Agent

    10161
Centurion Parkway

    Jacksonville,
Florida 32256

     

    Ladies
and Gentlemen:

     

    We hereby
establish in your favor at the request and for the account of Pivotal Utility
Holdings, Inc., a New Jersey corporation (the “Company”), our irrevocable
letter of credit in the amount of U.S. $39,576,986 (Thirty-Nine Million Five
Hundred Seventy-Six Thousand Nine Hundred Eighty-Six Dollars) in connection with
the Bonds (as defined below) available with ourselves by sight payment against
presentation of one or more signed and dated demands addressed by you to Bank of
America, N.A., each in the form of Annex A (an “A Drawing”), Annex B (a
“B Drawing”),
Annex C (a “C
Drawing”), or Annex D (a “D Drawing”) hereto, with all instructions
in brackets therein being complied with.  Each such demand must be
presented to us in its original form or by facsimile transmission of such
original form.

     

    Each such
presentation must be made at or before 5:00 p.m. New York time on a Business Day
(as hereinafter defined) to our Scranton, Pennsylvania office (presently located
at One Fleet Way, Mail Code: PA6-580-02-30, Scranton, PA 18507), or by facsimile
transmission to fax number (800) 755-8743.

     

    This
Letter of Credit expires on September 6, 2010 or, if such date is not a Business
Day, then on the first (1st) succeeding Business Day thereafter (the “Expiration
Date”).

     

    As used
herein the term “Business Day” shall mean a day on which our Scranton,
Pennsylvania Letter of Credit Office is open for business.

     

    The
amount of any demand presented hereunder will be the amount inserted in numbered
Paragraph 4 of said demand.  By honoring any such demand we make
no representation as to the correctness of the amount demanded.

     

    We hereby
agree with you that each demand presented hereunder in full compliance with the
terms hereof will be duly honored by our payment to you of the amount of such
demand, in immediately available funds of Bank of America, N.A.:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (i)not
later than 10:00 a.m., New York time, on the Business Day following the Business
Day on which such demand is presented to us as aforesaid if such presentation is
made to us at or before noon, New York time, or

     

    (ii)not
later than 10:00 a.m., New York time, on the second Business Day following the
Business Day on which such demand is presented to us as aforesaid, if such
presentation is made to us after noon, New York time.

     

    Notwithstanding
the foregoing, any demand presented hereunder, in full compliance with the terms
hereof, for a C Drawing will be duly honored (i) not later than
2:30 p.m., New York time, on the Business Day on which such demand is
presented to us as aforesaid if such presentation is made to us at or before
12:00 p.m., New York time, and (ii) not later than 11:00 a.m., New
York time, on the Business Day following the Business Day on which such demand
is presented to us as aforesaid if such presentation is made to us after
12:00 p.m., New York time.

     

    With
respect to any demand that is honored hereunder, the total amount of this Letter
of Credit shall be reduced as follows:

     

    (A)With
respect to any A Drawing, the total amount of this Letter of Credit shall be
reduced, as to all demands subsequent to the applicable demand, by the amount of
the applicable demand as of the time of presentation of such demand; provided, however, that such
amount shall be automatically reinstated at the opening of business on the
eighth (8th) Business Day following the date such demand is honored by us,
unless (i) you shall have received notice from us by express courier,
authenticated SWIFT message, facsimile transmission, or registered mail no later
than the close of business on the seventh (7th) Business Day after such demand
is honored by us that there shall be no such reinstatement, or (ii) such eighth
(8th) Business Day falls after the Expiration Date;

     

    (B)With
respect to any B Drawing, the total amount of this Letter of Credit shall
be reduced, as to all demands subsequent to the applicable demand, by the amount
of the applicable demand as of the time of presentation of such demand and shall
not be reinstated;

     

    (C)With
respect to any C Drawing, the total amount of this Letter of Credit shall
be reduced, as of the time of presentation of the applicable demand by the
amount of the applicable demand; provided, however, upon
receipt by Bank of America, N.A. of a certificate substantially in the form of
Annex G attached hereto from you, the principal and/or interest components of
the Stated Amount shall be automatically reinstated in the amounts shown on such
Annex G which have been paid to Bank of America, N.A.; provided, however, that in no
event will the total amount of all C Drawing reinstatements exceed the
total amount of all Letter of Credit reductions made pursuant to this
paragraph (C).

     

    Upon
presentation to us of a D Drawing in compliance with the terms of this
Letter of Credit, no further demand whatsoever may be presented
hereunder.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    No more
than one A Drawing which we honor shall be presented to us during any
consecutive twenty-seven (27) calendar day period.

     

    It is a
condition of this Letter of Credit that the amount available for drawing under
this Letter of Credit shall be decreased automatically without amendment upon
our receipt of each reduction authorization in the form of Annex E to this
Letter of Credit (with all instructions therein in brackets being complied with)
sent to us as a signed and dated original form.

     

    This
Letter of Credit is subject to, and engages us in accordance with the terms of,
the International Standby Practices 1998 (“ISP98”), International
Chamber of Commerce Publication No. 590; provided, however, that if
any provision of ISP98 contradicts a provision of this Letter of Credit such
provision of ISP98 will not be applicable to this Letter of
Credit.  Furthermore, we assume no liability or responsibility for
consequences arising out of the interruption of our business by Acts of God,
riots, civil commotions, insurrections, wars, acts of terrorism, or by any
strikes or lockouts, or any other causes beyond our control.  Matters
related to this Letter of Credit which are not covered by ISP98 will be governed
by the laws of the State of New York, including, without limitation, the Uniform
Commercial Code as in effect in the State of New York, except to the extent such
laws are inconsistent with the provisions of ISP98 or this Letter of
Credit.

     

    This
Letter of Credit is transferable and may be transferred more than once, but in
each case only in the amount of the full unutilized balance hereof to any single
transferee who you shall have advised us pursuant to Annex F has succeeded
The Bank of New York Mellon or a successor trustee and tender agent, as Trustee
and Tender Agent under the Trust Indenture, dated as of June 1, 1996, as
supplemented from time to time, including as supplemented by the First
Supplement to Trust Indenture, dated as of September 1, 2008 (as
supplemented, the “Indenture”), between the New
Jersey Economic Development Authority (the “Issuer”) and The Bank of New
York Mellon, as Trustee, pursuant to which U.S. $39,000,000 in aggregate
principal amount of the Issuer’s Gas Facilities Revenue Bonds, Series 1996 A
(NUI Corporation Project) (the “Bonds”) were
issued.  Transfers may be effected without charge to the transferor
and only through ourselves and only upon presentation to us of a duly executed
instrument of transfer in the form attached hereto as
Annex F.  Any transfer of this Letter of Credit as aforesaid must
be endorsed by us on the reverse hereof and may not change the place of
presentation of demands from our office in Scranton, Pennsylvania.

     

    All
payments hereunder shall be made from our own funds.

     

    This
Letter of Credit sets forth in full our undertaking, and such undertaking shall
not in any way be modified, amended, amplified or limited by reference to any
document, instrument or agreement referred to herein (including, without
limitation, the Bonds and the Indenture), except ISP98 to the extent ISP98 is
not inconsistent with or made inapplicable by this Letter of Credit; and any
such reference shall not be deemed to incorporate herein by reference any
document, instrument or agreement except ISP98.

     

    
      	
               
      

            	
              Bank
      of America, N.A.

            

    

     

    
      	
               
      

            	
              By

            

    

    
      	
               
      

            	
              Authorized
      Signature

            

    

     

    Letter of
Credit Office

    Telephone
No.: (570) 330-4214

    Facsimile
No.:  (800) 755-8743

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Annex A

    

    To
Bank of America, N.A.

    Irrevocable
Letter of Credit No._________________

     

    Bank
of America, N.A.

    Trade
Services Dept. Standby-Unit

    One
Fleet Way

    Scranton,
Pennsylvania  18507

     

    For
the Urgent Attention of Letter of Credit Manager

     

    The
Bank of New York Mellon, as Trustee and Tender Agent (the “Trustee”), hereby certifies
to Bank of America, N.A. (the “Bank”) with reference to
irrevocable Letter of Credit no. __________ (the “Letter of Credit”; the terms
the “Bonds”, “Business Day” and the “Indenture” used herein shall
have their respective meanings set forth in the Letter of Credit)
that:

     

    (1)the
Trustee is both the Trustee or a successor trustee and the tender agent or a
successor tender agent under the Indenture.

     

    (2)the
Trustee is making a demand for payment under the Letter of Credit with respect
to the payment, on an interest payment date (as defined in the Indenture), of
unpaid interest with respect to the Bonds.

     

    (3)the
amount of this demand for payment was computed in accordance with the terms and
conditions of the Bonds and the Indenture and is demanded in accordance with the
Indenture, which amount please remit to the undersigned as follows:

     

    [insert
remittance instructions].

     

    (4)the
amount hereby demanded under the Letter of Credit is $[insert
amount].

     

    (5)the
Trustee has contacted or attempted to contact by telephone an officer of the
bank’s Letter of Credit office in Scranton, Pennsylvania regarding the amount of
this demand and the date and time by which payment is demanded.

     

    (6)if
this demand is received by you at or before noon, New York time on a Business
Day, you must make payment on this demand at or before 10:00 a.m., New York
time, on the next Business Day.  If this demand is received by you
after noon, New York time, on a Business Day, you must make payment on this
demand at or before 10:00 a.m., New York time, on the second Business Day
following such Business Day.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              The
      Bank of New York Mellon,

            

    

    
      	
               
      

            	
              as
      Trustee and Tender Agent,

            

    

     

    
      	
               
      

            	
              By:

            

    

    
      	
               
      

            	
              Authorized
      Signature

            

    

    
      	
               
      

            	
              Date:

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Annex B

    

    To
Bank of America, N.A.

    Irrevocable
Letter of Credit No._________________

     

    Bank
of America, N.A.

    Trade
Services Dept. Standby-Unit

    One
Fleet Way

    Scranton,
Pennsylvania  18507

     

    For
the Urgent Attention of Letter of Credit Manager

     

    The
Bank of New York Mellon, as Trustee and Tender Agent (the “Trustee”), hereby certifies
to Bank of America, N.A. (the “Bank”) with reference to
irrevocable Letter of Credit No. __________ (the “Letter of Credit”; the terms
the “Bonds”, “Business Day” and the “Indenture” used herein shall
have their respective meanings set forth in the Letter of Credit)
that:

     

    (1)the
Trustee is both the Trustee or a successor trustee and the tender agent or a
successor tender agent under the Indenture.

     

    (2)the
Trustee is making a demand for payment under the Letter of Credit with respect
to the payment of the principal amount of, and the unpaid interest on, redeemed
Bonds upon an optional and/or mandatory redemption of less than all of the Bonds
currently outstanding.

     

    (3)the
amount of this demand for payment was computed in accordance with the terms and
conditions of the Bonds and the Indenture and is demanded in accordance with the
Indenture, which amount please remit to the undersigned as follows:

     

    [Insert
remittance instructions].

     

    (4)the
amount hereby demanded under the Letter of Credit is $[insert amount which is
the sum of the two amounts inserted in paragraph 5 below].

     

    (5)the
amount hereby demanded is equal to the sum of (a) $[insert amount] being drawn
with respect to the payment of the principal of the redeemed Bonds and
(b) $[insert amount] being drawn with respect to the payment of the unpaid
interest on the redeemed Bonds.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (6)the
Trustee has contacted or attempted to contact by telephone an officer of the
Bank’s Letter of Credit office in Scranton, Pennsylvania regarding the amount of
this demand and the date and time by which payment is demanded.

     

    (7)if
this demand is received by you at or before noon, New York time on a Business
Day, you must make payment on this demand at or before 10.00 a.m., New York
time, on the next Business Day.  If this demand is received by you
after noon, New York time, on a Business Day, you must make payment on this
demand at or before 10:00 a.m., New York time, on the second Business Day
following such Business Day.

     

    
      	
               
      

            	
              The
      Bank of New York Mellon,

            

    

    
      	
               
      

            	
              as
      Trustee and Tender Agent,

            

    

     

    
      	
               
      

            	
              By:

            

    

    
      	
               
      

            	
              Authorized
      Signature

            

    

    
      	
               
      

            	
              Date:

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Annex
C

    

    To
Bank of America, N.A.

    Irrevocable
Letter of Credit No.  ___________

     

    Bank
of America, N.A.

    Trade
Services Dept. Standby-Unit

    One
Fleet Way

    Scranton,
Pennsylvania  18507

     

    For
the Urgent Attention of Letter of Credit Manager.

     

    The
Bank of New York Mellon, as Trustee and Tender Agent (the “Trustee”), hereby certifies
to Bank of America, N.A. (the “Bank”) with reference to
Irrevocable Letter of Credit No. ________ (the “Letter of Credit”; the terms
the “Bonds”, “Business Day”
and the “Indenture” used herein shall
have their respective meanings set forth in the Letter of Credit)
that:

     

    (1)The
Trustee is both the Trustee or a successor trustee and the tender agent or a
successor tender agent under the Indenture.

     

    (2)The
Trustee is making a demand for payment under the Letter of Credit with respect
to the payment of the principal amount of, and interest due on, those Bonds
which the Remarketing Agent (as defined in the Indenture) has been unable to
remarket within the time limits established in the Indenture.

     

    (3)The
amount of this demand for payment was computed in accordance with the terms and
conditions of the Bonds and the Indenture and is demanded in accordance with the
Indenture, which amount please remit to the undersigned as follows:

     

    [Insert
Remittance Instructions].

     

    (4)The
amount hereby demanded under the Letter of Credit is $[insert amount which is
the sum of the two amounts inserted in paragraph 5 below].

     

    (5)The
amount of this demand is equal to the sum of (a) $[insert amount] being drawn
with respect to the payment of principal of the Bonds and (b) $[insert amount]
being drawn with respect to the payment of interest due on the
Bonds.

     

    (6)The
Trustee has contacted or attempted to contact by telephone an officer of the
Bank’s Letter of Credit office in Scranton, Pennsylvania regarding the amount of
this demand and the date and time by which payment is demanded.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (7)If
this demand is received by you at or before 12:00 p.m., New York time on a
Business Day, you must make payment on this demand at or before 2:30 p.m., New
York Time, on said Business Day.  If this demand is received by you
after 12:00 p.m., New York time, on a Business Day, you must make payment on
this demand at or before 11:00 a.m., New York time, on the Business Day
following said Business Day.

     

    
      	
               
      

            	
              The
      Bank of New York Mellon, as Trustee and Tender
  Agent,

            

    

     

    
      	
               
      

            	
              By:

            

    

    
      	
               
      

            	
              Authorized
      Signature

            

    

    
      	
               
      

            	
              Date:

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Annex
D

    

    To
Bank of America, N.A.

    Irrevocable
Letter of Credit No. ____________

     

    Bank
of America, N.A.

    Trade
Services Dept. Standby-Unit

    One
Fleet Way

    Scranton,
Pennsylvania  18507

     

    For
the Urgent Attention of Letter of Credit Manager.

     

    The
Bank of New York Mellon, as Trustee and Tender Agent (the “Trustee”), hereby certifies
to Bank of America, N.A. (the “Bank”) with reference to
irrevocable Letter of Credit No. __________ (the “Letter of Credit”; the terms
the “Bonds”, “Business Day”
and the “Indenture” used herein shall
have their respective meanings set forth in the Letter of Credit)
that:

     

    (1)The
Trustee is both the Trustee or a successor trustee and the tender agent or a
successor tender agent under the Indenture.

     

    (2)The
Trustee is making a demand for payment under the Letter of Credit with respect
to the payment, at stated maturity, upon acceleration following an Event of
Default (as defined in the Indenture), or upon redemption as a whole, of the
total unpaid principal of, and unpaid interest on, all of the Bonds which are
presently outstanding.

     

    (3)The
amount of this demand for payment was computed in accordance with the terms and
conditions of the Bonds and the Indenture and is demanded in accordance with the
Indenture, which amount please remit to the undersigned as follows:

     

    [Insert
Remittance Instructions].

     

    (4)The
amount hereby demanded under the Letter of Credit is $[insert amount which is
the sum of the two amounts set forth in paragraph 5, below].

     

    (5)The
amount of this demand is equal to the sum of (a) $[insert amount] being drawn
with respect to the payment of the unpaid principal of the outstanding Bonds and
(b) $[insert amount] being drawn with respect to the payment of the unpaid
interest on the outstanding Bonds.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (6)The
Trustee has contacted or attempted to contact by telephone an officer of the
bank’s Letter of Credit office in Scranton, Pennsylvania regarding the amount of
this demand and the date and time by which payment is demanded.

     

    (7)If
this demand is received by you at or before noon, New York time on a Business
Day, you must make payment on this demand at or before 10:00 a.m., New York
time, on the next Business Day.  If this demand is received by you
after noon, New York time, on a Business Day, you must make payment on this
demand at or before 10:00 a.m., New York time, on the second Business Day
following such Business Day.

     

    
      	
               
      

            	
              The
      Bank of New York Mellon, as Trustee and Tender
  Agent,

            

    

     

    
      	
               
      

            	
              By:

            

    

    
      	
               
      

            	
              Authorized
      Signature

            

    

    
      	
               
      

            	
              Date:

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Annex
E

    

    To
Bank of America, N.A.

    Irrevocable
Letter of Credit No. _________

     

    Bank
of America, N.A.

    Trade
Services Dept. Standby-Unit

    One
Fleet Way

    Scranton,
Pennsylvania  18507

     

    For
the Urgent Attention of Letter of Credit Manager

     

    Letter
of Credit Reduction Authorization

     

    The
Bank of New York Mellon, as Trustee and Tender Agent, with reference to Letter
of Credit No. __________ issued by Bank of America, N.A. (the “Bank”), hereby
unconditionally and irrevocably requests that the Bank decrease the amount
available for drawing under the Letter of Credit by $[insert
amount].

     

    [For
Signed Reduction Authorizations Only]

     

    
      	
               
      

            	
              The
      Bank of New York Mellon, as Trustee and Tender
  Agent,

            

    

     

    
      	
               
      

            	
              By:

            

    

    
      	
               
      

            	
              Authorized
      Signature

            

    

    
      	
               
      

            	
              Date:

            

    

    Signature
Guaranteed By

    

    [Insert
Name of Bank]

    

    

    By:______________________________

    [Insert
Name and Title]

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Annex
F

    

    To
Bank of America, N.A.

    Irrevocable
Letter of Credit No. __________

     

    Bank
of America, N.A.

    Trade
Services Dept. Standby-Unit

    One
Fleet Way

    Scranton,
Pennsylvania  18507

     

    For
the Urgent Attention of Letter of Credit Manager

    [Insert
Date]

     

    Subject:  Your
Letter of Credit No. _________

     

    Ladies
and Gentlemen:

     

    For value
received, we hereby irrevocably assign and transfer all of our rights under the
above-captioned Letter of Credit, as heretofore and hereafter amended, extended,
increased or reduced to:

     

    

    (Name of
Transferee)

     

    

     

    

     

    

    (Address
of Transferee)

     

    By this
transfer, all of our rights in the Letter of Credit are transferred to the
transferee, and the transferee shall have sole rights as beneficiary under the
Letter of Credit, including sole rights relating to any amendments, whether
increases or extensions or other amendments, and whether now existing or
hereafter made.  You are hereby irrevocably instructed to advise
future amendment(s) of the Letter of Credit to the transferee without our
consent or notice to us.

     

    The
original Letter of Credit is returned with all amendments to this
date.  Please notify the transferee in such form as you deem advisable
of this transfer and of the terms and conditions to this Letter of Credit,
including amendments as transferred.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    You are
hereby advised that the transferee named above has succeeded The Bank of New
York Mellon, or a successor trustee and tender agent, as Trustee and Tender
Agent under the Trust Indenture, dated as of June 1, 1996, as supplemented
from time to time, including as supplemented by the First Supplement to Trust
Indenture, dated as of September 1, 2008 (as supplemented, the “Indenture”) between the New
Jersey Economic Development Authority (the “Issuer”) and The Bank of New
York Mellon, as Trustee, pursuant to which U.S. $39,000,000 in aggregate
principal amount of Issuer’s Gas Facilities Revenue Bonds, Series 1996 A (NUI
Corporation Project) (the “Bonds”) were
issued.

     

    
      	
               
      

            	
              Very
      truly yours,

            

    

     

    
      	
               
      

            	
              [Insert
      Name of Transferor]

            

    

     

    
      	
               
      

            	
              By:

            

    

    
      	
               
      

            	
              [Insert
      Name and Title]

            

    

     

    
      	
               
      

            	
              Transferor’s
      Signature Guaranteed

            

    

     

    
      	
               
      

            	
              By:

            

    

    
      	
               
      

            	
              [Bank
      Name]

            

    

     

    
      	
               
      

            	
              By:

            

    

    
      	
               
      

            	
              [Insert
      Name and Title]

            

    

     

    By its
signature below, the undersigned transferee acknowledges that it has duly
succeeded The Bank of New York Mellon, or a successor trustee and tender agent,
as Trustee and Tender Agent under the Indenture.

     

    [Insert
Name of Transferee]

     

    By:______________________________

    [Insert
Name and Title]

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Annex
G

    

    TO
Bank of America, N.A.

    

    Irrevocable
Letter of Credit No. __________

     

    Bank
of America, N.A.

    Trade
Services Dept. Standby-Unit

    One
Fleet Way

    Scranton,
Pennsylvania  18507

     

    Re:Irrevocable
Letter of Credit No. __________

    
      

    

    Ladies
and Gentlemen:

     

    The
undersigned, a duly authorized officer of The Bank of New York Mellon, as
Trustee and Tender Agent (the
“Trustee”), hereby notifies Bank of America, N.A. (the “Bank”), with reference to
Letter of Credit No. __________ (the “Letter of Credit”; terms
defined therein and not otherwise defined herein shall have the meanings set
forth in the Letter of Credit) issued by the Bank in favor of the Trustee as
follows:

     

    1._________________________
is the Remarketing Agent under the Indenture for the holders of the
Bonds.

     

    2.The
Trustee has been advised by the Company or the Remarketing Agent that the amount
of $________________ paid to the Bank today by the Company or the Remarketing
Agent on behalf of the Company is a payment made to reimburse the Bank, pursuant
to the Letter of Credit and Security Agreement, dated as of September 4, 2008
(the “LOC Agreement”),
by and between the Company and the Bank, for amounts drawn under the Letter of
Credit pursuant to an [A-Drawing] [B-Drawing] [C-Drawing]
[D-Drawing].

     

    3.Of the
amount referred to in paragraph 2, $_______________ represents the aggregate
principal amount of Pledged Bonds resold or to be resold on behalf of the
Borrower.

     

    4.Of the
amount referred to in paragraph 2, $____________ represents accrued and unpaid
interest on such Pledged Bonds.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    In
Witness Whereof, the Trustee has executed and delivered this Certificate as of
this ______ day of _____________,____.

    

    
      	
               
      

            	
              The
      Bank of New York Mellon, as Trustee

            

    

    

    

    

    
      	
               
      

            	
              By:

            

    

    
      	
               
      

            	
                Name:

            

    

    
      	
               
      

            	
                Title:

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Annex II

    

    Form
of Assignment and Acceptance Agreement

     

    This
Assignment and Acceptance Agreement (this “Assignment Agreement”) is
dated as of the Effective Date set forth below and is entered into by and
between [Insert name of Assignor] (the “Assignor”) and [Insert name
of Assignee] (the “Assignee”).  Capitalized
terms used but not defined herein have the meanings provided in the Credit
Agreement identified below, receipt of a copy of which is hereby acknowledged by
the Assignee.  The Standard Terms and Conditions set forth in Annex 1
attached hereto are hereby agreed to and incorporated herein by reference and
made a part of this Assignment Agreement as if set forth herein in
full.

     

    For an
agreed consideration, the Assignor hereby irrevocably sells and assigns to the
Assignee, and the Assignee hereby irrevocably purchases and assumes from the
Assignor, subject to and in accordance with the Standard Terms and Conditions
and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (i) all of the Assignor’s rights and
obligations as a Lender under the Credit Agreement and any other documents or
instruments delivered pursuant thereto to the extent related to the amount and
percentage interest identified below of all of such outstanding rights and
obligations of the Assignor under the respective facilities identified below
(including, without limitation, all Commitments, all Letter of Credit and
participating interests therein, all L/C Obligations and Reimbursement
Obligations, and all other obligations and rights as a Lender under the Credit
Agreement and the other Credit Documents), and (ii) to the extent permitted to
be assigned under applicable law, all claims, suits, causes of action and any
other right of the Assignor (in its capacity as a Lender) against any Person,
whether known or unknown, arising under or in connection with the Credit
Agreement and the other Credit Documents, and any other documents or instruments
delivered pursuant thereto or the credit transactions governed thereby or in any
way based on or related to any of the foregoing, including, but not limited to,
contract claims, tort claims, malpractice claims, statutory claims and all other
claims at law or in equity related to the rights and obligations sold and
assigned pursuant to clause (i) above (the rights and obligations sold and
assigned pursuant to clauses (i) and (ii) above being referred to herein
collectively as, the “Assigned
Interest”).  Such sale and assignment is without recourse to
the Assignor and, except as expressly provided in this Assignment Agreement,
without representation or warranty by the Assignor.

     

    
      	
               
      

            	
              1.Assignor:______________________________

            

    

     

    
      	
               
      

            	
              2.Assignee:______________________________ [and
      is an Affiliate of Assignor]

            

    

     

    
      	
               
      

            	
              3.Borrower:Pivotal
      Utility Holdings, Inc., a New Jersey
corporation

            

    

     

    
      	
               
      

            	
              4.Administrative
      Agent:Bank of America, N.A., as the Administrative Agent under the Credit
      Agreement

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
              5.Credit
      Agreement:Letter of Credit and Security Agreement dated as of September 4,
      2008, by and among the Borrower, AGL Resources Inc., the Lenders from time
      to time party thereto, Bank of America, N.A., as Administrative Agent, The
      Bank of Tokyo-Mitsubishi UFJ, Ltd., as Syndication Agent, and Bank of
      America, N.A., as Issuing Bank

            

    

     

    
      	
               
      

            	
              6.Assigned
      Interest:

            

    

    
      	
              Interests
      Assigned

            	
              Aggregate
      Amount of Letter of Credit Commitments/L/C and Reimbursement Obligations
      for all Lenders

            	
              Amount
      of Letter of Credit Commitments/L/C and Reimbursement Obligations
      Assigned1

            	
              Percentage
      of Letter of Credit Commitments/L/C and Reimbursement Obligations2

            
	
              Letter
      of Credit Commitment (with pro rata share of L/C and Reimbursement
      Obligations)

            	 
      	 
      	 
      

    

     

    
      	
               
      

            	
              7.Trade
      Date:______________________________3

            

    

     

    
      	
               
      

            	
              8.Effective
      Date:______________________________4

            

    

    

      

    

      
      1Amount
to be adjusted by the counterparties to take into account any payments or
prepayments made between the Trade Date and the Effective
Date.

    

      
      2Set
forth, to at least 9 decimals, as a percentage of the Letter of Credit
Commitments, L/C and Reimbursement Obligations of all Lenders
thereunder.

    

      
      
        	
                 
      

              	
                3To
      be completed if the Assignor and the Assignee intend that the minimum
      assignment amount is to be determined as of the Trade
  Date.

              

      

       

    

      
      
        	
                 
      

              	
                4To
      be inserted by Administrative Agent and shall be the effective date of
      recordation of transfer in the register
  therefor.

              

      

       

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    The terms
set forth in this Assignment Agreement are hereby agreed to:

     

    
      	
               
      

            	
              Assignor:[Name
      of Assignor]

            

    

     

    
      	
               
      

            	
              By:

            

    

    
      	
               
      

            	
              Name:

            

    

    
      	
               
      

            	
              Title:

            

    

     

    
      	
               
      

            	
              Assignee:[Name
      of Assignee]

            

    

     

    
      	
               
      

            	
              By:

            

    

    
      	
               
      

            	
              Name:

            

    

    
      	
               
      

            	
              Title:

            

    

     

    [Consented
to and]5 Accepted:

     

    Bank of
America, N.A., as Administrative Agent

     

    By:

    Name:

    Title:

    

      

    

      
      
        	
                 
      

              	
                5To
      be added if the consent of the Administrative Agent is required by the
      terms of the Credit Agreement.

              

      

       

    

    
      
        
          --

        

         

      

      
         

        
          

        

      

      
         

      

    

    [Consented
to:]6

     

    Pivotal
Utility Holdings, Inc.

     

    By:

    Name:

    Title:

     

    [Consented
to:]7

     

    Bank
of America, N.A.

    as
Issuing Bank

     

    By:

    Name:

    Title:

    

    

      

    

      
      
        	
                 
      

              	
                6To
      be added if the consent of the Borrower is required by the terms of the
      Credit Agreement.

              

      

       

    

      
      
        	
                 
      

              	
                7To
      be added if the consent of the Issuing Bank is required by the terms of
      the Credit Agreement.

              

      

       

    

    
      
        
          --

        

         

      

      
         

        
          

        

      

      
         

      

    

    Annex
1

    

    To
Assignment and Acceptance Agreement

    

    Standard
Terms and Conditions

     

    1.Representations and
Warranties.

     

    1.1.Assignor.  The
Assignor (a) represents and warrants that (i) it is the legal and beneficial
owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of
any lien, encumbrance or other adverse claim and (iii) it has full power and
authority, and has taken all action necessary, to execute and deliver this
Assignment Agreement and to consummate the transactions contemplated hereby; and
(b) assumes no responsibility with respect to (i) any statements, warranties or
representations made in or in connection with the Credit Agreement or any other
Credit Document, (ii) the execution, legality, validity, enforceability
genuineness, sufficiency or value of the Credit Documents or any collateral
thereunder, (iii) the financial condition of the Borrower or AGL Resources Inc.
or any of their Subsidiaries or Affiliates or any other Person obligated in
respect of any Credit Document, or (iv) the performance or observance by the
Borrower or AGL Resources Inc. or any of their Subsidiaries or Affiliates or any
other Person of any of their respective obligations under any Credit
Document.

     

    1.2.Assignee.  The
Assignee (a) represents and warrants that (i) it has full power and authority,
and has taken all action necessary, to execute and deliver this Assignment
Agreement and to consummate the transactions contemplated hereby and to become a
Lender under the Credit Agreement, (ii) it meets all requirements of an Eligible
Assignee under the Credit Agreement (subject to receipt of such consents as may
be required under the Credit Agreement), (iii) from and after the Effective
Date, it shall be bound by the provisions of the Credit Agreement as a Lender
thereunder and, to the extent of the Assigned Interest, shall have all
obligations of a Lender thereunder, (iv) it has received a copy of the Credit
Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 5.1 or 6.1 thereof, as applicable, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment Agreement and to purchase
the Assigned Interest on the basis of which it has made such analysis and
decision independently and without reliance on the Administrative Agent or any
other Lender, and (v) if it is not a United States person (as provided in
Section 3.9 of the Credit Agreement), attached hereto is any documentation
required to be delivered by it pursuant to the terms of the Credit Agreement,
duly completed and executed by the Assignee; and (b) agrees that (i) it will,
independently and without reliance on the Administrative Agent, the Assignor 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 the Credit Documents, and (ii) it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Documents are required to be performed by it as a Lender.

     

    2.Payments.  From and
after the Effective Date, and unless otherwise agreed, the Administrative Agent
shall make all payments in respect of the Assigned Interest (including payments
of principal, interest, fees and other amounts) to the Assignor for amounts
which have accrued to but excluding the Effective Date and to the Assignee for
amounts which have accrued from and after the Effective Date.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    3.General
Provisions.  This Assignment Agreement shall be binding upon,
and inure to the benefit of, the parties hereto and their respective successors
and assigns.  This Assignment Agreement may be executed in any number
of counterparts, which together shall constitute one
instrument.  Delivery of an executed counterpart of a signature page
of this Assignment Agreement by telecopy shall be effective as delivery of a
manually executed counterpart of this Assignment Agreement.  This
Assignment Agreement shall be governed by, and construed in accordance with, the
law of the State of New York.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Annex III

    

    Form
of Compliance Certificate

     

    This
Compliance Certificate is delivered to you pursuant to Section 6.2(a) of the
Letter of Credit and Security Agreement, dated as of September 4, 2008, as
amended, restated, supplemented or modified from time to time (the “Credit Agreement”), among
Pivotal Utility Holdings, Inc., AGL Resources Inc., the banks and other
financial institutions or entities from time to time parties thereto (the “Lenders”), Bank of America,
N.A., as the Administrative Agent, The Bank of Tokyo-Mitsubishi UFJ, Ltd., as
Syndication Agent, and Bank of America, N.A., as Issuing Bank.  Terms
defined in the Credit Agreement and not otherwise defined herein are used herein
with the meanings so defined.

     

    1.I am
the duly elected, qualified and acting [Chief Financial Officer] [Treasurer] of
the Guarantor.

     

    2.I have
reviewed and am familiar with the contents of this Certificate.

     

    3.I have
reviewed the terms of the Credit Agreement and the other Credit Documents and
have made or caused to be made under my supervision, a review in reasonable
detail of the transactions and condition of the Guarantor and its Subsidiaries
(including any Unrestricted Subsidiaries) during the accounting period covered
by the financial statements (including the separate financial statements of any
Unrestricted Subsidiaries) attached hereto as Attachment 1 (the “Financial
Statements”).  Such review did not disclose the existence
during or at the end of the accounting period covered by the Financial
Statements, and I have no knowledge of the existence, as of the date of this
Certificate, of any condition or event which constitutes a Default or Event of
Default [, except as set forth below].

     

    4.Attached
hereto as Attachment 2 are the computations showing compliance with the
covenants set forth in Section 7.1 of the Credit Agreement.

     

    [Signature
on the Following Page]

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    In
Witness Whereof, I execute this Certificate this ___ day of _________,
______.

     

    
      	
               
      

            	
              AGL
      Resources Inc.

            

    

     

    
      	
               
      

            	
              By:

            

    

    
      	
               
      

            	
              Name:

            

    

    
      	
               
      

            	
              Title:

            

    

    

    
      
        
          --

        

         

      

      
         

        
          

        

      

      
         

      

    

    Attachment
1

    

    to
Exhibit B

     

    [Attach
Applicable Financial Statements]

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Attachment
2

    

    to
Exhibit B

     

    The
information described herein is as of ____________, 20__, and pertains to the
period from ____________________, 20__ to _________________, 20__.

     

    [Set
forth Covenant Calculations]

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Annex IV

    

    Form
of Endorsement to Bond Insurance Policy

    

    The
Policy (Policy No. 12830BE) to which this endorsement is attached and of which
it forms a part is hereby amended to provide that the payment by Ambac to the
Insurance Trustee, for the benefit of the Bondholders, of the principal of and
interest on the Bonds which shall become Due for Payment but which are unpaid by
reason of Nonpayment by the Issuer shall include any Scheduled Principal Payment
and any Scheduled Interest Payment (as each term is defined below) at the Bank
Rate (as defined in the Trust Indenture, dated as of June 1, 1996, as amended
and supplemented by the First Supplement to Trust Indenture, dated as of
September 1, 2008 (the “Supplement”), by and between
The New Jersey Economic Development Authority and The Bank of New York Mellon,
as successor trustee (as modified by the Supplement, the “Indenture”)).  As
used herein, “Scheduled Principal Payment” means any principal amount that is
Due for Payment according to the original payment schedule applicable to the
Bonds without giving effect to any advancement of the maturity of Bonds (through
acceleration, mandatory redemption or otherwise) as may be provided in the
Indenture or the Letter of Credit Agreement (as defined in the Supplement), and
“Scheduled Interest Payment” means interest due on the Bonds on each regularly
scheduled interest payment date.  While the Bonds are Outstanding
under (and as such term is defined in) the Indenture, and notwithstanding
anything to the contrary in the Policy, “Bondolders” shall include the Bank and
the Administrative Agent (for the benefit of the lenders that are parties to the
Letter of Credit Agreement) to the extent an event of Nonpayment has occurred
with respect to amounts owed by the Company (as defined in the Supplement) under
Section 3.1 of the Letter of Credit Agreement.Exhibit 10.2

[FORM OF 3 YEAR EMPLOYMENT AGREEMENT]

EMPLOYMENT AGREEMENT

FOR

RALPH SCHANK

          This
Employment Agreement (the “Agreement”) is made effective as of the __ day of
____________, 2008 (the “Effective Date”), by and between Midwest Federal
Savings and Loan Association of St. Joseph (the “Association”), a federally
chartered stock savings association with its principal administrative office at
1901 Frederick Avenue, St. Joseph, Missouri 64501, and Ralph Schank
(“Executive”). The Association is a wholly-owned subsidiary of St. Joseph
Bancorp, Inc., a Maryland corporation (the “Company”). The Company has executed
this Agreement for the sole purpose of guaranteeing the Association’s financial
performance hereunder.

          WHEREAS,
Executive is currently employed as the President and Chief Executive Officer of
the Association, and the Association wishes to assure itself of the continued
services of Executive as President and Chief Executive Officer of the
Association for the period provided in this Agreement; and

          WHEREAS,
in order to induce Executive to remain in the employ of the Association and to
provide further incentive for Executive to achieve the financial and
performance objectives of the Association, the parties desire to enter into
this Agreement ; and 

           WHEREAS ,
the Board of Directors of the Bank finds it to be in the best interest of the
Bank to enter into this Agreement with Executive. 

          NOW,
THEREFORE, in consideration of the mutual covenants
herein contained, and upon the other terms and conditions hereinafter provided,
the parties hereby agree as follows:

	
 

	
 

	
1.

	
POSITION AND RESPONSIBILITIES

          During
the term of this Agreement Executive agrees to serve as President and Chief
Executive Officer of the Association, and will perform all duties and will have
all powers that are generally incident to the office of the President and Chief
Executive Officer. Without limiting the generality of the foregoing, Executive
will be responsible for the overall management of the Association, and will be
responsible for establishing the business objectives, policies and strategic
plans of the Association in conjunction with the Board of Directors (the
“Board”) of the Association. Executive also will be responsible for providing
leadership and direction to all departments or divisions of the Association,
and will be the primary contact between the Board and other officers and
employees of the Association. As President and Chief Executive Officer,
Executive will report directly to the Board. 

          Executive
also agrees to serve, if appointed or elected, as a director of the Association
or the Company, and as an officer and/or director of any subsidiary or
affiliate of the Association or the Company. This Agreement shall not be
construed as setting forth the rights and obligations of the Executive to the Company or the Company to the Executive (except
as specifically set forth in Section 10 hereof) nor shall it be construed to be
a contract of employment between the Executive and the Company or any affiliate
or subsidiary. 

	
 

	
 

	
2.

	
TERM

          (a)      Term
and Annual Review.
The term of this Agreement will begin as of the Effective Date and will
continue for thirty-six (36) full calendar months thereafter. Commencing on the
first anniversary date of this Agreement (the “Anniversary Date”) and
continuing on each Anniversary Date thereafter, the disinterested members of
the Board may extend the term of this Agreement for an additional year such
that the remaining term shall be thirty-six (36) months, unless written notice
of non-renewal is provided to Executive at least thirty (30) days prior to any
such Anniversary Date, in which case the term of this Agreement will become
fixed and will terminate at the end of the thirty-six (36) months following
such Anniversary Date. Prior to each Anniversary Date, the disinterested
members of the Board will conduct a comprehensive performance evaluation and
review of Executive for purposes of determining whether to extend this
Agreement, and the results thereof will be included in the minutes of the
Board’s meeting. 

          (b)      Continued
Employment Following Expiration of
Term. Nothing in this Agreement shall
mandate or prohibit a continuation of Executive’s employment following the expiration
of the term of this Agreement, upon such terms and conditions as the
Association and Executive may mutually agree.

	
 

	
 

	
3.

	
LOYALTY AND OUTSIDE ACTIVITIES

          During
the period of his employment hereunder, except for periods of absence occasioned
by illness, reasonable vacation periods, and reasonable leaves of absence,
Executive will devote all of his business time, attention, skill and efforts to
the faithful performance of his duties under this Agreement, including
activities and duties directed by the Board. Notwithstanding the preceding
sentence, subject to the approval of the Board, Executive may serve as a member
of the board of directors of business, community and charitable organizations,
provided that in each case such service shall not materially interfere with the
performance of his duties under this Agreement, adversely affect the reputation
of the Association, or present any conflict of interest. Executive will present
annually to the Board for its review and approval, a list of organizations in
which Executive is participating or proposes to participate. T he
Association will reimburse Executive his reasonable expenses associated
therewith , in accordance with the Bank’s policy for such reimbursements or
as determined by the Bank’s Board , to the extent the Association deems
Executive’s participation therein to be in the best interest of the Bank. 

	
 

	
 

	
4.

	
COMPENSATION AND REIMBURSEMENT

          (a)      Base
Salary.
In consideration of Executive’s performance of the responsibilities and duties
set forth in Section 1, the Association will provide Executive the compensation
specified in this Agreement. The Association will pay Executive a salary of $ 80,004.00
per year (“Base Salary”). Such Base Salary will be payable in accordance with
the customary payroll practices of the Association. During the period of this
Agreement, the Board, or a Committee designated by
the Board, will review Executive’s Base Salary at least annually, and the Board
may increase, but not decrease Executive’s Base Salary (except for a decrease
that is not in excess of any decrease that is generally applicable to all
employees of the Association). Any increase in Base Salary will become the
“Base Salary” for purposes of this Agreement.

2

           To
the extent that Executive performs any services for the Company or an affiliate
or subsidiary, any compensation paid to Executive such services shall be paid
to Executive by such entity and shall not be paid by the Bank unless the Bank
receives reimbursement for such payment from such entity, as required by
Section 23A and 23B of the Federal Reserve Act. 

          (b)      Bonus
and Incentive Compensation.
Executive will be entitled to participate in any incentive compensation and
bonus plans or arrangements of the Association. Such incentive compensation
will be paid in cash in accordance with the terms of such plans or
arrangements, or on a discretionary basis by the Board or a Committee
designated by the Board. Nothing paid to Executive under any such plans or
arrangements will be deemed to be in lieu of other compensation to which
Executive is entitled under this Agreement. 

          (c)      Benefit
Plans.
Executive will be entitled to participate in all employee benefit plans,
arrangements and perquisites substantially equivalent to those in which
Executive was participating or otherwise deriving benefit from immediately
prior to the beginning of the term of this Agreement. The Association will not,
without Executive’s prior written consent, make any changes in such plans,
arrangements or perquisites which would adversely affect Executive’s rights or
benefits thereunder (other than a change or reduction that would apply
uniformly to other participating officers and employees of the Bank). Without
limiting the generality of the foregoing provisions of this Section 4(c),
Executive also will be entitled to participate in or receive benefits under any
employee benefit plans including but not limited to, stock benefit plans,
retirement plans, supplemental retirement plans, pension plans, profit-sharing
plans, health-and-accident plans, medical coverage or any other employee
benefit plan or arrangement made available by the Association in the future to
its senior executives and key management employees, subject to and on a basis
consistent with the terms, conditions and overall administration of such plans
and arrangements. 

          (d)      Vacation
and Leave.
Executive will be entitled to paid vacation time each year during the term of
this Agreement (measured on a fiscal or calendar year basis, in accordance with
the Association’s usual practices), as well as sick leave, holidays and other
paid absences in accordance with the Association’s policies and procedures for
senior executives. Any unused paid time off during an annual period will be
treated in accordance with the Association’s personnel policies as in effect
from time to time.

          (e)      Expense
Reimbursements. During the term of this Agreement,
the Association will reimburse Executive for all reasonable travel,
entertainment and other reasonable expenses incurred by Executive during the
course of performing his obligations under this Agreement, including, without
limitation, fees for memberships in such organizations as Executive and the
Board mutually agree are necessary and appropriate in connection with the
performance of his duties under this Agreement, upon substantiation of such
expenses in accordance with applicable policies and procedures of the
Association. 

3

	
 

	
 

	
5.

	
WORKING FACILITIES

          Executive’s
principal place of employment will be at the Association’s principal executive
offices. The Association will provide Executive at his principal place of
employment, a private office, secretarial and other support services and
facilities suitable to his position with the Association and necessary or
appropriate in connection with the performance of his duties under this
Agreement. 

	
 

	
 

	
6.

	
TERMINATION AND TERMINATION PAY

          Subject
to Section 7 of this Agreement which governs a termination in the event of a
Change in Control, Executive’s employment under this Agreement may be
terminated in the following circumstances:

          (a)      Death.
Executive’s employment under this Agreement will terminate upon his death
during the term of this Agreement, in which event Executive’s estate or
beneficiary will receive the compensation due to Executive through the last day
of the calendar month in which his death occurred, and the Association will
continue to provide for Executive’s family non-taxable medical and
dental benefits for one (1) year after Executive’s death, substantially
comparable to the coverage maintained by the Association for Executive and his
family prior to his death.

          (b)      Retirement.
This Agreement will terminate upon Executive’s “Retirement” under the
retirement benefit plan or plans of the Association in which he participates.
Executive will not be entitled to the termination benefits specified in Section
6 or 7 hereof in the event of termination due to Retirement. For purposes of
this Agreement, termination of Executive’s employment based on retirement shall
include termination of Executive’s employment by the Board for any reason after
Executive attains the age of [sixty-five (65)]. 

          (c)      Disability.

	
 

	
 

	
 

	
 

	
(i)

	
The Board
 may terminate Executive’s employment after having determined Executive is
 “Disabled.” For purposes of this Agreement, Executive will be considered
 “Disabled” and the Board will have the right to terminate this Agreement due
 to Executive’s Disability, in any case in which it is determined: (A) by a
 duly licensed physician selected by the Association, that Executive is unable
 to engage in any substantial gainful activity by reason of any medically
 determinable physical or mental impairment which can be expected to result in
 death, or last for a period of not less than 12 months, (B), or by reason of
 the condition described in “(A),” the Executive is receiving income
 replacement benefits for a period of not less than three months under an
 accident and health plan covering employees of the Association, or (C) by the
 Social Security Administration, that Executive is disabled. 

4

	
 

	
 

	
 

	
 

	
(ii)

	
In the event
 the Board determines that Executive is Disabled, Executive will no longer be
 obligated to perform services under this Agreement. Upon Executive’s
 termination due to Disability, the Association will cause to be
 continued life insurance and non-taxable medical and dental coverage
 substantially comparable to the coverage maintained by the Association for
 Executive prior to his termination, provided, however, such medical and
 dental coverage shall cease upon the earlier of (i) three (3) years from the
 date of termination or (ii) the date Executive becomes eligible for Medicare
 coverage; provided further that if Executive is covered by family coverage or
 coverage for self and a spouse, then Executive’s family or spouse shall
 continue to be covered for the remainder of the three (3) year period, or in
 the case of the spouse, until the spouse becomes eligible for Medicare
 coverage or obtains health care coverage elsewhere, whichever period is less.

          (d)      Termination
for Cause.

	
 

	
 

	
 

	
 

	
 

	
(i)

	
The Board
 may by written notice to Executive in the form and manner specified in this
 paragraph, immediately terminate his employment at any time for “Cause.”
 Executive shall have no right to receive compensation or other benefits for
 any period after termination for Cause, except for already vested benefits.
 Termination for Cause shall mean termination because of, in the good faith
 determination of the Board, Executive’s:

	
 

	
 

	
 

	
 

	
(1)

	
personal
 dishonesty;

	
 

	
 

	
 

	
 

	
(2)

	
incompetence;

	
 

	
 

	
 

	
 

	
(3)

	
willful
 misconduct;

	
 

	
 

	
 

	
 

	
(4)

	
breach of
 fiduciary duty involving personal profit;

	
 

	
 

	
 

	
 

	
(5)

	
material
 breach of the Association’s Code of Ethics;

	
 

	
 

	
 

	
 

	
(6)

	
material
 violation of the Sarbanes-Oxley requirements for officers of public companies
 that in the reasonable opinion of the Board will likely cause substantial
 financial harm or substantial injury to the reputation of the Association;

	
 

	
 

	
 

	
 

	
(7)

	
intentional
 failure to perform stated duties;

	
 

	
 

	
 

	
 

	
(8)

	
willful
 violation of any law, rule or regulation (other than traffic violations or
 similar offenses), any felony conviction, any violation of law involving
 moral turpitude, or any violation of a final cease-and-desist order; or

	
 

	
 

	
 

	
 

	
(9)

	
material
 breach by Executive of any provision of this Agreement.

	
 

	
 

	
 

	
 

	
(ii)

	
Notwithstanding
 the foregoing, Executive’s termination for Cause will not become effective
 unless the Association has delivered to Executive a copy of a resolution duly
 adopted by the Board, at a meeting of the Board called and held for
 the purpose of finding that, in the good faith opinion of the Board,
 Executive was guilty of the conduct described above and specifying the
 particulars of such conduct.

5

          (e)      Voluntary
Termination by Executive.
In addition to his other rights to terminate his employment under this
Agreement, Executive may voluntarily terminate employment during the term of
this Agreement upon at least sixty (60) days prior written notice to the Board.
Upon Executive’s voluntary termination, he will receive only his compensation
and vested rights and benefits to the date of his termination. Following his
voluntary termination of employment under this Section 6(e), Executive will be
subject to the restrictions set forth in Sections 9(a) and 9(b) of this
Agreement.

          (f)      Termination
Without Cause or With Good Reason.

	
 

	
 

	
 

	
 

	
 

	
(i)

	
In addition
 to termination pursuant to Sections 6(a) through 6(e), the Board may, by
 written notice to Executive, immediately terminate his employment at any time
 for a reason other than Cause (a termination “Without Cause”), and Executive
 may, by written notice to the Board, terminate this Agreement at any time
 within sixty (60) days following an event constituting “Good Reason,” as
 defined below (a termination “With Good Reason”); provided, however, that the
 Association shall have thirty (30) days to cure the “Good Reason” condition,
 but the Association may waive its right to cure. Any termination of
 Executive’s employment, other than Termination for Cause shall have no effect
 on or prejudice the vested rights of Executive under the Association’s
 qualified or non-qualified retirement, pension, savings, thrift,
 profit-sharing or stock bonus plans, group life, health (including
 hospitalization, medical and major medical), dental, accident and long term
 disability insurance plans or other employee benefit plans or programs, or
 compensation plans or programs in which Executive was a participant. 

	
 

	
 

	
 

	
 

	
(ii)

	
In the event
 of termination under this Section 6(f), Executive will receive a cash lump
 sum payment equal to three (3) times the sum of (i) his Base Salary and (ii)
 highest rate of bonus paid during the three years prior to his termination of
 employment. Such severance payment shall be paid within thirty (30) days
 following Executive’s termination of employment. Notwithstanding the
 foregoing, Executive shall not be entitled to any payments or benefits under
 this Section 6 unless and until Executive executes a release of his claims
 against the Bank, the Company and any affiliate, and their officers,
 directors, successors and assigns, releasing said persons from any and all
 claims, rights, demands, causes of action, suits, arbitrations or grievances
 relating to the employment relationship, including claims under the Age
 Discrimination in Employment Act, but not including claims for benefits under
 tax-qualified plans or other benefit plans in which Executive is vested,
 claims for benefits required by applicable law or claims with respect to
 obligations set forth in this Agreement that survive the termination of this
 Agreement.

6

	
 

	
 

	
 

	
 

	
 

	
(iii)

	
In addition,
 the Association will cause to be continued life insurance and non-taxable
 medical and dental coverage substantially comparable to the coverage
 maintained by the Association for Executive prior to his termination,
 provided, however, such medical and dental coverage shall cease upon the
 earlier of (i) three (3) years from the date of termination or (ii) the date
 Executive becomes eligible for Medicare coverage; provided further that if
 Executive is covered by family coverage or coverage for self and a spouse,
 then Executive’s family or spouse shall continue to be covered for the
 remainder of the three (3) year period, or in the case of the spouse, until
 the spouse becomes eligible for Medicare coverage or obtains healthcare
 coverage elsewhere, whichever period is less.

	
 

	
 

	
 

	
 

	
(iv)

	
“Good
 Reason” exists if, without Executive’s express written consent, any of the
 following occurs:

	
 

	
 

	
 

	
 

	
 

	
(1)

	
a failure to
 elect or reelect or to appoint or reappoint Executive as President and Chief
 Executive Officer; 

	
 

	
 

	
 

	
 

	
 

	
 

	
(2)

	
a material
 change in Executive’s position to become one of lesser responsibility,
 importance, or scope from the position and attributes thereof described in
 Section 1 above;

	
 

	
 

	
 

	
 

	
 

	
 

	
(3)

	
a
 liquidation or dissolution of the Association other than liquidations or
 dissolutions that are caused by reorganizations that do not affect the status
 of Executive;

	
 

	
 

	
 

	
 

	
 

	
 

	
(4)

	
a material
 reduction in Executive’s Base Salary and benefits (other than a reduction
 authorized under Section 4(a), hereof); 

	
 

	
 

	
 

	
 

	
 

	
 

	
(5)

	
a relocation
 of Executive’s principal place of employment by more than 30 miles from its
 location as of the date of this Agreement; or

	
 

	
 

	
 

	
 

	
 

	
 

	
(6)

	
a material
 breach of this Agreement by the Association.

	
 

	
 

	
 

	
 

	
 

	
(v)

	
Notwithstanding
 the foregoing, a reduction or elimination of Executive’s benefits under one
 or more benefit plans maintained by the Association as part of a good faith,
 overall reduction or elimination of such plans or benefits applicable to all
 participants in a manner that does not discriminate against Executive (except
 as such discrimination may be necessary to comply with law), will not
 constitute an event of Good Reason or a material breach of this Agreement.

	
 

	
 

	
 

	
 

	
(vi)

	
Notwithstanding
 anything else in this Section 6(f), Executive’s employment shall not be
 deemed to have been terminated pursuant to this Section 6(f) or for
 purposes of Code Section 409A, 

7

	
 

	
 

	
 

	
 

	
 (vii) 

	
unless and
 until the Executive has a Separation from Service within the meaning of
 Section 409A of the Internal Revenue Code of 1986, as amended (the
 “Code”). For purposes of this Agreement, a “Separation from Service” shall
 have occurred if the Association and Executive reasonably anticipate that
 either no further services will be performed by the Executive after the date
 of the termination (whether as an employee or as an independent contractor)
 or the level of further services performed will not exceed 49% of the average
 level of bona fide services in the thirty-six (36) months immediately
 preceding the termination. For all purposes hereunder, the definition of
 Separation from Service shall be interpreted consistent with Treasury
 Regulation Section 1.409A-1(h)(ii). If Executive is a “Specified Employee,”
 as defined in Code Section 409A to the extent necessary to avoid penalties
 under Code Section 409A, such payment or a portion of such payment (to the
 minimum extent possible) shall be delayed and shall be paid on the first day
 of the seventh month following Executive’s Separation from Service.

          (g)      Termination
and Board Membership.
To the extent Executive is a member of the Board on the date of termination of
employment with the Association (other than a termination due to Retirement or
in connection with a Change in Control), Executive will resign from the Board
immediately following such termination of employment with the Association.
Executive will be obligated to tender this resignation regardless of the method
or manner of termination (other than termination due to Retirement or in
connection with a Change in Control), and such resignation will not be
conditioned upon any event or payment.

	
 

	
 

	
7.

	
TERMINATION IN CONNECTION WITH A CHANGE IN CONTROL

          (a)      Change
in Control Defined.
For purposes of this Agreement, a “Change in Control” means any of the
following events:

	
 

	
 

	
 

	
 

	
(i)

	
Merger:
 The Company or the Association merges into or consolidates with another
 entity, or merges another bank or corporation into the Association or the
 Company, and as a result, less than a majority of the combined voting power
 of the resulting corporation immediately after the merger or consolidation is
 held by persons who were stockholders of the Company or the Association
 immediately before the merger or consolidation;

	
 

	
 

	
 

	
 

	
(ii)

	
Acquisition
 of Significant Share Ownership: There is filed, or
 is required to be filed, a report on Schedule 13D or another form or schedule
 (other than Schedule 13G) required under Sections 13(d) or 14(d) of the
 Securities Exchange Act of 1934, as amended, if the schedule discloses that
 the filing person or persons acting in concert has or have become the
 beneficial owner of 25% or more of a class of the Company’s or the
 Association’s voting securities; provided, however, this clause (ii) shall
 not apply to beneficial ownership of the Company’s or the Association’s
 voting shares held in a fiduciary capacity by an entity of which the Company
 directly or indirectly beneficially owns 50% or more of its outstanding
 voting securities;

8

	
 

	
 

	
 

	
 

	
(iii)

	
Change in
 Board Composition: During any period of two
 consecutive years, individuals who constitute the Company’s or the
 Association’s Board of Directors at the beginning of the two-year period
 cease for any reason to constitute at least a majority of the Company’s or
 the Association’s Board of Directors; provided, however, that for purposes of
 this clause (iii), each director who is first elected by the board (or first
 nominated by the board for election by the stockholders or corporators) by a
 vote of at least two-thirds (2/3) of the directors who were directors at the beginning
 of the two-year period shall be deemed to have also been a director at the
 beginning of such period; or

	
 

	
 

	
 

	
 

	
(iv)

	
Sale of
 Assets: The Company or the Association sells to a
 third party all or substantially all of its assets.

          (b)      Termination.
If within the period ending one year after a Change in Control, (i) the
Association terminates Executive’s employment Without Cause, or (ii) Executive
voluntarily terminates his employment With Good Reason, the Association will,
within ten (10) calendar days of the termination of Executive’s employment,
make a lump-sum cash payment to him equal to three (3) times the sum of (i)
Executive’s Base Salary and (ii) highest rate of bonus paid during the three
years prior to his termination of employment. Such severance payment shall be
paid within thirty (30) days following Executive’s termination of employment..
In addition, the Association will cause to be continued life insurance and
medical and dental coverage substantially comparable to the coverage maintained
by the Association for Executive prior to his termination, provided, however,
such medical and dental coverage shall cease upon the earlier of (i) three (3)
years from the date of termination or (ii) the date Executive becomes eligible for
Medicare coverage; provided further that if Executive is covered by family
coverage or coverage for self and a spouse, then Executive’s family or spouse
shall continue to be covered for the remainder of the three (3) year period, or
in the case of the spouse, until the spouse becomes eligible for Medicare
coverage or obtains healthcare coverage elsewhere, whichever period is less.

          (c)      Separation
from Service.
Notwithstanding Sections 7(a) or 7(b) above, Executive shall not be deemed to have
been terminated following a Change in Control unless and until the Executive
has a Separation from Service within the meaning of Code Section 409A. For
purposes of this Agreement, a “Separation from Service” shall have occurred if
the Association and Executive reasonably anticipate that either no further
services will be performed by the Executive after the date of the termination
(whether as an employee or as an independent contractor) or the level of
further services performed will not exceed 49% of the average level of bona
fide services in the thirty-six (36) months immediately preceding the
termination. For all purposes hereunder, the definition of Separation from
Service shall be interpreted consistent with Treasury Regulation Section
1.409A-1(h)(ii). If Executive is a “Specified Employee,” as defined in Code
Section 409A to the extent necessary to avoid penalties under Code Section
409A, such payment or a portion of such payment (to the minimum extent
possible) shall be delayed and shall be paid on the first day of the seventh
month following Executive’s Separation from Service. 

9

          (d)      Survival.
The provisions of this Section 7 and Sections 10 through 20, including the
defined terms used in such sections, shall continue in effect until the later
of the expiration of this Agreement or one year following a Change in Control.

          (e)      Corporate
Reorganizations.
Notwithstanding anything in this Section 7 to the contrary, a “Change in
Control” for purposes of this Agreement shall not include any corporate
restructuring transaction by the Association or the Company, including, but not
limited to a mutual-to-stock conversion.

	
 

	
 

	
8.

	
NOTICE

          (a)      Notice
of Termination.
A “notice of termination” shall mean a written notice which shall indicate the
specific termination provision in this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of Executive’s employment under the provision so
indicated. 

          (b)      Date
of Termination.
“Date of termination” shall mean (i) if Executive’s employment is terminated
for Disability, thirty (30) days after a notice of termination is given
(provided that he shall not have returned to the performance of his duties on a
full-time basis during such thirty (30) day period), or (ii) if Executive’s
employment is terminated for any other reason, the date specified in the notice
of termination.

          (c)      Good
Faith Resolution.
If the party receiving a notice of termination desires to dispute or contest
the basis or reasons for termination, the party receiving the notice of
termination must notify the other party within thirty (30) days after receiving
the notice of termination that such a dispute exists, and shall pursue the
resolution of such dispute in good faith and with reasonable diligence pursuant
to Section 17 of this Agreement. During the pendency of any such dispute, the
Association shall not be obligated to pay Executive compensation or other
payments beyond the date of termination. Any amounts paid to Executive upon
resolution of such dispute under this Section shall be offset against or reduce
any other amounts due under this Agreement.

	
 

	
 

	
9.

	
POST-TERMINATION OBLIGATIONS/NON-COMPETE.

          (a)      Non-Solicitation/Non-Compete.
Executive hereby covenants and agrees that, for a period of two (2) years
following his termination of employment with the Association (other than a
termination of employment following a Change in Control), he shall not, without
the written consent of the Association, either directly or indirectly:

	
 

	
 

	
 

	
 

	
(i)

	
solicit,
 offer employment to, or take any other action intended (or that a reasonable
 person acting in like circumstances would expect) to have the effect of
 causing any officer or employee of the Association, or of any holding company
 of the Association, or any of their respective subsidiaries or affiliates, to
 terminate his or her employment and accept employment or become affiliated with,
 or provide services for compensation in any capacity whatsoever to, any
 business whatsoever that competes with the business of the Association, or of
 any holding company of the Association, or any of their direct or indirect
 subsidiaries or affiliates, that has
 headquarters or offices within twenty-five (25) miles of any location(s) in
 which the Association, or any holding company of the Association, has
 business operations or has filed an application for regulatory approval to
 establish an office;

10

	
 

	
 

	
 

	
 

	
(ii)

	
become an officer,
 employee, consultant, director, independent contractor, agent, joint
 venturer, partner or trustee of
 any savings bank, savings and loan association, savings and loan holding
 company, credit union, bank or bank
 holding company, insurance company
 or agency, any mortgage or loan broker or any other entity that
 competes with the business of the Association, or any holding company of the
 Association, or any of their direct or indirect subsidiaries or affiliates
 that: (i) has a headquarters within twenty-five (25) miles of any location(s)
 in which the Association, or any holding company of the Association, has
 business operations or has filed an application for regulatory approval to
 establish an office (the “Restricted Territory”) or (ii) has one or more
 offices, but is not headquartered, within the Restricted Territory, but in
 the latter case, only if Executive would be employed, conduct business or
 have other responsibilities or duties within the Restricted Territory; or

	
 

	
 

	
 

	
 

	
(iii)

	
solicit,
 provide any information, advice or recommendation or take any other action
 intended (or that a reasonable person acting in like circumstances would
 expect) to have the effect of causing any customer of the Association to
 terminate an existing business or commercial relationship with the
 Association.

          (b)      Confidentiality.
Executive recognizes and acknowledges that the knowledge of the business
activities, plans for business activities, and all other proprietary information
of the Association, or any holding company of the Association, as it may exist
from time to time, are valuable, special and unique assets of the business of
the Association, or any holding company of the Association. Executive will not,
during or after the term of his employment, disclose any knowledge of the past,
present, planned or considered business activities or any other similar
proprietary information of the Association, or any holding company of the
Association, to any person, firm, corporation, or other entity for any reason
or purpose whatsoever unless expressly authorized by the Board or required by
law. Notwithstanding the foregoing, Executive may disclose any knowledge of
banking, financial and/or economic principles, concepts or ideas which are not
solely and exclusively derived from the business plans and activities of the
Association, or any holding company of the Association. Further, Executive may
disclose information regarding the business activities of the Association, or
any holding company of the Association, to any bank regulator having regulatory
jurisdiction over the activities of the Association, or any holding company of
the Association, pursuant to a formal regulatory request. In the event of a
breach or threatened breach by Executive of the provisions of this Section, the
Association, or any holding company of the Association, will be entitled to an
injunction restraining Executive from disclosing, in whole or in part, the
knowledge of the past, present, planned or considered business activities of
the Association, or any holding company of the Association, or any other
similar proprietary information, or from rendering any services to any person,
firm, corporation, or other entity to whom such knowledge, in whole or in part,
has been disclosed or
is threatened to be disclosed. Nothing herein will be construed as prohibiting
the Association, or any holding company of the Association, from pursuing any
other remedies available to the Association, or any holding company of the Association,
for such breach or threatened breach, including the recovery of damages from
Executive.

11

          (c)      Information/Cooperation.
Executive shall, upon reasonable notice, furnish such information and
assistance to the Association as may be reasonably required by the Association,
in connection with any litigation in which it or any of its subsidiaries or
affiliates is, or may become, a party; provided, however, that Executive shall
not be required to provide information or assistance with respect to any
litigation between the Executive and the Association or any of its subsidiaries
or affiliates.

          (d)      Reliance.
All payments and benefits to Executive under this Agreement shall be subject to
Executive’s compliance with this Section 9, to the extent applicable. The
parties hereto, recognizing that irreparable injury will result to the
Association, its business and property in the event of Executive’s breach of
this Section 9, agree that, in the event of any such breach by Executive, the
Association will be entitled, in addition to any other remedies and damages
available, to an injunction to restrain the violation hereof by Executive and
all persons acting for or with Executive. Executive represents and admits that
Executive’s experience and capabilities are such that Executive can obtain
employment in a business engaged in other lines of business than the
Association, and that the enforcement of a remedy by way of injunction will not
prevent Executive from earning a livelihood. Nothing herein will be construed
as prohibiting the Association, or any holding company of the Association, from
pursuing any other remedies available to them for such breach or threatened
breach, including the recovery of damages from Executive.

	
 

	
 

	
10.

	
SOURCE OF PAYMENTS

          All
payments provided in this Agreement shall be timely paid in cash or check from
the general funds of the Association, provided, however, that the Company
hereby guarantees payment and provision of all amounts and benefits due
hereunder to Executive.

	
 

	
 

	
11.

	
REQUIRED REGULATORY PROVISIONS

          (a)      If
Executive is suspended from office and/or temporarily prohibited from
participating in the conduct of the Association’s affairs by a notice served
under Section 8(e)(3) (12 USC §1818(e)(3)) or 8(g)(1) (12 USC §1818(g)(1)) of
the Federal Deposit Insurance Act (“FDIA”), the Association’s obligations under
this Agreement shall be suspended as of the date of service, unless stayed by
appropriate proceedings. If the charges in the notice are dismissed, the
Association may in its discretion (i) pay Executive all or part of the
compensation withheld while its contract obligations were suspended and (ii)
reinstate (in whole or in part) any of its obligations which were suspended.

          (b)      If
Executive is removed and/or permanently prohibited from participating in the
conduct of the Association’s affairs by an order issued under Section 8(e)(4)
(12 U.S.C. §1818(e)(4)) or 8(g)(1) (12 U.S.C. §1818(g)(1)) of FDIA, all obligations
of the Association under this
Agreement shall terminate as of the effective date of the order, but vested
rights of the contracting parties shall not be affected.

12

          (c)      If
the Association is in default as defined in Section 3(x)(1) (12 U.S.C.
§1813(x)(1)) of FDIA, all obligations under this Agreement shall terminate as
of the date of default, but this paragraph shall not affect any vested rights
of the contracting parties.

          (d)      All
obligations under this Agreement shall be terminated, except to the extent
determined that continuation of this Agreement is necessary for the continued
operation of the Association, (i) by the Director of OTS or his or her
designee, at the time the FDIC enters into an agreement to provide assistance
to or on behalf of the Association under the authority contained in Section
13(c) (12 U.S.C. §1823(c)) of FDIA; or (ii) by the Director of OTS or his or
her designee at the time the Director of OTS or his or her designee approves a supervisory
merger to resolve problems related to operations of the Association or when the
Association is determined by the Director of OTS or his or her designee to be
in an unsafe or unsound condition. Any rights of the parties that have already
vested, however, shall not be affected by such action.

          (e)      Notwithstanding
anything herein to the contrary, any payments to Executive by the Company,
whether pursuant to this Agreement or otherwise, are subject to and conditioned
upon their compliance with Section 18(k) of FDIA, 12 U.S.C. Section 1828(k),
and the regulations promulgated thereunder in 12 C.F.R. Part 359.

	
 

	
 

	
12.

	
NO ATTACHMENT; SUCCESSORS AND ASSIGNS

          (a)      Except
as required by law, no right to receive payments under this Agreement shall be
subject to anticipation, commutation, alienation, sale, assignment,
encumbrance, charge, pledge, or hypothecation, or to execution, attachment,
levy, or similar process or assignment by operation of law, and any attempt,
voluntary or involuntary, to effect any such action shall be null, void, and of
no effect.

          (b)      This
Agreement shall be binding upon, and inure to the benefit of Executive, the
Association and the Association’s successors and assigns.

	
 

	
 

	
13.

	
ENTIRE AGREEMENT; MODIFICATION AND WAIVER

          (a)      This
Agreement contains the entire agreement of the parties relating to the subject
matter hereof, and supercedes in its entirety any and all prior agreements,
understandings or representations relating to the subject matter hereof, except
that the parties acknowledge that this Agreement shall not affect any of the
rights and obligations of the parties under any agreement or plan entered into
with or by the Association pursuant to which the Executive may receive
compensation or benefits except as set forth in Section 6(d) hereof. 

          (b)      This
Agreement may not be modified or amended except by an instrument in writing
signed by each of the parties hereto.

          (c)      No
term or condition of this Agreement shall be deemed to have been waived, nor
shall there be any estoppel against the enforcement of any provision of this
Agreement, except by written instrument of the party charged with such waiver
or estoppel. No such written waiver shall be
deemed a continuing waiver unless specifically stated therein, and each such
waiver shall operate only as to the specific term or condition waived and shall
not constitute a waiver of such term or condition for the future as to any act
other than that specifically waived.

13

	
 

	
 

	
14.

	
SEVERABILITY

          If,
for any reason, any provision of this Agreement, or any part of any provision,
is held invalid, such invalidity shall not affect any other provision of this
Agreement or any part of such provision not held so invalid, and each such
other provision and part thereof shall to the full extent consistent with law
continue in full force and effect.

	
 

	
 

	
15.

	
HEADINGS FOR REFERENCE ONLY

          The
headings of sections and paragraphs herein are included solely for convenience
of reference and shall not control the meaning or interpretation of any of the
provisions of this Agreement.

	
 

	
 

	
16.

	
GOVERNING LAW

          This
Agreement shall be governed by the laws of the State of Missouri but only to
the extent not superseded by federal law.

	
 

	
 

	
17.

	
ARBITRATION

          Any
dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by binding arbitration, as an alternative to civil
litigation and without any trial by jury to resolve such claims, conducted by a
single arbitrator, mutually acceptable to the Association and Executive,
sitting in a location selected by the Association within fifty (50) miles from
the main office of the Association, in accordance with the rules of the
American Arbitration Association’s National Rules for the Resolution of
Employment Disputes (“National Rules”) then in effect. Judgment may be entered
on the arbitrator’s award in any court having jurisdiction. 

	
 

	
 

	
 18. 

	
INDEMNIFICATION

          (a)      Indemnification.
The Association agrees to indemnify Executive (and his heirs, executors, and
administrators), and to advance expenses related to this indemnification, to
the fullest extent permitted under Section 11(e) of this Agreement and
applicable law and regulations, including 12 C.F.R. Section 545.121, against
any and all expenses and liabilities that Executive reasonably incurs in
connection with or arising out of any action, suit, or proceeding in which he
may be involved by reason of his service as a director or officer of the
Association or any of its subsidiaries (whether or not he continues to be a
director or officer at the time of incurring any such expenses or liabilities).
Covered expenses and liabilities include, but are not limited to, judgments,
court costs, and attorneys’ fees and the costs of reasonable settlements,
subject to Board approval, if the action is brought against Executive in his
capacity as an officer or director of the Association or any of its
subsidiaries. Indemnification for expenses will not extend to matters related
to Executive’s termination for Cause. Notwithstanding anything in this Section
19 to the contrary, the Association will not be required to provide
indemnification prohibited by
applicable law or regulation. The obligations of this Section 19 will survive
the term of this Agreement by a period of six (6) years.

14

          (b)      Insurance.
During the period for which the Association must indemnify Executive, the
Association will provide Executive with coverage under a directors’ and
officers’ liability policy at the Association’s expense, that is at least
equivalent to the coverage provided to directors and senior executives of the
Association.

	
 

	
 

	
 19. 

	
SUCCESSORS AND ASSIGNS

          The
Association shall require any successor or assignee, whether direct or
indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Association, expressly and
unconditionally to assume and agree to perform the Association’s obligations
under this Agreement, in the same manner and to the same extent that the
Association would be required to perform if no such succession or assignment
had taken place.

[Remainder of Page Intentionally Blank]

15

SIGNATURES

          IN
WITNESS WHEREOF, the Association and the Company have caused this Agreement to
be executed by their duly authorized officers, and Executive has signed this
Agreement, on this ___ day of __________, 2008.

	
 

	
 

	
 

	
 

	
 

	
ATTEST:

	
 

	
MIDWEST FEDERAL SAVINGS AND LOAN
 ASSOCIATION OF ST. JOSEPH

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
By: 

	
 

	
 

	
 

	
 

	
Name 

	
 

	
 

	
 

	
 

	
Title

	
 

	
 

	
 

	
 

	
 

	
 

	
ATTEST:

	
 

	
ST. JOSEPH BANCORP, INC.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	
 

	
Name 

	
 

	
 

	
 

	
 

	
Title 

	
 

	
 

	
 

	
 

	
 

	
 

	
WITNESS:

	
 

	
EXECUTIVE

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	
 

	
 

	 

	
 

	
 

	
 

	
Ralph
 Schank, 

	
 

	
 

	
 

	
President
 and Chief Executive Officer

16

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